SELECT HARVESTS LIMITED — Interim / Quarterly Report 2014

Feb 27, 2014

Select Harvests Limited ("SHV")

Half Year ending 31 December 2013 - Results Presentation

28 February 2014

This presentation is provided for information purposes only and has been prepared using information provided by the company. The information contained in this presentation is not intended to be relied upon as advice to investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Investors should consider their own individual investment and financial circumstances in relation to any investment decision.

Certain statements contained in this presentation may constitute forward-looking statements or statements about future matters that are based upon information known and assumptions made as of the date of this presentation. These statements are subject to risks and uncertainties. Actual results may differ materially from any future results or performance expressed, predicted or implied by the statements contained in this presentation.

Agenda

Overview

Results Discussion & Analysis

Outlook

Summary

Appendices

• 1H14 Net Profit after Tax ("NPAT") of $18.4m, compared to Reported 1H13 Net Loss after Tax ("NLAT") of ($19.5m)
• 1H14 NPAT of $18.4m, compared to Underlying 1H13 NPAT of $8.4m (after excluding the after-tax impact of the write-down of the WA Almond Orchard Project from the 1H13 result) - up 118%
• 1H14 Earnings before Interest & Tax ("EBIT") of $27.0m, compared to Underlying 1H13 EBIT of $14.4m up 84%
• 1H14 Profit before Tax ("PBT") of $24.8m, compared to 1H13 Underlying PBT of $12.0m - up 106%
• Strong operating cashflow of $23.5m, compared to 1H13 cash flow of $11.6m - up 103%
• Gearing (Net Debt to Equity) 45.3%, up from 43.8% (Note includes $16.3m acquisition)
• 1H14 Earnings per Share ("EPS") 32.0 cents per share ("cps"), compared to Underlying 1H13 EPS of 14.8 cps - up 116%
• Interim Dividend declared of 11 cps (Record Date: 7 March 2014, Payment Date: 24 April 2014) up 267%

SHV is starting to deliver on its potential based on 2014 crop & price estimate

Overview

• Performance of both divisions improved considerably
  • Almond Division EBIT $25.0m (based on 2014 crop estimate) up 106%
  • Food Division EBIT $4.0m up 1%
• Capitalising on the benefits of integrated and more diversified business model
  • Almond Division significant improvement
  • Food Division stabilised and initiatives are beginning to impact
• One Select having a positive impact
  • Productivity gains, cost savings and working capital reductions
  • Balance Sheet has been steadily improving
• Growing future production base
  • Replanting program (570 acres removed, 150 acres replanted)
  • Increased geographic diversification into South Australia through orchard acquisition
  • Acquired 680 acres (275 hectares) mature orchards and 680 acres (275 hectares) land suitable for almonds in 1H14
• Growth opportunities
  • SHV in better shape to grow people, structures, processes, risk management, performance, funding, outlook

Developing a high performance culture and a strong platform for growth

Financial Results - Income Statement

Financial Result ($m)	1H13	1H14
	($m)	($m)
Revenue	100.7	98.7
EBITDA	17.3	28.8
Depreciation	(2.9)	(1.8)
EBIT	14.4	27.0
Interest	(2.4)	(2.2)
PBT	12.0	24.8
(Tax Expense)	(3.6)	(6.4)
NPAT pre-adjustments & pre-R&D benefit	8.4	18.4
WA Impairment (post tax)	(27.9)	-
NPAT -Reported	(19.5)	18.4
EPS –Exc WA impairment loss
(centsper share)	14.8	32.0
Interim Dividend –cents per share	3.0	11.0

EBIT of $27.0m (1H13 $14.4m) - up 88% Almond Div. $25.0m (1H13 $12.1m) up 106% Food Div. $4.0m (1H13 $4.0m) up 1% NPAT $18.4 m (1H13 $8.4m) - up 118% Interest costs $2.1m - down 7% EPS of 32.0 cps - up 116% Dividend of 11 cps fully franked – up 267%

Starting to demonstrate the potential of the business

Financial Results - Balance Sheet

($m)	Periodending	31/12/2012	31/12/2013
Current Assets excl. Cash		79.0	114.1
Cash		5.0	3.3
Non Current Assets		167.3	195.4
Total Assets		251.3	312.7
Current Liabilities (excl. Borrowings)		32.6	24.8
Borrowings		66.3	83.0
Non Current Liabilities (excl. Borrowings)		12.7	28.9
Total Liabilities		111.6	136.7
Total Equity		139.7	176.1
Net Debt		61.3	79.7
Net Debt/Equity		43.8%	45.3%
NTA/Share		$1.81	$2.40

Net Debt is $79.7m

Gearing (Net Debt to Equity) of 45%

• Marginally up on 1H13, but has fully funded an acquisition ($16.3m)
• If you back out the 1H14 orchard acquisition, gearing would have been 36%

Funding

New facility is giving sufficient room and flexibility to fund the growing SHV operations, acquisitions & replants

Gearing manageable, given strong cash generating nature & long life of orchard assets

Financial Results - Cash Flow

• Operating cash flow up at $23.5m
• Investing cash flows of ($20.3m)
  • Acquisition $16.6m
  • Tree replant $1.0m
  • Other $2.7m

Positive operating cash flow allowed

• Orchard replanting program
• Orchard acquisitions
• Dividend payments

The long term cash generating capability of Select is significant & becoming evident

Financial Results - Almond Division

	Reported
EBIT ($m)	1H13	1H14	Variance
Almond Division	12.1	25.0	106%

• Almond Division reported - one segment (post Olam)
• FY13 Crop finalised at 12,669 tonnes @A$6.60/kg (as at 30 June 2013 we advised 12,000 tonnes @ A$6.38/kg)
  • EBIT impact $3m in 1H14
• FY14 Initial Crop estimate
  • Harvest update Commence 18th February, interrupted by early season rain. No impact on estimate.
  • Yield estimate FY14 crop est. 12,600 tonnes (includes 900 tonne SA acquisition). Price estimate $8.30/kg
    • 25% of anticipated full year crop has actually been sold (and currency fixed avge. currency rate 0.90c)

Almond Division delivered a strong result – targeting top quartile performances

Financial Results - Almond Division

	Reported
EBIT ($m)	1H13	1H14	Variance
Almond Division	12.1	25.0	106%

• Costs tight management whilst supporting larger crop and changing some horticultural practices
• Processing Volume 18,915 tonnes total
  • 12,669 tonnes Select Harvests almonds
  • 6,246 tonnes third party almonds
• Contingent Liability
  • The Company is in dispute with Almas Almonds Limited, a company associated with two former Directors of Select Harvests, relating to the provision of orchard management services commencing in 2006. At this time, without a formal claim against the company, and after preliminary investigation, it is not possible to quantify any potential obligation. The company intends to vigorously defend its position.

Almond Division delivered a strong result – targeting top quartile performances

Financial Results - Food Division

	Reported
EBIT ($m)	1H13	1H14	Variance
Food Division	4.0	4.0	1%

Good result

• Revenue of A$64.5 million was down 13.6% (A$74.7 million 1H13)
• Driven by the loss of low margin private label contracts
• Sales growth
  • Industrial Industrial & Trading sales up 30% (both volume and price)
  • Packaged Goods Grocery channel remains challenging with rising commodity prices and tight margins
• Cost saving
  • Cost reductions driven by better labour management, increased machine and supply chain efficiency
• Broad Based Improved Performance
  • Customer Service avge. 99% over last 12 months
  • Consumer Complaints down 33% on prior year
  • Safety No Lost Time Injuries for past 12 months significant improvement on prior year

Underlying result is pleasing, given the transition underway in the Food Division

SHV - Strategy towards 2018

			Status
1.	CONTROL CRITICAL MASSOF ALMONDS	Secure the critical mass of nuts needed to maximizeprofitability and leverage the global almond opportunity.	Commenced
2.	IMPROVE YIELD & CROPVALUE	Improve yield and overall crop value by perfecting on-farmand farm to factory practices.	Commenced
3.	BE BEST IN CLASS SUPPLYCHAIN	Continuously improve our supply chain, achieving highquality, low cost and optimum capital utilisation.	Under Development
4.	INVEST IN INDUSTRIAL &TRADING DIVISION	Allocate resources to leverage our trading skills and growsales in the industrial channel.	Under Development
5.	TURN AROUND PACKAGEDFOOD BUSINESS	Develop a new model for the packaged food category thatwill deliver sustainable returns above the cost of capital.	Commenced
6.	FIX OUR SYSTEMS &PROCESSES	Develop the business systems and processesrequired to bea global industry leader.	Under Development
	7. ENGAGE WITH OUR PEOPLE& OUR STAKEHOLDERS	Engage with investors and our industry while developing theteam required to be a global industry leader.	Commenced

Industry - Outlook January

US Crop *

• Smaller crop
  • US 2013 Crop est. 2.0 billion lbs similar to 2012
  • 2nd largest crop in history
• Faster harvest
  • Harvest conditions near perfect
  • Faster shipping program
    • Up 5.3% YTD
    • US Domestic market up 12%
    • Exports up 3%
    • 48% of total supply shipped
  • Commitments (sold, not delivered) up 7% YTD
  • Quality of crop (kernel size) smallest average kernel size ever (source: Almond Insights 15/10/13)
  • Carry- in down 5% on 2012/13
• Spain
  • 2013 crop affected by frost and rain during bloom one of the worst crops in ten years

* Almond Board California – Almond Industry Position Report JAN 2013

Industry Outlook - US Drought/Intensifying

Things have got worse in the last week

• Drought declared in California
• Some counties have banned water exports
• Low State Government water allocations
• Zero Federal Government water allocations
• Marginal orchards being removed

		Drought Conditions (Percent Area)
	None		DO-D4 D1-D4 D2-D4 D3-D4			D 4
Current	0.00	100.00	94.56	90.82	73.83	26.21
Last Week2/10/2014	0.00	100.00	94.54	90.82	68.30	14.62
3 Months Ago11/26/2013	2.61	97.39	94.15	82.53	27.59	Daer D
Start ofCalendar Year12/31/2013	2.61	97.39	94.25	87.53	27.59	0.00
Start ofWater Year10/1/2013	2.63	97.37	95.95	84.12	11.36	o oo
One Year Ago2/26/2013	0.02	99.98	47.13	26.96	0.00	0.00

US Drought - Information Sources/References

Bloomberg News, 25 Feb 2014

Almond Drought Boosts India Sweets to Aussie Farms: Commodities By Megan Durisin

http://www.businessweek.com/news/2014-02-24/almond-drought-boosts-india-sweets-to-aussie-farms-commodities#p3

• "The worst California drought on record is forcing Jeff Schmiederer to spend $1.1 million on two new wells for his 1,200-acre almond orchard. Trees got so little water in 2013 that this year's harvest may drop 25 percent, and the damage may be even worse in 2015".

The Economist, 22 Feb 2014

The drying of the West: Drought is forcing westerners to consider wasting less water

http://www.economist.com/news/united-states/21596955-drought-forcing-westerners-consider-wasting-less-water-drying-west?frsc=dg%7Cb

• "California's drought—its worst in recorded history".
• "Last month snowpack in the Sierras fell to 12% of average January levels. Rainfall has disappointed for three years. Lake Folsom, near Sacramento, has shrunk so far that an old gold-rush town has been exposed. The rainy season has six weeks or so to go, but there is little sign of respite. California is bracing itself for a brutal fire season".
• "State officials have cut off supplies to water districts; their federal counterparts will soon follow suit. Some farmers who made the risky decision in past years to plant lucrative pistachio and almond trees, which require year-round watering, have had to bulldoze them. Others are fallowing farmland, or digging deeper to tap brackish groundwater, further depleting aquifers".

BBC, 12 Feb 2014

Why are Almonds so Expensive By Peter Bowes

http://www.bbc.co.uk/news/magazine-26118225

• "The state is suffering its worst drought since records began, over a century ago. There has been very little rain for the past three years and reservoir levels are dropping."They're at the lowest level we've seen for this time of the year probably in my lifetime," says Phippen

The Sacramento Bee, 17 Jan 2014

Jerry Brown declares California drought emergency, urges 20 percent cut in water use By David Siders, Phillip Reese and Matt Weiser

http://www.sacbee.com/2014/01/17/6082127/jerry-brown-declares-california.html

• "Gov. Jerry Brown announced a state of emergency Friday that has been all but official for weeks: California is in a drought. Brown urged Californians to reduce water use by 20 percent, saying "we're facing perhaps the worst drought that California has ever seen since records began being kept about 100 years ago."
• "His appeal to residents to reduce water consumption is voluntary, but he suggested at a news conference in San Francisco that the state could impose mandatory restrictions if the drought persists. "As we go down the road – you know, January, February, March – we will keep our eye on the ball and intensify, even to the point of mandatory conservation," Brown said. "But we're not going to do that quite yet."
• Brad Pugh, a meteorologist with the U.S. Climate Prediction Center. "We're expecting drought conditions across California to intensify over the next few months".

US Drought situation is serious and historically significant

SHV - Outlook

Almond Division

• Harvest commenced last week on track
• Orchard maturity profile largely offsets orchard replant program 73% of orchard at maturity
• Improving productivity & utilisation of existing assets (orchard yield, orchard area, replants, processing facilities)
• Accessing additional almonds where it makes sense (acquire/market almonds, lease/manage/own orchards)
• Actively seeking growth opportunities new processing volumes, orchard acquisitions etc
• Food Division
  • Implementing strategic plan
  • Improving supply chain efficiency
  • Focus on cost & innovation
  • Deliver profitable growth through insightful and innovative products
  • Improving the platform safety, training, logistics, systems, service
• Corporate
  • WA update negotiations in process for conditional sale of land and water rights

Maximise performance of current assets and grow the productive base

SHV - Summary

• SHV is well positioned
  • Leadership - Sharper focus on delivering performance and improvement
  • Industry healthy product with strong, historical & forecast long term growth prospects (8% p.a.)
  • Scale Australia is 2nd largest almond producer
  • Countercyclical to Californian Northern Hemisphere production
  • Integrated business geographically diversified, strong market shares across the business
  • Assets relatively new, globally competitive processing facility. Maturing orchards in sweet spot
  • Opportunities increase volumes by leveraging advantages of integrated business model i.e. utilising production, processing and marketing capabilities and knowledge

Well positioned to benefit from the trends to healthy eating and improved Asian diets

Thank you

Please direct any queries to:

Paul Thompson Paul Chambers Andrew Angus Managing Director Chief Financial Officer Investor Relations +61 3 9474 3544 +61 3 9474 3544 +61 402 823 757

Please note that Select Harvests will update its website shortly - a lot of the material regarding the rationale for almonds can be found there. www.selectharvests.com.au

Appendix

SHV - Financial History

		2006	2007	2008	2009	2010	2011	2012	2013
SHV Historical Summary	Units
Total Sales	(A$M)	217.9	229.5	224.7	248.6	238.4	248.3	251.3	191.1
EBIT	(A$M)	38.4	40.5	27.1	26.8	26.0	22.6	19.6	37.7
EBIT Margin (EBIT/Sales - %)	(%)	17.6%	17.6%	12.1%	10.8%	10.9%	9.1%	7.8%	19.7%
PBT	(A$M)	37.9	40.0	25.4	23.0	23.6	18.5	13.4	32.7
NPAT	(A$M)	26.5	28.1	18.1	16.7	17.3	17.7	9.5	22.9
Issued Shares	No. of Shares	39.7	38.7	39.0	39.5	39.8	56.2	56.8	57.5
Earnings Per Share	(AUD Cents per Share)	67.1	71.0	46.7	42.6	43.3	33.7	16.8	40.1
Dividend per Share	(AUD Cents per Share)	53.0	57.0	45.0	12.0	21.0	13.0	8.0	12.0
Payout Ratio	(%)	80.0%	80.0%	96.7%	28.2%	48.5%	38.6%	47.6%	29.9%
Net Tangible Assets per Share	(A$/Share)	1.83	1.57	1.41	1.56	1.87	2.17	2.19	2.14
Net Interest Cover	(times)	82.3	75.8	15.6	7.1	10.7	6.7	3.2	7.5
Net Debt	(A$M)	1.3	1.6	46.8	52.4	45.0	73.1	66.8	79.3
Shareholder Equity	(A$M)	101.5	95.5	94.1	100.9	113.6	168.8	160.3	159.5
Net Debt to Equity Ratio	(%)	1.3%	1.7%	49.7%	51.9%	39.6%	43.3%	41.7%	49.7%
Share Price	(A$/Share)	13.02	11.60	6.00	2.16	3.46	1.84	2.40	3.90
Market Capitalisation	(A$M)	517.0	449.4	234.1	85.4	137.6	103.5	120.0	224.3
P/E Ratio		19.5	16.0	12.9	5.1	8.0	5.8	12.6	9.8

Orchards

Across three distinct geographic regions with the majority in the economic "sweet spot"

21

Why Almonds? - Australian Almond Industry

Company	Orchards	Processing	Sales & Marketing
Select Harvests	11,560 acres (4,680 ha) –15%market shareVic,SA& NSW	Primary Processing30KT RobinvaleVicValue Added ProcessingRobinvale & Thomastown Vic	Consumer, Foodservice &Industrial businessesGlobal Nut Trader
Olam	30,000 acres (11,949 ha) –40% market shareVic	Primary Processing40KTCarwarp Vic	Consumer, Foodservice &Industrial businessesGlobal Nut Trader
Almondco(Simarloo)	Nil direct145 grower suppliers	Primary Processing30KTRenmark, SAValue Added Processing	Consumer, Foodservice &Industrial businessesGlobal Almond Trader
Nut Producers Australia(Riverland Almonds)	Yes –acreage unknown	Primary Processing10KTLoxton, SA	Consumer, Foodservice &Industrial businessesAlmond & Pistachio Trader

Australia has 74,742 acres (30,260 ha) of almond orchards (Australian Almond Insights 2012-13, Almond Board of Australia).

Table as at 28 Feb 2014

SHV is the only stock exchange listed, pure-play almond opportunity globally

SHV - Snapshot - as at 28 Feb 2014

SHVSEGMENTS	ALMOND DIVISION		FOOD DIVISION
BusinessFunctionsAsat 28/2/2014	Almond Orchards& Trading	Processing –Carina West	Processing–Thomastown	Sales & Marketing
Summary ofCapability	Almond OrchardPortfolio•Bearing -11,560 acres (4,680 hectares "ha")•Planted -11,779 acres (4,769 ha)•Additional Plantable-1,000 acres (405 ha)Global & Local Almond Trader	Primary Processor•Up 30KTper annum•Robinvale Vic	Value Added Processor•12KTper annum•Thomastown Vic	Food Division Units•Consumer•Foodservice•Industrial•Local nut & seed trader
Key Attributes	Owned/Leased -Bearing•5,635 acres (2,281 ha) owned•4,498 acres (1,821 ha) leasedManaged –Bearing•1,427 acres (578 ha) VICGeographic Diversity –Bearing•6,352 acres (2,572 ha) VIC•4,528 acres (1,833 ha) NSW•680 acres (275 ha) SA	Primary Processing•Hulling & Shelling•Inshellbagging•Bulk cartons & bags	Value Added•Blanching•Slicing•Dicing•Meal•Pastes•Roasting•Blending	Brands•Lucky: Cooking (No.1)•Sunsol: Snacking•Soland: Health Food•Nuvit: Health Food•Renshaw: Industrial•AllingaFarms: IndustrialCustomers•Coles•Woolworths•Mars•Unilever•Export

SHV – an integrated agribusiness that controls almond Supply Chain

SHV - Orchards - Geographic Diversity

SHV - Orchard Profile - A Competitive Advantage

As at 28 Feb 2014 Note: SHV's WA orchards are excluded from this summary

At 2014 Harvest, 73% of SHV Orchards will be economically mature

SHV - Orchard Portfolio

	Bearing		Planted
SHV Controlled Orchards	Acres	Hectares	Acres	Hectares
Owned	3,444	1,394	3,663	1,483
Leased	1,481	600	1,481	600
Victoria	4,925	1,994	5,144	2,083
Owned	1,511	612	1,511	612
Leased	3,017	1,221	3,017	1,221
NSW	4,528	1,833	4,528	1,833
Owned	680	275	680	275
Leased	-	-	-	-
South Australia	680	275	680	275
Total Controlled Orchards	10,133	4,102	10,352	4,191
Managed Orchards	1,427	578	1,427	578
Total Portfolio	11,560	4,680	11,779	4,769
Orchard Category
Owned	5,635	2,281	5,854	2,370
Leased	4,498	1,821	4,498	1,821
Managed Orchards	1,427	578	1,427	578
Total Portfolio	11,560	4,680	11,779	4,769
Orchard Geography
VIC	6,352	2,572	6,571	2,661
NSW	4,528	1,833	4,528	1,833
SA	680	275	680	275
Total Portfolio	11,560	4,680	11,779	4,769

SHV has an additional 1,000 acres (405 hectares) suitable for planting

SHV processes over 15,000mt of quality almonds and 12,000mt of quality nuts and healthy products

SHV - Almond Division - Risk Mitigation

Area	Action
FarmingPractices	•Empowered farm management•IntroducedHarvest guidelines to reduce weather exposure
Management Tools	•Great on-farmKPI's & reporting•Introduction of Leaf Bomb Pressure Test technology
Processing Standards	•Re-introduction of LEANmanufacturing processes•Higher quality standards & testing across the business•Pasteuriser commissioned and operational
Labour Skill& Management	•Improved training of harvest contractors•Quality & productivity based remuneration for labour
Capex	•Investment in pasteuriser & freefall metal detectors•Investment in frost mitigation technology
Orchard Development	•Total review of existingorchard potential•Long term development plan inc. plant density & variety
Water	•Water purchase for NSW orchards•New water policy -exposure over 3 years (1/3 long term lease, 1/3 annual, 1/3 spot)
Frost mitigation	•Installed frost fans on more highly exposed orchards in NSWand VIC
Bees	•Long term Bee Supply Agreement -3 years (Victorian orchards)

Maximise: Yield, Price and Quality

Sales & Marketing Market leading consumer and industrial brands plus outstanding customer service

SHV - Food Division - Brand Summary

• Market leader in the cooking nut category.
• Cooking Nut product range: almonds, walnuts, cashews, hazelnuts, brazil nuts, pine nuts, pistachios, macadamias, sunflower seeds and pepitas (value share 37% in the MAT to 22.07.12)
• Snacking product range: portion control packs, Lucky Smart Snax and Lucky Snack Tubs.
• Distribution: major supermarkets and export markets including the Middle East, Indonesia and Papua New Guinea.

• Product range: nuts, dried fruit, legumes and pulses, cereals, grains, seeds, flour, muesli and organic foods.
• Bulk and convenient packs.
• Distribution: health food stores and pharmacies nationally.

• Product range: muesli, dried fruit, nuts and snacks.
• Distribution: major supermarkets (muesli) and export markets including Hong Kong, Singapore, Malaysia , Indonesia and the Pacific Rim.

• Product range: muesli, dried fruit, nuts and snacks.
• Distribution: Health aisle of major supermarkets and export markets including Hong Kong, Singapore, Malaysia , Indonesia and the Pacific Rim.

• Product range: almonds and other nuts, dried fruit, seeds, nut pastes and pralines.
• Bulk pack.
• Products sold to local and overseas food manufacturers, wholesalers, distributors and re-packers.