SELECT HARVESTS LIMITED — Investor Presentation 2014

Aug 24, 2014

**Select

Harvests
Limited**

Acquisi/ons,
Capital
Raising
&
FY14
Results
Presenta/on 25
August
2014

**Important

Informa5on**

This
presenta/on
has
been
prepared
by
Select
Harvests
Limited
(ACN
000
721
380)
("Select
Harvests“,
“Select”).
This
presenta/on contains
informa/on
about
Select
Harvests
and
its
subsidiaries
and
is
dated
25
August
2014.
The
informa/on
in
this
presenta/on
does not
purport
to
be
complete
or
to
provide
all
informa/on
that
an
investor
should
consider
when
making
an
investment
decision.
It
should be
read
in
conjunc/on
with
Select
Harvests'
other
periodic
and
con/nuous
disclosure
announcements
lodged
with
the
Australian Securi/es
Exchange
which
are
available
at
asx.com.au.
Certain
announcements
are
also
available
at
selectharvests.com.au
(ASX
code SHV).

This
presenta/on
includes
"forward-­‐looking
statements"
within
the
meaning
of
the
securi/es
laws
of
applicable
jurisdic/ons.
Forward-­‐ looking
statements
can
generally
be
iden/fied
by
the
use
of
forward-­‐looking
words
such
as
"may",
"will",
"expect",
"intend",
"plan", "es/mate",
"an/cipate",
"believe",
"con/nue",
"objec/ves",
"outlook",
"guidance"
or
other
similar
words,
and
include
statements regarding
certain
plans,
unknown
risks,
uncertain/es
and
other
factors,
many
of
which
are
outside
the
control
of
Select
Harvests,
and
its officers,
employees,
agents
or
associates.
Actual
results,
performance
or
achievements
may
vary
materially
from
any
projec/ons
and forward-­‐looking
statements
and
the
assump/ons
on
which
those
statements
are
based.
Readers
are
cau/oned
not
to
place
undue reliance
on
forward-­‐looking
statements
and
Select
Harvests
assumes
no
obliga/on
to
update
such
informa/on.

This
presenta/on
is
for
informa/on
purposes
only
and
is
not
financial
product
or
investment
advice
or
a
recommenda/on
to
acquire Select
Harvests'
shares
and
has
been
prepared
without
taking
into
account
the
objec/ves,
financial
situa/on
or
needs
of
individuals. Before
making
an
investment
decision
prospec/ve
investors
should
consider
the
appropriateness
of
the
informa/on
having
regard
to their
own
objec/ves,
financial
situa/on
and
needs
and
seek
legal
and
taxa/on
advice
appropriate
to
their
jurisdic/on.
Select
Harvests
is not
licensed
to
provide
financial
product
advice
in
respect
of
Select
Harvests
shares.
Cooling
off
rights
do
not
apply
to
the
acquisi/on
of Select
Harvests
shares.
You
should
make
your
own
decisions
regarding
the
Capital
Raising
and
whether
to
par/cipate
based
upon
your own
inquiries
and
independent
advice.

2

**Important

Informa5on**

The
underwriters
and
advisors
have
not
been
involved
in
the
prepara/on
of,
and
have
not
authorised,
permibed
or
caused
the
issue, lodgement,
submission,
dispatch
or
provision
of
this
presenta/on
and
do
not
make
or
purport
to
make
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statement
in
this presenta/on
and
you
acknowledge
that
there
is
no
statement
in
this
presenta/on
which
is
based
on
any
statement
made
by
the underwriters
and
advisors.
You
acknowledge
and
agree
that
none
of
the
underwriters
and
advisors
and
their
affiliates,
officers
and employees,
makes
any
representa/on
or
warranty
as
to
the
currency,
accuracy,
reliability
or
completeness
of
informa/on
and
nor do
they
make
any
representa/ons
or
warran/es
to
you
concerning
the
Capital
Raising
and
whether
you
should
par/cipate.
You should
make
your
own
decisions
regarding
the
Capital
Raising
and
whether
to
par/cipate
based
upon
your
own
inquiries
and independent
advice.
The
underwriters
and
advisors
and
their
affiliates,
officers
and
employees,
to
the
maximum
extent
permibed by
law,
expressly
disclaim
all
liabili/es
in
respect
of,
make
no
representa/on
regarding,
and
take
no
responsibility
for
any
part
of this
document
or
in
rela/on
to
the
Capital
Raising.

3

Agenda

1. Introduc5on 2. Acquisi1ons 3. Greenfields
Development 4. Capital
Raising 5. Future
Funding
Op1ons 6. FY14
Results
Discussion
&
Analysis 7. Strate gy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

4

Highlights

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FY2014

• ü Strong
  earnings
  and
  strong
  cash
  flow
  genera1on

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**Almond

Division**

• ü Solid
  performance
  despite
  lower
  than
  forecast
  crop

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**Food

Division**

• ü Turn
  around
  on
  track

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**Significant

Acquisi5ons**

• ü 3
  Acquisi1ons
  (1
  complete)
  comprising
  2,481
  planted
  acres
  and
  4,465
  plantable
  acres

• ü Acquisi1ons
  and
  greenfield
  development
  founda1on
  in-­‐line
  with
  strategy
  to
  double
  planted
  acreage
  by
  2018

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**Acquisi5on

&
Business
Development
Funding**

• ü New
  equity
  (Placement
  and
  Share
  Purchase
  Plan)
  plus
  debt

• ü Long
  term
  off
  balance
  sheet
  funding
  op1ons
  being
  ac1vely
  inves1gated

5

**FY14

financial
overview**

Increased
profit
and
strong
cash
flow
genera5on
despite
lower
than
an5cipated
crop
volumes

==> picture [20 x 11] intentionally omitted <==

Reported
FY14
Net
Profit
aJer
Tax
(NPAT)
of
$29.0m
is
a
record
result[(1)] (FY13
Reported
NPAT
of
$2.9m)[(2)]

==> picture [20 x 11] intentionally omitted <==

FY14
NPAT
of
$29.0m[(1)] is
up
27%,
compared
to
underlying
FY13
NPAT
$22.9m

==> picture [20 x 11] intentionally omitted <==

EBIT –
FY14
EBIT
$41.8m[(1)] ,
up
11%

==> picture [20 x 11] intentionally omitted <==

Cash
flow –
Opera1ng
cash
flow
$23.1m
(FY13
$4.1m)
–
strong
conversion

==> picture [20 x 11] intentionally omitted <==

Strong
earnings
growth –
Reduced
crop
(down
17%)
was
par1ally
off-­‐set
by
33%
almond
price
increase,
higher
than an1cipated
sell
through
of
the
2013
season
crop
and
revalua1on
of
trees

==> picture [20 x 11] intentionally omitted <==

Borrowings –
Net
Debt
of
$94.8m
with
gearing
of
52%
(Net
Debt
to
Equity).
Includes
funding
of
$16.3m
acquisi1on
se`led during
FY14

==> picture [20 x 11] intentionally omitted <==

Earnings
per
Share
(EPS) –
50.2
cents
per
share
(underlying
FY13
40.1
cps),
up
25%

==> picture [20 x 11] intentionally omitted <==

Dividend –
Final
Dividend
(unfranked)
declared
9
cents
per
share
(full
year
dividend
20
cents
per
share)

• (1)
  Includes
  $6m
  pre-­‐tax
  revalua1on
  of
  almond
  trees.

(2)
FY13
reported
NPAT
includes
impact
of
WA
write-­‐down
and
discount
on
acquisi1on.

6

**Value

enhancing
acquisi5ons**

==> picture [20 x 11] intentionally omitted <==

**Substan5al

increase
to
produc5ve
asset
base**

• 17%
  increase
  in
  mature
  orchards
  will
  provide
  year
  1
  earnings,
  cash
  flow
  and
  exposure
  to
  current
  strong
  almond pricing

• 4,465
  acre
  increase
  in
  total
  plantable
  area
  (currently
  1,000
  acres),
  with
  greenfield
  orchard
  development
  program
  to drive
  long-­‐term
  produc1on
  growth

• Enhanced
  orchard
  maturity
  profile
  posi1ons
  Select
  for
  its
  strategic
  objec1ve
  to
  double
  produc1ve
  capacity
  by
  2018 and
  actual
  produc1on
  by
  2025

==> picture [20 x 11] intentionally omitted <==

Improved
u5lisa5on –
Increased
produc1on
volumes
intended
to
drive
margin
improvement
and
enhance
value
in
the medium
term
by
leveraging
fixed
cost
infrastructure

==> picture [20 x 11] intentionally omitted <==

A[rac5vely
priced
acquisi5ons
of
scale –
Total
considera1on
of
$63m:
mature
orchards
(acquired
below
Select’s development
cost);
vacant
land
for
greenfield
orchard
development;
and
permanent
water
rights

==> picture [20 x 11] intentionally omitted <==

Leverage
a[rac5ve
market
dynamics
– Select
is
well
posi1oned
as
the
only
listed
almond
company
globally.
The
increase
in mature
orchards
provides
year
1
exposure
to
increased
almond
prices
driven
by
global
demand
for
almond
products
and below
trend
supply
constraints
(quantum
and
quality)
as
a
result
of
Californian
dry
weather

==> picture [20 x 11] intentionally omitted <==

Improves
geographic
diversifica5on -­‐
The
acquisi1ons
geographically
diversify
Select's
land
holdings,
further
dilu1ng
crop aggrega1on
risk
and
building
on
Select’s
new
South
Australian
hub

==> picture [20 x 11] intentionally omitted <==

Gearing
unchanged –
Gearing
aher
acquisi1ons
and
$47m
placement
remains
constant
at
52%.
Any
Share
Purchase
Plan proceeds
will
further
reduce
gearing.
Select
is
also
ac1vely
pursuing
a
variety
of
off
Balance
Sheet
funding
models
to
op1mise capital
structure.

Significant
increase
in
mature
orchards
is
complemented
by
balance
sheet
flexibility
to
enable
staged
greenfield orchard
development
of
the
acquired
land
bank

7

Agenda

1. Introduc1on 2. Acquisi5ons 3. Greenfields
   Development 4. Capital
   Raising 5. Future
   Funding
   Op1ons 6. FY14
   Results
   Discussion
   &
   Analysis 7. Strate gy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

8

**Transac5ons

overview**

Transac5on	§ Acquisi1ons of Amaroo, Grewal and Mendook (Mendook complete)
Compelling Strategic Ra5onale	Increases control of cri5cal mass of almonds § Substan1al increase in produc1ve mature almond orchards § Fourfold increase in land bank for greenfeld almond orchard development to drive long-term produc1on growth § Mature orchards provide year 1 exposure to a`rac1ve current market dynamics § Further geographic diversifca1on building on South Australian hub
Considera5on	§ Combined acquisi1ons considera1on of $63.0 million (excluding transac1on costs and before any adjustments) § Including 6,215ML high security water en1tlements ($11.2m)
Value Enhancing	§ Mature orchards purchased below Select’s development cost § Signifcant increase in volume for processing facility, enhancing overhead recovery
Financing	§ Funded using a combina1on of debt, $47m underwrien placement and non-<br>underwrien Share Purchase Plan
Closing	§ Acquisi1ons expected to complete in September 2014 (Mendook already completed)

Acquisi5ons
should
provide
significant
short
term,
medium
term
and
long
term
volume
growth

9

**– Orchard

acquisi5ons Increasing
Select’s
produc5ve
asset
base**

Acquisi5ons	Current(a)	Amaroo(b)	Grewal	Mendook	Pro forma
Planted acres (of almonds)
Mature	8,547	1,288	175	-	10,010
Immature	2,283	758	260	-	3,301
Total	10,830	2,046	435	-	13,311
Plantable acres	1,000	1,500	1,365	1,600	5,465
Indica5ve plan5ng program (acres)(c)
2015	1,000	-	465	-	1,465
2016	350	750	-	1,600	2,700
2017	350	750	900	-	2,000
2018	406	-	-	-	406
Total	2,106	1,500	1,365	1,600	6,571
Citrus(acres)	-	764	-	-	764
Acquisi5on cost	n/a	$52.5m	$8.5m	$2.0m	$63.0m
Irriga1on source	n/a	Murray River	Lake Cullulleraine	Murray River
Loca1on	n/a	Paringa, SA	Cullulleraine, VIC	Euston, NSW
SHV management hub	n/a	Southern Region	Southern Region	Central Region
Distance & drive 1me from Carina West processing	n/a	225 kms – 2.5 hrs	140 kms – 1.8 hrs	40 kms – 30 mins

_Notes: (a)
Includes
Allinga
acquisi/on
(680
acres
planted
and
1,000
plantable),
completed
in
December
2013.

Source:
Company Data_

(b)
Amaroo
acquisi/on
includes
6,215ML
of
high
security
water
rights
($11.2m)

(c)
An/cipated
Plan/ng
Program
(subject
to
project
plans
and
funding)
-­‐
includes
1,106
acres
of
replants.

10

**Amaroo

Orchards**

• ü Agreement
  to
  purchase
  one
  of
  Australia’s
  last independent
  orchards
  of
  significant
  scale

• ü Mature
  orchards
  acquired
  below
  Select’s development
  cost

• ü 1,288
  acres
  of
  mature
  orchards
  providing
  year
  1 cash
  flow
  and
  further
  exposure
  to
  strong
  market dynamics

• ü 758
  acres
  of
  immature
  orchards
  providing medium-­‐term
  volume
  growth
  as
  they
  mature

• ü 1,500
  acres
  of
  plantable
  land
  to
  drive
  long-­‐term produc1on
  growth

• ü Improved
  asset
  u1lisa1on
  from
  an
  addi1onal 2,500
  tonnes[(1)] available
  for
  processing
  at
  Select’s Carina
  West
  facility
  at
  full
  maturity
  of
  current plan1ngs

• ü Further
  geographical
  diversifica1on
  and expansion
  of
  South
  Australian
  hub

• ü Citrus
  proposed
  to
  be
  leased
  to
  a
  3[rd] party
  for 10
  years

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==> picture [197 x 131] intentionally omitted <==

==> picture [197 x 131] intentionally omitted <==

==> picture [197 x 131] intentionally omitted <==

Images

• Top:
  Amaroo
  aerial
  view,
  Amaroo
  head
  office. Bo[om:
  Amaroo
  bee
  hives,
  Amaroo
  ground
  view.

• ü Minimal
  condi1ons
  to
  se`lement

(1)
Assuming
standard
industry
yields

11

**Acquisi5ons

–
orchard
loca5ons**

**Geographic

diversity limits
exposure
to:**

• Weather

• Disease
  spread

• − Insect
  infesta1on

Amaroo
to
Robinvale Distance:
225
km Drive
Time:
2.5
hours

Grewal
to
Robinvale Distance:
140
km Drive
Time:
1.8
hours

Mendook
to
Robinvale Distance:
40km Drive
Time:
0.5
hours

==> picture [502 x 304] intentionally omitted <==

----- Start of picture text -----

SOUTH
AUSTRALIA
MENDOOK NEW
SOUTH
WALES
AMAROO
GREWAL
ROBINVALE
VICTORIA
----- End of picture text -----

12

Agenda

1. Introduc1on 2. Acquisi1ons 3. Greenfields
   Development 4. Capital
   Raising 5. Future
   Funding
   Op1ons 6. FY14
   Results
   Discussion
   &
   Analysis 7. Strate gy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

13

**Strategic

objec5ve
to
double
planted acreage
by
2018**

==> picture [720 x 356] intentionally omitted <==

----- Start of picture text -----

25,000

20,000

350

406

2,850

(1,072)

350

1,650

2,350

7,939

15,000

1,465

(42%)

1,018

1,463

21,659

10,000

2,282

(21%)

10,871

5,000

8,547
U1lising
current
and

(58%)

(79%)
acquisi1on
land
bank

-­‐
Current
Acquisi1ons
FY15
FY16
FY17
FY18
Exis1ng
trees
Total
Addi1onal
acreage
FY18
Strategic
Plan1ng
Program
Plan1ng
Program
Plan1ng
Program
Plan1ng
Program
removed
for
required
to
achieve
Target
replan1ng
Strategic
Target
Mature
Almond
Orchards
(

8
years)
Greenfield
Almond
Orchard
Development
Removed
Almond
Orchards
Immature
Almond
Orchards
(0
-­‐
8
years)
Replanted
Almond
Orchards
Strategic
Target
Source:
Company
Data
Acres
----- End of picture text -----

Doubling
planted
acreage
through
acquisi5ons,
greenfield
development
and
replan5ng
of
exis5ng
orchards

14

**Post

acquisi5ons
orchard
profile
– A
balanced
pormolio
to
support
growth**

==> picture [685 x 391] intentionally omitted <==

----- Start of picture text -----

Land
bank
Planted
acreage
age
profile
50.0%
(%
of
total
land
holding)
45.0%
40.0%
25%
67%
8%
35.0%
Planted
orchards
are
Planted
orchards
in
economic
sweet
spot
-­‐
Planted
orchards
post

immature low
capex
&
high
cash
genera5on
economic
maturity
30.0%
25.0%
20.0%
Replants
New
Plants
15.0%
10.0%
5.0%
0.0%
Note:
*
An1cipated
Plan1ngs
Tree
Age
(Years)
Source:
Company
Data
----- End of picture text -----

Note: *
An1cipated
Plan1ngs Source:
Company
Data

15

Agenda 1. Introduc1on 2. Acquisi1ons 3. Greenfields
Development 4. Capital
Raising 5. Future
Funding
Op1ons 6. FY14
Results
Discussion
&
Analysis 7. Strate gy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

16

**Equity

raising
overview**

Capital raising	§ Fully underwrien placement of new shares to raise $47m (“Placement”); and<br>§ Non underwrien share purchase plan made available to the Company’s eligible investors in Australia and New Zealand (“SPP”)
Placement structure and pricing	§ Placement to eligible ins1tu1onal, professional and sophis1cated investors § Fixed price of $5.35 per share § 10.4% discount to last closing price, 7.6% discount to 10 day VWAP and 2.0% discount to 30 day VWAP
SPP structure, size and pricing	§ Non-underwri`en share purchase plan, up to a maximum of $15,000 per shareholder § SPP issue price will be the lower of $5.35 or a 3% discount to the 5 day VWAP up to and including the SPP closing date § Full details regarding the plan will be released to the market shortly
Ranking of new shares	§ New shares will rank equally with exis1ng ordinary shares on issue § Shares issued pursuant to the Placement and SPP will not be en1tled to Select’s FY14 fnal dividend to be paid on 16 October 2014
Use of funds	§ Fund commi`ed acquisi1ons § Enhance Select’s capacity to fund growth through greenfeld development and further acquisi1ons § Post the Placement, Select expects to have cash and undrawn facili1es (including bridge facility) of around $90m
Ofer Jurisdic5ons	§ Refer to Appendix
Lead manager and underwriter	§ CIMB Corporate Finance, Wilson HTM Corporate Finance and PAC Partners are the joint lead managers and underwriters to the Placement

17

**Acquisi5on

funding**

The
acquisi1ons
and
associated
transac1on
costs
are
to
be
funded
through
a
combina1on
of:

Equity

• § Ins1tu1onal
  placement
  to
  raise
  up
  to
  $47m

• ─

  • Fully
    underwri`en
    to
    ins1tu1onal
    and
    professional
    investors
    only

• § Share
  purchase
  plan

• ─

• Not
  underwri`en
  and
  up
  to
  a
  maximum
  of
  $15,000
  per
  shareholder

Debt

• § Fully
  commi`ed
  addi1onal
  acquisi1on
  bridge
  facility
  of
  $50m
  available
  (if
  required)
  un1l
  October
  2016

• § Post
  the
  Placement,
  Select
  expects
  to
  have
  cash
  and
  undrawn
  facili1es
  (including
  bridge
  facility)
  of
  around
  $90m

Sources	$m		Uses	$m
Placement	$46.5		Purchase price	63.0
Debt	$22.8		Transac1on costs - Acquisi1ons	4.3
Total Sources	$69.3		Transac1on costs - Equity raising	2.0
SPP (addi1onal)	Maximum $15,000 per shareholder
			Total Uses	69.3

• § Pro
  forma
  gearing
  (Net
  debt/Equity)
  of
  52%
  unchanged
  from
  FY14
  gearing
  (52%),
  incorpora1ng
  placement
  proceeds
  only.
  Any
  SPP proceeds
  received
  will
  reduce
  gearing
  further.
  The
  SPP
  proceeds
  (if
  any),
  coupled
  with
  strong
  opera1onal
  cash
  flow
  genera1on provides
  Select
  further
  financial
  flexibility
  to
  con1nue
  to
  grow
  its
  opera1ons.

18

**Placement

&
SPP
5metable**

Key events	Date
Record date for Share Purchase Plan	Friday 22 August 2014
ASX trading halt	Monday 25 August 2014
Commencement of Placement book build	Monday 25 August 2014
Closure of Placement book build	Tuesday 26 August 2014
Recommencement of trading on the ASX (if not before)	Wednesday 27 August 2014
DVP se`lement of Placement	Monday 1 September 2014
Share Purchase Plan opens	Monday 1 September 2014
Placement shares commence trading	Tuesday 2 September 2014
FY14 fnal dividend record date	Wednesday 3 September 2014
Share Purchase Plan closes	Monday 22 September 2014
Share Purchase Plan shares commence trading	Tuesday 30 September 2014

19

Agenda

1. Introduc1on 2. Acquisi1ons 3. Greenfields
   Development 4. Capital
   Raising 5. Future
   Funding
   Op5ons 6. FY14
   Results
   Discussion
   &
   Analysis 7. Strate gy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

20

**Future

funding
op5ons**

Objec5ve
to
thoroughly
evaluate
alterna5ve
funding
structures
to
leverage
strong
cash
flows
and
op5mise
Select’s capital
structure

• § Consistent
  with
  Select’s
  strategy
  to
  achieve
  cri1cal
  mass
  of
  controlled
  orchards,
  the
  company
  is
  currently
  evalua1ng
  a
  variety
  of funding
  models
  to
  op1mise
  its
  capital
  structure

• § Over
  the
  next
  6
  months,
  Select
  will
  pursue:

• ─

• Special
  Purpose
  Vehicles
  e.g.
  an
  almond
  orchard
  investment
  fund;

• ─

• Long-­‐term
  leasing
  proposals;
  and

• ─

• A
  reassessment
  of
  core
  debt
  facili1es.

• § Select
  will
  update
  the
  market
  as
  these
  evalua1ons
  progress.

21

Agenda

1. Introduc1on 2. Acquisi1ons 3. Greenfields
   Development 4. Capital
   Raising 5. Future
   Funding
   Op1ons 6. FY14
   Results
   Discussion
   &
   Analysis 7. Strate gy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

22

**FY14

result
overview**

• § Significant
  progress
  on
  implementa5on
  of
  company’s
  strategy
  (7
  plamorms)
  &
  transi5on
  into
  a
  fully
  integrated
  agribusiness

• ─ Seasonal
  condi1ons
  aside,
  strategically
  Select
  is
  ahead
  of
  where
  we
  planned
  to
  be
  at
  this
  point

• § Almond
  Division
  –
  strong
  financial
  result
  despite
  trying
  harvest
  condi5ons

• ─ Tough
  physical
  condi1ons
  (weather),
  good
  market
  condi1ons
  (price)

• ─ Re-­‐emphasises
  need
  to
  con1nue
  focus
  on
  risk
  management
  –
  diversifica1on
  and
  addi1onal
  harvest
  equipment

• ─

• Strong
  cash
  flow
  genera1on
  –
  although
  s1ll
  not
  at
  full
  poten1al

§ **Food

Division
–
turnaround
underway**

• ─ Another
  record
  year
  in
  Industrial
  –
  24%
  sales
  increase

• ─ Implemen1ng
  outcomes
  of
  research.
  Brands
  undergoing
  innova1on,
  renova1on,
  reformula1on,
  repackaging,
  relaunching

• ─

• Trading
  condi1ons
  with
  major
  retailers
  remain
  challenging
  –
  SHV
  leading
  the
  way
  with
  price
  increases

§ **Past

12
months
–
improving
performance**

• ─ Ac1on
  -­‐
  Implemen1ng
  outcomes
  of
  planning
  reviews
  and
  strategy
  goals.
  Tracking
  in
  line

• ─ OHS
  -­‐
  Another
  improved
  safety
  result
  with
  group
  Lost
  Time
  Injuries
  (LTI)
  down
  72.7%,
  year
  on
  year

• ─ Growth
  –
  puvng
  in
  the
  founda1ons
  for
  growth

**Posi5oning

for
growth
and
performance
in
a
growing
industry**

23

**Income

Statement**

Income Statement
Financial Result FY13 ($m) FY14 ($m)	§ FY14 EBIT $41.8m (FY13 $37.7m) § Almond Division EBIT $40.8m (FY • Strong performance ─ 2014 crop (key drivers - 10,500 tonn Despite crop yield below ─ Higher than an1cipated y ─ Beneft of tree valua1on • 2014 costs up due to wet ha § Food Division EBIT $5.6m (FY13 $ • Industrial sales up 24% • Improved sales mix towards • Improved price managemen § Corporate costs $4.6m (FY13 $4.1 § Tax expense includes R&D tax cre
Reported Result EBIT - Reported 5.2 41.8 Interest (5.0) (4.5) NPBT 0.2 37.4 Tax (Expense)/Beneft 2.7 (8.3) NPAT - Reported 2.9 29.0
Pre-Tax Adjustments 32.5 - Underlying Result EBIT - Underlying 37.7 41.8 Interest (5.0) (4.5) NPBT 32.7 37.4 (Tax Expense) (9.8) (8.3) NPAT – Underlying 22.9 29.0*

• § Almond
  Division
  EBIT
  $40.8m
  (FY13
  $36.4m)

• Strong
  performance ─ 2014
  crop (key
  drivers
  -­‐
  10,500
  tonnes
  &
  A$8.50/kg) Despite
  crop
  yield
  below
  expecta1ons

• ─ Higher
  than
  an1cipated
  yields
  and
  prices
  for
  2013
  crop

• ─ Benefit
  of
  tree
  valua1on
  of
  $6m

• • 2014
  costs
  up
  due
  to
  wet
  harvest
  season

• § Food
  Division
  EBIT
  $5.6m
  (FY13
  $5.5m)

• Improved
  sales
  mix
  towards
  branded
  products

• Improved
  price
  management
  and
  cost
  control

• § Corporate
  costs
  $4.6m
  (FY13
  $4.1m) § Tax
  expense
  includes
  R&D
  tax
  credit
  $1.8m

• § NPAT
  up
  27%
  to
  $29m

• WA
  impairment
  and
  discount
  on
  acquisi1on

**Strong

Result
–
opportunity
for
growth
from
increased
yield
poten5al
and
food
turnaround**

24

**Balance

Sheet**

Balance Sheet
Year Ending Balance Sheet	Jun-13 ($m)		Jun-14 ($m)		§ Banking refnance, increase & extension complete • NAB & Rabobank - $135m
Current Assets excl. Cash	114.4		130.3		• $50m term expiring 2018
Cash Non Current Assets Total Assets	8.9 180.5 303.8		6.3 204.6 341.2		• $60m line - working capital & business projects • $25m acquisi1on line • Addi1onal $50m acquisi1on bridge facility approved on 22 August 2014
Current Liabili1es (excl. Borrowings)	35.9		25.7		§ Timing of new crop sales & receipts
Borrowings	88.1		101.1		• Straddles 30 June balance date
Non Current Liabili1es (excl. Borrowings)	20.3		31.7		• Signifcant receipts since then
Total Liabili5es	144.3		158.5		§ Net Debt $94.8m (includes funding of $16.3m Allinga
Total Equity	159.5		182.8		acquisi5on in FY14)
Net Debt	79.2		94.8		§ Gearing 51.9% (debt/equity)
Net Debt /Equity	49.7%		51.9%		• Long term target to be below 40%
					• September 2014 equity raising to maintain
					current gearing

Achieve
&
maintain
a
prudent
and
flexible
balance
sheet
to
support
growth
strategy

25

**Cash

Flow**

Cash Flow
Cash Flow FY13 ($m) FY14 ($m)	§ The majority of the 2014 crop held at 30 June expected to convert to cash in 1HFY15 § Inves5ng cash fows driven by: • Orchard acquisi1ons $16.3m • PPE $8.6m • Water $3.5m • Trees $1.5m § Capex - FY15 • Trees – commence investment in plan1ng out greenfeld land bank • Increased harvest matrix and mechanical drying
EBITDA – (FY13 Underlying) 42.5 45.6 Change in Working Capital (34.2) (17.8) Taxes Received 0.9 - Net Interest (5.1) (4.7)
Cash fow from opera5ng ac5vi5es 4.1 23.1 Inves1ng cash fows (13.9) (29.9) Increase in Debt 19.3 12.5 Dividends Paid (2.4) (8.8)
Net Increase/(Decrease) in Cash/Cash Equivalents 7.0 (3.1)

Strong
opera5ng
cash
flow
conversion
from
exis5ng
assets

26

**Almas

dispute
update**

• § Almas
  Pty
  Ltd
  (“Almas”)
  is
  owned
  by
  former
  directors
  of
  Select
  who
  were
  directors
  during
  the
  period
  of
  1me
  to
  which
  the
  claim
  relates

• § Almas
  have
  commenced
  legal
  proceedings
  against
  Select
  in
  the
  Supreme
  Court
  of
  Victoria

• § Select
  denies
  any
  liability
  &
  intends
  to
  vigorously
  defend
  the
  claim

• § No
  provision
  is
  currently
  recognised
  for
  the
  claim
  of
  $9m
  ($8m
  of
  which
  relates
  to
  a
  future
  loss
  of
  profit
  claim).

27

**Almond

Division
-­‐
performance**

Almond Division($m)	FY13		FY14
Reported EBIT	3.9		40.8
UnderlyingEBIT	36.4		40.8

Performance

• § FY14
  crop
  volume
  est.
  10,500
  tonnes
  including
  Allinga
  (acquired
  December
  2013)
  compared
  to
  FY13
  of
  12,669
  tonnes
  -­‐ down
  17%
  -­‐
  in
  line
  with
  guidance

• § FY14
  price
  est.
  $8.50/kg
  (FY13
  A$6.38/kg)
  -­‐
  up
  33%

• ─

  • Avge.
    FY14
    AUD/USD
    Rate
    =
    0.92

• § FY14
  crop:

• ─

• ─

• ─

  • Yield
    &
    Quality
    -­‐
    Wet
    harvest
    season
    condi1ons
    hampered
    opera1ons.
    Diminished
    yield
    &
    quality

  • Price
    -­‐
    strong
    market
    price
    increases
    across
    the
    year
    compensated
    for
    reduced
    volume

  • Costs
    -­‐
    increased
    due
    to
    impact
    of
    wet
    harvest
    season

• ─ Volume
  -­‐
  total
  volume
  processed
  of
  15,000
  tonnes,
  including
  third
  par1es

• § December
  2013
  -­‐
  Acquisi1on
  of
  675
  acres
  of
  mature
  almond
  orchards
  and
  1,000
  acres
  suitable
  for
  plan1ng

• § Lost
  Time
  Injuries
  down
  73.3%

**Almond

Division
is
delivering
for
shareholders
despite
wet
&
trying
harvest
season
condi5ons**

28

**Food

Division
-­‐
performance**

Food Division($m)	FY13		FY14
Reported EBIT	5.5		5.6
UnderlyingEBIT	5.5		5.6

Performance

• § Industrial
  delivers
  another
  record
  result
  -­‐
  24%
  up
  on
  FY13

• § Revenue
  reduc1on
  driven
  by
  loss
  of
  major
  retailer
  private
  label
  almond
  contracts

• § Branded
  business
  remains
  strong

• § Improved
  sales
  mix
  driven
  margin
  improvement

• § Produc1on
  cost
  per
  kg
  remained
  flat
  year-­‐on-­‐year
  in
  spite
  of
  private
  label
  volume
  loss

• § Turnaround
  has
  commenced

• ─

• Investment
  in
  research,
  product
  development,
  brand
  image/awareness
  is
  becoming
  evident

• ─

• ─

• New
  product
  launches
  (reformulate,
  relaunch)
  –
  Sunsol
  Mueslis,
  Lucky
  Smart
  Snax

• Absolute
  focus
  on
  margin
  management
  and
  return
  on
  investment

• § Lost
  Time
  Injuries
  down
  72.2%

**Food

Division
turnaround
has
commenced
–
building
blocks
are
now
in
place**

29

Agenda

1. Introduc1on 2. Acquisi1ons 3. Greenfields
   Development 4. Capital
   Raising 5. Future
   Funding
   Op1ons 6. FY14
   Results
   Discussion
   &
   Analysis 7. Strategy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

30

**Strategic

ra5onale
–
Strategy
map
towards
2018**

1. CONTROL
CRITICAL
MASS
OF ALMONDS

2. IMPROVE
YIELD
&
CROP
VALUE

3. BE
BEST
IN
CLASS
SUPPLY
CHAIN

4. INVEST
IN
INDUSTRIAL
&
TRADING DIVISION

5. TURN
AROUND
PACKAGED
FOOD BUSINESS

6. FIX
OUR
SYSTEMS
&
PROCESSES

1. ENGAGE
   WITH
   OUR
   PEOPLE
   &
   OUR STAKEHOLDERS

Secure
the
cri5cal
mass
of
nuts
needed
to maximize
profitability
and
leverage
the
global almond
opportunity.

Improve
yield
and
overall
crop
value
by perfec5ng
on-­‐farm
and
farm
to
factory prac5ces .

Con5nuously
improve
our
supply
chain, achieving
high
quality,
low
cost
and op5mum
capital
u5lisa5on.

Allocate
resources
to
leverage
our
trading skills
and
grow
sales
in
the
industrial
channel .

Develop
a
new
model
for
the
packaged
food category
that
will
deliver
sustainable
returns above
the
cost
of
capital .

Develop
the
business
systems
and processes
required
to
be
a
global
industry leader .

Engage
with
investors
and
our
industry
while developing
the
team
required
to
be
a
global industry
leader.

2018
Targets:

==> picture [113 x 88] intentionally omitted <==

----- Start of picture text -----

15%
ROCE
----- End of picture text -----

==> picture [113 x 88] intentionally omitted <==

----- Start of picture text -----

EPS
7-­‐10%
pa
----- End of picture text -----

==> picture [112 x 88] intentionally omitted <==

----- Start of picture text -----

10%
EBIT
pa
----- End of picture text -----

Mission:

To
deliver
sustainable
shareholder value
by
being
a
global
leader
in integrated
growing,
processing
& marke1ng
of
almonds.

==> picture [69 x 14] intentionally omitted <==

----- Start of picture text -----

Cri5cal
enabler:
----- End of picture text -----

An
appropriate
capital
structure to
deliver
these
strategies.

31

Agenda

1. Introduc1on 2. Acquisi1ons 3. Greenfields
   Development 4. Capital
   Raising 5. Future
   Funding
   Op1ons 6. FY14
   Results
   Discussion
   &
   Analysis 7. Strate gy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

32

**Outlook

-­‐
Select
Harvests’
crop
update**

• § Heavy
  early
  season
  frost,
  but
  no
  damage
  detected

• § All
  bees
  are
  in
  place
  at
  all
  orchards,
  with
  an
  increased
  hive
  density

• § Pollina1on
  is
  later
  than
  2013,
  between
  5-­‐20%
  of
  trees
  are
  in
  bloom

• § Pollinator
  and
  Non
  Pareil
  crop
  appear
  to
  have
  good
  synchronisa1on

• § Weather
  outlook
  favourable
  for
  the
  next
  2
  weeks

• § Select
  has
  secured
  most
  2014/15
  season
  water

**Updates

to
be
provided
as
the
crop
develops**

33

**Outlook

-­‐
Global
crop
update**

US

• § 30
  June
  2014
  USDA
  NASS
  Objec1ve
  Forecast

• ─ 2014
  US
  Crop
  now
  2.10
  billion
  lbs

• ─ Significant
  hor1cultural
  challenge
  which
  may
  affect
  yields,
  economics
  &
  future
  investment:
  water
  &
  bees

• § Current
  crop

• ─ Significant
  hor1cultural
  challenges

• ─ Early
  harvest
  reports
  indicate
  both
  yield
  and
  quality
  affected

• ─ Pricing
  similar
  to
  2013

Spain

• § 76%
  increase
  in
  produc1on
  volumes
  compared
  to
  last
  season,
  which
  was
  abnormally
  severe
  and
  16%
  larger
  than
  the
  average
  of the
  past
  five
  years.

Source:
EFE
(Spain),
Blue
Diamond
Growers
Reports

**Global

supply
and
demand
dynamics
support
the
con5nua5on
of
firm
almond
pricing**

34

**US

drought
situa5on**

==> picture [671 x 328] intentionally omitted <==

Source:
Climate
Central
&
US
Drought
Monitor

The
Californian
Drought
has
been
steadily
intensifying
over
the
year

35

**Outlook

–
business
focus**

**Almond

Division**

• § Integrate
  acquisi1ons

• § Secure
  addi1onal
  harvest
  equipment
  including
  catch
  &
  shake
  trial

• § Prepare
  for
  2015
  &
  2016
  greenfield
  plan1ngs

• § Further
  development
  of
  orchard
  benchmarking

• § Installing
  dryer
  capacity
  at
  Carina
  West
  for
  50%
  of
  the
  crop

• § Reviewing
  biomass
  plant
  investment

**Food

Division**

• § Con1nue
  innova1on
  stream
  in
  industrial/packaged
  goods
  segments

• § Increase
  focus
  on
  SE
  Asia
  customer
  base

• § Raise
  the
  bar
  on
  quality
  and
  increase
  velocity
  of
  new
  product development

Corporate

**Smart

Snax
Innova5on**

==> picture [150 x 132] intentionally omitted <==

==> picture [99 x 133] intentionally omitted <==

==> picture [26 x 16] intentionally omitted <==

----- Start of picture text -----

New
----- End of picture text -----

Current

Sunsol
Innova5on

==> picture [108 x 145] intentionally omitted <==

----- Start of picture text -----

New
----- End of picture text -----

==> picture [83 x 126] intentionally omitted <==

==> picture [77 x 124] intentionally omitted <==

Pre
2014

Current

• § Invest
  in
  business
  systems
  and
  IT
  pla{orm

**Significant

opportunity
to
improve
the
base
business**

36

Agenda

1. Introduc1on 2. Acquisi1ons 3. Greenfields
   Development 4. Capital
   Raising 5. Future
   Funding
   Op1ons 6. FY14
   Results
   Discussion
   &
   Analysis 7. Strate gy 8. Outlook 9. Risks 10. Summar y 11. A endices pp

37

**Specific

risks**

**Sales

margins,
almond
price
and
costs**

• § Sales
  are
  impacted
  by
  the
  market
  price
  of
  products
  sold
  which
  are
  subject
  to
  market
  forces
  of
  supply
  and
  demand.
  Specifically,
  the
  sales
  of almonds
  owned
  by
  Select
  Harvests
  are
  subject
  to
  global
  pricing
  pa`erns.

• § Margins
  are
  also
  impacted
  by
  the
  cost
  of
  inputs
  such
  as
  growing
  costs
  including
  fer1lizers
  and
  water,
  and
  costs
  of
  raw
  material
  nut commodi1es
  used
  within
  the
  Food
  Products
  Division.
  Management
  Services
  fee
  income
  is
  based
  on
  a
  combina1on
  of
  fixed
  fee
  based contracts,
  and
  variable
  incen1ve
  fee
  based
  contracts
  linked
  to
  almond
  price
  realisa1on
  and
  produc1on
  cost
  efficiencies.

• § Changes
  to
  the
  tenure
  and
  terms
  of
  material
  management
  contracts,
  and
  realisa1on
  of
  incen1ves
  will
  impact
  sales
  margins
  in
  the
  business.

**Weather

pa[erns
and
clima5c
condi5ons**

• § Select
  Harvests
  is
  exposed
  to
  both
  Australian
  weather
  pa`erns,
  disease
  and
  insect
  infesta1ons
  and
  natural
  disasters,
  for
  example
  drought, extreme
  heat,
  floods,
  hail,
  frost,
  insufficient
  chill
  hours
  and
  associated
  changes
  in
  agricultural
  ac1vity.

• § Variability
  in
  weather
  condi1ons
  and
  natural
  disasters
  may
  impact
  key
  drivers
  of
  Select
  Harvests’
  earnings
  including:
  crop
  size
  and
  quality, supply
  and
  demand
  characteris1cs
  in
  agricultural
  markets,
  market
  prices
  for
  almonds
  and
  economic
  ac1vity.

**Water

rights/growing
condi5ons**

• § The
  main
  cost
  inputs
  to
  growing
  almonds
  are
  water,
  fer1ga1on,
  equipment
  and
  direct
  labour.
  Select
  Harvests
  has
  ownership
  and
  access
  to permanent
  water
  rights
  which
  on
  a
  90%
  alloca1on
  are
  sufficient
  to
  support
  the
  growing
  of
  exis1ng
  almond
  crops
  it
  owns
  under
  best hor1cultural
  prac1ce.
  Should
  water
  alloca1ons
  not
  be
  at
  100%,
  which
  due
  to
  impact
  of
  droughts
  has
  been
  the
  experience
  historically,
  a propor1onate
  investment
  in
  temporary
  water
  will
  be
  required,
  which
  increases
  the
  cost
  of
  produc1on.

• § Fer1ga1on
  costs
  are
  subject
  to
  market
  condi1ons
  which
  may
  result
  in
  vola1lity
  in
  input
  costs.
  There
  is
  a
  rela1onship
  between
  the propor1onate
  investment
  in
  growing
  costs
  and
  resultant
  crop
  yield.

**Greenfield

developments**

• § Successful
  implementa1on
  of
  future
  greenfield
  developments
  may
  be
  nega1vely
  impacted
  by
  a
  range
  of
  factors
  including
  weather
  and clima1c
  condi1ons,
  unsuitable
  land
  and
  soil
  characteris1cs,
  available
  water
  and
  rootstock,
  planning
  and
  other
  regulatory
  approvals
  and available
  financing.

38

**Specific

risks
(con5nued)**

**Key

suppliers**

• § In
  addi1on
  to
  water,
  crop
  size
  and
  quality
  is
  heavily
  reliant
  on
  a
  number
  of
  key
  suppliers
  including
  access
  to
  a
  sustainable
  annual
  supply
  of bees
  for
  tree
  pollina1on.

**Impact

of
foreign
exchange
movements**

• § Export
  sales
  are
  realised
  in
  US
  dollars
  and
  translated
  to
  Australian
  dollars.
  Through
  this
  Select
  Harvests
  is
  exposed
  to
  movements
  in
  the
  value of
  the
  US
  dollar.
  The
  impact
  of
  exchange
  rate
  movements
  will
  vary
  from
  1me
  to
  1me
  and
  is
  dependent
  on
  any
  hedging
  entered
  into,
  the
  levels at
  which
  hedging
  contracts
  are
  arranged
  and
  the
  dura1on
  of
  hedging
  contracts.
  The
  impact
  of
  movements
  in
  exchange
  rates
  may
  be
  nega1ve depending
  on
  their
  direc1on,
  1ming
  and
  magnitude.

**Material

contracts**

• § A
  significant
  propor1on
  of
  Select
  Harvests'
  planted
  acreage
  is
  the
  subject
  of
  long
  term
  leases
  with
  third
  par1es.
  The
  rentals
  under
  these leases
  are
  the
  subject
  of
  market
  based
  rent
  reviews.
  There
  is
  a
  risk
  that
  Select
  Harvests'
  leasing
  costs
  will
  increase
  in
  the
  future.

• § Select
  Harvests
  is
  subject
  to
  periodic
  review
  of
  its
  product
  range
  with
  Woolworths
  and
  Coles.

**Counterparty

risks**

• § As
  part
  of
  its
  ongoing
  commercial
  ac1vi1es,
  Select
  Harvests
  enters
  into
  contracts
  with
  various
  third
  par1es.
  The
  ability
  of
  third
  par1es
  to
  meet their
  commitments
  under
  such
  arrangements
  may
  impact
  on
  Select
  Harvests’
  business
  and
  financial
  posi1on.

**Product

liability**

• § The
  nature
  of
  products
  supplied
  by
  Select
  Harvests
  is
  that
  of
  a
  consumable
  food
  product.
  Such
  products
  may
  be
  liable
  to
  infesta1on,
  mould and
  other
  biological
  impacts
  which
  occur
  in
  natural
  products.
  Such
  products
  may
  also
  be
  subject
  to
  processing
  and
  produc1on
  defaults
  against specifica1on.

Compe55on

• § Select
  Harvests'
  financial
  performance
  or
  opera1ng
  margins
  and
  the
  value
  of
  Select
  Harvests
  could
  be
  materially
  adversely
  affected
  if
  exis1ng compe1tors
  increase
  market
  share
  or
  new
  compe1tors
  enter
  the
  market.

• § Such
  compe11on
  may
  have
  the
  effect
  of
  decreasing
  Select
  Harvests'
  sales,
  pricing
  and
  profit
  margins.

39

**Specific

risks
(con5nued)**

**Reliance

on
key
personnel**

• § Select
  Harvests
  is
  commied to providing an arac1ve
  employment
  environment,
  condi1ons
  and
  prospects
  to
  assist
  in
  retaining
  its key
  senior
  management
  personnel.
  However,
  there
  can
  be
  no
  assurance
  that
  Select
  Harvests
  will
  be
  able
  to
  retain
  these
  key personnel.
  The
  loss
  of
  key
  personnel
  or
  the
  inability
  to
  recruit
  and
  retain
  high
  calibre
  staff
  could
  have
  a
  material
  adverse
  effect
  on Select
  Harvests.
  The
  addi1ons
  of
  new
  employees
  and
  the
  departures
  of
  exis1ng
  employees,
  par1cularly
  in
  key
  posi1ons,
  can
  be disrup1ve
  and
  could
  also
  have
  a
  material
  adverse
  affect
  on
  Select
  Harvests.

**Li5ga5on

risk**

• § Li1ga1on
  risks
  to
  Select
  Harvests
  include,
  but
  are
  not
  limited
  to,
  product
  liability,
  intellectual
  property
  disputes,
  customer
  claims, personal
  injury
  claims
  and
  employee
  claims.
  If
  any
  claim
  were
  to
  be
  pursued
  and
  be
  successful
  it
  may
  adversely
  impact
  the
  sales, profits
  or
  financial
  posi1on
  of
  Select
  Harvests.

• § As
  previously
  announced
  on
  28
  February
  2014
  and
  17
  April
  2014,
  Select
  Harvests
  is
  in
  dispute
  with
  Almas
  Almonds.
  The
  dispute relates
  to
  the
  provision
  by
  Select
  Harvests
  to
  Almas
  Almonds
  of
  orchard
  management
  services
  commencing
  in

• As
  previously announced,
  Almas
  Almonds
  has
  now
  commenced
  legal
  proceedings
  against
  Select
  Harvests
  in
  the
  Supreme
  Court
  of
  Victoria
  in rela1on
  to
  the
  dispute.
  Almas
  Almonds
  is
  claiming
  damages
  totalling
  $9,010,879
  plus
  interest
  and
  costs.
  Select
  Harvests
  denies
  any liability
  in
  rela1on
  to
  the
  claim
  and
  intends
  to
  vigorously
  defend
  the
  claim.

**Occupa5onal

health
and
safety**

• § If
  Select
  Harvests
  fails
  to
  comply
  with
  necessary
  OH&S
  legisla1ve
  requirements,
  it
  could
  result
  in
  fines,
  penal1es
  and
  compensa1on for
  damages
  as
  well
  as
  reputa1onal
  damage
  to
  Select
  Harvests.

**Environmental

regula5ons**

• § Select
  Harvests
  is
  required
  to
  comply
  with
  environmental
  regula1ons.
  If
  any
  breach
  of
  these
  regula1ons
  occurs,
  Select
  Harvests
  may be
  subject
  to
  remedia1on
  costs
  and
  other
  liabili1es.

40

**Acquisi5on

risks**

**Comple5on

Risk**

• § Comple1on
  of
  the
  Amaroo
  and
  Grewal
  acquisi1ons
  are
  subject
  to
  a
  number
  of
  condi1ons
  precedent.
  It
  is
  possible
  that
  these condi1ons
  may
  be
  substan1ally
  delayed
  or
  may
  not
  be
  forthcoming.
  The
  Placement
  and
  SPP
  will
  occur
  prior
  to,
  and
  are
  not subject
  to,
  comple1on
  of
  the
  Amaroo
  and
  Grewal
  acquisi1ons.
  If,
  for
  whatever
  reason,
  the
  acquisi1ons
  do
  not
  proceed,
  Select Harvests
  may
  use
  the
  funds
  raised
  under
  the
  Placement
  and
  SPP
  to
  re1re
  debt
  or
  seek
  alterna1ve
  acquisi1ons.
  In
  the
  event
  that comple1on
  of
  the
  Amaroo
  acquisi1on
  does
  not
  proceed,
  Select
  Harvests
  may
  be
  liable
  to
  forfeit
  a
  deposit.

**Funding

Risk**

• § The
  placement
  agreement
  includes
  certain
  rights
  of
  the
  joint
  lead
  managers
  to
  terminate
  those
  arrangements.
  The
  availability
  of the
  acquisi1on
  debt
  facility
  is
  subject
  to
  various
  condi1ons
  precedent
  such
  that
  funds
  may
  not
  be
  available
  under
  the
  acquisi1on debt
  facility
  (or
  as
  a
  consequence
  of
  comple1on
  of
  the
  Placement
  and
  SPP),
  in
  circumstances
  where
  Select
  is
  not
  en1tled
  to terminate
  either
  or
  both
  of
  the
  acquisi1on
  agreements.
  While
  the
  termina1on
  rights
  of
  the
  joint
  lead
  managers
  under
  the placement
  agreement
  and
  the
  condi1ons
  precedent
  to
  the
  acquisi1on
  debt
  facility
  are
  considered
  to
  be
  consistent
  with
  market prac1ce,
  a
  termina1on
  right
  (under
  the
  placement
  agreement)
  may
  arise,
  and
  non-­‐fulfilment
  of
  a
  condi1on
  precedent
  to
  the acquisi1on
  debt
  facility
  may
  occur,
  as
  a
  consequence
  of
  circumstances
  outside
  Select
  Harvests’
  control.
  As
  such,
  there
  is
  a
  risk that
  Select
  Harvests
  has
  an
  obliga1on
  to
  pay
  the
  purchase
  price
  but,
  due
  to
  the
  termina1on
  of
  the
  placement
  agreement
  or
  the unavailability
  of
  the
  acquisi1on
  debt
  facility,
  does
  not
  have
  the
  necessary
  amount
  of
  funding
  available.
  In
  this
  instance
  Select Harvests
  would
  need
  to
  seek
  to
  put
  in
  place
  new
  financing
  arrangements,
  the
  terms
  of
  which
  may
  be
  less
  a`rac1ve
  than
  the proposed
  acquisi1on
  funding
  mix.

**Historical

Liability**

• § If
  the
  acquisi1ons
  complete,
  Select
  Harvests
  may
  become
  directly
  or
  indirectly
  liable
  for
  any
  liabili1es
  previously
  incurred
  by
  the vendors,
  which
  may
  not
  have
  been
  iden1fied
  during
  due
  diligence,
  or
  which
  were
  of
  a
  greater
  magnitude
  than
  expected. Representa1ons
  and
  warran1es
  nego1ated
  by
  Select
  Harvests
  may
  not
  be
  adequate
  in
  these
  circumstances.
  Such
  liability
  may therefore
  adversely
  affect
  the
  financial
  performance
  or
  posi1on
  of
  Select
  Harvests
  post-­‐acquisi1on.

41

**Acquisi5on

risks
(con5nued)**

**Synergies

and
integra5on
risk**

• § Proposed
  acquisi1ons
  may
  or
  may
  not
  realise
  expected
  opera1onal
  outcomes
  and
  benefits,
  and
  may
  be
  subject
  to
  acquisi1on, counterparty
  and
  integra1on
  risks.
  In
  addi1onal,
  new
  acquisi1ons
  or
  growth
  ini1a1ves
  may
  require
  further
  capital
  expenditure and
  investment
  over
  1me.

**Acquisi5on

Accoun5ng**

• § In
  accoun1ng
  for
  the
  acquisi1on,
  Select
  Harvests
  will
  need
  to
  perform
  a
  fair
  value
  assessment
  of
  all
  of
  the
  assets
  and
  liabili1es, which
  will
  include
  the
  iden1fica1on
  and
  valua1on
  of
  iden1fiable
  intangible
  assets.
  The
  es1mates
  contained
  in
  this
  presenta1on are
  management’s
  preliminary
  best
  es1mates
  and
  are
  subject
  to
  change
  when
  the
  detailed
  fair
  value
  assessment
  is
  performed.

**Loss

of
key
customers**

• § There
  is
  a
  risk
  of
  disrup1ons
  in
  the
  supply
  of
  products
  or
  in
  customer
  service
  levels
  during
  integra1on
  between
  the
  Select Harvests’
  exis1ng
  business
  and
  the
  acquisi1ons,
  which
  could
  result
  in
  the
  loss
  of
  key
  customers.

**Rela5onships

with
suppliers**

• § There
  is
  a
  risk
  that
  suppliers
  cease
  supply
  following
  the
  acquisi1ons.
  Any
  loss
  of
  key
  suppliers
  may
  have
  an
  adverse
  affect
  on sales
  and/or
  terms
  of
  trade.
  In
  addi1on,
  any
  change
  in
  rela1onship
  with
  suppliers,
  or
  in
  terms
  of
  trade,
  could
  have
  an
  adverse impact
  on
  Select
  Harvest’
  prospects.

42

**Acquisi5on

risks
(con5nued)**

**Reliance

on
informa5on
provided**

• § Select
  Harvests
  undertook
  due
  diligence
  in
  respect
  of
  the
  acquisi1ons,
  which
  relied
  in
  part
  on
  the
  review
  of
  financial
  and
  other informa1on
  provided
  by
  the
  vendors.
  Despite
  taking
  reasonable
  efforts,
  Select
  Harvests
  has
  not
  been
  able
  to
  verify
  the accuracy,
  reliability
  or
  completeness
  of
  all
  the
  informa1on
  which
  was
  provided
  against
  independent
  data.
  Similarly,
  Select Harvests
  has
  prepared
  (and
  made
  assump1ons
  in
  the
  prepara1on
  of)
  the
  financial
  informa1on
  rela1ng
  to
  Amaroo,
  Grewal
  and Mendook
  on
  a
  stand-­‐alone
  basis
  and
  also
  to
  Select
  Harvests
  post-­‐acquisi1on
  included
  in
  this
  presenta1on
  in
  reliance
  on
  limited financial
  informa1on
  and
  other
  informa1on
  provided
  by
  the
  vendors.
  Select
  Harvests
  is
  unable
  to
  verify
  the
  accuracy
  or completeness
  of
  all
  of
  that
  informa1on.

• § If
  any
  of
  the
  data
  or
  informa1on
  provided
  to
  and
  relied
  upon
  by
  Select
  Harvests
  in
  its
  due
  diligence
  process
  and
  its
  prepara1on of
  this
  presenta1on
  proves
  to
  be
  incomplete,
  incorrect,
  inaccurate
  or
  misleading,
  there
  is
  a
  risk
  that
  the
  actual
  financial
  posi1on and
  performance
  of
  Amaroo,
  Grewal
  and
  Mendook
  and
  the
  combined
  group
  may
  be
  materially
  different
  to
  the
  financial posi1on
  and
  performance
  expected
  by
  Select
  Harvests
  and
  reflected
  in
  this
  presenta1on.
  Investors
  should
  also
  note
  that
  there is
  no
  assurance
  that
  due
  diligence
  conducted
  was
  conclusive
  and
  that
  all
  material
  issues
  and
  risks
  in
  respect
  of
  the
  acquisi1ons have
  been
  iden1fied.
  Therefore,
  there
  is
  a
  risk
  that
  unforseen
  issues
  and
  risks
  may
  arise,
  which
  may
  also
  have
  a
  material
  impact on
  Select
  Harvests.

43

**General

risks**

**Share

price
and
volume
fluctua5ons**

• § Securi1es
  may
  experience
  extreme
  price
  and
  trading
  volume
  fluctua1ons.
  Following
  the
  Capital
  Raising,
  there
  may
  not
  be
  an
  ac1ve trading
  market
  in
  Select
  Harvests’
  shares.
  If
  a
  market
  is
  not
  sustained,
  it
  may
  be
  difficult
  for
  investors
  to
  sell
  their
  shares
  at
  a
  price that
  is
  a`rac1ve
  to
  them
  or
  at
  all.
  The
  price
  of
  the
  New
  Shares
  may
  not
  be
  representa1ve
  of
  the
  price
  that
  will
  prevail
  aher
  the Capital
  Raising.

• § The
  equity
  market
  has
  experienced
  price
  and
  volume
  vola1lity
  that
  has
  affected
  the
  share
  price
  of
  many
  companies.
  Security
  prices for
  many
  companies
  have
  experienced
  wide
  fluctua1ons
  that
  have
  ohen
  been
  unrelated
  to
  the
  opera1ng
  performance
  of
  those companies.
  Fluctua1ons
  such
  as
  these
  may
  adversely
  affect
  the
  market
  price
  of
  Select
  Harvests’
  shares.

**Economic

risks**

• § Select
  Harvests
  is
  exposed
  to
  economic
  factors
  in
  the
  ordinary
  course
  of
  business.
  Factors
  such
  as
  changes
  in
  fiscal,
  monetary
  and regulatory
  policies
  can
  adversely
  impact
  Select
  Harvests'
  earnings.
  Given
  that
  interest
  rates
  in
  Australia
  are
  at
  historically
  low
  levels, there
  is
  a
  likelihood
  of
  some
  increase
  in
  the
  medium
  to
  longer
  term.
  A
  high
  propor1on
  of
  Select
  Harvests
  sales
  are
  based
  on exports
  in
  US
  Dollars,
  and
  Select
  Harvests
  also
  imports
  raw
  materials
  which
  are
  paid
  in
  US
  Dollars.
  The
  company’s
  earnings
  are exposed
  to
  fluctua1ons
  in
  exchange
  rates.

• § Select
  Harvests
  has
  a
  hedging
  policy
  whereby
  a
  propor1on
  of
  foreign
  currency
  risks
  are
  covered
  through
  the
  use
  of
  deriva1ves. Where
  a
  liability
  or
  asset
  arises
  in
  a
  currency
  other
  than
  Australian
  dollars,
  the
  exposure
  is
  covered
  by
  the
  propor1onate
  forward sale
  or
  purchase
  of
  the
  currency.
  A
  por1on
  of
  all
  variable
  interest
  rates
  commitments
  are
  hedged
  by
  the
  use
  of
  fixed-­‐for-­‐floa1ng interest
  rate
  swaps,
  and/or
  interest
  rate
  caps.
  The
  principal
  amount
  and
  the
  dura1on
  of
  these
  swaps/caps
  is
  determined
  by
  the total
  level
  of
  Select
  Harvests'
  borrowings
  and
  the
  interest
  rate
  outlook
  prevailing
  in
  the
  financial
  markets.

**Government

policies
and
legisla5on**

• § Select
  Harvests
  may
  be
  affected
  by
  changes
  to
  government
  policies
  and
  legisla1on,
  including
  those
  rela1ng
  to
  the
  agricultural industry,
  property,
  the
  environment,
  taxa1on,
  the
  regula1on
  of
  trade
  prac1ces
  and
  compe11on.

44

**General

risks
(con5nued)**

**Taxa5on

implica5ons**

• § Future
  changes
  in
  Australian
  taxa1on
  law,
  including
  changes
  in
  interpreta1on
  or
  applica1on
  of
  the
  law
  by
  the
  courts
  or taxa1on
  authori1es
  in
  Australia,
  may
  affect
  taxa1on
  treatment
  of
  an
  investment
  in
  Select
  Harvests
  shares,
  or
  the
  holding
  and disposal
  of
  those
  shares.
  Further,
  changes
  in
  tax
  law,
  or
  changes
  in
  the
  way
  tax
  law
  is
  expected
  to
  be
  interpreted,
  in
  the
  various jurisdic1ons
  in
  which
  Select
  Harvests
  operates,
  may
  impact
  the
  future
  tax
  liabili1es
  of
  Select
  Harvest.

**Changes

in
accoun5ng
policy**

• § Select
  Harvests
  is
  subject
  to
  the
  usual
  business
  risk
  that
  there
  may
  be
  changes
  in
  accoun1ng
  policies
  which
  impact
  on
  Select Harvests.

**Asset

impairment**

• § The
  Select
  Harvests’
  Board
  regularly
  monitors
  impairment
  risk.
  Consistent
  with
  accoun1ng
  standards,
  Select
  Harvests
  is periodically
  required
  to
  assess
  the
  carrying
  value
  of
  its
  assets,
  including
  its
  brands.
  Where
  the
  value
  of
  an
  asset
  is
  assessed
  to be
  less
  than
  its
  carrying
  value,
  Select
  Harvests
  is
  obliged
  to
  recognise
  an
  impairment
  charge
  in
  its
  profit
  and
  loss
  account. Impairment
  charges
  can
  be
  significant
  and
  operate
  to
  reduce
  the
  level
  of
  a
  company's
  profits
  and,
  poten1ally,
  its
  capacity
  to pay
  dividends.
  Impairment
  charges
  are
  a
  non-­‐cash
  item.

45

Agenda

1. Introduc1on 2. Acquisi1ons 3. Greenfields
   Development

2. Capital
   Raising 5. Future
   Funding
   Op1ons 6. FY14
   Results
   Discussion
   &
   Analysis

3. Strate gy

4. Outlook 9. Risks

10. Summary 11. A endices pp

46

**What

we
are
building?**

• § A
  strong
  and
  trustworthy
  company
  that
  looks
  aher
  stakeholder
  interests

• § A
  company
  of
  passionate
  people

• § A
  well
  run
  integrated
  company
  that
  is
  well
  posi1oned
  to
  benefit
  from
  the
  indisputable
  global
  almond
  industry
  fundamentals

• § A
  cash
  genera1ng
  company
  that
  will
  be
  posi1oned
  to
  invest
  in
  growth
  in
  a
  growth
  industry

• § A
  business
  that
  can
  manage
  the
  dynamic
  agricultural
  cycle
  and
  can
  mi1gate
  the
  inherent
  risks

• § A
  company
  that
  responds
  to
  the
  challenges
  and
  learns
  from
  the
  experience

An
integrated
agribusiness
transforming
itself

47

**Why

Select
Harvests?**

**1. Excellent

Industry
Fundamentals**

4. Compe55ve
Advantage:
Quality
Assets

§ Supply
/
demand

• § Counter-­‐cyclical
  to
  USA

§ Balanced
por{olio
of
mature
orchards
and land
bank
for
future
produc1on
growth

§ Carina
West
processing
facility

2. Integrated
Business
Model

• § Market
  leading
  brands

§ Orchards

§ Processing
&
packaged
goods

• § Large
  nut,
  seed
  and
  dry
  fruit
  trader

5. Current
Market
Environment

§ Price
and
currency
favourable

§ US
drought

3. Culture
for
Improvement

§ Strong
leadership

• § One
  Select

6. Growth

§ Business
posi1oning
itself
to
grow

**Solid

core
business
with
further
growth
from
maturing
orchard
profile**

48

**Thank

you**

Please direct any queries to: Paul
Thompson Managing
Director +61
3
9474
3544

Paul
Chambers Chief
Financial
Officer +61
3
9474
3544

Andrew
Angus Investor
Rela1ons +61
402
823
757

==> picture [248 x 152] intentionally omitted <==

==> picture [243 x 152] intentionally omitted <==

==> picture [231 x 152] intentionally omitted <==

49

Agenda

1. Introduc1on 2. Acquisi1ons 3. Greenfields
   Development

2. Capital
   Raising 5. Future
   Funding
   Op1ons 6. FY14
   Results
   Discussion
   &
   Analysis

3. Strate gy

4. Outlook 9. Risks

5. Summar y

11. Appendices

50

**Greenfield

&
Replant
Program
(indica5ve)**

	2015	2015	2016	2016	2017	2017	2018	2018	Total	Total
	(acres)	(ha)	(acres)	(ha)	(acres)	(ha)	(acres)	(ha)	(acres)	(ha)
Greenfeld Allinga Amaroo Grewal Mendook	1,000 405 - - 465 188 - -		- - 750 303 - - 1,600 647		- - 750 303 900 364 - -		- - - - - - - -
									1,000 405
									1,500 606
									1,365 553
									1,600 647
Total Greenfeld	1,465 593		2,350 951		1,650 668		- -		5,465 2,213
Replants
Kyndalyn Park	- -		350 142		350 142		- -		700 283
Wemen	- -		- -		- -		406 164		406 164
Total Replants	- -		350 142		350 142		406 164		1,106 448
Total Greenfeld & Replants	1,465 593		2,700 1,093		2,000 810		406 164		6,571 2,660

Source:
Company
Data

51

**SHV

2015
orchard
profile
(including
acquisi5ons)**

Almond orchard pormolio	Planted Orchard Area(acres)	Planted Orchard Area(acres)	Planted Orchard Area(hectares)	Planted Orchard Area(hectares)	Bearing Orchard Area(acres)	Bearing Orchards Area(hectares)
Northern Region Owned Leased Total	1,491 3,017 4,508		604 1,221 1,825		1,423 3,017 4,440	576 1,221 1,798
Central Region Owned Leased Total	4,165 1,481 5,646		1,686 600 2,286		3,554 1,481 5,035	1,439 600 2,039
Southern Region Owned Leased Total	3,156 - 3,156		1,278 - 1,278		2,467 - 2,467	999 - 999
Total All Regions Owned Leased	8,812 4,498		3,568 1,821		7,444 4,498	3,014 1,821
Total	13,311		5,389		11,943	4,835
Landbank(unplanted) Acres Hectares Northern Region - - Central Region 1,600 648 Southern Region 3,865 1,565 TotalallRegions 5,465 2,213
Landbank(unplanted)		Acres		Hectares
Northern Region Central Region Southern Region		- 1,600 3,865		- 648 1,565
TotalallRegions		5,465		2,213

Source:
Company
Data

52

**SHV

2015
orchard
profile
(including
acquisi5ons)**

	AREABYTREEAGE	AREABYTREEAGE	AREABYTREEAGE	AREABYTREEAGE	AREABYTREEAGE	AREABYTREEAGE
	**Years0-7 **		Years8-26		Years26+		TOTALPLANTED		AVAILABLETOPLANT		TOTAL
	(acres)	(ha)	(acres)	(ha)	(acres)	(ha)	(acres)	(ha)	(acres)	(ha)	(acres)	(ha)
Northern Region Company Owned Leased Total	312 1,332	126 539	1,179 1,685	477 682	- -	- -	1,491 3,017	604 1,221	- **- **	- **- **	1,491 3,017	604 1,221
	1,644	666	2,864	1,160	-	-	4,508	1,825	-	-	4,508	1,825
Central Region Company Owned Leased Total	638 -	258 -	2,455 1,481	994 600	1,072 -	434 -	4,165 1,481	1,686 600	1,600 **- **	648 **- **	5,765 1,481	2,334 600
	638	258	3,936	1,594	1,072	434	5,646	2,286	1,600	648	7,246	2,934
Southern Region Company Owned Leased Total	1,018 -	412 -	2,138 -	866 -	- -	- -	3,156 **- **	1,278 **- **	3,865 **- **	1,565 **- **	7,021 **- **	2,843 **- **
	1,018	412	2,138	866	-	-	3,156	1,278	3,865	1,565	7,021	2,843
TOTAL Company Owned Leased Total	1,968 1,332	797 539	5,772 3,166	2,337 1,282	1,072 -	434 -	8,812 4,498	3,568 1,821	5,465 **- **	2,213 **- **	14,277 4,498	5,780 1,821
	3,300	1,336	8,938	3,619	1,072	434	13,311	5,389	5,465	2,213	18,776	7,601

Source:
Company
Data

53

**SHV

-­‐
Food
Division
-­‐
brand
Summary**

==> picture [127 x 69] intentionally omitted <==

• 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
  36.8%
  as
  at
  20/7/14.
  Source
  Aztec
  Na1onal
  Chains
  Scan
  data)

• • Snacking
  product
  range:
  por1on
  control
  packs,
  Lucky
  Smart
  Snax
  and
  Lucky
  Snack
  Tubs.

• Distribu1on:
  major
  supermarkets
  and
  export
  markets
  including
  the
  Middle
  East,
  Indonesia
  and
  Papua
  New
  Guinea.

==> picture [110 x 75] intentionally omitted <==

• Product
  range:
  nuts,
  dried
  fruit,
  legumes
  and
  pulses,
  cereals,
  grains,
  seeds,
  flour,
  muesli
  and
  organic
  foods.

• • Bulk
  and
  convenient
  packs.

• Distribu1on:
  health
  food
  stores
  and
  pharmacies
  na1onally.

==> picture [106 x 69] intentionally omitted <==

==> picture [121 x 77] intentionally omitted <==

==> picture [109 x 58] intentionally omitted <==

• Product
  range:
  muesli,
  dried
  fruit,
  nuts
  and
  snacks.

• Distribu1on:
  major
  supermarkets
  (muesli)
  and
  export
  markets
  including
  Hong
  Kong,
  Singapore,
  Malaysia
  ,
  Indonesia
  and
  the Pacific
  Rim.

• Product
  range:
  muesli,
  dried
  fruit,
  wholefoods,
  nuts
  and
  snacks.

• Distribu1on:
  Health
  aisle
  of
  major
  supermarkets
  and
  export
  markets
  including
  Hong
  Kong,
  Singapore,
  Malaysia,
  Indonesia
  and the
  Pacific
  Rim.

==> picture [109 x 57] intentionally omitted <==

• 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.

Source:
Company
Data
and
Aztec
Na/onal
Chains
Scan
data

54

**Supply

–
demand
dynamic
a[rac5ve**

==> picture [524 x 281] intentionally omitted <==

----- Start of picture text -----

Tonnes Carry-­‐out Global
Production Total
Supply Consumption
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-­‐
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Forecast
----- End of picture text -----

Source:
Almond
Insights
2013-­‐14,
Almond
Board
of
Australia

• § Global
  market
  worth
  an es1mated
  US$4.5
  billion

• § Supply
  and
  demand
  have
  grown at
  8%
  CAGR
  over
  past
  decade

• § Current
  demand
  growth
  trending above
  average
  growth
  rate; average
  supply
  growth
  cannot
  be maintained
  due
  to
  slow-­‐down
  in recent
  plan1ng
  ac1vity

• § Annual
  consump1on
  has exceeded
  produc1on
  over
  past two
  years

• § Post
  GFC
  carry-­‐over
  stock
  has sohened
  upward
  price
  pressure so
  far

**Global

almond
market
fundamentals
are
compelling**

55

**Almond

price**

Note: this
chart
is
for
indica/ve purposes
only
–
it
represents
one premium
almond
grade
(of
the many
that
Select
Harvests
produce and
sell)
and
its
sole
reason
for inclusion
is
to
give
the
reader
an understanding
of
the
historical rela/vity
of
the
current
almond price
and
the
trend
which
is generally
common
across
almond grades.
It
should
not
be
construed as
the
average
price
that
Select Harvests
sells
at.

Source:
Company
Data

Price
has
remained
strong
despite
substan5al
produc5on
increases
and
A$
apprecia5on

56

**Australian

almond
industry
snapshot**

Company	Orchards	Processing	Sales & Marke5ng
Select Harvests	13,311 acres (5,389 ha) –19%* market share SA, Vic & NSW	Primary Processing 30KT Robinvale Vic Value Added Processing Robinvale & Thomastown Vic	Consumer, Foodservice & Industrial businesses Global Nut Trader
Olam	30,000 acres (11,949 ha) – 42%* market share Vic	Primary Processing 40KT Carwarp Vic	Consumer, Foodservice & Industrial businesses Global Nut Trader
Almondco (Simarloo)	Nil direct 145 grower suppliers	Primary Processing 30KT Renmark, SA Value Added Processing	Consumer, Foodservice & Industrial businesses Global Almond Trader
Nut Producers Australia (Riverland Almonds)	Yes – acreage unknown	Primary Processing 10KT Loxton, SA	Consumer, Foodservice & Industrial businesses Almond & Pistachio Trader

Source:
Almond
Board
of
Australia
and
Company
Data

*
Australia
has
70,607
acres
(28,586
ha)
of
almond
orchards
(Australian
Almond
Insights
2013-­‐14,
Almond
Board
of
Australia).

SHV
is
the
only
listed
opportunity
for
investors
to
par5cipate
in
this
market
growth

57

**Key

drivers
–
weather
–
annual
almond
cycle**

Adverse
weather
is
biggest
threat

==> picture [716 x 376] intentionally omitted <==

----- Start of picture text -----

Dormancy
Nuts
Mature
dormant
between
Almond
Trees
are
Kernel,
Hull,
Leaves
Forma1on
of
Fruit/ § Pollina1on
–
Wet
weather
&
Wind
impacts
May-­‐July
Blossom
Hull
Split
§ Petal
fall
to
early
nutlet
development
–
Frost
impacts
Bees
used
for
Hull
opens
&
Nut
splits
pollina1on
in
Aug
from
stem
§ Harvest
–
Wet
weather
impacts
Can
impact
Volume
&
Quality
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
FY2013
FY2014
FY2015
Harvest
shakers
drop
nuts
to
ground,
Sweepers
pick
up
nuts,
Truck
nuts
to
Processing
Facility
Primary
Processing
–
removal
of
hull
(In-­‐shell)
or
hull
&
shell
(kernel),
prior
to
Value
Added
Processing
Value
Added
Processing
–
blanching,
slicing,
slivering,
meal,
pastes,
roas1ng,
blending
Source:
Company
Data
Almond
Sales
Program
----- End of picture text -----

58

**Almond

trees
long
life
&
lead
5me
to
maturity**

§ Almond
trees
take
7
years
to
mature,
then
produce
at
that
level
for
approx.
18
more
years
before
tapering

==> picture [446 x 324] intentionally omitted <==

----- Start of picture text -----

Almond
Tree
Life
Cycle
&
Yield
1.60
1.50
1.40
1.30
1.20
1.10
1.00
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Average
Yield
-­‐ Tonnes
/acre Top
Quartile
Yield
-­‐ Tonnes
/acre
Yield
(Tonnes/Acre)
----- End of picture text -----

Source:
Almond
Board
of
Australia
and
Company
Data

Select
Harvests
secure
supply
chain
&
yield
opportuni5es
-­‐
average
tree
age
is
10.9
years

59

**Select’s

financial
history**

SHV Historical Summary Units 2006 2007 2008 2009 2010 2011 2012 2013 2014	SHV Historical Summary Units 2006 2007 2008 2009 2010 2011 2012 2013 2014
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$M) 37.9 40.0 25.4 23.0 23.6 18.5 13.4 32.7 Underlying NPAT (A$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 Ra?o (%) 80.0% 80.0% 96.7% 28.2% 48.5% 38.6% 47.6% 29.9% Net Tangible Assets per Share (A$/Share) 1.83 1.57 1.41 1.56 1.87 2.17 2.19 2.14 Net Interest Cover (1mes) 82.3 75.8 15.6 7.1 10.7 6.7 3.2 7.5 Net Debt (A$M) 1.3 1.6 46.8 52.4 45.0 73.1 66.8 79.3 Shareholder Equity (A$M) 101.5 95.5 94.1 100.9 113.6 168.8 160.3 159.5 Net Debt to Equity Ra?o (%) 1.3% 1.7% 49.7% 51.9% 39.6% 43.3% 41.7% 49.7% Share Price (A$/Share) 13.02 11.60 6.00 2.16 3.46 1.84 2.40 3.9 Market Capitalisa5on (A$M) 517.0 449.4 234.1 85.4 137.6 103.5 120.0 224.3 P/E Ra5o 19.5 16.0 12.9 5.1 8.0 5.8 12.6 9.8	188.3
	41.8
	22.2%
	37.4
	29.0
	58.0
	50.2
	20.0
	39.8%
	2.47
	9.3
	94.8
	182.8
	51.9%
	5.14
	298.12
	10.2

Source:
Company
Data

60

**Industry

informa5on**

Useful
websites
for
US
almond
crop
and
price
informa5on

• § Industry
  Associa1ons

• ─ www.almondboard.com

• Californian
  Almond
  Board

• § US
  Companies ─ www.bluediamond.com

• Blue
  Diamond
  Growers

• ─ Almond
  Insights www.almondinsights.com

• ─ Paramount
  Farms www.paramoun{arms.com

• ─ Hilltop
  Ranch www.hilltopranch.com

• ─ Merlo
  Farming www.merlofarminggroup.com

61

**US

drought
situa5on
–
Temperature/Snowpack**

Temperature

• § Six
  Months
  In
  and
  Sizzling
  California
  Sets
  Record
  -­‐
  Andrea
  Thompson,
  Climate
  Central,
  16
  July
  2014

• ─ California
  just
  finished
  the
  ho`est
  first
  half
  year
  on
  record,
  a
  period
  going
  back
  120
  years,
  according
  to
  the na1onal climate overview for June released
  by
  the
  Na1onal
  Oceanic
  and
  Atmospheric
  Administra1on
  (NOAA).

• ─ h`p://www.climatecentral.org/news/california-­‐warmest-­‐year-­‐record-­‐17774

Snowpack

• § California
  drought:
  Sierra
  snowpack
  is
  barely
  there
  -­‐
  Peter
  Fimrite,
  SFGate,
  San
  Francisco
  Chronicle
  ,
  2
  May
  2014

• ─ The
  snow
  levels
  in
  the
  Sierra
  were
  only
  18
  percent
  of
  average
  on
  Thursday,
  when
  the
  last
  of
  the
  season's
  once-­‐a-­‐month measurements
  was
  taken
  by
  the California Department of Water Resources.
  That's
  worse
  than
  last
  month,
  when
  the
  snowpack was
  32
  percent
  of
  normal
  for
  the
  date.
  Condi1ons
  get
  worse
  the
  farther
  north
  one
  goes
  in
  the
  Sierra
  and
  Cascade
  ranges.
  The snowpack
  is
  a
  paltry
  7
  percent
  of
  average
  in
  the
  northern
  part
  of
  the
  state,
  according
  to
  the
  measurements

• ─ h`p://www.sfgate.com/science/ar1cle/California-­‐drought-­‐Sierra-­‐snowpack-­‐is-­‐barely-­‐5446649.php

62

**US

Drought
Situa5on
–
Groundwater**

Groundwater

• § Satellite
  Study
  Reveals
  Parched
  U.S.
  West
  Using
  Up
  Underground
  Water
  -­‐
  Karen
  Northon,
  NASA,
  24
  July
  2014

• ─ A
  new
  study
  by
  NASA
  and
  University
  of
  California,
  Irvine,
  scien1sts
  finds
  more
  than
  75
  percent
  of
  the
  water
  loss
  in
  the drought-­‐stricken
  Colorado
  River
  Basin
  since
  late
  2004
  came
  from
  underground
  resources.
  The
  extent
  of
  groundwater loss
  may
  pose
  a
  greater
  threat
  to
  the
  water
  supply
  of
  the
  western
  United
  States
  than
  previously
  thought.

• ─ “We
  don't
  know
  exactly
  how
  much
  groundwater
  we
  have
  leh,
  so
  we
  don't
  know
  when
  we're
  going
  to
  run
  out,"
  said Stephanie
  Castle,
  a
  water
  resources
  specialist
  at
  the
  University
  of
  California,
  Irvine,
  and
  the
  study's
  lead
  author.
  "This
  is
  a lot
  of
  water
  to
  lose.
  We
  thought
  that
  the
  picture
  could
  be
  pre`y
  bad,
  but
  this
  was
  shocking.”

• ─ "The
  Colorado
  River
  Basin
  is
  the
  water
  lifeline
  of
  the
  western
  United
  States,"
  said
  Famigliev.
  "With
  Lake
  Mead
  at
  its lowest
  level
  ever,
  we
  wanted
  to
  explore
  whether
  the
  basin,
  like
  most
  other
  regions
  around
  the
  world,
  was
  relying
  on groundwater
  to
  make
  up
  for
  the
  limited
  surface-­‐water
  supply.
  We
  found
  a
  surprisingly
  high
  and
  long-­‐term
  reliance
  on groundwater
  to
  bridge
  the
  gap
  between
  supply
  and
  demand.“

• ─ h`p://www.nasa.gov/press/2014/july/satellite-­‐study-­‐reveals-­‐parched-­‐us-­‐west-­‐using-­‐up-­‐underground-­‐water/

• § California
  drought:
  Lawmakers
  consider
  historic
  rules
  to
  limit
  groundwater
  pumping
  -­‐
  Paul
  Rogers,
  San
  Jose
  Mercury
  News, 9
  August
  2014

• ─ In
  what
  would
  be
  the
  most
  significant
  water
  law
  passed
  in
  California
  in
  nearly
  50
  years,
  lawmakers
  in
  Sacramento
  are working
  with
  Gov.
  Jerry
  Brown
  on
  a
  landmark
  measure
  to
  regulate
  groundwater
  pumping
  for
  the
  first
  1me.

• ─ h`p://www.mercurynews.com/drought/ci_26307724/california-­‐drought-­‐lawmakers-­‐consider-­‐historic-­‐rules-­‐limit-­‐ groundwater

63

**Interna5onal

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disclosures**

This
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Company
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which
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In
par/cular,
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except
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below.

_**United

States**_

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in
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except
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state
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and
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of
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invest
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or

persons
who
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subscrip/on
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previously
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price
of
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NZ$500,000
for
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ini/al
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and
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date of
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64

**Interna5onal

offer
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_**United

Kingdom**_

Neither
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rela/ng
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approval
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Conduct
Authority
in
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Kingdom
and
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(within
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meaning
of
sec/on
85
of
the
Financial
Services and
Markets
Act
2000,
as
amended
("FSMA"))
has
been
published
or
is
intended
to
be
published
in
respect
of
the
New
Shares.
This document
is
issued
on
a
confiden/al
basis
to
"qualified
investors"
(within
the
meaning
of
sec/on
86(7)
of
FSMA)
in
the
United Kingdom,
and
the
New
Shares
may
not
be
offered
or
sold
in
the
United
Kingdom
by
means
of
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This
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Kingdom.

Any
invita/on
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ac/vity
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received
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sale
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only
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communicated
and
will
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or
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be
communicated
in
the
United
Kingdom
in
circumstances
in
which
sec/on
21(1)
of
FSMA
does
not apply
to
the
Company.

In
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Kingdom,
this
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is
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distributed
only
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and
is
directed
at,
persons
(i)
who
have
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experience
in mabers
rela/ng
to
investments
falling
within
Ar/cle
19(5)
(investment
professionals)
of
the
Financial
Services
and
Markets
Act
2000 (Financial
Promo/ons)
Order
2005
("FPO"),
(ii)
who
fall
within
the
categories
of
persons
referred
to
in
Ar/cle
49(2)(a)
to
(d)
(high net
worth
companies,
unincorporated
associa/ons,
etc.)
of
the
FPO
or
(iii)
to
whom
it
may
otherwise
be
lawfully
communicated (together
"relevant
persons").
The
investments
to
which
this
document
relates
are
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only
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and
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offer
or agreement
to
purchase
will
be
engaged
in
only
with,
relevant
persons.
Any
person
who
is
not
a
relevant
person
should
not
act
or rely
on
this
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or
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of
its
contents.

65

**Interna5onal

offer
restric5ons
/
disclosures**

_**Hong

Kong**_

WARNING:
This
document
has
not
been,
and
will
not
be,
registered
as
a
prospectus
under
the
Companies
(Winding
Up
and Miscellaneous
Provisions)
Ordinance
(Cap.
32)
of
Hong
Kong,
nor
has
it
been
authorised
by
the
Securi/es
and
Futures
Commission
in Hong
Kong
pursuant
to
the
Securi/es
and
Futures
Ordinance
(Cap.
571)
of
the
Laws
of
Hong
Kong
(the
"SFO").
No
ac/on
has
been taken
in
Hong
Kong
to
authorise
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or
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in connec/on
with
it.
Accordingly,
the
New
Shares
have
not
been
and
will
not
be
offered
or
sold
in
Hong
Kong
other
than
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investors"
(as
defined
in
the
SFO).

No
adver/sement,
invita/on
or
document
rela/ng
to
the
New
Shares
has
been
or
will
be
issued,
or
has
been
or
will
be
in
the possession
of
any
person
for
the
purpose
of
issue,
in
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Kong
or
elsewhere
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is
directed
at,
or
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contents
of
which
are
likely to
be
accessed
or
read
by,
the
public
of
Hong
Kong
(except
if
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to
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so
under
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laws
of
Hong
Kong)
other
than with
respect
to
New
Shares
that
are
or
are
intended
to
be
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of
only
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outside
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Kong
or
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(as
defined
in
the
SFO
and
any
rules
made
under
that
ordinance).
No
person
allobed
New
Shares
may
sell,
or
offer
to
sell, such
securi/es
in
circumstances
that
amount
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If
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This
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Commission
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The
New
Shares
may
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be
offered
or
sold
in
Malaysia
except pursuant
to,
and
to
persons
prescribed
under,
Part
I
of
Schedule
6
of
the
Malaysian
Capital
Markets
and
Services
Act.

66

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and
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Monetary
Authority
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Accordingly,
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or
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nor
may
the
New
Shares
be offered
or
sold,
or
be
made
the
subject
of
an
invita/on
for
subscrip/on
or
purchase,
whether
directly
or
indirectly,
to
persons
in
Singapore except
pursuant
to
and
in
accordance
with
exemp/ons
in
Subdivision
(4)
Division
1,
Part
XIII
of
the
Securi/es
and
Futures
Act,
Chapter
289
of Singapore
(the
"SFA"),
or
as
otherwise
pursuant
to,
and
in
accordance
with
the
condi/ons
of
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other
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This
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Company’s
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(ii)
an
"ins/tu/onal
investor"
(as defined
in
the
SFA)
or
(iii)
a
"relevant
person"
(as
defined
in
sec/on
275(2)
of
the
SFA).
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event
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you
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Japan

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and
will
not
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registered
under
Ar/cle
4,
paragraph
1
of
the
Financial
Instruments
and
Exchange
Law
of
Japan (Law
No.
25
of
1948),
as
amended
(the
"FIEL")
pursuant
to
an
exemp/on
from
the
registra/on
requirements
applicable
to
a
private
placement of
securi/es
to
Qualified
Ins/tu/onal
Investors
(as
defined
in
and
in
accordance
with
Ar/cle
2,
paragraph
3
of
the
FIEL
and
the
regula/ons promulgated
thereunder).
Accordingly,
the
New
Shares
may
not
be
offered
or
sold,
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indirectly,
in
Japan
or
to,
or
for
the
benefit
of,
any resident
of
Japan
other
than
Qualified
Ins/tu/onal
Investors.
Any
Qualified
Ins/tu/onal
Investor
who
acquires
New
Shares
may
not
resell
them to
any
person
in
Japan
that
is
not
a
Qualified
Ins/tu/onal
Investor,
and
acquisi/on
by
any
such
person
of
New
Shares
is
condi/onal
upon
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of
an
agreement
to
that
effect.

67