WINGARA AG LTD — Annual Report 2021

May 27, 2021

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FY21 Full Year Results Presentation David Christie (Chair) & Zane Banson (Interim CEO)

Investor briefing | May 2021

“Well placed for growth”

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Disclaimer

This presentation has been prepared by Wingara for professional investors. The information contained in this presentation is for information purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. The presentation has been prepared without taking into account the investment objectives, financial situation or particular need of any particular person.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in the presentation. To the maximum extent permitted by law, none of Wingara, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault. In particular, no representation or warranty, express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies.

Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. Past performance is no guarantee of future performance.

The distribution of this document in jurisdictions outside Australia may be restricted by law. Any recipient of this document outside Australia must seek advice on and observe such restrictions.

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Agenda

FY21 Overview 4 - 5 FY21 Financial results 6 - 13 Outlook & strategy 14 - 19 Appendix 20 - 23

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FY21 Growth during challenging external & internal conditions

A year of challenges…

… and transformation

Well placed for growth

JC Tanloden

• Reduction in scheduled services by shipping lines raising logistic costs

• Depreciation of the US dollar impacting revenue growth

• Hay supply contracts and harvest season were unfavourable leading to lower quality hay at abovemarket prices

Austco Polar Cold Storage (APCS)

• Weakening global export demand along with shipping delays impacting our customers

• Independent Chair and Board appointed and committed to instilling robust corporate governance and oversight across the business

• Complete review of roles and responsibilities lead to a corporate restructure

• Change management and increased transparency already seeing results:

• Record production in Q4 for JCT

• Annualised savings of $1m executed for FY22

• Change in strategic focus - back to core

• James Whiteside appointed as CEO to a refreshed and motivated Executive Team

• Strong export demand expected to continue into FY22

• Upcoming harvest season looking optimistic

• Deliver further cost reduction through process improvement

• Continued investment in engineers and maintenance to reduce asset downtime and increase production

Corporate

• Lack of transparency saw the loss of key customers across both segments increasing debt recoverability risk (fully provided for)

• Complete business asset and corporate strategy review undertaken

• Continue to build strong and long-term relationships with growers and export customers

• Access to debt and capital markets for organic and nonorganic scale

• Project review and change in priorities lead to impaired capital projects

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Our commitment to our employees

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Corporate governance and oversight

Independent Chair and Board appointed and committed to instilling robust corporate governance and oversight across the business to ensure operational health & safety, wellbeing & welfare of employees, compliance and timely reporting.

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Wellbeing & welfare

Compliance & reporting

Operational health & safety

• Employee Assistance Program • available to all employees •

• • Policies have been developed to ensure all our employees have equal access to training, • recruitment and promotions based on their skills, experience and competence.

• Establishment of Group risk matrix Periodic inhouse / external reviews • undertaken to ensure facilities are • compliant

Established Group OH&S Policy Controls implemented for all machinery Mandatory supply of PPE, training and Tool Box Talks Measure, monitor and prevent environmental risks

Enhanced periodic reporting on injuries and incidents enabling preventative action to be taken

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FY21 Financial results Zane Banson, Interim CEO

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FY21 Wingara headlines

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$38.0m 44.8%
Revenue
Gross margin
+8% YOY
-1.6pp YOY
65.6k 12.2k MT
Production Inventory on
tonnes hand
+56% YOY -23% YOY
$2.5m
1.7m
Underlying
Blast cartons
EBITDA
-21% YOY
-25% YOY
$13.0m
$6.0m
Net tangible
Net debt
assets
+52% YOY
-11% YOY
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Key comments (vFY20):

• Revenue up $3.0m (or 8%), resilient despite challenging market conditions

• Underlying EBITDA down by 25% at $2.5m. A challenging year for Austco Polar Cold Storage and higher operating costs for JCT

• Record JCT Tanloden annual production volumes , particularly in Q4 FY21, reaching 65.6kMT

• Blast carton volumes were 1.7m, down 21% reflective of unfavourable macro economic environment

• Inventory on hand is 12.2MT (down 23%), rightsized following a review of inventory management strategy underpinned by working capital restrictions

• Net debt (excluding finance leases) $5.9m, with borrowings to net asset ratio at 0.5 (+0.1pp)7

• _**_ Blast cartons refers to meat cartons for the Austco Polar Cold Storage business**

_*_ Production tonnes refers to hay production for the JC Tanloden business**

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Historical underlying results

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Revenue ($'000)
10,368
13,348
12,362
APCS
JCT 27,641
- 21,710
- 16,758
10,763
8,687
2017 2018 2019 2020 2021
EBITDA ($'000)
3,355
1,901
1,663
Corporate
APCS
JCT - 1,089- 2,710 3,119 2,976
606
2017 2018 2019 2020 2021
(1,313)
(1,733)
(2,164)
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Revenue

• Strong YoY revenue growth for JCT despite challenges faced in FY21

• Consolidated CAGR since the acquisition of APCS is 14.2%; JCT increasing by 28.4%; offset partially by APCS decreasing by 8.4%

• Consolidated CAGR since 2017 is 44.6% including the acquisition of APCS in 2019

EBITDA

• CAGR for JCT is 48.9% since 2017, whilst for APCS is -29.6% since acquisition date

• APCS strategic review underway for best asset utilisation

• $1m of annualised corporate overhead savings expected in FY22 8

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Operations resilient despite COVID-19

Income statement - Underlying	FY21	**FY20 **	Change
($'000) Revenue	38,009	35,058	+8%
Gross profit GP Margin Other income	17,036 45% 680	16,271 46% 185	+5% +268%
Operating and overhead costs EBITDA EBITDA margin	(15,241) 2,475 7%	(13,169) 3,287 9%	+16% -25%
Depreciation and amortisation Project and transaction expenses EBIT	(2,899) 59 (365)	(2,467) (2,144) (1,324)	+18% -103% -72%
Finance costs Income tax expense NPAT	(2,576) (229) (3,170)	(2,021) (107) (3,452)	+27% +114% -8%
Reported EBITDA*	1,149	3,287	-65%
Reported EBIT*	(3,428)	2,915	-218%
Reported NPAT*	(6,233)	787	n.m

*A reconciliation of underlying to reported results is provided in the appendices

Wingara Group summary:

• Revenue up $3.0 to $38.0m, in line with growth in cash receipts

• JC Tanloden production output up 56% to 65.6k MT per annum

• Austco Polar volumes resilient in challenging conditions

• Maintained underlying EBITDA profitability at $2.5m (FY20: $3.3m)

• Logistic costs high due to globally reduced scheduled shipping services

• Underlying EBIT loss of $0.4m (FY20: $1.3m loss)

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JC Tanloden: Achieves 75% production capacity milestone

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Segment performance - Underlying FY21 FY20 Change
($'000)
Segment revenue 27,641 21,710 +27%
Segment EBITDA 2,976 3,119 -5%
Revenue EBITDA margin 11% 14%
+27% Depreciation, finance costs and transaction (2,059) (2,096) -2%
costs
-
Income tax expense 0 9 100%
NPAT 917 1,032 -11%
Production tonnes 65.6 42.0 +56%
Production
+56% Reported EBITDA 2,155 3,119 -31%
Reported NPAT (1,047) 1,032 n.m
Hay Production (MT)
Underlying 25,000 22,830
Segment
20,000
EBITDA 16,771
14,279 14,135
-5% 15,000
11,839
10,449
9,125
10,000 8,175
5,000
-
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY20 FY21
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• FY21 production was up 56% to 65.6kMT • Capacity utilisation surpassing 75% in Q4 FY21 target due to improved Total Preventive Maintenance (TPM) • Strong YOY revenue growth of 27% supported by 56% volume growth. • EBITDA margin down YoY by 3pp driven by increased logistic surcharges with reduced shipping services caused from COVID-19

• Overall demand remained strong, with key Asian economies continuing their recoveries post COVID19 and stable demand from China

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Austco Polar Cold Storage: strategic review underway

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Segment performance - Underlying FY21 FY20 Change
($'000)
Segment revenue 10,369 13,348 -22%
Segment EBITDA 1,663 1,901 -13%
Revenue
EBITDA margin 16% 14%
-22%
Depreciation, finance costs and transaction (3,452) (2,878) +20%
costs
-
Income tax expense 0 13 100%
NPAT (1,789) (964) +86%
Blast Blast cartons 1,674 2,131 -21%
cartons Reported EBITDA 1,345 3,285 -59%
-21% Reported NPAT (2,466) (964) n.m
Blast throughput (thousand cartons)
800 712
Underlying 700
Segment 600 489 518
EBITDA 500 412 410 413 426 425
400
-13% 300
200
100
-
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
FY20 FY21
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• Business remains impacted by contractions in livestock markets and lower volume of slaughter rates over the past 18 months as a flow on from the drought and cattle restocking

• Blast carton volumes improved in H2 FY21 over H1 FY21, though not expected to be a precursor to recovery in FY22; overall down 21% YoY.

• Revenue has contracted by 22% in-line with blast carton volume performance.

• Management focus on cost control during non-peak periods

• Underlying EBITDA fell 13% to $1.7m.

• Board and management are currently reviewing optimal utilisation for the asset, in line with the strategic direction of Wingara

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Balance sheet

31 March 2021 Balance Sheet	FY21	FY20	Change
($'000)
Cash and cash equivalents	1,920	3,449	-44%
Trade and other receivables	3,458	2,548	+36%
Inventories	2,070	4,100	-50%
Other Total current assets Fixed assets (incl. ROU)	640 8,088 43,990	262 10,360 42,451	+144% -22% +4%
Intangibles	1,816	1,816	-0%
Deferred tax assets	0	403	-100%
Other assets Total non-current assets Total assets	137 45,943 54,031	288 44,958 55,318	-52% +2% -2%
Trade and other payables	6,618	6,156	+8%
Borrowings	5,606	966	+480%
Lease liabilities	1,538	1,423	+8%
Other Total current liabilities	677 14,439	968 9,513	-30% +52%
Borrowings Lease liabilities Other	2,266 22,369 100	6,402 22,875 87	-65% -2% +15%
Total non-current liabilities	24,735	29,364	-16%
Total liabilities	39,174	38,877	+1%
Net assets	14,857	16,442	-10%
Net debt (excluding leases)	5,952	3,919
Borrowings to net assets ratio	0.53	0.45

• Trade and other receivables increased to $3.5m reflective of revenue growth

• Inventories YoY decrease of 50% due to:

• Review of inventory valuation in a mark-tomarket reduction of $0.5m

• Right-sizing post inventory management review to optimise for working capital availability (shorter turnover cycles and higher volumes of production)

• Trade and other payables increased by 8% to support revenue growth

• Total borrowings of $7.9m (excluding leases and asset finance) with borrowings to net assets ratio at 0.5 (+0.05pp)

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Cash flow

31 March 2021 Cash flow statement ($'000)	FY21	FY20	Change
Receipts from customers	37,332	34,167	+9%
Payments to suppliers and employees	(36,530)	(30,634)	+19%
Grant income	505	0	+100%
Interest received	0	5	n.m
Finance costs and tax paid Net cash from operating activities Purchase of plant and equipment	(990) 317 (3,932)	(2,021) 1,517 (2,044)	-51% -79% +92%
Investment in security deposit Proceeds/payments from sale of fixed assets	(118) 33	0 21,033	+100% -100%
Net cash (used in)/from investing activities Proceeds from issuance of ordinary shares	(4,017) 4,723	18,989 0	-121% +100%
Net proceeds from borrowings	504	(15,751)	-103%
Repayment of lease liabilities Net cash (used in)/from financing activities	(3,055) 2,172	(1,397) (17,148)	+119% -113%
Net increase / (decrease) in cash Cash at beginning Cash at end	(1,528) 3,449 1,921	3,358 91 3,449	-146% n.m -44%

• Strong cash receipts from customers ending at $37.3m, up by 9% YoY

• Net cash from operating activities is $0.3m, down 79% YoY

• Total investment in plant and equipment is $3.9m, up by 92% YoY to drive higher production throughput

• Net cash used in financing activities include:

• A capital raise of $4.7m (net of transaction costs) in Aug-20

• Net proceeds from borrowings of $0.5m; and

• Lease repayments of $3.1m (up YoY due to AASB16 classification of operating leases)

• Cash as at 31 March 2021 is $1.9m, down from prior year by 44%

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Outlook & Strategy David Christie, Chair

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James Whiteside appointed as CEO, commences 1 July 2021

Completes Wingara’s executive management team

• 28 years’ agricultural sector experience, including 13 years in executive roles:

• CEO of AUSVEG – Australia’s major horticultural body

• Incitec Pivot – roles included Group COO and COO of Fertiliser business

• Strong understanding of agricultural value chains, including sourcing, logistics, price risk management, export market development and international trade

Excited for its market position and sustainable growth opportunity, James commented:

“Wingara has enormous opportunities to grow, and I am excited to be given the opportunity to lead the Company’s team to drive this growth. I’m looking forward to bringing my skills and experience to Wingara and working collaboratively with the Board to deliver on the Company’s potential, support Australian farmers, provide customers with high quality products, and grow long term shareholder value.”

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Interim CEO Zane Banson will be returning to his CFO role and is looking forward to collaborating with James going forward.

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JC Tanloden well placed in FY22 - high demand in large market opportunity

Current markets

• JC Tanloden has a strong market position in Taiwan and expects to maintain this going forward

South Korea

• Total Australian exports 107k MT*

• • Recent export growth of 10%**

• • WNR market share: 10%***

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• The company is well positioned in China

• There is scope to increase market share in all markets in FY22 and beyond

Japan

• Total Australian exports 278k MT*

• • Recent export growth of 14%**

• WNR market share: 2%***

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• Other export markets are currently being explored to support long term volume growth

China

Taiwan

• Total Australian exports 178k MT • Total Australian exports 51k MT

• • Recent export growth of 29% • Recent export growth of 33%

• • WNR market share: 8% • WNR market share: 13%

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Source AFIA ABARES Hay Exports. Based on 6 months ended 30 June 2020 *Compared to previous 6 month period

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***Estimated based on 6 months ended 31 March 2021

FY22 outlook

01 Return to core: change in strategic focus to Hay exports

• Expect to carry strong volume run-rates into FY22 at improved level of efficiency with export market demand expected to continue to exceed supply

• Focus on relationships both with growers and customers

• Market consolidation: continue to assess strategic acquisitions and expand geographical access

• Looking at new export market entries and the addition of other fodder products

02 Strategic review for APCS, cold storage segment

• Challenging industry conditions not expected to abate in the near term

• Business as is – focus on:

• Expand customer base

• New revenue streams

• Optimise revenue mix and increase toll services

• Manage to break-even to minimise cash burn

• Strategic review of business going forward

03 Build trust and maximise returns for shareholders

• $1m annualised cost savings achieved in Q4 FY21 – full year effect in FY22

Implementation of Lean Program across all business segments; full review to minimise waste and improve cost effectiveness

• Streamline operational processes

• Optimise labour force

• Improve domestic gross margins

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Appendix

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Reconciliation: Reported to Underlying results

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Mark-to-
market Impairment
Reported Bad debts Forfeiture of Transaction Disposal of Share-based inventory Restructure of capital Underlying
($'000) FY21 expense1 deposit2 costs3 fixed assets payments4 adjustment5 costs6 projects7 FY21
Revenue 38,009 38,009
Gross profit 16,375 661 17,036
Other income 680 680
Operating and overhead costs (15,906) 268 (99) 496 (15,241)
EBITDA 1,149 0 268 0 0 (99) 661 496 0 2,475
Net gain / (loss) on disposal of fixed assets (13) 13 0
Depreciation and amortisation (2,899) (2,899)
Impairment of receivables (978) 978 0
Project and transaction expenses (687) 250 496 59
EBIT (3,428) 978 268 250 13 (99) 661 496 496 (365)
Finance costs (2,576) (2,576)
Income tax expense (229) (229)
NPAT (6,233) 978 268 250 13 (99) 661 496 496 (3,170)
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NB: FY20 underlying results excludes disposal of fixed assets of $4,239 thousand

• 1Bad debts relate to an international customer

• 2Lost deposit as a result of rescinding Epsom (JCT) site purchase agreement

• 3Costs incurred pertaining to M&A activity

• 4Relates to write-back of forfeited share-based payments as part of restructure

• 5Adjusting the cost of inventory on hand as at 31 March 2021

• 6Review of roles and responsibilities lead to a corporate restructure

• 7Project review and change in priorities lead to impaired capital projects

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Enabling Australian agricultural products to reach end markets

WNR’s business model:

• Owns and manages critical export infrastructure assets within the protein supply chain

• Diversified revenue model based on throughput

• Capitalise on our global trading network

• Partnership with primary producers with a greater access to products for export

• Diversification through multi-products

WNR’s mission is to enable products to reach end consumers efficiently and securely, with provenance

WNR’s growth strategy is to build a supply chain platform based on acquisition and organic growth

The company has established two business divisions based on our growth strategy: Fodder (JC Tanloden) and Red Protein Export Service (Austco Polar)

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Business Model: Processor and marketer of fodder products including oaten, wheaten, barley, canola hay and straw Assets: Two sites; Epsom & Raywood, Victoria providing a combined 110,000 MT processing capability and 30,000 MT storage capacity

Markets: China, Taiwan, Japan and Korea

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Business Model: Value-add and logistic services for red meat export including blast freezing and cold storage Assets: Laverton, VIC across 1 Hectare. Blast freezing throughput of 45,000 packs per week plus storage capacity of 10,000 standard size pallets

Markets: Export accredited to key destinations including China, Japan, Korea, EU, USA, Middle East (including Halal certification)

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A diversified agricultural products platform

WNR has built a sustainable platform for processing and marketing agricultural products – more products can be added at the appropriate time

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1 2 3
For Primary
Producers Process raw Logistics to move Provide insights
Connect primary producers with materials to products worldwide and services for
valuable high demand export products in demand partners
markets for export markets
Risk management framework
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For Customers
Receive
in-demand quality assured,
Australian products
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• A highly scaleable model that unlocks value in Asian export markets

• Ability to capitalise on opportunities in the ‘protein supply chain’ that meet Asian demand characteristics which are driven by the need for increased ‘food security’

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JC Tanloden: 2021/22 harvest season looking optimistic

• After a difficult end to the last hay-growing season, signs are looking more positive for the 2022 harvest.

• Rainfall for Jun-21 to Aug-21 is forecasted to be above average for JCT key catchment areas with chance of exceeding median greater than 60%.

• Rainfall outlooks indicate probability of good crop growth and the opportunity to capitalise on a year of premiumquality hay with strong international demand.

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Image Source:
Australian Bureau of Meteorology
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Austco Polar Cold Storage: no signs of short-term recovery

• Australian red meat processing and export is where the majority of Austco Polar’s customers’ activity is concentrated. A combination of macroeconomic uncertainty across global markets, and the cyclical restocking of beef herds across the country have combined to dampen outlook at APCS.

• Total Australian beef exports have fallen 13% during April alone, with the Chinese market showing the greatest reduction of 38%. Mutton exports fell similarly, down 22% on March levels.

• Australian lamb proved most resilient, with only a 4% reduction on March levels, and tracking reasonably close to average at this stage.

• Given APCS’s role as a service provider, volume levels are significantly influenced by customer adaptability to current market conditions and product diversification.

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Image Source:

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We connect primary producers to the global market efficiently through our protein supply chain. wingaraag.com.au

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