WINGARA AG LTD — Interim / Quarterly Report 2021

Jul 26, 2020

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Q1 FY21 Presentation “Strong growth in quarter cash receipts, up 31% to over $10m”

We efficiently connect primary producers to the global market through our protein supply chain platform

Gavin Xing, Chief Executive Officer 27 July 2020

Unlocking value in the protein supply chain | Page 1

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Strong increase in Q1 cash receipts supports growth investment

• Q1 FY21 cash receipts reached $10.02m, up 31.3% up vs Q1 FY20

• Revenue growth is on comparable momentum and reached $20m+ for the 6-months ending 30 June 2020

• Operating net cash outflow for the quarter of $(0.02)m is a direct result of inventory build-up to meet our committed sales in FY21

• JC Tanloden continues to benefit from the Raywood facility with output up 45% to 12KT (vs Q1FY20).

• JC Tanloden’s output is expected to continue in Q2 FY21 before the new harvest season in Q3 and Q4, where we are expecting a stronger harvest season based on current rainfall in Victoria

• Austco Polar Cold Storage has seen a drop in blast volume by 16% to 410K (vs Q1FY20) due to the global economic impact of COVID-19 as well as re-stocking of lamb/cattle post the draught, but we are expecting a good season ahead in Victoria

• Appointment of David Christie as a Non-executive Director, and resignation of Mark Hardgrave

We have clear visibility on several exciting opportunities to enhance Wingara AG’s organic growth trajectory and leverage the agricultural infrastructure platform we have built.

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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

• ❖ Tolling 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

Business Model: Value-add and logistic services for red meat export including blast freezing and cold storage

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Assets: Two sites; Epsom & Raywood, Victoria providing a combined 110,000 MT processing capability and 30,000 MT storage capacity

Assets: Laverton, VIC across 1 Hectare. Blast freezing throughput of 45,000 packs per week plus storage capacity of 10,000 standard size pallets

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Markets: China, Taiwan, Japan and Korea (Key clients include Yili, MengNiu, Fonterra, Bright Holstein, Zenoh, Kanematsu)

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

Austco Polar Revenue FY20: $13.3m FY19: $12.4m

JC Tanloden Revenue FY20: $21.7m FY19: $16.8m

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Revenue run-rate growing to $40m p.a.

• Wingara’s diversified asset investment model produced a solid Q1 FY21 result

• Amid COVID-19 challenges, current revenue run rate of $40m p.a. is built on a base revenue of $10.7m from just over 2 years ago in FY18

• Asset base of over $50m with less than $5m core debt reflects company’s disciplined capital management

• Brown-field improvement at Epsom and greenfield development at Raywood positioned JCT as the largest Victorian fodder exporter in terms of capacity

• Return from Austco Polar is over 100% based on the last raising and profit has been reinvested into the business

Quarter end Financial Period	Jun-19 Sep-19 Dec-19 Mar-20 Annual Total Jun-20 Q1 FY20 Q1 FY20 Q3 FY20 Q4 FY20 FY 2020 Q1 FY20
Receipts from customers ($m) Net Cash From Operating Activities ($m) JCT fodder throughput (MT) JCT fodder inventory (MT) Austco Blast freezing cartons	7.63 8.13 9.34 10.58 35.68 10.02 1.93 1.09 -1.13 -0.32 1.58 -0.02 8,175 9,125 10,449 14,279 42,028 11,839 8,981 2,434 18,515 15,777 16,278 488,852 412,492 712,118 515,510 2,130,972 409,647

• YoY quarterly revenue growth, and the redeployment of profits from the sale and lease back of Austco Polar, allowed hay inventory volume to increase 81% (vs Q1 FY20) to meet demand

• Business planning and hay accumulation contracting for next harvest season (October to February) is well underway with the objective to improve capacity utilisation from the current 50% to 70-75% based on 110,000 MT processing capacity

• Victoria is showing positive signs of a strong lamb season post re-stocking and we are working with key clients to plan for the coming season

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Q1 FY21 performance

• Focus for Q1 FY21 was consistency as well as re-stocking of inventory anticipating potential COVID-19 related logistic interruptions

• JC Tanloden’s output was slightly affected by changing / delay in ship liners’ scheduling due to COVID-19

• Overall export demand is solid, with China in particular showing signs of recovery post its economy re-opening after COVID-19

• Historically, Q1 ending June for Austco Polar sees less volume from the peak in Q3 due to the slowdown in lamb exports. Nonetheless, volume was affected by COVID-19 in key global markets

• With the closure of various processing facilities in Victoria due to COVID-19, Q2 FY21 is expected to have similar blast volumes

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20,000
15,000 11,839
10,000
5,000
0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
FY19 FY20 FY21
FY 2019: 46,268 MT FY 2020: 42,028 MT
800,000
700,000
600,000
409,647
500,000
400,000
300,000
200,000
100,000
-
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
FY19 FY20 FY21
FY 2019: 1,836,364 FY 2020: 2,130,972
HAY (TONNES)
Blast Cartons
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Driving growth amid COVID-19

• Q1 FY21 continues the momentum from Q4FY 20 with customer receipts were up 31.3% to $10.02m (Q1 FY2020: $7.63m)

• Growing cash receipts used for debt reduction and investment in restocking inventory to maintain revenue growth

• Disciplined investment approach from management delivered a solid infrastructure platform in protein supply chain

• A balanced AUD and USD cashflow profile to mitigate earning impact

• Business interruptions were caused through the slowdown at ports, reduction in scheduled services by shipping lines and impact to our export clients at Austco Polar

• Connectivity with offshore clients are strong despite travel restrictions

• No Government support related to COVID-19 (such as JobKeeper) has been relied upon with proactive risk management procedures have been implemented to minimise disruption to WNR since late Feb 2020

• Substantial output capacity at JC Tanloden to be capitalised to drive further revenue increase based on offshore demand

• Austco Polar’s asset base is ready be tapped into for the global protein trading platform

Overall business is benefitting from management’s commitment to develop a diversified customer base amid the current COVID-19 pandemic. Trading activities are largely expected to continue as normal, absent any unanticipated external shocks.

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Strategy and market potential

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WNR’s strategy

Wingara is well positioned to capitalise on expected increased customer demand over the next 5 years

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01 Continue to expand JC Tanloden

02 Improve Austco operations

03 Capitalise opportunities on our platform

04

Strategic focus

• Acquisition and expansion of Epsom and construction of Raywood Phase I delivered 110K MT production capacity

• Target is to double our throughput capacity to 250K MT

• Revenue to reach $80 million p.a.

• Blast freezing and logistic throughput to 70,000t p.a. (~10,300 cartons per day) with accreditation for export to EU, US, China, Japan and is Halal certified (currently 60,000t p.a. ~40K cartons per week)

• Build on longstanding relationships with key customers to increase volumes and earnings

• Innovation and cost management to drive efficiencies

• Leverage strong logistics, trading and exporting capabilities and expand product range for marketing and sales through the protein supply chain

• Capitalise on our growing network of primary producer network for future expansion

• Technology and provenance will differentiate our commercial offering

• Continue to pursue strategic acquisitions with a focus on protein supply chain

• Objective is to establish an unique investment platform with a diversified revenue stream

• Develop technological capability associated with food supply security and provenance

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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

For Primary Producers

Connects primary producers with valuable high demand export markets

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1 2 3
Process raw Logistics to move Provide insights
materials to products worldwide and services for
products in demand partners
for export markets
Risk management framework
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For Customers

Receives in-demand quality assured, Australian products

• 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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WNR’s markets

JC Tanloden and Austco Polar form key parts of the Australian agriculture industry’s supply chain and export capabilities for protein and fodder products – both which have grown significantly over the past 5 years

Australian Protein Exports

• Export markets for proteins & fodder : $13 billion annually (from $9 billion 5 years ago)

• Oaten hay demand from China: 1.5 – 2 million MT per annum (accelerating in the past 5 years and cannot be met in Australia alone)

• Australia’s brand strength has increased share of production for fodder: Product traceability, quality and lack of contamination underpin the favourable reputation of Australian agricultural exports leading to major export expansion.

• Oaten hay is a desirable export product: Australian producers primarily export oaten hay, which improves milk production. Oaten hay has high demand worldwide as a reliable, high quality fodder that meets stringent animal production requirements.

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06 07 08 09 10 11 12 13 14 15 16 17 18 19 20F
Year ending June 30 2019
Total Protein Beef & Veal Lamb Fish Other Seafood
A$ billion
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• Wingara advantage: Under the Free Trade Agreement with China, only oaten hay from Australia is allowed to be imported

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FARMING TRANSPORT DISTRIBUTION EXPORT
GRADING PROCESSING
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Oaten Hay Export Demand

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1400
1200
1000
800
600
400
200
0
Rest of Asia China Australian Production
‘000 Tonnes
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Source: Company websites, WNR management estimates, Australian Fodder Industry Association

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JC Tanloden – services and key markets

• Original business was one of the first fodder exporter form Victoria with a 30 years history

• We purchase, process and transport our high quality produce to our domestic and global customers

• Revenue is generated via a tolling model where fees charged are dependent on the grade of the hay. Typically consistent in terms of margin which is based on a cost-plus structure.

Services Provided

• Hay Processing Logistics

• Accumulation

• • • Supply sourced Quality control • Domestic and from more than testing on new hay interstate markets

• 2,000 farmers over deliveries 100,000km[2 ] • • Offshore freight Compress bales to

• throughout Victoria to key markets reduce size by including China,

• • Purchase typically 50% Taiwan, South

• occur during • Repackaging and Korea and Japan

• November – fumigation

• January • Current

• • Current storage processing

• capacity of capacity of

• 30,000 MT 110,000t per

• • Storage capability annum of up to 3 years

Wingara’s major export destinations

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• Japan • Dairy herd size: ~ 1.4 million

• South Korea • Diary herd size: ~ 450,000

• Taiwan • Dairy herd size: ~ 62,000

• China

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• Dairy herd size: ~ 6 million

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Austco Polar – services and key markets

Established in 1987, Austco Polar Cold Storage owns and operates a cold storage facility which specialises in temperature controlled facilities, blast freezing, storage and distribution for domestic and international clients. Key clients account for over 30% of VIC meat production

Services Provided

Storage & Handling

Tenancy

Blast Freezing

• Receive containers • Blast freeze and store products

• Chillers and freezers occupied by various food suppliers on long term contracts

• product; extends

• • Complete exporters shelf life from 12 documentation and weeks to up to 3 product selection years

• Load domestic and • Process capacity of • Average tenure of export containers 40K cartons per clients of 5 years with frozen product week

Revenue Model

• Service oriented to • Tolling based on cover fixed costs volume to key exporters

• Rent revenue charged monthly based on freezer space

• •

• Underpinned by export Cost plus arrangement demand and blast • Seeing steady growth in

• freezing demand

• Mitigates revenue profile and meets fixed cost in winter periods

Australian Protein Exports

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06 07 08 09 10 11 12 13 14 15 16 17 18 19 20F
Year
Total Protein Beef & Veal Lamb Fish Other Seafood
Source: Meat & Livestock Australia
A$ Billions
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• FY19 Revenue: 25% • FY19 Revenue: 55%

• FY19 Revenue: 20%

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

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