Seeka provides analyst briefing

Financial Results FY17

Published February 2018

2
Key points for 2017
A seasonal reduction in New Zealand kiwifruit volumes handled by Seeka by 21%
compared to 2016, Hayward (Green) reduced by 33%, had the potential to significantly
impact earnings
Operational initiatives and innovation put in place mitigated the effect of lower volume.
Improved earnings were achieved in Australia, avocados, orcharding and the Delicious
Nutritious Food Company
In addition, active measures to save costs resulted in improved earnings
Deferred tax correction resulted in a larger than normal tax provision in earnings of $1m
Supply change of a key customer led to Seeka impair banana business by $2.031m
Seeka is providing positive guidance for FY18 NPAT up 5-10%
Dividend of 12 cents per share to be paid 23 March 2018 declared

3
Audited financial results FY2017
Financial summary
2017
$m
2016
$m
Turnover¹ 217.9 229.4
Revenue 186.8 191.3
EBITDA² 23.1 24.8
Net profit before tax 9.9 13.6
Net profit after tax 5.8 10.4
142.1
191.3
186.8
201520162017
Turnover & revenue

NZ$m


13.9
23.2
23.1
201520162017
EBITDA

NZ$m


24.8
1. Turnover is revenue plus the value of sales Seeka makes as an agent.
2. EBITDA is earnings before interest, tax, depreciation, amortisation, impairments and revaluations.
187.7
229.4
217.9
2016 EBITDA includes insurance proceeds of $4.1m
(2017:$0.125m) and gain on sale of investments $0.4m and cost of
grower shareholder scheme at $2.9m. Adjusted EBITDA is $23.2m

4
35 cents Earnings Per Share
Earnings, net debt and net asset backing
2017 2016
Earnings per share (cents) 35 (44) 65 (47)
Net debt ($m) 83.1 72.8
Total assets ($m) 222.0 197.3
Net asset backing per share ($) 5.63 4.89
29
47
35
201520162017
Earnings per share

Cents


65
2016 Normalised EPS excludes
receipt of $3.6m insurance
proceeds which after tax reduces
EPS from $0.65 to $0.47.

2017 a prior period deferred tax adjustment of $1m was expensed.
This had the effect of reducing EPS by $0.06 per share and would
have resulted in $0.41 EPS. Impairments less revaluation gains
resulted in a further $0.3 reduction and would have made EPS
$0.44

5
Lower kiwifruit volumes across the industry, total kiwifruit down by 21% on the
previous year and Hayward (Green) down by 33%
Revenue, EBITDA and packed kiwifruit volumes
19.6m
21.4m
27.8m
32.4m
25.5m
20132014201520162017
Revenue
Total kiwifruit
trays packed
$97m
$116m
$142m
$191m
$187m
21% decrease in kiwifruit volumes
offset by:
•Seeka Australia
•Avocados
•Delicious Nutritious Food
Company
2% decrease in revenue
$9.9m
$11.5m
$13.9m
$24.7m
$23.1m
EBITDA
6% decrease in EBITDA

6
Net profit after tax and earnings per share
$0.16
$0.22
$0.29
$0.65
$0.35
Earnings
per share
Net profit
after tax
$2.3m
$3.2m
$4.3m
$10.4m
$5.8m
20132014201520162017
2016 Normalised EPS excluding insurance settlement
$0.47
A prior period deferred tax
adjustment of $1m was
expensed in 2017. This had
the effect of reducing EPS by
$0.06 per share and would
have resulted in $0.41 EPS.
Impairments less revaluation
gains resulted in a further $0.3
reduction and would have
made EPS $0.44

7
Expanding infrastructure to support growth
Capital expenditure
1.6
5.6
16.4
40.9
20.9
20132014201520162017
Capital expenditure

$m


$20.9m capex in FY2017
Expenditure largely
completed in 2016/17
▪New Zealand capital projects
include:
>Packing machine
>Coolstore capacity
▪Ongoing development in
Australia

8
Operating segments’ performance

9
Volume and market returns
New Zealand Orchard Division
Millions of trays
2017 2016
Hayward (Green) 5.9 8.9
Zespri SunGold 2.6 2.3
Total 8.5 11.2
20132014201520162017
HaywardSunGold
New Zealand kiwifruit grown

Millions of class 1 trays


$6.4m EBITDA
▪Up 14% on PCP
Kiwifruit volumes decreased
in line with industry wide
drop in yields
Grew 8.45m trays kiwifruit
(30.7m kilograms)
Grew 98,356 trays avocado
(0.54m kilograms)

8.5
11.2
9.2
7.2
6.9
Turnover/ revenue ($m) 48.6 47.9
EBITDA ($m) 6.4 5.6
Growing kiwifruit, avocado and kiwiberry
•Operates over 220 orchards via management, lease
and long term lease contracts

10
Volume and profit
New Zealand Post Harvest Division
Millions of trays
2017 2016
Hayward (Green) 16.6 25.0
Zespri SunGold 9.0 7.4
Total 25.5 32.4
19.6
21.4
27.8
32.4
25.5
20132014201520162017
Class 1 & 2 kiwifruit trays

Millions


$22m EBITDA
▪Down 18% on PCP
25.5m trays processed
▪Down 21%
Fruit loss the best in
Seeka’s history
▪1.18% Hayward (Green)
conventional
▪0.42% for Hayward (Green)
organic
▪0.73% for Zespri SunGold
Innovation in management
and procurement has yielded
positive results

Turnover/ revenue ($m) 96.7 110.8
EBITDA ($m) 22.0 26.8
Processing service to harvest, pack, coolstore
and supply kiwifruit, avocado and kiwiberry
•Processes fruit from over 700 orchards including
Seeka’s managed orchards and independent growers

11
New Zealand Retail Services Division
2017
($m)
2016
($m)
Turnover 54.2 53.7
Revenue 24.3 16.8
EBITDA 2.9 1.9
$2.9m EBITDA
▪Up 53% on PCP
Seeka benefits from strong
avocado market. Returns to
growers forecast an excess of
$40 per tray
Delicious Nutritious Food
Company had partial first year
EBITDA totalling $0.29m
Supply change of a key
customer led Seeka to impair
banana business by $2.03m

Markets produce from Group operations
plus imports and processes tropical fruits
•Sell avocados under Seeka brand
•Market kiwifruit in Australasia and work in
collaboration with Zespri to market kiwifruit in Asia
•Import and ripen bananas and other tropical fruits
•Operate a wholesale fruit and vegetable market
•Delicious Nutritious Food Company manufacture
and market Kiwi Crush products, avocado oil and
packing and distributing kiwiberry

12
Integrated orchard to market
Seeka Australia Division
2017 2016
Kiwifruit (tonnes) 2,982 2,375
Nashi pears (tonnes) 1,201 1,523
Packham pears (tonnes) 854 996
Other (tonnes) 727 884
$2.3m EBITDA
▪Up 130% on PCP
Kiwifruit harvest yields and
quality improved on
previous year
Nashi volumes down with
seasonal fluctuation
Expanding kiwifruit orchards
▪Infill planting of existing
orchards
▪63ha development of new
orchards

The largest grower and supplier of
Australian kiwifruit and nashi pears
•Own nine large orchards, packs, markets and
distributes the produce throughout Australia
•Grow kiwifruit and nashi, as well as european
pears, apricots, plums and cherries
Revenue ($m) 16.5 15.2
EBITDA ($m) 2.3 1.0

13
Share performance

14
Dividend announcement
12 cents per share to be paid 23 March 2018
12 cents per share
▪Fully imputed
▪Payment date: 23 March
▪Record date: 16 March
Dividend reinvestment plan
applies
22 cents per share fully
imputed dividend paid in the
last 12 months

8 8
9
10 10 10 10
12
Nov 14Mar 15Sep 15Mar 16Sep 16Mar 17Sep 17Mar 18
Cents per share

15
Share price
69% shareholder return over two years
Feb 16Apr 16Jun 16Aug 16Oct 16Dec 16Feb 17Apr 17Jun 17Aug 17Oct 17Dec 17
Feb 18
$3.75
$5.95
Feb 16
10c 10c 10c
10c
$2.20 lift in price
40 cents paid in dividends