Seeka provides analyst briefing pack

Analyst Briefing

Interim Report – 30 June 2018

2
Group financial summary
June 2017

6 months
Unaudited
Dec 2017

12 months
Audited
June 2018

6 months
Unaudited
Turnover
$148.9m $217.9m $154.9m
Revenue
$134.0m $186.8m $145.4m
EBITDA
$21.9m $23.1m $23.5m
NPBT
$15.8m $9.9m $15.1m
NPAT
$11.1m $5.8m $10.4m
Seeka’s business is seasonal meaning the company is more profitable in the
first six months of the financial year
Unaudited financial results

3
Key points to June 2018
New Zealand kiwifruit volumes increased to 31.1m trays up by 21% on pcp
Further impairment of the banana business of $1.5m
Dry growing conditions in Australia impacted on kiwifruit yields down 13% on pcp
Record avocado returns in 2017/18 harvest. $40.81 per tray to growers compares to
$24.85 pcp
Successful acquisition and integration of T&G Northland business
Subsequent sale process of the acquired Northland orchards underway in second
half
Continuing investment in Seeka Australia’s orchard development with increased
volumes to commence from (2021)

4
Guidance for 2018 full year results
$21.9m
December 2017December 2018
$5.8m
December 2017December 2018
NPAT
EBITDA
Full year EBITDA expected to be up by between 4% and 8% on pcp of $23.1m
[range is between $24.0m and $25.0m]
Full year NPAT earnings expected to be up by between 12% and 24% on pcp of
$5.83m [range is $6.5m and $7.2m]
Forecast range
$24.0 ~ $25.0m
Forecast range
$6.5m ~ $7.2m

5
Earnings, net debt and net asset backing
June 2017

6 months
Unaudited
Dec 2017

12 months
Audited
June 2018

6 months
Unaudited
Basic earnings per share
$0.69 $0.35¹ $0.61²
Net debt
$94.5m $83.1m $116.0m
Total assets
$238.1m $222.0m $281.7m
Net tangible assets per
share
$6.03 $5.18 $6.61

1.A prior period deferred tax adjustment of $1m was expensed in FY17. This had the effect of reducing EPS by $0.06. Impairments less revaluation gains resulted in a further $0.03
reduction. Had these not occurred EPS would have been $0.44.
2.Further impairment and accelerated amortisation of the goodwill and supplier contract of the tropical retail business has reduced EPS by $0.09. Had this not occurred EPS would be $0.70.
Net debt $116m, increase of 23% on pcp – primarily driven by Northland
acquisition
61 cents basic earnings per share
Dividend of $0.12 fully imputed to be paid 21 September 2018, based on those
shareholders on the register at 5pm on 14 September 2018

6
Seeka kiwifruit volumes increase by 21% on pcp
52% of inventory loaded out from Seeka coolstores to market compared to 63%
to June 2017

New Zealand kiwifruit volumes rebound
25.6m 25.6m
63%
100%
June 2017December 2017
Kiwifruit volumes (trays)Percent loaded out
$21.9m
$23.1m
$23.5m
Forecast
$24.0m ~
$25.0m
31.1m 31.1m
52%
100%
June 2018December 2018
Kiwifruit volumes (trays)Percent loaded out
EBITDA
EBITDA

7
Northland acquisition
Post-harvest business
Six hectare site with extensive packhouse, coolstore, fruit handling facility for kiwifruit,
avocados, citrus and berries
Purchase included 253,000 Zespri shares [$2.01m]
At 30 June Seeka had paid $8.6m for post-harvest business
Related orchards
Six orchards of approximately 120.4 hectares, with 77.9 canopy hectares in kiwifruit
At 30 June Seeka had paid $9.0m for orchards with clear title. The remaining $22.6m will
be paid when titles to the remaining orchards become available
Seeka has secured additional SunGold licences for these orchards [$5.7m] and placed
them for sale with a conditional long term supply commitment


Purchased and integrated Kerikeri post-harvest business and related orchards from
Turners & Growers Horticulture Limited

8
Seeka Australia
Division
Post Harvest
Division
$4.3m
$21.5m
$0.9m
$2.7m
EBITDA by operating division
Orchard Division, New Zealand
The servicing and growing of kiwifruit, kiwiberry and
avocados through managed, leased and long term
leased arrangements

Post Harvest Division, New Zealand
Coordinates the harvest, packing, storage and
distribution of kiwifruit, avocados, and kiwiberry to the
market

Retail Services Division, New Zealand
The supply of produce to New Zealand customers,
exports, and the Delicious Nutritious Food Company
business

Seeka Australia Division
Owns and operates kiwifruit, nashi and pear orchards,
along with packing and logistics, and marketing.
Orchard Division
Retail Services
Division
1. Excludes ($5.9m) EBITDA for the administration and grower services overheads.
EBITDA of $29.4m to 30 June 2018¹
(2017: $27.6m)

9
Orchard Division, New Zealand
Millions of trays
June
2017
Dec
2017
June
2018
Hayward (Green) 5.9 5.9 7.3
Zespri SunGold 2.6 2.6 3.1
Total 8.5 8.5 10.4
2014201520162017June 2018
HaywardSunGold
New Zealand kiwifruit grown

Millions of class 1 trays


$4.3m EBITDA
▪26% decrease on pcp
▪Reflects reduction in long term
leases, Seeka has invested in this
area and volumes expected to
increase in next three years
Grew 10.4m trays of kiwifruit
(37.4m kilograms)
Grew 200,000 kilograms of
avocados
Grew 15,000 kilograms of
kiwiberry
8.5
11.2
9.2
7.2
10.4
Revenue
/turnover
$36.8m $48.6m $39.0m
EBITDA $5.8m $6.4m $4.3m

10
Post-Harvest Division, New Zealand
21.4
27.8
32.4
25.6
31.1
2014201520162017¹June 2018
New Zealand kiwifruit trays
Millions of class 1 trays



$21.5m EBITDA
▪26% increase on pcp
▪Reflects rebound in Hayward
yields and SunGold orchards
coming into production
31.1m trays processed
▪21% increase
Seeka Kerikeri (post harvest
business and related
orchards purchased from
T&G) integrated successfully
bringing new facility and
crops

1.Kiwifruit volumes decreased in 2017 by 21% PCP following an industry wide drop in Hayward (Green) yields
2.The percentage of kiwifruit loaded out of Seeka’s coolstores and on which it has charged coolstorage fees
¹
Millions of trays
June
2017
Dec
2017
June
2018
Hayward (Green) 16.5 16.6 20.1
Zespri SunGold 9.0 9.0 11.0
Total 25.5 25.6 31.1
Percent loaded out
2
63% 100% 52%
Revenue
/turnover
$74.4m $96.7m $88.6m
EBITDA $17.1m $22.0m $21.5m

11
Retail Services Division, New Zealand
$0.9m EBITDA
▪31% decrease on pcp
▪Reflects continuing slowdown in
the tropical business and lower
avocado sales volumes due to
biannual bearing nature of crop
Further impairment of the
banana business $1.5m
Strong avocado market, returns
of $40.81 per tray for growers
Delicious Nutritious Food
Company EBITDA $0.4m
(2017: $0.2m)

June
2017
Dec
2017
June
2018
Turnover $25.8m $54.2m $15.8m
Revenue $10.9m $24.3m $6.4m
EBITDA $1.3m $2.9m $0.9m

12
Seeka Australia Division
$2.7m EBITDA
▪21% decrease on pcp
▪Reflects lower kiwifruit yields
due to hot, dry summer. New
development to raise
production significantly from
2021
Developing organic kiwifruit
orchard and introducing new
hybrid pear varieties
Major investment and growth
plan, forecasted EBITDA
growth from 2021

Class 1 and 2
June
2017
Dec
2017
June
2018
Kiwifruit 2,990,826
(826,195
trays)
2,981,834
(823,711
trays)
2,593,550
(720,431
trays)
Nashi 1,172,163 1,200,786 1,623,199
Packham 854,000 853,600 1,153,994
Corella 423,788 553,592 453,443
Other pears 83,421 83,421 258,382
Plums 25,605 40,150 -
Revenue
/turnover
$11.8m $16.5m $11.8m
EBITDA $3.4m $2.3m $2.7m