Seeka Provides Stakeholder Update

Stakeholder Update

24 October 2018

2
Agenda
Chairman’s Introduction
Strategy
Chief Executive’s Update
Questions

3
Chairman’s Introduction
Agenda

Fred Hutchings

4
2018 YTD
Annual
Threshold
2017
Total Recordable Injury Frequency¹ 5.0 <4.6 5.8
Notifiable Injuries
0 0 0
Notifiable Incident
0 0 1
Severity Rate²
4.08 <3.0
Health & Safety
No notifiable incidents
Hand injury - Main Road
Foot injury - Oakside

1.Lost time and medical treatment injuries per 200,000 hrs worked
2.Number of days lost/number of lost time injuries
To end of September 2018
Building a health & safety culture
Statistics slightly high but comparable to the same time last year

5
Unaudited six month group financial results
June 2017

6 months
Unaudited
Dec 2017

12 months
Audited
June 2018

6 months
Unaudited
Variance

6 months
Unaudited
Turnover
$148.9m $217.9m $154.9m $6.0m
Revenue
$134.0m $186.8m $145.4m $11.4m
EBITDA
$21.9m $23.1m $23.5m $1.6m
NPBT
$15.8m
$9.9m $15.1m $0.7m
NPAT
$11.1m $5.8m $10.4m $0.7m

6
Key points six months to June 2018
New Zealand kiwifruit volumes up 21% to 31.1m trays
Record avocado returns $40.81 on average OGR per tray
Successful acquisition and integration Northland
Sale process of Northland orchards underway (five orchards have since conditionally sold
for $15.86m)
Further impairment and accelerated amortisation of goodwill and supplier contract in the
banana business of $1.5m
Australian kiwifruit yields down by 13%

7
Guidance for 2018 full year results
$23.1m
December 2017December 2018
$5.8m
December 2017December 2018
NPAT
EBITDA
Full year forecast EBITDA up by between 4% and 8% to between $24.0m and $25.0m
Full year forecast NPAT up between 12% and 24% to between $6.5m and $7.2m
Forecast excludes effect of Northland orchard sales
Forecast range
$24.0 ~ $25.0m
Forecast range
$6.5m ~ $7.2m
No change to guidance

8
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 $283.7m
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, Total Assets $283.7m
Fully imputed dividend of $0.12 per share paid 21 September 2018
Asset backing of $6.61 per share, debt high at $116.0m

9
What has gone well, what has not
Kiwifruit harvest
Fruit management
Maintenance
Purchase of KeriFresh
Orchard operations
Equipment division
Banana business (through the loss of a major customer)
Seeka Australia and Psa
Areas that have gone well
Areas that have struggled
Information systems
Innovation in Finance
Grower Entities
Capacity planning
Avocados
People processes, seasonal and
RSE management

10
Strategy
A growing business exceeding its cost of capital
Targeted varieties – our kiwifruit foundation with other varieties;
avocados, nashi and pears
Integrated from orchard to market
Geographically spread – a New Zealand company not bounded by
New Zealand
Living the brand values
Financially secure, strength to withstand a shock
Delivering orchard-to-market excellence

11
Chief Executive’s Update
Agenda

Michael Franks

12
Introduction
Better performance in New Zealand
Volume increases well handled
Capacity profile well understood, but requires more investment
Satisfying operational results in New Zealand

Australia and Retail Services had a tough six months and
subsequent Psa (later in this presentation)

13
Unaudited six month group financial results
June 2017

6 months
Unaudited
Dec 2017

12 months
Audited
June 2018

6 months
Unaudited
Variance

6 months
Unaudited
Turnover
$148.9m $217.9m $154.9m $6.0m
Revenue
$134.0m $186.8m $145.4m $11.4m
EBITDA
$21.9m $23.1m $23.5m $1.6m
NPBT
$15.8m
$9.9m $15.1m $0.7m
NPAT
$11.1m $5.8m $10.4m $0.7m

14
Post-Harvest, six months results
21.4
27.8
32.4
25.6
31.1
2014201520162017¹June 2018
New Zealand kiwifruit trays
Millions of class 1 trays



$21.5m EBITDA up 26%
▪Rebound in Hayward and
increase in SunGold
31.1m trays up 21%
Includes Northland from 30
April
Packing citrus and berries
Northland business has
performed to expectation
Laboratory business granted
industry testing contract

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

15
Orchard Division, six month results
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 down 26%
▪EBITDA decline in line with
expectation
▪Completed long term leases,
new leases yet to yield
▪Significant activity underway
with New Zealand long term
lease developments
Avocados and kiwiberry good
performers
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

16
Retail Services Division, six month results
$0.9m EBITDA down 31%
▪Tough banana market and low
avocado volumes
Further impairment and
accelerated amortisation of
goodwill and supplier contract in
the banana business of $1.5m
Great Avocado returns to
growers
Delicious Nutritious Food
Company continues to grow –
EBITDA doubles, poised for
further growth
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

17
Kiwifruit numbers
SunGold Hayward Hayward Organic
Fruit loss - YTD
Industry
1.34% 1.43% 0.94%
Seeka
0.77% 2.00% 0.99%
Forecasted returns
Seeka – per tray
$10.39 $5.65 $8.25
Seeka – per hectare
$135,535 $66,480 $69,236
Industry – per tray
$10.28 $5.47 $8.67
Industry – per hectare
$138,973 $64,455 $69,663
To Week 42
Low fruit loss
Excellent SunGold fruit loss
SunGold financial returns excellent

18
Seeka Australia, six month results
Tough year in Australia
▪Pear market soft
▪Lower kiwifruit yields
$2.7m EBITDA down 21%
61 hectares of kiwifruit in
development including 10
hectare organic orchard
New exciting Hybrid pears
Fundamental confidence
remains
Excellent operational people
At year end, EBITDA likely to
break even

Class 1 and 2
June
2017
(kg)
Dec
2017
(kg)
June
2018
(kg)
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

19
Seeka Australia Psa
Detected and notified on 2 October
Confirmed on 16 October
93 hectares of mature Hayward not expected to be impacted by Psa
61 hectares of orchards in development
47 hectares rootstock
14 hectares grafted
Comprehensive monitoring programme underway
Seeka’s NZ experience expected to minimise impact
Alternate varieties being tested
Grafted Hayward onto Bruno rootstock
Australian climate expected to help mitigate Psa

20
Delicious Nutritious Food Company
Packing kiwiberry – new machine
Excellent performance in kiwiberry
84,875 trays (increase of 29%)
Good sales in Kiwi Crush
Sales increased by 20%
New deal signed with major customer
for bulk sales (2018/2019)
Early improvements delivered
Marketing now the target

21
VLS - Independent Lab
Now a service provider to Zespri, 24
hours a day, 7 days a week in the
season
Processed 10,700 samples for Zespri
Excellent effort
Great first year performance with
some opportunities for improvement
Delivered the financial results

22
Information Systems
Kerikeri integration
New mapping software - Safety
New Seeka App - Growers
Kofax ordering system
New HRIS in development
Financial consolidation tool
Seeka Maps

23
Summary
Mixed first six months
Good improvement in financial results in spite of some unexpected
issues
Excellent capacity planning
Excellent operations in New Zealand, across the business
Good innovation
But
Banana business
Australia

24
Agenda
Questions