2018 Annual Results Announcement

Scales Corporation Limited
Head Office: 52 Cashel Street | Christchurch 8013 | New Zealand
Postal: PO Box 1590 | Christchurch 8140 | New Zealand
Phone: +64 3 379 7720
scalescorporation.co.nz



NZX & Media Release

27 February 2019

SCALES CORPORATION DELIVERS STRONG PROFIT RESULT ON RECORD REVENUES

Highlights – 12 months to 31 December 2018

• Group FY2018 financial results:
o Record Underlying Group Revenues
1
of $464.7 million, 18 per cent above FY2017.
o Underlying EBITDA
2
of $67.1 million, exceeding previously provided guidance.
o Underlying Net Profit
3
of $35.8 million, statutory Net Profit for the Year of $45.5 million.
• Mr Apple export volumes up 9 per cent to 3,867k TCEs
4
, a new volume record.
• Significant progress made against Strategy Refresh with sale of Liqueo, conditional sale of
Polarcold, and acquisition of controlling interest in Shelby Foods.
• Significant investment in new proprietary premium varieties.
• Two new additions to the board, with Nadine Tunley and Tomakin Lai adding industry
experience and depth.

Diversified agribusiness group Scales Corporation Limited (NZX:SCL) today reported its FY2018 full
year results. Net Profit for the year (including non-cash NZ IFRS adjustments) was $45.5 million
(FY2017: $31.6 million). Earnings per share for FY2018 were 32.2 cents per share (FY2017: 22.5
cents per share).

Scales Corporation chairman Tim Goodacre says: “2018 was another solid year for Scales with a
number of new initiatives progressed. The company made significant progress against its Strategy
Refresh, with the conditional sale of Polarcold and sale of Liqueo. Our strategy is to reinvest the
proceeds from these sales in higher-returning opportunities available to us in the agribusiness space.
The first of these investments was in our Food Ingredients division, with the acquisition of Shelby
Foods in the United States in December 2018. We hope that this will be the first in a series of
successful investments.”

1
Underlying revenues include revenues from continuing and discontinued operations
2
Earnings before interest, tax, depreciation and amortisation and excludes non-cash New Zealand International Financial
Reporting Standards (NZ IFRS) adjustments.
3
Net Profit excluding non-cash NZ IFRS adjustments. A reconciliation between Net Profit and Underlying Net Profit is provided
in the appendix of our annual results presentation pack.
4
Tray carton equivalent, a measure of apple and pear weight, defined as 18.6kg packed weight which equates to 18.0kg sale
weight.

2




“In addition, Scales produced a strong financial result, with Underlying profitability above previously
issued guidance. This is a very satisfying result, supported by strong performances across all
divisions, once again reflecting the attention to detail and commitment to excellence within the team.”

“Finally, I am very pleased to welcome Nadine Tunley and Tomakin Lai as our newest members of
the Scales board. Nadine adds industry experience, whilst Tomakin replaces Weiyong Wang as the
representative for China Resources Ng Fung. In accordance with standard practice, both Nadine and
Tomakin will resign and offer themselves for re-election at the next Annual Shareholders Meeting.”
Mr Goodacre said.

Scales Corporation managing director Andy Borland notes: “Scales is embarking upon a new and
exciting journey. We are excited to welcome Shelby and their team to the Scales family, and by the
many opportunities available to the Group. Mr Apple is embarking upon a new phase of orchard
redevelopment – renewing our commitment to proprietary premium varieties targeted mostly at
consumers in Asia. We invested $16.3 million in capital expenditure during FY2018, of which $10.0
million was in Mr Apple including redevelopment of nearly 67 hectares.”

“Net debt at 31 December 2018 was $62.2 million. The increase over previous periods was mostly
due to the acquisition of Shelby, which settled in late December. During the year Scales declared
dividends of 18.5 cents per share.
5
As in previous years timing, the board expects to declare a final
dividend in respect of FY2018 in May, with payment in July.” Mr Borland says.

Divisions

Horticulture
The Horticulture division delivered a strong performance with Underlying EBITDA of $42.6 million in
FY2018 (FY2017: $38.9 million).

Mr Borland noted that “Mr Apple reached a new volume record, with 3,867k TCEs of our own-grown
apples exported, an increase of 9 per cent over 2017 volumes, notwithstanding a reduction in
packouts from 80 per cent to 76 per cent. More pleasing was that volume growth was concentrated in
sales of premium varieties, which collectively recorded volume growth of 18 per cent over 2017 export
volumes.”

“In addition to increased volumes, Mr Apple achieved an increase in overall weighted average sales
prices, reflecting product mix and solid demand from key markets.”


5
Scales declared a final dividend of 9.0 cents per share for FY2017 on 1 May 2018, which was paid on 6 July 2018 and
declared an interim dividend of 9.5 cents per share for FY2018 on 5 December 2017, which was paid on 18 January 2019.

3



“Mr Apple is embarking on the next exciting step of its growth strategy, with significant orchard
redevelopment having taken place during 2018 and further redevelopment scheduled for 2019 and
2020. Newly developed orchards will be concentrated in our proprietary varieties Dazzle® and
Posy®, which are sweet apples targeted at the Asia markets. The newly developed orchards will also
take advantage of developments in orchard planting. These techniques are expected to result in
higher yields in less time, and reduced operating costs such as picking.”

“We also continued our focus on investing in the Mr Apple brand. This is to ensure our product is
clearly differentiated in the market place as a premium-quality product to enable us to maximise
returns year-on-year.”

Storage & Logistics
The Storage & Logistics division delivered another strong result with EBITDA of $21.1 million in
FY2018, an increase of 10 per cent on FY2017 Underlying EBITDA of $19.1 million.

“Scales Logistics was the standout performer within Storage & Logistics, with EBITDA from that
business up 48 per cent on the back of increased sea and airfreight activity.”

“Significant changes were made to the shape of our Storage & Logistics division with the sale of
Liqueo in August 2018 and the conditional sale of Polarcold in May 2018. The sale of Polarcold
remains subject to OIO approval. The deadline for satisfaction of this condition has been extended to
31 May 2019.” Mr Borland said.

Food Ingredients
The Food Ingredients division generated Underlying EBITDA of $10.2 million (FY2017: $8.0 million).

Mr Borland noted “the most significant development within this division was the acquisition of a
controlling interest in Shelby Foods in December 2018. Shelby adds 80,000 MT of petfood ingredient
sales, increasing the breadth and geographical diversity of proteins that we source as well as
improving the strategic positioning of Meateor with its customers.”

“Meateor sold more than 29,000 MT of pet food ingredients, an increase of 5 per cent on its record
FY2017 volumes. Profruit delivered another strong result, with overall juice concentrate sales up by
10 per cent on FY2017 volumes.” Mr Borland said.

Outlook

Looking ahead, Mr Goodacre said “the 2019 apple harvest is underway and early crop indications
support a return to long-run packout rates. The Storage & Logistics and Food Ingredients divisions
are also trading positively.”

4



Initial trading for FY2019 is in line with expectations, and with previous year’s trading, although noting
the revised volume forecast in Mr Apple due to orchard redevelopment and the transition to more
market preferred varieties. However, Directors will not provide EBITDA guidance for FY2019 at this
time, due to two key outstanding initiatives:

1. The sale of Polarcold remains conditional on OIO approval, simply reflecting the long
regulatory approval process. Under the Sale Agreement the date this condition is currently
required to be met has been extended by mutual agreement to 31 May 2019;
2. In line with our growth strategy, Scales’ continues to make positive progress on a number of
initiatives, some of which may be agreed in the near term.

Contact
Andy Borland, Managing Director, Scales Corporation Limited, Mob: 021 975 999,
email: andy.borland@scalescorporation.co.nz

About Scales Corporation
Scales Corporation is a diversified agribusiness group. It currently comprises three operating
divisions: Horticulture, Storage & Logistics and Food Ingredients. The company’s diverse spread of
activities gives Scales broad exposure to New Zealand’s agribusiness sector. Scales Corporation
was founded in 1897 as a shipping business by George Herbert Scales. Today it employs more than
700 staff New Zealand wide. Find out more at www.scalescorporation.co.nz.

---

Scales Corporation Limited
Growing
your Diversified
Agribusiness
Annual Results Presentation
For the year ended 31 December 2018
27 February 2019

2
Scales Corporation Limited –2018 Full Year Results
1.2018 Highlights
2.Financials
3.Divisional Performance & Strategy
4.Capital Management
5.Investment Strategy
6.Sustainability, Governance and Outlook
7.Appendices
Agenda

2018 Highlights
1

4
Strategic & Operating Highlights
•Underlying EBITDA $67.1m, up 8% on 2017. Underlying NPAT $35.8m, up 9% on 2017
•Statutory Profit for the Year $45.5m (2017: $31.6m)
•Storage businesses (Polarcold& Liqueo) sold for combined proceeds of $171.4m. Sale of Polarcold
remains subject to OIO approval (ongoing). The due date for satisfaction of this condition has been
extended by mutual agreement to 31 May 2019
•Mr Apple own-grown export volumes of 3,867k TCEs, up 9% on 2017
•Mr Apple continues to invest in its future, with approximately 67 hectares planted or redeveloped in 2018
in premium varieties
•Significant strengthening of food ingredients network. Our full service petfoodingredients business
Meateorsuccessfully completed the acquisition of 60% of Shelby Foods –expanding the Group’s network
and depth of customer relationships
•Continued progress on our sustainability journey with Mr Apple completing its first CEMAR certification to
calculate its carbon footprint
•Depth and industry experience added to the board with appointment of Nadine Tunleyand Tomakin Lai
Scales Corporation Limited –2018 Full Year Results

5
Scales by the Numbers
Scales Corporation Limited –2018 Full Year Results
5,831,000
TCEs of apples exported
(Mr Apple, Longview, outside growers
& Fern Ridge Fresh)
3
Signed acquisition or sale
of business contracts
(Polarcold, Liqueo, Shelby)
35,210
TEU equivalents
freighted
(up 19% on 2017)
18.5 cents
Dividends declared per
share
29,028 MT
Petfoodingredients sold
3,867,000
TCEs of own-grown
apples exported
(new volume record for Mr Apple)
$464.7m
Underlying Revenue
(new Revenue record)
17%
ROCE
(2017: 17%)

2
Financials

7
Group Financial Performance
•New record revenue, Underlying Revenue
$464.7m, up 18% on 2017:
▪Solid revenue growth from all divisions
▪Reported revenue (excluding discontinued
operations) $402.5m up 20% on 2017
•Reported NPAT $45.5m (2017: $31.6m)
•Underlying EBITDA $67.1m, up 8% on 2017
and exceeding previous guidance
▪Underlying results are shown after deduction of
transaction costs ($1.7m) associated with completion
of the Polarcold, Liqueoand Shelby transactions
•Underlying Net Profit $35.8m, up 9% on
2017
Scales Corporation Limited –2018 Full Year Results
* Reported (and restated) financials exclude discontinued operations (Polarcoldand Liqueo)
** Underlying Results exclude some New Zealand International Financial Report Standards (NZ IFRS) non-cash adjustments (namely, change in fair value gain on apple inventory, cash-settled and equity-settled
share-based payments, and change in gross liability for non-controlling interests). Management and the Board believe that Underlying Results more accurately demonstrate the change in operational
performance of the Group. Underlying Results include earnings from Polarcold(full year) and Liqueo(up until sale)
Income Statement
20182017
$MillionsActualActualGrowth
Reported Financials*Restated
Revenue402.5335.520%
Cost of Sales(312.2)(256.7)
Gross Margin90.378.815%
Profit for the Year45.531.644%
Underlying** Results
Underlying Revenue464.7393.118%
Underlying EBITDA67.162.08%
Underlying EBIT52.347.89%
Underlying Net Profit35.832.79%

8
$19.8m
$34.8m
$38.6m
$32.7m
$35.8m
20142015201620172018
Underlying NPAT
$39.8m
$61.4m
$67.9m
$62.0m
$67.1m
20142015201620172018
Underlying EBITDA
Trends in Financial Performance
•Underlying EBITDA and NPAT have increased at CAGRs of 14% and 16% respectively
Scales Corporation Limited –2018 Full Year Results
CAGR 14%
CAGR 16%

9
Trends in Divisional Performance
•Underlying divisional EBITDAs have increased at CAGRs of between 14% and 16% as presented below
Scales Corporation Limited –2018 Full Year Results
$23.9m
$40.0m
$45.3m
$38.9m
$42.6m
20142015201620172018
Horticulture EBITDA
$12.3m
$16.3m
$16.2m
$19.1m
$21.1m
20142015201620172018
Storage & Logistics EBITDA
$5.7m
$7.6m
$9.2m
$8.0m
$10.2m
20142015201620172018
Food Ingredients EBITDA
CAGR 16%CAGR 14%
CAGR 16%

10
Balance Sheet
•Capital employed increased by $52.7m in
2018, principally due to:
▪The acquisition of Shelby in December 2018,
resulting in additional assets and goodwill
▪Capital expenditure including orchard redevelopment
as described in the Horticulture section
▪Increases in inventory
•Polarcold’sassets have been reclassified as
“Assets held for sale”, reducing Non-Current
Assets and increasing Current Assets
Scales Corporation Limited –2018 Full Year Results
Balance Sheet
20182017
$MillionsActualActual
Current Assets (excluding Cash)
Trade Debtors22.923.4
Inventory45.422.2
Unharvested Agricultural Produce20.520.2
Other7.39.8
Assets Held for Sale97.6 -
193.975.7
Current Liabilities (excluding Overdraft,
Borrowings, and Dividends Declared)
Trade Creditors & Other Payables(27.3)(22.2)
Liabilities assoc. w/Assets Held for Sale(7.6) -
Other(6.5)(7.1)
(41.4)(29.3)
Net Working Capital152.546.4
Non-Current Assets
Apple Trees31.630.7
Land & Buildings86.7142.6
Other PP&E32.355.5
Investments & Intangibles50.224.5
Other 6.97.8
207.7261.1
Capital Employed360.2307.5

11
Balance Sheet (continued)
•At December 2018, Net Debt was $62.2m.
The increase in Net Debt on 2017 was due
to settling the Shelby transaction, and
increases in working capital and Non-
Current Assets, partly offset by proceeds
from the sale of Liqueo
•Average net debt for the year was $70.7m.
Except for the Shelby transaction, which did
not materially contribute to earnings during
2018*, average net debt for the year would
have been $53.1m, or 0.8x EBITDA
•Our balance sheet remains strong with
significant headroom on covenants
Scales Corporation Limited –2018 Full Year Results
* Shelby was settled on 20 December 2018
Balance Sheet (continued)
20182017
$MillionsActualActual
Non-Current or Other Liabilities
Deferred Tax Liabilities(15.6)(28.2)
Other Financial Liabilities(7.5)(4.0)
Dividends Declared(13.3)(12.6)
(36.4)(44.8)
Net Debt
Cash less Overdraft(1.0)5.7
Cash in Assets Held for Sale6.7 -
Borrowings(68.0)(46.5)
Net Debt(62.2)(40.8)
Liabilities assoc. w/assets held for sale(11.7) -
Total Equity249.9221.9
Covenants
Interest Cover
Ratio22.4x18.3x
Covenant3.0x3.0x
Headroom646%511%
Senior Debt Coverage
Ratio1.1x0.7x
Covenant2.5x2.5x
Headroom131%257%

3
Divisional
Performance &
Strategy

13
Horticulture –Financial Performance
•Record revenue of $255m, up 15% on 2017
•Underlying EBITDA of $42.6m, up 9% on
2017
•Horticulture highlights:
▪Increase in crop –from 3,545k TCEs to 3,867k TCEs,
against a backdrop of a generally more challenging
season (packoutdown to 76% from 80% in 2017)
▪Improved prices for both traditional and premium
varieties
▪Significant orchard development in new premium
varieties for which Mr Apple has an underlying
interest in the plant variety rights (Dazzle® and
Posy®)
Strong performance from a record crop
Scales Corporation Limited –2018 Full Year Results
Financial Performance - Horticulture
20182017
$MillionsActualActualGrowth
Revenue254.6222.015%
Underlying Horticulture EBITDA42.638.99%
Underlying Horticulture EBIT34.231.110%

14
Horticulture –Own-Grown Volumes
•Total own grown export volumes of nearly 3.9m TCEs, up 9% on 2017
•Volume growth concentrated in premium varieties, up 18% on 2017, with strong growth across all premium
varieties
Significant increase in export crop
Scales Corporation Limited –2018 Full Year Results
536
741
1,059
1,036
1,454
1,656
1,616
1,901
1,465
1,404
1,773
1,716
1,701
1,890
1,929
1,966
2,001
2,144
2,833
2,752
3,155
3,546
3,545
3,867
20112012201320142015201620172018
Mr Apple Own Export Volumes (TCE 000s)
Premium VarietiesTraditional Varieties
214
343
406
457
119
185
245
245
282
301
253
359
273
393
585
574
831
866
809
959
536
741
1,059
1,036
1,454
1,656
1,616
1,901
20112012201320142015201620172018
Growth in Premium Volumes (TCE 000s)
NZ QueenPink LadyHigh Colour Fuji & Royal GalaOther

15
Horticulture –Prices & Other KPIs
•Weighted average FOB price up 7% on 2017
reflecting:
▪Improved pricing for Premium and Traditional
Varieties
▪Mix changes, with Premium varieties now accounting
for nearly 50% of all sales
▪Minor favourable movements in FX rates achieved
•The division sold more than 5.8m TCEs, up
4% on 2017. Strong growth in Mr Apple
volumes are believed to compare
favourably to the broader industry
Scales Corporation Limited –2018 Full Year Results
* External grower volumes comprise external grower volumes handled by Mr Apple (1,183k TCEs) and Fern Ridge Fresh (780k TCEs)
Horticulture KPIs
20182017
ActualActualGrowth
Apple Prices by Variety (NZD / TCE, FOB)
Premium Varieties38.836.85%
Traditional Varieties32.730.86%
Weighted Average all Apples35.733.57%
Volumes (TCE 000s)
Mr Apple own-grown volumes3,8673,5459%
External grower volumes*1,9642,078-5%
Total volume sold5,8315,6224%
FX Rates
NZD:USD0.690.69-1%
NZD:EUR0.580.60-4%
NZD:GBP0.480.464%
NZD:CAD0.860.88-2%

16
Horticulture –Strategy
•The next exciting step in Mr Apple’s strategy is to increasingly grow and market
apples for which we own (outright or collaboratively) the underlying variety. With
1,155 hectares of our own planted orchards, Mr Apple is uniquely positioned to
develop commercially relevant volumes of new, premium varieties
•Dazzle®, a new apple brand 20 years in the making, is specifically targeted at the
Asia market with its high colour, sweet taste and big size. Mr Apple’s first
commercial sales of Dazzle® will take place this year
•Posy® is a pinkyred, sweet apple, which is harvested at the very beginning of the
season, and targeted at consumers in the Asia region. The first commercial sales of
Posy® will take place in the next month
•Currently, Mr Apple has approximately 50 hectares of Dazzle® and 30 hectares of
Posy® planted
Continuing to invest in new, premium varieties
Scales Corporation Limited –2018 Full Year Results

17
1,616
1,901
1,882
1,987
2,058
2,202
2,346
2,465
1,929
1,966
1,737
1,611
1,532
1,546
1,554
1,560
3,545
3,867
3,620
3,598
3,590
3,747
3,900
4,025
201720182019F2020F2021F2022F2023F2024F
Mr Apple Own Export Volumes (TCE 000s)
Premium VarietiesTraditional Varieties
Horticulture –Strategy (continued)
•Mr Apple has begun the next phase of its orchard redevelopment programme. During the 2018 winter,
nearly 67 hectares of new orchard were developed (of which 41 hectares is in Dazzle®). 58 hectares of
established orchard were either redeveloped or ceded over the same period
•Further plantings of approximately 85 hectares (through the redevelopment of 70 hectares of Braeburn
and lower performing orchard blocks) are anticipated to take place over the 2019 and 2020 winters
•As shown below, total orchard production is likely to reduce in the near term with volumes returning to
current levels in 2023F
•Due to the increased proportion of premium varieties including Dazzle® and Posy®, the weighted average
NZ FOB sale price would increase to ~$39 / TCE by 2023F if 2018 varietal pricing is maintained (future sale
prices will depend on market conditions at the time)
Replanting profile; future volumes and apple pricing
Scales Corporation Limited –2018 Full Year Results

18
Storage & Logistics
•Revenues up 22% due mostly to strong
growth in performance of Scales Logistics
▪Scales Logistics arranged ocean freight for the
equivalent of 35,210 TEUs, up 19% on 2017, and
9,251 tonnes of Airfreight, up 49% on 2017
•Solid performance from Polarcoldwhich
recognised a 4% increase in EBITDA. Liqueo
also performed well in the period up until its
sale in August 2018
•Assuming the sale of Polarcoldproceeds, this
division will be renamed the “Logistics”
division in future announcements. Scales is
committed to further opportunities for
growth, both organic and through
acquisition, for this division
Scales Corporation Limited –2018 Full Year Results
* Liqueoresults for 2018 are for the part year from 1 January 2018 to 13 August 2018 (being the date of settlement of the sale of Liqueo)
Financial Performance - Storage & Logistics
20182017
$MillionsActualActualGrowth
Underlying Revenue153.2126.022%
Underlying EBITDA
Polarcold15.114.54%
Scales Logistics4.93.348%
Liqueo*1.11.3
21.119.110%
Underlying EBIT15.313.315%

19
Food Ingredients
•Solid growth in revenues and profitability
from Food Ingredients. Increased
profitability from both Meateorand
Profruit
▪Total sales volumes >29,000 MT, up 5% on 2017 (not
including Shelby volumes)
▪2019 volumes expected to be significantly higher
with inclusion of Shelby sales
•Significant developments during 2018
position Food Ingredients towards
achieving its long-run earnings objectives
Scales Corporation Limited –2018 Full Year Results
Financial Performance & KPIs - Food Ingredients
20182017
$MillionsActualActualGrowth
Financial Performance
Revenue83.168.921%
Underlying Food Ingredients EBITDA10.28.027%
Underlying Food Ingredients EBIT9.67.528%
KPIs
Meateor Volume Sold (MT)29,02827,6635%
Juice Concentrate Sold (000 L)6,2195,64510%

20
MeateorGroup
Food Ingredients –Strategy & Synergies
•Our petfoodinvestments are focused principally on three objectives:
▪Improving our relevance to customers. Shelby increased our scale, breadth and diversity of proteins. The combined Meateorgroup
expects to handle more than 110,000 MT of petfoodingredients sourced from three separate geographies annually. We believe we
are meeting our objective of becoming a significant global supplier to the world’s largest petfoodmanufacturers
▪Extend the range of value added services to our customers. We are committed to exploring options with our customers to make
petfoodmore nutritious as well as to develop a range of ‘functional’ petcarefoods. Multiple opportunities for growth are being
considered by the Group
▪Creating a diversified business of scale. Our goal is to develop the Food Ingredients division into a business with $25m in EBITDA,
with a diversity of supply and offtake relationships
MeateorGroup will have substantial interests in three territories
Scales Corporation Limited –2018 Full Year Results
Australia
Sourcing & sales
(100%)
New Zealand
Sourcing, manufacturing & sales
(100%)
United States
Sourcing, manufacturing & sales
(60%)

4
Capital
Management

22
Performance Against Benchmarks
•Return on Capital Employed (ROCE)
maintained at 2017 levels at the Group
level, above our long-run objective
•EBITDA margins remain strong. A decrease
in Group EBITDA margins is mostly due to
the increased trade from the lower margin
activities of the Group
Scales Corporation Limited –2018 Full Year Results
* Storage & Logistics ROCE for 2018 is based on Scales Logistics and Polarcold. Liqueohas been excluded due to the Nil balance of capital employed at year end
** Food Ingredients ROCE excludes Shelby
*** Group EBITDA Margin is based on Underlying EBITDA divided by Underlying Revenue (Revenue from continuing and discontinuedbusinesses)
Capital Management
20182017
$MillionsActualActual
Return on Capital Employed
Horticulture21%21%
Storage & Logistics*16%13%
Food Ingredients**32%37%
Group17%17%
Target15%15%
EBITDA Margins
Horticulture17%18%
Storage & Logistics14%15%
Food Ingredients10%10%
Group***14%16%
Target13%13%

23
Capital Expenditure
•Total capital expenditure was higher than
2017 due to growth projects at both Mr Apple
and Polarcold. Operational capital
expenditure was in line with 2017
•During the year Mr Apple developed and
redeveloped approximately 67 hectares at a
cost of $5.3m:
▪Mr Apple is following the trends in growing techniques.
Whilst these techniques involve higher upfront
expenditure, longer run benefits include faster and
improved yields, and lower orchard costs (e.g. picking)
▪Planting / redevelopment of the remaining 85 hectares is
estimated to cost a further $7m with the majority of this
expenditure likely to occur during 2019
•Total growth and operational capital
expenditure during 2018 for Polarcoldwas
$4.7m
Scales Corporation Limited –2018 Full Year Results
Capital Management
20182017
$MillionsActualActual
Operational Capital Expenditure
Horticulture3.53.8
Storage & Logistics3.33.3
Food Ingredients0.50.2
Other0.20.1
7.57.4
Growth Capital Expenditure
Horticulture6.55.2
Storage & Logistics2.30.8
Food Ingredients - -
8.86.0
Total Capital Expenditure16.313.5

5
Investment
Strategy

25
Delivering on Strategy Refresh
•Project Refresh was about refreshing our group investment and growth strategy, adopting a greater focus
on pure-agribusinesses
•We have, and will continue to focus on opportunities that play well to our strengths:
▪Fully-vertically integrated
▪Export-led
▪Added value from our relationships in China
•As signalled, successful implementation of the strategy will ultimately result in a meaningful rebalance of
our portfolio of businesses:
▪Storage businesses (Polarcoldand Liqueo) have either been, or are expected to be, sold. These businesses were less-aligned with
our core strengths, and generated lower returns
▪We have initially focused investment on our Food Ingredients division, with the objective of creating a $25m EBITDA business.To
date we have acquired a controlling interest in Shelby Foods and continue to investigate a range of opportunities
▪We will continue to review investment opportunities that play well to our strengths
Recap on progress to date
Scales Corporation Limited –2018 Full Year Results

26
Agri-Business
•New Zealand stakeholders expect the agriculture sector to embrace environmentally friendly, sustainable
and high value production -making best use of current natural resources and creating long lasting
environmental benefits
•This is reflected in government announcements covering areas such as climate change and expectations of
foreign investment
•We’ve defined Agri-Business to encompass the following sectors
This is an exciting time to be a diversified investor in New Zealand agribusiness
Scales Corporation Limited –2018 Full Year Results
Agriculture
Fisheries /
Aquaculture
Forestry
Viticulture
Horticulture
Apiculture
Innovative
Processed
Food
79.2% of NZ’s merchandise exports
15% of employment
10.5% of GDP
The Primary Sector accounts for:

6
Sustainability,
Governance and
Outlook

28
Sustainability
•Environment:
▪Mr Apple completed its first CEMARs certification process to determine its carbon footprint (results not yet
available). We will be implementing plans to reduce our carbon footprint
▪Waste audits completed for the packhouse and orchard divisions of Mr Apple
•People:
▪Inaugural Group-wide staff engagement survey (405 participants)
▪Highest engagement scores around safety as a part of every day (86%), job satisfaction (74%), and diversity and
inclusion (70%)
▪Useful baseline upon which to measure improvement (or deterioration) in staff engagement
•Safety:
▪Development of a training matrix and use of an in-house forklift coach has driven notable positive differences
in behavior, safety and reduced damage
▪Increased reporting –in particular safety observations and near misses (up 79% on 2017)
▪All CEO’s and Board members attended a Health & Safety, Governance, and Leadership refresher course
We take seriously our obligation to be a responsible corporate citizen
Scales Corporation Limited –2018 Full Year Results

29
Governance
•Nadine Tunley
▪The Board of Scales is pleased to announce the appointment of Nadine Tunleyas a Non-Executive
Independent Director of the company. Nadine’s appointment is effective from 26 February 2019
▪Nadine is currentlyCEO of Ngai Tahuowned, OhaHoney LP, which farms in excess of 35,000 bee hives
nationwide. Nadine brings experience from a number of governance roles, including being the former
Chair of NZ Apples & Pears
•Tomakin Lai
▪In January 2019 the Board welcomed Tomakin Lai as a Director of the company. Tomakin replaces
WeiyongWang as China Resources representative on the Board. Tomakin is a Director of China
Resources Ng Fung Limited, who hold a 15.24% shareholding in the company. Tomakin is also the Vice
President, Chief Financial Officer and Company Secretary of China Resources Enterprise, Limited
•In accordance with standard practice, Nadine and Tomakin will resign and offer
themselves for re-election at the next Annual Shareholders Meeting
Scales is pleased to announce two new additions to its Board
Scales Corporation Limited –2018 Full Year Results

30
What We Know About 2019
•Horticulture:
▪Apple harvest underway, early crop indications support a return to long-run average packoutrates
▪First commercial sales of our new premium proprietary varieties Dazzle® and Posy® will take place this season
▪Focused marketing and branding efforts to expand further in Asia
▪Early market indications remain supportive
•Storage & Logistics:
▪Coldstoresreaching full capacity as the cropping season is in full swing
▪Positive start for Scales Logistics –activity expected to remain at 2018 levels
•Food Ingredients:
▪Petfoodingredient demand remains firm
•Initial trading for 2019 is in line with expectations, and with previous year’s trading, although noting
the revised volume forecast in MrApple due to redevelopment
Scales Corporation Limited –2018 Full Year Results

7
Appendices

32
Reconciliation to Statutory Accounts
Scales Corporation Limited –2018 Full Year Results
•This table reconciles Underlying EBITDA and
Underlying Net Profit to “Profit for the
Year” as reported in our Financial
Statements
Reconciliation to Reported Financials
GroupHorticulture
$000s20182017
Reported EBITDA51,74445,305
Change in fair value gain on apple inventory25640
Change in gross liability for Non-Controlling Interests(146)629
Share based payments3192
Equity settled employee benefits849389
Discontinued operations EBITDA14,32315,552
Underlying EBITDA67,05762,007
Reported net profit45,49931,617
Change in fair value gain on apple inventory25640
Change in gross liability for Non-Controlling Interests(146)629
Share based payments3192
Equity settled employee benefits849389
Taxation(80)(37)
Gain on disposal of Liqueo(8,174) -
Depreciation after transfer to disposal(2,421) -
Underlying net profit35,81432,730

33
Disclaimer
The information in this presentation has been prepared by Scales Corporation Limited with due care and attention. However, neither Scales Corporation Limited nor any of its
directors, employees, shareholders nor any other person shall have any liability whatsoever to any person for any loss (including, without limitation, arising from any fault or
negligence) arising from this presentation or any information supplied in connection with it.
This presentation may contain projections or forward-looking statements regarding a variety of items. Such projections or forward-looking statements are based on current
expectations, estimates and assumptions and are subject to a number of risks, uncertainties and assumptions. There is no assurance that results contemplated in any projections
and forward-looking statements in this presentation will be realised. Actual results may differ materially from those projected in this presentation. No person is under any obligation
to update this presentation at any time after its release to you or to provide you with further information about Scales Corporation Limited.
Our results are reported under NZ IFRS. This presentation includes non-GAAP financial measures which are not prepared in accordance with NZ IFRS. The non-GAAP financial
measures used in this presentation include:
•EBITDA. We calculate EBITDA by adding back (or deducting) depreciation, amortisation, finance charges / (revenue), and taxation expense to net earnings / (loss) from
continuing operations.
•EBIT. We calculate EBIT by adding back (or deducting) finance charges / (revenue), and taxation expense to net earnings / (loss)from continuing operations.
•Underlying EBITDA and EBIT are calculated by adding back (or deducting) any non-cash IFRS adjustments.
•Underlying Net Profit is calculated by adding back or (or deducting) the after-tax effect of any non-cash IFRS adjustments.
We believe that these non-GAAP financial measures provide useful information to readers to assist in the understanding of our financial performance, financial position or returns,
but that they should not be viewed in isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-GAAP financial measures may not be
comparable to similarly titled amounts reported by other companies.
Forward-looking statements are subject to any material adverse events, significant one-off expenses or other unforeseeable circumstances.
The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. Nothing in this presentation
constitutes legal, financial, tax or other advice.
Scales Corporation Limited –2018 Full Year Results

---

Reporting Period
Previous Reporting Period
12 months ended 31
December 2018
12 months ended 31
December 2017
(restated*)
$'000$'000
Revenue from ordinary activities$402,542$335,53120.0%
Profit (loss) from ordinary activities after
tax attributable to shareholders
$28,608$24,12418.6%
Net profit (loss) attributable to
shareholders**
$45,085$31,17644.6%
Amount per shareImputed amount per
share
N/AN/A
Record Date
Dividend Payment Date
31 December 201831 December 2017
141,103,597140,510,292
$1.43$1.43
Audit
Comments
*** Note that it is the company's intention to pay a final dividend in
July 2019. A decision on the final dividend is subject to the directors'
approval, taking into account all aspects of the group's performance
and financial position.
Please refer to the attached report for detailed commentary on the
results.
12 months to 31 December 2018
12 months to 31 December 2017
The financial statements attached to this report have been audited.
Percentage change
Dividend to shareholders
Final (for 2018 financial year) ***
Net Tangible Assets
Number of shares
Net Tangible Assets per share
* Please refer to section H of the 2018 Financial Statements for analysis
of the restatements
** Includes profit from discontinued operations
Scales Corporation Limited
NZX Appendix 1 - Prescribed Disclosure
Results for announcement to the market
N/A
N/A