Auckland Fish Market Opening Presentation

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This presentation contains not only a review of operations, but also some forward looking statements about Sanford
Limited and the environment in which the company operates. Because these statements are forward looking, Sanford
Limited’s actual results could differ materially. Media releases, management commentary and analysts presentations,
including those relating to the previous results announcement, are all available on the company’s website and contain
additional information about matters which could cause Sanford Limited’s performance to differ from any forward
looking statements in this presentation. Please read this presentation in the wider context of material previously
published by Sanford Limited.
DISCLAIMER
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•Welcome and introductionVolker
The bigger picture
•Value growth through Sales and MarketingAndre
•Asset rejuvenation / operational alignmentClement
•People and CultureKaren
•Our capital framework Katherine
•Q&AAll
TODAY
ORGANISATIONAL
CAPABIILTY
OPERATIONAL
EXCELLENCE
INNOVATION
BRANDING
INVESTMENT
SOCIAL LICENSE
INNOVATION
FRESHSALMONMUSSELSFROZEN

20142019
Pushing the value chain

New York Times, 4 March 2019
Facing interesting challenges and opportunities
Culture
Infrastructure
Climate Change
Consumer
Preferences

SANFORD STRATEGY
Business Excellence
Framework
AMBITION
$1 EBIT/KG by 2023
VISON
To be the Best Seafood
Company in the World
PURPOSE
We share the natural
goodness of our oceans with
uncompromising care
ORGANISATIONAL
CAPABIILTY
OPERATIONAL
EXCELLENCE
INNOVATION
BRANDING
INVESTMENT PLAN
SOCIAL LICENSE
INNOVATION
FRESH
SALMONMUSSELS
FROZEN
Cross Functional Business Teams
Our integrated approach

Source: Ruminant, Climate change and
climate policy, Ripple et al.2013,
www.nature.com/natureclimatechange
Carbon footprint
Seafood has less
impact on the
environment
compared to
traditional protein
sources
Great outlook through excellent points of differentiation
Seafood
Global protein consumption growth outlook
(2014 –2020)
16.0%
15.6%
14.6%
8.7%
7.1%
6%
9%
12%
15%
18%
FishPoultry meatSheep meatPig meatBeef & veal
Source:OECD –FAO Agricultural Outlook
New Zealand’s Exclusive Economic Zone
-the 4
th
largest in the world
-no overlap with another country’s EEZ

Mitigatingrisk through geographic spread, diversity and innovation

VALUE GROWTH THROUGH SALES,
MARKETING AND INNOVATION
INNOVATION
FRESHSALMONMUSSELSFROZEN

CONSUMER
CUSTOMER
VALUE

Knowing and listening to the Consumer

13
BeingDeliberate Being Focused Being Brave

14
The Importance of the Story

15
Auckland Fish Market
FRESH

18
FRESH
Deliberate Execution and Education

21
FROZEN
Branding and Product Mix

22
MUSSELS
Mussels all about Diversification

INNOVATION
Innovation Takes Many Forms
Science Based
Technical/Process
Based
NPD

ASSET REJUVENATION /
OPERATIONAL ALIGNMENT
INNOVATION
FRESHSALMONMUSSELSFROZEN

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Focus areas
-Volume growth and size consistency for USA market
-Social licence
-Bluff optimisation
-Smoltoptimisation
-Dissolved oxygen management
Asset Rejuvenation
⁻Replacement accommodation and feed barge $5m
approved
⁻In progress–replacement transfer boat
⁻Salmon hatchery capability and capacity
⁻Processing capability/capacity (2020 -2022)
SALMON
Salmon Farming and Processing

Focus areas
-Volume growth for diversification
-Algal bloom management
-Deployment of SPATnzspat
Asset Rejuvenation
-Farming assets optimisation –geographical
diversification
-Farming vessel capacity
-Hatchery capacity and diversification
Mussel Farming and Processing
MUSSELS

‹#›

Focus areas
-Efficiency and quality
-Supply chain effectiveness
-North Island processing optimisation
-South Island processing optimisation
-Pelagic sale to Pelcocompletion
Asset Rejuvenation
⁻San Waitakirebuild $0.8m winches approved
⁻Orange Roughyfilleting automation $0.6m approved
⁻In progress–inshore vessel renewal
⁻Climate control processing sites
⁻PSH technology
Wild catch -Inshore
FRESH

Focus areas
-Increase value cascade for Hoki
-Product quality
-Compliance framework
-Crew engagement
-Labour shortage and pay issue
Asset Rejuvenation
-Scampi vessel replacements 2020-2024
-Long liner replacement
-Factory trawlers upgrades to focus on efficiency and
quality
-New sonar equipment (3x $0.6m)
-RSW/flow ice for pounds
-Climate control in factory
-PSH technology
Wild catch -Frozen
FROZEN

INNOVATION
FRESHSALMONMUSSELSFROZEN
PEOPLE AND CULTURE

Creating a safe and high performing workplace culture
Focus on workplace culture and capability to deliver strategy

OUR CAPITAL FRAMEWORK
INNOVATION
FRESHSALMONMUSSELSFROZEN

$120m investment over 2 years
Channel
Development
$3M
Brand
Development
$10M
Product & Technology
Innovation
$10M
Operational
Excellence
$55M
Organisational
Capability
$4M
SanCore
$15M
Social License
Development
$4M
FOUNDATIONAL
TRANSFORMATIONAL
ASPIRATIONAL
F19F21

Impact on
Sanford’s
Balance Sheet
Achievement
of Sanford’s
strategic goals
Interests of
our
shareholders
1.Current stable dividend policy
23c per share [FY18 $21.5m]
2.Share value appreciation
1.Strong Balance Sheet [Gearing FY18 26.6%)
2.Debt Headroom -$80m NZD
[$152m Debt Sept FY18]
3. Debt/EBITDA Target 1.75x
Can flex to 2.0x for short periods [FY18 1.81x]
4. Liquidity Risk Test:must be >115%
+ Source of Funds
$120m capital programme funded by:-
-Net operating cash-flow
-Financing cash-flow
-Divestments
-Use of Funds
Capital Controls
1.Annual Capital Plan
2.Capital Committee governance process
3.Delegated authority
>$1m requires Board approval
4. Business case hurdle rate: 10% ROC post tax
Integrated Capital Management Plan
Integrated Capital
Management Plan

SanCoreInvestment
Commodity and
Volume driven
Production centric
Lowest cost model
Minimum wage
Low people investment
Aging assets
Frozen/volume
platforms
Aging workforce
Low return on capital
High inventory
High customer, product
& market concentration
Compliance driven
culture
Compliance driven
H&S
Reputation deficient
Value driven
Consumer centric
Cost effective model
Competitive wage
Employer of choice
World class harvesting
and processing
Branded portfolio
Engaged workforce
High return on capital
Low inventory
Customer, product and
(niche) market
diversification
Performance driven
culture
Proactive safety risk
management
High social licence to
operate
Jump shift in engagement
through capability
maximisation
People
Fit for purpose for the future
state –agile, flexible & timely
Systems
Simplify currently complex
processes
Processes
Support decision making
Data captured once, securely,
at source
Information
A change management programmeand information technology
platform that supports the strategy

Improving our disclosure -a journey of continuous improvement
INTEGRATED BUSINESS THINKING & REPORTING: GROWING
VALUE