Annual Shareholders Meeting Presentation

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PGG WRIGHTSON LIMITED
ANNUAL SHAREHOLDERS MEETING
9.30am, Tuesday 22 October 2019
Riccarton Park, Christchurch

Slide 1 – Meeting opening slide




Slide 2 – Welcome



Slide 3 – Board of Directors

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Slide 4 – On stage today




Slide 5 – Executive Team


Slide 6 – Opening formalities



Apologies

Notice of Meeting

Minutes

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Annual Report 2019

GAAP and non-GAAP performance measures

Please note that we will refer to both GAAP and non-GAAP performance
measures. We use Operating earnings before interest, tax, depreciation and
amortisation or Operating EBITDA as a key measure of performance and I
encourage you to refer to our full accounts for details of how this relates to GAAP
measures.

Changes to financial reporting

Our financial reporting has changed as a result of the sale of the Seed & Grain
business to DLF Seeds A/S.

The key change is for the statement of profit or loss, we have removed the impact
of Seed & Grain from the respective profit or loss lines and disclosed Seed &
Grain’s result in a separate discontinued operations line. Note that this
treatment also applies to the comparative period.

Please note that the statement of cash flows includes the Seed & Grain business
(up until the date of sale) and the comparative period statement of financial
position (balance sheet) includes the Seed & Grain business.

Proxies and Postal Votes

Slide 7 – Business of the meeting

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Slide 8 – Chairman’s address



It is my pleasure to address you today.

FY2019 has been a transformational year for PGW, both for the business and
shareholders.

The change brought about by the sale of the Seed & Grain business completed on
1 May 2019 was significant for PGW. In recent months we have communicated
extensively about the sale of Seed and Grain and the resulting $234 million capital
distribution. Today I would like to concentrate on the future of our strong rural
services business, which the Board and management team is firmly focused on.

Since completion of those transactions we have been busy recalibrating our cost
base through the implementation of a range of initiatives including:
• restructuring of our corporate functions.
• reducing our governance costs through a resizing the PGW Board; and
• renegotiating PGW’s audit fees.

To further underscore this confidence in the fundamentals of the business and
PGW’s future, I am very pleased to share with you that we negotiated and
entered into new bank facilities in July 2019. These new terms provide for core
facilities of up to $50 million and a working capital facility of up to $70 million. It
is important to note that very competitive terms have been struck for these
banking arrangements.

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Slide 9 – Financial performance highlights



Summarising the key financial metrics for the year ended 30 June 2019.
• Operating EBITDA was $24.4 million, down on last year’s strong result of
$34.5 million,
• Net profit after tax was a record $131.8 million,
• Earnings per share was 17.4 cents ($1.74 per share on a post-share
consolidation basis), and
• We have declared a fully imputed dividend of 7.5 cents per share, which was
paid on 2 October 2019. This brings the total fully imputed dividends paid
for the year to 15.0 cents per share on a post share consolidation basis.
The Board and I wish to acknowledge the effort and commitment of our staff,
working alongside our customers, within an environment of difficult market and
on-farm conditions to attain this result for FY2019.

Slide 10 – Chief Executive Officer’s address



It was indeed a transformational year for PGW for the business and shareholders.

Reflecting on FY2019 I think we can say it was one of the most operationally
challenging of recent years. Farmer confidence in parts of the agriculture sector

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remained subdued, constraining farm spending and therefore our revenue growth
over the year. This has also been evident in the last few months of the financial
year with a discernible tightening in the credit environment. This saw a small
increase in our overdue debtors and increased provisions taken at year-end for
doubtful debts.

As a result, PGW finished the year slightly under the lower end of our Operating
EBITDA guidance range of $25 million. On the other hand, net profit after tax
benefited from the capital gain on sale of the Seed & Grain business and at $131.8
million is a record result for PGW.

It is important to note that this Operating EBITDA result no longer includes any
contribution from the Seed & Grain business which has been reported as a
discontinued operation in our results for FY2019 and the comparative year.

Nevertheless, we’ve chosen to continue to invest in and build our business as we
plan for farm spending to recover. Notably we’ve increased the pace of our IT
spend as a number of key projects are being implemented.

We indicated in May that we expected to end the financial year near the bottom
of our Operating EBITDA guidance range given that we were cautious about trading
conditions through the last quarter. As is often the case, on farm conditions had
an influence on performance in the sector and in turn PGW, and FY2019 was no
exception.

The impact of Mycoplasma bovis (M bovis) was felt across the Livestock and the
Rural Supplies businesses. Most particularly with reduced dairy herd settlements,
a reduction in tallies, a softening of demand for dairy beef, and a more cautious
approach to spending in the dairy sector across a range of farm inputs.

Market conditions continued to challenge both our Real Estate and Wool
businesses with results down on FY2018.

Commodity prices were generally strong, especially in New Zealand dollar terms,
therefore our customers have generally enjoyed higher returns even where
production decreased. This flowed through to our Livestock and Fruitfed
businesses. Sheep and beef markets remain strong and continue to strengthen.
The horticulture sector continues to go from strength to strength (with a growing
global demand, and a growing trend of conversion of livestock farms to orchards
and vineyards in key areas across the country including Northland and
Marlborough).

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Looking back on the 2018/2019 season, production estimates are mixed compared
to the 2017/2018 season. The Ministry for Primary Industries estimates dairy
production increased, similar production levels in beef, lamb and pipfruit as
2017/2018, and reduced production in kiwifruit and wine.

Cash Flow and Debt

After paying dividends of $15 million and repaying $114 million of debt, the group
cash balance increased by $199.6 million which predominantly relates to the cash
received for the sale of Seed & Grain, leaving us with a cash balance of $210.5
million at 30 June 2019.

Net cash flow (including the Seed & Grain business) from operating activities was
a $49 million outflow. This results from investments in working capital including
investment in ‘Go’ livestock products of $8.3 million. In addition, lump sum funding
payments of approximately $10.3 million were made to the group’s Defined
Benefit Pension Scheme (Plan) to bring the Plan into actuarial equilibrium as at 31
May 2019.

Slide 11 – 2019 Operational Highlights



I’d also like to spend a few minutes talking about some of the operational highlights
we achieved over the year:
• Go Beef and Go Lamb products continue to grow strongly with the
balance peaking at $49.3 million during FY2019.
• Fruitfed Supplies continues to grow the bottom line due to the
combination of a strong horticulture sector and a leading market
position.
• To date, over 1,000 PGW employees have completed the cognitive
behavioural health and safety programme Zero Incident Process.

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Year after year, Fruitfed Supplies features in our annual operational highlights. So,
we thought it was timely to take the opportunity to share with you some more
details about this high-performing business within the Retail & Water group.

Slide 12 – Fruitfed Supplies (header slide)



We are very proud of the outstanding performance, producing year on year
growth, of Fruitfed Supplies. Therefore, it was important for us to showcase this
business at today’s meeting.

Fruitfed Supplies, part of the Retail & Water group, is a leading horticultural service
and supply business servicing New Zealand’s horticultural sector. This team
supports growers of stonefruit, pipfruit, vegetables, viticulture and sub tropicals.
In addition, we service farming and general rural supplies customers located in
areas not covered by a Rural Supplies store with the assistance of Technical Field
Representatives.

Slide 13 – Fruitfed Supplies (graph)

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Impressive performance

Fruitfed Supplies has averaged 4.9 percent revenue growth since FY2015, with
cumulative growth of 24.6 percent since 2015.

The team is very proud of this result. They have positioned the business to
continue to grow as several key crop sectors continue to invest in and, develop
further land for production.

Currently the team are working hard to ensure they deliver again in FY2020.

Technical expertise

The key strategy of Fruitfed Supplies is the provision of specialist technical
expertise, a research focus and an ongoing emphasis on innovation. As a result,
our team often become an integral part of our customers’ business.

We strongly believe that’s our point of difference and it is providing us with year
on year growth, along with an enviable market share position.

The team

The Fruitfed Supplies team of 157 comprises 48 technical horticultural
representatives, along with a national network of instore-based customer service
representatives, supported by field technical specialists and a research and
development team.

Our frontline team are committed to working alongside our customers to maximise
yields, produce quality crops, gain market access and achieve profitable returns by
assisting them to access the right products, provide quality services and make the
right decisions.

To ensure we keep up to date with the latest innovations, our teams are involved
in ongoing training programmes. In addition, some members of our team
participate in international study tours, so we continue to increase our technical
knowledge, which they in turn share with the wider team and our customers.

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Store network

This business has 15 dedicated stores located in the country’s major horticulture
regions – from Kerikeri in Northland to Cromwell in Central Otago.

But our retail network is just part of our offering. Each store is staffed by
professional, well qualified teams of customer service and field representatives
offering technical support, product knowledge and a very high standard of service
to our customers.

Research and development

In addition to our nationwide retail store network and on-farm servicing, we also
have a team dedicated to trialling and developing new products under New
Zealand conditions prior to commercial release, as well as developing spray
programmes for horticultural crops in New Zealand.

During the 2018/2019 season we undertook over 60 trials and 250 treatments
were tested pre commercialisation across the Fruitfed Supplies, Rural Supplies
and Agritrade businesses. Approximately half of these were proprietary (or new)
chemistry.

This field research gives us a first-hand view of the product, and provides us with
unbiased insight into product performance and differentiation.

Sustainability

Many of our customers have an environmental plan and are seeking to achieve a
position of zero waste in the years ahead.

To assist them in achieving their environmental goals, we are working alongside
customers and suppliers to facilitate that process, which includes activity such as
reducing plastic in packaging.

Looking forward

We are strongly committed to the horticulture sector.
In FY2019 the horticulture sector continued to go from strength to strength due to
a growing global demand for New Zealand’s premium quality products. This is a
trend we are confident will continue.

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While the growth rate declined in the F19 year, the various horticultural industry
bodies are all predicting increases for the foreseeable future, although we note the
proposed regulatory changes associated with the Healthy Waterways proposals
may have an impact on this forecast growth.

As a result, we will continue to invest in our people, our research and development,
and our facilities to ensure the Fruitfed Supplies business is well prepared to
support this sector which is going from strength to strength.

We will now move onto our financial results.

Slide 14 to 16 – Group financial results







Against this backdrop, let’s now turn our focus to the performance of our two
operating groups.

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Firstly, we will look at the Retail & Water operating group.

Slide 17 to 18 – Retail & Water





Operating EBITDA was back $4.2 million on the record result of FY2018.

The strong performer within this group continues to be Fruitfed, who along with
Agritrade increased its Operating EBITDA result on last year. Market conditions for
the horticultural sector remained positive despite some adverse conditions at key
pollination, growing and harvesting periods. The development of orchards and
vineyards around the country continue to drive revenue growth for Fruitfed.

The Agritrade business continued its growth year on year, with revenue up on the
same period last year due to product acquisition and increased distribution
services, whilst Time Capsule sales were back on FY2018 as conditions were not
conducive for facial eczema.

A factor in the reduction in Operating EBITDA for the group was a claim event noted
in our half-year results in February 2019. A settlement was reached with our
supplier that partially compensated PGW for the consequences arising from the
supply of their defective product, with a financial impact of approximately $1.8
million that was not recovered. In addition, higher petrol prices over the year also
impacted earnings in Retail & Water along with other parts of our business.

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The best performer in our Water business was Advanced Irrigation Systems (AIS).
This business had an impressive year due to an established growth strategy around
golf, landscape, sports turf and horticulture, with major developments at
prestigious sites such as the Royal Auckland and Grange Golf Club and the
Millbrook Resort near Arrowtown. The pleasing performance of AIS is set to
continue, with a number of major projects in the pipeline.

Elsewhere in the Water business, the performance continued to disappoint largely
due to a lack of on farm development. Therefore, it was deemed prudent to re-
size the Water business’s cost base. We believe that the benefits of this
restructuring will flow into FY2020.

Our investment in technology and people continues. The roll out of our new
retail point of sale system in the first quarter of FY2019, along with the team
progressing the discovery phase of the e-commerce project reflects the group’s
focus on technology.

A key aspect of the group’s strategy is its continued investment in its people -
with one of the key goals being to enhance technical expertise which in turn adds
value to customers.

Slide 19 to 20 – Agency

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Our Agency business incorporates the Livestock, Wool and Real Estate businesses,
as well as our referral commissions for insurance and finance services. Trading for
this group is weighted towards the second half of the financial year.

Agency’s Operating EBITDA was back 23.4 percent on last year with Livestock’s
performance back 7.8 percent on their strong FY2018 result, with our Wool and
Real Estate businesses continuing to face challenges in tough market conditions
throughout FY2019.

Livestock was down on earnings at the half year mark, and did not recover to the
extent expected over the second half, despite strong sheep and beef commodity
pricing and demand.

Unfortunately, the effects of a wet spring lingered, and the added impact of a dry
autumn compounded already difficult feed supply conditions across most of the
country. This delayed the finishing of sheep and cattle, with many farmers holding
onto stock through until the late-autumn and into the winter months. In addition,
the effects of M bovis were felt across the sector and impacted dairy herd
settlements and farmers trading dairy beef.

The demand for Go products continues to grow strongly, with the balance peaking
at $49.3 million during FY2019. Due to the strong appeal of this product to sheep
and beef farmers, we are considering options to grow Go products further..

Innovation continues to be a focus for the Livestock team with a major project
coming to fruition during FY2019. PGW’s new online livestock trading channel,
bidr®, was delivered to market during the last quarter of FY2019. Bidr® has the
potential to be a game-changer in the livestock trading market with strong interest
from the industry to date. In addition, digital tools for the highly mobile Livestock
team are being delivered throughout the year to keep agents up to date with the
latest market intelligence.

Our Real Estate business has been challenged by a soft rural market brought about
due to a number of factors, but particularly the changes to the application of the
Overseas Investment Act rules in October 2018 which restricts foreign investment,
along with caution in the dairy sector due to M bovis. Despite these difficult
conditions, the business completed a number of market leading sales in the
horticulture and sheep and beef sectors.

This year the Wool business was negatively impacted by continued depressed
crossbred wool prices globally, a reduction in the number of bales sold compared

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to FY2018, along with poor trading conditions for the export business. Last year’s
strong result was buoyed by the sale of stockpiled wool, whereas this year’s result
is more reflective of the subdued market of FY2017.

Slide 21 to 22 – First quarter FY2020 / Outlook





As noted earlier, with the transformational change that PGW has undergone over
the last 12 months, we believe that we are positioned well for the current financial
year and beyond.

Surveys reveal that the confidence of the agriculture sector remains low. The
impact of M bovis on dairy and beef and uncertainty regarding regulatory change
affecting agriculture have kept confidence low. More recently, the proposal to
increase the amount of capital banks are required to hold has the potential to
reduce the amount of debt capital that might be available to agriculture.
Consequently, we are seeing a more cautious approach to investment and
expenditure from our customers.

Water – The proposed National Standards for Freshwater is under active debate in
rural communities. With public submissions not yet closed and the hearing process
still to take place, a landing place on the final proposals remains unclear and we
are also working through the implications for our clients and PGW and will look to
be part of this discussion as we move through this process.

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As a leader in the Ag Sector we have been engaged in discussions with regulators
and legislators in the areas of Winter Grazing, National Animal Tagging changes,
proposed changes to the Primary ITO training provider and Wool Industry Task
Force as we look to have input into the future shape of Agriculture in New
Zealand.

With continued strong global demand for protein, and as livestock farmers and the
wider industry gain a better understanding and increased confidence in the
management of M bovis, we believe we will see the positive effect of those factors
flow through into improved trading. We are seeing confidence in the sheep and
beef sectors with strong commodity pricing.

We are also buoyed by the ongoing confidence and investment in the horticulture
sector and we anticipate that the Fruitfed business will continue to prosper as this
sector grows.

The emergence of strong Iwi based farming business is encouraging and often
unrecognised. We support these businesses through a small dedicated team
which allows us an engagement around these clients’ wider aspirations of
sustainable use of their resources, good commercial operating models, outcomes,
and governance with benefits to flow to their communities or shareholders.

However, we expect the soft global demand for crossbred wool will continue to
impact our wool business. The rural Real Estate market, which makes up the
majority of our Real Estate business, is likely to continue to be subdued in the year
ahead.

Our focus on innovation continues and we will maintain our investment in tools
to support our people and our customers. We are encouraged with the
performance of bidr® to date and we wait to see how this new online channel can
change livestock trading. Bidr® provides a unique point of difference in the online
livestock trading market place as there is a stock certification process. The stock
are independently certified as true to class and specification which is valued by
clients. We have stock support from other livestock companies who are now also
trading through this platform.

We are also looking to fully bed in our Retail team’s new point of sale system and
to progress our e-commerce project. Our e-commerce platform builds on our

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new instore point of sale system we rolled out last year and will allow customers
to transact their business in a different manner and time that suits their needs.

I have spoken about our technical research programmes in my reference to
Fruitfed Supplies. This year will see the commercial launch of four new
agricultural chemical products we have supported in our trial programmes
through our Retail network. We have in our pipeline innovative chemistry which
is a joint venture with a multi-national company. They see value in partnering
with PGW because of our technical capability and market reach and consequently
our ability to bring the product to market. Similar partnership models are under
discussion with other companies.

The development of our people is core to our success. Our people are skilled
operators in their field and we will continue to support our current team with on-
the-job technical skills, leadership programmes and a Zero Incident Harm
programme. We continue our work to develop our new talent into the
organisation through our trainee programmes and emerging leader programmes.

The Health and Wellbeing of our people and rural communities is important to us
and we have partnered with Dr Tom Mulholland who specialises in the area of
Rural Health and Mental Wellness with the Walk the Talk Wellness Tour through
20 rural regions though New Zealand. We have seen a high degree of
engagement by our staff and clients in these events which have been underway
since July.

Looking forward it is not our intention to consider major acquisitions, but rather
organic and greenfields growth.

As it is still only a few months into FY2020 its early days for spring trading to provide
firm guidance about expectations for FY2020. The Board considers that post
implementation of the corporate restructuring, we will see the benefit of cost
savings flow through progressively with savings in excess of $2.5 million expected
in FY2020, and assuming a more normal trading year and continuing confidence in
commodity prices, we expect to see PGW achieving Operating EBITDA in excess of
$30.0 million (before adjusting for the impact from the new accounting standard
for leases: IFRS16).

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Slide 23 – Strategy update



I will now provide an update on the Group strategy.

With the Seed & Grain transaction and the capital return behind us, we are
sharpening our focus on the core PGW offerings that have made the business a
key part of the New Zealand agricultural landscape for more than 160 years.

As Stephen has mentioned, our focus on innovation and our investment in
technology – including Go products, bidr®, e-commerce and the products we
bring to market in our Retail portfolio – will allow us to continue to support our
people as they work alongside farmers and producers around the country and
add value to our customers’ businesses.

The Board and management team will be reassessing our strategy and exploring
opportunities to innovate and grow our business as we continue to demonstrate
to our customers why PGW is their preferred partner for their agri-business
needs.

Following Stephen’s comments on the outlook for FY2020 it is timely to comment
on dividend expectations and provide an update following settlement of the Seed
and Grain transaction and completion of the capital distribution and share
consolidation finalised earlier this year.

Following these transactions the Board has undertook a review of PGW’s existing
dividend policy and has determined that the policy remains suitable and
appropriate. Although a decision on the interim dividend would not be made
until release of PGW’s half-year results in February, it is the expectation of the
Board that an interim dividend of not less than 8 cents per share would be
declared based on trading performance remaining within current guidance.

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We would also anticipate to be in a position to provide a further update on full-
year guidance and the final dividend expectations when announcing our half-year
results in February 2020.

Slide 24 – Questions and discussion



[Questions and Discussion]

Slide 25 – Resolutions (agenda)



The proposed resolutions will now be considered by the meeting, with all four
resolutions to be determined by a poll that will be undertaken by our share
registrar, Computershare. Our auditors, KPMG are here to act as scrutineers, if
required. The resolutions and accompanying explanatory notes are set out in the
Notice of Meeting.

The first three resolutions relate to the election of Directors; David Cushing, Sarah
Brown and myself. Our respective biographical notes are set out in the Notice of
Meeting.

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Slide 26 to 27 – Ordinary Resolution One: election of Rodger Finlay






Slide 28 to 29 – Ordinary Resolution Two: election of David Cushing

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Slide 30 to 31 – Ordinary Resolution Three: election of Sarah Brown





Slide 32 to 33 – Ordinary Resolution Four: Auditor’s Remuneration





The proposed ordinary resolution is to authorise the Board of Directors of PGG
Wrightson to fix the Auditors' remuneration for the following year for the
purposes of section 207S of the Companies Act 1993.

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Slide 34 – Move resolutions




Slide 35 – General business



Closing

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Slide 36 to 37 – Closing and thank you