2019 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

26 February 2020

SCALES CORPORATION DELIVERS RECORD PROFIT RESULT AND CONTINUING POSITIVE
MOMENTUM WITH STRATEGIC INITIATIVES

Highlights – 12 months to 31 December 2019

• Group FY2019 financial results:
o Record Group Revenues from Continuing Businesses
1
of $484.6 million, 20 per cent
above FY2018.
o Profit for the year of $121.6 million (FY2018: $45.5 million) supported by gains from
the sale of Polarcold and part-sale of Meateor’s New Zealand operations.
o Underlying
2
Net Profit of $36.4 million, 2 per cent above FY2018.
• Underlying EBITDA from the Horticulture Division of $39.7 million (FY2018: $42.6 million), an
outstanding result in light of mixed regional market returns.
• Mr Apple export volumes of 3,822k TCEs
3
in line with record 2018 export volumes (3,867k
TCEs), notwithstanding significant redevelopment.
• The Food Ingredients Division is well positioned for growth. Shelby had a positive first year
both financially and strategically, whilst the creation of a joint venture for Meateor NZ is
opening up a number of future development opportunities.

Diversified agribusiness group Scales Corporation Limited (NZX:SCL) today reported its FY2019 full
year results. Net Profit for the year was $121.6 million (FY2018: $45.5 million), a record result
supported by gains from the sale of Polarcold ($73.0 million, including interest) and part-sale of
Meateor’s New Zealand operations (giving rise to a $9.8 million gain on sale and $9.8 million
revaluation gain). Earnings per share for FY2019 were 84.2 cents per share (FY2018: 32.2 cents per
share).

Scales Corporation chairman Tim Goodacre says: “2019 marked the completion of the divestment
phase of our Strategy Refresh, with the part-sale of Meateor’s New Zealand operations to Alliance

1
FY2018 revenue does not include revenues from Polarcold and Liqueo.
2
Underlying results exclude some New Zealand International Financial Report Standards (NZ IFRS) non-cash and other
adjustments. A reconciliation between Net Profit and Underlying Net Profit, EBITDA and Underlying EBITDA is provided in
Appendix 1 of our annual results presentation pack.
3
Tray carton equivalent, a measure of apple and pear weight, defined as 18.6kg packed weight which equates to 18.0kg sale
weight.

2



Group at the end of March and settlement of the Polarcold sale in May. Scales remains committed to
reinvesting the proceeds from divestments and is making significant progress in developing both
organic growth opportunities as well as reviewing and progressing a number of prospective
acquisition opportunities.”

“Our first significant investment, being the purchase of 60% of US based petfood ingredients business
Shelby Foods in December 2018, delivered a pleasing result for its first year. Financial performance
from the acquisition was consistent with our forecasts, and good progress was made against our
strategic objectives from this investment, including development of a number of growth opportunities
for Shelby.”

“Scales produced a record profit, largely due to one-off gains on the sale of Polarcold and part-sale of
Meateor’s New Zealand operations. In addition, Scales also produced a strong Underlying result, with
Underlying Net Profit near the upper-end of previously issued guidance. This is a very satisfying
result, especially in light of the mixed regional market returns for the Horticulture division and the one-
off inventory valuation adjustment affecting the Meateor Group.”

“Mr Apple’s varietal mix, focused on premium apples to the Asia and Middle East markets, allowed it
to achieve a solid financial result. The challenges with traditional apple varieties and the European
market in particular validate our ongoing redevelopment investment away from these varieties.”

Scales Corporation managing director Andy Borland notes: “With the divestment phase of Strategy
Refresh now clearly behind us, Scales is actively progressing a number of organic growth
opportunities and acquisition opportunities for successful reinvestment of the proceeds at our return
on capital targets.”

“At Mr Apple for example, Scales expects to invest $25 million in capital expenditure through FY2020
to ensure the Mr Apple brand continues to maintain its pre-eminence in the market, including ongoing
orchard redevelopment and a new purpose built coolstore next to the existing Whakatu Packhouse.
This coolstore will not only take advantage of the latest technology to deliver improved labour
efficiency, it will also significantly cut down on truck movements – lowering both Mr Apple’s carbon
footprint as well as improving transportation efficiencies. This investment supplements nearly $16
million of capital expenditure during FY2019, for orchard redevelopment as well as a number of RSE
accommodation upgrades.”

“At 31 December 2019 Scales reported a net cash position of $104.9 million. This position includes
$159.4 million of cash and term deposits for investment. During the year Scales also declared
dividends of 19.0 cents per share
4
. As in previous years timing, the board expects to declare a final
dividend in respect of FY2019 in May, with payment in July.” Mr Borland says.

4
Scales declared a final dividend of 9.5 cents per share for FY2018 on 20 May 2019, which was paid on 5 July 2019 and
declared an interim dividend of 9.5 cents per share for FY2019 on 5 December 2019, which was paid on 17 January 2020.

3




Divisions

Horticulture
The Horticulture division delivered a solid result with Underlying EBITDA of $39.7 million in FY2019
(FY2018: $42.6 million).

Mr Borland noted that “New Zealand apple growers faced mixed market conditions during 2019 with
Europe in particular presenting adverse conditions. However, Mr Apple’s premium varietal mix and
sales network through Asia (including China) and the Middle East continued to perform strongly and
as such its overall performance was only marginally down on last year.”

“Mr Apple is actively investing in its business to improve margins and increase its breadth of premium
apple variety offerings to the Asia and Middle East markets. We are nearing the end of our second
phase of orchard redevelopment, seeing a further 175 hectares of premium orchard developed,
including significant plantings of Dazzle
TM
and Posy
TM
where we have a proprietary interest. These
new plantings are expected to begin producing significant commercial volumes from the 2022 year.
In addition, Mr Apple is pursuing investments in modern post-harvest facilities located in close
proximity to other infrastructure and optimally designed to deliver enhanced labour efficiencies,
including the new coolstore at Whakatu. These initiatives, together with future investment on-orchard
and across post-harvest operations, are anticipated to drive improvements in margin.”

“We continue to invest in our in-market branding with results showing. We’ve seen a significant
increase in the proportion of fruit sold directly through e-commerce and retail channels as well as
increased sales to China in particular.”

Food Ingredients
The Food Ingredients division generated Underlying EBITDA of $13.5 million (FY2018: $10.2 million).

Mr Borland noted “the Food Ingredients division produced a positive improvement in earnings in its
first year of its new expanded format. We expect a further improvement in performance in 2020 as
the division progresses towards its $25 million EBITDA target.”

Logistics
The Logistics division delivered a result in line with its FY2017 performance with Underlying EBITDA
of $3.3 million (FY2018: $4.9 million).

“The Logistics division, which now solely encompasses Scales’ specialist freight business Scales
Logistics, delivered a result more in line with its longer term earnings trajectory.” Mr Borland noted.

4



Outlook

Looking ahead, Mr Goodacre said “the impact on Scales and Mr Apple in particular from the COVID-
19 outbreak remains uncertain at this time. It is expected that any impact may be mitigated by:
• A more balanced global supply situation in 2020 with sales more equally focussed between
Europe / UK and Asia. Initial shipments to Asia are scheduled to arrive in early March, and to
China in mid-March.
• To date there have been no issues with shipping to non-China markets.
• There appears to be a strong pipeline of sales from the e-commerce channel in Asia,
balancing out a potential reduction of in store sales.
• Our dedicated in-house logistics operation and our agents throughout Asia remain confident
of the actions of authorities to facilitate flow of food products in particular.”

“Scales is pleased to contribute product to those impacted, through our agents, to support those
communities most affected by the COVID-19 outbreak.”

Mr Goodacre also noted “the 2020 apple harvest has already begun and early crop indications are
positive and in line with our forecast. The Logistics and Food Ingredients divisions are also trading
positively. Underlying Net Profit guidance has been reconfirmed by the Board at between $30 million
and $36 million, implying an Underlying EBITDA range of between $49 million and $55 million.”

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, Food Ingredients and Logistics. 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. Find out more at
www.scalescorporation.co.nz.

---

Scales Corporation Limited
Growing your Diversified Agribusiness
Annual Results Presentation
For the year ended 31 December 2019
26 February 2020

2
Scales Corporation Limited –2019 Full Year Results
1.Operating & Strategic Summary
2.Group Financials
3.Divisional Performance and Strategy
4.Capital Management
5.Sustainability
6.Governance and Outlook
7.Appendices
Agenda

Operating &
Strategic Summary
1

4
Operating & Strategic Summary
Scales Corporation Limited –2019 Full Year Results
•Statutory Profit for the Year $121.6m (2018: $45.5m) including gains from sale of Polarcold and part-sale of
Meateor.
•Underlying
*
NPAT $36.4m ahead of 2018 ($35.8m).
•Underlying EBITDA from the Horticulture Division of $39.7m (2018: $42.6m):
▪Outstanding result in light of mixed regional market returns. Our varietal mix and focus on premium apples, enabled our weighted
average sales price to remain firm.
▪Premium volumes now make up more than half of the crop (57% of total volume) for the first time.
▪Outstanding crop, with volumes of 3,822k TCEs in line with 2018 (3,867k TCEs) and significantly ahead of forecast (3,620k TCEs)
notwithstanding redevelopment.
▪Orchard redevelopment continues –44 hectares redeveloped during 2019 winter. A further 32 hectares scheduled for winter 2020.
•Food Ingredients retains positive momentum with further offshore opportunities:
▪Positive first year from Shelby (acquired December 2018), both financially and strategically.
▪Strong diversification of protein and geographical sources.
▪Exploring innovative opportunities for further value-add.
* Underlying Results exclude some New Zealand International Financial Report Standards (NZ IFRS) non-cash and other adjustments.Management and the Board believe that Underlying Results more
accurately demonstrate the change in operational performance of the Group. Underlying Results are shown before the deductionofshare of NPAT for Non-Controlling Interests (Fern Ridge and Shelby) of
$3.6m (2019) vs $0.4m (2018). Underlying Results for 2018 include Polarcold (full year), Liqueo (up to 1 August 2018), 100% of earnings from Meateor’s NZ business and operations, and earningsfrom Shelby
from the 20
th
of December 2018. Underlying Results for 2019 do not include earnings from Polarcold and include only 50% of earnings from Meateor’s NZ business and operations from 1 April 2019. A
reconciliation of Underlying to Reported Measures is provided in Appendix I.

5
Strength in Numbers
Scales Corporation Limited –2019 Full Year Results
5,953,000
TCEs of apples exported
*
(up 2% on 2018)
$104.9m
Net cash
(2018: $62.2 net debt)
39,438
TEU equivalents freighted
(up 12% on 2018)
19.0 cents
Dividends declared
per share
111.0 MT
Petfood ingredients sold
**
(step change resulting from acquisition
of Shelby)
3,822,000
TCEs of own-grown
apples exported
(in line with 2018)
$484.6m
Revenue
(new revenue record)
16%
ROCE
(2018: 17%)
* Mr Apple, Longview, outside growers and Fern Ridge Fresh.
** Includes 100% of volumes from Meateor NZ; i.e. total volumes controlled directly and indirectly by the Meateor Group.

6
Strategic Update –Investment
•Scales will seek to reinvest in the following focus areas:
▪Organic growth opportunities that strengthen our existing business units.
▪Acquisition growth opportunities that strengthen our existing business units.
▪Investment opportunities in new sectors where Scales can add-value or enhance an existing business through its capital resources, agri-
business experience, and export network –especially in China.
•Scales is considering a number of opportunities. Some examples include:
▪Continued orchard redevelopment and RSE accommodation investment at Mr Apple.
▪A significant post-harvest investment in a modern coolstore near Mr Apple’s Whakatu packhouse. The coolstore will take advantage of
modern technologies and be designed to deliver improved labour efficiency. The coolstore, which is expected to be operational during
the 2021 season, will achieve improved centralisation of Mr Apple’s post-harvest operations giving rise to reduced truck movements –
lowering both Mr Apple’s carbon footprint as well as improving transportation efficiencies.
▪The food ingredients division is progressing a number of organic growth opportunities both domestically and offshore to further extend
the range of added-value petfoods that this division makes available to its customers.
▪Acquisition opportunities –including opportunities that strengthen existing business units as well as opportunities in new agribusiness
sectors.
Scales remains committed to reinvesting the proceeds from the sale of Polarcold, Liqueo
and 50% of Meateor NZ
Scales Corporation Limited –2019 Full Year Results

2
Group Financials

8
Group Financial Performance
•New revenue record of $484.6m, an increase of
20% on 2018:
▪Includes full year trading from Shelby.
•Reported Profit for the Year $121.6m (2018:
$45.5m) impacted by:
▪Gain on sale of Polarcold ($73.0m, including interest).
▪Establishment of Meateor NZ (gain on sale of $9.8m and
revaluation gain $9.8m).
▪Implementation of NZ IFRS 16 Leases(net impact of negative
$1.0m)
•Underlying EBITDA of $52.7m:
▪2018 Underlying EBITDA ($67.1m) includes Polarcold (full
year), Liqueo (up to 1 August 2018), and full share of Meateor
NZ earnings.
•Underlying NPAT $36.4m, slightly ahead of 2018,
and near the upper end of previous guidance.
Strategic changes contributing to record profit for the year
Scales Corporation Limited –2019 Full Year Results
Income Statement
Reported Financials
$Millions
2019
2018
% chg.
Revenue
484.6
402.5
20%
Gross Margin
101.5
90.3
12%
EBITDA
79.9
51.7
54%
EBIT
61.8
42.5
45%
Profit for the Year
121.6
45.5
167%
Underlying Results*
$Millions
2019
2018
% chg.
Underlying EBITDA
52.7
67.1
-21%
Underlying EBIT
42.5
52.3
-19%
Underlying NPAT
36.4
35.8
2%
* Underlying Results exclude some New Zealand International Financial Report Standards (NZ IFRS) non-cash and other adjustments.Management and the Board believe that Underlying Results more
accurately demonstrate the change in operational performance of the Group. Underlying Results are shown before the deductionofshare of NPAT for Non-Controlling Interests (Fern Ridge and Shelby) of
$3.6m (2019) vs $0.4m (2018). Underlying Results for 2018 include Polarcold (full year), Liqueo (up to 1 August 2018), 100% of earnings from Meateor’s NZ business and operations, and earningsfrom Shelby
from the 20
th
of December 2018. Underlying Results for 2019 do not include earnings from Polarcold and include only 50% of earnings from Meateor’s NZ business and operations from 1 April 2019. A
reconciliation of Underlying to Reported Measures is provided in Appendix I.

9
Trends in Financial Performance
•Variation in 2019 Underlying EBITDA reflects changes in Group structure. Historic results are unadjusted
for businesses that have been sold or acquired.
Scales Corporation Limited –2019 Full Year Results
$34.8m
$38.6m
$32.7m
$35.8m
$36.4m
20152016201720182019
Underlying NPAT
$61.4m
$67.9m
$62.0m
$67.1m
$52.7m
20152016201720182019
Underlying EBITDA

10
Trends in Divisional Performance
•Stable or growing earnings from all divisions
Scales Corporation Limited –2019 Full Year Results
* Previously Storage and Logistics. Showing performance of continuing business only.
$40.0m
$45.3m
$38.9m
$42.6m
$39.7m
20152016201720182019
Horticulture
Underlying EBITDA
$7.6m
$9.2m
$8.0m
$10.2m
$13.5m
20152016201720182019
Food Ingredients
Underlying EBITDA
$1.9m
$2.3m
$3.3m
$4.9m
$3.3m
20152016201720182019
Logistics
*
Underlying EBITDA

11
Balance Sheet
•Balance sheet reflects strategic and NZ IFRS changes:
▪Divestment of Polarcold, as well as 50% of the Meateor NZ business.
▪Implementation of NZ IFRS 16 Leases,resulting in additional assets
and liabilities of ~$80m.
•Working capital changes are mostly due to the removal
of Meateor’s NZ business and operations from the group
accounts:
▪Following the establishment of the 50:50 Meateor JV with Alliance,
Scales’ share in the JV is reported as an “Investment”.
▪The removal of Meateor’s NZ business and operations has resulted in
a reduction in Inventory and Trade Creditors & Other Payables.
▪Other working capital changes due to normal variability within
continuing operations.
•Increases in Non-Current Assets also include capital
expenditure, including ongoing orchard redevelopment
and investment in RSE
*
accommodation.
Scales Corporation Limited –2019 Full Year Results
* Recognised Seasonal Employer.
Balance Sheet
$Millions20192018
Current Assets (excluding Cash)
Trade and other receivables20.622.9
Inventories26.445.4
Unharvested agricultural produce21.620.5
Other8.27.3
Assets held for sale - 97.6
76.9193.9
Current Liabilities (excluding Overdraft,
Borrowings, and Dividends Declared)
Trade and other payables(19.8)(27.3)
Lease liability(9.4) -
Other(7.2)(6.5)
Liabilities assoc. w/assets held for sale - (19.3)
(36.5)(53.1)
Net Working Capital40.4140.8
Non-Current Assets
Land and buildings at fair value96.886.7
Apple trees at fair value33.931.6
Other property, plant and equipment35.032.3
Investments, intangibles and goodwill69.650.2
Right of use asset78.8 -
Other 7.16.9
321.2207.7
Capital Employed361.6348.5

12
Balance Sheet (continued)
•Scales is ready for investment with a net cash
position at 31 December 2019 of $104.9m (2018:
Net Debt of $62.2m), comprising:
▪Cash and term deposits of $159.4m.
▪Borrowings of $54.6m (a voluntary repayment of $10m of
term debt was made during the period).
•The movement in net debt to net cash of
$167.1m reflects:
▪Proceeds from divestments
*
.
▪Investments in capex.
Scales Corporation Limited –2019 Full Year Results
* Polarcold settled May 2019, Meateor NZ settled April 2019.
Balance Sheet (continued)
$Millions20192018
Non-Current or Other Liabilities
Deferred tax liabilities(19.4)(15.6)
Lease liability(70.7) -
Other financial liabilities(4.0)(7.5)
Dividends declared(13.3)(13.3)
(107.4)(36.4)
Net Cash / (Debt)
Cash less overdraft17.4(1.0)
Term deposits142.0 -
Cash in assets held for sale - 6.7
Borrowings(54.6)(68.0)
104.9(62.2)
Total Equity359.0249.9

3
Divisional
Performance and
Strategy

14
Horticulture –Financial Performance
•Record revenue of $264.8m, up 4% on 2018.
•Underlying EBITDA of $39.7m (2018: $42.6m).
•Higher than expected Mr Apple export crop:
▪3,822k TCEs in line with 2018 volumes of 3,867k TCEs.
▪6% ahead of forecast (3,620k TCEs).
▪9% increase in external grower volumes.
▪Excellent export packout of 79% (2018: 76%).
•Margin initiatives:
▪Mitigating reduction in EBIT margin is a key focus for Mr Apple.
▪Investments on-orchard and across post-harvest facilities to
reduce inefficiency and / or increase the use of automation.
Management are working on a number of initiatives.
▪The investment in a new coolstore next to Mr Apple’s largest
packhouse. Cost efficiencies are anticipated through the use of
improved product flow and automation.
▪Mr Apple also expects to see a net improvement in margin as
fruit volumes from the Phase 2 redevelopment come online
from 2022.
Continued stability in orchard volumes notwithstanding redevelopment
Scales Corporation Limited –2019 Full Year Results
Financial Performance - Horticulture
$Millions20192018% chg.
Horticulture Revenue264.8254.64%
Underlying Horticulture EBITDA39.742.6-7%
Underlying Horticulture EBIT30.934.2-10%
Underlying Horticulture EBIT %11.7%13.4%

15
Horticulture –Own-Grown Volumes
•Excellent total own grown export crop of 3.8m TCEs, well ahead of previous guidance.
•Premium variety volumes up 14% on 2018:
▪Growth across all premium varieties, with 18% increase in NZ Queen.
▪Continued strong focus on Asia and Middle East markets.
▪First commercial crop for Posy
TM
and Dazzle
TM
varieties.
Steady export crop levels, growth in premium volumes
Scales Corporation Limited –2019 Full Year Results
536
741
1,059
1,036
1,454
1,656
1,616
1,901
2,161
1,465
1,404
1,773
1,716
1,701
1,890
1,929
1,966
1,661
2,001
2,144
2,833
2,752
3,155
3,546
3,545
3,867
3,822
201120122013201420152016201720182019
Mr Apple Own Export Volumes (TCE 000s)
Premium VarietiesTraditional Varieties
214
343
406
457
538
119
185
245
245
282
301
253
359
378
273
393
585
574
831
866
809
959
1,046
536
741
1,059
1,036
1,454
1,656
1,616
1,901
2,161
201120122013201420152016201720182019
Growth in Premium Volumes (TCEs 000s)
NZ QueenPink LadyHigh Colour Fuji & Royal GalaOther

16
Horticulture –Prices & Other KPIs
•Weighted average FOB price similar to 2018
reflecting:
▪Improved pricing for Premium Varieties, including solid
performance from proprietary varieties and brands,
particularly in Asia and Middle East.
▪Change in mix, with Premium varieties now accounting for
nearly 57% of all sales (2018: 49%).
▪Adverse market conditions in Europe affected pricing for
traditional varieties.
▪Minor, but generally favourable, movements in FX rates
achieved. With existing cover in place, similar rates as
achieved in 2019 are anticipated for the 2020 year.
•A total of 5,953k TCEs exported, up 2% on 2018.
Increased average prices for Premium Varieties
Scales Corporation Limited –2019 Full Year Results
* External grower volumes comprise external grower volumes handled by Mr Apple (1,287k TCEs) and Fern Ridge Fresh (845k TCEs)
Horticulture KPIs
Apple Prices by Variety (NZD / TCE, FOB)
20192018% chg.
Premium Varieties39.838.83%
Traditional Varieties29.332.7-10%
Weighted Average all Apples35.235.7-1%
FX Rates
20192018% chg.
NZD:USD0.670.693%
NZD:EUR0.570.582%
NZD:GBP0.480.481%
NZD:CAD0.870.86-1%
Volumes (TCE 000s)
20192018% chg.
Mr Apple own-grown volumes3,8223,867-1%
External grower volumes*2,1321,9649%
Total volume exported5,9535,8312%

17
Horticulture –Orchard Redevelopment
•Initial redevelopment (2008 to 2014)
▪Approximately 300 ha of orchard redeveloped.
▪Sales to Asia and Middle East increased from 20% to 53% between 2007 and 2015.
•Phase 2 Redevelopment (2017 to 2020):
▪Total redevelopment of around 175 ha, with a focus on Dazzle
TM
and Posy
TM
.
▪Approximately 143 ha developed over the 2018 to 2019 winters, a further 32 ha scheduled for winter 2020.
•When completed, approximately 475 ha of orchard will have been redeveloped to premium varieties.
•Mr Apple continues to:
▪Evaluate the performance of traditional varieties with a view to implementing further redevelopment.
▪Focus on increasing the depth and breadth of its premium variety offering. It is our belief that a multi-premium variety strategy is
more attractive to global retailers.
▪Focus on branding and market presence to improve returns.
▪Explore opportunities in automation and technology, both on-orchard and post-harvest.
A decade long investment
Scales Corporation Limited –2019 Full Year Results

18
Horticulture –Market Strategies
•Renewed marketing activations, and increased in-market branding initiatives,
particularly in Asia and Middle East:
▪Notable increase in volumes to these markets now comprising ~65% of export sales.
▪Move to retail and e-commerce channels, now comprising around 50% of sales (2014: 35%).
▪E-commerce sales are concentrated in Asian markets where they comprise a material
percentage of sales to those regions.
•Our presence in China continues to grow:
▪China represented 17% of Mr Apple export volumes in 2019 up from 10% in 2018.
▪Market growth is supported by our strategic shareholder China Resources Ng Fung Ltd, and
increased participation in that market by Primary Collaboration New Zealand.
▪China sales for 2019 also benefitted from a smaller domestic crop in that market. Accordingly,
sales for 2020 are expected to comprise a lower proportion of total export volumes.
•Ongoing product development and launches:
▪Posy
TM
is a very early apple which is picked in February, marketing for Posy
TM
commenced in
China mid-2019.
▪A special shipment of Posy
TM
was airfreighted to China earlier this month for immediate sale.
These apples are available to be purchased online (through platforms such as Benlai and
JD.com) as well as in selected supermarkets. Market feedback has been very positive, and
product has sold quickly, including JD.com selling out within one week.
Maximising appeal throughout the value chain –to consumers, wholesalers and retailers.
Scales Corporation Limited –2019 Full Year Results
Sales by Channel –2014 vs 2019
65%
35%
50%
48%
2%
Wholesale
Retail
E-commerce
2019
2014

19
Horticulture –Volume Outlook
•Mr Apple is nearing the end of its second phase of orchard redevelopment. Since 2017, 143 hectares of new orchard
have been developed including 78 hectares of Dazzle®.
•Further plantings of approximately 32 hectares (through the redevelopment of traditional varieties, specifically
Braeburn) are anticipated to take place over the upcoming 2020 winter for a total of 175 hectares of new plantings.
•As a result of this redevelopment, total orchard production is likely to decline slightly over the next two years. Note
that the volume forecasts shown below have been updated for actual redevelopment and movement in orchard under
management and are higher than previous long-term volume forecasts.
•Due to the increased proportion of premium varieties including Dazzle® and Posy®, the weighted average NZ FOB sale
price would increase to ~$37 / TCE by 2023F if 2019 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 –2019 Full Year Results
1,616
1,901
2,165
2,202
2,258
2,378
2,503
2,607
1,929
1,966
1,656
1,601
1,520
1,533
1,541
1,546
3,545
3,867
3,822
3,803
3,778
3,911
4,044
4,153
2017201820192020F2021F2022F2023F2024F
Mr Apple Own Export Volumes (TCE 000s)
Premium VarietiesTraditional Varieties

20
Food Ingredients
•Divisional progress:
▪The Food Ingredients division has made significant progress in diversifying
its geographical exposure and range of protein options.
▪Investment partnerships with Alliance and Shelby improve vertical
relationships and provide opportunities to consider products for further
value growth. The division is considering a number of opportunities at
present.
•Improved earnings and trading metrics from the Food
Ingredients division reflect:
▪Inclusion of Shelby results, significantly increasing divisional volumes.
▪Profitability impact of the previously announced one-off inventory
valuation adjustment.
▪Profruit sales volumes in line with 2018.
▪The division has a number of growth opportunities ahead and continues to
progress towards its long-run EBITDA target.
Food Ingredients retains positive momentum with further offshore opportunities
Scales Corporation Limited –2019 Full Year Results
20.2
23.0
27.7
29.0
111.0
20152016201720182019
Petfood Ingredients Sold (MT 000s)
Financial Performance - Food Ingredients
$Millions20192018% chg.
Food Ingredients Revenue155.183.187%
Underlying Food Ingredients EBITDA13.510.232%
Underlying Food Ingredients EBIT12.59.629%
KPIs
20192018% chg.
Food Ingredients Volume Sold (MT)110,97029,028282%
Juice Concentrate Sold (000 L)6,1706,219-1%

21
Food Ingredients –A Global Strategy
•Petfood ingredients is an attractive industry for investment:
▪Global industry now worth over US$100b* and growing strongly.
▪China market growing very strong (9.7% CAGR next 5-years).**
▪The inclusion of petfood in the latest US / China trade agreement enhances
prospects for US produced petfood.
•Scales’ global petfood strategy:
▪Actively investigating the high-growth China market.
▪Actively reviewing opportunities to expand product range, with added-value and
functional petfoods.
▪Aiming to be a key provider to a range of international petfood brand owners.
▪Continuing to seek diversification in source and range of proteins.
Developing a $25m EBITDA division
Scales Corporation Limited –2019 Full Year Results
48.4bn
72.1bn
0.0bn
10.0bn
20.0bn
30.0bn
40.0bn
50.0bn
60.0bn
70.0bn
80.0bn
199419961998200120022003200420052006200720082009201020112012201320142015201620172018
CAGR = 5.1%
Petcare expenditure in the United States
(US$b)
Source: American Pet Products Association (www.americanpetproducts.org)
* Source: Euromonitor , The State of Global Petfood : New Trends and Growth Opportunities, November 2016. / ** Source: Mordor Intelligence.
Food Ingredients Structure
Meateor
International
^^
Petfood ingredient supplier,
Australia & other markets
(100%)
Meateor NZ
^
Petfood ingredient processor
and marketer, New Zealand
(50%)
Shelby
^^
Petfood ingredient procurer,
processor and marketer, USA
(60%)
Profruit
^
Juice concentrate processor,
New Zealand
(50%)
Meateor Group
^ Equity accounted. / ^^ Fully consolidated into Scales’ financial results, with non-controlling interests deducted from NPAT.

22
Logistics
•Return to normalised trading, following a
particularly strong 2018:
▪Arranged ocean freight for the equivalent of 39,438 TEUs, up
12% on 2018.
▪Arranged 6,184 tonnes of airfreight, compared to 9,251
tonnes in 2018. 2018 airfreight tonne volumes boosted due to
initial ‘pipe fill’ orders. 2019 volumes reflect normalised sea
vs air freight dynamics and equilibrium trading conditions.
▪Increased resource in Christchurch (warehouse) and
Melbourne (sales).
•Committed to seek further opportunities for
growth, both organic and through acquisition.
122 years old and still evolving
Scales Corporation Limited –2019 Full Year Results
* For the purpose of this analysis, the 2018 comparatives show only Scales Logistics. The division changed its name from ‘Storage & Logistics’ to ‘Logistics’ following the settlement of Polarcold in May 2019.
Financial Performance - Logistics*
$Millions20192018% chg.
Logistics Revenue87.189.3-2%
Underlying Logistics EBITDA3.34.9-32%
Underlying Logistics EBIT2.94.6-37%

4
Capital Management

24
Performance Against Benchmarks
•Return on Capital Employed (ROCE) varies
between each of the individual divisions:
▪Horticulture capital employed increased by around $15m
between 2018 and 2019, mainly due to orchard
redevelopment and RSE accommodation capex.
▪Group level ROCE remains at our long-run objective level.
•ROCE remains our long-run performance measure
for continuing businesses and growth
opportunities. We expect ROCE to remain at or
about 2019 levels until redeveloped orchard
reaches maturity from 2022.
Redefining our targets
Scales Corporation Limited –2019 Full Year Results
* Food Ingredients ROCE in 2018 excludes Shelby.
** Logistics ROCE for 2018 (and 2019) is based only on Scales Logistics.
Capital Management
Return on Capital Employed
20192018
Horticulture17%21%
Food Ingredients*16%32%
Logistics**70%107%
Group16%17%
Target15%15%

25
Capital Expenditure
•Continuing to invest in growth, including:
▪Orchard redevelopment at Mr Apple -approximately 44
hectares at a cost of $5.4m.
▪RSE accommodation upgrade at Mr Apple (an investment of
$4.8m), to improve housing availability as well as the standard
of living for RSE workers.
•Excluding discontinued operations, operational
capital expenditure was slightly below 2018.
•Capital expenditure for 2020 is expected to exceed
$25m.
Investments in organic growth
Scales Corporation Limited –2019 Full Year Results
Capital Management
Operational Capital Expenditure
$Millions20192018
Horticulture3.13.5
Food Ingredients0.20.5
Logistics0.50.3
Other0.00.2
3.84.5
Growth Capital Expenditure
$Millions20192018
Horticulture11.96.5
Food Ingredients - -
Logistics - 0.4
11.96.9
Other Capital Expenditure
$Millions20192018
Discontinued Operations
(Polarcold & Liqueo) - 4.9
Total Capital Expenditure15.716.3

5
Sustainability

27
Sustainability –Environment
•Second carbon footprint certification process recently carried out at Mr Apple. Early indications suggest:
▪A slight reduction in footprint.
▪Excellent reductions in waste to landfill and electricity use.
•An EECA
*
audit at two Mr Apple sites showed excellent energy management:
▪Further saving expected as a result of a large lighting replacement scheme underway at the Hastings Coolstore site.
•We acknowledge water as a valuable resource and are continually investing to ensure we use it efficiently.
•Development of a Mr Apple Environmental Plan with all areas of the business undertaking projects to
further reduce carbon footprint.
▪A team of over 20 people meet quarterly to track progress and innovate.
▪Initial focus on the following 4 UN Sustainable Development Goals:
Reducing our environmental impact
Scales Corporation Limited –2019 Full Year Results
* Energy Efficiency and Conservation Authority.

28
Sustainability –People and Safety
•Second group-wide staff engagement survey undertaken November 2019:
▪A rise in engagement to 61% in 2019 from 56% in 2018.
▪Business units to focus on how they can engage with staff, communicate smarter and be more collaborative throughout the group.
•Leadership, bullying & harassment, and mental health awareness training undertaken in 2019:
▪Initial focus at Mr Apple, to be rolled out to other divisions during 2020.
▪Business ethics training for Mr Apple and Meateor staff undertaken October 2019.
▪Report It Now ethical hotline launched August 2019, Ethics Committee created to manage calls received.
•Significant investment in community living environment and infrastructure for our critical RSE scheme and
seasonal workers.
•Continued high level of attention to Health and Safety:
▪Mr Apple forklift training matrix refined and rolled out successfully to Scales Logistics and Meateor Foods.
▪Gains in key traffic management “hot spots” at all sites with installation of barriers, separation zones and audible proximity sensors.
▪Safety learnings and resources shared throughout Mr Apple, Fernridge Fresh, Meateor, Profruit and Scales Logistics.
It’s all about our people
Scales Corporation Limited –2019 Full Year Results

6
Governance and Outlook

30
Governance
•Two new additions to the Board in 2019:
▪Tomakin Lai –appointed January 2019.
▪Nadine Tunley –appointed February 2019.
•Tomakin and Nadine have brought complementary skills and expertise to
our Board table.
•Continued participation in the Institute of Directors’ Future Directors
programme:
▪Jemma McCowan, General Manager Marketing at New Zealand King Salmon Limited –
appointed June 2019.
Investing in our strategic leadership
Scales Corporation Limited –2019 Full Year Results
Jemma McCowan

31
2020 Outlook
•COVID-19:
▪The impact on Scales and Mr Apple in particular from the COVID-19 outbreak remains uncertain at this time. It is expected that any
impact may be mitigated by the following:
◦Mr Apple is expecting a more balanced global supply situation in 2020 with sales more equally focussed between Europe / UK and Asia.
Initial shipments to Asia are scheduled to arrive in market in early March, and to China in mid-March.
◦No issues with shipping to non-China markets have been experienced to date.
◦There appears to be a strong pipeline of sales from the e-commerce channel in Asia balancing out a potential reduction of in store sales.
◦Our dedicated in-house logistics operation and our agents throughout Asia remain confident of the actions of authorities to facilitate flow
of food products in particular.
▪Scales is pleased to contribute product to those impacted, through our agents, to support those communities most affected by the
COVID-19 outbreak.
•Horticulture:
▪Apple harvest underway, early indications suggest a crop in line with forecast.
▪Sales are anticipated to reflect a bounce back in volumes to Europe.
▪Continued investment in orchard redevelopment and RSE accommodation. Initial construction is expected to begin on the new
Whakatu coolstore in late Quarter 2 / early Quarter 3.
▪Continuing our marketing and branding efforts to drive brand awareness and loyalty in Asia.
▪Early market indications remain supportive.
Shaping our future
Scales Corporation Limited –2019 Full Year Results

32
2020 Outlook (continued)
•Food Ingredients:
▪Given specific 2019 challenges that are not expected to repeat, Scales expects a further improvement in performance from this
division in 2020.
▪Divisional entities are continuing to develop organic growth opportunities both domestically and offshore.
▪Shelby, and the division’s other petfood interests, are likely to benefit in the medium term from the inclusion of petfood inthe
recent US / China trade agreement –providing improved and faster access for these products.
▪Market demand continues to remain firm, and at this stage, we do not expect this division to be adversely affected by COVID-19.
•Logistics:
▪With our export focus, we expect to meet our trading targets.
•2020 Underlying Net Profit guidance reconfirmed at between $30m and $36m:
▪Implies an Underlying EBITDA range of between $49m and $55m, unchanged from 2019.
▪Includes lower forecasted interest income due to lower interest rates and previous interest benefit from the sale of Polarcold.
Scales Corporation Limited –2019 Full Year Results

7
Appendices
Airfreighted Posy
TM
apples for sale in a Chinese supermarket (February 2020)

34
Appendix I -Reconciliation of Underlying to
Reported Measures
Scales Corporation Limited –2019 Full Year Results
Reconciliation of Divisional Underlying Profitability to Reported Profitability
GroupHorticultureFood ingredientsLogisticsCorporate and eliminations
2019201820192018201920182019201820192018
EBITDA
Underlying52.767.139.742.613.510.23.321.1(3.7)(6.9)
Fai r val ue gai n on recogni ti on of i nves tment i n j oi nt venture9.8 - - - 9.8 - - - - -
Gai n on di s pos al of Meateor New Zeal and bus i nes s9.8 - - - 9.8 - - - - -
NZ IFRS 16 Leas es9.5 - 8.6 - 0.1 - 0.8 - 0.1 -
Equi ty s ettl ed empl oyee benefi ts(0.9)(0.8) - - - - - - (0.9)(0.8)
Meateor NZ bus i nes s di s pos al trans acti on cos ts(0.4) - - - - - - - (0.4) -
Change i n fai r val ue gai n on appl e i nventory(0.3)(0.3)(0.3)(0.3) - - - - - -
Change i n gros s l i abi l i ty for non-control l i ng i nteres ts(0.3)0.1(0.1)0.1(0.2) - - - - -
Share bas ed payments(0.1)(0.0) - - - - - - (0.1)(0.0)
Intercompany trans acti ons wi th di s conti nued operati ons0.0 - 0.01.0 - 0.8 - (0.5) - (1.3)
Di s conti nued operati ons l es s cos t to s el l - (14.3) - - - - - (15.7) - 1.4
Reported79.951.747.943.532.911.04.14.9(5.0)(7.6)
EBIT
Underlying42.552.330.934.212.59.62.915.3(3.8)(6.9)
Fai r val ue gai n on recogni ti on of i nves tment i n j oi nt venture9.8 - - - 9.8 - - - - -
Gai n on di s pos al of Meateor New Zeal and bus i nes s9.8 - - - 9.8 - - - - -
NZ IFRS 16 Leas es1.7 - 1.5 - 0.0 - 0.2 - 0.0 -
Equi ty s ettl ed empl oyee benefi ts(0.9)(0.8) - - - - - - (0.9)(0.8)
Meateor NZ bus i nes s di s pos al trans acti on cos ts(0.4) - - - - - - (0.4) -
Change i n fai r val ue gai n on appl e i nventory(0.3)(0.3)(0.3)(0.3) - - - - - -
Change i n gros s l i abi l i ty for non-control l i ng i nteres ts(0.3)0.1(0.1)0.1(0.2) - - - - -
Share bas ed payments(0.1)(0.0) - - - - - - (0.1)(0.0)
Intercompany trans acti ons wi th di s conti nued operati ons0.0 - 0.01.0 - 0.8 - (0.5) - (1.3)
Di s conti nued operati ons l es s cos t to s el l - (8.8) - - - - - (10.2) - 1.4
Reported61.842.532.035.131.810.43.14.7(5.2)(7.7)
NPAT
Underlying36.435.822.224.611.27.42.011.01.0(7.1)
Gai n on s al e of Pol arcol d73.0 - - - - - - - 73.0 -
Add back i nteres t on s ettl ement of Pol arcol d, net of tax(4.1) - - - - - - - (4.1) -
Fai r val ue gai n on recogni ti on of i nves tment i n j oi nt venture9.8 - - - 9.8 - - - - -
Gai n on di s pos al of Meateor New Zeal and bus i nes s9.8 - - - 9.8 - - - - -
NZ IFRS 16 Leas es(1.0) - (0.9) - (0.0) - (0.1) - (0.0) -
Equi ty s ettl ed empl oyee benefi ts(0.9)(0.8) - - - - - - (0.9)(0.8)
Meateor NZ bus i nes s di s pos al trans acti on cos ts(0.4) - - - - - - (0.4) -
Change i n fai r val ue gai n on appl e i nventory(0.3)(0.3)(0.3)(0.3) - - - - - -
Change i n gros s l i abi l i ty for non-control l i ng i nteres ts(0.3)0.1(0.1)0.1(0.2) - - - - -
Share bas ed payments(0.1)(0.0) - - - - - - (0.1)(0.0)
Intercompany trans acti ons wi th di s conti nued operati ons0.1 - 0.01.0 - 0.8 - (0.5)0.0(1.3)
Tax effect of other NZ IFRS adj us tments(0.4)0.10.10.1(0.5) - - - 0.00.0
Di s conti nued operati ons - Pol arcol d and Li queo - 8.2 - - - - - (7.2) - 15.3
Depreci ati on after trans fer to di s pos al - 2.4 - - - - - - - 2.4
Reported121.645.521.025.530.18.21.93.468.68.4

35
Appendix II -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 supplements our full year results announcement. It should be read subject to and in conjunction with the additional information in that release, and other
material which we have released to the NZX.
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) certain non cash NZ IFRS and other adjustments as detailed in Appendix I.
•Underlying Net Profit is calculated by adding back or (or deducting) the after-tax effect of certain non cash NZ IFRS and other adjustments as detailed in Appendix I.
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 –2019 Full Year Results

---

Results announcement




Results for announcement to the market
Name of issuer Scales Corporation Limited
Reporting Period 12 months to 31 December 2019
Previous Reporting Period 12 months to 31 December 2018
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$484,609 20%
Total Revenue $509,100 10%
Net profit/(loss) from
continuing operations
$48,575 67%
Total net profit/(loss) $121,577 167%
Interim/Final Dividend
Amount per Quoted Equity
Security
N/A
Imputed amount per Quoted
Equity Security
N/A
Record Date N/A
Dividend Payment Date N/A
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$2.19 $1.43
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the attached reports for commentary and audited
consolidated financial statements.
Authority for this announcement
Name of person

authorised
to make this announcement
Steve Kennelly
Contact person for this
announcement
Steve Kennelly
Contact phone number +64 3 3712263
Contact email address steve.kennelly@scalescorporation.co.nz
Date of release through MAP

26/02/2020

Unaudited financial statements accompany this announcement.