Seeka provides Analyst Briefing Pack

Analyst Briefing Pack
Annual results presentation
Year ended 31 December 2019 - Audited

Agenda
2
5
Appendices
4
Operating segments performance
3
Capital management
2
Financials
1
2019 highlights

2019 Highlights

Focus on achieving excellence
Progressed growth strategy
Invested in capacity, consolidating Northland operations, and acquired a new core business
$37.3m invested in New Zealand post harvest capacity in Northland and Te Puke
$15.9m Kerikeri new packhouse and machine in growth region | $21.4m Oakside machine upgrade and extra coolstore capacity
$34.6m sale of Northland orchards reduces debt with secure supply commitment
$27.1m of assets held for sale expected to settle FY20 available to further reduce debt
$24.5m Aongatete acquisition completed prior to harvest 2019 – $14m for shares and assumed $10.5m of debt
Accretive core business acquisition building volume and capacity
Grower loyalty share scheme
Share issue rewarding secure supply
Focus on consolidating the business
Management structure reset| Asset held for sale process reduces debt| Acquired business integrated and synergies targeted| SeekaFresh revitalised
Australian kiwifruit orchards sale and leaseback project initiated
Long lease period to secure supply| Funds to accelerate growth | Reduce debt
1
2
3
4
5
4
6
7

Financials

New NZ IFRS16 Leases standard implemented FY19, with FY18 results restated.
Group financial performance
$236.9m record revenue
Up 16% on 2018
−Revenue growth in orcharding and post harvest
$34.5m EBITDA
Up 4% on 2018 ($33.3m)
−EBITDA exceeds October guidance ($32.5m ~ $33.5m)
$6.9m Net profit after tax
Up 3% on 2018 ($6.7m)
All results and comparatives consistent with
NZ IFRS 16 Leases
6
20192018Growth
NZD millionsRestated
Revenue236.9 203.7 16%
Cost of sales189.4 158.0 20%
Gross profit47.5 45.8 4%
EBITDA34.533.34%
EBIT17.617.32%
Net profit after tax6.96.73%

Trends in financial performance
EBITDA and NPAT
New NZ IFRS16 Leases standard implemented FY19, with FY18 results restated.
The new standard added $6.9m to Group EBITDA FY19 and $7.1m to the restated FY18 EBITDA. It reduced Group NPAT by $1.2m FY19,and by $0.7m to the restated FY18 NPAT.
19% CAGR
using pre NZ IFRS16
comparative EBITDA
for FY19
Pre NZ IFRS16
comparatives for
FY18 and FY19
$13.9m
$24.8m
$23.1m
$33.3m
$34.5m
$26.2m
$27.6m
20152016201720182019
EBITDA
7
$7.4m
$8.1m
$4.3m
$10.4m
$5.8m
$6.7m
$6.9m
20152016201720182019
NPAT
Pre NZ IFRS16
comparatives for
FY18 and FY19
Reported NPAT
17% CAGR
using pre NZ IFRS16
comparative NPAT for FY19

Trends in operating segment performance
EBITDA – reported and pre NZ IFRS16 comparatives for FY18 and FY19
1. FY15 to FY17 EBITDA comparatives are prior to the implementation of NZ IFRS 16 Leases.
2. FY18 and FY19 EBITDA are reported after the implementation of NZ IFRS 16 Leases, with the pre NZ IFRS 16 results also shown to provide 5-year comparisons.
Pre NZ IFRS16
comparatives for
FY18 and FY19
Pre NZ IFRS16
comparatives for
FY18 and FY19
Pre NZ IFRS16
comparatives for
FY18 and FY19
Reported EBITDA
Reported EBITDA
8
Reported EBITDA
$4.0m
$5.6m
$6.4m
$4.2m
$5.0m
$3.4m
$3.6m
20152016201720182019
Orcharding EBITDA
$54m assets
$13.3m
$26.8m
$22.0m
$37.2m
$41.0m
$32.1m
$35.1m
20152016201720182019
Post harvest EBITDA
$223m assets
$1.7m
$1.9m
$2.9m
$2.3m
$1.7m
$1.6m
$1.3m
20152016201720182019
Retail services EBITDA
$11m assets
($1.4)m
$1.0m
$2.3m
($0.1)m
($0.6)m
20152016201720182019
Australia EBITDA
$52m assets

Capital management

All results and comparatives comply with NZ IFRS 16 Leases. Values may not always sum due to rounding.
Balance sheet
$59.2m increase in capital employed in 2019
$40.3m increase in PP&E
−Acquisition of Aongatete prior to harvest 2019
−Post harvest capacity investments
−$21.4m Oakside coolstore and packing machine upgrade
−$15.9m Kerikeri packhouse and grader build
$12.0m increase in lease assets
−Investing in New Zealand kiwifruit and avocado
production
$2.9m increase in assets held for sale
−$34.6m of orchard sales completed in 2019
Post harvest capital expenditure normalises in 2020
Australian kiwifruit orchard sale and leaseback project
initiated
Capital employed 31 December
20192018Growth
NZD millionsRestated
Current assets - excludes cash
Trade and other receivables28.3 18.4 54%
Biological assets -crop18.6 17.9
Assets held for sale27.1 24.2
Inventories and water rights6.3 5.2
80.3 65.6 22%
Current liabilities - excludes debt
Trade and other payables(22.9)(19.2)19%
Lease liabilities(5.2)(4.0)30%
Tax(1.7)(0.0)
(29.9)(23.2)29%
Net working capital50.5 42.519%
Non current assets
Property, plant and equipment220.4 180.1
Right of use lease assets44.7 32.7
Intangibles and other20.0 21.2
285.1 233.9 22%
Capital employed335.6 276.4 21%
10

116.8
84.7
32.1
Net bank debt
Dec 19
Orchard assets
held for sale or sold
Debt after
orchard sales
All results and comparatives comply with NZ IFRS 16 Leases. Values may not always sum due to rounding.
1. Comprised of $27.1m of assets held for sale (FY18: $24.2m) and $5.0m of related debtors (FY18: $1.7m).
Balance sheet
$116.8 net debt at December 2019
−$37.7m increase on December 2018
−Down $31.3m from peak of $148.1m June 2019
−Will further reduce with orchard sales
Net bank debt and orchard assets held for sale
NZD millions
Net debt 31 December
20192018Growth
NZD millionsRestated
Non current liabilities - excludes debt
Lease liabilities(45.3)(32.9)38%
Deferred tax(17.8)(15.0)
Derivatives(0.8)(0.3)
(63.9)(48.2)33%
Cash(2.8)(1.3)
Borrowings119.6 80.4 49%
Net bank debt116.8 79.1 48%
Total equity154.9149.34%
Total borrowings116.879.1
Net bank debt excluding assets held for sale
1
84.753.2
EBITDA multiple - pre NZ IFRS16 Leases3.07x 2.03x
EBITDA multiple - reported2.45x 1.60x
Net bank debt funding of business operations
11
1
1
3.38x
EBITDA : Debt
2.45x
EBITDA : Debt
100% funding
of crops
100% funding of
orchard assets
held for sale
30% funding of
the $220m of
fixed assets
2019
$116.8m debt
$32.1
$18.6
$66.1
100% funding
of crops
100% funding of
orchard assets
held for sale
20% funding of
the $180m of
fixed assets
2018
$79.1m debt
S35.3
$17.9
$25.9

EPS excludes $0.04 from gain on sale of an orchard under NZ IFRS 16 Leases.
Earnings per share and dividends
22 cents earnings per share
Earnings impacted by lower Hayward yields
Increase in shares with capital raise
−11.7m November 2018 capital raise
−2.6m April 2019 share schemes
12 cents per share dividend – year end 2019
−8 cents normal (Board policy pre NZ IFRS 16)
−4 cents from $10.1m of orchards sold in 2019
−Paid 17 April – record date 20 March
−Dividend reinvestment plan with 2% discount
−Fully imputed
−24 cents paid over last 12 months
12
Earnings and net tangile assets per share
20192018
Restated
Net profit ($m)$ 6.9 m $ 6.7 m
Weighted shares on issue (m)31.3 m 19.9 m
Earnings per share$ 0.22 $ 0.33
Net tangible assets$146 m $141 m
Shares at year end32.1 m 29.3 m
Net tangible assets per share$ 4.55 $ 4.82

Grower and employee share schemes
Shareholders approved grower loyalty share scheme
2.06m shares issued based on crop
−Rewards growers for loyalty
0.57m shares issued for employee share scheme
Schemes benefit all stakeholders
Rewards grower and employee loyalty
Raises new capital over three years
Adding $12.5m of new capital while strengthening relationship with growers and employees
Share schemes - Grower and employee
SharesValue
Millions
$m
Grower share scheme2.1 m $ 9.8 m
Employee share scheme0.6 m $ 2.7 m
2.6 m $ 12.5 m
Less received in 2019$ 0.3 m
Current share value to be raised by the schemes
$ 12.2 m
13

Operating segment performance

Financial performance -Orchard operations
20192018Growth
NZD millionsRestated
Revenue72.4 52.8 37%
EBITDA - as reported5.0 4.2 19%
Impact of NZ IFRS16 Leases1.4 0.8
EBITDA - pre NZ IFRS16 Leases3.6 3.4 6%
EBIT3.7 3.3 13%
Segment assets54.2 39.0 39%
Crop grown- class 1 trays grown (millions)
Total kiwifruit trays grown - all varieties11.4 10.7 7%
Hayward trays (millions)7.1 7.3 (3%)
Hayward yields - average per hectare9,800 11,800 (17%)
SunGold trays (millions)3.9 3.1 26%
SunGold yields - average per hectare13,390 14,535 (8%)
Other trays (millions)0.4 0.3
New NZ IFRS16 Leases standard implemented FY19, with FY18 results restated.
Orchard operations
Record orchard revenue of $72.4m –up 37% on 2018
Revenue growth from lift in kiwifruit pricing
SunGold orchards entering full production
Addition of orchards with Aongatete acquisition
Invested in new long term leases
Developing kiwifruit and avocado orchards on long-term
leased land
−Term partnerships with land owners
−Generate new income streams from 2020
Growing kiwifruit, avocado and kiwiberry for New Zealand orchard owners
15

New NZ IFRS16 Leases standard implemented FY19, with FY18 results restated.
Values may not always sum due to rounding
Post harvest operations
Record post harvest revenue of $140.1m – up 13% on
2018
Growth from Aongatete acquisition
−Complementary business in our kiwifruit heartland
−Synergies scheduled from 2020
−Acquisition completed immediately prior to harvest
Lower Hayward kiwifruit yields across the industry
−Less volume to post harvest
−Partly offset by ongoing growth in SunGold production
Segment assets developed to handle 2020 and 2021
volume growth
Packing, coolstoring and shipping kiwifruit, avocado and kiwiberry for New Zealand orchard owners
Financial performance - Post harvest operations
20192018Growth
NZD millionsRestated
Revenue140.1 123.8 13%
EBITDA - as reported41.0 37.2 10%
Impact of NZ IFRS16 Leases5.9 5.1
EBITDA - pre NZ IFRS16 Leases35.1 32.1 9%
EBIT29.4 27.0 9%
Segment assets222.9 165.4 35%
Crop– class 1 trays packed (millions)
Hayward – Seeka15.619.2(19%)
Hayward - Aongatete packhouse1.8-
Total Hayward class 117.419.2(9%)
SunGold - Seeka12.710.818%
SunGold - Aongatete packhouse1.7-
Total SunGold class 114.410.833%
Other fruit - includes class 2 Seeka & Aongatete1.71.4
Total packed – class 1 and 233.531.47%
16

New NZ IFRS16 Leases standard implemented FY19, with FY18 results restated.
Retail services operations
Retail services revenue of $8.6m – down 25% on 2018
Reduced kiwiberry volumes (dry summer) and avocado
volumes
EBITDA of $1.7m –down 26% on 2018
Business revitalised in 2019
Significant improvement late 2019
−Trading turnaround Q4
Growth in retail services set to continue in 2020
Marketing fruit from post harvest operations, retail and ripening imported fruit, and Kiwi Crush production
Financial performance -Retail services operations
20192018
NZD millionsRestated
Revenue8.6 11.5 (25%)
EBITDA1.7 2.3 (26%)
Impact of NZ IFRS16 Leases0.4 0.7
EBITDA - pre NZ IFRS16 Leases1.3 1.6
EBIT1.1 0.2
Segment assets11.2 13.3 (16%)
17

New NZ IFRS16 Leases standard implemented FY19, with FY18 results restated.
Australian operations
Revenue of $11.6m –down 22% on 2018
Hot, dry growing conditions impact yields – down 27%
Planted areas being reset to match market
opportunities
Investing in new Club pear varieties – Rico
Establishing other new varieties
Kiwifruit orchards marketed for sale and leaseback
Includes long-term supply commitment
Growing, packing and retailing kiwifruit, nashi pears, and European pears on owned orchards
Financial performance -Australia operations
20192018
NZD millionsRestated
Revenue11.6 14.9 (22%)
EBITDA(0.6)(0.1)
Impact of NZ IFRS16 Leases0.0 -
EBITDA - pre NZ IFRS16 Leases(0.7)(0.1)
EBIT(2.1)(1.4)
Segment assets52.2 49.2 6%
Crop– grown, packed and sold
Kiwifruit (tonnes)1,797 2,570 (30%)
Nashi (tonnes)928 1,250 (26%)
Pears (tonnes)1,358 1,799 (25%)
Other fruit (tonnes)89 29
Total tonnes grown, packed and sold4,172 5,648 (26%)
18

Appendices

Impact of NZ IFRS 16 Leases
EBITDA
Seeka has fully adopted NZ IFRS 16 Leases (NZ IFRS 16 -the new NZ accounting standard for leasing arrangements), and these 2019financial results and 2018 comparatives are consistent
with the new standard. The transition to NZ IFRS 16 negatively impacts Seeka's financial results as the accounting for lease int erest costs and depreciation are higher than the lease payment at
the beginning of the lease period. Further the full gain on orchard sales is no longer recognised in the statement of financial performance when the property is leased back to Seeka.
New ZealandAustraliaGroup
OrchardPost harvest
Retail
services
All other
segments
Australian
operationsTotal
New Zealand dollars$000s$000s$000s$000s$000s$000s
2019
EBITDA pre NZ IFRS 163,62735,1141,265(11,731)(662)27,613
Capitalised lease costs1,3605,870408533358,206
Gain on sale and lease back---(1,300)-(1,300)
EBITDA after applying NZ IFRS 16 – as reported4,98740,9841,673(12,498)(627)34,519
2018
2018 - EBITDA pre NZ IFRS 163,41632,0951,632(10,867)(59)26,217
Capitalised lease costs7895,062705528-7,084
EBITDA after applying NZ IFRS 16 – as reported4,20537,1572,337(10,339)(59)33,301
20

Impact of NZ IFRS 16 Leases
Net profit after tax
Seeka has fully adopted NZ IFRS 16 Leases (NZ IFRS 16 -the new NZ accounting standard for leasing arrangements), and these 2019financial results and 2018 comparatives are consistent
with the new standard. The transition to NZ IFRS 16 negatively impacts Seeka's financial results as the accounting for lease int erest costs and depreciation are higher than the lease payment at
the beginning of the lease period. Further the full gain on orchard sales is no longer recognised in the statement of financial performance when the property is leased back to Seeka.
FY19FY18
New Zealand dollars$000s$000s
NPAT pre NZ IFRS 168,1147,418
Adjustments relating to NZ IFRS 16(1,230)(767)
NPAT after applying NZ IFRS 16 - as reported6,8846,651
21

Contact
Michael Franks
Chief executive
+64 21 356 516
22
For more information see www.seeka.co.nzor please call
Stuart McKinstry
Chief financial officer
+64 21 221 5583

seeka.co.nz