Covid-19 Update

2 September 2020


NZX Continuous Disclosure

Sanford Sees Ongoing Challenges in Foodservice Markets Impacted by Covid-19, Remains
Confident in Long-term Strategy

New Zealand seafood company Sanford Limited (NZX: SAN) says volatility in global markets, as a
result of Covid-19, is an ongoing challenge for the significant foodservice component of its business.
But the company says it is making good progress on the strategic changes needed to meet the new
market conditions.
Sanford has outlined the impact of Covid-19 in an update for the market today: sales revenue for
product harvested by the company was down 15% for the third quarter of FY20 versus the previous
year.
CEO Volker Kuntzsch says lockdowns around the world have had an inevitable effect.
“In many of our major markets, seafood is typically consumed out-of-home and the lockdowns
unavoidably impact on restaurants, hotels and any eating occasions where there is a need for social
distancing.”
The company has seen the impact most in its fisheries portfolio, where commodities like squid have
suffered from price and volume reductions and hoki production had to return to a fillet block focus
for retail, reversing the previously undertaken shift to higher value fillet production for foodservice.
However, Mr Kuntzsch says there are encouraging bright spots for New Zealand’s largest seafood
company.
“Our aquaculture business fared better during most of this period and we can see our long-term
strategy to move our focus up the value chain is working, because this business unit continues to
outperform prior years. However, even that is not meeting our ambitious pre-Covid expectations
despite the pockets of growth we are seeing. The changes we are making will pay off, but it will take
some time to see the benefits.
“Until recently Sanford did not have a directly employed representative in some of its larger
markets, but we are addressing this by making rapid adjustments to our sales team and appointing
partners who are more focused on retail. And despite the challenging environment, we are
confident that our focus on innovation, branding, getting closer to the consumer via sales channel
and market diversification and new product formats will deliver the results we want and a valuable
and sustainable world-class seafood business for the medium and long term.”
While these steps are being taken to mitigate the ongoing impacts from Covid-19, Sanford
acknowledges the outlook remains challenging and its short-term expectations are subdued.
CFO Katherine Turner says “for Q4 of FY20 we are currently expecting a similar revenue drop versus
last year as we have seen in the third quarter of around 15%. In the meantime, our production
remains strong and our inventory levels, while manageable, are increasing, which will lead to margin
being pushed into the 2021 financial year.

“Our balance sheet is strong, and we have considerable headroom in our borrowing facilities.
“Forecasting with certainty is always difficult in the seafood business, and Covid-19 has made that
harder than usual. However, we have confidence in our strategy to deliver improving results in the
medium and long term.”
Mr Kuntzsch says there have been upsides to the challenges of 2020.
“As demanding as this year has been for all involved, it has also provided opportunities to refocus
and re-prioritise. Operationally we are performing well and all our people are highly engaged and
working hard to help Sanford adjust to a new normal.”

For more information please contact:
Katherine Turner
Chief Financial Officer, Sanford
kturner@sanford.co.nz
021 470 436

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Important Notice
This presentation contains not only a review of operations and information about Sanford Limited (the Company), but also contains some forward-looking statements about
the Company and the environment in which it operates. This disclaimer applies to this presentation and any written or verbal communications in relation to it.
Information has been prepared by the Company with due care and attention. However neither the Company, nor any of its directors,employees or shareholders nor any other
person gives warranties or representations (express or implied) as to the accuracy or completeness of this information. To the maximum extent permitted by law, none of the
Company, its directors, employees, shareholders or any other person shall have any liability whatsoever to any person for anyloss (including, without limitation, arising from
any fault or negligence) arising from this presentation or any information supplied in connection with it.
This presentation contains financial information taken from management accounts and from the Company’s results for the six months ended 31 March 2020. That information
is not audited and has not been reviewed by the Company’s external auditors. Following the audit process, financial information in this presentation may change when
presented for the year ended 30 September 2020.
This presentation also contains forward-looking statements regarding a variety of items. Such forward-looking statements are based on current expectations, estimates and
assumptions and are subject to a number of risks, and uncertainties, including material adverse events, significant one-off expenses and other unforeseeable circumstances,
including further impacts from COVID-19 on the Company. There is no assurance that results contemplated in any of these forward-looking statements will be realised, nor is
there any assurance that the expectations, estimates and assumptions underpinning those forward-looking statements are reasonable. The Company’s actual results may differ
materially from the forward-looking statements in this presentation. No person is under any obligation to update this presentation at any time after its release. Investors are
strongly cautioned not to place undue reliance on forward-looking statements.
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.
This presentation should be read in conjunction with the material previously published by Sanford Limited.
The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. The presentation does
not constitute an offer to sell, or a solicitation of an offer to buy, any security and may not be relied upon in connection with the purchase or sale of any security. Nothing in
this presentation constitutes legal, financial, tax or other advice.
DISCLAIMER
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Please note : All financial metrics provided in this document are management figures and are unaudited.

•Overview and challengesVolker Kuntzsch
•Financial position and performanceKatherine Turner
•Mitigations and Strategic Focus Volker Kuntzsch
•Q&A
Sanford and the Impact of Covid-19 –September 2020 Update
INNOVATION
FRESHSALMONMUSSELSFROZEN
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Covid-19 Trading Update -Overview
•International markets remain volatile with
foodservice channels seriously impacted and
only partially replaced by retail demand
•Sanford’s Q3 sales revenue down 15% on PY
(excluding product caught by fishing partners)
•Operationsperformed well during lockdown
and H2 generally
•Actions are in place to combat downturn,
focusing on developing markets and alternative
channels, moving emphasis from foodservice
to retail and online

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Challenging Market Conditions Due to Covid-19
•Supply chain interruptions including border and freight issues
•Price pressure on seafood commodities
•Consumer fear, association of virus with fish/packaging
Sales revenue is volatile
Sales % vs LY ($ million)Q3July
Total (excluding Fishing Partners)-15 %+ 2 %
Wild-catch (excluding Fishing Partners)-33 %+7 %
Mussels+ 9 %-36 %
Salmon+ 2 %+ 27 %
10 months -July YTD
-8 %
-20 %
+ 8 %
+ 6 %
Total sales revenue vs LY for Q4 potentially similar or worse than Q3 (-15%),
but forecasting is more challenging than usual due to Covid-19 uncertainties

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Strategy and Financial Strength to Weather Covid-19
•Strong balance sheet (July FY20 gearing 22%) and cash collection
remains satisfactory
•Sufficient headroom in borrowing facilities and have additional levers
if required to withstand shocks (July FY20 headroom $98 million)
•Ongoing liquidity scenario planning
•Capital spend has been slowed to approx. $45 to $50 million for FY20
and for FY21 we maintain a watching brief
•Cost measures are in place to adapt to the economic volatility and
provide some assurance for the year ahead
•Hiring is on hold and remuneration under review
•Reduction in all discretionary expenditure

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FY20 Result Significantly Impacted by Covid-19
•While aquaculture (salmon and mussels) is
doing well compared to last year, these areas
will fall short of pre-Covid expectations
•Improved second half fishing, but commodity
sales are impacted and there will be a deferral
of margin into next year through product in
inventory. This includes Patagonian toothfish,
usually sold in Q4, which we are deferring to
2021 to achieve greater value in exports
Overall, our pre-Covid expectations are not
being met, even though pockets of growth are
visible, the landscape remains very challenging

Existing strengths and weaknesses in a Covid-19 environment
Operational excellence
Already focused on moving up the value chain, closer to consumer
Branding and Innovation teams in place and already adapting
XFoodservice focus, very limited retail presence
XVery limited Sanford feet on the ground internationally
Actions to limit impact and build resilience
•Adjusted operations, e.g. moved back from hoki fillet to block production
•Restructuring sales function to align to a clear global strategy and enable the necessary change in sales
focus to offset patchy recovery in foodservice
•Progressing our plans to pivot to online and in-store retail
•Developing new product formats (some will take time)
•Utilising the diversity of our markets, strength of our relationships and support of organisations like NZTE
•Managing higher inventories through robust sales and operational planning processes
•Implementing cost reduction and control measures
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Strategy and Actions

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FY21 Outlook: likely challenging and tough to predict.
However pockets of growth and our operational excellence
give us confidence in our strategy, customers and our
people to deliver improving results through this
unprecedented period.
Opportunities
•Ongoing: New Zealand seafood’s image internationally as healthy and sustainable protein
•Short term and beyond: seeing market resilience in NZ, AUS and many parts of Asia
•Short term and beyond: domestic seafood gains in retail
•Medium and long term: channel and market diversification globally
•Longer term: growing presence in nutraceuticals across markets and channels
Outlook

Thank you!
Questions?