Almond Market Update

Goldman Sachs

8th April 2022

Disclaimer & Basis of Preparation

This presentation is provided for information purposes only and has been prepared using information provided by the company. The information contained in this presentation is not intended to be relied upon as advice to investors and does not take into account the investment objectives, financial situation or needs of any particular investor. Investors should consider their own individual investment and financial circumstances in relation to any investment decision.

Certain statements contained in this presentation may constitute forward-looking statements or statements about future matters that are based upon information known and assumptions made as of the date of this presentation. These statements are subject to risks and uncertainties. Actual results may differ materially from any future results or performance expressed, predicted or implied by the statements contained in this presentation.

Michael Iwaniw - Chairman

The Select Harvests Limited financial statements are prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001. This includes application of AASB 141 Agriculture in accounting for the current year almond crop, which is classified as a biological asset. In applying this standard to determine the value of the current year crop, the Company makes various assumptions at the balance date as the selling price of the crop can only be estimated and the actual crop yield will not be known until it is completely processed and sold. The resulting accounting estimates will, by definition, seldom equal the related actual results, and have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

This announcement has been approved by the Board of Select Harvests

Select Harvests Overview

One of the worlds largest almond growers, with a geographically diverse 9,262-hectare orchard portfolio

Company Overview

Orchard Profile

Almond Market

Growth Strategy

  • ▪ Listed on the ASX (SHV), with a market capitalisation of A$654m (6 April 2022) and 611 employees.

  • ▪ Australia's second largest almond producer and marketer with core capabilities across: Horticulture, Orchard Management, Nut

    Processing, Sales and Marketing.

  • ▪ We supply the retail and industrial markets, exporting almonds globally. Continuing to build relationships in the fast-growing markets of India and China, as well as maintaining established routes to market in Asia, Europe and the Middle East.

  • ▪ Geographically diverse almond orchards located in Victoria, South Australia and New South Wales, with a portfolio that includes more than 9,262 hectares of company owned and leased almond orchards and land suitable for planting.

  • ▪ Select Harvests weighted average almond orchard age is 13.5 years, with 100% of current planted hectares cash generative. Almond orchards remain economically viable for +25 years, providing Select Harvests with a solid foundation for long term growth.

  • ▪ Our state-of-the-art Carina West processing facility has the capacity to process above 30,000 MT of almonds in the peak season and is capable of meeting the ever-increasing demand for in-shell, kernel and value-added product.

  • ▪ The global almond market was valued at US$8.6bn in 2020/21. The U.S. (California) accounted for 79% of world production in 2020/21, followed by Australia and Spain at 7% each. Australia has more than doubled its almond production in the last 10 years.

  • ▪ The underlying fundamentals of our business remain strong. Demand for almonds, both in their natural form and as a value-added food ingredient, in products such as plant-based milks and yogurts, continues to grow.

  • ▪ Australian Year on Year (March - January) almond exports are up 14%, with the South/Central Asia (India) market up 44%, and the Northeast Asia (China) market up 35% during the period.

  • ▪ Select Harvests remains well positioned through its low operating costs, ability to deliver large scale value-added production and strong balance sheet to benefit from the growing global demand for almonds.

  • ▪ Our investment in greenfield developments and orchard acquisitions, including the December 2020 acquisition of the 1,566-hectare Piangil Almond Orchard, will platform long term growth.

  • ▪ We continue to assess opportunities to increase our almond production base through acquisitions, if suitable orchards become available.

Almond Growing a Closed Loop

120,000MT* Biomass

10,000MT Inshell Exported

10,000MT Biomass Energy Plant

* Based on 2021 quantity, estimated volume

50,000MT Stockfeed

20,000MT Kernel Sales

Crop Update & India FTA

Select Harvests

  • ▪ Harvest is forecast to finish late April, subject to the favourable climatic continuing, following a slow start due to adverse weather conditions.

  • ▪ 60% of the forecast crop has been harvested.

  • ▪ 35% of the forecast crop has been delivered to the Carina West processing facility.

  • ▪ 18% of the forecast crop has been processed.

  • ▪ Initial quality is as expected, inshell yields are down.

  • ▪ The sorting and packing upgrade has been completed and is operating at or above business case.

  • ▪ At this early stage of the harvest and marketing program there is no change to our price or crop estimate.

  • ▪ 1HFY22 Results announcement May 27th.

United States Update

  • ▪ Pollination is complete and harvest will commence in August.

  • ▪ Significant frost in Northern growing region.

  • ▪ Current snowpack 31% of average.*

  • ▪ Precipitation 60% of average.*

  • ▪ United States Department of Agriculture Subjective Forecast will be 12th May 2022

Indian Free Trade Agreement

  • ▪ An Australia-India Free Trade Agreement has been proposed, details are yet to be confirmed

  • ▪ Current tariffs to be reduced by 50% − Inshell Rs 35 to Rs 17.5 (0.31/kg) − Kernel Rs 100 to Rs 50 (0.88/kg)

  • ▪ 34,000MT annual volume cap.

  • ▪ Commencement date to be advised

*https://cww.water.ca.gov/

Market outlook is positive, at this early stage of our harvest & marketing program there is no change to our price or crop estimate

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Select Harvests Limited published this content on 07 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 April 2022 23:18:04 UTC.