Tassal Grup Limited 1H15 Results Mark Ryan, Managing Directr & CEO Andrew Creswell, Chief Financial Officer 12 February 2015
1H15 Overview Cntinued grwth driving mre acceptable return levels
Key themes frm 1H15 Sales initiatives and perating efficiencies driving cntinued earnings grwth Sustainably generating mre $/kg and $ frm dmestic market sales dmestic marketing campaign cntinues t build brand and drive sales Very strng fish bimass grwth cupled with excellent feed cnversin rati (FCR) perfrmance and survival allwing perating cst efficiencies and a risk mitigant t rising feed prices (i.e. imprving FCR) Operating EBITDA $/Hg Kg A$m Operating EBITDA Op EBITDA/Hg KG A$/kg 60 $3.24 $3.38 4 $2.55 $2.60 40 $2.30 3 37.1 2 20 26.1 28.6 31.8 23.9 1 0 0 1H11 1H12 1H13 1H14 1H15 Gearing (net debt/equity) Strng balance sheet and grwing dividend Cntinued strength in balance sheet and reduced gearing Cntinued t generate strng cash flws, with the fcus n maximising perating cash flw frm the business, tgether with apprpriate use f its funding facilities t ensure apprpriate investment in fish grwth and a respnsible capital spend t underpin sustainable grwing lnger term returns Cntinued grwth in dividend ttal dividend up 27.3% t 7.0cps (50% franked) [1H14: 5.5cps] 15% 10% 5% Return n Assets 9.0% 9.3% 9.9% 11.7% 12.5% and mving clser twards mre acceptable return levels 0% 1H11 1H12 1H13 1H14 1H15 3
Strng financial perfrmance Earnings grwing faster than revenue A$m 40 20 23.9 Operating EBITDA 26.1 28.6 31.80 37.1 0 1H11 1H12 1H13 1H14 1H15 Cntinued strength and grwth in balance sheet and dividend Grwth in underlying fish bimass (i.e. bilgical assets) t ensure fish supply Bilgical Assets Gearing Rati (net debt/equity Funding Rati (net debt + RPF/equity) Maximise perating cashflw, tgether with apprpriate use f funding facilities t ptimise fish grwth and a respnsible capital spend t ensure apprpriate lng term returns 4
Zer harm Zer Harm Fr Everyne, Everywhere Tassal s safety perfrmance is imprving but until it delivers its cre value f Zer Harm Tassal will rank itself at an unacceptable level Key develpments ver 1H15: 12 f 13 peratinal sites (92%) achieved Zer Harm targets (1H14: 64%). satisfactry results achieved n all previusly established lead & lag indicatrs frm a safety perspective. All indicatrs are trending in right directin AS 18001 & 4801 accreditatin maintained the Cultural prgram prgress supprted by an external survey which cnfirms Tassal s jurney t interdependence is n track - but nt yet cmplete KPIs 1H14 FY15 Target 1H15 Zer Harm LTIFR 3.50 1.38 0.64 0 Incident rate 0.60 0.25 0.12 0 ATLR 9 3 1 0 MTIFR Screcard measure 38.8 35 35.2 30 93.7% 93% 94.4% 92% 5
Financial perfrmance Andrew Creswell
1H15 perating NPAT Key drivers $ variance Sustainably generating mre $ $'000 35,000 30,000 25,000 1H14 Operating NPAT v 1H15 Operating NPAT 17,028 (2,739) (1,069) 20,000 15,000 15,304 (5,034) (1,017) (1,830) (1,412) 413 (1,243) 18,400 10,000 5,000-7
1H15 perating NPAT Key drivers $/TSV kg variance Sustainably generating mre $/kg $/KG 1H14 Operating NPAT v 1H15 Operating NPAT 2.00 1.80 1.60 1.40 1.56 0.04 (0.02) (0.01) 0.11 0.07 (0.05) (0.05) 0.07 (0.05) 1.68 1.20 1.00 0.80 0.60 0.40 0.20 - Nte 1. Ttal Sales Vlume Hg Equivalent ( TSV ) fr 1H15 is 10,981 hg tnnes (1H14: 9,827 hg tnnes) 2. $/TSV kg variance per revenue and expense item is calculated by dividing the specific revenue and expense item $ variance by TSV 8
Strength in cash flws Operating cash flw dwn 34.6% t $18.93m Funds frm peratins and financing predminantly underpinning fish grwth: sustainable cntributin margins cntinue t be generated frm dmestic market sales at the same time we are fcused n ptimising fish perfrmance cashflw frm peratins and financing predminantly utilised t fund fish grwth f $14.49m effective use f RPF Investing cash flw dwn 10.9% t $(18.36)m. Frecast cash capex spend $37m fr FY15 Financing cash flw at $6.62m up 229.3% frm $(5.12)m cmprising payment f dividends f $(8.81)m and prceeds frm brrwings $15.43m 9
Strng balance sheet Bilgical Assets Bilgical Assets Strng fish perfrmance resulting in slid gains in bimass grwth and perating cst efficiencies Value f live fish up 21.1% t $215.38m (1H14: $177.9m) Inventry Requisite bilgical asset pipeline fr future revenue and earnings grwth supply in place t cntinue t stimulate current and meet future dmestic market demand Inventry Inventry build f 16.1% fr finished gds stck heading int 2H15 which is reflective f the sales grwth anticipated fr 2H15 & FY16 Gearing reduced Gearing Gearing cntinued t reduce t 16.7% (1H14: 17.2%) Apprpriate bank funding arrangements in place frm a structure, headrm and tenr perspective Funding rati Funding rati, i.e. including RPF (net debt + RPF / equity) at 32.9% (1H14: 34.1%) 10
Operatinal review Mark Ryan
Operating revenue Vlume up 11.7%; revenue up 12.4% Operating Revenue was up 12.4% t $148.01m (1H14: $131.73m) and vlume up 11.7% t 10,981 Hg equivalent tnnes (1H14: 9,827) Dmestic strategy the right strategy Sales initiatives driving grwth Successful marketing campaign cntinues building brand and driving sales Requisite fish in the water as vlumes increase fr 2H15 and beynd 12
Dmestic retail market Vlume up 2.8%; revenue up 5.0% 10,000 Hg Tnnes 5,000 0 61.7 4,781 Dmestic retail sales 72.3 5,588 88.3 6,991 100.9 106.0 7,487 7,699 1H11 1H12 1H13 1H14 1H15 Vlume Revenue A$m 150 50-50 Dmestic Retail Revenue was up 5.0% t $106.01m (1H14: $100.93m) and vlume up 2.8% t 7,699 Hg equivalent tnnes (1H14: 7,487) Dmestic retail demand fr salmn cntinues t grw Sales initiatives and prduct develpment driving grwth Apprpriate pricing in place Timing and fcus f marketing campaign and prmtinal prgram set fr 2H15 13
Dmestic whlesale market Vlume up 19.6%; revenue up 20.7% Hg Tnnes 6,000 4,000 2,000 0 34.4 3,188 Dmestic whlesale sales 41.7 43.0 4,104 3,805 30.8 2,337 37.1 2,794 1H11 1H12 1H13 1H14 1H15 Vlume Revenue A$m 50 40 30 20 10 0 Dmestic Whlesale Revenue was up 20.7% t $37.13m (1H14: $30.75m) and vlume up 19.6% t 2,794 Hg equivalent tnnes (1H14: 2,337) Mving back tward market share and vlumes seen previusly achieved underpinned by strng supply psitin Fresh hg sales grwth encuraging Apprpriate pricing in place Timing and fcus f marketing campaign and prmtinal prgram set fr 2H15 14
Exprt market Channel t tactically manage prductin vlumes particularly big fish Exprt Revenue was up t $4.88m (1H14: $0.04m) and vlume up t 488 Hg equivalent tnnes (1H14: 3) Tactical management f prductin vlumes particularly big fish Hg Tnnes Exprt sales A$m Pricing cnditins still vlatile despite depreciating AUD 4,000 20 3,000 11.8 11.2 2,000 1,000 0 4.9 1,637 1,388 0.6 0.0 488 3 1H11 1H12 1H13 1H14 1H15 226 Vlume Revenue 10 0 15
Strategic pririties and utlk
Key pririties 2H15 Achieving mre acceptable return levels Sales initiatives Cntinue t increase dmestic market per capita cnsumptin and maximise dmestic market sales (thrugh investment in marketing and prmtin, new prduct initiatives, supprt f majr custmers) Maintaining dmestic market pricing (and increasing where pssible) Operatinal efficiencies Fcus n maximising bimass grwth - repsitined fish input and feed diet strategies underpinning supply grwth in FY15 nwards Reducing peratinal csts mve clser t glbal best practice frm peratinal perspective i.e. cst f grwing, cst f prcessing, cst f supply and lgistics Reduce cst f grwing thrugh increased bimass at Macquarie Harbur and perfrmance f the Selective Breeding Prgram (SBP) Reduce cst f prcessing thrugh direct supply, advanced manufacturing capability, scale and yield maximisatin Cntinue t mitigate agricultural risk - New Harvest Strategy, Smlt Input (Prject Sweet Spt) and SBP Implement further sustainability and envirnmental initiatives and ensuring the right capital investment prgramme and grwth in underlying fish bimass 17
In summary Perfrming in line with Strategic Plan Sales initiatives and perating efficiencies driving cntinued earnings grwth earnings grwth at a rate faster than revenue Sustainably generating mre $/kg and $ frm dmestic market sales Very strng fish bimass grwth cupled with excellent FCR perfrmance and survival Strng cash flws, tgether with apprpriate use f its funding facilities ensured apprpriate investment in fish grwth and a respnsible capital spend t underpin sustainable grwing lnger term returns Strng balance sheet and grwing dividend Mving clser tward mre acceptable return levels - statutry Return n Assets f 15% leveraging sales initiatives, assets and capital emplyed 18
Any questins? 19
Appendix 20
Statutry, underlying & perating results Half Year ended 31 December 2014 Statutry Prfit $'000 Nn Recurring Items $'000 Underlying Prfit $'000 AASB 141 Impact $'000 Operatinal Prfit $'000 Revenue (frm all surces) $150,946 $0 $150,946 $0 $150,946 EBITDA $54,103 $0 $54,103 ($16,993) $37,110 EBIT $45,093 $0 $45,093 ($16,993) $28,100 Prfit befre incme tax expense $42,879 $0 $42,879 ($16,993) $25,886 Incme tax expense ($12,584) $0 ($12,584) $5,098 ($7,486) Net prfit after incme tax expense $30,295 $0 $30,295 ($11,895) $18,400 Half Year ended 31 December 2013 Statutry Prfit $'000 Nn Recurring Items $'000 Underlying Prfit $'000 AASB 141 Impact $'000 Operatinal Prfit $'000 Revenue (frm all surces) $134,451 $0 $134,451 $0 $134,451 EBITDA $42,021 $0 $42,021 ($10,249) $31,772 EBIT $34,423 $0 $34,423 ($10,249) $24,174 Prfit befre incme tax expense $31,796 $0 $31,796 ($10,249) $21,547 Incme tax expense ($9,318) $0 ($9,318) $3,075 ($6,243) Net prfit after incme tax expense $22,478 $0 $22,478 ($7,174) $15,304 21
Disclaimer This presentatin has been prepared by Tassal Grup Limited fr prfessinal investrs. The infrmatin cntained in this presentatin is fr infrmatin purpses nly and des nt cnstitute an ffer t issue, r arrange t issue, securities r ther financial prducts. The infrmatin cntained in this presentatin is nt investment r financial prduct advice and is nt intended t be used as the basis fr making an investment decisin. The presentatin has been prepared withut taking int accunt the investment bjectives, financial situatin r particular need f any particular persn. N representatin r warranty, express r implied, is made as t the fairness, accuracy, cmpleteness r crrectness f the infrmatin, pinins and cnclusins cntained in the presentatin. T the maximum extent permitted by law, nne f Tassal Grup Limited, its directrs, emplyees r agents, nr any ther persn accepts any liability, including, withut limitatin, any liability arising ut f fault. In particular, n representatin r warranty, express r implied is given as t the accuracy, cmpleteness r crrectness, likelihd f achievement r reasnableness f any frecasts, prspects r returns cntained in this presentatin nr is any bligatin assumed t update such infrmatin. Such frecasts, prspects r returns are by their nature subject t significant uncertainties and cntingencies. Befre making an investment decisin, yu shuld cnsider, with r withut the assistance f a financial adviser, whether an investment is apprpriate in light f yur particular investment needs, bjectives and financial circumstances. Past perfrmance is n guarantee f future perfrmance. The distributin f this dcument is jurisdictins utside Australia may be restricted by law. Any recipient f this dcument utside Australia must seek advice n and bserve such restrictins. 22
Tassal Grup Limited 1H15 Results Mark Ryan, Managing Directr & CEO Andrew Creswell, Chief Financial Officer 12 February 2015