Ricegrowers Ltd. Class B · ASX:SGLLV
Ricegrowers Ltd. Class B — Shareholder Meeting (August 2017)
34 slides from Ricegrowers Ltd. Class B's shareholder meeting presentation, August 2017
Slide 1: Welcome to SunRice AGM, Jerilderie
Thank you Laurie. Good morning everyone. As always, I am delighted to be here again today and would like to welcome you all to Jerilderie and SunRice’s AGM. 1
Slide 2: Presentation overview
By the end of my presentation today, I hope to have provided you with an overview of several issues: • Firstly, how SunRice demonstrated commercial resilience during Financial Year 2017 in the face of a ‘perfect storm’ caused by difficult trading conditions and other market headwinds; • Secondly, ho
Slide 3: Financial performance snapshot and shareholder metrics
So here is the slide of metrics I put up every year that provides a snapshot of SunRice’s financial performance and how this has impacted on both A Class shareholders – our growers – through the paddy price, and B Class investors – those of you who have invested in the Company, in order to earn a re
Slide 4: The 'perfect storm' of market headwinds
The softer financial results for the year should have come as no surprise. At the last Annual General Meeting, most of my presentation was focused on the emerging and growing headwinds that SunRice was facing in both global and domestic markets. After five years of improving financial performance an
Slide 5: Commercial resilience during the downturn
However, the true test of a company is how it performs in a commodity cycle downturn and when adverse business conditions emerge. During this ‘once in a decade’ market downturn, our strategy effectively insulated our financial performance through the ability of our brands to support robust pricing i
Slide 6: Net profit before tax waterfall by segment
This ‘waterfall’ chart concisely demonstrates how the performance of each segment combined to drive the result. Each bar represents the difference in net profit before tax for each segment of the business between 2016 and 2017, rather than the annual result of each segment that we reported for 2017.
Slide 7: Rice Pool: C16 crop year fixed price
The supply of Riverina rice is a key driver of the business and when times are challenging for our growers, SunRice assesses all viable options to encourage you to plant a rice crop. So in October 2015 we announced a guaranteed fixed price of $415 per tonne for medium grain (Reiziq) for the C16 crop
Slide 8: Rice Pool loss offset by Profit Businesses
$281 million and the Rice Pool business recorded a loss of $32.5 million in 2017. Nevertheless, we succeeded in placing the smaller C16 crop into key premium markets, including Australia and New Zealand, the Middle East and Asia, while other major markets were serviced by sourcing volume from Vietna
Slide 9: International Rice results
The International Rice business markets and distributes rice from our global supply chain activities through intermediaries to consumers, foodservice and processing customers in markets around the world, where there is growing demand for SunRice branded products. International Rice includes profits
Slide 10: Vietnam supply chain and Asia expansion
high quality standards were met. Combined with existing international sourcing arrangements, including 115,000 paddy tonnes from the US, International Rice secured a total of 500,000 paddy tonnes and achieved the important goal of filling the supply shortfall caused by the smaller C16 Riverina crop.
Slide 11: Trukai in Papua New Guinea
As we indicated at the last AGM, 2017 was always going to shape up as a challenging year for our Trukai subsidiary in Papua New Guinea. While Trukai has traditionally been a key contributor to SunRice’s financial performance, the business was significantly impacted by the country’s weak economy, wit
Slide 12: SunFoods
SunFoods played a critical role in supplying branded packaged rice to the Middle East markets and in doing so generated a profit. It has reconfigured its operations, and not only packages branded products for key markets, but also undertakes bulk rice handling to supply our APC subsidiary in Jordan.
Slide 13: Rice Food results
The Rice Food business is engaged in the marketing and distribution of rice- based products that incorporate additional value in their transformation process, such as: snacks, including Rice Cakes, Mini Bites and Rice Chips; Microwave Rice; Ready-to-go-Meals; and food ingredients like rice flour. Th
Slide 14: Rice Food international expansion
is now also focused on expanding internationally the sales of its domestic portfolio of value-added products. This included launching Mini Bites in Asia and the Pacific Islands, and Rice Chips in the Middle East. Launched under SunRice’s well-established and recognised Sunwhite brand, Rice Chips sol
Slide 15: Riviana Foods results
Riviana Foods is a wholly-owned subsidiary of SunRice, specialising in gourmet food sales and marketing across Australian grocery retail and foodservice channels. Riviana also has a distributor in New Zealand and a small number of exporters selling across parts of Asia and the Middle East. The compa
Slide 16: Riviana relaunch and Fehlbergs acquisition
‘the spirit of the Mediterranean’. The relaunch also included TV commercials featuring celebrity chef and restauranteur Karen Martini as brand ambassador. Riviana also acquired Fehlbergs Fine Foods during the year. A family owned business, Fehlbergs ranges quality products in Australian supermarkets
Slide 17: CopRice overview
CopRice manufactures, distributes and sells stockfeed and pet food products through retail and wholesale channels to consumers and primary producers. The business operates across the bulk and packaged markets in animal nutrition, with customers across domestic markets in Australia and New Zealand, a
Slide 18: CopRice performance
favourable weather conditions generated exceptional pasture levels, which, while a positive outcome for graziers, undermined the broader need to acquire supplementary stockfeed across the remainder of CopRice’s specialty businesses in all categories, including in the key equine segment. In the Speci
Slide 19: Long-term financial trends
I have once again included the longer term trend charts for several financial metrics and indicators to demonstrate that despite the challenges of the past year, our performance in the context of prior years’ remains strong. Indeed, we are in robust financial health despite such a tough year and are
Slide 20: Refreshed strategy and four pillars
For those of you who have attended grower and shareholder meetings since the start of the year, or who attended the RGA leaders’ forum or Conference more recently, you will be familiar with some of the detail that underpins our refreshed strategy. You may also breathe a sigh of relief that I do not
Slide 21: Sushi and Japanese cuisine trend
previous experience in successfully riding some of these trends. One of these is the ongoing fascination with sushi and Japanese cuisine everywhere around the world, be it Asia, Europe, Australia, the US, or Africa. 13
Slide 22: Growth of Japanese restaurants outside Japan
You do not have to be a Japanese food aficionado or regular consumer in order to have noticed the incredible growth of Sushi outlets or Sushi Train restaurants throughout suburbs and cities. Every food mall, airport and suburb shopping centre now has a sushi outlet of some form or another. Staggerin
Slide 23: SunRice's advantages in sushi rice
• We already offer competitive prices compared to other countries and regions that grow sushi rice; • We already have a reliable supply chain for existing customers; and • We already have a suite of existing products catering specifically for sushi- focused customers. Needless to say our guests were
Slide 24: Japonica supply from Riverina and California
The best Japonica is grown in temperate climates and only SunRice can offer supply out of the two major Japonica export regions of the world, the Riverina and California. This gives us a unique flexibility in being able to offer all-year-round supply and a fresh crop every six months. 15
Slide 25: Meeting customer needs in short grain
We have the ability to meet customer needs – and these customers are very aware and focused on what those needs are. We have been meeting our customers’ needs in the short grain space now for almost 25 years. The relationships we have established during this time and the reputation we have built are
Slide 26: Existing product suite: Koshihikari, Opus, Calrose
We have an existing product suite – we are not suddenly developing new products for market. From Koshihikari – the super-premium variety renowned for its soft, moist, springy and slightly sweet textures and tastes… To Opus – which was bred in Australia from a blend of authentic Koshihikari seeds and
Slide 27: Riverina positioned for high-returning varietals
I have previously shown this slide and I do consider it compelling. It clearly shows why our growers need to consider that the expansion into growing specialty and niche varieties is important, not only to improve the profitability of our growers (a key element in ensuring there is enthusiasm in and
Slide 28: Sushi train sign
And finally, before we move into the outlook for the coming year, this is a sign we want all our customers around the world to proudly display on their sushi trains or counters. This photo was taken at a sushi train outlet in Sydney’s CBD. 19
Slide 29: Outlook: world medium grain rice price
I’d now like to share why we are more positive in outlook than we were this time last year. The direction of the world medium grain rice price is likely to have the largest influence on SunRice’s financial performance over the remaining eight months of the 2018 financial year. When I stood here and
Slide 30: California and Japan tender pricing
US$275/tonne in March, to most recently trade at US$385/tonne. However, I do note that there is a fair bit of speculation in the California market at the moment, as we are in a period where old crop paddy is tight and new crop is yet to be harvested. Another trend we monitor is pricing expectations
Slide 31: Paddy price range and FY2018 profit guidance
In line with our practice of applying the same disclosure obligations to both paddy price and profit guidance, I am pleased to confirm that the paddy price range for medium grain (Reiziq) is $320-360/tonne. Also, as announced yesterday and following on from the positive response to the fixed priced
Slide 32: Encouraging growers to plant rice
the business’s evolution, and I would encourage you to contribute to your Company’s success by again growing rice this year. 21
Slide 33: Key messages summary
As a concluding summary, I would like to reiterate the key messages I would like you take away from today: • Despite difficult trading conditions, SunRice proved resilient and robust during 2017. • We have successfully established a new, large-scale and quality supply chain in Vietnam. • SunRice is
Slide 34: SunRice Business Update, AGM August 2017
SunRice Business Update SunRice AGM, 25 August 2017 23
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