T l t t iTassal strategy session18 July 201218 July 2012

Domestic strategy – growing Domestic strategy growing per capita consumption

Presenter: Mark Ryan – Managing Director & CEO

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BackgroundFocus is to grow per capita domestic salmon consumption

• From a production perspective, we need to achieve global best practice p p p , g pwith respect to fish growing costs and maintaining global best practice processing costs and yields

→ vital to maximise production to minimise cost per fish given high fixed → vital to maximise production to minimise cost per fish given high fixed costs

• Tassal’s production levels were previously channelled through export markets when supply > demand in domestic marketmarkets when supply > demand in domestic market

• However, export markets are extremely volatile and have been producing unacceptable returns over the past year

• Given low per capita domestic salmon consumption levels, Tassal’s strategy has been to stimulate demand in the domestic market, in particular the domestic retail market (in collaboration with retailers) to p ( )produce long term sustainable growing returns

• Given Tassal’s penetration of products in the retail market – demand stimulation in this market is the most effective avenue for domestic growthstimulation in this market is the most effective avenue for domestic growth

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Domestic focusDomestic market provides sustainable growth opportunities

Tassal Sales FocusTassal Sales Focus

Export focus

Domestic focus

Export market –Global oversupply due to

Domestic market – both wholesale and retail Global oversupply due to

increasing biomass from Chile & Norway.

Extremely volatile and

wholesale and retail markets to stimulate demand for supply /

demand equilibrium and d t i bl unacceptable returns in

current conditionsproduce sustainable

growing returns

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Global oversupply

• Export prices halved in Q3 of calendar year 2011 following global biomass growth exceeding global demand

• Accordingly, export channel, which has typically been the ‘release valve’ and returned a positive margin of around $1.50-$2.00kg, was decimated by world oversupply – not due to exchange rates

• In 3 year period from end of 2010 until end of 2014, global supply is expected to increase 38%

• For Tassal, poor export pricing outlook in the medium term drives lower li t h l ‘ l l ’reliance on export channels as a ‘release valve’

Significant decrease in export prices in FY12

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Strategic focus on domestic marketSignificant opportunity to improve per capita consumption

Australian per capita consumption • Given our production and poor export

market conditions Tassal’s response was Australian per capita consumption lags international markets

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market conditions, Tassal s response was to accelerate domestic per capita consumption predominantly through a retail stimulus strategy

4.8 → this was the focus in 1H12

• Coles “Down Down” & Woolworths “Knock Down” was locked in place and utilised to

1 4

3.2Down was locked in place and utilised to push through Tassal’s excess capacity, and return a greater margin vs export

• There remains a significant opportunity to 1.4 There remains a significant opportunity to improve per capita consumption given low levels of salmon Australians have traditionally eaten

Australia UK France Japan

Estimated Salmon per capita (HOG kg) 2011

• Given Tassal’s penetration of products in the retail market – demand stimulation in this market is the most effective avenue for domestic growth

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for domestic growth

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Domestic volume growthSuccess as volumes have increased

• Strong growth continues in domestic volumes – both retail and wholesale –however weaker prices in fresh hog in wholesale markethowever weaker prices in fresh hog in wholesale market

– 1H12 domestic volumes up 22% on 1H11

– Higher volumes and cost efficiencies offsetting lower fresh hog prices in wholesale marketwholesale market

> lowering volume and revenue/margin expectation from export market

• Branding and product development driving strong retail growth

− Coles & Woolworths embracing salmon given Tassal’s quality products and sustainability focusand sustainability focus

> WWF partnership in place for Tassal’s sustainability journey

- Key retailers are aligned with Tassal’s domestic growth strategy

• Strategic focus in wholesale market

– active pursuit of opportunities for smoked salmon and fillets & portionsactive pursuit of opportunities for smoked salmon and fillets & portions

– Strategic relationships to drive fresh hog

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Domestic margins

• Wholesale - continued volatility in fresh hog pricing

Margin growth strategies in place

> price is still an issue for fresh hog, but Tassal focus is to only grow in this market segment on a profitable basis

• Retail - ongoing low export prices necessitated domestic promotional strategies to increase demand in 2H12

> lead to some ST contribution margin erosion in domestic market but still higher than export margins

• However, strategy of growing per capita consumption in domestic market produced a substantially greater return than exports

→ export clearly is not an outlet for any surplus supply over MT due to → export clearly is not an outlet for any surplus supply over MT due to global oversupply

• Current strategy is to alter marketing plan going forward to grow domestic margins domestic margins

→ driven by brand awareness in collaboration with retailers

→ reduced exposure to sustained promotional campaigns in retail

→ where applicable, return to seasonal based pricing and promotions

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Tassal Marketing Investment

A t li it ti Consumer barriers

Our objective is to increase Australian per capita salmon consumption

Australian per capita consumption lags international markets

• Salmon is not top of mind• Salmon versatility is not understood• Salmon cooking knowledge is

minimal6 minimal• Product positioning within retail space

We need to overcome these barriers4.8

6

• To increase penetration rates• To increase purchase frequency • Price alone will not accomplish this

3.2

Tassal investment• ATL campaign to main stream salmon

• increasing top of mind awareness

1.4

• communicating salmon versatility• everyday protein choice• drive preference for Tassal

Salmon

Australia UK France Japan

Estimated Salmon per capita (HOG kg) 2011Salmon

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In summary...

• Strategy to stimulate demand in domestic market has been the right strategy

Shift to domestic focus has been right strategy

• Strategy to stimulate demand in domestic market has been the right strategy

• Export market is very volatile, particularly given global oversupply that is expected to continue for MT – it is no longer an outlet for excess local supply

• Domestic retail and wholesale channels provide sustainable contribution margins at levels higher than export

• FY12 strategy was to grow domestic market consumption via promotional strategies

• FY13 we have now altered our marketing plan to focus on

• increasing top of mind awareness of salmon• increasing top of mind awareness of salmon

• communicating salmon versatility

• everyday protein choicey y p

• drive preference for Tassal salmon

• The change in our marketing plan is expected to drive growth in domestic k t imarket margins

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Questions?Questions?

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T l t t iTassal strategy session18 July 201218 July 2012

Domestic strategy – demand Domestic strategy demand drivers

Presenter: Dale Williams – Head of Sales & MarketingFor

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IntroductionRetail market to continue to drive demand

Retail sales & volumes• Retail market has for the last 5 years

b l d f l

4 4694,781

5,588

72 370

80

5 000

6,000

Hog Tonnes A$m

Retail sales & volumes been largest driver of sales revenue and volumes for Tassal, reflecting:

→ increased sales of existing d t ith i ti t

2,5952,891

3,9114,469

31 434.8

50.356.4

61.7

72.3

30

40

50

60

2 000

3,000

4,000

5,000 products with existing customers

→ further market penetration through attracting new customers and developing new products 31.4

34.8

0

10

20

0

1,000

2,000

1H07 1H08 1H09 1H10 1H11 1H12

and developing new products

• Retail is expected to continue to drive sales and volumes going forward

Volumes (Hog tonnes) Revenues (A$m)→ retailers are embracing Tassal

products

→ key retailers are aligned with y gTassal’s domestic growth strategy

→ active and effective marketing plans to drive future sales

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Market positionTassal is well placed to grow domestic retail market

S i t il biliti I t t id it

• Sales and marketing structure and offer

Superior retail capabilities Investment provides security

• Risk mitigation and security of supply

> ~$200m investment in capex • Production capability and

infrastructure

• Innovation – new product

> $200m investment in capex over last 5 years allows for effective expansion and risk mitigation

development program

• Secure supply

• Sustainable supply

> ~$91m growth in livestock value to ensure consistent, quality supply

• Increased trading terms to provide • Increased trading terms to provide longevity of retail supply and exclusivity in some categories

• Sustainability – partnership with WWFSustainability partnership with WWF

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FY13 sales strategyContinue to grow domestic per capita consumption

Reduce exposure to sustained price campaigns in 1

Reduce exposure to sustained price campaigns in retail1

Return to seasonal based promotions

l d i i

2

Increase salmon awareness and consumption via national marketing TV campaign

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Commence diversification of sales into other sustainable seafood

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Ensure exposure to export is effectively minimised5

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MarketingMarketing

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Overarching sales strategyMarketing to become a key value driver

• As farmers, we need to ensure our sales strategy aligns with operational outcomes from both marine and processing – need to optimise outcomes

• Sales strategy also needs to maximise value in relative markets in which we operate to ensure an optimal profit outcome

• Over past few years, we have made stepped adjustments to our sales strategy to cater Over past few years, we have made stepped adjustments to our sales strategy to cater for material changes in both marine and sales market conditions

• To this stage, we have not considered it necessary to invest in a significant marketing campaign to deliver the best value generating outcome p g g g

> retail promotions previously utilised to provide “push” marketing solutions

• However, current marine, operation and sales conditions provide circumstances upon hi h k ti i b k l t i ti l tiwhich a marketing campaign becomes a key element in supporting value generation

> marketing campaign to “pull” products through

• Focus on margins Focus on margins

> we can be more strategic with retail promotional deals – ensure we maximise profitability

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• Imperative that we use our strategic capabilities to provide higher margin outcomes from retailer driven price activity

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Tassal marketing investment

A t li it ti Consumer barriers

Our objective is to increase Australian per capita salmon consumption

Australian per capita consumption lags international markets

• Salmon is not top of mind• Salmon versatility is not understood• Salmon cooking knowledge is

minimal6 minimal• Product positioning within retail space

We need to overcome these barriers4.8

6

• To increase penetration rates• To increase purchase frequency • Price alone will not accomplish this

3.2

Tassal investment• ATL campaign to main stream salmon

• increasing top of mind awareness

1.4

• communicating salmon versatility• everyday protein choice• drive preference for Tassal

Salmon

Australia UK France Japan

Estimated Salmon per capita (HOG kg) 2011Salmon

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Increased frequency & penetration

Non seafood users

Seafood users who 

Non‐seafood users

Increased consumption in two steps:

Salmon Users

don’t eat salmontwo steps:1. Primarily increasing frequency

of existing users2. Convert non-salmon, Salmon Users

Increase frequency

Co e o sa o ,but seafood users

Core target is female, main grocery buyer 25-49

OVER 60% of population

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What do our consumers want

• A product that looks goodp g

• A product that is Australian

• A product that is sustainable

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That’s the Beauty of... campaign

PromosPromos

PRPR

POSPOS

DD

TVTV

DemosDemos

SocialMediaSocialMedia

PrintPrint

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Why the marketing campaign?To build a strong proposition with retailers & customers

• An effective marketing campaign will offer the following benefits:

→ drive consumer preference for Tassal

→ increase top of mind awareness of Tassal salmon as an every day protein choiceprotein choice

→ teach consumers how to eat salmon

→ allow us to reach all our categories in all our channels, so becomes a cross-category strategy

→ will demonstrate to customers/buyers that Tassal is the market leader and is focused on value growth

→ add weight to our sustainability drive as consumers become more aware of what the Tassal brand is and what it stands for

→ provide a point of difference with retailers→ provide a point of difference with retailers

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ProductsProducts

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Current product rangeIn-store diversification

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New product developmentContinuing to expand product range

• New product development focus will continue to be on

→ incremental sales uplift

→ convenience for Tassal brandingg

→ indulgence for Superior Gold branding

→ introducing salmon into everyday cooking

i E l t k t h t ti→ using Evaluate market research testing

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Diversification into other seafoodLooking at other sustainable seafood offerings

• Leveraging off our core competencies in salmon sales and logistics

• Opportunities to be compatible with our corporate position on sustainability and quality

• Tassal to be known as the pre-eminent supplier of local and global seafood • Tassal to be known as the pre eminent supplier of local and global seafood in Australia

> selling a “basket” of seafood products

• Will be recognised as innovators and developers of seafood as a protein source in all markets

• Growing per capita consumption of seafood across the board

> ensuring we are complimentary (not cannibalising) our Salmon sales

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In summary...An evolving sales strategy

FY11 – value from infrastructure & supply capabilitiesFY11 value from infrastructure & supply capabilities

• We achieved value from our infrastructure and supply capabilities

FY12 – focus was on volume and market share

• Adjusted sales strategy to accelerate domestic consumption & value growth through retailer-led

FY13 – focus on margins

price promotion

• Reduce exposure to sustained price campaigns in retail

• Return to seasonal based promotions

• Increase salmon awareness and consumption via national marketing

• Commence diversification of sales into other t i bl f d

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sustainable seafood

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Questions?Questions?

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T l t t iTassal strategy session18 July 201218 July 2012

Domestic strategy – supply Domestic strategy supply drivers

Presenter: David Kiemele – Head of Farming

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Quality product underpins supply

World class Building Superior World class infrastructure

Building biomass

Superior product

• We have committed significant expansion, risk mitigation and efficiency capital on hatchery, marine and value-added processing facilities over past 5 years with a spend of ~$200m

W h ffi i i l i f d li i hi h li • We now have efficient operational infrastructure delivering high quality products to Tassal’s growing sales markets

• Building biomass – at any one point in time there are three year classes in th t ith T l’ li t k l i b $91 th t the water – with Tassal’s livestock value growing by ~$91m over the past 5 years

• Revised harvest strategy for FY13 will see an average size profile of Tassal harvest fish as optimal for the domestic marketharvest fish as optimal for the domestic market

• Working towards global best practice with respect to fish growing costs and maintaining global best practice processing costs and yields

• Sustainability – mitigating risk and maximising opportunities rewarded with partnership with WWF

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World class infrastructure

• Risk mitigation, particularly around operational risk in marine operations is a

Marine Operations ... risk mitigation paying dividends –Processing ... operating in line with global best practice

continual focus at Tassal – mitigation planning focussed on both consequence and likelihood

> this focus saves insurance premium of around $2m per annum – Tassal lf i f l iself-insures from an aquaculture perspective

> this planning has to date avoided significant profit consequences from agricultural / aquaculture events

• We have committed significant expansion, risk mitigation and efficiency capital on hatchery, marine and value-added processing facilities over past 5 years

> Total spend of ~$200m – allowed us to avoid significant profit impacts over > Total spend of $200m allowed us to avoid significant profit impacts over last 5 years. Recent event had a $10m+ future profit impact, however, excess hatchery capacity mitigated effect

• Processing facilities are operating in line with global best practiceProcessing facilities are operating in line with global best practice

> All processing facilities continue to deliver cost reductions and throughput efficiencies

Di l f f h l d il i > Direct supply of some fresh salmon products to retail customers continues to allow Tassal to present a premium product in a premium condition, maximising sales opportunities

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Building & optimising biomassBuilding biomass

• Total growth in livestock value approximately $90m over last 5 years

• At any one point in time there are three year classes of fish in the water

• Sustainability Report – highly recognised, ethical-valued brand and product

• WWF partnering on sustainability journey

Optimising biomassOptimising biomass

• Tassal focussed on global cost competitiveness in aquaculture production

→ selective breedingg

→ AGD reductions

→ innovative fish husbandry practices

→ leading edge diets

→ best practice processing equipment & facilities

→ sustainability

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Supplying the domestic market

Distribution channels Supply initiatives Competition

Strong distribution and supply, but very competitive

Distribution channels Supply initiatives Competition

• Retail Market• Coles

• Retail Market• Direct supply – removes

complexity and improves

• Retail Market• We are still subject to

areas of intense • Woolworths

• Independents

complexity and improves margins

• Security of supply –investing in infrastructure and livestock to secure

l

areas of intense pressure from competitors:

→ Imports – smoked salmon

• Wholesale Market supply

• Sustainability→ Fresh fish tenders

→ Retailers competing for market share via price promotion

• Wholesale Market• Security of supply –

investing in infrastructure and livestock to secure supply

→ Sustainability still plays second fiddle to price consumers minds

• Wholesale Marketsupply

• Sustainability

Wholesale Market• We are still subject to

areas of intense price pressure on fresh hog

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FarmingFarming

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Previous harvest strategy

• Saltas – some contaminated vaccination for fish to be transferred to Macquarie H b

FY12 has been a very challenging year for farming

Harbour

> Risk mitigation was back-up supply in other hatcheries

• Sea Water – hot summer water temperatures and an algal bloom eventSea Water hot summer water temperatures and an algal bloom event

> we have now had 2 hot summers from the past 3 in the South East of Tasmania - water temperatures that were experienced over the summer were the warmest on record

> algal bloom event resulted in significant mortalities to fish just input to sea – risk mitigation was back-up supply in hatcheries to replace fish lost

W t bi d ith th l t fi h d hi h t l l f t di • Warmer waters, combined with the largest fish and highest level of standing biomass that Tassal has achieved created a less than perfect scenario heading into summer

> i thi d d t h h t t t ( > upon review something needed to change – new harvest strategy (see over)

• The difference between a “normal” summer and “hot” summer is additional labour and overhead costs together with for lost growth increased mortality labour and overhead costs – together with for lost growth, increased mortality and OH&S issues driven by a very challenging workload

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New harvest strategy

• FY13 will see a new harvest strategy implemented that will deliver

Harvesting at a quicker rate in the South East

gy psignificant gains in the survival of the harvest fish, but will also assist the fish we put to sea in their first year

• Our focus now is to harvest at a quicker rate in South East to ensure that we mitigate the risk of summer – this will maximise survival of fish and accordingly, maximise our fish biomass

• New harvest strategy will be an integral step in Tassal delivering on its long term strategic goal of being globally cost competitive in aquaculture production (ie both growing & processing)

• This global cost competitiveness strategy will involve a successful selective b di AGD d i i i fi h h b d i breeding program, AGD reductions, innovative fish husbandry practices, leading edge diets and best practice processing equipment & facilities

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New harvest strategyFor South East diploids, between 50-60% of total mortality occurs when the fish are 6-8 weeks from harvest when harvested from October onwardsharvest when harvested from October onwards

In QTR 2 FY12, mortality increased by 5% from the previous year (5.57% v 5.31%) and up 31% on 4 years ago (5.57% v 4.24%)

As fish size gets bigger, the cost is more significant. Expressed as biomass, this

t 29% d 80% represents a 29% and 80% increase respectively

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New harvest strategyHot summers now considered to be the “norm” in our planning

• Consistently, fish loss escalates through the summer period across all South East regions

• This issue has been worsening year on year as fish size / biomass increases

• Larger fish are more susceptible to summer conditions due to increased handling over summer for AGD

• Planning for Summer FY2013/14, we are now planning for another hot summer –we will commence harvesting of the 2011YC earlier and at larger volumes so that all South East diploids are harvested by 31 December 2012.

F i h h i M i H b h h d • Focus is then on harvesting at Macquarie Harbour through summer and autumn. Additional lease space in Macquarie Harbour will benefit this strategy by allowing more biomass to be harvested

• Currently in the South East a significant constraint on growth is due to the delay in • Currently in the South East, a significant constraint on growth is due to the delay in reducing cage biomass in the new YC (due to not having enough room on the leases) – we need to split our pens much earlier to capture spring growth

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New harvest strategy

• For current 11YC, advancing timing of harvest for stocks in South East will result

A number of benefits expected

in a reduced cost of fish (i.e. reduction in labour and overheads) and still provide adequate HOG size to ensure our target markets are met

• There will be additional benefits for 12YC through earlier pen splits, which will in turn see HOG weights increase in Jun–Dec period for subsequent years

• Significant reduction in overall number of baths per YC at an estimated cost of $6k per bath

• Potential savings in net management as a greater % of nets will be pulled in winter when excessive biofouling is less of an issue

• Ability to run one “summer diet strategy” as larger fish can be kept on winter diets Ability to run one summer diet strategy as larger fish can be kept on winter diets (significantly cheaper) as they will be harvested before onset of second summer –together with possible reduction in fish meal levels

• Reduced use of freshwater for bathing – bigger fish = more bathsReduced use of freshwater for bathing bigger fish more baths

• Improved benthic conditions under cages that will allow for sustainable use of our leases moving forward

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Farming strategic imperativesGoal is sustainable overall tonnage uplift

1. Smolt input1. Smolt input• Overall increase in biogain, along with improved biological performance will

see a reduction in the cost of fish

• Overall increase in smolt input

2. Survival

• Overall increase in smolt input

• Survival improvement

3 A HOG i ht

• Improvements to stock, husbandry practices, input, harvest strategies, predator control and maturation control

3. Average HOG weight• Achieving the most “economical” target size of fish to produce and sell

• Maintain current stocking levels while maximising biomass and sustainability practices

4. Economic feed conversion rates• Focus is to ensure we have “economic” diets at our disposal – which produce

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Focus is to ensure we have economic diets at our disposal which produce an economic outcome on a cost of growing perspective

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ProcessingProcessing

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Processing

• FY12 has seen continuation of a reduction in processing costs and an

Continued improvements in FY12

improvement in yields/recoveries

• Introduction of new harvest strategy will see more fish being produced – albeit in FY13, this will translate into a lower average size for South East fish

• Margate cost $/kg will continue to benefit from an increased throughput due to current retail sales run-rates and from impact of marketing campaign – focus is on low cost, high volume products

• Huonville cost $/kg will continue to improve based on a sales focus on products that have a low cost, but at a high volume

• VA processing will continue to achieve global best practice results –VA processing will continue to achieve global best practice results underpinning the strategic goal of globally cost competitiveness in aquaculture production

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SustainabilitySustainability

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Investing in sustainability

“It is not enough for a company to be profitable. Investors customers consumers and the public Investors, customers, consumers and the public expect a company such as Tassal to be socially and environmentally responsible. Tassal understands that comm nit and en i onmental al es a e impo tant community and environmental values are important. We clearly understand that we can and do make a difference.”

• Tassal is viewed as a leader in sustainable aquaculture practices – underpinned with our WWF sustainability partnershipwith our WWF sustainability partnership

• Our commitment to sustainability is highlighted through release of our annual sustainability report

• Our strategy is to sell a highly recognised, ethical-valued brand and product to consumers and retailers, with Tassal recognised as champion of Australian sustainable salmon industry for customers, consumers and regulators

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SustainabilityMitigating risk Maximising opportunities

• Tassal is lead player in long-term industry strategy with sustainability

• Coordination of environmental, fish health farming and processing industry strategy with sustainability

focus – also taking lead in food sector sustainability reporting

• Strategic ENGO partnership with WWF

health, farming and processing operations to maximise fish health and performance

• Commercialisation of the Selective g p p– Tassal will be the first aquaculture company with best practice certification

B t ti i f t t d fi h

Breeding Program – significant benefits to realise

• Protecting social licence with → WWF partnership

• Best practice infrastructure and fish health capacity is in place

• Focus on impact mitigation and stakeholder engagement

p p→ strategic research collaborations

with key stakeholders→ transparency of information and

clear communication of stakeholder engagement

• Collaborative, forward-focused research partnerships

• Compliance, communication,

clear communication of sustainability goals

→ providing a leadership role in the area of eco-certification

• Raise Tassal sustainability profile Compliance, communication, stakeholder, and seal management plans implemented and resourced –transparency in reporting

• Raise Tassal sustainability profile –our social licence to farm and process fish critical for our long term survival

• Driving sustainability focus at the

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consumer and customer end

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In summary...

• Our strategic focus will remain on ensuring we achieve global best practice

Some headwinds, but overall very strongly positioned

• Our strategic focus will remain on ensuring we achieve global best practice with respect to fish growing costs and maintaining global best practice processing costs and yields

• Summer remains an extremely difficult period – significant volatility in water • Summer remains an extremely difficult period significant volatility in water temperatures and an increasing size profile causing concerns around water temperature vs fish survival

• New harvest strategy being implemented to mitigate these concerns –New harvest strategy being implemented to mitigate these concerns Macquarie Harbour strategically very important

• Competitive pressures remain in supplying segments of the domestic market – Tassal well positioned to respond with Marketing Campaign underpinning Tassal well positioned to respond with Marketing Campaign underpinning position

• Mitigating risk and maximising opportunities

l f d bl ll l f• Key goal going forward is sustainable overall tonnage uplift – attempting to maintain a supply / demand equilibrium

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T l t t iTassal strategy session18 July 201218 July 2012

Focus on the domestic market is the Focus on the domestic market is the right strategy

Presenter: Mark Ryan – Managing Director & CEO

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The right strategy

• Tassal’s production levels were previously channelled through export markets when supply > demand in domestic market

Shift to domestic focus has been the right strategy

when supply > demand in domestic market

→ vital to maximise production to minimise cost per fish given high fixed costs

• Export market is very volatile, particularly given global oversupply that is expected to continue for MT – it is no longer an ST outlet for excess local supply

• Domestic retail and wholesale channels provide sustainable contribution margins at levels higher than export

• Given low per capita domestic salmon consumption levels, Tassal’s strategy has been to stimulate demand in the domestic market to produce LT sustainable growing returns

• New marketing plan for FY13 is expected to drive demand growth in domestic market

• Maximum shareholder value will be achieved by growing per capita domestic Maximum shareholder value will be achieved by growing per capita domestic market consumption in consideration of the balance between an optimal sales & marketing plan and operational (production and processing) plan. This balancing of the mass fish/biomass balance is critical to ensure that we maximise both ST and LT strategic operational and financial growth thus enabling sustainable and LT strategic, operational and financial growth – thus enabling sustainable earnings growth

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An evolving sales strategyAt the heart it has not changed... continue to grow domestic per capita consumption

FY11 – value from infrastructure & supply capabilities

• We achieved value from our infrastructure and supply capabilitiescapabilities

FY12 – focus was on volume and market share

• Adjusted sales strategy to accelerate domestic • Adjusted sales strategy to accelerate domestic consumption & value growth through retailer-led price promotion

FY13 – focus on margins

• Reduce exposure to sustained price campaigns in retail

• Return to seasonal based promotions and pricing

• Increase salmon awareness and consumption via national marketing

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• Commence diversification of sales into other sustainable seafood

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Driving demand through new marketing campaignmarketing campaign

Building a strong product proposition

• The marketing campaign will be focussed on achieving:

• higher unit margins

• increased brand and business value

• higher per capita domestic consumption rates• higher per capita domestic consumption rates

• a sustained strategic competitive advantage

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Driving demand through new product developmentnew product development

Continuing to expand product range

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Ensuring supply

• Our strategic focus will remain on ensuring we achieve global best practice

Strongly positioned on the supply side

• Our strategic focus will remain on ensuring we achieve global best practice with respect to fish growing costs and maintaining global best practice processing costs and yields

• New harvest strategy being implemented to mitigate summer water • New harvest strategy being implemented to mitigate summer water temperature concerns – Macquarie Harbour strategically very important

• Mitigating risk and maximising opportunities

• Key goal going forward is sustainable overall tonnage uplift – attempting to maintain a supply / demand equilibrium

• Maximum shareholder value will be achieved by growing per capita domestic market consumption in consideration of the balance between an optimal sales & marketing plan and operational (production and processing) plan

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Questions?Questions?

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