Webster Limited (WBA)FY13 Results and Market Update

John Hosken, CEOSusan Stegmann, CFO + Company Secretary

October 2013

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KEY MESSAGES

• ‘Clean’ and focused business without intangibles and significant non-cash earnings

• Walnut yields in advance of forecast

• Improved operating cash flows – cash positive

• Strong existing growth trajectory

• Investing in maintaining the growth – new orchards, new value-add plant, automation

• Growing earnings yield and dividends

• Strong balance sheet, zero net debt at balance date

• Rejuvenated leadership team

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FY13 HIGHLIGHTS

• Revenue increase of 18% to $52.8m

• EBITDA increase 56% to $13.2m

• EPS up 30% to 5.6 cents

• Full year dividends paid and declared up 25% to 2.5 cents (fully franked)

• Successful placement and rights issue raised $20.3m

• Purchase of a 1,000 ha property for future walnut orchard development

• Walnut trees growth on target for maintaining growth in FY14 and beyond

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INCOME STATEMENT

$m unless stated FY’12 FY’13 % change

Revenue 44.7 52.8 18.1%

EBITDA 8.5 13.2 55.3%

DA 2.9 3.1 -

EBIT 5.6 10.1 80.4%

Interest 0.4 0.2 -

PBT 5.2 9.9 90.4%

Tax 1.2 2.9 -

NPAT 4.0 7.0 75%

EPS (cents) 4.3 5.6 30.2%

DPS (cents) 2.0 2.5 -

Franking (%) 100.0 100.0 -

• Increase in revenue in line with maturing yield profile of walnut orchards

• PBT up by $4.7m due to increased walnut earnings, improved onion result

• Interest expense is down reflecting a reduction in average borrowings

• Underlying EPS up by 1.3 cents

• Increase in full year dividend of 0.5 cents. Final dividend payment of 1.5 cents fully franked on top of a 1.0 cent fully franked interim dividend

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BALANCE SHEET$m unless stated FY’12 FY’13

Cash 1.0 15.3Receivables 23.8 14.7Inventories & Other 8.6 12.6Total Current Assets 33.4 42.6PP&E 37.3 40.9Biological Assets 23.1 27.7Other 7.9 11.3Total Non-Current 68.3 79.9Total Assets 101.7 122.5Payables 9.7 9.9Borrowings 0.3 0.3Other 3.2 3.9Total Current 13.2 14.1Borrowings 5.5 0.7Other 3.3 4.7Total Non Current 8.8 5.4Total Liabilities 22.0 19.5NET ASSETS 79.7 103

Shares On Issue 93.3m 134.1mNTA per share $0.80 $0.73

• Strong balance sheet

• Low gearing – borrowings relate to leases only

• Reduction in receivables reflected in positive operating cashflow

• NTA per share down due to increased shares on issue, post placement and rights issue

• Increase in biological assets due to revaluation

• Well positioned for growth

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CASH FLOW

$m FY’12 FY’13

Receipts 44.5 59.3

Payments (48.6) (49)

Operating Cash Flows (4.1) 10.3

Payment for PP&E (6.0) (9.5)

Proceeds from sale of assets 0.8 0.2

Other 0.3 0.7

Investing Cash Flows (4.9) (8.6)

Proceeds of borrowings 0.1 ‐

Repayment of borrowings 0.0 (4.5)

Dividends paid (1.4) (3.0)

Proceeds from issue of equity securities 10.5 20.3

Other (0.5) (.3)

Financing Cash Flows 8.7 12.5

Net Cash Movement (0.3) 14.2

Operating cash flow • Positive cash flow from operations following maturation of walnut

orchards• Reduction in trade receivables• 2013 inventory on hand converted to cash post 30 June

Investing cash flow• Investment in plant and equipment in both operating divisions to

handle increased yield, improve efficiencies and reduce costs• Purchase of Avondale property for new orchard development

Financing cash flow• Repayment of all loans with financiers (other than leases)• Successful placement and equity raising at the start of FY’13• Increase in dividend per share of 0.5 cents

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WEBSTER LTD INFRUSTRUCTURE

• Capital expenditure program – FY14 ~$20 million

– Walnut processing facility (value adding, completes vertical

integration)

– New orchard preparation and establishment

– Update onion pack house aimed at quality and risk management

– Stay in business capex

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Onion CAPEX – multiple screen grading line

Swansea walnut orchards managed walnut orchards under

joint venture agreements

Forth head office onion factory

Leeton walnut orchard harvesting processing packing walnut nursery

Tabbita walnut orchard harvesting processing new orchard

Walnut Nursery at Leeton

Tabbita Orchard in Spring

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WALNUTS AUSTRALIA

SUMMARY OF OPERATION• Largest vertically integrated walnut business in southern

hemisphere• Owns and/or manages 2,200 ha of orchards in NSW &

Tasmania• Produces approx. 95% of the Australian walnut crop• Majority of sales exported at this point in time• Existing orchards will produce 11,000 tonnes (in-shell) at

maturity in FY16, up from approx. 6,500 tonnes in FY13• Three revenue streams – owned, managed investment

scheme income, and management fees• 1,000 ha of new land acquired to expand orchard footprint

by 45%• Counter seasonal marketing position – freshest walnuts

for six months of the year. Southern Hemisphere production approx. 5% of global production versus circa 1% five years ago

RECENT INITIATIVES• Development of walnut cracking and processing facility

to be commissioned in March 2014• Development of new 1,000 ha walnut orchard in the

Riverina, planting to commence June 2014• Well advanced with joint business planning with key

domestic walnut kernel customers

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WALNUT PROCESSING FACILITY

• Operational for FY14 harvest

• Increased storage facilities for larger crop

• Cracking facility– Significantly reduced cost of production

– Improved lead times

– Provide access to new domestic customers

– Reduce foreign currency exposure

– Smooth cash flows over the year

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Leeton processing facility being builtFuture silo storage

Leeton Walnut Processing FacilityFor

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FIELD FRESH TASMANIA (FFT)

SUMMARY OF OPERATION• FFT produces around 20% of Australian crop• Australia’s largest exporter of brown and red onions• Over 35 years of export experience in fresh food with

an extensive global marketing network• Combination of contract growers and leased land• Grows around 45,000 tonnes of brown and 3,000

tonnes of red onions per annum• Fully vertically integrated producer and marketer of

onions • Tasmania is best suited to produce a firm, good quality

onion suitable for export and long storage• Onions sold into counter-seasonal markets replacing

local stored product at a premium price• Operates a large onion operation in a relatively short

marketing window which would be difficult to duplicate

RECENT INITIATIVES• Exit from carrot business, P&E sold• Capital program

– Aimed at modernisation and quality enhancement– Automation for cost reduction– Pre pack capability to be introduced to support domestic

market entry• Addressed sales mix and customer concentration• First 2015 sales contracts finalised

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KEY DRIVERS – ORCHARD PROFILE

Productive life of a walnut orchard

• First crop in year four, approx. 20 years of regular cash flow

• Full maturity at year eight at 5.6 tonnes/hectare

Orchard maturity

• 60% of existing orchards are still to reach full maturity

• >95% of existing orchards to be fully mature by FY16

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Tonn

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KEY DRIVERS – ORCHARD PROFILE

Production – existing orchards

• Existing orchards to grow from FY13 production of 6,500t to 11,000t by FY16

• Expansion to increase production profile to 17,000t by FY25

Production – existing + planned orchards

Global in-shell walnut production

Global in-shell walnut production

• The Asian Century

• Health and nutrition research – the driving force

• Increased consumption on the back of consumer awareness of health

benefits

Source: International Nut & Dried Fruit Foundation

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Counter season benefits• Global desire for fresh walnuts• Southern hemisphere only producing 5% of global walnut

production• Southern hemisphere has the freshest product six months

of the year• Shift to later production in California• Chile is already exploring this dynamic and has grown

walnut exports 96% in the last four years

KEY DRIVERS – COUNTER SEASONS BENEFITS + FIRM WALNUT PRICE

Chile• Approximately 25,000 ha planted• 2013 season estimated at 40,000 tonnes

production• News on the 2014 Chilean walnut crop

– A deep frost effected their Serr variety (¼ of their planted variety is Serr, balance Chandler)

– They expect a reduction of 10,000mt in-shell from their 40,000mt estimate

Source: Expordata-ASOEX – considering a season from week 14 until week 13 of the following year

US average in-shell grower prices (CA)

Source: US Department of Agriculture

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05000

10000150002000025000300003500040000

2008/09 2009/10 2010/11 2011/12 F2012/13

2032024715

2958534649

40000

Season Export Volumes(figures in metric tons for in-shell walnuts)

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ESTIMATED WORLD WALNUT PRODUCTION

Note: Kernel = approx. 45% of In-shell;other slides refer to In-shell.

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• China is now a net importer• USA crop estimate downgraded in September to be down 1%• Chile crop estimate downgraded by 20%

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GROUP OUTLOOK

• Strong balance sheet• Stronger and less seasonal cash flow• Maturing orchard profile means group is positioned for organic growth in revenue, earnings

and dividends• Currency more favorable• Walnuts global overview

– California smaller crop, strong opening prices– Chile crop damage

• Onions global overview– Global demand and supply dynamics favorable

• Smaller Dutch crop• India demand• Smaller Japanese crop

– Favorable change in sales mix in FY14, 15% - 20% domestic

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DISCLAIMER

This presentation contains certain forward-looking and unaudited information. Such information is based on estimates and assumptions that whilst considered reasonable by the Company are subject to risks and uncertainties. Actual results and achievements could be significantly different from those expressed in or implied by this information.

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