ArborGen : Investor Presentation - FY23 Results Presentation

FY23 Results Presentation

For the 12 months ended 31 March 2023

3026MayMay20232023

Disclaimer

This presentation has been prepared by ArborGen Holdings Limited ("ArborGen"), to provide an overview of the performance of ArborGen and its activities at the date of this presentation. It is not prepared for any other purpose and must not be provided to any person other than the intended recipient. This presentation should be read in conjunction with ArborGen's interim and annual reports, market releases and other periodic and continuous disclosure announcements, which are available at www.nzx.com/companies/ARB and www.arborgenholdings.com.

The information in this presentation is of a general nature only. It is not a complete description of ArborGen.

This presentation is not a recommendation or offer of financial products for subscription, purchase or sale, or an invitation or solicitation for such offers.

This presentation is not intended as investment, financial or other advice and must not be relied on by any prospective investor. It does not take into account any particular prospective investor's objectives, financial situation, circumstances or needs, and does not purport to contain all the information that a prospective investor may require. Any person who is considering an investment in ArborGen securities should obtain independent professional advice prior to making an investment decision, and should make any investment decision having regard to that person's own objectives, financial situation, circumstances and needs.

Past performance information contained in this presentation is not an indication of future performance and should not be relied upon as such. This presentation may also contain forward looking statements with respect to the financial condition, results of operations and business, and business strategy of ArborGen. Information about the future, by its nature, involves inherent risks and uncertainties. Accordingly, nothing in this presentation is a promise or representation as to the future or a promise or representation that a transaction or outcome referred to in this presentation will proceed or occur on the basis described in this presentation. Statements or assumptions in this presentation as to future matters may prove to be incorrect.

A number of financial measures are used in this presentation and should not be considered in isolation from, or as a substitute for, the information provided in ArborGen's financial statements available at www.arborgenholdings.com. This presentation may include non-GAAP financial measures. This information has been included on the basis that ArborGen management and directors consider that this non-GAAP information assists readers to understand the key drivers of ArborGen's performance which are not disclosed as GAAP measures in ArborGen's financial statements.

ArborGen and its related companies and their respective directors, employees and representatives make no representation or warranty of any nature (including as to accuracy or completeness) in respect of this presentation and will have no liability (including for negligence) for any errors in or omissions from, or for any loss (whether foreseeable or not) arising in connection with the use of or reliance on, information in this presentation.

All references to currencies in this document are in US dollars (US$) unless otherwise stated.

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"Our transformative technology and advanced genetics seedling products are a game changer for our forest landowners, delivering bigger and better trees, faster."

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FY23 Operational Highlights

• Positive year of commercial progress following sale of Australasian business in FY22 and refocussing of business on higher growth existing and emerging markets.
• Investments made in increasing internal seedling production capacity in Brazil and the US, and in growing advanced genetics (mass control pollination (MCP)) seed supply in the US.
• Continued strong performance in Brazil in the second half of the fiscal year ending 31 March 2023 (FY23) with record sales volume, revenue, gross margin and earnings, benefitting from being the only company providing superior genetics to pine and eucalyptus growers in Brazil, and strong underlying demand conditions.
• Highest ever MCP seed production from US orchards with cone harvested producing seed equivalent to approximately 240 million MCP seedlings - over 60% for the Eastern regions where MCP seedling sales have been the highest but seed supply has been limited.
• Successful completion of expansion across two existing owned sites, increasing in-house container seedling production by approximately 70% to nearly 20 million containerised seedlings per annum in the US.
• Successful integration of a 10 million capacity pine nursery located in Canoinhas, Santa Catarina, and of ArborGen's fourth eucalyptus nursery in Brazil, bringing ArborGen's internal eucalyptus production capacity in Brazil to nearly 50 million seedlings per annum.

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FY23 Financial Highlights

• 18% increase in Revenue to $56.1 million.
• Operating Profit before financing expenses of $2.2 million, up from a loss of $1.3 million.
• 35% increase in US-GAAP EBITDA 1,2 ,3 to $10.3 million.

1. US GAAP EBITDA excludes NZ public company costs and strategic review costs. Please refer to page 20 for a summary of US GAAP EBITDA.
2. The Company uses US-GAAP EBITDA when discussing financial performance. This is a non-GAAP financial measure and is not recognised within IFRS. Non-GAAP financial measures should not be viewed in isolation nor considered as a substitute for measures reported in accordance with GAAP. Management believes that US-GAAP EBITDA provides useful information, as it is used internally to evaluate performance, and it is also a measure that equity analysts focus on for comparative company performance purposes, as the measure removes distortions caused by differences in asset age, depreciation policies and debt:equity structures.
3. Continuing operations

Outlook

• Materially improved performance projected in FY24 (fiscal year ending March 2024) driven by higher pricing and seedling sales volumes in Brazil (eucalyptus and pine) and higher seedling sales in the US (including MCP and hardwoods for carbon markets).
• Increased internal container production and lower MCP seed costs in the US and increased internal pine and eucalyptus seedling production in Brazil driving improved gross margins in FY24.

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