Mango Industry Benchmarking (Three Years)

(2010-11, 2011-12, and 2012-13)

CDI Pinnacle Management May 15th 2014

Sample / Benchmarking Group

Sample Scale

Harvest Year Producing Trees Producing Ha

Trays (7Kg Equiv.)

(Est)

Total Mango Harvest (Trays)

% of Harvest (Est.)

2010 - 2011 261,000 1,322 1,120,357 5,922,000 19%

2011-2012 497,000 2,500 3,300,000 8,576,000 38%

2012-2013 500,000 2,500 3,200,000 7,147,000 45%

Area per Region in Sample

Burdekin, 24%

Southern, 4%

NT, 54%

Mareeba Dimbulah, 19%

% of Area in Each Region 2012 and 2013

Average Farm Size

74 78

121

13

-

20

40

60

80

100

120

140

Burdekin Mareeba Dimbulah NT Southern

Average Farm Size (Ha) 2013

Farm Size – Spread (3 Years)5

38

82

328

-

50

100

150

200

250

300

350

ME

DIA

N

AV

ER

AG

E

Size of Participant Farms

Variety Mix in Sample

Calypso 37%

KP, 35%

R2E2, 12%

H-Gold, 9%

Keitt, 3%

0%

20%

40%

60%

80%

100%

120%

1

% of Sample from each Variety (2012 AND 2013)

Kent

Brooks

Keitt

Other - Mango

Honey Gold

R2E2

KP

Calypso

All Participants – 3 Years

Yield: Trays / Producing Tree(Including Juice / Processing)

0

1

2

3

4

5

6

7

F2011 F2012 F2013 3 YEARS

4.34

6.65 6.345.73

Trays / Producing Tree (Incl. Juice)

Yield: Tonnes / Producing Ha (Including Juice / Processing)

0

1

2

3

4

5

6

7

8

9

10

F2011 F2012 F2013 3 years

7.01

9.31 9.28.53

Tonnes /Producing Ha (Incl. Juice)

Pack Out: Grade and Count(% of Fresh Market Fruit Only)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013 3 YEARS

26%34% 28% 28%

51% 39% 51%63%

% Premium

% A Grade

Costs and Returns per Tray Equiv.(Including Juice / Processing)F2011 F2012 F2013

Ave. Total Operating Costs 19.27 17.07 17.03

Ave. Cash Profit (*) 2.16 0.58 3.58

Ave. Gross Return 21.43 17.65 20.61

Marketing and Ripening Costs / 7 KG Equivalent 3.03 2.20 2.36

Farm Gate Return (Net) Received / 7 KG Equivalent 18.40 15.45 18.25

(*) From 'Cash Profit' Producers must fund:1. The cost of finance, 2. The depreciation / replacement of all plant and equipment, and3. Achieve a return on their investment

Average Gross Return F2013(Before Paying Marketing & Ripening Costs)

$14.

79

$14.

81

$15.

51

$16.

71

$16.

81

$17.

19

$17.

38

$17.

64

$17.

88

$17.

89

$19.

34

$19.

96

$20.

61

$21.

38

$21.

73

$22.

08

$22.

43

$23.

37

$23.

72

$23.

80

$23.

82

$24.

09

$24.

55 $27.

57

$28.

81

$29.

19

$29.

91

$31.

59

$46.

38 $49.

74

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

AVERAGE MEDIAN

Total Gross Sales $ / Tray Sold 2013

Average Operating Costs F2013(Before Paying Marketing & Ripening Costs)(Before paying interest and depreciation)

$12.

44

$12.

44

$12.

74

$13.

97

$14.

00

$14.

12

$14.

78

$15.

52

$16.

46

$17.

03

$17.

04

$17.

92

$17.

99

$18.

68

$19.

17

$19.

74

$20.

31

$20.

57

$21.

76

$22.

63

$22.

97

$23.

07

$24.

60

$26.

06

$26.

08

$28.

23

$29.

70

$35.

71

$36.

35

$44.

34

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

$50.00

AV

ER

AG

E

ME

DIA

N

Ave. Operating Costs / Tray - 2013

Average Cash Profit / Tray F2013(After marketing and ripening and before interest & depreciation)

(21.

56)

(9.3

7)

(5.6

0)

(5.1

8) (2.9

3)

(1.5

3) 0.85 1.39

1.67

1.91

2.03 2.37 3.

14

3.36 3.56

3.58

3.75

3.91 4.

69

4.92 5.30

5.33

5.40

5.45

5.73 7.

00

7.05 7.52

10.6

7

11.0

7

(25.00)

(20.00)

(15.00)

(10.00)

(5.00)

0.00

5.00

10.00

15.00

ME

DIA

NA

VE

RA

GE

Cash Profit (EBITDA) $ / Tray Sold

Costs and Returns / 7 KG Equiv. Produced (including Juice /Processing)

19.2717.07 17.03 16.28

2.16

0.583.58

3.397.01

9.31 9.2

8.53

0

1

2

3

4

5

6

7

8

9

10

0

5

10

15

20

25

2011 2012 2013 3 YEARS

Yiel

d t /

ha

$ /

Tray

Average Cash Profit(EBITDA)

Average Operating Costs

Average Yield (T / ha)

Cash Profit – Spread (3 Years)

(59.13) (21.56)

3.143.39

13.45

(70.00) (60.00) (50.00) (40.00) (30.00) (20.00) (10.00) 0.00 10.00 20.00

MedianAverage

EBITDA / Tray Sold

35% of participants did not achieve a Cash Profit per Tray or per Tonne (made a loss),

46% of participants achieved a Cash Profit per tray or per Tonne equal to or greater than the average Cash Profit of:( $3.39 / Tray ($485 / Tonne).

2.83

1.942.39

0.27

0.28

0.24

1.45

1.09

1.11

1.10

1.06

1.45

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2011 2012 2013

Yiel

d t /

Ha

Labo

ur C

osts

$ /

Tra

y

Packing Labour $ / Tray

Picking Labour $ / Tray

Pruning Labour $ / Tray

Farm and Other Labour $ / tray

Yield (Tonnes / Ha)

Labour Costs per 7KG Tray Equiv.

Labour Use Efficiency

20.00

40.00

60.00

80.00

100.00

120.00

2011 2012 2013

11290 96

Ave. Total Tonnes Produced (Incl. Juice / Processing) per FTE

Varieties – 3 Years

Packed to Premium + A GradeBy Variety

96%90% 91% 87%

50%

66%

91%84%

0%

20%

40%

60%

80%

100%

120%

Brooks Calypso Honey Gold Keitt Kent KP Other - Mango R2E2

% - Premium + First Grade

Pack to Sizes 12 to 24(%Fresh Market Fruit only)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Brooks Calypso Honey Gold Keitt Kent KP Other -Mango

R2E2

81%85%

71% 69%

29%

60%

79%

39%

% Packed Sizes 12 - 24

Yield (Tonne / Ha) per annum(Regardless of Tree Age)

6.34

10.4510.9

6.81

10.13 9.4

6.939.24

7.5

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.002011 2012 2013

Keitt

Other Mango Varieties

Honeygold

R2E2

Calypso

Kensington Pride (KP)

Brooks

Kent

Varieties: Yield (T / Ha) 3 Years(Regardless of Tree Age)

7.3 7.8 8.2 8.8 9.3 9.7 9.7

10.5

-

2.0

4.0

6.0

8.0

10.0

12.0

Brooks R2E2 KensingtonPride (KP)

Calypso OtherMango

Varieties

Keitt Honeygold Kent

YIELD FOR VARIETY - T / Ha - 3 YEARS

Regions – 3 Years

Regions: Tonnes Per Hectare(Including Juice/ Processing)

5.64.9

7.4

9.3

7.2

10.7

4.6

9.4 9.0 9.2

6.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Burdekin Mareeba/Dimb. N.T. Southern

F2011

F2012

F2013

BurdekinYield (Incl. juice) and Operating Costs

16.92

9.56

12.45

5.6

9.39.4

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

F2011 F2012 F2013

BURDEKIN YIELD AND OPEATING COSTS

Operating Costs / Tray

Yield t / Ha

Mareeba/DimbulahYield (Incl. juice) and Operating Costs

25.33

17.2816.08

4.97.2

9.0

0.00

5.00

10.00

15.00

20.00

25.00

30.00

F2011 F2012 F2013

MAREEBA / DIMBULAH YIELD AND OPERATING COSTS

Operating Costs / Tray

Yield t / Ha

N.T. Yield (Incl. juice) and Operating Costs

15.95

17.66

19.60

7.4

10.7

9.2

0.00

5.00

10.00

15.00

20.00

25.00

F2011 F2012 F2013

N.T. YIELD AND OPERATING COSTS

Operating Costs / Tray

Yield t / Ha

Southern RegionYield (Incl. juice) and Operating Costs

25.82

19.60

4.66.3

0.00

5.00

10.00

15.00

20.00

25.00

30.00

F2011 F2012 F2013

SOUTHERN REG. YIELD AND OPERATING COSTS

Operating Costs / Tray

Yield t / Ha

Top 10 and Sum Up(Top 10 = Top 10 most profitable farms per 7 KG Tray Equivalent)

Attributes of the Top 10 Total Group Top 10 % of Sample Top 10 as %

of Industry

Ha (*) 5,021 962 19% 1%

Trees (*) 925,000 157,600 17% 5%

Trays (*) 5,571,287 915,913 16% 4%

% Packed to Premium and A Grade 91% 91%

% Packed to Sizes 12 to 24 78% 70%Top 10: 80% production was in the N.T (5 Farms) ,

20% production Mareeba / Dimbulah (5 Farms)Yield tonne / ha 8.53 6.70

% Premium 63% 67%

% Sizes 18 – 22 39% 67%

Gross Return / Tray 19.67 26.28

Operating Costs / Tray 16.28 15.71

Operating Costs as % of Gross Revenue 83% 60%

EBITDA / Tray 3.99 10.57

EBITDA as % of Gross Revenue 20% 40%

Variety Mix - Top 10 (by Volume Produced )

KP 56%

Calypso 20%

R2E2 13%

H - Gold 7%

Keitt 2%

Brooks 1%

Total Group Top 10 % of Sample Top 10 as % of Industry

Ha (*) 5,021 962 19% 1%

Trees (*) 925,000 157,600 17% 5%

Trays (*) 5,571,287 915,913 16% 4%

% Packed Premium & A Grade 91% 91%

% Packed to Sizes 12 to 24 78% 70%

Top 10: 80% production was in the N.T (5 Farms) ,

20% production Mareeba / Dimbulah (5 Farms)

Variety Mix - Top 10 (by Volume Produced )

KP 56%

Calypso 20%

R2E2 13%

Honey Gold 7%

Keitt 2%

Brooks 1%

Total Group Top 10

Yield tonne / ha 8.53 12.3

% Premium 63% 67%

% Sizes 18 – 22 39% 67%

Gross Return / Tray 19.67 26.28

Operating Costs / Tray 16.28 15.71

Operating Costs as % of Gross Revenue 83% 60%

Cash Profit (EBITDA) / Tray 3.99 10.57

Cash Profit (EBITDA) % of Gross Revenue 20% 40%

TOP 10 OVER THREE YEARS TOP 10 (Per Tray)

REMAINDER (Per Tray)

VARIANCE (Top 10 V.

Remainder

VARIANCE + / - %

Gross Revenue Received 24.58 17.93 6.65 37%

Employment 3.50 6.28 (2.78) -44%

Marketing and Ripening 2.67 2.82 (0.15) -5%

Freight 2.12 2.84 (0.72) -25%

Packaging 1.60 2.94 (1.34) -46%

Consultants / Contracting (Incl. Cont Packing) 1.30 2.67 (1.37) -51%

Chemicals & Fertilizers 0.91 1.71 (0.80) -47%

Repairs & Replacements 0.82 1.05 (0.23) -22%

Other Costs 2.53 3.37 (0.84) -25%

TOTAL OPERATING COSTS 15.46 23.68 (8.23) -35%

CASH PROFIT PER TRAY SOLD 9.42 2.20 7.22 328%

Yield (Tonnes per Hectare) 7.09 7.29 0.20 3%

Average FinancialsOver 3 Years

Per Tray Equivalent Per Tonne Per Producing

Ha % of Sales

Total Gross Income (*) 19.67 2,810 24,109 100%

CASH PROFIT (EBITDA) 3.39 484 4,156 18%

Total Operating Costs 16.28 2,326 19,954 82%

Total Employment Costs 4.23 604 5,183 22%

Total Labour & Contractor Costs 5.99 856 7,345 31%

Major Costs – Over 3 YearsPer Tray

Equivalent Per TonnePer

Producing Ha

% of Sales % of Costs

Employment Costs 4.37 624 5,010 22% 27%

Marketing and Ripening Fees 2.15 297 2,551 11% 13%

Freight 2.00 286 2,451 11% 13%

Packaging & Pallets 1.97 282 2,419 10% 12%

Consultants and Contracting 1.24 178 1,524 7% 9%

Chemicals and Fertilizers 1.14 163 1,399 6% 7%

General 1.00 143 1,230 5% 6%

Repairs & Replacements 0.74 106 910 4% 5%

"Median" Sized Farm (Average Performance)Farm Area 38 Producing Hectares Farm Production (@8.5 t / ha) 46,428 Tray Equivalents Gross Return / tray 19.67 $ / Tray Equivalent Revenue from Mango Sales 913,239 $ Income

$ Per Tray Equivalent Per Tonne Per Producing Ha % of Sales

Total Produce Sales Income 913,239 19.67 2,810 24,033 100%

Total Employment Costs 202,919 4.37 624 5,340 22%Marketing and Ripening Fees 99,870 2.15 307 2,628 11%Freight 95,980 2.07 295 2,526 11%Packaging & Pallets 94,701 2.04 291 2,492 10%Contracting & Consultants (Excl. Contract Packing) 59,679 1.29 184 1,570 7%

Chemicals & Fertilizers 54,794 1.18 169 1,442 6%General 48,163 1.04 148 1,267 5%Repairs & Replacements 35,617 0.77 110 937 4%Contract Packing Fees 24,993 0.54 77 658 3%Power and Gas 16,155 0.35 50 425 2%Fuel & Oil 13,389 0.29 41 352 1%All Other Operating Costs 34,996 0.75 23 267 4%TOTAL OPERATING COSTS 781,255.90 16.23 2,319.27 19,905.09 86%

EBITDA (Cash Profit) 131,983 3.39 491 4,128 14%

Assume initial investment and / or LAND plus establish costs and maintaining the orchard to maturity per Ha = $ 25,000 $ 30,000 $ 35,000 $ 40,000 $ 45,000

Capital Invested $ 950,000 $ 1,140,000 $ 1,330,000 $ 1,520,000 $ 1,710,000 30% Gearing results in Interest costs of $ 28,500.00 $ 34,200.00 $ 39,900.00 $ 45,600.00 $ 51,300.00 Return on Investment $103,482.86 $ 97,782.86 $ 92,082.86 $ 86,382.86 $ 80,682.86 ROI % 10.89% 8.58% 6.92% 5.68% 4.72%

THIS ASSUMES FARM PERFORMANCE OF:Yield 8.5 T / HA (7.4 trays / tree at average density of 165 trees /ha )

Gross Return / Tray $19.67Net Return (After Marketing & Ripen) / Tray $ 17.52

Operating Costs / Tray $16.23

“Key Issues / Hit List”

Per Tray Equivalent Per Tonne Per Producing

Ha % of Sales% Of

Operating Costs

Total Employment Costs 4.23 604 5,183 22% 26%

Marketing & Ripening Fees 2.15 297 2,551 11% 13%

Freight 2.00 286 2,451 11% 13%

Packaging & Pallets 1.97 282 2,419 10% 12%

Consultants and Contracting 1.24 178 1,524 7% 8%

Chemicals and Fertilizers 1.14 163 1,399 6% 7%

TOTAL 12.73 1810 15527 0.67 78%

“Key Issues / Hit List”• Price ??• Labour• Marketing• Freight• Packaging• Contracting• Chemicals and Fertilizers• Yield

“Key Issues / Hit List”• Labour (26% of Costs)

1. Process Re-engineering ?2. Using management information ?3. Speed / efficiency setting - (technology verses human oversight)4. KPI system developed ?

“Key Issues / Hit List”• Marketing & Ripening (13% of Costs ??)• Marketing what ?• Feedback systems ?• Information / Knowledge ?

• Accessing key data sets ?• Nielsen ?• Aztec ?

• Marketing what – impact on on-farm practices

“Key Issues / Hit List”• Freight (13% of Costs)• Relationship between carton design & pallet space / cube use ?• Relationship between freight costs and sourcing packaging ?

“Key Issues / Hit List”

• Packaging (12% of Costs)• Imports• Imports V Freight Costs

“Key Issues / Hit List”• Contracting (8% of Costs)• (Does not include Contract packing (3% across BM Group)

“Key Issues / Hit List”

• Chemicals & Fertilizers (7% of Costs)• In Other Words – Nutrition and Pest Management

• NUTRITION………• Resulting Yield (of what)

• Grade• Size

‘The Bucket List’• Yield

• What is the “driver hierarchy” • Nutrition ?• Pruning ?• Irrigation ?• Sources of Information ?• Ongoing benchmarking / industry and process and analysis, and

data focus