Good morning. I'd like to welcome you to Scales' interim results announcement for the six months ended 30 June 2026.

With me is Ben Washington, Scales' CFO. Earlier this morning, we lodged our results with the NZX, which included the presentation pack that we'll base our comments on for this call.

Ben and I will run through the slides then take questions at the end. An agenda is provided on slide 2.

We thought we'd start our presentation on slide 4 with a quick recap of the Scales Group, three global operating divisions, which all have different business models, but all operate within the agribusiness sector. Global Proteins has two main business areas: the manufacture and supply of petfood ingredients, and the supply of edible proteins.

Horticulture comprises Mr Apple, our vertically integrated apple business; Fern Ridge Fresh, a fresh produce exporter; and Profruit, a premium juice manufacturer. Logistics provides air and sea freight services to both internal and external customers, primarily within the perishable food sector.

As you can see from slide 5, we're a truly global business, spanning multiple geographies, but with a focus on the North America and Asia markets. On to our results for the first half of 2026, and as you can see from slide 6, it's been another very positive period with record first-half earnings.

This has been driven by both organic and transactional growth, in particular the M&A activity that we undertook within Global Proteins last year. Putting some numbers to those record results: revenue increased 105% to $762 million; underlying EBITDA grew 18% to $102 million; underlying NPAT rose 10% to $62 million; and underlying net profit attributable to shareholders increased 7% to $52 million.

As a result, earnings per share has increased 2 cents to 36 cents per share for the six-month period. In respect of the divisions on slide 8, I'm pleased to report that we had top-line revenue growth across all divisions.

Within Global Proteins, our EBITDA margin was impacted as a result of our increased shareholding in the edible proteins businesses in the third quarter last year, as this is a higher-revenue, lower-margin operation. However, petfood ingredients margins grew strongly.

Horticulture had another solid growing season with a further shift towards premium varieties targeted to the Asia and Middle East markets. Sales run rates were very strong in the first half of the year, and this offset a slightly lower packout rate.

Lastly, Logistics performed well, continuing to increase volumes despite ongoing geopolitical issues and continuing to deliver best-in-class service to both internal and external customers. I'll now pass on you to Ben, who'll run through the financial results for the first half of the year in more detail.

Thanks, Andy. For those of you with a copy of the results presentation, we're now on slide 10.

This slide comprises the key financial metrics for the group for the first half of 2026 compared to the first half of last year. I will refer to the financial results measured on an underlying basis, which includes the effects of IFRS 16, but excludes the impacts of acquisition accounting and certain one-off items detailed in the appendices of the presentation.

I'd also just like to note an impairment provision of $19.7 million has been recognized within our reported earnings in respect of the loan to the Esro petfood joint venture. This impairment has been excluded from our underlying results.

As you can see, revenue has more than doubled year-on-year, primarily due to the consolidation of the edible proteins business from the third quarter of last year. This has also contributed to the changing gross margin mix between the two periods.

Whilst operating expenses increased with the consolidation of edible proteins business, we did achieve operating leverage overall. As a result, operating expenses as a percentage of revenue decreased from almost 8% in the first half of 2025 to 5.5% for this year.

As Andy mentioned, the group result is a strong profit growth for the first half year, with underlying EBITDA increasing by nearly 18% to $102 million. The underlying net profit after tax attributable to shareholders increased by nearly 7% to $52 million.

The next slide summarizes our financial position. Whilst there are several movements between June 2025 and June 2026, it's important to note that the balance sheet at 30 June last year did not include the edible proteins business or Meateor Australia.

It is therefore important to consider the position as at 31st of December 2025 for comparative purposes. In addition to the effects of bringing in the edible proteins businesses, net working capital at 30 June 2026 has increased by a faster sales run rate in Horticulture, increasing the June receivables balance.

Net debt is also impacted by Horticulture's seasonal working capital, together with high input costs of inventory for Global Proteins. Whilst the quantum of the net debt balance at 30 June 2026 has increased compared to both June '25 and December '25, it remains only 0.7 times the rolling 12-month EBITDA, similar to other periods.

As in previous years, we expect net debt to reduce in the second half of the year as Horticulture's seasonal working capital requirements unwind. In other words, as cash is collected from our Horticulture debtors.

Finally, the group has extended its term debt facilities with Rabobank and Westpac for a further three years. On to slide 12, the movement in net debt between December and June can be apportioned into four main areas: firstly, strong cash earnings from each of the divisions; a disciplined approach to capex, predominantly within the Horticulture division; payment of dividends, including those in respect of our non-controlling interests; and as I previously mentioned, an increase in working capital, largely seasonal from the horticultural division.

Moving on to a review of the divisions, starting with Global Proteins. As you'll see on slide 14 of the presentation, in addition to presenting Global Proteins underlying results for the six months to 30 June 2025, we've provided pro forma results as if the increased investment in Meateor Australia, Fayman International, and ANZEX Exports had taken place from the start of 2025.

This offers a year-on-year comparison of the division on a like-for-like basis. Of particular note is the reduction in EBITDA margins in June 2026, which as previously mentioned is due to the higher-volume, lower-margin model of the edible proteins business.

However, EBITDA margin is significantly more comparable between June '25 and June '26 when viewed on a like-for-like basis. Most businesses within the division performed well.

We're seeing strong demand for global petfood ingredients. However, supply remains tight across Australia and New Zealand.

Shelby delivered a very strong result, driven by favorable product mix and a new in-plant collection facility. Meateor also contributed strongly, driven by positive demand.

Unfortunately, the divisional results were impacted by the disruption of Esro petfood, which has provided us with some challenges. Our immediate focus is to stabilize operations and assess the long-term strategic plan within the region.

On the edible proteins side, the Fayman business continued to grow sales across Asia and the US. As you can see in the pie chart on slide 15, around 57% of our total protein volumes were sold to the North American market.

We source product in this market both locally and globally to meet customer needs. Asia was our second biggest market at around 30% of sales, with the addition of the edible proteins business growing sales into both Asia and North America.

Petfood ingredient volumes grew around 11% due to our investment in production capacity in prior periods reaching operational levels. This, along with improved efficiencies, also increased petfood ingredients revenue and underlying EBITDA per kilogram.

Moving on to Horticulture on slide 16, which produced another solid result. Whilst there was some disruption to Middle East sales, this was compensated by robust demand in Asia.

As mentioned, Mr Apple's sales run rate was higher than last year at around 66% of our forecasted own-grown export volume being sold as at 30 June 2026 compared to 54% last year. Profruit had another solid six months with healthy production levels, comparable sales volumes to last year, and strong sales in the US market.

Increased fuel costs and freight from the Middle East conflict have impacted EBITDA margin. On slide 17, we continue to see an increase in the proportion of sales to Asia.

We expect sales to the important Asian and Middle East markets to account for around 91% of export sales volumes this year. This compares to around 84% last year.

Mr Apple's total export volumes are forecast to be around 3.5 million TCEs for the year with a packout rate of around 75%. Whilst both of these metrics are slightly down on last year, they've been offset by a continuation of our strategy to increase market exposure to Asia and Middle East and increase the proportion of Mr Apple's premium variety volumes to 79%.

Once again, Dazzle and Posy have driven the premium volume growth as plantings of these varieties approach maturity. Lastly, on to Logistics, which produced a robust result with underlying EBITDA down only 6% from last year's exceptional first-half performance.

This is particularly pleasing, considering the ongoing geopolitical tensions and associated fuel price challenges. There was a significant increase in demand for air freight, primarily from the dairy sector, together with modest increase in seafreight volumes.

I'll now pass you back to Andy.

Thanks, Ben. Sustainability remains at the forefront of our mind and we continue to make progress on our ESG and sustainability projects and goals.

A selection of projects is shown on slide 20, and I'd just like to touch on a few of them. The availability and efficiency of energy is important to us from both an environmental and cost point of view.

Consequently, we're currently assessing our process and technology options in order to improve our energy efficiency and to ensure resilience towards energy availability and cost. In respect of our people goals, we're committed to ensuring that Scales is the best workplace that it can be.

Mr Apple has had a people strategy in place for several years, and I'm pleased to say that we've leveraged this knowledge and have implemented our first formal group-wide people strategy, extending a common framework across the group. We also recently completed a gender pay gap assessment across our New Zealand businesses.

Our first pay equity review was undertaken in 2020, this more recent assessment provides us with an up-to-date baseline going forward. Lastly, I'd like to update you on our key divisional strategic priorities and provide an outlook for the full year.

On to slide 22 now. Within Global Proteins, one of the most pressing priorities is to stabilize Esro petfood, and in conjunction with that, assess the long-term plan for our European operations.

We'll also focus on broadening our supply base in Australia in what has become a relatively tight supply market. This would diversify any potential associated supply risk.

Horticulture's long-term strategy of investing in premium varieties targeted towards the Asia and Middle East markets continues, with an ongoing orchard redevelopment program. We also continually assess efficiency and automation opportunities within our post-harvest operations.

Lastly, Logistics is focusing on what it does best, which is deliver best-in-class service to both internal and external customers while navigating volatility in the global freight market. The division continues to actively pursue new customers, whilst continuing to strengthen long-standing relationships with existing customer base.

In respect of the full-year outlook, the directors would like to advise an increase in the FY 2026 guidance range of underlying net profit after tax attributable to shareholders to between $55 [million?] and $60 million.

In providing this guidance, directors would like to note Mr Apple's sales run rate for the first six months this year was higher than the run rate in the same period last year. Around 7% of Mr Apple's export crop is to be sold, which compares to around 18% this time last year.

Ongoing geopolitical tension in the Middle East and final pricing remain areas of risk. We continue to remain cautious in Global Proteins due to ongoing geopolitical uncertainty and tight product supply in certain markets, but we remain confident with the medium-term outlook and strategic growth initiatives that we have in place for the division.

Our Logistics business has successfully managed the impact of geopolitical tension, increased fuel costs, and ongoing freight disruption in the first half of the year. However, we'll keep a close watch on the ongoing impact of this disruption in the second half of the year.

That concludes today's formal presentation. I'd like to direct you towards the appendices, which provides additional information, including the reconciliation of reported earnings to underlying earnings for the group and each of our divisions.

We're now happy to take questions.

Hey, morning, guys. Congratulations, Andy and Ben and the wider team, for a really good result.

No worries.

Kicking off with the guidance range. You've obviously upgraded it, and there's a bunch of assumptions that bookend the top and the bottom.

Can you just run me through what you're assuming for the divisions at the top and the bottom end?

We've kept it pretty broad, as with our guidance, Rob, in terms of not being directly specific about each of the divisions, but clearly on the downside, we've got the bring in quite a lot of debtors from the apple sales of apples, and we do have increased opportunity for quality claims. We've factored those in relative to the bottom and the top of the grade of the guidance.

Maybe a couple of other observations there, Rob. We obviously had a record result for the Horticulture business last year.

We don't anticipate we'll repeat that year-on-year. Equally, you'll see in the numbers we've had a very good result for Global Proteins.

We don't anticipate, I guess, that run rate to necessarily continue through the second half. There are some challenges around supply in certain markets, and we've had some very good favorable contracts through the first half.

Thanks. Just on that, Global Proteins, it looks like Shelby had a really good first-half growth.

If you look at that UNPAT to minority shareholders, which is mostly Shelby, it seems to me, that was up about 32%. The guide is assuming a pretty big deceleration in the second half.

It looks like the guide range is for a -3% to -16% fall in the second half for that UNPAT to minorities, again, which is mostly Shelby. What's driving that?

There's a couple of things there, Rob, and it's a little bit complex. With the Esro petfood piece, we've obviously taken control of that for the accounting purposes, the minority interest is going to go through for Esro petfood there in the second half as well, so that's sort of compensating.

My observation or my comment on Shelby would be that we would expect it to deliver some growth on the second half of last year. We just don't think it will repeat the run rate of the first half.

Cool, that's great. Thanks a lot, guys, for the improved disclosures.

Just in terms of what all the divisions did within Global Proteins, I can see the organic Global Proteins net profit is up 7%, but the net profit to shareholders is down a couple of percent. Looks like Meateor New Zealand's up about a mil, Shelby SBS is up a little, which is great.

Esro Europe is down about 2 mil. Can you just talk about what you're seeing in Fayman International and Meateor Australia in the half?

The Fayman International business has grown year-on-year top-line sales. The margins are under pressure in that business.

Gross margins under pressure a little bit year-on-year. The Meateor Australia business has had a very good first half.

We have acknowledged that supply is tight, but I think a key beneficiary for us in that first half has been we carried some inventory over in the first half. We don't have that same luxury in the second half in a tight supply market.

Thanks. Then just in terms of the next steps for Esro Europe, it kind of sounds like you're perhaps considering the viability of the operation.

How how soon could that be wound down, and what kind of losses would it incur while that's happening?

Look, pretty very manageable for us. We're working through obviously our joint venture partner had some difficulties, their entity that went into administration.

We're in the process of, as Ben says, sort of taking control of it. We look pretty confident of getting a solution through this next period to the end of the year.

We want to continue operating in that geography as it's a massive market and a good opportunity. Remains a good opportunity for Scales Global Proteins.

Cool. That's great.

Hey, thanks very much, guys, and have a good day. Thanks.

Thanks, Rob.

Oh, good morning, team. How you going?

Good, thanks, Adrian.

This might be a tough question to but just looking for a ballpark. I know particularly for Mr Apple, FX is kind of wrapped into the broader negotiations.

Is it possible to sort of call out was there any sort of supernormal FX benefit that you kind of I guess benefited from in the first half? Obviously the NZ dollar was quite weak.

Just wondering if there's anything you could isolate on that front for us.

On that one, we are hedged sort of five years out, it's largely all hedged, Adrian. There is a little bit of currency benefit, but it's not significant in the first half, but it's pretty modest.

Okay. All right, no problem.

Then just maybe staying with you, Ben. Just in terms of those Esro challenges, are they sort of normalized in the proteins number, in the underlying estimates you've provided for that division?

Yeah. The trading performance is included in the underlying result, and it is included in the forward-looking view.

The only thing we've stripped out is the provision for the loan from the underlying performance.

Okay. Then the counsel you're giving us for the second half is that Esro will join the non-controlling interest, is that right?

Correct. From an accounting perspective, we'll consolidate 100% of the result, and then 50% of it, whilst we remain in the 50% joint venture, will go through the non-controlling in the second half.

Have you got a have you made a placeholder for that, like like within this

Like,

are you able to give us Like, are you able to kind of Like, obviously that's hard for us to have any sort of idea on.

Like

how material is it?

I think we've given you the first-half performance, which is sort of a $3 million loss for our 50% share. We wouldn't expect to repeat that necessarily in the second half, it'd be an improvement on that in the second half.

We don't expect it to be profitable.

There's a, yeah, somewhere between a minor loss and half of that loss would be reasonable for us.

Yep.

Okay. Just in the Apples business, I guess at this point in time you've sold more, and the packout rate is lower compared to last year.

Would it be reasonable to kind of expect sort of around about a $10 million loss at the NPAT level for the second half?

It's within the ballpark, yep.

Yeah. Just in terms of the efficiency options that you talk about, I think Andy was talking about that on slide 20 20 2, how linked or contingent are they on your sort of activities that you sort of a bit quite watchful on the industry consolidation?

Not really, no. It's, one of the ones is in Profruit.

We're a big gas user there. The prices have gone up for gas and electricity, we're just looking at ways to get more efficient in that business.

Some of the specialist equipment in there is getting quite aged, if you want to call it that. There's probably an investment, and the payback's super good because the new kit uses a lot less energy on a per kilogram, if you want, of product.

It's really in those sort of areas, Adrian, that we're trying to look for improvement. Definitely.

I think the other one, Adrian, is there are some efficiencies which we've identified in some of our proteins businesses around plate freezing and the likes, where we think we can invest some capex and get some efficiency over time.

No, that's helpful. In terms of Horticulture, I guess the big strategy that you're calling out has driven the value is essentially the shift up into the premium varietals, where you're running at kind of just under 80% at the moment.

This stuff is more just sort of backfilling just to kind of keep a watchful eye on the costs and then I guess the industry consolidation allows you to sort of optimize the orchard land that you've got and potentially take on a few more opportunities as they sort of fit in on the varietal and the price front. Is that sort of how you would see that vertical?

We've certainly picked up a number of leases. I think in total about 100 hectares, 80 to 100, of leases that have come out of that range of, if you want to call it, business failures in the Hawke's Bay.

On that, is that over the first half?

It was a bit of last year as well. We've picked up some late in the year and we've picked up some more recently, yeah.

Okay.

They are really just helping us target more growth for our premium varieties and help keep the volume stable as we redevelop, yeah.

Okay. Then, maybe final question, in Logistics, you're calling out, I think the air freight boost from a dairy sector.

Do you think that has sort of crested now with the Middle East, or is it still ongoing?

Look, it comes and goes. It's a bit, certainly, we love it when it's full bore, but, yeah, you're right.

The continuity of it is variable, let's just say.

Okay. There's not a dollop of that sort of forecast in the second half for Logistics.

It's sort of back to sort of I guess normal,

what

is quite difficult to describe. Back to normal in an abnormal place.

Exactly.

All right. Thank you, guys.

That was good.

Thanks, Adrian.

Hey, guys. Thanks for taking my questions.

Just a couple of quick ones. The first is just on Esro, and now it's been a challenging sort of six months, but sort of now at the operational level, what has changed after your JV partner going into receivership?

What do you have control of to sort of give us a little bit of comfort that that $5 million loss does tighten up in the second half?

Look, A, we've got people over there. Three of our senior people have sort of been in that business working with the team on operations, working with the suppliers and the customers to stabilize it and get it back up to where it was.

Prior to the intervention, the business was profitable. It was doing solid volume, and that's come off, and we're busy looking to get it back to those sort of levels, and we expect to see good progress of that in the second half.

]:

Awesome. Thank you.

Then just a second one on Global Proteins. Even on a like-for-like basis, you did see a little bit of that margin squeeze at the EBITDA level, sort of, yeah, 140 basis points or so.

Does that come down to the supply issues you're talking about, and how should we think about that running into the second half? It sounds like it's still pretty challenging out there.

I think there's two components to that piece, Paul. The petfood ingredients business actually margins have been really healthy and actually grown.

It's on the edible piece that the margins have been a bit compressed and challenged, and obviously it's a bigger weighting, it skews the overall part, if that makes sense. We've actually seen good, healthy margin growth for the petfood ingredients side of the business.

It's on the edible piece where the margins have been a bit of a tighter year-on-year. ]:

Yeah. No, awesome.

That makes sense. Then maybe just the last one is, you used to have the slide on some of the initiatives you were working on in the US, and one of those was that fish and poultry JV that you guys started up over there.

Could you just give us a little bit of an update on how that's progressing and how that fits into the plan?

Going really well. It's a startup, if you want to call it that, it's not a high investment, but got a great team of people working with us there, and they're picking up volume.

It's a trading business at the moment, and as we continue to look for opportunities to deepen the involvement, I suppose, by starting processing like what we do with Meateor and Shelby. ]:

Cool. Awesome.

Thanks. That'll do me, and congrats on a good result, guys.

Thanks very much, Paul.

Cheers, Paul. Thanks.

Thank you. Morning, guys.

Just a quick question. Rob's assumption that the vast majority of the non-controlling interest relates to Shelby, A, is that correct, and B, can you give us a steer on how that whatever the number is, 10-point-something million, does actually split between the two minorities?

For the first half, the non-controlling interest is largely the Shelby business, as it has been. I guess it's in the forward view that from 30 June, we'll be consolidating 100% of Esro in the second half.

Does that clarify, David?

No, the 15% of ANZ Exports, is that zero?

It's not zero, but it's pretty minor in the context, in the first half.

Smaller

part of the business.

Less than 1 or less than 5 or?

About 1, isn't it?

About 1, yeah.

About 1. That's helpful.

Thank you. On the Horticulture business, the packout is obviously slightly weaker than you suggested at the end of May.

It looks like the aggregate result for Mr Apple was going to be fairly similar to what we were expecting. It presumably implies that pricing has been reasonably decent.

Could you comment on what pricing has been like both for the traditional and the premium varietals, sort of underlying relative to PCP?

Yep, we've definitely seen some really strong pricing on the premium varieties, and we've seen some good pricing also on the traditional. I think there's been a mix shift as well, where the product has gone.

We've seen strong demand from Asia. We've obviously seen some challenges into the Middle East, and that change in market has certainly been beneficial across both varieties.

I think last time you spoke, you were suggesting that the PCP was particularly buoyant because you had larger-than-normal fruit size, and that for reasons which I still don't understand apparently leads to better pricing on a per-tray basis. The sort of suggestion was, bearing in mind you're normally somewhat conservative, that like-for-like in-market prices might be down in '26 relative to '25.

It sounds like that's been overly cautious, is that fair?

Probably. Look, I think what's happened, as Ben said, is if you're selling less to the Middle East than we thought and more to Asia, Asia sells better than Middle East anyway.

That's really compensated a lot, David. It's been a strong market in Asia.

The Chinese market had a tough weather event during their harvest, we were selling into a very, if you like, open and nearly not empty, but a positive market from the get-go.

Right. That makes sense.

Thank you. Just on the sort of weird accounting you have to go through with regard to Mr Apple, obviously last year, for want of a better word, there was far less spoiled fruit than you'd anticipated at the half year, and that got adjusted late in the piece, from memory, hence the sort of bumper result from Mr Apple last year.

Can we be confident that—and I know you're looking forward, and that's the difficult kind of forecast—but can we be confident that this year is more likely to be a kind of normal second-half first-half split? I.e., not a lot of profit coming in in the second half, that would seem to be consistent with previous comments around Mr Apple: a good year, but not quite as good as last year?

That's right, David. We've gone back, it's obviously difficult to tell, we've still got some time to play out, but we've gone back and looked at sort of the historical averages and used that as a proxy for what we think claims and spoiled apples, as you called it, maybe in the second half.

We've gone back to a conservative sort of position that we've looked at historically over time. I wouldn't expect it to be the result we had in the second half of last year.

Right. Thank you.

Just you don't really disclose much on it, but Profruit, is that just up or down relative to last year, given the issues you've talked about?

Slightly back, but still on track for what we thought it would do.

Right. Thank you.

Just finally, is there any sort of, given the sort of way that working capital yo-yos around 1H and 2H, is there any sort of steer on where we should be thinking the full-year net debt number might come in at?

It should come down from a reasonable amount from where it is. We've obviously with that higher sell-through rate of Horticulture, we've got a lot more receivables on our books.

We'd expect that to convert to cash in the second half. We definitely think there'll be a reasonable reduction in net debt between the half and the full-year result.

Right. Okay.

Hey, thank you very much.

Thanks, David.

good morning, guys. Just a question more about looking forward.

You're describing this El Niño event as a super one. In prior experience, how has El Niño maybe impacted on the trees' productive capacity going forward?

If you do get a super-dry period, what has that sort of done to production?

We're pretty well protected from drought and or dry conditions with our good irrigation, water rights and irrigation systems, Greg. Hot, dry summer for us is what we would prefer that than a wet summer, believe it or not.

The more sun the apples get, the better in most cases in terms of color, and then keeping the water up is important during a dry period, but we've got good water takes and systems.

Thank you.

Thanks.

Thanks very much, everybody. Appreciate the interest, and we'll look forward to providing you with an update later in the year.

Thank you.