Australian Tiger Prawn Acquisition

Au s t r a l i a n Ti g e r P r a w n Fa r m Ac q u i s i t i o n * Enhancing Tassal’s total seafood offer in Australia

There is a global trend towards more

Tassal continues to investigate strategic growth

sustainable, efficient sources of protein, which

opportunities which support a sustainable seafood

is driving an increase in demand for salmon and

business and strong returns to shareholders – our

other seafood, including prawns.

acquisition of De Costi Seafoods is a prime example

In fact, demand domestically and offshore continues to outpace supply growth, with salmon now sharing a larger portion of Australian dinner plates than ever before.

Our acquisition of the Fortune Group, including land, assets and inventory, will cement Tassal as one of Australia’s largest footprint tiger prawn farming operations.

Research highlights Australian grown tiger prawns are a clear preference for consumers.

Currently of the ~60,000 tonnes of prawns in the Australian market, Australian aquaculture accounts for less than 10% of this. In comparison, Australian salmon aquaculture accounts for ~90% of ~60,000 market tonnage.

of Tassal unlocking large synergies in the seafood supply market to support increased consumption per capita of salmon and seafood, whilst growing shareholder value.

Opportunities in the seafood value chain need to diversify earnings and mitigate risk – they must present strong efficiencies, be acquired at an appropriate value and ensure they are earnings per share accretive to be pursued.

Salmon and prawns comprise 70% of retail seafood sales in Australia and there has been no material growth in Australian grown prawn supply for over 10 years, yet high consumer demand and pricing.

We are also evaluating regions for possible expansion of salmon farming operations, including further off shore and land based programs.

Combined with farmed prawns, Tassal will continue to drive seafood growth and consumption in Australia.

Tassal is well positioned to deliver responsible, sustainable growth in both salmon and prawns.

M A R K RYA N

Tassal Managing Director and CEO

A B O U T TAS S A L Tassal Group Limited (ASX: TGR) is a vertically integrated Salmon grower and Salmon and Seafood processor, seller and marketer. The Company produces and sells premium Salmon and Seafood products for both the Australian domestic and export markets. Tassal grows delicious, fresh and healthy Atlantic Salmon in Tasmania’s fresh waters and through its De Costi Seafood business sources and processes a wide range of Seafood. Tassal is committed to taking a leadership role in sustainability in aquaculture and Seafood sourcing. The company employs over 1,300 people.

Visit www.tassalgroup.com.au for more information.

Highly EPS Accretive Acquisition

MISSION BEACH PROSERPINE

Beach farms.

Brisbane YAMBA

Adelaide

includes three prawn farms; one in Yamba NSW; and two in Queensland - Prosperpine and Mission

QUEENSLAND

NEW SOUTH WALES

The $30.3 million acquisition of Fortune Group

A further $33 million development program is also earmarked for new infrastructure, remediation and operational improvements, which would increase supply growth from 450 tonnes per annum to 3000 tonnes per annum within the next three

Sydney

to five years.

Tassal will target an EBITDA range

VICTORIA

of $15 million - $25 million within five years, with existing licences.

Melbourne

Hobart

TASMANIA Working capital cycle:

1 year working capital cycle for prawns (3 years for salmon)

EPS accretive:

The acquisition will be funded by a newly arranged debt facility for $75m

Pro forma gearing:

Peak gearing for Tassal Group anticipated at c40% net debt/equity (inclusive of salmon and prawns growth program)

Strategically compelling - Tassal is well positioned to deliver responsible, sustainable growth in both salmon and prawns Tassal has a strong track record on all operational, financial, environmental and societal value metrics in salmon. The first company globally to achieve the gold star in sustainability certification – ASC – across all leases in 2014, Tassal continues to be recognised globally as a leader in sustainability outcomes and reporting.

From a sales and marketing perspective, Tassal has retained a strong focus of optimising domestic per capita consumption which has assisted position aquaculture as the 90% contributor to 60,000 tonne national salmon market. In comparison, of the 60,000 tonnes of prawns nationally, aquaculture accounts for less than 10% - yet demand for sustainable, locally sourced produce is high.

•

Tiger prawns have the highest demand and price

•

Sustainability

•

Key purchase drivers for consumers are:

•

Freshness

– Australian sourcing

•

Aquaculture will meet growing demand

– Price

– not wild caught

Demand for Australian tiger prawns is increasing, with current aquaculture growth opportunity significant.

Tassal will have the superior prawn biomass – striving for lowest cost, best yields and greatest volume

Australian Prawn & Shrimp Production (mt) 25,000 20,000 15,000 10,000 5,000 -

2005

2006

2007

Aus capture (mt)

75%

Type of Prawns

2008

2009

2010

2011

2012

2013

Aus Aqua (mt)

Why Do Customers Choose

2014

Aus capture (mt)

75%

Type of Prawns Customers Choose

38% TIGER

Aus Aqua (mt)

BANANA

9% VANNAMEI

Why Do Customers Choose Which Prawns to Purchase?

17% UNSURE

8.3

Australian

7.9

Price

8.3

Sustainable Sourcing

7.6

Fresh, never frozen

U n l o c k i n g Va l u e Tassal’s De Costi Seafoods distribution capacity to all Eastern seaboard seafood markets within one day, with marketing leading value-adding capability, combined with salmon providing the backbone of all seafood offers, places Tassal in a position to execute a solid prawn sales growth program – driving value for our customers and shareholders.

Prawn farming is a land based operation and provides Tassal with a footprint in high-demand aquaculture beyond Tasmania – achieving geographic and species diversification.

With our focus on optimising domestic per capita consumption – we will aim to increase supply of Australian ‘Aquaculture’ grown prawns, with Tassal to have superior scalability from the prawn farms acquired as well as the ability to lever off its salmon sales with customers.

Through the application and transfer of technology and science to prawn farming, Tassal aims to modernise the Australian prawn industry and increase yield and returns.

L e a d i n g Au s t r a l i a n prawn farming footprint – providing scalability to deliver home grown prawns The three prawn farms acquired by Tassal are geographically diversified for biosecurity and risk management purposes.

Tassal will target prawn supply growth from 450 tonnes per annum to 3000 tonnes per annum within the next five years, supported by a $33 million development program.

Proserpine Farm (Queensland) •

Largest current prawn farm base in Australia, with 192.5 ha of regulated pond capacity on 2000 ha of land

•

Mission Beach Farm (Queensland) and Yamba Farm (NSW) •

operating ponds each and provide

Enhanced processing and hatchery

tiger prawns primarily for major retailers

operations to be established, along

via De Costi Seafoods

with enhanced pond infrastructure to optimise existing license •

•

Output is presently 450 tonnes pa, yet capable of producing up to 900 tonnes pa

Superior farm capacity in Australia for biosecurity

Both farms contain ~40 ha of

•

A new hatchery and enhanced pond infrastructure to be established to optimise existing license

More Information Investors & Shareholders Monika Maedler – General Counsel & Company Secretary Phone: 03 6244 9035 Email: Monika.Maedler@tassal.com.au Tassal Head Office Level 9, Marine Board Building 1 Franklin Wharf Hobart Tasmania 7000 Phone: 1300 827 725