Announcement PDF ASX Announcement 5 June 2024 Presentation on NSW Rice Vesting and CY25 Crop Planning Enclosed is a SunRice Group presentation on the recent announcements by the NSW Government on rice vesting arrangements, and an update on CY25 crop planning, which will be presented by SunRice Group Chairman Laurie Arthur and CEO Paul Serra at information sessions to be held today and tomorrow across the Riverina region for growers. Authorised by Kate Cooper, General Counsel and Company Secretary Investor inquiries: Media inquiries: Richard Rose Anthony McFarlane Head of Corporate Development and Investor Relations Head of Corporate Affairs 0410 300 986/ rrose@sunrice.com.au 0447 324 674/ amcfarlane@sunrice.com.au About SunRice’s structure The structure of SunRice contains non-standard elements including its dual class share structure comprising A Class Shares and B Class Shares. A Class Shares confer on their holders the right to vote at general meetings but no right to dividends. A Class Shares are not quoted on ASX and may only be held by rice growers who meet the production quotas prescribed by the SunRice constitution. No person may hold more than 5 A Class Shares. In practical terms the voting rights held by A Class Shareholders give those shareholders the right to control the election of directors and any changes to SunRice’s constitution. B Class Shares are quoted on ASX and confer on their holders the right to receive dividends, as determined by the directors from time to time. Holders of B Class Shares do not generally have the right to vote at general meetings of SunRice. This means B Class Shareholders have no right to vote on the election of directors of SunRice. No person may hold more than 10% of the total number of B Class Shares on issue. For more details of the non-standard elements of SunRice’s structure see: https://corporate.sunrice.com.au/investors/ Ricegrowers Limited ABN 55 007 481 156 Registered Office 57 Yanco Avenue, Leeton, NSW 2705 Australia Locked Bag 2, Leeton, NSW 2705 Australia T +61 2 6953 0411 www.sunrice.com.au NSW Rice Vesting Information sessions 5-6 JUNE 2024 NSW RICE VESTING INFORMATION SESSIONS Welcome & Agenda 1. SunRice Chairman: 2023 ABARES Report and the NSW Government response 2. SunRice CEO: What does deregulation mean, maximising grower returns and CY25 planning update 3. The RGA’s perspective 4. Q&A 2 NSW RICE VESTING INFORMATION SESSIONS Laurie Arthur, SunRice Chairman NSW RICE VESTING INFORMATION SESSIONS NSW Government releases response to ABARES report On 8th April the NSW Government released the 2023 ABARES ‘Independent Report into NSW rice vesting arrangements’ and the NSW Government’s Response to the report (NSW Government Response). What did it say: The NSW Government Response recommended a partial deregulation of NSW rice vesting arrangements, creating two sets of rules for Southern NSW growers and Northern NSW growers, along with new reporting arrangements. These proposed arrangements presented challenges for industry. 4 NSW RICE VESTING INFORMATION SESSIONS The problem with partial deregulation: uncertainty Our preference was for the NSW rice vesting arrangements in their current form to be retained. However, the NSW Government’s proposal for a partial deregulation between Southern NSW and Northern NSW growers, over a prolonged timeframe, would have created uncertainty for our industry at a time when we need greater flexibility to adjust to a new operating environment. 5 NSW RICE VESTING INFORMATION SESSIONS The problem with partial deregulation: water reform The Federal Government’s Restoring Our Rivers Act 2023 Cth increases the likelihood of significant water recovery. The impact of this reform is likely to have an unfavourable impact on the availability and cost of water in Southern NSW and on the Riverina rice industry. Both SunRice and the RGA met with the NSW Minister for Agriculture and the NSW Premier’s Office to highlight potential consequences and our concerns. 6 NSW RICE VESTING INFORMATION SESSIONS NSW Government’s announcement: deregulation After consulting with all major stakeholders, the NSW Government announced last week that it will introduce draft legislation to end rice vesting arrangements by 1 July 2025. Rice vesting arrangements continue to apply for the upcoming crop year (CY25). We believe the announcement is the right decision for SunRice, our growers and the rice industry, rather than a partially deregulated model. 7 NSW RICE VESTING INFORMATION SESSIONS Paul Serra, SunRice CEO NSW RICE VESTING INFORMATION SESSIONS Why is this in the best interests of the rice industry? To retain a strong rice industry, and to maximise returns for our growers in Australia, a dynamic and flexible model now makes better sense for the industry. “Without the regulatory constraints of vesting, we can work more directly with growers to enable the industry to achieve long-term sustainability as we navigate through new challenges, including water reform, that have accelerated the need for the industry to transition.” 9 NSW RICE VESTING INFORMATION SESSIONS Why is this in the best interests of the rice industry? Along with the rice pool, SunRice will now be able to assess new contracting and pricing options for growers which should enable the business to better match supply with demand from our premium markets. These new structures should enable both large and smaller rice growers to participate in the industry in a way that better suits each grower’s circumstances while ensuring more consistent supply. 10 NSW RICE VESTING INFORMATION SESSIONS What’s next? Next steps: • Draft legislation introduced (June). • The NSW Government has announced the formation of a Rice Transition Group. We will be working with the NSW Government, our growers and industry partners to map out the transition and ensure a well communicated and structured transition in the lead up to 1 July 2025. We will continue to focus on improving grower and shareholder returns. 11 NSW RICE VESTING INFORMATION SESSIONS CY25 Planning Update NSW RICE VESTING INFORMATION SESSIONS Industry context to CY25 • Your farm input costs continue to rise: water, fertiliser, machinery, energy prices, etc. • Despite our leading production efficiencies, Australian rice remains higher cost (compared to other countries). • To maximise the paddy price, we have moved away from selling branded Australian rice into traditional lower value markets, which has underpinned the growth in paddy pricing (ie. compared to bulk traded volume sales). • Over the past 15 years we have streamlined milling capacity to optimise our supply chain, better matching supply and demand, to maximise paddy returns for growers. • Over the past 4 crop years, average rice supply has been above premium market demand and milling capacity. SunRice carried out a healthy crop volume from CY23 to CY24 to enable us to efficiently service our markets if forecast drier conditions returned. As a result, we currently have full carryover levels. 13 NSW RICE VESTING INFORMATION SESSIONS Law of Diminishing Returns “SunRice continues to grow our premium ma rkets a nd it is importa nt tha t we ma tch the supply of Austra lia n rice to the dema nd from these ma rkets (ra ther tha n selling excess crop into lower returning ma rkets). This is the best wa y to ma ximise pa ddy returns ea ch yea r.” Paddy price per tonne Return Increased overhead recovery versus declining market returns 50kt 100kt 150kt 200kt 250kt 300kt 350kt 400kt 450kt 500kt 550kt 600kt 650kt > 700kt Paddy tonnes milled (excluding carryover crop) *Illustrative only 14 NSW RICE VESTING INFORMATION SESSIONS CY25 Planting Update Following the feedback, we provided an update on 15 May 2024 prior to the planting window for the CY25 crop: • To maximise paddy returns, we recommended a CY25 planting base from growers that is 30% less than last year’s crop (CY24). • This crop size should assist us to maximise paddy prices for our Riverina growers and enable an optimal milling program through to CY26. • A crop size above this level could materially reduce grower paddy returns. • We will provide further updates as seasonal conditions firm in the coming months. 15 NSW RICE VESTING INFORMATION SESSIONS The RGA’s Perspective 16 NSW RICE VESTING INFORMATION SESSIONS Questions