Slide 1: Results Presentation, Half Year ended 30 June 2012
For personal use only AUSTRALIAN AGRICULTURAL COMPANY LIMITED Results Presentation Half Year ended 30 June 2012 Australian Agricultural Company Limited
Slide 2: Disclaimer
Disclaimer For personal use only While every care has been taken in the preparation of this presentation, Australian Agricultural Company Limited (“AACo”) and each of their respective related bodies corporate and associated entities and each of their respective officers, employees, associates, agent
Slide 3: Financial results summary
Financial results summary For personal use only Sales $178.6m 10.5% increase compared to 1H11 EBITDA 1 $8.9m 40.5% increase compared to 1H11 NPAT $(4.1m) 53.3% improvement compared to 1H11 Net Debt 2 $375.8m Gearing at 36.1% 3 NTA $2.13 $0.06 NTA increase compared to 1H11 Notes: 1 EBITDA is based on
Slide 4: Summary financial performance
Summary financial performance Summary of financial performance of continuing operations1 For personal use only $m 1H12 1H11 Change Sales 178,577 161,603 10.5% Finished & Store Cattle gross margin 2 40,491 27,252 48.6% Wholesale Beef gross margin 3 2,304 4,145 (44.4%) Farming gross margin 4 4,496 4,4
Slide 5: Financials by segment
Financials by segment For personal use only Finished & Store Cattle sales were stronger than in 1H11 and were derived from 98,306 head at an average Cattle delivery price of $1,056 per head. The increased cattle sales were supported by cattle growth of 42.0 million kg, an 10.9% increase over the sam
Slide 6: Key operational drivers of 1H12 result
Key operational drivers of 1H12 result For personal use only Cattle sold and average selling price1 Beef kgs sold and average price / kg 300.0 1,300 18.0 9.00 16.0 8.50 1,200 250.0 8.00 14.0 1,100 9.5 7.50 12.0 Head Sold (‘000) 200.0 1,000 7.9 7.00 $ / head 10.0 kg (m) $ / kg 147.2 ~145 150.0 900 6.
Slide 7: Cattle Trading
Cattle Trading For personal use only Cattle sales 1H11 Cattle sales 1H12 16% 24% 31% 37% 20% 9% 20% 13% 11% 19% Cattle sales detail (head) Grass Shortfed Breeder Average Sale Wagyu Live Export Total sales Finished Grain and Feeder Price ($/head) 1H12 23,196 9,210 18,668 10,958 36,274 98,306 $1,056 1
Slide 8: Herd movements
Herd movements For personal use only 1H12 herd movements 800 89 680 700 67 54 613 600 578 (98) (9) (0.1) 500 ‘000 head 400 300 200 100 0 Note: Opening branded cattle is equal to closing branded cattle from prior year Australian Agricultural Company Limited 8
Slide 9: Herd profile
Herd profile For personal use only Current herd size is 680,127 head Cattle herd well supported with favourable seasonal conditions across the AACo group Herd composition 1H12 Herd by location 1H12 Herd by Wagyu/Non-Wagyu 1H12 6% 16% 10% 10% 3% 1% 29% 43% 14% 10% 51% 5% 12% 90% Feedlot Trading B
Slide 10: Herd Profile
Herd Profile For personal use only AACo is utilising its superior genetics and breeding programs to maximise profitability, as well as deliver cattle to suit end markets Barkly composite Brahman composite Gulf composite Wagyu program Australian Agricultural Company Limited 10
Slide 11: Operational Update
Operational Update For personal use only The first six months of 2012 has seen AAco benefit from rain Weather received in late March and early April. These rains have ensured that AACo has more than sufficient pasture to deliver on management forecasts for 2012. The herds across all properties are i
Slide 12: Operational Update
Operational Update For personal use only The branding program for 2012 is c.30,000 head behind program due primarily to the wet weather conditions. Brandings In July 2012 a further 25,262 brandings had been recorded and it is anticipated that the program will be closer to plan by the end of August 2
Slide 13: Operational Update - Continued
Operational Update - Continued For personal use only AACo continues to roll out the Individual Animal Recognition (IAR) systems that will allow Technology unprecedented management control and selection pressure over the breeding and trading herds. IAR will provide AACo with improved data and bet
Slide 14: Strategy
Strategy For personal use only After several years of rebuilding, the herd size has stabilised and the company is now in a Stabilise position to begin generating cash on a sustainable basis and achieve “through the cycle” returns. Herd will be opportunistically expanded through “asset light” mod
Slide 15: Farming
Farming For personal use only Significant opportunity exists for AACo to increase contributions from cropping to improve returns across its portfolio Cropping at Goonoo Australian Agricultural Company Limited 15
Slide 16: Darwin Abattoir Update
Darwin Abattoir Update For personal use only Processing facility will have the capacity to process c.1,000 cattle per day at full capacity. Background Will produce export beef products, hides and rendered products for export to markets in the US, Europe and Asia. Financial returns generated by
Slide 17: Balance sheet
Balance sheet For personal use only Existing bank facilities of $450m, with current headroom of ~$84m1 (sufficient to Balance sheet finance AACo’s commitment to Darwin Abattoir) $m 1H12 1H11 Cash and cash equivalents 16.7 20.1 Livestock 492.9 453.7 Property, Plant and equipment 631.1 601.8 Invento
Slide 18: AACo Property Portfolio
AACo Property Portfolio For personal use only Melaleuca Pell TIPPERARY & Leitchfield FLOODPLAINS Tipperary GROUP Maryfield VICTORIA Delamere RIVER Montejinni GROUP Camfield Anthony Benmarra Lagoon GULF GROUP Eva Downs Brunette Downs Wondoola Canobie Avon Downs Dalgonally Austral Downs Carrum Area2 C
Slide 19: NTA breakdown
NTA breakdown For personal use only The carrying value of property, plant and equipment assets is $2.02 / share NTA composition The carrying value of herd assets is $1.58 / share 1H12 A$m A$/share1 Cash and cash equivalents 16.7 0.05 Livestock 490.6 1.57 Trading herd 166.7 0.53 Breeding herd 306
Slide 20: Cash flow
Cash flow For personal use only Cash flow statement Cash flow $m 1H12 1H11 $ Change Net operating cash flow (20.1) (56.9) 36.8 Net capex (9.8) (2.7) (7.1) Proceeds from / (Payment for) PPE 1.0 (2.9) 3.9 Acquisition of Tipperary - (5.0) 5.0 Advance to associate entity (Darwin Abattoir) (2.0) - (2.0)
Slide 21: Operating cash flow
Operating cash flow For personal use only Operating cash flow composition 1H12 (A$m) 180 4.9 1.1 160 59.0 140 120 (33.3) 100 93.2 80 60 (58.1) (10.1) 40 20 0 (62.3) -20 (14.5) (20.1) -40 Net cash from Wholesale Beef Receipts from Sundry Receipts Cattle purchases Wholesale Beef Cropping Costs Operati
Slide 22: 2nd Half 2012 Outlook
2nd Half 2012 Outlook For personal use only Cattle sales are expected to accelerate in the second half of Sales the year. In July 2012, a further 25,346 head have been sold Corn and Wheat Spot Prices 1000 The US drought continues to put pressure on grain prices 900 Pricing which is likely to put upw