Ridley Corporation Limited · ASX:RIC
Ridley — Macquarie Australia Conference 2010
31 slides from Ridley's conference presentation, May 5, 2010
Slide 1: Ridley Corporation – Macquarie Australia Conference
RIDLEY CORPORATION For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST MACQUARIE AUSTRALIA CONFERENCE 5-7 5 7 May 2010
Slide 2: Ridley Corporation Limited (RIC) is
RIDLEY CORPORATION For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Ridley Corporation Limited (RIC) is: a processor off value-added l dd d agricultural i lt l products Australia’s A t li ’ llargestt processor off stockfeed t kf d products (Ridley Agrip
Slide 3: Financial Highlights
FINANCIAL HIGHLIGHTS For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST FY10 NPAT guidance of $29m (+/- Profit & Loss FY09a FY10f $1.0m) up by 125% from FY09 EBIT - Agriproducts 24.4 28.0 Agriproducts EBIT up 14.8% EBIT - Cheetham 12.9 18.0 Cheetham EBI
Slide 4: Balance Sheet
BALANCE SHEET For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Balance Sheet (A$m) 1H 1H R Reduction d ti iin Total T t l Current C t Assets A t FY09 FY10 reflecting the significant working Total Current Assets 206.3 186.2 capital reduction Total Current
Slide 5: Working Capital
WORKING CAPITAL For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Working Capital (A$m) 1H 1H Reduction in inventory a FY09 FY10 combination of lower input Cash 4.2 10.0 prices, less sites and tighter control over inventory levels Trade Debtors 101.2 89.5
Slide 6: Cash Flow
CASH FLOW For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Group Cash flow (A$m) 1H 1H FY09 FY10 Operating Cashflow of $21.5m, $ Sales ($) 451.8 381.8 representing strong EBITDA to cash conversion of 86% before Joint Ventures EBIT (excl. JV NPAT) 15.6 19.
Slide 7: Ridley Transformed 2008-2010
RIDLEY TRANSFORMED 2008-2010 For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Sale of Ridley Inc - clean, lowly geared balance sheet Cheetham capital upgrades nearing completion – uplift in earnings in FY11 and FY12 Ridley Agriproducts growing from re
Slide 8: Financial Transformation
FINANCIAL TRANSFORMATION For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Sale Post Includes Ridley y Inc. Ridley Inc. Inc FY05 FY06 FY07 FY08 FY09 # FY10f ROFE ((%)) 10.0% 8.2% 6.7% 3.2% 4.7% 9.2 – 9.8% EBITDA ($m) 72.9 81.5 74.4 48.3 41.3 54 - 59 NPAT to
Slide 9: Ridley Agriproducts
RIDLEY AGRIPRODUCTS For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Processor of Value-added agricultural products p
Slide 10: Agriproducts Overview
AGRIPRODUCTS OVERVIEW For personal use only INTRODUCTION OVERVIEW TRANSFORMATION STRATEGY AGRIPRODUCTS CHEETHAM RAW MATERIALS PROPERTY DIET FORMULATION WHY INVEST TECHNOLOGY Ridley Assets Market Monogastric Mills ~12mt of animal feed consumed 1. Toowoomba 2. Mooroopna annually in Australia 3. Pake
Slide 11: Overview
OVERVIEW For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Aqua 3% Segment 1H ∆ 1H Supp's 3% Packaged 6% (kt) FY09 FY10 Poultry 354 371 Other 4% Aqua 16 24 Beef & Sheep 2% P k Packaged d 59 48 Dairy 166 110 Dairy 14% Poultry 47% Pig 167 163 Supplements 13 21
Slide 12: Financial Summary
FINANCIAL SUMMARY For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST AgriProducts (A$m) 1H 1H Fall in sales reflects FY09 FY10 downturn in Dairy Sales ($) 399.5 324.9 Record six monthly EBIT EBIT 10.2 13.7 result of $ $13.7m Depreciation 3.5 3.3 EBITDA 13
Slide 13: A Less Volatile Business
A LESS VOLATILE BUSINESS For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST An increasing proportion of An increasing proportion of volumes volumes from the less seasonal are contracted giving greater poultry markets certainty a lower proportion from mo
Slide 14: Competitive Position
COMPETITIVE POSITION For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Competitive Advantages 9 Southern and Eastern Australia spread of assets, meaning larger national customers can deal with one supplier 9 Lower L volatility l tilit th through h sector t d
Slide 15: Growth Prospects
GROWTH PROSPECTS For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Growing poultry market 9 Increasing consumer preference for fresh white meat products 9 Increasing Ridley market penetration supported by long term contracts – e.g I h Inghams 4 year contract
Slide 16: Growth Prospects
GROWTH PROSPECTS For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Capture C t market k t Long term, L t costt effective, ff ti share - superior surety of quality supply to product & service p provide customer p offering expansion and capital constraint solu
Slide 17: Sustainable Growth
SUSTAINABLE GROWTH For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST 2050 world ld growth th requirements i t #: 9 70% increase in food production required by growing population 9 Meat production to increase by 200mt to 470mt 9 Cereal production to increas
Slide 18: Cheetham Salt
CHEETHAM SALT For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Premium Solar Salt
Slide 19: Overview
OVERVIEW For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Ch th Cheetham owns: 11 solar salt fields with combined production capacity of ~1.4mt 5 refineries (one in Indonesia) including a flake salt plant ~70% domestic market share Joint Venture interest
Slide 20: Overview
OVERVIEW For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Segment- Tonnes 1H FY09 ∆ 1H FY10 Indonesia 5% Other 2% Soda Ash 289k 290k Export 10% Chemical 85k 90k Food 49k 50k Stockfeed 4% Pool 36k 38k Hide 36k 30k Hide 5% Soda Ash 46% Stockfeed 23k 26k Expor
Slide 21: Financial Summary
FINANCIAL SUMMARY For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Cheetham (A$m) 1H 1H Stable EBIT result of $9.5m before FY09 FY10 JV’s, up 2% on same period in Sales ($) 52.3 56.9 prior year but impacted by $1.5m EBIT (excl. JV NPAT) 9.3 9.5 of start u
Slide 22: A Robust Business
A ROBUST BUSINESS For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Increasing diversification of product A high and increasing proportion of sales markets and less reliance on food sector values and volumes are contracted giving Strong growth in swimm
Slide 23: Competitive Position
COMPETITIVE POSITION For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Competitive Advantages 9 Irreplaceable salt field assets a barrier to entry 9 Market M k t share, h price i lleader d and d sector t didiversification ifi ti 9 Majority of the business se
Slide 24: Growth Prospects
GROWTH PROSPECTS For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Projects leading to above GDP profit growth over the next 3 years: 9 Recent consolidation of refineries 9 Recent R t reopening i off P Portt Alma Al salt lt fi field ld d due tto iincreased d
Slide 25: Property Strategy
PROPERTY STRATEGY For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Unlock the potential value of land close to urban centres and surplus to operating requirements – key sites held by Cheetham Realise potential for some small initial sales with subsequen
Slide 26: Lara
LARA For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Lara Salt Avalon Fields Airport Avalon air strip 912ha site adjacent to Avalon airport, Vic Medium term 1-3 1 3 years Land available now 26 Carrying value ~$0.5m
Slide 27: Dry Creek Development Area
DRY CREEK DEVELOPMENT AREA For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST 316ha located 12kms from Adelaide CBD Longer term 5 years+ Salt field relocation required Crystalliser Ponds Recent Delfin development Adelaide CBD ~12km 12km 27
Slide 28: Dry Creek
DRY CREEK For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Key asset is the potential Dry Creek redevelopment redevelopment, 12kms from Adelaide CBD State Government 30 year plan for Greater Adelaide, within which the D C Dry Creek k salt l fi field ld
Slide 29: Why Invest in Ridley
WHY INVEST IN RIDLEY For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Lowly geared at 28%, 28% with the facility and debt servicing capability to be proactive and opportunistic Strong conversion of operating result to cash Market leader in salt busine
Slide 30: Why Invest in Ridley
WHY INVEST IN RIDLEY For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST Agri-sector Agri sector stock but focused on diversified intensive feed solutions driven by Australian domestic food consumption High natural risk mitigation through broad sector and
Slide 31: Ridley Corporation
RIDLEY CORPORATION For personal use only INTRODUCTION TRANSFORMATION AGRIPRODUCTS CHEETHAM PROPERTY WHY INVEST We ffeed the ffood that ends upp on y your pplate Premium Solar Salt 31 Ridley transformed and now a compelling proposition