Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — H1 FY2003 Earnings Presentation
27 slides from Australian Agricultural's earnings presentation, Feb 11, 2003
Slide 1: Half Year Results Presentation
MM LLL Mn Le co) Li Wy Le ED Ne Ll Ly Lee as a ae iE LLL Cae Lee LLL Lo a a ae 0p y Li Li ge a LLL es Te i Lo Lo oe Lo Lp Lo Lo ae 7 A) 7 i SE Le Lo LL Le a Sie Lo ie i ] es Half Year Results Pre 10 20GB LC Lo Le a Eas Lo LL) SDE ns LL) i Ly L/L oo Oe a ae LS ae Ly LL as LN I) Lp Le ee LLG Ly Le es
Slide 2: Agenda: CEO Overview, Operations, Financials, Outlook
e CEO Overview Peter Holmes a Court e Operational Performance Don Mackay e Financial Performance Luisa Catanzaro e Outlook Peter Holmes a Court
Slide 3: Peter Holmes a Court
PEL MUP oH IE WL IY ELSE ay Peter Holmes a Court tg, pit th i, hp I i le EOE OE wie) 4 i a Wo fad Team sei — Sagat Vy py, ie ‘i : F min - LE ys san — [langal” o DLOMigg) Nf a (ogee fe Ee b, y ob i UA. He ‘h Tons E u Hall je Small ae : = ie ig i | Ve AF le ua ae il UE Uh le vi is WE a til We ww We Ey
Slide 4: Earnings in line with expectations and on track for full year result
Earnings in line with expectations and on track for full year result as per previous guidance Dry conditions throughout first half FYO2, increasing operating costs, supplementary feeding, grain and cattle expenses Slowly rising average cattle prices since 30 June 2002, supporting decision to hold ba
Slide 5: Stated goals by year end '03 and status at 31 Dec 02
Stated goalsbyyearend’03. =S—i‘<‘sé~~C#SStatusat31zdDec O22 eens Projen Refresh. to ave . pice and safety core i... Increase grain-fed beef production by 50% wf . . : “Aronui- . “Implement direct sales into Asia of _ Platded ‘product : Eas — rollout of 1824 ‘beet f brand ‘Increase Chefs Partner sale
Slide 6: Stated goals by year end '03 and status at 31 Dec 02 (continued)
Statedgoalsbyyearend’03. =—s—i(‘<i‘éC*~*‘*SStatus ast Dec O22 Increase managed herd to 100,000 head ~ “Ontrack =RMP | Pursue opportunistic property acquisitions nf . Gregory Farms . —r—“a‘—rrC—OCiCSsSsSs—Sr—S”~—S™r—FONOCCiCiCi=SCSCS sis ce i#i-§ ia fe | . - 5 . Grow value added revenue from 1% to >
Slide 7: Pin,
Pin, tay, i. “Sewell a sacl [pee poe [oe coe en, Be ee Tiguan il i eect i i ie ome He (i peace ie ie ie ie ping, a “aaa Ah sae a | b poy, yore Heavens fa de ia a gy, joy He ay ei, pore, pore fete power got, potty, yp fp io | Thee!! lee EE tad DP AP pet oper pee pe 2 i val a Cn ee | [P= , i ho ( [ey
Slide 8: Continuing to manage market and seasonal conditions
Continuing to manage market and seasonal conditions Herd numbers maintained and breeding herd increased by 3% since 31 Dec 01 Prices for quality cattle increasing since June 2002 Integration of Aronui feedlot 90% complete Received accreditation ISO 9001:2000 — Quality Management Systems
Slide 9: Herd size and change from 31 Dec 01
Change From AACo 31 Dec 02 Herd Size 393,136 Breeding Herd 190,886 Calving % 83% Beef Sold (6mths) 17.8 (million kg) 1 — Source: MLA Industry Projections Summary 2003 31 Dec 01 V 4% A 3% A. 2% A 27% | Forces 03 change from ‘02 _ fetenai Nerd vy
Slide 10: Herd as at December 2002
As at 31 December 2002 Herd $ Value per % Change in Market Number Head Value per Head Trading cattle’ 202,250 384 A 12% Stud Cattle 16,135 1,095 DL, 2% Breeding Cows 167,764 471 A 3% Herd Bulls 6,987 2,689 Ly 5% Total 393,136 493 Ly 6% Note 1: Trading cattle includes 5,409 company-owned at Aronui Ch
Slide 11: AACo Weighted Average Indicator Price
(OOL = LO, UEP e01Lg OOVY) 1 t t Q Qo Q Q Qo =) N ha 7000 + 6000 + 5000 + 4000 + 3000 + (j@ag Jo By Jo 5,000) on@=e AACo Weighted Average Indicator Price (-1Volume (kg. Dw) 6 months
Slide 12: (s|aaa| 4Sg-aid 0} sBueyD %)
1 2 3 4 -55 (s|aaa| 4Sg-aid 0} sBueyD %) -65 Jan-03 Dec-02 Nov-02 Oct-02 Sep-02 Aug-02 Ju-O2 Jun-02 May-02 Apr-02 Mar-02 Feb-02 Jan-02 Dec-01 Nov-01 Oct-01 Source: AFFA 2
Slide 13: Rainfall for Months: Nov 2002 to Jan 2003
Rainfall for 3 Months: 1 Nov 2002 to 31 Jan 2003 AACo Stations 10,000 cattle (Nov ‘02 to Jan '03) Highest on record Very much above average Above average Average Below average Townsvilte Very much below average Lowest on record Brisbane Source: Commonwealth Bureau of Meteorology Rainfall from 1 Nov
Slide 14: Domestic and export market conditions
e Domestic market strong, and showing no signs of slow down e Japanese market slowly improving after BSE/Mad Cow to pre-BSE levels e Korean imports showing strong growth e Live exports from Australia continuing to grow
Slide 15: ron BD an a ae peering, ers poe, pros grag, yur, an ae ae
ron BD an a ae peering, ers poe, pros grag, yur, an ae ae ce IL IE i CPd ‘nn oo eih FR UEP TT t We £ I an i mes Pw gb PO Tf boo a i oe Fone ii ae BS aaa Hons b& & & ik & a £€ & & [pry peas leery, se, (PPP A get, pene fy Py bP ok Fee i i : . i . TE “ay iy Eo fo I eh, WE WEEN, Duce Bele" 2 heen (EE, S
Slide 16: FY03 earnings expected lower than FY02
e FY03 earnings expected to be 10 — 20 % lower than FY02 e Efficient capital management a key financial objective e Expect stable dividend payment e Strong balance sheet underpins further investment in strategic cattle properties and in the value-adding meat supply chain
Slide 17: Solid Result Under Difficult Operating Conditions
Solid Result Under Difficult Operating Conditions 1H 1H 1H A$m FY03 FY02 FY01 SGARA Cattle Revenue 40.0 68.4 41.5 EBIT 7.1 41.2 17.0 Million kgs beef sold 17.8 14.0 12.3 Gross sales $/head (average) 704 940 766 Net market value increment booked to SGARA cattle revenue for 1H FY03 was $5.0m compared
Slide 18: Half year EBIT bridge 2002 to 2003
10.4 38.8 41.2 0.7 Half Year Cash Non-cash_Increasein Increasein Increasein Half Year 2002 EBIT Increase in Decrease in Other Feed and Biz Dev., 2003 EBIT Cattle Cattle Revenue CattleCosts Station & Trading Inventory Other Costs
Slide 19: Cash flow 1H FY03 vs prior periods
1H 1H 1H A$m FY03 FY02 FY01 Net operating cash flow (1.0) 7.1 0.2 Net investing cash flow (24.1) (7.2) (2.0) Net financing cash flow 8.9 8.0 (2.1) Net cash flow for 6 months (16.2) 7.9 (3.9) Net operating cash flow (pre interest & tax) 5.7 7.7 1.4 Expansionary capex 19.8 4.8 -
Slide 20: Gearing at Dec 2002 at 46.3%
Gearing at 31 Dec 2002 at 46.3% Target gearing of low 30%’s by year end FY03 Balance Sheet strength: Assets at 31 Dec 2002 ($Am) Livestock 194.9 (marked to market) PP&E 119.0 (last booked L&B revaluation - 1995) Other assets 18.2 (mainly commodities) Intangibles / FITB 4.1 Total 336.2 20
Slide 21: postin
postin Na Z “ig ff i Ul eco s, ie ie ie ie ie or sss HP, Wy Bae TLE Peter Holmes a Court poste Erato iE ey, Weep J WE Bema ff Ve Hien ile Ve ie imo
Slide 22: AACo Strategy - What we're building
AACo Strategy - What we're building #1 Cattle Company (‘Cattle Co”) ao aS Well balanced grass and grain production for domestic and export markets #1 National Fresh & Cooked Meat (“Food Co”) aS SS Branded products meeting customer demands (1824, Polkinghornes, Jesters, Kobe Cuisine) 22
Slide 23: No changes to the outlook guidance
No changes to the outlook guidance Continue to manage for seasonal conditions Operational integration of acquisitions Actively pursue further acquisition opportunities
Slide 24: {fons
{fons Prey, bo} Hct prover bem Hawt th [PPM Pity yo iL ll i rep d Lc hy pene yeah Mead sa ¥ Ey, Peo i, ia TE ual te pees Te te te ll e FG a ee ype, yy, hob Eg bop aa Haul! Maal limes pore goto —- Ub, i EZ, i EG, i 7 ia nA Hh He Ae og : (Pei, 1G Wh TE ia
Slide 25: Herd Movement during months to Dec 2002
Herd Movement during 6 months to 31 Dec 2002 500,000 5 50,944 70,128 400,000 - 300,000 + 30 June 02 Purchases _ Natural Sales Natural 31 Dec 02 Herd Increase Deaths Herd
Slide 26: Encouraging rains received across Australia to February 2003
Encouraging rains have been received across Australia to 10 February 2003 BUREAU OF se METEOROLOGY DARWIN 800 mm 600 mm 400 mm 300 mm 200 mm 100 mm % 50 mm (2 Kalgoorlie 25 mm 10 mm Simm 1mm Australian Raintall Analysis (mm) 8 —— emm ist to 10th February 2003 Product of the National Climate Centre S
Slide 27: EEE
EEE ae <<< ANANSI ne ee ge i KKK KE TS SSS SSNS mE 000): _-_-_-_:__ LEST ESL EEE LLL LLL _ LLL EE |__| _<_ __ LE eee 65OoOSéfs—WSiWiiK<é <_< MMA S/S 000 GG KK<K<KKKL—<—< LL #2. y EE __ EE __-_-__--_—-_—-_-_—-—-_—_—_———____ a, 5 KVGSKvécCiév<< KKK LAAT GAT UG Ue Gay, LULU OO OF—Fo0o»eo L$ i a KKK ES
Australian Agricultural Company — H1 FY2003 Earnings Presentation on 6ix