Elders Limited · ASX:ELD
Elders — ASX Small & Mid Cap Conference Hong Kong 2009
20 slides from Elders's conference presentation, Oct 29, 2009
Slide 1: The New Elders… Refocused, Reorganised, Recapitalised
The New Elders… For personal use only Elders Refocused Reorganised Recapitalised ASX Small & Mid Cap Conference 29 October 2009 Malcolm Jackman Chief Executive Officer 1 The New Elders ASX ASXSmall SmalltotoMid MidCap CapConference ConferenceHong HongKong KongOctober October29292009 2009
Slide 2: Elders is a leading Australian agribusiness
Elders is a leading For personal use only Australian agribusiness offering exposure to: Australian farmers via the premium distribution brand supply of food and fibre to Asian and global markets value accretion arising from business renewal and transformation programs. 2
Slide 3: Favourable sectoral outlook
Favourable sectoral outlook …Elders’ growth plans are underpinned by strong sectoral demand fundamentals For personal use only TREND OVERVIEW IMPLICATIONS Population UN forecasts world population growth of 390 million from 2010 Fundamentals supporting the Growth to 2015 with Asia accounting for 58
Slide 4: Recent events
Recent events …the foundations of business recovery have been put in place For personal use only Change in financial year end to Sept 30 (FY09 a 5 qtr transitional year) Refinancing completed 30 September with 3 year term on core debt Recapitalisation approved by shareholders: – $400 million i
Slide 5: Income streams concentrated on agribusiness
Income streams concentrated on agribusiness … from which over 80% of sales and EBIT is generated For personal use only Sales * EBITDA* EBIT* Agribusiness^ 1,983 Agribusiness^ 88 Agribusiness^ 73 Forestry 16 Forestry 14 The Forestry New Elders ASX Small 121 to Mid Cap Conference Hong Kong October 29
Slide 6: Rural Services Operations
Rural Services Operations …unmatched brand, with business model and strategic position that confers competitive advantage For personal use only Goodwill from 170 years of service Network of over 390 points of presence distributing farm inputs, financial services and providing marketing, technical an
Slide 7: Rural services financial results & outlook
Rural services financial results & outlook …2009 impacted by year’s events, rebound forecast for 2010 For personal use only 12 mths $ million^ FY08 June 2009 FY10P* Sales 2,691 2,439 1,983 EBIT 79.8 32.3 73.4 Prospectus forecast: 12 months to 30 June 2009: 12 months to 30 Sept 2010: Collapse of dema
Slide 8: Shifting focus to performance & growth
Shifting focus to performance & growth …through a structured program addressing totality of operations For personal use only The New Elders ASX Small to Mid Cap Conference Hong Kong October 29 2009 8
Slide 9: Go to market
Go to market …more effective sales performance based on reappraisal of client needs and Elders’ sales proposition For personal use only Element Status Renew market understanding & structure 9 Updated understanding of modern Australasian agriculture market needs Client needs analysis 9 Restructuring
Slide 10: Operational Excellence
Operational Excellence …establishing cost effective standardised process that focus on the customer For personal use only Essential ingredient for operation of large distributed network DMAIC* & Lean 6 Sigma structured program to reduce operating costs & improve efficiency First 6 months focus
Slide 11: Supply chain
Supply chain …cost-downs through better buying, reduced working capital and efficiencies in physical logistics For personal use only Element Previous Benefit Status Consolidate ~300 individual ↑ Buying power Cost-downs progressively the spend branch-based captured. More robust tender ↑ Negotiation p
Slide 12: Cost improvement
Cost improvement ….significantly reduced operating and overhead structure leading to improved cost performance For personal use only HEAD COUNT SUPPORT CENTRE COSTS ($m) - Quarterly Down 11% Down Down 12% 20% Down 43% 3,008 22 2,940 19 18 2,666 2,593 17 16 16 13 14 1,162 660 Permanent Casual FTE Sep
Slide 13: The margin improvement opportunity
The margin improvement opportunity …. targeting 2% - 3% improvement in rural services* margin from initiatives in train For personal use only The New Elders ASXimprovement Earnings Small to Mid Capon Conference Hong $2 billion paKong October sales 29 2009 sales + additional brought by Go to Market g
Slide 14: Forestry
Forestry strategically significant assets, offering long term cash flows, positioned to benefit from industry rationalisation For personal use only Establishment and management of FSC certified hardwood plantations – 165,000 ha under management – Ownership of 47,000 ha of plantation land Ownersh
Slide 15: Forestry results to improve after tough year
Forestry results to improve after tough year …2009 sales impacted by GTP, TIM failures & Elders refinancing For personal use only 12 mths 12 months to 30 June 2009: $ million FY08 June 2009 FY10P Collapse of MIS demand post Sales 191.3 184.9 121.1 GFC, industry failures, & Govt EBIT 61.4 10.6 14.1 r
Slide 16: Cashflow from pulpwood harvest set to grow
Cashflow from pulpwood harvest set to grow …ITC estate is 10 years into 12 year establishment cycle For personal use only Projected Annual Harvest Volumes GMT (000s) 3,000 2,500 2,000 1,500 1,000 500 0 2006A 2008A 2010F 2012F 2014F 2016F 2018F 2020F Ramp-up in harvest volume forecast to turn cashf
Slide 17: Automotive
Automotive …cash flow positive, developing non-core asset held for sale when shareholder value merits For personal use only $ million 12 mths 2008 June 2009 FY10P Sales revenue 384 270 232 Underlying EBIT Futuris Automotive 23.8 5.6 6.5 Associates 2.3 (21.1) - Total 26.2 (15.5) 6.5 Comprises Futuris
Slide 18: FY2010 financial outlook
FY2010 financial outlook …Rural services to drive turnaround as markets stabilise and transformation gains begin to emerge For personal use only Underlying EBIT 12 mths $m $ million June 2009 2010P* Sales revenue 2,628 2,336 EBITDA 54.6 116.6 EBIT 16.8 84.2 Interest (51.7) (26.7) Underlying NPAT (26
Slide 19: Gaining Momentum
Gaining Momentum …recapitalisation sets Elders to address and realise organic value gains projected to accrue from 2010 For personal use only The ‘Elders Makeover’ is all but complete with strategy, finances, organisation structure, management changes all achieved Divestment program in place for non
Slide 20: The New Elders…
The New Elders… For personal use only Elders Refocused Reorganised Recapitalised ASX Small & Mid Cap Conference 29 October 2009 Malcolm Jackman Chief Executive Officer 20 The New Elders ASX ASXSmall SmalltotoMid MidCap CapConference ConferenceHong HongKong KongOctober October29292009 2009
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