Slide 1: 2011 Half Year Results Presentation
For personal use only 23 May 2011 2011 Half Year Results Presentation Attached is a presentation on Elders Limited’s results for the half year ended 31 March 2011 to accompany the Company’s conference call being held at 9.00am Eastern Standard Time today (Monday 23 May 2011). The conference call may
Slide 2: Results for the six months to March 2011
H1 2011 For personal use only Results for the six months to 31 March 2011
Slide 3: Key messages
Key messages Clear improvement and progress in areas under our control For personal use only ■ Weather and other events have had significant positive and negative impacts on Elders’ various operations ■ Network operations showed good improvement. Sales have been increased, and costs reduced ■ Achiev
Slide 4: 2011 First Half main features
2011 First Half main features Sales and earnings improvement, balance sheet stronger For personal use only ■ Continuing sales revenue up 6% to $1,086.4m ■ Underlying EBIT up 94%, rising from $10.3m to $20.0m ■ Underlying PBT of $3.9m up from pcp and guidance figure of $2.1m ■ Underlying NPAT of $1.0
Slide 5: Profit and loss
Profit and loss Significantly improved NPAT and EBIT For personal use only $ million H1 11 H1 10 Sales revenue from continuing operations 1,086.4 1,025.0 Underlying EBIT 20.0 10.3 Net underlying borrowing costs (16.1) (8.2) Underlying profit before tax 3.9 2.1 Tax on underlying profit 0.0 (1.3) Non-
Slide 6: Reconciliation of statutory and underlying profit
Reconciliation of statutory and underlying profit Non-recurring items For personal use only $ million six months to March 2011 2010 Key items in H1 11 Reported Loss after tax (14.6) (165.9) Non-recurring items: Rural Services 9.0 18.1 Rural Bank (dividend $6.4,netprofit on sale $16.4), HiFert -10.6
Slide 7: Underlying EBIT movement
Underlying EBIT movement Driven by Rural Service improvement and cost reductions For personal use only Movement in underlying EBIT $m $ million H1 11 H1 10 - 3.4 -3.9 + 4.5 Rural Services 14.1 1.6 + 12.5 Forestry 4.0 7.4 20.0 Automotive 4.7 8.6 Corporate (2.8) (7.3) 10.3 Total EBIT 20.0 10.3 H1 10 R
Slide 8: Cost reduction progress and targets
Cost reduction progress and targets $16m savings in first half For personal use only F11 H1 Total Cost Savings ($m) Employee* FTEs 2,796 $201m 307 $16m $185m 2,506 2,521 17 F10 H1 Cost Savings F11 H1 June 10* FTE Reduction Vet Supplies March 11* Target ** Acquisitions * Includes Rural Services, Fore
Slide 9: Key balance sheet items
Key balance sheet items Increased sales and seasonal trends in working capital movements For personal use only $ million H1 11 FY 10 H1 10 Inventory & livestock 303.6 226.0 276.8 Trade debtors 504.7 471.2 476.6 Trade creditors (420.0) (357.0) (353.4) Working capital 388.3 340.2 400.0 Cash 38.3 80.0
Slide 10: Cash flow
Cash flow Seasonal pattern sees outflow in first half and inflow in second half For personal use only $ million six months to 31 Total Rural Services Forestry Auto Corporate March 2011 Operating cash flow: before working capital (1.5) 22.2 (15.2) 12.8 (21.3) working capital movement (48.1) (33.2) 2.
Slide 11: Debt
Debt Total reduced 22%, term debt cut 63%; increased use of seasonal facility For personal use only $ m as at: H1 11 FY 10 Debt composition $m Debt subject to covenant 190.1 313.7 Trade debtor financing 111.2 111.2 Plexicor and Other non bank debt 85.5 72.7 73 other debt Gross debt 386.8 497.6 Debto
Slide 12: Finance
Finance Finances restructured; executing strategy to reduce term debt For personal use only Covenant Metric March 11 Actuals March 11 Covenant Sept 2011 Covenant Leverage ratio Gross Debt / EBITDA 3.2x <4.5x <3.75x Interest cover ratio EBITDA / Interest 2.6x >2.0x >2.5x Gearing ratio Gearing (Gross
Slide 13: Seasonal conditions
Seasonal conditions Rain, rain, rain and more rain driving markets and sales trends For personal use only ■ Unseasonably good rainfall in all but parts of S W Western Australia crop yields high but extensive downgrades feed and water resources replenished flooding disruption to livestock sales ■ Far
Slide 14: Rural Services earnings growth
Rural Services earnings growth Improved network earnings generation the driver For personal use only Underlying EBIT movement $ million - 1.6 + 2.7 + 1.8 - 6.1 + 15.7 14.1 1.6 Underlying Australian New Zealand Trading Support Equity Underlying EBIT FY10 network network Centres Earnings EBIT FY 11 H1
Slide 15: Network performance
Network performance Growth in sales, margin and improved cost to earn For personal use only H1 11 vs H1 10 Sales Gross Margin AgChem +32% +30% Fertiliser +3%1 + 1% Farm Supplies (total) +10% +12% Livestock +17% +15% Wool - 3% + 18% Real Estate -16% -11% Total Australian Network +10% +9% Earn per emp
Slide 16: Trading performance
Trading performance Cattle-related business was down on markets, weather; wool trading results up For personal use only ■ Feedlot trading $ million H1 11 H1 10 – sales up with move to 100% shareholding in Killara and higher prices Sales revenue 280.0 271.0 Gross Margin 13.8 15.0 – margins down on co
Slide 17: Network Related Equity Earnings
Network Related Equity Earnings Impacted by 2011 harvest downgrades on ETG trading For personal use only Elders Insurance $ million H1 11 H1 10 AWH Elders Insurance 3.1 2.8 – earnings down as high prices saw wool in stock reduced Australian Wool Handlers 2.2 2.4 Elders Toepfer Grain Elders Toe
Slide 18: Go to client
Go to client Work progressing around 4 streams to rebuild Elders as a client-centric high For personal use only performance sales organisation Network structure Sales Excellence Client -Centricity Sustainable Comp advantage Adjust network Inside sales Instituting Client- Technical hubs struc
Slide 19: SalesPlus+
SalesPlus+ Creating and embedding a High Performance Sales Culture within Elders For personal use only ■ “Sales 101” sales management and performance program introduced to increase the vigour, focus and effectiveness of Elders’ day to day sales ■ 1,280 staff trained since November 2010 ■ Management
Slide 20: Forestry
Forestry Costs and business activity being managed in line with financial impact of 2010 MIS collapse For personal use only ■ Earnings down on low 2010 MIS sales, and lower $ million H1 11 H1 10 3rd party woodfibre sales Sales revenue 32.8 46.2 ■ Cyclone damage to Northern Qld with likelihood that R
Slide 21: Forestry Staged Capital Release Strategy
Forestry Staged Capital Release Strategy Balancing asset value, cash and capital allocation goals through difficult near term markets For personal use only Strategic intent is to balance maximisation of value for shareholders, minimise cash outflows and redirect capital to sustainable and value ac
Slide 22: Automotive operations
Automotive operations Results reflective of vehicle industry trends For personal use only ■ Sales and margin impacted by lower volumes $ million H1 11 H1 10 – Australian passenger vehicle build down 17% yoy; although some marques down by up to 33% Sales revenue 142.7 134.2 – Futuris sales revenue do
Slide 23: Second half outlook
Second half outlook Rural conditions and demand good, headwinds building from A$ and other markets For personal use only ■ Rural Services – very good conditions for demand but WA still a risk – strong demand and activity so far in line with customary H2 lift – high A$ starting to impact farm incomes
Slide 24: Appendices
23 For personal use only Appendices
Slide 25: Elders Rural Services network
Elders Rural Services network For personal use only • Elders Branch Rural Service Branches Queensland 48 New South Wales 52 Western Australia 46 Tasmania 6 South Australia 33 Northern Territory 3 Total Australian Network 223 New Zealand (Farm Supplies stores) 14 24
Slide 26: Rural Services sales revenue
Rural Services sales revenue $ million continuing, six months to March 2011 2010 Change % For personal use only AgChem 147.2 111.3 + 32% Fertiliser 133.5 121.1 + 10% Other Farm Supplies 162.5 162.2 - Farm supplies (total) 443.2 394.6 + 12% Livestock agency 62.5 53.5 +17% Wool 28.8 29.7 - 3% Real Est
Slide 27: Elders Forestry Operations
Elders Forestry Operations For personal use only Area (ha) Owned Leased Total South-West WA 10,075 37,538 47,613 Esperance 10,925 39,022 49,947 Kununurra 1,162 618 1,780 Green Triangle 2,555 32,968 35,523 North 5,039 1,796 6,835 Queensland Tasmania 0 800 800 Total 29,756 112,742 142,498 26
Slide 28: Automotive operations
Automotive operations For personal use only ■ Global facilities established in construction 27
Slide 29: Automotive operations
Automotive operations For personal use only no image available Commodore from 1996 Cruze from 2011 31UX SUV from 2012 Camry & Aurion from 2006 seating seating seating headliner door trim headliner various trim for GM nvh product headliner floor carpet via Futuris Australia spoiler floor