Ridley Corporation Limited · ASX:RIC
Ridley — H1 FY2007 Earnings Presentation
32 slides from Ridley's earnings presentation, Aug 29, 2007
Slide 1: Ridley
RIDLEY
Slide 2: 2007 Half Year Results Presentation
RIDLEY CORPORATION LIMITED 2007 Half Year Results Presentation
Slide 3: Main Features
Main Features • Operating EBIT • Australia Feeds up 13% • Cheetham Salt up 9% • North America down 10% • Higher global grain prices • Plant closures / capacity optimisation • Canadian legal case • Guidance
Slide 4: Results
Results A$m F2007 % to LY Sales Revenue 716 13% Operating EBITDA 46 4% Operating EBIT 34 2% Net Operating Profit 15 (4%) Net Profit 12 (19%) Dividends 3.5 cps - * Interim Dividend 3.5 cps 50% franked
Slide 5: Non-Operating Items
* Non-Operating Items • Plant closures / capacity optimisation $(3.1)m • Canada - $2.1m • Australia - $1.0m • Canadian legal case $(0.6)m • Discontinued operations $ 0.3 m • Total non-operating items $(3.3)m * Net of tax and minority interest
Slide 6: Net Profit
Net Profit A$m 1.0 1.8 1.1 0.4 1.3 2.2 14.7 11.9 2006 Australia Cheetham North Unallocated Interest Net Non 2007 Feeds Salt America Costs Tax & MI Operating
Slide 7: Sales by Division
Sales by Division A$m 13 3 4 68 717 636 2006 Australia Cheetham North Currency 2007 Feeds Salt America
Slide 8: Australia Feeds
Australia Feeds A$m F2007 % to LY Sales 313 28% Tonnes (000's) 939 12% EBIT 9 13% Features • Drought conditions • Volumes higher - especially beef • Higher grain prices • Working capital
Slide 9: Australia Feeds - Volume
Australia Feeds - Volume Tonnes 000's 7 3 10 11 12 13 43 939 840 2006 Beef Sheep Dairy Poultry Supps & Pig Horse 2007 Liquids
Slide 10: Australia Feeds - EBIT
Australia Feeds - EBIT A$m 0.7 0.2 2.1 0.2 9.3 8.2 2006 Volume Margins Mfg R&D 2007 Costs
Slide 11: Cheetham Salt
Cheetham Salt A$m F2007 % to LY Sales 48 10% Tonnes (000's) 620 4% EBIT 13 9% Features • Volumes up for pool, food and Qld ag sectors • Cost recovery / margins improving • Increasing returns from Indonesia
Slide 12: Cheetham Salt - EBIT
Cheetham Salt - EBIT A$m 0.1 0.5 0.2 0.2 12.9 11.8 2006 Qld Ag Food & Pool Indonesia Equity Profits 2007
Slide 13: North America
North America A$m US$m Sales 356 3% 268 4% Tons (000's) 850 (2%) EBIT 17 (10%) 13 (9%) Features • US Feeds earnings stable • Canada down due to lower sales of high margin ingredient products • No hurricane disruptions • Mild weather conditions effected volumes • Higher corn prices - ethanol demand
Slide 14: North America - EBIT
North America - EBIT A$m 1.0 0.3 2.5 1.3 19.1 17.3 2006 US Feeds F06 Claim Canada Feeds RNS 2007
Slide 15: Half Year Financial Performance
RIDLEY CORPORATION LIMITED 2007 Half Year Financial Performance
Slide 16: Cashflow
Cashflow A$m Dec 2006 Dec 2005 EBITDA 45 42 Capex (16) (8) Borrowing costs (9) (6) Tax (7) (2) Dividends (5) (6) Working capital & other (21) (10) Cash generated (13) 10 Acquisitions - (10) Net (13) -
Slide 17: Working Capital
Working Capital A$m Dec 2006 Dec 2005 Dec 2004 Trade Receivables 136 110 91 Inventory 155 127 109 Payables (206) (172) (137) Other & Provisions 24 15 20 Total 109 79 83 Days Sales outstanding 31 30 27
Slide 18: EBITDA
EBITDA A$m Dec 2006 Dec 2005 Australia Feeds 13 11 Cheetham Salt 15 14 North America 23 25 Corporate & Other (5) (6) Canadian Legal Claim (1) (2) Total 45 42
Slide 19: Unallocated Costs
Unallocated Costs A$m F2007 F2006 Corporate Costs - Australia 4 4 - North America 1 1 Canadian Legal Costs 1 2 Total 6 7
Slide 20: Debt Movement
Debt Movement A$m Net Debt - June 2006 171 Acquisition funding - Borrowings 13 Currency translation (2) Net Debt - December 2006 182
Slide 21: Gearing
Gearing A$m Dec 2006 Jun 2006 Dec 2005 Net Debt 182 171 167 Equity 390 394 385 Ratio 46.7% 43.5% 43.3%
Slide 22: Key Ratios
Key Ratios Dec 2006 Dec 2005 Dec 2004 Net Debt / EBITDA 2.0 1.9 1.9 EBITDA / Net Interest 6.5 6.9 7.6 EBIT / Net Interest 4.9 5.3 5.4 ROSF 9.1% 9.8% 8.2% ROFE 11.4% 12.4% 9.4% EPS (fully diluted) 5.3 5.7 4.7 Note: Before non-operating Items ROSF & ROFE have been annualised
Slide 23: Currency Impact
Currency Impact Dec 2006 Dec 2005 Avg Exchange Rate A$ - US$ 0.7543 0.7471 A$ - C$ 0.8493 0.8853
Slide 24: Canadian Legal Claims Update
RIDLEY CORPORATION LIMITED Canadian Legal Claims Update
Slide 25: Legal Claims - Status
Legal Claims - Status • The actions against Canadian Government and 69% subsidiary Ridley Inc continue, but still at an early stage in all provinces: • merits of claims not yet considered by the Courts • claims are not yet authorised or certified as class actions • defences not yet filed • The actio
Slide 26: Legal Claims - Status
Legal Claims - Status • In Ontario, appeals against different aspects of the decision not to strike out the claims are being heard 13 and 14 February 2007 • In Quebec, application for authorisation of the claims as a class action was heard in October, 2006. No decision has yet been handed down • Act
Slide 27: Outlook
RIDLEY CORPORATION LIMITED Outlook
Slide 28: Australia Feeds
Australia Feeds • Drought related demand to continue for next 2 - 3 months • Dairy demand gradual reduction • Lower visibility 6 months out • Grain price is the key • Earnings expected to be higher than last year • Working capital requirements
Slide 29: Cheetham Salt
Cheetham Salt • Relatively stable outlook • Earnings improvement to continue • Focus on incremental growth • Dry weather in south will result in good salt harvest
Slide 30: North America
North America • Mild winter has impacted US Feeds and Block volumes • Reduced earnings due to Canada Feeds • Positive RNS earnings • Good cost control • Customer economics dependent on long term prices of corn and other feed grains • Minimal working capital impact
Slide 31: Earnings Guidance Summary
Earnings Guidance Summary • Australian businesses to be ahead of last year • North America lower • Higher funding costs due to grain prices • Canadian legal costs - $1.5m net • Net Operating Profit $26 - $29 million • Net Profit after tax $21 - $24 million • Year end Net Debt - $175m @ current grain
Slide 32: Ridley
RIDLEY