Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — FY2011 Earnings Presentation
22 slides from Australian Agricultural's earnings presentation, Jan 31, 2012
Slide 1: Results presentation, Year ended 31 December 2011
For personal use only AUSTRALIAN AGRICULTURAL COMPANY LIMITED Results presentation Year ended 31 December 2011 0
Slide 2: Disclaimer
Disclaimer For personal use only While every care has been taken in the preparation of this presentation, Australian Agricultural Company Limited (“AAco”) and each of their respective related bodies corporate and associated entities and each of their respective officers, employees, associates, agent
Slide 3: Financial results summary
Financial results summary For personal use only 32.1% increase on FY10 prior comparable period Sales $384.4m Includes increases of 46.9% and 18.3% in live cattle and branded beef sales1 respectively 40.7% increase on FY10 prior comparable period EBITDA $58.1m At the top end of the guidance range of
Slide 4: Summary financial performance
Summary financial performance For personal use only Summary of financial performance Non‐recurring items $m 1H11 2H11 FY11 FY10 Change Revenue 168.3 216.0 384.4 290.9 32.1% Meteor Profit on sale $5.9m Gross margin 41.2 86.5 127.7 101.7 25.6% Downs EBITDA 7.5 50.7 58.1 41.3 40.7% EBIT 0.2 45.6 45.7
Slide 5: Financials by segment
Financials by segment For personal use only Live cattle segment was impacted by delays in shipping caused by the suspension Live cattle Cropping operations include cotton (2,429 ha harvested), wheat (2,950 ha harvested) and sorghum (2,920 ha harvested) Segment revenue up due to increased volum
Slide 6: Cattle Trading
Cattle Trading For personal use only Cattle sales FY11 Cattle sales FY10 20% 15% 28% 33% 18% 15% 20% 11% 21% 19% Grass finished Short fed grain Wagyu Breeder and feeder Live export Cattle sales detail (head) Short fed Breeder and Grass finished grain Wagyu feeder Live export Total sales ASP ($/head)
Slide 7: Key operational drivers of FY11 result
Key operational drivers of FY11 result For personal use only Weather conditions and global supply constraints supportive of material increases in herd numbers and opportunistic purchases Average selling price of $961 / head Average book value of cattle $727 / head (includes unbranded calves)
Slide 8: Key operational drivers of FY11 result
Key operational drivers of FY11 result For personal use only Cattle sold and average selling price Beef sales and average price / kg 250 240 970 20 17 18 $8.00 960 16 15 $7.92 200 176 166 Heads (000s) $ / head 950 12 $7.84 kg (m) $ / kg 150 100 940 8 $7.76 50 930 4 $7.68 0 920 0 $7.60 FY09 FY10 FY11
Slide 9: Positive dynamics
Positive dynamics For personal use only Current pricing environment very strong EYCI index (c/kg) Pricing and expected to continue in light of 450 tightness of global cattle supply; and 420 strong Australian beef prices despite 390 continued high AUD 360 AAco herd and practices aligned with
Slide 10: Herd movements
Herd movements For personal use only Detail on herd FY11 herd movements Herd growth of ~15% from FY10 herd 750 88 666 size of 577,144 branded cattle plus calf 156 578 accrual 600 506 178 (22) 450 Composition of herd 000s 300 91% Composites / Bos Indicus 150 (240) 9% Wagyu 0 Attrition Cattle
Slide 11: Herd profile
Herd profile For personal use only Current herd size is 665,591 heads, at record levels Shift in breeder herd continuing reducing age profile of breeding females in order to increase number of live calves per joining Herd composition FY11 Herd composition FY10 6% 12% 7% 13% 28% 42% 39% 53% Fee
Slide 12: Progress in strategic initiatives
Progress in strategic initiatives For personal use only Progress made? Description Improved land Sale of Meteor Downs above book value utilisation Tipperary Agistment Agreement Agistment agreements in Northern Territory and areas near South Galway Station in Queensland Value added Feasibil
Slide 13: Three year plan update
Three year plan update For personal use only 2013 2012 Achieve scale and relevance In progress Construction of NT abattoir Reward shareholders Vertical integration 2010–2011 — Complete Further adjustment of Return to dividend (design and approvals for Rebuild herd land holdings assum
Slide 14: Abattoir update
Abattoir update For personal use only Processing facility will have the capacity to process up to 1,000 cattle per day at full Background capacity Will produce export beef products, hides and rendered products for export to markets in the US, Europe and Asia Reduced distances, transport and fr
Slide 15: Balance sheet
Balance sheet For personal use only Existing bank facility of $390m, with current headroom of ~$53m1 Balance sheet Commitments received from four banks for a $450m syndicated facility negotiation complete and execution of binding documentation expected shortly $m FY11 FY10 Cash and cash equiva
Slide 16: NTA breakdown
NTA breakdown For personal use only The carrying value of property, plant and equipment assets is $1.94 / share NTA composition The carrying value of herd assets is $1.55 / share FY11 A$m A$/share Cash and cash equivalents 23.4 0.07 Livestock 483.7 1.55 Trading herd 168.4 0.54 Breeding herd 298.
Slide 17: Net debt movement
Net debt movement For personal use only Net debt (including finance leases) up $4m to $344m Key debt metrics Gearing1 of 33.9% Major cash flows in FY11 include Cash movements $111.8m investment in herd, including Tipperary purchase of $27.2m $22m proceeds received from sale of Meteor Downs
Slide 18: Cash flow
Cash flow For personal use only Cash flow statement Cash flow $m FY11 FY10 Change Net operating cash flow (64.1) (48.8) (15.2) Net capex (15.6) (4.0) (11.5) Rostock & Newfarm (1.4) 0.0 (1.4) Acquisition of Tipperary1 (5.0) 0.0 (5.0) Sale of Meteor Downs 21.6 0.0 21.6 Net investing cash flow (0.4) (4
Slide 19: Operating cash flow
Operating cash flow For personal use only Cash flow outlook Currently expected that AAco will generate an operating cash surplus during FY12 and dividend Subject to cash surplus in FY12, Board will consider recommending return to distributions in 2013 Operating cash flow composition (A$m) 450 36
Slide 20: Appendix
For personal use only Appendix 19
Slide 21: AAco stations profile
AAco stations profile For personal use only Darwin Melaleuca Pell Litchfield Tipperary Katherine Delamere Montejinni Camfield Anthony Lagoon Karumba Cairns Eva Downs Benmarra Brunette Downs Wondoola Tennant Creek Canobie Avon Downs Camooweal Townsville Dalgonally Austral Downs Mt Isa Julia Creek Cha
Slide 22: Cattle by breed and location
Cattle by breed and location For personal use only Cattle by breed Cattle by location 4% 10% 5% 8% 18% 39% 45% 14% 24% 24% 9% Brahman composite Wagyu Barkly VRG Barkly composite Gulf composite Gulf Central Qld Angus composite Darling Downs Channel Country 21
Australian Agricultural Company — FY2011 Earnings Presentation on 6ix