Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — Shareholder Meeting (May 2011)
22 slides from Australian Agricultural's shareholder meeting presentation, May 11, 2011
Slide 1: AAco Annual General Meeting – Chief Executive Officers Presentation
Australian Agricultural Company Limited ABN 15 010 892 270 AAco Annual General Meeting – Chief Executive Officers Presentation ASX Announcement : 27/2011 11 May 2011 Attached is the Chief Executive Officer’s presentation from the Annual General Meeting of the Australian Agricultural Company (‘AAco’)
Slide 2: Australian Agricultural Company Limited Annual General Meeting
AUSTRALIAN AGRICULTURAL COMPANY LIMITED ANNUAL GENERAL MEETING 11 MAY 2011 ‘
Slide 3: Disclaimer
DISCLAIMER 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, agents, independent contrac
Slide 4: Three Year Turnaround
THREE YEAR TURNAROUND ´ 2007 – 2009 crippling seasonal conditions New management team appointed Strategic review in March 2010 Successful first year of three year turnaround plan now complete 2011 and Beyond: Sustainable future earnings growth and cash generation A business of scale and relevance, i
Slide 5: Three Year Turnaround
THREE YEAR TURNAROUND Focused management, g , realignment g of herd and return to profitability, p y, re‐engagement g g Year of shareholder base One Year Build herd, optimise land holdings and engage internationally Two Year Extend vertical integration, achieve scale, relevance and shareholder rewar
Slide 6: Global Protein Demand
GLOBAL PROTEIN DEMAND Increasing average incomes in developing countries t i iis d driving i i didietary t shift hift ttowards d iincreased d animal protein consumption Population growth is compounding this trend Strengthening global food demand is providing major impetus for gains in net farm incom
Slide 7: Global Protein Supply
GLOBAL PROTEIN SUPPLY Forecast Retail Prices (USD/kg) High demand for biodiesel and ethanol is forecast to 14.00 h ld many crops att historically hold hi t i ll high hi h price i levels, l l 12.00 affecting livestock feed costs 10.00 8.00 6.00 Increased appeal of beef: decline in relative cost 4.00
Slide 8: Global Beef Industry
GLOBAL BEEF INDUSTRY Projected Beef Consumption Faster consumption is fuelling rising imports in China, (million tons) Korea Egypt , Russia and the Philippines South Korea, 12.8 12.6 12.4 GFC triggered liquidation of cattle stocks 12.2 12.0 11.8 Extreme weather patterns aggravated supply flow 11.6 1
Slide 9: Beef Exporters
BEEF EXPORTERS Australian Beef Exports Brazil and Australia continue to lead world beef exports (tons) representing 24% and 18% trade respectively 1,100,000 1,050,000 Predominantly all US production is grain fed, 1,000,000 sensitive to upward price pressure for corn (required for biofuels) 950,000 U
Slide 10: Australian Herd
AUSTRALIAN HERD AAco Herd vs. Australian Herd 30 3 00% 3.00% Australia’ss herd is at 7 year low at approximately 26 Australia million head 1 25 2.50% 20 2.00% Mill) Head (M 15 1.50% Over the past 16 months AAco has rebuilt herd: herd numbers increasing from 507,676 in 10 1.00% December 2009 to 654,2
Slide 11: Managing Our Assets Strategically
MANAGING OUR ASSETS STRATEGICALLY Substantial, quality land holdings – Australian land valuations appear conservative in global context 10
Slide 12: Managing Our Assets Strategically
MANAGING OUR ASSETS STRATEGICALLY Substantial, quality land holdings – Australian land Apr‐11 Dec‐10 Dec‐09 valuations appear conservative in global context (Head) (head) (head) Feedlot 39,787 41,675 34,032 Diverse, genetically superior herd Trading 258,979 239,613 183,103 Breeding 355,486 295,856 2
Slide 13: Managing Our Assets Strategically
MANAGING OUR ASSETS STRATEGICALLY Substantial, quality land holdings – Australian land valuations appear conservative in global context Diverse, genetically superior herd Aligned to positive macro, global themes 12
Slide 14: Managing Our Assets Strategically
MANAGING OUR ASSETS STRATEGICALLY Substantial, quality land holdings – Australian land Improving Efficiency in Property Use (Ha / Head) valuations appear conservative in global context 16 15 14 Diverse, genetically superior herd Ha / Head 13 12 11 Aligned to positive macro, global themes 10 2006 200
Slide 15: Operating Culture
OPERATING CULTURE Strategic Direction • Creating a profit and cash focused operating environment • Effective risk management in place to support this environment • Development of assets and personnel Rationale • Optimise return on assets and personnel • Realign and better utilise logistics, markets,
Slide 16: Now and Goal: Vertical Integration
Cattle Production Sales NOW Land • Calve • Live Export • Weight Gain • Boxed Adjust Increase Increase Processing Land Holdings Cattle Trading Feedlotting Cattle Sales Optimally Production GOAL Processing • Live Export Utilised Land Feedlotting Cattle Trading • Calve Abattoirs • Boxed Holdings • Weig
Slide 17: Outlook for Rangelands
OUTLOOK FOR RANGELANDS Rainfall ‐ Company 5,000 4 500 4,500 Actual Better than average wet season rainfall 4,000 3,500 Average 3 000 3,000 Excellent pasture growth season 2,500 mm 2,000 Increased yields, species composition and 1,500 ground cover 1,000 500 These factors will contribute to increased
Slide 18: Rainfall relative to Historical Records
Rainfall relative to Historical Records
Slide 19: Victoria River Group
co VICTORIA RIVER GROUP peeves Darwin ReMelaléuca Has Welliee um Pell “ig Tipperary & ‘e d Katherine Montejinni Camfield | Eva Downs \ Brunette Downs \ Tennant Creek’ Ky Avon Downs BARKLY GROUP Austral Downs Alice Springs ¢ Anthony Lagoon ¢ i 4Karumba Benmarra, A se Wondoota \ | Canobie ‘®Camooweal,
Slide 20: Victoria River Group
VICTORIA RIVER GROUP Season • Early start, late finish • Consistent falls for 3 months across the region • Camfield & Delamere received above average annual rainfall • Montejinni doubled its annual average with strong falls each month Pastures • Good growing season with wet and dry spells over an ex
Slide 21: Victoria River Group
t Hi e* re A VICTORIA RIVER GROUP
Slide 22: Barkly Group
co ns wedi “ape ig Tipperary \ VICTORIA RIVER" ¥ GROUP as TX hs: \ | oe \ Delamere | Morjtejinni \ | \ Gamtield \ / Eva Dons Brunetlg Downs Tennant Creek e' BARKLY GROU Alice Springs Austral Downs Anthony Lagoon Avon Downs @ Camooweal \_-#Karumba ; GULF GROUP / Wondoola\ \ / \ Canobie | Dalgonalty \
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