Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — Investor Presentation (November 2020)
22 slides from Australian Agricultural's investor presentation, Nov 19, 2020
Slide 1: The Art of Australian Beef: H1 FY21 Interim Results Presentation
co THE ART OF AUSTRALIAN BEEF H1 FY21 Interim Results Presentation 19 November 2020
Slide 2: Summary information only
Summary information only This presentation contains general information about the Australian Agricultural Company Limited and its consolidated entities (“AACo”) and its activities current as at the date of this presentation. It is provided in summary and does not purport to be complete. You acknowle
Slide 3: Executive Summary
Executive Summary Page 4 COVID-19 Response Page 6 Progress Against Strategy Page 7 Financial Performance Page 11 Operating Environment Page 16 Appendix Page 20 3
Slide 4: Positive H1 performance in uncertain and unprecedented COVID-19 environment
Positive H1 performance in uncertain and unprecedented COVID-19 environment. Swift and nimble response to COVID-19 during this period of uncertainty. Despite impact on global food service markets, strength of our global distribution reach and in market presence has helped deliver: • Average meat sal
Slide 5: Lower brandings due to drought and Gulf floods translate into lower meat production
In line with impacts to the Australian national cattle herd, lower AACo brandings due to drought and Gulf floods translate into lower meat production volume: • H1 meat production volume 9% lower vs pcp. • Lower meat sales expected in H2 vs H1. • Cattle sales are expected to reduce in H2 FY21. AACo c
Slide 6: Primary focus being the safety of our staff, animals, communities and company
Swift transition to conducting business in a COVID safe manner with our primary focus being the safety of our staff, animals, communities and company. “Primary focus being the safety of our staff, animals, communities and company” All 16 global food service export markets impacted by pandemic restri
Slide 7: Progress Against Strategy
Slide 8: Flexibility and resilience shown by the business in H1 FY21
The flexibility and resilience shown by the business in H1 FY21 demonstrates that our Branded Beef Strategy makes us a better, more robust • Leveraged strength business – and isof globalto distributor testament the progress werelationships have made so far. to enable pivot to retail • Strength of ou
Slide 9: AACo leveraged distribution partnerships to move into new retail channels and trial D2C
AACo Meat Sales Revenue vs PCP Avg $/Kg Leveraged distribution partnerships to move into new retail channels and trial D2C opportunities. • Strategic market allocation and optimisation. Regional/Market Proportion of Total Meat Sales • Successful shift to retail in North America. Asia China Asia ex C
Slide 10: Digital Media focused campaigns
• Digital Media focused campaigns. • Created and launched the “Cooking at home with Westholme” series in partnership with Chef Clayton Wells aimed at educating home chefs on buying and cooking Wagyu at home. • Developed Westholme unboxing experience, bringing brand experiences to the home. • Launche
Slide 11: Financials
Financia
Slide 12: Resilient H1 FY21 performance in the face of COVID uncertainty
• Resilient H1 FY21 performance in the face of COVID uncertainty with delivery of positive operating profit 1 and cash flow. o Operating profit1 $23.5M ($16.8M pre Jobkeeper2) vs $6.3M pcp. o Operating cash flow $22.3M ($18.3M pre Jobkeeper2) vs $11.0M pcp. • Improved operating profit as the busines
Slide 13: Statutory EBITDA profit of $15.0M in H1 FY21 vs ($3.4M) loss pcp
H1 H1 Statutory EBITDA profit of $15.0M in H1 FY21 vs ($3.4M) loss pcp. $M Var $ FY21 FY20 Meat Sales 102.9 105.8 (2.9) Positive operating1 profit of $23.5M vs $6.3M pcp. Positive operating1 profit of $16.8M pre Jobkeeper2. Cattle Sales 41.1 77.0 (35.9) Total Sales 144.0 182.8 (38.8) • Total sales d
Slide 14: Positive operating cash flow of $22.3M vs $11.0M pcp
$M H1 H1 Var $ Positive operating cash flow of $22.3M vs $11.0M pcp. FY21 FY20 Positive operating cash flow of $18.3M pre Jobkeeper1. Receipts from Customers 152.5 193.5 (41.0) • Delivered positive operating cash flow: Payments to Suppliers and Employees (122.6) (175.1) 52.5 o Supported revenue by p
Slide 15: Strong balance sheet position with net assets of $917.6M
$M 30 September 30 September Strong balance sheet position with net assets of $917.6M. 2020 2019 • AACo maintains comfortable head room under existing bank covenants. Livestock 462.9 473.0 • Approximately $190M headroom available in Facility A & B. PPE & Intangibles 868.0 872.6 • Gearing ratio pre A
Slide 16: Operating Environment
7 Overating
Slide 17: International demand for Australian red meat remains buoyant through COVID-19
• International demand for Australian red meat remains buoyant through COVID-19. • Sustainable demand is being driven by long-term global trends – including a growing urban middle-class and ongoing focus on meat safety. • Customer demand is transitioning to retail and direct consumer sales – through
Slide 18: Australian cattle producers endured an extremely difficult start to 2020
Stifled by prolonged drought and compounded by the national bushfire crisis, Australian cattle producers endured an extremely difficult start to 2020. • National herd forecast at lowest level in past 20 years. • Calendar year-to-September 2020 eastern states cattle slaughter 14% below 2019. • Greate
Slide 19: AACo continues to monitor developments of pandemic
Consistent with impacts to the Australian national herd, prolonged drought conditions of 2018-2020 resulted in the strategic destocking of our properties over the past two years with an overall decrease in head of 19% for FY20 as reported in our FY20 results. The headwinds of the droughts and Gulf f
Slide 20: Appendix
CO THE ART OF AUSTRALIAN BEEF Appendix
Slide 21: H1 FY21
H1 H1 $M Var $ FY21 FY20 Meat sales 102.9 105.8 (2.9) Cattle Sales 41.1 77.0 (35.9) Total Sales 144.0 182.8 (38.8) Operating Expenditure (96.2) (140.7) 44.5 Cattle Purchases (16.2) (9.3) (6.9) Operating Gross Profit 31.6 32.8 (1.2) Change in Herd at Cost of Production (CoP) (2.8) (0.2) (2.6) Meat In
Slide 22: Thank you
CO THE ART OF AUSTRALIAN BEEF Thank you
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