Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — FY2003 Earnings Presentation
39 slides from Australian Agricultural's earnings presentation, Aug 12, 2003
Slide 1: Results Presentation Year Ended 30 June 2003
12/08 2003 10:16 FAX 0292998963 AACO Wool pe ot AR GI ME A lg any is nlc vitae wea tl i a ile tata i Pe a8 sgn Es CAR than na et te een Fe eee eg Bee TE a Megan ins it A va vn He hha! ana ‘ te an He tae er " lf thy A | ity ie Hee ih Nusa RIEL te ER? Bin ae ee : ch ql WA ras tg atl atl ah | AP ae a t
Slide 2: 10:17 FAX 0292998963
12/08 2003 10:17 FAX 0292998963 TA SUOIISENH A SOUEPINS) 8 YOO|}NO AACO ‘Al UACID jessy all suoHipucy Bunersdo soa Asewuins syinsey egA Woo2 ide ae i a Mt iti Hi fate Ce ht Nea cate i : ASE ‘| Jessie, 1 vt Ne wil AR ii" ‘hf MON ne a Mle st ta a ag i i Frit " iy een e He Git en ee Sega Fes eae Rene a
Slide 3: 10:18 FAX 0292998963
12/08 2003 10:18 FAX 0292998963 AACO ‘y sjebie| o1Beye1S 0] SOUBLUIOLISg W003 Iba an alt beak ale EEA Es) Ms, spun Vy a naga ee i H si Bes wh anh 4 my tyen ts ita ey a Mh pt on pat whe ita lg a ge ies nl i que ah tw He ne i Sb peta ine i Vi uh itty rat ig ea cru ue La thatal Ta i te iy ee Pe im to j
Slide 4: Year highlights
Wood AACO 12/08 2003 10:18 FAX 0292998963 Earnings in line with guidance Cashflow lower due to investment in herd and timing of cattle sales Balance sheet strengthened and record high herd numbers at year end Short term strategy execution modified to fit seasonal conditions, longer term strategy unc
Slide 5: Status at June 2003
W005 AACO 12/08 2003 10:19 FAX 0292998963 Status at 30 June 03 Status at 30 June 03 Beef sold 50 million kgs Took decisions to reschedule sales
Slide 6: Status at June 2003
O06 AACO 12/08 2003 10:19 FAX 0292998963 Status at 30 June ‘03 ease ( hefs:Pariner. sales by 100% Pursue opportunistic property acquisitions Lack of suitable properties - drought - Aécreditation Gregory Farm Talmoi Farm
Slide 7: 10:20 FAX 0292998963
12/08 2003 10:20 FAX 0292998963 AACO Aseuuuns synsey eo, O07 t ri STR tk Ce i ask eh sgt ea Bin sn aH agi Fasten ade ee eg vee pee Hate ny ea a ti iene ie ity eae ie Mi i Hs at ere vat hd 1 (A pel nba i CECH a Pah eb me a A in iohcoiie O. jdt! me ini ay tiers he WH Hee hit Be i Sh re balun wens ye a
Slide 8: EBIT and DPS
W008 AACO 12/08 2003 10:20 FAX 0292998963 EBIT* ($m) 407,000 418,000 DPS** (cents) * FYOT Normalised for stand afone entity ** FYOS 6.0¢ = 2.0¢ interim + 4.0c final
Slide 9: Financial results versus FY02
Wong AACO 12/08 2003 10:21 FAX 0292998963 30 June 2002 38 June % change 2003 from FYO2 * Pre interest and income tax
Slide 10: 10:21 FAX 0292998963 AACOo
12/08 2003 10:21 FAX 0292998963 AACOo 010 ce AERIS ET na ot ein et se : i A de ta pL Ata tad i mbes a ear Se SEE EE GR ava aaa hae Ree an ee & & ' a jin ot ebeiane7 VIN raat Il a ie veh o ca een A a foo - G a. vs = 2s om My i . yea ts o tom ee n Ab ae fe ine) + be ea © 2 area a fs '@. ah i] : ie sha
Slide 11: Operating conditions
12/08 2003 10:22 FAX 0292998963 AACO SuOcI}IpPuoD Buneiodo E0A oll sage satay Hie heii fed a en neo oe be gh apt trey se a att satin See ATE ca ram a vane beeper ze i tt Age feo RRA at vIRga ee inca a ‘enh es i Pi 1M ayy fame we Roa bot rh it ita a SO ete Ea f egy eae: tit We — cs i eae int a ae th
Slide 12: Drought and rainfall impacts
Wol2 AACO 12/08 2003 10:22 FAX 0292998963 PEMA OWE A ET BUREAU OF METEGROLOOT Australian Aaltfall Decies rf 1 February 2002 wo 34 day 2003 Beoibuttar Rsed on Gridded Rate FIOQQUE! af ine Raional Canae Contre Mapi7mritmen part op saith 2m, Os Recoebgy Denk EGRDMAL Lama a0 rt colin Areas of lowest rec
Slide 13: 10:23 FAX 0292998963 AACO W013
12/08 2003 10:23 FAX 0292998963 AACO W013 is ca me Big ada te Pa Ha tights Nt ator oa fe ‘y! ee mn apt ty tat Ms i ei die a bai stents 1" a0 ak en ms, Bra ee er H =) | a a & wiheratay H E He \ a Eee 2 ait B : ' 2 Pee ' FS ied ie ne iit ammenities i aye pM Ei i e ne Meet Ey ‘ ane ! & Z5 Lue ii em it
Slide 14: 10:23 FAX 0292998963 AACO Wold
12/08 2003 10:23 FAX 0292998963 AACO Wold SANE Alt ae Pa ea i A i itd ft Mahe Mat cte te nit HALE ‘ ou i he mH feu Ae Tee 9 oy ae ie il i ‘a mm ihe ‘yt Ay ae} oH Lo ' 4 it ED Se etal f Seo i i “ aan sents ab hit f ih nif ‘ in Ht Hit O « git rr a i doe Sued aud aut oe om, Sos = SUMO Loydueqysoy ea ht
Slide 15: 10:24 FAX 0292998963 AACO W015
12/08 2003 10:24 FAX 0292998963 AACO W015 ee a ee PGES gh Sn AAAI gnc erate | festa ee ae Pa Bit a i Lie rh iu i Ae ( ") ee Ue tah Hamat Ab , a A ore a A RA ner coe A elite : ‘ i He a0 o on 6. A iat 7 iy al gat Hi cis ot SRO vi a fat i uy vasa i oe aa OF i ete i ee ioe Bee ee i s ih} } ‘<m ee Te i 2
Slide 16: 10:24 FAX 0292998963 AACO
12/08 2003 10:24 FAX 0292998963 AACO 016 aT ASUAOL, wo diueyyoc i y00zd < £002 a
Slide 17: Herd Numbers
W017 AACO 12/08 2003 10:25 FAX 0292998963 Herd Numbers 600,000 500,000 400,006 300,000 Po rebuilds herds and AACa: 83% Industry: 74% t Low due to droughi 406,970 ) 389,356 118,856 128,575 Deferred sales in June approx. a 40,000 2001 YE 2002 YE Purchases Natural Herd Herd Increase sitions AACo for st
Slide 18: Queensland Cattle Market Index
018 AACO 12/08 2003 10:25 FAX 0292998963 Price Index (1985 = 100) Queensland Cattle Market Index 30 June 2003 180 Ms 180 170 7 ™ f\ 140 Decision to defer sales e 130 T T T T T - T Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Source: (4A
Slide 19: Sales volumes and prices
12/08 2003 10:26 FAX 0292998963 AACO 61 sajes paj-sseib jo Ayjiqewea 10} oddns sepiaosd sauinjoa paj-ules6 Jo AyIqeIS Bol JoeapU eBeeny payyBieny COW —#- Paj-ssBID AACo Price Jul 01 = 100 bea | ins] @ oO => Qo o =) i=] [=] ! : L \ AE Athy Jul-O1 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 dan-02 Feb2 Mar-02
Slide 20: Grass-fed and grain-fed cattle
ozo AACO 12/08 2003 10:26 FAX 0292998963 AAGo Price Jul 01 = 100 AACo Grass-fed cattle AACo Grain-fed cattle 120 1 (excl Wagyu) FY03 + 4,000 120 FY03 + 4,000 1105 + 3,500 —J = 3,000 W zo 20 3 5 ; 2,000 m o 2000 2 38 = 70 tases © 1,500 = ° s rs) | 4,000 4 | 4,000 | soo 50 J : LE | 0 ons 2s 8 8 8°88 2
Slide 21: 10:27 FAX 0292998963
12/08 2003 10:27 FAX 0292998963 lz AACO Al UMOJS) Jessy W021 H CN ee aE ig taf read em EN a rae eae te tae oa EARNS ee EER Ra iat CAN apn in Peete ae Hedy ui aH chee iT Hadid AL Ne sy it va at i tit tag we MURR cH AE AE ne OO act it sje tS tm EL FP fetta gent manne H tite 4 ne eh Lao Hig Huang 21 4
Slide 22: Capex, Repairs & Maintenance
W022 AACO 12/08 2003 10:27 FAX 0292998963 Capex, Repairs & Maintenance ($'000) Expansionary Capex: * Aronui feedlot * Gregory farm * Talmoi farm * Wagyu beef exporter = Rural Management Partners PAH! Bh | ACTA « Jesters Jaffle Pie Co FY00 FYOt fExpansionary Capex = Operational Capex @ Repairs & Main
Slide 23: Wagyu investment
W023 AACO 12/08 2003 10:28 FAX 0292998963 Weight 330kg Price $2.75 $ikg* Weight 360kg ° Substantial investment in Wagyu — approx. $4m in cattle purchases itn 2003 * Sales to correspondingly increase in 2004 * Indicative weights (lwh & prices only 23
Slide 24: Property uplift and carrying capacity
Wo24 AACO 12/08 2003 10:29 FAX 0292998963 ¢ $4103m uplift in land, buildings & improvements (booked as € 8 at 30 June 03) Increasing the carrying capacity (cost efficiently) = increased land values = higher return from same property portfolio Effective environmental management increases property val
Slide 25: 10:29 FAX 0292998963 AACO W025
12/08 2003 10:29 FAX 0292998963 AACO W025 See te AEE ge A ann lta it Ie He i Sane oot " Hn an ae igi : cet UY ca seainaei Ags See all ch thea ee semper ha iti vide eg Rn oc He SQUEPINS) FB YOOWNO Apainan ie 1 it TTT fo ao Tat aa oe sarc’ wht ee a ein OREANY Det atte ik Mth iki nyt Hi ht Wa a Pe ee T
Slide 26: Share Price Performance
W026 AACO 12/08 2003 10:30 FAX 0292998963 7.00% 5 6.00% 4 5.00% 4 4.00% + 3.00% 4 2,00% 4 1.00% 4 0.00% Share Price Performance AACo Price 1 July 2002 = 100 Leverage Ridley Corp = Graincorp ee AACS m= All Ords Historical Dividend Yield As at 5th Aug 03 Queensland ‘Cotton NTA / Market Cap AS at 8th A
Slide 27: Outlook
W027 AACO 12/08 2003 10:30 FAX 0292998963 id Conclusion of El Nino — return to average seasonal conditions Improvement in average domestic cattle prices Declining US herd creating tight supply - US market holding firm Additional tariffs on Japanese export not seen as a major impact $A / $US 0.65 — 0
Slide 28: AUD/USD and cattle prices
W028 AACO 12/08 2003 10:31 FAX 0292998963 AUD/USD 0.45 1 1 1 1 1 1 1 ' 1 , 1 1 N N ~ N 2 oO 3 0 no © es $ §€ § $$ § 3 8 FF sg 3 a Bat > oO co oO e > Cc — = 2 iy 9 3 fay 5 a w 4 5.6CUi SS ea no oO z= a 5 “ Ss < Ss 5 Source: MLA —~QCMI —— AUD/USD exchange rate | e AUD / USD exchange rate is one of man
Slide 29: Australian Feed Grain Prices
Wo29 AACO 12/08 2003 10:31 FAX 0292998963 400 - 350 + 300 + $/tonne 250 + 200 + Australian Feed Grain Prices FYOo3 —————_* (Dee 150 4 Jul- Sep- Nov- Jan- Mar- May- Jul Sep- Nov- Jan- Mar- May- Jub o1 1 01 oz 02 02 02 O2 02 03 «(03 03 03 Source: MLA Feed Wheat * Grain Serghum | purchases timed to min
Slide 30: Strategy and targets
030 AACO 12/08 2003 10:32 FAX 0292998963 9 & & Q Increase in kgs produced by 20% Double Wagyu sales Continued East Coast expansion of 1824 East Coast roll out of Jesters Jaffle Pie Co Continue pursuit of acquisition opportunities Increased focus on value add revenue 3 a
Slide 31: 10:32 FAX 0292998963
12/08 2003 10:32 FAX 0292998963 Ig AACO TA suoHseny O31 ry gui ade i a ea sl i a Emit “tala tag ke oe ae i Dla sania i cae H tah ea Tathametit ete rare aos : ae ity iF 1 (AN ie ha vif . rma as t na i if a at ee iygaad i I aD io ERE sath e ye re uy ie ine Ma = = 8 oa inet he 4 . ae a aan : et wt Pate
Slide 32: 10:33 FAX 0292998963 AACO W032
12/08 2003 10:33 FAX 0292998963 AACO W032 Et, ling Hea q Bono ™ a " venga { im 4 Say sugoone ! | io Nena! espn boa poe Pa e On slau ‘ PE act 3 vif “aig ow i ei FARMER a He inait i ail sh Fi ; ast Samy eave Je “ "a i " a FEN stag, gu ous f May aa "Hyea le atl SHARE NIST vt agen ee my er en ee oh ee a
Slide 33: Livestock valuation (AASB1037)
033 AACO 12/08 2003 10:33 FAX 0292998963 Livestock is valued in accordance with AASB1037 SGARA — ‘Self Generating & Regenerating Assets’ Cattle assets vary in value according to movements in market prices, weight, age and type Market prices are more easily determined in liquid markets with spot pric
Slide 34: Cattle valuation inputs
W034 AACO 12/08 2003 10:33 FAX 0292998963 = Trading Cattle — QCMI: an indicator only — Roma, Queensland caitle store sales — Prices quoted to AACo at year end Breeding Caittle — Large cattle property sales inclusive of breeding stock — Australian breeding herd outlook — US breeding herd & beef suppl
Slide 35: Restaurant customers
W035 AACO 12/08 2003 10:34 FAX 0292998963 QLD: * Breakfast Creek Hotel * Pineapple Hotel * Cha Cha Char * Gianni Restaurant * Michaels Restaurant * Restaurant Two NSW & VIC: « Prime Quadrant * Kingsieys * Bel Mondo * Chicane * MG Garage *® Jonah’'s *« Mosaic Restaurant Westin * Otto Ristorante Itali
Slide 36: Cattle types glossary
036 AACO 12/08 2003 10:34 FAX 0292998963 Castrate male or female cattle with no permanent teeth. Less than 12 months old and still suckling Steers ing dairy crossbred and aged Castrate male cattle of any age inclu types used for hamburger meat Manufacturing Steers Feeder Heifers Female cattle purcha
Slide 37: Glossary
W037 AACO 12/08 2003 10°35 FAX 0292998963 Bovine Spongiform Encephalopathy, commonly known as ‘mad cow disease” face in. supermarket display cases’ Dressed Weight, d weighing method after slaughter and removal de etc before it enters chillers or freezers Meat Standards of Australia, an for the domes
Slide 38: 10°36 FAX 0292998963 AACO 1038
12/08 2003 10°36 FAX 0292998963 AACO 1038 ci Foy vii chet ume og yn Zee BoD B Bo & = 8s § aa hy WAvOSsS i PISIA PUSPIAIG "Aue wiht im | it re ee ee cre rare Capit aon roa Pr Qg a = ®t BD 2 Oy, B a bi] sath TE i S a Brisket a Soo o wb. 2 Parents: me, Pada | ® 9 b aan a ig. gs ee @ Ye a =] a. sh So my
Slide 39: 10:36 FAX 0292998963 AACO
12/08 2003 10:36 FAX 0292998963 AACO teva nhl ay OR Ree seat a 7" ies eee Ca ry ae f MELEE Liat iu wit ar tee chau thu en Nei al er iH : ie ae ne en nae Ee ye iit nae piv i Patt eee ee fl i oe ya a ine ce Hes ie a ol nt as ii tid Ties tea diet : ee i nee " n a oe ; inal i a ded vont a i Brit § Pe Le
Australian Agricultural Company — FY2003 Earnings Presentation on 6ix