Slide 1: 2024 Full Year Results Presentation
18 November 2024 2024 Full Year Results Presentation Attached is the Elders Limited (ASX:ELD) presentation of the financial results for the 12-month period ended 30 September 2024. Further Information: Mark Allison, Managing Director & Chief Executive Officer, 0439 030 905 Media Enquiries: Meagan Bu
Slide 2: Full Year Results Presentation for FY24
Full Year Results Presentation for FY24 18 November 2024 Presented by Mark Allison Managing Director and CEO Paul Rossiter CFO 1 Elders Limited
Slide 3: Disclaimer And Important Information
Disclaimer And Important Information The material in this presentation has been prepared by Elders Limited and is general background about Elders' activities and performance at the date of this presentation. The information is in summary form, does not purport to be complete, and where derived from
Slide 4: Agenda
ELDERS LIMITED AGENDA Agenda 01 Executive Overview 04 Questions 02 Financial Results 05 Appendix 03 Strategy and Outlook A3
Slide 5: Executive Overview
Executive Overview Presented by Mark Allison (Managing Director and CEO) A4 Elders Limited
Slide 6: Key Investment Drivers
ELDERS LIMITED EXECUTIVE OVERVIEW Key Investment Drivers Australia's most trusted agribusiness brand amongst farmers five years in a row ▪ Through the cycles ▪ Multi-faceted ▪ Room to grow market ▪ Cost and capital ▪ Network expansion ▪ Resilient balance sheet shareholder value agribusiness share in
Slide 7: Earnings Resilience Through Seasonal Volatility
ELDERS LIMITED EXECUTIVE OVERVIEW Earnings Resilience Through Seasonal Volatility Resilient EBIT reflects improving seasonal conditions and client activity notwithstanding lost first quarter earnings First Second Third Fourth Eight Point Plan Eight Point Plan Eight Point Plan Eight Point Plan EBIT¹
Slide 8: People and Customer Highlights
ELDERS LIMITED EXECUTIVE OVERVIEW People and Customer Highlights 2 lost time injuries 45% women in the workforce 9.0 total recordable injury #1 most trusted 21% frequency rate agribusiness brand women in senior positions amongst farmers fifth year in a row¹ 47 77% net promoter score employee engagem
Slide 9: Safety, Health and Wellbeing
ELDERS LIMITED EXECUTIVE OVERVIEW Safety, Health and Wellbeing Sustaining a safer working environment Lost Time Injuries (LTI) Total Recordable Injury Frequency Rate (TRIFR)1 6 18.7 15.1 -17% 12.6 3 3 3 Average 10.1 9.0 2 2 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 1. All fatalities, LTIs an
Slide 10: Sustainability Performance
ELDERS LIMITED EXECUTIVE OVERVIEW Sustainability Performance On track to achieve Scope 1 and 2 emission targets by 2030 CLIMATE TARGETS1 OUR PROGRESS Targets set to reduce our Scope 1 and 2 greenhouse gas emissions: ▪ Focus for 2024 was embedding our sustainability principles into business operation
Slide 11: Financial Overview
ELDERS LIMITED EXECUTIVE OVERVIEW Financial Overview Improved second half unable to fully offset materially impacted first quarter earnings, notwithstanding improving seasonal conditions and client sentiment $128.0m 11.3% 129% 36c Underlying EBIT Return on Capital Cash Conversion Dividends Per Share
Slide 12: Financial Results
Financial Results Presented by Paul Rossiter (CFO) A11 Elders Limited
Slide 13: Financial Performance Overview
ELDERS LIMITED FINANCIAL RESULTS Financial Performance Overview ▪ EBIT within guidance, supported by return to average seasonal conditions in most regions FY24 Underlying EBIT ▪ Achievement of cost targets ▪ Second half EBIT exceeded 2H23 ▪ Thirteen acquisitions in FY24 with ongoing pipeline ▪ Growi
Slide 14: Five-Year Financial Performance
ELDERS LIMITED FINANCIAL RESULTS Five-Year Financial Performance EBIT within guidance with forecast return to average seasonal conditions forecast in FY25 Sales Revenue ($m) Gross Margin ($m) +10.6% +9.8% 3,445 3,321 3,131 653 638 619 2,549 529 2,093 438 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23
Slide 15: Five-Year Shareholder Returns
ELDERS LIMITED FINANCIAL RESULTS Five-Year Shareholder Returns FY24 materially impacted by seasonal and market conditions in the first quarter Underlying Earnings per Share (cents) Adjusted Underlying Earnings per Share (cents)¹ -6.5% 96.7 97.3 134.1 69.9 66.3 96.7 87.6 69.9 40.7 53.4 97.3 66.3 40.7
Slide 16: FY24 Financial Summary
ELDERS LIMITED FINANCIAL RESULTS FY24 Financial Summary Resilient financial result despite below average seasonal and market conditions in the first quarter Key metrics ($m) FY24 FY23 Var Var % Sales revenue 3,131.3 3,321.4 (190.1) (6%) Gross margin 637.6 619.0 18.6 3% Gross margin % 20.4% 18.6%
Slide 17: Gross Margin Diversification
ELDERS LIMITED FINANCIAL RESULTS Gross Margin Diversification Increasing product diversification through targeted organic and acquisitive growth Total Gross Margin ($m) 172.9 -10.6% 652.7 619.0 637.6 158.8 147.0 +8.3% 141.9 FY22 FY23 FY24 123.1 113.7 +38.8% +5.6% 82.6 -5.5% 73.1 75.7 +1.9% 71.7 +0.4
Slide 18: Cost Growth Excluding New Business
ELDERS LIMITED FINANCIAL RESULTS Cost Growth Excluding New Business Cost excluding growth and transformation increased 1.8%, well below CPI Cost Increase excl. Growth Growth Adjusted Cost Movement² ($m) and Transformational Commentary Initiatives ($m) Base Target: ▪ CPI increase was partially funded
Slide 19: Industry Backdrop – Rural Products
ELDERS LIMITED FINANCIAL RESULTS Industry Backdrop – Rural Products Sales negatively impacted against prior period by a full year of lower crop protection prices FY23 FY24 FY23 FY24 Glyphosate 95%¹ ($/kg) UREA Index ($/tonnes)¹ 14.0 9-Yr Mean 1,200 5.1 Std 3.4 Std 10-Yr Mean 1,130 +/-1 Std Dev Dev 1
Slide 20: Continued Volume Growth Across Key Products
ELDERS LIMITED FINANCIAL RESULTS Continued Volume Growth Across Key Products Continued sales volume growth unable to offset lower crop protection prices against prior period Volumes (Tonnes’ 000) 1,571 107 Animal Health Crop Protection ▪ Lower volume growth impacted by weaker ▪ Volumes impacted by c
Slide 21: Industry Backdrop – Livestock
ELDERS LIMITED FINANCIAL RESULTS Industry Backdrop – Livestock Sustained uplift in livestock markets with improvement seen in volumes traded and prices FY23 FY24 NYCI ($/Head) ▪ FY24 index experienced a positive revision (+82%) since September 2023, before reverting to the 10- year mean 2,500 1,840
Slide 22: Return on Capital
ELDERS LIMITED FINANCIAL RESULTS Return on Capital Materially impacted by first quarter and the cumulative impact of transformation projects ahead of benefits realisation Return on Capital (%) Normalised Return on Capital (%) 15.8% -1.2 0.3% 16.9% 0.9% 0.9% 15.8% 0.5% 4.5% 2.8% 11.3% 16.0% 11.3% Mis
Slide 23: Working Capital
ELDERS LIMITED FINANCIAL RESULTS Working Capital Significant progress on inventory reduction, offset by higher debtors at balance date Working Capital ($m) Disciplined Capital Management Trade and Other Receivables¹ ($m) Average +157 Balance Date +42 ▪ FY24 average working capital benefitted from di
Slide 24: Cash Flow
ELDERS LIMITED FINANCIAL RESULTS Cash Flow Cash conversion evident of focus on inventory management, debtors elevated by later season in WA and SA Operating Cash Flow ($m) Cash Conversion (%)2 19.2 (20.6) 200.0 -34 163% 73.4 129% 128.0 20.9 (157.2) (74.6) 82.9 FY23 FY24 93.8 AASB 16 Adjusted Cash Co
Slide 25: Net Debt and Financial Ratios
ELDERS LIMITED FINANCIAL RESULTS Net Debt and Financial Ratios Banking covenants maintain headroom with improvement forecast from a normalised first quarter Leverage Ratio Interest Cover Gearing Ratio Net Debt, Balance Date ($m) Balance date net debt / EBITDA / net interest Balance date net debt / c
Slide 26: Target Leverage
ELDERS LIMITED FINANCIAL RESULTS Target Leverage Pathway to target in FY25 Q1 (1.5 – 2.0 times), to be driven by normalised first quarter and net debt reduction Leverage (times) Leverage Commentary³ + 1.1 ▪ Leverage 2.5 times, normalised for Q1¹ 3.1 ▪ Pathway back to target in FY25 H1 enabled by (0.
Slide 27: Strategy and Outlook
Strategy and Outlook Presented by Mark Allison (Managing Director and CEO) A26 Elders Limited
Slide 28: New Format, simplified priorities
Option 3 – New Format, simplified priorities Compelling shareholder returns Industry leading sustainability outcomes Most trusted Agribusiness brand 5-10% EBIT and EPS growth through the cycles at across health and safety, community, environment and in rural and regional Australia minimum 15% ROC go
Slide 29: Our Strategic Priorities: Transform
ELDERS LIMITED STRATEGY Our Strategic Priorities: Transform Wave 2 go-live to occur November 2024 SYSTEMS MODERNISATION¹ Modernising our platforms to deliver more efficient business processes FY23 FY24 Total Budget Wave 2 CAPEX 2.3 17.4 24 – 27 (Retail) OPEX - non underlying - 5.3 16 – 18 Total 2.3
Slide 30: Our Strategic Priorities: Innovate & Grow
ELDERS LIMITED STRATEGY Our Strategic Priorities: Innovate & Grow Strategically growing our footprint Elders’ Points of Presence4 GROWTH ENABLERS 618 3.5% CAGR Focus areas for future growth in line with the eight-point 597 plan foundations 576 ▪ Large acquisitions 558 ▪ Organic growth ▪ Bolt-on acqu
Slide 31: Market Outlook
ELDERS LIMITED OUTLOOK Market Outlook FEED AND RURAL AGENCY REAL FINANCIAL COSTS AND PROCESSING PRODUCTS SERVICES ESTATE SERVICES CAPITAL SERVICES ▪ Margin stability with farm ▪ Cattle and sheep ▪ Margin relief for regional ▪ Major bank transition to ▪ High residency and ▪ Continued traction in cost
Slide 32: Questions
Questions Following Next Presentation A31 Elders Limited
Slide 33: Appendix
Appendix A32 Elders Limited
Slide 34: Key Performance Indicator Trends
ELDERS LIMITED APPENDIX Key Performance Indicator Trends Providing earnings resilience against market volatility through the Elders diversified business model Agency Services: Cattle Volume (‘000) Agency Services: Sheep Volume (‘000) Rural Products: Gross Margin ($m) Real Estate Services: Property M
Slide 35: Geographical Diversification
ELDERS LIMITED FINANCIAL RESULTS Geographical Diversification Resilient result supported by geographic diversification 18% 15% 34% WESTERN SOUTH VICT O RIA AND AU ST R AL I A AU ST R AL I A RIVERINA $31.1m $26.7m $58.4m -38% YOY -27% YOY 2% YOY 23% 7% 3% NEW SOUTH Q U EEN SL AN D AN D T ASM ANI A W
Slide 36: Product Performance
ELDERS LIMITED FINANCIAL RESULTS Product Performance Retail gross margin improvement experienced in fourth quarter following historically low input prices Change in product margin ($m) FY23 103.7 NPAT Retail Products Retail (22.4) Retail Gross Margin (%) Products ▪ Animal health sales negatively imp
Slide 37: Cost Drivers
ELDERS LIMITED FINANCIAL RESULTS Cost Drivers Investment in future growth driving cost uplift Costs ($m) Underlying Cost Base ($m) FY24 vs FY23 FY23 Costs 448.2 ³ People: +12.6% ▪ FTE decreased by 15, excluding acquisitions and new business 510 ▪ Wage growth in line with CPI People 24.5 421 448 363
Slide 38: Transformation Impact on ROC
ELDERS LIMITED FINANCIAL RESULTS Transformation Impact on ROC Cumulative impact of transformation projects ahead of benefits realisation Return on Capital (%) EBIT ($m) Average Capital ($m) +71.2 26.9% 237.0 1,135.8 0.7 4.9 45.8 1,064.6 20.6 +46.0 -39.1 23.0% 885.6 0.5 176.8 4.7 170.4 6.0 3.9 739.5
Slide 39: Business Model
ELDERS LIMITED APPENDIX Business Model Feed and Digital and Rural Products Agency Services Real Estate Services Financial Services Processing Services Technical Services Retail Wholesale Fee for Service Rural Products Rural Products Livestock Broadacre Loan Brokerage Killara Feedlot (246 agronomists
Slide 40: Gross Margin Sensitivity
ELDERS LIMITED APPENDIX Gross Margin Sensitivity Geographic and product diversification mitigates the impact of individual market volatility $m 12 10 8 6 4 2 +$50 +100k head +$10 +500k head +$25m +50bps +100bps +100bps +10% 0 -$50 -100k head -$10 -500k head -$25m -50bps -100bps -100bps -10% -2 -4 -6
Slide 41: ABARES September Market Outlook
ELDERS LIMITED OUTLOOK ABARES September Market Outlook Gross value of production to rise 4% to $86.2 billion, driven by higher livestock production and value, and winter crop production on improved seasonal conditions Beef and Veal1 Sheep1 Wool1 Winter Cropping2 Summer Cropping2 Average saleyard pri
Slide 42: Elders Capital Management Framework
ELDERS LIMITED APPENDIX Elders Capital Management Framework The Elders Eight Point Plan aspires to deliver Total Shareholder Return (TSR) in the top quartile of ASX200 companies at investment grade risk Capital Management Framework Key Features of our capital management framework Compelling Total Sh
Slide 43: Elders Limited
Elders Limited