Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — FY2005 Earnings Presentation
43 slides from Australian Agricultural's earnings presentation, Feb 8, 2006
Slide 1: Results Presentation for the year ended 31 December 2005
Australian Agricultural Company Limited Results Presentation for the year ended 31 December 2005
Slide 2: Master Kobe
KOBE SUISINE, Zé MAS ing Downs Wagy TER KOBE. ny
Slide 3: AACo 10 years on
mF MAS TER KOBE. AACco 10 years on * Ten years ago AAco was an autonomous listed company. The major shareholder was Colonial Mutual Life Assurance Company * During 1995 Elders Australia Limited made a successful takeover bid for AAco which valued the company at approximately $160m for 100% of the Co
Slide 4: AACo 10 years on
WORE “MASTER KOBE. AAco 10 years on Annual /Annual 1995 pre Average |Average purchase 2001 Increase |Increase by Elders | Relisted |2005 Today|from 1995|from 2001 Gross Assets $'000 155,542 | 338,303 945,157 51% 45% Net Assets $'000 125,363 | 200,015 558,678 35% 45% Value of Property Plant and Equip
Slide 5: AACo 10 years on: Gross and Net Assets
® om ae MASTER KOBE. AAco 10 years on { Gross Assets $'000 H Net Assets $'000 1,000,000- 900,000- 800,000 - 700,000- 600,000- 500,000 - 400,000- 300,000 - 200,000- 100,000 - Just under $1 Billion 1995 pre 2001 Relisted 2005 Today purchase by Elders
Slide 6: AACo 10 years on: Property, Plant and Equipment
MASTER KOBE. AAco 10 years on Value of Property Plant and Equipment $'000 500,000 | 450,000, 400,000, 350,000; 300,000; 250,000; 200,000 | 150,000 | 100,000 | 50,000; 0 4 1995 pre purchase 2001 Relisted 2005 Today by Elders
Slide 7: AACo 10 years on: Turnoff / Head Sold
fy CBT MASTER KOBE. AAco — 10 Years On @ Turnoff / Head Sold $000 200,000- 180,000- 160,0005 140,000- 120,000- 100,000- 80,000, 60,000- 40,000 > 20,000 - 0- 1995 pre purchase by 2001 Relisted 2005 Today Elders
Slide 8: Recent Returns and Earnings
Recent Returns and Earnings Note 1 - In the following pages all references to a year means a Calendar Year (12 months ended 31 December) Note 2 — Due to the Company’s change in Balance Date, the comparative figures are indicative of past performance only as they are extracts from prior period accoun
Slide 9: Total Shareholder Return - $10,000 invested
Total Shareholder Return - $10,000 invested for the last 4 Years $25,000 $20,000 $15,000 $10,000 - $5,000 $0 T T T T 2001 2002 2003 2004 2005 ——AAco — “S&P/ASX 300 Accumulation index
Slide 10: Profit and Loss Statement
‘ofit and Loss. Statement or the year ended _ iH "pee 02. Bec. Accounting Standard Applied : : AASB. AASB Extracted from Accounts that have been: Ss Ss Compiled Compiled Audited $000 $000 $000 Revenue from Ordinary Activities 84,386 140,338 150,507 Market Valuation Component of Biological Assets/SGA
Slide 11: Cash Flow Summary
OBE. CASH FLOW ‘Cash Flow Summary Forthe Yeatended | -|—=—CcDee 3 Dect —Bec 5 Receipts go BOF 187 809 205 004 ‘Payments (109 740) (172 825) (170 509)) Interest (6,320) (8,179) (15 825) Tax (6,505) (511) (4 005) ‘Other, GST etc 2 063)) 1271 ___ 566 NET OPERATING CASH FLOW (24021 7.565 15,231 Wetlnves
Slide 12: Operating Cash Flow - last four years
Operating Cash Flow — last four years 20,000, 15,000- 10,000- 5,000- 0 -5,000- -10,000- -15,000- -20,000- -25,000- 2001 2002 2003 2004 2005 f NET OPERATING CASH FLOW $'000 accounting standards applied and are compiled from a mix of reviewed and audited accounts. Reconciliations between AIFRS and AAS
Slide 13: Returns over four years
over 3 years i EE HE 2002 2003 2004 2005 Average ASSET BASED RETURNS oo ca Ce Increase in land values represented in 0% 32% 21% 17% 18% movements in the Asset Revaluation Reserves as a percentage of opening total Property Plant and Equipment (Net of notional tax) EBITDA Return on Average Herd 1% 14%
Slide 14: Herd Statistics
© ~ x hd ! UMMASTER KOBE. Herd Statistics Year Ended Dec-02 Dec-03 Dec-04 Dec-05 Number of cattle sold 147,534) 135,892 175,725 185,313 Average gross price of cattle sold (per head) | $ 738.20 | $ 747.63 | $ 947.36 908.67 Natural increase (No. of head) 121,683 109,810 119,025) 143,216 Number of catt
Slide 15: Balance Sheet - Assets
BALANCE SHEET - ASSETS dE 31/12/05 | 311204 |... $000 $000 Comment Current Assets Cash and cash equivalents 13,640 7,692 Late Receipts in December Receivables 6,716 6,061 Inventories 12,241 10,365 Biological assets - livestock 155,323 140,164 Total including non current $372m v $356m. Average per he
Slide 16: Balance Sheet - Liabilities and Equity
ASTER KOBE. BALANCE SHEET - Liabilities and Equity Current Liabilities Payables 24,285 18,633 Late purchase of Cattle in December Provisions 2,199 2,114 Interest bearing liabilities 11,875 22,371 See total debt comment below Interest rate swaps 289 - Current tax liabilities - 1,262 No tax payable du
Slide 17: Balance Sheet - Equity
| (MASTE R KOBE. BALANCE SHEET - EQUITY _$00¢ Equity Issued capital 134,220 60,830 Rights Issue 65m, Options 8m Reserves 327,213 243,671 Asset Revaluation increase Retained profits (accumulated 97,054 97,675 Dividend paid absorbed losses) this years profit 100% Total parent entity interest in 558,48
Slide 18: Cattle Production Factors 2005
CATTLE PRODUCTION FACTORS 2005 Rainfall a | Grass t Fertility a Grain = Genetics U Tv i in sin. Risk Management
Slide 19: Rainfall in mm per annum
Rainfall in m.m. per annum (Long Term Average M@ Actual 2005| i i 1200 5 Only 4 stations got within 10% of 1000 average rainfall 800 Suffered the Most Growing and Backgrounding 600 200 Breeding Growing Backgrounding
Slide 20: Monthly Rainfall across all Stations in 2005
Monthly Rainfall (mm.) across all Stations in 2005 Actual LT Avg A great start to 2006 ! Abnormal rains in June, encouraged graziers to hang on to store cattle — thereby forcing prices up
Slide 21: Monthly season index
KOBE. MASTER. MMMM Lower than avg rain fall in Dec —@— Monthly index Below average season affected Natural Y o> © Oo Vs Bb ok 2 © © Increase and & Ss S 2 i s we gS s Ss r Weight gains COIS SA 0 OE SO OE SE O_O) This index represents the combination of the monthly state of natural grass proteins & bu
Slide 22: Fertility: Branding Percentages
80.0% 75.0% 3 70.0% 7 65.0% 7 60.0% <a “ i 2002 2003 2004 2005 B Branding % FERTILITY Branding Percentages The prolonged drought had an impact on the breeding herd’s fertility rate. Cattle have a genetic response to low rainfall conditions in that they do not fall pregnant easily and thus a number o
Slide 23: Grains: Average Monthly Sorghum Prices
KOBE. Grains Average Monthly Sorghum Prices — last 3 years $/Tonne 300 250 + 200 + 150 + 100 + 50 + ee ee ee ee nL 2003-02 2003-06 2003-10 2004-02 2004-06 2004-10 2005-02 2005-09 (Feb) (Jun) (Oct) (Feb) (Jun) (Oct) (Feb) (Sep) np 0
Slide 24: AACo Gulf Group EBV $1824 Index Trend
$16, $144 $124 $10; $8 4 $64 $4; $2; 1997 $0 GENE AACo Gulf Group EBV $1824 Index Trend (Gulf Composite) TICS 1999 mI $_1824 2001
Slide 25: Example of productivity and value gains - Rockhampton Downs
Example of productivity and value gains —- Rockhampton Downs 2004 Capacity — 18,500 hd Capex Spend - $587k Incr Carry by - 5,000 hd Resulting in: * 28% iner in herd capacity * 28% increase in base land value * followed by a capital gain increase of 38% A $19,000 $17,000 Capital Gain on land, 3,013 $
Slide 26: Risk Management
RISK MANAGEMENT In conjunction with professional risk assessors the company has procured a formal risk management plan that has identified 23 key risk areas, the top 5 of which are listed below Disease Outbreak -- long term market closure Emergency Disease Continuity Plan and Trial run working in co
Slide 27: The Beef Market
THE BEEF MARKET Domestic USA Brazil Japan Korea
Slide 28: AACo Beef Price Indicator with Benchmarks
& 2 ae 2 & § * ¥ Sh so CIP POSS & & - AACo Beef Price Indicator with Benchmarks Monthly : July 2002 - Dec 2005 f, [Aoi Seles GEE ARCO Grainfed Steers —~— ESYCP —] - COM ] he we F % Sa) Na < Ao a 3 He & Ra & se ys? *s s SESBSSBRRERRARE Maa 619
Slide 29: Tonnes Consumed of Beef and Veal
1000 Tonnes Consumed of Beef and Veal Say 2000 2001 2002 2003 2004 2005 2006f CX Australia Source : USDA 29
Slide 30: Tonnes Produced of Beef and Veal
SR ROBE. 1000 Tonnes Produced of Beef and Veal 2000 2001 2002 2003 2004 @ USA CO Australia 2005 2006f Source : USDA 30
Slide 31: Brazil and Australia beef
2002 2003 2004 2005 2006f Brazil O Au stralia Source : USDA 31
Slide 32: Tonnes Exported
— < | 1000 Tonnes Exported = N i) oO 4 I = o o oS - I oe o oe = I ao o o 4 I hb o o _ I 0- Z dh 2000 2001 2002 2003 2004 2005p 2006f C1 Australia BH USA & Brazil Source: USDA *
Slide 33: Japan: Tonnes Consumed of Beef and Veal
OWOMASTER KOBE. @ 1000 Tonnes Consumed of Beef and Veal 2000 2001 2002 2003 2004 2005 2006f @ Japan Consumption UImports Source : USDA 33
Slide 34: South Korea beef consumption
@et OHOMASTER KOBE. 2001 2002 2003 2004 2005 2006f @ Korea (Sth) Consumption * 1000 T Source : USDA 34
Slide 35: Regional exporters 2006 forecast
35 Source : USDA South America 2990 42% Other 48 1% a = im < z Beef and Veal Europe and Russia 310 4% India and China 765 11% Australia & NZ 2095 29% 13% 1000 Tonnes Regional exporters 2006 forecast North America 930
Slide 36: Competing Meats in the world
@e ule UP MASTER KOBE. 1000 Tonnes Competing Meats in the world 100,000, 90,000 80,000 5 70,000 5 60,000 5 50,000 - 40,000 + 30,000 + 20,000. a z Ee E Lei Le 2000 2001 2002 2003 2004 2005p 2006f s @ Beef (J Poultry & Pork Source : USDA 36
Slide 37: Branded Beef Total Monthly sales over 2 years
oe we Neate x MASTER KOBE a Sa ws wi Branded Beef Total Monthly sales over 2 years — Driven by Wagyu §,000,000 4,500,000 Monthly branded beef sales Jan 04 - Dec 05 4,000,000 3,800,000 3,000,000 SNS += 2,500,000 2,000,000 + 1,806,000 + 1,000,000 $00,000 Vat - | y va yy) iy) Be A VA B VA 4 14 iB Vz Vy
Slide 38: Co-Branded Initiative - Greg Norman
Slide 39: The Future
THE FUTURE Outlook for 2006 Outlook for 2015 39
Slide 40: Outlook for 2006
; oy ® ASTER KOBE. Outlook for 2006 Market Outlook Factors influencing the market in Australia as assessed by AACo are: eSeasonal conditions — good start to season for most of the breeding stations although a much more even spread of rain across growing and backgrounding stations is still required e
Slide 41: Outlook for 2015
Outlook for 2015 — the next 10 years The current long term strategic plan embraces the following targets for the core business: 1. 2 3. 4 To more than double the herd size To Triple the production of feed crops To improve land carrying capacities by up to 20% on selected properties To acquire additi
Slide 42: Looking to the future - business development opportunities
SOE ote PWMASTER KOBE. Looking to the future - business development opportunities under consideration (over and above core business expansion) and subject of course to critical due diligence review: > Expansion of Wagyu production and meat sales Increasing participation in the portion control sectio
Slide 43: ears
ears i) KOBE | lKiore Wallue
Australian Agricultural Company — FY2005 Earnings Presentation on 6ix