Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — FY2021 Earnings Presentation
25 slides from Australian Agricultural's earnings presentation, May 20, 2021
Slide 1: The Art of Australian Beef: FY21 Results Presentation
For personal use only co THE ART OF AUSTRALIAN BEEF FY21 Results Presentation 20 May 2021
Slide 2: Summary information only; Disclaimer
For personal use 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
Slide 3: Executive Summary agenda
For personal use only Executive Summary Page 4 Progress in FY21 Page 6 Financial Performance Page 12 Operating Environment Page 17 Closing Remarks Page 22 3
Slide 4: Executive Summary
For personal use only Consolidation of positive H1 results in challenging and uncertain COVID-19 environment. Continued progress made in moving to a simpler and more efficient AACo: • Operating profit $24.4M ($17.7M pre JobKeeper1) vs $15.2M pcp. • Operating cash flow $18.4M ($11.7M pre JobKeeper1)
Slide 5: Herd and supply headwinds from drought and flood
In line with the historic low levels seen in the Australian national cattle herd, AACo Total overall revenue reduction of $68.6M or 21% vs pcp driven primarily by experienced lower calving in 2018-2020 due to prolonged drought and the Gulf lower volumes. For personal use only flood event. FY21 meat
Slide 6: Progress in FY21
Brand Portfolio and Consumer Engagement • Further rationalised brand portfolio - Westholme and Darling Downs now represent 74% of For personal use only AACo’s branded meat sales1. • Chef partnership digital campaigns (USA, Australia). • Category leadership – Westholme Flavour Wheel. Go to Market Mod
Slide 7: Commercial performance and branded beef strategy
Solid commercial performance despite challenges of Global Pandemic on Foodservice in FY21. For personal use only Focus on strategic market allocation and adapting our channel strategy to satisfy the rising growth of at home consumption and the home chef through gourmet marketplaces plus premium reta
Slide 8: Pricing growth by cut category
Westholme and Darling Downs $/kg annualised growth rate of +17%1 since 2019 driving total AACo $/kg annualised growth rate over same period of +8%1. For personal use only Average proportion of total meat available for sale by cut category (% carton weight kilograms) Loins and rump cuts represent app
Slide 9: Westholme brand growth and digital engagement
For personal use only Westholme brand grew from 11% to 25% of total meat sales. Westholme has more than tripled its following on Instagram, with majority of audience in USA. • Launched first paid digital marketing campaigns in partnership with chefs from USA and Australia, to drive brand awareness.
Slide 10: Darling Downs rollout in South Korea
For personal use only Rolled out Darling Downs new packaging and in-store activation in all 141 emart stores in South Korea, resulting in higher consumer average selling price. Implemented digital campaign in South Korea to continue to build on our consumer brand awareness (~14%). 10
Slide 11: Market allocation and mix optimisation
Focus on strategic market allocation and mix optimisation, to take advantage of changing consumer habits and “the rise of the at home chef”. Total Meat Sales North America For personal use only Branded meat sales1 $/kg pricing 14% favourable to pcp: • Successful shift to shopping channels for in-hom
Slide 12: Financial Performance
For personal use only Financial Performance
Slide 13: Financial performance highlights
For personal use only • Consolidation of solid H1 FY21 performance in the face of lower supply volume and challenging global pandemic environment, delivering positive operating profit 1 and cash flow. o Operating profit $24.4M ($17.7M pre JobKeeper1) vs $15.2M pcp. o Operating cash flow $18.4M ($11.
Slide 14: Consolidated Income Statement
Consolidated Income Statement ($M) FY 2021 FY 2020 Var $ Statutory EBITDA profit of $99.3M in FY21 vs $80.1M pcp. For personal use only Meat Sales 200.0 229.6 (29.6) Positive operating profit of $24.4M vs $15.2M pcp. Cattle Sales 65.5 104.5 (39.0) Positive operating profit of $17.7M pre JobKeeper1.
Slide 15: Consolidated Statement of Cash Flows
For personal use only Consolidated Statement of Cash Flows ($M) FY 2021 FY 2020 Var $ Positive operating cash flow of $18.4M vs $20.1M pcp. Positive operating cash flow of $11.7M pre JobKeeper1. Receipts from Customers 285.9 359.2 (73.3) Payments to Suppliers and Employees (253.6) (324.3) 70.7 • Del
Slide 16: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position ($M) 31 March 31 March Strong balance sheet position with net assets over $1B. 2021 2020 For personal use only • AACo maintains comfortable head room under existing bank covenants. Livestock 537.4 473.0 • Approximately $185M borrowing capacity available a
Slide 17: For personal use only
For personal use only 17
Slide 18: Sustainability and animal welfare progress
For personal use only Introduced AACo’s Beef Cattle Herd Management Carbon Project1 which has commenced the journey of reducing our emissions intensity of beef cattle production. Core activities identified under the BCHM to drive carbon abatement include: • Improved animal conversion through genomic
Slide 19: Consumer demand trends
For personal use only • Sustainable demand is being driven by long-term global trends – including a growing urban middle-class, growing consumer interest and awareness of provenance, sustainability, animal welfare and traceability. • The COVID-19 landscape has seen the rise of the ‘home chef’ and ne
Slide 20: Global beef exports and production outlook
Global Beef Exports by Calendar year (million tons Carcass Weight Equivalent) For personal use only • Long-term outlook for global beef consumption largely positive, underpinned by growth in populations and household wealth in emerging markets, particularly 11.1 throughout Asia. 10.9 10.8 10.1 • 202
Slide 21: Australian cattle market outlook
Throughout 2021 and 2022 both slaughter and live exports are expected to be depressed. • After dropping to its lowest number in 25 years in 2020, the national cattle herd is expected For personal use only to grow by 5% in 2021, close to its size in 2019. • The Eastern Young Cattle Indicator (EYCI) b
Slide 22: Closing Remarks
For personal use only • Commendable team effort in managing through challenging and uncertain COVID-19 environment. • AACo experienced lower calving in 2018-2020 due to prolonged drought and the Gulf flood event in line with the Australian cattle herd. o These headwinds have started to impact our me
Slide 23: Appendix
For personal use only CO THE ART OF AUSTRALIAN BEEF Appendix
Slide 24: Definitions of non-IFRS measures
For personal use only Operating Profit The measure of Operating Profit is a key indicator which is used to monitor and manage the Company. It eliminates the potential distraction caused by unrealised cattle valuation adjustments being recorded in the financial results and is a better reflection of a
Slide 25: Thank you
For personal use only CO THE ART OF AUSTRALIAN BEEF Thank you
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