Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — H1 2005 Earnings Presentation
37 slides from Australian Agricultural's earnings presentation, Aug 10, 2005
Slide 1: Half-Year Results Presentation
ASX Announcement Half-Year Results Presentation ASX Announcement No. 20/05 10 August 2005 AAco will today (10 August 2005) host an investor/media conference call at 10.00am (EST). To join the conference call please dial: Australia Freecall 1800 064 291 United States of America 1866 830 1117 United K
Slide 2: THIET UVEEU TESTU TTEU UT UATT TSS ESS SSeS Ses es ee CeUUCCUUL COU
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Slide 3: 2005 First Half Operating Conditions
2005 First Half Operating Conditions Operating Results Summary Segment Results Balance Sheet & Dividend Investment Profile Outlook & Guidance Questions
Slide 4: Operating Conditions
. : EE oy ee 1. EE a) Ss) Ly an Agricultural Company — 0 2005 Operating Conditions ae ae ne L c Ne ih ih u ae oe ean ONO, a) he ye EEE
Slide 5: Australian Rainfall Anomalies 1 January to 30 June 2005
Australian Government Bureau of Meteorology Australian Rainfall Anomalies 1 January to 30 June 2005 Product of the National Climate Cenire Migr boa go Haindall anomaly (mm} 1200rmm BOOum 8 Com inmecalth of flartrake 297, furdruzon Durcow of Bieicowclog
Slide 6: Monthly rainfall January to June 2005
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Slide 7: Rainfall months to June 2005
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Slide 8: AACo Beef Price Indicator with Benchmarks
cikg DW AACo Beef Price Indicator with Benchmarks Avg Monthly : July 2002 - June 2005 (July 05 Spot) 400 300 380 370 360 350 q ot tty i 310 LU 4 220 el 270 PL 250 / 240 230 220 4 A Co IACo All Sales Bz AACo Grainfed Steers —@—ESYCP —==[} = QCM 230 210 170 150 130
Slide 9: Operating Results Summary
SEES EEESS SSUES USSSSSSSESS SRE SEER Eee ES Ce iii, Oe ay a es 7 vo Ls Ee ae a iii iiiiiihhiiie Australian Agricult ral Comp FY 2. Operating Results Summary i , ee ae
Slide 10: Operating results summary: revenue, EBITDA, NPAT
Dec 04 Jun 05 one ene 79.9 85.6 EBITDA ($m) 17.0 20.6 NPAT ($m) 44 6.7. Cattle Herd (head) 523,700 555,600 EPS (cents) = 2.2 3.1 * Increased property and cattle holdings, Victoria River Group (Tejas).
Slide 11: Operating cash flow and cattle sold
Dec 04 Jun 05 Operating Cash flow (16.1) 2.0 Cattle Sold (head) 77,893 88,844 Kg sold (D.W) 206m —«23.0m Avg selling Price/ Hd * $1010 $926 Avg Selling Price / Kg * $3.82. $3.57 * Lower average selling prices due to the dip in prices April - June
Slide 12: Six Monthly Net Profit After Tax
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Slide 13: Segment Results
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Slide 14: Results by business segment
Results Business Segment Cattle and Wholesale Beef Other Total Farming Breeding, Boxed and Growing, Chilled beef: - RMP (51%) + Components Feedlotting, Live] Wagyu, 1824, | Shakespeares Cattle, Feed Chefs Partner Pies (25%) Crops & MIS (45%) $'000 $'000 $'000 $'000 RevenueGmtoJun05 | OF BiB B52] eee
Slide 15: The poor rainfall resulted in several outcomes
The poor rainfall resulted in several outcomes: 1. Smaller farmers were forced to sell light condition grass fed cattle thereby reducing the market price AAco relocated cattle from dry regions to minimise low feed and water effects on cattle growth AAco held back approximately 15,000 head ($10m) fro
Slide 16: Monthly branded beef sales Jan - Jun
$ Monthly branded beef sales Jan 04 - Jun 05 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 + 4,500,000 1,000,000 500,000 | o4 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 Jut-04 Aug-04 Sep-04 Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 16
Slide 17: Demand for Wagyu has been increasing
€ Demand for Wagyu has been increasing resulting in good margins Increase in the number of Coles stores selling “1824” from 9 to 26 in SE Qld. Chefs Partner our conduit to food service and domestic supermarkets for portion controlled products - now making consistent profits Increased interest from K
Slide 18: Balance Sheet
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Slide 19: Assets at June 2005
%o change Assets at 30 June 2005 $m from Dec 2004 Livestock 363.0 A 2% PP&E 390.9 A 1% Other Assets * 82.7 A 23% Total 836.6 A 3.5% * Other Assets — the main growth was in cash and receivables due to timing of Rollover of bank Bills and increased sales in Branded Beef
Slide 20: Liabilities and Equity
%o change Liabilities and Equity $m from Dec 30 June 2005 2004 Borrowings * 236.0 Vo 19% Other Liabilities 118.4 A 4% Reserves & Equity * 4822 A 20% Total 836.6 A 3.5% * Rights issue raised $65m used to repay debt and increase equity 20
Slide 21: Dividend history
Dividend Type se Franked % Final. 700 20. 22-Sep-05 14-Oct-05 ~ Declared | Final 6.00 70 16-Sep-04 13-Oct-04 Paid Final 4.00 100 23-Oct-03 28-Nov-03 Paid Interim 2.00 100 20-May-03 13-Jun-03 Paid Final 6.08 100 26-Aug-02 4-Oct-02 Paid The 2005 dividend of 7 cents per share is: *a 16.7% increase over
Slide 22: Investment Profile
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Slide 23: AACo is essentially a long term prime rural land owner
AACo is essentially a long term prime rural land owner with a strong cattle production and branded beef business. The returns generated are in the form of: 1. Profit from the production of beef cattle 2. Profit from the distribution of wholesale branded beef 3. The underlying capital gain in prime r
Slide 24: Investment Profile cont.
~ Investment Prof le cont... _ __ December year end 2001 2002 2003 2004 Average Cattle Assets 215,721| 194,854] 240,270] 355,642] 251,622 EBITDA 57,273 2,813 30,661 63,163 38,478 Return on Cattle : _ Assets 21% 1%] | 13% 18%] 15% 2001 2002 2003 2004 Average All other Assets 122,582 | 141,308 | 260,5
Slide 25: Australian Grazing Property Index 1980 - 2004
AGPI Australian Grazing Property Index 1980 - 2004 Queenstland and New South Wales (Actual Values) 1400 1200 +— Te WZ 7000 800 600 A Index 1980 = 100 400 200 5 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year
Slide 26: Real Growth in Land Values in Qld and NSW
18.0% 16.0% 14.0% 12.0% 10.0% 8.0% % per annum 6.0% 4.0% 2.0% 0.0% Real Growth in Land Values in Qid and NSW Commercial Source: HTW/RMP AGPI and ABS National Accounts AGP All rural Residential All Qid and NSW 26
Slide 27: Outlook: seasonal conditions, cattle prices, beef demand
Australia - Seasonal conditions — The very late rain in June will assist a recovery in the second half Australia - Cattle prices suffered through April, May and June but have rebounded in July The world demand for beef remains strong, however there may be temporary fluctuations in demand as consumer
Slide 28: Maximise revenue per unit for shareholders by
Maximise revenue per unit for shareholders by: — Improving productivity through breed development ~ Utilising market intelligence and improving channel management ~ Increasing sustainable carrying capacity through best practice land management ~ Controlling costs Strive to satisfy customer demand fo
Slide 29: Guidance for the balance of 2005
Achieve continuous improvement in: ~ Safety -~ The environment ~ Risk management and governance systems This is reflected in AACo’s satisfactory “A” rating by the independent research firm Reputex Pty Ltd. Guidance for the balance of 2005 If cattle prices remain at present levels for the balance of
Slide 30: Questions
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Slide 31: en a ifs rere
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Slide 32: Livestock is valued in accordance with AASB141 Agriculture
Livestock is valued in accordance with AASB141 ‘Agriculture’ 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 prices — trading stock In markets lacking liquidity, prices determined reflect a
Slide 33: Trading Cattle and Breeding Cattle valuation
G @ Trading Cattle -~ QCMI: an indicator only ~ Roma, Queensland cattle store sales ~ Prices quoted to AACo at year end Breeding Cattle ~ Large cattle property sales inclusive of breeding stock ~ Australian breeding herd outlook ~ US breeding herd & beef supplies outlook ~ Global beef demand outlook
Slide 34: Cattle type descriptions
Type Description Calves Vealer Steers & Heifers Yearling Steers & Heifers Steers Heifers Manufacturing Steers Cows - Bulls Feeder Steers Feeder Heifers Male and female calves less than 6 months old Castrate male or female cattle with no permanent teeth. Less than 12 months old and still suckling Cas
Slide 35: Term Definition
Term Definition ABARE Australian Bureau of Agricultural and Resource Economics Bos indicus Refers to tropical or humped breeds e.g. Brahman Bos Taurus Refers to a class of temperate British and European breeds e.g. Angus BSE Bovine Spongiform Encephalopathy, commonly known as ‘mad cow Case Ready Mea
Slide 36: Term Description
a Term Description Al FRS. Dividend Yield DPS EBIT EPS Gearing Leverage NTA NPAT. Australian International Financial Reporting Standards Dividend per share / Current Share Price Dividends per share Earnings before interest and income tax Earnings per share Net Debt / Equity Net Debt / (Net Debt + Eq
Slide 37: SRE BUSSE RSS RaEE EE
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