Elders Limited · ASX:ELD
Elders — 12th PAC Partners Agribusiness and Food Conference (April 2015)
28 slides from Elders's conference presentation, Apr 28, 2015
Slide 1: Presentation to the 12th PAC Partners Agribusiness and Food Conference
For personal use only 28 April 2015 Presentation to the 12th PAC Partners Agribusiness and Food Conference Attached is a presentation delivered today by Elders’ CEO Mark Allison to the 12th PAC Partners Agribusiness and Food Conference. Peter Hastings Company Secretary 1
Slide 2: 12th PAC Partners Agribusiness and Food Conference
For personal use only 1 2 t h PA C P a r t n e r s Agribusiness and Food Conference Mark Allison, MD & CEO Elders 28 April 2015
Slide 3: Agenda
Agenda For personal use only FY13 : The transformation FY14 : The turnaround FY15 : The consolidation FY17 : The galvanising Market Outlook Industry Context Year 3 to 5
Slide 4: FY13: The transformation
For personal use only FY13 : The transformation • Elders has transitioned from a complex and highly geared conglomerate to an agribusiness focused company with lower costs and substantially lower debt • Elders is an Australian agribusiness that seeks to create real value for all its stakeholders in
Slide 5: Our business model
For personal use only Our business model Feed & Retail Financial Live Export Agency Services Processing Products Services Services Services ` Short haul livestock Long haul livestock Elders Indonesia Farm Supplies Killara Feedlot Elders China Real Estate Livestock Insurance Fertiliser Banking Grain
Slide 6: FY14: The turnaround
For personal use only FY14 : The turnaround Safety Operational Leadership Capital Performance Performance Renewal Management Lost time injuries from 33 to $77.3m underlying profit Board renewal with two new ROC improved in line 20 turnaround NEDs and new Chair with renewed focus Target is
Slide 7: FY14 financial performance
For personal use only FY14 financial performance $ million 30 Sept 2014 30 Sept 2013 Change from 2013 Sales revenue 1,431.5 1,422.1 + 9.4 Underlying EBIT 27.3 (48.9) + 76.2 Underlying profit / (loss) after tax 8.8 (68.5) + 77.3 Reported profit / (loss) after tax 3.0 (505.3) + 508.3 Net debt (137.6)
Slide 8: Eight Point Plan
For personal use only Eight Point Plan Our strategic vision for becoming an efficient user of capital and a business that generates returns for its stakeholders 7
Slide 9: FY15: The consolidation
For personal use only FY15 : The consolidation Safety Operational Key Efficiency and Performance Performance Relationships Growth • Continued emphasis on safety • Increase underlying EBIT • Create a values, safety and • Implement comprehensive performance based culture branch benchmarking • Implemen
Slide 10: FY17: The galvanising
For personal use only FY17 : The galvanising EBIT opportunities $ million 60 27 FY14 Values, Geographical Retail Products Agency Services Financial Services Feed & Processing Live Export Services Costs, Capital & FY17 Performance & Coverage & Services Efficiency Brand Distribution Channel 9
Slide 11: Current projects within Elders
For personal use only Current projects within Elders Agronomic Meat Branding National Brand Centre of Project Campaign Excellence Conceptualised an industry Developing branded meat Addressing perceptions of leading platform for product lines for Elders through national agronomic best practice
Slide 12: Market outlook
For personal use only Market outlook Grains and oilseeds Sugar Cotton Horticulture Cattle, beef and veal Live cattle exports Sheep & lamb Wool 11
Slide 13: Grains and oilseed production to rise
For personal use only Grains and oilseed production to rise Australian grain and oilseed production is forecast to rise over the next five years to reach 42.6 million tonnes by the end of the decade. The total area planted in 2015‐16 to grains and oilseeds is forecast to remain largely unchanged
Slide 14: Sugar - growth in plantings, prices and exports
For personal use only Sugar - growth in plantings, prices and exports The world sugar glut will push down mill‐gate returns to Australian cane growers by 1% to $36 a tonne in 2014‐15, the lowest since 2007‐08. Prices will rise to $39 a tonne in FY16 on the back of the lower Australian dollar and
Slide 15: Cotton – growth expected next season
For personal use only Cotton – growth expected next season Australian cotton production is projected to increase over the medium term (on the back of better seasonal conditions) almost doubling from a forecast low of 470,000 tonnes in 2014‐15 to 818,000 tonnes by 2019‐20. In 2014‐15, the area pl
Slide 16: Horticulture - increasing gradually
For personal use only Horticulture - increasing gradually The gross value of horticultural production is expected to increase gradually to $9.8 billion in 2019‐20. For some fresh lines, the weaker Australian dollar and increased opportunities in Asia are expected to stimulate an increase in expo
Slide 17: Cattle prices to remain strong
For personal use only Cattle prices to remain strong Driven by reduced supply and solid export demand, underpinned by a low Australian dollar. Herd rebuilding following two years of drought has to date only put a slight check on the supply of cattle slaughter ‐ largely because the continued thre
Slide 18: Strong demand for Australian beef to continue
For personal use only Strong demand for Australian beef to continue Supported by an assumed lower Australian dollar and tariff reductions in some major markets (as a result of recent FTA’s) The United States is likely to remain Australia’s largest beef export market out to 2019 Beef exports to
Slide 19: Live cattle exports to remain high
For personal use only Live cattle exports to remain high In FY15 live feeder and slaughter cattle exports are forecast to remain at 1 million head, before falling 10% in FY16 as supplies of exportable cattle shrink ABARES expects those numbers to rise back to a million head by 2019‐20, supported
Slide 20: Lamb and sheep prices to rise
For personal use only Lamb and sheep prices to rise The national sheep flock is expected to decline by 3% to 70.7 million head by 2014‐15, before commencing a gradual rebuilding phase to reach 76 million head by 2019‐20 Lamb slaughter will riser to 22.3 million in 2014‐15, the highest number for
Slide 21: Lamb production and exports growth in FY15
For personal use only Lamb production and exports growth in FY15 • Domestic lamb consumption is expect to remain at the current level over the next few years. • Lamb exports are predicted to reach a record 240,000 tonnes in 2014‐15, driven by strong demand from the US and the Middle East, and corres
Slide 22: Wool prices to rise in FY16
For personal use only Wool prices to rise in FY16 The EMI is forecast to decline 2% in 2014‐15, before rising 3% in 2015‐16, driven by an increase in the demand for woollen clothing and a lower Australian dollar. Shorn wool production is expected to slip 2% in 2015‐16 to 328,000t greasy, and the
Slide 23: Market context
For personal use only Market context Growing global demand for food and fibre, particularly from Asia, presents opportunities for Australian agriculture and Elders Global trends Australian competitive advantage Population growth World population 8 billion by 2025 Diversified geography and product
Slide 24: Proximity to growth markets
For personal use only Proximity to growth markets Operations in Indonesia, Vietnam, China, Mexico and Pakistan and access to world markets Proximity to Asia provides opportunity to capitalise on growing middle class demand for premium agricultural products 23
Slide 25: Industry context
For personal use only Industry context Pursuing $60M EBIT and 20% ROC by 2017 EBIT by Rural Service Company Market share by Rural Service Company Per cent (2014 ) 100% Elders Other 80% ~17% ~29% 60% 40% 20% ~33% 21% Landmark 0% Ruralco FY13 A FY14 A FY15 F FY16 F FY17 F Elders Landmark Ruralco Other
Slide 26: Looking forward
For personal use only Looking forward : Year 3 to 5 Solid domestic growth platform Industry consolidation options Capital structure optimisation Strong international growth 25
Slide 27: Summary
For personal use only Summary Focussed agribusiness Strong brand Well positioned Stable growth platform Solid progress 26
Slide 28: For personal use only
For personal use only 27
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