Elders Limited · ASX:ELD
Elders — Select Equities Doing Business in China conference (October 2017)
21 slides from Elders's conference presentation, Oct 27, 2017
Slide 1: Presentation to Select Equities
27 October 2017 Presentation to Select Equities Attached is a presentation delivered today by Elders’ Managing Director and CEO Mark Allison to Select Equities - Doing Business in China conference. Peter Hastings Company Secretary 1
Slide 2: Elders Limited: Select Equities Doing Business in China
Elders Limited Select Equities “Doing Business in China” Mark Allison – Managing Director and CEO 27 October 2017
Slide 3: Agenda
Agenda Elders Profile and Business Model Eight Point Plan FY17 Half Year Financial Performance Progress on FY17 Priorities Key growth activities to FY17 Elders China Profile Elders China Business Model Elders China Key Learnings Summary 2
Slide 4: Elders Profile
Elders Profile Iconic Australian agribusiness company 178 years old 2,000 employees 440 points of presence in Australia, Indonesia, Vietnam and China Servicing over 40,000 primary producers across Australia and international markets 3
Slide 5: Our Business Model
Our Business Model Agency Digital & Feed & Retail Real Estate Financial Services Technical Processing Products Services Services Services Services ` Auctions Plus (50%) Elders Indonesia Elders Weather Fee for Service Farm Supplies Killara Feedlot Management Elders China Agri Finance Residential Live
Slide 6: Eight Point Plan
Eight Point Plan Our strategic vision for becoming an efficient user of capital and a business that generates returns for its stakeholders 5
Slide 7: FY17 Half Year Financial Performance
FY17 Half Year Financial Performance Change $ million 1H FY17 1H FY16 $m % Sales revenue 698.2 83.2 14% 615.0 Underlying EBIT 41.3 13.2 47% 28.1 Underlying profit after tax 34.9 12.3 54% 22.6 Reported profit after tax 38.3 13.7 56% 24.6 Net debt 170.4 44.4 35% 126.0 Operating cash flow (5.3) 19.2 13
Slide 8: Performance by Product
Performance by Product Margin improvement across product range Underlying profit movement $ million Product margin (0.2) 4.7 (3.8) 0.6 (1.2) 5.8 6.5 34.9 22.6 1H FY16 Retail Agency Real Estate Financial Feed and Costs Interest, 1H FY17 Underlying Products Services Services Services Processing tax &
Slide 9: Performance by Geography
Performance by Geography Improvement across Australian business units, headwinds for international segment Underlying profit movement $ million (0.4) (0.6) 2.8 (1.2) 5.4 6.4 34.9 22.6 Northern Southern Western Corporate and Interest, 1H FY17 1H FY16 International Australia Australia Australia unallo
Slide 10: Elders Financial Progress
Elders Financial Progress Underlying EBIT* ($ Million) 56 Forecast 41 28 2H 1H 23 22 41 11 28 17 11 -7 -9 -16 FY13 FY14 FY15 FY16 FY17e *Note: Excluding live export 9
Slide 11: An efficient user of capital
An efficient user of capital, generating higher returns on investment Implemented a disciplined and Underlying Return on Capital* methodical approach to capital allocation and management Generating a return on capital in 22.0% 28.4% 30.2% excess of 20% 12.1% Underlying return on capital -5.9%
Slide 12: Progress on FY17 Priorities
Progress on FY17 Priorities Delivering our promises to stakeholders Safety Operational Key Efficiency Performance Performance Relationships and Growth Lost time injuries increase to 5 $41.3m underlying EBIT, up Strengthened relationships in Continue to drive branch efficiency from 2, target
Slide 13: Balanced Growth Plan to FY20
Balanced Growth Plan to FY20 Organic Acquisition Cost 50% 50% 0% Drive continuous business Continue to evaluate strategically Investment in resourcing to improvement aligned opportunities to expand identify, integrate and support our business both organic and acquisition Capture growth oppor
Slide 14: Increased geographical coverage
Increased geographical coverage with strategic growth across our retail, agency and real estate portfolios Identified strategic gaps across the portfolio Retail Agency Toowoomba real estate Real Estate Franchise real estate acquisition Financial Services Residential and rural sales and Feed and
Slide 15: Feed and Processing Services
Feed and Processing Services Our Feed and Processing Services portfolio aims to be an integrated red meat supply chain for the distribution of premium meat to customers throughout Australia and Asia. It leverages the power of the Elders brand and network to value add from the producers to consumers.
Slide 16: China Profile
China Profile Established presence in 5 locations Expansion into Vietnam underway Distributes premium quality meat from Australia with supply chain integrity Targets high-end food service channels (food chains, hotels and restaurants) Meat processing facility in Shanghai for portion-contro
Slide 17: Elders China Business Model
Elders China Business Model Margin generated by product Margin generated by form Veal Pork • Operates without a Chinese 3% 1% partner • Organically grown business Lamb Processed • Supplies to premium Western 6% 14% owned and operated hotels and Portion restaurants 23% Whole Beef 63% • Business domin
Slide 18: Elders China Key Learnings
Elders China Key Learnings Commit for the long term: Elders’ brand presence in China has been built over 12 years and now has a strong reputation for quality in industry Focus on core competency: Elders turnaround came after a decision to focus on core products and functions through discontinuin
Slide 19: Summary
Summary On track to complete Eight Point Plan FY17 commitments Zero term debt $60m EBIT (through the cycles) 20% ROC (through the cycles) Capital structure simplified (preference share resolution) Investor grade and dividend paying by FY17 Established stable platform for growth Targe
Slide 20: Slide 20
Slide 21: Disclaimer and important information
Disclaimer and important information Forward looking statements Non-IFRS information This presentation is prepared for informational purposes only. It contains This presentation refers to and discusses underlying profit to enable analysis forward looking statements that are subject to risk factors a
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