Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — FY2014 Earnings Presentation
23 slides from Australian Agricultural's earnings presentation, May 28, 2014
Slide 1: For personal use only
For personal use only
Slide 2: Disclaimer
Disclaimer Important information 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 pur
Slide 3: For personal use only
For personal use only – – –
Slide 4: FY14 Business Overview
FY14 Business Overview Reduction of $6.3 million in operating expenses compared to the prior corresponding period, driven by a reduction in administration and other non-station operating costs Strengthened balance sheet following a $299 million capital raising completed in October 2013, with gearing
Slide 5: For personal use only
For personal use only Notes: 1. Prior corresponding period (pcp) – 12 months to 31 March 2013 2. Statutory EBITDA represents Net Profit After Tax (NPAT) + tax expense + finance costs + depreciation, amortisation and impairment 3. Refer to slide 8 for a reconciliation of Cash EBITDA,
Slide 6: Financial results and key performance indicators
For personal use only 12 months to 12 months to Change ($mil) 31 Mar 2014 31 Mar 2013 ($mil) Boxed beef sales 188.2 154.8 33.4 Cattle sales 120.5 164.2 (43.7) Farming sales 8.1 18.5 (10.4) Total External Sales 316.8 337.5 (20.7) Branded Beef gross margin 17.0 4.0 13.0 Pastoral gross margin1 32.0 37.
Slide 7: Statutory EBITDA to operating cash flow bridge
For personal use only 250.0 200.0 150.0 114.2 $mil 229.2 100.0 3.0 25.7 50.0 35.3 31.1 13.8 26.5 18.5 0.0 (19.9) (50.0) Statutory EBITDA Deemed cost of Cattle fair value Farming fair value Cost of purchasing Cattle purchases at Cash EBITDA Movements in Borrowing costs Operating Cash sales changes ad
Slide 8: Cash EBITDA reconciliation
For personal use only 12 months to 12 months to Change ($ mil) 31 Mar 2014 31 Mar 2013 Statutory EBITDA1 (19.9) (31.2) 11.3 Add back: non-cash Market Value Changes to Livestock2 (11.9) 49.4 (61.3) EBITDA ex. Market Value Changes (31.8) 18.2 (50.0) Add back: other non-cash Fair Value Adjustments to L
Slide 9: FY14 Review - Branded Beef
FY14 Review - Branded Beef Global beef markets remained buoyant during the financial year, underpinned by increasing global demand Beef sales were $188.2 million, an increase of 22% compared to the pcp Total volume of kilograms sold increased by 10% and the mix of sales continued to shift to higher
Slide 10: Boxed Beef Sales Breakdown
For personal use only Boxed Beef Sales Breakdown by Volume Boxed Beef Sales Breakdown by Value 25.0 14.00 100% 12.00 90% 20.0 80% 10.00 70% 58% 63% 15.0 10.2 8.8 8.00 60% kg mil $/kg 50% 6.00 10.0 40% 4.00 30% 5.0 9.9 10.3 20% 42% 2.00 37% 10% - - 0% FY13 FY14 FY13 FY14 Shortfed/Other Wagyu Av. Shor
Slide 11: FY14 Review — Northern Beef Processing Facility
FY14 Review — Northern Beef Processing Facility Construction has progressed well despite an above average Wet Season and the development remains on schedule Commissioning is expected to take place in September 2014 Employment and training of plant workers is beginning to ramp up in line with the con
Slide 12: For personal use only
For personal use only – – – – • • • • • • •
Slide 13: Northern Wet Season comparison
For personal use only 2012-2013 Northern Wet Season 2013-2014 Northern Wet Season
Slide 14: Cattle price indicators
For personal use only A¢/kg cwt 200 250 300 350 400 450 Apr May Jun Jul Aug 2011 Sep Oct Nov Dec Jan Feb Mar Apr May EYCI (LHS) Jun 2012 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Indonesian Light Steer (RHS) 2013 Jul Aug Sep Oct Nov Dec Jan Feb 2014 Mar 100 120 140 160 180 200 220 240 A¢/k
Slide 15: Herd movement and composition
For personal use only Branded Herd Composition 600 553 467 500 198 FY14 Herd Movement 400 145 Trading head ('000) 39 900 300 39 Feedlot Breeding/Stud 800 200 316 283 700 100 149 600 124 264 - 43 31-Mar-13 31-Mar-14 head '000 500 85 14 Breeder Herd Composition 400 350 316 676 300 283 553 552 30
Slide 16: Cattle sales and transfers
For personal use only Cattle Sales / Transfers (kg lwt) Cattle Sales / Transfers ($) 100.0 180.0 90.1 161.2 90.0 160.0 80.0 75.2 25.7 140.0 45.8 120.6 70.0 120.0 108.8 Live Export Live Export 25.3 60.0 mil kg lwt Store 100.0 44.0 Store $ mil 50.0 25.6 44.1 78.6 Wagyu Wagyu 38.4 80.0 40.0 20.3 Sh
Slide 17: Balance sheet
For personal use only At 31 Mar At 31 Mar ($mil) 2014 2013 Cash and cash equivalents 69.2 11.2 Livestock 383.0 437.1 Property, Plant and equipment 605.7 603.2 Inventories 26.4 30.7 Other assets 15.7 17.9 Total assets 1,100.0 1,100.1 Interest bearing liabilities1 282.4 422.8 Other liabilities 69.
Slide 18: Property Portfolio Update
Property Portfolio Update Property Portfolio Rebalance In May 2013 the company sold part of the Goonoo aggregation in Queensland, totalling 19,404 hectares, and Brighton Downs, a 420,000 hectare station near Winton in Queensland In October 2013 the company purchased the adjacent La Belle Downs and W
Slide 19: Cash flow
For personal use only 12 months to 12 months to ($mil) Change 31 Mar 2014 31 Mar 2013 Net operating cash flow 18.5 (2.7) 21.2 Payments for property, plant and equipment (16.9) (20.5) 3.6 Purchase of La Belle and Welltree stations (28.6) - (28.6) Construction of Northern Beef Processing Facility (2
Slide 20: Strategy Update
Strategy Update Development of a vertically integrated strategy led by the new Managing Director: — Focus onresponding to demand signals from beef customers and maximising margins through branding — Continue to transition away from a production led business model — Participate in all key areas of th
Slide 21: Our Vision and Strategic Goals
Our Vision Be trusted globally as producers of the finest quality Australian beef i Our Strategic Goals Rapidly build an authentic AACo brand Align the business to enable strategy Secure processing capacity Develop cattle procurement capabilities and strategies Optimise production activities Exploit
Slide 22: 2013 Beef Demand
For personal use only 2013 Beef Demand
Slide 23: Summary
Summary AACo is transitioning from a pastoral and land business towards a less volatile, vertically integrated beef business Financial results for FY14 were adversely impacted by poor seasonal conditions at the start of the financial year leading to a sell-down of, in particular, the trading herd in
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