Ridley Corporation Limited · ASX:RIC
Ridley — H1 F2008 Earnings Presentation
38 slides from Ridley's earnings presentation, Feb 12, 2008
Slide 1: Ridley Corporation F2008 Half Year Results Presentation
RIDLEY CORPORATION LTD F2008 HALF YEAR RESULTS PRESENTATION
Slide 2: Agenda
F'08 Half Year Results Presentation Agenda Results and Highlights Financial Performance Business Conditions & Outlook Project 'Vitalise'
Slide 3: Main Features
F'08 Half Year Results Presentation Main Features Ridley AgriProducts ↑ 7% * • High / volatile raw material prices • Lower ruminant volumes Cheetham Salt ↑ 1% • Progressing development plans Ridley Inc ↓ 15% * • Canadian market conditions and restructure Settlement of Canadian legal claims *
Slide 4: Results
F'08 Half Year Results Presentation Results A$m F'08 % to LY Sales Revenue 759.5 ↑ 6% Operating EBITDA * 43.0 ↓ 1% Operating EBIT * 32.2 - Net Operating Profit * 14.9 ↓ 1% Net Profit 8.3 ↓ 30% Dividends (cps) 3.5 unchanged * Before significant items
Slide 5: Net Profit
F'08 Half Year Results Presentation Net Profit A$m 13 0.2 0.6 12 0.3 2.4 1.7 11 10 3.4 9 11.9 8 8.3 7 6 F'07 Ridley Cheetham Ridley Unallocated / Interest Significant F'08 AgriProducts Salt Inc Discontinued Tax & MI Items * * Net of tax and minority interest
Slide 6: Significant Items
F'08 Half Year Significant Items * Results Presentation Canadian legal claims $4.7m settlement Impairment of assets and $1.0m restructure costs - Canada CEO severance costs $0.9m $6.6m * Net of tax and minority interest
Slide 7: Sales by Division
F'08 Half Year Results Presentation Sales by Division A$m 800 40 46 0 750 49 700 759 716 650 600 F'07 Ridley Cheetham Ridley Currency F'08 AgriProducts Salt Inc
Slide 8: Ridley AgriProducts
F'08 Half Year Results Presentation Ridley AgriProducts
Slide 9: Ridley AgriProducts
F'08 Half Year Results Presentation Ridley AgriProducts A$m F'08 % to LY Sales 360 ↑ 16% Tonnes (000's) 830 ↓ 11% EBIT 10 ↑ 7% Features + ─ Margins Ruminant volumes Aquafeed Supplements
Slide 10: Ridley AgriProducts
F'08 Half Year Results Presentation Ridley AgriProducts 350,000 Tonnes F'08 F'07 300,000 250,000 200,000 150,000 100,000 50,000 - Poultry Pig Dairy Beef Other Aquafeed Supp's Sheep
Slide 11: Ridley AgriProducts
F'08 Half Year Results Presentation Ridley AgriProducts EBIT - A$m 12 1.1 0.4 0.6 10 8 8.6 5.9 6 9.3 9.9 4 2 F'07 * Volume Margins Mfg R&D Admin F'08 Costs & Other * Before significant items
Slide 12: Cheetham Salt
F'08 Half Year Results Presentation Cheetham Salt
Slide 13: Cheetham Salt
F'08 Half Year Results Presentation Cheetham Salt A$m F'08 % to LY Sales 48 ↔ - Tonnes (000's) 611 ↓ 2% EBIT 13 ↑ 1% Features + ─ Pool salt Queensland Indonesia stockfeed Soda ash
Slide 14: Cheetham Salt
F'08 Half Year Results Presentation Cheetham Salt EBIT - A$m 14 0.1 14 0.7 1.0 13 0.5 0.2 0.4 13 12 12.9 13.0 12 11 F'07 Volume Margins Mfg Freight Admin Equity F'08 Costs & Other Profits
Slide 15: Ridley Inc
F'08 Half Year Results Presentation Ridley Inc
Slide 16: Ridley Inc
F'08 Half Year Results Presentation Ridley Inc US$m F'08 % to LY Sales 307 ↑ 14% Tons (000's) 781 ↓ 4% EBIT * 12 ↓ 1% Features + ─ US Feeds Canada RNS drought impact * Before significant items
Slide 17: Ridley Inc
F'08 Half Year Results Presentation Ridley Inc EBIT - US$m 20 15 1.6 3.1 1.3 0.3 10 12.6 12.5 5 F'07 US Feeds Canada RNS Corporate F'08 * Before significant items Feeds
Slide 18: Financial Performance
F'08 Half Year Results Presentation F'08 Financial Performance
Slide 19: Cashflow
F'08 Half Year Results Presentation Cashflow A$m F'08 F'07 EBITDA * 43 44 Significant items - cash (3) (0) Capex (16) (16) Borrowing costs (8) (9) Tax (5) (7) Dividends (5) (5) Working capital (11) (19) Net cash outflow (5) (13) * Includes equity profits
Slide 20: Working Capital
F'08 Half Year Results Presentation Working Capital A$m Dec '07 Dec '06 Dec '05 Trade Receivables 140 136 110 Inventory 159 155 127 Creditors & Provisions (204) (198) (171) Other & Prepayments 23 24 14 Total 118 117 80 Days Sales outstanding 35 34 31
Slide 21: Input Prices
F'08 Half Year Results Presentation Input Prices Dec '05 Dec '06 Dec '07 '07 vs '06 Australia * Wheat 182 323 439 36% Barley 170 333 356 7% Canola 336 537 625 16% Fish meal 1,201 2,130 1,300 -39% United States US Corn + 2.70 4.30 5.25 22% Soybean + 5.78 6.18 10.40 68% Soymeal ^ 190 180 315 75% * A$
Slide 22: EBITDA
F'08 Half Year Results Presentation EBITDA A$m F'08 F'07 Ridley AgriProducts 14 13 Cheetham Salt * 15 15 Ridley Inc 19 23 Unallocated (5) (7) Total 43 44 * Includes equity profits
Slide 23: Other Costs
F'08 Half Year Results Presentation Other Costs A$m F'08 F'07 Corporate Costs - Australia 4.2 4.5 Canadian Legal Costs 0.8 1.2
Slide 24: Debt Movement
F'08 Half Year Results Presentation Debt Movement A$m Net Debt - Jun '07 172 Cash outflow 5 Currency translation - Net Debt - Dec '07 177
Slide 25: Gearing
F'08 Half Year Results Presentation Gearing A$m Dec '07 Jun '07 Dec '06 Net Debt 177 172 182 Equity 388 388 390 Ratio 45.7% 44.3% 46.7%
Slide 26: Key Ratios
F'08 Half Year Results Presentation Key Ratios Dec '07 Dec '06 Dec '05 Net Debt / EBITDA * 4.1 4.2 3.8 EBITDA / Net Interest * 5.6 6.2 6.9 EBIT / Net Interest * 4.2 4.6 5.3 ROSF ˆ 5.0% 7.1% 9.1% EPS (fully diluted) 2.8 4.2 5.3 Dividend Payout Ratio 123% 83% 61% * Before significant items ˆ Annualise
Slide 27: Currency Impact
F'08 Half Year Results Presentation Currency Impact Dec '07 Dec '06 Avg Exchange Rate A$ - US$ 0.8747 0.7543 A$ - C$ 0.8874 0.8493 Operating EBIT $2.3m down Operating Net Profit $0.9m down
Slide 28: Canadian Legal Claims Update
F'08 Half Year Results Presentation Canadian Legal Claims Update
Slide 29: Canadian Legal Claims
F'08 Half Year Results Presentation Canadian Legal Claims The actions against 69% subsidiary Ridley Inc have settled, subject to the approval of the Courts: • Ridley Inc pays the plaintiffs C$6m and liability is capped at that amount • Ridley Inc remains as a defendant in the actions • Ridley Inc
Slide 30: Business Conditions
F'08 Half Year Results Presentation Business Conditions
Slide 31: Ridley AgriProducts
F'08 Half Year Results Presentation Ridley AgriProducts High feed costs Poultry volumes and margins relatively stable Pig sector - producer losses - industry consolidation Dairy growth will be constrained by limited water availability and a smaller national herd Reduced beef / sheep volume
Slide 32: Cheetham Salt
F'08 Half Year Results Presentation Cheetham Salt Generally stable outlook Sales and marketing initiatives improving results Field and refinery upgrades well underway
Slide 33: Ridley Inc
F'08 Half Year Results Presentation Ridley Inc Producer economics deteriorating Canada particularly soft, but restructure gains being realised Block Operations benefiting from winter conditions
Slide 34: Guidance Summary
F'08 Half Year Results Presentation Guidance Summary F'08 F'07 Operating Net Profit $24.0-27.0m $25.6m Net Profit $18.0-21.0m $22.7m
Slide 35: Project 'Vitalise' - Board changes
F'08 Half Year Results Presentation Project 'Vitalise' Board changes • John Spark appointed Jan '08 • Patria Mann from Mar '08 • Robert Lotze to retire Jun '08 Appointment of new CEO 4th Qtr F'08
Slide 36: Project 'Vitalise'
F'08 Half Year Results Presentation Project 'Vitalise' Resolution of North American structural issues Strategic review of Australian business • Identify growth opportunities • Improve/rationalise poorer performing assets • Aquafeed capacity
Slide 37: Project 'Vitalise'
F'08 Half Year Results Presentation Project 'Vitalise' Reduction in Corporate overheads • Target savings $3.0m Develop and instil renewed sense of urgency Timeframe • Commenced Dec '07 • Completion Jun '08
Slide 38: Ridley Corporation Ltd
F'08 Half Year Results Presentation RIDLEY CORPORATION LTD