Slide 1: 2021 Full Year Results Presentation
Monday, 15 November 2021 2021 Full Year Results Presentation Attached is the Elders Limited (ASX:ELD) presentation of the financial results for the 12 month period ended 30 September 2021. Further Information: Mark Allison, Chief Executive Officer, 0439 030 905 Media Enquiries: Tom Russo, Executive
Slide 2: Presented by Mark Allison CEO and Tania Foster CFO
15 November 2021 Presented by Mark Allison CEO Tania Foster CFO
Slide 3: Disclaimer and Important Information
DISCLAIMER AND IMPORTANT INFORMATION The material in this presentation has been prepared by Elders Limited and is general background about Elders' activities and performance at the date of this presentation. The information is in summary form, does not purport to be complete and where derived from p
Slide 4: Agenda
Agenda Business Update Financial Results Business Performance Growing our Business Market Outlook Questions 3
Slide 5: FY21 Highlights
FY21 Highlights PEOPLE CUSTOMERS COMMUNITY SHAREHOLDERS 0.7 #1 $0.3m 96.7 cents LTIFR most trusted to RFDS through underlying earnings agribusiness brand renewed sponsorship per share 78% 53 $2.1m 42.0 cents employee net promoter sponsorships and dividends engagement score donations per share 41% +2
Slide 6: FY21 Financial Summary
FY21 Financial Summary SALES GROSS MARGIN EBIT $2.5b $529.4m $166.5m +22% +21% +38% from $2.1b from $437.5m from $120.6m COSTS COST TO EARN RATIO RETURN ON CAPITAL Costs / gross margin EBIT/ avg net operating assets $362.9m 69% 22.5% +15% from $316.9m from 72% from 18.9% CASH CONVERSION LEVERAGE RAT
Slide 7: Safety, Health & Well-Being
Safety, Health & Well-Being Lost time injury (LTI) 3 lost time injuries in FY21 -16% 9 6 16% 5 reduction in lost time Average injuries over the last five 3 years with LTIFR at 0.7 2 for the year FY17 FY18 FY19 FY20 FY21 3 critical risk teams LEXIE HICKS Lost time injury frequency rate (LTIFR) establ
Slide 8: Sustainability
Sustainability We provide our customers We support our people We do our part to look We operate ethically and and clients with the goods and the industries and after the environment and to the highest standard and services they need communities in which we animals in our care operate ▪ Most trusted
Slide 9: Financial Results
Financial Results
Slide 10: FY21 Financial Performance: Summary
Ready FY21 Financial Performance: Summary Strong performance across our key metrics Key metrics ($m) FY21 FY20 Var % Sales revenue 2,548.9 2,092.6 456.3 22% Gross margin 529.4 437.5 91.9 21% Costs 362.9 316.9 46.0 15% Earnings before interest and tax 166.5 120.6 45.9 38% Underlying net profi
Slide 11: FY21 Financial Performance: Summary
FY21 Financial Performance: Summary Consistent growth over the last five years Sales Revenue ($m) EBIT ($m) 2,549 167 +12.7% +23.8% 2,093 121 1,599 1,626 71 75 74 1,583 FY17 FY18 FY19 FY20 FY21 FY20 to FY21 gross margin uplift contribution FY17 FY18 FY19 FY20 FY21 22% 48% 30% Acquisitions Organic Ma
Slide 12: FY21 Financial Performance: Product
FY21 Financial Performance: Product Favourable performance across all products, with the exception of Feed and Processing businesses Change in product margin ($m) RETAIL FINANCIAL ▪ growth and improved market PRODUCTS ▪ increased sales activity +22% SERVICES conditions in our Insurance FY20 U’NPAT 1
Slide 13: FY21 Financial Performance: Gross Margin
Ready FY21 Financial Performance: Gross Margin A diversified business model across product categories +10.1% Total Gross Margin +35.7% 529 438 140.0 130.4 127.2 FY20 FY21 96.1 FY20 FY21 +39.1% +32.7% +24.9% 61.2 +11.3% +20.1% 50.7 38.1 +3.6% 44.0 38.2 41.3 37.1 30.5 32.3 -18.7% 26.9 22.0 22.8 15.5 1
Slide 14: FY21 Financial Performance: Geography
FY21 Financial Performance: Geography Strong growth across all geographies, with dispersion of our EBIT reducing risk Western Australia Queensland & 10.0% 26.0% Northern Territory +35.7% +53.6% 55 22 40 14 FY20 FY21 FY20 FY21 South Australia New South Wales 15.0% 16.0% +23.7% +35.3% 32 34 26 25 FY20
Slide 15: FY21 Financial Performance: Costs
FY21 Financial Performance: Costs Investment in people and strategic initiatives driving increased costs PEOPLE SYS MOD & IT ▪ costs associated with first wave of FY20 Costs 316.9 2020 2021 ▪ investment in network growth +116 COSTS Systems Modernisation FTE implementation ▪ additional Corporate Serv
Slide 16: FY21 Financial Performance: Capital
FY21 Financial Performance: Capital Return on capital increasing Return on Capital (%) Average Working Capital ($m) +3.6 +85.0 22.5% 487.7 402.7 288.6 3 Year Avg 19.9% 18.9% 18.2% FY19 FY20 FY21 FY19 FY20 FY21 Trade & Other Receivables ($m) Inventories1 ($m) Trade & Other Payables ($m) 735 378 668 6
Slide 17: FY21 Financial Performance: Cash Flow
FY21 Financial Performance: Cash Flow Growth in debtors in line with sales activity; debtor days consistent Operating cash flow ($m) Cash conversion (%) 244.4 -38% (1.0) 38.0 132% 94% 40.9 166.5 (133.0) (35.1) 142.2 FY20 FY21 143.2 (77.3) Working Capital to Sales (%) -0.1% EBIT Depreciation Other no
Slide 18: FY21 Financial Performance: Net Debt
FY21 Financial Performance: Net Debt Debt reducing, improving leverage, interest cover and gearing ratios Net debt, balance date ($m) Leverage ratio Interest cover Gearing ratio Average net debt / EBITDA EBITDA / net interest Average net debt / closing equity -20.6 +6.1 237.5 216.9 -0.6 -8.6 Includi
Slide 19: Dividend & Capital Management
Dividend & Capital Management Earnings and dividends per share continue to grow Underlying earnings per share (cents) Dividends per share (cents) 97 42 +17.2% Final 70 Interim +53.8% 22 55 53 51 22 18 18 13 9 9 8 20 8 9 9 9 0 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Franking credit balance
Slide 20: Tax Losses Expected to be Used by FY24
Tax Losses Expected to be Used by FY24 Elders will report income tax expense from FY22 onwards Tax losses Deferred tax asset (tax losses) $m ▪ Elders estimates it will utilise all tax losses 159 Utilised Carried forward recognised as a Deferred Tax Asset by FY24 49 Change in reporting disclosure ▪ I
Slide 21: Business Performance
Business » Performance
Slide 22: Rural Products
Rural Products Gross margin improving year on year via our backward integration strategy Sales Revenue ($m) Gross margin ($m) vs (%) +390 +65 +24% +30% 2,027 285 1,637 220 13.4% 14.1% FY20 FY21 FY20 FY21 Elders own brand vs third party1 ($m) FY21 gross margin by category (%) Other Retail 8% Wholesal
Slide 23: Agency Services
Agency Services Cattle and sheep volumes down as a consequence of re-stocking Cattle Volumes (million) Sheep Volumes (million) +1.3% +1.0% 1.8 9.9 9.6 1.7 9.5 9.4 1.5 1.6 9.0 1.5 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Wool Bales (‘000) AuctionsPlus Volumes (million) +1.5% 371 371 349 +12.
Slide 24: Real Estate Services
Real Estate Services Strong demand for farmland and residential property Farmland sales ($b) Residential sales ($b) 1.60 1.46 +12.1% +21.4% 1.26 1.12 1.01 1.05 0.87 0.67 0.71 0.73 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Properties under management (‘000) Gross margin by category ($m)1 Farm
Slide 25: Financial Services
Financial Services Market conditions support growth in Insurance products Rural Bank Loan and Deposit Book ($b) StockCo book ($m) +3.2% +5.8% 98.0 82.1 78.1 71.7 Loan 3.0 3.0 3.0 3.0 60.7 2.8 book Deposit (1.6) (1.6) (1.7) (1.7) (1.6) book FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Livestock
Slide 26: Feed and Processing Services
Feed and Processing Services Sustained higher cattle prices impacting number of cattle sold Killara Feedlot (cattle sold 000s) Elders Fine Foods sales ($m) +3.9% 63.2 65.1 +8.1% 17.8 60.2 56.0 51.6 13.7 14.4 13.0 10.9 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 ▪ Sustained high cattle prices a
Slide 27: Growing our Business
| Growing our Business
Slide 28: Our Values, Ambition and Strategic Priorities
Compelling shareholder returns Industry leading sustainability outcomes Most trusted Agribusiness brand OUR 2023 5-10% EBIT and EPS growth through the cycles across health and safety, community, environment in rural and regional Australia AMBITION at 15% ROC and governance OUR BUSINESS UNITS R U R A
Slide 29: Delivering on our Eight Point Plan (8PP)
Delivering on our Eight Point Plan (8PP) 1 5 ▪ interim targets to 2025 and 2030, net zero emissions by 2050 DEVELOP A WIN MARKET SHARE ▪ nine acquisitions SUSTAINABILITY ▪ most trusted agri-business brand PROGRAM ▪ ▪ focus continues on recruitment of high quality personnel and over 40,000 agricultur
Slide 30: Our Ambition
Our Ambition #1 most trusted agri brand and clients who promote us Elders is the most trusted agribusiness brand in regional Australia Over half our client base are active promoters of our business Agribusiness unprompted net trust scores, July 2021 vs. July 2020 1,2 Net promoter score +7 15 53 +5 4
Slide 31: Brand
For Australian Agriculture Digital Interactions Launched new campaign anchored by four key pillars Increase across our websites & social media platforms Brand Our renewed investment in the brand supports our improved trust scores and growth, while ~700k our clients are becoming Users of more engaged
Slide 32: Strengthening our Service Offerings
Strengthening our Service Offerings More branches, more people, more agronomists supporting our clients More points of presence More FTEs More agronomists 3.4% CAGR 560 10.0% CAGR 2,294 10.9% CAGR 183 524 537 2,038 1,897 148 153 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 Growth: 2.5% 4.3% Growth:
Slide 33: Strengthening our Service Offerings
Strengthening our Service Offerings Ongoing investment in innovative solutions to improve customer productivity and efficiency Innovation Digital Research Strategic Partnerships ▪ Elders’ new Carbon Farming Program ▪ Launch of the Struan and Kybybolite ▪ Genomics ▪ Charles Sturt University sponsored
Slide 34: Systems Modernisation Program
Systems Modernisation Program Embarking on a Systems Modernisation program aimed at delivering a more customer centric, cost efficient and enabled team Wave Internal financial and people foundation 1 $18.9m Wave 2 Supply chain and in-branch retail Wave 1 Investment (Capex + Opex) Wave 3 Livestock an
Slide 35: A Highly Engaged & Diverse Workforce
Female non-executive A Highly Engaged & Directors Diverse Workforce 60% Engagement1 (%) +2 Women in 76 76 78 management positions 18% KAREL WALKER Rural Products Sales Manager Karel has never forgotten how tough it was when she FY19 FY20 FY21 took on her first merchandise sales job at Elders in Fema
Slide 36: Market Outlook
Market Outlook
Slide 37: ABARES September Outlook Update
ABARES September Outlook Update Improved summer cropping expected in 2021-22 to support Rural Products margin growth; livestock prices remain high as rebuild continues Beef & Veal Sheep Wool Cropping Average saleyard prices (c/kg) Average saleyard prices (c/kg) Eastern Market Indicator (c/kg) Area p
Slide 38: Market Outlook
Market Outlook FY22 has started positively with livestock prices remaining elevated and favourable summer crop outlook ▪ positive summer crop outlook, with area planted forecast to rise 24% to 1.3 million hectares1 ▪ second year of earnings and continued uptake of our livestock funding ▪ current 202
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Slide 40: FY21 Business Model
FY21 Business Model Diversification by product, service, market segment and geography RURAL PRODUCTS FEED & DIGITAL AND REAL ESTATE FINANCIAL AGENCY SERVICES PROCESSING TECHNICAL WHOLESALE SERVICES SERVICES RETAIL PRODUCTS SERVICES SERVICES PRODUCTS Fee for Service Rural Products Rural Products Live
Slide 41: Profit Sensitivity
Profit Sensitivity Movements in market factors are mostly mitigated by our diversified portfolio $10m $5m +500k head +$50 +500k head +$25m +50bps +100bps +100bps +$50 +100bps +10% $0m -10% -$50 -500k head -500k head -100bps -$50 -$25m -50bps -100bps -100bps -$5m -$10m Cattle Price Cattle Volumes She
Slide 42: Strategic Opportunities
Strategic Opportunities Significant growth opportunities to gain market share in new geographies, with our multiple product and service portfolio Focus on increasing market share and Retail presence in high value areas, including Products Western Victoria, South Coast WA, Northern Queensland and Cen
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