Slide 1: 2021 Half-Year Results Investor Presentation
Monday 17 May 2021 2021 Half-Year Results Investor Presentation Attached is the Elders Limited (ASX:ELD) investor presentation in connection with the financial results for the 6 month period ended 31 March 2021. Elders CEO, Mark Allison, and Group Financial Controller, Vanessa Trengove, will deliver
Slide 2: Elders Limited 1H21 Results Presentation
Elders Limited 1H21 Results Presentation 17 May 2021
Slide 3: Disclaimer and Important Information
Disclaimer and Important Information Forward looking statements This presentation is prepared for informational purposes only. It contains forward looking statements that are subject to risk factors associated with the agriculture industry many of which are beyond the control of Elders. Elders’ futu
Slide 4: Agenda
Agenda Key Highlights Financial Performance Third Eight Point Plan Progress Sustainability Market Outlook Appendix Questions 3
Slide 5: 1H21 Key Highlights
1H21 Key Highlights Robust year to date across the business Safety Financial Performance Strategy ▪ 2 lost time injuries (LTI), compared to 1 last year, with ▪ On track to deliver first year of the third Eight Point ▪ $73.8 million Underlying EBIT (+40%) target of zero Plan (EPP) ▪ $23.9 million Ope
Slide 6: 1H21 Operating Highlights
1H21 Operating Highlights Implementation of third Eight Point Plan Operating Safely Sustainability Efficiency & Growth Core Relationships ▪ 2 lost time injuries (LTI), compared to ▪ Modern Slavery Statement and ▪ Preserved and captured further gross ▪ Worked closely with industry and 1 last year, wi
Slide 7: Financial Performance: Summary
1H21 Financial Performance: Summary Strong performance across our key metrics Sales Revenue $m Underlying EBIT $m CAGR +9% 2,093 119 1H21 1H20 Year-on-Year Change Financial Metric CAGR +19% Result ($m) Result ($m) $m % 1,667 1,603 1,613 1,193 66 Sales revenue 1,100.5 900.2 200.3 22% 71 75 74 74 90
Slide 8: Financial Performance: Product
1H21 Financial Performance: Product Favourable performance across most products, partially offset by increased costs in line with strategic initiatives Increased through higher sales in line with improved Change in product margin ($m) seasonal conditions and market growth, as well as Product margin
Slide 9: Financial Performance: Geography
1H21 Financial Performance: Geography Improvement across all areas with increased investment in strategic initiatives Change in underlying profit by geography ($m) Benefitted from a strong first half, with AIRR Wholesale contributing an additional $6.7 million of EBIT due to Underlying EBIT Products
Slide 10: Financial Performance: Capital
1H21 Financial Performance: Capital Return on Capital (ROC) 3-year average at 18.5% is outperforming third Eight Point Plan target ROC increased to 20.1% (up 1.2% on FY20) Average Working Capital $483.0m (up $98.3m) 300 266 1H20 Underlying Return on Capital1 Average Working Capital $m2, 3 231 1H21 1
Slide 11: Financial Performance: Operating Cash Flow
1H21 Financial Performance: Operating Cash Flow Cash conversion at 35.7% on underlying profit after tax $million 1H21 1H20 Change Operating cashflow of $23.9 million Operating cash flow 23.9 27.4 (3.5) ▪ EBITDA of $94.3 million (including impact of AASB 16 leases), offset by: Investing cash flow (25
Slide 12: Financial Performance: Net Debt
1H21 Financial Performance: Net Debt Decreased leases debt and less investing cash flow driving lower net debt at balance date Net Debt Financial Covenants1 Undrawn facilities at balance date were $236 million with significant headroom in our banking covenants: Net debt, at balance date Net debt, YT
Slide 13: Financial Performance: Dividend Policy & Tax
1H21 Financial Performance: Dividend Policy & Tax Elders will pay an interim dividend of $0.20 per share, 20% franked, for the first half of 2021 Interim Dividend Tax Losses ▪ Elders’ Dividend Policy (Policy) was reinstated in FY17, providing for a payout ratio of up to 35% ▪ Elders has carried forw
Slide 14: Eight Point Plan
EIGHT POINT PLN Compelling shareholder returns Industry leading sustainability outcomes Most trusted Agribusiness brand OUR 2023 5-10% EBIT and EPS growth through the across health and safety, community, in rural and regional Australia AMBITION cycles at 15% ROC environment and governance OUR BUSINE
Slide 15: Third Eight Point Plan Progress
Third Eight Point Plan Progress On track to deliver first year of the third Eight Point Plan (EPP) ▪ Sustainability embedded in Executive management meeting agendas ▪ Continued to grow our footprint through acquisition of Rural Products, ▪ Modern Slavery Statement and Ethical Contracting Framework l
Slide 16: Sustainability
Sustainability We are committed to developing a sustainability program that is authentic and industry leading 15
Slide 17: Market Outlook
1H21 Market Outlook Following ongoing favourable rainfall events, a positive outlook for winter crop is forecast. COVID-19 remains a disruptor to global and domestic markets, however the business and broader industry continues to be adaptable Rural Products ▪ Continued rainfall has lifted farmer con
Slide 18: Appendix
Appendix 17
Slide 19: FY20 Business Model
FY20 Business Model* Diversification by product, service, market segment and geography RURAL PRODUCTS FEED & PROCESSING DIGITAL AND AGENCY SERVICES REAL ESTATE SERVICES FINANCIAL SERVICES SERVICES TECHNICAL SERVICES RETAIL PRODUCTS WHOLESALE PRODUCTS Fee for Service Farm Supplies Farm Supplies Lives
Slide 20: Results by Business Segmentation
1H21 Results by Business Segmentation Retail and Wholesale Products plus Agency Services have the largest influence on Elders margin RURAL PRODUCTS REAL ESTATE FEED & PROCESSING OTHER AGENCY SERVICES FINANCIAL SERVICES WHOLESALE SERVICES SERVICES RETAIL PRODUCTS PRODUCTS 1H21 Margin ($m) NSW Killara
Slide 21: Profit Sensitivity
Profit Sensitivity UNDERLYING SHEEP CATTLE RETAIL AGCHEM FERT KILLARA SG&A* EBITDA $ VOL $ VOL SALES GM% GM% GM% UTILISATION $7.5m $5.0m +50bps $2.5m +100 bps +100 bps +$10 +500k +$50 +100k +$25m +100bps head head sales +10% $0 -500k -100k -$25m -10% -100bps -$10 head -$50 head sales ($2.5m) -100bps
Slide 22: Points of Presence
Points of Presence We have approx. 500 points of presence in Australia, catering to the needs of a variety of agricultural regions. We also supply a further 350+ sites with product through our wholesale members 21
Slide 23: Strategic Opportunities
Strategic Opportunities Significant growth opportunities to gain share by capturing new customers and expanding offering to existing customers, in new geographies, with our multiple product and service portfolio Focus on increasing market share and presence in Retail Products high value areas, inclu
Slide 24: Industry and Market Outlook (Long Term)
Industry and Market Outlook (Long Term) Long Term Relevance Market Summary of Outlook Market Outlook to Elders AGRICULTURAL ▪ The gross value of Australia’s agricultural production is estimated to hit a record $66 billion in 2020-21 primarily due to winter crop Neutral PRODUCTION & ▪ 2021-22 is fore
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