Elders Limited · ASX:ELD
Elders — CEDA Agribusiness Investment and Competitiveness Seminar (May 2016)
25 slides from Elders's conference presentation, May 10, 2016
Slide 1: Presentation to CEDA seminar
For personal use only 10 May 2016 Presentation to CEDA seminar Attached is a presentation delivered today by Elders’ CEO Mark Allison to the Committee for Economic Development of Australia (CEDA) agribusiness investment and competitiveness seminar. Peter Hastings Company Secretary 1
Slide 2: Agribusiness Investment and Competitiveness
For personal use only Elders Limited Mark Allison, MD & CEO Agribusiness Investment and Competitiveness CEDA - Brisbane 10 May 2016
Slide 3: Agenda
Agenda For personal use only Elders Story Our Global Opportunity Our Challenges Creating Real Value Summary
Slide 4: Elders Transformation
Elders Transformation For personal use only Then Now (2008) (2016) 2
Slide 5: Our Journey
Our Journey For personal use only FY08 to FY13 – Survival FY13 to FY15 – Turnaround FY16 to FY20 – Growth 3
Slide 6: Elders Today
Elders Today For personal use only Iconic Australian agribusiness Over 177 years old 1,800 employees 440 points of presence in Australia, Indonesia, Vietnam and China 4
Slide 7: Business Model
Business Model For personal use only Feed & Retail Financial Live Export Agency Services Processing Products Services Services Services ` Short haul livestock Long haul livestock Elders Indonesia Farm Supplies Killara Feedlot Elders China Real Estate Livestock Insurance Fertiliser Banking Grain Wool
Slide 8: Points of Presence
Points of Presence For personal use only Elders’ footprint in Australian agriculture • Over 440 points of presence in Australia and overseas including full service branches, real estate and insurance franchises • Key produce areas covered through our footprint • Focus on improving reach into horticu
Slide 9: Proximity to Growth Markets
Proximity to Growth Markets For personal use only Key operations in China, ASEAN, North-East Asia, and access to world markets Proximity to Asia provides opportunity to capitalise on growing middle class demand for premium agricultural products 7
Slide 10: Eight Point Plan
Eight Point Plan For personal use only Our strategic vision for becoming an efficient user of capital and a business that generates returns for its stakeholders 8 8
Slide 11: FY15 Year in Review
FY15 Year in Review For personal use only Positive environment, solid progress • Statutory net profit after tax of $38.3m up $35.3m • Underlying net profit after tax of $32.6m up $23.5m • Underlying EBIT of $45.8m up $18.2m • Operating cash outflow $5.3m for the year • Return on capital of 21.9% up
Slide 12: Our Global Opportunity
Our Global Opportunity For personal use only Global trends Australian competitive advantage Population growth World population 8 billion by 2025 Diversified geography and product base 85% of growth from Asia Ample land and water supply Increased food demand To rise 75% in first half of 21st cent
Slide 13: Australian Agriculture - Fast Facts
Australian Agriculture - Fast Facts For personal use only Industry snapshot Value of Australian farm production $53 billion Industry contribution to Australia’s GDP 2% Percentage of world agricultural production 1% Producing sufficient food to feed 60 million people Percentage of agricultural produc
Slide 14: Agriculture Growing in Importance
Agriculture Growing in Importance For personal use only Australia is transitioning from Sectors of relative comparative advantage for Australia Relative advantage score the mining boom to the dining boom. Agribusiness 16.2 Mining 13.3 Gas 11.9 Global demand for food Tourism 8.2 increasing rapidl
Slide 15: Our Challenges
Our Challenges For personal use only Australian farmer population by age group % Declining productivity 100% 80% Managing drought 60% 55+ 35-55 Ageing farmers 40% <35 20% Less farms 0% 1976 1981 1986 1991 1996 2001 2006 2011 Higher input costs and declining cash Number of Australian Farms
Slide 16: Costs Outpacing Farm Incomes
Costs Outpacing Farm Incomes For personal use only On-farm operation factor indexes Source: Deloitte Agribusiness Bulletin
Slide 17: Production Enablers
Production Enablers For personal use only Productivity Technology Innovation Capital Infrastructure Financial advice Premium markets
Slide 18: Sustainable Productivity
Sustainable Productivity For personal use only Requires increasing scale and innovation Productivity growth is a Total factor productivity of selected agricultural nations1 major driver of the long-run Index competitiveness and profitability of Australian farmers. Post 1997, Australian agribusin
Slide 19: Transformative Technologies
Transformative Technologies For personal use only Changing the face of Australian agriculture Elders has partnered with SwarmFarm Robotics to Robotic technologies have the develop robotic technology to use in cropping. potential to greatly enhance farm efficiency. Genetic technology will improve
Slide 20: Infrastructure is Critical
Infrastructure is Critical For personal use only For some agricultural commodities, the cost of transport from farm gate to an overseas market can exceed 40% of the value of the product. Darwin Farm Every cent saved in transports cost goes back Port towards farm profits. Transport Costs in Austr
Slide 21: Rural Australia needs Capital
Rural Australia needs Capital For personal use only Australia requires A$1 trillion in additional capital investment by 2050 Ownership of Australian Farmland New capital investment is required Percent across the entire supply chain. 5.2 12.4 Wholly Australian Owned Foreign ownership 10% -50% Aus
Slide 22: Elders is Creating Real Value for Australian Farmers
Elders is Creating Real Value for Australian Farmers For personal use only Providing expert production advice Increasing Developing the Agronomic Centre of Excellence productivity Providing technical training Directing R&D investment Improving adoption of R&D on farm Investing in plant g
Slide 23: Summary
Summary For personal use only Turnaround phase complete Eight Point Plan largely on track Embracing Growth phase Company and industry fundamentals solid Corporate and National success is not accidental 21
Slide 24: For personal use only
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Slide 25: Disclaimer and Important Information
Disclaimer and Important Information For personal use only 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 o
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