Slide 1: 2017 Full Year Financial Results Presentation
For personal use only 13 November 2017 2017 Full Year Financial Results Presentation Attached is the presentation of the financial results for the 12 month period ended 30 September 2017. Peter Hastings Company Secretary 1
Slide 2: Elders Limited 2017 Annual Results Presentation
For personal use only Elders Limited 2017 Annual Results Presentation 13 November 2017
Slide 3: Disclaimer and important information
Disclaimer and important information For personal use only Forward looking statements Non-IFRS information This presentation is prepared for informational purposes only. It contains This presentation refers to and discusses underlying profit to enable analysis forward looking statements that are sub
Slide 4: FY17 Year in Review
FY17 Year in Review Eight Point Plan objectives achieved For personal use only Lost time injuries increase to 6 from 4, LTIFR increase to 1.5 from 1.0 Underlying net profit after tax of $57.7m, up $16.5m Underlying EBITDA of $74.6m, up $14.7m Underlying EBIT of $70.4m, up $14.3m Operating
Slide 5: FY17 Priorities
FY17 Priorities Delivering our promises to stakeholders For personal use only Safety Operational Key Efficiency Performance Performance Relationships and Growth Lost time injuries increased to 6 $74.6m underlying EBITDA, up Strengthened relationships in Continued to drive branch efficiency f
Slide 6: Full Year Financial Performance
Full Year Financial Performance For personal use only Change $ million FY17 FY16 $m % Sales revenue 1,603.1 83.8 6% 1,519.3 Underlying EBITDA 74.6 14.7 25% 59.8 Underlying EBIT 70.4 14.3 25% 56.1 Underlying profit after tax 57.7 16.5 40% 41.2 Statutory profit after tax 116.0 64.4 125% 51.6 Net debt
Slide 7: Performance by Product
Performance by Product Balanced growth across the portfolio For personal use only Underlying profit movement $ million Product margin 1.0 (0.2) 8.9 (16.9) 2.7 11.0 2.2 7.8 57.7 41.2 FY16 Retail Agency Real Estate Financial Feed and Digital and Costs Interest, FY17 Underlying Products Services Servic
Slide 8: Performance by Geography
Performance by Geography Improvement across Australian geography, headwinds for international For personal use only Underlying profit movement $ million (0.6) (1.2) 11.8 (8.4) 2.2 12.7 57.7 41.2 FY16 Northern Southern Western International Corporate and Interest, tax & FY17 Underlying Australia Aust
Slide 9: Capital Employed
Capital Employed Exceeded 20% return on capital target For personal use only As expected, slight decline in return on capital: Underlying Return on Capital 1 o Continued strong agency earnings, particularly livestock, which requires minimal working capital 28.1% 26.8% o Investment in aligned finan
Slide 10: Operating Cash Flow
Operating Cash Flow Strong profitability driving strong cash generation For personal use only Strong EBITDA cash conversion Working capital movements Cash flow $ million Working capital movements reflect: (0.8) 20.7 (14.7) o Variability of livestock activity leading up to (1.9) (2.5) (13.4) 13.6
Slide 11: Net Debt
Net Debt Improvement across all key ratios For personal use only Increase in net debt at balance date reflects strong Net debt cash generation, offset by acquisition related cash $ million outflows Average net debt steady over period Leverage, interest cover and gearing ratio improvement with
Slide 12: Achievements FY14 to FY17
Achievements FY14 to FY17 Excellent platform and processes established for further profitable growth For personal use only Organic Acquisition Cost Market share gained across retail, Established internal business Prioritised growth pipeline with livestock and wool markets development function
Slide 13: FY18 Outlook
FY18 Outlook Easing cattle prices expected, offset by footprint expansion and market share gains For personal use only Retail Dry winter conditions are likely to affect crop and pasture growth with crop production to normalise to historical averages. The full year benefit of acquisitions complet
Slide 14: Strategic Priorities to 2020
Strategic Priorities to 2020 For personal use only 13
Slide 15: FY20 Goal
FY20 Goal Targeting 5 – 10% p.a. quality growth through the cycles For personal use only EBIT FY17 to FY20 Livestock price Other market Organic (50%) Acquisition (50%) Cost (0%) FY20 FY17 normalisation movements Livestock prices expected to ease post FY17 Market share gains achieved in FY17 to o
Slide 16: Balanced growth plan to FY20
Balanced growth plan to FY20 For personal use only Organic Acquisition Maintain Cost 50% 50% Drive continuous business Continue to evaluate strategically Invest in resourcing to identify, improvement aligned opportunities to expand integrate and support both our business organic and acquisitio
Slide 17: Strategic Gaps
Strategic Gaps Geared for the next wave of growth, including 20 new branches by 2020 For personal use only Key gaps in product and service areas to be filled through organic growth and acquisition, with 20 new branches by 2020 Retail • Increased market share in high value cropping areas • Increased
Slide 18: Appendix
For personal use only APPENDIX
Slide 19: Business Model
Business Model For personal use only Digital & Feed & Retail Financial Agency Services Real Estate Services Technical Processing Products Services Services Services ` Property Management Auctions Plus (50%) Elders Indonesia Elders Weather Fee for Service Killara Feedlot Farm Supplies Agri Finance El
Slide 20: Business Segmentation
Business Segmentation For personal use only Average Northern Southern Western Int’l Digital & $ million FY17 Margin Working Australia Australia Australia Geographies Technical Capital Retail Products Farm Supplies and Fertiliser 134.0 159.1 Agency Services Livestock, Wool, and Grain 122.4 33.1 Farml
Slide 21: Business Performance by Product
Business Performance by Product For personal use only Margin by product FY16 FY17 $ million Retail: Benefited from improved summer cropping conditions and geographical expansion +6% +10% Agency: Continued strong livestock prices and benefit 126.2 134.0 122.4 111.4 from footprint growth +9% +34%
Slide 22: Business Performance by Geography
Business Performance by Geography For personal use only Margin by geography $ million FY16 FY17 +12% Northern Australia: Benefitted from high cattle prices, +14% improved summer retail performance, and upside 146.3 131.1 131.1 from geographical expansion 115.4 Southern Australia: Performance dri
Slide 23: Profit Sensitivity
Profit Sensitivity For personal use only Underlying EBITDA $(10m) $(7.5m) $(5m) $(2.5m) EBITDA +$2.5m +$5m +$7.5m +$10m Sheep price -$20 -$10 +$10 +$20 Cattle price -$100 -$50 +$50 +$100 Sheep volume -1m head -500k head +500k head +1m head Cattle volume -200k head -100k head +100k head +200k head Re
Slide 24: Points of Presence
Points of Presence For personal use only 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 Targeted expansion of footprint through recruitment and acquisition 23
Slide 25: Market Forces
For personal use only FORCES MARKET
Slide 26: Outlook summary
Outlook summary For personal use only The value of Australia’s agricultural sector increased by 12% to a high of $63.7 billion in 2016-17 with record winter crop production and relatively high prices for livestock and livestock products. This is expected to retreat to $58.2 billion (-9%) with lowe
Slide 27: Cattle
Cattle For personal use only Cattle herd Live cattle exports Weighted average saleyard price Million heads Thousand heads Ac/kg dressed weight 30 1,400 700 29 1,200 -13.9% +4% 600 28 1,000 +4% 500 27 800 400 26 600 25 400 300 24 200 200 2014 2015 2016 2017 2018f 2014 2015 2016 2017 2018f 2014 2015 2
Slide 28: Sheep and wool
Sheep and wool For personal use only National sheep flock Shorn wool production NTLI and EMI Million heads Thousand tonnes greasy Ac/kg cwt Ac/kg clean +3% 350 +14.0% 74 +4% 650 1,600 72 70 600 1,400 68 300 +6.8% 550 1,200 66 64 500 1,000 62 250 450 800 2014 2015 2016 2017 2018f 2014 2015 2016 2017
Slide 29: Dairy
Dairy For personal use only Global dairy prices Australian dairy herd Australian milk production USD/tonne Million heads Million litres 6,000 +20% 1.70 10.0 5,000 1.65 4,000 1.60 9.5 +3% +1% 3,000 +8% 1.55 9.0 2,000 1.50 -2% 1,000 1.45 8.5 0 1.40 2014 2015 2016 2017 2018f 1.35 8.0 Butter SMP Cheese
Slide 30: Grains, Oilseeds and Pulses
Grains, Oilseeds and Pulses For personal use only Prices Planted Area Production -35.9% A$/tonne Thousand hectares Million Tonnes 60 600 -2% 550 -3% 44 42 40 39 12.8 12.4 -3% 350 20% +6% 4.0 3.9 300 2.8 2.3 250 +27% 200 0 2014 2015 2016 2017 2018f Wheat Barley Canola 2014 2015 2016 2017 2018f Wheat
Slide 31: Sugar and cotton
Sugar and cotton For personal use only Planted Area Sugar production & cane grower returns Cotton production & gin-gate return Thousand hectares Thousand tonnes A$/tonne (Nominal) Thousand tonnes A$/bale (Nominal) +9% -23% 6 60 1,200 700 0% 600 +2% 5 55 1,000 557 500 50 800 430 4 400 381 372 380 45
Slide 32: Horticulture
Horticulture For personal use only The gross value of horticulture production is projected to Gross Value of Horticulture Production increase from $10 billion in 2016-17 to $10.3 billion in 2017-18, $ billion, 2016-17 underpinned by growing domestic demand for fresh produce and favourable export o
Slide 33: For personal use only
For personal use only