Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — FY2017 Earnings Presentation
22 slides from Australian Agricultural's earnings presentation, May 10, 2017
Slide 1: Financial Results Full Year ended 31 March 2017
For personal use only Australian Agricultural Company Financial Results Full Year ended 31 March 2017
Slide 2: FY17 snapshot – path of continued growth
FY17 snapshot – path of continued growth For personal use only AACo’s strategy is delivering returns Operational performance … delivering financial returns ü Brand & Marketing strategy being validated $45.0m Operating EBITDA 10% Operating ü Production costs reduced and average sale $50m EBITDA margi
Slide 3: Who We Are
For personal use only Who We Are
Slide 4: We Produce, We Grow, We Prepare for Sale, We Sell
We Produce - The AACo difference - For personal use only Genetic sophistication and specificity We Grow Highest quality land and cattle - The AACo difference - Customer driven Products Integrated supply chain A luxury Customised nutrition branded beef Data analytics We sell Branded Beef business - T
Slide 5: Business model transformation: The AACo Journey
Business model transformation For personal use only The AACo Journey From pastoral company towards a vertically integrated, luxury, branded beef business FY14 FY15 FY16 FY17 ü New strategic ü Established ü Brand strategy ü Multiple operational direction set customer focused implementation milestones
Slide 6: FY17 Operational Highlights
For personal use only FY17 Operational Highlights
Slide 7: Brand & Marketing strategy delivering results
Brand & Marketing strategy delivering results For personal use only AACo is focused on strategic, mutually beneficial partnerships with customers This model delivers a range of benefits to AACo and our customers: ü Brand exclusivity and investment ü Better control of product through to the chef and
Slide 8: Brand & Marketing strategy being validated
Brand & Marketing strategy being validated For personal use only Singapore launch ü Strategic exclusive distribution partnership with Culina ü Successful launch of Westholme and Wylarah luxury brands in Singapore in October 2016 ü September - March 2017 volume increase of 11% and overall average sal
Slide 9: Margin expansion
Margin expansion Operating EBITDA margin 10% (vs 3% in FY16) For personal use only AACo’s cost of production has declined... … while our average selling price has increased 80.00 4.00 Wagyu & Shortfed Average Sale Price per KG 60.00 3.00 $11.50 KGs (mil) $10.50 $/kg 40.00 2.00 $9.50 20.00 1.00 $8.50
Slide 10: Targeted cattle inventory investment
Targeted cattle inventory investment For personal use only AACo actively manages the size and mix of its cattle Wagyu inventory has grown, and is concentrated inventory to support its integrated supply chain in backgrounding & feedlots – Certainty of supply and quality is critical for 22,000,000 cus
Slide 11: Further improvement in Livingstone efficiency
Further improvement in Livingstone efficiency For personal use only Significant efficiency gains in FY17 Driven by: 26% 30% 30% ü Further increase in volumes processed Head processed KG processed Conversion cost ü Operational efficiency improvements Livingstone sales revenue mix in FY17 Livingstone
Slide 12: Working capital improvement
Working capital improvement For personal use only ü Supply chain optimisation has driven a reduction in finished goods inventory ü Operational focus on debtor controls ü $15.1m of cash released from working capital in FY17 as a result of these two initiatives $m 31 Mar 2017 31 Mar 2016 Improvement R
Slide 13: FY17 Financial Highlights
For personal use only FY17 Financial Highlights
Slide 14: Strong improvement in key operating metrics
Strong improvement in key operating metrics For personal use only FY17 FY16 ü High value, higher operating Meat sales % of total sales 86% 88% margin focus Meat sales (mil kg) 38.7 44.4 ü Improvement in cost of production Cost of production ($/kg LW) $2.14 $2.93 Average meat sale price Wagyu and Sho
Slide 15: Driving significant growth in profitability
Driving significant growth in profitability For personal use only $m FY17 FY16 Change ü Operating EBITDA of $45.0m Branded beef sales 383.0 428.3 (45.3) triple FY16 Cattle sales 63.7 61.1 2.6 ü Focus on higher value business Total sales revenue 446.7 489.4 (42.7) Processing & logistics costs (50.4)
Slide 16: Increased operating cash flow
Increased operating cash flow For personal use only ü Improved net operating cash flow by $7.5m while investing in strategic assets ü All cash needs funded by operations and existing bank facilities ü Strategic investments included: ü Securing cattle inventory ü Purchasing 70,000 megalitres of water
Slide 17: Strong balance sheet
Strong balance sheet For personal use only • NTA per share up 10% to $1.82 ü Property valuation increased 7% or $44.3m ü Average cattle value per head increased 13% to $1,207 per head • Further reduction in Gearing Ratio, to 24.4% 31 Mar 2017 31 Mar 2016 Change Livestock ($m) 662.5 563.2 99.3 Proper
Slide 18: Our Strategy
For personal use only Our Strategy
Slide 19: Leveraging investment in our three integrated supply chains
Leveraging investment in our three integrated supply chains For personal use only Classic Modern Luxury 18
Slide 20: A clear strategy to deliver shareholder value
A clear strategy to deliver shareholder value For personal use only Integrated Supply Chain Branding and Marketing ü Supply chain improvements and ü Establish new customer simplification partnerships in new markets ü Emphasis on Internally produced ü Invest in our brands supply Drive revenue growth
Slide 21: Questions?
For personal use only Questions?
Slide 22: Important information
Important information Summary information only This presentation contains general information about the Australian Agricultural Company Limited and its consolidated entities (“AACo”) and its activities current as at the date of this presentation. It is provided in summary and does not purport to be
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