Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — FY2010 Earnings Presentation
29 slides from Australian Agricultural's earnings presentation, Feb 10, 2011
Slide 1: Results Presentation Full Year Ended 31 December 2010
For personal use only AUSTRALIAN AGRICULTURAL COMPANY LIMITED ‘ RESULTS PRESENTATION FULL YEAR ENDED 31 DECEMBER 2010
Slide 2: CY10 Highlights
CY10 HIGHLIGHTS For personal use only Revenue ↑ 68% to $263m EBITDA ↑ $88.9m from loss $47.6m to profit $41.3m NPAT ↑ $54.6m from loss $53.7m to profit $0.9m Operating Cash Flow ↑ $7.5m to $48.8m net outflow Herd Numbers ↑ 14% to 577,144 Kgs produced ↑ 26% to 64.2 million kgs Strategy Progressing we
Slide 3: 5 Year Comparisons
5 YEAR COMPARISONS For personal use only Herd (#) Revenue ($m) 600,000 300 580,000 250 560,000 200 540,000 520,000 150 500,000 100 480,000 50 460,000 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 EBITDA ($m) NPAT ($m) 50 20 40 10 30 20 0 10 ‐10 2006 2007 2008 2009 2010 0 ‐20 ‐10 2006 2007 2008
Slide 4: Strategically positioned to meet increasing global demand for protein
For personal use only Strategically positioned to meet increasing global demand for protein Australia and AAco is low cost, unsubsidised producer Regional asset diversification mitigates production/market/environmental risks Diverse and genetically superior cattle Stations 18 Feedlots 2 Farms 2 Land
Slide 5: Principal Operations
PRINCIPAL OPERATIONS For personal use only Production • Cattle breeding • Crop farming total 12,000 ha (30,000 acres) • Cattle trading • Feedlotting • 65,000 head feedlot turnover p.a. • Weight gain Sales Live Boxed / Carcass Processing (outsourced) Marketing Sales Sales Marketing Export/Domestic Di
Slide 6: Herd Profile
HERD PROFILE For personal use only Growth Across the Herd 2010 2009 % Growth (head) (head) Composites / Bos Indicus 464,899 411,741 ↑ 12.9% Wagyu 41,007 31,442 ↑ 30.4% Calf Accrual 71,238 64,493 ↑ 10.5% Total 577,144 507,676 ↑ 13.7% 2010 2009 % Growth (head) (head) Feedlot 41,675 34,032 ↑ 22.5% Trad
Slide 7: Herd Profile (cont'd): Diversification Across Customers and Markets
HERD PROFILE (CONT’D) For personal use only Good Diversification Across Customers and Markets AAco Cattle Sales 2010 15% 27% Grass Finished Shortfed Grain Finished 19% Wagyu Grain Finished Breeder and Feeder Cattle Live Export 20% 19% Shortfed Grain Wagyu Grain Breeder and Grass Finished Live Export
Slide 8: Herd Profile (cont'd): Age Profile of Herd
HERD PROFILE (CONT’D) For personal use only Age Profile of Herd is Improving Age Profile of Breeding Females Age Profile of Breeding Bulls 20% 25% 18% % of Total Breeding Females % of Total Breeding Bulls 16% 20% 14% 12% 15% 10% 8% 2009 10% 2009 6% 2010 2010 4% 5% 2% 0% 0% 1 2 3 4 5 6 7 8 9 10 11 1
Slide 9: Production & Market Impacts
PRODUCTION & MARKET IMPACTS For personal use only Production Impacts • Good pastures allowing restocking in second half • Increased weight gain • Improved management focus has led to an increase in cattle fertility and a reduction in mortality Market Impacts • Foreign exchange • Stronger meat/cattle
Slide 10: Financial Performance
FINANCIAL PERFORMANCE For personal use only 2010 2009 Improvement Summary – Profit & Loss $m $m $m Revenue 262.6 156.3 ↑ 106.3 EBITDA 41.3 (47.6) ↑ 88.9 EBIT 28.4 (61.3) ↑ 89.7 NPAT 0.9 (53.7) ↑ 54.6 10 10
Slide 11: Revenue Movements
REVENUE MOVEMENTS For personal use only ('$m) 300 250 27 200 80 150 263 100 156 50 0 Revenue 2009 ($m) Increased revenue from Live Cattle Increased revenue from Wholesale Beef Revenue 2010 ($m) 11
Slide 12: EBITDA Movements
EBITDA MOVEMENTS For personal use only 70 4 2 3 3 24 50 27 30 41 $'m 10 80 (10) (48) (30) (50) EBITDA ‐ FY09 Revenue ‐ live Revenue ‐ Administration Feedlot cattle Other Cattle expenses Cost of goods sold EBITDA ‐ FY10 cattle wholesale beef and other costs expenses ‐ wholesale beef 12
Slide 13: NPAT Movements
NPAT MOVEMENTS For personal use only ('$m) 80 60 19 40 11 20 23 1 0 108 108 -20 (54) -40 -60 NPAT 2009 Increased operating revenue Increased operating Movement in finance & Tax effect & other NPAT 2010 YoY expenses YoY interest expense 13
Slide 14: Cash Flow
CASH FLOW For personal use only 2010 2009 Summary – Cash Flow Statement $m $m Net Operating Cash Flows (48.8)* (56.4) Proceeds from sale of Property, Plant & Equip. 0.6 141.3 Other (4.7) 34.8 Net Investing Cash Flows (4.0) 176.0 Proceeds from / (repayments of) borrowings 60.3 (130.1) Net Financing C
Slide 15: Kg's Produced
KG’S PRODUCED For personal use only 70 60 50 (million kg’s) 40 2009 30 2010 20 10 0 Grassfed Feedlot Total 2010 2009 % Diff (million kg’s) (million kg’s) Grassfed 47.9 34.5 ↑ 38% Feedlot 16.3 16.3 ‐ 0% Total 64.2 50.8 ↑ 26% 15
Slide 16: Balance Sheet
BALANCE SHEET For personal use only 2010 2009 Summary – Balance Sheet $m $m Cash and liquid assets 32.1 17.8 Intangibles 4.4 6.0 Livestock 413.6 353.2 Property, Plant & Equip 598.9 681.7 Other assets 23.7 23.3 Total Assets 1,072.7 1,082.1 Interest bearing liabilities 357.3 296.7 Other liabilities 12
Slide 17: Strategy Review
STRATEGY REVIEW For personal use only Strategic Review completed May 2010, targeting sustainable future earnings growth, global relevance and risk mitigation. The table below addresses progress in major areas. Cattle Merchandising • Increased cattle trading volumes Value Added Processing • Viewed an
Slide 18: Summary
SUMMARY For personal use only • Successful first year of a 3 year turnaround • Maximised opportunities presented by favourable seasonal conditions • Vertical and horizontal expansion 18
Slide 19: Thank you / Questions
For personal use only Thank you Questions 19
Slide 20: Appendix: Financials by Segment
APPENDIX For personal use only Financials by Segment Live Cattle Operations Wholesale Boxed Beef Total Business segments 2010 2009 2010 2009 2010 2009 $m $m $m $m $m $m Revenue 131.3 51.9 131.4 104.4 262.6 156.3 Allocated costs (108.6) (117.9) (125.6) (99.7) (234.2) (217.6) EBIT Contribution 22.7 (6
Slide 21: Normalisation Adjustments
NORMALISATION ADJUSTMENTS For personal use only Event PBT Effect ($m) Commentary Settlement of Litigation 4.0 Long standing litigation of Elders was settled Flood Losses (2.4) Losses associated with recent flooding Balance of guarantor provision no longer Crystalbrook Writeback 0.9 required No furth
Slide 22: Market Dynamics: Australian Live Exports
MARKET DYNAMICS For personal use only Australian Live Exports 22
Slide 23: Market Dynamics: Improving Efficiency of Property Use
MARKET DYNAMICS For personal use only AAco is Improving the Efficiency of its Property Use 23
Slide 24: Market Dynamics: AAco Boxed Beef Geographic Diversity
MARKET DYNAMICS For personal use only AAco Boxed Beef – Geographic Diversity 24
Slide 25: Market Dynamics: Asian Region Expected to Lift Protein Intake
MARKET DYNAMICS For personal use only Asian Region Expected to Lift Protein Intake A S I Urbanisation Australian Beef exports to emerging markets in South East A & GDP N Asia, China and the Middle East Growth will grow 12% D these I components E T Source: MLA 29% 25 25 FAO: “World Agriculture: towar
Slide 26: Market Dynamics: Population Growth vs Global Cattle Herd
MARKET DYNAMICS For personal use only Population Growth vs Global Cattle Herd 26 26
Slide 27: Market Dynamics: Beef Supply & Demand in 2020
MARKET DYNAMICS For personal use only Beef Supply & Demand in 2020 27 27
Slide 28: AACo Property Map
AACO PROPERTY MAP For personal use only 28 28
Slide 29: AACo Boxed Beef Brands
AACO BOXED BEEF BRANDS For personal use only 29
Australian Agricultural Company — FY2010 Earnings Presentation on 6ix