Ridley Corporation Limited · ASX:RIC
Ridley — BBY Conference 2009
38 slides from Ridley's conference presentation, Sep 21, 2009
Slide 1: Ridley Corporation
RIDLEY CORPORATION INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK 21st September 2009
Slide 2: Agenda
AGENDA INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM SALT PROPERTY OUTLOOK APPENDICES 2
Slide 3: Ridley
RIDLEY INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Ridley Corporation Limited (RIC) is: a processor of value-added Agricultural products Australia’s largest processor of stockfeed products (Ridley Agriproducts) Australia’s largest producer and refiner of salt products (Cheetham
Slide 4: FY2009 Highlights
FY2009 HIGHLIGHTS INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Normalised NPAT from continuing operations of $28.1m, up 77% Sale of Ridley Inc Debt reduction and extension of banking facilities Record result in Agriproducts and positioned for strong organic growth Foundat
Slide 5: Strong Profit Growth
STRONG PROFIT GROWTH INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Normalised EBITDA of $55.8m (+27%) Normalised NPAT of $28.1m (+77%) Normalisations: (1) Agriproducts normalised for full year benefit of cost savings - $3m in FY2009, though $5m annualised (2) Cheetham normalised
Slide 6: Strong EPS Growth
STRONG EPS GROWTH INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Normalised EPS of 9.3cps underlines ability to pay dividends from Australian earnings 6 6
Slide 7: Strong Cashflow
STRONG CASHFLOW INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Operating cashflow $53.0m EBITDA 2008 2009 2009n following a net reduction in net EBIT* 32.2 37.6 44.4 working capital of $21m Depreciation 11.8 11.4 55.8 Ungeared pre tax cashflow of EBITDA* 44.0 49.0 55.8 $65.7m Cas
Slide 8: Low Gearing
LOW GEARING INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Gearing reduced from 54% to 25% Cash Conversion 2008 2009 2009n Interest cover ratios show the low Net Debt 199 69 69 debt level relative to earnings Equity 369 276 276 ROE has improved on a Total Assets 568 345 345 nor
Slide 9: INTRODUCTION FINANCIALS AGRIPRODUCTS
INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK 9
Slide 10: Agriproducts Overview
AGRIPRODUCTS OVERVIEW INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Market ~12mt of animal feed consumed annually in Australia ~6mt freely traded and the other 50% owned by integrators, feedlots etc Ridley has ~1.5mt (25%) of the freely traded market and ~12.5% of the total ma
Slide 11: Market Segments
MARKET SEGMENTS INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Poultry: accelerated growth due to newly Species (kt) 2008 2009 2010 contracted business Poultry 678 746 Pig: feed market reflects the fresh pork market Pig 375 332 Dairy 323 293 Dairy: first half expected to be wea
Slide 12: A Less Volatile Business
A LESS VOLATILE BUSINESS INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK An increasing proportion of An increasing proportion of volumes from the less seasonal volumes are contracted giving poultry markets greater certainty a lower proportion from more This trend will continue
Slide 13: FY2009 Financial Highlights
FY2009 FINANCIAL HIGHLIGHTS INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Record EBIT result of $24.4m Agriproducts 2008 2009 2009n normalised to $26.4m is sustainable and the business is well positioned for further growth EBIT ($m) 15.0 24.4 26.4 EBITDA ($m) 22.6 31.1 33.1 Cash
Slide 14: Outlook
OUTLOOK INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Benefit from actions of the last 12 months Sales of underperforming assets and organisational restructuring Cost reductions of ~$5m – full year benefits in FY10 First Half FY2010 Re-opening of Clifton mill supported by cont
Slide 15: INTRODUCTION FINANCIALS AGRIPRODUCTS
INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK 15
Slide 16: Cheetham Overview
CHEETHAM OVERVIEW INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Cheetham owns: 11 solar salt fields with combined production capacity of ~1.4mt 5 refineries (one in Indonesia) including a flake salt plant ~70% domestic market share Joint Venture Interests: Salpak: JV with Cerebo
Slide 17: Market Segments
MARKET SEGMENTS INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Salt demand: typically grows in line with population Segment 2008 2009 2010 growth and GDP Soda Ash 574.3 580.4 Soda Ash: influenced by Penrice demand Chemical 172.1 143.4 Chemical: influenced by chlor-alkali demand
Slide 18: FY2009 Financial Highlights
FY2009 FINANCIAL HIGHLIGHTS INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Underlying EBIT result of $17.7m impacted by abnormally large costs of $4.8m pairing Cheetham 2008 2009 2009n the result back to $12.9m Revenue 95.3 101.5 101.5 Continued steady growth of after tax Joint V
Slide 19: Outlook
OUTLOOK INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Benefit from actions of the last 12 months Reopening of Port Alma Salt field – benefits to flow from F11 onwards Corio refinery relocation to Sea Lake Implementation of new ERP system Absence of unusually large costs Firs
Slide 20: Property
PROPERTY INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Strategy Unlocking the potential value of land close to urban centres Net valuation of $81.85m underpinned by independent value from Savills Some small initial sales (eg. Corio $2.5m) with potential larger sales offering m
Slide 21: Dry Creek Development Area
DRY CREEK DEVELOPMENT AREA INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Aerial view of Dry Creek Crystalliser Ponds 21
Slide 22: Lara
LARA INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Lara Salt Avalon Fields Airport Avalon air strip 22
Slide 23: Macro Environment
MACRO ENVIRONMENT INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Agriproducts Unique position in the Agri-sector with relatively: Low exposure to climatic conditions Low exposure to the size of the crop Stable cashflows and strong conversion of EBITDA to cash Drivers in the
Slide 24: Conclusions
CONCLUSIONS INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK FY09 a watershed year for simplifying and restructuring the business New management team now established in Melbourne Strong growth evident in underlying results Strategic initiatives are well on track Agriproducts
Slide 25: Questions and Answers
INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK QUESTIONS AND ANSWERS 25
Slide 26: Appendices
APPENDICES INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK PROFIT AND LOSS NON TRADING ITEMS BALANCE SHEET WORKING CAPITAL CAPITAL EXPENDITURE CASHFLOW DEBT BRIDGE SEGMENT SUMMARY PROPERTY VALUATION 26
Slide 27: FY2009 Profit Highlights
FY2009 PROFIT HIGHLIGHTS INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK Group NPAT from continuing operations of Continuing Op’s 2008 2009 2009n $20.3m, normalised to $28.1m for large Sales Revenue 838.4 819.4 819.4 adjustments EBIT - Agriproducts 1 15.0 24.4 26.4 Record EBIT res
Slide 28: Profit and Loss
PROFIT AND LOSS INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Continuing Operations 2008 2009 2009n Minimal equity issues other than DRP Net Profit pre sig. items 15.9 20.3 28.1 EPS of 4.3, however on a normalised basis Significant items after tax (10.4) (7.4) (7.4) would be 6.8
Slide 29: Profit and Loss
PROFIT AND LOSS INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK A$m 2008 2009 Change Continuing NPAT result of $12.9 reflected earlier NPAT from continuing Loss of $52.4m associated with the 15.9 20.3 27.6% operations before sale of Ridley Inc as reported at the significant items
Slide 30: Significant Items
SIGNIFICANT ITEMS INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK A$m 2008 2009 Corporate restructuring costs of $1.2m Corporate Restructuring Costs 2.5 1.2 associated with relocation of Sydney (pre tax) corporate head office to Melbourne Takeover Defence Costs (pre tax) 1.7 0.1 G
Slide 31: Balance Sheet
BALANCE SHEET INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Balance Sheet (A$m) 2008 2009 Reduction in Net Current Assets reflecting the significant working capital reduction Total Current Assets 207.2 175.7 Total Current Liabilities 120.2 121.1 PPE reduced with write-down of sa
Slide 32: Working Capital
WORKING CAPITAL INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Working Capital (A$m) 2008 2009 Increased focus on timely Cash 1.8 0.3 debt collection Trade Debtors 102.2 88.4 A combination of lower input Other Debtors, Prepay’ts and Div’s Receivable 13.0 6.0 prices, less sites an
Slide 33: Capital Expenditure
CAPITAL EXPENDITURE INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Capex ($m) 2009 2010* $7.1m of development capital expenditures in salt, with $5.2m in Sea Lake 3.3 0.4 FY10 to complete these projects Bajool Refinery 0.9 2.6 $1.6m for Clifton mill reopening in Port Alma 1.5 - F
Slide 34: Cashflow
CASHFLOW INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Continuing Operations A$m 2009 2008 Operating Cashflow of $58.1m Operating Cashflow before dividends 58.1 7.9 Salt joint venture distributions increase received, interest and tax in line with inflation Salt Joint Venture dis
Slide 35: Cashflow
CASHFLOW INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Continuing Operations A$m 2009 2008 Proceeds from sale of Ridley Inc. of A $91.6m applied as part of the debt Operating Cashflow after Net Capex 36.6 (23.6) retirement for the year Net Proceeds from Sale of Ridley Inc 91.6 -
Slide 36: Debt Bridge F08 to F09
DEBT BRIDGE F08 TO F09 INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK 36 Note: Closing debt at 30 June 2009 of $69.1m includes both current and non-current borrowings
Slide 37: Segment Summary
SEGMENT SUMMARY INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Segment 2009n 2009 2008 Agriproducts - Tonnes (kt) 1,573 1,573 1,610 - EBIT 26.4 24.4 15.0 - Depreciation 6.7 6.7 7.6 - EBITDA 33.1 31.1 22.6 - Funds Employed 129.9 129.9 156.8 - ROFE 20.3% 18.8% 9.6% Cheetham - Tonnes (k
Slide 38: Property Valuation
PROPERTY VALUATION INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK As disclosed in section 4 and Annexure 1 of Ridley’s Target Statement on 17 July 2008, property valuer Savills’ provided an indicative valuation of significant land holdings that Ridley owns which are located in close