Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — FY2018 Earnings Presentation
40 slides from Australian Agricultural's earnings presentation, May 23, 2018
Slide 1: FY18 Results Presentation
For personal use only ed co FY18 Results Presentation 23 May 2018
Slide 2: Contents
For personal use only Contents Overview FY18 Financial Performance Looking Ahead Metrics Current Trading Conditions THE ART OF AUSTRALIAN BEEF co
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Slide 4: FY18 Balanced Scorecard
FY18 Balanced Scorecard Transparent management, progress to be guided by clear metrics People Performance Customer Performance Business Performance Financial Performance 63% $14.45 10% $13.6 Employee Engagement Score Luxury/ Prestige price per kilo Increase in cost of production per kg Operating EBI
Slide 5: FY18 Financial Performance
For personal use only FY18 Financial Performance THE ART OF AUSTRALIAN BEEF co
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Slide 7: Macro conditions challenging
Macro conditions challenging Increased competition from US exports Rainfall 2 Upward pressure on feed prices: Year-on-year % change in US exports (FY18)1 60% 2016/17 2017/18 —=m==Ten Year Average 350 49% 50% 48% 40% 40% 40% 300 FYiBaverageprice 30% 250 FYI? averageprice 20% 13% 10% 0% Norhern@heensl
Slide 8: Strong asset portfolio
Strong asset portfolio Key points: Property Portfolio Value* * Increasein breeding and stud cattle in line with continued emphasis on improving t= AACo Property value based on 2014 holdings herd quality, with herd composition now approximately 20 per cent Wagyu/F1ls 160.0 * AACo’sproperty portfolio
Slide 9: Current brand portfolio
Current brand portfolio Ongoing growth opportunities through disciplined transition New Brands Singapore Taiwan Total FY18 $32 price per kg FY18% | total meat revenue Singapore Taiwan Luxury / Prestige MASTER Australia Canada Hong Kong Indonesia Thailand UAE USA Transitioning Heartland Australia Hon
Slide 10: Luxury/Prestige
Luxury/Prestige Volumes Sold (Kg m) Price/kg ($) Sales ($m) 13.3 1773 175.9 176.9 te 12.5 12.2 44.10 14.45 10.1 13.33 138.9 119.4 | [ i L FY14 FY15 FY16 FY17 FY18 Fy14 FY15 FY16 FY17 FY18 Fy14 FY15 FY16 FY17 FY18 Key Points: * Westholmeand Wylarah brands in Singapore continue to perform strongly, wi
Slide 11: Premium
Premium Volumes Sold (Kg m) Price/kg ($) Sales ($m) 166.8 119.8 il li: ; il | I I L li FY4 FYI7 FY18 FY4 FY16 FYI7 FY18 FYi4 FYI5 FY16 FYI7 FY18 Key Points: As announced in April, AACo’s Premium supply chain has underperformed expectations, primarily due to its reliance on external service providers
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Slide 14: Cost of Production
Cost of Production Production and cost ofproduction per kg 80 70 60 50 $2.35 FY16 FY17 mame K ilograms produced (m KG LW) THE ART OF AUSTRALIAN BEEF FY18 == Cost of production ($/kg LW) $3.50 $3.00 $2.50 $2.00 $1.50 Key points: * Average cost of production per kg across breeding, backgrounding and f
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Slide 17: Looking Ahead
For personal use only Looking Ahead THE ART OF AUSTRALIAN BEEF co
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Slide 19: Value-adding supply chain
Value-adding supply chain Southern Queensland Backgrounding and finishing primarily F1/Wagyu cattle for a variety of end markets SE Queensland Feedlots for grain-fed cattle “GBonoo Feedlot FEEDLOTTING - Aronui Feedlo v \ PROCESSING 7” Branded Beef Vv Luxury/Prestige brands v Premium brands Export an
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Slide 24: Branding & Marketing Approach
For personal use only Branding & Marketing Approach THE ART OF AUSTRALIAN BEEF ~ co
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For personal use only 25 1. Bain luxury goods worldwide report 2. Mintel global food and drink report 3. Barclays 2017 global spend report
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For personal use only 1. MLA survey of over 100,000 consumers in nine countries – 90% equated fat with lack of quality 2. MLA survey – consumers will pay double the price for a premium (5 star rated) quality of product, Mintel Global Food & Drink Report 3. MLA return on Eating Quality Standards – pa
Slide 27: Customer-driven brand strategy
Customer-driven brand strategy Underpinned by customer data and rigorous testing ‘1 =) BS Vv Vv Vv Vv Vv Leveraged Two-year Supported by © independent process of he Sane } proprietary Comprehensive ) industry data brand a ie 4 in-restaurant IP protection @ Cook samples) development eae testing ion 4
Slide 28: Brand strategy delivering results
through to the customer Greater brand control » distribution partners Deeper relationship with » Quality Food & Beverage 195 restaurant partners in Singapore Mayfull (©70% growth since Dec 2017) THE ART OF Direct chef engagement resulting in promotion of brands chefjakeyk + Follow gb Brunette Downs
Slide 29: Marketing investment acceleration
Marketing investment acceleration With a disciplined ROI focus and clear metrics for success * Planned increased investment in marketing in FY19 * Brand performance will be tracked through robust, transparent measurement of return on investment and sales performance Lead Indicators Lag Indicators Gl
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Slide 31: Measurement & Metrics
For personal use only Measurement & Metrics THE ART OF AUSTRALIAN BEEF co
Slide 32: New Measure: Operating Profit
New Measure: Operating Profit * To provide greater transparency on operating performance, anew measure of Operating EBITDA will be provided from the 2019 financial year onwards * The new measure is ‘Operating Profit’ and is calculated using actuals instead of standard costing * Operating Profit valu
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Slide 34: Current Trading Conditions
For personal use only Current Trading Conditions THE ART OF AUSTRALIAN BEEF co
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Slide 36: Appendix
For personal use only Appendix THE ART OF AUSTRALIAN BEEF co
Slide 37: FY18 Segment Note
FY18 Segment Note Segment revenue 341,754 92,055 (64,130) 379,679 Inter-segment revenue (64,130) - 54,130 - Revenue from external customers 287,624 92,055 - 379,679 Operating EBITDA 36,048 (22,430) - 13,618 Difference between the movement of inventory at standard cost versus market value (48,943) -
Slide 38: FY17 Segment Note
FY17 Segment Note Segment revenue 404,473 110,175 (67,922) 446,727 Inter-segment revenue (67,922) - 67,922 - Revenue from external customers 336,552 110,175 - 446,727 Operating EBITDA 59,038 (14,011) 45,027 Difference between the movement of inventory at standard cost versus market value 88,189 - -
Slide 39: Disclaimer
Summary information only For personal use 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
Slide 40: For further information please contact
For personal use only THE ART OF AUSTRALIAN BEEF For further information please contact: TR@aaco.com.au co
Australian Agricultural Company — FY2018 Earnings Presentation on 6ix