Ridley Corporation Limited · ASX:RIC
Ridley — FY2006 Earnings Presentation
33 slides from Ridley's earnings presentation, 2006
Slide 1: 2006 Annual Results Presentation
RIDLEY CORPORATION LIMITED 2006 ANNUAL RESULTS PRESENTATION
Slide 2: Main Features
Main Features • Operating EBIT up 15% before legal costs • Strong recovery in Canada • Continuing improvement in Australian Feed • Dry Creek acquisition performing well • Ongoing Canadian legal costs • Borrowing costs & tax expense higher • Full year dividend increased to 7.0 cps
Slide 3: Results
Results A$m F2006 % to LY Sales Revenue 1,259 9% EBITDA 82 12% EBIT before legal costs 63 15% EBIT 60 12% Net Profit 28 (31%) Dividends * 7.0 cps 8% * Interim & Final 3.5 cps 50% franked Note - all prior year numbers restated for AIFRS
Slide 4: Net Profit
Net Profit A$m 5.4 1.5 2.1 4.0 2.0 4.1 6.1 1.1 0.3 30.7 27.7 2005 * Legal Australia Cheetham US Canada RNS Corp Net Tax & 2006 Net Feeds Salt Feeds Feeds Costs Interest MI * Before Significant Items
Slide 5: Sales by Division
Sales by Division A$m 6 10 15 11 15 49 1,259 1,153 2005 Australia Cheetham US Canada RNS Currency 2006 Feeds Salt Feeds Feeds
Slide 6: Australia Feeds
Australia Feeds A$m F2006 % to LY Sales 492 11% EBIT 16 2% Tonnes (000's) 1,695 9% Features • Operating earnings up 9% • Increase in dairy & poultry volumes • Bolt on acquisitions • Specific focus on Supplements business • Increasing direct farm purchasing
Slide 7: Australia Feeds - Volume
Australia Feeds - Volume Tonnes 35 6 8 36 68 1,695 1,558 2005 Acquisitions Dairy Poultry Pig Other 2006
Slide 8: Australia Feeds - EBIT
Australia Feeds - EBIT A$m 3.0 2.4 2.1 4.4 0.6 1.9 0.9 1.0 15.6 15.9 2005 Acquisitions Volume Margins Labour & Mfg Freight & Selling & F2005 2006 Energy O'heads Other Admin JV
Slide 9: Cheetham Salt
Cheetham Salt A$m F2006 % to LY Sales 87 21% EBIT 23 22% Tonnes (000's) 1,201 87% Features • Dry Creek performing well • Lower volumes to Qld ag sector • Energy, labour, transport & packaging cost increases • Cost recovery / margins improving
Slide 10: Cheetham Salt - EBIT
Cheetham Salt - EBIT A$m 1.1 0.3 1.0 5.8 0.7 23.1 19.0 2005 Dry Creek Qld Ag Other Operating Japan & 2006 Sectors Costs Indonesia
Slide 11: US Feeds
US Feeds A$m US$m Sales 395 4% 293 3% EBIT 17 13% 13 12% Tons (000's) 897 (1%) Features • Customer environment stable • Improved margins • Cost reduction program benefits
Slide 12: US Feeds - EBIT
US Feeds - EBIT US$m 1.0 3.2 0.3 1.7 3.1 1.5 0.5 12.7 11.4 2005 Volume Margins Production Freight Selling F05 Plant F05 Claim 2006 Costs & Admin Sale Settlements
Slide 13: Canada Feeds
Canada Feeds A$m C$m Sales 176 10% 150 1% EBIT 10 115% 9 103% Tonnes (000's) 460 5% Features • Improved margins and volumes • Cost reduction program benefits • Border re-opened
Slide 14: Canada Feeds - EBIT
Canada Feeds - EBIT C$m 0.9 0.8 1.6 1.0 1.6 0.1 2.2 8.7 4.3 2005 Volume Margins Production Freight Selling F05 Bad F05 Plant 2006 Costs & Admin Debts Closure
Slide 15: Ridley Nutrition Solutions
Ridley Nutrition Solutions A$m US$m Sales 110 11% 82 10% EBIT 10 (13%) 7 (14%) Tons (000's) 163 9% Features • Molasses availability / prices • Hurricanes – transport disruption (1st half) • Energy costs • New Equine mill – start up phase
Slide 16: RNS - EBIT
RNS - EBIT US$m 0.3 0.9 0.6 8.3 7.1 2005 Block Sweetlix New Equine 2006 Operations Mill
Slide 17: Financial Performance
RIDLEY CORPORATION LIMITED 2006 Financial Performance
Slide 18: AIFRS Impact 2005
AIFRS Impact 2005 A$m June 2005 AGAAP 34.6 Goodwill - Including Associates 4.6 Share based payments (0.6) Tax 2.0 Minority Interest (0.6) June 2005 AIFRS 40.0
Slide 19: AIFRS Impact 2005
AIFRS Impact 2005 A$m AGAAP Impact AIFRS Australia Feeds 14.6 1.0 15.6 Cheetham Salt 18.1 0.9 19.0 US Feeds 14.4 0.8 15.2 Canada Feeds 3.9 0.8 4.7 RNS 9.7 1.3 11.0 Unallocated (11.4) (0.7) (12.1) Total EBIT 49.3 4.0 53.4
Slide 20: Cashflow
Cashflow A$m F2006 F2005 EBITDA 82 74 Capex (26) (23) Borrowing costs (12) (9) Tax (7) (14) Dividends (10) (12) Working capital & other (23) 23 Cash generated 3 38 Acquisitions (10) (79) Net (7) (41)
Slide 21: Working Capital
Working Capital A$m F2006 F2005 F2004 Trade Receivables 105 92 91 Inventory 128 110 106 Payables (136) (132) (111) Other & Provisions 1 5 6 Total 99 76 91 Days Sales outstanding 29 29 29
Slide 22: EBITDA
EBITDA A$m F2006 F2005 Australia Feeds 22 22 Salt Operations 27 22 US Feeds 23 21 Canada Feeds 13 7 RNS 12 13 Corporate & Other (15) (11) Total 82 74
Slide 23: Corporate & Unallocated Costs
Corporate & Unallocated Costs A$m F2006 F2005 Corporate Costs 12 10 Canadian Legal Costs 3 1 Project Costs 1 1 Total 16 12
Slide 24: Debt Movement
Debt Movement A$m Net Debt - June 2005 164 Acquisition funding 10 Repayments (3) Net Debt - June 2006 171
Slide 25: Gearing
Gearing A$m F2006 F2005 F2004 Net Debt 171 164 123 Equity 394 351 326 Ratio 43.5% 46.7% 37.8%
Slide 26: Net Debt
Net Debt A$m F2006 F2005 F2004 Australia 144 113 69 Ridley Inc. 27 51 54 Total 171 164 123
Slide 27: Key Ratios
Key Ratios A$ F2006 F2005 F2004 Net Debt / EBITDA 2.1 2.2 1.7 EBITDA / Net Interest 6.4 8.2 7.2 EBIT / Net Interest 4.6 5.9 5.3 ROSF * 8.6% 10.5% 9.9% ROFE * 10.1% 9.8% 9.5% EPS * (fully diluted) 10.0 11.3 8.8 * Before Significant Items
Slide 28: Currency Impact
Currency Impact Jun '06 Jun '05 Avg Exchange Rate A$ - US$ 0.7434 0.7495 A$ - C$ 0.8631 0.9158
Slide 29: Banking Facility
Banking Facility • Facility restructured July 2006 • Term extended to July 2009 • Reduced interest margins & improved covenants • Increased to $335m from $270m
Slide 30: Canadian Legal Claims Update
RIDLEY CORPORATION LIMITED Canadian Legal Claims Update
Slide 31: Legal Claims - Status
Legal Claims - Status • Claims against Ridley Corporation at an end in all provinces • Claims against Canadian Govt. and 69% subsidiary Ridley Inc. continue, but still at an early stage: • Merits of claims not yet considered in any province • Claims not yet certified as class actions and defences no
Slide 32: Legal Claims - Status
Legal Claims - Status • Later this year likely hearings are: • In Ontario, appeals by all parties including Canadian Govt. and Ridley Inc. against the decision not to strike out the claims; and • In Quebec, application for certification of the claims as a class action
Slide 33: Legal Claims - Management
Legal Claims - Management • Minimal impact on the day to day business: • Ridley Corporation no longer a party to any action in Canada • Dedicated staff to manage the litigation & costs • Controlled legal costs • Costs within budget this year to 30 June 2006 • Disciplined approach will continue • Sta