Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — H1 FY22 Earnings Presentation
26 slides from Australian Agricultural's earnings presentation, Nov 18, 2021
Slide 1: The Art of Australian Beef: H1FY22 Results Presentation
For personal use only co THE ART OF AUSTRALIAN BEEF H1FY22 Results Presentation 18 November 2021
Slide 2: Disclaimer
For personal use only 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
Slide 3: Agenda
For personal use only Executive Summary Page 4 H1 FY22 Progress Page 6 Commercial Overview Page 7 Financial Performance Page 10 Sustainability Strategy Framework Page 18 Operating Environment Page 19 3
Slide 4: Executive Summary
For personal use only • Operating Profit of $30.0M up vs pcp $23.5M1 driven by improved operating margins mainly through: ➢ Improvements in average Wagyu meat sale price of 9% per KgCW. ➢ Higher cattle sales margins supported by record trading and restocker cattle market prices. • Net Profit after t
Slide 5: Impact of lower calving on meat sales volume
For personal use only • AACo’s lower calving levels in previous years (due to prolonged drought and the Gulf flood event) have continued to impact meat sales volume in H1 FY22 (down ~8% v pcp). This is consistent with broader industry decreases in slaughter rates which are at 36 year lows. • AACo’s
Slide 6: H1 FY22 Progress
Consumer + Operational Our For personal use only Customer Centricity Excellence Team “Creating a high performance culture where our “Branded Beef Strategy” “Creating a simpler and more efficient AACo” dedicated and passionate people can thrive” Wagyu Meat sales $/KgCW increase + 9% Developed Sustain
Slide 7: Regional Proportion of Total Meat Sales
Regional Proportion of Total Meat Sales For personal use only Strategic allocation driving higher average $/Kg. North America Europe/Middle East North America • Branded meat sales1 average $/Kg price 33% favourable vs pcp supported by strong demand for higher MBS loins and rumps. H1 H1 H1 H1 FY21 FY
Slide 8: Westholme brand presence in the USA and Australia
For personal use only Continued growth in Westholme brand presence in the USA through strong focus on chef engagement via digital channels. Built further Brand awareness with consumers though Direct to Consumer gourmet e-marketplaces in the USA. Foodservice re-opening programs to support key custome
Slide 9: South Korea and Hong Kong marketing programs
South Korea in-store programs driving shopper engagement and supporting an increase in retail price. New digital marketing program commenced to build brand awareness For personal use only in South Korea. Brand refresh implemented in Hong Kong retail following the success of new branding in South Kor
Slide 10: Financial Performance
For personal us Financial Performance
Slide 11: Financial Performance Highlights
Cash Flow / Net For personal use only Growth Profit Assets Meat Operating Operating Sales Profit Cash Flow + 28% vs pcp (22%) vs pcp Flat vs pcp + 79% vs pcp (ex JobKeeper) (5%) vs pcp (ex JobKeeper) Wagyu Meat Operating Net Tangible Sales Price Profit Margin Assets + 9% vs pcp + 9 ppt vs pcp (ex Jo
Slide 12: Revenue in line with pcp
H1 FY22 revenue in line with pcp supported by improved price realisation, offset by lower volumes. For personal use only Meat Sales Revenue: Flat Cattle Sales Revenue: ($0.6M) $8.5M ($8.5M) $6.4M $/Kg Kg CW ($7.0M) + 9% (8%) $/Kg + 19% Kg LW $144.0M (17%) $143.4M Total Revenue Price/Mix Volume Price
Slide 13: Cost of production decrease vs kilograms produced
Cost of production decrease of 13% vs pcp driven by Cost of production vs kilograms produced For personal use only improved seasonal conditions and productivity. 75 $3.29 3.40 Kilograms produced have increased by 31% vs pcp off the back of 70 3.20 higher brandings during the period. 65 3.00 $2.74 2.
Slide 14: Operating profit bridge
Improved sales margins driving positive operating profit of For personal use only $30.0M vs $23.5M pcp. $30.0M $2.0M $4.6M $23.5M ($6.7M) $6.6M Operating Profit FY21 Gross FX Other Operating Profit 1 2 H1 FY21 JobKeeper Margin gains and losses H1 FY22 1. Favourable sales margins off the back of high
Slide 15: Profit and Loss Summary
Profit and Loss Summary ($M) H1FY22 H1FY21 CY v PY For personal use only Meat Sales 102.9 102.9 - Improved sales margins driving positive operating profit of $30.0M vs $23.5M1 pcp. Cattle Sales 40.5 41.1 (0.6) Total Sales Revenue 143.4 144.0 (0.6) • H1 FY22 meat sales revenue in line with pcp suppor
Slide 16: Cash flow
For personal use only Positive operating cash flow of $17.3M vs $22.3M pcp. Consolidated Statement of Cash Flows ($M) H1FY22 H1FY21 CY v PY Lower net operating cash flow vs pcp driven primarily by: Receipts from Customers 151.6 152.5 (0.9) • JobKeeper cash receipts in pcp of $4M. • Offset by lower c
Slide 17: Statement of Financial Position
Financial position strengthens with net assets now exceeding Consolidated Statement of Financial Position ($M) Sep-21 Mar-21 For personal use only $1.1B and NTA of $1.88/Share. Livestock 653.0 537.4 PPE & Intangibles 982.6 978.8 • Successful refinance of existing Club Debt Facilities. ➢ Total commit
Slide 18: Sustainability Strategy
Sustainability Strategy For personal use only valuing Naty re ing the founda; 4 efor a better tonlon oF Pro ry Oro, Xi out Pursuing Circularity Climate Regenerating Action Nature ‘Animal Health Valuing People & Welfare Resilient New approaches Communities to landscapes First Nations Future of Food P
Slide 19: For personal use only
For personal use only 19
Slide 20: Global demand outweighs supply
Total Beef Imports by calendar year Global Beef Production by Calendar year (million tonnes Carcass Weight Equivalent) 9.7 9.9 10.1 For personal use only 9.1 Global demand outweighs supply 8.4 Carcass Weight Equivalent Million metric tons 6.9 6.8 6.9 6.9 7.0 Strong global demand for beef supported b
Slide 21: Australian cattle market conditions
For personal use only • Positive conditions encouraging producers to retain stock for breeding purposes, supporting the start of a National herd rebuild from the 25 year lows experienced in 2020. • High demand for cattle in a low supply environment has driven strong pricing across all classes, with
Slide 22: For personal use only
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Slide 23: Questions
For personal use only co THE ART OF AUSTRALIAN BEEF Questions
Slide 24: Appendix
For personal use only co THE ART OF AUSTRALIAN BEEF Appendix
Slide 25: Definitions
Cost of Goods Sold (COGS) valued “at cost” Represents the actual production cost the Company incurred over the multi-year timeline required to produce the meat and cattle that was sold during the period. For personal use only This is in contrast to Cost of Goods Sold as presented in the statutory fi
Slide 26: The Art of Australian Beef
For personal use only co THE ART OF AUSTRALIAN BEEF
Australian Agricultural Company — H1 FY22 Earnings Presentation on 6ix