Australian Agricultural Company Limited · ASX:AAC
Australian Agricultural — H1 2010 Earnings Presentation
19 slides from Australian Agricultural's earnings presentation, Aug 10, 2010
Slide 1: Results Presentation for Half Year Ended 30 June 2010
For personal use only Australian Agricultural Company Limited Results Presentation for Half Year Ended 30 June 2010 1 David Farley – Managing Director & CEO 10 August 2010
Slide 2: First Half 2010 - Result in Summary
First Half 2010 ‐ Result in Summary For personal use only – Improvement in EBITDA of $27.4 delivering positive $3.9 million EBITDA (‐$23.4m loss pcp) – Overall after tax loss of ‐$12.2 million (‐$30.3m loss pcp) – Operating cash outflow of ‐$43.6 $43.6 million (‐$36.1m ( $36. m outflow pcp) – No cha
Slide 3: First Half 2010 - Overview
First Half 2010 ‐ Overview For personal use only – Good seasonal conditions – Purchasing and restocking properties to optimize weight gain and profit – Significant investment in additional cattle – Retention of sale cattle to capture second half 2010 and 2011 benefits – Maximizing feedlot capacity w
Slide 4: Wagyu Position
Wagyu Position For personal use only Wagyu Herd Approx No. Head Number of stud cows 2,500 Number of stud bulls 1,000 , AACo Herd 40,000 Average kill rate per week ~450‐500hd Indicative price comparison on different cuts and trim (1824 versus Wagyu) Importantly, the indicator of the selling price of
Slide 5: Strategy 2010
Strategy 2010 For personal use only – Previous Status Quo offers seasonally dependant growth – Risks & mitigants identified – Operational opportunities identified Changes being implemented: – Expansion of herd to utilize skills and infrastructure – Vertical V ti l integration i t ti tot capture t ma
Slide 6: Production & Market Impacts
Production & Market Impacts For personal use only Production Impacts – Good Season; – Mortality down 16,000 head to 6,700 head; – Calving up 28,400 head, excluding flood & sale impacts; – Improved weight gain. Market Impacts – Foreign exchange; – Cattle prices; – Cattle valuation reflects change in
Slide 7: First Half 2010 - Profit and Loss
First Half 2010 – Profit and Loss For personal use only Consolidated Summary - Profit and Loss Half Year Half year June 10 June 09 $m $m Revenue 105.0 73.6 Operating expenses (51.6) (57.0) EBITDA 3.9 (23.4) OPBT (16.2) (40.8) Income tax benefit/(expense) 4.0 10.6 NPAT (12.2) (30.3) 7
Slide 8: First Half 2010 - Revenue
First Half 2010 ‐ Revenue For personal use only Trading Conditions Half Year 2010 2009 ($ ) ($m) ($ ) ($m) Live Cattle Gross Sales * 51.5 58.0 Purchases (41.7) (41 7) (24.9) (24 9) Sell/Purchase/freight costs (3.0) (5.5) Inventory movements ** 39.0 (4.8) Cattle Revenue 45.8 22.8 Wholesale Beef Gross
Slide 9: First Half 2010 - Cattle production
First Half 2010 – Cattle production For personal use only First Half First Half Full Year 2010 2009 2009 Opening balance (head) 507,676 590,382 590,382 Natural increase (incl calf accrual) * 50,756 2,337 72,027 Purchases 74,270 32,187 56,320 Cattle losses and rations 6,710 22,799 34,725 Cattle sales
Slide 10: First Half 2010 - Cattle Composition
First Half 2010 – Cattle Composition For personal use only Trading Cattle 284,470 179,205 221,030 188,351 Breeding Cattle (incl calves) 235,143 269,003 216,156 342,954 Herd Bulls 8,713 9,055 11,049 11,576 Feedlot 34,802 34,032 31,784 31,836 Stud Cattle 19,092 16,381 16,689 15,665 Total 582,220 507,6
Slide 11: Financials by Segment
Financials by Segment For personal use only Business Segments Live Cattle Operations Wholesale Boxed Beef 2010 2009 2010 2009 Totals Totals 2010 2009 $m $m $m $m $m $m Continuing strong Wagyu Improved calving and reduced Revenue 47.2 26.6 57.6 48.3 sales growth. 1824 above 104.9 74.9 mortalities LY
Slide 12: Balance Sheet
Balance Sheet For personal use only Balance Sheet Consoldated June 2010 Dec 2009 $m $m Cash & liquid assets 21.6 21 6 18.3 18 3 Inventories 15.4 18.0 Biological assets - Livestock 393.6 353.2 Property, plant and equipment 679.9 681.7 Other assets 9.2 10.8 Total Assets 1119.8 1082.1 Interest bearing
Slide 13: Progress on Strategy
Progress on Strategy For personal use only Opportunity Progress Cattle Trading herd substantially expanded Merchandising Value Added A number of opportunities being reviewed Processing Breeder Alliance Preparation for roll out underway Program Land Holdings Leasing opportunities being reviewed Philo
Slide 14: Investing in Average Daily Growth
Investing in Average Daily Growth For personal use only ADG vs Interest Cost $400,000 $350 000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $‐ $ Interest per 0.3kg 0.5kg 0.65kg 0.8kg day Assumes Trading Herd of 284,470 Assumes fully drawn Debt $355 million Assumes kg value of $1.50
Slide 15: Pricing Opportunity
Pricing Opportunity For personal use only $ Day $450,000 $400,000 Annual Revenues $350 000 $350,000 @0 0.3kg 3kg growth $mln $300,000 $1.50 $ 46.7 $250,000 $1.50 $1.60 $ 49.8 $1.70 $ 53.0 $200 000 $200,000 $1 60 $1.60 $150,000 $1.70 Annual Revenues @ 0.5kg growth $100,000 $mln $50 000 $50,000 $1 50
Slide 16: Improved Branding Rates
Improved Branding Rates For personal use only $mln Branding Rate oPregnancy Testing program $51.0 $ $49.0 F oFocused d on ensuring i greatert $47.0 proportion of breeders deliver $45.0 branded calf $43 0 $43.0 Branding % $41.0 oSegregation of pregnant cattle $39.0 $37 0 $37.0 oBreeder Alliance Progr
Slide 17: AAco Boxed Beef Brands
AAco Boxed Beef Brands For personal use only 17
Slide 18: AAco Property Map
For personal use only AAco Property Map 18
Slide 19: Australian Agricultural Company Limited
For personal use only Australian li Agricultural i l l Company Limited 19
Australian Agricultural Company — H1 2010 Earnings Presentation on 6ix