Ridley Corporation Limited · ASX:RIC
Ridley — Octa Phillip Agribusiness Conference 2012
32 slides from Ridley's conference presentation, Mar 28, 2012
Slide 1: Octa Phillip Agribusiness Conference
Ridley RidleyCorporation Corporation For personal use only Octa Phillip Agribusiness Conference 28 March 2012 1
Slide 2: Ridley's Strategy
Ridley’s Strategy For personal use only Ridley Corporation (RIC) • Value is not adequately reflected in the current share price - Ridley’s parts are worth more than the whole • Realisation of surplus property development opportunities • Proactive rather than reactive Cheetham Salt Ridley AgriProduct
Slide 3: Cheetham Strategy next 3 years
Cheetham Strategy next 3 years For personal use only Refineries Markets Export Market Refinery Salt Fields growth in Japan Automation and Asia LEAN Growth in Indonesia Manufacturing Current Salt Cost Environment normalisations Recovery in hide and stockfeed Salt Field efficiency sectors Indonesian s
Slide 4: Salt costs will fall significantly post floods
Salt costs will fall significantly post floods For personal use only 600 1. Rockhampton Rainfall – 20 year peaks 2. Port Alma Rainfall (mm) 2010/2011 Average 500 400 300 200 100 0 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 60 4. Port Alma Salt Costs per tonne 55 200 3. Port Alma Effective Evapo
Slide 5: Why pursue a transaction for Cheetham?
Why pursue a transaction for Cheetham? For personal use only 1. Cheetham is fundamentally undervalued by the sharemarket Strong and relatively stable cash yields for an agricultural investment Near term upsides from a return to more normal salt costs Value enhancement from refinery automation
Slide 6: AgriProducts Strategy
AgriProducts Strategy For personal use only Consolidation Organic Organic Current New Dairy Mill Consolidation opportunities Completion by December 2012 in Queensland, NSW and Environment Victoria across all market Supplements turnaround segments • LNT Acquisition post LNT acquisition, sale of Wacol
Slide 7: What has sidetracked AgriProducts' growth
What has sidetracked AgriProducts’ growth For personal use only FY2009 FY2011 FY2010 FY2012 7 7
Slide 8: How AgriProducts growth gets back on track
How AgriProducts growth gets back on track For personal use only The FY12 outlook is, as the market recognises, for lower than normal returns. These cyclical lower returns mask however the near term earnings accretion expected from: A return to non-record pasture growth conditions and more traditi
Slide 9: Property Status
Property Status For personal use only Dry Creek value exists, although long Moolap and Lara salt fields near term contractual obligations to Penrice Geelong also offer significant potential Preliminary feasibilities based on Preliminary feasibilities based on draft master plans are encouragi
Slide 10: Total Shareholder Return
Total Shareholder Return From 6 May 2008 (day prior to announcement of outcomes of strategic review) For personal use only $1.80 42 $1.60 % $1.40 9% $1.20 - $1.00 10 % - $0.80 16 % $0.60 $0.40 Ridley TSR Ridley Share Price Source: IRESS $0.20 ASX 200 Accum. Index (based to Ridley) Small Ords Accum.
Slide 11: Why invest in Ridley
Why invest in Ridley For personal use only Ridley Corporation Sum-of-the-parts worth more than the whole Strong conversion of operating result to cash High yielding, fully franked dividends Total Shareholder Returns stronger than the average in the market Significant organic and inorganic
Slide 12: Financial Appendices
Financial Appendices For personal use only Half Year Results Annual Financial History 1. Profit and Loss 1. Profit and Loss (Result from Operations) 2. Balance Sheet 2. Segment Earnings 3. Cash flow 3. Balance 4. Financial Ratios 4. Cash flow – Receipts and Payments 5. Ridley AgriProducts Financial
Slide 13: Half Year Financial Highlights
Half Year Financial Highlights For personal use only Consolidated 1H 1H 1H Group EBIT of $20.9m, up $0.3m Result FY10 FY11 FY12 AgriProducts result of $14.9m, up Sales Revenue 381.8 373.6 378.3 $2.1m with Camilleri contribution meeting acquisition metrics EBIT - AgriProducts 14.1 12.8 14.9 Che
Slide 14: Half Year Balance Sheet
Half Year Balance Sheet For personal use only Balance Sheet in $m 1H 1H 1H FY10 FY11 FY12 Current Assets at 31/12/11 includes assets held for sale of $5.3m Total Current Assets 186.2 190.9 206.1 formerly in P,P&E & prior year tax receivable of $2.3m Total Current Liabilities 112.2 112.4 100.0 Net
Slide 15: Half Year Cash flow
Half Year Cash flow For personal use only Consolidated 1H 1H 1H Consistent EBITDA performance FY10 FY11 FY12 Working capital - $11.9m impact of EBITDA (inc JV NPAT’s) 29.3 27.8 27.7 transition to new facility Working capital (3.5) (5.8) (14.7) All dividends paid at 3.75c per share, movement w
Slide 16: Half Year Financial Ratios
Half Year Financial Ratios For personal use only Consolidated Result 1H 1H 1H Debt and cash flow KPI’s FY10 FY11 FY12 impacted by temporary increase in working capital to transition to Net Debt 78.4 75.8 120.0 new trade payables facility Equity 281.5 288.9 291.2 Gearing increased to 41.2% Total
Slide 17: Ridley AgriProducts Half Year Summary
Ridley AgriProducts Half Year Summary For personal use only Ridley AgriProducts 1H 1H 1H Operations - 1H FY12 result FY10 FY11 FY12 bolstered by Camilleri contribution Sales ($) 324.9 318.5 322.3 Capex - $4.1m maintained within DA of $4.3m with new Pakenham EBIT 13.7 12.8 14.9 mill activity to r
Slide 18: AgriProducts Sector Summary
AgriProducts Sector Summary For personal use only Sector 1H 1H 1H Outlook Poultry: plateau of volume growth from long FY10 FY11 FY12 term customer contracts; half year impacted (kt) (kt) (kt) by temporary reduction in industry bird numbers Poultry 371 459 466 Aqua-feed: expansion into new market
Slide 19: Cheetham Salt Half Year Summary
Cheetham Salt Half Year Summary For personal use only Cheetham Salt 1H 1H 1H Operations - EBIT result before FY10 FY11 FY12 JV’s of $6.5m, down $1.3m on Sales ($) 56.9 55.2 56.0 prior period due to higher salt & logistics costs EBIT (excl. JV NPAT) 9.5 7.8 6.5 Depreciation & Amortisation (DA) 2.1
Slide 20: Cheetham Salt Sector Summary
Cheetham Salt Sector Summary For personal use only Sector 1H 1H 1H Outlook Soda Ash: continuing low volumes FY10 FY11 FY12 dependent upon demand from Penrice (kt) (kt) (kt) Chemical: reduction due to plant Soda Ash 290 260 261 maintenance shut down at major customer Food: remains flat with red
Slide 21: Profit & Loss (result from operations)
Profit & Loss (result from operations) For personal use only Profit & Loss 2008 2009 2010 2011 AgriProducts EBIT 15.0 24.4 29.0 24.9 Cheetham Salt EBIT (before JV’s) 17.9 12.9 16.8 14.2 Cheetham Salt JV’s NPAT 6.9 7.1 7.2 7.0 Corporate Costs (7.6) (6.8) (6.8) (6.2) Result from Operations 32.2 37.6 4
Slide 22: Segment Earnings
Segment Earnings For personal use only 2008 2009 2010 2011 Contribution to Earnings EBIT Ridley AgriProducts 15.0 24.4 29.0 24.9 Cheetham Salt 17.9 12.9 16.8 14.2 Salt JVs Cheetham Salt JVs 10.3 10.2 10.5 10.3 21% Corporate Costs (7.6) (6.8) (6.8) (6.2) EBIT 35.6 40.7 49.5 43.2 Agriproducts Cheetham
Slide 23: Balance Sheet
Balance Sheet For personal use only Balance Sheet 2008 2009 2010 2011 Total Current Assets 207.2 173.6 179.6 193.7 Total Current Liabilities 120.2 121.1 117.1 109.4 Net Current Assets 87.0 52.5 62.5 84.3 Property, plant & equipment 256.7 224.8 225.2 233.4 Investments 44.2 44.2 50.3 52.5 Intangibles
Slide 24: Cashflow – Receipts and Payments
Cashflow – Receipts and Payments For personal use only Cashflow 2008 2009 2010 2011 Receipts 902.4 922.5 804.3 813.4 Payments (894.5) (864.4) (754.9) (769.6) Salt Joint Venture distributions 7.4 7.6 5.4 4.9 Net interest paid (14.1) (13.2) (8.6) (9.1) Tax payments received / (made) (2.1) 0.5 (6.8) (4
Slide 25: Cashflow – from EBITDA
Cashflow – from EBITDA For personal use only Cash flow in $m FY10 FY11 Cash flow in $m FY10 FY11 EBITDA - Agriproducts 36.6 33.5 Cash flow before acquisition (2.9) 2.6 EBITDA – Cheetam before salt JVs 21.3 19.9 Camilleri acquisition - (32.7) Cheetham Salt Joint Venture NPAT 7.2 7.0 Net Cashflow (2.9
Slide 26: Financial Ratios
Financial Ratios For personal use only 2009 2010 2011 Cash 0.3 7.0 13.2 Current Borrowings (2.0) (2.1) (1.9) Non Current Borrowings (67.4) (76.9) (113.4) Net Debt 69.1 72.0 102.1 Equity 276.2 285.2 291.0 Gearing (Net Debt / Equity) 25.0% 25.2% 35.1% EBITDA* 52.4 62.4 58.2 EBIT* 40.7 49.5 43.2 Net In
Slide 27: Cheetham Financial Summary
Cheetham Financial Summary For personal use only Cheetham (A$m) FY10 FY11 Sales revenue maintained despite 10.5% volume decrease Sales ($) 107.9 107.3 EBIT (excl. JV NPAT) 16.8 14.2 EBIT result before JV’s of $14.2m, down Depreciation 4.5 5.6 $2.6m on FY10 EBITDA (excl. JVs) 21.3 19.8 Higher d
Slide 28: AgriProducts Financial Summary
AgriProducts Financial Summary For personal use only Agriproducts ($m) FY10 FY11 EBIT result of $24.9m, affected by adverse weather conditions with Sales ($) 620.0 616.4 estimated impact of $3m in Dairy, EBIT # 29.0 24.9 $2m in Supplements, and $6.6m in total Add back dep’n & amort’n 7.6 8.6 Res
Slide 29: Segment Summary
Segment Summary For personal use only Segment 2008 2009 2010 2011 Tonnes (kt) 1,610 1,573 1,570 1,593 EBIT 15.0 24.4 29.0 24.9 Depreciation 7.6 6.5 7.6 8.6 EBITDA 22.6 30.9 36.6 33.5 EBITDA/tonne $14.04 $19.64 $23.31 $21.03 Funds Employed 156.8 129.9 135.7 167.4 ROFE 9.6% 18.8% 21.4% 14.9% Tonnes (k
Slide 30: Cheetham strategy of the last years setting the footprint for future growth
Cheetham strategy of the last 4 years setting the footprint for future growth For personal use only Management Salt Fields People Refineries ERP Starting Closed Corio Reopened Port Systems Alma Position Upgraded Sea LEAN Bajool Field Manufacturing Lake Investment Challenges Strong market (Phase 1) p
Slide 31: Appendix - Overview of the NDVI
Appendix - Overview of the NDVI For personal use only Bureau of Meteorology’s Normalised Difference Vegetation Index (NDVI) The Normalised Difference Vegetation Index (NDVI) grids and maps are derived from satellite data. The data provides an overview of the status and dynamics of vegetation across
Slide 32: Ridley Corporation
Ridley Corporation For personal use only We feed the food that ends up on your plate Premium Solar Salt Ridley transformed and now a compelling proposition