Elders Limited · ASX:ELD
Elders — Shaw and Partners Investor Days 2022
37 slides from Elders's conference presentation, Jun 1, 2022
Slide 1: Elders Limited Investor Presentation
1 June 2022 For personal use only Elders Limited Investor Presentation Attached is a presentation to be given today, 1 June 2022, by Elders to investors hosted by Shaw and Partners. Further Information: Mark Allison, Managing Director & Chief Executive Officer, 0439 030 905 Authorised by: Peter Hast
Slide 2: Shaw & Partners Investor Days
For personal use only Shaw & Partners Investor Days 1 to 2 June 2022 Presented by Elders Limited
Slide 3: Disclaimer and Important Information
DISCLAIMER AND IMPORTANT INFORMATION For personal use only The material in this presentation has been prepared by Elders Limited and is general background about Elders' activities and performance at the date of this presentation. The information is in summary form, does not purport to be complete, a
Slide 4: Elders Executive Committee Overview
Elders Executive Committee Overview For personal use only Presenting today Mark Allison Managing Director & CEO Tania Foster Liz Ryan Dave Adamson Tom Russo Viv Da Ros CFO EGM Strategy & EGM Agency & EGM Real CIO Retail Financial Estate, Brand & Services Communications Peter Hastings Malcolm Hunt Ol
Slide 5: Agenda
For personal use only Agenda Business overview Mark Allison 2:00 pm – 3:00 pm Tania Foster Afternoon Tea 3:00 pm – 3:30 pm Rural Products Liz Ryan 3:30 pm – 4:00 pm overview Agency Services Dave 4:00 pm – 4:30 pm overview Adamson Real Estate Services Tom Russo 4:30 pm – 5:00 pm overview SysMod Viv D
Slide 6: Business Model
Business Model1 Diversification by product, service, market segment and geography For personal use only RURAL PRODUCTS FEED & DIGITAL AND REAL ESTATE FINANCIAL AGENCY SERVICES PROCESSING TECHNICAL WHOLESALE SERVICES SERVICES RETAIL PRODUCTS SERVICES SERVICES PRODUCTS Fee for Service Rural Products R
Slide 7: Eight Point Plan
EIGHT POINT PLN For personal use only Compelling shareholder returns Industry leading sustainability outcomes Most trusted Agribusiness brand OUR 2023 5-10% EBIT and EPS growth through the cycles across health and safety, community, environment in rural and regional Australia AMBITION at 15% ROC and
Slide 8: 1H22 Highlights
For personal use only 1H22 Highlights PEOPLE CUSTOMERS COMMUNITY SHAREHOLDERS 12.6 #1 $0.3m 58.3 cents TRIFR1 most trusted to RFDS over renewed underlying earnings agribusiness brand three-year sponsorship per share 78% employee 48 $1.1m 28.0 cents engagement net promoter sponsorships and dividends
Slide 9: Safety, Health & Well-Being
Safety, Health & Well-Being 1 For personal use only Lost time injuries (LTI) lost time injury in 1H22 9 10% compound reduction in 5 TRIFR since FY18 Average 3 2 1 FY18 FY19 FY20 FY21 1H22 100% branch risk radar2 Total recordable injuries frequency rate completed during Krystal Bowden Safety Week SAL
Slide 10: Sustainability
Sustainability For personal use only OUR PRINCIPLES CLIMATE TARGETS1 OUR PROGRESS We provide our customers and clients Targets set to reduce our Scope 1 and 2 Targeting solar and LED lighting site with the goods and services they need greenhouse gas emissions: upgrades to reduce emissions We s
Slide 11: Investor Perspective
Investor Perspective Success of the Eight Point Plan strategy continues to be reflected in our share price growth For personal use only Historical share price growth (monthly), Elders and selected peers – indexed to January 2014* (CY14-22) Percent Year Notes: • Indexed to 27/07/15 for Costa Group, 0
Slide 12: For personal use only
For personal use only 11
Slide 13: 1H22 Financial Performance: Summary
Ready 1H22 Financial Performance: Summary Strong performance across our key metrics For personal use only Key metrics ($m) 1H22 1H21 Var % Sales revenue 1,514.8 1,100.5 414.3 38% Gross margin 326.5 241.6 84.9 35% Costs 193.6 167.8 25.8 15% Earnings before interest and tax 132.8 73.8 59.0 80%
Slide 14: 1H22 Financial Performance: Summary
1H22 Financial Performance: Summary Consistent 1H growth over the last five years For personal use only Sales Revenue ($m) EBIT ($m) 2H 2H 2,549 167 1H 1H 2,093 133 121 1,599 1,626 1,448 93 1,515 1,192 75 74 68 850 893 29 +19.2% 40 +30.5% 1,101 74 750 733 900 53 46 34 FY18 FY19 FY20 FY21 1H22 FY18 F
Slide 15: 1H22 Financial Performance: Gross Margin Growth
1H22 Financial Performance: Gross Margin Growth Steady contribution from acquisition, organic growth and market For personal use only organic growth: market share RURAL Acq Organic Growth Market movements and margin PRODUCTS $10.5m $38.4m $36.0m improvement (+1.2%) market growth: based on ABARES
Slide 16: 1H22 Financial Performance: Gross Margin
Ready 1H22 Financial Performance: Gross Margin A diversified business model across product categories For personal use only +11.1% Total Gross Margin +62.0% 327 82.2 242 79.2 74.0 1H21 1H22 1H21 48.9 +29.0% 1H22 +37.6% 37.8 +102.4% 33.3 +13.7% +54.6% 29.3 +22.4% 25.1 24.2 23.3 20.1 20.5 +54.2% 16.4
Slide 17: 1H22 Financial Performance: Geography
1H22 Financial Performance: Geography Strong growth across all geographies, with diversification of our EBIT reducing risk For personal use only Western Australia 20.6% Queensland & 10.9% Northern Territory +24.3% +100.0% 31 16 25 8 1H21 1H22 1H21 1H22 South Australia New South Wales 16.7% 18.6% +51
Slide 18: 1H22 Financial Performance: Cash Flow
1H22 Financial Performance: Cash Flow Growth in debtors and inventory consistent with sales growth and higher commodity prices For personal use only Operating cash flow ($m) Cash conversion (%)2 187.0 -97% 0.7 32.7 36% 132.8 20.8 (149.6) -61% (38.7) 1H21 1H22 (218.5) (55.4) 164.4 Working Capital to
Slide 19: 1H22 Dividend & Capital Management
1H22 Dividend & Capital Management Earnings and dividends per share continue to grow For personal use only Underlying Earnings per Share (cents) Dividends per Share (cents) Underlying tax expense recognised from 1 October 2021 42 impacting earnings per share Full year 97 2H 1H 1H 22 28 70 22 55 58 5
Slide 20: Rural Products
For personal use only Rural Products 19
Slide 21: Rural Products Overview
Rural Products Overview For personal use only RURAL PRODUCTS Key highlights WHOLESALE • Continuing to fill geographical gaps through targeted RETAIL PRODUCTS PRODUCTS Filling acquisitions geographic • Key recent additions in H1 2022 include: Grovers Rural gaps Supplies (VIC), Esperance Rural Supplie
Slide 22: Rural Products
Rural Products Gross margin improving year on year via our backward integration strategy For personal use only Sales Revenue ($m) Gross margin ($m) vs (%) +360 +43% +62 1,205 +53% 179 846 117 13.8% 14.8% 1H21 1H22 1H21 1H22 Elders own brand vs third party sales1 (%) 1H22 gross margin by category (%)
Slide 23: Outlook
Outlook Acquisition benefits, supported by positive winter crop outlook For personal use only Positive winter crop outlook, with area planted forecast to rise 3% to 23.4 million hectares, Cropping expected to drive strong Area planted to winter crop (‘000 ha) demand in the second half for +3.1% cr
Slide 24: Agency Services
For personal use only Agency Services 23
Slide 25: Agency Services Overview
Agency Services Overview For personal use only Key highlights AGENCY SERVICES • Our scale is a key point of differentiation National • Our ancillary services (livestock production advice, footprint financing, LIT) further supports our value proposition supporting our value • Recent acquisitions supp
Slide 26: 1H22 Performance
1H22 Performance Cattle and sheep volumes down as a consequence of restocking For personal use only Cattle Volumes (million) Sheep Volumes (million) 2H 2H 1H 1H 1.8 9.9 9.6 1.7 9.5 9.4 1.5 1.6 0.9 4.4 3.9 3.8 3.9 0.9 0.8 0.8 5.2 -1.6% 0.7 -1.5% 5.5 5.6 5.8 5.4 0.7 0.8 0.9 0.8 FY18 FY19 FY20 FY21 FY2
Slide 27: 1H22 Performance (cont.)
1H22 Performance (cont.) Market conditions support growth in restocking finance For personal use only StockCo book1 and On Balance Sheet Livestock Livestock in Transit Delivery Warranty Funding balance ($m) 2H Gross margin ($m) StockCo 1H 7.8 158.4 6.9 Livestock Funding +21.9% 121.7 3.6 2.9 5.2 93.1
Slide 28: Outlook
Outlook Decline in cattle price as rebuild continues, however remains historically high For personal use only Beef & Veal Sheep Wool Average saleyard prices (c/kg) Average saleyard prices (c/kg) Eastern Market Indicator (c/kg) +1.8% +6.0% +18.0% 789 -9.0% 910 +2.0% 1,663 +19.7% 693 718 810 893 1,194
Slide 29: Real Estate Services
For personal use only Real Estate Services 28
Slide 30: Real Estate Services Overview
Real Estate Services Overview For personal use only Key highlights REAL ESTATE SERVICES • Continuing to maintain our position as a dominant player in regional residential, lifestyle and farmland real estate markets. We have created a strong attraction and retention Partner of proposition and leverag
Slide 31: 1H22 Performance
1H22 Performance Strong demand for farmland and residential property For personal use only Farmland Sales ($m) Residential Sales ($b) 2H 1,597 2H 1,457 1H 1,496 1H 1,263 1,117 811 773 1,048 543 867 873 710 727 579 615 452 +33.6% 350 364 786 +24.7% 720 684 470 502 361 363 415 FY18 FY19 FY20 FY21 FY22
Slide 32: Outlook
Outlook For personal use only Farmland Residential Strong demand for farmland real estate expected to continue due to Whole of market listing the favourable seasonal conditions and favourable commodity prices levels remain at historical for agriculture production in Australia lows, however recent da
Slide 33: Systems Modernisation Transformation
For personal use only Systems Modernisation Transformation 32
Slide 34: Systems Modernisation Transformation
Systems Modernisation Transformation For personal use only Wave 1 (current) Waves 2 – 5 Workday Workday Performance Advanced Core HCM & Recruiting Learning Absence Time Tracking Talent Management Compensation Compensation Management Management Management Dynamics 365 Procure to Pay Commerce & e- Dyn
Slide 35: For personal use only
For personal use only 34
Slide 36: Closing Summary
Ready Closing Summary For personal use only Strong financial performance in 1H22 expected to continue in 2H22, with full year EBIT guidance in the range of 30 to 40% above FY21 underlying EBIT and a target of 90% cash conversion Supply chain challenges have been mitigated by holding higher inventory
Slide 37: For personal use only
For personal use only