Analyst Presentation CSR Sugar - July 2008 Insert pictures AGENDA Thursday 31 July 2008 � Welcome & Introduction Jerry Maycock, Managing Director, CSR � Sugar Overview Ian Glasson, CEO CSR Sugar � Cogeneration Shayne Rutherford, (Acting) CFO and GM New Business Development, CSR Sugar Friday 1 August 2008 � Refining Australia/NZ Tim Hart – CEO Sugar Australia � Ethanol Garry Mulvay, Marketing Manager, CSR Ethanol 2 1
SUGAR – PART OF CSR’S DIVERSIFIED PORTFOLIO Revenue by business $3.2bn YEM 08 � CSR is Australia’s leading sugar business and a significant player in Property 1% world terms Aluminium 17% � Sugar is part of CSR’s diversified Sugar portfolio of businesses which 39% reduces overall earnings volatility for shareholders � CSR participates right across the Building Products 43% value chain in Sugar: � Raw Sugar Milling EBIT by business $386m YEM 08 � Refining Property Sugar 11% 18% � Renewables (Ethanol & Cogeneration) � CSR has strong, market leading Aluminium 34% positions in these segments to leverage for growth Building Products 3 37% CSR - POSITIONING FOR GROWTH IN SUGAR � Maintain leading market positions Strong market position – Capital upgrade of mills to improve reliability and sugar recovery – Upgrade of refining assets to enhance customer proposition + � Continue to build more reliable earnings base – Continued growth in earnings from refining and renewables – Support initiatives to promote industry restructuring Increased recurring – Hedging activities to lock in higher prices and reduce volatility earnings + � Market fundamentals are positive for sugar – Positive trend for long term sugar price based on rising marginal cost of production in Brazil Positive industry trends – Carbon constrained economy provides further opportunities for renewable energy + � Significant opportunities to expand across sugar portfolio Significant expansion – Additional scope to expand fuel ethanol production opportunities – Significant opportunity to expand cogeneration business – Maintain option for international expansion = CSR well positioned to create additional value from Sugar 4 2
Sugar Overview Ian Glasson Insert pictures CSR – ONE OF THE WORLD’S LEADING SUGAR PRODUCERS 6 th largest sugar producer in the world � World sugar producers 2006/07 millions tonnes raw sugar equivalent (incl. Ethanol from cane) – YEM08 revenue, $1.3 billion Nordzucker recently 6 – YEM08 EBIT, $72 million announced the 5 � acquisition of Danisco Sugar milling 4 3 – 7 mills in Northern Queensland 2 – Produce 40% of all Australian raw 1 sugar (~2.1m tonnes pa) 0 Danisco Sudzucker CSR Tereos � Sugar refining (Denmark) (Germany) (France) Mitr Pohl Nordzucker Cosan ABF – Sugar Australia (CSR = 75%), 2 (Thailand) (Germany) (Brazil) (UK) refineries, ~750 kt pa – New Zealand Sugar Company (CSR = 75%), 1 refinery, ~200kt pa � Renewables Sugar Mill Sugar Refinery – Second largest ethanol supplier in Ethanol Distillery Australia with total capacity 60 million Distribution Depot litres per year - 38 million litres of fuel grade ethanol capacity – Australia’s largest renewable energy generator from biomass 6 Source: Annual Reports, FO Licht, CSR Analysis 3
CSR PARTICIPATES RIGHT ACROSS THE SUGAR VALUE CHAIN Growing Harvesting Milling Logistics Marketing Refining � 7 Farms in � 2 harvesting � 7 mills � Industry � Marketing � Sugar Burdekin groups owned port Agreement Australia (75% � 14Mt cane region terminals (STL) with QSL CSR) � 260 kt cane pa � 2.1Mt sugar � 1,894 ha � New Zealand � 40% of Sugar (75% � 200 kt cane Australian CSR) production � 3 Refineries � 950kt sugar Molasses Cogen Ethanol � 450 kt � 175MW molasses generation � 130kt to Fertiliser across 7 mills Ethanol � 100MW export � 140kt to capacity � 290Ml domestic fertiliser market � 60Ml ethanol � 180kt CSR participation exported 7 Third Party supply CSR IS CREATING A MORE STABLE EARNINGS BASE THROUGH REFINING AND RENEWABLES � Underlying trend in raw sugar price is positive, 160 160 based on world sugar 140 140 and ethanol demand, 120 120 and increasing marginal 100 100 cost of production in EBIT, A$M Brazil 80 80 Raw Sugar � CSR continues to 60 60 upgrade mills and Renewables (Ethanol & Cogen) 40 40 refining assets to 20 20 sustain competitive Refining market position 0 0 YEM02 YEM03 YEM04 YEM05 YEM06 YEM07 YEM08 � CSR supports initiatives � Overall, CSR is building a more stable enabling growers to manage their own price earnings base in Sugar, maintaining risk, and a ‘single export options for international growth at right time desk’ to minimise cost to market 8 4
CSR HAS A STRONG MARKET POSITION IN AUSTRALIAN RAW SUGAR MILLING � CSR is Australia’s largest sugar milling group producing 40% of national raw sugar production � CSR milling assets are located in the prime cane growing agricultural areas of Australia (Burdekin and Herbert) Sugar Millers in Australia, % raw sugar produced Others Bundaberg NSW Sugar Mackay CSR CSR estimates, 2007 season 9 CSR SUGAR MILLS IDEALLY LOCATED BY CLIMATE AND CLOSE TO PORTS Herbert Region, 2 Mills: • Victoria ~ (3.1 million tonnes crushed per annum) • Macknade ~ (1.5m/t pa) Herbert Burdekin Burdekin Region, 4 Mills • Invicta ~ (3.1 m/t pa) Plane Creek • Pioneer ~ (1.7m/t pa) • Inkerman ~ (1.8 m/t pa) • Kalamia ~ (1.5 m/t pa) Plane Creek Region, 1 Mill • Plane Creek ~ (1.3 m/t pa) 10 5
CSR HAS A STRONG TECHNICAL CAPABILITY IN RAW SUGAR Raw Sugar production at competitive cost levels � Agriculture and Varieties – BKN region - 15.0% CCS (commercial cane sugar) and 115 tonnes of cane per hectare � High labour productivity – 100% mechanised farming – High levels of automation – for example for a 25,500 TCD sugar mill: – 215 employees including management, maintenance, operations and cane transport – 15 personnel per shift for mill operations including all plant operators trades, laboratory, cane payment and cleaners, 16 personnel per shift for cane transport � High technology in cogeneration – 68MW generation from a 13,000 TCD plant � Excellent sugar and cane transport logistics – Extensive (1,250 km track length) cane railway network – Proximity to port facilities 11 MILLS CAPITAL UPGRADE PROGRAM TO SUSTAIN COMPETITIVE MARKET POSITION � Now in second year of three-year program to upgrade critical equipment, Capital (SIB) and Maintenance improve cost position and 150 increase sugar recovery � YEM 09 expenditure is targeted on further 100 improving critical plant $M (boilers, cane transport etc) � 50 Program will ensure CSR maintains its competitive position in the global raw sugar market 0 YEM04 YEM05 YEM06 YEM07 YEM08 YEM09 YEM10 YEM11 YEM12 YEM13 � Capital program returns to ‘average’ level from YEM10 12 6
FUNDAMENTALS SUPPORT SUGAR PRICE RECOVERY � Significant surplus still overhangs ICE#11 raw sugar price market short term, but moving back 600 22 towards balance in 08/09 550 20 � High oil price encourages demand for 500 18 A$ per tonne actual Brazilian fuel ethanol which tightens 450 16 USc per pound sugar supply 400 14 350 12 � Significant increases in Brazilian cost 300 10 of production since last year due to 250 8 increase in fertiliser/labour costs 200 6 supports medium term price growth - 150 4 prices were below Brazilian cash cost Dec-01 Jun-02 Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 of production estimated at US 12- 13c/lb at current exchange rates Source: Bloomberg � Short term price driven by speculative investment on top of the fundamentals 13 AVERAGE REALISED SUGAR PRICE The average realised A$ sugar price is based Realised raw sugar price on the following components: A$ per tonne IPS ICE#11 sugar price (US c/lb 1 ) 400 354 Far east premiums 2 (US c/lb) PLUS 350 316 300 300 Queensland Sugar Limited (QSL) 255 LESS marketing, storage and shipping A$ per tonne IPS 250 229 costs (A$/t) 200 Average realised price to CSR (A$ EQUALS per tonne IPS 3 ) 150 100 Currently the differential between the ICE#11 50 price and CSR’s realised price is -$A20p/t 4 0 YEM04 YEM05 YEM06 YEM07 YEM08 1: ICE#11 contract is based on raw sugar of 96 degrees pol 2: Far east premium is affected by freight rates and currency movements 3: Tonne IPS = equivalent tonnes of sugar at 96 pol, converted using standardised procedures incorporating the International Pol Scale (IPS) 4. Dependant on freight, foreign exchange and regional competition 14 7
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