Corporate presentation October 2017 Managed by: Managed by: - PowerPoint PPT Presentation

Managed by: Corporate presentation October 2017 Managed by:

Managed by: Disclaimer This presentation has been prepared by Rural Funds Management Limited (ACN 077 492 838, AFSL 226 701) (“ RFM ”) as the responsible entity of Rural Funds Group (“ RFF ”). RFF is a stapled security, incorporating Rural Funds Trust (ARSN 112 951 578) and RF Active (ARSN 168 740 805). The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. Please note that, in providing this presentation, RFM has not considered the investment objectives, financial circumstances or particular needs of any particular recipients. This presentation is not, and does not constitute, an offer to sell or the solicitation, invitation or recommendation to purchase any securities and neither this presentation nor anything contained herein shall form the basis of any contract or commitment. In particular, this presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States. This presentation must not be released or distributed in the United States. Any securities described in this presentation have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws. RFM has prepared this presentation based on information available to it at the time of preparation. No representation or warranty is made as to the fairness, accuracy or completeness of the information, opinions and conclusions contained in this presentation or any other information that RFM otherwise provides. To the maximum extent permitted by law, RFM, their related bodies corporate and their officers, employees and advisers are not liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on this presentation or otherwise in connection with it. This presentation includes “forward - looking statements”. These forward -looking statements are based on current views, expectations and beliefs as at the date they are expressed. They involve known and unknown risks, uncertainties and other factors which could cause the actual results, performance or achievements of RFF to be materially different from those expressed or implied by the forward-looking statements. Accordingly, there can be no assurance or guarantee regarding these statements and you must not place undue reliance on these forward-looking statements. RFM and RFF disclaim any responsibility for the accuracy or completeness of any forward-looking statements. Front cover: Cattle on Rewan, Rolleston, QLD, July 2017 2

Managed by: Agenda 1. Portfolio update 2. Portfolio impact 3. Strategy & outlook 4. Appendices 3

1 Managed by: Portfolio update Finishing country on Natal, Qld, Feb 2016

Managed by: Cattle property acquisition RFF has contracted to acquire three contiguous Queensland cattle properties referred to as Natal Key property and lease details Natal is a 390,600 ha aggregation which includes: • Three cattle properties Natal Downs, Longton and • approx. 150,000 ha of underutilised • Property Narellan (“Natal”) in Northern Qld being breeding land suitable for the description purchased from members of the Camm development of additional water points Agricultural Group (CAG) and fencing (stage 1); Purchase $53.0m inc $3.0m stamp duty (settlement • 62,461 ha of high value finishing land of • price expected Dec 17) which 21,270 ha is untimbered and Lessee DA and JF Camm Pty Ltd (Camm) • suitable for future development (stage 2); Lease term 10 years • and Indexation 2.5% p.a. and market review at year five • balance of property marginal breeding • $2.5m for water points and fencing with potential land (fully developed) • Productivity for future additional productivity improvements. A capex fee of $2m is payable to lessee for pre-agreed Stage 1 development aims to improve carrying • development points prior to Dec 18 capacity of underutilised breeding land by 36% Cattle $5.0m cattle financing facility, five year term for • finance Potential for stage 2 development of improved funding trade cattle. Lessee bears operating risks • facility pasture, increased fodder cropping area and Net security position representing greater than two • irrigation years of lease payments $10m loan to enable first mortgage security over • The transaction enables the lessee to reduce • Security two northern Queensland finishing properties debt and facilitate an intergenerational transfer (“NQ”) independently valued in excess of $20m of assets and management First mortgage security covers lease, loan and • cattle financing obligations Financial arrangements provide appropriate • security to RFF and enable the lessee to increase cattle numbers, with the aim of improving operating profitability and asset valuation 5

Managed by: Cattle property acquisition The lessee DA & JF Camm Pty Ltd (Camm), operates an integrated cattle business, the Camm Agricultural Group (CAG) Asset locations Operational overview Nine properties comprised of: three breeding and finishing properties acquired by RFF • (Natal) (A) Locations two finishing properties held as security by RFF (CQ • properties) (B) four other properties operated by Camm including • finishing properties, a cropping property and feedlot (C) Breed and fatten cattle on northern properties • Finish cattle in feedlot on Darling Downs Business • overview Cropping property can supply feedlot • Cattle sold in multiple markets (e.g. processors) • A 24,600 head breeding herd • C Current B 660 bulls • stocking 11,530 backgrounding and feedlot cattle • C Employees approx. 42 permanent plus seasonal/contract staff • C C Revenues approx. $35m (FY16) • Experience owned and operated Natal since 1978 • Natal CQ finishing properties (held as security) Finishing properties, cropping property and feedlot Abattoirs Live export ports 6

Managed by: Cattle property acquisition Development aims to increase carrying capacity and valuation Natal stage 1 development Natal is located 225km south-west of Townsville • * Significant development opportunities identified: • Stage 1: Water points and fencing on • breeding land budgeted for $2.5m (FY18- FY19) with the aim of increasing carrying capacity from 32,400 AE 1 to 44,150 AE Potential stage 2: Pasture improvement, • leucaena and irrigation on high value untimbered finishing land The capital expenditure is expected to provide • 10kms cattle with access to land which is currently unutilised as well as allowing the operator to better manage pastures One of the key determinants of cattle property • valuations is carrying capacity. The stage 1 development aims to increase carrying capacity by Image shows Longton development only, one of the three properties comprising Natal. Circles represent 3km radius 36%, with the potential for further increases from additional development Proposed additional water Proposed additional Increases in value are monetised at rent review points fencing • Existing water points Existing fencing Existing bores and troughs Note: 1. Adult Equivalent. Cattle properties are analysed and valued with reference to AE, much like other farms are analysed on a per hectare basis (an AE is defined as a 450kg Bos Taurus steer at maintenance) 7

2 Managed by: Portfolio impact Mooral, Hillston NSW Dec 2016

Managed by: Rural Funds Group (ASX:RFF) RFF adjusted total assets are $660m on a pro forma basis following Camm transaction Key information Weighted average lease expiry profile 3 Pro forma 1 30 June 2017 30 June 2017 Adjusted total assets 2 $587.5m $660.0m Adjusted net assets 2 $402.2m $402.2m Adjusted NAV per unit 2 $1.58 $1.58 Market capitalisation $470.6m 5 $534.2m 6 Number of properties 35 38 Number of agricultural sectors 6 6 Weighted avg lease expiry (WALE) 3 13.2 years 13.0 years Gearing 4 28.5% 36.4% AFFO per unit (FY18 forecast) 12.5 cents 12.7 cents Distributions per unit (FY18 f’cast ) 10.03 cents 10.03 cents Payout ratio 80% 79% Distribution payment frequency Quarterly Quarterly Forecast distribution yield 6 4.8% 4.8% FY18 forecast distribution growth 4% 4% Notes: 1 Pro forma for the Camm transaction, refer to slide 19 2 Adjusted assets incorporates most recent independent property valuations, inclusive of water entitlements 3 Lease expiries weighted by forecast FY18 rental income, expressed in years from 30 June 2017 4 Gearing calculated as external borrowings/adjusted total assets 5 Calculated using 30 June 2017 closing price of $1.85 9 6 Calculated using 20 October 2017 closing price of $2.10

Managed by: Portfolio assets and lessees Assets leased across six sectors and with a combined WALE of 13 yrs Notes: Shaded areas denote different climatic zones. Source: Bureau of Meteorology (BOM) • Valuations as at 30 June 2017 with water entitlements held at fair value • Plant and equipment rental of $1.8m not included in the above forecast rent. Plant and equipment assets held by RF Active of $5.1m at 30 June 2017 • 10 Forecasts rents subject to assumptions on timing of capex where applicable •