IGNIFICANT I I TEMS TEMS INTR INTRODUCTION ODUCTION AGRIPR - PowerPoint PPT Presentation

R IDLEY C ORPORATION FY2009 R ESULTS P RESENTATION INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PR PROPER OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK

A GENDA INTRODUCTION INTR ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PR PROPER OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK I NTRODUCTION A GRIPRODUCTS C HEETHAM S ALT P ROPERTY F INANCIALS O UTLOOK 2

F INANCIAL H IGHLIGHTS INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PROPER PR OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK  Group NPAT from continuing operations of Continuing Op’s 2009n Adj 2009 $20.3m Sales Revenue 819.4 - 819.4  Continuing normalised NPAT of $28.1m EBIT - Agriproducts 1 26.4 2.0 24.4  Record EBIT result for Agriproducts of EBIT - Cheetham 2 17.7 4.8 12.9 $24.4m Salt Joint Ventures 7.1 - 7.1  Reduction in borrowings to $69.1m Corporate Costs (6.8) - (6.8) following sale of Ridley Inc Result from Operations 44.4 6.8 37.6 3 Net Finance Expense (8.0) 4.4 (12.4)  Significant reduction in working capital 4 Tax Exp. excl sig. items (8.3) (3.4) (4.9)  Operating cash flow before dividends Net Profit pre sig. items 28.1 7.8 20.3 received, interest and tax of $58.1m  Annual dividend of 7c per share maintained Notes: 1. Agriproducts normalised for full year benefit of cost savings 2. Cheetham normalised for crude salt write off and ERP 3. Interest normalised for reduced net debt balance over full year (post sale of Ridley Inc.) 4. Tax on adjustments of 30% 3

O PERATIONAL H IGHLIGHTS INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PROPER PR OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK  Sale of Ridley Inc  Debt reduction and extension of banking facilities  Restructuring of Australian businesses  Consolidation of Corporate, Agriproducts and Cheetham offices in Melbourne  Improvement of Agriproducts  Progression of land development opportunities  Significant cost reduction  Cheetham impacted by some large unusual costs but well positioned for growth  New ERP implemented in Cheetham and underway in Agriproducts 4

R IDLEY A GRIPRODUCTS R ESULTS P RESENTATION INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PR PROPER OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK

H IGHLIGHTS INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PR PROPER OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK  Record EBIT result of $24.4m normalised to $26.4m is sustainable and the business is well positioned for further growth  Sales of Wondai, Rockhampton, Pills and Atherton JV, closure of Colac, Northam and Toowoomba Admin and mothballing of Clifton mill  Number of feed mills now 17, plus 2 supplements plants, an aquafeed plant and an investment in 2 liquid feed plants  Organisational Restructuring: 140 (20%) less staff since April 2008 (now 549)  Annualised cost reductions of ~$5.0m (~$3.0m embedded in FY09 results)  Centralised sales, procurement, nutrition and supply chain functions within the new Melbourne head office 6

S ALES V OLUMES INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PR PROPER OPERTY TY FINANCIALS FIN ANCIALS OUTL OUTLOOK OOK Poultry: growth from Inghams relationship, growth of Species (kt) 2009 2008  second tier independent broiler processors, market Poultry 746 678 growth of chicken consumption and growth in niche turkey, layer and duck market sectors Pig 332 375 Dairy 293 323  Pig: increased imports of further processed pig meat and Australia reverting to a predominantly fresh market Aqua 37 29 Beef 37 76  Dairy: dramatic fall in global and farm gate milk price Horse 32 37  Aquafeed: market growth and growth in market share Supplements 24 30  Beef: sales of Rockhampton and Wondai mills and Sheep 11 8 Atherton JV as well as depressed market generally Other 61 54  Horse: a slight decline in demand from economic Total Tonnes 1,573 1,610 environment and reasonably good pasture conditions  Supplements: favourable pasture growing conditions in Queensland. Whilst still underperforming we continue to believe in the long term future of this business as the prices of grazing lands increase, bringing more pressure to obtain higher meat yields per hectare  Sheep: volumes up slightly, reflecting the growing market 7

P ROFIT AND L OSS INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PROPER PR OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK Profit & Loss 2009n 2009 2008  Record EBIT result of $24.4m is sustainable and the business is well Sales 716.9 716.9 742.3 positioned for further growth EBITDA before add-backs 31.1 31.1 22.6  EBITDA per tonne increased by 44% Add-back Cost Improvements 2.0 - - EBITDA 33.1 31.1 22.6 Depreciation (6.7) (6.7) (7.6) EBIT 26.4 24.4 15.0 EBITDA per tonne $21.04 $20.27 $14.04 8 Note: 2009n is per normalisations on page 3

F INANCIAL S UMMARY INTRODUCTION INTR ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PROPER PR OPERTY TY FINANCIALS FIN ANCIALS OUTL OUTLOOK OOK Balance Sheet 2009n 2009 2008  Funds employed reduced in line with working capital reduction following a Funds Employed 129.9 129.9 156.8 fall in commodity prices from high levels last year and from lower sales ROFE (EBIT/Funds Employed) 20.3% 18.8% 9.6% following the sale of underperforming assets Cashflow 2009n 2009 2008  ROFE increase to 18.8% associated Net Cashflow before int. & tax 46.5 44.5 (14.4) with the sales of underperforming Net Cash flow % EBITDA 140% 143% (64%) assets and improvement in operating results  Operating Cash flow has improved significantly  Cash Conversion of 143% high in FY09 due to significant working capital reduction 9 Note: 2009n is per normalisations on page 3

S EGMENT O UTLOOK INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PR PROPER OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK Macro Economic Environment  Different drivers to broader economy  Increasing world population  Increasing demand for protein  Limits to the availability of arable land  Increasing food safety pressures ….all leading to increased pressure to achieve greater and safer animal productivity Market Environment  Growth in poultry markets  Growth in aquaculture markets  Dairy impacted by the dramatic fall in milk prices 10

S EGMENT S TRATEGY INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PROPER PR OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK Strategic Actions for FY10  Focus on intensive industries  Re-opening of Clifton mill supported by contracted relationship with Inghams  Expansion of Aquafeed capacity  Continued efforts to turn around the under-performing supplements business  Growth from new product lines in dairy concentrates  Implementation of the new ERP platform  Full year benefits from cost reduction 11

C HEETHAM S ALT R ESULTS P RESENTATION INTR INTRODUCTION ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PR PROPER OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK

H IGHLIGHTS INTRODUCTION INTR ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PR PROPER OPERTY TY FIN FINANCIALS ANCIALS OUTL OUTLOOK OOK  Underlying EBIT result of $17.7m impacted by abnormally large costs of $4.8m pairing the result back to $12.9m  Continued steady growth of after tax Joint Venture distributions from $6.9m to $7.1m in line with inflation  Underlying result for division flat at $24.8m ($20.0m statutory)  Re-opening of Port Alma salt field  Corio refinery relocation to Sea Lake complete with full year benefits for FY10  Bajool refinery upgrade – completion expected in first-half FY10  Indonesian refinery replacement – completion expected in first-half FY10  Implementation of the new ERP system  Relocation of Corio head office to Melbourne 13

S ALES V OLUMES INTRODUCTION INTR ODUCTION AGRIPR GRIPRODUCTS ODUCTS CHEETHAM CHEETHAM PROPER PR OPERTY TY FINANCIALS FIN ANCIALS OUTL OUTLOOK OOK Segment 2009 2008  Soda Ash volumes grew only slightly Soda Ash 580.4 574.3  Chemical volumes down with one less bulk shipment Chemical 143.4 172.1  Food down slightly with reduced use of salt in food Food 93.9 96.0  Pool volumes growing with increased demand from both Pool 63.3 58.3 new pools, a higher than normal rainfall in Queensland as Hide 68.5 71.8 well as consumer preference for salt over chlorine Stockfeed 39.4 38.9  Hide volumes down due to lower slaughter numbers Export 118.2 118.1  Stockfeed flat due to good pasture growing conditions Indonesia 69.7 68.1  Export volumes to New Zealand JVs and Japan stable Other 24.9 23.4 Total Tonnes 1,202 1,221  Indonesia stable but expect to grow with new refinery  Other volumes growing steadily 14