R IDLEY C ORPORATION FY2010 R ESULTS P RESENTATION INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK
F INANCIAL H IGHLIGHTS INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK G Group NPAT of $29.1m, up $8.8m or 43% NPAT f $29 1 $8 8 43% Consolidated result 2010 2009 on 2009 before significant items; up $m $m $16.2m or 125% after significant items Sales Revenue 728.0 819.4 Second successive record EBIT result for Second successive record EBIT result for AgriProducts of $29.0m despite Dairy EBIT - AgriProducts 29.0 24.4 sector weakness EBIT - Cheetham 16.8 12.9 Cheetham returns to historical level of Salt Joint Ventures 7.2 7.1 earnings Corporate Costs (6.8) (6.8) Highly reliable earnings and cash streams from joint ventures Result from Operations Result from Operations 46 2 46.2 37.6 37 6 Corporate costs in line with budget Net Finance Expense (8.1) (12.4) Net interest down by $4.3m, or 35%, on Tax Exp. excl sig. items (9.0) (4.9) lower borrowings g Net profit pre sig. items 29.1 20.3 Higher tax attributable to pre-tax earnings improvement Significant items - (7.4) No significant items for FY10 No significant items for FY10 Net profit after significant 29.1 12.9 items 2
F INANCIAL H IGHLIGHTS INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Sale Post Ridley Inc. Post Ridley Inc. Includes Ridley Inc. Includes Ridley Inc ROFE in FY09 # FY10a double FY06 FY07 FY08 FY10f figures for first time ROFE (%) ( ) 8.2% 6.7% 3.2% 4.7% 9.2 – 9.8% 10.4% 58.5 EBITDA ($m) 81.5 74.4 48.3 41.3 54 - 59 NPAT above 46.2 EBIT ($m) 59.7 51.7 36.3 30.2 43 - 48 c.FY06 levels NPAT ($m) 27.7 22.7 10.4 12.9 28 - 30 29.1 72.0 Net Debt ($m) 171.5 171.8 199.2 69.1 70 - 75 Strongest Net Debt / EBITDA Net Debt / EBITDA 2 1x 2.1x 2 2x 2.2x 3 9x 3.9x 1.7x 1 7x 1 3x - 1 5x 1.3x 1.5x 1.2x 1.2x debt servicing capacity 39.4 Op Cash flow * ($m) 39.5 37.4 16.4 53.0 50 - 55 for years 9.5 EPS (cents) 10.0 7.9 3.5 4.3 9.1 - 9.7 93% Cash flow conversion (%) 48% 50% 34% 128% 93% Strong EPS growth 126% EPS growth (%) -12% -21% -55% 20% 117 - 131% # FY09 result excludes loss on sale of Ridley Inc. and any Business Ridley Inc. result. • Operating cash flow is EBITDA plus JV dividends Transformation 3 • and w orking capital
R IDLEY A GRIPRODUCTS R ESULTS P RESENTATION INTRODUCTION INTRODUCTION AGRIPRODUCTS AGRIPRODUCTS CHEETHAM CHEETHAM PROPERTY PROPERTY FINANCIALS FINANCIALS OUTLOOK OUTLOOK
H IGHLIGHTS INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK R Record EBIT result of $29.0m, business well positioned for further d EBIT l f $29 0 b i ll i i d f f h growth Clifton mill recommissioned to service Queensland demand from new Clifton mill recommissioned to service Queensland demand from new long term Inghams and Darwalla poultry contracts Improved margin and logistics management of Packaged Products Doubling of capacity for Aqua-feed through new facility at Inverell, NSW Increased market penetration for Aqua-feed I d k t t ti f A f d Further $2.5m turnaround for Supplements positive, EBIT contribution for the year y Full year benefit of prior year cost reduction initiatives 5
S ALES V OLUMES INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Poultry: growth from new long term customer contracts Poultry: growth from new long term customer contracts, Sector S t 2010 2010 2009 2009 market growth of chicken consumption and growth in niche (kt) (kt) turkey and duck sectors Poultry 764 708 Aqua-feed: sales growth and market penetration continued over FY10 Aqua-feed now a market leader in all major fin fish and prawn species in Australia. Aqua-feed 47 37 Packaged Products: volumes down primarily due to the Packaged 90 106 downturn in the dairy sector but earnings maintained through downturn in the dairy sector but earnings maintained through improved margin management Dairy 215 282 Dairy: significant drop in volumes as farmers reacted to milk price reductions and sought to cut feed input costs. Pig 325 330 Pig: producer profitability and stabilised pig numbers have Supplements 30 19 seen unchanged volumes over the period Supplements: significant volume increase through Beef & Sheep & p 35 34 favourable seasonal conditions and improved customer favourable seasonal conditions and improved customer engagement Other 64 57 Beef & Sheep: volumes remain largely unchanged across the period Total Tonnes Total Tonnes 1 570 1,570 1 573 1,573 6
F INANCIAL S UMMARY INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Record EBIT result of $29.0m is R d EBIT lt f $29 0 i Profit & Loss 2010 2009 sustainable and the business is $m $m well positioned for further growth Sales 620.0 716.9 Sales decline largely reflect loss g y EBITDA 36.6 31.1 of Dairy volumes offset by gains in poultry and Aqua-feed Depreciation (7.6) (6.7) EBITDA per tonne increased by EBIT EBIT 29.0 29.0 24.4 24.4 $3 04 or 15% on 2009 result $3.04, or 15% on 2009 result EBITDA per tonne $23.31 $20.27 Balance Sheet ROFE greater than 20% recorded g for the first time following an Funds Employed 135.7 129.9 increase of 2.6% to 21.4% ROFE (EBIT/Funds Employed) 21.4% 18.8% 7
C ASH F LOW INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK $5 5 $5.5m (18%) improvement in (18%) i t i 2010 2009 Cash flow EBITDA over 2009 $m $m Net working capital movement EBIT 29.0 24.4 increase of $2.5m in FY10 Depreciation 7.6 6.7 to reflect inventory positions at year end; EBITDA EBITDA 36.6 36.6 31.1 31.1 large fall in FY09 reflecting l f ll i FY09 fl ti fall in raw materials prices Net Working Capital (2.5) 23.3 from 30/6/08 to 30/6/09. Movement Higher than normal Capex - Higher than normal Capex Operating Cash flow Operating Cash flow 34.1 34 1 54.4 54 4 ERP $5.5 million Capex less asset sale (11.1) (9.9) FY10 Cash flow percentage to proceeds EBITDA influenced by working Net Cash flow pre interest Net Cash flow pre interest capital increase and Capex i l i d C 23.0 44.5 and tax Op Cash flow / EBITDA (%) 63% 143% 8
S EGMENT O UTLOOK INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Macro Economic Environment ac o co o c o e t Different drivers to broader economy Limits to the availability of arable land and increased focus on intensive Limits to the availability of arable land and increased focus on intensive feeding 2050 world growth requirements # : 70% increase in food production required by growing population Meat production to increase by 200mt to 470mt Cereal production to increase by 1bt to 3.1bt p y World population growth & increased demand for protein Higher food quality standards g q y Increasing food safety pressures ….all leading to increased pressure to achieve greater and safer animal g p g productivity 9 #: UN Food & Agriculture Organisation, Sept 2009
G ROWTH P ROSPECTS INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Growing poultry market Growing poultry market Increasing consumer preference for fresh white meat products Increasing Ridley market penetration supported by long term contracts g y p pp y g Growing market for aquaculture products Increasing reliance on aquaculture given diminishing wild fish stocks Technological advantage in Aqua-feed solutions Production constraints removed Ridley unrestrained to target and secure additional market share Ridley unrestrained to target and secure additional market share Recovery in Dairy sector Signs of recovery in Dairy sector Signs of recovery in Dairy sector - rising milk prices and confidence rising milk prices and confidence Return to “normal” demand volumes – will take 12 to 24 months to return to 2008 levels 10
S EGMENT S TRATEGY INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK Strategic Actions for FY11 Strategic Actions for FY11 Aligning Ridley poultry focus to regional growth areas in South Australia and South East Queensland Securing additional Aqua-feed volumes through continuous improvement of specialised diets for domestic customers and further growth in Asia-Pacific growth in Asia Pacific Replacing lost pig volume with new customer base Growing Packaged Products through new product offerings channel Growing Packaged Products through new product offerings, channel relationships, and product differentiation Providing innovative, cost effective feed solutions for the Dairy sector Generating Ridley hurdle rate from Supplements assets in final year of turnaround strategy Implementing the new ERP platform throughout the business I l ti th ERP l tf th h t th b i 11 Continue to examine appropriate ‘bolt on’ acquisitions
C HEETHAM S ALT R ESULTS P RESENTATION INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK
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