RIDLEY PRESENTATION CREDIT SUISSE & FNZC F&B FOCUS DAY - PowerPoint PPT Presentation

RIDLEY PRESENTATION CREDIT SUISSE & FNZC F&B FOCUS DAY CREATING VALUE IN VOLATILE MARKETS 6 April 2017

AGEND GENDA  Ridley Overview and Mission Statement  Case studies of Value Creation in Volatile Markets  Packaged Products - Stable, growing earnings Novacq™ - High growth global potential  2

RIDLEY RIDLEY OVER VERVIEW IEW 3

CREATING CR ING V VAL ALUE UE IN V IN VOLA OLATILE ILE MA MARKET RKETS: “Our Mission is to improve the cost of feed to yield ratio for our customers” CURRENT CORE BUSINESS ‘ JAWS OF VALUE’ Livestock Safety – TRFR & Compliance Yield / LTIFR lead indicators Performance Nutrition – Ridley’s Mission is to Quality - diet formulation, Innovation - DIFOTIS, maximise sector profitability better feed develop new delivery in full, – a process of continuous conversion value adding on time, in spec rates (FCR) improvement of our raw materials, including by- customers’ delta between the products Logistics - cost of our feed and the Merchandising - e.g. Novacq TM : backloading, bulk, off farm, performance of their animals improve output proximity to expertise, and reduce cost grain, 1.9mt - in terms of yields of milk, market presence in/outbound meat, eggs & well-being Cost of 4 Ridley Feed

CASE CASE STUD STUDY Y 1 1 PACKA CKAGED GED PR PRODUCTS ODUCTS - ST STABLE, ABLE, GR GROWING WING EARNINGS EARNINGS 5

PACKA CKAGED ED PR PRODU ODUCTS CTS OVER VERVI VIEW EW  Packaged Products Business Unit contribution has gone from a minor sector to one of Ridley’s top 3 sectors.  Encompasses Equine, Poultry, and Canine and includes key Ridley brands Barastoc, Cobber and Rumevite.  Building brand equity across the range from a continuous and integrated program of activities. Raise AWARENESS for the ACQUIRE new customers at the TRANSITION existing customer range and lapsed users puppy stage SAMPLING PR FLAGSHIP PROGRAM CAMPAIGN STORES 6

UNDERS UNDERSTANDI DING NG THE THE MARKE MARKET Unlocking insights for a more powerful positioning and marketing mix… Market Intelligence for context Real world consumer research Understanding the consumer Animal nutrition and shopping experience palatability

OUR NEW P OUR NEW PACKA CKAGIN GING Applying market insights to our Packaging Tom & Jet. Kelpies Who is Cobber & what – synonymous with will this product do? Australia’s outback. Strong, alert & focused. Iconography – providing more in depth detail Refreshed Cobber Meaty, bone shape for logo – strong strong teeth. references to species Statement of sovereignty Clear articulation of what the product is & what it will do for you Iconography – conveying multiple points of information with one image Endorsed by Ridley

THE THE CHALL CHALLENGE ENGE Creating brand awareness and recruiting new users  Cobber dog products our most profitable packaged product, with room for growth.  New packaging and innovative marketing campaign to promote and position Cobber as the Australian rural dog brand.  Created The Cobber Challenge to outline the value of Australian Working Dogs.  Tracked 8 of Australia’s best working dogs using GPS trackers fitted to their collars for 3 weeks 9

THE THE CHALL CHALLENGE ENGE Significant insight and interest generated  Print and online media coverage in significant rural media with an estimated value of $250,000.  Total sales and distribution up 5% with further activity to support growth over next 12 months.  Significant flagship store estimate Cobber Working Dog sales up 40% as a direct result of new packaging. 10

BARAS ARASTOC POUL POULTR TRY Y MARKE MARKET T DEV DEVEL ELOPM OPMENT ENT Making our poultry packaging work harder in store. Out with the old… In with the new… Point of Sale Product Development Consumer Promotions Advertising Online Applications

BARAS ARASTOC EQUINE EQUINE MARKE MARKET T DEV DEVEL ELOPM OPMENT ENT New look equine range... Sponsored Riders Product Development Point of Sale Advertising Campaigns

CASE CASE STUD STUDY Y 2 2 NOVACQ™ - HIGH HIGH GR GROWTH WTH GL GLOB OBAL AL PO POTENTIAL TENTIAL

CAS CASE E ST STUD UDY Y 2: 2: NO NOVACQ CQ ™ What is Novacq ™?  Novacq™ is a patented CSIRO technology. It is a microbial biomass ingredient produced from the use of a carbon stream. Launch informative video 14

TM – OUR RIDLEY RIDLEY NO NOVACQ TM OUR COMP COMPET ETITIV ITIVE E AD ADVANT ANTAGE HOW TO IMPROVE THE Livestock “JAWS OF VALUE” CSIRO Licence WITH NOVACQ TM Yield / We have just extended our existing Performance licences to new territories and applications Enhanced Disease resistance to Optimum viral/bacterial efficacy & diet Brood stock / attacks inclusion rates larvae feeding increasing Improved Reduction in survival rates conversion harvest cycle / Up to 40% of annual from different larger prawns / tropical shrimp production is lost to Aeration and carbon sources risk mitigation disease (>US$3bn). filtration Farmed shrimp production expected to Drying process grow 50-60% through to 2030 # . Cost of Ridley Feed # World Bank (2013) Fish to 2030

TM R&D YAMB AMBA NO NOVACQ CQ TM R&D PR PRODUCTI ODUCTION ON SIT SITE E 315km to Aquafeed site at Narangba 3 Ponds lined and actively producing Tru Blu Prawn Novacq T M farm Project milestones at Yamba:  Ridley invested c.A$2m in calendar 2016 at Yamba to develop Novacq TM production, including pond preparation and fit-out, infrastructure and execution of a 10 year lease on enough pond capacity to fully service 100% of Australia’s current prawn demand and expected growth.  Note our assessment of market Ridley site office Bunded silos & size does not assume any & facilities shed storage shed increased demand from Seafarms Group Ltd, which is targeting to become the largest producer of shrimp in Australia (Project Sea Dragon).

CHANTHABURI CHANTHA RI, THAILAND THAILAND JOIN JOINT T VENT VENTURE URE  In addition to the existing feedmill, we have received approval to build two Current Feedmill, with 30,000 tonne blending facilities with p.a. capacity. 2 nd line possible to combined capacity of increase to 55,000 tonnes within same 4 walls. c.140,000 tonnes (t) output, equivalent to 467,000t of finished feed per annum at expected Novacq™ inclusion rates.  The blending facilities will allow us to service multiple markets from a single site, securely, Space within land boundary to Fully developed 110,000 tonne capacity still quickly and cost double potential size by only able to service a small percentage of effectively, and to commissioning a second mill at Thailand domestic demand, absent any derive synergy with 55,000 tonnes capacity consideration of overseas licensed territories. other micro ingredients.

NOVACQ™ DIFFERENTIATION 3 Potential Value Streams  Growth - Improved Feed Conversion Ratio  Prawn feed product trials including the Novacq ™ ingredient consistently demonstrating growth rate improvements in the vicinity of 40% or more and improvement in FCR of 20-30%.  Health - Enhance resistance  Trials are exhibiting improvements in animal well-being via enhanced resistance to the challenge of viral/bacterial attacks and thereby increasing survival rates.  Nitrogen reduction - Reduced diet protein  Trials suggest an overall diet protein reduction is achievable when Novacq™ is included, which leads to reduced nutrient levels in ponds 18 and reduced effluent discharge.

REC RECENT ENT NOVACQ™ AUST USTRALIA RALIAN TRI TRIAL AL RES RESUL ULTS TS  On 3 April 2017, Ridley advised the market that in recent prawn trials at Mackay, a 37% improvement in prawn survival rates had been achieved with Novacq TM diets compared to the control ponds. 37% INCREASE IN SURVIVAL RATE *  The survival rate of the Novacq TM -inclusive ponds was far greater than anticipated, such that the trial ponds reached maximum dissolved oxygen capacity after 90 days.  With insufficient oxygen in the ponds due to the combination of stocking density and prawn growth, a destocking of the Novacq TM -inclusive ponds was required.  This early harvesting of the larger size prawns compromised the growth and nitrogen reduction data from a scientific trial perspective, preventing any statistically significant conclusions to be drawn from the trial other than in respect of survival. 19 * Survival results limited to this Australian trial only.