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An Introduction to AWB

An Introduction to AWB. Presentation to Ridley Agribusiness Investor Forum. Andrew Lindberg 15 November 2000. Covering today…. Australian Wheat Industry Structure & Business Financial Results Challenges Growth and Diversified Profit Streams Key Industry Considerations

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An Introduction to AWB

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  1. An Introduction to AWB Presentation to Ridley Agribusiness Investor Forum Andrew Lindberg 15 November 2000

  2. Covering today…. • Australian Wheat Industry • Structure & Business • Financial Results • Challenges • Growth and Diversified Profit Streams • Key Industry Considerations • Solid Foundation for Future Success • Board & Management

  3. Australian Wheat Industry • 40,000 wheat growing properties • Geographically fragmented • 21 million tonnes of wheat production • 20 per cent of wheat grown is consumed domestically – about 4.5m tonnes • Balance of wheat is exported

  4. Australia’s Wheat Market Share

  5. AWB is …. One of the largest wheat exporters in the world Wheat Export Volume (1) Exporter(m Tonnes) Canadian Wheat Board 19.4 AWB 17.1 Cargill (2)13.7 ADM (2) 4.5 Conagra (2) 1.9 1/ 99-00, expected export volume 2/ U.S. exports only Source: USDA

  6. AWB’s Structure • Unlisted public company (1 July 1999) • Dual class • 37,000 A class shareholders • 1 share each with weighted voting • 67,000 B class shareholders • 241m shares issued • 425 employees, 30 offices in Australia and oversees

  7. AWB’s Structure

  8. Global Manager of Australian Grain... VISION Grains managed by AWB are the world grains of choice OBJECTIVE Maximise value for growers, customers, and shareholders MISSION AWB is the leading global manager of Australian grain

  9. Financial Results • ½ year to 31 March 2000 • Operating Revenue: $1b • NPAT: $41.8m • EPS: 17 cents • Full year to 30 September 2000 • Operating Revenue: $1.7-$1.8b(est) • Related Revenue: $5.5b (est) • NPAT: $62-64m (est) • EPS: 26 cents (est) • DPS: 22 cents (declared) • Shareholders equity: $625-630m

  10. AWB Faces Three Challenges... Business Strategy WINNING Organisational Stakeholder Satisfaction Capability

  11. AWB is Building Strong Positions Across Each Link of the Value Chain AWB Seed Acquisition Storage Handling Shipping Trading Marketing Risk Milling Mgmt

  12. The Wheat Industry Supply Chain Suffers Significant Inefficiencies 5. Most information flows are NOT automated Customer orders AWB forecasts & price signals AWB orders, & BHC inventory & movement reports AWB transport orders 1. Most customer orders are by telephone 4. No access to actual grower production or delivery data 2. Most transport and BHC orders are by telephone, fax or manual e-mail Customer Transport Companies BHCs Growers • 3. Most inventory and movement data are controlled by service providers • Limited access by AWB • Low data integrity due to manual systems Information flows Product flows

  13. Growth and Diversified Profit Streams 100% Australian Export Wheat Harvest Value 80% Trading Performance 60% Strategic Investments 40% Asset & Risk Management 20% 0% 2003 2000

  14. Key Industry Considerations • Information Advantage • System Management • Regulation

  15. Solid Foundation for Future Success • Strengthening our organisational capability • Strong and sustainable position within the industry • Strong profit growth in the core business • Reducing earnings volatility

  16. Board & Management • Trevor Flugge - Chairman • Rob Barry – Deputy Chairman • Paul Ingleby – CFO • Tim Goodacre – Group GM Trading • Peter Geary – GM Export Pools

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