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April 2002

Investor Presentation. April 2002. Overview . About AWB Business Operations Business Drivers Challenges and Opportunities Outlook Investor Supplement. About AWB. 1. What is AWB?. Australia's major grain marketer & one of the world's largest wheat managers and marketers

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April 2002

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  1. InvestorPresentation April 2002

  2. Overview • About AWB • Business Operations • Business Drivers • Challenges and Opportunities • Outlook • Investor Supplement

  3. About AWB

  4. 1 What is AWB? • Australia's major grain marketer & one of theworld's largest wheat managers and marketers • Markets wheat and other grains to more than 50 countries and is the world's third largest wheat exporter with a 17% global market share • Chosen by most Australian wheat and grain growers to market and finance their grain • Single Desk - exclusive manager and marketer of all Australian bulk wheat exports

  5. 2 Evolution of AWB Listed on the ASX 2001 Privatised 1999 Corporatised 1998 Domestic market deregulated and Wheat Industry Fund established 1989 Australian Wheat Board established as a statutory authority 1939

  6. 3 Ownership structure

  7. 4 Corporate structure AWB - Pool management services - Grain acquisition and trading - Supply chain and other investments - Finance and risk management products - Grain technology Business services Monitor performance of AWBI Wheat marketing AWBI Export markets Wheat Export Authority Pool payments Wheat deliveries Growers

  8. Business Operations

  9. 5 Pool management services • The national pool represents about 80% of total wheat produced in Australia • Aggregate and internationally market pooled wheat • The national pool is operated by AWB International (AWBI). AWB provides services to enable AWBI to operate the pool and in return receives payments for these services • 2002 wheat tonnes for export >18million • 2002 Gross Pool Value >$4.5 billion OUTLOOK • New performance-based fee model, which will reward AWB on a commercial basis from 2001/02 • Increased earnings for pool management services in 2001/02 • 2002/03 Australian wheat planting forecast to be > 2001/02

  10. 6 Grain acquisition and trading • Contract acquisition products • Suite of comprehensive pre-harvest contract products including Multi V • Domestic trading • Buying for cash and delivering to domestic customers • Buying for cash and delivering to the National Pool • Non wheat exports OUTLOOK • Strong earnings for grain acquisition and trading in 2001/02 • Implementation of new contract acquisition products for 2002/03 harvest • Increase grains under management

  11. 7 Supply chain and other investments • Chartering • Agent of chartering services to the national pool, shipping consolidation services, and trading of shipping capacity • Domestic investments • 7 grain centres and Melbourne Port Terminal • Overseas investments • Flour and feed milling investments in Egypt, Vietnam and China • Grain importing investment in Japan OUTLOOK • Continue to invest in supply chain and other investments • Increased earnings for supply chain and other investments in 2001/02

  12. 8 Finance and risk management products • Provision of limited recourse finance secured against a grower’s wheat delivery to an AWB managed pool • Provision of risk management products (effectively derivatives that manage pool risk exposures and cash flows) that allow growers to tailor their risk exposure • Products include: Harvest loans and underwriting, Basis Pool, and Riskassist OUTLOOK • Major new products to be launched in 2002 that offer more flexible and competitive range of financial and risk management options to growers • Similar to 2000/01 earnings

  13. 9 Grain technology • Primary role is the development of a proprietary position for AWB in plant genetics and new cereal varieties • Agrifood Technology, AWB Seeds, and AWB Research OUTLOOK • Joint venture with world leading life science company, Syngenta, to develop new wheat varieties • Expectation for breakeven in 2 to 3 years

  14. 10 Business Operations

  15. 11 Dividends and Earnings

  16. 12 Grower risk AWB risk National Pool Underwritten loans Principal trading • Final net pool return • final sale price • foreign exchange • Credit risk manage-ment outcomes • Supply chain costs • Pool return falls below 80% • Size of pool impacts revenue derived from products and services • Incentive in pool management fee • Margin on loans • Underwriting fees • Fees from basis contracts • Principal positions • Multi-varietal and fixed grade contracts Risk allocation

  17. Business Drivers

  18. 13 Business Drivers • Australian wheat production • Global wheat production and consumption • Wheat price performance against benchmarks • Trading volumes and margins • Chartering volumes and margins • Tonnage delivered to finance and risk products • Supply chain volume and margins • Interest margins

  19. 14 Australian wheat production mt Trendline Production Production forecasts & projections Source: ABARE March 2002 (f) = ABARE forecast (z) = ABARE Projection

  20. 15 Wheat production forecast – major producers Source: USDA Jan 2002

  21. 16 Core wheat business AWB 2002 Broadening range & volume of grains under management AWB Future Financial & risk management Processing & branded products Four engines of growth Vision: Grains managed by AWB are the world grains of choice Mission: AWB is a leading integrated global grains manager Objective:Maximise value for growers, customers, and shareholders

  22. Challenges & Opportunities

  23. 17 Challenges & Opportunities • Grains industry consolidation and increased efficiency • Increased competition in grain accumulation and trading • Competition for financial services with banks and other providers • Reduce supply chain costs • Middle East uncertainty • Argentinean economic / political instability • Trade reform

  24. Outlook

  25. 18 Financial performance & forecast NPAT for the years ended 30 September 2000 to 2002 $m 20-30% 100 to 110 83.7 63.3

  26. 19 Share Price v ASX / S&P 200 AWB Share Price ASX / S&P 200 Source: UBSW March 2002

  27. 20 Investment highlights • Significant expertise and scale in global wheat marketing • One of the largest integrated global wheat managers • Large existing customer base • Manager of the Single Desk • Potential to broaden range of products, services and customers in Australia and overseas • Strong balance sheet and dividend paying capacity

  28. For more information contact: Michael Thomas Head of Investor Relations Ph: +61 3 9209 2064 Email: mthomas@awb.com.au www.awb.com.au

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