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An Introduction to AWB

An Introduction to AWB. Andrew Lindberg Chief Executive AWB Limited. Covering today…. Why it’s appropriate for AWB to present today Australian and global wheat industry What AWB does and how the company will grow Investment attributes Challenges and strategies Corporate structure

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An Introduction to AWB

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  1. An Introduction to AWB Andrew Lindberg Chief Executive AWB Limited

  2. Covering today…. • Why it’s appropriate for AWB to present today • Australian and global wheat industry • What AWB does and how the company will grow • Investment attributes • Challenges and strategies • Corporate structure • Regulatory issues • 2000 financials • Management and Board • Listing

  3. Why present at a financial services forum? Pool Activities10% Financial and Risk Products68% Breakdown of 2000 Financials Trading and Other22% NPAT of $63.3m

  4. Australian wheat industry Australia exports 80% of its total average wheat production Wheat production is about 21 million tonnes 73% 93% 88% 55% 78%

  5. Global wheat trade EU16% Canada19% Other8% 1999/2000 total wheat trade 100 million tonnes Argentina9% USA30% Australia18%

  6. What does AWB do? • Grain technology and seeds • Grain acquisition • Domestic logistics • Pool management and trading • Risk management & finance • International grain marketing AWB is integrated across the value chain

  7. AWB offices throughout wheat belt 450 employees30 offices in Australia and overseas

  8. AWB is the largest global wheat manager Wheat Management Traded Share AWB 18mt 18% Cargill/Continental 18mt 18% Canadian Wheat Board11mt 11% ADM 8mt 8% Louis Dreyfus 7mt 7% Estimate of wheat tonnes under management, 2000 Source: USDA, company reports, company interviews

  9. How will AWB grow? • Financial & Risk Products • Trading • Pool Services • Grain Technology • Supply Chain AWB’s core business streams

  10. Investment attributes • Largest global wheat manager • Unparalleled expertise in wheat marketing • Substantial customer base • Holder of the single desk • Growth in Asian population & wheat product consumption • Potential to leverage customer base to deliver a broad range of financial and risk management services • Potential to extend the customer base to all grain producers and end users • Scope for geographical expansion • Strong balance sheet and dividend paying capacity

  11. What challenges does AWB face? • Competition for financial services revenue with banks and other providers • Increasing supply chain costs as a consequence of limited investment and poor contract management • Entry of international integrated grains companies into the Australian wheat export market • Emergence of an online global grain exchange

  12. Respond with 5 pronged strategy • Win grower mandates • Extract value from the supply chain • Secure end-user demand • Sustain trading out-performance • Lead in grain technology WINNING: AWB is the dominant Asset Manager for Australian Grain

  13. Corporate structure • Unlisted public company (1 July 1999) • Dual class • 35,000 A class shareholders • 1 share each with weighted voting • 67,000 B class shareholders • 241m shares issued • Balance shareholder & grower interests

  14. Regulatory issues • Domestic wheat market is fully deregulated • Bulk export wheat is marketed by AWB via the Wheat Marketing Act legislation • NCC review of the Export Single Desk • Commonwealth Government decision • 2004 review of AWB’s export performance

  15. 2000 financial results • Operating revenue: $1.8 billion • Related revenue: $3.8 billion (national pool) • NPAT: $63 million • EPS: 26 cents • DPS: 22 cents • Shareholders equity: $629 million • ROE of 10.1%

  16. Andrew Lindberg CEO Jill Gillingham CIO Paul Ingleby CFO Tim Goodacre Group GM Sales & Marketing Management Peter Geary Group GM Trading

  17. Board of directors • The Board has a commercial balance of relevant skills • investment banking • risk management • marketing • production • logistics • Chairman - Trevor Flugge • Deputy Chairman - Rob Barry

  18. Listing • Process • pre-marketing – early June • prospectus – end June • issue – end June to end July • listing - August • New equity raised • institutional offer • retail offer • options for existing shareholders

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