andrew lindberg managing director & chief executive 10 april 2002 ubsw emerging companies...
TRANSCRIPT
![Page 1: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/1.jpg)
Andrew LindbergManaging Director & Chief Executive
10 April 2002
UBSW Emerging
Companies Conference
UBSW Emerging
Companies Conference
![Page 2: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/2.jpg)
Overview
• Highlights for the first half of 2002
• Business Operations
• Business Drivers
• Growth Strategy
• Challenges & Opportunities
• Full Year Outlook
![Page 3: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/3.jpg)
Highlights – first half 2002
![Page 4: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/4.jpg)
Highlights – first half 2002
• Wheat crop exceeded expectations > 24 million tonnes
• Near record pool prices
• Continued strong earnings from our trading, finance and risk management areas
• Growth in our pool management and chartering business
• Rail freight agreement signed with FreightCorp
• JV signed with Syngenta for wheat breeding
![Page 5: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/5.jpg)
Business Operations
![Page 6: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/6.jpg)
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
![Page 7: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/7.jpg)
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
![Page 8: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/8.jpg)
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
![Page 9: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/9.jpg)
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
![Page 10: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/10.jpg)
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
![Page 11: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/11.jpg)
Business Operations
0
15
30
45
60
75
90
105
120
2000 PoolMgt
Services
GrainAcquisition& Trading
GrainTech
SupplyChain
& OtherInvest.
Finance& Risk
Mgt
Other(interest,
tax & corporate)
2001
$million
63.3 (0.8)
+39.6 (2.2)+11.1 (9.7)
(17.6)
83.7
![Page 12: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/12.jpg)
Dividends and Earnings
0
5
10
15
20
25
30
35
2000 2001
Earnings per share(c)
0
10
20
30
40
50
60
2000 2001 2002
Capital expenditure($m)
0
5
10
15
20
25
2000 2001
Dividends per share(c)
0%
2%
4%
6%
8%
10%
12%
14%
2000 2001
Return on equity(%)
26.2c
34.1c22c 22c
35.8
($m)
58.1
($m)
60.0
($m)
10.1%
12.8%
![Page 13: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/13.jpg)
Business Drivers
![Page 14: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/14.jpg)
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
![Page 15: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/15.jpg)
Australian wheat production
0
5
10
15
20
25
30mt
Trendline
Source: ABARE March 2002
(f) = ABARE forecast (z) = ABARE Projection
Production Production forecasts & projections
![Page 16: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/16.jpg)
Global wheat production & consumption
480
500
520
540
560
580
600
620
Source: Economic Research Service, USDA March 2001& ABARE March 2002 (f) = forecasts
Production Consumption
mt
Production forecasts
![Page 17: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/17.jpg)
Wheat production forecast – major producers
Australia24.023.621.2
EU-15103.091.5
105.0
Argentina16.316.016.2
Production 02/03Production 01/02Production 00/01(million tonnes)
United States58.453.360.5
Canada25.021.326.8
Source: USDA Jan 2002
![Page 18: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/18.jpg)
Growth Strategy
![Page 19: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/19.jpg)
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
Financial & risk management
AWB
Future
Core wheat business
Broadening range & volumeof grains under management
Processing & branded products
AWB
2002
![Page 20: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/20.jpg)
Challenges & Opportunities
![Page 21: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/21.jpg)
Challenges & Opportunities
• Grains industry consolidation and increased efficiency
• Increased competition in grain accumulation trading
• Competition for financial services with banks and other providers
• To reduce supply chain costs
• Middle East uncertainty
• Argentinean economic / political instability
• Trade reform
![Page 22: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/22.jpg)
Full Year Outlook
![Page 23: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/23.jpg)
Full Year Outlook
• Strong underlying fundamentals
— Close to growth markets in Asia
— Strong brand and customers reach
— Experienced in competition
— Commercial management driving strategy
— Strong balance sheet
• But still more to do ….
![Page 24: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/24.jpg)
0
20
40
60
80
100
120
1999/00 2000/01 2001/02 forecast
Forecast 2002
$m
NPAT for the years ended 30 September 2000 to 2002
63.3
83.7
100 to
110
20-30%
![Page 25: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/25.jpg)
Interim Results – 31 March 2002
• 2001/02 half year results released Wednesday 22nd May
• Analyst briefing at 2:00pm Wednesday 22nd May
• Institutional briefings in Melbourne 23rd May
• Institutional briefings in Sydney 24th May
![Page 26: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference](https://reader036.vdocuments.site/reader036/viewer/2022062620/551ad76255034606048b542e/html5/thumbnails/26.jpg)
www.awb.com.auwww.awb.com.au
For more information contact:
Michael Thomas
Head of Investor Relations
Ph: +61 3 9209 2064
Email: [email protected]