ELDERS LIMITED — AGM Information 2010

Dec 15, 2010

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16 December 2010

Company Announcements Office Australian Securities Exchange

2010 AGM - CEO’s Presentation

Attached is a copy of the Chief Executive Officer’s presentation to the 2010 Elders Limited Annual General Meeting being held in Adelaide today.

Peter Hastings Company Secretary (08) 8425 4964

Elders Limited ABN 34 004 336 636 Registered office: Level 3, 27 Currie Street, Adelaide, South Australia 5000. Postal Address: GPO Box 1176, Adelaide, South Australia 5001. Telephone: (08) 8425 4000 Facsimile: (08) 8410 1597

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Chief Executive’s presentation

2010 Annual General Meeting 16 December 2010 Malcolm Jackman Chief Executive

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Operations overview

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Elders and Australian agriculture In 2010 Elders was at the heart of $10 billion of transactions

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Cattle

• 1.96 million head

Farm supplies

• $882 million sales

• $1,267 million gross sales value

Grain

Sheep

• 9.30 million head

• 3.5 million tonnes executed

• Sales value $696 million

• $887 million gross sales value

Real Estate

Wool

• 451,000 bales

• $438 million gross sales value

Live Export

• 206,700 head

• $238 million

Feedlotting

• 90,900 head

• $136 million

• Sales value of $1.61 billion

• Franchise sales of $3.35 billion

Banking

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• $402 million of new finance loans

Insurance

• $520 million of GWP

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Financ ai l Plann ngi • 1000 new financial plans 3 • $12 million brokerage

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Financial Services Distribution Aligned partnership model

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		Banking	Insurance	Financial Planning
	Trading as
				Financial Planning
		Distributed by
	Distribution Ownership	Elders (100%)	QBE (75%) Elders (25%)	ANZ*(51%) Elders (49%)
	Services	Specialist bank to Australian farmers. Seasonal and term lending	Specialist rural and regional insurance provider	Rural and regional financial planning
	Distribution	DistributionthrouhElders	EldersInsurancedistribution	54advisorslus
	arrangement	g network, including regional banking managers & officers	network, supported by Elders brand and shopfronts	p distribution through Elders network for 20 years

• Through subsidiary OnePath

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Elders Forestry Consolidating around forestry management and operations with solid under y ng va uel i l

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• Management of 180 , 000 ha of plantation estate

• Port and handling infrastructure:

• Albany Chip Terminal (wholly owned)

• SmartFibre (50% interest)

• Cash flow ex ected from 20 million lus tonnes of p p

• woodfibre over next 10 years

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• Asset base and quality gives strategic position as in dus tr y p r oceeds thr oug h cu rr e nt tr a n s iti o n

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• Entry of new investors and ownership structures

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• Funding post-MIS

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Futuris Automotive Australia’s largest auto components supplier with a growing Asia Pacific footprint

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• Supplier of interior systems and components to Australian, Chinese, Thai, South African and North American car makers

• Rebounding out of GFC with financial and new business performance in FY10:

• FY2010 Sales: $257m; EBIT $15m, Operating cash flow $36m

• New business:

  • Australia:

    • GMH double shift

    • Cruze locally built for GMH (Mar 2011)

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• Holden Commodore MY14

• P o li ce ru ser export or C i f USA (CCPPV)

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• China: Chery, JAC, Brilliance and Gonow

• Thailand: GM, Ford, and Cut & Sew

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• South Africa: Futuris Feltex – Mercedes, BMW & Ford carpets

• Business development proceeding according to strategy

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6
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Rebuilding Elders as a capital-light, cash- focused, high-performance sales organisation

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Vision rationale

Focus on capital, cash and sales addresses our key aspirations for returns and growth

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Capital light Cash-focussed

High performance Sales

• Capital efficiency

• Stron g cash/liquidit y

• Working capital to support growth

• Adequate returns

• Internal competition for capital

• Mi n m se nterest i i i

• Optimise working expense capital

• Dividend payment

• Optimise return on assets

• Driver for growth

• M ax m se s i i h are h o ld return

• Align shareholder and staff rewards

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Capital-light Capital intensity versus shareholder returns

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 What it means:

• Low capital intensity business within our core strategic and business focus

• Capital release from non-core, peripheral or non-economic operations

• What’s been done:

• $800 million capital from asset sales since start of FY09

• Reduction in debt and gearing

• Aligned Partnerships financial services model

• • Working capital efficiency improved

• Move from land ownership to leasing in Forestry

• Less debt and seasonally aligned

• What’s planned:

• C ap it a re ease rom ores ry l l f F t

• Sale of non-core assets where opportunity presents

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Reduced capital requirements Net debt reduced further by recent restructuring. . Leaner working capital

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Net debt
Working Capital
$ million
$ million as at 30 September
Consolidation of
Plexicor at 30
September
870 52 64 442
340
383
348
275
Sep-09 Mar-10 Sep-10 Pro-forma post 2009 2010
Rural Bank sale
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Cash-focussed

Concentrating on managing and conserving cash

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 What it means:

• “Cash is King” and everyone in the business knows it

• What’s been done:

• Supply chain reform

• Improved operating cash flow in FY10 from all business units

• Payment terms aligned to industry standards

• • Managing to tight cash constraints and strong seasonal working capital flows

• What’s planned:

• Shift to seasonal facilities

• Further securitisation

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High performance sales The achievement of sales excellence

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 What it means:

• Being the best at understanding, anticipating and meeting our clients’ needs

• Maximising share of client spend

• Leading the industry in sales growth, and market share

 What’s been done:

• Focus on High Performance Sales in 2010 as part of Elders Business Transformation

• Accelerated development and launch of Go-to-Client program

 What’s planned:

• Roll-out and implementation of Go-to-Client initiatives

• SalesPlus+

• Gap analysis: location, product and services

• Rebuilding the brand

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GTC Program overview Go to Client

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Re-orienting to a client-centric and sales focus

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Adjust network structure
Ad m n s ra i i t ti on & T ec h n ca i l u H b s
Ne twork Structure
Gap identification
Inside Sales
Zone/Regional Management
Ma nagement Sales Performance Management
Livestock, Wool, Farm Supplies, Banking
Insurance Zone Co-ordination
Sales Performance Monitor
Go to Client Re muneration & Benefits
Revised remuneration to reward p erformance
Elders Phantom Equity Model
Br anchise
Align Branch Management for value
creation
Build best understanding of client needs
Building Sustainable
Competitive Advantage
Align platform , capability & product
Enabling a high performance sales culture
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Hardwiring sales effectiveness into daily activity

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Optimise time spent selling to clients
Weekly Weekly
Client Lists Action AIMs Review
Plans Sessions
Structured Selling
Activity
Optimise the effectiveness of the time spent with clients
Selling
Sales training Coaching
stories
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Gap analysis: location, product & services Coverage and structure that will capture more farm supplies bus ness or i f Elders

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• Gap analysis through comprehensive mapping and analysis of catchment and potential for sale of farm supplies

• providing information on areas not covered by existing footprint

• analysis of commercial service options

• Introduction of “home” brand for farm supplies

• Coordinated “generic” strategy

• Veterinary Supplies offering

• Consultancy services

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Restoring the brand Investing in the Company’s most powerful asset

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• v

• Elders is taking a proacti e approach to rebuilding Elders’ profile and trust with farmers

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• Glenn McGrath, Elders Ambassador

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• Refresh of branch signage and branding for all locations

• Finalist NAB Agribusiness Awards

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• Current advertising campaign “There When You Need Us”

• Announcing Elders as a Foundation partner of The Australian Year of the Farmer in 2012

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Current conditions and outlook

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Seasonal conditions

Extreme conditions in the east and WA south-west

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Three months to 30 November

December to date

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• Financial situation of many growers will be impacted severely by the impact of high ra n a i f ll i n th e eas an t d l ow ra n a i f ll i n WA sou th wes t

• Short term disruption to activity levels generally

• Eastern rainfall positive for livestock, wool, real estate and irrigation based activities

• North west pastoral outlook very positive

• Conditions and trading weak in south-west WA

• Effects of disruption may be evident at half year, full year expectation unchanged

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2011 to date Results to November encouraging for improved returns in FY11

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• Positive start to 2011 , with results ahead of 2010 and on track for FY11 targets

• Rural Services trading well YTD and ahead of pcp result

• Network sales up 4%; gross margin up 7%

• Livestock, Wool, Fert and AgChem strong

• T ra di ng st ill i mpacte d b y n I d ones a, ut recovery expecte i b d

• Cost to Serve program on track

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There when you need us.