ELDERS LIMITED — Investor Presentation 2021

May 16, 2021

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Monday 17 May 2021

2021 Half-Year Results Investor Presentation

Attached is the Elders Limited ( ASX:ELD ) investor presentation in connection with the financial results for the 6 month period ended 31 March 2021.

Elders CEO, Mark Allison, and Group Financial Controller, Vanessa Trengove, will deliver this presentation by webcast and simultaneous teleconference at 10.00am (AEST) today.

As advised in the Company’s announcement to ASX on Tuesday 11 May 2021, you can register to view and listen to the live commentary of the presentation. For details, refer to that announcement.

Further Information:

Mark Allison, Managing Director & Chief Executive Officer, 0439 030 905

Media Enquiries:

Stephanie Larkin, Head of Marketing & Communications, 0419 226 384

Authorised by:

Peter Hastings, Company Secretary

Elders Limited ABN 34 004 336 636. Registered Office: Level 10, 80 Grenfell Street, Adelaide SA Australia 5000

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Elders Limited

1H21 Results Presentation

17 May 2021

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Disclaimer and Important Information

Forward looking statements

This presentation is prepared for informational purposes only. It contains forward looking statements that are subject to risk factors associated with the agriculture industry many of which are beyond the control of Elders. Elders’ future financial results will be highly dependent on the outlook and prospect of the Australian farm sector, and the values and volume growth in internationally traded livestock and fibre. Financial performance for the operations is heavily reliant on, but not limited to, the following factors: weather and rainfall conditions; commodity prices and international trade relations. Whilst every endeavour has been made to ensure the reasonableness of forward-looking statements contained in this presentation, they do not constitute a representation and no reliance should be placed on those statements.

Non-IFRS information

This presentation refers to and discusses underlying profit to enable analysis of like-for-like performance between periods, excluding the impact of discontinued operations or events which are not related to ongoing operating performance. Underlying profit measures reported by the Company have been calculated in accordance with the FINSIA/AICD principles for the reporting of underlying profit. Underlying profit is non-IFRS financial information and has not been subject to review by the external auditors but is derived from audited accounts by removing the impact of discontinued operations and items not considered to be related to ongoing operating performance.

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2

Agenda

Key Highlights Financial Performance Third Eight Point Plan Progress Sustainability Market Outlook Appendix Questions

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1H21 Key Highlights

Robust year to date across the business

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Safety

• 2 lost time injuries (LTI), compared to 1 last year, with target of zero

• LTI frequency rate at 0.8 compared to 2.2 last year

• 57 days lost, compared to 95 last year

• In 1H21 and to date, Elders has experienced minimal impact on its people, operational and financial performance as a result of COVID-19

• COVID safety protocols are embedded in the business

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Financial Performance
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• $73.8 million Underlying EBIT (+40%)

• $23.9 million Operating Cash Flow (-$3.5 million)

• 20.1% Return on Capital (ROC) improvement of 1.2%, mainly due to margin growth exceeding impact of capital growth

• 1.5x Leverage Ratio at the lower end of our targeted range of 1.5x-2.0x

• 42.9 cents YTD Earnings per Share (+38%)

• Elders will pay an interim dividend of $0.20 per share, 20% franked, compared to $0.09 on the pcp

• Elders did not access any government support such as JobKeeper during the half year ended 31 March 2021

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Strategy

• On track to deliver first year of the third Eight Point Plan (EPP)

• Retail Products margin increased through higher sales in line with improved seasonal conditions and market growth, as well as benefits from additional backward integration throughput and improved pricing techniques

• Continued to grow our footprint through acquisition of Rural Products and Agency Services businesses and personnel

• Completed Service Design phase for Systems Modernisation program

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1H21 Operating Highlights

Implementation of third Eight Point Plan

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Operating Safely

• 2 lost time injuries (LTI), compared to 1 last year, with target of zero

• LTI frequency rate at 0.8 compared to 2.2 last year

• 57 days lost, compared to 95

• Inaugural safety week has been held and the continued development in systems, processes and keeping safety top of mind has benefitted the business with the injury severity reducing significantly

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Sustainability

• Modern Slavery Statement and Ethical Contracting Framework launched to support responsible sourcing

• Action plan to full alignment with TCFD Recommendations on track, with analysis of climate change risks and opportunities underway

• Over $700,000 in sponsorships and donations to local communities, charities and supporting the agriculture industry

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Efficiency & Growth

• Preserved and captured further gross margin through strategic initiatives

• Successful integration of AIRR and progressed maturity of Titan AG

• Maintained focus on footprint expansion through acquisitions of Rural Products and Agency businesses and personnel

• Continued growth in Financial Services offerings

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Core Relationships

• Worked closely with industry and clients to ensure continuity of operations and agricultural supply chains during COVID-19

• Continued engagement with Rural RDCs, government and tertiary institutions to enhance our agricultural research, development and extension initiatives through the Thomas Elder Institute

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1H21 Financial Performance: Summary

Strong performance across our key metrics

Strong performance across our key metrics 1H21 Financial Performance: Summary
Financial Metric 1H21 Result ($m) 1H20 Result ($m) Year-on-Year Change $m % Sales revenue 1,100.5 900.2  200.3 22% Underlying EBITDA 94.3 73.6  20.7 28% Underlying EBIT 73.8 52.8  21.0 40% Underlying profit after tax 67.0 47.5  19.5 41% Statutory profit after tax 68.2 52.0  16.2 31% Net debt 263.9 319.7  55.8 (17%) Operating cash flow 23.9 27.4  (3.5) (13%) Total capital (balance date) 882.3 845.7  36.6 4% Underlying return on capital (%)1 20.1% 18.0%  n.a 2.1% Underlying earnings per share (cents) 42.9 31.2  11.7 38% Leverage ratio (times)2 1.5 1.9  (0.4) (21%)	Underlying EPS (c) Sales Revenue $m 52 55 53 71 43 FY20 FY18 FY17 FY19 1H21 CAGR +11% 698 750 738 900 1,101 905 863 929 1,193 FY17 FY19 FY18 FY20 1,603 1H21 1,613 1,667 2,093 CAGR +9%	Underlying EBIT $m 42 48 34 53 74 29 27 40 66 71 75 74 119 CAGR +19%
		ROC % 28.6 24.2 18.4 18.9 20.1 FY20 FY19 FY17 FY18 1H21 3-year avg 18.5%
		FY17 R12 1H21 FY18 FY19 FY20

1 Return on capital = Rolling 12 months Underlying EBIT / (working capital + investments + property, plant and equipment + intangibles (excluding Elders brand name) – DTL on acquisitions – lease liabilities – provisions)

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2 Excludes the impact of AASB 16 Leases

1H21 Financial Performance: Product

Favourable performance across most products, partially offset by increased costs in line with strategic initiatives

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Change in product margin ($m)
Product margin
1.8 2.9
5.2 2.8
6.2
16.5
11.9
1.4
18.0
67.0
47.5
1H20 Retail Wholesale Agency Real Estate Financial Feed and Branch Costs Interest, 1H21
Underlying Products Products Services Services Services Processing Incentive Tax & NCI Underlying
Profit Services Profit
Product Margin by Year ($m)
1H21 90.9 29.3 77.0 24.2 20.5 5.9 (6.2)
1H20 72.9 17.4 70.8 19.0 18.7 8.8 (3.4)
%
25% 68% 9% 27% 10% (33%) 82%
change
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Increased through higher sales in line with improved seasonal conditions and market growth, as well as Retail Products benefits from additional backward integration throughput and improved pricing techniques Benefitted from a strong first half, with AIRR recognising Wholesale an additional $11.9 million in gross margin due to Products increased sales, with performance above expectations Agency Services Upside mostly in Livestock, primarily driven by high prices Real Estate Favourable predominantly due to increased Residential Services and Broadacre turnover Improved on the previous corresponding period (pcp), mainly in our Insurance business due to strong earnings Financial Services on our equity accounted investments, as well as interest income earned on our new livestock funding product Feed and Lower than pcp mostly at Killara Feedlot, driven by Processing pricing pressures on feeder cattle Services Branch Incentive In line with EBIT upside across the business Up on last year due to acquisitions, higher insurance Costs costs, investment in strategic areas and Systems Modernisation expenses

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1H21 Financial Performance: Geography

Improvement across all areas with increased investment in strategic initiatives

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Change in underlying profit by geography ($m)
Underlying EBIT
0.7
5.1
0.5 10.4
4.3
1.4
6.3
4.1
3.7
6.7
67.0
47.5
1H20 Wholesale NSW [1] QLD & NT VIC & RIV SA TAS WA China Corporate Interest, 1H21
Underlying Products and other Tax & NCI Underlying
Profit costs Profit
Underlying profit by geography by year ($m)
1H21 15.3 13.4 7.8 29.0 16.3 3.5 24.7 (0.4)
1H20 8.6 9.7 3.7 22.7 12.0 3.0 19.6 (1.1)
%
81% 36% 114% 28% 36% 17% 26% 64%
change
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Wholesale Products	Benefitted from a strong first half, with AIRR contributing an additional $6.7 million of EBIT due to increased sales, with performance above expectations
	Increase largely driven by strong Retail Products results,
New South Wales	partially offset by feeder cattle price pressures at Killara
	Feedlot
Queensland and Northern Territory	Uplift across most products, including acquisition growth
Victoria and Riverina	Upside mainly resulting from increased Retail Products sales for AgChem and Fertiliser due to confidence in winter crop outlook
	Profiting principally in Retail Products with both sales
South Australia	and margin increases, as well as additional earnings
	from the YP Ag acquisition
	Favourable results from increased Retail Products
Tasmania	margins, partially offset by lower cattle and sheep
	volumes
	Up across most products, with higher Retail Products
Western Australia	sales, improved broadacre and residential turnover and
	strong livestock prices and volumes
Corporate and	Increased due to higher insurance costs, investment in
other costs	strategic areas and Systems Modernisation expenses

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1 New South Wales includes Killara Feedlot

1H21 Financial Performance: Capital

Return on Capital (ROC) 3-year average at 18.5% is outperforming third Eight Point Plan target

ROC increased to 20.1% (up 1.2% on FY20)

Average Working Capital $483.0m (up $98.3m)

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Underlying Return on Capital [1]
18.0% 18.9% 20.1%
3 yr avg
18.5%
1H20 FY20 1H21
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Movements are attributable to:

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300 266 1H20
Average Working Capital $m [2, 3]
231 1H21
50
89
68 59
51 54 49
0 32
30
2 1
-50 (33)(32)
Retail Wholesale Agency Real Financial Feed & Other
Products Products Servies Estate Services Processing
Services Services
This largely relates to:
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• higher Rural Products earnings, providing ROC accretion despite associated capital needs

• increases in Retail Products predominantly due to debtors in line with higher sales activity

• Wholesale Products working capital up $38.0 million on average, as the AIRR acquisition benefitted from strong seasonal conditions, which resulted in a higher debtor balance

• increased Agency Services capital, resulting from higher turnover

• improved earnings in Real Estate Services on similar capital

• higher Livestock turnover increasing Agency Services average working capital over the half (up $10.6 million)

• lower Feed and Processing Services ROC, contributed by margin pressures and higher inventory driven by strong cattle prices

• unfavourable Feed and Processing Services movement mostly relating to higher cattle inventory

We achieved a 3-year average ROC of 18.5%[4] , which is above our 15.0% target for the completion of the third Eight Point Plan period.

1 Return on capital = Rolling 12 months Underlying EBIT / (working capital + investments + property, plant and equipment + right of use assets + intangibles (excluding Elders brand name) – DTL on acquisitions – lease liabilities – provisions)

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• 2 Excludes Elders brand name only

• 3 Average is calculated on a monthly basis on year to date balances

• 4 3-year average ROC is calculated on the 12 months to 31 March 2019, 31 March 2020 and 31 March 2021

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1H21 Financial Performance: Operating Cash Flow

Cash conversion at 35.7% on underlying profit after tax

$million	1H21	1H20	Change
Operating cash flow	23.9	27.4	(3.5)
Investing cash flow	(25.3)	(106.4)	81.1
Financing cash flow	(19.8)	134.4	(154.2)
Total cash flow	(21.2)	55.4	(76.6)

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Operating cashflow of $23.9 million

• EBITDA of $94.3 million (including impact of AASB 16 leases), offset by:

• Net provisions/accruals outflow of $5.1 million, including payment of FY20 incentives

• Movements in assets and liabilities of $62.2 million

  • Retail Products growth of $25.3 million due to higher debtors, which is typical for this time of the year, as well as increased inventory to support Q3 sales, which is more than offset by favourable creditors

  • Wholesale Products up $30.5 million resulting from higher debtors pertaining to sales

  • Despite higher Livestock turnover increasing Agency Services’ average working capital throughout the first half, the decrease of $6.4 million is attributable to receipts received from large clients during March

• Unfavourable Feed and Processing Services movement mostly relating to higher cattle inventory

Operating cash flow is slightly down $3.5 million on the pcp, driven largely by increased Rural Products working capital.

Movements in investing and financing cash flows relate to the purchase and funding of the AIRR acquisition in 1H20.

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1H21 Financial Performance: Net Debt

Decreased leases debt and less investing cash flow driving lower net debt at balance date

Net Debt

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Net debt, at balance date Net debt, YTD average
$m $m
319.7 326.3 331.3
263.9
1H20 1H21 1H20 1H21
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• Net debt at balance date is down $55.8 million to $263.9 million. This is mainly due to less debt relating to AASB 16 Leases, as well as lower investing cash flows, with the pcp including the acquisition of AIRR

• Conversely, average net debt is up $5.0 million to $331.3 million, relating to increases in the trade receivables facility in line with higher Retail Products debtors, offset by lower lease liabilities

Financial Covenants[1] Undrawn facilities at balance date were $236 million with significant headroom in our banking covenants:

• leverage is 0.2 (covenant < 3.5 times)

• interest cover is 29.3 (covenant > 3.5 times)

• net worth is $723.2 million (covenant > $250 million)

Key Ratios – rolling 12 months2	1H21	1H20	Change
Leverage(average net debt to EBITDA)	1.5	1.9	(0.4)
Interest Cover(EBITDA to net interest)	27.4	15.1	12.2
Gearing(average net debt to closing equity)	30.8%	31.2%	(0.6%)

• Excluding the impact of AASB 16 Leases all net debt ratios have improved on the pcp

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1 Calculated pursuant to definitions in group syndicated facilities 2 Excluding impact of AASB 16 Leases

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1H21 Financial Performance: Dividend Policy & Tax

Elders will pay an interim dividend of $0.20 per share, 20% franked, for the first half of 2021

Interim Dividend

Tax Losses

• Elders’ Dividend Policy (Policy) was reinstated in FY17, providing for a payout ratio of up to 35% of underlying NPAT

• In light of the continued strong performance of the business, the policy has been revised (with effect from 1H21) to provide for a payout ratio of between 40%-60% of underlying NPAT

• The Company paid a final dividend of $0.13 per share for the period ended 30 September 2020 following an interim dividend of $0.09 per share, both 100% franked. The pay-out ratio for FY20 was 31.4% (pre-tax)

• Elders will pay an interim dividend of $0.20 per share for the first half of FY21, 20% franked. This equates to a payout ratio of 45.8% of NPAT. The increase in the dividend from $0.13 to $0.20 more than offsets the post-tax impact of the reduction in franking percentage

• Elders has carried forward tax losses of $141.9m (tax effected), $119.6m on balance sheet and $22.3m off balance sheet. It is anticipated that all losses will be on balance sheet by 30 September 2021 and losses will be fully utilised around 2025 based on consistent financial performance

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On Balance Sheet
$22.3m
Off Balance Sheet
$141.9m
$119.6m
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Franking Credits

Tax Contribution to the Australian Economy

• Elders no longer has sufficient franking credits to pay fully franked dividends due to its significant carried forward tax losses. Elders forecasts that it will fully exhaust its carried forward tax losses around 2025 and then be in a position to pay fully franked dividends

• Whilst Elders only pays a small amount of corporate taxes due to a significant amount of carried forward tax losses, it has contributed to the Australian economy with the payment of Payroll Tax, Fringe Benefits Tax (FBT) and Goods and Services Tax (GST)

• However, it is forecast that franking credits from non-wholly owned interests such as B&W Rural and Elders Insurance will likely support continuation of partial franking until Elders recommences payment of corporate tax across the group

• Please refer to our 2020 Tax Transparency Report for more details

• Current forecasts indicate that a partial franking rate of 20% is sustainable based on dividend trajectory and the current number of ordinary shares on issue

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EIGHT POINT PLN
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Compelling shareholder returns Industry leading sustainability outcomes Most trusted Agribusiness brand OUR 2023 5-10% EBIT and EPS growth through the across health and safety, community, in rural and regional Australia AMBITION cycles at 15% ROC environment and governance OUR BUSINESS UNITS RURAL AGENCY REAL ESTATE FINANCIAL TECHNICAL FEED & PRODUCT S SERVICES SERVICES SERVICES PROCESSING 1 Win market share across all 2 Capture more gross margin 3 Strengthen and expand 4 Optimise our feed 5 Develop a OUR products, services and in Rural Products through our service offerings , and processing sustainability STRATEGIC geographies through client focus, optimised pricing, backward including Livestock and businesses in Killara program that is PRIORITIES effective sales and marketing integration and supply chain Wool Agency, Real Estate, Feedlot and Elders authentic and and strategic acquisitions efficiency Financial and Tech Services Fine Foods industry leading OUR 6 Systems Modernisation Program – invest in best of breed 7 Attract, retain and develop the best 8 Maintain unflinching financial ENABLERS solutions to improve customer experience, drive process and people and provide a safe and inclusive discipline and commitment to cost administration efficiency and better accommodate change working environment and capital efficiency OUR VALUES CUSTOMER INTEGRITY FOCUSED ACCOUNTABILITY TEAM WORK INNOVATION

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Third Eight Point Plan Progress

On track to deliver first year of the third Eight Point Plan (EPP)

Third Eight Point Plan Progress On track to deliver first year of the third Eight Point Plan (EPP)
Win market share ▪ Continued to grow our footprint through acquisition of Rural Products, Agency Services and Real Estate businesses and personnel, including six greenfield sites established in 1H21 ▪ Six bolt-on acquisitions completed in 1H21, to deliver $2.5-$3.5 million annual EBIT and a strong pipeline for further acquisitions ▪ Capitalising on current competitive environment through recruitment of high quality personnel and building new client relationships Capture more gross margin in Rural Products ▪ Margin increase gaining traction through backward integration via successful integration of AIRR and progressed maturity of the Titan AG business ▪ Improved pricing techniques and back office efficiencies ▪ AIRR synergies on track to deliver above expectations Strengthen and expand our service offerings ▪ Enhanced Animal Health product lines and brands through Pastoral AG and Hunter River ▪ Continued growth of our Financial Services offerings through our Livestock in Transit delivery warranty and new livestock financing products ▪ Strengthened customer solutions offerings ▪ Creating customer and partner production value through Thomas Elder Institute (TEI), Thomas Elder Markets (TEM) and Thomas Elder Consulting (TEC) Optimise our feed and processing businesses ▪ Improvements across the business through developments in technology, innovation and expansion ▪ Maintaining a target of 100% occupancy to drive efficiency and throughput ▪ On track to achieve key environmental and sustainability targets	Develop a sustainability program ▪ Sustainability embedded in Executive management meeting agendas ▪ Modern Slavery Statement and Ethical Contracting Framework launched to support responsible sourcing ▪ Action plan to full alignment with TCFD Recommendations on track ▪ Carbon footprint analysis and investigation of opportunities for reducing GHG emissions underway in line with climate change initiatives ▪ Engagement with key stakeholders, including major customers, on sustainability credentials ▪ Over $700,000 in sponsorships and donations
	Systems Modernisation Program ▪ New CIO appointed during the year ▪ Systems Modernisation will be a five year program and is currently in project initiation phase, which will be approved by the Board in the second half ▪ For the current 8PP: - Year 2 we are anticipating 15% of spend - Year 3 we are anticipating 36% of spend ▪ Over the five year period, on average 30% of opex and 70% of capex is expected
	People and Safety ▪ New CFO appointed post balance date ▪ 2 lost time injuries (LTI), compared to 1 last year, with target of zero ▪ LTI frequency rate at 0.8 compared to 2.2 last year ▪ 57 days lost, compared to 95 ▪ Launch of Thomas Elder Academy, internal program to upskill our network and promoting our key business priorities
	Costs, capital and efficiency ▪ Investment in strategic priorities, while improving cost to earn ratio ▪ 20.1% Return on Capital (ROC) improvement of 1.2%, mainly due to margin growth exceeding impact of capital growth ▪ 1.5x Leverage Ratio at the lower end of our targeted range of 1.5x-2.0x

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Sustainability

We are committed to developing a sustainability program that is authentic and industry leading

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1H21 Market Outlook

Following ongoing favourable rainfall events, a positive outlook for winter crop is forecast. COVID-19 remains a disruptor to global and domestic markets, however the business and broader industry continues to be adaptable

Rural Products
	▪	Continued rainfall has lifted farmer confidence and we expect to see further strong demand for crop inputs in the second half of the year, particularly fertiliser and crop protection products
	▪	Commodity price increases will put some pressure on margin, but it is expected this will be more than offset by enhanced pricing techniques and other point of sale efficiencies
	▪	Despite global supply chain disruptions, significant financial and operational impacts are not expected due to mitigating measures in place, such as early procurement of inventory
Agency Services1	▪	Cattle prices expected to ease from record prices in line with global beef prices, however restocking may support prices remaining firm
	▪	Sheep prices are forecast to fall in the medium term as the global supply of red meat increases, though increases in lamb slaughter and production are expected to keep our earnings stable
	▪	Wool prices will remain volatile until containment or vaccination measures to control COVID-19 are in place allowing supply and demand fundamentals to return
Real Estate Services	▪	High levels of demand for farmland is expected to continue, fuelled by favourable commodity price outlook, low interest rates and good seasonal conditions1
	▪	The residential property market supply is down by 25%2, whilst demand is up 35%2, which is resulting in significant price appreciation across Australia and strong demand for rental properties
	▪	People are seeking lower density living and lifestyle options, which is driving demand and substantial price increases in regional areas2
Financial Services	▪	Continued benefits from livestock financing expected with growth of new <$100,000 livestock funding product to complement the existing StockCo offer
	▪	Significant room for continued growth in Livestock in Transit product with further opt-ins
	▪	Continued growth in Insurance and Agri-Finance offerings through marketing and promotion with partners QBE and Rural Bank
Feed & Processing1	▪	A challenging remainder of the year for Killara Feedlot will continue to see difficulty sourcing animals at reasonable prices and volumes to service major export markets; this however should be
		partially offset by easing feed costs
Costs & Capital	▪	Costs are expected to increase in line with footprint growth, continued investment in our Eight Point Plan and the first phases of our Systems Modernisation program

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Sources:

1 Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), Agricultural outlook, Agricultural commodities vol.10 no.4 2 CoreLogic Residential Real Estate Property Data March 2021

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Appendix

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17
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FY20 Business Model*

Diversification by product, service, market segment and geography

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RURAL PRODUCTS
FEED & PROCESSING DIGITAL AND
AGENCY SERVICES REAL ESTATE SERVICES FINANCIAL SERVICES
SERVICES TECHNICAL SERVICES
RETAIL PRODUCTS WHOLESALE PRODUCTS
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Farm Supplies Fertiliser Farm Supplies Pet Supplies $1.4b retail sales 219 stores 809k tonnes fertiliser $0.2b wholesale sales 370 member stores 419 APVMA registrations	Livestock Wool Grain 9.6m head sheep 1.8m head cattle 145k wool bales	Farmland Residential Property Management	Agri Finance StockCo (30%) Elders Insurance (20%) LIT & WIT Delivery Warranty $3.0b loan book1 $1.7b deposit book1 $76.2m StockCo book1 $727.6m gross written premium2	Killara Feedlot Elders Fine Foods Killara 65k head China $14.4m sales
					Fee for Service (170+ agronomists)
					Auctions Plus (50%)
					Elders Weather
		Franchise			Clear Grain Exchange (30%)
		$1.3b farmland sales $0.9b residential sales 111 franchises 9,371 properties under management
					Auctions Plus	865k head sheep
						113k head cattle
					Elders Weather	1.2m active users
					Clear Grain Exchange	51k grain tonnes

FY20 gross margin contribution

40% 10%[4] 29% 9% 8%

3%

n/a[2]

*Based on FY20 full year statistics

• 1Principal positions are held by Rural Bank, StockCo and Elders Insurance (QBE subsidiary) respectively

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2Existing agronomic activity presented within Retail margin, Elders Weather in Other margin, and Auctions Plus and Clear Grain Exchange in Agency margin 3AIRR acquisition settled 13 November 2019 with over 10 months earnings in FY20

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1H21 Results by Business Segmentation

Retail and Wholesale Products plus Agency Services have the largest influence on Elders margin

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RURAL PRODUCTS
REAL ESTATE FEED & PROCESSING
AGENCY SERVICES FINANCIAL SERVICES OTHER
WHOLESALE SERVICES SERVICES
RETAIL PRODUCTS
PRODUCTS
1H21 Margin ($m)
NSW Killara Feedlot 37.7
QLD & NT 31.2
VIC & RIV 58.2
Farmland, Residential,
Farm Supplies and Livestock, Wool and Agri Finance and
Farm and Pet Supplies Property Management
Fertiliser Grain Insurance
SA and Franchise 37.1
TAS 8.1
WA 45.8
CHINA China 0.4
OTHER (6.2)
1H21 Margin ($m) 90.9 29.3 77.0 24.2 20.5 5.9 (6.2) 241.6
Avg. Working 265.8 89.1 67.9 1.3 32.4 58.5 (32.0)
Capital ($m)
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Profit Sensitivity

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UNDERLYING SHEEP CATTLE RETAIL AGCHEM FERT KILLARA SG&A
EBITDA $ VOL $ VOL SALES GM% GM% GM% UTILISATION
$7.5m
$5.0m
+50bps
$2.5m
+100 bps +100 bps
+$10 +500k +$50 +100k +$25m +100bps
head head sales +10%
$0
-500k -100k -$25m -10% -100bps
-$10 head -$50 head sales
($2.5m)
-100bps -100bps
-50bps
($5.0m)
($7.5m)
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Based on FY20 Full year statistics

20

*SG&A excludes depreciation & amortisation

Points of Presence

We have approx. 500 points of presence in Australia, catering to the needs of a variety of agricultural regions. We also supply a further 350+ sites with product through our wholesale members

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21

Strategic Opportunities

Significant growth opportunities to gain share by capturing new customers and expanding offering to existing customers, in new geographies, with our multiple product and service portfolio

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Victoria
EBIT Scale
Rural Products
Real Estate
4m+
3m
<1m 2m Agency
Feed & Processing
Indicative view of size of opportunity
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Focus on increasing market share and presence in Retail Products high value areas, including Western Victoria, South Coast WA, Northern Queensland and Central NSW Growth in targeted locations through footprint Agency Services expansion and personnel gains Expansion of owned sites and franchise locations, Real Estate Services particularly in Greater Perth and regional Victoria Develop Livestock funding and insurance products, Financial Services alongside our general insurance partnership in all regions Feed & Processing Opportunities to expand offerings in central NSW Services region

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Industry and Market Outlook (Long Term)

Market		Summary of Outlook	Long Term Market Outlook	Relevance to Elders
AGRICULTURAL	▪	The gross value of Australia’s agricultural production is estimated to hit a record $66 billion in 2020-21 primarily due to winter crop	Neutral
PRODUCTION &	▪	2021-22 is forecast to fall to $63.3 billion, with the medium term outlook to 25/26 for production to remain above $60 billion
EXPORTS	▪	Farm exports are expected to increase in 21/22, driven by higher cotton, wool and dairy exports		High
	▪	Prices are expected to stabilise in the first half of 2021 before trending down through 2021-22 due to slower restocking activity, with prices forecast to
CATTLE	▪	continue falling through to 25/26 but well above long term average Live export and chilled beef volumes are forecast to marginally rise in 2021-22, from a low base, as Australian cattle becomes marginally more competitive in the world market	Neutral	High
	▪	Prices forecast to remain high and steady during 2021-22 due to ongoing supply shortages and strong global demand	Neutral
SHEEP & WOOL	▪	National flock rebuilding through to 2025, with resulting positive impact on supply and downward pressure on prices in the medium term
	▪	In the short to medium term, wool price growth is expected to be dampened by the over supply of wool due to low auction offerings relative to volumes		High
		in 2019-20
	▪	Farmgate milk prices to increase as global supply growth remains less than global demand growth	Neutral
DAIRY	▪	Increased dairy herd size will improve prices paid by domestic milk processors
	▪	Stability in world process is forecast for the medium term		Low
GRAINS & OILSEEDS	▪ ▪ ▪	Australian barley prices are expected to rise in 21/22 due to falling domestic production and stable export demand. Medium term prices are projected to increase further over the outlook period (2025-26) Oilseed prices are forecast to increase due to global demand increases (especially feed demand) greater than supply growth Australian production of canola is forecast to be lower in 2021-22 when compared to 2020-21, but above the long term average due to improved seasonal	Neutral	High
		conditions and an increase in areaplanted
SUGAR & COTTON	▪ ▪	Cotton production and prices are both forecast to increase as water availability increases planted area and yield and global demand returns to pre COVID- 19 levels by 2022 Sugar production and process are both forecast to increase due to rainfalls improving yields and a global sugar shortage	Neutral	Medium
	▪	Gross value of Australian horticulture is projected to increase to $12.8m in 2024-25 (2018-19: $11m), largely driven by increased fruit and nut production	Neutral
HORTICULTURE		due to rising demand in China
	▪	Domestic prices are forecast to increase as production levels recover		Medium

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Source: ABARES Agricultural Overview, March quarter 2021

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