Australian Agricultural Company Limited

Good morning and thank you for joining AACO's results presentation for financial year 2022. I'm Hugh Simmons, Managing Director and CEO of AACO. And joining me today is our Chief Financial Officer, Nigel Simmons. I will start our presentation this morning by running through the key highlights of our company's performance. I will then take a closer look at our progress against strategy in FY22 and how it has helped us deliver these results. followed by how our strategy will provide ongoing growth opportunities in the future and after this I'll go through our regional and brand progress for the year in more detail. I'll then hand over to Nigel to take us through the financials, after which I'll briefly discuss sustainability with you and I'll finish that with an update on our operating environment as we move into financial year 2023. Before I continue, let me tell you a little bit about AACO. The Australian Agricultural Company, known as AACO, is one of Australia's largest integrated cattle and beef businesses. Established in 1824, AACO is the oldest continuously operating company in Australia. We own and operate around 6.4 million hectares of land across Queensland and the Northern Territory. At AACO, we undertake three principal activities. Distribution of high-quality ground and beef into global markets. Breeding, growing and feed-bottoming of our animals. and ownership, operation and development as partial properties. And it's important for you to understand our purpose and why we exist. We're evolving together to benefit future generations. To do what we do best we must continuously adapt and change. This is why we've been around for nearly 200 years and it is how we will continue to adapt to the major challenges of the future. The land we nurture, the people we grow, the animals we care for and the exceptional product are the hallmarks of our success and a responsibility we take extremely seriously. Our spirit of craftsmanship, combined with years of experience cultivating cattle on our pristine pastoral efforts, is unique to our country and our company. And we take great pride in that. It's what positions us internationally as the finest producers of Australian wheat here. But we are only today's custodians, and we feel it's our business to leave our world in a better shape for the generations to come.

Now, let's turn through our objective summary on slide number six. I'm pleased to report that we delivered an excellent set of results this year.

They are testament to our focus delivery on strategies, the improved performance of our brands and markets, and our drive to make AHL a simpler and a more efficient business. We delivered an operating profit increase of 105% to $49.9 million, driven mainly by improved operating margins. Average region meat sales price per kilo increased by 21% and cattle sales margins also grew. Our branded beef program continues to show strong progress. West Ham and Darling Gowns now represent 83% of branded meat sales. And we launched our sustainability framework, supporting positive change through our business, industry and communities. On the balance sheet, we successfully refinanced our debt facilities and saw further strengthening of our asset position. In addition to the $264.5 million increase in our past for profit and improvement values, the values I heard also increased by $199 million, helping to drive net assets to $1.36 billion and leading to a significant increase in AOK's NTAs per share to $2.27. Overall, our bottom line statutory net profit after tax increased by $91 million to $136.9 million. This is our strongest net profit result this listing on the ASX. Turning now to slide 7 and a closer look at our progress against strategy in FY22. The results we have delivered this year have come off the bankrupt tree winds under our strategic pillars. ASO achieved significant growth in the branded meat sales with a focus on price premiumisation. That resulted in a further 21% increase in waging meat sales priced per kilogram compared to F421. West Holme and Darling Downs now represent 83% of branded meat sales, an increase of 9% at the same time last year. And we also achieved significant growth in team markets, particularly North America where branded meat sales have increased by 56% versus PCP. We welcomed the successful launch of our Sustainability Framework in FY22, and it's set about building on this platform. In addition to launching that framework, AACO also generated 74,000 Australian carbon credit units through our Beast Cattle Herd Management carbon project. AACO is now an even safer and a better place to work. We've had a 10% improvement in lost time injury frequency rates compared to FY21. and we have gold-level recognition from Mental Health First Aid Australia. Our disciplined focus on costs and the drive to make AACO a simpler and more efficient business has also continued in FY22. This resulted in a 36% reduction in the cost of production in FY22 versus the total comparative period. Moving on to slide 8 and how we're positioned to continue building on our strengths in FY23. Our purpose and vision statement sit at the centre of our plans for growth. Leveraging the foundations put in place to continue delivering under our strategic pillars. A simpler and more efficient America, where we will continue to improve operational efficiencies and develop a data strategy focused on value creation. Delivering full potential from our brands, where we will focus on further building our presence in the USA and drive the growth of Westpac. Executing our sustainability framework, where we will look to accelerate our sustainability program through our five commitments, and work hard to mitigate our climate impact and also produce food in a way that benefits future generations. Developing our natural resources and assets, where we're extending our golf farming trials and exploring the potential for alternatives at that unit. Making AOTO a great place to work, which will focus on connecting our people to our purpose and amazing great leaders. We will invest back into the business under these strategic pillars. In doing so, we will be able to build on our strong FY23 results and further grow the company as we look to our 200th anniversary in 2024.