Elders Limited

Thank you very much and welcome to all for the elders full year results presentation for the FY23 year. Thank you for joining Paul and myself for the session today. From an elders viewpoint, this is the final year of our third eight point plan. The elders philosophy since the first eight point plan in 2014 has been to control what we control and not to dwell on what we can't control. To have a cost and capital structure to allow us to make good returns in bad years and to make great returns in good years. The FY23 results are an example of acceptable returns in very difficult market and cost conditions. In fact, this result is the second highest result in the last 10 years for Elders. We use our multiple diversifications by product, service, geography, crop segment, commercial model and channel to market and our financial discipline to deliver consistent and high returns for our stakeholders. In summary, we aim to control what we can control. Over the first two years of our third eight-point plan, and more specifically in FY22, we experienced exceptionally strong and early market conditions across most production enterprises and geographies. We also had positive livestock prices, winter crop and summer crop conditions with unseasonable rainfall, all resulting in a record profit last year. Our view in November last year was that the exceptional FY22 results would normalise to average conditions in FY23. Although we expected a reduction in livestock prices, we did not foresee near 60% drops in cattle and sheep prices over a very short period of time. In this context, the performance of Elders with its clear and consistent strategy, multiple diversifications, high financial discipline, hardworking and committed team and enduring customer anchor as the most trusted brand in Australian agriculture, the result is very solid. As mentioned, our second highest profitability in 10 years. The result is strong in safety, sustainability, profit, return on capital and cash conversion, maintaining a strong balance sheet through a very difficult year and setting us up for the next eight point plan. Our commitment is to provide 5% to 10% growth in EBIT and earnings per share at a minimum of 15% return on capital in a sustainable manner through a safe and inclusive workplace. The results today are consistent with our 5% to 10% growth through the cycles commitment with the annual growth through the last five years with a CAGR approaching 25%. Our approach for the day is that I will provide an overview of the results. Paul will go through to the detail of our financial performance, and then I'll provide an update of our outlook and growth and transformation initiatives as we commence our fourth eight-point plan.

So with that, I'd like to move to the key investment drivers. You can see as we run through the key investment drivers in terms of EPS growth,

a commitment of 5% to 10% growth of EPS and EBIT through the cycles at above 15% return on capital. So over the three eight point plans, so the last nine years, EPS CAGR of 57% with ROC greater than 15% throughout the period and a dividend payout between 40 to 60%. And this year, as you'll see in the notes above that for the payments. When we look at the geographical product and channel diversification, I think we talk a lot about our diversified model, and this allows us to make money through the cycles, as we've mentioned. And when we go to the GM slide on page 20, the pool will go into detail. You will see the impact of the multiple diversifications at product and service, and then the following slide at geographical level. In terms of attractive market and company outlook, It's a very, very positive outlook for food and agri. We talked about the cycles and the impacts of various uncontrollables, but in reality, as we can see by the slides coming up, we've had strong and high-quality growth through the cycles. In terms of transformational initiative benefits, again, we'll talk to the detail, but we do have the two biggest projects around our systems modernisation projects. and our Rural Product Supply Chain Optimisation Project are looking to provide benefits towards the end of FY24 and into FY25. Significant pipeline of new opportunities. So this year we talked about, we reported in on nine acquisitions, bolt-on acquisitions. There are some 16 candidates in our pipeline. And as we've mentioned previously, a universe of 1800 rural service branches around Australia, 900 of which are independent. and therefore opportunities for us with our bulk and acquisition strategy. And at a market share of roughly across all of our products and services of around 20%, significant room for growth for the business. And then finally, on our robust balance sheet and supporting growth, We've often talked about our high financial discipline. You've seen us make commitments at the half year with regard to cash conversion, with regard to cost management and efficiency, and they have been delivered and exceeded as we come into the full year. Paul will talk to that detail later. It's worth noting that we've finished the year at 1.5 times leverage with our guiding range, sorry, 1.4 leverage with our guiding range 1.5 to 2 times. So moving to the next slide, and again, just to emphasise what's happened with the eight point plans over multiple El Ninos, La Ninas, geopolitical issues, and many pandemics, et cetera, over the period of the first three eight point plans. And you can see the slides or the headings down the bottom talking about the uncontrollables, the climatic events, and you can also see under each eight point plan, how we've performed against a commitment of five to 10% growth in EBIT and earnings per share, and above 15% return on capital. So the first eight point plan, 30 year, sorry, 735% growth from business from turnaround, ROC of 25.7%. Second eight point plan, as we ran through drought years, so significant drought years, we've had the EBIT growth CAGR of 22.8% and ROC of 20.9% through that period. And then the third eight point plan as we ran from drought into La Nina and then finished off with a shadow of El Nino predictions. As you can see the EBIT growth of 17% through the cycles, EPS 13.6 and ROC of 21.6%. So obviously highlighting highly residual resilient business model that we put in place through the eight point plan period the fourth eight point plan we'll talk about later is cut from the same cloth in the same market and with largely the same executive team to deliver if you look at the next slide from an operational viewpoint you've seen a reduction in both lost time injuries and total recordable injury frequency rate. It's great progress. We've held our very strong net promoter score at 48. We go across with holding at 43% women in the workforce, but importantly, up to 20% women in senior positions. A long way to go, but it's also a long pathway from our first state plan when we started with 4% of women in management positions. Our employee engagement remains above high performing through the corn ferry assessment mechanism at 77%. So very strong engagement and enablement. And then of course, right in the middle for the fourth year in a row, the number one most trusted agribusiness brand amongst farmers. So going to the next slide. And you can see the pathway in lost time injuries. In fact, when you go right back to the first eight point plan, there were 34 lost time injuries. And so we've seen great progress there. And then with total recordables, you also see a clear trend line. And it's worth noting that there's been great progress within the wholesale business and we continue to make strong progress. The next slide in our sustainability performance, We issued our first report a few years ago and have made good progress across a number of the climate targets we set where we launched our way in terms of progress and launched our sustainability framework, established Thomas Eldon Sustainable Agriculture, which does support the front end and many other clients in terms of innovation efforts in sustainability, joined the Big Bag Recovery Program, which is an equivalent program to Drummaster, and Drummaster over the years having recycled some 53 million containers. Our targeted solar and LED lighting upgrades and also the solar farm development at Collara Feedlot. So then taking to the financial highlights with the next slide, above the middle of the range that we gave in terms of underlying EBIT at $170.8 down on FY22, but as mentioned, the second highest in 10 years. 16% return on capital with a target of 15%. Weight average cost of capital is in the realm of 8%, so significant shareholder value driving performance. Cash conversion, we exceeded our commitment of 90% that we made after half a year, and we do have in policy, and that has been another great result. And as mentioned, leverage ratio at 1.4 times against our target of 1.5 to two times. So in summary, before I hand over to Paul, in a very difficult year, it's a solid outcome, second best profit in 10 years and high quality return on capital and cash generation. So with that, I'll hand over to Paul.