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Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference

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Page 1: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference

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

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

Highlights – first half 2002

Page 4: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference

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

Business Operations

Page 6: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference

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

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

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

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

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

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

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

Business Drivers

Page 14: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference

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

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

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

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

Growth Strategy

Page 19: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference

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

Challenges & Opportunities

Page 21: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference

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

Full Year Outlook

Page 23: Andrew Lindberg Managing Director & Chief Executive 10 April 2002 UBSW Emerging Companies Conference

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

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

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

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]