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An Introduction to AWB
Andrew LindbergChief Executive
AWB Limited
Covering today….
• Why it’s appropriate for AWB to present today
• Australian and global wheat industry
• What AWB does and how the company will grow
• Investment attributes
• Challenges and strategies
• Corporate structure
• Regulatory issues
• 2000 financials
• Management and Board
• Listing
Why present at a financial services forum?
Breakdown of2000 Financials
NPAT of $63.3mNPAT of $63.3m
Pool Activities10%
Pool Activities10%
Trading and Other22%
Trading and Other22%
Financial and Risk Products
68%
Financial and Risk Products
68%
93%93%
55%55%
88%88%
78%78%
73%73%
Australia exports 80% of its total average wheat production
Wheat production is about 21 million tonnes
Australian wheat industry
Global wheat trade
Canada19%
Canada19%
1999/2000total wheat trade 100 million tonnes
EU16%EU
16%Other8%
Other8%
Argentina9%
Argentina9%
Australia18%
Australia18%
USA30%USA30%
• Grain technology and seeds
• Grain acquisition
• Domestic logistics
• Pool management and trading
• Risk management & finance
• International grain marketing
What does AWB do?
AWB is integratedacross the value chain
450 employees30 offices in Australia and overseas
AWB offices throughout wheat belt
Wheat Management Traded Share
AWB 18mt 18%
Cargill/Continental 18mt 18%
Canadian Wheat Board 11mt 11%
ADM 8mt 8%
Louis Dreyfus 7mt 7%
Wheat Management Traded Share
AWB 18mt 18%
Cargill/Continental 18mt 18%
Canadian Wheat Board 11mt 11%
ADM 8mt 8%
Louis Dreyfus 7mt 7%
AWB is the largest global wheat manager
Source: USDA, company reports, company interviews
Estimate of wheattonnes under management, 2000
• Financial & Risk Products
• Trading
• Pool Services
• Grain Technology
• Supply Chain
How will AWB grow?
AWB’s core business streams
Investment attributes
• Largest global wheat manager
• Unparalleled expertise in wheat marketing
• Substantial customer base
• Holder of the single desk
• Growth in Asian population & wheat product consumption
• Potential to leverage customer base to deliver a broad range of financial and risk management services
• Potential to extend the customer base to all grain producers and end users
• Scope for geographical expansion
• Strong balance sheet and dividend paying capacity
• Competition for financial services revenue with banks and other providers
• Increasing supply chain costs as a consequence of limited investment and poor contract management
• Entry of international integrated grains companies into the Australian wheat export market
• Emergence of an online global grain exchange
What challenges does AWB face?
1. Win grower mandates
2. Extract value from the supply chain
3. Secure end-user demand
4. Sustain trading out-performance
5. Lead in grain technology
Respond with 5 pronged strategy
WINNING:AWB is the
dominant Asset Manager
for Australian Grain
• Unlisted public company (1 July 1999)
• Dual class
• 35,000 A class shareholders• 1 share each with weighted voting
• 67,000 B class shareholders• 241m shares issued
• Balance shareholder & grower interests
Corporate structure
• Domestic wheat market is fully deregulated
• Bulk export wheat is marketed by AWB via
the Wheat Marketing Act legislation
• NCC review of the Export Single Desk
• Commonwealth Government decision
• 2004 review of AWB’s export performance
Regulatory issues
• Operating revenue: $1.8 billion
• Related revenue: $3.8 billion (national pool)
• NPAT: $63 million
• EPS: 26 cents
• DPS: 22 cents
• Shareholders equity: $629 million
• ROE of 10.1%
2000 financial results
Andrew LindbergCEO
Peter GearyGroup GM Trading
Management
Jill GillinghamCIO
Paul InglebyCFO
Tim GoodacreGroup GM Sales & Marketing
Board of directors
• The Board has a commercial balance of
relevant skills• investment banking• risk management• marketing• production• logistics
• Chairman - Trevor Flugge
• Deputy Chairman - Rob Barry
• Process• pre-marketing – early June• prospectus – end June• issue – end June to end July• listing - August
• New equity raised • institutional offer• retail offer• options for existing shareholders
Listing