r idley c orporation

RIDLEY CORPORATION

INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM RESOLUTIONS OUTLOOK

23 February 2010

HALF YEAR RESULTS PRESENTATION

31 DECEMBER 2009

2

AGENDA

INTRODUCTION

FINANCIALS

AGRIPRODUCTS

CHEETHAM SALT

PROPERTY

OUTLOOK

INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

3

RIDLEY TRANSFORMEDINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

Sale of Ridley Inc. - clean, lowly geared balance sheet

Cheetham capital upgrades nearing completion – uplift in earnings in FY11

Record Ridley AgriProducts result for first half – FY10 follows record result for FY09

Unlocking unrealised land value underway – long term journey

No significant items – first time for 5 years

Further growth potential to be unlocked

Sale of Ridley Inc. - clean, lowly geared balance sheet

Cheetham capital upgrades nearing completion – uplift in earnings in FY11

Record Ridley AgriProducts result for first half – FY10 follows record result for FY09

Unlocking unrealised land value underway – long term journey

No significant items – first time for 5 years

Further growth potential to be unlocked

4

FINANCIAL HIGHLIGHTSINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

Group NPAT of $14.9m

$12.6m or 555% increase over same period last year

No significant items for first time in five years

Record EBIT six month result for Agriproducts of $13.7m

Predictable, stable result for Cheetham Salt

Lower finance expense reflects sale of Ridley Inc.

Interim dividend of 3.5c per share maintained

Group NPAT of $14.9m

$12.6m or 555% increase over same period last year

No significant items for first time in five years

Record EBIT six month result for Agriproducts of $13.7m

Predictable, stable result for Cheetham Salt

Lower finance expense reflects sale of Ridley Inc.

Interim dividend of 3.5c per share maintained

Profit & Loss 1HFY09

1HFY10

EBIT - Agriproducts 10.3 13.7

EBIT - Cheetham 9.4 9.5

Salt Joint Ventures 3.7 3.8

Corporate Costs (5.5) (3.6)

Significant items net tax (6.9) -

Result from Operations 11.0 23.4

Net Finance Expense (7.7) (3.5)

Tax Exp. excl sig. items (1.0) (5.0)

Net Profit 2.3 14.9

RIDLEY AGRIPRODUCTS

RESULTS PRESENTATIONINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

6

HIGHLIGHTS

1H FY10 highlights:

Poultry: Inghams contract, plus reopening of Clifton Mill

Aqua: Inverell mill opening, Tassal, Huon and Clean Seas contracts

Dairy: down $6.0m on an annualised basis

Supplements: pushing hard for break even result (losses of $2.5m in FY09)

Annualised cost savings of $5m delivered ($2.0m further savings from FY09)

Growth over the next 3 years from:

Step ups in poultry and aquafeed contracts

Increased focus on packaged products

FY09 normalised base EBIT of $26.4m targeted growth to:

$28.0m by June 2010

1H FY10 highlights:

Poultry: Inghams contract, plus reopening of Clifton Mill

Aqua: Inverell mill opening, Tassal, Huon and Clean Seas contracts

Dairy: down $6.0m on an annualised basis

Supplements: pushing hard for break even result (losses of $2.5m in FY09)

Annualised cost savings of $5m delivered ($2.0m further savings from FY09)


Step ups in poultry and aquafeed contracts

Increased focus on packaged products

FY09 normalised base EBIT of $26.4m targeted growth to:

$28.0m by June 2010


7

MARKET SEGMENTS

Poultry: growth from Inghams relationship, growth of second tier independent broiler processors, market growth of chicken consumption and growth in niche turkey, layer and duck market sectors

Aquafeed: new contracts with Tassal, Huon and Clean Seas, market growth, and growth in market share

Packaged Products: reduction in Dairy volumes for packaged products offset by strong margin management

Dairy: looking for second half improvement from slow recovery in global dairy prices

Pig: looking to secure new business to replace expected loss of a major customer in FY11 arising from backward integration

Supplements: targeting a break even result from losses of $2.5m in FY09

Beef & Sheep: rainfall in SE Australia affected demand in first half; outlook for continued low volume and contribution to the business overall.

Poultry: growth from Inghams relationship, growth of second tier independent broiler processors, market growth of chicken consumption and growth in niche turkey, layer and duck market sectors

Aquafeed: new contracts with Tassal, Huon and Clean Seas, market growth, and growth in market share

Packaged Products: reduction in Dairy volumes for packaged products offset by strong margin management

Dairy: looking for second half improvement from slow recovery in global dairy prices

Pig: looking to secure new business to replace expected loss of a major customer in FY11 arising from backward integration

Supplements: targeting a break even result from losses of $2.5m in FY09

Beef & Sheep: rainfall in SE Australia affected demand in first half; outlook for continued low volume and contribution to the business overall.

Segment (kt) 1HFY09

∆ 1HFY10

Poultry 354 371

Aqua 16 24

Packaged 59 48

Dairy 166 110

Pig 167 163

Supplements 13 21

Beef & Sheep 23 19

Other 30 34

Total Tonnes 827 790


8

FINANCIAL SUMMARY

Fall in sales reflects downturn in Dairy

Record six monthly EBIT result of $13.7m

Working capital decrease due to lower grain prices and inventory and debtors management

Major capex focus on implementation of new ERP plus investment in Aquafeed expansion at Inverell of $1.2m

Cash flow conversion of 119%

Fall in sales reflects downturn in Dairy

Record six monthly EBIT result of $13.7m

Working capital decrease due to lower grain prices and inventory and debtors management

Major capex focus on implementation of new ERP plus investment in Aquafeed expansion at Inverell of $1.2m

Cash flow conversion of 119%

AgriProducts (A$m) 1HFY09

1HFY10

Sales ($) 399.5 324.9

EBIT 10.2 13.7

Depreciation 3.5 3.3

EBITDA 13.7 17.0

Net Working Capital Change 10.8 3.2

Operating Cash flow pre-capex 24.5 20.2

Maintenance Capex (1.0) (0.8)

Operating Cash flow post-capex 23.5 19.4

Development Capex (2.1) (3.4)

ERP Capex (1.7) (3.6)

Asset Sales 0.2 0.5

Net Cash flow pre interest & tax 19.9 12.9

Op Cash flow % : EBITDA 179% 119%

Working Capital 39.3 26.7

Funds Employed 133.7 129.5


CHEETHAM SALT

RESULTS PRESENTATIONINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

10

HIGHLIGHTS

1H FY10 highlights:

Port Alma salt harvest returns to normal cycle

Bajool refinery upgrade fine tuning to be completed by March 2010

Indonesian refinery commenced operating in February 2010


Underlying base business and JV growth in line with GDP

Realising the benefits from capital improvements

Manufacturing & supply chain efficiency and effectiveness improvements

Efficiency benefits to flow from ERP implementation

FY09 normalised base EBIT of $17.7m targeted growth to: $18.0m by June 2010

1H FY10 highlights:

Port Alma salt harvest returns to normal cycle

Bajool refinery upgrade fine tuning to be completed by March 2010

Indonesian refinery commenced operating in February 2010


Underlying base business and JV growth in line with GDP

Realising the benefits from capital improvements

Manufacturing & supply chain efficiency and effectiveness improvements

Efficiency benefits to flow from ERP implementation

FY09 normalised base EBIT of $17.7m targeted growth to: $18.0m by June 2010


11

MARKET SEGMENTS

Salt demand: typically grows in line with population growth and GDP

Soda Ash: influenced by Penrice demand

Chemical: influenced by chlor-alkali demand which is expected to be up with one more bulk shipment

Food: stable with reduced use of salt in food being offset by population growth and a switch to iodised salt in baking

Pool: growing with increased demand from both new pools as well as preference for salt over chlorine

Hide: influenced by lower slaughter numbers

Stockfeed: influenced by pasture growing conditions, particularly in Queensland

Exports: 7% increase in volumes to New Zealand JVs and Japan

Indonesia: stable but expect to grow with new refinery

Salt demand: typically grows in line with population growth and GDP

Soda Ash: influenced by Penrice demand

Chemical: influenced by chlor-alkali demand which is expected to be up with one more bulk shipment

Food: stable with reduced use of salt in food being offset by population growth and a switch to iodised salt in baking

Pool: growing with increased demand from both new pools as well as preference for salt over chlorine

Hide: influenced by lower slaughter numbers

Stockfeed: influenced by pasture growing conditions, particularly in Queensland

Exports: 7% increase in volumes to New Zealand JVs and Japan

Indonesia: stable but expect to grow with new refinery

Segment-Tonnes

1HFY09

∆ 1HFY10

Soda Ash 289k 290k

Chemical 85k 90k

Food 49k 50k

Pool 36k 38k

Hide 36k 30k

Stockfeed 23k 26k

Export 57k 63k

Indonesia 34k 33k

Other 15k 13k

Total 624k 633k

INTRODUCTION FINANCIALS AGRIPRODUCTS CHEETHAM PROPERTY OUTLOOK

12

FINANCIAL SUMMARY

Stable EBIT result of $9.5m before JV’s, up 2% on same period in prior year but impacted by $1.5m of start up costs of Bajool refinery

Bajool refinery upgrade and new Indonesia refinery the bulk of the development capex activity

$2.5m proceeds of Corio property asset sale

JV dividends reduced for the half year to fund major JV upgrade from JV operational cash flows; normal flows to resume in 2H FY10

Cash flow conversion ratio of 83%

Funds employed reflects 30 June 2009 reduction in salt field carrying values

Stable EBIT result of $9.5m before JV’s, up 2% on same period in prior year but impacted by $1.5m of start up costs of Bajool refinery

Bajool refinery upgrade and new Indonesia refinery the bulk of the development capex activity

$2.5m proceeds of Corio property asset sale

JV dividends reduced for the half year to fund major JV upgrade from JV operational cash flows; normal flows to resume in 2H FY10

Cash flow conversion ratio of 83%

Funds employed reflects 30 June 2009 reduction in salt field carrying values

Cheetham (A$m) 1HFY09

1HFY10

Sales ($) 52.3 56.9

EBIT (excl. JV NPAT) 9.3 9.5


EBITDA 11.7 11.6

Net Working Capital Change (2.0) (2.0)



Operating Cash flow post-capex 8.7 8.5


ERP Capex (0.9) -

Asset Sales - 2.5

Net Cash flow pre JV’s 6.3 4.9

Joint Venture Dividends 1.7 0.9


Op Cash flow % : EBITDA 83% 83%

Working Capital 43.4 37.3

Funds Employed 262.1 240.6


PROPERTY


DRY CREEK316ha located 12kms

from Adelaide CBD

LARA912ha site at Lara adjacent to Avalon

airport

14

DRY CREEKINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

Background

Key asset is the potential Dry Creek redevelopment, 12kms from Adelaide CBD.

Site area of 980ha of which Ridley owns 316ha with the balance owned by the South Australian Government’s Land Management Corporation (LMC)

Feasibility study for the potential redevelopment of the salt fields for residential and/or mixed-use development continuing with partner Delfin Lend Lease

State Government 30 year plan for Greater Adelaide, within which the Dry Creek salt field has been nominated as a “key urban expansion” site.

Status

Feasibility study extended to June 2010

Fine tuning of Project Master Plan

Technical studies into the relocation of the salt fields continue

Evaluation of commercial options to continue over CY2010

Background

Key asset is the potential Dry Creek redevelopment, 12kms from Adelaide CBD.

Site area of 980ha of which Ridley owns 316ha with the balance owned by the South Australian Government’s Land Management Corporation (LMC)

Feasibility study for the potential redevelopment of the salt fields for residential and/or mixed-use development continuing with partner Delfin Lend Lease

State Government 30 year plan for Greater Adelaide, within which the Dry Creek salt field has been nominated as a “key urban expansion” site.

Status

Feasibility study extended to June 2010

Fine tuning of Project Master Plan

Technical studies into the relocation of the salt fields continue

Evaluation of commercial options to continue over CY2010

15

FINANCIALSINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

PROFIT AND LOSS

CAPITAL EXPENDITURE

NON TRADING ITEMS

BALANCE SHEET

WORKING CAPITAL

DEBT BRIDGE

CASHFLOW

FINANCIAL RATIOS

16

PROFIT AND LOSSINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

Profit & Loss (A$m) 1HFY09

1HFY10

Revenue 451.8 381.8

EBIT - Agriproducts 10.3 13.7

EBIT - Cheetham 9.3 9.4

Salt Joint Ventures 3.8 3.8

Corporate Costs (5.5) (3.6)

Result from Operations 17.9 23.4

Net Finance Expense (7.7) (3.5)

Tax Expense (2.5) (5.0)

Significant items net tax (6.9) -

Net Profit 2.3 14.9

Average Shares (million) 307.8 307.8

EPS post sig. items (cps) 0.8 4.9

Interim dividend per share 3.5 3.5

Corporate cost savings realised of $1.9m over the same prior year period after additional $0.5m FY10 spend on property development

Net finance cost reflects full six months of current debt levels

25% effective tax rate arises from ongoing permanent differences from salt JV distributions, R&D tax concession and other perennial deductions

No significant items

No dilution from equity issues

EPS of 4.9c

Unfranked dividend of 3.5 cps and annual dividend of 7c per share maintained

Corporate cost savings realised of $1.9m over the same prior year period after additional $0.5m FY10 spend on property development

Net finance cost reflects full six months of current debt levels

25% effective tax rate arises from ongoing permanent differences from salt JV distributions, R&D tax concession and other perennial deductions

No significant items

No dilution from equity issues

EPS of 4.9c

Unfranked dividend of 3.5 cps and annual dividend of 7c per share maintained

17

BALANCE SHEET

Balance Sheet (A$m) 1HFY09

1HFY10

Total Current Assets 206.3 186.2

Total Current Liabilities 133.1 112.2

Net Current Assets 73.2 74.0

Property Plant and Equipment 249.2 226.4

Investments 44.2 46.3

Intangibles 21.4 27.6

Other Non Current Assets - -

Total Non Current Assets 314.8 300.3

Borrowings 89.4 87.1

Deferred Tax Liabilities 6.9 4.7

Provisions 2.1 1.0

Total Non Current Liabilities 98.4 92.8

Net Assets 289.6 281.5


Reduction in Total Current Assets reflecting the significant working capital reduction

PPE (and net assets) decrease reflects revaluations booked at 30 June year end.

Investments in the salt joint ventures have increased due to withholding of cash dividends to finance NZ development capex

Increase in intangibles associated with the implementation of the new ERP platform

Reduction in borrowings from cash flow, with gross debt of $87.1m and net debt $78.4m as at 31 December 2009

Reduction in Total Current Assets reflecting the significant working capital reduction

PPE (and net assets) decrease reflects revaluations booked at 30 June year end.

Investments in the salt joint ventures have increased due to withholding of cash dividends to finance NZ development capex

Increase in intangibles associated with the implementation of the new ERP platform

Reduction in borrowings from cash flow, with gross debt of $87.1m and net debt $78.4m as at 31 December 2009

18

WORKING CAPITAL

Working Capital (A$m) 1HFY09

1HFY10

Cash 4.2 10.0

Trade Debtors 101.2 89.5

Other Debtors, Prepayments and Dividends Receivable 12.3 8.4

Inventory 88.6 76.5

Tax Receivable - 1.8

Total Current Assets 206.3 186.2

Trade Creditors 105.5 95.4

Provisions 11.9 11.0

Current Tax Liabilities 7.7 2.6

Borrowings 3.0 1.3

Derivative Financial Instruments 5.0 1.8

Total Current Liabilities 133.1 112.2

Working Capital (excl. Cash, Tax, Borrowings, Derivatives)

84.7 68.0

Net Movement in Working Capital (2.2) (3.5)

Reduction in inventory a combination of lower input prices, less sites and tighter control over inventory levels

Reduction in trade debtors due to lower Dairy volumes and grain prices, and tighter control over contract payment terms and debt recovery practices

Tax receivable is prior year refund receivable 2H FY10

Reduction in tax liability following Aug 2009 payment of $7.9m Ridley Inc. Canadian tax liability

Derivatives comprise fair value of interest rate positions required under banking covenants

Reduction in inventory a combination of lower input prices, less sites and tighter control over inventory levels

Reduction in trade debtors due to lower Dairy volumes and grain prices, and tighter control over contract payment terms and debt recovery practices

Tax receivable is prior year refund receivable 2H FY10

Reduction in tax liability following Aug 2009 payment of $7.9m Ridley Inc. Canadian tax liability

Derivatives comprise fair value of interest rate positions required under banking covenants


19

CAPITAL EXPENDITUREINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

Items (A$m) Agri Salt Total

Bajool refinery - 3.8 3.8

Indonesia refinery - 1.4 1.4

Other 2.2 0.4 2.6

ERP 3.6 - 3.6

Total Development Capex

5.8 5.6 11.4

Maintenance Capex 0.8 1.6 2.4

Inverell investment 1.2 - 1.2

Total Capex 7.8 7.2 15.0

$5.6m of development capital expenditures in Cheetham comprising mostly two major new refineries to come fully on stream in 2H FY10

$3.6m of ERP implementation expenditures in AgriProducts continuing throughout 2H FY10

Other AgriProducts development capex includes reopening of Clifton Mill to accommodate additional Inghams volumes

Maintenance Capital Expenditures of $2.4m compare against depreciation of $5.5m

$1.2m investment in new Aquafeed plant at Inverell

$5.6m of development capital expenditures in Cheetham comprising mostly two major new refineries to come fully on stream in 2H FY10

$3.6m of ERP implementation expenditures in AgriProducts continuing throughout 2H FY10

Other AgriProducts development capex includes reopening of Clifton Mill to accommodate additional Inghams volumes

Maintenance Capital Expenditures of $2.4m compare against depreciation of $5.5m

$1.2m investment in new Aquafeed plant at Inverell

20

CASH FLOW

Operating Cashflow of $21.5m, representing strong EBITDA to cash conversion of 86% before Joint Ventures

Capex of $15.0m for the six months to significantly reduce in second half with completion of Inverell, Clifton, Bajool & Indonesian development projects

Joint Venture dividend reduced for the half by cash dividends withheld to fund development capex in NZ; 100% cash distribution of NPAT share to be resumed in second half

Tax paid includes final Ridley Inc. legacy payment of $7.9m to Canadian tax authorities

Normalised cash flow before dividends excluding Canadian tax payment is $9.4m, up $3.7m or 65%

Operating Cashflow of $21.5m, representing strong EBITDA to cash conversion of 86% before Joint Ventures

Capex of $15.0m for the six months to significantly reduce in second half with completion of Inverell, Clifton, Bajool & Indonesian development projects

Joint Venture dividend reduced for the half by cash dividends withheld to fund development capex in NZ; 100% cash distribution of NPAT share to be resumed in second half

Tax paid includes final Ridley Inc. legacy payment of $7.9m to Canadian tax authorities

Normalised cash flow before dividends excluding Canadian tax payment is $9.4m, up $3.7m or 65%


Group Cash flow (A$m) 1HFY09

1HFY10

Sales ($) 451.8 381.8

EBIT (excl. JV NPAT) 15.6 19.5


EBITDA 21.2 25.0

Net Working Capital Change (2.2) (3.5)



Operating Cash flow post -capex 17.7 19.7


ERP Capex (2.5) (3.6)

Asset Sales 0.8 2.9

Net Cash flow pre JV’s 14.7 9.4

Joint Venture Dividends 1.7 0.9


Interest (8.9) (3.5)

Tax (1.8) (8.3)

Net Cash flow before Dividends 5.7 1.5 20

21

DEBT BRIDGE JUN TO DEC 2009INTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

Note: Closing debt at 31 December 2009 of $78.4m includes both current and non-current borrowings

22

FINANCIAL RATIOSINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

Items 1HFY09

1HFY10

Net Debt $m 69.4 78.4

Equity $m 276.2 281.5

Total Assets $m 468.6 486.5

Gearing (Net Debt / Equity) 25.1% 27.9%

Equity / Total Assets 58.9% 57.9%

Net Debt / EBITDA* 1.3 2.7

EBITDA / Net Interest * 3.3x 8.3x

EBIT / Net Interest * 2.5x 6.7x

EPS (cents) - continuing 0.8 4.9

EPS (cents) (16.6) 4.9

* Before impairments and sale of Ridley Inc. in prior period

Gearing at a low 27.9%

Dividend of 3.5c or $10.8m paid fully in cash from retained profits with DRP indefinitely suspended

8.3 ratio of EBITDA to net interest up by 5.0 from same period in prior year; EBIT to net interest ratio up by 4.2 to 6.7 times.

4.1 cents per share increase in EPS, an increase of 512%

Term loan facilities contracted through to December 2011

Gearing at a low 27.9%

Dividend of 3.5c or $10.8m paid fully in cash from retained profits with DRP indefinitely suspended

8.3 ratio of EBITDA to net interest up by 5.0 from same period in prior year; EBIT to net interest ratio up by 4.2 to 6.7 times.

4.1 cents per share increase in EPS, an increase of 512%

Term loan facilities contracted through to December 2011

23

Guidance for FY10 is an NPAT range of $28m to $30m

Forecast earnings growth in FY11 from new contracts, Aquafeed expansion, new salt refinery efficiencies, recovery in Dairy sector, with partial offset by pig volume loss and ERP delivery risk

Strategic initiatives now focussed on

Delivering the newly contracted Poultry and Aquafeed volumes

Increasing the geographic coverage of packaged products in Agriproducts

Delivering the efficiency and effectiveness benefits from the Cheetham capital upgrades

Continuing to develop the commercialisation options for the Dry Creek and other property development opportunities throughout 2010

Guidance for FY10 is an NPAT range of $28m to $30m

Forecast earnings growth in FY11 from new contracts, Aquafeed expansion, new salt refinery efficiencies, recovery in Dairy sector, with partial offset by pig volume loss and ERP delivery risk

Strategic initiatives now focussed on

Delivering the newly contracted Poultry and Aquafeed volumes

Increasing the geographic coverage of packaged products in Agriproducts

Delivering the efficiency and effectiveness benefits from the Cheetham capital upgrades

Continuing to develop the commercialisation options for the Dry Creek and other property development opportunities throughout 2010

OUTLOOKINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

24

RIDLEY TRANSFORMATIONINTRODUCTION AGRIPRODUCTS CHEETHAM PROPERTY FINANCIALS OUTLOOK

Business Transformation

FY05 FY06 FY07 FY08FY09

# FY10f

EBIT growth 3% 12% -13% -30% 1% 42 - 59%

EBIT ($m) 53.4 59.7 51.7 36.3 30.2 43 - 48

NPAT ($m) 40.0 27.7 22.7 10.4 12.9 28 - 30

Net debt ($m) 164.1 171.5 171.8 199.2 69.4 70 - 75

Net debt : EBITDA (times) 2.3 2.1 2.2 3.9 1.7 1.3 - 1.5

Operating cash flow ($m) 67.3 39.5 37.4 16.4 53.0 50 - 55

EPS (cents) 11.3 10.0 7.9 3.5 4.3 9.1 - 9.7

EPS growth (%) 47% -12% -21% -55% 20% 117 - 131%

Includes results of Ridley Inc.

Includes results of Ridley Inc.

# FY09 result excludes loss on sale of Ridley Inc. and any

Ridley Inc. result

# FY09 result excludes loss on sale of Ridley Inc. and any

Ridley Inc. result

Excludes Ridley Inc..

Excludes Ridley Inc..

SaleSale

25


QUESTIONS AND

ANSWERS

QUESTIONS AND

ANSWERS

r idley c orporation

Documents