Investor Presentation

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Investor Presentation

• December 2005

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Australias leading agribusiness

• 2003

AWB acquired Landmark from WES
Landmark acquisition
2003
2001
WES acquired IAMA, merged it with Wesfarmers
Dalgety to form Wesfarmers Landmark
2001
Listed on ASX
1999
Privatised
1993
- Wheat Industry Fund converted to B class
shares - A class shares issued to wheat growers -
Government guarantee of AWB borrowings removed
WES acquired Dalgety Farmers, merged it with
Wesfarmers Rural to form Wesfarmers Landmark
1985
Wesfarmers Rural expands to eastern states
1998
Corporatised
The Cooperative listed on ASX as Wesfarmers
Limited (WES)
1984
Domestic market deregulated and Wheat Industry
Fund established
1989
1950
The Cooperative diversified with a rural focus
1914
Westralian Farmers Cooperative established
Australian Wheat Board establishedas a statutory
authority
1939
1840
Frederick Dalgety began servicing farmers in
western Victoria the well known Dalgety business
eventually covered all States
1915
Australian Wheat Board created during World War I
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AWB a snapshot

• AWB Limited (AWB) is Australias leading
  agribusiness and one of the worlds largest wheat
  managing and marketing companies.
• Having evolved from the Australian Wheat Board,
  which operated as a government statutory
  marketing authority for 60 years, AWB is now a
  listed, SP/ASX 100 Australian company.
•  AWB markets wheat to more than 50 countries
• With the acquisition of Landmark, AWB now offers
  a unique one-stop shop for Australian farmers,
  providing finance and risk management solutions
  across a wide range of agricultural enterprises
• Australian footprint includes more than 430
  outlets across Australia with a spread of more
  than 2,700 employees reaching about 100,000
  farmers
• Market capitalisation of over 1.8 billion
  revenues of 9 billion (including Pool revenue)
  and shareholder funds in excess of 1 billion
• Consistently out performed the SP / ASX 200
  since listing

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What weve achieved

• Acquired Landmark in August 2003 for around 825
  million enterprise value
• Integration of Landmark 100 complete
• Cumulative EBIT enhancements for 2003/04 and
  2004/05 of 24.5 million aligned with 20 - 25
  million target.
• Established fertiliser joint venture ELF
• AWB constructed 21 grain centres with a total
  capacity of over 3 million tonnes
• Strategic focus on customer management,
  introduction of CMS system
• Successful development of international business
  Geneva, India
• Sold 2.5 million tonnes to China, the first
  significant sale since 1996
• Positioned to tap into growing Asian markets
• Progressive business expansion

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What we are today
100,000 customers
Finance Insurance 2.5bn loan
book 600m on deposit 150m premium
Real Estate 1bn sales
Wool 500k bales
Livestock 2.0m cattle 11m sheep
Fertiliser 1.2m tonnes
Grain 5-6b revenue
Merch 1.2b sales
2,700 employees
431 outlets
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AWB Limited Group structure
Pooling operations
Commercial operations
Pool Management Services (inc Grain Technology)
Grain Acquisition Trading
Finance Risk Management
Supply Chain Other Investments
Landmark
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Business characteristics
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Business characteristics (cont.)
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Our scorecard to date
Return on equity
NPAT production volume
Share price since listing
EPS dividend
Before significant items
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AWB Strategy
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Looking forward

• AWBs strategy is to be Australias leading
  agribusiness through becoming the business
  partner of choice for primary producers and end
  customers
• Execution of this vision will enable AWB to
  deliver its financial objectives of
• Strengthening core business.
• Growing and diversifying to improve the quality
  of the earnings and reducing the share of Pool
  based earnings.

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A solid foundation to our strategy
AWBs overarching goal is to implement an
Integrated Business Model...
In the medium term, AWB expects to be less
reliant on Pool related earnings.
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Three growth areas
Leading position in Australian rural services

• Fertiliser and merchandise are the main areas
  targeted for growth
• Cross selling
• Leverage buying power in the network
• Improve merchandise and supply chain effectiveness

Leading rural financial services and insurance
provider

• Increase product base build on AWBs natural
  advantage to provide a wider range of products,
  better interest rates, and streamline credit
  processes
• Specific areas targeted for growth include
  lending, deposits, wealth management and general
  insurance

Australias leading global commodity management
business

• Continue to focus on mandate to maximise grower
  returns
• Expand the suite of commodities, origins and
  risks managed
• Strengthen the differentiated position for
  Australian wheat

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Key financial targets
Before significant items amortisation of
goodwill and software
Diversification has made shareholder return less
dependent on season downturns
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Financial PerformanceYear ended 30 September 2005
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Diversification pays dividends
NPAT before significantitems (m)
Production tonnes (m)
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Financial highlights from the year

• AWB demonstrated the effectiveness of its
  diversification strategy and delivered profit
  before tax, sale of Futuris shares and
  amortisation (PBTA) of 184.5 million compared
  with 184.9 million in the pcp.
• First time AWB has increased its year on year
  NPAT (before significant items) when it has
  received lower year on year wheat volumes.
• Reported NPAT up 62 on the pcp to 157.1
  million. (including the profit on sale of
  investment in FCL).
• NPAT before significant items was 115.3 million,
  up 19 compared to 96.9 million in the pcp.
• Reported EPS was up 59 to 45.7 cents per share.
• Final dividend has increased to 13 cents per
  share fully franked, bringing the total full year
  dividend to 29 cps, up 16.
• Landmark integration targets of 24.5 million
  achieved since acquisition, against a target of
  20-25 million.
• Landmark, Finance Risk Management and Pool
  Management Services all demonstrated strong year
  on year growth.

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Significant developments during the year

• The Landmark lending book continued its growth to
  over 1.5 billion, up 41 on the pcp.
• AWB maintained its leadership position in the
  harvest finance market with the AWB harvest loan
  book peaking at 1.1 billion.
• Deposits increased from 254m to 550m.
• AWB Group developed its own funding vehicle
  Rural Trust - providing the platform for
  Landmark loan book growth and strengthened
  position in agri-finance market.
• Expansion of international trading in Geneva.
  Indian trading operations commenced.
• Establishment of strategic partnership in
  fertiliser with Elders and WMC Resources (now BHP
  Billiton), including the acquisition of 33 of
  Hi-Fert.
• Pool Management launched their Shaping the
  Future strategy to strengthen their
  competitiveness in the international wheat
  market. New offices were opened in Singapore and
  Beijing.
• Positioned to move forward with a more integrated
  business model.

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EBIT summary
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Pool Management Services
EBITDA Pool Management Services
EBITDA m

• Pool Management Services contributed an EBIT of
  36.3m for the full year, a 11 lift on the pcp.
• 20mt managed through the 2003/04 Pool and 14.6mt
  tonnes through the 2004/05 Pool.
• Total base fee for the 2003/04 Pool was 63.5m.
  90 of the base fee for the 2004/05 Pool is now
  recognised, providing revenue of 58.6m.
• Costs allocated to Pool Management Services up 3
  on the pcp, mainly due to expansion of AWBs
  Asian office network and investment in technology
  and systems.
• Base fee has been de-linked from Pool value and
  fixed to the cost of providing services to the
  Pool. The Out Performance Incentive (OPI)
  structure is now divided into two tiers.

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Grain Acquisition Trading
EBITDA Grain Acquisition Trading
EBITDA m

• Grain Acquisition Trading contributed EBIT of
  75.9m, 26 below the pcp, attributed mainly to
  adverse conditions in the Australian grain
  trading operations.
• Expanding international trading business
  continued to provide favourable trading results
  and remains a strong platform for the Group.
• Chartering continued to perform well through
  trading freight forward agreements (FFAs) within
  predetermined limits.
• More difficult trading and seasonal conditions
  reduced the contribution from Australian Trading.
  
• Livestock trading experienced favourable margins
  in buoyant market conditions and traded over
  65,000 of cattle.

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Supply Chain Other Investments
EBITDA Supply Chain Other Investments
EBITDA m

• Supply Chain Other Investments incurred an EBIT
  loss of 6.5m for the year, compared to 1.8m
  profit in the pcp.
• Grain Centres experienced competitive pressures
  and difficult seasonal conditions. Receivals of
  over 1.3m tonnes were down from over 1.8m tonnes
  in the pcp.
• Melbourne Port Terminal (MPT) and overseas
  investments overall contribution remained steady.
  
• MPTs contribution to the Group decreased
  compared to the pcp, primarily due to lower
  throughput volumes for the year.
• Overseas investments maintained their EBIT
  contributions at a comparable level to the
  previous year.

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Finance Risk Management Products
EBITDA Finance Risk Management Products
EBITDA m

• The EBIT contribution from Finance Risk
  Management Products was 36.3m for the year, 15
  higher than the pcp.
• AWBs Harvest Finance market share remains
  stable, reflecting AWBs extensive industry
  expertise.
• The contribution from Harvest Finance products
  decreased compared to the pcp mainly due to lower
  wheat prices and production.
• AWBs Risk Management business performed well,
  mainly attributable to increased activity from
  the OTC desk in the Portland office.
• Strong contribution from Treasury Management.

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Landmark
EBITDA Landmark
EBITDA m

• Landmark contributed an EBIT of 81.3m for the
  year, 6 higher than the pcp.
• Merchandise and fertiliser sales increased by 3
  compared with the pcp.
• Livestock gross profit was comparable to the pcp.
  Higher cattle prices offset by reduced volumes
  and lower sheep prices offset by higher volumes.
• Real Estate sales increased by 5 on the pcp.
  Increase in prices driven by excellent demand for
  prime rural property.
• Wool gross profit was down by 7 on the pcp,
  primarily due to a reduction in wool prices and a
  reduction in volumes.
• Finance gross profit increased on the pcp. 41
  increase in the loan book to a balance of 1.6b.
  Interest bearing deposits increased 86 to 550m.
• Insurance gross profit increased compared with
  the pcp.

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Corporate Items
EBITDA Corporate Items
EBITDA m
2002
2003
2004
2005

• Corporate division contributed an EBIT expense of
  51.4m, compared with a 67.4m expense in the
  pcp.
• Decrease in Corporate overheads mainly due to
  non-recurring integration and restructuring costs
  associated with Landmark acquisition incurred in
  the pcp.

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Outlook
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Outlook Commodity Management

• AWBs 2005/06 forecast for domestic wheat
  production is 23-25m tonnes
• World wheat production in 2005/06 is estimated to
  be around 608m tonnes, around 17m tonnes less
  than the previous season.
• Global wheat consumption will continue to
  increase and remain ahead of world production
  (2005/06 consumption forecast is 619mt)
• AUD is expected to weaken against the US into
  late 2005 and early 2006
• Continued offshore expansion within the Group is
  expected.

World Wheat Production Consumption
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Outlook Financial Services

• Landmark remains a genuine alternative to the
  banks, with complete lending solutions offered
  through the Groups recently established Rural
  Trust.
• Lending growth for the last year was well above
  the industry trend and that growth is expected to
  continue going forward.

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Outlook Rural Services

• Australian beef exports remain strong and are
  still benefiting from the absence of US and
  Canadian beef exporters in our traditional
  markets.
• Some potential for softening of livestock prices
  when the US regains market access into the Korean
  and Japanese markets.
• Merchandise and fertiliser looks promising with
  good seasonal conditions also supported by
  Landmark business set to benefit from synergy
  benefits.
• In the Real Estate market, property prices are
  expected to ease after a strong two years.
• Wool prices are expected to remain flat in the
  short term, as they remain highly sensitive to
  the AUD/USD exchange rate.

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Outlook AWB Group profit for 2006

• AWB is expecting pre tax profits to be around 10
  higher than this years PBTA of 184.5 million,
  subject to normal seasonal and operating
  conditions.
• A more robust business platform and improvements
  in key market drivers will support the lift.

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www.awb.com.au
For more information contact Delphine
Cassidy Head of Investor Relations Ph 61 3 9209
2404 Email dcassidy_at_awb.com.au
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Supplementary information
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Landmark our acquisition
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Landmark back office integration complete
Integrated Business Model generating new revenue
growth opportunities
Integration
1. Customer Management
Integrated customer management developed across
the distribution network combining systems and
processes to better understand and serve our
customers
Back office integration is complete, our focus
has shifted to implementation of the IBM
2. Product Development
New products and bundles being developed
incorporating products from across Landmark and
AWB range to better meet our customers needs
3. Channel Strategy
Channel management to optimise AWB-Landmarks
combined distribution network
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Major Exporters
2004/05 2003/04 2002/03 (mmt)
2003/04 2004/05 forecast Source
USDA
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Minor Exporters
2004/05 2003/04 2002/03 (mmt)
2003/04 2004/05 forecast Source
USDA
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Wheat production in Australia