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‘The Transformation of AWB’ Andrew Lindberg, Managing Director. A tough industry: global wheat market realities. Volatile trade flows. ‘Flat’ global demand. World Wheat Prices Over Time. Global trade distorted. Australian growers disadvantaged.

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slide1

‘The Transformation of AWB’

Andrew Lindberg, Managing Director

a tough industry global wheat market realities
A tough industry: global wheat market realities

Volatile trade flows

‘Flat’ global demand

World Wheat Prices Over Time

Global trade distorted

australian growers disadvantaged
Australian growers disadvantaged

Domestic Consumption As % Total Wheat Production: 1995-2000

(%)

High Exposure To World Price Volatility

Wheat Producer Subsidy Estimates: 1999-2001

(A$/tonne)

Unprotected By Subsidies

global wheat trends
Global wheat trends

Source: USDA, May 2004

australia s competitive position in the world wheat markets
Australia’s competitive position in the world wheat markets

Total wheat production for 2003-04(e) and 2004-05(f)

Major exporters – estimated wheat market share for 2004-05(f)

Source: USDA, May 2004

awb evolution
AWB Evolution

2003

Landmark acquisition

“Shareholders’

equity has grown from around $600 million in 1999 to over $1 billion as at 31 March 2004”.

2001

Listed on ASX

1999

Privatised

  • - Wheat Industry Fund converted to B class shares
  • - A class shares issued to wheat growers
  • - Government guarantee of AWB borrowings removed

1998

Corporatised

1989

Domestic market deregulated and Wheat Industry Fund established

1939

Australian Wheat Board establishedas a statutory authority

australian wheat board to awb limited
Australian Wheat Board to AWB Limited

FROM…

  • a statutory authority
  • government owned and backed
  • wheat marketing authority

TO…

  • public company, listed in August 2001
  • 75% grower owned; 25% institutional investors
  • grain company

Market capitalisation:

Approx. $1.7 billion

Shares on issue:

338 million

Shareholder’s equity:

Approx. $1 billion

Index inclusion:

S&P/ASX 100 (75% IWF)

awb s success the differentiation strategy
AWB's success - the 'differentiation' strategy

Creating Origin-Specific Demand

  • Developing new markets for higher quality wheat

Differentiating Products

  • Increased proportion of high quality wheat - without significant price spread decline

Developing

Market Access

  • Strong share in markets with freight advantage
  • Grown or maintained share of stable and high growth markets

Improving Productivity

  • Reduced / contained supply chain costs
grain company to australia s largest agribusiness
Grain Company to Australia’s Largest Agribusiness

100,000 customers

Grain

company

$5-$6b

revenue

Merch

$1.2b

sales

Fertiliser

1.2m

tonnes

Livestock

2.0m

cattle

11m

sheep

Wool

600k

bales

Real

Estate

$800m

sales

Finance

$2.0b

loan book

$300m

on deposit

Insurance

$120m

premium

2,500 employees

430 outlets

slide10

Grain

Marketing

and

Handling

Chartering

Risk

Manage-

ment

Financial

Services

Insurance

Merchan-

dise

Agronomy

Wool

Livestock

Real Estate

The Integrated Business Model

Australia’s leading Agribusiness

Our vision

delivered by..

Comprehensive product / service offering

managed

through an...

Integrated

Value Chain

to ensure that

AWB is the…

Acquisition

and

Trading

Milling

and

Processing

Offshore

Supply

Chain

Domestic

Supply

Chain

End use

demand

Seeds

and R&D

Farm

inputs

Freight

Business

Partner

of choice

Primary producer Business partner of choice End use customer

group structure
Group structure

AWB Limited

Commercial operations

Pooling operations

Pool Management Services

Finance & Risk Management

Grain Acquisition & Trading

Supply Chain & Other Investments

Grain Technology

Landmark

awb is focused on delivering value
AWB is focused on delivering value…
  • Financial Performance
  • Commercial skills and culture
  • Diversified agribusiness
  • Positive outlook for Australian agriculture