24 Nov

AGM - CEO and Managing Directors Address

R IDLEY CORPORATION AGM 24 N OVEMBER 2021 – C HIEF E XECUTIVE O FFICER AND M ANAGING D IRECTOR ’ S A DDRESS 24 November 2021 RIDLEY AGM 2021 ADDRESS – CHIEF EXECUTIVE OFFI CER AND MANAGING DIR ECTOR Ridley Corporation Limited ( Ridley ) ( ASX:RIC ) attaches the address to be presented by the Ridley Chief Executive Officer and Managing Director at today’s Annual General Meeting, commencing at 10am (AEDT) and to be webcast live via web.lumiagm.com/352244349. For further information please contact: Quinton Hildebrand Chief Executive Officer and Managing Director Ridley Corporation Limited +61 (03) 8624 6529 This ASX announcement was approved and authorised for release by the Ridley Board of Directors . R IDLEY CORPORATION AGM 24 N OVEMBER 2021 – C HIEF E XECUTIVE O FFICER AND M ANAGING D IRECTOR ’ S A DDRESS ANNUAL GENERAL MEETING 24 NOVEMBER 2021 Chief Executive Officer and Managing Director ’s Address Good morning shareholders, and thank you for your attendance today. As the Chair has indicated, I will provide a brief update on the business and a Trading Update for 1H FY22. COVID Response The past two years will be remembered in history for the impacts of COVID. At Ridley, we count ourselves fortunate to operate in the food sector which has generally enjoyed strong ongoing demand, albeit I recognise that some of our individual cus tomers have endured some significant challenges. I am proud to say that the Ridley employees have responded well to the COVID challenges – establishing protective protocols at all sites, generally performing their tasks in a safe manner, proactively managi ng the supply chains to ensure the supply of raw materials and delivering on expected levels of service for our customers. In demonstrating high levels of commitment, our employees have not only kept the wheels turning during COVID but have pursued greater efficiency, delivered an ERP implementation and are successfully growing the business. Operating Performance The Growth Strategy put in place in February 2020, has a strong momentum in the business and has delivered an increase in the underlying EBITDA o f 13% in FY20, followed by 16% in FY21. In the Bulk Stockfeeds Reporting Segment, where we are the largest feedmiller in the country operating 13 feedmills, we have a competitive advantage in the scale of our operations, leverage in procurement and a team of highly qualified nutritionists, specialised in their respective species. Over the past two years we have simplified our operations with the closure of 3 aged mills and the commissioning of the large new Wellsford feedmill, lowering our cost base and ma king us more competitive. In addition, we have split the Bulk Stockfeeds business into geographic regions, whereby the Regional General Manager has autonomy to run their 4 or 5 feedmills and pursue new business . As we have won additional customers, the inc reased throughput has lowered our cost base and increased our returns , creating a momentum which is underpin ning the growth of our Stockfeeds business. Looking forward we have a number of plans to debottleneck our existing mills where a relatively small ca pital investment can unlock additional capacity to sustain our ongoing growth. In our other Reporting Segment, Packaged and Ingredients, we have also enjoyed strong earnings growth at the consolidated level, however there has been varying performance from the individual business units making up this segment. The main contributor to t he segment’s increase in performance year on year has been the Rendering business unit where the gains can be attributed equally to; ongoing yield improvement and product premiumisation initiatives delivered by our operations; and the higher market prices for rendered oils and meals driven by the global demand for renewable fuels. R IDLEY CORPORATION AGM 24 N OVEMBER 2021 – C HIEF E XECUTIVE O FFICER AND M ANAGING D IRECTOR ’ S A DDRESS Our branded Packaged Products business has also grown earnings, augmenting the traditional rural distribution channels with new product lines into the urban pet specialty chains and on to the pet category shelves in our major retail stores. This is an area we are resourcing, as we believe that we have growth potential in pet products on the back our extrusion capability and integrated supply of raw materials from the rendering bus iness unit. The Supplements business has developed a more flexible operating model to adapt to the seasonal demand for blocks and lick products in Northern Australia. Whilst sales are still dependent on pastoral conditions, the supplements business has mad e a positive contribution despite the good grazing available on farm. The Aquafeed business unit has not performed to expectations as we compete in an over supplied market. So, we took the opportunity to sell the Westbury facility in Tasmania and with that transaction completing in August , we will book a profit on the sale at the coming half year. Having already expanded our Queensland extrusion facility we have been able to consolidate all our aqua volumes into this single facility providing a more competi tive and lower cost supply chain to service the aquafeed market. The development of our Novacq™ operation in Thailand has progressed over the past 12 months. The pond productivity yields have tripled and we have recently commissioned the new dewatering an d drying plant. Having achieved commercial production in Thailand we have taken the decision to close the Yamba pilot - site before the end of the 2022 financial year. The Yamba lease was established 5 years ago to develop operational methods capable of comm ercial Novacq™ production from the original CSIRO laboratory scale technology and this phase is now complete. Novacq™ is now included in all our early life - cycle diets and is being sold to all Ridley prawn customers in Australia and we are progressing the development of nursery diets for export to international prawn customers. Strategy The Strategy outlined in February 2020 has been successful in establishing a new operating model for the business which is sustainably lifting earnings. Many of these init iatives are part way through execution with the earnings benefit still in front of us. Along the way we have taken an objective view in assessing the performance of all parts of the business. An outcome of this has been the sale of the Westbury plant i n Tasmania , which demonstrated that we are focussed on delivering the best outcome for our shareholders. With the balance sheet back in a strong position, in July the Board approved Project Boost, the release of an additional $15M in capital to be spent ov er 18 months on projects within the core business that generate a payback within 3 years. The Board and Management have been working on evolving the strategy for the business through to FY25. The Capital Allocation Framework forms the basis to support a di sciplined approach to capital management with the aim of delivering improved shareholder returns whilst maintaining a strong balance sheet and supporting business growth. By the end of FY22, the Company aims to develop a comprehensive sustainability strat egy that will identify the key ESG risks and opportunities facing the business and provide a reporting framework against which our performance can be assessed by shareholders. R IDLEY CORPORATION AGM 24 N OVEMBER 2021 – C HIEF E XECUTIVE O FFICER AND M ANAGING D IRECTOR ’ S A DDRESS Trading Update The earnings from operations have continued the strong growth momentum experienced in the prior two years. Year - to - date both reporting segments have exceeded last year’s 16% year - on - year increase in EBITDA before significant items. Whilst the company has demonstrated resilience to the effects of COVID, the immediate business risks associated with the pandemic are being closely monitored, including the potential longer - term secondary impacts such as cost inflation. In closing, I would like to acknowledge and thank the Chair and the Board for their guidance and support over the past year. Also, to the Leadership Team and all employees who have responded well to the challenges and are delivering good results. Finally, to our shareholders - thank you for your support for Ridley.
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