#1Elders Monday, 14 May 2018 2018 Half-Year Results Investor Presentation Attached is the investor presentation in connection with the financial results for the 6 month period ended 31 March 2018. Elders CEO, Mark Allison, and CFO, Richard Davey, will deliver this presentation by webcast and simultaneous teleconference at 10.00am (AEST) today. As advised to the ASX on Thursday 10 May 2018, you can register to view and listen to the live commentary of the presentation. For details, refer to that announcement. Peter Hastings Company Secretary 1#2Elders Limited 2018 Half Year Results Presentation 14 May 2018 Elders#3Disclaimer and important information Forward looking statements This presentation is prepared for informational purposes only. It contains forward looking statements that are subject to risk factors associated with the agriculture industry of which, many are beyond the control of Elders. Elders' future financial results will be highly dependent on the outlook and prospect of the Australian farm sector, and the values and volume growth in internationally traded livestock and fibre. Financial performance for the operations is heavily reliant on, but not limited to, the following factors: weather and rainfall conditions; commodity prices and international trade relations. Whilst every endeavour has been made to ensure the reasonableness of forward looking statements contained in this presentation, they do not constitute a representation and no reliance should be placed on those statements. Non-IFRS information This presentation refers to and discusses underlying profit to enable analysis of like-for-like performance between periods, excluding the impact of discontinued operations or events which are not related to ongoing operating performance. Underlying profit measures reported by the Company have been calculated in accordance with the FINSIA/AICD principles for the reporting of underlying profit. Underlying profit is non-IFRS financial information and has not been subject to review by the external auditors, but is derived from audited accounts by removing the impact of discontinued operations and items not considered to be related to ongoing operating performance. Elders#4FY18 Half Year in Review Strong performance for the half Lost time injuries decreased to 2 from 5, LTIFR down from 1.7 to 0.7 ■ Underlying net profit after tax of $39.7m, up $4.5m ◉ Underlying EBITDA of $47.8m, up $4.5m ■ Underlying EBIT of $45.7m, up $4.2m Operating cash inflow of $26.1m for the half, up from a cash outflow of $5.3m Underlying return on capital of 28.2%, down from 31.8% Underlying earnings per share 34.3 cents, up 3.3 cents ■ Fully Franked interim dividend of 9 cents per share declared Elders 3#5☐ ☐ " Progress on FY18 Priorities. Delivering our promises to stakeholders Safety Performance Operational Performance Key Relationships Efficiency and Growth Lost time injuries reduced to 2 from 5, target is zero LTIs LTI frequency rate at 0.7 96% decrease in days lost for 1H FY18 Risk based decision making training developed and implemented Continued emphasis on employee and community safety health and wellbeing ☐ $47.8m underlying EBITDA, up $4.5m on 1H last year $45.7m underlying EBIT, up $4.2m on last year Underlying ROC at 28.2%, down from 31.8% at March 2017 Leverage ratio improved to 1.8 from 1.9 last year Interest cover ratio increased from 8.4 to 11.0 Continued to work with retail key suppliers, including improved position in WA fertiliser market Expanded digital client offerings Formalised regional and rural support programs with multiple charitable partnerships through launch of "Elders Give It❞ Continued to engage with key agricultural research bodies Formal engagement with all Rural Research Centres and government and university institutions to focus and enhance our agricultural research initiatives " " • Continued to drive branch efficiency improvement program Acquisition of Titan Ag to enhance retail capability and increase margins Agency footprint expansion through acquisition of Kerr & Co Investment in Clear Grain Exchange (CGX) to broaden earnings base and model sustainability Drive organic growth through improving sales force performance and attracting high performers Structured review process of capital and cost initiatives Divestment of Indonesian feedlot and abattoir operations 1 1 Indonesian business update provided in Appendix 4 Elders 4#6Half Year Financial Performance $ million Sales revenue Change 1H FY18 1H FY17 $m % 749.7 15.2 2% 734.5 Underlying EBITDA 47.8 4.5 10% 43.3 Underlying EBIT 45.7 4.2 10% 41.5 Underlying profit after tax 39.7 4.5 13% 35.2 Statutory profit after tax 41.4 3.1 8% 38.3 Net debt 91.9 78.5 46% 170.4 Operating cash flow Average capital (year to date) 1 289.4 12.3 26.1 31.4 592% (5.3) 277.1 4% 486 Underlying return on capital (%) 28.2% 3.6% 11% 31.8% Underlying earnings per share (cents) 34.3 3.3 11% 31.0 1 Excluding brand name Elders 5#7Performance by Product Continued strong performance in Retail Underlying profit movement $ million 35.2 $ 1H FY17 Underlying Profit Product margin 0.7 0.7 2.7 0.3 0.1 8.9 9.4 0.3 39.7 + R $ $ $ Retail Products Agency Services Real Estate Services Financial Services Feed and Processing Services Digital and Technical Costs Interest, tax & NCI 1H FY18 Underlying Profit ☐ Retail upside driven by a combination of organic growth across southern Australia and acquisition growth in horticulture ■ Agency uplift due to strong wool performance and additional sheep volumes from acquisitions, offset by declining cattle prices and volumes Real Estate increase due to acquisitions, offset by decline in farm land property turnover Financial Services boosted by acquisitions and increased productivity across the portfolio Feed and Processing Services downside attributable to higher input costs at the Killara feedlot Costs increased to drive Eight Point Plan initiatives, including acquisitions and organic footprint growth ☐ Lower tax due to normalisation of performance in Australian partnerships Elders 6#8Performance by Geography Geographic diversification with Southern Australia outperformance offsetting Northern Australia Underlying profit movement $ million 35.2 1.1 0.0 1.2 0.3 6.5 2.2 $ SH $ 1H FY17 Northern Australia Southern Australia Western Australia International Underlying Corporate and unallocated costs Profit 39.7 $ Interest, tax & NCI $ 1H FY18 Underlying Profit ☐ Unfavourable conditions in Northern Australia impacting Livestock and Real Estate margin, offset by the Ace Ohlsson acquisition Southern Australia outperformed last year across most products, especially Retail, and additional earnings through bolt-on acquisition in western Victoria Western Australia improvement driven by Retail, offset by easing Livestock and Real Estate earnings ■ High input costs continue to impact the International margins ■ Corporate and unallocated costs increased due to investment in Eight Point Plan initiatives ☐ Lower tax due to normalisation of performance in Australian partnerships Elders 7#9Capital Employed Return on capital remains above 20% target Underlying return on capital at March 2018 was 28.2%, which is above the targeted 20% benchmark, but lower compared to 31.8% at March 2017: О О Continued investment in aligned financial services providers, which deliver a lower risk earnings profile Continued strong Agency earnings particularly Livestock, which require minimal working capital Stable Retail earnings and capital mix Lower working capital balances resulting from: o Stable working capital utilisation in Retail notwithstanding higher activity and acquisition related increases o Variability of Livestock activity leading up to balance date o Lower Live Export balances post exit Underlying Return on Capital 1 Capital $ million 28.2% 31.8% 1H FY18 1H FY17 Retail Products Agency Services Real Estate 1H FY18 1H FY17 Change 138.1 134.9 3.2 20.8 62.1 41.3 0.8 2.2 1.4 Financial Services 9.5 5.6 3.9 Feed & Processing Services 48.3 54.8 6.5 Live Export Services 8.1 8.1 Other (40.5) (36.0) 4.5 Working capital (balance date) Other capital² 177.1 231.6 54.5 71.4 47.6 23.8 Total capital (balance date)² Average total capital² 248.5 279.2 30.7 289.4 277.1 12.3 Elders 1 Return on capital = Underlying EBIT/(working capital + investments + property, plant and equipment + intangibles (excluding brand name) - provisions (excluding forestry related)) 2 Excludes brand name 8#10Operating Cash Flow Strong profitability and Easter impact Cash flow $ million Working capital movements Operating cash flow of $26.1 million reflected: ■ Strong EBITDA cash conversion Variability of Livestock activity leading up to balance date Other outflows represents long and short term incentive payments associated with the financial year 2017 outperformance 47.4 3.3 5.7 0.6 2.0 0.1 14.4 0.3 26.1 2.2 24.0 + $ St $ $ $ $ $ Retail EBITDA Products Agency Services Real Estate Services Financial Services Feed and Processing Services Other Interest, Free tax & dividends Operating Cash Flow Capex Cash Flow $ million Retail Products Agency Services Estate Real Financial Services Feed & Process Other Total EBITDA adjusted 24.6 21.4 6.6 7.0 2.6 (14.8) 47.4 Movements in assets and liabilities (3.3) (5.7) 0.6 2.0 (0.1) (14.4) (20.9) Interest, tax and dividends (0.3) (0.3) Operating cash flow 21.2 15.6 7.2 9.0 2.5 (29.5) 26.1 Elders 9#11Net Debt Continued improvement across all key ratios Net Debt Key Ratios At balance date 92 170 1H FY18 1H FY17 Leverage (average net debt to EBITDA) YTD average 143 142 1H FY18 1H FY17 1H FY18 1H FY17 Change 1.8 1.9 0.1 Interest cover (EBITDA to net interest) 11.0 8.4 2.6 Gearing (average net debt to closing equity) 50% 79% 30% ■ Average net debt over the two periods were consistent with: o Strong EBITDA cash conversion 。 Offset by: o Investment outflows associated with bolt-on acquisitions o Distribution of dividends to shareholders Net debt at balance date lower than average, reflecting variability of Livestock activity leading up to balance date Improvement was achieved in all key ratios. Elders 10#12FY18 Outlook Easing cattle prices expected, offset by footprint expansion and acquisition growth Retail Products Winter cropping conditions are expected to be average with limited rainfall during April and May across most of Australia. This is anticipated to inhibit grower demand for cropping inputs in the second half. ☐ Full year impact of acquisitions completed last year will deliver further benefits during FY18 ■During April 2018, Elders announced the acquisition of Titan Ag, an agricultural chemical supplier, which is expected to increase Retail earnings in the second half Agency Services Cattle prices to continue easing in the second half with limited rainfall across many cattle regions during April and May inhibiting herd rebuild ■ Sheep prices are expected to remain steady supported by international demand Wool is anticipated to maintain growth with a solid pipeline of wool in store, continued strong wool prices and slow supply growth Real Estate Services Supply of farmland property will continue to be subdued in line with the decline in livestock prices Financial Services ■ Continued momentum and growth is likely from the banking and livestock funding products Feed and Processing ■ Continued dry conditions will allow feedlot utilisation to remain at high levels, but will also increase feed costs at the Killara feedlot Costs and Capital Costs are expected to continue to increase in the second half in line with footprint growth and continued Eight Point Plan investment ■ The contracted divestment of the Indonesian feedlot and abbatoir assets will allow $13 million of capital to be deployed elsewhere in the business Elders 11#13Strategic Priorities to 2020 1 VALUES, PERFORMANCE & BRAND To deliver our plans through a values, safety and performance based culture that optimises the iconic Elders brand and positioning 2 RETAIL PRODUCTS To deliver profitable and capital light growth of our retail products portfolio with an enhanced customer benefit and experience 3 AGENCY SERVICES To deliver profitable growth of the agency services portfolio through business improvement, recruitment and acquisition for our livestock and wool businesses and through focused growth of our grain business 4 REAL ESTATE SERVICES To deliver profitable growth of the real estate services portfolio through driving business improvement, recruitment and acquisition for all real estate services STRATEGIC INTENT: To achieve sustainable growth in EBIT and 20% ROC by 2020, by providing value creating products and services both in Australia and internationally 5 FINANCIAL SERVICES To deliver profitable growth of the financial services portfolio through business improvement, product development and upstream investment in our financial services businesses 6 DIGITAL & TECHNICAL SERVICES To grow our digital and technical services, expand our knowledge of customer needs, deliver markets to customers, to enable our customers to increase productivity and leverage Elders digital capability to expand customer base and build brand 7 FEED & PROCESSING SERVICES To deliver continuous improvement in EBIT and ROC for all businesses with active portfolio composition management 8 COST & CAPITAL EFFICIENCY & GROWTH To deliver ongoing innovative efficiency gains through business improvement and drive sustainable growth through business development Elders 12#14Eight Point Plan: 3 years to FY20 goal Targeting 5-10% p.a. quality growth through the cycles EBIT FY17 to FY20 $ $ $ $ $ est $ FY17 Livestock price normalisation Other market movements Organic (50%) Acquisition (50%) Cost (0%) FY20 ■ Livestock prices expected to ease post FY17 Market share gains achieved in FY17 to offset livestock price movement EBIT improvement in the period to FY20 is anticipated to be derived from: organic and acquisition growth, and continued focus on controlling base costs to offset inflationary increases. Elders 13#15Balanced growth plan to FY20 Organic 50% " Drive continuous business ☐ " improvement Capture growth opportunities across our product and services portfolio Explore opportunities to expand our offering and leverage the Elders brand into new markets to capture new clients and customers Continuously drive and resource values based leadership through the organisation Invest in the development of our leaders and people Build deeper understanding of our customers to deliver profitable value add products and services Acquisition 50% Maintain Cost ☐ ☐ " Continue to evaluate strategically aligned opportunities to expand our business Only transactions which are EPS accretive will be considered Identify innovative solutions to target geographical and strategic gaps Maintain a disciplined approach to ensure acquisitions meet required financial hurdles Reallocate capital from non- performing assets if financial and quality targets are not met Invest in resourcing to identify, integrate and support both organic and acquisition growth opportunities ◉ Derive efficiency gains through active cost management to offset inflationary increases Reallocate and reduce unproductive costs Develop and implement improved processes and approaches Maintain robust and conservative financial discipline Elders 14#16Strategic Gaps Geared for the next wave of growth, including 20 new branches by 2020 Retail Real Estate Feed & Processing Agency Financial Services Key gaps in product and service areas to be filled through organic growth and acquisition, with 20 new branches by 2020 Retail • • Increased market share in high value cropping areas Increased presence in horticulture, viticulture, and irrigated farming . Fertiliser growth in WA through CSBP Increase fee for service agronomic advisory Agency • Increased focus on livestock production advice and dairy • Targeted footprint and agent growth in livestock services . Expand grain network accumulation Real Estate • Increase company owned presence in major regional centres Financial Services • • Increase productivity and coverage of agri-finance staff Growth in insurance gross written premiums Growth in StockCo livestock product Feed and Processing • Controlled growth in Killara feedlot throughput Elders 15#17APPENDIX Elders#18Appendix Appendix 1: 1H FY18 results additional information Appendix 2: Business Model ☐ Appendix 3: Market Forces Appendix 4: Indonesian Divestment Elders 17#191H FY18 RESULTS ADDITIONAL INFORMATION Elders#20Business Segmentation $ million Retail Products Agency Services Real Estate Services Financial Services Average Northern Australia Southern Australia Western Australia Int'l Geographies Digital & 1H FY18 Technical Margin Working Capital Farm Supplies and Fertiliser Livestock, Wool, and Grain Farmland, Residential, Property Management, Franchise Agri Finance, Insurance and Financial Planning Feed & Processing Services Killara Feedlot Digital & Technical Indonesia China 1H FY18 Margin 64.0 81.9 30.7 0.9 69.0 166.8 65.8 30.4 16.4 0.6 19.4 12.0 6.9 51.9 Elders Weather 0.3 0.3 177.8 Elders 19#21Business Performance by Product Margin by product $ million 69.0 16% 1% 65.8 65.2 59.6 Retail Products 1H FY18 1H FY17 16% 4% -4% 19.4 16.7 16.4 15.8 6.9 7.2 + R Iss Agency Services Real Estate Services Financial Services Feed and Processing Services Margin generated by product Feed and Processing Services 4% Financial Services 11% Agency Services 37% Retail Products 39% Real Estate Services 9% Retail: Upside driven by a combination of organic growth across southern Australia and acquisition growth in horticulture Agency: Strong wool performance and additional sheep volumes from acquisitions, offset by declining cattle prices and volumes Real Estate: Increase due to acquisitions, offset by decline in farm land property turnover Financial Services: Boosted by acquisitions and increased productivity across the portfolio Feed and Processing: Higher input costs at the Killara feedlot Elders 20#22Business Performance by Geography Margin by geography $ million 12% 1% 81.9 72.9 64.0 63.4 Northern Australia 14% 1H FY18 1H FY17 30.7 27.0 -22% 0.9 1.1 Southern Australia Western Australia International Margin generated by geography International 1% Western Australia 17% Southern Australia 46% Northern Australia 36% Northern Australia: Unfavourable conditions impacting Livestock and Real Estate margin, offset by the Ace Ohlsson acquisition ■ Southern Australia: Outperformed last year across most products, especially Retail, and additional earnings through bolt-on acquisition in western Victoria ☐ Western Australia: Improvement driven by Retail, offset by easing Livestock and Real Estate earnings International: High input costs continue to impact the International margins Elders 21#23BUSINESS MODEL Elders#24Elders Limited Australia's largest listed rural services and products supplier, operating since 1839 • Australia's largest listed full service rural services and products supplier • • Integral part of Australia's agribusiness landscape since 1839 >450 points of presence strategically located throughout agricultural production areas Market capitalisation A$863m 1 FY17 sales revenue A$1,582m Mark Allison Chief Executive Officer and Managing Director ☐ Chief Executive Officer and Managing Director of Elders since May 2014 35 years experience in the agribusiness sector Experience includes: ■ Executive Director - GrainGrowers Limited MD & CEO - Farm Oz Pty Ltd (Adama Australia/NZ) ☐ MD & CEO - Wesfarmers Landmark Limited ☐ MD & CEO - Wesfarmers CSBP Limited MD & CEO - Crop Care Australasia Pty Ltd ■ GM ☐ Incitec Fertilisers (Incitec Limited) Chair of APVMA, Croplife, Agsafe, Agribusiness Australia and Elders Ltd • FY17 underlying EBITDA A$74.8m • FY17 underlying EBIT A$71.0m Richard Davey Chief Financial Officer • Target long term return on capital 20% ☐ 16 years experience at Elders Chief Financial Officer of Elders since January 2013 ■ Previously manager at PricewaterhouseCoopers 1 as at 31 March 2018 Elders#25Business Model Retail products Agency services Real estate services Financial services Digital and technical services Farm supplies Livestock Farmland Fertiliser Wool Grain Residential Property management Franchise Agri-finance Fees for service Insurance Elders Auctions plus (50%) Elders Weather Feed and processing services Killara Feedlot Elders Indonesia² Elders China $1.1bn retail sales 9.0m head sheep 718k tonnes fertiliser 1.5m head cattle $1bn farmland sales $670m residential sales 349k wool bales 8,291 properties under management 0.2m grain tonnes 130 franchises $2.8bn loan book¹ $1.6bn deposit book¹ $78m StockCo book¹ $654m gross written premium¹ Auctions plus 731k head sheep Killara 52k head 104k head cattle Indonesia² 18k head Elders weather China 182m hits $13.0m sales FY17 gross margin contribution 40% 36% 9% 10% n/a 5% 1 Principal positions are held by Rural Bank, StockCo and Elders insurance (QBE subsidiary respectively). 2 Announcement of Indonesian divestment in April 2018. Elders Based on FY17 full year statistics 24#26Points of Presence ZONES South North West WESTERN AUSTRALIA NORTHERN QUEENSLAND TERRITORY SOUTH AUSTRALIA Elders Real Estate, Insurance or Financial Planning franchise locations Elders owned branches NEW SOUT WALES • • KEY Northern Cattle Cattle-Dairy Horticulture Sugar Southern Livestock Grains and Oilseeds Cotton TERRITORY SOUTH QUEENSLAND WALES Over 450 points of presence in Australia and overseas including full service branches, real estate and insurance franchises Key produce areas covered through our footprint Targeted expansion of footprint through recruitment and acquisition Elders 25#27Achievements FY14 to FY17 Excellent platform and processes established for further profitable growth Organic Acquisition Cost ✓ Market share gained across retail, livestock and wool markets ✓ Branch benchmarking and improvement plan Implemented consignment stock and agency programs with key retail suppliers ✓ Established internal business development function to evaluate opportunities to grow our business through acquisition Strategic acquisition of specialist horticultural operation to improve capability ✓ Agency footprint expansion into Southern New South Wales ✓ Improved retail supplier trading agreements - increased deferred terms and performance based target rebates ✓ ✓ Continued focus on retail margin improvement through price book management ✓ Recruited high performing retail and livestock staff in Tasmania and New South Wales regions ✓ Optimised Killara efficiency through two year capital improvement program Investment in aligned financial service product providers (Insurance and Stockco) Real Estate expansion through strategic acquisition in Bunbury, Toowoomba, and Riverland regions ✓ Strong acquisition pipeline established ✓ Prioritised growth pipeline with appropriate support mechanisms in place to support implementation and success ✓ Continued efficiency gains through active cost management and improved processes and approaches ✓ Reallocation and reduction of unproductive costs ✓ Established mutually beneficial variable livestock and wool remuneration models ✓ Investment in the development of our leaders and people Exit and reallocation of cost and capital from underperforming Live Export shipping business Elders 26#28Delivering improvements across the business Underlying profit movement FY14 to FY17 $ million Price book management Improved supplier terms and consolidation 32.0 Market share gains Footprint expansion (including acquisitions) 28.0 Investment in products and platforms (StockCo, Insurance) 4.8 9.3 Market share gains and acquisitions Improved market volumes Market share gains Footprint expansion (including acquisitions) Favourable market conditions (price, volume) 3.5 FY14 Underlying Retail Products Agency Services Profit Real Estate Financial Services Services 0.1 3.6 Feed and Processing Services 27.2 Investment in brand re-build 4.5 Delivery of 8-point-plan Footprint expansion (including acquisitions) Increased revenue-linked remuneration 58.4 Digital and Technical Costs Interest, Tax & NCI FY17 Underlying Profit Elders 27#29Business Division Retail products Business description Elders is one of Australia's leading suppliers of rural farm inputs including seeds, fertilisers, agricultural chemicals, animal health products and general rural merchandise. We also provide professional production and cropping advice with over 144 agronomists nationwide Strategic focus 1. Capital light, return on capital driven business model Improve product ranging within key animal health and agricultural chemicals categories Increased focus on specialised high value cropping market, including in selected geographical gaps 2. Product focus 3. People Introduce Elders home branded products Build on customer loyalty through increased provision of agronomy services Identify, select and recruit proven localised management to establish Elders' presence in selected geographical gap areas Launch Centre of Excellence Retail margin ($m) 126.2 134.0 105.9 111.2 FY14 FY15 FY16 FY17 Margin by product Retail products 39% Margin split by geography 81% 19% Farm Supplies Feriliser 18% Wast 42% South 40% North Elders 28#30Business Division Agency services Business description Elders provides a range of marketing options for livestock, wool, and grain Livestock: our livestock agents and employees operate across Australia conducting on-farm sales to third parties, regular physical and online public livestock auctions and direct sales to Elders-owned and third-party feedlots and livestock exporters Wool: we are one of the largest wool agents for the sale of Australian greasy wool and operates a brokering service for wool growers. Our team of dedicated wool specialists assists clients with wool marketing, in-shed wool preparation, ram selection and sheep classing Grain: Our grain marketing model provides pricing from multiple buyers and offers a cutting edge commodity origination platform, maximising choice for growers Strategic focus 1. Operating model 2. People Continue livestock, wool and grain product development to improve and expand offering Continue footprint expansion through targeted acquisitions Continue footprint expansion through recruitment of key operatives with aligned values and performance characteristics Agency margin ($m) 122.4 106.2 111.4 90.5 FY14 FY15 FY16 FY17 Margin by product Margin split by geography 85% Livestock 15% Wool 17% West 51% South 32% North Agency services 37% Elders 29#31Business Division Real estate services • Business description • Elders' real estate services include company owned rural agency services primarily involved in the marketing of farms, stations and lifestyle estates It also includes a network of residential real estate agencies providing agency and property management services in major population centres and regional areas through company owned and franchise offices Other services include water and home loan broking Strategic focus 1. Operating model Increase company owned presence in major regional centres Real estate margin ($m) 31.9 29.2 27.0 27.5 FY14 FY15 FY16 FY17 Ongoing focus on productivity and efficiency Elders real estate enhancement Margin by product 2. People Recruitment of high performing sales representatives in both the broadacre and residential agency business Recruitment of home loan brokers Increased productivity through improvement initiatives and training Real estate 9% Margin split by geography 68% Agency 32% Property Management 18% 34% West South 48% North Elders 30#32Business Division Financial services • Business description Elders distributes a wide range of banking, funding, insurance and financial planning products through its Australian network We work with a number of third parties to enable us to deliver these products; Rural Bank and StockCo for banking and livestock funding products and Elders Insurance (a QBE subsidiary) for insurance Financial services margin ($m) 35.1 25.8 25.4 26.2 • Collectively, these relationships enable us to offer a broad spectrum of products designed to help our customers grow their business FY14 FY15 FY16 FY17 Strategic focus 1. Deeper, more productive partnerships 2. Investment in aligned financial services product Margin by product providers Collaboration with Rural Bank to improve productivity and efficiency of sales team Increased market awareness and cross-sell within Elders Continue advertising investment Further internal referral campaigns to drive cross- sell of Financial Services products to Elders customers Financial services 11% Margin split by geography 71% Banking 29% Insurance 23% West 45% South 32% North Elders 31#33Business Division Feed and processing services Business description • In Australia, Elders operates Killara Feedlot, a beef cattle feedlot near Tamworth in New South Wales • Elders imports, processes and distributes premium Australian meat in China Elders divested its Indonesian business in April 2018 - Elders' Indonesian business comprises an integrated feedlot, abattoir and meat distribution business Strategic focus 1. Robust systems 2. Improve reporting and transparency allowing effective decision-making Return on capital focus Improve procurement strategies through backgrounding and use of external facilities for Killara Allocation of capital based on approved business case discipline 3. Integrated red meat supply chain Increase focus on higher margin markets Expansion of Killara branded product in Bali market 1 Margin by product and geography includes non underlying operations Feed and processing services margin ($m) 13.8 13.5 11.5 9.9 FY14 FY15 FY16 FY17 Margin by product 1 77% Killara (Aus) 17% Indonesia 6% China Feed and processing 4% Margin split by geography 1 6% China 17% Indonesia 77% Australia Elders 32#34Strong group financials Sales ($m) Gross margin ($m) 1,491 1,582 337 1,194 1,276 285 305 260 FY14 FY15 FY16 FY17 Underlying EBIT ($m) FY14 FY15 FY16 FY17 Operating cashflow ($m) 71 56 15 39 21 5 49 49 82 82 Elders FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 33#35Driving improved shareholder returns and sound capital management Underlying EPS (cps) Dividends per share (cps) 47 41 FY14 FY15 62 62 62 62 FY16 FY17 FY14 Average working capital balance ($m) 221 FY15 Average net debt balance ($m) 7.5 7.5 FY16 FY17 223 228 216 122 135 137 212 Elders FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 34#36Profit Sensitivity Underlying EBITDA $(10m) $(7.5m) $(5m) $(2.5m) EBITDA +$2.5m +$5m +$7.5m +$10m -100bps -$20 -200k head -$50m Sheep price -$10 +$10 Cattle price -$100 -$50 +$50 +$100 Sheep volume -1m head -500k head +500k head +1m head Cattle volume -100k head +100k head Retail sales -$25m +$25m Retail GM% -50bps +50bps +$20 +200k head +$50m AgChem GM% -200bps -100bps +100bps +200bps Fertiliser GM% -200bps -100bps +100bps +200bps Killara utilisation % -20% -10% +10% +20% -2% SG&A Costs (excluding Depreciation and Amortisation) -1% +1% +2% +100bps Elders 35#37MARKET FORCES Elders#38Cattle · The herd rebuild is expected to continue in 2018-19. However, seasonal conditions in the north and high beef prices relative to long term averages will incentivise producers to maintain a high rate of turn off, constraining growth. Cattle prices are set to fall by 4% in 2018-19 to 439cents per kg, as competition in key beef export markets intensifies from competitors US and Brazil. Live exports of Australian feeder and slaughter cattle are forecast to increase by 4% to 910,000 heads, almost all the forecast growth is expected to go to Indonesia. Australian dairy herd numbers are expected to increase in 2018-19 by 1%, reflecting an expected rise in average farm- gate milk price of 48 cents per litre. 30 29 28 27 26 25 24 Source: ABARES Agricultural Commodities Outlook, March 2018 Australian Cattle herd Million heads +2% 2014 2015 2016 2017 2018f 2019f Weighted average saleyard price Ac/kg dressed weight 650 600 550- 500 -4%) 450 400 350 300 250 2014 2015 2016 2017 2018f 2019f Elders 37#39Sheep and Wool National Sheep flock Million heads Shorn wool production Thousand tonnes greasy NTLI and EMI +1% Ac/kg cwt & Ac/kg clean +3.2% 74 72- +3% 350 1 650 1,800 1,600 70- 600 +4.3% 300 68 66 64 62 250 450 2014 2015 2016 2017 2018f 2019f 2014 2015 2016 2017 2018f 2019f 1,400 550 1,200 500 1,000 800 2014 2015 2016 2017 2018f 2019f 2020F " Lambs (LHS) Wool (RHS) The national flock is expected to increase by 3% in 2018-19 to 72m, representing a third continuous year of expansion. Most of the increase in the Australian flock is expected to be in sheep meat breeds. High lamb prices and assumed average seasonal conditions will provide producers with an opportunity to increase flock numbers. Wool production is forecast to grow slowly, on the back of increased segmentation of the industry. In 2018-19 shorn wool production is forecast to be 350,000 tonnes, a 1% increase from 2017-18. ☐ ☐ Sheep and lamb prices are forecast to increase by a further 3.2% in 2018-19. This reflects strong competition at saleyards from restockers and processors, driven by strong demand in major export markets, particularly China. The EMI is forecast to increase by another 4.3% to $1,700 in 2018-19. This has been driven by global consumer demand for woollen apparel. Source: ABARES Agricultural Commodities Outlook, March 2018 Elders 38#40Cropping Planted Area Thousand hectares (0% 2016-17 2017-18f 2018-19f 12.2 12.6 | 12.2 +3% +8% 4.0 3.9 4.0 2.4 2.7 3.0 -17% 0.6 0.5 0.4 Wheat Barley Canola Cotton " ■ ■ In 2018-19 the planted area of wheat is expected to remain unchanged in response to low world prices, while the planted area for barley, oats, canola and sorghum is expected to increase, following increased profitability. In 2018-19 the cotton planted area is expected to decrease further driven by a fall in the average water level of public irrigation dams servicing cotton growing regions. Australian grain production is expected to lift in 2018-19, driven by an increase in yields, while global grain prices are expected to lift marginally in 2018-19, due to a decline in global supplies. In 2018-19, returns to Australian cotton growers at the gin-gate are forecast to remain relatively flat due to an abundant world production capacity keeping prices low. Prices Production Million Tonnes A$/tonne 63 650 (7%) 600 46 45 550 43 41 41 42 Other 500 Wheat Canola Malting Barley Gin gate price Chickpeas 350 Canola 300 Other grains 250 Barley 200 Wheat 150 2013 2014 2015 2016 2017 2018f 2019f 12 13 14 15 16 17 18f 19f Elders Source: ABARES Agricultural Commodities Outlook, March 2018 39#41Horticulture ◉ ◉ The gross value of horticulture production is projected to increase to $10.9bn in 2018-19, underpinned by favourable domestic demand and export opportunities. The challenge for Australia tree nut production is maintaining international competitiveness. Increased global supply is expected to result in falling prices for Australian trees nuts, and the cost of water for irrigation is expected to raise prices. The gross value of Australian vegetable production is projected to increase mostly due to increases in the quantity of carrots, capsicums and tomatoes produced in Queensland and a favourable spring harvest along the east coast. Australian vegetable exports are expected to grow as a result of increased access to Asian markets, greater demand from Gulf countries and an expected favourable Australian dollar. Gross Value of Horticulture Production $ billion, 2017-18 12 10 8 6 4 +5% 2 0 2014 2015 2016 2017 2018f 2019f Other Grapes Vegetables Fruit & Nuts Exports Source: ABARES Agricultural Commodities Outlook, March 2018 Australia Horticulture Exports By value, 2017-18 15% 11% 34% 40% Fruits Tree nuts Vegetables Other Elders 40#42INDONESIAN DIVESTMENT Elders#43Indonesian Divestment Divestment update ☐ ☐ ☐ Elders confirms it will divest its Indonesian feed and processing assets following a comprehensive performance review of the business unit in line with the Company's strategic Eight Point Plan. The divestment will allow circa $13m of capital to be redeployed elsewhere. High cattle costs and changing Indonesian governmental policies have adversely affected the performance of the business, making it appropriate to divest. ☐ Elders will continue to have a presence in Indonesia, China and Vietnam through our retail meat distribution businesses, which we intend to grow. Indonesian business - Code of Conduct issue ☐ ◉ PT Elders Indonesia (PTEI), owns land in Sumatra, Indonesia, upon which, until recently, it operated a small palm oil plantation (the Plantation). PTEI became aware that regional police from the area in which the Plantation was located have been investigating allegations of corruption in respect of the licencing body in Indonesia which was responsible for issuing licences to the Plantation. Elders was informed by PTEI about this issue. Upon learning of these allegations, PTEI took steps to understand the issue and to introduce additional controls over systems and processes. These included: o Taking steps to ensure tighter payment controls; o Putting an immediate stop to the use of external consultants as part of the licensing process; and o Took steps to secure and retrieve documents PTEI obtained relevant information in relation to the matter which confirmed that conduct had taken place contrary to Elders' Code of Conduct. In particular, there was insufficient rigour and verification around the use of funds, and a lack of appreciation by PTEI representatives of the law concerning provision of benefits to public officials. Elders currently considers that this matter is unlikely to have a material impact on PTEI or Elders. The land on which the Plantation is located has no operational relationship with PTEI's feedlot and abattoir operations which are subject to a sale agreement. PTEI has entered into a sale agreement to sell this land, which is wholly written down, to an Indonesian buyer for an immaterial price. PTEI has chosen to voluntarily disclose this matter to the central anti-corruption authority in Indonesia (the Komisi Pemberantasan Korupsi (KPK)). Elders has also notified the Australian Federal Police about the issue and PTEI's report to the KPK and will cooperate with the authorities. Outside of issues relating to the Plantation, Elders does not have knowledge of any other instances of conduct in Indonesia that are potentially contrary to its values. However, Elders is reviewing practices employed by PTEI in its remaining operations to ensure full compliance with its Code of Conduct. Elders 42#44Elders