Investor presentation January 2004

1
Contents

• The strategy
• Landmark – the acquisition
• The growth opportunity
• Outlook
• Appendices:
1. About AWB
2. Financial performance 2002/03
3. Landmark- the acquisition
4. Global market outlook

2
“The strategy”

3
 Corporate strategy
Vision: “Australia’s leading global manager of
agricultural commodity assets, services and flows”

Milling &
Processing
International other grains
& commodities

Value adding products and services

Shipping End-users
Integrated Value Chain

Relation-
Finance & Risk ships
Mgmt. International wheat

Pool Mgmt.

Acquisition & Australian other

Trading commodities
Supply
Chain
Producers
Australian other grains Relation-
Rural ships
Services

Agricultural
inputs and Australian wheat
technology

Agricultural Commodities 4
AWB’s financial objectives

Return on equity
- 15% return on equity in the medium term

Solid EPS growth (including Landmark)

- EPS accretive (pre-goodwill, post synergies, post one-off costs) in 2003-04
- More than 35% EPS accretive by 2005-06

Stable dividend payment

- Expect to maintain dividend payment at current levels for 2003-04

Efficient capital management

- Surplus capital utilised to part fund the acquisition of Landmark
- Appropriate credit rating

Improve quality of earnings

- Reduce exposure to crop size
- Reduce proportion of earnings subject to principal risk

5
Group Structure
AWB Limited
Commercial operations Pooling operations

Pool
Pool Management
Management
Services
Services

Finance
Finance&& Risk
Risk
Management Products
Management Products

Grain
Grain Acquisition
Acquisition &&
Trading
Trading

Supply
Supply Chain
Chain && Other
Other
Investments
Investments

Grain
Grain Technology
Technology

Landmark
Landmark
6
Business Streams
Pool Management Services
• Base Fee
• Out-Performance Incentive
Grain Acquisition & Trading
• Grain Contract Acquisition Products
• Domestic Trading
• Non-Wheat Exports
• Global Trading Operations - Geneva

Supply Chain & Other Investments Grain Technology

• Chartering • Agrifood Technology
• Domestic Investments • AWB Seeds
• Offshore Investments • Research & Development

Finance & Risk Management Products Landmark

• National Pool Harvest Payments
• AWB Basis Pool
• Merchandise • Finance
• AWB riskassist
• Fertiliser • Real Estate
• Treasury activities
• Livestock • Insurance
• Wool

7
“Landmark – the acquisition”

8
Landmark strengthens AWB’s core wheat
business & achieves substantial
diversification in rural & financial services

• Integration, extraction of synergies and building of growth platforms

will be a major focus in 2003-04

• Landmark distribution network and Rabobank relationship will be

growth enablers in Financial Services

• AWB will continue to strengthen its grain business by seeking

arrangements with bulk handlers allowing competitive access to
ports and by securing end user demand

• Strong focus on cost and capital management will help prioritise

business opportunities, whether in existing business streams or
beyond

9
The acquisition of Landmark creates a
unique ‘one stop shop’ for the farmer
Enhanced access to global markets for Australian agriculture
• Access to over 40 countries around the world

Cross-selling
• Cross-selling of products and services to farmers and international customers

Overhead cost savings

• Consolidation of AWB and Landmark corporate, head office and network
functions, where appropriate

Supply chain cost savings

• Consolidation of procurement functions
• Leveraged logistical capability

10
AWB and Landmark
Distribution Network

• Acquisition of Landmark dramatically expands AWB’s

foot print across rural Australia
- Better able to service customers and complement Single Desk
marketing / risk management activities
- Platform to leverage growth for AWB financial services business

AWB office locations (49)

Landmark outlets (430)

11
AWB and Landmark
Profit Opportunities

• Total EBIT enhancement opportunities, derived primarily from finance growth

opportunities, assessed at A$5 - A$10 million in FY2004 increasing to A$30 -
A$40 million by FY2006
• Detailed implementation plan has been established to pursue opportunities
from Day 1

(A$m) 2004E 2006E

EBIT Growth Opportunities 5 – 10 30 – 40

AWB Management NPAT Forecast 110-120 na

for Merged Company1
EPS Accretion from Acquisition2 2%+ 35%+

Notes:
1. Net profit after tax, pre goodwill amortisation including all one-off costs
2. Based on AWB forecasts for FY2004 and FY2006, pre goodwill amortisation, includes all one-off
costs for FY2004

12
Landmark integration
“Total EBIT enhancement opportunities, derived primarily from
finance growth opportunities, assessed at $5 - $10 million in
FY2004 increasing to $30 - $40 million by FY2006”

• Detailed integration plan being implemented, including consolidation

of corporate functions to optimise service efficiency and costs

• On track to achieve Year 1 financial services growth, cost and

revenue synergies
- Landmark Rural Finance Managers trained to sell Harvest Loan products

- Products already being sold and new customers serviced

- Renegotiation of supplier agreements (direct and indirect)

- Network offices are being re-branded and consolidation of network has

commenced

• Cross selling opportunities for fertiliser, merchandise, insurance are

being pursued. Bundled product offerings being piloted in SA
13
“The growth opportunity”

14
Harvest finance market

• Environment becoming increasingly competitive

‑ Traditional players – NAB, Rabo, BHC’s
‑ Others players– WBC, ANZ, Regionals
‑ AWB product enhancements for 2003

• Performance & take up rates

‑ 70% market share
‑ Majority Harvest Loan, but other product use increasing

• Cross sell opportunities between AWB & Landmark

‑ Product bundling
‑ Landmark finance staff to sell AWB Harvest Finance

15
The opportunity
$30b of agribusiness lending in three broad segments

‘Farmers’ ‘Corporations
Product set ’

Finance to all
agribusiness
Segment
Segment ‘B’
‘C’
65,000 SME agribusiness
5,000
customers
Corporate
$20b loans
Enterprise
$8b loans
Segment ‘A’
Harvest finance 30,000 Grain / Broadacre
to grain growers $2b loans
Turnover
Small Medium Large
<$200k $200k-$1m >$1m

Source: ABARE, ABS, RBA, APRA, Jun 2002. Neil Clark & Assoc.
16
 Competitive opportunities
Competitors vary in their primary focus of attention

Large

Value Proposition #1: Major Value Proposition #2:

Commodity led Banks Finance led
Rabo
• 300 agronomists • 60 RFM/RFO’s
• Broad product range • Understanding of
• Rural distribution Regionals agribusiness risk
• Product bundling Oppor- • Rural distribution
• Brand appeal to tunity 1 • Product bundling
Oppor- • Brand appeal to
agribusiness
• Balance sheet Landmark tunity 2
agribusiness
strength, funding, • Balance sheet
liquidity capacity Small strength, funding,
ERB liquidity capacity

Low Profitability High

17
 Growth in Agribusiness lending
$Bn’s
50

10% CAGR
40

30

20

10

0
1997 1998 1999 2000 2001 2002 2003(f) 2004(f) 2005(f) 2006(f)

Source: ABARE, ABS, RBA, APRA, Jun 2002. Neil Clark & Assoc., Bank Annual Reports. (f) = forecast
18
“Outlook”

19
AWB is well positioned for 2003/04
2003-04 NPAT forecast is $110-$120 million
(pre goodwill amortisation including one off costs)

• Crop size
- Australian wheat production rebounds to 22-24mmt
- Positive impact on all business streams

• Financial Services
- Four Pool Payment Options available this year; forecast 70% take up of total
tonnes available for these options
- Cross selling between AWB Loan products and Landmark products to
customers has commenced

• Grain Centres
- All 21 Grain Centres will be operational for the coming harvest; forecast
throughput of at least 60% capacity

• Chartering
- Pool tonnes chartered to double in 2003/04

20
 AWB is well positioned for 2003/04 (continued)

• Rebound in merchandise and fertiliser

- Demand for farm inputs and fertiliser expected to recover due to increased availability
of land after the heavy de-stocking during drought.
- Forecast merchandise and fertiliser earnings to be at least 10% higher than previous
year

• Slower recovery on livestock

- Due to major de-stocking during drought, it will take a few years to recover to pre
drought levels
- However, livestock prices forecast to increase by at least 5%

• Global wheat outlook

- Major exporters to rebound in 2003/04, approx. 80% of world wheat trade
- Non-traditional exporters not a threat during 2003/04
- Global Stocks-To-Use remain the tightest ever in recent memory
- Wheat prices reasonable

21
Appendix 1: About AWB

• Introduction

• AWB Evolution

• Share ownership structure

• Corporate structure

• Risk allocation
• Share price performance

• Ring fence
 Introduction
• AWB Limited (AWB) is Australia’s leading agribusiness and one of the world’s
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, S&P/ASX 100 Australian company.

• AWB is the exclusive manager and marketer of all Australian bulk wheat exports
through what is known as the Single Desk system.

• 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, and having a considerable investment in rural and
regional Australia.

Market Cap: A$1,478.1 million (A$4.40 09/01/04)

Shares on issue: 335.9 million

Shareholder’s equity: A$932 million (as at 30/09/03)

ASX listing: 22 August 2001

Index inclusion: S&P / ASX 100 (75% weighted)

Average daily volume: 408,500 shares (average since listing)

AWB Evolution

2003 Acquisition of Landmark

2001 Listed on the 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 established as a

statutory authority

24
 Dual Class Share Ownership
Structure
A class shares (28,811 shares) B class shares (338m shares)

• Can only be owned by current • Shares listed on the ASX

wheat growers
• Can be owned by any investor,
• One share per wheat grower with subject to 10% ownership limit
weighted voting dependant on (currently 64,545 B class
tonnes delivered (currently 28,811 shareholders)
A class shareholders)
• Entitled to receive dividends
• Non-transferable
• Entitled to elect up to 4 of 12
• Not entitled to receive any Directors over time
dividends
• 21% of issued capital owned by
• Ability to elect 7 of 12 Directors (a Institutions
majority of the Board)
Risk allocation

Grower risk AWB risk

National Pool Financing Principal trading / other

• Final net pool return • Underwriting risk if • Principal positions in

Pool return falls wheat and other grains
– final sale price below guaranteed
• Multi-varietal and fixed
return
– foreign exchange grade contracts
• Size of pool impacts
• Credit risk
– credit risk revenue derived
from products and management
– supply chain services • Trade execution
logistics management
• Margin on loans
(including
• Underwriting fees • Grain centres
execution) management
• Fees from basis
• Credit risk manage- • Riskassist advisory
pool contracts
ment outcomes services

• Chartering and Quality • Incentive in pool

Assurance costs management fee

26
 (AUD)

2.50
3.00
3.50
4.00
4.50
5.00

22-Aug-01

23-Oct-01

24-Dec-01

24-Feb-02

27-Apr-02

28-Jun-02
AWB

29-Aug-02

30-Oct-02

31-Dec-02

3-Mar-03
S&P/ASX 200

4-May-03

5-Jul-03

5-Sep-03

6-Nov-03

7-Jan-04
Share price performance since listing

27
Ring fence of National Pool operations

• Ring fence structure effective from 1 October 2003

• Ratings post 1 October 2003

- AWB Harvest Finance
 S&P: A1+ (s/t) AA- (l/t) stable
 Moodys: P-1

- AWB Commercial Subsidiaries

 S&P: BBB stable outlook

28
Appendix 2: Financial Performance
2002/03
• 2003 full year results highlights

• Statement of financial position

• Statement of financial performance

• Capital expenditure

• Business operations
Full year results reflect severe drought
conditions
• Net profit after tax of $43.9m, down 59%, whilst export volumes
down 75%

• Total operating revenue of $2.2b, down 5%

• Earnings per share of 15.9 cents, down 59%

• Final dividend of 11 cents per share

• Drought impacted wheat crop of 9.7 million tonnes, down 61%

from the previous year (24.9 million tonnes)

• Loan book peaked at $1.6b in December 2002

• Gross Pool Value of $1.3b

30
Statement of financial position
$million As at 30-Sep-03 As at 30-Sep-02
Assets
Cash 54.7 69.9
Receivables 1,012.6 2,141.1
Intangibles 583.6 0.2
Investments 12.9 17.0
Inventories 185.4 134.1
Property, plant & equipment 300.4 170.5
Other 266.2 108.3
2,415.9 2,641.1
Liabilities
Payables 336.1 122.7
Interest bearing liabilities 1,062.9 1,637.5
Provisions 52.4 41.8
Other 32.6 49.6
1,483.9 1,851.6
Net Assets 932.0 789.5
31
 Statement of financial performance

For the year For the year ended

ended
30-Sep-02
$million 30-Sep-03 Change
Revenue from ordinary activities 2,211.9 2,319.6 (5%)

Cost of sales (1,889.2) (1,926.3) 2%

Borrowing costs (70.5) (98.6) 28%

Depreciation & amortisation (29.9) (14.3) (109%)

Other (163.4) (127.2) (28%)

Operating profit before tax 58.9 153.2 (62%)

Net profit 43.9 107.2 (59%)

32
Capital expenditure
For the year ended For the year
ended
30-Sep-03
$million 30-Sep-02 Change
Grain centres construction 71.0 53.0 33.9%

System Development & 118.9 28.7 (51.9%)

Other Plant & Equipment
New Building 3.2 - n/a

Total 93.1 81.7 14.0%

Depreciation 127.4 14.3 91.6%

• Level of capital required to support future growth plans

• No major capital expenditure for 2003-04
• Expected maintenance capital expenditure of approximately $20-
$30 million per annum (to 2005-06)
1 Includes Landmark
33
Business operations
For the year For the year ended
ended
$million 30-Sep-02 Change
30-Sep-03
Pool Management Services 23.3 17.4 34%
Grain Acquisition & Trading 29.7 68.6 (57%)
Grain Technology (5.1) (3.0) (70%)
Supply Chain & Other Investments 3.5 30.3 (88%)
Less: Interest expense (29.6) (23.6) (25%)
PBT Sub total 21.8 89.7 (76%)
Finance & Risk Management 64.1 88.5 (28%)
Rural Services (Landmark) 5.0 - n/a
Goodwill Amortisation (Landmark) (2.4) - n/a
Corporate (29.6) (25.0) (18%)
Operating profit before tax 58.9 153.2 (62%)

Net profit after tax 43.9 107.2 (59%)

34
 Pool Management Services
For the yearFor the year ended
ended
$million (EBIT) 30-Sep-02 Change
30-Sep-03
Pool Management Services 23.3 17.4 34%

Breakdown of fees paid to AWB based on export tonnage of 19.6mt for

2001 Pool and 4.5mt for 2002 Pool:

For the year ended For the year ended

($million) 30-Sep-03 30-Sep-02
2001/02 Pool 2002/03 Pool Total 2001/02 Pool Total

Base Fee 6.0 41.8 47.8 54.0 54.0

Out performance 14.0 15.3 29.3 14.3 14.3
Administration costs - (53.8) (53.8) (50.9) (50.9)
Total Pool Mgt Services 20.0 3.3 23.3 17.4 17.4

35
Grain Acquisition & Trading
For the yearFor the year ended
ended
$million (EBIT) 30-Sep-02 Change
30-Sep-03
Grain Acquisition & Trading 29.7 68.6 (57%)

• Trading activity declined due to drought

- Domestic wheat trading volumes of 2.8mmt for 2002/03, down by
40% compared to last year

- Trading volumes in other grain (sorghum, barley, canola) also

down by over 60%

• AWB Geneva executed over 1.5mmt grain sales

36
Grain Technology
For the yearFor the year ended
ended
$million (EBIT) 30-Sep-02 Change
30-Sep-03
Grain Technology (5.1) (3.0) (70%)

• EBIT loss due to drought. Net expenditure of $3.3m on R&D

• R&D will continue to be a major expenditure element in

protecting future revenue streams

• Opportunity to review technology and R&D operations across

the Group with the view to consolidating the businesses and
achieving scale benefits

37
Supply Chain & Other Investments
For the yearFor the year ended
ended
$million (EBIT) 30-Sep-02 Change
30-Sep-03
Supply Chain & Other Investments 3.5 30.3 (88%)

• Receivals through the Grain Centres down by 70% due

to the drought

• Grain throughput reduced at Melbourne Port Terminal

• Chartering made a strong contribution due to:

- Favourable margins from physical freight
- Successful deployment of a long trading strategy

38
Finance & Risk Management
For the yearFor the year ended
ended
$million (PBT) 30-Sep-02 Change
30-Sep-03
Finance & Risk Management 64.1 88.5 (28%)

• Impacted significantly by lower tonnage

• Level of underwritten loan draw-downs was significantly lower than for the
previous year

• Decrease in underwriting revenue by 76%

• The size of the 2002/03 harvest has also had an impact on the average loan
book, which is smaller than in the previous year

39
Corporate
For the yearFor the year ended
ended
$million (PBT) 30-Sep-02 Change
30-Sep-03
Corporate (29.6) (25.0) (18%)

• Net increase of $5m due to:

- Integration and restructuring costs associated with Landmark

- Write off of system development costs

• Dividends from Futuris of $3.6m included in result

40
Landmark
For the yearFor the year ended
ended
$million (PBT) 30-Sep-02 Change
30-Sep-03
Rural Services (Landmark) 5.0 - n/a

• PBT contribution for September is $5m, mainly due to:

- Increase in cattle numbers and average price per head

- Increase in fertiliser sales due to improving conditions and drying

paddocks

- The above increases were offset by reduced sales in merchandising

due to ongoing dry conditions in QLD and NSW

41
Appendix 3: Landmark- the acquisition

• Details of the acquisition

• Overview of Landmark operations

• Overview of Landmark by business unit

• Key strategic issues

Details of the acquisition

• $718m paid. Purchase price represents good value for AWB

given the cross sell opportunities between AWB and
Landmark

• No other company positioned to benefit from the synergies as

AWB – Landmark was worth a lot more to AWB than other
companies

• Funded via cash, debt and new equity:

- Debt facility arranged before announcement

- Institutional placement $152m, Share Purchase Plan $43.8m and

Dividend Reinvestment Plan $35.9m

43
Landmark: a snapshot

100,000 customers

Real
Merch Fertiliser Livestock Wool Finance Insurance
Estate

1.9m
Cattle
$1.1b 1.2m 600k $815m $119m
$730m
Sales tonnes 11m bales book premium
sales
Sheep

1,890 employees

430 outlets

44
Overview of Landmark

Landmark is Australia’s leading rural distribution network with

national coverage and significant growth opportunities
• Largest merchandise and fertiliser distribution business in Australia

• Well diversified earnings base across regions, agricultural commodities and

business activities
• High growth finance business that can be further leveraged by AWB

• Strong insurance agency business

• Extensive branch network throughout regional Australia with 430 outlets and
over 100,000 customers
• Lower risk agency model relative to peers

• Experienced management team which has presided over previous successful

acquisitions and significant earnings growth

45
Overview of Landmark by business unit
Wool
• Landmark handles
approximately 25% of the
National Wool Clip (600,000
bales)
• Provides traditional broking /
auction selling services as
well as a comprehensive
range of Risk Management
products
• 50% interest in Australian
Wool Handlers (with BWK),
40% interest in Arcadia
• Not involved in any
downstream processing
Livestock
• Handles approximately 20% of
livestock trading in Australia
• Provides saleyard auction
services and private treaty
services for livestock producers
• Supplies processors,
supermarket chains, lot feeders
and live export markets
• Landmark do not own feedlots
or abattoirs
46
Overview of Landmark by business unit
Real Estate
• Markets large rural
properties, residential real
estate (regional towns) and
clearing sales in country
areas throughout Australia
• Real estate sales of in
excess of A$700 million in
2003
Insurance
• Landmark offers a range of
insurance cover options for rural
businesses and households
• Landmark acts as an agent for
WFI and CGU
• The current arrangements with
WFI and CGU will remain in place
47
Overview of Landmark by business unit

Merchandise
• Supplies a broad range of agricultural inputs, including agricultural
chemicals and veterinary products, to all major agricultural sectors
• Distributed via 230 company owned branches, 50 franchises and 150
members (ie non-Landmark merchandise stores)
• Provides agronomic advice for cropping, pasture and cotton enterprises

Network
characteristics

Branch Core regional town, full service

Franchise Smaller regional town with committed local operator

Member Wholesale supply, may be branded or non-branded

48
 Overview of Landmark by business unit
Fertiliser Finance
• Acts as an agent for CSBP • Landmark provides a range of
(owned by Wesfarmers) financial products for rural
and others in WA; producers including seasonal and
IncitecPivot and Hi-Fert on term loans, term deposits, cheque
the east coast accounts and credit cards

• Acts as an agent for Rabobank and

receives a proportion of the net
interest on each loan and a share of
a ‘bonus pool’

• Landmark is responsible for loan

approvals, however there is one
Rabobank credit manager in the
Landmark credit team

• Landmark still ‘owns’ the client

• 50 Rural Finance Managers located

throughout Australia
49
Overview of Landmark by business unit

Other
• Other Sales and Gross Profit are derived from the following businesses

Big N Anhydrous ammonia distribution 75% of other

income
JRT2 Cartage of sugar cane, fertiliser and
merchandise

Other Interest margin on Deposit Notes and 25% of other

debtors, income
rent recovery and car sales

50
Key strategic issues

• Business sustainability
- Commodity market cycles
- Variable seasonal conditions
- New product technologies
- Security of member and agency structure

• Productivity and performance culture

- Sales productivity consistency
- Network configuration optimisation
- Evolving performance culture

• Growth
- Internal focus has diluted growth initiatives

51
Appendix 4: Global market outlook

• Global supply & demand

• Major exporters
• Non-traditional exporters
 Global supply and demand - wheat

• World Production in
2003/04 is forecast at 620 250

552.7mmt, which is
600
14.1mmt lower than 200

Production & consumption (mt)

2002/03. 580

Ending stocks (mt)

150

• World Consumption is 560

forecast at 602.4mmt for 100

540
2002/03 and 590.8mmt for
2003/04. 520
50

• Carryover stocks are at 500 0

0 1 2 3* 4*
relatively low levels, 199
9 -0
200
0 -0
200
1 -0
200
2 -0
200
3 -0

representing approximately
2.5 months supply.

* 2002-03 & 2003-04 – estimated (Source: USDA)

53
Major exporters (2003-04)
• Australian, Canadian and US wheat crops expected to rebound significantly

• 2003-04 total exports by major exporting countries forecast to increase to 78.6 mt, an increase of 16.3mt from
2002-03

• Major wheat exporting countries continue to face competition from non-traditional exporters in 2003-04

Argentina
EU 10%
9%
USA
39%

Canada
20%

Australia
22%

Major exporters - 2003-04(f) (Source: USDA)

54
Non-traditional exporters
• Non-traditional exporters have increased their export program over the last two years due to good production, large carryover stocks and
increased investment in transport and infrastructure.

• However, projected 2003/04 production for non-traditional exporters is projected to be massively lower than 2002/03 as a function of the
FSU crop disaster. This in turn will limit non-traditional exporters ability to undercut prices to gain market share into the new campaign.

Non-traditional exporters - total exports

(mt)
14
12 2002-03*
10
2003-04*
8
6 5 year average

4
2
0
ne

an
e
a

an

op

di
si

t
ai

st

In
us

is
r
kr

kh

Eu

k
R

Pa
U

za

n
er
Ka

st
Ea

* 2002/03 & 2003/04 – forecast ( Source: USDA)

55
www.awb.com.au
For more information contact:
Delphine Cassidy
Head of Investor Relations
T: +61 3 9209 2404
F: +61 3 9670 1723
E: dcassidy@awb.com.au

56