Elders (ELD) H2 2024 Retail Investor Briefing earnings summary

Executive summary

• FY24 EBIT finished at AUD 128 million, just below the midpoint of guidance, after a challenging first quarter and subsequent recovery in later quarters.

• Second half performance was the third strongest on record, but competitive pressures and dry conditions in key states limited upside.

• Bolt-on acquisitions were significant, with 13 completed, contributing AUD 8 million to FY24 EBIT and expected to add AUD 6 million in FY25.

• The acquisition of Delta Ag aligns with growth strategy, adding geographic reach, regulatory assets, and technical expertise.

Financial highlights

• FY24 EBIT reached AUD 128 million, within guidance of AUD 120–140 million.

• Return on capital declined to 11.3%, below the 15% hurdle rate, mainly due to a weak first quarter and upfront transformation costs.

• Leverage increased to 3.1x (accounting basis), above the internal target, but covenant leverage remains well within limits.

• Net debt rose due to acquisitions and transformation spend, partially offset by inventory reduction and creditor uplift.

Outlook and guidance

• FY25 is expected to see normalized first quarter performance and average seasonal conditions, supporting a positive outlook.

• Transformation projects (Elders Wool, Killara Feedlot, SysMod) are expected to deliver earnings benefits in FY25 and FY26.

• Bolt-on acquisition activity will be reduced in FY25 after a strong FY24.

• Leverage and return on capital are expected to normalize as earnings recover and transformation benefits flow through.