Review of Operations
Review of Operations Retail Products 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. Performance
Retail margin ($m)
105.9
102.1
FY13
Retail margins improved by $7.8 million in FY17. Normalised summer cropping conditions across northern New South Wales, Victoria and South Australia generated strong crop protection and fertiliser demand. Conditions in the second half were challenging in Western Australia, impacting sales activity across the northern wheat belt. Geographical expansion, including the recruitment of high performing employees in Tasmania and New South Wales, and the acquisition of horticultural specialist business Ace Ohlsson, were earnings accretive. Margins also improved through continued focus on price book management and increased target rebates earn.
Strategy To deliver profitable and capital light growth of our retail products portfolio with an enhanced customer benefit and experience. Strategy
Achievement
Capital light, return on capital driven business model
—— Improve product ranging —— Continued improvement within key animal health in supplier trading and agricultural chemicals agreements, including categories increased deferred payment —— Increased focus on terms and increased specialised high value performance based target cropping market, including rebates in selected geographical —— Continue to focus on margin gaps improvement through price book management
Product focus
—— Successful introduction of CSBP Fertiliser supply agreement in Western Australia —— Increase support of agency products and consignment locations —— Access to east coast Horticultural markets through acquisition
—— Introduce Elders home branded products —— Build on customer loyalty through increased provision of agronomy services
People
—— Selective recruitment of high performing staff in key agricultural areas
—— Identify, select and recruit proven localised management to establish Elders’ presence in selected geographical gap areas —— Launch Centre of Excellence
FY14
126.2
134.0
FY16
FY17
111.2
FY15
Margin by product
81% Farm Supplies
19% Fertiliser
Margin split by geography
Plan 18%
West
42%
South
40%
North
29