We also made significant advances in rebuilding our reputationwith many stakeholders through constitutional reform and theaccreditation of <strong>AWB</strong> (Australia) <strong>Limited</strong> and <strong>AWB</strong> Harvest Finance<strong>Limited</strong> as ‘fit and proper’ companies to export bulk wheat underthe new marketing arrangements.In September 2008, <strong>AWB</strong> Harvest Finance launched West Coastand East Coast pools for 2008-2009, both of which will have <strong>AWB</strong>Harvest Finance loan and payment products available to poolparticipants. To ensure the ring-fenced structure of <strong>AWB</strong> HarvestFinance is maintained, a new trust will be created for each season.This is designed to provide payment protection for both poolparticipants and financiers.I am confident that our 2008-2009 commercial offer will beattractive to Australian wheat growers as I believe we will deliveron the three priorities Australian wheat growers are looking forwhen marketing their wheat – the best price, excellent customerservice and security of payment.Operational performanceIn 2008, total revenue increased 47% to $6.84 billion, up from$4.67 billion in the pcp and EBITDA increased 32% to $228.5m,up from $173.2m in the pcp.Landmark Rural Services delivered its strongest result to date,with higher crop chemical and fertiliser sales and operatingmargins on the back of increased agricultural activity acrossAustralia. Landmark EBITDA was up 66% to $90m. The businessalso benefited from higher earnings from its investments in Hi-Fertand the RD1 rural merchandise joint venture with Fonterra.Landmark Financial Services sustained earnings, recording EBITDAof $27.6m despite an increasingly challenging credit environment.Deposit growth, fee income and insurance commission performedwell; however these were partially offset by increased fundingcosts. The business continued to focus on maintaining margins,a strong credit portfolio and prudently managing growth.Australian Commodity Management significantly improvedperformance on the back of strong origination and sales of wheat,canola and pulses. This was a pleasing result, given the ACM teamand business underwent extensive restructuring in the first halfof the financial year. It contributed EBITDA of $61.9m, up from$5.6m. International Commodity Management’s result was mixedwith an EBITDA contribution of $24m, down 66% against the pcp,after one-off gains in chartering and trading activities in 2007.OutlookIn 2008-2009, our focus will be on growing shareholder valuethrough sustainable returns and earnings growth.The globalisation of agribusiness and changing dynamics ofdemand and supply offer the business a range of opportunities.We will need to adapt our business model to global and domesticchanges in market conditions. However, Australian agricultureremains an attractive industry segment and the new deregulatedwheat market will see the business focus on margin, ratherthan volume.Landmark Rural Services is a key growth platform. In 2008-2009,the business will complete a range of strategic activities designedto increase productivity and further lift operational performance.Growth for the business will come from strategic initiativesfocused on increasing value from existing markets and increasingrevenue from new sources.In the prevailing economic climate, Landmark Financial Serviceswill seek to manage the cost of funds and maintain credit quality.Australian Commodity Management will seek to leverage itsstrong customer network and over 80 years of experience inmarketing Australian wheat. It will focus on maintaining ourproven pooling performance and ensuring competitive harvestfinance loans and payments, regular pool distributions andpayment incentives for grain quality. The focus for InternationalCommodity Management will be to build structural revenueflows and integrate activities with those of Australian CommodityManagement.Employee and customer safety is of paramount importance at<strong>AWB</strong>. We have not consistently delivered on our promise to sendall employees and customers home healthy from our workplacein the past and we will need to focus more on this objective inthe future.I would like to say thank you to the many employees whocontinued to work long and hard during the year. The strongbusiness result – both financially and operationally – is a positiveoutcome and a reflection of their efforts. It is a result that wecan all be proud of.I am pleased with the progress we are making on rebuilding thebusiness. We still have some way to go on this journey but weremain committed to success for employees, customersand shareholders.Gordon DavisManaging Directorwww.awb.com.au 9
<strong>AWB</strong> todayOur client base extends to 110,000 customers, serviced by our three core business streams: Landmark Rural Services, Financial Servicesand Commodity Management. We employ more than 2,400 people across points of presence in Australia, India, Brazil, Switzerland,Singapore, the People’s Republic of China, Japan and the Ukraine. Seventy percent of our employee population live and work in rural andremote communities, close to many of our customers.Landmark Rural ServicesLandmark Rural Services offers customers a full range of agribusiness needs from merchandise, fertiliser, farm services, wool and livestockto finance, insurance and real estate. It is Australia’s largest distributor of merchandise and fertiliser, servicing customers from more than400 points of presence across Australia. The business includes investments in Hi-Fert (50%), RD1 (50%), a joint venture with Fonterra, andAustralian Wool Handlers (AWH) (50%).Financial ServicesThe Financial Services business is focused on providing financial solutions to viable and sustainable enterprises across rural and regionalAustralia. The suite of financial services offered by the business includes lending solutions, savings and investment accounts, insurancesolutions and more recently equipment finance and wealth management. Landmark Financial Services has a unique opportunity to growmarket share by leveraging Landmark Rural Services’ existing customer base.Commodity ManagementCommodity Management’s geographic diversity sees the business operate in global commodity markets from offices in Geneva, Delhi,Sao Paulo, Melbourne and more recently the Ukraine. The primary revenue streams include commodity trading, origination and salesof cereals, pulses and oilseeds, logistics, chartering and harvest finance. <strong>AWB</strong> (Australia) <strong>Limited</strong> and <strong>AWB</strong> Harvest Finance <strong>Limited</strong> areaccredited to export bulk wheat under Australia‘s new marketing arrangements. Commodity Management operates 22 regional storageand handling facilities across Australia’s eastern states, a 50% share of Melbourne Port Terminal and other offshore investments inprocessing.10 www.awb.com.au