Announcement PDF 18 November 2024 Acquisition of Delta and Equity Raising Attached is the Elders Limited (ASX:ELD) presentation regarding the acquisition of Delta Agribusiness Pty Ltd and equity raising. The presentation will be delivered by Mr Mark Allison, Chief Executive Officer, and Mr Paul Rossiter, Chief Financial Officer, at the Elders Limited FY24 financial results conference call and webcast to be held 10.00am (AEDT) today. To join the presentation by conference call or webcast, please register at https://s1.cconf.com/diamondpass/10042126-39hfdd.html. Further Information: Peter Hastings, Company Secretary, 0419 222 489 Authorised by: Elders Limited Board of Directors View this announcement on Elders’ Investor Hub. Elders Limited ABN 34 004 336 636. Registered Office: Level 10, 80 Grenfell Street, Adelaide SA Australia 5000 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Acquisition of Delta Agribusiness and Equity Raising 18 November 2024 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Important notice and disclaimer The following notice and disclaimer applies to this investor presentation (Presentation or document) and you should read it carefully before reading or making any other use of this Presentation or any information contained in this Presentation. By accepting this Presentation you represent and warrant that you are entitled to receive the Presentation in accordance with the restrictions below and agree to be bound by the limitations, contained within it (including any modifications to them). This Presentation has been prepared and is issued by Elders Limited ACN 004 336 636 (Elders or Company) and is dated 18 November 2024 in relation to: ▪ the proposed acquisition of 100% of the shares in Delta Agribusiness Pty Ltd ACN 118 781 445 (Delta) for a combination of cash and scrip consideration in Elders (Delta Acquisition); and ▪ an equity raising by way of a proposed 1 for 5.05 pro rata accelerated non-renounceable entitlement offer of new fully paid shares in Elders (New Shares) to certain eligible shareholders (Entitlement Offer or Equity Raising) to raise approximately $246 million, which is fully underwritten. The Entitlement Offer is being made without disclosure to investors under section 708AA of the Corporations Act 2001 (Cth) (Corporations Act) as modified by ASIC Corporations (Non-Traditional Rights Issues) Instrument 2016/84 and ASIC Corporations (Disregarding Technical Relief) Instrument 2016/73. Summary information This Presentation contains summary information about Elders and its activities current as at 18 November 2024. The information in this Presentation is of a general nature and does not purport to be complete nor does it contain all information which a prospective investor may require in evaluating a possible investment in Elders or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act. The historical information in this Presentation is, or is based on, information that has been released to the Australian Securities Exchange (ASX). This Presentation should be read in conjunction with Elders’ other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au. Any market and industry data that may be used in connection with this Presentation may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. None of the Company, its representatives or advisers have independently verified that market or industry data provided by third parties or industry or general publications. Statements made in this Presentation are made only as at the date of this Presentation. The information in this Presentation remains subject to change without notice. The Company reserves the right to withdraw the Entitlement Offer or vary the timetable for the Entitlement Offer without recourse to them or notice to you. Not an offer This Presentation is not an offer or invitation to acquire New Shares or any other financial products and is not a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This Presentation is for information purposes only and is not an invitation or offer of securities for subscription, purchase or sale in any jurisdiction. Any decision to acquire New Shares under the Entitlement Offer must be made on the basis of the information contained in the offer booklet for the Entitlement Offer which will be made available following its lodgement with ASX. This Presentation is not and should not be considered an offer or an invitation to acquire the New Shares or any other financial products and does not and will not form any part of any contract for the acquisition of the New Shares. Not financial product advice This Presentation does not constitute financial product or investment advice or any recommendation to acquire New Shares or accounting, legal or tax advice. It has been prepared without taking into account the objectives, financial or tax situation or needs of individuals. You are solely responsible for forming your own independent assessment of the information and any action taken on the basis of the information contained in this Presentation. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and needs and obtain legal and taxation advice appropriate to their jurisdiction. Elders is not licensed to provide financial product advice in respect of the New Shares or any other financial products. Cooling off rights do not apply to the acquisition of New Shares under the Equity Raising. Investment risk An investment in the New Shares is subject to investment and other known and unknown risks, some of which are beyond the control of Elders, including loss of income and principal invested. Elders does not guarantee any particular rate of return or performance including without limitation arising out of the Delta Acquisition or any particular tax treatment. Persons should have regard to the Key Risks outlined in Appendix B to the Presentation including in respect of the Delta Acquisition. NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Important notice and disclaimer Financial data All dollar values are in Australian dollars (A$ or AUD) unless otherwise stated. Prospective investors should also be aware that the pro forma financial information included in this Presentation is for illustrative purposes and does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the United States Securities and Exchange Commission. Prospective investors should be aware that certain financial data included in this presentation is "non-IFRS financial information" under ASIC Regulatory Guide 230 Disclosing non-IFRS financial information published by ASIC and also "non-GAAP financial measures" within the meaning of Regulation G under the U.S. Securities Exchange Act of 1934. NonIFRS/non-GAAP measures in this presentation include the pro-forma financial information, earnings per share (EPS), earnings before interest, taxes, depreciation and amortisation (EBITDA) and earnings before interest and taxes (EBIT). While Elders believes that this non-IFRS/non-GAAP financial information provides useful information to users in measuring the financial position and conditions of Elders, the non-IFRS/non-GAAP financial information does not have a standardised meaning prescribed by Australian Accounting Standards and, therefore, may not be comparable to similarly titled measures presented by other entities, nor should it be construed as an alternative to other financial measures determined in accordance with Australian Accounting Standards. Prospective investors are cautioned, therefore, not to place undue reliance on any non-IFRS/non-GAAP financial information and ratios included in this Presentation. Such financial information is unaudited and does not purport to be in compliance with Article 3-05 of Regulation S-X under the U.S. Securities Act. Effect of rounding A number of figures, amounts, percentages, estimates and calculations of value in this Presentation are subject to the effect of rounding. Accordingly, the actual figures may differ from the figures set out in this Presentation. Past performance Investors should note that past performance and pro forma financial information given in this Presentation is given for illustrative purposes only and should not be relied on as (and is not) an indication of Elders' views on its future financial performance or condition. Prospective investors should note that past performance, including past share price performance, of Elders or Delta cannot be relied on as an indicator of (and provides no guidance as to) future performance including future share price performance. The historical information in relation to Elders included in this Presentation is, or is based on, information that has previously been released to the market. Future performance This Presentation contains certain "forward-looking statements" that are based on management's beliefs, assumptions and expectations and on information currently available to management. The words "expect", "anticipate", "estimate", "intend", "believe", "guidance", "should", "could", "may", "will", "predict", "plan" and other similar expressions are intended to identify forward-looking statements. Any indications of, and guidance on, future operating performance, earnings, financial position and performance or production are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements, including projections, guidance on future operations, earnings, estimates or production targets (if any), are provided as a general guide only and should not be relied on as an indication or guarantee of future performance. This Presentation contains statements that are subject to risk factors associated with Elders' business activities and the Delta Acquisition. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially, including but not limited to earnings, capital expenditure, cash flow and capital structure risks and general business risks. No representation, warranty or assurance (express or implied) is given or made in relation to any forward-looking statement by any person (including Elders or any of its advisers). In particular, no representation, warranty or assurance (express or implied) is given that the occurrence of the events expressed or implied in any forward-looking statements in this Presentation will actually occur. Actual operations, results, performance, production targets or achievement may vary materially from any projections and forward-looking statements and the assumptions on which those statements are based. Any forward-looking statements in this Presentation speak only as of the date of this Presentation. Subject to any continuing obligations under applicable law or regulation (including the listing rules of ASX), Elders disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statements in this presentation to reflect any change in expectations in relation to any forward-looking statements or any change in events, conditions or circumstances on which any such statement is based. NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Important notice and disclaimer Disclaimer The information in this Presentation has been obtained from or based on sources believed by Elders to be reliable. To the maximum extent permitted by law, Elders and Macquarie Capital (Australia) Limited (Macquarie or the Underwriter) and their respective affiliates, officers, employees, agents and advisers do not make any warranty, express or implied, as to the currency, accuracy, reliability or completeness of the information in this Presentation and disclaim all responsibility and liability, including without limitation for negligence or for any expenses, losses, damages or costs incurred by you as a result of the information in this Presentation being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise. Neither the Underwriter, nor any of its affiliates or related bodies corporate, nor any of its respective directors, officers, employees, agents or advisers (Underwriter Parties) have authorised, caused or permitted the issue, submission or despatch of this Presentation nor do they make any recommendation as to whether a potential investors should acquire New Shares. None of the Underwriter Parties makes or purports to make any statement in this Presentation and there is no statement in this Presentation which is based on any statement by them. The Underwriter Parties make no recommendations as to whether you or your related parties should participate in the Entitlement Offer nor do they make any representations or warranties to you concerning the Entitlement Offer, and you expressly disclaim that you are in a fiduciary relationship with any of them. Acknowledgements: You acknowledge and agree that: • determination of eligibility of investors for the purposes of the institutional or retail components of the Entitlement Offer is determined by reference to a number of matters, including legal and regulatory requirements, logistical and registry constraints and the discretion of each of Elders and/or the Underwriter; • each of Elders and the Underwriter and each of their respective affiliates, related bodies corporate, directors, officers, employees, agents or advisers disclaim any duty or liability (including for negligence) in respect of that determination and the exercise or otherwise of that discretion, to the maximum extent permitted by law; • the Underwriter may have interests in the securities of Elders, including by providing investment banking and debt services to Elders. Further, it may act as market maker or buy or sell securities or associated derivatives of Elders as principal or agent; and • the Underwriter will receive fees for acting in its capacity as lead manager and underwriter to the Equity Raising and for acting in its capacity as financial adviser to Elders in connection with the Delta Acquisition. International selling restrictions The distribution of this Presentation may be restricted by law in any country outside Australia. This Presentation does not constitute an offer of the New Shares in any jurisdiction in which it would be unlawful. In particular, this Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. The New Shares have not been, and will not be, registered under the US Securities Act of 1933 or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States except pursuant to an exemption from, or in transactions not subject to, the registration requirements of the US Securities Act of 1933. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. See further International Offer Restrictions in Appendix C to this Presentation. By accepting this Presentation you represent and warrant that you are entitled to receive the Presentation in accordance with these restrictions and agree to be bound by their limitations. NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Contents 1 01 Executive summary Insert divider title 6 3 2 A 3 Delta overview Insert divider title Acquisition rationale 9 7 15 4 Acquisition funding and terms 22 5 Questions 26 A Pro forma balance sheet 27 B Key risks 29 C International offer jurisdictions 39 D Overview of underwriting agreement terms 43 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 1 Executive summary NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ELDERS LIMITED EXECUTIVE SUMMARY Executive summary Elders has entered into an agreement to acquire 100% of the shares in Delta for an enterprise value of $475 million1 ▪ Elders has entered into an agreement to acquire 100% of the shares in Delta Agribusiness Pty Ltd (Delta) for an enterprise value of $475 million1 (Acquisition) Transaction overview ▪ The Acquisition enterprise value represents approximately: – 11.1x LTM2 to 30 June 2024 adjusted EBIT3 pre synergies4; and – 8.7x LTM to 30 June 2024 adjusted EBIT post synergies4 ▪ Delta is an Australian agribusiness providing rural products and advisory services through a network of 68 locations and approximately 40 independent wholesale customers5 Delta overview ▪ Delta’s business model is complementary to Elders, strengthening Elders’ existing offering particularly in rural products and digital and technical services ▪ In the LTM to 30 June 2024, Delta generated revenue of $835 million and EBITDA of $53 million6 ✓ Fully aligned to Elders’ core strategy and corporate acquisition principles ✓ Continues Elders’ successful track record of growing the business through disciplined acquisitions Acquisition rationale ✓ Complementary geographic footprint, filling retail gaps in New South Wales, North West Victoria, South Australia and Western Australia ✓ Enhances Elders’ technical expertise and offering in ag tech and precision agriculture ✓ Platform for backward integration strategy with potential to generate meaningful synergies ✓ Retains management expertise through implementing Elders’ proven light touch integration strategy while maintaining robust Board based governance oversight Notes: 1. Excluding transaction costs of $21 million and $19 million Delta lease liabilities as at 30 June 2024. The purchase price is subject to typical adjustment mechanisms relating to working capital and debt and debt-like items at completion. 2. LTM means last twelve months and Delta has a 30 June financial year end. 3. LTM to 30 June 2024 adjusted EBIT of $43 million pre synergies. 4. Excludes the impact of AASB 16 Leases thereby including cash rent costs in EBITDA. Post synergies multiple assumes $12 million of annual net EBITDA synergies (before one-off implementation costs). Refer to page B20 for additional information regarding anticipated synergies. 5. As at 30 June 2024. 6. Includes the impact of AASB 16 Leases. B7 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ELDERS LIMITED EXECUTIVE SUMMARY Executive summary (cont.) The combination of Elders and Delta has the potential to generate annual net EBITDA synergies of approximately $12 million over three years post completion ▪ The Acquisition, transaction costs and additional balance sheet flexibility to support future growth opportunities (together, the Transaction) to be funded through: − a $246 million fully underwritten pro rata accelerated non-renounceable entitlement offer (Equity Raising); Funding − a $110 million new revolving loan facility (Debt Financing); and − $190 million of new Elders shares issued to Delta shareholders as scrip consideration at $8.52 per share (approximately 22 million shares) (Scrip Consideration)1 ▪ Scrip Consideration will be issued to Delta shareholders on a pro rata basis and will be subject to escrow arrangements until 15 months after completion of the Transaction2 − Pro forma for the Transaction, Delta shareholders will own approximately 10.5% of Elders’ shares on issue 3 ▪ Expected to deliver pro forma FY24 mid single digit EPS accretion pre synergies and mid teens EPS accretion post synergies 4 ▪ Potential to generate annual net EBITDA synergies (before one off costs) of approximately $12 million over three years post completion5 Financial impact ▪ Elders expects pro forma balance date net debt / EBITDA for the combined group to be approximately 2.0x by 31 March 2025 pre synergies6 ▪ Elders is targeting pro forma return on capital (ROC) of ≥15% post synergies in the medium-term Timing and conditions ▪ Completion of the Acquisition is expected to occur in 1H CY25, which is principally due to the time expected to satisfy the Australian Competition and Consumer Commission (ACCC) clearance condition. However, there are other customary completion conditions including a material adverse change clause (MAC) with respect to Delta ▪ Mark Allison has indicated his willingness to remain in the role of Managing Director and CEO of Elders for the duration of the current Eight Point Plan which ends in September 2026 Notes: 1. Scrip Consideration to be issued to the Delta shareholders at $8.52 per share which represents the value of the the theoretical ex-rights price (TERP) including shares issued under the Equity Raising. TERP is a theoretical calculation only and the actual price at which Elders shares trade immediately following the ex-date for the Equity Raising may be different from TERP. 2. Where the date for release of the escrow falls within certain blackout periods related to the release of Elders’ financial results, the escrow period is extended to the first trading day after the blackout period. 3. Post-Transaction shares on issue calculated based on 158 million Elders shares on issue as at Friday, 15 November 2024, plus 54 million new shares to be issued under the Equity Raising and Scrip Consideration. 4. EPS accretion includes adjusted earnings from Delta assuming a full 12-month contribution and is before amortisation of identifiable intangibles that will be recognised as a result of the Acquisition. In accordance with AASB 133, Elders’ pre-Acquisition historical EPS has been restated based on applying an adjustment factor to take into account the bonus element of the Equity Raising. The bonus adjustment is calculated to reflect the discount to TERP and is based on Elders’ last traded price of $8.65 as at Friday, 15 November 2024. Restating Elders’ standalone EPS excluding the impact of the bonus adjustment would result in pro forma FY24 EPS accretion of mid single digit pre synergies and mid teens post synergies. Post synergies EPS accretion assumes $12 million of annual net EBITDA synergies (before one-off implementation costs). 5. Refer to page B20 for additional information regarding anticipated synergies. 6. Subject to a normal 1Q FY25 and average seasonal conditions. Includes a 12-month forecast adjusted contribution from Delta and excludes the impact of AASB 16 Leases. B8 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 2 Delta overview NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ELDERS LIMITED DELTA OVERVIEW Delta is a rural products and advisory services business Established in 2006, Delta is an Australian agribusiness providing rural products and advisory services through a network of 68 locations and approximately 40 independent wholesale customers Business model Geographic footprint QLD Rural products Independent wholesale customers + WA 13 401 28 6 4 1 VIC 15 Source: Delta company information. Notes: 1. Approximate. 2. Approximate full time equivalent employees. 40 independent wholesale customers1 450 staff2 $835m LTM 30 June 2024 revenue $53m LTM 30 June 2024 EBITDA NSW SA Agency and financial services locations 1 Digital and technical services + 68 B10 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ELDERS LIMITED DELTA OVERVIEW Delta’s complementary business model Delta’s business model is complementary to Elders, strengthening Elders’ existing offering predominantly in rural products and digital and technical services Rural products ▪ Crop protection, seeds, animal health products, fertilisers, fuel and general merchandise ▪ In-house agricultural chemicals and animal health private label brand, Four Seasons Agribusiness, with 106 APVMA registered products and approximately 45,000 tonnes of fertiliser storage on the East Coast ▪ Wholesale business in Western Australia supplying approximately 40 independent rural retailers Digital and technical services Agency and financial services ▪ Delta considers its farm advisory business to be the cornerstone of its offering, with a focus on improving client sustainability, efficiency and profitability ▪ Approximately 13 livestock agents with operations across NSW, marketing approximately 650,000 sheep and approximately 35,000 cattle1 ▪ Precision Ag solution provides an attractive model in the Australian market with a dedicated team of specialists working with clients to optimise production through data analytics ▪ Grain marketing strategy and consultancy services, marketing approximately 500,000 tonnes of grain1 ▪ Strategic minority investment in Goanna Ag, an irrigation management technology and analytics platform specialising in cotton domestically and in the United States ▪ Providing clients with off-balance sheet seasonal finance solutions for crop chemicals, fertiliser, seed, livestock and equipment finance ▪ Established graduate advisory program providing structured training and experience to new talent for continued growth and succession in the business Retail  Wholesale  Digital services  Source: Delta company information. Notes: 1. Approximate annual figures for the 12 months to 30 September 2024. Technical services  Agency  Finance  B11 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ELDERS LIMITED DELTA OVERVIEW Delta financial summary Delta achieved a record financial result in the last twelve months to 30 June 2022, driven by favourable seasonal conditions and elevated farm input prices. Following a challenging backdrop through the last twelve months to 30 June 2024, Delta is expected to benefit from improving seasonal conditions in FY25 EBITDA ($m) Sales ($m) 1,000 900 Adjusted EBITDA 868 888 80 835 % revenue 20% 76 18% 70 800 16% 700 60 52 53 14% 600 50 12% 500 40 9% 10% 400 30 6% 6% 8% 300 6% 20 200 4% 10 100 2% 0 0 LTM Jun-22 Source: Delta company information. LTM Jun-23 LTM Jun-24 -% LTM Jun-22 LTM Jun-23 LTM Jun-24 B12 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ELDERS LIMITED DELTA OVERVIEW Diversification by product and geography Delta’s earnings base is diversified by product and geography, supplying a broad agribusiness offering to its rural and regional customers Sales by geography Sales by product Seed 6% Animal health 5% Western Australia 22% Crop protection 40% General merchandise and other 22% New South Wales 49% South Australia 12% Fertiliser 27% Source: Delta company information. Notes: Sales for the LTM to 30 June 2024 given Delta year end is 30 June. Victoria 17% B13 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ELDERS LIMITED DELTA OVERVIEW High quality leadership team Delta’s experienced leadership team is excited to join Elders and will continue to manage the business following completion Gerard Hines Managing Director and Founder Chris Duff Executive Director and Founder ▪ Founded Delta in 2006 with several long-term colleagues ▪ Founded Delta in 2006 with several long-term colleagues ▪ Managing Director of Delta since its establishment ▪ Co-manager of the group and responsible for the farm advisory team 35+ years of experience 18+ years with Delta 35+ years of experience 18+ years with Delta Matt Freeman Chief Financial Officer ▪ Joined Delta in 2022 and former CFO of Australian Wool Network (AWN) ▪ Chartered accountant with 19+ years of finance experience and 7+ years of agriculture experience 19+ years of experience 2+ years with Delta Scrip Consideration issued to Delta shareholders will be subject to escrow arrangements until 15 months after completion1 Key Delta management persons will be subject to a non-compete for up to five years from completion Source: Delta company information. Notes: 1. Where the date for release of the escrow falls within certain blackout periods related to the release of Elders’ financial results, the escrow period is extended to the first trading day after the blackout period. B14 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 3 Acquisition rationale NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ELDERS LIMITED ACQUISITION RATIONALE Acquisition rationale Fully aligned to Elders’ core strategy and corporate acquisition principles Continues Elders’ successful track record of growing the business through disciplined acquisitions Complementary geographic footprint, filling retail gaps in New South Wales, North West Victoria, South Australia and Western Australia Enhances Elders’ technical expertise and offering in ag tech and precision agriculture Expected to deliver pro forma FY24 mid single digit EPS accretion pre synergies and mid teens EPS accretion post synergies1 Potential to generate annual net EBITDA synergies (before one off costs) of approximately $12 million over three years post completion2 Retains expertise through Elders’ proven light touch integration strategy while maintaining robust Board based governance oversight Notes: 1. EPS accretion includes adjusted earnings from Delta assuming a full 12-month contribution and is before amortisation of