a LANDMARK for Australian Agriculture 29 August 2003

a LANDMARK for Australian Agriculture 29 August 2003 ACN 081 890 459 This document may not be distributed, directly or indirectly, in the United States or to any US person

Contents 1 Executive Summary 2 Transaction Overview 3 Landmark Overview 4 AWB and Landmark 5 Funding 6 Conclusion APPENDICES 2

Important Notice The information in this document has been provided to you for informational purposes only in relation to a proposed placement to institutional investors of shares in AWB Limited (“AWB”) and is subject to change without notice. Nothing contained in this document constitutes investment, legal, tax or other advice. The information in this document does not take into account your investment objectives, financial situation or particular needs. Before making an investment decision, you should consider, with or without the assistance of a professional securities adviser, whether an investment in AWB is appropriate in light of your particular investment needs, objectives and financial circumstances. Nothing in this document should be considered a solicitation, offer or invitation to buy, subscribe for or sell any security in the United States or in any place in which, or to any person to whom, it would be unlawful to make such an offer or invitation. The distribution of this document outside Australia may be restricted by law. Persons who come into possession of this document who are not in Australia should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Neither this document nor any copy hereof may be transmitted in the United States or distributed, directly or indirectly, in the United States or to any US person including (1) any US resident, (2) any partnership or corporation or other entity organised or incorporated under the laws of the United States or any state thereof, (3) any trust of which any trustee is a US person, or (4) any agency or branch of a foreign entity located in the United States. By accepting this document, you agree to be bound by these limitations. AWB has prepared this document based on information available to it. Although all reasonable care has been taken to ensure that the facts stated and opinions given in this document are fair and accurate, the information provided in this document has not been independently verified. Accordingly, no representation or warranty, expressed or implied is made as to the fairness, accuracy, completeness or correctness of the information and opinions contained in this document. To the fullest extent permitted by law, none of AWB, its directors, employee or agents or any other person accepts any liability for any loss whatsoever arising from any use of this document or its contents, or otherwise arising in connection therewith. 3

1 Executive Summary à AWB has entered into an agreement to purchase Landmark from Wesfarmers for a net purchase consideration of A$718 million and enterprise value of A$825 million à Purchase completed today after due diligence and implementation planning à Landmark is a large and diversified rural services business which is a very attractive strategic fit for AWB à Australia’s leading supplier of agricultural inputs and a major provider of a broad range of other rural products and services à Proven management team à Following the acquisition, AWB will be uniquely positioned to meet the global challenge for Australian agriculture à Acquisition is EPS accretive (pre-goodwill, post synergies, post one-off costs) in FY 2004 and is expected to be more than 35% EPS accretive by FY 2006 à AWB will issue approximately 41 million new shares through an institutional placement, with additional equity being raised by a combination of a share purchase plan (“SPP”) and underwritten DRP à Rating agency view, in combination with “ring fence” for pool finance activities, at AWB target levels for AWB Commercial Funding and AWB Harvest Finance of BBB and AA-/A-1+ respectively (S&P) à Given the acquisition of Landmark, AWB is reviewing its shareholding in Futuris 4

2 Transaction Overview Key Features of Landmark is Australia’s leading rural distribution network with national coverage and significant growth opportunities à Largest merchandise and fertiliser distribution business in Australia à Well diversified earnings base across regions, agricultural commodities and business activities à High growth finance business that can be further leveraged by AWB à Strong insurance agency business à Extensive branch network throughout regional Australia with 430 outlets and over 100, 000 customers à Lower risk agency model relative to peers à Experienced management team which has presided over previous successful acquisitions and significant earnings growth 5

2 Transaction Overview Financial Returns à The acquisition of Landmark will assist AWB to achieve its stated financial objectives as set out at the 2003 AGM Objective Impact of Landmark Acquisition 15% return on equity in the medium term Acquisition expected to achieve target 15% ROE by FY 2005 Trend EPS growth EPS accretive in FY 2004 and by more than 35% in FY 2006 Stable dividend payment AWB expects to maintain its dividends at current levels for FY 2004 Improved quality of earnings Landmark will diversify AWB’s earnings base and reduce the volatility of AWB’s earnings Efficient capital management AWB’s funding structure utilises its surplus capital and reduces its cost of capital Appropriate credit rating S&P has indicated that AWB’s ratings will be BBB for AWB Commercial Funding and AA-/A-1+ for AWB Harvest Finance which meets AWB’s target ratings 6

2 Transaction Overview Sale Process à Exclusive sale process involving completion of due diligence by AWB à AWB and Wesfarmers have settled the purchase and sale under a Share Sale Agreement for Landmark à Simultaneous completion, subject to Completion Account adjustments à AWB and Wesfarmers have also entered into various other agreements, including: à A series of transitional arrangements including for Information Technology and Landmark’s Interest Bearing Deposits à New supply agreements between Landmark and CSBP and Landmark and WFI à Landmark’s key senior management team, including the MD, Mark Allison, is committed to continue leading the business à Sale process has enabled a detailed implementation plan to be put in place in conjunction with Landmark’s management 7

2 Transaction Overview Total Acquisition Cost à The acquisition is funded through a mix of debt and equity à The debt facility will be reduced by the amount raised under the SPP and DRP Price A$m Enterprise value 825 Net debt assumed 107 Net Purchase Consideration 718 Transaction costs Total cash consideration Funding 34 752 A$m Placement 1 160 Funded by working capital and debt finance 592 Total Funding (initial) 752 Further equity raised through SPP and DRP Note: 1. Indicative only 90 8

3 Landmark Overview Business Structure à Operations conducted through 7 business activities à Head office function centralised in Sydney à Branch network managed through 8 networks à Products channelled through branch network and distribution centres à Access to 100, 000 customers across Australia à Over 1, 900 staff, located mainly in rural and regional Australia à Landmark issues interest bearing securities to its customers by way of prospectus 9

3 Landmark Overview Landmark Business Units à Landmark provides a broad range of products and services to agricultural producers Division Business Description Merchandise à à Wholesale and retail sale of agricultural inputs Also provides agronomic advice Fertiliser à Acts as an agent for CSBP (owned by Wesfarmers) in WA, Incitec. Pivot and Hi-Fert on the East Coast Finance à à à Provides seasonal and term loans through agency agreement with Rabobank Loan book of approximately A$780 m A$282 m of Interest Bearing Deposits (IBDs) Insurance à à Sale of insurance cover options for rural businesses and households Acts as agent for WFI and CGU Livestock à Saleyard auction services and private treaty services Wool à Provides traditional broking/auction selling services and sale of risk management products 50% interest in Australian Wool Handlers (joint venture with BWK) and 40% interest in Arcadian Wool Brokers à Real Estate à Markets large rural properties, lifestyle blocks, residential real estate (regional towns) and clearing sales in country areas 10

3 Landmark Overview Sales and Earnings Growth à Strong EBITA growth rate trend (significantly drought affected in 2003) Year End 30 June (A$m) 20011 2002 2003 2004 E 3 Sales 2 1, 244 1, 591 1, 437 na EBITDA 2 44. 7 78. 8 72. 1 na EBITA 2 34. 7 64. 5 54. 0 70 -75 Notes 1. 2001 figures include only part year for IAMA 2. 2001, 2002 and 2003 figures exclude earnings from divested businesses and abnormal items 3. AWB management forecast 11

3 Landmark Overview Activity Segmentation à Merchandise and Livestock are the biggest contributors to Landmark gross profit à However, finance, insurance and fertiliser are the fastest growing activities Gross Profit Breakdown By Business Unit (2003 A) Finance 5% 1 Wool 8% Livestock 23% Merchandise 37% Fertiliser 7% Insurance 4% Note: 1. Based on June year end Other 9% Real Estate 7% 12

4 AWB and Landmark Distribution Network à Acquisition of Landmark dramatically expands AWB’s foot print across rural Australia à Better able to service customers and complement Single Desk marketing / risk management activities à Platform to leverage growth for AWB financial services business AWB office locations (49) Landmark outlets (430) 13

4 AWB and Landmark Operational Diversity à The acquisition will significantly expand the scale and scope of AWB’s activities AWB Pre-Acquisition AWB Post-Acquisition à Heavy reliance on wheat crop à Expanded distribution network à Extended product range for existing customers à Strengthened product development and technical capability à Significantly larger customer base (100, 000) à Expanded growth opportunities à Committed to Single Desk Marketing System à 30, 000 customer relationships à Committed to Single Desk Marketing System Breakdown of Gross Profit (2003 E) Pool Management Merchandise Finance & Risk Management Products Grain Acquisition & Trading Pool Management Insurance Corporate Grain Technology Supply Chain & Other Investments Other Supply Chain & Other Investments Real Estate Grain Technology Grain Acquisition & Trading Finance & Risk Management Products Fertiliser Corporate Livestock Wool 14

4 AWB and Landmark Finance Growth Opportunities à AWB currently provides harvest loans to 30, 000 grain producers (A$2 billion market) à Landmark distribution network and finance business provides AWB with opportunity to market new products, including: à Seasonal loans to 30, 000 grain producers (A$8 billion market) à Term and seasonal loans to 65, 000 SME agribusiness customers (A$12 billion market) à Loans to 5, 000 agribusiness corporates (A$8 billion market) – focus in the longer term ‘Farmers’ Product set ‘Corporations’ Finance to all agribusiness Growth Opportunity 65, 000 SME agribusiness customers A$20 b loans Growth Opportunity 5, 000 Corporate Enterprise A$8 b loans AWB’s current market 30, 000 Grain / Broadacre A$2 b loans Harvest finance to grain growers Turnover Small A$1 m 15

4 AWB and Landmark Other Opportunities Enhanced access to global markets Cross-selling Overhead cost savings Procurement cost savings Access to over 40 countries around the world Cross selling of products and services between AWB and Landmark Consolidation of AWB and Landmark corporate and head office functions, where appropriate Consolidation of procurement functions 16

4 AWB and Landmark Profit Opportunities à Total EBIT enhancement opportunities, derived primarily from finance growth opportunities, assessed at A$5 - A$10 million in FY 2004 increasing to A$30 - A$40 million by FY 2006 à Detailed implementation plan has been established to pursue opportunities from Day 1 (A$m) 2004 E 2006 E EBIT Growth Opportunities 5 – 10 30 – 40 100 -110 na 2%+ 35%+ AWB Management NPAT Forecast for Merged Company 1 EPS Accretion from Acquisition 2 Notes: 1. 2. Net profit after tax, pre goodwill amortisation including all one-off costs Based on AWB forecasts for FY 2004 and FY 2006, pre goodwill amortisation, includes all one-off costs for FY 2004 17

4 AWB and Landmark Indicative financial position as at acquisition date 1 AWB Landmark Adjustments AWB Proforma Current Assets 979 592 2 1, 573 Non Current Assets 390 157 540 1, 087 0 51 540 591 1, 369 749 542 2, 660 545 0 1, 105 Non Current Liabilities 26 5 585 616 Long Term Debt 0 0 585 Total Liabilities 586 550 585 1, 721 Shareholders Equity 783 192 1562 939 Net Working Capital (excluding Grower Loans) 178 200 0 378 (A$m) Intangibles Total Assets Current Liabilities Notes 1. 2. Subject to completion accounts Indicative only, following placement. Does not include equity raisings under the Share Purchase Plan and Dividend Reinvestment Plan 18

5 Funding Overview à Debt and equity funding in place: à Committed bank facilities of A$950 million à Underwritten equity component to raise A$250 million à Pool finance activities will be “ring-fenced” as at 1 October 2003 à Credit ratings for pool activities upgraded Entity Rating (S&P) AWB Commercial Funding BBB AWB Harvest Finance L/T AA- AWB Harvest Finance S/T A-1+ Ratios AWB Limited 2004 E 2005 E EBIT Interest Cover (x)1 4. 1 x 6. 0 x Gearing (%)2 37% 34% Notes: 1. 2. EBIT interest cover includes impact of operating leases Gearing = Total Debt including Operating leases/Total Capital 19

5 Funding A$250 m Underwritten Equity Offer in Three Tranches Placement Share Purchase Plan (SPP) 41. 1 million shares – 15% of issued capital (A$152 m-169 m at bookbuild range) Capped at A$150 m Underwritten Dividend Reinvestment Plan (DRP) If required - to raise A$250 m less (Placement + SPP) à Institutional offer via bookbuild on 2 September 2003 at indicative range of A$3. 70 A$4. 10 à The SPP will be launched immediately following the placement with the underwritten DRP providing the remainder of the funding if required à All shares issued under placement/SPP qualify for the next dividend payable in December (anticipated to be 11 cps) and will be entitled to participate in the DRP à The SPP will allow all AWB shareholders to purchase up to A$5, 000 of AWB shares each à With 60, 000 shareholders, maximum take-up would result in approximately A$300 million raising à AWB directors reserve the right to scale back where total applications exceed A$150 million à AWB will implement the DRP effective next dividend at a 5% discount, underwritten for the next three dividends to the extent that the placement and SPP raise less than A$250 million 20

6 Conclusion à AWB is now the leading agribusiness in Australia à Landmark is a clear fit with our stated growth strategy à Complements the Single Desk à Diversifies and reduces volatility of our earnings à Provides platform for growth, particularly in financial services à Expect acquisition to deliver strong earnings per share accretion à Acquisition expected to meet our return on equity target by FY 2005 à S&P has affirmed target ratings for AWB and AWB Harvest Finance à AWB remains in a strong financial position à AWB reaffirms its commitment to the Single Desk marketing system à AWB expands its services to the Australian agricultural community à AWB uniquely positioned to meet the global challenge for Australian agriculture 21

Appendix 1 - AWB’s Business Introduction à Australia's major grain marketer and one of the world's largest wheat managers and marketers – over 60 years experience in marketing Australian wheat à AWB markets wheat and other grains to more than 40 countries and is the world’s second largest wheat exporter with 16% global market share (based on 2001 -02). The AWB National Pool is a significant contributor to the Australian economy, accounting for around 3% of the total value of Australia’s exports. AWB employs more than 550 people, with a network of 43 offices in Australia and around the world à AWB is chosen by most Australian wheat and grain growers to market and finance their grain à AWB operates and manages the AWB National Pool on behalf of AWB (International) Ltd via the Single Desk system Market Cap: A$1, 140. 3 million (A$4. 16 28/8/03) Shares on issue: 274. 1 million Shareholder’s equity: A$815. 9 million (as at 31 Mar 2003) ASX listing: 22 August 2001 Index inclusion: S&P / ASX 100 (75% weighted) Average daily volume: 344, 000 shares (over the last 12 months)

Appendix 1 - AWB’s Business Dual Class Share Ownership Structure àA Class Shares (35, 000 outstanding) àB Class Shares (274. 1 m outstanding) 1. Can only be owned by current wheat growers à Shares listed on the ASX 2. One share per wheat grower with weighted voting dependant on tonnes delivered (currently 35, 000 A class shareholders) 3. Non-transferable à Can be owned by any investor, subject to 10% ownership limit (currently 60, 448 B Class shareholders) à Entitled to receive dividends à Entitled to elect up to 4 of 12 Directors over time 4. Not entitled to receive any dividends à 15% of issued capital owned by Institutions 5. Ability to control AWB through electing 7 of 12 Directors (a majority of the board)

Appendix 1 - AWB’s Business Current Corporate Structure AWB Pool management services Grain acquisition and trading Supply chain and other investments Finance and risk management products Grain technology Business services Monitors Wheat Export Authority performance of AWBI Wheat deliveries Wheat marketing Pool payments Growers Export markets

Appendix 1 - AWB’s Business streams Pool Management Services à à Base Fee Out-Performance Incentive Finance & Risk Management Products à à à AWB National Pool Payment Options AWB Basis Pool AWB riskassist Grain Acquisition & Trading à à Grain Contract Acquisition Products Domestic Trading Non-Wheat Trading Global Operations - Geneva Supply Chain & Other Investments à à à Chartering AWB Grainflow Offshore Investments Grain Technology à à à Agrifood Technology AWB Seeds Research & Development 25

Appendix 2 – Landmark’s Business Overview of Landmark by Business Unit Wool Livestock à Landmark handles approximately 25% of the National Wool Clip (600, 000 bales) à Handles approximately 20% of livestock trading in Australia à Provides traditional broking / auction selling services as well as a comprehensive range of Risk Management products à Provides saleyard auction services and private treaty services for livestock producers à 50% interest in Australian Wool Handlers (with BWK), 40% interest in Arcadia à Supplies processors, supermarket chains, lot feeders and live export markets à Landmark do not own feedlots or abattoirs à Not involved in any downstream processing 26

Appendix 2 – Landmark’s Business Overview of Landmark by Business Unit Real Estate Insurance à Markets large rural properties, residential real estate (regional towns) and clearing sales in country areas throughout Australia à Landmark offers a range of insurance cover options for rural businesses and households à Real estate sales of in excess of A$700 million in 2003 à The current arrangements with WFI and CGU will remain in place à Landmark acts as an agent for WFI and CGU 27

Appendix 2 – Landmark’s Business Overview of Landmark by Business Unit Merchandise à Supplies a broad range of agricultural inputs, including agricultural chemicals and veterinary products, to all major agricultural sectors à Distributed via 230 company owned branches, 50 franchises and 150 members (ie non. Landmark merchandise stores) à 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 28

Appendix 2 – Landmark’s Business Overview of Landmark by Business Unit Fertiliser à Acts as an agent for CSBP (owned by Wesfarmers) and others in WA; Incitec. Pivot and Hi-Fert on the east coast Finance à Landmark provides a range of financial products for rural producers including seasonal and term loans, term deposits, cheque accounts and credit cards à Acts as an agent for Rabobank and receives a proportion of the net interest on each loan and a share of a ‘bonus pool’ (precise earning arrangements are yet to be determined) à Landmark is responsible for loan approvals, however there is one Rabobank credit manager in the Landmark credit team à Landmark still ‘owns’ the client à 50 Rural Finance Managers located throughout Australia 29

Appendix 2 – Landmark’s Business Overview of Landmark by Business Unit Other à Other Sales and Gross Profit are derived from the following businesses Big N Anhydrous ammonia distribution JRT 2 Cartage of sugar cane, fertiliser and merchandise Other Interest margin on Deposit Notes and debtors, rent recovery and car sales 75% of other income 25% of other income 30