Slide 1: FY22 Results
FY22 Results 16 November 2022
Slide 2: Disclaimer
Disclaimer This presentation includes both information that is historical in character and information that consists of forward looking statements. Forward looking statements are not based on historical facts, but are based on current expectations of future results or events. The forward looking sta
Slide 3: About GrainCorp
About GrainCorp GrainCorp is a leading diversified Australian agribusiness, with an integrated operating model connecting growers to domestic and international consumers in over 50 countries. Our purpose is to proudly connect with customers and rural communities to deliver value through innovation a
Slide 4: About GrainCorp
About GrainCorp GrainCorp is a leading Australian agribusiness and processing company, with integrated operations across four continents and a proud history of delivering for customers for more than 100 years. > 4 >
Slide 5: How we operate
How we operate We partner with growers to maximise the value of their crops, connecting them to domestic and global marketplaces through our end-to-end supply chain and infrastructure assets. We develop innovative solutions to create high quality and sustainable International products across the foo
Slide 6: Agenda
Agenda Speakers Contents Robert Spurway 07 FY22 results Managing Director and CEO 11 Strategy Ian Morrison Chief Financial Officer 26 Outlook GrainCorp Silo Art in Sheep Hills, VIC GrainCorp acknowledges Aboriginal and Torres Strait Islander peoples as the First Peoples of Australia and embraces the
Slide 7: Record full year result
Record full year result Strong operational execution; significant balance sheet flexibility Outstanding performance Executing our strategy Delivering significant value $703m EBITDA1 27.9% ROIC2 Dividends of $121 million in FY223 • Second consecutive bumper East Coast • Strong payback on ECA investme
Slide 8: FY22 highlights
FY22 highlights An outstanding operational and financial result 8
Slide 9: Building on our sustainability commitment
Building on our sustainability commitment ESG supporting sustainable growth into the future Our environment Our people Our integrity • Mapped scope 3 emissions and progressed • Mental health and wellbeing programs • Established Board Sustainability Committee roadmap to adopt TCFD recommendations • R
Slide 10: Commitment to Zero Harm
Commitment to Zero Harm Focus on the safety of our people 12.6 3.9 8.9 7.7 6.5 6.7 2.6 2.3 1.8 0.8 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 • Improvement to RIFR, supported by rollout of Behavioural Safety Program and 'Safe Spine/Safe Mind' to operational leaders • Harm prevention is a key
Slide 11: Strategic priorities driving higher return on invested capital
Strategic priorities driving higher return on invested capital Strengthen the core Targeted growth opportunities 11
Slide 12: Strategy aligned to macro trends
Strategy aligned to macro trends Population growth / Decarbonisation Disrupted global Technology/digital changing demographics supply chains acceleration • Multi-origin strategy • Sustainability and • Resilient, end-to-end • Progressing digital capability innovation embedded in supply chains through
Slide 13: Strengthening our core businesses
Strengthening our core businesses Core initiatives driving $40m EBITDA uplift by 2023/241 ECA network investment Asset utilisation International expansion Building capabilities Customer experience • Significant upgrade of • Diversification of port • Fraser Grain Terminal • Advanced analytics to • Da
Slide 14: Pipeline of growth initiatives to support future earnings diversification
Pipeline of growth initiatives to support future earnings diversification Animal nutrition Alternative protein Agri-Energy Digital/AgTech Grower services • Developing sustainable • Collaborating with CSIRO • GrainCorp already a • GrainCorp Ventures Loam Bio: feed solutions and v2food on the leading
Slide 15: Increasing renewable fuel feedstock capacity and capability
Increasing renewable fuel feedstock capacity and capability GrainCorp uniquely positioned to participate in rapidly rising renewable fuel market Transformative growth opportunity for GrainCorp GrainCorp is a leading supplier of renewable fuel feedstocks • Production of renewable transportation fuels
Slide 16: FY22 financial performance
| FY22 financial performance
Slide 17: FY22 financial performance
FY22 financial performance Record earnings for both business segments $m FY22 FY21 Description 17
Slide 18: Agribusiness
Agribusiness Outstanding execution, meeting strong global demand for Australian commodities East Coast Australia (ECA) Agribusiness $m FY22 FY21 • Record ECA production in FY221 Revenue • Significant increase in grain exports to 9.2mmt (FY21: 7.9mmt) EBITDA EBIT • Strong domestic outload at 6.4mmt.
Slide 19: Agribusiness
Agribusiness Strong results from International and Fats & Oils businesses International1 Key International metrics • Strong export margins from WA following bumper crop mmt FY22 FY21 Contracted grain sales - ECA • Number one Australian exporter of cereals and feed grains to Vietnam, Japan and China
Slide 20: Processing
Processing Exceptional Oilseeds result driven by strong global demand for vegetable oils Oilseeds Processing • Record oilseed crush volumes, with continued operational efficiencies at our crush plants $m FY22 FY21 • Oilseed crush margins well above average, driven by strong global demand for vegetab
Slide 21: Through the cycle earnings
Through the cycle earnings Significant operating leverage in large ECA crop years Underlying EBITDA ($m)2 703 • GrainCorp has significant operating leverage in large ECA crop years, as demonstrated in FY21 and FY22 with EBITDA far exceeding the ‘through-the-cycle’ estimate ($240m)1 FY20-22 average E
Slide 22: Balance sheet
| Balance sheet / cA \f ©
Slide 23: Balance sheet strength
Balance sheet strength Core cash position, significant flexibility Debt and liquidity profile • GrainCorp is in a very strong financial position with $177 million core cash at 30 Components 30 Sep 2022 30 Sep 2021 September 2022 Term debt Inventory and working capital financing • Net debt remains ab
Slide 24: Continued discipline with capital expenditure
Continued discipline with capital expenditure Investing prudently in ECA network to support exceptional results Capex and investments ($m)1,2 Depreciation & Amortisation (D&A) ($m)1,2 Sustaining Growth Investments D&A AASB-16 impact 117 110 107 86 98 91 90 28 36 81 6 28 1 26 68 44 46 5 98 1 90 82 81
Slide 25: Delivering significant value to shareholders
Delivering significant value to shareholders • FY22 final dividend announced: total 30cps, fully franked, Dividends (cents per share) comprising 14cps ordinary and 16cps special • Increase in ordinary dividend reflects Board confidence in average earnings being greater than stated TTC earnings, supp
Slide 26: Outlook and conclusion
| Outlook and conclusion
Slide 27: FY23 outlook
FY23 outlook • Conditions have supported an above-average ECA winter crop forecast for 2022/23. ABARES’ September 2022 forecast - 27mmt. • ECA flooding has impacted a number of regions and delayed harvest by several weeks. We expect it to impact both yield and quality in parts of ECA, with a higher
Slide 28: Conclusion
Conclusion Record financial result in FY22 Delivering on our commitments Executing our strategy Generating significant value for shareholders 28
Slide 29: Appendices
| Appendices
Slide 30: Earnings bridge: FY21 to FY22
Earnings bridge: FY21 to FY22 EBITDA ($m) Increase in Growth & UMG fair oilseed crush project value Strong FFO & volumes; strong initiatives Increase in ECA decrease International crush margins tonnes handled (1) and higher export performance 49 (25) margins 45 326 CPC impact in FY221 703 ( 22 ) 331
Slide 31: ECA tonnes handled
ECA tonnes handled Total grain handled has a high correlation to ECA contribution margin mmt FY17 FY18 FY19 FY20 FY21 FY22 ABARES – total ECA winter + sorghum 29.2 18.0 9.7 12.6 32.0 33.4 production1 Carry-in 1.7 3.3 2.3 1.5 0.7 4.3 Receivals2 15.0 6.8 3.1 4.2 16.5 16.3 Imports (trans-shipments) 0.0
Slide 32: Crop Production Contract
Crop Production Contract Smoothing GrainCorp’s cash flows through the cycle CROP PRODUCTION CONTRACT – PRODUCTION PAYMENT PROFILE1 10-year contract (started FY20) with White Rock Insurance 90 $70m gross Production payments based on ABARES’ “total ECA winter crop payment based production”2 estima
Slide 33: Cash flow
Cash flow ($m) 30-Sep-22 30-Sep-21 Statutory EBITDA 703 331 Net Interest (36) (26) Income taxes paid (47) - Changes in working capital related items (169) (164) Net operating cash flow excl inventory funding & commodity inventory 451 141 Proceeds for bank loans – inventory funding 112 418 Commoditie
Slide 34: Core debt bridge: FY21 – FY22
Core debt bridge: FY21 – FY22 (37) (10) (54) Core debt reduced from 30-Sep-21 to a core cash (105) position at 30-Sep-22, attributable to strong earnings Working capital increase in FY22 largely driven by (84) ongoing export program and higher commodity values (77) 703 Mark-to-market asset ref
Slide 35: Capital management framework
Capital management framework • Target minimal core debt Service debt obligations • Debt finance commodity inventory and working capital Sustaining capital expenditure • $35m–$45m p.a. Dividends • Payout ratio = 50-70% of ‘through-the-cycle’ NPAT • Capital investment in growth projects Surplus cash f
Slide 36: Glossary
Glossary Term Definition Term Definition AASB Australian Accounting Standards Board IFRS International Financial Reporting Standards ABARES Australian Bureau of Agricultural and Resource Economics JV Joint Venture CAGR Compound Annual Growth Rate KMP Key Management Personnel Carry-in Grain inventory
Slide 37: GrainCorp Corporate Office
GrainCorp Corporate Office: Level 28 175 Liverpool Street Sydney NSW 2000 Australia Postal address: PO Box A268 Sydney South NSW 1235 Australia graincorp.com.au 37