Slide 1: Company announcement
Company announcement For personal use only GrainCorp Limited ABN 60 057 186 035 Date: 29 November 2007 To: The Manager Announcements Company announcements office Lodged via www.asxonline.com PUBLIC ANNOUNCEMENT Contents for immediate release: Please find attached a presentation on GrainCorp Limited’
Slide 2: Full year results 12 months to 30 September 2007
For personal use only Full year results 12 months to 30 September 2007 29 November 2007
Slide 3: Agenda
AGENDA For personal use only 1. FY07 results & highlights 2. Strategy update 3. 2007/08 outlook
Slide 4: 2006/07 – the year in review
2006/07 – the year in review For personal use only GrainCorp, like most agribusinesses, has been impacted by drought. • Grain volumes down 79% on FY06 • EBITDA of $31.9 million • Net loss after tax of $19.8 m in line with guidance Diversification strategy has benefited the business • Allied Mill
Slide 5: 2006/07 – the year in review cont.
2006/07 – the year in review cont. For personal use only Cost reduction programs and variable costs have improved operating efficiency • $15 million reduction in indirect cost base over 3 years to 2007 from: – Storage & Handling – Corporate / Head Office Strategic plan progress is ahead of sched
Slide 6: FY07 results
FY07 results For personal use only FY07 FY06 Comments (million) (million) Grain receival tonnes 2.3 10.8 Drought reduced volumes by 79%. Tonnes traded 2.2 3.1 Due to lower exports in drought year Revenue $824.9 $816.0 Strong grain prices in FY07 EBITDA $31.9 $120.9 Net profit (loss) after tax $(19.8
Slide 7: EBITDA performance by segment ($m)
EBITDA performance by segment ($m) For personal use only $ million FY07 FY06 Variance % Comments Storage & Handling 17.9 124.3 -86% Grain volumes 79%. Includes provision for potential claims & disputes on grain of $20.1m Grain Marketing 24.1 22.7 +6% Strong domestic trading, growth in SA & WA mark
Slide 8: Consolidated Balance Sheet
Consolidated Balance Sheet For personal use only $ million 2007 2006 Variance % Current assets 345.6 373.4 -7% Non current assets 624.6 602.2 4% Total assets 970.2 975.6 -1% Current liabilities 303.7 345.2 -12% Non current liabilities* 267.5 218.1 23% Total liabilities 571.2 563.2 1% Net assets 399.
Slide 9: Debt and gearing
Debt and gearing For personal use only $m 450 400 350 300 250 200 Target < 50% 57% 150 46% 100 50 0 2006 2007 Total Equity Term Debt
Slide 10: The challenge of managing a variable grain task
The challenge of managing a variable grain task… need flexibility in the network For personal use only 30 Grainco merger 25 20 Million tonnes Carryover into next yr 15 Outloadings - international Outloadings - domestic Total receivals 10 5 0 2002 2003 2004 2005 2006 2007 EBITDA ($ m) 125.6 34.1 114.
Slide 11: A sustainable network to provide year round customer service
A sustainable network … to provide year round customer service and optimise efficiency For personal use only Network sized for base of 9.6 m receivals + 4 m carry in stock. Balancing network imperatives - lowering breakeven tonnages and meeting customer service levels (requires site capacity and
Slide 12: Storage and Handling – drought impact on receivals, outturn & carry tonnes
Storage and Handling – drought impact on receivals, outturn & carry tonnes in 2006/07 For personal use only • GNC domestic market share increased to >50% Non-grower • FY08 – expect additional receivals transshipments & imports (including given low carry Grower transshipments grain / imports) receiva
Slide 13: Acquiring Hunter Grain
Acquiring Hunter Grain For personal use only Complements port and domestic market strategies Core business Largest distributor of protein meal & Existing GrainCorp facilities other feedstuffs importer for domestic stock feed market $250 m turnover AQIS approved supply chain arrangements for
Slide 14: Strategy update
For personal use only STRATEGY UPDATE
Slide 15: Strategic plan on track
Strategic plan on track For personal use only FY09 Targets: ROE ≥ 10% Support businesses Profit ≥ $40m $5m Domestic market share ≥ 50% Allied Mills $6.1m + $12.4m $3m Ports by FY09 $6m -$1.1m Network $8.8m productivity $3m Domestic $4.5m market $1.5m $26m new share $9m $3m EBITDA $13.6m $4.6m FY07 $
Slide 16: Increased domestic market share
Increased domestic market share For personal use only The focus The results Increase domestic market share 45-50%. Reflects drought market from 44% to 50% Account management for niche Key specialists with local knowledge and larger customers in all Ability to leverage GNC range of services and devel
Slide 17: Improved network productivity
Improved network productivity For personal use only The focus The results Maintain indirect costs at Indirect costs below FY06 level. 2006 levels and increase EBITDA per tonne. Network competitiveness Competitive rail rates achieved creating a level playing field for all grain companies Seek certain
Slide 18: Increased port earnings
Increased port earnings For personal use only The focus The results Increase revenue from non-grain 18% increase in FY07 mainly from woodchips products Secure new bulk, dry commodities for Evaluating non-grain import and export options at all export and import to increase port ports. Projects involv
Slide 19: Expand trading opportunities
Expand trading opportunities For personal use only The focus The results Increase tonnes traded Lower tonnes traded due to the drought and low production however EBITDA by 6%. Domestic market expansion, Received highest tonnages ever in WA and SA pools. especially in non-traditional Strong uptake
Slide 20: Marketing EBITDA of $24.1 m (up 6%)
Marketing EBITDA of $24.1 m (up 6%) For personal use only FY07 EBITDA contribution FY07 • Strong EBITDA performance Wool – Growth in pools and pool finance products in Pools 13% 9% non-traditional states (WA/SA) – Container export program by 25% Trading – Improved margins in all grain desks Margin
Slide 21: Solid performance from Allied Mills
Solid performance from Allied Mills For personal use only Strong contribution of $15.8 m & 16% return on original GNC investment Strategies delivering the results … • Short to medium term cost reduction strategies commenced in 04/05 & full benefits now showing • Focus on flour for human consumptio
Slide 22: Changes required to achieve a globally competitive Australian agribusiness
To achieve the vision of a globally competitive Australian agribusiness, internal and external changes are required. For personal use only • Infrastructure right size network • Retain & develop skills / expertise GNC strategic plan • Expand product range • Cost base flexible cost base to manage
Slide 23: 2007/08 outlook
For personal use only 2007/08 outlook
Slide 24: Company events in 2007/08
Company events in 2007/08 For personal use only Foundation share review in February 2008 Retirement of the Managing Director in 2008 New stock management system by September 2008 Additional cost management strategies during drought Hunter Grain - completion of sale (expected 30.11.07)
Slide 25: Outlook for 2007/08
Outlook for 2007/08 For personal use only Grain receival • Forecast of 3-4 million tonnes (winter & summer crop) – volumes similar to FY07 • Grain receivals to date of 2.1 million tonnes Low carry in stock • 1.2 million tonnes carry into FY08 (4.9 million in FY07) • Expect increased volume of im
Slide 26: Questions
For personal use only QUESTIONS