Slide 1: FY21 Financial Results
This release has been authorised by the Board of GrainCorp Limited A shared passion. FY21 Financial Results 11 November 2021 Robert Spurway, Managing Director and CEO Ian Morrison, Chief Financial Officer
Slide 2: Disclaimer
WORK IN PROGRESS DRAFT 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.
Slide 3: Agenda
Agenda FY21 highlights 4 Safety and Sustainability 6 Strategy 8 FY21 financial performance 11 Balance sheet 19 Outlook and conclusion 22 Appendices 26
Slide 4: FY21 highlights
WORK IN PROGRESS DRAFT FY21 highlights Exceptional result – top end of earnings guidance FY21 performance Strategy execution Value and growth $331m underlying EBITDA1 Substantial steps to strengthen Harvest underway for another core business: well above average crop in FY22 Highly efficient
Slide 5: Outstanding financial and operational performance
WORK IN PROGRESS DRAFT FY21 highlights Outstanding financial and operational performance Underlying EBITDA1 Underlying NPAT3 Return on invested capital (ROIC)4 Continuing Operations Continuing Operations $331m from $108m2 $139m from ($16m)2 11.1% from 1.6% Total grain handled5 Oilseed crush volumes
Slide 6: Commitment to Zero Harm
WORK IN PROGRESS DRAFT Commitment to Zero Harm Relentless focus on safety of our people RECORDABLE INJURY FREQUENCY LOST TIME INJURY FREQUENCY RATE (RIFR)1,2 RATE (LTIFR)1,3 13.2 12.6 3.7 3.9 8.9 7.7 6.5 2.3 1.8 0.8 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Disappointing to record increase
Slide 7: Our sustainability framework
WORK IN PROGRESS DRAFT Our sustainability framework Sustainability provides the foundation for our Vision and Purpose and is integral to our strategy and culture 2021 a year of change for our ESG approach and communications Stakeholder engagement undertaken to identify key ESG topics for GrainCorp a
Slide 8: Strategic priorities delivering shareholder value
WORK IN PROGRESS DRAFT Strategic priorities delivering shareholder value VISION Lead sustainable and innovative agriculture through another century of growth PURPOSE Proudly connect with customers and rural communities to deliver value through innovation and expertise STRATEGIC Strengthen the core T
Slide 9: Strengthening the core
WORK IN PROGRESS DRAFT Strengthening the core Improving ROIC and ‘through-the-cycle’ EBITDA through asset utilisation and operating efficiencies International expansion Core uplift $40m EBITDA uplift by 2023/24 EBITDA $25m by 2023/24 $15m by 2023 uplift GrainsConnect Canada: Completion of Repurp
Slide 10: Growth initiatives aligned with strategy
WORK IN PROGRESS DRAFT Growth initiatives aligned with strategy Targeted investment and research collaborations focused on growth areas aligned with our strategy Case studies • Working with CSIRO to develop a range of value- Alternative added plant protein options derived from protein commodities su
Slide 11: FY21 financial performance
FY21 financial performance
Slide 12: Delivery of operating initiatives driving substantial earnings uplift
WORK IN PROGRESS DRAFT Delivery of operating initiatives driving substantial earnings uplift Significant outperformance in FY21 versus FY17 (similar sized crop year) Proforma Underlying EBITDA ($m)1 Outstanding financial result in FY21 3312 Considerable increase in earnings compared to last comp
Slide 13: Financial highlights
WORK IN PROGRESS DRAFT Financial highlights Substantial increase in earnings in both business segments Business segment EBITDA ($m) FY21 FY201 Agribusiness 275 79 Processing 78 46 Corporate (22) (16) Total EBITDA 331 108 Depreciation & Amortisation (107) (110) Interest (26) (26) Tax (59) 12 Underlyi
Slide 14: FY20 – FY21 EBITDA bridge
WORK IN PROGRESS DRAFT FY20 – FY21 EBITDA bridge EBITDA bridge FY20-FY21 ($m) Feeds New GCC impacted countercyclical to Increase in Full year run-rate Increase in grain by FGT delay accounting ECA, strong crush volumes, after one-off volumes, margins, and severe Increase in treatment for Auscol stro
Slide 15: Agribusiness
WORK IN PROGRESS DRAFT Agribusiness Outstanding financial and operational performance in Agribusiness bumper crop year $m FY21 FY20 East Coast Australia (ECA): Revenue 5,194 3,415 EBITDA2 275 79 Outstanding supply chain execution and increased asset utilisation EBIT 198 1 Strong supply chain mar
Slide 16: Agribusiness
WORK IN PROGRESS DRAFT Agribusiness Successful year for International business, developing markets and customers and connecting ECA grain globally International: Key International metrics International business played key role in connecting ECA supply to global demand Million metric tonnes (mmt) F
Slide 17: Processing
WORK IN PROGRESS DRAFT Processing Exceptional Oilseeds performance with record crush Processing volumes and strong global oil values $m FY21 FY20 Revenue 739 621 Oilseeds: EBITDA 78 46 Record oilseed crush volumes, driven by high utilisation of GrainCorp’s crushing EBIT 52 21 plants at Numurkah an
Slide 18: Processing
WORK IN PROGRESS DRAFT Processing Strong Foods performance, increased volumes Foods GrainCorp Foods sales volumes (tonnes) Strong volumes – optimising product mix 220,000 More diversified customer base, with on-boarding of major new customer 200,000 during the year 180,000 Development of Pin a
Slide 19: Balance sheet
Balance sheet
Slide 20: Core debt vs net debt profile
WORK IN PROGRESS DRAFT Core debt vs net debt profile Strong financial position with minimal core debt DEBT AND LIQUIDITY PROFILE Components ($m) 30 Sep 2021 30 Sep 2020 Term debt 150 150 Inventory and working capital financing 576 214 Core debt reduction from $37m to $1m Cash (127) (125) Net debt
Slide 21: Disciplined capital expenditure
WORK IN PROGRESS DRAFT Disciplined capital expenditure Lifting return on invested capital Capex and investments – Continuing Operations ($m)1 Depreciation & Amortisation (D&A) ($m)1 Sustaining Growth Investments AASB-16 impact 162 D&A 26 110 107 96 98 90 91 28 28 84 81 44 26 68 46 1 5 14 82 79 11 52
Slide 22: Outlook and conclusion
Outlook and conclusion GRAINCORP VICTORIA 22
Slide 23: FY22 outlook
WORK IN PROGRESS DRAFT FY22 outlook Expect ECA crop to be well above average; global demand for Australian grain to remain strong 3-month rainfall outlook: Nov 2021 – Jan 20221 ABARES’ September ECA 2021-22 winter crop forecast 26.5mmt GrainCorp ECA winter harvest receivals year-to-date 2.3mmt
Slide 24: Capital management framework
WORK IN PROGRESS DRAFT Capital management framework Conservative capital structure and disciplined investment approach Capital Management Framework Service debt obligations Sustaining capital Dividends Surplus cash flow - Target minimal core debt expenditure Payout ratio = - Capital investment in gr
Slide 25: Conclusion
WORK IN PROGRESS DRAFT Conclusion Outstanding financial result from both business segments Operating initiatives to strengthen core business further Investments / collaborations in strategic growth areas Sustainability at centre of GrainCorp’s vision and strategy Positive outlook for FY22: high grai
Slide 26: Appendix
Appendix 26
Slide 27: About GrainCorp
WORK IN PROGRESS DRAFT About GrainCorp High quality strategic infrastructure assets servicing customers worldwide 27
Slide 28: How we operate
WORK IN PROGRESS DRAFT How we operate 28
Slide 29: ‘Normalised’ ECA grain flows
WORK IN PROGRESS DRAFT ‘Normalised’ ECA grain flows GrainCorp’s market share of grain volumes increases as the ECA crop size gets larger. The typical sequencing of grain flow in ECA for a normalised crop production year: Production: 10-year average of ECA total winter crop and sorghum production ~
Slide 30: ECA tonnes handled
WORK IN PROGRESS DRAFT ECA tonnes handled Total grain handled has a high correlation to ECA contribution margin1 mmt FY17 FY18 FY19 FY20 FY21 ABARES – Total ECA winter + sorghum production 29.2 18.0 9.7 12.6 31.8 Carry-in 1.7 3.3 2.3 1.5 0.7 Receivals 15.0 6.8 3.1 4.2 16.5 Imports (trans-shipments)
Slide 31: Crop Production Contract
WORK IN PROGRESS DRAFT 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 $70m gross payment based on $70m gross 90 Production payments based on ABARES’ “tota
Slide 32: Seasonal movements in commodity inventory
WORK IN PROGRESS DRAFT Seasonal movements in commodity inventory TYPICAL SEASONAL MOVEMENT OF COMMODITY INVENTORY SHORT-TERM IMPACT OF EXPORT SHIPMENTS ON WORKING NET DEBT/CORE DEBT (GRAPHICAL REPRESENTATION ONLY) CAPITAL AND CORE DEBT Grain purchased using commodity inventory facility Commodity inv
Slide 33: Historical proforma earnings
WORK IN PROGRESS DRAFT Historical proforma earnings Proforma EBITDA includes the following adjustments, in order to provide a Proforma Underlying EBITDA ($m)1 better comparative with prior years: Removal of earnings from Australian Bulk Liquid Terminals (ABLT). Proforma EBITDA Incorporation of t
Slide 34: Core debt bridge: FY20 – FY21
WORK IN PROGRESS DRAFT Core debt bridge: FY20 – FY21 Core Debt bridge (FY20 - FY21) ($M) Elevated net working capital related to ongoing export (38) program which is typically complete by Q4 (29) (85) Mark-to-market asset reflective of strong unrealised gains in Q4 FY21 331 (35) (18) GST recei
Slide 35: Key ESG achievements
WORK IN PROGRESS DRAFT Key ESG achievements Building on performance and transparency across three key ESG areas People and Ethical conduct, Environment community transparency • Conducted top-down assessment of climate • Conducted employee survey: 68% • Working with customers to phase out use of risk
Slide 36: Proudly connecting with customers and rural communities
Proudly connecting with customers and rural communities to deliver www.graincorp.com.au value through innovation and expertise