Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — UBS Food & Agribusiness Conference 2014
23 slides from Graincorp Limited Class A's conference presentation, Jun 2, 2014
Slide 1: ASX cover letter: CFO Presentation to UBS Conference
2 June 2014. For personal use only The Manager Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam, GrainCorp Limited (ASX: GNC) CFO Presentation to UBS Conference. We attach the presentation to be given today by the Group Chief Financial Officer to the UBS Confe
Slide 2: UBS Food & Agribusiness Conference
UBS Food & Agribusiness Conference 2 June 2014 Alistair Bell (Group Chief Financial Officer) For personal use only
Slide 3: Agenda
Agenda For personal use only GrainCorp’s journey from a storage and handling business to a diversified storage, logistics, marketing and grains processing business. Overview Journey Growth Other Updates • Corporate objectives • GrainCorp journey • Earnings growth • CEO search • Business model 2008 o
Slide 4: GrainCorp is Australia's leading agribusiness
GrainCorp is Australia’s leading agribusiness For personal use only Integrated Business Model with an international “end-to-end” grain supply chain connecting consumers to growers Unique portfolio of local storage and logistics assets and local and international downstream processing assets
Slide 5: Delivering on our corporate objectives
Delivering on our corporate objectives For personal use only 1 2 3 Improving Managing Delivering returns variability growth Return on Equity % EBITDA by segment(1) EBITDA - $M 414 395 350 Marketing 13% 212 160 Storage & Logistics 41% Malt 23% Dividends – cents per share Allied Oils Mills 17% 6% 1. F
Slide 6: Strength of our integrated business model
Strength of our integrated business model For personal use only Global grains traded(1) • Wheat, barley, canola → representing Other 35% of global traded grains and 8% Wheat 30% oilseeds Three core Corn grains • Focus on “drier climate” grains where 23% Barley we have a comparative advantage 3% thro
Slide 7: Diversification strategy and targeted investment to manage variability and deliver growth
Diversification strategy and targeted investment to manage variability and deliver growth For personal use only Retrospective proforma EBITDA(1) ($M) Post 2008 single Earnings initiatives wheat desk included progressively removal from FY13 Storage & Logistics(2) Marketing(3) Majority of EBITDA Malt
Slide 8: Our values and focus on safety
Our values and focus on safety For personal use only Values Safety Performance – LTIFR(1) • Rolling 12 month average LTIFR(1) 43% lower than same time last year (as at end March) • Lead indicators focusing on near miss reporting, line leadership reviews and significant risk reviews are improving for
Slide 9: GrainCorp journey
GrainCorp journey For personal use only 2008 2009 2010 2011 2012 2012 – 2016 Shareholding Creation of Malt Creation of Earnings growth structure and market Malt acquisition GrainCorp Malt acquisitions GrainCorp Oils initiatives deregulation • Removal of Grain • Acquisition of United • Acquisition of
Slide 10: Grain storage and logistics assets and capabilities
Grain storage and logistics assets and capabilities For personal use only Our eastern Australia grain network • 280 upcountry receival sites with ~20mmt of storage capacity • 7 of 11 bulk ports with ~15mmt elevation capacity(1) • 2 packing facilities handling containerised grain exports • Manage 15+
Slide 11: Eastern Australia competitive landscape
Eastern Australia competitive landscape For personal use only Upcountry Storage Capacity Upcountry Storage GrainCorp ~20mmt Competitors Competitors ~10mmt On-farm ~10mmt Ports Total GrainCorp Port (all regulated) ~40mmt Competing Port (regulated) Production / Exports Competing Port (unregulated) Eas
Slide 12: Global portfolio of grain processing and complementary facilities
Global portfolio of grain processing and complementary facilities For personal use only • Produce ~35% of Australia’s malt • Produce ~35% of Australia's flour(1) • Produce ~40% of Australia’s canola oil and ~40% of Australasia’s refined edible oil • Import and export ~40% of Australasia’s edible oil
Slide 13: Earnings growth initiatives – projects announced and underway
Earnings growth initiatives projects announced and underway For personal use only Gamechangers Asset Optimisation Port Flexibility Oils Synergies & Storage & Logistics 3 Year Port Protocol Optimisation Ports & Terminals Marketing Ports Code of Conduct Growth & Efficiencies Continuous Malt Improvem
Slide 14: Capex supporting safety, network efficiencies and strategic initiatives
Capex supporting safety, network efficiencies and strategic initiatives For personal use only Capex(1) – $M Depreciation & Amortisation – $M 141 119 122 112 106 91 78 72 62 66 • Stay-in-business capex increased from FY12 due to inclusion of Oils • Growth capex reflective of investment to progress gr
Slide 15: Strong and flexible balance sheet
Strong and flexible balance sheet Core Debt – $M GrainCorp Oils For personal use only acquisition Schill Malz acquisition Short-term 9 debt less Marketing and Oils inventories 26 43 Long-term debt Cash FY12 FY11 HY12 FY12 HY13(4) FY13 HY14 Pro forma(3) 9 218 16 320 415 411 422 Core Debt(1) 1% 13% 1%
Slide 16: Other Updates
Other Updates For personal use only CEO Search S&L Network Optimisation • CEO search is progressing well and continue to • Network improvement plan currently in expect announcement around the middle of the development; with details provided in good time calendar year. for next harvest. • Approximate
Slide 17: Questions
For personal use only Questions
Slide 18: Appendix
For personal use only Appendix
Slide 19: Global exposure to attractive grain industry fundamentals
Global exposure to attractive grain industry fundamentals For personal use only Global grain demand Global malt demand Global canola oil demand • Global grain trade has • Global malt export trade • Australian canola oil doubled in the past 40 has doubled in the past 40 exports have trebled in the ye
Slide 20: Origination advantages to supply global demand growth markets
Origination advantages to supply global demand growth markets For personal use only Wheat Imports to 2050(1) Demand growth in proximate regions Current wheat imports (mmt) Wheat import growth to 2050 (mmt) • Australia has freight advantages to import- Wheat import growth to 2050 (%) dependent and gr
Slide 21: Grains outlook – lower volumes, competitive landscape
Grains outlook – lower volumes, competitive landscape For personal use only Market fundamentals GrainCorp FY14 outlook • Eastern Australian crop production estimate of • Carry-in: 2.3mmt (FY13: 4.3mmt) 17.2mmt(1) (including 1.2mmt summer crop) • Country receivals: ~7.7mmt (FY13: 10.4mmt); • Crop pro
Slide 22: Processing outlook – well placed through strong competitive position
Processing outlook – well placed through strong competitive position For personal use only Market fundamentals GrainCorp FY14 outlook • Global barley crop production ~141mmt(1) • Forward sales of 1.28mmt YTD (compared to 130mmt in 2013) and good • Malt sales volume: ~1.28mmt quality in northern hemi
Slide 23: FY14 Earnings Guidance
FY14 Earnings Guidance For personal use only EBITDA NPAT • EBITDA: $275M – $315M • Underlying NPAT (before significant items): Guidance $80M – $100M • Statutory NPAT (after significant items): $60M – $80M • Excludes Marketing and Oils interest expense • Depreciation & Amortisation: ~$125M of ~$18M (