Slide 1: Investor Presentation - Financial Half Year Ended 31 March 2016
11 May 2016 The Manager For personal use only Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 GrainCorp Limited: GNC Investor Presentation Financial Half Year Ended 31 March 2016 Please find attached the Investor Presentation relating to the financial Half Year ended 31 Mar
Slide 2: HY16 Results
HY16 Results 11 May 2016 For personal use only
Slide 3: Disclaimer
Disclaimer For personal use only 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. T
Slide 4: Agenda
For personal use only Agenda • Results Overview • Segment Performance • Balance Sheet & Capex • FY16 Outlook • Questions 3
Slide 5: Commitment to values driving positive outcomes
Commitment to values driving positive outcomes For personal use only Values LTIFR(1) performance AIFR(2) performance 41.2 12.6 38.8 10.7 25.9 7.3 7.0 21.5 6.3 18.3 13.9 3.8 3.6 12.2 HY13 FY13 HY14 FY14 HY15 FY15 HY16 HY13 FY13 HY14 FY14 HY15 FY15 HY16 Rolling 12-month Rolling 12-month average LTIFR
Slide 6: Continuing strong Malt result, challenging period for grains and Oils businesses
Continuing strong Malt result, challenging period for grains and Oils businesses For personal use only • HY16 earnings of $134M underlying EBITDA(1) and $32M underlying NPAT(2). • HY16 statutory NPAT of $20M after significant items(3). • Dividend: fully franked HY16 interim dividend of 7.5 cents per
Slide 7: Earnings profile highlighting benefits of diversification
Earnings profile highlighting benefits of diversification For personal use only Underlying EBITDA(1) $M Underlying NPAT(1) $M Malt Oils Allied Marketing S&L 235 227 173 122 166 109 136 134 111 88 61 53 35 32 HY10 HY11 HY12 HY13 HY14 HY15 HY16 HY10 HY11 HY12 HY13 HY14 HY15 HY16 1H 112 173 235 227 166
Slide 8: Stable earnings on prior half year
Stable earnings on prior half year HY15 to HY16 Earnings Bridge(1) $M For personal use only 7 13 1 Strong - performance in - 2 2 3 speciality 1 customer segments and operational Alternative Contribution In line with Lower debt efficiency Pressure on Higher origination from value- recent cost, higher
Slide 9: Diversified earnings supporting dividend
Diversified earnings supporting dividend For personal use only Dividends per share1 Ordinary DPS Special DPS 40 30 25 20 20 15 15 7.5 7.5 0 0 HY09 HY10 HY11 HY12 HY13 HY14 HY15 HY16 8-yr avg3 Payout n/a 55% 45% 49% 53% 56% 49% 53% 48% ratio(2) HY16 Dividend Dates • HY16 interim dividend: fully frank
Slide 10: Segment Performance
For personal use only Segment Performance
Slide 11: Financial summary
Financial summary For personal use only Revenue EBITDA(1) $M HY16 HY15 HY16 HY15 Malt 593 533 76 69(2) Oils 440 471 29 42 Storage & Logistics 213 209 28 27 Marketing 976 917 8 8 Allied Mills(3) - - 6 4 Corporate Costs - - (13) (13) Eliminations and other (152) (155) - - Total 2,070 1,975 134 136 1.
Slide 12: Malt – continued operational improvements and high capacity utilisation
Malt – continued operational improvements and high capacity utilisation For personal use only $M HY16 HY15(1) • Sales of 0.64mmt(2); continued high capacity Revenue 593 533 utilisation of high 90’s (%) EBITDA 76 69 • Strong demand for speciality products in EBIT 50 45 North American craft and global
Slide 13: Oils – challenging period for global crush margins; expansion projects near complete
Oils – challenging period for global crush margins; expansion projects near complete For personal use only • Oilseeds: sales volumes of 0.17mmt $M HY16 HY15 • Foods: sales volumes of 0.10mmt Revenue 440 471 • Liquid Terminals: capacity utilisation of 91%; EBITDA 29 42 • Oilseeds earnings impacted by
Slide 14: Storage & Logistics – stable result despite lower export volumes
Storage & Logistics – stable result despite lower export volumes For personal use only • Stable earnings from receivals but pressure due to: $M HY16 HY15 • Low carry-in grain stocks Revenue 213 209 • Estimated 20-25% of east coast Australian (ECA) grain EBITDA 28 27 unsold(1) • Deferred export volum
Slide 15: Marketing – strong competition from alternative origination sources
Marketing – strong competition from alternative origination sources For personal use only • Performed well considering subdued market and $M HY16 HY15 low demand for ECA grain, as it remains relatively Revenue 976 917 expensive in global markets EBITDA 8 8 • Benefited from the growth in volumes from
Slide 16: Allied Mills
Allied Mills For personal use only • Milling margins flat to declining $M (60%) JV Share(1) HY16 HY15 • Growing contribution from value-add EBITDA 15 11 product initiatives; strategy remains Equity profit(1) 6 4 focused on this area Shareholder loan interest • GrainCorp’s share of net asset value -
Slide 17: Balance Sheet and Capex
Balance Sheet and Capex For personal use only
Slide 18: Increase in gearing in line with capital expenditure and seasonal turnover
Increase in gearing in line with capital expenditure and seasonal turnover For personal use only Core Debt(1) and Net Debt(2) • 1H16 core debt at $741M and Net Debt 1,600 50% $1,335M with the half year representing 1,400 40% seasonal turnover 1,200 • Core debt gearing(3) at ~29% (or 25% 1,000 30% ex
Slide 19: Strong and flexible balance sheet
Strong and flexible balance sheet For personal use only Core Debt(1) - $M Long term debt • Core debt increasing as expected and in line Short-term debt less marketing & oils Short-term with implementation of strategic initiatives, debt less 141 205 Marketing ahead of earnings 134 and Oils 79 71 89 i
Slide 20: Commodities inventory funded with specific commodity inventory facilities
Commodities inventory funded with specific commodity inventory facilities Supplemented short Commodities inventory(1) - $M term debt with cash For personal use only 900 Marketing, Oils grain, oilseed and Malt barley inventory 829 799 825 Short-term debt 792 739 750 708 Supplemented short 675 term de
Slide 21: 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 Stay-in-business Growth 237 Depreciation Amortisation 137 127 119 34 167 30 24 91 141 169 78 122 18 69 112 96 98 17 63 71 14 63 97 103 95 67 73 61 55 70 71 68 59 4
Slide 22: Capital investment for growth in more reliable earnings
Capital investment for growth in more reliable earnings For personal use only Storage & Logistics Marketing Malt Oils Invested (1) Underway (2) Balance (3) 4 144 11 ~$252M(2) 97 underway 77 39 28 34 15 64 21 -18 First tranche 194 ~$328M announced May 2015 invested(1) Capital investments S&L S&L Mark
Slide 23: FY16 Outlook
For personal use only FY16 Outlook
Slide 24: Grains outlook – subdued export demand for Australian grain continues
Grains outlook – subdued export demand for Australian grain continues Market fundamentals GrainCorp FY16 outlook For personal use only • Eastern Australian crop production estimate of • Carry-in: 1.6mmt at historically low levels (FY15: 17.6mmt(1) (FY15: 16.5mmt) 1.9mmt) Storage & Logistics (S&L) •
Slide 25: Below normal grain stocks resulting in lower S&L volumes
Below normal grain stocks resulting in lower S&L volumes For personal use only FY16 FY16 Drivers (mmt) FY15 FY16 Outlook YTD(1) Outlook Eastern Australia Grain 16.5 17.6(2) Production • At historically low levels Grain carry-in (1-Oct) 1.9 1.6 1.6 • Limited early season export program Storage & Logi
Slide 26: Processing outlook – well placed through strong competitive position
Processing outlook – well placed through strong competitive position For personal use only Market fundamentals GrainCorp FY16 outlook • Global barley crop production ~143.4mmt(1) • Forward sales of 1.3mmt (FY15: 141.5mmt) • Malt sales volume: ~1.3mmt (FY15: 1.25mmt) • Beer demand in mature markets c
Slide 27: FY16 Earnings Guidance affirmed
FY16 Earnings Guidance affirmed For personal use only EBITDA NPAT • Underlying EBITDA (before significant • Underlying NPAT (before significant items): Guidance items): $240M – $270M $40M – $55M • Includes 60% share of Allied Mills NPAT before significant items Variables • Depreciation & Amortisatio
Slide 28: Questions
For personal use only Questions
Slide 29: Appendix
For personal use only Appendix
Slide 30: Significant items
Significant items For personal use only Net $M Segment EBITDA D&A Tax NPAT Details Interest Underlying 133.6 (68.5) (19.3) (13.6) 32.2 Restructuring costs Oils (8.0) (2.2) 3.0 (7.2) Relating to Oils network optimisation and crushing expansion. Impairment of assets S&L, Malt (4.1) 1.3 (2.8) Relating
Slide 31: Grain volumes HY15 and HY16
Grain volumes HY15 and HY16 For personal use only Volume driver (mmt) HY15 HY16 Comments Grain carry-in (1 Oct) 1.9 1.6 • Grain stored at start of period • HY15 & HY16 carry-in below average of ~3mmt Country network 6.7 7.5 • ~45% share of winter crop production(1) receivals Grain exports handled 1.
Slide 32: Upcoming event – Investor Day
Upcoming event – Investor Day For personal use only GrainCorp will hold an investor day at GrainCorp Foods in West Footscray, Melbourne, on Thursday 16 June 2016. Investors wishing to attend can register by emailing Nicole Attard at nattard@graincorp.com.au 31