Slide 1: Investor Presentation for the Year Ended 30 September 2011
Company announcement For personal use only GrainCorp Limited ABN 60 057 186 035 Date: 24 November, 2011 To: The Manager Announcements Company announcements office PUBLIC ANNOUNCEMENT GRAINCORP INVESTOR PRESENTATION FOR THE YEAR ENDED 30 SEPTEMBER 2011 Results Release Presentation Betty Ivanoff Gener
Slide 2: GrainCorp 2011 Results
For personal use only Ms Alison Watkins (Managing Director and Chief Executive Officer) 24th November 2011 GRAINCORP 2011 RESULTS 1
Slide 3: Agenda
Agenda For personal use only 1 Financial Results 1. 2. Business Performance 3. Dividend 4. FY12 Outlook 5. Strategy Update 2
Slide 4: Higher earnings due to crop size and performance
Higher earnings due to crop size and performance For personal use only → Increased earnings to $350M EBITDA (up 65%) and $172M NPAT (up 114%) ROE 13.0% and EPS $0.87 (up 117%) → Significantly higher Grain earnings due to: Strong receival share of large eastern Australia crop of 24.3mmt(1) ( )
Slide 5: Financial Results
For personal use only FINANCIAL RESULTS 4
Slide 6: Strong earnings and cash flow, low gearing
Strong earnings and cash flow, low gearing For personal use only EBITDA(1) ‐ $M NPAT ($M) and ROE (%) 350 180 15% 300 150 12% 250 120 9% 200 90 172 6% 350 150 60 3% 80 100 212 30 63 0% 161 50 0 (3%) 51 (20) (20) 32 0 (30) (6%) FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 Operating Cash Flow ‐ $
Slide 7: Increased earnings from grain storage, handling, and marketing activities
Increased earnings from grain storage, handling, andd marketing k ti activities ti iti For personal use only 20 1 8 40 6 4 35 85 40 172 Higher due to record crop, Lower due to value of integrated supply softer margins 81 chain and effective response p and adverse FX to weather disruptions FY10 NPATS
Slide 8: Debt and inventory in line with strategy
Debt and inventory in line with strategy For personal use only Debt ‐ $M Grain Inventory ‐ $M 750 675 Grain Marketing inventory Malting barley inventory 675 Core debt ((1)) Net debt((2)) 600 88 600 525 525 450 450 375 120 375 756 300 601 561 300 528 225 445 91 403 225 79 337 331 150 275 289 278 301
Slide 9: Capex to handle large harvests and support growth
Capex to handle large harvests and support growth For personal use only CAPEX ‐ $ M Grains and Malt 125 $M Corporate 100 760 FY11 FY10(1) FY11 FY10 66 Depreciation 18 16 45 40 75 54 Amortisation 13 14 2 2 50 Total D&A 31 30 47 42 25 52 56 Stay‐in‐business capex 22 12 37 41 31 31 24 Investment capex
Slide 10: Business Performance
For personal use only BUSINESS PERFORMANCE 9
Slide 11: Business revenue and EBITDA overview
Business revenue and EBITDA overview For personal use only • Earnings from a portfolio of diversified grain related businesses Revenue EBITDA EBITDA(4) % contribution $M FY11 FY10 FY11 FY10 FY11 Allied Mills 6% Country & Malt((1)) 868 796 99 119 Logistics i i Malt 18% Country & Logistics 523 340 74
Slide 12: Malt – sound performance in a challenging market
Malt – sound performance in a challenging market For personal use only Malt Sales Volume ‐ mmt $M FY11 FY10((1)) 1.15 Revenue 868 796 1.10 EBITDA(2) 99 119 1.05 EBIT 68 89 1.00 1.07 1.09 1.06 1.05 1.03 Capital Expenditure 66 54 0.95 0.90 CY07 CY08 LTM Jun‐09 LTM FY10 FY11 • Lower EBITDA due to cycli
Slide 13: Higher grain volumes drive higher Grain earnings
Higher grain volumes drive higher Grain earnings For personal use only • Increased S&L grain and non‐grain throughput to 24.1mmt (up 73%) – 71% off totall grain d i (1) handled i production h dl d bby S&L ((country sites i or port terminals) i l) • Carry‐out significantly higher at 6.0mmt providing
Slide 14: Country & Logistics – higher volumes and share
Country & Logistics – higher volumes and share For personal use only $M FY11 FY10 • Higher receivals handled (13.9mmt winter and 1.0mmt 1 0mmt summer) Revenue 523 340 • Network capability demonstrated: EBITDA 74 34 – Flexibility to handle disrupted harvest EBIT 44 10 and large number of segregations
Slide 15: Ports – higher elevations
Ports – higher elevations For personal use only $M FY11 FY10 • 8.1mmt grain exports handled (7 7mmt bulk and 0.4mmt (7.7mmt 0 4mmt containers) Revenue 220 104 – 2.3mmt grain receivals direct to port EBITDA 137 52 from non‐GrainCorp sites EBIT 123 38 • 1.5mmt non‐grain exports, plus Capital Expenditu
Slide 16: Marketing – higher volumes and earnings
Marketing – higher volumes and earnings For personal use only • Higher revenue due to higher grain $M FY11 FY10 volumes and prices Revenue 1,406 924 • Increased earnings through: EBITDA 72 32 – Higher g GrainCorp p ggrain exports p to Interest expense (25) (12) 2.7mmt(1) PBT 47 20 – Higher direct (C
Slide 17: Allied Mills – earnings maintained
Allied Mills – earnings maintained For personal use only • Earnings maintained in a competitive $ M (60% JV share) FY11 FY10 environment EBITDA 26 27 • Toowoomba mill closed due to Equity Profit 8 9 flooding Shareholder loan – All customer orders met due to 1.4 1.2 interest received business flexibi
Slide 18: Safety and Sustainability – GrainCorp Values
Safety and Sustainability – GrainCorp Values For personal use only Health & Safety Sustainability 80.0 All Injury Frequency Rate Lost Time Injury Frequency Rate • Focus on reducing energy and 70.0 61.2 water usage 60.0 52 2 52.2 • Developing a better understanding 50.0 40.0 39.6 36.7 40.4 about comp
Slide 19: Dividend
For personal use only DIVIDEND 18
Slide 20: Higher dividends including special
Higher dividends including special For personal use only Dividends Per Share (DPS) and • Year end fully franked dividends Earnings Per Share (EPS) ‐ $ 0.8 1.0 per share h of: f 0.6 0.8 – $0.15 final 0 20 0.20 – $0.20 special 0.4 0.5 0.05 0.05 • Record date of 7 December 2011 0.2 0.10 0.15 0.3 and pa
Slide 21: FY12 Outlook
For personal use only FY12 OUTLOOK 20
Slide 22: Grains – high throughput volume expected
Grains – high throughput volume expected For personal use only Eastern Australia Grain Market GrainCorp FY12 Earnings Drivers((3)) • Australian industry forecasters • Carry‐in of 6.0mmt (compared to avg estimate above average 2011/2012 of 3.0mmt) – see next page crop plantings • Current crop product
Slide 23: Significance of record grain carry-in stocks
Significance of record grain carry carry‐in in stocks For personal use only • Grain carry‐in is ‘old‐season’ grain stored in GrainCorp’s network at 1 October • It is segregated from ‘new season’ grain, stored in GrainCorp’s network and outloaded to domestic or export customers in the following year
Slide 24: Malt – higher sales but continued margin pressure
Malt – higher sales but continued margin pressure For personal use only Global Malt Market GrainCorp FY12 Earnings Drivers • Soft demand in mature beer markets • Malting capacity higher to 1.4mmt • Increasing demand in emerging beer • Sales volume guidance ~1.3mmt markets → Asia Asia, Africa Africa,
Slide 25: Strategy Update
For personal use only STRATEGY UPDATE 24
Slide 26: Corporate objectives and strategic themes
Corporate objectives and strategic themes For personal use only 1 Improve Returns 2 Manage Variability 3 Growth Manage earnings through Scale through accretive Increase underlying the cycle and consistent organic and acquisitive shareholder return dividends g growth Five strategic themes 1. 1 Mainta
Slide 27: An integrated and international grain business
An integrated and international grain business For personal use only Countryy L i i Logistics P Ports P Processing i Operations Grain Marketingg (g (grain ownership p links the grain g chain)) Sydney, Hamburg (Germany), Norfolk (UK), Singapore • 280+ eastern • Contract minimum • 7 bulk export • ~1.4
Slide 28: Our business model and capabilities deliver value
Our business model and capabilities deliver value For personal use only • Well positioned to participate in global food demand growth – S i i b Servicing both h local l l and d overseas customers in i grain i and d processed d grains i • Our growing international presence reinforces our capability a
Slide 29: International capability strengthens business
International capability strengthens business For personal use only Grain Marketing Malt • ~50% % grain sales l outside d off Australia l • >90% % malt l sales l outside d off Australia l • Provides competitive capability • Leverage our international presence – Common customers in core commodities –
Slide 30: Integrated business delivering underlying growth
Integrated business delivering underlying growth For personal use only Grain Malt • Increasing I i margin i • Increasing I i volume l – Operate from grower to consumer – Servicing growing exports – New p products to capture p value – Global footprint p and relationships p • Managing costs with varia
Slide 31: FY11 strategic achievements and initiatives
FY11 strategic achievements and initiatives For personal use only 1 2 3 4/5 Maintain a Operate Grow as an Increase activity in strong market k along l the h grain i i international i l grain processing presence chain agribusiness Storage Sto age & Logistics og st cs Marketing a et g Malt/Allied a t/
Slide 32: FY12 strategic focus
FY12 strategic focus For personal use only 1 2 3 4/5 Maintain a Operate Grow as an Increase activity in strong market k along l the h grain i i international i l grain processing presence chain agribusiness Storage Sto age & Logistics og st cs Marketing a et g Malt/Allied a t/ ed Millss GrainCorp G
Slide 33: Thank you – Q&A
For personal use only Q&A THANK YOU – 32
Slide 34: Appendix – Corporate costs
Appendix – Corporate costs For personal use only $M FY11 FY10 • Adjusted Corporate costs $4M hi h d higher due to management off an Reported Corporate costs 41 33 international agribusiness Adjust for one‐offs(1) (2) 2 • Business support pp costs Adjusted Corporate costs 39 35 decentralised in FY12,
Slide 35: 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