Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — Shareholder Meeting (February 2014)
30 slides from Graincorp Limited Class A's shareholder meeting presentation, Feb 25, 2014
Slide 1: FY13 Annual General Meeting
FY13 Annual General Meeting 25 February 2014 For personal use only
Slide 2: 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 3: Agenda
Agenda For personal use only • Chairman’s Address (Mr Don Taylor) • FY13 Operating & Financial Review (Mr Don Taylor) • Business of the Annual General Meeting (Mr David Trebeck) • Resolutions • Shareholder Questions • Poll Voting • Earnings Growth Initiatives Update (Mr Don Taylor) • FY14 Outlook &
Slide 4: Chairman's Address
Chairman’s Address Mr Don Taylor For personal use only
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 Annual ROE % 18% Allied Rolling 3 yr avg ROE % Mills Fiscal 1H Fiscal 2H 15% 6% Oils 414 17% 395 12% 350 Storage & Logistics
Slide 6: Competitive landscape
Competitive landscape For personal use only Upcountry Storage Capacity Upcountry Storage GrainCorp ~20mmt Competitors Competitors ~10mmt On-farm ~10mmt Ports GrainCorp Port (all regulated) Total ~40mmt Competing Port (regulated) Production / Exports Competing Port (unregulated) Eastern Australia gra
Slide 7: Grain production
Grain production Global Wheat – Production / Demand(1) For personal use only Wheat Production (LHS) 800 250 Wheat Consumption (LHS) Wheat Ending Stocks (RHS) 700 200 600 500 150 400 100 300 200 50 100 mmt - -mmt 1. Source: USDA, GrainCorp 7
Slide 8: Australian dollar influence on grower returns
Australian dollar influence on grower returns For personal use only Wheat Price(1) Strong AUD, Australian Softening AUD, $/mt grower returns falling improved returns for 400 behind Chicago futures Australian growers Spot CBOT Wheat USD/mt 350 Spot ASX Wheat AUD/mt 300 250 200 150 100 Jan-2009 Jan-20
Slide 9: FY13 Operating & Financial Review
FY13 Operating & Financial Review Mr Don Taylor For personal use only
Slide 10: Earnings profile delivering on corporate objectives
Earnings profile delivering on corporate objectives For personal use only EBITDA(1) NPAT(1) Fiscal 1H Fiscal 2H Fiscal 1H Fiscal 2H 500 250 400 200 179 168 83 300 150 177 66 84 200 100 100 79 235 227 28 122 100 173 50 31 109 88 112 53 82 32 0 $M 0 $M FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13
Slide 11: Diversified earnings supporting higher ordinary dividend
Diversified earnings supporting higher ordinary dividend For personal use only Dividends per share 80 Ordinary DPS Special DPS 60 30 40 25 5 5 20 40 35 30 25 7 CPS0 FY09 FY10 FY11 FY12 FY13 • FY13 Payout Ratio: Total FY13 dividends of $0.45, fully franked (including $0.05 special) 59% NPAT payout(
Slide 12: 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 Stay-in-business Depreciation 122 Growth Amortisation 24 112 106 91 71 78 18 63 72 53 63 17 16 42 2 95 32 73 3 70 56 61 53 59 49 40 29 FY09 FY10 FY11 F
Slide 13: 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 71 debt less 79 Marketing and Oils 26 inventories 43 132 565 558 595 Long-term 342 340 debt 278 Cash (256) (254) (222) (255) (312) (350) FY12 FY11 HY12 FY12 HY13(4)
Slide 14: Our values
For personal use only Our values Values 14
Slide 15: Safety & Health, Environment & People
Safety & Health, Environment & People For personal use only Safety & Health Environment People • Achieved a 10.2% reduction in • Reduced hexane emissions in • Sustained engagement across lost time injury frequency vent air from the Numurkah the business at 60% rate(1), moving from 11.9 to solvent ex
Slide 16: Storage & Logistics
Storage & Logistics Storage & Logistics Throughput (1,2) For personal use only 30 25 28.5 24.1 23.8 20 15 16.9 13.9 10 5 0 mmt FY09 FY10 FY11 FY12 FY13 FY13 • Strong earnings in FY13 from significant grain export program and higher than average carry-in. • Higher than average carry-in of 4.3mmt; cou
Slide 17: Marketing
Marketing For personal use only Marketing Sales Volumes(1) Domestic sales mmt (LHS) 6.9 7 6.1 International sales mmt (LHS) 6 5.5 5 4.4 4 3.6 2.7 4.1 3.3 3 1.5 1.1 2 2.8 2.5 1 2.1 2.2 2.0 mmt0 FY09 FY10 FY11 FY12 FY13 FY13 • Reflective of 17% lower eastern Australian grain production volumes with 6.
Slide 18: Malt
Malt For personal use only Malt Sales Volumes 1.40 1.20 1.00 0.80 1.32 1.28 0.60 1.07 1.09 0.40 0.20 0.00 mmt FY10 FY11 FY12 FY13 FY13 • Sales of 1.28mmt and earnings reflective of continued high capacity utilisation above 90% with margins in line with expectations. • Effective margin management but
Slide 19: Oils
Oils For personal use only Crushing & Refining Sales Volumes(1,2) 0.60 0.55 0.50 0.45 0.40 0.54 0.55 0.35 0.50 0.52 0.50 0.30 0.25 0.20 mmt FY09 FY10 FY11 FY12 FY13 FY13 • Consistent crushing and refining sales and high capacity utilisation at bulk liquid terminals. • Complementary businesses perfor
Slide 20: Allied Mills (60% JV share)
Allied Mills (60% JV share) For personal use only FY13 • Improved earnings from value add product initiatives (eg frozen bakery products). Increased capacity • Completed new Tennyson mill expansion in Queensland in mid-2013. • Acquired Tullamarine bakery facility in Melbourne to support strategy. •
Slide 21: Business of the AGM
Business of the AGM Slides 21 – 33: Procedural Instructions & Voting Mr David Trebeck For personal use only
Slide 22: Earnings Growth Initiatives
Earnings Growth Initiatives Mr Don Taylor For personal use only
Slide 23: Earnings growth initiatives targeting ~$110M EBITDA by end of FY16
Earnings growth initiatives targeting ~$110M EBITDA by end of FY16 For personal use only Gamechangers Asset Optimisation Port Flexibility Oils Synergies & Storage & Logistics 3 Year Port Protocol Optimisation Initiatives Ports & Terminals Marketing Ports Code of Conduct Growth & Efficiencies Continu
Slide 24: Earnings growth initiatives targeting ~$110M EBITDA by end of FY16
Earnings growth initiatives targeting ~$110M EBITDA by end of FY16 For personal use only Incremental underlying EBITDA and Capex ($M) from FY13 110 10 20 Oils 30 Malt 23 50 Marketing(2) 12 Storage & 15 Logistics Storage & Marketing Malt Total Oils Terminals, Port Cumulative Logistics Game- optimisat
Slide 25: Gamechangers
Gamechangers For personal use only Storage & Logistics Marketing Malt Improved customer service • Global trading and risk • Progress on a number of • Delivery of additional stackers; management platform operational excellence initiatives successfully deployed in Sydney with sustainability benefits •
Slide 26: Asset Optimisation & Port Flexibility
Asset Optimisation & Port Flexibility For personal use only Oils Terminals, Ports, Country Port Flexibility Capture Synergies Bulk liquid terminals 3 Year Port Protocol • FY13 integration milestones opportunities • 3 year long term agreements for achieved including corporate • Capacity expansions at
Slide 27: FY14 Outlook & Earnings Guidance
FY14 Outlook & Earnings Guidance Mr Don Taylor For personal use only
Slide 28: Grains outlook – lower volumes, lower margins
Grains outlook – lower volumes, lower margins For personal use only Market fundamentals GrainCorp FY14 outlook • Most recent Eastern Australian crop production • Carry-in: 2.3mmt (FY13: 4.3mmt) estimate of 17.2mmt(1) (including 1.5mmt summer • Country receivals: ~7.7mmt (FY13: 10.4mmt); crop) 7.6mmt
Slide 29: 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 1.2mmt YTD (compared to 130mmt in 2013) and good • Malt sales volume: ~1.28mmt quality in northern hemis
Slide 30: 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 ~$16M (