Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — Shareholder Meeting (February 2018)
41 slides from Graincorp Limited Class A's shareholder meeting presentation, Feb 15, 2018
Slide 1: Annual General Meeting – FY17
Annual General Meeting – FY17 15 February 2018
Slide 2: Disclaimer
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. The forward looking sta
Slide 3: Agenda
Agenda 1. Chairman’s Address (Mr Graham Bradley AM) 2. CEO’s Presentation (Mr Mark Palmquist) 3. Business of the Annual General Meeting (Mr Graham Bradley AM) - Resolutions - Shareholder Questions - Poll Voting 4. Meeting Closed (Mr Graham Bradley AM) 3
Slide 4: Chairman’s Address
Chairman’s Address GrainCorp {00 EARS oF cROWTH
Slide 5: CEO Presentation
CEO Presentation Mark Palmquist
Slide 6: FY17 Summary
FY17 Summary
Slide 7: FY17: Strong year, driven by large Australian crop
FY17: Strong year, driven by large Australian crop • Malt: Solid demand in craft beer and distilling; high $M FY17 FY16 utilisation. Underlying EBITDA(1) 390 256 • Oils: Good performance from Bulk Liquid Terminals. Underlying NPAT(2) 142 53 Disappointing Foods result - accelerated cost reduction Sta
Slide 8: Increase in dividends reflects growth in earnings
Increase in dividends reflects growth in earnings DIVIDENDS PER SHARE (DPS)(1) Ordinary DPS • FY17 total dividends: total FY17 Special DPS dividends of 30 cents per share 30 • Payout ratio: 48% of NPAT(2) 25 5 • Dividend policy: Payout 40-60% 5 NPAT(2) through the business cycle, and 40 targeting to
Slide 9: Commitment to safety is fundamental
Commitment to safety is fundamental LOST TIME INJURY FREQUENCY RATE(1) RECORDABLE INJURY FREQUENCY RATE(2) 11.9 38.8 10.7 36.1 7.0 21.6 13.9 3.8 11.3 11.5 2.7 3.0 FY12 FY13 FY14 FY15 FY16 FY17 FY12 FY13 FY14 FY15 FY16 FY17 LTIFR and RIFR increased marginally in FY17, emphasising the need for continu
Slide 10: Strategic Priorities
Strategic Priorities
Slide 11: Strategic priorities
Strategic priorities Strategic priorities Outcomes Growth and diversification in 1 Strengthen core businesses earnings and cashflow, stronger returns Disciplined approach to capital Maintain strong credit profile 2 management Earnings growth and improvement on return on 3 Growth and portfolio optimi
Slide 12: Strengthen core businesses
Strengthen core businesses Grains Oils Malt • Integration to form Grains unit Bulk liquid storage Foods repositioning – Crush Malt capacity expansion capacity undertaking accelerated cost capacity and upgrade – • Re-shaping country network (‘Regen’) expansion reduction program expansion – Pocatello,
Slide 13: GrainCorp Grains: combining storage, logistics and marketing
GrainCorp Grains: combining storage, logistics and marketing • Creation of a single Grains unit, combining Storage & Logistics and Marketing to form GrainCorp Grains in August 2017 • Streamlining the Grains operations will: - improve GrainCorp’s grower customer performance - enable GrainCorp to be m
Slide 14: GrainCorp Foods restructure
GrainCorp Foods restructure • GrainCorp Foods has experienced ongoing margin compression and protracted process to capture efficiency improvements at West Footscray • GrainCorp Oils is repositioning the Foods business: - combining Foods and Oilseeds businesses to simplify structure - accelerating co
Slide 15: GrainCorp Malt: growing capacity; growth in craft beer sector
GrainCorp Malt: growing capacity; growth in craft beer sector Pocatello, Idaho expansion and upgrade: • Increased malt production capacity in Pocatello, Idaho by 120kmt • Total plant capacity 220kmt after expansion • Supported by significant offtake agreement • Completed expansion in Q4 FY17; comple
Slide 16: Disciplined approach to capital management
Disciplined approach to capital management CORE DEBT(1) AND NET DEBT(2) • Balance sheet continues to strengthen as capital 1,400 50% investment program winds down and with portfolio 1,200 40% optimisation 1,000 30% • Reduction in gearing driven by increased cash flow, 800 reduced capex and sale of A
Slide 17: Portfolio optimisation
Portfolio optimisation • Improving return on invested capital remains a key focus • Sale of Allied Mills completed 31 March 2017: – GrainCorp 60% share of equity value: $190 million(1) – Equates to Allied Mills enterprise value: $455 million(2) • Sale of three German malt plants during FY17 • Contin
Slide 18: Outlook
Outlook
Slide 19: Processing outlook
Processing outlook Market fundamentals GrainCorp FY18 outlook • Global barley crop production ~142mmt(1) (FY17: 146mmt) • High capacity utilisation • Growing US craft beer market; 6% growth in sales volumes in • Strong demand for specialty products CY2016(2) (US$24 billion of sales) • Continue to be
Slide 20: Grains outlook
Grains outlook Market fundamentals GrainCorp FY18 outlook • Total east coast Australian winter crop production of • Year to date total grain receivals of 5.8mmt(2). Small summer 15.1mmt(1) (FY17: 27.2mmt(1)) crop expected. • FY18 summer crop estimates approximately 1.5mmt(3) • Year to date grain exp
Slide 21: FY18 Earnings Guidance
FY18 Earnings Guidance EBITDA NPAT • Underlying EBITDA (before significant items): $240 – • Underlying NPAT (before significant items): $50 – 70 million. Guidance 265 million • This includes the ongoing tax benefit from the recent change in US corporate tax rate, with an $18 million tax benefit in F
Slide 22: Business of the AGM
Business of the AGM Slides 23 – 39: Procedural Instructions & Voting Mr Graham Bradley AM
Slide 23: Business of the AGM
Business of the AGM For Consideration Item 1: Consideration of Financial Statements and Reports Ordinary Resolutions Item 2: Adoption of the Remuneration Report Item 3: Election of Directors 3.1 Election of Mr Graham Bradley AM 3.2 Re-election of Ms Rebecca Dee-Bradbury 3.3 Re-election of Ms Barbara
Slide 24: Voting Cards & Visitors
Voting Cards & Visitors GrainCorp Limited GrainCorp Limited Annual General Meeting Annual General Meeting 15 February 2018 15 February 2018 Non-Voting Shareholder Admission Card SHAREHOLDER/PROXYHOLDER ADMISSION/VOTING CARD Sample Only Sample Only As a non-voting Shareholder you are reminded that wh
Slide 25: Item 1: Consideration of the Financial Statements and Reports
Item 1: Consideration of the Financial Statements and Reports To receive and consider the Financial Statements and Report of the Directors and Auditor for the year ended 30 September 2017 25
Slide 26: Item 2: Adoption of the Remuneration Report
Item 2: Adoption of the Remuneration Report To consider and, if thought appropriate, pass the following ordinary resolution: “That the Remuneration Report (which forms part of the Directors’ Report) of GrainCorp Limited for the financial year ended 30 September 2017 set out on pages 28 to 40 of the
Slide 27: Proxy & direct votes
Proxy & direct votes Item 2: Adoption of the Remuneration Report PROXY & FOR OPEN AGAINST TOTAL DIRECT VOTES Item 2 160,460,172 401,464 7,249,919 168,111,555 73.5% of issued % vote 95.5% 0.2% 4.3% capital The Chairman of the Meeting will be voting open proxies in favour of the resolution 27
Slide 28: Item 3: Election / Re-election of Directors
Item 3: Election / Re-election of Directors MR GRAHAM BRADLEY AM MS REBECCA DEE-BRADBURY BA, LLB (Hons I, Sydney), LLM (Harvard), FAICD BBus, GAICD CHAIRMAN AND NON-EXECUTIVE DIRECTOR NON-EXECUTIVE DIRECTOR MS BARBARA GIBSON MR DANIEL MANGELSDORF BSc, MAICD, FTSE BAgEc(Hons), FAICD NON-EXECUTIVE DIR
Slide 29: Item 3.1: Election of Mr Graham Bradley AM
Item 3.1: Election of Mr Graham Bradley AM 3.1) To consider and, if thought appropriate, pass the following ordinary resolution: “That for the purposes of ASX Listing Rule 14.4, article 11.3(c) of the Constitution and for all other purposes, Mr Graham Bradley AM, appointed on 1 March 2017, to fill a
Slide 30: Proxy & direct votes
Proxy & direct votes Item 3.1: Election of Mr Graham Bradley AM PROXY & FOR OPEN AGAINST TOTAL DIRECT VOTES Item 3.1 167,442,465 414,411 250,954 168,107,830 73.5% of issued % vote 99.6% 0.2% 0.2% capital The Chairman of the Meeting will be voting open proxies in favour of the resolution 30
Slide 31: Item 3.2: Re-election of Ms Rebecca Dee-Bradbury
Item 3.2: Re-election of Ms Rebecca Dee-Bradbury 3.2) To consider and, if thought appropriate, pass the following ordinary resolution: “That for the purposes of ASX Listing Rule 14.4, article 11.3(a) of the Constitution and for all other purposes, Ms Rebecca Dee- Bradbury, retiring by rotation, bein
Slide 32: Proxy & direct votes
Proxy & direct votes Item 3.2: Re-election of Ms Rebecca Dee-Bradbury PROXY & FOR OPEN AGAINST TOTAL DIRECT VOTES Item 3.2 165,030,867 419,220 2,539,302 167,989,389 73.4% of issued % vote 98.2% 0.3% 1.5% capital The Chairman of the Meeting will be voting open proxies in favour of the resolution 32
Slide 33: Item 3.3: Re-election of Ms Barbara Gibson
Item 3.3: Re-election of Ms Barbara Gibson 3.3) To consider and, if thought appropriate, pass the following ordinary resolution: “That for the purposes of ASX Listing Rule 14.4, article 11.3(a) of the Constitution and for all other purposes, Ms Barbara Gibson, retiring by rotation, being eligible an
Slide 34: Proxy & direct votes
Proxy & direct votes Item 3.3: Re-election of Ms Barbara Gibson PROXY & FOR OPEN AGAINST TOTAL DIRECT VOTES Item 3.3 167,499,311 419,641 207,951 168,126,903 73.5% of issued % vote 99.6% 0.3% 0.1% capital The Chairman of the Meeting will be voting open proxies in favour of the resolution 34
Slide 35: Item 3.4: Re-election of Mr Daniel Mangelsdorf
Item 3.4: Re-election of Mr Daniel Mangelsdorf 3.4) To consider and, if thought appropriate, pass the following ordinary resolution: “That for the purposes of ASX Listing Rule 14.4, article 11.3(a) of the Constitution and for all other purposes, Mr Daniel Mangelsdorf, retiring by rotation, being MR
Slide 36: Proxy & direct votes
Proxy & direct votes Item 3.4: Re-election of Mr Daniel Mangelsdorf PROXY & FOR OPEN AGAINST TOTAL DIRECT VOTES Item 3.4 166,820,236 412,727 862,784 168,095,747 73.5% of issued % vote 99.2% 0.3% 0.5% capital The Chairman of the Meeting will be voting open proxies in favour of the resolution 36
Slide 37: Item 4: Grant of Performance Rights to Managing Director and CEO
Item 4: Grant of Performance Rights to Managing Director and CEO Mr Mark Palmquist To consider and, if thought appropriate, pass the following ordinary resolution: “That approval be given for all purposes for the grant of Performance Rights under the Company’s equity incentive plans to Managing Dire
Slide 38: Proxy & direct votes
Proxy & direct votes Item 4: Grant of Performance Rights to Managing Director and CEO PROXY & FOR OPEN AGAINST TOTAL DIRECT VOTES Item 4 162,267,912 426,896 5,403,950 168,098,758 73.5% of issued % vote 96.5% 0.3% 3.2% capital The Chairman of the Meeting will be voting open proxies in favour of the r
Slide 39: Poll Voting
Poll Voting GrainCorp Limited Annual General Meeting 15 February 2018 SHAREHOLDER/PROXYHOLDER ADMISSION/VOTING CARD Sample Only POLL VOTING In a poll, please mark a box below to indicate your voting intention. Ordinary Resolutions For Against Abstain Adoption of the Remuneration Report Election of M
Slide 40: Meeting Closed
GrainCorp 100 YEARS OF GROWTH
Slide 41: Annual General Meeting – FY17
Annual General Meeting – FY17 15 February 2018