Slide 1: FY23 Results
FY23 Results For the year ended 30 September 2023 16 November 2023 This release has been authorised by The Board of GrainCorp Limited
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 Speakers Contents • FY23 highlights Robert Spurway Managing Director and CEO • Strategy and growth • FY23 financial performance Ian Morrison Chief Financial Officer • Balance sheet GrainCorp Silo Art in Thallon, QLD • Outlook and conclusion GrainCorp acknowledges Aboriginal and Torres Strait
Slide 4: FY23 highlights
FY23 highlights Excellent all-round performance Return on invested capital EBITDA1 Net profit after tax (ROIC)2,3 $565m $250m 18.6% (FY22: $703m) (FY22: $380m) (FY22: 27.9%) Total grain handled4,5 Oilseed crush volumes5 Core cash6 37.4mmt 496kmt $349m (FY22: 41.1mmt) (FY22: 471kmt) (FY22: $177m core
Slide 5: Outstanding FY23 performance
Outstanding FY23 performance Strong financial results and balance sheet Outstanding FY23 performance Continued strategy execution Driving shareholder value • FY23 EBITDA of $565m • Investment in core business delivering • Exceptionally strong balance sheet; results $349m core cash • Grain handled of
Slide 6: Health and safety
Health and safety The safety of our people is our highest priority • Colleague fatally injured at Moree site in April 2023 – Work ongoing with the site team, the Moree community and relevant authorities • Developments in FY23: – Continued growth of our health and wellbeing program (THRIVE) – Simplif
Slide 7: Commitment to sustainability
Commitment to sustainability ESG is fundamental to GrainCorp’s long-term performance and sustainability Our environment Our people Our integrity • Decreased emissions by 11% per tonne of • GrainCorp Community Foundation • Received conditional endorsement from production across our processing sites s
Slide 8: Strategy and growth
| Strategy and growth
Slide 9: Executing on strategy; delivering returns and growth
Executing on strategy; delivering returns and growth Strengthen the core Targeted growth opportunities 9
Slide 10: Strengthening the core
Strengthening the core Disciplined investment in our core business Drive existing assets Leveraging capabilities Lift returns • Sustained increase in oilseed crush volumes: • Commencement of business and systems • Foods NZ – commenced strategic review of 8% CAGR FY19-23 transformation to reduce comp
Slide 11: Evaluating new oilseed crush plant
Evaluating new oilseed crush plant Good progress on feasibility study • Attractive growth opportunity: — Build on GrainCorp’s position as a leading Australian supplier of GrainCorp’s existing integrated portfolio of feedstocks renewable fuel feedstocks Used Cooking Oil (UCO) Canola oil Tallow — Crea
Slide 12: Acquisition of Performance Feeds and Nutrition Services Associates
Acquisition of Performance Feeds and Nutrition Services Associates Enhancing GrainCorp’s capabilities in Animal Nutrition • Acquisition of XF Australia announced in November 2023 for total cash consideration of $35m1 XF Australia trades under two well-known brands: • Consistent with our strategy of
Slide 13: GrainCorp Ventures
GrainCorp Ventures Executing on our strategy in Digital and AgTech About GrainCorp Ventures FY23 Initiatives Our Investments • Launched in May-22, GrainCorp • Expanded the portfolio to include Zetifi, Ventures is GrainCorp’s $30m corporate ZoomAgri and Loam, alongside previous venture capital fund i
Slide 14: Delivering on our strategy
Delivering on our strategy A stronger core business supporting investment in growth opportunities ✓ Driving existing assets to maximise returns ✓ Simplifying and optimising our business for efficiency and customer experience ✓ Identifying and acting on opportunities to lift returns across the portfo
Slide 15: FY23 financial performance
| FY23 financial performance
Slide 16: FY23 financial performance
FY23 financial performance A strong result, following record high achieved in FY22 $m FY23 FY22 • Agribusiness reported an excellent result, driven by positive cropping conditions, operating efficiencies and strong demand for feeds, fats and oils • Processing reported a record result, underpinned by
Slide 17: Agribusiness
Agribusiness Excellent all-round performance, leveraging GrainCorp’s leading ECA footprint and capabilities East Coast Australia (ECA) Agribusiness • Positive cropping conditions resulted in ECA winter grain production of 29.5mmt in 2022-23 $m FY23 FY22 Revenue • Large carry-in of 4.9mmt supported t
Slide 18: Agribusiness
Agribusiness Strong International and record FFO contributions supporting overall Agribusiness result International1 Key International metrics • Multi-origination strategy and execution from Western Australia underpinning earnings mmt FY23 FY22 • Global demand for Australian grain driven by historic
Slide 19: Processing
Processing Outstanding oilseed performance with improved efficiencies and record volumes Oilseeds Processing • Record annual oilseed crush volumes with continued operational improvements $m FY23 FY22 being delivered - 5.3% growth yoy and 7.5% CAGR since FY19 Revenue EBITDA – Operational efficiencies
Slide 20: Corporate
Corporate Focus on targeted investments in capabilities to support earnings growth Corporate Corporate • Continued investment in enabling capabilities to support strategic growth, ESG, major $m FY23 FY22 productivity programs and M&A Underlying Corporate • Feasibility costs in evaluating new oilseed
Slide 21: Balance sheet
| Balance sheet
Slide 22: Balance sheet strength
Balance sheet strength Strong cash generation to end year at $349m core cash Core cash / (debt) ($m) Debt and liquidity profile 349 Components 30 Sep 2023 30 Sep 2022 Term debt Inventory and working capital financing 200 177 Cash 129 Net debt Commodity inventory Core cash / (debt)1 (1) Core cash / (
Slide 23: Continued capital allocation discipline
Continued capital allocation discipline Focused investments across asset base to drive earnings efficiencies Capex and investments ($m)1,2 Depreciation & Amortisation (D&A) ($m)1,3,4 Sustaining Growth Investments D&A AASB-16 depreciation 117 117 86 110 107 92 81 6 36 36 90 28 28 1 26 26 1 44 46 5 1
Slide 24: Delivering strong returns
Delivering strong returns Consistent dividend profile through-the-cycle Dividends (cents per share) 30 30 Ordinary dividend 24 24 Special dividend 16 16 • FY23 final dividend: total 30cps, fully franked 12 10 • Total FY23 dividends of 54cps, fully franked 10 7 8 12 14 14 14 • Stability of ordinary d
Slide 25: Outlook and conclusion
| Outlook and conclusion
Slide 26: FY24 outlook
FY24 outlook GrainCorp is well positioned for the season ahead • ABARES’ September 2023 forecasts ECA winter crop of 20.8mmt • Dry northern conditions offsetting favourable conditions in southern regions • Harvest in QLD and Northern NSW well progressed; Southern NSW and Victorian harvests underway
Slide 27: Conclusion
Conclusion Conclusion Outstanding FY23 performance Strong balance sheet with significant flexibility Acquisition to support Animal Nutrition growth Continued assessment of new crush plant capacity Confidence in through-the-cycle earnings guidance of $310m Track record of strong returns to shareholde
Slide 28: Appendices
| Appendices
Slide 29: Our network of assets
Our network of assets GrainCorp is a leading Australian agribusiness and processing company, with integrated operations across four continents and a proud history of delivering for customers for more than 100 years > 29 >
Slide 30: How we operate
How we operate We partner with growers to maximise the value of their crops, connecting them to domestic and global marketplaces through our end-to-end supply chain and infrastructure assets. We develop innovative solutions to create high quality and sustainable products across Human Nutrition, Anim
Slide 31: Long-term ECA winter grain production
Long-term ECA winter grain production Average ECA grain production continues to improve Total ECA winter crop production (mmt) 35 25.0 2.3% CAGR of 10-year rolling average3 30 20.0 25 20 15.0 15 10.0 10 5.0 5 0.0 0 2015-16 2013-14 1999-00 2011-12 2019-20 2007-08 2021-22 2023-24f 2003-04 2005-06 2017
Slide 32: Significant operating leverage
Significant operating leverage Lifted average earnings through-the-cycle from $240m to $310m in May 2023 Average EBITDA through-the-cycle ($m) Increase in net interest costs (higher interest rates) – passed Demonstrated leverage in Sustainable on to customers, • Average EBITDA guidance through-the-c
Slide 33: Significant operating leverage in large ECA crop years
Significant operating leverage in large ECA crop years EBITDA ($m)1 703 Average EBITDA FY20-23 (since 565 UMG demerger): • GrainCorp has significant operating leverage in ~$424m large ECA crop years, as demonstrated in FY21-23 • Operating initiatives and the Crop Production Average EBITDA 331 Contra
Slide 34: Earnings bridge: FY22 to FY23
Earnings bridge: FY22 to FY23 EBITDA ($m) 11 (310) 26 (10) 69 76 703 565 FY22 EBITDA CPC impact1 Lower volumes Strong Crush Growth & project UMG fair value FY23 EBITDA and export International and volumes initiatives increase margins FFO performance and margins Agribusiness Processing Corporate -$22
Slide 35: ECA tonnes handled
ECA tonnes handled Total grain handled has a high correlation to ECA contribution margin mmt FY19 FY20 FY21 FY22 FY23 ABARES – total ECA winter + sorghum production1 9.7 12.6 34.3 33.9 32.0 Carry-in 2.3 1.5 0.7 4.3 4.9 Receivals2 3.1 4.2 16.5 16.3 13.9 Imports (trans-shipments) 2.3 1.4 0.0 0.0 0.0 D
Slide 36: Crop production contract
Crop production contract Smoothing GrainCorp’s cash flows through-the-cycle Crop Production Contract – production payment profile1 ▪ 10-year contract (started FY20) with White Rock Insurance $20m gross $70m gross ▪ Production payments based on ABARES’ “total ECA winter crop 90 payment payment produc
Slide 37: Cash flow
Cash flow ($m) 30 September 2023 30 September 2022 Statutory EBITDA 565 703 Net Interest (59) (36) Income taxes paid (203) (47) Changes in working capital and other related items 121 (169) Net operating cash flow excl inventory funding & commodity inventory 424 451 Proceeds for bank loans – inventor
Slide 38: Working capital movements
Working capital movements Working capital unwind commenced in 2H23 as commodity values normalised Net Working Capital (NWC) (AUD millions)1 800 • Net working capital started to unwind in FY23 due to lower short-term funding 700 requirements for grain shipments and 600 commodity values reducing from
Slide 39: Core cash / (debt) bridge: FY22 – FY23
Core cash / (debt) bridge: FY22 – FY23 ▪ Core cash position increased from $177m at 30 Sep 2022 to $349m at 30 Sep 2023 10 ▪ Mark-to-market assets and margin deposits (91) reduced due to realised gains and (41) (14) 120 commodity values reducing from peak (121) levels (59) ▪ Capex & Investment inclu
Slide 40: Capital management framework
Capital management framework • Target minimal core debt Service debt obligations • Debt finance commodity inventory and working capital Sustaining capital expenditure • $40–50m p.a. Dividends • Payout ratio = 50-70% of NPAT through-the-cycle • Capital investment in growth Surplus cash flow projects
Slide 41: Glossary
Glossary Term Definition Term Definition AASB Australian Accounting Standards Board IFRS International Financial Reporting Standards ABARES Australian Bureau of Agricultural and Resource Economics JV Joint Venture CAGR Compound Annual Growth Rate KMP Key Management Personnel Carry-in Grain inventory
Slide 42: GrainCorp Corporate Office
GrainCorp Corporate Office: Level 28 175 Liverpool Street Sydney NSW 2000 Australia Postal address: PO Box A268 Sydney South NSW 1235 Australia graincorp.com.au 42