25 slides from Graincorp Limited Class A's shareholder meeting presentation, Dec 20, 2012
Slide 1: FY12 Annual General Meeting – Managing Director's Presentation
For personal use only FY12 Annual A l General G l Meeting M ti 20 December 2012 Managing Director’s Presentation
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: FY12 Business Report & FY13 Outlook
For personal use only FY12 Business Report & FY13 Outlook Ms Alison Watkins
Slide 4: Delivering Our Corporate Objectives, FY12 Results, FY13 Outlook
FY12 Business Report & FY13 Outlook For personal use only 1 Delivering Our Corporate Objectives 2 FY12 Results 3 FY13 Outlook -4-
Slide 5: Delivering our corporate objectives: Improving shareholder returns
Delivering our corporate objectives For personal use only 1 Improving shareholder returns • Effective strategy driving higher underlying profitability and improving ROE(1) • TSR(2) materially outperformed the market over last 2 years through strong share price p p performance and consistent dividend
Slide 6: Delivering our corporate objectives: Managing variability
Delivering our corporate objectives For personal use only 2 Managing variability • Continued diversification reducing earnings and cash flow volatility: – Processing EBITDA contribution higher from 13%(1) in FY09 to current ~50%(2) through g additions of Malt ((in FY10)) and Oils ((in FY13)) – Reduc
Slide 7: Delivering our corporate objectives: Delivering growth
Delivering our corporate objectives For personal use only 3 Delivering growth • Grown over 20 years from a $100M company into an ASX100 >$2.0B company • Growth across all segments both organically (e.g. margin improvements and volumes post single wheat desk removal) and acquisitively (e (e.g. g Malt
Slide 8: FY12 Earnings higher due to effective strategy and strong volumes
FY12 Earnings higher due to effective strategy and strong volumes For personal use only • FY12 Earnings higher to $414M EBITDA(1) (up 18%) and $205M NPAT(1) (up 19%) due to: – Effective strategy → capturing value from our integrated grain supply chain – Strong g volumes → handling, g marketing g and
Slide 9: Diversified business supporting more consistent earnings and dividends
Diversified business supporting more consistent earnings and dividends For personal use only NPAT and Return on Equity Dividends and Earnings Per Share(1) 250 20% 120 Ordinary DPS NPAT $M (LHS) Special DPS Annual ROE % (RHS) 100 200 15% EPS share Rolling 3 yr avg ROE % (RHS) 80 150 10% cents per s 6
Slide 10: Safety and Corporate Social Responsibility
Safety and Corporate Social Responsibility For personal use only Safety y Environment People p Priority to build a culture of Committed to sound environmental Focus on engagement, “Zero Harm - Safe for Life” management practices and performance and • Committed to achieving g sustainable operations d
Slide 11: Storage & Logistics – higher earnings due to firm volumes and strategy execution
Storage & Logistics – higher earnings due to firm volumes and strategy execution For personal use only EBITDA 28% higher to $250M due to: $M FY12 FY11 • Strong grain volumes and market share Revenue 805 743 – Throughput 18% higher to 28.5 mmt EBITDA 250 195 – 59% share of production(2) received at E
Slide 12: Marketing – consistent earnings and growing global reach
Marketing – consistent earnings and growing global reach For personal use only Consistent earnings due to: $M FY12 FY11 • Higher international sales Revenue 1,891 1,406 – 4.4 mmt FY12 sales to customers across EBITDA 63 70 more than 25 countries Interest expense e pense(1) (22) (25) – Strong portfol
Slide 13: Malt – higher volumes and effective margin management
Malt – higher volumes and effective margin management For personal use only Earnings 18% higher to $117M despite $M FY12 FY11 high Australian and Canadian dollars due to: Revenue 945 868 • 251 kmt annual production capacity EBITDA(1) 117 99 added → global portfolio and customer proposition EBIT 81 6
Slide 14: Allied Mills – higher earnings and capacity replacement announced
Allied Mills – higher earnings and capacity replacement announced For personal use only • Continued earnings growth from value add $M (60% JV share) FY12 FY11 product initiatives (e (e.g. g par baked EBITDA 25 22 products) Equity Profit(1) 10 9 • Replacement of Toowoomba milling capacity (closed due
Slide 15: FY13 Outlook
FY13 Outlook For personal use only Storage & Logistics Oils • Eastern Australian crop production estimate 18.2 • High capacity utilisation mmt (1) in line with five year average - Crushing, refining and bulk liquids • FY13 grain carry-in of 4.3 mmt • Oil sales volumes expected to be in line with pri
Slide 16: Strategy Update
For personal use only Strategy Update Ms Alison Watkins
Slide 17: Strength of our integrated Business Model
Strength of our integrated Business Model For personal use only Global grains traded(1) Three core • Wheat, barley, canola → Other 8% Wheat grains ep ese t g 35% o representing of g global oba ttraded aded 30% grains and oilseeds Corn 23% • Focus on “drier climate” grains Barley 3% where we have a c
Slide 18: Unique portfolio of valuable grain storage and logistics assets and capabilities
Unique portfolio of valuable grain storage and logistics assets and capabilities For personal use only Our eastern Australia grain network • The Th llargestt country t site it and d portt network t k in i eastern Australia, handling ~75%(1) of annual grain production(2) through: – 280+ sites with ~2
Slide 19: Unique global portfolio of valuable grain processing and complementary facilities
Unique global portfolio of valuable grain processing and complementary facilities For personal use only • Produce ~35% of Australia’s malt • Produce oduce ~35% 35% oof Australia's us a a s flour ou (1) • Produce ~40% of Australia’s canola oil and ~40% of Australasia’s refined edible oil • Import and
Slide 20: Diversified business delivering a more stable earnings base
Diversified business delivering a more g base stable earnings For personal use only • Diversified business strategy into grain processing and marketing, cushioning downside earnings risk. Grain processing earnings now represent ~50% of average total earnings. • Announced initiatives in Storage & Log
Slide 21: Strategic initiatives targeting ~$110 million incremental underlying EBITDA by end FY16
Strategic initiatives targeting ~$110 million incremental underlying EBITDA by end FY16 For personal use only • GrainCorp’s strategic assets and integrated businesses, along the grain supply chain, provide a platform to pursue opportunities to grow earnings • Creation of GrainCorp Oils and amended r
Slide 22: Strong global industry fundamentals to drive additional volume growth
Strong global industry fundamentals to drive additional volume growth For personal use only Global grain demand Global malt demand Global canola oil demand • Global G grain trade has • Global G malt export trade • Australian A t li canola l oilil doubled in the past 40 years doubled in past 40 years
Slide 23: Good progress in implementation of announced 'Gamechanger' projects
Good progress in implementation of announced ‘Gamechanger’ Gamechanger projects For personal use only Storage & Logistics Marketing Malt Invested in 25 new stackers, Calgary offices opened and Port of Vancouver expansion doubling in-take speed for has commenced trading on track with new roast
Slide 24: Good progress in implementation of Asset Optimisation & Port Flexibility projects
Good progress in implementation of Asset Optimisation & Port Flexibility projects For personal use only Oils & Ports Asset Optimisation Port Flexibility Integration of GrainCorp Oils and $7 million New port protocol for bulk export grain at in synergies progressing as expected GrainCorp Port Ter
Slide 25: GrainCorp is Australia's leading agribusiness
GrainCorp is Australia’s Australia s leading agribusiness For personal use only IIntegrated t t dBBusiness i M Model d l with ith an international connecting consumers to growers i t ti l “end-to-end” “ dt d” grain i supply l chain h i Unique portfolio of local storage and logistics assets a