Slide 1: Company announcement: Acquisition of Gardner Smith and Integro Foods
Company announcement For personal use only GrainCorp Limited ABN 60 057 186 035 Date: 28 August, 2012 To: The Manager Announcements Company announcements office PUBLIC ANNOUNCEMENT ACQUISITION OF GARDNER SMITH AND INTEGRO FOODS Investor Presentation Andrew Horne Company Secretary GrainCorp Limited L
Slide 2: Acquisition of Gardner Smith & Integro Foods
For personal use only Acquisition of Gardner Smith & Integro Foods Investor Presentation 28 August 2012 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER This investor presentation (Presentation) has been prepared by GrainCorp Limited (ABN 60 057 186 035) (GNC) in relation to a pro-rata For personal use only renounceable entitlement offer (Entitlement Offer) of new ordinary shares in GNC (New Shares) under sections 708
Slide 4: Important Notice and Disclaimer (cont'd)
IMPORTANT NOTICE AND DISCLAIMER (cont’d) Future performance For personal use only This Presentation contains certain forward looking statements. Forward looking statements should or can generally be identified by the use of forward looking words such as “anticipate”, “believe”, “expect”, “forecast”,
Slide 5: Important Notice and Disclaimer (cont'd)
IMPORTANT NOTICE AND DISCLAIMER (cont’d) Financial data For personal use only All amounts are presented in Australian dollars unless otherwise stated. The pro forma financial information and past financial information provided in this Presentation is for illustrative purposes only, and is not repres
Slide 6: Important Notice and Disclaimer (cont'd)
IMPORTANT NOTICE AND DISCLAIMER (cont’d) Disclaimer For personal use only To the maximum extent permitted by law, GNC, the underwriter and their receptive affiliates, related bodies corporate, officers, employees and representatives (including agents and advisors), make no representation or warranty
Slide 7: Acquisition overview
Acquisition overview • Agreement to acquire Gardner Smith Group (“Gardner Smith”) and Integro Foods (“Integro”) for a Transaction combined enterprise value of approximately $472 million(1) For personal use only overview − 7.4x LTM EBITDA of $64 million(2) (excluding synergies) or 7.0x including syne
Slide 8: Strengthening our integrated business
Strengthening our integrated business Acquisition enhances our “end to end” grain supply chain business through: For personal use only • Scale and insight → a leading position in Australia’s canola and edible oils processing market • Strategic assets → adds valuable bulk liquid port terminals to our
Slide 9: Creating a leading integrated edible oils business
Creating a leading integrated edible oils business The combination of Gardner Smith and Integro creates an integrated and competitive offering: For personal use only • Oil processing scale → a leading canola crusher and edible oil refiner • Bulk liquid terminals scale → a leading bulk port handler o
Slide 10: Strategic rationale
Alison Watkins Managing Director and CEO For personal use only Strategic rationale Unsaved Document / 6/08/2012 / 15:46 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 11: Strategic rationale
Strategic rationale Compelling strategic fit with complementary assets and capabilities For personal use only • Creates Australia and New Zealand’s leading integrated edible oils business with scale and insight • Extends core capabilities in well established business model → canola oilseed and dow
Slide 12: Compelling strategic fit – Consistent with our business model
Compelling strategic fit – Consistent with our business model For personal use only Grows our integrated and international ‘end to end’ grain supply chain model • Leveraging our core capabilities in soft commodity supply chain management and procurement • Complementary customer base → food and feed
Slide 13: Compelling strategic fit – Complementary assets and footprint
Compelling strategic fit – Complementary assets and footprint For personal use only Portfolio of strategically located processing facilities and bulk liquid terminals • Complementary geographical footprint with our existing Australian businesses and assets • Assets located near canola growing region
Slide 14: Creating an integrated business to capture value along the oil supply chain
Creating an integrated business to capture value along the oil supply chain For personal use only The combination of the two edible oil businesses creates an integrated and competitive offering • Natural fit between oilseed crushing and edible oil refining • Leverage complementary activities from bu
Slide 15: Diversification through expanded presence in canola and processing
Diversification through expanded presence in canola and processing For personal use only Diversification of earnings Expanded presence in canola EBITDA breakdown by segment(1) Canola production in Australia(2) (Million tonnes) Oils Country & 15% Logistics 17% 2.8 2.9 Malt 2.4 25% Ports 1.8 1.9 28% 1
Slide 16: Generating value for shareholders
Generating value for shareholders For personal use only Improved • Expected to be EPS accretive(1) and reduce earnings volatility earnings profile • Integration of businesses represents a significant opportunity to generate value through: − Linking complementary edible oil supply chain assets and co
Slide 17: GrainCorp Oils
Sam Tainsh General Manager, GrainCorp Oils For personal use only GrainCorp Oils Unsaved Document / 6/08/2012 / 15:46 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 18: Creating a new business unit – GrainCorp Oils
Creating a new business unit – GrainCorp Oils • Sam Tainsh, currently head of GrainCorp Marketing, to For personal use only lead and integrate GrainCorp Oils • Klaus Pamminger, previously Trading Manager – Marketing, appointed as General Manager Marketing • Retention of key managers and staff from G
Slide 19: Gardner Smith – a leading oilseed processor and bulk liquid handler
Gardner Smith – a leading oilseed processor and bulk liquid handler Gardner Smith overview For personal use only • Second largest oilseed crusher in Australia → More than 300,000 tonnes p.a. crushing capacity • A leading bulk liquid port terminal network in Australia / NZ(1) → Over 200,000m3 storage
Slide 20: Integro – a leading refiner and packager of edible fats and oils
Integro – a leading refiner and packager of edible fats and oils For personal use only Integro overview • Australia and NZ’s largest refiner and packager of edible fats and oils → ~280,000 tonnes p.a. capacity Operations • 3 refining facilities in Australia and NZ → ~40% market share of edible oil r
Slide 21: Financials and acquisition funding
Alistair Bell Chief Financial Officer For personal use only Financials and acquisition funding Unsaved Document / 6/08/2012 / 15:46 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 22: Historical financial performance
Historical financial performance • Variability in Gardner Smith earnings typically For personal use only Gardner Smith and Integro EBITDA ($m) driven by movements in oilseed crush margins and volumes − Pacific Terminals is a large relatively stable contributor to Gardner Smith, with high $72 $72 lev
Slide 23: Committed acquisition funding
Committed acquisition funding For personal use only Gardner Smith • Between $110-121 million scrip consideration issued to Gardner Smith vendors consideration • Issue price of $9.79 per share, calculated based on the 5-day VWAP adjusted for the impacts of the Entitlement Offer(1) • Shares issued to
Slide 24: GrainCorp FY12 guidance and FY13 outlook update
GrainCorp FY12 guidance and FY13 outlook update • Segment guidance For personal use only FY12 Guidance − Storage & Logistics → 12.2mmt country receivals, ~10.5mmt exports (bulk and containers) and ~4.0mmt carry-out − Marketing → strong domestic and export sale programs − Malt → 1.35mmt sales and ~$8
Slide 25: Entitlement Offer
For personal use only Entitlement Offer Unsaved Document / 6/08/2012 / 15:46 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 26: Entitlement Offer details
Entitlement Offer details Offer Size(1) • 1-for-11 fully underwritten pro-rata Entitlement Offer to raise approximately $159 million For personal use only • Record date is 7:00pm on 3 September 2012 Offer Price • $8.80 per New Share representing a 10.1% discount to TERP of $9.79(1) Offer • Eligible
Slide 27: Entitlement Offer timetable
Entitlement Offer timetable For personal use only Event Date Announcement of Acquisition and Entitlement Offer 28 August 2012 Institutional Entitlement Offer opens 28 August 2012 Institutional Entitlement Offer closes 30 August 2012 Institutional Bookbuild 30 August 2012 Record date under the Entitl
Slide 28: Conclusion
For personal use only Conclusion Unsaved Document / 6/08/2012 / 15:46 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 29: Strategic rationale
Strategic rationale Compelling strategic fit with complementary assets and capabilities For personal use only • Creates Australia and New Zealand’s leading integrated edible oils business with scale and insight • Extends core capabilities in well established business model → canola oilseed and dow
Slide 30: Appendix
For personal use only Appendix NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 31: Pro forma capital structure
Pro forma capital structure • Half year ended 31 March 2012 represents seasonal peak for grain inventory cycle for both GrainCorp and Gardner Smith For personal use only − Average drawings under oilseed and trade inventory financing was $82 million for Gardner Smith for year ended 31 March 2012 (com
Slide 32: Gardner Smith historical financial performance
Gardner Smith historical financial performance For personal use only • Gardner Smith EBITDA adjusted to exclude edible oil and grain trading (“Trading”) contribution − Gardner Smith and Integro oil procurement and trading activities to be reorganised in GrainCorp Oils and grain and pulse trading to
Slide 33: Risk factors
For personal use only Risk factors Unsaved Document / 6/08/2012 / 15:46 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 34: Risks relating to GrainCorp's business and industry sector
Risks relating to GrainCorp’s business and industry sector Adverse weather conditions and other unpredictable factors may adversely affect the availability and price of agricultural commodities, For personal use only as well as GrainCorp’s operations Adverse weather conditions have historically caus
Slide 35: Risks relating to GrainCorp's business and industry sector (cont'd)
Risks relating to GrainCorp’s business and industry sector (cont’d) For personal use only GrainCorp is subject to food and feed industry risks GrainCorp is subject to food and stockfeed industry risks which include, but are not limited to, spoilage, contamination, fumigation or treatment application
Slide 36: Risks relating to GrainCorp's business and industry sector (cont'd)
Risks relating to GrainCorp’s business and industry sector (cont’d) For personal use only GrainCorp is subject to global and regional economic downturns and risks relating to turmoil in global financial markets The level of demand for GrainCorp’s services and products is affected by global and regio
Slide 37: Risks relating to the Acquisitions
Risks relating to the Acquisitions To the extent the due diligence information on Integro and/or Gardner Smith is incomplete, incorrect, inaccurate or misleading; there is a risk that the future results of the operations of the Combined Group may differ from GrainCorp’s expectations For personal use
Slide 38: Risks relating to the Acquisitions (cont'd)
Risks relating to the Acquisitions (cont’d) Risk of termination of the Underwriting Agreement or unavailability of the Acquisition Debt Facility For personal use only The Underwriting Agreement includes certain rights of the Lead Manager to terminate those arrangements, and the availability of the A
Slide 39: Risks relating to the Acquisitions (cont'd)
Risks relating to the Acquisitions (cont’d) GrainCorp may not effectively integrate the Acquisitions with its existing business For personal use only The Acquisitions involve the integration of businesses that have previously operated independently in the case of Gardner Smith and as part of a large
Slide 40: Risks related to the Shares
Risks related to the Shares For personal use only The future price of Shares is subject to the Combined Group’s perceived growth prospects The growth prospects of the Combined Group may be perceived to be less attractive than GrainCorp’s current stand-alone growth outlook, and hence attract a downwa
Slide 41: International offer restrictions
For personal use only International offer restrictions Unsaved Document / 6/08/2012 / 15:46 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 42: International offer restrictions
International offer restrictions International Offer Restrictions For personal use only This document does not constitute an offer of entitlements (Entitlements) or new ordinary shares (New Shares) of the Company in any jurisdiction in which it would be unlawful. Entitlements and New Shares may not
Slide 43: International offer restrictions (cont'd)
International offer restrictions (cont’d) Statutory rights of action for damages and rescission For personal use only Securities legislation in certain of the Provinces may provide purchasers with, in addition to any other rights they may have at law, rights of rescission or to damages, or both, whe
Slide 44: International offer restrictions (cont'd)
International offer restrictions (cont’d) Language of documents in Canada. Upon receipt of this document, each investor in Canada hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the Entitlements and the New Shares (including for gre
Slide 45: International offer restrictions (cont'd)
International offer restrictions (cont’d) Such offers, sales and distributions have been and shall only be made in France to qualified investors (investisseurs qualifiés) acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D.744-1, D.754-
Slide 46: International offer restrictions (cont'd)
International offer restrictions (cont’d) Italy For personal use only The offering of the Entitlements and the New Shares in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission (Commissione Nazionale per le Società e la Borsa, "CONSOB") pursuant to the Ita
Slide 47: International offer restrictions (cont'd)
International offer restrictions (cont’d) New Zealand For personal use only This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand). The Entitlements and the New Shares in the entitlement offer are not being of
Slide 48: International offer restrictions (cont'd)
International offer restrictions (cont’d) This document has been given to you on the basis that you are (i) an existing holder of the Company’s shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined in section 275(2) of the SFA). In the event that y
Slide 49: International offer restrictions (cont'd)
International offer restrictions (cont’d) United Kingdom For personal use only Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of sect