Slide 1: HY13 Results and Strategy Update
HY13 Results and Strategy Update 16 May 2013 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 HY13 Results Strategy Update Recommended Offer • Highlights • Gamechangers • Proposed Offer from • Segment • Asset Optimisation Archer Daniels Performance Midland Company • Port Flexibility (“ADM”) • Balance Sheet and Capex • Next Steps • Outlook 3
Slide 4: Strong earnings due to grain volumes and diversification strategy
Strong earnings due to grain volumes and diversification strategy For personal use only • Strong earnings of $227M EBITDA(1) and $109M NPAT(2). • Statutory NPAT of $88M after significant items(3). • Storage & Logistics – benefiting from higher than average carry-in, firm receivals market share and a
Slide 5: 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 83 300 150 177 84 200 100 100 79 28 122 235 227 109 100 173 50 31 88 112 53 82 32 $M 0 0 $M FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13 1H 82
Slide 6: Diversified earnings supporting higher ordinary interim dividend
Diversified earnings supporting higher ordinary interim dividend For personal use only Dividends per share • HY13 fully franked interim dividends 40 Interim DPS Interim Special DPS totalling $0.25 per share comprising: • $0.20 Ordinary dividend 15 5 20 5 • $0.05 Special dividend 15 15 15 20 • HY13 d
Slide 7: Driving change in safety culture
Driving change in safety culture For personal use only Lost Time Injury Frequency Rate(1) Key focus in FY13: 16 • Reduce Fatal Level Risks through 15 physical, system and process 14 14.5 improvements 13 12 12.4 • Make significant progress towards 12.2 11.7 11 11.6 OHS accreditation 10 • Drive a chan
Slide 8: Diversified business and more 'normal' receivals
Diversified business and more ‘normal’ receivals For personal use only HY12 to HY13 Earnings Bridge(1) - $M 1 1 28 13 11 4 33 11 4 122 More Oils inclusion Higher debt Lower ‘normal’ and recent capex post Oils earnings 109 receivals Sustained Strong capacity More program acquisition performance, util
Slide 9: Portfolio of grain businesses capture value along the grain chain
Portfolio of grain businesses capture value along the grain chain For personal use only Revenue EBITDA(1) $M HY13 HY12 HY13 HY12 Storage & Logistics 385 439 119 147 Marketing(2) 1,212 937 27 38 Malt(3) 461 468 55 59 Oils(4) 462 33 Allied Mills(5) - - 5 4 Corporate Costs - - (12) (13) Eliminations an
Slide 10: Segment Performance
For personal use only Segment Performance
Slide 11: Storage & Logistics – strong earnings with return to more 'normal' receivals
Storage & Logistics – strong earnings with return to more ‘normal’ receivals For personal use only • Earnings reflective of more ‘normal’ Eastern $M HY13 HY12 Australian crop production and benefiting from Revenue 385 439 carry-in of 4.3mmt(1) and 4.3mmt of grain EBITDA 119 147 exports EBIT 94 123 •
Slide 12: Marketing – sustained performance and consistent sales
Marketing – sustained performance and consistent sales For personal use only $M HY13 HY12 • Earnings reflective of lower Eastern Australian grain production volumes Revenue 1,212 937 • 3.5mmt sales delivered(1) EBITDA 27 38 • 1.3mmt domestic, 2.2mmt export and Interest expense(2) (10) (11) internati
Slide 13: Malt – continued high capacity utilisation
Malt – continued high capacity utilisation For personal use only $M HY13 HY12 • Earnings reflective of continued high Revenue 461 468 capacity utilisation of 95% with margins in line with expectations EBITDA(1) 55 59 EBIT(1) 37 40 • Continued growth from malt portfolio position (eg distillers, craft
Slide 14: Oils – strong earnings across crushing, refining and terminals
Oils – strong earnings across crushing, refining and terminals For personal use only $M HY13 HY12(1) Crushing & Refining Revenue 462 538 • Combined crushing and refining capacity of 0.60mmt EBITDA 33 33 • Sales in line with expectations of 0.27mmt EBIT 22 24 of crushed and refined products Capital E
Slide 15: Allied Mills – improved earnings and capacity replacement on track
Allied Mills – improved earnings and capacity replacement on track For personal use only $M (60%) JV Share HY13 HY12 • Improved earnings from value add product initiatives (eg Par Baked EBITDA 13 12 Bread) Equity profit(1) 5 4 • New Tennyson mill expansion in Shareholder loan interest 1 1 received Q
Slide 16: Balance Sheet and Capex
Balance Sheet and Capex For personal use only
Slide 17: Strong and flexible balance sheet
Strong and flexible balance sheet For personal use only Core Debt – $M Creation of GrainCorp Oils • HY13 Core Debt(1) at HY13 of $415M Schill Malz acquisition 9 79 Short-term • Increased short-term debt for debt less Marketing and Oils Marketing and Oils inventories 132 inventories 26 43 • Flexible
Slide 18: Commodities inventory funded with specific commodity inventory facilities
Commodities inventory funded with specific commodity inventory facilities For personal use only Marketing and Oilseed funding Commodities inventory(1) – $M strategy Commodities inventory • Marketing’s grain trading activities and Short-term debt 572 577 Oil’s oilseed and tallow positions are 528 519
Slide 19: Capex supporting safety, network efficiencies and strategic initiatives
Capex supporting safety, network efficiencies and strategic initiatives For personal use only Capex – $M Depreciation & Amortisation – $M Stay-in-business Depreciation 91 Growth 122 Amortisation 112 78 18 106 72 17 63 16 63 56 53 42 10 61 2 27 73 32 61 3 56 59 46 53 49 40 29 34 FY09 FY10 FY11 FY12 H
Slide 20: Outlook
For personal use only Outlook
Slide 21: FY13 Outlook
FY13 Outlook For personal use only Grains Processing S&L – Country & Logistics Oils – Crushing & Refining • Country receivals(1): 10.0mmt – 10.5mmt • Oil sales: ~0.53mmt • Domestic outload: ~6.0mmt Oils – Bulk Liquid Terminals • Carry-out: ~2.0mmt • Continued high average capacity utilisation S&L –
Slide 22: Strategy Update
For personal use only Strategy Update
Slide 23: Earnings growth initiatives targeting ~$110M EBITDA by FY16
Earnings growth initiatives targeting ~$110M EBITDA by FY16 For personal use only Gamechangers Asset Optimisation Port Flexibility Oils Synergies & Storage & Logistics 3 Year Port Protocol Optimisation Port Terminals Growth Marketing Industry Code & Efficiencies Continuous Malt Improvement ~$45M EBI
Slide 24: Earnings growth initiatives and capex requirements
Earnings growth initiatives and capex requirements For personal use only Incremental underlying EBITDA and Capex ($M) from FY13 20 110 20 Oils 25 Malt 14 45 Marketing(2) 12 20 Storage & Logistics Growth ~25 ~15 ~30 ~70(1) ~115 ~65 - ~250(1) capex Asset Port Gamechangers(1) Total Optimisation Flexibi
Slide 25: Gamechangers
Gamechangers For personal use only Storage & Logistics Marketing Malt Improved customer service • Global trading and risk • Port of Vancouver project • Invested in 24 new mobile grain management platform on completed with new track for deployment in 2013 speciality capacity on line in handling stack
Slide 26: Asset Optimisation & Port Flexibility
Asset Optimisation & Port Flexibility For personal use only Oils Ports & Country Port Flexibility Capture Synergies Bulk liquid terminals 3 Year Port Protocol • Integration on track to deliver opportunities • New port protocol for bulk $7M in synergies p.a. • Imported fuels opportunity at export gra
Slide 27: Recommended Offer
For personal use only Recommended Offer
Slide 28: Recommended offer
Recommended offer For personal use only Recommended Offer Value and Premium Conditional Agreement & Due Diligence Total value to shareholders of $13.20 comprising: • In April 2013 GrainCorp entered into a conditional agreement with ADM under which • $12.20 per share in cash ADM would make a takeover
Slide 29: Questions
For personal use only Questions
Slide 30: Appendix
For personal use only Appendix
Slide 31: Significant items
Significant items For personal use only Net $M Segment EBITDA D&A Tax NPAT Details Interest Underlying 227 (20) (56) (43) 109 GrainCorp Oils Corporate (12.9) - - 1.3 (11.6) Stamp duty of $9.0 million and acquisition and advisory and integration costs of integration costs $2.6 million in relation to
Slide 32: Grain volumes
Grain volumes For personal use only Volume driver (mmt) HY13 HY12 Comments Grain carry-in (1-Oct) 4.3 6.0 • Grain stored at start of period • HY13 carry-in above average of 3mmt • Higher HY12 carry-in due to larger FY11 crop Country network receivals 9.7 11.6 • ~56% share of winter crop production(1
Slide 33: GrainCorp Oils key drivers
GrainCorp Oils key drivers For personal use only Crushing Refining • Capacity utilisation • Capacity utilisation • Gross margin (oil seed cost) • Gross margin (oil cost) • Crush process cost • Refining process cost • Product mix Combined sales volumes (crude oil, meal, refined products) Pacific Term
Slide 34: GrainCorp is Australia's leading agribusiness
GrainCorp is Australia’s leading agribusiness For personal use only Integrated Business Model with an international “end-to-end” grain supply chain connecting consumers to growers Unique portfolio of local storage and logistics assets and local and international downstream processing assets