Ricegrowers Ltd. Class B · ASX:SGLLV
Ricegrowers Ltd. Class B — Shareholder Meeting (August 2012)
31 slides from Ricegrowers Ltd. Class B's shareholder meeting presentation, Aug 24, 2012
Slide 1: Chief Executive Officer's Report
2012 SunRice Annual General Meeting Chief Executive Officer’s Report Rob Gordon 24 August 2012
Slide 2: Agenda
Agenda • Group highlights • Business performance • Debt, gearing and financial drivers • Opportunities and outlook 2
Slide 3: Australian rice industry recovery
Australian rice industry recovery • 963,000 tonnes harvested for C12 • 1,500 farms produced rice • 11,427 truck movements in one week
Slide 4: Rapid reactivation of operations footprint
Rapid reactivation of operations footprint • Substantial investment in the reactivation of Deniliquin Mill and global supply chain • Coleambally Mill re- opened temporarily in 11/12 • 200 staff employed
Slide 5: Returning to the world
Returning to the world • 8,000 tonnes sent to port weekly • Close to 400,000 tonnes of milled rice exported • One of the top five container exporters through Port of Melbourne
Slide 6: Excellent export sales in 2011/12
Excellent export sales in 2011/12 64% • Strategic need to reclaim 38% key markets lost during the drought in the face of fierce competition and an oncoming large crop in 2012 • Broad success achieved in the Middle East and Pacific
Slide 7: Australian rice milling and marketing
Australian rice milling and marketing • Sales revenue of $321 million, up 235% • Contributed NPBT of $16 million • Export markets re- established • Strong domestic table rice sales • Retail, foodservice and food ingredients supplied with Australian rice
Slide 8: Specialty Rice Foods
Specialty Rice Foods • A strong year of innovation underpinned SunRice's leading market shares in the microwave rice, ready- to-go meals and rice cakes categories
Slide 9: Global business
Global business • Sales revenue of $350 million, down 7% • Contributed NPBT of $13.3 million • Reduction in SunFoods volumes due to increased processing in Australia • Recovered market share in PNG to 77% • SolRice achieved an 84% sales volume increase
Slide 10: Riviana Foods
Riviana Foods • Sales revenue of $146 million, up 2% • Contributed NPBT of $9.6 million • Record revenue and earnings in Foodservice division • Always Fresh maintained market leadership
Slide 11: CopRice
CopRice • Sales revenue of $98 million, up 28% • Contributed NPBT of $8.6 million • Significant growth with improved dairy and livestock conditions • New trading partners secured
Slide 12: Group revenue
Group revenue Revenue $m 85 98 321 146 350 Australian rice Global Riviana CopRice Other 12
Slide 13: Contributed net profit before tax
Contributed net profit before tax Contributed NPBT $m 4.4 8.7 16 9.6 13 Australian rice Global Riviana CopRice Other 13
Slide 14: Group revenue and profit
Group revenue and profit Revenue (millions) Net Profit After Tax (millions) $1,000 $902 $817 $809 $77 $34 $12 $13 C08 C09 C10 C12 C08 C09 C10 C11 14
Slide 15: Group profit after tax ($m)
Group profit after tax ($m) AU Rice Global, Specialty and Subs $77 $76 $13 $34 $12 $23 $28 $31 $11 $1 ($16) ($18) C08 C09 C10 C11 AU Rice = Rice Milling and Marketing Australian Rice Global, Speciality and Subs = Rice Milling and Marketing Global, Riviana, CopRice and other segments 15
Slide 16: Paddy price
Paddy price • Medium grain paddy return of $255 per tonne • $210 million paid out to growers
Slide 17: Dividend
Dividend • Fully franked dividend of 18 cents per B Class Share • 7.2% dividend yield to investors • Earnings per share of 57.3 cents • $10 million paid out to shareholders
Slide 18: Debt and gearing
Debt and gearing • Final gearing position for 2011/12 was 66% • Total debt at year end was $193 million • Improvements in equity value of $27 million • Reductions in debt of $79 million
Slide 19: The importance of gearing
The importance of gearing • Gearing is the ratio of debt to equity (or funded debt vs. shareholder investment) • It’s the amount of “headroom” a company has to make investments, weather financial shocks and adapt to new market conditions • Higher gearing suggests less capacity in a business to handl
Slide 20: SunRice debt evolution
SunRice debt evolution Consolidated Group Debt Evolution: 2005-2012 450 $382m $376m 400 28 $342m 350 31 $308m $308m 31 300 - $272m 114 36 135 86 250 124 36 $202m - 99 $193m 200 - 59 84 99 77 44 150 87 36 88 7 30 - 43 19 - 100 98 68 163 28 114 130 121 50 98 19 71 - 47 32 - 2005 2006 2007 2008 2009 20
Slide 21: Major contributors to gearing improvement
21 % 30 Apr 11 102 10 Movement in Equity Net 14 Debtors/Creditors Paddy/Grower 9 Creditors 8 Raw Material / FP 2 Capex v Depreciation Gearing improvement (%) 12 Profit 3 Dividend 1 DRP/Capital Raised Major Contributors Gearing Improvement % 1 Other 66 30 Apr 12
Slide 22: Gearing fluctuation
Gearing fluctuation Jan 2011 to April 2012 fluctuations in gearing 140% 120% 100% 80% FY 2011 Ave 74% 60% 40% Peer Median 30% 20% 0% May-11 Apr-11 Apr-12 Feb-11 Mar-11 Jul-11 Oct-11 Feb-12 Mar-12 Aug-11 Sep-11 Nov-11 Dec-11 Jun-11 Jan-11 Jan-12 C11 Actual C11 Ave Peer Median 22
Slide 23: Comparable companies
Comparable companies 140% Apr 10 120% 118% Apr 11 100% 102% 80% 2008 Median (57%) Apr 12 60% 66% 40% 2011 Median (30%) 20% 102% 24% 65% 68% 49% 35% 43% 21% 0% 2008 2011 23
Slide 24: Brand reinvestment
Brand reinvestment • Brand reinvestment will grow the category and drive consumption • Next generation of SunRice advertising is currently being 24 developed
Slide 25: Innovation
Innovation • Three early consumer trends have been identified – health and wellbeing; exotic and adventurous; and convenience • SunRice is well placed to build on these trends via innovation
Slide 26: Capital reinvestment
Capital reinvestment 35,000 1,800 Ricegrowers Limited 1,600 30,000 1,400 25,000 1,200 20,000 1,000 Capital Spend / Crop Size Depreciation (thousand ($ thousands) tonnes) • CapEx prudently at 40 – 800 15,000 50% of depreciation for a 600 10,000 decade Depreciation double capital spend 400 • Reinvestm
Slide 27: Opportunities
Opportunities • Operations • Brands • Innovation
Slide 28: Global outlook for rice
Global outlook for rice • Medium grain prices have generally been firming over the long term in USD, but the strong AUD has washed away most of the benefit • In the short term there will always be periods of price volatility • Emergence of new Japonica exporters, however they are still niche • Large
Slide 29: Effect of crop size on paddy price
Effect of crop size on paddy price Premium consumer markets & products High Sales Price Mid contribution $/t markets Lower value Medium commodity markets Paddy Price Paddy Price Low 0 Small Medium Large Very Large Crop Size Ideal crop size < 1 million tonnes Incremental volumes sold into lower contr
Slide 30: Business outlook
Business outlook • Good start to the current crop year • Strong trading experienced in Q1 • Prices are holding currently • Second half expected to be more challenging 30
Slide 31: Conclusion
Conclusion 31
Ricegrowers Limited (SunRice) — Shareholder Meeting (August 2012) on 6ix