Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — Shareholder Meeting (February 2012)
22 slides from Graincorp Limited Class A's shareholder meeting presentation, Feb 16, 2012
Slide 1: Managing Director's Presentation AGM – 2011 Financial Year
16 February 2012 M Alison Ms Ali W tki Watkins (Managing Director and CEO) MANAGING DIRECTOR’S PRESENTATION AGM – 2011 FINANCIAL YEAR
Slide 2: FY11 Business Report
FY11 BUSINESS REPORT
Slide 3: Higher earnings due to crop size and performance
Higher earnings due to crop size and performance 400 FY10‐FY11 EBITDA Bridge – $M • FY11 earnings significantly higher 350 40 19 1 8 • $350M EBITDA (up 65%) 300 86 • $172M NPAT (up 114%) 250 40 • Driven by higher earnings from 200 150 350 grain storage, handling and 100 212 marketing activities 50 0
Slide 4: Focus on improving Return on Equity
Focus on improving Return on Equity NPAT ($M) and ROE (%) • Strong focus on improving Return 180 15% on Equity (ROE) through the cycle 150 12% • Strategic initiatives underway to 120 9% i increase underlying d l i earnings i 90 172 6% • Rolling 3 year average ROE higher 60 3% to 10.2% 80 30 63 (0%)
Slide 5: Low debt and strong cash flow
Low debt and strong cash flow Net(1)/Core(2) Debt and Grain Marketing Inventory – $M Operating Cash Flow and Capex – $M 500 Net debt Grain Marketing inventory Core debt 350 Operating Cash Flow Capex 300 400 250 300 200 445 200 150 305 337 331 322 289 213 233 239 100 100 188 156 122 104 32 85 50 109
Slide 6: Higher dividends including Special
Higher dividends including Special Dividend and Earnings Per Share ($) 08 0.8 10 1.0 • Total FY11 fully franked dividends of 0.6 0.8 $0.55, including $0.25 special 0.20 • Full year dividends represent 64% of 0.4 0.5 0.05 FY11 NPAT 0.05 0.2 0.10 0.15 0.3 • Policy to pay 40‐60% of NPAT through 0.10 0.
Slide 7: Country & Logistics – higher volumes and earnings
Country & Logistics – higher volumes and earnings $M FY11 FY10 • Higher receivals • 13.9mmt winter Revenue 523 340 • 1.0mmt summer EBITDA 74 34 EBIT 44 10 • Strong operational performance • Higher receivals share and grain Capital Expenditure 38 27 throughput g p • Effective customer focus and Grain
Slide 8: Ports – higher elevations and earnings
Ports – higher elevations and earnings $M FY11 FY10 • Higher port activity • 8.1mmt grain exports (7.7mmt Revenue 220 104 bulk and 0.4mmt containers) EBITDA 137 52 • 1.5mmt 1 5mmt non non‐grain grain exports EBIT 123 38 • 0.3mmt non‐grain imports Capital Expenditure 13 15 • Strongg operational p p p
Slide 9: Marketing – higher volumes and earnings
Marketing – higher volumes and earnings $M FY11 FY10 • Increased earnings Revenue 1,406 924 • Higher delivered sales volumes including exports of 2.7mmt EBITDA 72 32 • Ability to create and capture value Interest expense (25) (12) by leveraging GrainCorp’s PBT 47 20 integrated supply chain Marketing
Slide 10: Malt – sound performance in a challenging market
Malt – sound performance in a challenging market 1.15 Malt Sales Volume(3) – mmt $M FY11 FY10(1) Revenue 868 796 1.10 EBITDA(2) 99 119 1.05 EBIT 68 89 1.00 1.09 1.06 1.07 1.05 Capital Expenditure 66 54 0.95 1.03 0.90 CY07 CY08 LTM Jun‐09 LTM FY10 FY11 • Lower L earnings i due d to t cyclical li l ma
Slide 11: Allied Mills – earnings maintained
Allied Mills – earnings maintained $ M (60% JV share) FY11 FY10 • Earnings maintained in a competitive environment EBITDA 26 27 • Toowoomba mill closed due to Equity Profit 8 9 flooding Shareholder loan interest • All customer orders met due to 1.4 1.2 received business flexibility and national Net
Slide 12: Safety – targeting a zero harm work environment
Safety – targeting a zero harm work environment Health & Safety – injury frequency rates • Challenging Country & Logistics 80 All Injury Frequency Rate Lost Time Injury Frequency Rate safety environment 70 60 61.2 • 3,000 harvest casual employees 52.2 50 • Large and disrupted harvest 39.6 40.4 40 36
Slide 13: FY12 Update and Guidance
FY12 UPDATE AND GUIDANCE
Slide 14: FY12 operational update
FY12 operational update Country & Logistics • Record 6.0mmt carry‐in → benefit FY12 storage and handling fees • Year‐To‐Date receivals 10.9mmt → maintained ~60% share despite softer grain prices ~5 0mmt(1) carry‐out • ~5.0mmt carry out expected → benefit FY13 storage and handling fees • Improved wea
Slide 15: FY12 operational update (continued)
FY12 operational update (continued) Malt • Subdued demand and excess capacity expected to continue in developed markets • Committed YTD sales 1.25mmt → ~95% of FY12 sales guidance and strong capacity utilisation of >90% • Benefits emerging from: • Integrated global portfolio, strong export sales pro
Slide 16: FY12 volume and earnings guidance
FY12 volume and earnings guidance Volume / Earnings Guidance Guidance Variables and Assumptions Country grain receivals • Ex‐farm post harvest receivals upcountry • 11.5‐12.5mmt and at port Storage & Port grain elevations • Sorghum receivals commence in March Logistics • 8.8‐9.8mmt • Rail and road f
Slide 17: Strategy Update
STRATEGY UPDATE
Slide 18: Five themes underpin strategy
Five themes underpin strategy 1. Improve ROE 2. Manage Variability 3. Grow the Business Corporate Objectives 11. Maintain a strong market presence → leading grain supply chain service c Themess 22. Operate along the grain chain → “end to end” supplier 33. Increase participation in grain processing →
Slide 19: Strategy leverages and builds on existing capability
Strategy leverages and builds on existing capability Leverage and build on GrainCorp’s existing competitive position... • End to end business → capabilities and infrastructure along the grain chain • International presence → 50% of grain sales and 90% of malt sales outside of Australia Platform to g
Slide 20: FY12 strategic focus
FY12 strategic focus 1 • Handle large carry‐in and FY12 harvest Maintain M i i a • Create a strong market place for buyers and sellers strong market • Improve rail and road freight productivity presence • Expand non‐grain non grain port activity, activity and container packing activity 2 • Strong do
Slide 21: FY12 strategic focus (continued)
FY12 strategic focus (continued) 3b Increase Allied Mills participation • Grow value add activity through pursuit of opportunities in other in grain flour products processing • Decide on reinstating lost Toowoomba milling capacity 4 Grow as an • Maintain strong offshore malt and grain sales internat
Slide 22: 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