Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — HY2003 Earnings Presentation
17 slides from Graincorp Limited Class A's earnings presentation, May 2003
Slide 1: Half Year Results 2003
Half Year Results 2003 May 2003 Tom Keene, Managing Director 1
Slide 2: GrainCorp - What We Do
GrainCorp - What We Do GrainCorp Storage Grain Marketing Merchandising Transport Primary & handling Logistics Processing Receive Buy & Sell Buy & Sell Road Milling Store Manage Pools Seed Rail Wheat, maize Move Logistics Chemicals Logistics soya & rice Export Export Fertiliser GrainCorp Half Year Re
Slide 3: Business - Key Assets
Business - Key Assets • 18 million tonnes of permanent and bunker storage capacity with a replacement value exceeding $2 billion • Nearly $300 million invested in modernising facilities since 1996 • 4 seaboard terminals in NSW and Victoria - Newcastle, Port Kembla, Geelong and Portland plus access t
Slide 4: Half Year 2003 Result Highlights
Half Year 2003 Result Highlights • 1.8 million tonnes of receivals, down 84% • 0.9 million tonnes of exports, down 76% • Revenue $304.7 million, down 20% • $42.2 million EBITDA, down 46% • $9.8 million after tax profit, down 74% • Earnings per share of 24 cents, down 74% • No dividend declared • Cos
Slide 5: EBITDA, PAT & Receivals
EBITDA, PAT & Receivals 14 .0 12 0 Tonnes (Millions) 12 .0 10 0 10 .0 $ millions 80 8 .0 HY03 60 6 .0 40 4 .0 20 2 .0 0 - 19 9 9 2000 2001 2002 Forecast full year loss EB ITDA PAT Receivals GrainCorp Half Year Results, May 2003 •Despite the effects of the drought, this graph demonstrates the consist
Slide 6: Revenue
Revenue Other 700 Marketing 600 Storage & Handling 500 $ millions 400 300 200 100 0 1999 2000 2001 2002 HY03 GrainCorp Half Year Results, May 2003 •Marketing this half year accounts for over 62% of revenue at $190 million. •Marketing is a high turnover, low margin activity designed primarily to comp
Slide 7: Earnings Per Share
Earnings Per Share 180 160 140 cents per share 120 100 Half Year Full Year 80 60 40 20 0 1999 2000 2001 2002 2003 GrainCorp Half Year Results, May 2003 •Earnings were 24 cents per share. •We have consistently achieved strong returns. •Long term maintainable EPS performance reflects the underlying st
Slide 8: Cash-flow Performance
Cash-flow Performance $Million Net cash-flow from operating activities 76 Sale of AWB shares 32 108 Investment in Allied Mills 71 Loans to associates 52 Capital expenditure (HY02 $31 million) 7 Financing 7 Final Dividend 01/02 18 Income tax paid 5 160 Increase in net borrowing 52 GrainCorp Half Year
Slide 9: Assets, Debt & Equity
Assets, Debt & Equity 70 0 .0 6 0 0 .0 $ m illions 50 0 .0 4 0 0 .0 3 0 0 .0 2 0 0 .0 10 0 .0 0 .0 19 9 9 2000 2001 2002 HY 0 3 Total Assets Shareholders Equity Total Debt GrainCorp Half Year Results, May 2003 •Consistent growth in total assets and shareholder equity •Increased assets reflect capita
Slide 10: Gross Return on Assets & Equity
Gross Return on Assets & Equity 50 45 40 35 30 GROA Half Year percent 25 GROA Full Year 20 GROE Half Year 15 GROE Full Year 10 5 0 1999 2000 2001 2002 2003 GrainCorp Half Year Results, May 2003 Despite the volatility inherent to agribusinesses GrainCorp has delivered: •Gross return on assets consist
Slide 11: Allied Mills
Allied Mills • Strong and effective working relationship with our joint venture partner Cargill Australia • Successful integration with broader operations • Quality assets - exceeded due diligence projections • Contribution of Allied Mills has been EPS positive after inclusion of one off integration
Slide 12: Allied Mills
Allied Mills • Challenging first six months due to drought • Focus on customer relationships – Burns Philp - long term supply agreement – Commercial customers retained • Implementing strategies to optimise product mixes and supply chain efficiencies GrainCorp Half Year Results, May 2003 12
Slide 13: Forecast - The Environment
Forecast - The Environment • Total grain receivals forecast 1.9 million tonnes • Costs are being managed • Capital expenditure projected to be $10 million for 2003, down from $40 million in 2002 • Unknown variables include – Final planting for 2003/04 harvest - currently 70% with variable sowing con
Slide 14: Forecast - Performance
Forecast - Performance • Forecast loss after tax of $19-20 million for 12 months to 30 September 2003 • GrainCorp will remain operating cash-flow positive • Export out-loading forecast 1.0 - 1.2 million tonnes • Domestic out-loading forecast 4.4 - 4.6 million tonnes • Carry over forecast 0.6 million
Slide 15: Grainco - Merger Discussions
Grainco - Merger Discussions • GrainCorp and Grainco announced the commencement of merger discussion on 5 February 2003 • Opportunity to merge makes strategic and commercial sense for both companies - builds on existing partnerships • Due diligence process complete • ACCC have expressed no objection
Slide 16: Strategic Direction
Strategic Direction • Core business in storage & related activities • Shift in focus from agri-business to agri-food business • Emphasis on improving value for both shareholders & clients • Competitive advantage by creating value in linkages between these related businesses Merchandising Grain Stora
Slide 17: Questions
Questions 17