Slide 1: ASX cover letter: Investor Presentation FY ended 30 September 2015
12 November 2015 The Manager For personal use only Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 GRAINCORP LIMITED: GNC INVESTOR PRESENTATION FINANCIAL YEAR ENDED 30 SEPTEMBER 2015 Please find attached the Investor Presentation relating to the financial year ended 30 Sept
Slide 2: FY15 Results
FY15 Results 12 November 2015 For personal use only
Slide 3: 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 4: Agenda
For personal use only Agenda • Results Overview • Segment Performance • Balance Sheet & Capex • Strategic Initiatives • FY16 Outlook • Questions 3
Slide 5: Commitment to values driving positive outcomes
Commitment to values driving positive outcomes For personal use only Values LTIFR(1) AIFR(2) 12.0 38.8 36.1 10.7 7.0 21.6 13.9 3.8 FY12 FY13 FY14 FY15 FY12 FY13 FY14 FY15 Safety People • 46% reduction in Lost Time Injury • Leadership development programs Frequency Rate(1) and capability development
Slide 6: Earnings from Malt and Oils support challenging period for grains businesses
Earnings from Malt and Oils support challenging period for grains businesses For personal use only • Underlying earnings: $235M EBITDA(1) and $45M NPAT(2). EBITDA by segment4 $M FY09 • Statutory NPAT: $32M after significant items(3). Allied • Dividend: fully franked FY15 final dividend of 2.5 cents
Slide 7: Earnings profile reinforces the importance of diversification
Earnings profile reinforces the importance of diversification For personal use only EBITDA(1) $M NPAT(1) $M Malt Oils Allied Marketing S&L Fiscal 1H 414 395 Fiscal 2H 205 350 172 175 293 235 83 212 66 84 95 160 80 63 34 45 27 122 31 109 10 88 53 61 32 35 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY09 FY10
Slide 8: Dividend in line with policy
Dividend in line with policy For personal use only Dividends per share (1) Ordinary DPS Special DPS(1) 65.0 55.0 45.0 30.0 20.0 7.3 10.0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 7yr avg3 Payout 23% 74% 64% 68% 59% 48% 51% 58% ratio(2) FY15 Dividend Dates • FY15 final dividend: fully franked interim divide
Slide 9: Performed well in challenging year for grains businesses
Performed well in challenging year for grains businesses FY14 to FY15 Earnings Bridge(1) $M For personal use only Food volumes 15 stabilising, lower margins due 29 Strategic to sales mix; initiatives crushing benefits, volumes favourable FX higher Lower volumes, offset by improved cost 38 management
Slide 10: Segment Performance
For personal use only Segment Performance
Slide 11: Malt – another strong performance reflecting high capacity utilisation
Malt – another strong performance reflecting high capacity utilisation For personal use only • Sales of 1.25mmt; slightly lower than prior $M FY15 FY14 year Revenue 1,126 1,049 • Capacity utilisation above 90% and higher EBITDA(1) 140 125 than prior year given plant closure EBIT(1) 89 79 • Excellent
Slide 12: Oils – solid contribution with volumes stabilising but lower margins
Oils – solid contribution with volumes stabilising but lower margins For personal use only • Oilseeds: sales volumes of 0.34mmt(1); $M FY15 FY14 higher than prior year Revenue 933 937 • Foods: sales volumes of 0.21mmt(1); EBITDA 73 73 volumes stabilising; lower margins due to EBIT 44 47 sales mix bu
Slide 13: Storage & Logistics – performed well given smaller crop
Storage & Logistics – performed well given smaller crop For personal use only $M FY15 FY14 • Below-normal grain production resulting in lower volumes and lower earnings Revenue 390 444 • Carry-in: 1.9mmt (FY14: 2.3mmt) EBITDA 43 72 • Country receivals: 7.4mmt (FY14: EBIT (10) 23 8.0mmt); ~44% share
Slide 14: Marketing – challenging conditions
Marketing – challenging conditions For personal use only • Lower grain production in eastern Australia $M FY15 FY14 resulting in greater competition to originate Revenue 1,859 1,907 grain EBITDA (2) 36 • Alternative origination sources competing Interest expense(2) (14) (16) strongly with Australian
Slide 15: Allied Mills
Allied Mills For personal use only $M (60%) JV Share(1) FY15 FY14 • Strategy focussed on value add product initiatives EBITDA 25 27 Equity profit(1) 9 10 • Tullamarine expansion of frozen Shareholder loan interest bakery products completed 1 1 received Net Asset Value(2) 168 180 • Awarded prestigiou
Slide 16: Balance Sheet & Capex
For personal use only Capex Balance Sheet &
Slide 17: Strong and flexible balance sheet
Strong and flexible balance sheet For personal use only Core Debt(1) $M Long term debt • Core debt increasing as expected and Short-term debt less marketing and oils Short-term debt less in line with implementation of Cash 141 Marketing 134 and Oils strategic initiatives inventories 26 79 71 89 • De
Slide 18: Core Debt & Net Debt
Core Debt & Net Debt For personal use only Core Debt(1) and Net Debt(2) 1,400 50% • FY15 core debt at $556M and Net Debt $744M 1,200 40% • Core debt gearing(3) at ~23% 1,000 and Net debt gearing(3) at 30% 800 ~37% (rolling quarterly average) 600 20% • Net debt gearing expected to 400 peak in 1H17
Slide 19: Commodities inventory funded with specific commodity inventory facilities
Commodities inventory funded with specific commodity inventory facilities For personal use only Commodities inventory(1) $M Supplemented short Marketing & Oils grain and oilseed inventory term debt with cash Short-term debt 829 792 Supplemented short 708 term debt with cash 572 577 574 528 519 498 3
Slide 20: Capex supporting safety, network efficiencies and strategic initiatives
Capex supporting safety, network efficiencies and strategic initiatives For personal use only Capex(1) $M Depreciation & Amortisation $M Depreciation Amortisation Stay-in-business Growth 236 136 127 119 34 167 30 24 91 141 168 122 78 112 72 18 106 96 16 17 71 53 63 63 97 103 95 73 56 61 70 71 68 53
Slide 21: Strategic Initiatives Update
For personal use only Strategic Initiatives Update
Slide 22: Capital investment for growth in more reliable earnings
Capital investment for growth in more reliable earnings For personal use only Storage & Logistics Marketing Malt Oils Invested (1) Underway (2) Balance (3) 140 Over next ~3+ years ~$224M(2) 83 94 underway 47 26 - 24 13 47 15 15 First tranche announced 171 ~$270M May 2015 invested(1) Capital investme
Slide 23: Strategic initiatives – FY15 highlights
Strategic initiatives – FY15 highlights For personal use only Malt Oils • Pocatello expansion: expansion of malt plant in • Numurkah expansion: expansion of plant Pocatello underway backed by support from a announced and underway customer demand from number of existing customer contracts and inc
Slide 24: FY16 Outlook
For personal use only FY16 Outlook
Slide 25: FY16 Grains outlook – another year of lower grain production in eastern Australia
FY16 Grains outlook – another year of lower grain production in eastern Australia For personal use only Market fundamentals GrainCorp FY16 outlook • Eastern Australian winter crop production estimate • Carry-in of 1.6mmt lower than recent years of 16.1mmt(1) • Expecting receivals and grain exports a
Slide 26: FY16 Processing outlook – incremental improvements in underlying businesses
FY16 Processing outlook – incremental improvements in underlying businesses For personal use only Market fundamentals GrainCorp FY16 outlook • Global barley crop production ~145mmt(1) • Forward sales of 1.2mmt YTD (FY15: 141mmt) • Malt sales volume: ~1.3mmt • Beer demand in mature markets continues
Slide 27: Questions
For personal use only Questions
Slide 28: Appendix
For personal use only Appendix
Slide 29: 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 FY15 FY14 FY15 FY14 Malt(2) 1,126 1,049 140 125 Oils 933 937 73 73 Storage & Logistics 390 444 43 72 Marketing 1,859 1,907 (2) 36 Allied Mills(3) - - 9 10 Corporate Costs - - (27) (23) Elimin
Slide 30: FY15 significant items
FY15 significant items For personal use only Net $M Segment EBITDA D&A Tax NPAT Details Interest Underlying 235.4 (136.3) (39.0) (15.6) 44.5 Restructuring costs S&L, Oils, (7.9) (4.2) 3.4 (8.7) Relating to Oils network Allied Mills optimisation, S&L Project Regeneration costs and Allied Mills. Impai
Slide 31: Grain volumes FY14 and FY15
Grain volumes FY14 and FY15 For personal use only Volume driver (mmt) FY14 FY15 Comments Grain carry-in (1 Oct) 2.3 1.9 • Grain stored at start of period • FY14 & FY15 carry-in below average of ~3mmt Country network 8.0 7.4 • ~44% share of production(1) receivals • Lower receivals due to lower grain
Slide 32: Strategic initiatives implementation and associated capex
Strategic initiatives implementation and associated capex For personal use only FY13 FY14 FY15 FY16 FY17 FY18 Business Project Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Unit 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Integration C apacity relocation Fremantle terminal expanison Oils Port
Slide 33: Eastern Australia competitive landscape
Eastern Australia competitive landscape For personal use only Upcountry Storage Upcountry Storage Capacity Competitors GrainCorp ~20mmt Competitors ~10mmt Ports On-farm ~10mmt GrainCorp Ports Total ~40mmt Competing Ports Competing Ports (under development) Production / Exports Eastern Australia grai
Slide 34: Upcoming events and activities
Upcoming events and activities For personal use only Date Event / Milestone Location Pullman Hotel, 18 Dec 15 FY15 AGM Sydney 33