Slide 1: GrainCorp Year End 30 September 2010 Results Presentation
Company announcement For personal use only GrainCorp Limited ABN 60 057 186 035 Date: Thursday, 25 November 2010 To: The Manager Announcements Company announcements office PUBLIC ANNOUNCEMENT GRAINCORP YEAR END 30 SEPTEMBER 2010 Results Presentation Betty Ivanoff General Counsel and Company Secretar
Slide 2: GrainCorp Full Year 2010 Results
For personal use only 25 November 2010 Alison Watkins, Managing Director and Chief Executive Officer G GRAINCORP CO FULL YEAR 2010 RESULTS S S 25/11/2010 1
Slide 3: Agenda
Agenda ge da For personal use only • Financial Results • Business Unit Performance • Business Structure • Strategic Initiatives Update and Dividend • 2011 Outlook 25/11/2010 2
Slide 4: Malt diversification underpins sound result
Malt atd diversification e s cat o underpins u de p s sou sound d result esu t For personal use only → EBITDA above guidance at $212 M Includes ~$10 M one‐off Malt and transaction adjustments → NPAT of $80 M at lower end of guidance Includes additional D&A of Malt assets → Eastern Australian 200
Slide 5: Financial Results
For personal use only FINANCIAL RESULTS 25/11/2010 4
Slide 6: Diversification and stability
Diversification and stabilityy For personal use only EBITDA ‐ $ M 90 NPAT ($ M) and ROE (%) 21% 240 Other Malt 210 60 14% 180 150 118.7 80.2 30 63.2 7% 120 90 31.7 161.1 60 120.9 0 0% 92.9 ‐19.8 ‐19.9 30 51.3 31.9 0 (30) ‐7% FY06 FY07 FY08 FY09 FY10 FY06 FY07 FY08 FY09 FY10 250 OPERATING CASH FLOW ‐
Slide 7: Diversification drives NPAT growth
Diversification e s cat o d drives es NPAT ggrowth o t For personal use only Inclusion of Diversification Malt 125 drives earnings 3 $M 0.4 100 Country receivals 29 down 2.2mmt 9 16 75 20 Lower external inventory finance 57 119 Merchandise 50 closed Grain exports down 1.7mmt 80 63 25 27 0 7 (25) 200
Slide 8: Low core debt and strong cash flow
Low core debt and strongg cash flow For personal use only • Operating p g cash flow strongg at $109 M → lower yyear on yyear due to higher FY2010 year end grain inventory held g g Stayy in Business capex • Ongoing p $ $40‐55 M → below FY2010 annualised depreciation and amortisation of $76 M • Total
Slide 9: Debt levels low, trading inventory higher
Debt ebt levels e e s low, o , ttrading ad g inventory e to y higher g e For personal use only • Current debt facilities for grain 650 Debt and Grain Trading Inventory ‐ $ M trading adjusted to match 600 trading requirements 550 500 • Up to $550 $ M off current d debt b 450 available for grain tradi
Slide 10: Depreciation and amortisation higher due to Malt
Depreciation p and amortisation higher g due to Malt For personal use only Business Unit FY10 Annualised FY10 FY09 $M Depr. Amort. Depr. Amort. Depr. Amort. Malt1 18 17 16 14 ‐ ‐ Storage and Logistics 22 2 22 2 20 2 Ports 13 ‐ 13 ‐ 14 ‐ Trading and Corporate 4 ‐ 4 ‐ 6 ‐ Total 57 19 55 16 40 2 • Malt
Slide 11: Stay in Business capex in line with depreciation
Stay in Business us ess cape capex in linee with t dep depreciation ec at o For personal use only • FY2010 Stay in Business capex Capital Expenditure ‐ $ M of $53 M 120 Grain Stay in Business Grain Investment Malt Stay in Business Malt Investment • In line with FY2010 100 depreciation of $55 M 80 42
Slide 12: Business Unit Performance
For personal use only BUSINESS UNIT PERFORMANCE 25/11/2010 11
Slide 13: Safety - strong focus
Safety Sa ety a st strong o g focus ocus For personal use only Medical AIFR1 Lost Time TOTAL – Treatment Injuries (LTI) All Injuries FY10 FY09 Injuries (MTI) Malt 27 15 42 35.1 ‐ Storage and Logistics 75 29 105 17.3 39.3 Total 102 44 147 20.3 39.3 • 2 major incidents in FY2010 including a fatality a
Slide 14: Performance reflects diversified earnings
Performance e o a ce reflects e ects diversified d e s ed ea earnings gs For personal use only Business us ess Unit U t FY10 0 FY09 09 FY10 0 FY09 09 $M Revenue Revenue EBITDA EBITDA Malt 796 ‐ 119 ‐ Storage and Logistics 340 409 34 91 Ports 104 130 52 78 Trading 924 1,346 32 39 Allied Mills1 ‐ ‐ 9
Slide 15: Malt - in line with expectation
Malt1 ‐ in line with expectation p For personal use only Malt Sales Volume ‐ mmt $M FY10 FY09 1.0 Revenue 796 ‐ 0.8 0.6 EBITDA 119 ‐ 0.9 0.9 0.4 EBIT 90 ‐ 0.2 Capex 54 ‐ 0.0 FY09 FY10 • Underlying volume and margins in line with business case and guidance – Includes $8.7 M compensation payment from
Slide 16: Storage and Logistics - below normalised crop size
Storage g and Logistics g ‐ below normalised crop p size For personal use only Country Network Grain Receivals and $M FY10 FY09 Eastern Australian Production1 ‐ mmt Grain carry‐in (mmt) 2.9 2.2 12.0 20.0 Grain carry‐out (mmt) 2.6 2.9 10.0 16.0 8.0 Domestic out load (mmt) 5.2 4.9 12.0 6.0 Revenue 340
Slide 17: Ports - grain export volumes lower
Ports ‐ ggrain export p volumes lower For personal use only Grain Exports Handled1 ‐ mmt $M FY10 FY09 6.0 5.0 Total exports (mmt) 4.9 6.5 4.0 Revenue 104 130 30 3.0 5.3 5.2 EBITDA 52 78 2.0 3.5 1.0 EBIT 38 64 1.0 1.0 0.0 FY06 FY07 FY08 FY09 FY10 Capex 15 7 Non Grain Exports Handled ‐ mmt 2.5 • Grain
Slide 18: Trading - improved market share
Tradingg ‐ improved p market share For personal use only Tonnes Traded ‐ mmt $M FY10 FY09 5.0 Revenue 924 1,346 4.0 EBITDA 32 3 39 30 3.0 PBT 20 26 2.0 3.6 3.1 3.1 3.3 2.3 Tradingg inventoryy held 188 85 1.0 0.0 Tonnes Traded (mmt) 3.3 3.6 FY06 FY07 FY08 FY09 FY10 • Revenue lower due to decrease in
Slide 19: Allied Mills - retail and food service innovation
Allied Mills ‐ retail and food service innovation For personal use only EBITDA ‐ $ M $M FY10 FY09 60.0 EBITDA 45 48 50.0 Equity Profit 40 0 40.0 9 10 (60% Joint Venture Share) 30.0 51.8 47.5 45.4 Net Asset Value 227 211 20.0 42.8 29 6 29.6 Capex 10 11 10.0 0.0 FY06 FY07 FY08 FY09 FY10 • Retail sales
Slide 20: Business Structure
For personal use only BUSINESS STRUCTURE 25/11/2010 19
Slide 21: New team, clear accountabilities
New e tea team,, cclear ea accountabilities accou tab t es For personal use only • New leadership p includingg appointments pp of GrainCorp p CFO, GrainCorp p Malt CEO, GM Storage and Logistics, GM Corporate Services and President Canada Malting Company Alison Watkins Chief Executive Officer Nigel H
Slide 22: Executive remuneration review
Executive ecut e remuneration e u e at o review e e For personal use only • Review of executive remuneration framework and in particular long term incentives • Committed to linking company executive incentive framework to longer term performance criteria Design g Proposals p Rationale 1. Introduce L
Slide 23: Strategic Focus and Dividend
For personal use only STRATEGIC FOCUS AND DIVIDEND 25/11/2010 22
Slide 24: Strategic response in 2011
Strategic response in 2011 For personal use only Australia’s largest g ASX agribusiness g operating p g in a changing g g environment... Efficient use of shareholder funds and debt 1 Effi 1. Efficient i t capital it l structure t t t fund to f d graini iinventory, t manage variability i bilit and gr
Slide 25: Final and Special Dividend
Final and Special Dividend For personal use only • The Board has approved a fully franked final dividend of $0.10 $ per share plus a fully franked special dividend of $0.05 per share • Record R dddate off 7 D December b 2010 2010, payable bl on 21 D December b 2010 • Combined with the fully franked
Slide 26: 2011 Outlook
For personal use only 2011 O OUTLOOK OO 25/11/2010 25
Slide 27: FY2011 Outlook and Drivers - Grain
FY2011 Outlook and Drivers ‐ Grain For personal use only Outlook • ACF1 predicts di ~22mmt 22 • Harvest late by 4 weeks • Continued uncertaintyy on ggrain volume,, P&L Impact grain quality and harvest timing • Storage revenue reduced • Locusts ‐ minimal effect on total crop • Grain quality effects:
Slide 28: FY2011 Outlook and Drivers - Malt
FY2011 Outlook and Drivers ‐ Malt For personal use only Outlook • Beer demand softening in mature markets • International barley crop 17%1 lower P&L Impact • GrainCorp Malt plants have sound competitive positions • Margin pressure • Reduced competitiveness of export Dri ers Drivers sales from Austra
Slide 29: Thank You, Q&A
For personal use only THANK YOU Q&A 25/11/2010 28
Slide 30: Appendix - Balance Sheet
Appendix ‐ Balance Sheet For personal use only $M FY10 FY09 • Grain inventory higher at Cash 92 161 $279 M including: Grain inventory 279 85 – Grain trading $188 M Trade Debtors & other inventories 323 171 – Malting barley $91 M Other current assets 82 53 Fixed assets 754 414 • Core debt higher due
Slide 31: Appendix - Malt business highlights
Appendix ‐ Malt business highlights For personal use only Arbroath malt p plant Acquisition November 2009 Arbroath opened in April 2010 Pinkenba scheduled to open early in 2011 Port of Vancouver redevelopment works commenced Pinkenba malt plant progress Calgary waste water sharing agreemen
Slide 32: Appendix - Storage and Logistics business highlights
Appendix ‐ Storage and Logistics business highlights For personal use only New stock management system Grain Transact launched in July 2010 Grower Marketing Services expanded p to 17 customer facingg staff and extended to Western Australia Refurbishment of locomotives for NSW branchlines and t
Slide 33: Appendix - Ports business highlights
Appendix ‐ Ports business highlights For personal use only Pinkenba Pi k b bin bi refurbishment f bi h project j complete – first intake delivery in September p Portland woodchip elevation expansion on track including truck marshalling yard Pinkenba silo bins complete Cooks River container pac
Slide 34: 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