Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — Investor Presentation (April 2019)
22 slides from Graincorp Limited Class A's investor presentation, Apr 4, 2019
Slide 1: Separation to unlock shareholder value
Separation to unlock shareholder value 4 April 2019
Slide 2: Portfolio Review outcomes
Portfolio Review outcomes › GrainCorp has commenced execution of a number of operational and value creation strategies which have been developed through the Portfolio Review Value creation strategy Status Grains initiatives to increase ‘through-the-cycle’ EBITDA Implemented - further benefits from F
Slide 3: Demerger overview and rationale
Demerger overview and rationale GrainCorp to pursue a demerger of MaltCo Separation of portfolio will unlock shareholder value › MaltCo will become an independent ASX-listed company, › Separate boards and management teams empowered to pursue with shareholders receiving shares in MaltCo proportional
Slide 4: Business characteristics
Demerger overview and rationale › GrainCorp is made up of businesses with different characteristics and returns resulting in different investment profiles › Since its acquisition in 2009, MaltCo has become a significant business in its own right, currently representing a majority of Group earnings N
Slide 5: Implementation of demerger
Implementation of demerger › GrainCorp is targeting implementation of the demerger by the end of CY19 – Expected to be implemented through a Scheme of Arrangement, subject to shareholder, final Board, Court and regulatory approvals – Engagement with ATO underway regarding demerger tax relief › Creat
Slide 6: Business information
Business information
Slide 7: Overview of MaltCo
Overview of MaltCo MaltCo is a leading global maltster with a strong track record of earnings growth, driven by strategies to focus on high value markets Highlights Proforma EBITDA ($m)(1) Fourth largest independent maltster globally with ~1.2Mtpa of 1 capacity and ~95%+ average utilisation across 1
Slide 8: MaltCo: a leading global maltster
MaltCo: a leading global maltster › Fourth largest independent maltster globally with ~1.2Mtpa of capacity and high utilisation across 13 plants in North America, Australia and the UK North America Australia United Kingdom Malt production 3 facilities 2 facilities 3 facilities 5 facilities Maltster
Slide 9: MaltCo: strong market fundamentals, global expansion opportunities
MaltCo: strong market fundamentals, global expansion opportunities › The US has seen rapid growth in the number of craft breweries; still significant growth potential in some states › The growth of craft breweries has not been restricted to the US with the development of microbreweries in many count
Slide 10: MaltCo: strong Craft distribution footprint
MaltCo: strong Craft distribution footprint › Strong distribution footprint has enabled MaltCo to provide high quality service to its customers, particularly in the North American craft market › Full service one-stop shop for craft brewing and distilling, offering malt, hops, yeast, adjuncts North A
Slide 11: Overview of New GrainCorp
Overview of New GrainCorp New GrainCorp is the leading Australian and New Zealand grain and oilseeds handler, with a growing global network of origination and destination locations 1 Integrated global agribusiness with grain handling, storage, Proforma EBITDA(1) profile (A$M) trading and processing
Slide 12: New GrainCorp: integration of Grains and Oils delivers customer benefits
New GrainCorp: integration of Grains and Oils delivers customer benefits › New GrainCorp’s operations span the supply chain, from country receivals through to outload, and facilitate accumulation and storage of feedstock for the Oils operations. › Integration drives a number of benefits to New Grain
Slide 13: New GrainCorp: initiatives delivering tangible benefits
New GrainCorp: initiatives delivering tangible benefits › New GrainCorp is implementing initiatives to increase ‘through-the-cycle’ EBITDA › Assets comprising New GrainCorp generated FY14-18 average EBITDA of ~$125 million before corporate costs Initiative Benefit p.a. Status Operational improvement
Slide 14: Benefits of simplification and demerger
Benefits of simplification and demerger Proposed demerger will accelerate and enable process simplification and cost reduction initiatives for New GrainCorp Initiative Approx. Benefit p.a. Status Integration of the Grains and Oils business units to eliminate Implemented within next $10m duplication
Slide 15: New GrainCorp: Overview of indicative Grain Derivative terms
New GrainCorp: Overview of indicative Grain Derivative terms Evaluating an east coast grain production derivative instrument (“Grain Derivative”) to reduce cash flow volatility linked to grain harvest volumes › Receive a fixed payment per tonne of ECA winter grain New GrainCorp indicative unlevered
Slide 16: Capital structure review
Capital structure review Review of capital requirements and optimal financing strategy for both MaltCo and New GrainCorp is being undertaken MaltCo indicative financial policies New GrainCorp indicative financial policies › Targeting a strong investment grade capital structure › Targeting a strong i
Slide 17: Appendix
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Slide 18: MaltCo: high quality supply chain, strong grower relationships
MaltCo: high quality supply chain, strong grower relationships › Long-term relationships with growers provides access to the highest quality malting barley across the globe including the Country elevator network in Canada positioned in key barley growing areas North America Australia & New Zealand U
Slide 19: MaltCo: diversified customer base
MaltCo: diversified customer base Highly strategic business model with a mix of big-brewers, malt distillers and craft customers Small craft brewers Malt distillers Big-brewers Customer mix by geography › Small craft brewers are 1/3 of › Producing scotch or scotch › Can produce both mass (FY18 reven
Slide 20: New GrainCorp: strong domestic & international footprint
New GrainCorp: strong domestic & international footprint › New GrainCorp has an expansive ANZ footprint, global multi-origin origination capabilities and customers and a vertically integrated supply chain GRAINS Grains operations Australia, Canada Marketing offices UK, Germany, Ukraine, Singapore, C
Slide 21: New GrainCorp: growing international operations
New GrainCorp: growing international operations Grains has recently focussed on growing its international origination and destination network to diversify its portfolio GrainsConnect Canada (GCC) Ukraine India › 50-50 joint venture between › GrainCorp’s expansion into Ukraine › India sales office pr
Slide 22: New GrainCorp: manufacturing footprint
New GrainCorp: manufacturing footprint Numurkah West Footscray East Tamaki › Crushing, Refining, Bleaching, › Refining, Bleaching, › Refining, Bleaching, Deodorising Deodorising, Hydrogenation, Deodorising, Hydrogenation, & Capability Interesterification, Fractionation Intersterification and Winteri