Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — UBS Emerging Companies Conference Series: Food & Agribusiness 2015
23 slides from Graincorp Limited Class A's conference presentation, May 26, 2015
Slide 1: ASX cover letter: UBS Emerging Companies Conference
26 May 2015 The Manager Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 GRAINCORP LIMITED: GNC UBS EMERGING COMPANIES CONFERENCE SERIES: FOOD & AGRIBUSINESS Please find attached the Investor Presentation being presented by GrainCorp Group Chief Financial Officer, Mr Alistai
Slide 2: UBS Food & Agribusiness Conference
UBS Food & Agribusiness Conference 26 May 2015 Alistair Bell (Group Chief Financial Officer)
Slide 3: 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
Slide 4: Diversification strategy: Delivering the value in Grain
Diversification strategy Delivering the value in Grain Global View & Industry Trends Business Model & Corporate Objectives Investment in Malt Investment in Oils Capital Management 3
Slide 5: Global themes and industry trends in agribusiness and food
Global themes and industry trends in agribusiness and food Global themes Access to supply and food security Increasing demand for food quality and transparency Increasing competition domestic and international Industry trends Supply chain Diversification and Customer investment consolidation relev
Slide 6: Core grains destinations
Core grains destinations Wheat, barley, canola, sorghum (mmt per annum1) EU 6 2 1 East Asia North Africa Middle East Mexico 30 4 22 1 21 11 4 2 5 3 South Asia 1 South America Sub-Saharan 7 Africa 14 1 16 1 1 Wheat Barley Canola Sorghum 1. Global exports / imports – wheat, barley, canola, sorghum.
Slide 7: Core grains origination
Core grains origination Wheat, barley, canola, sorghum (mmt per annum1) Canada EU 19 2 22 4 7 Black Sea USA 16 4 29 5 1 Eastern WA/SA Australia 12 2 4 2 Argentina 1 1 1 8 2 Wheat Barley 1 Canola Sorghum 1. Global exports / imports – wheat, barley, canola, sorghum. 10 year average to 2014. Source:
Slide 8: Our business model integrated approach
Our business model integrated approach 2 3 1 Core grains Operating geographies Integrated activities Global grains exported(1) Origination Supply Processing chain Expertise in drier climate Capture value along the Insight across core grains grains grain chain 1. Excludes rice. 7
Slide 9: Our corporate objectives aligned with shareholder interests
Our corporate objectives aligned with shareholder interests 1 2 3 Manage variability Deliver growth Improve returns Earnings by segment(1) $M EBITDA and NPAT(2) $M Return on Equity % Target Growth in total EBITDA and Some improvement through Growth in Oils and Malt NPAT but on an EPS basis, the cy
Slide 10: Earnings profile benefiting from diversification
Earnings profile benefiting from diversification Earnings profile(1) $M Post current projects Objective: Improve ROE through the cycle 1. Before significant items. EBITDA reflects inclusion of Malt from FY10 and Oils from FY13. Allied 60% share of NPAT. 9 2. EBITDA excludes corporate costs. Allied 6
Slide 11: Strategic lenses to shape business unit priorities
Strategic lenses to shape business unit priorities Strategic Business unit priorities Initiatives Outcomes Lenses Strengthening our • Project Regeneration: Storage & first tranche of projects grain handling Logistics proposition • Port regulation changes Supply Chain • WA/SA: greater Grow our grai
Slide 12: Investing in North American malt processing
Investing in North American malt processing
Slide 13: North American malt
North American malt North American malt growth driver(1) GrainCorp’s North American malt customers Customer base & sales mix (by volume) 1. Source: Brewers Association 12
Slide 14: Malt plant expansion
Malt plant expansion GrainCorp Malt footprint Pocatello Expansion Capacity Increase: US$75M (above hurdle rate of 12% IRR) • Increase production capacity at Pocatello by 120kmt to 220kmt (completion expected 2017) Customers & Positioning • Backed by customer support and demand from craft sector • Ex
Slide 15: Building our Australian edible oils business
Building our Australian edible oils business
Slide 16: Canola oil
Canola oil Canola oil consumption Asian demand (1) Australian canola production(1) 1. Source: USDA accessed April 2015. 2. Source: ABARES accessed May 2015. 15
Slide 17: Oils network optimisation and crush expansion
Oils network optimisation and crush expansion Edible oils crushing and refining network Investment Network Optimisation: $125M • West Footscray expansion and upgrade • Numurkah upgrade • Murarrie capacity relocation (in 2016) Crush Expansion: $50M Murarrie • Increase Numurkah capacity by 40% to 1,00
Slide 18: Disciplined approach to capital management
Disciplined approach to capital managementt
Slide 19: Disciplined approach to capital management
Disciplined approach to capital management • Majority of investment underway in processing businesses more stable earnings, less dependent on grain production in Eastern Australia • Building a pipeline of organic opportunities • Flexibility with the timing of capital investment for a number of the
Slide 20: Capital investment for growth in reliable earnings
Capital investment for growth in reliable earnings Storage & Logistics Marketing Malt Oils Over next ~3+ years First tranche announced ~$325M(2) May 2015 underway 24 15 26 ~$169M 104 invested Capital investments S&L S&L Marketing Malt Oils • Customer service • Network revitalisation • Global tradi
Slide 21: Strategic initiatives implementation and associated capex
Strategic initiatives implementation and associated capex 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 Kembla terminal develo
Slide 22: Balance sheet & dividends
Balance sheet & dividends Core Debt & Net Debt Dividends • HY15 core debt at $595M and Net Debt $1,170M • Dividend policy: payout 40 – 60% NPAT through the • Core debt gearing at ~25% and Net debt gearing at business cycle ~37% (rolling quarterly average) • Targeting to pay an ordinary dividend each
Slide 23: Wrap Up and Questions
Wrap Up and Questions 1 Global view macro themes driving industry trends 2 Greater diversification and building scale 3 Disciplined approach to capital management 4 Strategy execution and delivery of initiatives 5 Focus on values driving performance Safety, People, Customers 22
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