Slide 1: Company announcement: GrainCorp investor presentation half year ended 31 March 2012
Company announcement For personal use only GrainCorp Limited ABN 60 057 186 035 Date: 22 May, 2012 To: The Manager Announcements Company announcements office PUBLIC ANNOUNCEMENT GRAINCORP INVESTOR PRESENTATION FOR THE HALF YEAR ENDED 31 MARCH 2012 Results Release Presentation Andrew Horne Company Se
Slide 2: 2012 Half Year Results
22 May 2012 Ms Alison Watkins For personal use only (Managing Director and CEO) 2012 HALF YEAR RESULTS
Slide 3: Agenda
Agenda For personal use only • Financial Results • Business Performance • Dividend • Guidance and Operational Update • Strategy St t U d t Update -2-
Slide 4: Earnings higher due to strong grain volumes
Earnings higher due to strong grain volumes For personal use only • Earnings higher to $235M EBITDA and $134M Statutory NPAT • NPAT in this presentation excludes a $12M Significant Item for Malt defined benefit plan adjustment → $122M NPAT • Higher Grains(1) earnings due to: – Strong grain volumes (
Slide 5: Financial Results
For personal use only FINANCIAL RESULTS
Slide 6: Earnings higher in a record half year
Earnings higher in a record half year For personal use only EBITDA(1) - $M 200 NPAT - $M 400 Fiscal 1H Fiscal 2H Fiscal 1H Fiscal 2H 350 175 150 300 125 84 250 177 100 200 75 100 28 122 150 50 31 88 79 235 100 25 53 173 32 112 (7) 50 19 82 0 $M 32 (13) 0 $M (25) FY08 FY09 FY10 FY11 FY12 FY08 FY09 FY
Slide 7: Earnings driven by record carry-in and strong receival and export volumes
Earnings driven by record carry-in and strong receival and export volumes For personal use only HY11 to HY12 Earnings Bridge - $M 2 2 2 4 7 6 22 15 Higher due to Malt sales growth and 34 additional value captured 122 Higher due to record carry-in, 88 large crop and export volumes and effective custo
Slide 8: Debt and inventory in line with strategy
Debt and inventory in line with strategy For personal use only Debt - $M Grain Inventory - $M 750 675 Core Debt ($M)(1) Net Debt(2) Grain Marketing inventory Malting barley inventory 675 600 89 600 525 525 450 113 450 375 120 375 756 300 601 561 606 300 528 225 445 91 225 79 150 301 331 387 275 289
Slide 9: Capex supports strategic initiatives
Capex supports strategic initiatives For personal use only Capex - $M Grains and 150 Malt Grains and Corporate Malt $M Corporate 125 760 HY12 HY11 HY12 HY11 100 Depreciation 13 8 22 20 66 75 54 Amortisation 6 7 2 1 Total D&A 19 15 24 21 50 15 y Stay-in-business capex p 10 5 19 20 25 52 56 31 31 38 I
Slide 10: Business Performance
For personal use only BUSINESS PERFORMANCE
Slide 11: Earnings from a portfolio of grain related businesses
Earnings from a portfolio of grain related businesses For personal use only Revenue EBITDA $M HY12 HY11 HY12 HY11 Country & Logistics 311 284 73 39 Ports 128 90 74 52 Marketing 937 664 38 34 Malt 468 417 59 57 Allied Mills(1) - - 4 2 Corporate Costs(2) - - (13) (11) Intercompany Eliminations (158) (
Slide 12: Strong grain throughput driven by carry-in, receivals and exports
Strong grain throughput driven by carry-in, receivals and exports For personal use only • Throughput g p higher g due to record carry-in y and strong g receivals and exports p • 63% of total grain production(1) handled by GrainCorp year to date → country and ports Earnings driver (mmt) HY12 HY11 Com
Slide 13: Country & Logistics – higher earnings due to strong throughput volumes
Country & Logistics – higher earnings due to strong throughput volumes For personal use only $M HY12 HY11 • Record carry-in of 6.0mmt → higher storage and outload revenues Revenue 311 284 EBITDA 73 39 • Strong grain receivals (10.9mmt winter and 0 0.7mmt 7mmt summer) EBIT 57 26 • Lower harvest relat
Slide 14: Ports – record elevations due to carry-in and effective customer service
Ports – record elevations due to carry-in and effective customer service For personal use only $M HY12 HY11 • Record 5.0mmt grain exports handled → 4.8mmt bulk and 0.2mmt containers Revenue 128 90 EBITDA 74 52 • Effective customer service EBIT 66 46 – 1.4mmt 1 4mmt grain receivals direct to port fro
Slide 15: Marketing – strong first half earnings
Marketing – strong first half earnings For personal use only $M HY12 HY11 • Higher revenue due to strong Revenue 937 664 marketing volumes → 2.1mmt domestic and 1.8mmt exports EBITDA 38 34 • FY12 earnings front ended to first half Interest expense (11) (9) • Marketing inventory of $387M PBT 27 25 –
Slide 16: Malt – lower processing margins offset by higher volumes
Malt – lower processing margins offset by higher volumes and value add activities For personal use only $M HY12 HY11 800 Malt sales – kmt(2) 700 Revenue 468 417 600 500 EBITDA(1) 59 57 400 670 EBIT 40 42 300 488 483 200 Capital Expenditure 15 36 100 kmt 0 HY10 HY11 HY12 • L Lower processing i margin
Slide 17: Allied Mills – higher earnings and capacity replacement announced
Allied Mills – higher earnings and capacity replacement announced For personal use only $ M (60% JV share) HY12 HY11 60% Net Asset Value - $M 200 EBITDA 12 7 150 Equity Profit 4 2 100 Shareholder loan interest 1 1 131 137 148 received 50 112 121 Net Asset Value((1)) 148 137 0 $M HY08 HY09 HY10 HY11
Slide 18: Safety – Zero Harm – Safe for Life
Safety – “Zero Harm – Safe for Life” For personal use only Lost Time Injury Frequency Rate(1) • Lower L iinjury j ffrequency rate t 16 • Step Change Strategy being 15 p implemented 14 13 • Focus on improving safety behaviours 12 and culture 11 14.5 • Target improved lead indicators such 10 11.7 12.4
Slide 19: Dividend
For personal use only DIVIDEND
Slide 20: Higher dividends including Special
Higher dividends including Special For personal use only Dividends and Earnings Payout Ratio(1) • HY12 fully franked dividends of $0.15 interim and $0.15 special 100 Interim and Final DPS (LHS) 100% Special DPS (LHS) • HY12 NPAT payout ratio of 49% 49%, Earnings Payout ratio % (RHS) 80 80% or 44% of
Slide 21: Guidance and Operational Update
For personal use only GUIDANCE AND OPERATIONAL UPDATE
Slide 22: FY12 guidance – Storage & Logistics and Malt business drivers
FY12 guidance – Storage & Logistics and Malt business drivers For personal use only Storage g & Logistics g Malt Country & Logistics Ports • Receivals • Direct Receivals(1) • Sales → ~12.0mmt → ~2.5mmt → ~1.35mmt uidance • Domestic outload • Grain exports • EBITDA per tonne(2) → ~6.0mmt 6.0mmt → ~10
Slide 23: FY12 guidance – GrainCorp earnings
FY12 guidance – GrainCorp earnings For personal use only EBITDA NPAT • EBITDA • NPAT (excluding Significant Items) ance → $385-415M → $185-205M Guida • Statutory NPAT (including Significant Items) → $200-220M • Excludes Marketing g interest • Depreciation p & Amortisation ~$85M Assumptions s expense
Slide 24: Grains update
Grains update For personal use only FY12 Operational Update FY13 Outlook Country & Logistics • Forecast ~4.5mmt grain carry-in • Year-To-Date(1) country receivals • Additional rail capacity maintained 11 9mmt 11.9mmt • 0.6mmt 06 t exportt capacity it added dd d • Accelerating safety expenditure and
Slide 25: Malt update
Malt update For personal use only FY12 Operational Update FY13 Outlook • Committed YTD sales 1.3mmt → • USDA(1) world barley production ~95% of FY12 sales guidance forecast at 135mmt, 1% higher year on • Strong portfolio capacity utilisation yyear • Leveraging competitive strengths to • Forward sold
Slide 26: Strategy Update
For personal use only STRATEGY UPDATE
Slide 27: Corporate Objectives
Corporate Objectives For personal use only 1 Improve Returns 2 Manage Variability 3 Growth • Improve through the • Manage through the cycle • Grow business scale → cycle shareholder return earnings organic and acquisitions • Focus on value • Maintain strong cash flow • Leverage capabilities creation
Slide 28: Our Strategy builds on our Business Model and Strategic Themes
Our Strategy builds on our Business Model and 4 Strategic Themes For personal use only 1 Strengthen our grain 2 Grow our grain 3 Create and capture handling network Marketing business additional Malt value Harness our grain Develop improved Grow relationships to processing footprint and capability f
Slide 29: Thank You – Q&A
For personal use only THANK YOU – Q&A
Slide 30: Appendix
For personal use only APPENDIX
Slide 31: NPAT reconciliation
NPAT reconciliation For personal use only $M HY12 HY11 Statutory NPAT 134 88 Adjusted for Malt defined benefit plan Before tax (17) - Tax effect 5 - Underlying NPAT 122 88 - 30 -
Slide 32: Corporate and Business Unit Costs reconciliation
Corporate and Business Unit Costs reconciliation ili ti For personal use only $M HY12 HY11 FY11 Corporate Costs 13 11 21 Business Support Costs... - Storage & Logistics 9 7 14 - Marketing 1 1 2 - Malt 1 1 2 Corporate and Business Support 24 20 39 • Support Costs apportioned to businesses in FY12 but
Slide 33: 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