Slide 1: Investor Presentation - Half Year Ended 31 March 2017
11 May 2017 The Manager Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 GRAINCORP LIMITED: GNC INVESTOR PRESENTATION FINANCIAL HALF YEAR ENDED 31 MARCH 2017 Please find attached the Investor Presentation relating to the financial Half Year ended 31 March 2017. GrainCorp is
Slide 2: 2017 Half Year Results
2017 Half Year Results 11 May 2017
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: Commitment to safety is fundamental
Commitment to safety is fundamental LTIFR(1) performance RIFR(2) performance 7.3 7.0 21.5 21.6 6.3 18.3 13.9 3.8 12.2 11.6 3.6 11.3 2.7 2.2 HY14 FY14 HY15 FY15 HY16 FY16 HY17 HY14 FY14 HY15 FY15 HY16 FY16 HY17 Rolling 12-month average LTIFR 39% Rolling 12-month average RIFR 5% lower than HY16 lower
Slide 5: Strong performance driven by record harvest and large export volumes
Strong performance driven by record harvest and large export volumes • HY17 underlying earnings of $236M EBITDA(1) and $100M NPAT(2). • HY17 Statutory NPAT of $90M(3). • Dividend: fully franked HY17 interim dividend of 15 cents per share. • Overview: A strong result benefiting from record Australian
Slide 6: Earnings profile highlights benefits of portfolio and leverage to east coast grain production
Earnings profile highlights benefits of portfolio and leverage to east coast grain production UNDERLYING EBITDA(1,2) $M UNDERLYING NPAT(1) $M Malt Oils Allied Mills (NPAT) Marketing (EBITDA) S&L 235 227 236 122 109 173 166 88 136 134 61 100 35 32 HY11 HY12 HY13 HY14 HY15 HY16 HY17 HY11 HY12 HY13 HY1
Slide 7: Increase in dividend reflects growth in earnings
Increase in dividend reflects growth in earnings DIVIDENDS PER SHARE (DPS)(1) Ordinary DPS Special DPS 30 25 20 15 15 15 7.5 7.5 HY10 HY11 HY12 HY13 HY14 HY15 HY16 HY17 8-yr avg(2) Payout 55% 45% 49% 53% 56% 49% 53% 34% 48% ratio(3) • HY17 interim dividend: fully franked interim dividend of 15 cents
Slide 8: Higher earnings generated by grains businesses
Higher earnings generated by grains businesses HY16 TO HY17 EARNINGS BRIDGE(1) $M (6) (2) (4) Strong (2) receivals and Allied Mills exports 24 sold with In line with Lower debt effective date recent capex 3 cost, higher Strong export of 2 October program debt levels, (28) volumes 2016 less capitalis
Slide 9: Segment performance
Segment performance
Slide 10: Financial summary
Financial summary Revenue EBITDA(1) $M HY17 HY16 HY17 HY16 Malt 538 593 74 76 Oils 459 440 32 29 Storage & Logistics 395 213 113 28 Marketing 1,320 976 32 8 Allied Mills(2) - - - 6 Corporate costs - - (15) (13) Eliminations and other (256) (152) - - Total 2,456 2,070 236 134 1. Before significant it
Slide 11: Malt – ongoing strong performance
Malt – ongoing strong performance $M HY17 HY16 Revenue 538 593 EBITDA 74 76 EBIT 49 50 Capital Expenditure 45 29 • Malt sales volumes consistent other than slight • Unfavourable foreign exchange impact from reduction from sale of malt plants - high higher AUD (to USD) and lower GBP capacity utilisat
Slide 12: Oils – challenging year, modest improvement
Oils – challenging year, modest improvement $M HY17 HY16 Revenue 459 440 EBITDA 32 29 EBIT 15 14 Capital Expenditure 19 39 • Oilseeds: sales volumes consistent year on year • Some stabilisation in New Zealand dairy sector • Improved oilseeds earnings due to increased canola • Liquid Terminals: perfo
Slide 13: Storage & Logistics – large harvest, increased receivals and exports
Storage & Logistics – large harvest, increased receivals and exports • Large east coast harvest providing increased grain $M HY17 HY16 receivals and stronger bulk grain export volumes Revenue 395 213 • ~160 silos operated during harvest - average receivals per EBITDA 113 28 site ~70,000mt (2016: ~18
Slide 14: Marketing – benefiting from record Australian crop and increased export activity
Marketing – benefiting from record Australian crop and increased export activity $M HY17 HY16 • Strong performance driven by large export program Revenue 1,320 976 • Continued diversification of grain origination, with successful execution out of South Australia, Western EBITDA 32 8 Australia, Europ
Slide 15: Balance sheet and capex
Balance sheet and capex GrainCorp
Slide 16: Increase in gearing in line with capital expenditure and seasonal turnover
Increase in gearing in line with capital expenditure and seasonal turnover CORE DEBT(1) AND NET DEBT(2) 1,600 50% • Core debt $654M(3) and net debt $1,254M(3), with the 1,400 half year representing seasonal turnover 40% 1,200 • Core debt gearing(4) at ~29% (or 24% excluding 1,000 30% barley inventor
Slide 17: Strong and flexible balance sheet
Strong and flexible balance sheet CORE DEBT(1) $M Short-term 294 debt less • Core debt stabilised as expected and in 205 237 Marketing 141 134 and Oils line with strategic initiatives and portfolio inventories 71 89 optimisation Long-term 821 595 593 601 688 789 785 792 debt • Debt facilities matchi
Slide 18: Commodities inventory funded with specific commodity inventory facilities
Commodities inventory funded with specific commodity inventory facilities COMMODITIES INVENTORY(1) $M Supplemented short term debt with cash 1,000 Marketing, Oils grain, oilseed and 894 900 Malt barley inventory 829 792 799 800 Short-term debt 739 742 708 700 577 574 600 519 498 500 387 388 400 338
Slide 19: Capex investment reducing from FY16 peak
Capex investment reducing from FY16 peak CAPEX(1) $M DEPRECIATION & AMORTISATION $M Stay in Business 281 Depreciation Amortisation 143 136 236 127 119 34 34 30 91 24 167 209 141 18 168 73 112 113 96 13 71 109 95 97 103 63 80 73 60 70 71 68 72 49 33 FY12 FY13 FY14 FY15 FY16 HY17 FY12 FY13 FY14 FY15 F
Slide 20: Capital investment – major projects underway
Capital investment – major projects underway Storage & Logistics Marketing Malt Oils Invested (1) Underway (2) Tranche 2 Balance (3) 102 24 ~$81M(2) underway 11 39 (4) 35 14 15 6 17 8 16 56 ~$206M 109 invested(1) Capital investments S&L Marketing Malt Oils S&L • Project • Pocatello, Idaho • Numurkah
Slide 21: FY17 Outlook
FY17 Outlook GrainCorp
Slide 22: Malt outlook – continued strong demand and high utilisation
Malt outlook – continued strong demand and high utilisation Market fundamentals GrainCorp FY17 outlook • Global barley crop production ~147.0mmt(1) • Volumes consistent with previous year (FY16: 148.7mmt) • Continued strong demand for specialty products • Beer demand in mature markets continues to •
Slide 23: Oils outlook – volumes stable, focus on production efficiency
Oils outlook – volumes stable, focus on production efficiency Market fundamentals GrainCorp FY17 outlook • Australian canola crop production estimate of • Sales volumes stable 4.2mmt(1) (FY16: 2.9mmt) – favourable for crush • Continued margin pressure in Foods margins • Foods focused on improving pr
Slide 24: Grains outlook: above-average harvest and strong FY17 export program
Grains outlook: above-average harvest and strong FY17 export program • Record Eastern Australian crop production estimate of 28.2mmt(1) for FY17 (FY16: 18.6mmt) • 2017 sorghum crop estimate of 1.2mmt(2) - impacted by poor seasonal conditions (FY16: 1.9mmt) Storage & Logistics • Strong export program
Slide 25: FY17 Earnings Guidance
FY17 Earnings Guidance EBITDA NPAT • Underlying EBITDA (before significant items): • Underlying NPAT (before significant items): Guidance $385M – $425M $130M – $160M Variables • Depreciation & Amortisation: ~$150M Assumptions / Variables • 2H17 volumes: direct to port receivals; port • Tax: ~30% ele
Slide 26: Appendix
GrainCorp Appendix
Slide 27: Significant items
Significant items Net $M Segment EBITDA D&A Tax NPAT Details Interest Underlying 235.9 (72.5) (21.5) (41.8) 100.1 Restructuring costs Oils (3.4) 1.0 (2.4) Oils network optimisation: decommissioning and product transition costs. Impairment and gain on Malt, (9.2) 1.5 (7.7) Portfolio optimisation: sal
Slide 28: GrainCorp
GrainCorp a. Ge 7 eS" ine | Sees’ f