Slide 1: FY24 Results
FY24 Results For the year ending 30 September 2024 14 November 2024 This release has been authorised by the Board of GrainCorp Limited
Slide 2: Disclaimer
Disclaimer This presentation includes both information that is historical in character and information that consists of forward-looking statements. Forward looking statements are based on current expectations of future results or events. The forward-looking statements are subject to risks, stakehold
Slide 3: Acknowledgement of Country
Acknowledgement of Country GrainCorp acknowledges Aboriginal and Torres Strait Islander peoples as the First Peoples of Australia and embraces the spirit of reconciliation, working towards the equality of outcomes and ensuring an equal voice. This artwork was created by Lani Balzan, a proud Aborigin
Slide 4: Agenda
Agenda Speakers Contents Robert Spurway FY24 highlights Managing Director and CEO Strategy and growth FY24 financial performance Ian Morrison Chief Financial Officer Balance sheet and capital management Outlook and conclusion Appendices 4
Slide 5: Executive summary
Executive summary Progressing strategy and maintaining balance sheet flexibility FY24 performance Continued strategy execution Delivering shareholder value • FY24 Underlying EBITDA(1) of • Expanded Animal Nutrition • Average earnings through-the- $268m portfolio through XFA(4) acquisition cycle EBIT
Slide 6: FY24 highlights
FY24 highlights Focus on operational efficiency across our value chain Financial metrics Underlying EBITDA Underlying NPAT(1) Core cash $268m (FY24: EBITDA: $246m) $77m (FY24: NPAT: $62m) $337m (FY23: $349m) (FY23: EBITDA: $565m) (FY23: NPAT: $250m) Operating metrics Total grain handled(2) Oilseed c
Slide 7: Health and safety
Health and safety Striving for ‘zero-harm’ Health and safety performance • Improving safety metrics year-on year − Recordable injury frequency rate(1) of 4.8 − Lost time injury frequency rate(2) of 1.9 FY24 focus areas • Review and refresh of Critical Risk Management framework • Psychosocial hazards
Slide 8: Sustainability
Sustainability An integral part of maximising long-term shareholder value Our environment 5% reduction in emissions per Developed SBTi(1) Launched Environment tonne from targets GrainCorp Next GrainCorp’s material sustainability topics Climate processing sites Sustainable agriculture and nature Comp
Slide 9: Strategy and growth
Strategy and growth
Slide 10: GrainCorp's vision and strategy
GrainCorp’s vision and strategy Refreshed strategy to deliver sustainable growth 10
Slide 11: Our strategy in action
Our strategy in action Positioning GrainCorp for success today and into the future Enhance • Delivered record oilseed crush volumes of 540kmt Driving returns from our • Progressed ports strategy to increase utilisation and integrated footprint of margin profile for non-grain products infrastructure
Slide 12: Diversifying non-grain port earnings
Diversifying non-grain port earnings Extracting value from non-grain handling capabilities Improving contribution margin(1) Progress to date Contribution margin $m Contribution margin/mmt $(2) 13.8 • Contribution margin for bulk materials has grown from $26m in FY20 to $36m 12.4 $36m in FY24 • Growt
Slide 13: Enhancing capabilities in Animal Nutrition
Enhancing capabilities in Animal Nutrition Acquisition of Performance Feeds and Nutrition Service Australia Transaction and benefits Our Animal Nutrition portfolio Strong underlying industry dynamics Cattle on feedlot headcount(3) Completed $35m acquisition of XF 1.5 4.3% Australia(1) on 2 April 202
Slide 14: Progressing feasibility study for oilseed crush expansion
Progressing feasibility study for oilseed crush expansion Partnering with Australian industry to develop a viable supply chain • Signed MOU with Ampol and IFM Investors to explore the establishment of an Australian based low carbon liquid fuel supply chain • Evaluation of targeted locations for pote
Slide 15: Business Transformation Program
Business Transformation Program Establishing a foundation for growth and future-proofing GrainCorp About the program Reduce • Business wide transformation program to unlock efficiencies and drive returns overall across our integrated value chain complexity • Consists of the delivery of several initi
Slide 16: Business Transformation Program implementation timeline
Business Transformation Program Phased approach to implementation, targeting completion by FY26 Business transformation implementation timeline Business transformation investment $m FY24 Completed Planning and design Planning and design Operating expenditure 9 Capital expenditure 1 Underway Release
Slide 17: FY24 financial performance
FY24 financial performance @.3)
Slide 18: FY24 financial performance
FY24 financial performance Production and margin environment weaker than FY23 $m FY24 FY23 • Agribusiness result driven by lower production volumes in ECA and Western Australia and lower margins on grain sales • Nutrition and Energy result impacted by lower crush margins, partially offset by an incr
Slide 19: Agribusiness
Agribusiness Solid execution in mixed production conditions East Coast Australia (ECA) Agribusiness • ECA winter grain production of 23.5mmt in 2023/24(1) compared to 29.9mmt in $m FY24 FY23 2022/23 Revenue EBITDA − Below-average conditions in Queensland and northern NSW, in contrast to favourable g
Slide 20: Agribusiness: International
Agribusiness Positive International contribution despite volume and margin pressure International(1) • Decline in International contracted grain sale volumes and margins due to: Contracted grain sales (mmt) – Lower Western Australia winter crop production of 14.8mmt in 2023/24(2) International ECA −
Slide 21: Nutrition and Energy
Nutrition and Energy Increased crush volumes offset by decline in crush margins Human Nutrition Nutrition and Energy • Record full-year oilseed crush volumes with operational improvements being $m FY24 FY23 delivered, driven by advanced analytics Revenue EBITDA • Crush margins narrowed further in se
Slide 22: Nutrition and Energy: Animal Nutrition and Agri-energy
Nutrition and Energy Positive industry fundamentals in Animal Nutrition and Agri-energy Animal Nutrition Animal Nutrition sales volumes (kmt) • Increase in sales volumes due to second half contribution from XFA • High number of cattle on feedlot fuelled strong demand for molasses-based liquid feed s
Slide 23: Corporate
Corporate Disciplined investment in growth and transformation projects Corporate Corporate • Underlying corporate costs in line with FY23 $m FY24 FY23 • Growth projects spend includes costs associated with XFA acquisition and ongoing Underlying corporate crush feasibility study Growth projects • UMG
Slide 24: Balance sheet and capital management
Balance sheet and capital management
Slide 25: Balance sheet strength
Balance sheet strength Maintaining balance sheet flexibility while investing for growth Core cash / (debt) ($m) Debt and liquidity profile 349 337 Components 30 Sep 2024 30 Sep 2023 Term debt Inventory and working capital financing 177 Cash Net cash / (debt) (99) (373) Commodity inventory Core cash
Slide 26: Capital allocation discipline
Capital allocation discipline Increase in capex in FY24 to support growth Capex and investments ($m)(1) Depreciation & Amortisation (D&A) ($m)(2) Sustaining Growth Investments Business transformation D&A AASB-16 depreciation 117 117 119 86 95 110 92 107 6 4 81 28 36 36 42 1 26 28 26 40 1 44 59 5 3 1
Slide 27: Delivering consistently strong shareholder returns
Delivering consistently strong shareholder returns Over $465m returned to shareholders since FY21 Dividend history (cents per share) 30 30 Ordinary dividend 24 24 24 24 Special dividend • Declared FY24 final dividend of 14cps and special 16 16 10 10 10 dividend of 10cps, both fully franked 12 10 8 •
Slide 28: Outlook and conclusion
Outlook and conclusion
Slide 29: Outlook
Outlook Positive production outlook in challenging margin environment • ABARES’ September 2024 Crop Report forecast for 2024/25: − ECA winter crop of 28.8mmt; reversal of last seasons’ north/south split with better conditions in northern regions − Victorian canola crop estimated to be 25% smaller th
Slide 30: Conclusion
Conclusion Delivering on our strategy to drive shareholder returns Delivered underlying EBITDA of $268m Completed acquisition of XF Australia Increased average earnings through-the-cycle to $320m EBITDA Balance sheet with significant flexibility Delivering strong returns to shareholders 30
Slide 31: Appendices
| 1 ; ppendices
Slide 32: Our network of assets
Our network of assets GrainCorp is a leading Australian agribusiness and processing company, with integrated operations across four continents and a proud history of delivering for customers for more than 100 years 32
Slide 33: How we operate
How we operate We partner with growers to maximise the value of their crops, connecting them to domestic and global marketplaces through our end-to-end supply chain and infrastructure assets. We develop innovative solutions to create high quality and sustainable products across Human Nutrition, Anim
Slide 34: Agri-energy is a significant opportunity for Australian Agriculture
Agri-energy is a significant opportunity for Australian Agriculture Low carbon liquid fuels demand expected to be strong Compelling fundamentals GrainCorp’s right to win • Rising global demand for low carbon liquid fuels to meet • A leading Australian based feedstock supplier (canola oil, UCO, decar
Slide 35: GrainCorp Ventures
GrainCorp Ventures Continuing to expand our portfolio of Digital and AgTech investments Our portfolio About Investment in BioScout Developed an integrated platform to track the spread of airborne diseases on-farm, leveraging air sampling, mapping, and analytics along with sensors to support growers
Slide 36: Long-term ECA winter grain production
Long-term ECA winter grain production Average ECA grain production continues to improve Total ECA Winter Crop Production(1,2) 10-year rolling average – 2.7% CAGR(3) 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 2011/12 2003/04 2005/06 2017/18 2023/24s 2024/25 f 2009/10 2013/14 2019/20 1999/00 2007/08 2001/0
Slide 37: ECA tonnes handled
ECA tonnes handled Mmt FY20 FY21 FY22 FY23(2) FY24(3) ABARES – total ECA winter + sorghum production(1) 12.6 34.3 33.9 32.5 25.7 Carry-in 1.5 0.7 4.3 4.9 3.9 Receivals(4) 4.2 16.5 16.3 13.9 10.1 Imports (trans-shipments) 1.4 0.0 0.0 0.0 0.0 Domestic outload 5.1 5.0 6.4 6.4 5.9 Exports(5) 1.3 7.9 9.2
Slide 38: Significant operating leverage in large ECA crop years
Significant operating leverage in large ECA crop years GrainCorp earnings profile since FY20(1) Underlying EBITDA ($m) CPC Impact(2) (87) (77) 703 (65) 439 565 393 (55) 331 320 268 98(3) 53 FY20 FY21 FY22 FY23 FY24 Average Underlying Average Underlying Average EBITDA EBITDA since FY20 EBITDA since F
Slide 39: Building blocks of $320m EBITDA through-the-cycle
Building blocks of $320m EBITDA in average earnings through-the-cycle Key drivers - Agribusiness Agribusiness – TTC contribution ECA International • ECA crop production (winter & summer) • Western Australia and Canada crop production Agribusiness • Total grain handled ~66% • Contracted grain sales v
Slide 40: Crop Production Contract
Crop Production Contract Smoothing GrainCorp’s cash flows through-the-cycle Crop Production Contract (CPC) – payments(2) About the Crop Production Contract (CPC) $70m gross payment based on 29.5mmt • CPC was critical in facilitating demerger of GrainCorp and United Malt 100 FY23 • 10-year contract (
Slide 41: Crop Production Contract: expected to hit payment cap in FY25
Crop Production Contract Expected to hit payment cap in FY25 Crop Production Contract – cumulative payments(1) Counterparty payment cap: $270m • Aggregate net limit of $270m over the length of the contract • Cumulative net payments of $212m made by GrainCorp to date 58 – FY20 – GrainCorp receipt $58
Slide 42: Underlying EBITDA bridge: FY23 to FY24
Underlying EBITDA bridge: FY23 to FY24 5 5 22 40 8 5 4 2 8 44 FY23 Lower ECA CPC Impact(1) International GCC Lower crush XFA UMG Corporate – FY24 Underlying volumes and performance earnings margins (6 months) Impact(2) Growth Underlying EBITDA margins projects EBITDA Agribusiness Nutrition & Energy
Slide 43: Cash flow
Cash flow ($m) 30 September 2024 30 September 2023 Statutory EBITDA 246 565 Net Interest (45) (59) Income taxes paid (94) (203) Changes in working capital and other related items 40 121 Net operating cash flow excl inventory funding & commodity inventory 148 424 (Repayments) / proceeds for bank loan
Slide 44: Working capital movements
Working capital movements Working capital reflects decline from recent high commodity volumes and values Net Working Capital (NWC)(1) 800 700 • Year-on-year decline reflects lower 600 production volume and commodity values 500 • Net working capital unwind due to 400 lower short-term funding requirem
Slide 45: Core cash / (debt) bridge: FY23 – FY24
Core cash / (debt) bridge: FY23 – FY24 2 55 24 3 3 2 44 2 • Core cash position at 30 September 2024 2 45 was $337m, compared to $349m at 30 September 2023 34 33 4 • Gross proceeds of $127m received for sale of 8.5% UMG stake • Dividends comprises of 30cps FY23 final dividend and 24cps FY24 interim d
Slide 46: Reconciliation of underlying earnings
Reconciliation of underlying earnings Reconciliation of NPAT to Underlying NPAT $m FY24 FY23 NPAT 61.8 249.7 Business transformation costs 21.4 - Less tax on business transformation costs (6.4) - Underlying NPAT 76.8 249.7 Reconciliation of EBITDA to Underlying EBITDA $m FY24 FY23 EBITDA 246.4 565.3
Slide 47: Segment restatement
Segment restatement Realigning our reporting segments to better reflect our integrated operating model Reported Restated Full year, $m FY21 FY22 FY23 Full year, $m FY21 FY22 FY23 FY24 Total reportable segment revenue Total reportable segment revenue Agribusiness 5,193.6 7,559.2 7,802.6 Agribusiness
Slide 48: Capital management framework
Capital management framework • Target minimal core debt Service debt obligations • Debt finance commodity inventory and working capital Sustaining capital expenditure • $40–50m p.a. Dividends • Payout ratio = 50-70% of NPAT through-the-cycle • Capital investment in growth Surplus cash flow projects
Slide 49: Glossary
Glossary Term Definition Term Definition AASB Australian Accounting Standards Board LTIFR Lost Time Injury Frequency Rate ABARES Australian Bureau of Agricultural and Resource Economics mmt Million metric tonnes CAGR Compound Annual Growth Rate Net debt Total debt less cash Carry-in Grain inventory
Slide 50: GrainCorp Limited contact details
GrainCorp Limited Level 20, Tower 2, International Towers 200 Barangaroo Avenue Barangaroo NSW 2000