Slide 1: GrainCorp Limited: GNC Investor Presentation
6 April 2016 The Manager Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 GRAINCORP LIMITED: GNC INVESTOR PRESENTATION The attached Investor Presentation will be used by GrainCorp for the purpose of investor meetings at the Credit Suisse Asian Investment Conference in Hong K
Slide 2: Investor Presentation 6-7 April 2016
Investor Presentation 6-7 April 2016
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: Global themes and industry trends in agribusiness and food
Global themes and industry trends in agribusiness and food Global themes Global commodity markets operating in disinflationary pricing environment Access to supply and food security Increasing demand for food quality and transparency Fragmenting of mass markets to better meet niche customer demands
Slide 5: Our corporate objectives aligned with shareholder interests
Our corporate objectives aligned with shareholder interests Manage variability Deliver growth Improve returns EBITDA by segment(1) $M EBITDA and NPAT(3) $M Return on Equity % FY09 Annual ROE % Rolling 5 yr avg ROE % FY09 FY15 7yr Avg Allied 13% 294 14.4% 13.0% 235 11.2% 10.1% 160 6.6% 119 5.4% 63
Slide 6: Earnings profile reinforces the importance of diversification
Earnings profile reinforces the importance of diversification EBITDA(1) $M NPAT(1) $M Malt Oils Allied Marketing S&L Fiscal 1H 414 395 Fiscal 2H 205 350 172 175 293 235 83 212 66 84 95 160 80 63 34 45 27 122 31 109 10 88 53 61 32 35 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY09 FY10 FY11 FY12 FY13 FY14 FY
Slide 7: Our business model integrated approach
Our business model integrated approach Core grains Operating geographies Integrated activities Global grains exported(1) Origination Wheat Soybean 34% 32% Supply Processing chain Barley Corn 5% 24% Canola 3% Sorghum 2% Expertise in drier climate Capture value along the Insight across core grains g
Slide 8: 2016 focus
2016 focus 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 grain participation Marketing Marketing busine
Slide 9: Malt: enhancing competitiveness and pursuing growth
Malt: enhancing competitiveness and pursuing growth North America Europe Australia Region North America Europe Australia Total Plants Canada: Montreal, Thunder Bay, UK: Witham, Grantham, Arbroath, Calgary Pencaitland, Inverness Perth, Brisbane, Melbourne, 17 plants USA: Pocatello, Vancouver Germany:
Slide 10: Oils: substantial investment in growth and supply chain
Oils: substantial investment in growth and supply chain Oils Assets Assets & Capabilities China Assets • Crushing: 3 plants; ~415kt capacity • Refining: 3 plants (going to 2); ~315kt capacity • Port Terminals: 14 bulk liquid terminals with ~295k m3 • Complementary businesses: Feeds, Auscol Capabilit
Slide 11: Storage & Logistics: Eastern Australian grain supply chain network
Storage & Logistics: Eastern Australian grain supply chain network Eastern Australia production and exports GrainCorp Assets & Capabilities for major grains Production Cropped Area Mill Tonnes Mill Hectares Assets 25Mt 12MHa • Country Sites: ~175 country sites with Cropped area (RHS) ~20mmt of stora
Slide 12: Marketing: broadening our grain origination
Marketing: broadening our grain origination Europe Canada • Diversified sourcing of barley and wheat • Joint venture with Zen-Noh • New container packing facility • Increasing exposure to SE Asian customers WA & SA • Increasing origination and exports • Enhanced service offering to existing customer
Slide 13: Capital investment for growth in more reliable earnings
Capital investment for growth in more reliable earnings Storage & Logistics Marketing Malt Oils Invested (1) 140 Underway (2) Balance (3) Over next ~3+ years ~$224M(2) 83 94 underway 47 26 - 24 13 47 15 15 First tranche announced 171 ~$270M May 2015 invested(1) Capital investments Storage & Logistic
Slide 14: Strong and flexible balance sheet
Strong and flexible balance sheet Core Debt(1) $M Long term debt • Core debt increasing as expected and Short-term debt less marketing and oils Short-term debt less in line with implementation of Cash 141 Marketing 134 and Oils strategic initiatives inventories 26 79 71 89 • Debt facilities matching
Slide 15: FY16 Outlook and Guidance
FY16 Outlook and Guidance
Slide 16: Grains outlook – subdued export demand for Australian grain continues
Grains outlook – subdued export demand for Australian grain continues Market fundamentals GrainCorp FY16 outlook • Eastern Australian crop production estimate of • Carry-in: 1.6mmt at historically low levels (FY15: 17.7mmt(1) (FY15: 16.5mmt) 1.9mmt) Storage & Logistics (S&L) • Low carry exportable
Slide 17: Storage & Logistics
Below normal grain stocks resulting in lower S&L volumes FY16 FY16 Drivers (mmt) FY15 FY16 Outlook YTD(1) Outlook Eastern Australia Grain 16.5 17.7(2) Production • At historically low levels Grain carry-in (1-Oct) 1.9 1.6 • Limited early season export program Storage & Logistics Country network • De
Slide 18: Processing outlook – well placed through strong competitive position
Processing outlook – well placed through strong competitive position Market fundamentals GrainCorp FY16 outlook • Global barley crop production ~143.4mmt(1) • Forward sales of 1.2mmt at end February 2016 (FY15: 141.5mmt) • Malt sales volume: ~1.3mmt (FY15: 1.25mmt) • Beer demand in mature markets co
Slide 19: FY16 Earnings Guidance
FY16 Earnings Guidance EBITDA NPAT • Underlying EBITDA (before significant • Underlying NPAT (before significant items): Guidance items): $240M – $270M $40M – $55M • Includes 60% share of Allied Mills NPAT before significant items Variables • Depreciation & Amortisation: ~$140M • 2H16 volumes: sorgh
Slide 20: Winter crop post harvest review & strategic initiatives
Winter crop post harvest review & strategic initiatives Production & Receivals • Slightly below average levels of grain production in eastern Australia with mixed quality • Winter receivals of 7.2mmt to end February 2016, representing upcountry market share of ~45% in line with prior year • Reduced
Slide 21: Appendices
Appendices GrainCorp
Slide 22: Strategic initiatives implementation and capex timing
Strategic initiatives implementation and capex timing 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 developmen
Slide 23: Core Debt & Net Debt
Core Debt & Net Debt Core Debt(1) and Net Debt(2) 1,400 50% • FY15 core debt at $556M and Net Debt $744M 1,200 40% • Core debt gearing(3) at ~23% and Net 1,000 debt gearing(3) at ~37% (rolling 30% 800 quarterly average) 600 • Net debt gearing expected to peak in 20% 1H17 remaining below target of
Slide 24: Macro-economic factors affecting global grains trading
Macro-economic factors affecting global grains trading Baltic Dry Index Crude Oil 2500 140 120 2000 100 USD/barrel 1500 80 1000 60 40 500 20 0 0 2014 2015 2016 Jan 2013 Jul 2013 Jan 2014 Jul 2014 Jan 2015 Jul 2015 Jan 2016 Source: Bloomberg Source: Bloomberg Chicago Board of Trade - Wheat 1000 900 8