Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — JP Morgan Investor Conference "A Day at the Farm" 2012
17 slides from Graincorp Limited Class A's conference presentation, Jul 26, 2012
Slide 1: Company announcement: Investor Presentation
Company announcement For personal use only GrainCorp Limited ABN 60 057 186 035 Date: 26 July, 2012 To: The Manager Announcements Company Announcement Office Australian Securities Exchange On Line Lodgement GRAINCORP LIMITED (GNC) INVESTOR PRESENTATION Andrew Horne Company Secretary GrainCorp Limite
Slide 2: Investor Conference: JP Morgan – A Day at the Farm
26 July 2012 Ms Alison Watkins (Managing Director and CEO) For personal use only INVESTOR CONFERENCE JP Morgan – “A Day at the Farm”
Slide 3: Today's presentation
Today’s presentation... For personal use only Our business model... • Create and capture grain value by leveraging our integrated and international grain supply chain Our strategic focus... • 3 Corporate Objectives → improve shareholder returns, manage variability and grow as an international agribu
Slide 4: Three core grains – wheat, barley, canola
Three core grains – wheat, barley, canola For personal use only Global traded Our core grains Other grains1 Wheat • Wheat, barley, canola → represent 8% 30% Corn 23% ~35% of global traded grains Barley • ‘Drier climate’ grains, where we 3% Soybean Canola have a comparative advantage 2% 32% Sorghum 2
Slide 5: Three integrated grain activities – end to end grain supply chain presence
Three integrated grain activities – ‘end to end’ grain supply chain presence For personal use only • We create value through grain handling, ownership and processing • We capture value through our asset intensive supply chain, grain processing insight, and local and international market insight Mark
Slide 6: Three operating geographies – Australia, North America and Europe
Three operating geographies – Australia, North America and Europe For personal use only • International insight, multi-origin capability and diversification in our core grains • Close to supply fundamentals for our core grains and malt • We have visibility across 50%+ global export trade of each of
Slide 7: Three Corporate Objectives
Three 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 cr
Slide 8: Four Strategic Themes to meet Corporate Objectives
Four Strategic Themes to meet Corporate Objectives For personal use only Corporate Objectives Strategic Themes Financial Targets 1 1 Improve Returns Strengthen our grain handling network • ~$40M additional Increase underlying shareholder return 2 underlying EBITDA Grow our grain by end FY14 Marketin
Slide 9: Strategic Themes supported by Gamechangers
Strategic Themes supported by 11 “Gamechangers" For personal use only 1 Strengthen our grain 2 Grow our grain 3 Create and capture handling network Marketing business additional Malt value 1 5 7 Drive supply chain Enhance customer- Optimise operational efficiency focused growth performance 2 6 Integ
Slide 10: Strategy to capture ~$40M additional underlying EBITDA
Strategy to capture ~$40M additional underlying EBITDA For personal use only • In excess of $40M additional underlying EBITDA from identified Gamechangers • Supports the growth of ROE through the cycle ~$40M EBITDA delivered over 3 years ending FY14 1 2 3 4 Strengthen our Grow our grain Create and B
Slide 11: Capital investment for ~$40M EBITDA growth
Capital investment for ~$40M EBITDA growth For personal use only • $80-120M capex to capture earnings growth → 3 years ending FY14 • Average ROCE of ~20% for investments → 2-3 years cash payback Example capex projects to achieve ~$40M EBITDA 1 Strengthen our • Online support → smartphone app and Gra
Slide 12: Global grain demand to increase by 50%
Global grain demand to increase by 50% For personal use only Grain consumption drivers to 2050 (bmt1) Global grain demand Developing Countries 0.18 Developed Countries • Forecast to grow by 1bmt or 50% by 0.36 Population growth 2050 due to: 0.42 Per capita 3.15 – 35% rise in population to 9.7 bn con
Slide 13: Global grain trade to increase by 100%
Global grain trade to increase by 100% For personal use only • Global wheat and malt export trade has doubled in the past 40 years • Driven by demand in import dependent regions, global trade of our core grains forecast to rise ~155mmt to ~300mmt pa by 2050 • Forecast ~2% pa global malt demand growt
Slide 14: Opportunities for GrainCorp
Opportunities for GrainCorp... For personal use only Eastern Australia Grain Yield1 (mt/Ha) Increased grain supply • Grain handling → higher grain prices 3.0 2.5 will support increased grain yields • Grain exports → if supply growth in 2.0 1.5 eastern Australia exceeds domestic 1.0 demand 0.5 25 yea
Slide 15: FY12 guidance – earnings higher
FY12 guidance – earnings higher For personal use only EBITDA1 - $M 450 Guidance $385-415M • Volume guidance: 400 350 – Country receivals ~12.0mmt 300 – Grain exports ~10.0mmt 250 200 – Carry-out ~4.5mmt 150 100 – Malt sales ~1.35mmt 50 $M0 • Main variables: FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY
Slide 16: FY13 outlook – Grains and Malt update
FY13 outlook – Grains and Malt update For personal use only Grains • Forecast ~4.5mmt grain carry-in • Additional rail capacity maintained and 0.6mmt export capacity added • FY13 Shipping Stem open → ~9.0mmt booked • Eastern Australian winter crop production forecast range 16.0-18.0mmt1 Malt • USDA2
Slide 17: 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
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