Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — FY2009 Earnings Presentation
30 slides from Graincorp Limited Class A's earnings presentation, Nov 25, 2009
Slide 1: GrainCorp 2009 Full Year Results Briefing
25 November 2009 GRAINCORP 2009 FULL YEAR RESULTS BRIEFING Grain Storage | Grain Logistics | Grain Trading | GrainCorp Malt | Allied Mills 1
Slide 2: Financial Results - Detail
FINANCIAL RESULTS - DETAIL Grain Storage | Grain Logistics | Grain Trading | GrainCorp Malt | Allied Mills 2
Slide 3: FY 2008/09 Financial Results - Overview
FY 2008/09 Financial Results - Overview EBITDA Up by $114 M Results FY09 FY08 $ million $ million Free Cash Up by $227 M Revenue 1,730 1,534 Flow EBITDA 165 51 NPAT Up to $63 M Net profit / (loss) 63 (20) after Tax Free Cash flow 1 181 (46) Highlights Improved financial performance driven by • Recov
Slide 4: Business Drivers at 30 September 2009
Business Drivers at 30 September 2009 Receivals 10.7 mmt FY09 FY08 (incl. ports and ex-other BHC’s) mmt mmt Grain exports Grain carry-in 2.2 1.2 5.2 mmt handled (incl. containers) Country network 9.6 5.8 grain receivals Bulk wheat 1.3 mmt Grain received at port 1.1 0.7 exports ex-farm & from other B
Slide 5: Key Financial Indicators at 30 September 2009
Key Financial Indicators at 30 September 2009 EBITDA - $ M NPAT - $ M 80 180 150 60 120 40 63.2 90 20 31.7 165.2 13.5 60 120.9 0 92.2 -19.8 -19.9 30 51.3 -20 31.9 0 -40 FY 05 FY 06 FY 07 FY 08 FY 09 FY 05 FY 06 FY 07 FY 08 FY 09 OPERATING CASH FLOW - $ M CAPEX- $ M 250 50 200 40 150 30 100 212.7 20
Slide 6: Earnings Bridge – NPAT FY08 to FY09
Earnings Bridge – NPAT FY08 to FY09 $M 100 11 (27) 16 (39) 67 11 80 (1) 63 60 40 44 20 0 (20) (20) Trading Allied Mills Equity FY 07/08 Logistics Income Tax FY 08/09 Ports Interest Storage and Merchandise Profit Corporate Office and Other Grain Storage | Grain Logistics | Grain Trading | GrainCorp M
Slide 7: Notable Financial Impacts
Notable Financial Impacts Major one-off benefits in FY 08/09 • Corporate Office relocation of $4.5 M • Higher exports led to rail earnings above budget estimates • Additional port storage and service fees related to managing multiple grades from wet Sth. Qld. and Nth. NSW wheat harvest Major one-off
Slide 8: Lower Debt Profile at 30 September 2009
Lower Debt Profile at 30 September 2009 700 600 Debt structure • Non current - $105 M 600 500 • Non Current (core long term) debt 500 matures in 2011 228 223 400 • Current - $89 M 400 • Current (Working Capital and Inventory 229 224 300 300 Funding) varies with grain volumes / 224 price and is negot
Slide 9: Significantly Stronger Balance Sheet at 30 Sept 2009
Significantly Stronger Balance Sheet at 30 Sept 2009 • Current borrowings largely FY09 FY08 secured against inventory $ million $ million Cash 161 9 • Inventory and Trade Inventories/Trade Debtors 255 381 Debtors lower due to Other current assets 54 70 lower grain prices Non current assets 614 638 •
Slide 10: FY 2008/09 Dividend
FY 2008/09 Dividend • The GrainCorp Board has declared a dividend for the financial year ended 30th September 2009 • The dividend is $0.0727 per share • The ‘ex’ date for eligible shareholders is 30th November 2009 • The record date will be 4th December 2009 • Proposed payment date is 16th December
Slide 11: Business Unit Performance
BUSINESS UNIT PERFORMANCE Grain Storage | Grain Logistics | Grain Trading | GrainCorp Malt | Allied Mills 11
Slide 12: GrainCorp Supply Chain Business Model
GrainCorp Supply Chain Business Model GrainCorp generates revenue from the entire grain supply chain, from grain storage, grain transport to port, grain trading, and ship loading Grain growers ‘Take or pay’ trains Contracted road transport Road Export Country storage Port elevators markets Rail netw
Slide 13: Performance by Business Unit
Performance by Business Unit Business Unit FY09 FY08 FY09 FY08 $ million Revenue1 Revenue1 EBITDA EBITDA Storage & Logistics 281 120 66 22 Ports 131 52 78 11 Trading 1,243 1,270 39 28 Merchandise 73 89 (23) 4 Allied Mills 2 - - 10 11 Corporate, Head Office and - - (5) (24) Other 3, 4 Total 1,730 1,5
Slide 14: Storage and Logistics
Storage and Logistics FY09 FY08 Country Network Grain Receivals – mmt 12 Carry in 2.2 1.2 10 Revenue 281 120 8 EBITDA 66 22 6 10.8 9.3 9.6 4 EBIT 44 (1) 5.8 2 2.3 CAPEX 17 8 0 FY05 FY06 FY07 FY08 FY09 Highlights Business Drivers 9.6 mmt full year country network grain • Increased profit per tonne re
Slide 15: Ports
Ports FY09 FY08 Grain Exports Handled - mmt 6.0 Revenue 131 52 5.0 EBITDA 78 11 4.0 3.0 EBIT 65 (2) 4.7 5.3 5.2 2.0 CAPEX 7 5 1.0 1.0 1.0 0.0 FY05 FY06 FY07 FY08 FY09 Highlights 2.5 Non Grain Exports Handled - mmt • 1.1 mmt grain received from 2.0 ex-farm and other BHC’s 1.5 • Longer average storage
Slide 16: Trading
Trading FY09 FY08 30 Profit Before Tax - $ M Revenue 1,243 1,270 25 EBITDA 39 28 20 PBT 25 4 15 25 10 20 17 Highlights 14 5 • > 1.5 mmt total grain exports 4 • Total tonnes traded (all grains) similar 0 to last year FY05 FY06 FY07 FY08 FY09 • Earnings improved from ability to execute bulk wheat expo
Slide 17: Merchandise
Merchandise FY09 FY08 Revenue 73 89 EBITDA (23) 4 Business Drivers • Operating loss of $(23) M1 • Record decline in price for fertiliser and chemicals in late 2008 • $11.3 M inventory write down to market value of fertiliser and chemicals Strategic Review of Business • Strategic review of participat
Slide 18: Allied Mills
Allied Mills FY09 FY08 60 EBITDA - $ M Revenue 535 527 50 40 EBITDA 48 43 30 Equity profit 10 11 51.8 47.5 20 42.8 Net Asset 29.6 211 195 10 25.8 value 0 CAPEX 11 98 FY05 FY06 FY07 FY08 FY09 Note FY07 EBITDA includes one off sale of $3.9 million for asset sales Business Drivers • Margins reduced due
Slide 19: Transformation of GrainCorp
TRANSFORMATION OF GRAINCORP Grain Storage | Grain Logistics | Grain Trading | GrainCorp Malt | Allied Mills 19
Slide 20: Company Transformation
Company Transformation Adoption of the 2006 Strategic Plan and 2008 cost reduction initiatives led to >$20 million cost savings Increased NPAT / Tonnes received, stored and handled in FY 2008/09 Additional earnings from provision of rail services Provision of more services to more exporters
Slide 21: Liquidity and Market Capitalisation
Liquidity and Market Capitalisation 1,800 Market Capitalisation - Nov '08 to Nov '09 $12 GrainCorp ASX Trading History 12% AUD million 1,616 Nov '08 to Nov '0 1,600 18-Nov-08 18-Nov-09 $10 Daily volume traded (% of shares outstanding) Share price 10% 1,400 1,293 1,278 1,200 $8 8% 1,026 1,000 918 893
Slide 22: Acquisition of United Malt
ACQUISITION OF UNITED MALT Grain Storage | Grain Logistics | Grain Trading | GrainCorp Malt | Allied Mills 22
Slide 23: Forming an International Agribusiness
Forming an International Agribusiness The Acquisition transforms GrainCorp into an Australian based international agribusiness, with operations in Australia, the United States, Canada and the United Kingdom Australia Largest grain storage network on the east United Kingdom coast operating 7 bulk
Slide 24: A Strategic Fit
A Strategic Fit Storage and Logistics Grain Trading Grain Processing Existing GrainCorp Business • Grain infrastructure assets • Grain trader domestic and • Milling wheat for flour export bulk wheat, barley and other grains GrainCorp Malt • Grain infrastructure in • Barley procurement (and • Process
Slide 25: GrainCorp Malt Integration
GrainCorp Malt Integration Brand • Canada Malting Company, Great Western Malting, Barrett Burston Malting and Bairds Malt, and related business names will be retained, in recognition of the fact they are all well known and protection highly respected brands • To ensure we protect the inherent value
Slide 26: GrainCorp Malt Management Structure
GrainCorp Malt Management Structure • UMH renamed GrainCorp Malt • Will operate as a new Business Unit of GrainCorp, led by Jim Anderson • GrainCorp Malt businesses will be led by the present malt company Presidents GrainCorp Board Managing Director Mark Irwin GrainCorp GrainCorp CFO GrainCorp Malt
Slide 27: General Management Structure
General Management Structure • GrainCorp general management restructured to ensure effective strategic and operational leadership • The key change is bringing in Ports and Account Management into Storage and Logistics to create a full Australian supply chain business unit New business unit structure
Slide 28: Outlook
OUTLOOK Grain Storage | Grain Logistics | Grain Trading | GrainCorp Malt | Allied Mills 28
Slide 29: Outlook FY 2009/10
Outlook FY 2009/10 Storage and Logistics • YTD grain receivals 4.5 mmt • Country network grain receivals forecast – 8 to 9 mmt • Grain export elevation forecast – 3 to 4 mmt • Increased sale of rail service tonnage = lower ‘take or pay’ risk and returns Malt • Nov. 14th ’09 to Sept. 30th ’10 product
Slide 30: 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 s