Slide 1: Investor Presentation - Financial Year Ended 30 September 2016
16 November 2016 The Manager For personal use only Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 GRAINCORP LIMITED: GNC INVESTOR PRESENTATION FINANCIAL YEAR ENDED 30 SEPTEMBER 2016 Please find attached the Investor Presentation relating to the financial year ended 30 Sept
Slide 2: 2016 Full Year Results
2016 Full Year Results 16 November 2016 For personal use only
Slide 3: 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
Slide 4: Agenda
For personal use only Agenda • Results Overview • Segment Performance • Balance Sheet & Capex • FY17 Outlook • Questions 3
Slide 5: Focus on safety is fundamental
Focus on safety is fundamental LOST TIME INJURY RECORDABLE INJURY For personal use only FREQUENCY RATE(1) FREQUENCY RATE(2) 11.9 10.7 38.8 36.1 7.0 21.6 3.8 13.9 2.7 11.3 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Safety People • 29% reduction in Lost Time Injury Frequency • Overall employee
Slide 6: Solid performance in challenging year
Solid performance in challenging year • Underlying EBITDA(1) $256M and underlying NPAT(2) $53M. For personal use only EBITDA BY SEGMENT • Statutory NPAT(3) of $31M, after significant items. FY16 – FY09(4) • Dividend: fully franked FY16 final dividend of 3.5 cents per share. FY16 • Overview: 2016 has
Slide 7: Effectiveness of diversification strategy evident in earnings profile
Effectiveness of diversification strategy evident in earnings profile For personal use only UNDERLYING EBITDA(1) ($M) UNDERLYING NPAT(1) ($M) Malt Oils Allied Mills (NPAT) Marketing (EBITDA) S&L 414 Fiscal 2H 395 Fiscal 1H 205 350 172 175 293 83 256 66 235 84 212 160 95 80 34 63 34 27 122 53 109 45
Slide 8: Dividend in line with policy
Dividend in line with policy For personal use only DIVIDENDS PER SHARE (DPS)(1) Ordinary DPS Special DPS 30 25 5 5 40 35 30 25 20 7.3 10 11 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 8yr avg(3) Payout 23% 74% 64% 68% 59% 48% 51% 48% 59% ratio(2) FY16 Dividend Dates • FY16 final dividend: fully franked
Slide 9: Higher earnings driven by Malt and Grains businesses
Higher earnings driven by Malt and Grains(1) businesses FY15 - FY16 EARNINGS BRIDGE(2) ($M) For personal use only 1 (1) 5 (6) 1 (12) 21 5 Higher In line (6) volumes, Lower debt with Similar lower port cost, higher Pressure on capex Higher throughput, commitments, debt levels, global crush program ea
Slide 10: Segment Performance
For personal use only Segment Performance
Slide 11: Malt – strong earnings, high capacity utilisation
Malt – strong earnings, high capacity utilisation For personal use only • Malt sales of 1.3mmt(2), capacity utilisation high $M FY16 FY15(1) 90s (%). Revenue 1,191 1,126 • Strategic initiatives successful in driving EBITDA 161 140 operational improvements from energy and water usage, water reduction
Slide 12: Oils – challenging year, completion of capital projects
Oils – challenging year, completion of capital projects For personal use only • Oilseeds: sales volumes of 0.33mmt(1). $M FY16 FY15 Improved 2H earnings; full year impacted by Revenue 924 933 weaker global crush margins – tighter supply, EBITDA 61 73 increased oilseed cost. • Foods: sales volumes of
Slide 13: Storage & Logistics – improved performance in low volume environment
Storage & Logistics – improved performance in low volume environment For personal use only $M FY16 FY15 • Carry-in: 1.6mmt (FY15: 1.9mmt). • Country receivals: 7.8mmt (FY15: 7.4mmt); Revenue 399 390 ~42% share of production (FY15: 42%)(1). EBITDA 48 43 • Exports: grain exports(2) of 3.0mmt (FY15: EB
Slide 14: Marketing – competitive global environment continued to be a challenge
Marketing – competitive global environment continued to be a challenge For personal use only • Challenging conditions – lower availability of $M FY16 FY15 grain, lower demand for East Coast Australian Revenue 1,939 1,859 (ECA) grain and strong competition from EBITDA 3 (2) alternative global supply
Slide 15: Allied Mills
Allied Mills For personal use only • Slightly improved performance on last year $M (60%) JV Share(1) FY16 FY15 with growing contribution from value-add EBITDA 26 25 product initiatives (e.g. frozen and par- Equity profit(1) 10 9 bake bakery products and pre mixes). Strategy remains focused on this a
Slide 16: Balance Sheet & Capex
For personal use only Capex Balance Sheet &
Slide 17: Increase in gearing in line with capital expenditure and seasonal turnover
Increase in gearing in line with capital expenditure and seasonal turnover For personal use only CORE DEBT(1) AND NET DEBT(2) ($M) 1,600 50% • Core debt at $721M(3) and net debt 1,400 at $872M(3). 40% 1,200 • Core debt gearing(4) at ~29% (or 1,000 30% ~24% excluding barley inventory) 800 and net deb
Slide 18: Strong and flexible balance sheet
Strong and flexible balance sheet CORE DEBT(1) ($M) For personal use only Short-term debt less 141 205 237 Marketing • Core debt increasing as expected and in and Oils 134 inventories line with implementation of strategic 71 89 79 initiatives, ahead of earnings uplift. 789 785 792 558 595 593 601 68
Slide 19: Commodities inventory funded with specific commodity inventory facilities
Commodities inventory funded with specific commodity inventory facilities For personal use only Supplemented short COMMODITIES INVENTORY(1) ($M) term debt with cash Marketing, Oils grain, oilseed and Malt barley inventory Short-term debt 900 829 792 799 800 739 708 700 577 574 600 519 498 500 387 38
Slide 20: Capital investment reducing from FY16 peak
Capital investment reducing from FY16 peak For personal use only CAPEX(1) ($M) DEPRECIATION & AMORTISATION ($M) 281 Depreciation Amortisation 143 Stay in Business Growth 136 236 127 119 34 34 30 24 167 209 91 141 168 78 18 122 112 17 96 71 109 63 95 97 103 63 73 61 59 70 71 68 72 49 FY11 FY12 FY13 F
Slide 21: Capital investment – major projects underway
Capital investment – major projects underway For personal use only Storage & Logistics Marketing Malt Oils Invested (1) Underway (2) Balance (3) 102 24 ~$148M(2) 39 (4) underway 43 44 15 21 25 11 6 5 42 82 ~$146M invested(1) Capital investments Marketing Malt Oils S&L S&L • GrainsConnect • Numurkah
Slide 22: FY17 Outlook
For personal use only FY17 Outlook
Slide 23: FY17 processing outlook
FY17 processing outlook For personal use only Market fundamentals GrainCorp FY17 outlook • Global barley crop production ~144mmt(1) • Forward sales of 1.2mmt YTD (FY16: 149mmt) • Continued high capacity utilisation, above • Continued growth in craft beer sector, albeit 90%, with malt sales ~1.3mmt M
Slide 24: FY17 grains outlook – above average eastern Australia crop production
FY17 grains outlook – above average eastern Australia crop production For personal use only Market fundamentals GrainCorp FY17 outlook • Eastern Australian winter crop production • Carry-in of 1.7mmt, well below average estimate of 20.6mmt(1), ~3.3mmt above Storage & Logistics • Year to date receiva
Slide 25: Questions
For personal use only Questions
Slide 26: Appendix
For personal use only Appendix
Slide 27: Revenue and earnings by business unit
Revenue and earnings by business unit For personal use only Revenue EBITDA(1) $M FY16 FY15 FY16 FY15 Malt(2) 1,191 1,126 161 140 Oils 924 933 61 73 Storage & Logistics 399 390 48 43 Marketing 1,939 1,859 3 (2) Allied Mills(3) - - 10 9 Corporate Costs - - (28) (27) Eliminations and other (295) (223)
Slide 28: FY16 significant items
FY16 significant items For personal use only Net $M Segment EBITDA D&A Interest Tax NPAT Details Underlying 255.5 (142.6) (38.2) (22.0) 52.7 Restructuring costs Oils, Allied Mills (23.6) 8.1 (15.5) Relating to Oils network optimisation and crushing expansion Impairment of assets S&L, Oils & Malt (6.
Slide 29: Grain volumes FY15 and FY16
Grain volumes FY15 and FY16 For personal use only Volume driver (mmt) FY15 FY16 Comments Eastern Australian grain 17.5 18.6 • Includes wheat, barley, canola, chickpeas and sorghum production(1) Grain carry-in (1 Oct) 1.9 1.6 • Carry-in below average of ~2.5mmt • Limited early season export program C
Slide 30: Strategic initiatives implementation and associated capex
Strategic initiatives implementation and associated capex For personal use only Business Unit Project FY14 FY15 FY16 FY17 FY18 Integration Oils refining/packing relocation Oils Bulk Liquid Terminals expansion Port Kembla Terminal development Numurkah crush expansion Project operational excellence Ma
Slide 31: Upcoming events
Upcoming events For personal use only Date Event / Milestone Location Pullman Hotel - 24 February 2017 FY16 AGM Sydney 30