Slide 1: HY14 Results
HY14 Results 15 May 2014 For personal use only
Slide 2: 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 3: Agenda & Contents
Agenda & Contents For personal use only • HY14 Results Highlights • HY14 Segment Performance • Balance Sheet and Capex • Additional Updates • Questions • Appendices 3
Slide 4: Diversified earnings support challenging period for grains businesses
Diversified earnings support challenging period for grains businesses For personal use only • HY14 earnings of $166M EBITDA(1) and $61M NPAT(2). • HY14 statutory NPAT of $50M after significant items(3). • Storage & Logistics – earnings impacted by below average carry-in, below normal receivals and c
Slide 5: Earnings profile delivering on corporate objectives
Earnings profile delivering on corporate objectives For personal use only EBITDA(1) NPAT(1) Fiscal 1H Fiscal 2H 500 Fiscal 1H Fiscal 2H 250 400 200 179 168 83 300 150 177 66 84 200 100 100 78 235 227 28 122 100 173 50 31 109 166 88 82 112 53 61 32 0 $M 0 $M FY09 FY10 FY11 FY12 FY13 FY14 FY09 FY10 FY
Slide 6: Consistent performance from processing businesses
Consistent performance from processing businesses For personal use only HY13 to HY14 Earnings Bridge(1) - $M 57 109 19 1 2 11 0 2 3 1 5 61 Lower Maintained Continued Terminals Managing Recent Lower tax volumes, volumes, high utilisation corporate capex crop profile significant capacity and feeds ove
Slide 7: Diversified earnings supporting ordinary dividend
Diversified earnings supporting ordinary dividend For personal use only Dividends per share Interim DPS 40 Interim Special DPS 15 5 20 5 20 15 15 15 15 DPS 0 (cents) HY09 HY10 HY11 HY12 HY13 HY14 • HY14 Interim Dividend: fully franked interim dividend of $0.15 per share • HY14 Dividend Dates: – Ex-d
Slide 8: Our values
For personal use only Our values Values 8
Slide 9: Driving change in safety culture
Driving change in safety culture For personal use only Lost Time Injury Frequency Rate(1) FY14 focus 16.0 • Reduce Significant Risks through 14.0 14.5 physical, system and process 12.0 12.4 11.7 11.9 improvements 10.0 10.7 • Make significant progress towards 8.0 7.3 OHS accreditation 6.0 4.0 • Drive
Slide 10: Segment Performance
For personal use only Segment Performance
Slide 11: Portfolio of grain businesses capture value along the grain chain
Portfolio of grain businesses capture value along the grain chain For personal use only Revenue EBITDA(1) $M HY14 HY13 HY14 HY13 Storage & Logistics 280 385 63 119 Marketing(2) 966 1,212 16 27 Malt(3) 507 461 57 55 Oils 476 462 36 33 Allied Mills(4) - - 4 5 Corporate Costs - - (10) (12) Eliminations
Slide 12: Storage & Logistics – lower volumes and crop profile weighted to southern zones
Storage & Logistics – lower volumes and crop profile weighted to southern zones For personal use only • Lower earnings due to lower volumes, lower carry-in $M HY14 HY13 and significant skew of grain production to southern Revenue 280 385 zones • Carry-in: 2.3mmt(1) (HY13: 4.3mmt) EBITDA 63 119 • Cou
Slide 13: Marketing – significant competition for grain in eastern Australia
Marketing – significant competition for grain in eastern Australia For personal use only • Earnings reflective of lower availability of $M HY14 HY13 grain and significant competition for Revenue 966 1,212 grain in eastern Australia EBITDA 16 27 • 3.5mmt delivered sales(1) (1.4mmt Interest expense(2)
Slide 14: Malt – continued high capacity utilisation
Malt – continued high capacity utilisation For personal use only • Sales of 0.62mmt $M HY14 HY13 • 1.28mmt sold for FY14 including Revenue 507 461 forward sales EBITDA(1) 57 55 • Continued high capacity utilisation EBIT(1) 35 37 above 90% Capital Expenditure 13 22 • Gamechanger initiatives on track
Slide 15: Oils – pressure on refined volumes, strategic initiatives on track
Oils – pressure on refined volumes, strategic initiatives on track For personal use only • Crushing & Refining: sales of 0.27mmt; $M HY14 HY13 slightly higher crushed volumes; pressure Revenue 476 462 on refined volumes and sales mix EBITDA 36 33 (expected to continue in 2H14) EBIT 24 22 • Liquid Te
Slide 16: Allied Mills – challenging milling market conditions
Allied Mills – challenging milling market conditions For personal use only $M (60%) JV Share HY14 HY13 • Contributions from value add product initiatives EBITDA 12 13 • Challenging milling market conditions Equity profit(1) 4 5 • To support value add product Shareholder loan interest 1 1 received st
Slide 17: Balance Sheet and Capex
Balance Sheet and Capex For personal use only
Slide 18: Strong and flexible balance sheet
Strong and flexible balance sheet For personal use only Core Debt – $M • HY14 Core Debt(1) of $422M Schill Malz acquisition Creation of GrainCorp Oils • Flexible balance sheet → FY14 Core Gearing of 19% (in line with Short-term 9 79 71 debt less Marketing strategic target of <25%), debt and Oils 132
Slide 19: Commodities inventory funded with specific commodity inventory facilities
Commodities inventory funded with specific commodity inventory facilities For personal use only Marketing and Oilseed funding Commodities inventory(1) - $M strategy Commodities inventory Short-term debt 829 • Marketing’s grain trading activities and 792 Oils’ oilseed and tallow positions are predomi
Slide 20: Capex supporting safety, network efficiencies and strategic initiatives
Capex supporting safety, network efficiencies and strategic initiatives For personal use only Capex(1) – $M Depreciation & Amortisation – $M Stay-in-business 141 119 Growth Depreciation 122 24 Amortisation 112 106 91 71 78 18 63 72 53 63 16 17 62 66 12 95 33 73 70 56 61 53 59 50 49 33 FY10 FY11 FY12
Slide 21: Additional Updates
For personal use only Additional Updates
Slide 22: Additional Updates
Additional Updates For personal use only CEO Search S&L Network Optimisation • CEO search is progressing well and continue to • Network improvement plan currently in expect announcement around the middle of the development. calendar year. • Approximately 90% of GrainCorp’s receivals are received int
Slide 23: Questions
For personal use only Questions
Slide 24: Appendix
For personal use only Appendix
Slide 25: Significant items
Significant items For personal use only Net $M Segment EBITDA D&A Tax NPAT Details Interest Underlying 166.1 (20.1) (61.4) (23.4) 61.2 Oils network Oils (15.5) - - 4.7 (10.8) Provisions for restructuring optimisation relating to oils network optimisation announced in February Takeover response Corpo
Slide 26: Grain volumes
Grain volumes For personal use only Volume driver (mmt) HY14 HY13 Comments Grain carry-in (1-Oct) 2.3 4.3 • Grain stored at start of period • HY13 carry-in below average of ~3mmt Country network receivals 7.6 9.7 • ~44% share of production(1) • Lower receivals versus prior year due to smaller crop a
Slide 27: Competitive landscape
Competitive landscape For personal use only Upcountry Storage Capacity Upcountry Storage GrainCorp ~20mmt Competitors Competitors ~10mmt On-farm ~10mmt Ports GrainCorp Port (all regulated) Total ~40mmt Competing Port (regulated) Production / Exports Competing Port (unregulated) Eastern Australia gra
Slide 28: Grains outlook – lower volumes, competitive landscape
Grains outlook – lower volumes, competitive landscape For personal use only Market fundamentals GrainCorp FY14 outlook • Eastern Australian crop production estimate of • Carry-in: 2.3mmt (FY13: 4.3mmt) 17.2mmt(1) (including 1.2mmt summer crop) • Country receivals: ~7.7mmt (FY13: 10.4mmt); • Crop pro
Slide 29: Processing outlook – well placed through strong competitive position
Processing outlook – well placed through strong competitive position For personal use only Market fundamentals GrainCorp FY14 outlook • Global barley crop production ~141mmt(1) • Forward sales of 1.28mmt YTD (compared to 130mmt in 2013) and good • Malt sales volume: ~1.28mmt quality in northern hemi
Slide 30: FY14 Earnings Guidance
FY14 Earnings Guidance For personal use only EBITDA NPAT • EBITDA: $275M – $315M • Underlying NPAT (before significant items): Guidance $80M – $100M • Statutory NPAT (after significant items): $60M – $80M • Excludes Marketing and Oils interest expense • Depreciation & Amortisation: ~$125M of ~$18M (