Slide 1: Investor Presentation for the Financial Year Ended 30 September 2013
14 November 2013 The Manager For personal use only Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 GRAINCORP LIMITED: GNC INVESTOR PRESENTATION FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2013 Please find attached the Investor Presentation relating to the financial year ended
Slide 2: FY13 Results and Strategy Update
FY13 Results and Strategy Update 14 November 2013 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
Agenda For personal use only FY13 Results Strategy Update ADM Offer • Highlights • Gamechangers • Overview • Segment • Asset Optimisation • Acceptances and Performance • Port Flexibility Relevant Interest • Balance Sheet and • Next Steps Capex • Outlook 3
Slide 5: Strong earnings due to strong grain volumes and diversification
Strong earnings due to strong grain volumes and diversification For personal use only • Earnings of $395M EBITDA(1) (down 4%) and $175M NPAT(2) (down 15%) from strong grain volumes and successful diversification. • Statutory NPAT of $141M after significant items(3). • Storage & Logistics – strong pe
Slide 6: Earnings profile delivering on corporate objectives
Earnings profile delivering on corporate objectives For personal use only EBITDA(1) NPAT(1) Fiscal 1H Fiscal 2H Fiscal 1H Fiscal 2H 500 250 400 200 179 168 83 300 150 177 66 84 200 100 100 79 235 227 28 122 100 173 50 31 109 88 112 53 82 32 0 $M 0 $M FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13
Slide 7: Diversified earnings supporting higher ordinary dividend
Diversified earnings supporting higher ordinary dividend For personal use only Dividends per share • FY13 Final Dividend: Fully franked final dividend Ordinary DPS Special DPS of $0.20 per share 80 • FY13 Final Dividend Dates: 60 • Ex-dividend date: 26 November 2013 • Record date: 2 December 2013 30
Slide 8: Diversified business and more 'normal' receivals
Diversified business and more ‘normal’ receivals For personal use only FY12 to FY13 Earnings Bridge(1) - $M 2 1 71 28 25 Benefit of 8 75 strategic acquisitions 9 205 16 175 Lower receivals, Oils inclusion Higher debt Lower Sustained Strong More significant performance, and recent post Oils earnings
Slide 9: Safety & Health, Environment & People
Safety & Health, Environment & People For personal use only Safety & Health Environment People • Achieved a 10.2% reduction in • Reduced hexane emissions in • Sustained engagement across lost time injury frequency vent air from the Numurkah the business at 60% rate(1), moving from 11.9 to solvent ex
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 FY13 FY12 FY13 FY12 Storage & Logistics 655 805 179 250 Marketing(2) 2,169 1,891 54 63 Malt(3) 977 945 101 117 Oils(4) 962 - 75 - Allied Mills(5) - - 12 10 Corporate Costs - - (26) (26) Elimi
Slide 12: Storage & Logistics – strong earnings with significant exports and carry-in
Storage & Logistics – strong earnings with significant exports and carry-in For personal use only • Strong earnings from significant grain export $M FY13 FY12 program and higher than average carry-in: Revenue 655 805 • Carry-in: higher than average at 4.3mmt(1) (6.0mmt in prior year) EBITDA 179 250
Slide 13: Marketing – sustained performance
Marketing – sustained performance For personal use only • Earnings reflective of 17% lower $M FY13 FY12 eastern Australian grain production Revenue 2,169 1,891 volumes EBITDA 54 63 • 6.1mmt delivered sales(1) Interest expense(2) (17) (22) • 2.0mmt domestic, 4.1mmt export and PBTDA(2) 37 41 internati
Slide 14: Malt – continued high capacity utilisation
Malt – continued high capacity utilisation For personal use only • Sales of 1.28mmt $M FY13 FY12 • Earnings reflective of continued high Revenue 977 945 capacity utilisation above 90% with EBITDA(1) 101 117 margins in line with expectations EBIT(1) 62 81 • Effective margin management but lower Capit
Slide 15: Oils – strong earnings across crushing, refining and terminals
Oils – strong earnings across crushing, refining and terminals For personal use only $M FY13 FY12(1) • Crushing & Refining: consistent sales of 0.55mmt Revenue 962 1,115 • Liquid Terminals: continued high EBITDA 75 63 capacity utilisation of ~230K m3 of EBIT 50 42 storage and progress on asset Capit
Slide 16: Allied Mills – improved earnings and capacity replacement on track
Allied Mills – improved earnings and capacity replacement on track For personal use only $M (60%) JV Share FY13 FY12 • Improved earnings from value add product initiatives (eg frozen bakery EBITDA 27 25 products) Equity profit(1) 12 10 • Completed new Tennyson mill Shareholder loan interest 1.0 1.3
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 • FY13 Core Debt(1) of $411M Schill Malz acquisition Creation of • Flexible balance sheet → FY13 Core GrainCorp Oils 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 • Marketing’s grain trading activities and 572 577 Oil’s oilseed and tallow positions are 528 519
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 141 119 Stay-in-business Depreciation 122 Growth Amortisation 24 112 106 91 71 78 18 63 72 53 63 17 16 42 2 95 32 73 3 70 56 61 53 59 49 40 29 FY09 FY10 FY11 F
Slide 21: FY14 Outlook
For personal use only FY14 Outlook
Slide 22: Grains outlook – lower volumes, lower margins
Grains outlook – lower volumes, lower margins For personal use only Market fundamentals GrainCorp FY14 outlook • Most recent Eastern Australian crop production • Lower than average carry-in of 2.3mmt estimate of 17.4mmt(1) (18.3mmt(2) in prior (4.3mmt in FY13; 6.0mmt FY12) year) • Given lower produc
Slide 23: 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 1.1mmt YTD on track (compared to 130mmt in 2013) and good • Sales volumes expected to be consistent with
Slide 24: Strategy Update
For personal use only Strategy Update
Slide 25: Earnings growth initiatives targeting ~$110M EBITDA by FY16
Earnings growth initiatives targeting ~$110M EBITDA by FY16 For personal use only Gamechangers Asset Optimisation Port Flexibility Oils Synergies & Storage & Logistics 3 Year Port Protocol Optimisation Ports & Terminals Marketing Ports Code of Conduct Growth & Efficiencies Continuous Malt Improvemen
Slide 26: Earnings growth initiatives and capex requirements
Earnings growth initiatives and capex requirements For personal use only Incremental underlying EBITDA by FY16 and Capex from FY13 to FY16 ($M) 20 110 20 Oils 25 Malt 14 45 Marketing(2) 12 20 Storage & Logistics Storage & Marketing Malt Total Oils Port & Country Port Cumulative Logistics Game- optim
Slide 27: Gamechangers
Gamechangers For personal use only Storage & Logistics Marketing Malt Improved customer service • Global trading and risk • Port of Vancouver project • Improved country site efficiency management platform completed with new through 24 mobile grain successfully deployed in speciality capacity on line
Slide 28: Asset Optimisation & Port Flexibility
Asset Optimisation & Port Flexibility For personal use only Oils Ports & Country Port Flexibility Capture Synergies Bulk liquid terminals 3 Year Port Protocol • Achieved FY13 synergies target of opportunities • New port protocol for bulk export $4.0 million • Capacity expansion at Fremantle grain ag
Slide 29: Recommended Offer
For personal use only Recommended Offer
Slide 30: Recommended offer
Recommended offer Recommended Offer Value and Premium For personal use only Formal Documentation Total value to shareholders of $13.20 comprising: • Bidder’s Statement and Target’s Statement were sent • $12.20 per share in cash to shareholders in July 2013 • Permitted Dividends totalling $1.00 per s
Slide 31: Questions
For personal use only Questions
Slide 32: Appendix
For personal use only Appendix
Slide 33: Significant items
Significant items For personal use only Net $M Segment EBITDA D&A Tax NPAT Details Interest Underlying 395 (39) (119) (62) 175 GrainCorp Oils Corporate (19.3) - - 0.9 (18.4) Stamp duty of $13.5 million and acquisition and / Oils advisory and integration costs integration costs of $4.9 million in rel
Slide 34: Grain volumes
Grain volumes For personal use only Volume driver (mmt) FY13 FY12 Comments Grain carry-in (1-Oct) 4.3 6.0 • Grain stored at start of period • FY13 carry-in above average of 3mmt • Higher FY12 carry-in due to larger FY11 crop Country network receivals 10.4 12.2 • ~55% share of crop production(1) • Lo
Slide 35: GrainCorp Oils key drivers
GrainCorp Oils key drivers For personal use only Crushing Refining • Capacity utilisation • Capacity utilisation • Gross margin and commodity • Gross margin and commodity management management • Crush process cost • Refining process cost • Product mix Combined sales volumes (crude oil, meal, refined
Slide 36: GrainCorp is Australia's leading agribusiness
GrainCorp is Australia’s leading agribusiness For personal use only Integrated Business Model with an international “end-to-end” grain supply chain connecting consumers to growers Unique portfolio of local storage and logistics assets and local and international downstream processing assets