Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — Investor Presentation (September 2014)
24 slides from Graincorp Limited Class A's investor presentation, Sep 1, 2014
Slide 1: Investor Presentation cover letter to ASX
1 September 2014 For personal use only The Manager Company Announcements Office ASX Limited 20 Bridge Street SYDNEY NSW 2000 Via Market Announcements Platform Dear Sir/Madam, GrainCorp Limited (ASX: GNC) Investor Presentation The attached Investor Presentation will be used by GrainCorp for the purpo
Slide 2: Investor Presentation September 2014
Investor Presentation September 2014 For personal use only
Slide 3: 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
Slide 4: Delivering on our corporate objectives
Delivering on our corporate objectives For personal use only 1 2 3 Improving Managing Delivering returns variability growth Return on Equity % EBITDA by segment(1) EBITDA - $M 414 395 350 Allied 6% 212 Oils 160 17% S&L 41% Malt 23% Dividends – cents per share Marketing 13% Majority of EBITDA growth
Slide 5: Strength of our integrated business model
Strength of our integrated business model For personal use only Global grains traded(1) • Wheat, barley, canola → representing Other 35% of global traded grains and 8% Wheat 30% oilseeds Three core Corn grains • Focus on “drier climate” grains where 23% Barley we have a comparative advantage 3% Cano
Slide 6: Diversification strategy and targeted investment to manage variability and deliver growth
Diversification strategy and targeted investment to manage For personal use only variability and deliver growth Retrospective proforma EBITDA(1) ($M) Post 2008 single Earnings initiatives wheat desk included progressively removal from FY13 Storage & Logistics(2) Marketing(3) Majority of EBITDA Malt
Slide 7: Our values and focus on safety
Our values and focus on safety For personal use only Values Safety Performance – LTIFR(1) • Rolling 12 month average LTIFR(1) 43% lower than same time last year (as at end March) • Lead indicators focusing on near miss reporting, line leadership reviews and significant risk reviews are improving for
Slide 8: GrainCorp journey
GrainCorp journey For personal use only 2008 2009 2010 2011 2012 2012 – 2016 Shareholding Creation of Malt Creation of Strategic structure and market Malt acquisition GrainCorp Malt acquisitions GrainCorp Oils initiatives deregulation • Removal of Grain • Acquisition of • Acquisition of • Acquisitio
Slide 9: Grain storage and logistics assets and capabilities
Grain storage and logistics assets and capabilities For personal use only Our eastern Australia grain network Assets and capabilities • Project Regeneration announced June 2014 focussed investment to reduce complexity and better serve customer – targeting $5/t reduced rail costs • Investment in ne
Slide 10: Global portfolio of grain processing and complementary facilities
Global portfolio of grain processing and complementary facilities For personal use only • Produce ~35% of Australia’s malt • Produce ~35% of Australia's flour(1) • Produce ~40% of Australia’s canola oil and ~40% of Australasia’s refined edible oil • Import and export ~40% of Australasia’s edible oil
Slide 11: Strategic initiatives projects announced and underway
Strategic initiatives projects announced and underway For personal use only Earnings growth Gamechangers Asset Optimisation Port Flexibility Project Regeneration(1) Reshape Localised Oils network 3 Year Port Storage & Logistics country cluster optimisation Protocol network operation End-to-end Bul
Slide 12: 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 141 119 122 112 106 91 78 72 62 66 • Stay-in-business capex increased from FY12 due to inclusion of Oils • Growth capex reflective of investment to progress gr
Slide 13: Strong and flexible balance sheet
Strong and flexible balance sheet For personal use only Core Debt – $M GrainCorp Oils acquisition Schill Malz acquisition Short-term 9 debt less Marketing and Oils inventories 26 43 Long-term debt Cash FY12 FY11 HY12 FY12 HY13(4) FY13 HY14 Pro forma(3) 9 218 16 320 415 411 422 Core Debt(1) 1% 13% 1%
Slide 14: Other Updates
Other Updates For personal use only CEO Announcement Ports Flexibility • Announcement of Mark Palmquist as Managing • Ports mandatory code of conduct expected to be Director and CEO in August 2014. released by the Department of Agriculture in • Commencing 1 October 2014. September 2014. • GrainCorp
Slide 15: Questions
For personal use only Questions
Slide 16: Appendices
For personal use only Appendices
Slide 17: Global exposure to attractive grain industry fundamentals
Global exposure to attractive grain industry fundamentals For personal use only Global grain demand Global malt demand Global canola oil demand • Global grain trade has • Global malt export trade • Australian canola oil doubled in the past 40 has doubled in the past 40 exports have trebled in the ye
Slide 18: Origination advantages to supply global demand growth markets
Origination advantages to supply global demand growth markets For personal use only Wheat Imports to 2050(1) Demand growth in proximate regions Current wheat imports (mmt) Wheat import growth to 2050 (mmt) • Australia has freight advantages to import- Wheat import growth to 2050 (%) dependent and gr
Slide 19: Project Regeneration – Overview
Project Regeneration – Overview For personal use only • Additional $200m(1) investment in the Storage & Logistics network over three years – upgrade of rail capability at primary sites and 3 new sites Project Overview • Focus on ~180 upcountry receival sites with storage capacity of ~20mmt • Efficie
Slide 20: Reducing supply chain cost
Reducing supply chain cost For personal use only 1. Reshaping the country network 2. Localised cluster operations Challenge Response Costly supply chain Reconfigure the network to ~180 sites • ~180 sites receive 90% of all delivered grain • Primary sites are export focused on rail • Long tail of hig
Slide 21: Reducing supply chain complexity
Reducing supply chain complexity For personal use only 3. End-to-end export logistics offering 4. Rail Loading upgrades Challenge Response Complex supply chain Upgrading rail capability at 68 primary sites • Fragmented and inefficient logistics • 3 new primary sites grain lost to road and reduced
Slide 22: Network and operating model
Network and operating model For personal use only Our eastern Australia grain network Network Clusters & “ExportDirect” • Buyers can compete for export or domestic grain at any site • Swapping grain between sites to: maximise export rail task from primary sites move rail or road grain from the m
Slide 23: Rail capability investment
Rail capability investment For personal use only Investment in Primary sites New Sites Greenfield Brownfield Rail Siding • Emerald area Modular assets Update assets Track owner support • Dalby area 1. Rail bin loaders • Speed elevators required • Wyalong area 2. Fast elevators • Convert bins • Sidin
Slide 24: Eastern Australia competitive landscape
Eastern Australia 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) Eas