Ricegrowers Ltd. Class B · ASX:SGLLV
Ricegrowers Ltd. Class B — Shareholder Meeting (August 2013)
49 slides from Ricegrowers Ltd. Class B's shareholder meeting presentation, Aug 23, 2013
Slide 1: Chief Executive Officer's Presentation: Investing for Growth
2013 SunRice AGM Chief Executive Officer’s Presentation: Investing for Growth Rob Gordon 23 August 2013
Slide 2: Agenda
Agenda • Group highlights • Marketing update • Crop Year 12 performance • Global rice market outlook • Business outlook • Questions
Slide 3: Group Highlights and Marketing Update
Group Highlights and Marketing Update
Slide 4: Third consecutive year of full production
Third consecutive year of full production • Largest planting since C02 • AGS staff received a C13 crop of 1.16 million tonnes • Across all depots, more paddy was received in April 2013 than in any previous April on record • Coleambally Mill reinstated in an overflow capacity 4
Slide 5: Domestic category innovation
Domestic category innovation • 30 new products launched • Volume increases in Core Rice, Microwave Rice, Ready-to-go Meals, Rice Cakes and Pickled Vegetables • Reintroduction of Australian Koshihikari and Jasmine rice • Launch of new consumer campaign ‘Hundreds of Grains. Millions of Possibilities’
Slide 6: Global market strength
Global market strength • Outstanding sales growth in the Pacific • Solid expansion into key Asian markets, including SBS and OMA tenders • Sunwhite tracked strongly across the Middle East, despite aggressive competition • All delivered against a backdrop of softening international commodity prices a
Slide 7: Infrastructure investment program launched
Infrastructure investment program launched • End-to-end supply chain review and focus on strategic investment • Capital plan of $18 million, with $6 million already invested in Australian operations • Capital investments were also made in SunFoods and Riviana to increase efficiencies • $6.5m upgrade
Slide 8: Investing in our brands
Investing in our brands • Consumer insights research project progressed • Findings will drive future product innovation, brand strategy and consumer communications • Research has already informed new advertising campaign and on-shelf product innovation due next month 8
Slide 9: Everyday Tier: "Everyday Essentials"
Everyday Tier: “Everyday Essentials” 9
Slide 10: Functional Tier: "Health and Wellbeing"
Functional Tier: “Health and Wellbeing” 10
Slide 11: Specialty Tier: "Gourmet"
Specialty Tier: “Gourmet” 11
Slide 12: Major advertising campaign: 'Hundreds of Grains. Millions of Possibilities'
Major advertising campaign: ‘Hundreds of Grains. Millions of Possibilities’ 12
Slide 13: 13
13
Slide 14: Investing in our people
Investing in our people • High Performance Organisation initiative to increase collaboration and deliver maximum return on investment for growth • Project Management Office established • Employee branding project to help identify and communicate what makes SunRice an employer of choice
Slide 15: Crop Year 12 Performance
Crop Year 12 Performance The Rice Food Experts
Slide 16: Australian Rice Milling and Marketing
Australian Rice Milling and Marketing • Sales revenue of $337.7M (up 5.3%) • Contributed NPBT was fully returned to the pool • Volume growth across domestic business, including foodservice and some export markets 16
Slide 17: Global Business
Global Business • Sales revenue of $386.8M (up 10.5%) • Contributed NPBT of $22.6M (up 70%) • Increase in profits in global rice trading business • Volume and market share improvements across our major Pacific markets • Impairments taken in SunFoods following return of export milling to Australian o
Slide 18: Riviana Foods
Riviana Foods • Sales revenue of $147.9M (up 1.2%) • Contributed NPBT of $9.7M (up 1.0%) • Business faced unprecedented competition and rising operational costs • Underlying result is less favourable when abnormals from 2011/12 are considered
Slide 19: CopRice
CopRice • Sales revenue of $109.9M (up 12.1%) • Contributed NPBT of $8.7M (no change from last year) • 14% growth in speciality sales and 6% growth in bulk sales • Volume growth achieved despite difficult dairy industry conditions • Awarded Supplier of the Year for Animal Nutrition
Slide 20: Other businesses
Other businesses • Sales revenue of $80.0M (down 3%) • Contributed NPBT of $17M (up 58.6%) • Uplift in Specialty Rice Foods, including flour and retort • Substantial improvement in interest income 20
Slide 21: Revenue
Revenue Revenue from External Customers $m $80 $110 $338 $148 $387 Australian Rice Global Riviana CopRice All Other 21
Slide 22: Contributed Net Profit Before Tax
Contributed Net Profit Before Tax Contributed NPBT $m $0 $17 $23 $9 $10 Australian Rice Global Riviana CopRice All Other 22
Slide 23: Revenue and Net Profit After Tax
Revenue and Net Profit After Tax $1068 $1000 $817 $809 $35 $36 $34 $13 $12 C09 C10 C11 C12 C09 C10 C11 C12 Revenue (millions) Net Profit After Tax (millions) Note - Consolidated result before minorities 23
Slide 24: Underlying Profit Performance
Underlying Profit Performance Net debt and gearing slides to come • Underlying net profit before tax of $62 million – up 44% on 2011/12 24
Slide 25: Group Underlying Profit 2012 to 2013
Group Underlying Profit 2012 to 2013 FY 2012 FY 2013 25
Slide 26: Paddy price
Paddy price • Increased C12 medium grain paddy return of $317.34 per tonne • Up 15% on last year’s pool performance • Up 24% on last year’s price paid to growers • More than $300 million paid out to our growers
Slide 27: Year-on-year paddy price
Year-on-year paddy price 275 255 | a Fj 22 20 $/t C11Paddy Paddy (C11 Paddy Sales Price Volume mix Price Retention Price before Retention 317 SG&A _ Distribution Operations Other (C12 Paddy / Supply Price Chain The Rice Food Experts
Slide 28: Dividend
Dividend • Fully franked dividend of 23 cents per B Class Share • 28% increase on last year’s dividend and a record for our company • $12.8 million paid to B Class shareholders
Slide 29: Debt and gearing
Debt and gearing • Gearing at year end fell from 66% in 2011/12 to 61% in 2012/13 • Average gearing across the year fell from 73% in 2011/12 to 43% in 2012/13 29
Slide 30: Average gearing
Average gearing 80% (12%) 70% (12%) 60% (3%) 3% (1%) (5%) 50% 40% 30% 20% 10% 73% 48% 43% 0%
Slide 31: Borrowings v Cash / 2013 v 2012
Borrowings v Cash / 2013 v 2012 31
Slide 32: Global Rice Market Outlook
Global Rice Market Outlook
Slide 33: Global market outlook: supply dynamics
Global market outlook: supply dynamics Medium grain: • Egyptian political instability: off again/on again export ban • Strong Californian and Australian crops impacting price outlook Long grain: • Record production • Record stocks 33
Slide 34: Global market outlook: demand dynamics
Global market outlook: demand dynamics Medium grain: • Competition from Egypt in medium grain markets, including the Middle East • China remains closed, although Government efforts continue Long grain: • China: top importer in 2012 34
Slide 35: US #1 Medium Grain Milled Rice price
US$ /mt US #1 Medium Grain Milled Rice - 4% broken $1,000 $950 $900 $850 C10 C11 C12 $800 $750 $700 $650 Average Creed Price Average Creed Price $600 $550 $500 Jan 11 Jan 12 Jan 13 Jan 14 Sep 10 Sep 11 Sep 12 Sep 13 May 10 May 11 May 12 May 13 Mar 11 Mar 12 Mar 13 Mar 14 Jul 10 Jul 11 Jul 12 Jul 13
Slide 36: Business Outlook
Business Outlook The Rice Food Experts
Slide 37: Business outlook
Business outlook • Foreign exchange • Outlook for pool business • Outlook for profit contributing businesses • Outlook for SunRice Group 37
Slide 38: A$ v US$ - May 12 to Aug 13
A$ v US$ - May 12 to Aug 13 1.10 May 2013 May 2012 1.0352 1.05 1.0436 Average Rate achieved C12 1.00 0.95 Aug 2013 0.9174 Commence hedging for the next crop in 0.90 October 0.85 38
Slide 39: Kina v US$ - May 12 to Aug 13
Kina v US$ - May 12 to Aug 13 0.50 0.49 0.48 0.47 Average Rate C12 May 2012 0.46 0.4786 0.45 May 2013 0.4512 0.44 0.43 0.42 Aug 2013 0.4244 0.41 0.40 39
Slide 40: A$ v Euro - May 12 to Aug 13
A$ v Euro - May 12 to Aug 13 0.90 0.85 May 2013 0.7896 0.80 Average Rate C12 0.75 May 2012 0.7883 0.70 Aug 2013 0.65 0.6892 0.60 40
Slide 41: C13 Business Outlook: Australian Rice Milling and Marketing
C13 Business Outlook: Australian Rice Milling and Marketing • Weakening AUD benefits the pool (each 1c movement = $0.9m or approx $0.78 per paddy tonne) • Trading well in major markets in the US, Middle East, Pacific and Australasia • Global prices likely to soften in second half 41
Slide 42: C13 Business Outlook: Australian Rice Milling and Marketing cont.
C13 Business Outlook: Australian Rice Milling and Marketing cont. Indexed Milling Yields C03 = 100 • Milling yields for C13 crop are 15% lower than C13 Est 83.6 C12 normal C11 99.8 104.7 • Operational footprint at C10 104.0 capacity C09 100.8 • Higher costs expected to C08 C07 93.1 98.0 offset curre
Slide 43: C13 Business Outlook: Riviana Foods
C13 Business Outlook: Riviana Foods • Net importer and trading company • Negatively impacted by lower AUD • Operations consolidated to lower costs • Pushing price, however margin pressures will remain throughout C13 43
Slide 44: C13 Business Outlook: Trukai Industries
C13 Business Outlook: Trukai Industries • Difficult economic outlook locally • Price sensitive market • Falling Kina impacts in- market cost of goods and SunRice receivables • Significant margin pressure 44
Slide 45: C13 Business Outlook: SunFoods
C13 Business Outlook: SunFoods • SunFoods yet to establish itself as a standalone business post drought • Remains a strategic investment, despite impairments • Significant work to be done over the next 12 months 45
Slide 46: C13 Business Outlook: CopRice
C13 Business Outlook: CopRice • Unaffected by the FX • Impacts of good pasture growth and higher grain prices being offset by volume • Trading expected to be in line with prior year 46
Slide 47: SunRice Group Outlook
SunRice Group Outlook • 2013/14 likely to be a tougher trading environment • C13 crop issues being well managed, but will offset currency gains in the pool business • Profit businesses under pressure due to foreign exchange • Trading in first quarter ahead of last year • Profit for the half year ant
Slide 48: Investing for growth
Investing for growth 1 Population growth increasing the demand for food, 5 but per capita consumption flat as the emerging Urbanisation increasing the demand for Consumpti middle classes diversity their diets Convenience Convenience Increasing commercialisation of agriculture and Growing pop
Slide 49: Questions
Questions The Rice Food Experts
SunRice (Ricegrowers Limited) — Shareholder Meeting (August 2013) on 6ix