Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — H1 2009 Earnings Presentation
27 slides from Graincorp Limited Class A's earnings presentation, May 18, 2009
Slide 1: GrainCorp 2009 Half Year Results Briefing
18 May 2009 GRAINCORP 2009 HALF YEAR RESULTS BRIEFING Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 1
Slide 2: Financial Results at 31 March 2009
Financial Results at 31 March 2009 Revenue Up by $52 M Results HY08 HY09 $ million $ million EBITDA Up by $50 M Revenue 806 858 EBITDA 32 82 NPAT Up to $32 M Net profit / (loss) (6) 32 after Tax Free Cash flow 2 (34) 61 Gearing1 Down to 48% Key financial results show the transformation of GrainCorp
Slide 3: Transformation of GrainCorp
Transformation of GrainCorp Commenced in 2006 with adoption of new strategic plan • $20 million of cost savings • Industry structural changes including removal of the bulk wheat export monopoly • New revenue from bulk wheat exports and rail services • Efficiencies from better receival site to port s
Slide 4: Business Drivers at 31 March 2009
Business Drivers at 31 March 2009 Carry-in Up by 1.0 mmt HY08 HY09 mmt mmt Receivals Up by 4.2 mmt Grain carry-in 1.2 2.2 Grain receivals 4.6 8.8 Grain Exports Up by 1.4 mmt Domestic out load 2.0 2.3 Grain exports 0.5 1.9 Grain carry out 4.0 7.2 Return to average or above average Non-grain exports 1
Slide 5: Key Financial Indicators at 31 March 2009
Key Financial Indicators at 31 March 2009 EBITDA - $ M NPAT - $ M 80 60 40 30 40 82 20 32 20 10 0 0 -10 HY 05 HY 06 HY 07 HY 08 HY 09 HY 05 HY 06 HY 07 HY 08 HY 09 OPERATING CASH FLOW - $ M CAPEX - $ M 80 60 40 40 80 30 20 20 10 20 0 0 -20 HY 05 HY 06 HY 07 HY 08 HY 09 HY 05 HY 06 HY 07 HY 08 HY 09
Slide 6: Earnings Bridge - HY08 to HY09
Earnings Bridge - HY08 to HY09 4.9 (14.3) 50.0 7.6 (14.3) 26.1 40.0 4.1 (1.4) 32.3 30.0 26.1 20.0 10.0 (6.5) 0.0 (8.0) Corporate Office & Allied Mills Equity H1 07/08 NPAT H1 08/09 NPAT Trading EBITDA Ports EBITDA Merchandise S&L EBITDA Income Tax Other EBIT Interest EBITDA Profit Grain Storage | Su
Slide 7: Balance Sheet
Balance Sheet Comments HY08 HY09 $ million $ million • Current borrowings largely Cash $45 $12 secured against inventory Inventories/Trade Debtors $640 $572 • Inventory and Trade Debtors Other current assets $74 $61 lower due to lower grain Non current assets $634 $636 prices Total assets $1,393 $1,
Slide 8: Debt Profile
Debt Profile • Debt structure 700 600 – Non current - $223 M 500 – Current - $351 M 400 • Non Current (core long term) 300 debt matures in 2011 200 • Current (Working Capital and 100 Inventory Funding) varies with 0 HY05 FY05 HY06 FY06 HY07 FY07 HY08 FY08 HY09 grain volumes / price and is Non Curren
Slide 9: Business Unit Performance
BUSINESS UNIT PERFORMANCE Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 9
Slide 10: Performance by Business Unit
Performance by Business Unit Business Unit HY08 HY09 HY08 HY09 Revenue $ million 1 Revenue1 EBITDA EBITDA Storage & Logistics 65 159 15 41 Trading 2 683 636 18 22 Ports 24 40 3 30 Merchandise 3 33 22 2 (12) Allied Mills 4 - - 5 4 Corporate, Head Office and Other 5 1 1 (11) 6 (3) Total 806 858 32 82
Slide 11: Storage and Logistics
Storage and Logistics HY08 HY09 Grain Receivals - mmt Carry in 1.2 mmt 2.2 mmt 14.0 Revenue $65 M $159 M 12.0 10.0 EBITDA $15 M $41 M 8.0 6.0 EBIT $3 M $30 M 4.0 2.0 CAPEX $10 M $12 M 0.0 2005 2006 2007 2008 HY 09 • Half year receival total 8.8 mmt Business Drivers • YTD receival 9.1 mmt – 8.15 mmt
Slide 12: Ports
Ports HY08 HY09 Grain Export Handled - mmt Revenue $24 M $40 M 3.0 EBITDA $3 M $30 M 2.5 2.0 EBIT $(2) M $24 M 1.5 CAPEX $2 M $3 M 1.0 0.5 • Better price signals for grain storage at 0.0 terminals HY 05 HY 06 HY 07 HY 08 HY 09 • Woodchip export demand reduced by fall in global paper demand Non Grain
Slide 13: Trading
Trading HY08 HY09 Revenue $683 M $636 M Profit Before Tax - $ M EBITDA $18 M $22 M 16.0 PBT $5 M $14 M 14.0 12.0 • Result demonstrates positive impact of 10.0 entry this year into bulk wheat export 8.0 market 6.0 • Hunter Grain soybean trading, systems 4.0 2.0 and process now integrated 0.0 • Good w
Slide 14: Merchandise
Merchandise HY08 HY09 Revenue $33 M $22 M EBITDA $2 M $(12) M • Record decline in price and demand for fertiliser and chemicals in late 2008 • 2009 / 10 cropping season indicates average consumption of inputs in Northern NSW and Queensland • Inventory write down to market value – $5.8 M Fertiliser –
Slide 15: Allied Mills
Allied Mills HY08 HY09 EBITDA - $ M Revenue $248 M $275 M 25.0 EBITDA $20 M $18 M 20.0 Equity profit $5 M $4 M Net Asset 15.0 $186 M $201 M value CAPEX $19 M $7 M 10.0 • Margins reduced due to mill 5.0 commissioning and final Albury and Summer Hill shutdown transition 0.0 • Frozen dough manufacturin
Slide 16: GrainCorp Transformation
GRAINCORP TRANSFORMATION Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 16
Slide 17: Transformation of GrainCorp
Transformation of GrainCorp Commenced in 2006 with adoption of new strategic plan In the last 6 months • Significant internal restructure of business units and senior management to achieve clearer customer focus • Hunter Grain fully integrated into Trading • Successfully became a leading participant
Slide 18: FY 2009 Outlook
FY 2009 OUTLOOK Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 18
Slide 19: Outlook FY09
Outlook FY09 Estimated receivals FY09 9.2 to 9.4 mmt Estimated exports handled FY09 > 4.0 mmt HY 09 NPAT $32.3 M FY 09 NPAT range $37 to $42 M Free cash flow range $65 to $70 M Dividend • No interim dividend declared • Full year dividend for FY09 will be considered by the Board at the end of the fin
Slide 20: NPAT Forecast Sensitivity
NPAT Forecast Sensitivity • Trading – Guidance assumes costs covered for remainder of year – Higher than normal market volatility may impact NPAT • Ports – 3.9 to 4.4 mmt grain shipments will deliver NPAT within guidance • Storage and Logistics – Receival of 9.2 to 9.4 mmt will deliver NPAT within g
Slide 21: Appendix
APPENDIX Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 21
Slide 22: Transformation - Trading Growth
Transformation - Trading Growth • Removal of the bulk wheat export monopoly in July 2008 has created new revenue opportunities – Exporting wheat in bulk in own right – Accumulation of grain on behalf of exporters – Build on Supply Chain strength • Logistics service ‘packaging’ • Rail freight service
Slide 23: Transformation - Cultural Initiatives
Transformation - Cultural Initiatives • Right People – Succession planning – Increase skills – Autonomy, accountability, empowerment • Right service – Supply chain solutions for customers – Local solutions • Right time – Post harvest of first year of deregulation – Customer needs are changing – Desi
Slide 24: Transformation - Business Growth
Transformation - Business Growth • Competitive supply chain and rail services for grain • Extend our grain supply chain to overseas customers • Become the partner of choice for the domestic stock feed market • Alignment of people, systems, processes to meet customer requirements Grain Storage | Supp
Slide 25: Six New Regions
Six New Regions • Queensland • Northern NSW • Central NSW • Southern NSW • East Victoria • West Victoria Grain Storage | Supply Chain Logistics | Grain Trading |Port Terminals | Merchandise | Allied Mills 25
Slide 26: Business Unit Summary
Business Overview Storage and Logistics Rail Ports Trading Merchandise 20 MMT grain storage 8 mainline take- 7 bulk grain ports 2 - 3 mmt grain 27 operational capacity or-pay trains and 250 kt sites in Sth. Qld., soybean meal NSW, Vic. traded PA Business Unit Summary 280 operational sites More than
Slide 27: Disclaimer
Disclaimer – 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. The forward looking s