Graincorp Limited Class A · ASX:GNC
Graincorp Limited Class A — H1 2010 Earnings Presentation
31 slides from Graincorp Limited Class A's earnings presentation, May 27, 2010
Slide 1: GrainCorp Half Year 2010 Results
27 May 2010 Ian Wilton – Interim CEO GRAINCORP HALF YEAR 2010 RESULTS 26/05/2010 1
Slide 2: Agenda
Agenda • Financial Results • Business Unit Performance • Malt Integration Update • Strategic Initiatives • Dividend • Guidance • Outlook 26/05/2010 2
Slide 3: Financial Results
FINANCIAL RESULTS 26/05/2010 3
Slide 4: Highlights - Increased earnings driven by Malt
Highlights ‐ Increased earnings driven by Malt % Change HY10 Year on Year EBITDA $114 M 39% Net Profit After Tax $53 M 63% Normalised Free Cash Flow1 ‐$57 M 46% Dividend per share 15 cents n/a Grain carry‐in 2.9 mmt 32% Country receivals 7.0 mmt ‐20% Grain exports handled 1.5 mmt ‐21% (incl. contain
Slide 5: HY 2010 Financial Results – NPAT up 63%
HY 2010 Financial Results – NPAT up 63% $M HY10 HY09 Revenue 922 858 EBITDA 114 82 Net Profit After Tax 53 32 Normalised Free Cash Flow 1 ‐57 ‐106 1 Normalised Operating Cash Flow less CAPEX • More diverse and stable earnings following acquisition of United Malt Holdings • Lower earnings from Storag
Slide 6: Business Drivers – lower Australian grain earnings impact result
Business Drivers – lower Australian grain earnings impact result HY10 HY09 • Lower 2009/10 grain mmt mmt production in NSW and Grain carry‐in 2.9 2.2 Queensland Country network receivals 7.0 8.8 • High international wheat Grain received at port 0.3 0.4 ex‐farm and other bulk handlers stocks driving
Slide 7: Financial Indicators
Financial Indicators 113.7 Malt * * Malt transaction costs 53.6 Malt 26/05/2010 7
Slide 8: Operating Cash Flow
Operating Cash Flow $M HY10 HY09 Reported Operating Cash Flow ‐119.5 80.3 Adjusted for... SCT grain finance facility (draw downs) / repayments 53.3 ‐166.2 Malt related transaction costs 62.8 ‐ Normalised Operating Cash Flow ‐3.4 ‐85.9 • Normalised Operating Cash Flow reflects increased earnings and
Slide 9: NPAT Earnings Bridge – malt drives growth
NPAT Earnings Bridge – malt drives growth EBITDA 26/05/2010 9
Slide 10: Debt Profile
Debt Profile • Debt structure $M $ / mt – Non current $104 M • Reflects core non‐current debt that matures in 2011 – Current $218 M • Malt acquisition facility to be converted into non‐ current debt • Cash $22 M • Net debt $300 M – Gearing 19% • Net Debt divided by Net Debt plus Equity 26/05/2010 10
Slide 11: Balance Sheet
Balance Sheet $M HY10 HY09 • HY10 Balance Sheet Cash 22 12 includes the acquisition of Inventories/Trade Debtors 626 572 Malt Other current assets 63 61 Fixed assets 716 428 • Borrowings and Gearing Other non current assets 535 208 lower due to Total assets 1,962 1,281 recapitalisation of the Trade
Slide 12: Business Unit Performance
BUSINESS UNIT PERFORMANCE 26/05/2010 12
Slide 13: Performance by Business Unit
Performance by Business Unit Business Unit HY10 HY09 HY10 HY09 $M Revenue Revenue EBITDA EBITDA Malt 328 ‐ 59 ‐ Storage and Logistics 191 212 30 41 Ports 46 54 20 30 Trading 408 672 14 22 Allied Mills ‐ ‐ 4 4 Discontinued Operations 13 19 ‐1 ‐12 Corporate and Other 3 1 ‐12 ‐3 Eliminations ‐67 ‐100 ‐
Slide 14: Malt – delivers in line with expectation
Malt – delivers in line with expectation $M HY10* HY09 Revenue 328 ‐ EBITDA 59 ‐ EBIT 48 ‐ CAPEX 24 ‐ • Includes $8.7 M compensation payment from Port of Vancouver (WA) for demolition of part of the malt house to make way for a new rail line • Total US$32.6 M compensation to be received over 5 years
Slide 15: Storage and Logistics – earnings reflect lower receivals
Storage and Logistics – earnings reflect lower receivals $M HY10 HY09 Grain carry‐in (mmt) 2.9 2.2 Revenue 191 212 EBITDA 30 41 EBIT 19 30 CAPEX 20 12 • Half year country network grain receivals lower due to lower 2009/10 production • Receival breakdown • 6.8 mmt winter crop • 0.2 mmt summer crop 26
Slide 16: Ports – reflects difficult trading conditions
Ports – reflects difficult trading conditions $M HY10 HY09 Revenue 46 54 EBITDA 20 30 EBIT 13 24 CAPEX 7 3 • Half year total exports 2.2 mmt – Grain 1.5 mmt – Non‐grain 0.7 mmt • Grain exports reduced due to international market conditions, high AUD and lower production • 0.15 mmt of imports 26/05/2
Slide 17: Trading - difficult international grain market conditions
Trading ‐ difficult international grain market conditions $M HY10 HY09 Revenue 408 672 EBITDA 14 22 PBT 10 14 Tonnes Traded (mmt) 1.4 1.4 • Trading revenues lower year on year due to international market conditions, higher AUD and lower international and domestic wheat prices • Lower prices meaning
Slide 18: Allied Mills
Allied Mills $M HY10 HY09 EBITDA 18 19 Equity Profit 4 4 (60% Joint Venture Share) Net Asset Value 219 201 CAPEX 4 7 • Continued focus on capturing efficiency gains • New business opportunities presented by diversification of customer base and channels to market 26/05/2010 18
Slide 19: Discontinued Operations – Merchandise successfully closed
Discontinued Operations – Merchandise successfully closed $M HY10 HY09 Revenue 13 19 EBITDA (1) (12) • The merchandise business is now closed • No further impact on Group earnings 26/05/2010 19
Slide 20: Malt Integration Update
MALT INTEGRATION UPDATE 26/05/2010 20
Slide 21: Malt Integration – progress
Malt Integration – progress Priority •Progress Update Integration • Developing ‘One Company’ with common systems, practices and culture across the Approach group Integration • Common IT platform and reporting systems being implemented Activities • Integration of the Malt management structure Devel
Slide 22: Malt Acquisition Accounting – in progress
Malt Acquisition Accounting – in progress Depreciation / Amortisation Book Value at Fair Value Book Value AUD$ M Annualised HY10 Acquisition Adjustments at HY10 (Pre Tax) (Pre Tax) Old New Fixed assets 210 95 305 11 15 6 Identifiable Intangibles 1 119 120 ‐ 12 4 Net Working Capital & Other 158 ‐31 1
Slide 23: Strategic Initiatives
STRATEGIC INITIATIVES 26/05/2010 23
Slide 24: Strategic Initiatives
Strategic Initiatives Initiatives •Description Customers • Become a company that is easier to do business with • New grain accumulation and transport service offerings to domestic and export customers • New Grain Transact system planned for 2H10 release ‐ improved online service for grower and buyer
Slide 25: Dividend and Outlook
DIVIDEND AND OUTLOOK 26/05/2010 25
Slide 26: Interim Dividend – 15 cents per share
Interim Dividend – 15 cents per share • Policy – To pay between 40% and 60% of cumulative net profits after tax across the cycle • Interim Dividend – The Board has declared a fully franked interim dividend for the 6 months ending 31st March 2010 of 15 cents per share – Payable on 5th July 2010 – Rep
Slide 27: Earnings Per Share
Earnings Per Share HY10 HY09 NPAT from Continuing Operations $54.0 M $45.5 M Reported Basic Earnings Per Share 28.0 cents 61.7 cents Adjusted for... Loss from Discontinued Operations ‐$1.3 M ‐$13.2 M Profit for the Period $52.7 M $32.3 M Weighted Average Shares Outstanding (millions) 185.6 63.0 Norm
Slide 28: FY 2010 Guidance – EBITDA range upgraded
FY 2010 Guidance – EBITDA range upgraded • Estimated receivals 7.5‐8.5 mmt • Estimated total export elevations 3.0 mmt • Estimated Malt sales volume 0.92 – 0.95 mmt (10 ½ months) • EBITDA range $190‐210 M (from $180 to $210 M) – Includes Malt $110‐120 M • NPAT range $75‐90 M 26/05/2010 28
Slide 29: Outlook
Outlook Grain production • Eastern Australia planting around 50% complete (normal) • Crop forecasters anticipate return to average area planted and see grain prices driving changed commodity mix – more pulses and oilseeds, less barley, similar wheat area* • Good subsoil moisture conditions should bo
Slide 30: Thank You Q&A
GrainCorp THANK YOU Q&A 26/05/2010 30
Slide 31: 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 sta