ABN AMRO Morgans Investors Conference 11 September 2008
Forward looking statements 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 statements are subject to risks, uncertainties and assumptions which could cause actual results or events to differ materially from the expectations described in such forward looking statements. Those risks and uncertainties include factors and risks specific to the industry in which both GrainCorp operates as well as matters such as general economic conditions. While GrainCorp believes that the expectations reflected in the forward looking statements t t in this presentation ti are reasonable, neither GrainCorp nor its directors or any other person named with their consent in the presentation can assure you that such expectations will prove to be correct or that implied results will be achieved. These forward looking statements do not constitute any representation as to future performance. Any forward looking statement t t contained in this document is qualified by this cautionary statement. 2
About GrainCorp GrainCorp has one of the largest grain storage and handling networks in the world Upcountry silo / bunker storage capacity of 20 mmt Seven grain export terminals with an annual shipping capacity of over >20 mmt Two non bulk grain port terminals 60% interest in Australia's largest flour miller Allied Mills (40% Cargill Australia) Hunter Grain, Australia's largest importer and distributor of protein meals GrainCorp trades over 2.5 mmt of grains, pulses and oilseeds in the domestic market and exports cereals and other grains in bulk and containers 3
4 Significant Industry Developments
GrainCorp Ready for the Future Removal of the bulk wheat export monopoly has changed the fundamentals of the Australian grain market GrainCorp is well positioned to increase profitability in the new world of grain export marketing and can now Better leverage the inherent value of our storage and port terminal assets And increase the efficiency of our grain infrastructure service provision The primary focus of the business is to increase the rate of return on our assets 5
Bulk Wheat Exports Export of bulk wheat from Australia was de-monopolised on 1 st July 2008 A new regulator Wheat Exports Australia was established to oversee the new system of bulk wheat export accreditation The new system had accredited 11 bulk wheat exporters up to 4 th September 2008 GrainCorp was granted accreditation to export wheat in bulk on 4 th September 2008 The accreditation was granted with no restrictions GrainCorp can now export bulk wheat and this new business will compliment our existing bulk barley, sorghum and canola exports 6
Bulk Wheat Exports Our entry into the bulk wheat market coincides with our new freedom to manage grain transport logistics through the up-country to port supply chain Previously the export monopolist controlled the logistics chain The focus of our new bulk wheat export business will be on value not volume We are not seeking to be the largest bulk wheat exporter But we are seeking to be the most profitable bulk wheat exporter per tonne 7
CHS Durum Alliance On 11 th August 2008 a durum accumulation alliance with CHS was announced CHS is the largest cooperative grain marketer in the US and one of the largest durum marketers in the world In 2007 CHS revenues were US$17.2 bn and net income was $750.3 million The benefits to GrainCorp from the alliance with CHS include A new international grain marketing partner Additional marketing revenue Additional storage, handling and export terminal revenue 8
Take or Pay Trains On 5 th May 2008 GrainCorp announced a 5 year contract with Pacific National for 8 mainline trains This allows GrainCorp to fully coordinate grain export rail logistics for the first time Significant opportunities now exist for the company to increase the efficiency of coordination between Upcountry site out loading Domestic customer deliveries Port terminal usage Services to grain exporters We are developing a secondary market for rail freight to increase competition 9
10 GrainCorp Business Enhancement Projects
Allied Mills The $97 million Picton flour mill is nearing completion and will commence commissioning in late November Full production is scheduled for January Picton will be the most advanced flour mill in the Southern Hemisphere Annual production of 200,000 TPA means there is no further need for imports of flour from interstate to meet Sydney / NSW market demands The immediate benefits include Increased milling efficiency Reduced inward and outward supply chain costs Integration with GrainCorp take-or-pay trains 11
Pinkenba BBM Development On 18 th July 2008 the decision by BBM to locate new malting plant adjoining GrainCorp Pinkenba terminal was announced The plant will produce 100 kt PA of malt using local and interstate barley The project involves a $12 million capital upgrade to storage and rail infrastructure GrainCorp will supply all of BBM s storage and handling requirements The project increases non-mineral bulk handling at Pinkenba by 50% 12
GrainCorp Containers Fisherman Islands $4 million investment in container packing plant at GrainCorp Fisherman Islands terminal Packing and handling capability of greater than 200,000 T PA The new facility was opened in early August 2008 and is fully operational Container exports are forecast to grow to 2.5 mmt PA The Fisherman Island investment provides GrainCorp with capacity to grow market share of container exports GrainCorp is examining a similar investment at Cooks River (Sydney) 13
2008 Grain Harvest The grain harvest has already commenced in Central Queensland Good recent rain in SE Queensland, north and central NSW and Victoria have boosted harvest prospects Late sown crops in Sth. NSW and Riverina (30% of planting) still require spring rain Current conditions indicate a return to bulk cereal exports from the eastern states All round result in eastern states will be much improved over last 2 seasons 14
International Grain Markets Indications are that strong gprices for cereals and oilseeds will continue The northern hemisphere cereal harvest has been large (> 670 mmt) but wheat and barley quality has been low This means that the world market will pay for protein This will underpin demand d for Australian wheat and solid prices Recent fall in A$ (18% since late July) will boost competitiveness Every $0.01 fall A$ / US$ = $2.70 benefit to the Australian market 15
2008 Financial Year Results The full 2008 financial year results for GrainCorp will be announced on 18 th November GrainCorp will be holding investor and shareholder briefings on the day of results release and over subsequent days 16
QUESTIONS