GRAINCORP LIMITED — Regulatory Filings 2012

Jul 25, 2012

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Company announcement

GrainCorp Limited ABN 60 057 186 035

Date: 26 July, 2012 To: The Manager Announcements Company Announcement Office Australian Securities Exchange On Line Lodgement

GRAINCORP LIMITED (GNC)

INVESTOR PRESENTATION

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Andrew Horne Company Secretary

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GrainCorp Limited Level 26, 175 Liverpool Street, Sydney NSW 2000 PO Box A268, SydneySouth NSW 1235 Telephone: (02) 9325 9100 Facsimile: (02) 9325 9180 www.graincorp.com.au

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INVESTOR CONFERENCE JP Morgan – “A Day at the Farm”

Today’s presentation...

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Our business model...

• Create and capture grain value by leveraging our integrated and international grain supply chain

Our strategic focus...

• 3 Corporate Objectives → improve shareholder returns, manage variability and grow as an international agribusiness

• Strategic Themes targeting $40M additional underlying EBITDA

Global grain opportunities...

• Growth in global grain demand and grain trade

• Opportunities for GrainCorp

• 2 -

Three core grains – wheat, barley, canola

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Global traded
Other Wheat
grains [1] 8% 30% •
Corn
23%
•
Barley
3%
Canola
Soybean 2%
32%
Sorghum
2%
Global export share by commodity and region
100%
•
80%
60%
•
40%
20%
0%
Wheat Barley Canola Malt
Australia Canada USA EU-27 Other Our global export
visibility
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Our core grains

• Wheat, barley, canola → represent ~35% of global traded grains

• ‘Drier climate’ grains, where we have a comparative advantage

Building our competitive difference

• →

• International presence insight into 50%+ of the export trade of our core grains and malt

• →

• Integrated model complementary value and insight from storage, handling and processing activities

• 3 -

• Excludes rice

Three integrated grain activities – ‘end to end’ grain supply chain presence

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• We create value through grain handling, ownership and processing

• We capture value through our asset intensive supply chain, grain processing insight, and local and international market insight

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Marketing

Matches supply and demand

• Links the consumer to the grower

• Creates and captures value through procurement and risk management

• Drives grain through our assets

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Storage & Logistics

Processing

Provides grain supply

• Competitive network and logistics capability to originate grain

• Adds value to grain through arbitrage opportunities

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Provides grain demand

• Adds value to grain through processing and procurement

• Insight into grain characteristics and customer requirements

• 4 -

Three operating geographies – Australia, North America and Europe

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• International insight, multi-origin capability and diversification in our core grains

• Close to supply fundamentals for our core grains and malt

• We have visibility across 50%+ global export trade of each of our core grains and malt

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Europe
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Marketing
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• Hamburg office

• Saxon Agriculture

• Processing

• Bairds Malt (UK) : 5 plants

• Schill Malz (Germany) : 4 plants

GrainCorp’s assets and capabilities

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North America
Marketing
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Australia
Storage & Logistics
 Country : 280+ sites
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• Calgary office

• Logistics : 19+ trains

Processing

• Ports : 7 bulk and 2 container

• Marketing

• Canada Malting Co (Canada) : 3 plants, 10 grain elevators, 1 bulk port

• Domestic sales

• Great Western Malting

• International sales

• (US) : 2 plants

• Ocean charter freight team

• Country Malt (US) : national warehouse and distribution network

Processing

• Barrett Burston Malting : 4 plants

• Allied Mills : 12 facilities

Marketing office

• 5 -

Three Corporate Objectives

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2 Manage Variability

1 Improve Returns

• •

• Improve through the Manage through the cycle cycle shareholder return earnings

• Maintain strong cash flow and pay consistent dividends

• Focus on value creation from our suite of grain chain assets

• 3 Growth

• • Grow business scale → organic and acquisitions

• • Leverage capabilities

• Maintain strong balance sheet → low gearing

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Improving ROE..
180 NPAT ($M) 15%
Annual ROE (%)
150 Rolling 3 yr avg ROE (%) 12%
120 9%
90 6%
60 3%
30 0%
$M0 (3%)
(30) (6%)
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
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Business diversification… Market Capitalisation growth...
450 100% 1,750
1
Grains EBITDA
400 TOTAL EBITDA2 1,500
80%
350 Processing % of Total EBITDA
1,250
300
60%
250 1,000
200 750
40%
150
500
100
20%
250
50
$M0 0% $M-
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
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1. Country & Logistics, Ports and Marketing EBITDA

2. 6 -

3. Includes 60% share of Allied Mills EBITDA, excludes Corporate Costs and Merchandising EBITDA

Four Strategic Themes to meet Corporate Objectives

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Corporate Objectives 1 Improve Returns Increase underlying shareholder return

2 Manage Variability Manage earnings through the cycle and pay consistent dividends

3 Growth Scale through accretive organic and acquisitive growth

Strategic Themes

1 Strengthen our grain handling network 2 Grow our grain Marketing business 3 Create and capture additional Malt value Build on our leading flour position[1]

4 Better capture synergies from our network and integrated grain businesses

Financial Targets

• ~$40M additional underlying EBITDA by end FY14

• $80-120M investment capex over 3 years end FY14

• Support ROE growth through the cycle

• Reduce earnings volatility

• 7 -

• Allied Mills manages its own strategy. Allied’s strategic outcomes excluded from GrainCorp ‘s $40M additional underlying EBITDA target

Strategic Themes supported by 11 “Gamechangers"

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1 2 Strengthen our grain Grow our grain handling network Marketing business 1 5 Drive supply chain Enhance customerefficiency focused growth 6 2 Broaden origination Integrate customer footprint offering 3 Build on our Enhance value proposition for growers leading flour position 4 Maximise milling value and Grow complementary pursue downstream growth non-grain commodities

3 Create and capture additional Malt value 7 Optimise operational performance 8 Develop global model and customer management 9 Extend value beyond processing

4 Better capture synergies from our network and integrated grain businesses 10 11 Integrate customer account Leverage our global grain and supply chain planning and malt market insights

• 8 -

Strategy to capture ~$40M additional underlying EBITDA

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• In excess of $40M additional underlying EBITDA from identified Gamechangers

• Supports the growth of ROE through the cycle

~$40M EBITDA delivered over 3 years ending FY14

1 2 3 4 Strengthen our Grow our grain Create and Better capture grain handling Marketing capture additional synergies network business Malt value

~$5M

~$10M

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~$15M
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~$10M [1]
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• 9 -

• Profit Before Tax (PBT)

Capital investment for ~$40M EBITDA growth

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• $80-120M capex to capture earnings growth → 3 years ending FY14

• Average ROCE of ~20% for investments → 2-3 years cash payback

Example capex projects to achieve ~$40M EBITDA

1 Strengthen our grain handling network

• →

• Online support smartphone app and Grain Transact upgrade

• • → Receival site upgrades e.g weighbridges and sample stands

• Equipment upgrades for ~20 key receival sites

2 Grow our grain Marketing business

• Global trading and risk management system

• International capability → office and personnel

3 Create and • → Sustainability initiatives e.g waste water and heat recycling capture additional • Global platforms and systems → procurement and sales Malt value

• →

• Sustainability initiatives e.g waste water and heat recycling

4 $13-14M Better capture synergies

• Customer and procurement planning

• 10 -

Global grain demand to increase by 50%

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Grain consumption drivers to 2050 (bmt [1] )
Developing Countries 0.18
Developed Countries
Population
0.36
growth
0.42 Per capita 3.15
consumption
growth
Per capita Population
2.16 consumption growth
growth
2010 Per capitaFood grainPopulation Per capitaFeed grainPopulation 2050
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Global grain demand

• Forecast to grow by 1bmt or 50% by 2050 due to:

• 35% rise in population to 9.7 bn

• 13% rise in per capita consumption of grain for animal feed (meat / dairy)

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Drivers of global grain demand growth to 2050
-10% 30% 70% 110% 150%
Asia (ex China)
Middle East & Nth Africa
Sub-Saharan Africa
Sub-Continent Asia
China Popluation Increase
Food Grain / Capita
World
Feed Grain / Capita
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Middle East & Nth Africa

Global grain demand growth

• Driven by demand in import dependent regions, specifically:

  • Existing markets → Asia, Middle East and North Africa

  • New markets → Sub-Saharan Africa and Sub-Continent Asia

• Billion metric tonnes

• 11 -

Global grain trade to increase by 100%

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• Global wheat and malt export trade has doubled in the past 40 years

• Driven by demand in import dependent regions, global trade of our core grains forecast to rise ~155mmt to ~300mmt pa by 2050

• Forecast ~2% pa global malt demand growth → driven by beer demand growth regions (Asia and Africa) and niche sectors (whisky and craftbeer)

Global core grain trade and population Trade (mmt) and Population (billion)

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9.7 Population
7.8 Barley and
54 Canola trade
7.0
6.6
5.7
35
4.8 24
Wheat
4.0 20 20 24 240 trade
12 149
129
113
96 102
64
1970s 1980s 1990s 2000s 2010s 2020(e) 2050(e)
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Past global malt trade (mmt)

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4.5
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3.4
Rest of
1.6 World
2.6
1.3
2.0
Asia and
2.8 Africa
2.1
1980s 1990s 2000s 2010s
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• 12 -

Source: USDA and IGC

Opportunities for GrainCorp...

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Eastern Australia Grain Yield [1 ] (mt/Ha)
3.0
2.5
2.0
1.5
1.0
0.5 25 year moving average 1.8mt/Ha
0-
1970 1975 1980 1985 1990 1995 2000 2005 2010
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Increased grain supply

• Grain handling → higher grain prices will support increased grain yields

• Grain exports → if supply growth in eastern Australia exceeds domestic demand

• Grain Marketing → growth in global grain trade

Freight advantages to grain growth markets

Demand growth in proximate regions

• Australia is freight advantaged to Middle East, Asia and eastern Africa

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GrainCorp Marketing office
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Freight advantage
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• Our presence in Europe and Canada complements our Australian freight advantage

• 13 -

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FY12 guidance – earnings higher

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EBITDA [1] - $M
450 Guidance $385-415M
400
350
300
250
200
150
100
50
$M0
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12(g)
Underlying NPAT [2] - $M
225 Guidance $185-205M
200
175
150
125
100
75
50
25
$M0
(25)
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Guidance $385-415M

• Volume guidance:

• Country receivals ~12.0mmt

• Grain exports ~10.0mmt

• Carry-out ~4.5mmt

• Malt sales ~1.35mmt

• Main variables:

• Central QLD sorghum crop

• Rail and road freight to port

• Marketing margins and year end mark to market accounting

• Malt foreign exchange impact

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FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12(g)
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1. Excludes ~$17M Significant Items for Malt defined benefit plan adjustment (~$12M) and Allied Mills Toowoomba mill insurance proceeds (~$5M)

2. Excludes Marketing interest expense of ~$20M and includes 60% share of Allied Mills’ NPAT

3. 14 -

FY13 outlook – Grains and Malt update

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Grains

• Forecast ~4.5mmt grain carry-in

• Additional rail capacity maintained and 0.6mmt export capacity added

• FY13 Shipping Stem open → ~9.0mmt booked

• Eastern Australian winter crop production forecast range 16.0-18.0mmt[1]

Malt

• USDA[2] world barley production forecast at 135mmt, 1% higher year on year

• Forward sold GrainCorp malt volumes of ~0.7mmt, ~50% of production capacity

• Softening beer demand and excess malting capacity to continue in mature markets

• Some rationalisation of excess global malt capacity expected

• Wheat, barley, canola production in Queensland, NSW and Victoria. ABARES June 2012 Crop Report at 16.0mmt and Australian Crop Forecasters Jun-12 report at 18.0mmt 2. USDA Jun-12

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Disclaimer

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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 GrainCorp operates, as well as matters such as general economic conditions.

While GrainCorp believes that the expectations reflected in the forward looking statements in this presentation are reasonable, neither GrainCorp nor its directors or any other person named 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 and should not be relied upon as financial advice of any nature. Any forward looking statement contained in this document is qualified by this cautionary statement.

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