Ag Growth International Inc. · TSX:AFN
Ag Growth International — Q1 2024 Earnings Presentation
34 slides from Ag Growth International's earnings presentation, April 2024
Slide 1: Earnings Call
EARNINGS CALL PAUL JIM HOUSEHOLDER RUDYK
Slide 2: CEO Commentary
AGI= CEO COMMENTARY
Slide 3: Topics for Today's Review
TOPICS FOR TODAY’S REVIEW PURPOSE CORPORATE REVENUE BY NEAR-TERM SAFETY & STRATEGIC SEGMENT & MISSION PRIORITIES GEOGRAPHY OBJECTIVES 3
Slide 4: Safety Is a Top Priority
SAFETY ISA TOP PRIORITY Y ff ff ff fF & & fF ff ff & ff i fe wf
Slide 5: Apr-24
Apr-24 5
Slide 6: Purpose and Mission
PURPOSE Eliminate Food Loss and Hunger MISSION To advance storage, handling, and processing solutions that strengthen and secure the global food supply chain 6
Slide 7: A Global Food Security Pure Play
A Global Food Security Pure Play 7
Slide 8: Corporate Strategic Priorities
CORPORATE STRATEGIC PRIORITIES PROFITABLE OPERATIONAL BALANCE ORGANIC EXCELLENCE SHEET GROWTH DISCIPLINE KPI KPI KPI Revenue & Adjusted Margin Expansion Net Debt Leverage Ratio EBITDA Growth 8
Slide 9: Q1 2024 KPI Check-In
Q1 2024 KPI CHECK-IN Strategic Priorities KPIs Commentary Revenue growth • Q1 2024 revenue down -9% y/y Profitable Organic Growth Adjusted EBITDA growth • Q1 2024 adj. EBITDA up +4% y/y ~ Operational Excellence Adjusted EBITDA margin • Step-change in margin levels • Q1 2024 adj. EBITDA margin of 15.
Slide 10: Q1 2024 Results
Q1 2024 RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN -9% 15.9% 205 bps $347 $315 13.9% +4% $48 $50 Q1/23 Q1/24 Q1/23 Q1/24 Q1/23 Q1/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio measures. See "Non-IFRS and Other Financial Measures". Sour
Slide 11: Q1 2024 Results – Farm Segment Revenue
Q1 2024 RESULTS – FARM SEGMENT REVENUE CAD, millions TOTAL CANADA U.S. INTERNATIONAL 4% $182 $189 flat -2% $95 $95 $68 $67 +41% $28 $20 Q1/23 Q1/24 Q1/23 Q1/24 Q1/23 Q1/24 Q1/23 Q1/24 Source: Company reports 11
Slide 12: Q1 2024 Results – Commercial Segment Revenue
Q1 2024 RESULTS – COMMERCIAL SEGMENT REVENUE CAD, millions TOTAL CANADA U.S. INTERNATIONAL -24% $165 $126 -34% -3% $90 $55 $54 $60 -37% $19 $12 Q1/23 Q1/24 Q1/23 Q1/24 Q1/23 Q1/24 Q1/23 Q1/24 Source: Company reports 12
Slide 13: Near-Term Objectives
NEAR-TERM OBJECTIVES ✓ Executing Commercial order book ✓ Completing initial set of product transfers ✓ Monitoring North American farm market ✓ Cash flow focus ✓ Achieving target balance sheet metrics ✓ Sustaining margin performance ✓ 2025 India expansion 13
Slide 14: Wrap Up
AGI= WRAP UP
Slide 15: CFO Commentary
AGI= CFO COMMENTARY
Slide 16: Topics for Today's Review
TOPICS FOR TODAY’S REVIEW DETAILED BALANCE RESULTS BY CASH FLOW OUTLOOK SHEET SEGMENT 16
Slide 17: Q1 2024 Results
Q1 2024 RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN -9% 15.9% 205 bps $347 $315 13.9% +4% $48 $50 Q1/23 Q1/24 Q1/23 Q1/24 Q1/23 Q1/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio measures. See "Non-IFRS and Other Financial Measures". Sour
Slide 18: Q1 2024 Farm Results
Q1 2024 FARM RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN $182 +4% $189 23.8% 273 bps 21.1% +17% $45 $38 Q1/23 Q1/24 Q1/23 Q1/24 Q1/23 Q1/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio measures. See "Non-IFRS and Other Financial Measures"
Slide 19: Q1 2024 Commercial Results
Q1 2024 COMMERCIAL RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN -24% $165 -277 bps 13.3% $126 10.5% -40% $22 $13 Q1/23 Q1/24 Q1/23 Q1/24 Q1/23 Q1/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio measures. See "Non-IFRS and Other Financial M
Slide 20: Balance Sheet Discipline
FINANCIAL OVERVIEW & OUTLOOK BALANCE SHEET DISCIPLINE Net Debt Leverage Ratio 7.0x 6.0x • Committed to deleveraging 5.0x • Debt repayment is a high 4.0x priority 3.0x 2.9x • Target ratio of 2.5x expected 2.0x to be achieved in 2024 1.0x – Q1/24 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q
Slide 21: Working Capital Management Focus
FINANCIAL OVERVIEW & OUTLOOK WORKING CAPITAL MANAGEMENT FOCUS • Temporary ramp-up in Working Capital Intensity inventory in H1/24 reflecting 30% heightened Commercial 25% segment order book requirements ahead of 20% 18% H2/24 delivery 15% • Reduction in provisions post 10% large warranty claim resol
Slide 22: Funds From Operations
FINANCIAL OVERVIEW & OUTLOOK CAD, millions FUNDS FROM OPERATIONS 47% $31 $21 Q1/23 Q1/24 Note: Funds From Operations is a supplementary non-IFRS measure. See "Non-IFRS and Other Financial Measures". Note: Funds From Operations is defined as cash provided by operations adjusted for items not involvin
Slide 23: Strong Guidance
FINANCIAL OVERVIEW & OUTLOOK STRONG GUIDANCE • Guidance reaffirmed • Full-year 2024 adjusted EBITDA expected to be at least $310 million • Trends in Commercial project timing have further shifted expected deliveries into the second half of 2024 • Expect all of the full year 2024 Adjusted EBITDA grow
Slide 24: Order Book
FINANCIAL OVERVIEW & OUTLOOK CAD, millions ORDER BOOK $729 +12% • Near all-time record • +12% year-over-year $649 • Significant strength in International Commercial Q1/23 Q1/24 Note: Order Book is a supplementary non-IFRS measure. See "Non-IFRS and Other Financial Measures". Source: Company reports
Slide 25: Paul Householder, Jim Rudyk
PAUL HOUSEHOLDER RUDYK
Slide 26: Forward-Looking Information (1/3)
FORWARD-LOOKING INFORMATION (1/3) This webcast presentation contains forward-looking statements and information (collectively, "forward-looking information") within the meaning of applicable securities laws that reflect our expectations regarding the future growth, results of operations, performance
Slide 27: Forward-Looking Information (2/3)
FORWARD-LOOKING INFORMATION (2/3) Forward-looking information involves significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking information, including: general economic and business conditions and changes i
Slide 28: Forward-Looking Information (3/3)
FORWARD-LOOKING INFORMATION (3/3) Financial Outlook Also included in this webcast presentation is an estimate of AGI’s 2024 Adjusted EBITDA and target net debt leverage ratio to be achieved in 2024, which are based on, among other things, the various assumptions disclosed in this webcast presentatio
Slide 29: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION PRESENTATION OF FINANCIAL INFORMATION All financial information of AGI included in this presentation is reported in Canadian dollars and (except for forward-looking financial information) has been derived from audited and unaudited historical financial statement
Slide 30: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation, and amortization) is a non-IFRS financial measure and its most directly comparable financial measure that is disclosed in our consolidated financial statements is profit (loss) before incom
Slide 31: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Adjusted EBITDA – Farm Segment - The following table reconciles profit (loss) before income Adjusted EBITDA – Commercial Segment - The following table reconciles profit (loss) before taxes to Adjusted EBITDA for the Farm segment for each of the periods presented
Slide 32: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Adjusted EBITDA Margin % is a non-IFRS ratio and is defined as Adjusted EBITDA divided by revenue. Adjusted EBITDA margin % is a non-IFRS ratio because one of its components, Adjusted EBITDA, is a non- IFRS financial measure. Management believes Adjusted EBITDA
Slide 33: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Net Working Capital is a non-IFRS financial measure and its most directly comparable financial measure that is disclosed in our consolidated financial statements is Total Current Assets. Net Working Capital is defined as Total Current Assets less cash and cash e
Slide 34: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Order book is a supplementary financial measure and is defined as the total value of committed sales orders that have not yet been fulfilled that: (a) have a high certainty of being performed as a result of the existence of a purchase order, an executed contract
Ag Growth International — Q1 2024 Earnings Presentation on 6ix