American Vanguard Corporation · NYSE:AVD
American Vanguard — Investor Presentation (March 2016)
40 slides from American Vanguard's investor presentation, March 2016
Slide 1: American Vanguard
American Vanguard Providing the Means to Safe, Efficient & Abundant Agriculture Worldwide March 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains, in addition to historical information, forward-looking statements. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those d
Slide 3: AMVAC Overview
AMVAC Overview ► Founded in 1969; Traded on NYSE (400 employees) ► Fully integrated company operation, excluding basic R&D ► Business Model: Develop, manufacture and market a diverse group of specialty and agricultural products ► Mission: Enhance agricultural productivity and safeguard public health
Slide 4: Proven Acquisition Experience
Proven Acquisition Experience Dibrom Axis Deadline Counter Terraclor Plant Mocap Hyvar Naled (US) Metaldehyde Terbufos PCNB Nemacur (Valent) (DuPont) (DuPont) (Pace) (BASF) (Chemtura) Aztec (bag) 1998 2001 2015 2003 2006 2007 (Bayer) 2010 Krovar Vapam SmartBox Thimet (DuPont) Evital E-Z Load Metam S
Slide 5: Diverse Product Portfolio
Diverse Product Portfolio Insecticides High Sales Volume Fungicides Medium Sales Volume Growth Low Regulators Sales Volume Herbicides Soil Fumigants 5
Slide 6: Diversified Crop Participation
Diversified Crop Participation 2013 2014 2015 $381 Million $298 Million $289 Million 3% 2% 3% 2% 3% 4% 5% 8% 25% 40% 6% 7% 26% 7% 11% 9% 11% 12% 14% 21% 22% 21% 18% 20% Fruit & Vegetables Corn Potatoes Specialty Cotton Peanuts Sugar Crops Other 6
Slide 7: Major Opportunity – U.S. Corn
Major Opportunity – U.S. Corn ► Strong Demand - 2 Major Challenges Glyphosate Resistant Weeds Root Nibbling Soil Insects ► AMVAC Solutions IMPACT® Herbicide – Monsanto Co-promotion Corn Soil Insecticide – SmartBox® Application RESULT: Yield Enhancement Solutions 7
Slide 8: The Problem: Glyphosate Resistance
The Problem Glyphosate Resistance WITH 8
Slide 9: Rootworm Pressure
noorworm rressure ROOTWORM TROUBLE SPOTS. pillior
Slide 10: WBRID Cs i
WBRID Cs i Zip COUNTER 8OC: =
Slide 11: Granular Soil Insecticides
Granular Soil Insecticides AZTEC® 2.1% Terbufos (AMVAC) Tebupirimphos + Chlorethoxyfos + cyfluthrin (Bayer) Bifenthrin (AMVAC) The Simple, Safe, Superior choices for granular products MOCAP® NEMACUR® Ethoprophos Fenamiphos THIMET® 20G Tefluthrin (Syngenta) Phorate (AMVAC) 11
Slide 12: Amvac's Closed Delivery Systems
Amvac’s Closed Delivery Systems SmartBox® / Lock ’n Load® / EZ-Load® / Ultima® The only patented computer-controlled returnable, refillable granular delivery system, with an electronic application meter, which accurately dispenses product at low rates. Additional conveniences include “real-time” tra
Slide 13: Yield Advantage of Soil Applied Insecticides
Yield Advantage of Soil Applied Insecticides University and On-Farm Demo Trials – NE, SD, IA, IL, IN, MN, WI, OH (2011 -2013) 50 One Third Trials 45 Average Increase Bu/A Increase 40 +20 Bu/A 35 Overall Average Increase 30 +8.2 Bu/A 25 20 15 10 5 - (5) 1 21 41 61 81 101 121 141 161 181 (10) Number o
Slide 14: Quality Control All Season Long
Quality Control All Season Long 14
Slide 15: AMVAC's Potato Portfolio
AMVAC’s Potato Portfolio Insect Control Insecticides in Buildings - Ecozin® Plus and Above - Ambush® Equipment Ground Slug & Snail - Nuvan® Application Seed - Deadline® Insect Shield Treatment Fungicide Sprout Control - Rejuvenate™ - Blocker™ - SmartBlock™ Soil Planting Growing Harvest Post Preparat
Slide 16: Efficacy of SmartBlock on Potatoes
Efficacy of SmartBlock™ on Potatoes Untreated SmartBlock™ (1 application) SmartBlock™ Safe, food-grade additive Superior sprout control Easy “drop-in” replacement CIPC (3 applications) 16
Slide 17: Sugar Crops
Sugar Crops Sugarcane Sugar beets ► Controls wireworm in ► Controls sugar beet root sugarcane to optimize maggot which is a key stands and sugar yield. pest for sugar beets. 17
Slide 18: Made in America
Made in America Los Angeles, CA Axis, AL Hannibal, MO Marsing, ID 18
Slide 19: Automation Efficiencies
Automation Efficiencies
Slide 20: 2015 Financial Performance
2015 Financial Performance ► Manufacturing Cost Reduction $6M ► OPEX Reduction $8M ► Inventory Reduction $30M ► Debt Reduction $30M ► Acquisitions Funded $37M ► Cash Flow Improvement Y-O-Y $112M 20
Slide 21: OPEX Reduction
OPEX Reduction $120.0 $115.0 $110.0 Millions $105.0 $100.0 $95.0 $90.0 2013 2014 2015
Slide 22: Inventory Trend
Inventory Trend $180.0 $160.0 $140.0 $120.0 Millions $100.0 $80.0 $60.0 $40.0 $20.0 $- 2014 ACTUAL 2015 ACTUAL 2016 TARGET
Slide 23: Debt to Equity Ratio
Debt to Equity Ratio $300,000 2.5 Shareholder's Equity ($K) $250,000 2 $200,000 1.5 $150,000 1 $100,000 0.35 0.37 0.35 0.23 0.20 0.38 0.25 0.5 $50,000 $- 0 2009 2010 2011 2012 2013 2014 2015 Shareholder's Equity Debt
Slide 24: Shareholder Equity Growth
Shareholder Equity Growth 75% Increase since 2009 Greater than 9% Annual Compounded Growth $300 $250 $200 Millions $150 $100 $50 $- 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 25: Innovation Platform
TEMUT Innovation Platform emg en,
Slide 26: Liquid Corn Soil Insecticide Products
Liquid Corn Soil Insecticide Products At-Plant Liquid Fertilizer Compatible Launched in 2014 Current Pipeline 26
Slide 27: High Strength Granular Products
High Strength Granular Products SmartBox® / Lock’N Load® Systems 5G 15G 4.67G 9.34G Important Products for SIMPAS 27
Slide 28: What is SmartBox?
What is SmartBox®? The most advanced granule application system available Patented, closed-container transfer and application system for pesticides The sealed transfer-container is returnable and refillable. The on-planter base-container contains a locking valve system which enables contact-free pro
Slide 29: Much Better Accuracy than Mechanical
MUCH Better Accuracy than Mechanical In-cab monitor & controls Records FIELD application rates, but not integrated with current GPS systems and doesn’t create as-applied maps 29
Slide 30: Global Precision Ag Market
Global Precision Ag* Market will grow @ 12.2%CAGR to $4.55B from 2014 to 2020 Measure Evaluate Repeat Test Hypothesis *Precision agriculture is an agricultural application and practicing system, which includes a positive cycle of data acquisition, data news.agropages.com decoding, inputs optimizatio
Slide 31: Smart Integrated Multi-Product Precision Application System
TM Smart Integrated Multi-Product Precision Application System 265
Slide 32: SIMPAS
SIMPAS™ (Patents Pending) PRESCRIPTIVE-CAPABLE ► One system for at-planting insecticides, fungicides, nutritionals, herbicides ► One system for dry & liquid products ► iPad user-interface ► Wireless communication from cab to meters ► Highly accurate meter & flow sensors: even at very low rates, refi
Slide 33: Proprietary Precision Technology
Proprietary Precision Technology 33
Slide 34: Innovation Path
Innovation Path Eliminates Worker Exposure Reduces Environmental Impact All types of Products: Fungicides, Insecticide Only micronutrients, stimulants, inoculants, insecticides, biologicals Precision Application of Chemical Prescription Application & Data Recording Accurately delivers constant Synch
Slide 35: Market Opportunities
Market Opportunities Crops Geographies All row crops • US ► Corn • Brazil/Argentina Large farms, ► Sugarcane • China technology ► Peanuts adaptors • Eastern ► Potatoes Europe ► Sugar beets • UK, EU Heavily regulated ► Soybeans • Canada ► Cotton • Australia Lack of Alternatives ► etc. 35
Slide 36: International Expansion will come from…
International Expansion will come from… Future growth coming from building market access operations through alliances Canada Office AMVAC AMVAC Chemical Switzerland GmbH* UK Ltd.* France Office Quimica AMVAC de Mexico* AMVAC de AMVAC Costa Rica* Netherlands BV* AMVAC do Brasil Representações LTDA* *
Slide 37: International
International $90.0 $80.0 $70.0 $60.0 Millions $50.0 $40.0 $30.0 $20.0 $10.0 $- 2005 2010 2015
Slide 38: Five Pillars of AMVAC's Growth
Five Pillars of AMVAC’s Growth Brand Hyvar & Krovar Acquisitions BiPA Strategic Licensing Alliances Organic Technology Growth “Key” to our Growth Fruits & Scepter Vegetables Precision Application SIMPAS
Slide 39: Growth Themes
Growth Themes ► Integrated Pest Management - Genetic / Chemical / Biological ► Acquisition/Licensing/Development Model – Pro-Active ► Innovative Liquid & High Concentration Treatments ► Prescription Planting Equipment – Enabling Technology ► International Market Access - Global Penetration ► Consume
Slide 40: AVD Sustainable Success
AVD Sustainable Success Consistently Strong Financial Performance 400 300 200 Fast Growth 100 0 1999 2001 2003 2005 2007 2009 2011 2013 Diverse Manufacturing Capability Core Competency Growing Demand for our Products Branded, value added solutions Evolving Business Model Downstream Technolog
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