Adama Ltd. Class A · SZSE:000553
Adama Ltd. Class A — Q4 & FY 2021 Earnings Presentation
23 slides from Adama Ltd. Class A's earnings presentation, March 2022
Slide 1: Q4 & FY 2021 Review
Q4 & FY 2021 Review ‘March 2022) 7+ Vi; \
Slide 2: Legal Notice
Legal Notice This presentation is for marketing and information purposes only. By this presentation, neither ADAMA Ltd. nor Adama Agricultural Solutions Ltd. (together the “Company” or “ADAMA”) intend to give, and the presentation does not constitute, professional or business advice or an offer or r
Slide 3: General Performance Overview
General Performance Overview
Slide 4: Q4 General Market Update
Q4 General Market Update • Continued strong demand for crop protection products in Q4 in most regions, driven by high crop prices of most major commodity crops − Also supported by increase in planted area in South America • Farmer incomes are generally improving as a result of high crop prices, but
Slide 5: Q4: strong price increases and continued volume growth driving record quarter, margin recovery
Q4: strong price increases and continued volume growth driving record quarter, margin recovery %▲ Q4 Highlights Adj. $ million Q4 2021 Q4 2020 USD ▪ Sales Sales 1,337 1,141 +17% ̶ Sales up 17% to all-time quarterly record-high $1.3bn ̶ Prices +14%; volumes +5% Gross Profit 412 335 +23% ▪ Gross Profi
Slide 6: FY: Sales +17% to record-high, driven by volume and prices; margin pressure amid elevated costs
FY: Sales +17% to record-high, driven by volume and prices; margin pressure amid elevated costs %▲ FY Highlights Adj. $ million FY 2021 FY 2020 USD ▪ Sales Sales 4,813 4,128 +17% ̶ Up 17% to a record $4.8bn ̶ Driven by 12% volume growth, 4% higher prices; aided by Gross Profit 1,412 1,223 +15% favor
Slide 7: Regional Sales Performance
Regional Sales Performance Q4 2021 vs. Q4 2020 % Sales growth by region Absolute Sales change (USD $m) CER USD Total $m 3.4% Europe 1 247 0.4% 25.8% Latin America 82 456 21.9% 11.1% North America 30 289 11.7% 36.4% of which, China: Asia Pacific of which, 38.6% +75.7% CER; +80.8% USD 61 China +$59m 2
Slide 8: Regional Sales Performance
Regional Sales Performance FY 2021 vs. FY 2020 % Sales growth by region Absolute Sales change (USD $m) CER USD Total $m 3.0% Europe 37 1,072 3.5% 19.3% Latin America 188 1,276 17.3% 17.4% North America 141 917 18.2% of which, China: +50.8% CER; +58.5% USD 28.5% of which, Asia Pacific 898 36.8% 242 C
Slide 9: Q4 & FY 2021 Regional Highlights (USD)
Q4 & FY 2021 Regional Highlights (USD) +12% +18% +0% +4% +81% +59% Q4 FY Q4 FY Q4 FY North America Europe China • Robust pre-season demand in both US • Growth across most of the region partially • Non-Ag: sales of raw materials and and Canadian ag markets offset by supply challenges, mainly felt in
Slide 10: Detailed Financial Review
A, ADAMA Detailed Financial Review
Slide 11: Q4 Sales +17%, driven by markedly higher prices
Q4 Sales +17%, driven by markedly higher prices Sales bridge analysis 157 -17 1,337 1,141 56 +17% +5% +14% Q4 2020 Quantity Variance Price FX Q4 2021 Variance 11 NOTE: FX includes currency effect on sales, net of hedging
Slide 12: FY Sales +17%, driven by robust volume growth, higher prices
FY Sales +17%, driven by robust volume growth, higher prices Sales bridge analysis 488 147 50 4,813 4,128 +17% +12% +4% FY 2020 Quantity Variance Price FX FY 2021 Variance 12 NOTE: FX includes currency effect on sales, net of hedging
Slide 13: Q4 GP +23%: margin increase – higher prices more than offset logistics, procurement cost pressures
Q4 GP +23%: margin increase – higher prices more than offset logistics, procurement cost pressures GP bridge analysis 157 -81 -13 412 335 14 29.4% 30.8% Q4 2020 Quantity Price Cost FX Q4 2021 Variance Variance Variance xx% = % of Sales 13 NOTE: Quantity variance includes mix effect; FX includes curr
Slide 14: FY GP +15%: Volume growth, higher prices more than offset logistics, procurement pressures
FY GP +15%: Volume growth, higher prices more than offset logistics, procurement pressures GP bridge analysis 147 -141 1,412 164 18 1,223 29.6% 29.3% FY 2020 Quantity Price Cost FX FY 2021 Variance Variance Variance xx% = % of Sales 14 NOTE: Quantity variance includes mix effect; FX includes currenc
Slide 15: Q4 EBITDA +23%: higher pricing more than offset logistics & procurement pressures, FX
Q4 EBITDA +23%: higher pricing more than offset logistics & procurement pressures, FX EBITDA Bridge analysis 157 -79 -29 -13 207 168 4 14.7% 15.5% Q4 2020 Quantity Price Cost Operating FX Q4 2021 Variance Variance Variance Expense xx% = % of Sales 15 NOTE: Quantity variance includes mix effect; FX i
Slide 16: FY EBITDA +7%: Volume growth, higher prices more than offset logistics, procurement pressures
FY EBITDA +7%: Volume growth, higher prices more than offset logistics, procurement pressures EBITDA Bridge analysis Bridge Analysis 147 -133 164 -138 3 671 628 15.2% 13.9% FY 2020 Quantity Price Cost Operating FX FY 2021 Variance Variance Variance Expense xx% = % of Sales 16 NOTE: Quantity variance
Slide 17: Adjusted vs. Reported Financial Results
Adjusted vs. Reported Financial Results The financial results in this presentation are presented on an “Adjusted” basis, and differ to some extent from the “Reported” financials contained in the formal financial statements of the Company. ADAMA’s approach on the use of adjustments: – Adjusted result
Slide 18: Strong cash flow improvement aided by marked working capital reduction
Strong cash flow improvement aided by marked working capital reduction Reduction in working capital levels despite strong Cash Flow Strong Balance Sheet sales growth Inventory up in anticipation of further volume growth and Net debt / EBITDA ratio of 1.9x potential supply shortages 1,279 Lower recei
Slide 19: FY2021 Free Cash Flow: $225m improvement over 2020
FY2021 Free Cash Flow: $225m improvement over 2020 Markedly Acquisitions lower and Other investment in NWC Increasing investments in Upgrade & Relocation of facilities in China and Israel Change in Operating Cash Flow: +$408m Change in Investing Cash Flow: -$184m Free Cash Lower Net Change in Change
Slide 20: Outlook
ADAMA Outlook
Slide 21: 2022 Outlook
2022 Outlook ❖ War in Ukraine, related East-European geopolitical uncertainty • ADAMA is continuing to support farmers in Ukraine, yet business in the country is being impacted to a certain extent • At this stage, we anticipate that our overall results for Q1 2022 will not be materially impacted, du
Slide 22: Thank You
Thank You
Slide 23: Adjusted vs. Reported P&L
Adjusted vs. Reported P&L $ million Q4 2021 Q4 2020 %▲ Q4 2021 Q4 2020 %▲ FY 2021 FY 2020 %▲ FY 2021 FY 2020 %▲ Adjusted Adjusted Reported Reported Adjusted Adjusted Reported Reported Sales 1,337 1,141 +17% 1,337 1,141 +17% 4,813 4,128 +17% 4,813 4,128 +17% Gross Profit 412 335 +23% 379 330 +15% 1,4