American Vanguard Corporation · NYSE:AVD
American Vanguard — Investor Presentation (May 2018)
30 slides from American Vanguard's investor presentation, May 2018
Slide 1: American Vanguard
American Vanguard Providing the Means to Safe, Efficient & Abundant Agriculture Worldwide May 2018
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: American Vanguard Overview
American Vanguard Overview ► Traded on NYSE:AVD - - - Founded in 1969…currently 550 employees ► Fully integrated operation - - - excluding basic R&D ► Business Model: Acquire, develop, manufacture and market a diverse group of specialty agricultural products Mission: Enhance agricultural productivit
Slide 4: Proven Acquisition & Licensing Experience
Proven Acquisition & Licensing Experience Phosdrin SmartBox Ambush 25WP E-Z Load Mocap Hyvar Thimet Mevinphos Permethrin Nemacur (DuPont) System Phorate System (DuPont) Aztec (bag) (Dupont) (Syngenta) (BASF) (UAP) 2015 1989 (Bayer) 2000 2002 2005 2007 2010 Scepter Fruitone (BASF) NAA Fortress Deadli
Slide 5: AMVAC Diversified Participation
AMVAC Diversified Participation Peanuts Other 3% Fruits & 4% Vegetables Sugar Crops 28% 6% Cotton 10% 2017 Revenue $355 Million Specialty 14% Corn 18% Potatoes 17% 5
Slide 6: AMVAC United States Manufacturing Sites
AMVAC United States Manufacturing Sites Los Angeles, CA Axis, AL Hannibal, MO Marsing, ID 6
Slide 7: Technology Innovation
Technology Innovation 7
Slide 8: Pillars of AMVAC's Growth
Pillars of AMVAC’s Growth Adama USA Products/Syngenta Asia/Pacific Mexico/AgriCenter/OHP Hong Kong AMVAC LLC Joint Venture Australia Acquisitions Hyvar & Krovar BiPA TyraTech / Envance Iowa Partnerships Biologicals State Strategic Project Alliances Corn/Soybeans “Key” to our Cotton/Peanuts Growth Pu
Slide 9: Debt Level & Liquidity
Debt Level & Liquidity $120 $143 $125 $139 $140 $99 $99 $100 $95 $125 $105 $120 $91 $120 $88 $86 $85 $83 $78 $80 $100 Revolver Balance (Millions) $69 Liquidity (Millions) $66 $80 $60 $58 $50 $45 $60 $41 $40 $30 $40 $27 $20 $20 $‐ $‐ Revolver Balance Liquidity 9
Slide 10: Historical EBITDA Analysis
Historical EBITDA Analysis 90 80 70 60 50 Millions 40 30 20 10 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Est* 10
Slide 11: Shareholder Equity Growth
Shareholder Equity Growth Since 2008 has more than doubled $350 $300 $250 Millions $200 $150 $100 $50 $‐ 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 2018 11
Slide 12: American Vanguard Corporation: Market Valuation
American Vanguard Corporation: Market Valuation Market Data 5/5/2006 10/2/2012 12/31/2017 Stock Price $37.00/share $36.74/share $19.65/Share Shares Outstanding 27.0MM 28.9MM 29.7MM Market Valuation $1.00B $1.06B $584MM AVD Earnings Report 3/31/2006 9/30/2012 12/31/2017 Assets $213MM $398MM $536MM De
Slide 13: Industry Consolidation = Opportunity
Industry Consolidation = Opportunity 13
Slide 14: 2017 AMVAC Key Acquisitions
2017 AMVAC Key Acquisitions HISTORIC REVENUE US Ag Herbicide, Insecticide, Fungicide (ADAMA) $30MM Mexico Portfolio of Niche Products (Syngenta) $10MM LATAM Acquire Regional Distributor (AgriCenter) $60MM US Acquire Non‐Crop Company (OHP) $20MM Larger transactions may be done in collaboration with s
Slide 15: Grupo AGRICenter
Grupo AGRICenter Market Access Platform ► Currently Operates in 7 Countries ► Annual Sales $50‐$60 Million ► Gross Profit Margin 25+% ► Product Mix ► Insecticides ≈ 25% ► Fungicides ≈ 30% ► Herbicides ≈ 20% ► Nutrients & Other ≈ 25% ► Proven Customer Focused Consulting Services ‐ Identify Problems a
Slide 16: OHP
OHP Horticulture Focus ► Greenhouse & Nursery Applications ► Annual Sales $20‐$25 Million ► Gross Profit Margins ≈ 40% ► Business Model: License, Develop, Register, Market, Sell and Service Products for Horticulture Applications in the United States ► 17 Very Experienced Personnel Acquisition increa
Slide 17: New Product Development Pipeline Will Provide Growth and Balance
New Product Development Pipeline Will Provide Growth and Balance 60,000 50,000 40,000 Fumigant Fungicide 30,000 Herbicide Insecticide Multi 20,000 Nematicide PGR 10,000 ‐ 2018 2019 2020 2021 2022 Net Sales Net Sales Net Sales Net Sales Net Sales 17
Slide 18: Biological Innovation and Global Market Access Model
Biological Innovation and Global Market Access Model Technology Government Providers Potential Funding Licenses i.e. FEM i.e. EU Grant Screening Trichoderma Business/Technical Opp Registration in EU for Regulatory Vine, Vegetable, Fruits Development Trials Americas EU M.E. AMVAC Asia (TBD) Belchim U
Slide 19: AMVAC Global Operations
AMVAC Global Operations AMVAC AMVAC Canada Office Sales Office Netherlands BV* Ukraine AMVAC AMVAC Global HQ Sales Office Huifeng AMVAC France Innovation Co., Ltd Joint Venture Quimica AMVAC de Mexico* AMVAC Singapore Pte Ltd* AMVAC de Costa Rica* AMVAC do Brasil Representações LTDA* *Subsidiaries 1
Slide 20: HuiFeng AMVAC Innovation Company, Ltd
HuiFeng AMVAC Innovation Company, Ltd • Objective: Facilitate technology and market access • Platform for Collaboration: Technology development Securing product registrations Co‐marketing of each partner’s crop protection products and equipment systems Funding product acquisition/licensing o
Slide 21: SmartBox
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 product tran
Slide 22: MUCH Better Accuracy than Mechanical
MUCH Better Accuracy than Mechanical In‐cab Monitor & Controls Records FIELD application rates, but is not integrated with current GPS systems nor does it create as‐applied maps 22 22
Slide 23: SIMPAS
Smart I ntegrated Multi‐Product Prescription Application System SIMPAS 3 Product Per Row RFID ‐tagged SmartCartridges™ • Onesystemforinsecticides,fungicides, nutritionals& biologicals • Dryand/orliquid*productsapplied simultaneously • RFIDSmartCartridge™packaging (Software controlsproduct placement)
Slide 24: SIMPAS makes it EASY to Practice 4R's Stewardship
SIMPAS makes it EASY to Practice 4R’s Stewardship of Crop Protection Chemicals while Planting RIGHT PLACES @ RIGHT RATES RIGHT TIME RIGHT PRODUCTS *Other: Plant Growth Regulators, Biostimulants, Inoculants, Specialty Nutritionals, etc. 24
Slide 25: SIMPAS Technology Video
SIMPAS Technology Video available on youtube https://www.youtube.com/watch?v=n7dt1I‐ cmuw&feature=youtu.be 25
Slide 26: Crop-Specific Opportunities & Unmet Under-Satisfied Needs – Summary
Crop‐Specific Opportunities & Unmet Under‐Satisfied Needs – Summary Row Crops U.S. Acreage: ~183 M Corn Soybeans Cotton Potatoes Sugar Beets Peanuts Acreage Planted ~88M ~82.65M ~8.58M ~1.065M ~1.16M ~1.63M Total Treatable Opportunity ~134M Acres ~145M Acres ~18M Acres ~3.1M Acres ~2.9M Acres ~8.1M
Slide 27: Market Opportunities
Market Opportunities Crops Geographies All row crops • US • Corn • Brazil/Argentina Large farms, • Soybeans • China technology adopters • Cotton • Eastern Europe • Potatoes • Sugar beets • UK, EU • Peanuts • Canada Heavily regulated • Sugarcane • Australia • etc. 27 27
Slide 28: SIMPAS: Collaboration Partners
SIMPAS: Collaboration Partners SIMPLOT Grower Solutions ► Leading full‐service agronomic input supplier ► SmartFarm® data analysis system ► Focus on “soil health” and soil selective treatments to maximize grower ROI and environmental stewardship TRIMBLE Ag Solution Services ► Superior geo‐positionin
Slide 29: Guidance . . . . 2018 Full-Year
Guidance . . . . 2018 Full‐Year ► Revenue: $450 ‐ $480 Million ► Gross Margin: 38% ‐ 40% (Subject to quarterly mix) ► Operating Expenses: $150 ‐ $160 Million ► Tax Rate: 25% ‐ 27% (estimated for all jurisdictions) ► Cash Generation: Approximately $50+ Million 29 29
Slide 30: AMVAC Take Away Message
AMVAC Take Away Message ► Solid Base Business Niche market positions; solid Balance Sheet ► Product Portfolio Expansion Acquisition; licensing; internal development; partnership/collaborations ► Increasing Market Access Domestic programs; international alliances ► Technology Innovation Chemical prod