Origin Enterprises Plc · EURONEXT:OIZ
Origin Enterprises — Investor Day (June 2012)
64 slides from Origin Enterprises's investor day presentation, Jun 27, 2012
Slide 1: Origin Investor Day, Throws Technology Centre, 27th June 2012
Origin Investor Day Throws Technology Centre 27th June 2012 Connecting agri‐science with farming
Slide 2: Overview
Overview....... Connecting agri-science with farming
Slide 3: Agrii overview
Agrii overview • Market leader in the provision of agronomy services and strategic crop inputs • We employ 880 staff in the UK • We work with c.28,000 farm businesses • We have the most extensive R&D capability in the UK and conduct 40k+ trial plots pa • We have a national seed, fertiliser and distr
Slide 4: Agrii overview: logistics and storage
Agrii overview • We have an extensive logistics and storage capability: – 45 distribution points – 160 vehicles, driving 3m miles per annum – 20 mobile seed plants, 36 agricultural sprayers – manage 200k farm deliveries pa – Service level is 90%+ same day/next day Connecting agri-science with farmin
Slide 5: UK Crop Protection Market
UK Crop Protection Market Connecting agri-science with farming
Slide 6: Agrii overview: national seed business
Agrii overview National Seed sales and production business: Turriff – No. 1 in the market – Leading quality brand – – 5 fixed production locations – 20 mobile seed plants – Production and cleaning capability for: • Cereals Lincoln • Pulses • OSR Ingham • Linseed Finmere Stowmarket • Grass Seed Moret
Slide 7: Agrii overview: national nutrition business
Agrii overview National Nutrition business: – UK market c.3.6m tonnes – No. 2 UK retailer of fertiliser – Working closely alongside our Precision Agronomy offer to develop prescription nutrition offer Connecting agri-science with farming
Slide 8: Months since OFT approval of UAP acquisition
12 months since OFT approval of UAP acquisition • OFT approval received on 3rd June 2011 • Integration – Technical – Commercial – Finance & Admin – IT Connecting agri‐science with farming
Slide 9: Agrii – 12 months since OFT approval
Agrii – 12 months since OFT approval • OFT approval received on 3rd June 2011 • Integration • Simplified Regional Structure Connecting agri‐science with farming
Slide 10: Agrii Structure – simplified and transparent
Agrii Structure – simplified and transparent From To Three Regions North East West Connecting agri‐science with farming
Slide 11: Agrii – 12 months since OFT approval
Agrii – 12 months since OFT approval • OFT approval received on 3rd June 2011 • Integration • Simplified Regional Structure • Built significant regional management capability • Significant investment in IT and Decision Support structures Connecting agri‐science with farming
Slide 12: Agrii Decision Support – a single ERP system
Agrii Decision Support – a single ERP system • November 2011 – Masstock went live with Microsoft Dynamics AX software application – ERP application to manage production, procurement, stocks, sales, logistics and finance • November 2012 – incorporate the UAP business on the system in order to: – Unif
Slide 13: Agrii – 12 months since OFT approval
Agrii – 12 months since OFT approval • OFT approval received on 3rd June 2011 • Integration • Simplified Regional Structure • Built significant regional management capability • Significant investment in IT and Decision Support structures • Launched a unifying and cohesive new identity Connecting agr
Slide 14: Agrii – 12 months since OFT approval
Agrii – 12 months since OFT approval • OFT approval received on 3rd June 2011 • Integration • Simplified Regional In addition Structure we have managed to successfully runsignificant • Built the day to day business,management regional meeting customer expectations in this transformational year for c
Slide 15: What does our combined business look like
What does our combined business look like.... 330 65k tonnes 100k Ha’s OSR agronomists/field cereal seed seed sales 35k tonnes 40k ‘in house’ mobile seed trial plots dressing One of the biggest Influencing Largest Fruit responsibilities in c45% of UK business in UK UK Agriculture farm output Largest
Slide 16: Science & Agriculture – Bridging the gap
Science & Agriculture – Bridging the gap Connecting agri-science with farming
Slide 17: How does agronomy work in the UK?
How does agronomy work in the UK? Agronomist visits farm (up to 25x per year) Analyse farmer’s needs Prescription creation Establishment Variety choice Nutrition Transmission Delivery to of prescription farmer Crop Protection Precision Agriculture Connecting agri-science with farming
Slide 18: Global wheat yields
Global wheat yields Source: Chudleigh 2008, 5 year moving average Connecting agri-science with farming
Slide 19: Connecting agri-science with farming
Source: Arvalis Connecting agri-science with farming
Slide 20: Agrii Research and Development
Agrii Research and Development Why has the rate of increase slowed? Stagnation of genetic progress? Unlikely Connecting agri-science with farming
Slide 21: The widening gap between theoretical and actual yield
The widening gap between theoretical and actual 12 10 Although genetics have shown a 8 theoretical 0.5t/ha Yield (t/ha) increase / decade over 6 last 50 years, the gap between theoretical 4 and actual is widening 2 Why? 0 1970 1980 1990 2000 2010 UK Rec List Trials UK Farm Yields Connecting agri-sci
Slide 22: Agrii Research and Development
Agrii Research and Development Why has the rate of increase slowed? Stagnation of genetic progress? Unlikely More likely causes: Spring drought? High temperatures during grain fill? Loss of fungicide effectiveness? Herbicide resistance? Lack of nutrition innovation? Depletion of soils & soil knowled
Slide 23: Agrii Research and Development: the way forward
Agrii Research and Development The way forward? Agronomy plus Genetics plus Chemistry plus IT/ Decision Support Where’s the innovation going to come from? Is the government going to invest, given that we are well placed to deliver on yield? Agrii has the infrastructure.... The UK is relatively robus
Slide 24: Europe's attractiveness index for food production
Agrii Research and Development Europe has a very high “attractiveness index” for food production / investment Productivity Commercial Technology support adoption N.America S.America Europe Russia / Ukraine China India Europe (incl GM) Adapted from – Tray Thomas, Context Network Connecting agri-scien
Slide 25: £280M per annum: Research and Development in the UK
Agrii Research and Development in the UK The government believes it is investing huge amounts into agricultural R&D £280M per annum Connecting agri-science with farming
Slide 26: How much is being spent on applied agronomy?
Agrii Research and Development But how much is being spent on applied agronomy? Combinable crops Horticulture Connecting agri-science with farming
Slide 27: Our response to the challenge
Agrii Research and Development Our response to the challenge We all know about the Food Challenge..for global food security we need to: Increase by 50% by 2030* Increase by 70% by 2050* The UK is better placed than most countries to respond: High yields Less challenged by climate change Technically
Slide 28: Agricultural research that is independent and integrated
Agrii Research and Development Our response to the challenge • We have a huge responsibility to ensure our customers can access the innovation required to meet the Food Production Challenge in a sustainable and profitable way • Hence we have put Research & Development, together with Information Tech
Slide 29: R&D positioned at the core of the business
Agrii Research and Development Positioned at the core of the business Seeds / Crop Fertilisers / Agronomy Business Contracting Precision Varieties Protection Nutrition Advice Management Services Innovative Research Information & Development Technology Connecting agri-science with farming
Slide 30: R&D positioned at the core of the business
Agrii Research and Development Positioned at the core of the business Seeds / Crop Fertilisers / Agronomy Business Contracting Precision Varieties Protection Nutrition Advice Management Services Innovative Research Information & Development Technology Comprises: Replicated R&D + Agrii Technology sit
Slide 31: Research uplift to plug the knowledge gap
What does this mean? Research uplift to plug the knowledge gap 25% increase in replicated trials 50,000 plots planned for 2012/13 Broader geographic coverage Establishment of 5 major agri-technology centres 60 R&D sites – “know-how” into “do-how” Upscale our Co-ordinated Growing Programmes To comple
Slide 32: Connecting with agri-science
What does this mean? Connecting with agri-science Trials work: Quality of work is paramount √ ORETO approved All trials are ORETO approved – so to CRD standards Agrii has an independent R&D strategy board: Chaired by Professor James Burke Chair of Crop Science at UCD Exclusive services of Bill Angus
Slide 33: Connecting with agri-science
What does this mean? Connecting with agri-science HAUC P ADAS UCD M L A A N N U T F A B C PGRO HGCA R T E U E R D E E University R R Of BBSRC R Reading S University of S Nottingham Connecting agri-science Connecting agri‐sciencewith withfarming farming
Slide 34: R&D positioned at the core of the business
Agrii Research and Development Positioned at the core of the business Seeds / Crop Fertilisers / Agronomy Business Contracting Precision Varieties Protection Nutrition Advice Management Services Innovative Research Information & Development Technology Comprises: Comprises: Replicated R&D + Farm reco
Slide 35: Agrii Information Technology
Agrii Information Technology To further refine crop management Connecting agri-science with farming
Slide 36: Plus, a one-stop shop
- Plus, a one-stop shop Farm software / Benchmarking information Weather Stations / Store and Agronomist Decision process interpretation FARMER Support information Soilquest / Trials Information Connecting agri-science with farming
Slide 37: Keeping our R&D programme relevant
Agrii Research and Development Keeping our R&D programme relevant 660 feet on the ground – excellent avenue for R&D delivery / feedback Agronomist Regular discussion with agronomists Regular interaction with customers Breeders Customers (6000 visitors / annum) Good connectivity with Research eg coll
Slide 38: How can yield be increased?
Agrii Research and Development How can yield be increased? Maximum 10-13%* Either produce SAME from a greater land mass* Or produce MORE from the same land area ..or both! 7.8 * Source: Spink et al (2009), by replacing 10-20% of temp grassland and increasing wheat in arable rotations Connecting agri
Slide 39: Defining yield estimates and the gaps
Agrii Research and Development Defining yield estimates and the gaps 25 Yield t/ha 20 Target Technological gap 15 = estimated yield potential versus trials Practitioner gap = trials versus actual 10 Systems gap = farm / farmer limitations 5 Typical Best Research Bio-physical Genetic farmers farmers
Slide 40: Defining yield estimates and the gaps
Agrii Research and Development Defining yield estimates and the gaps Lack of investment in genetics Soil type / climate Unpredictable disease Resistant grass weeds Precision ag 7.8 VC is 2 - 4t/ha Rates too Wetter west Greater an issue at risk low will benefit accuracy Connecting agri-science with f
Slide 41: Contribution to the business model
Agrii Research and Development Contribution to the business model Innovation puts the customer first Technically led, customer yields increasing We refresh, and continually renew, the Service offer The agronomist’s role has changed significantly Our involvement with Supply-only gives flexibility Acc
Slide 42: To conclude...
To conclude... For the future, risk management will be essential for our customers Key focus for our work Our USP is integration across all platforms of agronomy, and scale We believe this additional investment by our parent company Origin will be critical to generate the yields and profitability th
Slide 43: Total Crop Management
Agrii Research and Development Total Crop Management Agronomy plus Genetics plus Chemistry plus IT/ Decision Support Connecting agri-science with farming
Slide 44: Seed Technology – Role and Relevance
Seed Technology – Role and Relevance Connecting agri‐science with farming
Slide 45: Why are Agrii addressing R&D in a different way?
Why are Agrii addressing R & D in a different way? To differentiate Agrii in the market place To recognise that crop production is about maximising genetic potential through a range of technologies • fungicides, nutrition etc… To develop integrated crop productions capabilities • field to fork Conne
Slide 46: What has changed in the last ten years?
What has changed in the last ten years? Greater political awareness of food security issues and the political and economic consequences of shortages Concerns over diminishing resources • genetic and chemical Constraints on chemical fertiliser usage through the influence of EU and environmental bodie
Slide 47: Short term
Short term Avoid potential variety ‘market failures’ or be aware of agronomic/ disease issues e.g. evolving races of key diseases • Yellow rust, brown rust, Septoria tritici Access to all new data from HGCA • Complemented by Agrii data • In-depth detail of varieties in UK trials currently Connecting
Slide 48: Medium term
Medium term Engage with the breeding community Engage with end users Work with the testing authorities to enhance knowledge and transfer to the farming community Enhance public-private partnerships through the Research councils (primarily BBSRC) and Universities where relevant R&D is being carried o
Slide 49: Longer term
Longer term Connect with International developments in key areas such as • Genetic Modification • Hybrids – all crops including wheat Connecting agri-science with farming
Slide 50: Examples of the impact of recent genetic developments
Examples of the impact of recent ‘genetic’ developments Development of VPM eyespot resistance • integration with chemistry Wheat Orange Blossom Midge resistance • strategic use of insecticides Enhanced Septoria resistance • effect on utilisation of fungicides • strategic as well as volume Ear fertil
Slide 51: Marketing Agrii's R&D Capability
Marketing Agrii’s R&D Capability Connecting agri-science with farming
Slide 52: Current emphasis
Current emphasis To market our core R&D proposition: “To provide our agronomists and customers with an innovative pipeline of new technologies and approaches to growing systems, that allows them to significantly out- perform existing practices” Connecting agri-science with farming
Slide 53: Current emphasis
Current emphasis Relationship-oriented - events-based programme 5 technology centres and 24 demonstration venues 3 x events annually c5000+ attendees Traditional marketing & communications mix Focus on developing relationships between farmers and agronomists Extending sales proposition to existing c
Slide 54: A Typical R&D site Field Day – Communication in practice
A Typical R&D site Field Day – Communication in practice Never miss an opportunity for branding… Last minute preparations! In field presentations on… ...Variety choice / seed rate ... Soil management & cultivations ..and chemistry Connecting agri-science with farming
Slide 55: A transition to a new emphasis
A transition to a new emphasis Why ? Strategic factors affecting our market place Consolidation of farms, more sophisticated management, ROI Drive demand for professional support and production systems Development of IT-based solutions Growth in seed based technology A new generation of farm busines
Slide 56: Market segmentation (basic)
Market segmentation (basic) Business Agronomy Full Agronomy TRADITIONAL SEGMENTS Connecting agri-science with farming
Slide 57: Market segmentation (basic)
Market segmentation (basic) Business Agronomy Full Agronomy Strategic Agronomy Knowledge Support TRADITIONAL SEGMENTS DEVELOPING SEGMENTS Connecting agri-science with farming
Slide 58: Market segmentation (basic)
Market segmentation (basic) Strengthen existing business Relevance to new segments Business Agronomy Full Agronomy Strategic Agronomy Knowledge Support TRADITIONAL SEGMENTS DEVELOPING SEGMENTS Connecting agri-science with farming
Slide 59: Agri-intelligence – the new emphasis
Agri-intelligence – the new emphasis “ To be the most respected knowledge and technology resource for profitable and sustainable agriculture ” Connecting agri-science with farming
Slide 60: Agri-intelligence – the new emphasis
Agri-intelligence – the new emphasis Technology Partners Agronomists Farmers & Growers “ To be the most respected knowledge and technology resource for profitable and sustainable agriculture ” Connecting agri-science with farming
Slide 61: Positioning Agri-intelligence
Positioning Agri-intelligence Authority status Communications Recognised as a Mode, regularity, visibility leader Internal & external Claim our space Agronomist Owning a distinct look Connection and feel Compelling internal story Customer Platforms Utilising our venues & Connection engaging Compelli
Slide 62: Positioning Agri-intelligence
Positioning Agri-intelligence Authority status Communications Recognised as a Mode, regularity, visibility leader Internal & external Digital Agronomist Strategy Claim our space Owning a distinct look Connection and feel Compelling internal story Customer Platforms Utilising our venues & Connection
Slide 63: In Summary
In Summary A significant uplift in marketing activity to profile Agrii’s R&D/technology capability Positioning of ‘Agri-intelligence’ for a new era in farming Accessing new market segments Engaging with the wider market – 12k growers to 20+k growers From hard copy to digital Greater visibility/conne
Slide 64: Thank You
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