Nufarm Limited · ASX:NUF
Nufarm — FY2004 Earnings Presentation
46 slides from Nufarm's earnings presentation, Sep 29, 2004
Slide 1: 2004 Year End Results
2004 Year End Results Doug Rathbone Managing Director
Slide 2: 2004 Results Highlights
2003 12 mths to July 31 Group revenues up 8% Operating profit up 18% Earnings per share up 14% Full year dividends up 15% Operating cash flow Net debt to equity $1.46 billion $64.3 million 41.3 cents 20 cents $218 million 98%
Slide 3: Income: Group Revenues and Operating Profit
tet alee penne “ain ANN NINN Income Group Revenues Operating Profit
Slide 4: Nufarm Group Sales
1600 1400 A$M 1200 1000 Nufarm Group Sales 2000 2001 2002 2003 2004
Slide 5: Nufarm Group EBITDA
Nufarm Group EBITDA 220 200 A$M 180 160 140 2000 2001 2002 2003 2004
Slide 6: Nufarm Group Earnings per Share
Nufarm Group Earnings per Share 2000 2001 2002 2003 2004
Slide 7: Nufarm Group Return on Average Funds Employed
% 16.0 15.0 14.0 13.0 12.0 Nufarm Group Return on Average Funds Employed 2000 2001 2002 2003 2004
Slide 8: Kevin Martin, Chief Financial Officer
co i i ote A NIN af Kevin Martin Chief Financial Officer
Slide 9: Analysis of sales / profit growth
( ia ES Ne Analysis of sales / profit growth Profit before Sales tax Result 2003 1,458 93.7 Industrial chemicals <87> <8.3> Crop protection 208 27.1 1,579 112.5 Other <2> <2.6> 1,577 109.9
Slide 10: Revenues by division
= sin Bu Revenues 2004 2003 -58 billion $1 .46 billion $1 \\\ AS ion Industria Crop Protect
Slide 11: Divisional operating profit
illion 2004 9m $169 Industrial/Other ion i interest and corporate charges) Prof ing Crop Protect lon \\ | Operat 2003 $156.6 m ivisiona (pre tax, D
Slide 12: Sales & Divisional Operating Profit
Sales & Divisional Operating Profit Crop Protection Industrial $m $m 1,600 EE =z 300 1600 — = 200 1,400 1400 175 1,200 1200 150 1,000 1000 125 800 + = 800 100 600 + 600 75 400 + _ 400 50 200 4 200 25 0 0 0 2002 2003 2004 2002 2003 2004
Slide 13: Cashflow highlights
Cashflow highlights * Operating cashflow 202.7m Working capital reduction 65m = Debt reduction 109m « Share issue proceeds 58m
Slide 14: NPAT, EBITDA and Sales compound growth
NPAT Compound growth 11.7% I EBITDA Compound growth 8.5% Sales Compound growth 5.8% 1998 1999 2000 2001 2002 2003 2004 ~@— sales “li ebitda —-®= npat
Slide 15: Doug Rathbone, Managing Director
a) te A NIN af Doug Rathbone Managing Director
Slide 16: Major Drivers
Major Drivers: ad Strong organic growth in USA, Germany, UK sd Solid performance in Australia, helped by BASF products = Expanded product portfolio sd Realignment of French business - lower sales sd Margin improvement (branded sales; efficiencies)
Slide 17: Nufarm Sales by Geography - 2004
op Protection __ Nufarm Sales by Geography - 2004 Americas - 28% Europe - 24% New Zealand - 4% Asia - 5% Australia — 39% Total sales - $1,441 million
Slide 18: Regional markets - Australia/NZ
i | PN MT NTN 0 NN NNN pP Regional markets - Sales (AUD) Australia/NZ $m 700 ® Mixed seasonal conditions 600 ® BASF products a positive 500 ® Growth in total glyphosate market 400 300 ® NZ Captec sales down 200
Slide 19: Regional markets - The Americas
Regional markets - Sales (AUD) The Americas $m US Ag up by 30% (USD) -increased sales of glyphosate, phenoxies, copper fungicides US Turf/Specialty up by 50% (USD) -glyphosate, phenoxy mixtures, new products Canadian sales flat Branded sales in Brazil, Argentina 2002 2003 2004
Slide 20: Regional markets - Europe
Regional markets - Sales (AUD) Europe $m 70 Te ees ® Strong growth in Germany (up 70%) soo & UK (up 50%) 500 ® BASF brands performed well 400 ® Realignment of French business ® Recovery in methyls
Slide 21: Regional markets - Asia
TH nh iNT 0 NNN p P. Regional markets - Sales (AUD) Asia $m ® Benefited from China glyphosate shortage 200 -— ® Increased sales in Japan 150
Slide 22: Phenoxy herbicides
Phenoxy herbicides: bl 3-5% growth in global market (by volume) bd Big 2,4-D seasons in USA and Brazil (60% of total market) bl Increased 2,4-D use in GM cropping systems s BASF acquisition supports Nufarm move to branded sales ® Some volume / price / margin recovery in Nufarm methyis business
Slide 23: Glyphosate
AN Glyphosate: bd Global demand remained strong 5 Approximately 12% price decline in USA (post patent impact); pricing stronger in other markets 8 Strong volume growth in Australia - @ Other - Another record glyphosate season @ Nufarm brand ae alarm branes - Nufarm market share maintained if Roundup
Slide 24: Industrial and other divisions
i bd Chior alkali plants - WA 5 SEAC (pharma intermediates) - France * Fine / Performance / Speciality - USA/Europe 2003 % total revenues 15% Divisional sales $222m # Sale of Fernz business (2003) « Lower sales in other businesses Divisional profit $23.6m « Lower revenues « Higher costs in some area
Slide 25: Proposed investment
Proposed investment September, 2004
Slide 26: Brazil Agriculture: A snapshot
zil INN Agriculture: A snapshot » Accounts for 40% of GDP; employs 50% of workforce » World’s largest producer of sugarcane, coffee, oranges; #2 soybeans =» 180 million hectares of uncultivated land available for agricultural production =» Major increase in conservation farming (glyphosate), with mo
Slide 27: Brazil land use
Millions % of total of ha land Total cultivable area estimated Permanent crop area 15.0 1.8% Seasonal crop area 42.5 5.0% Planted Forests 5.0 0.6% uae re Pasture area 177.0 20.8% Brazil has 19% of the Forest areas and 440.0 53.0% world's arable land protected nature areas
Slide 28: Crop protection sector revenues
Crop protection sector revenues US$ MM 4.400 2001 2002 2003 2004 1995 1996 1997 1998 1999 2000 Ne zp 2005 2006 2007 Source: SINDAG Pr ‘ojected
Slide 29: Crop protection sector breakdown by crop
Crop protection sector breakdown by crop US$ MM Soya Corn Cotton Beans Rice Sugar Wheat Citrus Coffee m@Herbicides “Insecticides ™Fungicides ™Miticides "Adjuvant Source: SINDAG Based on 2003 numbers Source: SINDAG Based on 2003 numbers
Slide 30: Brazil: Growth drivers
zil: Cr Growth drivers: Increased plantings - soybean, corn, wheat, sugar cane, fruit, cotton » Increased technology - the use of inputs like fertilizers and agrochemicals is increasing every year » New diseases / pests - eg soybean rust » Government support of agribusiness «» Growing domestic consu
Slide 31: Brazil crop protection market ranking
Bayer FMC pe! 7 153 1 1 520 Syngenta 1 364 2 2 470 BASF 2 277 3 3 430 Monsanto 4 172 4 4 290 Dow § 171 5 § 250 DuPont 6 154 7 6 217 Milenia 3 185 6 7 179 8 8 8 Nortox 49 11 54 10 120 Hokko 10 68 9 61 11 107 Cheminova 13 29 13 32 12 65 thara 9 70 12 42 13 64 500 130 Others
Slide 32: Agripec company background
Company background: » Established in 1961, moved to current location in 1986 » Employs 365 people (5 sales managers; 40 sales reps) « Head office: Fortaleza pius 6 regional offices/distribution centres « Privately owned by Studart family (father/son in senior management)
Slide 33: Agripec sales force by region
a a pe > sales Northeasten Region (6 salesmen} Centre Region. © {5 salesmen} ; cl : mest Region ~ oe : Cee : (11 salesmen) Southeasten Region. (7 salesmen} ih. Sales Director & Country Manager Location #& Region Sales Manager Location cogs South Region ~ Logistic Genter (9 salesmen) : :
Slide 34: Agripec sales turnover
ncneneanenee ripec sal 250,000 200,000 if We 150,000 7 Wiig 100,000 a Sales Turnover US$M 50,000 Ag o- ul 2000 2001 2002 2003 2004
Slide 35: Market by product class
004 ye Market 772 12451473 |61% | 3100 3600 500 16% CLASSES HERBICIDES 297 337 FUNGICIDES 209 468 INSECTICIDES | 191 339 MITICIDES 37 34 OTHERS 38 67 TOTAL 772 1245 | 473 | 61%
Slide 36: Agripec product split 2003
A NN eae s ll ripec Product split 2003 Fungicide oth ther insecticide 3.67% 1.38% 40.75% 7 - iL - - Herbicide 54.20%
Slide 37: Agripec sales by product
cum TIM NNT ae / Wee ae a ripec sales USD $122M Glyphosate © Monocrotophos Methamidophos 0 Other USD $200M Glyphosate © Tebuconazole Methamidophos © Other
Slide 38: Agripec sales breakdown by crop
elie eg ipec sales brea y Bean 3.8% Cotton 3.5% Citrus 2.4% Wheat 2.2% Others 8.1% USD $122M « Strength in key and growing market segments « |llustrates opportunity for expansion into other developing segments (sugarcane)
Slide 39: _ Age
ea | a. _ Le _ Age Oe REE >.
Slide 40: Agripec site and formulation capacity
# Site area recently doubled through purchase of adjacent property - total area approx 10 hectares # Good standard of plant and equipment, with recent expansions also improving the facilities Formulation capacity — existing: - 70 million litres soluble liquid herbicides - 40 million litres insectici
Slide 41: Meets strategic objectives
Meets strategic objectives > Growth via geographic expansion and portfolio diversity Builds strategic relationships and alliances Solid platform / business foundation > Well resourced sales and development team Excellent geographic coverage Strong product portfolio Will support Nufarm core chemistri
Slide 42: Nufarm will acquire 49.9% of Agripec
=» Nufarm will acquire 49.9% of Agripec » Agripec to retain management control «Total consideration US$120M (approx AUD$170m) = Fully debt funded » Subject to due diligence =» Forecast net earnings contribution ’05: - $12 million (post interest and goodwill amortisation)
Slide 43: Planned divestments
_ Corpo Planned divestments « SEAC pharma intermediates business (France) » Nufarm Specialty Chemicals (Lobeco, South Carolina) « Anticipated total proceeds - $80 million
Slide 44: Forecast gearing levels
Forecast gearing levels » Net debt to equity at July 31, 2004 =" Net debt to equity at July 31, 2005 - including Agripec deal - Agripec plus divestments 61% 88% 75%
Slide 45: Focus on crop protection
Agripec deal and non core business divestments reflect strong focus on crop protection Agriculture sector strong in most markets Nufarm well positioned for growth - Americas - Europe - Asia Further portfolio expansion via a number of new product launches Opportunity for additional efficiencies in ce
Slide 46: Growth objective: approx. 10% profit growth per year
au) vanes es Growth objective: average approx. 10% profit growth per year Sales & Operating Profit after Tax 1600 80 1429.3 1458.8 1400 1213.0 1000 800 600 400 200 1998