29 slides from Adama Ltd. Class A's earnings presentation, 2018
Slide 1: Business Update Q4 and Full Year 2017
Business Update Q4 and Full Year 2017 Adama Agricultural Solutions Ltd., one of the world's leading crop protection companies, and Hubei Sanonda Co., Ltd. have combined, creating the only integrated, publicly traded Global-China crop protection company. The Combined Company is to be renamed
Slide 2: Legal notice
Legal notice This presentation is for marketing and information purposes only. By this presentation, Hubei Sanonda Co., Ltd. (the “Company” or “ListCo”) and Adama Agricultural Solutions Ltd (“Adama Solutions”) (together, “ADAMA” or “the Combined Company”) does not intend to give, and the presentatio
Slide 3: ADAMA reports best ever results for Combined Company
ADAMA reports best ever results for Combined Company Sales EBITDA Net Free Income Cash Flow >$3.5bn $646m $280m $310m +6% +15% +44% Halving Net Debt to $442m Net Debt / EBITDA of 0.7x 3
Slide 4: Strong final quarter drives 2017 sales above $3.5bn mark, 15% EBITDA growth to $646m
Strong final quarter drives 2017 sales above $3.5bn mark, 15% EBITDA growth to $646m and 44% Net Income growth over the year Adjusted, ($ million) Q4 2017 Q4 2016 % Change FY 2017 FY 2016 % Change Sales 821 726 +13.0% 3,523 3,331 +5.8% Gross Profit 265 221 +20.2% 1,237 1,077 +14.8% As % of Sales 32.
Slide 5: Significant sales and profit growth Q4 2017
Significant sales and profit growth Q4 2017 Sales Gross Profit EBITDA Net Income Sales +13.0% Gross profit +20.2% EBITDA +19.2% Net margin +3.3pp Volumes +11.3% Gross margin +1.9pp EBITDA margin +0.7pp 821 Q4 2017 Q4 2016 726 265 32.3% 221 100 30.4% 26 84 12.2% 3.1% 11.5% -2 Sales Gross Profit ($mm)
Slide 6: Record high full year results FY 2017
Record high full year results FY 2017 Sales Gross Profit EBITDA Net Income Sales +5.8% Gross profit +14.8% EBITDA +15.0% Net income +44.3% Volumes +8.0% Gross margin +2.8pp EBITDA margin +1.4pp Net margin +2.2pp 3,523 FY 2017 3,331 FY 2016 1,237 1,077 35.1% 646 32.3% 561 280 18.3% 16.9% 194 8.0% 5.8
Slide 7: Significantly reduced leverage driven by further improvement of working capital, robust cash flow
Significantly reduced leverage driven by further improvement of working capital, robust cash flow Ongoing reduction in working Drives strong cash flow Sharply reduced leverage capital levels generation -$30m -$427m 1,361 1,331 40.9% 869 37.9% 1.5x 586 442 310 0.7x Dec-16 Dec-17 Operating Cash Flow F
Slide 8: Business Update
Business Update & | ‘an ce . YP yy Bg ante ial
Slide 9: Adama has Become the Only Integrated Global-China Player
Adama has Become the Only Integrated Global-China Player Bringing the World to China Integration Flotation Combination and full integration with Sanonda Bringing China to the World Combined Company is publicly traded from Day 1 Name of Combined Company to change to ADAMA Shares included on SZ-HK Sto
Slide 10: Our China Cluster
Our China Cluster Already making a significant contribution Global Commercial Procurement Chemical R&D Leadership Excellence Center Partner of Advanced State-of-the-art Choice as only Manufacturing Formulation Global-China Backbone Center crop protection (AI Synthesis) leader Marked domestic and exp
Slide 11: Regional Update
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Slide 12: Regional sales performance Q4 2017 vs. Q4 2016
Regional sales performance Q4 2017 vs. Q4 2016 Sales change by region USD terms Region Constant currency terms Europe 18.9% 12.9% North America 6.6% 6.4% Latin America 1.1% of which, China: (0.4)% USD: +59.8% CER: +52.5% Asia Pacific 36.8% 31.6% India, Middle East & Africa 20.9% 25.8% Adjusting for
Slide 13: Regional sales performance FY 2017 vs. FY 2016
Regional sales performance FY 2017 vs. FY 2016 Sales change by region USD terms Region Constant currency terms (0.1)% Europe 0.9% 6.3% North America 6.2% Latin America 0.5% of which, China: (2.5%) USD: +41.6% CER: +42.7% Asia Pacific 22.2% 21.5% 10.0% 15.3% Adjusting for Indian tax India, Middle Eas
Slide 14: Regional highlights: Europe
Regional highlights Europe • Sales in Europe increased both in quarter and full year • Particularly strong increase in sales (+13% in CER) in the quarter, driven by significant volume growth of an increasingly differentiated portfolio • Adverse weather conditions impacted overall level of demand in
Slide 15: Regional highlights: Latin America
Regional highlights Latin America • Strong performance in Brazil and most countries in the Andean region and Central America in both the quarter and the full year • In Q4, moderate volume growth offset by pricing pressure from constrained demand due to drought conditions in Argentina and Central Ame
Slide 16: Obtaining Regulatory Approval for Flagship NIMITZ in Brazil
Obtaining Regulatory Approval for Flagship NIMITZ® in Brazil NIMITZ® applied to a strawberry field in the US Nimitz is a highly effective novel, non-fumigant nematicide with increased user safety and Already registered in US, Mexico, Australia, Israel, Korea, simplified Canada, Japan, Chile and othe
Slide 17: Regional highlights: North America
Regional highlights North America • Strong sales increase in the quarter and the full Canada: “Thank a Retailer” campaign year, driven by volume growth, including of backward integrated products such as ACEPHATE 97® and ETHEPHON • Hurricanes in southern US in Q3 significantly impacted growers in the
Slide 18: Regional highlights: Asia Pacific
Regional highlights Asia Pacific • Robust +32% growth in Q4 sales, and +22% in full year, driven by significant increase in differentiated product volumes • Strong performances in Vietnam, Indonesia, Australia and Korea, partially offset by dry conditions in New Zealand and Indonesia, low insect pre
Slide 19: Rapidly expanding presence in the large and fast-growing Chinese market
Rapidly expanding presence in the large and fast-growing Chinese market China Sales ($m) All commercial activities being integrated into single +42% platform: 255 +60% 180 • Strong brand • Nationwide market access 43 68 • Portfolio of >200 advanced, differentiated products, supported by key basics Q
Slide 20: Regional highlights: India, Middle East & Africa
Regional highlights India, Middle East & Africa • Robust 26% increase in sales in the quarter and 15% in the full year (adjusting for the change in the Indian tax regime) • Strong performance driven by significant volume growth, despite unfavorable weather conditions with an unstable monsoon season
Slide 21: Innovative AgTech and digital solutions deployed worldwide
Innovative AgTech and digital solutions deployed worldwide More than 20 solutions in 11 countries 21
Slide 22: Bridge Analysis
Bridge Analysis
Slide 23: Sales bridge analysis Q4
Sales bridge analysis Q4 82 (5) 22 821 (5) 726 +11.3% Q4 2016 Quantity Price India Tax FX Q4 2017 Variance Variance Change 23
Slide 24: Gross profit bridge analysis Q4
Gross profit bridge analysis Q4 16 265 2 1 25 221 35.4% 33.8% India GST impact of -$5m on Price & Cost Var Q4 2016 Quantity Price Cost FX Q4 2017 Variance Variance Variance NOTE: Price variance includes mix effect, and is negatively impacted due to India GST change; Cost variance includes Sanonda re
Slide 25: EBITDA bridge analysis Q4
EBITDA bridge analysis Q4 25 (1) 0 ( 21 ) 10 100 84 12.2% India GST impact of -$5m on Price & Cost Var 11.5% Q4 2016 Quantity Price Cost Operating FX Q4 2017 Variance Variance Variance Expenses NOTE: Price variance includes mix effect, and is negatively impacted due to India GST change; FX variance
Slide 26: Sales bridge analysis Full year
Sales bridge analysis Full year 267 (78) (24) 26 3,523 3,331 +8.0% FY 2016 Quantity Price India Tax FX FY 2017 Variance Variance Change 26
Slide 27: Gross profit bridge analysis Full year
Gross profit bridge analysis Full year 95 24 1,237 1,077 75 (34) 35.1% 32.3% India GST impact of -$24m on Price & Cost Var FY 2016 Quantity Price Cost FX and FY 2017 Variance Variance Variance Hedging Gap NOTE: Price variance includes mix effect, and is negatively impacted due to India GST change; C
Slide 28: EBITDA bridge analysis Full year
EBITDA bridge analysis Full year 82 (50) 12 76 (34) 646 561 18.3% India GST impact of -$24m 16.9% on Price & Cost Var FY 2016 Quantity Price Cost Operating FX FY 2017 Variance Variance Variance Expenses NOTE: Price variance includes mix effect, and is negatively impacted due to India GST change; FX
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