Ag Growth International Inc. · TSX:AFN
Ag Growth International — Investor Presentation (July 2015)
28 slides from Ag Growth International's investor presentation, July 2015
Slide 1: Expanding Our Growth Platform
E X PA N D I N G O U R G ROW T H P L AT FO R M JULY 2015 1
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT Certain statements contained herein constitute forward-looking statements that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. Forward-looking statements may contain such words as “
Slide 3: Corporate Overview
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Slide 4: Corporate Overview
CORPORATE OVERVIEW HEADQUARTERS Winnipeg, Manitoba HISTORY Founded in 1996; IPO 2004 (TSX: AFN) MARKET CAP ~$670M TOTAL SALES Pro Forma Fiscal 2014 $600 million EMPLOYEE COUNT 2000 employees Total of 15 facilities and 1.6M combined sq.ft. MANUFACTURING DIVISIONS manufacturing capacity located in Can
Slide 5: Vision and Strategy
To Be the Global Leader in Grain Handling, VISION: Storage and Conditioning Solutions S T R AT E G Y: Focused catalogue expansion, acquiring leading brands 1. to provide complete grain handling, storage and conditioning solutions Geographic diversification to provide growth in emerging markets, miti
Slide 6: Corporate Overview: Service all key grain handling segments
CORPORATE OVERVIEW Service all key grain handling segments EXPORT DESTINATION FARM ELEVATOR PORT PORT PROCESSOR 6
Slide 7: AGI History
A WESTEELS PTM= £ A AIRLANco eT eeeneeTt | NT RAINICO Z UNION IRON= GRAIN GUARD= SMAGI= | [D2 1998 a RBATCO SLT FOUNDED NovemBeR, 1996 AGIZ= 7
Slide 8: Grain Handling Equipment
© World's largest manufacturer of portable grain handling equipment Low price point item with a 3-5 year replacement cycle * Dedicated production facilities & low cost producer status ¢ Dominant dealer network & extensive warehousing system PORTABLE GRAIN HANDLING WESTFIELD= WHEATHEART= BATCO= REM=
Slide 9: Key Demand Drivers
KEY DEMAND DRIVERS Crop Production Volume Harvest Conditions Storage Practices Infrastructure Gap 9
Slide 10: Expanding Growth Potential
EXPANDING GROWTH POTENTIAL
Slide 11: Westeel Transaction
WESTEEL TRANSACTION PURCHASE PRICE $205M net of cash & redundant asset TRAILING EBITDA(1) $20M 2014E including corporate cost adjustments SYNERGIES Anticipated near term annual synergies of approximately $5M ADJUSTED EBITDA REVENUE A N D E B I T D A M A R G I N (1) 16.7% $202.0 13.9% $25.4 11.2% 11.
Slide 12: Complementary Geographies
COMPLEMENTARY GEOGRAPHIES Central & Western Europe Canada RUK U.S. Middle East / North Africa Latin America Australia / New Zealand 12
Slide 13: International Growth Opportunities
INTERNATIONAL GROWTH OPPORTUNITIES The international grain storage deficit creates significant short and long term growth Provides scale to compete against large international players CZECH REPUBLIC More robust catalogue enhances ability to provide customers with complete storage and handling
Slide 14: Revenue Synergies
REVENUE SYNERGIES Progress Key Actions • Increase smoothwall bin capacity Smoothwall bin growth 5% • Regional expansion driven by transportation constraints • Batco under bin for seed systems launched Catalogue bundling opportunities 25% • Programmed selling of full seed and fertilizer catalogue • T
Slide 15: Cost Synergies
COST SYNERGIES Progress Key Actions • Align Westeel organizational structure to fit AGI Organizational Redesign 65% • Sales, marketing, finance, IT, purchasing, operations & engineering changes • Bring outsourced parts in-house • Standardize design, engineering, production, parts and Outsourcing & P
Slide 16: Outlook
OUTLOOK
Slide 17: Canadian Outlook
CANADIAN OUTLOOK Lack of moisture in majority of growing regions increasing the likelihood of significant crop damage Unlikely that sufficient moisture will be received in next few weeks to produce average yields Impacts all on-farm business lines including storage, aeration and portable grain
Slide 18: U.S. Outlook
U.S. OUTLOOK Cautious buying behaviour continues as dealers and farmers sit on sidelines waiting for indications of favourable crop development Crop conditions generally favourable, however USDA ratings have declined in recent weeks Pace of commercial business improved subsequent to Q1 but mar
Slide 19: Westeel: Geographic Balance
WESTEEL: GEOGRAPHIC BALANCE 2014 REVENUE BY GEOGRAPHY S TA N D A L O N E COMBINED 19% 26% AGI 17% 55% 44% 39% Westeel 12% 83% 5% Canada U.S. International 19
Slide 20: Portable Grain Handling
PORTABLE GRAIN HANDLING Portable grain handling has a higher level of concentration in the US PORTABLE GRAIN HANDLING market Portable Grain Handling by Portable grain handling represents Geography our highest margin product line 2% Strongest network of warehouse and stock point locations in th
Slide 21: International
INTERNATIONAL Stronger start to international business in 2015. Sales plus order backlog at March 31, 2015 of $55M (2014- $38M) Greater geographic diversification as secondary markets gain traction Anticipate year over year growth Remain positive regarding long term infrastructure gap 21
Slide 22: International Business & Outlook
INTERNATIONAL BUSINESS & OUTLOOK
Slide 23: International Strategy
INTERNATIONAL STRATEGY Target large corporate farms and multinational grain traders Well capitalized Multi-year CAPEX spends R O M A N I A EDC insured Bundled sales, leveraging catalogue Repeat business confirms sustainability UKRAINE 23
Slide 24: Russia and Ukraine
RUSSIA AND UKRAINE Sales commenced in 2011: 2011 - $11M 2012 - $27M 2013 - $57M 2014 - $37M RUK – 185 M Hectares Short term challenges Continue to sell, ship and quote new projects Multi National Companies still investing Strong long term potential USA – 174 M Hectares 24
Slide 25: Latin America
LATIN AMERICA Significant infrastructure opportunity Tariff free (ex-Brazil) – compete effectively from North America AGI dedicated personnel – 2012 Awarded five major projects in 2014 totalling approx. $20 million L AT I N A M E R I C A 25
Slide 26: Brazil Opportunity
BRAZIL OPPORTUNITY Less than 15% on farm storage capacity Historical lack of investment in infrastructure Lack of rail or inland waterway options Road transport costs significantly higher than ROW Antiquated, inefficient port facilities Organic entry into market 26
Slide 27: Brazil Progress
BRAZIL PROGRESS Team of five led by Wilfried Toth, former leader of Kepler Weber Continue to explore M&A as we enter the market organically Commercial: Focus on the commercial business with port and inland facilities Leverage AGI’s North American relationships and brand strength Farm: Earl
Slide 28: Expanding Our Growth Platform
E X PA N D I N G O U R G ROW T H P L AT FO R M 28
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