Nufarm Limited · ASX:NUF
Nufarm — FY2017 Earnings Presentation
39 slides from Nufarm's earnings presentation, Sep 26, 2017
Slide 1: 2017 Full Year Results
For personal use only 2017 Full Year Results September, 2017
Slide 2: Disclaimer
Disclaimer For personal use only General This presentation has been prepared by Nufarm Limited. The information contained in this presentation is for informational purposes only. The information contained in this presentation is not investment or financial product advice and is not intended to be us
Slide 3: 2017 Full Year results Overview
For personal use only 2017 Full Year results Overview Greg Hunt Managing Director / CEO 3
Slide 4: Prioritising the safety of our people
Prioritising the safety of our people For personal use only Nufarm Global LTIFR - rolling 12 month average 3.00 2.50 2.00 1.50 1.00 0.50 0.00 LTIFR – lost time injury frequency rate is the number of lost time injuries per one million hours worked Clear performance improvement in the lost-time injury
Slide 5: Delivering on our commitment to build a better Nufarm
Delivering on our commitment to build a better Nufarm For personal use only • As we continue our transformation, these results Last 3 years have again demonstrate the strong progress we have delivered: made towards: ➢ Revenue growth of − Building a more cost-competitive business that 19% is able to
Slide 6: Strong underlying NPAT growth
Strong underlying NPAT growth Headline results For personal use only (A$ millions) • Revenue growth of 12% FY17 FY16 Change • Underlying EBIT growth of 5%, Revenue 3,111 2,791 ▲ 12% despite industry headwinds Underlying EBIT 302 287 ▲ 5% • Underlying NPAT up 25%, driven by higher EBIT, and reduced i
Slide 7: 2017 Full Year results Financials
For personal use only 2017 Full Year results Financials Paul Binfield Chief Financial Officer 7
Slide 8: Good operational result in a challenging environment
2017 Full Year results Good operational result in a challenging environment For personal use only • Organic growth in our strategic focus markets • Commitment to performance improvement program delivers better than expected benefits • All regions delivered earnings growth except for LATAM (due to di
Slide 9: 2017 results drivers
2017 results drivers Profit growth and performance improvement For personal use only program deliver benefits EBIT bridge (FY16 to FY17) 9
Slide 10: Performance improvement program progress report
Performance improvement program progress report For personal use only Targeted gross Initiatives Status Update savings by FY 2018 All projects completed. ANZ benefits Manufacturing footprint $40m somewhat offset by pricing competition as Nufarm secures increased share Wyke and Laverton completed. Ot
Slide 11: Argentina market
Argentina market FY17 market dynamics For personal use only • Market demand delayed due to excessive rain • Elimination of import restrictions opened up the market to traders, with many competitors bringing in large volumes to meet aggressive growth forecasts • Delayed purchasing and more tender bus
Slide 12: Operating expenses reflect investment in transformation
Operating expenses reflect investment in transformation For personal use only Control of operating expenses remains an important management objective • SG&A spend largely in line with sales (A$ millions) Full year ended 31 July growth. Importantly, a re-weighting of 2017 2016 expenses with investmen
Slide 13: Active balance sheet management
Active balance sheet management For personal use only Further reduction in ANWC/Sales to 36.8% ANWC / Sales(3) More than $300m of working capital eliminated • Average NWC/sales at 36.8%, materially better than the from the balance sheet 40% target between FY14 and FY17 • More than $300 million in wo
Slide 14: Interest and net debt
Interest and net debt Net interest expense moderately lower and improved For personal use only management of foreign currency exposures (A$ millions) Full year ended 31 July • Net interest expense decrease due to lower 2017 2016 average net debt during the year Interest income (8.6) (15.7) Interest
Slide 15: Material items relate to the performance improvement program
Material items relate to the performance improvement program For personal use only Benefits of program being delivered ahead of schedule NPAT reconciliation (A$ millions) • Material items relate to: Full year ended 31 July 2017 2016 − Restructuring of Australian marketing Underlying NPAT 135.8 108.9
Slide 16: Cash flow
Cash flow • Cash flow significantly impacted by higher July net working capital, due to later seasonal conditions delaying the timing of sales • For personal use only Current year material item cash inflow $32m, including proceeds of non-core asset sales $49m • Expect FY18 PPE and intangibles capex
Slide 17: Segment results
For personal use only 2017 Full Year results Segment results Greg Hunt Managing Director / CEO 17
Slide 18: Major segments
Major segments For personal use only Sales by Product Sales by Geography North America Insecticide 25% 11% Australia/ New Zealand Herbicide Fungicide 21% 63% 2017 11% 2017 $3,111m Asia $3,111m Other* Latin 5% America 10% Seed Tech 26% Seed Tech 5% 5% Europe 18% *Other includes Croplands equipment; a
Slide 19: Revenue growth across the business
Revenue growth across the business For personal use only Note: Europe revenue grew 7% when measured in constant currency 19
Slide 20: Regional review: Australia/New Zealand
Regional review Australia/New Zealand For personal use only Sales EBIT 650 51.6 60 52.7 A$(m) FY17 FY16 % 47.0 33.9 50 600 Sales 654.2 554.0 18.1% 40 550 Underlying EBIT 51.6 47.0 9.9% 30 500 20 Underlying EBITDA 64.9 61.8 5.0% 450 10 Underlying EBITDA 9.9% 11.2% 606 582 554 654 400 0 Margin FY14A F
Slide 21: Regional review: North America
Regional review North America For personal use only Sales EBIT 800 70.3 80 A$(m) FY17 FY16 % 750 70 59.3 700 60 Sales 761.1 653.9 16.4% 650 50 38.8 Underlying EBIT 70.3 59.3 18.5% 600 40 550 20.6 30 Underlying EBITDA 89.3 76.9 16.1% 500 20 Underlying EBITDA 11.7% 11.8% 450 10 514 589 654 761 Margin
Slide 22: Regional review: Latin America
Regional review Latin America For personal use only Sales EBIT 800 89.4 120 780 Brazil EBIT 100.4 A$(m) FY17 FY16 % 100 760 Sales 821.8 740.7 11.0% 740 76.7 71.6 80 720 Underlying EBIT 89.4 100.4 -10.9% 700 60 680 Underlying EBITDA 95.6 104.4 -8.5% 40 660 640 20 Underlying EBITDA 11.6% 14.1% 620 662
Slide 23: Regional review: Europe
Regional review Europe For personal use only Sales EBIT 580 100 85.8 570 90 A$(m) FY17 FY16 % 73.0 80 560 64.4 Sales 539.8 550.4 -1.9% 70 550 60 Underlying EBIT 85.8 73.0 17.5% 54056.4 50 530 40 Underlying EBITDA 121.4 110.3 10.0% 30 520 20 Underlying EBITDA 22.5% 20.0% 510 10 555 545 550 540 Margin
Slide 24: Regional review: Asia
Regional review Asia For personal use only Sales EBIT 24.4 160 30 A$(m) FY17 FY16 % 18.1 22.8 155 25 Sales 165.6 148.6 11.5% 19.5 150 20 Underlying EBIT 24.4 22.8 7.0% 145 15 Underlying EBITDA 28.3 26.7 6.0% 140 10 135 5 Underlying EBITDA 17.1% 18.0% 141 155 149 166 Margin 130 0 FY14A FY15A FY16A FY
Slide 25: Seed Technologies
For personal use only 2017 Full Year Results Seed Technologies Brent Zacharias Group executive - Nuseed 25
Slide 26: Segment result: Seed technologies
Segment result Seed technologies For personal use only Sales EBIT 175 37.2 36.4 40 A$(m) FY17 FY16 % 170 31.8 35 165 28.7 30 Sales 168.6 143.6 17.4% 160 25 Underlying EBIT 36.4 28.7 26.7% 155 20 150 15 Underlying EBITDA 45.3 35.5 27.5% 145 140 10 Underlying EBITDA 26.9% 24.7% 135 5 144 160 144 169 M
Slide 27: Omega-3 canola update
Omega-3 canola update Commercialisation planned for FY18/19, subject to For personal use only appropriate regulatory approvals • Regulatory submissions filed earlier this year in Australia, the United States and Canada – Seeking approval for commercial cultivation and for uses in food and feed Regul
Slide 28: Strategic priorities
For personal use only 2017 Full Year results Strategic priorities Greg Hunt Managing Director / CEO 28
Slide 29: Focus on key geographies and core crops
Focus on key geographies and core crops For personal use only PASTURE, SOYBEAN TREES, NUTS, CORN CEREAL TURF & VINES & ORNAMENTALS VEGETABLES 29
Slide 30: Organic growth in hub countries
Organic growth in hub countries Sales growth of branded products in local currency For personal use only 53% 5% 66% 17% 9% 19% Note: Poland sales first consolidated in November 2015. 30
Slide 31: Positioned for future growth
For personal use only Positioned for future growth CUSTOMER PORTFOLIO SUPPLY CHAIN ONE NUFARM EXCELLENCE EXCELLENCE EXCELLENCE ENABLERS The simple and easy Identify and act upon Deliver quality Enabling our way we interact with growth and market product on time at a organisation to be our customer o
Slide 32: Outlook
For personal use only 2017 Full Year results Outlook Greg Hunt Managing Director / CEO 32
Slide 33: Group outlook
Group outlook • Agrochemical market to remain flat to slightly positive growth in CY2017 For personal use only • New product introductions; our focus on higher value segments; and further efficiency improvement program benefits expected to drive revenue and EBIT growth across the business: − Brand c
Slide 34: Nufarm — Grow a better tomorrow
Nufarm — Growa better tomorrow.
Slide 35: Supplementary information
For personal use only Supplementary information
Slide 36: Non IFRS disclosures and definitions
Non IFRS disclosures and definitions For personal use only Term Definition Underlying NPAT Profit / (loss) for the period attributable to the equity holders of Nufarm Limited less material items Underlying EBIT Earnings before net finance costs, taxation and material items Underlying EBITDA Earnings
Slide 37: Constant currency results
Constant currency results For personal use only (A$ millions) Full year ended 31 July 2017 2017 2016 Constant Reported Constant Reported currency Translation impact currency currency(1) currency % • Sales growth 13.8% on constant currency basis Revenue 3,111.1 3,175.8 2,791.2 13.8% Underlying SG&A •
Slide 38: Non IFRS information reconciliation
Non IFRS information reconciliation For personal use only 12 months ended 31 July 2017 12 months ended 31 July 2016 Material Material Underlying items Total Underlying items Total $000 $000 $000 $000 $000 $000 Revenue 3,111,115 - 3,111,115 2,791,217 - 2,791,217 Cost of sales (2,195,350) 2,515 (2,197
Slide 39: Non IFRS information reconciliation
Non IFRS information reconciliation For personal use only Twelve months ended 31 July 2017 2016 $000 $000 Underlying EBIT 302,285 286,696 Material items impacting operating profit (23,043) (83,610) Operating profit 279,242 203,086 Underlying EBIT 302,285 286,696 add Depreciation and amortisation exc