Nufarm Limited · ASX:NUF
Nufarm — Investor Day (February 2022)
64 slides from Nufarm's investor day presentation, Feb 3, 2022
Slide 1: Nufarm Investor Event, Trading Update and Outlook
Nufarm Limited ACN 091 323 312 3 February 2022 103-105 Pipe Road Laverton North VIC 3026 Australia ASX Release – Company Announcement +61 3 9282 1000 nufarm.com Nufarm Investor Event, Trading Update and Outlook Enclosed is the presentation to be delivered today at Nufarm’s virtual investor event by
Slide 2: Nufarm Limited Investor Event (Virtual)
Nufarm Limited Investor Event (Virtual) 3 February 2022
Slide 3: Disclaimer
Disclaimer General This presentation has been prepared by Nufarm Limited. The information contained in this presentation is for informational purposes only as at the date of this presentation on 3 February 2022. The information contained in this presentation is not investment or financial product ad
Slide 4: Today's Agenda
Today’s Agenda FOUNDATION FOR GROWTH CEO, Greg Hunt GROWTH – CROP PROTECTION Group Executive Portfolio Solutions, Rico Christensen GROWTH – SEED TECHNOLOGIES Group Executive Nuseed, Brent Zacharias CAPITAL ALLOCATION Chief Financial Officer, Paul Townsend GROWTH SUMMARY CEO, Greg Hunt Q&A 3 C2 - Int
Slide 5: Foundation for Growth
Foundation for Growth CEO, Greg Hunt
Slide 6: Positive momentum continues in FY22
Q1FY22 trading conditions have continued to be favourable The outlook for soft commodity prices remains positive, driving increased plantings Positive momentum Seasonal conditions resulting in strong demand for crop protection products continues in FY22 Q1FY22 Revenues increased by 36% vs Q1 FY21 AN
Slide 7: Credible path to revenue aspiration in excess of $4 billion by FY2026
Management can see a credible path to target a revenue aspiration in excess of $4 billion by FY2026 Crop Protection • Steady above market growth (global market expected to grow at 2.3%*) • Existing pipeline, New Product FY2026 aspirations are to increase Introductions and winning share customer rele
Slide 8: Four megatrends that are expected to impact the future of Nufarm
Four megatrends that are expected to impact the future of Nufarm 1 2 3 Sustainable 4 The Rise of Global Land Agricultural Sustainable Nutrition Productivity Practices Crops Plant grown 9.7B by No new land Water Carbon jet fuel 20501 Plant grown 7.7B in Increased yields Soil health Eco-systems Omega
Slide 9: Macro trends supporting our growth aspirations
Macro trends supporting our growth aspirations Expected Global Cereals for human consumption & demand by animal feed increase by 50% to The global crop protection $68.0b 3 billion tonnes market is forecast to grow 2050 at 2.3% pa to $60.8b $68.0 billion Meat consumption up 75% to 1 50% 450 million t
Slide 10: Our transformation has created our growth platform
Our transformation has created our growth platform… Achieving strategic priorities to set up the foundations for superior growth Manufacturing footprint & Investment in Portfolio focus on core Customer & Commercial Supply Chain efficiency manufacturing excellence crops in key geographies Excellence
Slide 11: Delivering revenue and earnings growth and a stronger balance sheet
… delivering revenue and earnings growth and a stronger balance sheet STRENGTHENED NUFARM PLATFORM (year ended 30 September 2017 – 30 September 2021)(1) Revenue growth uEBITDA growth(2,3) 41% 31% Net Debt / uEBITDA(3) Average NWC / sales(4) reduced to reduced to 0.9x 34% (1) Comparison on a proforma
Slide 12: Global operations to better serve our customers and minimise risk
We have global operations that mean we can better serve our customers and also minimise risk to Nufarm overall Customer-centric supply chain Leading Market Positions Diverse & Balanced Portfolio Formulation facilities close to end users Established relevance in our core markets Minimising risk of im
Slide 13: Focused on markets, crops and segments where we can be most successful
In both our businesses, we are focused on markets, crops and segments where we can be most successful… Crop 3 5 9th 3 rd Protection Regions Crops Largest crop Largest company protection globally focused Cereals APAC TNVV company on the off-patent EuMEA Pasture, T&O globally1 segment1 North America C
Slide 14: Established strategic alliances and commercial relationships
Established strategic alliances and commercial relationships • Range of collaboration agreements covering product development, manufacturing and distribution of a number of high value Strategic alliance with solutions from the Sumitomo Chemical pipeline, particularly in fungicides Sumitomo Chemical
Slide 15: Sustainability – A key feature of our growth aspirations
Sustainability – A key feature of our growth aspirations Turning world-leading scientific Crop breakthroughs into sustainable local solutions Targeting 30% reduction Protection in scope 1 and 2 greenhouse gas emissions Growing the % of biological solutions in from our manufacturing sites by 2030 our
Slide 16: Nufarm's global management team
Nufarm’s global operations are led by a highly experienced Greg Hunt Managing Director & Paul Townsend Chief Financial Officer Michelle Monteiro Group Executive John Holding Group Executive Chief Executive Officer Company Secretary Growth People & Performance management team that have the skills and
Slide 17: Uniquely positioned to meet its growth aspirations
We believe Nufarm is uniquely positioned to meet its growth aspirations Customer Relevant Portfolio Globally Strengthened Focused Encompassing Efficient Governance & Operation Emerging Technologies Supply Chain Execution Capability • Customer needs are at the centre of • Broad and relevant portfolio
Slide 18: Growth platforms supporting revenues in excess of $4 billion by FY2026
We have a number of growth platforms that support our aspiration of revenues in excess of $4 billion by FY2026 Nufarm 5 Year Revenue Aspiration ($AUD) $4.4B All statements in relation to future revenue aspirations are based on management estimates and reflect management’s internal goals and should n
Slide 19: Growth – Crop Protection
Growth – Crop Protection Group Executive Portfolio Solutions, Rico Christensen
Slide 20: Portfolio is focused on meeting customer needs
Nufarm’s Portfolio is focused on meeting customer needs A relevant portfolio of foundational, differentiated and innovative products backed by technical support and advice that are focused on customer needs in specific segments. FOUNDATIONAL DIFFERENTIATED INNOVATIVE Quality off-patent portfolio New
Slide 21: Diverse and relevant portfolio of solutions
Nufarm has a diverse and relevant portfolio of solutions We allocate We manage We support We have We are evaluating New Products are >3.4% 280 >3,300 248 39 >20% of our revenue active registrations projects in our leads from of our revenue to Development ingredients & across pipeline external & Defe
Slide 22: We maximise our returns through two critical practices
We maximise our returns through two critical practices FOCUSED SEGMENTS GLOBAL SCALE Fundamental belief that Use global scale to make the most of deeper rather than R&D, regulatory, broader supply chain and will optimise returns procurement Maximum Focus investments on Return on investments the most
Slide 23: Nufarm is a proven commercialisation partner
Nufarm is a proven commercialisation partner Select INNOVATION Relationships We have an open source approach to innovation Partnerships across all parts of the value chain are our strength Create more value, Partners seek us Spend less capital, out because of Speed up innovation • Regulatory experti
Slide 24: A healthy pipeline delivering across multiple years
We have a healthy pipeline delivering across multiple years Regions Crops Project Stage Evolution Estimated Global Anticipated Market Region Launch Year/ Cereal Corn Soy TNVV Pasture Business Development Dossier Registration & Launch & Value APAC NA EUMEA Crops Project Case Proof of Concept Preparat
Slide 25: Top 22 projects target an addressable market of $6.6B
Our top 22 projects target an addressable market of $6.6B (FY2025 projection) Nufarm’s Top 22 Pipeline Projects Nufarm’s Top 22 Pipeline Projects Targeted Total Addressable Market Expected Market Launches ($USD FY25) (By Year) 2022 2023 2024 2025 2026 2027 2028 Herbicides (7 projects) Fungicides (7
Slide 26: Nufarm's Innovation Advisory Council
Our investment & innovation sounding board Industry experts to review and assess innovation opportunities and the potential benefit for our customers and Nufarm. Dr. David Tim Prof. David Rico James Mike Jones Hassinger Lawrence Christensen Barkhouse Pointon Dr. David Jones is a member of the Tim Ha
Slide 27: Showcase: Life Cycle Management
Showcase: Life Cycle Management Dichlorprop-p is a phenoxy compound traditionally used as a post emergent Market potential How we will win broadleaf herbicide in cereals. Global Synthetic Auxin Market ($AUD B) • Nufarm is the sole manufacturer of this compound globally • Nufarm have identified there
Slide 28: Showcase: Biological Solution
Showcase: Biological Solution Trunemco is a proprietary, Market potential How we will win innovative bio nematicide acquired Global Seed Applied Nematacide Market ($AUD M) • Product outperforms competitors in the market from BASF in 2019. • It is comprised of Bacillus amyloliquefaciens (MBI600) and
Slide 29: Showcase: Disruptive Technology
Showcase: Disruptive Technology Market potential How we will win • The EU Farm-to-Fork agenda aims to reduce use of NUCROP is a unique hybrid weed Possible EU Markets NUCROP could become a valid chemical pesticides over time. control and crop desiccation solution substitute for: • Solutions such as
Slide 30: Showcase: Innovative Science, Actinobacteria
Collaboration with CSIRO Showcase: Innovative Science, Actinobacteria Nufarm has collaborated with the How we will win Market potential CSIRO to develop a new proprietary, biological active Global Sclerotinia Market ($AUD) • Nufarm is first targeting the Canola/ Oil Seed Rape market for this solutio
Slide 31: Showcase: Disruptive Thinking
Showcase: Disruptive Thinking Nufarm has recently invested in What do we want to achieve? Enko Chem a US Based start-up Why did Nufarm invest? company discovering small “This investment provides Nufarm access • Nufarm partnering with Enko is expected to molecule agrochemicals for crop to a proven re
Slide 32: Regulatory risks to the Crop Protection Portfolio are mitigated
Current regulatory risks to the Crop Protection Portfolio are mitigated with alternative solutions or options Current Regulatory Environment Implications & Nufarm Response • EU regulatory environment is more uncertain and higher cost than other parts of the world. EU regime based on precautionary pr
Slide 33: Crop protection revenue targeted at ~$3.8B by 2026
Our existing portfolio and new product introductions are targeting aspirational growth in crop protection revenue to ~$3.8B by 2026 Nufarm Crop Protection Our targeted investment in commercial excellence is delivering: Our existing o We are growing faster than the market in our focus countries portf
Slide 34: Growth – Seed Technologies
Growth – Seed Technologies Group Executive Nuseed, Brent Zacharias
Slide 35: Value Beyond Yield
VALUE BEYOND YIELD® DELIVERING SUSTAINABLE PLANT-BASED SOLUTIONS
Slide 36: Nuseed focuses on improving the value of crops
A HIGHLY DIFFERENTIATED STRATEGY Nuseed focuses on improving the value of crops and creating valuable new downstream markets Traditional Agriculture VALUE BEYOND YIELD® • Shifts the fundamental value of a crop • Focus on commodities • Focus on output traits • Concerned with • New value chains optimi
Slide 37: Our capabilities are being applied to new plant-based solutions
A COMPREHENSIVE SET OF CAPABILITIES Our capabilities are being applied to new plant-based solutions Seed Upstream Mid-stream Downstream Sustainable Innovation Agriculture Supply Chain Application Value Creation □ Gene discovery □ Excellence Through □ Grain production □ Downstream product □ New indus
Slide 38: Aspiration to grow revenues to $600-700M by 2026 then $1.5B by 2030
SEED TECHNOLOGIES LONG-TERM GROWTH ASPIRATION Our aspiration is to grow revenues to $600 - $700M by 2026 then $1.5B by 2030 with EBITDA margins at 25-30% 25-30% EBITDA NUSEED PLATFORMS FOR GROWTH Margins 20-25% EBITDA Margins Core Seeds Omega 3 Carinata (Sorghum, Sunflower, Canola) FY2021 By FY2026
Slide 39: Omega 3 is a critical growth platform for Nuseed
OMEGA 3 Omega 3 is a critical growth platform for Nuseed where we have a first mover advantage and a proprietary position • The first plant-based solution to the global omega 3 nutrient deficiency • Produced by growing, harvesting and crushing proprietary Nuseed Omega 3 Canola grain • The resulting
Slide 40: Omega milestones: over $30M sales orders achieved
OMEGA 3 MILESTONES Technology adoption: over $30M sales orders achieved Sustainable alternative: equivalent to fish oil from >150M 1kg forage fish □ Grow with existing Aquaterra customers □ Targeting expansion of supply and demand □ 2022-2025 - Further regulatory approvals for import markets 2018 20
Slide 41: The Omega 3 market is driven by aquaculture demand and sustainability
OMEGA 3 The Omega 3 market is driven by underlying demand in aquaculture, rising prices and increased pressure for more sustainable practices Global fish oil demand Price Trends Sustainability Practices Unconstrained (000 MT) Monthly Fish Oil Prices $3,000 2021 • 2021 North Atlantic fishery POTENTIA
Slide 42: Nuseed's ambition for plant-based omega 3
Nuseed’s ambition is to continue to be the leading global supplier Leading global of plant-based omega 3 supplier of plant- based omega 3 nutrition technology Enable aquaculture industry growth and sustainability metrics Enable omega 3 human nutrition health goals 41
Slide 43: Carinata delivers carbon stewardship and new renewable feedstocks
CARINATA ® Carinata is another Value Beyond Yield platform that delivers carbon stewardship and new renewable feedstocks Proprietary Technology Sustainable certified oil feedstock for low □ Proprietary hybrid genetics and traits platform carbon fuel o Non-food, oilseed cover crop grown between prima
Slide 44: Carinata is a ready now solution for low carbon fuels demand
CARINATA Carinata is a “ready now” technology solution to the large and growing demand for low carbon fuels and feedstocks Growing Demand – HVO capacity Aviation decarbonization aims 30 Current Market: 57B gallons jet fuel used in 2021¹ 20 Near term stated goals: Millions (MT) • 2% global SAF inclus
Slide 45: Significant sustainability impact as alternative to aviation fuel
CARINATA Significant sustainability impact while creating a scalable alternative to traditional aviation fuel * Based on Rabobank cover crop acre estimates for actual agriculture hectares in North America, Europe, Central and South America. ** Sustainable Aviation Fuel (SAF) would be manufactured/bl
Slide 46: Offtake and market development agreement with bp
bp NUSEED AGREEMENT Nuseed’s offtake and market development agreement with bp is transformational for our biofuel ambitions • Long term commercial offtake and market development agreement • Accelerate sustainable production of Carinata as a non-food, low-carbon fuel feedstock • bp provides funding t
Slide 47: The agreement leverages the strengths of bp and Nuseed
CARINATA The agreement leverages the respective strengths of bp and Nuseed Leverages bp’s strengths, Enables scale-up Aligned ambition assets and networks and expansion of supply Utilize global reach of Scaling at pace • By 2025 - bp group aims to bp’s Trading and • R&D in LAS, NA and EU more than d
Slide 48: Carinata model builds on Nuseed's value chain capabilities
CARINATA The Carinata model builds on Nuseed’s capabilities in the creation of value chains Creating value through Energy Transition Creating Value Beyond Yield for farmers, supply chain partners, and end- use customers 47
Slide 49: Value created over and above the physical commodity value
CARINATA Distinct value is created over and above the physical commodity value of the Carinata oil and protein Additional sustainability value creation Appreciating value and volume of low carbon fuel credits (example) • Carinata grown on 1.5% of land available Monthly LCFS Credit Price (USD) and Tr
Slide 50: Core seeds: foundation of innovation and farm supply chain
CORE SEEDS Seeds are the foundation of our innovation and farm supply chain capabilities Market leader in • Range of novel oil positions The core seeds business has • Growing into high value Canada, Europe CANOLA Australia and Top 4 been enabling double digit and Latin America markets growth positio
Slide 51: Nuseed summary
SUMMARY Nuseed is demonstrating ❑ Well advanced in our mission to build and how seed enabled value generate VALUE BEYOND YIELD® by responding to world mega trends with chains can create valuable sustainable feedstocks and novel ingredients new markets and address ❑ Significant growth and impact aspi
Slide 52: Capital Allocation & Management
Capital Allocation & Management Chief CFO, Financial Officer, Paul Townsend Paul Townsend
Slide 53: Streamlined balance sheet has provided growth optionality
Streamlined balance sheet has provided growth optionality Net Debt, Leverage* & Liquidity Summary Debt Profile AUD$’m 30 Sep 21 Completion of 1,400 1400 sale of South 3.5 3.0x American 597 1200 business 3 1,200 Bank loans - secured 228 1,247 2.5x 1,000 1000 2.5 Bank loans - unsecured 9 800 Senior un
Slide 54: Ongoing substantial free cash flow supports growth ambitions
Ongoing substantial free cash flow supports growth ambitions Bolstered by improved earnings through FY21 and a strong net working capital position, net operating cash flows for FY21 was A$424.2 million, reflecting a 96% increase on FY20 net operating cash flows (excl. discontinued operations and mat
Slide 55: Maintaining discipline while retaining flexibility
Maintaining discipline while retaining flexibility Capital Management Framework Sustained financial resilience throughout operating cycles to support growth and optimise returns to shareholders Optimising financial Maintaining financial Optimising returns Principle flexibility strength through the c
Slide 56: Diligent management of CAPEX to support growth ambitions
Diligent management of CAPEX to support growth ambitions CAPEX Summary Source of Funds • Positive free cash flow AUD$’m • Existing liquidity Change in financial reporting period 176 • Natural deleveraging and increasing liquidity 169 1 146 4 108 CAPEX 99 94 • Ongoing CAPEX estimated to be ~$190-$200
Slide 57: Growth Summary
Growth Summary CEO, Greg Hunt
Slide 58: Nufarm poised for growth
Agriculture ‘mega trends’ are changing the global industry and presenting opportunities Nufarm poised for growth Nufarm is well placed to capture these opportunities and has repositioned the business for growth Aspire to reach group revenues of >$4B with seed technologies contributing up to $700M, b
Slide 59: Appendices Q&A
Appendices Q&A 58 C2 - Internal N atixis
Slide 60: Detailed Appendix
Detailed Appendix I. Summary of References and Notes II. Summary of Management Capabilities III. Summary of Board Capabilities and Renewal
Slide 61: Summary of References and Notes (1 of 2)
Summary of References and Notes (1 of 2) Page # Page Topic Notes/Sources • All statements in relation to future revenue aspirations are based on management estimates and reflect management’s internal goals and should not be taken as forecasts or 6 Nufarm’s 2026 Ambition guidance * Market growth has
Slide 62: Summary of References and Notes (2 of 2)
Summary of References and Notes (2 of 2) Page # Page Topic Notes/Sources • All statements in relation to future revenue aspirations are based on management estimates and reflect management’s internal goals and should not be taken as forecasts or guidance 32 Crop Protection – Ambition • Market growth
Slide 63: Meet Nufarm's Leadership Team
Meet Nufarm’s Leadership Team Greg Hunt (Harvard AMP, Grad Dip. Mgmt, AGSM, AICD) Michelle Monteiro (B. Eng (Chem), LLB, MBA) Managing Director & Chief Executive Officer (appointed 2015) Group Executive, Growth • Joined Nufarm in 2012 as the Group Executive of Commercial Operations • Joined Nufarm i
Slide 64: Meet Nufarm's Board
Meet Nufarm’s Board Marie McDonald (LLB (Hons), BSc(Hons)) Joined the Board in March 2017. Marie is widely recognised as one of Australia’s leading corporate and commercial lawyers having been a Senior Partner at Ashurst until 2014 where she specialised in mergers and acquisitions, corporate governa