33 slides from Adama Ltd. Class A's earnings presentation, Mar 30, 2017
Slide 1: Business Update Q4 and FY 2016
Business Update Q4 and FY 2016 March 30, 2016
Slide 2: Legal notice
Legal notice This presentation is for marketing and information purposes only. By this presentation, ADAMA Agricultural Solutions Ltd. (the “Company”) does not intend to give, and the presentation does not constitute, professional or business advice or an offer or recommendation to perform any trans
Slide 3: Public Shareholders Overwhelmingly Approve Sanonda Combination
Public Shareholders Overwhelmingly Approve Sanonda Combination
Slide 4: Sanonda combination update
Sanonda combination update Recent progress: November 2016 – final appraiser valuation report submitted to SASAC Final material asset restructuring (MAR) report – submitted to Sanonda board January 6, 2017 – second Sanonda board approval – obtained February 2017 – release of EXIM Bank p
Slide 5: Strong Q4 Concludes Record Year for Adama
Strong Q4 Concludes Record Year for Adama
Slide 6: Strong fourth quarter concludes record year for Adama
Strong fourth quarter concludes record year for Adama Crosses $1bn gross profit and $500m EBITDA marks Robust sales growth and significant increases in all profit and profitability metrics, driving best ever cash flow generation Sales $3,070m Record Gross Profit $1.04bn FY: +3.2% (CER); +0.2% (USD)
Slide 7: Financial highlights
Financial highlights % Change %Change % Change %Change Adjusted, ($ million) FY 2016 FY 2015 Q4 2016 Q4 2015 CER USD CER USD Sales 3,070 3,064 +3.2% +0.2% 668 650 -0.1% +2.8% Gross Profit 1,040 970 +7.3% 213 195 +9.0% As % of Sales 33.9% 31.6% 31.9% 30.0% Operating Expenses 693 667 179 165 Operating
Slide 8: Strongest ever cash flow generation leads to lowest leverage levels in a decade
Strongest ever cash flow generation leads to lowest leverage levels in a decade 502 500 Operating Cash Flow Reported Cash Flow, $m 400 Free Cash Flow 312 300 200 179 107 100 33 0 -100 -86 2014 2015 2016 Balance Sheet Net Debt $1,333m $1,184m $899m Net Debt / EBITDA 2.8x 2.5x 1.7x Note: 2014 Balance
Slide 9: FY16: Sales growth, all time record high gross profit and EBITDA
FY16: Sales growth, all time record high gross profit and EBITDA Sales Gross Profit EBITDA Net Income +3.2% CER; +0.2% USD Gross profit +7.3% EBITDA +10.6% Net income +46.8% 3,163 Gross margin +2.2pp EBITDA margin +1.6pp Net margin +1.9pp 3,070 3,064 1,040 FY 2016 970 FY 2015 33.9% 31.6% 524 474 17.
Slide 10: Q4 2016: Robust volume growth and cost reduction concludes record year
Q4 2016: Robust volume growth and cost reduction concludes record year Sales Gross Profit EBITDA Net Income +2.8% USD Gross profit +9.0% EBITDA +2.3% Net income +60.5% Gross margin +1.9pp EBITDA margin stable Net margin +1.9pp 668 650 Q4 2016 213 Q4 2015 195 31.9% 30.0% 78 76 11.7% 11.7% -1.2% -3.1%
Slide 11: Strong profit growth and reduction in inventory lead to best-ever reported cash flow generation
Strong profit growth and reduction in inventory lead to best-ever reported cash flow generation More than $500m in full year Drives more than $300m in full Significant reduction in operating cash flow year free cash flow inventory levels +$395m +$398m -$133m 502 1,185 1,052 312 107 FY '15 FY '16 FY
Slide 12: General Business Update
A General Business Update ADAMA
Slide 13: 2016 Business highlights
2016 Business highlights New organizational structure established 242 new registrations and 223 renewals Marketing & obtained globally Product Strategy Launches of new products contributed significantly to annual sales Innovation, Expansion of R&D infrastructure in Development, operational h
Slide 14: China build-up and integration
China build-up and integration Market Access Integration Operations Agricultural exhibition in China Customer appreciation conference in Kunming Formulation center in Huai’an Cementing of commercial Sales teams from Adama and Expanded R&D center in Nanjing to operations infrastructure CNAC are
Slide 15: Nimitz Pro G, a unique formulation for golf courses
Nimitz® Pro G, a unique formulation for golf courses Leveraging AgChem products and expertise to drive non-crop business growth Launched this year, Nimitz® Pro G, Adama’s proprietary nematicide, a granular formulation for golf courses, residential lawns, sports fields and sod farms Golf course bef
Slide 16: Cronnos
Cronnos® Entering into a new era of Soybean Rust combat in Brazil Rust, the most highly resistant fungus, is a key disease affecting close to 35m hectares of Soybean, in LATAM, mainly in Brazil Close to 100% of area is treated with fungicide Brazil market size of soybean fungicides is $2bn Cro
Slide 17: Bringing innovative Ag-tech and digital solutions to markets worldwide
Bringing innovative Ag-tech and digital solutions to markets worldwide 10 new apps launched in 2016 Adama Wings SwarmFarm Unique technology for the improvement Small, lightweight robots work in groups of sugar cane yields (2% planting gaps to perform key agricultural tasks such as vs. 23% withou
Slide 18: Regional Update
A Regional Update ADAMA
Slide 19: Full year regional sales performance FY 2016 vs. FY 2015
Full year regional sales performance FY 2016 vs. FY 2015 Sales change by region Constant currency terms Region USD terms (0.7%) Europe (6.7%) North America 5.9% 5.5% 0.4% Latin America 0.5% 10.1% Asia Pacific 6.9% 11.4% India, Middle East & Africa 7.5% 3.2% Total 0.2% -5% 0% 5% 10% 15% 19
Slide 20: Quarterly regional sales performance Q4 2016 vs. Q4 2015
Quarterly regional sales performance Q4 2016 vs. Q4 2015 Sales change by region Constant currency terms Region USD terms Europe (0.2%) (2.4%) 1.4% North America 1.4% (4.7%) Latin America 4.8% 8.7% 8.3% Asia Pacific 5.0% India, Middle East & Africa 4.2% (0.1%) Total 2.8% -10% -5% 0% 5% 10% 20
Slide 21: Regional highlights
Regional highlights Europe Adama outperformed the majority of European markets in the full year, despite challenging weather conditions, poor harvest in Western Europe and ongoing subdued agricultural market conditions Continued to introduce new and differentiated products Strong demand for he
Slide 22: Regional highlights (cont'd.)
Regional highlights (cont’d.) North America Sales growth driven by significant increase in volumes of higher margin products Continued progress on portfolio development, obtaining a number of new registrations for products to be launched in 2017, e.g. CORMORAN Robust growth in crop protection
Slide 23: Regional highlights (cont'd.)
Regional highlights (cont’d.) Latin America Particularly noteworthy results in Brazil, both in Q4 and over the full year, with robust sales growth complemented by an improved portfolio mix Good performances in Q4 from key products in Brazil, including GALIL® and ExpertGrow® Full implementation
Slide 24: Regional highlights (cont'd.)
Regional highlights (cont’d.) Asia Pacific (incl. China) Unique digital decision support and weed management tool for sugarcane farmers Significant volume growth over the year, most notably in Australia and New Zealand Also strong growth in parts of south-east Asia in Q4 Achieved despite adver
Slide 25: Regional highlights (cont'd.)
Regional highlights (cont’d.) India, Middle East & Africa Significant volume growth, particularly in India − Driven by ongoing launches of new and differentiated products − Achieved despite challenging weather conditions Continued improvement in portfolio mix, with the launch of TAMAR®, a differ
Slide 26: Bridge Analysis
A Bridge Analysis ADAMA
Slide 27: FY16 Sales bridge analysis
FY16 Sales bridge analysis +6.0% 183 -84 FX Effect: -93 3,064 3,070 Sales growth excluding FX: +3.2% FY 2015 Quantity Price FX FY 2016 Variance Variance 27
Slide 28: FY16 Gross profit bridge analysis
FY16 Gross profit bridge analysis 141 -78 91 -84 1,040 970 33.9% 31.6% FY 2015 Quantity Price Cost FX FY 2016 Variance Variance Variance 28
Slide 29: FY16 EBITDA bridge analysis
FY16 EBITDA bridge analysis 144 -32 -69 91 -84 524 474 17.1% 15.5% FY15 Quantity Price Cost Operating FX FY16 Variance Variance Variance Expenses 29
Slide 30: Q4 Sales bridge analysis
Q4 Sales bridge analysis +7.3% 48 -48 18 668 650 Q4 2015 Quantity Price FX Q4 2016 Variance Variance 30
Slide 31: Q4 Gross profit bridge analysis
Q4 Gross profit bridge analysis 23 -48 17 213 195 26 31.9% 30.0% Q4 2015 Quantity Price Cost FX Q4 2016 Variance Variance Variance 31
Slide 32: Q4 EBITDA bridge analysis
Q4 EBITDA bridge analysis 23 -48 76 27 -16 16 78 11.7% 11.7% Q4 2015 Quantity Price Cost Operating FX Q4 2016 Variance Variance Variance Expenses 32
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