Slide 1: 2008 Preliminary Results
2008 Preliminary Results 17th September 2008
Slide 2: Contents
Contents Highlights from 2008 ……………………………………………… 3 Financial Information ……………………………………………… 4 Origin at a glance ………………………………………………… 12 Business Review - Agri-Nutrition ……………………………………………………… 16 - Food ………………………………………………………………… 26 Primary Food Production – Global dynamics …………………… 31 Strategy and Out
Slide 3: Highlights From 2008
Highlights From 2008 Transformational year for Origin Transformational Year – Excellent financial and operating performance – Extension of business model through strategic acquisitions Acquisition of Masstock Group Holdings – Leading provider of agronomy and prescriptive farming systems – Geographic
Slide 4: Financial Information
(Fm Origin ENTERPRISES PLC Financial Information
Slide 5: 2008 Financial Highlights
2008 Financial Highlights Revenue growth of 69% to €1,504m Operating profit* increased 86% to €70.9m Profit before financing costs* up 75% to €73.2m Comparable adjusted fully diluted EPS** up 74% to 34.05 cent Net cash inflow from operating activities up 66% to €74.6m * Before intangible amortisatio
Slide 6: 2008 Preliminary Results – Profit and Loss
2008 Preliminary Results – Profit and Loss 86% increase in Operating Profit FY08 FY07 Year Ended July Growth €m’s €m’s Revenue 1,504.2 889.4 69% EBITDA 80.0 45.7 75% Operating Profit 70.9 38.1 86% Associates – PAT 2.3 3.7 (38%) Profit before financing costs 73.2 41.8 75% EBITDA % 5.3% 5.1% Operating
Slide 7: Segmental Analysis
Segmental Analysis Strong growth in Agri-Nutrition and Food FY08 FY07 Excluding Growth €m’s €m’s Acquisitions Revenue Agri-Nutrition 1,165.3 647.7 80% 34% Food 338.9 241.7 40% 6% Total 1,504.2 889.4 69% 26% Operating Profit Agri-Nutrition 55.0 27.7 99% 55% Food 15.9 10.4 52% 6% Total 70.9 38.1 86% 4
Slide 8: 2008 Preliminary Results – Profit and Loss: Comparable Adjusted EPS
2008 Preliminary Results – Profit and Loss 74% increase in Comparable Adjusted EPS* FY08 FY07 Year Ended July Growth €m’s €m’s Profit before financing costs 73.2 41.8 75% Financing cost, net (14.6) (2.6) Amortisation (2.4) (0.8) Profit before tax 56.2 38.4 46% Taxation (11.7) (6.4) Profit for the fi
Slide 9: Cash Flow / Net debt
Cash Flow/ Net debt Excellent cashflow generation FY08 FY07 €m’s €m’s Cashflow from operating activities 80.6 +76% 45.8 Change in working capital 16.8 0.9 Interest (9.7) (1.8) Taxation (13.1) - Net cash inflow from operating activities 74.6 +66% 44.9 Capital expenditure (21.5) (6.1) Insurance/Dispos
Slide 10: Balance Sheet
Balance Sheet Strong Balance Sheet to support future development July 2008 July 2007 €m’s €m’s Development Properties 192.4 165.5 Other Tangible Assets 106.1 71.1 Intangibles/Goodwill 116.4 15.2 Associates 32.8 26.5 Working Capital 35.5 22.3 Deferred consideration (12.5) - Net Debt (175.1) (71.7) Ta
Slide 11: Net debt / Tax Rate
Net debt / Tax Rate €m €m Year Ended July FY08 FY07 Bank Borrowing (Net) 175.1 71.7 Net Debt / EBITDA 2.2X 1.6X Interest Cover ** 4.9x - Effective tax rate* 21.7% 18.5% * Wholly owned subsidiaries ** Operating Profit to Net Interest charge 11
Slide 12: Origin at a Glance
(Fm Origin ENTERPRISES PLC Origin at a Glance
Slide 13: Origin at a glance
Origin at a glance…. Agri Nutrition Food Agri Inputs Integrated Direct Marine Flour Milling Ambient Food - Feed Ingredients on-farm Farming Proteins - Fertiliser agronomy FY08 Operating Profit - €70.9m Agri-Nutrition 78% Food 22% Focused on the primary and value added sectors of the food industry
Slide 14: Expanding geographic spread
Expanding geographic spread … Shetland Islands Marine Proteins Fertiliser Horticultural Fertiliser Feed Ingredients Aberdeen Food Derry Integrated On-Farm Agronomy Ayr Killybegs Direct Farming Belfast Ardee Immingham Grimsby Swincz Askeaton Dublin Olsztyn Foynes Ipswich Poznan Lublin New Ross Newpor
Slide 15: Management Team
Management Team Tom O'Mahony CEO Declan Giblin Brendan Corporate Fitzgerald Development Finance Declan Giblin Exec. Chairman Liam Larkin Tom Tynan Peadar John Masstock Agri Inputs Marine Protein Kearney Butler Food Property 15
Slide 16: Business Review – Agri-Nutrition
Business Review – Agri-Nutrition
Slide 17: Agri Inputs
Agri Inputs Relationships with leading global suppliers Market leader in sourcing and distribution of key inputs driving on-farm efficiency – Feed Ingredients – Seed – Fertiliser – Crop Protection Strategic relationships with global suppliers confer substantial benefits – Supply – Flexibility – Supp
Slide 18: Agri Inputs – Feed Ingredients
Agri Inputs – Feed Ingredients Strong performance underpinned by stable livestock numbers All Ireland business Leading supplier of feed ingredients and cereals to animal feed and milling industries 2008 performance – Volume growth – Stable livestock numbers – Volatility – Product substitution progra
Slide 19: Agri Inputs – Fertiliser
Agri Inputs – Fertiliser Excellent performance in the UK driven by increased demand Leading supplier of blended fertilisers in Ireland and the UK Record world prices on the back of rising global demand 2008 performance – UK: Excellent performance • Volume growth with increased arable application • O
Slide 20: Integrated On-Farm Agronomy & Management Advisory
Integrated On-Farm Agronomy & Management Advisory Excellent performance from Masstock Leading agronomy and farming systems advisory provider to arable and grassland farm enterprises in the UK and Poland 2008 Performance – Increased acreage – Growth in serviced channel – Superior product strategy – M
Slide 21: Research and Development
Research and Development Why it matters Fundamental to business model – Technically driven – Product strategy fits with customer requirements – Early evaluation of new technologies – Allows older technology to be refreshed – Sustainability – Strong competitive advantage Research and development buil
Slide 22: Masstock's SMARTfarm
Masstock’s SMARTfarm Communication platforms enabling technology transfer CUSTOMERS Via SMARTfarms “Do-How” SMART Farms N O TI FE Demonstrates service offering C R TE TL O Communication of product strategy IS PR ER SEED P S Awareness & relationship development O R C Demonstration of investment drivi
Slide 23: Increasing returns on investment
Trials Data demonstrating investment is key to profit 400 £360 Increasing returns on investment Margin Over Crop Protection Cost (£/ha) Grain @ 300 £130/t £258 Grain @ £100/t 200 £161 £116 Grain @ £122 £60/t 100 £56 Margin / Ha Margin / Ha 0 Base Programme Increasing investment on crop protection Hi
Slide 24: Direct Farming
Direct Farming Acquisition of 20% interest in Continental Farmers Group Investment in direct farming in Ukraine and Poland Continental Farmers Group – In Poland since 1994 – Established in Western Ukraine in 2006 Current landbank – Poland – 2,400ha – Ukraine – 18,000 ha leasehold in Western Ukraine
Slide 25: Marine Proteins
Marine Proteins Satisfactory performance against a backdrop of lower price realisations Leading producer of fishmeal and fish oil in Ireland and the UK – Key protein and energy raw material for aquaculture and animal feed diets 2008 performance – Reduced raw material intake • Lower meal price realis
Slide 26: Business Review – Food
(Fm Origin ENTERPRISES PLC Business Review - Food
Slide 27: Food - Shamrock Foods
Food - Shamrock Foods Strong underlying sales growth Leading ambient food sales, marketing and distribution business Focussed on two business areas: – Two leading Irish brands – Shamrock & Roma – Foremost provider of distribution and supply chain solutions 2008 Performance – Shamrock & Roma brands –
Slide 28: Food – Odlums
Food – Odlums Improved performance in second half of the year Odlums – Largest cereal miller in Ireland 2008 Performance – First half impacted by timing of price increases – Margin recovery in second half of the year – Management – Customers – New product development 28
Slide 29: Food Integration Well Advanced
Food Integration Well Advanced Sales, marketing, distribution and product development now combined Benefits – Commercial focus – Service levels – product and distribution – Customer reach – Procurement Market positioning – Market leading – Complementary – Category Attributes • Quality, Healthy & Nat
Slide 30: Property - Cork South Docklands
Property - Cork South Docklands Significant progress during the year Extensive engagement with City Council & other land owners Cork South Docks Local Area Plan (‘SDLAP’) adopted by Cork City Council – Origin supports the recommendations Submission of Masterplan for entire 32 acre landholding – Sets
Slide 31: Primary Food Production – Global dynamics
Primary Food Production – Global dynamics
Slide 32: Global Food Supply Challenge
Global Food Supply Challenge Production – Elimination of buffer grain stocks – Limited locations to accelerate output – Availability of arable land Demand – Population growth – Rising incomes – Dietary change – higher meat and dairy consumption – Rising per capita food intake Volatility – Weather –
Slide 33: Grain and Cereal Production vs. Agricultural Area
Grain and Cereal Production vs. Agricultural Area Indexed: 1961 = 100 300 300 250 250 Food Production CAGR: 2.1% 200 200 150 150 Agricultural Area CAGR: 0.2% 100 100 50 50 0 0 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 Food Production Agricultural Area Source: FAO FASTAT 2008 http://www.faost
Slide 34: World Major Crop Production and Yields
World Major Crop* Production and Yields 3000 6 Production Yields 2500 5 2000 4 Productionin'000Tonnes YieldinTonnes/ Ha 1500 3 1000 2 500 1 0 0 1972 1977 1982 1987 1992 1997 2002 2007 34 * Cereals, Rice and Oilseeds Source: USDA
Slide 35: Global Population and Agricultural Land Area Forecast
Global Population and Agricultural Land Area (ha) Forecast, 1965-2030f Source FAO and World Bank 35
Slide 36: Cereal Production – Supply falls short of Demand
Cereal Production – Supply falls short of Demand 100 50 80 40 60 30 40 20 20 10 Million T % 0 0 -20 -10 -40 -20 -60 -30 -80 -40 -100 -50 1 6 1 6 1 6 /8 /8 /9 /9 /0 /0 80 85 90 95 00 05 19 19 19 19 20 20 Production Surplus / Deficit Stocks-to-use ratio Source USDA 36
Slide 37: World Stocks as Days of Consumption, 1960-2008
World Stocks* as Days of Consumption, 1960-2008 140 120 100 80 Days 60 40 20 0 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 *Soya, Corn and Wheat 37 Copyright © 2008 AgResource Company. All Rights Reserved.
Slide 38: Food will become a Strategic Asset
Food will become a Strategic Asset Food price inflation Energy Incomes Investment and Commercial returns critical link to higher production – Sophisticated farming systems and new technologies – Scalability – Inputs – Output sustainability – Maximise underutilised productive land Strong Return to Ma
Slide 39: Origin's integrated capability to support primary food production
Origin’s integrated capability to support primary food production and drive farm profitability. Global inputs sourcing & delivery capability Direct Prescriptive farming Farming systems extension “Do-How” Geographic reach Yield enhancing Risk technology management “Know-How” 39
Slide 40: Strategy and Outlook
(Fm Origin ENTERPRISES PLC Strategy and Outlook
Slide 41: Future Opportunity
Future Opportunity Position Opportunity Agri-Nutrition Inputs Scale B2B position Direct linkages to Primary Food Producers Integrated on farm agronomy Organic Growth Advanced technical competence Geographic extension capability Acquisition Direct Farming Marine Proteins Fundamental business with Str
Slide 42: 2009 Outlook
2009 Outlook Further growth in 2009 Agri-Nutrition – Full Year ownership of Masstock – Business momentum • Market positioning • Access Food – Full year ownership of Odlums – Organic growth – Integration benefits Business model well positioned – Excellent platform for growth On target to deliver anot
Slide 43: Contact Us
Contact Us
Slide 44: Origin Investor Relations contact details
Origin Investor Relations would be happy to facilitate any further information requests. Contact Name: Marion Caulwell Phone: +353 1 612 1311 Fax: +353 1 612 1321 E-mail: caulwellm@originenterprises.ie Website: www.originenterprises.com/investor_centre Contact us: Origin Investor Relations 151 Thoma