Nufarm Limited · ASX:NUF
Nufarm — Merger or Acquisition (October 2017)
51 slides from Nufarm's merger presentation, Oct 24, 2017
Slide 1: Acquisition of European crop protection assets
For personal use only Acquisition of European crop protection assets 24 October 2017 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation has been prepared by Nuf arm Limited ACN 091 323 312 (“Nuf arm" or the "Company "). This presentation has been prepared in relation to the acquisition of a portf olio of ov er 50 crop protection f ormulations in the European Economic Area f rom Adama
Slide 3: Important notice and disclaimer (continued)
Important notice and disclaimer (continued) presentation or the Entitlement Of f er. The Underwriter Parties make no recommendations as to whether y ou or y our related parties should pa rticipate in the Entitlement Of f er nor do they make any representations or warranties to y ou concerning the En
Slide 4: Transaction highlights and strategic rationale
For personal use only Section 1 Transaction highlights and strategic rationale 4 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 5: Transaction snapshot
Transaction snapshot Nufarm to acquire crop protection portfolio in Europe for US$490 million1 (A$627 For personal use only million2) from Adama and Syngenta Transaction is closely aligned with Nufarm's strategy and will significantly enhance Nufarm’s European position Acquisition expected to
Slide 6: Overview of the transaction
Overview of the transaction Agreement to acquire certain crop protection assets ("Century Portfolio") in the European Economic Area ("EEA") from Adama Agricultural Solutions Ltd ("Adama") and Syngenta Crop Protection AG and related group companies ("Syngenta") For personal use only (together, the "V
Slide 7: Alignment with Nufarm's strategy
Alignment with Nufarm's strategy The acquisition substantially strengthens Nufarm's position in a key strategic market and broadens the product offering in important crop segments For personal use only PASTURE, SOYBEAN TREES, NUTS, CORN CEREAL TURF & VINES & ORNAMENTALS VEGETABLES Enhanced by the Ce
Slide 8: Compelling strategic rationale
Compelling strategic rationale The Century Portfolio is expected to significantly enhance Nufarm’s European position as a leading off-patent crop protection company For personal use only Century Portfolio will strengthen Nufarm’s presence in cereals, corn and TNVV Highly Products sold in major E
Slide 9: Overview of the Century Portfolio
For personal use only Section 2 Overview of the Century Portfolio 9 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 10: Overview of the Century Portfolio
Overview of the Century Portfolio The Century Portfolio consists of a diversified portfolio of branded products used primarily for cereals and specialty crops For personal use only Overview of portfolio Century Portfolio comprises a balanced portfolio of herbicides, fungicides, insecticides and PG
Slide 11: Century Portfolio underpinned by core products and brands
Century Portfolio underpinned by core products and brands The top 10 core products account for approximately 70% of net sales from the Century Portfolio For personal use only Core product group and/or product Description Key brands Abamectin Broadspectrum insecticide for use mainly on fruits and v
Slide 12: Impact on Nufarm's European business
Impact on Nufarm's European business The Century Portfolio will meaningfully increase Nufarm's scale and product diversification in Europe For personal use only Indicative impact on FY17 pro forma net sales by product 1 Nufarm's European Nufarm's European business pre-transaction business post-trans
Slide 13: Factors impacting the growth outlook
Factors impacting the growth outlook Sales opportunities under Nufarm ownership and the introduction of new products are expected to offset products which are being phased-out in the short term For personal use only Near-term market opportunity for Tebuconazole as other important azole fungicides
Slide 14: Financial impact of acquisition
For personal use only Section 3 Financial impact of acquisition 14 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 15: Financial overview and outlook for Century Portfolio
Financial overview and outlook for Century Portfolio As a result of the acquisition, the Century Portfolio is expected to contribute net sales of approximately A$250 million in For personal use only the first full year under Nufarm ownership (FY19F)1 Net sales Medium to longer term performance s
Slide 16: Funding the acquisition
Funding the acquisition For personal use only Total funding requirement of US$562 million (equivalent to A$719 million 1) comprised of: – US$490 million (A$627 million 1) purchase price consideration for Century Portfolio Funding – Approximately US$50 million (A$64 million 1) acquisition of invent
Slide 17: Pro forma balance sheet
For personal use only Pro forma balance sheet Impact to Balance Sheet1 Nufarm as at Pro forma Pro forma as at Funding has been structured to ensure a A$m 31-Jul-17 adjustment2 31-Jul-17 prudent and conservative balance sheet Cash 235.1 – 235.1 Inventory to be acquired separately at Inventory & r
Slide 18: Equity offer structure
For personal use only Section 4 Equity offer structure 18 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 19: Equity raising details
Equity raising details Fully underwritten 2 for 9 accelerated renounceable entitlement offer with retail rights trading to raise approximately A$446 million ("Entitlement Offer")1 Offer structure For personal use only Approximately 59.5 million new shares to be issued under the Entitlement Offer
Slide 20: Equity raising timetable
Equity raising timetable Trading halt and announcement of acquisition and Entitlement Offer Tues, 24 Oct 2017 For personal use only Institutional Entitlement Offer opens Tues, 24 Oct 2017 Institutional Entitlement Offer closes 2 Wed, 25 Oct 2017 Institutional bookbuild closes Thurs, 26 Oct 2017 Enti
Slide 21: Operational plans
For personal use only Section 5 Operational plans 21 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 22: Operational capability
Operational capability Nufarm is adding additional capability in its sales and marketing functions to support sales of the Century Portfolio For personal use only Nufarm is currently in the process of adding to its existing workforce in Europe (mainly in field marketing and sales representatives)
Slide 23: Detailed transition integration plans established and in-progress
Detailed transition integration plans established and in-progress Nufarm has appointed PwC as an integration consultant to assist with the successful integration of the Century Portfolio For personal use only Pre- 100 days to 2 First 100 days 2 years + completion years Prepare customer and Imple
Slide 24: Further transaction being considered
For personal use only Section 6 Further transaction being considered 24 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 25: Further transaction being considered
Further transaction being considered Nufarm is also currently considering the acquisition of an additional portfolio For personal use only Nufarm is currently also in exclusive discussions with another party to acquire a crop protection portfolio This portfolio represents a strong strategic fit
Slide 26: Summary of Century Portfolio acquisition
For personal use only Section 7 Summary of Century Portfolio acquisition 26 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 27: Summary of Century Portfolio Acquisition
Summary of Century Portfolio Acquisition Strong strategic alignment For personal use only – Transaction significantly enhances Nufarm’s position in Europe and in a number of very important and strategic crop segments – Strengthens and diversifies our product offerings and makes Nufarm more relevan
Slide 28: Appendix A: Assumptions underpinning the financial projections
For personal use only Appendix A Assumptions underpinning the financial projections 28 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 29: Assumptions underpinning the financial projections
Assumptions underpinning the financial projections The expected financial contribution of the Century Portfolio is based on a range of assumptions, including prevailing market conditions For personal use only The Century Portfolio represents a collection of intangible assets carved out of Adama an
Slide 30: Appendix B: Key risks
For personal use only Appendix B Key risks 30 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 31: Key risks
For personal use only Key risks This section discusses some of the key risks associated with an investment in shares in Nufarm. These risks may affect the fu ture operating and financial performance of Nufarm and the value of Nufarm shares. The risks set out below are not listed in order of importan
Slide 32: Key risks (continued)
For personal use only Key risks (continued) Business risks As an input supplier to global agriculture, demand for crop protection products is influenced by climatic conditions that help determine the timing and extent of cropping activity as well as weed, pest and disease pressures. Climatic Climate
Slide 33: Key risks (continued)
For personal use only Key risks (continued) Business risks (continued) Nufarm operates in a regulatory environment that establishes high standards in terms of environmental compliance. Any material failure by Nufarm to adequately control hazardous substances and manufacturing operations, including E
Slide 34: Key risks (continued)
For personal use only Key risks (continued) Business risks (continued) Nufarm is exposed to competitor pressures in retaining and attracting customers. The loss of a key customer, the inability to renew contracts on similar terms or the inability of Nufarm to attract new customers may have a materia
Slide 35: Key risks (continued)
For personal use only Key risks (continued) Business risks (continued) Nufarm has significant short term bilateral funding facilities to fund its working capital requirements. Continued access to these facilities is dependant upon compliance with relevant banking covenants and the successful renewal
Slide 36: Key risks (continued)
For personal use only Key risks (continued) Business risks (continued) Legal proceedings, disputes and claims, as well as regulatory investigations and reviews, may arise from time to time in the ordinary course of Nufarm's business. While the extent of any disputes, claims, regulatory investigation
Slide 37: Key risks (continued)
For personal use only Key risks (continued) Acquisition risks There is a risk that the acquisition may not complete on the current terms and expected timing, if at all, due to among other factors a failure to satisfy any of the conditions precedent to the sale agreement, which includes a failure to
Slide 38: Key risks (continued)
For personal use only Key risks (continued) Acquisition risks (continued) Nufarm has undertaken financial, operational, business and other analysis in respect of the Century Portfolio in order to determine its attractiveness to Nufarm and whether to pursue the acquisition. It is possible that the an
Slide 39: Key risks (continued)
For personal use only Key risks (continued) Risks associated with the Entitlement Offer Nufarm has entered into an underwriting agreement under which the underwriters have agreed to fully underwrite the Entitlement Offer, subject to the terms and conditions of the underwriting agreement between the
Slide 40: Key risks (continued)
For personal use only Key risks (continued) Risks associated with the Entitlement Offer (continued) If you are an eligible shareholder and you do not exercise your entitlements to new shares under the Entitlement Offer or sell your entitlements on ASX, there is no guarantee that you will receive any
Slide 41: Key risks (continued)
For personal use only Key risks (continued) General risks Investors should be aware that there are risks associated with any investment in a company listed on the ASX. The market price of Nufarm shares will fluctuate due to the financial and operating performance of Nufarm and various external facto
Slide 42: Key risks (continued)
For personal use only Key risks (continued) General risks (continued) Nufarm's balance sheet includes significant values for manufacturing and intangible assets. Nufarm is periodically required to assess the carrying value of its non-current assets. Where the recoverable amount of an asset is assess
Slide 43: Appendix C: Foreign selling restrictions
For personal use only Appendix C Foreign selling restrictions 43 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 44: Foreign selling restrictions
Foreign selling restrictions New Zealand For personal use only The offer of the Entitlements and the New Shares in New Zealand is being made in reliance on the Financial Markets Conduct (I ncidental Offers) Exemption Notice 2016 (Exemption Notice). The Entitlements and the New Shares are (or, at the
Slide 45: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) Canada (continued) For personal use only Unless stated otherwise, all dollar amounts contained in this document are in Australian dollars. Statutory rights of action for damages and rescission Securities legislation in certain of the Provinces may provide pur
Slide 46: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) China For personal use only The information in this document does not constitute a public offer of the Entitlements or the New Shares, whether by way of sale or subscription, in the People's Republic of China (excluding, for purposes of this paragraph, Hong K
Slide 47: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) Hong Kong For personal use only WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscella neous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities and
Slide 48: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) Norway For personal use only This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this document shall not be deemed to constitute an offer to th
Slide 49: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) Switzerland For personal use only The Entitlements and the New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchan ge ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This docume
Slide 50: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) United Kingdom For personal use only Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of sectio
Slide 51: For personal use only
For personal use only NOT FOR DISTRIBUTION IN THE UNITED STATES