Origin Enterprises Plc · EURONEXT:OIZ
Origin Enterprises — H1 2008 Earnings Presentation
29 slides from Origin Enterprises's earnings presentation, 2008
Slide 1: 2008 Interim Results
(Fm Origin ENTERPRISES PLC 2008 Interim Results
Slide 2: Overview of Origin Enterprises
Overview of Origin Enterprises Focus on the value added and primary sectors of the food industry Group activities – Ambient Food & Cereal Milling – Agri-Nutrition • Agri-Inputs • Integrated on-farm agronomy Shetland Islands • Marine Proteins Associate Poland – Feed manufacturing (50%) • John Thompso
Slide 3: Operational Highlights to January 2008
Operational Highlights to 31 January 2008 Excellent performance from Agri-Nutrition – Strong arable crop demand driving growth in UK agri-inputs market. Strong sales growth momentum in Food. Acquisition of controlling interest in Odlums. Acquisition of Masstock Group Holdings Ltd – Significantly ext
Slide 4: Interim Results Highlights to January 2008
Interim Results Highlights to 31 January 2008 Revenue growth of 45.7% to €546.4m. Operating profit* increased 70.7% to €20.2m. Profit before financing costs* up 54.9% to €21.2m. Comparable adjusted fully diluted EPS* up 68.5% to 9.37cent. Group net borrowings of €164.4m post – Acquisition spend - €5
Slide 5: 2008 Interim Results – Profit and Loss
2008 Interim Results – Profit and Loss 2008 2007 Half Year Ended January Growth €m’s €m’s Revenue 546.4 374.9 45.7% EBITDA 23.8 15.4 54.8% Operating Profit 20.2 11.9 70.7% Associates – PAT 1.0 1.8 (48.2%) Profit before financing costs 21.2 13.7 54.9% EBITDA % 4.4% 4.1% Operating Profit % 3.7% 3.2% 5
Slide 6: 2008 Interim Results – Segmental Analysis
2008 Interim Results – Segmental Analysis Growth Half Year Ended 2008 2007 excluding Growth January €m’s €m’s Acquisitions Revenue Agri-Nutrition 375.4 252.6 48.6% 48.6% Food 171.0 122.3 40.0% 6.6% Total 546.4 374.9 45.7% 34.9% Operating Profit Agri-Nutrition 11.7 6.0 98.8% 98.8% Food 8.5 5.9 42.9%
Slide 7: 2008 Interim Results – Profit and Loss
2008 Interim Results – Profit and Loss 2008 2007 Half Year Ended January Growth €m’s €m’s Profit before financing costs 21.2 13.7 54.9% Financing cost, net (5.9) (0.1) Amortisation (0.8) (0.4) Profit before tax 14.5 13.2 10.0% Taxation (2.6) (2.5) Profit for the period 11.9 10.7 10.9% Adjusted fully
Slide 8: Cash Flow
Cash Flow 2008 2007 2007 Half Year Ended January €m’s €m’s (Full year) €m’s EBITDA 23.8 15.4 46.9 Working capital (37.3) (40.4) 0.9 Other 0.3 0.0 (1.1) Cashflow from operating activities (13.2) (25.0) 46.7 +47.2% Interest (3.7) (0.1) (1.8) Acquisition (59.3) - - Capital Investment (15.4) (3.4) (6.1)
Slide 9: Balance Sheet
Balance Sheet Jan 2008 July 2007 €m’s €m’s Development Properties 192.4 165.5 Other Tangible Assets 94.0 71.1 Intangibles/Goodwill 53.0 15.2 Associates 15.5 26.5 Working Capital 75.2 22.3 Net Debt (164.4) (71.7) Taxation – incl DT (46.6) (38.6) Provisions/Grants (7.1) (4.9) Employee Benefits (16.9)
Slide 10: The changing context for primary food production: Population growth
The changing context for primary food production Population growth – Global population doubled between 1950 and 2005 to 6.4bn – Population growing at 80m per annum – Estimate 9bn by 2050. Food Demand – Projected to double by 2050 – Urbanisation and economic growth driving higher food intake per capi
Slide 11: The changing context for primary food production: Soil and Water limitations
The changing context for primary food production Soil and Water limitations – Global cropland is shrinking by more than 10m hectares pa due to soil erosion – Irrigation for agricultural use consumes 70% of worlds fresh water – Increasing urbanisation is placing strains on global fresh water supply •
Slide 12: Alternative Markets for feed stocks
Alternative Markets for feed stocks - Global Ethanol Production – plus 40 mln m3 (85 %) in 10 years 90 85 82 80 78 80 75 70 21 19 70 66 18 17 16 61 15 60 56 14 8.5 8.5 8.5 8.5 51 13 8.0 in mln m3 46 7.0 50 12 6.0 11 5.0 10 4.2 40 30 30 31 3.5 28 29 3.1 26 22 24 30 20 17 15 20 21 22 23 23 24 24 25 10
Slide 13: World Wheat ending stocks
World Wheat ending stocks 250.0 40.0% 34.4% 35.0% 200.0 27.6% 30.0% 24.8% 24.1% 25.0% 150.0 22.8% 20.2% 20.0% 18.0% 201.8 100.0 15.0% 166.3 132.5 151.0 149.2 124.9 10.0% 110.9 50.0 5.0% 0.0 0.0% 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 Ending Stocks (million T) World sto
Slide 14: Price Trends – Wheat €/tn CIFFO Irl
110 130 150 170 190 210 230 250 Jun-03 270 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 14 Price Trends – Wheat €/tn CIFFO Irl Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07
Slide 15: New Context for Primary Production
New Context for Primary Production Demand is growing. Limited choice of locations to accelerate output – Grain production not keeping pace with consumption – The worlds arable land and fresh water are not distributed in the same proportions as population. Challenge – Deliver sustainable productivity
Slide 16: Agri Inputs – Feed Ingredients
Agri Inputs – Feed Ingredients Market leader in the importation of animal feed ingredients and cereals. – Total all Ireland market c.6mt Very satisfactory performance – Volume growth – Momentum within dairy Product origins – Stable livestock population Cereals, Rape, Suns & Milling wheat Soya, Rape,
Slide 17: Agri Inputs – Fertiliser
Agri Inputs – Fertiliser Market leader in importing and distribution of blended fertiliser in Ireland and the UK – Ireland 1.7mt – UK 4.0mt. Excellent half year performance – UK volume growth • Higher cereal prices driving yield maximisation • Increased cereal plantings – Ireland • Seasonally a H2 b
Slide 18: Marine Proteins
Marine Proteins Leading producer of fishmeal and fish oil in Ireland & the UK. Origin Satisfactory performance – Lower price realisations – Increasing use of fishmeal in pig and poultry diets Planning permission granted in October 2007 for new fishmeal and fish oil manufacturing facility in Killybeg
Slide 19: Food - Shamrock Foods
Food - Shamrock Foods Leading ambient food sales, marketing and distribution business. Focussed on two core business areas: – Owner of two leading Irish brands – Shamrock & Roma – Foremost provider of distribution and supply chain solutions. Very satisfactory performance – Strong sales momentum from
Slide 20: Food – Odlums
Food – Odlums Full control of Odlums since September 2007. Odlums: – Ireland’s largest cereal miller – Leading Irish brand in retail flour – Growing export branded oatmeal business. Challenging H1 performance – Significant wheat price increases Integration – Complimentary product and distribution pr
Slide 21: Partners in Profitable Farming
Partners in Profitable Farming Established in 1988. Leading provider of integrated agronomy services directly to arable and grassland farm enterprises – Delivery of prescription based advice and farm management advisory expertise combined with… – Sale and distribution of seed, nutrition and crop pro
Slide 22: Transaction Highlights
Transaction Highlights Acquired 100% of Masstock Group Holdings Limited effective 1 February 2008. Transaction details – 2007 Revenue - £250m – 2007 EBIT - £6.8m (before non recurring items) – Enterprise Value - £61m – Deferred contingent consideration - £10m Committed bank facilities increased to f
Slide 23: How does agronomy work?
How does agronomy work? Agronomist visits farm (up to 25x per year) Analyse farmer’s needs Prescription creation Seed Nutrition Transmission Delivery to of prescription farmer Crop Protection 23
Slide 24: The increasing influence of agronomy
The increasing influence of Long Term Sustainable Farming 2007+ agronomy Access To The New Opportunities (Food versus Fuel, Emerging Energy Markets, 2006 Land use, Cross Compliance) Supporting Farm Management Objectives (Spreading Workload, Acreage Efficiency, 2000 Fixed Costs,Environmental Income)
Slide 25: Research & Development
Research & Development Replicated Trials Sites Masstock Integrated approach to delivering profitable farming • Technical data • Aids product strategy – Plant breeding SMART FARMS – Variety assessment • Service showcase – Nutrition • 150 meetings /yr • 5000 farmers – Protection • New business tool Co
Slide 26: Property - Cork South Docks
Property - Cork South Docks Cork South Docks Local Area Plan (“SDLAP”) adopted on 11 February 2008 by Cork City Council. The SDLAP provides a framework to promote the regeneration of the area. Formation of the Cork Docklands Development Forum – Providing national momentum behind the development. Sub
Slide 27: Outlook
Outlook Strong growth dynamic – Fundamental shift in supply/demand for Food. – Confidence – Repositioning within primary food production • Focus on commercial returns • Evolution of business model. 27
Slide 28: Origin Proposition
Origin Proposition Agri-Inputs – Excellent model to support primary producer • Superior business to business inputs offering with strong market positions • Model extension through delivery of advanced IP based prescriptive farming systems combining science with best farming practice and economics. F
Slide 29: Origin Investor Relations
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 Email: caulwellm@originenterprises.ie Website: www.originenterprises.com/investor_centre Contact us: Origin Investor Relations 151 Thomas