Ag Growth International Inc. · TSX:AFN
Ag Growth International — Investor Presentation (August 2016)
27 slides from Ag Growth International's investor presentation, Aug 24, 2016
Slide 1: August 2016 – Corporate Presentation
August 2016 – Corporate Presentation
Slide 2: Safe Harbour Statement
SAFE HARBOUR STATEMENT Certain statements contained herein constitute forward-looking statements that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. Forward-looking statements may contain such words as “
Slide 3: Corporate Overview
CORPORATE OVERVIEW
Slide 4: AGI Snapshot
AGI SNAPSHOT 7 ‘GH AR -- : ty ate S600M Market Cap $550M+ in Annual Sales 2,000+ Employees — 27 Facilities Located in Canada, USA, Brazil, UK & Italy 18 Leading Brands AGI= ‘AG GROWTH INTERNATIONAL
Slide 5: AGI Strategy
p AGI STRATEGY ~« ~_= TTT ; =e 1. DIVERSIFICATION ¢ PRODUCT LINE ¢ GEOGRAPHIC ¢ CUSTOMER/END USER 2. LEAN MANUFACTURING 3. INVESTMENT IN OUR PEOPLE
Slide 6: End User Cycle
oa eee, a eS -¥ FERTILIZER DISTRIBUTION DESTINATION 4. ELEVATOR EXPORT PORT AGI= ‘AG GROWTH INTERNATIONAL
Slide 7: Key Demand Drivers
KEY DEMAND DRIVERS a a “ae _ : ’ Harvest Conditions Grain na Commodity Infrastructure Prices AGI= ‘AG GROWTH INTERNATIONAL
Slide 8: AGI brands and global locations
NUVISIONT Aan wesTra. = AGI Poterd wise FRAMCOR AGI Contra Larope GAAINGUARD™ oe ¢ ei AGI Renee rwrsTer® \* ° ” = - . ‘ c , Utraine * 9 wRnon mow : Pree TRamcot FRAMED AMLANCOT AGI do iron enTRIwoERt . AGE heed AGI= ‘AG GROWTH INTERNATIONAL
Slide 9: Two Sides to Our Business
Geographic Scope: North America Distribution: Farm Equipment Dealers Standardized Product Portfolio Key Demand Drivers: Crop Volume & Replacement Cycle WESTFIELD® WHEATMEART® WESTEEL®™ SATCOT REM® GRAINGUARD® TWISTER® ENTRIVGER® 9 COMMERCIAL Geographic Scope: Global Distribution: Direct to Customers
Slide 10: Financials
FINANCIALS
Slide 11: Annual Trade Sales and Adjusted EBITDA
500 450 400 350 ANNUAL 300 250 TRADE SALES 474.3 200 409.7 358.3 (In C$ Millions) 150 301.0 314.6 262.3 257.2 100 50 0 2010 2011 2012 2013 2014 2015 First 6 Months 2016 90 25% 23% 80 70 20% 18% 18% 19% 18% 60 16% 15% ANNUAL 50 40 78.2 15% ADJUSTED EBITDA 72.6 10% 30 59.7 64.3 53.3 49.5 45.8 (In C$ M
Slide 12: Q2 Trade Sales and Q2 Adjusted EBITDA
160.0 $143.5 140.0 120.0 $113.9 100.0 18.1 63.8 Q2 TRADE SALES 80.0 60.0 (In C$ Millions) 112.4 99.0 93.9 95.8 40.0 79.7 20.0 0.0 2012 2013 2014 2015 2016 Trade Sales Acquisitions 30.0 25% 21% $26 25.0 20% $22.3 18% 20% 18% 20% 2.3 20.0 10.4 15% Q2 ADJUSTED EBITDA 15.0 23.2 10% (In C$ Millions) 10.0
Slide 13: YTD Trade Sales and YTD Adjusted EBITDA
300.0 $257.2 250.0 $200.6 200.0 18.1 101.9 YTD TRADE SALES 150.0 (In C$ Millions) 100.0 171.3 198.6 182.5 153.8 155.3 50.0 0.0 2012 2013 2014 2015 2016 Trade Sales Acquistions 50.0 $45.9 25% 19% $39.5 20% 40.0 19% 2.3 18% 20% 16% 17.0 30.0 15% YTD ADJUSTED EBITDA 20.0 10% (In C$ Millions) 36.8 37.2
Slide 14: Payout Ratio
PAYOUT RATIO Dividend $2.40 per annum $53,067 $52,793 $51,547 (1) $40,471 (1) $45,254 $32,306 $37,090 50% 75% 93% 57% 61% 91% 75% (1) Realized loss on foreign exchange contracts. * LTM June 30 2016 with consensus 2016 EBITDA estimate 14
Slide 15: Total Debt/Consensus EBITDA
WESTEEL SECOND HALF ADJUSTED EBITDA RECENT ACQUISITIONS (In C$ Millions) 12,000 VIS 10,000 8,000 FRAME 6,000 11,106 Entringer 4,000 5,918 5,977 5,549 NuVision 2,000 3,564 0 MMS H2 2011 H2 2012 H2 2013 H2 2014 H2 2015 4.4 4.2 4.0 TOTAL DEBT/CONSENSUS 3.8 4.24 EBITDA 3.6 3.4 3.55 3.2 2016 2017 Note: I
Slide 16: North American and European Steel Price
$70.00 $65.00 $60.00 NORTH $55.00 AMERICAN $50.00 $45.00 STEEL PRICE $40.00 (Galvanized) $35.00 $30.00 1,200 € 1,000 € EUROPEAN 800 € STEEL PRICE 600 € (€/Ton) 400 € 200 € 2008-03-31 2009-03-31 2010-03-31 2011-03-31 2012-03-31 2013-03-31 2014-03-31 2015-03-31 2016-03-31 16
Slide 17: Canadian Fertilizer Consumption
CANADIAN FERTILIZER CONSUMPTION 80.00 74.40 kg/ha 70.00 7.60 58.90 kg/ha 60.00 15.80 7.70 50.00 15.00 40.00 30.00 51.00 20.00 36.20 10.00 0.00 2000 2014 Nitrogen Phosphate Potash Source: FAO-UN 17
Slide 18: AGI Fertilizer Platform
AGI FERTILIZER PLATFORM 18
Slide 19: International Sales by Region
INTERNATIONAL SALES BY REGION 19
Slide 20: North American Farm Conditions
NORTH AMERICAN FARM CONDITIONS § US § The USDA continues to expect large corn and soybean crops, despite fears over abundant moisture earlier in the growing season § Corn yields are expected to hit a record of 175 bushels per acre § A large harvest combined with soft grain prices and ample inventori
Slide 21: U.S. Corn and Soybean Planting Intentions and Production
200000 180000 77198 83701 82236 160000 77451 77404 74976 76533 82650 75718 76895 67140 140000 120000 U.S. CORN AND SOYBEAN 100000 PLANTING INTENTIONS 80000 60000 (In ‘000 acres) 90454 91936 97155 95365 90597 93601 88192 87999 40000 78019 85982 86482 20000 0 2006 2007 2008 2009 2010 2011 2012 2013 20
Slide 22: Brazil
BRAZIL
Slide 23: Agriculture in Brazil
AGRICULTURE IN BRAZIL § Rapidly growing grain producer TOTAL GRAIN PRODUCTION (mm tons) 250 § World’s 3rd largest exporter of 189 194 202 agricultural products; leading 200 166 149 163 144 producer of soybeans 150 123 132 135 100 § Additional crop growth through the conversion of pasture and 50 yiel
Slide 24: Lack of Infrastructure
LACK OF INFRASTRUCTURE § On-farm storage capacity ~15% ILLUSTRATIVE: SOYA PRODUCTION & LOGISTIC COST (US$/T) § Most farmers are price-takers Soybean Brazil USA Difference at harvest and pay more for freight during peak season Cost of Production 187 238 51 § Significant growth in demand Transport 97
Slide 25: Entringer and AGI - 2016
ENTRINGER AND AGI - 2016 § Greenfield Plus § Small acquisition focused on product lines, which balances risk of entering new market § Enhance business of Entringer through access to AGI resources § Leverage Entringer product line, operations and engineering teams, distribution network, installation
Slide 26: Brazil Status Update
BRAZIL STATUS UPDATE § Tight market affected by political uncertainty § Impeachment issue to come to head in August § BNDES financing stalled § Focussing efforts on commercial customers, co-ops not dependent on programs § Mix of large commercial and retrofit business § Commissioning of new manufactu
Slide 27: Thank You
THANK YOU
Ag Growth International — Investor Presentation (August 2016) on 6ix