Slide 1: Investor Presentation May 13, 2022
Investor Presentation May 13, 2022
Slide 2: Important Additional Information and Where to Find It
Important Additional Information and Where to Find It American Vanguard (“AVD”) has filed a definitive proxy statement on Schedule 14A, and an accompanying WHITE proxy card, with the Securities and Exchange Commission (“SEC”) in connection with the solicitation of proxies for its 2022 Annual Meeting
Slide 3: AVD has performed through market cycles and is optimally positioned for the future
AVD has performed through market cycles and is optimally positioned for the future AVD has performed admirably in an unprecedented industry down-cycle, particularly relative to other similarly sized 1 agricultural input suppliers ▪ Delivered returns in excess of comparable agricultural input provide
Slide 4: Evolution of AVD
Evolution of AVD AVD transformed from a small regional formulation and distribution, off-patent Ag company… 2014 2020 1989 1975 1969 AMVAC Begins M&A Green Solution AMVAC Begins Active Downcycle Begins AVD Founded of Branded Products Ingredient Synthesis SIMPAS Platform Created from Larger Basics ($
Slide 5: AVD has performed admirably in an unprecedented industry down-cycle
Section 1 AVD has performed admirably in an unprecedented industry down-cycle, particularly relative to other similarly sized agricultural input suppliers 5
Slide 6: AVD share price outperforms the commodity cycle
Share price ($) AVD share price outperforms the commodity cycle $9.0 $40.00 $8.0 $7.73 $30.00 $7.0 $20.62 $6.0 $20.00 $5.0 $10.00 $4.0 $3.0 $0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Corn ($ / bl) American Vanguard Note: Market date as of 5/9/2022 6 Source:
Slide 7: AVD has performed despite challenging industry dynamics
AVD has performed despite challenging industry dynamics… Total Shareholder Return Since May 2015 (i.e. last 7 years) 250 L7Y L3Y L1Y American Vanguard 48% 38% 3% Russell 2000 Index 57% 16% (22%) Small-Cap Agricultural Inputs (39%) 167% 135% 200 57% 150 48% 100 (39%) 50 0 May-15 Jan-16 Oct-16 Jun-17
Slide 8: Outperformed all other small-cap agricultural input providers
…and outperformed all other small-cap agricultural input providers Total Shareholder Return Since May 2015 (i.e. last 7 years) $640 $1,380 $1,710 $1,520 $820 $400 $90 $14,350 $7,670 Large-Cap Agricultural Inputs Average: 146% 153% 140% Small-Cap Agricultural Inputs Average: (39%) 48% 31% (4%) (48%)
Slide 9: Sizeable and persistent valuation premium to off-patent agrochemical producers
1.9x premium Sizeable and persistent valuation premium to other off- patent agrochemical producers TEV / NTM EBITDA Since May 2015 (i.e. last 7 years) 15.0x L7Y L5Y L3Y L1Y American Vanguard 10.5x 10.5x 10.3x 10.1x Off-patent agrochemicals 9.4x 9.4x 9.1x 9.1x 13.0x 11.2x 11.0x 9.3x 9.0x 7.0x May-15
Slide 10: Board and management have positioned AVD for near- and long-term outperformance
Section 2 Board and management have positioned AVD for near- and long- term outperformance in current upcycle 10
Slide 11: Crop diversification has made AVD more resilient through the cycle
A focus on crop diversification has made AVD more resilient through the cycle American Vanguard crop diversification over time 2013 2021 Biologicals Specialty Peanuts Sugar Crop Sugar Crop Peanuts Specialty Fruit & Vegetables Cotton Soybean Corn Cotton Total corporate Total corporate Net revenue: $3
Slide 12: More diverse geographic footprint enabling greater market access
More diverse geographic footprint enabling greater market access American Vanguard Geographic Positioning Over Time 2012 2021 Non-U.S. 19% Non-U.S. Other 39% Other 10% 12% Latin America 9% Latin America 27% United States 61% United States 81% Total corporate Total corporate Net revenue: $366.2m Net
Slide 13: Leading solutions provider to diversified niches in agricultural and non-crop industries
Leading solutions provider to diversified niches in the agricultural and non-crop industries U.S. Crop U.S. Non-Crop International 39% 47% Net sales (2021A) $263m $79m $215m % of total sales 14% ▪ Specialty agricultural products for the ▪ Specialty products for turf and ornaments ▪ Crop protec
Slide 14: Growing Green Solutions Portfolio offering breakthrough technology
Growing Green Solutions Portfolio offering breakthrough technology… 2021 Green Solutions revenue increased to AVD Markets 120+ Green Solutions Globally $40m compared to $22m in 2020 ▪ Driven by a combination of organic growth and the acquisitions of Agrinos and Agnova (2020) Biofertilizers (11) Bios
Slide 15: Significant growth prospects
…and significant growth prospects $160 Growth Opportunities $140M $140 ▪ R&D pipeline ▪ Licensing & Distribution $120 ▪ SIMPAS channel $100 ▪ M&A $80 ▪ Tolling pipeline $70M $60 Base Business $40M $40 ▪ 2023 – 2025 net revenue CAGR of 20% $20 - 2020 2021 2022 2023 2024 2025 Base Business Growth Oppo
Slide 16: Game-changing SIMPAS platform gaining meaningful traction
Game-changing SIMPAS platform gaining meaningful traction ✓ Inkjet Concept ✓ Prescriptive Ag ✓ Higher Yields ✓ Less Pesticide in Field ✓ Less Worker Exposure 16
Slide 17: SIMPAS: U.S. Value Capture Target
SIMPAS: U.S. Value Capture Target (4 crops) $120 2022 Commercial SIMPAS $113M Technology Sales ▪ On target to achieve 70 $100 system sales to growers ▪ Sales out pace supply for 2022 $80 2023 SIMPAS Technology Outlook $63M $60 ▪ On track to hit target of 125 systems Commercial Agreements $40 for 202
Slide 18: Carefully considered M&A strategy
AVD has executed a carefully considered M&A strategy to further optimize its positioning ▪ In addition to a consistent dividend, AVD has prioritized Country / New product New market Year Target(s) capital allocation towards M&A in situations where a HQ line access highly strategic opportunity exists
Slide 19: Strong earnings momentum with double-digit earnings growth
Strong earnings momentum with double-digit earnings growth Q1 2022 Actual 2022 Performance Targets +29% Revenue Growth . . . . . . . . 8% - 11% +41% Gross Profit Margin . . . . . . 38-40% 31% Operating Expenses . . . . . . OPEX as % of Sales (31-33%) $400K vs $950k Interest Expense . . . . . . . . .
Slide 20: Clear vision for the future and strategic growth targets
$m AVD has a clear vision for the future and well- articulated strategic growth targets AVD’s projected sales evolution $947 $113 $805 $140 $695 $28 $694 $70 $597 2023 2024 2025 Core Business Green Initiatives SIMPAS (a) Performance EBITDA Target 2025: $155m (implied margin of c.16%) (a) Earnings be
Slide 21: Board has right experience and expertise to lead AVD
Section 3 Board has right experience and expertise to lead AVD and capitalize on exceptional opportunities 21
Slide 22: Highly experienced management team and Board of Directors
Highly experienced management team and Board of Directors Name, position, Name, position, Experience Experience age, tenure age, tenure ▪ Previously served as EVP at Crompton from 1989-2004▪ Previously served as CEO of RNAgri and was a member of the John Killmer Board of Directors ▪ Also served as t
Slide 23: Existing Board embodies all key competencies to lead AVD forward
Existing Board embodies all of the key competencies to lead AVD forward Board of Directors Essential Competencies Current AVD Board of Directors Cruiser Nominees Eric Alfred Debra Emer Esmail John Marisol Morton Scott Wintemute Ingulli Edwards Gunter Zirakparvar Killmer Angelini Erlich Baskin Tenure
Slide 24: AVD's Board benchmarks favorably to peers
AVD’s Board benchmarks favorably to peers across several key attributes Contrary to what Cruiser stated, AVD’s average Board compensation was c.7% less than its proxy peers in 2021 (a) AVD’s proxy peers Assessment for AVD Average annual $154 $164 Favorable to benchmark (b) compensation ($000’s) Aver
Slide 25: Alfred Ingulli, Chair of the Finance Committee
Alfred Ingulli Chair of the Finance Committee ▪ Since 2015 we closed 16 acquisitions – all of them accretive ▪ Both product line expansion and market access ▪ Robust acquisition process ▪ The most proficient deal company in our space – so we see the deal flow ▪ For every one deal we do, we pass on 1
Slide 26: John Killmer, Lead Director
John Killmer Lead Director ▪ Lead Director is fully independent ▪ Board agenda - defined by non-management directors ▪ Core strategic issues – one in-depth subject per meeting ▪ Executive session with Chairman/CEO ▪ Full access to management and executive meetings 26
Slide 27: Esmail Zirakparvar, Chair of Nominating & Corporate Governance Committee
Esmail Zirakparvar Chair of Nominating & Corporate Governance Committee ▪ Committed to best governance and ESG practices ▪ Closely followed and met California laws on diversity and underrepresentation ▪ Consistently follow ISS and Glass Lewis to guide our processes ▪ We curate our board members, usi
Slide 28: Marisol Angelini, Newest Member of the Board
Marisol Angelini Newest Member of the Board ▪ What excited me about joining this Board? ▪ External Factors ▪ Industry Challenges (Regulatory, Complexity, Global Portfolio) ▪ Change with Technology (Environmental, Social, and Governance) ▪ Internal Factors ▪ Vision and Strategy of the Company ▪ Board
Slide 29: Cruiser Capital's campaign is flawed and contrary to the facts
Section 4 Cruiser Capital’s campaign is flawed and contrary to the facts 29
Slide 30: Cruiser Capital's campaign is flawed and contrary to the facts
Cruiser Capital’s campaign is flawed and contrary to the facts – Benchmarking American Vanguard (“AVD”) against Specialty Chemicals demonstrates confusion and a lack of understanding of AVD’s fundamental attributes and business drivers Total shareholder return (TSR) – Cruiser portrays a story of TSR
Slide 31: AVD has performed through market cycles and is optimally positioned for the future
AVD has performed through market cycles and is optimally positioned for the future AVD has performed admirably in an unprecedented industry down-cycle, particularly relative 1 to other similarly sized agricultural input suppliers Board and management have positioned AVD for near- and long-term outpe
Slide 32: Appendix: Supplemental materials
Appendix Supplemental materials 32
Slide 33: Agricultural market is emerging from a prolonged downcycle
Agricultural market is emerging from a prolonged downcycle Net farmer income in 2021 above 2012 levels for the first time; robust 2022 forecasts will be slightly lower due to raw material inflation $7.51 $6.93 $6.81 $5.78 $5.47 $124 $119 $4.18 $3.88 $3.77 $3.78 $114 $114 $3.70 $3.65 $3.56 $96 $95 $9
Slide 34: Commodity prices trading at peak-cycle highs
Commodity prices trading at peak-cycle highs $20 $15.87 $15 $12.91 $10.90 $10.49 $9.40 $10 $7.73 $5.50 $5.42 $5 $4.15 $- 2010 2011 2013 2014 2016 2017 2019 2020 2022 2023 2025 Corn Soybean Wheat Future corn Future soy Future wheat Note: Market date as of 5/9/2022 Source: Market data 34 Price ($ / bl
Slide 35: Evolution of global crop protection industry
Evolution of global crop protection industry 3.6% $70.0 1.9% $68.0 $65.6 $65.0 $61.9 $60.8 $60.0 $59.3 $58.9 $58.2 $56.9 $56.4 $55.9 $54.8 $55.0 $50.0 $45.0 $40.0 2012A 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2024F 2025F Source: AgbioInvestor 35 Global crop proection market size ($bn)
Slide 36: AVD has expanded the top-line and out-grown the industry
Despite the down-turn post-2013, AVD has meaningfully expanded the top-line and out-grown the industry Net Revenue Performance Since 2012A Management net $650.0 revenue growth guidance: 8-11% Global crop protection industry has only $61.9 grown 1.3% p.a. since 2012 $60.8 $600.0 $59.3 $58.9 $58.2 $55
Slide 37: Earnings have re-gained momentum following challenges
Earnings have re-gained momentum following numerous (largely uncontrollable) challenges (a) EBITDA Performance Since 2012A 2021 – 2022: Ag-cycle $100.0 recovery; strategic initiatives (e.g. 2019: Sector SIMPAS, Green 20.7% impacted by tariffs, 2020: COVID-19 $90.0 Solutions) beginning 19.6% supply c
Slide 38: Consistent dividend payments
Consistent dividend payments AVD Quarterly Dividend History Since 2016 0.64% 0.55% 0.53% 0.53% 0.53% 0.52% 0.52% 0.49% 0.47% 0.47% 0.42% 0.42% 0.41% 0.40% $0.025 0.39% 0.35% 0.34% 0.30% 0.28% 0.26% 0.26% 0.21% $0.020 $0.020 $0.020 $0.020 $0.020 $0.020 $0.020 $0.020 $0.020 $0.020 $0.020 $0.020 $0.020
Slide 39: SIMPAS Ecosystem Overview
Game-changing SIMPAS platform gaining meaningful traction SIMPAS Ecosystem Overview 1 Features application equipment based on Agronomist SmartCartridges which are used in conjunction with Field 8 Review 2 field prescriptions As-Applied Data Shape-File Streamed Generation from Field Allows for target
Slide 40: Benchmarking to Specialty Chem demonstrates Cruiser's lack of understanding
Benchmarking to Specialty Chem demonstrates Cruiser’s lack of understanding of AVD’s business AVD’s attributes and business drivers are more comparable to Small-Cap Agricultural Inputs players Agricultural Inputs AVD Small-Cap Large-Cap Specialty Chem Illustrative companies (a) Market cap c.$640m c.
Slide 41: AVD total shareholder return vs. peers
Total shareholder return AVD total shareholder return vs. peers L7Y L5Y L3Y L1Y 48% 21% 38% 3% Small-Cap peers ranking #1 #5 #5 #6 All peers ranking #3 #7 #6 #7 (4%) (31%) 34% 24% (84%) (71%) (37%) (13%) (74%) 43% 294% 261% (48%) 155% 313% 263% 31% 255% 322% 153% (53%) 175% 78% 124% 140% 96% 51% (4%
Slide 42: Management incentives aligned with business performance and shareholder returns
AVD’s management incentives aligned with business performance and shareholder returns AVD’s stock-based compensation c.47% below proxy peer average (a) Average executive stock-based compensation ($000's) ▪ Cash bonuses are tied to achieving the interests $1,882 of stockholders $1,186 ▪ Cash bonus is
Slide 43: Cornerstones of American Vanguard investment thesis
Cornerstones of American Vanguard investment thesis Leading solutions provider to diversified niches in the agricultural and non-crop industries 1 Poised to benefit from favorable industry fundamental and tailwinds 2 Broader geographic footprint providing greater access and cross selling opportuniti
Slide 44: Reconciliation of Net income to EBITDA
Reconciliation of Net income to EBITDA ($m, 12/31 FYE) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Net income attributable $36.9 $34.4 $4.8 $6.6 $12.8 $20.3 $24.2 $13.6 $15.2 $18.6 to American Vanguard Provision for income $20.0 $18.9 ($0.5) $2.0 $5.5 $4.4 $9.1 $5.2 $3.1 $8.2 taxes Interest ex