Slide 1: Acquisition of Masstock Group Holdings Limited
Acquisition of Masstock Group Holdings Limited
Slide 2: Partners in Profitable Farming
Partners in Profitable Farming 2
Slide 3: Masstock Introduction
Masstock Introduction 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 protection in
Slide 4: Transaction Highlights
Transaction Highlights Acquiring 100% of Masstock Group Holdings Limited Initial consideration of Stg£26.3m for equity share capital. Deferred consideration of up to Stg£10m payable based on achievement of profit targets over the period to July 2012. Net tangible assets at June 2007 - Stg£23.6m. Net
Slide 5: Masstock Evolution
Masstock Evolution 1970’s Masstock established by Alistair & Paddy McGuckian. The business originally developed intensive feeding systems and farming joint ventures world-wide for dairy, beef and arable farm enterprises » These businesses were sold in the 1990’s 1988 Declan Giblin, current CEO, esta
Slide 6: 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 6
Slide 7: Agronomists drive investment strategy
Agronomists drive investment strategy High input Programme - driving gross margin for customers Basic input programme 7
Slide 8: 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 9: Research & Development
Research & Development Masstock Integrated approach to delivering profitable farming – Plant breeding – Variety assessment – Nutrition – Protection Co-ordinated growing systems – Detailed replicated assessments of new technologies, varieties and growing systems – Equip Masstock field teams with opti
Slide 10: Research & Development Infrastructure
RESEARCH & DEVELOPMENT Infrastructure Replicated Trials Sites • Technical data • Aids product strategy SMART FARMS • Service showcase • 150 meetings /yr • 5000 farmers • New business tool 10
Slide 11: UK Market Overview
UK Market Overview Key Facts – UK Total area of agricultural holdings* 17.4m Ha • Croppable area 6.1m Ha • Grass 10.3m Ha • Other 1.0m Ha – Cereal production 21mt Inputs – Seed £195m – Nutrition £614m – Protection £450m Source*Defra 11
Slide 12: Masstock Inputs Profile
Masstock Inputs Profile Seed – Seed production with national coverage including on farm processing – Extensive varietal testing in partnership with major international plant breeders – Management strategies for new varieties Nutrition – Core nutrition advisory competence – Precision nutrient deliver
Slide 13: Poland
Poland Business established in 1996 by Dalgety – Managed by Graham Harris since 1996 Acquired by Masstock in 2003 Similar business model to UK – Agronomy – Seed, Nutrition and Crop protection Crop marketing Market at earlier stage of evolution 13
Slide 14: Poland - Market Overview
Poland - Market Overview Key Facts – Total cropping area 13.8m Ha • Cereals 10.3m Ha • Grass 3.5m Ha – Grain output 26.0mt Inputs – Seed £66m – Nutrition £800m – Crop Protection £200m 14
Slide 15: Global Perspectives
Global Perspectives Global population doubled from 1950 to 2005 (6.4bn) and is set to increase by 40% by 2050 (9.0bn) World food demand could double by 2050 – 50% increase from world population growth – 50% increase from broad based economic growth in low income countries Climate change and energy s
Slide 16: Water
Water Agricultural irrigation utilises 70% of worlds fresh water 60% of the worlds population live in water scarce regions * Future population increase will place strains on the worlds water supply – 500m Chinese to be urbanised Similar evidence in Australia, Israel and USA 1m litres of water to pro
Slide 17: Global Perspectives
Global Perspectives Global agricultural production – Grain production not keeping pace with consumption – The world’s arable land and fresh water are not distributed around the world in the same proportions as is population • Asia & the Middle East cannot be self sufficient in food Efficient produce
Slide 18: New Context for Primary Production
New Context for Primary Production Demand is growing Limited choice of locations to accelerate output Food is becoming strategic Water is becoming strategic Challenge – Deliver sustainable solutions for the farm enterprise – Optimise primary production over the long term Masstock model delivers sust
Slide 19: Financial summary
(Fn Origin ENTERPRISES PLC Financial summary
Slide 20: Transaction Highlights
Transaction Highlights Acquiring 100% of Masstock Group Holdings Limited. Initial consideration of Stg£26.3m for equity share capital. Deferred consideration of up to Stg£10m payable based on achievement of profit targets over the period to July 2012. Net tangible assets at June 2007 - Stg£23.6m. Ne
Slide 21: Financing
Financing Bank facilities increased by €100m. Organised with existing banking syndicate – 5 year facility with option to extend. Total facilities - €450m – 31st July year-end debt approx. €210m. 21
Slide 22: Why Masstock?
Why Masstock ? Competitive market position – No.1 in serviced agronomy – Leading market position across all input sectors – National coverage Strong branded proposition – trusted and highly regarded Complementary management capability Model for growth Cash generative 22
Slide 23: Conclusion
Conclusion Growth in Prescriptive based farming practices driven by rising demand – Long term sustainable farming – Optimise productivity of inputs Significantly extends Origin’s capability to support the primary production – Combining science, best farming practice and economics IP based prescripti
Slide 24: Partners in Profitable Farming
Partners in Profitable Farming 24