Slide 1: Nufarm 1H23 results presentation
Nufarm Limited ACN 091 323 312 18 May 2023 103-105 Pipe Road ASX Release – Company Announcement Laverton North VIC 3026 Australia +61 3 9282 1000 nufarm.com Nufarm 1H23 results presentation Attached is Nufarm Limited’s (ASX: NUF) (Nufarm) 1H23 results presentation which will be delivered by Nufarm E
Slide 2: Nufarm 1H23 Results
Nufarm 1H23 Results 18 May 2023
Slide 3: 1H23 Results Overview
FY22 1H23Results ResultsOverview Overview CEO, Greg Hunt
Slide 4: Disclaimer
Disclaimer General This presentation has been prepared by Nufarm Limited. The information contained in this presentation is for informational purposes only as at the date of this presentation on 18 May 2023. The information contained in this presentation is not investment or financial product advice
Slide 5: Financial performance
Financial performance Revenue Underlying gross profit uEBIT uEBITDA $2.0b $609m $228m $316m Down 1%1 Up 3% Up 3% Down 4% uNPAT Underlying gross aNWC/Sales Interim dividend profit margin $142m 31% 33% 5cps Up 7% Improved Below target Up 25% >120bps2 range 1. Change measured between 31 March 2023 and
Slide 6: Strong performance delivers $316m uEBITDA
Strong performance delivers $316m uEBITDA Revenue $2.0b down 1%1, uEBITDA down 4% uEBIT up 3% 1H23 uEBITDA Product/portfolio mix drives improved underlying gross margin for 1H23 - 31% vs 30%2 for 1H22. Geographic & portfolio diversity provides resilience $316m Strong growth in Seed Technologies cont
Slide 7: 1H23 significant strategic milestones achieved
1H23 significant strategic milestones achieved Crop protection & seeds - Successful new crop protection product launches deliver diversification at higher margins - Exclusive distribution agreements provide growth platforms & margin expansion - Sumitomo distribution agreements extended Continued pro
Slide 8: Segment Performance
Segment Performance CEO, Greg Hunt
Slide 9: Geographic footprint & segment diversification
Geographic footprint & segment diversification Underlying EBITDA by segment (AUD) 1H23 1H22 % Improvement Europe $126m $118m p 6% North America $86m $93m q (8)% APAC $71m $99m q (28)% Seed Technologies - Global $62m $46m p 34% Corporate ($28m) ($27m) q (5)% Nufarm Group uEBITDA $316m $330m q (4)% In
Slide 10: Europe (Euro)
Europe (Euro) Acquired portfolio & new product introductions support growth EUR m Revenue up 1% Highlights 584 • Very positive result in challenging environment 507 268 • Revenue & earnings increased with new product introductions & favourable 208 product mix 299 316 320 • Earnings impacted by produ
Slide 11: APAC (AUD)
APAC (AUD) Portfolio provides future growth platform AUD m Revenue down 6% Highlights 1,038 • New higher margin product introductions have improved product mix & provide 858 457 a platform for future growth 424 • Long term agreement for distribution of Terrad’or ® signed with Farm Hannong 581 546 43
Slide 12: North America (USD)
North America (USD) Supply chain investments build supply capability USD m Revenue down 12% Highlights 969 • Revenue decreased as customers shift to an in-season buying strategy – sales 838 phasing from 1H23 to 2H23 452 449 • Re-stocking post COVID supply chain disruptions & phasing of sales have dr
Slide 13: Seed Technologies (AUD)
Seed Technologies (AUD) Core seeds platform underpins excellent result AUD m Revenue up 25% Highlights 296 Core seeds portfolio 241 111 • Strong growth achieved for hybrid canola, sorghum & sunflower in multiple markets 96 Omega-3 - Aquaterra® 231 • On track to produce 16.5k MT of oil from CY23 crop
Slide 14: Financial Performance
Financial Performance CFO, Paul Townsend
Slide 15: Financial highlights
Financial highlights Results Summary $AUD’m 1H23 1H22 Change % Revenue1 1,955 1,982 q (1%) Underlying gross profit 609 594 p 3% Underlying gross profit margin1 31% 30% p 122bps uEBITDA 316 330 q (4%) uEBIT 228 222 p 3% uNPAT 142 133 p 7% Underlying net financing costs2 (36) (30) q (20%) Underlying e
Slide 16: Half Year Cash flow Movement
Operating Cash Flow – impacted by net working capital movement Net working capital & cash flow • NWC balances relatively low over the past two years NWC Balance principally driven by lower levels of inventory AUD$m experienced during the peak COVID period, where supply chains were disrupted • Operat
Slide 17: Average NWC/Sales at 33%, below target
Average NWC/Sales at 33%, below target Net working capital movement impacted by receivables & inventory NWC movement impacted by receivables ($635m), inventory ($186m) aNWC % Sales & payables ($23m) Receivables • The movement between 2H22 & 1H23 of $635m reflects normal seasonal sales & collections
Slide 18: CAPEX management
CAPEX management Capital expenditure summary AUD$’m • Investment CAPEX includes the acquisition of Western Australian owned & operated sprayer manufacturer Sonic Boomsprays, & further investment in ENKO • Intangible spend includes an element of growth with an increase in crop protection R&D & in see
Slide 19: Robust balance sheet - leverage anticipated to return to target range
Robust balance sheet - leverage anticipated to return to within or below the targeted range of 1.5x – 2.0x Net debt, leverage & liquidity Summary debt profile AUD$’m A$’m 31-Mar-23 31-Mar-22 Bank loans – secured 675 337 Bank loans – unsecured 63 13 Senior unsecured notes 523 468 Deferred debt establ
Slide 20: Strategy Execution
Strategy Execution CEO, Greg Hunt
Slide 21: Attractive industry fundamentals
Attractive industry fundamentals 1 2 3 Sustainable 4 The Rise of Global Land Agricultural Sustainable Nutrition Productivity Practices Crops Plant grown 9.7B by No new land Water Carbon jet fuel 20501 Plant grown 7.7B in Increased yields Soil health Eco-systems Omega 3 20191 A growing population cre
Slide 22: Industry fundamentals support our FY26 revenue aspirations
Industry fundamentals support our FY26 revenue aspirations Crop • Achieving above market growth Protection (global market expected to grow at 2.3%*) • Existing pipeline + New Product Introductions + winning share = On track to meet or exceed FY26 above market growth revenue aspirations through incre
Slide 23: Crop Protection Strategy Execution
Crop Protection Strategy Execution Group Executive Portfolio Solutions Rico Christensen
Slide 24: Global crop protection product development pipeline
Global crop protection product development pipeline Our crop protection pipeline TAM has evolved from $6.6b1 to $6.65b. The pipeline delivers across multiple years, crops, segments and geographies Estimated Regions Crops Project Stage Evolution Estimated Global Launch Market Pasture Regional Dossier
Slide 25: 1H23 Portfolio Solutions Key Milestones & Updates
1H23 Portfolio Solutions Key Milestones & Updates Foundational Innovative Biological Adjacent Integrated Solutions Solutions Solutions Solutions Solutions Joust® Dropzone® Trunemco® Croplands Sealicit® ✓ Fungicide containing ✓ Successful launch of ✓ A proprietary bionematicide ✓ Acquisition of Sonic
Slide 26: Seed Technologies Strategy Execution
Seed Technologies Strategy Execution Group Executive Nuseed Brent Zacharias
Slide 27: Seed Technologies: 1H23 performance & milestones
Seed Technologies: 1H23 performance & milestones Core seeds Omega-3 Bioenergy Grower adoption Technology adoption Market adoption Canola Aquaterra® Nuseed Carinata ✓ Volume & market share growth in Australia ✓ Sales & margin growth contribute to stronger ✓ First dedicated vessel ships to Saipol in &
Slide 28: Seed Technologies: Outlook & strategic growth drivers
Seed Technologies: Outlook & strategic growth drivers Core seeds Omega-3 Bioenergy Grower adoption Technology adoption Market adoption Canola Aquaterra® Nuseed Carinata ✓ New hybrids will consolidate leading ✓ Volume expansion on track with strong grower ✓ Production expansion expected to meet marke
Slide 29: Outlook
Outlook CEO, Greg Hunt
Slide 30: Positive outlook
Positive outlook Assuming normal seasonal conditions & on a constant currency1 basis, on track for modest underlying EBITDA growth in FY23 Nufarm has a clear strategy Full year earnings expected to be weighted to 1H23, however for growth & is executing on moderately less skewed than FY22 key milesto
Slide 31: Q&A
Q&A
Slide 32: Appendices
Appendices
Slide 33: Appendix 1: Non-IFRS disclosures & definitions
Appendix 1: Non-IFRS disclosures & definitions1 Term Definition Corporate revenue Sales made to Sumitomo under the Transitional Services Agreement at zero margin Revenue excluding corporate revenue Total revenue less corporate revenue Gross profit margin Gross profit as a percentage of revenue Under
Slide 34: Appendix 2: Financial Summary
Appendix 2: Financial Summary 6 months ending 31 Mar 2023 6 months ending 31 Mar 2022 Material Underlying Material items Total Underlying items Total $000 $000 $000 $000 $000 $000 Revenue 1,954,578 - 1,954,578 2,165,553 - 2,165,553 Cost of sales (1,345,403) 4,265 (1,341,138) (1,572,021) (20,041) (1,
Slide 35: Appendix 3: Material items
Appendix 3: Material items Consolidated Consolidated 6 months ended 6 months ended 6 months ended 6 months ended 31 Mar 2023 31 Mar 2023 31 Mar 2022 31 Mar 2022 $000 $000 $000 $000 pre-tax after-tax pre-tax after-tax Material items by category: Deferred tax asset recognition - - - 20,119 Debt refina
Slide 36: Appendix 4: Cash flow
Appendix 4: Cash flow Material items impacting cash flows are as follows: 6 months ended 31 March 2023 Material Total Underlying items group $000 $000 $000 Cash flows from operating activities Net operating cash flows (557,592) (926) (558,518) Cash flows from investing activities Net investing cash
Slide 37: Appendix 5: Free cash flow
Appendix 5: Free cash flow NWC outflow driven by seasonality & re-stocking/ phasing of sales AUD$’m • Operating cash flow generation is highly correlated with changes in Net Working Capital & underlying EBITDA • NWC cash outflow due to stepping up from unsustainable lows experienced during the peak
Slide 38: Appendix 6: Segment Information & reconciliation
Appendix 6: Segment Information & reconciliation Revenue - Underlying ($000s) Mar-23 Mar-22 Variance Variance % Crop protection APAC 546,076 580,713 (34,637) -6% North America 678,861 718,550 (39,689) -6% Europe 498,255 497,985 270 0% Total Crop protection 1,723,192 1,797,248 (74,056) -4% Seed Techn
Slide 39: Appendix 7: Constant currency results
Appendix 7: Constant currency results 6 months ended Mar 2023 Mar 2023 Mar 2022 Constant Reported Constant Proforma currency 1 % A$ million currency Revenue 1,954.6 1,928.6 2,165.6 -11% Underlying EBITDA 316.0 314.8 329.8 -5% Underlying EBIT 227.9 226.1 221.7 2% Average exchange rates FY23 v FY22 A$
Slide 40: Appendix 8: Capital Management Principles
Appendix 8: Capital Management Principles Maintaining discipline while retaining flexibility Capital Management Framework Sustained financial resilience throughout operating cycles to support growth & optimise returns to shareholders Principle Optimising financial Maintaining financial Optimising re
Slide 41: Appendix 9: Expense management to support growth
Appendix 9: Expense management to support growth Key underlying SG&A1 movements AUD$’m • Growth SG&A driven by increases in FTE & overheads to support growth pipeline within the seed technologies bioenergy segment • Staff costs increased due to CPI increases & employee provisions • Increased freight
Slide 42: Appendix 10: US crop planted area is expected to be greater than last year
Appendix 10: US crop planted area is expected to be greater than last year, and is progressing faster USA Crop Planted Area, 2014 – 2023 USA Crop Planting Progress, May 14 2023 Corn and Wheat Corn and Soybean plantings are progressing planted areas are faster than 2022 and the 5 yr. average expected
Slide 43: Appendix 11: Plantings are expected to expand slightly in Europe, normalise in Australia
Appendix 11: Plantings are expected to expand slightly in Europe, normalise in Australia Europe (EU-27) Crop Planting, March 2023 Forecast Australian Winter Planting, March 2023 Forecast Grains (Left), Oilseeds (Right) (million ha) (million ha) Source: COCERAL, Grains & Oilseeds, 2023 Other includes
Slide 44: Appendix 12: Global stocks-to-use ratios are coming off the lowest point in over a decade
Appendix 12: Global stocks-to-use ratios are coming off the lowest point in over a decade Grains Stocks to Use Ratio, World Ex. China Oilseeds Stocks to Use Ratio, World Ex. China Grains stocks-to-use ratio is coming off the lowest point since 2006/07. Oilseeds stocks-to-use ratio is likely to impro