Nufarm Limited · ASX:NUF
Nufarm — H1 2022 Earnings Presentation
35 slides from Nufarm's earnings presentation, May 19, 2022
Slide 1: Nufarm 1H22 Results
Nufarm 1H22 Results Six months ended 31 March 2022 19 May 2022
Slide 2: 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 19 May 2022. The information contained in this presentation is not investment or financial product advice
Slide 3: Agenda
Agenda OVERVIEW CEO, Greg Hunt FINANCIAL PERFORMANCE CFO, Paul Townsend OPERATIONAL PERFORMANCE CEO, Greg Hunt - CROP PROTECTION SEED TECHNOLOGIES Group Executive Nuseed, Brent Zacharias OUTLOOK CEO, Greg Hunt Q&A 3 C2 - Internal Natixis
Slide 4: Overview
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Slide 5: Substantial increase in earnings; Focused on growth
uEBITDA up 41% to $330m on revenue of $2.2b, up 31% Substantial increase in earnings Managing global uncertainty and volatility – investments in supply chain continue to unlock opportunities Focused on growth Product and geographical diversity provides resilience; seed technologies brings further su
Slide 6: Strong group performance
Strong group performance Revenue uEBITDA uNPAT $2.2b $330m $133m Up 31% Up 41% Up 112% aNWC/Sales Net debt: Dividend per uEBITDA share 27% 1.1x 4cps Improved 8%pts Below target Interim dividend range re-established 6 C2 - Internal Natixis
Slide 7: Forging ahead
Clear strategy and revenue growth aspirations Forging ahead Long-term offtake and market development agreement with bp for Nuseed Carinata FDA review complete affirming Nuseed’s conclusion that Nutriterra® is a safe ingredient for food – an additional milestone to the FDA’s acknowledgement of Nutrit
Slide 8: Strong segment performance
Strong segment performance Underlying EBITDA by segment Crop Protection (AUD) 1H22 1H21 % Improvement APAC $99m $68m p 45% Europe $118m $120m q (1)% North America $93m $33m p 184% Total Crop Protection $310m $221m p 40% Seed Technologies - Global $46m $37m p 24% Corporate ($27m) ($25m) q (7)% Nufarm
Slide 9: Revenue and earnings growth
Revenue and earnings growth Revenue $2.2b uEBITDA $330m up 31% up 41% AUD$’m AUD$’m 1 • Seasonal conditions and strong commodity prices boosted • Strategic and performance improvement initiatives implemented demand across all product groups and regions over past 5 years delivering benefits • Tight s
Slide 10: Financial performance
Financial performance CFO, Paul Townsend
Slide 11: Financial highlights
Financial highlights Results Summary $AUD’m 1H22 1H21 Change % Revenue 2,166 1,650 p 31% uEBITDA 330 233 p 41% uEBIT 222 134 p 66% Underlying net financing costs1 (30) (31) q 5% Underlying effective tax rate2 31% 39% q 8%pts uNPAT 133 63 p 112% Ave net working capital / sales 27% 35% q 8%pts Net deb
Slide 12: Prudent expense management supporting growth agenda
Prudent expense management supporting growth agenda Key underlying SG&A1 movements • Growth SG&A increased with an increase in FTE to support growth initiatives and expenses across Crop AUD$’m Protection and Seed Technologies • Increased supply chain related rates and selling costs • Staff costs inc
Slide 13: Seasonal impacts on net working capital
Seasonal impacts on net working capital Free Cash Flow Bridge Net working capital & aNWC/sales AUD$’m • Positive free cash flow is expected for FY22. Working capital seasonality results in first half net cash consumption and second half net cash generation • Pronounced cash outflow during the first
Slide 14: Streamlined balance sheet provides flexibility
Streamlined balance sheet provides flexibility Net debt, leverage & liquidity Summary debt profile AUD$’m 31-Mar-22 31-Mar-21 Bank loans - secured 337 257 Bank loans - unsecured 13 11 Senior unsecured notes 468 623 Deferred debt establishment costs (10) (9) Lease liabilities 138 136 Other loans - un
Slide 15: Operational performance – Crop Protection
Operational performance – Crop Protection CEO, Greg Hunt
Slide 16: APAC (AUD)
APAC (AUD) AUD m Revenue up 34% Highlights • Previously implemented manufacturing footprint rationalisation, cost reductions and performance improvement initiatives have contributed to improved EBITDA • Excellent seasonal conditions, higher grain prices resulted in strong demand for crop protection
Slide 17: Europe (Euro)
Europe (Euro) EUR m Revenue up 6% Highlights • Very solid result in a challenging environment • Revenue improvement achieved despite €26 million impact of product de- registrations • Revenue improvement due to targeted campaigns, strong customer relationships and reliable supply under challenging lo
Slide 18: North America (USD)
North America (USD) Highlights USD m Revenue up 49% • Improved seasonal conditions and higher grain prices drove increased demand • Product mix and volume growth in key segments drove higher margins • Increased logistics costs reflected in higher end user prices • Investment in supply chain delivere
Slide 19: Seed Technologies
Seed Technologies Group Executive - Nuseed Brent Zacharias Group Executive, Nuseed, Brent Zacharias C2 - Internal Natixis
Slide 20: Seed Technologies (AUD)
Seed Technologies (AUD) Revenue growth with strong performance from core seeds portfolio AUD m Revenue up 28% Core seeds portfolio • Strong first half demand for Nuseed hybrid canola in Australia, South America and Canada • Increased sorghum sales in Brazil, USA and other markets • Growth in sunflow
Slide 21: Omega-3 canola oil
Omega-3 canola oil Strong recovery post Covid-19 related market impacts • Aquaterra® supply now secured with all target Chilean feed producers; Creating crops that Important repeat orders and positive customer feedback positively impact global milestones • First bulk shipment successfully executed a
Slide 22: Carinata biofuel feedstock platform
Carinata biofuel feedstock platform Rapid expansion enabled by long-term offtake agreement with bp Nuseed Carinata is a non-food cover crop that is being used to produce low-carbon biofuel feedstock that is independently certified, sustainable and scalable • Long-term strategic offtake and market de
Slide 23: Outlook
Outlook CEO, Greg Hunt
Slide 24: Nufarm focused on growth
Agriculture ‘mega trends’ support growth of crop protection and Beyond Yield seed technologies Nufarm focused on growth Nufarm is well placed to capture these opportunities and has repositioned the business for growth Aspire to reach group revenues of >$4B with seed technologies contributing up to $
Slide 25: Technology and innovation drive growth and sustainability
Technology and innovation drive growth and sustainability Focus on innovation and technology Developing sustainable formulations New proprietary technologies that will reinvigorate Microparticles Crops that positively impact global environmental the way phenoxies are used and extend the future issue
Slide 26: Positive full year outlook
Positive full year outlook • Current industry conditions highly favourable with grain prices likely to remain elevated driving increased Crop planting and demand for crop protection products Protection • While some easing of agricultural commodity prices is expected to occur, fundamental factors are
Slide 27: Appendices
Appendices
Slide 28: Appendix 1: Other items
Appendix 1: Other items For the full FY22 financial year, assuming consistent currency translation to FY21, the Group is projecting: Other items - Depreciation and amortisation to be materially in line with the 6 months ended 31 March 2022 run rate - Increased capital expenditure to be approximately
Slide 29: Appendix 2: Capital management principles
Appendix 2: Capital management principles Capital Management Framework Sustained financial resilience throughout operating cycles to support growth and optimise returns to shareholders Principle Optimising financial Maintaining financial Optimising returns flexibility strength through the cycles App
Slide 30: Appendix 3: Non IFRS disclosures and definitions
Appendix 3: Non IFRS disclosures and definitions Term Definition Gross profit margin Gross profit as a percentage of revenue Underlying gross profit Gross profit less material items Underlying gross profit margin excluding corporate revenue Underlying gross profit as a percentage of revenue excludin
Slide 31: Appendix 3: Non IFRS disclosures and definitions
Appendix 3: Non IFRS disclosures and definitions Term Definition ANWC/sales (%) Average net working capital as a percentage of rolling 12 months revenue Average net working capital as a percentage of rolling 12 months revenue excluding non-operating corporate ANWC/sales excluding external corporate
Slide 32: Appendix 4: Financial Summary
Appendix 4: Financial Summary *For material items, refer to note 6 to the interim financial statements *Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii) 32 C2 - Internal Natixis
Slide 33: Appendix 5: Segment Breakdown
Appendix 5: Segment Breakdown (7%) (3%) 1. Comparative information has been restated as a result of a change in accounting policy detailed in note 3(a)(ii) 33 C2 - Internal Natixis
Slide 34: Appendix 6: Cash flow
Appendix 6: Cash flow 34 C2 - Internal Natixis
Slide 35: Appendix 7: Constant currency results
Appendix 7: Constant currency results 1. 2022 reported results converted at 2021 foreign currency exchange rates 35 C2 - Internal Natixis