Nufarm Limited · ASX:NUF
Nufarm — Investor Day (May 2018)
74 slides from Nufarm's investor day presentation, May 10, 2018
Slide 1: Attached presentations from Nufarm investor day
For personal use only Attached are the presentations from the Nufarm investor day held today May 10, 2018. Page 1 of 1
Slide 2: Nufarm Investor Day
Nufarm Investor Day For personal use only 10th May 2018
Slide 3: Agenda
Agenda For personal use only Time Agenda item Presenter Timing 9:30 Introduction Mark Keating 5 mins 9:35 NLT, Strategy, Growth Greg Hunt 35 min 10:10 Portfolio / pipeline / alliances Niels Pöerksen 35 min 10:45 Morning tea 45 min 11:00 European acquisitions Hugo Schweers 60 min 11:45 Nuseed - the O
Slide 4: Nufarm strategy update
Nufarm strategy update For personal use only Greg Hunt, CEO and Managing Director
Slide 5: Nufarm Presenters Today
Nufarm Presenters Today For personal use only Greg Hunt Niels Poerksen Hugo Schweers Brent Zacharias Andy Thomas CEO & Managing Group Executive General Manager Group Executive Global General Manager: Director Portfolio Solutions Europe Nuseed Innovation & Strategy Nuseed 6
Slide 6: Video
Video oa ao] — Oo ———— = M < ce —~—_ + OQ Nufarm
Slide 7: Strong performance over three years
Strong performance over three years For personal use only Last three years have delivered: • Revenue growth of 19% Revenue growth 19% • Margin expansion of nearly 300 basis points • Increase in underlying earnings from $200m Margin expansion 300bp to just over $300m • Average NWC/sales down from 47.
Slide 8: Growth in sales and profit
Growth in sales and profit For personal use only Sales A$m Well balanced product portfolio CAGR 8.1% Insecticide 11% 3111 2737 2791 2623 Fungicide 11% 2277 Herbicide 63% 2017 $3,111m Seed Technologies 5% Other 10% FY13 FY14 FY15 FY16 FY17 EBITDA A$m Diversified geographic reach 500 CAGR 10.6% 390.0
Slide 9: Focused strategy that builds on our strengths
Focused strategy that builds on our strengths Core geographies and crops For personal use only Poland Germany France EUROPE Serviced by Hubs in NORTH AMERICA USA Germany, France & Poland Serviced by a Hub in the USA Brazil LATIN AMERICA AUSTRALIA / NEW ZEALAND Serviced by a Hub in Brazil Australia S
Slide 10: Organic growth in hub countries
Organic growth in hub countries Sales growth of branded products in local currency For personal use only Poland 66% Germany 53% USA 17% France 5% Brazil 9% Australia 19% Cereals Corn Pasture, turf Soybean Trees, nuts, vines FY16 to FY17 & ornamentals & vegetables 11
Slide 11: More Nufarm people are going home safely each day
More Nufarm people are going home safely each day For personal use only SIFR* LTIFR^ 57% 39% FY16 FY17 FY18 FY16 FY17 FY18 * SIFR - Serious Injury Frequency Rate (Lost Time Injuries + Medical Treatment Injuries per 1 Million Hours Worked) ^ LTIFR – Lost Time Injury Frequency Rate (Lost Time Injuries
Slide 12: Growth agenda
For personal use only Growth agenda
Slide 13: Sources of growth and drivers of productivity
5 sources of Partnerships growth For personal use only Pipeline Acquisitions 3 drivers of productivity Beyond Yield Portfolio technologies Optimise supply chain Increase commercial productivity Drive a performance culture 14
Slide 14: Positioned for future growth
Positioned for future growth For personal use only 15
Slide 15: Growth from our Portfolio, Pipeline and Partnerships
Growth from our Portfolio, Pipeline and Partnerships For personal use only Investor Day Presentation May 2018
Slide 16: Farmers the world over share the same customer needs
Farmers the world over share the same customer needs… For personal use only A partner for growth 1. Make me money 2. Save me time and reduce my effort Easy to do Technical 3. Give me peace of mind business with support & advice 4. Be the partner I enjoy working with Quality Competitively Supplied pr
Slide 17: Nufarm's Portfolio aligns to these customer needs
Nufarm’s Portfolio aligns to these customer needs For personal use only Quality Competitively Easy to do products Positioned A partner business with & & for growth Technical Supplied Support reliably • Determining the • Solid and well known • Competitive pricing for • Access to innovation: crop solu
Slide 18: Crop trends are evolving, driving different farmer needs
Crop trends are evolving, driving different farmer needs For personal use only Create Create Need for Emerging New Farmer Differentiated Crop Trends Needs Solutions • Seed traits driving • More options needed Nufarm actively designs increased use of to rotate chemistry products that are: certain che
Slide 19: Growth: Portfolio, Pipeline, Partnerships
Growth For personal use only Portfolio Pipeline Partnerships A set of alliance partners that A portfolio that meets the needs A pipeline of solutions that will have high quality unique solutions of farmers who farm our core meet the needs of farmers in the and want a relevant partner to crops in our
Slide 20: Portfolio
For personal use only Portfolio
Slide 21: Foundational and differentiated products
While the industry talks about the “off-patent” market we think in terms of foundational & For personal use only differentiated Proprietary • Nufarm unique products 18% Differentiated Increasing value to the farmer • Differentiated products through formulation expertise - Unique mixtures Proprietary
Slide 22: Foundational and differentiated net sales growth
While the industry talks about the “off-patent” market we think in terms of foundational & For personal use only differentiated Net Sales AUD(m) CAGR split by Portfolio Category 2013 - 2017 3500 • Nufarm unique products Differentiated 2,900 Increasing value to the farmer • Differentiated products th
Slide 23: Farmers need foundational products and emerging solutions
Farmers need foundational products and they need solutions for emerging agronomic For personal use only challenges The Nufarm offer Foundational Products Differentiated Solutions Deep customer insight to define Dependable supply market gaps Add value to growers to achieve Meet basic needs at competi
Slide 24: Video
For personal use only 25 Video
Slide 25: Pipeline
For personal use only Pipeline
Slide 26: Assessing pipeline opportunities to allocate capital
Our assessment of pipeline opportunities allows us to allocate capital based on the For personal use only following criteria Strategic Fit Strategic Leverage Probability of Commercial Success Fund the best opportunities for growth across our business Probability of Technical Success Financial hurdle
Slide 27: Examining markets of our core crops
We start by examining the markets of our core crops For personal use only Global soybean fungicides market Market Size: US$ 2,206 million Key Soybean Countries: • Brazil • USA • Argentina • Canada Application Window Seed VE VC V1 V2 V3 R1 R3 R5 R8 Fallow Bed Emergence Cotyledon First Second Third Tr
Slide 28: Assessing current portfolio for gaps
Then we assess our current portfolio and look for gaps or areas where we need to strengthen For personal use only Global soybean fungicides market Key Products: • Tebuconazole • Tebuconazole & Carbendazim • Azoxystrobin & Cyproconazole • Mancozeb • Carbendazim Strong Medium Weak Seed VE VC V1 V2 V3
Slide 29: Funnelling development spend
We funnel our development spend into areas that will add to the overall strength of our offer For personal use only Global soybean fungicides market Key Developments: • SDHI, Azole & Strobi mixtures for Asian Soybean Rust (secondary target - Leaf Spots) • Multiple AI Combination Seed Treatment produ
Slide 30: Core Crop Pipeline Development Targets
Core Crop Pipeline Development Targets For personal use only Soybeans Cereals Vines Corn Pasture USA Australia Australia USA USA Brazil FR/DE/PL FR/DE/PL Brazil Brazil USA USA FR/DE/PL Australia 2023 Market Estimate (AU$b) Herbicides 4.7 6.3 0.3 5.9 1.2 Insecticides 2.3 1.3 0.6 1.8 - Fungicides 4.3
Slide 31: Partnerships
For personal use only Partnerships
Slide 32: Nufarm is attractive to potential alliance partners
Nufarm is very attractive to potential alliance partners For personal use only • Alternative access point Market Access • Greater market share Brand Strategy • Alternate brands Value & Price • Alternative channel for volume Strategy • Unique concepts for value Product • Unique AI access Innovations
Slide 33: Our alliance with Sumitomo continues to grow
Our alliance with Sumitomo continues to grow For personal use only Nufarm sales of Sumitomo products - A$m 2014 - 2017 CAGR 48.5% Growth has come from 250 • Exclusive distribution agreements 200 229 for core crop segments • Exclusive distribution agreements 150 for key countries 166 • Joint product
Slide 34: We are confident in our growth potential
We are confident in our growth potential For personal use only Portfolio Pipeline Partnerships • Our Portfolio has given us industry • Our Capital Allocation process • We continue to build significant leading growth in a challenging now focuses on and rewards product and geographical environment ali
Slide 35: Grow a better tomorrow
BA Nufarm Grow a better tomorrow
Slide 36: European acquisitions
For personal use only European acquisitions
Slide 37: Stable European crop protection market expected to grow
Stable European crop protection market expected to grow For personal use only 18 16.4 15.5 15.6 15.4 15.1 14.2 13.6 12 6 0 2012 2013 2014 2015 2016 2017 2021 (forecast) A$b Source: Kleffmann Agriglobe & Phillips McDougall 38
Slide 38: European market unique features
European market Tight - unique features regulatory For personal use only regime a Stable and barrier to growing entry market Better margins Niche, high and higher Lower value crops returns working capital requirement Strong and Less high consistent volume cash flows row crops 39
Slide 39: Neonicotinoids - Europe
Neonicotinoids - Europe For personal use only Situation • EU standing committee voted on April 27th for restricted use of Neonicotinoids (Neonics) to permanent greenhouses only • Sales for outdoor uses up to end September 2018 • Field level use outdoor allowed up to end December 2018 • Imidacloprid
Slide 40: Nufarm has established a strong position in Europe
Nufarm has evolved over 20 years to establish a strong position in Europe For personal use only Nufarm entered Continued Started European - Launch of One Embedded One Acquisitions: Europe and grew acquisitions e.g. wide business Nufarm strategy - Nufarm organisation Century and FMC through a series
Slide 41: Focused strategy in Europe creating positive momentum
Nufarm’s focused strategy in Europe is proving successful and creating positive momentum For personal use only for the acquisitions Poland 66% Germany 53% France 5% Cereals Corn Pasture, turf Soybean Trees, nuts, vines & ornamentals & vegetables 42 FY17 vs FY16 branded sales in local currency
Slide 42: Dependability and service at the heart of customer experience
Dependability and service at the heart of Nufarm’s For personal use only customer experience A partner for growth With these foundations in place we are a valued Easy to do Technical business with support partner for growth. & advice Quality Competitively Supplied products positioned reliably 43
Slide 43: Acquisitions are a strong strategic fit
Acquisitions are a strong strategic fit For personal use only Rationale By country / region By crop Other • Acquiring brand and Other Germany 10% 18% product registrations 21% Corn 8% • Forced asset sales Hungary Cereals 44% Century 4% Oilseed Spain • Enhance position as leading 15% rape 15% off-pat
Slide 44: New portfolio after acquisitions in place for growth
New portfolio after acquisitions (2018) in place for growth For personal use only Herbicides Insecticides MAVRIK® 20 EW Fungicides ORIUS® AMPERA® PGR Calma® ST BBCH 10-12 BBCH30-32 BBCH 39 BBCH 59 BBCH 65 BBCH 73 45
Slide 45: Integration programme driving the changes we need
Our integration programme is driving the changes we need to deliver results For personal use only Portfolio Channel Supply chain People solutions partnerships excellence and culture • Registrations being • Brands that customers value • Closing inventory • Sales organization transferred and need tran
Slide 46: Europe the largest regional contributor to earnings
Acquisitions make Europe the largest regional contributor to Nufarm’s earnings For personal use only FY17 Sales FY17 EBITDA 18% 31% • Europe EBITDA margin 22.5% • Group EBITDA margin 12.5% FY17 Sales - pro forma with FY17 EBITDA - pro forma with acquisitions acquisitions With pro forma acquisitions:
Slide 47: Early market indications extremely positive
The early indications from the market are extremely positive - we are confident that we will deliver For personal use only Increased Increased Increased relevance revenues profitability “Nufarm’s range is now more important & large. We see changes in the professionalism of the sales people.” French
Slide 48: For personal use only
49 For personal use only
Slide 49: Nuseed presenters
For personal use only Brent Zacharias, Group Executive Andy Thomas, GM Portfolio and Strategy 1
Slide 50: Beyond Yield
High yields are just the start. For personal use only BEYOND YIELD ™ 2
Slide 51: World leader novel oils and proteins
WORLD LEADER NOVEL OILS & PROTEINS @ CREATING NEW SEEDS FOR NEW CONSUMER NEEDS iS ie & SHAS MOLECULAR CAPABILITIES + SEQUENCING and genetic mapping + BREEDING: marker assisted breeding/ doubled haploid/trait stacking and introgression/disease and trait screening * Gene discovery in OUTPUT TRAITS Con
Slide 52: High yielding seed, novel output traits, traceable supply chain
For personal use only HIGH NOVEL TRACEABLE YIELDING OUTPUT OUTPUT SEED TRAITS SUPPLY CHAIN SIGNIFICANTLY MORE VALUE POTENTIAL BEYOND YIELD™
Slide 53: Beyond Yield Platforms
BEYOND YIELD PLATFORMS Generating value at the farm gate and down stream For personal use only XXL 5
Slide 54: Nuseed around the world
NUSEED AROUND THE WORLD For personal use only STRATEGIC ALLIANCES + GLOBAL CAPABILITIES ACCELERATED Corporate Office Sale Countries Seed Production GLOBAL GROWTH Innovation Center R&D 6
Slide 55: Omega-3 value driven by oil
OMEGA-3 VALUE DRIVEN BY OIL For personal use only Best in Class Nuseed Supply Chain Partners Customers Aquaculture Farmer Downstream Nutraceutical TRACEABLE OUTPUT Oil Market SUPPLY CHAIN Development and Sales Crush / Processor Pharmaceutical Food BEYOND YIELD™ 7
Slide 56: Omega-3 canola and why DHA
Oleic Acid Canola Plant-to-Plant Technology WHY DHA? For personal use only Short-chain omega-3 § Crucial for normal growth and Nuts Eggs development and ALA disease resistance and in shortest supply canola Vegetable § Humans: DHA Seeds microalgae Oils especially critical for brain, heart and eye fun
Slide 57: Omega-3 market - increasing un-met demand
OMEGA-3 MARKET – INCREASING UN-MET DEMAND For personal use only 3,000 Fish Oil (‘000 Metric Tonnes) 2,500 2,000 Total Deficit 1,500 1,000 500 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 Total Fish Oil Demand Total Fish Oil Demand (lower range) Total Fish Oil Supply 9
Slide 58: Project milestones and progress
PROJECT MILESTONES AND PROGRESS Expected US & Canada Reg For personal use only Large Scale Independent Large Scale Approvals Q1 2019 US Under Aquaculture US Under Notification Trial Results Notification September 2017 First Oil Downstream Commercial Planting Planting May 2017 Crush for May 2018 Aqua
Slide 59: Consumption regulatory approval and market access 2018
CONSUMPTION REGULATORY APPROVAL AND MARKET ACCESS For personal use only 2018 11
Slide 60: Consumption regulatory approval and market access 2019
CONSUMPTION REGULATORY APPROVAL AND MARKET ACCESS For personal use only 2019 12
Slide 61: Consumption regulatory approval and market access 2021-2023
CONSUMPTION REGULATORY APPROVAL AND MARKET ACCESS For personal use only 2021-2023 13
Slide 62: Consumption regulatory approval and market access 2024+
CONSUMPTION REGULATORY APPROVAL AND MARKET ACCESS For personal use only 2024+ 14
Slide 63: Regulatory cultivation approval
REGULATORY CULTIVATION APPROVAL For personal use only 2019 2018 15
Slide 64: Omega-3 pre-commercial update
OMEGA-3 PRE-COMMERCIAL UPDATE In 2018 For personal use only 15,000 acres of Omega-3 canola will be planted under the USDA notification process Washington State 2017 Production – 3,000 acres under Aquaterra™ stewardship of USDA branded totes ready notification process for shipment NOFIMA trials compl
Slide 65: Market development salmon and trout
MARKET DEVELOPMENT SALMON & TROUT For personal use only Target Market Farms Feed § Aquafeed consumes § Aquachile § Skretting 65% of omega-3, § Marine Harvest § Biomar and salmon and trout § Cermaq § Salmofood account for 75% § Los Fiordos § Ridley § Top global and § Multiexport regional feed and § G
Slide 66: Performance and value
PERFORMANCE AND VALUE For personal use only Feed Conversion Fillet Quality Control Diet 1 Diet 2 Diet 3 Control Diet 1 Diet 2 Diet 3 Performance: Delivers DHA+EPA and ALA Quality: Enhances Final Product Reliability: Eliminates Supply Volatility 18
Slide 67: Sustainability
SUSTAINABILITY For personal use only Aquaterra helps meet industry sustainability goals § Aquaterra can significantly reduce FIFO ratios § Aquaterra delivers excellent feed conversion § Nuseed supply chain meets best practice standards aligned with ASC, GSI and sustainable agricultural production re
Slide 68: Competitive position
COMPETITIVE POSITION For personal use only Source Cost of Sustainability Ease of use Scalability Long chain O3 production Plant based ✱✱✱✱✱ ✱✱✱✱✱ ✱✱✱✱✱ ✱✱✱✱✱ Algal ✱✱✱ ✱✱ ✱ ✱✱ Yeast Commercially discontinued Fish oil ✱✱ ✱✱✱✱✱ ✱✱✱✱ ✱ 20
Slide 69: Cost and scale
COST & SCALE For personal use only Benefits inside 4 years: § On-farm growing costs improve rapidly with breeding § Scaling of supply chain Supply Chain Scale On Farm Growing Cost Stewardship and IP § Ongoing part of our business model § Step change upon global regulatory approval Canola Oil Base La
Slide 70: Potential deficit impact
POTENTIAL DEFICIT IMPACT For personal use only 2028: 3,000 Fish Oil Deficit 850,000MT 2,500 2,000 Each 1% share of the deficit: 1,500 Generates ~$8.5M EBITDA 1,000 Supplied by 22,000 ha 500 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 of grain production Total Fish Oil Demand Total Fish Oi
Slide 71: Omega-3 product platform
OMEGA-3 PRODUCT PLATFORM For personal use only 23
Slide 72: Strong and expanding IP, clear commercial pathway
STRONG AND EXPANDING IP MORE THAN For personal use only CLEAR COMMERCIAL PATHWAY § Cultivation in North America § Sales in key markets 6 60 90 § Assessing BASF patent in Australia IP ESTATE PATENTS PATENTS FAMILIES PENDING 2009 2012 2005 2013 2016 Related to Efficiency of pathways, First product, ge
Slide 73: Nuseed - creating new seeds for new consumer needs
For personal use only £ > Pe we LEADER ILS & PRO Md Wo RL NOVEL CREATING NEW SEEDS FOR NEW CONSUMER NEEDS, <a 25 USEED
Slide 74: Nufarm Investor Day
Nufarm Investor Day For personal use only 10th May 2018