27 slides from Adama Ltd. Class A's earnings presentation, 2018
Slide 1: Business Update Q1 2018
Business Update Q1 2018 Adama Agricultural Solutions Ltd., one of the world's leading crop protection companies, and Hubei Sanonda Co., Ltd. have combined, creating the only integrated, publicly traded Global-China crop protection company. The Combined Company is to be renamed
Slide 2: Legal notice
Legal notice This presentation is for marketing and information purposes only. By this presentation, Hubei Sanonda Co., Ltd. (the “Company” or “ListCo”) and Adama Agricultural Solutions Ltd (“Adama Solutions”) (together, “ADAMA” or “the Combined Company”) does not intend to give, and the presentatio
Slide 3: Strong start to the year: sales grow 11%, crossing $1bn
Strong start to the year: sales grow 11%, up $100 million and crossing the $1bn mark for the first time Volumes up 6.9%, with market share gains in all markets, including Europe Adjusted, ($ million) Q1 2018 Q1 2017 % Change Sales 1,022 922 +10.9% Gross Profit 352 330 +6.8% As % of Sales 34.5% 35.8%
Slide 4: Strong first quarter for ADAMA worldwide, slow start to season in Europe
Strong first quarter for ADAMA worldwide, alongside slow start to season in Europe Q1 2018 Sales Gross Profit EBITDA Net Income Sales +10.9% GP +6.8%, $22m higher EBITDA $4m lower Net Income $33m lower Volumes +6.9% Excl. 2017 Euro hedge Excl. 2017 Euro hedge Excl. 2017 Euro hedge 1,047 impact $47m
Slide 5: Significantly reduced leverage driven by containment of working capital
Significantly reduced leverage driven by containment of working capital in spite of strong growth momentum Working capital build-up to …in a highly contained manner Sharply reduced leverage support growth… -$427m 1,554 45.0% 1,498 940 42.9% 1.6x 513 0.8x Jan-17 Jan-18 Jan-17 Jan-18 Jan-17 Jan-18 Wor
Slide 6: Regional Update
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Slide 7: Strong regional performance outside Europe
Strong regional performance outside Europe Q1 2018 vs. Q1 2017 Sales change by region USD terms Region Constant currency terms Europe (1.7)% (5.4)% North America 15.9% 14.8% Latin America 21.1% 22.4% of which, China 19.7% USD: +36.6% Asia Pacific CER: +27.0% 13.1% 30.9% India, Middle East & Africa 2
Slide 8: Regional highlights: Europe
Regional highlights Europe • Delayed start to season, mainly in northern and southwestern Europe due to extended winter and continuing high levels of inventory in the distribution channels • Key differentiated products registered in the quarter, including: − New generation growth regulator CALMATM i
Slide 9: Regional highlights: North America
Regional highlights North America • Strong sales growth due to strong demand for differentiated products in both US and Canada • Robust demand for cotton solutions, including insecticide DIAMOND®, herbicide DIREX® and insecticide ACEPHATE 97 WDG, due to growth in cotton planting areas Canada • New l
Slide 10: Regional highlights: Latin America
Regional highlights Latin America • Strong performance in Brazil, Colombia, Peru and Argentina Brazil: • Further differentiated portfolio drove volume expansion. New registrations include: − Non-fumigant nematicides NIMITZ® and LEGADO® − Seed treatment BLINDADO® − Early Q2: registration of CRONNOS®,
Slide 11: Regional highlights: Asia Pacific
Regional highlights Asia Pacific ADAMA Citrus Club: • Robust growth driven by significant increase in differentiated product Focus on full-range citrus offering in sales Sichuan province • Especially strong performance in China, Australia, Japan and Korea • Registrations obtained for differentiated
Slide 12: Regional highlights: India, Middle East & Africa
Regional highlights India, Middle East & Africa • Noteworthy performance driven by: − differentiated products launched in recent years − strong demand conditions − leading to increased volumes, particularly in India, Turkey and Israel • Strong sales of: − ACEMAIN®, a key backward-integrated product,
Slide 13: Tebuconazol Picoxistrobina Mancozeb
TEBUCONAZOL PICOXISTROBINA MANCOZEB 13
Slide 14: Rust?
Rust? Remains the main issue in the grower’s decision. 14
Slide 15: Loss of effectiveness of AIs year by year
Loss of effectiveness of AIs year by year 100 92 80 82 80 95 90 76 70 60 51 65 40 45 35 40 38 20 20 20 20 0 2003 2007 2014 2015 2016 2017 Carboxamides Strobilurin Mix Triazoles New generation fungicides Ready-mix (Strobilurin + First generation fungicides (mix with carboxamides) triazole) 15
Slide 16: Tebuconazole Picoxistrobin Mancozeb
TEBUCONAZOLE PICOXISTROBIN MANCOZEB 16
Slide 17: Tebuconazol Picoxistrobina Mancozeb
TEBUCONAZOL PICOXISTROBINA MANCOZEB 17
Slide 18: Years of development: field trials, cities, states
5 years of development • 700 field trials • 120 cities • 12 states • 15 researchers • 100 consultants 18
Slide 19: Cronnos: Prevents penetration and development of disease
Cronnos® Prevents penetration and development of disease Cruz Alta / RS Untreated control Azoxi + Cipro + Mancozeb Cronnos® T.O.V. Tank Mix 19
Slide 20: Technology saving grower's time
Technology saving grower’s time Tank Mix + Mancozeb CRONNOS® TOV Tank Mix + Mancozeb CRONNOS® TOV Application by tractor Application by airplane 20
Slide 21: Value for growers
Value for growers Productivity difference in 98 demo plots (10 ha) 20 2.43 bags/ha higher than grower’s standard 15 10 5 2.43 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 -5 -10 21
Slide 22: Cronnos: Superior results
Cronnos® Superior results 22
Slide 23: Bridge Analysis
Bridge Analysis
Slide 24: Sales Q1 Bridge Analysis
Sales Q1 Bridge Analysis 1,047 Excl. 2017 29 -6 25 Euro hedge 14 impact 64 1,022 922 FX incl. 2017 Euro +7% +2% hedge impact Q1 2017 Quantity Price FX Other Q1 2018 Variance Variance NOTE: FX variance includes FX effect on sales, costs and currency hedging. Other includes price variance related to C
Slide 25: Gross Profit Q1 Bridge Analysis
Gross Profit Q1 Bridge Analysis 378 26 14 -21 10 -6 36.1% Excl. 2017 Euro hedge 330 impact FX incl. 2017 Euro 352 hedge impact 35.8% 34.5% Q1 2017 Quantity Price Cost FX Other Q1 2018 Variance Variance Variance NOTE: Quantity variance includes mix effect; FX variance includes FX effect on sales, cos
Slide 26: EBITDA Q1 Bridge Analysis
EBITDA Q1 Bridge Analysis 26 14 -23 -21 215 195 4 -6 20.5% Excl. 2017 Euro hedge impact 189 21.2% FX incl. 2017 Euro 18.5% hedge impact Q1 2017 Quantity Price Cost Operating FX Other Q1 2018 Variance Variance Variance Expenses NOTE: Quantity variance includes mix effect; FX variance includes FX effe
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