Slide 1: Preliminary Results 2018
Preliminary Results 2018 26 September 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward‐looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of the preparation of this presentation. Due to the inherent uncertainties, including both econom
Slide 3: 2018 Highlights & Business Overview
2018 Highlights & Business Overview Preliminary Results 2018 3
Slide 4: 2018 Performance Summary & Highlights
2018 Performance Summary & Highlights Financial Operational Strategic • Results ahead of guidance: • Strong business performance in • Evolution of Group portfolio with highly challenging season for first time entry in Latin America. ̶ 4.6% increase in operating Meets objectives for seasonality crop
Slide 5: 2018 Agri-Services in Overview
2018 Agri-Services in Overview Key Facts, Customer Channel and Geography Customer Channel1 Input Formulation Customers & Processing Facilities 53% 52% Direct Farm 49,000 32 Revenue EBIT Business‐to‐ Business Demonstration €1.63bn €71.2m Sales Force Farms 700 73 47% 48% Geography1 Direct Farm Custome
Slide 6: Agri-Services – The Business
Agri-Services – The Business Service application and gross margin profile 2018 Revenue 2018 Gross Margin 10% 18% 7% 3% Combinable Crops Crop Protection Grassland 11% Nutrition 5% 47% Roots & Veg Seed Amenity Amenity Feed / other 59% Feed / Other 15% 25% Preliminary Results 2018 6
Slide 7: Trading Review
Trading Review Preliminary Results 2018 7
Slide 8: Agronomy Service and Input Revenue Analysis
Agronomy Service and Input Revenue1 Analysis Growth in Agronomy Service 1 +8.64% and Input Revenue from FY 2017 to FY 2018 Currency Underlying Acquisitions (2.86%) +5.87% +5.63% Volume Price +2.66% +3.21% 1 Excludes crop marketing revenues and volumes Preliminary Results 2018 8
Slide 9: Trading Review: Ireland & the UK
Trading Review Ireland & the UK • Underlying volume growth of 2.1% • Resilient performance against significantly curtailed Operating profit (€’m) spring seasonal growth and delayed crop development • More favourable market sentiment as positive output price development supports improved returns for
Slide 10: Trading Review: Continental Europe
Trading Review Continental Europe1 • Underlying volume growth of 4.0% • Performance in line with last year despite condensed Operating profit (€’m) spring growth and sustained dry summer conditions impacting farmers crop potential • Speciality agronomy, nutrition and fertiliser portfolios perform we
Slide 11: Financial Review
Financial Review Preliminary Results 2018 11
Slide 12: 2018 Performance Summary & Highlights
2018 Performance Summary & Highlights Operating Profit Adjusted Revenue Profit After Tax EPS €1.6bn €71.2m €61.7m 48.80c +6.5% (rc1) +1.7% (rc1) +4.8% (rc1) +4.7% (rc1) +9.0% (cc1) +4.6%(cc1) +7.6%(cc1) +7.6%(cc1) Underlying Group Volume Growth Operating Margin ROCE Dividend +2.7%2 4.4% 13.5% 17.85c
Slide 13: 2018 Financial Highlights
2018 Financial Highlights Year ended 31 July % 2018 2017 % Constant €’m €’m Change Currency Group revenue 1,627.5 1,528.5 6.5% 9.0% Group operating profit1 Agri‐Services 71.2 70.0 1.7% 4.6% Associates and joint venture2 7.2 4.4 65.4% 70.0% Total group operating profit 78.4 74.4 5.4% 8.4% Finance cos
Slide 14: Group Revenue
Group Revenue €m +€76.1m +€137.5m (€38.5m) +€99.0m 1,800 +€61.4m +5.0% +9.0% (2.5%) +6.5% +4.0% 1,600 €1,627.5m €1,528.5m 1,400 1,200 1,000 800 600 400 200 0 FY17 Underlying Acquisitions FY18 Currency FY18 (excl. currency) Preliminary Results 2018 14
Slide 15: Group Operating Profit
Group Operating Profit €m 90 +€2.5m +€3.2m (€2.0m) 80 +€0.7m +€1.2m +3.6% +4.6% (2.9%) +1.0% +1.7% 70 €71.2m €70.0m 60 50 40 30 20 10 0 FY17 Underlying Acquisitions FY18 Currency FY18 (excl. currency) Preliminary Results 2018 15
Slide 16: Earnings per Share
Earnings per Share € cent per share 60.00 +2.66c + 0.89c +3.55c (1.37c) +2.18c +5.7% +1.9% +7.6% (2.9%) +4.7% 50.00 48.80c 46.62c 40.00 30.00 20.00 10.00 0.00 FY17 Underlying Acquisitions FY18 Currency FY18 (excl. currency) Preliminary Results 2018 16
Slide 17: Operating Margin Analysis
Operating Margin Analysis % 5.50 +0.5% (0.7%) 5.00 4.50 4.6% 4.00 4.4% 3.50 3.00 FY17 Business portfolio mix Increased fertiliser input FY18 prices Preliminary Results 2018 17
Slide 18: Cash Flow
Cash Flow Year ended 31 July Excellent cash flow performance driven by good working capital management 2018 2017 Year ended 31 July €’m €’m Cash flow from operating activities 80.0 78.5 Change in working capital 0.7 (26.0) Interest and tax (17.4) (14.5) Cash flow from ongoing operating activities 63
Slide 19: Balance Sheet
Balance Sheet Year ended 31 July Strong Balance Sheet provides headroom for further acquisitions 2018 2017 As at 31 July €’m €’m Tangible assets 129.8 114.9 Goodwill and intangible assets 216.3 206.0 Associates and joint venture 48.6 34.7 Working capital 17.2 12.4 Deferred and contingent acquisition
Slide 20: Banking Facilities and Covenants
Banking Facilities and Covenants Year ended 31 July 2018 2017 2016 Committed banking facilities Net debt to EBITDA 0.54 0.49 ‐1 Covenant <3.50 <3.50 <3.50 €430 million EBITDA to net interest 9.81 11.45 11.06 Covenant >3.00 >3.00 >3.00 Weighted average debt maturity in year 2018 All terms as defined
Slide 21: Strategy & Development
Strategy & Development Preliminary Results 2018 21
Slide 22: The Strategic Context for Farming & Food
The Strategic Context for Farming & Food Macro trends Productivity and Yield Gaps Digital Agriculture and Greater Technology Regulation and Escalating Cost Enablement of Innovation Population growth Climate Change Increasing Farm and Environmental Professionalisation Stewardship Consolidation Prelim
Slide 23: Investment Proposition
Investment Proposition 1 2 3 4 5 6 7 8 9 Market Consistent & Favourable Long term Industry Strong Diversified Balanced Well leading maintainable long term customer leading R&D balance geographic organic growth, positioned positions with cash market & supplier and technical sheet with & business inte
Slide 24: Business Strategy
Business Strategy Our Vision To build sustainable value through being the leading and Scale Focus trusted partner of choice to the • Buy & build agronomy • Prioritise customised farmers, growers and amenity services and crop inputs focus through science professionals we serve distribution based inno
Slide 25: Proven buy & build and yield technology transfer capability
Proven buy & build and yield technology transfer capability Intensification & farm consolidation driving market opportunity Ireland and the UK Continental Europe Poland Sales Force 370 Sales Force 330 Customers 30,000 Customers 19,000 Ukraine Footprint 1.4m ha Footprint 11.3m ha Farm size 100 – 2,00
Slide 26: Latin America
Latin America Brazil – market overview Primary producers Global Player % Global Trade • Increasing professionalisation #2 Soy #2 • Increasing intensification and farm consolidation Production Export 39% #3 Corn #2 Speciality nutrition Production Export 21% • Second stage application dedicated #1 Sug
Slide 27: Latin America: Brazil investment
Latin America Brazil investment Paraná State 200,000km2 > 2x Total area Crop input development Crop services of Ireland Customers Turnover Customers Turnover • Farm Size – 100 – 1,000 ha 1,200 €28.4m1 4,000 €88.2m1 • • Two crops per year Fragmented market • Well capitalised primary producers EBITDA
Slide 28: Priorities for Capital Allocation
Priorities for Capital Allocation Reinvestment in core Sustaining / investment capex People Reinvestment R&D and technology Consistent Acquisitions based dividend policy on strategic relevance Strong c. 45% of and expected returns balance sheet Free Cash Flow Target ROCE of 15% Strong cash generatio
Slide 29: Summary & Outlook
Summary & Outlook Preliminary Results 2018 29
Slide 30: Summary and Outlook
Summary and Outlook Resilient business performance in Continued investments in Digital, 1 challenging trading conditions 6 Application Research and Innovation Strong cashflow and working 2 capital management Continuing a balance between 7 organic and acquired growth The Group is well positioned to 3
Slide 31: www.originenterprises.com
www.originenterprises.com 4‐6 Riverwalk, Citywest Business Campus, Dublin 24, Ireland T: +353 1 5634900 F: +353 1 5634916