Nufarm Limited · ASX:NUF
Nufarm — Investor Presentation (September 2005)
62 slides from Nufarm's investor presentation, Sep 1, 2005
Slide 1: Regional Strategy presentation
Regional Strategy presentation September 1, 2005
Slide 2: Presenters and regional general managers
Brian Benson Group GM – Agriculture Lachie McKinnon GM – Australia/New Zealand 2004 sales = $600m Greg Crawford GM – Americas 2004 sales = $380m Hugo Schweers GM – North East Europe 2004 sales = $140m
Slide 3: Global Overview
Global Overview Brian Benson September 1, 2005
Slide 4: Industry background
Industry background Global crop protection market mature with growth 2-3% Consolidation continuing at all levels Fewer proprietary products. “Off patent” segment is growing. China and India continue to have significant manufacturing impact. Biotechnology growth is strong but regionalised.
Slide 5: Market overview
Market overview Crop protection market 2004 - Total USD$30.7billion (excludes Biotech) by geography... by crop... by segment... Sunflower Others ROW Sugarbeet Other 1% 3% 4% 2% 12% TNVV Latin NAFTA 27% Fungicides America Cereals 24% 18% 25% 15% Herbicides 48% Asia Insecticides 25% Europe 25% Sugarca
Slide 6: Nufarm Global Strategy
Nufarm Global Strategy Focus is agriculture ¾ 95% of sales will be Agriculture Growth is key ¾ Geographic – Latin America and EU accession states ¾ Portfolio – Strong pipeline Platform is in place in key regions ¾ Resources aligned with key business potential ¾ Organisational strength and abil
Slide 7: Nufarm: Globalising the business
Nufarm: Globalising the business Group revenues 1997 2004 Australia/NZ Australia/NZ 43% 83% Rest of Rest of World World 57% 17% NZ$830.5 million A$1.58 billion
Slide 8: Nufarm sales by geography - 2004
Nufarm sales by geography - 2004 Crop protection revenues Americas - 28% Europe - 21% Asia - 5% Australia – 41% New Zealand - 5% Total sales - $1,441 million
Slide 9: Nufarm global portfolio
Nufarm global portfolio Phenoxy herbicides – global #1 position Glyphosate – strong global position Trifluralin – Australia and Canada Copper fungicides – key global platform to build fungicide position Bromoxynil – global JV with Bayer Aminotriazole – Nufarm global herbicide position Ov
Slide 10: Australia & New Zealand
Australia & New Zealand Lachlan McKinnon September 1, 2005
Slide 11: Australian Agricultural Zones
Australian Agricultural Zones
Slide 12: Market snapshot Australia – market share x crop
Market snapshot Australia – market share x crop Canola – 4% Cotton – 20% Rice – 1% Grain Legumes – 6% Cereals – 40% Others – 14% Horticulture – 15%
Slide 13: Market snapshot Australia – market share x product group
Market snapshot Australia – market share x product group Insecticide – 30% Herbicide – 59% Fungicide – 8% Others – 3% Total Aus Market $1.35b
Slide 14: Market snapshot Herbicides – market share x product group
Market snapshot Herbicides – market share x product group Others – 31% Triazines – 6% Grass Selectives – 9% Paraquat – 2% Trifluralin – 6% MCPA – 3% 2,4-D – 13% Glyphosate – 30%
Slide 15: Market snapshot Australia
Market snapshot Australia Manufacturer/supplier Approx market share 2004 Nufarm 45% (Nufarm/CropCare/Monsanto/BASF) Syngenta 12% Farmoz/MAI 8% Bayer 7% Dow 4% Dupont 4% Others 20%
Slide 16: Market snapshot Australian distribution 2004
Market snapshot Australian distribution 2004 Elders – 21% Landmark – 29% IHD 17% NRI – 3% CRT – 14% Others 16%
Slide 17: Australian Market
Australian Market Nufarm Manufacturers Formulators Push Distributors Pull Nufarm and Other 3rd parties End Users Nufarm
Slide 18: Operations in Australia
Operations in Australia 5 Manufacturing plants 9 Nufarm Service Centres Large field force Extensive R&D
Slide 19: Competitive advantage
Competitive advantage Major manufacturing position Broad product portfolio Leading brands Strong distribution relationships Marketing / R&D strengths Full service company
Slide 20: Brand strength
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Slide 21: Opportunities
Opportunities Independent distribution positions ¾ Broad distribution policies and extensive market access New products ¾ Both new formulations/packaging of ‘older chemistries’ and genuine new products Horticulture ¾ Growth segment of Australian AG Forestry/Industrial – ¾ Largely undeveloped
Slide 22: Market snapshot Australia – summary
Market snapshot Australia – summary Nufarm has a clear leadership position Niche growth opportunities do exist Strong focus on cost control / efficiencies
Slide 23: Nufarm New Zealand
Nufarm New Zealand
Slide 24: Market snapshot New Zealand – major crops x area
Market snapshot New Zealand – major crops x area Crop Hectares Pasture 16,000,000 Barley 81,000 Wheat 53,000 Maize 35,000 Apples 14,100 Kiwifruit 12,200 Wine grapes 12,600
Slide 25: Market snapshot New Zealand – products by category
Market snapshot New Zealand – products by category Insecticides – 19% Herbicides – 52% Other – 7% Fungicides – 22% NZ$220m
Slide 26: Market snapshot New Zealand
Market snapshot New Zealand Manufacturer / Supplier Approx market share 2004 Nufarm 25% Dow 18% Bayer 16% BASF 7% Orion 6% Syngenta 5% Dupont 5% Others 18%
Slide 27: Market snapshot New Zealand – opportunities & challenges
Market snapshot New Zealand – opportunities & challenges Steady growth in rural inputs sector Direct to farmer relationships Regulatory environment facilitates new entrants = more competition Forestry and non-crop opportunities New products (Roundup Transorb®) Pasture Partners
Slide 28: Americas Region
Americas Region Greg Crawford September 1, 2005
Slide 29: Americas operating units
Americas operating units Established operating entities in Canada, USA, Chile, Argentina and Brazil Calgary − Central America is served by the Chicago US entity Raleigh − Andean region countries in South America are served from Chile Manufacturing (mainly formulation) sites in Canada, USA Fortal
Slide 30: Market positioning – general
Market positioning – general Progressed from new 'off-shore' entrant to secure market positions Approach in each country has been the same − Build relationships and credibility; look for sensible acquisition targets − Focus on core products, then expand portfolio − Utilise traditional distributi
Slide 31: Market positioning – general
Market positioning – general The Nufarm brand stands for: − Quality products and services − Differentiated formulations − Attention to customer needs − A growth-oriented company with a long-term outlook − An easy company to do business with Our challenge is to continue bringing new products or f
Slide 32: Market snapshot Canada
Market snapshot Canada Market size: $850 million – flat Cereal market dominates – similar to Australia Closed / difficult regulatory regime Nufarm well positioned to add new molecules through acquisition, alliances and new registrations
Slide 33: Market snapshot USA
Market snapshot USA Market size: $6.4 billion Low growth in value over past decade – value shift due to GM Significant consolidation at all levels Fewer new molecules Biotech will impact systems and products Resistance will impact systems and products
Slide 34: US Ag Chemical Markets
US Ag Chemical Markets Corn Key A.I. $1,900 m Approach Soybeans (2,4-D, Glyphosate) $1,200 m Cotton $ 761 m Wheat $ 281 m Portfolio TNVV Approach $ 800 m Pasture $ 191 m
Slide 35: Nufarm strengths – USA
Nufarm strengths – USA Distributor acceptance Market acceptance Strategic alliances with major players Expanding product range (new ai's, products …) Strong regulatory position Experienced sales force Strong relationship with customers
Slide 36: Nufarm Ag positioning - USA
Nufarm Ag positioning - USA Ag market value has declined, but not the amount of product being produced and sold Position ourselves as an attractive alternative. Aim to: − Provide more value for same quality active ingredient − Provide higher level of customer service and support − Provide higher
Slide 37: Nufarm Ag outlook - USA
Nufarm Ag outlook - USA Grow organically and with new products Glyphosate − New formulations, new combinations Phenoxies − New combinations Insecticides − Imidacloprid, pyrethroids Fungicides − New combinations, new active ingredients Add more differentiated products to the portfolio
Slide 38: Chemical Market Segments
NUFARM NUFARM TURF TURF & & SPECIALTY SPECIALTY Chemical Market Segments Turf and Ornamental − Lawn and landscape, golf, nursery − Total annual market is around $767 million − Current Nufarm sales are focused primarily in lawn care Vegetation management − Forestry, DOT/bareground, utility (right
Slide 39: Formulating Expertise
NUFARM NUFARM TURF TURF & & SPECIALTY SPECIALTY Formulating Expertise Basic molecules (2,4-D, MCPA, MCPP) − Formulation technology − Combination with other products − Production of premium products for turf and lawn care Long-term exclusive arrangement with majors − Premium combination products
Slide 40: New Specialty Actives
NUFARM NUFARM TURF TURF & & SPECIALTY SPECIALTY New Specialty Actives Seeking new registrations on post-patent opportunities − Nufarm platform attracts other actives Will include new and unique combinations utilising existing chemistries
Slide 41: Market snapshot Central America
Market snapshot Central America Market size: − Mexico: $500 million − Central America: $200 million − Caribbean: $37 million Sugar cane, citrus, bananas, maize, vegetables, flowers Opportunity to develop branded strategy for Nufarm
Slide 42: Market snapshot Argentina
Market snapshot Argentina Market size: $800 million – volatile and lower margin Soybeans, citrus, maize, cotton, wheat High generic presence – very open regulatory scheme Nufarm infrastructure in place More access to molecules through sourcing and alliances. Glyphosate still dominates our
Slide 43: Market snapshot Andean region
Market snapshot Andean region Market size: $650 million Sugar cane, grapes, bananas, citrus, maize, vegetables Transitioning from start-up mode in these markets with registration now granted or in progress Moving from tech supplier to a branded business Evaluating other opportunities
Slide 44: Americas region - summary
Americas region - summary Nufarm is now a fully integrated organisation The Nufarm brand is established and respected in North America South America represents a key growth opportunity Manufacturing operations / capabilities enhanced Healthy pipeline of development projects / new products
Slide 45: Market snapshot - Brazil
Market snapshot - Brazil General data Agripec data Market size US$4,391M Market position #8 position in Brazil Herbicides 51% Market share % 5% Major products Insecticides 26% Fungicides 21% Glyphosate 15% 2,4-D 30% Major product/ Methamidophos shares Soybean 41% Tebuconazole Maize 9% Monocrotophos
Slide 46: North East Europe
North East Europe Hugo Schweers September 1, 2005
Slide 47: Market Development 2004 in Western Europe – Crops and Segments
Market Development 2004 in Western Europe – Crops and Segments Based on ex-company value; Total: 5,090 M€ Market value (M€) 1800 Insecticides Fungicides 1500 Herbicides 1200 900 600 300 0 Cereals Vine Top Fruit Corn Sugar Pota-toes Vege- OSR Seed Beet tables treatm. * * Cereals, Corn, Sunflower
Slide 48: Market share in Europe 2004
Market share in Europe 2004 Total EU + EFTA Nations: Market 6,700 m€ 15.3% 28.6% BCS 2.3% Syngenta 2.7% BASF 2.8% Du Pont DOW 4.8% Monsanto MAI 5.5% NUFARM Others 21.3% 16.7%
Slide 49: North-Eastern Europe 2003 Market Size per country
North-Eastern Europe 2003 Market Size per country (m€); NEE Total: 3,080 b€ 1100 1000 900 800 700 600 500 400 300 200 100 0 d W cs os y en d um IS un R ul n w ae or an an an Fi /S /S S B C ug N ti gi D H R m rl R al U ol el he -Y C A B er P B ex G et N
Slide 50: Update on 2004/05 NEE – Business situation
Update on 2004/05 NEE – Business situation Business development and performance Phenoxy take-over from BASF very well managed Glyphosate sales up, due to lower global supply, price increases Key events and critical issues New product introductions very successful Copper products repositionin
Slide 51: Nufarm Europe share in North-Eastern countries
Nufarm Europe share in North-Eastern countries 2004 Crop Protection Sales by Country in NEE 25% Nordic / Baltics - 6% Germany / Benelux / CH / AU - 55% 5% F&N Poland / CR / SR - 25% 9% 55% 6% Hungary / Ex-Yugoslavia - 5% Others - 9%
Slide 52: Market snapshot Hungary, Ex-Yugoslavia
Market snapshot Hungary, Ex-Yugoslavia Distribution in Hungary via Kwizda/Hungary Successful launch of phenoxies in ex-Yugoslavia - Duplosan® and U46 ®
Slide 53: Market snapshot Nordic / Baltics
Market snapshot Nordic / Baltics Distribution via Monsanto Excellent portfolio fit Phenoxy herbicides are key drivers for growth - U46® and Duplosane®
Slide 54: Market snapshot F&N Poland, CZ, SR
Market snapshot F&N Poland, CZ, SR Strong growth / prospects Lentipur® key grass weed product in cereals Glyphosate/Klinik® delivers strong performance Dicopur® and Agritox® well positioned in all three markets
Slide 55: Market snapshot Germany, Benelux, AU/CH
Market snapshot Germany, Benelux, AU/CH Strong growth in Germany – continue to take market share Growing position in fungicides - Flamenco® Direct distribution in Belgium with a diversified portfolio Austria growing in glyphosate and phenoxies
Slide 56: Nufarm – North Eastern Europe Crop protection portfolio
Nufarm – North Eastern Europe Crop protection portfolio Proprietary & branded products Independent regulatory licences Nufarm Sales 11% Proprietary products 19% Branded generic products 70% Third Party
Slide 57: Business model breaks from industry trends
Nufarm – North Eastern Europe Business model breaks from industry trends Seeds Specialty Herbicides Insecticides Crops Nufarm Europe: Major multinationals competing for the same markets CEREALS / CORN EMERGING MARKETS EMERGING COUNTRIES Our focus is on growing in key market sectors where we have com
Slide 58: Nufarm Europe: based on development...
Nufarm Europe: based on development... Agrochemicals in Europe: apparently a mature market European norms: respect of new parameters of environmental compatibility Replacement of existing products in favour of new product solutions Market value evolution: turnover perspectives 120 100 80 Existing pr
Slide 59: Nufarm Europe – strong pipeline projects → 2010
Nufarm Europe – strong pipeline 13 projects → 2010 Herbicide Herbicide Fungicide Launch 2008 2009 2009 Cereals Cereals Cereals, Crops (Autumn) (Spring) OSR Germany, Germany, Germany, Target Markets France, UK, France, UK, France, UK, Poland Poland Poland
Slide 60: German Crop Protection market
German Crop Protection market Nufarm's solution to different categories Proprietary Patented products products Generic products (off patent) Market: 60% 20% 20% Nufarm: 65% 24% 11% Premium product Standard product Generic Product solutions: solutions: Solutions: • Product aquisitions • Well known pr
Slide 61: Nufarm's position in Europe
Nufarm's position in Europe Combination of strength and growth opportunities Several key Strong Expanding Increasing Additional Herbicides position position in presence in collaboration in UK and Germany, Eastern opportunities Fungicide Spain Benelux and Europe development Nordics
Slide 62: Nufarm Limited
Nufarm Limited Head office: 103-105 Pipe Road, Laverton North, Vic. Australia. Tel: 61 3 9282 1000 Fax: 61 3 9282 1111 www.nufarm.com