Ag Growth International Inc. · TSX:AFN
Ag Growth International — Q3 2024 Earnings Presentation
32 slides from Ag Growth International's earnings presentation, Nov 5, 2024
Slide 1: Earnings Call
EARNINGS CA PAUL / HOUSEHOLDER RUDYK L
Slide 2: CEO Commentary
AGI= CEO COMMENTARY
Slide 3: Topics for Today's Review
TOPICS FOR TODAY’S REVIEW THIRD CORPORATE REVENUE BY OUTLOOK & SAFETY QUARTER STRATEGIC SEGMENT & GUIDANCE OVERVIEW PRIORITIES GEOGRAPHY 3
Slide 4: Safety Is a Top Priority
SAFETY ISA TOP PRIORITY ‘ v7 (o Ay y Ue ONE AGI= l ff ff fF fF fF ff fF f ff fF S fe Me fe ei
Slide 5: Corporate Strategic Priorities
CORPORATE STRATEGIC PRIORITIES PROFITABLE OPERATIONAL BALANCE ORGANIC EXCELLENCE SHEET GROWTH DISCIPLINE KPI KPI KPI Revenue & Adjusted Margin Expansion Net Debt Leverage Ratio EBITDA Growth Free Cash Flow 5
Slide 6: Q3 2024 Results
Q3 2024 RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN $410 -13% $357 -142 bps 20.6% 19.2% -19% $85 $69 Q3/23 Q3/24 Q3/23 Q3/24 Q3/23 Q3/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio. See "Non-IFRS and Other Financial Measures". Source: Co
Slide 7: Q3 2024 Themes
Q3 2024 THEMES CAD, millions • Most businesses within AGI are performing well • U.S. Farm is the key area of softness which is impacting consolidated results • Margins proving to be highly resilient • Operational Excellence initiatives offsetting mix impact and providing stability • International Co
Slide 8: Confidence in Full Year Outlook
CONFIDENCE IN FULL YEAR OUTLOOK Q2/24 Comment Q3/24 Update • Most businesses within AGI performing well ✓ • Record order book entering the second half ✓ • Strong International Commercial contributions on-track ✓ • Early positive signs in U.S. & Brazil Farm markets • Modest H2/24 order intake requi
Slide 9: Q3 2024 KPI Check-In
Q3 2024 KPI CHECK-IN Strategic Priorities KPIs Commentary Revenue growth • Q3 2024 revenue down -13% y/y Profitable Organic Growth Adjusted EBITDA growth • Q3 2024 adjusted EBITDA down -19% y/y • Near record performance expected for full year ~ • Step-change in margin levels relative to historic Ope
Slide 10: Q3 2024 Results – Farm Segment Revenue
Q3 2024 RESULTS – FARM SEGMENT REVENUE CAD, millions TOTAL CANADA U.S. INTERNATIONAL -19% $227 $185 $124 -36% +13% $73 $80 $65 -18% $38 $31 Q3/23 Q3/24 Q3/23 Q3/24 Q3/23 Q3/24 Q3/23 Q3/24 Note: Revenue by geography and segment is a supplementary financial measure. Source: Company reports 10
Slide 11: Q3 2024 Results – Commercial Segment Revenue
Q3 2024 RESULTS – COMMERCIAL SEGMENT REVENUE CAD, millions TOTAL CANADA U.S. INTERNATIONAL -6% $183 $173 +1% $101 $102 -8% $61 $56 -29% $21 $15 Q3/23 Q3/24 Q3/23 Q3/24 Q3/23 Q3/24 Q3/23 Q3/24 Note: Revenue by geography and segment is a supplementary financial measure. Source: Company reports 11
Slide 12: Financial Overview & Outlook
FINANCIAL OVERVIEW & OUTLOOK Guidance Updated Order Book • Full-year 2024 Adjusted EBITDA of approximately $280 million +36% $665 • Full-year 2024 Adjusted EBITDA margins of approximately 19.0% $489 • Strong fourth quarter results expected, supported by the international Commercial segment Q3/23 Q3/
Slide 13: CFO Commentary
AGI= CFO COMMENTARY
Slide 14: Topics for Today's Review
TOPICS FOR TODAY’S REVIEW DETAILED BALANCE RESULTS BY CASH FLOW OUTLOOK SHEET SEGMENT 14
Slide 15: Q3 2024 Results
Q3 2024 RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN $410 -13% $357 -142 bps 20.6% 19.2% -19% $85 $69 Q3/23 Q3/24 Q3/23 Q3/24 Q3/23 Q3/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio. See "Non-IFRS and Other Financial Measures". Source: Co
Slide 16: Q3 2024 Farm Results
Q3 2024 FARM RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN -19% $227 -262 bps $185 27.2% 24.6% -27% $62 $45 Q3/23 Q3/24 Q3/23 Q3/24 Q3/23 Q3/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio. See "Non-IFRS and Other Financial Measures". Reven
Slide 17: Q3 2024 Commercial Results
Q3 2024 COMMERCIAL RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN -6% -90 bps $183 18.8% $173 17.9% -10% $34 $31 Q3/23 Q3/24 Q3/23 Q3/24 Q3/23 Q3/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio. See "Non-IFRS and Other Financial Measures". R
Slide 18: Balance Sheet Discipline
BALANCE SHEET DISCIPLINE Net Debt Leverage Ratio • Committed to deleveraging 7.0x 6.0x 5.0x • Significant improvement in 4.0x recent years 3.1x 3.0x 2.0x 1.0x • Debt repayment is a high – priority Q1/22 Q3/22 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q2/22 Q4/22 Q1/23 Q
Slide 19: Working Capital Management Focus
WORKING CAPITAL MANAGEMENT FOCUS Working Capital Intensity • Temporary ramp-up in inventory in H1/24 reflecting 30% heightened Commercial 25% segment order book ahead of H2/24 delivery 20% • Reduction in provisions 15% following large warranty 14% 10% claim resolution 5% • Heightened internal focus
Slide 20: Clear Focus on Driving Strong Free Cash Flow
CLEAR FOCUS ON DRIVING STRONG FREE CASH FLOW $111 $111 • On an LTM basis, FCF generation $88 has stepped up to a new level of $73 performance over recent years $65 $50 $49 $50 • Combination of expanding $34 $36 margins, working capital focus, capex discipline $8 $9 $4 ($2) • Management aligned to dr
Slide 21: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Capital Allocation Priorities Tier 1 • Debt repayment Highest priority • Maintenance capex • Highly compelling organic growth opportunities Tier 2 • Disciplined working capital management Opportunistic • Share repurchases Tier 3 • M&A Not a priority • Dividend increases
Slide 22: Financial Overview & Outlook
FINANCIAL OVERVIEW & OUTLOOK Guidance Updated Order Book • Full-year 2024 Adjusted EBITDA of approximately $280 million +36% $665 • Full-year 2024 Adjusted EBITDA margins of approximately 19.0% $489 • Strong fourth quarter results expected, supported by the international Commercial segment Q3/23 Q3/
Slide 23: Q&A
PAUL VI HOUSEHOLDER RUDYK
Slide 24: Forward-Looking Information (1/3)
FORWARD-LOOKING INFORMATION (1/3) This webcast presentation contains forward-looking statements and information (collectively, "forward-looking information") within the meaning of applicable securities laws that reflect our expectations regarding the future growth, results of operations, performance
Slide 25: Forward-Looking Information (2/3)
FORWARD-LOOKING INFORMATION (2/3) Forward-looking information involves significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking information, including: general economic and business conditions and changes i
Slide 26: Forward-Looking Information (3/3)
FORWARD-LOOKING INFORMATION (3/3) Financial Outlook Also included in this webcast presentation is an estimate of AGI’s 2024 Adjusted EBITDA and 2024 Adjusted EBITDA margin %, , which are based on, among other things, the various assumptions disclosed in this webcast presentation including under "For
Slide 27: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION PRESENTATION OF FINANCIAL INFORMATION All financial information of AGI included in this presentation is reported in Canadian dollars and (except for forward-looking financial information) has been derived from audited and unaudited historical financial statement
Slide 28: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation, and amortization) is a non-IFRS financial measure and its most directly comparable financial measure that is disclosed in our consolidated financial statements is profit (loss) before incom
Slide 29: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Adjusted EBITDA – Farm Segment - The following table reconciles profit (loss) before income Adjusted EBITDA – Commercial Segment - The following table reconciles profit (loss) before taxes to Adjusted EBITDA for the Farm segment for each of the periods presented
Slide 30: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Adjusted EBITDA Margin % is a non-IFRS ratio and is defined as Adjusted EBITDA divided by revenue. Adjusted EBITDA margin % is a non-IFRS ratio because one of its components, Adjusted EBITDA, is a non- IFRS financial measure. Management believes Adjusted EBITDA
Slide 31: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Net Working Capital is a non-IFRS financial measure and its most directly comparable financial measure that is disclosed in our consolidated financial statements is Total Current Assets. Net Working Capital is defined as Total Current Assets less cash and cash e
Slide 32: Presentation of Financial Information
PRESENTATION OF FINANCIAL INFORMATION Order book is a supplementary financial measure and is defined as the total value of committed sales orders that have not yet been fulfilled that: (a) have a high certainty of being performed as a result of the existence of a purchase order, an executed contract
Ag Growth International — Q3 2024 Earnings Presentation on 6ix