Ag Growth International Inc. · TSX:AFN
Ag Growth International — Q2 2024 Earnings Presentation
33 slides from Ag Growth International's earnings presentation, August 2024
Slide 1: Paul Householder
PAUL / HOUSEHOLDER
Slide 2: CEO Commentary
AGI= CEO COMMENTARY
Slide 3: Topics for Today's Review
TOPICS FOR TODAY’S REVIEW CORPORATE REVENUE BY OUTLOOK & SAFETY STRATEGIC SEGMENT & GUIDANCE 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: Q2 2024 Results
Q2 2024 RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN -10% $390 $352 22.6% -325 bps 19.3% -23% $88 $68 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 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: Key Product Transfers
KEY PRODUCT TRANSFERS • Expected to be ~4% of full-year revenue • Incremental orders received • In-region reference sites ROSENORT • Capex light EMEA GRAND ISLAND MARSHALL • Ongoing multi-year contribution expected INDIA BRASIL 7
Slide 8: Emerging Market Contributions
EMERGING MARKET CONTRIBUTIONS • Emerging markets include Middle East, Africa, Southeast Asia 85% • High growth markets – large populations with underdeveloped infrastructure • Strategic focus for AGI • Clear momentum in sales activity and order book • Meaningful contribution to overall consolidated
Slide 9: Q2 2024 KPI Check-In
Q2 2024 KPI CHECK-IN Strategic Priorities KPIs Commentary Revenue growth • Q2 2024 revenue down -10% y/y Profitable Organic Growth Adjusted EBITDA growth • Q2 2024 adj. EBITDA down -23% y/y • Strong full-year adjusted EBITDA outlook ~ • Step-change in margin levels relative to historic Operational E
Slide 10: Q2 2024 Results – Farm Segment Revenue
Q2 2024 RESULTS – FARM SEGMENT REVENUE CAD, millions TOTAL CANADA U.S. INTERNATIONAL $233 -17% $194 -22% -6% $120 $94 $83 $78 -27% $30 $22 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 Note: Revenue by geography and segment is a supplementary financial measure. Source: Company reports 10
Slide 11: Q2 2024 Results – Commercial Segment Revenue
Q2 2024 RESULTS – COMMERCIAL SEGMENT REVENUE CAD, millions TOTAL CANADA U.S. INTERNATIONAL flat $157 $157 +4% +2% $86 $89 -17% $51 $52 $20 $17 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 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 • Full-year 2024 Adjusted EBITDA expected to be in the $300 - $310 million range • Full-year 2024 Adjusted EBITDA margins greater than 19.0% • Consistent with previous messaging, we see significant strength in the Commercial segment portion of the order
Slide 13: Confidence in Full Year Outlook
CONFIDENCE IN FULL YEAR OUTLOOK 1. Most businesses within AGI performing well 2. Record order book entering the second half 3. Strong International Commercial contributions on-track 4. Early positive signs in U.S. & Brazil Farm markets 5. Modest H2/24 order intake required to meet full year guidance
Slide 14: Wrap Up
AGI= WRAP UP
Slide 15: CFO Commentary
AGI= CFO COMMENTARY
Slide 16: Topics for Today's Review
TOPICS FOR TODAY’S REVIEW DETAILED BALANCE RESULTS BY CASH FLOW OUTLOOK SHEET SEGMENT 16
Slide 17: Q2 2024 Results
Q2 2024 RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN -10% $390 $352 22.6% -325 bps 19.3% -23% $88 $68 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio. See "Non-IFRS and Other Financial Measures". Source: Co
Slide 18: Q2 2024 Farm Results
Q2 2024 FARM RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN $233 -17% $194 30.0% -265 bps 27.4% $70 -24% $53 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio. See "Non-IFRS and Other Financial Measures". Reven
Slide 19: Q2 2024 Commercial Results
Q2 2024 COMMERCIAL RESULTS CAD, millions REVENUE ADJUSTED EBITDA ADJUSTED EBITDA MARGIN flat 18.5% -368 bps $157 $157 14.8% -20% $29 $23 Q2/23 Q2/24 Q2/23 Q2/24 Q2/23 Q2/24 Adjusted EBITDA is a non-IFRS measure. Adjusted EBITDA Margin % is non-IFRS ratio. See "Non-IFRS and Other Financial Measures".
Slide 20: Balance Sheet Discipline
FINANCIAL OVERVIEW & OUTLOOK BALANCE SHEET DISCIPLINE Net Debt Leverage Ratio 7.0x 6.0x • Committed to deleveraging 5.0x • Debt repayment is a high 4.0x priority 3.1x 3.0x • Target ratio of 2.5x expected 2.0x to be achieved in 2024 1.0x – Q4/19 Q1/19 Q2/19 Q3/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q
Slide 21: Working Capital Management Focus
FINANCIAL OVERVIEW & OUTLOOK 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 post 15% 16% large warranty claim 10% resolution 5% • He
Slide 22: Free Cash Flow
FINANCIAL OVERVIEW & OUTLOOK CAD, millions FREE CASH FLOW $65 • New metric to replace former “Funds From Operations” • Free Cash Flow defined as: • Cash provided by operating activities • Less: PP&E spending • Less: development of intangibles • Data sourced directly from cash flow statement • Procee
Slide 23: Financial Overview & Outlook
FINANCIAL OVERVIEW & OUTLOOK CAD, millions • Full-year 2024 Adjusted EBITDA expected to be • Record order book for end of second quarter in the $300 - $310 million range • +8% year-over-year • Full-year 2024 Adjusted EBITDA margins greater than 19.0% • Significant strength in International Commercia
Slide 24: Paul Householder / Vik Rudyk
PAUL VI HOUSEHOLDER RUDYK
Slide 25: 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 26: 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 27: 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, 2024 Adjusted EBITDA margin %, and target net debt leverage ratio to be achieved in 2024, which are based on, among other things, the various assumptions discl
Slide 28: 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 29: 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 30: 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 31: 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 32: 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 33: 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 — Q2 2024 Earnings Presentation on 6ix