Slide 1: Nufarm FY23 results presentation
Nufarm Limited 15 November 2023 ACN 091 323 312 103-105 Pipe Road ASX Release – Company Announcement Laverton North VIC 3026 Australia +61 3 9282 1000 nufarm.com Nufarm FY23 results presentation Attached is Nufarm Limited’s (ASX: NUF) (Nufarm) FY23 results presentation which will be delivered by Nuf
Slide 2: Nufarm FY23 Results
Nufarm FY23 Results 15 November 2023
Slide 3: FY23 Results Overview
FY22 FY23Results ResultsOverview Overview CEO, Greg Hunt
Slide 4: Disclaimer
Disclaimer General This presentation has been prepared by Nufarm Limited. The information contained in this presentation is for informational purposes only as at the date of this presentation on 15 November 2023. The information contained in this presentation is not investment or financial product a
Slide 5: Operational and financial performance
Operational and financial performance Revenue uGross profit uEBITDA uEBIT $3.5b $1,021m $438m $250m Down 3%1 Up 3% Down 2% Up 6% uNPAT Underlying gross Net Debt to Total dividends profit margin uEBITDA $122m 29% 1.9x 10cps Down 8% Improved Within target Final dividend 170bps2 range 5 cps 1. Change m
Slide 6: FY23 significant strategic milestones achieved
FY23 significant strategic milestones achieved Crop protection & seeds - Successful new crop protection product launches delivered diversification at higher margins & expansion of biologicals portfolio - Technology partnerships & distribution agreements continued to provide opportunities for growth
Slide 7: Segment Performance
Segment Performance CEO, Greg Hunt
Slide 8: Geographic footprint & segment diversification
Geographic footprint & segment diversification Underlying EBITDA by segment (AUD) FY23 FY22 % Improvement Europe $165m $171m (4)% North America $161m $148m 9% APAC $88m $135m (35)% Seed Technologies - Global $98m $59m 67% Corporate ($73m) ($65m) (12%) Nufarm Group uEBITDA $438m $447m (2)
Slide 9: North America
North America (USD) Resilient performance in a challenging market, with improved margin from product mix FY23 OVERVIEW 4 YEAR FINANCIAL PERFORMANCE USDm • Revenues down 14% due to price declines, customer destocking & Table N.Am revenue down 14% vs pcp heading N.Am uEBITDA flat vs pcp delayed purcha
Slide 10: Europe
Europe (EUR) Portfolio investments and organic growth driving revenues FY23 OVERVIEW 4 YEAR FINANCIAL PERFORMANCE EURm • Revenue down 8% YoY due to product de-registrations (€25m), Table Europe revenue down 8% vs pcp heading Europe uEBITDA down 6% vs pcp delayed purchasing & drought in southern Euro
Slide 11: APAC
APAC (AUD) Solid result in competitive market - margins impacted by foundational product pricing FY23 OVERVIEW 4 YEAR FINANCIAL PERFORMANCE AUDm APAC revenue down 6% vsTable pcp sub-heading APAC uEBITDA down 35% vs pcp • Revenue down 6% due to lower prices & volumes as customers moved to just in tim
Slide 12: Seed Technologies
Seed Technologies (AUD) 32% Revenue growth; 67% EBITDA growth: enablement of scale-up & capability FY23 OVERVIEW 4 YEAR FINANCIAL PERFORMANCE AUDm Seeds • Strong growth in revenue driven by 30% growth in Sorghum, 20% growth in Seed Tech revenue up 33% vs pcp Seed Tech uEBITDA up 67% vs pcp Canola &
Slide 13: Financial Performance
Financial Performance CFO, Paul Townsend
Slide 14: Financial highlights
Financial highlights Results Summary AUDm FY23 FY22 Change % Revenue1 3,481 3,580 (3%) Underlying gross profit 1,021 989 3% Underlying gross profit margin1 29.3% 27.6% 170bps uEBITDA 438 447 (2%) uEBIT 250 237 6% uNPAT 122 133 (8%) Underlying net financing costs2 (85) (54) 55% Underlying effective t
Slide 15: Half Year Cash flow Movement
Operating Cash Flow – impacted by lower payables as inventory normalised Net working capital & cash flow • NWC movement consistent with expectations as NWC Balance Nufarm transitions to normal inventory levels - AUDm temporarily impacted by lower payables • Operating cash flow reflects seasonally lo
Slide 16: NWC reduction of $344m in H2
NWC reduction of $344m in H2 Net working capital movement impacted by reduction in payables as we sold through inventories on hand Trade Debtors • NWC movement impacted by receivables (up $121m), inventory Inventories (down $138m) & payables (down $518m) compared with FY22 Trade Payables • Receivabl
Slide 17: CAPEX – Normalised intangible & PPE investment
CAPEX – Normalised intangible & PPE investment ~$190m over the last two years with post COVID catchup Capital expenditure summary Investments AUDm Intangibles • Intangible spend includes an element of growth. Continuing investment in crop 9.5% PP&E protection R&D & Seed Technologies IP 8.8% ROFE • P
Slide 18: Robust balance sheet - leverage within the targeted range
Robust balance sheet - leverage within the targeted range of 1.5x – 2.0x Net debt, leverage & liquidity Summary debt profile Sep-23 Sep-22 2.4X Bank loans – secured 532 240 1.9X Bank loans – unsecured 61 15 Senior unsecured notes 540 538 1,038 Deferred debt establishment costs (27) (12) 0.8X 145 849
Slide 19: Crop Protection Strategy Execution
Crop Protection Strategy Execution Group Executive Portfolio Solutions Rico Christensen
Slide 20: Global crop protection product development pipeline
Global crop protection product development pipeline Our crop protection pipeline continues to advance, delivering across multiple years, crops, segments and geographies Regions Crops Project Stage Evolution Estimated Estimated Global Launch Market Pasture Regional Dossier Year1 APAC NA EUMEA Cereal
Slide 21: FY23 Portfolio Solutions Key Milestones & Updates
FY23 Portfolio Solutions Key Milestones & Updates Foundational Innovative Biological Adjacent Integrated Solutions Solutions Solutions Solutions Solutions Joust® Oxbow / BlackHawk / Duplosan® Trunemco® Croplands Carinata Joust contains prothioconazole Proprietary herbicide containing A proprie
Slide 22: Seed Technologies Strategy Execution
Seed Technologies Strategy Execution Group Executive Nuseed Brent Zacharias
Slide 23: Seed Technologies: Outlook & strategic growth drivers
Seed Technologies: Outlook & strategic growth drivers Core seeds Omega-3 Bioenergy Grower adoption Technology adoption Market adoption Canola Aquaterra® Nuseed Carinata New hybrids to support leading market Volume expansion on track with strong grower Production expansion expected to meet posi
Slide 24: Outlook
CEO, Greg Hunt ona >» _ ie
Slide 25: Industry fundamentals support our growth agenda
Industry fundamentals support our growth agenda Crop Achieving above market growth Protection (global market expected to grow at 2.0% real*) Existing pipeline + New Product Introductions + winning share = On track to meet FY26 revenue above market growth aspirations1 through increased Revenues c
Slide 26: Positive outlook
Positive outlook Grain and oil seed stocks to use ratios expected to remain tight. Grain prices expected to remain attractive, supporting grower plantings and demand for crop protection products Nufarm has a clear strategy for growth & is executing on Planning for growth in Seed Technologies. On tra
Slide 27: Q&A
Q&A
Slide 28: Appendices
Appendices
Slide 29: Appendix 1: Non-IFRS disclosures & definitions
Appendix 1: Non-IFRS disclosures & definitions1 Term Definition Gross profit margin Gross profit as a percentage of revenue Underlying gross profit Gross profit before material items Underlying gross profit margin Underlying gross profit as a percentage of revenue Underlying SG&A Sales, marketing an
Slide 30: Appendix 2: Crop Protection sales bridge
Appendix 2: Crop Protection sales bridge Crop Protection revenue1 bridge FY23 v FY22 $m TSA agreement with Sumitomo ended in FY22 3,477 3,284 174 97 3,088 (193) (329) (139) Sep-22 Corporate Crop protection Volume Mix Price FX Sep-23 revenue excl Corporate revenue • Key driver has been the ceasing of
Slide 31: Appendix 3: Financial Summary
Appendix 3: Financial Summary Continuing Operations 12 months ending 30 Sep 2023 12 months ending 30 Sep 2022 Underlying Material items Total Underlying Material items Total $000 $000 $000 $000 $000 $000 Revenue 3,480,611 - 3,480,611 3,772,970 - 3,772,970 Cost of sales (2,459,962) 5,721 (2,454,241)
Slide 32: Appendix 4: Material items
Appendix 4: Material items 2023 2023 2022 2022 $000 $000 $000 $000 pre-tax after-tax pre-tax after-tax Material items by category: Transactions related to Russia and Ukraine 2,312 1,654 (29,454) (28,191) Asset rationalisation and restructuring (12,705) (12,705) - - Debt refinancing costs - - (25,772
Slide 33: Appendix 5: Cash flow
Appendix 5: Cash flow Underlying Material items Total group 2023 $000 $000 $000 Cash flows from operating activities Net operating cash flows (124,630) (990) (125,620) Cash flows from investing activities Net investing cash flows (241,731) - (241,731) Cash flows from financing activities Net financi
Slide 34: Appendix 6: Free cash flow
Appendix 6: Free cash flow NWC outflow driven by seasonality & re-stocking of inventories and consequently lower trade payables AUDm • Operating cash flow generation is highly correlated with changes in Net Working Capital & underlying EBITDA • NWC cash outflow due to stepping up from unsustainable
Slide 35: Appendix 7: Segment Information & reconciliation
Appendix 7: Segment Information & reconciliation Revenue - Underlying 2023 2022 Change Change Operating Segments ($000s) $000 $000 $000 % The group operates predominantly along two business lines, being crop protection and seed technologies. Crop protection APAC 970,504 1,038,424 (67,920) (7%) The c
Slide 36: Appendix 8: Constant currency and FX
Appendix 8: Constant currency and FX 12 months ended Sep 2023 Sep 2023 Sep 2022 Constant Reported Constant 1 Reported currency A$ million currency % Change Revenue 3,480.6 3,394.3 3,773.0 -10% Underlying EBITDA 438.2 435.1 446.8 -3% Underlying EBIT 249.8 251.9 236.7 6% Average exchange rates FY23 v
Slide 37: Appendix 9: Capital Management Principles
Appendix 9: Capital Management Principles Maintaining discipline while retaining flexibility Capital Management Framework Sustained financial resilience throughout operating cycles to support growth & optimise returns to shareholders Principle Optimising financial Maintaining financial Optimising re
Slide 38: Appendix 10: Expense management to support growth
Appendix 10: Expense management to support growth Key underlying SG&A1 movements AUDm • Growth SG&A driven by increases in FTE & overheads to support growth pipeline within both seed technologies and crop protection • Staff costs increased due to CPI increases & employee provisions • Increased wareh
Slide 39: Appendix 11: 2,4-D and glyphosate pricing
Appendix 11: 2,4-D and glyphosate pricing Glyphosate price index1 (5 Jan 2023 = 1.0) 2,4-D price index1 (5 Jan 2023 = 1.0) 1.2 1.2 1.0 1.0 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0.0 0.0 Source: Nufarm analysis 1 Based on Remimbi fob pricing. Base 5 January 2023 - 1 38 C2 - Internal Natixis
Slide 40: Appendix 12: Market drivers remain supportive
Appendix 12: Market drivers remain supportive, although less supportive than last year Driver Relevance to Nufarm Status Commentary 1. Planted Area Demand indicator for Crop Protection • 2023 planted areas in the US (+1%), EU (-1 % cereals, +1% oilseeds) and Australia (-4 %). Expectations products a
Slide 41: Appendix 13: Most price indicators remain above median
Appendix 13: Most price indicators remain above median, EU Oilseeds remain below median Corn, USD/bu – Prices Received Wheat, USD/bu – Prices Received Source: USDA Source: USDA Soybean, USD/bu – Prices Received Rapeseed (Germany), €/tonne Sunflowers, €/tonne Source: TESEO Source: TESEO Source: USDA
Slide 42: Appendix 14: Stocks-to-use ratio remain low
Appendix 14: Stocks-to-use ratio remain low, supporting prices Grains Stocks to Use Ratio, World Ex. China Oilseeds Stocks to Use Ratio, World Ex. China 20% 40% 18.2% 15.1% 30.8% 15 30 15.1% Grains stocks-to-use 23.3% 13.8% ratio is coming off the 10 lowest point since 20 2007/08. s 20.6% Oilseeds s