Adama Ltd. Class A · SZSE:000553
Adama Ltd. Class A — Q3 2020 Earnings Presentation
31 slides from Adama Ltd. Class A's earnings presentation, 2020
Slide 1: Q3 & 9M 2020 Review
Q3 & 9M 2020 IL Rev icw
Slide 2: Legal Notice
Legal Notice This presentation is for marketing and information purposes only. By this presentation, neither ADAMA Ltd. nor Adama Agricultural Solutions Ltd. (together the “Company” or “ADAMA”) intend to give, and the presentation does not constitute, professional or business advice or an offer or r
Slide 3: Financial Performance Overview
Financial Performance Overview
Slide 4: Q3: Record high sales driven by strong volume growth; currencies a major drag
Q3: Record high sales driven by strong volume growth; currencies a major drag %▲ FX Q3 Highlights Adj. $ million Q3 2020 Q3 2019 CER USD Impact ▪ Sales Financial Performance Review ̶ Strong 11% volume growth Sales 978 953 +3% (88) +12% ̶ Led by continued robust performance in emerging markets Gross
Slide 5: Q3 Sales: Robust CER performance, driven by strong volume growth
Q3 Sales: Robust CER performance, driven by strong volume growth Sales bridge analysis 103 9 1,066 -88 953 978 +12% +11% +3% Q3 2019 Quantity Price Q3 2020 FX Q3 2020 Variance Variance CER USD 5 NOTE: FX includes currency effect on sales and hedging
Slide 6: Q3 Gross Profit: strong volume growth, lower procurement costs more than offset by FX
Q3 Gross Profit: strong volume growth, lower procurement costs more than offset by FX GP bridge analysis Bridge Analysis 25 -75 295 20 9 274 31.0% 28.0% Q3 2019 Quantity Price Cost FX Q3 2020 Variance Variance Variance 6 NOTE: Quantity variance includes mix effect; FX includes currency effect on sal
Slide 7: 9M: Record high sales; profit impacted by currency weakness
9M: Record high sales; profit impacted by currency weakness 9M 9M %▲ FX 9M Highlights Adj. $ million CER 2020 2019 USD Impact ▪ Sales Financial Performance Review ̶ Continued strong 8% volume growth despite ongoing Sales 2,987 2,962 +1% (222) +8% global COVID-19 constraints ̶ FX impact: -$222m Gross
Slide 8: 9M Sales: robust CER performance, driven by strong volume growth
9M Sales: robust CER performance, driven by strong volume growth Sales bridge analysis 241 6Bridge Analysis3,209 -222 +8% 2,987 2,962 +8% +1% 9M 2019 Quantity Price 9M 2020 FX 9M 2020 Variance Variance CER USD 8 NOTE: FX includes currency effect on sales and hedging
Slide 9: 9M Gross Profit: robust volume growth, lower procurement costs more than offset by FX
9M Gross Profit: robust volume growth, lower procurement costs more than offset by FX GP bridge analysis 6Bridge Analysis 15 -184 64 968 869 32.7% 29.1% 9M 2019 Quantity Price Cost FX 9M 2020 Variance Variance Variance 9 NOTE: Quantity variance includes mix effect; FX includes currency effect on sal
Slide 10: Significant volatility in global 9-month average currency markets during 2020
Significant volatility in global 9-month average currency markets during 2020 9M Sales Impact, post- hedging -$147m -$12m Financial Performance Review 30.6% 0.1% Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 -$18m -$11m 5.8% 3.7% Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2
Slide 11: Adjusted vs. Reported Financial Results
Adjusted vs. Reported Financial Results The financial results in this presentation are presented on an “Adjusted” basis, and differ to some extent from the “Reported” financials contained in the formal financial statements of the Company. ADAMA’s approach on the use of adjustments: Financial Perform
Slide 12: Positive Cash Flow generation; controlled working capital build-up supporting growth
Positive Cash Flow generation; controlled working capital build-up supporting growth Improved Cash Flow Generation Regional and portfolio unpredictability, strong Strong Balance Sheet emerging markets growth pressure working capital Net debt / EBITDA ratio of 2.0x Financial Performance Review Invent
Slide 13: Regional Review
A, ADAMA Regional Review
Slide 14: Robust Q3 CER growth driven by emerging markets
Robust Q3 CER growth driven by emerging markets Sales change by region – Q3 2020 vs. Q3 2019 Region Relative Sales Change Constant Exchange Rate Absolute Sales change (USD $m) USD terms Europe (5.0%) (8) (4.0%) Regional Review Latin America 38.7% 33 10.9% North America (9.3%) (9.3%) (15) 5.3% of whi
Slide 15: Continued strong CER growth despite ongoing global COVID-19 constraints
Continued strong CER growth despite ongoing global COVID-19 constraints Sales change by region – 9M 2020 vs. 9M 2019 Region Relative Sales Change Constant Exchange Rate Absolute Sales change (USD $m) USD terms Europe Regional Review (0.7%) (26) (3.2%) Latin America 57 32.7% 8.6% North America (7.1%)
Slide 16: Q4 Outlook
Q4 Outlook ❖ COVID-19: ▪ Our major production facilities globally are continuing to operate, with limited disruption ▪ Global supply lines and logistics continue to experience friction and increased costs ▪ China suppliers have returned to operation and supply levels are normal ❖ Europe: Late Q3 res
Slide 17: Bolstering ADAMA's commercial presence in China and our global product offering
Beijing « Bolstering ADAMA’s commercial presence in China and our global product offering «| Pace eres 1989 . Dafeng, Jiangsu Province, China ‘Shenzhen ADAMA to acquire a majority stake in both Huifeng’s domestic China commercial business as well as its key crop protection synthesis and formulation
Slide 18: Thank You
A, ADAMA Thank You
Slide 19: Appendices
A, ADAMA Appendices
Slide 20: Regional Highlights
A, ADAMA Regional Highlights
Slide 21: Regional Performance: Europe
Europe % Variance % Variance % Variance % Variance Q3’20 Q3’19 9M 20 9M 19 USD CER USD CER Sales ($m) 181 188 -4.0% -5.0% 790 816 -3.2% -0.7% CER: Constant Exchange Rate Highlights Regional Performance ▪ Q3 sales lower largely due to widespread extreme drought conditions which reduced crop protectio
Slide 22: Regional Performance: Latin America
Latin America % Variance % Variance % Variance % Variance Q3’20 Q3’19 9M 20 9M 19 USD CER USD CER Sales ($m) 335 302 +10.9% +38.7% 714 657 +8.6% +32.7% CER: Constant Exchange Rate Highlights Regional Performance ▪ Strong performance in Q3 and 9M driven by significant volume growth throughout the reg
Slide 23: Regional Performance: North America
North America % Variance % Variance % Variance % Variance Q3’20 Q3’19 9M 20 9M 19 USD CER USD CER Sales ($m) 145 160 -9.3% -9.3% 518 560 -7.6% -7.1% CER: Constant Exchange Rate Highlights Regional Performance North America Crop Protection Consumer & Professional Solutions ▪ Lower sales in Q3 and 9M
Slide 24: Regional Performance: Asia Pacific
Asia Pacific % Variance % Variance % Variance % Variance Q3’20 Q3’19 9M 20 9M 19 USD CER USD CER Sales ($m) 148 138 +7.0% +5.3% 497 496 +0.2% +3.4% CER: Constant Exchange Rate Highlights Regional Performance ▪ Strong volume growth in Q3 resulted in 9M sales to reach prior years level, and compensati
Slide 25: Regional Performance: India, Middle East & Africa
India, Middle East & Africa % Variance % Variance % Variance % Variance Q3’20 Q3’19 9M 20 9M 19 USD CER USD CER Sales ($m) 170 166 +2.8% +7.5% 468 432 +8.3% +14.2% CER: Constant Exchange Rate Highlights Regional Performance ▪ Continued strong volume growth in Q3 and 9M more than offset regional curr
Slide 26: Reported vs. Adjusted P&L
A, ADAMA Reported vs. Adjusted P&L
Slide 27: Adjusted vs. Reported P&L
Adjusted vs. Reported P&L $ million Q3 2020 Q3 2019 %▲ Q3 2020 Q3 2019 %▲ 9M 2020 9M 2019 %▲ 9M 2020 9M 2019 %▲ Adjusted Adjusted Reported Reported Adjusted Adjusted Reported Reported Financial Performance Review Sales 978.2 953.4 3% 978 953 3% 2,987 2,962 1% 2,987 2,962 1% Gross Profit 274.3 295.2
Slide 28: EBITDA Bridge Analysis
A, ADAMA EBITDA Bridge Analysis
Slide 29: Q3 EBITDA – bridge analysis
Q3 EBITDA – bridge analysis 28 -1 -71 Bridge Analysis 20 9 144 130 15.1% 13.3% Q3 2019 Quantity Price Cost Operating FX Q3 2020 Variance Variance Variance Expense 29 NOTE: Quantity variance includes mix effect; FX includes currency effect on sales, costs and hedging
Slide 30: 9M EBITDA – bridge analysis
9M EBITDA – bridge analysis 16 4 -164 64 6 509 436 Bridge Analysis 17.2% 14.6% 9M 2019 Quantity Price Cost Operating FX 9M 2020 Variance Variance Variance Expense 30 NOTE: Quantity variance includes mix effect; FX includes currency effect on sales, costs and hedging
Slide 31: Thank You
ADAMA Thank You