Adama Ltd. Class A SZSE:000553
ADAMA : Fourth Quarter 2024 Presentation (English)
Source: MarketScreener
ADAMA
Agricultural
Solutions
Q4 & FY 2024
SUMMARY
Crop Protection Industry Status
Channel inventory | Just in time channel | |
levels continue to ease | purchasing patterns in light | |
of global high interest rates | ||
Pricing pressure led by overcapacity of crop protection commodities
Crop commodity prices | Farmer profitability pressured though | |
softening, but remain mildly | some ease in the prices of inputs | |
elevated into 2025 | ||
3
Q4 & FY 2024
ADAMA Solutions
Financial
Highlights
-
Q4 2024 EBITDA rose 54% from Q4 2023; FY
2024 EBITDA 16% above FY 2023 - 2024 operating cash flow $313m, free cash flow $157m; (improvement of +$105m, +$228m vs 2023, respectively)
- Improvement in gross margin and EBITDA margin in Q4 & FY 2024 following:
- Continuation of efficient inventory management - significant decrease in inventory levels (2024 -$295mvs. LY) also supporting positive contribution of lower costs (in 2024 +$406m, in Q4 2024 +$93m, vs. LY)
- Positive product sales mix (+$38m in FY 2024 and +$13m in Q4 2024)
- Continued OPEX discipline (in 2024 -$58m vs LY, in Q4 2024 -$13m vs LY)
*LY- Last Year
4
ADAMA Solutions Q4 2024
P r i c i n g P r e s s u r e , Vo l u m e s
Adjusted | Q4 2024 | Q4 2023 | %▲ | |
$ million | ||||
Sales | 1,018 | 1,043 | (2.4%) | |
Gross Profit | 267 | 228 | 16.9% | |
% of Sales | ||||
26.3% | 21.9% | |||
EBITDA | 124 | 80 | 54% | |
% of Sales | 12.2% | 7.7% | ||
Net Loss | 57 | 84 | ||
% of Sales | ||||
5.7% | 8.0% | |||
Reported Net Loss | 128 | 96 | ||
12.6% | 9.2% | |||
R e t u r n i n g
Q4 Highlights
Sales ▪ Q4 Sales down 2.4% to $1,108 million (up 2% at CER)
- 5% lower prices, 7% increase in volume and negative FX impacts
- Volume growth in most geographies; weak pricing in most regions;.
- Significant FX headwinds, particularly BRL
- De-focusfrom selected low-profit products.
- Lower crop protection and active ingredient market prices mainly commodities
- Just-in-timepurchasing patterns
Gross ▪ Gross Profit 17% above Q4 2023; Improvement in Gross Margin
Profit 26.3% vs 21.9% LY
- Improvement in effect of new inventory sold, priced at market levels (cost) and positive sales mix, despite lower sales
EBITDA ▪ EBITDA 54% above 2023; Improvement in EBITDA Margin 12.2% vs 7.7% LY
- Lower OPEX (-$13m vs LY) following tight OPEX management measures, lower transportation and logistics costs and the positive impact of exchange rates.
Net Loss ▪ Adjusted Net Loss reduced by 31%
- Lower financial expenses mainly due to lower net CPI impact, and lower interest costs net following an improved efficiency of cash management in light of the positive cash flow achieved.
5 | **CER - constant exchange rates |
*** There may be some difference in percentages due to rounding |
ADAMA Solutions FY 2024
P r i c i n g p r e s s u r e , v o l u m e s r e t u r n i n g i n H 2
Adjusted | FY 2024 | FY 2023 | %▲ | |
$ million | ||||
Sales | 3,736 | 4,192 | (10.9%) | |
Gross Profit | 977 | 968 | 0.9% | |
% of Sales | ||||
26.2% | 23.1% | |||
EBITDA | 388 | 335 | 16.0% | |
% of Sales | 10.4% | 8.0% | ||
Net Loss | 200 | 212 | ||
% of Sales | ||||
5.3% | 5.1% | |||
Reported Net Loss | 407 | 242 | ||
10.9% | 5.8% | |||
FY Highlights
Sales ▪ FY Sales down 10.9% to $3.7bn (down 8% at CER)
- 8% lower prices, flat volumes
- Weak pricing in all regions; flat volumes.
- Significant FX headwinds , particularly BRL
- De-focusfrom selected low-profit products.
- Lower crop protection and active ingredient market prices mainly commodities
- Just-in-timepurchasing patterns
Gross ▪ Gross Profit 1% above 2023; Improvement in Gross Margin
Profit 26.2% vs 23.1% LY
- Despite lower sales, moderated by improvement in effect of lower costs of new inventory sold and positive sales mix
EBITDA ▪ EBITDA 16% above 2023; Improvement in EBITDA Margin 10.4% vs 8.0% LY
- Lower OPEX (-$63m vs LY) following tight OPEX management measures, lower transportation and logistics costs and the positive impact of exchange rates.
Net Loss ▪ Adjusted Net Loss reduced by 6%
- Lower financial expenses mainly due to lower net CPI impact, and lower interest costs, net following an improved efficiency of cash management in light of the positive cash flow achieved and, better loan mix.
6 | **CER - constant exchange rates |
*** There may be some difference in percentages due to rounding |
Regional Highlights (USD)
North America | Q4 ($) CER | FY($) | CER |
11% 11% | 4% | 3% |
C&P Solutions:
- Fourth quarter and full year 2024 sales grew in every sector of its market, and margins remained strong. Demand was fueled by a growth in disposable income.
US Ag:
- Positive volume growth, only partially offset by pricing pressures.
- Channel inventory levels returned to post-pandemic normal
- High interest rates and lower crop commodity prices continue to result in just-in-time purchasing patterns
- In Canada, good growing conditions led to high usage rates of herbicides and fungicides, while lower insect pressure resulted in a smaller insecticide market.
Q4 ($) CER | FY($) | CER | |
LATAM | 8% 4% | 20% | 13% |
Brazil:
- Volume growth in fungicides and insecticides, decline in non-selective herbicides
- Pricing pressures and the weak currency negatively impacted performance
LATAM:
- Weaker sales in FY and Q4 2024, mostly due to increased competition and just-in- time purchasing patterns.
• CER - Constant Exchange Rates | |
7 | • APAC - Asia Pacific |
• EAME - Europe, Africa & Middle East | |
• LATAM - Latin America | |
• C&P - Consumer & Professional |
EAME | Q4 ($) CER | FY($) | CER |
1% | 1% | 9% | 8% |
- Revenues in Q4 2024 were similar to those of Q4 2023, with an increase in volumes offset by pricing pressures
- Throughout 2024, pricing pressure remained strong, but channel stock levels began to normalize after two years of high levels.
APAC | Q4 ($) CER | FY($) | CER |
10% 10% | 13% | 12% |
- Continued pricing pressure, however, pricing in some key markets such as Australia seem to have stabilized
- Increased competition and ample over supply of Chinese generics
- Sales in 2024 also impacted by unpredictable weather in India
- Branded formulations business in China proactively promoted differentiated and high-margin products
- New product registrations in India such as Bazak®, Forpido® and the soft introduction of Upturn® in Q4 were well received
Regional Sales Performance
Q4 2024 vs. Q4 2023
% Sales change by region | Total sales & absolute change in sales ($m) | |||||||
Europe, Africa & Middle East | (1%) | (2) | Total $m | |||||
238 | ||||||||
North America | 11% | 26 | 277 | |||||
Latin America | 4% | (31) | 348 | |||||
(10%) | ||||||||
Asia Pacific | (18) | 154 | ||||||
Total | 2% | |||||||
(25) | 1,018 |
CER USD
* CER - Constant Exchange Rates
8** APAC includes ADAMA India and ADAMA South Africa
*** EAME includes Israel, Turkey and the rest of Africa
Regional Sales Performance
FY 2024 vs. FY 2023
% Sales change by region | Total sales & absolute change in sales ($m) | |||||
Europe, Africa & Middle East | (8%) | Total $m | ||||
(116) | ||||||
1,109 | ||||||
3% | ||||||
North America | 28 | 841 | ||||
Latin America | (13%) | (256) | 1,036 | |||
Asia Pacific | (12%) | (112) | ||||
750 | ||||||
Total | (8%) | |||||
(456) | 3,736 |
CER USD
* CER - Constant Exchange Rates
9** APAC includes ADAMA India and ADAMA South Africa
*** EAME includes Israel, Turkey and the rest of Africa
Q4 2024 Sales:
Sales bridge analysis
1,043 | 76 | -51 |
-50 | ||
1,018
7%
5% | 2% |
Q4 2023∆ Volumes∆ PricesFXQ4 2024
▪ Lower crop protection and active ingredient market prices | |
▪ De-focus from selected low-profit products. | |
▪ High competition mainly in commoditized products | |
▪ AI overcapacity, just-in-time purchasing patterns | |
Notes - | |
Numbers in million $; | |
10 | Denotes adjusted figures unless otherwise noted; |
Parts may not sum due to rounding; | |
FX includes currency effect on sales, net of hedging. |
| Attention: This is an excerpt of the original content. To continue reading it, access the original document here. |