Nufarm Limited · ASX:NUF
Nufarm — FY2012 Earnings Presentation
37 slides from Nufarm's earnings presentation, Sep 24, 2012
Slide 1: 2012 Full Year Results
For personal use only 2012 Full Year Results September, 2012
Slide 2: Disclaimer
Disclaimer For personal use only Forward looking statements This presentation has been prepared by Nufarm Limited. The information contained in this presentation is for informational purposes only. The information contained in this presentation is not investment or financial product advice and is no
Slide 3: FY12 Result Highlights
For personal use only FY12 Result Highlights Doug Rathbone Managing Director
Slide 4: Results highlights
2012 Full Year Results For personal use only Results highlights Underlying EBIT up by 20% to $206 million Underlying NPAT up by 17% to $115.4 million Earnings growth in major geographic segments Strong revenue and earnings growth in high value seed technologies business Good balance sheet
Slide 5: Finances
For personal use only Finances Paul Binfield Chief Financial Officer
Slide 6: Disclosure changes – providing greater transparency
2012 full year results For personal use only Disclosure changes – providing greater transparency Treatment of FX gains/losses: Same as H1, classified as part of net financing costs Relate largely to FX gains/loss on financing activity Substantially hedged, expect them to be immaterial go-for
Slide 7: Sustainable and profitable growth
2012 full year results For personal use only Sustainable and profitable growth Year ended 31 July 2012 2011 % Revenue ($’m) 2181.6 2083.6 4.7% Gross profit margin (%) 28.0% 27.0% 103 bps Underlying EBITDA ($’m) 267.8 231.8 15.5% Underlying EBIT ($’m) 206.0 171.8 19.9% Underlying NPAT ($’m)
Slide 8: Constant currency results
2012 full year results For personal use only Constant currency results Year ended 31 July 2012 Actuals 2011 Actuals at Financing related FX exposures are ($’m) 2012 FX rates substantially hedged ($’m) Natural hedges across the Group helps to Revenue 2,181.6 1,986.0 9.8% insulate profit from curr
Slide 9: Material items
2012 full year results For personal use only Material items Pre-tax After-tax Class action settlement accounted $’m $’m for in 2012 Class action settlement (43.5) (30.5) Restructuring costs, largely redundancies, Restructuring costs (7.3) (5.0) incurred in the re-organisation of Europe Debt refi
Slide 10: Good discipline over expense control
2012 full year results For personal use only Good discipline over expense control SG&A expenses 2012 2011 Expense control tight, expenses Underlying selling, marketing & growing at lower rate than sales 235.7 229.5 2.7% distribution expenses ($’m) 1 Corporate cost increase reflects: Underlying g
Slide 11: Improved discipline around working capital management is delivering results
2012 full year results For personal use only Improved discipline around working capital management is delivering results Year ended 31 July 2012 2011 Average net debt 1 ($’m) 614.0 672.1 Net debt at 31 July ($’m) 467.8 465.2 Average net working capital (ANWC) ($’m) 986.2 1,046.0 ANWC/sales (%) 45.3
Slide 12: Improved discipline around working capital management is delivering results
2012 full year results For personal use only Improved discipline around working capital management is delivering results $’m % Net working capital (NWC) is a key discipline across the group 1200 56 Nufarm management, at all levels, has 53.9 54 NWC measure as part of short term 1150 incentive 52
Slide 13: Geographic & product segment review
For personal use only Geographic & product segment review Brian Benson Group Executive - Agriculture
Slide 14: Sales revenue by region
Sales revenue by region For personal use only Crop protection segment 2012 2011 South South North America North America America 16% America 16% 23% 21% Asia – 6% Europe Asia – 7% Europe 21% 22% Australia/NZ Australia/NZ 34% 34% 2012: $2,061m 2011: $1,996m 14
Slide 15: Results – crop segment review: Australia / New Zealand
2012 Results – crop segment review For personal use only Australia / New Zealand Australia 2012 2011 $m $m Mostly good conditions in Eastern/Southern states; Dry and late season in Western Sales 701.0 674.8 Australia Underlying EBIT 106.0 94.7 Good performance in horticulture, sugar cane and cot
Slide 16: Results – crop segment review: Asia
2012 Results – crop segment review For personal use only Asia 2012 2011 $m $m Results impacted by dry conditions in Indonesia Sales 125.6 142.3 Increased pressure on glyphosate Underlying EBIT 16.7 22.3 margins Diversification into additional crop segments Strong growth in Malaysia Herbicide
Slide 17: Results – crop segment review: North America
2012 Results – crop segment review For personal use only North America USA Significant sales growth in local currency 2012 2011 $m $m Good start to ag season, before drought conditions took hold Sales 470.2 418.9 Phenoxy herbicide portfolio performed Underlying EBIT 33.3 16.5 strongly Better
Slide 18: Results – crop segment review: South America
2012 Results – crop segment review For personal use only South America Brazil Dry weather in some regions, but positive 2012 2011 market conditions overall $m $m Sales up by 14% in local currency and strong Sales 332.6 324.5 margin expansion Underlying EBIT 17.5 4.1 Continued progress on portf
Slide 19: Results – crop segment review: Europe
2012 Results – crop segment review For personal use only Europe 2012 2011 Mixed seasonal conditions $m $m Sales 431.1 435.8 Economic and credit pressures in some markets Underlying EBIT 43.2 38.3 Increased sales in Germany, France and Eastern European growth markets Fungicides 15% Corn herbi
Slide 20: Major product segments
Major product segments For personal use only Crop protection % total segment revenues 2012 2011 Fungicides 10% Fungicides 12% Herbicides Insecticides 9% Herbicides Insecticides 10% 70% 68% Other 11% Other 10% $2,061 million $1,996 million **Other includes equipment; adjuvants; PGR's; industrial 20
Slide 21: Results – Product segment review: Herbicides
2012 Results – Product segment review For personal use only Herbicides Strong demand and positive 2012 2011 pricing environment for phenoxy herbicides Group sales 1,426.4 1,357.8 Glyphosate margins continued to feel pressure in some markets Average GM 26% 26% Picloram mixtures perform strongly
Slide 22: Results – Product segment review: Insecticides
2012 Results – Product segment review For personal use only Insecticides 2012 2011 Portfolio growth considering loss of 2 products in Brazil (-$27.5m) Group sales 184.3 196.6 Successful transition to 'replacement' chemistry in Brazil Average GM 35% 36% Lower insect pressure in Australia and Eu
Slide 23: Results – Product segment review: Fungicides
2012 Results – Product segment review For personal use only Fungicides 2012 2011 Lower fungal disease pressure in most key markets Group sales 212.7 243.8 Delayed season in Europe Average GM 28% 32% Azoxystrobin registrations approved in Europe Copper portfolio impacted by depressed TNVV seg
Slide 24: Results – Product segment review: Other
2012 Results – Product segment review For personal use only Other * 2012 2011 PGR sales up on last year, with higher value niche products performing well in horticulture Group sales 232.8 200.1 Average GM 26% 18% Croplands spray machinery business stronger on increased investment by farmers in c
Slide 25: Results – Seed technologies
2012 Results – Seed technologies For personal use only Seed technologies % segment revenues 2012 2011 Seed Seed 65% 61% Seed Seed Treatment Treatment 35% 39% $121.0 million $87.2 million 25
Slide 26: Results – Seed technologies segment review
2012 Results – Seed technologies segment review For personal use only Seed Technologies Growth in sales and margin 2012 2011 $m $m Excellent canola season in Australia Sales 121.0 87.2 Record volumes achieved in sorghum segment Average GM 53% 52% Underlying EBIT 30.6 26.3 Seeds 2000 acquisit
Slide 27: Growth and Outlook
For personal use only Growth and Outlook Doug Rathbone Managing Director
Slide 28: Investing in future growth
2012 Full Year Results For personal use only Investing in future growth New management resources in key focus areas Global procurement and supply chain Business information services Risk management Regional structures and strategies Move to 'one Europe' Renewed focus on innovation in A
Slide 29: Investing in future growth
2012 Full Year Results For personal use only Investing in future growth Innovation in product development New advanced delivery technology – eg. Nano Technology Product application management – eg. 'Spraywise' Formulation design – eg. tank mixing compatibility Packaging improvements – eg.
Slide 30: Investing in future growth – Seed Technologies
2012 Full Year Results For personal use only Investing in future growth – Seed Technologies Additional people resources Global and regional management Breeding and molecular biology Seed treatment Upgraded financial platforms; R&D/analysis systems Optimising 7 global breeding centres and
Slide 31: Outlook
Outlook For personal use only Macro environment remains generally positive Agricultural demand drivers will support soft commodity prices and growers have strong incentives to maximise yield. Climatic/seasonal factors will influence cropping activity and demand patterns for Nufarm products. Fo
Slide 32: Solutions for a growing world
Solutions for a For personal use only growing world
Slide 33: Supplementary information
For personal use only Supplementary information
Slide 34: Segment information – new segment basis
Segment information – new segment basis For personal use only Prior to FY12, we reported our seed technologies business and our crop protection business on a combined basis, divided into five geographic segments. We have altered our segment reporting to reflect changes in the way we manage our busin
Slide 35: Non IFRS disclosures and definitions
Non IFRS disclosures and definitions For personal use only Term Definition Underlying NPAT Profit / (loss) for the period attributable to the equity holders of Nufarm Limited less material items. Underlying EBIT Earnings before net finance costs, taxation and material items. Underlying EBITDA Earnin
Slide 36: Non IFRS information reconciliation
Non IFRS information reconciliation For personal use only 2012 2011 Underlying Material Total Underlying Material Total items items Continuing operations $'000 $'000 $'000 $'000 $'000 $'000 Revenue 2,181,551 2,181,551 2,083,589 2,083,589 Cost of sales (1,569,852) (805) (1,570,657) (1,521,037) (606)
Slide 37: Non IFRS information reconciliation
Non IFRS information reconciliation For personal use only Year ended 31 July 2012 2011 $000 $000 Underlying EBIT 205,973 171,779 Material items impacting operating profit (61,001) (143,690) Operating profit 144,972 28,089 Underlying EBIT 205,973 171,779 Statutory depreciation and amortisation 65,489