Ag Growth International Inc. · TSX:AFN

Ag Growth International — Investor Presentation (July 2015)

28 slides from Ag Growth International's investor presentation, July 2015

  1. Slide 1: Expanding Our Growth Platform

    E X PA N D I N G O U R G ROW T H P L AT FO R M JULY 2015 1

  2. Slide 2: Safe Harbour Statement

    SAFE HARBOUR STATEMENT Certain statements contained herein constitute forward-looking statements that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. Forward-looking statements may contain such words as “

  3. Slide 3: Corporate Overview

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  4. Slide 4: Corporate Overview

    CORPORATE OVERVIEW HEADQUARTERS Winnipeg, Manitoba HISTORY Founded in 1996; IPO 2004 (TSX: AFN) MARKET CAP ~$670M TOTAL SALES Pro Forma Fiscal 2014 $600 million EMPLOYEE COUNT 2000 employees Total of 15 facilities and 1.6M combined sq.ft. MANUFACTURING DIVISIONS manufacturing capacity located in Can

  5. Slide 5: Vision and Strategy

    To Be the Global Leader in Grain Handling, VISION: Storage and Conditioning Solutions S T R AT E G Y: Focused catalogue expansion, acquiring leading brands 1. to provide complete grain handling, storage and conditioning solutions Geographic diversification to provide growth in emerging markets, miti

  6. Slide 6: Corporate Overview: Service all key grain handling segments

    CORPORATE OVERVIEW Service all key grain handling segments EXPORT DESTINATION FARM ELEVATOR PORT PORT PROCESSOR 6

  7. Slide 7: AGI History

    A WESTEELS PTM= £ A AIRLANco eT eeeneeTt | NT RAINICO Z UNION IRON= GRAIN GUARD= SMAGI= | [D2 1998 a RBATCO SLT FOUNDED NovemBeR, 1996 AGIZ= 7

  8. Slide 8: Grain Handling Equipment

    © World's largest manufacturer of portable grain handling equipment Low price point item with a 3-5 year replacement cycle * Dedicated production facilities & low cost producer status ¢ Dominant dealer network & extensive warehousing system PORTABLE GRAIN HANDLING WESTFIELD= WHEATHEART= BATCO= REM=

  9. Slide 9: Key Demand Drivers

    KEY DEMAND DRIVERS Crop Production Volume Harvest Conditions Storage Practices Infrastructure Gap 9

  10. Slide 10: Expanding Growth Potential

    EXPANDING GROWTH POTENTIAL

  11. Slide 11: Westeel Transaction

    WESTEEL TRANSACTION PURCHASE PRICE $205M net of cash & redundant asset TRAILING EBITDA(1) $20M 2014E including corporate cost adjustments SYNERGIES Anticipated near term annual synergies of approximately $5M ADJUSTED EBITDA REVENUE A N D E B I T D A M A R G I N (1) 16.7% $202.0 13.9% $25.4 11.2% 11.

  12. Slide 12: Complementary Geographies

    COMPLEMENTARY GEOGRAPHIES Central & Western Europe Canada RUK U.S. Middle East / North Africa Latin America Australia / New Zealand 12

  13. Slide 13: International Growth Opportunities

    INTERNATIONAL GROWTH OPPORTUNITIES  The international grain storage deficit creates significant short and long term growth  Provides scale to compete against large international players CZECH REPUBLIC  More robust catalogue enhances ability to provide customers with complete storage and handling

  14. Slide 14: Revenue Synergies

    REVENUE SYNERGIES Progress Key Actions • Increase smoothwall bin capacity Smoothwall bin growth 5% • Regional expansion driven by transportation constraints • Batco under bin for seed systems launched Catalogue bundling opportunities 25% • Programmed selling of full seed and fertilizer catalogue • T

  15. Slide 15: Cost Synergies

    COST SYNERGIES Progress Key Actions • Align Westeel organizational structure to fit AGI Organizational Redesign 65% • Sales, marketing, finance, IT, purchasing, operations & engineering changes • Bring outsourced parts in-house • Standardize design, engineering, production, parts and Outsourcing & P

  16. Slide 16: Outlook

    OUTLOOK

  17. Slide 17: Canadian Outlook

    CANADIAN OUTLOOK  Lack of moisture in majority of growing regions increasing the likelihood of significant crop damage  Unlikely that sufficient moisture will be received in next few weeks to produce average yields  Impacts all on-farm business lines including storage, aeration and portable grain

  18. Slide 18: U.S. Outlook

    U.S. OUTLOOK  Cautious buying behaviour continues as dealers and farmers sit on sidelines waiting for indications of favourable crop development  Crop conditions generally favourable, however USDA ratings have declined in recent weeks  Pace of commercial business improved subsequent to Q1 but mar

  19. Slide 19: Westeel: Geographic Balance

    WESTEEL: GEOGRAPHIC BALANCE 2014 REVENUE BY GEOGRAPHY S TA N D A L O N E COMBINED 19% 26% AGI 17% 55% 44% 39% Westeel 12% 83% 5% Canada U.S. International 19

  20. Slide 20: Portable Grain Handling

    PORTABLE GRAIN HANDLING  Portable grain handling has a higher level of concentration in the US PORTABLE GRAIN HANDLING market Portable Grain Handling by  Portable grain handling represents Geography our highest margin product line 2%  Strongest network of warehouse and stock point locations in th

  21. Slide 21: International

    INTERNATIONAL  Stronger start to international business in 2015. Sales plus order backlog at March 31, 2015 of $55M (2014- $38M)  Greater geographic diversification as secondary markets gain traction  Anticipate year over year growth  Remain positive regarding long term infrastructure gap 21

  22. Slide 22: International Business & Outlook

    INTERNATIONAL BUSINESS & OUTLOOK

  23. Slide 23: International Strategy

    INTERNATIONAL STRATEGY  Target large corporate farms and multinational grain traders  Well capitalized  Multi-year CAPEX spends R O M A N I A  EDC insured  Bundled sales, leveraging catalogue  Repeat business confirms sustainability UKRAINE 23

  24. Slide 24: Russia and Ukraine

    RUSSIA AND UKRAINE  Sales commenced in 2011:  2011 - $11M  2012 - $27M  2013 - $57M  2014 - $37M RUK – 185 M Hectares  Short term challenges  Continue to sell, ship and quote new projects  Multi National Companies still investing  Strong long term potential USA – 174 M Hectares 24

  25. Slide 25: Latin America

    LATIN AMERICA  Significant infrastructure opportunity  Tariff free (ex-Brazil) – compete effectively from North America  AGI dedicated personnel – 2012  Awarded five major projects in 2014 totalling approx. $20 million L AT I N A M E R I C A 25

  26. Slide 26: Brazil Opportunity

    BRAZIL OPPORTUNITY  Less than 15% on farm storage capacity  Historical lack of investment in infrastructure  Lack of rail or inland waterway options  Road transport costs significantly higher than ROW  Antiquated, inefficient port facilities  Organic entry into market 26

  27. Slide 27: Brazil Progress

    BRAZIL PROGRESS  Team of five led by Wilfried Toth, former leader of Kepler Weber  Continue to explore M&A as we enter the market organically Commercial:  Focus on the commercial business with port and inland facilities  Leverage AGI’s North American relationships and brand strength Farm:  Earl

  28. Slide 28: Expanding Our Growth Platform

    E X PA N D I N G O U R G ROW T H P L AT FO R M 28

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