Wynnstay Group plc · LSE:WYN
Wynnstay — H1 2022 Earnings Presentation
27 slides from Wynnstay's earnings presentation, Jun 28, 2022
Slide 1: Wynnstay Group Plc Interim Results
WYNNSTAY GROUP PLC Interim Results For the six months to 30 April 2022 28 June 2022 Supporting sustainable agriculture 1
Slide 2: Operational Highlights
Wynnstay Group plc Interim Results 2 Operational Highlights Continued double-digit profit Record interim results Major acquisition growth at both Divisions - Strong farmgate prices continued to - Agriculture Division – one-off gains - Humphrey Feeds Ltd acquired in underpin positive farmer sentiment
Slide 3: H1 2022 Financial Key Points
Wynnstay Group plc Interim Results 3 H1 2022 Financial Key Points • Revenue up 34% to £335.66m (H1 2021: £249.71m) Underlying PBT − commodity price inflation accounted for estimated c.£80.00m of the rise £10.21m • Gross profit up 24% to £41.26m (H1 2021: £33.30m) +85% • Underlying pre-tax profit* up
Slide 4: H1 Financial Track Record
Wynnstay Group plc Interim Results 4 H1 Financial Track Record Continuing Operations Revenue (£m) Gross profit (£m) 335.7 41.3 260.6 249.7 32.3 31.5 33.3 218.5 229.3 29.4 26.4 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Underlying PBT (£m) EPS (p) 10.2 36.9 5.5 20.1 21.6 5.0 4.5 17.0 17.5
Slide 5: H1 Income Statement
Wynnstay Group plc Interim Results 5 H1 Income Statement Six months Six months ended ended 30 April 2021 £000 30 April 2022 • Commodity price inflation Revenue 335,661 249,709 accounted for c.£80.0m of Cost of sales (294,399) (216,413) revenue increase Gross profit 41,262 33,296 • Revenue contributi
Slide 6: H1 Balance Sheet
Wynnstay Group plc Interim Results 6 H1 Balance Sheet £000 Six months ended 30 April 2022 Six months ended 30 April 2021 NON-CURRENT ASSETS Goodwill 17,465 14,417 Investment property 2,372 2,372 Property, plant and equipment 18,340 17,654 Right of use asset 9,861 10,153 Investments 3,430 3,613 • Sig
Slide 7: H1 Pre IFRS 16 Cash Flow Reconciliation
Wynnstay Group plc Interim Results 7 H1 Pre IFRS 16 Cash Flow Reconciliation Six months ended Six months ended £000 30 April 2022 30 April 2021 EBITDA 11,832 7,450 • 59% increase in EBITDA Property Right of Use amortisation adjusted 1,102 1,120 • Inflation significantly impacted Derivative recogniti
Slide 8: H1 Cash/(Net Debt) Cycle
Wynnstay Group plc Interim Results 8 H1 Cash/(Net Debt) Cycle Net debt of £m £12.75m including 15.5** 14.7** all leases 6.5 6.2 7.6 8.4* 9.2* (Accounting debt)* 4.2 4.0 1.7 (30 Apr 2021: £9.0m) 0.8** -2.6** -1.6 -12.8* -4.8* -4.6 £7.62m excluding -6.4 -6.4 -9.0* -7.6** property leases -11.2 (Bank de
Slide 9: Segmental Contribution
Wynnstay Group plc Interim Results 9 Segmental Contribution H1 2022 Specialist Agricultural Merchanting Agriculture Division £72.63m Division H1 2022: GROUP OPERATING PROFIT (BEFORE NON-RECURRING ITEMS): REVENUE £10.27m – UP 87% Y.O.Y. £335.66m +34% OPERATING PROFIT OPERATING PROFIT £4.28m £6.06m £2
Slide 10: Agriculture Division
Wynnstay Group plc Interim Results AGRICULTURE DIVISION Feed, Arable, and Glasson activities Revenue: £263.0.m (H1 2021: £180.72m) +45% y.o.y. Operating profit: £6.06m (H1 2021: £2.20m) +176% y.o.y.
Slide 11: Trading Environment
Wynnstay Group plc Interim Results 11 Trading Environment Mid-Jun Mid-Oct Mid-Jun % 2022 2021 2021 change Feed wheat/tonne £284 £196 £194 +46% Farmer sentiment buoyed by strong farmgate prices Feed barley/tonne £260 £184 £176 +48% • Grain and red meat (excl. pig) prices were strong Oilseed rape/tonn
Slide 12: Feed | Volume growth ahead of sector average
Wynnstay Group plc Interim Results 12 Feed | Volume growth ahead of sector average 6TH LARGEST UK FEED PRODUCER • Manufactured feed volumes up by 3.25% – better than sector average – good growth in target segments of dairy and poultry, as well as sheep • Overall contribution affected by margin press
Slide 13: Humphrey Acquisition | Highly complementary
Wynnstay Group plc 13 Humphrey Acquisition | Highly complementary Analysis of Feed Volumes FY 2021 • Well-established supplier of poultry feed (conventional and organic) to farmers in the South, South West, Midlands and Wales. Pullet-rearing enterprise supports feed activity – revenues of £39m and a
Slide 14: Arable | Grain volumes bounced back
Wynnstay Group plc Interim Results 14 Arable | Grain volumes bounced back • Volume of grain traded by GrainLink increased by 50% - reflecting ‘more normal’ 2021 harvest compared to exceptionally poor 2020 harvest No 3 - CEREAL SEED PROCESSOR No 4 - GRASS SEED PROCESSOR - good gains in the East of En
Slide 15: Glasson | Significant one-off fertiliser gains
Wynnstay Group plc Interim Results 15 Glasson | Significant one-off fertiliser gains • Contribution significantly ahead of expectations driven by one-off gains in fertiliser blending activity - significant stock profits following sharply rising price of natural gas (used in the production of fertili
Slide 16: Specialist Agricultural Merchanting Division
Wynnstay Group plc Interim Results SPECIALIST AGRICULTURAL MERCHANTING DIVISION Wynnstay Depots and Youngs Animal Feeds Revenue: £72.63m (H1 2021: £68.88m) +5% y.o.y Operating profit: £4.28m (H1 2021: £3.40m) +26% y.o.y
Slide 17: Specialist Agricultural Merchanting | Strong sales in core product categories
Wynnstay Group plc Interim Results 17 Specialist Agricultural Merchanting | Strong sales in core product categories • Performance benefited from cumulative efficiency improvements and higher-margin MARKET SHARE* sales mix • Silage sheets 16% • Animal health products 12% − good sales across core prod
Slide 18: Summary and Outlook
Wynnstay Group plc Interim Results SUMMARY AND OUTLOOK
Slide 19: Summary and Outlook | Well-positioned for continuing growth
Wynnstay Group plc Interim Results 19 Summary and Outlook | Well-positioned for continuing growth • Very strong H1 performance, boosted by substantial one-off gains in fertiliser blending activity GROUP STRENGTHS – H1 fertiliser stock gains are not expected to be repeated in H2 • Very experienced ma
Slide 20: Supplementary Information
Wynnstay Group plc Interim Results SUPPLEMENTARY INFORMATION − Presentation Team − Acquisitions − Business Overview − Market Trends − Geographic Reach − Brexit and UK Agriculture Act
Slide 21: Presentation Team
Wynnstay Group plc Interim Results 21 Presentation Team Gareth Davies, CEO • Appointed as CEO in July 2018 • Previously Joint Managing Director of Wynnstay (Agricultural Supplies) Ltd and before that Head of Agriculture • Joined Wynnstay in 1999 • Background in agricultural sales Paul Roberts, CFO •
Slide 22: Business Overview
Wynnstay Group plc Interim Results 23 Business Overview Routes to Market AGRICULTURE SPECIALIST AGRICULTURAL c.70% of total revenues MERCHANTING– c.30% of total revenues Wynnstay Feed • Manufacture and supply of feeds for Depots farm livestock • Supply of raw feed materials for farmers and other man
Slide 23: Geographic Reach
Wynnstay Group plc Interim Results 23 Geographic Reach 11 manufacturing sites 54 depots c.110 vehicles in fleet c.960 employees
Slide 24: Acquisitions: 2011-2022
Wynnstay Group plc Interim Results 24 Acquisitions: 2011-2022 ARABLE FEEDS DEPOTS DATE ACQUISTION BUSINESS TYPE Mar 2022 Humphrey Feeds Ltd (and Humphrey Pullets Ltd) Poultry feed manufacturer and supplier (and associated pullet-rearing operation) Fertiliser manufacturing business and assets (“HGBF”
Slide 25: Market Trends
Wynnstay Group plc Interim Results 25 Market Trends Average farmgate milk price UK crop prices – Ex-farm spot values 2012 - 2023 38 36 34 32 30 28 Sep-21 Mar-21 Jan-21 Jul-21 Jan-22 Mar-22 May-21 Nov-21 AHDB Deadweight cattle price (p/kg) Deadweight sheep prices (p/kg) Defra/ AHDB/ Andersons 700 460
Slide 26: Market Trends
Wynnstay Group plc Interim Results 26 Market Trends Key inputs price inflation CPI and ‘Agflation’ – 2015 - 2023 ONS/Andersons Trade/Andersons Feed wheat costs of production Production, Usage & Stocks of Grain – 2002 – 2023 Andersons USDA /Andersons
Slide 27: Brexit and UK Agriculture Act
Wynnstay Group plc Interim Results 27 Brexit and UK Agriculture Act • Clarity provided with the EU Free Trade Agreement (“FTA”) - stimulus to investment, and UK food sector can seek new markets - FTA is a good outcome for sheep farmers and buoys beef, dairy and arable sectors • UK Agriculture Act re