Nufarm Limited · ASX:NUF
Nufarm — Investor Presentation (September 2018)
35 slides from Nufarm's investor presentation, Sep 26, 2018
Slide 1: Capital raising
Capital raising For personal use only 26 September 2018 NOT FOR DISTRIBUTION IN THE UNITED STATES
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only This presentation has been prepared by Nufarm Limited ACN 091 323 312 (“Nufarm" or the "Company"). This presentation has been prepared in relation to a pro-rata accelerated renounceable entitlement offer of new shares in Nufarm (“New Shares”) wit
Slide 3: Important notice and disclaimer (continued)
Important notice and disclaimer (continued) For personal use only The presentation includes certain "forward-looking statements" such as indications of, and guidance on, future events, future earnings and the future financial performance and financial position of Nufarm. Forward-looking statements c
Slide 4: Overview
Overview For personal use only • Nufarm today announces that it is undertaking a $303 million fully underwritten pro rata entitlement offer ("Offer") • The Offer will help ensure Nufarm remains in a strong position to manage short term balance sheet risk, and supports the continuation of the Company
Slide 5: Nufarm's strategy is delivering positive outcomes
Nufarm’s strategy is delivering positive outcomes For personal use only Building on the strengths Nufarm has in key target markets and core crops Securing consistent revenue and market share growth Achieving margin expansion, with a focus on differentiated products and operational efficiencies D
Slide 6: The successful execution of our strategy is reflected in an improving financial performance
The successful execution of our strategy is reflected in an improving financial performance Nufarm has delivered strong EBITDA growth and working capital improvements, however this has been impacted by For personal use only adverse climatic conditions in FY18 Underlying EBITDA (A$m) Average net work
Slide 7: Severe drought conditions in Australia are impacting Nufarm's short term performance
Severe drought conditions in Australia are impacting Nufarm’s short term performance For personal use only • Driest conditions in 100 years in some parts of Australia • Significant FY18 earnings impact on Australian business • Forecast for relatively dry spring conditions and El Nino watch alert • C
Slide 8: Seasonal conditions in Europe have also impacted working capital
Seasonal conditions in Europe have also impacted For personal use only working capital • Long winter and dry spring/summer conditions in Europe result in delayed sales and collections • European acquired portfolios also added receivables of between A$40-50m • New portfolios also heavily weighted to
Slide 9: And some uncertainty exists on a broader industry front
And some uncertainty exists on a broader industry For personal use only front • Emerging markets FX volatility has increased significantly in recent months, particularly in Brazil and Argentina • Political uncertainty including: US tariffs, with potential to impact both agricultural exports to Chi
Slide 10: Pro-forma financial impact
Pro-forma financial impact Nufarm's net debt / underlying EBITDA2 as at 31 July 2018 is 3.0x. This falls to 2.4x as a result of the $303 million Offer For personal use only Impact to Balance Sheet1 Pro forma as at 31-Jul- A$m Nufarm as at 31-Jul-18 Pro forma adjustment 18 • Proceeds of $296 million
Slide 11: Nufarm will retain an ability to support its growth ambitions
Nufarm will retain an ability to support its growth For personal use only ambitions • Manufacturing capacity expansion in the Americas to support a solid growth outlook New plant in Greenville, Mississippi will service key Southern US cropping regions and deliver important freight savings Plans
Slide 12: Longer term industry dynamics underpinned by strong demand
Longer term industry dynamics underpinned by strong demand Nufarm is well positioned to benefit from forecast growth in the global crop protection market For personal use only Underlying demand remains strong for agricultural The global crop protection market is expected products to continue to grow
Slide 13: Entitlement offer overview
Entitlement offer overview For personal use only • Fully underwritten 3 for 19 accelerated renounceable entitlement offer with retail rights trading to raise approximately $303 million1 Offer structure and size • Approximately 52 million new shares to be issued under the Offer representing 13.6% of
Slide 14: Equity raising timetable
Equity raising timetable All dates 20181 For personal use only Announcement of Entitlement Offer Wednesday, 26 September Institutional Entitlement Offer opens Wednesday, 26 September Institutional Entitlement Offer closes2 Thursday, 27 September Institutional bookbuild closes Friday, 28 September En
Slide 15: Key risks - Appendix A
For personal use only Key risks Appendix A
Slide 16: Key risks
Key risks For personal use only This section discusses some of the key risks associated with an investment in shares in Nufarm. These risks may affect the future operating and financial performance of Nufarm and the value of Nufarm shares. The risks set out below are not listed in order of importanc
Slide 17: Key risks - Business risks
Key risks (continued) For personal use only Business risks As an input supplier to global agriculture, demand for crop protection products is influenced by climatic conditions that help determine the timing and extent of cropping activity as well as weed, pest and disease pressures. Climatic conditi
Slide 18: Key risks - Business risks
Key risks (continued) For personal use only Business risks Global crop protection companies such as Nufarm purchase inputs and determine selling prices in a range of international currencies and are therefore exposed to fluctuations Foreign exchange in exchange rates. Further, a substantial portion
Slide 19: Key risks - Business risks (continued)
Key risks (continued) For personal use only Business risks (continued) Nufarm conducts business in a highly competitive industry in which there are a number of well established competitors that have significantly greater financial resources, sales and marketing organisations, market penetration and
Slide 20: Key risks - Business risks (continued)
Key risks (continued) For personal use only Business risks (continued) Nufarm relies on supply of various active ingredients, intermediates and other inputs from a number of third party suppliers, including suppliers based in China. The reliability of supply and the cost of these inputs can be impac
Slide 21: Key risks - Business risks (continued)
Key risks (continued) For personal use only Business risks (continued) Nufarm relies on the supply of a number of key raw materials, intermediates and active ingredients in order to produce and supply its range of crop protection products. Commercial terms relating to the supply of those inputs can
Slide 22: Key risks - Business risks (continued)
Key risks (continued) For personal use only Business risks (continued) Nufarm has significant short term funding facilities to fund its working capital requirements. Continued access to these facilities is dependent upon compliance with relevant banking covenants and the successful renewal of these
Slide 23: Key risks - Business risks (continued)
Key risks (continued) For personal use only Business risks (continued) Nufarm’s operations are supported by several key IT systems and applications. Complete or partial failure of the IT systems, applications or data centre infrastructure due to Information and unauthorised access, cyber attacks or
Slide 24: Key risks - Risks associated with the Entitlement Offer
Key risks (continued) For personal use only Risks associated with the Entitlement Offer Nufarm has entered into an underwriting agreement under which the underwriters have agreed to fully underwrite the Entitlement Offer, subject to the terms and conditions of the underwriting agreement between the
Slide 25: Key risks - Risks associated with the Entitlement Offer (continued)
Key risks (continued) For personal use only Risks associated with the Entitlement Offer (continued) If you are an eligible shareholder and you do not exercise your entitlements to new shares under the Entitlement Offer or sell your entitlements on ASX, there is no guarantee that you will receive any
Slide 26: Key risks - General risks
Key risks (continued) For personal use only General risks Investors should be aware that there are risks associated with any investment in a company listed on the ASX. The market price of Nufarm shares will fluctuate due to the financial and operating performance of Nufarm and various external facto
Slide 27: Key risks - General risks (continued)
Key risks (continued) For personal use only General risks (continued) Nufarm's balance sheet includes significant values for manufacturing and intangible assets. Nufarm is periodically required to assess the carrying value of its non-current assets. Where the recoverable amount of an asset is assess
Slide 28: Appendix B - Foreign selling restrictions
Appendix B For personal use only Foreign selling restrictions
Slide 29: Foreign selling restrictions
Foreign selling restrictions International Offer Restrictions This document does not constitute an offer of entitlements ("Entitlements") or new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any
Slide 30: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) Canada (continued) The Company as well as its directors and officers may be located outside Canada and, as a result, it may not be possible for purchasers to effect service of process within Canada upon the Company or For personal use only its directors or of
Slide 31: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) China The information in this document does not constitute a public offer of the Entitlements or the New Shares, whether by way of sale or subscription, in the People's Republic of China (excluding, for purposes For personal use only of this paragraph, Hong K
Slide 32: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong For personal use only Kong, nor has it been authorised by the Securities and F
Slide 33: Foreign selling restrictions (continued)
Foreign selling restrictions (continued) Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this document For personal use only shall not be deemed to constitute an offer to th
Slide 34: Foreign selling restrictions
Foreign selling restrictions (continued) For personal use only United Arab Emirates Neither this document nor the Entitlements and the New Shares have been approved, disapproved or passed on in any way by the Central Bank of the United Arab Emirates, the Emirates Securities and Commodities Authority
Slide 35: Thankyou
For personal use only Thankyou