Wynnstay Group Plc · LSE:WYN
Wynnstay — FY2022 Earnings Presentation
25 slides from Wynnstay's earnings presentation, Oct 31, 2022
Slide 1: Final Results, Year ended 31 October 2022
Vv WYNNSTAY | Supporting Sustainable Agriculture FINAL RESULTS Year ended 31 October 2022 Gareth Davies Paul Roberts Chief Executive Officer | Finance Director
Slide 2: Record results, strong balance sheet
2 • Record results ― strong trading performance, helped by favourable trading environment – strong/firm farmgate prices across most sectors Record results o outperformance by grain trading operation, GrainLink o Joint Venture also contributed above management expectations ― significant one-off gains
Slide 3: PBT, net assets and dividend highlights
3 • Revenue up 42% to £713.03m (2021: £500.39m) ― commodity price inflation - c.£180m ― Humphrey acquisition - £31.58m (8-month contribution in line with expectations at the PBT* time of acquisition) +98% • Underlying Group PBT* (incl. one-off gains) up 98% to £22.61m (2021: £11.44m) • One-off gains
Slide 4: Revenue, gross profit, PBT and EPS five-year charts
4 Continuing operations 713.0 90.8 67.9 462.7 490.6 500.4 61.7 62.0 60.8 431.4 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 22.6 82.72 11.4 44.4 9.6 8.4 39.1 8.0 33.2* 31.0 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 *Before exceptional items of 5.4p
Slide 5: Income statement
5 Year ended Year ended £000 31 October 2022 31 October 2021 Revenue 713,034 500,386 • Revenue includes Cost of sales (622,228) (432,493) estimated £180m of Gross profit 90,806 67,893 commodity inflation Net expenses (68,358) (56,807) • Gross profit up 33% Adjusted operating profit 22,448 11,086 inc
Slide 6: Balance sheet
6 £000 Year ended 31 October 2022 Year ended 31 October 2021 NON-CURRENT ASSETS Goodwill 16,133 14,322 • Reflects Humphrey acquisition Investment property 1,850 2,372 Property, plant and equipment 20,840 16,746 • Increased working capital Right of use asset 8,202 11,043 elements of c.£16m reflects I
Slide 7: Cash flow
7 Year ended Year ended £000 31 October 2022 31 October 2021 Cash generated from operations 13,839 10,577 • Cash generated after Interest received – cash 166 193 funding additional working Interest paid – cash (399) (102) Settlement of provision - (96) capital requirements Tax paid (3,342) (1,462) •
Slide 8: Cash conversion and net cash movement
8 Year ended Year ended £000 31 October 2022 31 October 2021 • Profits readily convert to EBITDA before non-recurring items 28,310 18,214 cash – EBITDA £28m Adjustment for pre-tax joint ventures (808) (677) Working capital movements – balance sheet (13,663) (6,960) • Net cash on covenant basis incre
Slide 9: Net cash bridge
9 2,252 (3,342) 13,839 233 (5,045) (10,234) 11,040 56 14,150 9,243 (87) (3,339) Opening net Cash Net cash JV loan Tax paid Net capital Acquisitions Other Dividends Issue of new Effects of Closing net cash generated finance repayments expenditure including proceeds / paid equity exchange cash from ch
Slide 10: Net cash at October 2022 and cash positions
10 18.2** Net cash at 31 Oct 2022 Cash positions at H1 & FY period ends 15.5** £m 14.7** *net cash including property 14.15* leases (accounting debt): 7.6 9.2* 6.5 6.2 £14.15m (31 Oct 2021: 4.0 8.4* £9.24m) 1.7 0.8** **net cash excluding property -1.6 -2.6** -12.8** leases (bank defined debt): -4.6
Slide 11: Revenue and PBT by division
11 2022 £148.77m Underlying Group PBT: £22.61m – up 98% Revenue £713.03m +42% £14.66m £7.95m £564.26m 2021 £141.43m Underlying Group PBT: £11.44m Agriculture Division Revenue Specialist Agricultural £500.39m Merchanting Division £7.15m £4.22m £358.96m
Slide 12: Market prices and input costs
12 End-Oct End-Oct YoY 2022 2021 Change Feed wheat/tonne £256 £196 +31% – Grain prices strong throughout 2022, but have Feed barley/tonne £238 £184 +29% started to weaken due to large supply Oilseed rape/tonne £536 £532 0.8% – Milk prices strengthened during the second half of Milk/per litre 49p 31.
Slide 13: Step-change in share of free-range poultry feed
13 • Total like-for-like feed volumes up 6% – outperformed national trend Step-change in share of ― H2 demand boosted by dry summer (less grass and forage available) free-range poultry feed ― dairy volumes up 6.9% , sheep up 5%, poultry up 1.7% - all key target sectors ― contribution slightly lower
Slide 14: Excellent arable performance
14 • Record volumes at grain-marketing unit, GrainLink, up 31% ― reflected good harvest yields from 2021 and 2022, and increased market share in Excellent arable performance East of England (following previous investment) • Very strong contribution from merchanted fertiliser sales - significantly hi
Slide 15: Glasson record results
15 • Record result, driven by exceptional one-off gains from fertiliser blending activity Record results ― substantial stock gain driven by disrupted UK and global market o soaring natural gas prices o trade sanctions on Russia o contraction of UK fertiliser production by manufacturers • Specialist
Slide 16: Depots outperformed
16 • Specialist Agricultural Merchanting Division performed well ahead of management expectations ― operating profit contribution up 11%, driven by strong sales of higher-margin products, Depots outperformed especially own-brand bagged feed • Like-for-like depot sales up 5% ― long, dry summer affect
Slide 17: Sustainability and ESG progress
17 • Sustainable Farm Advisory Team established ― industry experts assisting on Group’s ESG strategy and delivery • Financial Stability Board’s Task Force on Climate-related Financial Disclosures (“TCFD”) ― adoption of TCFD recommendations; full report in 2023 Annual Report • Extensive carbon reduct
Slide 18: Outlook and Group strengths
18 • Excellent Group performance, with results boosted by one-off gains GROUP STRENGTHS • Strong balance sheet enabled further investment in Group’s strategic plan and productivity improvements • Very experienced management • High degree of specialist knowledge • Ongoing investment across Group • Ba
Slide 19: Supplementary Information
FINAL RESULTS | 2022 | ssesonssntsesssstsntnttnsnsnsntnetntssnintnetstsnintntnsnissninnsessnseinnseisnsninnsennnisnintnensnnsninnessniinseseauensese 19 Vif WYNNSTAY Supplementary Information * Presentation Team - Business Overview * Geographic Reach ¢ Acquisitions * Market Trends
Slide 20: Presentation team
20 • 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 • Appointed to the Board as Finance Director in 1997 • Joined the Group in 1987 • Previousl
Slide 21: Business overview and routes to market
21 Helping Farmers to Feed the UK in a More Sustainable Way Comprehensive range of agricultural products, supported by expert advice Agriculture Specialist Agricultural Merchanting Glasson Youngs Animal Feeds Feed Arable Wynnstay Depots • Trades feed raw • Manufacture and • Manufacture and supply •
Slide 22: Geographic reach: manufacturing sites, depots, employees
22 12 manufacturing sites 53 depots c.110 vehicles c.970 employees
Slide 23: Acquisitions
23 DATE ACQUISTION BUSINESS TYPE ARABLE FEEDS DEPOTS Nov 2022 Tamar Milling Limited Feed manufacturer & supplier ✓ Mar 2022 Humphrey Feeds and Pullets Ltd Poultry feed manufacturer and supplier ✓ Fertiliser manufacturing business Mar 2021 & assets (“HGBF”) of HELM Great Britain Ltd Blended-fertilise
Slide 24: Market trends sources
24 Sources: 1 AHDB, Defra, RESAS, DAERA, AHDB, 3 Defra, AHDB, Andersons
Slide 25: Market trends sources
25 Sources: 1 The Ranger, 2 Andersons, 3 Defra, ONS, 4 USDA