Nufarm Limited · ASX:NUF
Nufarm — FY2022 Earnings Presentation
43 slides from Nufarm's earnings presentation, Nov 16, 2022
Slide 1: Nufarm FY22 Results
Nufarm FY22 Results 16 November 2022
Slide 2: FY22 Results Overview
FY22 FY22Results ResultsOverview Overview CEO, Greg Hunt
Slide 3: Disclaimer
Disclaimer General This presentation has been prepared by Nufarm Limited. The information contained in this presentation is for informational purposes only as at the date of this presentation on 16 November 2022. The information contained in this presentation is not investment or financial product a
Slide 4: Record revenue and earnings
Record revenue and earnings1 Revenue $3.8b, up 17% Revenue growth despite uNPAT $133m, up 118% global challenges Successfully navigating a challenging macro environment - Revenue and earnings growth across all geographies uEBITDA $447m, up 24% Despite global supply chain challenges, excellent workin
Slide 5: Technology and innovation to drive growth
Technology and innovation to drive growth Macro trends and industry fundamentals support revenue aspirations Poised for growth in FY23 Exciting progress across all growth initiatives - Crop protection & seeds Substantial progress - Bioenergy advancing long-term growth - Omega-3 agenda Unique synergi
Slide 6: Operational and Financial performance
Operational and Financial performance Revenue uEBITDA uNPAT $3.8b $447m $133m Up 17% Up 24% Up 118% aNWC/Sales Net debt: Total dividends uEBITDA 28% 0.8x 10cps Improved 6%pts Below target Final dividend of range 6cps 6 All comparisons to 12months ended 30 September 2021 unless otherwise stated
Slide 7: Operational performance
Operational Operationalperformance Performance CEO, Greg Hunt
Slide 8: Revenue growth across all operating segments
Revenue growth across all operating segments Revenue $3.8b uEBITDA $447m up 17% up 24% A$’m A$’m • Favourable seasonal conditions resulted in strong demand • Strategic and performance improvement initiatives continue to across all segments deliver increased efficiencies and positive financial outcom
Slide 9: North America (USD)
North America (USD) Investments and customer focus support consistent growth FY22 OVERVIEW 3 YEAR FINANCIAL PERFORMANCE US$’m Table N.Am revenue up 16% vs pcp heading N.Am uEBITDA up 35% vs pcp • Strong early season demand was followed by dry conditions in the Table sub-heading southern and western
Slide 10: Europe (EUR)
Europe (EUR) Portfolio investments and organic growth driving revenues FY22 OVERVIEW 3 YEAR FINANCIAL PERFORMANCE €’m • Revenue improvement due to targeted campaigns in key countries Europe revenue up 15%Table vs pcp heading Europe uEBITDA up 2% vs pcp Table sub-heading • Reliable supply despite pro
Slide 11: APAC (AUD)
APAC (AUD) Portfolio and performance improvement initiatives support earnings growth FY22 OVERVIEW 3 YEAR FINANCIAL PERFORMANCE A$’m • Increased raw material and freight costs were reflected in higher APAC revenue up 21% vs pcp APAC uEBITDA up 21% vs pcp Table sub-heading prices also contributing to
Slide 12: Seed Technologies (AUD)
Seed Technologies (AUD) Each platform generating growth FY22 OVERVIEW 3 YEAR FINANCIAL PERFORMANCE A$’m Core seeds Seed Tech revenue up 23% vs Seed Tech uEBITDA up 26% vs pcp • Strong demand for hybrid canola, sunflower and sorghum in multiple pcp markets Omega-3 Canola • ~16.5k MT of oil delivered
Slide 13: Financial Performance
Financial Performance CFO, Paul Townsend
Slide 14: Result highlights
Result highlights Results Summary FY22 FY21 Change A$m Reported Reported Revenue 3,773 3,216 Up 17% uEBITDA 447 361 Up 24% uEBIT 237 153 Up 55% Underlying net external interest (52) (58) Improved 12% Underlying effective tax rate 26.9% 33.5% Improved 6.6% pts uNPAT 133 61 Up 118% Statutory net profi
Slide 15: Prudent expense management supporting growth agenda
Prudent expense management supporting growth agenda Key underlying SG&A1 movements • Growth SG&A increased with an increase in FTE to support growth initiatives and expenses across AUD$’m Crop Protection and Seed Technologies • Increased supply chain related rates and selling costs • Staff costs inc
Slide 16: Positive free cash flow post dividends and growth investments
Positive free cash flow post dividends and growth investments Free cash flow bridge AUD$’m • Operating cash flow generation is highly correlated with changes in Net Working Capital and underlying EBITDA • Free cash flow has been applied to dividends to shareholders and growth investments including E
Slide 17: Excellent working capital outcome
Excellent working capital outcome Net working capital Net working capital & aNWC/sales • Increase in inventory driven principally by price • Strong focus on net working capital levers resulting in increases in active ingredients costs excellent outcome • Improved payable days and strong collections
Slide 18: Diligent CAPEX management to support growth
Diligent CAPEX management to support growth Capital expenditure summary CAPEX allocation type Investments Growth Intangibles Maintenance and some growth PPE Primarily maintenance • Investment CAPEX includes increased investment in Enko & Crop.Zone, investment in Biovertis for energy cane assets and
Slide 19: Strong balance sheet provides optionality for growth and capital management
Strong balance sheet provides optionality for growth and capital management Net debt, leverage & liquidity Summary debt profile A$’m 30-Sep-22 30-Sep-21 Bank loans – secured 240 228 Bank loans – unsecured 15 9 Senior unsecured notes 538 659 Deferred debt establishment costs (12) (8) Lease liabilitie
Slide 20: Revenue aspirations – crop protection
Revenue aspirations – crop protection Group Executive Portfolio Solutions Rico Christensen
Slide 21: Pipeline delivers across multiple years, crops, products and regions
Pipeline delivers across multiple years, crops, products and regions Regions Crops Project Stage Evolution Estimated Global Anticipated Market Region Launch Year/ Cereal Corn Soy TNVV Pasture Business Development Dossier Registration & Launch & Value APAC NA EUMEA Crops Project Case Proof of Concept
Slide 22: Crop protection – clear pipeline to growth
Crop protection – clear pipeline to growth Our top 22 projects in the pipeline have all passed proof of concept with an addressable market of over US$6 billion NUFARM’S TOP 22 PIPELINE PROJECTS $68.0B $6.6B $6.6B Targeted Total Addressable Market Herbicides ($USD FY25) $2.7B $61.4B $6.6B Fungicides
Slide 23: Crop Protection
Crop Protection On track to meet or exceed FY26 revenue aspiration Crop Protection Crop Protection FY22 highlights Revenue aspirations ✓ Achieved above market growth ✓ Top 22 projects in the pipeline have passed proof of concept with an ✓ Increased investment in Enko addressable market of over US$6
Slide 24: Revenue aspirations – seed technologies
Revenue aspirations – seed technologies Group Executive Nuseed Brent Zacharias
Slide 25: Seed Technologies - Seeds
Seed Technologies - Seeds On track to meet or exceed FY26 revenue aspiration Seeds Seeds FY22 highlights Revenue aspirations Canola Canola ✓ Strong demand for Nuseed hybrid canola in ✓ Expansion of hybrid technology in Australia Australia, South America and Canada ✓ Leveraging pipeline for expansion
Slide 26: Seed Technologies – Omega-3
Seed Technologies – Omega-3 On track to meet or exceed FY26 revenue aspiration Omega-3 Omega-3 FY22 highlights Revenue aspirations Aquaterra® Aquaterra® ✓ Achieved further share growth with core customer base in Chile ✓ Focus on technology adoption rate with salmon industry ✓ Customer and geographic
Slide 27: Seed Technologies – Bioenergy
Seed Technologies – Bioenergy On track to meet or exceed FY26 revenue aspiration Bioenergy Bioenergy FY22 highlights Revenue aspirations Nuseed Carinata Nuseed Carinata ✓ bp offtake & market development agreement ✓ Focus on rapid market expansion at farm gate to supply bp off-take agreement ✓ Growth
Slide 28: Outlook
Outlook CEO, Greg Hunt
Slide 29: Macro trends support our FY26 revenue aspirations
Macro trends support our FY26 revenue aspirations Crop • Achieving above market growth Protection (global market expected to grow at 2.3%*) • Existing pipeline + New Product Introductions + winning share = On track to meet or exceed FY26 above market growth revenue aspirations through increased Reve
Slide 30: Summary and outlook
Summary and outlook1 • Assuming normal seasonal conditions and on a constant currency2 basis, planning for modest underlying EBITDA growth in FY23 FY23 uEBITDA • Full year earnings expected to be weighted to 1H23, however, less skewed than FY22 • Improved seasonal conditions in key grain producing r
Slide 31: Summary and outlook (cont'd)
Summary and outlook (cont’d) 1 Crop protection and seeds • New product launches for FY23 are on track • Continued high prices are expected to drive strong demand for canola, sunflower and sorghum seed Omega-3 • Aquaterra: 16.5k MT oil produced and shipped to customers since commercial launch. Aim to
Slide 32: Nufarm focused on growth
Agriculture ‘mega trends’ support growth of crop protection, seeds and Beyond Yield seed technologies Nufarm focused on growth Nufarm is well placed to capture these opportunities and has repositioned the business for growth On track to meet or exceed FY26 revenue aspirations Balance sheet strength
Slide 33: Q&A
Q&A
Slide 34: Appendices
Appendices
Slide 35: Appendix 1: Non-IFRS disclosures and definitions
Appendix 1: Non-IFRS disclosures and definitions1 Term Definition Gross profit margin Gross profit as a percentage of revenue Underlying gross profit Gross profit less material items Underlying gross profit margin Underlying gross profit as a percentage of revenue Underlying SG&A Sales, marketing an
Slide 36: Appendix 2: Segment uEBITDA performance
Appendix 2: Segment uEBITDA performance Underlying EBITDA by segment (AUD) FY22 FY21 % Improvement North America $148m $104m p 42% APAC $135m $112m p 21% Europe $171m $172m q -% Seed Technologies - Global $59m $46m p 26% Corporate ($65m) ($73m) p 10% Nufarm Group uEBITDA $447m $361m p 24% Underlying
Slide 37: Appendix 3: Financial Summary
Appendix 3: Financial Summary 12 months ending 30 Sep 2022 12 months ending 30 Sep 2021 Underlying Material items Total Underlying Material items Total $000 $000 $000 $000 $000 $000 Revenue 3,772,970 - 3,772,970 3,215,651 - 3,215,651 Cost of sales (2,784,107) (16,278) (2,800,385) (2,380,946) - (2,38
Slide 38: Appendix 4: Material items
Appendix 4: Material items Consolidated Consolidated 2022 2022 2021 2021 $000 $000 $000 $000 pre-tax after-tax pre-tax after-tax Material items by category: Transactions related to Russia and Ukraine (29,454) (28,191) - - Debt refinancing costs (25,772) (18,767) - - Transactions related to South Ame
Slide 39: Appendix 4 continued: Material items
Appendix 4 continued: Material items Consolidated Consolidated 2022 2022 2021 2021 $000 $000 $000 $000 pre-tax after-tax pre-tax after-tax Material items by category: Transactions related to Russia and Ukraine (29,454) (28,191) - - Debt refinancing costs (25,772) (18,767) - - Transactions related to
Slide 40: Appendix 5: Cash flow
Appendix 5: Cash flow Material items impacting cash flows are as follows: 2022 Material Total Underlying items group $000 $000 $000 Cash flows from operating activities Net operating cash flows 366,120 (6,551) 359,569 Cash flows from investing activities Net investing cash flows (240,409) - (240,409
Slide 41: Appendix 6: Segment Information and reconciliation
Appendix 6: Segment Information and reconciliation Revenue - Underlying 12 months 12 months ended ended Movement ($000s) Sep-22 Sep-21 FY22 v FY21 Crop protection APAC 1,038,424 858,407 180,017 North America 1,350,190 1,112,423 237,767 Europe 894,931 806,485 88,446 Total Crop protection 3,283,545 2,
Slide 42: Appendix 7: Constant currency results
Appendix 7: Constant currency results 12 months ended Sep 2022 Sep 2022 Sep 2021 Constant Reported Constant Reported currency 1 % A$ million currency Revenue 3,773.0 3,750.1 3,215.7 17% Underlying EBITDA 446.8 446.6 361.1 24% Underlying EBIT 236.7 233.6 153.1 53% Average exchange rates FY22 v FY21 A
Slide 43: Appendix 8: Capital Management Principles
Appendix 8: Capital Management Principles Maintaining discipline while retaining flexibility Capital Management Framework Sustained financial resilience throughout operating cycles to support growth and optimise returns to shareholders Principle Optimising financial Maintaining financial Optimising