Pgg Wrightson Limited · NZX:PGW
Pgg Wrightson — FY2010 Earnings Presentation
24 slides from Pgg Wrightson's earnings presentation, Aug 13, 2010
Slide 1: 2010 Annual Results
2010 Annual Results Heritage Hotel, Auckland 13 August 2010
Slide 2: Agenda
Agenda • Introduction and Overview – Sir John Anderson, Chairman • Strategy and Operational Review – Tim Miles, Managing Director • Financial overview and Outlook – Jason Dale, Group GM Transformation and Strategy 2
Slide 3: 2010 Annual Results
2010 Annual Results • A Foundation for Growth • Strategy • Operational Review • Financial Review • Outlook. 3
Slide 4: Building a foundation for growth
Building a foundation for growth Update since Investor Presentations November 2009 • In November 2009 PGG Wrightson came to investors with a focus on: o Raising substantial new capital o Having new significant investors in place o Change in Governance. • At 30 June 2010 we had: Restructured the ba
Slide 5: 2010 Annual Results
2010 Annual Results • A Foundation for Growth • Strategy • Operational Review • Financial Review • Outlook. 5
Slide 6: Strategy: business configured around two core groupings
Strategy: business configured around two core groupings AgriServices AgriTech (Customers & (IP & Growth) Distribution) • Price relative to value proposition • Limited ability to price differentiate • Wholesale distributor • End customer distributor • High quality • High quality service and products
Slide 7: Strategic direction in summary
Strategic direction in summary • Reallocation of resources to businesses where most customer and shareholder value is created • This will underpin enhanced group profitability and long term sustainability, to the benefit of its Clients/customers, staff and shareholders • AgriServices : high level op
Slide 8: Supporting the strategy
Supporting the strategy • Key management changes to support strategic direction: • John McKenzie: appointed in June as Group GM, AgriTech. John is the former PGW Group GM Seed, Grain and Nutrition and is the founder of specialist proprietary forage seed company Agricom Ltd • Michael Thomas: appointe
Slide 9: 2010 Annual Results
2010 Annual Results • A foundation for Growth • Strategy • Operational Review • Financial Review • Outlook. 9
Slide 10: Annual Results
Annual Results Year on year comparison GROUP 2010 2009 Variance $m’s $m’s % Revenue 1,151.1 1,280.4 (10.1) EBITDA 70.5 81.1 (13.1) Underlying net profit after tax 25.3 (66.4) Net buildings depreciation 2.0 nil and company tax impact Reported net profit after tax 23.3 (66.4) 10
Slide 11: AgriTech Seeds and Grain (not including South America)
AgriTech Seeds and Grain (not including South America) June 2010 June 2009 June 2008 $m’s $m’s $m’s Revenue 254.6 240.3 234.2 EBITDA 33.6 31.7 30.6 • Excellent performance given trading conditions • New Zealand: o widespread adoption of key endophyte Technology AR37 o Rolleston distribution centre b
Slide 12: AgriTech Agrifeeds
AgriTech Agrifeeds June 2010 June 2009 June 2008 $m’s $m’s $m’s Revenue 43.6 72.6 57.3 EBITDA 5.2 9.8 3.8 • Challenge of an excellent growing season which saw reduced need for supplementary feed • Poor early dairy payout impacted cash flow for first six months, with pressure on early season volumes
Slide 13: AgriTech South America
AgriTech South America (excluding corporate costs South America) June 2010 June 2009 June 2008 NZ$m’s NZ$m’s NZ$m’s Revenue 84.1 76.0 49.9 EBITDA 5.5 6.2 4.4 • Successful year of commencing seed business in Brazil, with registration of seed cultivars • 8% improvement in local currency trading result
Slide 14: AgriServices Merchandising
AgriServices Merchandising June 2010 June 2009 June 2008 $m’s $m’s $m’s Revenue 541.7 668.1 614.7 EBITDA 22.2 26.1 26.3 o Performance reflects tentative spending by farmers and grower clients given liquidity environment o Fruitfed maintained or grew share in key markets such as vegetables, though vi
Slide 15: AgriServices Livestock
AgriServices Livestock June 2010 June 2009 June 2008 $m’s $m’s $m’s Revenue 87.4 76.0 78.8 EBITDA 12.6 12.7 16.7 o Unusual market conditions with excellent pastoral production in first six months allowing farmers to hold stock, followed by six months of drought and heavy rain conditions o Annual NZ
Slide 16: AgriServices Finance
AgriServices Finance June 2010 June 2009 June 2008 $m’s $m’s $m’s Revenue 59.7 59.8 53.0 EBITDA 13.3 10.9 9.2 o Strong financial result in current climate o Achieved a first time BB(stable) credit rating from Standard & Poors o Received a substantial refund of Crown Guarantee fees based on credit ra
Slide 17: AgriServices Comments on other Operating Units
AgriServices Comments on other Operating Units oReal Estate – 28% decline in net units sold from 2009 though continued to hold leading position in rural property. Continued strong focus on cost reduction oI & P – difficult year on back of reduced dairy payout, flat lifestyle market and stagnant bank
Slide 18: 2010 Annual Results
2010 Annual Results • A Foundation for Growth • Strategy • Operational Review • Financial Review • Outlook. 18
Slide 19: Financial Review: Comparative to Prospective Financial Information
Financial Review Comparative to Prospective Financial Information (PFI) GROUP Actual PFI Variance 2009 $m’s $m’s $m’s $m’s Revenue 1,151.1 1,107.7 43.4 1,280.4 EBITDA 70.5 73.4 (2.9) 81.1 Adjusted net profit 25.3 24.1 1.2 (66.4) after tax¹ Net profit after tax 23.3 24.1 (0.8) (66.4) Net Debt (exclud
Slide 20: Financial Review: Comparative year on year performance
Financial Review Comparative year on year performance GROUP June 2010 June 2009 Variance $m’s $m’s % Revenue 1,151.1 1,280.5 (10.1) EBITDA 70.5 81.1 (13.1) Segmental EBITDA AgriServices 34.9 42.1 (17.1) AgriTech 42.4 44.9 (5.6) 77.3 87.0 (11.1) 20
Slide 21: Financial Review: Operating Cash Flow
Financial Review Operating Cash Flow GROUP 2010 2009 $m’s $m’s Receipts from customers 1,144.5 1,269.1 Dividends received 0.5 0.7 Interest received 69.9 59.6 Cash In 1,214.9 1,329.4 Payments to suppliers & employees (1,083.6) (1,250.7) Interest paid (76.3) (62.1) Income tax paid (11.7) (4.4) Cash Ou
Slide 22: Financial Review: Balance Sheet
Financial Review Balance Sheet GROUP 2010 2009 $m’s $m’s Current assets 485.2 467.3 Non-current assets 511.6 512.7 Finance receivables 530.1 564.1 Total assets 1,526.9 1,544.1 Current liabilities (251.6) (704.5) Non-current liabilities (221.7) (21.1) Finance liabilities (418.1) (427.6) Total liabili
Slide 23: Outlook
Outlook • Expectation of a trading performance to be largely in line with the prior financial year with some upside potential, particularly in light of international economic trends • At NPAT level, taking into account reduced interest costs, we expect an improved performance.
Slide 24: Thank you & Questions
24 Thank you & Questions —=—__"_- PGG Wrightson Leaders in the field — helping grow the country