Wynnstay Group plc · LSE:WYN
Wynnstay — FY2020 Earnings Presentation
28 slides from Wynnstay's earnings presentation, Jan 27, 2021
Slide 1: Final Results Presentation, Year to 31 October 2020
Wynnstay Group plc Final Results Presentation Year to 31 October 2020 27 January 2021
Slide 2: Disclaimer
Disclaimer This presentation (hereinafter “this document”) has been prepared by Wynnstay Group plc (the “Company“) for information purposes only. This document has been prepared in good faith but the information contained in it has not been independently verified and does not purport to be comprehen
Slide 3: Business Overview
Business Overview Agriculture – Specialist Agricultural Merchanting – Routes to Market 70% of total revenues 30% of total revenues Wynnstay Feed Depots • Manufacture and supply of feeds for farm livestock • Supply of raw feed materials for farmers and other manufacturers Wynnstay Depots • Network of
Slide 4: Geographic Reach
Geographic Reach 54 Wynnstay Depots 3 Youngs Animal Feeds 4
Slide 5: Operational Highlights
Operational Highlights An unprecedented year Resilient financial Underlying PBT of challenges results up 4% to £8.37m - coronavirus crisis supported by: - ahead market - Brexit uncertainties - balanced model expectations - historic low arable sector - robust balance sheet Major reorganisation Major
Slide 6: FY 2020 Financial Key Points
FY 2020 Financial Key Points • Revenue decreased to £431.40m (2019: £490.60m) − reflected commodity price deflation and lower trading volumes in certain bulk categories, especially grain, feed raw material commodities, and fertiliser • Underlying pre-tax profit up 4% to £8.37m (2019: £8.01m) − helpe
Slide 7: Financial Track Record
Financial Track Record Continuing Operations Revenue (£m) Gross profit (£m) 462.7 490.6 260.6 61.7 62.0 431.4 60.8 390.7 218.5 229.3 52.9 353.7 198.1 50.3 186.0 NEED NUMBERS 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2016 2017 2018 2019 2020 Underlying* profit before tax (£m) EPS (p) 9.6 33.2
Slide 8: Dividend Record
Dividend Record 17 years of increased dividends 14.60 14.00 Total dividend: 12.60 13.36 12.00 14.60p per share 11.10 (2019: 14.00p per share) 10.20 9.30 8.50 +4.3% y.o.y 7.10 7.80 6.50 6.00 5.25 5.47 5.00 4.50 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 8
Slide 9: Income Statement
Income Statement Year ended Year ended £000 31 October 2020 31 October 2019 Revenue 431,398 490,602 Cost of sales (370,630) (428,621) Gross profit 60,768 61,981 Net expenses (52,627) (54,226) Adjusted operating profit 8,141 7,755 Gross JV contributions 538 463 Net finance charges (272) (184) Amortis
Slide 10: Balance Sheet
Balance Sheet £000 Year ended 31 October 2020 Year ended 31 October 2019 NON-CURRENT ASSETS Goodwill 14,367 14,968 Investment property 2,372 2,372 Property, plant and equipment 17,545 23,225 Right of use asset 11,240 - Investments 3,611 3,175 Intangibles 225 261 49,360 44,001 CURRENT ASSETS Inventor
Slide 11: Net Cash Reconciliation
Net Cash Reconciliation £000 Year ended Year ended 31 October 2020 31 October 2019 EBITDA before non-recurring items 14,147 11,242 Adjustment for pre-tax joint ventures (538) (463) Working capital movements – balance sheet 6,763 3,977 Cash generated from operations – as reported 20,372 14,756 Net fi
Slide 12: Cash/(Net Debt) Cycle
Cash/(Net Debt) Cycle £m 14.7 excluding ROU leases Net cash of £14.71m* (31 Oct 2019: £3.84m) 2.8 4.3 4.5 3.8 8.4 including 2.1 ROU leases *Excluding ROU leases (1.0) (2.6) excluding ROU leases (3.9) (6.9) (8.1) (8.3) (9.0) including ROU (10.9) leases (14.7) 12
Slide 13: Segmental Contribution
Segmental Contribution 2020 Underlying* pre-tax profit: £8.37m – up 4% £128.81m £5.78m £2.88m Revenue segment segment contribution contribution £431.40m £302.58m Specialist Agricultural Agriculture Merchanting Division Division 2019 £131.84m Underlying* pre-tax profit: £8.01m £5.24m £2.95m Revenue s
Slide 14: Agriculture Division
AGRICULTURE DIVISION Feed, Arable and Glasson activities Revenue, £302.58m (2019: £358.69m), and contribution, £2.88m (2019: £2.95m) 14
Slide 15: Feed
Feed • Improved gross margins helped by production efficiencies − Total manufactured feed volumes in line with last year 6th largest UK feed producer* − Demand for compound dairy feed was consistent y.o.y − H2 was stronger than H1 (which was affected by good on-farm Bagged feeds and forage stock and
Slide 16: Arable
Arable • Very challenging year – abnormally wet weather drastically affected winter crop planting and dry spring affected yields. Resulted in: 3rd largest UK cereal − lower crop acreage for inputs including fertiliser seed processor* − reduced grain to trade (yield from 2020 UK wheat harvest was 37.
Slide 17: Glasson
Glasson • Solid performance in line with management expectations although lower than record prior year - fertiliser blending operations sold record volumes however margins came under pressure because of poor winter crop planting. Prices recovered in H2 − feed raw materials experienced lower demand,
Slide 18: Specialist Agricultural Merchanting Division
SPECIALIST AGRICULTURAL MERCHANTING DIVISION Wynnstay Depots and Youngs Animal Feeds Revenues, £128.81m (2019: £131.84m) and contribution, £5.78m (2019: £5.24m) 18
Slide 19: Specialist Agricultural Merchanting
Specialist Agricultural Merchanting Estimated Market Share* • Silage sheets 16% • Profit contribution up 10% y.o.y on total revenue down 2%. LfL • Animal health products 12% revenue was down 1% • Dairy hygiene 11% • Fencing wire 10% − Initial coronavirus ‘order and collect’ measure and wet/mild wint
Slide 20: The Future and Outlook for FY 2021
THE FUTURE AND OUTLOOK FOR FY 2021 20
Slide 21: Brexit and UK Agricultural Bill
Brexit and UK Agricultural Bill • 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 Bill reshapes financial support to the sec
Slide 22: Growth Strategy
Growth Strategy PILLARS Expert guidance | Organic growth | Multi-channel | Acquisitions | ESG • Management reorganised to support growth plans • Position Wynnstay as ‘trusted advisor’ – teams of specialists across all sectors - farmers door into innovation – products and services • Expand manufactur
Slide 23: Summary and Outlook
Summary and Outlook GROUP STRENGTHS • Clear direction of travel for the agricultural sector • Very experienced management • High degree of specialist knowledge • Farmgate prices strengthened towards the end of 2020 • Balanced business model • Clear growth strategy • Farmer sentiment much improved •
Slide 24: Supplementary Information
SUPPLEMENTARY INFORMATION − ESG − Acquisitions − Market trends 24
Slide 25: Focus on ESG
Focus on ESG • Values − trusted adviser to farmers, supporting transition to sustainable farming methods and enhanced environment care • Incorporating ESG factors − sustainable supply chain − feed raw materials – soya − evolving products and production − methane reduction, recyclable products, plast
Slide 26: Acquisitions: 2010-2021
Acquisitions: 2010-2021 UK 26
Slide 27: Market Trends: Production & Consumption
Market Trends World wheat stocks1 Feed wheat – UK (£ per tonne)2 900 350 £210 Production & Consumption 800 300 £190 700 £170 Ending Stocks 250 600 (M Tons) (M Tons) 500 200 £150 400 150 £130 300 £110 100 200 50 £90 100 £70 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 £50 Production Domesti
Slide 28: Market Trends
200 210 220 230 240 250 260 270 280 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Feed price (£ per tonne)2 Mar-19 May-19 Jul-19 Sep-19 0 10 20 30 40 50 60 70 80 90 Nov-19 Nov-17 Jan-20 Market Trends Mar-20 Feb-18 May-20 May-18 Jul-20 Sep-20 Aug-18 Nov-20 Nov-18 Jan-21 Feb-19 Monthly oil price ($