Nufarm Limited · ASX:NUF
Nufarm — Macquarie 12th Annual Australian Conference (May 2011)
20 slides from Nufarm's conference presentation, May 5, 2011
Slide 1: Macquarie 12th Annual Australian Conference
For personal use only Macquarie 12th Annual Australian Conference Sydney Doug Rathbone Chief Executive Officer May, 2011
Slide 2: The broader picture
For personal use only The broader picture…. Agriculture remains a strong growth industry Declining stock-to-use ratios Rising crop prices Increased use of biofuels Declining availability of arable land Growing global population Urbanisation and increased wealth Emerging agricultural ma
Slide 3: Optimising inputs is key to maximising YIELD
For personal use only Optimising inputs is key to maximising YIELD Chemistry: Protecting the seed/crop and securing increased efficiencies; efficacy; and safety Seeds: Both conventional and GM breeding programs leading to a step-wise increase in a farmer's investment in seed 3
Slide 4: Key trends and changes impacting the crop protection industry
For personal use only Some key trends and changes impacting the crop protection industry.... ► More chemistry moving to post-patent status − 75% of industry sales (by value) are post-patent ► Closer integration of seeds/traits and chemistry − Majors realign research emphasis into traits ► Material v
Slide 5: Nufarm is responding to these changes
For personal use only Nufarm is responding to these changes…. Nufarm will leverage → Increased generic competition proven skills around → Opportunity for China to forward sourcing; cost- More post-patent integrate competitive production; chemistry → Need to address post-patent regulatory affairs and
Slide 6: More chemistry moves to post patent position
More chemistry moves to post patent position For personal use only Nufarm's market driven innovation…. Product delivery New formulations Mixtures Packaging systems Post emergent corn herbicide Unique combination of bromoxynil and terbuthylazine Proprietary formulation Combined fungicide +
Slide 7: Nufarm is responding to these changes
Nufarm is responding to these changes…. For personal use only Nufarm will leverage proven skills → Increased generic competition around sourcing; cost-competitive More post-patent chemistry → Opportunity for China to forward integrate production; regulatory affairs and → Need to address post-patent
Slide 8: Integration of seeds/traits and chemistry: core crops
Integration of seeds/traits and chemistry For personal use only Our core crops Nufarm has established…. Strong breeding and marketing positions in core crops High quality germplasm, with a strong pipeline Canola of new varieties Both GM and conventional trait positions RR canola 'Monola' Premi
Slide 9: Multiplying the value of Nufarm inputs
Integration of seeds/traits and chemistry For personal use only Multiplying the value Nufarm inputs…. 'Roundup Ready' canola – Australia* Seed + Trait + Seed treatment + 'Roundup Ready' herbicide *Nufarm expects to maintain market share of approximately 50% 9
Slide 10: 2011 Interim results - Seeds and seed treatment
Integration of seeds/traits and chemistry For personal use only 2011 Interim results - Seeds and seed treatment High cotton/corn prices soften demand for standard grain sorghum in Americas Strong demand for specialty sorghum hybrids BMR trait and food grade milling trait Chinese demand for eli
Slide 11: Nufarm is responding to these changes
Nufarm is responding to these changes…. For personal use only Nufarm will leverage proven skills → Increased generic competition around sourcing; cost-competitive More post-patent chemistry → Opportunity for China to forward integrate production; regulatory affairs and → Need to address post-patent
Slide 12: Value shift in glyphosate
Value shift in glyphosate For personal use only Value shift in glyphosate (cost of glyphosate intermediate ex China) Nufarm purchases high 14.00 cost inventory 12.00 10.00 Supply tightness leads to Over capacity issues lead to USD per kg FOB Shanghai higher tech and finished dramatic price reduction
Slide 13: Nufarm is rebalancing the portfolio
Value shift in glyphosate For personal use only Nufarm is rebalancing the portfolio 2008 2011 Other herbicides (actual) (forecast) Insecticides Glyphosate Glyphosate 40% 20-25% Other Other Fungicides Products Products 60% 75-80% Seed treatments % total revenues % total revenues Focus on higher value
Slide 14: Progress is being made: portfolio balance
Value shift in glyphosate For personal use only Progress is being made….. 2011 Interim Results: Portfolio balance Glyphosate sales down 28% half on half Other herbicide sales up 16% Fungicide sales up 26% Insecticide sales up 15% Seeds / seed treatments up 86% 14
Slide 15: A more diversified portfolio with growth into higher value segments
Value shift in glyphosate A more diversified portfolio with growth For personal use only into higher value product segments Glyphosate Other herbicides Insecticides Fungicides 2006 - 30-40% 35-40% 3-8% 6-10% 2008 Approx gross margin contributions (% of total GM $) Glyphosate Other herbicides Insecti
Slide 16: Nufarm is responding to these changes
Nufarm is responding to these changes…. For personal use only Nufarm will leverage proven skills → Increased generic competition around sourcing; cost-competitive More post-patent chemistry → Opportunity for China to forward integrate production; regulatory affairs and → Need to address post-patent
Slide 17: Strategic relationships
Strategic relationships For personal use only Nufarm/Sumitomo Chemical strategic alliance Nufarm distribution of Sumitomo chemistry Brazil, Canada, Indonesia, Germany, Netherlands, UK Sumitomo distribution of Nufarm chemistry Mexico Manufacturing & logistics agreement Australia April 2010: Sumitomo
Slide 18: Strategic direction
For personal use only Strategic direction More discipline and focus − Improved systems and management reporting − Appropriate organisational changes − Close attention to costs and increased efficiencies Product and market segment diversification − 'Reweighting' of glyphosate − Higher margin grow
Slide 19: Outlook for balance of FY 2011
For personal use only Outlook for balance of FY 2011 First half performance important stepping stone to profit recovery − No more impact from high cost glyphosate inventories − Higher sales in other product segments − Margin expansion − Business improvement initiatives Majority of full year earn
Slide 20: For personal use only
For personal use only
Nufarm — Macquarie 12th Annual Australian Conference (May 2011) on 6ix