Interim Results 2020 5 March 2020 Forward-looking statements This - - PowerPoint PPT Presentation

Interim Results 2020

5 March 2020

Forward-looking statements

This presentation contains forward-looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of the preparation of this

• presentation. Due to the inherent uncertainties, including both

economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The Directors undertake no obligation to update any forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise.

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2020 Highlights & Trading Review

2020 Interim Results

Highlights Financial

– Highly challenging first half against prior year:

• Group revenue of €604.9m down 13.8%
• Group operating loss of €2.8m (2019: +€9.1m)
• Significant year-on-year reductions in Ireland & UK
• Good CE and LATAM performances

– Increase in net debt to €264.2m (2019: €238.8m) – Interim dividend 3.15c per share (2019: 3.15c)

Operational

– Ireland & the UK

• 40% decline in UK cropping base due to highly adverse

weather conditions

• Lowest planted area in 30 years

– CE

• Cropping base in line with expectation
• Strong working capital performance

– LATAM

• Good performance against delayed soya planting season

– Digital

• 1.2m active hectares

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5

2019 Origin at a glance

50,000

Customers

112

Distribution Points

>2,500

Employees

7

Countries

€1.8bn

Revenue

€82.3m

Operating Profit Revenue by Customer Channel

Direct Business-to-Business

Operating Profit by Geographical Segment

Crop Protection Revenue

€500m 2.5m Tns

Fertiliser & Crop Nutrition

€160m

Seed Revenue

770

Sales Force

1m Tns

Crop Marketing

34

Formulation & Processing Facilities

61% 39% 73% 17% 10% Ireland & the UK Continental Europe Latin America

Group Revenue1 Analysis

1 Excludes crop marketing revenues and volumes

Decline in Group Revenue1 from H1 2019 to H1 2020

(16.89%)1 +1.54%

Currency

(18.68%)

Underlying

+0.25%

Acquisitions

(19.14%)

Volume

+0.46%

Price

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– Underlying business volumes reduction of 25.6%

• Extreme weather drives a 1.1m decline in H1 UK cropping hectares to 1.7m hectares
• Reduced sales demand reflecting lower plantings and poorly established crops
• Strong feed and fertiliser volume comparatives due to higher demand intensity in 2019
• Significant catch-up cropping activity anticipated for H2

– Increased working capital investment reflecting lower sales activity – Amenity achieved higher underlying revenues and profits against the prior year – Digital Services enablement progressing well

0.9 1.2 2.8 (9.1)

2017 2018 2019 2020

Operating profit (€’m)

Trading Review

Ireland & the UK

Period ended 31 January 2020 2019 Change Underlying3 Constant Currency4 €’m €’m €’m €’m €’m Revenue 337.4 433.9 (96.5) (103.8) (102.7) Operating (loss)/profit1 (9.1) 2.8 (11.9) (11.7) (11.7) Associates and joint venture2 0.9 1.8 (0.9) (0.9) (0.9)

1 Before amortisation of non-ERP intangible assets and exceptional items 2 Profit after interest and tax 3 Excluding currency movements and the impact of acquisitions 4 Excluding currency movements

7

UK Wheat Production

Lowest planted area in over 30 years

– 5th wettest autumn on record – >2x more continuous days of rainfall of 5mm vs prior year

10 20 30 40 50 60 500 700 900 1,100 1,300 1,500 1,700 1,900 2,100 2,300

Rainfall Days Area Planted Harvest Season

Wheat Area planted vs Autumn Days Rainfall

Wheat Days Autum Rain

Source, rainfall days: Met office National Climate Information Centre Source , wheat area: AHDB, Management Estimates

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– Reduction in underlying business volumes of 3.4% – Satisfactory performance in seasonally quiet H1 reflecting generally favourable crop establishment and improved business mix – Strong working capital performance – New supply chain model implemented in Ukraine – Romania and Ukraine adopt group wide brand identity for direct farm services – Digital adoption progressing well with over 300k hectares on- boarded

0.7 0.9 0.6 0.7

2017 2018 2019 2020

Operating profit (€’m)

Period ended 31 January 2020 2019 Change Underlying3 Constant Currency4 €’m €’m €’m €’m €’m Revenue 142.1 147.9 (5.8) (9.5) (9.5) Operating profit2 0.7 0.6 0.1 0.2 0.2

1 Excluding crop marketing revenues, volumes and operating profits 2 Before amortisation of non-ERP intangible assets and exceptional items 3 Excluding currency movements and the impact of acquisitions 4 Excluding currency movements

Continental Europe1

Trading Review

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– Underlying operating profit growth of 7.3% in seasonally significant first half – Underlying business volume growth of 2.9% – Product margins stable – Market demand influenced by delayed soybean planting season – Additional production capacity commissioned in period

5.5 5.7

2018 2019 2020

Operating profit (€’m)

Market Entry

Latin America

Trading Review

Period ended 31 January 2020 2019 Change Underlying3 Constant Currency4 €’m €’m €’m €’m €’m Revenue 21.9 21.3 0.6 0.7 1.1 Operating profit1 5.7 5.5 0.2 0.4 0.4 Associate2 0.2

• 0.2
• 0.2

1 Before amortisation of non-ERP intangible assets and exceptional items 2 Profit after interest and tax 3 Excluding currency movements and the impact of acquisitions 4 Excluding currency movements

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Financial Review

Operating Loss

(€2.8m)

Revenue

€604.9m

(€96.7m) (€11.9m)

Adjusted EPS

(4.53c)

(8.14c)

Net Debt

€264.2m

2019: €238.8m

Net Debt / EBITDA

3.24x

2019: 2.57x

Interim Dividend

3.15c

2019: 3.15c

2020 Interim Performance

Summary

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FY 2019 Q1 Trading Update H1 Trading Update

FY2019 Q1 Trading Update H1 Trading Update

Early Winter Spring Crops Late Winter Fallow

Cropping Mix Gross Margin Mix Impact of Weather on UK Cropping

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2020 Interim Financial Highlights

2020 €’m 2019 €’m Change €’m Group revenue 604.9 701.6 (96.7) Group operating (loss)/profit1 Agri-Services Associates and joint venture2 (2.8) 1.1 9.1 1.8 (11.9) (0.7) Total group operating (loss)/profit (1.7) 10.9 (12.6) Finance costs, net (5.5) (5.9) 0.4 (Loss)/Profit before tax (7.2) 5.0 (12.2) Adjusted diluted EPS3 (4.53c) 3.61c (8.14c) Dividend per share 3.15c 3.15c

• Net debt

(264.2) (238.8) (25.4)

Period ended 31 January

1 Before amortisation of non-ERP intangible assets and exceptional items 2 Profit after interest and tax 3 Before amortisation of non-ERP intangible assets, net of related deferred tax (2020: €3.9m, 2019: €3.4m) and exceptional items, net of tax (2020: gain of €0.3m, 2019: charge of €0.7m)

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Group Revenue

€701.6m €604.9m

200 400 600 800

H1 19 Underlying Acquisitions Currency H1 20

(€108.1m) (15.4%) +€1.5m +0.2% (€96.7m) (13.8%) +€9.9m +1.4% €m

Period ended 31 January

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Group Operating Profit

€9.1m (€2.8m)

(5) 5

H1 19 Underlying Acquisitions Currency H1 20

(€11.4m) (125.3%) (€0.6m) (6.6%) (€11.9m) (130.8%) +€0.1m +1.1% €m

Period ended 31 January Underlying H1 20

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Earnings per Share

3.61c (4.53c)

(6.00) (4.00) (2.00) 0.00 2.00 4.00 6.00

H1 19 Underlying Acquisitions Currency H1 20

(8.02c) (0.39c) + 0.27c (8.14c) € cent per share

Period ended 31 January Underlying H1 20

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Summary Cash Flow Statement

Year to July 2019 €’m Period ended 31 January 2020 €’m 2019 €’m 12 months to January 2020 €’m

92.8 Cash flow from operating activities 6.5 13.6 85.7 (12.7) Change in working capital (138.4) (137.5) (13.6) (23.9) Interest and tax (7.8) (9.0) (22.7) 56.2 Cash flow from ongoing operating activities (139.7) (132.9) 49.4 (3.1) Exceptional and one off items (1.5) (1.2) (3.4) 53.1 Net cash flow from operating activities (141.2) (134.1) 46.0

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Balance Sheet

Period ended 31 January

2020 €’m 2019 €’m

Tangible assets 185.9 136.5 Goodwill and intangible assets 273.1 285.3 Associates and joint venture 41.8 43.4 Working capital 189.2 161.1 Deferred and contingent acquisition consideration (37.8) (46.5) Provisions for liabilities, including pension (3.9) (7.7) Net debt (264.2) (238.8) Lease Liability (IFRS 16) (43.5)

• Taxation – including deferred tax

(24.8) (28.9) Other (1.0) (0.4) Shareholders’ funds 314.8 304.0

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Banking Facilities and Covenants

Period ended 31 January 2020 2019 Net debt to EBITDA 3.24 2.57 Covenant < 3.50x < 3.50x EBITDA to net interest 7.57 9.25 Covenant >3.00x >3.00x

All terms as defined for bank covenant testing purposes

Committed banking facilities

€430 million

Weighted average debt maturity in year 2020

3.9 years

(2019: 3.3 years)

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Business Review

Research + Development

The Origin Business Model

Delivering enhanced outcomes for customers in challenging in-field conditions

Crop Technology Partnerships Own Digital Services Own Crop Input Formulation

50,000+ customer serving 12m ha 1,200,000 ha

• n-boarded

12,000+ fertiliser prescriptions

Amenity Professionals Farmers & Growers

Environmental Sustainability Profitability & Competitiveness Input Supply Chain Yield Enhancement Influence Service Relationship

Field Level Application

Our Brands

Optimising value in season through maximising available crop potential

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Addressing the Challenges

Key commercial and operational actions

Growth through existing footprint New business models Raising the profile of Agrii

– Focused development of new agronomised product portfolios – Optimise own product base to enhance margin mix – Refining sales management approach – Portfolio segmentation linked to differentiated supplier strategies – Robust cost management

Plan Focus

– Expand presence in new agronomy channels – Enhanced offering through Digital agronomy – Broaden advice and input

• ffer across high value and

speciality crops – Strengthened presence focused on Origin differentiators across all markets

Through What Initiatives? Driven By? People Performance Management Process

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Addressing the Challenges

Balance Sheet

Pause M&A Drive improved Working Capital efficiency

Optimising Cash Generation

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Mitigating Climate Change through Responsible Stewardship

Enhancing Productivity Efficient Pesticide and Fertiliser Usage Zero Pollution Climate Resilience Minimising Food Waste

Climate Policy Goals Origin’s Solutions

Nutri-match enhanced efficiency fertiliser Digital reducing carbon and

• ptimising
• utput

Methane reducing animal feed Market leading R&D Integrated pest management Biologicals

Agriculture has the capacity to remove greenhouse gases safely and cost-effectively without reducing productivity

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Summary

Summary

– Poor first half performance reflecting most challenging autumn cropping season in UK in 30 years – Continental Europe and Latin America performance in line with expectation – FY20 performance predicated on robust seasonal activity in Ireland and the UK in second half – Full year outlook will be provided at time of third quarter trading update on 17 June 2020

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Thank You