Interim Results 2022 Prescriptive Solutions, Sustainable Production - 8 March 2022 - Origin Enterprises
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Interim Results 2022 8 March 2022 Prescriptive Solutions, Sustainable Production
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. originenterprises.com 2
Positive foundation for the full year
Strong operating performance Strong volume growth across all Strategic and Operating developments
three segments • Immediate focus on safety and wellbeing
Growth across all key financial metrics:
of our employees in Ukraine following
Russian invasion
> Positive on-farm sentiment
€877.1m > Encouraging cropping profiles
> Early season demand drives input volumes
• Managing considerable price and supply
chain volatility
53.2% increase • Acquisition of Envirofield UK to enhance
in Group Revenue R&D capability
Ireland
Embedding Sustainability
€11.1m and the UK
+10.1%1
Continental
Europe
+18.7%1
• Committed to setting science
based targets
€9.9m year on year increase
in Operating Profit • Launched Soil Resilience Strategy
through Agrii UK
Latin
• New environmental management
0.61x America
+72.7%1
system progressing to plan
Net Bank Debt/ EBITDA Ratio Shareholder Returns
(H1 2021 2.76x)
• €19.5m cash inflow from 1st phase of
Cork property disposal
3.15 cent • Launch of share buyback programme -
up to €40m
Interim dividend 1 • Capital Markets Day – London 10th May
Underlying Volumes
originenterprises.com 3
TRADING REVIEW
Operating Profit (€’m)
Ireland & the UK
Ireland
United Kingdom 2.8
-2.7
3.2
-9.1
> Crop input volume growth +10.1%
• Larger cropping area
• Favourable in-field conditions H1 2019 H1 2020 H1 2021 H1 2022
• Seed sales recovered with no repeat
of FY21 inventory overhang
> Global fertiliser and feed price
inflation reflected in revenue growth
• Modest impact on demand
Financial Review: Ireland and the United Kingdom
> Amenity portfolio delivered Change on prior year
improved performance
• Green-tech performing ahead of H1 2022 H1 2021 Change Underlying3 Constant Currency4
expectations €’m €’m €’m €’m €’m
Revenue 561.7 344.5 217.2 172.8 187.2
> Digital secures exclusivity on cloud Operating profit1 3.2 (2.7) 5.9 3.3 5.0
free imagery technology
Associates and joint venture2 1.3 0.8 0.5 0.4 0.4
> Acquisition of Envirofield Ltd 1. Before amortisation of non-ERP intangible assets and exceptional items
enhances near market R&D trials 2. Profit after interest and tax before exceptional items
capabilities 3. Excluding currency movements and the impact of acquisitions
4. Excluding currency movements
originenterprises.com 4
TRADING REVIEW
Operating Profit (€’m)
Continental Poland
Ukraine
Europe
1.1
> Underlying volume growth + 18.7% 0.7
0.6 0.1
> Input price inflation uncertainty
stimulated early season demand H1 2019 H1 2020 H1 2021 H1 2022 Romania
> Robust winter plantings:
• Poland in line with FY21
• Romania 7.9% ahead of FY21
Financial Review: Continental Europe1
• Ukraine returned to normalised
level (back 4.6%)
Change on prior year
> Positive on-farm sentiment in
H1 2022 H1 2021 Change Underlying3 Constant Currency4
Poland and Romania
€’m €’m €’m €’m €’m
> Improved cash/credit mix Revenue 182.1 122.4 59.7 69.9 60.1
> Limited localised operations in Operating profit2 1.1 0.1 1.0 1.2 1.2
Ukraine in areas away from the 1. Excluding crop marketing. While crop marketing has a significant impact on revenue, its impact on operating profit is insignificant. An analysis of
revenues, profits and margins attributable to agronomy services and inputs more accurately reflects the underlying drivers of business performance
conflict and when safe to do so 2. Before amortisation of non-ERP intangible assets and exceptional items
3. Excluding currency movements and the impact of acquisitions
4. Excluding currency movements
originenterprises.com 5
TRADING REVIEW
Operating Profit (€’m)
Latin America Brazil
5.7 6.7
5.5 3.9
Minas Gerais State
> Underlying volumes
increased by 72.7%
H1 2019 H1 2020 H1 2021 H1 2022 Paraná State
> Growth achieved across both
BAM and controlled release
fertiliser product ranges
> Total cropping area Financial Review: Latin America
increased by 4.4%
> Positive farm sentiment Change on prior year
despite impact of dry H1 2022 H1 2021 Change Underlying3 Constant Currency4
weather on crop/soy yields €’m €’m €’m €’m €’m
Revenue 44.5 21.6 22.9 21.9 21.9
> Harvest ahead of 5 year
Operating profit1 6.7 3.9 2.8 2.7 2.7
average
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/disposals
4. Excluding currency movements
originenterprises.com 6
Financial Review originenterprises.com 7
2022 Interim Performance
Revenue Operating Profit Adjusted EPS Dividend per share
€877m €11.1m 4.99c 3.15c
53.2% (rc1) €9.9m (rc1) 6.52c (rc1) H1 2021: 3.15c
48.2% (cc1) €9.0m (cc1) 5.94c (cc1)
Finance costs Working Capital outflow Net Bank Debt Net Bank/EBITDA
€4.8m €53.1m €53.7m 0.61x
H1 2021: €4.5m H1 2021: €98.6m H1 2021: €158.3m H1 2021: 2.76x
1. rc denotes reported currency; cc denotes constant currency
originenterprises.com 8
• Group Revenue1
Period ended 31 January
1
+61.4% Growth in Group Revenue
6 months to January 2022
+6.3% Currency
+54.1% +3.0% (2.0%)
Underlying Acquisitions Disposals
+15.0% Volume
+39.1% Price
1 Excludes crop marketing revenues and volumes
originenterprises.com 9
2022 Interim Financial Highlights
Period ended 31 January
2022 2021 Change Constant Currency
€’m €’m €’m €’m
Group revenue 877.1 572.4 304.7 275.9
Group operating profit1
Agri-Services 11.1 1.2 9.9 9.0
Associates and joint venture2 1.3 0.8 0.5 0.4
Total group operating profit 12.4 2.0 10.4 9.4
Finance costs, net (4.8) (4.5) (0.3) (0.1)
Profit/(loss) before tax 7.6 (2.5) 10.1 9.3
Adjusted diluted EPS (cent)3 4.99c (1.53c) 6.52c 5.94c
Dividend per share (cent) 3.15c 3.15c -
Net bank debt4 53.7 158.3 104.6
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 (2022: €4.6m, 2021: €3.4m) and exceptional items, net of tax (2022: €2.8m credit, 2021: €0.4m charge)
4. Group net debt before impact of IFRS 16 Leases
originenterprises.com 10Group Revenue Bridge
Period ended 31 January
1,000
800
600
€’m
400
200
0
H1 2021 Underlying Acquisition Disposal H1 2022 (excl. currency) Currency H1 2022
originenterprises.com 11Group Operating Profit Bridge
Period ended 31 January
12
10
8
€’m 6
4
2
0
H1 2021 Underlying Acquisitions/Disposals H1 2022 Currency H1 2022
(excl. currency)
originenterprises.com 122022 Interim Cash Flow
Period ended 31 January
6 months to 6 months to 12 months to
Year to July 2021 January 2022 January 2021 January 2022
€’m €’m €’m €’m
83.5 Cash flow from operating activities 23.4 11.1 95.8
(4.0) Change in working capital underlying business (53.1) (98.6) 41.5
(15.8) Interest and tax (11.7) (5.8) (21.7)
63.7 Cash flow from ongoing operating activities (41.4) (93.3) 115.6
(1.8) Exceptional and once off items - (1.0) (0.8)
61.9 Net cash flows from operating activities (41.4) (94.3) 114.8
originenterprises.com 13Strong Credit Metrics
Headroom across all key banking covenants)
12 month rolling EBITDA Covenant 31 January 2022 31 January 2021
Net debt to EBITDA Maximum 3.5x 0.61x 2.76x
Interest Cover Minimum 3.0x 11.10x 6.75x
Cash performance reflects:)
• Sustained focus on working capital management initiatives
• Proceeds from first phase of Cork property portfolio
• Early season demand
• Improved cash/credit sales mix)
originenterprises.com 14Nurturing Growth originenterprises.com 15
Turning challenges into opportunities
Soil Biodiversity Food security Trends in green
degradation loss and nutrition space and sports
turf solutions
Climate
change
Water Pesticide Consumer trends Circular
stress use > Nutrition & health economy
originenterprises.com 16How we are addressing opportunities
Protecting Improving
Biodiversity & Soil Resilience &
Enhancing Plant Nutrition
Natural Capital
Sustainable Innovative &
Farming Integrated Ways
& Productivity to Protect Crops
originenterprises.com 17Transitioning through innovation
Protecting Improving
Biodiversity & Soil Resilience &
Enhancing Plant Nutrition
Natural Capital
Sustainable Innovative &
Farming Integrated Ways
& Productivity to Protect Crops
originenterprises.com 18Developing new products and services to rebalance existing portfolio
Protecting Improving
Biodiversity & Soil Resilience &
Enhancing Plant Nutrition
Natural Capital
Sustainable Innovative &
Farming Integrated Ways
& Productivity to Protect Crops
originenterprises.com 19Innovating existing products and services to reflect changes in customer preferences
Protecting Improving
Biodiversity & Soil Resilience &
Enhancing Plant Nutrition
Natural Capital
Sustainable Innovative &
Farming Integrated Ways
& Productivity to Protect Crops
originenterprises.com 20Expanding our offering to meet new demand
Protecting Improving
Biodiversity & Soil Resilience &
Enhancing Plant Nutrition
Natural Capital
Sustainable Innovative &
Farming Integrated Ways
& Productivity to Protect Crops
originenterprises.com 21Using digital to support the transition
Service orientated Data driven
Value creation Collaboration
originenterprises.com 22Positioning for growth
Leading market positions which Complementary M&A Targets Related Markets
support essential global food
production and the amenity Proprietary $2.5Bn - Biologicals
sector Products $2.7Bn
$3.5Bn -
• Seed Micronutrients $4.0Bn
Long-term partnerships as a • Micronutrients
• Fertiliser
trusted advisor and input • Biologicals
provider Global
Market
Collaborative research and
technical innovation,
transferring new technologies
into commercial operations Amenity UK Garden
£2,400m*
Solutions Products
Positioned to capitalise on • Forestry
UK Environmental £825m*
• Landscaping
evolving market trends Services
• Seeds UK Urban
• Environmental £235m Landscaping
M&A introduces newer creation
• Plant protection
sustainability focus • Biologicals
UK Sports Turf
Solutions
£130m
* Relevant subsectors
originenterprises.com 23Summary &
Outlook
originenterprises.com 24Outlook
Encouraging cropping profile across each geography ahead
of the H2 growing season
Aside from the normal weather risks, the Group will
continue to focus on securing product supply, as price
volatility and supply chain risks persist into H2
Limited localised operations in Ukraine in areas away from
the conflict and when safe to do so. Our top priority is the
safety and wellbeing of our colleagues and supporting them
and their families through this difficult time.
Launch of Share Buyback Programme – up to €40m, in
addition to an interim dividend of 3.15 cent per share
The Group is well placed to deliver solid growth in earnings
for the full year
originenterprises.com 25Thank you originenterprises.com 26
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