2008 Interim Results
Overview of Origin Enterprises Focus on the value added and primary sectors of the food industry Group activities – Ambient Food & Cereal Milling – Agri-Nutrition • Agri-Inputs • Integrated on-farm agronomy Shetland Islands • Marine Proteins Associate Poland – Feed manufacturing (50%) • John Thompson Aberdeen Olsztyn Poznan Property Derry Alexandrow Ayr Killybegs Lublin Pszenno Marine Proteins Belfast Fertiliser Immingham Ardee PB Kent Grimsby Askeaton Chemicals Dublin Foynes Ipswich Animal Feed New Ross Newport Food Cork Masstock Plymouth 2 Ringaskiddy
Operational Highlights to 31 January 2008 Excellent performance from Agri-Nutrition – Strong arable crop demand driving growth in UK agri-inputs market. Strong sales growth momentum in Food. Acquisition of controlling interest in Odlums. Acquisition of Masstock Group Holdings Ltd – Significantly extends Origin’s capability to support primary production. Strong cashflow performance in period. Property – Adoption of Cork South Docks Local Area Plan 3
Interim Results Highlights to 31 January 2008 Revenue growth of 45.7% to €546.4m. Operating profit* increased 70.7% to €20.2m. Profit before financing costs* up 54.9% to €21.2m. Comparable adjusted fully diluted EPS* up 68.5% to 9.37cent. Group net borrowings of €164.4m post – Acquisition spend - €59.3m – Seasonal increase in working capital - €37.3m. *Before intangible amortisation 4
2008 Interim Results – Profit and Loss 2008 2007 Half Year Ended January Growth €m’s €m’s Revenue 546.4 374.9 45.7% EBITDA 23.8 15.4 54.8% Operating Profit 20.2 11.9 70.7% Associates – PAT 1.0 1.8 (48.2%) Profit before financing costs 21.2 13.7 54.9% EBITDA % 4.4% 4.1% Operating Profit % 3.7% 3.2% 5
2008 Interim Results – Segmental Analysis Growth Half Year Ended 2008 2007 excluding Growth January €m’s €m’s Acquisitions Revenue 375.4 252.6 48.6% 48.6% Agri-Nutrition 171.0 122.3 40.0% 6.6% Food 546.4 374.9 45.7% 34.9% Total Operating Profit 11.7 6.0 98.8% 98.8% Agri-Nutrition 42.9% 9.6% Food 8.5 5.9 20.2 11.9 70.7% 54.0% Total Operating Margin 3.1% 2.3% Agri-Nutrition 5.0% 4.9% Food 3.7% 3.2% Total 6
2008 Interim Results – Profit and Loss 2008 2007 Half Year Ended January Growth €m’s €m’s Profit before financing costs 21.2 13.7 54.9% Financing cost, net (5.9) (0.1) Amortisation (0.8) (0.4) Profit before tax 14.5 13.2 10.0% Taxation (2.6) (2.5) Profit for the period 11.9 10.7 10.9% Adjusted fully diluted EPS* - cent 9.37** 8.31** 12.8% Comparable adjusted fully diluted EPS - cent 9.37** 5.56*** 68.5% *Before intangible amortisation **Based on 137.5m shares (dilutive impact of DCS) for 2008 and 133m for 2007 ***2007 adjusted to reflect the current capital structure of the Group. 7
Cash Flow 2007 2008 2007 (Full year) Half Year Ended January €m’s €m’s €m’s EBITDA 23.8 15.4 46.9 Working capital (37.3) (40.4) 0.9 Other 0.3 0.0 (1.1) Cashflow from operating activities (13.2) (25.0) 46.7 +47.2% Interest (3.7) (0.1) (1.8) Acquisition (59.3) - - Capital Investment (15.4) (3.4) (6.1) Issue of share capital - - 102.5 Group restructuring / Payment to IAWS - 19.5 (255.5) Translation adjustment (1.1) 0.1 8.1 Opening net debt (71.7) 34.4 34.4 Closing net debt (164.4) 25.5 (71.7) 8
Balance Sheet Jan 2008 July 2007 €m’s €m’s Development Properties 192.4 165.5 Other Tangible Assets 94.0 71.1 Intangibles/Goodwill 53.0 15.2 Associates 15.5 26.5 Working Capital 75.2 22.3 Net Debt (164.4) (71.7) Taxation – incl DT (46.6) (38.6) Provisions/Grants (7.1) (4.9) Employee Benefits (16.9) (1.8) Shareholders Funds 195.1 183.6 9
The changing context for primary food production Population growth – Global population doubled between 1950 and 2005 to 6.4bn – Population growing at 80m per annum – Estimate 9bn by 2050. Food Demand – Projected to double by 2050 – Urbanisation and economic growth driving higher food intake per capita – Diversification of diets – Increased cereal production required to meet higher protein and dairy consumption Sources : R.L Thompson, University of Illinois, March 2007 10 United Nations Statistics
The changing context for primary food production Soil and Water limitations – Global cropland is shrinking by more than 10m hectares pa due to soil erosion – Irrigation for agricultural use consumes 70% of worlds fresh water – Increasing urbanisation is placing strains on global fresh water supply • Already evident in Australia, China, Israel and USA – 1m litres of water to produce 1tn of grain in China “Soil erosion is second only to population growth as the biggest environmental problem the world faces” David Pimental – Professor of Ecology, Cornell University Source : Cornell University & United Nations Statistics 11
Alternative Markets for feed stocks - Global Ethanol Production – plus 40 mln m3 (85 %) in 10 years 90 85 82 80 78 80 75 70 21 19 18 70 66 17 16 61 15 56 60 8.5 14 8.5 8.5 8.5 51 8.0 13 in mln m3 7.0 46 12 50 6.0 11 5.0 4.2 10 40 31 30 30 3.5 29 28 26 3.1 24 22 30 20 17 15 20 25 24 24 23 23 22 21 21 10 20 19 18 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Brazil USA EU Others 12 Source: Toepfer International
World Wheat ending stocks 250.0 40.0% 34.4% 35.0% 200.0 27.6% 30.0% 24.8% 24.1% 25.0% 22.8% 150.0 20.2% 20.0% 18.0% 201.8 100.0 15.0% 166.3 151.0 149.2 132.5 10.0% 124.9 110.9 50.0 5.0% 0.0 0.0% 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 2007/2008 Ending Stocks (million T) World stock / usage % World 13
Dec-07 Sep-07 Jun-07 Mar-07 Dec-06 Sep-06 Jun-06 Mar-06 Dec-05 Price Trends – Wheat €/tn CIFFO Irl 14 Sep-05 Jun-05 Mar-05 Dec-04 Sep-04 Jun-04 Mar-04 Dec-03 Sep-03 Jun-03 270 250 230 210 190 170 150 130 110
New Context for Primary Production Demand is growing. Limited choice of locations to accelerate output – Grain production not keeping pace with consumption – The worlds arable land and fresh water are not distributed in the same proportions as population. Challenge – Deliver sustainable productivity – Optimise the efficiency of key farm inputs. Opportunity – Enormous potential for efficient farm enterprises. Origin ideally positioned to leverage opportunity. 15
Agri Inputs – Feed Ingredients Market leader in the importation of animal feed ingredients and cereals. – Total all Ireland market c.6mt Very satisfactory performance – Volume growth – Momentum within dairy Product origins – Stable livestock population Cereals, Rape, Suns & Milling wheat Organic wheat Soya, Rape, Peas Soya, Gluten & Dist Citrus Soya, Citrus & Suns P/Kernel & Copra 16
Agri Inputs – Fertiliser Market leader in importing and distribution of blended fertiliser in Ireland and the UK – Ireland 1.7mt – UK 4.0mt. Excellent half year performance – UK volume growth • Higher cereal prices driving yield maximisation • Increased cereal plantings – Ireland • Seasonally a H2 business – Raw Material availability. 17
Marine Proteins Leading producer of fishmeal and fish oil in Ireland & the UK. Origin Satisfactory performance – Lower price realisations – Increasing use of fishmeal in pig and poultry diets Planning permission granted in October 2007 for new fishmeal and fish oil manufacturing facility in Killybegs. Commencement of discussions with Austevoll Seafood ASA to combine respective European fishmeal and fish oil operations. 18
Food - Shamrock Foods Leading ambient food sales, marketing and distribution business. Focussed on two core business areas: – Owner of two leading Irish brands – Shamrock & Roma – Foremost provider of distribution and supply chain solutions. Very satisfactory performance – Strong sales momentum from own brands – Diversification into snacking and ‘Wellness’ categories – Channel extension – Agency business performing well. Input cost inflation. 19
Food – Odlums Full control of Odlums since September 2007. Odlums: – Ireland’s largest cereal miller – Leading Irish brand in retail flour – Growing export branded oatmeal business. Challenging H1 performance – Significant wheat price increases Integration – Complimentary product and distribution profile – Process commenced in the period. 20
Partners in Profitable Farming Established in 1988. Leading provider of integrated agronomy services directly to arable and grassland farm enterprises – Delivery of prescription based advice and farm management advisory expertise combined with… – Sale and distribution of seed, nutrition and crop protection inputs. Scale – Servicing over 8,000 farm businesses in the UK representing c.25% of the total arable crop – Servicing over 2,300 farm businesses in Poland representing c.20% of the 100+Ha universe. 550 Employees. Strong management capability. 21
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