Nufarm Limited

Thank you and good morning everyone. Welcome to New Farm's Financial Year 25 results presentation. Joining me today are Brendan Ryan, New Farm's CFO, Brent Zacharias, Group Executive of Sea Technologies, as well as Rico Christensen, who's the Group Executive Portfolio Solutions, and as you'll see from this morning's announcement, CEO Designate. I will talk to the transition in more detail later in the presentation. But in terms of the call today, I will speak to the financial year 25 results, Brendan will speak to the financials, and Rico will cover priorities for financial year 26 and the outlook. Before we move to the presentation, I draw your attention to the disclaimer on slide two, and in particular, the wording related to forward-looking statements. To the result, since the half year we have delivered on key profitability and leverage unwind targets that we communicated to the market in August. We are very pleased with the performance of crop protection delivering an earnings increase of 18% with importantly growth across all regions. We have concluded the review of seed technologies and the board has determined that a reprioritised strategy is expected to deliver the best value for shareholders. We have taken steps during the year to reduce cost and capital requirements across the SEEDS business and we are in very good shape to deliver upside from the business in the future. We reported a statutory loss of $165 million, which includes $142 million of mainly non-cash material items relating to the outcomes of the seed technologies review and the broader performance improvement program across the business. We are confident that the action that we have taken sets the business up well for the future. We reduced net debt by $538 million from the half and ended the period with leverage of 2.7 times. This reflects both the seasonal unwind that's inherent in our business, as well as our ability to de-lever through internal discipline and efficiency. We are in good shape to deliver earnings growth and further leverage reduction this financial year through growth in crop protection and improved performance in seed technologies. Meaningful positive cash flow generation and a lower capex profile is expected to support further deleverage at the end of the 2026 financial year. I'll now cover some of the highlights across financial year 25. In crop protection, as I said, we delivered a strong result with growth in profitability in all regions and EBITDA margin improvement of 140 basis points. In North America, We recorded a record year for profitability in the turf and ornamental segment, and in APAC, a record profit in Asia. In Europe, a 22% uplift in profitability, and this reflects the focus that we've had on improving returns in that business. Across seed technologies, we have made good progress on the repositioning, which includes a reduction in cash costs. Our focus is on growing our profitable hybrid seeds business, and we are really pleased with the increased revenue and profitability in South America. In bioenergy, as the market fundamentals have continued to strengthen, we increased the planted area in Carinata. The market has evolved as expected, with a shortage of feedstocks to supply the demand creation by the implementation of the Renewable Energy Directive in Europe and the subsequent mandates. We have a long track record in developing solutions for farmers through innovation with a capital life technology partnership model. We have a very strong near and medium term pipeline and have delivered multiple product launches in multiple markets across our seeds and crop protection platforms. New product launches in crop protection contributed around 15% of financial year 25 revenues. And on operating performance, we are pleased with the gross margin improvement of 100 basis points. Good internal discipline around working capital and cost has supported the net debt unwind in the second half. As you know, we announced a review of our seed technologies business in May of this year. The review considered a thorough assessment of our strategy, as well as the potential for a sale and bringing in a capital partner. After a considerable amount of work, the board has determined the highest value outcome for shareholders is expected to be continued ownership under a reprioritised strategy, where we are focused on growing our hybrid seeds business, a reduction in the cash requirements for Omega-3, and expanding our bioenergy business with BP. We have already taken action to reduce cash costs and capital requirements across the business. We are focusing on the continued growth of hybrid seeds in markets where we have established positions and strong growth prospects, particularly in South America and Australia. We plan to grow bioenergy supported by our agreement with BP and expected demand growth coming from biofuels mandates. In Omega 3, our near-term focus is on supporting customers with the existing inventory and managing to a cash flow neutral outcome. We have the opportunity to reposition production over the medium term to South America with the aim of lowering our cost of production and improving our competitive position. We have a clear path to generate benefits for shareholders as we partner with downstream customers and optimize to a lower cost position. We are really pleased with performance across crop protection with underlying EBITDA up 18%. We focused on profitable growth in a flat volume environment. Revenue and profit grew with the benefit of both mix and margin. And the team did a really good job on inventory management, and we are seeing the benefits coming from the performance improvement plan, predominantly in Europe. Turning now to the regional crop protection businesses, underlying earnings increased 10% in APAC, a good result considering the impact of dry weather in Australia. We delivered record revenue and profitability in Asia, and the margin uplift was driven by improved COGS goods, and product mix. In North America, we grew underlying earnings by 19% across the year, with momentum building in the second half, which was up 30% on the second half of 2025. It was an excellent result, given the team were navigating some dynamic market conditions in relation to tariffs and anti-dumping duties. The turf and ornamental segment had a very good year, delivering a record result primarily driven by improved demand in the golf and lawn care sectors. Margin uplift was driven by improved COGS and product mix. As I mentioned earlier, we also had a very good year in Europe with underlying EBITDA increasing by 21%. Margins expanded from improved mix and the benefit improvement program. Performance also benefited from better seasonal conditions and market conditions driving volume growth. The business has good momentum with more upside to come from the continued execution of our performance improvement plans in the current year. Turning now to seed technologies, we thought it would be helpful to give you more visibility on the segments. So we have split out our earnings from hybrid seeds and the emerging technologies, which includes bioenergy and omega-3s. Hybrid seeds performed well with EBITDA of 67 million with the lower earnings on the prior period mainly a result of dry weather in Australia which impacted canola seed sales. South America saw them in sunflower where ahead of the prior year. We have streamlined our European and North American operations as we focus on the markets which are most attractive and where we have the strongest positions and growth potential. In bioenergy, we had the benefit of growth in hectares planted and resulting seed margin. However, this was offset by lower licensing fees from our agreement with BP. We have seen strong recovery in GHG market values in Europe, which is driving increased oil demand and value outlook for Carinata. Omega-3 earnings were impacted by the fall in fish oil prices. Inventory has been carried into this financial year and will provide us with the ability to serve customers while we look to shift production to South America where we are targeting a lower cost of goods. We are advancing towards customer offtake agreements to improve both volume and price predictability. And as I said before, we have significantly reduced the cost and capital profile for our omega-3 business. As a final point, I'd like to emphasize that as a result of our review, we have shifted the cash requirements of the seed technologies business to become more self-funding. I will now hand over to Brendan to cover the financials.

Thanks, Greg. I'll begin with a summary of the financial year at 25 performance. The result presented today is consistent with the market update provided in August. For financial year 25, we delivered a solid top-line growth, with revenue up 3% year-on-year. Gross profit increased by 7%, and the gross profit margin expanded by 1 percentage point to 26.1%, driven by strong crop protection margins and a favorable mix. EBIT after material islands was a loss of $74 million. Net financing costs were $101 million, down 6% year-on-year. The reported statutory loss was $165 million, impacted by two significant factors. Material items of $142 million, primarily from the seed technologies review. I'll provide more detail on this shortly. And $53 million of early stage losses from emerging platforms, principally Omega-3 related to the fall in fish oil prices. Underlying EBITDA was $302 million compared to $311 million in the prior year. Importantly, excluding emerging platform losses, underlying EBITDA was up 10% year-on-year, reflecting a strong improvement in crop protection profitability and resilient hybrid seeds performance. Now to more detail on the material items. The after-tax impact of material items was $142 million, which is predominantly non-cash, with a financial year 25 cash impact of approximately $30 million. The key components and material items were 118.7 million from seed technologies, asset rationalization and restructuring. In hybrid seeds, we've scaled back our European sunflower operations as the prolonged and more severe Russia-Ukraine conflict has significantly reduced the attractiveness of that market. This resulted in the impairment of sunflower IP and a write-down on associated seed inventories. representing the majority of this material item. Also included in this material item is a scale back on omega-3 plantings in North America, with plans to move production to South America to achieve more competitive cost of goods sold. This has resulted in the write-down of the excess omega-3 seed inventory. There are also associated redundancy costs with the cost of program from workforce reductions. Separately disclosed, So primarily connected with the seeds review is 5.4 million of legal and advisory costs. We also incurred 13.4 million restructuring costs and crop protection. These costs include redundancy costs with the cost of program and some asset rationalization. In financial year 26, we expect to see clear benefits from the action taken in financial year 25. With reduced capital expenditure, more focused capital allocation, and lower staff and operating costs. Turning now to margin and costs. Underlining gross margin increased by 80 basis points, with crop protection delivering a strong 140 basis points improvement, driven by cost of goods efficiencies and favorable mix. Operating costs remain an important focus. Underlining SG&A increased by 10% year on year, and when expressed relative to revenue, was up 140 basis points. This growth reflects inflationary pressures, increased investment in R&D, marketing and business development to support growth to the top line. Looking ahead, operating cost discipline is a priority. Full period benefit of the $50 million cost savings program is expected to broadly offset natural cost inflation in financial year 26. Now to the balance sheet. Average networking capital sales improved to 38.2%, improving by 440 basis points and firmly within our 35 to 40% target range under our capital management framework. The improvement was primarily driven by inventory efficiency, supported by a focused program and inventory reductions across all crop protection regions. Average inventory days improved by 16, while receivables days were down four, reflecting strong cash collections during the second half seasonal unwind. Table days remained flat, reinforcing that the net working capital progress was largely an inventory story. Working capital management remains a key focus with further improvement targeting financial year 26. In respect of capital expenditure, it was broadly consistent with the prior year. Spend on property, plants, and equipment focused on health, safety, and environmental priorities and plant reliability. Proper tech's intangible CapEx continues to deliver value through the product pipeline. Investment in seed technology's growth platforms was also similar to prior years. For financial year 26, we are targeting CapEx below $200 million, reflecting disciplined capital allocation. The reduction will come from lower manufacturing spend following significant investment in recent years. Prop protection R&D focused more on the near-term priorities and reduced capital for seed technologies aligned to the reposition strategy. It's worth noting that CapEx in the first half of 2026 is expected to be a significant reduction compared to the prior period, given the spend last year was first half weighted. In terms of free cash flow, it was negative $131 million. reflecting several key factors. While networking capital movements excluding omega-3 were positive, these gains were offset by the omega-3 position. The outflows on interest, tax, capex, lease, and step-up security distributions contributed to the overall cash flow result. Looking ahead, we are strongly positioned to deliver meaningful, positive free cash flow in financial year 26, supported by anticipated continued improvement in working capital efficiency, planned CapEx below $200 million, reflecting disciplined investment, significantly lower cash requirements for Omega-3, and expected EBITDA growth year-on-year. In terms of net debt, net debt reduced by $538 million in the second half of 2025, reflecting the normal seasonal unwind, demonstrating strong second-half cash conversions. Year-end net debt was $824 million, with unfavorable FX movements and omega-3 inventory contributing to the year-on-year increase. Leverage closed at 2.7 times below the guidance provided in August. Reducing leverage remains a priority, supported by the actions outlined earlier to deliver positive free cash flow in financial year 26. In terms of funding, Gross debt, excluding leases, was $1.154 billion at year-end. Liquidity remains strong, with $345 million of undrawn facilities, consistent with the prior period, and $475 million in cash. Our diversified and flexible debt facilities are underpinned by a covenant-like financing structure and a stated maturity profile. The short-term Omega-3 trade facility has been successfully refinanced into a two-year amortizing loan facility with a maturity of September 2027. Looking ahead, we are well-positioned to support seasonal working capital bills. We anticipate that this year's bills will be lower. CapEx will be $50 million lower in the first half. Omega 3 cash requirements will be significantly lower, and there is further benefit from the improvement in earnings. New Farm's capital structure is designed to accommodate seasonal funding demands. There are no expected short-term refinancing needs for the group's primary debt facilities, other than the standby liquidity facility, which the extension to November 2027 is well advanced, and the ABL facility matures in November 2027. Importantly, New Farm's capital structure is designed to deal with seasonal fluctuations. In concluding, New Farm enters financial year 26 with a solid base of profitability and a strong liquidity position. Profit protection and profitability improved across all regions, and our hybrid seeds business is generating strong profits. Our funding structure remains flexible, supported by $345 million of undrawn facilities and $475 million in cash at the balance state. Second half 2025, Net debt had the usual seasonal unwind of $538 million. We are continuing actions to reduce costs and deleverage. We're expected to deliver further benefits in financial year 26. We are expecting positive cash flow with anticipated further reduction in net working capital, disciplined capital management with capital expenditure below $200 million and EBITDA growth. To help with your models, we are giving the following guidance on some key items for financial year 26. Depreciation and amortization, circa $225 million. Net interest expense, circa $105 million. And the effective tax rate, circa 30%. I will now hand you back to Greg.

Thanks, Brendan. Rico is now going to cover the outlook and priorities for the year ahead. But before he does, I would just like to make some introductory remarks. As you would have seen from our ASX announcement, Rico has been appointed CEO and Managing Director of New Farm, commencing in the role in the new year. Rico joined New Farm to run portfolio solutions four and a half years ago, having spent over two decades in the industry. He's done an excellent job in that role. and brings considerable global experience running businesses in the Americas, Europe and Asia before his time at Newfarm. I'm looking forward to working with Rico over the coming weeks and months to support the transition. I would also like to take the opportunity to thank our shareholders for their support over the last 10 years. It's been a fantastic opportunity to lead this business and I'm very confident in the future of Newfarm under Ricoh's leadership. Over to you, Ricoh.