Origin Enterprises plc

Good morning ladies and gentlemen, and welcome to the Origin Enterprises plc 2026 preliminary results. Just a reminder that this call is being webcast live on the internet, and the presentation is available to view on the Origin website. I will now pass over to Sean Coyle, CEO of Origin Enterprises plc. Please go ahead sir.

Thank you and good morning everyone. I'm joined this morning by Colm Purcell, our CFO, TJ Kelly, the divisional managing director of our living landscapes business, and Brendan Corcoran, our head of investor relations. We're delighted this morning to be bringing you a very resilient set of operating numbers, particularly given the context of the challenges that the business has faced over the last 12 months. We'll start firstly with the normal safe harbour declaration. So the business produced an increased overall group operating profit number of just over €100 million. Growth in constant currency of just under 3%. We also grew earnings per share in the period in constant currency, although we're slightly behind on a reported basis. and our free cash flow conversion which Colm will talk to a little bit later on was strong at almost 90%. The business produced a very balanced performance with challenging operations in a number of markets which I'll touch on in a second but growth in Latin America, growth within our animal nutrition business and our living landscapes businesses, balanced softer European agricultural markets particularly in our farmer facing agribusinesses in the UK, in Poland and in Romania. We continued with our strategic progress on growing the living landscapes division. A combination of organic growth and prior year acquisitions saw the living landscapes business grow EBIT by 10% on a constant currency basis, roughly 50% coming from each of organic and acquired growth continuing to broaden the overall earnings base of the group and our financial position remains strong at year end and again Colm will talk to those metrics later on. So the breadth of the business and the continued investment in the second core of Living Landscapes has meant that the group has made significant progress over the last five years and we've just concluded our Five year strategic cycle from 22 to 26 with a very resilient performance and a significant uplift in profit over that cumulative five year period versus the prior five year period. Some of the challenges and backdrop to what we faced in the last 12 months with significant drought and difficult cropping conditions across European agriculture. Farm Economics remain very challenged, whether it's the cereal sector, whether you're growing oilseeds or indeed in dairy production, profitability on farm is significantly lower this year than it has been in previous years and that hasn't helped because we've had significant input cost inflation particularly in fertilizer markets as a result of the conflict in Iran, the Straits of Hormuz and the various impacts that that's had on global pricing of fertilizers and the impact that we've had on oil markets generally is all played into a difficult time on farm for our customers. There continues to be significant sector consolidation and a number of exits in the market particularly in Poland and Romania we're seeing competitors go out of business and we're seeing Court Actions in terms of insolvency proceedings and in Latin America we've got a significant number of insolvencies the overall default rate on bank debt in the Latin American market is now well above 15% and the previous high for defaults in the sector was running at about 6% so a huge amount of turmoil within our competitor base and to an extent within our customer base across the Latin American and European markets that we're playing in. Despite that though, we're seeing volume growth, continued growth in production and a continued move towards speciality nutrition, biological products and products that are typically at the higher end of the margin scale, particularly in Latin America. Our living landscapes business saw continued structural market growth and as I said earlier on a combination of organic growth and contribution from acquisitions saw that business grow in 2026. So we'll touch firstly on agriculture and the overall contribution from agriculture is slightly a hedge year on year when you include the feed contribution from our associates and joint venture partners, operating margin slightly down across pretty much all of our businesses with the exception of Latin America where we saw a small increase in operating margin and we have had lower profitability from both our Ireland UK segment and our continental European segment reflecting those challenges on farm and some of the dry conditions which restricted the need for farmers to apply products particularly in the latter part of the financial year so that final quarter significant dry conditions meant that farmers were not applying product to the extent that they normally would. Our market share in sustainable agronomy continues to be strong, number one player in the UK, number two in Romania where we've grown our market share in the last 12 months from 12% to 15% and we could be growing that far more aggressively but we're being cautious given the credit market in Romania about the extent to which we want to grow market share there and number three in Poland again small growth in market share in Poland we may see that grow a little bit more in FY27 but again being cautious trying to focus on speciality higher margin products rather than the commodity end of the business in soil nutrition the business saw reduced volume typically Our Ireland and UK businesses, given the price increases and raw material inflation that we experienced, saw reduced volume of about 10% versus the previous year. And our Brazilian business continues to grow, a top five player in Brazil now with a 5% market share. And on the island of Ireland, our animal nutrition business continues to have a circa 50%. to get into a little bit more detail on Ireland and UK you can see that with the exception of the 2022 year which was a very unusual year with significant profitability from our fertilizer businesses given the price inflation that occurred and the shutting off of Russian supply into the European market We've returned to a pretty mean average across the Ireland and UK businesses and that's despite a very sharp fall in profitability within our agri-UK business Our agronomy business despite increased winter activity in the overall winter cropping base did grow in winter wheat to 1.7 million hectares and we had an extensive growth in the oilseed rape area last autumn as well. But the dry spring and summer reduced crop development, reduced yields and also resulted in crop protection demand falling quite significantly. So the tail end and Q4 of the business saw reduced demand. Farm economics, profitability of farmers also Controlled I suppose the overall spend by farmers certainly reducing fertilizer spend within the business and within the agribusiness Our soil nutrition business saw a good performance Good procurement and inventory management through the period CBAM was introduced within the Irish marketplace on the 1st of January this year and will be introduced on the 1st of January in the UK So managing supply and managing inventory in that context was hugely important and there was huge disruption to fertilizer availability not just that coming from the Gulf but a number of core raw materials also go from the Gulf to Morocco to produce additional fertilizers and a lot of that was constrained so managing supply in that kind of dynamic was difficult but our teams managed it very well. From an animal nutrition perspective, huge demand across the feed businesses. Our associates and joint venture contribution was up significantly in the period and demand was very strong right through to the end of the year and into the first quarter of this year as a result of fodder shortage, particularly within the Irish marketplace. So there is a need for farmers to continue to supplement Feed as a result of the dry weather and we're experiencing very strong demand and our competitors are experiencing very strong demand as a result of that. Across continental Europe overall volume was up by just under 3% but there was a real mix in how that volume played out within our Polish business fertilizer and seed volumes. were down but crop protection volumes were up and spend on farm was again constrained by farm profitability. Within Romania we're seeing a continued move and migration to winter cropping within the Romanian market. Planting spring cropping now with increased instances of dry weather for summer periods We saw strong volume growth in seed, crop protection and fertilizer, all because of those market share gains that I pointed out earlier on. and the very challenging situation that a lot of our competitors in the Romanian market are finding themselves in. We have had to take higher credit risk provisions ourselves because of some of the farm economics and some of the challenges of historical debt but despite that we are seeing increased growth within our market share and profit slightly down because of those higher credit risk provisions. We've also launched a couple of additional adjuvant products in the Romanian market for autumn of 2026 which you can see in the bottom of the page there. And then finally moving to Latin America within the agriculture businesses again we saw strong growth in constant currency operating profit was up by about nine percent and for once we saw the Brazilian Rai move in our favour so operating profit on a reported basis grew by a slightly higher 12.5%. The business is seeing continued growth in all product categories. We had volume growth of 4.3% and that was broad-based. Pretty much every product category that we were involved in saw growth. There is significant pressure on the competition and across our customer base and we did have additional bad debt charges in the Brazilian market included in this operating profit figure so we would have shown a higher operating profit number had it not been for those bad debt charges but the business continues to grow very well and I mentioned the record level of sector bankruptcies earlier on. And again, you can see some of our new product launches on the bottom right hand side of the page there. So I'll hand over to TJ, who will run through our living landscapes business.

Thank you, Sean. Good morning, everybody. As Sean said, living landscapes is now a key pillar of Origin's diversification strategy. We're contributing approximately 20% of group operating profit and we would say our broad sports landscapes and environmental offerings do differentiate us in the market now and provide multiple growth opportunities through both expansion, service development and the longer term land use trends that we see. For FY26, Living Landscapes delivered another strong year, revenue increasing to 199 million euro and operating profit rising just over 7% to 17.7 million euro. maintaining a margin of 8.9% with growths driven by a combination of organic performance in part synergy led and also contributions from prior acquisitions. Looking at each of the components of the division, sports performed particularly well despite the challenging dry summer conditions supported by what was strong demand across immunity and sports markets. The successful integration of Elixir and the post year-end acquisition of Linemark International further strengthen our market reach and cross-selling opportunities. Linemark International is our Danish headquartered international distributor for our Linemark UK business and through that acquisition it presents us the opportunity to accelerate further our international growth trajectory. Landscapes was softer than the prior year which reflected a shorter tree planting season and reduced activity in some of the categories we serve, although long-term growth fundamentals remain positive. During the year within the landscapes businesses, we evolved the operating model moving from a business unit-led structure to a more commercially focused sector and portfolio-led one, therefore better aligning our sales and marketing functions with our key customers and segments. within environmental then we continue to grow strongly through a combination again of both organic and acquisition performance supported by infrastructure investment and an ever-evolving environmental regulatory backdrop the posterior end acquisition of lighthouse development consulting further enhances our planning services capability with a particular focus on renewables energy and infrastructure sectors During the year we continued investment in our people through selective external recruitment combined with leadership and technical training and in addition we have been investing in the implementation of a common ERP and project management solution for environmental businesses again key to supporting future organic and acquisition growth. As we look back then over the last five years Living Landscapes has delivered over 200 operating profits growth over that period establishing itself as I said as a significant second pillar of the group with a strong pipeline of organic and acquisition opportunities across sports landscapes and environmental sectors ranging from further distribution growth to potential further manufacturing capabilities being acquired and continuing growing our advisory businesses we are confident that the division is well positioned to expand further in higher margin and faster growing markets as we look to the future with that I'll hand it over to Colm