Origin Enterprises
plc
Q3 Trading
Update
Full year adjusted diluted
EPS guidance of between 45 and 48 cent
Dublin, London, 13 June 2024.
Origin Enterprises plc ('Origin' or 'the Group'), the international
Agri-Services group, providing specialist agronomy advice, crop
inputs and digital solutions to promote sustainable land use, today
issues its FY24 Trading Update for the three months ('Q3') and nine
months ended 30 April 2024.
Highlights and Outlook
- Adverse
weather and challenging in-field conditions continued into the
early part of Q3, resulting in a reduced spring cropping area in
the UK, and delayed applications across Ireland, the UK and
Europe
- Group
revenue decreased by 20.7% to €1.5 billion year-to-date, reflecting
a volume increase of 5.7% more than offset by significantly lower
global feed and fertiliser raw materials pricing
- The
pace of revenue decline slowed in Q3 to just 9.8% reflecting
improved feed and fertiliser volumes. Crop protection volumes
showed modest improvement in the third quarter, driven primarily by
Continental Europe, but pricing remained weak. Ongoing high
disease pressure is encouraging late season application
- Performance
from acquisitions in our Amenity, Environment and Ecology business
has been in line with expectations
- Completion
and commissioning of the Group’s FoliQ foliar fertiliser plant in
Poland
- Appointment
of Colm Purcell as the Group’s new Chief Financial Officer,
effective from 15 July 2024
- TJ
Kelly, Group CFO, will take up the newly established position of
Divisional Managing Director of Amenity, Environment and Ecology on
1 August 2024 and will continue as an Executive Director of the
Board
- €20
million share buyback programme approximately 77%
completed
- Full
year adjusted diluted EPS guidance of between 45 and 48
cent
Revenue Summary
Group revenue for year-to-date and
Q3, compared to the prior period, is as follows:
Group Revenue - YTD
|
YTD FY24
€'m
|
YTD
FY23
€'m
|
Variance
%
|
Underlying1
%
|
Constant
Currency2
%
|
|
|
|
|
|
|
Ireland / UK
|
955.4
|
1,242.9
|
(23.1%)
|
(25.8%)
|
(24.1%)
|
Continental Europe
|
310.7
|
398.4
|
(22.0%)
|
(23.4%)
|
(23.4%)
|
Latin America
|
113.0
|
104.4
|
8.1%
|
7.1%
|
7.1%
|
Total Agronomy and Inputs
|
1,379.1
|
1,745.7
|
(21.0%)
|
(23.3%)
|
(22.0%)
|
Crop Marketing
|
144.9
|
175.2
|
(17.2%)
|
(22.6%)
|
(22.6%)
|
Total Group
|
1,524.0
|
1,920.9
|
(20.7%)
|
(23.2%)
|
(22.1%)
|
1 Excluding currency movements and the contribution of
acquisitions
2 Excluding currency movements
|
|
|
|
|
|
|
|
|
|
|
|
|
Group Revenue - Q3
|
Q3 FY24
€'m
|
Q3
FY23
€'m
|
Variance
%
|
Underlying1
%
|
Constant
Currency2
%
|
|
|
|
|
|
|
Ireland / UK
|
439.2
|
489.6
|
(10.3%)
|
(13.4%)
|
(12.0%)
|
Continental Europe
|
171.8
|
175.4
|
(2.1%)
|
(4.1%)
|
(4.1%)
|
Latin America
|
18.2
|
14.9
|
22.5%
|
17.7%
|
17.7%
|
Total Agronomy and Inputs
|
629.2
|
679.9
|
(7.5%)
|
(10.4%)
|
(9.3%)
|
Crop Marketing
|
39.9
|
61.6
|
(35.2%)
|
(40.7%)
|
(40.7%)
|
Total Group
|
669.1
|
741.5
|
(9.8%)
|
(12.9%)
|
(11.9%)
|
1 Excluding currency movements and the contribution of
acquisitions
2 Excluding currency movements
|
|
|
|
|
|
|
|
|
|
|
|
|
Group revenue for the nine months
ended 30 April 2024 was €1.5 billion, a decrease of 20.7%
year-on-year on a reported basis and 22.1% on a constant currency
basis.
Excluding crop marketing, Group
revenue decreased by 21.0%. On a constant currency basis, revenue
declined by 22.0% primarily due to price reductions of 29.0%,
reflecting the anticipated correction in global feed and fertiliser
raw materials pricing. This was partially offset by an increase in
volumes of 5.7% and an additional 1.2% revenue contribution from
acquisitions.
Reported Group revenue was €669.1
million for Q3, a reduction of 9.8% on Q3 FY23 (11.9% on a constant
currency basis). The adverse weather and in-field conditions
experienced in H1 persisted into Q3, delaying on-farm
activities. Increased feed and fertiliser volumes in the
quarter were supported by lower price levels when compared to the
same period in FY23.
Ireland and the UK reported a
reduction in revenue of 23.1% to €955.4 million year-to-date, while
Q3 saw a 10.3% reduction in reported revenue to €439.2 million. On
a year-to-date basis, underlying volumes increased by 3.8% (Q3:
18.5%).
Total autumn and winter cropping is
estimated at 1.9 million hectares, 25.8% lower than last year, with
combined spring and winter plantings expected to be 8.5% lower at
3.9 million hectares. Persistent rainfall throughout the early part
of Q3 further reduced the winter cropping area and delayed spring
planting activity.
Late drilling and poor ground conditions resulted in reduced
expenditures on crops in the third quarter, however ongoing disease
pressure is resulting in strong late season volumes. The reduced
cropping area resulted in lower volumes for our Integrated On-Farm
Agronomy Services.
Business-to-Business Agri-Inputs
recorded reduced revenues year-to-date, however, Q3 saw a strong
volume performance supported by lower global fertiliser raw
material pricing. The Group's feed business benefitted from the
challenging in-field conditions seen during Q3.
The Group's Amenity, Environmental and Ecology
business delivered a good result year to date, recording increased
revenues and operating profit compared to the prior year. The
result reflected a positive operating profit from the Group's
recent acquisitions in this sector.
In Continental
Europe, reported revenue reduced by 22.0% to €310.7 million
year-to-date, while Q3 saw a 2.1% reduction in reported revenue to
€171.8 million. Despite cautious farm sentiment and raw material
price uncertainty causing delayed on-farm purchasing decisions in
the first half of the year, there was notable catch-up activity in
Q3. Underlying volumes, excluding crop marketing volumes, increased
15.9% in Q3 and 3.6% year-to-date.
In Poland, crop establishment to
date is satisfactory. While crop development in some areas was
impacted by unseasonably cold weather, followed by a lack of
rainfall and high temperatures, the total cropping area is expected
to be broadly equivalent to last year at 9.0 million
hectares. The completion and commissioning of the new FoliQ
foliar fertiliser plant occurred during the quarter, with a ramp up
of production now underway.
In Romania, crop establishment has
been satisfactory to date, despite some challenges presented by dry
conditions in the south and south-east. Combined winter and spring
plantings for the growing season are currently forecasted to align
with last year at 8.4 million hectares.
Latin America
recorded a 36.1% increase in underlying business volumes
year-to-date (57.5% increase in Q3). Year-to-date revenues were
€113.0 million, a 7.1% increase on a constant currency basis. Q3
revenue was €18.2 million, a 17.7% increase on a constant currency
basis, as the favourable volume performance year to date and in Q3,
was partially offset by reduced fertiliser
pricing.
The sustained volume growth by our
Brazilian business is driven by continued investment in the sales
organisation and operations infrastructure, leading to strong
growth across all product portfolios.
In the broader market context,
Brazil's principal crop, soya is expected to increase its cropping
area by 4% to 45.4 million hectares. However, due to a hot and dry
growing season, the expected soya harvest is currently estimated to
be 148.5 million tonnes, down from the 154.6 million tonnes in the
prior year. The total production for Brazil's second corn
crop, known as 'safrinha', is forecasted to decrease by 9.4% to
119.5 million tonnes due to a reduction in planted area, coupled
with lower projected yields.
Progress of Share Buyback Programme
On 21 November 2023 the Group
commenced a share buyback programme to repurchase up to €20.0
million of ordinary shares. The programme is progressing to plan
and is currently approximately 77% complete.
Current Trading and Full Year Outlook for
FY24
While trading conditions have been
particularly challenging through FY24, the strategic focus to
diversify the Group's portfolio is demonstrating the resilience of
our earnings base, as reflected in our FY24 earnings guidance of 45
- 48 cent adjusted diluted EPS. The Group remains well on track to
deliver the cumulative profit and cash generation and other
operational targets, for the period FY2022 to FY2026, as outlined
at the 2022 Capital Markets Day.
Preliminary Results for FY24 will be
announced on 24 September 2024.
ENDS
Enquiries
Origin Enterprises plc
|
|
|
Brendan Corcoran
|
|
|
Head of Investor Relations
|
Tel:
|
+353 (0)1 563 4900
|
|
|
|
Goodbody (Euronext Growth Listing
Sponsor)
|
|
|
Joe Gill
|
Tel:
|
+353 (0)1 641 9278
|
|
|
|
Davy (Nominated Adviser)
|
|
|
Anthony Farrell
|
Tel:
|
+353 (0)1 614 9993
|
|
|
|
Berenberg (Corporate Broker)
|
|
|
Clayton Bush / Richard Bootle / Patrick Dolaghan
|
Tel:
|
+44 (0)20 3207 7800
|
|
|
|
FTI Consulting (Communications
Advisers)
|
|
|
Jonathan Neilan / Patrick Berkery /
Niamh O'Brien
|
Tel:
|
+353 (86) 602 5988
|
About Origin Enterprises plc
|
Origin Enterprises plc is an
international Agronomy-Services group, providing specialist advice,
inputs, services and digital solutions to promote sustainable land
use. The Group has leading market positions in Ireland, the United
Kingdom, Brazil, Poland and Romania. Origin is listed on the
Euronext Growth (Dublin) and AIM markets of the Irish and London
Stock Exchanges.
|
|
Euronext Growth (Dublin) ticker
symbol: OIZ
|
AIM ticker symbol:
OGN
|
Website:
www.originenterprises.com
|