E X P A N D I N G O U R G R O W T H P L A T F O R M JULY 2015

Transcription

1 E X P A N D I N G O U R G R O W T H P L A T F O R M JULY

2 SAFE HARBOUR STATEMENT Certain statements contained herein constitute forward-looking statements that reflect our expectations regarding the future growth, results of operations, performance, business prospects, and opportunities of the Company. Forward-looking statements may contain such words as anticipate, believe, continue, could, expects, intend, plans, will or similar expressions suggesting future conditions or events. Such forward-looking statements reflect our current beliefs and are based on information currently available to us. Forwardlooking statements involve significant risks and uncertainties. A number of factors could cause actual results to differ materially from results discussed in the forward-looking statements, including changes in national and local business conditions, crop yields, crop conditions, seasonality, industry cyclicality, volatility of production costs, commodity prices, foreign exchange rates, and competition. These risks and uncertainties are described under Risks and Uncertainties in our Annual Report and our Annual Information Form. Although the forward-looking statements contained herein are based on what we believe to be reasonable assumptions, we cannot assure readers that actual results will be consistent with these forward-looking statements and we undertake no obligation to update such statements except as expressly required by law. 2

3 CORPORATE OVERVIEW

4 CORPORATE OVERVIEW HEADQUARTERS Winnipeg, Manitoba HISTORY Founded in 1996; IPO 2004 (TSX: AFN) MARKET CAP ~$670M TOTAL SALES Pro Forma Fiscal 2014 $600 million EMPLOYEE COUNT 2000 employees MANUFACTURING DIVISIONS Total of 15 facilities and 1.6M combined sq.ft. manufacturing capacity located in Canada, USA & Europe 4

5 VISION: To Be the Global Leader in Grain Handling, Storage and Conditioning Solutions S T R A T E G Y : Focused catalogue expansion, acquiring leading brands to provide complete grain handling, storage and conditioning solutions Geographic diversification to provide growth in emerging markets, mitigate regional weather, economic and political risks Committed to Lean and capital investment in capacity and productivity 5

6 CORPORATE OVERVIEW Service all key grain handling segments FARM ELEVATOR EXPORT PORT DESTINATION PORT PROCESSOR 6

7 7 AGI HISTORY

8 8

9 KEY DEMAND DRIVERS Crop Production Volume Harvest Conditions Storage Practices Infrastructure Gap 9

10 EXPANDING GROWTH POTENTIAL

11 WESTEEL TRANSACTION PURCHASE PRICE $205M net of cash & redundant asset TRAILING EBITDA (1) $20M 2014E including corporate cost adjustments SYNERGIES Anticipated near term annual synergies of approximately $5M R E V E N U E A D J U S T E D E B I T D A A N D E B I T D A M A R G I N (1) $151.7 $125.3 $142.7 $155.5 $140.9 $ % $ % 11.8% $14.0 $ % $ % 8.8% $17.4 $ E Adj. Reported EBITDA EBITDA Margin Historical periods based on Westeel reported EBITDA per financial disclosure (1) See "Forward Looking Statements" and "Non-IFRS Measures" (2)

12 COMPLEMENTARY GEOGRAPHIES Canada Central & Western Europe RUK U.S. Middle East / North Africa Latin America Australia / New Zealand 12

13 INTERNATIONAL GROWTH OPPORTUNITIES The international grain storage deficit creates significant short and long term growth Provides scale to compete against large international players C Z E C H R E P U B L I C More robust catalogue enhances ability to provide customers with complete storage and handling solutions Co-ordinated effort leveraging regional assets U K R A I N E 13

14 REVENUE SYNERGIES Progress Key Actions Smoothwall bin growth 5% Increase smoothwall bin capacity Regional expansion driven by transportation constraints Catalogue bundling opportunities 25% Product Development 30% Batco under bin for seed systems launched Programmed selling of full seed and fertilizer catalogue Target seed and fertilizer build out at farm and retail Expand Smoothwall & galvanized bin product line Launch new complementary handling equipment products International 20% U.S. bin sales 5% Integrate International Sales strategy Expand geographic reach for AGI Combine Westeel US sales with AGI commercial and farm sales teams tap into existing network of customers and dealers 14

15 COST SYNERGIES Progress Organizational Redesign 65% Outsourcing & Production 15% Key Actions Align Westeel organizational structure to fit AGI Sales, marketing, finance, IT, purchasing, operations & engineering changes Bring outsourced parts in-house Standardize design, engineering, production, parts and product lines Integrate steel purchase Implement AGI Lean culture Cost Management 20% Align IT & ERP, travel, sales and marketing expenditures Purchasing 25% Leverage purchasing power of combined entity 15

16 OUTLOOK

17 CANADIAN OUTLOOK Lack of moisture in majority of growing regions increasing the likelihood of significant crop damage Unlikely that sufficient moisture will be received in next few weeks to produce average yields Impacts all on-farm business lines including storage, aeration and portable grain handling 17

18 U.S. OUTLOOK Cautious buying behaviour continues as dealers and farmers sit on sidelines waiting for indications of favourable crop development Crop conditions generally favourable, however USDA ratings have declined in recent weeks Pace of commercial business improved subsequent to Q1 but market not at 2014 levels Expectations remain for a good crop which will drive demand for portable grain handling equipment 18

19 WESTEEL: GEOGRAPHIC BALANCE 2014 R E V E N U E B Y G E O G R A P H Y S TA N D A L O N E C O M B I N E D AGI 19% 55% 26% 17% 44% 39% Westeel 12% 5% 83% Canada U.S. International 19

20 PORTABLE GRAIN HANDLING Portable grain handling has a higher level of concentration in the US market Portable grain handling represents our highest margin product line Strongest network of warehouse and stock point locations in the industry allowing us to manage inventory levels and position ourselves for in season demand PORTABLE GRAIN HANDLING Portable Grain Handling by Geography 68% 2% 30% Canada US Int 20

21 INTERNATIONAL Stronger start to international business in Sales plus order backlog at March 31, 2015 of $55M (2014- $38M) Greater geographic diversification as secondary markets gain traction Anticipate year over year growth Remain positive regarding long term infrastructure gap 21

22 INTERNATIONAL BUSINESS & OUTLOOK

23 INTERNATIONAL STRATEGY R O M A N I A Target large corporate farms and multinational grain traders Well capitalized Multi-year CAPEX spends EDC insured Bundled sales, leveraging catalogue Repeat business confirms sustainability U K R A I N E 23

24 RUSSIA AND UKRAINE Sales commenced in 2011: $11M $27M $57M $37M Short term challenges RUK 185 M Hectares Continue to sell, ship and quote new projects Multi National Companies still investing Strong long term potential USA 174 M Hectares 24

25 LATIN AMERICA Significant infrastructure opportunity Tariff free (ex-brazil) compete effectively from North America AGI dedicated personnel 2012 Awarded five major projects in 2014 totalling approx. $20 million L A T I N A M E R I C A 25

26 BRAZIL OPPORTUNITY Less than 15% on farm storage capacity Historical lack of investment in infrastructure Lack of rail or inland waterway options Road transport costs significantly higher than ROW Antiquated, inefficient port facilities Organic entry into market 26

27 BRAZIL PROGRESS Team of five led by Wilfried Toth, former leader of Kepler Weber Continue to explore M&A as we enter the market organically Commercial: Focus on the commercial business with port and inland facilities Leverage AGI s North American relationships and brand strength Farm: Early stage development of portable grain handling business Lower cost alternative to existing permanent grain handling solution offered in Brazil 27

28 28 E X P A N D I N G O U R G R O W T H P L A T F O R M