Announcement

GENERAL: NFF: Update on first half earnings 11:18a.m. 
NFF  
17/01/2020 11:18  
GENERAL  
PRICE SENSITIVE  
REL: 1118 HRS Nufarm Finance (NZ) Limited  
 
GENERAL: NFF: Update on first half earnings  
 
On 25 November 2019 Nufarm advised that earnings for the half year ending 31  
January 2020 were expected to be significantly lower than the prior  
comparative period.  
 
With an additional two months of trading performance now available, Nufarm is  
able to provide an estimate of earnings before interest, tax, depreciation  
and amortisation, which is expected to be in the range of $55 million to $65  
million for the first half of FY20.  
 
While Nufarm will report actual first half financial results for FY20 on 25  
March 2020, the following observations of market conditions and trading  
performance for the year to date have informed the estimate of first half  
earnings.  
 
South America  
Sales growth has continued in South America, particularly in Brazil, however  
margins have continued to be impacted by strong competition. Some additional  
costs have been incurred in preparation for the launch of new products in the  
coming years and earnings before interest, tax, depreciation and amortisation  
are expected to be slightly lower than the prior comparative period.  
 
North America  
In the market update on 25 November 2019, we advised industry-wide weak  
demand for crop protection products in North America had impacted earnings in  
the first quarter by approximately $20 million and this has not been  
mitigated in the second quarter. While there are positive signs for the  
spring planting season markets remain competitive and we are observing a  
shift in customer purchasing intentions to in-season rather than in advance  
of the planting season. Our expectation is for earnings from the North  
American business to be more heavily weighted toward the second half of the  
year compared to the prior comparative period.  
 
Europe  
Sales in Europe have increased however higher raw material costs and strong  
market competition during the Autumn sales period impacted margins. Increased  
sales, marketing and logistics costs have also been incurred with increased  
resources put in place over the past year to service the needs of the larger  
portfolio. Europe's cost base will be more fully leveraged in the second half  
of the year when the majority of sales are generated, but the segment is  
expected to record a loss before interest, tax, depreciation and amortisation  
in the first half. This reporting period will include $9 million of  
additional rebates as advised in the market update on 25 November 2019.  
 
Australia and New Zealand  
In Australia we have experienced a significant reduction in sales due to a  
continuation of extreme climatic conditions. The impact of this has been  
partially offset by savings from the performance improvement program  
commenced last year. While there is some potential for increased sales in the  
remainder of the first half of the financial year due to recent and forecast  
rainfall, it is expected the Australia and New Zealand segment will record a  
loss before interest, tax, depreciation and amortisation for the first half.  
 
Asia  
Sales and earnings before interest, tax, depreciation and amortisation in  
Asia are expected to be lower than the prior comparative period due to  
difficult climatic conditions and high inventory levels at the customer level  
constraining demand.  
 
Seed Technologies  
Earnings in the Seed Technologies segment are expected to be slightly lower  
than the prior comparative period primarily due to a ramp up in omega-3  
commercialisation activities and additional costs to support the new carinata  
business.  
Sale of South American businesses  
 
The necessary filings for Brazilian competition regulatory approval were made  
in late December 2019 and these are currently being considered by the  
regulator. Completion of the transaction is expected to occur in the second  
half of FY20, subject to regulatory approval.  
 
-- End --  
 
Investor and media contact:  
Nerida Mossop  
nerida.mossop@nufarm.com  
+61 437 361 433  
End CA:00347243 For:NFF Type:GENERAL Time:2020-01-17 11:18:25  

Click here to view related attachments.