NUFARM LIMITED (NUF)



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General Information
Company Name: Nufarm Limited
Stock Code: NUF
Website: www.nufarm.com
GICS Sub-Industry: Fertilizers & Agricultural Chemicals
Market Cap ($M): 1,094
Equiv. Shares (M): 264

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 4.150 $ 4.140 $ 4.170 $ 4.100 $ 4.150 290,015 0%

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 27th Mar 2014
12 Month Target Price (average): $4.58
Brokers Surveyed: 7

Company Overview

Business Description:
Nufarm Limited (NUF) is a global crop protection company which develops, manufactures and sells a range of crop protection products, including herbicides, insecticides and fungicides. NUF sells its products in most of the world’s major agricultural regions, and operates primarily in the off-patent segment of the crop protection market. NUF operates along two business lines, being crop protection and seed technologies.

Strategy Analysis:
Focus is on patent-expired product, using superior formulation and marketing nous to innovate and differentiate product. NUF is increasing sales of non-glyphosate crop protection products and seed technology where margins are higher. While still small, the seeds business is expected to experience solid growth with acquisitions a possibility. In 2007 NUF made a small investment in glyphosate-manufacturing capacity in China to secure supply in an increasingly tight market. Over-supply has since developed. In 2010 Sumitomo acquired 20% of NUF, subsequently increased to 23%. The two companies will complement one another¬īs product portfolios and distribution reach. Nufarm reported NPAT down 53.5% to $8.39m for the half-year ended 31 January 2013. The impact of foreign exchange losses on financing activities (loss of $9.2m compared to a gain of $14.4m in previous period) was the major contributing factor to the lower statutory and underlying net profit outcomes. Revenues from ordinary activities were $934.41m, up 8.3% from the same period last year. Diluted EPS was 0.4 cents compared to 4.4 cents last year. The net operating cash outflow was $148.23m compared to an outflow of $71.06m in the pcp. The interim dividend declared was 3.0 cents in line with 3.0 cents last year.


Financial Summary
Year to Jul NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F 108.7 41.2 29.2 10.1 12.4 3.0 100.0
2014  F 84.1 31.9 20.7 13.0 9.6 2.3 100.0
2013  A 69.7 26.4 -31.6 19.8 8.0 1.5 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
Nufarm (NUF) $1,076 M -0.3312 0.1334 0.3389 15.5488 13.7189 10.2461 0.0196 0.0227 0.0299

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
NUF 0.59 14.4 0.77 0.62 0.48
Market 1.07 16.0 1.27 1.98 1.72
Sector 0.87 12.5 0.66 0.73 4.83

Directors
Name Position Start Date
Mr Doug J Rathbone Chief Executive Officer,Managing Director 21 August 1987
Mr Donald Gordon McGauchie Non-Executive Chairman 19 December 2003
Dr William Bruce Goodfellow Non-Executive Director 15 February 1991
Mr Peter Maxwell Margin Non-Executive Director 03 October 2011
Ms Anne Bernadette Brennan Non-Executive Director 10 February 2011
Mr Gordon Davis Non-Executive Director 31 May 2011
Frank Ford Non-Executive Director 10 October 2012
Mr Toshikazu Takasaki Non-Executive Director 06 December 2012

Management
Name Position
Paul Binfield Chief financial officer
Rodney Heath Company Secretary,Group General Manager Corporate Services
Brian Benson Group executive agriculture
Robert Reis Group executive corporate strategy and external affairs
Greg Hunt Group executive global marketing and business development
Dale Mellody Group executive global supply chain and strategic procurement
Bonita Croft Group executive human resources and organisation development
Mike Pointon Group executive innovation and development
Elbert Prado Group executive manufacturing

Substantial Shareholders
Holding Name
14,330,798 (5.47%) Amalgamated Dairies Ltd
14,692,730 (5.61%) Glade Buildings Ltd
14,679,639 (5.61%) Hauraki Trading Co. Ltd
14,349,658 (5.48%) The Khyber Pass Investment Co Limited
60,210,136 (23.00%) Sumitomo Chemical Company Limited
13,261,120 (5.04%) Paradice Investment Management Pty Ltd
14,711,590 (5.62%) PG Keeling & EW Preston
60,210,136 (23.00%) Nufarm Limited

Calendar of Events
Date Event
25 March 2015 Report (Interim)
27 October 2014 Report (Annual)
24 September 2014 Report (Prelim)
09 May 2014 Div Pay Date
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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