Origin Enterprises (OIZ) H2 2024 earnings summary

Executive summary

• Delivered resilient full-year performance at the upper end of expectations, with strong volume growth in all geographies and continued diversification through Living Landscapes, now 14.2% of group operating profit, up from 12% last year.

• Strategic capital allocation included €38.5 million returned to shareholders and investments in M&A, with a strong balance sheet and net debt/EBITDA ratio below 1x.

• Strong Q4 performance and late season applications helped offset earlier weather impacts.

Financial highlights

• Group revenue declined 18% year-over-year to €2,045.7 million, mainly due to a 26% pricing impact from deflation, partially offset by 7.8% volume growth and 1.2% from acquisitions.

• Operating profit was €83.5 million, down 8.7% year-over-year, but operating margin improved by 40 basis points to 4.1%.

• Adjusted EPS was €0.4806, at the upper end of guidance, down 10.3% year-over-year.

• Free cash flow for the year was €6.2 million, impacted by working capital and sanction payments, but three-year cumulative free cash flow conversion is 115%.

• ROCE at 11.2%, below the 12-15% target range.

Outlook and guidance

• Expect continued working capital outflow in FY 2025 due to remaining sanction payments and investment to support trading activity.

• Strategic CapEx to continue, especially in specialist product areas, digital infrastructure, and expansion in Living Landscapes.

• Living Landscapes targeted to reach 30% of group operating profit by FY 2026, with 20% from organic growth and 10% from M&A.

• Focus remains on disciplined capital allocation, margin-accretive organic and M&A growth, and further diversification of earnings.

• Farm sentiment remains subdued, especially in the UK and Brazil, due to low crop prices and challenging weather.