ORIGIN ENT. PLC (OIZ) Q4 2026 Earnings Call Transcript

Good morning ladies and gentlemen and welcome to the Origin Enterprises PLC 2026 preliminary results. Just a reminder that this call is being webcast live on the internet and the presentation is available to view on the Origin website. I will now pass over to Sean Coyle, CEO of Origin Enterprises PLC. Please go ahead sir.

Thank you and good morning everyone. I'm joined this morning by Colin Purcell, our CFO, TJ Kelly, the Divisional Managing Director of our Living Landscapes business, and Brendan Corcoran, our Head of Investor Relations. We're delighted this morning to be bringing you a very resilient set of operating numbers, particularly given the context of the challenges that the business has faced over the last 12 months we'll start firstly with the normal safe harbor declaration so the business produced an increased overall group operating profit number of just over 100 million euro growth in constant currency of just under 3% we also grew earnings per share in the period in constant currency although we're slightly behind on a reported basis and our free cash flow conversion which colin will talk to a little bit later on was strong at almost 90 percent the business produced a very balanced performance with challenging operations in a number of markets which i'll touch on in a second but growth in latin america growth within our animal nutrition business and our living landscapes businesses balanced softer european agricultural markets particularly in our farmer-facing agri-businesses in the UK, in Poland, and in Romania. We continued with our strategic progress on growing the Living Landscapes division. A combination of organic growth and prior year acquisitions saw the Living Landscapes business grow EBIT by 10% on a constant currency basis, roughly 50 percent coming from each of organic and acquired growth continuing to broaden the overall earnings base of the group and our financial position remains strong at year-end and again column will talk to those metrics later on so the breadth of the business and the continued investment in the second core of living landscapes has meant that the group has made significant progress over the last five years and we've just concluded our five-year strategic cycle from 22 to 26 with a very resilient performance and a significant uplift in profit over that cumulative five-year period versus the prior five-year period some of the challenges and backdrop to what we faced in the last 12 months with significant drought and difficult cropping conditions across european agriculture farm economics remain very challenged you know whether it's the cereal sector whether you're growing oil seeds or indeed in dairy production profitability on farm is significantly lower this year than it has been in previous years and that hasn't helped because we've had significant input cost inflation particularly in fertilizer markets as a result of the conflict in Iran, the Straits of Hormuz, and the various impacts that that's had on global pricing of fertilizers and the impact that we've had on oil markets generally has all played into a difficult time on farm for our customers. There continues to be significant sector consolidation and a number of exits in the market, particularly in Poland and Romania. We're seeing competitors go out of business. We're seeing court actions in terms of insolvency proceedings and in Latin America we've got a significant number of insolvencies. The overall default rate on bank debt in the Latin American market is now well above 15% and the previous high for defaults in the sector was running at about 6% so a huge amount of turmoil within our competitor base and to an extent within our customer base across the Latin American and European markets that we're playing in. Despite that though we're seeing volume growth, continued growth in production and a continued move towards speciality, nutrition, biological products and products that are typically at the higher end of the margin scale particularly in Latin America. Our Living Landscapes business saw continued structural market growth and as I said earlier on a combination of organic growth and contribution from acquisitions saw that business grow in 2026. So we'll touch firstly on agriculture and the overall contribution from agriculture is slightly a hedge year on year when you include the feed contribution from our associates and joint venture partners, operating margin slightly down across pretty much all of our businesses, with the exception of Latin America, where we saw a small increase in operating margin. And we have had lower profitability from both our Ireland UK segment and our continental European segment, reflecting those challenges on farm and some of the dry conditions which restricted the need for farmers to apply products particularly in the latter part of the financial year so that final quarter significant dry conditions meant that farmers were not applying product to the extent that they normally would. Our market share in sustainable agronomy continues to be strong number one player in the UK number two in Romania where we've grown our market share in the last 12 months from 12% to 15% and we could be growing that far more aggressively but we're being cautious given the credit market in Romania about the extent to which we want to grow market share there and number three in Poland again small growth in market share in Poland we may see that grow a little bit more in FY27 but again being cautious trying to focus on speciality higher margin products rather than the commodity end of the business in soil nutrition the business saw reduced volume typically our Ireland and UK businesses given the price increases and raw material inflation that we experienced saw reduced volume of about 10% versus the previous year. And our Brazilian business continues to grow a top five player in Brazil now with a 5% market share. And on the island of Ireland, our animal nutrition business continues to have a circa 50% market share, so a strong market position overall. To get into a little bit more detail on Ireland and UK, you can see that with the exception of the 2022 year, which was a very unusual year with significant profitability from our fertilizer businesses given the price inflation that occurred and the shutting off of russian supply into the european market we've returned to a pretty mean average across the ireland uk businesses and that's despite a very sharp fall in profitability within our agri uk business our agronomy business despite increased winter activity in the overall winter cropping base did grow and winter wheat to 1.7 million hectares and we had an extensive growth in the oil seed rape area last autumn as well but the dry spring and summer reduced crop development reduced yields and also resulted in crop protection demand falling quite significantly. So the tail end and Q4 of the business saw reduced demand. Farm economics, profitability of farmers also controlled I suppose the overall spend by farmers certainly reducing fertilizer spend within the business and within the agri business our soil nutrition business saw a good performance good procurement and inventory management through the period cbam was introduced within the irish marketplace on the 1st of january this year and will be introduced on the 1st of january in the uk so managing supply and managing inventory in that context was hugely important and there was huge disruption to fertilizer availability not just that coming from the gulf but a number of core raw materials also go from the gulf to morocco to produce additional fertilizers and a lot of that was constrained so managing supply in that kind of dynamic was was difficult but our teams managed it very well from an animal nutrition perspective huge demand across the feed businesses our associates and joint venture contribution was up significantly in the period and demand was very strong right through to the end of the year and into the first quarter of this year as a result of fodder shortage particularly within the irish marketplace so there is a need for farmers to continue to supplement feed as a result of the dry weather and we're experiencing very strong demand and our competitors are experiencing very strong demand as a result of that across continental europe overall volume was up by just under three percent but there was a real mix in how that volume played out within our polish business fertilizer and seed volumes were down but crop protection volumes were up and spend on farm was again constrained by farm profitability within Romania we're seeing a continued move and migration to winter cropping within the Romanian market. Planting spring cropping now with increased instances of dry weather for summer periods means that the crop itself becomes under risk if it hasn't established and rooted properly over the winter period. So we've moved from roughly a 60-40 spring to winter cropping scenario to over 50% now in winter cropping in a Romanian context. We saw strong volume growth in seed, crop protection and fertilizer, all because of those market share gains that I pointed out earlier on and the very challenging situation that a lot of our competitors in the Romanian market are finding themselves in. We have had to take higher credit risk provisions ourselves because of some of the farm economics and some of the challenges of historical and death but despite that we are seeing increased growth within our market share and profit slightly down because of those higher credit risk provisions we've also launched a couple of additional adjuvant products in the Romanian market for autumn of 2026 which you can see in the bottom of the page there and then finally moving to Latin America within the agriculture businesses again we saw strong growth in constant currency operating profit was up by about nine percent and for once we saw the Brazilian ray I move on our favor so operating profit on a reported basis grew by a slightly higher twelve point five percent the business is seeing continued growth in all product categories we had volume growth of 4.3% and that was broad based. Pretty much every product category that we were involved in saw growth. There is significant pressure on the competition and across our customer base and we did have additional bad debt charges in the Brazilian market included in this operating profit figure. So we would have shown a higher operating profit number had it not been for those bad dead charges but the business continues to grow very well and i mentioned the record level of sector bankruptcies earlier on and again you can see some of our new product launches on the the bottom right hand side of the page there so i'll hand over to tj who'll run through our living landscapes business thank you sean good morning everybody as sean said living landscapes is now a key pillar of origins diversification strategy we're contributing approximately 20 percent of group operating profit and we would say our broad sports landscapes and

environmental offerings do differentiate us in the market now and provide multiple growth opportunities through both expansion service development and the longer term land use trends that we see for fway 26 living landscapes delivered another strong year revenue increasing to 199 million euro an operating profit rising just over seven percent to 17.7 million euro maintaining a margin of 8.9 percent with growths driven by a combination of organic performance in part synergy led and also contributions from prior acquisitions looking at each of the components of the division sports performed particularly well despite the challenging dry summer conditions supported by what was strong demand across amenity and sports markets the successful integration of Elixir and the post year-end acquisition of line mark international further strengthen our market reach and cross-selling opportunities line mark international is our Danish headquartered international distributor for our line mark UK business, and through that acquisition, it presents us the opportunity to accelerate further our international growth trajectory. Landscapes was softer than the prior year, which reflected a shorter tree planting season and reduced activity in some of the categories we serve, although long-term growth fundamentals remain positive. During the year within the Landscapes businesses, we evolved the operating model, moving from a business unit-led structure to a more commercially focused sector and portfolio led one therefore better aligning our sales and marketing functions with our key customers and segments within environmental then we continue to go strongly through a combination again of both organic and acquisition performance supported by infrastructure investment and an ever-evolving environmental regulatory backdrop the posterior acquisition of lighthouse development consulting further enhances our planning services capability with a particular focus on the renewables energy and infrastructure sectors during the year we continued investment in our people through selective external recruitment combined with leadership and technical training and in addition we have been investing in the implementation of a common erp and project management solution for environmental businesses again key to supporting future organic and acquisition growth. As we look back then over the last five years, Living Landscapes has delivered over 200% operating profit growth over that period, establishing itself, as I said, as a significant second pillar of the group, with a strong pipeline of organic and acquisition opportunities across sports landscapes and environmental sectors, ranging from further distribution growth to potential further manufacturing capabilities being acquired and continuing growing our advisory businesses we are confident that the division is well positioned to expand further in higher margin and faster growing markets as we look to the future with that I'll hand it over to Colm thanks TJ and good morning everybody

starting with some of the highlights then on financial performance on page 14 of the presentation. Overall, we've seen growth in revenue, operating profits, and earnings per share on a constant currency basis, with the weakness in sterling impacting on the final reported numbers. Group revenue at 2.1 billion is 2.3% ahead of prior year on a constant currency basis. This was largely driven by pricing of 3.1%, and again, due primarily to the higher commodity markets that sean would have touched on earlier and a 0.7 benefit from our acquisitions volumes were 1.5 percent behind prior year and as highlighted earlier again in the reviews of the different sections and higher input costs relative to output prices impacting on farmer spend in the year we grew our wholly owned operating profit for the year by 0.5 percent on the constant currency to 89.5 million with growth in our living landscape segment and our LATAM agricultural business largely offset by our lower performance in the European agricultural businesses overall agriculture operating profit of 71.8 million was 1.2% behind prior year living last gifts had a strong year with operating profit of 17.7 million representing growth of 10.1% and this was achieved equally through good organic growth and the full year impact of the prior year acquisitions our associates in giant venture results showed strong growth and that was off the back of a very strong prior year with share of profit up 23.9% supported by strong animal feed demand in the year our operating margin for the year at 4.2% was down 10 basis points which was due really to the reduction that we've seen earlier in the agricultural margin as a result of lower operating profits margins in our living landscape business remained at 8.9% our overall EPS for the year was 53.51 cent which was in line with our q3 guidance and delivers growth of 0.4 percent on a constant currency basis this result again demonstrates the benefits of the diversified nature of the group with strong contributions from living landscapes and from our lat-am business more than offsetting the lower performance in the other markets in what was a challenging year for agriculture across all of our markets looking down at our cash performance and our balance sheet on page 15 and it was a strong year for cash generation with our free cash flow at 43.3 million representing an eighty seven point seven percent free cash flow conversion ahead of our 2022 capital market state target of eighty percent our overall net deposition at the year-end was seventy seven point eight million which is seven million higher than last year this equates to a 0.71 times EBITDA and well within our banking competent position at the end of the year overall our finance costs amounted to 22.6 million in the year which was an increase of 2.6 million and that was really driven by a higher average debt level over the year which was largely driven by a higher working capital investment which we'll touch on on the next slide we also took the opportunity to extend our 440 million revolver revolving credit facility in the year with maturity now in 2031 our working capital outflow in the year amounted to 26.4 million and over the year as I touched on there we had an increase in our average working capital investment and consequently our average debt working working capital investment was largely driven by the higher pricing of inventory as a result of the increase in commodity pricing but also some early inventory purchase in advance of CBAM implementation in the EU on the 1st of January and to mitigate some of the supply challenges that we saw as a result of the conflict in the Middle East this investment ensured that our customers avoided any supply interruption during the key application windows we also made payments in the year of 5.1 million relating to previously withheld amounts due to sanctioned parties which now closes off all those previously with health supplier balances overall our rocky for the year at 10.9 percent is below our target of 12 to 15 percent and the key driver being the higher average working capital over the year as discussed as when we look at our Rocky, we look at Rocky using an average working capital for the year as opposed to our year-end position. FY26 then as Sean touched on was the final year of our five-year strategy cycle as previously presented at our 2022 capital markets day and I'm happy to report that we beat our operating profit targets with total operating profit over the five years of 474 million against our target of 415 million and this represents growth in the five-year profits of 44 against our previous five years our free cash flow delivery was also strong with total free cash generation of 324 million which was in line with our ambitious target back in 2022 we continue to pursue a disciplined approach to capital allocation with balance across investing in growth and returning cash to our shareholders. Achievement of our cash generation targets over this five-year period has allowed us to invest to deliver on our promise to shareholders with the completion of the 80 million share buyback program and the average annual dividend payout ratio above 35 percent. In total we've returned 172 million to shareholders over the period, which is approximately 40% of our market capitalization today. Strong cash generation has allowed us to invest $99 million in our diversification strategy, which does include final payments in respect of our LATAM agricultural business, which we acquired in 2018, but also to support the organic growth in our live and landscape business with selective M&A, and this has allowed us to grow the contribution from live and landscapes from 7.4% of operating profit in 2022 to just under 20% in FY2026. We've also invested in the organic growth of the business with 124 million spent over the five-year period to expand our capacity and our capability across the regions, invest in research and development, health and safety and in technology for the future with investment in a new ERP platform in Ireland and the UK and expanding our digital capabilities to customers we're well positioned to support the future growth of the business however would increase working capital demands and a higher interest rate environment we continue to monitor capital allocation and continue to focus on managing our working capital we will update our capital allocation strategy and new five-year ambitions are at our capital markets day on November 17th

finally for our shareholders in the current year we're proposing a final dividend of 14.15 cents which will bring our full year dividend to 17.30 cents which is in line with last year and above the 35% payout ratio that we outlined at the last capital markets day I'll now hand back to Sean thanks Colin so from a strategic perspective I think what you can see there is that the the business has really moved to a different level compared to where it operated at from the previous five-year period the average group operating profits over the last five years including a contribution from the joint venture businesses has been at over 100 million on average across the period and that compares very favorably to an average of about 70 million over the previous five-year period the low point for two total group operating profit in this five-year period was 89 million which was the high point in the previous five-year period so we've produced more consistent higher average profitability in this five-year period living landscapes now represents 20 of the group operating profit and at a higher margin and lower capital employed level, increasing Living Landscapes contribution to overall group operating profit can only be positive for the dynamics financially within the group. The Ireland UK businesses are a smaller, more consistent profit contributor within the overall picture, and CE, LATAM and our Living Landscapes businesses provide greater balance overall to the portfolio of assets that we have. and we're extremely well invested now so the business has invested significantly in plant in facilities uh just in the last 12 months we've bought additional land beside our two brazilian production facilities and our main polish manufacturing facility to allow for additional expansion we've invested in research we've invested in our digital tools and solutions invested in biological manufacturing capability from an organic perspective with our first investment in brazil and we continue to invest in nature-based solutions the markets are continuing to evolve though and the complexity that our landowners and our customers are seeing is increasing the value of the specialist knowledge the product and the services that we're offering. And we're beginning to tie together solutions from various parts of our businesses. So recent examples of that, for example, are where golf courses are now building irrigation lagoons to try and wean themselves off dependency on local natural water supplies from water authorities. We're involved in the construction of those lagoons, bringing together our oas teams our digital teams who can provide advice on the best location for those lagoons and the construction of the lagoons ourselves using our keystone habitats business and some of the products that are involved in that there are plenty of examples now of us beginning to tie together the solutions and capabilities that we have across the group which will drive additional synergies as the business continues to grow. We're well positioned for the next phase of growth, continue to have strong and leading market share positions. And as we mentioned earlier on, we are seeing continued challenges from the competition in the market going out of business, which essentially means that there's a migration to quality and a migration to some of the larger players within the competitive dynamic we continue to push for technical differentiation of product so whether that's higher margin products within our band portfolio differentiated seed offerings differentiated crop protection offerings controlled release fertilizers and higher quality blended nutrient fertilizers that essentially replace the lost nutrients in the soil rather than just applying straight nitrogen to grow a crop. The business is very much focused on differentiating ourselves from our competition through higher value add. We continue to scale our living landscapes business through both organic growth, integration at the back end, and driving for commercial synergies between the businesses after we've acquired them and we're continuing to identify pockets of services and pockets of solutions where complementary M&A will add value to the overall living landscapes business. So the next five years will be about converting that growth into value, continuing to grow our cash generation, continuing to see enhanced returns. We should have lower capex over the coming five years given our heavy investment in ERP and facilities over the last five years and continuing to drive capital efficiency across the group. So our capital markets day in Craven Cottage on the 17th of November will speak to strategy. Some of the growth opportunities that we see out ahead are overall financial ambitions for the group and how we intend to allocate capital over the coming five-year period. So to summarize, our FY26 performance has demonstrated the strength, the diversity of the group, and the capability of all of the management team. And I must thank all of the management team who have delivered a very strong result in what have been very challenging circumstances, both from a supply perspective and in terms of the challenges that we're facing on farm our five-year operating profit ambition has been exceeded significantly and we've we've over delivered in that regard we continue to generate strong cash which is supporting our investment in the business and shareholder returns at an overall level and we believe the platform that we have right now is very well invested for the next phase of value creation for shareholders and for the group as a whole so we look forward to seeing investors if not on the capital markets day on the the 17th of November on the road over the next few days and we continue to be happy to engage with investors and explain our story to them And hopefully, we're beginning to show and evidence that the management team that are in place now are delivering on the commitments given around the 22 Capital Markets Day. So, that concludes our call.

If you wish to ask a question, please dial pound key five on your telephone keypad. If you wish to ask a question via the webcast, please click on the green hand inside the player or type your question in the chat box below the player. The next question comes from Patrick Higgins from Goodbody. Please go ahead.

Thanks. Morning, everyone. One question on agri, please, and then maybe one on living landscapes, if that's okay. Firstly, just on agri. Obviously, we've seen a much improved kind of output price backdrop since the year end, which obviously should be supportive but i guess has to be balanced against you know still kind of elevated input cost environment so just interested to hear how you how you're how we should think about farming farmer sentiments across your key regions i guess versus this time last year at the start of six and have you seen any kind of notable differences in planting intentions uh across the regions uh for the year ahead and that's that's agree and then on the on living landscapes and how should we think about the pace and you know obviously you have the cmd coming up so maybe maybe you'll hold fire until then but but how should we think about the mna activity over

the kind of 12 24 months ahead given your comments on the strength of the pipeline and have you seen any changes in valuation expectations either kind of bolt on acquisitions or or larger kind of platform opportunities that you might be looking at across continental europe thank you thanks patrick um i'll take the uh the agriculture one and maybe tjl will answer the living landscapes one so yes i mean you're right farm sentiment um has improved um over the back end of the summer the return of rain um was important and you know harvest was concluded pretty early right around our businesses and the lift in wheat prices oil seed prices generally has been a positive and I would say farm sentiment is improving and has improved significantly in the early part of this year not really seeing any change in planting at this point in time we do expect in the uk a bigger overall oil seed rape area because oil seed rape was one of the crops that performed very well last year despite the very dry conditions so a continued return back to a higher oil seed rape planted area which is a positive for us winter wheat we think will probably be in line maybe slightly ahead of last year in the uk and the indications are at this early stage that poland and romania will continue to move towards greater winter flopping and we mentioned that dynamic earlier on and the kind of trend over the last three four years has been higher levels of autumn winter planting and lower levels of spring planting in in those markets brazil um i understand the the soy area is expected to be about three or four percent higher than than last year and again uh soy prices have moved upwards so farm sentiment in in brazil is improving and finally then from an animal feed perspective while dairy prices have been um lower over the last 12 months we did see uh dairy prices begin to tick up as the summer went on and as the year went on and and it looks like the short-term trend will be slightly upwards although not at the higher level seen at the end of 2025 calendar year so broadly speaking i would say that um the where fertilizer prices have landed where raw material prices have landed that's driving to an extent a lift in commodity prices from a grain and oil seed perspective and perhaps from a milk perspective and the risk of El Nino the risk of reduced cropping the actual outturns for summer 26 harvest you know the the French maize area I was 42 percent lower year on year so there has been significant deterioration in harvest outcomes as a result of the very dry conditions experienced last winter and that's underpinning and supporting

higher prices in grain markets for the coming year so sentiment is is improving i would say patrick that does that cover all of the agriculture part of the question and have mike on so tj go ahead sorry with the living landscapes part sure uh thanks patrick um you know again as you will know kind of predicting with any degree of certainty the timing on mna is is is difficult just by virtue and nature of of the mna processes themselves um that said what what i would say is that our M&A hopper is active we have moved into various stages of diligence across you know a number of businesses you know I would say in terms of you know the kind of profile of those businesses we we have been looking at the smaller scale ones we're also looking at some larger ticket ones so smaller being in the 1 to 5 million EBITDA range and the larger being north the five million EBITDA range so I would say a healthy hopper progressing well but but I won't be predicting the timing because that that that that is that is that is just not a predictable piece but certainly confident and and I would say in in in a healthy shape relative to the last number of months in terms of multiple expectations I would say again you know break it between the the smaller ticket acquisitions where you know it's typically owner managed family-owned type of businesses for multiple expectations there would have remained relatively consistent I would say over the over the years even as you get into the larger businesses I would say over the last kind of 12-18 months multiple expectations haven't increased we would see them as generally have been flat to maybe softening in some cases and that's possibly in part due to interest rate movements and increases, but nothing significantly different, I would say, in terms of overall multiple expectations over the last 12 or 18 months, I would have said.

The next question comes from Adam Tomlinson from Berenberg. Please go ahead.

Adam Tomlinson Good morning, gents, hopefully you can hear Adam Tomlinson Yes, we can, Adam. Okay, great. Thank you for the presentation, all very clear. three questions if I can just on in the UK and Ireland and other territories for that matter you spoke a little bit about some improvement in farming sentiment but I'm just interested in any color you can give on the consolidation trend you're seeing within your customers and maybe how that's impacting you and how you think that plays out that's the first question the second question was just on the living landscape division just delving into the detail a little bit there You mentioned sports, the sports area, delivering a good performance despite tough markets. I'm just wondering, is that perhaps an area where adverse or challenging weather conditions perhaps allow you to step in a bit more and help people out? Does that give a bit of counterbalance in terms of performance? and then just on the question is just on cash management so a strong strong net debt position for the year-end ahead of what we are expecting despite some working outflow I'm just wondering how about working capital perhaps in in the year ahead and just just from a modeling perspective that's the third question thank you thanks Adam calm do you want to go ahead first yeah yeah look at the the year-end finished very strong um probably ahead of our expectations to be honest given some of the markets were quite challenged as we touched on earlier on as regards

uh farmer affordability and spend patterns in the year so we had a very strong cash collection in july which would typically be our our strongest month for cash collection anyway but probably ahead of our expectations and certainly our net debt position um was it was good at the end of the year um looking forward to next year it's difficult to uh it's difficult to predict but i think when you look at where prices are right now as regards raw materials and we've got cbam coming in in the uk um with some of the timing around year end we probably will see a small outflow next year in working capital but as i said earlier on that's an area that we're looking on to manage over the year and really it's looking at the average over the year

and how we can how we can contain that and manage that effectively particularly with interest rates likely to rise over the coming year or 18 months thanks colin um you know from a consolidation or customer perspective on the agriculture side um some of the challenges that the uk farmers facing i suppose was the the inheritance tax issue so you know there are certainly moves to exit farming via sale rather than transition farming from generation to generation. That's around the edges. Really what we're seeing though is more consolidation in continental Europe and also in Latin America. So, you know, a lot of the smaller distributors, regional distributors um in romania in poland and to a certain extent in latin america um going out of business or using credit arrangements and and uh creditor arrangements sorry court court ordered arrangements um to uh wind up their businesses so really a flight to quality uh from a distributor perspective seems to be uh to what we're seeing so minor consolidation i would say at farm level um although that's a feature always in in this business and has been for the last 20 years continued farm consolidation um but really more opportunity uh within our um competitor space uh to win business and grow market share because competitors are significantly challenged i think we're the only uh distributor of agrochemicals in the uk who made a profit in the last 12 months so you know that that would give you some indication of uh the level of challenge that's been experienced by our competitors in the uk and adam just regarding a question on your sports business uh yeah clearly the the very dry arid

conditions over the summer negatively impact the kind of absorption characteristics for you know nutrition products onto the soil for herbicides and pesticides. That said what we do see is that you know it presents opportunity around our irrigation solutions and also on certain product ranges such as wetting agents but net that very dry period is a negative for the business but what we do see is that we entered the as we entered the early autumn period there's a lot of recovery work that starts to happen whether it's golf courses football pitches cricket grounds etc and we see a real bouncing activity uh through september uh when conditions start to improve so certainly uh we do see recovery and we will see recovery over the coming month or so as uh as ground staff um look to renovate pitches that have been damaged over the over the winter period. So that's just the nature of the business, I suppose. But net, as I said, a challenge when it's very dry, but recovering well over early autumn. Okay.

That's really helpful. Thank you very much.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. If you wish to ask a question via the webcast, please click on the green hand inside the player or type your question in the chat box below the player.

The next question comes from rania balagi from tpi cap please go ahead good morning i hope you're hearing me well uh thank you for taking my questions i have three uh the first one is on what you can disclose in your outlook maybe for the next semester the second one would be on the recent integration of living landscapes acquisition should we expect them to be relatively straightforward or are they there and maybe key challenges investors should be aware of and the third one is on the view it's credit risk but that's provision how are

you managing them are there any more information to give the next fiscal year thank you so much okay well I'm on outlook typically rainy we don't give outlook in the business until our Q3 trading update, which is, I suppose, in June timeframe. And that's because 90% of our profit is weighted towards the second half of the year. What I can say now is that the trading for the first six weeks of this year has been in line with our expectations. So one of the happy things about ending a challenging year that we've just come from is that we get on the flywheel and start all over again when the new agricultural year comes around and the new planting season begins. So, you know, I'm happy to say that early seed sales, early sales of fertilizer and early sales across our living landscapes businesses have been strong in the first six weeks of the year. So we're happy with that, how that's happening. But typically we don't give an outlook until very late in the year. we are comfortable with the range of analyst expectations that are out there but I suppose we don't give an outlook at this point of the year.

And regarding your question on integration of acquisitions we bring it into two components broadly I mentioned in the environmental businesses we're putting in a new ERP solution across those businesses and also a new project management solution and again that's to support both the organic growth and also future acquisition onboarding as well so that with a common platform and set of solutions there we already have that to an extent across our distribution businesses and sports and landscapes but that also is evolving and we're continuing to invest behind our IT infrastructure in those businesses as well again for the same reasons of supporting ongoing organic growth, but also to create that platform for future acquisitions. I also mentioned that within the landscapes businesses, we have gone through an operating model change. So migrating the businesses from more of a BU-led structure to more of a commercially led structure that better aligns with our customers and segments. And I guess that's an ongoing focus to ensure that the organizational and operating model design of the business is best fit for future growth and meeting ultimately customers needs and demands as we look out into the future. I think in terms of challenges around integration I would say you know culture is particularly for M&A and new business onboarding managing the cultural integration cultural alignment protecting the culture of those businesses that we've we've acquired because you know typically we've been acquiring small the owner managed smaller businesses in some cases that have a particular unique culture that has made them attractive for the workforce and has made them attractive for their their customers ultimately so it's ensuring that in whatever integration work that we do that are very conscious and aware of the the importance of the the local cultural dynamics and operating norms in each of those businesses and to the

extent possible protecting those as we as we grow the businesses and yeah just in respect of credit risk um i didn't hear all the question it broke up a little bit but maybe just to talk to how we approach credit risk in general i guess the two um most challenging markets i guess are Romania and Brazil as Sean mentioned earlier on the level of bankruptcies and court protections and restructurings in 2025 calendar year was the highest year on record our approach in that market is we've a high level of credit insurance and we also engage in guarantees and in some cases mortgages to protect our credit that we advance in that market which means that although we will would have taken a higher provision uh relative to last year compared to some of our peers it's obviously pretty minimal um it gives us a lot of protection as we as we sell on credit in that market um romania has gone through um probably a difficult three years following two years of consecutive droughts putting a lot of pressure on on farmers and ability to to spend and to pay their bills at the end of the harvest um definitely we've seen improvement over the last 12 months in that market and as I touched on our credit our collections in July were very strong in that market however the previous years and collection of older death we took a position in the year to provide for the majority of that if you remember two years ago there was an intervention by the government which stopped companies like ourselves chasing down debt for a period of six months to give farmers some relief so it has been challenging to collect and to go after that older debt so that's why we had that kind of spike in the year to really protect us against the older amounts but certainly the market has improved but our approach in that market is similar in that we'll look to use guarantees and mortgages as best we can to try and protect ourselves against recoverability of debtors and I'd say outside

of that our approach is similar and we've got a strong record on cash collection when it comes to receivables the next question comes from kathil kenny from davie please go ahead good morning a couple questions from my site firstly on cbam coming into the uk at the start of 27 just interested in your thoughts there particularly around inventory management ahead of that with regard to fertilizer same question living landscapes on the server side um interested here your thoughts tj just on your visibility around

the business pipeline as you look into the year ahead and third question is the repeatability of the performance at the after-tax level for joint features very good performance this year just is to know how you think that will perform in the year ahead thank you thanks call calm don't you see bomb surely morning call yeah in respect to see bomb I guess they were kind of 12 months after the European implementation so it comes in on the 1st of January of 2027 hard to predict as regards what the what that will mean our expectation is there probably will be some more inventory purchased pre-Christmas or pre-January but again it goes back to affordability and credit off the back of a challenging year that will influence I guess the volumes of fertilizer that we see being bought before CBAM comes in you know we're in a good inventory position it's a different market over there so there isn't the same capability to bring in large quantity of inventory but we'll certainly be looking to demand profiles there and managing that over the months ahead. TJ do you want to touch on?

Sure morning Kyle yeah as regards the advisory businesses you know generally what we see in terms of pipeline and we manage those businesses based on forward-looking pipeline. Pipeline is generally in good shape across the businesses going into the kind of later autumn period and certain businesses have different seasonal components to them but generally positive. I did mention or I mentioned in the press release that we had some challenges in the renewable space in the UK with the timing of award and consent around grid applications. So that slowed performance in one of our businesses, Neo Down, to some extent last year, but confident that that's picking back up again as we enter the late autumn period. So overall, I would say in reasonably good shape, we announced also that just after the end of the year, we acquired Lighthouse Consulting, which is in the in the planning area and we've also got a couple of other acquisitions in the hopper potentially around areas such as landscape architecture and the more of those gateway type services that we get access to that's really our strategy is by accessing gateway services we open up the portfolio of broader services that we offer to clients as well and indeed across into potentially the product solutions as well so um certainly i'm very pleased that we we got the

lighthouse um uh acquisition done and i would say confident as we look out into the future around the opportunity that presents us and some of the other mna prospects that are coming down at us as well over the coming months hopefully so uh yeah i think overall on the advisory businesses are we're confident and optimistic about the year ahead okay and the final uh part of your question call there was in relation to repeatability of uh the joint venture figure i i would say that you know it probably is not going to be consistently coming in at that level there may be some one-off years which which uh allow the business deliver that level of return but certainly if we're looking at an average for the next five years it'll be at a lower level than the performance this year because with the drought conditions it simply was a very very very strong year from a feed perspective and i would say both the halls and the thompson's joint venture businesses uh were well positioned in terms of being able to take advantage of that um as you know we did a fire there probably four years ago at this stage and completely refurbished our uh ring a skinny facility there was a significant investment that went into our belfast facility so the kind of industrial scale throughput that we can put through our uh production facilities whether it's on a grain distribution or manufacturing of feed um is now at a higher level so when there are bursts in demand uh halls is probably better position than any other competitor in the market who's typically walking through a flat store model rather than heavily automated stores, that opportunity is generally taken by hauls when we have very strong close-in bursts in demand. Thank you. Very helpful. There's one question which has come in online there from alkil patel from shore so with romania moving more towards winter cropping is that an opportunity for a volume and margin perspective for your products i mean the answer to that question is potentially yes um you know we we do obviously sell uh winter wheat and oilseed rape which are the two main winter crops in the Romanian market and as we know from our explanation of cropping in the past the longer that the crop is in the ground typically the more the farmer will spend on it so it typically needs more applications of products for the season it typically needs more servicing and therefore that represents an opportunity maize which this crop is is potentially replacing so winter wheat and oilseed rape would typically replace a maize crop is not that profitable a crop from a Romanian perspective so I think yes it represents opportunity for us and that's good news and anything that makes our farmer more stable and more profitable is good news for agri particularly in the Romanian market as well so yeah I think I think generally speaking we would be happier with more winter cropping than spring cropping in the Romanian market we have no more questions on the line so I hand the conference back to Sean Coyle to conclude today's call thanks very much everybody for joining the call today hope you got some insight into the performance for the year as i said earlier we look forward to seeing you on the road over the next few days or at our capital markets day in craven cottage on november 17th if we if we don't see you over the coming

days thank you for joining that concludes our conference call for today thank you for participating, you may now disconnect your lines.