American Vanguard Providing the Means to Safe, Efficient & Abundant Agriculture Worldwide
March 2017
Safe Harbor Statement This presentation contains, in addition to historical information, forward-looking statements. Such statements are based on management’s current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, those described in the Company’s Annual Report, on Form 10-K, and in other SEC filings.
2
AMVAC Overview ► Founded in 1969; Traded on NYSE (390 employees)
► Fully integrated company operation, excluding basic R&D ► Business Model: Develop, manufacture and market a diverse group of specialty and agricultural products ► Mission: Enhance agricultural productivity and safeguard public health ► Growth Focus:
➢ Acquire/license branded niche products ➢ Reinvent core products by identifying new opportunities ➢ License new, active ingredients and product technologies ➢ Strengthen capabilities to develop, reformulate, market, sell & service ➢
products internationally and fully exploit our domestic manufacturing capabilities State-of-the-Art application equipment SIMPAS 3
3
Proven Acquisition & Licensing Experience Phosdrin Mevinphos (DuPont) 1989
SmartBox System (Dupont) 2000
Ambush 25WP Permethrin (Syngenta) 2002
Thimet Phorate (BASF) 2005
E-Z Load System (UAP) 2007
Mocap Nemacur Aztec (bag) (Bayer) 2010
Fortress Chorethoxyfos (DuPont) 2000
Deadline Metaldehyde (Pace) 2003
Impact Topramezone (BASF) 2005
Terraclor PCNB (Chemtura) 2007
Tribufos International (Bayer) 2011
Dacthal DCPA (Zeneca) 2000
Evital Norflurazon (Syngenta) 2003
Counter Terbufos (BASF) 2006
Hannibal Plant (BASF) 2007
Aztec (ATB) (Bayer) 2000
Nuvan DDVP (Novartis AH) 2003
Lorsban (Dow) 2006
Vapam Metam Sodium (Zeneca) 1996
Axis Plant (DuPont) 2001
Hivol 2,4-D (Pace) 2003
Dibrom Naled (US) (Valent) 1998
Folex Tribufos (Aventis) 2002
Avenge Difenzoquat (BASF) 2005
Bidrin Dicrotophos (DuPont) 1993 Fruitone NAA (Rhone Poulenc) 1991 Dibrom (ex-US) (Chevron) 1991
Ambush, Prelude Permethrin (Syngenta) 2006
Lock ’N Load System (BASF) 2006
1989
Scepter (BASF) 2015
Acropolis Bti Briquets (Oxon Italia S.p.A.) (Summit) 2017 2012
Marsing Plant (Bayer) 2008
TyraTech Venture (Envance Technologies) 2013
Orthene Acephate (Valent) 2008
Nemacur (Adama) 2015
Def (Bayer) 2010
Hyvar (DuPont) 2015
Krovar (DuPont) 2015
2017 4
4
Diversified Crop Participation 3%
2016 $312 Million
4%
6% 26% 7%
Fruit & Veg Potatoes Corn specialty Cotton Sugar Crops Peanuts Other
11%
22% 21% 5
5
AMVAC United States Manufacturing Sites
Los Angeles, CA
Axis, AL
Marsing, ID
Hannibal, MO 6
Technology Innovation
7
Shareholder Equity Growth Shareholder Equity has doubled in the last decade $300
Millions
$250
$200
$150
$100
$50
$1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 8
Shareholder's Equity ($K)
Debt to Equity Ratio $300,000
2.5
$250,000
2.0
$200,000
1.5 $150,000
1.0 $100,000
0.35
0.37
0.35
0.23
0.20
0.38
0.25
0.15
$50,000
0.5 0.0
$-
2009
2010
2011
2012
Shareholder's Equity
2013
2014 Debt
2015
2016
SmartBoxÂŽ The most advanced granule application system available Patented, closed-container transfer and application system for pesticides The sealed transfer-container is returnable and refillable. The on-planter base-container contains a locking valve system which enables contact-free product transfer The electronic meter replaces the conventional mechanical meter for accurate product dispensing All three components work together with a cab mounted computer to create the SmartBox System 10
MUCH Better Accuracy than Mechanical In-cab Monitor & Controls Records FIELD application rates, but is not integrated with current GPS systems nor does it create as-applied maps
11
11
Global Precision Farming Market Double-digit Growth Forecast
Market Size
CAGR 16.14%
$3.2 Billion* USD $2.761 Billion 2015 1
USD $4.799 Billion 2020 1
USD $7,870 Billion
2022 2
Sources: 1. “Precision Farming Market – Global Forecast to 2020”, MarketsandMarkets, Jan 2016 2. “Precision Farming Market – Global Forecast to 2022”, MarketsandMarkets, Jan 2017 MarketsandMarkets is 2nd-largest market research firm worldwide in terms of premium market research reports published annually.
Even with challenging farm economics, growth in Precision Farming is anticipated to be stronger than initial projections in 2015 * MTM’s 2016 forecast of 2015 Mkt Size was $2.76B. MTM’s 2017 revised estimate of 2015 Mkt Size was $3.2B, or ~16% larger than previous forecast.
12
Smart Integrated Multi-Product Prescription Application System RFID-tagged SmartCartridges™
One system for Insecticides, Fungicides, Nutritionals & Biologicals
Dry and/or Liquid Products Applied Simultaneously
Application Accuracy (+/- 1%) at VERY LOW Rates 1st Commercial units will apply up to
Patented Meters
3
RFID SmartCartridge™ Packaging
PRODUCTS PER ROW
(InkJet Printer Concept: Software Controls Product Placement)
iPad® User Interface Wireless Meter Control
Broadly licensed to allow application of products from many manufacturers iPad® is a registered trademark of Apple, Inc.
13
13
SIMPAS makes it EASY to Practice 4R’s Stewardship of Crop Protection Chemicals while Planting RIGHT PLACES @ RIGHT RATES
RIGHT TIME RIGHT PRODUCTS
SIMPAS Video Presentation
*Other: Plant Growth Regulators, Biostimulants, Inoculants, Specialty Nutritionals, etc.
14
PLAY VIDEO BELOW
Market Opportunities Crops All row crops • Corn • Sugarcane • Peanuts • Potatoes • Sugar beets • Soybeans • Cotton • etc.
Geographies • • • • • • •
US Brazil/Argentina Large farms, technology adaptors China Eastern Europe UK, EU Heavily regulated Canada Australia Lack of Alternatives
16
16
Expansion Potential Intermediate Term: SIMPAS 2.0 Additional USA Crops & ex-USA Regions
Today: SIMPAS 1.0 6 Targeted Crops, USA-only Corn, Cotton, Soybeans
Brazil, Argentina, Canada, China
Peanuts, Potatoes, Sugar Beets
Australia, EU, India
USA Opportunity & Only 6 Crops
Global Opportunity & More Crops
Tremendous potential other crops & regions, but initial commercialization limited to prescriptive at-plant opportunities in 6 USA crops. Source: Context Network Market Estimates & Analysis
17
AMVAC Global Operations Canada Office
AMVAC Global HQ
AMVAC Netherlands BV*
AMVAC Sales Office Ukraine
Huifeng AMVAC Innovation Co., Ltd Joint Venture
AMVAC Sales Office France
Quimica AMVAC de Mexico*
AMVAC Singapore Pte Ltd*
AMVAC de Costa Rica* AMVAC do Brasil Representações LTDA*
*Subsidiaries
18
HuiFeng AMVAC Innovation Company, Ltd • Objective: Facilitate technology and market access • Platform for Collaboration: ➢ Technology development ➢ Securing product registrations ➢ Co-marketing of each partner’s crop protection products and equipment systems ➢ Funding product acquisition/licensing opportunities ➢ Potential co-manufacturing arrangements
• HuiFeng: Very Strong Partner
19
HuiFeng AgroChemical Manufacturing & Technical Capability
Seven Distribution Centers 280 Sales and Technical Persons Service 1800 Distributor & Retailer
21
Biological Innovation and Global Market Access Model Technology Providers i.e. FEM
Government Funding i.e. EU Grant
Potential Licenses
Screening Business/Technical Opp Regulatory Development Trials
Trichoderma Registration in EU for Vine, Vegetable, Fruits
EU Belchim
Americas AMVAC
M.E. UNIFERT
22
Asia (TBD)
AMVAC Innovation Pipeline 140
Net Sales
120
GM $M
100
NPV
80 60
Stage 5 Near-term Stage 1 Longer-term
40 20 0 1
2
3
4
5
Stage 23
23
AMVAC Technology Development Investments ► Product Innovation • 43 internal projects in progress; First commercialization 2019; Revenue Potential >$200MM • Product Development Alliances; 2 underway in China
► Joint Venture Entities
• Hong Kong based JV with Huifeng, market & technology access in Asia/Pacific region • Bi-Pa; 15% equity ownership in biological product development • Envance; majority owner; alliance with significant consumer marketing firm
► Precision Ag Equipment Systems
• Alliance Partners; equipment manufacturers; guidance experts, Crop Protection Chemical input suppliers; 2017 • U.S. commercialization; prescription planting/soil treatment, 2018/2019 • International; targeting Asia/Pacific & South America large growers; 2019/2020 24
24
Pillars of AMVAC’s Growth Asia/Pacific Hong Kong Joint Venture
Hyvar & Krovar
Acquisitions
TyraTech / Envance
BiPA
Biologicals
Partnerships
Strategic Alliances “Key” to our Growth Organic Growth
Licensing Technology
Scepter
Fruits & Vegetables
Precision Application SIMPAS 25
AMVAC Strategic Initiatives ► Product Portfolio Expansion Acquisition; licensing; internal development; partnership/collaborations
► Increasing Market Access Domestic programs; international alliances
► Technology Innovation Chemical products; biological products; precision-ag equipment systems
► Organizational Excellence Manufacturing processes; financial control/discipline
26
26