REG - Origin Enterprises - Q1 Trading Update

Origin EnterprisesAnnouncement

21/11/2024 07:00

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RNS Number : 0320N  Origin Enterprises Plc  21 November 2024

Origin Enterprises plc

Q1 Trading Update

 

Solid first quarter performance in Agriculture despite delayed planting;
Strong growth in Living Landscapes

 

Dublin, London, 21 November 2024: Origin Enterprises plc ('Origin' or 'the
Group'), the international group championing sustainable land use solutions,
today issues its first quarter Trading Update for the three months ended 31
October 2024 ('Q1 FY25').

The Group is also hosting its Annual General Meeting ('AGM') later today, with
further details available at https://originenterprises.com/investors/agm.

 

Financial and Operational Summary

·     Group Revenues for the quarter of €469.4 million (Q1 FY24:
€532.5 million), representing a decrease of 11.8%.  A 14.2% decrease in
revenue in the Agriculture segment was partially offset by an increase of
24.8% in our Living Landscapes businesses.

·     Agriculture

o  Q1 volumes were 8.1% lower overall in our Agriculture business due to
planting delays caused by persistent rainfall in the UK and Ireland and dry
conditions delaying planting progress in Romania and Brazil.

o  Recovery of volumes in Q2 is expected following a recent acceleration of
drilling across all geographies. The total planted area for winter cropping is
forecast to normalise, including a UK winter wheat area of circa 1.75 million
hectares, compared to 1.3 million hectares planted last year.

o  While on-farm sentiment is reasonably good across our geographies,
following the recent improvement in weather conditions and stability in input
prices, output prices remain a concern for growers.

o  On-farm inventory levels remain low, creating potential for increased
demand as the season progresses.

·     Living Landscapes

o  Strong start to the year within Living Landscapes with overall revenue up
24.8% (21.9% on a constant currency basis), driven by strong organic growth
and the benefit of recent acquisitions.

o  Further enhancement of our Environmental capabilities with the
acquisitions of Brooks Ecological, GE Consulting Services, Avian Ecology and
Bowland Ecology in the quarter.

·     Appointment of Mr. Dick Hordijk and Ms. Jenny Davis-Peccoud as
independent Non-Executive Directors.

·     Completion of €20 million share buyback programme.

 

Commenting on Origin's Q1 Trading Update, Sean Coyle, CEO said:

"The Group achieved a solid first quarter performance, despite delayed
plantings in the Northern Hemisphere and Brazil. Encouragingly, following
recent improvements in conditions, we expect to see recovery in volumes in Q2
and overall planting levels across our geographies to return to a more
normative cropping area relative to last year. In line with our strategic
ambitions, we are pleased to see strong organic growth in Living Landscapes
and welcome four new businesses which strengthen our environmental expertise
and further complement our services."

Group Revenue

                                                                                                              Constant Currency(2)

                                  Q1 FY25             Q1                  Variance            Underlying(1)   %

                                  €'m                 FY24                %                   %

                                                      €'m
 Ireland / UK                     237.9               290.1               (18.0%)             (19.8%)         (19.8%)
 Continental Europe               142.6               155.5               (8.3%)              (11.0%)         (11.0%)
 Latin America                    49.1                55.1                (10.8%)             2.6%            2.6%
 Total Agriculture                429.6               500.7               (14.2%)             (14.6%)         (14.6%)
 Living Landscapes                39.8                31.8                24.8%               12.9%           21.9%
 Total Group                      469.4               532.5               (11.8%)             (12.9%)         (12.4%)

 Total Group (ex Crop Marketing)  422.5               476.6               (11.4%)             (12.1%)         (11.5%)
 (1) Excluding currency movements and the contribution of acquisitions

 (2) Excluding currency movements

 

 

Agriculture:

 

Ireland and the UK recorded a decrease in revenues of 19.8% on a constant
currency basis in Q1 with volumes down 12.3% and pricing reduced by 7.5%.

 

Sustainable Agronomy

A later 2024 harvest and challenging in-field conditions early in the quarter
resulted in a delayed autumn/winter planting season in parts of the UK. Recent
weather conditions have improved planting progress and based on current
on-farm activity we expect 1.75 million hectares of winter wheat to get
drilled, compared to 1.3 million hectares planted last year. Combined
autumn/winter and spring plantings for the 2025 crop production year are
expected to exceed last year and reach 3.9 million hectares.

 

Soil Nutrition

Our business-to-business fertiliser volumes were impacted by delayed winter
crop plantings, however our order book remains strong. Year-on-year pricing
was lower, influenced by declining raw material prices. Based on the current
outlook, we anticipate prices will firm as we approach the key spring
application period.

 

Animal Nutrition

Origin's Feed Ingredients revenue was marginally down on Q1 FY24 due to lower
market prices for feed raw materials. Overall volumes remained strong
benefitting from demand due to fodder shortages on the island of Ireland.

 

Continental Europe recorded an underlying volume increase in agronomy services
and crop inputs of 2.8% in the period, excluding crop marketing and Ukraine
which was discontinued in FY24. Overall, there was a satisfactory start to the
year, with good crop establishment recorded in Poland and improved plantings
in recent weeks in Romania. Sentiment is cautious in Romania as capital
availability is challenged following two consecutive years of drought
impacting certain regions. The outlook in Poland is more positive following a
good start to the year.

 

Latin America delivered a solid start to the year, despite a challenging macro
environment recording an underlying increase in business volumes of 8.1%.
 While weather conditions resulted in some delayed soya planting regionally
compared to the first quarter last year, overall planting levels have improved
in recent weeks and are running ahead of the prior year.

 

Living Landscapes:

 

Living Landscapes had a good start to the year with overall revenue growth of
21.9% on a constant currency basis driven by strong organic growth of 12.9%
and acquisition benefit of 9%. In addition, the Group completed the
acquisitions of specialist Environmental businesses, Brooks Ecological, GE
Consulting Services, Avian Ecology and Bowland Ecology.

 

ESG

 

Sustainability

Origin is committed to harnessing the full potential of land through
sustainable, future-focused solutions that optimise crop yields, enhance
ecological landscapes, and improve green spaces. Aligned with our strategy to
expand our presence in Living Landscapes and broaden the scope of our
sustainable land use solutions, we support our agriculture customers to
produce safe, high-quality food in an environmentally responsible way.

 

Within our Group operations, we are actively progressing our carbon transition
plan, working toward our approved Science-Based Targets through tangible
actions. The Group has commenced the rollout of a data aggregation tool in
advance of the introduction of CSRD reporting.

 

Board Changes

During the period, the Group announced the appointment of two new independent
Non-Executive Directors. Mr. Dick Hordijk joined the Board on 16 October, and
Ms. Jenny Davis-Peccoud will join as an independent Non-Executive Director,
effective 22 November 2024. Mr. Hordijk brings significant business leadership
and agriculture industry experience, while Ms. Davis-Peccoud brings extensive
ESG and sustainability expertise to Origin.

 

Outlook

 

Origin will provide a further update on cropping status and farming activity
ahead of the Group's main trading season, at the time of our Interim Results
announcement in March 2025.

 

AGM

 

Origin is holding its Annual General Meeting ('AGM') today at 11:00am
(UK/Ireland time), in the Merrion Hotel, Upper Merrion Street, Dublin 2.
Further details regarding the Annual General Meeting are available at
https://originenterprises.com/investors/agm
(https://originenterprises.com/investors/agm) .

 

 

ENDS

 

 

Enquiries

 

 Origin Enterprises plc
 Colm Purcell
 Chief Financial Officer                            Tel:  +353 (0)1 563 4900

 Brendan Corcoran
 Head of Investor Relations and Sustainability      Tel:  +353 (0)1 563 4900
 Goodbody (Euronext Growth (Dublin) Adviser)
 Joe Gill                                           Tel:  +353 (0)1 641 9449

 Davy (Nominated Adviser)
 Anthony Farrell                                    Tel:  +353 (0)1 614 9993

 Berenberg (Corporate Broker)
 Clayton Bush                                       Tel:  +44 (0)20 3207 7800

 FTI Consulting (Communications Advisers)
 Jonathan Neilan / Patrick Berkery / Niamh O'Brien  Tel:  +353 (86) 602 5988

 

 

About Origin Enterprises plc

 

Origin Enterprises plc champions sustainable land use through technically-led
solutions, empowering our customers to enrich their land so it can achieve its
true potential. The Group has leading market positions in Ireland,
the United Kingdom, Brazil, Poland and Romania, and is listed on the
Euronext Growth Dublin market and the AIM market of the London Stock Exchange.

 

 Euronext Growth (Dublin) ticker symbol:  OIZ
 AIM ticker symbol                        OGN
 Website:                                 www.originenterprises.com

 

 

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