Nessun titolo diapositiva

1
A new phase of growth From development of
Tetraconazole to launch of new products
Meeting with Institutional Investors Paris, June
20th, 2005
2
Contents
Isagro walking on the path of growth Growth
drivers Tetraconazole development Growth
drivers launch of new products Conclusions Stock
information
3 - 10 - 21 - 29 - 31 -
9 20 28 30 33
3
Isagro walking on the path of growth
4
Isagro from a sound equity story...
31.2
1993 -gt (after M.B.O.)
1992 (before M.B.O.)
23.2
23.1
17.9
16.5
13.6
11.4
10
10.6
12.8
9.6
9.3
7.6
7.5
7.2
7.1
8.7
5.8
7.3
6.0
5.7
5.4
5.2
5.0
4.7
4.0
3.5
3.4
2.0
3.0
1.5
1.1
0.8
0.5
0.6
0.2
0.2
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
(4.2)
Turnaround and integration of 2001 acquisitions
Sales of Tetraconazole in USA (on sugarbeet)
Turnaround and construction of the Strategic
Alliances System
(6.2)
Acquisition of Caffaro and RPG in 4Q01, with
negative impact in the year due to seasonality
Strong development of sales of Tetraconazole in
South America on soybean
Once completed turnaround, new products under
develop. (to be launched after 2005)
million
Net result
Cash flow (net res. depr.)
EBITDA
5
to a new pattern of organic growth
STRATEGIC GUIDE-LINES
1. Invest in new proprietary products2. Develop
in-house manufacturing capacity for
proprietary products3. Grow in local marketing
and distribution
PIPELINE RENEWAL AND LAUNCH OF FURTHER NEW
PRODUCTS
NEW PRODUCTS REACHING REGULAR SALES
SALES AGAINST RUST IN AMERICA REACHING MATURITY
LAUNCH OF NEW PRODUCTS
FURTHER EXPANSION OF TETRAC. SALES IN SOUTH
AM. RUST IN THE U.S.A.

• plus further acquisitions?
• of distribution networks?
• of technologies?
• of products?

TETRACONAZOLE AGAINST ASIAN RUST IN BRAZIL
2003 2004 2005E 2006E 2007E
2008E 2009E 2010E 2011E 2012E
6
2004 results and 2005 estimatesimproving
performance
million
2004 actual
2003 pro-forma
2005 budget
Variations
Variations
Revenues
182.1
153.0
200.4
19
10
RD costs
(12.9)
(13.0)
(13.9)
RD capitalisations
7.7
9.9
6.4
Copper hedging
3.5
0.7
-
EBITDA
31.2
23.2
33.0
34
6
on Revenues
17.1
15.2
16.5
EBIT
19.7
15.0
n.c.
31
on Revenues
10.8
9.8
Net result
9.7
5.8
11.8
65
22
Excluding Vietti
on Revenues
5.3
3.8
5.9
33
20
33
Income tax rate
7
2004 debt/equity below 1
Acquisitions
Sever. ind. fund (7)
Caffaro RPG others
50 Siapa
Net fixed assets 64
Equity 55
Equity 33
Equity 63
Equity 30
13
Net debt 69
Net debt 87
Net debt 69
Net current assets 60
Short term 26
Equity 29
- 23
Net fin. debt 53
M/L term 27
Net debt 7
2004
2003
2002
2001
2000
1.25
Debt/equity 0.83
2.65
2.34
0.23
49 acquired in 2001 and consolidated at 50
from 2002
8
2004 main market positions
Proprietary networks, strategic partners and
national independent distributors guarantee
access to distribution on a world-wide basis
Isagros global market share

• In the world market of Agropharma 0.6
• In the world market of Fungicides 1.8

Isagros market shares In the single segments
2004 market shares (cultivated areas)
sugarbeet / JAPAN 50 sugarbeet /
ITALY 18 sugarbeet / USA
61 coffee / BRAZIL 8 cotton
/ INDIA 3
olive / ITALY 22 olive /
SPAIN 10 vegetables /
SPAIN 2 soybean / BRAZIL
10 grape / ITALY 16
The business is GLOBAL, but competition takes
place in the single segments
9
2004 results well in advance towards business
plan targets
2004-09 estimates (NOT CONSIDERING
SOYBEAN/USA) November 2004
2004 results
Revenues
Revenues
182 19 vs. 2003 6 vs. estimates
172
260
153
183
2004E
2009E
2003
2005E
million
Dividend per share
Dividend per share
0.24 140 vs. 2003 33 vs. estimates
0.18
0.35
0.10
0.20
2003
2005E
2004E
2009E
per share
Debt/equity
Debt/equity
0.83 -34 vs. 2003 -21 vs. estimates
1.05
0.48
1.25
1.00
2004E
2009E
2003
2005E
million
40-45 of ordinary net result
10
Growth drivers Tetraconazole development
11
ASIAN RUST FUNGAL DISEASE ON SOYBEAN
Treated area

• Endemic

Spores transported by winds throughout the hit
territories

• Chronic

Spores overwintering, hosted by other plants

• Destructive

Up to 80 of losses w/o using fungicides
Non treated area
Use of Tetraconazole - SÃO DESIDÉRIO, RODA VELHA,
BA, March 8th, 2003
12
The diffusion of Asian Rust
USA 2004
Brazil 2002
Kenya,Uganda, Rwanda 1996
1902-1934
EQUATOR
Zâmbia 1998
Zimbabwe 1998
Paraguay 2001
Bolivia 2003
Mozambico2000
South Africa 2001
Argentina 2003
13
Tetraconazole a result of Isagros Innovative
Research...

• Fungicide invented by Isagro Ricerca, with both
  preventive and curative activity
• In 2004, redefinition of mfg. set-up with strong
  increase of production capacity

M-Alcohol
1 Isagros plant 3 external sources
TETRACONAZOLE
FORMULATIOS
1 Isagros plant 2 external sources
2 Isagros plants
TFE
2 external sources
HIGH SELECTIVITY
48
Revenues million

• Absence of phytotoxic effects

• Absence of dwarfing effects

27
20
HIGH EFFICACY

• Intrinsic activity

• Capability to peneatrate/translocate

• Residual effect

2002
2003
2004
Out of which 2 on an exclusive basis On an
exclusive basis
14
and best performer against Asian Rust, USDA says
FIELD TRIALS RESULTS BY U.S.D.A
Number of applications
1
100
Tetraconazole
Tetraconazole
90
2
Tebuconazole
Tebuconazolo
(
Folicur
)
(
Folicur
)
2
80
Flusilazolo

Carbendazim

(Punch)
Flusilazolo

Carbendazim

(Punch)
2
70
Propiconazole
Propiconazole

(Tilt,
Propimax
,
Bumper
)
(Tilt,
Propimax
,
Bunper
)
2
60
of control of Asian Rust
Myclobutanil
Myclobutanile
(
Laredo
,
Systane
)
(
Laredo
,
Systane
)
2
50
Strobilurina
Strobilurin
(
Amistar
,
Quadris
)
(
Amistar
,
Quadris
)
2
40
Strobilurina
Strobilurin
(
Headline
)
(
Headline
)
2
30
Chlorothalonil
Chlorothalonil
(
Echo
/Bravo)
(
Echo
/Bravo)
20

10
15
Tetraconazole complete action against Asian Rust

• Strobilurins to be used along with Triazoles to
  avoid resistance
• Triazoles may be used alone
• Tetraconazole the best Triazole

TETRACONAZOLE
STROBILURINS
TRIAZOLES
PREVENTATIVE
CURATIVE
TRANSLAMINAR
XYLEM MOBILE
YES
NO
SOME
16
Tetraconazole development inSouth America
Tetraconazole estimated sales in South
America /million
COUNTRIES HIT BY ASIAN RUST

• Brazil (2nd world producer of soybean)
• Argentina (3rd world producer of soybean)
• Bolivia, Uruguay, Paraguay

64
(Final registrations for Tetraconazole in all
mentioned countries)
BRAZILIAN COMPETITIVE SYSTEM
21 authorised products
34
Folicur
32
20
Opera
9
33
Priori Xtra
2003
2004
2005E
2009E
14
First year of sales in Brazil
Consolidation in Brazil and Rust in Argentina
Tetraconazole
Others
Rust in all South Am. Countries and
3rd distributor in Brazil
2nd distributor in Brazil and expansion of
the disease in such country
10
4
Sphere
Orius
Stratego
Systhane
2
7
7
3
2004-05 market campaign
17
2004-end Rust in the United States
USA 1st world producer of soybean Soybean crops
73 million acres - North 33 million
acres - Centre 30 million acres -
South 10 million acres Cost per acre 20-25
US Source USDA, Isagro
Questions at 2004-end 1. Shall Rust over-winter?
? Yes 3. In what measure? 2. What will be
Farmers approach?
Cost for 2 treatments per year, at farmers level
18
Tetraconazole in the USA against Rust
FORMULATON
DISTRIBUTOR
Distribution and marketing agreement for Domark
on soybean with Valent (Arysta Group)
Market share objective at least 10
Dont just fight Rust. Dominate it.
COMPETITIVE SYSTEM
CONSUMPTION OF PRODUCT

• As per communicated estimates, 2005 sales to be
  completed by June 30st
• Weather conditions shall determine the level of
  consumption and of stocks at year-end (and 2006
  sales)
• Employ of product in period June-Agoust

• 14 Products authorised by E.P.A.
• 3 final registrations (Bravo, Echo, Quadris)
• 11 temporary authorisations (Bumper, Headline,
  Laredo, Folicur, Pristine, Propimax, Quilt,
  Stratego, Tetraconazole, Tilt)

19
Commercial campaigns 2005E and 2006Ein the USA
against soybean Rust
2005 and 2006 sales to be seen as first sales on
a brand new segment, influenced by weather
conditions
2005 ISAGROS SALES TO VALENT

• Estimated sales for 2005 provided by our
  distributor in the United States
• Budgeted orders already received 2005 estimated
  sales to be completed by June 30th, 2005

2005 VALENTS SALES TO FARMERS

• Sales to farmers depending upon weather
  conditions
• US weather 1H05 dry with low rain
• Commercial campaign to Farmers to take place in
  period June-August

2006 SALES

• 2006 sales depending upon weather conditions and
  2005 carry-over stocks

20
Asian Rust segment scenarios in the USA, at
maturity
External variables rain and wind situation
LOW
MEDIUM
MEDIUM-HIGH
2 treatments 50 cultivated areas
2 treatments 75 cultivated areas
2 treatments 90 cultivated areas
Southern States
Asian Rust diffusion and treatments
Central States
1,5 treatments 20 cultivated areas
1,5 treatments 40 cultivated areas
1,5 treatments 70 cultivated areas
Northern States
1 treatments 10 cultivated areas
1 treatments 25 cultivated areas
1 treatments 50 cultivated areas
Farmers level
223-279
413-516
660-825
Market value ( mio)
Distributor level
125-156
231-289
370-462
Including margins of dealers and national
distributor
21
Growth drivers launch of new products
22
From our Innovative Research...

• 51 patents witnessing the excellence of our
  Innovative Research
• 4 research facilities 80 professionals 2004 RD
  expenditure representing ?11 of proprietary
  products sales
• Main products invented Tetraconazole, Benalaxyl,
  Novaluron, Dimethoate, Ergostim, Phentoate...

NOVARA
Salerano
RD investments ( m)
(field trials)
Galliera
13.9
13.0
12.9
(field trials)
Corbetta
14
(biological products)
11
10
2005E
2003
2004
on Revenues from proprietary agropharma (Avg.
global players 8-10)
23
a rich pipeline of new products

• Preparation of registration dossiers in line with
  scheduled timetable
• General trend of longer bureaucratic timings
  within National Authorities

IR5878 (Orthosulfamuron) Herbicide Launch in 2006
IR6141 (Kiralaxyl) Fungicide Launch in 2006

• 3 RD high potential
• investigation lines
• Herbicide
• Induction of resistance
• Special nutrition

Remedier Biological Launch in 2006
Innovative Research
Launch and sales at regime
Pre-development
Development
Neoram W.G. Copper Fungicide Launched in 2004
IR6396
Herbicide
Launch after 2010
IR5885 Fungicide Launch in 2008
Hydroxide and AIRONE Copper Fungicides Launch in
2006
Status as at 31/12/2004
Partial cannibalisation of Benalaxyl after
2007-08
24
The incremental impact of new products a
conservative estimate

• Basic business still in growing phase, with fixed
  costs already at maturity
• Incremental margin from new products straight to
  bottom line, net of lower RD capitalisation

Revenues from new products million
58
46
26
19
2006E/2007E (2-year period)
2008E
2010E
2012E
25
IR5878 the first herbicide of Isagro

• Early post-emergence rice herbicide discovered
  and patented by Isagro Ricerca
• Excellent efficacy and ecotoxicological profile
• High versatility and compatibility with the main
  commercial herbicides
• In the business plan, only sales for direct rice
  cultivation system considered latest tests
  indicating potential use also on transplanted
  rice cultiv. systems (Japan)
• Fully complementary to Isagros existing product
  portfolio
• Potential use also on cereals
• Development status first registration expected
  in 2006/07 (depending on bureaucratic timings)
• Not subject to GMO competition

26
IR5878 results of field trials
IR5878
azimsulfuronq
bispyribac
quinclorac
uinclorac
ethoxysulfuron
imazosulfuron
penoxsulam
Grass weeds
E F F I C A C Y
Sedges
Broad leaves
SELECTIVITY
FLEXIBILITY OF
APPLICATION
Excellent performance
Good performance
Limited performance
27
IR5885 Isagros new top performing fungicide

• Anti-downy mildew fungicide discovered and
  patented by Isagro Ricerca
• Preventive, curative and eradicant activity
• Excellent efficacy and ecotoxicological profile
• High application flexibility and access to major
  markets (grape/potato/tomato and other
  horticultural crops)
• Fully complementary to Isagros existing product
  portfolio
• Product performance IR5885 has shown to be as
  effective or even more reliable than existing
  competitors or existing Isagro products
• Development status
• Long term studies/registration dossier to be
  completed by 2005-end
• First registrations expected in 2007/2008
  (depending on bureaucratic times)

28
IR5885 results of field trials
MODE OF ACTION
CROPS
CONTACT
PENETRANT
SYSTEMIC
GRAPES
POTATO
TOMATO
Azoxystrobin
Kresoxym
STROBILURINES
Trifloxistrobin
Benalaxyl-m
PHENYLAMIDES
Metalaxyl-m
IR5885
()
Benthiovalicarb
OTHER CLASSES
Iprovalicarb
Cymoxanyl
Fosethyl-Al
Excellent performance
Good performance
Limited performance
() local systemic
29
Conclusions
30
Investment case inertial growth andfurther
opportunities
From sales of Tetraconazole on Soybean/USA
Economic/financial growth from existing business

• 1

Strong operating leverage multiple effect on
cash flows
Further significant incremental impact to
results From launch of new products

• 2

From growing availability of additional financial
leverage New opportunities for growth
In addition

• 3

31
Stock information
32
Solid controlling structure ensures no risk of a
take-over
Piemme
Isagros controlling structure has been built up
so to guarantee
50,01
Managers Associates
B.P.U.
28,66
21,33

• no risk of a (hostile) take-over, to permit the
  coherence and the finalisation of the industrial
  project
• autonomy of the management, to guarantee an at
  arms length approach vis-à-vis any third party

Manisa
61,95
Sipcam SpA
Arysta CropScience
Bayer CropScience
Phyteurop SA
4,00
15,46
5,00
13,59
Holdisa
60
Isagro S.p.A.
Market 40
33
Stock information
Number of shares 16,000,000 IPO November
2003 Shares proposed during IPO 8,202,975 IPO
price range 4-5 per share Shares emitted
after IPO 4,000,000 IPO price 4 per
share Access to STAR segment November
2004 Dividend policy 40-45 net
result (excluding extraord. incomes) Last
dividend paid (may 2005) 0.24 per
share Corporate Governance fully compliant to
STAR rules Specialist Banca IMI
34
Contacts
For information, please contact
Ruggero Gambini Strategic Control Manager
Investor Relator tel. [phone] fax.
39.02.40901.353 email rgambini_at_isagro.it
Internet www.isagro.com
General information isagro_at_isagro.it
35
Disclaimer
Estimates, considerations, statements and
opinion, except for what referring to actuals,
are to be considered as data, estimates,
considerations, statements and opinion regarding
future, and have been elaborated and stated on
the basis of available information and/or on the
basis of those information considered the most
reliable and/or the most reasonable. Such data,
estimates, considerations, statements and opinion
could prove to be incomplete and/or wrong and
they incorporate elements of risk of uncertainty,
beyond the company control. For such reasons,
actual results may prove to differ versus Data,
estimates, considerations, statements and opinion
contained in such presentation. Such data,
estimates, considerations, statements and opinion
are not to be considered as a proposal of
investment, under any circumstances, in Isagros
shares. Any refer to Isagro products is to be
considered exclusively as general information
about the group activity and is not to be
intended, under any circumstances, as invitation
to employ or propose the employment of such
products.