Nufarm "Greener pastures ahead" (Buy) Park

Research evidence excerpt

Nufarm "Greener pastures ahead" (Buy) Park

Nufarm UBS Research

>20% earnings upgrade in FY27E and FY28E

We lower our FY26E revenue to reflect FX headwinds and weather-related impacts. This

lowers our revenue forecasts by 6-7% over the forecast period. However, we are

factoring in higher margins, particularly with respect to Crop Protection which is further

supported by solid growth in Hybrid Seeds and a turnaround in Emerging Platforms. We

are encouraged by NUF's focus on pursuing opportunities pertaining to premium

products with respect to Crop Protection as well as expansion of the bp arrangement

with respect to Carinata leading to higher licensing revenue. Our FY26E EBITDA is raised

slightly to A$387mn but we factor in FX losses from hedging instruments into our

forecasts which see >20% cuts to our FY26E NPAT and EPS forecasts. However, we note

that in FY27 and FY28, our NPAT and EPS forecasts are raised in excess of 20%. Given a

myriad of earning growth and margin expansion drivers (i.e., premiumisation of Crop

Protection portfolio, swift turnaround in Emerging Platforms, improving AgChem prices,

higher licensing revenue and cost-out programs), we think risk is likely to the upside.

Figure 1: NUF - Forecast change summary

NUF - Foreca st cha nge su mma ry

Source: UBS estimates

Emerging Platforms earnings guidance upgrade could be

conservative

In 1H FY26, licensing revenue has stepped up by ~13% yoy and up 95% vs

2H FY25.This represents ~65% of Emerging Platforms revenue for the half and ~9% of

Seed Tech revenue. While there are some costs associated with maintenance of

Carinata, we think margins on licensing revenue could be materially higher than

overall Seed Tech margins. We note that NUF is looking for ~A$40mn EBITDA