How Is Nufarm Turning Seed Setbacks Into Crop Protection Gains?
Nufarm reported a mixed FY25 with strong crop protection profits offset by a statutory loss from seed restructuring, while targeting earnings growth and debt reduction in FY26.
- Revenue up 3% to $3.4 billion
- Underlying EBITDA down 3% to $302 million, excluding emerging platforms up 18%
- Statutory net loss of $165 million due to non-cash seed technology impairments
- Net debt reduced by $538 million in second half, leverage at 2.7x aiming for 2.0x in FY26
- Seed Technologies strategy reprioritised focusing on hybrid seeds and cash flow discipline
Strong Crop Protection Performance
Nufarm Limited closed FY2025 with a solid performance in its core crop protection business, delivering an 18% increase in underlying EBITDA excluding emerging platforms. This growth was driven by all regions, notably a record profitability year in North American Turf & Ornamental and Asia, alongside a 22% EBITDA uplift in Europe. The company benefited from improved pricing, favorable product mix, and operational efficiencies, including a 16-day reduction in inventory days, which contributed to stronger margins.
Seed Technologies, Strategic Reset and Cost Discipline
While crop protection thrived, the Seed Technologies segment faced headwinds, resulting in a statutory net loss of $165 million, primarily due to $142 million in mainly non-cash material items linked to a comprehensive review and restructuring. Nufarm has reprioritised this segment, focusing on growing hybrid seeds in key regions such as Australia and South America, streamlining European and North American operations, and adopting a capital-light approach for emerging platforms like Bioenergy and Omega-3. The Omega-3 platform, impacted by lower fish oil prices, is being repositioned to achieve cash flow neutrality in the near term.
Financial Health and Debt Reduction
Financial discipline was a highlight, with net debt reduced by $538 million in the second half of FY25 despite some currency headwinds and inventory funding for Omega-3. Leverage rose to 2.7 times underlying EBITDA but is targeted to fall to approximately 2.0 times by the end of FY26. The company achieved $50 million in run-rate cost savings and expects capital expenditure to remain below $200 million in FY26, supporting positive free cash flow generation and further deleveraging.
Outlook, Confident in Growth and Efficiency
Looking ahead, Nufarm is confident in continued earnings growth driven by crop protection momentum and hybrid seeds expansion. The company plans to maintain a disciplined focus on working capital efficiency, cost control, and capital allocation. With a diversified and flexible debt maturity profile and strong liquidity, Nufarm aims to sustain its financial health while investing selectively in innovation and growth opportunities.
Overall, FY25 was a year of transformation and consolidation for Nufarm, balancing robust operational performance with strategic realignment and financial prudence.
Bottom Line?
Nufarm’s FY25 sets the stage for a leaner, more focused company poised for earnings growth and debt reduction in FY26.
Questions in the middle?
- How will the repositioning of Omega-3 impact Nufarm’s medium-term cash flow and profitability?
- What specific product launches in crop protection are expected to drive near-term revenue growth?
- How will currency fluctuations and global market conditions affect Nufarm’s FY26 financial targets?
