Summary

Nick described the major investment themes within Agtech which in his view offer attractive long-term returns. Specifically these are (sectors followed by companies set to benefit) Precision ag/robotics - Deere/ AGCO, Biotech - DSM/Genus/Zoetis, Aquaculture - SalMar/Schouw, Waste, biofuels - Darling Ingredients/Verbio & Multiple agtech themes – Novozymes. Conversely, the Agtech companies under structural pressure from multiple headwinds are, Pesticides – Bayer, BASF, Cortiva Agriscience, FMC, Nufarm, and Syngenta. Fertilisers – CF Industries, Nutrien, OCI, and Yara International. Adoption rates of Agtech are accelerating amongst farmers which accounts for very large markets and high CAGRs leading to profitable investing. Agtech demands are being driven primarily as a solution to food industry dynamics (demand/supply), whilst this is prominent now, key challenges remain (Social license, Trust, Regulatory uncertainty). Agtech has 4 key themes, Precision ag (disrupting agchem industries), Robotics (huge opportunity for ag OEMs), Aquaculture (most investible agtech theme) & Foodtech (huge growth potential but returns likely to disappoint). Nick outlined the market potential, drivers/barriers to adoption and the investment themes to note. Dan presented 3 ideas, Long Salmar; offers sustainable growth & cost leadership offers high teens TSR. Being the only offshore Salmon farming company should drive better than 5% volume growth p/a over next 10 years. Long CNH Industrial; transition + AG-cycle + sustainability offers >20% upside. Exposed to the stronger growth precision ag & robotics - both offer farmers opportunity to cut inflationary input costs & do more with less. Lastly, Short Yara International; High cost, EU exposed producer & most to lose from more sustainable farming. Near & long-term disruptions are a risk to financial performance and largely undiscounted in current share price.

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