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Bioceres Crop Solutions Reports Fiscal First Quarter 2023 Financial and Operational Results

Revenues increased 71% compared to 1Q22 pro forma numbers

1Q23 Adjusted EBITDA nearly doubled YoY, reaching $73 million on an LTM basis after excluding HB4 pre-launch costs

Announced agreement with Syngenta Seedcare supporting inoculant growth internationally

Bioceres Crop Solutions Corp. (Bioceres) (NASDAQ: BIOX), a fully integrated provider of crop productivity solutions designed to enable the transition of agriculture towards carbon neutrality, announced financial results for the fiscal first quarter ended September 30, 2022. Financial results are expressed in U.S. dollars and are presented in accordance with International Financial Reporting Standards. All comparisons in this announcement are year-over-year (YoY), unless otherwise noted.

FINANCIAL & BUSINESS HIGHLIGHTS

  • Total revenues in 1Q23 were $127.1 million, a 71% increase with respect to the comparable pro forma numbers for the first quarter of last year, which are inclusive of historical revenues from Pro Farm. Top line growth was driven by continued outstanding performance in micro-beaded fertilizers, as well as inoculants, adjuvants and third-party products.
  • Gross profit for the quarter increased 52% year over year compared to 1Q22 pro forma numbers, reaching $51.4 million, with all three product segments contributing to gross profit growth.
  • Adjusted EBITDA for the quarter was $24.5 million, nearly doubling last year’s quarterly result, reflecting strong top line and gross profit growth.
  • The company announced an agreement with Syngenta Seedcare for the development and commercialization of certain biological seed treatments. The partnership will drive global expansion, sustain double digit growth in the category, and provide a baseline of minimum profit sharing over the life of the agreement. Additionally, an upfront payment of $50 million was received in early October 2022.
  • HB4 Wheat harvest and Soy planting are beginning in Latin America, a season characterized by a very severe drought. HB4 Soy hectares more than double year ago seed multiplication level, for early season plantings. Two soybean varieties are being scaled in Brazil for an upcoming launch in this territory.
  • Merger with Pro Farm triggers adoption of the U.S. dollar as the functional currency in main operational subsidiaries, starting in 1Q23. The Pro Farm merger and subsequent business integration drove a functional currency switch from local currency to the U.S. dollar in the main Argentine subsidiaries, whose operations are carried out almost exclusively in U.S. dollars. The shift eliminates the need for IAS 29 inflationary adjustments going forward.
  • Completion of previously announced $5 million share buy-back program. Program to be extended through the approval of an additional $5 million.

MANAGEMENT REVIEW

Mr. Federico Trucco, Bioceres´ Chief Executive Officer, commented: “We are delighted to report on a fantastic beginning to FY23, with revenues growing 71% for the quarter and adjusted EBITDA almost doubling for the period. This achievement is even more remarkable after six consecutive quarters of revenue expansion. Severe drought conditions in Argentina may transiently slow down sales in the current quarter for our core portfolio, an impact which we expect to be partially moderated with Pro Farm sales in North America and Europe. At the same time, the drought is creating a unique opportunity to showcase HB4 technology, with the country-wide wheat crop decline expected to be at the 40% level compared to last year’s harvest. We are also making good progress with HB4 Soy breeding and multiplication efforts, with early season plantings well under way and, with two varieties being scaled in Brazil for an upcoming launch with multipliers in this important geography.”

Trucco continued, “As exciting and promising as these data points may be, they are not the highlights of the quarter. In 1Q23 we have closed two transactions that give us an unmatched platform for future growth in biological ag inputs, positioning our company as a clear leader in sustainable solutions for the agriculture of the future. With the integration of Pro Farm (formerly Marrone Bio Innovations), we now have an existing portfolio - or pipeline - of products designed to replace or significantly reduce the use of synthetic chemicals in most functions for which they are required in high productivity agriculture. Where we can most immediately achieve this substitution is in the seed care segment of the industry, a $4-5 billion market where biologicals have already achieved a 20% penetration. And we are starting this journey with the recent announcement of a long-term collaboration agreement with one of the segment leaders, Syngenta.”

“We have been collaborating with Syngenta Seedcare for 20 years in Argentina and have jointly achieved and held the #1 position for our inoculants, bio fungicides and Syngenta molecules for a long time. This new collaboration creates the right structure to expand this success internationally, at an accelerated pace. We expect the international revenues generated by our inoculants alone to at least double in the next two years. While Syngenta will now cover working capital needs as well as sales and marketing activities, we have secured minimum profits that average $23 million per year over the life of the agreement, not including an upfront fee of $50 million in exchange for the different rights granted for the collaboration. On top of these annual minimum profits, we will receive between 50% and 30% of the incremental profits generated by the collaboration, depending on the geography and the year. The collaboration is not just designed to maximize our commercial reach, but it is also focused on accelerating our R&D efforts, with Syngenta covering 70% of the R&D investments required for early pipeline products and new products that we may opt to develop jointly within this framework." Trucco finished by adding, “we want to thank Syngenta Seedcare leadership for their trust and hard work to get to this point and reassure them of our full commitment to the success of this joint endeavor.”

Mr. Enrique Lopez Lecube, Bioceres´ Chief Financial Officer, noted, “This was an extremely important quarter from a strategy standpoint. We started the fiscal year on a strong note with the completion of the merger with Pro Farm and made considerable progress on our integration and synergy efforts throughout the quarter. Simultaneously we executed an ironclad agreement with Syngenta Seedcare that solidifies a profitable long-term growth path for our inoculants. These two milestones put us in a unique position to structurally benefit from the secular growth trend and high profitability profile that biologicals offer. Our first quarter financial performance continued to build on past execution, adding a 71% top line expansion to the already outstanding 62% growth reported for our last full fiscal year. Importantly, this growth transcended revenues and brought a record-high $24.5 million Adjusted EBITDA for the quarter, even as we account for HB4 inventory ramp-up costs and negative EBITDA from Pro Farm. Our balance sheet and cash position remain strong, particularly after the issuance of the $55 million convertible notes in July, followed by the $50 million upfront payment received from Syngenta in early October”. Lopez Lecube added, “Despite severe weather conditions currently affecting farmers in an important end market like Argentina, our strong first quarter results and the revenue diversification we gained from Pro Farm, make us feel confident about the growth outlook for the full fiscal year. We will remain focused on executing our HB4 strategy and making Pro Farm assets EBITDA contributors before year end”.

KEY FINANCIAL METRICS

(In millions of U.S. dollars, unless where otherwise stated)

Table 1: 1Q23 Key Financial Metrics

1Q23

1Q22 Pro Forma 1

1Q23

% Change

Revenue by Segment

 

 

 

Crop Protection

41.0

63.0

54%

Seed and Integrated Products

8.7

13.8

59%

Crop Nutrition

24.8

50.3

103%

Total Revenue

74.5

127.1

71%

Gross Profit

33.9

51.4

52%

Gross Margin

45.5%

40.5%

(505 bps)

1. 1Q22 pro forma financials include Pro Farm historical numbers and Bioceres comparable metrics.

 

1Q22

1Q23

% Change

Adjusted EBITDA

12.4

24.5

98%

HB4 ramp-up cost

1.9

1.0

(48%)

Adjusted EBITDA excluding HB4 ramp-up cost2

14.4

25.5

78%

2. Only excludes HB4 ramp-up cost. The remaining HB4 operating expenses are included in the Adjusted EBITDA metric.

1Q23 – Summary: 1Q23 was an outstanding quarter with revenues increasing 71% to $127.1 million when compared to 1Q22 pro forma revenues that include historical sales from Pro Farm. Top-line growth was driven by continued strong performance in micro-beaded fertilizers, as well as adjuvants, third-party products, and seed treatment packs. Gross profit increased 52%, with an overall growth margin of 40.5%. Adjusted EBITDA nearly doubled at $24.5 million. This number includes the effect of HB4 ramp-up costs and negative EBITDA from Pro Farm.

For a full version of Bioceres first quarter 2023 earnings release, click here.

FIRST QUARTER 2023 EARNINGS CONFERENCE CALL

Management will host a conference call and question-and-answer session, which will be accompanied by a presentation available during the webcast or accessed via the investor relations section of the company’s website.

To access the call, please use the following information:

Date:

Thursday, November 10, 2022

Time:

8:30 a.m. EST, 5:30 a.m. PST

Toll Free dial-in number:

1-844-200-6205

Toll/International dial-in number:

1-929-526-1599

Conference ID:

941140

Webcast:

Click here

Please dial in 5-10 minutes prior to the start time to register and join.

The conference call will be broadcast live and available for replay here and via the investor relations section of the company’s website here.

A replay of the call will be available through November 15, 2022, following the conference.

Toll Free Replay Number:

1-866-813-9403

International Replay Number:

+44 204 525 0658

Replay ID:

062915

About Bioceres Crop Solutions Corp.

Bioceres Crop Solutions Corp. (NASDAQ: BIOX) is a fully integrated provider of crop productivity technologies designed to enable the transition of agriculture towards carbon neutrality. To do this, Bioceres’ solutions create economic incentives for farmers and other stakeholders to adopt environmentally friendlier production practices. The Company has a unique biotech platform with high-impact, patented technologies for seeds and microbial ag-inputs, as well as next generation Crop Nutrition and Protection solutions. Through its HB4® program, the Company is bringing digital solutions to support growers’ decisions and provide end-to-end traceability for production outputs. For more information, visit here.

Forward-Looking Statements

This communication includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include estimated financial data and, among others, statements related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses by governments, clients and the Company, on our business, financial condition, liquidity position and results of operations, and any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions and uncertainties. These forward-looking statements include, but are not limited to, whether (i) the health and safety measures implemented to safeguard employees and assure business continuity will be successful, (ii) the uncertainty related to COVID-19 in the farming community will be short lived, and (iii) we will be able to coordinate efforts to ramp up inventories. Such forward-looking statements are based on management’s reasonable current assumptions, expectations, plans and forecasts regarding the Company’s current or future results and future business and economic conditions more generally. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievement of the Company to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that actual results will not differ materially from management’s expectations or could affect the Company’s ability to achieve its strategic goals, including the uncertainties relating to the impact of COVID-19 on the Company’s business, operations, liquidity and financial results and the other factors that are described in the sections entitled “Risk Factors” in the Company's Securities and Exchange Commission filings updated from time to time. The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. All forward-looking statements contained in this release are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are or were made, and the Company does not intend to update or otherwise revise the forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, except as required by law.

Unaudited Consolidated Statement of Comprehensive Income

(Figures in U.S. dollars)

 

 

Three-month period

ended 09/30/2022

Three-month period

ended 09/30/2021

 

Total revenue

127,105,318

66,906,245

 

Cost of sales

(75,675,878)

(37,882,453)

Gross profit

51,429,440

29,023,792

 

% Gross profit

40%

43%

Operating expenses

(35,756,924)

(17,614,742)

 

Share of profit of JV

842,240

(222,236)

Other income or expenses, net

478,041

(1,146,617)

Operating profit

16,992,797

10,040,197

 

Finance result

(8,326,449)

(5,179,668)

 

Profit before income tax

8,666,348

4,860,529

 

Income tax

(4,754,347)

(2,595,313)

 

Profit for the period

3,912,001

2,265,216

 

Other comprehensive profit / (loss)

(7,213)

5,729,137

 

Total comprehensive Profit

3,904,788

7,994,353

 

 

 

 

 

Profit for the period attributable to:

 

 

 

Equity holders of the parent

498,297

874,137

 

Non-controlling interests

3,413,704

1,391,079

 

3,912,001

2,265,216

 

Total comprehensive profit attributable to:

 

 

 

Equity holders of the parent

414,561

5,722,061

 

Non-controlling interests

3,490,227

2,272,292

 

3,904,788

7,994,353

 

Unaudited Consolidated Statement of Financial Position

(Figures in U.S. dollars)

 

ASSETS

09/30/2022

06/30/2022

CURRENT ASSETS

 

 

Cash and cash equivalents

47,387,568

33,475,266

Other financial assets

3,930,613

5,401,133

Trade receivables

142,754,854

111,752,310

Other receivables

22,957,655

19,327,584

Income and minimum presumed income taxes recoverable

1,567,204

1,647,398

Inventories

141,910,323

126,044,122

Biological assets

1,026,744

57,313

Total current assets

361,534,961

297,705,126

NON-CURRENT ASSETS

 

 

Other financial assets

1,074,005

619,841

Trade receivables

5,076

200,412

Other receivables

3,163,404

2,254,199

Income and minimum presumed income taxes recoverable

109,175

44,412

Deferred tax assets

4,120,745

4,011,374

Investments in joint ventures and associates

39,629,317

38,554,092

Property, plant and equipment

62,807,699

49,908,325

Intangible assets

174,493,490

76,704,869

Goodwill

123,981,288

36,073,685

Right-of-use leased asset

14,224,682

12,144,026

Total non-current assets

423,608,881

220,515,235

Total assets

785,143,842

518,220,361

LIABILITIES

09/30/2022

06/30/2022

CURRENT LIABILITIES

 

 

Trade and other payables

138,810,191

125,849,620

Borrowings

74,733,602

71,301,468

Employee benefits and social security

11,785,442

7,619,121

Deferred revenue and advances from customers

6,377,194

5,895,313

Income tax payable

6,357,991

7,538,764

Consideration for acquisition

2,418,847

3,048,562

Lease liabilities

2,769,144

1,412,904

Total current liabilities

243,252,411

222,665,752

NON-CURRENT LIABILITIES

 

 

Borrowings

81,778,391

74,177,169

Investments in joint ventures and associates

850,065

717,948

Deferred tax liabilities

45,073,540

29,005,943

Provisions

5,052,363

603,022

Consideration for acquisitions

11,502,897

9,854,228

Convertible notes

71,362,653

12,559,071

Lease liability

11,516,213

10,338,380

Total non-current liabilities

227,136,122

137,255,761

Total liabilities

470,388,533

359,921,513

EQUITY

 

 

Equity attributable to owners of the parent

280,512,784

127,358,573

Non-controlling interests

34,242,525

30,940,275

Total equity

314,755,309

158,298,848

Total equity and liabilities

785,143,842

518,220,361

 

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