ISAGRO : BOD APPROVES 1H 2019 FINANCIAL RESULTS

PRESS RELEASE

ISAGRO BOD APPROVES HALF-YEAR RESULTS AS OF JUNE 30TH, 2019

which were affected by unfavourable market conditions,

with expectations of recovery by year-end

• Consolidated revenues: 73.1 Euro million (vs. 89.0 million of 1H 2018)
• Consolidated EBITDA: 5.0 Euro million (vs. 13.3 million of 1H 2018)
• Net result: 2.4 Euro million loss (vs. 5.4 million profit of 1H 2018)
• Net financial debt as of June 30th, 2019: 58.1 Euro million, out of which 5.6 Euro million due to the first adoption of the new accounting principle IFRS 16 (vs. 45.1 as of December 31st, 2018 and vs. 47.3 as of June 30th, 2018), with a debt/equity ratio of 0.63 (equal to 0.57 without IFRS 16 effect)

Milan, September 12th, 2019 - The Board of Directors of Isagro S.p.A. approved today the Consolidated Interim Financial Statements as of June 30th, 2019, which will be made available to the public following the terms and the modalities of the applicable Laws.

The Market and Isagro

The first six months of 2019 were characterized by market and weather conditions which were particularly unfavourable, with general downturns at distributor level (mainly in North America and Europe) and by a tightening of the regulatory picture in Europe, with consequent "phase-out" of different products in the European Union.

In this framework, Isagro, selling largely to national distributors, with North America and Europe representing its main markets, was particularly penalized, although with expectations of recovery in the fourth quarter, following the progressive normalization of external conditions.

1H 2019 consolidated financial results

In the first semester of 2019, Isagro registered:

• Revenues of 73.1 Euro million versus the 89.0 million of the first semester of 2018;
• an EBITDA of 5.0 Euro million versus the 13.3 million of the first semester of 2018;
• a Net result in loss for 2.4 Euro million versus the profit of 5.4 million of the first semester of 2018;

• a Net financial position of 58.1 Euro million, which includes the effect of the first adoption of IFRS 16 for 5.6 Euro million, versus the values of 45.1 Euro million and of 47.3 Euro million respectively as of December 31st, 2018 and as of June 30th, 2019 and with a debt/equity ratio of 0.63 (equal to 0.57 net of IFRS 16 effect).

The afore mentioned decrease of Revenues in 1H2019 versus 1H2018 was due to lower seasonal sales of Agropharma and Services (-10.9 Euro million versus 1H2018) in North America and Europe (notably in Italy) and to lower revenues from M/L Agreements (-5.0 Euro million versus 1H2018). The lower sales in North America (mainly represented by tetraconazole-based products) were due to high stock at distributor level at the beginning of the season, which triggered lower re-purchases in the semester, and to adverse weather conditions, which led to the delay of the start of the season itself. In Italy and Europe, moreover, the lower sales are attributable, in addition to the high levels of stock of copper products at distributor level, also to the recent tightening of the regulatory picture (re-registrations).

Perspectives and strategic direction

With reference to the full year 2019 perspectives, Isagro estimates a level of sales from Agropharma and Services lower but not far from the value of the 12 months of 2018, with a recovery concentrated in the fourth quarter mainly thanks to the expectation of higher sales in the MEA area (Middle East and Africa) and South America, while it is confirmed the lower contribution from M/L Agreements versus the previous year.

With regard to medium-long term perspectives (2021), Isagro confirms, on a like-for-like basis, the expectation of an important growth based in particular on the new fungicide Fluindapyr, whose sales are expected to start next year; further, Fluindapyr was included in the priority list for the "fast-track" registration procedure in the important Brazilian market.

Isagro, moreover, after having already communicated in the past its strategic decision to no longer invest in the development of new organic chemical molecules originated from its own Innovative Research, is further revising the business model: in this frame, the Company is also taking into consideration extraordinary operations aimed at better valorising corporate assets and, through the resources thus generated, at accelerating a higher strategic focus on biorationals.

In this frame, it shall be remembered the acceptance by Isagro of a binding offer received by PI Industries for the divestment to the latter of the entire stake in the fully controlled company Isagro Asia Private Limited, already communicated separately to the Market.

Other information

• At July-end Gowan (related party), Isagro and Piemme signed a settlement agreement which led to the cancellation of the Framework Agreement arbitration and to the amendment of the provision in the existing distribution agreements, confirming the deadline irrespective of any event involving Gowan's

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equity interest in Holdisa. The transaction, in compliance with the Procedure for transactions with

related parties adopted by Isagro, was approved by Isagro's Board of Directors in the meeting held on July 31st, 2019, following the favorable opinion expressed by the Independent Directors' Committee.

• The Manager charged with preparing the company's financial reports, Ruggero Gambini, hereby certifies, pursuant to Article 154-bis, paragraph 2 of the Consolidated Law on Finance, that the financial information in this press release is consistent with the entries in the accounting books and records.

Isagro S.p.A., an independent company from 1993 with Montecatini/Montedison origin, today leads a Group operating in research, development, production and distribution of agropharmaceuticals (the products for the protection and development of crops) with sales in 80 countries amounting around € 150 million (of which 4/5 outside Italy) and around 650 employees worldwide. Isagro is based on the Innovative Research of new molecules, carried out in its Research Center of Novara, and invests in R,I&D activities around 10% of annual turnover. The Group has 5 manufacturing sites (4 in Italy and 1 in India) and distributes directly its products in some selected markets, developing at the same time local presences for marketing and regulatory support.

Isagro operates with a unique business model in the agrochemical Industry, proposing itself as a supplier of innovative products originated by its own Research. Isagro, in fact, associates to the direct exploitation of its Intellectual Property also an indirect exploitation, through agreements with Third Parties attributing to them rights on a territorial basis and/or for mixtures with their active ingredients.

Isagro S.p.A., listed on the Milan Stock Exchange since 2003 and on the STAR - High Requirements Stock Segment - since 2004, in 2014 has issued Growth Shares, an innovative category of special shares specifically conceived for companies having a Controlling Subject. Their main characteristics are the absence of voting rights, an extra-dividend vs. Ordinary Shares (20% in the case of Isagro) and the automatic conversion into Ordinary Shares in the ratio 1:1 in any case of loss of controlling stake and/or of Compulsory Public Offer.

	For more information:
Ruggero Gambini	Erjola Alushaj
Chief Financial Officer	Group	Financial	Planning	&
Tel. [phone]	Coordination and IR Manager
	Tel. [phone]

[e-mail] www.isagro.com

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CONSOLIDATED PROFIT & LOSS STATEMENT AS OF JUNE 30TH, 2019

	1° Semester	1° Semester	Differences	Year
(€ 000)	2019	2018	2018
Revenues from sales and services	73,054	89,045	-15,991	-18.0%	152,771
Other revenues and income	1,740	2,144	-404		3,922
Consumption of materials and external services	(59,686)	(67,691)	+8,005		(115,336)
Variations in inventories of products	4,495	5,784	-1,289		1,456
Costs capitalized for internal works	740	1,025	-285		1,945
Allowances and provisions	374	(1,186)	+1,560		(821)
Labour costs	(15,286)	(14,959)	-327		(28,964)
Bonus accruals	(457)	(814)	+357		(949)
EBITDA	4,974	13,348	-8,374	-62.7%	14,024
% on Revenues	6.8%	15.0%			9.2%
Depreciation and amortisation:
- tangible assets	(1,495)	(1,792)	+297		(3,405)
- intangible assets	(3,239)	(2,794)	-445		(5,911)
- right-of-use asset IFRS 16	(603)	-	-603		-
- write-down of tangible and intangible assets	(688)	(7)	-681		(265)
EBIT	(1,051)	8,755	-9,806	N/S	4,443
% on Revenues	-1.4%	9.8%			2.9%
Interests, fees and financial discounts	(346)	(109)	-237		(247)
Exchange gains/(losses) and derivatives	74	(378)	+452		(1,199)
Revaluations of equity investments	168	109	+59		200
Result before taxes	(1,155)	8,377	-9,532	N/S	3,197
Current and deferred taxes	(1,292)	(2,946)	+1,654		(2,734)
Net result of
continuing operations	(2,447)	5,431	-7,878	N/S	463
Net result of discontinued operations	-	-	-		(100)
Net result	(2,447)	5,431	-7,878	N/S	363

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CONSOLIDATED BALANCE SHEET AS OF JUNE 30TH, 2019

(€ 000)	June 30, 2019	Dec. 31, 2018	Differences		June 30, 2018
Net fixed assets
Goodwill	3,347	3,308	+39		3,437
Other intangible assets	49,148	49,510	-362		50,540
Tangible assets	18,351	19,228	-877		19,572
Right-of-use asset IFRS 16	6,109	-	+6,109		-
Financial assets	695	593	+102		502
Other medium/long terms assets and liabilities	12,272	11,256	+1,016		12,483
Total net fixed assets	89,922	83,895	+6,027	+7.2%	86,534
Net current assets
Inventories	52,466	48,097	+4,369		52,014
Trade receivables	42,376	39,823	+2,553		50,133
Trade payables	(35,759)	(32,696)	-3,063		(39,420)
Subtotal Net working capital	59,083	55,224	+3,859		62,727
Current provisions	(620)	(1,151)	+531		(1,162)
Other current assets and liabilities	4,495	4,363	+132		2,191
Subtotal Other assets and liabilities	3,875	3,212	+663		1,029
Total net current assets	62,958	58,436	+4,522	+7.7%	63,756
Invested capital	152,880	142,331	+10,549	+7.4%	150,290
Severance Indemnity Fund (S.I.F.)	(2,468)	(2,384)	-84	+3.5%	(2,428)
Net invested capital	150,412	139,947	+10,465	+7.5%	147,862
Held for sale non-financial assets
and liabilities	-	-	-		-
Total	150,412	139,947	+10,465	+7.5%	147,862
financed by:
Equity
Capital stock	24,961	24,961	-		24,961
Reserves and retained earnings	79,442	79,820	-378		80,411
Translation difference	(9,645)	(10,314)	+669		(10,198)
Profit /(Loss) of the Group	(2,447)	363	-2,810		5,431
Total equity	92,311	94,830	-2,519	-2.7%	100,605
Net financial position
Medium/long term debts:
- due to banks	38,861	37,855	+1,006		43,290
- due to other lenders	1,294	1,254	+40		1,411
- financial liabilities ex IFRS 16	4,506	-	+4,506		-
- other financial liabilities/(assets), IRS and trading
derivatives	(2,477)	(2,497)	+20		(2,495)
Total medium/long term financial debts	42,184	36,612	+5,572	+15.2%	42,206
Short-term debts:
- due to banks	37,893	38,511	-618		45,283
- due to other lenders	2,760	1,738	+1,022		2,956
- financial liabilities ex IFRS 16	1,126	-	+1,126		-
- other financial liabilities/(assets), IRS and trading
derivatives	(14,225)	(13,825)	-400		45
Total short-term financial debts	27,554	26,424	+1,130	+4.3%	48,284
Cash and cash equivalents	(11,637)	(17,919)	+6,282	-35.1%	(43,233)
Total net financial position	58,101	45,117	+12,984	+28.8%	47,257
Total	150,412	139,947	+10,465	+7.5%	147,862

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