Third Quarter 2020
Earnings Call Presentation
12thMay 2020
Disclaimer And Forward-Looking Statement
This Presentation is for informational purposes only and does not constitute an offer or invitation to sell, a solicitation of an offer to buy, or a recommendation to purchase any equity, assets, business, debt or other financial instruments of the Company or any of its affiliates, and shall not form the basis of any contract, nor shall it be construed in any manner as a commitment on the part of any person to proceed with any transaction. Any reproduction of this Presentation, in whole or in part, or the disclosure of its contents, without the prior consent of the Company is prohibited. By accepting this Presentation, each recipient agrees to use this Presentation for the sole purpose of evaluating.
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 information and , among others, statements related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, 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. 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, include the uncertainties relating to the impact of COVID-19 on the Company's business, operations 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. Therefore, you should not rely on any of these forward-looking statements. 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.
Industry and Market Data
Unless otherwise noted, the forecasted industry and market data contained in the assumptions for the projections are based upon the Company's management estimates and industry and market publications and surveys. The information from industry and market publications has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. The Company has not independently verified any of the data from third-party sources, nor has the Company ascertained the underlying economic assumptions relied upon therein. While such information is believed to be reliable for the purposes used herein, none of the Company, its affiliates, their respective directors, officers, employees, members, partners, shareholders or agents makes any representation or warranty with respect to the accuracy of such information. These materials are highly sensitive and confidential and being supplied to you solely for your information and for use in this Presentation.
Financial Information Presentation
Historical financial information of Bioceres has been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS"). Investors should note that IFRS differs from generally accepted accounting principles in the United States ("US GAAP"), and investors should consult their own professional advisors for an understanding of the difference between IFRS and US GAAP and how those differences might affect such financial statements.
Use of Non-IFRS Financial Measures
This Presentation includes certain non-IFRS financial measures. These non-IFRS measures are an addition, and not a substitute for or superior to measures of financial performance prepared in accordance with IFRS and neither should be considered as an alternative to net income, operating income or any other performance measures derived in accordance with IFRS or as an alternative to cash flows from operating activities as a measure of our liquidity.
The Company believes that these non-IFRS measures of financial results provide useful supplemental information to investors about the Company and its results. The Company's management uses these non-IFRS measures to evaluate the Company's financial and operating performance and make day-to-day financial and operating decisions. The Company also believes that these non-IFRS measures are helpful to investors because they provide additional information about trends in the Company's core operating performance prior to considering the impact of capital structure, depreciation, amortization and taxation on its results. However, there are a number of limitations related to the use of these non-IFRS measures and their nearest IFRS equivalents. For example, other companies may calculate non-IFRS measures differently, or may use other measures to calculate their financial performance, and therefore the Company's non-IFRS measures may not be directly comparable to similarly titled measures of other companies.
In this presentation, we discuss non-IFRS measures as forward-lookingnon-IFRS measures.
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2
3Q Highlights
- COVID-19:Business Continuity and Crisis committees summoned as of March 16th. Activity excepted from mandatory quarantine
- Comparable Revenues +9% YoY
- Growth across key product lines and despite temporary
COVID-19 impact
- Further penetration of target international markets
- Raised $50 million, strengthening financial flexibility and ability to accelerate build and launch of EcoSoy™ and EcoWheat™
- Advancing HB4® program
- Ramping up inventories and further validating value proposition
3
HB4®Inventory Ramp-up: Working Capital Cycles
Up to $30m needed for inventory ramp-up to enable FY2022 broad-acre launches in Soy and Wheat
FY 2021
12,000 ha - $9.1m
Logistics
Seed
treatment
Storage | |
end | |
Storage | |
begin | |
Harvest | |
Data | Field |
gathering | |
Planting | |
Labors |
Crop cycle
labors
FY 2020
3,000 ha - $2.2m
(50% from JV partner)
FY 2021
20,000 ha - $14.7m (low)
(50% from JV partner)
60,000 ha - $44.1m (high)
(50% from JV partner)
The schematics shows a typical cycle for EcoWheat production. Product and dates variation could exist between EcoWheat and EcoSoy production.
4
Update on EcoSoy and EcoWheat
EcoSoy
- Pre-commercialvarieties showcased at ExpoAgro 2020, attended by over 100,000 South American growers
- High number of early adopters registered for next cycle of seed multiplication further validates attractiveness of varieties' value proposition
- Harvest underway, 30% of total planted area has been harvested
EcoWheat
- Ready to plant 12,000 hectares during upcoming winter campaign
Geographical proposal for EcoWheat planting
Northern, 6.6%
Litoral, 1.5%
Center, 18,7%
Western, 71.6%
3
EcoWheat varieties to be distributed in the pre-selected environments
5
A 360°Detailed View of EcoFields
Extensive and detailed dataset on each EcoField available for crop monitoring and data science opportunities, gathered by OkaraTech digital platform
Production stability | Productive environments | Daily meteorological data |
Soil moisture data(During April for Soybean crop)
Rainfall data
Crop nutritional status
Biomass comparison over time
21/12/19 | 07/01/20 | 15/01/20 | 17/01/20 | 25/01/20 | 04/02/20 | 11/02/20 | 21/02/20 |
24/02/20 | 26/02/20 | 05/03/20 | 10/03/20 | 20/03/20 | 14/04/20 | 19/04/20 | 29/04/20 |
Powered by
6
Execution of International Expansion Strategy Driving Top Line Growth
Comparable Segment Revenues ($ in millions) YoY
- Revenues largely linked to US dollar, except in Brazil
- 3Q20 +9%, deeper penetration of crop protection markets in Brazil, Bolivia, Paraguay and Uruguay, strong contribution from packs and inoculants sales in Europe, plus ongoing recovery of seed treatment packs in Argentina
- 9M20 +8%,on continued growth across three business segments: i) adjuvant expansion in Brazil and Paraguay ii) higher seed treatment packs sales in Southern Cone, Europe and South Africa; iii) continued Micro-beaded fertilizer ramp-up
+8%Comparable | ||||||||||
+13% As Reported | ||||||||||
124.9 | ||||||||||
+9%Comparable | 122.3 | |||||||||
+37% As Reported | 113.2 | |||||||||
110.8 | ||||||||||
26.0 | ||||||||||
25.7 | ||||||||||
23.9 | 18.7 | |||||||||
Comparable | Reported | Comparable | Reported | Comparable | Reported | Comparable | Reported | |||
3Q19 | 3Q20 | 9M19 | 9M20 |
7
Crop Protection Highlights
Comparable Segment Revenues ($ in millions) YoY
- 3Q20 +4%, higher sales of adjuvants and biological therapics in Brazil, Bolivia, Paraguay and Uruguay, partially offset by lower adjuvant, insecticide and fungicide sales in Argentina, due to mild pest conditions
- 9M20 +8%,on consistent execution of adjuvant growth plan in Brazil and Paraguay and stable adjuvant market in Argentina. Higher sales of biological therapics and other crop protection products in Argentina
+8% Comparable | +14% As Reported | ||||||||||||||
+4% Comparable | |||||||||||||||
+26% As Reported | 67.7 | ||||||||||||||
66.0 | |||||||||||||||
61.1 | |||||||||||||||
59.6 | |||||||||||||||
16.7 | |||||||||||||||
16.6 | |||||||||||||||
16.1 | |||||||||||||||
13.2 | |||||||||||||||
Comparable | Reported | Comparable | Reported | Comparable | Reported | Comparable | Reported | ||||||||
3Q19 | 3Q20 | 9M19 | 9M20 |
8
Seed & Integrated Products Highlights
Comparable Segment Revenues ($ in millions) YoY
- 3Q20 +98%,on heightened commercial efforts in Europe driving significant packs sales growth as the Company captured acreage shift towards soybeans; sustained recovery of packs in Argentina
- 9M20 +7%, higher seed treatment pack1sales in Paraguay, Uruguay, Europe and South Africa; partial recovery in Argentina, where weather and macro uncertainty during 2Q and 3Q affected planting decisions
7% Comparable | ||||||||||||||
+98% Comparable | 13% As Reported | |||||||||||||
+217% As Reported | ||||||||||||||
23.5 | ||||||||||||||
22.6 | ||||||||||||||
21.1 | ||||||||||||||
20.8 | ||||||||||||||
4.1 | 4.0 | |||||||||||||
2.1 | Reported | Reported | ||||||||||||
1.3 | Comparable | Comparable | Reported | Comparable | ||||||||||
Comparable | ||||||||||||||
3Q19 | Reported | 3Q20 | 9M19 | 9M20 | ||||||||||
Note:
1. Sales in this segment benefited from the partial reclassification of inoculants, which had been stand-alone products and previously reported under crop nutrition segment
9
Crop Nutrition Highlights
Comparable Segment Revenues ($ in millions) YoY
- 3Q20-10%,customers postponed pre-seasonal purchases of micro-beaded fertilizers in Argentina and Brazil due to short-lived uncertainty from Covid-19. Partially offset by recovery in fertilizer sales in Bolivia, higher inoculant sales in US and Europe
- 9M20 +9%,on greater demand for micro-beaded fertilizers in Argentina, Brazil, Paraguay, Uruguay and Bolivia
+9% Comparable
+11% As Reported
-10% Comparable | 33.7 | 33.8 | ||||
18% As Reported | ||||||
31.0 | ||||||
30.4 | ||||||
5.8 | 5.2 | ||||
5.0 | |||||
4.3 | |||||
Comparable | Reported | Comparable Reported | Comparable Reported | Comparable Reported | ||||||||
e | 3Q20 | 9M19 | 9M20 | |||||||||
3Q19 | ||||||||||||
Note:
1. Sales in this segment were negatively impacted by the partial reclassification of inoculants, which had been stand-alone products and are now sold as packs and thus reported in the
Seed & Integrated Products segment | 10 |
Comparable Consolidated Gross Profit and Margin
- 3Q20 Gross Profit +6% YoYto $12.0 million. Margin at 46.4% versus 47.7% in 3Q19, as mix-shift to higher margin seed packs was more than offset by unfavorable FX and inflation dynamics increasing production costs in Argentina
- 9M20 Gross Profit +2% YoYto $59.6 million. Margin at 48.8% vs 51.6% in 9M20, due to unfavorable FX and inflation dynamics compared to prior year period
Gross Profit ($ in millions) & Margin
Comparable Gross Profit & Margin by Segment ($ m):
Gross
Profit47.7% 41.1%46.4% 41.9%
Margin
+6% Comparable | |
+40% As Reported | |
12.0 | |
11.4 | 10.8 |
7.7 | |
Reported | Reported |
Comparable | Comparable |
3Q19 | 3Q20 |
51.6% 47.0%48.8% 45.4%
+2% Comparable | +9% As Reported |
59.6 |
58.4
56.7
52.1
ReportedReported
ComparableComparable
9M199M20
Segment | 3Q19 | 3Q20 % Chg. | |
Crop Protection | 7.8 | 6.4 | -18% |
-1.003 | |||
Gross Margin | 49% | 39% | |
bps | |||
Seed & Integrated | 0.6 | 2.6 | 351% |
+3.534 | |||
Products | 28% | 63% | |
Gross Margin | bps | ||
Crop Nutrition | 3.0 | 3.0 | 0% |
+582 | |||
Gross Margin | 52% | 58% | |
bps | |||
11
Growth in 3Q Offset by Non-seasonal SG&A Increase
- 3Q20 Adjusted EBITDA-21%to $2.6 million, as revenue and gross profit growth were offset by higher SG&A due to: i) growth expansion in Brazil, ii) FX & inflation dynamics in Argentina, iii) corporate expenses. Margin of 10.2% versus 17.7% in 3Q19, reflecting revenues and gross profit seasonality versus non-seasonal higher SG&A
- 9M20 Adjusted EBITDA-2%to $31.8 million, with margin of 25.5% vs 29.4% in 9M19. Revenue growth across three segments offset by higher manufacturing and SG&A costs in Argentina due to negative FX and inflation dynamics YoY, plus SG&A growth to support expansion in Brazil
3Q20 EBITDA Bridge ($ in millions)
Adj.
EBITDA
Margin
17.7% | 10.2% | |||||||||||||
7 | 1.4 | |||||||||||||
6 | ||||||||||||||
1.8 | 0.1 | |||||||||||||
5 | ||||||||||||||
4 | ||||||||||||||
3.3 | ||||||||||||||
3 | 0.4 | 2.6 | ||||||||||||
2 | 3.9 | 0.3 | ||||||||||||
1
0
Adjusted EBITDA 3Q 19 Gross profit Crop | Gross profit Seed | Gross profit Crop | Operating expenses | JV's | Other income or Adjusted EBITDA 3Q20 |
protection | and integrated | nutrition | expenses, net | ||
products |
12
Strengthened Balance Sheet and Increased Liquidity
- Raised $42.5 million through secured convertible promissory note, and $7.6 million through public corporate bonds
- Improved debt maturity profile:long-term debt at 59% of total debt, up from 37% in 2Q20
- Enhanced financial liquidity: cash & equivalents represent∼80% of current debt portion
- Convertible note terms provide potential to increase stock trading liquidity
- NetDebt-to-LTM Adjusted EBITDA declined to 2.30x in 3Q20 from 2.37x as of 3Q19
Net | |||||
Debt | 2.37x | 2.24x | 2.14x | 2..23x | 2..30x |
LTM EBITDA
79.6
$ million | ||||||||||||||||||||||||
93.5 | ||||||||||||||||||||||||
92.1 | ||||||||||||||||||||||||
90.3 | 92.8 | 40.1 | ||||||||||||||||||||||
16.9 | 37.1 | 32.5 | 86.8 | |||||||||||||||||||||
52.6 | ||||||||||||||||||||||||
83.8 | 63.5 | 64.1 | 66.9 | 14.9 | 66.4 | |||||||||||||||||||
10.5 | 9.8 | |||||||||||||||||||||||
7.8 | ||||||||||||||||||||||||
3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | ||||||||||||||||||||
Current debt | Non-current debt | Cash & Equivalents | Net Debt | |||||||||||||||||||||
Notes:
- Total financial debt includesshort-term debt and long-term debt, as well as outstanding installments of financed payment from the acquisition of Rizobacter, and excludes discounted checks
- Net Debt = Total financial debt less cash and cash equivalents and restrictedshort-term deposits
Enhanced Free Cash Flows Through Lower Financing Costs And Optimized CapEx
- Decreased total net interest expenses and financial commissions by $1.6 million YoY in 3Q20, by replacing inefficient external working capital sources with internally generated funds
- Strong asset base in place to support near andlong-term growth objectives with minimal capital expenditures
- Capital expenditure requirements financed with cash generated by the business
- Capex of $0.3 million in 3Q20 compared to $0.4 million 3Q19. Capital expenditures in 9M19 totalled $1.4 million
Total Net Interest Expenses and Financial Commissions ($ in millions)
-9%Comparable | ||
-30% | 17.4 | |
15.8 |
5.2
3.6
3Q19 | 3Q20 | 9M19 | 9M20 |
14
Looking ahead
Accelerating HB4®Program
- Significantly ramping up inventories and further validating value proposition
- Setting stage for successful global launch of EcoSoy™ and EcoWheat™, by accelerating breeding and licensing arrangements in key markets
- Steadily driving adoption of digital farming among HB4® users in Argentina
Strong focus on international expansion
- Maintain strong execution of growth plan, mainly Brazil and Paraguay
Well-developed asset base underpins organic growth
- Continue raising utilization of installedmicro-beaded fertilizer capacity, while maintaining profitability focus
Stronger, more efficient and dynamic balance sheet
- Also setting stage for improved trading liquidity
- See opportunities for additional enhancements
15
EXHIBITS
11thFebruary 2020
Unaudited Consolidated Statement of Comprehensive Income
Figures in $
Three-month period ended Three-month period ended | Nine-month period ended | Nine-month period ended | |||
03/31/2020 | 03/31/2019 | 03/31/2020 | 03/31/2019 | ||
Total revenue | 25,672,412 | 18,683,341 | 124,918,358 | 110,754,807 | |
Cost of sales | (14,920,088) | (10,996,272) | (68,227,890) | (58,648,951) | |
Gross profit | 10,752,324 | 7,687,069 | 56,690,468 | 52,105,856 | |
% Gross profit | 42% | 41% | 45% | 47% | |
Operating expenses | (9,953,025) | (9,882,117) | (31,262,696) | (27,638,361) | |
Share of profit (loss) of JV | (132,080) | (506,207) | 1,166,425 | 306,386 | |
Other income or expenses, net | (22,098) | 272,737 | (203,664) | (25,825) | |
Operating profit | 645,121 | (2,428,518) | 26,390,533 | 24,748,056 | |
Finance result | (4,203,080) | (21,855,343) | (24,071,756) | (36,414,615) | |
Profit / (loss) before income tax | (3,557,959) | (24,283,861) | 2,318,777 | (11,666,559) | |
Income tax | 168,794 | 1,605,093 | (1,035,861) | (3,445,656) | |
Profit / (loss) for the year | (3,389,165) | (22,678,768) | 1,282,916 | (15,112,215) | |
Other comprehensive loss | 733,432 | (3,075,367) | (6,833,093) | (5,587,090) | |
Total comprehensive Profit / (loss) | (2,655,733) | (25,754,135) | (5,550,177) | (20,699,305) | |
Profit / (loss) for the period attributable to: | |||||
Equity holders of the parent | (2,896,931) | (21,474,709) | 1,367,573 | (17,245,703) | |
Non-controlling interests | (492,234) | (1,204,059) | (84,657) | 2,133,488 | |
(3,389,165) | (22,678,768) | 1,282,916 | (15,112,215) | ||
Total comprehensive income / (loss) attributable to: | |||||
Equity holders of the parent | (2,314,349) | (23,643,501) | (4,741,667) | (21,384,923) | |
Non-controlling interests | (341,384) | (2,110,634) | (808,510) | 685,618 | |
(2,655,733) | (25,754,135) | (5,550,177) | (20,699,305) |
17
Unaudited Consolidated Statement of Financial Position
Figures in $
ASSETS | 03/31/2020 | 06/30/2019 | ||
CURRENT ASSETS | ||||
Cash and cash equivalents | 48,178,287 | 3,450,873 | ||
Other financial assets | 6,082,099 | 4,683,508 | ||
Trade receivables | 64,534,544 | 59,236,377 | ||
Other receivables | 4,215,183 | 1,981,829 | ||
Income and minimum presumed income taxes recoverable | 100,654 | 1,263,795 | ||
Inventories | 28,458,362 | 27,322,003 | ||
Biological assets | 714,053 | 270,579 | ||
Total current assets | 152,283,182 | 98,208,964 | ||
NON-CURRENT ASSETS | ||||
Other financial assets | 334,894 | 376,413 | ||
Other receivables | 2,170,393 | 1,560,310 | ||
Income and minimum presumed income taxes recoverable | 6,133 | 1,184 | ||
Deferred tax assets | 2,339,009 | 3,743,709 | ||
Investments in joint ventures and associates | 24,289,191 | 25,321,028 | ||
Property, plant and equipment | 42,478,651 | 43,834,548 | ||
Intangible assets | 35,241,208 | 39,616,426 | ||
Goodwill | 26,503,798 | 29,804,715 | ||
Right-of-use leased asset | 752,727 | - | ||
Total non-current assets | 134,116,004 | 144,258,333 | ||
Total assets | 286,399,186 | 242,467,297 |
LIABILITIES | 03/31/2020 | 06/30/2019 | |
CURRENT LIABILITIES | |||
Trade and other payables | 51,888,345 | 40,578,494 | |
Borrowings | 67,689,128 | 66,477,209 | |
Employee benefits and social security | 3,706,538 | 5,357,218 | |
Deferred revenue and advances from customers | 1,607,645 | 1,074,463 | |
Income and minimum presumed income taxes payable | 12,735 | 142,028 | |
Government grants | 694 | 2,110 | |
Financed payment - Acquisition of business | - | 2,826,611 | |
Lease liability | 576,595 | - | |
Total current liabilities | 125,481,680 | 116,458,133 | |
NON-CURRENT LIABILITIES | |||
Trade and other payables | 452,654 | 452,654 | |
Borrowings | 79,617,786 | 37,079,521 | |
Employee benefits and social security | 334,081 | - | |
Government grants | 3,941 | 8,098 | |
Due to joint ventures and associates | 1,833,690 | 1,970,903 | |
Deferred tax liabilities | 17,103,356 | 21,101,871 | |
Provisions | 291,727 | 439,740 | |
Warrants | 1,141,817 | 2,861,511 | |
Lease liability | 316,857 | - | |
Total non-current liabilities | 101,095,909 | 63,914,298 | |
Total liabilities | 226,577,589 | 180,372,431 | |
EQUITY | |||
Equity attributable to owners of the parent | 45,837,104 | 47,301,863 | |
Non-controlling interests | 13,984,493 | 14,793,003 | |
Total equity | 59,821,597 | 62,094,866 | |
Total equity and liabilities | 286,399,186 | 242,467,297 |
18
Contact Us
Investor Relations Investorrelations@biocerescrops.com
-
0341 4861100
Investors.biocerescrops.com
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Bioceres Crop Solutions Corp. published this content on 12 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2020 10:14:10 UTC