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

Severe drought in Argentina temporarily interrupted growth trajectory; decline in Argentina partially offset by higher sales in North America

HB4 Wheat outperformed top commercial varieties, on average, across all environments with a 43% yield increase in targeted conditions

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 second quarter ended December 31, 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

  • Historical drought during 2Q23 in Argentina slashed wheat output by 50% countrywide and delayed soybean and corn planting. Planting progress for soybeans lagged by 20-to-30 percentage points as compared with the historical average for the entire optimal planting window.
  • Total revenues in 2Q23 were $94.4 million, a 7% decrease compared with the pro forma revenues for the second quarter of last year, which include historical revenues from Pro Farm. Sales growth in North America partially offset the decline in Argentina.
  • Adjusted EBITDA for the quarter was $10.3 million and was primarily affected by a decline in gross profit contribution from sales in Argentina.
  • Under severe drought conditions HB4 Wheat showed higher yields than conventional varieties across all environments, with an average 43% yield improvement in targeted environments. Seed inventories and product performance are on track to meet FY23 expectations.
  • HB4 Soy is on track despite unusually difficult planting conditions in Argentina. Half of the current seed multiplication area has been planted with new generation varieties. HB4 Soy program was launched with growers in Brazil.
  • Trigall Genetics (a Bioceres joint venture) closed the 80% acquisition of wheat breeding assets in Australia.

MANAGEMENT REVIEW

Mr. Federico Trucco, Bioceres´ Chief Executive Officer, commented: “As we anticipated during our prior earnings call, our growth momentum has been transiently interrupted by unusually severe drought conditions in Argentina, which extended throughout the entire planting window for summer crops. Although we are flat when compared with last year’s revenue for the quarter, we are down by 7% year-over-year for this three-month period on a pro forma basis after including Pro Farm’s operations. This circumstantial decline interrupts a run of seven consecutive quarters of top-line growth and profitability expansion, which we expect to resume in the second half of the fiscal year as weather conditions have turned more favorable in our key commercial regions.”

“On a less circumstantial and more permanent front, the severe drought conditions in Argentina have allowed us to put HB4 technology to the test, like never before. The performance of HB4 wheat has been outstanding on all fronts. In environments yielding less than 2 tons per hectare, HB4 wheat has outperformed commercial materials by an average yield improvement of 43%, winning in seven out of every 10 locations and, averaging a win rate of eight out of 10 when aggregating the last three seasons. When confounding effects from background genetics are neutralized ‒ as is the case for comparisons among isogenic varieties (i.e. varieties that are nearly genetically identical except for the presence of the HB4 gene) ‒ HB4 win rates increase to above 80%, across all environments, not just those with yields below 2 tons per hectare, ratifying the broad hectare opportunity resulting from the technology.”

“From an HB4 wheat inventories perspective, we can cover up to one-third of next season’s HB4 plantings with second generation materials, allowing us to replace first generation varieties almost fully by FY24, when we expect HB4 wheat to deliver $15-to-$20 million in incremental EBITDA. As a reminder, second-generation materials show a double-digit genetic gain when compared with first-generation materials in high-yielding environments, outperforming top commercial varieties even when yields average more than 4 tons per hectare.”

Mr. Enrique Lopez Lecube, Bioceres´ Chief Financial Officer, noted, “While our fiscal second quarter results were adversely affected by the severe drought in Argentina, we also saw the benefit of strategic actions that drove our positive performance for the first half of 2023 and will benefit our results going forward. Our priorities to diversify our product portfolio, expand our geographic presence and maintain a strong alliance with our grower customers – all with an eye on managing costs – will allow us to continue the momentum we saw in the first half of the year, and drive further Adjusted EBITDA improvement. Moving forward, we believe the extreme weather conditions we are seeing around the world highlight the increasing need for our products. While weather may temporarily affect our quarterly results from time to time, our long-term growth trajectory remains robust.”

KEY FINANCIAL METRICS

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

Table 1: 2Q23 & 1H23 Key Financial Metrics

2Q22

Pro forma1

2Q23

% Change

1H22

Pro forma1

1H23

% Change

Revenue by Segment

 

 

 

 

 

 

Crop Protection

56.3

53.3

(5%)

97.3

116.3

20%

Seed and Integrated Products

15.3

16.3

7%

24.0

30.2

26%

Crop Nutrition

29.5

24.7

(16%)

54.3

75.0

38%

Total Revenue

101.1

94.4

(7%)

175.6

221.5

26%

Gross Profit

48.7

35.3

(28%)

82.6

86.7

5%

Gross Margin

48.1%

37.4%

(1,076 bps)

45.5%

40.5%

(505 bps)

2Q22

Pro forma1

2Q23

% Change

1H22

Pro forma1

1H23

% Change

Adjusted EBITDA

18.3

10.3

(43%)

30.8

34.9

13%

1.

2Q22 and 1H22 pro forma financials include Pro Farm historical numbers.

Summary: Drought in Argentina drove the decline in 2Q23 Crop Protection and Crop Nutrition revenues, partially offset by moderate growth in the Seed and Integrated Products segment, which included first-time HB4 Soy sales. Lower sales in Argentina were partially offset by growth in other Latin American geographies. Additionally, Pro Farm biological products delivered higher sales in North America in the quarter, diversifying the product portfolio internationally and in new product markets. Some 2Q23 sales were realized in 1Q23 as commercial teams in Argentina locked-in early sales to distributors and growers in anticipation of challenging weather conditions. As a result, while revenues for 2Q23 decreased 7%, sales for 1H23 increased 26%. Overall gross profit declined 27% in the quarter, a function of product mix and lower pricing for key products in Argentina, where the commercial strategy focused on increasing farmer proximity and preserving market share. Lower sales and gross margins resulted in a lower Adjusted EBITDA of $10.3 million. For the first half of FY23, gross profit was up 5% and Adjusted EBITDA, at $34.9 million, was 13% higher year-over-year on a pro forma basis.

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

SECOND 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, February 9, 2023

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:

689739

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 February 14, 2023, following the conference.

Toll Free Replay Number:

1-866-813-9403

International Replay Number:

+44 204 525 0658

Replay ID:

195470

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 12/31/2022

Three-month period

ended 12/31/2021

Total revenue

94,410,185

92,662,853

Cost of sales

(59,138,119)

(55,332,989)

Gross profit

35,272,066

37,329,864

% Gross profit

37%

40%

Operating expenses

(32,424,008)

(20,198,593)

Share of profit of JV

40,048

1,141,323

Other income or expenses, net

(669,137)

(571,365)

Operating profit

2,218,969

17,701,229

Financial result

(9,963,524)

(8,221,621)

Profit/(loss) before income tax

(7,744,555)

9,479,608

Income tax

(615,529)

(4,141,102)

Profit/(loss) for the period

(8,360,084)

5,338,506

Other comprehensive profit/(loss)

585,883

7,893,351

Total comprehensive profit/(loss)

(7,774,201)

13,231,857

 

 

 

Profit/(loss) for the period attributable to:

 

 

Equity holders of the parent

(8,662,197)

3,427,093

Non-controlling interests

(550,212)

3,427,093

 

(9,212,409)

6,854,186

Total comprehensive profit/(loss) attributable to:

 

 

Equity holders of the parent

(8,285,010)

3,427,093

Non-controlling interests

(341,516)

3,157,855

 

(8,626,526)

6,584,948

Weighted average number of shares

 

 

Basic

62,710,957

41,104,331

Diluted

62,710,957

42,403,196

 

Unaudited Consolidated Statement of Financial Position

(Figures in U.S. dollars)

 

ASSETS

12/31/2022

06/30/2022

CURRENT ASSETS

 

 

Cash and cash equivalents

68,550,022

33,475,266

Other financial assets

18,882,388

5,401,133

Trade receivables

178,230,222

111,752,310

Other receivables

25,653,800

19,327,584

Income and minimum presumed income taxes recoverable

1,674,314

1,647,398

Inventories

157,647,583

126,044,122

Biological assets

581,100

57,313

Total current assets

451,219,429

297,705,126

NON-CURRENT ASSETS

 

 

Other financial assets

1,104,718

619,841

Trade receivables

-

200,412

Other receivables

3,173,261

2,254,199

Income and minimum presumed income taxes recoverable

18,465

44,412

Deferred tax assets

4,619,306

4,011,374

Investments in joint ventures and associates

38,810,692

38,554,092

Property, plant and equipment

63,794,675

49,908,325

Intangible assets

174,412,251

76,704,869

Goodwill

122,532,487

36,073,685

Right-of-use leased asset

13,164,994

12,144,026

Total non-current assets

421,630,849

220,515,235

Total assets

872,850,278

518,220,361

LIABILITIES

12/31/2022

06/30/2022

CURRENT LIABILITIES

 

 

Trade and other payables

160,017,912

125,849,620

Borrowings

105,462,623

71,301,468

Employee benefits and social security

9,867,633

7,619,121

Deferred revenue and advances from customers

61,233,268

5,895,313

Income tax payable

1,012,347

7,538,764

Consideration for acquisition

1,943,216

3,048,562

Lease liabilities

3,007,806

1,412,904

Total current liabilities

342,544,805

222,665,752

NON-CURRENT LIABILITIES

 

 

Trade and other payables

810,921

-

Borrowings

79,109,119

74,177,169

Investments in joint ventures and associates

122,059

717,948

Deferred tax liabilities

46,130,828

29,005,943

Provisions

5,543,219

603,022

Consideration for acquisitions

8,467,428

9,854,228

Convertible notes

72,558,213

12,559,071

Lease liability

10,880,795

10,338,380

Total non-current liabilities

223,622,582

137,255,761

Total liabilities

566,167,387

359,921,513

EQUITY

 

 

Equity attributable to owners of the parent

272,692,323

127,358,573

Non-controlling interests

33,990,568

30,940,275

Total equity

306,682,891

158,298,848

Total equity and liabilities

872,850,278

518,220,361

 

Contacts

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