PresentationOperator Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Adecoagro's conference call. Today with us, we have Mr. Juan Sartori, Executive Chairman and Tether's Head of Business Initiatives; Mr. Mariano Bosch, CEO; Mr. Emilio Gnecco, CFO; and Mrs. Victoria Cabello, Investor Relations Officer. We would like to inform you that this event is being recorded [Operator Instructions]. Before proceeding, let me mention that forward-looking ...

Core Points - Adecoagro held a conference call with key executives including the Executive Chairman, CEO, CFO, and Investor Relations Officer [1] - The event was recorded, and forward-looking statements were made based on management's beliefs and assumptions, highlighting the inherent risks and uncertainties [2][3] - General economic conditions and industry factors could significantly impact Adecoagro's future results, potentially causing deviations from expressed forward-looking statements [3]

Summary of Adecoagro's Conference Call on M&A Announcement Company and Industry - **Company**: Adecoagro (NYSE: AGRO) - **Industry**: Agricultural production and fertilizer manufacturing, specifically focusing on urea production in South America Key Points and Arguments 1. **Acquisition Announcement**: Adecoagro announced the agreement to acquire a 50% stake in Profertil, the largest producer of granular urea in South America, as a strategic growth step [3][4] 2. **Market Context**: South America, particularly Argentina, Brazil, Uruguay, and Paraguay, has a structural deficit in urea production, importing approximately 10 million tons annually [3][4] 3. **Strategic Location**: Profertil is strategically located near Vaca Muerta, a significant natural gas basin, which is crucial for urea production [4] 4. **Production Capacity**: Profertil has a production capacity of approximately 1.3 million tons of urea, meeting 60% of Argentina's domestic consumption [6][7] 5. **Financial Performance**: Profertil has generated an average of $750 million in sales and $390 million in EBITDA over the past five years, indicating strong financial health [8] 6. **Transaction Structure**: The acquisition involves a partnership with ACA, an Argentine cooperative, with a purchase price of approximately $600 million [5][6] 7. **Future Demand**: Global demand for ammonia is projected to grow by 12 to 14 million tons, with a potential gap of approximately 7 million tons, positioning Argentina and Profertil to address this demand [7] 8. **Leverage and Capital Allocation**: Adecoagro expects to end the year with a net debt-to-PBR ratio of approximately three times, above their comfort level of two times, but plans to revise capital allocation strategies post-acquisition [12][15][16] 9. **IRR Expectations**: The target internal rate of return (IRR) for the acquisition is above 20%, reflecting the attractiveness of the investment [17] 10. **Shareholder Support**: Tether Investments, Adecoagro's largest shareholder, expressed commitment to support the company financially and strategically to maximize value for stakeholders [9][10][48] Additional Important Content 1. **Synergies and Integration**: The integration of Profertil is expected to enhance Adecoagro's growth platform and create long-term value through operational synergies [9][48] 2. **Future Growth Opportunities**: Adecoagro remains focused on its core segments of food and energy production, with potential for future opportunistic deals that align with their low-cost production strategy [40][41] 3. **CapEx Considerations**: The maintenance CapEx for Profertil is relatively low, with significant investments required only every four years, while potential expansion projects could take up to four years and require substantial investment [57][58] 4. **Non-Consolidation of Financials**: Adecoagro will not consolidate Profertil's financials but will report its 50% stake as a co-control format [39][41] This summary encapsulates the critical aspects of Adecoagro's conference call regarding its acquisition of Profertil, highlighting the strategic rationale, market context, financial implications, and future growth potential.

Accessibility StatementSkip Navigation LUXEMBOURG, September 8, 2025 /PRNewswire/ -- Adecoagro S.A. (NYSE: AGRO) ("Adecoagro" or the "Company"), a leading sustainable production company in South America announces it has signed an agreement to acquire Nutrien Ltd.'s 50% interest in Profertil S.A. ("Profertil"), the largest producer of granular urea in South America. The remaining 50% stake of Profertil is owned by YPF S.A. the largest oil and gas producer of Argentina. Adecoagro will execute this acquisition ...

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Financial Data and Key Metrics Changes - Consolidated adjusted EBITDA for Q2 2025 reached $55 million, with year-to-date EBITDA amounting to $91 million, reflecting a 60% year-over-year decline in both periods [10][11][12] - Sales totaled $392 million during Q2, with year-to-date sales reaching $716 million, driven by higher volumes sold across operations despite lower prices [10][11] Business Line Data and Key Metrics Changes - In the Sugar, Ethanol, and Energy business, crushing volume was 20% lower year-over-year due to fewer effective milling days and a selective slower milling pace [12][13] - Farming business reported a 12% year-over-year increase in total production, attributed to higher planted area and record productivity in rice operations [12][20] - Adjusted EBITDA for the Farming business totaled $1 million during the quarter, with year-to-date EBITDA at $18 million, impacted by lower international prices and higher costs [21][23] Market Data and Key Metrics Changes - Rice prices have significantly decreased, but customized rice varieties at premium prices are being offered to offset global price drops [7] - Dairy processing volumes are increasing due to a growing market presence, while efforts are ongoing to expand the product portfolio [7][20] Company Strategy and Development Direction - The company aims to be the lowest cost producer while diversifying operations across geographies and products, which serves as a natural hedge against commodity price fluctuations and weather risks [5][6] - A memorandum of understanding was signed with Tether to explore using a portion of energy production for bitcoin mining, indicating a potential innovative project [8] - The company is focusing on improving margins by reducing leased area by approximately 30% in response to challenging price and cost conditions [7][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about reaching similar crushing levels to the previous year despite a difficult start to the season, citing improved crushing rates in July and August [31][32] - The company is constructive about sugar and ethanol prices, anticipating a potential increase due to lower sugarcane yields and strong ethanol demand [35][36] - Management acknowledged the need to maintain a net leverage ratio below 2.0 times EBITDA while exploring both organic and inorganic growth opportunities [67][68] Other Important Information - Net debt increased to $699 million, 11% higher year-over-year, primarily due to higher short-term borrowings for working capital [23][24] - The company has committed $45 million to shareholder distribution, including dividends and share repurchases [27] Q&A Session Summary Question: Expectations for crushing figures and sugar prices - Management indicated that despite a challenging first quarter, they expect to crush similar amounts of sugarcane as last year, driven by improved performance in July and August [31][32] - They anticipate sugar prices to react positively due to lower sugarcane yields and strong ethanol demand [35][36] Question: Quality of cane and yield expectations - Management expects yields to be flat year-over-year, with a slight decrease in TRS content due to frost affecting sugarcane [41][45] Question: Triggers for hedging next season - Management believes sugar prices could react in the short term based on Brazilian crop impacts, with plans to accelerate hedging once market conditions clarify [54][55] Question: Partnership with Tether and its impact - The partnership is seen as a potential opportunity to sell energy at attractive prices, with ongoing evaluations to determine feasibility [74]

Financial Highlights - Adecoagro's gross revenues for Q2 2025 were $392 million, a decrease of 1% compared to the same period last year[17] - Gross revenues for 6M25 reached $716 million, an increase of 10% compared to the same period last year[17] - Adjusted EBITDA for Q2 2025 was $55 million, a decrease of 60% compared to the same period last year[17] - Adjusted EBITDA for 6M25 was $91 million, a decrease of 60% compared to the same period last year[17] Segment Performance - Sugar, Ethanol & Energy - Sugar, Ethanol & Energy accounted for 77% of gross revenues in Q2 2025[17] - Sugar production decreased by 15% from 233,881 tons in Q2 2024 to 199,175 tons in Q2 2025[30] - Ethanol production decreased by 21% from 143,401 m3 in Q2 2024 to 98,756 m3 in Q2 2025[31] - Adjusted EBITDA for Sugar, Ethanol & Energy business decreased by 36% from $68,100 thousand in Q2 2024 to $106,886 thousand in Q2 2025[42] Farming Business - 296,057 hectares of Crops + Rice were harvested[52] - Soybean harvested area is 91,802 ha[52] - Raw milk production reached 93 million liters[52] - Farming segment experienced a significant decrease in financial performance, with profits dropping by 97% from $37,792 thousand in Q2 2024 to $1,081 thousand in Q2 2025[55] Capital Allocation - Net debt stood at $699 million[62] - 75% of debt is long term debt[63] - 70% of debt is in USD and 30% in BRL[65] - $45.2 million has been committed to shareholder distribution[71]

Financial Performance - Adecoagro S.A. reported an Adjusted EBITDA of $68.1 million for the Sugar, Ethanol & Energy business in 2Q25, which is a decrease of 36.3% year-over-year [3] - The Farming business saw an Adjusted EBITDA of $1.1 million in 2Q25, down $36.7 million year-over-year [6] - Overall, Adjusted EBITDA for the company was down 60.5% in 2Q25 compared to the previous year, primarily due to losses in biological assets and higher costs [9] Sales and Production - Gross sales decreased by 1.4% year-over-year in 2Q25, attributed to lower prices for most products, while accumulated sales increased by 9.9% due to higher volumes sold, especially in ethanol [9] - The company achieved record production in its Rice operations, contributing positively to the Farming business [6] Cost and Pricing - The cost of production for the year-to-date was reported at 9.0 cents per pound, an increase from 7.9 cents per pound in the same period last year [5] - There were year-over-year losses in the mark-to-market of biological assets and agricultural produce due to lower prices [7] Debt Management - Adecoagro issued $500 million in Senior Notes due 2032 with a 7.50% coupon, using proceeds to fund a cash tender offer for its Senior Notes due 2027 [8][10] - The company improved its debt maturity profile and financial flexibility through this transaction [10] Shareholder Distribution - As of the report date, Adecoagro committed $45.2 million to shareholder distributions, including $10.2 million for share repurchases and $35.0 million for cash dividends [11]

Adecoagro S.A. Condensed Consolidated Interim Financial Statements as of June 30, 2025 and for the six-month periods ended June 30, 2025 and 2024 Legal information Denomination: Adecoagro S.A. Legal address: 28, Boulevard Raiffeisen, L-2411, Luxembourg Company activity: Agricultural and agro-industrial Date of registration: June 11, 2010 Expiration of company charter: No term defined Number of register (RCS Luxembourg): B153.681 Issued Capital Stock: 105,381,815 common shares (Note 21) Outstanding Capital S ...