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.

Core Viewpoint - Adecoagro S.A. has signed an agreement to acquire Nutrien Ltd.'s 50% interest in Profertil S.A., the largest producer of granular urea in South America, for approximately US$600 million, through an 80%-20% partnership with Asociación de Cooperativas Argentinas (ACA) [1][2][3] Company Overview - Adecoagro is a leading sustainable production company in South America, owning 210.4 thousand hectares of farmland and producing over 3.1 million tons of agricultural products and over 1 million MWh of renewable electricity [9] - Profertil, co-owned by YPF S.A. and Nutrien Ltd., has an annual production capacity of approximately 1.3 million metric tons of urea and 790 thousand metric tons of ammonia, supplying about 60% of Argentina's urea consumption [3][6] Strategic Importance - The acquisition is viewed as a strategic opportunity for Adecoagro, enhancing its agro-industrial platform and enabling diversification of operations while reducing volatility in results [4] - Profertil's efficient production capabilities and access to competitively priced natural gas position it as a key player in a region that is a net importer of urea [4][6] Financial Aspects - The average annual EBITDA generated by Profertil from 2020 to 2024 was approximately US$390 million, indicating strong financial performance [3] - The transaction is subject to customary closing conditions and is expected to be completed before the end of 2025 [2] Partnership Dynamics - The partnership with ACA is highlighted as a long-standing and successful relationship, reinforcing the commitment to building sustainable agribusinesses in Argentina and South America [4] - The remaining 50% equity owner, YPF, holds a 90-day right of first refusal to purchase Nutrien's equity on the same terms [2]

Group 1 - The core investment strategy of Quipus Capital focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective rather than market-driven dynamics [1] - Quipus Capital emphasizes understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations from Quipus Capital will be holds, indicating a cautious approach to market conditions and a belief that only a small fraction of companies are suitable for buying at any given time [1] Group 2 - The articles produced by Quipus Capital aim to provide valuable information for future investors while maintaining a healthy skepticism towards a generally bullish market [1]

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1] - The analyst holds certifications such as FMVA and FPWMP, which enhance their ability to analyze financial statements and build valuation models [1] - Participation in the CFA Research Challenge provided practical experience in equity analysis and industry research, showcasing the analyst's capability to present investment recommendations effectively [1] Company and Industry Focus - The analyst has worked with a confidential client, preparing investment reports across various sectors including healthcare, consumer staples, and industrials, demonstrating versatility in evaluating companies across different industries [1] - The analyst's educational background includes a degree in Finance from Alexandria University, graduating with a CGPA of 3.6, which supports their analytical skills in the finance domain [1] - The analyst is currently seeking to publish articles that provide valuable insights to investors, indicating an intention to contribute to the investment community with well-supported research [1]

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 ...

Core Viewpoint - Adecoagro S.A. has announced the expiration and results of its cash tender offer for its outstanding 6.000% Notes due 2027, with approximately 36.31% of the principal amount validly tendered [1][3]. Group 1: Tender Offer Details - The tender offer was made for all outstanding 6.000% Notes due 2027, which are guaranteed by several subsidiaries of Adecoagro [2]. - As of the expiration date, US$150,927,000 of the US$415,644,000 principal amount of Notes was validly tendered and not withdrawn [3][4]. - The total consideration for the validly tendered Notes is US$1,000.00 per US$1,000.00 principal amount, plus accrued interest [6]. Group 2: Settlement and Payment - The settlement date for the tender offer is expected to occur on July 29, 2025, or as soon as practicable thereafter [7]. - Holders of validly tendered Notes will receive the total consideration along with accrued interest from the last interest payment date to the settlement date [8]. Group 3: Financing and Future Plans - The company plans to use proceeds from a new notes offering to pay for the consideration and accrued interest related to the tender offer [10]. - Adecoagro reserves the right to use any remaining proceeds to redeem or purchase any outstanding Notes after the expiration date [11]. Group 4: Company Overview - Adecoagro is a leading sustainable production company in South America, owning 210.4 thousand hectares of farmland and producing over 2.8 million tons of agricultural products and over 1 million MWh of renewable electricity [14].