Bioceres Crop Solutions (BIOX) - 2024 Q2 - Quarterly Report

Fiscal First Quarter 2024 Financial and Operating Results Financial & Business Highlights Bioceres reported total revenues of $116.6 million and Adjusted EBITDA of $16.3 million for 1Q24, showing recovery from drought, alongside key operational achievements Financial & Business Highlights | Metric | 1Q24 | 1Q23 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $116.6M | $127.1M | (8%) | | Adjusted EBITDA | $16.3M | $24.5M | (34%) | - A groundbreaking U.S. patent was awarded for the company's UHC® technology, which sets a new standard in biological nitrogen fixation for legumes[10][14] - Construction of a new state-of-the-art adjuvant production plant in Londrina, Brazil was completed to expand the company's footprint in the Brazilian market[4] - The HB4 wheat harvest is underway in Argentina with favorable preliminary results compared to non-HB4 varieties, despite the season being affected by drought[30] Management Review Management noted a return to momentum with normalized weather, strong adjuvant and biostimulant sales, and significant growth in the Generation HB4 Program - The CEO stated that with normalized rain patterns, the company has regained momentum, which is expected to accelerate in subsequent quarters, contrasting with 1Q23's record performance that was partly due to pulling sales forward ahead of a historic drought[11][7] - The CFO highlighted key positive trends in the quarter, including the recovery of adjuvant sales, growth from the UBP biostimulants platform, and margin expansion from the bioprotection portfolio[35] - The Generation HB4 Program is experiencing significant growth, with current acreage at 150% of the prior season, including a six-fold increase in Brazil[34] Detailed Financial Analysis This section details the company's financial performance, including an 8% revenue decline, 13% gross profit decrease, and 34% Adjusted EBITDA reduction, primarily due to Crop Nutrition Revenue Analysis Total revenue decreased 8% to $116.6 million, with Crop Protection down 11%, Seed and Integrated Products up 61%, and Crop Nutrition down 24% Revenue by Segment | Revenue by Segment | 1Q24 ($M) | 1Q23 ($M) | % Change | | :--- | :--- | :--- | :--- | | Crop protection | 55.9 | 63.0 | (11%) | | Seed and integrated products | 22.3 | 13.8 | 61% | | Crop nutrition | 38.3 | 50.3 | (24%) | | Total revenue | 116.6 | 127.1 | (8%) | - Crop Protection sales fell 11% as the company exited low-margin third-party products, which offset a 32% year-over-year increase in high-margin adjuvants[18][40] - Seed and Integrated Product sales grew 61%, primarily due to downstream sales of first-generation HB4 wheat inventories as grain to processors in the Generation HB4 program[20] - Crop Nutrition sales decreased 24%, overshadowed by extraordinary sales of micro-beaded fertilizers in 1Q23 which benefited from high prices and concentrated seasonal sales[18][44] Gross Profit Analysis Total gross profit declined 13% to $45.0 million, with gross margin contracting to 38.6%, driven by a significant drop in Crop Nutrition Gross Profit by Segment | Gross Profit by Segment | 1Q24 ($M) | 1Q23 ($M) | % Change | | :--- | :--- | :--- | :--- | | Crop protection | 19.7 | 17.9 | 10% | | Seed and integrated products | 8.2 | 8.3 | (1%) | | Crop nutrition | 17.0 | 25.2 | (32%) | | Total Gross profit | 45.0 | 51.4 | (13%) | - Despite lower sales, Crop Protection gross profit increased by 10% as the company shifted from low-margin products to higher-margin adjuvants and bioprotection products[24] - Crop Nutrition gross profit declined by 32%, primarily due to lower sales of micro-beaded fertilizers and normalized gross margins compared to the unusually high margins in 1Q23[25] Operating Expenses SG&A expenses decreased 6% to $25.7 million due to synergies and cost controls, while R&D increased to $3.1 million for new product registrations - SG&A expenses (excluding D&A and other items) decreased by 6% year-over-year to $25.7 million, driven by cost synergies realized in Pro Farm and cost control measures in Argentina[47][27] - R&D expenses rose to $3.1 million from $2.2 million in 1Q23, mainly due to costs for registering Pro Farm products in South America and regulatory efforts for the Rinotec platform[73] Adjusted EBITDA Adjusted EBITDA decreased 34% to $16.3 million, primarily due to lower gross profit, partially offset by SG&A savings and higher JV profits Adjusted EBITDA Reconciliation | Adjusted EBITDA Reconciliation | 1Q24 ($M) | 1Q23 ($M) | | :--- | :--- | :--- | | Gross profit | 45.0 | 51.4 | | SG&A (ex items) | (25.7) | (27.3) | | R&D (ex items) | (3.1) | (2.2) | | Share of profit from JVs | 1.5 | 0.8 | | Other | (2.6) | 0.5 | | Adjusted EBITDA | 16.3 | 24.5 | - The $8.2 million decrease in Adjusted EBITDA was primarily caused by a $6.4 million decline in gross profit, partially offset by $1.6 million in SG&A savings and a $0.7 million increase in profits from JVs[75] Financial Income and Loss The net financial loss improved slightly to $7.5 million from $8.1 million, driven by a 22% decrease in net interest expenses due to one-time efficiencies Financial Result Breakdown | Financial Result Breakdown | 1Q24 ($M) | 1Q23 ($M) | | :--- | :--- | :--- | | Net interest expenses and financial commissions | (4.0) | (5.1) | | Other non-cash financial result | (3.6) | (3.0) | | Total Net Financial Result | (7.5) | (8.1) | - Net interest expenses and commissions decreased by $1.1 million compared to the prior year, mainly explained by one-time financial efficiencies from Argentine subsidiaries[53] Balance Sheet and Capitalization Total financial debt was $226.4 million, with net debt at $183.0 million, and the Net Debt-to-LTM Adjusted EBITDA ratio improved to 2.51x Capitalization (as of Sep 30) | Capitalization (as of Sep 30) | 2023 ($M) | 2022 ($M) | | :--- | :--- | :--- | | Short-Term Debt | 100.7 | 74.7 | | Long-Term Debt | 125.7 | 153.1 | | Cash and Equivalents | (43.5) | (51.3) | | Total Net Debt | 183.0 | 176.6 | | Net Debt / LTM Adj. EBITDA | 2.51x | 2.78x | - The Net Debt-to-LTM Adjusted EBITDA ratio decreased to 2.51x from 2.78x in 1Q23, driven by a 15% increase in LTM Adjusted EBITDA[80] - Total financial debt stood at $226.4 million, nearly unchanged from $227.8 million in 1Q23, with short-term debt constituting 44% of the total[79] Appendix This section provides supplementary information, including definitions of non-IFRS measures, details on hyperinflationary accounting, and unaudited consolidated financial statements Use of Non-IFRS Financial Information The company defines Adjusted EBITDA as a non-IFRS measure, explaining its components and limitations for investors in assessing core operating performance - Adjusted EBITDA is defined as profit/(loss) exclusive of financial income/(costs), income tax, depreciation, amortization, share-based compensation, inventory purchase allocation, and one-time transactional expenses[66] - Management believes Adjusted EBITDA provides useful supplemental information to investors about trends in the company's core operating performance[109][91] Consolidated Financial Statements This section presents the unaudited Consolidated Statement of Comprehensive Income, showing a $2.7 million net loss, and the Consolidated Statement of Financial Position with $840.7 million in total assets Statement of Comprehensive Income (3-months ended Sep 30) | Statement of Comprehensive Income (3-months ended Sep 30) | 2023 ($M) | 2022 ($M) | | :--- | :--- | :--- | | Total revenue | 116.6 | 127.1 | | Gross profit | 45.0 | 51.4 | | Operating profit | 5.3 | 17.0 | | Profit/(loss) for the period | (2.7) | 3.9 | Statement of Financial Position (as of Sep 30, 2023) | Statement of Financial Position (as of Sep 30, 2023) | Amount ($M) | | :--- | :--- | | Total current assets | 395.9 | | Total non-current assets | 444.8 | | Total assets | 840.7 | | Total current liabilities | 311.7 | | Total non-current liabilities | 195.9 | | Total liabilities | 507.6 | | Total equity | 333.1 |