CORRECTION – Lavoro Reports Fiscal Third Quarter 2024 Earnings Results¹

Core Insights - Lavoro Limited reported a 6% year-over-year increase in revenue for 3Q24, reaching $514.2 million, driven by market share gains and volume growth despite deflationary pressures in input prices [4][6][16] - The company anticipates improved farmer profitability in the upcoming crop year, but current market conditions are leading to delayed purchasing decisions among farmers, impacting short-term results [2][4] - Lavoro has updated its FY2024 guidance, projecting consolidated revenue between $1.80 billion and $1.95 billion, with Adjusted EBITDA expected to range from $46 million to $55 million [16][19] Financial Performance - Revenue for the Brazil Ag Retail segment increased by 5% to $450 million, with grains revenue growing by 61% to $86.8 million, while inputs revenue declined by 3% to $363.2 million [9][10] - The Crop Care segment saw a 30% increase in revenue to $22.1 million, primarily due to strong growth in biological products [13][15] - Gross profit decreased by 16% to $60.2 million, with gross margins contracting by 310 basis points to 11.7% due to input price deflation and a less favorable sales mix [4][6][7] Segment Analysis - In the Brazil Ag Retail segment, inputs revenue was negatively impacted by input price deflation and drought conditions, despite significant volume increases in crop protection and fertilizers [9][10] - The Latam Ag Retail segment revenue increased by 5% to $50.5 million, supported by currency appreciation and strong fertilizer sales, although impacted by lower corn seed revenue due to drought [11][12] - The Crop Care segment's gross profit grew by 14% to $9.1 million, but gross margins decreased to 41.2% due to tactical price reductions and increased freight rates [13][15] Market Outlook - The company remains optimistic about the long-term fundamentals for Brazilian farmers, expecting short-term challenges to dissipate and growth to resume [2][4] - Lavoro's proactive recruitment of agronomists has resulted in an additional $35 million in future net sales potential, contributing to a total of over $150 million for the year [2][4] - The updated guidance reflects the company's response to more challenging market conditions than previously anticipated [16][19]