Bioceres Crop Solutions (BIOX) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues grew 12% to $9.9 million in Q3 2021, driven by higher sales of seed treatments and fungicides [22] - Gross profit rose 21% to $6 million in Q3 2021, with gross margins at 61.4% [22] - Net loss decreased by 18% to $4.9 million in Q3 2021 compared to a loss of $6.1 million in the same period last year [25] - Adjusted EBITDA improved by 22% for Q3 and 47% year-to-date [26] Business Line Data and Key Metrics Changes - The strategic shift towards global markets for high-value seed treatments positively impacted gross profit and margins [22] - The company maintained operating expenses at $10.5 million, flat year-over-year, resulting in an operating expense ratio decrease to 91% from 101% [23] Market Data and Key Metrics Changes - The Latin American growing season showed improved conditions with abundant rainfall, leading to revised forecasts for record planting intentions for corn and soybeans [8] - Commodity prices for corn and soybeans reached an eight-year high in spring 2021, which is expected to positively influence crop input demand in 2022 [7] Company Strategy and Development Direction - The company plans to leverage its diversified product line and distribution channels to capitalize on market opportunities [9] - A focus on expanding the BioUnite program is seen as a strategic advantage to promote cost-effective and sustainable products [16] - The company is pursuing further diversification and strategic alternatives to enhance capabilities in sustainable agriculture [18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about closing out the year, anticipating revenue growth in the low-double digits to mid-teens range for 2021 [11] - The company is preparing for robust sales in 2022 by ensuring raw materials are in place and anticipating grower demand [14][15] - Management highlighted the importance of staying ahead of supply chain challenges and maintaining strong relationships with customers [13] Other Important Information - The company is investing in automating back-office processes to support growth without increasing headcount [24] - Recent regulatory submissions for novel insecticides and nematicides are seen as major milestones [19] Q&A Session Summary Question: Supply chain issues and their impact - Management indicated that supply chain challenges are affecting both inbound raw materials and outbound distribution, but they are managing the situation effectively [29][30] Question: Opportunities arising from supply chain disruptions - Management sees potential for increased adoption of biological products due to concerns about traditional product availability [33] Question: International expansion and product traction - Core markets include North America, Europe, and Latin America, with successful cross-selling based on prior field trials [36][37] Question: R&D pipeline and product ranking - Management confirmed that recent field trial data supports their product rankings and validates their R&D efforts [38][39] Question: Drought conditions and business impact - Management noted that lost business due to drought cannot be recovered, but customer enthusiasm for 2022 remains strong [52] Question: Herbicide portfolio and commercialization steps - The company is close to launching its herbicide products, with ongoing formulation improvements and extensive field trials [56][60]