Bioceres Crop Solutions (BIOX) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2025, the company reported revenues of $74.7 million, a 40% decline year-over-year, primarily due to a winding down of the seed business and reduced demand for crop inputs in Argentina [6][9][10] - For the full fiscal year, revenues totaled $335.3 million, down 28% year-over-year, with declines across all segments [9][10] - Adjusted EBITDA for Q4 was -$4.5 million, down from $19.9 million the previous year, largely due to a $22.7 million reduction in gross profit [14][16] - Full-year EBITDA was $28.3 million, down from $81.4 million in FY24, reflecting a $54.6 million decline in gross profit [16] Business Line Data and Key Metrics Changes - In the seed segment, revenues were $63.9 million for the year, a reduction of 34%, attributed to the transition to a royalty-based model [10] - Crop protection revenues for the full year were $181.9 million, down 20%, with a strong decline in Argentina offsetting growth in bioprotection in the U.S. and adjuvants in Brazil [9][10] - Crop nutrition revenues were $89.5 million, down 37% year-over-year, driven by lower microbiota fertilizer sales in Argentina [9][10] Market Data and Key Metrics Changes - International sales of core technologies grew, with adjuvant sales in Brazil almost doubling and bioprotection products in the U.S. growing nearly 40% [8] - The company noted a significant decline in sales in Argentina due to adverse on-farm economics and reduced spending on agricultural inputs [5][6] Company Strategy and Development Direction - The company is focusing on cash generation and improving working capital management, targeting a running rate of 5 to 6 months of sales [20] - Cost structure adjustments are being accelerated, with targeted operating expense savings of around 10% to 12% [20][21] - The strategy includes scaling up biological initiatives and supporting key partners in Latin America while onboarding new partnerships in the U.S. and Australia [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in fiscal 2025, particularly due to macroeconomic shifts in Argentina [4][5] - There is cautious optimism regarding the upcoming planting season in Argentina, with favorable weather conditions expected to drive input sales [54] - The company aims to improve EBITDA margins and strengthen its balance sheet in the coming years, preparing for the next growth phase [21][22] Other Important Information - Total financial debt stood at $255.5 million, slightly lower than the previous quarter, with cash and equivalents totaling $34.6 million [18] - The net debt-to-adjusted EBITDA ratio was reported at 7.8 times, reflecting a stable net debt but lower adjusted EBITDA [18] Q&A Session Summary Question: What metrics should be focused on in the next six to nine months? - Management emphasized cash generation and profitability expansion as key metrics, with less priority on top-line growth under current circumstances [24][26] Question: Can you elaborate on cost savings initiatives? - The company expects to achieve quarterly operating expense savings of $3 to $3.5 million through workforce streamlining and right-sizing capacities [29][30] Question: What is the current state of inventories held in the channel? - Management indicated that inventory levels in Argentina have been almost depleted, suggesting a potential recovery in sales [61][63] Question: What is the outlook for the HB4 product? - The company highlighted a significant agreement with GDM to reposition HB4 technology, which is expected to generate revenues in the upcoming fiscal year [42][44] Question: How should we think about the Syngenta revenue ramp? - Management expects the Syngenta revenue to ramp up in the current fiscal year, with $18 million gross profit reported for FY2025 [57][58]