Bioceres Crop Solutions Reports Fiscal First Quarter 2023 Financial and Operational Results

Rhea-AI Summary

Bioceres Crop Solutions Corp. (BIOX) reported a 71% increase in revenues for 1Q23, totaling $127.1 million, compared to pro forma figures from 1Q22. Gross profit rose 52% to $51.4 million, while Adjusted EBITDA nearly doubled, reaching $24.5 million. The growth was driven by strong sales of micro-beaded fertilizers and biological products. A significant agreement with Syngenta Seedcare aims to enhance global inoculant growth, with a minimum profit share of $23 million per year. Despite a severe drought in Argentina, management remains optimistic about future growth.

Positive

• Revenue increased 71% YoY to $127.1 million.
• Gross profit grew 52% YoY, reaching $51.4 million.
• Adjusted EBITDA nearly doubled to $24.5 million.
• Agreement with Syngenta Seedcare secured minimum annual profits of $23 million.
• Upfront payment of $50 million received from Syngenta.

Negative

• Drought conditions in Argentina may hinder short-term sales.
• Operational challenges from Pro Farm's negative EBITDA.

Revenues increased 71% compared to 1Q22 pro forma numbers

1Q23 Adjusted EBITDA nearly doubled YoY, reaching $73 million on an LTM basis after excluding HB4 pre-launch costs

Announced agreement with Syngenta Seedcare supporting inoculant growth internationally

ROSARIO, Argentina--(BUSINESS WIRE)-- Bioceres Crop Solutions Corp. (Bioceres) (NASDAQ: BIOX), a fully integrated provider of crop productivity solutions designed to enable the transition of agriculture towards carbon neutrality, announced financial results for the fiscal first quarter ended September 30, 2022. Financial results are expressed in U.S. dollars and are presented in accordance with International Financial Reporting Standards. All comparisons in this announcement are year-over-year (YoY), unless otherwise noted.

FINANCIAL & BUSINESS HIGHLIGHTS

• Total revenues in 1Q23 were $127.1 million, a 71% increase with respect to the comparable pro forma numbers for the first quarter of last year, which are inclusive of historical revenues from Pro Farm. Top line growth was driven by continued outstanding performance in micro-beaded fertilizers, as well as inoculants, adjuvants and third-party products.
• Gross profit for the quarter increased 52% year over year compared to 1Q22 pro forma numbers, reaching $51.4 million, with all three product segments contributing to gross profit growth.
• Adjusted EBITDA for the quarter was $24.5 million, nearly doubling last year’s quarterly result, reflecting strong top line and gross profit growth.
• The company announced an agreement with Syngenta Seedcare for the development and commercialization of certain biological seed treatments. The partnership will drive global expansion, sustain double digit growth in the category, and provide a baseline of minimum profit sharing over the life of the agreement. Additionally, an upfront payment of $50 million was received in early October 2022.
• HB4 Wheat harvest and Soy planting are beginning in Latin America, a season characterized by a very severe drought. HB4 Soy hectares more than double year ago seed multiplication level, for early season plantings. Two soybean varieties are being scaled in Brazil for an upcoming launch in this territory.
• Merger with Pro Farm triggers adoption of the U.S. dollar as the functional currency in main operational subsidiaries, starting in 1Q23. The Pro Farm merger and subsequent business integration drove a functional currency switch from local currency to the U.S. dollar in the main Argentine subsidiaries, whose operations are carried out almost exclusively in U.S. dollars. The shift eliminates the need for IAS 29 inflationary adjustments going forward.
• Completion of previously announced $5 million share buy-back program. Program to be extended through the approval of an additional $5 million.

MANAGEMENT REVIEW

Mr. Federico Trucco, Bioceres´ Chief Executive Officer, commented: “We are delighted to report on a fantastic beginning to FY23, with revenues growing 71% for the quarter and adjusted EBITDA almost doubling for the period. This achievement is even more remarkable after six consecutive quarters of revenue expansion. Severe drought conditions in Argentina may transiently slow down sales in the current quarter for our core portfolio, an impact which we expect to be partially moderated with Pro Farm sales in North America and Europe. At the same time, the drought is creating a unique opportunity to showcase HB4 technology, with the country-wide wheat crop decline expected to be at the 40% level compared to last year’s harvest. We are also making good progress with HB4 Soy breeding and multiplication efforts, with early season plantings well under way and, with two varieties being scaled in Brazil for an upcoming launch with multipliers in this important geography.”

Trucco continued, “As exciting and promising as these data points may be, they are not the highlights of the quarter. In 1Q23 we have closed two transactions that give us an unmatched platform for future growth in biological ag inputs, positioning our company as a clear leader in sustainable solutions for the agriculture of the future. With the integration of Pro Farm (formerly Marrone Bio Innovations), we now have an existing portfolio - or pipeline - of products designed to replace or significantly reduce the use of synthetic chemicals in most functions for which they are required in high productivity agriculture. Where we can most immediately achieve this substitution is in the seed care segment of the industry, a $4-5 billion market where biologicals have already achieved a 20% penetration. And we are starting this journey with the recent announcement of a long-term collaboration agreement with one of the segment leaders, Syngenta.”

“We have been collaborating with Syngenta Seedcare for 20 years in Argentina and have jointly achieved and held the #1 position for our inoculants, bio fungicides and Syngenta molecules for a long time. This new collaboration creates the right structure to expand this success internationally, at an accelerated pace. We expect the international revenues generated by our inoculants alone to at least double in the next two years. While Syngenta will now cover working capital needs as well as sales and marketing activities, we have secured minimum profits that average $23 million per year over the life of the agreement, not including an upfront fee of $50 million in exchange for the different rights granted for the collaboration. On top of these annual minimum profits, we will receive between 50% and 30% of the incremental profits generated by the collaboration, depending on the geography and the year. The collaboration is not just designed to maximize our commercial reach, but it is also focused on accelerating our R&D efforts, with Syngenta covering 70% of the R&D investments required for early pipeline products and new products that we may opt to develop jointly within this framework." Trucco finished by adding, “we want to thank Syngenta Seedcare leadership for their trust and hard work to get to this point and reassure them of our full commitment to the success of this joint endeavor.”

Mr. Enrique Lopez Lecube, Bioceres´ Chief Financial Officer, noted, “This was an extremely important quarter from a strategy standpoint. We started the fiscal year on a strong note with the completion of the merger with Pro Farm and made considerable progress on our integration and synergy efforts throughout the quarter. Simultaneously we executed an ironclad agreement with Syngenta Seedcare that solidifies a profitable long-term growth path for our inoculants. These two milestones put us in a unique position to structurally benefit from the secular growth trend and high profitability profile that biologicals offer. Our first quarter financial performance continued to build on past execution, adding a 71% top line expansion to the already outstanding 62% growth reported for our last full fiscal year. Importantly, this growth transcended revenues and brought a record-high $24.5 million Adjusted EBITDA for the quarter, even as we account for HB4 inventory ramp-up costs and negative EBITDA from Pro Farm. Our balance sheet and cash position remain strong, particularly after the issuance of the $55 million convertible notes in July, followed by the $50 million upfront payment received from Syngenta in early October”. Lopez Lecube added, “Despite severe weather conditions currently affecting farmers in an important end market like Argentina, our strong first quarter results and the revenue diversification we gained from Pro Farm, make us feel confident about the growth outlook for the full fiscal year. We will remain focused on executing our HB4 strategy and making Pro Farm assets EBITDA contributors before year end”.

KEY FINANCIAL METRICS

(In millions of U.S. dollars, unless where otherwise stated)

Table 1: 1Q23 Key Financial Metrics

1Q23	1Q22 Pro Forma 1	1Q23	% Change
Revenue by Segment
Crop Protection	41.0	63.0	54%
Seed and Integrated Products	8.7	13.8	59%
Crop Nutrition	24.8	50.3	103%
Total Revenue	74.5	127.1	71%
Gross Profit	33.9	51.4	52%
Gross Margin	45.5%	40.5%	(505 bps)

1. 1Q22 pro forma financials include Pro Farm historical numbers and Bioceres comparable metrics.

	1Q22	1Q23	% Change
Adjusted EBITDA	12.4	24.5	98%
HB4 ramp-up cost	1.9	1.0	(48%)
Adjusted EBITDA excluding HB4 ramp-up cost2	14.4	25.5	78%

2. Only excludes HB4 ramp-up cost. The remaining HB4 operating expenses are included in the Adjusted EBITDA metric.

1Q23 – Summary: 1Q23 was an outstanding quarter with revenues increasing 71% to $127.1 million when compared to 1Q22 pro forma revenues that include historical sales from Pro Farm. Top-line growth was driven by continued strong performance in micro-beaded fertilizers, as well as adjuvants, third-party products, and seed treatment packs. Gross profit increased 52%, with an overall growth margin of 40.5%. Adjusted EBITDA nearly doubled at $24.5 million. This number includes the effect of HB4 ramp-up costs and negative EBITDA from Pro Farm.

For a full version of Bioceres first quarter 2023 earnings release, click here.

FIRST QUARTER 2023 EARNINGS CONFERENCE CALL

Management will host a conference call and question-and-answer session, which will be accompanied by a presentation available during the webcast or accessed via the investor relations section of the company’s website.

To access the call, please use the following information:

Date:	Thursday, November 10, 2022
Time:	8:30 a.m. EST, 5:30 a.m. PST
Toll Free dial-in number:	1-844-200-6205
Toll/International dial-in number:	1-929-526-1599
Conference ID:	941140
Webcast:	Click here

Please dial in 5-10 minutes prior to the start time to register and join.

The conference call will be broadcast live and available for replay here and via the investor relations section of the company’s website here.

A replay of the call will be available through November 15, 2022, following the conference.

Toll Free Replay Number:	1-866-813-9403
International Replay Number:	+44 204 525 0658
Replay ID:	062915

About Bioceres Crop Solutions Corp.

Bioceres Crop Solutions Corp. (NASDAQ: BIOX) is a fully integrated provider of crop productivity technologies designed to enable the transition of agriculture towards carbon neutrality. To do this, Bioceres’ solutions create economic incentives for farmers and other stakeholders to adopt environmentally friendlier production practices. The Company has a unique biotech platform with high-impact, patented technologies for seeds and microbial ag-inputs, as well as next generation Crop Nutrition and Protection solutions. Through its HB4® program, the Company is bringing digital solutions to support growers’ decisions and provide end-to-end traceability for production outputs. For more information, visit here.

Forward-Looking Statements

This communication includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include estimated financial data and, among others, statements related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses by governments, clients and the Company, on our business, financial condition, liquidity position and results of operations, and any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions and uncertainties. These forward-looking statements include, but are not limited to, whether (i) the health and safety measures implemented to safeguard employees and assure business continuity will be successful, (ii) the uncertainty related to COVID-19 in the farming community will be short lived, and (iii) we will be able to coordinate efforts to ramp up inventories. Such forward-looking statements are based on management’s reasonable current assumptions, expectations, plans and forecasts regarding the Company’s current or future results and future business and economic conditions more generally. Such forward-looking statements involve risks, uncertainties and other factors, which may cause the actual results, levels of activity, performance or achievement of the Company to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that actual results will not differ materially from management’s expectations or could affect the Company’s ability to achieve its strategic goals, including the uncertainties relating to the impact of COVID-19 on the Company’s business, operations, liquidity and financial results and the other factors that are described in the sections entitled “Risk Factors” in the Company's Securities and Exchange Commission filings updated from time to time. The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. All forward-looking statements contained in this release are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as of the date they are or were made, and the Company does not intend to update or otherwise revise the forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, except as required by law.

Unaudited Consolidated Statement of Comprehensive Income
(Figures in U.S. dollars)
	Three-month period ended 09/30/2022	Three-month period ended 09/30/2021
Total revenue	127,105,318	66,906,245
Cost of sales	(75,675,878)	(37,882,453)
Gross profit	51,429,440	29,023,792
% Gross profit	40%	43%
Operating expenses	(35,756,924)	(17,614,742)
Share of profit of JV	842,240	(222,236)
Other income or expenses, net	478,041	(1,146,617)
Operating profit	16,992,797	10,040,197
Finance result	(8,326,449)	(5,179,668)
Profit before income tax	8,666,348	4,860,529
Income tax	(4,754,347)	(2,595,313)
Profit for the period	3,912,001	2,265,216
Other comprehensive profit / (loss)	(7,213)	5,729,137
Total comprehensive Profit	3,904,788	7,994,353
Profit for the period attributable to:
Equity holders of the parent	498,297	874,137
Non-controlling interests	3,413,704	1,391,079
	3,912,001	2,265,216
Total comprehensive profit attributable to:
Equity holders of the parent	414,561	5,722,061
Non-controlling interests	3,490,227	2,272,292
	3,904,788	7,994,353

Unaudited Consolidated Statement of Financial Position
(Figures in U.S. dollars)
ASSETS	09/30/2022	06/30/2022
CURRENT ASSETS
Cash and cash equivalents	47,387,568	33,475,266
Other financial assets	3,930,613	5,401,133
Trade receivables	142,754,854	111,752,310
Other receivables	22,957,655	19,327,584
Income and minimum presumed income taxes recoverable	1,567,204	1,647,398
Inventories	141,910,323	126,044,122
Biological assets	1,026,744	57,313
Total current assets	361,534,961	297,705,126
NON-CURRENT ASSETS
Other financial assets	1,074,005	619,841
Trade receivables	5,076	200,412
Other receivables	3,163,404	2,254,199
Income and minimum presumed income taxes recoverable	109,175	44,412
Deferred tax assets	4,120,745	4,011,374
Investments in joint ventures and associates	39,629,317	38,554,092
Property, plant and equipment	62,807,699	49,908,325
Intangible assets	174,493,490	76,704,869
Goodwill	123,981,288	36,073,685
Right-of-use leased asset	14,224,682	12,144,026
Total non-current assets	423,608,881	220,515,235
Total assets	785,143,842	518,220,361

LIABILITIES	09/30/2022	06/30/2022
CURRENT LIABILITIES
Trade and other payables	138,810,191	125,849,620
Borrowings	74,733,602	71,301,468
Employee benefits and social security	11,785,442	7,619,121
Deferred revenue and advances from customers	6,377,194	5,895,313
Income tax payable	6,357,991	7,538,764
Consideration for acquisition	2,418,847	3,048,562
Lease liabilities	2,769,144	1,412,904
Total current liabilities	243,252,411	222,665,752
NON-CURRENT LIABILITIES
Borrowings	81,778,391	74,177,169
Investments in joint ventures and associates	850,065	717,948
Deferred tax liabilities	45,073,540	29,005,943
Provisions	5,052,363	603,022
Consideration for acquisitions	11,502,897	9,854,228
Convertible notes	71,362,653	12,559,071
Lease liability	11,516,213	10,338,380
Total non-current liabilities	227,136,122	137,255,761
Total liabilities	470,388,533	359,921,513
EQUITY
Equity attributable to owners of the parent	280,512,784	127,358,573
Non-controlling interests	34,242,525	30,940,275
Total equity	314,755,309	158,298,848
Total equity and liabilities	785,143,842	518,220,361

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221109006115/en/

Bioceres Crop Solutions

Paula Savanti

Head of Investor Relations

investorrelations@biocerescrops.com

Source: Bioceres Crop Solutions Corp.

FAQ

What were Bioceres Crop Solutions' revenues for 1Q23?

Bioceres reported revenues of $127.1 million for the first quarter of 2023, a 71% increase compared to the same period last year.

How did Bioceres Crop Solutions perform in terms of EBITDA in 1Q23?

The company achieved an Adjusted EBITDA of $24.5 million in 1Q23, nearly doubling from the previous year's figure.

What is the significance of the agreement with Syngenta for Bioceres?

The agreement with Syngenta Seedcare will support global inoculant growth and secures minimum profits of $23 million annually, along with a $50 million upfront payment.

How are drought conditions affecting Bioceres' sales?

Severe drought in Argentina may transiently slow down sales for Bioceres' core portfolio, although the impact is expected to be partially offset by Pro Farm sales in other regions.