Bioceres Crop Solutions reports 3Q24 results with total revenues of $84.0 million and adjusted EBITDA of $21.1 million

Bioceres Crop Solutions Corp. (Bioceres) (NASDAQ: BIOX), a leader in the development and commercialization of productivity solutions designed to regenerate agricultural ecosystems while making crops more resilient to climate change, announced financial results for the fiscal third quarter ended March 31, 2024. 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 3Q24 were $84.0 million compared to $93.6 million in the same quarter last year. Operational growth in the business was offset by a $15.7 million accrual of the compensatory payment from Syngenta, in comparison to a $32.9 million accrual in 3Q23.

• Operating profit was $13.2 million with GAAP net income at $9.8 million.

• Adjusted EBITDA for the quarter was $21.1 million, compared to $35.8 million in the year ago quarter. The decrease was driven by the lower compensatory payment accrual, partially softened by improved operational performance.

• Regulatory clearance in Brazil unlocks bio-insecticidal/bio-nematicidal solutions, expanding Bioceres’ biologicals portfolio in this geography.

• HB4 Soy varieties showed satisfactory performance at farmer level in Brazil, with an average yield improvement of 7% against non-HB4 varieties.

Management Review

Mr. Federico Trucco, Bioceres´ Chief Executive Officer, commented: ″We are generally satisfied with our third quarter results, despite some delayed sales in our bio-nutrition segment in Argentina and Brazil, which we now expect to realize in our fourth and final fiscal quarter. As anticipated, our third quarter growth is disfavored when compared to the year before, given the disproportional weight of the Syngenta distribution agreement, whose contribution is now more evenly distributed throughout the year. From a qualitative point of view, we continue to see positive developments in Brazil, which we expect to translate into quantitative milestones in one or two seasons. One of these developments was the first regulatory approval for our inactivated Burkholderia bio-control solutions, which we announced last week. This approval creates an immediate opportunity in high value bio-insecticidal markets as well as in our Generation HB4 channel, and ― in one or two seasons ― in broader row-crop markets once our lowest rate formulations are included in the portfolio. Another positive development in Brazil comes from the performance of our first two HB4 soy varieties, where we received favorable feedback from key farmers and expect to increase the current pace of growth. Looking ahead and despite the industry-wide headwinds persisting from last year, we are confident on the attractiveness of our value propositions and the capabilities of our teams to achieve the double-digit growth we are known to deliver.″

Mr. Enrique Lopez Lecube, Bioceres´ Chief Financial Officer, noted: ″This year’s third fiscal quarter was marked by a difficult comparison against last year´s third quarter, in which the compensatory payment from the Syngenta agreement drove a substantial portion of sales and explained our profits almost in full. In a scenario of slower-than-expected market dynamics for fertilizers and inoculants in South America and persisting suboptimal conditions for crop protection in the US and Brazil, we were still able to partially offset the $17 million year-over-year difference from the Syngenta agreement by growing the rest of our business’ top line by roughly $8 million. As we head into the last quarter of our fiscal year, we are confident that with a normalized crop nutrition market we will be in good shape to deliver our annual goals of achieving double-digit growth in EBITDA.″

Key Financial Metrics

3Q24 Summary: Total revenues were $84.0 million in 3Q24, compared to $93.6 million for the same quarter last year. The decline is fully explained by a ~$17 million decrease in the accrual of the Syngenta compensatory payment, which was $15.7 million this year, compared to $32.9 million in the year-ago quarter. Excluding these accruals, the business generated $68.3 million in revenues, compared to $60.7 million last year, with modest growth in Crop Protection and Crop Nutrition, the two main business segments contributing material sales during the quarter.

Gross profit for the quarter was $42.6 million, a decline compared to the $57.5 million in 3Q23. As with revenues, the reduction was entirely due to the lower accrual of the compensatory payment this quarter compared to last year. Excluding this, gross profit increased ― although proportionally less than revenues due to product mix ― and overall gross margin remained practically flat.

GAAP net income and adjusted EBITDA for the quarter were $9.8 million and $21.1 million, respectively, compared to $27.5 million and $35.8 million, respectively. The decrease in the compensatory payment translates directly into the bottom line, partially offset by an improved underlying business performance.

Third Quarter 2024 Financial Results

Revenues

Revenues in 3Q24 were $84.0 million, compared to $93.6 million in the same quarter last year, with mixed performance across segments.

In Crop Protection, revenues were 6% higher than last year, mainly due to higher sales of third-party crop protection products whose demand was spurred by a better moisture profile in Argentina this year. Adjuvant sales also contributed to segment growth, although their performance was limited in Brazil, given the continuing difficulties in that country’s crop protection market. Similar to Brazil, the bioprotection market in the U.S. continued to see some headwinds on purchase flow from distributors during the quarter.

Seed and Integrated Products saw a 46% increase in revenues compared to the year before. Growth was driven by HB4 downstream sales in a seasonally low quarter for other seed-related products. As mentioned in previous quarters, inventories of first-generation varieties continue to be sold into the processing channel to reduce working capital, while developing industrial channels for HB4 grain.

In Crop Nutrition, product sales grew in comparison to the previous year, however overall segment sales posted a 34% yearly reduction due to strong comparables from the Syngenta payment accrual. As was previously disclosed, two thirds of the $50 million compensatory payment from Syngenta were booked in 3Q23, and $15.7 million were recognized in the current quarter. This decline drives segment results, only partially softened by growth in biostimulant and micro-beaded fertilizer sales. Biostimulant sales grew during the quarter, with expansion in Brazil and Europe. Micro-beaded fertilizers also grew against

last year’s drought affected levels; the increase was lower than expected given reluctance from farmers to make pre-season fertilizer purchases ahead of winter planting. In a context of lower commodity prices, fertilizer prices have remained comparatively high, increasing farmers´ expectations for an improvement in relative prices.

Gross Profit & Margin

Gross profit for the quarter was $42.6 million, compared to $57.5 million the year before.

In Crop Protection, gross profit increased by 2% on higher sales. The increase is lower than that of revenues due to changes in product mix, with increased participation of lower-margin third party products, while higher-margin products such as adjuvants, made a weaker contribution to growth this quarter.

Gross profit from Seed and Integrated Products declined despite increased sales, as profits from high-margin seed treatment product sales that migrated into the Syngenta agreement were not fully compensated by the growth in lower-margin downstream grain sales.

In Crop Nutrition, the gross profit decline is entirely due to the ~$17 million lower compensatory payment accrual. The decrease is mitigated by an increase in gross profit from higher sales of fertilizers, biostimulants and inoculants.

Gross margin for the quarter was 50.8%, a year-over-year reduction given the extraordinary comparable.

Operating Expenses

Selling, General and Administrative Expenses: SG&A expenses excluding D&A, transaction expenses and share-based incentives, were $22.0 million in 3Q24, compared to $20.3 million the same quarter last year. The $1.7 million increase results from higher variable expenses and minor increases in fixed operating expenses.

Research and Development: total R&D expenses excluding D&A and share-based incentives were $2.0 million in 3Q24 compared with $2.5 million in 3Q23 and represented 2% of sales for the quarter.

GAAP Net Income & Adjusted EBITDA

GAAP net income was $9.8 million in 3Q24, compared to $27.5 million for the same quarter last year. The decrease in net income is primarily the result of lower operating profit ― as previously explained, due to the lower accrual of the compensatory payment from Syngenta ―, and lower tax income benefits in comparison to the same quarter last year. The decrease was partially offset by an improvement in financial results on account of lower financial expenses and improved exchange variation results from Argentine peso-denominated assets on a lower depreciation rate for the quarter.

Adjusted EBITDA was $21.1 million in 3Q24, compared to $35.8 million, for the same quarter last year. The decline in Adjusted EBITDA is fully driven by the lower accrual of the compensatory payment from Syngenta compared to the year-ago quarter, partially offset by improved performance in the underlying business.

Financial Income and Loss

Total financial results improved by $3.2 million during the quarter due to lower interest expenses on both a lower debt position and lower average cost of debt, as well as improved results from Argentine peso-denominated assets on a lower depreciation rate for the quarter.

Balance Sheet Highlights

Total Financial Debt stood at $242.8 million as of March 31, 2024, compared to $250.1 million on March 31, 2023.

Cash, Cash Equivalents and Other Short-Term Investments totaled $32.8 million in 3Q24, compared to $70.9 million in 3Q23, which reflected the $50.0 million cash payment from the Syngenta agreement received in 2Q23. Total financial debt net of cash, cash equivalents and other short-term investments stood at $210.0 million in 3Q24.

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