Core business maintains strong
momentum, with Comparable Revenues and Adjusted EBITDA increasing
8% and 30%, respectively
Company acquires full ownership in Verdeca
JV, consolidating HB4® Soy economics and increasing go-to market
flexibility
Concurrent acquisition of wheat intellectual
property rights from Arcadia and recent regulatory approval of
drought tolerant HB4 Wheat in Argentina significantly strengthen
Bioceres’ ability to catalyze global wheat market
Bioceres Crop Solutions Corp. (“Bioceres” or the “Company”)
(NYSE American: BIOX), a fully-integrated provider of crop
productivity solutions designed to enable the transition of
agriculture towards carbon neutrality, announced today its
unaudited consolidated financial results for the three-month period
ended September 30, 2020. 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 noted otherwise.
KEY BUSINESS DEVELOPMENTS
• Subsequent to quarter-end, Bioceres acquired from Arcadia
Biosciences Inc. (“Arcadia”) earlier today the remaining ownership
interest in Verdeca LLC (“Verdeca”), a joint venture launched in
2012 to develop second generation biotechnologies for soybean and
to commercialize HB4 Soy globally. By assuming full ownership of
Verdeca, the Company expects to accelerate the execution of its HB4
Soy strategy, in particular by expanding breeding and go-to market
collaborations with partners in new and existing geographies.
Complete ownership will also enable Bioceres to capture more of the
underlying economic value of HB4 Soy on a per hectare basis. As
part of the transaction, the Company will own Verdeca´s vetted
soybean library of gene-edited materials for developing new quality
and productivity traits, as well as exclusive rights to all Arcadia
technologies applicable to this crop.
• Under the terms of the above-mentioned agreement, Bioceres has
also been granted Latin American rights to Arcadia’s wheat traits
and Good Wheat® brand. This platform of genome-edited materials
includes wheat varieties with 65% less gluten, 10-times the dietary
fiber, and oxidative stability (which extends the shelf life of
whole flours and derived products), while being substantially
equivalent in all other aspects to conventional wheat. Some of the
rights acquired are subject to clearances by third parties.
• In consideration for the acquisition of Arcadia’s interest in
Verdeca, the wheat rights discussed above, and other intellectual
property assets, Bioceres is paying $20 million at closing, through
a combination of $5 million in cash and $15 million in equity
(1,875,000 Bioceres´ common shares priced at $8) that is subject to
a six-month lock-up period. One-third of these shares are pledged
in favor of Bioceres and will be released when the aforementioned
third-party clearances to the licensed wheat rights have been
granted. Post-closing, the Company will pay: i) $2 million subject
to obtaining Chinese import clearance for HB4 Soy or achieving
penetration of the HB4 Soy technology in a minimum number of
hectares, and ii) payments equivalent to 6% of the net HB4
technology royalties realized by Verdeca, until a $10 million
aggregate amount is met. The overall total consideration is $32
million, excluding $1 million in fees and transaction costs to be
reimbursed to Arcadia post-closing and non-Verdeca related
royalties.
• On October 8, 2020, Bioceres’ drought tolerant HB4 Wheat was
commercially approved in Argentina, subject to import approval
being granted in Brazil, Argentina’s main wheat trading partner.
This approval is the first for HB4 Wheat anywhere in the world and
marks an historical milestone in the biotechnology sphere for this
crop.
FISCAL 1Q21 FINANCIAL & BUSINESS HIGHLIGHTS
• Total revenue increased 8% on a comparable basis to $42.2
million, with Adjusted EBITDA rising 30% to $10.5 million.
• Bioceres’ cash position rose more than five-fold through more
efficient sources of capital versus the same period in fiscal year
2020, including $17 million raised through the August 2020 local
public offering of Rizobacter bonds bearing zero percent
interest.
• The Company’s Net debt-to-EBITDA ratio was 2.12x at
quarter-end, compared to 2.15x in fiscal 1Q20.
• HB4 Wheat and HB4 Soy inventory ramp-up processes advance as
discussed in Bioceres’ previous Earnings Report. A dry winter
season hindered wheat production in Argentina, but was conducive to
highlighting the full potential of HB4 drought tolerance as this
crop’s harvest approaches in the southern hemisphere.
MANAGEMENT REVIEW
Commenting on the Company’s transaction with Arcadia, Mr.
Federico Trucco, Chief Executive Officer of Bioceres, said, “My
first relevant transaction as CEO of Bioceres back in 2011-12 was
the agreement with Arcadia Biosciences for the constitution and
financing of Verdeca LLC. At that time, Bioceres could barely pay
the due diligence and legal costs associated to the transaction,
HB4 was a technology promise, our ability to de-regulate a GMO
event was disputable, and the overall investment required to
transform this promise into a commercially approved product was
estimated at over $100 million by industry experts. To be able to
say that we have successfully overcome these initial difficulties
and are today re-gaining full control not only on HB4 Soy but also
on other very attractive earlier stage technologies and technology
platforms within Verdeca’s portfolio, fills me with enormous pride.
I would like to thank Arcadia for trusting us back in 2012 and for
helping us advance Verdeca’s pipeline to its current state. We also
take this opportunity to welcome Arcadia as a new shareholder of
our company.”
Mr. Trucco added, “We are announcing this important transaction
little over one month after Argentina’s regulatory clearance of HB4
Wheat, becoming the first company globally to have a commercially
enabled path to market for a drought tolerance trait in this staple
crop. Encouraged by this development, we are adding to our
portfolio of wheat technologies Arcadia’s genome-edited varieties,
especially designed to tackle major consumer health concerns. This
expanded wheat portfolio will allow us to further leverage our
investments in closed growing systems which, in addition to strong
identity preservation and traceability capabilities, remain of
paramount importance as we engage with growers and consumers for
which our technologies are relevant.”
Mr. Enrique Lopez Lecube, Chief Financial Officer of Bioceres,
said, “Our recent agreement with Arcadia together with the HB4
Wheat approval in Argentina, both significant achievements for
Bioceres, were preceded by the growth momentum that we maintained
going into the new fiscal year. Sales for the first fiscal quarter
grew 8% year over year, while Adjusted EBITDA increased 30% despite
a slow start to the growing season, due to limited rainfall. The
resilience of our core business, along with our strong balance
sheet and cash position, are a solid foundation for generating
substantially higher levels of growth as we continue to make
further headway with our HB4 strategy. By acquiring full ownership
of Verdeca we are now in a position to capture significantly more
of our core technology’s underlying economic value, ensuring that
we maximize ROI as we further invest in ramping up our inventories
and in accelerating our commercial efforts.”
Operational Metrics (Millions of
hectares)
1Q20
1Q21
%Change
Adjuvants
10.0
13.8
38
%
Inoculants
5.7
4.1
-28
%
Packs
1.3
2.2
69
%
Table 2: Key Financial Metrics
(Figures in millions of US dollars, unless otherwise noted)
As Reported
% Change
Revenue by Segment
1Q20
1Q21
Reported
Comparable¹
Crop Protection
18.0
21.6
21
%
11
%
Seed and Integrated Products
5.5
8.7
57
%
57
%
Crop Nutrition
12.8
12.0
(6
%)
(15
%)
Total Revenue
36.3
42.4
17
%
8
%
Gross Profit
15.9
19.2
21
%
13
%
Gross Margin
43.9
%
45.4
%
156 bps
203 bps
Adjusted EBITDA
8.1
10.5
30
%
Adjusted EBITDA Margin
22.4
%
24.9
%
246 bps
Cash & Cash Equivalents
5.5
59.6
446
%
Net Debt to LTM EBITDA
2.15x
2.12x
1. Comparable excludes the impact of IAS29 as discussed in
more detail on page 17.
For a full version of Bioceres Fiscal First Quarter 2021
Earnings Release, please visit:
investors.biocerescrops.com/financials/results-center FISCAL FIRST
QUARTER 2021 EARNINGS CONFERENCE CALL When: November 12, 2020
Time: 8:30 a.m. Eastern time
Who:
Mr. Federico Trucco, Chief Executive
Officer
Mr. Enrique Lecube, Chief Financial
Officer
Mr. Maximo Goya, Investor Relations
Leader
Dial-in: (888) 869-118 (U.S. domestic); (706) 643-590
(International)
Conference ID: 6740967
Webcast:
https://investors.biocerescrops.com/home/default.aspx
About Bioceres Crop Solutions Corp.
Bioceres Crop Solutions Corp. (NYSE American: 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 https://investors.biocerescrops.com
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 information
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112005564/en/
Investor Relations Maximo Goya, Investor Relations
+54-341-4861100 maximo.goya@biocerescrops.com
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