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| Statement |
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| We feel really good in terms of Brazil, and we think that is moving at a faster pace than what we projected |
| At the same time, we're seeing an accelerated progress in Brazil, where we work with 25 key farmers to test and multiply two materials developed under the TMG collaboration with good results |
| Total revenues in our second quarter of fiscal '24 were $140 million, an almost 50% improvement compared to the same quarter of last year |
| Our net income improved by eightfold, and our adjusted EBITDA for the quarter reached $24.1 million, a 134% increase compared to the year-ago period, resulting in an LTM EBITDA of $86.7 million |
| Bioprotection was the only category that had a slight drop in the top line, but on the flip side expanded margins significantly and grew gross profit as we will see in the coming slide |
| So we're delighted |
| Our newer materials, which we named second generation materials, have helped us improve performance in some high productivity conditions, where we are now at par to the best performing conventional seeds |
| We are very excited about the way things are going in the current fiscal year |
| As Federico mentioned, we had our highest quarterly revenue rep this quarter, at $140 million, which represents a 49% increase year-over-year |
| This result is no doubt a reflection of the quality and attractiveness of our portfolio, but also the ability of our teams to deliver consistent and profitable growth when market conditions are normal |
| As you mentioned, we're making good progress in the US |
| So we do feel very confident about what we're doing |
| Well, today we can confirm that the good performance in the current fiscal year's first quarter was matched by outstanding performance in this second quarter, which led to resumed double-digit growth in the first half of the fiscal year, reaching revenues of $257 million, which is a 16% increase to the previous fiscal year's first half |
| The main driver was the top line growth from microbead fertilizers, which was matched by margin expansion from slightly higher prices and lower raw material costs in that particular product category |
| We continue to see sustained demand for our technologies and a clear path to targeting double-digit growth, something that we can afford mainly because of the strength and attractiveness of the portfolio that we have been patiently building throughout the years |
| And finally, with regards to the steep depreciation of the Argentine peso that happened during this second quarter, I think it is worth noting that the strength and stability of a dollar-denominated business in that country not only allowed us to conduct business as usual, but we could also achieve some financial gains from hedging our activities, as well as benefit from a better cost environment |
| This growth was mainly driven by sales of micro-heated fertilizers with an outstanding 61% increase in sales volumes paired with a slight increase in price despite lower commodity fertilizer prices, which in my view speaks to the strength of the value proposition this technology brings to farmers |
| So we feel good in terms of where we are |
| Adjuvants in particular saw a 40% increase in sales this quarter in Argentina and also performed well in Brazil |
| I think in terms of overall performance in environments where wheat yields tend to be below average, and that is probably below three tons per hectare in Argentina, we've seen double-digit improvements across all generations |
| This substantial improvement is primarily explained by the increase of almost $17 million in gross profit that I just described, which was matched by an increase of $2 million in JV results and also operational leverage as operating expenses grew at a lower-pace than gross profit |
| But also, as I mentioned in the previous slide, a slight drop in bio-controlled product sales in the US was more than offset with margin expansion in that product category, which led to a positive contribution to gross profit growth by this product category, bio-protection |
| The excellent performance of high margin adjuvants improved the mix, contributing to increase the average gross margin of the segment |
| On the other hand, that's kind of a very well-established consumer demand |
| While we are not immune to the broader destocking process in several geographies, resulting in a double-digit contraction in some key markets like Brazil, our portfolio of innovative products, secular growth drivers, and strong execution by our commercial teams allowed us to continue to outperform the industry and deliver our highest quarterly revenues yet |
| to be able to show this type of growth after growing last year as well, almost 25% on the revenue side, it's very rewarding |
| And finally, gross profit from crop protection increased by 40% as a result of higher sales, improved product mix and margin expansion in some product categories |
| The seed and integrated product segment saw the greatest percentage growth, almost doubling last year's sales number |
| The Southern Hemisphere has had a very, very good summer crops planting season |
| As we better position these materials, we can move to 9% and 13% improvements when compared to the top-performing variety |
| Statement |
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| At that time, our top line had dropped 7% year-over-year |
| As we move to higher yielding environments, what we saw in the first-generation materials is that above the 4.5, five tons per hectare, we were experiencing a yield drag or a gap compared to the top-performing commercial varieties |
| As I said at the beginning, despite the difficulties that have been experienced mostly by others in key markets like Brazil, and sometimes also the U.S |
| The last two years have been tough on the weather side |
| The overall gross margin for the segment decreased as sales from higher margin seed treatment packs and HB4 soy seed grew at a lower-pace than HB4 grain inventory sales, which had been negligible last year and that have inherently lower margins than packs and seeds |
| As you might recall, a year ago, Argentina, which is an important market to us, was undergoing a historic drought, and our growth trajectory had been unexpectedly put on hold |
| In the prior fiscal year, we had had a record high first quarter paired with a soft second quarter due to the drought |
| The drop in the overall gross margin for the segment comes from a product mix, but there were no surprises |
| We don't feel, as Federico mentioned, such a big pressure as other players from de-stocking or higher interest rates |
| With the farmer protests in Europe and the scrapping of the pesticide reduction kind of proposal or plans there |
| And then I'm curious just with the wet weather in California, I'm based in California and it seems to be raining all the time, I'm wondering what the outlook is for pest pressure? You talked about pest pressure in other regions picking up given weather dynamics |
| But obviously, there was a much higher contribution from sales from inventory of grain that have inherently lower margins than the rest of the plots |
| So when we are talking about four to five tons per hectare, where in the first generation materials we had a yield drag compared to the best performing commercial varieties that has been neutralized or overcome in the second generation materials |
| One, recovering working capital from grain that is not seed quality |
| in this past calendar year, in calendar 2023, there's kind of a series of three, 4-week, just brutal droughts throughout the U.S |
| So, I think even though there was a significant ambition, we weren't able to see material changes in the regulatory process that would allow us to fast track, time to market for our existing solutions |
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