EX-99.1 2 a19-5480_4ex99d1.htm EX-99.1

Exhibit 99.1

 

BIOCERES CROP SOLUTIONS CORP. Reports Financial Results for the Second Quarter and First Half ended December 31, 2018

 

Rosario, Argentina / March 18, 2019 — On March 14, 2019, Bioceres LLC and Union Acquisition Corp. succesfully completed the previously announced business combination. The new name of the combined entity upon the consummation of the business combination is Bioceres Crop Solutions Corp. (“Bioceres Crop Solutions”, the “Company”, “we”, “us” or “our”) (NYSE American: BIOX), which had 36,120,517 shares outstanding and an estimated net debt of $101 million upon closing. Bioceres Crop Solutions, a fully integrated provider of crop productivity solutions company, today announced its consolidated financial results for the three-month and six-month periods ended December 31, 2018.

 

Second Quarter ended December 31, 2018 highlights

 

·                      Revenues increased by 33% to $62.5 million, as compared to $47.1 million during the same period in 2017.

·                      Gross profit increased by 52% to $29.3 million, as compared to $19.3 million during the same period in 2017.

·                      Adjusted EBITDA increased by 121% or $11.1 million to $20.3 million from $9.1 million during the same period in 2017.

 

Six-month period ended December 31, 2018 highlights

 

·                      Revenues increased by 14% to $92.1 million, as compared to $81.0 million during the same period in 2017.

·                      Gross profit increased by 34% to $44.4 million, as compared to $33.1 million during the same period in 2017.

·                      Adjusted EBITDA increased by 83% or $13.2 million to $29.2 million from $16.0 million during the same period in 2017.

 

“This is our first earnings report since initiating our NYSE American listing last Friday, and we are delighted to show a very robust performance for the last quarter and the second half of the 2018 calendar year. This financial performance is the result of multiple growth initiatives currently under execution, most significantly growth in our micro-beaded fertilizer and international businesses. There is also a shift in our product mix away from third-party products, resulting in improvement in gross margin profiles. Although these numbers have exceeded our initial projections for the reported period, we are not revising at this time our projections for Fiscal Year 2019.” said Federico Trucco, CEO of Bioceres Crop Solutions.

 

“Over the past two quarters we have been able to accomplish consistent growth in revenues while increasing our Adjusted EBITDA margin. These results led us to a total Adjusted EBITDA of $35.6 million for the last twelve-month (“LTM”) period ended December 1, 2018. Despite being very satisfied with this strong margin performance, we do not anticipate this trend to expand throughout the following two quarters and therefore maintain $38 million as our Adjusted EBITDA target for the full fiscal year ending June 2019.” said Enrique López Lecube, CFO of Bioceres Crop Solutions.

 

The unaudited financial information in this press release has been prepared consistently with International Accounting Standards 34, “Interim Financial Reporting” as issued by the International Accounting Standards Board.

 

This press release does not contain Bioceres Crop Solutions’ financial information, but presents the financial information of the Bioceres Inc Crop Business (as defined below) on a carve-out basis, combined with that of Bioceres Semillas S.A. (collectively, the “Group”).

 

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Bioceres Inc Crop Business is defined as the contributed crop business net assets made by Bioceres Inc. (which was converted to Bioceres LLC) to BCS Holdings, Inc. (a wholly-owned subsidiary of Bioceres Crop Solutions) pursuant to the business combination that consummated on March 14, 2019.

 

Considering the recent completion of the business combination between Bioceres LLC and Union Acquisition Corp., Bioceres Crop Solutions will not hold a conference call at this time. Instead, the Company intends to host a conference call and webcast to comprehensively discuss its full annual results and performance for the fiscal year ended June 30, 2019 at the time of their release.

 

About Bioceres Crop Solutions

 

Bioceres Crop Solutions is a fully integrated provider of crop productivity solutions, including seeds, seed traits, seed treatments, biologicals, high-value adjuvants and fertilizers. Unlike most industry participants that specialize in a single technology, chemistry, product, condition or stage of plant development, Bioceres Crop Solutions has developed a multi-discipline and multi-product platform capable of providing solutions throughout the entire crop cycle, from pre-planting to transportation and storage. Bioceres Crop Solutions’ platform is designed to cost effectively bring high value technologies to market through an open architecture approach. Bioceres Crop Solutions’ headquarters and primary operations are based in Argentina, which is its key end-market as well as one of the largest markets globally for genetically modified crops. Through its main operational subsidiary Rizobacter, Bioceres Crop Solutions has a growing and significant international presence, particularly in Brazil and Paraguay.

 

For more information, visit www.biocerescrops.com.

 

Forward-Looking Statements

 

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

 

Non-IFRS Financial Information

 

We supplement the use of IFRS financial measures with non-IFRS financial measures, including Adjusted EBITDA. We define Adjusted EBITDA as profit/(loss) exclusive of financial income/(costs), income tax benefit/(expense), depreciation, amortization, share-based compensation and inventory purchase allocation.

 

We believe that Adjusted EBITDA provides useful supplemental information to investors about us and our results. Adjusted EBITDA is among the measures used by our management team to evaluate our financial and operating performance and make day-to-day financial and operating decisions. In addition, Adjusted EBITDA and similarly titled measures are frequently used by our competitors, rating agencies, securities analysts, investors and other parties to evaluate companies in our industry. We also believe that Adjusted EBITDA is helpful to investors because it provides additional information about trends in our core operating performance prior to considering the impact of capital structure, depreciation, amortization and taxation on our results. Adjusted EBITDA should not be considered in isolation or as a substitute for other measures of financial performance reported in accordance with IFRS. Adjusted EBITDA has limitations as an analytical tool, including:

 

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·    Adjusted EBITDA does not reflect changes in, including cash requirements for, our working capital needs or contractual commitments;

 

·    Adjusted EBITDA does not reflect our financial expenses, or the cash requirements to service interest or principal payments on our indebtedness, or interest income or other financial income;

 

·    Adjusted EBITDA does not reflect our income tax expense or the cash requirements to pay our income taxes;

 

·    although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will need to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for the replacements;

 

·    although share-based compensation is a non-cash charge, Adjusted EBITDA does not consider the potentially dilutive impact of share-based compensation; and

 

·    other companies may calculate Adjusted EBITDA and similarly titled measures differently, limiting its usefulness as a comparative measure.

 

We compensate for the inherent limitations associated with using Adjusted EBITDA through disclosure of these limitations, presentation of our combined financial statements in accordance with IFRS and reconciliation of Adjusted EBITDA to the most directly comparable IFRS measure, income/(loss) for the period or year.

 

Application of IAS 29

 

Argentina has been classified as a hyperinflationary economy under the terms of IAS 29 from July 1, 2018. IAS 29 requires, to adjust all non-monetary items in the statement of financial position by applying a general price index from the day they were booked to the end of the reporting period. At the same time, it also requires that all items in the statement of income are expressed in terms of the measuring unit current at the end of the reporting period.  Consequently, on a monthly basis, results of operations for each reporting period are measured in Argentine Pesos and adjusted for inflation by the applicable monthly inflation rate each month. All amounts need to be restated by applying the change in the general price index from the dates when the items of income and expenses were initially recorded in the financial statements. As a result, each monthly results of operations are readjusted each successive month to reflect changes in the monthly inflation rate.

 

After the restatement explained above, IAS 21 “The Effects of Changes in Foreign Exchange Rates”, addresses the way results must be translated under inflation accounting, stating that all amounts shall be translated at the closing rate at the date of the most recent statement of financial position. Accordingly, monthly results of operations in Argentine Pesos, after adjustment for inflation pursuant to IAS 29, as described above, must then be converted into U.S dollars at the closing exchange rate for such monthly reported period. This conversion changes every prior reported monthly statement of income in U.S dollars as each monthly amount is readjusted under IAS 29 for inflation per above and reconverted at different exchange rates for each monthly reported period under IAS 21. As a result, the impact of monthly inflationary adjustments and monthly conversion adjustments vary the results of operation month to month until year end.

 

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Table 1: Consolidated statement of comprehensive income

 

 

 

Six-month
period ended

 

Six-month
period ended

 

Three-month
period ended

 

Three-month
period ended

 

LTM period
ended

 

 

 

12/31/2018

 

12/31/2017

 

12/31/2018

 

12/31/2017

 

12/31/2018

 

Total revenue

 

92,071,466

 

81,007,237

 

62,459,242

 

47,133,076

 

144,606,933

 

Cost of sales

 

(47,652,679

)

(47,866,280

)

(33,153,669

)

(27,854,647

)

(76,880,950

)

Gross profit

 

44,418,787

 

33,140,957

 

29,305,573

 

19,278,429

 

67,725,983

 

% Gross profit

 

48

%

41

%

47

%

41

%

47

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

(17,769,209

)

(21,926,674

)

(10,640,232

)

(12,593,092

)

(35,056,323

)

Share of profit (loss) of JV

 

812,593

 

(72,238

)

732,437

 

(127,355

)

(1,251,970

)

Other income or expenses, net

 

(298,562

)

286,772

 

(400,173

)

343,650

 

28,055

 

Operating profit

 

27,163,609

 

11,428,817

 

18,997,605

 

6,901,632

 

31,445,745

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance result

 

(14,546,307

)

(13,192,795

)

(810,653

)

(7,752,674

)

(42,304,228

)

Profit / (Loss) before income tax

 

12,617,302

 

(1,763,978

)

18,186,952

 

(851,042

)

(10,858,483

)

 

 

 

 

 

 

 

 

 

 

 

 

Income tax

 

(5,050,749

)

5,856,052

 

(7,021,142

)

5,566,215

 

21,716

 

Profit / (Loss) for the period

 

7,566,553

 

4,092,074

 

11,165,810

 

4,715,173

 

(10,836,767

)

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income or (loss)

 

(2,511,723

)

(11,651,111

)

13,883,530

 

(7,494,623

)

(22,694,166

)

Total comprehensive income / (loss)

 

5,054,830

 

(7,559,037

)

25,049,340

 

(2,779,450

)

(33,530,933

)

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period attributable to:

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the parent

 

4,229,006

 

1,127,545

 

6,847,451

 

1,953,863

 

(7,938,072

)

Non-controlling interests

 

3,337,547

 

2,964,529

 

4,318,359

 

2,761,310

 

(2,898,695

)

 

 

7,566,553

 

4,092,074

 

11,165,810

 

4,715,173

 

(10,836,767

)

Total comprehensive income / (loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the parent

 

2,258,578

 

(6,184,443

)

16,505,763

 

(2,444,850

)

(25,484,051

)

Non-controlling interests

 

2,796,252

 

(1,374,594

)

8,543,577

 

(334,600

)

(8,046,882

)

 

 

5,054,830

 

(7,559,037

)

25,049,340

 

(2,779,450

)

(33,530,933

)

 

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Table 2: Adjusted EBITDA reconciliation

 

The table below provides a reconciliation of our loss for the period/year to Adjusted EBITDA.

 

Reconciliation of Adjusted
EBITDA:

 

Six-month
period ended

 

Six-month
period
ended

 

Three-month
period ended

 

Three-month
period ended

 

LTM period
ended

 

Profit / (Loss) for the period

 

7,566,553

 

4,092,074

 

11,165,810

 

4,715,173

 

(10,836,767

)

Income tax (benefit)/expense

 

5,050,749

 

(5,856,052

)

7,021,142

 

(5,566,215

)

(21,716

)

Finance results

 

14,546,307

 

13,192,795

 

810,653

 

7,752,674

 

42,304,228

 

Depreciation of property, plant and equipment

 

1,084,831

 

1,159,959

 

680,547

 

525,528

 

2,155,753

 

Amortization of intangible assets

 

992,292

 

1,135,677

 

574,421

 

558,644

 

1,998,091

 

Inventory purchase price allocation charge

 

 

2,257,378

 

 

1,138,223

 

 

Stock-based compensation charges

 

8,921

 

34,219

 

5,117

 

23,679

 

4,707

 

Adjusted EBITDA

 

29,249,653

 

16,016,050

 

20,257,690

 

9,147,706

 

35,604,296

 

 

Table 3: Segment information

 

The following tables present information with respect to the Group’s reporting segments:

 

Period ended December 31, 2018

 

Seed and
integrated
products

 

Crop
protection

 

Crop
nutrition

 

Combined

 

Revenues

 

 

 

 

 

 

 

 

 

Sale of goods

 

18,951,726

 

46,435,705

 

26,141,232

 

91,528,663

 

Royalties

 

518,933

 

 

 

 

 

518,933

 

Rendering of services

 

10,910

 

 

 

 

 

10,910

 

Government grants

 

 

 

 

 

 

 

 

 

Grants

 

12,960

 

 

 

 

 

12,960

 

Total revenue

 

19,494,529

 

46,435,705

 

26,141,232

 

92,071,466

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(6,285,219

)

(26,078,960

)

(15,288,500

)

(47,652,679

)

Gross margin per segment

 

13,209,310

 

20,356,745

 

10,852,732

 

44,418,787

 

 

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Period ended December 31, 2017

 

Seed and
integrated
products

 

Crop
protection

 

Crop
nutrition

 

Combined

 

Revenues

 

 

 

 

 

 

 

 

 

Sale of goods

 

17,309,050

 

45,702,056

 

17,733,705

 

80,744,811

 

Royalties

 

150,335

 

 

 

 

 

150,335

 

Rendering of services

 

83,424

 

 

 

 

 

83,424

 

Government grants

 

 

 

 

 

 

 

 

 

Grants

 

28,667

 

 

 

 

 

28,667

 

Total revenue

 

17,571,476

 

45,702,056

 

17,733,705

 

81,007,237

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(8,897,005

)

(30,573,546

)

(8,395,729

)

(47,866,280

)

Gross margin per segment

 

8,674,471

 

15,128,510

 

9,337,976

 

33,140,957

 

 

Comparison of segment information for the six-month period ended December 31, 2018 and 2017

 

As of July 1, 2018, the Group began to apply IAS 29 “Financial reporting in hyperinflationary economies” to its financial statements. As a result, results of operations for the six-month period ended December 31, 2018 have been adjusted for the application of such standard, while results of operations for the six-month period ended December 31, 2017 have not.

 

Revenue

 

The change in the translation mechanism from the application of IAS 29 had a positive impact of $2.8 million in the six-month period ended December 31, 2018; however, excluding such impact, sales increased by $7.5 million in crop nutrition revenues, by $1.4 million in seed and integrated products and decreased by $0.7 million in crop protection.

 

Revenue by business segment

 

Crop Protection. Revenue was $46.4 million for the six-month period ended December 31, 2018, compared to $45.7 million for the corresponding six-month period in 2017, primarily due to the change in translation mechanism that resulted from the application of IAS 29, which caused a $1.4 million increase, and an increase in other crop protection revenues of $0.5 million. This effect was partially offset by a decrease of revenues in insecticides and fungicides of $0.2 million and a decrease in adjuvants revenues of $0.9 million.

 

Seed and Integrated Products. Revenue for the six-month period ended December 31, 2018 was $19.5 million, compared to $17.6 million for the corresponding six-month period in 2017, primarily due to (i) the change in translation mechanism that resulted from the application of IAS 29, which caused a US$0.5 million increase in our reported revenue of seed and integrated products and (ii) an increase in sales of our seed and integrated products of US$1.4 million.

 

Crop Nutrition. Revenue for the six-month period ended December 31, 2018 was $26.1 million, compared to $17.7 million for the corresponding six-month period in 2017, primarily due to the change in translation mechanism that resulted from the application of IAS 29, which caused an increase of $0.9 million

 

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in reported accrued inoculants and fertilizers revenue, an increase of $6.8 million in revenues of fertilizers and an increase of $0.7 million in inoculants sales.

 

Cost of sales

 

The change in the translation mechanism from the application of IAS 29 resulted in an increase of $5.0 million in cost of sales for the six-month period ended December 31, 2018; however, excluding such impact, cost of sales decreased by $7.5 million in crop protection, by $3.4 million in seed and integrated products and increased by $5.7 million in crop nutrition. Cost of sales in the six-mount period ended December 2017 increased due to a non-recurring incremental cost related to Rizobacter’s Purchase Price Allocation (“PPA”) adjustments in inventories of $1.4 million in crop protection, $0.4 million in crop nutrition and $0.3 million in seed and integrated products.

 

Cost of sales by business segment

 

Crop Protection. Our reported cost of sales was $26.1 million for the six-month period ended December 31, 2018, compared to $30.6 million for the corresponding six-month period in 2017. The change in the translation mechanism from the application of IAS 29 resulted in an increase of $3.0 million in the six-month period ended December 31, 2018; however, excluding such impact, cost of sales decreased by $5.4 million in cost of sales of adjuvants and by $2.1 million in cost of sales of insecticides, fungicides and other crop protection products. Cost of sales in the six-mount period ended December 2017 increased due to non-recurring incremental cost related to PPA adjustments in inventories of $0.6 million in cost of sales of adjuvants and $0.8 million in cost of sales of insecticides, fungicides and other crop protection products.

 

Seed and Integrated Products. Our reported cost of sales was $6.3 million for the six-month period ended December 31, 2018, compared to $8.9 million for the corresponding six-month period in 2017. The change in the translation mechanism from the application of IAS 29 resulted in an increase of $0.8 million in the six-month period ended December 31, 2018; however, excluding such impact, cost of sales decreased by $3.4 million in cost of sales of seed and integrated products. Cost of sales in the six-mount period ended December 2017 increased due to a non-recurring incremental cost related to PPA adjustments in inventories of $0.3 million.

 

Crop Nutrition. Our reported cost of sales increased to $15.3 million for the six-month period ended December 31, 2018, from $8.4 million for the corresponding six-month period in 2017, primarily due to the change in translation mechanism that resulted from the application of IAS 29, which caused a $1.2 million increase in the reported amount. Such increase was also due to an increase of $4.6 million in cost of sales of fertilizers and $1.1 million in cost of inoculants. Cost of sales in the six-mount period ended December 2017 increased due to a non-recurring incremental cost related to PPA adjustments in inventories of $0.3 million in fertilizers and $0.1 million in inoculants.

 

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Table 4: Consolidated statement of financial position

 

 

 

12/31/2018

 

06/30/2018

 

ASSETS

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

 

4,251,154

 

2,215,103

 

Other financial assets

 

4,567,406

 

4,550,847

 

Trade receivables

 

82,120,771

 

52,888,427

 

Other receivables

 

5,084,534

 

4,240,205

 

Income and minimum presumed income taxes recoverable

 

61,834

 

2,082,269

 

Inventories

 

24,097,484

 

19,366,001

 

Total current assets

 

120,183,183

 

85,342,852

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

Other financial assets

 

346,575

 

243,358

 

Other receivables

 

1,409,634

 

4,979,507

 

Income and minimum presumed income taxes recoverable

 

570,231

 

126,653

 

Deferred tax assets

 

624,646

 

5,601,821

 

Investments in joint ventures and associates

 

27,144,578

 

19,072,055

 

Property, plant and equipment

 

42,703,375

 

40,177,146

 

Intangible assets

 

35,181,602

 

26,657,345

 

Goodwill

 

21,556,423

 

14,438,027

 

Total non-current assets

 

129,537,064

 

111,295,912

 

Total assets

 

249,720,247

 

196,638,764

 

 

 

 

12/31/2018

 

06/30/2018

 

LIABILITIES

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade and other payables

 

42,911,186

 

27,708,830

 

Borrowings

 

89,924,339

 

65,308,928

 

Employee benefits and social security

 

5,194,969

 

4,411,713

 

Deferred revenue and advances from customers

 

1,234,024

 

1,007,301

 

Income and minimum presumed income taxes payable

 

708,189

 

2,569

 

Government grants

 

4,754

 

17,695

 

Financed payment - Acquisition of business

 

19,338,121

 

20,223,590

 

Total current liabilities

 

159,315,582

 

118,680,626

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

Borrowings

 

18,026,397

 

25,708,205

 

Government grants

 

9,124

 

15,532

 

Investments in joint ventures and associates

 

2,048,254

 

2,012,298

 

Deferred tax liabilities

 

14,974,403

 

13,591,942

 

Provisions

 

502,199

 

845,486

 

Financed payment - Acquisition of business

 

 

2,651,019

 

Total non-current liabilities

 

35,560,377

 

44,824,482

 

Total liabilities

 

194,875,959

 

163,505,108

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

Equity attributable to owners of the parent

 

24,830,569

 

13,713,484

 

Non-controlling interests

 

30,013,719

 

19,420,172

 

Total equity

 

54,844,288

 

33,133,656

 

 

 

 

 

 

 

Total equity and liabilities

 

249,720,247

 

196,638,764

 

 

Contact:

Investor Relations

investor@biocerescrops.com

https://biocerescrops.com/investor-contact/

 

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