Bioceres Crop Solutions Corp. Q4 FY2025 earnings call

• Challenges in fiscal '25 stemmed from macro shifts in Argentina, client behavior changes, adverse on-farm economics, and sector financial conditions.
• In Q4, revenues were impacted by a winding down of the seed business, weaker demand for crop inputs in Argentina, but strong international sales of core technologies. Full-year revenues declined across all segments.
• Financial strategy focuses on cash generation, targeting working capital of 5-6 months of sales, 10-12% operating expense savings, and reduced CapEx/R&D to 2.5-3% of sales.
• Scaling biological initiatives, including Rinotec in U.S. and Brazil, and transitioning the seed business to a royalty-based model for better scalability and profitability.

In the fourth quarter, revenues were $74.7 million, a 40% decline year-over-year. The decline was due to a $25 million decrease in seed segment sales (accounting for ~50% of the quarter-over-quarter decline) and equal contributions from Crop Protection and Crop Nutrition segments. For the full fiscal year, revenues totaled $335.3 million, down 28% year-over-year. Crop Protection had revenues of $181.9 million (down 20%), Crop Nutrition $89.5 million (down 37%), and Seed & Integrated Products $63.9 million (down 34%). Gross profit in Q4 was $25.4 million, a 47% decline year-over-year, with Crop Nutrition and Seed segments driving most of the decline. Full-year gross profit was $131.7 million, a 29% decline.

• Target working capital of 5-6 months of sales.
• Aim for operating expense savings of around 10-12%, averaging $3-3.5 million per quarter.
• Reduce CapEx and R&D investments to 2.5-3% of sales for fiscal '26 and '27.
• Expect improved EBITDA margins and progress towards a robust balance sheet with growth in biological initiatives and scaled products.

• Macro shifts in Argentina leading to reduced client inventory prepurchasing and spending on ag inputs.
• Adverse on-farm economics affecting ag input spending.
• Deteriorating sector financial conditions.
• Challenges in the seed business transition and alignment with Syngenta agreement dynamics.

Q: What metrics should be focused on in the next 6-9 months?

A: Cash generation, working capital below 5 months of sales, moderate top line growth, and expanding profitability at EBITDA and gross margin levels.

Q: About the Syngenta agreement, what was the gross profit from it in fiscal '25?

A: For fiscal '25, there was about $18 million gross profit from the Syngenta profit sharing, with the upfront payment from prior years not recurring.

Q: Thoughts on the changing role of the Chief Commercial Officer?

A: Still discussing with the Board whether to integrate operations more fully or keep it strictly commercial; departure of current CCO led to reevaluation of the position's structure.