Bioceres Crop Solutions Corp. — Form 6-K Summary
Business context and reporting period
Filed September 8, 2022, this Form 6-K reports fourth-quarter and full-year fiscal 2022 results for the periods ended June 30, 2022. Results are presented in U.S. dollars under IFRS. Bioceres provides crop productivity technologies across crop protection, seed and integrated products, and crop nutrition, including its HB4 technology platform.
The reported metrics include the impact of IAS 29 inflation accounting for Argentine operations. “Comparable” metrics exclude that impact and are used by management for period-over-period operating comparisons. ProFarm Group, formerly Marrone Bio Innovations, was acquired after fiscal year-end and is not included in the FY22 comparable revenue figures; consolidation was expected to begin in fiscal first quarter 2023.
Key financial metrics
| Metric | 4Q21 | 4Q22 | FY21 | FY22 |
|---|---|---|---|---|
| Comparable revenue | $72.4 million | $104.1 million | $197.4 million | $319.3 million |
| Reported revenue | $82.2 million | $105.7 million | $209.5 million | $334.8 million |
| Comparable gross profit | $31.4 million | $41.4 million | $94.2 million | $136.9 million |
| Comparable gross margin | 43.4% | 39.8% | 47.7% | 42.9% |
| Reported gross profit | $32.7 million | $36.5 million | $90.9 million | $126.5 million |
| Reported gross margin | 39.7% | 34.5% | 43.4% | 37.8% |
| Adjusted EBITDA | $16.6 million | $14.6 million | $48.3 million | $51.5 million |
| Baseline business adjusted EBITDA | $17.4 million | $17.7 million | $49.9 million | $61.9 million |
| Net loss | $1.4 million profit | $4.7 million loss | $3.8 million loss | $4.1 million loss |
| Net finance result | $3.3 million expense | $5.9 million expense | $21.2 million expense | $21.8 million expense |
Revenue and profitability by segment
- FY22 comparable crop protection revenue increased 55% to $166.4 million.
- FY22 comparable seed and integrated products revenue increased 58% to $48.9 million.
- FY22 comparable crop nutrition revenue increased 77% to $103.9 million.
- HB4 Wheat generated $12.4 million of initial revenue in FY22, representing a 94% increase versus the prior-year contributed-goods comparison.
- FY22 comparable gross profit increased 45%, while comparable gross margin declined 484 basis points, primarily due to product mix and higher costs in Argentine subsidiaries.
- Baseline business adjusted EBITDA, excluding HB4 pre-launch costs, increased 24% to $61.9 million. Management stated that IAS 29 accounting understated this measure by an estimated $17.7 million.
Cash, debt and liquidity
- Cash and cash equivalents were $33.4 million at June 30, 2022, versus $36.0 million a year earlier.
- Other short-term investments were $4.7 million, compared with $11.2 million at June 30, 2021; total cash and short-term investments were $38.1 million versus $47.2 million.
- Total financial debt was $165.3 million at June 30, 2022, compared with $173.4 million a year earlier. Reported net debt was $127.3 million versus $126.2 million.
- Net debt to reported last-twelve-month adjusted EBITDA improved to 2.47x from 2.61x.
- Current borrowings were $78.6 million and non-current borrowings were $74.2 million at June 30, 2022. The balance sheet also included $12.6 million of non-current convertible notes.
- The filing does not provide a clear consolidated operating, investing, or financing cash flow figure in the supplied text.
Material changes versus prior comparable periods
- Comparable 4Q22 revenue rose 44% and FY22 revenue rose 62%, reaching company records.
- Reported FY22 net loss increased to $4.1 million from $3.8 million, despite higher revenue and operating profit, while the company continued to incur significant income tax and finance costs.
- FY22 SG&A increased 63% to $77.5 million, reflecting operational growth, HB4 commercialization expenses, IAS 29 accounting, and Argentine macroeconomic pressures.
- HB4 pre-launch costs increased to $3.2 million in 4Q22 and $10.3 million for FY22, compared with $0.8 million and $1.6 million, respectively, in the prior periods.
- FY22 reported operating profit increased to $39.9 million from $38.4 million, while reported gross margin declined to 37.8% from 43.4%.
- Equity attributable to the parent increased to $127.2 million from $67.7 million, and total equity increased to $158.9 million from $90.3 million.
Guidance, outlook, commentary and risks
- Management described FY23 and beyond as offering significant growth opportunities from the ProFarm merger, broader geographic reach, portfolio diversification, and HB4 commercialization.
- The merger with Marrone Bio Innovations closed on July 12, 2022. Integration was underway, and management expected the transaction to expand biological products, commercial capabilities, and U.S. and European revenue sources.
- HB4 Soy harvesting was completed in Argentina. Two varieties were being advanced for commercial launch, and two varieties were targeted for a Brazil launch in the 2023/24 season.
- Regulatory milestones included China’s approval of HB4 Soy, a favorable U.S. FDA conclusion on HB4 Wheat safety, and additional HB4 Wheat feed and food clearances in Brazil, Colombia, Australia, New Zealand, and Nigeria.
- Management cited supply-chain disruptions, logistics and manufacturing costs, dry weather in South America, local inflation exceeding Argentine peso depreciation, product-mix pressure, and broader macroeconomic conditions as material operating headwinds.
- After fiscal year-end, the company issued $55 million of new secured convertible notes due in 2026. It also repurchased the remaining 25% of the 2019 convertible notes through new secured notes due in 2026.
- The filing contains customary forward-looking statement risks, including regulatory and market acceptance of HB4 products, integration execution, COVID-19 effects, supply-chain and inventory risks, liquidity, macroeconomic conditions, and actual results differing materially from management expectations.
Investor verification checklist
- Reconcile reported IFRS results with comparable, ex-IAS 29 metrics and assess the effect of Argentine inflation accounting on margins and EBITDA.
- Confirm the terms, collateral, maturity, conversion features, and proceeds of the post-year-end 2026 secured note financings.
- Review ProFarm’s subsequent contribution to revenue, EBITDA, cash flow, leverage, and integration costs.
- Track HB4 regulatory approvals, commercial acreage, customer adoption, product revenue, and remaining pre-launch or commercialization spending.
- Assess working-capital requirements, particularly the increase in inventories to $126.1 million and trade receivables to $111.3 million at June 30, 2022.
- Verify consolidated cash flow generation and debt-servicing capacity, as the supplied filing text does not present a clear cash flow statement.