Adecoagro S.a. · NYSE:AGRO
Adecoagro — Q4 2014 Earnings Presentation
24 slides from Adecoagro's earnings presentation, Mar 20, 2015
Slide 1: 4th Quarter 2014 Earnings Webcast
4th Quarter 2014 Earnings Webcast March 20, 2015
Slide 2: Disclaimer
DISCLAIMER 4Q14 … This press release contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “forecast”, “believe,” “
Slide 3: Sugar, Ethanol & Energy Business
Sugar, Ethanol & Energy Business 3
Slide 4: Sugarcane Crushing
Sugar, Ethanol & Energy Business– Sugarcane Crushing 4Q14 Our mills crushed a total of 7.2 million tons of sugarcane in 2014, 31% over 2013 Sugarcane crushing 4Q14 Sugarcane crushing 2014 (millions) (millions) +12% 2.3 7.2 31% 6.4 1.8 4Q13 4Q14 2013 2014 4
Slide 5: Rainfalls and Operational Metrics
Sugar, Ethanol & Energy Business– Rainfalls 4Q14 Enhanced harvest and milling efficiencies at our mills allowed us to increase daily milling by 8.7% Mato Grosso do Sul Rainfall 2014 (1) 250 200 Rains (mm) 150 100 50 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Mato Grosso 2014 Rains 17 Year Ave
Slide 6: Sugarcane Planting
Sugar, Ethanol & Energy Business– Sugarcane Planting 4Q14 Sugarcane planting is a key strategy to supply our mills with quality raw material at low cost Sugarcane Plantation Size Sugarcane Planting (hectares) (hectares) 36,267 +25% 124,412 99,409 25,764 23,391 13,616 2013 2014 2011 2012 2013 2014 6
Slide 7: Agricultural Productivity
Sugar, Ethanol & Energy Business– Agricultural Productivity 4Q14 Enhanced sugarcane management resulted in higher agricultural productivity indicators Sugarcane yields TRS content TRS per hectare (tons/ha) (kg/ton) (kg/ha) +13 +3 +16 80.8 10,543 71.8 130.5 126.5 9,085 2013 2014 2013 2014 2013 2014 7
Slide 8: Sugar
Sugar, Ethanol & Energy Business– Sugar 4Q14 Despite the fall in sugar prices, sugar net sales grew 31%, driven by a 45% increase in volumes sold Sugar Production Sugar Net Sales (thousand tons) ($ million) 408 359 Average 173.8 Realized 413.7 Price +31% +23% 132.5 US$/ton 335.6 2013 2014 2013 2014
Slide 9: Ethanol
Sugar, Ethanol & Energy Business– Ethanol 4Q14 We have implemented an ethanol carry strategy, which should allow us to capture higher prices in the off-season Ethanol Production Ethanol Net Sales (thousand m3) ($ million) 557 495 146.2 135.6 +8% 12% 299.8 Average Realized 268.1 Price US$/m3 2013 201
Slide 10: Energy
Sugar, Ethanol & Energy Business– Energy 4Q14 Energy is a key driver of our business and a very important component of our cash generation Cogen Efficiency Ratio Energy Cash Margins (Exported Energy per ton crushed (KWh/ton) ($ million) 61.6 +32% Cogeneration 2014 % 46.8 Sales 58,715 100% Cash Cost
Slide 11: Energy: cogeneration and spot prices
Sugar, Ethanol & Energy Business– Energy 4Q14 High cogen productivity coupled with high spot energy prices boosted net sales by 116% Cogen Export Volumes Percentage of Water Stored in SouthEast Reservoirs (thousand MWh) 2010 2011 2012 2013 2014 100 442.7 +34% 80 330.0 60 % 40 20 (1) 2013 2014 0 (1)
Slide 12: Sugar, Ethanol & Energy Financial Performance
Sugar, Ethanol & Energy Business– Financial Performance 4Q14 Adjusted EBITDA in 4Q14 reached a record high of $59.4 million, driving Adj. EBITDA in 2014 to $153.5 million with a 41% Adj. EBITDA margin Net Sales 4Q14 Adjusted EBITDA & EBITDA Margin 4Q14 ($ millions) ($ millions) 42% 142 Adjusted 59.4
Slide 13: Construction Update
Sugar, Ethanol & Energy Business– Construction Update 4Q14 Construction of Ivinhema mill was essentially completed on schedule and on budget Highlights CONSTRUCTION UPDATE Ivinhema phase II has been completed on schedule and oni budget, expanding milling capacity by 3.0 million tons per year. Cons
Slide 14: Farming Business
Farming Business 12
Slide 15: Planted Area & Production Evolution
Farming Business – Planted Area & Production Evolution 4Q14 Higher yields in 2013/14 resulted in a 21% growth in production. 2014/15 planted area has grown by 3% Farming Production Evolution (Crops & Rice) 848.8 (thousand tons) 738.8 699.2 666.6 618.8 +21% 434.5 454.6 415.0 257.9 214.6 139.5 92.7 20
Slide 16: Farming Business Financial Performance
Farming Business – Financial Performance 4Q14 Adjusted EBIT in 2014 was in line with 2013 driven by higher yields and lower production costs 4Q13 Farming Adjusted EBIT 4Q14 ($ millions) 4Q14 (45%) 15.2 7.6 4.9 2.7 1.5 0.0 (0.4) (3.1) (14.7) (16.7) Crops Rice Dairy Others Farming Consolidated 2013 Fa
Slide 17: Farming Commodity Hedge Position
Farming Business – Commodity Hedge Position 4Q14 Soy and corn positions generated a $16.6 million gain in 3Q14. However, during 4Q14 the rebound in commodity prices generated a $11.0 million loss, resulting in a $0.4 million gain in 2014 Soybean Futures Contract May 2015 Soybean Hedge: US cents/bush
Slide 18: 2014/15 Crop Status
Farming Business – 2014/15 Crop Status 4Q14 Good humidity conditions during crop flowering have enhanced crop growth and development 2013/14 vs 2014/15 vs 20 year Historical Average Monthly Rainfall Evolution in Argentina’s Humid Pampas (1) Crop Flowering Wheat Early Corn Soy Late Corn 200 180 160 1
Slide 19: Financial Performance
Financial Performance 16
Slide 20: Consolidated Financial Performance
Financial Performance - Consolidated Financial Performance 4Q14 Financial Performance will continue increasing year by year as we improve efficiencies in each one of our businesses and become the lowest cost producers Area & Production 2010 2011 2012 2013 2014 Chg% Farming Planted Area (ha) (1) 183,
Slide 21: CAPEX Evolution
Financial Performance – CAPEX Evolution 4Q14 Consolidated capex spending is expected to slow down in 2015 as we complete the Ivinhema mill in Mato Grosso do Sul 2010-2016 CAPEX Evolution Sugar, Ethanol & Energy Farming & Land Transformation 325 326 +38% 237 192 177 295 180 316 155 105 227 160 90 80
Slide 22: Net Debt
Financial Performance - Net Debt 4Q14 Net debt stands at $585 million as of December 31, 2014 4Q14 Net debt 4Q14 Debt Term Structure ($ millions) 698.5 S&E 584.7 Farming 30% Short term 611.4 Long Term 70% 113.8 87.1 Debt Cash Net debt 4Q14 Debt Currency Structure Total debt as of December 31, 2014,
Slide 23: FX Impacts
Financial Performance – FX Impacts 4Q14 Currency devaluation have a positive impact on our cash position BRL Spot Sugar, Ethanol & Energy in Brazil Costs: 100% BRL Revenues: • Sugar: USD (80% production hedged; no FX hedge) • Ethanol & Energy: BRL Impact on EBITDA: Neutral Impact on Cash Flow: Posit
Slide 24: Thank you!
Thank you! Investor Relations Charlie Boero Hughes - CFO Hernan Walker - IR Manager ir.adecoagro.com Email: chboero@adecoagro.com Email: hwalker@adecoagro.com TEL: +5411 4836 8804 TEL: +5411 4836 8651