S&W Seed Company · OTC:SANW
S&W Seed — Investor Presentation (March 2024)
38 slides from S&W Seed's investor presentation, March 2024
Slide 1: S&W Seed Company
S&W Seed Company 1 S&W SEED COMPANY
Slide 2: Forward-Looking Statements
Forward- Looking Statements This presentation contains "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, and such forward-looking statements are made pursuant to the safe harbo
Slide 3: Well-positioned to be an industry leader in sorghum technologies
S&W Seed Company is well-positioned to be an industry leader in sorghum technologies. We also develop a variety of novel crops and cropping systems which contribute to animal forage, cover crops and renewable fuels. Core Crop Portfolio Diversified Middle Market Agricultural Platform Camelina Hybrid
Slide 4: Key Strategies & Takeaways
Key Strategies & Takeaways 1. Robust Sorghum Technology Portfolio bolstering S&W’s competitive position, focusing on increased farm success and returns on sorghum acres, and increasing Sorghum Seed Margins to approximately 60% • S&W’s 2022 commercial launch of a new, proprietary, high-value sorghum
Slide 5: Sorghum Technology
Sorghum Technology Well-Positioned to be an Industry Leader in Sorghum Trait Technology 5 S&W SEED COMPANY
Slide 6: Favorable Global Sorghum Market Dynamics
Favorable Global Sorghum Market Dynamics Important global crop that has potential to replace other large grain acres. • 5th Largest cereal crop globally used as a substitute for many grains on the market today. • Approximately 15.5 million acres globally, with expectations to increase due to S&W’s i
Slide 7: Return on Investment: Value of Growing Grain Sorghum
Value of Growing Grain Sorghum • As water resources become more strained, growers are looking for drought tolerant solutions • Sorghum consistently delivered an increased net revenue/acre compared to other crops Corn vs Sorghum ROI Corn vs Sorghum ROI Irrigated Acres Dryland Acres 1400 3 1000 3 900
Slide 8: S&W Sorghum Trait Technology Pipeline
S&W Sorghum Trait Technology Pipeline Expectations for next 10 years While few companies have launched value added technology in a sorghum seed crop, the S&W Seed Research Team has hit every trait-related deliverable set in our 2020 strategy outline. 8 S&W SEED COMPANY
Slide 9: Proprietary Sorghum Trait Technology Portfolio
Proprietary Sorghum Trait Technology Portfolio Novel and proprietary products driving value for farmers. • Double Team Grain Sorghum Commercial Launch in 2022 We believe Double Team Sorghum is the best over-the-top grass control trait on the market • Double Team Forage Sorghum Anticipated Commercial
Slide 10: Double Team Trait Delivers Increased Yields
Double Team Trait Delivers Increased Yields • Improved yields on fields with varying weed 2023 Trait Yield Performance pressure (bushels/acre) 120 • Double Team trait provides incremental value 102.5 98.5 over conventional hybrids 100 87.8 • Superior weed control from Double Team 80 provides peace o
Slide 11: Double Team Brand Comparison – Grower Survey
Double Team Brand Comparison – Grower Survey • Data reflects a strong market position for Double TeamTM Sorghum in terms of user Q: "How does Double Team Sorghum compare preference to other sorghum seeds?" (n = 41) • Respondents overwhelmingly perceive Double TeamTM Sorghum as superior to other sorg
Slide 12: Growers are Highly Satisfied with Double Team
Growers are Highly Satisfied with Double Team • Superior grass weed • 100% of growers who used control protects yields Double Team said they were under high weed satisfied with the grass weed pressure control • Double Team delivers a • 100% of growers who tried the positive return on Double Team sys
Slide 13: 2024 Brand & Acre Intentions vs. 2023
2024 Brand & Acre Intentions vs. 2023 • Growers do not appear to be making significant changes in 2024. Growers Total Acres % of Total 2024 # of Grower Acre 2023 # of 2024 Total 2023 Total 2024 % of 2023 % of % Difference Trait growers Difference Difference growers (n=) Acres Acres Total Acres Total
Slide 14: Proprietary Sorghum Trait Technology Portfolio
Proprietary Sorghum Trait Technology Portfolio Novel and proprietary products driving value for farmers. • Prussic-Free Sorghum Anticipated Commercial Launch in 2025 Prussic-Free Sorghum is designed to remove naturally toxic metabolite from stressed forage sorghum for safe, worry- free grazing and h
Slide 15: Double Team Commercialization Approach
Double Team Commercialization Approach Dual commercialization strategy to reach key global markets and drive adoption • Drive sales through our S&W-owned Sorghum Partners brand and/or other S&W brands. • Align with independent seed companies with current UNITED STATES market leading brands in key gr
Slide 16: Argentina Herbicide Tolerant Spray Trials
Argentina Herbicide Tolerant Spray Trials • Objective - Determine the effect of the herbicides Quizalofop 100 EC and Propaquizafop 100 EC (ADM.06350.H.1.A) on the growth of the sorghum crop and the response to the trait. • Partnering with ADAMA, Tobin /RAGT and NVS on herbicide treatments evaluating
Slide 17: Multiple Potential Growth Drivers
Multiple Potential Growth Drivers Company guidance of 77% to 115% trait technology revenue growth anticipated in FY 2024. • Continue to drive Double Team Grain Sorghum adoption through Sorghum Partners brand in U.S., as well as through licensing agreements. • Launch new trait technology products in
Slide 18: Sorghum Technology Overview
Sorghum Technology Overview Fast growing, higher-margin proprietary business with differentiated technology in a historically under innovated crop. U.S. Sorghum Revenue U.S. Double Team FY Ends June 30 Expected Market Share Growth $25 ($ in Millions) (internal estimate) 30% $20 25% $11.5-$14 20% $15
Slide 19: Alfalfa / Forage
Alfalfa / Forage ONE OF THE LARGEST ALFALFA COMPANIES IN THE WORLD 19 S&W SEED COMPANY
Slide 20: International Alfalfa / Forage
International Alfalfa / Forage S&W has strong customer base and market share. • Proprietary alfalfa seed and pasture products $70 International Forage Revenue addressing non-U.S. global markets FY Ends June 30 ($ in Millions) • Alfalfa, Medic, Sub Clovers, Annual Clovers, Vetch, Forage $60 Cereals,
Slide 21: U.S. Alfalfa/Forage
U.S. Alfalfa/Forage Unique germplasm facing unclear domestic environment, with future margin improvement opportunities. U.S. Forage Revenue • Long dormant alfalfa history $16 FY Ends June 30 ($ in Millions) • Germplasm base purchased from Pioneer® $14 consisting of thousands of unique breeding paren
Slide 22: Biofuels
Biofuels Partnership with Shell Oil 22 S&W SEED COMPANY
Slide 23: Camelina/Biofuels Joint Venture
Camelina/ Biofuels Joint Venture Partnership with Shell (NYSE: SHEL) Worldwide JV (named Vision Bioenergy Oilseeds LLC) (VBO) with Shell plc for the purpose of developing novel plant genetics, increasing oil seed cover crop acres and managing the crushing of these new acres $20M S&W received $13 mil
Slide 24: VISION Bioenergy Oilseeds
VISION Bioenergy Oilseeds Growing the Future of Energy Empowering Farmers in the Biofuel Market Who: Agriculture industry experts Mission: Produce feedstock for ultra-low carbon biofuel What: Contract with producers to grow Camelina to be refined into: 1. Oilseed Crop – Ideal feedstock for biofuel 2
Slide 25: A Fully Integrated Company: Upstream Business Model
A Fully Integrated Company: Upstream Business Model Genetics & Seed Seed Processing, Plant Breeding Production Packing and Shipping Biotech Lab in TX, R&D Station in ID Contracts in Pacific Northwest State-of-the-Art Facility in Nampa ID 25 S&W SEED COMPANY
Slide 26: A Fully Integrated Company: Downstream Business Model
A Fully Integrated Company: Downstream Business Model Contract Acres Expert Agronomic Support Grain Aggregation & Shipping Shell Purchases Grain Renewable Diesel Sustainable Aviation Fuel Crush Facilities Camelina Oil Meal: High-Protein Animal Feed 26 S&W SEED COMPANY
Slide 27: Financial Results
Financial Results 27 S&W SEED COMPANY
Slide 28: Revenue
Revenue FY ENDS JUNE Annual Year-to-Date (Unaudited) $90 ($ in Millions) $35 ($ in Millions) $32.8 $76-$82 $80 $14.2 $30 $27.3 $70 $19.7 $25 $60 $50 $20 $40 $15 $71.4 $73.5 $69.8 $30 $59.9 $10 $20 $5 $10 $0 $0 2020 2021 2022 2023 2024 Guidance YTD Q223 YTD Q224 Core Revenue Pioneer Seed Revenue 28 S
Slide 29: GAAP Gross Margins
GAAP Gross Margins FY ENDS JUNE Annual Year-to-Date (Unaudited) 35% 35.0% 30.4% 30% 30.0% 24-26% 25% 25.0% 22.1% 20% 19.8% 18.8% 20.0% 16.3% 15% 15.0% 10% 8.9% 10.0% 5% 5.0% 0% 0.0% 2020 2021 2022 2023 2024 Guidance YTD Q223 YTD Q224 29 S&W SEED COMPANY
Slide 30: Adjusted Operating Expenses
Adjusted Operating Expenses* FY ENDS JUNE Annual Year-to-Date (Unaudited) $35 ($ in Millions) $16 ($ in Millions) $14.1 $30 $14 $13.4 $12 $25 $10 $20 $8 $32.0 $15 $30.4 $27.9 $26.4 $26.4 $6 $10 $4 $5 $2 $0 $0 2020 2021 2022 2023 2024 Guidance YTD Q223 YTD Q224 *Adjusted operating expenses is GAAP op
Slide 31: Adjusted EBITDA
Adjusted EBITDA* FY ENDS JUNE Annual Year-to-Date (Unaudited) $5 ($ in Millions) $5.0 ($ in Millions) $0 $3.0 ($5) $1.0 $(4)-$(7.5) ($10) ($9.3) ($9.7) ($1.0) ($13.1) ($15) ($3.0) ($20) ($23.6) ($5.0) ($4.6) ($25) ($6.2) ($30) ($7.0) 2020 2021 2022 2023 2024 Guidance YTD Q223 YTD Q224 *See Appendix
Slide 32: Selected Balance Sheet
Selected Balance Sheet ($ in Millions) 6/30/20 6/30/21 6/30/22 6/30/23 12/31/23* Shell Joint Venture Cash and cash equivalents $4.1 $3.5 $2.1 $3.4 $1.1 • $6 million paid to S&W in February 2024 Accounts receivable, net $19.0 $19.4 $19.1 $24.6 $20.0 Notes receivable - - - $6.8 $7.0 Wheat Joint Ventur
Slide 33: Our Leadership Team
Our Leadership Team Management Mark Herrmann Vanessa Baughman Cameron Henley Dennis Jury Brent Johnson CEO CFO Managing Director, SVP, Int’l Production & VP Sales and Marketing, International Supply Chain Americas Directors Board of Alan Willits, Chairman Mark Wong Mark Harvey Alexander Matina Betsy
Slide 34: S&W Seed Company
S&W Seed Company 34 S&W SEED COMPANY
Slide 35: Appendix
Appendix S&W SEED COMPANY (NASDAQ: SANW)
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures In addition to financial measures included in this presentation that are calculated in accordance with accounting principles generally accepted in the United States of America ("GAAP"), the Company has provided the following non-GAAP financial
Slide 37: Non-GAAP Adjusted EBITDA
Non-GAAP Adjusted EBITDA YTD YTD 2020 2021 2022 2023 Q2 2023* Q2 2024* Net income (loss) attributed to S&W Seed Company (19,674,324) (19,170,967) (36,395,350) 14,410,078 (10,494,946) (12,418,481) Non-recurring transaction costs 792,993 20,000 138,489 1,240,274 262,618 323,499 Other finance expenses
Slide 38: Non-GAAP Operating Expenses
Non-GAAP Operating Expenses YTD YTD 2020 2021 2022 2023 Q2 2023* Q2 2024* Operating Expenses 33,698,011 33,946,158 39,158,929 32,481,603 16,903,249 15,804,014 Less: Depreciation and Amortization (5,036,464) (5,469,581) (5,460,321) (4,768,809) (2,590,338) (2,145,042) Non-recurring transaction costs (
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