Verde Agritech Ltd · TSX:NPK
Verde Agritech — FY2022 Earnings Presentation
63 slides from Verde Agritech's earnings presentation, 2023
Slide 1: Q4 & FY 2022 Update
Q4 & FY 2022 Update 1
Slide 2: Disclaimer
DISCLAIMER If you are risk averse don’t buy our stock. Don’t rely on anything on this We are not good enough for you to invest if you: presentation. This presentation contains certain forward-looking information, which includes but is not limited to, statements with respect to Verde AgriTech Ltd’s (
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Buy Super Greensand® at Amazon: 5% OFF coupon (USA): Q420225OFF Canada: Sold Out The discount codes are valid through April 30, 2022 The codes are limited to a single unit per order and to a single order. 3 VERDE AGRITECH
Slide 4: Summary
Summary 2022 Market Overview 05 Production Costs 16 Potash demand in Brazil 06 Key Metrics Yearly 17 Total area cultivated in Brazil x fertilizer demand 07 Sales, General and Administrative Expenses 21 Year-end stocks of fertilizers in Brazil 08 Other Highlights 22 Commodities prices in Brazil 09 20
Slide 5: 2022 Market Overview
2022 Market Overview 2 Brazilian KCl imports ('000 tonnes) 1 KCl CFR Brasil average spot price (US$) 1600 1400 1400 1200 1200 1000 1000 800 800 600 600 400 400 200 200 0 0 2021 2022 2023 2021 2022 2023 February 2022: Russo-Ukrainian war onset. March-July 2022: 154% surge in the average price of pota
Slide 6: Potash demand in Brazil
Potash demand in Brazil In 2022, Brazil's 30-year trend of increasing potash consumption was disrupted. A 15% decrease in KCl consumption YoY led to a reduction of 10% in KCl imports and a 13% decrease in Brazilian KCl production. 2, 3 1 K2O consumption in Brazil per year (million tonnes) KCl produc
Slide 7: Total area cultivated in Brazil x fertilizer demand
Total area cultivated in Brazil x fertilizer demand Despite the increase in cultivated area, Brazilian overall fertilizer consumption also decreased in 2022. Area (million hectares) Fertilizer demand (million tonnes) Source: COGO Agribusiness Intelligence. CORPORATE PRESENTATION - TSX: NPK | OTCMKTS
Slide 8: Year-end stocks of fertilizers in Brazil
Year-end stocks of fertilizers in Brazil The YoY increase in the remaining stocks of KCl and overall fertilizers in Brazil by 23% and 16%, respectively, demonstrates a lower demand for these products over the year. Year-end stock in Brazil ('000 tonnes) 2,148 KCl 1,740 8,441 Fertilizers 7,274 - 1,00
Slide 9: Commodities prices in Brazil
Commodities prices in Brazil Soybeans (Paranaguá) and Arabica coffee prices dropped by 13% and 24% from January 03, 2022, to March 29, 2023, respectively. 1 2 Soybeans price - Paranaguá (R$) KCl CFR Brasil average spot price (US$) 210 1200 200 1000 190 800 180 600 170 400 160 200 150 0 Source: 1 - C
Slide 10: Agrometeorological monitoring
Agrometeorological monitoring The Brazilian coffee sector experienced significant challenges in 2022 due to adverse climate conditions, following on two years of frost and drought. One of the main causes of the Temperatures were below scarcity of rain in the south average in the northwest of the reg
Slide 11: Coffee biennial cycles
Coffee biennial cycles Coffee productivity in Brazil in years of positive Yearly coffee productivity report (sc/ha) and negative biennial cycle. 33.48 33.27 34 32 30 27.2 27.7 28 26.4 26 24.96 24 22.6 21.6 22 20 2019 (-) 2020 (+) 2021 (-) 2022 (+) Minas Gerais state Brazilian average productivity Th
Slide 12: Coffee sector impacts
Coffee sector impacts Percentage of sales made to the coffee sector in Q4 Number of customers from Percentage of customers’ purchase Year 25% the coffee sector in Q4 potential supplied by Verde 25% 2020 113 33% 2021 98 29% 20% 2022 49 63% 15% The rise in the percentage of Q4 clients’ total purchase
Slide 13: Q4 & FY 2021 Highlights
Q4 & FY 2021 Highlights Cash Cash utilised from investing activities increased by 1,527% in Q4 2022, to $12,6M and 1,547% in FY 2022 to $42.0M. Trade and other receivables increased by 90% in 2022, to $28,5M. Total loans for CAPEX and working capital in December 31: $38.1M. Capital expenditures incr
Slide 14: Q4 & FY 2022 Financial Statements
Q4 & FY 2022 Financial Statements All amounts in CAD $’000 Q4 2022 Q4 2021 %Δ FY 2022 FY 2021 %Δ Revenue 16,837 10,851 55% 80,271 27,709 190% Production costs (3,975) (2,691) 47% (18,022) (7,131) 153% Gross Profit 12,870 8,160 58% 62,249 20,578 203% Gross Margin 76% 75% N/A 78% 74% N/A Sales and pro
Slide 15: Operational Summary
Operational Summary All amounts in CAD $’000 Q4 2022 Q4 2021 %Δ FY 2022 FY 2021 %Δ Tonnes sold ‘000 125 134 (7%) 628 400 57% Average revenue per tonne sold $ 135 81 67% 128 69 86% Average production cost per tonne sold $ (32) (20) 58% (29) (18) 61% Average Gross Profit per tonne sold $ 103 61 69% 99
Slide 16: Production costs
Production costs The table below shows a breakdown of Verde’s production costs for BAKS® and K Forte®, and what percentage of those costs is not controllable by management: (+) (+) (=) Projected cost per tonne of Total cost expected Non-controllable costs Cash cost Assets depreciation product for 20
Slide 17: Key Metrics Yearly
Key Metrics Yearly 10,000,000 2 23,000,000 2 50,000,000 2 Sales (Tonnes) 1,400,000 1 1,200,000 1,200,000 1,000,000 1 800,000 800,000 628,000 600,000 400,133 400,000 243,707 200,000 119,809 29,648 - 2018 2019 2020 2021 2022 2023 PFS 10Mtpy PFS 23Mtpy PFS 50Mtpy 1 – Targeted range sales volume and rev
Slide 18: Key Metrics Yearly
Key Metrics Yearly 1,117,098 2 2,503,850 2 5,005,060 2 Revenue (‘000 CAD) 1 120,000 115,332 100,000 80,271 80,000 1 78,135 60,000 40,000 27,710 20,000 9,167 6,029 1,358 - 2018 2019 2020 2021 2022 2023 PFS 10Mtpy PFS 23Mtpy PFS 50Mtpy 1 – Targeted range sales volume and revenue based on FY 2023 guida
Slide 19: Key Metrics Yearly
Key Metrics Yearly 2 2 564,894 2 1,222,722 2,241,729 EBTIDA (‘000 CAD) 33,500 28,500 1 24,565 23,912 23,500 18,500 13,500 1 9,341 8,500 6,450 3,500 1,591 (1,444) 25 (1,500) 2018 2019 2020 2021 2022 2023 PFS 10Mtpy PFS 23Mtpy PFS 50Mtpy 1 - Targeted EBTIDA and EPS based on FY 2023 guidance. Average c
Slide 20: Key Metrics Yearly
Key Metrics Yearly 6.14 2 13.24 2 23.57 2 Earning / loss per share (CAD)(3) 0.45 0.35 0.34 1 0.29 0.25 0.15 0.07 0.05 1 0.04 (0.04) (0.02) 0.01 (0.05) 2018 2019 2020 2021 2022 2023 PFS 10Mtpy PFS 23Mtpy PFS 50Mtpy 1 - Targeted EBTIDA and EPS based on FY 2023 guidance. 2 - Distinct production scenari
Slide 21: Sales, General and Administrative Expenses
Sales, General and Administrative Expenses All amounts in CAD $’000, except Q4 2022 Q4 2021 %Δ FY 2022 FY 2021 %Δ percentages Sales Expenses Sales and marketing expenses (533) (578) (8%) (3,451) (1,818) 90% Fees paid to sales agents (196) (203) (3%) (1,172) (464) 153% Product delivery freight expens
Slide 22: Other Highlights
Other Highlights FOB vs CIF (tonnes) 700,000 628,114 Sales (tonnes) FY 2022 FY 2021 %Δ 600,000 FOB 183,483 192,608 (5%) 500,000 444,631 400,133 CIF 444,631 207,525 114% 400,000 Total 628,114 400,133 57% 300,000 183,483 192,608 207,525 200,000 The Company has significantly increased the volume sold 1
Slide 23: 2023 Taxation – Actual Profits
2023 Taxation – “Actual Profits” Prior to December 31, 2022, the Brazilian subsidiary was subject to the 'Assumed Profits' taxation method. However, starting January 2023, the subsidiary is now subject to income taxes using the 'Actual Profits' method ('Lucro Real') based on taxable income. Under th
Slide 24: Loans
Loans Company Loans Profile 50000 45000 $’000 2022 2023 2024 2025 2026 40000 35000 *Total Loans 30000 (end of the period) 38,112 31,053 12,489 4,3383 1,936 25000 • Amortization 20000 (during the period) 21,608 16,461 5,601 2,083 15000 10000 5000 0 Loan Payments (included Interest) Loans remaninig at
Slide 25: 2023 Guidance
2023 Guidance As previously described, potash trends did not meet the market's expectations after the Ukraine war, reflecting in decreasing fertilizer prices and lower demand throughout 2022. The price of potash has been on a downward trend since late 2022, with a decrease of 47% in 2022 average KCl
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Slide 27: Verde has 1.3Bn tons of Proven and Probable Reserves
Verde has 1.3Bn tons of Proven and Probable Reserves Mineral Reserves – Proven and Probable(1) Summary Mineral Resource Estimate Tonnes Tonnes K2O Grade (Mt) (Mt of KCl Equivalent) (%) • The Cerrado Verde Project mineral Proven 81 13 9.96% resource estimate is based on 435 Probable 1,217 185 9.14% h
Slide 28: Company Investments ($'000)
Company Investments ($’000) The Company invested over $111 million since its foundation. The investments were mainly in research 41,623 111,238 and development, landing, construction of Plant 1 and Plant 2, equipment, and access improvement. Company Investments ($’000) 35,000 30,000 25,000 20,000 15
Slide 29: Pre-Feasibility Study Snapshot
Pre-Feasibility Study Snapshot Pre-Feasibility Study production scenario for 50Mtpy of The production scenario for 50Mtpy of Verde’s product, Verde’s product, composed of K2O + S + Micronutrients composed of K2O + S + Micronutrients predicts a Net Present Value per share of up to C$332.08.* Proven a
Slide 30: Sales (Tonnes)
30 2 2 10,000,000 23,000,000 50,000,000 2 Sales (Tonnes) 1,400,000 1 1,200,000 1,200,000 1,000,000 1 800,000 800,000 628,000 600,000 400,133 400,000 243,707 200,000 119,809 29,648 - 2018 2019 2020 2021 2022 2023 PFS 10Mtpy PFS 23Mtpy PFS 50Mtpy 1 – Targeted range sales volume and revenue based on FY
Slide 31: Outstanding Operational Facilities Already in Place
Outstanding Operational Facilities Already in Place Existing production capacity(1) of 3.0mtpy (0.5 mtpy KCl equivalent) Verde AgriTech’s Operational Mine Plant Infrastructure Mine Overview Notes: 1. Effective installed capacity, assuming 83% maximum utilization on nameplate capacity VERDE AGRITECH
Slide 32: Mining Pit and Processing Plants Fully Operational, including Brand New Plant 2
Mining Pit and Processing Plants Fully Operational, including Brand New Plant 2 Mine Pit 1 Processing Plant 1 Mine Pit 2 Processing Plant 2 VERDE AGRITECH 32
Slide 33: Beyond the K – Verde's Proprietary Technologies
3 Beyond the K – Verde’s Proprietary Technologies Technology-Enabled Products Providing Best Solutions for Crop Nutrition/Protection, Soil Improvement and Sustainability • Technology changes the • Micro S Technology is • Bio Revolution is Verde’s • N Keeper is a proprietary • 3D Alliance is a struct
Slide 34: Bio Revolution Technology Enables Microorganisms Incorporation
Bio Revolution Technology Enables Microorganisms Incorporation The use of microorganisms in the Brazilian Agriculture 1 Verde is the largest player in the Brazilian fertilizer industry to add microorganisms to its products 2 K Forte® will be the first fertilizer in the world to use Bio Revolution te
Slide 35: Biologicals Are a Game Changer for Agriculture
Biologicals Are a Game Changer for Agriculture Verde is the largest player in the Brazilian fertilizer industry to add microorganisms to its products Greater application Biologicals overview of biologicals Largest Players in the Biologicals Universe • Biologicals are products for crop protection and
Slide 36: BAKS is a Cost-Efficient Solution that Requires Less Applications
BAKS® is a Cost-Efficient Solution that Requires Less Applications BAKS® Grains Comparison between BAKS® Grains vs. a Conventional Source Results from Exercises 1 2 1 2 BAKS® Conventional BAKS® Conventional Verde has recently published a report Operation Grains Source Grains Source comparing the imp
Slide 37: BAKS is a Cost-Efficient Solution (Cont'd)
BAKS® is a Cost-Efficient Solution that Requires Less Applications (Cont’d) BAKS® Coffee Comparison between BAKS® Coffee vs. a Conventional Source Results from Exercises 1 2 1 2 BAKS® Conventional Verde has recently published a report BAKS® Conventional Operation Coffee Source Coffee Source comparin
Slide 38: BAKS is a Cost-Efficient Solution (Cont'd)
BAKS® is a Cost-Efficient Solution that Requires Less Applications (Cont’d) BAKS® Eucalyptus Comparison between BAKS® Eucalyptus vs. a Conventional Source Results from Exercises 1 2 1 2 BAKS® Conventional Verde has recently published a report BAKS® Conventional Eucalyptus Source Operation Eucalyptus
Slide 39: Micro S Technology Allows BAKS Superior Efficiency vs. Elemental S Pastille
Micro S Technology Allows BAKS Superior Efficiency vs. Elemental S Pastille Number of pods per plant Number of grains per plant Grain yield per pot (g) 50 120 50 35 35 • Micro S Technology is BAKS®’s exclusive elemental sulphur # of grains per plant Grain Yield per pot # of pods per plant micronizat
Slide 40: Our margins with proprietary technologies
Our margins with proprietary technologies Our products contain different technologies that increase their added value for Verde and for our customers. Cost per tonne of Sales price per Margin per tonne of Added Margin per Product Technology Grade (%) BAKS® with added tonne of BAKS® fertilizer sold w
Slide 41: Sales Channels
Sales Channels Sales channels quarterly (% of total sales) Sales channels yearly (% of total sales) 80% 76% 60% 59% 54% 70% 60% 50% 40% 37% 50% 42% 32% 40% 30% 21% 20% 20% 9% 9% 10% 8% 2% 0% 0% Q4 2022 Q4 2021 FY 2022 FY 2021 Direct Sales Sales Agents Distributors Direct Sales Sales Agents Distribut
Slide 42: AI powered Sales
AI powered Sales VERDE AGRITECH 42
Slide 43: Strategic partnerships for Product distribution
Strategic partnerships for Product distribution Lavoro Group is the largest distributor of agricultural inputs in Latin America. It operates over 190 stores, staffed by 2,500 employees in Brazil, many of whom are agronomists and farming specialists who work closely with its over 55,000 clients. Lavo
Slide 44: Salesforce Maps
Salesforce Maps Home Maps Maps Advanced Route Q Search, Maps Advanced Visit Plans Maps Advanced Shared Visit Windo. Maps Live Asset Daily Summari Fj aeer7ca @ Masti loTDeices V Moe ° Salesforce Maps i Layers @ Routes Schedule Bust Lima Goodie BOLIVIA “Gochabanba BRAZIL Salvador Keyboard shoncuts ‘Ma
Slide 45: Carbon sequestration
Carbon sequestration VERDE AGRITECH 45
Slide 46: Appendix
46 Appendix
Slide 47: Brazilian Economic Scenario
USD/BRL Exchange Rate Brazilian Economic Scenario 5.80 5.60 5.54 5.56 5.65 5.40 5.25 5.27 5.24 Brazilian Real versus US Dollar 5.20 5.00 From October to December 2022, the Brazilian Real 4.80 valued by 6% in relation to US Dollar, compared to 4.60 the same period of 2021. 4.40 4.20 As of March 28, 2
Slide 48: Brazilian Economic Scenario
Brazilian Economic Scenario Diesel and Crude Oil Prices (R$ vs US$) R$ 6.0 US$120 Diesel price sold by distributors in Brazil increased by US$103 US$99 42% in Q4 2022 compared to Q4 2021. R$ 5.0 US$92 92.38 US$100 R$ 4.0 US$73 US$75 US$75 US$80 Crude Oil international price increased by 23% in the U
Slide 49: Brazilian Economic Scenario
Brazilian Economic Scenario Brazilian SELIC interest rate 16.00% Before the presidential election in Brazil: 14.00% Stagnant fertilizer market, with farmers 12.00% holding off on purchasing decisions for the 10.00% 2022/2023 harvests. 8.00% 6.00% After the presidential the election: 4.00% The market
Slide 50: Summary of Interest-Bearing Loans and Borrowings
Summary of Interest-Bearing Loans and Borrowings Part 1: Loan start Grace period Term Loan value Balance at Dec 31, Repayable Total interest Lender Purpose date (months) (months) (R$’000) 2022 (C$’000) by payable* Brazil Dec, 2022 Working capital 6 18 10,000 3,421 Dec, 2024 CDI (1) +4.10% Brazil Dec
Slide 51: Summary of Interest-Bearing Loans and Borrowings
Summary of Interest-Bearing Loans and Borrowings Part 2: Loan start Grace period Term Loan value Balance at Dec 31, Repayable Total interest Lender Purpose date (months) (months) (R$’000) 2022 (C$’000) by payable* Brazil Aug, 2022 Working capital 6 18 5,000 1,369 Aug, 2023 CDI (1) +3,00% BDMG Apr, 2
Slide 52: Environmental
52 Environmental Verde’s production process is sustainable. The processing does not require tailings dams, nor does it generate any waste by products. In sum, the ore recovery rate is 100%. The mined area is mainly composed of degraded pasturelands that, once mined, Verde transforms into tropical fo
Slide 53: Potassium Chloride Replacement
53 Potassium Chloride Replacement Potassium salt fertilizers are soil biodiversity’s number 1 enemy. The average farmer applies 200 kg of potassium chloride to the soil per hectare per year. This is equivalent to the application of 1,600 litres of bleach as far as killing soil biodiversity.¹ The wor
Slide 54: Cultivando Amor Project
54 Cultivando Amor Project Cultivando Amor is an initiative from Verde, in which there is a partner charity institution for each of the project’s member cities. For each hectare in the region that is cultivated with BAKS® or K Forte®, Verde donates part of the sales’ profits to the partner instituti
Slide 55: Earned Growth Rate
Earned Growth Rate Earned Growth Rate (“EGR”) is an accounting-based methodology that provides companies with an objective, data-driven connection between customer success, repeat and expanded purchases, word-of-mouth recommendations, a positive company culture, and business results. It gauges custo
Slide 56: Number of clients per year
Number of clients per year The table below indicates the number of clients who purchased Verde's products annually in Brazil since 2017, along with their total cultivated area. The percentage of the clients’ total purchase potential (in tonnes of Product) that was served by Verde increased from 9.57
Slide 57: Permit Status – Last 12 months
Permit Status – Last 12 months Mine Pit Date Category Status Event 2 November 12, 2022 Environment Applied 22,500,000 Operating Environmental License 2 February 10, 2022 Mining Granted 2,500,000 tpy Mining Concession 57 VERDE AGRITECH
Slide 58: Permit Summary
Permit Summary Under Brazilian law, a pit is fully permitted to mine when the Group holds both a Mining Concession/Permit and Environmental License for that area. With this latest Environmental License Application, Verde is now fully permitted to mine 2,833,000 tpy and has submitted concurrent minin
Slide 59: Verde's market size according to average KCl CFR Ports price
Verde’s market size according to average KCl CFR Ports price K Forte® has 10% K2O whereas KCl has 60% K2O. Therefore, a farmer in Brazil pays 6 times less per tonne of K Forte® than it pays per tonne of KCl. Verde delivers K Forte® to the farmers for the same price per tonne of K2O than KCl. Verde’s
Slide 60: Brazil's market size projected for 2023
Brazil’s market size projected for 2023 The table below compares K Forte®, potassium chloride and K2O, based on their K2O amount and potential market size. Potassium unit* K2O grade Amount of K2O per tonne of fertilizer Brazil’s potential market size (million tonnes)1 K2O 100% 1,000 kg 7.02 K Forte®
Slide 61: Verde's margin according to average KCl CFR Ports price
Verde’s margin according to average KCl CFR Ports price The table below compares Verde’s and KCl’s prices delivered to the farmer and shows Verde’s potential revenue at each case. (+) (+) (=) Freight cost to KCl price per tonne K Forte® Brazil’s potential market K Forte® production deliver 6 tonnes
Slide 62: KCl CFR Ports delivered to the farmer
KCl CFR Ports delivered to the farmer The table below shows a breakdown of KCl CFR Ports price delivered to the farmer in Brazil. (+) (+) (+) (+) (+) (+) (=) Freight from the port Blender/dealer's Freight from the KCl's price KCl CFR Brazilian Ports Marine brokerage and Demurrage and Storage Blender
Slide 63: TSX: NPK | OTCMKTS: VNPKF
63 TSX: NPK | OTCMKTS: VNPKF investor.verde.ag