Q2 2021 Bioceres Crop Solutions Corp Earnings Call
[music].
Good morning, and thank you for standing by.
Hi.
I'd like to welcome you to the bike for serious crop solutions fiscal second quarter, two 'twenty 'twenty, one and earnings conference call. All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks that wouldn't be a question and answer session.
And I'd like to ask the question. During this time simply press Star then the number one on your telephone keypad. If he would like to withdraw your question press the pound T. Thank you on the light now I'd like to turn the conference over to Mack School, Yeah, you may begin.
Thank you good day, everyone and thank you for joining us.
Presenting on today's earnings call and we repaid equal Google the affinity.
Thank you for your welcome and how the collaborate the way our Chief Financial Officer, both will be available for the Q&A session.
And for proceed I would like to make the following the Safe Harbor statement today's call will contain forward looking statements and I refer you to the forward looking statements section of the raise the earnings release and presentation as well.
Well, we can price with the SEC, we assume no obligation to update or revise any forward looking statements to reflect new or change events or circumstances.
Also please note that for comparison purposes, and a better understanding of the company's underlying performance. In addition to discussing as reported results. During our presentation. Today, we will discuss comparative results, which exclude the impact of hyperinflation accounting in Argentina.
Additional information and connection with the application of the rule Ias from nine can be found in our earnings report I would now like to turn the call over to appeal that and comfortable.
Okay.
Thanks, Max and thanks, everyone for joining us today and happy new year.
Today, we are reporting on our second fiscal quarter that ended on December 31.
As the technology company and our value proposition is centered on developing highly differentiated solutions that create economic incentive in the form of improved yield management practices and other efficiencies to further decarbonize the production processes while regenerating.
Agricultural ecosystem.
For the central purpose in mind, we have been investing over the last 18 years and a solution called <unk> for.
Designed to improve the resiliency of crop in the face of adverse climatic conditions for <unk>.
Specifically the limited quarter of AWP.
The single most important factor affecting agricultural and sustainability.
During the quarter, we achieved the first approval ever of the technology and wheat and <unk>.
Meanwhile, we have been working on since 2015.
With these GAAP the implications of this approval in our September earnings call for.
Today, we are presenting the data obtained from our first pre commercial production process with independent and growers totaling close to 7000 hectares, and 17 times more debt.
On the prior production cycle.
And the results are as follows.
Atrium for wheat out yielded commercial varieties, commonly used by participating growers by 13, 5% on average across all environments and locations.
And lower yielding environment, representing one third of all hectares harvested.
And the average improvement from the HB for technology was 42%.
This is more than twice the performance we estimate it using our historical data.
And higher yielding environments. We also perform all of our historical data and we will discuss this in more detail later in today's presentation.
As a result, all participating growers have anticipated their willingness to repeat and or increase their exposure to HP for wheat in the coming season.
Further validating our value proposition.
The performance of the current day, three for wheat varieties and the validation of our value proposition with partners as well as the high quality of the seat obtained allow us to ratify our prior guidance for.
Protecting almost 20 times for hectares for the upcoming season.
As we indicated these protection and subject to Brazil import approval.
Regarding the approval process and the public hearing that precedes the introduction of any new GM crop has already taken place.
These occur on.
And over 2000.
And no further information and has been requested by regulators as of today.
Continuing with HV for soy we have engaged with 148 growers across 220 locations.
For the total of close to 23 sales from Texas, where we are currently and multiplying seven material ranging from maturity groups three through five.
And despite some initial dry conditions in certain regions.
This is scaling our process is advancing state whatever the.
We continued to make progress with our collaborators to develop materials for a broader range of maturities and we have recently announced on important collaborations with and sleep.
Our current by computation of leading company to fast track product development and targeting effort in the United States.
This collaboration is possible even the increased flexibility we have achieved after the full acquisition of America.
We will also comment on the late during the presentation.
From a financial performance perspective, we experienced debt dropping revenues of 17% for the quarter, which Enrico will explain in detail during his part of the presentation.
This slowdown and revenues, partially offset the good momentum of the last three quarters, even as our revenue growth of 8% for the trailing 12 months.
These numbers Thats not include HVAC for deferred revenues accumulated to date, which we refer to as contributed goods totaling $3 6 million over the approximately.
30000 hectares of HP for crop farm, thus far.
Please now turn to slide for for a more in depth of our view of HB for weak performance.
And the heat map of South America on the right side of the slide indicate soil and water availability in late October of last year as compared to an average year.
The new areas have more abundant water than usual and the orange and red areas have less.
This image illustrates the severity and extent of the drought condition during the last week growing system.
As we assume and on the left side of the slide two of the HP for the wheat production locations.
See that in the northern locations.
And the drought was more severe and the average improving yield was 60% with.
And with some extreme situations where yields were.
For more than doubled.
The average drop in production for this region was reported at 47% by the Saudi award of freight.
And institution that has historically reported statistics for the current crops.
Accordingly, our <unk> for technology could have and reduce this loss by two thirds.
Improved performance was still observe and southern regions indicated as B and C.
With the average increases of seven and 8%.
Known.
And for water constraints for less significant and yields in general were above average.
On the following three slides.
And case studies and environments with different productivity levels.
First we see of location and Henderson bonus side ex proteins, where yields were above five tons per Hector and the improvement in the HB for crop was 20%.
And these high yielding environment, we have outperformed commercial varieties and six out of 10 times with an average improvement of 3% for.
Probably more of a factor of the elite genetics of our variety of ice and less so of the drought tolerance technology.
Moving to the next slide we see another location and one of the tightest programs now within and intermediate yield range.
That is between 3% to five tons per Hector.
And this location, we observed and improvement of 30%.
While we average on locations within the 3% to five.
Range, we observe the benefit of 11%.
Outperforming commercial material every seven five out of 10 times.
Lastly in the next slide we go to a western location and the same thrombin, where yields are generally below three tons per Hector and observe a benefit and the HP for crop of 68%.
And these lower yielding environment, we have obtained and average yield improvement of 42% across all sites as indicated before outperforming commercial must the deal every nine out of 10 times.
Slide eight provides an overview of our HP for scaling up process.
We've taken this opportunity to ratify our prior guidance in terms of hectares and associated deferred revenues knowing today that we have the variety of performance the seed quality and the volume of inventories need to meet these goals.
Moving now to HP for soy on slide nine we have been able to plan and close to 2003 sales impact us with 148 participating growers. Despite the slow start for the planting season, mostly affected by the lack of rainfall and Pete late December.
These production cycle and represents an 8% to 10 times the increase in the number of hectares of farmers, respectively compared to the prior cycle.
We have been able to replace some of the lower performing varieties with new materials coming from our U S of see some of the application process with a total of seven material well being validated and scaled up.
As indicated before the process is progressing favorably and we are closely monitoring the adaptation of the different genetic background for the current universe of growing conditions.
Key determinant of our ability to speed up the deployment of HB for soil.
Chinese import approval for <unk> for soy is still pending.
We are actively engaged with regulators the facility the generation of independent in territory data and supplement our dossier whenever new information as requested.
And our assessment of the process is advancing according the breadth of them.
And important aspect of the HP for seed multiplication process is the data gathering and aspect will cite are actively monitored over a 130 different variables.
With the resolution of some of these variable at the meter squared level.
And I'd tend to provide an overview of our data acquisition process and farm inventories surveillance interface.
Taking advantage of the data science facilities generated by these growing database, we have engaged with major sourcing through the plant.
And on <unk>.
The Mexican company dedicated to competition of bleeding.
The gain powerful insight regarding the interaction of deepened and environments with the genetics of our material and eco ship combinations.
Improving the design of our breeding and strategy and shortcuts in the product development process by more accurately predicting the performance of our products for a given the location.
Using the operational research approach champion by and the founder Steve Tanksley.
Pioneering genome mapping and black molecular breeding we also aim to significantly improve the return on our R&D dollars dedicated to this process.
As the recently announced we will first use of these capabilities to fast track our breeding efforts for <unk> hundred 40, and the United States.
We expect that our proprietary drought tolerant and technology to quickly gain a foothold.
Incorporating and sips computation of technologies into the development of HB for soy and H before we will also help us better target a wider range of drought prone drill and regions around the world as well as bringing them to market faster.
With that I will now turn the financial portion of the presentation of alerts to our CFO and Rick Lopez from Macquarie.
Okay.
Thank you for April.
Please turn to slide 12.
Our credit conversion, despite the drought that negatively impacted revenues for the quarter we.
<unk> success and several other areas and it relates to preparation on our gross commercial launch.
For <unk>.
Technology and building.
HP for weekly inventory volume target H before we are building and historical performance.
For soybean planted hectares and scale rollout.
All of this on traffic metrics grew substantially during the second quarter of consequence of Hawaii.
And uniquely positioning the company and the board for Calix, and we expanded our geographical reach and addressable market of ours.
And <unk> III for broker.
For context and for comparison purposes, Let me remind you of how nature of our business and the PERC.
For the significant portion of software.
For Ya.
Planting and crop and the commentary.
Of this year.
As you can see on the slide pack season begins late in our fiscal first quarter and our strongest for us taking place and the second quarter and all of them.
The sales level of occurring and the third quarter.
If you draw from.
Our cultural area of from Argentina, and power based on.
Brazil and partners on revenues from the second quarter fiscal 'twenty and 'twenty one for.
Quarterly sales accounted for $47 $7 million from.
First of the solid topline performance of $57 $2 million from the same year ago quarter.
Moving the growth momentum we have achieved on the last quarter of this current year expected banking on the first quarter of currently credit here.
Total and comparable revenues for the trailing 12 months increased 8% to 168.
The media buyers compared to $155 $5 million.
And the same year ago period.
On the positive note during the second quarter, we increased contributed for a true for wheat and soybeans.
The $236 billion with the gross margin of approximately 60%.
Compared to <unk> 7 million.
Same year ago quarter the.
The volume of these contribute groups will be recognized for revenues once the realized inventories are sold keto range and no known of contributing for chemotherapy.
And hungry for time being this has the financial benefit for the company.
Corresponding gross profit contributor of goods price, but less cash required from the EOG.
And the review process.
Please turn to slide 13 for a closer look and was impacted sales and profitability during the second quarter.
As you can see during the quarter drove condition and found and cold.
So on and regional markets, Argentina and Brazil.
Impacting our revenues, primarily on the crop nutrition and crop protection segments, which accounted for 55%.
And 5% the total decrease respectively.
Cost of the question on segment revenues decreased 12% for $26 five from the employers dry weather during the quarter strength and crop protection market clients across the affected.
Agriculture.
Estimates indicate the average lower 63.
What I'm slow indications of when.
And the spring and guidance.
On the condition, which income directly and outcomes.
On the map.
We expect pressure on costs from the dry weather also impacted the performance of between.
<unk>.
Right.
On balance gross margin for the segment slightly below the previous fiscal year quarter, primarily due to slightly.
On the lower margin <unk>.
Adjusting items.
The <unk> integrated product segment had a mixed performance.
The treatment back sales hasn't been on where it over and so we saw.
Some of the highly successful we see from cross sales campaign of these broad prior for the second quarter fiscal 2021.
However, higher sales of seats and robust growth for hosting.
The last we got all aspects of the program.
Moving to $12 $1 million and profile of the revenues for quarter.
4% decrease compared to the previous disclosure.
Our gross margin dropped the hanging on 51 basis points, primarily due to <unk>.
And mix lower volume and sales during the quarter.
And for competition, the absence of a frame of delayed planting with growers migrating lower and technology.
Which one has been challenged for the value proposition of our microwave recognized for product versus a volume of replacement.
The result, total comparable revenues for the crop nutrition and February.
The 7% nine points moving environment.
And also for fertilizers, mainly in Argentina with method of sequential and all of the use of the installed capacity from 30.
8% range, 5% on a trailing 12 month basis.
Panel on.
Sales volume held up because of the resulting from the Remodels sheet, Florida.
The impact that we mentioned.
For modeling gross margin on the segment expanded by 500.
Basis points.
Two 4%.
Mainly due to higher microwave guidance for profitability.
Explained by the temporary cost provision.
Overall gross margins for the business increased slightly year over year from two.
And 1%.
The two 8%.
Now lets please turn to slide 14 for a look at how revenues and gross margin per segment.
The trend of overall gross profit per quarter.
The slight gross margin expansion and just describe slightly offset the decrease in revenues with comparable gross profit.
For expense year over year, and reaching $5 $2 million for the fiscal second quarter.
Crop protection on attrition and European contributed for the briefs filed for the integrated on the shows.
To your point 6 million non it wrong.
The smelter and expenses, which breaks out and the performance and be a set of second quarter adjusted EBITDA and margin.
The operational performance and just described which impacted of our gross profit across the result, driven mainly by the senior debt, our micro beaded fertilizer and manufacturing JV explained most of the 33% increase in adjusted.
EBITDA, which was $14 million for second quarter compared to 21 one.
The year ago quarter.
Ias 29 adjustments of compile and gross profit was slightly offset by lower expenses.
Year on with incremental SG&A as we approach and the commercial launch of interest for magic of Onewest transaction expenses and stock based compensation and charges from both quarters.
S G&A expenses decreased 5% to $9 $6 million per quarter. Following a strict control of our expenses.
Warner facing market headwinds.
As Joe and includes R&D expenses.
Which approximately one third in the quarter were related to the development of new Biopharma and buy.
And the for seed treatments and point of obligations for wheat.
The main crops the only.
The concerns of R&D expenses were related to the development of our feet.
The good and product registration on whereas the company pursuit of.
Regulatory approval for <unk> for in country and important that Bruce.
Please turn to the site.
Bookings for Luke on how this quarter's performance impacted the tape.
I mean, the growth momentum, we have been experiencing in the previous quarters.
Even with an adverse and have yield flow and the second quarter. Our business grew and can be repeating vertical mentioned previously our sales grew 8% on looking at the trading the last 12 months, which moves down and aggregate debt versus that same time of year ago.
And you can see profitability also.
Nighthawk of illusion of when looking on the trailing 12 months, increasing from 41 from premium bar.
And the EBITDA.
Media.
Even more and breaking down contribution and net growth in adjusted EBITDA.
Yeah.
Operational performance delivered almost $10 million and additional comparable gross profit versus the year ago LTM.
This was mainly offset by Ias 29 of adjustment the compiling gross profit.
Finally, please turn to slide kind of theme, perhaps based on our balance sheet.
Cash cash equivalents for how the short term investments some of them.
The 31 from slightly total $36 million.
And improved liquidity position compared to the $16 million of both December 31.
And.
Sequential basis cash position was down from the previous quarter as we entered the high Tech some of our business in South America, I am proud of and the corresponding worthy of Tampa.
During the quarter, we also used for improved financial position and the growing coffee costs and executing our HP for for around soybean acreage target.
Almost 3000 hectares planted and on.
So the bill payments related to the recent.
Half of Asia.
Net debt as of December 31st plant, and <unk> totaled $127 million, which approximately 46% from <unk>.
True.
Obligations.
The short term portion of our debt from <unk>.
Working capital loans.
<unk> made it for working capital position and.
The current portion of long term obligations.
The loans.
Our liquidity position of from December 31st lien and planning.
And with approximately 40% over the short term portion of the best tolerated, our accounting debt payment obligations.
Our net debt to LTM adjusted EBITDA from December 31 was three <unk>.
U S.
Compared to 231 times at December 31.
Increasing the debt ratio compared to the prior fiscal year, what's current mining due to the already mentioned the increase in total net debt and uses of cash we invest and wrapping up inventories operating.
And of course soybean crop.
During the fiscal second quarter, we significantly lowered our financing cost for the result of for convenience initiatives to gain financial effects.
The profile of Mercury.
Moving on.
And Andy on which we will continue to work identifying opportunities and the financial markets and compete.
The solid cash position, we maintain allowed us to support the working capital needs and compete.
The eastern transaction.
Such that the future of our makeup present day.
Which gives us now.
The for soybean technology.
And with the acquisition behind US, we're now focused on fast tracking our HQ for inventory as we prepare for the commercial launch and deployment of <unk>.
We reported the sharing more on our and developing regarding our soon to be announced the investor conferences in the coming months.
This concludes our presentation on for today's call.
Operator, please open the line for the Q&A portion of the conference call.
If you would like to ask the question. Please press Star then the number of lines on your telephone keypad again that Scott and the number one on your telephone keypad.
The momentum compile the Q&A roster.
You have a question from Ben please.
Alright, Thanks for taking my questions first I have a couple on HB for wheat.
So first of all congratulations on some really impressive data coming out of that program.
My question to you is do you have the sense that your pharma customers are are going to be willing excuse me going and be willing to purchase seed once that Brazilian approval comes.
<unk> or Jim.
And then do you believe that these farmers are looking for additional certainty that there will be buyers for the grain after harvest before they commit to it.
Purchasing seed from you.
And then ill just say and equal speaking so it's sort of happy new year to you and we haven't seen since last year and thank you for your question.
Obviously, we believe that.
Farmers.
And have more confidence and ones of the Brazilian operating was is in place and conventional.
Commercial channel become available for H B Fuller.
In the meantime, we are operating under the HP for program, which of the identity preserved and infrastructure, we put in place.
To basically take care.
And that situation with farmers and this is something we can do today because everything that is produced and needed for the next cycle of signals the indication.
And we become customers of all of that drain the dosing for seed and as we're ramping up the.
And the ADP for the process now and into a need.
<unk> net of provision in the field.
That would represent a risk and the.
Nishu.
And so although the net.
Need to take care of ourselves and not the need that.
And in the hands of applied and there's no wheel and farmers the search of seed and produce green that cannot be commercialized afterwards, and thats, where we have taken and the improvement approach.
Got it okay. Thank you.
And then I guess one other question on the.
The regulatory front around HB for wheat.
And I know, it's impossible to weigh out of timeline, but but.
Do you have is there any sense of that you can.
For any precedent that you can point to that suggests on.
On that Youre looking for approval to come here and.
And the next couple of quarters.
Is there any is there anything that's been published by by any regulatory authorities that would that would suggest something like that or.
Is it really just just unknown.
And I think obviously, how you had the good public hearings, which we referred to.
During the presentation on the 22nd of October one.
Kind of the final debt and.
In the regulatory process.
To the even devine of positions of obtaining the approval and seems that public hearing and we have received.
No new inquiry from the Navy yield that EBITDA.
Regardless of.
And the regulatory agency that deals with each of the deal.
And bear in mind, obviously that the.
On December and January.
Six months for the level of administration in the sales so the might of.
A question coming up and.
After the.
And so the inside of the loans that we believe Bud and any instance, our working assumption is that the.
And for the approval and Nike.
The 19th of in place before the next crop.
And so we need to make decisions by May and.
The need and to fully.
The rollout of <unk> for wheat.
Inventories.
And we think that it is possible debt.
And by that amount and we will have a final.
And so from the building and regulators.
Got it got it okay.
Look forward to that.
Over on the CHP for soybean side I have a couple of questions on the.
And as the IP collaboration on.
Are you looking for them to help.
Help you secure commercial partners for an eventual launch here or is or is it.
Or are you looking at and really just kind of help you advance your breeding program and new geographies and it seemed like the latter but I just wanted to see if you had any sense that they would really help you identify commercial partners.
Or if that was more on yield.
Youre right in that it's the ladder and it's more about and.
Net balance bleeding, so that we can have the right materials and faster.
For the Joseph <unk> for it can be.
A major contributor to the yield so we were localized sales team for instance.
10 million acres of both.
Each of them.
Yeah that ashish in the.
Yes.
Thank you bye and water availability.
And also areas seem to southern U S.
The exceeds delay and just the marketplace before we want to use computational science.
To better for leak the performance of varieties and.
But on the redeemed zone.
So from a commercial perspective.
We are actively looking to.
Structure of relationships initially below the knee and equally.
Equally for what we do in Argentina, we the identity preserved.
Structure, so that we are ramping up inventories and engaging more directly with the bottomless fun eventually.
And with that more because of a future that approach.
And the distribution.
And the 15 players in the U S and.
You will see coming up.
Some announcements regarding leasing the net.
And the next quarters.
Got it got it.
Regarding the fast track of.
Yes.
On the development timeline.
Do you think theres going to be and.
And the meaningful field trials and the United States. This starting and a few months or is that going to be likely.
A likelihood and event for 2022 or maybe thereafter.
No we will be duly and doing a lot of training and the U S. In the coming T. So we have been doing slightly and already with some of the materials remember that of all our <unk> see some production is done in the U S. Bill on the.
The easing of single occasion on a couple of locations because they are the emphasis is on.
<unk> of seed and the quality of the seat and not so much volume, leading the technology and between geographies, So and that is something and they're starting to room on aggressively today and.
In the coming Houston.
And there is where we have now on the company the tunes and seats.
On vacation of leading and predictive.
The targeting.
And.
And that's for us.
To be more efficient and essentially we need and the types of months.
In the past you will have to the expense keeps driving and before you launch of variety of things there as of bookings and the aim and the use of artificial intelligence and machine learning tools to show of debt that process.
Got it and then I guess last question on this is regarding locations and for those trials I think you were ramping up your inventory.
Last year, and I believe Arkansas and it sounds like Youre looking at the Dakotas are those the kind of the markets you want to youre, probably going to be focused on first or are there additional geographies that you are maybe going to be going to be trialing and this year.
So on the trading side, we will price.
Already tight for the quarters, because we believe that is where the the.
The most immediate opportunity lies for each before and it's meaningful enough from an interest perspective.
For the production aspect of things, we'll continue to do that in Arkansas and.
And where the maturity groups that we use in Argentina, we've broadened and doing better.
And remember that got done.
And you should need to shut the maturity groups like two and below.
And that's where we are slightly behind where we planned here in South America, Citi and above and for that we need to go to some more sell the locations and the U S for the simplification and.
And what does the team indication specifically targeting the U S market, then does that flow.
And.
And will become more important.
Got it got it.
Okay, well a lot of.
Thanks for taking my questions I think that does it for me.
The block with all of these initiatives and I will jump back in queue.
Thanks, Kevin.
Your next question is from Sebastian the Mindy with five day plus capital.
Hi, good morning, everyone.
And I have two questions regarding the balance sheet of the company I was wondering SaaS.
Further gross on the cash use of proceeds for the quarter on the <unk>.
Second one is that the given the current degree the will be roughly half of a good day.
And that the share price.
Eight.
Eight.
And we should be concerned.
I would caveat and equal leading the almost 2 million.
Sure and position non.
So if you have any thoughts on all of them being and long term.
Shareholder.
And then lastly on that.
For the April again, and thank you for your call and.
And it's good to copy of the year today.
I'll answer the second question and then I'll pass it on can we get.
For the for the first question.
Essentially I think the first thing I need to say that the $1 8 million.
Millions of shares that we gave on Acadia.
For the.
The consideration for the early completion of the locked up for six months. So the beat on the shares that can be done immediately tradable.
And.
The second thing I would say that Arcadia of ability to they will capitalize the hub recently on.
And the equity rates.
On the significance for them so.
I think for that.
<unk>.
Their willingness to sell or divest the equity and the state it will.
And on there.
Near term gassy, but on sort of their perception of value and the areas where.
It feels that the.
Continue to be aligned.
And I might have asked.
Reported under the update of the story in the Acadia now on timing setbacks.
The need that that is a completion of significant size that.
And that might be attractive to noteholders on one of the FTC, beating of the upstate and storage. So eventually those shifts become available.
Adam and PC base.
On a significant flow, let me instead of the day training and both of our subsidiary.
And out of non because you want to comment further than the need for to tackle the second question.
Hi, Jeff.
You're on.
On the call no I think that's what you saw.
For the second piece of the same questions.
The eco.
So on on your question about the uses of cash during the quarter.
Do you know that our main uses of cash since we have been communicating our around the commercial launch of each before so on during the quarter, we invested cash.
And we continue to buildup of inventories of each week for wheat, and soy and that was.
The portion of the use of cash during the quarter and the <unk>.
On the one.
In terms of important and for the upfront payment related to the <unk> acquisition for us the consolidated of 100% ownership.
<unk> for soil vehicle.
So those two initiatives.
It's something that we anticipated in terms of the future of cash and then there's the seasonal.
Nature.
And the new level of inventories on.
On working capital and general as we entered into the two.
For the high season.
The two most important markets for us, Brazil, and Argentina. So those were the main key streams and which we invested in cash during the quarter.
Yes.
Got it. Thank you for the answers I Havent final question regarding the.
And Q4.
If you can give.
If you can talk more on the <unk>.
The 2% improved for four weeks.
The screens during the quarter on.
How should we think on all of that much larger scale.
And thanks for the question, so often I think the 42% improvement in the lower yielding the environment was and anticipated.
If you look at everything we've reported on.
And so the delay of the prior to the skull and.
And we were indicating of 19%.
The yield benefit on a range.
And the environment of lengthened to fortify the done here, we have solidly and the fact is I think close to 2000, and Texas, where deals with Netflix and tons.
Across all of those sectors of the average of 42% so thats more than twice.
We obtain.
And what we had similar study called data.
I think there's a combination of factors.
Debt.
And the leap one and so obviously the genetics that we know the wheat and.
And compared to sort of the historical data, where most of the day that was produced.
And the original and then and not and even some of the heat lockdowns that we're kind of of the PUC.
And then the extreme situation at least for.
The very extreme drought.
And in the Northern Argentina region, where we had.
Maybe.
Third of the sector.
Of low yielding environment, the general growth of 47% and.
That's not unusual I mean, 47% of the heat study collaboration.
The first 60 years of showcase of the technology and we were.
Basic and.
And we found ourselves release of media and resolved now.
And I can guarantee that the farmers.
On slide eight before the week and so the outcome.
And we broadly and anything else.
And on HB Fuller and the future.
The meaningful from a yield advantage perspective.
So that should give us sort of the.
The non.
The required maintenance.
A game changer.
And the lead.
And so we would see.
So we are very bullish.
And then the data that we have given sort of the non U.
The number the effect there.
One of these number comes from and of course.
For the approvals in place.
We can maybe it's a reality, but a much bigger group of partners.
Excellent I have the last question.
I assume the debt ratios.
Coming from double digits.
Does the two times.
On seeing the lower cash on cash and debt.
And one of the options or any of that.
And so you have for the next.
The 12 months.
And just.
For the questions of the yen.
And.
And we see.
The one on mainline investment the surround the HVAC for commercial launch so as we invest and each of the us to ramp up inventories and also on the investment and the other big States.
The state between kind of the highly accretive for our shareholders and the future of dosing should be moving.
Revenues come from the leak into the P&L. So it was something that we expect that some of the net debt.
And the leverage ratio I should say would go up.
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As we invested in the business.
Also we are in and the Hiseq from now.
And also for baking business. So that is also required and guests that has gone up and returned to the balance sheet. Once we get out of the Hiseq and so as we move forward.
Means that we should be operating within the range of what you have seen in the past.
And so on the.
Slightly higher than the previous quarters as we invest in entry for and did the commercial the commercial launch, but we do not anticipate something meaningful changing on the leverage ratio of the company in the coming months.
Excellent.
All for me guys on congrats.
Congrats on the extra and dove on.
And we keep in touch.
Thank you the updates.
Thank you.
And I might ask a question. Please press Star then the number one on your telephone keypad again. The Star then the number one on your telephone keypad.
Your next question is from Steven Ralston with Zacks.
Good morning.
Good morning, Steven.
Very interesting.
Information about the.
See the effort and the HB for area.
Also with the.
Really being able to test it and drought conditions.
But if I could just turn to the crop protection and crop nutrition business.
Which was impacted by lower demand due to the drought conditions could you talk about the dynamics of.
The reduction of the.
And that demand for <unk>.
Both especially and the micro beaded fertilizer area.
Sure Steve.
So the first thing to do.
Keep in mind as the dollar portfolio is heavily geared towards the planting season.
And in those two businesses, particularly in the crop nutrition business.
We are not geographically diversified as we are on.
And the Biologicals for instance, where we sell the 925 different countries and then the <unk> weather events tend to be.
And.
The net impact of Covid.
And that you will have the same phenomenon and the geographies and the government nutrition space.
The highly dependent on Argentina, particularly of the micro beaded fertilizers.
It's a very important factor we had on.
Almost no rate in the range until late December.
And then it goes through the end of the quarter and then.
On the ADC Ganesh.
Speaking of the micro beaded fertilizer sales that we were expecting.
Now and.
We also the things that varies.
And I need for a new strategy and that particular current line because of the idea.
<unk>.
We introduced into the market some years ago.
And what we need so we.
And we prioritize the initial strategy.
And the positioning of the solution is of high value solutions like everything else. We added to the portfolio I think we may see debt.
And while we achieved.
And everything we could achieve with on our strategy and we announced shifting gears to have a more volume driven approach.
And we're taking advantage of the.
And so on capacity that we have to take care of higher volumes.
And at the weekend, the before slightly below the 30% of utilization of our manufacturing capability and people.
The significant need they shouldnt from synergies.
And now up to the more competitive pricing on that.
And as something of that actively discussing with all the progress from that business.
In the southwest and the crop protection needs.
And there is no rain and.
Debt.
On bottles of dramatic and at the window of what those.
Michelle.
And I have been one of the space that were of meat.
Thanks, Rajiv on the business got it on and they get you on the comments on it.
From that.
Yes.
In the highly on the call so basically rotating.
On the fertilizers by getting into higher volume strategy that should allow us to move some fixed costs from the manufacturing of CVD on all.
The allow us to improve also sourcing of Oklahoma and so all of that should translate into a better pricing propositions will fund the without profitability.
<unk> of the book.
So that is.
And the initiative and we will be taking and then on what the eco said about the <unk>.
And then for two years.
And the presentation farmers Keith.
The one on two screens.
And the fields and all.
And that translates into less demand the of Agila.
Bob.
I think that the pumps on.
Some of these comments will basically expenses was mainly explained the dynamics on the two segments.
Thank you very much.
Just the.
The just getting a little granular on what was the capacity utilization of the micro beaded fertilizer facility during the quarter.
So it was on a 12 month basis and Thats, how we monitor.
On progress on the 10.
Percent funds from 30.
Thank you very much for taking my questions.
Thank you Steven.
Your next question is from Matthias commodity.
And with Delta asset management.
Hi for equal Enrique and thanks for the call and Thats it.
For you.
Following up for us.
Question regarding its before.
I would like to.
If you could provide some color on the horn and holding conversations with specifically with the the buy side of the equation.
But the potential buyers and crushers.
How are the debt.
The conversations are evolving.
Hi, Matt.
Greg you had in the call and thank you for the question.
Actively engaged with all the stakeholders, particularly and the need and industry.
The dealer to dealer body of the deal.
To provide on board.
And.
In terms of the EBITDA of that type things that we have been making very good progress compared to where we started initial either of the reaction of of concern in the.
The first GMO wheat.
And then.
But I would say the sort of the bottom of the Opex side and in many ways also on the environmental side of equation.
I think debt.
We're getting traction with them and rollout of the.
So we might be able to announce and linked.
Coming quarters, the strategic relationships with people and processes.
<unk>.
For the light commercial comparable.
And needle the true rollout of our H before so.
We are moving the model in Argentina, as I indicated before but also in Brazil and.
So of that.
And most of our customers and domestic markets.
The international markets are taken into accounts.
Excellent. Thank you.
At this time there are no questions.
Do you have any closing remarks.
And so.
No specific dosing remindful and thank everyone for participating and remind everyone. We are for.
And the level of for follow ups and.
And the address any questions that the mine.
Some of them.
During the quarter, So hope and we won't have the every day and and.
And looking forward to continuing the conversation in the months to come.
Thank you for participating on today's conference you may now disconnect.
[music].