Q2 2022 Bioceres Crop Solutions Corp Earnings Call
Speaker 1: In slide five, you will see performance results by a medium and lower satisfaction level.
You will see performance results by region and grower satisfaction levels.
Speaker 1: It is very important to note that 225 growers participated in the current system.
It is very important to note that 225 growers' anticipated in the current system.
Speaker 1: representing an unprecedented level of pre-nudge grower scrutiny for the technology and for our identity preserve production program.
Representing an unprecedented level of three large grower scrutiny for the technology and for our identity preserved production program.
Speaker 1: new improvements ranged from 5.7 percent
Improvements range from.
Five 7%.
Speaker 1: to 39.6% across all environments and regions.
79, 6%.
Ross all environments and reagents.
Speaker 1: regions where benefits were lower reflected limited adaptation by current materials and conversely in regions where gains were more relevant.
Regions, where benefits were lower reflected limited adaptation by gathering the Bds.
Conversely in regions, where gains were more relevant.
Speaker 1: Grower satisfaction levels ranged between 60 and 80 percent in regions where yield benefits were below average and increased to about 80 percent where benefits were close to or above average.
Grower satisfaction levels range between 60, and 80% in regions where yield benefits.
What are the low average an increase to above 80%.
Benefits were close to or above average.
Speaker 1: We believe that the current level of performance information by region, by productivity conditions, and by global profile provide us a very valuable data to fine-tune our value proposition and portfolio mix ahead of our upcoming launch.
We believe that the current level of performance information by region.
Byproduct lead to solutions and by global profile.
Provided us a very valuable data.
Fine tune, our value preposition and portfolio mix ahead of our upcoming launch.
Speaker 1: Turning now to slide six. As noted, we expect to minimize geographical limitations and improve grower experience under high yielding conditions as we expand our portfolio to include second gen NAPDA.
Turning now to slide six as noted we expect to minimize geographically communications and improve grower experience under a high yielding conditions as we expand our portfolio to include second Gen lumpy deals.
Speaker 1: Our current data show an average improvement of 16% in environments yielding above 5 times per hectare for new materials when compared to first generation horizons.
It's Darren data show, an average improvement of 16%.
In environments, yielding above five tons per Hector for new materials, when compared to first generation varieties.
Speaker 1: We are moving at full biological speed to include these newer materials in our offering, planning to contract 30% of the 23-24 system computation cycle in this second perceive the
Maybe next full biological speed.
<unk> this year and the details in our offering.
<unk> declined 30% of the 'twenty three 'twenty four system with the vacation cycle.
With these second generation varieties.
Speaker 1: Please turn to slide 7 for our current thinking regarding the HB4 lead opportunity in key markets. NACAM represents a total market of roughly 9.5 million hectares, of which Argentina, South America's biggest lead producer, contributes with 6.5 million.
Please turn to slide seven for our current thinking regarding the H before we'd opportunity in key markets Latam represents a total market of roughly $9 5 million hectares.
Rich.
Argentina.
South America's biggest producer.
<unk> with $6 5 million.
Speaker 1: We believe we can capture an estimated 2.3 million hectares with our available portfolio and near-term pipeline. We are currently requesting the participation of three commercial varieties.
We believe we can capture an estimated $2 3 million hectares, with our available portfolio and near term pipeline, our guarantee requested with anticipation of three commercial varieties.
Speaker 1: We estimate an incremental a bit of between $15 and $20 million by fiscal year 24. It excels in this market projected in the $190 to $290 million range.
We estimate an incremental detail between 15 and $20 million in fiscal year 'twenty four.
Peak sales in this market projected in the $190 million to $200 million dollar range.
Speaker 1: We also expect to grow beyond Argentina, as we see a continuation of the world in the field. The second largest not done market.
We also expect to grow beyond Argentina, as we sit here great duration of anyone in Brazil, the second largest.
Markets.
Speaker 1: The Russian approval in the deal is now expected for 2023, after completing the country evaluation.
Production ability of rail is now expected for 2023.
<unk> country evaluations.
Speaker 1: We believe that H3S, one of the main labels significant market expansion in this country, particularly as tropical germplasm currently being tested for reproduction in the Ferraros region is incorporated to the pipeline.
We believe that <unk> hundred 41 of the merger enabled significant market expansion in this country.
Particularly as tropical germ plasm currently being tested for wheat production in December levels.
Region is incorporated to the pipeline.
Speaker 1: that we may therefore represent an additional opportunity of between 700,000 to 1.1 million vectors
<unk> may therefore represent an additional opportunity.
700000 to $1 1 million hectares in the medium term.
Speaker 1: Beyond Latin America, we are currently pursuing corruption of rules in the United States, Australia and South Africa.
Beyond Latin America, we're currently pursuing production approvals in the United States, Australia, and South Africa.
Speaker 1: these geographies combined represent twice the hectare opportunity currently being pursued in Latin America although in a longer time horizon.
These geographies combined represent twice.
The Hector opportunities currently being pursued in Latin America.
Although the longer time horizon.
Please turn to slide eight.
Speaker 1: On this slide, we address the rollouts of new age-report soil varieties. As we anticipated in our fourth quarter call of fiscal year 2021.
On this slide we address the rollout of new entry for soy varieties.
As we anticipated in our fourth quarter call for fiscal year 2021.
Speaker 1: We decided to discontinue the ramp-up process for first generation materials in favor of second and third generation varieties.
We decided to discontinue the ramp up process for first generation materials in favor of second and third generation varieties.
Speaker 1: Third generation varieties were multiplied up season in the United States and resulting in densities planted in food in the current cycle, opening approximately 1.5 thousand hectares which are generally in good condition.
So our generation varieties were multi utilize off season in the United States and resulting in the authorities planting season in the current cycle.
Italy, approximately one 5000 hectares, which are generally in good condition.
Speaker 1: In the case of second generation materials, where the germ drag and drag was not fully eliminated, we decided to reposition a significant part of the multiplication process as a follow-up crop to eat in reposition planting.
In the case of second generation of videos or the germplasm drag was not fully eliminated.
We decided to reposition a significant part of their multi application process.
Follow up drop to reach these ecosystem plantings.
Speaker 1: Data from the 2021 season indicated that the use of these materials of a second crop in later season plantings show needle-defending performance gap under higher yielding conditions.
Data from that 'twenty, 'twenty, one and see some indicating that the use of these materials.
Second we grew up in the laser system plantings show little if any performance gap under higher yielding conditions.
Speaker 1: Unfortunately, the lack of rain during December made some of the locations disconnected no longer suitable for the ramp-up process. Consequently, we achieved 60% of the planned area for second-generation ramping.
Unfortunately, the lack of rain during December with some of the locations with selected.
No longer suitable for the ramp up process.
And consequently, we achieved 60% of the plant area.
Second generation rankings.
Speaker 1: Despite not fully achieving our notification objective in the current cycle, we still believe resulting event buddies may reach month-level readiness.
Despite not fully achieving our notification of objectives in the current cycle, we still believe resulting in very bodies may reach launch level with readiness.
For the next season.
Speaker 1: Finally, turning to the next slide, in our progression to further enhance our business worldwide and develop top performing genetics for military portrait and new technologies, we have brought on board and62
Finally, turning to the next slide in our progression to further enhance our business worldwide and develop top.
Top performing genetics for reentry report rates.
Technologies.
We have brought on board and <unk> CEO <unk> <unk>.
Lower net of seats.
Speaker 1: Alex has led PMG's innovation and current initiatives for many years and has collaborated actively and uniquely from the PMG side on age report technology development in India.
Alex affiliate DIAM.
<unk> innovation and R&D initiatives for many years.
And has collaborated actively and meaningfully from the Dnb side on Asia for technology development in Brazil.
Speaker 1: We take this opportunity to welcome Alex to the Lefebvre family and wish him every success in his new position.
We take this opportunity to welcome Alex and his family and wish him every success in <unk>.
This new position.
Speaker 1: This concludes my prepared remarks. I will now turn the phone over to our CFO , Enrique Lopez-Lagunre, to discuss our fiscal second quarter financial results.
This concludes my prepared remarks, I will now turn the call over to our CFO Enrique Lopez Macquarie.
As we discuss our fiscal second quarter financial results and.
In Egypt.
Speaker 1: Thanks, Rodrigo. Good day to everyone. Thank you for joining us for our presentation. Let's turn to slide 10 as we go to our financials for the last quarter.
Thanks already gone good day to everyone and thank you for joining us for our presentation.
Turn to slide 10, as we go through our financials for the last quarter.
Speaker 1: In the second quarter, we continue to have strong revenue momentum, with comparable revenues increasing by 89% year-over-year to $90.3 million.
In the second quarter, and we continue to have strong revenue momentum with comparable revenues, increasing by 89% year over year to $93 million.
Speaker 1: Part of this increase is explained by a weak comparable as last year's second quarter numbers were negatively affected by drought in key regions of South America.
Part of this increase is explained by a weak comparable as last year's second quarter numbers were negatively affected by drought in key regions of South America.
Speaker 1: However, year-to-date growth reached 72% and growth in the last 12 months showed a solid 56% increase, jumping to $262.6 million, which confirms robust growth dynamics that go far beyond
However year to date growth reached 72% and growth in the last 12 months showed a solid 56% increase.
Jumping to 262 $6 million, which confirms robust growth dynamics that go far beyond.
Levels.
Speaker 1: The main drivers behind the corpus numbers are remarkable commercial performance and market penetration of scaling technology.
The main drivers behind the quarter's numbers are a remarkable commercial performance and market penetration of scaling technologies.
Speaker 1: Macari fertilizers in particular continued to deliver growth in Argentina, while inoculant and seed treatment pack sales were outstanding in North America and Europe .
Korea fertilizers in particular continued to deliver growth in Argentina, while industrial and seed treatment pack sales were outstanding in North America and Europe .
Speaker 1: Let's please move to slide 11 to take a closer look to our baseline business profitability performance on an LTM basis and year to date.
Let's please move to slide 11.
We take a closer look to our baseline business profitability performance on an LTM basis, our year to date.
Speaker 1: After reference, BBSC beta excludes HB4 pre-launch costs, which are expensed as incurred and accounted for in SG&A and other income or loss.
After reference baseband business EBITDA excludes H before prelaunch costs, which are expensed as incurred and accounted for in SG&A and other income or loss.
Speaker 1: those income statement line items that impact are reported, adjusted, and damaged.
Both income statement line items that impact our reported adjusted EBITDA metric.
Speaker 1: As we have made headway since scaling up the HP4 program to build seed inventories for commercial launch, expenses related to pre-launch efforts have ceased to be irrelevant relative to our reported EVDA as they have been until last quarter, making it necessary to have a profitability metric that grasps performance of the underlying business that generates Perin
As we have made headway seen scaling up the <unk> hundred four program to build inventories for a commercial launch expenses related to prelaunch efforts, perhaps to be irrelevant.
Through our reported EBITDA as they had been in the last quarter, making it necessary to have a profitability metric that graphics performance of the underlying business that generates revenues correct.
Speaker 1: The three main components of the expenses that are stripped out from the Baseline Business EBITDA calculation are HP4-related SG&A, battering inventory ramp-up and has a bitcoin lifecycle for those 5 beta components.
The three main components of the expenses that are stripped out from the baseline business, if you get that calculation or <unk>.
H before related SG&A.
Inventory ramp up and data acquisition costs.
Speaker 1: and IAS 29 accounting adjustments to HV4 brain inventories. And we are providing a breakdown for each of these categories, both in the presentation and our press.
Ias 29, accounting adjustments to HD for green in the dose.
And we are providing a breakdown for each of these categories. Both in the presentation and our press release to.
Speaker 1: To the numbers, following the growth trend in revenues, the last of the month's baseline business, Elita, reached $61.8 million in the second quarter, as Federico pointed out, up 46% year over year.
So the numbers following the growth trend in revenues. The last 12 months baseband business EBITDA reached $61 $8 million in the second quarter, Australia pointed out up.
46% year over year.
Speaker 1: On a sequential basis, LTM-based time business IDA grew 15%. In line with the upward trend we have seen for the past four quarters.
On a sequential basis LTM baseline business EBITDA grew 15% in line with the upward trend we have seen for the past four quarters.
H before pre launch costs during the last 12 months amounted to $6 3 million of which close to attack.
Speaker 1: HB4 pre-launch costs during the last 12 months amounted to $6.2 million, of which close to half correspond to inventory ramp-up and data acquisition costs, and $1.4 million were general expenses related to the management of the HB4 program.
Correspond to inventory ramp up on data acquisition costs and $1 $4 million were general expenses related to the management of the <unk> program.
Speaker 1: The remaining $1.9 million were not cash expenses, but the accrual of a negative accounting adjustment from IAS 29 application to HV4 grain inventory.
The remaining $1 $9 million were not cash expenses, but the accrual of a negative accounting adjustment from Ias 29 application to HP for grain inventories.
During the first half of the fiscal year. Our baseline. This has reached $37 million and adjusted EBITDA of 48% increase compared to a year ago period.
Speaker 1: During the first half of the fiscal year, our baseline business reached $37 million in adjusted VITA, a 48% increase compared to the year ago period.
Speaker 1: HB4 pre-launch costs for the first half stood at $4.9 million. Importantly, while the FG&A portion of the HB4 pre-launch costs has a relatively steady run rate throughout the year, inventory ramp-up and data acquisition costs can be lumpy, as its accrual depends mainly on when farmers choose to set a price to grain they provide us with, as well as our own ability to commercialize grain that will not be used for seed purposes.
<unk> hundred <unk> prelaunch costs for the first half stood at $4 9 million importantly, while the SG&A portion of the HMA for prelaunch costs.
Roughly steady run rate throughout the year inventory ramp up on data acquisition costs can be lumpy as Chuck will depends mainly on when farmers choose to set a price to grain they provide us with as well as our own ability to commercialize brain that will not be used for <unk> purposes.
Speaker 1: I will refer to the specifics behind the second quarter's performance in the next slide.
We refer to as specifics behind the second quarters performance in the next slides.
Speaker 1: But as a summary for this one, I believe that we had a great quarter that's built from the top of the momentum we have seen in our baseline business for almost a full year now. It is exciting to think about the prospect of adding to this business the $15 to $20 million in EBITDA contribution from HB4 wheat that we believe we can accomplish by fiscal year end 2024. We have now tested our wheat varieties at a broad scale and received good feedback from growers regarding ROI.
The summary for this one I believe that we had a great quarter.
Top of the momentum we have seen in our baseline business for almost a full year now.
It is exciting to think about the prospect of adding to this business the $15 million to $20 million EBITDA contribution from Asia for wheat, but we believe we can accomplish by fiscal year end 2024.
Now tested our wheat varieties had a broad scale.
Good feedback from growers regarding ROI.
Speaker 1: which makes us feel comfortable with the opex we're putting into the pre-launch of HP4.
Makes us feel comfortable with the Opex, we're putting into the relaunch of <unk>.
Speaker 1: Now let's turn to slide 12 for breakdown by business.
Now, let's turn to slide 12 for a breakdown by business segment.
Speaker 1: As mentioned before, comparable revenues increased to $90.3 million in the second quarter, up from $47.7 million a year.
As mentioned before comparable revenues increased to $93 million in the second quarter up from 47 $7 million a year ago.
Speaker 1: Almost half of this growth came from the crop nutrition segment, which grew by $19.3 million, more than tripling its revenues.
Almost half of this growth came from the crop nutrition segment, which grew by $19 $3 million more than tripling its revenues.
Speaker 1: It was an outstanding performance in the quarter, both for fertilizers and in hockey.
It was an outstanding performance in the quarter, both for fertilizer setting in op units.
Speaker 1: Micro-ease fertilizer sales grew aggressively in Argentina, which explained most of the nine and a half thousand tons sold during the quarter.
<unk> fertilizer sales grew aggressively in Argentina, which explain most of the $9 5000 tons sold during the quarter.
Speaker 1: Demand generation work done in the last two years paid out as commodity fertilizer prices continued on an upward trend, offering great market conditions to scale up our own product.
Demand generation work done in the last two years paid out of commodity fertilizer prices continued on an upward trend offering great market conditions to scale up our RNG product.
Speaker 1: Also, high inoculant sales were seen across several geographies, in particular Europe , where soybean acreage increased, and Brazil, where our long-life inoculant formulation continues to represent a competitive advantage and drive expansion.
Also hiring upfront sales were seen across several geographies in particular, Europe or soybean acreage increased and Brazil, where our long life inoculum formulation continues to represent a competitive advantage and drive expansion.
Speaker 1: Importantly, the increase in crop nutrition revenues also came with a gross margin expansion given the positive market conditions and economies of scales in micro-grid fertilizers and a broad mix shift in occupants to higher value products such as LLI.
Importantly, the increase in crop nutrition revenues also came with the gross margin expansion given the positive market conditions and economies of scale micro <unk>.
And a broad mix shift documents through higher value products such as <unk>.
Gross margin was 54, 1% for the segment compared to 57% a year ago.
Speaker 1: Gross margin was 54.1% for the segment compared to 50.7% a year ago.
In the seat and integrated product segment.
Speaker 1: came from higher pack sales in Europe , the US, Uruguay and Argentina. Same as inoculants, pack sales also benefited from Europe's rise in soybean acres.
Hi, Shannon gained from higher pack sales Europe , the U S, Uruguay, and Argentina stainless and documents <unk> sales also benefited from Europe's rice and soybean acreage European growth was also leveraged by new commercial agreements while growth in the United States.
Speaker 1: European growth was also leveraged by new commercial agreements, while growth in the United States was mainly explained by changes introduced in the commercial team.
Mainly explained by changes introduced in our commercial team.
Speaker 1: Segment sales grew by $3.1 million to $15.3 million, a 26% year-on-year increase, with a gross margin expanding to 68.9%.
Segment sales grew by $3 1 million to $15 $3 million or 26% year on year increase gross margin expanding to 68, 9%.
Speaker 1: Finally, crop protection saw a 76% increase in revenues, contributing $20.1 million to total revenue growth. It was the only segment that brought growth with a decline in gross margin, as expansion in sales was driven by lower margin third-party products. Something to be expected following the split of commercial teams that focus on third-party products versus proprietary performance.
Finally core protection saw a 76% increase in revenues contributing $21 million to total revenue growth.
Was the only segment that broad growth, we're very client gross margin expansion in sales was driven by lower margin third party products something to be expected. Following the split of commercial teams that focus on third party products versus proprietary portfolio.
Speaker 1: In slide 13, we can see how this translated into gross profit contribution per segment. Compiled gross profit increased by 69% over year, reaching $42.2 million.
In slide 13, we can see how this translated into gross profit contribution per segment comparable gross profit increased by 69% year over year, reaching $42 $2 million.
Speaker 1: The competition segment contributed close to two-thirds of the total $17.2 million increase in gross profit, with an impressive 233 percent growth driven by increased sales and margin expansion after describing the preceding flight.
The compensation segment contributed close to two thirds of it totaled $17 $2 million increased gross profit.
An impressive 233% growth driven by increased sales and margin expansion as I described in the preceding slide.
Crop protection and see an integrated product segments contributed 23% and 15% respectively to the overall gross profit growth.
Speaker 1: Crop protection and fuel-integrated product segments contribute 23% and 15% respectively to the overall gross profit growth.
Despite all regions nominally growing contributions gross profit compared to a year ago quarter.
Speaker 1: Despite all regions' nominally growing contributions to gross profit compared to a year ago quarter, Europe and North America stood out, contributing jointly 23% of the gross profit growth and representing 15% of the total $42.2 million in gross profit, up from 11% in the second quarter of the prior fiscal year.
Europe , and North America stood out contributing jointly 73% of the gross profit growth and representing 15% of the total of $42 $2 million and gross profit up 11% in the second quarter of the prior fiscal year.
Speaker 1: Let's move on to slide 14 for a breakdown of the quarterly EBITDA. Our baseline business adjusted EBITDA reached $22.7 million, up 57% from the year-ago quarter, which is a week comparable to a very strong performance as explained before. We had an aggressive EBITDA growth as a result of top-line expansion, partially offset by the increasing gross margin.
Let's move on to slide 14 for a breakdown of the quarterly EBITDA, our baseline business adjusted EBITDA reached $32 $7 million up 57% from the year ago quarter.
You saw a weak comparable to a very strong performance as explained before.
We had an aggressive EBITDA growth as a result of top line expansion, partially offset by a decrease in gross margin.
Speaker 1: increased operating expenses and IAS 29 adjustments to gross profit.
Increased operating expenses.
<unk> nine adjustments to gross profit.
Speaker 1: Operating expenses, excluding pre-launch HB4-SGMA, increased by $7.3 million, explained by a mix of higher variable and fixed costs.
Operating expenses, excluding prelaunch H before SG&A increased by $7 $3 million explained by a mix of higher variable and fixed costs.
Speaker 1: Variable expenses such as sales taxes and price increased in line with sales growth and expending roughly one third of the total increase.
Variable expenses, such as sales taxes on price increased in line with sales growth.
Roughly one third of the total increase.
Speaker 1: fixed expenses on the other hand were negatively affected by effects and inflation in Argentina, a dynamic that has continued to develop unfavorably to dollar-denominated business such as ours for the fourth consecutive quarter affecting our cost structure in the country operations not only in SGA but also cost of goods sold.
Fixed expenses on the other hand were negatively affected by FX and inflation in Argentina is INR make that has continued to develop favorably and dollar denominated business such as ours.
Consecutive quarter affecting our cost structure in the country operations not only SG&A, but also cost of goods sold.
Speaker 1: JB results went up by $1.1 million compared to the second quarter of fiscal 2021, mainly due to higher Sinotex sales or micro-use fertilizer manufacturing JB.
JV results went up by $1 1 million compared to the second quarter of fiscal 2021, mainly due to higher <unk> sales, our microwave fertilizer manufacturing JV.
Speaker 1: HB4 pre-launch costs total $3 million in the quarter, leading to a reported adjusted EBITDA of $19.7 million.
H before prelaunch costs totaled $3 million in the quarter, leading to a reported adjusted EBITDA of $19 $7 million.
Now lets please turn to slide 15 to address our debt evolution cash position before turning you over to <unk> for final remarks.
Speaker 1: Now let's please turn to Slide 15 to address our debt evolution cash position before taking over to Puerto Rico for final demand.
Speaker 1: Total debt has been increasing in line with the growth of the business. Net debt by quarter end was $147.9 million.
Total debt has been increasing in line with the growth of the business net debt by quarter end was $147 $9 million.
Speaker 1: a 2.66 ratio of net debt to LTM adjusted beta.
$2 66 ratio of net debt to LTM adjusted EBITDA.
Speaker 1: On a sequential basis, our leverage ratio decreased from 2.74 in the first quarter due to LPM-adjusted EV tag growth.
On a sequential basis, our leverage ratio decreased from $2 74 in the first quarter due to LTM adjusted EBITDA growth.
Over the last year, we have been working on a debt structure that supports the growing base of business in Manhattan.
Speaker 1: Over the last year, we have been working on a debt structure that supports the growing basement business and an upcoming HB4 launch with two goals in mind. To decrease the current portion of total debt and to reduce cash financial expenses. On the first, we have decreased the short-term portion of our debt from 54% by the end of the year goal quarter to almost 25% by December 2021. On the second goal, we have increased the short-term portion of our debt by a total of $3.5 million.
H before launch with two goals in mind.
The current portion of total debt.
To reduce cash financial expenses first.
We have decreased the short term portion of our debt from 54% by the end of the year ago quarter to almost 25% by December 2021.
On the second goal despite the growth in total debt.
Speaker 1: which reached $187.8 million. Our cash financial interest expense line remained roughly flat at $13.4 million for the last 12 months as of December 2021.
Which reached 187 $8 million or cash financial interest expense line remained roughly flat at $13 $4 million for the last 12 months as of December 2021.
Speaker 1: During the quarter, our superiority selected Argentina completed a $20 million public offering of corporate bonds maturing in December 2024 and paying an annual nominal interest rate 1.49%.
During the quarter, our subsidiary select Argentina.
<unk> completed a $20 million public offering of corporate bonds maturing in December 2024, and paying an annual nominal interest rates 149%.
Speaker 1: These issues allowed us to maintain a strong equity position of almost $40 million by quarter end and further improve our average cost of...
This issuance allowed us to maintain a strong liquidity position of almost $40 million by quarter end.
Further improved our average cost of debt.
Speaker 1: By way of conclusion, I believe that the strong financial performance of our baseline business, combined with a stable and very healthy debt structure and utility position, provides a strong foundation for growth.
By way of conclusion, I believe that the strong financial performance of our baseline business combined with a stable a very healthy debt structure, an easy position.
<unk> has a solid foundation for growth.
Speaker 1: We are excited about what is to come next as we aim for the EBITDA contribution that we have identified for HB4 Week by fiscal 2024. And with our minds set in the much bigger global opportunity that we'd represent beyond that specific target.
We are excited about what is to come next SBA for the EBITDA contribution that we have identified four H before week by fiscal 2024.
Our mindset is a much bigger global opportunities, but we percents.
Specific target.
Speaker 1: Thanks, NTT. I think we can now open up the call for Q&A. And after that, I'll finish with some final remarks. All picture in here.
Thanks.
Okay I think.
We can now open up the Gulf for Q&A.
After that I'll finish with some final remarks operator.
Speaker 2: Perfect, thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you wish to withdraw your question, please press star two. When preparing to ask a question, please ensure that your line is unmuted locally.
Perfect. Thank you.
If you'd like to ask a question. Please press star followed by one of your telephone keypad.
We wish to withdraw your question. Please press star one.
I wanted to ask a question. Please ensure that your line is likely.
Speaker 2: And our first question comes from Ben Cleave from Lake Street Capital Markets. Please go ahead.
And our first question comes from Ben can you from Lake Street Capital markets. Please go ahead.
Alright, Thanks for taking my questions. This morning, and first of all congratulations on a great quarter.
Speaker 3: All right, thanks for taking my questions this morning and first of all congratulations on a great quarter. The first question is around the launch of HB4 wheat. I'm curious...
First question is around the launch of HB for wheat.
I'm curious.
Speaker 3: the degree to which there are downstream buyers secured after harvest. Do farmers that are buying your seed have guaranteed offtake agreements for millers? And do those millers have offtake agreements with consumer goods companies? Or is that something that still is yet to be determined?
Degree to which there are buyer downstream buyers secured after harvest do farmers that are that are buying or seed.
Have guaranteed offtake agreements from Miller's into those Millers have offtake agreements with with consumer goods companies or is that something that still is yet to be determined.
Speaker 3: Hi, Ben. This is Federico. Thanks for joining us today and thank you for your question.
Hi, Ben.
Equal thanks for joining us today and thank you for your question so.
Speaker 1: So we have been working actively to create the agreement with processors.
We have been working actively to create that the agreement with processors as we look into the next season.
Speaker 3: as we move into the next season and commercially launch.
Commercially launch H before we'd we will continue to handful with our farmers. So that we minimize any kind of commercial disruption.
Speaker 1: HB4 weed, we will continue to handhold with our farmers so that we minimize any kind of commercial disruption.
Speaker 4: And as of today, we have already 13 different processors onboarded.
And as of today, we have already started seeing different processors onboard it.
Speaker 4: or in the process of onboarding for processing HP for a week.
We're in the process of Onboarding for processing HV for wheat.
Speaker 4: with a capacity combined, or a combined capacity I should say, of about 700,000 tons.
Capacity combined were a combined company suggested sale of about 700000 tonnes, which is way in excess of what we would need for the upcoming season, So thats being added.
Speaker 4: which is way in excess of what we would need for the upcoming season.
Speaker 4: negotiated, put in place, and that is an aspect that we will continue to solve for our customers.
Negotiate it put in place and that is an aspect that we will continue to solve for our customers.
Speaker 4: understanding the complexity behind this new technology on the commercial front.
Understanding the complexity behind these new technology on the commercial trucks.
Speaker 3: Perfect. Thank you, Federico. Next question on, I appreciate your comments on kind of, you know, moving from first to second to third generation varieties here to reduce, you know, the, the, you know, to improve the genetics, the underlying genetics. I'm curious
Perfect.
Thank you Federico next question on <unk> I appreciate your comments on kind of moving from first to second or third generation varieties here to reduce.
The.
To improve the genetics the underlying genetics.
I'm curious.
Speaker 3: how that is playing out in soybean within the US. Do you expect that you're going to see that same kind of genetic gap with your first generation HB4 seed that you've been testing in the US? And if so, how are you addressing that to improve the genetics in the US proactively?
How that is playing out and soybean within the U S are you do you expect that youre going to see.
That same kind of genetic gap, what's your first generation <unk> that you've been testing in the U S and if so how are you addressing that to improve the generics in the U S proactively.
Yes.
Speaker 4: So that's an excellent question as well, Ben. I think in the US, since we didn't have a breeding program of our own, and we relied more on third party genetics.
So that's an excellent question as well then I think in the U S. Because we didn't have a.
Bringing program of our own.
Relied more of third party genetics, we are less likely to observe that genetic gap.
Speaker 4: we are less likely to observe that genetic gap. I think we will be infagressing the trade into already competitive germ plasm. We are infagressing already the trade into competitive germ plasm. So we don't expect to see the gap that we saw in Argentina. And also this is a strategy where in
We will be in progressing the trait into already competitive germplasm.
We are in servicing already that trait into competitive germ plasm.
So we don't expect to see the gap that we saw in Argentina.
And also this is a strategy where.
Speaker 4: expanding into in Argentina as well. So you will see that the onboarding of Alex, Alex Gafsir as head of SEEDS, is predominantly to focus on the new green approach and rely on the outstanding genetics of current market participants so that we minimize sort of the term class and gap in new markets as we roll out the technology globally.
Expanding in Argentina, as well so you will see that.
Homebuilding of Alex.
Alex <unk> head of seats.
The dominant need to focus on the new breeding approach and relied on the outstanding genetics of current market participants so that we minimize sort of the.
John glass and gaps.
In new markets as we rollout the technology globally.
Got it got it.
Speaker 3: you know, I'm not sure if you're going to get the results. Perfect. Thanks, Federico. Last one for me. I'll get back in Q and I don't know Enrique Federica who this is more appropriate for, but. You know the results of the last four quarters here as you change the go to market strategy, you know, just been exceptional, but those results are are lapping. And so you know, as you look, you know, into into Q3 and beyond. When you've got, uh, to your prior year results, you know, how do you see?
Perfect. Thanks Federico.
One for me and I'll get back in queue, and I don't know, if Enrique or Federica, who this is more appropriate for but.
The results over the last four quarters here as you choose.
The go to market strategy, just been exceptional but those results are lapping and so as you look into.
Into Q3 and beyond.
When you've got.
When you've got that strategy already built in to your prior year results, how do you see.
Speaker 3: growth evolving over the next few quarters. I'm a user still.
Growth evolving over the next few quarters.
Still runway to be had from from this new go to market strategy or are you guys expecting.
Speaker 3: runway to be had from this new go-to-market strategy or are you guys expecting a more material decline on a year-over-year your growth from a year-over-year basis?
Kind of the more material decline on a year over year growth from a year over year basis.
I will give you my high level view on that and then Lisa can give you more detail.
Speaker 4: I will give you my high level view on that and then we can probably give you more detail. I do expect to see a similar momentum in the third quarter. So there's still a long way from the existing reorganization to be materialized. Probably a little less from that particular aspect on the fourth quarter. But I do expect international growth to continue on a very robust scale.
We expect to see a similar.
Our momentum in the third quarter. So there is still a long way from the existing reorganizations that materialized.
While you do less from that particular aspect on the fourth quarter.
And we expect international growth to continue on a very robust.
Speaker 4: manner and we do expect H3-4 to kick in in the fourth quarter as well, helping keep the momentum that we currently have. So I'm sort of very happy with the growth trajectory that we've been having and fairly confident that we can keep this momentum in the next two quarters.
And we do expect phase III for to gain in the fourth quarter as well.
<unk>.
Keep the momentum that we currently have so.
Im very happy with.
The growth trajectory that we've been having and family.
Confident that we can keep this momentum in the next two quarters.
Yes.
Speaker 1: Yeah, I agree with the Rinko's comments. Hi, Ben, great to speak to you again. I think that there are some...
Politicos comments Hi, Ben.
Speak to you again.
I think that there are some.
Speaker 1: variables that played into how we were able to grow throughout the last year. One of those are market conditions. So we have very, very attractive market conditions out of the fact.
But most of it relating to how we were able to grow throughout the last year. One of those are if market conditions. So we have very very attractive market conditions out of the factory.
Speaker 1: that fertilizer prices, for example, went up, and that gave us a great setup to go with our product to market. So I think that as long as those conditions remain in place, we're going to be able to do.
Okay.
For example went up.
Gave us a great setup to go with our product to market.
So <unk> got to assume that those conditions remain in place, we're going to be able to improve too.
Speaker 1: to keep showing growth, maybe not as aggressively as what we did until now, but there is still runway ahead, but there's some of the variables that helped us that are obviously outside of the control of management. So still tools in the toolkit to keep growing as long as market conditions are there. And I think that the Australia Convention as well, we're excited about to have other growth levers to pull with HB4 with peaking in.
To keep showing growth, maybe not as aggressively with us what <unk> now but.
There is still runway ahead.
But there is some of the value with the helped us but.
Our August the outside of the control of management right. So.
Field tools in the toolkit to keep growing somewhat as market conditions are there.
And I think that Australia convention as well, we're excited about to have other growth levers to pull like ground, we basically for.
Damian.
Speaker 3: Got it. Got it. Very encouraging. Well, I appreciate you all taking my questions. It does it for me, and I'll jump back in queue.
Got it got.
Got it very encouraging.
Great you all taking my questions that does it for me and I'll jump back in queue.
Speaker 2: Thank you Ben for your question and as a reminder if you would like to ask a question please press star followed by one on your telephone keypad.
Perfect. Thank you for your question and as a reminder, if you would like to ask a question. Please press star followed by one on your telephone keypad.
Speaker 2: And our next question comes from Brian Wright from Wealth Capital Markets. Please go ahead, your line is open.
And our next question comes from Brian <unk> from Roth Capital markets. Please go ahead. Your line is open.
Speaker 5: Thanks, good morning. A couple of questions. I want to start out with if you could just educate us on the relevance of the yellow rust and what that means from a commercial standpoint.
Thanks, Good morning.
Couple of questions I wanted to start out with if you could just educate us on the relevant survey of the yellow box.
From a <unk>.
Commercial standpoint.
Okay.
Speaker 4: Hi, Brian . It's good to have you on the call. I think it's obviously a concerning aspect to the farmers, mostly on the commercial front. I mean, consumers don't like to see what...
Hi, Bryan speak to how the Nicole I think it's it's obviously concerning aspect to the farmers and mostly on the commercial front consumers don't like to see rust in.
Speaker 4: in the flower or in the grain that will be processed and I think that that was an unexpected outcome of these new varieties that the rust incidence was significantly diminished. So, we expect that to enable more profitable commercialization from a yield perspective in the field. It's an important sanitary aspect but not too dramatic I should say.
In the flour invigorating that will be processed at I think that was an unexpected outcome of these new varieties.
The Rusty incidents was significantly diminish so we expect that to enable.
More profitable commercialization from yield perspective in the field.
It's an important incentives that he aspect.
Got that.
Not that I'm, not a big I should say.
Speaker 5: Okay, and then just following up a little bit on the improvement on the test weight, is there any quantification you want to help us out with on that?
Okay.
And then just following up a little bit on the improvement on the test weight.
Is there any quantification.
Help us out with on that.
Speaker 4: Sure, I think that's something we observed with a significant number of farmers, particularly in the southwest.
Sure I think that's something we observed.
With.
A significant number of farmers, particularly in the southwest.
Speaker 4: of Buenos Aires where we are currently having some of the better results on HV4 technology. These are regions that have very restrictive activity and many times with production goes into Congress by far.
Of where the site is where we are currently having some of our better results on AC four technology. These are.
Regions.
That has very restrictive for.
Many times with product singles into Florida.
Speaker 4: The quality components here announced that we could go into industrial uses. I think this way pH and other elements.
Quality component this year allows us that need to go into.
Industrial users.
I think the best way.
Ph.
Other elements combined.
Speaker 4: combined and provide for that in that particular region in a manner that is very relevant. So it's not only about improving on the time per hectare.
For like for that.
In that particular region.
In a manner that is very relevant so it's not only about <unk>.
<unk> tons per Hector.
Speaker 4: viewpoint, but also the quality of what's being produced allows for an end use that is more profitable than deviating to forage because of reduced test weight. I think the improvement was...
Viewpoint, but also the quality of what's being produce allow us for an end use that is more profitable.
Deviate into four rigs because of reduced earthquake I think.
The improvement was.
Speaker 4: above 10 percent which is significant in this particular aspect.
About 7%, which is significantly in these particular assets.
Great.
Speaker 5: Great, great. That's perfect. Thank you. A couple more. I just wanted to understand, on slide seven on the market opportunity in Argentina, on the 2.3 million hectares, is that...
Perfect. Thank you.
More I just wanted to understand.
On slide seven on the market opportunity in Argentina.
Could you on the $2 3 million Hector.
Yes.
<unk>.
Is that.
Speaker 5: acreage that's lower yielding predominantly or just like you know how that you know that addressable market was kind of
Acreage that more lower yielding predominantly or is it just like that.
How that.
That addressable market what kind of.
Defined.
Speaker 4: So those are hectares where we believe HV4 will provide a consistent benefit.
So those are factors, where we really rates before.
We'll provide a consistent benefit so they're usually lower yielding.
Speaker 4: So they are usually lower yielding. And that is not to say that we're not expecting, particularly as we introduce the second gen varieties which we have presented in today's presentation, I think we can aspirationally target the high productivity areas as well.
And.
That is not to say that we're not expecting particularly ethylene produced the second Gen varieties, which we have presented in today's presentation I'd say, we've got aspiration and targets the highest growth areas as well, but we are not currently contemplating that today in our market assessment. So.
Speaker 4: but we are not contemplating that today in our market step by step.
Speaker 4: We are almost restricting the technology to lower productivity regions and that's where the number comes.
We are almost restricting the technology to the lower productivity regions and Thats, where the number comes from.
Perfect in Q2, more if you'll bear with me.
Speaker 5: Perfect. And two more if you'll bear with me. Or I could go back into you, but I'd like to just go with them if that's OK. Yeah, go ahead.
Or I could go back in queue, but but I'd like to just.
Go go with them if that's okay.
Sure.
Thank you.
Speaker 5: Can you remind us on kind of what the historic close markings are from tools between the adjuvants versus the insecticides and the fungicides? Could you status Philip Brian ?
Can you remind us on kind of what the historic gross margin differentials between the adjuvant versus in insecticides and fungicides.
This is broad ballpark.
In terms of.
Speaker 4: in terms of what are the different product characteristics?
What are the different product characteristics.
Gross margin differentials.
Speaker 4: So, Agilent tends to be our highest cross-margin product in the cross-protection segment. And, Reza, do you want to comment on the risk? Yeah, absolutely. So, Agilent, we are in the range of 55 to 65. Usually, Brian , depending on what type of Agilent, whether it's high-tech, high-tech, or lower-tech.
So RJ runs tend to be our highest gross margin products in the crop protection segment, where they did you want to comment on the risk yes, absolutely. So.
We are in the range of 55 to 65, you shouldnt be Brian depending on what type of are doing whether it's a high tech Osborne or lower tax base from vegetable oil not silicon, but most of our adjuvant for high Tech and that is closer to towards the 65% of the range, but I just said that.
Speaker 1: based on vegetable oil and not silicon, but most of our arguments for high tech and that is closer to towards the 65% top of the range that I just said.
Speaker 1: Then on insecticides and fungicides, obviously there is a lower category. I think there is a lower category in the segment that basically explains...
Insecticides and fungicides, obviously, there is a lower category I think the lower category in this segment, but basically explains.
Speaker 1: the declining overall gross margin for quarter on the third party products.
The decline in overall gross margin for the quarter or the third party products and third party products.
Speaker 1: we make between 25 to 35 percent margin, sometimes even higher if it's a highly tech sale that needs to be done.
Make between 25% to 35% margin, sometimes even higher.
Heidi.
Sales that needs to be done.
Speaker 1: But it is a business that is tactical to us. It's not strategic, and we usually pay less attention to that. Now we've focused a bit more on that, and I think that to us is, I won't say no hand fruit because it does require a commercial effort. But it's a provider of revenues with a margin between 25 to 35. That's the range for the whole thing.
But it is a business based tactical to us smart strategic and we usually pay less attention to that now we've focused a bit more on that and I think.
That to US is I won't say low hanging fruit because it does require a commercial effort, but it's it's.
Provider of revenues with a margin of between 25 to 35, that's the range for the whole segment.
Speaker 4: I think the only thing we should highlight here is that that is what we're talking about chemicals. If you talk about bio insecticides or in our case, bio fungicides like vitamin and soft
Or anything we should highlight spirit.
That is where we are talking about chemicals, if you're talking about buyers active sites or in our case by our fungicides like heavy so that amount of gross margin is more similar to that of our biological products. So that's upwards of 60%. So absolutely here when we're talking about proprietary bio insecticides or Biopharma decides.
The margin is more tilted towards what we make on the documents and Ctrip index.
Perfect. Thank you and just last one if I can.
Speaker 5: Perfect, thank you. And just last one, if I can. What was that recent acquisition kind of revenue in the quarter?
What was that recent acquisition kind of revenue in the quarter.
You are meaning.
Speaker 4: You are meaning the one associated to the reorganization of the crop protection segment with the use of the each flag in Salesforce.
The one that's specific to the reorganization of the crop protection segment with the use of the east leg of the sales force.
Speaker 5: Yeah, the one that was, um, came on board, I think it was last quarter.
Yes, the one that.
With.
Came onboard I think it was last quarter.
Yes.
Speaker 1: Yeah, absolutely. Like Federico said, Ryan, that is part of our reorganization. I mean, it's a commercial entity that takes care of basically half the sales force that is specifically dedicated to commercializing third-party products across the main regions in Argentina. They do have some, we do have now some own stores. But it basically focuses on low margin, low margin, a 25% to 35% range type of product.
Yes, absolutely like 30% and Ryan that is part of our reorganization I mean.
Commercial entity that they scale are basically types of Salesforce studies, specifically dedicated to commercializing.
The broad across the main regions in Argentina. They do have some we do have now some owned stores, but basically focuses on low margin.
Low margin, 25% to 35% range type of products.
Speaker 1: that came on board a couple of quarters ago. They took over the commercialization of the third party products that our Risolactar Salesforce did before, and that allowed the Risolactar Salesforce to focus more on international growth and also in the micro-use product.
That came on board a couple of quarters ago.
He took over the commercialization of the third party products that already selected their sales force feedback.
Before I got on out the results of our sales force to focus more on international.
And also in the microwave fertilizers.
Speaker 1: That was shown was probably had a run rate in the previous quarter, in the second quarter of the previous fiscal year of about $8 billion. And it grew significantly now in our hands.
That was shown.
Fourth priority had a running rate in the previous quarter.
For the second quarter of the previous fiscal year of about $8 million.
And it grew significantly now in our hands.
Speaker 1: almost twice, right? Yeah, so the jump from this sort of like a jump of from $8 million to $16 million now in this particular order.
Probably almost twice the yes, so the jump from theirs.
Sort of like Jumbo.
From a from $8 billion to $60 million now.
Current quarter.
But saturday's Brian .
Speaker 5: Yeah, so it's performing that it's performing exceptionally well as well. So it's across the board. What you're integrating in is, you know, we're seeing, you know, great performance across core and acquisition revenue.
Yes. It is.
Performing.
It's performing exceptionally well as well so it's across the board.
What you are integrating and as we're seeing.
Great performance across core and acquisition revenue.
Speaker 1: Absolutely. I think that it makes a ton of sense in terms of synergies, as this commercial team that we brought on board was already commercializing some of the Visolactor products way before we made that integration. So it makes sense that we are seeing some very strong commercial synergies coming out of the interaction between the two commercial teams.
Absolutely I think that there was there was it makes a ton of sense in terms of synergies as this this.
This commercial team that we brought on board was already commercializing some of that with selective growth.
Way before we make.
That integration. So it makes sense that we are seeing some very strong commercial synergies coming out of the interaction between the two commercial teams.
Great. Thank you so much.
Thank you.
Speaker 2: Perfect, thank you Brian for your questions. Our next question comes from Ken Donovan from Brookline Capital Workers. Please go ahead.
Perfect. Thank you for your question. Our next question comes from Kevin some of that from that client capital markets. Please go ahead.
Sorry, Ken So look at it again.
Speaker 2: Sorry, Camp, we're not getting any audio from your line. Please allow your mute.
Definitely in line could you please shine.
Hello.
Hello at Canadian <unk>.
Speaker 5: Thank you. So thank you and good morning.
Thank you.
So thank you and good morning.
Speaker 5: Just to start with the growth in the E.U. and U.S. markets, could you talk a little bit more about
Just to start with the growth in the EES I'm, sorry, EU and U S markets could you talk a little bit more about.
Speaker 5: the actions you've taken to drive that, the outlook, and also a little more, and I think you mentioned the product segment, but if you could go through the opportunity across the business in those two markets that would be helpful.
The actions you've taken to drive that the outlook and also a little more.
Thank you mentioned.
The product segment, but if you could go through the opportunity.
Across the business in those two markets that would be helpful.
So thanks again for joining.
Speaker 4: So thanks again for joining. We're thrilled with what we're seeing in Europe and the US. In the US, we've been there for many years and have reorganized the Salesforce under new management.
We are thrilled with what we're seeing them in Europe and the U S. In the U S. We've seen.
There for many years.
<unk> reorganized the sales force under new management.
Speaker 4: that provided for the incremental cells that are seen today, mostly on the inopneic front and the biologicals.
That provided for the incremental sales that youre seeing today, mostly on the net front and biologicals, but are.
Speaker 4: that are our most international products, if you will. So that incremental growth in the US comes from an internal reorganization and a new manager in place that's been building or rebuilding the world.
Our most international.
Product if you will.
So that.
Incremental growth in the U S comes from an internal reorganization and a new manager in place that's been building or rebuilding the relationships.
Speaker 4: on the historical products that were sold in the US, obviously in our case.
On the historical but I'll ask Tom insult in the U S. We will see in our credits in the case of Europe .
Speaker 4: in the case of Europe .
We've been.
Speaker 4: putting a strategy in place by initially having a subsidiary so that we could secure product registrations, integrating our biological, with some of the secure products, and further consolidating some historical relationships. As you know, we are a very important partner of Xinjiang that even though that is today, both material and Argentina, it is a relationship that is expanding while other geographies.
14.
Our strategy in place by initially.
Having a subsidiary so that we could secure product registrations.
Integrating our biologicals with settlements care products and further consolidate in some historical relationships as soon as we know.
Our very important partner of Syngenta.
And even though that is today most material in Argentina. It is a relationship that is expanding to other geographies.
Speaker 4: and part of the European growth comes from that relationship as well.
And part of the European growth comes from from that relationship as well so on a forward volume basis, we expect to see.
Speaker 4: So on a forward-going basis, we expect to see similar growth, obviously not a hundred and forty-six percent quarter over quarter in every period. But we do expect these two geographies to...
Similar growth, obviously not 146%.
Over the quarter in every period.
But we do expect this to.
Geographies too.
Speaker 4: to become very meaningful. And these are huge markets. The US, actually know, for road growth in general, and Europe for biologicals, for bioportalizers that can't minimize the use or reduce the use of chemical fertilizers. I think we have a very appealing portfolio without coming registration also of our biopunjus type for the European market. So we do expect to see very strong change the genome.
To become very meaningful.
These are huge markets.
U S. As we know for row crops in general in Europe for biologicals or via fertilizer spec and minimize the use or reduce the use of chemical fertilizers I think we have.
<unk> portfolio with the upcoming registration also of our buyer fungicide for the European market. So we do expect.
To see.
Very strong performance in the quarters to come.
Speaker 1: Yeah, I would only add to that that I have the part that it makes it even more exciting is that these pre geographies, North America and Europe brought almost a quarter of the growth and growth profit. So it's not only attractive markets from the size-perfected but also markets that are very profitable to us.
I would only add to the outcome.
Part of it makes it even more exciting is that.
These two geographies North America, and Europe brought almost a quarter of the growth in gross profit. So it's not only attractive markets from the size perspective, but also markets that are very profitable to us.
Speaker 1: So that's something that the NACES put more focus on effort into building more infrastructure to keep growing. How you said that?
So.
That's something that makes us put more focus and effort into building.
More infrastructure to keep growing having said that.
Speaker 1: I think that still the conditions to be evaluated in the sort of like a context of a full season in those countries and it has just gotten started.
I think that.
<unk> evaluated in sort of like a context of the full season in those countries in the past just gotten started.
Speaker 1: So I think that we are here to see what the final result will be for the full season. And that's going to unfold in the second quarter, third quarter and fourth quarter.
So.
I think that's about where you see where the final you sold it will be for the full season and based on ounces sold in the second quarter third quarter and fourth quarter.
Speaker 5: Now, super, and in the US is this revitalized sales effort, the team you can leverage for when you roll out at the HD4 products or will that require a separate marketing effort.
Super and in the U S is this revitalized sales effort.
The team you can leverage or when you rollout.
The HD for products or will that require a separate marketing effort.
Speaker 4: I think that there might be some support from the existing team, but we are more inclined to thinking of an independent effort for the HVPOR program in the US.
I think there might be some support from the existing team but.
We are more inclined to thinking about independent efforts for the <unk> hundred four program in the U S.
Speaker 4: This is a team that specializes on biologicals, particularly seed treatment. We will obviously use the H34 channel to commercialize biologicals and seed treatments at the specificity of the seed business will require a daily marketing and commercial effort with a different level of expertise. So some synergies, some support, but for the most part, these will be two different teams.
This is a team that specializes in biologicals, particularly seek treatment. We will obviously use the <unk> hundred four channel to commercialize biologicals and seek treatment.
Specificity of the seat business will require a dedicated marketing and commercial efforts.
A different level of expertise so.
Some synergies some support.
But for the most part these will be two different themes.
Speaker 5: Great, thank you. And the guidance regarding, you know, echo weeks, very helpful. So a couple of questions related to the assumptions. First or the market opportunity, over what time frame?
Great. Thank you and.
The guidance regarding.
Echo <unk> very helpful.
So a couple of questions related to the assumptions.
First for the market opportunity.
Over what timeframe.
Speaker 5: Do you think that realization is possible? That's five years, 10 years. What you're thinking about the...
Do you think that realization as possible.
Five years 10 years.
What is your thinking about the adoption curve.
Speaker 4: So we believe it's closer to 500 then. And it's not too years out. But that's as much as I would like to say now.
So we believe it's closer to five to 10.
A subsidy is out.
<unk>.
Right.
That's as much as I would like to say now.
Speaker 5: that's fair enough. And with regard to the EBITDA guidance, what revenue does that, level of revenue does that imply?
That's fair enough and with regard to the EBITDA guidance, what revenue does that level.
Level of revenue does that imply.
Speaker 4: So you can think of these as a credit to 35%.
So you can think of lease is up 30% to 35%.
EBITDA margin business. So that you can then play with the numbers.
Speaker 4: He did a margin business. So that you can then play with the numbers and get your revenues or vice versa. Obviously, there might be some price pressure as we try to fully penetrate. So it's not like we're gonna keep steady pricing. But there might be additional technologies brought into the product offering. And so I think you can use...
Revenues or vice versa, obviously, there might be some price pressure absolutely try to fully penetrate so it's not like we are on it.
Steady pricey.
There might be additional technologies brought into a product offering.
Sure.
I think you can.
News.
Speaker 4: that to sort of play with numbers and come to some very close understanding of what we expect.
Back to sort of play with the numbers.
Come to it to some very close understanding of what we expect.
Great and that would apply to both soy and wheat.
Speaker 5: Great, and that would apply to both soy and wheat.
Speaker 1: Yeah, in general, yes. I think that margins are seemingly remembered that in the week we do some equity accounting for JD with 31% of the total insurance. But in the margin one.
Yes in general yes.
I think that.
Margins are senior remember that.
We do some equity accounting for our JV with 31 of the things that we don't do in soybeans, but.
EBITDA margin wise, yes.
So sorry.
Speaker 4: So by in soy we fully owned the technology in which part of the technology and the product was for final space, lo and on the track.
So we fully owns the technology.
Part of the technology and deploy.
Was financed by flooding on the planet.
Speaker 5: Great. And my last product, I'm sorry, my last question relates to China. There have been some regulatory changes involving GMO wheat and I'm sorry soy and corn. They appear to focus on domestic
Great and my last product I'm, sorry, My last question relates to China.
There have been some regulatory changes.
Involving GMO wheat.
And I'm, sorry, soy and corn.
They appear to focus on domestic.
<unk>.
Speaker 5: or your development of these products. Do you have any thoughts on?
Development of these products do you have any do you have any thoughts on.
Speaker 5: you know how that impacts your application. It seems like a step in the right direction, but it's very hard to determine all the everything that may be going on there.
How that move.
Impacts your application it seems like a step in the right direction, but.
It's very hard to determine all the everything that may be going on there.
Yes, absolutely I think that it is a step in the right direction. It is a step that is mostly designed for the in country cultivation process and forward.
Speaker 4: Yeah, absolutely. I think it is a step in the right direction. It is a step that is mostly designed for the in-country cultivation process and for some local developers that have today products in their pipelines that can be applied in China. Unfortunately, we have not seen sort of a...
Some local developers that have to they relax.
In there by things that can be applied.
In China.
Unfortunately, we have not seen.
Sort of.
A similar attitude towards.
Speaker 4: and the last few minutes of the year, I've seen in the rapid use of the world's international rules. So if you look at the last two things of the Chinese regulators.
International accruals. So if you look at the last two meetings of the Chinese regulators, they have mostly restricted to us too.
Speaker 4: They have mostly restricted approvals to domestic market issues that have not approved any new soil or feed-emful importation for instance. So it is a process that is difficult to act unlike what we had with Brazil's at the video that we knew every month what it would expect. The Chinese process is more difficult to drive.
Domestic market issuers that have not.
Bruce.
Sorry.
Or <unk>.
<unk> put importation for instance, so and it is a process that is difficult to that unlike what we had with Brazil shipping every year that we renew every month.
We expect.
The Chinese process is more difficult to track.
Speaker 4: We are now in the process of requesting
We are now in the process of requesting.
Speaker 4: part in the authorities to review the current application, the current approval. This is an approval that pays back to 2015. So they have seven years have passed already and we're still waiting for the Chinese clear. And so I think that this can be made for a time limitation on the Chinese cloth.
Argentine authorities to review the current.
Applicator. The current approval. This is the base back to 2015, so they have seven years have passed already.
And we're still waiting for the Chinese theory, so that I think that this can be made for a time limitation on the Chinese glass.
Speaker 4: here in Argentina, particularly for technology that has already been approved in the US in Brazil, in parallel to China, so most of the relevant production geographies without any kind of consideration to the Chinese level of the big process. So we expect the Chinese approval to come, but we are taking a more proactive stance, particularly with the Argentine
Here in Argentina.
Particularly for vertex.
So that technology that has already been approved in the U S and Brazil.
Paraguay in Canada, So most of.
They're relevant production geographies without any kind of consideration to the Chinese regulatory process. So we are at.
We expect the Chinese approval to come.
But we are taking a more proactive effects.
Status, particularly with the Argentine.
Authorities to try to remove that restriction and be able to free to commercialize <unk> Fortunately the upcoming season.
Speaker 4: offering these to try to remove that restriction and be able to freely commercialize HV4 soil in the upcoming season. Thank you very much.
Seven years is not a typical for them.
Speaker 4: No, that's not something. But I think it's enough time to make an decision. But we're cautiously optimistic, I should say, even though we need to expect this last year, but we're still waiting.
No.
But.
I think that's enough time to make a decision.
Yeah.
Sure.
We are cautiously optimistic I should say, even though we expect this last year, but we're still a.
Very good thank you.
Speaker 2: But I think you can play a question. At this time, there are no further questions and I would like to pause the call back over to the very good group of any final remarks.
Perfect. Thank you Ken for your question at this time there are nice all the questions and now I'd like to pass the call back over to have any customers for any final remarks.
Well first I want to thank everyone again for joining us today I think.
Speaker 4: Well, first I want to thank everyone again for joining us today. I think we had a very good quarter. We are very...
We had a very good quarter.
Hey.
Yes.
And to see us speak about the state of our business and the prospects ahead.
Speaker 4: And to just think about the state of our business and the prospect ahead, I mean to say, luckily we are on fire and delighted to be on fire. And hopefully we can keep on bringing similar performances in the quarters to come. So not much more. Wish everyone a happy Thursday and I'll go down to this week. Thank you.
I mean to say currently we are on fire and delighted to be on fire and hopefully we can keep on bringing senior.
Similar performances in the quarters to come.
Not much more wish everyone.
Happy Thursday, and exit them to this week. Thank you.
Speaker 2: Thank you everybody for joining today's call. You may now disconnect your lines.
Thank you everybody for joining today's call you may now disconnect your lines.
Speaker 6: So I.
Yeah.
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