4Q12 Results Conference Call - Adecoagro IR · 4Q12 Results Conference Call . 0.3 0.4 0.2 0.3 0.7...

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4Q12 Results Conference Call

Transcript of 4Q12 Results Conference Call - Adecoagro IR · 4Q12 Results Conference Call . 0.3 0.4 0.2 0.3 0.7...

4Q12 Results Conference Call

0.3 0.40.2 0.3

0.7

1.4

4.21.4

0.8

1.6

3.2 3.5

4Q11 4Q12 2011 2012

Cluster

UMA

Sugarcane Crushing 4Q & FY +8%

+90%

Sugar, Ethanol & Energy Business

Operational Performance

2

Production Mix

58% 55%41%

51%

26% 35%

37%34%

16% 10%23% 15%

2Q12 3Q12 4Q12 2012

Hydrous mix

Anhydrous mix

Sugar mix

53.4

26.2

67.5

80.4

61.1

119.3

Sugar (tons) Ethanol (m3) Energy (MWh)

4Q11

4Q12

Sugar, Ethanol and Energy Production 4Q & FY (thousand units) +50%

+133%

+77%

Sugar, Ethanol & Energy Business

Operational Performance

3

+14%

+14%

+2%

247.8

161.4

357.0281.6

183.7

362.5

Sugar (tons) Ethanol (m3) Energy (MWh)

2011

2012

245.0

46.8

235.5

75.5

2011 2012 4Q11 4Q12

2011

2012

67.9

21.7

57.3

17.5

2011 2012 4Q11 4Q12

2011

2012

235.5

63.8

272.9

119.0

2011 2012 4Q11 4Q12

2011

2012

4

Sugar Sales Volumes (thousand tons)

Sugar, Ethanol & Energy Business

Operational Performance

Sugar, Ethanol and Energy Sales 4Q & FY

554

494 538

433 Average Price US$/ton

Hydrous Ethanol Sales Volumes (thousand m3)

Anhydrous Ethanol Sales Volume (thousand m3) Energy Sales Volumes (thousand MWh)

780

634

842

576

Average Price US$/m3

100

89

86

89 Average Price US$/MWh

58.828.4

120.7

48.4

2011 2012 4Q11 4Q12

2011

2012

1081

706 878

665

Average Price US$/m3

130.3 134.8

116.6 121.5

24.4 21.0

277 282

2011 2012

Others

Energy

Ethanol

Sugar

22.6

42.3

4Q11 4Q12

109.597.5

2011 2012 5

Gross Sales FY ($ millions)

Adjusted EBITDA & EBITDA Margin FY ($ millions)

41% 36%

Adjusted EBITDA Margin

Sugar, Ethanol & Energy

Financial Performance

4Q & FY Financial Performance

+2% (11%)

29%

43% Adjusted EBITDA Margin

+87%

Adjusted EBITDA & EBITDA Margin 4Q ($ millions)

34.351.6

43.2

39.04.0

6.783

98

2011 2012

Others

Energy

Ethanol

Sugar +18%

Gross Sales 4Q ($ millions)

13,616

23,391

2011 2012

6

Sugarcane Planted Area

(hectares)

Sugarcane Plantation

(hectares)

+72% +31%

Sugar, Ethanol & Energy

Operational Performance

Agricultural Operations

65,308

85,663

12/31/2011 12/31/2012

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Ivinhema Construction Update

Sugar, Ethanol & Energy

Ivinhema Construction

(1) Assumes TJLP (Taxa de juros de longo prazo) rate will remain at 5%

Highlights

CONSTRUCTION UPDATE

Phase I completed – 2.0 million tons nominal

crushing capacity

Commercial milling operations will begin end of

April 2013

Mill will reach 4.0 million tons in 2015 and 6.3

million tons in 2017

CAPEX

$290 million invested in mill, machinery and

sugarcane plantations as of December 30, 2012

$410 million to be invested next 5 years

FINANCING

BNDES Loan approved on December 27, 2012

• R$680 million

• 10 year tenor, 2 year grace period

• 4.14% interest rate (1) in BRL

Crop 2012/2013 2011/2012

Harvest Year Harvest Year % Chg

Soybean 62,226 50,720 22.7%

Soybean 2nd Crop 29,521 42,069 (29.8%)

Corn (1) 41,443 41,193 0.6%

Corn 2nd Crop 4,537 6,217 (27.0%)

Wheat (2) 28,574 43,235 (33.9%)

Sunflower 12,478 9,596 30.0%

Cotton 3,098 6,389 (51.5%)

Total Crops 181,876 199,418 (8.8%)

Rice 35,249 31,497 11.9%

Coffee (perennial) 1,632 1,632 0.0%

Total Farming 218,757 232,547 (5.9%)

(1) Includes sorghum

(2) Includes barley

Planted Area Breakdown

79

110 107 119 123

131

25 29 29 36

48

34

14 14

48 38

61 54

2007/08 2008/09 2009/10 2010/11 2011/12 2012/13

Owned area

Second crop area

Leased area

Planted Area Evolution (thousand hectares)

Farming Business

Operational Performance

8

9

0

20

40

60

80

100

120

140

160

180

200

Sep -2012 Oct -2012 Nov -2012 Dec -2012 Jan -2013 Feb -2013

Mo

nth

ly R

ain

fall

(mm

)

2012/13 Historical Average

Farming Business

Operational Performance

Rainfall Evolution

Argentina

42.6

6.73.4

6.0

58.6

34.3

4.9

(2.4)

4.3

41.1

Crops Rice Dairy Others Farming Consolidated

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Gross Sales 2012 ($ millions)

Adjusted EBITDA 2012 ($ millions)

Farming Business

Financial Performance

147.9

83.2

19.7 19.9

270.8

196.2

93.9

18.9 13.4

322.4

Crops Rice Dairy Others Farming Consolidated

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Sold ha 3,507 8,714 4,857 5,005 5,086 2,439 9,475

Sold Farms 1 2 3 1 1 1 2

Strong Track Record of Capitalizing Gains from Land Transformation

7.6

33.1

15.2

18.8 20.0

8.8

27.5

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012

o San Jose is a 7,630 hectare farm.

o Areas with crop potential were fully transformed

and productivity of cattle areas was enhanced

o The farm was sold for $9.3 million, at a 31.4%

premium to Cushman & Wakefield appraisal.

o IRR of 31.8% in nominal US$ terms.

San Jose Sale

o Santa Regina is a 3,618 hectare farm.

o Acquired in 2002 for $625 per hectare.

o 3,200 hectares were transformed into high yielding

croppable hectares to grow crops.

o 51% was sold for $13 million, at an 11% premium

to the Cushman & Wakefield appraisal.

o IRR of 34.2% in nominal US$ terms.

Santa Regina Sale

Land Transformation Business

Financial Performance

Farmland Sales

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Adecoagro Consolidated

Financial & Operational Overview

Area & Production 2007 2008 2009 2010 2011 2012

Farming Planted Area (hect.) 80,189 139,920 153,026 183,454 192,207 232,547

Sugarcane Planted Area (hect.) 22,378 32,616 49,470 53,799 65,308 88,594

Farming Production (tons) 330,253 453,392 414,962 618,834 666,327 738,847

Sugarcane Crushing (tons) 889,355 1,376,763 2,215,029 4,066,115 4,168,082 4,488,935

Sales 2007 2008 2009 2010 2011 2012

Farming & Land Transformation 118,081 193,038 216,016 197,741 270,766 322,368

Sugar, Ethanol & Energy 24,422 51,171 97,587 204,256 258,939 269,351

Total 142,503 244,209 313,603 401,997 529,705 591,719

Adjusted EBITDA 2007 2008 2009 2010 2011 2012

Farming & Land Transformation 58,767 58,594 51,662 65,735 67,444 68,647

Sugar, Ethanol & Energy (10,146) (6,979) (26,903) 51,735 109,507 97,505

Corporate (11,435) (23,077) (22,262) (22,353) (26,885) (25,442)

Total 37,186 28,538 2,497 95,117 150,066 140,710

Adjusted EBITDA Margin

Farming & Land Transformation(1)

44.9% 24.4% 18.8% 27.6% 19.9% 17.3%

Sugar, Ethanol & Energy(1)(2) -65.0% -36.2% -39.0% 19.9% 37.1% 31.5%

Total 26.1% 11.7% 0.8% 23.7% 28.3% 23.8%

(1) Corporate expenses allocated 50% to Farming & Land Transformation and 50% to Sugar, Ethanol & Energy

(2) Calculated over Net Sales. Net Sales is calculated as Sales less sugar and ethanol sales taxes.

159.2

320.3

379.9

218.8

Debt Cash Net debt

S&E

Farming

13

Net Debt

4Q12 Debt Currency Structure

4Q12 Net debt ($ millions) 4Q12 Debt Term Structure

Total debt as of December 31, 2012,

stands at $539 million

Our debt structure increased from

60% long term to 66% during 4Q12

Net debt remains at $320.3 million

34%

66%

Short term

Long Term

59%

38%

3%

Brazilian Reals

US Dollars

Argentine Pesos

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This press release contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us

and our industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “forecast”, “believe,” “continue,”

“estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions.

The forward-looking statements included in this press release relate to, among others: (i) our business prospects and future results of operations; (ii)

the implementation of our business strategy, including our development of the Ivinhema project; (iii) our plans relating to acquisitions, joint ventures,

strategic alliances or divestitures; (iv) the implementation of our financing strategy and capital expenditure plan; (v) the maintenance of our

relationships with customers; (vi) the competitive nature of the industries in which we operate; (vii) the cost and availability of financing; (viii) future

demand for the commodities we produce; (ix) international prices for commodities; (x) the condition of our land holdings; (xi) the development of the

logistics and infrastructure for transportation of our productions in the countries where we operate; (xii) the performance of the South American and

world economies; (xiii) weather and other natural phenomena; (xiv) the relative value of the Brazilian Real, the Argentine Peso, and the Uruguayan

Peso compared to other currencies; and (xv) developments in, or changes to, the laws, regulations and governmental policies governing our business,

including environmental laws and regulations.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-

looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our

expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this press release

might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to,

inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on

these estimates and forward-looking statements.

The forward-looking statements made in this press release related only to events or information as of the date on which the statements are made in

this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the

statements are made or to reflect the occurrence of unanticipated events.

Disclaimer

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Investor Relations

Charlie Boero Hughes

CFO

Hernan Walker

IR Manager

E-mail [email protected]

Website www.adecoagro.com