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1st Quarter 2015
Earnings Webcast
May 15, 2015
DISCLAIMER
1Q15
…
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 forwardlooking 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.
2
Sugar, Ethanol & Energy Business
3
1Q15
Sugar, Ethanol & Energy Business– Rainfalls
Rainfalls in our cluster in Mato Grosso Do Sul were in line with historical average
2015 Rainfalls in Angelica/Ivinhema Cluster - Mato Gross do Sul
350
300
250
200
150
100
50
0
Jan-15
Feb-15
Mato Groso Do Sul Rains - 2015
Mar-15
15 Years Average
4
1Q15
Sugar, Ethanol & Energy Business– Sugarcane Crushing
Significant increase in crushing due to earlier start of harvest, completion of
Ivinhema mill and availability of sugarcane
Sugarcane crushing 1Q15
(In Thousands Tons)
Mill Starting Dates
Cluster Operational Metrics
2014
2015
Mill
Harvest
Harvest
∆ Days
Angelica
March 26
March 11
15
Ivinhema
April 25
March 16
40
460
918%
Cluster Operational Metrics
Metrics
1Q15
1Q14
% Change
Total Days
37
6
517%
Effective Milling Days
28
4
675%
460.1
45.2
918%
Total Crushing ('000 tons)
45
1Q14
1Q15
5
1Q15
Sugar, Ethanol & Energy Business– Sugarcane Planting
Sugarcane expansion slow down as we approach full capacity
Sugarcane Plantation
Sugarcane Planting 1Q15
(hectares)
(hectares)
126,866
104,897
9,587
3,940
87,971
(59%)
71,005
3,975
5,647
2,454
1,521
1Q12
1Q13
1Q14
1Q15
1Q14
1Q15
Expansion
Renewal
6
1Q15
Sugar, Ethanol & Energy Business– Sugarcane Productivity
Sugarcane productivity has been enhanced by improvements in agricultural
management
Yields
+41%
TRS
TRS/ha
+15%
+62%
118
91
10,689
103
64
6,610
1Q14
1Q15
1Q14
1Q15
1Q14
1Q15
Factors attributable to enhanced productivity
Effective implementation of pest controls
Selection of the best cane varieties for the region
Harvesting of sugarcane at its optimum growth cycle
Focus on renewing our plantation to mantain its productivity
7
1Q15
Sugar, Ethanol & Energy Business– Production
Production has significantly increased due early start of harvest coupled with
enhacements in productivity
Sugar Production
Ethanol Production
(tons)
(M3)
16,596
+689%
22,468
2,103
1Q14
1Q15
1Q14
1Q15
TRS Equivalent
Exported Energy
(tons)
(MWh)
+1,360%
51,485
+ 13%
17,184
15,257
3,526
1Q14
1Q15
1Q14
1Q15
8
1Q15
Sugar, Ethanol & Energy Business– Ethanol
Lower ethanol prices were fully offset by higher selling volumes resulting from
our 2014 carry strategy
Our carry strategy allowed us to increase ethanol sales by 37% vs. 1Q14 and capture higher off-season prices
1,600
Volume (m3)
140,000
1,500
120,000
1,400
100,000
80,000
1,300
60,000
1,200
40,000
1,100
20,000
0
Ethanol Price (BRL/m3)
160,000
1,000
Apr/14
May/14
Production
Jun/14
Sales
Jul/14
Aug/14
Inventories
Sep/14
Oct/14
Dec/14
Anhydrous Price (ESALQ)
Ethanol Sales Volumes
(M3)
Nov/14
Jan/15
Feb/15
Mar/15
Hydrous Price (ESALQ)
Ethanol Net Sales
560
79,424
($ ´000)
35,062
+37%
57,968
Average
Realized
Price
US$/m3
1Q14
1Q15
441
+8%
32,445
1Q14
1Q15
9
1Q15
Sugar, Ethanol & Energy Business– Energy
Increase in volumes was offseted by lower energy prices driven by the new
government ceiling price and BRL depreciation
Brazilian Energy Spot Prices 1Q15 vs. 1Q14
Percentage of Water Stored in Reservoirs
1Q14
100
BRL/MWh
80
60
% 40
20
0
Jan Fev Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2011
2012
2013
2014
900
800
700
600
500
400
300
200
100
0
1Q15
378.2 388.5
Jan
2015
Energy Sales Volumes
(M3)
+13%
388.5
Feb
822.8
388.5
388.5
Mar
Apr
Total Net Sales
201
17,184
822.8
822.8
Average
Realized
Price
US$/MWh
($ ´000)
97
3,071
(46%)
1,672
15,257
1Q14
1Q15
1Q14
1Q15
10
1Q15
Sugar, Ethanol & Energy Business– Financial Performance
Increased profitability due to ethanol carry, hedge results, enhanced efficiency
and cost reduction
Net Sales 1Q15
Adjusted EBITDA & EBITDA Margin 1Q15
($ ´000)
($ ´000)
36%
+4%
50,549
48,451
3,071
Energy
12,935
1,672
13,814
17,927
Adjusted
EBITDA
Margin
+370%
7%
Sugar
Ethanol
32,445
35,062
3,812
1Q14
1Q15
1Q14
1Q15
11
Farming Business – Commodity Hedge Position
1Q15
Our 2015/16 sugar production is hedged 2at prices above the current market
Sugar Futures Contracts 2015
20.0
19.0
18.0
Sugar Hedge:
17.0
16.0
15.0
•
362,000 tons (approximately 85% of
production)
•
Price: $15.7 cents/bushel
14.0
13.0
12.0
11.0
10.0
01/01/2015
01/02/2015
01/03/2015
01/04/2015
Hedge as of 03/31/15
12
Farming Business
13
1Q15
Farming Business – 2014/15 Crop Status
Good humidity conditions during crop flowering have enhanced crop growth and
development
2014/15 vs 10-Year Historical Average Monthly Rainfall
Evolution in Argentina’s Humid Pampas (in mm) (1)
Crop Flowering Stages:
Early Corn
Wheat
Soy
Late Corn
250
200
150
100
50
0
Sep
Oct
Nov
Dec
2014/15
Jan
Feb
Mar
Apr
10 year average
(1) Data has been obtained from our farms in Venado Tuerto, Santa Fe.
14
1Q15
Farming Business – Harvested Area & Yields
Favorable weather has resulted in higher productivity compared to the 2013/14
season
Soybean 2nd Crop
Soybean
+6%
59%
3.1
+6%
2.9
2.1
2.0
32%
% Harvested
2013/14
2014/15
% Harvested
2013/14
2014/15
Rice
Corn
+3%
5.7
6.1
(7%)
96%
5.3
5.9
23%
% Harvested
2013/14
2014/15
% Harvested
2013/14
2014/15
15
1Q15
Farming Business – Financial Performance
1Q15 Adjusted EBITDA has been impacted by low prices and appreciation of the
Peso in real terms
Farming Adjusted EBIT 1Q15
($ millions)
1Q14
1Q15
34.1
(28%)
(57%)
21.3
20.6
14.8
(37%)
(7%)
12.1
5.1
1.4
Crops
Rice
1.3
Dairy
0.0
0.1
Others
Farming
Consolidated
16
Farming Business – Commodity Hedge Position
1Q15
Soybean and corn 2014/2015 production is hedged at prices well above the
prevailing market
Soybean Futures Contract July 2015
Soybean Hedge:
US cents/bushel
•
251,322 tons (approximately 99% of
production)
•
Price: $1,157 cents/bushel (FOB equivalent)
Hedge as of 03/31/15
Corn Futures Contract July 2015
Corn Hedge:
US cents/bushel
•
230,867 tons (approximately 98% of
production)
•
Price: $530 cents/bushel (FOB equivalent)
Hedge as of 03/31/15
17
Financial Performance
16
1Q15
Financial Performance - Consolidated Financial Performance
Financial Performance continues increasing year by year, as we improve
efficiencies in each one of our businesses and become the lowest cost producers
Area & Production
(1)
Farming Planted Area (hect.)
Sugarcane Planted Area (hect.)
(2)
Farming Production (tons)
Sugarcane Crushing (tons)
Net Sales
Farming & Land Transformation
Sugar, Ethanol & Energy
Total
Adjusted EBITDA
Farming & Land Transformation
Sugar, Ethanol & Energy
Corporate
Total
Adjusted EBITDA Margin
(1)
Farming & Land Transformation
(1)(2)
Sugar, Ethanol & Energy
Total
2010
2011
2012
2013
2014
1Q14
1Q15
Chg%
183,454
53,799
618,834
4,066,115
192,207
65,308
666,589
4,168,082
232,547
85,663
738,847
4,488,935
219,305
99,409
699,179
6,417,951
224,362
124,412
848,843
7,232,827
219,305
104,897
427,606
224,362
45,182
470,204
460,124
2.3%
20.9%
10.0%
918%
2010
2011
2012
2013
2014
1Q14
1Q15
Chg%
197,741
204,256
401,997
270,766
258,939
529,705
322,368
271,447
593,815
327,163
297,265
624,428
315,837
378,633
694,470
46,084
58,687
48,451
50,549
94,535
109,236
27.3%
4.3%
15.6%
2010
2011
2012
2013
2014
1Q14
1Q15
Chg%
65,735
51,735
(22,353)
95,117
67,444
109,507
(26,885)
150,066
68,647
97,505
(25,442)
140,710
88,942
115,239
(23,478)
180,704
85,234
153,503
(23,233)
215,504
35,888
3,811
(4,966)
34,733
23,158
17,927
(5,197)
35,889
(35.5%)
370.4%
4.7%
3.3%
27.6%
19.9%
23.7%
19.9%
37.1%
28.3%
17.3%
31.2%
23.7%
23.6%
34.8%
28.9%
23.3%
37.5%
31.0%
72.5%
2.7%
36.7%
126,866
35.0%
(51.7%)
30.3% 1,006.4%
32.9%
(10.6%)
(1) Pl a nted Area i n 2014 i s for 2014/15 s ea s on
(2) Total Production for 2014 i s for the 2013/14 s ea s on
(3) Corpora te expens es a l l oca ted 50% to Fa rmi ng & La nd Tra ns forma tion a nd 50% to Suga r, Etha nol & Energy
(4) Ca l cul a ted over Net Sa l es . Net Sa l es i s ca l cul a ted a s Sa l es l es s s uga r a nd etha nol s a l es taxes .
19
1Q15
Financial Performance - Net Debt
Net debt stands at $580 million as of March 31, 2015
1Q15 Debt Term Structure
1Q15 Net debt
($ millions)
778
S&E
Farming
25%
Short term
Long Term
670
580
108
Debt
75%
198
Cash
Net debt
1Q15 Debt Currency Structure
2%
36%
62%
Average Interest (1)
ARS
17.0%
BRL
6.6%
USD
4.9%
(1) As of March 31st 2015
Brazilian Reals
Argentine Pesos
Total debt as of March 31, 2015 was of $778 million.
75% of our debt is in the long term, composed mainly
of loans from multilateral banks (BNDES and IDB)
Net debt as of March 31, 2015 was of $580 million
US Dollars
20
1Q15
Financial Performance – Capital Expenditures
1Q15 Capital Expenditures decreased 56.5%, reflecting the end of the Capex
cycle
As previously anticipated, Capex is expected to slow down in the coming years after the completion of the Ivinhema
mill
Projected Capex
Capex 1Q15
($ millions)
($ millions)
(54%)
170
150
63
1Q14
90
324
138
1Q15
80
2014
2015F
2016F
21
Thank you!
ir.adecoagro.com
Investor Relations
Charlie Boero Hughes - CFO
Email: [email protected]
TEL: +5411 4836 8804
Hernan Walker - IR Manager
Email: [email protected]
TEL: +5411 4836 8651