Lavoro Limited (Nasdaq: LVRO; LVROW), the first
U.S.-listed pure-play agricultural inputs distributor in Latin
America, today announced its financial results for the fiscal
fourth quarter, ended on June 30, 2023.
“In recent months, we saw a further worsening in
pricing trends in crop protection and fertilizers, as significant
global pricing declines were exacerbated by excess channel
inventories in Brazil, particularly in herbicides. While we are
seeing signs of stabilization of the pricing trends, our
expectation is for the retail ag inputs in Brazil to see overall
decline of approximately -20% for our fiscal year 2024, led by
these pricing headwinds. With that said, our view is that the
fundamental long-term secular growth drivers for our Brazil Ag
Retail segment have not changed. What we have been witnessing in
the past few quarters is simply the normalization of input prices
that overshot in ’21-’22 as a result of temporary factors that have
now waned, namely the impact of COVID-led plant shutdowns on
Chinese agrochemical production, and the effects of the War in
Ukraine. We view this as a temporary effect that we expect should
not persist beyond the end of this our fiscal year, and should not
affect our long-term growth algorithm,” commented Ruy Cunha, CEO of
Lavoro.
“Our scale, regional and product
diversification, vertical integration with Crop Care, strong
balance sheet, M&A capabilities, and ability to invest in
technology and new services, sets us apart relative to the rest of
industry. We believe we are uniquely positioned to capitalize on
the current environment, accelerate our market share gains and
improve our financial performance as market conditions normalize,”
added Mr. Cunha.
4Q23 Financial Highlights
- Consolidated
revenue increased by 17% to $265.6 million in 4Q23 compared to the
same period in 2022, mainly driven by higher input sales from
Brazil Ag Retail1, attributable to (i) increased unit volumes of
fertilizers, crop protection and specialties, (ii) growth in corn
seeds price and volumes, partly offset by (iii) price declines in
crop protection and fertilizer product categories. Once again,
Latam Ag Retail revenue was affected by the depreciation of the
Colombian Peso, with a -3% y/y decline. On a constant-currency
basis, Latam grew 10%. Crop Care segment revenue decreased -21%
y/y, driven by phasing effects at Union Agro, though gross profit
grew 60% driven by strong performance of our biologicals product
line. For FY23, Lavoro consolidated revenue increased by 24% to
reach $1.8 billion, with Crop Care being a notable contributor as
revenue growth exceeded 90%.
- Gross Profit
increased by 27% to $46.9 million in 4Q23, with gross margin
expanding by 140bps to 17.6%. This was mainly attributable to (i)
positive segment mix shifts, led by Crop Care (ii) improved product
mix in our retail distribution, as sales of specialties products as
a percentage of Inputs revenue improved by nearly 300bps to 9% in
4Q22, and (iii) strong performance from
biologicals, our highest margin product line which grew over 80%
versus the prior year quarter. These positive drivers more than
offset headwinds from steep price declines in crop protection and
fertilizers, which in turn were partially alleviated by a $12
million benefit from planned successful renegotiation with our
suppliers. For FY23, gross profit reached $331.9 million, up 34%
y/y, with gross margin expanding by 140 bps to 18.5%, owing to both
segment and product mix shifts.
- Adjusted EBITDA in 4Q23 was $2.4
million, improving by $18.7 million y/y, with positive incremental
contribution from all three segments. The key drivers are similar
to those outlined above for gross profit, with the addition of the
benefit of an improved SG&A expense ratio vs. last year. For
FY23, Adjusted EBITDA grew 64% to $149.8 million, and Adjusted
EBITDA margin rose 200 bps to 8.3%. Crop Care yet again was a
strong contributor, with segment Adjusted EBITDA expanding 280%
y/y, resulting in Crop Care now accounting for nearly 19% of total
Adjusted EBITDA in FY23, a jump from 8% in the previous year.
- Non-recurring
expenses increased by $4.6 million to $6.0 million in 4Q23, due to
(i) IPO-related consultancy services expenses throughout fiscal
year 2023 recognized as non-recurring in 4Q23 ($3.8 million); (ii)
the remainder of a one-time DeSPAC bonus to employees paid in 4Q23
($0.9 million) and (iii) M&A accounting and tax due diligence
expenses ($0.8 million). For FY23, non-recurring items other than
our Nasdaq listing expense, increased to $14.3 million, with key
drivers being (i) $2.8 million impact from stock-based
compensation; (ii) $ 5.8 million of one-time DeSPAC bonus; (iii)
$3.8 million from IPO-related consultancy services, and (iv) $5.2
of M&A expenses.
- Financial costs
were $11.1 million higher in 4Q23 vs. the prior year, attributable
to losses on fair value of commodity forward contracts, and an
increase in the benchmark interest rate in Brazil. On a full fiscal
year basis, financial results were $76.9 million higher than the
previous year, owing to the same drivers.
__________________1 Our segments herein have been renamed to
Brazil Ag Retail (Brazil Cluster), Latam Ag Retail (LatAm Cluster)
and Crop Care (Crop Care Cluster), to be clearer with the region
and business function they are performing. There is no change to
the scope of their operations.
Summary of 4Q23 and FY23
Results¹
|
Key Financial Metrics |
|
4Q22 |
4Q23 |
Chg. % |
|
FY22 |
FY23 |
Chg. % |
|
(in millions of US dollars)1 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Revenue by Segment |
|
227.8 |
|
265.5 |
|
17 |
% |
|
1,447.9 |
|
1,794.9 |
|
24 |
% |
|
Brazil Ag Retail |
|
149.5 |
|
197.2 |
|
32 |
% |
|
1,184.2 |
|
1,502.1 |
|
27 |
% |
|
Latam Ag Retail |
|
63.7 |
|
61.8 |
|
-3 |
% |
|
220.2 |
|
233.1 |
|
6 |
% |
|
Crop Care |
|
13.5 |
|
10.6 |
|
-21 |
% |
|
62.4 |
|
120.8 |
|
94 |
% |
|
Intercompany2 |
|
1.1 |
|
(4.1 |
) |
|
|
(18.9 |
) |
(61.1 |
) |
|
| |
|
|
|
|
|
|
|
|
|
|
Revenue by Category |
|
227.8 |
|
265.6 |
|
17 |
% |
|
1,448.0 |
|
1,794.8 |
|
24 |
% |
|
Inputs revenue |
|
180.7 |
|
217.0 |
|
20 |
% |
|
1,310.5 |
|
1,664.6 |
|
27 |
% |
|
Grains revenue |
|
47.1 |
|
48.6 |
|
3 |
% |
|
137.5 |
|
130.2 |
|
-5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
37.0 |
|
46.9 |
|
27 |
% |
|
247.5 |
|
332.0 |
|
34 |
% |
|
Brazil Ag Retail |
|
21.6 |
|
26.3 |
|
22 |
% |
|
188.8 |
|
246.1 |
|
30 |
% |
|
Latam Ag Retail |
|
10.3 |
|
9.4 |
|
-9 |
% |
|
35.9 |
|
38.0 |
|
6 |
% |
|
Crop Care |
|
5.1 |
|
8.1 |
|
59 |
% |
|
22.7 |
|
53.8 |
|
137 |
% |
|
Intercompany |
|
– |
|
3.1 |
|
|
|
0.1 |
|
(5.9 |
) |
|
| |
|
|
|
|
|
|
|
|
|
| Gross Margin |
|
16.2 |
% |
17.7 |
% |
150 bps |
|
17.1 |
% |
18.5 |
% |
140 bps |
| Gross Margin (% of
Inputs) |
|
20.5 |
% |
21.6 |
% |
110 bps |
|
18.9 |
% |
19.9 |
% |
100 bps |
|
|
|
|
|
|
|
|
|
|
| SG&A excl. D&A |
|
(59.1 |
) |
(55.5 |
) |
|
|
(166.6 |
) |
(205.1 |
) |
|
| Other operating income
(expense) |
|
4.4 |
|
5.0 |
|
|
|
10.5 |
|
(53.0 |
) |
|
|
EBITDA |
|
(17.7 |
) |
(3.6 |
) |
-80 |
% |
|
91.4 |
|
73.9 |
|
-19 |
% |
|
(+) Nasdaq listing expenses3 |
|
– |
|
– |
|
|
|
– |
|
61.5 |
|
|
| (+)
Other non-recurring items |
|
1.4 |
|
6.0 |
|
|
|
0.2 |
|
14.5 |
|
|
|
Adjusted EBITDA |
|
(16.3 |
) |
2.4 |
|
n.m. |
|
91.6 |
|
149.8 |
|
64 |
% |
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA Margin % |
|
-7.2 |
% |
0.9 |
% |
810 bps |
|
6.3 |
% |
8.3 |
% |
200 bps |
| Adjusted EBITDA Margin (% of
Inputs) |
|
-9.0 |
% |
1.1 |
% |
1,010 bps |
|
7.0 |
% |
9.0 |
% |
200 bps |
| |
|
|
|
|
|
|
|
|
| D&A |
|
(6.9 |
) |
(8.1 |
) |
|
|
(27.3 |
) |
(32.4 |
) |
|
| Finance income (costs) |
|
(17.0 |
) |
(28.2 |
) |
|
|
(42.4 |
) |
(119.2 |
) |
|
| Income
taxes, current and deferred |
|
14.6 |
|
20.6 |
|
|
|
(4.6 |
) |
34.0 |
|
|
|
Net profit |
|
(27.0 |
) |
(19.3 |
) |
n.m. |
|
17.1 |
|
(43.7 |
) |
n.m. |
| |
|
|
|
|
|
|
|
|
|
Adjusted net profit |
|
(25.6 |
) |
(13.3 |
) |
n.m. |
|
17.3 |
|
32.3 |
|
87 |
% |
__________________
1 USD/BRL average period exchange rate used to translate
our results to USD throughout this document for illustration
purposes: 4.952 for FY4Q23, 5.193 for FY3Q23, 5.280 for FY1H23,
4.924 for FY4Q22, 5.226 for FY3Q22, 5.570 for
FY1H22.2 Represents sales between Crop Care and Brazil Ag
Retail.3 Represents expenses related to the business
combination with TPB Acquisition Corp I.
Segment Results for 4Q23 and FY234
Brazil Ag Retail
Segment revenue increased by 45% to $197 million
in 4Q23, with strong unit volume growth in crop protection,
fertilizer and specialty sales, more than offsetting steep price
declines that the industry witnessed over the past few months.
Gross margin decreased by 110 bps to 13.3%, owing to these pricing
headwinds, partly offset by a previously planned $12 million
supplier renegotiation benefit.
|
Brazil Ag Retail |
|
4Q22 |
4Q23 |
Chg. % |
|
FY22 |
FY23 |
Chg. % |
|
(in millions of US dollars) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Inputs revenue |
|
102.7 |
|
148.7 |
|
45 |
% |
|
1,025.5 |
|
1,367.9 |
|
33 |
% |
| Grains
revenue |
|
46.8 |
|
48.5 |
|
4 |
% |
|
158.8 |
|
134.1 |
|
-16 |
% |
|
Revenue |
|
149.5 |
|
197.2 |
|
32 |
% |
|
1,184.3 |
|
1,502.0 |
|
27 |
% |
| |
|
|
|
|
|
|
|
|
|
Gross Profit |
|
21.6 |
|
26.3 |
|
22 |
% |
|
188.8 |
|
246.0 |
|
30 |
% |
|
Gross Margin |
|
14.4 |
% |
13.3 |
% |
-110 bps |
|
15.9 |
% |
16.4 |
% |
50 bps |
|
Gross Margin (% of Inputs) |
|
21.0 |
% |
17.7 |
% |
-330 bps |
|
18.4 |
% |
18.0 |
% |
-40 bps |
| |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
(19.3 |
) |
(4.0 |
) |
n.m. |
|
69.9 |
|
111.9 |
|
60 |
% |
|
Adjusted EBITDA Margin |
|
-12.9 |
% |
-2.0 |
% |
1,090 bps |
|
5.9 |
% |
7.5 |
% |
160 bps |
|
Adjusted EBITDA Margin (% of Inputs) |
|
-18.8 |
% |
-2.7 |
% |
1,610 bps |
|
6.8 |
% |
8.2 |
% |
140 bps |
Latam Ag Retail
The segment grew 10% on a constant currency
basis (Colombian peso), primarily due to strong sales in
specialties and corn seeds, partly offset by headwinds resulting
from the removal of Paraquat, a financially relevant herbicide,
from the product lineup one of our suppliers. The devaluation of
the peso was a -13% y/y negative contributor, with revenue
declining -3% on a US dollar basis. Gross Margin contracted by 100
bps in 4Q23, reflecting the deflationary pricing trends in crop
protection and fertilizers.
|
Latam Ag Retail |
|
4Q22 |
4Q23 |
Chg. % |
|
FY22 |
FY23 |
Chg. % |
|
(in millions of US dollars) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Inputs revenue |
|
63.3 |
|
61.7 |
|
-3 |
% |
|
207.5 |
|
223.0 |
|
7 |
% |
| Grains
revenue |
|
0.4 |
|
0.1 |
|
-75 |
% |
|
12.7 |
|
10.1 |
|
-20 |
% |
|
Revenue |
|
63.7 |
|
61.8 |
|
-3 |
% |
|
220.2 |
|
233.1 |
|
6 |
% |
| |
|
|
|
|
|
|
|
|
|
Gross Profit |
|
10.3 |
|
9.4 |
|
-9 |
% |
|
35.9 |
|
38.0 |
|
6 |
% |
|
Gross Margin |
|
16.2 |
% |
15.2 |
% |
-100 bps |
|
16.3 |
% |
16.3 |
% |
0 bps |
|
Gross Margin (% of Inputs) |
|
16.3 |
% |
15.2 |
% |
-110 bps |
|
17.3 |
% |
17.0 |
% |
-30 bps |
| |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
2.5 |
|
3.3 |
|
32 |
% |
|
14.4 |
|
17.4 |
|
300 |
% |
|
Adjusted EBITDA Margin |
|
3.9 |
% |
5.3 |
% |
140 bps |
|
6.5 |
% |
7.5 |
% |
100 bps |
|
Adjusted EBITDA Margin (% of Inputs) |
|
3.9 |
% |
5.3 |
% |
140 bps |
|
6.9 |
% |
7.8 |
% |
90 bps |
________________
4 USD/BRL average period exchange rate used
to translate our results to USD: 4.952 for FY4Q23, 5.193 for
FY3Q23, 5.280 for FY1H23, 4.924 for FY4Q22, 5.226 for FY3Q22, 5.570
for FY1H22.
Crop Care
Crop Care segment revenue for 4Q23 saw a -21%
decline, resulting from the phasing effects at Union Agro, our
specialty fertilizer company, which had some sales pull-forward
into 3Q23. Biologicals product sales grew over 80% y/y, partly
driven from phasing shift from 3Q23 to 4Q23, as a result of
postponement of the timing of biopesticide input purchases by
farmers. The strong growth in biologicals, which are the highest
gross margin products for Lavoro, led the gross margin expansion to
76.4%, from 37.8% a year ago.
|
Crop Care |
|
4Q22 |
4Q23 |
Chg. % |
|
FY22 |
FY23 |
Chg. % |
|
(in millions of US dollars) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Revenue |
|
13.5 |
|
10.6 |
|
-21 |
% |
|
62.4 |
|
120.8 |
|
94 |
% |
| |
|
|
|
|
|
|
|
|
|
Gross Profit |
|
5.1 |
|
8.1 |
|
22 |
% |
|
22.7 |
|
53.8 |
|
30 |
% |
|
Gross Margin |
|
37.8 |
% |
76.4 |
% |
3,860 bps |
|
36.4 |
% |
44.5 |
% |
810 bps |
| |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
0.5 |
|
1.2 |
|
140 |
% |
|
7.4 |
|
28.1 |
|
280 |
% |
|
Adjusted EBITDA Margin |
|
3.7 |
% |
11.3 |
% |
760 bps |
|
11.9 |
% |
23.3 |
% |
1,140 bps |
Recent Business and Commercial Updates
Partnership with Stenon
On June 30, 2023, Lavoro announced a
partnership with Stenon. Stenon is a step-change evolution in soil
chemistry testing, with its FarmLab solution, which is a portable
sensor-based devices enabling accurate real-time analysis of
Nitrogen and other agronomically relevant soil indicators. With
Stenon, as a practical example, our RTVs will be able to provide
clients with timely recommendations for nitrogen application across
their corn planting area, resulting in improved costs and crop
yields. We are planning to sample 100,000 acres in the coming crop
season across the state of Parana, where 100 RTVs have been trained
and are ready to execute on this service.
Recent M&As Updates
Closed agreements
Referência Agroinsumos
On July 31, Lavoro successfully completed the
acquisition of a controlling interest in Referência Agroinsumos.
Founded in 2006, Referência has nine distribution locations and
more than 80 employees, serving approximately 2,000 customers in
the South of Brazil.
Pro forma Financial Information5
|
Highlights of Pro Forma Results |
|
4Q22 |
4Q23 |
Chg. % |
|
FY22 |
FY23 |
Chg. % |
|
(in millions of US dollars) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Pro forma Revenue by Segment |
|
331.8 |
|
338.8 |
|
2 |
% |
|
1,756.5 |
|
1,938.4 |
|
10 |
% |
| |
|
|
|
|
|
|
|
|
| Pro forma Gross
Profit |
|
58.3 |
|
63.0 |
|
8 |
% |
|
306.1 |
|
359.4 |
|
17 |
% |
|
Pro forma Gross Margin |
|
17.6 |
% |
18.6 |
% |
100 bps |
|
17.4 |
% |
18.5 |
% |
110 bps |
| |
|
|
|
|
|
|
|
|
| Pro forma Adjusted
EBITDA |
|
4.5 |
|
13.4 |
|
298 |
% |
|
131.5 |
|
167.9 |
|
1 |
% |
|
Pro forma Adjusted EBITDA Margin % |
|
1.4 |
% |
4.0 |
% |
260 bps |
|
7.5 |
% |
8.7 |
% |
120 bps |
Full Fiscal Year 2024 Consolidated Outlook6
| |
|
FY2024 |
|
|
Consolidated Financials Outlook |
|
Low |
High |
|
|
(in millions of US dollars) |
|
|
|
|
| |
|
|
|
|
| Revenue |
|
2,000 |
2,300 |
|
| |
|
|
|
|
| Inputs
revenue |
|
1,700 |
2,000 |
|
|
|
|
|
|
|
| Adjusted
EBITDA |
|
135 |
165 |
|
_________________
5 Pro Forma financial information is calculated
assuming the acquisitions occurred at the beginning of the period
presented and the prior year (rather than just the partial “stub
period” contribution). Pro Forma Revenues represent fully combined
revenues, which include revenues from non-controlling minority
shareholders.6 USD/BRL average period exchange rate used to
translate our results to USD: 4.88 for FY1Q24, and 5.02 for FY2Q24
to FY3Q24.
Conference Call Details
The Company will host a conference call and
webcast to review its fiscal fourth quarter 2023 results on
Wednesday, November 1, 2023, at 8:30 am ET / 9:30 am BRT.
Participant Numbers: 1-877-407-9716 (U.S.),
1-201-493-6779 (International)
The live audio webcast will be accessible in the
Events section on the Company's Investor Relations website
at https://ir.lavoroagro.com/disclosure-and-documents/events/.
Non-IFRS Financial Measures
This press release contains certain non-IFRS
financial measures, including Adjusted EBITDA, Adjusted EBITDA
Margin, Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA
Margin. A non-IFRS financial measure is generally defined as a
numerical measure of historical or future financial performance,
financial position, or cash flow that purports to measure financial
performance but excludes or includes amounts that would not be so
adjusted in the most comparable IFRS measure. The Company believes
these non-IFRS financial measures provide meaningful supplemental
information as they are used by the Company's management to
evaluate the Company's performance, and provide additional
information about trends in our operating performance prior to
considering the impact of capital structure, depreciation,
amortization and taxation on our results, as well as the effects of
certain items or events that vary widely among similar companies,
and therefore may hamper comparability across periods, although
these measures are not explicitly defined under IFRS. Management
believes that these measures enhance a reader's understanding of
the operating and financial performance of the Company and
facilitate a better comparison between fiscal periods. Adjusted
EBITDA is defined as profit for the period, adjusted for finance
income (cost), net, income taxes current and deferred, depreciation
and amortization, M&A expenses that in management’s judgment do
not necessarily occur on a regular basis, fair value of inventories
sold from acquired companies, minus gain on bargain purchases, to
provide further meaningful information to evaluate the Company’s
performance. Adjusted EBITDA Margin is calculated as Adjusted
EBITDA as a percentage of revenue for the period. Pro Forma
Adjusted EBITDA is defined as pro forma profit for the period,
adjusted for pro forma finance income (costs), net, pro forma
income taxes current and deferred, pro forma depreciation and
amortization, fair value on inventories sold from acquired
companies, and M&A expenses that in management’s judgment do
not necessarily occur on a regular basis, minus gain on bargain
purchases. Pro Forma Adjusted EBITDA Margin is calculated as Pro
Forma Adjusted EBITDA as a percentage of pro forma revenue for the
period.
The Company does not intend for the non-IFRS
financial measures contained in this release to be a substitute for
any IFRS financial information. Readers of this press release
should use these non-IFRS financial measures only in conjunction
with comparable IFRS financial measures. Reconciliations of the
non-IFRS financial measures, Adjusted EBITDA, and Pro Forma
Adjusted EBITDA, to their most comparable IFRS measures, are
provided in the table below.
Reconciliation of Adjusted EBITDA and Adjusted EBITDA
Pro forma
|
Reconciliation of Adjusted EBITDA |
|
4Q22 |
4Q23 |
|
FY22 |
FY23 |
|
(in millions of US dollars) |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Net Profit/Loss for the Period |
|
(27.1 |
) |
(19.5 |
) |
|
17.1 |
|
(43.8 |
) |
|
(+) Finance income (costs) |
|
17.0 |
|
28.2 |
|
|
42.4 |
|
119.2 |
|
| (+) Income taxes, current and
deferred |
|
(14.6 |
) |
(20.6 |
) |
|
4.6 |
|
(34.0 |
) |
| (+) Depreciation and
amortization |
|
6.1 |
|
8.2 |
|
|
22.3 |
|
27.2 |
|
| (+) Fair value of inventories
sold from acquired companies |
|
0.9 |
|
0.2 |
|
|
5.0 |
|
5.1 |
|
| (+) M&A expenses |
|
0.9 |
|
0.8 |
|
|
3.0 |
|
2.1 |
|
| (+) Gain on bargain
purchases |
|
— |
|
— |
|
|
(3.3 |
) |
— |
|
| (+) Nasdaq Listing
expenses |
|
— |
|
— |
|
|
— |
|
61.5 |
|
| (+) Stock-based
compensation |
|
— |
|
0.5 |
|
|
— |
|
2.8 |
|
| (+) DeSPAC related bonus |
|
— |
|
0.9 |
|
|
— |
|
5.8 |
|
| (+)
Related party consultancy services |
|
0.5 |
|
3.8 |
|
|
0.5 |
|
3.8 |
|
|
Adjusted EBITDA |
|
(16.3 |
) |
2.5 |
|
|
91.6 |
|
149.7 |
|
|
(/) Revenue |
|
227.8 |
|
265.5 |
|
|
1,448.0 |
|
1,794.8 |
|
| Adjusted EBITDA Margin % |
|
-7.2 |
% |
0.9 |
% |
|
6.3 |
% |
8.3 |
% |
|
Reconciliation of Pro Forma Adjusted EBITDA |
|
4Q22 |
4Q23 |
|
FY22 |
FY23 |
|
(in millions of US dollars) |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Pro forma Net Profit/Loss for the Period |
|
(11.2 |
) |
(15.6 |
) |
|
45.9 |
|
(34.6 |
) |
|
(+) Pro forma finance income (costs), net |
|
16.6 |
|
33.2 |
|
|
45.9 |
|
124.7 |
|
| (+) Pro forma income taxes
current and deferred |
|
(11.0 |
) |
(18.5 |
) |
|
10.2 |
|
(31.0 |
) |
| (+) Pro forma depreciation and
amortization |
|
7.5 |
|
7.6 |
|
|
24.2 |
|
27.4 |
|
| (+) M&A expenses |
|
0.9 |
|
0.6 |
|
|
5.0 |
|
5.2 |
|
| (+) Fair value of inventories
sold from acquired companies |
|
1.3 |
|
0.7 |
|
|
3.0 |
|
2.1 |
|
| (+) Gain on bargain
purchases |
|
— |
|
— |
|
|
(3.3 |
) |
— |
|
| (+) Nasdaq Listing
expenses |
|
— |
|
— |
|
|
— |
|
61.5 |
|
| (+) Pro forma stock-based
compensation |
|
— |
|
0.5 |
|
|
— |
|
2.9 |
|
| (+) Pro forma DeSPAC related
bonus |
|
— |
|
0.9 |
|
|
— |
|
5.8 |
|
| (+) Pro
forma related party consultancy services |
|
0.5 |
|
3.8 |
|
|
0.5 |
|
3.8 |
|
|
Pro forma Adjusted EBITDA |
|
4.6 |
|
13.2 |
|
|
131.4 |
|
167.8 |
|
|
(/) Pro forma revenue |
|
331.8 |
|
338.8 |
|
|
1,756.5 |
|
1,929.4 |
|
| Pro forma Adjusted EBITDA
Margin % |
|
1.4 |
% |
3.9 |
% |
|
7.5 |
% |
8.7 |
% |
Reconciliation of Adjusted Profit (Loss)
|
Reconciliation of Adjusted Net Profit |
|
4Q22 |
4Q23 |
|
FY22 |
FY23 |
|
(in millions of US dollars) |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
Profit/Loss for the Period |
|
(27.0 |
) |
(19.3 |
) |
|
17.1 |
|
(43.7 |
) |
|
(+) M&A expenses8 |
|
0.9 |
|
0.8 |
|
|
3.0 |
|
2.1 |
|
| (-) Gain on bargain
purchases9 |
|
— |
|
— |
|
|
(3.3 |
) |
— |
|
| (+) Nasdaq Listing
expenses10 |
|
— |
|
— |
|
|
— |
|
61.5 |
|
| (+) Stock Option Plan |
|
— |
|
0.5 |
|
|
— |
|
2.8 |
|
| (+) DeSPAC bonus |
|
— |
|
0.9 |
|
|
— |
|
5.8 |
|
| (+)
Related party consultancy services |
|
0.5 |
|
3.8 |
|
|
0.5 |
|
3.8 |
|
|
Adjusted Net Profit/Loss |
|
(25.6 |
) |
(13.3 |
) |
|
17.3 |
|
32.3 |
|
|
(/) Revenue |
|
227.8 |
|
265.5 |
|
|
1,448.0 |
|
1,794.8 |
|
| Adjusted Net Profit/Loss
Margin % |
|
-11.2 |
% |
-5.0 |
% |
|
1.2 |
% |
1.8 |
% |
_____________________
7 M&A expenses primarily include
M&A accounting and tax due diligence expenses.8 Difference
between the fair value of the Union Agro’s net assets and the price
paid by the Company, recorded as a gain.9 Represents expenses
related to the business combination with TPB Acquisition Corp
I.
About Lavoro
Lavoro is Brazil's largest agricultural inputs
retailer and a leading producer of agricultural biological
products. Lavoro's shares and warrants are listed on the Nasdaq
stock exchange under the tickers "LVRO" and "LVROW." Through its
comprehensive portfolio of products and services, the company
empowers small and medium-size farmers to adopt the latest emerging
agricultural technologies and enhance their productivity. Since its
founding in 2017, Lavoro has broadened its reach across Latin
America, serving 72,000 customers in Brazil, Colombia, and Uruguay,
via its team of over 1,000 technical sales representatives (RTVs),
its network of over 210 retail locations, and its digital
marketplace and solutions. Lavoro's RTVs are local trusted advisors
to farmers, regularly meeting them to provide agronomic
recommendations throughout the crop cycle to drive optimized
outcomes. Learn more about Lavoro at ir.lavoroagro.com.
Reportable Segments
Lavoro’s reportable segments are the
following:
Brazil Cluster (Brazil Ag Retail): comprises
companies dedicated to the distribution of agricultural inputs such
as crop protection, seeds, fertilizers, and specialty products, in
Brazil.
LatAm Cluster (Latam Ag Retail): includes
companies dedicated to the distribution of agricultural inputs
outside Brazil (currently primarily in Colombia).
Crop Care Cluster (Crop Care): includes
companies that produce and import our own portfolio of private
label products including specialty products (e.g., biologicals and
specialty fertilizers) and off-patent crop protection.
Lavoro’s Fiscal Year
Lavoro follows the crop year, which means that
its fiscal year comprises July 1st of each year, until
June 30th of the following year. Given this, Lavoro’s quarters
have the following format:
1Q – quarter starting on July 1 and ending on
September 30.2Q – quarter starting on October 1 and ending on
December 31.3Q – quarter starting on January 1 and ending on March
31.4Q – quarter starting on April 1 and ending on June 30.
Definitions
RTVs: refer to Lavoro’s technical sales
representatives (Representante Técnico de Vendas), who are linked
to its retail stores, and who develop commercial relationships with
farmers.
Forward-Looking Statements
The contents of any website mentioned or
hyperlinked in this press release are for informational purposes
and the contents thereof are not part of or incorporated into this
press release.
Certain statements made in this press release
are “forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of words such as “aims,” “estimate,” “plan,”
“project,” “forecast,” “intend,” “will,” “expect,” “anticipate,”
“believe,” “seek,” “target” or other similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding the
expectations regarding the growth of Lavoro’s business and its
ability to realize expected results, grow revenue from existing
customers, and consummate acquisitions; opportunities, trends, and
developments in the agricultural input industry, including with
respect to future financial performance in the industry. These
forward-looking statements are provided for illustrative purposes
only and are not intended to serve as and must not be relied on by
any investor as, a guarantee, an assurance, a prediction, or a
definitive statement of fact or probability. Actual events and
circumstances are difficult or impossible to predict and will
differ from assumptions. Many actual events and circumstances are
beyond the control of Lavoro.
These forward-looking statements are subject to
a number of risks and uncertainties, including but not limited to,
the outcome of any legal proceedings that may be instituted against
Lavoro related to the business combination agreement or the
transaction; the ability to maintain the listing of Lavoro’s
securities on Nasdaq; the price of Lavoro’s securities may be
volatile due to a variety of factors, including changes in the
competitive and regulated industries in which Lavoro operates,
variations in operating performance across competitors, changes in
laws and regulations affecting Lavoro’s business; Lavoro’s
inability to meet or exceed its financial projections and changes
in the consolidated capital structure; changes in general economic
conditions, including as a result of the COVID-19 pandemic; the
ability to implement business plans, forecasts, and other
expectations, changes in domestic and foreign business, market,
financial, political and legal conditions; the outcome of any
potential litigation, government and regulatory proceedings,
investigations and inquiries; costs related to the business
combination and being a public company and other risks and
uncertainties indicated from time to time in the proxy
statement/prospectus filed by Lavoro relating to the business
combination or in the future, including those under “Risk Factors”
therein, and in TPB Acquisition Corp.’s or Lavoro’s other filings
with the SEC. If any of these risks materialize or our assumptions
prove incorrect, actual results could differ materially from the
results implied by these forward-looking statements. There may be
additional risks that Lavoro currently believes are immaterial that
could also cause actual results to differ from those contained in
the forward-looking statements.
In addition, forward-looking statements reflect
Lavoro’s expectations, plans, or forecasts of future events and
views as of the date of this press release. Lavoro anticipates that
subsequent events and developments will cause Lavoro’s assessments
to change. However, while Lavoro may elect to update these
forward-looking statements at some point in the future, Lavoro
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing Lavoro’s assessments as of any date subsequent to the
date of this press release. Accordingly, undue reliance should not
be placed upon the forward-looking statements.
Contact
Julian Garridojulian.garrido@lavoroagro.com
Tigran Karapetiantigran.karapetian@lavoroagro.com
Fernanda Rosafernanda.rosa@lavoroagro.com
Consolidated statement of financial position
As of June 30, 2023 and 2022(In thousands
of Brazilian reais - R$, except if otherwise
indicated)
|
|
|
|
2023 |
|
2022 |
| |
|
|
|
|
|
| Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash equivalents |
|
|
564,294 |
|
254,413 |
|
Trade receivables |
|
|
2,667,057 |
|
1,794,602 |
|
Inventories |
|
|
1,868,204 |
|
1,749,041 |
|
Taxes recoverable |
|
|
57,001 |
|
93,725 |
|
Derivative financial instruments |
|
|
40,410 |
|
7,677 |
|
Commodity forward contracts |
|
|
114,861 |
|
32,800 |
|
Advances to suppliers |
|
|
192,119 |
|
383,257 |
|
Other assets |
|
|
32,701 |
|
60,165 |
| |
|
|
|
|
|
| Total current
assets |
|
|
5,536,646 |
|
4,375,680 |
| |
|
|
|
|
|
| Non-current
assets |
|
|
|
|
|
|
Restricted cash |
|
|
139,202 |
|
1,344 |
|
Trade receivables |
|
|
41,483 |
|
39,751 |
|
Other assets |
|
|
8,390 |
|
2,473 |
|
Judicial deposits |
|
|
8,820 |
|
3,887 |
|
Right-of-use assets |
|
|
173,679 |
|
140,179 |
|
Taxes recoverable |
|
|
282,903 |
|
50,937 |
|
Deferred tax assets |
|
|
329,082 |
|
200,986 |
|
Property, plant and equipment |
|
|
196,588 |
|
146,205 |
|
Intangible assets |
|
|
807,192 |
|
724,321 |
| |
|
|
|
|
|
| Total non-current
assets |
|
|
1,987,339 |
|
1,310,083 |
| |
|
|
|
|
|
| Total
assets |
|
|
7,523,984 |
|
5,685,763 |
| |
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade payables |
|
|
2,575,701 |
|
|
2,301,700 |
|
Trade payables – Supplier
finance |
|
|
26,157 |
|
|
- |
|
Lease liabilities |
|
|
85,865 |
|
|
69,226 |
|
Borrowings |
|
|
922,636 |
|
|
681,217 |
|
Obligations to FIAGRO quota
holders |
|
|
150,018 |
|
|
- |
|
Payables for the acquisition of
subsidiaries |
|
|
221,509 |
|
|
111,684 |
|
Derivative financial instruments |
|
|
44,008 |
|
|
7,121 |
|
Commodity forward contracts |
|
|
207,067 |
|
|
27,038 |
|
Salaries and social charges |
|
|
223,376 |
|
|
187,285 |
|
Taxes payable |
|
|
37,105 |
|
|
34,216 |
|
Dividends payable |
|
|
1,619 |
|
|
411 |
|
Warrant liabilities |
|
|
36,446 |
|
|
- |
|
Advances from customers |
|
|
488,578 |
|
|
320,560 |
|
Other liabilities |
|
|
34,388 |
|
|
95,893 |
| |
|
|
|
|
|
| Total current
liabilities |
|
|
5,054,473 |
|
|
3,836,351 |
| |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Trade payables |
|
|
2,547 |
|
|
- |
|
Lease liabilities |
|
|
98,554 |
|
|
86,027 |
|
Borrowings |
|
|
42,839 |
|
|
29,335 |
|
Payables for the acquisition of
subsidiaries |
|
|
53,700 |
|
|
52,747 |
|
Provision for contingencies |
|
|
8,845 |
|
|
2,966 |
|
Liability for FPA Shares |
|
|
139,133 |
|
|
- |
|
Other liabilities |
|
|
223 |
|
|
1,119 |
|
Taxes payable |
|
|
963 |
|
|
- |
|
Deferred tax liabilities |
|
|
12,351 |
|
|
7,491 |
|
|
|
|
|
|
|
| Total non-current
liabilities |
|
|
359,155 |
|
|
179,685 |
| |
|
|
|
|
|
| Equity / Net
investment |
|
|
|
|
|
|
Net investment from the parent |
|
|
- |
|
|
1,451,647 |
|
Share Capital |
|
|
591 |
|
|
- |
|
Additional Paid-in Capital |
|
|
2,134,339 |
|
|
- |
|
Capital reserve |
|
|
14,533 |
|
|
- |
|
Other comprehensive loss |
|
|
(28,634 |
) |
|
- |
|
Accumulated losses |
|
|
(260,710 |
) |
|
- |
|
Equity attributable to shareholders of the Parent Company /
Parent Company's Net investment |
|
|
1,860,119 |
|
|
1,451,647 |
| Non-controlling
interests |
|
|
250,238 |
|
|
218,080 |
| Total equity / net
investment |
|
|
2,110,357 |
|
|
1,669,727 |
| |
|
|
|
|
|
| Total liabilities and
equity / net investment |
|
|
7,523,984 |
|
|
5,685,763 |
| |
Consolidated statement of profit or loss
For the years ended June 30, 2023, 2022 and
2021(In thousands of Brazilian reais - R$, except
if otherwise indicated)
|
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Revenue |
|
|
9,347,413 |
|
|
7,746,534 |
|
|
5,098,545 |
|
|
Cost of goods sold |
|
|
(7,616,606 |
) |
|
(6,421,037 |
) |
|
(4,362,657 |
) |
| |
|
|
|
|
|
|
|
| Gross
profit |
|
|
1,730,807 |
|
|
1,325,497 |
|
|
735,888 |
|
| |
|
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
|
|
|
|
Sales, general and administrative expenses |
|
|
(1,228,128 |
) |
|
(1,022,388 |
) |
|
(619,506 |
) |
|
Other operating (expenses) income,
net |
|
|
(275,810 |
) |
|
56,759 |
|
|
15,618 |
|
|
|
|
|
|
|
|
|
|
| Operating
profit |
|
|
226,869 |
|
|
359,868 |
|
|
132,000 |
|
| |
|
|
|
|
|
|
|
| Finance Income
(costs) |
|
|
|
|
|
|
|
|
Finance income |
|
|
371,060 |
|
|
426,933 |
|
|
227,099 |
|
|
Finance costs |
|
|
(988,867 |
) |
|
(646,377 |
) |
|
(312,892 |
) |
|
|
|
|
|
|
|
|
|
| Profit (loss) before
income taxes |
|
|
(390,938 |
) |
|
140,424 |
|
|
46,207 |
|
|
|
|
|
|
|
|
|
|
| Income
taxes |
|
|
|
|
|
|
|
|
Current |
|
|
37,499 |
|
|
(111,409 |
) |
|
(61,676 |
) |
|
Deferred |
|
|
134,757 |
|
|
78,747 |
|
|
37,000 |
|
|
|
|
|
|
|
|
|
|
| Profit (loss) for the
year |
|
|
(218,682 |
) |
|
107,762 |
|
|
21,531 |
|
| |
|
|
|
|
|
|
|
| Attributable
to: |
|
|
|
|
|
|
|
|
Net investment of the parent/ Equity
holders of the parent |
|
|
(260,710 |
) |
|
78,170 |
|
|
38,390 |
|
|
Non-controlling interests |
|
|
42,028 |
|
|
29,592 |
|
|
(16,859 |
) |
|
|
|
|
|
|
|
|
|
| Earnings (loss) per
share |
|
|
|
|
|
|
|
|
Basic, profit (loss) for the year attributable to net
investment of the parent/ equity holders of the
parent |
|
|
(2.29 |
) |
|
0.69 |
|
|
0.34 |
|
|
Diluted, profit (loss) for the year attributable to net
investment of the parent/ equity holders of the
parent |
|
|
(2.29 |
) |
|
0.69 |
|
|
0.34 |
|
Consolidated statement of cash flows
For the years ended June 30, 2023, 2022 and
2021(In thousands of Brazilian reais - R$, except
if otherwise indicated)
|
|
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
| |
|
|
|
|
|
|
|
| Operating
activities: |
|
|
|
|
|
|
|
| Profit (loss) before
income taxes |
|
|
(390,938 |
) |
|
140,424 |
|
|
46,207 |
|
| Adjustments to
reconcile profit (loss) for the year to net cash
flow: |
|
|
|
|
|
|
|
|
Allowance for expected credit losses |
|
|
36,769 |
|
|
27,393 |
|
|
11,094 |
|
|
Listing expense |
|
|
319,554 |
|
|
- |
|
|
- |
|
|
Foreign exchange differences |
|
|
(10,955 |
) |
|
1,957 |
|
|
(12,759 |
) |
|
Accrued interest expenses |
|
|
844,885 |
|
|
594,076 |
|
|
295,169 |
|
|
Interest arising from revenue contracts |
|
|
(250,337 |
) |
|
(407,449 |
) |
|
(204,744 |
) |
|
Loss (gain) on derivatives |
|
|
(79,375 |
) |
|
26,323 |
|
|
4,883 |
|
|
Interest from tax benefits |
|
|
(27,153 |
) |
|
- |
|
|
- |
|
|
Other finance loss, net |
|
|
24,122 |
|
|
22,440 |
|
|
12,042 |
|
|
Fair value on commodity forward contracts |
|
|
98,674 |
|
|
(9,200 |
) |
|
(6,337 |
) |
|
Amortization of intangibles |
|
|
67,927 |
|
|
57,607 |
|
|
29,717 |
|
|
Amortization of right-of-use assets |
|
|
56,236 |
|
|
51,203 |
|
|
17,997 |
|
|
Depreciation |
|
|
16,408 |
|
|
9,697 |
|
|
5,717 |
|
|
Losses and damages of inventories |
|
|
19,127 |
|
|
23,339 |
|
|
9,808 |
|
|
Gain on bargain purchase |
|
|
- |
|
|
(18,295 |
) |
|
- |
|
|
Provisions for contingencies |
|
|
5,879 |
|
|
(11,998 |
) |
|
(3,564 |
) |
|
Share-based payment expense |
|
|
14,533 |
|
|
- |
|
|
- |
|
|
Others |
|
|
(2,681 |
) |
|
(26,495 |
) |
|
(7,484 |
) |
| |
|
|
|
|
|
|
|
| Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
Trade receivables |
|
|
(608,550 |
) |
|
19,563 |
|
|
262,671 |
|
|
Inventories |
|
|
49,745 |
|
|
(721,602 |
) |
|
5,745 |
|
|
Advances to suppliers |
|
|
191,138 |
|
|
74,542 |
|
|
(201,351 |
) |
|
Derivative financial instruments |
|
|
(32,732 |
) |
|
(7,677 |
) |
|
- |
|
|
Taxes recoverable |
|
|
(66,345 |
) |
|
(41,685 |
) |
|
(23,374 |
) |
|
Other receivables |
|
|
77,567 |
|
|
(6,765 |
) |
|
4,493 |
|
|
Liabilities |
|
|
|
|
|
|
|
|
Trade payables |
|
|
(117,567 |
) |
|
273,611 |
|
|
(316,575 |
) |
|
Advances from customers |
|
|
106,903 |
|
|
(207,440 |
) |
|
187,035 |
|
|
Derivative financial instruments |
|
|
116,262 |
|
|
(24,328 |
) |
|
(14,250 |
) |
|
Salaries and social charges |
|
|
36,091 |
|
|
91,540 |
|
|
46,363 |
|
|
Taxes payable |
|
|
(3,360 |
) |
|
(39,463 |
) |
|
25,518 |
|
|
Other payables |
|
|
(66,051 |
) |
|
(2,237 |
) |
|
25,051 |
|
| |
|
|
|
|
|
|
|
| Interest paid on
borrowings |
|
|
(95,739 |
) |
|
(7,401 |
) |
|
(30,424 |
) |
| Interest paid on trade
payables and lease liabilities |
|
|
(346,749 |
) |
|
(360,665 |
) |
|
(208,938 |
) |
| Interest paid on
acquisition of subsidiary |
|
|
(4,875 |
) |
|
(14,907 |
) |
|
(2,797 |
) |
| Interest received from
revenue contracts |
|
|
206,430 |
|
|
310,967 |
|
|
179,796 |
|
| Income taxes
paid |
|
|
(76,775 |
) |
|
(76,546 |
) |
|
(85,682 |
) |
| |
|
|
|
|
|
|
|
| Net cash flows from
(used in) operating activities |
|
|
108,068 |
|
|
(259,471 |
) |
|
51,027 |
|
| |
|
|
|
|
|
|
|
| Investing
activities: |
|
|
|
|
|
|
|
|
Acquisition of subsidiary, net of cash
acquired |
|
|
(157,442 |
) |
|
(198,305 |
) |
|
(280,374 |
) |
|
Additions to property, plant and equipment and intangible
assets |
|
|
(65,376 |
) |
|
(47,697 |
) |
|
(34,940 |
) |
|
Proceeds from the sale of property, plant and
equipment |
|
|
2,084 |
|
|
1,309 |
|
|
4,242 |
|
| |
|
|
|
|
|
|
|
| Net cash flows used in
investing activities |
|
|
(220,734 |
) |
|
(244,693 |
) |
|
(311,072 |
) |
| |
|
|
|
|
|
|
|
| Financing
activities: |
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
1,449,445 |
|
|
615,984 |
|
|
466,280 |
|
|
Repayment of borrowings |
|
|
(1,456,017 |
) |
|
(299,613 |
) |
|
(472,909 |
) |
|
Payment of principal portion of lease
liabilities |
|
|
(60,570 |
) |
|
(45,814 |
) |
|
(7,957 |
) |
|
Proceeds from FIAGRO quota holders, net of transaction
costs |
|
|
150,018 |
|
|
- |
|
|
- |
|
|
Trade payables – Supplier finance |
|
|
16,569 |
|
|
- |
|
|
- |
|
|
Dividend payments |
|
|
(2,277 |
) |
|
(139,512 |
) |
|
- |
|
|
Proceeds from SPAC merger, net |
|
|
391,572 |
|
|
- |
|
|
- |
|
|
Acquisition of non-controlling interests |
|
|
(100,887 |
) |
|
(34,351 |
) |
|
(79,493 |
) |
|
Capital contributions |
|
|
60,880 |
|
|
202,425 |
|
|
655,085 |
|
| |
|
|
|
|
|
|
|
| Net cash flows
provided by financing activities |
|
|
448,733 |
|
|
299,119 |
|
|
561,006 |
|
|
|
|
|
|
|
|
|
|
| Net increase
(decrease) in cash equivalents |
|
|
336,068 |
|
|
(205,045 |
) |
|
300,961 |
|
| Net foreign exchange
difference |
|
|
(26,187 |
) |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
| Cash equivalents at
beginning of year |
|
|
254,413 |
|
|
459,458 |
|
|
158,497 |
|
| |
|
|
|
|
|
|
|
| Cash equivalents at
end of year |
|
|
564,294 |
|
|
254,413 |
|
|
459,458 |
|
Lavoro (NASDAQ:LVRO)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024
Lavoro (NASDAQ:LVRO)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024
