Adecoagro S.A.

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to ADECO Agro's 2025 Results Conference Call. Today with us, we have Mr. Mariana Bosch, CEO, Mr. Emilio Neco, CFO, Mr. Renato Junqueira Pereira, Sugar, Ethanol and Energy VP, and Ms. Victoria Cabello, Investor Relations Officer. We would like to inform you that this event is being recorded and all participants will be in listen-on mode during the company's presentation. After the company's remarks are completed, there will be a question and answer section. At that time, further instructions will be given. Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of ADECO Agro's management and on information currently available to the company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of ADECO Agro and could cause results to differ maturely from those expressed in such forward-looking statements. Now, I will turn the conference over to Mr. Marliano Bosch, CEO. Mr. Bosch, you may begin your conference.

Good morning and thank you for joining ADECOagro's 2025 results conference. Today we are presenting a larger, further diversified and more resilient ADECOagro, but with the same DNA, being the lowest cost producer. Upon acquiring Profertil, we became the largest producer of urea in South America, This new operation marked a transformational milestone for us as it broadened our production capabilities, more than doubled our cash generation, and reduced earnings volatility by incorporating a stable, consistent, and already cash-generating business. We are adding a unique asset in Argentina to our well-diversified agroindustrial portfolio. with the capacity to expand its earnings and cash potential by leveraging on Argentina's largest natural gas reserves. As we rely on natural gas to produce urea, greater extraction will translate into further supply at a more competitive prices. We also have a huge market opportunity of reaching a wider demand in South America that today must rely on imports from faraway origins such as the Middle East. Due to the ongoing international conflict, urea prices have peaked and we are very well positioned to capture this upside. As most of our production is still open to market prices, and our gas supply remains secure and at a fixed price. The acquisition of Profertil would not have been possible without the continued support of our shareholders. We raised $300 million in new equity, anchored by Taylor, our controlling shareholder, further reinforcing their commitment to the company's long-term strategy. Given this incorporation, we decided to simplify the way we view our businesses and move to three segments. The sugar, ethanol and energy business, the fertilizer business, and the food and agriculture business. All which Emilio will get into more details shortly. Now looking back to 2025, It was a challenging year for the agribusiness sector as commodity prices reached the low end of the cycle. Today's prices remain under pressure, but with a focus on efficiency and being the low-cost producer, we will be able to continue navigating the cycle. Higher crashing in Brazil will drive further cost dilution, which will partially mitigate the lower sugar prices. In Argentina and Uruguay, better productivity will turn into margin expansion and greater results. On top of this, we expect a normalized and full year of operations from the fertilizer business driving federal cash generation. To conclude, I would like to acknowledge all the people in ADECOagro for their hard work in this tough context, I am convinced that if we remain focused on the lowest cost producer in each of our sustainable production models, we can further expand our earnings potential. Now, I will let Emilio walk you through the numbers of the year.

Thank you, Mariano. Good morning, everyone. Before entering into the results of the year, I would like to make a preliminary observation with the intention to provide more clarity in the understanding of the numbers we are presenting today. Following the acquisition of Profertil on December 18, 2025, our consolidated interim financial statements incorporate Profertil's income statement only for a 13-day period under a new business unit named Fertilizers. Additionally, In an effort to update and simplify the way we view our business units from the beginning of January 2026, the company will change the business segment reporting structure as follows. Segment number one, sugar, ethanol and energy business, as previously known. Segment number two, the fertilizers business. This includes the manufacturing and commercialization of fertilizers, And lastly, segment number three, Food and Agriculture Business, which reflects an integrated business focused on agriculture and food production that in the past were presented through three separate verticals, crops, rice, and dairy. Please turn to page four, where you can see how the acquisition of ProFertil supports our scale. On a pro-formal annualized basis, consolidating the 2024 and 2025 results of our fertilizer business, ADECO Agro increased its size from a base of $1.5 billion in recurring revenues and a mid-cycle adjusted EBDA of more than $400 billion and cash generation of $150 million to to above the $2 billion sales threshold with the potential to generate $700 million in adjusted EBITDA and to double its cash generation. In addition, the acquisition further diversifies our portfolio, as illustrated in the coin chart at the top right, thereby strengthening the company's ability to perform across cycles. please turn to page 5 of the presentation. As we have been anticipating over the previous quarters, 2025 was a challenging year marked by lower commodity prices, mixed productivity, and higher costs in U.S. dollars, which resulted in a year-over-year decrease of 2% in sales and 38% in adjusted VTAs. On top of that, Verilizer's financial results were affected by two events which resulted in approximately 90 days of downtime. First, Profertil carried out the largest scheduled turnaround of its plant, resulting in a full shutdown of 54 days starting on October 16th and ending on December 8th, shortly before our acquisition of the company. And second, a 31-day downtime due to the flooding of a third-party gas distributor that interrupted the delivery of gas to the plant. As a result, again, on a pro forma basis, assuming full-year results of our fertilizers business for both 2025 and 2024, revenues were down 6% compared to the prior year, whereas adjusted EBTA generation declined by 35% year-over-year. We expect a full recovery in the fertilizers business adjusted to BTA as operations return to normalized levels. At Areco Agro, we have always leveraged on low-cost production and product and geographic diversification to mitigate commodity price volatility and adverse weather events to inherent risks within the agribusiness segment. With the incorporation of the fertilizer segment, we have moved to three equal-sized revenue streams and a more diversified and less volatile cash generation across our geographies and products, as shown in the pie charts at the bottom of the slide. Regarding the acquisition of Profertil, we would like to make now a brief summary. Please move to page 6 of the presentation. We closed the transaction during mid-December for a total consideration of $1 billion for the 90% equity interest. From this amount, $676 million had already been paid by December 31st, with the remaining balance to be paid in the first half of 2026. As of today, the outstanding balance is approximately $50 million that will be settled before the end of this month. The transaction was financed through a combination of cash balances in the amount of $400 million approximately, two new long-term debt facilities of $200 million each with a seven-year tenor, two-year grace period at attractive rates, and an equity issuance of $300 million marking Agro's return to the public markets since its IPO in 2011. At the same time, we continue to invest in organic growth projects throughout our operations, as outlined in the box on the right-hand side of the slide. Please direct your attention to page 7, where we present our debt profile. Our net debt and net leverage ratio increases compared to prior periods, explained mainly by the financing of the acquisition of Propertil and the lower results of the year. On a pro forma basis, net debt reached $1.5 billion, whereas our net leverage increased to 3.3 times compared to 1.2 times in 2024. Despite this, it is worth noting that the company's full capacity to repay short-term debt with its cash balance. Most of our indebtedness is in the long term, and its currency breakdown matches one of our revenues, mitigating currency risk. Going forward, we intend to reduce our leverage ratio through higher expected adjusted VDA generation, mainly from our fertilizers business, together with a revision of our capital allocation strategy. In this sense, we have reviewed our shareholder distribution program in light of our capital allocation priorities and the lower results generated. Accordingly, our Board of Directors approved the distribution of $35 million in cash dividends for 2026, subject to approval at our Annual General Shareholders Meeting. Moving to the financial and operational performance of our business units, let's start with the sugar, ethanol and energy business on slide 9. The weather during the last quarter of 2025 was characterized by above average rainfall, which reduced the amount of effective milling days and therefore limited our ability to reach a crushing volume in line with 2024. Nevertheless, the cane left-hand harvested at year-end benefited from these four favorable rains, showing excellent yields and is currently being harvested under our continuous harvest model while maximizing ethanol production. Cane productivity recovered significantly during the fourth quarter of 2025, as seen on the graph at the top left of the slide, positively impacting the mark-to-market of our biological assets on greater expected yields for the upcoming quarters. In terms of mix, we achieved a 72% ethanol mix during the quarter and a 58% mix for the full year, as ethanol prices substantially improved during the second half of 2025, becoming the product with a better margin. Although we maximize ethanol and largely increase the amount of volume sold at greater prices, annual sales remain below the prior year on lower global sugar prices and volume sold. Despite the declining milling, our cash cost, which reflects how much it costs us to produce one pound of sugar and ethylene in sugar equivalent, remain unchanged, at 12.8 cents per pound. This is explained by a more efficient upgrade of our machinery, which in turn reduced our annual maintenance capex, together with an increase in tax recovery, giving higher ethanol sales. Overall, adjusted VTA for the year ended at $292 million below 2024's performance. Looking at 2026, we foresee a low double-digit growth in our crushing volumes due to better productivity and a full year of ethanol maximization given the current price scenario. On the following page 11, we present for the first time the fertilizer's business. As previously mentioned, The acquisition was concluded in mid-December and, therefore, our financial statements only include the Profitability Income Statement for a 13-day period. For comparison purposes, we present Properties' full-year results and its main drivers. In 2025, as we described earlier today, The fertilizer plant experienced two major stoppages, resulting in 90 days of downtime, which adversely affected results. Net sales and adjusted VTA declined year over year as fewer operating days throughout the year reduced production volumes despite higher prices for both urea and ammonia. For 2026, we expect a full recovery in adjusted VDA generation, driven by normalized operations compared to the prior year, and a positive market price outlook. In the case of our farming business, now food and agricultural business, 2025 results were pressured by a combination of lower commodity prices, mainly in rice and peanuts. uneven yields, and higher costs in U.S. dollar terms. The top line of this business remained in line versus the previous year due to higher volumes sold, which, in turn, partially offset declining prices as seen on slide 13. Nevertheless, adjusted EVPA was negatively impacted by the increasing costs and uneven performance at the farm level. Looking ahead, we have implemented cost initiatives to improve margins, including a 22% reduction in total planted area through the renegotiation of our lease agreements. We have also increased the share of rice varieties due to more resilient prices, while also leveraging on our production flexibility to produce dairy products for the domestic and export market based on marginal contribution. Before concluding this presentation, I would like to share a few brief closing remarks. Over the years, Adequado has demonstrated a strong track record of delivering consistent results and generating cash flow, notwithstanding commodity price cycles and adverse weather events. With the incorporation of the fertilizer business, we have effectively doubled the size of the company, further enhanced the stability and visibility of our cash generation, and positioned ADECO Agro in a new league in terms of scale and relevance. We acquired a state-of-the-art asset and a cash-generating business with immediate earnings contribution and limited execution risk. As a result, we are today a significantly stronger and more resilient company with enhanced diversification and a more robust earnings profile. We are very enthusiastic about the company we are building and the long-term value that this transformational milestone is expected to deliver for all of our stakeholders. Thank you very much for your time. We will now open the call to questions.