Adecoagro S.A. (AGRO) Earnings

Management highlights

- Consolidated Financial Performance * Consolidated pro forma gross sales reached $535 million in Q2 2026 and $928 million year-to-date, in line with prior periods despite mixed price/volume dynamics across segments * Consolidated adjusted EBITDA hit new records at $173 million in Q2 and $258 million year-to-date, driven by the strong performance of the fertilizers segment * Net leverage stands at 3x pro forma, consistent with the company's deleveraging path, and liquidity improved to 1.9x (from 1.2x last quarter), supporting short-term obligations * A $35 million total annual dividend is approved, with the first $17.5 million installment paid in May and the second scheduled for November - Capital Allocation and Acquisitions * The Carapo Mill acquisition remains pending customary closing conditions, expected to close in the coming weeks, with cash purchase price paid at closing * The acquisition is expected to be immediately accretive, will not alter the company's deleveraging progress or change its full-year net debt to EBITDA target * Profertil acquisition final payment of ~$400 million was completed in the first half * Organic growth investments are ongoing, including sugarcane plantation expansion, biomethane operations, new agricultural machinery, and a new cheese packaging line at the Morteros dairy facility - Operational Highlights * Fertilizers: Higher plant utilization and zero unplanned downtime drove production growth, with the company capturing the price surge from Middle East conflict-related supply disruptions * Sugar, Ethanol and Energy: Sugarcane conditions are excellent, productivity improvements from past investments are paying off, and crushing volume growth is on track with low double-digit full-year growth expected; the segment maintains flexible production to shift between sugar and ethanol for maximum margins * Food and Agriculture: Cost reduction initiatives are in place, and margin improvement is expected over coming quarters; dairy processed volumes are growing, supported by new consumer product launches

Guidance

- Full-year fertilizers segment EBITDA is now expected to be above original initial projections, driven by higher prices captured in the first half and a largely fixed cost structure - Full-year sugar, ethanol, and energy segment crushing volume is still expected to deliver low double-digit year-over-year growth, with full-year cash cost reduction of 10% compared to last year still achievable despite temporary quarterly cost distortions - Profertil full-year urea sales volume is confirmed to reach 1.3 million tons, with lower Q2 sales only a timing shift from strategic inventory holding for higher future prices, not a permanent downward revision - Net debt to EBITDA leverage is expected to decline as full-year EBITDA generation increases, and the company's year-end deleveraging target remains unchanged - No significant increase in Food and Agriculture planted area is expected for the 2027 campaign, with management remaining focused on planting only high-return areas

Segment performance

1. Sugar, Ethanol and Energy: Adjusted EBITDA was $53 million in Q2 2026 and $94 million year-to-date. The segment crushed 3.5 million tons of sugarcane in Q2, up 3% year-over-year, with a 78% ethanol production mix year-to-date (maximizing ethanol for its higher premium over sugar). Revenue declined in the quarter due to lower sugar prices and volumes from the production mix shift, and the segment held 41% of year-to-date ethanol production in inventory to capture higher future margins. This segment contributed 20.5% of consolidated Q2 gross sales and 30.6% of YTD adjusted EBITDA. 2. Fertilizers: Urea production increased 22% YoY in Q2, with zero unplanned downtime, bringing year-to-date production to 617 thousand tons (well above last year's weather-disrupted levels). Adjusted EBITDA more than doubled both in the quarter and year-to-date, driven by higher international urea prices (peaking near $800/ton), higher production volumes, and operational efficiencies. This segment was the primary driver of the company's record consolidated adjusted EBITDA. 3. Food and Agriculture: 92% of planted area was harvested by end of July, with yields above the prior campaign and total crop production over 1.1 million tons. Dairy processing volumes increased YoY due to higher raw milk productivity. Year-to-date results still reflect lower commodity prices and higher dollar-denominated costs, but Q2 revenues and adjusted EBITDA improved YoY on higher production and gradual margin recovery as new harvest sales began. This segment contributed roughly 25-30% of consolidated gross sales for the period.

Risks & headwinds

- Forward-looking statements are inherently subject to risks and uncertainties, as they depend on future circumstances that may not occur; actual results may differ materially from projections due to general economic conditions, industry conditions, and other operating factors - Sugar and ethanol segment production costs were negatively impacted by appreciation of the Brazilian real, creating foreign exchange pressure on margins - Domestic ethanol prices in Brazil declined sharply in Q2 due to elevated market supply, forcing the company to hold large inventories rather than selling at depressed prices - Global sugar prices have not yet rallied to the levels implied by current tightening fundamentals, with the outcome dependent on unpredictable weather conditions in major producing countries - Fertilizer prices are volatile, having moderated from the peak levels reached in Q2 2026 - Argentine agricultural performance depends on El Niño weather patterns, which while expected to be positive for Adecoagro, still carry inherent weather-related uncertainty - The Carapo Mill acquisition is still subject to customary closing conditions that may delay or prevent completion

Analyst Q&A

• Q: Why is there a mismatch between Profertil's Q2 urea production and sales volumes, and will full-year sales hit the 1.3 million ton target? /

  A: The mismatch is purely a deliberate timing shift driven by sales strategy, not an inability to sell output. Profertil will definitely hit the full-year 1.3 million ton sales target, as Argentina's domestic demand of 2.5 million tons easily absorbs the company's full production. The company held back sales in June after Q2 prices dropped below expected future levels, after maximizing sales in April when prices hit a peak from the Middle East conflict, to sell inventory later at higher prices.

• Q: Is the 10-15% cash cost reduction target for sugar and ethanol still on track, and what synergies and cost impacts will the Carapo Mill acquisition bring? /

  A: The 10% full-year cost reduction target is still achievable: 10% higher planned crushing volume drives cost dilution, lower leasing costs from Consecana prices and headcount reductions from new harvesting technologies offset higher diesel and fertilizer costs. Carapo will act as an extension of the existing Mato Grosso do Sul cluster, with potential to almost double its current crushing volume. The company expects significant synergies from shared G&A structure, existing logistics assets, and existing surplus cane from the current cluster that can be crushed at Carapo, with only small incremental CapEx needed for improvements. Cane quality at Carapo is already good, and the company can quickly adjust cultivation practices to boost yields further.

• Q: How will a new competitor greenfield urea plant in Argentina impact Profertil, and what is the timeline and triggers for Profertil's brownfield expansion? /

  A: The South American urea market totals 10 million tons of annual consumption that is currently not met by domestic production, so the new 2.1 million ton plant (not coming online for 4-5 years) does not saturate demand. Profertil expects to remain the lowest-cost producer in the region, as regional natural gas prices are expected to decline with growing Argentine gas exports, keeping Profertil's input costs competitive. Profertil continues to work on engineering and analysis for its brownfield expansion, which benefits from major synergies with existing assets, but has not set a final investment decision, and will prioritize maintaining the company's low-cost position and deleveraging goals before moving forward.

• Q: What is your ethanol commercial strategy given current low prices, and are you accelerating sugar sales on the recent rally? What is the impact of El Niño on Argentine farming? /

  A: Low ethanol prices stem from high supply from sugarcane harvesting and corn ethanol production; the company is holding inventory and shifting production mix to sugar to reduce supply, and already sees early signs of recovering demand and prices. The company has enough storage capacity for current inventories, and will gain extra storage from the upcoming Carapo closing. On sugar, the company is taking advantage of the recent rally to increase hedging: 70% of 2026 production is hedged at $0.157 per pound, and 16% of 2027 production is hedged at $0.174 per pound. For Argentine farming, El Niño is expected to be a positive: it will normalize and boost crop yields, lift rice prices (a key product for the company), and increase domestic urea demand, all benefiting Adecoagro.