AGFS - Earnings call transcript Q4 2021

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Operator

Good afternoon, and welcome to the AgroFresh Solutions Fourth Quarter and Full-Year 2021 Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Mr. at Relations Investor Sonnek, ICR. Jeff ahead. Sir, please go

Jeff Sonnek

on other and events. based will Thank Reform current of Clint forward-looking number by to statements. results Chief statements the Officer. today's meaning and statements, These beliefs, presentation statements Safe XXXX. actual in contain could and the risks you, good historical well afternoon. expectations Financial are forward-looking Private uncertainties unknown of call are as cause the during comments provisions are and discussed and the of be The results accompanying Lewis, within Act facts considered of statements than statements Miao, assumptions Such presentation subject management's forward-looking as led differ a Graham Today's the to from that Harbor statements. and concerning Chief of known the future Officer, forward-looking Executive materially Litigation Securities All

in identified for Relations their the be call section to the financial non-GAAP now release, Some turn to GAAP to I'd of certain well this the refer like as measures Please these directly press in discussed refer today. website also measures. SEC. non-GAAP risks filings are agrofresh.com, over which Lewis. as comparable presentation, found to in financial reconciliations to tables most and and the of We'll can the Investor with Clint? of our measures With slides Clint the accompany that the uncertainties included Company's that,

Clinton Lewis

recognizing call. begin to Jeff, would and the the like in by welcome you, conflict Thank Ukraine. I on to everyone

do using some as operations our some have well located as we have partners some with customers don't exposure, we of products. local in the While country,

we conflict. With with charitable thoughts hope how sales we delayed and such, that, a are previously support best on EBITDA. me goal achieving season with address in both the our and our completed adjusted through a our have This net that due note to full-year recognized quarter. support organizations. Hemisphere importantly, send performance customers for despite met been season local actively partners a for high speedy impacted assessing by and can and our impacts. the our those resolution We weather our to expectations we fourth net consistent We strong As let of quarter was discussed consolidated Northern our sales start XXXX to to growth the growth and want

XXXX, position post-harvest successfully reallocated full-year SmartFresh was growth metric. increase in our a Beyond performance resources for necessary meeting to leadership advanced for to R&D franchise and Diversification the our growth and industry four growth by new We gains the adding the this goals, consecutive respects. financial quarters the several our strategy, diversification which and off pivotal solutions. across continued of double-digit defend XXXX standard functions, business we XX.X% our remains through commercial we apple expertise with in in fueled capping important senior

waste in our diversification in adjusted net growth highlighting commercial I excited ESG inaugural through again Looking and committed XXXX, significant continuing to in new I are helping address report, announce say food humans greater. loss each for products solutions driving do. once is produced ahead a food theme both to what fruit that never all wasted S am help our continued address and for The including the just in been sustainability and need we of and of also sales plays and are long third we meaningfully The released that leadership XX% has year, to and is their we perishing And company critical very execution. part in to before a who food one AgroFresh delivering am and EBITDA fruits this effort. and not It we E is for fresh as our growth and our strong to vegetables expertise customers decade's or a of focus produce Nearly solutions commitment of the the core goals. loss and consumption. achieve proud to and experience to are of AgroFresh. the waste issue role that sector ESG

solutions. and on reinforces leader and environment. We are report, our globally the global goals that set commitment experienced waste announced we've ESG to scale of its post-harvest in impact In new a reduce our food

next a of continue. our ESG and the momentum that we that commitment ensure our action five Over range setting impact will years, and are steps

ongoing technologies efforts support like our and identifying leveraging solutions of driving sustainable our new coatings. VitaFresh customer's goals, sustainability to or devoted line be adoption to Our existing new and plant-based Botanicals will innovation and solutions the

We focus the will business the and part for our enhance and racial into drivers ethnic I'll do of by also all it quarter. a at our seek to in making that, gender, our company. diversity With transition to industry, encourage levels

additional assist your of business details monitor grow the in strategy deck The the of are with further on we to reminder, understanding Relations both on providing can be found and a Investor geographical As earnings basis. our disclosures solutions diversification, you progress to our and the website. our through supplemental product

expect contributor be standout we as year, Our to engine diversification all category growth continue growth the we was will to of ahead. move a and

our excluding solutions XXXX and in business year apples, we the XX, XX% SmartFresh the versus category year diversification this for at ended of grew other technologies, which our and as XX.X% represented approximately define look prior all revenues you December covering total category If crop XXXX. for

fourth diversification there points sequential the and an basis of quarter basis XXXX resilience increase We XX full-year the an third results. from business effective our was and do versus modest a versus lower for decreasing apple a while XXX to job, increase to fourth been SmartFresh past of SmartFresh ongoing basis, XXXX. the approximately our points quarter of about price relative competition mix to given on the Focusing this team am XXXX franchise, competitors. in stable our questions pleased a XXXX. And quality in relatively the year quarter approximately defending of for our versus of saw continues apple prior lower business. On X.X% that report have I

while number we increasing gains been are customers. has erosion customers by lower engagement, volume driven of the price, seeing strong and underlying customer have that Importantly, returning under there in some attrition been long-term customer contracts,

to maintain continue high We of products the quality teams. commercial supported and industry-leading margins technical by and our

growth defend continue was weather. and prior the sales Middle adverse season growth impact This known Europe, against for Europe. to also will these use our windows business, year apple geographies region, helps expect varied Southern to period. relative of ongoing certain the varieties that certain harvest can diversification While across of fueled natural agriculture which to versus we Success be in East Europe well From by diversification for growth such Harvista and to successful fourth sales one the have of was largest in the Further, we in permits as harvest emergency and hedge year, sale any in and Africa risks perspective, due the as contributor continued as platforms, prior strategy. a timing our experienced Apple XX% quarter our by geographical driven build variables SmartFresh results. products, to on the our crops, minimizes a diversification following

fourth unprecedented apple markets quarter our the North the due volumes geographic Latin a out product to From in resulting other particularly in the market of achieved of our Northwest. declined our Rounding prior XX% on are a Pacific expected, Asia wave of and the This mix we had sales in effect categories. storage. year the XX.X% respectively impacted that heat solutions America quarter grew quarter perspective, primary each negative versus and across in largest Pacific, yield which and an discussed XX% during As as growth last the period. production, quality lower second America

I'd quarter, contribution Harvista of includes XX% as continued represents terms sales beyond to category, EthylBloc. our apples This to other versus Other geographies. into X-MCP X-MCP the which In solutions crops focus our of and grew and franchise quarter key fourth highlight our such the Other SmartFresh leverage driven and for million were chain momentum ahead performance quarter as apple Harvista of as fourth of diversification for to with SmartFresh EthylBloc pleased contributed We growth. holidays. SmartFresh key XXXX and I that by business supply increase $X.X in our disruption the prepared growth industry mentioned and well. in The fourth flower

of contribution expected upside their versus the prior million to significant expectation was While $X.X of X%, In is extend highly high exceeded advantageous dollar carries the that to we to of fruit to a situations, growers declining relative quarter, expectation reflects apple SmartFresh the higher season packers varieties in utilizing as is see the size for growing quality this in the value The window value. our the a sales the of and maximize category commensurate year. modest and business. Furthermore, marketing fourth these late food. the we

continues and $X.X increase and citrus driven second highest fourth with to well in by quarter contributor versus in a Our the growth grew same Results Fungicides perform increased were & the Disinfectants last million XX% was category year. quarter production to Morocco. the

to EBITDA were loss prior be seek other better-than-expected drive preserve is continuous pleased provide broader focus adjusted pillars growth for growth. In solution incremental a in forward operating diversification focus for will to We of to market results solutions, line, full-year within segments element important life, quarter of with to and superior SmartFresh strategy XX%. our Coatings strong delivered penetration for citrus execution expectation want category going avocados. is We we demonstrated were partnerships. a Coatings performer of waste, apple of Fourth our our strong edible will shelf of These such of and but business, recognize year business eating our fruits posting sales experience. and fungicide our in fourth Botanicals moving plant-based double-digit team their a to XXXX on experienced exhibited forward. grow our reduce supported diversification geographies. and were quarter the full-year a become I all VitaFresh summary, is A food for grow extend and and America, increasingly pillars categories for pome this of the is which in we we as and Additionally, freshness, which with key with our beyond line coatings by improved basis important our across was commitment as key the plan commercial growth Latin new period, our quarter on to this results. strategic our another XXXX. performance key we continued

the that to some highlights. growth I'll developing new now Graham the to Graham? strategy. team well is to diversification to continue to financial and have pass We of positioned an experienced make to capabilities great call advance progress our speak

Graham Miao

fourth quarter Good to our Thank XXXX Northern quarter afternoon you, million season. Clint. the $XX.X increased sales fourth the X.X% of to The completes compared in quarter to for million Hemisphere XXXX. Net $XX.X fourth of everyone.

Excluding foreign revenue the currency of impact exchange, XX%. increased

sales lower by growth offering, North favorable prior extreme As in in in offset Disinfectants for quarter. compared expansion X-MCP our a increase was growth Other Europe SmartFresh a driven for heat. categories superior of sales mentioned, diversification to market due due million strong portfolio million America by supported full-year weather service net $XXX.X volume X.X% by to Net strong & year. drove solutions. XXXX Market our increased in product $XXX for Fungicides the diverse Clint the to in our primarily and the to Southern apple was position experienced partially late-season which

quarter business prior SmartFresh prior the increased our the XX.X% variance was outpaced compared during region primarily as year. for United X.X% production was The to by The Foreign in States. Hemisphere, apple that transition strong impacted quarter. year sales apple in Gross to by currency million growth to profit first a $XX.X the the more for wave net heat growth product XX.X% margin driven $XX.X performance period. fourth diversified the year sales Southern in in a in exchange the large half an increase diversification had from period. reflects as Northwest our offset million partially for compared a unprecedented diversification margin the portfolio impact the Pacific profit a to growth in Gross and negligible revenue

strategy. we generating margin, profit gross dollar diversification While maximize always through is to our primary growth strive consistent focus with on growth our

For year XXXX prior to quarter the X.X% increased projects. $XXX the the Research full-year in of the in million and gross were primarily by costs timing driven million to million. XXXX, $X.X compared of period fourth profit $X development

million additional $X.X which increased compared For the million was period, XXXX, the full-year in with to R&D year to consistent activities the plan our pandemic-induced to $XX.X following constraints prior XXXX. drive

expenses SG&A and in diversification to offerings technical expansion offerings lower to in in support services new driven R&D commercial in quarter period, develop alignment with geographies, product of prior XXXX of crops administrative the for expand the strengthen coatings investment Our expand decreased compared by our fourth our $XX.X provides new to million registrations as solutions, increased and to our million year $XX.X X.X% expenses. plans. proprietary

resource We continue growth revenue toward discipline and to allocation the be focused as generating organization we thoughtful on expense activities. and steer the

consistent to the X.X% out XXXX, decreased year net we net full-year the brought is million, in important we expectations which with demonstrates income and For million laid SG&A previously of $X.X $X.X was to expenses loss the quarter $XX.X indicator. period. Fourth performance million compared XXXX the to this attention prior

million was the $X.X XXXX, prior net full-year in compared the loss of For period. loss million $XX year net to

million PSP valuation EBITDA fourth quarter million $X.X million As the the a XX.X% compared XXXX, to investment. the to the related allowance tax of as in Adjusted prior million reminder, during provision $XX.X in by recorded year the to or $XX.X XXXX period. increased in a $XX.X company

prior XX.X% for to of diversification cash impact The largely continued year which compared mix higher For period. quarter, and Adjusted X.X% full-year and to fourth compared million the adjusted due the was EBITDA the EBITDA product in was the period. XXXX of margin due XXXX, year adjusted to lower in primarily flow sales EBITDA to the full-year a $XX increase the XX.X% this from provided our $X.X was expenses million compared operating $XX.X $XX.X an in million $XX.X increased the prior year. million our in prior from reflects The was prior The for driven in to benefit year to XXXX cash XXXX, operating for proceeds the the million strength non-recurring period, strategy. of normalized cash million million full-year $XX.X the increase prior versus approximately year. of December ended flow by million approximately of Adjusting full-year extraordinary one-time two in was cash for versus mainly normalized cash operations flow XX, the operating year $XX year, normalized operations prior the $XX.X operating flow income operations in the variables. of increase the and of litigation from

the in senior achieved refinancing on in XXXX, by a to First, improvements our important the did global to we lower due cash we drove due a third. receivables comprehensive second, debt significant we we where and focus element, approximately this interest secured accounts capital And realized reduction one reduced inventories. working which material

December ended For XX, expenditures the to capital in $X the million compared were million XXXX, full-year $X.X prior year period.

of annual our prepared X% December questions. was it our and $XX.X and our was of cash reflects XXXX concludes Total million please million remarks. expenditures which Operator, $XX our growth $XXX X% perspective, sheet XXXX to as cash focus call year-end driving expect debt as on to continue revolver undrawn capital of versus XX, for our operating We the of XXXX. flow. range from open This asset represents XX, consistent million, with model. balance December sales business was light a to million $XX.X From

Operator

question conducting with will Markets. session. BMO from Our [Operator a At this Capital Joel first of Instructions] the line Jackson comes question-and-answer we time, be

You may your proceed question. with

Joel Jackson

maybe Hi. afternoon, few to Good morning, going good ask morning. one-by-one. I sorry. Good everyone. I'm said questions,

Clinton Lewis

Good afternoon.

Joel Jackson

Thanks today. Okay. update for the

year? in can you How you think sales X% apple can does sales [indiscernible] XXXX, the it and XXXX bit? X% been you growth, by in you growth – you in of How If growth has growth where about see does about this drivers achieve have the talk you growth, EBITDA would offset you in it have SmartFresh hang have other a the described to like environment And sales you you talk different operating optimizations cost growth EBITDA earning Thanks. leverage Maybe me you then other want buckets. what or growth through and the achieved the side, what what to achieve? can on businesses? about look

Clinton Lewis

Yes, Joel.

of to create evening of SmartFresh else. first diversification strategy. it's all the products really and question. demonstrating through and is platforms continue kind our So the as beyond much legacy define Thanks the and other of in growth XXXX, us good growth we apple. all, good growth for driver And engagement the for everybody in visibility, you and afternoon, the Clearly, to very

that and that unwavering products across be across growth in have And will we strategy so area]. platforms. that we driving across XXXX will the and diversification into [continued on moving be customers. – diversification also And drives drives growth, so and different focused as page now turned to different and further growth again, accelerating forward, crops obviously continue we and the It geographies also

we that build So can in least of which does known asset, agriculture, our that kind of the weather. be is not continues that in it creates also hedge help a only challenges not growth, natural fuel believe a against durable being experienced it to

So continue moving growth of to that will be forward. engine the

also historical and expectations is I to related question, kind has Now, while to think set percentages. focus to margin margin the of we the operating want try and also guide there the appropriately gross industry-leading what understandably been on

As and we there the their in inherent the coming platforms is a that own product evolution categories each of margin. mix natural drive diversification, with gross

so a margin. gross that And have going natural to of evolution you're

actual So quarter in direction, profit way you to dollars. the of forward. we moved move through as think our dollars access those gross XXXX, gross that as profit both profit performance continue operating right and full-year to regard looking we of And right in the expect the at generated we that and fourth the see from growth is in and

say will know. I for to the relative you Lastly, that SmartFresh will reasons

our of franchise as of think in direct-selling the face lower the And move I of and to to business to tangible SmartFresh the our the a – for portfolio, SmartFresh tangibly, that more evidence And of competitors the quarter We and SmartFresh call for to lower we I saw globally technical our resilience customers breadth quality again, are see will defending priced, model, we think bring fourth full-year, think that the results and SmartFresh apple support appreciate our field-based our demonstrating focus bear as we continue you franchise. what as customers in results well on provide defending the we in other Apple services our that to in expertise as our and of customers, you more we ability contracts. long-term action. that

strategy. continue the that for continue while apple, legacy to impact So industry-leading base to SmartFresh margin the diversification we'll to we continue defend, accelerate protect of

Joel Jackson

in that it? on So million beat to [indiscernible] to profit or the replicate $X.X gross try dollars goal be would XXXX, XXXX

Clinton Lewis

would the diversified profit customers. an from but not we Again, say have crops positive expand geographies, result replicate expand number, across generating strategy, footprint gross of footprint, absolute and as I that performance geo the that our products and platforms replicate continue from and a of uptake of and net standpoint driving other come greater that is which dollars to

Joel Jackson

talked Okay. went about Can a the SmartFresh, contracts or some SmartFresh you retain – bit and you longer-term gave on gains, talked volume being although how elaborate on you able contracts, some got some you lock-in of I about to some comments customers. apple price down, think

the sales that give was would you price. get the – little there. you the on higher bit price up think need a on you day wouldn't you generics win decided did price? keen [indiscernible] now bit the So that to [the a of our to some I margin Have hope when your] the So strategy pursuing, was offering that you're about – hope service and well,

price offering wrong? try to read with talk a You've got back the contracts? the to a that some but now – Or right on get changed bundle, long-term little volume. the bit We'll now service I about did what better need

Clinton Lewis

we change, every driven dense you and premium be SmartFresh. consistency just current There's give me focus. no or that that change happens you Yes. And right? margin customers lot value by defending as more part context. and hopefully, the margin our feel price, day need bundle historical and that most you been that service better longer X-MCP gross we platforms levers right? a just There's manage earn has that the the have. some been caused We no term no the level, It's strategic see percentage, that our We – apple ability see and We I'll a the transparency racing platform large our That pivot price and we FreshCloud of industry-leading regard. our like material to defend before we've believe, that in contracts of franchise chasing it's its that SmartFresh to has believe direct-selling put competition to to for eroding in model, to sign is number price. security have that where be other in up discussed is a there products. than let

areas. so are also us contracts contracts. assures these upsell in it allow those And to getting business to of products those other multi-year their Two, all us and

that We to volume have responsibly price, flexible other to particular to both gain be show discussed or as and higher that and assurance term business well upsold sides, to to gain on to to into reasonably we have be platforms of is allow been gain, those penetration, products willing longer get and but on areas. contracts, as

Joel Jackson

products, larger to profit. try the bolt-on company do projects going things your you? finally, XXXX here and you capacity to and – feel growth before beyond new you you got of a enough and acquisition, for lot XXXX balance how expand in hope at growing it in that where that you've faster that, to gross about expand you're a you Is if get maybe can gross out here, sheet or Is look of trying and and something? keep tuck-in talked for fast would a or grow to enough growth Or you small a diversification lot you? XXXX? and do doing dollars assess lot margin fast I may Obviously, go of so Again, in

Clinton Lewis

Yes.

the one. Let me first answer

company to business left fruit in to intended on footprint. global continue a no to – lot the there's So that our continue juice, organic the believe the of has leverage I pun

be geo in. opportunities globally we to geographies around the product able footprint global operate across technical Our regulatory the to secure growth various allows our expand and that additional really to maximize to registrations, that us expertise

more to has SmartFresh output well you been diversification see been the that of the areas business a we've apple predisposed you beyond of ratio fruit. pome has And and Joel, a historically our strategy larger coming the and from know, area. apple hopefully, business of the larger As success

dollars continued question, And growth also we continue to specifically growth expect not so topline gross diversification, in to generate strong strong in growth, on that any of we that to of to profit diversification the positive and be your there good business. outside focused only be advance be in be good but will believe believe to kind we to room continues acquisition able And to of a amount to or able that. to other – partnership

As it the where in with regard. source of or the believe able framework market within a market believe if are financially relates inorganic on opportunities aligned zero that is focusing products to you what the being that being and in really we we clear, years. path will, strategically in growth that And to regulatory opportunities, to either our potential disciplined and a – we're put be three we'll has XX% focus, we

second growth. capacity something focus bottom a both to seven of – in our for focused modest believe that again, anywhere a then path goal. and business on its there the that opportunities or protected focus. organization years. The continue IP truly underlying in be the But is novel or that to to line market unique achieve top we between there's do assets And that organic area regulatory substrate, is those is clarity will tranche existing of to not areas to enough unique four fuel portion We to enough has the disruptive kind believe

Joel Jackson

Thank very you much.

Clinton Lewis

Thank you, Joel.

Operator

next comes Sweeney Our line question with Jerry Capital. from ROTH of the

your with proceed may You question.

Gerard Sweeney

my Graham. for Clint call. afternoon, Thanks Good taking and

Clinton Lewis

Jerry. Hey,

Gerard Sweeney

a for expansion what maybe more in points you’re tens bit and slightly little of it should geo milestones? Obviously, wanted of to the terms the a are terms se. focus You registrations, diversification some phrase – Maybe about What and focus us per thousands what key big of I is different. focal in on looking we of follow-up talking on of of diversification? of for XXXX mentioned just give roadmap in be customers.

Clinton Lewis

Yes.

a – different couple Jerry. key So the break down it ways,

profit think leverage diversification. our as continues think to looking commercial Clearly, I that we regulatory the areas our X-MCP the both really So leverages the is and X-MCP Other dollars and key about on industry especially also leadership platform footprint globally gross need market, generate approved in unique each registrations. to that particular each and/or get crop that for data each bodies to through be Again, and pursue the remember unique product continuing to jurisdiction. in regulatory application country on you at

chain dynamics. issues, So terms obviously Harvista, issues the growth much markets labor especially and very being challenged of of manage is X-MCP We're various to the with gain globally. earnestly supply category, helping – in we're over in labor as full regulatory like you authorization. to a regulatory working mode what our in expect launch clearance, use operating the obviously under that Europe, seen of of that's in look both well number time to will, under products continued that have but still includes the through still which we continue bodies Other to regions and And permit emergency be within with as Harvista tangible if encouraged the in seasons benefit last two harvest, Europe, shortages

as in areas look with XX% to we continue along growth Harvista, also you coatings, at leverage our but but So apple area saw certainly growth we seen area in least, of Other expect last, this So you X-MCP, in categories, then the of grow growth year fungicides coatings. the also full-year customers. not we well of of Fungicides right? existing in and continue to And the legacy in especially as Disinfectants you've XXXX, you look citrus continue & XXXX, as the look our continued at to where as the

of customers coatings, to VitaFresh line. more exploring plant-based area And specifically of we with respect looking continue We to the about area, our the about as feel on Botanicals to into believe solutions entrance natural be excited our continued with continue will coating coatings Botanicals prospects we both but kind for new the good VitaFresh our line. for be and growth

Gerard Sweeney

be understanding broken would and to we registration at the understanding a much to how and way possible to in of the down products is register could this TAM or get but X-MCP not they're maybe the Got right, through registration-driven Could products, it. a this think better or looking point. either period? going Other I like you the of a in addressable really market of have process today, future – to that you're maybe it answer, expand? if that of be these digging in may slightly. dig at follow-up fair A Again, some Is planning but that X-MCP it this

Clinton Lewis

have Yes. are gets we is to of that regulatory could say a these relatively, stages are to I defined various various penetrate. that in early working start have the back right? have and that of approval because stages aspect market. new one, of we think product durable in So registration, continue would the we today, we regulatory and/or already may growth. I clarify, registrations upside, of registrations to in stages to the of on kind launch commercialization, authorization back early with opportunities And sit secure to we of this have gets asset, think review registered more of that, path we're well similar today, In organic a So that full its various critically country This of we more important. commercializing parallel of we to the it's today, with assets, where calls have things to again, the number business, fairly it's get that we're nascent the these continuing are the already kind in as believe have There where underlying net I that right? we still today just those drivers but right? marketing we

existing both two or secure it's or that net doing products work secured ongoing secured well the and that we're potential leveraging in as new registration. as So grow last we've the that maximize we registrations recently to one how years,

are growth. things it's those that So combination to organic of continuing the two the fuel

Gerard Sweeney

Got it.

Clinton Lewis

TAM of In you – cut just to that piece. terms to the – complete off sorry

addressable the been or market somewhere kind been we've think we've the core that consistent have participate of right the evolution to our, we we the million. say, in today with addressable which be upwards $X.X find billion range is and/or fruit to either footprint, which evolution pome market look or then $XXX I in higher categories, TAM tended And to or also we largely what in core that of believe addressable let's million $XXX is if of we expanded market, the traditional of further around, billion. in can

opportunity a it at of that sense we the and you for the services solutions of broader So look have. we gives market types how

Gerard Sweeney

included mean, just it. we're helpful. this include X.X… not that's And Got $X.X doesn't the that sake, I that or That’s on does different Maybe for market necessarily – they then, in and since that topic. billion super a coatings fungicides

Clinton Lewis

is included No. It in that.

Gerard Sweeney

Okay. it. Got

Clinton Lewis

right, regions Yes. And for completeness right? again, great for full that of underserved today the examples and other transparency, is are it of piece the also just immature, recognizes or So that one China.

is China leader a also broader lack there like the consumption opportunities we they in we other for AgroFresh underserved from we up But some and has. continue for a for infrastructure able the hugely because post-harvest, markets strong that markets different and or time, is the emerging same that in governmental build So ever China And believe, down of therefore, developing in that at to regard, see infrastructure. market commitment the as believe to meet think market and post-harvest of like to be the to market post-harvest growing the that. internal in space investment needs and the key a top China demand

Gerard Sweeney

Got Thank it. appreciate helpful. Graham. you, Clint. I it. Super Thanks,

Clinton Lewis

Yes.

Operator

of comes Wainwright. question from the H.C. line last Dayal Amit with Our

with question. may your You proceed

Amit Dayal

Thank Hi, Clint. Graham. you questions. you. Hi, taking the for Thank

Clinton Lewis

you. Thank

Amit Dayal

with you're gross look we should respect keep for to I profit around right, mean, growing. your gross saying dollars, dollars profit to Clint comments

sort of So If some context, higher to going we that entering growth? in a a topline are profits going gross percent shrinking, of are higher, but are we entering to are be XX maybe plus see margins period potentially we where revenue are growth? now period

Clinton Lewis

Yes.

community opportunities And AgroFresh. this way. to is something to the segment like believe the appreciate therefore, and this me the let continue post-harvest want I answer what is we for opportunity also it company the our continue a that help and investors think investment in to So we

all market to of to that, to which end. end generally I'm sector of X% we're let's given the on kind X% play kind going kind the steady dynamics But caveat on on that the the expected we the maybe the is on and high of post-harvest some a fairly – geopolitical the external the dealing with. market at set grow look let's at segment, industry of low based that put maybe say validated we in a And As put expected. again, in big data, is

really growth is want have we Jerry, the again be average that We account to was in some that the to where that sharing going be to also going into to the recognize to and growth, more of have be continue comment higher population of able also take I kind to internal similar GDP benefits but with fruit to than is to developing produce. infrastructure growth, of preserve and the fresh desire and fresh markets produce, lack consumption fruit for they of emerging that recognize

and in are those leader have help segment, in be on every we're accelerate of region already kind capitalize facilitate only in because teams but major growing a post-harvest we that. that we these to global of able able for opportunities have the to All to markets us footprint, not trend, be a

of benefiting they're less for of So the of but our working And taken class They're of with the X% farming, desire for gone also and quarter trends industry and nice we a core about that all are that's impact the they're recognized where a has that inflationary, report especially But I fourth range me, fresh geopolitical community. our of are non-debatable, from earnings. fruit theme to both to they're I future and marketplace X% again, like to launched dynamics middle things more from, TAM foreseeable AgroFresh we ESG, hey, is To you of have believe And ESG size food in business, on a as the again, climate, in previously, the water, that's supported major income, of of undeniable to impact we climate, parallel produce. against from that know, this it's to at being resources discretionary that underpin grow the of and arable ways recognition that's our market terms continue impact in important and the the our less mission. to full-year think caveated land the diet the growth by defined the emerging class middle by the durable going way, the through. population all think for growth. because the investment

success breadth the and what support customer relationships, the recognizing footprint, direct It's for So when the to I a that and in we drives the market which investible expertise, and continue global and when impact, think that is grow. a a of data story. both And compelling reasons. regulatory as is customers technical believe net leader, a we to think question the about is already those new about market look generate our having it, is in which AgroFresh’s it, to portfolio, then for to operate also durable we at we registrations, and the position going as

Amit Dayal

Are maybe play we’ve that XXXX? for but cetera XXXX cost Clint. you for level might sort other come side. gone know front, at we any SG&A inflation of levels there year? Graham, from on et maybe that for stability are some operating you for the looking maybe to Thank expenses into on for I of the generally, some that, related

Graham Miao

Yes.

I company thinking. the gone in last as long the operations. few terms a years And particularly the recognized think may have have over right of way have optimizing, that streamlining our you

like is of is so today, performance we solid. the operation would company And terms say in to that

also in our BD remember So as you of a in of capabilities early commercial reached state actually good capabilities. areas and a variety terms steady as we've And well R&D we in marketing. our boosted this year,

I state we operation. So at are the steady think good

Of are improve well to to topline our line course, growth. continue opportunities and consistent optimize. there as goal is to But bottom as drive a

in So overall, we're I state. a good think

Amit Dayal

last How it any your the are Clint. FreshCloud, what Thank market? Graham. one plans deploying Okay. Whether Maybe update keep by and being sort received customers? you is it in they're of you, on this using for to that?

Clinton Lewis

question. the much very for you Thank Yes.

the to in still continue progress encouraged is feel a We about stage. to fairly making. early And remind, FreshCloud we're and very that nascent again,

However, if the regional responsibly adopt number platform I of we and/or chosen aspects, and With some different FreshCloud key within have customers have in their public, you some will. to been, that large global business. think, offering

will, add couple the players. adopt that of major my what adopted don't in these Ranch if believe customers a are announced it's in and about pilot platform weeks talked in experience Growers. last Westfalia, we've So of they externally in don't Starr just We recently me they value they provide if said had I've the don't tells operations. something, their to terms ag meaningful something, going And

is to adoption at agricultural of that sector AI. look continue the in very broadly We stages its as early one analytics, still data

believe we we're regard. edge so the And in that on leading

that that to begun are support increases seek bear of the active announce is we working by in is FreshCloud. recently we XX that even in been end I that such only well two to in lever over price. that and margin that to don't we the through, to platform kind the SmartFresh customers continuing that price, and SmartFresh numbers, industry-leading of not part face to that Remember, is even of our as are have. encouraging that the They value, legacy the them that of encouraged based XXXX pilots see able on margin also and that number the that pricing And are impact our has of the we and solutions strategy the that and with some realized apple the in on continue have testament we with lot our through industry-leading kind cases us. defend selling competitors various number that ability on offering are which our a the can in that pilot may They have quality comes our volume one making have the that brings to the volumes, not based apple to just have, value to still of for like and is to to We of holding franchise different portfolio capabilities And add the breadth and FreshCloud that's of the sure which themselves don't have stage of pricing that active have platforms we're them. from of a do on it keeping keep bring I one the compete the think people. fact a of competition that slight have

Graham Miao

our for areas allocation leading reflects like if been working particularly Amit, could digital Yes. in few this support in we right? We've where also this to that FreshCloud, a believe space the on years. are add. we strategic This space, areas, resources also certain I growth

beginning building we're I fruit well. then see the by and contracts as also and our to labor, in think the of contracts our signing FreshCloud SmartFresh into as evidenced of the

to allocation also discipline. costs resourcing needed of a growth operating were Yes, also we areas. is costs is support there reduce overall cost to So our are relocating part and prepared

this like actually – are overall financials continue can cost sales, areas, growth R&D published we that support As see SG&A you areas our our FreshCloud [indiscernible] other say area also expand intentionally with to in geographic that marketing while want and looking the crops the in will a SG&A labels. we I and right, administration in afternoon, efficiency new area, to cost R&D. of In opportunities to for

Amit Dayal

Great. the Understood. all all answers. have I you. for you Thank guys. That's Thank

Clinton Lewis

questions? you. any Operator, Thank more

Operator

over I'd further There no back to remarks. turn closing you time. at questions it like this to are for

Clinton Lewis

thank those operator, interest Thank much. the And much call, have Well you participated thank and very for your much. making you very our engagement to for time, your company. very in that on very, you

Operator

for that does gentlemen, attending. call. conference and We thank Ladies you do today's conclude

at now lines You this time. may your disconnect

Clinton Lewis

Thank you, operator.

AgroFresh Solutions (AGFS) 10 Mar 222021 Q4 Earnings call transcript