Adecoagro S.A. [AGRO] Filings

20-F 1 agro-20221231.htm 20-F agro-20221231

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F


¨			REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
			OR
þ			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED ON DECEMBER 31, 2022
			OR
¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			FOR THE TRANSITION PERIOD FROM TO ________________
			OR
¨			SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			Date of event requiring this shell company report

COMMISSION FILE NUMBER: 001-35052

Adecoagro S.A.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Grand Duchy of Luxembourg

(Jurisdiction of incorporation or organization)

Vertigo Naos Building, 6, Rue Eugène Ruppert,

L - 2453 Luxembourg

Tel: +352.2644.9372

(Address of principal executive offices)

Manuela Lamellari

Vertigo Naos Building, 6, Rue Eugène Ruppert,

L - 2453 Luxembourg

Email: manuela.lamellari@intertrustgroup.com

Tel: +352.26449.494

(Name, Telephone, E-Mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Shares	AGRO	New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

The number of outstanding shares of each of the issuer’s classes of capital stock

as of December 31, 2022:

108,191,218 Common Shares, par value $1.50 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

Yes ¨ No þ

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ¨ No þ

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ☐	Accelerated filer þ	Non-accelerated filer ¨
		Emerging growth company ¨

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

☑ Yes ☐ No

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the

registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ¨ International Financial Reporting Standards as issued by the International Accounting Standards Board þ Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow:

Item 17 ¨ Item 18 ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

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TABLE OF CONTENTS


FORWARD-LOOKING STATEMENTS			iv

PRESENTATION OF FINANCIAL AND OTHER INFORMATION			iv

PART I			1

Item 1.	Identity of Directors, Senior Management and Advisers		1

Item 2.	Offer Statistics and Expected Timetable		1

Item 3.	Key Information		1
	A.	[RESERVED]	1
	B.	CAPITALIZATION AND INDEBTEDNESS	1
	C.	REASONS FOR THE OFFER AND USE OF PROCEEDS	1
	D.	RISK FACTORS	1

Item 4.	Information on the Company		36
	A.	HISTORY AND DEVELOPMENT OF THE COMPANY	36
	B.	BUSINESS OVERVIEW	40
	C.	ORGANIZATIONAL STRUCTURE	81
	D.	PROPERTY, PLANTS AND EQUIPMENT	81

Item 4 A .	Unresolved Staff Comments		81

Item 5.	Operating and Financial Review and Prospects		81
	A.	OPERATING RESULTS	84
	B.	LIQUIDITY AND CAPITAL RESOURCES	106
	C.	RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.	110
	D.	TREND INFORMATION	111

Item 6.	Directors, Senior Management and Employees		112
	A.	DIRECTORS AND SENIOR MANAGEMENT	112
	B.	COMPENSATION	116
	C.	BOARD PRACTICES	116
	D.	EMPLOYEES	119
	E.	SHARE OWNERSHIP	119

Item 7.	Major Shareholders and Related Party Transactions		121
	A.	MAJOR SHAREHOLDERS	121
	B.	RELATED PARTY TRANSACTIONS	122
	C.	INTERESTS OF EXPERTS AND COUNSEL	122

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Item 8.	Financial Information		123
	A.	CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION	123
	B.	SIGNIFICANT CHANGES	124

Item 9.	The Offer and Listing		124
	A.	OFFER AND LISTING DETAILS	124
	B.	PLAN OF DISTRIBUTION	124
	C.	MARKETS	124
	D.	SELLING SHAREHOLDERS	124
	E.	DILUTION	124
	F.	EXPENSES OF THE ISSUE	125

Item 10.	Additional Information		125
	A.	SHARE CAPITAL	125
	B.	MEMORANDUM AND ARTICLES OF ASSOCIATION	125
	C.	MATERIAL CONTRACTS	133
	D.	EXCHANGE CONTROLS	134
	E.	TAXATION	139
	F.	DIVIDENDS AND PAYING AGENTS	145
	G.	STATEMENT BY EXPERTS	145
	H.	DOCUMENTS ON DISPLAY	146
	I.	SUBSIDIARY INFORMATION	146
	J.	ANNUAL REPORT TO SECURITY HOLDERS	146

Item 11.	Quantitative and Qualitative Disclosures About Market Risk		146

Item 12.	Description of Securities Other than Equity Securities		146
	A.	DEBT SECURITIES	146
	B.	WARRANTS AND RIGHTS	146
	C.	OTHER SECURITIES	146
	D.	AMERICAN DEPOSITORY SHARES	146

PART II			147

Item 13.	Defaults, Dividend Arrearages and Delinquencies		147

Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		147

Item 15.	Controls and Procedures		147

Item 16.			148

	Item 16 A.	Audit Committee Financial Expert	148
	Item 16 B.	Code of Ethics	148
	Item 16 C.	Principal Accountant Fees and Services	148
	Item 16 D.	Exemptions from the Listing Standards for Audit Committees	149
	Item 16 E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	150
	Item 16 F.	Change in Registrant’s Certifying Accountant	150

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	Item 16 G.	Corporate Governance	150
	Item 16 H.	Mine Safety Disclosure	152
	Item 16 I.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	152

PART III			152

Item 17.	Financial Statements		152

Item 18.	Financial Statements		152

Item 19.	Exhibits		153

iii

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FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions. The forward-looking statements included in this annual report relate to, among others:

•our business prospects and future results of operations;

•weather and other natural phenomena;

•the length and severity of the coronavirus (COVID-19) pandemic or any other pandemic outbreak;

•developments in, or changes to, the laws, regulations and governmental policies governing our business, including limitations on ownership of farmland by foreign entities in certain jurisdictions in which we operate, environmental laws and regulations;

•the implementation of our business strategy;

•our plans relating to acquisitions, joint ventures, strategic alliances or divestitures, and to consolidate our position in different businesses;

•the implementation of our financing strategy and capital expenditure plan;

•the maintenance of our relationships with customers;

•the competitive nature of the industries in which we operate;

•the cost and availability of financing;

•future demand for the commodities we produce;

•international prices for commodities;

•the condition of our land holdings;

•the development of the logistics and infrastructure for transportation of our products in the countries where we operate;

•the performance of the South American and world economies;

•the relative value of the Brazilian Real, the Argentine Peso and the Uruguayan Peso compared to other currencies; and

•the factors discussed under the section entitled “Risk Factors” in this annual report.

These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may turn out to be incorrect. Our actual results could be materially different from our expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in this annual report might not occur, and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, including, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.

The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Certain Defined Terms

In this annual report, unless otherwise specified or if the context so requires:

•References to the terms “Adecoagro S.A,” “Adecoagro,” “we,” “us,” “our,” “Company”; and “our company” refer to, Adecoagro S.A., a corporation organized under the form of a société anonyme under the laws of the Grand Duchy of Luxembourg, and its subsidiaries.

•References to “IFH” and “IFH LP” mean the former International Farmland Holdings, LP, a limited partnership, (previously IFH LP and International Farmland Holdings, LLC, or IFH LLC) which was merged into Adecoagro LP.

•References to “Adecoagro LP” mean Adecoagro, LP SCS, a limited partnership organized under the form of a société comandite simple under the laws of the Grand Duchy of Luxembourg (previously Adecoagro LP and Adecoagro, LLC).

•References to “$,” “US$,” “U.S. dollars” and “dollars” are to U.S. dollars.

•References to “Argentine Pesos,” “Pesos” or “Ps.” are to Argentine Pesos, the official currency of Argentina.

•References to “Brazilian Real,” “Real,” “Reais” or “R$” are to the Brazilian Real, the official currency of Brazil.

•References to “Uruguayan Pesos,” are to the Uruguayan Pesos, the official currency of Uruguay.

•Unless stated otherwise, references to “sales” are to the consolidated sales of goods and service rendered.

•References to “IFRS” are International Financial Reporting Standards issued by the International Accounting Standards Board and the interpretations of the International Financial Reporting Interpretations Committee, together “IFRS.”

Background

As part of a corporate reorganization (the “Reorganization”), Adecoagro, a Luxembourg corporation under the form of a société anonyme, was formed as a holding company for IFH for the purpose, among others, of facilitating the initial public offering (the “IPO”) of our common shares, completed on January 28, 2011. Before the IPO, Adecoagro had not engaged in any business or other activities except in connection with its formation and the Reorganization. For an additional discussion of the Reorganization, see “Item 4. Information on the Company—A. History and Development of the Company—History.”

During 2011, we contributed the net proceeds of the IPO to increase our interest in IFH from 98.0% to 98.64%. During 2012, we issued, in a series of transactions, 1,654,752 shares to certain limited partners of IFH in exchange for their residual interest in IFH, totaling 1.36%, thereby increasing our interest in IFH to approximately 100%. During 2015 IFH was merged into Adecoagro LP, our wholly-owned subsidiary. For further information see “Item 4. Information on the Company—A. History and Development of the Company—History”.

The Consolidated Financial Statements as of December 31, 2022 and 2021 and for the years ended December 31, 2022, 2021 and 2020 (hereinafter, the “Consolidated Financial Statements”) included in this annual report have been prepared in accordance with IFRS. All IFRS effective at the time of preparing the Consolidated Financial Statements have been applied.

Financial reporting in a hyperinflation economy

IAS 29 “Financial Reporting in Hyperinflationary Economies” requires that the financial statements of entities whose functional currency is that of a hyperinflationary economy to be adjusted for the effects of changes in a suitable general price index and to be expressed in terms of the current unit of measurement at the closing date of the reporting period. Accordingly, the inflation produced from the date of acquisition or from the revaluation date, as applicable, must be computed in the non-monetary items.

In order to conclude on whether an economy is categorized as hyperinflationary under the terms of IAS 29, the Standard details a series of factors to be considered, including the existence of a cumulative inflation rate in three years that approximates or exceeds 100 %.

Since 2018, when cumulative inflation rate in three years exceeded the 100% threshold, Argentina’s operations are considered to be under hyperinflationary economy for accounting purposes under the terms of IAS 29 and since then, it has been applied IAS 29 in the financial reporting of its subsidiaries and associates with Argentine peso as functional currency.

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Non-IFRS Financial Measures

To supplement our Consolidated Financial Statements, which are prepared and presented in accordance with IFRS, we use the following non-IFRS financial measures in this annual report, which are based on the information that arose from the Consolidated Financial Statements:

•Adjusted Consolidated EBITDA;

•Adjusted Segment EBITDA;

•Adjusted Consolidated EBIT;

•