Adecoagro · AGRO

Adecoagro is a multi-segment LATAM agribusiness: Argentine + Uruguayan cropping (BA, Cordoba, SF/LP, Entre Rios rice, dairy, Uruguay), plus Brazilian sugarcane mill-supply (MS + MG, mostly leased). Total OWNED farmland: 210,371 ha = 519,917 acres (per 2024 20-F + Sep-2025 Cushman appraisal disclosure). CRITICAL CHANGE (vs prior version of this file): • Brazil sugarcane OWNED reduced from 32K acres to 25K acres (10,024 ha owned per 20-F; the other 202,972 ha sugarcane is LEASED under long-term agreements, not on AGRO balance sheet). My old 32K acres for owned Brazil sugarcane was overstated by ~28%. • Per-acre values across all 8 farmland rows reduced ~3.5× to anchor to Cushman audited mark of $714.8M total — was previously $2.5B at headline broker-comp basis • Per-acre values now consistent with Cushman's portfolio-going-concern methodology (Sales Comparison Approach with Argentine country-risk + portfolio-liquidity discounts) PRIMARY FMV ANCHOR: Cushman & Wakefield publishes an annual independent appraisal of Adecoagro's farmland (cited in every quarterly press release and the 20-F). Multi-year track record: • Sep 2018: $846.7M for 232,733 ha (= $3,637/ha = $1,472/acre) • Sep 2023: $695.3M for 213,548 ha (= $3,256/ha = $1,318/acre) — pre El Meridiano sale • Sep 2024: $682.6M for 210,371 ha (= $3,243/ha = $1,313/acre) — +0.4% YoY • Sep 2025: $714.8M for 210,371 ha (= $3,398/ha = $1,375/acre) — +4.7% YoY Methodology: Cushman uses the Sales Comparison Approach (per the 2018 appraisal report) — i.e., direct market transactions. But the resulting per-hectare values run far below headline CREA / AGEFAZ broker comps (~$11-15K USD/ha for Argentine pampas Class-A, $13-18K USD/ha for Uruguay). The gap reflects Cushman applying: - Argentine country-risk discount (peso devaluation, capital controls, default risk) - Portfolio liquidity discount (selling 200K+ ha takes years; individual parcels much faster) - Going-concern adjustment (current agricultural use, not highest+best alternative) - Class-mix discount (AGRO's portfolio includes some lower-quality fringe acres) These compound to ~50-70% off broker-comp single-parcel prices. Adecoagro's own IR materials use Cushman as the primary FMV — there is no separate company internal mark that's higher. PER-SEGMENT PRICING (anchored to Cushman): - Buenos Aires pampas: $1,600/acre (~$4,000/ha) - Cordoba pampas: $1,400/acre (~$3,500/ha) - Santa Fe + La Pampa: $1,200/acre (~$3,000/ha) - Entre Rios rice: $850/acre (~$2,100/ha) - Argentina dairy: $1,150/acre (~$2,800/ha) - Uruguay (Soriano/Colonia/Rio Negro): $1,750/acre (~$4,300/ha) - Brazil sugarcane (MS + MG owned base): $1,050/acre (~$2,600/ha) For reference, headline broker comps WITHOUT Cushman discount: - BA pampas: $5,200-5,500/acre (Cushman -70%) - Uruguay: $5,500-6,200/acre (Cushman -68%) - Brazil sugarcane: $3,200-5,500/acre (Cushman -60%) Cap rate ranges 5.0-8.5% reflect AGRO's segment quality + country-risk (Uruguay 5.0-6.5% premium; Argentina pampas 5.5-7.5%; Argentina rice/dairy 6.0-8.5%; Brazil cane 6.0-8.0%). INDUSTRIAL CARVE-OUT (unchanged from prior pass): Adecoagro's $3,399M total Net PP&E breaks into farmland ($714.8M Cushman) + 4 industrial rows totaling ~$2,009M: • 4 sugar/ethanol/bioenergy mills (14M ton crush capacity) — $1,400M • Argentine dairy facility (Free Stall + processing) — $200M • Rice mill (Entre Ríos) — $80M • Other infrastructure (irrigation, machinery, storage) — $329M Industrial rows use excludeFromAcreTotals=true so they contribute to FMV/book but not to per-acre denominators on land columns. NOT included in Cushman's farmland appraisal — separate valuation basis required for mills (replacement cost or DCF on $40-60M EBITDA per mill). IMPLIED NAV SANITY CHECK: Land (Cushman): $714.8M + Industrial mills: $1,400M + Dairy facility: $200M + Rice mill: $80M + Other infra: $329M = Total assets: $2,724M - Net debt: $700M = Implied equity: $2,024M Shares: ~100M → ~$20/share NAV Stock at ~$10 → 0.50× P/NAV (similar to BrasilAgro's 0.55× and the broader LATAM ag discount) If headline broker comps were used instead ($2.5B farmland), NAV would be ~$38/share → 0.26× P/NAV — but the market clearly does not believe broker comps reflect AGRO's realizable land value, given the persistent discount.