Marrone Bio CEO Kevin Helash ups full-year revenue projections, touts strong spring growing season in shareholder letter

Marrone Bio Innovations Inc (NASDAQ:MBII) CEO Kevin Helash has upped the company’s projection for full-year revenue growth to the upper 20% range in a letter to shareholders released Wednesday.

“Spring has arrived in the Northern Hemisphere, and, with it, the start of a new growing season for all crops,” Helash wrote. “This is a key time of year for Marrone Bio as well, as our products are rapidly moving through the distribution channel to the farm. With roughly one-third of the year behind us, early indicators point to a strong 2021 for MBI.”

First-quarter results will come in May, and the company’s performance is in-line with expectations, despite the first three months of the year typically being the seasonally slowest, with shipments in April having started strong and momentum building, Helash noted.

READ: Marrone Bio Innovations joins United Nations Global Compact, kicks off ESG initiative

As a result, he said, the company is increasing its forecast for full-year revenue growth to the upper 20% range and its annual gross margin target to the upper 50% range. To get there, Helash added, the company is judiciously managing operating expenses to meet its goal of driving top-line revenue growth and achieving positive adjusted EBITDA.

“This will be a pivotal year in MBI’s growth trajectory, as we launch four new products, expand our distribution partnerships, and extend our global market reach with innovative, sustainable biological products that create exceptional value for our distribution partners and our growers,” Helash noted. “There is a lot to do, but we feel confident we are on-track to deliver on all our key objectives in 2021.”

Marrone said it is seeing market signals that support greater demand for its seed treatments, including that corn and soybean prices are at their highest levels since the spring of 2014 and are sparking higher projected plantings in the US. 

Elsewhere, Helash noted that growing in Europe also looks strong, with a rebound expected for both cereal and oilseed planted areas. In the Southern Hemisphere, expectations for the safrinha crop season — the second and largest corn planting in Brazil — are solid despite some early season weather issues.

“Long-term expansion in seed treatments and row crops is central to our growth strategy,” Helash said. “In 2020, our biological seed treatments were used on approximately 6% of soybeans, corn and cotton planted in the United States, and we are rapidly growing our share on the corn, sunflower and rapeseed acres planted in the European Union and neighboring countries. Obviously, the greatest opportunity in the seed treatment market is ahead of us.”

Seed-and-soil treatments were 37% of Marrone’s sales in 2020, and the company anticipates that they will be 45% of a larger pie in 2023. This correlates with the company’s 2023 target of expanding row crops to more than 50% of revenue, which it says will support the diversification of its sales mix to a roughly even split between North America and the rest of the world. Additionally, the plan is to launch two new seed treatments in the EU in 2021 - Takla and Ympact.

Marrone said it plans to release an independent study of its leading seed treatment product shortly, an analysis of which showed that the product reduces greenhouse gas emissions in soybeans and corn by 85% or more compared to conventional pesticides.

“Our growth — now and in the future — is predicated on the demand for a more sustainable approach to agriculture,” Helash concluded. “We are clearly at an inflection point as we move ever closer to breakeven on an adjusted EBITDA basis through a combination of robust top-line growth, continued strong margins, and a flattening operating expense curve.”

Contact Andrew Kessel at [email protected]
 
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Story by ProactiveInvestors