A cautela estratégica da Boa Safra

Current State of the Seed Industry and Boa Safra's Strategy

Overview of the Seed Industry

• The seed company Boa Safra is focusing on opportunities through new acquisitions amidst a crisis in the sector.

• The seed industry is currently facing high inventory levels, compressed margins, and increased pressure for efficiency.

• Despite challenges, Boa Safra maintains its belief in the inevitability of sector consolidation since its IPO in 2021.

Market Dynamics

• Brazil has a fragmented seed market with many companies concentrated mainly in the Central-West region, operating alongside large agricultural producers.

• As profit margins tighten and difficulties increase in agriculture, seed companies like Boa Safra are also adversely affected.

Strategic Direction

• Since its IPO in 2021, Boa Safra has pursued a strategy of mergers and acquisitions to consolidate the market.

• Currently, due to unfavorable market conditions and high capital costs, Boa Safra is adopting a more cautious approach towards new acquisitions.

Financial Position

• The company has reported strong liquidity with over R$ 1 billion available and low net debt of R$ 75 million.

• Despite having favorable financial conditions for acquisitions, macroeconomic challenges have led to a more careful stance on future operations.

Future Outlook

• While not dismissing consolidation or acquisition strategies, Boa Safra is taking a more reticent approach given current economic difficulties faced by rural producers.

• The company aims to wait for improved market conditions before pursuing significant merger activities.