ArborGen Holdings Annual Results – Year Ended 31 March 2022

ArborGen Holdings FY2022 Results
30 May 2022

Audited results for the twelve months to 31 March 2022 (FY22)
All dollar values in US dollars unless otherwise stated
 Pleasing results and record US advanced genetics seedling sales as ArborGen focuses on higher growth
markets following sale of its New Zealand and Australian businesses (ANZ business) during FY22
 Despite the ongoing impact of the pandemic on overall sales volumes, sales of advanced genetics
seedlings increased 32% year-over-year
 Operating earnings (before other significant items) of $2.7 million for continuing operations in US and
Brazil, up from $1.0 million in FY21
 Revenues from continuing operations of $47.6 million, up from $42.8 million in FY21
 Gross margin from continuing operations of $17.8 million, up from $15.6 million in FY21
 Adjusted US-GAAP EBITDA result of $10.1 million
i
excluding the ANZ business sold and other significant
items, up from $7.4 million in FY21
 Completion of sale of ANZ business for NZ$22.25 million (ANZ Transaction), significantly strengthening
ArborGen’s balance sheet
 Net debt reduced substantially to $11.5 million, from $27.4 million in the prior period
 Repayment of $2.9 million of sub-ordinated debt raised in 2019 to fund the $14.4 million acquisition of
ArborGen’s headquarters in Ridgeville, South Carolina, and reduction in ArborGen’s Synovus working
capital facility by $5.5 million, collectively resulting in annual cash interest cost savings
 $4.7 million of deferred tax recognition including $3.8 million of previously unrecognised tax losses
available
 Completion of acquisition of an 8-10 million capacity pine nursery located in Canoinhas, Santa Catarina,
Brazil for approximately BR$4 million (US$0.7 million)
 Materially improved performance projected in Brazil in FY23 (fiscal year ending March 2023) driven by
stronger pricing for both eucalyptus and pine seedlings and increased sales volumes

Pleasing results and strong advanced genetics sales growth as ArborGen focuses on growth markets
ArborGen Holdings Limited (NZX: ARB) (ArborGen or the Company) has announced operating earnings
from continuing operations (before other significant items) of US$2.7 million for the year ended 31
March 2022, up from $1.0 million in the prior year, as the Company delivered its highest ever US
advanced genetics sales year – 32% higher than the prior year.
ArborGen has also delivered an adjusted US-GAAP EBITDA
i
result of $10.1 million excluding the New
Zealand and Australian operations sold and other significant items
ii
, up from $7.4 million in the prior year.

2

Key to this result is the continued execution of the Company’s advanced genetics strategy, resulting in
record sales of its advanced genetics products in the US, up from 81 million seedling units in FY21 to 107
million in FY22. This is despite COVID continuing to adversely impact sawmill production and, in turn,
seedling demand in the US South.
In particular, advanced genetics seedling sales to the private landowner segment, where the majority of
sales growth will occur, was up almost 60% compared to prior year, driven by increasing recognition of the
value of ArborGen’s advanced genetics products. Although larger National Accounts (primarily REITs and
TIMOs
iii
) accounted for the majority of ArborGen’s advanced genetics volume, sales to the private
landowner segment now represent around 35% of advanced genetics volume sold.

Advanced genetics (Mass Control Pollinated (MCP)) seed supply
ArborGen continues to focus on building advanced genetics MCP seed inventory to minimise reliance on
single year cone harvests as a key risk mitigation strategy. Seed inventory can be held in storage for several
years, and, while the Company has approximately 1-2 years of MCP seed inventory on hand for the Western
regions, there are still constraints in the larger Eastern region. Younger orchards represent approximately
70% of the Company’s overall orchard footprint, and as these continue to mature and become more
productive, ArborGen’s strategy will be to bag as many flowers as possible to maximise the seed output in
the medium term. In addition, ArborGen will be targeting production of certain provenance crosses (i.e.
Coastal x Texas, and Coastal x Piedmont) which can be utilised in multiple provenances.
On 1 April 2022, ArborGen announced a freeze event, which combined with very high winds during this
year’s pollination season, caused damage to pine flowers at ArborGen’s Eastern orchards which will impact
cones and seed to be harvested in November 2023 (i.e. available for FY25 sales). The Company has
recognised $1.5 million of costs related to this in the FY22 results. Importantly, this isolated event did not
impact the cones currently on the trees that will be harvested in November 2022 (available for FY24 and
beyond), nor did it cause any long term damage to the orchards themselves, which will be at full productive
capacity again, the following pollination season. ArborGen’s Western orchards were not impacted.
ArborGen is projecting to harvest advanced genetics MCP seed equivalent to over 200 million seedlings
across all of its orchards in the US South in November 2022, well in excess of projected sales for FY24. The
projected surplus in advanced genetics MCP seed harvested this year, combined with the ability to utilise
some material from neighbouring provenances, will help mitigate the freeze impact on FY25 seedling sales.
In addition, ArborGen will continue to focus on growing advanced genetics adoption in the Western regions
to achieve higher overall MCP sales in FY24 and FY25.
ArborGen has several years of Open Pollinated (OP) seed in inventory, and will maximize seed harvested in
November 2022 from targeted orchards.

M&A activity
The Company’s FY22 results exclude ArborGen’s New Zealand and Australian businesses, with the
completion of the sale of these businesses for NZ$22.5m occurring as scheduled on 30 November 2021.
The proceeds have significantly strengthened ArborGen’s balance sheet, affording it greater strategic and
financial flexibility to pursue growth opportunities.
An initial example of such growth initiatives is the recent acquisition of an 8-10 million capacity pine nursery
located in Canoinhas, Santa Catarina, Brazil for BR$4 million (US$0.7 million) including certain capital
expenditure items.

3

ArborGen’s CEO, Andrew Baum, said “Brazil’s earnings are projected to be well over US$1 million this fiscal
year (FY23), materially higher than the breakeven result recorded in FY22, driven primarily by stronger
pricing for both ArborGen’s eucalyptus and pine seedlings, and increased sales volumes. The acquisition of
the Canoinhas nursery will further accelerate this earnings growth and strengthen ArborGen’s position as
the leading supplier of pine genetics in Brazil. Increasing domestic and export demand, new pulp mills and
strong charcoal markets resulting from increasing iron ore demand, are collectively driving strong local
demand for eucalyptus and softwood. ArborGen has grown to become one of the largest commercial
suppliers of eucalyptus and loblolly pine seedlings in the Brazilian market, replicating its US strategy to
convert the market to products with superior genetics.”

Outlook
While nearer term, the pandemic and certain customer specific issues continue to affect industry activity
in the US South, ArborGen continues to project solid growth in advanced genetics sales from FY24 onwards
with both its National Account customers and private landowner customers.
ArborGen’s US business is very well poised to benefit from its leadership position in tree improvement
technology, and as the leading commercial supplier of advanced genetics in the US South.
Similarly in Brazil, ArborGen has grown to become one of the largest commercial suppliers of eucalyptus
and loblolly pine seedlings in the Brazilian market.
Chair of ArborGen, David Knott Jr, said: “ArborGen is poised for growth, as we proceed with a strong balance
sheet and funding. Our approach is working and the benefits of our long term focus on advanced genetics
is now becoming clear. The growing demand for our advanced genetics seedlings is testament to the value
we offer and gives us real confidence to continue with that focus, as we recover from the pandemic effects
and focus on higher growth markets.”

ENDS
Any enquiries should be directed to:
Sharon Ludher-Chandra
Company Secretary & Performance Improvement Director (NZ-based)
E: info@arborgenholdings.com
Tel: +64 9 3569800

http://www.arborgenholdings.com or email info@arborgenholdings.com
i
US GAAP EBITDA excludes NZ public company costs and Other Significant Items (refer footnote ii)
ii
Other Significant Items total $4 million (FY21 : $(1.9) million) and include Government grant income of $0.9m, COVID
impact on unsold seedlings and associated write off of $1.6m, $1.5m related to the freeze event, and strategic review
and other costs of $1.8m (primarily financial, tax and legal advice, and including M&A activity during the period)
iii
Real Estate Investment Trusts and Timber Investment Management Organisations


ArborGen
ArborGen is the largest commercial global seedling supplier and a leading provider of advanced genetics, for the forest industry.
Employing state-of-the-art technology, ArborGen is developing high-value products that significantly improve the productivity of a
given acre of land by enabling our customers to grow trees that yield more wood per acre with greater consistency and quality in
a shorter period of time. For more information, please visit ArborGen’s website at www.arborgen.com

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ArborGen Holdings Limited and Subsidiaries
Consolidated Income Statement
For the year ended ended 31 March 2022
Re-presented
(1)
Year endedYear ended
Mar 2022Mar 2021
US$mUS$m
Revenue47.6 42.8
Cost of sales
(29.8) (27.2)
Gross profit17.8 15.6
Other income- 0.8
Administration expense
(15.1) (15.4)
Operating earnings excluding items below
2.7 1.0
Strategic review costs, government grants and other
(4.0) 1.9
Operating profit (loss) before financing expense(1.3) 2.9
Financing expense(1.7) (2.0)
Profit (loss) before taxation(3.0) 0.9
Tax benefit4.7 0.6
Net earnings (loss) after taxation from continuing operations1.7 1.5
Net earnings after taxation from discontinued operations
- 1.7
Net earnings (loss)1.7 3.2
Earnings (loss) per share information (cents per share)
From continuing operations
Basic
0.3 0.3
Diluted
0.3 0.3
From continuing and discontinued operations
Basic
0.3 0.6
Diluted
0.3 0.6
Weighted average number of shares outstanding (millions of shares)
Basic500.8 499.5
Diluted503.5 502.8
(1) 31 March 2021 has been re-presented to show net profit after taxation from discontinued
operations separately.
Page 1

ArborGen Holdings Limited and Subsidiaries
Consolidated Statement of Comprehensive Income
For the year ended ended 31 March 2022
Year endedYear ended
Mar 2022Mar 2021
US$mUS$m
Net earnings (loss)1.7 3.2
Items that may be reclassified to the Consolidated Income Statement:
Movement in currency translation reserve0.9 2.2
Movement in hedge reserve0.6 0.4
Other comprehensive earnings (loss) (net of tax)1.5 2.6
Total comprehensive earnings (loss)3.2 5.8
ArborGen Holdings Limited and Subsidiaries
Statement of Changes in Equity
For the year ended ended 31 March 2022
Year endedYear ended
Mar 2022Mar 2021
US$mUS$m
Total comprehensive earnings (loss)3.2 5.8
Movement in ArborGen Holdings shareholders' equity:
Movement in issued capital0.3 0.2
Movement in share based payment reserve
(0.3) 0.3
Total movement in shareholder equity3.2 6.3
Opening Group equity148.2 141.9
Closing group equity151.4 148.2
Page 2

ArborGen Holdings Limited and Subsidiaries
Consolidated Statement of Cash Flows
For the year ended ended 31 March 2022
Year endedYear ended
Mar 2022Mar 2021
US$mUS$m
Cash was provided from operating activities
Receipts from customers56.5 52.5
Government grants received- 4.6
Cash provided from operating activities
56.5 57.1
Payments to suppliers, employees and other(49.0) (47.2)
Cash (used in) operating activities
(49.0) (47.2)
Net cash from (used in) operating activities7.5 9.9
Proceeds on sale of discontinued operations15.2 -
Investment in fixed assets(1.5) (1.0)
Investment in intellectual property
(3.1) (3.7)
Net cash from (used in) investing activities10.6 (4.7)
Debt drawdowns3.2 8.5
Repayment of lease liabilities(0.9) (1.3)
Debt repayment
(10.1) (12.4)
Interest paid(1.7) (2.0)
Net cash from (used in) financing activities
(9.5) (7.2)
Net movement in cash
8.6 (2.0)
Opening cash, liquid deposits and restricted cash
6.2 7.9
Effect of exchange rate changes on net cash
0.4 0.3
Closing cash, liquid deposits and restricted cash15.2 6.2
Net earnings after taxation
1.7 3.2
Adjustment for:
Financing expense
1.7 2.0
Depreciation and amortisations
10.1 10.2
Taxation
(4.7) (0.6)
Foreign exchange
(0.3) 0.4
Deferred grant income- 0.9
Gain on sale of discontinued operations
(2.2) -
Non cash inventory movement (3.1) -
Change in fair value of biological assets
- 0.1
Other non cash items
0.1 0.7
Cash flow from operations before net working capital movement
3.3 16.9
Trade and other receivables
1.4 (1.7)
Inventory
7.2 (5.3)
Trade and other payables
(4.4) -
Net working capital movement
4.2 (7.0)
Net cash from operating activities7.5 9.9
Page 3

ArborGen Holdings Limited and Subsidiaries
Consolidated Balance Sheet
As at 31 March 2022
Mar 2022Mar 2021
US$mUS$m
Current assets
Cash and liquid deposits
15.2 6.2
Trade and other receivables
10.8 12.2
Inventory
27.3 34.5
Total current assets
53.3 52.9
Non current assets
Fixed assets
32.9 43.3
Derivative financial instruments
0.3 -
Right-of-use assets
4.7 5.8
Intellectual property
97.1 101.3
Deferred taxation asset
3.8 -
Total non current assets
138.8 150.4
Total assets
192.1 203.3
Current liabilities
Trade, other payables and provisions
(8.7) (13.1)
Current lease obligation(0.8) (0.8)
Current debt(1.0) (1.0)
Current taxation liability
- (0.1)
Deferred grant income
- (0.9)
Total current liabilities
(10.5) (15.9)
Term liabilities
Term debt
(25.7) (32.6)
Derivative financial instruments
- (0.3)
Lease obligation(4.2) (5.1)
Deferred taxation liability
(0.3) (1.2)
Total term liabilities
(30.2) (39.2)
Total liabilities(40.7) (55.1)
Net assets
151.4 148.2
Equity
Share capital
202.8 202.5
Reserves
(51.4) (54.3)
Total group equity
151.4 148.2
Net Asset Backing
US 30 cps US 30 cps
Dave Knott JrPaul Smart
Chairman of the BoardAudit Committee Chairman
30 May 2022
Both of the above signatories certifies that these financial statements comply with New Zealand
generally accepted accounting standards and present a true and fair view of the financial affairs of
the ArborGen Holdings Group.
Page 4

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Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Name of issuer
Reporting Period
Previous Reporting Period
Currency
Amount (millions)Percentage change
Revenue from continuing operationsUS$47.611.2%
Total RevenueUS$57.38.7%
Net profit/(loss) from continuing operations US$1.713.3%
Total net profit/(loss) US$1.7-46.9%
Amount per Quoted Equity Security
Imputed amount per Quoted Equity Security
Record Date
Dividend Payment Date
Current period
Prior comparable
period
Net tangible assets per Quoted Equity SecurityUS 11 cps US 9 cps
A brief explanation of any of the figures above necessary to
enable the figures to be understood
Name of person authorised to make this announcement
Contact person for this announcement
Contact phone number
Contact email address
Date of release through MAP
30 May 2022
Not applicable
Not applicable
Not applicable
Please refer to accompanying releases
Authority for this announcement
Sharon Ludher-Chandra
Sharon Ludher-Chandra
09 356 9800
info@arborgenholdings.com
Interim/Final Dividend
No dividend is proposed for the period
Results for announcement to the market
ArborGen Holdings Limited
12 months to 31 March 2022
12 months to 31 March 2021
US Dollars