Mariano Bosch - CEO Charlie Boero Hughes - CFO Hernan Walker - IR Manager.

Thiago Duarte - BTG Thiago Duarte - BTG Giovana Araújo - Itaú BBA Javier Martinez - Morgan Stanley Ariane Gil - GBM Ravi Jain - HSBC Rodrigo Mugaburu - Morgan Stanley.

Good morning ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to Adecoagro’s Third Quarter 204 Results Conference Call. Today with us, we have Mr. Mariano Bosch, CEO; Mr. Charlie Boero Hughes, CFO; and Mr. Hernan Walker, Investor Relations Manager.

We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the company’s presentation. After the company’s remarks are completed, there will be a question-and-answer section. At that time, further instructions will be given.

(Operator instructions) Before proceeding, let me mention that forward-looking statements are based on the beliefs and assumptions of Adecoagro’s management and on information currently available to the company.

They involve risks, uncertainties and assumptions because they relate to future events, and therefore depend on circumstances that may or may not occur in the future.

Investors should understand that general economic conditions; industry conditions and other operating factors could also affect the future results of Adecoagro and could cause results to differ materially from those expressed in such forward-looking statements. Now, I’ll turn the conference over to Mr. Mariano Bosch, CEO. Mr.

Bosch, you may begin your conference..

1. A higher operational efficiency in our rice and dairy segment. 2. Include crops yields which have returned to their historical average. 3. Grains generated by our commodity hedge positions. We are now fully focused on the new 2014-15 crop, working on enhancing the performance in our operations and completing the planting plan on schedule.

I believe that our businesses are set on a very good path. We are placing a lot of focus on continuing to improve efficiencies in each of our value chains allowing us to become the lowest cost per usage of each of our commodity. Now I would like to ask Charlie to walk you through the main operating and financial highlights of the quarter.

Charlie, please go ahead..

Thanks Mariano. Good morning everyone. I would like to walk you through a few slides that will reflect the main operational and financial highlights of the quarter. Let’s turn to Slide 4 where I would like to start off by discussing our sugar, ethanol and energy business.

If you take a look of the chart on the left you will see that on a year-to-date basis milling inventory ’14 and ’15 season was 4.9 million tons representing a 6% increase over the same period of the previous year.

The increase in milling was driven by enhanced production efficiencies resulting in a 9.3% increase in daily crushing volume, a 22% expansion of our sugarcane plantation and a 6% increase in yields.

However, as you may see in the chart on the right, during the first quarter our mills crushed a total of 2.7 million tons of sugarcane, 3% lower than the third quarter of 2013. Let’s turn the next slide to explain this flat decrease in milling.

The chart on the top of slide 5 shows monthly rainfalls of our cluster in Mato Grosso do Sul compared to the historical average. Rain in July and September were significantly higher than the historical average. These set of rain generated harvest disruptions since we cannot operate in heavy harvest machinery over wet soil..

We will now turn to Slide 6 where I would like to discuss our planting activities for the present quarter. Occupancy in chart on the left, as of September 30, 2014 our sugarcane plantation reached 123,000 hectares representing a 22% growth over the third quarter of 2013.

Expanding and renewing our sugarcane plantation continues to be a key strategy to supply our mills with quality raw material at low cost and to increase the productivity and quality of our plantation. If you take a look of a chart in the right, you can see that our sugarcane planting pace has almost doubled over the last three years.

We have already planted over 29,000 hectares this year and expected to continue planting at this pace, which will allow us to supply sufficient cane to operate almost at full capacity in our cluster in 2015. Please turn to page 7, where I would like to discuss the productive indications related to our sugarcane production.

The first graph on the left, shows that sugarcane yields during the quarter were 78.1 tons per hectares marking a 7% increase over the third quarter of 2013 yield. TRS on sugar content shown in the middle chart also increased by 4% to 136 kilo per ton.

As a result of these two variables combined TRS content per hectares increased by 11% year-over-year. These improvements are primarily explained by enhancement in our agricultural operations, the training and strengthening of our agriculture team, expansion and renewal of our plantation coupled with favorable weather throughout the season. .

We will now turn to Slide 6 where I would like to discuss our planting activities for the present quarter. Occupancy in chart on the left, as of September 30, 2014 our sugarcane plantation reached 123,000 hectares representing a 22% growth over the third quarter of 2013.

Expanding and renewing our sugarcane plantation continues to be a key strategy to supply our mills with quality raw material at low cost and to increase the productivity and quality of our plantation. If you take a look of a chart in the right, you can see that our sugarcane planting pace has almost doubled over the last three years.

We have already planted over 29,000 hectares this year and expected to continue planting at this pace, which will allow us to supply sufficient cane to operate almost at full capacity in our cluster in 2015. Please turn to page 7, where I would like to discuss the productive indications related to our sugarcane production.

The first graph on the left, shows that sugarcane yields during the quarter were 78.1 tons per hectares marking a 7% increase over the third quarter of 2013 yield. TRS on sugar content shown in the middle chart also increased by 4% to 136 kilo per ton.

As a result of these two variables combined TRS content per hectares increased by 11% year-over-year. These improvements are primarily explained by enhancement in our agricultural operations, the training and strengthening of our agriculture team, expansion and renewal of our plantation coupled with favorable weather throughout the season. .

One September 19, 2014 sugar prices hit 13.5% per pound for the first time since April of 2009, but partially recovered by the end of the quarter. Our realized prices during the quarter were an average 11% lower year-over-year falling from $440 per ton in the third quarter of 2013 to $391 per ton in the third quarter of 2014.

Despite this volume prices sugar net sales reaching $68.3 million 57% higher than the third quarter of 2013, driven by 77% increase in volume sold as observed in the chart in the bottom left.

The increase in sales volumes was enhanced by higher sugarcane yields and TRS content, the increase in the sugar production mix, a 7% decrease in inventory and the common felicitation [ph] of 17.8 thousand tons of sugar from third parties to generate efficiencies and synergies with our logistics and commercial operations.

If you could please turn to slide 9, I will proceed to discuss our ethanol operations. The chart on the top-left shows that ethanol production during the quarter reached 115 thousand cubic meters, 12% below the third quarter of 2013, mainly as a result of the decrease in sugarcane milling coupled with the slightly lower ethanol mix.

Although we continue to maximizing ethanol in the quarter, the mix was adjusted from 56% in the first quarter of 2013 to 53% in the current quarter. Despite lower production, ethanol net sales during the quarter reached $24 million marking a 33% growth year-over-year as you may see in the bottom left chart.

The growth was primarily explained by higher prices. Our average realized prices during the quarter were 22% higher than the third quarter of 2013 increasing from $438 to $533 per cubic meter. In addition, sales were enhanced by a 9% increase in our sales volumes as observed in the chart in the top-right.

As you may see the chart in the bottom-right, our ethanol inventories have grown by 8% year-over-year and 174.5% quarter-over-quarter reaching 108.6 thousand cubic meters as of September 30, 2014. Just as we did last year this growth is the result of our commercial strategy to carry ethanol into the season in order to capture higher prices.

Let’s turn to slide 10 of the presentation where I would like to discuss our energy operation. As you may see in the top left chart, our Cogen Exports during the quarter reached 162.8 thousand megawatt hour, 27% higher than the previous quarter. This increase is totally explained by higher operational efficiencies of our boilers and turbo-generators.

Our cogeneration efficiency ratio measured in kilowatt hour exported per ton of sugarcane crushed has reached 59.3, 30% higher than in the third quarter of 2013 and is one of the highest in the industry. This is the result of the state-of-the-art equipment and modern technology now we got and our focus on having full cogeneration capacity.

Moving on to market prices, I’d like to stress that hydropower in Brazil accounts for 80% of the country’s electricity supply. [Indiscernible] during the dry winter unless that we feel, in the rainy season between December and March.

However, most of Southeast and Midwest of Brazil experienced the below average rainfall between November 2013 and March 2014, water levels in Brazil hydroelectric reservoirs were not able to be replenished.

Despite having above average rains in April and May, which managed to build up some of the reservoirs, if you take a look at the graph on the top right, you’ll see that during the quarter reservoirs at the Southeast and Midwest of the country, which represents 70% of the country’s water supply were in average 47% lower on the same period of the previous year.

As a result, as you may see in the bottom left chart energy spot prices have been trading very close with achieving price of 822.8 Reais per megawatt hour. July, August and September of 2014 spot prices were 389%, 334% and 174% respectively above the same period of last year and are expected to remain strong even in low water storage level.

We’re enabled to capture this increase in spot prices in the year is only 65% of our energy currently committed long-term contract. Our [indiscernible] higher efficiency ratios and higher export volumes coupled with a 69% increase in realized prices.

Net energy sales during the third quarter of 2014 reached $18.8 million more than double of that achieved in the third quarter of 2013. Please turn to slide 11, where I’d like to analyze the financial performance of our sugar, ethanol and energy business.

If you take a look at the graph on the top chart you can see that on an aggregate basis net sales for the quarter reached $111 million, 54% above the third quarter of 2013. Adjusted EBITDA reached a quarterly record of $54.7 million, 39% higher than the third quarter of 2013. Adjusted EBITDA margin reached 49% in the period.

The improved performance in the third quarter of 2014 was primarily driven by higher sugarcane yields and TRS content and increasing sugar, ethanol and energy sales volumes and increasing energy and ethanol realized prices and enhanced production efficiencies and operational leverage in our cluster.

Operating and financial performance was offset by a decrease in sugar prices, a 3% reduction in sugar cane crushing and the execution of an ethanol carry strategy which [indiscernible] sales to future quarters. Moving to the bottom chart on a year-to-date basis, sales reached $237 million marking up 25% increase over the same period of 2013.

Adjusted EBITDA in turn reached $94.1 million 18% higher than the first nine months of 2013 with an adjusted EBITDA margin of 40%. I would now like to move on to the farming business, please pay your attention to slide 13 where we discussed the farming production and planted area evolution. The top chart shows our farming production evolution.

As of September 30, 2014, we completed the 2013 and '14 harvest year. A total of 219.3 thousand hectares were harvested producing a total of 848.8 thousand tons of diversified crops marking a 21% increase over the 2012 and '13 season.

The increase in production was a result of a slightly larger harvest area and increasing yields in the majority of our crops. As you may see, production has gradually increased since the 2002 and '03 season driven by our land transformation and sustainable production model.

As the bottom chart shows, farming planted area has gradually increased since the 2002 and '03 season. Planting activities for the 2014 and 2015 harvest year begins during June. Our planting plan for the season includes an area of 229.3 thousand hectares marking a 5% increase over the 2013 and '14 season.

As of September 30, 2014, 69.3 (sic) [63.9] thousand hectares have been successfully planted and we're fully focused on completing the remaining area on schedule. Let's turn to Slide 14, where I will discuss the financial performance for our farming business.

With most of our row crops are harvested during the first quarter and second quarter, adjusted EBIT in the third quarter is primarily derived from rice and milk sales and the mark-to-market of grain inventory and commodity hedges.

We take a look on the far right of the top-chart, where we see that adjusted EBIT for the third quarter of 2014 stood at $20.8 million marking a 142% increase over the third quarter of 2013.

The growth in financial performance is primarily explained by 232% increase in our crops EBIT resulting from a $16.6 million gain from the mark-to-market for our soybean and corn derivative hedge positions related to the new 2014 and 2015 crop. On a consolidated basis, adjusted EBIT for the nine months of 2014 increased by 86% to $69.3 million.

This growth is mainly explained by increased operation and financial performance in the crop segment resulting from higher wheat, corn and soybean yields and lower production costs.

Higher margins in the rice segment resulting from lower costs of production driven by the implementation of efficient production technologies, operational enhancements throughout the industrial and logistic operations and the devaluation of the Argentine peso and gains generated by the mark-to-market of our hedge position.

Turning to Slide 15, I would like to discuss the 16.6 million gains from the mark-to-market of our soybean and corn derivative hedge positions related to the new 2014 and 2015 crop. As you may see in the two charts the soybean and corn future made in 2015 curves, which we use to hedge our crops, have shown a significant decline.

This is primarily a result of expectations of a record production of grains in the U.S. and worldwide coupled with a strong U.S. dollar. As you may see in the top chart, as of September 30, 2014, 171.2 thousand tons of Soybean were hedged at $1,216 cents/bushel.

The chart in the bottom shows that, as of September 30, 2014, 208.2 thousand tons of corn were hedged at $601 cents/ bushel. I would now like to move you on to our financial performance.

You turn to Page 17; you can see that during the third quarter of 2014, consolidated adjusted EBITDA grew to $70.3 million from $43.8 million in the third quarter of 2013 marking a 61% increase. EBITDA margin was 36% in the third quarter of 2014 compared to 25% in the third quarter of 2013.

On a year-to-date basis, Adecoagro recorded, $177.8 million of adjusted EBITDA marking up 56% increase over the nine months of 2013. Adjusted EBITDA margin also grew reaching 37% in the nine months of 2014, compared to 28% in the nine months of 2013. To finalize I would like to turn to page 18 to take a look at our net debt.

As you can see in the top left chart, Adecoagro gross net debt as of September 30, 2014 stands at $786 million in line with the previous quarter. The only change is an $88 million reduction in debt corresponding to our farming business.

Cash and equivalents as of September 30, 2014 stands at $197 million, also with no relevant changes compared to the previous quarter. As a result, our net debt stands at $589 million.

In terms of the maturity profile of our debt, I would like to point out that 74% of our debt is in the long-term and is composed mainly of loans from multilateral banks such as BNDES and the Inter-American Development Bank. The 26% of short-term debt is mainly the portion of long-term debt that matures each year.

Finally I would like to highlight that 54% of our debt is Brazilian Reais is with an average interest rate of 6.6%, 45% is in U.S. dollars with an average interest rate of 5.5% and 1% is in the Argentine pesos with a rate of 11.3%. Thank you very much for your time. We are now open to questions. .

Thank you. (Operator Instructions) Our first question is Thiago Duarte BTG. Please go ahead. .

Thank you very much and good afternoon everybody.

First simple question actually regarding your commercials strategy on the sugar and ethanol division differently from most of your listed competitors you are not with very high inventories at the end of the quarter, most of your competitors seem to be batting on an improvement of prices going forward towards the end of the crop and you haven’t done the same.

So we just wanted to understand the rationale and understand why you have done it this way, which was different. This is the first question. .

Thank you Thiago for your question. I am going to pass it over to Marcelo Sanchez our Commercial Director to give you a quick answer on that.

Marcelo?.

The reason why we have a different position compared with our competitors is that we do have handled this keeping in mind our financial situation by the end of the year that was the main reason that we did have the inventories in accordance to accomplishment with our financial situation..

Okay, I think I understand that. And the second question is still on the sugar and ethanol division.

I mean just more conceptual question in the sense that, you have been showing pretty remarkable improvements as you highlighted in your presentation, yields, TRS levels, I think the efficiency in you sugar and ethanol assets are improving substantially, and moving to next year I believe you are going to have the full cluster operating after your recent expansion.

So just if you could go through, just wanted to understand to see what level of profitability considering normal course of things and normal situation and normal weather.

What sort of margins and free cash flow you really expect to generate as soon as you reach through capacity in the next year maybe in the year after in the sugar and ethanol cluster and just to get a sense. Thank you. .

Hi Thiago as you seen us and as you’ve mentioned. We are improving on all this different efficiencies in every place of the chain of our sugar and ethanol business. We are confident that we were since beginning that we are going to be within the low cost producers of sugar ethanol and electricity.

So we don’t give guidance in terms of exact numbers of the margins that we are going to be making. But we feel very confident that we are improving quarter by quarter and that’s something we can continue to expect as we reach a full capacity as you’ve been seeing.

So we still don’t know where they are leaving this but we know there is still a good room to go..

Thank you very much. .

And again just continue Marcelo say answer in terms of our hedging positions or our inventories. We did got the prices software in March selling in advance. So we did not sell sugar at 14 or 15 as it was during the quarter that is at Marcelo was talking about..

This is what I saw when I saw your realized prices just wanted to introduce, if there is any fails. Thank you. .

Just to add on this I mean we have efforts today we have 95% of the volume hedge for the current crop at about 6 or 17-50 resolution wise if this could have add to that number otherwise the price would have been much lower..

Our next question is Giovana Araújo Itaú BBA. Please go ahead. .

Hi good afternoon. My first question about your co-generation efficiency ratio and also about yield. How much do you think you can further improve co-generation efficiency ratio consider the second phase of VVM for next year.

And what are your expectations for agriculture yields in the next year?.

Hi Giovana in regard of your first question on co-gen and what the capacity. We are reaching this 60 kilowatt hour per ton of crush cane. And we see that we still have room to continue improving there. We are doing some numbers and we have some expectations. But we know for sure that we can obtain at least 10% mark on that number.

And I am still optimistic that number can be even 20% more and there are small change and small adjustments that we are improving every day. So between 10% to 20% is something that can we can easily expect. That is in terms of improvement in this important number that is a co-generation per ton being crushed.

And then regarding yields, in the sugarcane yields, we are very as you seen Charlie say graph that he was showing the rains that effect in some way they are meeting up -- the milling done during the quarter. But it is excellent for the sugarcane growth.

So sugarcane is a very good and we feel we are in a very good situation for our next sugarcane cycle that is in yields for sugarcane and in yields for the rest of the growth I think that you were also including that in your question we are planting right now, we are almost finished with our rice planting, we are in the middle of the soybean planting, we are half on our corn planting.

And all of the crops are being planted in excellent conditions and with optimum efficiency. So today we can expect the maximum potential on all the different yields of the different crops we are planting but we are very early in the season to confirm that. .

Okay, on ethanol prices, what are your expectations about prices during the next intercrop period do you think prices will rally in line what we saw last year or do you see --- what kind of upside you are expecting?.

I want to let the Marcelo Sanchez our Commercial Director to answer this question your Juliana.

Marcelo?.

We are constructive on prices on sugar and then F&B showed production and consumption balance after consecutive surpluses that we had. And given that our view on next year crop size will be Brazil most probably with normal weather repeating current expected production that we had this year.

We see prices of ethanol being sent by there is range of action of the [indiscernible] and of course the blend ratio increased to 27%, those are potential upsides for price over next year. .

But as per safer looking for the next intercrop period s in the upcoming months, what kind upside are you expecting for the next month? Intercrop periods?.

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Our next question is Javier Martinez, Morgan Stanley. Please go ahead. .

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Okay, hi, how are you? Regarding the sugarcane crop the estimates I think that’s what the first part of your question.

The estimate we are having for this year for 2015 is similar to what we are currently seeing in 2014 and that was out estimate and because of not very good weather in the whole Center South but there are some expansion in the marginal returns, that’s why we estimate a sugarcane production as a whole in line to what happened in this current 2014.

And then regarding the second part of your question, on our cash generation and how much cash are we're going to be able to generate regarding what are we going to do? We are optimistic there, but as you've seen in the CapEx, we are still projecting an important CapEx for 2015 that is where we finish our clustering at Mato Grosso do Sul.

So the main goal today is to finish the CapEx of the full cluster in 2015. Then regarding from there onward on, what is it that we are going to do? You've seen us working and analyzing each one of the different project that we have a huge pipeline of different projects around the different segments that we currently own.

So all of them will be analyzed and are being analyzed and we depend on the return on equity of each one of the projects that we are analyzing. So cash flows will determine which are the best projects that we can invest in and we are looking mainly in the ten countries that we've been looking in the past.

This includes analyzing the buyback and the dividend policy. .

So, it wouldn't be opportunistic and depending on the opportunities basically?.

Absolutely, as you've seen in the past. .

Mariano this increase in the price -- how much of that do you think is market and how much of that is transformation -- non-transformation?.

I think that it is all non-transformation. I don't see the market increasing its value and that's what we see in the market, but I don't know exactly on this independent operation because it is independent..

(Operator Instructions) Our next question is from Ariane Gil, GBM. Please go ahead..

My question is on the land business. I am glad that you guys are engaged in the transformation of several farms in Argentina, and I thank you to achieve higher yields and also for land monetization.

So I was wondering if you could give us a little more color on expectation regarding the possibility of land sales in the coming quarters, maybe if there is anything in the pipeline.

And also if you could comment a little about what you expect for land prices in Argentina for 2015 that would be great, thank you?.

Regarding the first part of your question on the land sales or what can we expect in terms of land sales? I think in 2014, we already done enough or we've done okay, but we are always marketing our farms and this is always opportunistic.

So we cannot have an exact number, but as you've seen we made $25 million EBITDA in 2014, we've made a little bit more in 2013 and in line in the past, so looking -- going for the future, I think that we can expect in line with what you've seen in the last 4 years or 5 years and if you take an average of the last 5 years it's something that we can expect for the future in terms of land sales.

And regarding land prices and land prices in Argentina, I think that my expectation in terms of land prices for Argentina, I don't see them changing a lot.

I think that Argentina hasn't prices of land in Argentina hasn't grow enough or hasn't grow as much as it have grown in Uruguay but I feel in Paraguay, so I think that Argentina will be stable while in the other countries I see prices of land according to this level prices of commodity maintain and you see those other countries volume down. .

(Operator Instructions) Our next question is from Ravi Jain, HSBC. Please go ahead..

Hi. Good morning.

I had a quick follow-up question on the strategy on your sugar, ethanol business, given that there is more, there is a possibility of better sugar prices and even ethanol dynamics improving I think your acceleration of the Greenfield project will be really positive in that sense, but what do you see beyond that? Do you see, if sugar prices get better, do you see further expansion on the Greenfield in that cluster? Or do you see more M&A in that front? Or how do you see sugar ethanol strategy after the expansion of the Greenfield project?.

Hi Ravi. Good question. As I mentioned in the other areas we are always going to be analyzing and we are always analyzing the possibility of expanding the cluster or doing M&A and all the M&A or most of the M&A that is in the market today we’ve been analyzing.

But we’ve never find in attractive by -- in those analysis in order to go forward or to move forward there. So it will clearly depend on their returns that we would be expecting depending on price. So I cannot answer the question today.

The answer has been that is better returns to continue increasing our cluster than buying new or buying something already built. .

Okay, thank you.

And just a quick follow up on that, so as you said you’ll evaluate the situation, but is there scope for further expansion in that cluster I mean, is there scope for more than 2 million tons more in that same cluster or do you have to look at the different place for the Greenfield project?.

No, in that same place there is still a lot of room to continue expanding and what in the room is the amount of sugarcane that can be produced in that area. And there is still a lot more sugarcane that can be produced in that area so we think that there is still a lot of room to continue growing there, that you cannot decide the pace of the growth.

The pace of the growth will depend on the amount of land available that you will have. So we don’t want to change too much the pace of the growth that we’ve been doing in order to maintain this efficiencies that we’ve been generating. .

Our next question is Rodrigo Mugaburu, Morgan Stanley. Please go ahead..

Thank you. Hi, Mariano. I’ve a question I’m sorry if you already talk about that but I joined little bit late. My question is regarding the ethanol, you finally approved the increase on the mix on the blend and gasoline I mean what’s your view on the range of increase on price of the mill.

Do you have any view on that I know it’s hard but some kind of guidance how much will be the impact for you?.

Rodrigo, Marcelo has already explained that, we expect the higher prices for the short term at least and we are constructed in general in the ethanol prices, but our real view is to be the low cost producer, so we are really focusing on the cost of production and we are working on all the efficiencies to improve the cost of production then we manage the carry strategy according to our expectations at each year moment..

Okay. But any sense on -- increase on demand due to the mix increase, any kind of sensitivities in the price --.

Of course that is positive and if you see that is put in line we saw director increase to the ethanol. So all those things are positive, clear positive and if they happened are welcome and we can expect that 10% to 15% more price if that, all that happens. I’m still not sure that will happen or not. .

Having no further questions. This concludes the question and answer section. At this time I would like to turn the floor back to Mr. Bosh for any closing remarks..

Thank you very much for joining the call. And we look forward to see you again in our upcoming meetings..

Thank you. This concludes today’s presentation. You may disconnect your line at this time and have a nice day..