Isagro S p A : , BOD APPROVES 9M 2020 FINANCIAL RESULTS

PRESS RELEASE

CONSOLIDATED RESULTS OF 9 MONTHS 2020 - INCORPORATING A 3° QUARTER OF USUAL "SAISON MORTE" FOR THE BUSINESS OF ISAGRO - CONFIRM AND STRENGTHEN THE PATH OF OPERATIONAL TURNING POINT, ALTHOUGH NOT REFLECTING YET THE BENEFITS FROM:

• FLUINDAPYR DIVESTMENT AND PHOENIX-DEL ACQUISITION (BOTH FINALIZED IN OCTOBER)
• "FULL YEAR" EFFECTS OF COST-EFFICIENCY ACTIONS (AT MATURITY FROM 2022)

• Revenues from Agropharma and Services: +18% vs. 2019 (82.7 Euro million vs. 70.0 million)
• EBITDA: returned positive and equal to 4.6 Euro million vs. -2.2 million of 2019 (which included 2.5 million of non-recurring proceeds from M/L Agreements, activity discontinued in 2020)
• Net result of continuing operations: strong decrease of seasonal loss, passed from -12.1 Euro million of 2019 (-14.6 million without M/L Agreements) to -4.9 million of 9 months 2020
• Net Financial Position: cash generation with NFP improving (32.3 Euro million) vs. both September 30th, 2019 (64.0 million) and December 31st, 2019 (34.4 million)
  Note: 2019 data were "restated" in order to consider also for such period the economic results of Isagro Asia Private Limited, divested on December 27th, 2019, within the "discontinued operations"

NFP AT A TURNING POINT IN EARLY OCTOBER: NET CASH FOR AROUND 20 EURO MILLION

• NFP at September-end 2020 does not reflect cash-in of 55.0 Euro million from Fluindapyr sale and Phoenix-Del acquisition for 3.1 million, both finalized in October

GROUP PERSPECTIVES CONFIRMED

• Net result 12 months 2020: expected in important profit thanks to capital gain Fluindapyr sale
• The financial resources generated by the divestments of 2019 and 2020, coupled with the ongoing managerial actions deriving from the change of the business model, allow to forecast important improvements in the ordinary results

Milan, November 12th, 2020 - The Board of Directors of Isagro S.p.A. approved today the Consolidated Interim Results Report as of September 30th, 2020, which will be made available to the public following the terms and the modalities of the applicable laws.

Redefinition of business model of Isagro

Starting from the second half of 2019 and during 2020 Isagro has actively worked on the implementation of its new business model, today fully operating, with a specific focus on the development of market positions and products/formulations related to "Bio-Copper" (i.e. products of biological/natural origin and copper-based products, the latter ones belonging to inorganic chemicals), also through operations of external growth. Such redefinition of business model:

• has involved extraordinary operations that, through the divestment of selected assets related to organic chemicals, let corporate assets' values emerge and generated important financial resources for the support of Group's growth projects;

• was accompanied by the necessary measures of organizational/structural redefinition, partly already finalized in 2020 and partly to be completed in 2021, with "full year" effects from 2022.

The experience of the last years, in fact, proved that Isagro has the capability to invent new products/molecules of organic chemical origin with high market potential but does not have the scale capacity to adequately extract value from them, within an external context showing increasing costs/timing for the development of new organic chemical products/molecules and a parallel strong concentration in the Industry among discovery-based players for this type of active ingredients. In such frame, Isagro believes that it will be possible to create value for its Stakeholders in a more effective way by concentrating its strategic development in the products of biologic origin (growing sector with an average size of players largely smaller than the organic chemicals' one) and copper-based products (where Isagro can already rely on solid market positions, with a project of growth already underway), with the possibility for Isagro to develop its already existing product portfolio and to proceed with selected acquisition(s). Moreover, specific organic chemical products will be kept in portfolio based on a rationale of integrated crop management and with a cash-cow logic.

In coherence with the above-said redefinition of the business model:

• on December 27th, 2019 the sale of the fully controlled company Isagro Asia was completed, with around 50 Euro million cashed-in and related to Price paid at Closing and further payments of escrow fund between April and October 2020;
• on October 2nd, 2020 it was finalized the sale of the molecule Fluindapyr to the North American company FMC Corporation, with the cash-in of 55 Euro million (against a book value for Isagro as at September 30th, 2020 of around 25 Euro million);
• on October 14th, 2020 it was fully acquired Phoenix-Del S.r.l., for 3.6 Euro million (of which 3.1 paid at Closing), a company active in the copper-based products segment with around 5 Euro million sales turnover. It is estimated it will bring important industrial and commercial synergies in the next years.

The above led to an important turning point in the financial structure of Isagro in October, still not reflected in the economic-financial results as at September 30th, such that the Group currently presents a net financial position at credit of around 20 Euro million. Such net cash represents, together with the borrowing capacity of the Group for working capital only, a solid base to finance the projected path of growth of Isagro. Moreover, the aforementioned transactions provided further evidence that the book values of Isagro's assets - particularly those related to Intellectual Property, reported at their historical costs net of depreciations - underestimate significantly their real market value.

In the meantime, the relaunch of the operational activities of Isagro continued, with reference both to commercial and business development ones, with an important progress of economic and financial results in the period.

9M2020 consolidated financial results

The consolidated data of the first nine months of 2020, which include a 3rd quarter of "saison morte" for the business of Isagro and that do not still reflect the divestment of Fluindapyr, the acquisition of Phoenix- Del (both finalized in October) and the "full year" effects of the initiatives of organizational efficiency recovery (which will continue in 2021 and will generate their full contribution from 2022), highlight:

• Revenues from Agropharma and Services growing by 18% to 82.7 Euro million vs. 70.0 million of 2019 (the latter "restated" to include also for such period the economic results of Isagro Asia Private Limited, divested on December 27th, 2019, within the discontinued operations);

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• an EBITDA positive for 4.6 Euro million vs. the loss of -2.2 million of 2019 restated (the latter equal to
  -4.7 million excluding the 2.5 million of non-recurring Revenues from M/L Agreements, activity discontinued in 2020);
• a Net result of the continuing operations negative for 4.7 Euro million, strongly recovering vs. the loss of 12.1 million of 2019 restated; such recovery appears more conspicuous by excluding in 2019 the mentioned non-recurring Revenues from M/L Agreements;
• a Net financial position as at September 30th, 2020 - which as already reported does not reflect the cash-in from the Fluindapyr sale finalized in October (55 Euro million) - still at debt for 32.3 Euro million (of which 4.3 Euro million due to the application of the accounting principle IFRS 16-Leases) but in any case decreasing versus both December 31st, 2019 (34.4 million) and September 30th, 2019 (64.0 million).

The positive variation of EBITDA of 9M2020 vs. 9M2019 restated is attributable, on top of the higher margins from sales, also to an important reduction in fixed and R,I&D costs related to organic chemicals (which overall have led to savings in the period of 4.4 Euro million).

Perspectives

With reference to the economic results expected for the full year 2020, Isagro forecasts a level of sales higher than 2019, albeit to a far lower extent vs. the one of the first nine months due to a fourth quarter awaited to be affected by the phase-out of some formulations in Europe, with a positive EBITDA (also excluding the net extraordinary proceeds from Fluindapyr sale) compared to the one in loss in the 12 months of 2019.

The Net result expected in 2020 is estimated in strong profit thanks to the capital gain of Fluindapyr, the amount of which will also depend on the quantification of related provisions as per accounting principle IFRS 15. The NFP at year-end is expected at credit between 15 and 20 Euro million.

Moreover, the ongoing actions for commercial development and organizational redefinition, which have already positively contributed to the nine-month results, will express a wider impact next year and will guarantee a contribution at maturity from 2022.

The financial resources generated by the divestments of 2019 and 2020, coupled with the ongoing managerial actions deriving from the change of the business model, allow to forecast important improvements in the ordinary results.

Other information

• The Manager charged with preparing the company's financial reports, Ruggero Gambini, hereby certifies, pursuant to Article 154-bis, paragraph 2 of the Consolidated Law on Finance, that the financial information in this press release is consistent with the entries in the accounting books and records.

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About Isagro

Isagro S.p.A., an independent company born in 1993 with Montecatini/Montedison origin, is listed on the Milan Stock Exchange since 2003. Initially based on the discovery and development of new chemical molecules, the last one being Fluindapyr, the Company leads today a Group offering agricultural solutions at low environmental impact, with a growth project focused on biorationals as part of its new business model aimed also at capitalizing on the current product portfolio qualified for an integrated crop management.

In 2014 Isagro issued Growth Shares, an innovative category of special shares specifically conceived for companies having a Controlling Subject. Main characteristics of Growth Shares are the absence of voting rights, an extra-dividend vs. Ordinary Shares (20% in the case of Isagro) and the automatic conversion into Ordinary Shares in the ratio 1:1 in any case of loss of controlling stake by the Controlling Subject and/or of Compulsory Public Offer.

For more information:

Ruggero Gambini	Erjola Alushaj
Chief Financial Officer	Group Financial Planning &
Tel. [phone]	Coordination and IR Manager
	Tel. [phone]
www.isagro.com	[e-mail]

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