1. 1ADAMAReportsFullYearandFourthQuarter2022ResultsRecordSales&EBITDAinFullYear2022FullYear2022Highlights:Salesup16%toarecord-highof$5,570million(+20%inRMBterms;+19%inCER1terms),drivenby16%higherpricesand4%volumegrowthImprovementofOpex/Salesratioof19.9%vs.20.5%in2021;Adjustedoperatingincomeup8%to$458million(RMB:+11%)AdjustedEBITDAup10%to$740million(RMB:+14%)vs.$671millioninthefullyearof2021Adjustednetincomeamountedto$118million;Reportednetincomenearlytripledto$96millionFourthQuarter2022Highlights:Salesdown2%to$1,312million(+9%inRMBterms;+1%inCERterms),6%higherpricesand6%decreaseinvolumeAdjustedEBITDAamountedto$129millionvs.$207millioninQ42021Adjustednetlossof$42million;Reportednetlossof$22millionBEIJING,CHINAandTELAVIV,ISRAEL,March20,2023–ADAMALtd.(the“Company”)(SZSE000553),todayreporteditsfinancialresultsforthefourthquarterandtwelve-monthperiodendedDecember31,2022.IgnacioDominguez,PresidentandCEOofADAMA,said,"Asweentertheyearof2023,wereflectontheremarkableyearthatwas2022.Thiswasayearinwhichthecropprotectionmarketexperiencedexceptionalgrowth,bothinvolumes,andespeciallyinpriceslargelyaimedtooffsetincreasesincosts.IamhappytosaythatADAMAgrewwiththemarketreachingrecordsalesandEBITDAin2022."As2022proceeded,cropcommoditypricescamedownfromtheirpeak,maintaininghistoricallyelevatedlevels.Thishascontinuedinto2023,whilefertilizerandenergypricesdeclinedataslowerpace,leadingtolowerbutstillhistoricallyhighfarmerprofitability.Withhighinventoriesinthemarket,weanticipateagradualreturntonormalizationinthecropprotectionmarkettowardsthesecondhalfof2023."Webelievethatin2023farmerswillcontinuetoinvestincropprotectionproductsthatbringthemincrementalvalue.In2022ADAMAintroducedmanydifferentiatedproductstothemarket,optimizingitsofferingtofarmersaroundtheglobewhilemaintainingsimplicityindoingbusiness,andintendstocontinuetodosoin2023."12Table1.FinancialPerformanceSummaryUSD(m)AsReportedAdjustmentsAdjustedQ42022Q42021%ChangeQ42022Q42021Q42022Q42021%ChangeRevenues1,3121,337(2%)--1,3121,337(2%)Grossprofit304343(11%)3669341412(17%)%ofsales23.2%25.6%26.0%30.8%Operatingincome(EBIT)26110(76%)283355143(62%)%ofsales2.0%8.2%4.2%10.7%Incomebeforetaxes(20)47(18)34(39)81%ofsales(1.6%)3.5%(2.9%)6.0%Netincome(22)25(19)29(42)54%ofsales(1.7%)1.9%(3.2%)4.0%EPS-USD(0.0096)0.0108(0.0178)0.0231-RMB(0.0681)0.0692(0.1265)0.1476EBITDA127188(33%)219129207(38%)%ofsales9.6%14.1%9.8%15.5%USD(m)AsReportedAdjustmentsAdjusted20222021%Change2022202120222021%ChangeRevenues5,5704,813+16%--5,5704,813+16%Grossprofit1,4031,183+19%1622291,5651,412+11%%ofsales25.1%24.6%28.1%29.3%Operatingincome(EBIT)389291+34%68129458425+8%%ofsales7.0%6.0%8.2%8.8%Incomebeforetaxes11885+40%25134144219(34%)%ofsales2.1%1.8%2.6%4.6%Netincome9625+292%21115118139(15%)%ofsales1.7%0.5%2.1%2.9%EPS-USD0.04130.01060.05050.0596-RMB0.26160.06760.31770.3843EBITDA731593+23%979740671+10%%ofsales13.1%12.3%13.3%13.9%Notes:“AsReported”denotestheCompany’sfinancialstatementsaccordingtotheAccountingStandardsforBusinessEnterprisesandtheimplementationguidance,interpretationsandotherrelevantprovisionsissuedorrevisedsubsequentlybytheChineseMinistryofFinance(the“MoF)(collectivelyreferredtoas“ASBE”).Notethatinthereportedfinancialstatements,asaresultofrecentchangesintheASBEguidelines[IAS37],certainitemsasofQ42021(specificallycertaintransportationcostsandcertainidlenesscharges)havebeenreclassifiedfromOperatingExpensestoCOGS.Pleaseseetheappendixtothisreleaseforfurtherinformation.Relevantincomestatementitemscontainedinthisreleasearealsopresentedonan“Adjusted”basis,whichexcludeitemsthatareofatransitoryornon-cash/non-operationalnaturethatdonotimpacttheongoingperformanceofthebusiness,andreflectthewaytheCompany’smanagementandtheBoardofDirectorsviewtheperformanceoftheCompanyinternally.TheCompanybelievesthatexcludingtheeffectsoftheseitemsfromitsoperatingresultsallowsmanagementandinvestorstoeffectivelycomparethetrueunderlyingfinancialperformanceofitsbusinessfromperiodtoperiodandagainstitsglobalpeers.Adetailedsummaryoftheseadjustmentsappearsintheappendixbelow.ThenumberofsharesusedtocalculatebothbasicanddilutedearningspershareinbothQ4andFY2021and2022is2,329.8millionshares.Inthistableandalltablesinthisreleasenumbersmaynotsumduetorounding.3Thegeneralcropprotectionmarketenvironment2CroppricesreachedrecordlevelsinMay2022,drivenbytightstocks,adverseweatherconditionsandtheUkraine-Russiaconflictwhichdisruptedthesupplyofcommodities.Priceshavesincedeclinedbutareexpectedtoremainabovepre-pandemiclevels3.Thehighcroppricesdrovestrongfarmerincome,despitethehighercostenvironment(fertilizer,chemicals,labor,energy)facedbyfarmers.Asaresult,cropprotectiondemandstayedstrongin2022andfarmerswereabletoabsorbcropprotectionpriceincreases.Goinginto2023,cropprotectionchannelinventoriesinsomeregionsareaboveaverage,whichmaydampendemandinthenearfuture.Thecostenvironmenthasimprovedthroughoutthesecondhalfof2022,asrawmaterialandactiveingredientpricesinChinacontinuedtodecline,logisticpricesnormalizedandenergypriceseased.However,costsarestillhigherthanpre-pandemiclevels,withsomeareasstillexperiencingespeciallyhighcosts,likeEuropeanco-formulantsandinlandtransportation.SustainabilityPromotingsustainabilityinagriculturebyprovidingasolutionthatenablesfarmerstoswitchtoacropthatrequireslesswater:DoubleTeamSorghumCroppingSolutionprovidefarmerswithFirstAct,apost-emergentgrassweedcontrolandaherbicide-tolerantDTtraithybridseed,providingthemthetoolstoswitchtoSorghum,adroughttolerantcropthatrequireslesswater,enablingregenerativefarmingpractices.TheDoubleTeamSorghumCroppingSolutionisajointeffortbetweenADAMAUSandS&WSeedCo.SustainabilityinProducts:ADAMA'shigh-loadformulationsinAustraliahaveledtosubstantialsavingsinenergy/waterconsumption,usageofco-formulants,amountofpackagingused,storageandaccompanyingmaterialsaswellastransportation.ADAMA'snewproprietaryhigh-loadformulationtechnologyplatformSesgama,hasbeengrantedapatent.Sustainabilityinmanufacturing:Carbonfootprintreductionofahigh-marginleadinginsecticidebyloweringenergyusageandreducingCO2emissions,whileincreasingproductionoutputandcapacity.PortfolioDevel。
2. opmentUpdateFormulationMasteryprogress:Araddo,adualmodeherbicideforuseinsoybeanwontheawardfor“BestFormulationInnovation”intheIHSMarkit's2022CropScienceForum&Awards,November2022.AraddoisthefirstproducttocombineACC'aseInhibitionandAuxinherbicidalmodesofaction,overcomingthechemicaldegradationbetweenthetwoactiveingredients.PatentgrantedforSesgama,aproprietaryformulationtechnologyplatformforhigh-loadandotherchallengingformulations,enablinglessuseofco-formulants,transportandpackaging2Sources:Rabobank,AgriCommodityMarketsResearch,Dec2022;AgbioInvestor-Quarterly-Briefing-Service-PLUS_Q4-2022;JPM:GlobalEconomicResearch,GlobalDataWatch,Dec2022;JPM:AgriculturalMarketsWeekly,Dec20223Source:AgbioInvestor-Quarterly-Briefing-Service-PLUS_Q4-20224materialsperacretreatedwitharesultingimprovedproductsustainabilityprofile.Firstproductsexpectedtobelaunchedinthecomingyear.ProductLaunches&Registrations:During2022ADAMAcontinuedtoregisterandlaunchmultiplenewproductsinmarketsacrosstheglobe,addingontoitsdifferentiatedproductportfolio.Differentiatedproductsmayalsobebasedonrecentlyoff-patentedactiveingredients(AI's)thathavebeenclassifiedashighcommercialpotential-"CoreLeap"AI'sandincludeavarietyofproductcharacteristicssuchas(i)uniqueproprietaryformulations,(ii)productswithmorethanonemodeofaction,and(iii)biologicals.Amongthesewere:Launchof18newdifferentiatedproductsduring2022inselectcountriesincludingthefollowingproductsduringthefourthquarterof2022:LaunchinBrazilofProtege,amicrobialbasedbiologicalnematicideandfungicide(basedonatriplemicrobecombination)forsugarcaneandsoybeanthatalsoincreasesproductivity.LaunchinBrazilofEmerge,abio-stimulantbasedonanenrichedfermentedSeaweedExtract,promotingroot/vegetativegrowthandnutrientuptakeintheestablishmentphase,targetedforSoybean,CottonandCorn.LaunchinseveralcentralAmericancountriesofADAMA'ssustainableofferingofbiologicalproductsincludingExpertGrow.LaunchinEcuadorofCustodiaActive,abroad-spectrumdualactionsystemicfungicideforuseinRiceandCornthatalsoincreasesproductivity.LabelExtensionofFolpan500SCinGermanyamulti-sitecontactmode-of-actionfungicide,foruseonBarleyagainstleafspotdiseases.(duringQ22022thisproductwasgranted"NationwideemergencyregistrationforFOLPAN500SCagainstRamulariacollo-cygniinBarley"allowingittobeusedonlyforthisspecification.)LaunchinPanamaandElSalvadorofTrivor,adualactioninsecticideforuseinVegetables.LaunchinseveralcentralAmericancountriesofBanjoForte400SC,adualmodefoliarfungicideforuseinFruit,Vegetablesandspecialtycrops.LaunchinRussiaofCormoran,adualmodeinsecticidethatincludesADAMA'sproprietaryAINovaluron.Pre-launchinParaguayofAraddo,aninnovativedualmodeherbicideandPlethora,abroadspectrum,dualmodeinsecticidethatincludesADAMA'sproprietaryAINovaluronandIndoxacarbproducedin-house.LaunchinFranceofHelanov,adifferentiatedherbicideforuseinSugarBeets.Registrationof10newdifferentiatedproductsduring2022inselectcountriesincludingthefollowingproductsduringthefourthquarterof2022:RegistrationinIndiafor"CoreLeap"insecticideAI,Chlorantraniliprole(CTPR).RegistrationintheUSAofFullscript,adualmodeherbicideforrice,partoftheFullPagericecroppingsolution,incollaborationwithRiceTech.RegistrationinParaguayofApresa,apre-emergentdualmodeherbicide,poweredbyADAMA’sproprietaryT.O.V.FormulationTechnology.5FinancialHighlightsRevenuesinthefourthquarterdeclinedbyapproximately2%(+9%inRMBterms;+1%inCERterms)to$1,312million,reflectinganincreaseof6%inpricesandadecreaseof6%involumesmainlyduetoadvancementofsalesinBrazilfromthefourthquarterin2022tothethirdquarter,adeclineinrawmaterial,finechemicalsandintermediatessalesinChinaandthedepreciationoftheEuroincomparisontotheUSDollar.DespitetheshiftofsalesinBrazilfromthefourthquartertothethirdquarter,theCompany'ssalesgrewinconstantexchangeratesacrossmostregions.Inthefullyear2022,salesreachedarecord-highof$5,570million,anincreaseof16%(+20%inRMBterms;+19%inCERterms),drivenbya16%increaseinpricesanda4%growthinvolume.Theincreaseinsalesinthefullyearperiodreflectedthestrongdemandinthemarketforcropprotectionproducts,ledbysalesinBrazilandChina.Table2.RegionalSalesPerformance*Asof2023,theIndia,MiddleEast&Africa(IMA)regionhasbeenreorganizedsuchthatthecountriesformerlyincludedinthisregionwillnowbeincludedintheEuroperegion(renamedEAME)orintheAsiaPacificregion.Proformaregionalsaleswillbeprovidedinthequarterly2023financialresultspressreleases.Europe:ExcludingUkrainebasedsales,thesalesinEuropegrewbyadouble-digitpercentageinthefourthquarterandfullyearperiod.ThisgrowthwasachievedbygainingmarketshareovertheyearinsomekeycountriessuchasFrance,Italy,RomaniaandGreeceandwasalsosupportedbytheintroductionoftheproductSoratel,whichincludesADAMA’sproprietaryAsorbitalformulationtechnology.ThegrowthwasachieveddespitedroughtmainlyinthesouthofEurope,supplychallengesandhighchannelinventoriesinsomecountries.NorthAmerica:IntheUSAgmarket,salesincreasedinthefullyearperioddespiteadverseweatherconditionsmainlyinthesecondhalfoftheyear,impactingtheCaliforniaFruit&VegetablemarketandtheCottonmarketacrossTexasandthesouthwestregions,bothimportantmarketsfortheCompany.VerystronggrowthinsalesachievedinCanadainthefullyearperiodandfourthquarterinallcategories:herbicides,fungicidesandinsecticides.TheCompany'snewin-houseproductionatHuifengofcerealherbicidessupportedsalesagainstthebackdropofsupplyshortagesinthemarket,whilebroadeningofthefungicideportfolioandincreasedinsectpressuredrovefungicideandinsecticidesales,respectively.TheConsumer&Professionalbusinessgrewnicelyoverthefullyearperiodfollowingrobustdemand,whileinthesecondhalfoftheyeartherewasaslowdowninthisgrowthduetoQ42022$mQ42021$mChangeUSDChangeCER2022$m2021$mChangeUSDChangeCEREurope2542473%12%1,1151,0724%11%NorthAmerica2912891%2%1,02791712%12%LatinAmerica431456(5%)(9%)1,5921,27625%22%AsiaPacific208221(6%)0%1,16689830%34%OfwhichChina130133(2%)1%73551343%45%India,MiddleEast&Africa1271252%14%6696503%16%Total1,3121,337(2%)1%5,5704,81316%19%6inflationarypressureonconsumerdemandandaslowdownintheprofessionalmarketmostlyduehighlevelsofinventoryinthechannelandexpectationforpricedecreases.LatinAmerica:Inthefu。
3. llyearperiodtheCompanyachievedverystronggrowthinsalesinBrazil,drivenbyprices,volumeandnewinnovativeformulationproductlaunches,suchasfungicideARMEROandherbicideARADDO.SlowdowninsalesinBrazilinthefourthquarterwasduetoadvancementofsalesfromthefourthquarterin2022tothethirdquarter.InotherLATAMcountrieshighersaleswereachievedinthefullyearperioddespiteadverseweatherconditions.Inthefourthquarterthesalesremainedstable.During2022theCompanycontinuedwiththerolloutofbiologicalproductsinthisregion,whichisakeymarketforFruit&Vegetablecropsforexport.Asia-Pacific(APAC):Duringthefullyearperiodof2022theCompany’ssignificantgrowthinAsiaPacificwasledbythestrongsalesofrawmaterial,intermediatesandfinechemicalsinChina.Inthefourthquarter,adeclinewasrecordedinsuchsalesfollowingthesofteningofdemandintheChinesemarketandanoveralldeclineinmarketprices.ThesalesinChinaofADAMA'sbrandedportfolioalsocontinuedtogrownicelyduringthefullyearperioddespitethestrongcompetitioninthemarket,andalsoincludedthecontributionofacompanyacquiredin2021.InthewiderAPACregiongrowthinsalesinthefullyearperiodwassupportedbythepositiveimpactofarare3rdconsecutiveyearofLaNiaanddespitestrongcompetitionfromChina.Inthefourthquarter,saleswerenegativelyimpactedbyexcessiverainandfloodinginsomekeyareasoftheregion.TheslowdowninsalesinthefourthquarterinthePacificregionwasalsoduetoadvancementofsalesfromthefourthquarterin2022tothethirdquarter.India,MiddleEast&Africa:SalesgrewmoderatelyinUSDtermsandnicelyinconstantexchangeratesin2022andinthefourthquarter.InthefullyearperiodthegrowthwasledbyMiddleEasterncountries,as2021wasaverystrongyearinIndia.InthefourthquarterthesalesinIndiaalsogrewnicelyduetopositiveweatherconditions.GrossProfitreportedinthefourthquarterdeclinedby11%to$304million(grossmarginof23.2%)comparedto$343million(grossmarginof25.6%)inthesamequarterlastyearandincreasedby19%to$1,403million(grossmarginof25.1%)inthefullyearof2022comparedto$1,183million(grossmarginof24.6%)in2021.Adjustmentstoreportedresults:Theadjustedgrossprofitincludesallidlenesscosts,inventoryimpairmentandtaxesandsurchargeandexcludescertaintransportationcosts(classifiedunderoperatingexpenses).Additionally,inthefourthquarterandfullyearof2021certainextraordinarychargesrelatedlargelytoatemporarydisruptionoftheproductionofcertainproductswereadjusted.Thesechargeshavesignificantlydeclinedsincethefirstquarterof2022,astherelocationandupgradeofthemanufacturingJingzhousiteinChinahasbeencompletedandisnowatahighlevelofoperation.Excludingtheimpactoftheabovementionedextraordinaryitems,adjustedgrossprofitinthefourthquarterwasdown17%to$341million(grossmarginof26.0%)comparedto$412million(grossmarginof30.8%)inthesamequarterlastyearandwasup11%to$1,565million(grossmarginof28.1%)inthefullyearof2022comparedto$1,412million(grossmarginof29.3%)in2021.Thedeclineingrossprofitinthefourthquarterwasduetothedeclineinsales,asdescribedabove,exchangeratesandhigherprocurement,productionandlogisticscosts,whichwereimpactedamongstotherfactorsbyhigherinflation.Likewise,duringthequarter,theCompanyrecordedcertainnon-recurringexpensesattributedtoimplementationofsustainablemanufacturingpractices.7Forthefullyearperiod,thehighergrossprofitwasmainlydrivenbythemarkedlyhigherprices,complementedbyvolumegrowth,whichoffsetthehigherlogistic,procurementandproductioncosts,aswellasthenegativeimpactofexchangerates.Operatingexpensesreportedinthefourthquarterwere$278million(21.2%ofsales)and$1,013million(18.2%ofsales)inthefullyearof2022,comparedto$233million(17.4%ofsales)and$892million(18.5%ofsales)inthecorrespondingperiodslastyear,respectively.Adjustmentstoreportedresults:pleaserefertotheexplanationregardingadjustmentstothegrossprofitinrespecttocertaintransportationcosts,idleness,taxesandsurchargesandinventoryimpairment.Additionally,theCompanyrecordedcertainnon-operationalchargeswithinitsreportedoperatingexpensesamountingto$26millioninQ42022incomparisonto$1millioninQ42021and$57millioninthefullyearof2022incomparisonto$33millionin2021.Thesechargesincludemainly(i)non-cashamortizationchargesinrespectofTransferAssetsreceivedfromSyngentarelatedtothe2017ChemChina-Syngentaacquisition,(ii)chargesrelatedtothenon-cashamortizationofintangibleassetscreatedaspartofthePurchasePriceAllocation(PPA)onacquisitions,withnoimpactontheongoingperformanceofthecompaniesacquired,(iii)provisionforassetimpairmentinoneofitssubsidiariesand(iv)incentiveplans-share-basedcompensation.Forfurtherdetailsonthesenon-operationalcharges,pleaseseetheappendixtothisrelease.Excludingtheimpactoftheabovementionednon-operationalcharges,adjustedoperatingexpensesinthefourthquarterandfullyearof2022were$286million(21.8%ofsales)and$1,107million(19.9%ofsales),comparedto$269million(20.1%ofsales)and$986million(20.5%ofsales)inthecorrespondingperiodslastyear,respectively.Thehigheroperatingexpensesinthefourthquarterreflectedinflationarypressures.Inthefullyearof2022,thehigheroperatingexpensesalsoreflectedthestronggrowthofthebusiness,whichincludedhighertransportationandlogisticscosts,anincreaseinexpensesattributedtocompanysuccess-basedemployeecompensation,thecontributionofacompanyacquiredin2021,adoubtfuldebtprovisionfortradereceivablesinUkrainemoderatedbythepositiveimpactofexchangerates.Operatingincomereportedinthefourthquarteramountedto$26million(2.0%ofsales)comparedto$110million(8.2%ofsales)inthesamequarterlastyearandwasup34%to$389million(7.0%ofsales)inthefullyearof2022comparedto$291million(6.0%ofsales)lastyear.Excludingtheimpactoftheabovementionednon-operationalitems,adjustedoperatingincomeinthefourthquarteramountedto$55million(4.2%ofsales)comparedto$143million(10.7%ofsales)inthesamequarterlastyearandwasup8%to$458million(8.2%ofsales)inthefullyearof2022comparedto$425million(8.8%ofsales)in2021.EBITDAreportedinthefourthquarteramountedto$127million(9.6%ofsales)comparedto$188million(14.1%ofsales)inthesamequarterlastyearandwasup23%to$731million(13.1%ofsales)inthefullyearof2022comparedto$593million(12.3%ofsales)lastyear.Excludingtheimpactoftheabovementionednon-operationalitems,adjustedEBITDAinthefourthquarteramountedto$129million(9.8%ofsales)comparedt。
4. o$207million(15.5%ofsales)inthesamequarterlastyearandwasup10%to$740million(13.3%ofsales)inthefullyearof2022comparedto$671million(13.9%ofsales)in2021.Financialexpensesreportedamountedto$47millioninthefourthquarterand$271millioninthefullyearof2022,comparedto$63millionand$207millioninthecorrespondingperiodslastyear,respectively.8Adjustmentstoreportedresults:Theadjustedfinancialexpenseshavebeenadjustedforanon-recurring,non-cash,incomeduetorevaluationofputoptionsattributedtominoritystakes.Adjustedfinancialexpenseswere$94millioninthefourthquarterand$314millioninthefullyearof2022,comparedto$62millionand$206millioninthecorrespondingperiodslastyear,respectively.Thehigherfinancialexpensesweremainlydrivenby(i)theneteffectofthehighIsraeliCPIontheILS-denominated,CPI-linkedbondsand(ii)higherhedgingcostsonexchangeratesmainlyduetovolatilityintheILS/Dollarexchangerate.Inthefullyearperiod,theseexpensesalsoincludedputoptionsattributedtominoritystakesacquiredin2021.AdjustedTaxesonincomeinthefourthquarterwere$3millionand$26millioninthefullyearof2022,comparedto$27millionand$79millioninthecorrespondingperiodslastyear,respectively.Inthefourthquarterof2022thetaxesweresignificantlylowerduetorecordingalossbeforetaxincomparisontoaprofitbeforetaxinthefourthquarterof2021andduetotheimpactofthestrongerBRLthatledtolowertaxexpenses;impactswhichweremoderatedbyaone-timetaxexpenseelectingtoapplyfortemporaryreliefavailablein2022andreducingtaxexposureinIsraelgoingforward.Inthefullyearof2022,thecompanyalsorecognizedahigherdeferredtaxasset,relatedtointer-groupsales,thatledtoadeclineinthetaxonincome.NetincomeattributabletotheshareholdersoftheCompany,inthefourthquartertheCompanyreportedanetlossof$22millionandinthefullyearof2022anetincomeof$96million(1.7%ofsales),comparedtoanetincomeof$25million(1.9%ofsales)andanetincomeof$25million(0.5%ofsales)inthecorrespondingperiodslastyear,respectively.Excludingtheimpactoftheabovementionedextraordinaryandnon-operationalcharges,adjustednetincome(loss)inthefourthquarterwasalossof$42millionandanincomeof$118million(2.1%ofsales)inthefullyearof2022,comparedtoanincomeof$54million(4.0%ofsales)and$139million(2.9%ofsales)inthecorrespondingperiodslastyear,respectively.TradeworkingcapitalasofDecember31,2022,was$2,634millioncomparedto$2,210millionatthesamepointlastyear.TheincreaseinworkingcapitalwasduetoanincreaseinthevalueandlevelsofinventoryheldbytheCompanytosupportthesalesinlightofsupplyshortages,logisticchallengesandinventorycostsincreases.Inthefourthquartertheprocurementofinventorydeclinedincomparisontothethirdquarterof2022.Theincreaseininventorylevelswasmoderatedbyhighertradepayables.Tradereceivablesincreasedslightlydespitethestronggrowthinsales,reflectinggoodcollectionsacrosstheboard.CashFlow:Operatingcashflowof$352millionwasgeneratedinthefourthquarterand$106milliongeneratedinthefullyearof2022,comparedto$372millionand$710milliongeneratedinthecorrespondingperiodslastyear,respectively.Thelowercashflowgeneratedinthefullyearof2022wasprimarilyduetohigherpaymentstosupplierstosupporttheprocurementofinventory.Netcashusedininvestingactivitieswas$96millioninthefourthquarterand$396millioninthefullyearof2022,comparedto$136millionand$525millioninthecorrespondingperiodslastyear,respectively.Thecashusedininvestingactivitiesinthefourthquarterof2022largelyrelatedtoinvestmentsnewproductionfacilitiesinADAMAAnponandinvestmentsinintangibleassetsrelatingtoADAMA'sglobalregistrations.Inthefullyearof2022,cashwasalsousedforinvestingin"CoreLeap"manufacturingcapabilitiesinIsraelandBrazil(Multi-PurposeProductionSite).Inthefullyearof2021,cashwasalsousedforthecompletionofthepaymentandacquisitionofHuifeng’sdomesticcommercialcropprotectionbusinessandmanufacturingsite,aswellasfortherelocationandupgradeofthemanufacturingSanondaJingzhousite,bothcompletedtowardstheendofthesecondquarterof2021.9Freecashflowof$204millionwasgeneratedinthefourthquarterand$417millionconsumedinfullyearof2022comparedto$190milliongeneratedand$75milliongeneratedinthecorrespondingperiodslastyear,respectively,reflectingtheaforementionedoperatingandinvestingcashflowdynamics.Table3.RevenuesbyoperatingsegmentSalesbysegmentQ42022USD(m)%Q42021USD(m)%2022USD(m)%2021USD(m)%CropProtection1,20792%1,19790%5,03290%4,34990%IntermediatesandIngredients1058%14010%53810%46410%Total1,312100%1,337100%5,570100%4,813100%SalesbyproductcategoryQ42022USD(m)%Q42021USD(m)%2022USD(m)%2021USD(m)%Herbicides54642%58244%2,47945%1,97241%Insecticides38229%35927%1,50527%1,42530%Fungicides27921%25619%1,04819%95220%IntermediatesandIngredients1058%14010%53810%46410%Total1,312100%1,337100%5,570100%4,813100%Note:thesalessplitbyproductcategoryisprovidedforconveniencepurposesonlyandisnotrepresentativeofthewaytheCompanyismanagedorinwhichitmakesitsoperationaldecisions.Numbersmaynotsumduetorounding.FurtherInformationAllfilingsoftheCompany,togetherwithapresentationofthekeyfinancialhighlightsoftheperiod,canbeaccessedthroughtheCompanywebsiteat.10AboutADAMAADAMALtd.isagloballeaderincropprotection,providingsolutionstofarmersacrosstheworldtocombatweeds,insectsanddisease.ADAMAhasoneofthewidestandmostdiverseportfoliosofactiveingredientsintheworld,state-of-theartR&D,manufacturingandformulationfacilities,togetherwithaculturethatempowersourpeopleinmarketsaroundtheworldtolistentofarmersandideatefromthefield.ThisuniquelypositionsADAMAtoofferavastarrayofdistinctivemixtures,formulationsandhigh-qualitydifferentiatedproducts,deliveringsolutionsthatmeetlocalfarmerandcustomerneedsinover100countriesglobally.Formoreinformation,visitusatandfollowusonTwitterat@ADAMAAgri.ContactRivkaNeufeldZhujunWangGlobalInvestorRelationsChinaInvestorRelationsEmail:ir@adama.comEmail:irchina@adama.com11AbridgedAdjustedConsolidatedFinancialStatementsThefollowingabridgedconsolidatedfinancialstatementsandnoteshavebeenpreparedasdescribedinNote1inthisappendix.WhilepreparedbasedontheprinciplesofChineseAccountingStandards(ASBE),theydonotcontainalloftheinformationwhicheitherASBEorIFRSwouldrequireforacompletesetoffinancialstatements,andshouldbereadinconjunctionwiththeconsolidatedfinancialstatement。
5. sofbothADAMALtd.andAdamaAgriculturalSolutionsLtd.asfiledwiththeShenzhenandTelAvivStockExchanges,respectively.Relevantincomestatementitemscontainedinthisreleasearealsopresentedonan“Adjusted”basis,whichexcludeitemsthatareofaone-timeornon-cash/non-operationalnaturethatdonotimpacttheongoingperformanceofthebusiness,andreflectthewaytheCompany’smanagementandtheBoardofDirectorsviewtheperformanceoftheCompanyinternally.TheCompanybelievesthatexcludingtheeffectsoftheseitemsfromitsoperatingresultsallowsmanagementandinvestorstoeffectivelycomparethetrueunderlyingfinancialperformanceofitsbusinessfromperiodtoperiodandagainstitsglobalpeers.AbridgedConsolidatedIncomeStatementfortheFourthQuarterAdjusted4Q42022USD(m)Q42021USD(m)Q42022RMB(m)Q42021RMB(m)Revenues1,3121,3379,3048,550CostofSales9489186,7245,870Othercosts23716546Grossprofit3414122,4152,634%ofrevenue26.0%30.8%26.0%30.8%Selling&Distributionexpenses1981981,4021,265General&Administrativeexpenses6045426289Research&Developmentexpenses2325162161Otheroperatingexpenses51365Totaloperatingexpenses2862692,0261,719%ofrevenue21.8%20.1%21.8%20.1%Operatingincome(EBIT)55143389915%ofrevenue4.2%10.7%4.2%10.7%Financialexpensesandinvestmentincome9462664398Incomebeforetaxes(39)81(274)517TaxesonIncome32721173NetIncome(42)54(295)344Attributableto:Non-controllinginterest0000ShareholdersoftheCompany(42)54(295)344%ofrevenue(3.2%)(4.0%)(3.2%)4.0%Adjustments(19)29(136)183ReportedNetincomeattributabletotheshareholdersoftheCompany(22)25(159)161%ofrevenue(1.7%)1.9%(1.7%)1.9%AdjustedEBITDA1292079131,324%ofrevenue9.8%15.5%9.8%15.5%AdjustedEPS5–Basic(0.0178)0.0231(0.1265)0.1476–Diluted(0.0178)0.0231(0.1265)0.1476ReportedEPS2–Basic(0.0096)0.0108(0.0681)0.06924Forananalysisofthedifferencesbetweentheadjustedincomestatementitemsandtheincomestatementitemsasreportedinthefinancialstatements,seebelow“AnalysisofGapsbetweenAdjustedIncomeStatementandIncomeStatementinFinancialStatements”.5ThenumberofsharesusedtocalculatebothbasicanddilutedearningspershareinbothQ4andFY2021and2022is2,329.8millionshares.12–Diluted(0.0096)0.0108(0.0681)0.0692AbridgedConsolidatedIncomeStatementfortheFullYear2022Adjusted62022USD(m)2021USD(m)2022RMB(m)2021RMB(m)Revenues5,5704,81337,38231,039CostofSales3,9153,37726,29321,779Othercosts9024607156Grossprofit1,5651,41210,4829,103%ofrevenue28.1%29.3%28.0%29.3%Selling&Distributionexpenses8057435,4094,793General&Administrativeexpenses2061711,3881,100Research&Developmentexpenses8678578502Otheroperatingexpenses11(5)68(33)Totaloperatingexpenses1,1079867,4426,362%ofrevenue19.9%20.5%19.9%20.5%Operatingincome(EBIT)4584253,0402,742%ofrevenue8.2%8.8%8.1%8.8%Financialexpensesandinvestmentincome3142062,1261,328Incomebeforetaxes1442199141,414TaxesonIncome2679174511NetIncome118140740903Attributableto:Non-controllinginterest0107ShareholdersoftheCompany118139740895%ofrevenue2.1%2.8%2.0%2.9%Adjustments21114131738ReportedNetincomeattributabletotheshareholdersoftheCompany9625609157%ofrevenue1.7%0.5%1.6%0.5%AdjustedEBITDA7406714,9404,328%ofrevenue13.3%13.9%13.2%13.9%AdjustedEPS7–Basic0.05050.05960.31770.3843–Diluted0.05050.05960.31770.3843ReportedEPS2–Basic0.04130.01060.26160.0676–Diluted0.04130.01060.26160.06766Forananalysisofthedifferencesbetweentheadjustedincomestatementitemsandtheincomestatementitemsasreportedinthefinancialstatements,seebelow“AnalysisofGapsbetweenAdjustedIncomeStatementandIncomeStatementinFinancialStatements”.7ThenumberofsharesusedtocalculatebothbasicanddilutedearningspershareinbothQ4andFY2021and2022is2,329.8millionshares.13AbridgedConsolidatedBalanceSheetDecember312022USD(m)December312021USD(m)December312022RMB(m)December312021RMB(m)AssetsCurrentassets:Cashatbankandonhand6169134,2915,819Billsandaccountsreceivable1,4331,4239,9809,071Inventories2,4301,84316,92711,750Othercurrentassets,receivablesandprepaidexpenses2792741,9431,748Totalcurrentassets4,7584,45333,14128,389Non-currentassets:Fixedassets,net1,7111,59911,91410,192Rightsofuseassets8073556464Intangibleassets,net1,4571,52710,1489,736Deferredtaxassets1931131,347723Othernon-currentassets126115875732Totalnon-currentassets3,5673,42724,84021,847Totalassets8,3257,87957,98050,235LiabilitiesCurrentliabilities:Loansandcreditfrombanksandotherlenders8054195,6052,671Billsandaccountspayable1,2411,0658,6426,788Othercurrentliabilities9297736,4684,929Totalcurrentliabilities2,9742,25720,71514,387Long-termliabilities:Loansandcreditfrombanksandotherlenders5265493,6633,499Debentures1,0561,2237,3547,797Deferredtaxliabilities4560316380Employeebenefits114124792792Otherlong-termliabilities2903612,0172,304Totallong-termliabilities2,0302,31714,14114,773Totalliabilities5,0054,57434,85629,160EquityTotalequity3,3203,30623,12521,075Totalliabilitiesandequity8,3257,87957,98050,23514AbridgedConsolidatedCashFlowStatementfortheFourthQuarterQ42022USD(m)Q42021USD(m)Q42022RMB(m)Q42021RMB(m)Cashflowfromoperatingactivities:Cashflowfromoperatingactivities3523722,4992,380Cashflowfromoperatingactivities3523722,4992,380Investingactivities:Acquisitionsoffixedandintangibleassets(99)(123)(699)(786)Proceedsfromdisposaloffixedandintangibleassets21137Otherinvestingactivities0(15)2(93)Cashflowusedforinvestingactivities(96)(136)(684)(872)Financingactivities:Receiptofloansfrombanksandotherlenders7981559516Repaymentofloansfrombanksandotherlenders(142)(159)(1,006)(1,015)Interestpaymentandother(53)(47)(379)(302)Otherfinancingactivities(47)30(336)193Cashflowfrom(usedfor)financingactivities(164)(95)(1,163)(609)Effectsofexchangeratemovementoncashandcashequivalents21(70)(80)Netchangeincashandcashequivalents94142582819Cashandcashequivalentsatthebeginningoftheperiod5137623,6434,940Cashandcashequivalentsattheendoftheperiod6079034,2255,759FreeCashFlow2041901,4451,21215AbridgedConsolidatedCashFlowStatementfortheFullYear20222022USD(m)2021USD(m)2022RMB(m)2021RMB(m)Cashflowfromoperatingactivities:Cashflowfromoperatingactivities1067109414,562Cashflowfromoperatingactivities1067109414,562Investingactivities:Acquisitionsoffixedandintangibleassets(397)(402)(2,667)(2,589)Proceedsfromdisposaloffixedandintangibleassets1348527Acquisiti。
6. onofsubsidiaries0(101)0(655)Otherinvestingactivities(12)(26)(78)(166)Cashflowusedforinvestingactivities(396)(525)(2,660)(3,383)Financingactivities:Receiptofloansfrombanksandotherlenders6697564,4684,885Repaymentofloansfrombanksandotherlenders(342)(570)(2,331)(3,670)Interestpaymentandother(137(117)(933)(755)Dividendstoshareholders(3)(6)(19)(37)Otherfinancingactivities(187)64(1,242)414Cashflowfrom(usedfor)financingactivities(0)128(56)837Effectsofexchangeratemovementoncashandcashequivalents(7)2241(91)Netchangeincashandcashequivalents(297)316(1,534)1,925Cashandcashequivalentsatthebeginningoftheperiod9035885,7593,835Cashandcashequivalentsattheendoftheperiod6079034,2255,759FreeCashFlow(417)75(2,593)46716NotestoAbridgedConsolidatedFinancialStatementsNote1:BasisofpreparationBasisofpresentationandaccountingpolicies:TheabridgedconsolidatedfinancialstatementsforthequartersendedDecember31,2022and2021incorporatethefinancialstatementsofADAMALtd.andofallofitssubsidiaries(the“Company”),includingAdamaAgriculturalSolutionsLtd.(“Solutions”)anditssubsidiaries.TheCompanyhasadoptedtheAccountingStandardsforBusinessEnterprises(ASBE)issuedbytheMinistryofFinance(the"MoF")andtheimplementationguidance,interpretationsandotherrelevantprovisionsissuedorrevisedsubsequentlybytheMoF(collectivelyreferredtoas“ASBE”).Notethatinthereportedfinancialstatements,asaresultofrecentchangesintheASBEguidelines(IAS37),certainitemsasofQ42021(specificallycertaintransportationcostsandcertainidlenesscharges)havebeenreclassifiedfromOperatingExpensestoCOGS.Seethenotestothefinancialstatementsformoredetailsinthisregard.TheabridgedconsolidatedfinancialstatementscontainedinthisreleasearepresentedinbothChineseRenminbi(RMB),astheCompany’ssharesaretradedontheShenzhenStockExchange,aswellasinUnitedStatesdollars($)asthisisthemajorcurrencyinwhichtheCompany’sbusinessisconducted.Forthepurposesofthisrelease,acustomaryconveniencetranslationhasbeenusedforthetranslationfromRMBtoUSdollars,withIncomeStatementandCashFlowitemsbeingtranslatedusingthequarterlyaverageexchangerate,andBalanceSheetitemsbeingtranslatedusingtheexchangerateattheendoftheperiod.Thepreparationoffinancialstatementsrequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilitiesanddisclosureofcontingentassetsandliabilitiesatthedateofthefinancialstatements,andthereportedamountsofrevenuesandexpensesduringthereportingperiod.Actualresultscoulddifferfromthoseestimated.Note2:AbridgedFinancialStatementsForeaseofuse,thefinancialstatementsshowninthisreleasehavebeenabridgedasfollows:AbridgedConsolidatedIncomeStatement:“Grossprofit”inthisreleaseisrevenuelesscostsofgoodssold,taxesandsurcharges,inventoryimpairmentandotheridlenesscharges(inadditiontothosealreadyincludedincostsofgoodssold);partoftheidlenesschargesisremovedintheAdjustedfinancialstatements“Otheroperatingexpenses”includesimpairmentlosses(notincludinginventoryimpairment);gain(loss)fromdisposalofassetsandnon-operatingincomeandexpenses“Operatingexpenses”inthisreleasedifferfromthoseintheformallyreportedfinancialstatementsinthatinthereportedfinancialstatements,asaresultofrecentchangesintheASBEguidelines(IAS37),certainitemsasofQ42021(specificallycertaintransportationcostsandcertainidlenesscharges)havebeenreclassifiedfromOperatingExpensestoCOGS.“Financialexpensesandinvestmentincome”includesnetfinancingexpenses;gainsfromchangesinfairvalue;andinvestmentincome(includingshareofincomeofequityaccountedinvestees)AbridgedConsolidatedBalanceSheet:“Othercurrentassets,receivablesandprepaidexpenses”includesfinancialassetsheldfortrading;financialassetsinrespectofderivatives;prepayments;otherreceivables;andothercurrentassets“Fixedassets,net”includesfixedassetsandconstructioninprogress“Intangibleassets,net”includesintangibleassetsandgoodwill“Othernon-currentassets”includesotherequityinvestments;long-termequityinvestments;long-termreceivables;investmentproperty;andothernon-currentassets“Loansandcreditfrombanksandotherlenders”includesshort-termloansandnon-currentliabilitiesduewithinoneyear“Othercurrentliabilities”includesfinancialliabilitiesinrespectofderivatives;payablesforemployeebenefits,taxes,interest,dividendsandothers;advancesfromcustomersandothercurrentliabilities“Otherlong-termliabilities”includeslong-termpayables,provisions,deferredincomeandothernon-currentliabilities17IncomeStatementAdjustmentsQ42022USD(m)Q42021USD(m)Q42022RMB(m)Q42021RMB(m)NetIncome(Reported)(22.4)25.8(158.8)165.0AdjustmentstoCOGS&OperatingExpenses:1.AmortizationofLegacyPPAof2011acquisitionofSolutions(non-cash)0.30.31.81.62.AmortizationofTransferassetsreceivedandwritten-updueto2017ChemChina-Syngentatransaction(non-cash)5.94.341.627.23.Upgrade&Relocationrelatedcosts1.829.612.9189.74.Incentiveplans1.1-6.07.8-38.25.Amortizationofacquisition-relatedPPA(non-cash),otheracquisition-relatedcosts4.45.231.333.76.ASBEsclassificationsCOGSimpact(33.7)(36.7)(239.1)(234.4)7.ASBEsclassificationsOPEXimpact33.736.7239.1234.48.Assetimpairmentinsubsidiary15.0-106.4-TotalAdjustmentstoOperatingIncome(EBIT)28.533.4201.8213.9TotalAdjustmentstoEBITDA2.319.116.0122.3AdjustmentstoFinancingExpensesRevaluationofnon-cashadjustmentrelatedtonon-controllinginterest0.60.53.73.4Putoptionrevaluation(47.3)-(335.4)-AdjustmentstoTaxes1.TaxshieldonLegacyPPAof2011acquisitionofSolutions0.00.00.30.33.TaxesrelatedtoUpgrade&Relocationrelatedcosts0.15.00.532.35.Deferredtaxonamortizationofacquisition-relatedPPA,otheracquisition-relatedcosts0.80.95.35.8TotaladjustmentstoNetIncome(19.1)29.0(136.0)178.9NetIncome(Adjusted)(41.5)53.7(294.8)343.8TotaladjustmentstoNetIncomeattributabletotheshareholdersoftheCompany(19.1)28.5(136.0)182.5182022USD(m)2021USD(m)2022RMB(m)2021RMB(m)NetIncome(Reported)96.325.5609.4163.3AdjustmentstoCOGS&OperatingExpenses:1.AmortizationofLegacyPPAof2011acquisitionofSolutions(non-cash)1.01.06.76.52.AmortizationofTransferassetsreceivedandwritten-updueto2017ChemChina-Syngentatransaction(non-cash)22.923.1154.3149.23.Upgrade&Relocationrelatedcosts7.396.548.7622.14.Incentiveplans2.8(4.5)18.2-28.55.Amortizationofacquisition-relatedPPA。
7. (non-cash),otheracquisition-relatedcosts19.516.6130.5106.76.ASBEsclassificationsCOGSimpact(150.0)(128.0)(1,005.3)(825.6)7.ASBEsclassificationsOPEXimpact150.0128.01,005.3825.68.Provisionsinrespectofprioryears’legal-andtax-relatedcosts-1.6-10.39.Assetimpairmentinsubsidiary15.0-106.4-TotalAdjustmentstoOperatingIncome(EBIT)68.5134.3464.9866.3TotalAdjustmentstoEBITDA8.978.559.3507.0AdjustmentstoFinancingExpensesRevaluationofnon-cashadjustmentrelatedtonon-controllinginterest4.20.527.53.4Putoptionrevaluation(47.3)-(335.4)-AdjustmentstoTaxes1.TaxshieldonLegacyPPAof2011acquisitionofSolutions0.10.21.11.13.TaxesrelatedtoUpgrade&Relocationrelatedcosts0.316.91.8109.45.Deferredtaxonamortizationofacquisition-relatedPPA,otheracquisition-relatedcosts3.52.723.217.68.Provisionsintaxexpensesinrespectofprioryears’legal-andtax-relatedcosts-0.4-2.5TotaladjustmentstoNetIncome21.5114.6130.9739.4NetIncome(Adjusted)117.8140.1740.2902.7TotaladjustmentstoNetIncomeattributabletotheshareholdersoftheCompany21.5114.4130.8738.0Notes:1.AmortizationofLegacyPPAof2011acquisitionofSolutions(non-cash):UnderASBE,sincethefirstcombinedreportingforQ32017,theCompanyhasinheritedthehistorical“legacy”amortizationchargethatChemChinapreviouslywasincurringinrespectofitsacquisitionofSolutionsin2011.Thisamortizationisdoneinalinearmanneronaquarterlybasis,mostofwhichwillhavebeencompletedbytheendof2020.2.AmortizationofTransferassetsreceivedandwritten-updueto2017ChemChina-Syngentatransaction(non-cash):TheproceedsfromtheDivestmentofcropprotectionproductsinconnectionwiththeapprovalbytheEUCommissionoftheacquisitionofSyngentabyChemChina,netoftaxesandtransactionexpenses,werepaidtoSyngentainreturnforthetransferofaportfolioofproductsinEuropeofsimilarnatureandeconomicvalue.SincetheproductsacquiredfromSyngentaareofthesamenatureandwiththesameneteconomicvalueasthosedivested,andsincein2018theCompanyadjustedfortheone-timegainthatitmadeonthedivestedproducts,theadditionalamortizationchargeincurredduetothewritten-upvalueoftheacquiredassetsisalsoadjustedtopresentaconsistentviewofDivestmentandTransfertransactions,whichhadnonetimpactontheunderlyingeconomicperformanceoftheCompany.Theseadditionalamortizationchargeswillcontinueuntil2032butatareducingrate,yetwillstillbeatameaningfulleveluntil2028.3.Upgrade&manufacturingfacilitiesrelocation-relatedcosts:Thesechargesallrelatetothemulti-yearUpgrade&RelocationprograminChina.Aspartofthisprogram,productionassetslocatedintheoldproductionsitesinJingzhouandHuai’Anwererelocatedtonewsitesin2020,2021andinthecomingyears.Sincesomeoftheolderproductionassetsmaynotbeabletoberelocated,someoftheseassetswhicharenolongeroperationalarebeingwrittenoff(orimpaired),whileforothers,theireconomiclifehasbeenshortenedandthereforewillbedepreciatedoverashorterperiod.Sincetheseareolderassetsthatwerebuiltmanyyearsagoandwillbereplacedbynewerproductionfacilitiesatthenewsites,andsincetheongoingoperationsofthebusinesswillnotbeimpactedthereby,theCompanyadjustsfortheimpactofallchargesrelatedtotheChinaUpgrade&Relocatedprogram,whichincludemainly:(i)excessprocurementcostsincurredastheCompanycontinuedtofulfilldemandforitsproducts,inordertoprotectitsmarketposition,throughreplacementsourcingatsignificantlyhighercostsfromthird-partysuppliers(ii)elevatedidlenesschargeslargelyrelatedtosuspensionsatthefacilitiesbeingrelocatedThesechargeshavesignificantlydeclinedsincethefirstquarterof2022,astherelocationandupgradeofthemanufacturingJingzhousiteinChinahasbeencompletedandisnowatahighlevelofoperation.4.Incentiveplans:ADAMAgrantedcertainofitsemployees,along-termincentive(LTI)intheformof'phantom'awardslinkedtotheCompany’sshareprice.Assuch,theCompanyrecordsanexpense,orrecognizesincome,dependingonthefluctuationintheCompany’sshareprice,regardlessofawardexercises.ToneutralizetheimpactofsuchsharepricemovementsonthemeasurementoftheCompany’sperformanceandexpectedemployeecompensationandtoreflecttheexistingphantomawards,intheCompany’sadjustedfinancialperformance,theLTIispresentedonanequity-settledbasisinaccordancewiththevalueoftheexistingplanatthegrantdate.195.Amortizationofacquisition-relatedPPA(non-cash)andotheracquisition-relatedcosts:Relatedmainlytothenon-cashamortizationofintangibleassetscreatedaspartofthePurchasePriceAllocation(PPA)onacquisitions,withnoimpactontheongoingperformanceofthecompaniesacquired,aswellasotherM&A-relatedcosts.6.ASBEclassificationCOGS&OPEXimpact–accordingtotheASBEguidelines,certainexpenses,whichthecompanyviewsasCOGS,areclassifiedunderOPEX.Additionally,asaresultofrecentchangesintheASBEguidelines[IAS37],certainitemsasofQ42021(specificallycertaintransportationcostsandcertainidlenesscharges)havebeenreclassifiedfromOperatingExpensestoCOGS.8.Provisionsintaxexpensesrelatedtoprioryears’activities-Provisionsinrespectoftaxexpensesrelatedtoactivitiesofprioryears.9.Assetimpairmentinsubsidiary-non-cash,non-recurringprovisionforassetimpairmentandincomeduetorevaluationofputoptionsattributedtominoritystakeinasubsidiary.20ExchangeRateDatafortheCompany'sPrincipalFunctionalCurrenciesDecember31Q4Average12MAverage20222021Change20222021Change20222021ChangeEUR/USD1.0671.132(5.8%)1.0191.144(10.9%)1.0521.183(11.1%)USD/BRL5.2185.5816.5%5.2565.5845.9%5.1655.3954.3%USD/PLN4.4024.060(8.4%)4.6464.040(15.0%)4.4583.862(15.4%)USD/ZAR16.94915.924(6.4%)17.61815.739(11.9%)16.36714.864(10.1%)AUD/USD0.6800.727(6.5%)0.6570.729(9.9%)0.6940.751(7.6%)GBP/USD1.2041.351(10.9%)1.1711.348(13.1%)1.2341.376(10.3%)USD/ILS3.5193.110(13.2%)3.4933.155(10.7%)3.3583.231(3.9%)USDLIBOR3M4.77%0.22%4.51%0.16%2.41%0.16%December31Q4Average12MAverage20222021Change20222021Change20222021ChangeUSD/RMB6.9656.3769.2%7.0926.39510.9%6.7216.4514.2%EUR/RMB7.4287.2162.9%7.2257.315(1.2%)7.0717.630(7.3%)RMB/BRL0.7490.87514.4%0.7410.87315.1%0.7680.8368.1%RMB/PLN0.6320.6370.7%0.6550.632(3.7%)0.6630.599(10.8%)RMB/ZAR2.4342.4982.6%2.4842.461(0.9%)2.4352.304(5.7%)AUD/RMB4.7334.6332.2%4.6564.659(0.1%)4.6634.844(3.7%)GBP/RMB8.3878.617(2.7%)8.3078.623(3.7%)8.2920.836891.4%RMB/ILS0.5050.488(3.6%)0.4920.4930.2%0.5000.5010.2%RMBLIBOR3M2.42%2.50%(8)bp2.03%2.47%(44)bp2.07%2.52%(4。
8. 5)bp。
