Operating Margin - Adecoagro SA (F:ACD)

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Price: 6.51 EUR -0.69%

Market Cap: 677.9m EUR

0.4%

Current

Average

5.6%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

0.4%

Operating Profit

5.6m

Revenue

1.4B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
LU		Adecoagro SA NYSE:AGRO	735.6m USD	0%
JP	G	Goyo Foods Industry Co Ltd TSE:2230	53.2T JPY	8%
CH		Nestle SA SIX:NESN	199.3B CHF	17%
US		Mondelez International Inc NASDAQ:MDLZ	70.3B USD	12%
FR		Danone SA PAR:BN	50B EUR	13%
ZA	T	Tiger Brands Ltd JSE:TBS	57.6B Zac	11%
US		Hershey Co NYSE:HSY	38.4B USD	17%
CN		Muyuan Foods Co Ltd SZSE:002714	268.7B CNY	17%
ZA	A	Avi Ltd JSE:AVI	34.1B Zac	22%
CH		Chocoladefabriken Lindt & Spruengli AG SIX:LISN	27B CHF	15%
CN		Foshan Haitian Flavouring and Food Co Ltd SSE:603288	221.1B CNY	27%

Adecoagro SA
Glance View

Economic Moat

None

Market Cap

651.6m EUR

Industry

Food Products

Adecoagro SA is a distinctive player operating within the dynamic sphere of agricultural and renewable energy sectors in South America. Founded in 2002, the company has established a significant presence across Argentina, Brazil, and Uruguay, leveraging the rich soils and favorable climates of these regions to flourish. Adecoagro thrives on a diversified business model that includes farming activities—such as crop production, dairy operations, and cattle farming—as well as sugar, ethanol, and energy production. This diversity allows the company to mitigate risks commonly associated with agriculture, such as climatic volatility and market price fluctuations, while capitalizing on the synergy between food production and bioenergy, reflecting a strategic alignment with sustainable development trends. The company's core operations are centered around its extensive farmland, where it grows a variety of crops including rice, corn, soybeans, and wheat. Adecoagro captures value from the entire agricultural cycle, from cultivation to the sale of its products both domestically and globally. In addition to crops, the company manages a substantial dairy farm operation. Yet, perhaps its most progressive venture lies in its sugar and ethanol segment in Brazil. Here, Adecoagro processes sugarcane into sugar, ethanol, and energy, demonstrating the ability to adapt to the world's increasing demand for renewable energy sources. By integrating these processes, Adecoagro not only maximizes the utility of its agricultural outputs but also generates electricity, contributing both to its bottom line and to regional energy needs. This strategic blend of agriculture with renewable energy production positions Adecoagro as an influential force driving both economic and sustainable growth in South America.

View ACD Analysis

ACD Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Adecoagro SA
F:ACD