Investor Presentation • Jul 14, 2022
Investor Presentation
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Aker BioMarine ASA 14 July 2022
▪ Revenue on par with second quarter 2021, with increased EBITDA
1) Aker BioMarine evaluates the performance based on Adjusted EBITDA. This metric is defined as operating profit before depreciation, amortization, write-downs and impairments, and special operating items. Special operating items include gains or losses on sale of assets, if material, restructuring expenses and other material transactions of either non-recurring nature or special in nature compared to ordinary operational income or expenses. There were no adjustments to EBITDA in the quarter.
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Antarctic Endurance phased in since 2019 60,000 Metric tons (MT) Metric tons per day
Focus on lifting Q3 volumes 25,000
Qrill's relative price competitiveness versus alternative ingredients is retained
Assumptions in this example: Krill meal inclusion in feed 8%; Predicted added growth with Krill 5%; Predicted higher yield 1%; Increase in superior quality 5%; Salmon price: USD 8/kg; Qrill Aqua price as estimated 2H 2022
Assumptions in this example: Krill meal inclusion in feed 5%; Predicted added growth with Krill 8%; 6% improvement in feed conversion ratio; 4% improvement in survival rate, Shrimp price: USD 3.30 / kg
Superba sales of USD 14.5 million in the quarter
The ongoing acceleration of the Superba business continues
Strengthening teams in all regions – focus on industry expertise with global & local marketing
New SVP Americas
Simon Seward Charlie Ross New EVP & head of HH&N Q1-22 Q1-22 Q3-21
Thong Luu New SVP Asia
Expanding
Mid-2022 expected as turning point in Superba transition
Large opportunity pipeline & existing customers; the cornerstone of our growth ambitions
Introducing PL+ in Q4 2022: A phospholipid-based delivery platform for health ingredients, expanding the market for krill oil beyond omega-3
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PL+ technology to enhance the bioavailability of health ingredients with poor absorption like CBD, Curcumin and CoQ10
▪ Reduced cost of formulations and increased consumer satisfaction for brand owners
Strengthened marketing capabilities as proprietary science enables new growth opportunities
Group figures
Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022
Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022
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Revenue
Adj. EBITDA and margin USD million
Private label business Lang Pharma Nutrition: sales declined from Q2 2021 driven by supply chain disruption concerning several of the large retailers, resulting in delayed shipments
Segment gross margin was 30% in the quarter, up from 25% same period last year, as a result of increased Kori krill oil sales carrying a higher gross profit than the Lang business
| USD million | Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | 2021 |
|---|---|---|---|---|---|
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) | |
| Net sales | 73.4 | 74.3 | 130.3 | 124.4 | 262.1 |
| Cost of goods sold | (42.8) | (44.6) | (78.6) | (77.5) | (173.9) |
| Gross profit | 30.7 | 29.7 | 51.7 | 47.0 | 88.2 |
| SG&A | (21.0) | (21.9) | (43.6) | (41.5) | (85.7) |
| Depreciation, amortization and imp. (non-production assets) | (4.2) | (6.8) | (8.3) | (11.6) | (19.2) |
| Other operating income | 9.9 | (0.1) | 10.0 | 0 | 3.2 |
| Other operating cost | - | - | - | - | |
| Operating profit (loss) | 15.3 | 0.9 | 8.8 | (6.2) | (13.6) |
| Net financial items | 0.5 | (3.7) | (4.2) | (6.1) | 5.7 |
| Tax expense | (0.8) | (0.4) | (0.4) | (0.7) | (0.8) |
| Net profit (loss) | 15.0 | (3.2) | 5.3 | (13.1) | (8.7) |
| EBITDA reconciliation | |||||
| Net profit (loss) | 15.0 | (3.2) | 5.3 | (13.1) | (8.7) |
| Tax expense | 0.8 | 0.4 | 0.4 | 0.7 | 0.8 |
| Net financial items | (0.5) | 3.7 | 4.2 | 6.1 | (5.7) |
| Depreciation, amortization and imp. | 4.2 | 6.8 | 8.3 | 11.6 | 19.2 |
| D&A and imp. from production assets incl. in COGS | 8.8 | 11.3 | 18.2 | 19.5 | 37.7 |
| EBITDA (unadjusted) | 28.3 | 19.0 | 36.4 | 24.9 | 43.3 |
| Adjustments | (6.9) | 0.3 | (6.9) | 1.2 | 4.7 |
| EBITDA (adjusted) | 21.4 | 19.4 | 29.5 | 26.2 | 48.0 |
▪ High offshore production in Q1-22 contributed to lower unit cost on krill meal in Q2-22, improving margins on Qrill Aqua sales. Margins in the Brands segment is higher due to Kori sales
▪ SG&A on par with last quarter, despite higher inflation rates
▪ Intangible assets amortized according to plan. Depreciation on production related assets included in cost of goods sold. Lower in Q2-22 due to revised useful life of Saga Sea
• Includes the fair value adjustment of Aion following the transaction and subsequent deconsolidation. Also includes effects from rebalancing of the company's fuel hedge program
▪ Net financial items impacted by agio effects on NOK denominated debt
| Q2 2022 | Q2 2021 | 2021 | |
|---|---|---|---|
| USD million | (Unaudited) | (Unaudited) | (Audited) |
| ASSETS | |||
| Property, plant and equipment | 323.1 | 325.2 | 327.9 |
| Right to use assets | 9.1 | 13.4 | 11.3 |
| Intangible assets and goodwill | 164.6 | 174.7 | 171.5 |
| Contract cost | 6.2 | 8.2 | 7.2 |
| Other non-interest-bearing non-current receivables | 0.2 | 0 | - |
| Investments in equity-accounted investees | 11.3 | 0.1 | 0.1 |
| Total non-current assets | 514.5 | 521.5 | 518.0 |
| 165.9 | 141.5 | 138.2 | |
| Inventories | 70.9 | 80.0 | |
| Trade receivable and prepaid expenses | 77.7 | ||
| Derivative assets | 21.4 | 13.6 | 12.5 |
| Cash and cash equivalents | 17.0 | 12.2 | 11.1 |
| Total current assets | 275.2 | 247.3 | 239.5 |
| TOTAL ASSETS | 789.7 | 768.9 | 757.5 |
| LIABILITIES AND OWNERS' EQUITY | |||
| Interest-bearing non-current liabilities | 317.8 | 288.1 | 294.1 |
| Other non-interest-bearing non-current liabilities | 5.5 | 37.1 | 15.7 |
| Total non-current liabilities | 323.2 | 325.2 | 309.8 |
| Interest-bearing debt | 48.9 | 35.4 | 30.7 |
| Accounts payable and other payables | 34.1 | 41.9 | 46.6 |
| Total current liabilities | 83.0 | 77.3 | 77.3 |
| TOTAL LIABILITIES | 406.2 | 402.5 | 387.1 |
| Total equity | 383.7 | 366.4 | 370.5 |
| TOTAL EQUITY AND LIABILITIES | 789.7 | 768.9 | 757.5 |
| ▪ Growth and maintenance CAPEX in the quarter, primarily in the Ingredients segment and includes investments on growth projects such as INVI and Lysoveta |
|---|
| ▪ Prolonged useful life on Saga Sea reducing quarterly depreciations |
| Intangible assets and goodwill |
| ▪ Customer contracts amortized according to plan |
| Inventories Continued build-up of inventory in the Ingredients segment from USD ▪ 119.9m in Q1-22 to USD 129.9 in Q2-22 ▪ Significantly lower unit cost on Qrill Aqua this quarter compared to Q2-21 and previous quarter as a result of higher offshore production and a lower cost base Cash and cash equivalents (including derivatives) ▪ Cash and cash equivalents (including derivatives) was USD 38.4m at quarter-end |
| Investments in associates ▪ The company's investment in Aion has been reclassified from 'Assets held for sale' to 'Investments in associates' and subsequently fair value assessed and deconsolidated based on the merits in the announced transaction Other non-interest bearing non-current liabilities ▪ During the quarter, the final earn-out to the previous owners of Lang Pharma Nutrition ("Lang") was settled at USD 10.5m |
| USD million | Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | 2021 |
|---|---|---|---|---|---|
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Net profit (loss) after tax | 15.0 | (3.2) | 5.3 | (13.1) | (8.0) |
| Net interest and guarantee expenses | (2.1) | 3.4 | 1.6 | 6.5 | 13.7 |
| Interest paid | (3.8) | (3.4) | (7.2) | (5.6) | (12.8) |
| Taxes paid | (0.4) | 0.4 | (1.9) | 3.0 | 3.3 |
| Depreciation and amortization | 13.0 | 18.1 | 26.2 | 31.1 | 51.1 |
| Foreign exchange loss (gain) | 5.4 | (0.1) | 6.2 | (0.1) | (0.3) |
| Change in accounts receivable, other current receivables, inventories, accounts payable and other |
(33.5) | (30.5) | (40.1) | (34.5) | (31.6) |
| Net cash flow from operating activities | (6.8) | (13.0) | (9.9) | (16.5) | 0.7 |
| Payments for property, plant and equipment | (7.7) | (4.2) | (13.7) | (59.3) | (78.7) |
| Payments for intangibles |
(0.7) | (0.4) | (2.1) | (1.0) | (2.4) |
| Proceeds from sales of PPE | – | - | - | – | 1.9 |
| Payment of earn-out | (11.1) | - | (11.1) | - | - |
| Investments in subsidiary and associated companies | - | - | 0 | - | |
| Net cash flow from investing activities | (19.5) | (4.5) | (26.9) | -60.3 | (79.2) |
| Proceeds from issue of debt and change in overdraft facility |
(2.7) | (8.2) | 18.8 | -0.8 | 4.2 |
| Net change in external interest-bearing debt |
26.9 | 24.1 | 23.9 | 79.1 | 74.7 |
| Net cash flow from financing activities | 24.3 | 15.9 | 42.7 | 78.3 | 78.9 |
| Net change in cash and cash equivalents | (2.0) | (1.6) | 5.9 | 1.5 | 0.5 |
| Cash and cash equivalents beginning of the period | 19.1 | 13.9 | 11.1 | 10.7 | 10.7 |
| Cash and cash equivalents end of period | 17.0 | 12.2 | 17.0 | 12.2 | 11.2 |
▪ Addition drawdown on the debt facility in the quarter
Full-year 2022 targets reiterated
Targeted Adjusted EBITDA1 margin of +20%-25%
1) Aker BioMarine evaluates the performance based on Adjusted EBITDA. This metric is defined as operating profit before depreciation, amortization, write-downs and impairments, and special operating items. Special operating items include gains or losses on sale of assets, if material, restructuring expenses and other material transactions of either non-recurring nature or special in nature compared to ordinary operational income or expenses.
This presentation has been prepared by Aker BioMarine ASA (the "Company"). The presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or any of its subsidiaries nor should it or any part of it for m the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company or any of its subsidiaries, nor shall it or any part of it form the basis of or be relied on in con nection with any contract or commitment whatsoever. No reliance may be or should be placed by any person for any purposes whatsoever on the information contained in this presentation, or on its completeness, accuracy or fairness.
This presentation contains summary information only and does not purport to be comprehensive and is not intended to be (and s hould not be used as) the sole basis of any analysis or other evaluation. No representation, warranty, or undertaking, express or implied, is made by the Company, its affiliates or representatives as to, and no relianc e should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein, for any purpose whatsoever. Neither the Company nor any of its affiliates or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss whatsoever and howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presenta tion. All information in this presentation is subject to updating, revision, verification, correction, completion, amendment and may change materially and without notice. In giving this presentation, none of the Company, its affiliates or representatives undertake any obligation to provide the recipient with access to any additional information or to update this presentation or any information or to correct any inaccuracies in any such informati on. The information contained in this presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may oc cur after the date of the presentation.
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Excluding eliminations between Ingredients and Brands
Curbing the impact on surging oil prices and creates predictability in largest cost drive
Gasoil 0.1% FOB Rotterdam Barges (USD/Mt)
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