Investor Presentation • Feb 15, 2023
Investor Presentation
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Aker BioMarine ASA 15 February 2022
Revenue USD million Adjusted EBITDA1 USD million 76 57 73 68 79 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 7 8 21 19 21 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022
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.
Revenue USD million
Adjusted EBITDA1 and margin USD million and %
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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Significantly increased produced volumes in 2022
Annual production 29 200 36 600 40 900 45 000 43 800 52 000 2017 2018 2019 2020 2021 2022 Metric tons (MT) Metric tons per quarter
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6
Positive growth trajectory as we execute on the sales acceleration plan
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Longer-term annual sales growth target of +15% to 20%
Krill oil products require approval as Health Functional Food (HFF) to resume sales activities
Kori brand takes market share and is recognized with industry award for retail excellence
Kori's share of US krill oil sales1
"Kori Krill Oil has led the charge to create awareness and excitement around the category to galvanize Americans into action to incorporate more omega-3s into their health regimen"
After years of strong growth, the slowdown in 2021/22 enabled us to optimize and improve the way we do business
Annualized recurring effects in excess of USD 20 mill. in addition to certain one-off initiatives in 2023
Recurring cash impact1 by end-2023 in excess of
Recurring cash impact by end-2024 in excess of
USD 20 mill.
Cost initiatives, structural improvements and organizational changes
| Offshore | • Reduce krill search time • Source fuel more effectively • Improve energy efficiency in the factories |
|
|---|---|---|
| Logistics | • Re-design logistics network to better serve our customers at reduced cost • Optimize planning and logistic procurement |
|
| Operating model | • Labor cost savings and support functions headcount • Optimizations of unit structures and sourcing of professional services |
|
| Supply chain | • Improve supply chain processes, including packaging and encapsulation sourcing |
With the program, we aim to significantly reduce cost, in addition to strengthen the core business platform and create a more robust company set for further growth
Group figures
17
Revenue USD million
Adj. EBITDA and margin USD million
| Q4 2022 | Q4 2021 | YTD 2022 | YTD 2021 | |
|---|---|---|---|---|
| USD million | (Unaudited) | (Unaudited) | (Unaudited) | (Audited) |
| Net sales | 79.0 | 75.7 | 277.2 | 262.1 |
| Cost of goods sold | (47.1) | (56.0) | (162.4) | (174.0) |
| Gross profit | 31.9 | 19.7 | 114.8 | 88.1 |
| SG&A | (22.1) | (22.7) | (86.5) | (85.7) |
| Depreciation. amortization and imp. (non-production assets) | (3.9) | (2.3) | (16.4) | (19.2) |
| Other operating income | 0.1 | 0.1 | 10.2 | 3.1 |
| Other operating cost | - | - | - | - |
| Operating profit (loss) | 6.0 | (5.2) | 22.1 | (13.7) |
| Net financial items | (4.6) | (3.2) | (9.9) | 6.3 |
| Tax expense | (1.2) | - | (2.2) | (0.6) |
| Net profit (loss) | 0.2 | (8.4) | 10.0 | (8.0) |
| EBITDA reconciliation | ||||
| Net profit (loss) | 0.2 | (8.4) | 10.0 | (8.0) |
| Tax expense | 1.2 | - | 2.2 | 0.6 |
| Net financial items | 4.6 | (3.2) | 9.9 | (6.3) |
| Depreciation. amortization and imp. | 3.8 | 2.3 | 16.4 | 19.2 |
| D&A and imp. from production assets incl. in COGS | 8.5 | 8.8 | 35.0 | 37.7 |
| EBITDA (unadjusted) | 18.4 | 5.9 | 73.5 | 43.2 |
| Adjustments | 2.3 | 1.2 | (4.5) | 4.7 |
| EBITDA (adjusted) | 20.7 | 7.1 | 69.0 | 47.9 |
▪ Net sales for the quarter up 4% compared to fourth quarter last year. The positive development is driven by Qrill Aqua sales in the Ingredients segment, but off-set by lower Superba sales. Net sales in the Brands segment in line with the same quarter last year
▪ High offshore production in first half 2022 contributed to lower COGS on krill meal in the second half, improving Qrill Aqua margins compared to last year.
▪ SG&A cost slightly lower than the same quarter last year, despite significantly higher freight rates this year
▪ Intangible assets amortized according to plan. Depreciation on productionrelated assets included in cost of goods sold.
▪ Net financial items impacted by realized and unrealized agio effects on currency positions. 2021 included a fair value adjustment on certain earnouts
▪ In the quarter, costs related to the improvement program and fair value adjustment on shares in associates has been adjusted for as in APM
| USD million | 31.12.2022 | 31.12.2021 |
|---|---|---|
| (Unaudited) | (Audited) | |
| ASSETS | ||
| Property. plant and equipment | 333.2 | 327.9 |
| Right to use assets | 9.9 | 11.3 |
| Intangible assets and goodwill | 162.7 | 171.5 |
| Contract cost | 5.2 | 7.2 |
| Other non-interest-bearing non-current receivables | 4.7 | - |
| Investments in associated companies | 10.2 | 0.1 |
| Total non-current assets | 525.9 | 518.0 |
| Inventories | 182.7 | 138.2 |
| Trade receivable and prepaid expenses | 82.7 | 77.7 |
| Derivative assets | 11.0 | 12.5 |
| Cash and cash equivalents | 22.3 | 11.1 |
| Total current assets | 298.7 | 239.5 |
| TOTAL ASSETS | 824.6 | 757.5 |
| LIABILITIES AND OWNERS' EQUITY | ||
| Interest-bearing non-current liabilities | 333.6 | 294.1 |
| Other non-interest-bearing non-current liabilities | 3.2 | 15.7 |
| Total non-current liabilities | 336.8 | 309.8 |
| TOTAL LIABILITIES | 445.9 | 387.1 |
|---|---|---|
| Total current liabilities | 109.1 | 77.3 |
| Accounts payable and other payables | 61.5 | 46.6 |
| Interest-bearing debt | 47.6 | 30.7 |
| Total equity | 378.7 | 370.4 |
|---|---|---|
| TOTAL EQUITY AND LIABILITIES | 824.6 | 757.5 |
| Property. plant and equipment ▪ Growth and maintenance capex in the quarter. primarily in the Ingredients segment on vessel and Houston production related equipment. Also includes investments on growth projects such as Protein and Lysoveta ▪ Prolonged useful life estimate on Saga Sea reducing quarterly depreciations |
|---|
| Intangible assets and goodwill |
| ▪ Customer contracts amortized according to plan. Impairment assessment carried out for goodwill and intangible assets as of 31 December. No impairment |
| Inventories |
| ▪ Significant build-up since Q4'21, but only a slight increase since last quarter in the Ingredients segment. Inventory values in Brands on par with previous quarter. |
▪ Includes the Group's investment in Aion and other minor investments. The investment in Aion is recognized at fair value based on the latest transaction price. No impairment of investment based on recent estimates and development
| USD million | Q4 2022 (Unaudited) |
Q4 2021 (Unaudited) |
YTD 2022 (Unaudited) |
YTD 2021 (audited) |
|---|---|---|---|---|
| Net profit (loss) after tax | 0.2 | (8.4) | 10.0 | (8.0) |
| Tax expenses |
1.2 | - | 2.2 | 0.6 |
| Net interest and guarantee expenses | 9.4 | 3.7 | 10.7 | 13.7 |
| Interest paid | (7.5) | (4.6) | (17.8) | (12.8) |
| Interest received |
0.2 | - | 0.3 | - |
| Taxes paid | (0.5) | - | (2.8) | 3.3 |
| Other profit and loss items with no cash flow effect |
- | (1.5) | (10.7) | (21.1) |
| Impairment charges |
- | 1.9 | - | 5.8 |
| Depreciation and amortization | 12.5 | 5.8 | 51.3 | 51.1 |
| Foreign exchange loss (gain) | 1.0 | 0.1 | 9.2 | (0.3) |
| Change in accounts receivable. other current receivables. inventories. accounts payable and other |
2.8 | 8.8 | (40.9) | (31.6) |
| Net cash flow from operating activities | 19.2 | 5.8 | 11.6 | 0.7 |
| Payments for property. plant and equipment | (15.8) | (14.2) | (40.0) | (78.7) |
| Payments for intangibles |
(0.5) | (1.0) | (2.6) | (2.4) |
| Proceeds from sales of PPE | - | 1.9 | - | 1.9 |
| Installment short/long-term receivable interest bearing | 2.8 | - | 2.8 | - |
| New long-term receivable interest bearing | - | - | (2.0) | - |
| Payment of earn-out | - | - | (11.1) | - |
| Net cash flow from investing activities | (13.5) | (13.3) | (53.0) | (79.2) |
| Proceeds from issue of debt and change in overdraft facility | (9.7) | 2.8 | 16.5 | 4.2 |
| Net change in external interest-bearing debt |
12.8 | (3.8) | 35.7 | 74.7 |
| Net funds from issue of shares |
- | - | 0.2 | - |
| Net cash flow from financing activities | 3.1 | (1.0) | 52.5 | 78.9 |
| Net change in cash and cash equivalents | 8.9 | (8.5) | 11.2 | 0.5 |
| Cash and cash equivalents beginning of the period | 13.5 | 19.6 | 11.1 | 10.7 |
| Cash and cash equivalents end of period | 22.3 | 11.1 | 22.3 | 11.1 |
| ▪ | Positive cash flow from operations despite build-up of inventories in the Ingredients segment as well as higher accounts payable and receivable going out of the quarter |
|---|---|
| ▪ | Interest paid on loan facilities amounting to USD 3.1 mill. |
| ▪ | Net foreign exchange loss (gain) of USD 2.1 mill. includes realized agio |
| Cash flow from investing activities | |
| ▪ | In the quarter there have been payments on shipyard as well as ongoing projects such as protein project in Norway, Lysoveta, and preparing the Houston facility for new products |
▪ Drawdown on the overdraft facility amounting to USD 7.4 mill. and down-payment on the RCF facility in the quarter
| Operations | Qrill Aqua | Superba | Brands | |
|---|---|---|---|---|
| ▪ Krill harvesting with a good start to the year. Expects volume on par with Q1-22 No oil extraction at the ▪ plant in Houston in the quarter |
▪ Expecting higher sales than Q1-22 with stable prices vs. 2H-22 ▪ High cost per unit due to low harvesting in Q4 leads to expected limited gross margin in Q1 |
▪ Expecting higher sales than Q1-22 ▪ Expecting health claim in South Korea to be approved in March |
▪ Expecting higher sales in Lang than Q1-22 ▪ Expecting lower sales in Epion than Q1-22 due to pipe fill for the national roll-out last year in Sam's and Costco |
|
| Long-term annual average sales target of around 15% p.a. |
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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