ArcticZymes Technologies — Investor Presentation 2020

Aug 19, 2020

Q2 2020

A new era - ArcticZymes Technologies

With our daily work we want to make an important contribution to a healthier world. Driven by this goal, our experienced scientists are constantly working to find and unlock new solutions

Our Vision Our Mission

As experts in our field, we discover, develop and provide enzymes without compromises on a consistently high level to make our customers' lives easier by unlocking new solutions

Agenda

Highlights Q2 2020

ArcticZymes update

BetaGlucans update

Q2 Financials

Outlook

Chapter 1 Highlights

Highlights Q2 2020 Strong underlying growth with corona upsides

Group Q2 EBITDA NOK 27.2 mill. (-0.5)

ArcticZymes Coronavirus related upsides in sales ~NOK 11 mill.

ArcticZymes Q2 sales NOK 33.4 mill.(9.0)

Rebranded company to ArcticZymes Technologies

Biotec BetaGlucans operating profitably

ArcticZymes update

ArcticZymes Update

Commercial Achievements

Key attributors to quarterly growth

Therapeutics (Salt Active Nuclease)

• ✓34% contribution to total sales
• ✓Use extended into COVID-19 vaccine development
• ✓Signed a supply agreement with ReiThera

Covid-19 Upsides (Multiple enzymes)

• ✓33% contribution to total sales
• ✓Served all commercial needs during the peak
• ✓Upscaled the production batch size for COD UNG

Putting coronavirus related sales upsides aside, there is strong growth in the underlying business

ArcticZymes Update Innovation

• Awarded 2 grants from Innovation Norway towards technology development to aid the fight against coronavirus
  • Accelerate the upscaling of SAN production
    • Accelerates ongoing efforts
    • fits timely with foreseen commercial demand for coronavirus and non-coronavirus activities
  • Commercialization of enzymes supporting the COVID-19 & viral diagnostic test development
    • Build other enzymes around COD UNG > provide a more complete offering
    • Reverse transcriptases & thermostable polymerases

BetaGlucans update

Biotec BetaGlucans

Operating profitably

Animal Health

• Lower Q2 sales compared to Q1 for M-Glucan®
• Expected due to early order from main customer in Q1
• Expect fluctuations in sales for remaining quarters

Consumer
Health

• Continued to achieved growth in M-Gard® sales
• Driven by new customer
• Sales upsides relate to manufacturers targeting coronavirus

SBG® (Adjuvant)

• Expedited 2nd SBG® order relating to commitments supporting clinical trials
• Licensing deal progressing - productive face-to-face meeting in Tromsø

• Sales deliver to expectation
• Discontinued Woulgan® production
• Divestment progressing with interest from several parties

Financials

ArcticZymes Sales Q2 2020

COVID-19 upsides represents one third of sales

Sales growth of 270%

• Underlying business growth (excl. COVID-19 upsides) of 150%
• Therapeutics segment (SAN) continues to grow 11 MNOK in sales
• COVID-19 upsides estimated at 11 MNOK in Q2
• Research & Diagnostics growth of 130%

Sales per segment

ArcticZymes Performance

Firing on all cylinders in Q2

Enzymes	Q2		YTD
(Amounts in NOK 1.000)	2020	2019	2020	2019
Sales revenues	33 373	9 002	51 848	16 871
Operating expenses	-8 810	-7 658	-17 992	-16 543
EBITDA	24 639	1 701	35 101	1 458

BetaGlucans Sales Q2 2020

COVID-19 impacts demand for M-Gard

Sales per segment

• Upsides in Consumer Health sales of M-Gard® related to COVID-19
• Animal Health will continue to fluctuate from quarter to quarter. Expects to be flat on annual basis
• Declining sales of Woulgan® as we are divesting the platform. Accounts for 0.8 MNOK in Q2. Slow down partially explained by COVID-19 in Germany
• Adjuvant supply continued in Q2

BetaGlucans Performance

Positive EBITDA for second straight quarter

Enzymes	Q2		YTD
(Amounts in NOK 1.000)	2020	2019	2020	2019
Sales revenues	10 947	7 851	26 745	14 798
Operating expenses	-2 938	-5 140	-6 457	-11 660
EBITDA	4 178	-737	8 458	-2 846

ArcticZymes Technologies

Sales growth in all the «right» areas

Sales, Gross profit & EBITDA

• Sales within high margin segments secures solid gross profit margin of 90%
• Enzymes segment is key contributor to growth in all ratios
• EBITDA of 27 MNOK for Q2 2020 (-0,5)
• Sales of 44 MNOK for Q2 2020 (16.9)

Cash Flow

Dictated by underlying growth in the business

Outlook Driving Strategic Growth & Profitability

Drive new opportunities that cement the foundation for 2021 and beyond New Opportunities Anticipate continued growth in the underlying business Growth

Profitability

Expect to deliver number 1 goal in achieving profitability during 2020

Coronavirus Upsides

Expect effect of Coronavirus upsides to be lower during the second half

Thank you!