Benchmark Holdings Plc

Earnings Release • Nov 29, 2023

Full Year Results for the Financial Year ended 30 September 2023 - Third consecutive year of financial and strategic delivery

Full Year Results for the Financial Year ended 30 September 2023 - Third consecutive year of financial and strategic delivery

Benchmark, the aquaculture biotechnology company, announces its full year audited results for the year ended 30 September 2023 (the "period").

Financial highlights – Revenue growth and improved profitability with steady progress in all business areas

• Revenue from continuing operations increase of 7% (+7% CER**):

o Advanced Nutrition – strong performance in challenging shrimp markets, further strengthening our leading market position; revenues -2% (-7% CER)

o Genetics – strong performance with record salmon egg sales in our three facilities – Iceland, Norway and Chile; revenue growth of +14% (+20% CER)

o Health – growing adoption of sea lice solution Ectosan® Vet and CleanTreat® and increase in sales of Salmosan® Vet resulting in revenue growth of 27% (+29% CER)

• 15% increase (+16% CER) in Adjusted EBITDA from continuing operations, excluding fair value movements from biological assets, as a result of higher revenues and tight cost control

• Adjusted EBITDA1 margin from continuing operations excluding fair value uplift from biological assets increased to 21% (FY22: 20%)

• Significant progress towards profitability:

o Adjusted operating profit from continuing operations increased by 36% to £14.6m (FY22: £10.7m)

o Loss before tax from continuing operations reduced to £12.7m (FY22 restated: £21.4m) due to the positive trading result and lower finance costs, partially offset by higher exceptional items

• Significant improvement in cash generation with operational cash flow close to double to £20m (FY22: £10.8m); cash conversion4 increased from 35% to 58%

• Net debt3 reduced to £65.5m (FY22: £73.7m)

• Cash and cash equivalents of £35.6m and available liquidity of £48.8m

• At 27 November, cash and cash equivalents of £29.3m and available liquidity of £41.5m

Operational highlights

Advanced Nutrition – commercial focus and programme of efficiencies translate into business resilience and stronger market position

• Continued commercial focus leveraging technical services capabilities and adapting to market conditions

• Commenced implementation of structured programme of operational efficiencies focused on automation, supply chain integration, and digitalised data management

• Continued innovation with launch of first AI-enabled live feed counting tool SnappArt and establishment of new R&D collaborations in Ecuador and Singapore

Genetics – continue to strengthen global position in salmon eggs

• Record volume of salmon eggs of 335 million, a 15% increase

• Acquired remaining 10.52% minority interest in Benchmark Genetics Iceland (50% of Group’s salmon egg production) for €9m

• Doubling of sales demonstrate growing commercial traction in Chile where our facilities obtained disease-free compartment status enabling future exports

• Development of a new shrimp genetics product portfolio underway; shrimp activities reorganised and aligned to realise synergies with Advanced Nutrition

• Divestment of tilapia business through an MBO

• Expanded R&D team with a focus on reproductive technologies paving the way for breakthrough developments in sterility and gene editing

Health – increased adoption of Ectosan® Vet and CleanTreat®

• Increased adoption of Ectosan® Vet and CleanTreat® by large and small producers along the entire Norwegian coastline

• Further progress in the development of a new business model and configuration for CleanTreat® to integrate the system into customers’ wellboat infrastructure

• Good year for our second sea lice treatment, Salmosan® Vet, which showed a resurgence of demand driven mainly by label changes which allow longer use in certain territories

Group – further streamlining and integration creating opportunities for commercial and cost synergies

• Important strategic alignment bringing together our salmon activities under the leadership of our Head of Genetics and our shrimp activities under the leadership of our Head of Advanced Nutrition. This customer-centric structure will enable us to increase our commercial impact with a combined offering and customer network and realise synergies

• Continued progress on sustainability initiatives including energy efficiency and GHG emissions, certification and development of novel feed ingredients. ESG rating improvement by MSCI to AA

• Looking forward the Group remains focused on its four strategic pillars:

o Maintain and grow its leadership position in established markets

o Expand its business through the launch of new products and development of key growth vectors

o Continue to embed the “One Benchmark” culture and integrate the Group to realise synergies

o Pursue strategic opportunities adhering to strict criteria

Current trading and outlook – positive momentum trading in-line with management expectations

• Good start to FY24 and positive momentum in the business

o Good visibility of revenues in salmon genetics

o Early indications of improvement in the shrimp markets

o Increase in sea lice treatments post period end with good capacity utilisation of CleanTreat®; expect normal seasonality

Trond Williksen, CEO, commented:

“We delivered good growth in revenue and Adjusted EBITDA, and increased cash conversion, despite challenging conditions in the global shrimp markets. This demonstrates the strength of our business and the agility of our organisation to adapt – mitigating the impact of a soft market and taking advantage of commercial opportunities to further consolidate our leading market position. The new financial year has also started well and in line with our expectations, with positive momentum in our three business areas.

“Since the end of FY20 when we completed the Group restructuring, we have been building a track record of growth and improved profitability, reflected by revenues and Adjusted EBITDA from continuing operations which have increased over this period by 61% and 128%, respectively.

“Benchmark is uniquely positioned in an industry that is structurally growing supported by attractive megatrends. With a clear strategy and an integrated commercial network covering the main aquaculture species, we have significant opportunity to deliver growth and shareholders returns. We will continue the execution of our strategy to realise the value inherent in our business for the benefit of all our stakeholders.”

Presentation for analysts and institutional investors at 8am GMT

Trond Williksen, Chief Executive Officer and Septima Maguire, Chief Financial Officer will host a presentation for analysts and institutional investors on the day at 08.00 GMT (09.00 CET).

The presentation will be held in person at Haakon Vlls Gate 2, Oslo, Norway. To register your interest, please contact benchmark@mhpgroup.com

A live webcast of the presentation will be available for analysts and investors to join remotely at the following link: https://channel.royalcast.com/hegnarmedia/#!/hegnarmedia/20231129_1

Equity Development webcast for retail investors at 12pm GMT

Trond Williksen, Chief Executive Officer and Septima Maguire, Chief Financial Officer will host a second webcast for retail investors and wealth managers at 12.00 GMT (13:00 CET). The webcast is open to all existing and potential shareholders.

To register please visit: https://www.equitydevelopment.co.uk/news-and-events/benchmark-investor-presentation-29november2023