Benchmark Holdings Plc

Investor Presentation • Aug 22, 2024

Driving Sustainability in Aquaculture

Q3 FY24 Presentation Trond Williksen, CEO Septima Maguire, CFO 22 August 2024

This document and any information contained within it is the property of Benchmark Holdings Plc and its Affiliates

GENETICS ADVANCED NUTRITION HEALTH

Agenda

• 1. Highlights
• 2. Operational Update
• 3. Financials
• 4. Outlook
• 5. Q&A

Q3 Highlights

Solid performance in Adv. Nutrition and Genetics Streamlining of Health towards Ectosan® Vet transition

• Group revenues of £30.7m (-7% CER(2))
  • Advanced Nutrition: good trading +11% CER
  • Genetics: solid trading albeit -17% CER reflecting timing of harvest income and shift in egg sales to Norway JV
  • Health -41% CER; two CleanTreat® vessels decommissioned with cost base significantly reduced
• Adj. EBITDA(1) ex. FV movement in biological assets +15% CER
  • Progress in all Genetics growth vectors
  • Higher contribution from the Company's JV
  • Positive impact from streamlining in Health
• Adj. EBITDA margin ex FV movement in biological assets of 15% (Q3 2023: 12%)
  • YTD margin 20% (Q3 YTD FY23: 20%)
• Adj. Operating loss ex FV movement £0.3m (Q3 FY23: £1.2m loss)
• Strong balance sheet and liquidity

(1) Adj. EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure (2) Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates

Operational Update

Genetics

Solid trading and progress in all growth vectors

Q3 FY24

• Revenues 18% below last year driven by timing of harvest income and shift from direct sales to indirect sales of eggs through Salmar Genetics, the Company's JV in Norway
  • Total volume of egg sales (direct and indirect): 69m (Q3 FY23: 70m)
• Progress across all growth vectors
  • Chile: egg volume +50%
  • +100% increase in genetic services revenues including genotyping
• 46% increase in Adj. EBITDA ex FV movement in biological assets driven by:
  • Chile Adj. EBITDA ex FV movement of £0.5m (Q3 FY23: £1.0m loss)
  • Shrimp Adj, EBITDA loss reduced from £0.8m to £0.5m driven by lower costs
  • Higher contribution from the JV in Norway
• Q3 Adjusted EBITDA margin ex FV movement 28% (Q3 FY23: 16%)

YTD FY24

• YTD total volume of egg sales (direct and indirect): 258m (YTD Q3 FY23: 275m) with prior year benefitting from supply constraints in the market
• Adj. EBITDA ex FV movement +13%; Adj. EBITDA margin 24% (YTD Q3 FY23: 18%)

				YTD 23
11.8	14.4	-17%	40.2	48.7
53%	40%		47%	40%
3.2	3.7	-13%	9.1	10.3
3.3	2.3	+45%	9.7	8.6
28%	16%		24%	18%
	Q3 24	Q3 23	CER %	YTD 24

5 (1) Adj. EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure (2) Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates

Genetics

Innovation in core genetics salmon business

YTD progress and milestones

• Product differentiation through development of new traits and use of new technologies
  • New salmon lines launched in FY24
  • Significant advancement in gill health disease programme addressing a key challenge; launch expected in FY25
• Progress on systematic effort to layer transformative genetic technologies onto our genetics products
  • Diploid sterility
  • Gene editing targets
  • Scalable methods for application of gene editing to our breeding programmes
• Publication of findings to understand genetic resistance to sea lice in Coho
  • Aim to use gene editing to transfer resistance into Atlantic salmon
  • Output from collaborative Crispresist project involving leading institutions and selected industry players
  • https://bmcbiol.biomedcentral.com/articles/10.1186/s12915-024-01952-8

Progress in growth vectors driving profitability

• Chile: excellent performance with customer wins building foundation for future growth
• Shrimp: good progress in development of new local breeding lines; commercial traction leveraging Advanced Nutrition position
• Genetic Services: investment in resources to strengthen our offering including genotyping

(fim)	Core salmon inc. harvest income		Chile		Shrimp		Genetics Services		Total
	Q3 FY24	Q3 FY23	Q3 FY24	Q3 FY23	Q3 FY24	Q3 FY23	Q3 FY24	Q3 FY23	Q3 FY24	Q3 FY23
Revenue	10.8	13.5	0.3	0.3	0.2	0.3	0.4	0.2	11.8	14.4
Gross profit ex FV	5.4	6.8	0.8	(0.7)	(0.4)	(0.5)	0.4	0.2	6.2	5.8
Adj. EBITDA ex FV	3.0	3.8	0.5	(1.0)	(0.5)	(0.8)	0.2	0.2	3.3	2.3
Adj. EBITDA ex FV %	28%	28%	154%	n.m.	n.m.	n.m.	55%	87%	28%	16%
Adj. EBITDA	3.0	5.3	0.5	(1.0)	(0.5)	(0.8)	0.2	0.2	3.2	3.7
Adj. EBITDA %	28%	39%	154%	n.m.	n.m.	n.m.	55%	87%	27%	26%
Adj Op. Profit ex FV	1.9	3.0	0.4	(1.1)	(0.8)	(1.0)	0.2	0.2	1.7	1.1

Advanced Nutrition

Solid Q3 performance against continued soft markets

Q3 FY24

• Revenues +11% CER with good trading partially offset by forex (yoy +4% AER)
• Adjusted EBITDA of £1.8m (Q3 FY23: £3.4m) reflects:
  • Lower margins due to product mix in Artemia portfolio driven by Artemia grades in prior season. FY24 season high in quantity and quality
  • Higher costs due to temporary disruption in trading routes to avoid Suez Canal

YTD FY24

• Revenue 1% CER above prior year; 7% below yoy reflecting forex impact
• Adjusted EBITDA(1) margin was 20%; YTDQ3 FY23: 24%

Market conditions

• Markets remain soft; some green shoots of recovery not yet translating into recovery
• We maintain commercial focus and continue actions to optimise performance
  • Expansion of product portfolio; strengthened presence in key markets
• Steps by regulators and players in key markets support fundamentals
  • India reduction of import duty on aquaculture supplies
  • Ecuador value added shrimp products to stimulate exports

Q3 24	Q3 23	CER%	YTD 24	YTD 23
16.8	16.1	11%	57.2	61.4
48%	59%		52%	55%
1.8	3.4	-43%	11.7	14.9
11%	21%		20%	24%
1.1	2.8	-55%	9.7	13.1

8 (1) Adj. EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure (2) Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates

Health

Streamlined infrastructure and organisation as part of transition to new business model for Ectosan® Vet and CleanTreat®

Q3 FY24

• Second CleanTreat® unit decommissioned and significant streamlining of organisation resulting in immediate cost savings
• Business rightsized to deliver Salmosan® Vet solution
• Capability to deploy Ectosan® Vet and CleanTreat® onto customer infrastructure maintained subject to customer investment in infrastructure – barge or wellboat
• Revenue -43% as we transition towards a new business model for Ectosan® Vet and CleanTreat®; Salmosan® Vet revenues +17%
• Adjusted EBITDA(1): : nil (Q3 FY23: £1.0m loss)

YTD Q3 FY24

• YTD results reflect planned transition; benefit of streamlining coming through Q3 onwards
  • Revenue 40% below prior year
  • Adjusted EBITDA(1) : £2.3m (YTD23: £5.6m)

(£m)	Q3 24	Q3 23	CER %	YTD 24	YTD 23
Revenue	2.2	3.8	-41%	13.6	22.9
Gross Margin	66%	21%		52%	51%
Adj. EBITDA1	0.0	-1.0	+104%	2.3	5.6
Adj. EBITDA margin	2%	-27%		17%	25%
Adj. Operating Profit2/(loss)	(2.6)	(4.5)	+41%	(7.2)	(4.3)

9 1) Adj. EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure (2) Constant exchange rate (CER) figures derived by retranslating current year figures using previous year's foreign exchange rates

Financial Update

Income statement highlights Q3 FY24

£m	Q3 24	Q3 23	% AER	% CER	YTD Q3 24	YTD Q3 23	% AER	% CER
Revenue	30.7	34.2	-10%	-7%	110.9	132.9	-17%	-11%
Gross profit	15.6	17.5	-11%	-8%	54.9	66.8	-18%	-13%
R&D	(1.4)	(1.5)	6%	4%	(4.5)	(4.5)	0%	-3%
Other operating costs	(9.9)	(10.5)	6%	4%	(30.2)	(34.3)	12%	9%
Adjusted EBITDA1	4.5	5.4	-17%	-14%	21.3	28.1	-24%	-17%
Adj. EBITDA ex FV movement	4.6	4.0	15%	19%	21.9	26.4	-17%	-10%
Adj. EBITDA margin ex FV mov.	15%	12%			20%	20%
Adjusted Operating Profit/(loss)2	(0.4)	0.2	-278%	-216%	5.7	12.6	-55%	-43%
Adj. Operating Profit2 ex FV mov.	(0.3)	(1.2)	76%	84%	6.3	10.9	-43%	-28%
Exceptional costs	(2.6)	(0.5)	-389%	-387%	(5.1)	(3.2)	-57%	-61%
Net finance costs	(2.9)	(0.2)	-1194%		(7.1)	(2.4)	+192%
Loss before tax	(9.4)	(4.3)	-121%	-118%	(17.3)	(5.4)	-217%	-191%
Loss for the period	(9.9)	(4.2)	-138%	-135%	(18.7)	(6.9)	-173%	-156%

(1) Adjusted EBITDA is EBITDA (earnings before interest, tax, depreciation and amortisation and impairment), before exceptional items including acquisition related expenditure

(2) Adjusted Operating Profit is operating loss before exceptional items including acquisition related items and amortisation of intangible assets excluding development costs

• Revenue 10% below (-7% CER)
• Adj. EBITDA excluding FV movement in biological assets +15% (+19% CER)
• Adj. EBITDA margin excluding FV movement in biological assets of 15% (Q3 FY23: 12%)
• 6% reduction in operating costs (4% CER)

YTD Q3 FY24

• Revenue below YTD Q3 FY23 resulting from lower Genetics revenues against a strong FY23 , lower Advanced Nutrition revenues due to soft shrimp market conditions and a reduction in Health through decommissioning of CleanTreat® units
• Adj. EBITDA margin excluding FV movement was 20% which was in line with FY23
• Increase in exceptional costs of £1.9m, primarily relating to the formal review of the Company's strategic options and other restructuring actions taken
• Net finance costs up £4.7m as a result of nonrepetition of prior year income from ineffectiveness of hedge accounting coupled with increased interest costs due to higher borrowings 11

Cashflow, net debt and liquidity (Q3 FY24)

£m
Net debt1 at 31 March 2024	(72.7)
Cash generated from operations	1.2
Capital expenditure	(0.8)
Foreign exchange on cash and debt	(1.2)
Interest and tax (inc. lease interest)	(4.5)
Lease additions and modifications	2.9
Share issue	0.1
Other	(0.1)
Net debt1 at 30 June 2024	(75.1)

• Net cash inflow from operating activities of £1.2m (Q3 FY23: £3.9m)
  • Higher investment into working capital from £1.1m outflow in Q3 FY23 to an outflow of £1.3m in Q3 F2Y24
• Net cash used in investing activities £0.6m (Q3 FY23: £0.2m inflow) of which capex was £0.8m (Q3 FY23: £1.1m) offset by proceeds from sale of fixed assets
• Interest and tax:
  • net interest paid of £2.4m
  • tax paid of £2.1m
• £2.1m used in financing activities (Q3 FY23: £6.8m)
• Ample liquidity and headroom
  • Cash of £17m and liquidity of £34.2m (cash and available liquidity) as of 30 June 2024

Cashflow, net debt and liquidity (YTD) • Net cash inflow from operating activities of £3.0m

£m
Net debt1 at 1 October 2023	(65.5)
Cash generated from operations	3.0
Capital expenditure	(2.7)
Foreign exchange on cash and debt	1.7
Interest and tax (inc. lease interest)	(12.4)
Lease additions and modifications	1.1
Share issue	0.1
Other	(0.4)
Net debt1 at 30 June 2024	(75.1)

• (YTD Q3 FY23: £17.6m inflow) due to increased working capital and greater loss for the period
  • Working capital outflow of £14.1m (Q3 YTD FY23: £5.3m) with impacts from the timing of sales and supplier payments as well as inventories remaining steady in current year
• Net cash used in investing activities £2.1m (Q3 YTD FY23: £3.3m) of which capex was £2.7m (Q3 YTD FY23: £4.7m)
• Interest and tax:
  • net interest paid of £6.6m
  • tax paid of £5.8m
• Cash outflow from financing activities of £13.5m. Q3 YTD FY23: £7.9m, including £10.9m net proceeds from equity raise and £3.3m net income from borrowings offset by the acquisition of minority interest in Iceland of £8.0m
• Cash of £17.0m and liquidity of £34.2m (cash and available facility) as at 30 June 2024
• Cash of £22.8m and liquidity of £37.1m (cash and available facility) as at 20 August 2024

Outlook FY24

Trading well against backdrop of soft market conditions in Adv. Nutrition and reorganisation of Health Despite short term impact each business area positioned to deliver shareholder value in mid and long term

Genetics

• Good visibility of salmon egg deliveries against comparatively strong FY23
• Progress in growth vectors Chile, shrimp and genetic services

Advanced Nutrition

• Continuing robust performance
• Soft markets prevail
• Well positioned for market recovery

Health

• Salmosan® Vet expected to continue to perform well
• Profitable and cash generative post restructuring

Disclaimer

IMPORTANT NOTICE

This presentation has been prepared by Benchmark Holdings plc (the "Company") in connection with the Q3 FY24 results on 24 August 2023.

This presentation does not constitute a prospectus or an admission document relating to the Company, nor does it constitute or form part of any offer or invitation to purchase, sell or subscribe for, or any solicitation of any such offer to purchase, sell or subscribe for, any securities in the Company nor shall this presentation or any part of it, or the fact of its distribution,form the basis of, or be relied on in connection with, any contract for the same.

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