Floridienne S.A. — Earnings Release 2023

Mar 29, 2024

Press release – Regulated information – Embargo 29 March 2024 at 5.40 pm

Floridienne Group results 2023: EBITDA down owing to non-recurring costs Promising outlook for 2024

• Profitability of the Life Sciences Division down owing to unfavourable external factors and non-recurring costs linked to the acquisition of Biotrop, the leading Brazilian company in the field of biological solutions
  • o 2023 was a disappointing year for Biobest, primarily owing to external factors (extreme weather conditions in our main regions at the start of the year, high energy costs prompting some farmers to temporarily reduce their greenhouse crops during the winter, unfavourable currency effects)
  • o Acquisition of an 85% holding in Biotrop, leading Brazilian company in the field of biological solutions, undertaken in December 2023 on the basis of a business value ofBRL 2.8 billion (EUR 532 million), giving Biobest a significant position in South America and allowing it to considerably expand its range of biological solutions for open-field and greenhouse crops
  • o Continuation of investment programme in our subsidiaries operating in the field of natural extracts and enzymes united within Natix
• Growth in turnover and improved margins in the Food Division
  • o Growth in turnover (+7.9%) driven by sustained demand for its cold sauces in the mass retail sector and on export markets
  • o Margins maintained and supplies secured
• Good performance of the Chemicals Division despite a difficult macro-economic environment
  • o Profitability of our recycling activity down owing to the fall in the price of purified metals resold on the market
  • o Resilience of Kimflor, Turkish subsidiary that produces and markets PVC stabilisers, whose net result is penalised by the accounting method applicable to hyperinflationary economies (monetary adjustments linked to hyperinflation of - EUR 2.8 million)
• Group outlook for 2024
  • o After a transitional year in 2023 when the Group invested substantially in external and internal growth, the integration of recently acquired companies and the commissioning of additional production capacity should allow us to record a substantial rise in turnover and EBITDA during the 2024 financial year.

Key figures of the Floridienne Group

The consolidated and statutory financial statements of the Floridienne Group as at 31 December 2023 were adopted by the Board of Directors of Floridienne S.A. on 25 March 2024. They will be presented to the General Meeting on 4 June 2024.

Consolidated key figures (IFRS)	12/2023	12/2022	12/2023	12/2022	12/2023	12/2022
	Turnover		EBITDA		Consolidated net result after tax
Life Sciences Division	359.4	337.1	41.2	47.8	8.1	13.3
Food Division	146.6	135.9	8.1	6.3	2.2	1.3
Chemicals Division	43.3	45.4	9.0	8.1	1.7	6.7
Corporate	-	-	-2.4	-1.7	-3.4	-2.8
Consolidated	549.3	518.3	56.0	60.4	8.6	18.5
Consolidated result, Floridienne					3.6	12.0
share

Consolidated balance sheet data (IFRS)	12/2023	12/2022
Consolidated equity capital	678.9	217.5
Net financial debts [*]	203.1	193.7
Balance sheet total	1,262.3	608.1

Data per share	Base		Diluted
	12/2023	12/2022	12/2023	12/2022
Number of shares [**]	979,494	979,494	979,494	979,494
Consolidated net result, Floridienne	3.62	12.29	3.62	12.29
share

[*] This amount excludes lease commitment debts (IFRS 16, Leases) and debts linked to purchase and sale options concluded with the third-party shareholders of certain holdings.

[**] As at 31 December 2023, the number of own shares held by the group stood at 17,363. Weighted average of the shares in circulation during the financial year, excluding the own shares acquired by the company or its subsidiaries

Alternative performance measures (APM) used in this press release

EBITDA: EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) is calculated on the basis of the operating result, adjusted for amortisation and write-downs.

Net financial debt: The net debt comprises non-current and current financial debts, after deduction of cash.

Diluted result per share: As the company does not have any potential shares (convertible debts, etc.) or option plans, the diluted result per share is equal to the basic result per share (no adjustments necessary).

Comments on the sectors of activity

Life Sciences Division

• EBITDA: EUR 41.2 million, impacted by the non-recurring costs linked to the acquisition of Biotrop (EUR 5.9 million); Net result: EUR 8.1 million
• 2023 was a disappointing year for Biobest, primarily owing to external factors (extreme weather conditions in our main regions at the start of the year, high energy costs prompting some farmers to temporarily reduce their greenhouse crops during the winter, weakness of US and Canadian dollars)
• Acquisition of Biotrop, leading Brazilian company in the field of biological solutions, undertaken in December 2023 on the basis of a business value of BRL 2.8 billion (EUR 532 million), giving Biobest a significant position in South America and allowing it to considerably expand its range of biological solutions for open-field and greenhouse crops

Changes of scope

Capital increase

Biobest undertook two capital increases in 2023.

An initial capital increase for a total of EUR 98.5 million, subscribed by Sofina and private investors, was carried out on 30 March 2023. These funds enabled Biobest to continue its ambitious strategy of organic growth and growth through new acquisitions. Further to this capital increase, Floridienne's holding in BIOBEST stood at 79% (compared with 86.79% at 31 December 2022).

A second capital increase for a total of EUR 365.7 million took place on 26 December 2023. It was subscribed by Sofina, the alternative asset manager Tikehau Capital, the Unigrains and Sofiprotéol sector investors which specialise in agriculture, the company management and certain private shareholders close to Floridienne. These funds were used to finance the acquisition of the Brazilian company Biotrop Participações s.a. ('Biotrop'). Further to this capital increase, Floridienne's holding in BIOBEST stands at 59% (compared with 79% previously).

Acquisitions made by Biobest

Biobest implemented its most ambitious programme of acquisitions yet during the 2023 financial year. These acquisitions allow Biobest to expand its range of biological solutions, which now include biocontrol (beneficial insects and biopesticides), inoculants, biostimulants and pollination for both greenhouse crops, Biobest's traditional activity, and open-field crops. Biobest is now a global player with a strong presence on every continent and especially in North and South America.

Biobest completed two acquisitions in January 2023. Our subsidiary acquired all the shares in Real IPM UK (in which it previously held a 33.80% stake), which takes care of recording biopesticides in Europe that offer interesting marketing potential, and in Sierra Biologicals, a US-based company that distributes integrated pest management products.

During the summer of 2023, Biobest completed the acquisition of Bioworks, an American company that manufactures and markets biopesticides, and of Agrotech, an Austrian company that distributes biological solutions.

Biobest completed the acquisition of the Brazilian company Biotrop Participações s.a. ('Biotrop') on 26 December 2023. Biotrop is the leading Brazilian company in the field of biological solutions for

agriculture and one of the biggest in the world. The company focuses on the development and marketing of biological products for the nutrition and protection of open-field crops.

The Brazilian market for integrated pest management and other biological solutions is currently estimated at over USD 1 billion. With annual growth of 43%, driven by a favourable regulatory context adapted to the needs of biological products, Brazil is recording higher growth than the other main markets. Biotrop's success may be attributed primarily to its portfolio of new patents thanks to advanced R&D, ultra-modular production and a sound multi-channel marketing strategy.

This acquisition was carried out on the basis of a business value of BRL 2.8 billion (EUR 532 million), 85% of which has already been paid. The remaining 15% will be paid in accordance with Biotrop's performance after a three-year transitional period.

Activity in 2023

The turnover of the Life Sciences Division amounted to EUR 359.4 million as at 31 December 2023, compared with EUR 337.1 million as at 31 December 2022. This rise of 6.6% may be attributed primarily to a change in scope linked to the various acquisitions during the financial year and the acquisition of Plant Products at the end of February 2022.

External factors temporarily had an unfavourable impact on demand for our biological solutions intended for agriculture. The start of the year was marked by difficult weather conditions in the main regions in which Biobest is active and by the decision of certain farmers in northern Europe to temporarily reduce their greenhouse crops during the winter owing to the high energy costs. Activity was more dynamic during the second half of the year although this is not fully reflected in our accounts owing to an unfavourable trend in the exchange rates that apply to our activities in North America.

Furthermore Natix, our subsidiary that unites our R&D, production and distribution activities for natural extracts (enzymes, essential oils and snail slime) for the nutrition, pharmaceuticals and cosmetics markets, continued to invest in new production capacities.

The EBITDA of this Division stood at EUR 41.2 million as at 31 December 2023, down compared with the previous year (EUR 47.8 million as at 31 December 2022) owing to non-recurring costs linked to the acquisition of Biotrop amounting to a total of EUR 5.9 million.

The net result of the Life Sciences Division therefore amounted to EUR 8.1 million in 2023, compared with EUR 13.3 million in the previous financial year. The extent of the amortisation of intangible assets recognised in the context of the allocation of the Beneficial Insectary and Plant Products purchase price (EUR 4.8 million) should also be noted. This is an accounting practice that has no impact on the cash flow.

Food Division

• EBITDA: EUR 8.1 million; Net result: EUR 2.2 million
• Growth in turnover (+7.9%) driven primarily by sustained demand for its cold sauces in the mass retail sector and on export markets
• Markets maintained and supplies secured

Activity in 2023

The turnover of the Food Division rose by 7.9% during the year to EUR 146.6 million, compared with EUR 135.9 million a year earlier. This increase in sales may be attributed mainly to sustained demand for our cold sauces.

After an unprecedented period in 2022 when profitability suffered due to widespread inflation affecting the cost of raw materials as well as supply difficulties impacting on certain products, the Food Division saw the prices of certain ingredients ease during the financial year and focused on maintaining its margins and securing its supplies to meet demand from its customers.

The EBITDA of this Division rose, amounting to EUR 8.1 million as at 31 December 2023, compared with EUR 6.3 million as at 31 December 2022. This improvement may be attributed primarily to the good sales results and the reorganisation of our production and distribution activities for our Mediterranean range.

The net result of the Food Division stood at EUR 2.2 million as at 31 December 2023, compared with EUR 1.3 million as at 31 December 2022.

Chemicals Division

• EBITDA: EUR 9.0 million; Net result EUR 1.7 million, negatively impacted by monetary adjustments linked to hyperinflation (- EUR 2.8 million)
• Large volumes processed by our recycling activity but profitability down owing to the fall in the price of purified metals resold on the market
• Resilience of Kimflor, Turkish subsidiary that produces and markets PVC stabilisers

Activity in 2023

The turnover of the Chemicals Division fell by 4.6% to EUR 43.3 million as at 31 December 2023, compared with EUR 45.5 million as at 31 December 2022. This fall may be attributed primarily to external factors: drop in the price of purified metals for our recycling activity and trend in the exchange rate of the Turkish lira for Kimflor, our subsidiary that produces and markets PVC stabilisers.

The EBITDA of this Division rose, amounting to EUR 9.0 million as at 31 December 2023, compared with EUR 8.1 million as at 31 December 2022.

Our recycling activities are benefiting from the development of electric mobility, where SNAM is a European leader in the collection and recycling of new-generation batteries. The fundamentals are positive, with a high volume of activity. SNAM is continuing its ambitious investment programme to boost capacity. However, the unfavourable trend in the price of purified metals had a negative effect on the profitability of recycling in 2023. During the financial year, SNAM recorded an impairment of EUR 1.2 million on fixed assets linked to a battery reconditioning activity that has been halted.

Kimflor, our subsidiary active in the field of PVC stabilisers in Turkey, is developing favourably despite a difficult financial environment, with an economy considered to be hyperinflationary. As indicated in our previous messages, further to the application of the hyperinflation accounting method for our subsidiaries in Turkey, a financial charge of EUR 2.8 million relating to monetary adjustments linked to hyperinflation was recorded.

The net result after tax was down to EUR 1.7 million as at 31 December 2023 compared with EUR 6.7 million as at 31 December 2022. This may be attributed primarily to the monetary adjustments linked to hyperinflation in Turkey (- EUR 2.8 million) and the impairments recorded by SNAM (- EUR 1.2 million). These are accounting practices that have no impact on the cash flow.

Corporate Division

The Corporate Division comprises a series of service and consultancy activities provided by Floridienne for its subsidiaries, as well as food products trading activities.

For details of the various risks and uncertainties facing the group, please consult the management report from the Board of Directors and the annual financial report which will be published on 30 April 2024.

Events occurring after the close of the financial year

In the Life Sciences Division, in January 2024 Biobest announced the acquisition of the 40% of remaining shares in Biobest Antalya. Biobest Antalya, whose activities are based in Turkey, is a leader in pollination by bumblebees and biological pest control. In addition, Biobest is focusing on the integration of the activities recently acquired.

In the Chemicals Division, on 17 February 2024 fire broke out at one of our recycling sites devoted exclusively to storage and located in Aveyron (France). The site in question is totally separate from the operating site which processes the batteries and which was not affected at all. Our teams and the firefighters took swift, effective action. Material damage only was suffered. Given the insurance cover in place, the financial impact for the Group should be limited.

Outlook for the Floridienne Group

As we announced in our previous releases, in 2023 Floridienne had to deal with a number of disruptive factors: extreme weather conditions at the start of the year and a rise in energy costs leading to the shutdown of some greenhouses in Europe during the first quarter, plus the fall in the US and Canadian dollars in the second half of the financial year. In addition, our financial results were impacted by the nonrecurring costs linked to the acquisition of Biotrop (EUR 5.9 million), the accounting treatment related to the hyperinflationary context that affects our Turkish activities (monetary adjustments linked to hyperinflation (- EUR 2.8 million)) and impairments recorded by SNAM (- EUR 1.2 million). These combined factors led to a result of EUR 8.6 million, down EUR 9.9 million compared with EUR 18.5 million in 2022.

However, 2023 was a transitional year during which our Group undertook major investments intended to generate sustainable growth.

The outlook for the Life Sciences Division is favourable. The acquisition of Biotrop, the leading Brazilian company in the field of biological solutions for agriculture and one of the biggest in the world, gives Biobest a significant position in South America and allows it to expand its range of biological solutions, which will now include biocontrol (beneficial insects and biopesticides), inoculants, biostimulants and pollination for both greenhouse crops, Biobest's traditional activity, and open-field crops.

Our 'Natural extracts' activities, united within Natix, have attained an international size and credibility, making it possible to speed up the development of these activities on the Asian markets in particular.

In the Food Division Food, we have substantially increased our cold sauces production capacities in response to strong demand. In 2024, our subsidiaries will continue to focus on maintaining their margins in an economic context marked by pressure on prices.

Finally, in the Chemicals Division, our subsidiary SNAM is continuing to invest in additional production capacities, which will be brought partially into service from the end of the 2024 financial year. Our subsidiary in Turkey, Kimflor, has demonstrated outstanding resilience in a particularly complicated environment. It is expected to continue to develop favourably.

Overall, the Board of Directors is confident that the Group's activities will evolve positively and expects considerably better results for the 2024 financial year as a whole.

	Calendar
Publication of annual results 2023	30 April 2024
Ordinary General Meeting	4 June 2024 at 3.00 pm
Publication of half-yearly results 2024	27 September 2024

Auditor's report

The statutory auditor, RSM InterAudit Réviseurs d'entreprises SRL, represented by G. Van Leemput, confirmed that its auditing work, which is largely complete, has not at this stage brought to light any significant adjustment that needs to be made to the accounting information in this press release.

Dividends

The Board will put a proposal to the General Meeting of 4 June 2024 to pay a gross dividend of EUR 2.50/share for the 2023 financial year.

Marc Blanpain, Chairman Gaëtan Waucquez, CEO

Contact: Tel.: + 32 2 353 00 28