Slide 1: Investor Presentation Q4 2023
Investor Presentation Q4 2023 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement • During the course of this presentation, management may make forward-looking statements regarding financial performance and future events. • We will attempt to identify these statements by use of words such as expect, believe, anticipate, intend, and other words that denote fu
Slide 3: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliations 3
Slide 4: Balchem Corporation
Balchem Corporation Balchem develops, manufactures, and markets specialty ingredients that help make the world a healthier place Corporate Headquarters 21 Manufacturing Sites 7 Technology Centers 7 Regional Offices At a Glance Three Business Segments – 2023 Revenue • Founded in 1967 Human Nutrition
Slide 5: Executive Leadership
Executive Leadership Ted Harris | Chairman, President, and CEO • Joined Balchem in May 2015 • Prior to Balchem was a Senior VP of Ashland Inc. where he held a series of senior leadership roles over 10+ years • Independent director and member of the Board of Directors of Pentair plc. • MBA from Harva
Slide 6: Balchem's Value Proposition
Balchem’s Value Proposition Value to our Customers Enabling Technologies • High efficacy nutrients essential for life • Enhanced animal health and feed productivity Choline • Functional ingredient systems formulations and application expertise • Crop protection and yield improvement Encapsulation Co
Slide 7: Segment Overview
Segment Overview Leveraging Solutions Across Segments Segment Markets Served Solutions 14% Human Nutrition • Nutritional Supplements • Microencapsulation & Health • Food and Beverage • Choline, & Vitamin K2 >99% 26% Nutrition & Health • Infant & Toddler Formula • Chelated Minerals (% of sales) 60% •
Slide 8: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation
Slide 9: Our vision, our mission, our core values
Our vision Our mission is clear – to make the world a healthier place. is focused – to build a global nutrition and health company delivering trusted, innovative and science-based solutions to our customers. Our Core Values Always doing Thinking big Collaborating and Playing Staying focused the righ
Slide 10: How Do We Make the World a Healthier Place?
How Do We Make the World a Healthier Place? Improve nutrient bioavailability Help farmers grow Provide food, beverage, and dietary Power the day with plant & for animals, reducing feed crops that are hardier supplement ingredients that support animal proteins, healthy inputs and land required to whe
Slide 11: Strategic Focus
Strategic Focus • Strengthening Positions in Attractive, Growing Markets – Building scale, adding adjacent capabilities, expanding market and geographic reach, broadening our portfolio of solutions, investing in new science, enabling market awareness • Driving Organic Growth – Creating new demand th
Slide 12: Growth Platforms
Growth Platforms Multiple platforms to drive growth Human Nutrition & Health Animal Nutrition & Health Specialty Products • Realize Choline and Vitamin K2 market • Rumen-protected nutrients for Dairy • Plant micronutrients penetration and potential • Reashure® penetration application • Transition fr
Slide 13: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 13
Slide 14: Q4 2023 Financial Summary
Q4 2023 Financial Summary Profitability growth and margin expansion Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) -1.6% 5.4% 1.8% 1.6% 232.5 228.7 55.4 30.3 30.9 0.94 0.95 52.6 4Q22 4Q23 4Q22 4Q23 4Q22 4Q23 4Q22 4Q23 • Lower volumes partially offset • Lower input cost
Slide 15: Full Year 2023 Financial Summary
Full Year 2023 Financial Summary Strong Adj. EBITDA growth in a challenging environment Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) -2.1% 7.1% -0.6% -0.8% 942.4 230.9 922.4 215.7 130.5 129.7 4.03 4.00 2022 2023 2022 2023 2022 2023 2022 2023 • Lower volumes partially
Slide 16: Historical Financials
Historical Financials Consistent performance over the years SALES ($M) ADJ. EBITDA ($M) +7.5% 942 922 +7.7% 231 CAGR CAGR 216 799 190 704 174 644 644 159 160 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 ADJ. NET EARNINGS ($M) ADJ. EPS ($/share) +5.8% 131 130 +5.8% 4.03 4.00 CAGR CAGR
Slide 17: Historical Financials by Segment
Historical Financials Solid contribution from all reporting segments over the years SALES ($M) 942 ADJ. EBITDA ($M) 922 231 22 7 216 131 126 2 799 47 12 190 0 44 704 175 117 644 644 8 238 159 160 42 262 39 26 104 5 51 10 39 92 47 76 227 39 32 37 192 39 176 178 33 33 146 527 551 123 443 112 400 97 34
Slide 18: Balchem's Capital Allocation Strategy
Balchem’s Capital Allocation Strategy Capital allocation Priorities Annual Cash Flow and Net Debt Leverage Ratio 2.3 • Support organic growth opportunities 200 180 2.5 1.6 1.7 2.0 • Augment growth with targeted M&A 160 140 1.5 1.2 1.1 1.5 1.1 • Diligent debt service 120 100 0.6 0.5 1.0 184 • Continu
Slide 19: Free Cash Flow Conversion
Free Cash Flow Conversion Translating profits into cash 140% Free Cash Flow as % of Non-GAAP Net Earnings 120% 109% 107% 116% 105% 102% 102% 100% 93% 79% 80% 60% 69% 40% 20% 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 19
Slide 20: Recent Acquisitions
Recent Acquisitions Augmenting organic growth with targeted acquisitions close to core Albion Minerals Bioscreen Kappa Bioscience • Adjacent product • Geographic expansion • Portfolio extension in high offering in high growth and processing growth specialty vitamin market technology market • Chelate
Slide 21: Dividends
Dividends Consistent dividend policy ($/share) • Annual double-digit dividend growth for the last decade 0.79 • Consistency in execution 0.71 0.64 +11.8% 0.58 CAGR 0.52 0.47 0.42 0.38 0.34 0.30 0.26 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 21
Slide 22: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 22
Slide 23: Sustainability at Balchem
Sustainability at Balchem Our Sustainability Objectives & Framework Provide innovative solutions for the health & nutritional needs of the world. Company Making the world People Planet Profit a healthier place Operate with excellence as strong Culture stewards of our employees, customers, shareholde
Slide 24: Sustainability At Balchem
Sustainability At Balchem Supporting a future for all • As a signatory to the United Nations (UN) Global Compact, Balchem supports the Ten Global Principles in the areas of human rights, labor, environment and anti-corruption. • We are committed to advancing the broad goals of the UN across our area
Slide 25: Our 2030 Sustainability Goals and Priorities
Our 2030 Sustainability Goals and Priorities 2030 Sustainability Goals Our Priority Sustainable Development Goals Balchem commits to reducing our GHG emissions use by 25% Balchem commits to reducing our Learn more global water use about our by 25% sustainability programs 25
Slide 26: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 26
Slide 27: Balchem
Balchem A global nutrition and health company delivering trusted, innovative and science-based solutions to our customers • Leading positions in attractive markets • Creating new demand through innovation • Strong financial performance, delivering healthy margins and cash flows available for reinves
Slide 28: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 28
Slide 29: Non-GAAP Financial Information
Non-GAAP Financial Information Non-GAAP Financial Information In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non- GAAP financial measures that we believe are helpful in understanding
Slide 30: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 30
Slide 31: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 31
Slide 32: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 32
Slide 33: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued (1) Inventory valuation adjustment: Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company's cost of manufacturing plus a portion of the expected profit ma
Slide 34: Thank you
“SSI balchem: e.° Solve Today. Shape Tomorrow. Thank you