Aker Biomarine Asa · OSL:AKBM
Aker Biomarine Asa — Q1 2024 Earnings Presentation
31 slides from Aker Biomarine Asa's earnings presentation, Apr 26, 2024
Slide 1: First Quarter 2024
First Quarter 2024 Aker BioMarine ASA 26 April 2024
Slide 2: Q1 2024 highlights
Q1 2024 highlights ▪ Revenue of USD 78.3 million, up 13% YoY ▪ Qrill Aqua sales up by 33% YoY and Superba krill oil sales up by 11% YoY ▪ Consumer Health Products (Lang) with lower revenues and profits YoY ▪ Adjusted EBITDA of USD 15.2 million (USD 6.0 million) ▪ Krill offshore production of 21,300
Slide 3: Quarterly revenue and Adjusted EBITDA
Quarterly revenue and Adjusted EBITDA Revenue Adjusted EBITDA1 USDm USDm 94.6 24.9 88.6 82.9 21.4 78.3 69.1 17.6 15.2 5.9 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23 4Q23 1Q24 3 1) Aker BioMarine evaluates the performance based on Adjusted EBITDA. This metric is defined as operating profit before deprec
Slide 4: Operations
Operations
Slide 5: Financial and legal reorganization has been completed
Financial and legal reorganization has been completed Business units are now operational as separate business units Feed Ingredients (AFI) Human Health Ingredients (HHI) Consumer Health Products Emerging Businesses ▪ Krill harvesting and processing ▪ Manufacturing and selling krill oil to the ▪ Lang
Slide 6: Feed Ingredients
Feed Ingredients Revenue1 (USDm) +41% 53.4 41.4 41.7 30.8 21.8 ▪ Good demand across product categories ▪ Continued good market sentiment for Qrill Aqua with 1Q23 2Q23 3Q23 4Q23 1Q24 volume up 19% and prices up 10% YoY Other Nutra to HHI2) Qrill category ▪ Qrill Pet won new contract for delivery in 2
Slide 7: Nutra meal is krill meal sold from FI to HHI
«Nutra meal» is krill meal sold from FI to HHI for conversion into krill oil ▪ Nutra is a krill meal that serves as an essential raw material for krill oil extraction at the HHI Houston production facility ▪ QHP (Qrill High Protein) is a biproduct from krill oil production at the Houston plant and s
Slide 8: Offshore operations
Offshore operations Annual production Quarterly production 1,000 metric tons (MT) 1,000 metric tons (MT) 22 ▪ Q1 production of 21,310 MT 52.0 50.7 20 ▪ 7% above Q1’23 45.0 43.8 18 ▪ Production has remained good with 40.9 16 YTD harvesting volumes per 25 th April 36.6 of 28,100 MT, 10% above last yea
Slide 9: Well on track to normalized harvesting year
Well on track to normalized harvesting year Offshore production, YTD kMT ▪ Continuously improving harvesting through 30 +10% operational excellence +6% +3% +2% ▪ The newest vessels Endurance fully commissioned 25 +15% ▪ Deployed purpose-built drone 20 15 10 5 0 2019 2020 2021 2022 2023 2024 Antarcti
Slide 10: Human Health Ingredients
Human Health Ingredients Revenue1 (USDm) +13% 22.7 22.4 19.9 20.7 20.9 ▪ Continued good development for Superba ▪ Growth across most regions, including US ▪ Improved margin YoY on better unit cost 1Q23 2Q23 3Q23 4Q23 1Q24 ▪ New Superba claim approved by the South Korean Ministry of Other ingredients
Slide 11: Building further on strong development in China
Building further on strong development in China Signing of a declaration of partnership with Function ▪ Signed declaration of partnership with Function, biggest customer of Superba in China ▪ Function aims to drive growth of krill-based products in China by ▪ Continue building the Superba market ▪ L
Slide 12: Launched FloraMarine
Launched FloraMarine ▪ FloraMarine is Aker BioMarine’s new algae oil for human consumption ▪ Delivering the highest, natural concentration of algae DHA on the market ▪ Received PO end of 2023 for the full 2024 Total algae O3 ingredient market value1) production capacity USDm MT 10% ▪ Produced in the
Slide 13: Consumer Health Products
Consumer Health Products Revenue and gross margin 1 (USDm) -19% 32.2 30.8 30.5 28.7 26.1 23% 23% 23% 21% 20% ▪ Sales declined from last year ▪ Last year had significant promotional activity from one of the Clubs that drove sales 1Q23 2Q23 3Q23 4Q23 1Q24 ▪ Gross margin remains on par with same period
Slide 14: Emerging Business
Emerging Business Revenue1 (USDm) -30% 4.5 3.1 2.6 2.1 1.8 ▪ Lower revenues mainly driven by the exit of Costco from Kori krill oil during 2023 1Q23 2Q23 3Q23 4Q23 1Q24 ▪ Online sales on Amazon continue to grow with a POS (sales out of stores) growth of 50% YoY ▪ Kori expanding internationally with
Slide 15: Financials
Financials
Slide 16: Profit & loss
Profit & loss Q1 2024 Q1 2023 FY 2023 Net sales USD million ▪ Net sales for the quarter are up 13% compared to first quarter last year. The (Unaudited) (Unaudited) (Audited) positive development is driven by higher Superba sales in the Human segment and higher Qrill Aqua sales in the Feed segment. N
Slide 17: Updated cost allocation for Feed Ingredients
ILLUSTRATIVE Updated cost allocation for Feed Ingredients Changed booking of offshore costs and implemented standard costing Change to capex and depreciation Change to gross profit Change to EBITDA USDm USDm USDm 9 8 8 7 8 7 7 7 7 7 6 6 7 4 4 6 2 2 5 0 0 0 4 -2 -2 3 2 -4 -4 1 -6 -6 0 -8 -8 Y0 Y1 Y2
Slide 18: Quarterly margins changed to better correlate with harvesting activity
Quarterly margins changed to better correlate with harvesting activity Depreciation from offshore production assets (in COGS) Impact on gross margin – percentage point change USDm Compared to previous cost allocation % 10.6 10.6 10.6 30 20 7.1 7.1 7.1 7.1 10 0 3.4 -10 -20 Q1 Q2 Q3 Q4 -30 Old New 1Q
Slide 19: Elim / other
Elim / other SG&A1 (USDm) 11.5 8.0 6.4 4.1 3.8 ▪ With the new structure, each segment reports SG&A costs directly attributable to their operations and FTE resources ▪ All overhead and corporate cost (finance, legal, ESG, HR, 1Q23 2Q23 3Q23 4Q23 1Q24 communication and IT compliance) is booked under S
Slide 20: Working capital
Working capital Change in net working capital (USDm) 192 199 1 7 13 ▪ Lower payables as large shipyard and fuel payments from end of 2023 fell due in first quarter ▪ Superba inventories currently at levels necessary for NWC Q4’23 Inventory Receivables Payables NWC Q1’24 safety stock amounts and othe
Slide 21: Limited capex program
Limited capex program Capex (USDm) ▪ Capex in the quarter relates mainly to payments of 24 shipyard end of 2023, capitalization of protein plant costs 7 ▪ Expect total capex in 2024 of USD 15-20 million ▪ Capex related to maintenance and smaller improvement projects 10 ▪ All major capital projects c
Slide 22: Cash flow in quarter
Cash flow in quarter Cash flow in the quarter USDm ▪ Cash flow from operations of USD -1.5 million OCF of USD -1.5 million ▪ Working capital build of USD 7 million 32 ▪ Higher interest expenses compared to last year 28 11 ▪ Cash flow from financing 7 5 ▪ Increased RCF offset by downpayment of Endura
Slide 23: Interest-bearing debt
Interest-bearing debt Interest-bearing debt (USDm) 5.8x 5.4x ▪ Net interest-bearing debt of USD 372 million 5.1x 5.1x ▪ Up in quarter mainly due to higher working capital 4.7x 413 407 402 393 404 15 19 30 28 32 ▪ NIBD/EBITDA of 4.7x ▪ Below covenant of 5.0x 373 399 388 372 365 ▪ Attractive bank debt
Slide 24: Balance sheet
USD million Q1 2024 Q1 2023 Q4 2023 (Unaudited) (Unudited) (Audited) Balance sheet ASSETS Property, plant and equipment 332.9 333.2 341.5 Property, plant and equipment ▪ Mainly shipyard capex and capitalization of protein plant costs in the quarter. Right to use assets 7.9 8.8 9.1 Intangible assets
Slide 25: Summary and Outlook
Summary and Outlook
Slide 26: Summary and outlook
Summary and outlook ▪ New operating structure implemented ▪ Continued strong revenue growth for the group ▪ Good operating performance offshore ▪ Market sentiment for animal products remains strong ▪ Further developed the market for human products in Asia ▪ Soft start of the year for Consumer Health
Slide 27: Q&A
Q&A To submit questions, please send to ir@akerbiomarine.com 27
Slide 28: Appendix
Appendix
Slide 29: Cash flow
USD million Q1 2024 Q1 2023 2023 (Unaudited) (Unaudited) (Audited) Cash flow Net profit (loss) after tax -11.9 -17.6 -9.0 Tax expenses 0.3 0.6 -25.0 Net interest and guarantee expenses 8.5 7.1 31.0 Cash flow from operations Interest paid -9.1 -6.9 -29.7 ▪ Negative cash flow from operations and negat
Slide 30: Important information
Important information This presentation has been prepared by Aker BioMarine ASA (the "Company"). The presentation does not constitute or form part of, and should not be construed as, an offer, solicita tion or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Compan
Slide 31: AKER BIOMARINE
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