Balchem Corporation · NASDAQ:BCPC
Balchem — Q4 2022 Earnings Presentation
27 slides from Balchem's earnings presentation, 2023
Slide 1: Investor Presentation Q4, 2022
Investor Presentation Q4, 2022 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: Balchem Corporation
Balchem Corporation Balchem develops, manufactures, and markets specialty ingredients that help make the world a healthier place Highlights • NASDAQ: BCPC • Founded in 1967 • Headquarters: Montvale, NJ • Approximately 1,300 Employees • 23 Manufacturing Sites: - 18 in North America - 4 in Europe - 1
Slide 4: Leadership
Leadership Ted Harris, Chairman 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 Harvard University and bache
Slide 5: Balchem at a Glance
Balchem at a Glance OTHER SPECIALTY PRODUCTS 14% 98% HUMAN NUTRITION & HEALTH Nutrition & Health (% of FY 2022 sales) 56% 28% ANIMAL NUTRITION & HEALTH 98% Of Revenues Focused On Nutrition & Health 5
Slide 6: Segment Overview
Segment Overview Segment Markets Served Solutions 14% Human Nutrition • Nutritional Supplements • Microencapsulation 98% & Health • Food and Beverage • Choline, & Vitamin K2 Nutrition & Health (% of sales) 56% • Infant & Toddler Formula • Chelated Minerals 28% • Organic Cereal • Powder, Flavor, & Ce
Slide 7: Vision and Mission
Vision and Mission Our Vision To make the world a healthier place. Our Mission To build a global nutrition and health company delivering trusted, innovative and science- based solutions to our customers. Committed To Building A Global Nutrition And Health Company 7
Slide 8: 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 9: Balchem Growth Platforms
Balchem Growth Platforms Human Nutrition & Health Animal Nutrition & Health HUMAN NUTRITION & HEALTH ANIMAL NUTRITION & HEALTH • Leveraging Synergies Across Segment • ReaShure® Penetration • Realize Vitamin K2 market potential • NRC Recommendation on Choline • FDA RDI for Choline and Expanded Cholin
Slide 10: Q4 2022 Financial Summary
Q4 2022 Financial Summary Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 9.1% 14.6% 9.1% 10.2% 232.5 52.3 30.3 0.94 213.1 45.6 27.8 0.85 4Q21 4Q22 4Q21 4Q22 4Q21 4Q22 4Q21 4Q22 • Higher average selling • Driven by sales growth and • Driven by sales growth • Growth in e
Slide 11: FY 2022 Financial Summary
FY 2022 Financial Summary Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 17.9% 13.8% 11.9% 12.9% 942.4 216.1 130.5 4.03 799.0 189.8 116.6 3.57 2021 2022 2021 2022 2021 2022 2021 2022 • Double-digit growth in all • Driven by sales growth and • Driven by sales growth • G
Slide 12: Historical Financials
Historical Financials SALES ($M) ADJ. EBITDA ($M) 942 216 799 190 174 704 160 159 644 644 148 595 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 ADJ. NET EARNINGS ($M) ADJ. EPS ($/share) 131 4.03 117 3.57 108 3.19 3.32 104 98 3.01 82 2.53 2017 2018 2019 2020 2021 2022 2017 2018 2019 202
Slide 13: Segment Financials
Segment Financials SALES ($M) ADJ. EBITDA ($M) 942 216 22 2 131 190 799 44 0 12 175 704 159 160 42 117 644 644 8 148 5 10 39 595 104 262 26 7 47 51 32 39 48 76 92 227 37 32 73 192 39 176 178 33 33 158 29 527 123 112 443 97 400 341 347 80 84 83 316 -1 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020
Slide 14: Capital Allocation Strategy and M&A
Capital Allocation Strategy and M&A Capital Allocation Strategy Annual Cash Flow ($M) and Debt Leverage Ratio • Prioritize organic growth investments • Augment organic growth with targeted M&A 2.3x 1.7x 1.5x 1.6x 161 • Pay down debt 1.2x 1.1x 150 0.6x 139 • Continue to pay and grow dividend 119 124
Slide 15: Recent Acquisitions
Recent Acquisitions Rationale Key Offering Bergstrom Nutrition Adjacent product offering to existing Specialty Sulfur for dietary supplements August 2022 Minerals portfolio Kappa Bioscience AS Adjacent product offering in high growth Specialty Vitamin K2 June 2022 market Zumbro River Brand Market co
Slide 16: Free Cash Flow Conversion
Free Cash Flow Conversion 140% Free Cash Flow as % of Non-GAAP Net Earnings 120% 105% 109% 102% 102% 107% 100% 79% 93% 80% 69% 60% 40% 20% 0% 2015 2016 2017 2018 2019 2020 2021 2022 Free Cash Flow Conversion Solid Free Cash Flow Conversion Over Time, 2022 Impacted By Rapid Input Cost Inflation 16
Slide 17: Dividends
Dividends • Annual double-digit dividend growth for the last decade 0.71 0.64 • Consistency in execution 0.58 0.52 0.47 0.42 0.38 0.34 0.30 0.26 0.22 0.18 0.15 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 ($/share) Consistent Dividend Policy 17
Slide 18: Our Sustainability Framework
Our Sustainability Framework Every day, Balchem is delivering trusted solutions that enhance health and well-being through science. The two objectives of our sustainability strategy directly support our vision of making the world a healthier place: • providing innovative solutions for the health and
Slide 19: Our 2030 ESG Goals
Our 2030 ESG Goals OPPORTUNITY EXAMPLES EMISSIONS Process improvements in spray drying by increasing feed solids REDUCTION Balchem commits to reduce our Reduce drying with product design (e.g., ReaShure®-XC) GHG emissions by Major consumer efficiency improvements (e.g., modernized boilers) 25% Use o
Slide 20: What Makes Balchem Unique?
What Makes Balchem Unique? Proven Track Record Of Growth Protected Positions ✓ Proven ability to grow in all economic ✓ Consolidated position in Choline conditions ✓ Premium branded products and patent ✓ Steady and thoughtful capital allocation portfolio ✓ Continued innovation ✓ EPA Registrations fo
Slide 21: Summary / Wrap Up
Summary / Wrap Up • Leading Positions in Attractive Markets • Creating New Demand Through Innovation • Delivering Healthy Margins • Generating Cash Flow from Operations Available for Reinvestment • Proven Track Record Reasons To Invest 21
Slide 22: Solve Today. Shape Tomorrow.
- baichem * Solve Today. Shape Tomorrow. Confidential 22
Slide 23: Non-GAAP Financial Information
Non-GAAP Financial Information 23
Slide 24: Non-GAAP Financial Information - Continued
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Slide 25: Non-GAAP Financial Information - Continued
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Slide 26: Non-GAAP Financial Information - Continued
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Slide 27: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 27