Aker Biomarine Asa · OSL:AKBM
Aker Biomarine Asa — Debt Investor Presentation (August 2024)
46 slides from Aker Biomarine Asa's debt investor presentation, Aug 22, 2024
Slide 1: Investor Presentation
Investor Presentation 22 August 2024 1
Slide 2: Important information and disclaimer
Important information and disclaimer 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, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities
Slide 3: Introduction to Aker BioMarine
Table of contents Section 1 1 - Introduction to Aker BioMarine Introduction to 2 - Business overview Aker BioMarine 3 - Market overview 4 - Financial performance 5 - Appendix 3
Slide 4: Growing global human health challenge and Aker BioMarine well positioned
There is a growing global human health challenge and Aker BioMarine is well positioned to be part of the solution Dramatic growth of lifestyle diseases Consumers are increasingly aware of nutrition Aker BioMarine focuses on improving human links health Leading causes of death 2016 vs. 20401 Total di
Slide 5: Uniquely positioned global human health and nutrition company
Aker BioMarine is a uniquely positioned global human health and nutrition company Aker BioMarine at glance Financial development LTM revenue development A leading human health and nutrition company with strong growth, USD millions protected market positions and operational leverage Revenue 203 216 1
Slide 6: Track record of successful growth dating back to 2006
Aker BioMarine has a track record of successful growth dating back to 2006 Feed Ingredients (Sold) Human health Ingredients (HHI) Consumer Health Products Emerging Businesses 2008 2014 2015 2017-2018 2019 2020 2021 2023 2024 Houston Market Facility consolidation The Superba krill line Aker BioMarine
Slide 7: Market aligned business units with targeted development focus
Aker BioMarine has strong market aligned business units with targeted development focus Feed Ingredients (FI) Human Health Ingredients Consumer Health Products Emerging Businesses Corporate overhead • Krill harvesting and • Manufactures and sells krill oil • Aker BioMarine acquired Lang • Epion Bran
Slide 8: Business units have strong financial performance in their market segments
Aker BioMarine business units have strong financial performance in their respective market segments Human Health Ingredients Consumer Health Products Emerging Businesses USDm USDm USDm Revenue Adj. EBITDA Revenue Adj. EBITDA Revenue Adj. EBITDA 14 91 122 11 9 84 108 112 66 33 35 27 8 11 9 -7 -11 -11
Slide 9: Business overview
Table of contents Section 2 1 - Introduction to Aker BioMarine Business 2 - Business overview overview 3 - Market overview 4 - Financial performance 5 - Appendix 9
Slide 10: Human Health Ingredients: premium krill-based ingredient business
Human Health Ingredients Consumer Health Products Emerging Businesses Human Health Ingredients is a unique, premium krill-based ingredient sales & manufacturing business with IP protection, strong science and secure supply HHI business overview HHI brands Krill oil revenueand • Manufactures composit
Slide 11: HHI in large and growing human omega-3 B2B nutrition market
Human Health Ingredients Consumer Health Products Emerging Businesses HHI is in the large and growing human omega-3 B2B nutrition market, with growing market share Growing omega-3 supplements B2B market USD 150m+ uplift potential in Omega-3 market Comments Omega-3 supplements B2B market1 Estimated O
Slide 12: Superba is the leading krill-based supplement with 50+ studies
Human Health Ingredients Consumer Health Products Emerging Businesses Superba is the leading krill-based supplement, difficult-to-replicate with 50+ studies enabling claims across multiple needs states Strong and growing scientific pipeline Krill oils unique composition drives health benefits and pr
Slide 13: HHI achieved premium margin through strong value proposition
Human Health Ingredients Consumer Health Products Emerging Businesses HHI has achieved premium margin through a strong value proposition and favorable market dynamics Strong differentiation from other Omega-3s… …enabling substantial price premium vs. Omega-3 peers Krill oil vs. fish oil Krill Oil Fi
Slide 14: Diversified customer base with large growth potential
Human Health Ingredients Consumer Health Products Emerging Businesses Aker BioMarine has built a diversified customer base with large growth potential in all major markets going forward Superba’s market diversification has increased significantly since 2016 Targeted strategy to unlock growth potenti
Slide 15: HHI manufacturing facility produces IP protected krill ingredients and algae oil
Human Health Ingredients Consumer Health Products Emerging Businesses HHI’s manufacturing facility produces IP protected krill derived ingredients and is now also producing algae oil Production input secured through long-term agreements HHI processing into krill oil and other products Houston produc
Slide 16: PL+: Enhanced ingredient bioavailability with krill based delivery technology
Human Health Ingredients Consumer Health Products Emerging Businesses PL+: Enhanced ingredient bio availability with krill based delivery technology PL+ at a glance • PL+ is an advanced delivery platform designed to enhance ingredient bioavailability • Utilizes the unique composition of Superba kril
Slide 17: Lysoveta: Innovative brain and eye health ingredient
Human Health Ingredients Consumer Health Products Emerging Businesses Lysoveta: Innovative brain and eye health ingredient derived from krill Lysoveta in brief LPC transports DHA/EPA into the brain • EPA / DHA in Lysophosphatidylcholine (LPC) form for targeted to the brain • First global commerciall
Slide 18: FloraMarine: High concentration DHA algae oil
Human Health Ingredients Consumer Health Products Emerging Businesses FloraMarine: High concentration DHA algae oil for human consumption FloraMarine delivers the highest, natural concentration of Algae DHA on the market • FloraMarine is a new algae oil product line for human consumption • Deliverin
Slide 19: Consumer Health Products serves US mass market through premium store products
Human Health Ingredients Consumer Health Products Emerging Businesses Consumer Health Products serves US mass market through premium store products in the supplement category Lang Pharma Nutrition business overview Revenue composition 2023 By customer Revenue • Lang iscomposition a key partner to202
Slide 20: CHP serves large and growing US supplement market with private label
Human Health Ingredients Consumer Health Products Emerging Businesses Consumer Health Products serves the large and growth US supplement market with private label products in mass market retail The US supplements market revenue is growing Private label accounts for ~23% of retail sales 15% growth in
Slide 21: CHP is a strong, steady business with H2 2024 growth expected
Human Health Ingredients Consumer Health Products Emerging Businesses CHP is a strong, steady business with H2 2024 growth expected following H1 inventory build down by retailers Increased out of store sales indicate that retailers are reducing inventory Lang displays stable development in revenue L
Slide 22: CHP's innovative customer tailored product development
Human Health Ingredients Consumer Health Products Emerging Businesses CHP’s innovative & customer tailored product development enables fast-paced launches to meet new consumer needs Product idea generation Execution phase Review studies & Make exclusive Manufacturing Live Amazon/ evaluate Raw Materi
Slide 23: Emerging businesses consists of five assets
Human Health Ingredients Consumer Health Products Emerging Businesses Emerging businesses consists of five assets, with a plan to be divested and/or bring to cash breakeven Brand portfolio Financial performance Emerging Business Emerging business quarterly revenue development USDm 4 3 3 2 2 2 Epion/
Slide 24: Epion markets and sells the Kori krill oil brand
Human Health Ingredients Consumer Health Products Emerging Businesses Epion markets and sells the Kori krill oil brand of products and has distribution in US tier-1 retailers and online Business overview Revenue EPION LTM revenue development • Epion Brands is Aker BioMarine's B2C brand platform and
Slide 25: Understory provides krill derived, IP protected protein ingredients
Human Health Ingredients Consumer Health Products Emerging Businesses Understory provides krill derived, IP protected ingredients to the large and growing market for protein human nutrition Understory in brief Upgrading krill meal into high quality protein Understory addresses consumer challenges1 E
Slide 26: State-of-the-art protein facility and innovation center in Ski, Norway
Human Health Ingredients Consumer Health Products Emerging Businesses Aker BioMarine has a state-of-the-art protein facility and innovation center in Ski, Norway Quick overview One-of-a-kind facility and innovation center Comments • In 2023, Aker BioMarine officially opened a new protein plant in Sk
Slide 27: Market overview
Table of contents Section 3 1 - Introduction to Aker BioMarine Market 2 - Business overview overview 3 - Market overview 4 - Financial performance 5 - Appendix 27
Slide 28: Global dietary nutrition market is growing across all regions
Human Health Ingredients Consumer Health Products Emerging Businesses The global dietary nutrition market is growing across all regions The global dietary supplements market grow by 7% annually Strong growth across all regions Total dietary supplements market size worldwide1 Total dietary supplement
Slide 29: Large and consistently growing Omega-3 B2B nutrition market
Human Health Ingredients Consumer Health Products Emerging Businesses Large and consistently growing Omega-3 B2B nutrition market The Omega-3 B2B nutrition market is expected to continue grow 5% annually Comments Omega-3 nutrition B2B market • Large B2B Omega-3 market of USD 935 million 2023, USD mi
Slide 30: US consumers' increased focus on health and wellness
Human Health Ingredients Consumer Health Products Emerging Businesses US consumers’ increased focus and consciousness on health and wellness supporting growth across all segments The human health retail market has shown a persistent path of consistent growth in the US Comments VMS + Active Nutrition
Slide 31: CHP supplies premium private label products to key US retailers
Human Health Ingredients Consumer Health Products Emerging Businesses CHP supplies premium private label products to key US mass market retailers US supplements market on strong growth trajectory Private label outpacing national brands US supplement market revenue Private label supplements sales gro
Slide 32: Attractive market sizes in the protein market
Human Health Ingredients Consumer Health Products Emerging Businesses Attractive market sizes with steady and growing demand in the protein market Protein products continue to grow in popularity Quality increase with complexity and price Significant market size Protein consumer market Breakdown of 2
Slide 33: Financial performance
Table of contents Section 4 1 - Introduction to Aker BioMarine Financial 2 - Business overview performance 3 - Market overview 4 - Financial performance 5 - Appendix 33
Slide 34: Strategic focus areas of the different segments
Strategic focus areas of the different segments in Aker BioMarine Human Health Ingredients (HHI) Consumer Health Products Emerging Businesses Corporate overhead • Manufacturing and selling krill oil to • Lang Pharma Nutrition - white • Epion Brands - Aker BioMarine’s own • All overhead and corporate
Slide 35: Consistently improving sales and EBITDA each quarter
Consistently improving sales and EBITDA each quarter combined with sustainable growth in underlying margins Net sales Adjusted EBITDA Quarterly LTM development Quarterly LTM development USDm USDm HHI CHP EB Corporate/Elim HHI CHP EB Corporate/Elim Consolidated EBITDA margin (%) 216 192 197 198 200 2
Slide 36: Future volume growth will increase margins and operational leverage
Future volume growth will increase margins and operational leverage Superba gross margin CHP gross margin Annual development in production volume and gross profit Annual development MT and % USDm Houston production volume (MT) Gross margin (%) Gross margin 64% 60% 25% 54% 23% 24% 51% 49% 22% 22% 1,2
Slide 37: Decreasing cost base, several initiatives driving costs down
Decreasing cost base, several initiatives to be implemented driving costs further down going forward Adjusted SG&A and other operating cost/(income) Comments Quarterly LTM development • Effects from successful implementation of USDm improvement program have reduced SG&A past 18 months, particularly
Slide 38: HHI operational leverage enables high margin expansion
HHI with strong operational leverage combined with capacity for further scale enable high margin expansion in conjunction with top-line growth High incremental value potential with growth in production for HHI Substantial operational leverage potential Steady state EBITDA margin vs. production volum
Slide 39: Positive and stable net working capital with limited cyclicality
Positive and stable net working capital with limited cyclicality Net working capital Comments Quarterly development of net working capital • The company maintains a positive net working USDm capital, primarily driven by inventory Inventory Accounts payables and other payables • HHI inventory build-d
Slide 40: Limited capex requirements going forward
Limited capex requirements going forward Capex Comments Quarterly development • Capex mainly relates to maintenance work in Houston USD millions and certain smaller development investments (algae, Lysoveta, PL+) Maintenance and development capex Protein launch plant • Capex for 2024 expected at USD
Slide 41: Appendix
Table of contents Section 5 1 - Introduction to Aker BioMarine Appendix 2 - Business overview 3 - Market overview 4 - Financial performance 5 - Appendix 41
Slide 42: P&L
P&L USD millions 2022 2023 Net sales 166.1 196.7 Cost of goods sold (98.4) (123.8) Gross profit 67.7 72.9 Gross margin Selling, general and administrative expense (66.4) (72.0) Depreciation, amortization and impairment (14.0) (18.7) Other operating income/(cost), net 7.3 (0.1) Operating profit (5.4)
Slide 43: Balance sheet (adjusted)
Balance sheet (adjusted) USD millions (unaudited) Q2 2024 Adjustment Q2 2024 USD millions (unaudited) Q2 2024 Adjustment Q2 2024 Reported (Unaudited) Adjusted Reported (Unaudited) Adjusted Property, plant and equipment 97.9 97.9 Interest-bearing debt 164.7 164.7 Right to use assets 4.3 4.3 Deferred
Slide 44: Experienced management team with a proven track record
Experienced management team with a proven track record and deep competency driving continuous improvement within the organisation MATTS JOHANSEN, KATRINE KLAVENESS CHIEF EXECUTIVE OFFICER (CEO) CHIEF FINANCIAL OFFICER (CFO) Matts Johansen has been CEO of Aker BioMarine since 2015. He first joined th
Slide 45: Board of directors with strong experience and industry knowledge
Board of directors with strong experience and industry knowledge supporting the company towards sustainable success KIMBERLY MATHISEN OLA SNØVE DIRECTOR CHAIRMAN Kimberly Mathisen became CEO of HUB Ocean in January 2022, after serving as GM Norway for Ola Snøve has served as Aker BioMarine’s Chair o
Slide 46: Aker BioMarine
® AKER BIOMARINE
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