Aker Biomarine Asa · OSL:AKBM
Aker Biomarine Asa — Q3 2024 Earnings Presentation
31 slides from Aker Biomarine Asa's earnings presentation, Nov 1, 2024
Slide 1: Third Quarter 2024
Third Quarter 2024 Aker BioMarine ASA 01 November 2024
Slide 2: Presenting team
Presenting team MATTS JOHANSEN KATRINE KLAVENESS CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER 2
Slide 3: Q3 2024 highlights
Q3 2024 highlights ▪ Closed Feed Ingredients transaction for a purchasing price of USD 624 million for a net gain from the sale of USD 214.2 million ▪ Paid extraordinary dividend of USD 373 million, equivalent to NOK 45/share ▪ Revenue for the continued Group of USD 49.3 million, down 7% YoY TBU ▪ A
Slide 4: Quarterly revenue and Adjusted EBITDA
Quarterly revenue and Adjusted EBITDA Pro forma excluding Feed Ingredients, unaudited Revenue Adjusted EBITDA1 USDm USDm +10% -7% 52.9 8.4 49.2 48.5 49.2 49.3 7.7 7.6 6.0 2.9 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 4 1) Aker BioMarine evaluates the performance based on Adjusted EBITDA. Thi
Slide 5: Operations
Operations
Slide 6: Human Health Ingredients
Human Health Ingredients Revenue1 (USDm) +8% 25.5 24.6 22.7 22.4 20.9 ▪ Revenue growth of 8% YoY ▪ Krill oil sales volume up 11%, continued improvement across several regions ▪ Average krill oil prices impacted by customer and product mix 3Q23 4Q23 1Q24 2Q24 3Q24 Other ingredients Krill oil ▪ Formal
Slide 7: HHI is the leading seller of premium krill oil to the B2B nutrition segment
HHI is the leading seller of premium krill oil to the B2B nutrition segment with expansion opportunities across other product categories Revenue development Product portfolio USDm Krill oil based Other products Krill oil Core product QHP (QRILL High Protein) is a Other Superba is a differentiated an
Slide 8: Driving immediate earnings growth with four key levers
Driving immediate earnings growth with four key levers Volume Price Cost Innovation Volume growth Price growth Cost optimization Build market and • Market growth • Customer mix and operational take market share • Market share • Product mix leverage at scale for recently • Implement launched product
Slide 9: Turnaround plan successfully implemented
Volume Price Cost Innovation Turnaround plan successfully implemented Krill oil sales volume (MT) LTM (LHS) Quarter (RHS) Launched turnaround plan +17% ▪ Sales volumes almost back to all-time high +20% ▪ Volume growth expected to continue ▪ Sales & marketing costs expect to stabilize Sales turnaroun
Slide 10: HHI is in the large and growing human omega-3 B2B nutrition market
Volume Price Cost Innovation 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 Omega-3 market share2 • Aker BioMarine to
Slide 11: Stable underlying prices, but impacted by customer and product mix
Volume Price Cost Innovation Stable underlying prices, but impacted by customer and product mix Krill oil products – average sales price USD/kg Stable underlying prices, but mix effects: USD 15m revenue & EBITDA ▪ Large introductory offer in 2024 to onboard a new customer opportunity ▪ Korean market
Slide 12: Rising sales and completed inventory reduction driving increased production
Volume Price Cost Innovation Rising sales and completed inventory reduction are driving increased production, expected to lower krill oil unit cost Production volume is the main driver of unit cost Krill oil – LTM unit cost development and production volume phases Optimizing cost base High productio
Slide 13: Cost rightsizing
Illustration of earnings potential in value creation plan Illustrative EBITDA2) buildup at stable production EBITDA contribution sensitivity The sensitivity table assumes sales volume equal production volume, such that revenue and associated production costs are scaled 3 accordingly. Starting point
Slide 14: Consumer Health Products
Consumer Health Products Revenue and gross margin 1 (USDm) -5% 30.8 30.5 29.1 26.1 25.0 ▪ Revenues down 5% YoY 23% 23% 20% 21% 20% ▪ 3Q’23 included the roll-out of the Multivitamin Gummy and high promotional activity at Costco ▪ Market for private label remains strong ▪ YTD Lang out of store sales (
Slide 15: Emerging Business
Emerging Business Revenue1 (USDm) +12% 3.1 2.3 2.1 2.1 1.8 ▪ Epion YoY revenue growth of 12% driven by online sales at Amazon and good growth at Walmart ▪ EBITDA loss reduced to USD 1m 3Q23 4Q23 1Q24 2Q24 3Q24 ▪ Out of store sales (POS) with positive development ▪ Amazon with 22% YoY POS growth ▪ PO
Slide 16: Strategic focus areas of remaining segments
Strategic focus areas of remaining segments in Aker BioMarine Strategig focus Continue to explore opportunities to optimize shareholder value Launched process to divest Understory ▪ Mandated Oghma Partners as a financial Human Health Ingredients (HHI) advisor Grow, ▪ In line with strategy to focus o
Slide 17: Financials
Financials
Slide 18: Profit & loss
Q3 2024 Q3 2023 FY 2023 Profit & loss USD million (Unaudited) (Unaudited) (Unaudited) Net sales Net sales 49.3 52.9 196.7 ▪ Sales were down 7% from Q3-23. Sale in Human Health is up 8% due to higher Superba volume and a broader product portfolio, but Consumer Health is Cost of goods sold -34.1 -34.8
Slide 19: Elim / other
Elim / other SG&A1 including non-recurring costs (USDm) Corporate costs 10.1 6.6 4.1 ▪ SG&A impacted by cost from ongoing improvement 2.4 programs 1.2 ▪ Adjustment items of USD 1.2m in quarter 3Q23 4Q23 1Q24 2Q24 3Q24 ▪ Underlying stable development in SG&A SG&A continued op. ▪ Ongoing cost improvem
Slide 20: Working capital
Working capital Change in net working capital (USDm) 132 15 1 30 117 ▪ Human with increased inventory and payables due to large purchase of Nutra meal from Feed Ingredients as part of the transaction NWC Q2’24 Inventory Receivables Payables NWC Q3’24 ▪ To be settled in Q4 against a sellers’ credit g
Slide 21: Limited capex program
Limited capex program Capex (USDm) Protein launch plant ▪ Maintenance work in Houston and certain smaller Maintenance and development capex investments in Emerging Businesses 7 ▪ 2024 outlook 1 ▪ Expect maintenance capex full year of 2024 of USD 5-8 6 million excluding Feed Ingredients ▪ Capex relat
Slide 22: Interest-bearing debt
Interest-bearing debt Interest-bearing debt (USDm) Including Feed Ingredients ▪ Completed refinancing in the quarter 5.4x 5.1x 5.1x ▪ NOK 1,600 mill 3-year bond issued in August 4.7x 395 ▪ Swapped to USD 150m at SOFR + 467 bps 407 404 4.3x 393 ▪ Secured USD 30 million in senior secured overdraft 19
Slide 23: Cash flow in quarter
Cash flow in quarter Includes Feed Ingredients for July and August Cash flow in the quarter (USDm) Includes Feed Ingredients for July and August ▪ Cash flow from operations of USD 3.5 million ▪ Lower working capital for continued business and Feed Ingredients OCF of USD 3.5 million ▪ Other operating
Slide 24: Balance sheet – Continuing operations
Balance sheet USD million Q3 2024 Q3 2023* Q4 2023* – Continuing operations (Unaudited) (Unaudited) (Audited) ASSETS Property, plant and equipment Property, plant and equipment 66.4 327.8 341.5 ▪ Mainly Houston production related equipment. Protein investments are Right to use assets 3.1 9.9 9.1 inc
Slide 25: Summary and Outlook
Summary and Outlook
Slide 26: Summary and outlook
Summary and outlook ▪ Completed Feed Ingredients transaction, refinanced the company and paid extraordinary dividend ▪ Solid demand for krill oil across markets driving sales, tangible opportunities to lift prices ▪ The private label market remains robust despite retailers reducing inventory ▪ Emerg
Slide 27: Thank you!
Thank you! To submit questions, please send to ir@akerbiomarine.com 27
Slide 28: Appendix
Appendix
Slide 29: Cash flow
USD million- Q3 2024 Q3 2023 2023 (Unaudited) (Unaudited) (Unaudited) Cash flow Net profit (loss) after tax 207.5 1.1 -9.0 Tax expenses -0.2 1.1 -25.0 Cash flow from operations Net interest and guarantee expenses 5.4 8.2 31.0 ▪ Slightly positive cash flow from operations. Reduced working capital due
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
») AKER BIOMARINE