Balchem Corporation · NASDAQ:BCPC
Balchem — Q2 2022 Earnings Presentation
32 slides from Balchem's earnings presentation, Jul 29, 2022
Slide 1: Investor Presentation Q2 2022
Investor Presentation Q2 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: New Hampton, NY • Approximately 1,300 Employees • 22 Manufacturing Sites: - 17 in North America - 4 in Europe -
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 15% 98% HUMAN NUTRITION & HEALTH Nutrition & Health (% of FY 2021 sales) 55% ANIMAL NUTRITION & HEALTH 28% 98% Of Revenues Focused On Nutrition & Health 5
Slide 6: Segment Overview
Segment Overview Segment Markets Served Solutions 15% Human Nutrition • Nutritional Supplements • Microencapsulation 98% & Health • Food and Beverage • Choline, & Vitamin K2 Nutrition & Health (% of sales) 55% • Infant & Toddler Formula • Chelated Minerals 28% • Organic Cereal • Powder, Flavor, & Ce
Slide 7: Our 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: Q2 2022 Financial Summary
Q2 2022 Financial Summary Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 17.0% 12.6% 13.3% 14.5% 236.7 56.5 34.4 1.07 202.4 50.1 30.4 0.93 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 2Q21 2Q22 • Growth in all three • Driven by sales growth • Driven by sales growth • Growth in earnin
Slide 11: June YTD Financial Summary
June YTD Financial Summary Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 20.0% 14.8% 15.2% 16.1% 465.6 110.0 2.09 388.0 95.9 67.8 58.8 1.80 2Q21 YTD 2Q22 YTD 2Q21 YTD 2Q22 YTD 2Q21 YTD 2Q22 YTD 2Q21 YTD 2Q22 YTD • Double-digit growth in all • Driven by sales growth •
Slide 12: FY 2021 Financial Summary
FY 2021 Financial Summary Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 13.6% 8.9% 8.2% 7.6% 799.0 189.8 3.57 703.6 174.2 107.8 116.6 3.32 2020 2021 2020 2021 2020 2021 2020 2021 • Strong growth in all three • Driven by sales growth • Driven by sales growth • Growth i
Slide 13: Historical Financials
Historical Financials SALES ($M) ADJ. EBITDA ($M) 799 190 174 704 159 160 644 644 149 148 595 140 552 553 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 ADJ. NET EARNINGS ($M) ADJ. EPS ($/share) 117 3.57 108 3.32 104 3.19 98 3.01 80 80 82 2.51 2.52 2.53 2015 2016 2017 2018 201
Slide 14: Segment Financials
Segment Financials SALES ($M) ADJ. EBITDA ($M) 799 190 12 175 704 117 159 160 42 644 644 8 149 148 5 39 104 140 10 595 26 3 51 7 552 553 7 48 92 32 39 76 227 32 37 25 32 54 110 70 73 192 466 28 39 54 10 1 176 178 70 33 33 37 29 24 158 161 35 166 132 24 112 443 97 400 341 347 78 80 84 83 297 316 71 2
Slide 15: Capital Allocation Strategy and M&A
Capital Allocation Strategy and M&A Capital Allocation Strategy Annual Cash Flow ($M) and Debt Leverage Ratio • Prioritize organic growth investments 0.5x 0.0x • Augment organic growth with targeted M&A 2.3x 1.1x 0.6x 161 • Pay down debt 1.5x 1.6x 1.2x 150 • Continue to pay and grow dividend 119 124
Slide 16: Recent Acquisitions
Recent Acquisitions Rationale Key Offering Kappa Bioscience AS Adjacent product offering in high growth Specialty Vitamin K2 June 2022 market Zumbro River Brand Market consolidation and expanded product High protein extrusion and agglomeration December 2019 offering Chemogas Adds leadership position
Slide 17: Kappa Bioscience Acquisition - Strategic Rationale
Kappa Bioscience Acquisition - Strategic Rationale • Well-aligned with: – Balchem’s higher purpose of “making the world a healthier place” and Balchem’s mission of “building a global nutrition and health company delivering trusted, innovative and science-based solutions to our customers” and – Our H
Slide 18: What is Vitamin K2?
What is Vitamin K2? • Vitamin K2 is an essential fat-soluble vitamin. Like all vitamins, it needs to be obtained from the diet to enable your body to function as it should Vitamin K2 MK-7 all-trans isomer • Western diets do not provide enough vitamin K2 so additional K2 must be supplemented from K2
Slide 19: Free Cash Flow Conversion
Free Cash Flow Conversion 130% Free Cash Flow as % of Non-GAAP Net Earnings 120% 109% 110% 105% 102% 102% 107% 100% 93% 90% 79% 80% 70% 60% 50% 2015 2016 2017 2018 2019 2020 2021 Free Cash Flow Conversion Solid Free Cash Flow Conversion, Turning Profits Into Cash 19
Slide 20: Dividends
Dividends 0.64 • Annual double-digit dividend growth for the last decade 0.58 • Consistency in execution 0.52 0.47 0.42 0.38 0.34 0.30 0.26 0.22 0.18 0.15 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 ($/share) Consistent Dividend Policy 20
Slide 21: 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 22: 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 23: Measuring Our Progress
Measuring Our Progress People Planet Profit 11.4 billion – number of animals reached per year 27.9% – revenue from products developed in the past 1.4 billion – number of people reached per year five years 3.71 GJ/ton – energy intensity (GJ of energy per ton 0.99 – total recordable injury rate (TRIR)
Slide 24: Dedicated to a Sustainable Future For All
Dedicated to a Sustainable Future For All We support and partner with organizations that share the We harness the collective efforts of our employees to give back to same mission of making the world a healthier place. With this the local communities. Our Balchem Helping Hands initiative partnership,
Slide 25: 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 26: 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 26
Slide 27: Confidential
- baichem * Solve Today. Shape Tomorrow. Confidential 27
Slide 28: Non-GAAP Financial Information
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