Aker Biomarine Asa · OSL:AKBM
Aker Biomarine Asa — Q2 2020 Earnings Presentation
32 slides from Aker Biomarine Asa's earnings presentation, Jul 15, 2020
Slide 1: Q2 2020 Presentation
IMPROVING HUMAN AND PLANETARY HEALTH Q2 2020 PRESENTATION 15 JULY 2020
Slide 2: Important Notice
IMPORTANT NOTICE This presentation has been prepared by Aker BioMarine AS (the "Company"). The presentation does not constitute or form part of, and should not be construed as, an offer, solicitat ion or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or a
Slide 3: H1 2020 Highlights
> zx m aD py fe) = > 2 Zz m H1 2020 HIGHLIGHTS
Slide 4: Strong Q2 2020 and H1 2020 in line with the business plan, and target
STRONG Q2 2020 AND H1 2020 IN LINE WITH THE BUSINESS PLAN, AND TARGET OF USD ~80 – 90 MILLION IN ADJUSTED EBITDA FOR 2020 ▪ Kori was successfully launched with US retailers in Q2 2020, significant marketing campaign launched, now passed USD 1.6 million in shipments ▪ Regulatory approval and market a
Slide 5: Kori available in major US retailers and major marketing campaign launched
KORI AVAILABLE IN MAJOR US RETAILERS AND MAJOR MARKETING CAMPAIGN LAUNCHED MARKETING CAMPAIGN LAUNCHED ▪ Major marketing campaign launched in July ▪ More than 2bn impressions planned for 2020 (July to December) with 1.6bn impressions on TV ▪ Reaching 90% of US adults aged 35-64 and 80% of adults age
Slide 6: Key Financials
ig) AKER BIOMARINE KEY FINANCIALS
Slide 7: Key Financials Summary
KEY FINANCIALS SUMMARY REVENUE AND GROSS MARGIN DEVELOPMENT ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN DEVELOPMENT USDm USDm 246,2 53,0 +36% 40.7% 142,9 42.6% +38% 39.3% 36.4% 30,2 35.7% 105,4 21,9 18,4 17,6 66,2 72,2 27.9% 21.5% 21.1% 24.3% 20.8% 2019 YTD Q2 2019 YTD Q2 2020 Q2 2019 Q2 2020 2019 YT
Slide 8: Production Volume and Revenue per Product
PRODUCTION VOLUME AND REVENUE PER PRODUCT PRODUCTION VOLUME DEVELOPMENT REVENUE DEVELOPMENT PER PRODUCT Total offshore production Revenue per product excluding eliminations1 Thousand MT USDm 40,9 259.4 11.6 +17% 33,7 82,2 28,9 +37% 148.7 8.1 69,6 108.3 16,3 56,5 6.0 12,6 33,3 69.1 75.9 32,0 3.4 3.7
Slide 9: Revenue and Adjusted EBITDA per Segment
REVENUE AND ADJUSTED EBITDA PER SEGMENT INGREDIENTS BRANDS REVENUE ▪ Growth of 23% in YTD Q2 2020 REVENUE1 ▪ 38% growth YTD Q2 2020 USDm over YTD Q2 2019 driven by krill USDm compared to YTD Q2 2019, driven oil sales by strong underlying performance ▪ Growth rate in H2 2020 to ▪ Slight decline in Q2
Slide 10: Business Plan with Higher Adjusted EBITDA in H2 2020
BUSINESS PLAN WITH HIGHER ADJUSTED EBITDA IN H2 2020 ILLUSTRATIVE 2020 ADJUSTED EBITDA BRIDGE 2 USDm ~80 – 90 Not adjusted for development costs of 1 QPAWS (dog food business) of USD 2.9 million and inventory adjustment of USD 2.6 million YTD Q2 2020 30,2 Annualized Seasonality & Unit cost reduction
Slide 11: Higher Growth and Lower Costs in H2 2020
HIGHER GROWTH AND LOWER COSTS IN H2 2020 1 HIGHER H2 2020 GROWTH IN QRILL AQUA 2 REDUCTION IN KRILL OIL COGS H2 2020 % of year total COGS USD TARGET TARGET 30 29 22 19 20 10 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20E Q4-20E Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20E Q4-20E ▪ Capacity increase, drive
Slide 12: Profit & Loss
PROFIT & LOSS 2019 Q2 2019 Q2 2020 YTD Q2 2019 YTD Q2 2020 USD thousands (Audited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) COMMENTARY Net sales 246,170 66,175 72,162 105,381 142,904 ▪ On a YTD basis SG&A increased due to the marketing costs allocated to the Cost of goods sold -145,901 (37,96
Slide 13: Cash Flow
CASH FLOW USD thousands 2019 Q2 2019 Q2 2020 YTD Q2 2019 YTD Q2 2020 ▪ COMMENTS (Audited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) COMMENTARY Profit (loss) after tax (23,751) 1,426 (9,065) (6,515) (10,782) ▪ Working capital components, such as inventory and accounts receivables, Depreciation
Slide 14: Balance Sheet
BALANCE SHEET 2019 Q2 2019 Q2 2020 USD thousands (Audited) (Unaudited) (Unaudited) COMMENTARY ASSETS ▪ The ingredient segment has a complex value chain with production in stages. In accordance with IFRS, actual production expenses are capitalized to inventory each Cash and cash equivalents 13,610 14
Slide 15: Summary and Outlook
> zx m aD py fe) = > 2 Zz m SUMMARY AND OUTLOOK
Slide 16: On track to achieve the full-year business plan target
ON TRACK TO ACHIEVE THE FULL-YEAR BUSINESS PLAN TARGET 5 YEAR ASPIRATION ILLUSTRATIVE ADJ. EBITDA DEVELOPMENT COMMENTS USDm Adj. EBITDA margin ▪ Based on YTD performance, current market conditions and assumptions, the Company targets a full-year adjusted EBITDA of approximately USDM 200 USD 80 – 90
Slide 17: Summary and Outlook
SUMMARY AND OUTLOOK ▪ Q2 2020 follows the trajectory from Q1 2020 ▪ H1 2020 delivered adjusted EBITDA according to the business plan ▪ H2 2020 is expected to be significantly stronger than H1 2020 on both revenues and adjusted EBITDA margin ▪ Ice conditions in Antarctica impacting harvesting negativ
Slide 18: Company Highlights
> zx m aD py fe) = > 2 Zz m COMPANY HIGHLIGHTS
Slide 19: Aker BioMarine is the fast growing world leader within krill with a 70% share
AKER BIOMARINE IS THE FAST GROWING WORLD LEADER WITHIN KRILL WITH A 70% SHARE OF THE GLOBAL HARVEST 445 2 KEY COMPANY FACTS CUSTOMERS SEGMENTS REVENUE DEVELOPMENT ▪ World leader within krill harvesting and processing, accounting for ~70% of global harvest 1 and ~80% of global USDm krill oil producti
Slide 20: Fully integrated value chain results in uniquely efficient business model
FULLY INTEGRATED VALUE CHAIN RESULTS IN UNIQUELY EFFICIENT BUSINESS MODEL, LOWER VOLATILITY, INCREASED SPEED TO MARKET AND HIGHER MARGINS Harvesting Ingredient production R&D Krill oil production Sales & marketing Distribution & brands 69% ofkrillglobal catch 1 30% reduction in CO2-emissions ~60 pub
Slide 21: Aker BioMarine group consists of three companies with distinct capabilities
AKER BIOMARINE GROUP CONSISTS OF THREE COMPANIES WITH DISTINCT CAPABILITIES Ingredients Brands ▪ Aker BioMarine produces and markets ingredients for ▪ State-of-the-art healthcare manufacturing company ▪ Epion is Aker BioMarine’s FMCG brand company aquaculture and dog feed based in the US, acquired b
Slide 22: Krill is the world's largest biomass and most sustainable fishery
KRILL IS THE WORLD’S LARGEST BIOMASS AND MOST SUSTAINABLE FISHERY, AND PROVIDES SIGNIFICANT BENEFITS TO HUMANS, PETS AND OTHER ANIMALS Ingredients Proven preventative health Krill is 2x as effective in increasing the Krill supplements results in a higher KRILL CAN PROVIDE SIGNIFICANT BENEFITS TO Ome
Slide 23: World leading manufacturer of ingredients from krill
AKER BIOMARINE IS THE WORLD LEADING MANUFACTURER OF INGREDIENTS FROM KRILL WITH A STRONG AND DIVERSIFIED CONTRACT PORTFOLIO Ingredients Key products Description Share of ‘19 sales % GM Houston factory purpose-built for krill oil production ▪ Purpose-built plant for processing and production ▪ Powder
Slide 24: Expertise in producing finished consumer goods through Lang and Epion
AKER BIOMARINE HAS ESTABLISHED SIGNIFICANT EXPERTISE IN PRODUCING FINISHED CONSUMER GOODS THROUGH THE ACQUISITION OF LANG AND CREATION OF EPION Brands ▪ Full service, mass market private label and brand manufacturer ▪ Established by Aker BioMarine to develop consumer brands of krill based products ▪
Slide 25: Aker BioMarine Investment Highlights
AKER BIOMARINE INVESTMENT HIGHLIGHTS UNDERDEVELOPED MARKET WITH IMMENSE GROWTH POTENTIAL DUE TO HEALTH MEGATRENDS AND GLOBAL PROTEIN 1 SHORTAGE KRILL BASED INGREDIENTS ARE UNIQUELY POSITIONED DUE TO SUPERIOR NUTRITIONAL PROFILE AND PROVEN HEALTH 2 BENEFITS, PROTECTED BY INTELLECTUAL PROPERTY INHEREN
Slide 26: Strategic priorities and projects driving growth ambitions
STRATEGIC PRIORITIES AND PROJECTS DRIVING AKER BIOMARINE’S GROWTH AMBITIONS 1 MAINTAINING OUR LEADERSHIP IN KRILL FISHERIES 2 KEEPING AN ACTIONABLE INNOVATION PIPELINE WITH IMMENSE POTENTIAL 3 DEVELOPING A BEST IN CLASS PROTEIN POWDER FOR PEOPLE 4 CAPITALIZING ON THE GROWING IMPORTANCE OF PRIVATE LA
Slide 27: Additional Information
> zx m aD py fe) = > 2 Zz m ADDITIONAL INFORMATION
Slide 28: EBITDA Adjustments
EBITDA ADJUSTMENTS EBITDA ADJUSTEMENTS EBITDA ADJUSTEMENTS Q2 2020 EBITDA adjustments 17,6 YTD Q2 2020 EBITDA adjustments 53,0 30,2 USDm USDm 0,8 1,8 6,0 5,6 0,3 0,6 0,6 0,3 0,6 1,1 23,9 3,4 12,2 45,7 1,3 EBITDA Q2 2020 Transaction Legal fees Juvel cost net of Kori launch Adj. EBITDA Q2 EBITDA EBITD
Slide 29: P&L Reconciliation
P&L RECONCILIATION Revenue reconciliation USDm 2019 Q2 2019 Q2 2020 YTD Q2 2019 YTD Q2 2020 Ingredients 177.2 42.5 50.7 75.1 92.3 Brands 82.2 26.6 25.2 33.3 56.5 Eliminations (13.4) (2.9) (3.7) (2.9) (5.9) Reported revenues 246.2 66.2 72.2 105.4 142.9 EBITDA reconciliation USDm 2019 Q2 2019 Q2 2020
Slide 30: Fuel Hedging
FUEL HEDGING ▪ In order to hedge its fuel expenses going forward, Aker BioMarine has purchased call options for 100% of its expected consumption during 2021 – 2024: ▪ 37,757 MT in 2021 at USD/MT of 378 ▪ 33,332 MT in 2022 at USD/MT of 412 ▪ 33,370 MT in 2023 at USD/MT of 550 ▪ 33,206 MT in 2024 at U
Slide 31: Certified for industry leadership on sustainable fisheries
AKER BIOMARINE CERTIFIED FOR INDUSTRY LEADERSHIP ON SUSTAINABLE FISHERIES – SUSTAINABILITY COMMITMENT EVIDENT FROM FOCUS ON GREEN INVESTMENTS ANTARCTIC KRILL FISHERY A-RATED: THE WORLD’S MOST AKER BIOMARINE IS TAILORING ITS 2030 TARGETS AND SUSTAINABLE REDUCTION FISHERY FOR 5 SUCCEEDING YEARS REPORT
Slide 32: Aker BioMarine
® AKER BIOMARINE