Balchem Corporation · NASDAQ:BCPC
Balchem — CJS Securities 20th Annual Investor Conference 2020
22 slides from Balchem's conference presentation, Jan 8, 2020
Slide 1: CJS Securities Investor Conference Presentation
CJS Securities Investor Conference Presentation January 8, 2020 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 1,200 Employees • 21 Manufacturing Sites: - 17 in North America - 3 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 HUMAN NUTRITION & HEALTH ANIMAL NUTRITION & HEALTH Markets Served Solutions Markets Served Solutions • Nutritional • Micro-encapsulation • Dairy • Micro-encapsulation Supplements • Choline • Poultry and Swine • Choline • Food and Beverage • Chelated Minerals • Companion Animal •
Slide 6: Vision and Mission
Vision and Mission Our vision is clear; to make the world a healthier place Our mission is 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 6
Slide 7: Strategic Focus
Strategic Focus • Building Global Human and Animal Nutrition & Health Business Segments – Delivering trusted, innovative, and science based solutions • Strengthening Positions in Attractive, Growing Markets – Building scale, adding adjacent capabilities, expanding market and geographic reach, broade
Slide 8: Balchem at a Glance
Balchem at a Glance HUMAN NUTRITION & HEALTH ANIMAL NUTRITION & HEALTH • Leveraging Synergies Across Segment • ReaShure® Penetration • FDA RDI for Choline and Expanded ‒ NRC Recommendation on Choline Choline Awareness / Science • Rumen Protected Nutrients for Dairy • Mineral Nutrition ‒ Next Generat
Slide 9: Growth Vectors
Growth Vectors Growth over 5 years Key Platforms Driving Growth Above Market • Choline Nutrition for Mother & Child, Adult Cognition, Liver Health, Diabetes Complications • Mineral Nutrition for Mother & Child, Adult Cognition, Energy & Fitness, Diabetes Complications • ReaShure® Penetration Strateg
Slide 10: 2020 Market Outlook
2020 Market Outlook Market dynamics for key markets served by Balchem External Metrics 2019 Comments 2020 Food and • GDP • Food and Bev. Demand relatively stable Beverage • Food and Bev. • Nutritional beverage/bar markets growing faster growth Supplements • Vitamin/mineral • Personalized nutrition o
Slide 11: 2020 Potential Challenges
2020 Potential Challenges • African Swine Fever – Potential spread from Asia into Western Europe and U.S. could have consequences on the protein supply chain and demand – Impact may be negative or positive depending on market and consumer reactions and behaviors • Medical Device Sterilization Regula
Slide 12: Capital Allocation Strategy and M&A
Capital Allocation Strategy and M&A Capital Allocation Strategy Annual Cash Flow ($M) and • Prioritize organic growth investments Debt Leverage Ratio 2.3x 1.0x • Augment organic growth with targeted 0.6x 131 1.5x 1.6x 1.2x M&A 111 119 108 104 • Pay Down Debt 0.0 Debt Leverage 85 • Continue to pay an
Slide 13: Recent Acquisitions
Recent Acquisitions Sales Rationale Key Offering Zumbro River ~$30M Market consolidation and High protein extrusion and Brands expanded product offering agglomeration December 2019 Chemogas ~$30M Adds leadership position in Ethylene Oxide re- May 2019 Europe to already existing packaging and distrib
Slide 14: Five Year Financial Performance
Five Year Financial Performance FY 2018 FY 2013 CAGR Revenue 643.7 337.2 13.8% Gross Margin 204.3 97.4 16.0% As a % of Sales 31.7% 28.9% Operating Income 107.8 65.6 10.4% Net Earnings 78.6 44.9 11.9% Earnings Per Share 2.42 1.45 10.8% Adjusted EBITDA 159.9 79.9 14.9% As a % of Sales 24.8% 23.7% Adju
Slide 15: Free Cash Flow Conversion
Free Cash Flow Conversion 130% Free Cash Flow as % of Non-GAAP Net Income 120% 110% 105% 105% 102% 102% 100% 90% 79% 80% 70% 60% 50% 2014 2015 2016 2017 2018 Free Cash Flow Conversion Solid Free Cash Flow Conversion, Turning Profits Into Cash 15
Slide 16: Summary / Wrap Up
Summary / Wrap Up • Proven Track Record of Growth • Leading Positions in Attractive Markets • Creating New Demand Through Innovation • Delivering Healthy Margins • Generating Cash Flow from Operations Available for Reinvestment Reasons To Invest 16
Slide 17: Balchem: Solve Today. Shape Tomorrow.
. balchem Solve Today. Shape Tomorrow. 17
Slide 18: Appendix
Appendix “= balchem 18
Slide 19: Five Year Financial Performance
Five Year Financial Performance FY 2018 FY 2013 CAGR Revenue 643.7 337.2 13.8% Gross Margin 204.3 97.4 16.0% As a % of Sales 31.7% 28.9% Operating Income 107.8 65.6 10.4% Net Earnings 78.6 44.9 11.9% Earnings Per Share 2.42 1.45 10.8% Adjusted EBITDA 159.9 79.9 14.9% As a % of Sales 24.8% 23.7% Adju
Slide 20: FY 2018 Financial Performance
FY 2018 Financial Performance FY 2018 FY 2017 Change Revenue 643.7 594.8 8.2% Gross Margin 204.3 189.0 8.1% As a % of Sales 31.7% 31.8% Operating Income 107.8 97.3 10.8% Net Earnings 78.6 90.1 -12.8% Earnings Per Share 2.42 2.79 -13.3% Adjusted EBITDA 159.9 147.8 8.2% As a % of Sales 24.8% 24.9% Adj
Slide 21: Q3 2019 Financial Performance
Q3 2019 Financial Performance Q3 2019 Q3 2018 Change Revenue 158.6 155.0 2.3% Gross Margin 54.0 48.0 12.5% As a % of Sales 34.1% 31.0% Operating Income 26.0 25.5 2.0% Net Earnings 20.7 19.2 7.6% Earnings Per Share 0.64 0.59 8.5% Adjusted EBITDA 40.4 38.4 5.0% As a % of Sales 25.5% 24.8% Adjusted Ear
Slide 22: Key Financial Metrics
Key Financial Metrics Q1 Q2 Q3 Q4 $800 Revenue ($M) $110 Net Income ($M) $100 $700 644 90 $90 595 42 $600 552 553 164 $80 79 541 159 $500 163 133 141 $70 65* 20 60 155 159 $60 53 56 $400 140 151 16 19 21 160 139 $50 19 16 $300 164 162 $40 14 16 135 147 14 20 20 139 $200 $30 15 17 132 15 161 $20 14 1
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