Aker Biomarine Asa · OSL:AKBM

Aker Biomarine Asa — Q2 2021 Earnings Presentation

30 slides from Aker Biomarine Asa's earnings presentation, Jul 14, 2021

  1. Slide 1: Q2 2021 Presentation

    Q2 2021 Presentation 14 July 2021 Matts Johansen, CEO Katrine Klaveness, CFO

  2. Slide 2: Important Notice

    Important Notice 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 of the Company or a

  3. Slide 3: Second quarter 2021 highlights

    Second quarter 2021 highlights  Revenues of USD 74 million (+3% from Q2 2020)  Adjusted EBITDA of USD 19.4 million (+10% from Q2 2020), with 26% (24%) Adjusted EBITDA margin in the quarter  Strong sales growth for Brands segment (+32% and +39% from Q2 2020 and Q1 2021, respectively). Kori continu

  4. Slide 4: Notable events in the quarter

    Notable events in the quarter April May June June Aker BioMarine shares Appointment of INVI™ protein Ordered an Unmanned transferred to Oslo Børs biotechnology and achieved regulatory Surface Vehicle to further main list from Euronext pharmaceutical executive approval for support digitalization of G

  5. Slide 5: Revenue and Adjusted EBITDA

    Revenue and Adjusted EBITDA REVENUE ADJUSTED EBITDA1 USDm USDm 76 74 72 70 27 21 50 19 18 7 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021  Sales in the Ingredients segment was 10% lower y/y, with strong sales for the Qrill  Adjusted EBITDA margin for the quarter w

  6. Slide 6: Ingredients segment - Operations

    Ingredients segment - Operations Offshore Onshore Bytt  Production of 13,920 MT in Q2 2021, down 15% and 29% compared with  Continued high operational performance at Houston factory Q2 2020 and Q1 2021, respectively  Annual krill oil production was up around 29% compared to same period  Limited

  7. Slide 7: Ingredients segment - Sales

    Ingredients segment - Sales Superba QRILL  Superba sales dropped 36% y/y in the quarter, mainly as a result of  Sales for the Qrill category up 17% y/y in the quarter lower South Korean sales and non-mass US sales  Positive sales development in the Norwegian salmon market  Signs that the mass ma

  8. Slide 8: Brands segment

    Brands segment Lang (Private label) Epion  Private label sales above current plan YTD as a result of post-Covid-19  Kori continues to grow POS figures quarter by quarter recovery in the US mass market  Important milestone with Sam’s Club launching Kori in physical stores  Krill as product catego

  9. Slide 9: Increased sale of Kori in the US with limited marketing spend

    Increased sale of Kori in the US with limited marketing spend UNITS SOLD AND MARKETING REACH  Continued sales growth  New milestone with launch of Kori distribution in physical Sam’s Club stores and in Harmon Health and Beauty – both on the shelves in Q3  Marketing and media impressions continued

  10. Slide 10: FINANCE

    FINANCE SNINVYWOId dav a

  11. Slide 11: Financial development in Q2 2021 versus Q2 2020

    Financial development in Q2 2021 versus Q2 2020 REVENUE ADJUSTED EBITDA1 ADJUSTED EBITDA MARGIN NET INTEREST-BEARING DEBT USDm USDm % USDm +3% +10% 26% -22% 72 74 26% 397 24% 19 18 311 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 1) Aker BioMarine evaluates the performance based o

  12. Slide 12: Ingredients segment

    Ingredients segment REVENUE ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN USDm USDm 56 80% 23 25 51 50 70% 46 18 20 60% 17 16 50% 15 30 40% 45% 40% 10 30% 32% 7 31% 20% 24% 5 10% 0% - Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021  Qrill category sales increased 17% co

  13. Slide 13: Production volumes on a rolling twelve-month basis

    Production volumes on a rolling twelve-month basis ONSHORE KRILL OIL EXTRACTION* (LTM)  Strong continued operational performance in MT Houston, with 29% higher production volume for the quarter compared to same period last year  Capacity improvement program on schedule to further increase producti

  14. Slide 14: Brands segment

    Brands segment REVENUE ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN USDm USDm 0,3 12 32 28 0,25 Kori launch cost All Kori expenses 10 excluded in included in 25 adj. EBITDA* adj. EBITDA* 23 0,2 8 20 15% 0,15 13% 12% 6 0,1 4 4 4 2 0,05 2 2% 2% 0 1 1 - Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 2020 Q3

  15. Slide 15: Profit and loss Q2 2021

    Profit and loss Q2 2021 Q2 2021 Q2 2020 YTD 2021 YTD 2020 2020 USD thousands Net sales (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) • Strong sales growth for Brands segment with a 32% increase compared to the same quarter last year, and 39% growth versus previous quarter, indicating rec

  16. Slide 16: Balance sheet at end of Q2 2021

    Balance sheet at end of Q2 2021 Q2-2021 Q2-2020 2020 USD thousands (Unaudited) (Unaudited) (Audited) Property, plant and equipment ASSETS  Include addition of USD 72m in relation to the delivery Antarctic Provider. 325 210 289 230 266 556 Include accelerated depreciation on La Manche and scrapping

  17. Slide 17: Cash flow Q2 2021

    Cash flow Q2 2021 Q2 2021 Q2 2020 YTD 2021 YTD 2020 2020 USD thousands Cash flow from operations (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)  Cash flow from operations was negative by USD 12.9 million in the quarter mainly driven by increased amount of customer receivables due to hi

  18. Slide 18: Company development and outlook

    COMPANY DEVELOPMENT AND OUTLOOK 18

  19. Slide 19: Recent developments in Aker BioMarine

    Recent developments in Aker BioMarine Good progress and value creating activities … while we have experienced certain in important areas… setbacks in others  Improved sales growth of Qrill Aqua  Superba volume shortfall in South Korea 2021, impacting short term growth  Important innovation develo

  20. Slide 20: Underlying growth in all markets, except Korea and non-mass market US

    Underlying growth in all markets, except Korea and non-mass market US Superba – sales volume Superba – Geographical split of sales 7% South Korea 26% 24% 13% Other US 16% 23% US mass market 34% 31% 24% 17% Europe 13% 13% 29% RoW 14% 16% 2017 2018 2019 2020 Q2-21 2021 2019 2020 YTD-21 LTM amb. Rest o

  21. Slide 21: Growth trends expected in line with previous ambitions, but currently less likely to catch up

    Growth trends expected in line with previous ambitions, but currently less likely to catch up shortfall from 2021 Volume development and projections Superba (Mt)  2021 sales volume ~25% lower than projected a year ago  Main reasons for the drop -20-25%  Large drop in sales to South Korea  Slower

  22. Slide 22: Krill harvesting in 2020 and 2021 significantly lower than expected

    Krill harvesting in 2020 and 2021 significantly lower than expected Average harvesting per production day Example from Antarctic Sea, MT per day Historical Forecast  2020 was a year with significant downtime for the total fleet due to technical issues  Fully-operational fleet in 2021  So far in 2

  23. Slide 23: Recent developments in harvesting and sales will impact 2021 figures

    Recent developments in harvesting and sales will impact 2021 figures Previous 2021 outlook New 2021 outlook Offshore production Expected at 60-70 KT Expected at 45-50 KT Onshore production The strong performance at Houston factory Unchanged continues Revenue Somewhat lower growth in 2021 than in 202

  24. Slide 24: Impacts on medium-term aspirations

    Impacts on medium-term aspirations  We expect strong sales and earnings growth in the coming years  However, based on the observed harvesting variations, and the recent Superba sales setback in South Korea, the company expects a somewhat later realization of its communicated 2024 aspiration  Aker

  25. Slide 25: APPENDIX

    Q AKER BIOMARINE APPENDIX

  26. Slide 26: Operating leverage and unit cost

    Operating leverage and unit cost Realizing scale effects in supply chain a key driver for results OFFSHORE VOLUME & UNIT COST ONSHORE VOLUME & UNIT COST USD/MT* USD/kg* MT MT 2015 2016 2017 2018 2019 2020 2021E 2015 2016 2017 2018 2019 2020 2021E 26 * Unit costs excludes asset depreciation costs. Fi

  27. Slide 27: Revenue per product

    Revenue per product REVENUE PER PRODUCT (EXCLUDING ELIMINATIONS BETWEEEN INGREDIENTS AND BRANDS1)) USDm 4,5 3,7 23,7 32,3 21,2 24,5 25,7 16,6 Q2 2020 Q2 2021 Krill oil Qrill Aqua Brands Other* * Other includes Asta, Pet and QHP 27

  28. Slide 28: EBITDA adjustments

    EBITDA adjustments Q2 2021 EBITDA adjustments Q2 2020 EBITDA adjustments USDm USDm 0,3 0,9 5,6 19,4 (1.1) 19,0 17,6 12,2 EBITDA Transaction-related Adjusted EBITDA EBITDA Juvel Kori Launch Transaction Adjusted costs EBITDA  Transaction related costs: During Q2-21 the Company identified USD 0.3m as

  29. Slide 29: P&L reconciliation

    P&L reconciliation USDm Q2 2021 Q2 2020 Ingredients 45.7 50.7 Brands 32.3 24.5 Eliminations (3.7) (3.1) Reported revenues 74.3 72.2 EBITDA reconciliation USDm Q2 2021 Q2 2020 Ingredients 17.9 16.5 Brands 0.6 (1.1) Eliminations 0.5 (3.2) Reported EBITDA 19.0 12.2 Adjustments 0.3 5.4 Adjusted EBITDA 1

  30. Slide 30: Aker BioMarine has hedged 100% of fuel demand for 2021-2024

    Aker BioMarine has hedged 100% of fuel demand for 2021-2024 PREDICTABILITY IN LARGEST COST DRIVER CALL OPTIONS IN THE MONEY AS PER END Q1’21 800  In mid 2020 Aker BioMarine locked in 100% of estimated 700 2021-2024 fuel demand 600 500 Call strike +  The hedging strategy was motivated by low fuel p

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