Slide 1: Investor Presentation Q1 2024
Investor Presentation Q1 2024 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: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliations 3
Slide 4: Balchem Corporation
Balchem Corporation Balchem develops, manufactures, and markets specialty ingredients that help make the world a healthier place Corporate Headquarters 21 Manufacturing Sites 7 Technology Centers 7 Regional Offices At a Glance Three Business Segments – 2023 Revenue • Founded in 1967 Human Nutrition
Slide 5: Executive Leadership
Executive Leadership Ted Harris | Chairman, President, 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 Harva
Slide 6: Balchem's Value Proposition
Balchem’s Value Proposition Value to our Customers Enabling Technologies • High efficacy nutrients essential for life • Enhanced animal health and feed productivity Choline • Functional ingredient systems formulations and application expertise • Crop protection and yield improvement Encapsulation Co
Slide 7: Segment Overview
Segment Overview Leveraging Solutions Across Segments Segment Markets Served Solutions 14% Human Nutrition • Nutritional Supplements • Microencapsulation & Health • Food and Beverage • Choline, & Vitamin K2 >99% 26% Nutrition & Health • Infant & Toddler Formula • Chelated Minerals (% of sales) 60% •
Slide 8: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 8
Slide 9: Our vision, mission and core values
Our vision Our mission is clear – to make the world a healthier place. is focused – to build a global nutrition and health company delivering trusted, innovative and science-based solutions to our customers. Our Core Values Always doing Thinking big Collaborating and Playing Staying focused the righ
Slide 10: How Do We Make the World a Healthier Place?
How Do We Make the World a Healthier Place? Improve nutrient bioavailability Help farmers grow Provide food, beverage, and dietary Power the day with plant & for animals, reducing feed crops that are hardier supplement ingredients that support animal proteins, healthy inputs and land required to whe
Slide 11: 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 12: Growth Platforms
Growth Platforms Multiple platforms to drive growth Human Nutrition & Health Animal Nutrition & Health Specialty Products • Realize Choline and Vitamin K2 market • Rumen-protected nutrients for Dairy • Plant micronutrients penetration and potential • Reashure® penetration application • Transition fr
Slide 13: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 13
Slide 14: Q1 2024 Financial Summary
Q1 2024 Financial Summary Profitability growth and margin expansion Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 3.1% 8.0% 9.8% 9.1% 232.5 239.7 60.9 33.6 1.03 56.4 30.6 0.94 1Q23 1Q24 1Q23 1Q24 1Q23 1Q24 1Q23 1Q24 • Growth driven by strong • Adj. EBITDA growth drive
Slide 15: Historical Financials
Historical Financials Consistent performance over the years SALES ($M) ADJ. EBITDA ($M) +7.5% 942 922 +7.7% 231 CAGR CAGR 216 799 190 704 174 644 644 159 160 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 ADJ. NET EARNINGS ($M) ADJ. EPS ($/share) +5.8% 131 130 +5.8% 4.03 4.00 CAGR CAGR
Slide 16: Historical Financials by Segment
Historical Financials Solid contribution from all reporting segments over the years SALES ($M) 942 ADJ. EBITDA ($M) 922 231 22 7 216 131 126 2 799 47 12 190 0 44 704 175 117 644 644 8 238 159 160 42 262 39 26 104 5 51 10 39 92 47 76 227 39 32 37 192 39 176 178 33 33 146 527 551 123 443 112 400 97 34
Slide 17: Balchem's Capital Allocation Strategy
Balchem’s Capital Allocation Strategy Capital allocation Priorities Annual Cash Flow and Net Debt Leverage Ratio 2.3 • Support organic growth opportunities 200 180 2.5 1.6 1.7 2.0 • Augment growth with targeted M&A 160 140 1.5 1.2 1.1 1.5 1.1 • Diligent debt service 120 100 0.6 0.5 1.0 184 • Continu
Slide 18: Free Cash Flow Conversion
Free Cash Flow Conversion Translating profits into cash 140% Free Cash Flow as % of Non-GAAP Net Earnings 120% 116% 115% 109% 107% 105% 102% 102% 100% 93% 79% 80% 60% 69% 40% 20% 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1 '24 TTM* * TTM – Trailing Twelve Months 18
Slide 19: Recent Acquisitions
Recent Acquisitions Augmenting organic growth with targeted acquisitions close to core Albion Minerals Bioscreen Kappa Bioscience • Adjacent product • Geographic expansion • Portfolio extension in high offering in high growth and processing growth specialty vitamin market technology market • Chelate
Slide 20: Dividends
Dividends Consistent dividend policy ($/share) • Annual double-digit dividend growth for the last decade 0.79 • Consistency in execution 0.71 0.64 +11.8% 0.58 CAGR 0.52 0.47 0.42 0.38 0.34 0.30 0.26 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 20
Slide 21: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 21
Slide 22: Sustainability at Balchem
Sustainability at Balchem Our Sustainability Objectives & Framework Provide innovative solutions for the health & nutritional needs of the world. Company Making the world People Planet Profit a healthier place Operate with excellence as strong Culture stewards of our employees, customers, shareholde
Slide 23: Sustainability At Balchem: Supporting a future for all
Sustainability At Balchem Supporting a future for all • As a signatory to the United Nations (UN) Global Compact, Balchem supports the Ten Global Principles in the areas of human rights, labor, environment and anti-corruption. • We are committed to advancing the broad goals of the UN across our area
Slide 24: Our 2030 Sustainability Goals and Priorities
Our 2030 Sustainability Goals and Priorities 2030 Sustainability Goals Our Priority Sustainable Development Goals Balchem commits to reducing our GHG emissions use Learn more by 25% about our sustainability programs Balchem commits to reducing our global water use by 25% More than 70% of our product
Slide 25: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 25
Slide 26: Balchem
Balchem A global nutrition and health company delivering trusted, innovative and science-based solutions to our customers • Leading positions in attractive markets • Creating new demand through innovation • Strong financial performance, delivering healthy margins and cash flows available for reinves
Slide 27: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 27
Slide 28: Non-GAAP Financial Information
Non-GAAP Financial Information Non-GAAP Financial Information In addition to disclosing financial results in accordance with United States (U.S.) generally accepted accounting principles (GAAP), this earnings release contains non- GAAP financial measures that we believe are helpful in understanding
Slide 29: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued Table 1 Reconciliation of Non-GAAP Measures to GAAP (Dollars in thousands, except per share data) (unaudited) Three Months Ended March 31, 2024 2023 Reconciliation of adjusted gross margin GAAP gross margin $ 81,514 $ 73,170 Inventory valuation adjustment (
Slide 30: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued Table 2 (unaudited) Reconciliation of GAAP Net Earnings to EBITDA and to Adjusted EBITDA (Dollars in thousands) 30
Slide 31: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued Table 3 (unaudited) Reconciliation of GAAP Effective Income Tax Rate to Non-GAAP Effective Income Tax Rate (Dollars in thousands) Table 4 (unaudited) Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Dollars in thousands) Three
Slide 32: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued (1) Inventory valuation adjustment: Business combination accounting principles require us to measure acquired inventory at fair value. The fair value of inventory reflects the acquired company's cost of manufacturing plus a portion of the expected profit ma
Slide 33: Thank you
“SSI balchem: e.° Solve Today. Shape Tomorrow. Thank you