Balchem Corporation · NASDAQ:BCPC
Balchem — Q1 2021 Earnings Presentation
29 slides from Balchem's earnings presentation, Apr 30, 2021
Slide 1: Investor Presentation Q1 2021
Investor Presentation Q1 2021 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 1,400 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 OTHER SPECIALTY PRODUCTS 15% 99% HUMAN NUTRITION & HEALTH Nutrition & Health (% of FY 2020 sales) 57% 27% ANIMAL NUTRITION & HEALTH 99% Of Revenues Focused On Nutrition And Health 5
Slide 6: Segment Overview
Segment Overview Segment Markets Served Solutions 15% Human Nutrition • Nutritional Supplements • Microencapsulation 99% & Health • Food and Beverage • Choline Nutrition & Health (% of sales) 57% • Infant & Toddler Formula • Chelated Minerals 27% • Organic Cereal • Powder, Flavor, & Cereal Systems A
Slide 7: 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 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 • FDA RDI for Choline and Expanded Choline • NRC Recommendation on Choline Awareness / Science • Rumen Protecte
Slide 10: COVID-19 Pandemic Response Update
COVID-19 Pandemic Response Update • Our focus has been on employee safety first, keeping our manufacturing sites operational, and satisfying customer needs. To date; – all of our manufacturing sites are operating at near normal conditions, – our research and development teams continue to advance our
Slide 11: Q1 2021 Financial Summary
Q1 2021 Financial Summary Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 6.4% 7.9% 7.6% 7.1% 185.7 45.7 26.4 28.4 174.4 42.4 0.81 0.87 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 • Strong Growth YoY • Driven by Sales growth • Higher tax rate in Q1’21 • Growth in earnings •
Slide 12: Historical Financials
Historical Financials SALES ($M) ADJ. EBITDA ($M) 704 174 644 644 159 160 595 149 148 552 553 140 186 46 2015 2016 2017 2018 2019 2020 YTD 2021 2015 2016 2017 2018 2019 2020 YTD 2021 ADJ. NET EARNINGS ($M) ADJ. EPS ($/share) 3.32 108 3.19 104 3.01 98 2.51 2.52 2.53 80 80 82 28 0.87 2015 2016 2017 20
Slide 13: Segment Financials
Segment Financials SALES ($M) ADJ. EBITDA ($M) 704 8 174 644 644 104 159 160 595 26 51 149 148 5 39 10 552 553 48 92 140 3 76 7 Other 54 25 Other 7 39 73 32 70 192 32 SP 54 SP 28 32 39 176 178 158 33 33 161 37 166 29 35 ANH ANH 186 46 400 97 341 347 28 316 80 84 83 10 297 78 278 51 71 8 HNH HNH 105
Slide 14: Capital Allocation Strategy and M&A
Capital Allocation Strategy and M&A Capital Allocation Strategy Annual Cash Flow ($M) and Debt Leverage Ratio • Prioritize organic growth investments 0.5x • Augment organic growth with targeted M&A 2.3x 1.1x 0.6x 150 • Pay down debt 1.5x 1.6x 1.2x 124 119 • Continue to pay and grow dividend 108 111
Slide 15: Recent Acquisitions
Recent Acquisitions Rationale Key Offering Zumbro River Brand Market consolidation and expanded High protein extrusion and December 2019 product offering agglomeration Chemogas Adds leadership position in Europe to Ethylene Oxide re-packaging and May 2019 already existing U.S. leadership distributio
Slide 16: Free Cash Flow Conversion
Free Cash Flow Conversion 130% Free Cash Flow as % of Non-GAAP Net Earnings 120% 121% 110% 105% 109% 102% 102% 100% 93% 90% 79% 80% 70% 60% 50% 2015 2016 2017 2018 2019 2020 2021 YTD Free Cash Flow Conversion Solid Free Cash Flow Conversion, Turning Profits Into Cash 16
Slide 17: Dividends
Dividends • Annual double-digit dividend growth for the last decade 0.58 • Consistency in execution 0.52 0.47 0.42 0.38 0.34 0.30 0.26 0.22 0.18 0.15 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ($/share) Consistent Dividend Policy 17
Slide 18: 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 19: 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 20: Measuring Our Progress
Measuring Our Progress People Planet Profit 10.8 billion – number of animals reached per year 28.2% – revenue from products developed in the past 1.4 billion – number of people reached per year five years 3.75 GJ/ton – energy intensity (GJ of energy per ton 1.04 – total recordable injury rate (TRIR)
Slide 21: What Makes Balchem Unique?
What Makes Balchem Unique? Proven Track Record Of Growth Protected Positions ✓ Proven ability to grow in in all economic ✓ Consolidated position in Choline conditions ✓ Premium branded products and patent ✓ Steady and thoughtful capital allocation portfolio ✓ Continued innovation ✓ EPA Registrations
Slide 22: 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 22
Slide 23: Confidential
- baichem * Solve Today. Shape Tomorrow. Confidential 23
Slide 24: Appendix
Appendix 24
Slide 25: 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 a
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Slide 29: Non-GAAP Financial Information - Continued
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