Slide 1: Investor Presentation Q3 2023
Investor Presentation Q3 2023 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 – 2022 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 and Vitamin K2 98% Nutrition & Health • Infant and Toddler Formula • Chelated Minerals 56% 28% (% of sales)
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
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: Q3 2023 Financial Summary
Q3 2023 Financial Summary Solid quarter driven by margin improvement Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) -5.9% 11.4% 4.3% 4.0% 244.3 229.9 59.9 33.8 1.00 1.04 32.4 53.8 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 3Q22 3Q23 • Lower volumes partially offset • Favorable port
Slide 15: Q3 Year to Date 2023 Financial Summary
Q3 Year to Date 2023 Financial Summary Solid year to date performance in challenging environment Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) -2.3% 6.9% 1.4% 1.3% 709.8 693.7 175.1 163.8 100.2 98.8 3.09 3.05 3Q YTD 22 3Q YTD 23 3Q YTD 22 3Q YTD 23 3Q YTD 22 3Q YTD 23
Slide 16: Full Year 2022 Financial Summary
Full Year 2022 Financial Summary Another strong year of growth Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 17.9% 13.8% 11.9% 12.9% 942.4 216.1 130.5 4.03 799.0 189.8 116.6 3.57 2021 2022 2021 2022 2021 2022 2021 2022 • Double-digit growth in all • Driven by sales gr
Slide 17: Historical Financials
Historical Financials Consistent performance over the years SALES ($M) ADJ. EBITDA ($M) 216 942 +9.6% +7.9% CAGR CAGR 190 799 174 704 159 160 644 644 148 595 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 ADJ. NET EARNINGS ($M) ADJ. EPS ($/share) +9.8% 131 +9.8% 4.03 CAGR CAGR 117 3.57
Slide 18: Historical Financials by Segment
Historical Financials Solid contribution from all reporting segments SALES ($M) 942 ADJ. EBITDA ($M) 22 216 131 2 799 12 190 0 44 704 694 175 175 117 644 644 8 6 159 160 42 104 262 595 26 95 148 5 35 51 10 39 92 7 47 48 227 76 39 32 37 73 192 180 32 31 39 176 178 158 33 33 29 527 123 443 112 110 400
Slide 19: 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 180 2.5 160 1.7 1.6 2.0 • Augment growth with targeted M&A 140 1.5 1.2 1.1 1.3 1.5 120 • Diligent debt service 100 0.6 0.5 1.0 80 161 158 • Cont
Slide 20: Free Cash Flow Conversion
Free Cash Flow Conversion Translating profits into cash, 2022 impacted by significant cost inflation 140% Free Cash Flow as % of Non-GAAP Net Earnings 120% 109% 107% 105% 102% 102% 100% 93% 96% 79% 80% 60% 69% 40% 20% 0% 2015 2016 2017 2018 2019 2020 2021 2022 Q3'23 YTD 20
Slide 21: 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 22: Dividends
Dividends Consistent dividend policy ($/share) • Annual double-digit dividend growth for the last decade 0.71 • Consistency in execution 0.64 0.58 +12.4% 0.52 CAGR 0.47 0.42 0.38 0.34 0.30 0.26 0.22 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 22
Slide 23: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 23
Slide 24: 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 25: 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 are
Slide 26: 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 by 25% Balchem commits to reducing our Learn more global water use about our by 25% sustainability programs 26
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: 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 29: Agenda
• Balchem Overview Agenda • Vision and Strategic Focus • Financial Performance & Capital Allocation • Corporate Social Responsibility • Wrap Up • Appendix − GAAP to Non-GAAP reconciliation 29
Slide 30: 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
Slide 31: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 31
Slide 32: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 32
Slide 33: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 33
Slide 34: 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 35: Thank you
“SSI balchem: e.° Solve Today. Shape Tomorrow. Thank you