Balchem Corporation · NASDAQ:BCPC
Balchem — Q3 2021 Earnings Presentation
28 slides from Balchem's earnings presentation, Oct 29, 2021
Slide 1: Investor Presentation Q3 2021
Investor Presentation Q3 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 1,300 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 & 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: Q3 2021 Financial Summary
Q3 2021 Financial Summary Sales Adj. EBITDA Adj. Net Earnings Adj. EPS ($M) ($M) ($M) ($/share) 13.0% 8.8% 11.3% 10.9% 197.9 0.92 48.3 30.0 0.83 175.1 44.4 26.9 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 3Q20 3Q21 • Strong growth in all three • Driven by Sales growth • Driven by Sales growth • Growth in
Slide 11: Historical Financials
Historical Financials SALES ($M) ADJ. EBITDA ($M) 174 704 159 160 644 644 149 148 595 586 144 140 552 553 2015 2016 2017 2018 2019 2020 3Q YTD 2015 2016 2017 2018 2019 2020 3Q YTD ADJ. NET EARNINGS ($M) ADJ. EPS ($/share) 3.32 108 3.19 104 98 3.01 89 2.72 80 80 82 2.51 2.52 2.53 2015 2016 2017 2018
Slide 12: Segment Financials
Segment Financials SALES ($M) ADJ. EBITDA ($M) 704 8 175 644 644 104 595 26 159 160 51 586 552 553 7 149 148 5 39 48 92 10 144 76 140 3 25 7 Other 54 73 90 Other 7 39 70 192 32 32 33 54 SP 28 32 176 178 162 SP 39 158 161 33 33 26 166 ANH 37 29 ANH 35 400 341 347 327 97 297 316 84 83 87 278 78 80 71
Slide 13: Capital Allocation Strategy and M&A
Capital Allocation Strategy and M&A Capital Allocation Strategy Annual Cash Flow ($M) and Debt Leverage Ratio • Prioritize organic growth investments 0.5x • Augment organic growth with targeted M&A 2.3x 1.1x 0.6x 150 • Pay down debt 1.5x 1.6x 1.2x 0.1x 124 119 • Continue to pay and grow dividend 108
Slide 14: Recent Acquisitions
Recent Acquisitions Rationale Key Offering Zumbro River Brand Market consolidation and expanded High protein extrusion and December 2019 product offering agglomeration Chemogas Adds leadership position in Europe to Ethylene Oxide re-packaging and May 2019 already existing U.S. leadership distributio
Slide 15: Free Cash Flow Conversion
Free Cash Flow Conversion 130% Free Cash Flow as % of Non-GAAP Net Earnings 120% 109% 110% 105% 102% 102% 106% 100% 93% 90% 79% 80% 70% 60% 50% 2015 2016 2017 2018 2019 2020 3Q YTD Free Cash Flow Conversion Solid Free Cash Flow Conversion, Turning Profits Into Cash 15
Slide 16: Dividends
Dividends • Annual double-digit dividend growth for the last decade 0.58 • Consistency in execution 0.52 0.47 0.42 0.38 0.34 0.30 0.26 0.22 0.18 0.15 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ($/share) Consistent Dividend Policy 16
Slide 17: 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 18: 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 19: 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 20: What Makes Balchem Unique?
What Makes Balchem Unique? Proven Track Record Of Growth Protected Positions ✓ Proven ability to grow in all economic ✓ Consolidated position in Choline conditions ✓ Premium branded products and patent ✓ Steady and thoughtful capital allocation portfolio ✓ Continued innovation ✓ EPA Registrations fo
Slide 21: 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 21
Slide 22: Solve Today. Shape Tomorrow.
- baichem * Solve Today. Shape Tomorrow. Confidential 22
Slide 23: Appendix
Appendix 23
Slide 24: Non-GAAP Financial Information
Non-GAAP Financial Information 24
Slide 25: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 25
Slide 26: Non-GAAP Financial Information - Continued
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Slide 27: Non-GAAP Financial Information - Continued
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Slide 28: Non-GAAP Financial Information - Continued
Non-GAAP Financial Information - Continued 28