Balchem Corporation · NASDAQ:BCPC
Balchem — Balchem Webinar (December 2020)
17 slides from Balchem's conference presentation, Dec 1, 2020
Slide 1: Transforming a Black Swan to a Phoenix in the Global Dairy Industry
Balchem Webinar 12/1/20 TRANSFORMING A BLACK SWAN TO A PHOENIX IN THE GLOBAL DAIRY INDUSTRY Dr. David M. Kohl Professor Emeritus, Agricultural and Applied Economics Member of Academic Hall of Fame, College of Agriculture & Life Sciences Virginia Tech, Blacksburg, VA (540) 961-2094 (Alicia Morris) |
Slide 2: Black Swan Progression - Dirty Bird and Angry Bird
Balchem Webinar 12/1/20 Black Swan Progression - Dirty Bird Dirty Bird or Phase I – Splash (March 1 to May 1, 2020) Needs: § job losses § time to absorb information § reality check § preventative health § consumer shutdown, back to the basics § 40% consumer based economy § 0-25% of sales § global ec
Slide 3: Black Swan Progression - Phoenix; Global Macro Economic Risk
Balchem Webinar 12/1/20 Black Swan Progression - Phoenix “Mythical Bird” Phoenix or Phase III – Ripple Needs: (January 1, 2021 - 2022 & Beyond) § creative leadership § commitment to move forward driven by young § innovation leadership § adaptation § new business models § new models for success § que
Slide 4: Global Macro Economic Risk (2); Rising of Asia
Balchem Webinar 12/1/20 Global Macro Economic Risk (2) § disjointed U.S. & global recovery § 90% economy § 50-75% economy § 125% economy § trade agreement uncertainty § Australia vs. China § rich nations vs. China § Belt & Road Initiative, medical innovation path § central banks/government supports
Slide 5: Global Trade Perspectives
Balchem Webinar 12/1/20 Trade Paradigm Shifts Globalization Vs. Regionalization China’s Dual Circulation Strategy Asia Regional North American Europe Regional Integration Regional Integration Integration Asian Region- Canada E. Europe Japan, S. Korea Germany United France China States Great Britain
Slide 6: Grain Industry Radar Screen; Livestock & Other
Balchem Webinar 12/1/20 Grain Industry Radar Screen for U.S. & Abroad § economic health of protein sector § economic health of trading partners § weather § value of the dollar § consumer trends § trade issues § ethanol 11 11 Livestock & Other § access to markets & marketing changes § concentration,
Slide 7: U.S. Economy; Mega Trends on the Radar Screen
Balchem Webinar 12/1/20 U.S. Economy 2020 Pandemic § sudden impact/shock disruption § economic behavioral changes/basics § no pattern of corrective action- health § three D’s: Depth, Diffusion & Duration § Nike swoosh shaped recession with a jagged tail “w” § size 6 or size 14-18? § deeper global re
Slide 8: Median Net Farm Income - Dairy
Balchem Webinar 12/1/20 COVID-19 The Black Swan Disruptor- Positives for Agriculture § importance of a diversified safe food, fiber & fuel source- basics of life § reassurance of transparency in where food is produced, processed & distributed § healthy soil & water § plants, humans, animals & enviro
Slide 9: Median Net Farm Income - All, High 20% and Low 20%
Balchem Webinar 12/1/20 Median Net Farm Income- All, High 20% and Low 20% 2019 Update: High 20%= $236,000 Low 20%= $ -49,000 17 17 Median Net Farm Income-2019 Dairy Farms 18 18 9
Slide 10: Median Net Farm Income 2019 Dairy Farms by Herd Size
Balchem Webinar 12/1/20 Median Net Farm Income, 2019 Dairy Farms by Herd Size 19 19 High 20% Characteristics § moderate financial leverage § high Business IQ § strong working capital § strong production and operational efficiency § strong earns and turns 20 20 10
Slide 11: Low 20% Characteristics; Management Mindsets for the 2020s
Balchem Webinar 12/1/20 Low 20% Characteristics § higher equity § refinanced, restructured financial leverage § high government payments to net income § weak production and operational efficiency § lower Business IQ § lower liquidity 21 21 22 Management Mindsets for the 2020s 22 11
Slide 12: Aligning with Mindsets; Management Assessment
Balchem Webinar 12/1/20 Aligning with Mindsets Producer A Producer B § How do I compare? § Will a lender finance me? § What are others doing? § Will I survive for another § think longer term & what is year? on the horizon § often a know it all or victim School vs. Real World Perspective: In school,
Slide 13: Business IQ: Management Factors
Balchem Webinar 12/1/20 Business IQ: Management Factors Critical Questions for Crucial Conversations Farmer Checklist Your Score Green (3 points or 4*) Yellow (2 points) Red (1 point) 1. Knows cost of production Written In head No idea 2. Knows cost of production by enterprise Written* In head No id
Slide 14: Financial Ratios Across Business IQ Percentiles
Balchem Webinar 12/1/20 How Can Team Members Use Business IQ as a Tool for Producers? § screener for attitude to improve § each family member, business partner, spouse complete the Business IQ separately § assists in prioritizing improvements § communication tool- internal and external to team of ad
Slide 15: Financial Ratios Across Business IQ Percentiles
Balchem Webinar 12/1/20 Financial Ratios Across Business IQ Percentiles Return on Assets 3.16% 2.25% 0.94% 0.173% 0.45% -0.20% TOP 1/3 MIDDLE 1/3 BOTTOM 1/3 Median Mean Preliminary Study of Kentucky Farm Business Management Association data - Ben Isaacs, Undergraduate Research Study at University of
Slide 16: Four Pillars of the Business Model of the Future
Balchem Webinar 12/1/20 Four Pillars of the Business Model of the Future Four Pillars: Resilient Entrepreneurial / Innovative § know cost of production § “people first” business § invest in people § marketing & risk management program § align with rapidly changing marketplace § capital/equity borrow
Slide 17: Perspectives for the 21st Century; Quotes for the 2020s
Balchem Webinar 12/1/20 Perspectives for the 21st Century § 20th century - one of physics, 21st century- one of biology & bioshocks § meshing of bio engineering information “make the complex simple” – the napkin approach § human health on your wrist make high tech more high touch § 50% of world buyi