Aker Biomarine Asa · OSL:AKBM
Aker Biomarine Asa — Q3 2020 Earnings Presentation
29 slides from Aker Biomarine Asa's earnings presentation, Oct 30, 2020
Slide 1: Company Presentation November 2020 - Q3 2020 Presentation
COMPANY PRESENTATION NOVEMBER 2020 Q3 2020 PRESENTATION Matts Johansen, CEO Katrine Klaveness, CFO 30 OCTOBER 2020 1
Slide 2: Important Notice
Important Notice This presentation has been prepared by Aker BioMarine AS (the "Company"). The presentation does not constitute or form part of, and should not be construed as, an offer, solicitat ion or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company or a
Slide 3: Our story in a nutshell
Our story in a nutshell 246 #1 154 125 2017 2018 2019 Global krill harvester and High growth top line Best-in-class human, aqua, krill oil producer trajectory pet ingredients Vertically integrated business Sustainability at the High growth branded and model core private label supplements 3
Slide 4: We harbour ambitious growth and value creation aspirations
We harbour ambitious growth and value creation aspirations… Target positioning 2019 2024 Revenue ($mm) * Strong growth profile 246 >700 Significant profitability expansion, targeting USD 200m EBITDA by 2024 EBITDA margin 22% 30% Undisputed market leader with unsurpassed scale 53 EBITDA ($mm) 200 Enh
Slide 5: Sustainable growth: USD200m EBITDA objective and value creation framework
…with our 5 year objective to build a USD200m EBITDA company underpinned by a detailed value creation framework 5-year aspiration plan to lift earnings Main value creation pillars Adj. EBITDA1 (USDm) 1 2 ▪ Expand offshore harvesting capacity 1.8x over the next few years and lower logistic cost with
Slide 6: Sustainability is at the core of our way of doing business
Sustainability is at the core and central to our way of doing business 1 Sustainability framework anchored in UN SDGs Dedicated to improving Pioneering sustainable Ingredients for more Doing more and better human health fisheries sustainable aquaculture with less Contributing to science and innovati
Slide 7: UN Sustainability Development Goals form the basis of our framework
UN Sustainability Development Goals form the basis of our framework… 1 9000 studies document the effects of Omega-3’s SPENT ON SAVED1 BY OMEGA 3’S SOCIETY AKBM 60 clinical studies ROLE HEART LUNG DIABETES 15 PHD’s Dedicated to OMEGA-3 helps prevent Contributing to science, Impact for improving lifes
Slide 8: Key focus on preserving human and planetary health
…with key focus on preserving human and planetary health 1 Krill, the worlds largest Biomass Greenhouse gas intensity Increase in growth (t co2e / t edible protein) (grams) 337 Regular feed Qrill Aqua 42 58 = 10 +18% 5 Krill Salmon Poultry Pork Beef 325 million extra meals Ingredient for a Reducing
Slide 9: Our vertically integrated business model enables significant scale and flexibility
Our vertically integrated business model enables significant scale and 2 flexibility… Harvesting Ingredient production R&D Krill oil production Sales & marketing Distribution & brands 60-70% ofkrillglobal catch 30% CO emissions reduction in 2 ~160 published studies >80% ofoil global krill production
Slide 10: Significant scale, barriers to entry and economic moats
…driving significant scale and barriers to entry and economic moats… 2 Key barriers to entry Upsized utilization within the krill harvest quota in Area 48 and 58 Unbeatable scale ‘000 MT across competitors in the krill sector 892 892 892 892 892 Robust IP portfolio with 76 patent families and >1,200
Slide 11: Substantial operating leverage and margin improvement potential
…resulting in substantial operating leverage and subsequent margin 2 improvement potential Offshore volumes & unit cost Onshore volumes & unit cost USD/MT USD/kg MT MT 2015 2016 2017 2018 2019 2020E 2016 2017 2018 2019 2020E Stabilization in unit costs driven by scale benefits built over the last 5
Slide 12: Consumer megatrends drive attractiveness of human nutrition markets
Structural consumer megatrends drive the fundamental attractiveness 3 of our addressable markets in human nutrition… Overarching global nutritional themes… Burgeoning global food demand Proliferation of lifestyle diseases Ballooning healthcare costs Million MT Top 5 causes of death USDtn +100% >+264
Slide 13: Growth opportunities in aqua feed and pet nutrition markets
…with significant growth opportunities in aqua feed as well as pet 3 nutrition markets Aqua nutrition Pet nutrition Global capture and aquaculture production1 Pet food markets are witnessing …with Premium category accelerating Million MT live weight steady growth… faster than the rest USDbn US pet f
Slide 14: Proprietary, scientifically-driven approach to redefine the VMS category
We leverage our proprietary, scientifically-driven approach to 3 redefine the vitamins and mineral supplements (VMS) category… 17 scientists at AKBM Free product trials 160 studies published over complemented by longstanding relationships with external researchers to support collaboration with exter
Slide 15: Ingredients targeting disease prevention and improved nutrition and health
…with our ingredients targeting disease prevention and promoting 3 improvement in nutrition and health Preventative health ingredients Sustainable marine ingredients Active ingredients Share of 2019 Share of 2019 44% Share of 2019 54% 2% revenue revenue revenue ✓ Higher uptake in the body compared t
Slide 16: Expertise in private label and own branded consumer supplements
We have established significant expertise in both private label and 4 own branded consumer supplements… Private label offering Brand offering Revenue breakdown by customer Revenue1 Traditional Kori 2019 USDm +29% +9 % BRAND PROFIT 90 86 80 75 MARKETING MARKETING 62 RETAILER MARGIN RETAILER MARGIN AK
Slide 17: Runway for growth of Kori brand with US retailers
…with substantial runway for growth of Kori brand on the back of 4 broadening partnerships with US retailers Units of Kori sold by week from all US retailers Actual Marketing Impressions 5/16 5/23 5/30 6/6 6/13 6/20 6/27 7/4 7/11 7/18 7/25 8/1 8/8 8/15 8/22 8/29 9/5 9/12 9/19 9/26 10/3 10/10 10/17 W
Slide 18: Setting the benchmark for innovation and category extension
We are setting the benchmark for innovation to drive 5 category extension into high margin products… Wide ranging innovation competencies… …targeting significant margin uplift potential per kg krill meal (Product sales price less product unit cost times the yield from krill meal) New business model
Slide 19: Expansion into premium dog food and human protein powders
…evidenced by ongoing efforts to expand into premium dog food and 5 human protein powders New dog food proposition to tap into the New human protein powder to fully USD90bn global pet food market utilize krill meal US dog food revenue Global protein products USDbn, 2019 Economy Revenue, USDbn +7% (2
Slide 20: Financials
FINANCIALS ANINVWOI8 YayV a
Slide 21: Historically, we have delivered a strong financial trajectory
Historically, we have delivered a strong financial trajectory Historical financials Q3 2020 YTD update Top line evolution Profitability evolution Revenue Adjusted EBITDA and % margin (USDm) +~2.0x (USDm) +~3.0x 246 53 25.6% 21.5% 154 39 125 14.1% 18 2017 2018 2019 2017 2018 2019 Geographic breakdown
Slide 22: Well-diversified, blue-chip customer base
Well-diversified, blue-chip customer base with longstanding Historical financials relationships Q3 2020 YTD update Majority of revenue from Diversified customer base and strong relationships long term contracts with key customers Ingredients contract base1 Ingredients customer base2 Brands customer
Slide 23: Gross margin uptick from increased capacity and unit economics
Gross margin uptick marked by increased capacity and Historical financials improvement in unit economics backed by scale benefits Q3 2020 YTD update 2017-2019 CAGR Increasing gross margin for Qrill Aqua and Qrill Pet Increasing gross margin for Superba Price / MT Price / MT +6% 0% 2017 2018 2019 201
Slide 24: Tailored capex programme to underpin the growth strategy
We have undertaken a tailored capex programme to Historical financials underpin the growth strategy with significant progress till date Q3 2020 YTD update Historical capex development Planned capex to achieve target EBITDA Capex Onshore growth Offshore growth M&A Maintenance (USDm) Provider take-out
Slide 25: Financial development in Q3 2020 YTD
Financial development in Q3 2020 YTD Historical financials Q3 2020 YTD update Revenue Adjusted EBITDA Adjusted EBITDA Net interest-bearing margin debt USDm USDm % USDm +22% +27% 27% -42% 213 57 27% 386 26% 174 45 222 YTD Q3 2019 YTD Q3 2020 YTD Q3 2019 YTD Q3 2020 YTD Q3 2019 YTD Q3 2020 YTD Q3 2019
Slide 26: Ingredients segment performance in Q3 2020 YTD
Ingredients segment performance in Q3 2020 YTD Historical financials Q3 2020 YTD update Adjusted EBITDA and adjusted EBITDA Revenue development margin development USDm 13% USDm 143 23% 47 126 38 2% -2% 22 23 51 50 43.2% 44.9% 30.1% 32.7% Q3 2019 Q3 2020 YTD Q3 2019 YTD Q3 2020 Q3 2019 Q3 2020 YTD Q3
Slide 27: Brands segment performance in Q3 2020 YTD
Brands segment performance in Q3 2020 YTD Historical financials Q3 2020 YTD update Adjusted EBITDA and adjusted EBITDA Revenue development margin development USDm USDm 84 56% 131% 12 54 34% 5 28 146% 4 21 12.6% 14.3% 9.7% 6.9% 1 Q3 2019 Q3 2020 YTD Q3 2019 YTD Q3 2020 Q3 2019 Q3 2020 YTD Q3 2019 YTD
Slide 28: Aker BioMarine has outperformed its peer group on top line growth
Aker BioMarine has historically outperformed its peer group on top line growth, with profitability in-line 2-year Revenue CAGR1,2 Latest FY EBITDA margin2,4 +40.8% 21.5% B2C VMS suppliers B2B VMS ingredients B2C VMS suppliers B2B VMS ingredients +4.8% +3.1%3 23.5% 27.4% B2C VMS suppliers B2B VMS ing
Slide 29: Thank You
Thank You ® AKER BIOMARINE