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    BMK   GB00BGHPT808

BENCHMARK HOLDINGS PLC

(BMK)
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Benchmark : Q1 Results Presentation 2021

02/22/2021 | 05:20am EDT

A leading aquaculture biotechnology company

Driving sustainability in aquaculture

Q1 Results FY21

22 February 2021

GENETICS

ADVANCED NUTRITION

HEALTH

Positive start to the year with good trading and strategic progress in all business areas

  • Significant increase in revenues and adjusted EBITDA

    • Improvement in Advanced Nutrition

    • Continued strong performance in Genetics

    • Solid result in restructured Health

  • Progress in key growth vectors

    • BMK08 / CleanTreat® on track for launch in Q2 CY21

    • First local production of salmon eggs from new facility in Chile

    • New client wins in emerging land-based salmon farming

  • Benefits of restructuring and focus on core aquaculture areas starting to come through

* Unless otherwise stated, figures relate to continuing operations

Revenue £29.0m (+18%)

( Q1 2020: £24.7m)

Adjusted EBITDA1 £3.0m

(Q1 2020: £0.4m)

Liquidity

£67.4m

(30 Sep 2020: £83.2m)

Net Debt

-£51.9m

(30 Sep 2020: -£37.6m)

(1) Adjusted EBITDA - EBITDA before exceptional and acquisition related items

Financial Review

Financial highlights

£m

Q1 2021 (unaudited)

Q1 2020 Restated* (unaudited)

FY2020 (audited)

Adjusted

Revenue from continuing operations

29.0

24.7

105.6

Gross profit from continuing operations

14.7

12.9

55.0

Adjusted EBITDA from continuing operations

3.0

0.4

14.5

Adj. Operating Profit/(Loss) from continuing operations

1.3

(1.1)

7.9

Exceptional restructuring/disposal related items

(0.6)

(0.1)

(2.1)

EBITDA from continuing operations

2.4

0.3

12.4

Statutory

Loss before tax from continuing operations

(0.5)

(3.2)

(22.6)

Loss for the period from continuing operations

(0.2)

(2.6)

(22.8)

Loss for the period - total incl. discontinued operations

(0.2)

(5.4)

(31.9)

Basic loss per share (p) - continuing operations

(0.11)

(0.51)

(3.80)

Net debt

(51.9)

(91.3)

(37.6)

* Q1 2020 results have been restated to reflect changes to the ongoing continuing business since they were previously reported.

••

Revenues from continuing Revenues from continuing operations 18% ahead of the operations 18% ahead of the prior prior year year

Gross margin from continuing Adjusted EBITDA from continuing operations 51% (Q1 2020: 52%) operations was £3.0m against

  • Net cash outflow of £14.6m (Q1

  • £A0d.4ju5smte(dq1EB20IT2D0A) from continuing operations £3.0m against £0.4m 2020: inflow £2.2m) as a result of

  • pNlaentnleodsscfaopretxhe period from continuing operations £0.2m (Q1 2020: £2.6m loss)

  • Net Debt (£51.9m)

    (30 September 2020: (£37.6m))

    • Reflecting planned capex and working capital investments in the period

  • 4% growth in revenues driven by:

    Genetics

    Continued good performance

    • Higher egg sales volumes in Norway from Salten

    • Partially offset by lower sales in Scotland as expected and lower harvest revenues due to lower salmon prices

  • Adj. EBITDA impacted by Norwegian JV result of (£0.6m) due to biological challenges which reduced yield at JV site

  • Improved Adj. EBITDA margin to 31% (Q1 2020: 29%) reflecting lower operating costs and R&D

  • £2m investment in growth vectors

    • Iceland incubation capacity

    • Chile

    • SPR Shrimp

  • SPR shrimp test market ongoing; gradual roll-out constrained by Covid-19

Advanced Nutrition

Good quarter with slight market recovery

  • Revenue growth in all product areas

  • By region

    • Sales in Asia ahead of last year from slight market recovery and yoy timing of restocking

    • Drop in the Americas - significant impact from Covid

    • Europe in line with Q1 2020

  • Adj. EBITDA margin improvement from operational leverage and cost control

  • £1.4m capex investment to enhance safety at Thailand facility

  • Operational efficiencies completed in the period: formulation improvements and installation of new Artemia mixer in US to reduce customer lead times

Revenue

£15.1m

+32%

Q1 2020: £11.4m

Gross Margin

42%

Q1 2020: 47%

Adj. EBITDA

£1.0m

Q1 2020: (£0.3m)

Adj. EBITDA

Margin

6.6%

Q1 2020: (2.6%)

Revenue Contribution

11%

Revenues Q12021/2020

Artemia

52% 37%

Diets

Health

+69% +14% +10%

Safety capex investment : £1.4m

  • Progress towards launch of BMK08 and CleanTreat in Q2 CY2021

    Health

    BMK08 + CleanTreat® progress on track

    • Progressing through regulatory process - awaiting MRL ratification; MA approval continues in parallel

    • Building operational strength and capacity

    • Construction of second CleanTreat system expected to complete in line with launch plan

    • Firm customer interest

    • Capex investment: £0.8m

  • Solid sales of Salmosan

  • Reduction in operating and R&D costs following restructuring

Revenue

£1.3m

Q1 2020: £1.4m

Gross Margin 30%

Q1 2020: 7%

Adj. EBITDA

-£1.1m

Q1 2020: -£1.8m

Capex investment : £0.8m

Operating costs and R&D

Q1 contribution to £10m annual target savings: £3.9m

  • Group operating costs 5% below Q1 2020

Savings (£m) - Restructuring and cost

containment

0.5

2.1

m

Operational expenses

R&D

Vaccines(discontinued)

  • R&D expenses of £1.7m 43% down (Q1 2020: £3.0m)

  • Total R&D investment (excluding discontinued business) was £2.8m (Q1 2020: £3.9m)

    • 28% reduction in Advanced Nutrition

    • 61% reduction in Health

    • Genetics 5% reduction. Genetics R&D spend includes fixed costs of maintaining breeding programmes

Cashflow, net debt and liquidity

£m

Net debt1 at 30 September 2020

(37.6)

Cash generated from operations

2.3

Movement in working capital

(7.5)

Interest and taxes

Shares issued (options)

Capital expenditure

New lease liabilities

Other non cash movements

Foreign exchange on cash and debt

Net debt1 at 31 December 2020

(1) Net debt is cash and cash equivalents less loans and borrowings.

(3.0)

0.2

(1.9)

(0.2)

0.1

  • Net cash outflow of £14.6m (Q1 2020: inflow £2.2m)

    • Investing activities outflow of £4.2m (Q1 2020: inflow £4.5m) - planned capex in growth vectors

    • Operating activities net outflow of £6.4m (Q1 2020: £3.6m outflow) - investment in working capital in line with plan

  • Liquidity of £67.4m providing £57.4m headroom

  • Liquidity as at 15th February 2021: £64.2m

Outlook

11

FY21 Outlook

Trading in line with market expectations; remain resilient through Covid-19

  • Good visibility of revenues in Genetics for the year with normal seasonality

    • Underpinned by long production cycle in salmon and a resilient salmon industry

  • Resilient trading in Advanced Nutrition in continued challenging market conditions

    • Shrimp market expected to remain challenging through the coming months with some recovery in the Asian markets likely and difficult conditions continuing in the Americas

  • BMK08/CleanTreat® launch expected in Q2 CY2021 subject to regulatory approvals

    Benefits of operating as a streamlined, increasingly integrated aquaculture business are starting to be realised

Well positioned with clear roadmap to profitability

FY 21 Priorities

1

Restructuring and streamlining

Further streamlining post restructuring "One Benchmark"

2

Delivery of pipeline products

BMK08 and CleanTreat®

Salmon genetics: Iceland and Norway

3

Grow in our core established markets

Advanced Nutrition: grow in specialist high margin segments

4 5

Selective investment in areas that leverage Group capabilities

SPR shrimp: commercial launch Chile - salmon genetics

Position BMK for future growth

Explore future growth opportunities within core business areas

A streamlined, profitable, market leading, aquaculture biotechnology company

Three business areas with growth and synergy opportunities

GENETICS

ADVANCED NUTRITION

HEALTH

Thank you

Q&A

14

Uniquely positioned to deliver on one of the biggest ESG opportunities: sustainable food production

An attractive market

Aquaculture is inherently sustainable and growing faster than any other animal protein production creating a need for products that improve productivity and support sustainable growth

With a complementary offering, market leading positions, a focused strategy and an experienced team, we are well positioned to deliver on this opportunity

Having completed an extensive streamlining programme exiting non-core and loss-making activities we are now in a strong financial position to achieve profitability and deliver growth

Uniquely positioned

Committed to profitability

Disclaimer

Benchmark Holdings plc published this content on 19 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 February 2021 10:19:04 UTC.


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Peter George Lutz Non-Executive Chairman
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