Bluestar Adisseo : FY 2020 net profit contributed to shareholders up +36% vs FY 2019 in the context of COVID-19 pandemic

FY 2020 net profit contributed to shareholders up +36% vs FY 2019 in the context of COVID-19 pandemic

Release time:2021-02-10

Safety is and remains Adisseo's first priority while ensuring business continuity: best-ever yearly result with TRIR in FY2020 at 0.40 (vs 0.71 in 2019).

FY2020: Accelerated growth in revenue CNY11.9 billion (+7%) and net profit contributed to shareholders CNY1.4 billion (+36%) thanks to:

• Strong volume growth in liquid methionine
• Solid contribution from Vitamins
• Continued high double-digit revenue growth in Specialties
• Improved gross profit margin thanks to low-level raw material prices and proactive margin management
• Effective cost optimization across the whole group

Key projects:

• European Methionine Debottlenecking project being implemented on schedule
• 2^nd Nanjing plant (BANC 2 project) on track with major piping and civil work completed and main imported equipment delivered on site
• Groundbreaking ceremony of the first commercialFeedKind plantheld in Chongqing on 18^th December
• FRAmelco acquisition closed on 9th December, allowing acceleration in the growth of Health by Nutrition, part of specialty development plan
• Extending innovation capability to LATAM via investment in an Agriculture venture fund managed by SP Ventures
• Competitiveness enhancement program savings of more thanEuro 30millionin 2020

2021 outlook

• In an environment where volatility and uncertainty will still prevail, Adisseo is confident and committed to keep investing in sustainable growth.
• Key drivers for performance and profitable growth will be:
  • Continued volume growth in liquid methionine
  • Continued solid growth in specialties
  • Seizing market opportunities in vitamins sector
  • Proactive margin and cost optimization thanks to competitiveness enhancement program
  • Leveraging innovation capacities and external growth capabilities

Jean-Marc Dublanc, CEO of Adisseo, said: 'I am proud that Adisseo achieved accelerated growth with a +36% increase in the net profit contributed to shareholders in FY2020, a year full of uncertainty and unprecedented challenges owing to COVID-19 pandemic.

Thanks to Adisseo's key role in the food value chain, the industry leadership it has established over several decades, the two-pillar strategy it has consistently implemented over the years and its global coverage which includes more than 110 countries, Adisseo's business is now more resilient when faced with market volatility. Since the outbreak of the pandemic, Adisseo has highlighted safety as its first priority and ensuring business continuity as its second. We have pursued a robust and proactive approach to protect our staff while continuing to provide products and services to our customers. In parallel, the successful implementation of competitiveness enhancement program allowed to achieve a total savings of more than Euro 30million.

With strong confidence in, and commitment to accelerate the business growth, Adisseo continues to pursue investment opportunities. The key investment projects progressed well during the year. We broke ground for the first commercial FeedKind® plant in Chongqing and closed the acquisition of FRAmelco.

In2021, volatility and uncertainty will still prevail, Adisseo will keep safety as the priority and execute business activities safely and efficiently while being agile in responding to the changes.'

Unaudited figures presented to BAC Audit Committee

(Full year 2020 audited consolidated accounts are expected to be presented to the Board on 30th March)

I.Business Review: Revenues & Net Profit Contributed to Shareholders

Unit: CNY (100mil)	FY2020	FY2019	YoY variance
Operating revenue	119.1	111.4	+7%
	85.2	80.9	+5%
	28.2	24.3	+16%
	5.7	6.2	-9%
Gross profit (in % of operating revenue)	45.2 38%	37.8 34%	+20% +4ppt
	29.4	24.0	+23%
	14.1	11.9	+18%
	1.7	1.9	-9%
Net profit contributed to the shareholders of the Company	14	10	+36%

During COVID-19, safety is and will remain Adisseo's first priority while ensuring business continuity the second. Adisseo achieved best-ever yearly safety TRIR result in 2020 at 0.40, a significant improvement compared with that of 0.71 in 2019.

In a most challenging macro-environment in 2020, Adisseo realized sustainable growth in both operating revenue at CNY11.9 billion (+7%) and gross profit at CNY4.52 billion (+20%), thanks to continued volume growth in liquid methionine, solid contributions from vitamins, strong double-digit revenue growth in specialties.

The gross profit margin was up from 34% to 38% thanks to low-level raw material prices,positive impacts from volume increase and strong reliability of plant production, as well as proactive margin management.

Regarding the methionine business, liquid methionine achieved a +14% volume growth in Q4 2020 vs Q4 2019.

Nanjing plant achieved its production record in Q4 2020, and the new 180KT liquid methionine plant (BANC2 project) is well on track with major piping and civil work completed and main imported equipment delivered on site.

The debottlenecking of European plant (+30KT) is being implemented on schedule.

On Vitamins, thanks to the reliable production and supply, Adisseo realized strong double-digit volume growth in Vitamin A and E and fully benefited from solid market prices in 2020.

The specialty business achieved a robust double-digit growth in FY2020 vs FY2019 in both revenue (+16%) and gross profit (+18%) despite difficulties to visit customers to promote specialty business especially with regard to the new products. The growth was mainly attributed to strong results in the dairy (+38%) and aqua (+31%) business as well as other specialties such as Health by Nutrition, etc.

The acquisition of FRAmelco announced in early September to reinforce Adisseo's position as one of the worldwide leaders of specialty feed ingredients in health by nutrition was closed on 9^th December 2020. Both the business and organizational integration plan are running according to schedule.

Through participation in AgVentures II fund managed by SP Ventures, globally recognized for its specialization in Agfood tech, Adisseo extended its innovation capacity to Latin America.

Calysseo, Adisseo's joint venture with Calysta, established its Chinese entity, the first commercial FeedKind® plant in Chongqing. The groundbreaking ceremony of the plant was held on 18^th December, a milestone in the delivery of a disruptive technology that can benefit China and Southeast Asia's aquaculture market as early as 2022.

Competitiveness enhancement program allowed to deliver significant savings of more than Euro 30 million. This program will continue in 2021 and beyond to deliver additional savings.

Thanks to gross profit growth and successful implementation of the competitiveness enhancement program, FY2020 net profit contributed to shareholders increased by +36% yoy to CNY1.4 billion, and benefited from the completion of 15% buy-back despite negative foreign exchange impact due to depreciation of US Dollar and emerging countries' currencies.

II.Cash-flow and Net Debt

Cash position as of 31^st December 2020 stood at CNY2.8 billion, a reduction of CNY2.5 billion compared to 31^st December 2019.

The positive cash-flow generated from operating activities in 2020 was largely invested 15% buy-back and dividend payment as well as self-financing in CAPEX and M&A investment.

III.Shareholder Structure

The conversion window of the exchangeable bonds issued by Bluestar started on 21^st Oct with a 4-year period until 2024. Up to 8^th February 2021, around12% of total EB has been converted into shares, representing more floating of Adisseo shares on the market.

IV.2021 outlook

In an environment where volatility and uncertainty will still prevail, Adisseo is confident and committed to ensuring the safety of its staff, to reinforce its business continuity and to keep investing in sustainable growth.

Key drivers for performance and profitable growth will be:

• Continued volume growth in liquid methionine
• Continued robust growth in specialties
• Seizing market opportunities in vitamins sector
• Proactive margin and cost optimization thanks to competitiveness enhancement program
• Leveraging innovation capacities and external growth opportunities

-End-

About Adisseo

Adisseo is one of the world's leading experts in feed additives. The group relies on its 10 research centers and its production sites based in Europe, USA and China to design, produce and market nutritional solutions for sustainable animal feed. With more than 2,200 employees, it serves around 3,900 customers in over 110 different countries through its global distribution network.

Adisseo is one of the main subsidiaries of China National BlueStar, leader in the Chinese chemical industry with nearly 23,000 employees and a turnover of CNY 60 billion. Adisseo is listed on the Shanghai Stock Exchange.

Adisseo Corporate websites:www.adisseo.com;www.bluestar-adisseo.com;

ADISSEO press contact

In China: First Avenue - Grace Xu:[e-mail]