CORBION N.V. Corbion nv
Piet Heinkade 127
Amsterdam, 1019 GM • PO Box 349
1000 AH Amsterdam
The Netherlands
PRESS RELEASE
T +31 (0)20 590 6911 press@corbion.com
www.corbion.com
DATE 10 August 2021
Corbion first half-year 2021 results
Corbion reported net sales of € 515.6 million in the first half of 2021, driven by organic net sales growth of 15.5%. Adjusted EBITDA in the first half of 2021 increased organically by 4.7% to € 77.1 million.
Olivier Rigaud, CEO, commented: "I'm very pleased with the record sales growth in all three business segments. In Sustainable Food Solutions we gained market share by maintaining uninterrupted operations and by successfully converting our commercial pipeline. In Lactic Acid
- Specialties the continued growth in PLA has been driving sales. In Incubator, algae-basedomega-3 is seeing increased market receptiveness. We are raising our organic sales growth outlook for 2021 to 12-15% for our core activities.
Nevertheless, we are facing broad-based and rapid increases in our input costs. Prices for freight and raw materials have increased substantially. In response, we are taking firm pricing actions which will fully materialize next year, while partially contributing in 2021. Consequently, we are currently facing margin pressure and are reducing our Adjusted EBITDA margin outlook for our core activities for 2021 to 13-15%. We aim to restore the Adjusted EBITDA margin of our core activities to above 15% in 2022.
With our strategy Advance 2025, we embarked on a path of investing for growth in our organization. Since the beginning of 2020, we have grown our employee base by 9%, adding essential capabilities. Our current sales growth rate is evidence of our strategy bearing fruit, and a testament to the excellent operational execution and commitment of our employees."
Key financial highlights first half 2021*:
- Net sales growth was 4.8%. Core net sales organic growth was 16.4%
- Adjusted EBITDA was € 77.1 million (H1 2020: € 83.8 million; organic increase: 4.7%)
- Operating result was € 70.3 million (H1 2020: € 45.7 million)
- Free cash flow was € -13.6 million (H1 2020: € -12.7 million)
- Net debt/EBITDA at half year-end was 2.1x (year-end 2020: 1.7x)
€ million | YTD 2021 | YTD 2020 | Total growth | Organic growth |
Net sales | 515.6 | 492.2 | 4.8% | 15.5% |
Adjusted EBITDA | 77.1 | 83.8 | -8.0% | 4.7% |
Adjusted EBITDA margin | 15.0% | 17.0% | ||
Operating result | 70.3 | 45.7 | 53.8% | 68.0% |
ROCE | 13.0% | 13.6% | ||
* For non-GAAP definition see page 23
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PRESS RELEASE
Management review H1 2021
Net sales
Net sales in H1 2021 increased by 4.8% to € 515.6 million (H1 2020: € 492.2 million) due to organic growth (15.5%) partly offset by a negative currency impact (-8.7%) and the impact of the frozen dough business divestment (-2.0%). Organic net sales growth of 15.5% in H1 2021 in the Sustainable Food Solutions business unit was driven by volume growth and price/mix improvements. In the Lactic Acid & Specialties business unit, sales organically increased by 12.6% versus H1 2020. Positive volume growth (15.1%) was offset by a negative price/mix effect (- 2.2%). Organic net sales growth for the Incubator business unit was 161.1%. Organic net sales growth in the non-core activities was 10.4%.
Total | Acquisitions | |||||||||||||||
Total | growth at | |||||||||||||||
Net sales | Currency | / | Organic | Price/Mix | Volume | |||||||||||
growth | constant | |||||||||||||||
Divestments | ||||||||||||||||
currency | ||||||||||||||||
YTD 2021 vs YTD 2020 | ||||||||||||||||
Core | 7.8% | -8.6% | 16.4% | 0.0% | 16.4% | 2.3% | 13.7% | |||||||||
- Sustainable Food Solutions | 6.2% | -9.3% | 15.5% | 0.0% | 15.5% | 4.1% | 11.0% | |||||||||
- Lactic Acid & Specialties | 6.8% | -5.8% | 12.6% | 0.0% | 12.6% | -2.2% | 15.1% | |||||||||
- Incubator | 118.5% | -42.6% | 161.1% | 0.0% | 161.1% | 17.8% | 121.7% | |||||||||
Non-core | -11.7% | -9.5% | -2.2% | -12.6% | 10.4% | 5.2% | 4.9% | |||||||||
Total | 4.8% | -8.7% | 13.5% | -2.0% | 15.5% | 2.8% | 12.4% | |||||||||
Q2 2021 vs Q2 2020 | ||||||||||||||||
Core | 14.6% | -8.0% | 22.6% | 0.0% | 22.6% | 2.5% | 19.7% | |||||||||
- Sustainable Food Solutions | 10.5% | -8.2% | 18.7% | 0.0% | 18.7% | 3.1% | 15.1% | |||||||||
- Lactic Acid & Specialties | 18.2% | -7.0% | 25.2% | 0.0% | 25.2% | 0.6% | 24.5% | |||||||||
- Incubator | 112.9% | -19.4% | 132.3% | 0.0% | 132.3% | 16.2% | 100.0% | |||||||||
Non-core | -2.5% | -10.4% | 7.9% | -10.6% | 18.5% | 6.9% | 10.8% | |||||||||
Total | 12.0% | -8.4% | 20.4% | -1.7% | 22.1% | 1.8% | 19.9% | |||||||||
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PRESS RELEASE
EBITDA
Adjusted EBITDA decreased by 8.0% to € 77.1 million in H1 2021. Organic growth of 4.7% was more than offset by a currency effect of -10.3% and a net divestment effect of -2.4%.
€ million | YTD 2021 | YTD 2020 | Q2 2021 | Q2 2020 | Growth | ||||||||
YTD | |||||||||||||
Net sales | |||||||||||||
Core | 446.9 | 414.4 | 228.3 | 199.2 | 7.8% | ||||||||
- Sustainable Food Solutions | 284.1 | 267.6 | 145.2 | 131.4 | 6.2% | ||||||||
- Lactic Acid & Specialties | 151.0 | 141.4 | 76.5 | 64.7 | 6.8% | ||||||||
- Incubator | 11.8 | 5.4 | 6.6 | 3.1 | 118.5% | ||||||||
Non-core | 68.7 | 77.8 | 35.8 | 36.7 | -11.7% | ||||||||
Total Net Sales | 515.6 | 492.2 | 264.1 | 235.9 | 4.8% | ||||||||
Adjusted EBITDA | |||||||||||||
Core | 66.0 | 71.5 | 27.9 | 33.5 | -7.7% | ||||||||
- Sustainable Food Solutions | 39.7 | 47.0 | 16.5 | 22.5 | -15.5% | ||||||||
- Lactic Acid & Specialties | 33.1 | 33.5 | 14.8 | 14.3 | -1.2% | ||||||||
- Incubator | (6.8) | (9.0) | (3.4) | (3.3) | 24.4% | ||||||||
Non-core | 11.1 | 12.3 | 5.3 | 5.9 | -9.8% | ||||||||
Total Adjusted EBITDA | 77.1 | 83.8 | 33.2 | 39.4 | -8.0% | ||||||||
Adjustments | 27.3 | (5.8) | (2.4) | (4.7) | |||||||||
Total EBITDA | 104.4 | 78.0 | 30.8 | 34.7 | 33.8% | ||||||||
Depreciation/amortization/ | |||||||||||||
(reversal of) impairment | (34.1) | (32.3) | (19.3) | (16.4) | 5.6% | ||||||||
(in)tangibles | |||||||||||||
Total Operating result | 70.3 | 45.7 | 11.5 | 18.3 | 53.8% | ||||||||
Depreciation, amortization, and impairment
Depreciation, amortization, and impairment of fixed assets before Adjustments amounted to € 30.3 million compared to € 30.9 million in H1 2020.
Operating result
Operating result increased by € 24.6 million to € 70.3 million in H1 2021 (H1 2020: € 45.7 million).
Adjusted operating result decreased by € 6.1 million to € 46.8 million in H1 2021 (H1 2020: € 52.9 million).
Adjustments
In H1 2021, total adjustments of € 26.8 million were recorded (at Result after tax level), consisting of the following components:
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PRESS RELEASE
- Gain of € 11.1 million related to the sale of the Frozen Dough activities.
- Gain of € 18.5 million related to the sale of a plot of land in the Dutch municipality of Breda.
- Loss of € 3.8 million related to an impairment of the FDCA development.
- Loss of € 1.7 million as a result of a litigation claim.
- Loss of € 0.6 million related to the acquisition of the assets of Granotec Mexico.
- Tax effects on the above of € 3.3 million.
Financial income and charges
Net financial charges decreased by € 7.3 million to € 5.9 million, mainly as a result of decreased exchange rate differences.
Taxes
The tax charge on our operations in H1 2021 amounted to € 7.3 million compared to a charge of
- 12.5 million in H1 2020. In H1 2021, the effective tax rate (9.8%) was below the expected effective tax rate based on statutory tax rates mainly due to the recording of a previously unrecognized deferred tax asset which materialized as a result of the sale of a plot of land in the Dutch municipality of Breda. The adjusted effective tax rate excluding this effect would have been 22.2%. For 2021 we expect an effective tax rate of around 15%.
Statement of financial position
Capital employed increased, compared to year-end 2020, by € 104.5 million to € 923.2 million. The movements were:
€ million | |
Capital expenditure on (in)tangible fixed assets | 51.1 |
New / modifications to lease contracts | 2.5 |
Movements related to the acquisition of the assets of Granotec Mexico | 11.1 |
Disposal of fixed assets | (10.0) |
Depreciation / amortization / impairment of (in)tangible fixed assets | (34.1) |
Change in operating working capital | 41.3 |
Change in provisions, other working capital and financial assets / accruals | 14.6 |
Movements related to joint ventures | 6.4 |
Taxes | 3.5 |
Exchange rate differences | 18.1 |
Major capital expenditure projects were investments related to our lactic acid capacity expansion, our new SAP ERP platform, and capex amounts related to our new 125 kt lactic acid plant in Thailand.
Operating working capital increased by € 50.6 million. This increase is the balance of an operational increase of € 41.3 million, acquisition effects related to Granotec Mexico of € 2.3
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PRESS RELEASE
million, spare parts reclassification from tangible fixed assets to inventory of € 1.9 million, and currency effects of € 5.1 million.
Shareholders' equity increased by € 45.4 million to € 561.4 million. The movements were:
- The positive result after taxes of € 67.5 million;
- A decrease of € 33.0 million related to the cash dividend for financial year 2020;
- Positive exchange rate differences of € 5.6 million due to the translation of equity denominated in currencies other than the euro;
- Positive movement of € 9.3 million in the hedge reserve;
- Negative remeasurement effect of defined benefit arrangement of € 1.5 million;
- Net share-based remuneration movement of € 1.8 million;
- Negative tax effects of € 0.7 million.
At half year-end 2021, the ratio between balance sheet total and equity was 1:0.5 (2020 year- end: 1:0.5).
Cash flow/Financing
Cash flow from operating activities decreased compared to H1 2020 by € 12.5 million to € 15.6 million. This is the balance of the lower operational cash flow before movements in working capital of € 5.4 million, a positive impact of the movement in working capital and provisions of € 4.0 million, and higher taxes and interest paid of € 11.1 million.
The cash flow required for investment activities decreased compared to H1 2020 by € 11.6 million to € 29.2 million. Capital expenditures (€ 52.8 million) accounted for most of this cash outflow, together with the acquisition of the assets of Granotec Mexico, partly compensated by dividend from the PLA joint venture and payments received related to the sale of our Frozen Dough activities and the sale of a piece of land.
The net debt position at half year-end 2021 was € 342.4 million, an increase of € 58.2 million compared to year-end 2020, mainly caused by the dividend payment, capital expenditures, and increased working capital positions, partly compensated by the positive cash flow from operating activities.
At half year-end 2021, the ratio of net debt to EBITDA was 2.1x (end of 2020: 1.7x). The interest
cover for half year-end was 15.1x (end of 2020: 16.5x). We continue to stay well within the limits of our financing covenants.
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Corbion NV published this content on 10 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 August 2021 08:01:04 UTC.
