COMPANY PRESENTATION September

Transcription

1 COMPANY PRESENTATION September

2 INTRODUCTION 2

3 BENCHMARK S MISSION We bring together technology and biology to deliver innovative products that support aquaculture producers throughout the growth cycle We focus on improving yield, quality and profitability for our customers through health, genetics and advanced nutrition 3

4 A GLOBAL AQUACULTURE PL ATFORM SERVING ALL MA JOR MARKETS AND SPECIES We combine technology and fundamental biology to create products that deliver key advantages to aquaculture producers Technology Genetic tools Vaccine technology platform Molecules Probiotics Biology In depth knowledge of fish, disease and parasite biology Founded in 2000 Built organically and through strategic acquisitions Listed on AIM since 2013 (GBP 328m 1 Mcap) Group Revenue 147m 2 Customers 1,435 in 70 countries 1,000+ employees 4 1 As of 5-September-2018; 2 LTM 1H 2018

5 A LEADER IN AQUACULTURE GENETICS, ADVANCED NUTRITION AND HEALTH Genetics Advanced Nutrition Animal Health Breeding programmes and egg/fry production Early-stage feed products Health treatments Egg/fry production Genetic services Salmon #1 globally #1 globally Ongoing R&D #4 globally : #1 in sea lice treatment Shrimp Newly entered market #1 globally Ongoing R&D Tilapia #5 globally #1 globally Newly entered market Ongoing R&D Sea Bream/Sea Bass % 2017 revenue Market positions are management s estimates #1 globally #1 globally Newly entered market 21% 58% 11% 5

6 ESTABLISHED TRACK RECORD OF GROWTH AND DIVERSIFICATION Strong revenue growth GBPm Revenue Increasing profitability H 2018 LTM Diversified revenue base (2017) Knowledge Services Animal Health Genetics 10 % 11 % 21 % 58 % R&D - Investing for growth Advanced Nutrition GBPm 7 2 Adjusted EBITDA GBPm Expensed Capitalised H H 2018 LTM LTM Note that fiscal year ending 30-September Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and acquisition related expenditure R&D % of total revenue %

7 BENCHMARK PATENT PORTFOLIO Patent coverage of key product revenues Animal Health Advanced Nutrition Genetics Total patents % 50% 72% 28% 72% 28% Patent Families Patent Families One or more patent No patent Status 33% granted 67% pending 0 Animal Health Advanced Nutrition Genetics 7

8 MARKET EXPOSURE TO ATTRACTIVE LONG-TERM GLOBAL MEGA TRENDS 8

9 AQUACULTURE WILL BE KEY IN SERVING THE STRONG PROTEIN DEMAND GROWTH Growing, wealthier population driving protein demand World population (bn people) Upper or middle class % % +29% % 2050E 202 Global protein consumption per capita (kg per year) E +2% Protein demand (m tonnes) E -2% +100% Fish expected to grow faster than other protein sources 0% As volumes from wild catch have stagnated, seafood supply growth relies on aquaculture Mt live weight Aquaculture Wild catch Forecast 0.4% CAGR E 2026E 9 Source: United Nations, OECD-FAO Agricultural Outlook

10 Source: USDA, FAOSTAT AQUACULTURE L AGS MOST L AND BASED ANIMAL PROTEIN PRODUCTION Benchmark s products aim to drive sustainable industrialisation % production modernised by sector 10

11 Level of risk Low ATL ANTIC SALMON HAS LED INDUSTRIALISATION WITHIN AQUACULTURE Other aquaculture species expected to follow ILLUSTRATIVE High degree of automation High innovation pace throughout value chain Large and growing service industry Well-established and advanced use of genetics Atlantic salmon Atlantic salmon industrialisation journey 1980 s-90 s Tilapia Today Carps Other freshwater fish Shrimp Mussels, Clams Other marine fish Ongoing developments High Low Level of industrialisation High 11 Source: Marine Harvest, Salmon Farming Industry Handbook (2017)

12 R E S O LV I N G B I O L O G I C A L C H A L L E N G E S I S K E Y T O G R O W T H Benchmark has a unique multidisciplinary approach to address disease Shrimp Salmon Tilapia Other marine fish Key biological challenges Disease costs to the Asian shrimp sector last 7 years USD 20bn Share of production lost to diseases per year ~40% Annual costs selected diseases (USDm) Sea lice 1 PD 2 SRS 3 Total Mortality 4 Up to 20% Annual loss due to streptococcosis USD 1bn Nodavirus mortality 5 Up to 100% Pasteurella mortality (juvenile fish) 6 Up to 90% Vibrio bacteria mortality 10% Benchmark solutions Improved genetics are best start for disease resistance Specialist feed to promote growth and immunity New vaccines for prevention Targeted treatments to manage disease outbreaks 12 1 Rabobank; 2 Norwegian Fish Health Report; 3 Rozas & Enriques (2014); 4 Fish Vet Group; 5 Doan et al 2016; 6 Andreoni & Magnani, 2014

13 THREE BUSINESS AREAS WITH STRONG MARKET POSITIONS AND HIGH ENTRY BARRIERS 13

14 THREE CORE DIVISIONS WITH ATTRACTIVE GROWTH AND MARGIN PROSPECTS Advanced Nutrition Genetics Animal Health Phillipe Léger Head of Advanced Nutrition 39 years experience Jan-Emil Johannessen Head of Benchmark Genetics 30+ years experience John Marshall Head of Animal Health 20 years experience 58% Of group revenue 21% Of group revenue 11% Of group revenue 21% Adj. EBITDA margin 19% Adj. EBITDA margin n.m. Adj. EBITDA margin 486 Employees 158 Employees 206 Employees 14 Sites 8 Sites 10 Sites 614 Customers 316 Customers 426 Customers 22 Products in pipeline 18 Products in pipeline 41 Products in pipeline Advanced early-stage feed and diet solutions for shrimp and fish Production of algae products for feed Salmon eggs and fingerlings Lumpfish Tilapia fingerlings and juveniles Shrimp breeding Genetics services Vaccines Medicines Biocides parasiticides Veterinary health services Diagnostics 14 Note: share of Group revenue and EBITDA margin based on fiscal year 2017

15 Kg Artemia 1000 kg Shrimp Kg Artemia / ton Shrimp Advanced Nutrition Genetics Animal Health STRONG PROSPECTS FOR CONTINUED GROWTH Artemia replacement diet Probiotics and innovative products for nursery segment Selective expansion into grow-out segment Hatchery Nursery Grow-out Top priority Replacement products to fill supply deficit Artemia availability per shrimp to halve by Year 3,00 2,50 2,00 1,50 1,00 0, m 30m Development commenced Investment to date Estimated peak sales Benchmark has developed a highly successful replacement product Sales tripled over the last 6 years Artemia Ton kg Artemia/ton Shrimp Poly. (Shrimp Kton) Shrimp Kton Poly. (Artemia Ton) Poly. (kg Artemia/ton Shrimp) 15

16 Advanced Nutrition Genetics Animal Health SHRIMP: A L ARGE AND UNDERPENETRATED MARKET FOR GENETICS Significant expansion potential for Benchmark s SPR shrimp Genetic penetration Benchmark s strategy ~90% 1 Continue to develop high performing strains ~30% Shrimp Salmon 2 3 Leverage commercial experience in salmon and existing strong presence in shrimp hatcheries through advanced nutrition Adapt genetics to local markets Top Priority Specific Pathogen Resistant (SPR) Shrimp Huge disease cost in Asian Shrimp production $20bn lost due to diseases over the last 7 years AHPND (formerly known as EMS) and White Spot Virus (WSV) $500m Estimated market size Shrimp farmers globally seeking robust shrimp adapted to local conditions Large untapped potential for Benchmark s SPR shrimp Benchmark s SPR shrimp breeding programme acquired in 2016, is the first of its kind with 20+ years of development history SPR provides resistance to infection regardless of sanitary status, an advantage over the traditional Specific Pathogen Free (SPF), in which stocks are free from, but not resistant to pathogens 60m Estimated peak sales 16

17 Advanced Nutrition Genetics Animal Health NEW TREATMENT - 100% EFFICACY AGAINST SEA LICE Milestones and roll-out Benchmark s new generation sea lice treatment Used in conjunction with CleanTreat, a fully contained purification system No detectible medicine discharged, superior safety profile and excellent fish welfare Treatment Efficacy Welfare Environment BMK new sea lice treatment 45m estimated peak sales >17,500 tonnes treated Sea lice treatments BMK treatment clear superiority 100% None Pyretheroids Low Long Azamethiphos Moderate Short Avamectin Low Long H202 Moderate / Low Short Fresh water Declining None Mechanical Moderate None Programme launch Sea lice treatment proof of concept CleanTreat proof of concept Field trials in Norway Great interest from producers to participate in trial extension Obtaining approvals for field trials in other markets Exploring CleanTreat opportunities Field trials: UK, Ireland, Faroe Islands, Canada and Chile Anticipated marketing approval in place 17

18 SUMMARY AND WAY FORWARD 18

19 LEVERAGING STRONG MARKET POSITION WITH ATTRACTIVE OPPORTUNITIES IN ALL SEGMENTS NUTRITION GENETICS HEALTH Market leading position gained through 35 years of innovation Proprietary Artemia supply enables protected and strategic position Technological leadership through continuous innovation Principal opportunities: Develop Artemia replacement products Start penetrating grow-out segment Develop feed probiotics, booster feeds and feed treatment products #1 market position in Salmon Recently increased in-house capacity for growth (Salten and Chile JV) SPR shrimp in pre-marketing trials in Asia Principal opportunities: Penetrate Asian shrimp market with SPR genetics Market share growth in Chile through JV Develop superior Tilapia strain Commercial trials underway with new generation sea lice treatment Innovative technology platforms supporting pipeline with significant potential Principal opportunities: New generation sea lice treatment roll-out Marine fish portfolio Salmon vaccines portfolio Margin: Margin: Current 21% Adj. EBITDA 1 % margin Current 19% Adj. EBITDA 1 % margin Mid to long term mid-twenties Mid to long term mid-twenties 1 Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and acquisition related expenditure Margin: Currently EBITDA negative Long term margin develops through breakeven to mid-twenties 19

20 INVESTMENT HIGHLIGHTS Exposed to attractive long-term global megatrends Supplying mission critical solutions for growth in aquaculture Strong market position with high entry barriers Return focused R&D strategy Experienced management team Positioned for strong and profitable growth based on current market position and a potent product pipeline Evident new growth opportunities to be exploited 20