COMPANY PRESENTATION 19 JUNE 2020 - IMPROVING HUMAN AND PLANETARY HEALTH
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IMPROVING HUMAN AND PLANETARY HEALTH
COMPANY PRESENTATION
19 JUNE 2020
IMPORTANT NOTICE
This presentation has been prepared by Aker BioMarine AS (the "Company"). The presentation does not constitute or form part o f, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or
otherwise acquire, any securities of the Company or any of its subsidiaries nor should it or any part of it form the basis of , or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company or
any of its subsidiaries, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. No reliance may be or should be placed by any person for any purposes whatsoever on
the information contained in this presentation, or on its completeness, accuracy or fairness .
This presentation contains summary information only and does not purport to be comprehensive and is not intended to be (and s hould not be used as) the sole basis of any analysis or other evaluation. No representation, warranty, or
undertaking, express or implied, is made by the Company, its affiliates or representatives as to, and no reliance should be p laced on, the fairness, accuracy, completeness or correctness of the information or the opinions contained
herein, for any purpose whatsoever. Neither the Company nor any of its affiliates or representatives shall have any responsib ility or liability whatsoever (for negligence or otherwise) for any loss whatsoever and howsoever arising
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and will not be, updated to reflect material developments which may occur after the date of the presentation .
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examination of historical operating trends, data contained in the Company’s records and other data available from third parti es. Although the Company believe that these assumptions were reasonable when made, these assumptions
are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Forward-looking statements are not
guarantees of future performance and such risks, uncertainties, contingencies and other important factors could cause the act ual results of operations, financial condition and liquidity of the Company or the industry to differ
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This Presentation shall be governed by Norwegian law and any dispute arising in respect of this Presentation is subject to th e exclusive jurisdiction of the Norwegian courts with Oslo District Court as legal venue.
2
1
COMPANY OVERVIEW
3
THROUGH MILLIONS OF YEARS OF EVOLUTION THE MOLECULES AND NUTRIENTS FROM
KRILL HAVE BECOME IMPORTANT FOR ALL LIFE ON THE PLANET
THE OPPORTUNITY 15 YEARS OF TECHNOLOGY
& PROCESS DEVELOPMENT
▪ Largest biomass on the planet
▪ Developing technology for sustainable harvesting
▪ Present in 70% of the planet’s surface
▪ Inventing processes to refine out essential molecules
▪ At the bottom of the food chain
▪ R&D to document the importance and development
potential of these molecules for life
▪ Commercializing our findings and knowledge FAST
GROWTH
UNPARALLELED SCALE & KNOWLEDGE
▪ Unbeatable scale
▪ Deep knowledge resulting in 76 patents and a INCREASING
sizeable and actionable innovation pipeline MARGINS
▪ Large and diversified customer and product base
4
AKER BIOMARINE IS THE FAST GROWING WORLD LEADER WITHIN KRILL WITH A 70% SHARE
OF THE GLOBAL HARVEST
445 2
KEY COMPANY FACTS CUSTOMERS SEGMENTS REVENUE DEVELOPMENT
▪ World leader within krill harvesting and processing,
accounting for ~70% of global harvest 1 and ~80% of global USDm
krill oil production 246
+41%
▪ Founded on the strong belief in the positive health
effects of krill. Pioneer in krill research and has invested +80%
tens of millions of dollars over the last 15 years 154
▪ Sustainability has been at the core through focus on 124
71
preventing lifestyle diseases, increasing resource
utilization, and promoting sustainable fishery practices 76 4 39
PATENTS VESSELS
▪ Launching own US brand in Q2 2020
10 504
LOCATIONS PEOPLE 17 18 19 Q1 19 Q1 20
GEOGRAPHIC BREAKDOWN OF REVENUE PRODUCT BREAKDOWN OF REVENUE EBITDA DEVELOPMENT*
% of 2019 revenue % of 2019 revenue before
eliminations USDm
APAC Qrill Aqua +74% 53
23% 27%
North 39
Row Superba Pet & HP
America +268%
12% 37% 5%
42%
EMEA Brands 18
13
24% 32% 3
17 18 19 Q1 19 Q1 20
*adjusted
5
1Source:CCMALR. Aker BioMarine operates in the markets for aquaculture feed industry, human supplements industry and the pet food industry with its krill based products. Please see the appendix for further details of the market
where Aker BioMarine operates.
RECENT STRATEGIC INVESTMENTS AND INITIATIVES BUILT UNIQUE
CAPABILITIES, POSITIONING AKER BIOMARINE FOR STRONG GROWTH
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Delisted the New CEO, Fully integrate Focus on own Build US Roll-out of own
Phases company from Matts Johansen own value chain research and IP distribution products
Oslo Børs portfolio
Saga Sea
Antarctic Sea
Vessels La Manche (support vessel)
Antarctic Endurance
Provider
Reinforced focus on developing the end-consumer market and R&D
Decoupling of pricing from commodity products
Diversification of contracts
Strategic
initiatives Epion launch
Human protein
Dog food brand
Acquisition of Houston plant for krill oil production
Acquisition of Neptune IP
Acquisitions
Acquisition of Enzymotec
Acquisition of Lang Pharma
Built industry leadership in terms of capacity, scale and unit costs with reduced earnings volatility backed by strong contract portfolio
Fully integrated value chain enabling Aker BioMarine to push the development of the market to drive growth and optimise margins
6
FULLY INTEGRATED VALUE CHAIN RESULTS IN UNIQUELY EFFICIENT BUSINESS MODEL,
LOWER VOLATILITY, INCREASED SPEED TO MARKET AND HIGHER MARGINS
Harvesting Ingredient production R&D Krill oil production Sales & marketing Distribution & brands
69% of global
krill catch1 30% reduction in
CO2-emissions ~60 published
studies >80% of global krill
oil production ~65 countries
sold to 35k retail outlets
reached in the US
▪ Clear global leader in krill ▪ Production of krill ▪ Significant investments in ▪ Purpose-built oil extraction ▪ Global B2B and B2C sales & ▪ Unique inroads to US
fishing ingredients onboard R&D over the last ~15 years plant in Houston, Texas marketing organizations retailers through Lang’s
unique, purpose-built long-standing relationships
▪ Three state-of-the art krill vessels simultaneously to ▪ Research has proven ▪ Acquisition of Lang brings ▪ In-house sales and with the major 7 US
vessels secure stable fishing several significant benefits expertise in private label distribution team for retailers
production with total of Krill to humans and manufacturing of ingredients business
harvest capacity of ~74,000 ▪ Significant reduction of animals alike supplements for humans as enables deeper ▪ Epion launching own brand
MT in 2021 CO2 emissions due to well as strong ties to 85% of relationships and higher of krill oil supplement,
reduced need for vessels to ▪ The positive results have relevant US retail industry margins Kori, in Q2 2020
▪ Long season of up to 10 transport catch to shore helped in building
months secures consistent and return to fish awareness around and ▪ Significantly increased ▪ Worldwide target market ▪ Significant resources
supply demand for krill products margins by owning the and distribution committed to developing
▪ >40% of revenue base entire value chain from the brand and consumer
▪ Highly sustainable harvest produced and packaged on- harvest to consumer brand facing organisation
with zero bycatch board vessels
More than USDm 600 invested over the last 10 year in building fully integrated value chain
7
1Source:CCMALR. Aker BioMarine operates in the markets for aquaculture feed industry, human supplements industry and the pet food industry with its krill based products. Please see the appendix for further details of the market
where Aker BioMarine operates.
STRONG MANAGEMENT AND BOARD OF DIRECTORS SUPPORTING VALUE CREATION
MANAGEMENT TEAM BOARD OF DIRECTORS
▪ CEO since 2015 ▪ Previous experience ▪ Responsible for ▪ Chairman of the ▪ Aker ASA’s main
▪ Previous experience as CFO of Yara’s global sales and board since 2014 owner
as COO of Aker Production marketing of ▪ Previous experience ▪ Has been the
BioMarine and Chief segment, 10+ years Human Nutrition & as Investment driving force in the
Marketing Officer in various senior Health products Director of Aker development of
at Telefonica O2 corporate financial ▪ Previous experience ASA for 10+ years, Aker since the
▪ Studied at Oslo positions in the as a Management President and CEO 1990s
2009 2018 2010
University College Aker system and Consultant for of Epax ▪ Director of Aker BP,
from McKinsey & Capgemini ▪ NED in several Kvaerner, Ocean
Company ▪ Master’s degree in technology Yield and Aker
Matts Johansen Katrine Klaveness ▪ Holds a Master’s
Tim de Haas Economics from the
Ola Snøve companies
Kjell Inge Røkke Energy
CEO CFO from BI Norwegian EVP Human Health University of Chairman including Cognite Director
Business School and Nutrition Hamburg
▪ Previous experience ▪ Oversees the entire ▪ Experience from a ▪ CFO in Aker ASA in ▪ Previous experience
from several senior supply chain from variety of strategy, from 2015 to 2019 as partner and
consulting positions harvest to product and ▪ Previous experience chairman in BA-HR
at PwC and production business as President & CEO ▪ Board chairman in
Accenture ▪ 25 years of development roles of Akastor, a Aker Solutions,
▪ Master’s degree experience with including at Ecolab variety of executive Aker BP, Cognite,
from the Norwegian global supply chain and BCG positions in the Aker Capital, Aker
2011 2015 2017
University of operations ▪ MBA from Harvard Aker group and as Kværner and
Science and ▪ Previous experience Business School and Operating Director director of Aker
Technology and from Nycomed, a B.S. in Chemical at Paine & Partners Energy, Akastor,
Kristine Hartmann University of New
Tone Lorentzen Amersham, GE
Shauna C. McNeill Engineering from
Frank O. Reite ▪ Chair of the board
Øyvind Eriksen The Resurce Group
EVP Transformation Orleans EVP Supply Chain Healthcare and EVP Innovation the University of Director in Ocean Yield Director TRG and
Trygg Pharma Minnesota Reitangruppen
▪ Previous experience ▪ Previous experience ▪ Previously ran Aker ▪ VP of Science and ▪ Technical Director,
from BioMar and as the President BioMarine’s Regulatory Affairs Offshore Operations
the Norwegian and COO at Sabinsa Marketing and at AKBM at Aker BioMarine
Ministry of Fisheries and has more than Innovation ▪ Previous experience ▪ Experience from
▪ Master’s degree 40 years of department and has as a regulatory several roles in
from the Norwegian experience from experience from associate at LINK Aker BioMarine’s
School of Life the nutraceutical senior positions at Medical Research offshore
2007 2010 2015
Sciences and a PhD industry Coca-Cola and PwC and as a post operations,
from the Norwegian ▪ Has a B.A. degree ▪ Has a Master’s doctor at the manager roles at
Veterinary College in Business degree from BI Norwegian Radium Ramoen and Chief
Sigve Nordrum Todd Norton Management
Trond A. Smedsrud Norwegian School Line Johnsen Hospital
Sindre Skjong Engineer at Skaregg
EVP Animal Health EVP Special Advisor EVP Strategic of Management Director (employee ▪ PhD in Biochemistry Director (employee ▪ Chief Engineer class
and Nutrition Investments elected) from UiO elected) I, Cooling Engineer
and Coastal Captain 8
x Year joining Aker BioMarine
AKER BIOMARINE GROUP CONSISTS OF THREE COMPANIES WITH DISTINCT CAPABILITIES
Ingredients Brands
▪ Aker BioMarine produces and markets ingredients for ▪ State-of-the-art healthcare manufacturing company ▪ Epion is Aker BioMarine’s FMCG brand company
aquaculture and dog feed based in the US, acquired by Aker BioMarine in 2019
▪ Hired significant expertise from the FMCG industry to
▪ Proven to increase growth and robustness in salmon and ▪ Expertise in producing private label brands for the ensure rapid roll-out and success
to improve quality of filet largest US retailers
▪ Value chain integration and business model ensures a
▪ Dogs also benefit from including up to 5% Qrill in the ▪ Established direct access to ~85% of the relevant higher share of the retail sales price to the Aker
feed retail market BioMarine group, enabling significant investments in
marketing to reach scale quickly
▪ The Qrill product range consist of krill meal, oil and high ▪ Produces the Kori krill oil brand for Epion
protein specialty meal ▪ Launching first product, Kori, in 2020 in the US
▪ Superba is the B2B brand for high quality krill oil for ▪ Ambition to become a USDm 100 brand company
human consumption sold in bulk to brand owners Strong relationships with the largest retailers within 5 years
Revenue breakdown 2019
Share of revenues 2019 Share of revenues 2019
32% 32%
68% 68%
9
KRILL IS THE WORLD’S LARGEST BIOMASS AND MOST SUSTAINABLE FISHERY, AND PROVIDES
SIGNIFICANT BENEFITS TO HUMANS, PETS AND OTHER ANIMALS
Ingredients
Proven preventative health Krill is 2x as effective in increasing the Krill supplements results in a higher
KRILL CAN PROVIDE SIGNIFICANT BENEFITS TO Omega-3 Index as fish oil4 Omega-3 levels than eating fish
SOCIETY AS A WHOLE ingredients 3x/week5
2x
6,3
..for the 70% of the world 5,3
Improves
resource population with omega 3 deficiency1
Reduces the
efficiency
burden of
through Fish oil Krill Three Krill oil
lifestyle diseases
sustainable food fish supplement only
production meals
Facilitates
sustainable Faster growth (grams)6
fisheries Multi-functional sustainable Improved heart health
Visible fat (%)7
marine ingredients
+24 %
..for the USDbn ~200 aquaculture
WHAT IS KRILL? industry2
315 330 70%
267
40%
▪ Antarctic krill (Euphausia Superba) are paper clip-sized, shrimp-like
crustaceans that play a key role in the oceans’ ecosystem
Control Qrill Aqua Qrill Aqua Control Qrill Aqua
▪ Krill are present in most oceans around the world, however, they 7.5% 15%
gather together in huge swarms in the pristine waters of Antarctica
to feed on microscopic algae and are harvested by Aker BioMarine 6% Qrill Pet increases omega-3
Reducing inflammation
there Healthy and delicious natural index, EPA and DHA levels in dogs8
CRP, Post-race9
significantly in six weeks
▪ Packed full of health promoting long-chain omega-3 fatty acids ingredient
(EPA & DHA), phospholipids, choline and astaxanthin -54%
2.2x
▪ The Convention of the Conservation of Antarctic Marine Living ..for the 850 million pet cats
Resources (CCAMLR), an international treaty, regulates krill and dogs in the world3
harvesting in a sustainable way (quota of ~1% of biomass)
Fish oil Krill Fish oil Krill
10
Sources: 1. “System approach to quantify the global omega-3 fatty acid cycle”, Hamilton et al., Nature, 2020 2. “Global Aquaculture market”, Business Wire, 2017 3. “Winning in Pet Care”, Nestlé, 2019. 4. Ramprasath VR, Eyal I, Zchut
S, Jones PJ. Lipids Health Dis. 2013, 5. Rundblad A, Holven KB, Bruheim I, Myhrstad MC, Ulven SM. J Nutr Sci. 2018 Jan 17;7:e3, 6. Hatlen et al. 2016, 7. Mørkøre et al., Nofima, 2020, 8. Aker BioMarine , 9. Burri et. Al (2018), Res Vet.AKER BIOMARINE IS THE WORLD LEADING MANUFACTURER OF INGREDIENTS FROM KRILL
WITH A STRONG AND DIVERSIFIED CONTRACT PORTFOLIO
Ingredients
Key products Description Share of ‘19 sales % GM Houston factory purpose-built for krill oil production
▪ Purpose-built plant for processing and production
▪ Powder created by cooking, drying and of krill oil located in Houston, Texas
grounding whole Antarctic krill 39% ▪ Produces ~85% of all krill oil globally
▪ Functions as a feeding stimulant leading ▪ Proprietary Flexitech TM technology enables Aker
to increased feed uptake and enhanced BioMarine to produce krill oil of unmatched
growth quality, with higher content of beneficial
compounds and no off-putting flavours and odours
▪ Highly sustainable factory design and operations,
recycling and re-using the vast majority of ethanol
▪ Protein rich product used in formulated and water needed in production
diets for aquaculture nutrition ▪ 70 employees
▪ Excellent source of marine protein for
fish and shrimp, leading to increased
feed uptake and enhanced growth
5%
Long term contracts with predictable volumes and pricing
▪ Dog food ingredient sold to multiple
European and US brands ▪ Customer contracts are based on fixed
prices and de-coupled from the Spot market
▪ Up to 5% added in feed
commoditised fishmeal market, ensuring 9%
▪ Multiple scientifically proven benefits to less volatile revenue and more
dogs 2% predictability
▪ >55% of volume is bound to long-term
contracts (3-5 years), with majority of 33%
▪ White label krill oil for human 57% Long-terms
supplements remaining volumes on shorter contracts contracts
with predictable volumes and only ~10%
▪ Natural combination and concentration traded in the spot market
of four key nutrients: omega-3, 54% 1 year
phospholipids, choline, and astaxanthin ▪ Diversified customer base with top 20 contracts and / or
accounting for ~70% of revenue predicatble volumes
▪ Growing body of evidence demonstrates
krill oil's beneficial effects on health
11AKER BIOMARINE HAS ESTABLISHED SIGNIFICANT EXPERTISE IN PRODUCING FINISHED
CONSUMER GOODS THROUGH THE ACQUISITION OF LANG AND CREATION OF EPION
Brands
▪ Full service, mass market private label and brand manufacturer ▪ Established by Aker BioMarine to develop consumer brands of krill based products
▪ Acquired in order to gain pharmaceutical production capabilities and better access to US ▪ Experienced team of four who have taken several successful brands to market
retailers
▪ Rationale for establishing own brand is to push the development of the industry through
▪ Delivers turnkey solutions, managing the entire development of process from prototype education of the end consumer
development and raw materials sourcing, through regulatory review, and packaging
production ▪ Strategy to re-invest EBITDA into marketing allowing for market development while
retaining the same margin to Aker BioMarine as supplying a third party
▪ Significant in-house R&D capabilities, leveraging a global network to track emerging
ingredients, technology, IP and science in order to quickly bring new market leading ▪ Launching Kori, a krill oil supplement for humans, as its first product in Q2 2020
products to the shelf ▪ Kori is a high gross margin product, and with full effects from Kori, Aker BioMarine’s gross
▪ Produces 146 products across 15 categories for all major US retailers margin is targeted to be >70% as a whole
▪ 62 employees (as of Q1 2020) ▪ Exciting pipeline with further products being developed
Revenue breakdown per customer Revenues1 Kori
2019 USDm
+9 % ▪ First brand launched by Epion – Traditional Kori
krill oil supplement for humans
90 BRAND
86
▪ Launching in the US market PROFIT
75
through multiple of the largest MARKETING
MARKETING
+89 % retailers
RETAILER RETAILER
▪ Launched in CVS and Target MARGIN MARGIN
33 AKER MARGIN AKER MARGIN
▪ Passed USDm 1 in revenues
COGS COGS
17
▪ Launching in Walmart in June
2017 2018 2019 Q1 Q1
2019 2020
12
1. Full year 2019 included2
INVESTMENT HIGHLIGHTS
13AKER BIOMARINE INVESTMENT HIGHLIGHTS
UNDERDEVELOPED MARKET WITH IMMENSE GROWTH POTENTIAL DUE TO HEALTH MEGATRENDS AND GLOBAL PROTEIN
1 SHORTAGE
KRILL BASED INGREDIENTS ARE UNIQUELY POSITIONED DUE TO SUPERIOR NUTRITIONAL PROFILE AND PROVEN HEALTH
2 BENEFITS, PROTECTED BY INTELLECTUAL PROPERTY
INHERENT HIGH ENTRY BARRIERS COMBINED WITH UNIQUE INFRASTRUCTURE AND TECHNOLOGY SECURES LASTING
3 LEADERSHIP IN THE INDUSTRY
SUSTAINABILITY AT THE CORE OF THE BUSINESS – DEDICATED CONTRIBUTOR TO ACHIEVING THE UN SUSTAINABLE
4 DEVELOPMENT GOALS
5 HIGHLY VISIBLE PATH TO REALIZING SIGNIFICANT GROWTH THROUGH NEW MARGIN ENHANCING SEGMENTS
6 STRONG FINANCIAL PROFILE WITH COMPANY SET FOR FURTHER GROWTH ON THE BACK OF SIGNIFICANT INVESTMENTS
14AKER BIOMARINE IS WELL POSITIONED TO CAPITALIZE ON THE GROWING
NEED FOR SUSTAINABLE FOOD AND HEALTH PRODUCTS 1
HEALTH CRISIS FOOD PRODUCTION PARADOX
Dramatic increase in deaths from chronic Exploitation of farmable land
diseases across the world1
Global deaths Leading causes of death
2050 is already unsustainable…
Greenhouse gas intensity
T CO2e / T Edible protein
57 m Beef 337
Pork 58
10bn People Poultry 42
Salmon 10
!
Krill oil 7
!
70% Lifestyle
! Krill meal 5
diseases
! Protein
2018 +100% demand
…and we are not using our Global fish stock
With a substantial cost for societies, people oceans effectively Mill. tonnes live weight3
and companies
Aquaculture Wild catch
Food
945 billion USD estimated annual global health care costs
+70% production
76
109
13 7
of high BMI (2020)2 26
86 92
59
1.65 trillion USD spend on treating chronic disease in the ‘90 ‘15 ‘30E
US and expected to reach more than 6 trillion USD by 20503 93% of fish stocks are
maximally or over exploited
15
Sources: 1. “Global Burden of Disease”, The Lancet via. Healthdata.org, 2017, 2. “Calculating the costs of the consequences of obesity”, Worldobesity.org, 2017, “The Case for Enhancing the Congressional Budget Analysis Process”,
Partnership to fight chronic disease 3. FAO, State of Global fisheries, 2019AKER BIOMARINE HAS INVESTED SIGNIFICANTLY IN R&D AND IP TO
UNCOVER THE IMMENSE HEALTH AND NUTRITION POTENTIAL FROM KRILL 2
Pre 08 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Confidential
Confidential Confidential Confidential
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Salmonids Confidential Confidential
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Marine, Confidential
freshwater Confidential Confidential Confidential Confidential Confidential
Confidential
fish and Confidential
others Confidential Confidential Confidential Confidential
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Shrimp Confidential Confidential Confidential Confidential
Confidential Confidential Confidential Confidential Confidential Confidential
Dog Confidential Confidential Confidential Confidential Confidential Confidential Confidential Confidential
Chicken Confidential Confidential
Confidential Confidential Confidential
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Heart health Confidential
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& metabolic Confidential Confidential Confidential Confidential Confidential Confidential Confidential
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syndrome Confidential Confidential Confidential
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Joints & Confidential Confidential Confidential
inflammation
Confidential Confidential Confidential Confidential Confidential Confidential Confidential
Woman Confidential Confidential Confidential
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Brain Confidential Confidential Confidential Confidential Confidential Confidential
Confidential Confidential Confidential Confidential Confidential Confidential Confidential
Safety and Confidential Confidential Confidential Confidential
fundamental Confidential
Confidential Confidential Confidential Confidential Confidential Confidential Confidential
16SCIENTIFICALLY PROVEN KRILL PRODUCTS PUT AKER BIMARINE IN PRIME
POSITION TO LEVERAGE THE RAPIDLY GROWING AQUACULTURE FEED MARKET 2
INCREASED GROWTH AND YIELD IMPROVED GROWTH
Grams
▪ Improved appetite and hence increased feed conversion and growth
+24 %
▪ Attractant properties key part of shrimp value proposition 315
330
267
▪ Key benefit for starter feed and growth feed pre-slaughter
Control Qrill Aqua Qrill Aqua
7.5% 15%
Source: Hatlen et al. 2016
IMPROVED FISH HEALTH AND ROUBUSTNESS IMPROVED HEART HEALTH
Visible fat (%)
▪ Improved heart and liver health
▪ Increases fish robustness for virus, illness and treatments (e.g. lice) 70%
40%
Control Qrill Aqua
Source: Mørkøre et al., Nofima, 2020
IMPROVED FILET QUALITY FIRMER FILETS
Filet Firmness (N*s)
▪ Increased muscle health – firmer with less gaping and fewer dark spots
195
▪ For shrimp QRILL improves taste and visual appearance
180
Control Qrill Aqua
Source: Hatlen et al. 2016
17QRILL PET IS PROVEN TO HAVE SUPERIOR HEALTH BENEFITS FOR DOGS,
REPRESENTING THE FIRST PET TARGET GROUP FOR AKER BIOMARINE 2
POSITIVE HEALTH BENEFITS OMEGA-3 PHOSPHOLIPIDS FROM QRILL PET REDUCE
▪ The nutritional ingredients in the QRILL Pet has a range of positive health benefits for the
INFLAMMATION AND MUSCLE DAMAGE AFTER DOG SLED RACE
dog
▪ The power of QRILL Pet is the unique Omega-3 phospholipids and proteins Reducing inflammation
C-reactive protein (PMOL/L)
▪ The best delivery form for EPA and DHA - better uptake than other omega-3 sources
4.2x Pre-race
▪ Represents the building blocks of all cell membranes Post- race
37
▪ In addition, QRILL Pet also has other key nutritional benefits 2.9x
▪ Krill is rich in highly palatable marine proteins
17
▪ Astaxanthin keeps products fresh and stable over time – natural preservative 7
4
▪ Choline an essential nutrient that has multiple physiological roles in the body
Control QRILL Pet
Reducing muscle damage
Creatine kinase (IU/L)
Pre-race
6.9x Post- race
716 4.1x
516
99 100
Control QRILL Pet
Source: Burri et al. 2018 Res Vet Sci (Results from the 1600 km Iditarod race)
18SUPERBA’S STRONG VALUE PROPOSITION HAS LEAD TO A GROWTH
SIGNIFICANTLY HIGHER THAN THE INDUSTRY AS A WHOLE 2
OMEGA-3 FATTY ACIDS EPA & DHA CONTINUED GROWTH IN THE DIETARY
SUPPLEMENTS INDUSTRY
One of the most researched nutrients with a wide range of
health benefits from heart, eyes, liver, skin, joint, inflammation Dietary Supplements - Global retail value
and brain +5%
+4% 82
78
68 71 75
BETTER DELIVERY FORM1 65
44
Phospholipids help omega-3 integrate into the cell membranes
and gives a significant better delivery to the body’s cells and
organs compared to other omega-3 sources
USDbn
ESSENTIAL NUTRIENT2 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Source: Euromonitor, 2020
Choline is an essential nutrient, vital for many body functions
such as nerve signalling, liver and muscle functioning.
90% of the US population is deficient in Choline SUPERBA GROWTH (2017-2019) CAGR
Volume growth
NATURAL PRESERVATION
Natural antioxidant astaxanthin protects the krill oil from +12%
oxidation, eliminating the need to add preservatives
NO FISHY AFTERTASTE
MT
The phospholipid form means that the oil mixes well with the
stomach contents, preventing unpleasant aftertaste, digestive
issues and improves consumer experience
17 19
19
SourceS: 1. Ramprasath et. Alt 2013; 2. Jensen, H.H.; Batres-Marquez, S.P.; Carriquiry, A.; Schalinske, K.L. Choline in the diets of the us population: Nhanes, 2003-2004. FASEB J 2007, 21, LB46. and Fischer, L.M.; daCosta, K.A.;
Kwock, L.; Stewart, P.W.; Lu, T.S.; Stabler, S.P.; Allen, R.H.; Zeisel, S.H. Sex and menopausal status influence human dietary requirements for the nutrient choline. Am J Clin Nutr 2007, 85, 1275-1285.LARGE ENTRY BARRIERS SECURE AKER BIOMARINE’S LONG TERM POSITION
AS UNDISPUTED LEADER IN SUSTAINABLE KRILL HARVESTING 3
LARGE ENTRY BARRIERS SECURE AKER BIOMARINE’S LONG TERM
UNBEATABLE EFFICIENCIES IN THE FISHERIES
POSITION AS UNDISPUTED LEADER IN SUSTAINABLE KRILL HARVESTING
Krill harvest in Area 48 and 58 and precautionary quota Total expected 2020 krill harvest by vessel
‘000 MT
69% 31%
892 892 892 892 892 Norway (Aker BioMarine)
South Korea
62
359 360 308 243 170 China
111 142
108 99 388
153 161 201 235 Chile
16 17 18 19 20*
Ukraine
Aker BioMarine Remaning quota in area 48 Total
Others Remaning quota in area 58.4.1 and 58.4.2
ENFORCED IP-PORTFOLIO
76 patent >1200 patent
families claims
20
*Harvesting levels for 2020 are illustrative and based on estimates
Source: CCMLARSUSTAINABILITY AT THE CORE OF THE BUSINESS – DEDICATED
CONTRIBUTOR TO ACHIEVING THE UN SUSTAINABLE DEVELOPMENT GOALS 4
(1/2)
QUOTA
PIONEERING
S U S TA I N A B L E
FISHERIESSUSTAINABILITY AT THE CORE OF THE BUSINESS – DEDICATED
CONTRIBUTOR TO ACHIEVING THE UN SUSTAINABLE DEVELOPMENT GOALS 4
(2/2)
KRILL, THE WORLDS LARGEST GREENHOUSE GAS INTENSITY INCREASE IN GROWTH
BIOMASS (t CO2e / t EDIBLE PROTEIN) (GRAMS)
337
Regular feed
INGREDIENT
FOR A MORE Qrill Aqua
S U S TA I N A B L E 58
=
+18%
42 325 million
A Q U A C U LT U R E 5 10
extra meals
Krill Salmon Poultry Pork Beef
REDUCING PRESSURE ON THE WORLD NEEDS SUSTAINABLE INCREASING EFFICIENCY AND
OVERFISHED FISH STOCKS SOURCES OF PROTEIN HEALTH OF AQUACULTURE
9000 studies
document the effects of
Omega-3’s
SPENT ON SAVED* BY
D E D I C AT E D T O OMEGA 3’S SOCIETY
IMPROVING
AKBM 60 clinical studies
H U M A N H E A LT H ROLE 15 PHD’s
HEART LUNG DIABETES
OMEGA-3 HELPS PREVENT CONTRIBUTING TO SCIENCE, IMPACT FOR
LIFESTYLE DISEASES KNOWLEDGE AND INNOVATION VULNERABLE GROUPS
22
* Source: Food Supplements Europe “Healthcare Cost Savings of Omega 3 Food Supplements in the European Union”HIGHLY VISIABLE PATH TO REALIZING SIGNIFICANT GROWTH THROUGH
NEW MARGIN ENHANCING SEGMENTS 5
CLEAR MARGIN POTENTIAL FROM INNOVATIONS DEVELOPING A NEW DOG FOOD DEVELOPING A PROTEIN POWDER TO UTILIZE MORE OF
AND A MOVE TO HIGHER MARGIN END-MARKETS BUSINESS TO TAP INTO THE USDbn THE KRILL AND LIFT MEAL MARGIN
90 GLOBAL PET FOOD MARKET
Executing on a range of innovation types Plant capacity Global Protein Product
▪ 225m dog owners globally 5,000
MT Revenue USDbn
spending increasing time and
resources on their pets +7%
New business 43 46
35 38 40
model Confidential ▪ Premium dog food is the largest 33
growth segment the last years,
with growth expected to 100
accelerate
Existing 21 23 25 27 29 19 20 21 22 23 24
business ▪ The experience from Kori will be
Commercial plant capacity Demand Sports products Meal replacement
Model Fundamental utilized to secure world class
research Nutrition Drinks Supplements
execution and speed to market Launch plant capacity
▪ First sale to retail planned in
2022
Existing technical New technical or
or knowledge knowledge
competences competences US Dog Food sales
Revenue 2019, USDbn
Established Development Market Exploration ▪ Aker BioMarine is working on a project to use krill protein that currently
Economy goes to the aqua market for human consumption
Margin uplift (2.7%) ▪ Technical proof of concept validated with pilot scale production on-going
per kg krill meal ▪ Launch plant design in-progress to validate technology, costs and initiate
(Product sales price less product unit
cost times the yield from krill meal) 5% market development
Medium Premium ▪ Investment in Launch plant in 2021 of USDm 13.5 with up to 100 MT of
USDbn annual capacity, investment in commercial plant mainly in 2023 and 2024
3.6% 39 % 5.2% at USDm 75 with 5,000 MT annual capacity
23.6 56 %
Aqua feed Pet food Protein Krill oil Krill oil
ingredients ingredients powder supplement supplement
ingredients ingredients branded
x% CAGR 2015-2019
23
Sources: Aker BioMarine internal analysis, Euromonitor international, 2018/2019STRONG REVENUE AND EBITDA GROWTH AS THE COMPANY IS CLOSE TO
FULLY INVESTED AND READY TO REAP THE REWARDS 6
REVENUE EBITDA, adjusted
USDm USDm
246
53
+41%
+74%
39
154
124
+80%
+268%
71 18
13
39
3
17 18 19 Q1 19 Q1 20 17 18 19 Q1 19 Q1 20
▪ Strong revenue growth due to increasing production capacity through new vessel, ▪ Rapid EBITDA growth as scale has been reached
better contracts and improved product mix with higher prices achieved
▪ Increasing margin trend set to continue driven by improved product mix and
▪ Lang included from March 2019 further economies of scale
▪ Antarctic Endurance with full production in 2021
▪ Q1 generally a seasonally slower quarter
243
STRATEGY AND BUSINESS PLAN
25STRATEGIC PRIORITIES AND PROJECTS DRIVING AKER BIOMARINE’S
GROWTH AMBITIONS
1 MAINTAINING OUR LEADERSHIP IN KRILL FISHERIES
2 KEEPING AN ACTIONABLE INNOVATION PIPELINE WITH IMMENSE POTENTIAL
3 DEVELOPING A BEST IN CLASS PROTEIN POWDER FOR PEOPLE
4 CAPITALIZING ON THE GROWING IMPORTANCE OF PRIVATE LABEL
5 BUILDING CLOSER RELATIONSHIPS WITH THE END-CONSUMER
6 EXPANDING INTO A NEW B2C PET FOOD BUSINESS
7 CONTINUING TO ATTRACT AND RETAIN GREAT PEOPLE
265 YEAR ASPIRATION TO BUILD A USDM 200 EBITDA COMPANY WITH A STRONG CONSUMER
BRAND
5 YEAR ASPIRATION ILLUSTRATIVE EBITDA DEVELOPMENT ADDITIONAL UPSIDE
USDm
EBITDA margin
BRANDED PRODUCTS
▪ Epion targets to be a USDm ~100
business in 2024 contributing 0 in
USDM 200 EBITDA due to marketing
IN EBITDA ~30%
reinvestments
▪ Expanded into dog food with
estimated launch in 2022
STRONG INNOVATION PIPELINE
STRONG OWN 21%
▪ Full commercial launch of protein
BRAND WITH products
SIGNIFICANT 53
EBITDA
POTENTIAL ▪ Other candidates for new products
identified and under development
2019 2020 2021 2022 2024
27
Note: The targets indicated represent the Company's current goals, and should not be construed as estimates or guiding for future developmentsGROWTH SUPPORTED BY CLEARLY VISIBLE DRIVERS
2019 2020 2021 2022 2023 - 2024
~41,000 mt ~60,000 mt ~74,000 mt ~74,000 mt
Harvesting
capacity Antarctic Endurance at Antarctic Endurance at Antarctic Endurance at Antarctic Endurance at ~74,000 mt
increase ~22% of total capacity ~75% of total capacity ~95% of total capacity ~100% of total capacity
of ~32,000 mt of ~32,000 mt of ~32,000 mt of ~32,000 mt
Very high Double digit growth
40,872 mt on the back of on the back of Lower growth Stable
capacity increase capacity increase
Growth on
products with
higher prices Very high Double digit growth
96 MUSD Lower growth
KO, ingredients segment
on the back of demand growth on the back of demand growth Lower growth
and development of the market and development of the market
Very high brands growth
Launch of Epion
Brands making up
Building 50%+ of revenues
Lang net sales
own brands of USDm 82 in 2024
operation Epion targets to be a
Very high brands growth USDm ~100 brand
company by 2025
~20 – 30% ~15 – 20% ~10 – 15%
Organic growth ~15% on the back of capacity increase with highest growth in 2020
without further capacity without further capacity
expansions expansions
28
Note: The targets indicated represent the Company's current goals, and should not be construed as estimates or guiding for future developments4
FINANCIALS
29AKER BIOMARINE HAS EXPERIENCED LIMITED IMPACT FROM THE COVID-19 CRISIS
▪ A vertically integrated value chain reduces risk to business continuity
▪ Currency and fuel exposure make Aker BioMarine counter cyclical
▪ Established a team late February to take necessary mitigating actions and monitor the situation
▪ Revenues in April 2020 of USDm 24.5 versus April 2019 of USDm 18.7 (+31%)
IMPACT ON OUR BUSINESS
HARVESTING AND MEAL PRODUCTION HEALTH SUPPLEMENTS MARKET
Harvesting and producing as planned No observed negative impact on sales
Plans in place and initiated for crew change and access to Increase in orders from customers retailing online
spare parts and consumables Expect neutral impact on demand
AQUACULTURE MARKET
KRILL OIL PRODUCTION
No observed negative impact on sales
Producing as planned and classified as an essential business
Expect knock-on effect from HORECA on premium segments
Critical function contingency plan in place
Expect positive long-term impact from acceleration of
Sufficient stock of spare parts and consumables
healthy food focus in key markets
OUTBOUND LOGISTICS
Able to deliver to all customers, but experiencing some
delays, limited exposure to air freight
30STRONG REVENUE VISIBILITY THROUGH LONG TERM CONTRACTS AND
RELATIONSHIPS
MAJORITY OF REVENUE FROM LONG TERM DIVERSIFIED CUSTOMER BASE AND STRONG RELATIONSHIPS WITH KEY CUSTOMERS
CONTRACTS
Ingredients contract base1 Ingredients customer base2 Brands customer base3
% of revenue % of revenue % of revenue
Spot market Other
Customer 1 accounts
9% 17,3% 13,1% Customer 1
Other 26,0%
accounts
29,4%
Customer 5
12,0%
1 year Customer 2
contracts 14,0%
and/or
predictable Long-term
volumes contracts
33% 57% Customer 4
13,0% Customer 2
Customer 3 18,8%
8,0%
Remaining
top 20 Customer 4
customers Customer 5 7,7% Customer 3
19,0% 4,7% 17,2%
▪ Customer contracts based on fixed prices and de- ▪ Diversified customer base with top 20 customers ▪ Unique access to 85% of the US retail market and strong
coupled from the commodity market, ensuring less accounting for ~70% of revenue relationships with the largest retailers
volatile revenue and more predictability
▪ Customer base further diversified across geographies
▪ 57% of volume is bound to long-term contracts (3-5
years), with the majority of remaining volumes on
shorter contracts with predictable volumes and only 9%
traded in the spot market
31
1Data for Aker BioMarine only, 22020 contracted revenues for Aker BioMarine (certain customers are part of the same corporate group), 3Based on 2020 contracted revenues for LangSIGNIFICANT TOP-LINE GROWTH AND STRONG GROSS MARGINS
REVENUE AND GROSS MARGIN DEVELOPMENT COMMENTARY
Revenue and gross margin development ▪ Lead time of ~6 months from production to revenue recognition
USDm
▪ Significant revenue increase in 2019 due to inclusion of Lang from 1
March 2019 (implied full year revenue of USDm 253)
▪ Increased margins on Qrill Aqua due to decoupling strategy
▪ Increased krill oil sales in 2019 and Q1 2020 with krill oil accounting for
246,0 ~64% of total revenues in Q1 2020
▪ In Q1 2020 the gross margin was 61% on krill oil with zero margin on
Qrill Aqua due to seasonality
▪ Brands revenue account for 30-40% of overall revenues
▪ The group targets to increase gross margin to up to ~45% during the
next 5 year period
154,2
124,2 42,4%
40,6%
34,1% 35,1%
33,7%
70,7
39,2
2017 2018 2019 Q1 2019 Q1 2020
Revenue Gross margin (%)
32POSITIVE PRODUCTION VOLUME DEVELOPMENT WITH INCREASED
CAPACITY FROM ANTARCTIC ENDURANCE
PRODUCTION VOLUME DEVELOPMENT PER OFFSHORE PRODUCTION VOLUME KRILL OIL INGREDIENT REVENUE
VESSEL DEVELOPMENT PER PRODUCT DEVELOPMENT
Total production per vessel Total offshore production volume by product Total krill oil sales
Thousand MT Thousand MT M USD
+63%
Vessels in yard
+40% until mid-January +40%
2020 resulting in 96
40,9 lower volumes 40,9
36,6 36,6 75
29,2 29,2 59
+6% +6%
+63%
16,4 17,4 16,4 17,4
26
16
2017 2018 2019 Q1 2019 Q1 2020 2017 2018 2019 Q1 2019 Q1 2020 2017 2018 2019 Q1 2019 Q1 2020
Antarctic Sea Saga Sea Antarctic Endurance Qrill Aqua Nutra Qrill Pet
▪ Season from mid December until September, followed by ▪ Average yield from raw krill to meal of 18% and 14% from
shipyard meal to oil
▪ Antarctic Endurance in production from mid February 2019, ▪ Growing share of Nutra production due to increasing krill oil
repairs and non-fishing periods throughout the season demand and production in Houston
▪ On average 20 fewer fishing days Q1 2020 than in Q1 2019 for ▪ Nutra meal used to produce krill oil where QHP is also an
Antarctic Sea and Saga Sea primarily due to weather outcome with a yield of 75%
conditions in Antarctica ▪ Variations between total catch volume and production
volume mainly explained by the high water content of krill
(~85%) which is removed when krill is processed to meal
33UNIT ECONOMICS HAVE SHOWN IMPROVEMENT, WITH REVENUE MIX
INCREASING PRICES AND SCALE REDUCING COSTS
INCREASING GROSS MARGIN FOR AQUA AND PET INCREASING GROSS MARGIN FOR SUPERBA
Price / MT Price / MT
+6% 0%
2017 2018 2019 2017 2018 2019
Unit cost / MT Unit cost / MT
+1%
-15%
2017 2018 2019 2017 2018 2019
▪ Aker BioMarine has been able to increase gross margin in the offshore production ▪ Increased gross margin due to significant cost reductions over the last few years
segment mainly due to increased prices from new contract structures and
▪ Substantial cost advantage compared to competitors due to company’s unique plant in
premiumification of its products
Houston
▪ In the longer historical context, cost per unit has come down significantly due to
▪ 2019 not fully representative as increased costs from Endurance had not yet
increased efficiency and expertise
translated into higher sold volumes
▪ Significant cost advantage compared to competitors due to specialised vessels with
on-board production, and integrated value chain
▪ 2019 not fully representative as certain increased costs from Endurance had not yet
translated into higher sold volumes 34COST BASE PRIMARILY DRIVEN BY SALARIES, PROFESSIONAL SERVICES,
DIRECT PRODUCTION COSTS AND FUEL
HISTORICAL OPEX DEVELOPMENT SG&A BREAKDOWN BY COST CATEGORY (2019)
Opex, by cost category 167,8 2019 SG&A, by cost category
USDm USDm Office Travel
3,8% 3,7%
Warehouse
124,2 4,6%
Consumables/ Salaries
analysis 35,7%
100,4
4,7%
Other
5,0%
Sales and
USD
46,0 marketing 76.5m
36,4 7,6%
Freight
9,7%
2017 2018 2019 Q1 2019 Q1 2020 Professional
SG&A Direct production cost offshore Onshore Fuel Encapsulation Juvel services
25,2%
▪ ~70% of opex in ingredient segment is allocated to inventory due to time period between production and sales, hence the figures ▪ SG&A also impacted by inclusion of Lang in 2019
to not match the overall P&L. In addition, certain special operating items, such as the Juvel opex is included in “Other operating ▪ Significant transaction related cost in 2018 and 2019 as well
income/ (cost), net” as higher volumes sold impacting logistics and handling
▪ Direct production cost offshore includes crew salaries, packaging, tramper cost, as well as consumables and repair and related costs
maintenance on the vessels - increase in 2019 due to inclusion of Antarctic Endurance and more volume produced ▪ R&D cost of 7% of total SG&A in 2019
▪ Fuel cost driven by higher production - primarily MGO consumption where fuel cost has increased from USD ~595/MT in 2017 to ▪ SG&A around 30% of total sales 2017-2019, including Epion
755 in 2019, fuel cost in Q1-2020 reduced to USD 729/MT, same trend in medium term. The vessels will consume around 35,000 and Lang. Expected to increase in 2020 due to marketing
MT fuel annually going forward. Aker BioMarine has hedged its fuel costs for 2021 – 2024, please see details in the appendix spend of USDm ~15 related to Kori launch
▪ Onshore costs includes salary and direct production cost such as ethanol, utilities, inventory tax and waste treatment - ▪ Professional services includes external engineering
significant increase in production volumes from 2017 main driver behind cost increase
▪ Juvel is defined as a special operating item, in 2018 and 2019 costs include crew salaries, docking cost, repair and maintenance
and consumables - vessel sold in April 2020
▪ Fixed costs of approximately 65% 35STRONG EBITDA GROWTH WITH MARGIN IMPROVEMENTS DRIVEN BY
SCALE AND POSITIVE EFFECTS FROM ENHANCED PRODUCT MIX
HISTORICAL EBITDA DEVELOPMENT EBITDA ADJUSTEMENTS
Adjusted EBITDA 2019 EBITDA adjustments 53,0
USDm USDm
+202% 0,8
53,0 1,8
39,4
3,4
+268% 45,7 1,3
17,6
12,7
25,6%
21,6% 3,4
17,9%
14,1%
8,8%
2017 2018 2019 Q1 2019 Q1 2020 EBITDA 2019 Lang transaction Epion marketing Juvel operating Legal cost Adj. EBITDA 2019
related cost launch US cost
Adj. EBITDA Adj. EBITDA %
▪ Target to reach ~30% EBITDA margin from 2022 onwards ▪ Transaction related costs in relation to the Lang Pharma acquisition have been booked as an
operating expense and recognized in the EBITDA
▪ Gradually increasing from 2020 onwards
▪ Following a fire in 2018, Juvel has not been used in the ordinary course of business in 2019. The
▪ Margin improvements driven by economies of scale and positive mix effects from selling more vessel will be sold in 2020, hence operating costs will not be incurred in the future
volume of higher margin products
▪ Material non-recurring legal costs have been incurred in relation to a legal dispute regarding
▪ In 2018 EBITDA adjustments include transaction related costs on the Enzymotec, Neptune and Juvel production related patents
Lang transactions amounting to USDm 2.6, as well as Juvel operating cost amounting to USDm
4.0. ▪ Material costs relating to the Epion launch, such as employment of Epion management team,
R&D, general start-up costs, and significant market development costs
36
Note: The targets indicated represent the Company's current goals, and should not be construed as estimates or guiding for future developmentsSTRONG GROWTH IN REVENUE AND EBITDA ACROSS SEGMENTS
INGREDIENTS BRANDS
REVENUE ▪ 11% increase in Qrill meal from REVENUE ▪ Lang has uninterrupted YOY sales
Ingredients segment revenue development 2017 to 2019, price and volume Brands segment revenue development1 growth; successfully maturing
USDm driven USDm customers offerings (SKUs) and
▪ 28% increase in Krill oil from 2017 expanded customer portfolio
+20%
+43% to 2019, following strategic ▪ COVID-19 demand lift seen in
acquisitions of Enzy, Neptune and 90,1 March and pallet promotions
85,9
177,2 organic growth 75,2 driving a record quarter for Lang
154,2 +89%
124,2 +28% ▪ 7% volume driven decrease in
Qrill meal revenue QoQ offset by 32,7
41,6 a 62% increase in krill oil 17,3
32,5
▪ Strong demand for krill oil in 82,2 6,7
South-Korea
2017 2018 2019 Q1 2019 Q1 2020 2017 2018 2019 Q1 2019 Q1 2020
Contribution to Aker BioMarine Lang stand-alone revenue
EBITDA ▪ Driven by strong krill oil sales EBITDA ▪ Stable cost base and gross margin
Ingredients segment unadjusted EBITDA development with higher margins Brands segment unadjusted EBITDA development1 ▪ Success with Costco and new
USDm ▪ Continued strong EBITDA in 2020, USDm SKUs to Walmart driving positive
+134%
despite significantly higher +17% EBITDA contribution
marketing cost +443% ▪ Some COVID-19 related
+622% 8,9 8,6
40,3
improvements in Q1 2020 EBITDA
7,3
33,1 17,4% such as reduced travel costs
21,5% 22,7% 5,7
13,9% 17,2%
17,2 3,1% 9,8% 10,3% 9,6%
6,1%
7,2
1,0 1,0
7,9 0,6
2017 2018 2019 Q1 2019 Q1 2020 2017 2018 2019 Q1 2019 Q1 2020
Lang stand-alone EBITDA Contribution to Aker BioMarine
EBITDA EBITDA % EBITDA %
37
1Brands (Lang) included from March 2019 in the reported figures
Note: Revenue excludes eliminations of USDm 13.4 in 2019 and USDm 3.6 in Q1 2020, EBITDA excludes eliminations of USDm 2.5 in 2019 USDm 1.2 in Q1 2020PROFIT & LOSS STATEMENT
USD thousands 2017 2018 2019 Q1 2019 Q1 2020
COMMENTARY
Net sales 124,154 154,182 246,170 39,207 70,742 Depreciation, amortization and impairment (non producing assets)
Cost of goods sold (81,768) (88,829) (145,901) (26,009) (45,899) ▪ Depreciation on producing assets (e.g. vessels and the Houston facility) is included in COGS -
~20% of COGS is historic depreciation
Gross profit 42,386 65,352 100,269 13,198 24,843 ▪ However, impairment charges on fixed assets, such as the Juvel impairment of USDm 5.9m
recognized in 2019, are included
▪ Acquired customer portfolios from Enzymotech, Neptune and Lang are amortized over a 10
year period from transaction date
SG&A (37,001) (44,686) (76,464) (15,185) (19,853) ▪ Total depreciation of USDm ~8 on a quarterly basis, taking into account Antarctic Provider.
Depreciation on producing assets are inventoried and consequently included in COGS when
Depreciation, amortization and impairment (2,528) (5,539) (17,822) (1,277) (4,027) products are sold
▪ Total quarterly amortization of around USDm 4 and is related to customer portfolios and
Other operating income/(cost), net (4,538) (4,869) (3,221) (706) (811) Orochem technology
Other operating income/(cost), net
Operating profit (1,681) 10,259 2,762 (3,970) 152
▪ Other income, such as insurance settlements and royalty revenue as well as inventory
adjustments and leasing reclassification
▪ Juvel operating costs from 2018 is included as other operating cost
Net financial items (15,072) (11,540) (26,097) (3,879) (1,558) Net financial items
▪ Interest rates to external lenders and Aker ASA, as well as FX effects
Tax expense (1,011) 259 (415) (91) (311)
▪ In 2019 Aker ASA converted NOK 1bn of debt to equity, reducing interest expense
Net profit (loss) (17,764) (1,022) (23,751) (7,941) (1,717) ▪ Net financial items to increase by USDm 3.5 p.a. once Antarctic Provider is delivered
▪ Net financial items in 2020 is expected around USDm 14 (not including FX effects) on an
annual basis. In the medium term, once Antarctic Provider has been delivered, net financial
items is expected at USDm 18
EBITDA reconciliation Tax expense
▪ In certain jurisdictions the group pay sales tax
Net profit (loss) (17,764) (1,022) (23,751) (7,941) (1,717)
▪ In the US the Group pays state tax based on nexus (employees or inventory), whereas Federal
Tax expense 1,011 (259) 415 91 311 tax is offset by tax losses carried forward
▪ Significant historical net operating losses in Norway and US of NOKm 1,723 and USDm 30
Net financial items 15,072 11,540 26,097 3,879 1,558 respectively. Total tax expense in 2020 and medium term is consequently expected to be
limited on a yearly basis until carry forward losses are fully utilized. The tax assets from the
Depreciation, amortization and impairment 18,896 22,860 42,924 5,598 11,515 historical net operating losses are currently not reflected in the balance sheet
▪ Potential upside of NOKm 296 if current tax case in Norway is successful
EBITDA (unadjusted) 17,215 33,120 45,687 1,628 11,668
38CAPEX OVERVIEW
HISTORICAL CAPEX DEVELOPMENT COMMENTARY
Capex ▪ Over the last 10 years, Aker BioMarine has invested USDm ~600 in fixed assets, majority
USDm being vessels
▪ USDm 314 invested since 2015 in fixed assets
Maintenance capex
▪ The first instalment was paid on Antarctic Endurance in 2017 and a second in 2018, in
of USD 12.2m and
2019 Antarctic Endurance was delivered with a final instalment of USDm 94.6
18.9m in 2018 and
2019, respectively 176,1 ▪ In 2018 the Group acquired Enzymotec’s krill oil business for USDm 26.4 as well as
capacity increase project in Houston for USDm ~6.0 and the Flexitech production
technology from Orochem for USDm 2.4
▪ Total investment into the Houston plant amounts to USDm ~71 since day 1
145,8
▪ The first instalment on Antarctic Provider of USDm 6.5 was paid in March 2019, an
additional USDm 9.7 was paid in April 2020 (a total of USDm 16.2 paid) – remaining take-
out in 2021 of USDm 54
▪ Provider will replace leased vessel, reduce opex and increase catch capacity due to more
111,2
logistics capacity
▪ Growth capex of USDm 93.3 and maintenance capex of USDm 17.9 in 2017 - higher than
usual due to classing of both vessels and new living quarters on Antarctic Sea
▪ Growth capex of USDm 52.2 and 108.0 and maintenance capex of USDm 12.2 and 18.9 in
2018 and 2019, respectively
64,5
▪ Expected maintenance capex of USDm ~10 p.a. from 2020. Finalising of Antarctic
Provider in 2021 and investment in protein launch plant of USDm 13.5 in 2020 driving
growth investments
▪ As scale is further achieved on the investments, the ROCE is targeted to reach up to 15%
Potential investment opportunities
5,2 ▪ Protein commercial plant (USDm 75) in 2023/2024 in order to launch full scale production
of the protein product for humans
▪ Superba oil line II (USDm 80-90) in 2022/2023 in order to build redundancy on the
2017 2018 2019 Q1 2019 Q1 2020 Superba production
▪ New fishing vessel to replace Saga and Antarctic (USDm 130 – 150)
Offshore Onshore M&A Other
39CASH FLOW
USD thousands 2017 2018 2019 Q1 2019 Q1 2020 ▪ COMMENTS
COMMENTARY
Profit (loss) before tax (16,753) (1,281) (23,750) (7,850) (3,030) ▪ D&A increase driven by investments done over 2017-2019
▪ Interest expense increase due to above mentioned investments, funded primarily though loans.
Other P&L items in 2019, mainly relates to Juvel impairment of USDm 5.9, in addition to foreign
Depreciation and amortization 17,123 21,961 36,776 5,598 11,515 exchange effects
▪ Higher accounts receivables balance following increased revenue
Interest expenses/ income, net 10,717 12,101 21,699 3,148 6,339 ▪ Inventory has increased to better hold and maintain a safety stock, especially within the feed
segment
Other P&L items with no cash flow effect 2,901 (1,502) 7,115 170 (5,169) ▪ Payables: Generally increased cost base, and more vessels drive development, where Q4 are at
high levels due to yardstay in Q4 giving negative cash impact in Q1
▪ Same trend for interest paid as with interest expense, however lower as interests to Aker ASA
Funds provided from operating activities 13,988 31,279 41,839 1,066 9,655
accumulates and are payable upon repayment of loan
▪ State Tax payments in US drives the majority of the taxes paid
▪ Negative cash flow from operations in Q1-19 due to acquisition accounting of Lang, as well as
Change in receivables (5,050) (5,664) (10,585) (3,488) 3,019
significant payments during the first quarter following an extensive shipyard in 2018
Change in inventory 2,837 (7,506) (19,336) (2,137) (1,212)
Change in payables and other working capital items 5,833 60 14,905 (13,590) (3,751)
Change in working capital 3,620 (13,111) (15,016) (19,215) (1,945)
Interest paid (7,587) (10,523) (16,520) 1,595 (4,399)
Interest income received - 161 1,084 1,097 243
Tax (846) 87 920 (91) 907
Cash flow from operations 9,175 7,894 12,307 (15,549) 4,462
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