Corbion: announces Strategy Update of «Advance 2025»

Amsterdam / NL. (cb) During its Capital Markets Day for analysts and investors in Amsterdam, management of Dutch Corbion NV presented an update of the ‘Advance 2025′ strategy progress and introduced updated targets for the 2023-2025 period. Through the purpose ‘Preserve what matters’, sustainability continues to be at the forefront in all decision-making.

Key highlights of the event

  • Significant progress made in delivering ‘Advance 2025′
  • Creation of Algae Ingredients as a new business unit, following commercial breakthrough
  • Increase of net sales growth target to 5-8 percent p.a. for 2023-2025, up from 4-7 percent p.a.
  • Adjusted Ebitda growth target of 15-20 percent p.a. for 2023-2025
  • Improving funding ratio to below 2.9x in 2023, and 1.5-2.5x from 2024
  • Divestment process for non-core emulsifiers business initiated

We are well on track in delivering the Advance 2025 strategy, navigating through a highly volatile business climate. We raised our organic sales growth rate substantially, grew our Adjusted Ebitda, invested in our organization and production capacity, exited from all non-core manage-for-exit activities, achieved break-even Ebitda in algae-based omega-3, and raised our carbon footprint reduction target in line with 1.5 degrees. Today, we mark the beginning of the second phase of our Advance 2025 strategy.

After achieving the break-even Ebitda level in June 2022 as anticipated, we believe now is the time to carve out Algae Ingredients from the Incubator into a separate business unit. This expresses our confidence in the growth and profitability potential of this business line. Initially, this business unit will consist of our algae-based omega-3.

We are raising our organic net sales growth guidance for the 2023-2025 period from 4-7 percent to
5-8 percent p.a. We are switching from a margin target to an organic Adjusted Ebitda growth target (15-20 percent annually), as we believe this is a better measure of our performance, given the highly volatile input cost dynamics. We are aiming for a EUR 250 million Adjusted Ebitda for our core activities by 2025.

We expect to improve our funding ratio to 2.9-3.2x by end of 2022, below 2.9x in 2023, and between 1.5x and 2.5x from 2024 onwards, irrespective of divestments or acquisitions. Within this funding framework we will continue to invest significantly to support our profitable growth opportunities in all of our business units.

We have initiated the process of divesting our non-core emulsifier business enabling us to fully focus on profitably growing our core business. In 2020 we categorized the emulsifier business as non-core: ‘manage-for-value’. The emulsifier business has delivered a very strong performance over the past few years, and we have become the market leader in the US emulsifier market.

TotalEnergies and Corbion are committed to growing the PLA business. We are in discussion to explore several operational and financial models regarding the future lactic acid requirements for the production of PLA in Grandpuits.

Financial guidance 2023-2025

Financial targets 2023-2025 (for core activities)

  • Organic net sales growth 5-8 percent p.a.
  • Organic Adjusted Ebitda growth 15-20 percent p.a.

Underlying ambitions

  • Organic net sales growth Sustainable Food Solutions 5 percent p.a.
  • Organic net sales growth Lactic Acid and Specialties 7 percent p.a.
  • Organic net sales growth Algae Ingredients 25 percent p.a.
  • Ebitda investments of other Incubator initiatives: 0.5-1.5 percent of Corbion core sales p.a.
  • Capex: EUR 160 million average per annum
  • Covenant net debt/covenant Ebitda: Target range 1.5-2.5x
  • ROCE > WACC
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