Chief Executive Officer, Corbion
Corbion first half year 2022 results
Corbion reported net sales of € 687.4 million in H1 2022. Organic net sales growth was 23.4% for the first half year. Adjusted EBITDA in H1 2022 increased by 16.6% to € 89.9 million.
Olivier Rigaud, CEO, commented: “We are proud to have delivered strong growth in sales and EBITDA during a period of unprecedented cost inflation and supply chain disruptions. Given that we are prioritizing price increases and mix improvements, we are encouraged to see that this has not led to adverse volume impact. This confirms the strength of our differentiated portfolio. I am happy to report that our AlgaPrim...
About Olivier Rigaud
Olivier Rigaud, CEO of Corbion, said in February 2023 that the company achieved record growth and profitability in 2022 despite what he described as the highest market volatility he had seen in 35 years. He stated that Corbion adapted to cost inflation and supply chain disruptions through price increases, mix improvement, and operating efficiency gains. Rigaud noted that the company achieved break-even in its algae-based omega-3 business, increased carbon footprint reduction targets, and invested in production capacity in Thailand, the United States, and Singapore. In January 2023, Rigaud participated in an interview at the World Economic Forum in Davos, where he discussed Corbion’s focus on replacing synthetic ingredients with natural alternatives. He said the company works with suppliers to reduce emissions and provides customers with carbon footprint data. In comments on first-half 2022 results, Rigaud reported organic net sales growth of 23.4% and said the company had passed on cost increases to the market without experiencing adverse volume impacts. Earlier in 2022, he described a strong first quarter with above 20% organic growth and margin recovery, while emphasizing safety and innovation as ongoing priorities.
Transcript (8 segments)
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Olivier Rigaud0:12
I'm really pleased with the Corbion delivery across the first half of 2022. First, on organic sales, we delivered over 23% and this happened across the three business units, so this is quite a remarkable performance in the current market environment. The second aspect where I'm very pleased is to see our absolute EBITDA development as we've been able to pass on cost increase to the market. We are demonstrating that we have not only a very resilient business model but also that we have a differentiated product mix that is enabling us to pass on these cost increases.
SFS, so our sustainable food solution business has also demonstrated very strong resilience in the period, primarily driven by the request from our customers to support them in reformulating their products. First of all, from move from synthetic and artificial ingredients to natural alternatives, as well as helping them to reformulate to prevent raw material shortage or cost increase. So in that respect, Corbion has been very active in helping out this reformulation. Part of the growth was driven by natural preservation, that's still continuing on a very strong momentum we've seen already over the last couple of years, but we've seen also a lot of very important new development on our functional system business.
Lactic acid in specialties also delivered an outstanding first half of the year with a very strong sales momentum. And this has been across many areas, primarily our biomedical polymer business showing very strong performance post-pandemic, as well as the lactic acid derivatives for the semiconductor area and our polylactic acid business.
Algae, I think, is a great story because I'm really glad to say that for the first time during the month of June, we've been running on break-even for this business. And as you know, this was a very strong commitment we made when we started the Advance 2025 strategy and we are getting there. So we see a very strong sales momentum with more and more customer adoptions for our AlgaPrime DHA business, so very promising outlook on that front.
Obviously, as a company we are navigating into a very volatile environment. We all know about the supply chain disruption, we have all heard about of course this inflationary environment around us, and I'm really pleased to see how the Corbion team have reacted across the world. First of all, we've been able to pass on important price increase to the market, and this shows a couple of things. It shows first of all the fact that we have a differentiated product portfolio that enabled us to pass on this cost increase, but we've been also extremely performing in dealing with all the supply chain disruption and still able to serve our customers across the period. And that's quite important, and this is really due to the very hard work of the Corbion teams across the globe.
Another challenge we are facing is that despite all these disruptions I just mentioned, we are on track on the four major investment projects we have in line. One being the construction of a new lactic acid plant in Thailand, the other is about the big capacity expansion in Blair, Nebraska, for lactic acid as well. But we have also a very important investment for food ferments specialties in Peoria, United States, and last but not least, algae in Brazil, where we need to sustain our current success, invest in further capacity extension and mix improvement.
We have a very strong purpose at Corbion: we preserve what matters. And I'm really glad to see that to date we've already overachieved on our commitment to reduce CO2 emission, and the decision we've taken recently to go for a more ambitious target on the science-based target and go for the 1.5 degree in line with the Paris Agreement. To conclude, I want to say that I'm very confident, together with the entire Corbion team, that we are on the right path. We are on the right path in terms of growth momentum, and obviously this is primarily driven by price and mix improvement as well as on the margin recovery fully in line with our Advance 2025 commitment.
In the first half of 2022, net sales was 687.4 million euro, an increase of 33.3 percent due to 23.4 percent organic growth, a positive currency impact of 9.7, and the net effect of acquisitions and divestments of 0.2 percent. Organic sales growth for our core activities was 23 percent, driven by all three business units. In Sustainable Food Solutions, organic net sales grew by 18.5 percent, mostly driven by price mix improvements. In the Lactic Acid & Specialties business unit, sales organically increased by 26.4 percent, as a positive price mix effect was supported by volume growth. Net sales in Incubator increased organically by 87.3 percent in the first half of 2022, driven by strong growth in AlgaPrime. Organic net sales growth in the non-core activities was 26.3 percent. Adjusted EBITDA increased by 16.6 percent to 89.9 million euro in the first half of the year, mainly due to a positive currency effect of 17.8 percent. Organic growth was negative 0.4 percent, and the adjusted EBITDA margin at the half-year end was 13.1 percent.