Benchmark presented its year-end 2023 results yesterday highlighting revenue growth and tight cost control, as well as improved profitability with what it described as "steady progress in all business areas." In total, revenues from continuing operations increased by 7%, although when broken down by segment, growth was uneven, with some segments reporting negative figures. In a very short summary: salmon beat out shrimp in 2023.
"We delivered good growth in revenue and adjusted EBITDA, and increased cash conversion, despite challenging conditions in the global shrimp markets. This demonstrates the strength of our business and the agility of our organisation to adapt – mitigating the impact of a soft market and taking advantage of commercial opportunities to further consolidate our leading market position," assessed Trond Williksen, Benchmark Holdings CEO.
The aquaculture biotechnology company reported a 15% increase in adjusted EBITDA from continuing operations, as well as an adjusted operating profit from continuing operations of 36% to GBP 14.6 million (EUR 16.8 / USD 18.4 million), compared to GBP 10.7 million (EUR 12.3 / USD 13.5 million) in 2022. Loss before tax from continuing operations was reduced to GBP 12.7 million (EUR 14.6 / USD 16 million), compared with GBP 21.4 million (EUR 24.7 / USD 27 million) last year. There was also an improvement in cash generation, with operating cash flow nearly doubling to GBP 20 million (EUR 23.1 / USD 25.2 million) compared to GBP 10.8 million (EUR 12.4 / USD 13.6 million) in 2022, and net debt reduced to GBP 65.5 million (EUR 75.7 / USD 82.6 million) this year, compared to GBP 73.7 million (EUR 85.2 / USD 93 million) last year.
As mentioned, the shrimp market was the most challenging for Benchmark in FY2023. The figures turn on red with revenues down -2% in the Advanced Nutrition segment, despite which, it says it reinforced its leadership position thanks to "strong performance in challenging shrimp markets." According to the company, its commercial approach leveraging technical services capabilities and adapting to market conditions, and its operational efficiencies program focused on automation, supply chain integration, and digitalized data management, translate into "business resilience and stronger market position."
At Genetics, however, Benchmark had record sales of salmon eggs at its three facilities in Iceland, Norway, and Chile. This was 335 million salmon eggs, 15% more than in the previous year, which achieved revenue growth of +14%. In addition to this record figure, other milestones in this segment in 2023 were the acquisition of the remaining minority stake in Benchmark Genetics Iceland - which accounts for 50% of the Group's salmon egg production -; the doubling of its sales in Chile, where, in addition, its facilities obtained disease-free compartment status enabling future exports; the reorganization and alignment of the shrimp activities to obtain synergies with Advanced Nutrition; the divestment of the tilapia business through a Management Buy Out (MBO); and the expansion of its R&D team with a focus on reproductive technologies.
Nevertheless, it was Health that posted the biggest rise, up 27% in revenue, thanks to the growing industry adoption of sea lice solutions and treatments. What's bad news for some - sea lice news has been a hot topic lately - is good news for others, and Benchmark said that increased adoption of Ectosan® Vet and CleanTreat® by large and small producers up and down the Norwegian coast has improved its bottom line. In addition, the company also highlighted the good year for its second sea lice treatment, Salmosan® Vet, which showed a resurgence of demand driven mainly by label changes that allow longer use in certain territories.
Regarding the Group, the company highlighted the strategic measures that have been taken in recent years for further rationalization and integration which, they say, create opportunities for commercial and cost synergies. Notable among these measures is the strategic alignment that brings together its salmon activities under the leadership of the Director of Genetics and its shrimp activities under the leadership of the Director of Advanced Nutrition. "This customer-centric structure will enable us to increase our commercial impact with a combined offering and customer network and realise synergies," the company stated in its FY23 report.
Moreover, the aquaculture biotechnology company is also optimistic about current activity and prospects. "The new financial year has also started well and in line with our expectations, with positive momentum in our three business areas," said CEO Trond Williksen. Positive momentum was reflected in early indications of improvement in the shrimp markets, good visibility of revenues in salmon genetics, and an increase in sea lice treatments post-period end, expecting normal seasonality.
"Benchmark is uniquely positioned in an industry that is structurally growing supported by attractive megatrends. With a clear strategy and an integrated commercial network covering the main aquaculture species, we have significant opportunity to deliver growth and shareholders returns. We will continue the execution of our strategy to realise the value inherent in our business for the benefit of all our stakeholders," Williksen concluded.
Benchmark brings together biology and technology to develop innovative products that improve the performance, quality, health, and welfare of its customers' animals, enhancing their sustainability and profitability. They do this by improving the genetic makeup, health, and nutrition of animals, from breeding stock and hatchery to nursery and grow-out. The company has a broad portfolio of products and solutions, including salmon eggs, live feed (Artemia), diets and probiotics, and sea lice treatments.
