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September 2018
COMPANY PRESENTATION
1
INTRODUCTION
2
• 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
BENCHMARK’S MISSION
3
A GLOBAL AQUACULTURE PL ATFORM
SERVING ALL MA JOR MARKETS AND SPECIES
4
We combine technology and fundamental
biology to create products that deliver
key advantages to aquaculture producers
• Founded in 2000
• Built organically and through strategic acquisitions
• Listed on AIM since 2013 (GBP 328m1 Mcap)
1 As of 5-September-2018; 2 LTM 1H 2018
Group Revenue
£147m2
Customers
1,435in 70 countries
1,000+ employees
TechnologyGenetic tools
Vaccine technology
platform
Molecules
Probiotics
BiologyIn depth knowledge
of fish, disease and
parasite biology
A LEADER IN AQUACULTURE GENETICS,
ADVANCED NUTRITION AND HEALTH
5
Salmon
Shrimp
Tilapia
#1globally
#4globally
#1globally
#1globallySea Bream/Sea Bass
Ongoing
R&D
Ongoing
R&D
Ongoing
R&D
Market positions are management’s estimates
Newly
entered
market
21% 58% 11%
: #1 in sea lice
treatment
Newly
entered
market
% 2017 revenue
Genetics Advanced Nutrition Animal Health
Health treatmentsEarly-stage feed productsBreeding programmes
and egg/fry production
Egg/fry
production
Genetic
services
#1globally
#1globally
#1globally
#5globally
Newly
entered
market
ESTABLISHED TRACK RECORD OF
GROWTH AND DIVERSIFICATION
6
21 %
58 %11 %
10 %
Note that fiscal year ending 30-SeptemberAdjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and acquisition related expenditure
Increasing profitability
Strong revenue growth
R&D - Investing for growth
Diversified revenue base (2017)
28 35 44
109
140 147
0
20
40
60
80
100
120
140
160
2013 2014 2015 2016 2017 1H 2018LTM
GBPm
Revenue
Advanced
Nutrition
Genetics
Animal
Health
Knowledge
Services
72
-6
9 1013
-10
-5
0
5
10
15
2013 2014 2015 2016 2017 1H 2018LTM
GBPmAdjusted EBITDA
13
7
1315 15
0
5
10
15
20
2013 2014 2015 2016 2017 1H 2018LTM
GBPm Expensed Capitalised
0
5
10
15
20%R&D % of total revenue
BENCHMARK PATENT
PORTFOLIO
7
Total patents
221
Patent Families
37
Status
33% granted67% pending
Patent coverage of key product revenues
50%50%
28%
72%
28%
72%
Patent Families
Animal Health GeneticsAdvanced Nutrition
One or more patent
No patent
0
5
10
15
20
25
30
35
Animal Health Advanced Nutrition Genetics
MARKET – EXPOSURE TO ATTRACTIVE LONG-TERM GLOBAL MEGA TRENDS
8
AQUACULTURE WILL BE KEY IN SERVING THE
STRONG PROTEIN DEMAND GROWTH
9
Source: United Nations, OECD-FAO Agricultural Outlook 2017-2026
50%
7.6
2017
84%
2050E
9.8
202
404
2017 2050E
0
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
180
20051990 2026E201020001995 2015 2020E
Forecast
0.4% CAGR
Upper or middle class
Growing, wealthier population driving protein demand As volumes from wild catch have stagnated,
seafood supply growth relies on aquaculture
Mt live weight
+6%
+2%-2%
0%
2006 2026E2016
Global protein consumption per capita (kg per year)
Fish expected to grow faster than other protein sources
Wild catch
Aquaculture
Protein demand (m tonnes)World population (bn people)
+29%+100%
AQUACULTURE L AGS MOST L AND BASED
ANIMAL PROTEIN PRODUCTION
10
% production modernised by sector
Source: USDA, FAOSTAT
Benchmark’s products aim to drive sustainable industrialisation
ATL ANTIC SALMON HAS LED
INDUSTRIALISATION WITHIN AQUACULTURE
11
Source: Marine Harvest, Salmon Farming Industry Handbook (2017)
Other aquaculture species expected to follow
Tilapia
Other freshwater fishCarps
Mussels, Clams
Other marine fish
Shrimp
Atlanticsalmon
HighLow Level of industrialisation
Le
ve
l o
f ri
sk
Atlantic salmon
industrialisation journey
1980’s-90’s
Today
Ongoing developments
• High degree of automation
• High innovation pace throughout value chain
• Large and growing service industry
• Well-established and advanced use of genetics
ILLUSTRATIVE
Low
High
500
1 050
300
250
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
12
Benchmark has a unique multidisciplinary approach to address disease
1 Rabobank; 2 Norwegian Fish Health Report; 3 Rozas & Enriques (2014); 4 Fish Vet Group; 5 Doan et al 2016; 6 Andreoni & Magnani, 2014
Shrimp Salmon Tilapia Other marine fish
Share of production
lost to diseases
per year
~40%
Disease costs to the
Asian shrimp sector –
last 7 years
USD 20bn
• 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
Key
biological
challenges
Sea lice1
PD2
Total
SRS3
Annual costs – selected
diseases (USDm)
Mortality4
Up to 20%
Annual loss due to
streptococcosis
USD 1bn
Nodavirus mortality5
Up to 100%
Pasteurella mortality
(juvenile fish)6
Up to 90%
Vibrio bacteria mortality
10%
Benchmark
solutions
13
THREE BUSINESS AREAS WITH STRONG MARKET POSITIONS AND HIGH ENTRY BARRIERS
THREE CORE DIVISIONS WITH ATTRACTIVE
GROWTH AND MARGIN PROSPECTS
Note: share of Group revenue and EBITDA margin based on fiscal year 2017
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
Of group revenue58% Of group revenue21% Of group revenue11%
Employees486 Employees158 Employees206
614 Customers 316 Customers 426 Customers
14 Sites 8 Sites 10 Sites
Adj. EBITDA margin21% Adj. EBITDA margin19% Adj. EBITDA marginn.m.
22 Products in pipeline 18 Products in pipeline 41 Products in pipeline
Production of algae
products for feed
Advanced early-stage
feed and diet solutions
for shrimp and fish
• Salmon eggs and
fingerlings
• Lumpfish
• Tilapia fingerlings
and juveniles
• Shrimp breeding
• Genetics services
• Vaccines
• Medicines
• Biocides parasiticides
• Veterinary health
services
• Diagnostics 14
STRONG PROSPECTS FOR CONTINUED GROWTH
15
£2.2m
• Artemia replacement diet
• Probiotics and innovative products for nursery segment
• Selective expansion into grow-out segment
Top priority – Replacement products to fill supply deficit
Artemia availability per shrimp to halve by 2030
• Benchmark has
developed a highly
successful replacement
product
• Sales tripled over the
last 6 years
-
0,50
1,00
1,50
2,00
2,50
3,00
-
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
198
5
199
0
199
5
200
0
200
5
201
0
201
5
202
0
202
5
203
0
Kg
Art
em
ia /
to
n S
hri
mp
Kg
Art
em
ia —
10
00
kg
Shri
mp
Year
Artemia Ton Shrimp Ktonkg Artemia/ton Shrimp Poly. (Artemia Ton)Poly. (Shrimp Kton) Poly. (kg Artemia/ton Shrimp)
Estimated
peak sales
Investment
to date
Development
commenced2015
£30m
Hatchery Nursery Grow-out
Advanced Nutrition Genetics Animal Health
£60m
SHRIMP: A L ARGE AND UNDERPENETRATED
MARKET FOR GENETICS
16
Significant expansion potential for Benchmark’s SPR shrimp
Estimated
peak sales
Estimated
market size$500m• $20bn lost due to diseases over the last 7 years
• AHPND (formerly known as EMS) and White Spot Virus (WSV)
• 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
Top Priority — Specific Pathogen Resistant (SPR) Shrimp
Genetic penetration Benchmark’s strategy
Continue to develop high performing strains
Leverage commercial experience in salmon and existing strong
presence in shrimp hatcheries through advanced nutrition
Adapt genetics to local markets
1
2
3Shrimp
~90%
Salmon
~30%
Advanced Nutrition Genetics Animal Health
Huge disease cost in Asian Shrimp production
NEW TREATMENT - 100% EFFICACY AGAINST
SEA LICE
17
• 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
Milestones and roll-out
Treatment Efficacy Welfare Environment
BMK new sea
lice treatment 100% ✔ None
Pyretheroids Low ✔ Long
Azamethiphos Moderate ✔ Short
Avamectin Low ✔✔ Long
H202 Moderate / Low ✘✘ Short
Fresh water Declining ✘ None
Mechanical Moderate ✘✘✘ None
Sea lice treatments – BMK treatment clear superiority
▪ Field trials in Norway
▪ Great interest from producers to participate in trial extension
▪ Obtaining approvals for field trials in other markets
▪ Exploring CleanTreatopportunities
▪ Field trials: UK, Ireland , Faroe Islands, Canada and Chile
▪ Anticipated marketing approval in place
2018
2019
2020
▪ CleanTreat – proof of concept2016
▪ Sea lice treatment – proof of concept2014
▪ Programme launch2009£45m
estimated
peak sales
Advanced Nutrition Genetics Animal Health
>17,500
tonnes
treated
SUMMARY AND WAY FORWARD
18
LEVERAGING STRONG MARKET POSITION WITH
ATTRACTIVE OPPORTUNITIES IN ALL SEGMENTS
1 Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and acquisition related expenditure
• #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
Margin:
• Current 19% Adj. EBITDA1 % margin
• Mid to long term mid-twenties
• 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
Margin:
• Current 21% Adj. EBITDA1 % margin
• Mid to long term mid-twenties
• 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:
• Currently EBITDA negative
• Long term margin develops
through breakeven to mid-twenties
NUTRITION GENETICS HEALTH
19
• 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
INVESTMENT HIGHLIGHTS
20