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Groupe Berkem 2022 First-Half Results Revenue of €28.1 Million and Net Income up 37.2%

Regulatory News:

Groupe Berkem, a leading player in bio-based chemicals (ISIN code: FR00140069V2 - Ticker: ALKEM) (Paris:ALKEM), announces its results for the first half of the current fiscal year, ended 30 June, 2022, as approved by the Board of Directors on 28 September, 2022.

Olivier FAHY, Chairman and CEO of Groupe Berkem, stated: "The results we generated over the period demonstrate the resilience of our model, which is based on healthy organic growth and a positioning in high value-added niche markets. Despite a decline in our EBITDA, mainly due to the price inflation we are facing on all of our raw materials, we decided very early on to apply price increases on our products which should eventually neutralise this effect. This first half of the year also provided an opportunity to make numerous commercial investments that will contribute to our future organic growth. We have also streamlined our financing policy, which now allows us to show a significant improvement in our net income. Coupled with the financing we secured at the end of July, Groupe Berkem is in a position to pursue its selective acquisition strategy in the short and medium term.”

Consolidated income statement

In thousands of euros

30/06/2022

30/06/2021

% change

pro forma

Revenue

28,074

25,172

11.5%

Sale of goods

37

 

 

Production sold (goods)

25,929

23,920

 

Production sold (services)

2,109

1,252

 

Capitalised production

1,327

481

 

Production in inventory

590

148

 

Operating subsidies

402

412

 

Operating expense transfers

181

0

 

Reversals of impairment and provisions

661

454

 

Other income

0

3

 

Operating revenue

31,236

26,734

16.8%

Purchases consumed

(13,495)

 

 

Other purchases and external expenses

(5,433)

(15,553)

 

Taxes and duties

(372)

(406)

 

Personnel costs

(6,756)

(5,688)

 

Depreciation, amortisation and provisions

(2,081)

(1,879)

 

Other operating expenses

(211)

(103)

 

Operating income

2,887

4,097

-29.5%

Financial income and expenses

(304)

(1,203)

 

Extraordinary income and expenses

(68)

(780)

 

Income tax

(596)

(578)

 

Net income of the consolidated group

1,922

1,535

25.2%

Non-controlling interests

-

134

 

Net income (Group share)

1,922

1,401

37.2%

Notes: The unaudited pro forma consolidated financial information reflects the acquisition of Berkem Développement as if the transaction had been completed on 1 January, 2021.

11.5% growth in revenue to €28.1 million and EBITDA margin of 15.3%

As at 30 June, 2022, the Group's consolidated revenue increased by 11.5% compared with the first half of 2021, to €28.1 million. It can be broken down as follows:

  • the Plant Extraction division (29% of revenue) generated €8.1 million
  • the Formulation division (71% of revenue) generated €19.9 million

As a result of higher raw material prices and significant commercial, industrial and R&D investments, the EBITDA1 is down compared with the first half of 2021. The higher raw material prices will be gradually offset by the price increase implemented by the Group as of May 2022. On the other hand, Groupe Berkem is seeing increased demand in its order book as a result of the investments carried out during the first half of this year.

Financial expenses decreased significantly, mainly due to the repayment of the convertible bonds before 31 December, 2021, representing €0.3 million for the period. Tax remains constant compared to the same period in 2021, at nearly €0.6 million.

Finally, after taking into account financial income and expenses, the Group's net income amounted to €1.9 million in the first half of 2022, an increase of 37.2%.

Cash position

As of 30 June, 2022, Groupe Berkem had a net cash position of €12.7 million.

On 26 July, 2022, the Company announced a €70 million financing package including €63.5 million in senior debt with a pool of six French banks and €6.5 million in Recovery Bonds. These new financial resources provide the Group with greater means to undertake acquisitions. To date, the Group has activated a funding line of €18.5 million from this package.

Governance

The Annual Shareholder’s Meeting held on 3 June, 2022 approved the payment of a dividend of €0.06 per share in cash for the 2021 financial year.

In addition, Mrs. Karen LE CANNU was appointed as a member of the Company's Board of Directors at this General Meeting.

Industrial and R&D investments

During the 1st half of 2022, major investments were made:

- in the Lixol subsidiary in order to increase production capacity, effective from the second half of the year. These investments should enable the Group to reduce the use of outsourcing, while positively impacting the Group's gross margin level;

- also, the hiring of new sales representatives and the participation in numerous trade fairs in order to accelerate organic growth in the plant extraction and bio-based solutions businesses.

Activity

In March 2022, Groupe Berkem launched its range of 100% bio-based alkyd resins aimed at the construction paints market. This range has been developed from bio-based and renewable raw materials that can replace raw materials of petrochemical origin.

In June 2022, Groupe Berkem and the SOPREMA Group signed a collaboration agreement to market an insulating panel incorporating a bio-based anti-fungal solution developed by Groupe Berkem.

As expected in the first-quarter of 2022, while pressure on raw materials did not have a significant impact on the 2021 financial year, nor on revenue during the first-half of 2022, the Group anticipates an impact on the margin level of certain activities in the Formulation division.

International and Regulatory Affairs

Groupe Berkem generated 21.1% of its revenue from export markets during the first half of 2022, which was stable compared to 30 June, 2021 (22.1% of revenues).

As of 30 June, 2022, the Group held 187 marketing approvals and 45 applications under review.

Confirmation of ambitious financial targets for 2024

The Group reiterates its ambition to achieve revenue of at least €65 million by 2024, which may be increased to at least €85 million should it make acquisitions. By the same target date, the Group's objective is to achieve an EBITDA margin of around 25%.

Next financial publication:

2022 Third-Quarter Revenue: 20 October, 2022 (after market close)

ABOUT BERKEM GROUP

Founded in 1993 by Olivier Fahy, Chairman and Chief Executive Officer, Groupe Berkem is a leading force in the bio-based chemicals market. Its mission is to advance the environmental transition of companies producing the chemicals used in everyday lives (cosmetics, food and beverages, construction, public hygiene, etc.). By harnessing its expertise in both plant extraction and innovative formulations, Groupe Berkem has developed bio-based boosters—unique high-quality bio-based solutions augmenting the performance of synthetic molecules. Groupe Berkem achieved revenue of €46 million and an EBITDA margin close to 20% in 2021. The Group has almost 170 employees working at its head office (Blanquefort, Gironde) and three production facilities in Gardonne (Dordogne), La Teste-de-Buch (Gironde), and Chartres (Eure-et-Loir).

Groupe Berkem has been listed on Euronext Growth Paris since December 2021 (ISIN: FR00140069V2 – ALKEM)

www.groupeberkem.com

1 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), corresponds to the operating resources generated by the Group taking into account other operating income and other operating expenses, but excluding depreciation and amortization and the Group's financing policy.

APPENDICES

Consolidated balance sheet2
(in thousands of euros)

 

06/2022

 

12/2021

 

 

 

Gross value

Amort. Prov.

Net value

 

Net value

 

 

 

 

 

 

Intangible assets

57,807

(2,658)

55,149

 

55,026

Of which goodwill

29,693

-

29,693

 

29,693

Property, plant and equipment

38,214

(23,040)

15,175

 

13,472

Financial assets

306

-

306

 

226

Total fixed assets

92,328

(25,698)

70,631

 

68,723

 

 

 

 

 

 

Inventories and work in progress

9,774

(265)

9,509

 

7,254

Trade receivables and related accounts

7,928

(306)

7,622

 

2,986

Other receivables and accruals

7,287

-

7,287

 

8,406

Marketable securities

20

(2)

18

 

69

Availability

12,786

 

12,786

 

15,533

 

 

 

 

 

 

Total Assets

134 124

(26 271)

107,853

 

102,971

 

 

 

 

 

 

 

 

 

 

 

 

Capital

 

 

39,791

 

39,791

Additional paid-in-capital

 

 

27,734

 

29,801

Group reserves

 

 

3,031

 

1,883

Conversion reserves

 

 

-

 

-

Result for the year

 

 

1,922

 

141

Other

 

 

(225)

 

 

Total shareholders' equity

 

 

72,253

 

71,617

 

 

 

 

 

 

Non-Group interests

 

 

-

 

-

Provisions

 

 

991

 

1,334

Borrowings and financial debt

 

 

20,101

 

19,997

Trade and related payables

 

 

7,472

 

5,951

Other liabilities and accruals

 

 

7,037

 

4,073

 

 

 

 

 

 

Total Liabilities

 

 

107,853

 

102,971

Cash flow statement
(in thousands of euros)

 

06/2022

12/2021

(10 months)

 

 

 

Total net income of consolidated companies

1,922

158

Elimination of depreciation and provisions

1,445

4,226

Elimination of the change in deferred taxes

356

-11

Elimination of capital gains or losses on disposal

195

- 164

Cash flow

3,919

4,209

Change in inventories

-2,255

-1,056

Change in accounts receivable

1,333

3,488

Change in accounts payable and other creditors

-1,645

-1,905

Change in working capital requirement

-2,567

527

Net cash flow from operating activities

1,351

4,735

 

 

 

Acquisition of fixed assets

-3,460

-3,213

Disposals of fixed assets

0

168

Net sales/acquisitions of treasury shares

-300

-

Impact of changes in the scope of consolidation

0

-1,461

Net cash flow from investing activities

-3,760

-4,506

 

 

 

Capital increases (reductions)

0

39,353

Borrowing issues

3,061

225

Loan repayments

-3,324

-24,413

Net cash flow from financing activities

-263

15,165

 

 

 

Change in cash and cash equivalents

-2,672

15,395

 

 

 

Opening cash

15,395

0

Closing cash

12,723

15,395

2 The audited consolidated balance sheet as of December 31, 2021 includes the consolidated results for the period from March 8, 2021 to December 31, 2021


The Groupe Berkem Stock currently trades with a fall of -0,67 % to 7,44EUR on the Frankfurt stock exchange.

Wertpapier



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Groupe Berkem 2022 First-Half Results Revenue of €28.1 Million and Net Income up 37.2% Regulatory News: Groupe Berkem, a leading player in bio-based chemicals (ISIN code: FR00140069V2 - Ticker: ALKEM) (Paris:ALKEM), announces its results for the first half of the current fiscal year, ended 30 June, 2022, as approved by the Board of …

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