Q1 2022: thanks to solid performance worldwide, double-digit growth in revenue (+15%) and net profit (+16%）

Release time:2022-04-29

Safery and Sustainability

• Q1 2022 TRIR 0.45: Safety is and remains Adisseo’s first priority
• Continuity of all activities despite the operational challenges notably due to COVID-19
• Adisseo received the silver level by EcoVadis for the 2^nd time since 2019

 

Q1 2022: Strong yoy growth in revenue (+15%) and net profit contributed to shareholders (+16%) despite sharp increase in raw material and energy costs, driven by:

• Double-digit growth in revenue and gross profit of performance products
• Double-digit growth in feed digestibility and Aqua and continued growth in ruminants

 

Key projects

• European plants activities continued despite huge challenges in raw material and energy supply and sourcing
• China Priorities in progress despite constraints linked to COVID-19 resurgence

1. 2^nd Nanjing Plant (BANC2 project) well on track
2. Successful restart following maintenance shutdown in Nanjing plant in preparation of the start-up of the new integrated 360KT platform in the 2^nd half of 2022
3. Basic engineering design of new China Specialty blending facility in progress

• Calysseo: Construction of 1^st Commercial FeedKind® plant on track but facing challenges from COVID-19 restrictions
• Specialty capacity expansion project in progress fully leveraging FRAmelco integration
• R&D Collaboration in insect nutrition established with Entobel illustrating Adisseo’s Open Innovation

 

FY2022 outlook

• Safety and sustainability remain Adisseo's top priorities.
• Volatility and uncertainty are prevailing more than ever. Facing the challenges from raw material supply shortage and cost increase in addition to on-going supply chain disruptions, Adisseo is engaged in delivering sustainable profitable growth while pursuing long-term value-creating investments.
• In 2022, revenue growth is expected to accelerate to offset significant increase of raw material costs.

 

Jean-Marc Dublanc, Vice Chairman and CEO of Adisseo, said: “The Ukrainian crisis has resulted in a global supply shock and made the already challenging supply chain even worse, also further fueled inflation and sharp cost increase in raw material and energy and caused business disruption in CIS region. Up till now, we are still in the middle of this terrible situation. Thanks to our crisis management team established at the very beginning, we secured our raw material and energy supply and sourcing. Thus, our European plants are operating without any significant impact. We are gradually increasing prices to compensate the cost increase. This is still in progress, and we are confident to be able to protect our margin,

 

In addition, we are facing with restrictions arising from COVID-19 resurgence in China. Supply chain is disrupted but we managed to continue our sourcing and shipping to customers in China and on the export market. Thanks to the extreme effort performed by our China team, up till now, our key projects and activities continue in progress on schedule and on cost.

 

Globally, we not only manage the continuity of our business, but we also deliver strong top line and bottom-line growth despite many headwinds in the marketplace.

 

Despite an unpredictable macroenvironment, we remain confident to respond to the unexpected challenges thanks to the resilience of our business, the leading position we have built on for decades and the positive results driven by the fast reactions we are able to make.”

 

Bluestar Adisseo Company (“Adisseo” or “the Company”) Board of Directors disclosed its Q1 2022 results.

 

1. Business Review: Revenues & Net Profit Contributed to Shareholders

 

Unit: CNY (100mil)	Q1 2022	Q1 2021	YoY variance
Operating revenue	34.6	29.9	+15%
Performance Products	25.3	20.9	+21%
Specialty Products	7.3	7.5	-3%
Other Products	2.0	1.5	+31%
Gross profit* (in % of operating revenue)	11.1 32%	10.1* 34%	+10% -2ppt
Performance Products	7.3	6.4*	+14%
Specialty Products	3.5	3.8*	-7%
Other Products	0.3	-0.1*	NA
Net profit contributed to the shareholders of the Company	4.3	3.7	+16%

*for comparable basis, 2021figures restated per 2022 policy

Safety is and will remain Adisseo’s first priority. Q1 2022 TRIR landed at 0.45 with a limited number of small accidents.

Despite the operational challenges due to the COVID-19 resurgence, the continuity of all activities was achieved.

Adisseo received the silver level by EcoVadis for the 2nd time after 2019, recognizing its engagement and result in sustainability.

 

In Q1 2022, Adisseo achieved double-digit growth in revenue (+15%, CNY3.46 billion) and gross profit (+10%, CNY1.11 billion) compared with restated Q1 2021, thanks to double-digit revenue growth in performance products, outstanding contribution from liquid methionine by-products, double-digit growth in feed digestibility and aqua as well as continued growth in ruminants, which allowed to offset the dramatic increase of raw material, energy and freight costs.

 

Regarding the methionine business, both the liquid and powder methionine recorded double-digit revenue growth, of which liquid methionine achieved a strong +24% revenue growth.

 

Methionine prices are being managed to best serve customers while protecting Adisseo’s profitability.

 

European plants operation continued despite huge challenges in raw material and energy supply and sourcing.

 

BANC2 project is progressing on schedule and on cost with excellent safety results (more than 6.9 million man-hour zero accident record).

 

45-day maintenance shut-down of Nanjing plant was completed successfully and the plant has restarted smoothly, preparing for the new integrated 360KT platform in the second half of 2022.

 

With the coming start-up of BANC2, Adisseo will reinforce further its capacity to allocate production strategically between two platforms in Europe and China with the most efficient production and delivery options, thus allowing to optimize supply reliability and business profitability.

 

On Vitamins, vitamin A price remained firm even if eroded a bit recently and vitamin E price rebounded to a high level. Production of Vitamin A in the European plant is being pursued despite supply challenges arising from Ukraine crisis and sourcing of the main raw materials has been secured. Portfolio vitamins provided a positive contribution thanks to the increased prices. Supply of portfolio and vitamin E remains challenging in the context of COVID-19 constraints in China; however, this should not impact margins significantly.

 

Specialty business revenue decreased comparing with Q1 2021 despite continuous growth from strategic products:

• Strong double-digit revenue growth in feed digestibility (+14%) and aqua (+24%)
• Continued revenue growth in ruminant business led by double-digit ruminant growth in China and Latin America supported by strong penetration of new ruminant products such as RumenSmart and Smartamine ML despite a temporary softening in the US
• Solid growth in Health by Nutrition driven by the penetration of new products such as Alterion and Selisseo
• Partly offset by lower contribution from feed preservation in the context of streamlining its product portfolio by regions
• Gross margin at 48% reflecting the on-going efforts to increase price to compensate huge rise in raw material costs      

 

Specialties Capacity Expansion Project was started as scheduled both in Europe and China to support business growth, optimize industrial set-up and improve customer service.  

 

Integration of FRAmelco is progressing from commercial, purchasing, and industrial perspective.

 

China Priorities are well on track:

• Specialty business development is being consolidated in the context of COVID-19 resurgence. Ruminants delivered continued double-digit growth.
• Research & Innovation Center in China is expanding as planned to accommodate more resources in China.
• Basic engineering design for the new China specialty blending facility is in progress.
• Adisseo China Digitalization roadmap was finalized with early benefits expected in the integrated platform in Nanjing plant, especially in yield improvement and HSE management.

 

The first commercial FeedKind® Chongqing plant of Calysseo, Adisseo’s joint venture with Calysta, is progressing while facing challenges from COVID-19 restrictions. The plant recorded more than 1 million manhour without accident. 99% of the engineering and purchasing and more than 80% of the construction work were completed.  

 

As an illustration of Adisseo’s Open Innovation approach, R&D collaboration has been established between Adisseo and Entobel, a Singapore based insect producer, to better understand and enhance insect rearing performance and the nutritional requirement of insects so as to support the sustainability of the animal production industry through efficiency, welfare, biosecurity and traceability. And this is reinforcing Adisseo’s capacity in alternative protein business.

 

Q1 2022 net profit contributed to shareholders (CNY427 million) achieved +16% yoy growth thanks to growth in gross profit as well as favorable FX impact offsetting ongoing investment in research & innovation and sale & marketing investment to pursue business expansion.

 

2. Cash-flow and Net Debt

 

Cash position as of 31^st March 2022 stood at CNY1.2 billion, a reduction of CNY0.9 billion compared to 31^st December 2021, mainly driven by the redemption of the USD250 million outstanding preferred shares and self-financed CAPEX investment despite positive cash flow from operating activities.

 

3. Corporate Governance & Shareholder Structure

 

To ensure a more clarified formal delegation to the Company, a set of new implementation rules has been deliberated and approved by the board of directors, which confirms the company’s engagement in strong corporate and social responsibility and its high-quality development.

 

The conversion of the exchangeable bonds issued by Bluestar started on 21^st October 2020 till 2024. Even though there has been no conversion during this quarter, floating has now reached 14.2% of Adisseo market capitalization and is expected to be further increased to 25% upon the full conversion.

 

4. FY2022 outlook

 

Safety and sustainability remain Adisseo’s top priorities.

 

Volatility and uncertainty are more than ever prevailing. Facing the challenges from raw material supply shortage and cost increase in addition to on-going supply chain disruptions, Adisseo is engaged in delivering sustainable profitable growth while pursuing long-term value-creating investments.

 

In 2022, revenue growth is expected to accelerate, and this will contribute to offset significant raw material cost increase thanks to:

• Strong volume growth in methionine supported by capacity expansion projects
• Robust growth in specialties
• Continuous proactive margin and cost optimization arising from competitiveness enhancement program
• Leveraging innovation capabilities and external growth opportunities

 

-End-

 

 

 

About Adisseo

Adisseo is one of the world's leading experts in feed additives. The group relies on its 8 research centers and its production sites based in Europe, USA and China to design, produce, and market nutritional solutions for sustainable animal feed. With more than 2,532 employees, it serves around 3,900 customers in over 110 different countries through its global distribution network.

Adisseo is one of the main subsidiaries of China National BlueStar, leader in the Chinese chemical industry with nearly 20,000 employees and a turnover of CNY 71.5 billion in 2021.

Adisseo is listed on the Shanghai Stock Exchange.

Adisseo Corporate websites: www.adisseo.com; www.bluestar-adisseo.com

 

 

ADISSEO press contact

In China: Yun CAI, yun.cai@adisseo.com