Corbion: announces first half 2016 results

Amsterdam / NL. (cb) Corbion reported H1 2016 sales of 455.7 million EUR, an increase of 0.8 percent compared to H1 2015. Organic sales growth was 1.5 percent, mostly driven by business mix improvements. Ebitda excluding one-off items in H1 2016 increased by 16.2 percent to 89.8 million EUR. Organic Ebitda growth in H1 2016 amounted to 17.8 percent.

«We can look back on a good first half of the year, and are on track to deliver our Disciplined Value Creation strategy 2015-2018 targets. Our profitability, margin, and ROCE all increased substantially, driven by a combination of business mix improvements and lower input costs. Strong operating performance combined with prudent investment policies resulted in improved free cash flow. As part of our strategy execution, we are in the process of improving the portfolio profitability in our Food business segment, which had an adverse volume effect in the latter part of H1. As expected, the Biochemicals business segment sales growth rate showed a strong recovery in the second quarter», comments Tjerk de Ruiter, CEO.

Key financial highlights first half of 2016

• Net sales organic growth YTD was 1.5 percent; volume growth was -0.2 percent
• Ebitda before one-off items YTD was 89.8 million EUR, an organic increase of 17.8 percent
• Ebitda margin before one-off items YTD was 19.7 percent
• Our productivity improvement program Streamline contributed 9.2 million EUR to Ebitda YTD (H1 2015: 6.8 million EUR)
• One-off items at Ebitda level of -2.3 million EUR, mostly in connection with closure of our Kansas powder blending plant which was closed in June
• Operating result YTD was 63.4 million EUR, an organic increase of 21.2 percent
• Free cash flow was YTD 26.0 million EUR, an increase of 13.4 million EUR
• We commenced our 50 million EUR share buyback program on 21 March 2016. By the end of H1 the total buyback amount was 21.9 million EUR

Net sales increased by 0.8 percent

Net sales in H1 2016 increased by 0.8 percent to 455.7 million EUR (H1 2015: 452.3 million EUR) driven by organic growth (1.5 percent), currencies (-1.0 percent), and acquisitions (0.3 percent). The acquisition impact is related to our acquisition of the Archer Daniels Midland lactic acid business, effective as of 31 March 2015. Organic growth in the Biobased Ingredients business unit of 0.5 percent was driven by both Food and Biochemicals. In the Food business segment, price/mix increase was the main driver of 0.4 percent organic growth due to our portfolio improvement initiatives. In the Biochemicals business segment volume growth was the main driver. All markets, except for agrochemicals, contributed to this growth. Growth in Biobased Innovations was mostly driven by lactide and PLA sales.

Ebitda

Ebitda (excluding one-off items) increased by 16.2 percent to 89.8 million EUR, mostly driven by lower input costs, business mix improvements, and program Streamline. Currencies negatively impacted Ebitda by 1.8 million EUR. Biobased Ingredients increased its Ebitda by 15.0 percent driven by organic growth (mostly due to positive price/mix effect). Our program Streamline contributed 2.4 million EUR to this Ebitda growth. The Ebitda loss in Biobased Innovations was relatively stable at -/-2.3 million EUR.

Outlook 2016

We remain confident in the execution of our Disciplined Value Creation strategy. In our Food business segment we continue to reduce the complexity and the amount of low-profitability contracts in the coming quarters to sustainably increase our profitability. This will have a temporary negative effect on sales growth in our Food business segment. Full year growth for this segment is expected to end up below the multi-year (2015-2018 CAGR) guidance range of 1-3 percent. The Biochemicals business segment is expected to show improved sales growth in H2 compared to H1, while full year growth is expected to be near the lower end of the multi-year average guidance range of 5-8 percent. As a consequence, for Biobased Ingredients, we expect full year growth to be below the multi-year average guidance range of 2-4 percent.