from FERMENTALG (EPA:FALG)
A 1st half-year 2024 marked by the success of the commercial relaunch and the strengthening of strategic alliances
Libourne - September 17, 2024 - Fermentalg (Euronext Growth / ALGAE), expert French microalgae company, presents its results for the 1st half-year of the 2024 financial year, following approval of the accounts by the Board of Directors at its meeting today[1]. These results confirm the relevance of the new strategic plan and its two pillars: boosting sales by opening up new markets and strengthening strategic partnerships.
2.7-fold increase in sales of DHA Origins® and outlook confirmed
Under the impetus of the new Chief Executive Officer, and in line with the roadmap presented in December 2023, Fermentalg recorded very strong sales momentum in the 1er half-year 2024.
By the end of June, the Company had generated sales of €6.3m, a 2.7-fold increase on the 1er half-year 2023. This is the best commercial half-year recorded by the Company since the launch of the DHA Origins® range, the omega-3-rich algal oil, in 2018.
This performance is the fruit of a strengthened marketing and sales team and a rethought strategy based on opening up new markets. Over the 1er half-year, Fermentalg booked its first orders in the promising premium dietary supplements and petfood segments. This offensive strategy will continue over the coming months, with an expansion into human and animal nutrition market segments.
Thanks to these new outlets, Fermentalg confirms its annual sales target of at least €12 million, 3 times higher than 2023 (€4 million), even though the market context has hardened in recent months, with fish oil prices falling but remaining above historical levels.
Strategic partnership with Huvepharma group gains momentum
At the end of 2023, Fermentalg formed a strategic alliance with the Huvepharma group, the European leader in large scale precision fermentation for the animal and human health sectors. This alliance was ramped up during the 1er half-year 2024, with in particular:
- The successful industrial transfer of DHA Origins® production to Huvepharma's Bulgarian plants: the first volume production runs have started successfully, yields are gradually improving and the target conditions for industrial performance are now being met, enabling ultimate gains in profitability and competitiveness.
- The launch of EverzureTM, the only acid-stable natural blue colorant developed by Fermentalg (see below).
- Huvepharma's participation in Fermentalg's successful capital increase in June 2024, making it the Company's largest shareholder with just over 20% of the capital and voting rights. In this context, the General Meeting of Shareholders held today appointed Anguel Jeliazkov Ivanov, Vice-President at Huvepharma group to the Company's Board of Directors.
Continued developments with Givaudan around EverzureTM
In line with its strategy of forging alliances with partners who can leverage its industrial and commercial performance, Fermentalg pursued its partnership with Givaudan, a world leader in food colorants, over the 1er half-year around EverzureTM , with the following advances:
- In terms of technological and industrial development, the work carried out by Fermentalg at pilot scale has been finalized, and the transfer of production to industrial scale at Huvepharma, currently underway, is due to be completed in the second half of the year.
- On the commercial front, Givaudan has carried out sampling tests with potential partners, confirming initial interest. Discussions are now continuing with a view to placing the first orders.
- On the regulatory front, approval files are still being examined with a view to first approvals in Europe and the United States, where FDA approval should be expected between late 2024 and early 2025, given the comparable age of the dossiers.
Slight improvement in operating income as sales and manufacturing ramp up
| (in K€) | S1 2023 | S1 2024 |
| Net Sales | 2 340 | 6 319 |
| Operating income before share-based payments and non-current items | -4 742 | -4 360 |
| Operating income after share-based payments and non-current items | -4 594 | -4 351 |
| Cost of net financial debt | -103 | -122 |
| Other financial income and expense | -686 | -774 |
| Share in net income (loss) of associates | -289 | -415 |
| Net income (loss) | -5 673 | -5 662 |
Against this backdrop of ramping up sales and optimizing production facilities, Fermentalg reported stable half-year net result overall compare to 2023.
In detail, operating income, before share-based payments and non-current items, came to -€4.4m, compared with -€4.7m in the 1er half 2023. The 2.7-fold increase in sales had a beneficial effect, partially offset by:
- A margin on direct costs temporarily impacted by costs linked to the transfer and optimization of the industrial process, the pricing policy applied in the phase of commercial conquest in new segments, and the destocking of production carried out in 2023 at high cost by the former subcontractor (see below).
- A +10% increase in operating expenses, reflecting the strengthening of sales teams and marketing actions.
- Research and development costs up 5%, due to lower capitalization of these costs (€0.4m vs. €1.3m), with total R&D expenditure down €0.9m.
Net income was stable at -5.6 M€, after taking into account the non-cash accounting charge for calculating the fair value of convertible bonds issued in 2023 (-0.8 M€) and the share of profit of the subsidiary CarbonWorks (-0.4 M€ versus -0.3 M€ in the 1er half-year 2023).
Cash position up by €10 million
| (in K€) | 31/12/2023 | 30/06/2024 |
| Shareholders' equity | 30 846 | 39 050 |
| Non-current borrowings | 13 973 | 8 673 |
| Current borrowings | 1 381 | 5 323 |
| Cash and cash equivalents | 11 162 | 21 265 |
At June 30, 2024, Fermentalg had gross cash of €21.3 million, up €10.1 million in 6 months, and shareholders' equity of €39.1 million.
This significant increase in cash flow was made possible by the success of the capital increase for a net amount of €11.8 million carried out in June 2024, which saw Huvepharma acquire a stake and Bpifrance confirm its financial support for the Company, and by inventory reduction efforts (€4.9 million) at the start of the year. These flows offset the company's current expenses (cash flow of €3.3 million) and R&D investments (€0.4 million).
Gross financial debt, amounting to €14.0 million at the end of June 2024, fell by €1.5 million during the half-year. It is mainly made up of repayable advances (5.8 M€), the convertible bond held by the Givaudan group (3.7 M€) and the balance of the bonds issued in March 2023 (3.2 M€), over 60% of which have already been converted.
At present, the Company considers that its liquidity horizon extends beyond the next 12 months.
Next publication: sales for the 3ème quarter 2024,
October 3, 2024 (after market close)
About Fermentalg
An expert in the research and bioindustrial exploitation of microalgae, Fermentalg aims to offer sustainable solutions and innovative products that contribute to the development of healthy, natural and high-performance products . Our business: the development, production and marketing of sustainable solutions and active ingredients derived from microalgae, for nutrition, health and the environment. Nutritional lipids, alternative proteins, natural food colorings and innovative environmental solutions make up our company's current and future offering. Fermentalg shares are listed on Euronext Growth Paris (FR0011271600 - ALGAE) and are PEA-PME eligible. It has received an Exemplary rating (90/100) from EthiFinance ESG Ratings, a rating agency specializing in the ESG performance of SMEs listed on European markets, in favor of Socially Responsible Investment (SRI).
For further information: www.fermentalg.com
| Contact for journalists: | Investor Relations : |
| ACTUS finance and communication Fatou-Kiné N'DIAYE Telephone: +33 (0)1 53 67 36 34 fndiaye@actus.fr | ACTUS finance and communication Jérôme FABREGUETTES LEIB Telephone: +33 (0)1 53 67 36 78 fermentalg@actus.fr |
Appendices
| STATEMENT OF COMPREHENSIVE INCOME (in thousands of euros) | 30/06/2024 | 31/12/2023 | 30/06/2023 | |
| Sales figures | 6 319 | 4 058 | 2 340 | |
| Other business-related products | 813 | 1 063 | 538 | |
| Cost of sales | -5 247 | -3 522 | -1 860 | |
| Research and development costs | -2 099 | -4 414 | -1 998 | |
| Operating expenses excluding R&D | -4 145 | -8 091 | -3 762 | |
| Other current operating income and expenses | 0 | 0 | 0 | |
| Operating income before share-based payments and non-current items | -4 360 | -10 907 | -4 742 | |
| Personnel expenses related to share-based payments | -40 | -167 | -76 | |
| Other non-recurring operating income and expenses | 49 | -734 | 225 | |
| Operating income after share-based payments and non-current items | -4 351 | -11 808 | -4 594 | |
| Income from cash and cash equivalents | 86 | 294 | 113 | |
| Gross cost of debt | -208 | -482 | -216 | |
| Cost of net financial debt | -122 | -188 | -103 | |
| Other financial income and expense | -774 | -1 277 | -686 | |
| Net tax expense | 0 | 0 | 0 | |
| Share in net income of associates | -415 | -875 | -289 | |
| Net income | -5 662 | -14 148 | -5 673 | |
| Minority interests | 0 | 0 | 0 | |
| NET INCOME, GROUP SHARE | -5 662 | -14 148 | -5 673 | |
| Other comprehensive income (actuarial gains and losses on pension obligations, not recyclable in the income statement) | 0 | 52 | 0 | |
| OVERALL NET INCOME | -5 662 | -14 096 | -5 673 | |
| Minority interests | 0 | 0 | 0 | |
| NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | -5 662 | -14 096 | -5 673 | |
| Earnings per share (in €) | -0,10 | -0,32 | -0,13 | |
| Diluted earnings per share (in €) | -0,10 | -0,32 | -0,13 |
| BALANCE SHEET (in thousands of euros) | 30/06/2024 | 31/12/2023 | 30/06/2023 | |
| ASSETS | ||||
| Intangible assets | 14 995 | 14 989 | 14 660 | |
| Property, plant and equipment | 10 195 | 10 815 | 11 998 | |
| Investments in associates | 2 702 | 3 117 | 3 702 | |
| Financial and other non-current assets | 48 | 54 | 283 | |
| Deferred tax assets | 0 | 0 | 0 | |
| TOTAL NON-CURRENT ASSETS | 27 940 | 28 975 | 30 644 | |
| Stocks | 1 934 | 6 806 | 8 358 | |
| Trade receivables and other assets related to customer contracts | 2 040 | 1 078 | 1 292 | |
| Other receivables | 3 245 | 2 223 | 3 127 | |
| Corporate income tax receivables | 0 | 0 | 0 | |
| Cash and cash equivalents | 21 265 | 11 162 | 15 399 | |
| TOTAL CURRENT ASSETS | 28 484 | 21 269 | 28 176 | |
| TOTAL ASSETS | 56 425 | 50 244 | 58 820 | |
| LIABILITIES | ||||
| Capital | 3 515 | 2 052 | 1 714 | |
| Bonus | 38 360 | 37 810 | 36 203 | |
| Reserves and RAN | 2 838 | 5 080 | 4 673 | |
| Total net income | -5 662 | -14 096 | -5 672 | |
| Equity attributable to equity holders of the parent | 39 050 | 30 846 | 36 918 | |
| Minority interests | 0 | 0 | 0 | |
| TOTAL SHAREHOLDERS' EQUITY | 39 050 | 30 846 | 36 918 | |
| Non-current borrowings | 8 673 | 13 973 | 15 858 | |
| Retirement commitments | 321 | 282 | 298 | |
| Other non-current liabilities | 623 | 681 | 479 | |
| TOTAL NON-CURRENT LIABILITIES | 0 | 0 | 0 | |
| Current borrowings | 5 323 | 1 381 | 1 430 | |
| Provisions for current risks | 0 | 176 | 10 | |
| Trade payables | 891 | 1 436 | 2 204 | |
| Corporate income tax liabilities | 0 | 0 | 0 | |
| Other current liabilities | 1 544 | 1 469 | 1 623 | |
| TOTAL CURRENT LIABILITIES | 7 758 | 4 462 | 5 267 | |
| TOTAL LIABILITIES | 56 425 | 50 244 | 58 820 |
| CASH FLOW (in thousands of euros) | 30/06/2024 | 31/12/2023 | 30/06/2023 | |
| Total net income | -5 662 | -14 148 | -5 673 | |
| Depreciation, amortization and provisions (excluding current assets) | 1 183 | 3 155 | 1 139 | |
| Share-based payment expense | 40 | 167 | 88 | |
| Share of profit of associates | 415 | 875 | 289 | |
| Capital gains/losses on disposals | -48 | 2 | 0 | |
| Share of subsidies in income | -58 | -237 | -58 | |
| Change in fair value of OCAs | 640 | 1 049 | 388 | |
| Cash flow | -3 490 | -9 138 | -3 826 | |
| Gross cost of debt | 208 | 482 | 216 | |
| Income tax expense | 0 | 0 | 0 | |
| Cash flow before cost of debt and tax | -3 282 | -8 655 | -3 610 | |
| Change in inventories | 4 872 | -395 | -1 947 | |
| Change in trade receivables (trade receivables, other assets and liabilities related to customer contracts) | -962 | 266 | 52 | |
| Change in trade payables and related accounts | -585 | -93 | 678 | |
| Change in other current assets and liabilities (a) | -1 033 | 215 | -850 | |
| Change in operating working capital requirement | 2 292 | -7 | -2 067 | |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | -990 | -8 662 | -5 677 | |
| Production of fixed assets (capitalized R&D) | -427 | -1 952 | -1 302 | |
| Share of grants and CIR related to capitalized development projects | 132 | 461 | 615 | |
| Acquisitions of other tangible and intangible assets | -383 | -472 | -298 | |
| Investments in or acquisition of associates (MEQ) | 0 | 0 | 0 | |
| Change in payables on fixed assets | 109 | -63 | -65 | |
| Change in other non-current assets and liabilities | 6 | 247 | 17 | |
| Disposals of property, plant and equipment and intangible assets | 18 | 15 | 0 | |
| Disposal of financial assets | 0 | 0 | 0 | |
| NET CASH FLOWS FROM INVESTING ACTIVITIES | -545 | -1 765 | -1 032 | |
| Capital increase linked to the parent company | 11 802 | 73 | -12 | |
| Acquisitions and disposals of treasury shares | -6 | -22 | -3 | |
| New borrowings and other financial liabilities | 168 | 6 412 | 6 412 | |
| Repayment of borrowings and other financial liabilities | -315 | -750 | -175 | |
| Change in current accounts | 0 | 0 | 0 | |
| Interest paid on borrowings | -10 | -26 | -14 | |
| NET CASH FLOWS FROM FINANCING ACTIVITIES | 11 638 | 5 686 | 6 208 | |
| Change in cash and cash equivalents | 10 103 | -4 741 | -502 | |
| Opening cash position | 11 162 | 15 902 | 15 902 | |
| Closing cash position | 21 265 | 11 162 | 15 400 | |
| (a): of which change in Research Tax Credit (CIR): | -684 | 365 | 0 |
[1] The auditors' limited review procedures on these financial statements have been performed. The interim financial report will be published no later than September 30, 2024.