FERMENTALG Libourne - April 3, 2024 - Fermentalg, the French leader in microalgae listed on Euronext (FALG), today unveils its 2023 annual results[1] .
Pierre Josselin, Chief Executive Officer of Fermentalg, comments: "In 2023, we were hit by soaring energy and raw materials prices and rising interest rates, but also by short-term commercial difficulties linked to the reduction in purchases by two major customers.
We are approaching 2024 with much greater confidence. The new strategic plan deployed since the end of 2023 is beginning to bear fruit, as demonstrated by our quarterly sales figures published today, which are well ahead of schedule.
This confirms that our technology, our products and our organization are now perfectly aligned to take advantage of the major underlying trends in favor of solutions for healthy, sustainable food, the protection of marine resources and the fight against climate change."
Income statement analysis
| (in K€) | 2022 | 2023 |
| Net Sales | 7 648 | 4 058 |
| Operating income before share-based payments and non-current items | -8 665 | -10 907 |
| Operating income after share-based payments and non-current items | -9 030 | -11 808 |
| Cost of net financial debt | -424 | -188 |
| Other financial income and expense | 39 | -1 277 |
| Share in net income of associates | -459 | -875 |
| Net income | -9 874 | -14 148 |
As already announced, sales for 2023, at €4.1 million, were down 47% on the previous year. In addition to the economic slowdown affecting consumption, particularly in the nutraceuticals segment, Fermentalg was penalized by two major customers who significantly reduced or completely cancelled their purchases.
This context explains the increase in inventories during the year, which led the Company to write down part of them, with an accounting impact of -2.0 M€ for the year. The net inventory of €6.8 million is due to be sold in 2024, with the resumption of commercial activity.
At the same time, the gradual increase in industrial productivity during the year offset the continued high level of energy and glucose prices. Total R&D costs fell by 28% to €5.6 million in 2023, reflecting the completion of industrialization of the acid-stable blue pigment of natural origin. After taking into account capitalized costs and amortization, the net expense amounted to €4.4 million, or 8% less than in 2022.
Operating income for the year, before share-based payments and non-recurring items, came to -10.9 M€, compared with -8.7 M€ a year earlier. After non-recurring items (transfer of industrial production to new partner HuveNutra and depreciation of obsolete equipment), operating income came to -11.8 M€, and to -9.8 M€ excluding inventory write-downs, compared with -9.0 M€ for FY 2022.
Financial expenses were heavily impacted by the calculation of the fair value under IFRS of the convertible bonds issued in 2023 (accounting impact of -1.2 M€ with no cash impact), against a backdrop of volatile share prices. After taking into account the Group's share in the earnings of CarbonWorks, a subsidiary dedicated to the development of CO2 circular economy solutions, whose operational ramp-up is weighing on results in the short term (€ -0.9 million versus € -0.5 million a year earlier), net income came to € -14.1 million (versus € -9.9 million in 2022).
Analysis of financial structure
| (in K€) | 21/12/2022 | 21/12/2023 |
| Shareholders' equity | 41 980 | 30 846 |
| Non-current borrowings | 10 187 | 13 973 |
| Current borrowings | 831 | 1 381 |
| Cash and cash equivalents | 15 902 | 11 162 |
As of December 31, 2023, Fermentalg had gross cash of €11.2 million (€15.9 million at end 2022) and shareholders' equity of €30.8 million.
The €6.3 million bond issue in March 2023 covered a large part of the company's needs in terms of operations (-€8.7 million) and capital expenditure (-€1.8 million), mainly in R&D.
Financial debt, amounting to €15.4m gross at year-end compared with €11.0m a year earlier, consists of repayable advances (€6.4m), the convertible bond held by the Givaudan group (€3.6m) and, for the balance, the portion of the above-mentioned bonds not yet converted into shares (€4.6m).
At present, the Company estimates that it has a liquidity horizon until the middle of the 2nd quarter 2025.
Outlook
After managing this transitional 2023 financial year, and buoyed by a good start to 2024, Fermentalg is approaching the coming months with confidence, confirming its sales ambitions of €10 million in 2024 and over €25 million in sales by 2026.
Next publication: 1st half-year sales 2024,
July 4, 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 Paris (FR0011271600 - FALG), and are eligible for PEA-PME and long-only SRD. 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
Consolidated income statement
| STATEMENT OF COMPREHENSIVE INCOME (in thousands of euros) | 31/12/2023 | 31/12/2022 | |
| Net Sales | 4 058 | 7 648 | |
| Other revenues | 1 063 | 1 387 | |
| Cost of sales | -3 522 | -5 831 | |
| Research and development costs | -4 414 | -4 774 | |
| Operating expenses excluding R&D | -8 091 | -7 096 | |
| Other current operating income and expenses | 0 | 0 | |
| Operating income before share-based payments and non-current items | -10 907 | -8 665 | |
| Personnel expenses related to share-based payments | -167 | -202 | |
| Other non-recurring operating income and expenses | -734 | -163 | |
| Operating income after share-based payments and non-current items | -11 808 | -9 030 | |
| Income from cash and cash equivalents | 294 | 17 | |
| Gross cost of debt | -482 | -441 | |
| Cost of net financial debt | -188 | -424 | |
| Other financial income and expense | -1 277 | 39 | |
| Net tax expense | 0 | 0 | |
| Share in net income of associates | -875 | -459 | |
| Net income | -14 148 | -9 874 | |
| Minority interests | 0 | 0 | |
| NET INCOME, GROUP SHARE | -14 148 | -9 874 | |
| Other comprehensive income (actuarial gains and losses on pension obligations, not recyclable in the income statement) | 52 | 200 | |
| OVERALL NET INCOME | -14 096 | -9 675 | |
| Minority interests | 0 | 0 | |
| NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | -14 096 | -9 675 | |
| Earnings per share (in €) | -0,32 | -0,24 | |
| Diluted earnings per share (in €) | -0,32 | -0,24 |
Consolidated statement of financial position
| BALANCE SHEET (in thousands of euros) | 31/12/2023 | 31/12/2022 | |
| ASSETS | |||
| Intangible assets | 14 989 | 14 365 | |
| Property, plant and equipment | 10 815 | 12 582 | |
| Investments in associates | 3 117 | 3 993 | |
| Financial and other non-current assets | 54 | 301 | |
| Deferred tax assets | 0 | 0 | |
| TOTAL NON-CURRENT ASSETS | 28 975 | 31 240 | |
| Inventories | 6 806 | 6 411 | |
| Trade receivables and other assets related to customer contracts | 1 078 | 1 344 | |
| Other receivables | 2 223 | 2 643 | |
| Cash and cash equivalents | 11 162 | 15 902 | |
| TOTAL CURRENT ASSETS | 21 269 | 26 300 | |
| TOTAL ASSETS | 50 244 | 57 540 | |
| LIABILITIES | |||
| Capital | 2 052 | 1 684 | |
| Issuance premium | 37 810 | 44 010 | |
| Retained earnings | 5 080 | 5 960 | |
| Net income (Loss) | -14 096 | -9 675 | |
| Equity attributable to equity holders of the parent company | 30 846 | 41 980 | |
| Minority interests | 0 | 0 | |
| TOTAL SHAREHOLDERS' EQUITY | 30 846 | 41 980 | |
| Non-current borrowings | 14 338 | 10 187 | |
| Pensions provisions | 282 | 253 | |
| Other non-current liabilities | 681 | 538 | |
| Deferred tax liabilities | 0 | 0 | |
| TOTAL NON-CURRENT LIABILITIES | 15 301 | 10 978 | |
| Current borrowings | 1 016 | 831 | |
| Provisions for current risks | 176 | 190 | |
| Trade payables | 1 436 | 1 522 | |
| Corporate income tax liabilities | 0 | 0 | |
| Other current liabilities | 1 469 | 2 040 | |
| TOTAL CURRENT LIABILITIES | 4 097 | 4 583 | |
| TOTAL LIABILITIES | 50 244 | 57 540 |
Consolidated cash flow statement
| CASH FLOW (in thousands of euros) | 31/12/2023 | 31/12/2022 | |
| Net income, Group share | -14 148 | -9 874 | |
| Depreciation, amortization and provisions (excluding current assets) | 3 154 | 2 548 | |
| Share-based payment expense | 167 | 196 | |
| Share of profit of associates | 875 | 459 | |
| Capital gains/losses on disposals | 1 | -66 | |
| Share of subsidies accounted as income | -237 | -284 | |
| Change in fair value of convertible bonds | 1 049 | 0 | |
| Cash flow | -9 140 | -7 022 | |
| Gross cost of debt | 482 | 441 | |
| Income tax expense | 0 | 0 | |
| Cash flow before cost of debt and tax | -8 657 | -6 581 | |
| Changes in inventories | -395 | -3 504 | |
| Changes in trade receivables (trade receivables, other assets and liabilities related to customer contracts) | 266 | 197 | |
| Changes in trade payables and related accounts | -93 | 355 | |
| Changes in other current assets and liabilities (a) | 215 | 1 321 | |
| Changes in operating working capital requirement | -7 | -1 631 | |
| NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES | -8 664 | -8 212 | |
| Production of fixed assets (capitalized R&D) | -1 952 | -3 728 | |
| Share of grants and R&D tax credits related to capitalized R&D projects | 461 | 1 136 | |
| Acquisitions of other tangible and intangible assets | -470 | -1 437 | |
| Investments in or acquisition of associates (MEQ) | 0 | -2 910 | |
| Change in payables on fixed assets | -63 | -313 | |
| Change in other non-current assets and liabilities | 247 | -128 | |
| Disposals of property, plant and equipment and intangible assets | 15 | 95 | |
| Disposal of financial assets | 0 | 0 | |
| NET CASH FLOWS FROM INVESTING ACTIVITIES | -1 763 | -7 286 | |
| Capital increase of the parent company | 73 | 4 549 | |
| Own equity instruments | -22 | -94 | |
| New borrowings and other financial liabilities | 6 412 | 1 492 | |
| Repayment of borrowings and other financial liabilities | -750 | -525 | |
| Change in current accounts | 0 | 0 | |
| Interest paid on borrowings | -26 | -32 | |
| NET CASH FLOWS FROM FINANCING ACTIVITIES | 5 686 | 5 389 | |
| Change in cash and cash equivalents | -4 740 | -10 109 | |
| Opening cash position | 15 902 | 26 010 | |
| Closing cash position | 11 162 | 15 902 |
[1] The Board of Directors of Fermentalg, chaired by Philippe Lavielle, has approved the IFRS annual financial statements, and the audit procedures have been completed. The certification report will be issued after completion of the procedures required for publication of the Universal Registration Document by April 30, 2024 at the latest.
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