Safety and Sustainability o Safety is and remains Adisseo’s first priority: Q3 2024 TRIR landed at 0.13 o Nor-Feed acquired by Adisseo at beginning of 2023 successfully obtained B Corp label in September, a very demanding & highly recognized international label for ESG achievements & commitments Q3 2024: revenue recorded a yoy double-digit growth (+25%, CNY 4.11 billion) and achieved a solid gross margin level (+12ppt to 29%), driven by: o Outstanding performance in both liquid and powder methionine o Vitamin prices rebounding o Double-digit growth in specialties (+10% yoy) o Continuous cost saving efforts Key projects on track o 150KT powder methionine plant in Quanzhou: long lead time equipment contract signed and planning permit of construction engineering obtained o 37KT Specialty Blending Facility in Nanjing: equipment installation on track with mechanical completion by the end of 2024 o 30KT European Specialties Expansion and Optimization Project: construction completed, ramp-up ongoing, FAMI-QS audit successfully passed o Project to internalize the esterification process to produce the key ruminant product: ongoing with start-up expected in Q3 2025 One-China Strategy continues its successful track o Continued double-digit revenue growth in Q3 thanks to: o Historical record production and sales of liquid methionine o Strong growth in aqua and monogastric business driven by feed digestibility and successful launch of Selisseo® o Offsetting the negative impact from the difficult dairy market o High yield and reliability of the liquid methionine plant in Nanjing o Positive feedback from customers on the newly developed acidifiers product tailor made for the Chinese market o Calysseo: first trial sales of FeedKind® delivered in Europe and in the U.S. for pet food. The second fermenter pilot production line started its trial FY2024 outlook o Safety and sustainability remain Adisseo’s top priorities o Despite volatility and uncertainty, market demand continues to grow o Adisseo is fully engaged in delivering growth and improved margins, while pursuing strategic investments for the future. Meanwhile, Adisseo is exploring all possible solutions and implementing the defined action plans in a swift and agile way to mitigate potential headwinds and financial impacts which could arise from longer-than expected full-scale industrialization of disruptive FeedKind® technology. |
Zhigang HAO, Chairman and CEO of Adisseo, said: “I’m very pleased and proud of what we achieved in Q3 2024. The positive dynamics continued in Q3. Thanks to our continuous engagement in capacity expansion, research and innovation and operational excellence, we successfully captured the market opportunities and delivered strong business performance.
In Q3 2024, we delivered very strong results with a +25% yoy growth in revenues, and +120% yoy growth in gross profit, thanks to the outstanding performance in methionine, price rebounding of Vitamin A and solid business dynamics in specialty products despite still weak dairy market in the US and in China.
We are fully committed to deliver profitable growth and pursue our strategic investments to fuel future growth. We are monitoring tightly the operational and financial situation of the industrial pilot of disruptive Feedkind technology.”
Bluestar Adisseo Company (“Adisseo” or “the Company”) Board of Directors disclosed its Q3 2024 results.
I. Business Review: Revenues & Net Profit Attributable to Shareholders
Unit: CNY (100mil) | Q3 2024 | Q3 2023 | YoY variance |
Operating revenue | 41.1 | 32.9 | +25% |
- Performance Products | 31.1 | 23.8 | +31% |
- Specialty Products | 10.0 | 9.1 | +10% |
Gross profit (in % of operating revenue) | 12.0 29% | 5.5 17% | +120% +12ppt |
- Performance Products | 7.7 | 1.9 | +309% |
- Specialty Products | 4.3 | 3.6 | +20% |
Recurring EBITDA (Recurring EBITDA margin) | 9.3 23% | 3.5 11% | +166% +12ppt |
Net profit attributable to shareholders (Net margin) | 4.0 10% | -0.7 -2% | N/A +12ppt |
Recurring net profit attributable to shareholders (Recurring net margin) | 4.0 10% | -0.7 -2% | N/A +12ppt |
*Note: Since 2024, Adisseo streamlined its business units and recategorized all the products into performance and specialty products business units. Performance products include methionine, vitamins, ammonium sulfate, sodium sulfate, and sulfur products. Specialty products include monogastric, ruminant and aqua products, Norfeed, Innovia (drying formulation services) and FeedKind. Q3 2023 figures were restated per the new categorization.
Safety is and will remain Adisseo’s priority. In Q3 2024, Adisseo’s quarterly TRIR landed at 0.13, remaining at a very low level with 3 times less lost time accidents than the same period last year. Adisseo keeps working towards zero accident.
Nor-Feed, Adisseo subsidiary specialized in providing natural plant extracts for animal health, successfully obtained B Corp label In September. This is a very demanding & highly recognized international label for ESG achievements & commitments.
Adisseo is on track towards its sustainability ambition and in particular GHG emission reduction and energy use.
As an illustration of Adisseo’s sustainability projects, the Nanjing plant wastewater treatment project’s construction is on track. The key equipment installation has started, and completion is expected in Q2 2025.
In Q3 2024, revenues recorded a yoy double-digit growth (+25%) to CNY4.11 billion, gross profit increased by +120% yoy to CNY1.2 billion and gross margin improved by +12ppt yoy to 29%, thanks to:
Outstanding performance in both liquid and powder methionine
Vitamin prices rebounding
Double-digit growth in specialties (+10% yoy)
Continuous cost saving efforts
Regarding the methionine business, a very strong performance was achieved in Q3 2024 with a strong increase in revenue (+31%) and gross profit (+309%), driven by:
Record sales of liquid methionine, thanks to the successful market penetration globally
Double-digit growth in powder methionine
Close price monitoring and agile pricing management
Strong industrial performance, with historical production record in Nanjing plant and in Roussillon plant
Decreased distribution costs leveraging the two production platforms, which offset the price downward pressure
Construction and piling of the new 150KT powder methionine plant in Quanzhou is ongoing, with long lead time equipment contract signed and permit of construction engineering obtained.
Vitamin A & E prices rebounded in late Q3 and had a positive impact on margins of the Vitamins business. And the cost reduction of vitamin A production units is well on track.
In Q3 2024, specialties business achieved double digit growth in both revenues (+10% yoy) and gross profit (+20% yoy), thanks to the solid dynamic in monogastric and aqua business lines. Adisseo recorded a continued outstanding performance in Selisseo®, a highly innovative organic selenium, as well as strong results from new enzyme products including Rovabio® AdvPhy and Rovabio® PhyPlus.
A stronger demand for protected amino acids for dairy cows was seen, in particular for products boosting fat content into milk.
Nor-Feed business experienced strong business dynamic thanks to Norponin business, a dedicated anticoccidial solution (coccidiosis is one of the most prevalent parasites for Poultry).
The construction of the 30KT European Specialties Expansion and Optimization Project was completed. The ramp-up is ongoing and the plant passed successfully the FAMI-QS audit (The Quality & Safety System for Specialty Feed Ingredients).
The project to internalize the esterification process to produce the key ruminant product is ongoing with start-up expected in Q3 2025.
In Q3 2024, One-China Strategy progressed successfully. As an illustration:
Despite difficult dairy market, continued double-digit revenue growth in Chinese market in Q3 thanks to
- Historical record production and sales of liquid methionine
- Strong growth in aqua and monogastric business driven by feed digestibility and successful launch of Selisseo®
The Nanjing plant continued to deliver high yield and reliability which helps further enhance the competitiveness of production cost.
For the 37KT Specialty Blending Facility in Nanjing, the equipment installation is on track with mechanical completion planned by the end of 2024.
The newly developed acidifiers product tailor made for the Chinese market received positive feedback from customers.
The first trial sales of FeedKind®, the innovative single-cell protein, were delivered in Europe and in the U.S. for pet food. The second fermenter Calysseo’s FeedKind® pilot production line on which technical modifications are being tested started its trial. The objective is to achieve 80% of the design capacity, which is key to ensure mid-term economic profitability of the plant.
The continuous competitiveness program is expected to deliver increased recurring savings (CNY178 million) for FY2024. Operational excellence program is progressing with good dynamics across the globe, in all plants and all workstreams, which is expected to further boost the competitiveness of both Chinese and European production platform.
Actions with tangible improving results were pursued in Q3: the restructuring of Commentry powder methionine production line has been finalized, the VA manufacturing optimization project has been launched, and the operational excellence program in the highly effective Nanjing plant has been implemented.
Adisseo continues its active monitoring and optimization of global supply chain, distribution, and duties costs, notably in the U.S., to fully leverage the global industrial set-up to serve the global customer needs in the most flexible and efficient way.
Recurring EBITDA margin in Q3 landed at a solid level (23% vs 11% in Q3 2023), largely supported by:
the improved gross margin driven by continuous strong performance
effective cost competitiveness program allowing to deliver additional savings
Despite on-going investment in R&I, liquid dosing installations, business development in specialties to support future growth and innovation
Q3 2024 net profit attributable to shareholders increased significantly to CNY400mil, representing a solid net margin (10%).
II. Cash-flow and Net Debt
Cash position as of end of Q3 2024 increased by (+CNY310mil) vs 30th June 2024, driven by positive cash flow generated from operating activities and strict working capital management
III. FY2024 Outlook
Safety and sustainability remain Adisseo’s top priorities.
Despite volatility and uncertainty, market demand continues to grow especially for the Poultry species. Adisseo is fully engaged in delivering growth, improving margins, and pursue strategic investments for the future.
The positive momentum is expected to continue in the coming quarters thanks to:
Strong growth in methionine by continued penetration in liquid methionine
Positive contribution from Vitamin business thanks to the price rebound
Solid specialties dynamics leveraging the full range of services and product offerings
Continuous optimization of supply allowing to capture global market demand and local opportunities
Contribution from the operational excellence and cost control measures
Adisseo is also exploring all possible solutions and implementing the defined action plans in a swift and agile way to mitigate potential headwinds and financial impacts which could arise from longer-than expected full-scale industrialization of disruptive FeedKind® technology.
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About Adisseo
Adisseo is one of the world's leading experts in feed additives. The group relies on its 6 research centers and its production sites based in Europe, the U.S., China and Thailand to design, produce, and market nutritional solutions for sustainable animal feed. With more than 2,730 employees, it serves around 4,200 customers in over 110 different countries and regions through its global distribution network. In 2023, Adisseo recorded an operating revenue of CNY13.18 billion.
Adisseo is one of the main subsidiaries of China National BlueStar, a leader in the Chinese chemical industry with more than 12,000 employees and a turnover of CNY41.5 billion in 2023.
Adisseo is listed on the Shanghai Stock Exchange.
Adisseo Corporate websites: www.adisseo.com; www.bluestar-adisseo.com
Adisseo’s press contact
In China: Yun CAI, yun.cai@adisseo.com
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