H1 2016 results

Libourne – 15 September 2016 – Fermentalg, an industrial biotechnology company that specializes in the production of oils and proteins derived from microalgae, has published its results for the first half of 2016. Fermentalg's Board of Directors, which met on 13 September 2016, has approved the financial statements as at 30 June 2016. A limited review was carried out by the company's statutory auditors, and the half-yearly financial report will be available to the public no later than 30 September 2016.

Andrew Echatti, Chief Executive Officer, said: "The first half of 2016 marks an important stage in Fermentalg's development. The industrialization of our flagship product, DHA, was successfully launched in record time, and is clear proof of our ability as a company to rapidly go-to-market with a major new innovation. We have also prepared for the future, with the implementation of our roadmap for the 4 other programmes linked to our portfolio of products. All of this work has been carried out whilst respecting a strict policy of cost control and in close collaboration with the Board of Directors chaired by Philippe Lavielle."

Major headway for Fermentalg's 1st product: DHA

The strategic plan set in place last March defined the roadmap for the first 5 products to be developed by Fermentalg, with priority given to the commercialization of DHA before the end of the year.

DHA is a highly sought-after essential fatty acid (Omega 3) known for its role in the prevention of numerous illnesses. It is recognized for its beneficial effects on the brain (tissue, healthy development and increase in intellectual capacity) and the heart (reduction in triglycerides, cholesterol and the risk of cardiovascular disease).

Between March and September 2016, several key milestones were achieved:

• the signing of an industrial agreement for the large-scale production of DHA with ARD, a company specializing in bio-refining, industrial biotechnologies and bio-based chemistry;


• the completion of the DHA process book which is the last stage in pre-industrialization at the company's scientific facilities in Libourne and opens the way for large-scale production;


• the negotiations currently underway for a refining and logistics services contract with an expert from the edible oils industry which is expected to be finalized during the third quarter of 2016.

As a result, Fermentalg should be able to begin the production and commercialization of DHA as of the second half of 2016, once the test and scale-up phases have been completed (production using fermenters with a capacity of 150 m³) by its partner, ARD. Fermentalg's industrial investments for the first half of 2016 are estimated at €2 million (including materials and labor).

Definition of a roadmap for the portfolio of products

Alongside DHA, which is currently its most advanced product, Fermentalg has confirmed its calendar for the development of 4 additional products between now and 2020 (DHA+, BM Bastille, Phycocyanin and Astaxanthin).

End to construction for the IDU scheduled for the third quarter of 2016

In line with the industrial plan presented at the start of the year, Fermentalg intends to produce BM Bastille and Phycocyanin at its Industrial Development Unit (IDU) in Libourne (Gironde). The commissioning of the unit, which represents an estimated investment in the process of €23 million, is still scheduled for 2018.

The delivery of the building (excluding equipment) is expected at the end of the third quarter of 2016 and has so far represented an investment of €6.2 million.

Strict financial management and cash assets that are consistent with the needs of the plan

The strict financial management that has gone hand-in-hand with the implementation of this roadmap has enabled Fermentalg to maintain an adequate level of cash flow.

The company has notably reduced the budget allocated to research and development (€1.2 million for the first half of 2016 as against a figure of €1.7 million for the same period in 2015) given the maturity of its different programs, whilst upping its administrative and commercial expenditure (€1.9 million compared with €1.8 million) in order to strengthen its structure and prepare for the industrial and commercial deployment of its products. Since the end of its financial year, the company has recruited a full-time HR Director (1 July 2016) and Industrial Director (1 August 2016).

Fermentalg's current operating income[1] amounted to -€2.5 million for the first half of 2016 (vs. -€2.8 million for the first half of 2015). Excluding other income and expenses, net income amounted to -€2.6 million which is in line with the figure reported for the first six months of 2015.

Aside from the operating loss reported, Fermentalg's cash assets were also impacted by the investment for its IDU booked over the period (€3.0 million). At 30 June 2016, Fermentalg reported a gross cash position of €22.3 million (€28.5 million on 31 December 2015), a net cash position of €19.3 million (€25.6 million) and €41.7 million in equity (€44.4 million).

Stronger governance

Fermentalg also reinforced its governance with the co-option[2] of Philippe Lavielle as an independent director in May 2016 and his appointment as Chairman of the Board of Directors in September 2016.

An expert in the management of innovative companies primarily specializing in biotechnologies, Philippe Lavielle has lived and worked in San Francisco for more than 10 years. He also spent more than 20 years with Genencor, one of the leading architects in industrial enzymes acquired by DuPont, where he worked as Vice President and BU Manager before being named Executive Vice President in charge of Business Development.

About Fermentalg

Based in Libourne (Gironde), Fermentalg is an industrial biotechnology company and a global leader in the production of oils and proteins derived from the fermentation of microalgae. Its primary markets are the human nutrition and animal feed sectors and the green chemistry industry. Fermentalg shares are listed on Euronext in Paris (FR0011271600 - FALG). For more information, visit the Fermentalg website at: www.fermentalg.com.

 

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Comprehensive income statement

(€ thousands)
 
30/06/16
 
31/12/2015
 
30/06/2015


 
 
 
 
 
 
 


Revenue
 
172
 
479
 
0


 
 
 
 
 
 
 


Other income from operations
 
466
 
1,185
 
705


 
 
 
 
 
 
 


Production costs
 
0
 
0
 
0


Research and Development expenses
 
-1,196
 
-3,096
 
-1,698


Administrative and sales expenses
 
-1,949
 
-4,236
 
-1,758


Other operating income and expenses
 
0
 
0
 
0


 
 
 
 
 
 
 


Operating income before share-based payments
 
-2,507
 
-5,668
 
-2,751


 
 
 
 
 
 
 


Payroll expenses linked to share-based payments
 
-8
 
-117
 
-38


Other non-current operating income and expenses
 
-284
 
-50
 
-50


 
 
 
 
 
 
 


Operating income after share-based payments
 
-2,799
 
-5,836
 
-2,839


 
 
 
 
 
 
 


Income from cash and cash equivalents
 
209
 
581
 
312


Cost of gross financial debt
 
-32
 
-56
 
-27


 
 
 
 
 
 
 


Cost of net financial debt
 
177
 
525
 
285


 
 
 
 
 
 
 


Other financial income and expenses
 
-2
 
16
 
5


Net tax expense
 
0
 
0
 
0


 
 
 
 
 
 
 


Consolidated net income
 
-2,624
 
-5,295
 
-2,549


 
 
 
 
 
 
 


Minority interests
 
0
 
6
 
-2


 
 
 
 
 
 
 


Consolidated net income (Group share)
 
-2,624
 
-5,288
 
-2,551


 
 
 
 
 
 
 


Other consolidated income
 
0
 
0
 
0


 
 
 
 
 
 
 


Global consolidated net income
 
-2,624
 
-5,295
 
-2,549


 
 
 
 
 
 
 


Minority interests
 
0
 
6
 
-2


 
 
 
 
 
 
 


Global consolidated net income (Group share)
 
-2,624
 
-5,288
 
-2,550


 
 
 
 
 
 
 


 
 
 
 
 
 
 


Consolidated net earnings per share (in euros)
 
-0.22
 
-0.44
 
-0.21


Consolidated diluted net earnings per share (in euros)
 
-0.22
 
-0.43
 
-0.21


 
 
 
 
 
 
 

Balance sheet

(€ thousands)
 
30/06/16
 
31/12/2015
 
30/06/2015


ASSETS
 
 
 
 
 
 


Goodwill
 
0
 
0
 
0


Intangible assets
 
4,925
 
4,241
 
3,569


Tangible assets
 
14,884
 
12,455
 
9,471


Non-current financial assets
 
132
 
351
 
342


Deferred tax assets
 
3,302
 
3,302
 
3,303


 
 
 
 
 
 
 


TOTAL NON-CURRENT ASSETS
 
23,244
 
20,349
 
16,685


 
 
 
 
 
 
 


Inventories
 
0
 
0
 
0


Client receivables
 
55
 
516
 
1


Corporate income tax receivables
 
0
 
15
 
19


Other receivables
 
3,624
 
3,969
 
2,985


Other non-financial current assets
 
0
 
0
 
0


Cash and cash equivalents
 
22,273
 
28,506
 
32,521


TOTAL CURRENT ASSETS
 
25,952
 
33,006
 
35,526


TOTAL ASSETS
 
49,196
 
53,355
 
52,211


 
 
 
 
 
 
 


LIABILITIES
 
 
 
 
 
 


Capital
 
484
 
484
 
484


Premiums
 
50,289
 
56,632
 
56,632


Reserves and retained earnings
 
-6,449
 
-7,466
 
-7,552


Global net income
 
-2,623
 
-5,287
 
-2,550


 
 
 
 
 
 
 


Shareholders' equity (Group share)
 
41,701
 
44,362
 
47,013


Minority interests
 
17
 
17
 
-24


TOTAL SHAREHOLDERS' EQUITY
 
41,718
 
44,380
 
46,989


 
 
 
 
 
 
 


Financial debt
 
2,933
 
2,902
 
2,034


Retirement commitments
 
65
 
56
 
77


Provisions for non-current risks
 
355
 
300
 
350


Other non-current liabilities
 
0
 
0
 
0


Affiliated companies
 
0
 
0
 
0


Deferred tax liabilities
 
0
 
0
 
0


TOTAL NON-CURRENT LIABILITIES
 
3,353
 
3,258
 
2,461


 
 
 
 
 
 
 


Bank overdrafts
 
0
 
900
 
82


Current accounts
 
0
 
0
 
0


Other financial debt
 
0
 
0
 
0


Provisions for current risks
 
0
 
0
 
0


Corporate income tax liabilities
 
0
 
0
 
0


Supplier debt
 
1,602
 
1,881
 
1,590


Other current liabilities
 
2,523
 
2,936
 
1,089


TOTAL CURRENT LIABILITIES
 
4,125
 
5,717
 
2,761


TOTAL LIABILITIES
 
49,196
 
53,355
 
52,211

Cash flow statement

 

 
 
30/06/16
 
31/12/2015
 
30/06/2015


 
 
 
 
 
 
 


Global net income
 
-2,624
 
-5,295
 
-2,549


Depreciation, amortization and provisions (excluding provisions against current assets)
 
591
 
992
 
572


Expenses on share-based payments
 
2
 
117
 
38


Other computed expenses
 
0
 
0
 
0


Change in deferred tax
 
0
 
0
 
0


Share in income of companies accounted for by the equity method
 
0
 
0
 
0


Gains and losses on disposals
 
169
 
0
 
0


Share in subsidies
 
0
 
0
 
0


Cash flow
 
-1,862
 
-4,186
 
-1,939


Cost of gross financial debt
 
31
 
56
 
27


Tax
 
0
 
0
 
0


Cash flow before cost of financial debt, net of tax
 
-1,831
 
-4,130
 
-1,912


 
 
 
 
 
 
 


Tax
 
15
 
0
 
0


Change in consumables
 
-61
 
12
 
-6


Change in client receivables
 
461
 
-486
 
29


Change in supplier payables
 
-197
 
1,078
 
829


Change in other current assets and liabilities (a)
 
8
 
-279
 
-980


Change in working capital requirement linked to operations
 
226
 
325
 
-128


Net cash flow linked to operations
 
-1,605
 
-3,805
 
-2,040


Production of fixed assets (capitalized R&D)
 
-867
 
-2,039
 
-1,029


 
 
299
 
739
 
376


Acquisitions of other tangible and intangible assets
 
-3,047
 
-8,407
 
-4,908


Change in fixed asset liabilities
 
-114
 
-264
 
-448


Acquisitions of financial fixed assets
 
0
 
-1
 
0


Disposals of other tangible and intangible assets
 
0
 
5
 
0


Disposals of financial assets
 
50
 
4
 
6


Cash linked to the acquisition and disposal of subsidiaries
 
0
 
0
 
0


Net cash flow linked to investments
 
-3,679
 
-9,963
 
-6,003


Capital increase linked to parent company
 
0
 
727
 
727


Capital increase reserved for employees
 
0
 
49
 
-17


Acquisitions and disposals of own shares
 
-49
 
-8
 
0


New borrowings and other financial debt
 
0
 
889
 
0


Repayments of borrowings and other financial debt
 
0
 
0
 
0


Change in current accounts
 
0
 
-54
 
1


Interest on borrowings and financial debt
 
0
 
0
 
-1


Net cash flow linked to financing
 
-49
 
1,603
 
710


Change in cash
 
-5,333
 
-12,165
 
-7,333


 
 
 
 
 
 
 


Opening cash (1)
 
27,607
 
39,772
 
39,772


Closing cash (1)
 
22,274
 
27,607
 
32,439


 
 
 
 
 
 
 


(a) o/w change in research tax credit:
 
242
 
-1,347
 
-737

(1) Available cash less bank overdrafts.

Source: Actusnews