April 26, 2018


Adisseo reports strong Q1 performance


Press release




Jean-Marc Dublanc, CEO of Adisseo, said: "We are satisfied about the 2018 Q1 results which are in line with our expectation. Despite the suffering of some headwinds, such as FX or increase of raw materials cost, we successfully maintained our solid profit margin, thanks to our well balanced operation management, one-off contribution from Vitamin business and confirmed innovation capability. Our new specialty product Rovabio Advance Phy was introduced in the first quarter and is receiving very positive response from our customers. We would expect the Rovabio Advance Phy and other new products in pipeline together with Nutriad integration to make an important contribution in 2018. We firmly believe that innovation is a key engine for sustainable growth."



Bluestar Adisseo Company ("Adisseo" or "the Company") Board of Directors disclosed its 2018 Q1 results today.


I. Business Review: Revenues & Net Profit contributed to shareholders



For the period under review, the Company recorded an operating revenue of CNY3.01 billion, representing a yoy increase of 22% thanks to the unswerving implementation of two-pillar strategy.


Among which, performance products recorded a yoy increase of 19%, thanks to the double-digit growth in liquid methionine as well as significant contribution from Vitamin business thanks to the successful management of market crisis due to the supply shortage of intermediate.


Adisseo confirmed its leadership in methionine, especially in liquid methionine which recorded a double-digit volume growth in the period under review although facing with more and more fierce competition. The leading position will be further strengthened with the commercialization of Rhodimet A-Dry+, and the completion of capacity expansion on the European platform in 2018.


The construction of the 180KT liquid methionine plant in Nanjing has started in March. The new plant will enable Adisseo to satisfy ever-increasing customer needs and their growth as well as to improve Adisseo cost efficiency.


Specialty products, consisting of enzymes, rumen-protected methionine, organic selenium and probiotics additives, now further supplemented by Nutriad products, achieved accelerated growth and has become a solid second business pillar of Adisseo. This business segment recorded an operating revenue of CNY542 million, representing a strong yoy growth of 32% and a contribution of 18% of total revenue. Business portfolio is becoming more balanced with the continued growth momemtum in new products including Rovabio Advance Phy, Alterion, Selisseo and Nutriad offerings.


The recently-completed acquisition of Nutriad, a global feed additives producer, is part of Adisseo' strategy to become one of the worldwide leaders of feed specialty additives. Nutriad products range, the animal species addressed (poultry, swine, aquaculture, dairy and cattle), and its customers are highly complementary to Adisseo's and will allow the combined businesses to implement integrated solutions and to offer even further value to its customers. With the integration project, Adisseo is expecting great synergy impact to be extracted from 2018 onwards and first cross selling synergies have already been successfully implemented.


Launched by the European leading venture capital firm Seventure Partners in March 2018, AVF Professional Private Equity Investment Fund with Adisseo as the cornerstone investor is actively working on 8 targets out of more than 100 start-ups already screened.

Thanks to the best-in-class manufacturing capability to compete with the deteriorated macro-environment such as increased raw materials and unfavorable foreign exchange impact, the gross profit margin remains at a solid level of 41% with net profit contributed to shareholders landing at CNY352 million, representing a yoy increase of 11%.


II. Cash-flow and net debt


Q1 2018 cash-flow represented a net flow out of CNY1.6billion as growing net profits allowed to fund acquisition of Nutriad as well as the increasing working capital requirements mainly driven by forthcoming plant maintenance and long-term industrial and operational investments.


Cash balance as at the end of 31st March 2018 changed from CNY7.7billion to CNY5.6billion after high-level investment and redemption of USD 80million (i.e. approximately CNY 520million) out of USD 400million preferred shares, but still remains at a high level, which will allow Adisseo to be able to execute better-than-market dividend distribution policy (35% pay-out ratio) and to be ready for any external growth opportunities whenever needed.


III. Outlook


Adisseo is expecting to maintain its sales growth momentum through H1 2018. Adisseo is benefiting from past investments to boost our volume growth in methionine, especially in liquid methionine.


Innovation is the spirit of Adisseo, which will boost the further development of specialty business with great vitality and strong sustainability. On-going investment in specialty business is planned throughout 2018 and we are expecting continued volume growth in specialty business thanks to the product line expansion as well as new product development.


However, it is important to highlight that the business performance will be under pressure, facing with adverse macro-environment, such as raw material and FX impact.