FERMENTALG : 2016 results

Libourne - 29 March 2017 – Fermentalg, an industrial biotechnology company that specializes in the production of oils, proteins and pigments derived from microalgae, has published its results for financial year 2016. Its Board of Directors, which met on 8 March 2017 under Chairman Philippe Lavielle, has approved the Group's accounts as at 31 December 2016. The financial statements have been audited in full and the yearly financial report will be available to the public no later than 30 April 2017.

Primary development strategies

2016 saw Fermentalg focus its resources on its priority short- and medium-term programs (1 to 3 years), including:

the industrialization and commercialization of Omega-3 algal oil, DHA350;

the industrialization and commercialization of concentrated Omega-3 algal oil, DHA550;

the development of processes and the industrialization of a natural blue pigment for food derived from Phycocyanine;

the development of processes and the industrialization of an antioxidant algal protein for human nutrition and animal feed.

The company also decided to pursue its partnership with the SUEZ Group linked to the development of urban and industrial carbon sinks designed to purify the surrounding atmosphere through the capture of carbon dioxide (CO₂) and other pollutant particles.

Lastly, Fermentalg has also continued with its research on Astaxanthin, a natural red pigment for use in nutrition and cosmetics, and with its collaborative program with Adisseo linked to animal feed.

Adapting resources to roadmap

Fermentalg's operating income (revenue and research tax credit, subsidies) amounted to €0.7 million for 2016.

In line with the Group's strategic roadmap and budget, the number of employees assigned to R&D went from 46 in December 2015 to 37 in December 2016. Fermentalg had 20 families of patents at end-2016, including 2 new patents registered during the year. Taking into account the development partnerships signed by the company in 2016, the global R&D budget remained stable at €5.0 million.

Administrative and sales expenses assigned to structuring the company and preparing for its industrial and commercial development also remained stable at €4.3 million for the year.

As a result, current operating income [1] stood at -€6.2 million (-€5.7 million in 2015). After other operating expenses (€1.6 million primarily linked to the Group's strategic repositioning) and net cash proceeds (€0.3 million as against €0.5 million in 2015), net income amounted to -€7.6 million in 2015 compared with -€5.3 million in 2015.

Cash assets of €15.7 million at the end of 2016

After industrial investments of €5.3 million in the Libourne site and €1.5 million in the partner factory in Pomacle, equity amounted to €36.6 million for a gross cash position of €15.7 million on 31 December 2016 (€28.5 million on 31 December 2015). Financial debt consisted of €3.3 million in repayable advances on Fermentalg's innovation programs, leaving the Group with what it considers to be sufficient cash assets to finance its development plan in 2017. Fermentalg is already working on various financing solutions to accompany its industrial and commercial development.

Outlook: industrial and commercial launch of DHA350

2017 should see the actual industrial and commercial launch of DHA350. The priorities for the beginning of the year focus on:

the setting up of a sales team to be headed up by the new Sales Director;

the issue of samples to distributors and industrial operators from the agrifood industry to enable them to test and validate products;

the perfectioning of the production process at the Pomacle site.

In line with the calendar presented at the start of 2016, Fermentalg also intends to finalize the development and large-scale production of concentrated Omega-3 oil, DHA550. The preindustrial and regulatory developments needed upstream of the market launch of the antioxidant food protein and Phycocyanine will also be priorities in 2017.

About Fermentalg

Based in Libourne (Gironde), Fermentalg is an industrial biotechnology company and a global leader in the production of oils, proteins and pigments derived from the fermentation of microalgae. Its primary markets are the food and feed markets. 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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ACTUS finance & communication

Alexandra Prisa

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ACTUS finance & communication

Jérôme Fabreguettes-Leib

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[email protected]

Comprehensive income statement

(€ thousands)
31/12/16
31/12/15

Revenue
137
479

Other income from operations
568
1,185

Production costs
-133
0

Research and Development expenses
-2,566
-3,096

Administrative and sales expenses
-4,250
-4,236

Operating income before share-based payments and non-current items
-6,244
-5,668

Payroll expenses linked to share-based payments
138
-117

Other non-current operating income and expenses
-1,594
-50

Operating income
-7,700
-5,836

Income from cash and cash equivalents
328
581

Cost of gross financial debt
-70
-56

Cost of net financial debt
258
525

Other financial income and expenses
-61
16

Net tax expense
-67
0

Consolidated net income
-7,570
-5,295

Minority interests
11
6

GLOBAL CONSOLIDATED NET INCOME (GROUP SHARE)
-7,559
-5,288

Consolidated net earnings per share (in euros)
-0.63
-0.44

Consolidated diluted net earnings per share (in euros)
-0.62
-0.43

Balance sheet

(€ thousands)
31/12/16
31/12/15

ASSETS

Goodwill
0
0

Intangible assets
6,020
4,241

Tangible assets
17,613
12,455

Non-current financial assets
140
351

Deferred tax assets
3,236
3,302

TOTAL NON-CURRENT ASSETS
27,009
20,349

Inventories
558
0

Client receivables
7
516

Corporate income tax receivables
0
15

Other non-financial current assets
2,814
3,969

Cash and cash equivalents
15,707
28,506

TOTAL CURRENT ASSETS
19,086
33,006

TOTAL ASSETS
46,095
53,355

LIABILITIES

Capital
484
484

Premiums
50,289
56,632

Reserves and retained earnings
-6,582
-7,466

Global net income
-7,559
-5,287

Shareholders' equity (Group share)
36,632
44,362

Minority interests
-43
17

TOTAL SHAREHOLDERS' EQUITY
36,589
44,380

Financial debt
3,348
2,902

Retirement commitments
64
56

Provisions for non-current risks
0
300

TOTAL NON-CURRENT LIABILITIES
3,412
3,258

Bank overdrafts
0
900

Provisions for current risks
590
0

Supplier debt
3,175
1,881

Other current liabilities
2,329
2,936

TOTAL CURRENT LIABILITIES
6,094
5,717

TOTAL LIABILITIES
46,095
53,355

Cash flow statement

(€ thousands)
31/12/16
31/12/15

Global net income
-7,570
-5,295

Depreciation, amortization and provisions (excluding provisions against current assets)
1,840
992

Expenses on share-based payments
-138
117

Change in deferred tax
66
0

Gains and losses on disposals
235
0

Cash flow
-5,567
-4,186

Cost of gross financial debt
70
56

Cash flow before cost of financial debt,

net of tax
-5,497
-4,130

Tax
15
0

Change in consumables
-373
12

Change in client receivables
509
-486

Change in supplier payables
1,165
1,078

Change in other current assets and liabilities (a)
712
-279

Change in working capital requirement linked to operations
2,028
325

NET CASH FLOW LINKED TO OPERATIONS
-3,469
-3,805

Production of fixed assets (capitalized R&D)
-2,460
-2,039

Share of subsidies and research tax credit linked to development projects underway
595
739

Acquisitions of other tangible and intangible assets
-6,849
-8,407

Change in fixed asset liabilities
-304
-264

Acquisitions of financial fixed assets
0
-1

Disposals of other tangible and intangible assets
0
5

Disposals of financial assets
211
4

Cash linked to the acquisition and disposal of subsidiaries
0
0

NET CASH FLOW LINKED TO INVESTMENTS
-8,807
-9,963

Capital increase linked to parent company
0
727

Capital increase reserved for employees
0
49

Acquisitions and disposals of own shares
-7
-8

New borrowings and other financial debt
332
889

Change in current accounts
51
-54

NET CASH FLOW LINKED TO FINANCING
376
1,603

Change in cash
-11,899
-12,165

Opening cash (1)
27,607
39,772

Closing cash (1)
15,708
27,607

(a) o/w change in research tax credit:
1,312
-1,347