ADL Bionatur Solutions (MC:ADLB) (ADL-BS) reported robust Q119 growth, with revenue of €9.97m (up 134% year-on-year), driven largely by increased capacity utilisation at its contract manufacturing (CMO) business. CMO revenues were €8.02m (up 180% vs Q118), whereas the active pharmaceutical ingredient (API) segment was down 14% yearly to €0.90m, due in part to seasonality for β-lactam antibiotics. Other revenue, which includes proprietary products and other contracted services and income, was up 205% to €1.05m. The strong CMO growth drove a swing to positive €0.11m EBITDA, marking the second consecutive quarter of positive EBITDA. ADL-BS continues to expect positive overall EBITDA for 2019.
ADL-BS also provided 2019 revenue guidance of between €50m and €55m, which, while below our current 2019 estimate (€64.8m), still represents a more than doubling of 2018 sales. As in Q119, the bulk of ADL-BS revenue growth for the year is expected to be driven by increased utilisation at the firm’s CMO business. The company expects contractually committed capacity at its eight 225m3 fermenters to rise from c 85% currently to 100% by YE19. The bulk of the firm’s committed CMO contracts, such as its six-year €146m flucosil-lactose deal and the multi-year arrangement with Amyris, are long-term, multi-year (or renewable) commitments, which should enhance long-term revenue visibility and form a base for potential future expansion in CMO capacity. The company also aims to target higher-margin, more differentiated or complex fermentation products within its CMO operations, as well as further develop its line of proprietary and potentially innovative products.
Business description
Based in Spain, ADL Bionatur Solutions provides contract manufacturing (CMO) of fermentation-based products and services focused on the health, beauty and wellness sectors. It has established CMO/API business lines and its own proprietary development line of novel or innovative products.