Welcome to today's event where we have the pleasure to present BioMar. As you can see here on the front page, we are going through the Q3 2026 results, and the upgraded guidance also will be in focus in this event. A helicopter view on how the business is going. It was a beat and raise quarter, so it cannot be that bad. Joining us is CEO Carlos Diaz from BioMar, who will take us through the results in, not fast, but in a short presentation, and then we will do a Q&A to get through the details of the quarter. As always, there is a box down below where you can ask your questions.
Do feel free to do it in Danish or in English, but if in Danish, I will try and translate to the best of my abilities. For now, I will hand the stage over to you, Carlos.
Thanks a lot, Michael. As you said, I will present the Q3 2026 results and try to guide you through the main highlights. I always like to start with this slide, describing what is BioMar. First of all, we work in a very attractive industry, the aquaculture industry, which is an industry of 22 million tons and growing 4% per year, 25 billion euros gross, 5% per year. As you can see also, we are a central part in the aquaculture value chain. We believe a very important part, but also the most attractive part due to our resilient business model. We address this market with a strong business model. We are global number three, a high-value aquafeed player. We have a comprehensive group of feed solutions covering the full spectrum of nutritional needs for the different fish or shrimp.
We have a very well-invested R&D, and we play a lot of focus into this, and also sustainability, driving innovation, formulation, and performance, integrated business model with resilient cost pass-through of inflation in cost, raw materials, and OpEx. Very good volume visibility because of our importance in the value chain. We have long-term contracts which allow us to have a very nice visibility, and if we work diligently in our supply chain, a very nice return on invested capital and cash flow generation. Some key highlights for the quarter. Record high business activity with exceptional earnings and return on invested capital. The feed business continued to deliver strong growth momentum with significantly higher margins.
We have strong salmon and Selected Species earnings, two of our segments, more than offset the earnings pressure in shrimp this quarter because of increasing material costs, low farm gate prices, toll milling, which is affecting our cost, and a challenging energy situation, particularly in this quarter in Ecuador. Currently, shortages related to weather conditions in Ecuador are impacting volume growth, especially to the farmers. We are covered by energy, but farmers, of course, they need energy in order especially to generate oxygen for continuous growth. This is in this quarter because of the lack of rain in one place in Ecuador where the hydropower stations are, but we see it as a problem in Q4, maybe a little bit of Q1, and the underlying growth fundamentals remain solid in Ecuador. That market will grow more than 10% for sure this year and will continue growing in the future.
Very important, sourcing flexibility, R&D, and formulation expertise enable us to increase our alternative use of raw materials, mitigating the exceptional high cost increase of marine ingredients due to El Niño, maintaining the feed performance and the health of fish and shrimp. If we see our main figures, volume, we managed to increase our volumes by 5% in the quarter and also year to date, especially due to Ecuador. Revenue is also increased by 19% in the quarter and 7% in the year. This is not only the volume growth, but this is the increase in raw material prices. As I said before, we are able to transfer the inflation in raw material prices to the feed on quarterly basis. So, of course, whenever the input cost increase for us, we can transfer it to our contracts, and that's why the revenue is increasing so much.
EBIT, the increase of 50% compared to last year from DKK 411 million - DKK 618 million for the quarter and 24% on a year to date. As I said, because of volumes first, but also our ability to use our innovative feed solutions, replacing some of these very expensive raw materials, creating value for customers, but also keeping some value in BioMar. Return on invested capital with these higher earnings and working very diligently in stocks, supplier days, and receivable days, we managed to increase our return on invested capital to a record high 27.1%. We are proving once again our resilience in the business model during El Niño. El Niño is not the first time that the industry is hit by El Niño. There have been many. The last one was in 2023, 2024, as you can see there.
In both times, in 2023, 2024, and now, prices of fish meal and fish oil have gone to the sky. If you see the skyrocketing prices, we have managed to replace them and complement them, and at the same time, maintain the performance and health of the fish and shrimp. If you see the composition of the feed for salmon and other species have changed a lot. Before, it was relying actually on fishmeal and fish oil, like you see in the graph. Now, more and more alternative raw materials, both land animal proteins, novel ingredients, algae oils, single-cell proteins, et cetera, are part of the diet, which is, of course, extremely good when you want to reduce the dependency on one specific raw material.
This is only possible due to innovation, due to research and development, and seeking for new alternatives, not when there is no alternative, but before. You need to be proactive and do the research, prepare for situations like this. Of course, we don't compromise on nutrition. We try to reduce dependency. This is extremely important. Oils and proteins are very important for health, welfare, performance, and robustness of the fish and the shrimp. Nutrition and performance come first for us and also for our customers. Reducing the dependency on these traditional raw materials is the aim, to have a basket which is as broad as possible, with algae oil, single-cell proteins, circular byproducts, like, for example, chicken meal. I know there have been some discussion in the media about it. This is a very nice circular raw material, a byproduct which can be used.
Microbial raw materials, plant, et cetera. R&D, formulation expertise, sustainability focus, and sourcing flexibility, this is what creates a difference and what allows us to pass through these challenging times in terms of weather and El Niño events. Just as an example, we have been working for more than a decade, actually, in the use of, in this case, microalgae, which is capable of producing, through fermentation, an omega-3 rich ingredient, replacing the fish oil. As you know, omega-3, EPA, and DHA is very important for all aquaculture species, but especially for salmon. Being able to replace it with this raw material is extremely important. The usual way of producing fish oil is the one in the top, zooplankton, wild fish, fishery, fish oil, and aquafeed. We did it in an alternative way with fermentation, producing an omega-3 ingredient directly to the feed.
This we did in 2013, actually. The first feeds were produced in 2016. In 2021, we have produced and sold around one million tons, and right now, about five million tons. Working diligently in research and development before is what creates a difference when you have a scarce situation like today. Guidance. We will review our guidance. We'll review our guidance, and we will soften a bit the volumes. Even if we have increased the volumes for the year, we see a little bit of softening in Q4, especially in some markets like Ecuador, because of some energy constraints that, specifically for Q3 and Q4. We also see some effects of El Niño maybe in Chile, where some algae blooms could affect the consumption of feed. We see some early harvest in some other salmon markets.
That is why we are softening a bit the volume for the quarter, but definitely, we will increase it compared to the year before. Revenue, even with the softening of this volume guidance, is increasing. We increase it from DKK 17 billion-DKK 18 billion to DKK 17.8 billion-DKK 18.6 billion, not only because of the volume, but also because of the increase in raw material prices and therefore feed prices. EBIT, we also are going to increase our guidance from DKK 1.2 billion-DKK 1.3 billion to DKK 1.29 billion-DKK 1.360 billion, reflecting our good momentum, our year to date until Q3. Even with the softening in Q4, we will end the year much better than what we sought when we began. CapEx, we maintain exactly the same level as we said before.
All these numbers will allow us to maintain our target capital structure with a good leverage, interest-bearing debt over EBITDA, and maintain all the other medium-term guidance. With this set, I open the microphone for questions. Thank you, Michael.
Perfect. Let's jump into it. There's a question here. Can the marine raw materials rise so much that it actually becomes negative for you? Your customers get too pressured or something like that. You have this ability to substitute, but is there a limit where this is no longer good for you that it rises up? I think you showed the El Niño the last time and so on. So the experience here by you, can it rise too much to actually be a negative for you?
Yeah. Of course, it's negative for the industry, of course.
Yeah.
As I showed in the first slide, we are 50% of a farmer's operational cost, both fish and shrimp. So, of course, whatever influence our input cost is not good for the farmers. So our mission is to try to mitigate that effect.
Yeah.
Fish meal and fish oil can be replaced. They are always an important ingredient. So, the answer is yes. Sky is not the limit on what we can increase prices, because we need to take care of our partnerships, actually. This is long-term contracts for five years or seven years, where we are also interested that our farmers stay profitable. Definitely, the sky is not the limit, and if this is prolonged, it will affect. Having said that, all El Niño effects have an ending date, so we really expect that next year things will come back to normal. That doesn't mean that our profitability will stop, but it will be, of course, in a different way and to a more basal level.
Yeah, it would be more volume-driven. A part of it is volume-driven, and then a part of your business model on top of this. This year, I guess it is this substitution who gives you that. There's also exactly a question also, is there anything extraordinary in this quarter besides these heavily increasing prices on the raw materials that is lifting your results? Is Q3, for example, is that a stronger quarter than normal? Is that a seasonally strong one where-
Yeah
Actually, if you put some more prices and volume on top, and a fixed cost business, then maybe this is also showcasing something?
This is exactly the case, Michael. Q3 is by far our highest quarter. Especially in Northern Europe, especially in salmon. Whatever influenced this quarter has a big effect on our numbers. Of course, once you have covered your OpEx and your fixed cost, everything that comes on the top, and we have an important increase in volumes, that goes directly to the bottom line. On top of our ability to replace raw materials, we have had a better customer mix, we have had a better product mix. We also produce different products. All these aspects are influencing a very nice increase on margins and profitability during the highest quarter in the year.
Looking at the competitive situation, there is a question here. Is there any of your other competitors who has this ability? I think you showed on the slide 2013, 2016 fermentation. It takes time to build up these competencies to do this. Is there any other competitor out there that can mimic you, or are you kind of a little bit unique in this situation?
As I showed, the reason to show that example is that it takes time.
Yeah.
It is not that you can decide, "Okay, tomorrow I will start doing this." You need to have all the research and be sure that this will work in fish or shrimp, and that takes time. Competitors that are big enough and that have the focus on innovation and R&D, and are investing in R&D as we can do it, they should be able to do it. There is a different focus. We have some international competitors that are more focused on commodities. I think we are by far the ones investing more in R&D. I would say the small competitors, small local or regional competitors definitely do not have the competencies to do this from one day to another.
When we always hear that, then I hear possibilities. Is there someone getting in trouble? Which is not nice, but that is the name of the game in industry. Is there any potentials there? Did you see last time when this happened that you actually maybe could see some potential in purchasing some of those contracts, some of those producers? Or are you really focused on organically growing your business in the right areas, in the right ones, instead of trying to pick up problematic, maybe when the swings are in the raw material prices?
Yeah. As you saw, Michael, and maybe you read in the report, we are extremely focused on return on invested capital and profitability. We tend not to do crazy things and buy toxic assets. We have a big focus on organic growth, and we have to invest there a lot because our markets are growing. We have an M&A agenda, which is mainly focusing on shrimp in Latin America and Asia. Not in distressed assets, but hopefully assets where we can create value, buy some market share, and then go into these markets. We do not see distressed assets or company interesting enough in our more mature markets, like salmon, for example.
About the energy cost. I think what you talked about was your customer side. Your customers need energy to produce fish. You, of course, also needed that. Is there any effect on your production cost? I guess this is also a little bit of an energy-dense business that you are running. When you talk about energy, it is primarily customers. Are you also needing to look at the way you produce stuff and so on by these rising energy prices?
The reason to mention energy specifically this quarter, of course, we are all affected by energy, but we are quite nicely hedged, and we also can transfer that. It is specifically in Ecuador. Ecuador depends on hydropower. It has been raining in Ecuador, but in the wrong side of the mountains. All the hydropower stations are in the Amazonian side, and there has not been rain there. There has been rain in the Pacific side. So, the lack of energy has not only increased the price of energy, but the lack of energy has been a problem this quarter in Ecuador. It took everyone by surprise, including the government. So yes, specifically shrimp. They need aeration in order to have this very high growth, because Ecuador is the most efficient shrimp producer in the world. So, they could be forced to reduce densities for a while, and therefore volumes.
That is the main effect of energy in this quarter in particular. Going forward, it is input price, where, of course, everyone is affected. In our case, we think we are quite well hedged, not only through the energy supply, but also in terms of possibilities to transfer that cost to customers.
And aeration, just to understand that, is that airing the lake like I do in my aquarium at home? I guess that must be the most energy-
Exactly
that is consumed by-
Exactly. The more you feed an animal like shrimp, the more oxygen you need. Since the ponds carry a lot of biomass, they need to have more oxygen. So, then you have machines creating, moving the water to create oxygen, and also to move the water to recirculate it. That, of course, requires electrical energy. So, when you have a reduced energy, you need to reduce the pressure on the system in order to still have healthy shrimp produced. This is a problem for this quarter in particular. Of course, now the rain starts again, so they will have energy. On top of that, we have generation of energy, so we don't have a problem. But the government is investing in Ecuador in the same and is also promoting investment from private sector in renewable energy, especially solar. That, as you can imagine, is very good in Ecuador.
Yes. And reliable. Perfect. The higher prices on feed, if you look at the salmon prices, I do not think it has followed that up. Can that put down the projection of production of salmon in the coming time? Is the salmon also a part of your expectation for maybe a little bit less volume growth than you had expected for
No
Three months ago?
No, no. It is not because of price. Of course, this is affecting the input cost of salmon.
Yeah.
Companies are quite big now. The industry is consolidated, very efficient, so they can deal with the prices right now and the cost. What is influencing more, actually, the salmon growth is the regulations in the different countries. So, when we say that the volume could be softened, in our case, it has been early harvest in some of our customers. Then some of them have been buffering also in September because the prices were going to increase in October. So that is also part of the picture. Specifically in Chile, the temperature of the sea has increased, and you could have in this period some algae blooms, which will reduce the feeding. So that is the main effect that we see in the salmon. It is not linked to prices. It is mainly regulations, and specifically in this quarter, could be an El Niño effect, not going forward.
Going forward, regulations is by far the main driver for volume growth in salmon.
Even if you have long contracts, you have long experience, some of your guidance is still, it could be some biologics could develop like that under these circumstances, and that would affect our business like this. I know there's a big part of your business that runs like it, but there are still some swing factors there that you need to look into the biologics of the-
Of course. Of course.
Yeah.
This is biology, but let's put it in context. I mean, our volume guidance before we increased our volume guidance, actually, after Q2.
Yes, after Q2, yeah.
Now we are going a little bit back, but let's put it in context. We were planning 1.63 - 1.7. We are going down to 1.6 - 1.65. This is, I don't know, 20,000, 30,000 tons in a volume like this in 13 different countries. It can be different things here and there. It's not a big thing, and it's particularly for Q4. Our business, you should really analyze it on the full year. In the full year, since we have been listed, we have actually increased our guidance two times in terms of EBIT and one times in terms of volume. We have definitely complied with our return on invested capital and our leverage, which is actually what we were expecting to comply with what we promised to the market.
You touched a little bit upon it, because I've seen the discussion in the market is very strong quarter, two quarters. Guidance a little bit to the softer side, volume around the same as last year, EBIT the same, and some is calling conservative because El Niño is not going away. To understand as investors, the important thing for us is that this is, you might say we understand that some of the extreme weather conditions is isolated to 2026 that we would have liked going on. I think it's also important for investors to understand that if this guidance should actually show up like this, it's also not something we should carry into 2027 and saying you will start off on a lower point into 2027.
No.
Are these things you're talking about in Ecuador and the volumes and so on, and maybe you protecting your customer a little bit, that is something that is isolated if it should pay out, it's still a guidance. Is that the correct way to understand it? From 2027, things might normalize, things might not, but then your 5% growth, and then on the top of that, the cost-plus models will take over, and as you promised on the stock market. I know it was a very long question. It's actually, can we isolate this one to Q4?
It is a very good question. Definitely. We still believe in the very strong fundamentals of the industry. Our business model is, to be honest, better than ever. Our investments and our focus on raw materials and availability and ingredients more than raw materials is definitely the way to go. We cannot give a guidance for next year
Oh, no.
Yet, because we have not made the budget. But we have a medium-term guidance, and actually, the first year, we delivered much better than our guidance. You have to remember that when we went into this year, we thought that in salmon, we lost one customer because of consolidation in Norway. We thought that we would not recover it, and we don't want to get crazy recovery because we don't want to dilute the margins to do it. We don't want to do crazy things. But we recovered it. We recovered it specifically in Norway. So basically, we increased our guidance on volumes in Q2, not diluting our margins, and now we are just softening. So it's just a problem or a bump in the road in Q4.
We see our mid-term guidance and the future of volumes and our profitability as we have planned and communicated in the past. We cannot give a guidance for next year. We are in the middle of the budget session, but I can say that we maintain so far our mid-term guidance, and we have delivered a better year in the first year being listed.
Perfect. I think that my long question and your very good answer is the perfect way to end this. I do not have any more questions here from the audience and on my paper. Thank you to you, Carlos Diaz, for taking us through your results and trying to put the pulls and the levers in your quarter together. Thank you, Carlos Diaz, and thank you for the audience listening in.
Thank you very much, Michael.