BRAIN Biotech AG, a leading provider of integrated solutions for the biologization of industry, today published its half year results, 6M 2022/2023. The company stays on track to deliver on its full year financial targets and has accelerated its One-BioProducts strategy by acquiring full ownership of its core production asset Biocatalysts Ltd, Wales.
BRAIN Biotech AG has recently bought the two remaining minority stakes in Biocatalysts Ltd. Biocatalysts is now fully owned by BRAIN Biotech AG and will form the nucleus of BRAIN Biotech Group’s ambitious growth strategy to create a global multi-niche enzyme champion. In the coming months, BRAIN Biotech's subsidiaries Breatec B.V., Biosun Biochemicals Inc. and WeissBioTech GmbH will be transferred to Biocatalysts in order to complete the organizational setup of the BioProducts segment.
In the first six months of the 2022/23 financial year, the BRAIN Biotech Group generated revenue of € 27.2 million compared to € 23.3 million in the same period of the previous year, which represents growth of 16.8 %. On an organic basis (excluding Breatec B.V. for the first four months and L.A. Schmitt GmbH for the previous year), revenue rose by 8.2 %. Revenue in the second quarter of 2022/23 amounted to € 13.5 million. This corresponds to an increase of 3.0 % compared to the second quarter of the previous year. Other income decreased by € 0.1 million to € 0.4 million. Total operating performance (revenue, research and development grant revenue, changes in inventories, and other income) in the first six months of the financial year rose strongly by € 3.9 million (16.0 %) year-on-year, from € 24.2 million to € 28.1 million.
Development of segments
With the publication of the half-year figures BRAIN Biotech AG´s reporting has been changed to three operating business segments plus the management segment BRAIN Biotech Holding.
The BioProducts segment, which comprises the product business with specialty enzymes and other proteins remained unchanged, except for the sale of L.A. Schmitt effective September 30, 2022, and has been renamed from "BioIndustrial". Revenue generated by the BioProducts segment reported growth of 19.0 %, from € 17.5 million to € 20.9 million, in the reporting period. In the second quarter of the financial year, revenue amounted to € 10.2 million. This corresponds to an increase of € 0.1 million or 1.0 %, compared to the same quarter of the previous year. Adjusted EBITDA deteriorated from € 2.6 million to € 2.2 million in the first six months. The weaker operating momentum in the second quarter is mainly due to production interruptions and operational pre-production costs related to the commissioning of the second large-scale fermenter at Biocatalysts Ltd. These investments will accelerate the future growth path of the products segment.
The BioScience segment that includes research-intensive custom solutions based on enzyme technology, strain development, bioprocess development and natural product screening generated revenue of € 6.1 million in the reporting period, corresponding to an increase of € 0.3 million or 6.5 % over the prior-year period. This growth mainly reflected a higher number of contracts signed for Tailor-Made Solutions projects. The adjusted EBITDA deteriorated from € 0.4 million in the same period of the previous year to € -0.0 million. The main drivers for this are increasing investments in personnel and higher other expenses such as increased marketing and sales expenses.
Revenues of the BioIncubator segment, which covers revenues from own R&D projects or those initiated with partners generated revenue of € 0.2 million in the reporting period. R&D grant revenue, generated by research funding from the German Federal Ministry of Education and Research, was slightly higher than the previous year's figure of € 0.1 million at € 0.2 million. The adjusted EBITDA is mainly driven by the ongoing investments into the CRISPR technology platform under the brand name Akribion Genomics and amounts to € -1.5 million in the first six months of the financial year.
The BRAIN Biotech Holding segment mainly includes personnel expenses and other expenses for Group administration, further development of the BRAIN Biotech Group, stock exchange listing and M&A activities. The adjusted EBITDA of the segment amounted to € -1.6 million and is constant at the previous year's level.
Adriaan Moelker, CEO of BRAIN Biotech AG: "We are well on the way to execute on our ambitious fiscal year targets. Having gained full control of Biocatalysts Ltd builds the prerequisite to successfully execute our stated One-BioProducts strategy. We will now bundle our products businesses under one strong management team to drive organic growth and successfully integrate additional bolt-on acquisitions in the coming years.”
Key financials (first six months of the financial year 2022/23)