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Benchmark Holdings PLC
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Good morning. Welcome to Benchmark Holdings plc Q3 Results Meeting. Throughout this recorded presentation, [Operator Instructions]. The company may not be in a position to answer every question received during the meeting itself. The company will review questions submitted today and will publish responses where appropriate to do so.
I'd now like to hand you over to Trond Williksen, CEO; and Septima Maguire, CFO. Good morning.
Good morning. Good morning to all of you, and welcome to this presentation of our third quarter results here in Benchmark. As introduced, I am Trond Williksen, the CEO of the group, and I'm here as normal with Septima Maguire, who is our CFO. And we will provide you with insight into our financial and operational performance in our third quarter in this financial year, and we also cover the outlooks for the group for the remainder of this financial year.
So let me as usual start with some highlights from the quarter. And again, we are happy to announce financials reflecting a strong and continued progress for the group. Third quarter of this year represents the fifth consecutive quarter year-on-year and quarter-on-quarter with growth in adjusted EBITDA. Step by step, we are moving the company in the right direction as we have been aiming for and as we have been executing on.
Also, this time, the numbers speaks for themselves. Revenues year-on-year for third quarter alone has grown by 28%, and year-to-date, we have grown by 32% compared to where we were after the first 3 quarters of financial year '21. The growth in group revenues stems from growth in all 3 business areas. Advanced Nutrition has continued to grow during the quarter. Genetics has had a particularly strong quarter with 50% growth in Q3 of this year compared to last year's third quarter. And finally, we see a large growth in numbers on revenues for Health due to the launch of Ectosan Vet and CleanTreat, which was not operational in the third quarter alone of last year.
As indicated initially, we have not only seen an increase in the top line. We also have been lifting our adjusted EBITDA quarter by 26%. That excludes fair value uplift. This is the result of higher revenues, better asset utilization and cost discipline in the period. Looking at our performance year-to-date, adjusted EBITDA has grown by 99%, in my head, that's a doubling, compared to where we were 1 year ago at the end of the third quarter in '21.
Our group margin year-to-date has also been lifted to 17% compared to 11% year-to-date at the end of third quarter last year, excluding fair value uplift from biological assets.
All in all, a combination of a strong operational performance as we have seen it over the whole period since we completed the restructuring at the end of financial year '20 where we entered into the consistent delivery phase of the group. We are also happy that we, throughout this period, have been able to keep a strong financial position, maintaining good liquidity and a solid cash position.
Q3 has also been a quarter where we actively have been progressing towards a listing in Oslo. The considerations around this have been announced in previous quarters, and we are now aiming for a listing at Euronext Growth in the fourth quarter of this calendar year.
At the time of the Euronext Growth listing, the company intends to execute a limited share issue aimed to satisfy the regulatory requirements for such listing. As we also previously have announced, we see the listing at Euronext Growth as first step towards an uplisting to Oslo Børs, which we aim to do in the first half of calendar year '23. In tandem with this process, the Board intends to consult with shareholders on whether to maintain its admission of the company's shares trading on AIM. Timing of both these things are, of course, subject to market conditions.
Moving over to give a little bit more granularity to the performance over the quarter in the 3 business areas. Starting off with Genetics, and as initially stated, we have seen a particularly strong performance in Genetics in the third quarter. Growth in revenues in the quarter has been 50% compared to third quarter of last year. This is driven by growth across all products and services in this business area.
Salmon egg sales has gone up by 39%. Revenues of our shrimp genetics has grown by 164%, and our tilapia genetics sales are up by 57%. Despite the strong growth experienced in shrimp and tilapia genetics, salmon genetics still remains the financial and operational backbone of this business area, while shrimp and tilapia still are at early stage in the development commercially and remains to become profitable.
We are, however, encouraged by the progress. We have been able to execute especially on the growth of -- in sales of our SPR shrimp genetics. It has been to our satisfaction and above the targets that we have set for ourselves given that we are in a year where we actually started to launch the products in the market.
The strong growth in sales of salmon genetics or salmon eggs in the quarter is due to positive market conditions for us especially in Norway, but it's also down to good commercial efforts where we have been able to secure new customer relationships. This year, we have also been importing more eggs than we've ever done to Norway from our Icelandic facility. This has been made possible through the timely investment, I would say. We have now completed a new incubation center on Iceland, an investment that has lifted both our capacity in terms of volume but also generated a considerable lift in the technical quality of the eggs that we are supplying.
Both has been well received by our customers. And I had the joy earlier this week to be on the formal opening of that facility, and we had 90-plus customers there. And it's a facility that we follow, and it's a good investment for us that we already see good results of.
Moving over to Advanced Nutrition. It is a business area that has been performing as we expected in the quarter, continue to grow top line. As we announced coming into this quarter, Q3 has been a quarter where timing of deliveries of orders have clear role both at the beginning of the quarter and at the end of the period. This is also reflected in the financial figures.
All in all, the performance of Advanced Nutrition has been impressive so far this year with growth in all product groups and a strong financial performance. We see the commercial momentum that the Advanced Nutrition organization has been able to build. That momentum, we see that continuing also in the time to come, helped by market conditions that still looks favorable ahead. And we are also being able to stay resilient to cost effects of inflation by better productivity and asset utilization in the period.
Finally, on the business area performance to the health business area. Third quarter has been a quarter where we saw a decline in demand for Ectosan Vet and CleanTreat after the spring delousing season and towards the summer months. This is always difficult to predict. Given the limited experience, we still have the solution in the different seasons we launched last August. But having said that, it's probably what we should have expected based on the farmers' activities on delousing in this specific period when they are finished with the spring delousing.
We also still have work to do in order to get the solution embedded and more available to the farmers to ensure an uptick of the solution that is optimal in the period -- in the different periods throughout the year. This is also why we have taken steps to strengthen the commercial organization, working in the market with the solution.
Where we are right now, the farmers have entered into the main -- what I call, the main sea lice season, and that will last throughout the fall. As of now, we are talking August, we still -- this is reflected in significant interest and use of the solution, which we expect to impact our performance positively from now on. Both vessels are in operations with treatments.
Third quarter has been -- has also been a quarter where we have been advancing the new configuration of the CleanTreat to make it more integrated into the farmers' established infrastructure, thus improving the availability, reducing farm complexity and reducing cost in the use of solution. The interest for structure configuration of the solution is considerable, and we are currently in commercial discussions aimed to install the system on large wellboats being brought to the market in the years to come.
We have also continued to work on the undertaking to expand marketing authorizations. We have previously announced that we were granted an extension to the label with one reuse of the treatment water in Norway. And in the period, we've also been granted a marketing authorization in Faroe Islands, which could be the next country in line when we are using the solution.
A few more words on the new configuration of the CleanTreat solution. This opportunity is created by the fact that a new generation of large wellboats now are about to emerge into the market. Unlike how it was initially and how it has been up until now, the size of these new wellboats makes it possible for us to install the CleanTreat system directly onboard the wellboat. Thus, we can avoid to use an extra and a costly vessel, a PSV platform as a platform for the CleanTreat system. This increases both the availability and decreases cost of the system.
Such a solution also causes an opportunity for us to make the solution less capital-intensive for Benchmark as it supports a sale and licensing model, reducing CapEx and improving revenue visibility. We foresee that we will keep both configuration in a transiting period, mitigating to the integrated model as we are moving forward. And the progress of this will be a priority. And as mentioned earlier, we are in ongoing commercial discussions on the new integrated solution.
So to sum up the direction of travel on the solution, we started out with launching in August last year with marketing authorization that was not optimal, allowing one reuse and maybe an operational setup, which was the only option at that time. Since then, we have been and still continue to work on the marketing authorization to make them more optimal, allowing better efficiency in the use of the solution.
At the same time, we are working on transiting the solution to become more user-friendly, less costly and less capital-intensive, eventually taking us to the adoption and use of the solution that we are targeting.
This path of development is possible as the fundamentals of the solution has stayed the same and has been confirmed throughout the first year of operation. We had a transformation solution to sea lice treatments, which is very efficacious, takes care of fish welfare and is environmentally friendly.
So with those words on highlights and comments on the business areas, I will leave it up to Septima to take us through the financials in more detail. So Septima, the floor is yours.
Thank you, Trond. So all business areas continue to make progress, and the momentum we've seen in the first half of the year has continued in the third quarter, with revenue growth of 28% in the quarter and stable gross margins, driving adjusted EBITDA growth of 48% to GBP 6.6 million.
The adjusted operating profit has been impacted by the commencement of the depreciation of the tangible and intangible assets associated with the CleanTreat, Ectosan operations and development costs. And our loss before taxes was also impacted by movement in exchange rates mainly related to the U.S. dollar-based loans and noncash fair value movement of derivatives during the period when compared to the previous year.
From a quality of earnings perspective, adjusted EBITDA excluding the noncash fair value uplift increased by 26% to GBP 5.1 million. Net debt, excluding these assets of GBP 59.3 million, was impacted by the payment on our take-or-pay Artemia contract during the quarter as is normal, but our cash position of GBP 38.2 million leaves us well supported as we turn the corner towards cash generation.
Moving to look at Genetics. Quarter 3 was a strong quarter with revenue growth in all product areas. The core business of salmon genetics performed well, with salmon egg sales growing by 31% in volume and 37% in value. This was aided by increased revenue from harvested fish, which in financial year '21 was included in quarter 4 as opposed to quarter 3 this year.
As Trond noted, our ability to service this additional demand in the salmon egg market and the associated sales growth in salmon eggs was directly as a result of our new incubation house in Iceland, which has increased our production capacity and also improved the quality of the eggs produced.
The sales growth drove adjusted EBITDA excluding fair value on biological assets by 81%. CapEx for the quarter was GBP 1.3 million, which was the final spend of incubation house, and then the commencement of work on a freshwater pipeline in Norway to ensure surety of supply of fresh water throughout the year particularly during the winter months. And work on this will continue during financial year '23.
Moving on to the next slide. As we noted, core salmon was strong during the period and delivered GBP 6.5 million of adjusted EBITDA. Of this, GBP 0.7 million was invested between tilapia, shrimp and salmon in Chile as we continue to ramp up and commercialize these growth areas, leaving GBP 4.8 million of adjusted EBITDA for the quarter.
With respect to the SPR shrimp, as you can see, we ceased capitalizing costs in the first half of the year as we've moved from development phase fully into commercialization. And as noted, the growth CapEx invested this year was mainly the incubation center in Iceland. With good progress in this quarter and good visibilities on egg deliveries for the last quarter, we expect to deliver solid results for the full year within Genetics.
Moving on to Advanced Nutrition. Advanced Nutrition continues to progress well. In quarter 3, they benefited from FX tailwinds at a revenue level, and this supported overall year-to-date revenue growth of 15%. The timing of orders in the quarter have seen sales slightly behind versus the same quarter of last year. But with visibility on new orders, this is reflective of timing rather than a shift in demand. Cost control in this area continues to be strong whilst continuing to invest in our commercial activities to drive sales.
With revenue growth in each of the product areas, Artemia, Diets and Health overall in the year, we expect this to continue as we finish out the financial year and we continue this trend of strong trading.
Moving on to Health. Health continues to ramp up the Ectosan and CleanTreat product, delivering revenue of GBP 3.8 million, of which GBP 0.2 million relates to recharge for vessel and fuel. The revenue was impacted by low CleanTreat, Ectosan utilization during the quarter. The sale of Salmosan provided good contribution to gross margin in this business area.
Our growth in gross profit was not sufficient to offset increased OpEx from the CleanTreat, Ectosan operational teams, which wasn't in place in the same quarter last year, and resulted in an adjusted EBITDA loss of GBP 0.6 million versus a loss of GBP 1.2 million in the same quarter last year.
As Trond noted, moving to the new configuration will allow us to create a business model which is less capital-intensive. Whilst this will take our profit expectations down in Health for next year to limited growth expected in adjusted EBITDA in financial year '23 due to the lead time in moving capacity across, it will fundamentally reduce the financial risk around low utilization in the current PSV model whilst strengthening our position in the medium term by allowing us to better serve the customers.
Overall, the growth, even with reduced profit expectations in Health for next year, we expect to still deliver good growth in line with previous medium-term guidance.
Moving on to the next slide. From a cash flow perspective, with strong trading results from the group as a whole, we generated cash from operations of GBP 26 million, but a significant amount of this, GBP 22.1 million in the year, was utilized in building up working capital. The increased working capital is driven by all areas, either through increased biological assets as we ramp up capacity, amounts paid on the take-or-pay contract within Nutrition or increased receivables due to higher sales in all of our business areas. Working capital investment continues to be an area of significant further focus and from myself.
Interest and taxes increased mainly due to taxes on increased profits in our taxpaying countries in both Nutrition and Genetics. Capital expenditure of GBP 8.9 million reflects the lower growth CapEx versus last year. With cash as at the 23rd of August of GBP 37.7 million and available liquidity of GBP 50.3 million, we're well positioned to move forward.
Next slide, please. As Trond noted and I would like to reiterate, we've previously highlighted investigation in listing in Oslo. We consider that an Oslo listing would allow us access to the leading seafood and agriculture exchange, and we have been moving forward on this.
The first step of this would be a listing on Euronext Growth in the latter part of this year. The quantum of the proposed equity raise would be limited to the extent required to cover regulatory requirements for the Oslo Euronext Exchange. We would then intend to step up to Oslo Børs in the first half of the next calendar year and, in tandem, consult with their shareholders for whether to maintain the AIM listing. As you would expect, all of these are dependent on market conditions.
And on that note, I'm going to hand you back to Trond.
Thank you, Septima. And moving on to the outlooks from where we are today. After a strong performance in the first 3 quarters of this financial year, we are trading in line with the market expectations for the year in totality. We expect a strong end-of-year performance in Genetics and Advanced Nutrition, completing a very good year for both those well-developed business areas.
Focusing on the period to come is, of course, to continue to roll out Ectosan Vet and CleanTreat in the market. We remain in a very important period. The key is getting the solution more embedded in the sea lice treatment strategy of the customers. A key focus for us will, of course, be to continue our efforts to transit the current PSV-based solution to a more embedded solution, as I commented in my introduction, that is less costly, more adaptable for the farmers and less capital-intensive for us. We assume this transit period will take us next year.
We are also assuming that we, in this period, will transfer some of the existing capacity from the current configuration being on the PSV to use on the new embedded solution. And this will impact the performance in the year to come, but we expect -- where we expect limited growth compared to this year. But definitely, it will benefit the periods thereafter.
On a final note, just let me end our presentation reminding everybody why Benchmark is a unique company, a unique value proposition and a unique investment opportunity. First of all, we are lucky to be in a very good industry, the aquaculture industry, an industry that is still young, will play a crucial role in global food supply in the future. Consequently, we'll have strong growth driven by global megatrends, demographics, sustainability and health.
So the industry itself will provide strong structural growth for those who are well positioned. And this is exactly what Benchmark is. In this industry, we provide specialized high-margin, mission-critical solutions to enhance farming efficiency, animal growth and fish health and fish welfare, the crucial factors within any biological production. And in this industry, we hold market-leading positions in what we do.
In sum, what we represent is truly a unique biotech platform, in my mind, the most unique one in this industry. But bear in mind, we are also a well-invested one, which differentiates us from early-stage biotechs. We have 2 well-established business areas, Genetics and Nutrition. And you can see their performance and how we have been developing those over the last years.
And the third one that is underway to become the same. Good news is also that the company is at a point where we have well-established strategies and a financial framework for growth and returns. We are long past the initial development stage, and we have executed on a new restructuring, establishing a firm commercial foundation and financial discipline. And we are now, as we have demonstrated in this quarter, also in a stage of consistent delivery that eventually will deliver cash returns, generate cash and returns.
And finally, we are more than just an ordinary company. We are purpose-driven with a high-quality organization with strong ESG credentials. And sustainability is at the core of everything we do. It has always been and it will always be like that.
And with these words, I just end the presentation, and we are open to Q&A. And this time, you have been asked to provide questions written. So I assume...
[Operator Instructions] Just while the team take a few moments to review those questions submitted today, I'd like to remind you, the recording of the presentation, along with a copy of the slides and the published Q&A, can be accessed via Investor Meet Company dashboard. Ivonne, if I may hand over to you to host the Q&A session, if I could please ask you just to read out the question where appropriate to do so and directed to the team, that would be fantastic. Thank you very much.
Thank you. First question is around inflation. Can you discuss the areas where the business is seeing the greatest input cost inflation? And how are you trying to mitigate against this?
Well, we are, of course, not immune to the inflation that everybody sees these days. It's obvious that we are also affected by it. I would say less so in Health, less so in Genetics. And the reason why we are less so in Genetics is that we are positioned -- where we are positioned with our main activities, which is in Northern Norway and also on Iceland, where we have very favorable energy prices.
The area that is most affected by inflation is our Advanced Nutrition business. We have been able to withstand the effects of it in a way that has actually surprised me a little bit, to be honest. We have done that by driving efficiency in production. So we have actually taken down production costs per unit in the period even if the prices, all the things that goes into the production has risen. And we continue the program in order to become more efficient as a mitigation, as the main mitigation towards the inflation development.
So we also say that our biggest facility in Advanced Nutrition is in Thailand. And we are installing -- as part of our ESG program also, we are installing solar panels there in order to take down energy cost, which is, of course, a significant cost. Cost of that, well, the ingredients into our diets, of course, they are rising as everybody see. But so far, we have been able to mitigate that by becoming more efficient in what we're doing, and that is a main strategy also going forward.
Okay. Second question is on Ectosan Vet and CleanTreat. Can you talk a little bit about why utilization is low? Is it fair to say that commercial uptake is below your expectations? And what gives you confidence that the new model will put it right?
Well, I think just bear in mind that we launched the solution in August last year, and we launched it in an environment where we have a lot of other solutions also. And so it takes some time to get reduction by the customers because they are already well invested in already established infrastructure. And that's part of the picture.
Yes, the utilization after the spring delicing. I think we have quite good utilization during the spring delicing, and then we had lower utilization into the summer. And that shouldn't really surprise us too much since when we are finished with the spring delicing, the farmers are waiting and hoping for sea lice not to start this year.
So basically, there is less activity in that period. There's less activity in that period, and that impacts us in Q3. And as I said initially, also when we now are moving -- and we're now talking August. Coming into August, we saw a quite rapid development in interest and also in use of the solutions. So where we are right now, then the use of the solution is picking up. So it has to do with fluctuations in the pattern of when the farmers are delicing. They are not delicing if they don't need to delice. That's the way it is.
Well, it is the fact that the configuration of the solution that we had initially was the configuration that we had to have because there were no big wellboats to place the CleanTreat system on. So we had to configure it with the wellboat where we do the treatment and a CleanTreat platform, and we had a PSV as a platform.
If you look at that entourage, it's a costly entourage or infrastructure. And that is, of course, the farmers are counting their NOKs or their dollars there also. So they are looking at the cost of the solution in total. And so that has been, I think, something that has hindered everybody to jump on the solution as quickly as we could have expected.
Now we are moving into another situation where we are seeing now that a new generation of wellboats are coming that are much bigger. We see an opportunity to put the CleanTreat system on the wellboat, and we have done the groundwork in order to see that, that is feasible. And that takes away part of the infrastructure that we had initially, and it integrates into the infrastructure that the farmers has, makes it more adaptable because it's really -- then you have a solution where wherever you go with the wellboat, you really have the solution with you and it makes it more adaptable for our customers.
And that's why we do this transition to this model going forward. But it also, of course, poses an opportunity for us to reduce costs and CapEx as it opens up for licensing more than we have had before where we can sell the system to the farmer and licensing with the right to use. And that makes the business more advantageous for us, lean for us in terms of capital requirements also.
So that's why we are moving in that direction. And that's why we are signaling very clearly now that we are transiting towards that solution going forward. And that will take us some time that we see the benefit of that, and we take the time necessary in order to get into a better configuration for us and for our farmers in the future.
Thank you, Trond. We have a couple of questions on the limited equity raise. The first one is, can you provide an idea of quantum? And the second one is, you comment on any share issue being limited and only sufficient to satisfy regulatory requirements. That suggests it cannot be used to refinance a NOK bond. Is that correct? And what is your current plan?
The -- Septima, you can probably answer that one.
Of course. In terms of the quantum, we would expect to -- the quantum of the issuance to be within our authorities and in the context of regulatory requirements or regulatory requirements around a free float and then also a number of shareholders on the Oslo Euronext Exchange.
So very well intuited. The intent is not to use this equity raise as a refinancing of the NOK bond. It is, just given the current market conditions, intended to allow us to move on to the exchange and then start working, as Trond would say, stepwise towards the Oslo Børs listing.
Thank you, Septima. Another question for you. With regards to the migration of the Ectosan Vet solution, you mentioned a limited EBITDA growth next year. But how about the EBIT growth as the current solution has significant D&A related to it?
So in terms of part of the transit will be taking one of the PSVs off the water, and a significant amount of the depreciation associated with the solution is depreciation on the right-of-use asset, which is the vessel. So if we remove the vessel, we remove the depreciation. So it's all part and parcel of creating a better, easier and cleaner defined operation model.
So it will -- ultimately, the reduction in EBITDA will drop down but will be mitigated in part by an easing of the depreciation of the right-of-use asset. But we see this change in business model in the medium to long term is the most effective use of our capital and will ultimately provide a better return on capital employed for us as a business as we move into the future, which is then one of our stated medium-term objectives.
Thank you, Septima. The next question is on SPR shrimp. SPR shrimp is performing ahead of plan. What are the drivers behind this? And does it change your longer-term view of its potential?
It doesn't change our longer-term view of its potential. We have always believed in this. We think it's the next step and the next phase in our development of genetics. After salmon, shrimp will come up as the next one. So we are firmly believing it all the way.
The drivers behind it, I think the driver is that we -- I think we have a product that has a place in the market that has been verified. We see different version of the product in different markets. The shrimp market is very different from the salmon market, I must say, since you have large variations between different countries and regions. So we see different adoptions in different markets. In some markets, we are really being adopted very well. And that is because the product is performing on growth and disease resistance in those markets.
The good thing about genetics is that it's an incremental exercise. You get better every cycle. And the good thing in shrimp is that the cycle is shorter than in salmon. So we are [ shooting ] ourselves also in improving the performance of genetics going forward. So that will be a key going forward.
Also, we'll need to make sure that we are taking the most out of those markets where we are well adopted now, but also tailor around the genetics to make sure that we are also more competitive in the regions where we are not so competitive right now due to different farming circumstances.
And we have an organization that works very determined on this and are very focused on it. And we have it at one of our strategic priorities to drive development. So we foresee that we will be able to expand our activity there. We have always realistic expectations of how fast things are going to go, and we will keep those realistic expectations. But I can assure you all that we will keep on pushing in order to get this to become a viable business area as soon as possible.
Thank you, Trond. Carrying on with genetics, our next question is around Chile. Investment in Chile genetics appears to have stepped up in Q3. Can you provide an update on the progress in this market?
Well, also, this is one of the new guys on the block or new girls in the block in terms of new vectors that will provide us substantial business in the years to come. We started out with also the commercial launch last -- late last financial year, and we've been operating now for 1 year.
We're trying to do it very, very -- in a very, very responsible way. Everybody could give away things in order to get things out in the market. We try not to be a nonprofessional player in that market, and we would like to have value for our investment and the product that we have that we know is very good.
We see now that we have had increased sales during this year. And as we are speaking, we see that we have -- we are looking forward to increase sales also throughout next years. And we will continue to work in order to -- systematically in order to take our fair share in this market, but we will do it in a responsible way. We'll do it in responsible way.
And to complete on genetics on tilapia, when do we expect to breakeven in tilapia genetics?
Tilapia is the smallest guy on the block in genetics. It's a different market. It's less developed than what we see for salmon but also in shrimp. So I expect it to take a little bit more time.
What we have done there is to make sure that we've done the groundwork fine. We have our nucleus that we know is very, very high quality. It's been developed over decades, and we know it's very, very high quality. We've done the groundwork in terms of having facilities so we can expand production of breeders but also sex-reversed fingerlings that we are selling to the market to take it towards breakeven.
And then so that's our first -- first phase is to take it to breakeven as soon as possible. And then we can expand on there by, I would say, small capital investments in order to expand the capacities to take more volume, which is the key in order to really make it profitable over time.
I think it will take us 2, 3 years in order to get there. But the groundwork is done, and we continue to have very, very focus on doing the right steps in the right order in order to get where we want. We are not allowing too much deviation from our plan here. We are really driving towards getting breakeven first and then into profitability.
Thank you, Trond. A couple of questions for Septima now. The first one, given the ForEx headwind in Q3, could you give some color on anticipated finance costs for the full year and cash conversion?
So in terms of the finance costs, the interest cost, the cash interest cost associated with our debt is unchanged. So it's -- on a quarter-to-quarter basis, it's normal.
Yes, as is noted, the FX rate, primarily the dollar to pound rate. So if we see continued weakness within that, FX will continue to work against us. You have to remember that majority of this is either internal -- intercompany loans or it's -- we have a small -- we have a component of our NOK bond, which is hedged to dollars rather than pound, and we still have exposure there.
So fundamentally, it all depends on the strength of the dollar versus the pound and whether it works against us. So I'm not going to guess at the exchange rates over the next sort of 6 weeks. But we can see that potentially, it will depend on what the Fed do fundamentally. So I think that's as good an answer as we can get there.
One more question on guidance, Septima. What should we expect on working capital over the next quarters? And what is the guided CapEx for the full year?
Well, the guided CapEx for the full year will be sort of not dissimilar to what we currently see in the figures that we have at the moment. We've got a CapEx of GBP 8.9 million. So we'll have a little bit of maintenance CapEx. But as I've noted, we've finished the incubation center. So I'd say sort of between GBP 10 million and GBP 11 million marks from a full year point of view.
In terms of working capital, the working capital investment is not -- is an area of extreme focus because we have commitments in terms of guidance around cash conversion that we are working towards. So in terms of the next quarter, we generally see a slight unwind in the next quarter because we don't have any take-or-pay payments within quarter 4 of the financial year. So I would expect to see a slight unwind with nothing significant enough to make me happy.
Okay. And wrapping up on guidance, does the medium-term financial guidance that you issued 3 months ago still hold given the recent macroeconomic changes, inflation, economic uncertainty, et cetera?
There's absolutely medium-term guidance that holds. If it didn't, we would have said so. And we're confident that with the change of business model in Health, that would go a long way in supporting our medium-term guidance along with the strength that we see within our Genetics and our Nutrition business areas.
Thank you, Septima. And we just have a couple more questions to finish off on Ectosan Vet and CleanTreat. How long will it take to construct and fit a CleanTreat system on a new wellboat more specifically? And the second question is, can you say something about the demand so far in CleanTreat, Ectosan for Q4? And should we expect the results more in line with what we saw in the first quarter?
To start with the first one, how many -- how long will it take to fit? It is within weeks and a couple of months in order to fit it. We are still -- it will probably take longer for the first one than the next one since we have done, of course, basic engineering on it. But the first fitting will take a little bit longer than -- to learn how to do it more properly than the next ones.
But we are not talking about a very, very long time like in the fitting in itself. But it's the process in order to -- these wellboats are not ready, all of them yet. They are coming in next year. So that will be more determined on the time line than anything else in terms of when the systems can be on the wellboat.
In terms of the uptake, I would say, from August on, we have seen increased uptake, and that has increased throughout August, and we expect that to continue in the fall. That's the picture we are seeing now. That will impact our performance, of course, in the last part of Q4. July was still a summer month where the farmers were waiting, at least in the beginning of the month, waiting if the sea lice occur this year. It did also this year. But from mid-August to now August, it looks good when it comes to the utilization or it looks better when it comes to utilization.
Thank you, Trond. We have no further questions.
That's fantastic. Thank you very much indeed, Ivonne, for hosting those questions. And of course, if any further questions do come through, company will be able to review those and will publish responses where appropriate to do so on the Investor Meet Company platform.
Trond, before redirecting attendees to provide you with their feedback, can I just ask just for a few closing comments, please?
Yes, you can. As you have all heard, we are happy to also this time announce a quarter where we have been advancing in the group, and we have delivered what I would say not only strong growth on the top line but also strong growth in the earnings from the operations. And this is a continuation of our journey. This is the fifth consecutive quarter year-on-year and quarter-on-quarter where we have delivered an uptick in adjusted EBITDA. This is what we define as being the consistent delivery phase of Benchmark, and we expect that to continue going forward.
I hope we come over very clearly that we are on the issues that should bring us forward. One of them is, of course, Health, which is a key focus for us going forward. We strongly believe in the shift of the business model. It will make it a more adaptable business model for the customer and a more lean model and a less capital-intensive model for us going forward. It will take us some time to transit into that situation. So the growth on that business area will probably be less than somebody could hope for in the next year. But in the long term, we are sure that this is the right solution over a period.
So with those comments, I just thank you, everybody, for attending. And we are looking forward to see you next time.
Fantastic. Thank you. Trond, Septima, thank you indeed for updating attendees today. May I please ask attendees not to close the session as we automatically redirect you to provide your feedback and the team can better understand your views and expectations. It's going to take a few moments to complete and is greatly valued by the company.
On behalf of the management team of Benchmark Holdings plc, I'd like to thank you for attending today's presentation. That concludes today's session. Thank you, and good morning to you.