Aker Biomarine ASA
OSE:AKBM
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
22.1095
59.5148
|
| Price Target |
|
We'll email you a reminder when the closing price reaches NOK.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Earnings Call Analysis
Q4-2023 Analysis
Aker Biomarine ASA
Aker BioMarine has undergone a remarkable transformation in 2023, achieving unprecedented organic growth and embarking on a comprehensive restructuring initiative that took effect in January 2024. The company concluded the year with a total revenue of $335 million, marking a 21% increase compared to the previous year, underpinned by strong performance in key segments.
Despite experiencing a challenging fourth quarter due to extended maintenance of its largest vessels and a slight decrease in year-over-year production to 51,000 tonnes, the company has since improved its harvesting efficiency by 15% in early 2024 aided by advanced drone technology and other operational enhancements. They have now fully embraced the predictive power of artificial intelligence to optimize harvesting locations, leading to more effective utilization of vessels.
The QRILL Aqua segment has seen a 21% growth year-over-year, with aerodynamic price strategy allowing Aker BioMarine to gradually increase prices independent of broader commodity market fluctuations. The Human Health Superba segment exhibited a substantial 36% growth for the full year. Expansion moves include ramping up the algae Omega-3 production capacity in Houston by more than fivefold and taking the initial steps toward internationalizing brand Kori, with a strategic entry into the Japanese market.
Fourth-quarter revenue saw a modest increase to $82.9 million, while overall gross margin decreased to 32% from 40%. Nevertheless, Adjusted EBITDA stood at $17.7 million for the quarter, driven by strong SUPERBA sales and increased Lang Pharma Nutrition sales, though it showed a decline from the 2022 fourth quarter figures. Margins are expected to improve throughout 2024 as the Houston plant ramps up production, which should result in lowered costs of goods and hence improved margins across the board.
The Ingredients segment concluded the quarter with $55 million in revenue, a slight rise from the previous year, largely due to SUPERBA krill oil. Gross margin remained stable at 41%, and the dismantling of a hedge program contributed to an increase in Adjusted EBITDA to $19 million, up from $16 million in the same period last year. Looking ahead, the company expects the cost of fuel to align with 2023 levels due to normalization of regional spreads, which had previously impacted costs by about $10 million. As Aker BioMarine looks toward the future, it does so with no current plans for new growth projects, signifying a period of consolidation and maximizing the potential of existing initiatives.
You don't have any saved screeners yet
Good morning, and welcome to the Fourth Quarter and Full Year 2023 presentation for Aker BioMarine, where myself and CFO, Katrine Klaveness, will take you through the highlights and the financials for the quarter and the full year. 2023 has been an eventful year for Aker BioMarine.
We have delivered record growth never before in the history of Aker BioMarine, have grown organically as much as we did in 2023. We have also successfully implemented a large improvement program across the whole business, yielding significant savings. And we have also completely restructured the company launching now in the beginning of January 2024.
We ended the year at $335 million of revenue, which is 21% higher than the last year, driven by good performance across all our major segments. On the EBITDA side, the Ingredients segment delivered $19 million of EBITDA, up from $16 million at the same quarter last year. The Brands segment delivered 0 EBITDA, down from $2 million of EBITDA in the fourth quarter last year.
And then when you include the eliminations between the segments, the Group EBITDA landed at $18 million for the quarter, down from $21 million in the same quarter last year. We had a disappointing harvesting performance in the fourth quarter of '23. We have our 2 largest vessels, Antarctic Endurance and Antarctic Sea in dry dock for 5-year class, and the scope and complexity of that maintenance work was higher than what we had anticipated. And as a result, we only fished Saga Sea in the fourth quarter. And as a result, we only delivered 51,000 tonnes of product produced during 2023, down from 52,000 the year before.
But once the vessels came out of shipyard into the fishing field, they have been performing really\ well. We have now the drone active and working as we have intended. And so far this year, we have produced 15% more than what we did the same period last year, which already was a quite good beginning of '23.
As mentioned, we have completed the restructuring. We went live in the beginning of January, totally smooth without any challenges. And we have also today announced the initiation of a strategic review for the Feed Ingredient business, which we will talk more about later in the presentation today.
So when we look at the quarter in totality, $83 million in revenue, up from $79 million the same quarter last year. And then EBITDA landed as mentioned at 18% compared to 21%. If you look at the full year on the left side, you can see the revenue development and the significant growth we delivered in 2023 and you can also see EBITDA landing at $70 million for the full year, that is negatively impacted by 2 main factors.
One is that fuel prices in South America has been exceptionally high during 2023, impacting the cost of goods for our aquaculture products and our margins in that business. And secondly, we have had limited production in Houston as we've been building down inventory. And then we have less product to divide the total cost on. And the same thing happens there, cost of goods goes up and margins comes down. These are all temporary situation. But as a result, the EBITDA is lower in '23 than what you should expect given the top line growth that we demonstrated.
Some more details on the harvesting side. So we produced just below 1,000 tonnes in the fourth quarter. And as mentioned, that is due to the dry dock maintenance for Antarctic Sea and Antarctic endurance becoming much more lengthy than what we had anticipated.
So every fifth year, we do what's called 5-year class on the vessel, which means we take them to land and we do more maintenance than normal, and we do all the maintenance that's below the sea surface. It is 5 years until next time, you will bring the vessel to land, so you have to take everything that you find.
And this year, the scope of that maintenance work became higher and more complex than anticipated. And as a result, Endurance entered the fishing field just before New Year and Antarctic Sea actually entered in around 10th of January. And that is the main driver of the shortfall in the fourth quarter.
As mentioned also, the USV or the drone has been implemented. And I think we can say that it's working according to all our hopes and we have already used it several times so far this season to optimize our harvesting. Also, a good start due to that and also some other initiatives that we have implemented at this year's shipyard. We are tracking 15% better year-to-date in '24 compared to the same period last year.
To talk a little bit more about the totality of the 2023 harvesting season. So there was 2 things that impacted negatively the performance over the year. But aside from that, it was actually a quite strong season. So the first negative impact for 2023, it's what we could relate to what we call commissioning of Antarctic providers, so basically our support vessel. Typically, we see that it takes 3 times -- or 3 years from when you take delivery of a new vessel until you have kind of optimized it, discovered all the mistakes from the shipyard and have a vessel that works as intended. And during the spring of 2023, we had one of those type of incidents where we had to do some maintenance ad hoc.
It was basically the engine that had a production error from the supplier and we have to do some changes of some parts mid-season. And as a result, our vessels could not be offloaded during some days in April, May. And as a result, 34 days of harvesting in totality between the 3 vessels were lost.
And then if we look at the total or average production per vessel in that period, that was close to 4,000 tonnes of product missed through that incident. And then we lost 85 days on that shipyard situation I just talked about compared to what we originally had planned, which is another 5,000 tonnes of product missed.
And when you add that all up, you come to a normal season of close to 60,000 tonnes for the year. And hopefully, these type of commissioning situations, we now saw on provider is now behind us. And we have also now initiated a couple of initiatives to make sure that we can have better control of the timing of our shipyards going forward.
First of all, we have changed the schedule, so we will not have 2 vessels at 5-year class at the same time again. And we also have improved our planning process and also optimized the organization related to shipyard operations.
Few more details about the drone. So the way it works is that we have, over the last years, built a big data, machine learning, artificial intelligence model, different names for the same thing, but it's basically a model where we have put in all our historical catch data, all our historical sonar data, added in all the available external sources such as weather data, currents, temperatures, satellite images and then build a predictive model that predicts where is the QRILL at any given time.
And then that model tells where the drone should go and you can see it on the map on the left side, those red hotspots is where the model expects to be -- have high content of QRILL. The drone will go to that area, verify that the QRILL is actually there, and then the fleet will move accordingly.
And as mentioned earlier, 4, 5 times already this year, we have made moves of our vessels on the basis of QRILL findings from the drone. So we're already very early in the season seeing good results from this.
Moving over to the QRILL Aqua segment. Another strong year behind us for the QRILL Aqua, 21% growth year-over-year for the full year. The fourth quarter on par or actually a little bit down, compared to fourth quarter last year, but that is according to plan.
For the full year of '23, we have sold quite significantly more than what we have produced. We have also lifted prices coming into 2024 on the back of good demand and general favorable market environment for our type of products. We see a continued undersupply of marine ingredients into the aquaculture sector, continuing to put pressure on pricing for other commodities and also driving demand for our product.
I wanted to touch a bit more on pricing, which is the key driver for value creation in this segment going forward. You can see here that in the second half here illustrated with the actual pricing in the fourth quarter on the left side.
You see that we have lifted prices 5% compared to 2022. And you can say that, okay, maybe that is not such a great price increase given what's happened around us. But I think there's 2 things worth noticing. Number one is that over the last 2 years, we have increased volumes in the market by 43%, so that is a significant expansion of the market and to be able to do that and at the same time, lift prices, the way we have done the 2 last year is actually pretty good.
And secondly, we have a strategy not to become a volatile commodity that goes up and down together with other type of commodities. We are focused on driving long-term value in our product with the customers that will use our products because they see the value the product provides to their farm.
So our strategy has been always to decouple the pricing of our ingredient to the other marine ingredients. And to the right side on the slide, you can actually see that development. So the blue line represents the price development for our ingredients, while the darker blue or gray at the bottom is the price development for fishmeal, which is a normal substitute for our product. And as you can see, if the fishmeal price goes up or down, we nevertheless continue to drive prices up and that will continue to be our strategy. And as a result, you will not see this kind of big spikes up when commodity prices goes up, but you will also not see the prices coming down when commodity prices come down.
For the Human Health Superba business, fourth quarter landed at 11% growth. I have higher expectations for the fourth quarter for Superba, so a little bit disappointing for me the result of the fourth quarter, but underlying performance with the customers, the underlying activity in the different regions is still very good. And we can see that represented by the 36% growth we see for this segment for the full year. I think that really demonstrates that the turnaround plan that we launched in 2021 has now actually worked and we have turned around the Superba segment back into growth mode.
We also announced at the end of the fourth quarter that we had secured a contract for algae Omega-3 products produced out of Houston and that we had built up production capacity in the Houston plant, utilizing the cost synergies from our Superba production. So we have now 100 tonnes of production capacity in Houston and we have sold out that 100 tonne capacity for the next 12 months. The first 4 tonnes was produced in the fourth quarter and sold to customers.
On the back of that contract basically filling up all our capacity, we made a decision to increase the algae Omega-3 capacity in Houston more than 5x, and that project is now under its way. And we plan to become one of the leaders in the algae Omega-3 space, utilizing the synergies from the cost base in Houston and also the synergies from our global footprint with customers, sales, marketing and R&D.
In 2024, Houston will finally come back into full production. We have now taken the inventory level down to the level they should be at. And basically, we will produce through sales. That means that we will have significantly more product provide Houston cost on. And as a result, cost of goods will drop and margins will increase as we roll this inventory into the existing inventory. So you will see a gradual improvement throughout 2024 on the margin side.
When it comes to brands, Lang continue to deliver well, 11% growth in the fourth quarter, 14% growth for the full year 2023, driven both by successful launch of new categories, with general good performance across the Lang business. We have good cost control in Lang. So as we grow, our EBITDA margin continue to improve, delivering an operational leverage on the EBITDA.
On the Epion or Kori side, as reported earlier, we lost distribution in Costco, which was the major and the biggest customer we had for Kori in the U.S. that is significantly impacting our numbers now in the fourth quarter. But that being said, the rest of the customers are developing well. We have 27% growth year-over-year in points of sale.
And we have also initiated an internationalization strategy for Kori, where we see licensing partners abroad to take Kori to other markets, which means we will not set up our own operations, but rather have local partners that will pay royalties and do the work for us. We landed the first contract in Japan, actually with Costco, that we for now are out for the U.S., but we're now entering Japan, which is the Costco's largest market outside of the U.S.
So with that, I will give the word to CFO, Katrine Klaveness, that will take you through the numbers.
Good morning. I will take you through the financial figures for Q4. Q4 marked the end of the year with a strong top line growth, but with the last quarter coming in a bit on the soft side. Revenue for the quarter was $82.9 million, up from $79 million or 5% from same quarter last year, mainly driven by increased SUPERBA sales and increased sales in Lang Pharma Nutrition.
The group showed a lower gross margin in the quarter of 32%, down from 40%, same -- compared to same period last year.
The Ingredient segment reported an increase in gross profits, but lower gross profits from brands and elimination of internal profits between the segments in the quarter resulted in a reduced gross profit for the consolidated group. The decline in gross profit was partly compensated by the discontinuation of the fuel hedge program in the quarter booked under other income, leading to an adjusted EBITDA for the quarter of $17.7 million down from $20.7 million same quarter last year.
The adjusted EBITDA margin was 21%, down from 26% fourth quarter 2022. Net debt has come down in the quarter as a result of positive cash generation and ends the year at $365 million, down from $388 million last quarter, but is up from $359 million same quarter last year due to investments in growth projects like LYSOVETA, protein, PL+ and the algae oil production line in Houston. There are no new growth projects currently in the pipeline.
Moving over to the Ingredients segment. Revenue in the Ingredients segment ended at $55 million for the quarter, slightly up from $53 million compared to same quarter last year. The increase is driven by higher sales of SUPERBA krill oil, while Aqua had somewhat lower volume in the quarter, partly offset by higher prices that was up 5% compared to same quarter last year. This is an achievement given the 23% growth in sales volume for the full year of almost 10,000 more tonnes of Aqua sold.
Gross margin for the segment was 41% and on par with same quarter last year. Increased profit for the SUPERBA category with lower unit cost from ramp-up in the Houston production is affecting the gross profit positively. However, this was offset by lower gross profits from the QRILL category due to high fuel prices throughout the entire year. Adjusted EBITDA was $19 million in the quarter, up from $16 million same period last year. The increase is related to the discontinuation of the hedge program, where the company has sold off all remaining fuel contracts.
The fair value amount is booked under other income. Adjusted EBITDA margin ended up at 35% from -- up from 31% same period last year.
A short note on the fuel cost development. Historically, the regional spread between the Rotterdam index and the local prices in the South Atlantic has been between $175 to $200 per tonne. The company decided in 2020 to secure the fuel prices towards the underlying spot price as this made up the majority of our fuel costs.
Since mid-2023, regional spread has increased significantly and have been temporarily above $600 per tonne at certain times during the last 12 months. This has resulted in increased fuel cost for the company of around $10 million in 2023, making the fuel hedge much less effective. As a result of this, combined with the decision to initiate a strategic review for the Feed Ingredients segment, it was decided to discontinue the hedging program and sell off the remaining 2024 contracts end of 2023.
Going forward, we expect the spread to normalize somewhat but still be above historical levels. As a result, we expect fuel prices for 2024 to be on par with 2023.
Moving over to the Brands segments. In the Brands segment, revenue was marginally up compared to same quarter last year as Lang was successful with its new introduction and distribution of the multivitamin gummy and showed 11% growth in revenue quarter-over-quarter.
Epion on the other hand, showed lower sales as they lost nationwide distribution with a major retailer mid-2023. However, adjusted for retail distribution or number of doors, Epion shows POS sales growth, POS growth in the quarter compared to Q4 2022.
Gross margin for the segment was 20%, down from 29% same quarter -- same period last year. Both Lang and Epion had decline in gross margins due to product and customer mix. In addition, certain inventory adjustments were done in the Brands segment lowering the margin.
Adjusted EBITDA for the quarter was marginally negative, down from $2.2 million and 7% margin same quarter last year. This is driven by the above-mentioned decline in gross profits in addition to high marketing spend of $1.1 million for Epion in the quarter, partly compensated by lower SG&A in Lang, resulting in an all-time high adjusted EBITDA margin of 12% for Lang in the quarter.
A few comments to the P&L. SG&A should be adjusted for nonrecurring costs of $5.8 million in the quarter, indicating that the underlying SG&A has improved compared to same quarter last year despite higher sales and shipment activity.
For the full year, SG&A is significantly down compared to last year, adjusting for nonrecurring costs. This is the result of the improvement programs. Depreciation in the quarter is higher as it includes the protein plant in Ski.
Other income includes the termination of the fuel hedge program as previously explained. Net financial items are up due to higher interest rates and inclusion of the AION loss.
Tax expense reflects the recognition of a deferred tax asset that is now booked in Feed Ingredients as a result of the restructuring into separate segments. Adjustments for the quarterly mainly -- for the quarter mainly relates to the restructuring and other preparations for the strategic review. For the full year, $5 million of the adjustment relates to the improvement programs, including severance packages and $6 million relates to the restructuring program.
Moving on to the balance sheet. Property, plant and equipment is up due to the protein plant and shipyard costs in the quarter. Also, with the new offshore costing approach in Feed Ingredients, additional offshore maintenance cost is also allocated to PPE in the quarter. This is further described in the quarterly report, but the aim is to better match profit with periods of high operational activity and sales.
In short, all offshore costs in a normal maintenance period of 2 months during Q4 is now allocated to PP&E and depreciated over the following 10 months.
The deferred tax assets of $25 million is included as discussed for the P&L. AION is now moved from equity accounted investment to held for sale. Inventories are slightly up. The SUPERBA oil inventory is down 440 tonnes last 12 months, while certain nonproduct inventory has now been moved from prepaid expenses to inventory, such as fuel stock and packaging material. This is partly then increasing inventory year end of 2023.
Termination of the hedging program affects derivative asset item. Accounts payable are up as we have now implemented 60 days payment terms for most of our suppliers. And equity ratio leaves the year at 44%.
And then finally, the cash flow. We had positive cash flow from operations at $47.3 million for the quarter, driven by a solid change in working capital with higher payables and lower receivables. Cash flow from investments of $24.2 million is a result of shipyard and final payments for the protein plant as well as Houston projects, including the algae oil production line.
Cash flow from financing activities, negative of $14.4 (sic) [ $14.6 ] million due to installments under the ECA facility for Antarctic Endurance and lower jaw under the overdraft facility. Net cash flow in the quarter was $8.8 million, ending the quarter and year with $27.5 million in group cash.
That concludes the financial section, and I will hand the word back to Matts.
Yes. So you have probably seen that we have announced the initiation of a strategic review of the Feed Ingredients business earlier today. So I'm going to say a few words about that. But before I go there, I just want to repeat a few things about the restructuring that went live beginning of January this year.
We have now divided Aker BioMarine into 4 distinct businesses. They have their own dynamics, their own markets, their own strategies and plans with separate leadership and organization with its own P&L and accountability and separate strategies.
We have also divided up our ERP systems, our inventories to reflect this structure. So the first business unit to the left is the Feed Ingredients business, which is our harvesting operation, our logistical operation out of Montevideo and our whole QRILL business including R&D, marketing, regulatory and supply chain. That generated in 2023, $156 million of revenue.
The second business is the Human Health Ingredients business, where we are buying about 10% of the production from Feed Ingredients that we're further refining in our Houston factory. And in this asset -- the Houston factory, all our SUPERBA business or all our PL+, LYSOVETA, algae business, everything related to what we do in Houston and the markets and R&D and businesses globally connected to that. In 2023, that generated $84 million of revenue.
The third business unit is the Consumer Health Products division, which is the former Lang. They will also buy a certain amount of oil from the Human Health Ingredients side and then sell that into the major retailer chains together with other type of products. They generated $122 million of revenue.
All of those businesses have a very clear path, are cash positive and are addressing their respective markets.
Then the fourth business is our Emerging Business unit, where we have gathered all our early phase companies, that are currently not profit-making. And the goal in this division is to turn those businesses into profitability as soon as possible and also seek partnerships to accelerate that and also visualize the value that sits in those assets.
And what we then have announced today is to initiate a strategic review of the Feed Ingredients side of the business, the left side on this slide.
So some more details on that business. So if you look at the columns to the left, you can see the performance for this division over the last years. And looking then at the 2023 column, you can recognize the $156 million of revenue on top of the column. In 2023, that business generated $49 million of what we call cash EBITDA. Cash EBITDA is the EBITDA adjusted for the inventory adjustments, the lagging effects from all activities in the inventory. And it reflects the underlying cash flow from that business.
If we then take the sales volumes we have in 2023 and then you adjust for the current pricing we have implemented coming into '24 as well as adjusting for inflation in cost, you will see that the current run rate EBITDA for that business is $57 million of EBITDA.
To the right, you can see the sensitivity or how this business will develop as we were able to drive prices up and improve harvesting efficiency. So for instance, looking at the current run rate in the middle of that table going to the right increasing prices of 5% will generate an additional $8 million of EBITDA. Similarly, if we are able to squeeze out 5,000 tonnes of extra product produced on board those vessel, that will generate $12 million extra of EBITDA.
So that is the business that we have now initiated a strategic review of.
Now moving into outlook. For the Feed Ingredients side, we continue to see positive underlying undersupply of marine ingredients. That will drive demand and support pricing for our products going forward. We also see a favorable development in product mix, where we sell more of the ingredients we sell to our sister company, Human Health Ingredients as well as higher volumes in the Pet segment. And as reported today, we have a good start of 2024 with the help of new technology. And hopefully, that will also continue throughout the year.
On the Human Health Ingredients side, we are piggybacking on the general increase in consumer spending on health and nutrition products and the general increasing focus on omega-3s , both with -- among consumers and governments. We expect to continue to grow with that positive development in the market and continue to capture market share in the global omega-3 market.
We expect majority of our growth to come in the second half of 2024, both as Korea ramps up and as a result of the normal seasonality that we see in the Chinese market. As also mentioned, Houston is coming back into full production in 2024, driving down the cost of goods and the margins up.
On the Consumer Health Products side, we will piggyback on those same positive trends when it comes to consumer spending on health and nutrition products, but also the fact that retailers are increasingly focusing on their private label product as that is their tool to combat e-commerce competition. We expect stable gross margins for Lang or Consumer Health Products during 2024 with some fluctuations quarter-to-quarter due to product and customer mix.
For Emerging Businesses, we focus on turning those businesses into profitability as soon as possible. And we're also now seeking partnerships for how we can accelerate that and also visualize the value that sits in those businesses. Starting first quarter this year, we will now -- we will then start to report according to those 4 statements separately.
So that ends our presentation today, and we will now move into a Q&A session, where you can send your question into ir@akerbiomarine.com, and then we will answer it here now.
Okay. Thanks. Then over to the Q&A session. So there's a question here on Algae business, Matts. Maybe you can say something about the potential for algae and why you have entered that new market.
Yes. So if we start about why we have entered the market, first of all, we are able to utilize the existing infrastructure that we have in Houston and the existing staff and utilities, so we have a very limited marginal costs related to starting producing these type of algae-based Omega-3s. That means that we have a cost advantage compared to rest of the competition in this space.
Secondly, the customer base we have and the sales force we have globally selling krill oil Omega-3s is basically addressing the same markets and the same customers as you would do with an algae-based Omega-3 product. So we're getting significant synergies from our strong global sales force.
So that is the background for entering into the space. When it comes to the potential, the global market for dietary settlement Omega-3 from algae today is around 1,250 tonnes, and as with 100 tonnes, we are already a significant player, but this market is expected to grow significantly as we have seen fish oil supply becoming limited and fish oil prices becoming much more expensive, and algae can be a good substitute as the fish oil product becomes basically too expensive.
So we are quite excited about that development. In a couple of months, we will launch the brands, the web page, all the collaterals and start our kind of global outreach in this market.
And then staying on the human side of the business, so could you say something about the development of SUPERBA in Korea?
Yes. So we launched in September last year in Korea. The development is lower than what we saw last time. The main reason for that is even if we have these preapproved claims from the Korean government, every TV ad -- everything you say on TV or in advertising needs to be preapproved also by the government. They have a quite efficient process around that. So they basically kind of handle it in 10 days, but that means that every single change you want to do to optimize your communication needs to go through that 10-day cycle with that kind of approval body.
So through that, the optimization goes much slower. But that being said, the home shopping channels, the customers in Korea quite excited about what they see and believe that we can come back into kind of all levels, but it will take some time to build. Also -- I would like to mention also, there is a second claim on its way for approval by the Korean government that will also further strengthen the composition of the product and we hope to get that approved in the coming quarter or months.
So I'm just going to repeat that you can send questions to ir@akerbiomarine.com. A question on the feed business. Could you say something about the marine ingredients market and why you believe this is a strategic resource in that market? Because you say something about that in the outlook they referred to.
Yes. So basically, the short story is that the aquaculture industry has been growing 4%, 5% for many, many years now. They are dependent on marine ingredients for the fish to have good welfare and survive and perform well in the farms. So you should expect that the demand from aquaculture has been growing for marine ingredients in the aquaculture segment have been growing 4%, 5% over the last 20 years, but it hasn't.
And the reason for that is that the aquaculture industry has optimized the diets of the fish. They have reduced the inclusion of marine ingredients all the way from 90% back in the '90s, down to 22% in 2020, but they have hit the floor in 2020, where they can't take it further down, and it looks like it needs to be further actually increased from that level, which means starting in 2020, the demand for marine ingredients from aquaculture industries started to increase, while the availability of marine ingredients, which comes from wild fisheries is flat. And that means that's already in 3, 4 years ago, that gap started to build up.
And as a result, prices goes up and it becomes much more important now for farmers, for feed producers and others to secure access to these type of valuable nutrients for their business.
So we have received no further questions. So maybe just leave the line open for a few more seconds. So with that, we conclude today's session and see you next quarter.