Aker BioMarine ASA (AKBM) Earnings Call Transcript & Summary

Welcome to Aker BioMarine's 2021 Capital Market Update. It is now about 8 months since we went public with Aker BioMarine and has been an eventful year. We've been struggling with harvesting and the shortfall of the Korean market for Superba have significantly impacted our business negatively. But other parts of the business have developed well. Like our performance in Houston, like the sales development in Animal Health & Nutrition segment and the maturing of our innovation pipeline. Today, we'll give you a deep dive of our business and explain our plans for growth and value creation. Aker BioMarine is well positioned in attractive markets for human and animal health & nutrition with a clear sustainability profile. We're vertically integrated with cost leadership and what we call operational leverage. We're poised for growth in all our segments and brands, and we have a maturing innovation pipeline that will give us broad growth in the future. This will strengthen our financial position by driving profitability and cash flow. Qrill is one of the largest biomasses on our planet. It's estimated to be around 500 million tonnes of krill in the Antarctic oceans where we are harvesting. An Aker BioMarine has a very unique position in its large, untapped biomass. We are currently harvesting about 65% of all the krill that's being harvested globally. And through being a pioneer and investing in R&D, we have more than 95 granted patents globally that protects how you harvest, process and make products out of that very interesting biomass. We are the only player that's vertical integrated. That means that we control the entire value chain from harvest in Antarctica all the way to the shelves of the big retail chains in the U.S. We have 3 fishing vessels in Antarctica, and our own support boat that comes and pick up product, changes crew, fuels the vessels, so the vessel can stay on the fishing ground the whole season. We have factories on board our fishing boats and more than 85% of all the products that we are harvesting are being processed, labeled and being ready for customers onboard the vessels. We have a large in-house R&D and innovation team that constantly looking at how we can develop new products out of the krill biomass and how we can substantiate the health benefits through research that's been published in recognized publications globally. We have a global sales and marketing organization with local presence in all the key markets where we operate. There we team up with strategic partners that we together develop the markets for krill-based products, both in the animal health and nutrition market and the human health and nutrition market. We have also lately established our own consumer brands business in the U.S., we're selling krill oil products and other products through the largest retail chains in the U.S. market. Last year, we sold more than 13 million units to American consumers. Being vertically integrated like that, where we control the raw material at one end and the consumer at the other end, gives us speed and flexibility with our products and innovation. It allows us to quickly adopt the changes in the market, and it allows us to quickly roll out new innovation to the consumers. Aker BioMarine has since the beginning been a leader within sustainability and ESG. We have a clear purpose of improving human and planetary health. That means that the products that we make should improve the health of people and the way we make them should take good care of the planet. We have set ourselves ambitious KPIs within all these areas. For instance, we measure how our aquaculture products improves the efficiency of food production. We're measuring how our Superba krill oil is reducing the risk of lifestyle diseases and takes down the burdens for government on the health care systems. We're measuring our marine footprint and our CO2 footprint from a harvesting operation. And already today are known as one of the most sustainable fishery in the world with a very low CO2 footprint. We're also reporting on all these KPIs transparently. You will find all the information about that in our annual report. In Aker BioMarine, we believe a clear purpose and ambitious ESG targets is good for business. We already see consumers starting to make responsible decisions when they shop, and we see governments putting in regulation, forcing businesses to take responsible decisions. Aker BioMarine is really well positioned to commercialize the opportunities that's going to come towards this trend. Aker BioMarine is well positioned in markets with attractive and consistent growth. Today, we're selling products in the aquaculture industry, in the pet food industry and in the supplement industry. And in the future, we will also sell in the global protein market. All of these markets are growing above GDP and has been doing so for many, many years. So what makes krill attractive in these markets? I'd like to kind of talk about it a little bit philosophically. So you can imagine, we talked about krill being one of the biggest biomasses on the planet. That's clearly in all the oceans that cover 70% of the planet surface. But it's actually only in Antarctica they come together in schools and concentrations, so you can catch them in a commercial way. And then krill sits in the bottom of the food chain. And we learned through biology that all the important nutrients and molecules they accumulate up through that food chain. So you can imagine given the size of the biomass, the fact that it's everywhere, and it's sitting in the bottom of the food chain. You can imagine that there are millions of years of evolution, krill and the nutrients in krill has become important for all life on the planet. So that's our starting point when we start to develop products into these different type of segments. And over the years, we built a big library of science that's published by independent journals that documents how this kind of rich nutrients are impacting the life, both on animals, on fish and in humans. For instance, we see in the agriculture side that if a farmer will include part of our ingredients into the feed of a salmon, the salmon will grow much faster, it will have a better quality, and it will be more robust about versus diseases. We see on the human side that the uptake of omega-3 that comes from krill is significantly better in humans compared to fish oils or the older alternatives on the market. And just like humans, dogs also need some omega-3s in the diet, and it's the same thing we see there. It's the best source of omega-3 for dogs. So let's summarize. Aker BioMarine has a unique position in one of the largest biomass on the planet that's currently untapped. We're the only vertically integrated company that's controlling both harvesting and all the aspects all the way to the consumers in the other end. We have a strong position within sustainability in ESG, ready for the future with good solutions for all the needs of our customers going forward. We're competing in markets that have underlying strong growth, I mean having so consistently for many years. And we have unique products with strong science with clear benefits and value propositions in all of these markets. So Aker BioMarine is basically about 2 things: #1 is to get higher and higher value per kilo of krill that we take up from the ocean. And #2, make sure that the cost of processing and getting that krill from the ocean gets lower and lower. So let me explain. So first, when it comes to increasing the value, there's basically 3 drivers. The first driver is that in our volume segment, we would like to increase the value and the price of our products. This is all about getting better and better paid in the aquaculture segment. Then number 2 is about shifting as much volume as possible from aquaculture into the higher-margin segments within Pet and Superba. There, we have good prices, and it's all about expanding those markets. And number 3, it's about innovating new krill-based products where the consumers or the customers are willing to pay a higher price with a better margin than what we have in the base today. And good examples of those innovations are Lysoveta and the INVI protein products. Then number 2, looking at the cost side. It's all about what we call operational leverage, which means that Aker BioMarine is 70% fixed cost. So we are selling more or producing more, the unit cost is getting lower and the margins getting higher. We achieve that through 2 things. One is cost discipline, but mostly important, it's about utilizing the infrastructure better. Every year, doing some tweaks in the process, improving our factories so that we can produce more with the same infrastructure. And if we're able to achieve those 2 targets, getting better and better paid for the raw material, and at the same time, the cost of processing it gets lower and lower, you get what we call operational leverage in Aker BioMarine. That means that our bottom line and EBITDA will grow much faster than our top line. This translates into Aker BioMarine's plan to more or less double our revenues towards 2025. That means an annual growth between 14% and 18% and getting that operational leverage so we improve our EBITDA margin to about 30%. In the rest of the presentation, we'll give you a deep dive into each of these areas and present both the status and the road map to achieve these targets. But let me give you a quick summary. So first of all, let's start with harvesting. We had 2 difficult harvesting seasons behind us. So when we're now setting the targets going forward, we are basing that on historical averages. That puts us at between 20% and 30% increased harvest in the coming years compared to where we are today. When it comes to the Animal Health & Nutrition segment, we're expecting between 8% and 10% growth per year. That will mainly come from increased value and increased prices with customers. Within the Superba segment, we're expecting between 15% and 20% growth on the back of a detailed action plan that we have developed. And when it comes to the branded side, we're expecting between 15% and 20% growth on the back of good trends in the supplement industry, a strategic focus on private label from retailers and new management coming into our branded business now. So as you will see in the presentation today, there is lots of potential and upside in Aker BioMarine, but we have chosen a balanced approach to the targets that I just went through. For instance, when it comes to harvesting, if we get a high harvesting season, about 70,000 tonnes of krill oil produced at sea, that will mean between 20 and $25 million of extra EBITDA. And for Superba, you're going to see an action plan that we have put together. In the current plan that I presented, we expect a 35% success rate of those different initiatives that we put in place. If instead achieve 50% of those initiatives, that would mean 350 tonnes extra sales of krill in 2025, that will mean about $25 million to $30 million extra EBITDA per year. So as you can see, there's also upside potential in Aker BioMarine. And even though we have planned for annual growth between 14% and 18% in our plans towards 2025, having a look at next year is looking more ambitious. We have 3 main priorities for the year, it's to turnaround the Superba situation and demonstrate good growth in that segment. It's to continue to positively develop our branded segment, especially with Kori in the lead. And third, but not least, is to ensure a good harvesting season with vessels operating well and finding krill in the areas where we're catching. And with that, we are targeting a top line growth of between 20% and 25% for 2022 and an EBITDA margin of between 20% and 25%.

Hi. I'm Webjorn Barstad, and I am in charge of the Offshore business unit in Aker BioMarine. The offshore business unit consists of 3 state-of-the-art harvest and production vessels, Saga Sea, Antarctic Sea and Antarctic Endurance. And one special purpose-built service vessels, the Antarctic Provider. The mission or task of the offshore business unit is to harvest and produce krill into krill meal as efficiently as possible. Once we produced krill onboard, we offload into Antarctic Provider, our service vessel and Antarctic Provider brings the product to shore for further processing, downstream in our own value chain or for distribution to customers globally. And we do this more efficiently than any other company worldwide. Aker BioMarine harvests about 65% of the global catches of krill, we do this with our 3 vessels, and then the remaining 9 competing vessels are taking the remaining 45% of the global catches. We are now on board Antarctic Provider, the new service vessel that Aker BioMarine received in the first quarter of this year. With Antarctic provider in operation, we can take out of service our old cargo vessel La Manche, and also not anymore have the need for a chartered cargo vessel in high-season. In this way, we are able to reduce fuel spend in our service part of the operations by more than 50% or more than 4,000 tonnes, good for business, good for the environment. In addition to significant fuel savings in the service part of our operations, the introduction of on Antarctic Provider will also make us more cost efficient in many other ways. Antarctic Provider has the ability to carry a lot more cargo than our previous cargo operations. She can carry a lot more fuel to the fishing vessels, a lot more provisions and spares and also has twice the capacity in bringing crew to and from the fishing ground. In this way, we can reduce the number of service trips that is required and reduce costs of the service operations significantly. So in short, Antarctic Provider makes our operations at sea more efficient and more environment-friendly. Our krill harvesting area is called CCAMLR Convention Area 48. This is a huge area in the southern Atlantic Ocean that contains vast amounts of krill. And recent scientific service shows us that the krill resources in this area are growing. And of course, at Aker BioMarine, we are proud to be contributing to the collection of scientific data from this area. The quotas are set at a very prudent level. In fact, less than 1% of the biomass is harvested each year. And as a consequence, all the leading sustainability certificates are certifying this area as being amongst the most sustainable fisheries in the world. Our vessels are the most modern and effective in the industry. In fact, each of our vessels will catch and produce more than 3x the amount of the vessels from our competitors in the krill industry. Having said that, we cannot be complacent. We have not been able to produce to the amounts or the levels that we would expect from ourselves in the last couple of years. In 2020, we had technical issues, particularly with our new build, Antarctic Endurance that needed some modification and lost fishing time as a result. In 2021, nature played us a trick. We had little krill availability in the key harvest areas. And also ice was covering some of the major fishing grounds in a long period of time, making it impossible for us to be able to harvest. Going forward, we will produce more, we will produce cheaper and we will produce cleaner. The main method will be the development of drones to search for krill rather than using expensive fishing vessels to search out the krill before harvesting. We have, through cooperation with Kongsberg Maritime, developed a surface drone that will be put in operation in the second quarter of next year, and we have great faith in that being able to facilitate finding krill more efficiently and more sustainably than we have done in the past. Our road map for increased harvesting and offshore production rests on 3 pillars. We are going to increase the number of fishing days. We are going to increase the operational efficiency, each of these fishing days, and we are going to reduce our costs. Increasing our fishing days is going to be achieved mainly through the use of drones to search for krill rather than using the fishing vessels to do that task. And also, we will use the drones together with our service vessel to conduct scientific cruises that will reduce the use of commercial fishing vessels to do scientific cruises. Rather than using fishing vessels, we can use Atlantic Provider and drones. And that will create a great platform for the scientific community to conduct their work at the same time as we are increasing our number of fishing days available to us. We're also doing several technical measures on board vessels to improve the number of fishing days. This could be, for example, expanding the krill holding tanks on board the vessel so that we can take more krill on the peak part of the day. We are also using increasing the offload speed with the introduction of our new service vessel, which will give us more fishing days available for the vessels. We're improving hauling and shooting operations. And as such, we have several work streams that will basically bring us more fishing days at the fishing ground. Increasing operational efficiency will mainly be all about yield improvements or increased recovery rates. We are basically trying to get more end product out of each ton of raw material in. We will also be improving on our harvesting equipment to fish deeper and to have larger sized fishing gear. We are working with packaging and product mix optimization. We are working with logistics and to improve the offshore logistics, again, with the help of our new service vessel, basically producing more power day of efficient fishing. Finally, reducing costs is all about a systematic approach to cost reduction. So we have a very structured program where we are going through all our main costs every month, and we grind through month-by-month same cost items again and again to see if we can lower the cost of our operations. Taking all of this together, I would say it would be a fair expectation that our production level will be in the area of 55,000 to 60,000 tonnes per year. Then you would expect as we are operating in some of the fiercest waters on the planet that this could go up and it could go down depending on natural variations. But with all of these measures that we are doing to improve our operational efficiency, I think we could safely say it would be an expectation that we'll be working in the higher end of the expectation grid going forward.

Top line growth is really important for the success of Aker BioMarine. And now start in a section, we will take you through our plans and our targets both for the Animal Health & Nutrition segment, the Human Health & Nutrition segment and our branded segment. All of them have different dynamics and are part of an attractive market where we have a clear value proposition, a differentiated product and are able to have a competitive edge versus the competition that we see in these markets. In the Animal Health and Nutrition market, it's all about getting more value and better paid for our products. In the Human Health And Nutrition market, it's all about getting volume and increasing and expanding the market. And in the branded side, it's all about capitalizing on the long history and strong relationships. We have the 7 biggest retail chains in the U.S. By rolling out new inventory products and making sure that the products that we have on shelf, we'll be successful. What is really interesting with Aker BioMarine is that most of the volume that we produce is being manufactured, packaged, labeled and released onboard our vessels and then shipped directly to customers. That makes our operation really, really efficient. All the products that we sell into the Human Health & Nutrition segment go through our biorefinery in Houston. They extract out the valuable lipids that becomes the Superba krill oil, and then we are shipping it directly from our factory in Houston all around to the global markets that we have around the world. So the fundamental for our success with growth lays in our pioneering R&D work that we have done in the last decade. We have done more than 135 studies, documenting the benefits of krill, for salmon, for pets, for humans in all the markets where we operate. That's where the value proposition is created and that's why our customers are so interested in our products. Also being a pioneer means that we have patented a lot of the production processes, the products that we make and the effects that they have in animals and humans. That has resulted in more than 95 granted patents worldwide, protecting our margins of our business for the future.

The Animal Health & Nutrition segment is selling krill to the agriculture industry and to the pet food industry. And both these industries see significant growth. And the reason for that is, of course, that we need more food. We are into an aquaculture segment that will grow, because aquaculture products produce healthy food, it produce food with low CO2 emissions, and it is efficiently converting feed into product. So well positioned to be part of the growth in the industry in the coming years. So also the pet food industry is growing because people have more pets. It's growing significantly in the last years and we see a growth in pet food production. So now let's talk about the aquaculture industry and the products we deliver there. Qrill Aqua is well positioned to support the shrimp marine fish and salmon industries because it's a sustainably produced ingredient, and it comes with low CO2 emissions, which is important for feed production in the years to come. The aquaculture industry is growing, and the feed production needs to grow, and this business needs high-quality feed with good protein and fat inside the feeds. And krill supports and give those benefits to the feed. Qrill Aqua is rich in lipids with omega-3 phospholipids in them, and it's rich in high-quality protein. The aquaculture industry will grow, and there is a challenge to get ingredients and raw materials that will support this growth. Therefore, Aker BioMarine's Qrill is well positioned to deliver high-quality proteins and high-quality fats into the growth in the industry. Aker BioMarine has studies showing that krill inside salmon feed can give an improved growth, up to 24% when it's given to salmon after transferred from fresh water to seawater. We also have studies showing that salmon grow faster when they're used in the salmon feed just before harvest on bigger salmon. So krill feed also gave support to the quality of Atlantic salmon. It's better, it's redder and more firm and which is positive and gave benefits for the farmer when it's more profitable operation if he manage to get a better price for the salmon in the market. And krill also gave improved health for salmon due to better organ health and better survival for salmon using krill in the feed. In the shrimp industry, it's a little bit different. In addition to the growth effect we see in salmon, krill can be used to take out more expensive ingredients in the field to lower cost of the feed for the producers, which is important in this industry. For Qrill Aqua, we have a diversified customer portfolio. We sell Qrill to more than 70 customers in all continents, and we sell to 3 main species, salmon, shrimp and marine fish and also a small proportion to other smaller species. The pet field industry globally is very big. For us, the Qrill Pet brand is still small, but it's growing fast. And it represents an opportunity for us to improve margins. This is also an area where we can use marketing as an active tool to improve the benefit for the feed producers, and we also have customers that are using our logo and our material owner bags and in their own marketing material to differentiate their products in the pet food market. So towards 2025, we're targeting a growth of 8% to 10% per year in this segment. We will do that by increased price because we see high demand for the product in the market, and we see higher awareness of the benefit of the product. We will grow the volume within the existing customer portfolio. We will target high-margin segment for the Qrill Aqua product, and we will develop our sales force further in the key aquaculture markets. For Qrill Pet, the growth will be higher. We will do that by also targeting the global pet food producers and for both Qrill Aqua and Qrill Pet, we have entered China recently, and China represents the biggest global market for marine ingredients.

So let's talk about the Superba segment, our products that we sell in the Human Health & Nutrition segment. I want to take you through 3 things today. Number 1, the market we operate in and how we compete in that market. Number 2, the situation we're in today and where we're coming from. And number 3, our plans going forward to realize the growth that we have in our plants. So let's start with the market and how we compete in it. So Superba krill oil is part of a global omega-3 market. And Omega-3 is actually one of the most studied molecule in history. More than 40,000 studies document the important health benefits of omega-3s,and most governments out there, they recommend the population to take an omega-3 supplement or increase their intake of fatty fish. But despite that, in the U.S., more than 70% of the population is deficient in omega-3s, meaning that they're having so little intake of omega-3s that is representing a health risk for them. And actually, 97% of the Americans, they actually know about the benefits. So why aren't they taking omega-3 supplement to solve that challenge? And there are certain barriers why these consumers are not taking omega-3 supplements. The first has to do with consumer experience. So when you take a typical fish oil omega-3 product, that is a fat. And when you eat that product, the fat will float in the top of your stomach. And that will cause this after taste, this burping of the fish oil throughout the whole day, which is an unpleasant experience for 60% of consumers out there. The second and most important reason why people are not taking omega-3 supplement today is that they're struggling to swallow these big kettles. And krill oil is, in fact, addressing both of these challenges. Number 1, krill oil is connected to a molecule called phospholipids. That phospholipid molecule makes the oil water soluble. So it mixes in your stomach, and it doesn't flow to the top and give it that unpleasant after taste. Number 2 is that, that phospholipid molecule also makes the absorption of that molecule in your cells much better. So you can actually take a smaller capsule that is easier to swallow. So let me show you a film that explains this. [Presentation]

So what you saw here now was a technical description of how our molecule works in our cells and in our bodies. When you go out to consumers, it's translated into easily digestible marketing messaging. You can see here how one of our larger customers, Reckitt Benckiser, are communicating the benefit of CEO and how they're differentiating the product clearly versus fish oil and the other sources of Omega-3. But the value proposition is not only strong for the consumers and the brands that want to create an attractive consumer story. It's also very attractive for the retailers and economics around the product. What you see also here is the distribution of margin of a typical official product compared to a typical krill oil product. As you can see, it's more expensive, so it's a premium product. But you can also see that the margin that is there to be shared between the retailer and the brand is significantly higher if the consumer buys a krill oil supplement instead of buying a fish oil supplement. That means that the retailers out there, they are in the same boat as us. They want to convert as many fish oil consumers over to krill oil as possible. So let's talk about where we are today and where we're coming from. In fact, krill oil is one of the most successful ingredient in the supplement industry the last decade. It's been growing very fast and within 12 years, captured 2%, 3% of the global omega-3 market. But in our most successful market, we have more than 20% market share in the omega-3 space, and that demonstrates that there's still a lot of potential to grow this market. From 2016 to 2020, Aker BioMarine doubled its krill oil sales, driven by strong underlying growth in all markets, but especially driven by a new market in Korea. We expect these type of new big markets to open up also in the future is part of the nature of our industry. But in 2021, we got challenges in the Korean market. Regulatory changes impacted our ability to sell and our customers' ability to market our products, and that has severely impacted the sales in 2021. We will get back to later how we're going to address that situation. During COVID, it hasn't been easy to develop new relationships and build new customers, so we could compensate for the shortfall in Korea. We know, for instance, that there's 13% fewer product launches in our category during COVID compared to before. We know that most businesses that sell business to business, they struggle with their sales processes when they can't meet the customers, can't build those relationships face-to-face. And we also know that the overall retail market in U.S., for instance, is down 5.7%. And krill oil is very exposed to the retail channel, and that has also impacted the sales of Aker BioMarine. But the good news is that krill consumers is still there. So even if krill oil sales in retail went down, it increases about the same amount in e-commerce. So we're not losing the consumers and they're not losing faith to the product. So let's talk about how we're going to get strong growth back into Superba. So we have already created an action plan for how to turn around Superba. We have divided it into 3 parts. One part is short-term initiatives that we're doing right now that has effects right now. Number 2 is structural projects that will help us take out the full potential that we see in the krill oil market. And number 3 is how we organize our -- the rest of Aker BioMarine to support and make sure that they maximize the effects that we do our commercial activities. So let's start talking about the short-term initiatives. That's all about good old traditional prospecting and sales activities. We have built a prospect list of the most important leads that we're working with. There's 80 of them and they together represent 800 tonnes. That's more than what we're selling combined today in krill oil. They have a name. They have activities. We're speaking to them, and we're following up on a weekly basis with each sales rep to make sure that we have an optimal progress on each of these prospects. They are well divided by geographical areas, covering both U.S., Europe, Asia and the rest of the world, and there are also good spread of big and small prospects that we're following up. This list of 80 prospects is based on the 5 most important prospects each sales rep has. And each of them has a plan for how we in an optimal way and as fast as possible can realize the potential that fits with these prospects. In addition to the short-term focus on the 8 most important prospects, we have identified a number of structural projects that will help us take out the full potential for krill oil in all the global markets. And there are different ways for how you can calculate what that potential is. You can, for instance, look at the market share we have in the U.S., and you can say that we will be equally successful in the other markets, what is the potential then. You can look at the buying power of the U.S. market and see how much we're selling for equal amount of buying power in other nations and through that calculate the potential, or you can look at each of our structural projects that we have identified and look at the targets that we have set for each of them. The interesting part is that they all come together about the same potential, somewhere between 2,000 and 3,000 tonnes of krill oil based on today's market. I will now tell you about some of those structural projects that we have identified and starting working on. First, I would like to talk about Korea. We know from history that we can sell a lot of krill oil volumes in Korea. And also, we know that it was a regulatory change that basically stop our ability to sell the way we did historically. So right now, we are working to make sure that we can get back into that same position that we were in 2019 and beginning of 2020. That has mainly to do about the regulatory framework in the Korean market. Firstly, we have already complied to the new requirements for product quality, and we're currently today also selling in Korea. The focus right now is to apply to the Korean government to get preapproved health claims for the benefit of krill oil, so that our customers can aggressively market krill oil to the Korean consumers. Before we have that, it's really hard for our customers to get good ROI on their marketing investments. We have currently filed one application for heart health. We got some feedback from the Korean FDA and are now addressing those and resubmitting. We have also run a local study in Korea, documenting benefits related to metabolism, and that is about to be filed to the Korean government. The Korean government have about 3 months to respond to our application. But if they have a question or a request, the clock restarts again with another 3 months, which means this can take time. We estimate somewhere between 6 and 12 months before we will have a final conclusion on these applications. We're also currently exploring other possibilities for health claims in Korea, that potential will be filed in the future. Our customers and partners are confident when they tell us if we get these claims approved by the Korean government, we move back at the old sales levels in Korea. The next project I would like to share with you is the initiatives we have in the Asian region. We know that that's one of the markets with the highest potential we have out there and it's a strong culture for supplements in a lot of these markets. There's many initiatives in the Asian market, but one we are especially focused on is trying to replicate the success in Korea in similar markets. The success in Korea was built on home shopping, where you basically have an hour to tell the story about krill oil to the consumers. Many of these markets have a strong culture of our home shopping. Like in Korea, 6 million people will be watching the most popular home shopping programs. In Japan, 30 million people will be watching the most successful home shopping programs. So it's a great way to tell the deep story about krill and the benefits of krill oil. We have now launched home shopping in 2 key markets where home shopping is an important channel. Firstly, we started this autumn in Japan and have already have our first 2 shows, and all of them has exceeded the KPIs that was set by the TV channel. That means that we'll invite us back to more shows at better timing. Again, this is the same structure like in Korea. We typically have an hour to educate consumers and tell the story about the benefits of krill oil. And one thing is that, that will drive sales directly to the home shopping channel, but mostly, it will educate consumers and it will motivate other brands to launch krill oil products in other channels, just like what happened in Korea. We have the same setup in Taiwan, where we have already also had our first home shopping programs. I think what is important to mention when it comes to home shopping, this is not Aker BioMarine booking a slot. We operate like retailers. So they -- the home shopping channels, they will buy the product from us, and they will sell it out through their channels to their consumers. So it's like a customer and supplier relationship we have with the home shopping channels. So the more success you will have, the better timing and the more shows you will have, and that will drive sales both in home shopping, but it will also motivate other brands to launch in other channels, just like what happened in Korea. The last example in our Asian project is what we're doing with DouYin in China. DouYin, it's basically TikTok and to be able to sell products through DouYin, you need to be qualified. And there's actually very few supplement companies that are qualified for selling products through that channel. But our customers is one of the few, 1 of 5 companies that are able to sell supplements through that channel. And we launched the first campaign in first on my member connected to what they call Singles' Day in Asia, which is like Black Friday in the western markets, and they sold 20,000 bottles in less than an hour. So this shows the power of these new channels and this new type of customers that we're seeking in the Asian region. In addition to this kind of structural projects for Asia, the organization that we have to execute on it is also very important. We have recruited a new leader for the Asian region, an executive from Cargill, one of the biggest private companies in the world that knows this industry and this market very well. And he's now currently staffing up his organization to be able to execute on our ambitious plan for the Asian regions. Another important project to take out the full potential of krill oil is what we do in the U.S. And U.S. is the biggest market for krill oil today and it's also the biggest supplement market in the world. This is where a lot of the innovation happens and this is where global players find their inspiration for what to launch in other countries. That's why U.S. is of strategic importance for Aker BioMarine. We've been very successful in the retail channel in the U.S. We have about 20% market share in the mega tree space in retail. So all we want to do is to make sure that we can replicate the success in retail into all the other channels in the U.S. market. Retail only represent about 20% to 25% of the U.S. sales of supplements. And what we have done is that we have analyzed each of these channels systematically looking at what does the margin look like? What does the value chain look like? What does a successful value proposition look like? And how does the krill value proposition fit into that? And who is the most important players and companies and prospects that we would like to go after to realize the potential of each of these channels? So we have gone through each of these channels systematically, have an action plan and a road map for each of these channels and now are recruiting an organization that will have responsibility and accountability to make sure that we can take out the full potential in all these channels. Another project I'm really excited about is what we call short-term innovation. That is new products that we currently haven't disclosed that we will launch within the next 12 to 18 months that will open up new potential for us. We can provide these innovations into 3 buckets. The first one is process changes that we do in our Houston plant that allows us to significantly boost the nutrients that you currently today find in krill oil. That will make krill oil significantly more competitive compared to fish oil and other sources of omega-3. Another innovation is utilizing the phospholipid molecule of krill to increase the uptake of other ingredients, not in omega-3 category. We already have scientific data demonstrating how we can take one ingredient combined with krill oil and significantly increase the uptake of that other ingredient. There are many successful ingredients out there that are really struggling with uptake in the body, which means that krill oil can make those other ingredients more successful and more attractive. That will allow us to enter into new markets outside the omega-3 market where we're currently competing. The third innovation I would like to talk about is simply combining krill oil with other ingredients that has preapproved health claim by different type of governments. By doing that, our customers can get more claims, stronger marketing messaging that they can put to their consumers that help them be successful with the combination of krill oil and that other ingredients. These are all new innovations where we come quite far in the development, and we expect to launch within the next 12 to 18 months. We set ourselves a target to grow the Superba segment between 15% and 20% per year towards 2025. That means that we will be successful with about 1/3 of those projects that we have identified and that we talked about now. The main 3 pillars towards that achievement is number one, the short-term focus on prospecting. We have those 80 prioritized prospects that we're systematically following up, and the first prospects are now converted into sales. We have the structural projects that will help us take out the full potential that we see for krill oil globally. And last but not least, it's all about execution. It's about having a strong sales organization with strong KPIs that systematically has been followed up to make sure that we have sales and marketing excellence across the regions where we operate. So about 1/3 of Aker BioMarine's revenues is coming from our branded segment. And I'm going to now call up Seth French, who is our new CEO for our branded business. Hello Seth, how are you?

I'm good. How are you?

I'm good thanks. So first of all, tell us a little bit about yourself and your background.

Recently, I just joined with Lang about 2 months ago. But before that, I spent the better part of 14 years working in one of the largest private brand beverage operations in the United States. And my background largely began originally in finance, but eventually became the President of the North American unit of Lassonde Industries Private Brands segment.

So very relevant background there for taking our branded business into the future. So maybe can you just explain for us just kind of briefly, what's the difference between a private label or private brand and a brand?

It's a really good question, Matts, and what I think that is worth -- well worth describing. So private brand, by way, I'd add to my background, we also ran branded units as well. So I had experience with both. And the difference largely was that the brand -- a brand business is run really with a very direct eye on creating a position or an image to a consumer directly. Private brand, although you may be -- one may be making the same product is, in essence, really working for the retailer that owns the brand and operates the brand, the private brand company really works as a support mechanism for the retailer to drive their own brand, thereby the offerings, the services, the discussions, the conversations, everything about it becomes slightly different from one another. So they both sit on the shelf next to each other, but the actual business models are quite different.

And can you share with us a little bit why the private label or private brand business is an attractive place to be in the U.S.?

It's a very attractive place to be. In general, we see most of the world has in a difference by category, but most of the world has really adopted the idea of private brands faster and in a much deeper way than the United States has. And that may not be true for every category, but it is -- in general, it's a trend that the United States is catching up to the rest of the world in private brand, which means that even if you're not in a growing segment, which we happen to be in a growing segment, but if you're -- even if you're not in a growing segment, the shift in the allocation of the sales pie, if you will, is likely going to shift increasingly towards private brands in the future. So it's a good place to be. It plays into the differentiation of the various retailers in the United States regardless of channel. They're trying to differentiate themselves and create and capture the brand value that typically has been the property of big consumer brand companies, but increasingly, the outlets themselves want the brand. And so that's what's motivating economically.

So then what's our kind of success recipe to win in that attractive market?

Our success recipe is generally true. It's especially true for Lang is that as retailers try and accomplish this goal of establishing their own brands, they are largely not experienced in doing so. And they're trying to manage many categories at once. So what they are really looking for are long-term partners. Make no mistake, retailers are looking for transactional type discussions, exchanges, they want the best price. So all of that plays into the day-to-day tactical discussions. But longer term, it is my belief and my experience that a strong solid partner who is bringing products that differentiates help the differentiation process for the retailer that those are the ones that are going to win in the long term, maybe not this season, maybe not every year, but generally speaking, that is the winning recipe and Lang, with respect to dietary supplements, very much occupies that space in a niche way, but in a way where I think there's a lot of growth potential.

And I think also we have quite a good track record when it comes to service levels and fulfillment levels, which is important for the retailers when they choose their partners.

Absolutely. They have. Lang in this, especially over the last 18 to 24 months of the pandemic era for lack of a better term, Lang's model has especially worked well. It's an asset-light model, which means that we don't own assets, but we almost act like a consultancy and in terms of servicing customers and holding that high-quality sort of offering or facing to the retailer, we also additionally make sure that our service levels remain high. Our inventory balances may be high at times, but the purpose there is to buffer us both between the retailers being unsure about their ultimate forecast or distribution plans, that combined with many manufacturers, inventory balances and buffers help. Our invent -- as a result, during the pandemic, that model has worked very well. And our club channel is north of 90% fill rate. And our other channels, no one is below 80% and our in-stock levels are solidly in the mid-90s. So retailers are actively in this environment, actively complementing Lang on our ability to service them and keep their shelves full, their warehouses full and their customer -- their product available for the pretty rich margins that the retailers make on private brands. It's a very, very critical aspect. And I will tell you from my previous experience, my predecessing company or my former company, those service level numbers are extraordinary in this era.

And then switching over to the branded side, I mean, our brand Kori, which is our own brand for krill oil in the U.S. There's been some quite exciting development lately. Can you kind of share with us kind of a very high level what's been happening?

Kori's brand was designed as an omega-3 or a krill sort of branded product, which allows the Aker BioMarine vertical, if you will, to have a vote and to have the ability to create and mold sort of the krill subcategory, more so than they had before Kori. So that was its original intent. Of course, for that to happen, you've got to be in the right channels and in the places where people are buying supplements and this type of product. So the great news is, without getting into too much detail that a couple of major channels have opened up, specifically in the club channel for Kori, and I would argue, I would say that in those channels that probably they represent somewhere between 20%, 25% of where all supplements in the U.S. are purchased, Kori is now well -- is going to be well represented there, which should definitely make inroads and be an opportunity for Kori's name to penetrate much further in the marketplace, which allows for greater power for our combined companies to have an influence over krill buying patterns and perceptions. In addition to that, Kori has got some innovation coming along, which again, I don't want to get ahead of the innovation crew or the brand team, but there's innovation that not just -- not only are we getting more depth in terms of retailer distribution, but we're hoping for more with or more breadth, if you will, in terms of product offering. So all those things we should be expecting in 2022.

Okay. Great to hear. And then lastly, what's the growth ambitions for Lang and the plans going forward?

We are -- I mean, we're looking at growth. There's a lot of opportunities for growth for Lang. And the hard part is really partly about finding what is the most -- what is the -- we can't devote resources to everything. So the best -- our -- what we're trying to do is find the best place to put those resources. We have numerous options. But we're looking at could we get -- to the extent that we can get into smaller customers with our existing products, control brands, is that something that we can do? We can't achieve the scale with smaller supplement providers. But if we control brand allows us to get into 10 more customers with the same effort and the same products that we've been able to sell before, that's a natural extension. We're always looking at category development. So do we need to get into new verticals? We know how to do private label. We know how to run a virtual network, and we're already in a lot of major customers. Again, we're probably in customers at this point where 80% of supplements are sold. So if we're able to expand those offerings just a little bit, that it translates into substantial growth of our sales base. We're looking at new product delivery systems in terms of things like gummies, if you will, that if you walk into a store and you see into a Target, for instance, and you see the vitamin, the supplements aisle, there's gummies all over the place in terms of delivery systems. Private brand is not well developed in that. So we think that's a huge opportunity for us. And then things like in taking commodities that are -- have been just sort of viewed as things that are like soft gels, we may come up with diversion on that and have an exclusive access to various variations like, for instance, the vegetarian soft gel. That's something that's different. It's a soft gel that's fairly commodity, yes, but can we offer something somewhat special to a select group of customers in an exclusive way, that's another way. Exclusive ingredients are a large way when we find new things, we tend to find trends before they become a trend and then try and bring those things to market. We're viewed as a gateway to private brand by a lot of new and innovative ingredient suppliers because we're willing to entertain them, we're willing to invest. And we are looked at it at that way. Our brand name is kind of that way in the private brand marketplace. So that's normal course of business, but there's always opportunity. New products, new product development, new verticals, there's lots of different ways to go. It really our challenge is to find the most scalable way to go and then devote resources to that in '22 and beyond.

All right. So thank you for some great insights and it looks like we have a quite bright future for our brands going forward.

Innovation is deeply rooted in the history of Aker BioMarine and the culture of our teams. This culture is driven by a global mindset and an international workforce, bringing a diverse set of perspectives to the work that we do. Within the innovation department, we have 12 different nationalities. And across the company, 40 different nationalities, bringing different perspectives to the way that we work. In addition, we have passion for our mission to improve human and planetary health and how our work contributes to that mission. Employee surveys regularly show that over 80% of our workforce consider their job as a passion of theirs. We have extensive expertise in all areas of the business that we operate. But we combine this expertise with an extensive network of global partners where we push the thinking in scientific, technical and business models to discover and deliver new innovations. This culture and way of thinking has driven us to innovate across new products, new technologies and new business models. The birth of this innovation culture is in our offshore organization, where they have pioneered eco harvesting which fundamentally changed the way that we harvest in a sustainable and efficient way. It's carried through to our manufacturing facility in Houston, where they've launched the Flexitech technology, which fundamentally changed the krill oil market with the launch of the Superba's the Superba Boost products. It's continued into our fundamental research, both on the krill biomass and Antarctica as well as the nutritional and health benefits of our products. 2021 was a big year with the launch of 3 new innovations, Lysoveta, which is a lipid family of products, leading the way in brain health innovation; INVI, best-in-class protein peptides in our entry into human nutrition, both of which are new product innovations that deliver on our missions both to improve human health as well as to increase the margin of our products. Our ambition is that both of these new product verticals will be contributing revenue by the end of the planning period. I'll speak a bit more about those in a minute, but the third big innovation that was launched is AION, a company leading the transition to a circular economy, offering circularity as a service in industrial plastics. AION continues to develop as expected, operating as a stand-alone business unit within Aker BioMarine and process is ongoing to spin out and scale up the business. First, to share a bit more about Lysoveta. Lysoveta is linked to the growing focus on brain health globally, driven by 2 key megatrends. The first is an increasingly aging population, where more and more the body is starting to outperform the brain. The second is increasing focus on mental health across all demographics, which has been expedited by some of the effects of COVID-19. It's well known that EPA and DHA are critical for the structure and function of a healthy brain. But it wasn't until 2014 that scientific breakthrough showed how this actually happened. The brain is protected by a selective blood-brain barrier. It was discovered that there's a specific transporter in the brain, the Mfsd2a transporter that actually functions in a way as a lock to get these compounds from the blood into the brain. It was discovered that there's a specific form of EPA and DHA that's required in order to use this transporter and cross the barrier. This form is LPC. LPC, EPA and DHA is the foundation of the Lysoveta family of products. Over the last 6 years, we've invested in research and development to develop a family of products, understand fundamental mechanisms as well as build an extensive IP portfolio. We hold a distinct competitive advantage based on the cost effectiveness of our process as well as the broad IP protection that we've secured. Our first core target segment is the brain health supplement segment. This is a large segment at $7.7 billion and growing at 8%. The U.S. holds the largest of this market share and will be our first target geography. The brain health supplement segment is a premium within the overall supplement category. It's also shown a proven higher consumer willingness to pay. And with a strong value proposition, we expect Lysoveta to be able to compete well in this subsegment. Beyond the supplement segment, we see great potential for the LPC, EPA and DHA molecules. To maximize shareholder value, we'll continue to seek and evaluate external partnerships, and we're also investigating potential from our internal R&D activities. As we look to 2022, we'll continue to prepare for regulatory submissions in the U.S. with approval expected by year end. Preparations also continue at our manufacturing facility in Houston, where Lysoveta will be produced. We'll also start to ramp up our commercial team and commercial activities toward the ambition of first revenue in 2023. And finally, we'll continue to seek and evaluate partnerships, both commercially and with academic institutions as we look to build the Lysoveta space. With Lysoveta focused on adding value to lipids, INVI as Aker BioMarine's entrance into the large and growing protein market in human nutrition. This is a massive market at $34 billion in consumer products, almost 10x the size of the omega-3 market. The market has been growing at 6%, and we expect this growth trend to continue with increasing consumer knowledge and demand for clean, sustainable proteins. Over the last 5 years, we've invested to build a family of protein products that's resulted in INVI. INVI is a 90% protein powder, extremely pure and has been hydrolized into peptides for enhanced nutrition. INVI is well positioned to compete in this large and growing market. INVI has best-in-class protein quality with a complete amino acid profile as well as proven rapid uptake into the blood. In addition, INVI is rich and naturally occurring in minerals, including calcium and magnesium, which also offers potential structure function claims. In addition to nutritional benefits, INVI also offers unique functional benefits. INVI is completely soluble, offering the opportunity to make clear protein beverages in comparison to the milky beverages that are commonly seen and is also pH temperature stable, offering unique applications in the ready-to-drink beverage segment. Finally, INVI is well aligned with increasing consumer demand for sustainable and clean label products. With a strong value proposition, INVI will be positioned in the most premium segment of the protein ingredient space. This space is large at over 3.6 billion metric tons of protein ingredients, but we estimate the addressable market to be about 1/4 of that at 900,000 metric tons. This is for the closest comparison both in terms of protein content as well as protein quality. As announced, our expectation is that at full scale, we will sell about 5,000 metric tons of INVI. This is about 0.5% of the addressable market. The U.S. holds the largest market share in this space at over 50% and will be our lead launch market. In 2021, we achieved a significant milestone, receiving U.S. regulatory approval with self-affirmed GRAS status. Similar to Lysoveta, INVI will be launched in a B2B sales model with potential B2C opportunities through Epion Brands. The first target segment will be active nutrition, which will be the typical powders, bars and ready-to-drink beverages sold to the mass market. Moving into 2022, a core focus will be the construction of a launch plant in Norway. The purpose of this launch plant is both to further refine and optimize the process as this will be the first time a process of its type has been commercialized as well as to provide early product for first customer launches, both to validate the value proposition as well as the price of the product. In the interim, we'll continue research and development scale activities, both in Norway and Scandinavia, both to improve the product as well as for small productions in order to start customer product development cycles. We'll also continue research into the functionality of our product in end formulations as well as nutritional R&D. And finally, with volumes expected from the launch plant in mid-2023, we'll begin to ramp up our commercial team and activities.

Aker BioMarine is coming from a period with strong growth, both in revenue and EBITDA. We are about to put a difficult year behind us with certain struggles that have already been explained and are looking forward to continue our journey of growth. Our net interest-bearing debt gives a testament of the significant investments that we have behind us, also in place to fuel and support the further growth. We have identified 4 critical components to support growth. We will start with the top left corner. The growth has to be profitable. 2 drivers for that: one is to realize the operational leverage. The second is to sell products with higher margin. And most of this growth can be realized within the existing infrastructure and the value chain that we have today due to the significant investments that we have done over the past years. Moving over to the top right corner. Underlying efficient operations with solid well-maintained infrastructure is key. 2 main drivers that will define this. One is driving the unit cost down. And the second is also to drive cost savings and create a significant cost awareness across all BUs. Moving down to the bottom left corner, sufficient financial capacity and a robust balance sheet, making sure that we have access to funding, also now through the capital markets in addition to our banks and also sustainable leverage ratios acceptable to all lenders. The IPO strengthened our financial metrics significantly and combining now with a new refinancing in place, puts us in good shape despite a difficult year behind us. And finally, to the bottom right corner, the ambition to build up a solid cash position that in time can be spent on new investments or dividend capacity. Going a bit deeper on profitable growth. Matts has spoken to this slide earlier, but it's worth repeating as this is the very foundation for our growth. I would like to repeat the 2 key drivers, namely unlocking operational leverage and increased sales of high-margin products. Mainly 3 themes within this category. One, increased our prices. This will directly hit our margins positively. Second, gross sales volumes in all high-margin products like Superba brands and also the new innovation products that we are about to commercialize. And finally, reduce costs and improve production volumes to take unit costs down. This will build up our operational leverage that can be unlocked through higher sales. We have significant investments behind us. Over the last 10 years, we have spent more than $700 million investing in our operational assets, including the Houston facility and the harvesting fleet, lastly, now also with provider being delivered earlier this year. We have built a well functional production rig that is fit for the future and with sufficient capacity for the planned growth that we have. Going forward, our main investments will be related to innovation products coming to market as well as maintenance CapEx related to our operational assets of $15 million to $20 million per year. In addition, we remain opportunistic to further investments. We are looking into different options for securing additional protein capacity beyond the launch plant that we will build later this year. And we are also exploring ESG investments for our harvesting fleet. We are and will continue to considering M&A opportunities. We have been quite active in the space, acquiring both Superba business as well as the private label business line in 2019. And this is probably also the segment where it will most likely be more M&A activity going forward being namely in the brand segment. So going back to the operational leverage. We do mention that quite a few times, and we have tried to illustrate what that means for Aker BioMarine. Put short, operational leverage is the rate where your profit outgrows your revenue. And that basically means if you are able to increase your production volumes at stable or even lower cost base, your unit cost will decline. A decline in unit cost means a lower COGS when the product is sold, which translates into a higher gross margin for your products. So when sales increase, your EBITDA will grow at a faster rate. Looking at the graph on this page, you see how this has played out for Aker BioMarine in 2 different phases. Already in 2017, fueled by strong revenue growth, we were able to unlock operational leverage. However, with a year, we declined sales like 2021 and a high fixed cost base. This goes against us and negatively affects the EBITDA. But with the operational targets that we now have in our plans, we expect the operational leverage to build up going forward. And in 2025, we will have an operational leverage rate of 2, meaning that the EBITDA growth is twice the revenue growth. A key driver of operational leverage is unit costs. As explained on the last page, the ability to both increase production and reduce cost significantly drives down unit cost. On this page, you see the development for our offshore and onshore production facilities. On the left side of the page, we see the offshore development. Production volumes have increased year-over-year. But in 2019, we took delivery of Antarctic Endurance, our new harvesting vessel that came with additional costs, but not the performance we expected for the first 2 years. This led to an increase in unit costs. But now going forward, with the expected harvesting levels, we expect this to come back down to more attractive levels. We have also illustrated a higher harvesting case and with a high fixed cost base in offshore, this will further decline or further reduce the unit cost in offshore. On the right-hand side, we see the onshore development. This is a good example of the effect of the unit cost reduction as a result of increased production volumes. And 2021 has been a record year with the highest ever production numbers and the lowest ever unit cost. However, going forward, we see the need to curtail the Houston output temporarily to match the Superba sales as we have seen a decline in sales. This will affect the unit cost negatively for a few years until we are able to ramp up the sales and continue the downward trend on the unit cost also in Houston. Unit cost being a relative factor, we also have a strong focus on absolute cost reduction. We are working systematically and structured with cost awareness and cost savings in the organization and have implemented a cost program. In 2021, we were able to reduce the cost base with 3% compared to 2020, which, in reality, is a decrease of $10 million in cost savings as there were other cost items that went in the wrong direction, including FX, freight rates and certain customs and pool. The cost program that I mentioned on the last page was launched late 2019. We have identified 10 cost categories with dedicated cost owners continuously working to identify new initiatives and put them into our cost pipeline where they are matured and implemented. Total effect of $15 million over the course of the last 3 years in 2021 effects, where we have also included the recurring effects from 2019 and 2020. In 2021 alone, we implemented more than 50 initiatives yielding more than $10 million in cost savings. Examples include stopping all third-party manufacturing as Houston is now producing at the capacity we need, thinking outside the box with regards to freight rates, utilizing provider when idle, renegotiating major suppliers within freight, warehouse, packaging and chemicals, moving transport of our krill oil from airfreight to sea freight and restructuring our IT infrastructure, reducing number of applications and licenses. The cost program will continue into 2022. Moving over to the financial capacity building block. Our IPO in July 2020 included a private placement of $225 million. This fund were used partly to repay the Aker ASA shareholding loan of $90 million plus accrued interest and guarantee fees of another $26 million and also repaying down or paying down on our revolving credit facility of another $80 million. That brought our net interest-bearing debt down from almost $400 million down to $223 million, a reduction of 44% and increased our equity ratio up from 21% to over 50%. Post the IPO, we have incurred additional debt, mainly due to the provider delivery earlier this year, but we have maintained our equity ratio at about 50%. Combined with the refinancing with a syndicate of DNB, the Rabobank, Nordea and Eksfin, we now have a good structure, which is fit for the growth we are planning. It has more capacity. It has increased flexibility and improved terms. The structure is a sustainability-linked structure with ESG KPIs attached to the documentation. It is less complex, moving now from 7 and 10 tranches to 1 loan with 3 tranches. It increases the capacity at the parent level as opposed to trapping additional capacity in our legal subsidiaries, and it also gives us an uncommitted accordion of $100 million. The financial covenants are the same as earlier with the financial leverage and the interest ratio. But thresholds are increased to 5x for the leverage throughout the lifetime of the loan with elevated levels over the next 3 quarters. Margins have been reduced and so has also the amortization profile. We have also increased flexibility on acquisitions on indebtedness, especially on the parent level and dividends. If we look at our operational targets and current investment plan, we see a healthy deleveraging post 2022 for the company. In 2021, our leverage will be above 6. But already in 2022, we will be at a more sustainable level around 3.5. The banks have allowed for elevated levels throughout 2021 and into the beginning of 2022. To the right, we have illustrated additional debt capacity for the company at significant amounts, assuming a more sustainable leverage level of 3.5. We will remain a growth company and with no investment-grade ambitions in the medium term, we believe that this is an acceptable level. To round of, with our operational targets, as presented here, we expect to generate a healthy cash flow post 2022 in the $100 million area annually from 2025. Please bear in mind that out of the negative free cash flow in 2021, more than 50% related to growth CapEx for the provider delivery and also some investments into INVI and Lysoveta. The company will pay no taxes in a way towards 2025 with a deferred tax asset of more than $60 million, which is currently not recognized in our balance sheet. So over the next years, the company will continuously evaluate investment opportunities, but also strive to follow a favorable dividend policy for its shareholders in due course.

Thank you, Katrine. So that concludes the deep dive of Aker BioMarine. We have today showed you our targets and our plans and not the least, how we intend to achieve them. Aker BioMarine is well positioned in attractive markets for human and animal health and nutrition with a very clear sustainability profile. We're vertical integrated and have cost leadership in our supply chain and operational leverage. We're poised for growth across all the segments, where we operate and our innovation pipeline is maturing and will drive growth in the future. That strengthens our financial position. It will drive cash flow and profits going forward.