Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Q3 2012 Earnings Presentation

36 slides from Bakkafrost P/f's earnings presentation, Nov 6, 2012

  1. Slide 1: Presentation Q3 2012

    PRESENTATION Q3 2012 CEO Regin Jacobsen / CFO Teitur Samuelsen Oslo November 6th 2012

  2. Slide 2: Disclaimer

    DISCLAIMER  This presentation includes statements regarding future  No representation or warranty (expressed or implied) is results, which are subject to risks and uncertainties. made as to, and no reliance should be placed on, the Consequently, actual results may differ significantly from fairnes

  3. Slide 3: Summary of Q3 2012

     SUMMARY OF Q3 2012  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates b

  4. Slide 4: Bakkafrost – the largest fish farming company in the Faroe Islands

    BAKKAFROST – THE LARGEST FISH FARMING COMPANY IN THE FAROE ISLANDS  Largest salmon farming company in the Faroe Islands  ~71% of harvest volumes (Q3 2012)  50% of farming licenses  Harvested 9,730 tgw in Q3 2012 (9,243 tgw in Q3 2011) ~110km  Feed sale of 30,290 tonnes in Q3 2012 (30,404 tonnes

  5. Slide 5: Summary of Q3 2012

    SUMMARY OF Q3 2012  Markets  Supply of Atlantic Salmon increased by ~ 21% in Q3 2012 compared to Q3 2011  Utilised market situation by differentiating sale to different regions Operational key figures  Improved operational EBIT by 23% from DKK 70.0 million in Q3 2011 to 86.2 million in Q3 2012 

  6. Slide 6: Markets and Sales

     SUMMARY OF Q3 2012  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates b

  7. Slide 7: Markets & Sales

    MARKETS & SALES Balanced sale to 4 large salmon markets Market share Q3 Q3 by value 2012 2011 2011 2010 EU 45% 57% 60% 71%  The strong demand from Eastern Europe and Far East US 20% 25% 23% 15% continues in Q3 2012 with a total share of 35%, an increase of 3% compared to Q2 2012 and an increase Far

  8. Slide 8: Global Markets

    GLOBAL MARKETS Spot prices on fresh salmon 4-5 [NOK/kg HOG] 50,00  Global supply increased ~28% YTD and ~21% in 45,00 Q3 2012 compared with the same period in 2011 40,00  Salmon price dropped in average 5% ~ 1.5 NOK/kg 35,00 from Q3 2011 to Q3 2012 30,00  The high increase in supply the past year

  9. Slide 9: Global supply of Atlantic salmon coming down

    GLOBAL SUPPLY OF ATLANTIC SALMON COMMING DOWN Global Globalsupply of atlantic supply salmon Salmon of Atlantic (whole fish equivalent (whole fish-wfe) equivalent –wfe)  The supply growth will be 2011E 12/11 2012E 13/12 2013E 14/13 2014E limited Norway 1.004 16% 1.167 -2% 1.149 3% 1.184 UK 157 -6% 1

  10. Slide 10: Financial Highlights

     SUMMARY OF Q3 2012  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates b

  11. Slide 11: Financial Highlights

    FINANCIAL HIGHLIGHTS Q3 Q3 YTD YTD Satisfying results at the given price level (DKK million) 2012 2011 2012 2011 Operating revenues 457.1 369.3 1,273.9 923.9  Increased revenue driven by market Operational EBITDA 106.3 92.6 283.5 333.6 optimization and organic growth in Operational EBIT 86.2 70.0 2

  12. Slide 12: Key Financials, Group

    KEY FINANCIALS, GROUP Q3 Q3  Negative cash flow from operations – due to (DKK million) 2012 2011 building up biomass, prolonged payment from Cash flow from operations -54.3 55.6 debtors and increase in receivables from associates Total assets* 2,389.9 2,301.8 NIBD* 769.5 816.8  Total assets almost

  13. Slide 13: Segment Information

     SUMMARY OF Q3 2012  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates b

  14. Slide 14: Farming – Harvest Volume

    FARMING – HARVEST VOLUME Harvested volume Q3 Q3 YTD YTD [tgw]* 2012 2011 2012 2011  Harvested volumes up by 5% from 9,243 tgw in West 2,938 2,302 15,257 3,022 Q3 2011 to 9,730 tgw in Q3 2012  North region 70% of the harvested quantity North 6,792 4,879 16,040 17,710 Smolt transfer Faroe Farming* -

  15. Slide 15: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE (DKK million) Q3 2012 Q3 2011 Revenues and margin Operating revenues 327 231  Revenues increased in Q3 2012 compared with Q3 2011 from DKK 231 million to DKK 327 million Operational EBIT 75 21  Margin increased from 9% in Q3 2011 to 23% in Q3 Operational EBIT marg

  16. Slide 16: Farming – Drivers Behind Margins

    FARMING – DRIVERS BEHIND MARGINS Normal Distribution of Harvest Size gw/Kg)  The salmon size follows a normal distribution. Increased average weight means increased quantity of large fish and decreased quantity of small fish  The average size of the harvested salmon was 30-40% 15% higher in Q3 201

  17. Slide 17: Smolt Transfer

    SMOLT TRANSFER Smolt transfer increased 30% compared with 2010 Smolt transfer 2008 - 2013E [million pcs] The smolt transfer is planned to increase from 2010 to 2012E by 30%. In 2013 the smolt release 12,0 will be slightly lower due to available sites 10,0 Smolt release can take place each month duri

  18. Slide 18: Segment VAP

    SEGMENT VAP Q3 2012 Q3 2011 (DKK million) Operating revenues 121 112  Increased revenue due to higher volumes at lower prices Operational EBIT 3 33  Operational EBIT margin narrowed to 3% in Q3 2012 Operational EBIT margin 2.5% 29.5% compared to 29% in Q3 2011, when contract prices were unchanged

  19. Slide 19: Segment Fish Meal, Oil and Feed

    SEGMENT FISH MEAL, OIL AND FEED  Q3 high season for feed sale in the Faroe Islands. Meal, Oil and Feed Feed production running at close to 100% capacity during peek period Q3 Q3  Revenue increased due to higher raw material prices (DKK million) 2012 2011 2011 in Q3 2012 compared with Q3 2011 and h

  20. Slide 20: Group Financials

     SUMMARY OF Q3 2012  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK

  21. Slide 21: Group Profit and Loss

    GROUP PROFIT AND LOSS Q3 Q3 YTD YTD  Revenue up 24% (DKK 88 million) due to: (DKK million) 2012 2011 2012 2011  Market optimization Operating revenues 457 369 1,274 924  Harvest salmon volumes up 5% due to organic growth Operational EBITDA* 106 93 283 334  Higher salmon prices and higher feed pr

  22. Slide 22: Balance Sheet

    BALANCE SHEET  Balance sheet impacted by the sale of Faroe (DKK million) Q3 2012 2011 Farming, which is not consolidated any more, but Intangible assets 294 370 an associate Property, plant and equipment 791 829  Investments in PPE of DKK 32 million in Q3 and 84 36 Financial assets YTD DKK 69 mill

  23. Slide 23: Cash Flow

    CASH FLOW Cash flow impacted by seasonal growth Q3 Q3 YTD YTD (DKK million) 2012 2011 2012 2011 Cash flow from operations -54.3 55.6 178.8 323.2  Seasonal high growth leads to negative CF from Cash flow from investments 14.6 -657.6 -22.2 -696.4 operations, combined with increase in receivables (pro

  24. Slide 24: Net Interest-Bearing Debt (NIBD)

    NET INTEREST-BEARING DEBT (NIBD) Financing of the Group NIBD and available funding  Total financing of DKK 978 million 1.200  Instalment loan of DKK 425 million, repayable with DKK 25 million/quarter 1.000  Revolving credit facility of DKK 553 million due in 5 years  All financing in DKK  NIBD

  25. Slide 25: Dividend

    DIVIDEND  Dividend policy: Dividend history Q3  Competitive return through: 2012 2011 2010  Dividends Dividend (DKK mill.) - 48 191  Increase in the value of the equity DPS (DKK) - 1.00 3.91 Adj. EPS** (DKK) - 4.90 2.64  Generally, the company shall pay dividends to its shareholders Equity rati

  26. Slide 26: Investments

     SUMMARY OF Q3 2012  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK

  27. Slide 27: Planned Investments in 2012 and 2013

    PLANNED INVESTMENTS IN 2012 AND 2013 Investments in PPE (DKK millon) Unchanged forecast on investments in PPE 200  Investments in 2012 at DKK 115 million and 150 increased investments in 2013 to DKK 170  The investments are made in: 100  Hatchery division 50  Fish meal/oil and feed 0 2008 2009 2

  28. Slide 28: Outlook

     SUMMARY OF Q3 2012  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK

  29. Slide 29: Outlook

    OUTLOOK  Good market outlook for Bakkafrost’s products  Q4 2012 expected to be the point, where the marked tips over to be for the benefit of the supply side  Estimated harvest increase by 2,000 tonnes gwt to 45,000 tonnes gwt ex. Faroe Farming  Expected harvest 2013 on same level as in 2012  A

  30. Slide 30: Thank you!

    THANK YOU! Kunoyarnes Bakkafrosts fishfarm A-12

  31. Slide 31: Faroe Islands

    FAROE ISLANDS  18 islands – 1,387 km2  48,285 inhabitants (March 1st 2012)  Home rule – within the Kingdom of Denmark  Head of State: Queen Margrethe II  Head of Government: Prime Minister Kaj Leo Johannesen  Part of the Danish monetary union, Danish krone (DKK)  Key sectors (% of wage earner

  32. Slide 32: Law proposal to change ownership regulation in Faroese fish farming companies

    LAW PROPOSAL TO CHANGE OWNERSHIP REGULATION IN FAROESE FISH FARMING COMPANIES On August 9th 2012 the Minister of Industry proposed to the Faroese Parliament to make the following changes in the ownership regulation (Ll nr. 83 from 25 May 2009) in fish farming companies: 1. Head Quarter in the Faroe

  33. Slide 33: Faroe Islands – excellent conditions for cost effective farming

    FAROE ISLANDS – EXCELLENT CONDITIONS FOR COST EFFECTIVE FARMING Average Seawater Temperatures 2003-2009  Faroese fjords provide separation between locations ºC Faroe Islands Norway (Trøndelag) GEOGRAPHY 16  Improves biological control and area management 14 12  Stable seawater temperatures throug

  34. Slide 34: Bakkafrost – acquisition and divestment of Faroe Farming

    BAKKAFROST – ACQUISITION AND DIVESTMENT OF FAROE FARMING  Background  Prior to Q1 2012 transaction, Bakkafrost controlled ~57 % of farming licenses (July 1st 2011) in the Faroe Islands  Maximum control 50% of licenses according to Faroese law  Acquired the non-controlling interests (21.93%) in F

  35. Slide 35: Monthly exchange rates USD / DKK

    MONTHLY EXCHANGE RATES USD / DKK 620 600 580 560 540 520 500 480 460 BAKKAFROST / Q3 PRESENTATION 2012 Page 35

  36. Slide 36: Largest shareholders

    LARGEST SHAREHOLDERS 20 largest shareholders Share price development since listing in NOK Salmar ASA NOR 25.21 Jacobsen Oddvør FRO 9.40 NOK BAKKA (OSL) Jacobsen Johan Regin FRO 9.19 UBS AG ZURICH A/C OMNIBUS-DISCLOSE NOM CHE 5.47 TF Íløgur p/f FRO 5.02 PARETO BANK ASA NOR 4.66 JPMORGAN CHASE BANK NO

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