Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Bakkafrost — Q2 2012 Earnings Presentation

34 slides from Bakkafrost P/f's earnings presentation, Aug 14, 2012

  1. Slide 1: Presentation Q2 2012

    PRESENTATION Q2 2012 CEO Regin Jacobsen / CFO Teitur Samuelsen Oslo August 14th 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 Q2 2012

     SUMMARY OF Q2 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  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 back to Viking times, but it was no

  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 (Q2 2012)  50% of farming licenses  Harvested 10,219 gwt in Q2 2012 (8,092 gwt in Q2 2011) ~110km  Feed sale of 20,762 tonnes in Q2 2012 (17,631 gwt i

  5. Slide 5: Summary Q2 2012

    SUMMARY Q2 2012  The market had a strong demand in the period despite approx. 30% increase in world supply  Improved operational EBIT by 30% from 60.0 million DKK in Q1 2012 to 77.7 million in Q2 2012  Combined Farming/VAP EBIT/kg of NOK 7.8 (Q2 2011: NOK 16.5)  Farming EBIT/kg NOK 6.7 (Q2 2011:

  6. Slide 6: 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

  7. Slide 7: Market & Sales

    MARKET & SALES Well balanced market situation in Q2 2012 Market share Q2 Q2 by value 2012 2011 2011 2010  The strong demand from Eastern Europe and Far East continues in Q2 2012 with a total share of 32%, an EU 54% 62% 60% 71% increase of 1% compared to Q1 2012 and an increase US 14% 26% 23% 15% of

  8. Slide 8: Global Markets

    GLOBAL MARKETS Spot prices on fresh salmon 4-5 [NOK/kg HOG]  Global supply increased approx. 30% in Q2 2012 50,00 compared with previous year 45,00 40,00  Salmon price dropped 26% ~ 11 NOK/kg from 35,00 Q2 2011 to Q2 2012 30,00  Significant share of expected supply growth in 25,00 2012 has alread

  9. Slide 9: Financial Highlights

     SUMMARY OF Q2 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  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 back to Viking times, but it was no

  10. Slide 10: Financial Highlights

    FINANCIAL HIGHLIGHTS Q2 Q2 YTD YTD Satisfying results at the given price level (DKK million) 2012 2011 2012 2011 Operating revenues 416.3 314.3 816.3 554.6  Increased revenue driven by organic growth Operational EBITDA 97.4 138.0 177.2 241.1 in harvested volumes (26%) together with Operational EBIT

  11. Slide 11: Key Financials, Group

    KEY FINANCIALS, GROUP Q2 Q2  Strong cash flow from operations – due to (DKK million) 2012 2011 strong operation and decrease in working Cash flow from operations 151.1 167.8 capital Total assets* 2,329.4 2,301.8  Total assets almost unchanged – assets and liabilities in Faroe Farming still classif

  12. Slide 12: Segment Information

     SUMMARY OF Q2 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  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 back to Viking times, but it was no

  13. Slide 13: Farming – Harvest Volume

    FARMING – HARVEST VOLUME [tonnes Q2 YTD Q2 YTD Harvested volume: gwt] 2012 2012 2011 2011 2011  Increased 26,3% from 8,092 tonnes in Q2 2011 West 2,300 10,547 892 2,439 6,160 to 10,219 tonnes in Q2 2012 North 7,919 9,287 7,200 11,113 21,052  North region harvested the main quantity Viking 0 1,733

  14. Slide 14: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE (DKK million) Q2 2012 Q2 2011 Revenues and margin Operating revenues 297 290  Revenues increased in Q2 2012 compared with Q2 2011 from DKK 290 million to DKK 297 million Operational EBIT 68 126  Margin reduced from 43% in Q2 2011 to 23% in Q2 Operational EBIT marg

  15. Slide 15: Farming – Margin Development

    FARMING – MARGIN DEVELOPMENT Operational EBIT/kg [NOK]  The operational EBIT in Q2 2012 was NOK 7.78 per kg for Farming and VAP segment compared with NOK 5.42 per kg in Q1 2012  Market prices increased on average 1.83 NOK/kg compared with Q1 2012 due to strong demand 1.83  Increased downgrade in

  16. Slide 16: Segment VAP

    SEGMENT VAP Q2 2012 Q2 2011  Operational EBIT margin of 8% in Q2 2012 compared (DKK million) to 1% in Q2 2011 Operating revenues 130 138  11% increase in quantity sold from VAP Operational EBIT 11 1  Price trend up on back of new market balance Operational EBIT margin 8% 1%  Contract level incre

  17. Slide 17: Segment Fish Meal, Oil and Feed

    SEGMENT FISH MEAL, OIL AND FEED  18% increase in sold volumes in Q2 2012 compared Meal, Oil and Feed with Q2 2011  EBITDA margin reduced to 7.2% due to low season Q2 Q2 (DKK million) 2012 2011 2011  Raw material intake for fishmeal/oil production 6,486 tonnes in Q2 2012, and YTD 30,000 tonnes Ope

  18. Slide 18: Group Financials

     SUMMARY OF Q2 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK

  19. Slide 19: Group Profit and Loss

    GROUP PROFIT AND LOSS Q2 Q2 YTD YTD  Revenue up 32% (DKK 102 million) due to (DKK million) 2012 2011 2012 2011 organic growth and acquisitions Operating revenues 416.3 314.3 816.3 554.6  Harvest volumes up 26% due to organic growth Operational EBITDA 97.4 138.0 177.2 241.1  Lower salmon prices co

  20. Slide 20: Balance Sheet

    BALANCE SHEET (DKK million) Q2 2012 2011  Balance sheet impacted by classification of assets Intangible assets 293.7 370.0 and liabilities in Faroe Farming as “held for sale” Property, plant and equipment 779.6 828.5  Investments in PPE of DKK 20 million in Q2 and Financial assets 31.1 35.9 YTD DK

  21. Slide 21: Cash Flow

    CASH FLOW Solid cash flow in the quarter: Q2 Q2 YTD YTD (DKK million) 2012 2011 2012 2011 Cash flow from operations 151.1 167.8 233.1 268.6  Strong cash flow from operations in Q2 2012 due to satisfying result from the operations and reduction in Cash flow from investments -19.8 -577.9 -36.8 -598.2

  22. Slide 22: Outlook

     SUMMARY OF Q2 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK

  23. Slide 23: Outlook

    OUTLOOK  Strong demand expected from Q4 2012 and into 2013  Increased sales of VAP products – VAP capacity nearly fully booked for the remainder of 2012  Feed sales estimated unchanged at 85,000 tonnes in 2012  Total harvest for 2012 unchanged between 42,000 - 44,000 tonnes gwt ex. Faroe Farming

  24. Slide 24: Thank You!

    THANK YOU! Kunoyarnes Bakkafrosts fishfarm A-12

  25. Slide 25: 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

  26. Slide 26: Overview of Financing

    OVERVIEW OF FINANCING Financing of the Group:  Total financing of DKK 1,050 million  Instalment loan of DKK 450 million, repayable with DKK 25 million/quarter  Revolving credit facility of DKK 600 million due in 5 years  NIBD end Q2 2012: DKK 732.7 million Covenants:  NIBD/ EBITDA max 3.5 over

  27. Slide 27: Planned Investments in 2012

    PLANNED INVESTMENTS IN 2012 Investments in PPE (DKK millon) Investments in PPE is estimated at DKK 115 million in 2012, which is DKK 15 million lower than in 2011  The investments are made in:  Hatchery division  Fish meal/oil and feed  Farming division  Harvesting division and 2008 2009 2010 2

  28. Slide 28: Smolt Transfer

    SMOLT TRANSFER Smolt transfer increased 30% compared with 2010 Smolt transfer 2008 - 2012E [million pcs] The smolt transfer is planned to increase from 2010 to 2012E 14,0 by 30%. In the years 2009 – 2011 Bakkafrost increased smolt 12,0 11,6 11.0 releases to around 8 – 9 million smolt except Viking/F

  29. Slide 29: 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 following changes in the ownership regulation (Ll nr. 83 from 25 may 2009) in fish farming companies: 1. Head Quarter in the Faroe Isla

  30. Slide 30: Bakkafrost's Value Chain

    BAKKAFROST’S VALUE CHAIN BAKKAFROST / Q2 PRESENTATION 2012 Page 30

  31. Slide 31: 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

  32. Slide 32: Monthly Exchange Rates

    MONTHLY EXCHANGE RATES USD / DKK NOK / DKK JPY / DKK 620 101 7,8 600 100 7,6 580 99 7,4 560 98 7,2 540 97 7 520 96 6,8 500 95 6,6 480 94 6,4 460 93 6,2 SEK / DKK GBP / DKK RUB / DKK 88 19,5 960 87 19 940 86 920 18,5 85 84 900 18 83 880 82 17,5 860 81 840 17 80 79 820 16,5 78 800 16 BAKKAFROST / Q2 P

  33. Slide 33: 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 DANSKE BANK 3993 NORDIC SETTLEME DNK 7,98 PARETO BANK ASA NOR 4,66 JPMORGAN CHASE BANK NORDEA TREATY ACCOUN NOM GBR 3,

  34. Slide 34: Bakkafrost sponsoring the Faroe Islands National Football Team

    Bakkafrost sponsoring the Faroe Islands National Football Team Bakkafrost has signed a contract with the Faroese Football Association (FSF) covering the preliminary campaign for the 2014 FIFA World Cup. The contract is valid from 1st July 2012 to 31st December 2013 making Bakkafrost a primary sponso

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