Bakkafrost P/f · OSL:BAKKA
Bakkafrost P/f — Bakkafrost — Q4 2010 Earnings Presentation
26 slides from Bakkafrost P/f's earnings presentation, Jan 21, 2011
Slide 1: Presentation Q4 2010
Presentatio on Q4 2010 CEO Regin Jacobsen CFO Teitur Samuelsen uary 21st 2011 Oslo Febru
Slide 2: Disclaimer
Disclaimer This presentation includes statements rega arding future results, which are subject to risks and uncertainties. Consequently, actuual results may differ significantly from the results indicated or implied in these statem ments. No representation or warranty (expressed oro implied) is
Slide 3: Faroe Islands
Faroe Islands 18 islands - 1,400 km2 48,650 48 650 inhabitants i h bit t (1. Jan 2010) Self-governing part of the Kingdom of Denmark Part of the Danish monetary union Key sectors (% of wage earners, 2009) Service/public admin.: ~37% Private service: ~33% Fishing industry: ~17% GDP:
Slide 4: Bakkafrost – The Largest Fish Farming Company in the Faroe Islands
Bakkafrost – The Largest Fish Farrming Company in the Faroe Islands ~75km Largest salmon farming company in the Faroe Islands ~55 % of harvest volumes (Q4 2010) ~39 % of existing licenses (01.01.2011) Vestlax was merged into Bakkafrost 1 January 2010 ~110km Produced a total of 6,493 gwt in
Slide 5: Faroe Islands: Excellent Conditions for Cost Effective Farming
Faroe Islands: Excellent Conditions for Cost Effe ective Farming Faroese fjords j provide p separation p between n locations Geography Average Seawater Temperatures 2002-2008 Improves biological control and area mana agement Faroe Islands Norway (Trøndelag) ºC 16 Stable seawater temperatures thro
Slide 6: Summary Q4 2010
Summary Q4 2010 Strong demand and high market prices Market Portfolio P tf li off VAP-contracts VAP t ts by b end d off Q4 above b prices i materialized t i li d ini Q4 Planned operational chan nges on track Strategy M&A’s possibilities have been b tested Strong financial position and a go
Slide 7: Strong Biological Performance
Strong Biological Performance Productivity per released smolt was 4.8 kg Productivity [kg wfe per released smolt] wfe per released smolt in 2008G 2009GE productivity is 5.4 kg wfe per released smolt for Bakkafrost The goal is to increase the productivity up to previous level above 5.5 kg wfe p
Slide 8: Strong Biological Performance
Strong Biological Performance Economic Feed Conversion Rate Economic Feed Conversion Rate was in 2008G 1.16 and is expected to be around 1.13 for 2009G. The goal is to be better than 1.10 ge 8 Pag
Slide 9: Financial Highlights
Financial Highlights Margin Significantly Improved Compared Q4 2010 Q4 2009 with Q4 2009 (NO OK) Proforma Improved performance in both regions Fa arming: North West North West West impressive improvement EB BIT* NOK/kg gwt 16.46 14.81 14.20 8.60 Ha arvested volumes 1000 [gwt] 2,979 3,514 4,626
Slide 10: Key Financials, Group
Key Financials, Group Q4 2010 2009 Strong Cash flow in Q4 2010 used to (DK KKm) Proforma finance: Ca ash flow from operations 44 298 Biomass To otal assets 1,184 1,004 Seasonable Increased production NIIBD 70 251 Eq quity ratio 76% 57% Investments To increase capacity Reduce debt Div
Slide 11: Segment Information
SEGMENT INFORMATION At the southern foot of the 703 m high mountain, Suður á Nakki, lies one of Bakka afrost’s salmon farms (A-12) There are two settlements on the island of Kunoy: Kunoy (population 64), on the west w coast and Haraldssund on the south-east coast (can be seen on the picture). These
Slide 12: Segments Farming
Segments Farming Revenues increased 11% despite Q4 2010 Q4 2009 (DKKm) Proforma 27% reduced volume in Q4 2010 compared with Q4 2009 High prices on salmon in Operatin ng revenues 236 213 Q4 2010 Operatio onal EBIT* 92 50 Operatio onal EBIT margin 38.9% 23.5% * EBIT aligned for fair value adjustme
Slide 13: Farming - Operational Performance
Farming - Operational Performance High margin Gap between North and West reduced Margin doubled from 2009 to 2010 Increased quantity from 2011 expected to improve operational performance No trout left in West * Aligned for fair value adjustment of biomass, onerous contracts provisions and
Slide 14: Farming - Harvest Volume [1,000 tonnes gwt]
Farming - Harvest Volume [1,000 tonnes gwt] Q4 Q4 [tonnes gwt] 2010 2009 2010 2009 Harvested volume West 3,514 4,316 7,792 11,970 27% reduction in Q4 2010 compared with North 2,979 4,626 13,834 18,680 Q4 2009 Total 6 493 6,493 8 942 8,942 21 626 21,626 30 650 30,650 Smolt release in 2010 above
Slide 15: Strong Expected Volume Growth in Existing Licenses
Strong Expected Volume Growth in Existing Licenses Smolt Release (million) 8.2 7.5 6.3 6.3 +56% 0.3 3.0 5.5 5.5 5.3 5.3 Increased smolt release in 2010 from 7.0 million to 8.2 1,4 2.1 41 4.1 1,4 million (guidance 7.9 at Q3 presentation) 0.8 0.7 Released 56% more smolt in 2010 than 2008 No absolut
Slide 16: Segments VAP
Segments VAP Q4 2010 Q4 2009 (DKKm) Proforma Improved prices for end products, but not fully compensated t d iincreased d raw material t i l prices i Operating revenues 120 131 Operational EBIT* -1 30 ~70% of VAP capacity for 2011 contracted Further increase in contract prices in 2011 compared
Slide 17: Group Financials
Cape Enniberg is the northernmost point of the Faroe Islands, located on the Islan nd of Viðoy. It is 754 m above sea level, altitude that makes it the second highest sea-cliff in Europe (after Hornelen, in Norway). From the landside, only experienced mountain climbers with a trained local guide e s
Slide 18: Group Profit and Loss
Group Profit and Loss Q4 Q4 2009 2009 2010 Proforma 2010 Proforma (DKKm) Revenues decreased by 5% Operating p g revenuess 252.5 264.3 820.2 921.7 but volumes decreased by Purchase of goods -95.1 -37.7 -301.4 -272.6 27% - strong market in Q4 Change in inventoryy and biological assets (at cost) 27.8
Slide 19: Balance Sheet – as per 31 December 2010
Balance Sheet – as per 31 Decem mber 2010 31 Dec. End 2010 2009 (DKKm) Proforma 136.2 136.2 Invesments in PPE to carry out the organic Intangible assets growth Property, plant and equipment 356.4 331.1 Financial assets 26.0 16.4 Longg term receivables 0.7 0.7 Building up biomass as planned Biolo
Slide 20: Cash Flow – for Q4 2010
Cash Flow – for Q4 2010 Q4 2009 2010 2010 Proforma (DKKm) Cash flow used to build up biomass to new level Operating profit 132.5 315.6 239.3 and to investments in Q4 2010 Cash flow from operations 44.1 195.0 298.1 Cash flow from investments -21.5 -71.7 -39.6 Cash flow from financing -32.1 -149.9 -
Slide 21: Outlook
Outlook Dividend of NOK 4.10 per share will be proposed p for the AGM in April 2011 Good market opportunities expected als so in 2011 Portifolio of VAP-contracts by end of Q4 4 2010 on a higher level than prices materialized in Q4 2010 30% of total volume for 2011 committed on contracts Bu
Slide 22: Appendix
Appendix At the western foot of the 844 m high mountain, Villingadalsfjall, lies one of Bakkafrost’s salmon farms (A-73) Page e 22
Slide 23: Largest Shareholders
Largest Shareholders 20 largest shareholders SalMar ASA, Norway NOR 23,29% Share price development since listing [% value change] Havsbrún P/F, Faroes FRO 16,71% Jacobsen, Hans, Faroes FRO 9,40% Jacobsen, Jóhan Regin, Faroes FRO 9,19% Danske Bank a/s a/s, NOM, NOM Denmark DNK 4,84% JPMorgan Chase Ba
Slide 24: Excellent Conditions for Farming
Excellent Conditions for Farming Stable sea Temperature Sea Temperature Faroe Islands The temperature in 2010 is 0.4 degrees lower on average than 2009 temperature and d 0.15 0 15 d degrees llower than th average temperature in the period 2003-2009. In December the temperature was 0.61 degrees lower
Slide 25: Farming Industry Significant Importance for Faroese Economy
Farming Industry Significant Imp portance for Faroese Economy The farming industry Salm mon Export [% of Total Faroese Export] stabilizes the export of the F Faroe Islands I l d Conventional export reduced 15% from 3,370 mio DKK to 2,884 mio DKK in the period 2007-2010 Export of farmed fish in
Slide 26: Page e 26
The ‘North Islands’ Viðoy, Borðoy and Kallsoy faced in the picture. Eysturoy and Streymoy can bee seen in the horizon Page e 26