New Zealand King Salmon Investments Ltd. · NZX:NZK
New Zealand King Salmon Investments — FY21 Earnings Presentation
37 slides from New Zealand King Salmon Investments's earnings presentation, March 2021
Slide 1: Annual Results for the 7 Months to 31 January 2021
ANNUAL RESULTS FOR THE 7 MONTHS TO 31 JANUARY 2021
Slide 2: Highlights
01 H I G H L I G H TS ANNUAL RESULTS F Y21 2
Slide 3: Facts and Figures
FACTS AND FIGURES FY21 (7mos) REVENUE OF 4,880 $95.2 MILLION METRIC TONNES HARVESTED NZ$m 30 PRO-FORMA OPERATING EBITDA 25 DURING FY21 (7mos) 26.2 25.2 25.1 20 21.6 15 10 10.0 5 - FY17 FY18 FY19 FY20 FY21 (7 mos) 36% 2% STATUTORY NPAT 8% NZ$m 25 20 22.8 4% 15 18.0 16.1 10 11.4 5 - 7% (5) (10) (7.1)
Slide 4: FY21 Summary
FY21 SUMMARY Change in balance date to 31 January to align with summer seasonality. • FY21 therefore 7 month reporting period. • Sales volumes of 4,117 MT up 1% compared to prior 7 month period. • Revenue of $95.2m, down 6% compared to prior 7 month period. Profitability impacted by COVID-19 and rel
Slide 5: Sustainability
02 S U STA I N A B I L I T Y ANNUAL RESULTS F Y21 5
Slide 6: Operating Sustainably
OPERATING SUSTAINABLY Care for the environment is a key pillar in our business strategy – we want to minimise our footprint, whilst helping our people, our community and our stakeholders in the long-term. To independently verify our aquaculture and supply chain sustainable practices, we have committ
Slide 7: Sustainability Achievements
SUSTAINABLY ACHIEVEMENTS We continue to look to the future. • Launching a GoGreen fund for team contribution to sustainability. • Committed to 100% reusable, recyclable or compostable packaging across our business by 2025. New product development includes: ► Recyclable hotsmoke tray using post-consu
Slide 8: Financial Overview
03 03 FINANCIAL O V E RV I E W ANNUAL RESULTS F Y21 8
Slide 9: Summary Financial Information
SUMMARY FINANCIAL INFORMATION • Results impacted by: ► COVID-related expenses and clearance of excess inventory at lower prices. ► Fair value adjustments on livestock due to COVID margin impact. ► Treatment of FX close-outs. Group Financial Performance Pro-Forma* GAAP FY21 FY20 % chg. FY20 FY21 FY20
Slide 10: COVID and Other Impacts
COVID AND OTHER IMPACTS • Our results have been impacted by a number of items, primarily related to COVID. These include: ► Provisions made against frozen whole fish inventories (FY21 has Reconciliation of COVID and Other Impacts COVID and Other Impacts provision for expected loss on sale Pro Forma
Slide 11: Balance Sheet
Group Financial Position BALANCE SHEET NZ$000s Jan-21 Audited Jun-20 Audited Current Assets Cash and equivalents 3,479 7,115 Continued strong financial position. Receivables 16,186 12,777 Inventories 42,489 35,612 • Net debt of $38.8m (out of total debt facilities of $65.0m): Biological Assets 69,58
Slide 12: Capital Expenditure
CAPITAL EXPENDITURE Investment in capex slowed to preserve cash. Capital expenditure of $5.4m in the 7 months to January 2021, including: • Investment in hatchery facilities including a ‘first-feeding’ and incubation facility at Tentburn ($1.1m), with the project now nearing completion. This investm
Slide 13: Business Update
04 04 BUSINESS U P D AT E ANNUAL RESULTS F Y21 13
Slide 14: Future Farming
FUTURE FARMING This slide provides an update on future farming volumes: Farm relocation (MPI Salmon Relocation Process): • Adoption of the 2017 Panel recommendation would be unlikely to have any material impact on site capacity however it may result in modest fish performance improvements. • A revis
Slide 15: Branding Initiatives
BRANDING INITIATIVES We are creating innovative strategies for our markets: • Connecting with our end-users through: ► Launch of the Ōra King Global Ambassador Programme. ► Regal consumer research – segmenting and gap analysis. • Product innovation momentum maintained through: ► Regal Maple. ► Ōra K
Slide 16: Branding Initiatives (cont.)
BRANDING INITIATIVES (CONT.) • Continued geographical, category and channel diversification: ► Sale of Regal Fresh in the USA through a multi-store premium retailer. ► Launch of Ōra King speciality range (100g cold smoked) into high-quality Italian retail stores. ► E-commerce and new USA geographies
Slide 17: Operational Update
05 O P E R AT I O N A L U P D AT E ANNUAL RESULTS F Y21 17
Slide 18: Sales Performance
SALES PERFORMANCE Continued recovery in sales in 2021 Sale volumes display year on year increases to above pre-COVID levels: • Benefit of retail promotions continued in January. • Sales resource focussed on retail channels whilst foodservice market is impacted by implications of COVID. • Anticipate
Slide 19: Sales by Market
SALES BY MARKET Overall sales volumes in line with prior 7 month period • Demand from North America remains strong: ► Strong sale volumes to this market whilst maintaining price in a challenging environment (excluding discrete disposal sales at a lower price). ► New sales channels cultivated (e.g. o
Slide 20: Fish Performance
FISH PERFORMANCE Fish performance continues to be a key focus for the business • Harvest volumes for the 7 months of 4,880 MT. • Feed Conversion Ratio consistent with results generally achieved during the second half of each calendar year. • Mortality levels impacted by higher levels of fish maturat
Slide 21: Outlook
06 O U T LO O K ANNUAL RESULTS F Y21 21
Slide 22: Forecast Volumes – FY22-FY25
FORECAST VOLUMES – FY22-FY25 Future harvest volumes continue to be impacted by consent and compliance challenges • The peak mortality for the 2020/2021 summer is now over. Whilst January Harvest Volumes (tonnes) * mortality was above-trend, mortality through the remainder of summer was ~9,100 below
Slide 23: FY22 Outlook
FY22 OUTLOOK FY22 expectations: • Return to pre-Covid momentum during FY22. • The peak mortality for the 2020/2021 summer is now over. Whilst early-Summer mortality (Dec-20 to Jan-21) was above-trend, mortality for the remainder of summer has been below-trend. • Whilst sale volumes are now running a
Slide 24: Appendices
07 APPENDICES ANNUAL RESULTS F Y21 24
Slide 25: Realignment of Data
I 02 R E A L I G N M E N T O F D ATA ANNUAL RESULTS F Y21 25
Slide 26: Change of Balance Date, and Historic Tables Realigned
CHANGE OF BALANCE DATE, AND HISTORIC TABLES REALIGNED As New Zealand King Salmon has changed its balance date to 31 January, it will report its results to the market as follows: • Interim (first half) financial results for six months to 31 July. • Full year audited financial results for year ended 3
Slide 27: Summary Financial Information
SUMMARY FINANCIAL INFORMATION Group Financial Performance Sale Prices and Exchange Rates H1 July / H2 January H1 July / H2 January NZ$000s FY21H1 FY21H2 FY2021 FY21H1 FY21H2 FY2021 Average Gross Sales Price per kg Volume Sold (MT) 2,745 3,635 6,380 Revenue 69,134 80,567 149,701 Domestic Sales NZD 25
Slide 28: Sales by Market
SALES BY MARKET H1 July / H2 January / FY February to January New Zealand (MT) North America (MT) China (MT) 79 2,365 1,279 1,187 1,179 1,301 1,987 1,550 1,550 53 109 1,970 1,686 1,055 1,033 1,177 1,047 26 15 1,597 1,205 49 22 31 FY2018 FY2019 FY2020 FY2021 FY2018 FY2019 FY2020 FY2021 FY2018 FY2019
Slide 29: Biological Performance
BIOLOGICAL PERFORMANCE Biological Performance H1 July / H2 January FY21H1 FY21H2 FY2021 Harvest Volume (MT) 3,543 4,262 7,805 Bio Feed Conversion Ratio (BFCR) 1.95 1.70 1.81 Mortality Cost $m 8.3 7.8 16.1 Closing Livestock Biomass ('000) 6,512 6,864 6,864 Feed Cost ($/kg of feed) 2.42 2.55 2.49 * Re
Slide 30: Reconciliations
II 02 R EC O N C I L I AT I O N S ANNUAL RESULTS F Y21 30
Slide 31: FY21 (7 Months) Reconciliation Between GAAP Results and Pro Forma Financials
FY21 (7 MONTHS) RECONCILIATION BETWEEN GAAP RESULTS AND PRO FORMA FINANCIALS Statutory Fair Value IFRS 16 Lease FX Close- Pro Forma FY21 Financial Adjustments Adjustments Outs Operating Statements Financial NZD 000s Information Revenue 95,239 95,239 Cost of goods sold (98,820) 36,562 (984) (63,243)
Slide 32: FY20 (12 Months) Reconciliation Between GAAP Results and Pro Forma Financials
FY20 (12 MONTHS) RECONCILIATION BETWEEN GAAP RESULTS AND PRO FORMA FINANCIALS Statutory NZ IAS-41 and NZ NZ IFRS-16 Pro Forma Financial IAS-2 Fair Value Lease Operating FY20 Statements Adjustments Adjustments Financial Information NZD 000s Revenue 155,344 155,344 Cost of goods sold (145,768) 54,705
Slide 33: Understanding Our GAAP Results
UNDERSTANDING OUR GAAP RESULTS The impact of NZ IAS-41 Agriculture, NZ IAS-2 Inventory and NZ IFRS-16 Leases Our GAAP results are impacted by Fair Value gains or losses arising from the application of NZ IAS-41 Agriculture, NZ IAS-2 Inventory and the classification of leases under NZ IFRS-16. The im
Slide 34: Glossary and Disclaimer
III 02 G LO S S A RY A N D D I S C L A I M E R ANNUAL RESULTS F Y21 34
Slide 35: Glossary of Terms
GLOSSARY OF TERMS CY21 Calendar year 2021 EBITDA Earnings before interest, tax, depreciation and amortisation FCR Feed Conversion Ratio – the amount of feed (in kilograms) required to grow 1 kilogram of fish weight FY20 Financial results for the 12 months from 1 July 2019 to 30 June 2020 FY20 (7mos)
Slide 36: Disclaimer
DISCLAIMER The information in this presentation has been prepared by New Zealand King Salmon Investments Limited with due care and attention. However, neither New Zealand King Salmon Investments Limited nor any of its directors, employees, shareholders nor any other person shall have any liability w
Slide 37: Annual Results FY21
New Zealand King Salmon ANNUAL RESULTS FY21
New Zealand King Salmon Investments — FY21 Earnings Presentation on 6ix