Mowi Asa · OSL:MOWI
Mowi Asa — Q4 2021 Earnings Presentation
42 slides from Mowi Asa's earnings presentation, Feb 16, 2022
Slide 1: Q4 2021 presentation
Q4 2021 presentation CEO: Ivan Vindheim CFO: Kristian Ellingsen 16 February 2022
Slide 2: Forward looking statements
Forward looking statements This presentation may be deemed to include forward-looking statements, such as statements that relate to Mowi’s contracted volumes, goals and strategies, including strategic focus areas, salmon prices, ability to increase or vary harvest volume, production capacity, expect
Slide 3: Highlights
Highlights • Increasing prices on strong demand and lower supply growth • Q4 operational EBIT of EUR 146 million in line with trading update – tripled YoY • Blended Farming cost of EUR 4.62/kg, stable from third quarter • Harvest volumes of 115k GWT in the quarter and all time high 2021 harvest volu
Slide 4: Key financials
Key financials Mowi Group - main figures Q4 2021 Q4 2020 2021 2020 Unaudited EUR million Operational revenue and other income 1,149.9 14% 1,007.5 4,207.6 12% 3,761.4 Operational EBITDA 1) 188.3 93.6 690.3 504.6 Operational EBIT 1) 145.8 195% 49.4 522.6 55% 337.7 EBIT 156.1 38.6 633.2 183.5 Cash flow
Slide 5: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices • Prices in Q4 2021 up by 49% YoY in Europe, 42% in Miami and 20% in Seattle/Boston 9 7 8 6 7 USD per lbs (Miami and Seattle) 5 6 EUR per kg (Oslo) 5 4 4 3 3 2 2 1 1 0 0 2018 2019 2020 2021 2022 Ref. price Norway EUR (NASDAQ average superior Oslo, GWT/kg) Ref.
Slide 6: Price achievement, contract & superior share
Price achievement (1), contract & superior share 180% 160% 156% 140% 120% 120% 115% 112% 100% 103% 100% 95% 94% 80% 60% 40% 20% 0% Norwegian Scottish Chilean Canadian Q4 2020 Q4 2021 Norwegian Scottish Chilean Canadian Q4-21 Contract share 27% 75% 44% 2% Superior share 94% 95% 84% 79% 1) Starting fr
Slide 7: Operational EBIT comparison
Operational EBIT comparison • Op EBIT tripled YoY on increased spot prices Page 7
Slide 8: Norway
Norway SALMON OF NORWEGIAN ORIGIN Operational EBITEBIT Operational Salmon of Norwegian Salmon Origin of Norwegian Origin EUR million Q4 2021 Q4 2020 Q4 2020 vs Q4 Q4 2021 2021 vs Q4 2020 Operational EBIT 124.8 58.9 140 EBIT 140.2 15.6 120 Harv est v olume (GWT) 71 103 78 473 100 Operational EBIT per
Slide 9: Norway: Operational EBIT/kg per region
Norway: Operational EBIT/kg per region 2.5 2.37 New farming structure from Q4-21 2.0 1.76 1.68 EUR per kg 1.5 1.29 (PO 7-12) 1.09 1.15 1.0 0.75 0.49 0.40 0.5 0.32 0.0 South West Mid North Total (PO 6) Q4 2020 Q4 2021 • Region North: Very low cost. Good biological performance. 99k GWT in 2021 FY (PO
Slide 10: Norway: Sales contract portfolio
Norway: Sales contract portfolio 20,000 18,000 16,000 Contracted volumes (GWT) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Realised contract volumes Contracted volumes (including prospects) • Contract share 2021 of 24% • Contracts on the low side al
Slide 11: Scotland
Scotland SALMON OF SCOTTISH ORIGIN Operational OperationalEBIT EBITSalmon Salmon of of Scottish Origin Scottish Origin EUR million Q4 2021 Q4 2020 Q4Q42020 2021vs vsQ4 Q4 2021 2020 Operational EBIT 7.3 20.4 30 EBIT 13.7 24.5 25 Harv est v olume (GWT) 12 002 13 018 20 Operational EBIT per kg (EUR) 0.
Slide 12: Chile
Chile SALMON OF CHILEAN ORIGIN Operational EBIT Operational Salmon EBIT Salmonof ofChilean Origin Chilean Origin EUR million Q4 2021 Q4 2020 Q4 2021 vs Q4 Q4 2020 vs Q4 20212020 Operational EBIT 10.6 -9.9 25 20 EBIT 18.1 52.7 15 Harv est v olume (GWT) 16 480 20 130 10 Operational EBIT per kg (EUR) 0
Slide 13: Canada
Canada SALMON OF CANADIAN ORIGIN Operational EBITEBIT Operational Salmon of Canadian Salmon Origin of Canadian Origin EUR million Q4 2021 Q4 2020 Q4 Q4 2020 vs Q4 2021 2021 vs Q4 2020 Operational EBIT 0.4 -14.1 5 EBIT -2.2 -43.1 0 Harv est v olume (GWT) 10 110 12 417 Operational EBIT per kg (EUR) 0.
Slide 14: Ireland and Faroes
Ireland and Faroes SALMON OF IRISH ORIGIN SALMON OF FAROESE ORIGIN EUR million Q4 2021 Q4 2020 EUR million Q4 2021 Q4 2020 Operational EBIT 1.5 3.1 Operational EBIT 5.3 -1.1 EBIT -4.4 4.8 EBIT 4.6 -0.6 Harv est v olume (GWT) 1 568 1 189 Harv est v olume (GWT) 3 777 1 408 Operational EBIT per kg (EUR
Slide 15: Consumer Products
Consumer Products CONSUMER PRODUCTS EUR million Q4 2021 Q4 2020 • Yet another strong quarter with record-high Operating rev enues 785.5 705.9 full-year earnings and volumes of EUR 96m Operational EBIT 25.6 34.8 and 248k tonnes product weight, Operational EBI T % 3.3% 4.9% respectively Operational EB
Slide 16: Feed
Norway Feed FEED EUR million Q4 2021 Q4 2020 Operating rev enues 212.8 194.7 Operational EBIT 7.9 13.7 Operational EBI T % 3.7% 7.0% EBIT 6.3 13.6 Feed sold v olume 140 954 153 466 Feed produced v olume 137 327 153 181 • Stable and high production during the Scotland quarter in a challenging sourcin
Slide 17: Financials, Markets and Harvest volumes
Q4 2021 presentation Financials, Markets and Harvest volumes
Slide 18: Profit and Loss
Profit and Loss Mowi Group Q4 2021 Q4 2020 2021 2020 EUR million Operational revenue and other income 1,149.9 14% 1,007.5 4,207.6 12% 3,761.4 • Positive net fair value Operational EBIT 1) 145.8 195% 49.4 522.6 55% 337.7 adjustment of biomass of EUR Change in unrealized internal margin -6.2 -0.6 6.6
Slide 19: Financial position
Financial position Mowi Group EUR million 31.12.2021 30.09.2021 31.12.2020 • Strong financial position Non-current assets 3 542.2 3 403.0 3 337.3 Current assets 2 717.6 2 457.3 2 448.7 Assets held for sale 0.0 0.0 60.0 Total assets 6 259.5 5 860.3 5 846.1 Equity 3 155.6 3 053.5 2 764.1 Non-current l
Slide 20: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Mowi Group Q4 2021 Q4 2020 2021 2020 EUR million • Good cash flow NIBD beginning of period* -1 148.6 -1 458.9 -1 458.4 -1 337.2 Operational EBITDA* 188.3 93.6 690.3 504.6 • Seasonal tie-up of Change in working capital -122.1 -0.3 -26.8 -56.9 working capital ma
Slide 21: 2022 Cash Flow Guidance
2022 Cash Flow Guidance • Working capital build-up EUR ~90m – Support further organic growth across the value chain • Capital expenditure EUR ~300m. Pandemic induced delays of EUR 25m carried forward from 2021 – Freshwater investments EUR ~ 80m – Seawater investments EUR ~ 50m – Processing / Sales &
Slide 22: Underlying cost pressure in Farming offset by cost cut initiatives
Underlying cost pressure in Farming offset by cost cut initiatives • Farming blended cost relatively stable since 2016 Development in blended Farming cost per kg for Mowi group – CAGR 2.2% < inflation 5 4.26 4.37 4.47 – However, cost is still too high 4.00 4.16 4.12 4 • Underlying cost pressure in t
Slide 23: Initiating a new EUR 25 million cost savings programme for 2022
Initiating a new EUR 25 million cost savings programme for 2022 • Realised EUR 45 million in annualised cost savings Cost savings per year and business area (EUR million) in 2021, well ahead of the EUR 25 million target • Initiating a new EUR 25 million cost savings 102 programme for 2022 • Total co
Slide 24: Delivering on the productivity program – 1,014 FTEs so far
Delivering on the productivity program – 1,014 FTEs so far (2/3 of target) • Productivity program FTE reductions based on “as is” volumes – Salary and personnel expenses second largest cost item in Mowi; EUR 568 million in 2021 – Productivity increase of 14% 2021 vs 2019, i.e. already delivering in
Slide 25: Overview financing
Overview financing • Bank Facility: EUR 1,800m sustainability-linked facility Share of sustainable funding – Covenant: 35% equity ratio (adjusted for IFRS 16 leasing effects) – Accordion option: EUR 300m – Lenders: DNB, Nordea, ABN Amro, Rabobank, Danske Bank, SEB and Crédit Agricole • Senior unsecu
Slide 26: Supply development
Supply development Estimated volumes Compared to Q4 2020 Est. volumes Suppliers Q4 2021 Q4 2020 Volume % Q3 2021 Norway 400,900 364,800 36,100 9.9% 371,400 Scotland 35,600 40,700 -5,100 -12.5% 47,400 Faroe Islands 30,400 20,500 9,900 48.3% 21,300 Other Europe 13,200 12,500 700 5.6% 11,400 Total Euro
Slide 27: Global volume development
Global volume development Estimated volumes Compared to Q4 2020 Est. volumes 12 month comparison Markets Q4 2021 Q4 2020 Volume % Q3 2021 LTM PTM % EU+UK 325,000 311,700 13,300 4.3% 311,300 1,155,700 1,071,200 7.9% Russia 25,300 28,800 -3,500 -12.2% 16,700 85,500 79,100 8.1% Other Europe 31,800 32,8
Slide 28: Development in reference prices
Development in reference prices Q4 2021 Change vs Q4 2021 Change vs Market Q4 2020 EUR Q4 2020 Norway (1) EUR 6.04 49.3% EUR 6.04 49.3% Chile (2) USD 5.50 41.7% EUR 4.81 47.8% Chile, GWT (3) USD 6.22 65.0% EUR 5.44 72.1% Notes: (1) NASDAQ average superior GWE/kg (gutted weight equivalent) North Amer
Slide 29: Industry supply growth 2022e
Industry supply growth 2022e 2018 2019 2020 2021 2022E 2022E GWT (1,000) Norway 1,128 1,200 1,232 1,379 1,387 Low 1,372 Y/Y growth -1% High 1,402 Y/Y growth 2% • No supply growth UK Faroe Islands 137 65 171 78 160 73 179 95 180 88 176 85 -1% -10% 184 91 3% -4% expected for 2022 Other Europe* 25 36 4
Slide 30: Mowi volume guidance
Mowi volume guidance Atlantic salmon 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 2021 Q1 2022 2022 GWT (1,000) Actual Actual Actual Actual Actual Actual Guidance Guidance Norway 262.0 75.0 56.1 71.0 71.1 273.2 60.0 272.0 Scotland 52.7 18.3 19.2 15.0 12.0 64.4 11.0 65.0 Chile 64.6 19.4 15.1 14.9 16.5 66.0 1
Slide 31: Outlook
Outlook • Favourable prospects for prices on no expected supply growth the next 12 months – Kontali estimates zero supply growth in Europe and negative 2% in Americas • Mowi in a good position to capitalise on this with its diverse and integrated value chain and low contract share – Contract share d
Slide 32: Appendix
Q4 2021 presentation Appendix
Slide 33: Mowi ranked #1 on sustainability amongst food producers
Mowi ranked #1 on sustainability amongst food producers Good progress on reducing GHG emissions in 2021 (FY 2020) and ambitious long-term targets Scope 1 & 2 GHG emissions Scope 1 & 2 & 3 GHG emissions -24% -35% -72% 400 2 500 Tonnes (1,000) Tonnes (1,000) 300 2 000 1 500 200 1 000 100 500 0 0 2020
Slide 34: Ocean-based Atlantic salmon farming is on the right side of sustainability
Ocean-based Atlantic salmon farming is on the right side of sustainability Rating agencies About the rating Score (1) Salmon is the most sustainable farmed animal protein alternative Mowi ranked as the most sustainable animal protein producer in the world (amongst the 1st largest 60 animal protein p
Slide 35: Nova Sea
Nova Sea Harv est v olume (GWT) EBI T per kg (EUR) NI BD EURm Ownership % 2020 2021 Q4 2020 Q4 2021 2020 2021 Q4 2020 Q4 2021 Q4 2021 Nova Sea 48.7 % 42 584 43 539 12 590 12 260 1.60 1.80 0.95 1.92 -62.7 • Leading integrated salmon producer in Northern Norway − 33.33 wholly owned licenses − 4 partly
Slide 36: Dividend policy
Dividend policy • Mowi’s ambition is to create long-term value for the shareholder through both positive share price development and a growing dividend in line with long-term earnings − Quarterly ordinary dividend shall under normal circumstances be at least 50% of underlying earnings per share (EPS
Slide 37: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY Min hedging rate Max hedging rate (1) • Q1 2022 contract shares (% of guided volume): Norway (2) 0% 50 % Scotland 0% 75 % − Norway 31% Chile (2) 0% 50 % − Scotland 88% Canada 0% 30 % Ireland 0% 100 % − Chile 52% Faroes 0% 30 % − Canad
Slide 38: Quarterly segment overview
Quarterly segment overview SOURCES OF ORIGIN QTD EUR million Norway Scotland Chile Canada Ireland Faroes Other 1) Group OPERATIONAL EBIT FARMING 91.0 2.7 4.6 -1.3 0.7 4.3 102.0 SALES AND MARKETING Markets 8.4 2.4 1.6 1.4 0.4 0.9 0.1 15.4 Consumer Products 17.7 1.9 4.4 0.3 0.3 0.0 1.1 25.6 SUBTOTAL 1
Slide 39: YTD 2021 segment overview
YTD 2021 segment overview SOURCES OF ORIGIN YTD EUR million Norway Scotland Chile Canada Ireland Faroes Other 1) Group OPERATIONAL EBIT FARMING 292.2 56.7 17.2 -17.3 10.3 11.3 370.5 SALES AND MARKETING Markets 22.8 11.6 6.4 6.1 1.4 1.4 0.9 50.5 Consumer Products 53.6 11.1 23.4 0.9 2.7 0.0 3.8 95.5 S
Slide 40: Development in harvest volumes
Development in harvest volumes GWT 2017 2018 2019 2020 2021 2022E (1,000) Total Total Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1E Total Norway 210.2 230.5 236.9 50.5 56.6 76.5 78.5 262.0 75.0 56.1 71.0 71.1 273.2 60.0 272.0 Scotland 60.2 38.4 65.4 9.0 14.6 16.1 13.0 52.7 18.3 19.2 15.0 12.0 64.4 1
Slide 41: Cash flow guidance and historic developments
Cash flow guidance and historic developments Net capital expenditure Net working capital 350 160 Maintenance level 140 300 250 120 100 200 EUR million EUR million 80 150 60 100 40 50 20 0 0 2017 2018 2019 2020 2021E 2022E 2017 2018 2019 2020 2021 2022E Financial commitments and cost of debt (*) 60 5
Slide 42: Thank you
Thank you