New Zealand King Salmon Investments Ltd. · NZX:NZK
New Zealand King Salmon Investments — H1 2023 Earnings Presentation
25 slides from New Zealand King Salmon Investments's earnings presentation, October 2022
Slide 1: 1HY23 Half Year Financial Results
1HY23 HALF YEAR FINANCIAL RESULTS
Slide 2: Presenters
PRESENTERS Grant Rosewarne Ben Rodgers Grant Lovell Chief Executive Officer Chief Financial Officer GM Aquaculture 1 H Y 2 3 H A L F Y E A R R E S U L T S 1
Slide 3: Disclaimer
DISCLAIMER The information in this presentation has been prepared by New Zealand King Salmon Investments Limited with due care and attention. However, to the maximum extent permitted by law, neither New Zealand King Salmon Investments Limited nor any of its directors, employees, shareholders nor any
Slide 4: Executive Summary
EXECUTIVE SUMMARY • 1HY23 Net loss after tax of $24.5m, performance impacted by summer mortality with a higher mortality expense, lower harvest and a decline in biomass at sea • Pro forma EBITDA loss of $13.7m 1HY23 • Mortality has continued to improve over the cooler months (Q1 $19m v Q2 $3m) albei
Slide 5: 1HY23 Performance
01 1HY23 PERFORMANCE 1 H Y 2 3 H A L F Y E A R R E S U L T S 4
Slide 6: 1HY23 Operational Highlights
1HY23 OPERATIONAL HIGHLIGHTS 1HY23 GAAP NPAT 25.0 1HY23 15.0 REVENUE OF 2,773 20.8 $80 84.9 84.2 71.2 95.2 80.1 94.4 80.0 15.1 87.7 5.0 (5.0) (5.6) (5.6) MILLION (24.5) METRIC TONNES (15.0) 1HY19 2HY19 1HY20 2HY20 FY21 1HY22 2HY22 1HY23 HARVESTED (Dec) (Jun) (Dec) (Jun) (7m - Jan) (Jul) (Jan) (Jul)
Slide 7: Our Sustainability Developments
OUR SUSTAINABILITY DEVELOPMENTS We continue to progress on our sustainability journey: • Committed to reusable, recyclable or compostable packaging across our business - currently at 55% • Participated in annual Global Salmon Initiative (GSI) sustainability report representing members from across th
Slide 8: Keeping Our Brands Prominent
KEEPING OUR BRANDS PROMINENT Creating innovative strategies for our markets: • Connecting with our end-users through: ► Focus on engagement with Ōra King Ambassadors ► In-house digital and social media programmes for our retail and foodservice brands to maintain brand presence with relevant audience
Slide 9: Sales Performance
SALES PERFORMANCE Continuing to target branded premium markets Sales performance North America (MT) Domestic Market (MT) • Steady performance across both foodservice and retail sectors. The mortality event 1,778 1,987 1,550 in January 2022 requires NZKS to rebuild our biomass at sea, thereby restric
Slide 10: Average Sale Prices
AVERAGE SALE PRICES Branding underpins customer loyalty and value to our business New Zealand King Salmon’s core branded and differentiated business continues to attract premium pricing. Pricing for these products has remained firm. Price increases have been implemented in all markets. Large focus o
Slide 11: Fish Performance
FISH PERFORMANCE • As previously disclosed mortality in 1HY23 was elevated by the fallout from the mortality event at the end of FY22. Over the latter part of 1HY23, fish performance has returned to expected parameters. • The change to the farming model is being implemented with the fallowing of a n
Slide 12: 1HY23 Results
02 1 H Y 2 3 R E S U LT S 1 H Y 2 3 H A L F Y E A R R E S U L T S 11
Slide 13: 1HY23 Headline Financial Performance
1HY23 HEADLINE FINANCIAL PERFORMANCE Group Financial Performance GAAP Pro-Forma* NZ$000s 1HY23 1HY22 % chg. 1HY23 1HY22 % chg. Volume Sold (t) 2,886 3,669 -21% 2,886 3,669 -21% Revenue 80,033 80,095 0% 80,033 80,095 0% Gross Margin (8,045) 12,880 -162% (710) 3,790 -119% Gross Margin % -10% 16% -1% 5
Slide 14: Pro Forma EBITDA Comparison
PRO FORMA1 EBITDA COMPARISON $6.6 6.7 • Revenue has remained consistent with the prior comparable period with improvements in pricing and product mix offset by a reduction in harvest post the summer mortality • Cost of goods sold decrease from 1HY22 has been driven by the decrease in harvest volumes
Slide 15: Balance Sheet – Recapitalised and Deleveraged
BALANCE SHEET – RECAPITALISED AND DELEVERAGED Group Financial Position Jul-22 Jan-22 Following the $60.1m equity raise NZ King Salmon is now in a net cash position: NZ$000s Unaudited Audited Current Assets Cash and equivalents 19,800 2,913 Receivables 11,977 19,817 • NZ King Salmon’s net bank (debt)
Slide 16: Strategy Update & Outlook
03 S T R AT E G Y U P D AT E & OUTLOOK 1 H Y 2 3 H A L F Y E A R R E S U L T S 15
Slide 17: Strategic Initiatives - Right Sizing the Business
STRATEGIC INITIATIVES - RIGHT SIZING THE BUSINESS Initiative How we are getting there Status To mitigate mortality risk from warmer waters over summer we plan to fallow 3 of the 4 active Pelorus farms. Fallow the Pelorus sea farms At the end of July 2022, two farms have been fallowed, one is nearing
Slide 18: Market Guidance – FY23
MARKET GUIDANCE – FY23 Remain on track to deliver pro forma EBITDA guidance of a loss of $8m to $12m In confirming guidance NZ King Salmon notes: • Mortalities continue to improve post the summer months, but have tracked above plan for the first half of FY23. • This has been offset by price increase
Slide 19: Blue Endeavour Update
BLUE ENDEAVOUR UPDATE • Consent outcome is due by the end of the year • Blue Endeavour remains an important medium-term project to deliver growth to NZ King Salmon • Blue Endeavour would allow the utilisation of Pelorus licenses as nursery sites and harvest locations • Work continues on refining the
Slide 20: Appendices
04 APPENDICES 1 H Y 2 3 H A L F Y E A R R E S U L T S 19
Slide 21: Existing Sea Farm Resource Consents and Expiry
EXISTING SEA FARM RESOURCE CONSENTS AND EXPIRY • Five licenses are due for expiry or renewal at the end of 2024, all of which represent warmer, low Farms Region Expiry date Status flow licenses at lower producing sites • Crail Bay has not been farmed for around 10 years and is currently being used f
Slide 22: 1HY23 Reconciliation Between GAAP Results and Pro Forma Financials
1HY23 RECONCILIATION BETWEEN GAAP RESULTS AND PRO FORMA FINANCIALS 1HY23 Statutory Financial Fair Value IFRS 16 Lease Early FX Close- Pro Forma Statements Adjustments Adjustments outs Operating Financial NZD 000s Information Revenue 80,033 80,033 Cost of goods sold (89,921) 21,533 (977) (69,364) Fai
Slide 23: 1HY22 Reconciliation Between GAAP Results and Pro Forma Financials
1HY22 RECONCILIATION BETWEEN GAAP RESULTS AND PRO FORMA FINANCIALS 1HY22 Statutory Financial Fair Value IFRS 16 Lease Early FX Close- Pro Forma Statements Adjustments Adjustments outs Operating Financial NZD 000s Information Revenue 80,095 80,095 Cost of goods sold (86,621) 22,582 (980) (65,019) Fai
Slide 24: 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 25: Appendix – Glossary of Terms
APPENDIX – GLOSSARY OF TERMS 1HY23 Financial results for the 6 months from 1 February 2022 to 31 July 2022 2HY23 Financial results for the 6 months from 1 August 2022 to 31 January 2023 FY23 Financial results for the 12 months from 1 February 2022 to 31 January 2023 FY22 Financial results for the 12
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