Andfjord Salmon Group As · OSL:ANDF
Andfjord Salmon Group As — Q1 2024 Earnings Presentation
42 slides from Andfjord Salmon Group As's earnings presentation, May 29, 2024
Slide 1: Q1 2024 Status and Progress
Q1 2024 STATUS AND PROGRESS 29 MAY 2024 NOTE: ILLUSTRATIVE GRAPHICS
Slide 2: Agenda
Q1 2024 AGENDA • ANDFJORD SALMON IN BRIEF • Quarterly highlights and subsequent events • First production cycle: New independent confirmation of strong biological conditions • Recap: “Post-smolt” strategy • Status Kvalnes build-out • Private placement: Strategic investors • Financials • Summary and
Slide 3: Building the world's most fish-friendly facility of its kind
a a © ip BUILDING THE } WORLD'S MOST. FISH-FRIENDLY Ne YG Ve ae aN TANASE eae FACILITY OF CONSCIENCE ITS KIND
Slide 4: The best of two worlds
Q1 2024 THE BEST OF TWO WORLDS 3 BENEFITS OF SEA BASED NET PEN FARMING 3 BENEFITS OF LAND BASED FARMING First pool, Kvalnes First pool, Kvalnes 1 1 NO PROBLEMS WITH NATURAL OPTIMAL SALMON LICE AND WATER TEMPERATURES POISONOUS ALGAE 2 2 OXYGEN-RICH AND NATURAL ESCAPE CLEAN ARCTIC PREVENTION SEAWATER
Slide 5: Natural Flow – Andfjord Salmon's flow-through system
JUNE 2023 NATURAL FLOW – ANDFJORD SALMON’S FLOW-THROUGH SYSTEM
Slide 6: Andfjord Salmon
PY ANDFJORD™ SALMON
Slide 7: Agenda
Q1 2024 AGENDA • Andfjord Salmon in brief • QUARTERLY HIGHLIGHTS AND SUBSEQUENT EVENTS • First production cycle: New independent confirmation of strong biological conditions • Recap: “Post-smolt” strategy • Status Kvalnes build-out • Private placement: Strategic investors • Financials • Summary and
Slide 8: Highlights Q1 and subsequent period
Q1 2024 HIGHLIGHTS Q1 AND SUBSEQUENT PERIOD BUILD-OUT INITIATED PRODUCTION FISH-FRIENDLY POST-SMOLT PRIVATE PROGRESSING AS OF POOL COMPONENTS FARMING STRATEGY PLACEMENT PLANNED Preparations for pool New Nofima report “Post-smolt” production Strategic investors Pool pit excavation production executed
Slide 9: Agenda
Q1 2024 AGENDA • Andfjord Salmon in brief • Quarterly highlights and subsequent events • FIRST PRODUCTION CYCLE: NEW INDEPENDENT CONFIRMATION OF STRONG BIOLOGICAL CONDITIONS • Recap: “Post-smolt” strategy • Status Kvalnes build-out • Private placement: Strategic investors • Financials • Summary and
Slide 10: Key figures – first production cycle
Q1 2024 KEY FIGURES – FIRST PRODUCTION CYCLE HIGH LOW FEED STRONGER LOWER ENERGY HIGH SUPERIOR SURVIVAL RATE CONVERSION GROWTH COSTS SHARE RATE 97.5% 1.05 +1 kilo 1 kWh 91.1 Industry average Industry average Extra growth Energy use per kilo Industry average = 83.3%* = 1.27** compared to produced sal
Slide 11: 2nd Nofima report: full production cycle
Q1 2024 2nd NOFIMA REPORT: FULL PRODUCTION CYCLE First report covered first six months in pool Second report covers the entire first production cycle Underlines Andfjord Salmon’s science- INPUT GROUP INDIVIDUAL BASED BASED OWIs BASED OWIs OWIs based approach to land-based fish farming • Appetite • F
Slide 12: Underlines healthy pool conditions
Q1 2023 Q3 2024 UNDERLINES HEALTHY POOL CONDITIONS ENVIRONMENTAL FACTORS • “Water current speeds, whilst low, did not manifest in poor water quality and may have been increased by the presence of fish in the system.” • “The water temperature was somewhat more stable than what would be expected at co
Slide 13: Second Nofima report emphasizes strong fish welfare/health
Q1 2024 EMPHASIZES SECOND NOFIMA STRONG REPORT FISH WELFARE/HEALTH FISH BEHAVIOUR • “Appetite as an OWI was scored according to Laksvel and has been generally been good throughout the documentation period.” • “The grouping structure of the fish in the pool was relatively consistent at both low and h
Slide 14: Agenda
Q1 2024 AGENDA • Andfjord Salmon in brief • Quarterly highlights and subsequent events • First production cycle: New independent confirmation of strong biological conditions • RECAP: “POST-SMOLT” STRATEGY • Status Kvalnes build-out • Private placement: Strategic investors • Financials • Summary and
Slide 15: This is how we will do it
Q1 2023 Q3 2024 THIS IS HOW WE WILL DO IT NOTE: SIMPLIFIED ILLUSTRATIVE EXAMPLE OF PRODUCTION CYCLE AFTER 12-15 MONTHS Salmon harwest weight: 4-6 kg AFTER 6 MONTHS AFTER 3 MONTHS Post-smolt weight: ~ 1,000 grams Smolt weight: 500 grams SMOLT RELEASE Smolt weight: 100-150 grams “Post-smolt” sold to c
Slide 16: Multiple beneficiaries
Q1 2023 Q3 2024 MULTIPLE BENEFICIARIES OCEAN-BASED FISH FARMERS THE SALMON LOCAL MARINE ENVIRONMENT • More robust fish released to sea, less • More robust fish released to sea, less • Longer production time in facilities with susceptible to diseases susceptible to diseases = enhanced fish collection
Slide 17: Supplementary post-smolt strategy increases production volume, EBIT and sustainability
Q1 2024 SUPPLEMENTARY POST-SMOLT STRATEGY INCREASES PRODUCTION VOLUME, EBIT AND SUSTAINABILITY ADDITIONAL APPROVED BY PARTNERSHIP INCREASES STRENGHTENS REVENUE STREAM AUTHORITIES IN PLACE EBIT SUSTAINABILITY Significant surplus pool Initial production plan Agreement in place with Strong fundamentals
Slide 18: Agenda
Q1 2024 AGENDA • Andfjord Salmon in brief • Quarterly highlights and subsequent events • First production cycle: New independent confirmation of strong biological conditions • Recap: “Post-smolt” strategy • STATUS KVALNES BUILD-OUT • Private placement: Strategic investors • Financials • Summary and
Slide 19: Production volume of 40,000t at Kvalnes with total potential of 90,000t
Q1 2024 PRODUCTION VOLUME OF 40,000t AT KVALNES WITH TOTAL POTENTIAL OF 90,000t Kvalnes build-out plan Expected total production capacity by stages (HOG) Comments 90 000 Tons HOG Kvalnes Pilot • Gradual ramp-up to full capacity of Added Accum. 80 000 Stage, production production 40,000 tonnes at Kva
Slide 20: Kvalnes expansion stages
4 First pool Construction start in 2026: +5,000 tonnes In operation: 1,000 tonnes Construction 2023-2025: +18,000 tonnes +4,000 tonnes license expansion 1 2 3 Construction start in 2027: +12,000 tonnes 5 (exact location to be decided) NOTE: ILLUSTRATIVE GRAPHICS
Slide 21: Status and progress: pools
Q1 2023 Q3 2024 STATUS AND PROGRESS: POOLS POOL CONSTRUCTION INITIATED • Workstream on track • Concrete elements produced by factory on site • Masses from pool pits and tunnels utilized as a raw material in concrete (ingredient). reduces the cost and is environmentally sustainable • Pool excavation
Slide 22: Status and progress: waterways
Q1 2023 Q3 2024 STATUS AND PROGRESS: WATERWAYS WATERWAYS ON TRACK • Capacity to support annual production of 40,000 tonnes (HOG) of Salmon • Workstream on track • Quality of bedrock in line with expectations
Slide 23: Key construction milestones for build-out phase at Kvalnes (8,000 t)
Q1 2024 KEY CONSTRUCTION MILESTONES FOR BUILD-OUT PHASE AT KVALNES (8,000 t) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 PLAN: EXCAVATION OF POOL PITS K1-K12 STATUS: 100% FINISHED – AHEAD OF SCHEDULE PLAN: CONCRETE WORKS: POOLS K1-K4 STATUS: 8% COMPLETION PLAN: WA
Slide 24: Agenda
Q1 2024 AGENDA • Introduction • Quarterly highlights and subsequent events • First production cycle: New independent confirmation of strong biological conditions • Recap: “Post-smolt” strategy • Status Kvalnes build-out • PRIVATE PLACEMENT: STRATEGIC INVESTORS • Financials • Summary and outlook
Slide 25: Successful private placement
Q1 2024 SUCCESSFUL PRIVATE PLACEMENT RAISED NOK 350 MILLION STRONG SUPPORT FROM LARGE INDUSTRIAL INVESTORS • Significantly oversubscribed • Lisbon-listed group with 230 years of know-how in the food business • Net proceeds used to expand production capacity at Kvalnes, • Revenue of EUR 30 billion in
Slide 26: Agenda
Q1 2024 AGENDA • Andfjord Salmon in brief • Quarterly highlights and subsequent events • First production cycle: New independent confirmation of strong biological conditions • Recap: “Post-smolt” strategy • Status Kvalnes build-out • Private placement: Strategic investors • FINANCIALS • Summary and
Slide 27: Statement of comprehensive income
Q1 2024 STATEMENT OF COMPREHENSIVE INCOME All amounts in 1,000 NOK Statement of comprehensive income Q1 2024 Q1 2023 2023 1.1-31.3 1.1-31.3 1.1 – 31.12 Unaudited Unaudited Operating income and expenses Revenue from contracts with customers 57 - 37 279 Other income - - - Total operating income 57 - 3
Slide 28: Statement of financial position
Q1 2024 STATEMENT OF FINANCIAL POSITION All amounts in 1,000 NOK Assets 31.03.2024 - Unaudited 31.12.2023 31.03.2023 - Unaudited Intangible assets 15 077 14 389 10 678 Property, plant & equipment 1 067 333 876 632 499 937 Right-of-use assets 16 243 17 640 21 278 Other non-current assets 44 113 80 To
Slide 29: Statement of financial position
Q1 2024 STATEMENT OF FINANCIAL POSITION All amounts in 1,000 NOK Equity and liabilities 31.03.2024 - Unaudited 31.12.2023 31.03.2023 - Unaudited Total equity 978 819 993 688 462 972 Borrowings 57 626 59 959 66 541 Lease liabilities 8 365 9 340 12 326 Total non-current liabilities 65 991 69 299 78 86
Slide 30: Statement of cash flows
Q1 2024 STATEMENT OF CASH FLOWS All amounts in 1,000 NOK Statement of cash flows Q1 2024 Q1 2023 2023 1.1-31.3 1.1 – 31.3 1.1 – 31.12 Unaudited Unaudited Net cash flow from operating activities -20 590 -14 297 -29 148 Net cash flow from investing activities -174 594 -13 313 -326 866 Net cash flow fr
Slide 31: Scale-up tailored for capital efficiency
Q1 2024 SCALE-UP TAILORED FOR CAPITAL EFFICIENCY Incurred costs vs estimated Kvalnes build-out plan Capital expenditure, Kvalnes phase 1 budget cost, incl. buffer Added Accum. Technical 1800 Capex (NOK, infrastructure Stage, Kvalnes production production est.) (8,000t) (HOG, est.) (HOG, est.) Waterw
Slide 32: Agenda
Q1 2024 AGENDA • Andfjord Salmon in brief • Quarterly highlights and subsequent events • First production cycle: New independent confirmation of strong biological conditions • Recap: “Post-smolt” strategy • Status Kvalnes build-out • Private placement: Strategic investors • Financials • SUMMARY AND
Slide 33: Summary and outlook
Q1 2024 SUMMARY AND OUTLOOK BUILD-OUT INITIATED PRODUCTION FISH-FRIENDLY POST-SMOLT PRIVATE PLACEMENT PROGRESSING AS OF POOL COMPONENTS FARMING STRATEGY PLANNED Strategic investors Preparations for pool New Nofima report “Post-smolt” production supporting Andfjord Pool pit excavation production exec
Slide 34: Andfjord Salmon
ma FQ snorsono™ SALMON
Slide 35: Disclaimer
Q1 2024 DISCLAIMER IMPORTANT INFORMATION This presentation (the "Presentation") has been produced by Andfjord Salmon AS (the "Company") solely for information purposes. By reading the Presentation slides or by otherwise receiving this Presentation or the information contained herein, you agree to be
Slide 36: Appendix
Q4 2023 Appendix
Slide 37: Definition: What is post-smolt?
Q4 2023 Q3 DEFINITION: WHAT IS POST-SMOLT? Post-smolt is a more robust fish, considered to be a key to further growth in the Norwegian salmon farming industry, since it provides SMOLT: POST-SMOLT: improved sustainability 100 – 150 GRAMS 400 GRAMS – 1,000 GRAMS and fish health. Smolt is salmon that w
Slide 38: A supplement to production of human grade salmon
Q1 2023 Q3 2024 A SUPPLEMENT TO PRODUCTION OF HUMAN GRADE SALMON POOL DENSITY PROFILE (KG/M3) – ILLUSTRATIVE • Estimated 15-25% increase in EBIT through combined production strategy, strategic collaboration agreed with Eidsfjord Sjøfarm/Holmøy Havbruk to realise plans • Andfjord Salmon will release
Slide 39: Additional post-smolt production
Q1 2023 Q3 2024 ADDITIONAL “POST-SMOLT” PRODUCTION POOL DENSITY PROFILE (KG/M3) – ILLUSTRATIVE PRODUCTION CYCLE Harwest weight: 4-6 kg 1,000 grams post-smolt sold to ocean farming +15 - 25% EBIT improvement potential versus human grade only. DENSITY Release of 100 – 150 grams smolt 1 1 2 2 3 3 4 4 5
Slide 40: Beneficial for local aquaculture industry
Q1 Q4 2024 2023 BENEFICIAL FOR LOCAL AQUACULTURE INDUSTRY Enhanced cooperation between ocean-based and land-based farmers = positive for regional economic development Salmon farming licenses surrounding Andfjord Salmon Active farming licenses • Andfjord Salmon benefits from the extensive expertise o
Slide 41: Benefits for Andfjord Salmon
Q1 Q4 2024 2023 BENEFITS FOR ANDFJORD SALMON OPTIMISING INFRASTRUCTURE AND REVENUE POTENTIAL • Inclusion of post-smolt production in pools • No additional infrastructure capex required • Enabling 10% higher biomass turnover FINANCIAL BENEFITS INDUSTRIAL BENEFITS • Strong fundamentals for post-smolt
Slide 42: Key drivers: the post-smolt opportunity
Q1 2023 Q3 2024 KEY DRIVERS: THE POST-SMOLT* OPPORTUNITY The combination of land and ocean-based farming is a unique opportunity for Norway and the Norwegian salmon farming industry STRONG DEMAND SUSTAINABLE BIOLOGICAL BENEFITS AVAILABLE POOL SPACE PRODUCTION Substantial demand for Ocean-based fish