Salmon Evolution Asa · OSL:SALME
Salmon Evolution Asa — Q2 2021 Earnings Presentation
31 slides from Salmon Evolution Asa's earnings presentation, Aug 19, 2021
Slide 1: Q2 2021 Presentation
Q2 2021 PRESENTATION 19 August 2021
Slide 2: Disclaimer
DISCLAIMER This presentation (the “Presentation”) has been prepared by Salmon Evolution Holding ASA (the “Company” and together with is subsidiaries, the “Group”) except where context otherwise requires, solely for information purposes. This Presentation, and the information contained herein, does n
Slide 3: Agenda
Agenda • Introduction and highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 3 Q2 2021 Presentation
Slide 4: Salmon Evolution – Extending the Ocean Potential
SALMON EVOLUTION – EXTENDING THE OCEAN POTENTIAL A Norwegian land-based salmon farming company with a goal to become a global supplier of high-quality and sustainable salmon First production facility under construction in Norway – Joint venture with Dongwon Industries for a 16,800 tonnes annual harv
Slide 5: Q2 2021 Highlights
Q2 2021 HIGHLIGHTS Q2 2021 • Construction of Phase 1 at Indre Harøy progressing according to plan – on time and on budget • Closing of first equity tranche of NOK 27.4 million in Korean JV company K Smart and signed agreement for extended feasibility study for both the smolt and grow out facility in
Slide 6: Acquisition of Kraft Laks
ACQUISITION OF KRAFT LAKS Background Kraft Laks AS – Key financials • Kraft Laks has been a family owned smolt producer NOKm 2020 2019 2018 located in Dalsfjorden in Volda municipality Revenues 27.6 30.9 26.9 • Current production of around 1.8 million smolt p.a. but license to produce 5 million smol
Slide 7: Agenda
Agenda • Introduction and highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 7 Q2 2021 Presentation
Slide 8: Conservative Approach in a "Disruptive Industry"
CONSERVATIVE APPROACH IN A “DISRUPTIVE INDUSTRY” 1 Biology is the most important consideration → Shown through our choice of technology There is much to learn, even though we have decades of experience 2 → That’s why we start in Norway International expansion can be accelerated with strong local par
Slide 9: Optimized Biology with HFS Technology
OPTIMIZED BIOLOGY WITH HFS TECHNOLOGY HYBRID FLOWTHROUGH ADVANTAGES INCREASED COMPLEXITY ABOVE 65% RECIRCULATION • No biofilters – less complexity • Proven technology used in smolt production for • Each tank functions as one decades independent biozone • Fresh seawater as • Maintenance flexibility,
Slide 10: Our Technology Extends the Ocean Potential
OUR TECHNOLOGY EXTENDS THE OCEAN POTENTIAL NEW AREAS POSSIBLE FOR LOW RISK PRODUCTION THROUGH USE OF HFS Too cold Too cold Conventional production area Conventional production area Possible with HFS Possible Possible with HFS with HFS Too warm Too warm Too warm Possible with HFS Possible with HFS Co
Slide 11: Agenda
Agenda • Introduction and highlights • Extending the ocean potential™ • Operations – Norway • Financials • Summary and outlook • Appendices 11 Q2 2021 Presentation
Slide 12: Indre Harøy Construction Progress According to Plan
INDRE HARØY CONSTRUCTION PROGRESS ACCORDING TO PLAN • Seven out of twelve fish tanks assembled, remaining fish tanks expected to be completed in Q4 • Solid progress on construction of buildings and structures • Concrete work on water intake station almost completed and water inlet pipes arrived at s
Slide 13: Seven out of twelve fish tanks assembled
• Seven out of twelve fish tanks assembled • Phase 1 at Indre Harøy will consist of 12 fish tanks each with a diameter of 28 meter and a height of 13 meter • Fully developed, Indre Harøy will consist of 48 fish tanks with a combined cubic capacity of 240,000m3 13 Q2 2021 Presentation
Slide 14: Photo taken 16th April 2021 / 8th August 2021
Photo taken 16th April 2021 Photo taken 8th August 2021 14 Q2 2021 Presentation
Slide 15: Water inlet pipes arrived at site
• Both water inlet pipes arrived at site and awaiting installation • Concrete work on water intake station almost completed • Two water inlet pipes that is 425 meter and 180 meter long, each with a diameter of 1.6m • Seawater intake at 25 and 90 meter water depth ensuring fresh and ideally tempered
Slide 16: Agenda
Agenda • Introduction and highlights • Extending the ocean potential™ • Operations – Korea • Financials • Summary and outlook • Appendices 16 Q2 2021 Presentation
Slide 17: K Smart Farming – South Korea Expansion Started
K SMART FARMING – SOUTH KOREA EXPANSION STARTED • K Smart JV with Dongwon Industries formalized end of March and Yangyang on-growing site first tranche of equity investment (NOK 27.4m) completed in May • Ownership split 49/51% for SE and Dongwon, respectively • Target construction start for phase 1
Slide 18: First Mover Advantage in South Korea – Fast Growing, High Paying Market
FIRST MOVER ADVANTAGE IN SOUTH KOREA – A FAST GROWING AND HIGH PAYING MARKET FOR SALMON WITH SOLID PRICE POTENTIAL Positioned to achieve a premium on South Korean prices Salmon demand in South Korea is growing rapidly Supply of farmed Atlantic salmon to South Korea (HOG) NOK / kg (HOG) Norway 86% In
Slide 19: K Smart – Key Figures
K SMART – KEY FIGURES Summary of estimated KPIs for the South Korean JV facility1) Item Phase 1 Phase 2 Total Dongwon to facilitate debt Capex NOK 1,400m NOK 1,300m NOK 2,700m financing of K Smart at 75% Total project cost NOK 1,600m NOK 1,500m NOK 3,100m loan to cost SE equity requirement NOK 200m
Slide 20: Agenda
Agenda • Introduction and highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 20 Q2 2021 Presentation
Slide 21: Fully Funded for Committed Projects
FULLY FUNDED FOR COMMITTED PROJECTS Total funding Total uses 100 525 1 670 1 985 1 360 200 Raised equity Long term debt Overdraft Total funding Indre Harøy K Smart Extra buffer facility funding need incl. cash buffer and WC 21 Q2 2021 Presentation
Slide 22: Profit & Loss
PROFIT & LOSS Summary of result (figures in NOK 1000) Q2 2021 Q2 2020 YTD 2021 YTD 2020 2020 • Board remuneration expensed in 2q under personnel expenses Total operating income 0 0 0 30 704 • One-off costs relating to OSE listing, debt Personnel expenses -6 001 -1 370 -8 726 -2 478 -8 877 financing
Slide 23: Capex Indre Harøy
CAPEX INDRE HARØY Accumulated CAPEX Q2 20211 • On time and on budget (NOK million) • Increased capex over the last quarters on Capitalized internal G&A 506 back of solid progress on site Investments (Indre Harøya) Land • Total CAPEX of NOK 171.8 million in Q2 334 • NOK 168.0 million related to turnk
Slide 24: High Activity Level on Site
HIGH ACTIVITY LEVEL ON SITE Capex plan for Phase 11 (NOK million) • High activity level at Indre Harøy for the remaining of the year 220 223 • Completion of concrete works for buildings, structures and fish tanks 108 110 • Installation of process equipment and above- ground piping 74 56 • Capex expe
Slide 25: Agenda
Agenda • Introduction and highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 25 Q2 2021 Presentation
Slide 26: Roadmap to 70,000 Tonnes HOG
ROADMAP TO 70,000 TONNES HOG 2020 2022 2024 2028 2030 NORWAY Phase 1 Phase 2 Phase 3 Norway expansion 7.9kt 7.9kt 15.7kt 20kt 50kt 31.5kt Indre Harøy based on current licenses ASIA South Korea South Korea phase 1 phase 2 + 8.4kt 8.4kt 20kt+ Further expansion possible with local partners TOTAL 70kt+
Slide 27: Summary & Outlook
SUMMARY & OUTLOOK • Construction of facility at Indre Harøy progressing according to plan – on time and on budget • International ambitions – JV with Dongwon formalized, with target construction start during 2022 • Global demand growth for salmon expected to continue • Salmon Evolution’s HFS technol
Slide 28: Next Event – Q&A
NEXT EVENT Q3 2021 16 NOVEMBER 2021 Q&A www.salmonevolution.no 28 Q2 2021 Presentation
Slide 29: Agenda
Agenda • Introduction and highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 29 Q2 2021 Presentation
Slide 30: Debt Financing Package at Highly Competitive Terms
DEBT FINANCING PACKAGE AT HIGHLY COMPETITIVE TERMS Summary of bank debt term sheet • Nordea and Sparebanken Vest (the “Lenders”) Lenders • Innovation Norway • NOK 525 million senior secured credit facility which will be used to finance construction capex for Indre Harøy phase 1 (the “Construction Fa
Slide 31: Cash Flow
CASH FLOW Cash flow summary (figures in NOK 1000) Q2 2021 Q2 2020 YTD 2021 YTD 2020 2020 Net cash flow from operating activities -23 548 -3 226 -35 363 -7 356 -10 021 Net cash flow from investments activities -119 484 -57 980 -219 580 -68 245 -165 961 Net cash flow from financing activities -4 213 2