Grieg Seafood Asa · OSL:GSF
Grieg Seafood Asa — Q3 2016 Earnings Presentation
35 slides from Grieg Seafood Asa's earnings presentation, Nov 11, 2016
Slide 1: Grieg Seafood ASA
Grieg Seafood ASA Andreas Kvame | CEO Atle Harald Sandtorv | CFO 11 November 2016 griegseafood.com 1
Slide 2: Agenda
Agenda • Highlights • Business Units (Regions) • Financials • Outlook griegseafood.com 2
Slide 3: Highlights Q3 2016
HIGHLIGHTS Q3 2016 griegseafood.com 3
Slide 4: Highlights Q3 2016
Highlights Q3 2016 • Good quarterly results with EBIT of MNOK 186 (EBIT per kg: NOK 13.3). • Dividend of NOK 1 per share. • The market remains strong. • EBIT per kg NOK 15.2 in Norway. o Fixed price contracts accounted for 47%. o Good and stable biological situation. • EBIT per kg NOK 4.0 in BC. o A
Slide 5: Financial highlights Q3 2016
Financial highlights Q3 2016 Q3 2016 Q3 2015 YTD 2016 YTD 2015 Total operating income (TNOK) 1 552 764 1 244 577 4 534 413 3 449 057 EBITDA (TNOK) 230 894 47 391 839 622 174 404 EBIT before fair value adj. (TNOK) 185 554 -44 346 711 630 4 624 EBIT / kg (NOK) 13,34 -2,28 16,24 0,09 Harvest volume (to
Slide 6: Business Units (Regions)
BUSINESS UNITS (REGIONS) griegseafood.com 6
Slide 7: Business units performance – Q3 2016
Business units performance – Q3 2016 EBIT before biomass adjustment/KG gwt Shetland 2015: Write-down VAP MNOK 50 not included. griegseafood.com 7
Slide 8: Business units performance – YTD 2016
Business units performance – YTD 2016 EBIT before biomass adjustment/KG gwt Shetland 2015: Write-down VAP MNOK 50 not included. griegseafood.com 8
Slide 9: GSF Rogaland
GSF Rogaland Q3 2016 Q3 2015 YTD 2016 YTD 2015 • Low harvest volume impacting costs per kg negatively. Harvest (gwt) 2 332 1 806 12 600 11 523 Sales revenues 133 346 79 085 769 285 482 170 • Harvest volume Q4 increasing, EBIT 44 886 7 748 289 702 45 661 resulting normalised cost. EBIT/kg 19,2 4,3 23
Slide 10: GSF Finnmark
GSF Finnmark Q3 2016 Q3 2015 YTD 2016 YTD 2015 • Low harvest volume impacting Harvest (gwt) 4 504 7 802 12 767 14 134 costs per kg negatively. Sales revenues 230 767 319 862 663 313 559 303 • No harvesting in July lowering EBIT 59 348 47 223 202 814 66 283 achieved price for Q3 by NOK 4 per kg. EBIT
Slide 11: GSF BC (Canada)
GSF BC (Canada) Q3 2016 Q3 2015 YTD 2016 YTD 2015 • Algae causing weak feeding and low fish growth. Harvest (gwt) 2 536 4 470 8 797 12 066 Sales revenues 147 569 176 821 496 425 461 150 – Write-down due to mortality of MNOK EBIT 10 175 -27 547 67 159 -9 116 13 (NOK 5 per kilo), resulting high cost f
Slide 12: GSF Shetland
GSF Shetland • Algae, AGD and sea lice causing Q3 2016 Q3 2015 YTD 2016 YTD 2015 increasing costs this quarter (Q3 is normally the most challenging Harvest (gwt) 4 539 5 401 9 644 12 396 production period in Shetland). Sales revenues 283 188 243 324 619 775 581 056 EBIT 72 219 -13 600 142 222 -46 64
Slide 13: Sites to be used 18 months cycle plan (Shetland)
Sites to be used 18 months cycle plan (Shetland) Setterness To become inactive New sites to become active Whalsay Hamar Sullom Voe site applications Wadbister Gonfirth Freshwater Processing / HQ Isle of Skye Scalloway Mainland griegseafood.com 13
Slide 14: Ocean Quality (GSF 60%, Bremnes 40%)
Ocean Quality (GSF 60%, Bremnes 40%) • Increasing margins and good performance in Norway. • Moving closer to end-customer. Norway: griegseafood.com 14
Slide 15: Financials
Financials griegseafood.com 15
Slide 16: Profit and Loss
Profit and Loss All figures in NOK 1,000 Q3 2016 Q3 2015 YTD 2016 YTD 2015 Total operating income 1 552 764 1 244 577 4 534 413 3 449 057 EBITDA 230 894 47 391 839 622 174 404 Depreciation and amortisation -45 340 -91 738 -127 991 -169 780 EBIT before biomass adj 185 554 -44 346 711 630 4 624 Fair v
Slide 17: Net financial
Net financial All figures in NOK 1,000 Q3 2016 Q3 2015 YTD 2016 YTD 2015 Changes in fair value from hedging instruments 5 037 -8 267 7 485 1 527 Net financial interest -14 226 -34 039 -65 153 -81 895 Net currency gain (losses) -29 923 14 252 -76 917 28 028 Net other financial expenses/-income -3 442
Slide 18: Investments
Investments Maintenance level griegseafood.com 18
Slide 19: Cash Flow
Cash Flow Q3 2016 Q3 2015 YTD 2016 YTD 2015 Cash - opening balance 370 726 240 494 392 020 181 498 EBITDA 230 894 47 391 839 622 174 404 Inventory, trade payables and trade receivables -28 491 126 724 -295 026 224 111 Other adjustments -73 866 1 261 -103 683 -18 413 Cash flow from operations 128 537
Slide 20: Net Interest Bearing Debt/EBITDA
Net Interest Bearing Debt/EBITDA NIBD NIBD/EBITDA (excl. factoring) (according to covenants) griegseafood.com 20
Slide 21: NIBD
NIBD MNOK Q3 2016 Q3 2015 Term Loan 1 098 788 Revolving Credit 100 350 Bond 0 400 Leasing 312 322 Other interest bearing debt 4 12 Cash - closing balance -199 -309 NIBD excl factoring 1 314 1 562 Factoring 382 183 griegseafood.com 21
Slide 22: Balance sheet 1
Balance sheet 1 ASSETS 30.09.16 30.09.15 Goodw ill 108 360 109 724 Licenses 1 050 646 1 086 571 Other intangible assets 17 241 17 573 Property, plant and equipment 1 452 645 1 499 340 Investments in associated and joint venture companies 14 603 25 187 Other non-current assets 5 193 5 293 Total non-c
Slide 23: Balance sheet 2
Balance sheet 2 EQUITY AND LIABILITIES 30.09.16 30.09.15 Share capital 446 648 446 648 Treasury Shares -5 000 -5 000 Retained earnings and other equity 2 300 621 1 637 659 Total equity 2 742 269 2 079 307 Deferred tax liabilities 706 845 550 971 Pension- and other obligations 10 932 1 435 Subordinat
Slide 24: Key financial indicators
Key financial indicators Q3 2016 Q3 2015 YTD 2016 YTD 2015 EBITDA-margin before adj FV 15 % 4% 19 % 5% EBIT-margin before adj FV 12 % -4 % 16 % 0% NIBD/EBITDA before adj FV 1,5 4,5 1,5 4,5 ROCE before adj FV 21 % -5 % 26 % 0% Equity ratio 45 % 38 % 45 % 38 % Equity ratio excluding OQ (bank covenants
Slide 25: Outlook
OUTLOOK griegseafood.com 25
Slide 26: Harvest estimate
Harvest estimate Guiding 2016 Rogaland Finnmark BC Shetland GSF Group (1,000 tons gw e) Q1 3,8 6,3 1,3 2,2 13,6 Growth % 37 % 25 % -28 % -35 % 4% Q2 6,5 2,0 4,9 2,9 16,3 Growth % -7 % 53 % -14 % -19 % -7 % Q3 2,3 4,5 2,5 4,5 13,9 Growth % 29 % -42 % -43 % -16 % -29 % Q4 6,4 10,5 1,5 3,8 22,2 Growth
Slide 27: Supply outlook
Supply outlook Global supply growth farmed salmon (YoY): • Low expected global supply growth 2017. • Norway • 2016: -4% • 2017: +3% (1,095’ MT) • Chile • 2016: -18% • 2017: +2% (446’ MT) • North America • 2016: +5% NASDAQ (Norway) price development : • 2017: +2% (150’ MT) • UK • 2016: -3% • 2017: +6
Slide 28: Development licenses
Development licenses • Grieg Seafood ASA applies for 10 development licenses (Utviklingstillatelser) in Norway. • The concept is based on technology transfer from oil and gas industry, for use under full offshore exposure conditions • A strong team behind the development, with participation from Blu
Slide 29: Blue Farm concept
Blue Farm concept • The farm is based on concrete technology and has a diameter of 130 meters and the ring structure has a total height of 16 meters. • The construction is designed with: o Wind and wave breaker o Double torus as floater o Tension leg anchor system o Fish net, top movable down to 10
Slide 30: Outlook summary/actions GSF
Outlook summary/actions GSF • Strong market expected ahead. • Dividend of NOK 1 per share. • Aim to bring the cost level down to the industry average, or lower. • 10% annual increase in production 2017-2019. • Harvest volume 2017 of 73,000 tons (+11% vs 2016). • Expected fixed price contracts of 30%
Slide 31: Thank you !
Thank you ! griegseafood.com 31
Slide 32: Appendix
APPENDIX griegseafood.com 32
Slide 33: Share info
Share info − Number of shares • 111.7 million (after full conversion of bonds in August 2009). − Last issues: Q2 2009 • 139 MNOK new share issue. − Subordinated convertible bond issue: Q1 2009 • 100 mill. convertible at NOK 4.00 per share within 31.12.2010. • 85% converted in Q2 2009. • 15% converte
Slide 34: Shareholders
Shareholders No. shares % GRIEG HOLDINGS AS 55 801 409 49,97 % FOLKETRYGDFONDET 3 000 000 2,69 % YSTHOLMEN AS 2 928 197 2,62 % OM HOLDING AS 2 840 000 2,54 % STATE STREET BANK AND TRUST CO. 2 281 344 2,04 % SKANDINAVISKA ENSKILDA BANKEN S.A 1 561 922 1,40 % VERDIPAPIRFONDET PARETO INVESTMENT 1 526 0
Slide 35: Profit and Loss
Profit and Loss All figures in NOK 1,000 Q3 2016 Q3 2015 YTD 2016 YTD 2015 Total operating incom e 1 552 764 1 244 577 4 534 413 3 449 057 Share of profit from joint venture 0 -120 -420 7 231 Change in inventories 272 080 -68 469 336 928 -24 812 Raw materials and consumables used -1 075 644 -506 915