Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Bakkafrost — Q3 2011 Earnings Presentation

32 slides from Bakkafrost P/f's earnings presentation, Nov 7, 2011

  1. Slide 1: Presentation Q3 2011

    PRESENTATION Q3 2011 CEO Regin Jacobsen / CFO Teitur Samuelsen Oslo November 7th 2011

  2. Slide 2: Disclaimer

    DISCLAIMER  This presentation includes statements regarding future  No representation or warranty (expressed or implied) is results, which are subject to risks and uncertainties. made as to, and no reliance should be placed on, the Consequently, actual results may differ significantly from fairnes

  3. Slide 3: Agenda

    AGENDA  Summary of Q3 2011  Financial Highlights  Segment Information  Group Financials  Outlook BAKKAFROST / Q3 PRESENTATION 2011 Page 3

  4. Slide 4: Bakkafrost – the largest fish farming company in the Faroe Islands

    BAKKAFROST – THE LARGEST FISH FARMING COMPANY IN THE FAROE ISLANDS  Largest salmon farming company in the Faroe Islands ~75km  ~80 % of harvest volumes (Q3 2011)  ~57 % of farming licenses (01.07.2011)  Havsbrún included in P&L from 1st July 2011  Produced a total of 9,243 gwt in Q3 2011 (4,048

  5. Slide 5: Integration of Havsbrún into Bakkafrost

    INTEGRATION OF HAVSBRÚN INTO BAKKAFROST  Integration is carries out as planned  Start to see benefits from the acquisition of Havsbrún  Strong quarter for Havsbrún  Diversification of cash flow streams  Optimisation of group cash management and financing  Reduced costs of biomass  Increased V

  6. Slide 6: Summary Q3 2011

    SUMMARY Q3 2011 • Commenced to take out financial synergies with Havsbrún • On track with organisational changes on sales- and financial division • Diversification with spot sale, VAP contracts and fish meal, -oil and –feed gives stabile cash flow • Feed and VAP Segment contributed with good margins

  7. Slide 7: Market

    \wli/ BAKKAFROST QUALITY SALMON — FROM THE NORTH ATLANTIC MARKET

  8. Slide 8: Market

    MARKET  Salmon price dropped during Q3 Spot prices on fresh salmon [NOK/kg HOG] 50,00  Global salmon supply increased on all markets in 45,00 third quarter, per month: 15-18% increase in EU 40,00 18-22% increased in USA 35,00 26-44% increased in Japan 30,00 25-30% increase on other markets 25,00 T

  9. Slide 9: Market – sales by market and product

    MARKET  Sales challenging due to high supply in 3Q Sales, divided on markets in Q3 [by Value]  Bakkafrost sales increased from DKK 178 million in USA 25% Q3 2010 to DKK 369 million in Q3 2011 (207% increase)  VAP share 39%  31% of sales to US and Far East in 3Q Far East 6% West Europe East 63% E

  10. Slide 10: Financial Highlights

    \Mi/ BAKKAFROST FINANCIAL HIGHLIGHTS

  11. Slide 11: Financial Highlights

    FINANCIAL HIGHLIGHTS Q3 Q3 YTD YTD  All segments contribute with positive (DKKm) 2011 2010 2011 2010 results Operating revenues 369.3 177.7 923.9 567.7 Operational EBITDA 92.6 57.8 333.6 187.6 Operational EBIT 70.0 47.4 289.2 156.4  Increased revenue and operational EBIT Profit for the period 159.

  12. Slide 12: Key Financials, Group

    KEY FINANCIALS, GROUP  Satisfying cash flow from operations (DKKm) Q3 2011 Q3 2010  Total assets increased by 202% Cash flow from operations 56 -18  NIBD increased to finance the purchase of Total assets 2,395 1,184* Havsbrún and has a negative impact on Equity ratio NIBD 853 70*  New termsheet

  13. Slide 13: Segment Information

    SEGMENT INFORMATION Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates back to Viking times, but it was not before the 20th century that the district merged to form a large, modern

  14. Slide 14: Farming – Harvest Volume

    FARMING – HARVEST VOLUME  Harvested volume: [tonnes gwt] Q3 2011 Q3 2010 YTD 2011 2010 2009  Increases 228% from 4,048 in Q3 2010 to West 582 915 3,022 7,792 11,970 9,243 in Q3 2011 North 4,879 3,133 15,991 13,834 18,680  Forecast 2011: 38 kt gwt Viking 1,720 1,720*  Forecast 2012: 46 – 49 kt gw

  15. Slide 15: Farming – Margin Development

    FARMING – MARGIN DEVELOPMENT  The operational EBIT/kg in Q3 2011 was 6.08 for Operational EBIT/kg [NOK] Farming and VAP segment compared to 16.11 NOK/kg in Q2 2011  Reduced selling price accounted for -10.89 NOK/kg  45% sold in September  Higher downgrade in Q3 than in Q2 accounted for -0.66 NOK

  16. Slide 16: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE  The farming segment was impacted by: (NOK) Q3 2011  Higher production costs in the farming Faroe division Farming: Bakkafrost Viking Farming  Viking Seafood Operational EBIT/kg gwt 3.52 2.69 -1.81  High costs due to extended smolt release window, high finance a

  17. Slide 17: Volume Growth

    VOLUME GROWTH  Smolt transfer 6.5 million YTD, whereof 0.8 released Smolt Transfer (million) in Faroe Farming. Total transfer expected to reach 10 million for 2011  Biomass 30.09.2011 vs 30.09.2010: Number of fish: 27% higher Average size: 40% higher BAKKAFROST / Q3 PRESENTATION 2011 Page 17

  18. Slide 18: Segments VAP

    SEGMENTS VAP  Operational EBIT margin 29% in Q3 2011 compared (DKKm) Q3 2011 Q3 2010 to -10% in Q3 2010 Operating revenues 112 108  Increased VAP capacity available from Q1 2012 Operational EBIT 33 -11  80% of VAP capacity 2012 committed on fixed contracts Operational EBIT margin 29% -10%  Contr

  19. Slide 19: Segment Fish Meal, Oil and Feed

    SEGMENT FISH MEAL, OIL AND FEED  First quarter reported in Meal, Oil and Feed Bakkafrost accounts. Includes only Q3 in the P/L  Sales increased 43 percent Q3 YTD*** YTD 2011 compared with 2010 (DKKm) 2011 2011 2010* 2009* (61 kt) Operating revenues** 277 541 576.6 491.5  Raw material situation ex

  20. Slide 20: Group Financials

    \Mi/ BAKKAFROST » ~ -.. GROUP FINANCIALS

  21. Slide 21: Group Profit and Loss

    GROUP PROFIT AND LOSS Q3 Q3 YTD YTD  Havsbrún included in the P&L from (DKKm) 2011 2010 2011 2010 Q3 2011 Operating revenues 369.3 177.7 923.9 567.7  Revenue increased by 208%, due to Operational EBITDA 92.6 57.8 333.6 187.6 inclusion of Havsbrún and increased Operational EBIT 70.0 47.4 289.2 156.

  22. Slide 22: Balance Sheet – as per 30th Sept 2011

    BALANCE SHEET – AS PER 30TH SEPT 2011 (DKKm) 30.09.2011 31.12.2010  Increas in figures reflecting the acqusition of Intangible assets 370.0 136.2 Havsbrún Property, plant and equipment 824.1 356.4 Financial assets 34.6 26.0  Value of new licences of DKK 234 mill included Long term receivables 0.7

  23. Slide 23: Planned Investments in 2011 for Bakkafrost and Havsbrún

    PLANNED INVESTMENTS IN 2011 FOR BAKKAFROST AND HAVSBRÚN  Investments in PPE is estimated to be 80* million DKK in Investments in PPE [Mio DKK] 2011, which is DKK 10 million higher than 2010 140  The investments are made in: 120  Hatchery division 100 80  Farming division 60  Harvesting division

  24. Slide 24: Cash Flow – for Q3 2011

    CASH FLOW – FOR Q3 2011 Q3 Q3 YTD YTD (DKKm) 2011 2010 2011 2010  Satisfying cash flow from operations Cash flow from operations 55.6 -17.7 323.2 151.2 Cash flow from investments -657.6 -10.4 -696.4 -50.5 Cash flow from financing 643.8 21.7 410.4 -117.8  CF from investments reflect payment of Havs

  25. Slide 25: Overview of Financing 2011–2016

    OVERVIEW OF FINANCING 2011–2016  Secured long term financing of the Group  NIBD end Q3 2011: DKK 853 million  Term sheet signed totalling DKK 1,100 million  Will replace all interest bearing debt in the new group  Instalment loan of DKK 500 million, repayable over 5 years (DKK 25 million/quarte

  26. Slide 26: Outlook

    OUTLOOK  The salmon price at current level is boosting demand both on existing and new markets  Increase harvested volumes for Bakkafrost to between 46,000* tonnes and 49,000* tonnes in 2012  80% of current VAP capacity committed for 2012  Increased VAP production by opening second VAP factory w

  27. Slide 27: Appendix

    APPENDIX Kunoyarnes Bakkafrosts fishfarm A-12

  28. Slide 28: Badwill

    BADWILL (DKKm) 1st July 2011 Payment:  Acquisition of Havsbrún and non- controlling interests in Viking Seafood Cash 627 Havsbrún’s shares in Bakkafrost 350  Badwill identified 977 Total Payment  Value of Havsbrún’s shares in Bakkafrost decreased between Total net identifiable assets 1,101 agreem

  29. Slide 29: Faroe Islands

    FAROE ISLANDS  18 islands – 1,400 km2  48,565 inhabitants (1. Feb 2011)  Self-governing part of the Kingdom of Denmark  Part of the Danish monetary union  Key sectors (% of wage earners, 2009)  Service/public admin.: ~37%  Private service: ~33%  Fishing industry: ~17%  GDP: DKK 11.784 bn (2

  30. Slide 30: Faroe Islands – Excellent Conditions for Cost Effective Farming

    FAROE ISLANDS – EXCELLENT CONDITIONS FOR COST EFFECTIVE FARMING  Faroese fjords provide separation between locations Average Seawater Temperatures 2003-2009 GEOGRAPHY  Improves biological control and area management ºC Faroe Islands Norway (Trøndelag) 16 14  Stable seawater temperatures throughou

  31. Slide 31: Largest Shareholders

    LARGEST SHAREHOLDERS 20 largest shareholder Share price development since listing [NOK] SALMAR ASA NOR 24,80 Jacobsen Hans BAKKA (OSL) FRO 9,40 Jacobsen Jóhan Regin FRO 9,19 TF ILØGUR P/F FRO 4,15 P/F Rundingur FRO 4,07 JPMORGAN CHASE BANK GBR 3,50 NOK NORDEA BANK DENMARK A/S DNK 3,29 DANSKE BANK A/

  32. Slide 32: P/F Bakkafrost contact details

    P/F Bakkafrost · Bakkavegur 9 · FO-625 Glyvrar Faroe Islands · www.bakkafrost.com BAKKAFROST / Q3 PRESENTATION 2011 Page 32

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