Salmar Asa · OSL:SALM
Salmar Asa — Q2 2022 Earnings Presentation
29 slides from Salmar Asa's earnings presentation, Aug 25, 2022
Slide 1: SalMar ASA Q2 2022 Presentation
SalMar ASA Q2 2022 Presentation 25 August 2022 CEO Linda L. Aase CFO Gunnar Nielsen
Slide 2: Agenda
Agenda • Highlights • Operational Update • Financial Update • Strategic Update • Outlook
Slide 3: Highlights Q2 2022
Harvest volume Highlights Q2 2022 (1,000 tons gw) Continued strong operational performance has led to solid operational results • Total Group* operational EBIT 1,048 MNOK and 952 MNOK from Norway – Record strong results from farming segments in Norway and Icelandic operations EBIT/kg* – Record high
Slide 4: Operational Update
OPERATIONAL UPDATE (9 SALMAR
Slide 5: Farming Central Norway
Farming Central Norway KEY RESULTS Record high salmon prices and continued strong performance Q2 2022 Q2 2021 H1 2022 H1 2021 has given record results Operating income (NOKm) 2,073 1,342 4,034 2,511 Operational EBIT (NOKm) 1,213 520 2,138 906 • Stable cost level QoQ Operational EBIT % 59 % 39 % 53 %
Slide 6: Farming Northern Norway
Farming Northern Norway KEY RESULTS Record results due to strong salmon prices and continued Q2 2022 Q2 2021 H1 2022 H1 2021 solid performance Operating income (NOKm) 917 836 2,180 1,536 Operational EBIT (NOKm) 605 347 1,320 542 • Harvest volume lower QoQ to optimize biological performance in sea Op
Slide 7: Sales & Industry
Sales & Industry KEY RESULTS Record high spot salmon prices affecting profitability from Q2 2022 Q2 2021 H1 2022 H1 2021 fixed prices contracts Operating income (NOKm) 3,947 3,070 8,392 6,102 • Contract share at 59% with negative contribution Operational EBIT (NOKm) -781 -136 -1,153 -18 Operational
Slide 8: Icelandic Salmon
Icelandic Salmon KEY RESULTS Solid results driven by strong price achievement and stable Q2 2022 Q2 2021 H1 2022 H1 2021 cost development Operating income (NOKm) 349 182 716 360 Operational EBIT (NOKm) 135 28 229 32 • Low contract level positive for price achievement when spot prices has Operational
Slide 9: SalMar Aker Ocean
SalMar Aker Ocean KEY RESULTS Progressing according to plan Q2 2022 Q2 2021* H1 2022 H1 2021* • Upgrade of Ocean Farm 1 and design of new units progressing according to Operating income (NOKm) - - - - plan Operational EBIT (NOKm) -39 -37 -73 -72 Operational EBIT % - – Ocean Farm 1 currently at Aker
Slide 10: Scottish Sea Farms
Scottish Sea Farms1 KEY RESULTS Improved margins, but results affected by contract level and Q2 2022 Q2 2021 H1 2022 H1 2021 biological challenges Operating income (NOKm) 884 793 1,523 1,190 Operational EBIT (NOKm) 190 119 295 193 • High cost of harvested fish in the period Operational EBIT % 21.5 %
Slide 11: Financial Update
FINANCIAL UPDATE
Slide 12: Operational EBIT deviation analysis (qoq)
Operational EBIT deviation analysis (qoq) Norway* EBIT per kg (NOK) Δ QoQ +3.51 • Net sales price increased due to higher spot prices, but price NOK per kg achievement impacted by profitability on contracts • Slightly higher cost level due to higher cost in Northern Norway Group EBIT per kg (NOK) Δ
Slide 13: Group profit and loss
Group profit and loss NOK million Q2 2022 Q2 2021 Δ% H1 2022 H1 2021 Δ% H1 2022 vs. H1 2021 Total operating revenues 4,172 3,168 32 % 8,855 6,353 39 % EBITDA 1,113 861 29 % 2,603 1,682 55 % • Revenue and operational EBIT increased following higher Depreciations and write-downs 230 200 458 393 volume
Slide 14: Group balance sheet
Group balance sheet Assets Equity ratio • Investments in the value chain progressing according to plan • Higher standing biomass QoQ and YoY • Dividend paid at 20 NOK/share in Q2 • Net Interest-bearing debt incl. lease liabilities 51.5% increased with NOK 2,064 million during the quarter – NIBD incl
Slide 15: Movement in net interest-bearing debt
Movement in net interest-bearing debt • Net investments1 at NOK 790 million – Smolt and hatchery NOK 199 million – Production capacity – traffic light NOK 171 million +2,064 – Farming NOK 208 million – Sales & Industry NOK 56 million – Icelandic Salmon NOK 32 million – SalMar Aker Ocean1 NOK 146 mil
Slide 16: Strategic Update
STRATEGIC UPDATE — 9 SALMAR
Slide 17: Verified our ambitious targets for reduction of greenhouse gases
Verified our ambitious targets for reduction of greenhouse gases Targets consistent with reductions required to keep warming to 1.5°C • Committed to reducing our greenhouse gas emissions by 42% from 2020 to 2030 – both in Scope 1 and 2, which concern our own operations – and in Scope 3, which concer
Slide 18: Strong platform for further sustainable growth in all regions
Strong platform for further sustainable growth in all regions With strong corporate culture from competent, dedicated and passionate employees NORWAY ICELAND OFFSHORE UK1 Volume 2022E Volume 2022E Ambition for 150,000 Volume 2022E 175,000 tons 16,000 tons tons within 2030 46,000 tons Improved smolt
Slide 19: Strong strategic rationale for offer in NTS and merger with NRS
Strong strategic rationale for offer in NTS and merger with NRS Solid track-record from both parties in Central Norway, Northern Norway and West fjords of Iceland • Potential for significant synergies across the value chain in all regions – Improved utilization of MAB and FARMING Aquaservice site po
Slide 20: The principles of the transactions
The principles of the transactions NRS completes its announced acquisition of SalmoNor and is then merged with SalMar SalMar’s voluntary offer for shares in NTS is completed Before transaction Post transaction Subsidiary Associated company Significant holding * For further details see separate stock
Slide 21: Merger approved by EGM in both SalMar and NRS
Merger approved by EGM in both SalMar and NRS 52.7% accepted the voluntary offer for NTS ASA A cash offer for remaining shareholders in NTS will be made after completion of the voluntary offer • Consideration payable in voluntary offer for NTS and merger with NRS – The voluntary offer is NOK 26.8648
Slide 22: Outlook
OUTLOOK
Slide 23: Outlook
Outlook • SalMar has strong operational and financial flexibility and is well equipped to build an even more robust platform for further sustainable growth – Continued strong strategic and operational focus with dedicated employees and strong corporate culture set for growth – Leading and pioneering
Slide 24: Thank you for your attention
THANK YOU FOR YOUR ATTENTION Financial Calendar: Q3 2022 presentation – 10 November 2022 Q4 2022 presentation – 22 February 2023 Annual Report 2022 – 28 April 2023 Q1 2023 presentation – 11 May 2023 Annual General Meeting – 8 June 2023 Q2 2023 presentation – 24 August 2023 Q3 2023 presentation – 9 N
Slide 25: Forward looking statements
Forward looking statements The statements contained in this presentation may contain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect current expectations and assumptions as to future events and circumstances that may not prove
Slide 26: Appendix
Appendix Proposed M&A For further details see separate stock exchange notices, voluntary offer document and merger plan
Slide 27: One of the largest salmon farmers in Norway
One of the largest salmon farmers in Norway Combined potential over 280,000 tonnes1 Northern MAB 38,251 tonnes • Both parties have long-standing presence in, and considerable Norway Production Areas: competence from, salmon farming in Northern Norway and 10, 11, 12 and 13 Central Norway MAB 36,085 t
Slide 28: Catalyst for further sustainable growth on Iceland
Catalyst for further sustainable growth on Iceland Combined potential over 50,000 tonnes1 • Both, Arnarlax and Arctic Fish have operations in the West Fjords of Iceland Volume 2022E2 Volume 20223 16,000 tonnes 10,600 tonnes • Combined potential over 50,000 tonnes1 through unutilized potential in exi
Slide 29: Leading and pioneering the way offshore
Leading and pioneering the way offshore Ambition for 150,000 tonnes1 within 2030 • The combination will be in the forefront for the most developed offshore farming initiatives in the world • Significant growth opportunities to utilize the potential offshore • Two units in operation with Ocean Farm 1