Leroy Seafood Group ASA · OSL:LSG
Leroy Seafood Group ASA — Lerøy Seafood Group — Q3 2003 Earnings Presentation
50 slides from Leroy Seafood Group ASA's earnings presentation, Nov 28, 2003
Slide 1: Lerøy Seafood Group 3rd quarterly report 2003
Lerøy Seafood Group • 3rd quarterly report 2003 • November 28th • Ole-Eirik Lerøy • CEO • Helge Singelstad • CFO
Slide 2: Agenda
Agenda 1. 1 Considerations 2. 2 Key financial figures Q3 2003 3. 3 Lerøy at a glance 4. 4 Lerøy Seafood Group – Company profile 5. 5 Pro forma figures (acquisition Nye Midnor) 6. 6 Market glance
Slide 3: Internal considerations 3rd Quarter 2003
Internal considerations 3rd Quarter 2003 • Financially Solid • Well positioned for future organic and strategic growth • 1.780 shareholders per 31.10.03 • Increasing number of shareholders • Consolidated • Still satisfactory operations in most areas in Q3 • Distribution Lerøy Sweden • Processing Ler
Slide 4: External considerations 3rd Quarter 2003
External considerations 3nd Quarter 2003 • Weak salmon and trout prices • Prices increased in Q3 • Prices in Q3 03 lower than comparable figures in Q3 02 but still at an historically low level • Higher prices needed • Uncertainty in price development • Weakened financial and operational performances
Slide 5: Agenda
Agenda 1. 1 Considerations 2. 2 Key financial figures Q3 2003 3. 3 Lerøy at a glance 4. 4 Lerøy Seafood Group – Company profile 5. 5 Pro forma figures (acquisition Nye Midnor) 6. 6 Market glance
Slide 6: Yearly turnover LSG
Yearly turnover LSG mill. NOK 3000 2500 2000 1500 1000 500 0 1980 1985 1990 1995 1999 2000 2001 2002
Slide 7: Pre-tax earnings LSG
Pre-tax earnings LSG mill. NOK 60 50 40 30 20 10 0 1994 1995 1996 1997 1998 1999 2000 2001 2002
Slide 8: Quarterly turnover LSG
Quarterly turnover LSG mill. NOK 800000 700000 600000 500000 2001 400000 2002 300000 2003 200000 100000 0 1. kvt. 2. kvt. 3. kvt.
Slide 9: Income Statement Q3-03
Resultatregnskap / Income Statement Q3-03 Alle tall i NOK 1.000 / All figures in NOK 1,000 Q3 - 2003 Q3 - 2002 YTD 2003 YTD 2002 2 002 Salgsinntekter / Operating revenues 710 142 611 405 1 990 243 1 771 711 2 555 606 Vareforbruk / Cost of goods sold 641 384 554 768 1 784 556 1 614 927 2 326 928 Lønn
Slide 10: Balance Sheet Q3-03
Balanse / Balance Sheet Q3-03 Alle tall i NOK 1.000 / All figures in NOK 1,000 30.09.03 30.09.02 31.12.02 Immaterielle eiendeler / Intangible assets 30 657 21 864 23 700 Varige driftsmidler / Tangible fixed assets 67 598 62 153 66 714 Finansielle anleggsmidler / Fin. fixed assets 273 849 302 120 294
Slide 11: Balance Sheet Q3-03 cont.
Balanse / Balance Sheet Q3-03 forts./cont. Alle tall i NOK 1.000 / All figures in NOK 1,000 30.09.03 30.09.02 31.12.02 Innskutt egenkapital / Equity contributions 505 288 505 298 505 342 Opptjent egenkapital / Earned equity 125 205 118 715 113 130 Minoritetsinteresser / Minority interests 11 161 21
Slide 12: Key figures Q3-03
Key figures – Lerøy Seafood Group Q3-03 Q3 - 2003 Q3 - 2002 YTD 2003 YTD 2002 2 002 Resultatmargin / Profit margin 1,21 % 0,82 % 1,42 % 1,32 % 1,57 % Driftsmargin / Operating margin 2,42 % 1,22 % 2,92 % 1,90 % 2,15 % Resultat per aksje / Earnings per share 0,11 0,11 0,48 0,65 1,13 Utvannet res. per
Slide 13: Key figures Q3-03
Key figures – Lerøy Seafood Group Q3-03 Q3 - 2003 Q3 - 2002 YTD 2003 YTD 2002 2 002 Avkastning på syssels. kap./ROCE 2) 5,51 % 3,30 % 6,92 % 7,72 % 8,75 % Egenkapitalandel / Equity ratio 56,04 % 58,98 % 53,50 % Netto renteb. gjeld / Net int.bearing debt - - - 2) Annualisert / Annualized Delårstall e
Slide 14: Consolidated Q3 2003
Lerøy Seafood Group consolidated Q3 2003 • Lerøy Seafood Group’s total equity is 641,7 mill NOK • Subsidiaries share of group equity is 278,8 mill NOK • Operating profit for YTD 2003 is 58,2 mill NOK
Slide 15: Affiliated companies
Affiliated companies Balance at 30.09.03 30.06.03 31.03.03 31.12.02 Norskott Havbruk AS (50%) 148,5 mill 152,8 mill 152,4 mill 153,0 mill Hydrotech Gruppen AS (39%) 98,2 mill 94,1 mill 98,3 mill 104,0 mill Egersund Fisk AS (27%) 22,0 mill 21,4 mill 21,7 mill 22,0 mill Total 268,7 mill 268,3 mill 272
Slide 16: Agenda
Agenda 1. 1 Considerations 2. 2 Key financial figures Q3 2003 3. 3 Lerøy at a glance 4. 4 Lerøy Seafood Group – Company profile 5. 5 Pro forma figures (acquisition Nye Midnor) 6. 6 Market glance
Slide 17: Lerøy Seafood Group
Lerøy Seafood Group • Norway’s largest seafood exporter • 7,63% market share of Norwegian Seafood total exports (by value) • 12% of Norwegian salmon export in 2002 • Major shareholder in fish farming operations • Lerøy Midnor AS (100%) (Nye Midnor AS) • Scottish Sea Farms (50%), 2nd largest Scottish
Slide 18: Lerøy Seafood Group
Lerøy Seafood Group • Global distribution network • Global distribution from Head Office in Bergen • Local distribution and processing in Sweden • Local representative offices in some key markets (France, Spain, Italy, Japan, China, USA)
Slide 19: Lerøy Seafood Group
Lerøy Seafood Group • Steady growth in operating profit and strong balance sheet • Stable earnings despite turbulence in the salmon industry • Growth potential within recently acquired businesses • Satisfactory liquidity / credit facilities • Professional and highly educated employees
Slide 20: Agenda
Agenda 1. 1 Considerations 2. 2 Key financial figures Q3 2003 3. 3 Lerøy at a glance 4. 4 Lerøy Seafood Group – Company profile 5. 5 Pro forma figures (acquisition Nye Midnor) 6. 6 Market glance
Slide 21: Lerøy Seafood Group ASA Sales & Distribution, Production
Lerøy Seafood Group ASA Sales Sales&&Distribution Distribution Production Production Lerøy Hallvard Lerøy Lerøy Sigerfjord Lerøy Hallvard Terra Terra Nordvik SA LerøySmøgen Smøgen Lerøy Sigerfjord Midnor Sverige AB Sverige AB Lerøy LerøyAS AS Seafood SeafoodASAS Nordvik SA 80% Seafood SeafoodABAB Mi
Slide 22: LSG – Consolidated (YTD, 30.09.03)
LSG – Consolidated, (YTD, 30.09.03) PELAGIC WHITEFISH FARMED FISH HALLVARD LERØY AS SALES - MARKETING DISTRIB. FRANCE DISTRIBUTION Nordvik DIRECT NORWAY EXPORT DISTRIBUTION UK DISTRIBUTION SSF / LERØY Lerøy Sweden Lerøy Lerøy Lerøy France Italy PROCESSING Spain Lerøy Sweden Lerøy Lerøy China Japan P
Slide 23: Sales per market
Lerøy Seafood Group - Sales per market YTD - 03 Others Norway 1,1 % USA and Canada 7,8 % 9,0 % 2002 Others Norway 0,8 % Asia Pacific USA and Canada 8,5 % 16,9 % Europe 7,2 % 59,1 % Eastern Europe Asia Pacific Europe 18,6 % 6,0 % 55,1 % Eastern Europe 9,8 %
Slide 24: Sales per product
Lerøy Seafood Group - Sales per product YTD - 03 Shellfish Pelagic fish 5,7 % 3,8 % Other/other species 6,4 % 2002 Salmontrout 5,8 % Whole salmon Shellfish 41,9 % Salmontrout 4,1 % 7,0 % Other/other species Whitefish 4,1 % Whole salmon 12,8 % Pelagic fish 38,5 % 10,9 % Processed salmon White fish 23
Slide 25: Shareholders 31.10.03
Shareholders 31.10.03 Shareholder No. of shares Ownership share Ferd Private Equity 5 781 307 19,64 % Ole-Eirik Lerøy 4 685 000 15,91 % Skagen Vekst 1 632 100 5,54 % Knut Hallvard Lerøy 1 253 210 4,26 % Hallvard Lerøy Jr. 1 190 900 4,05 % Tine Pensjonskasse 1 178 300 4,00 % DnB ASA, Egenkapital Inve
Slide 26: Global organization
Lerøy Seafood Group - Global organization Norway Sweden Farming Dist. & Sales Scotland/Shetland Dist. & Sales Farming Dist. & Sales Japan Spain, France Dist. & Sales Dist. & Sales Italy Dist. & Sales China Dist. & Sales North America Dist. & Sales
Slide 27: Norskott Havbruk (Scottish Sea Farms Ltd.)
Norskott Havbruk (Scottish Sea Farms Ltd.) • Production capacity: 25.000 – 30.000 gwt • Volume harvested in 2002: 19.000 gwt • Est. harvest volume 2003: 23.000 – 24.000 gwt • Additional processing and sales: 8.000 gwt • 2 processing plants
Slide 28: Norskott Havbruk (Scottish Sea Farms Ltd.)
Norskott Havbruk (Scottish Sea Farms Ltd.) • SQS • Label Rouge • ISO 9002 • ISO 14 001 • Investor in people • VIBES of Scotland
Slide 29: Norskott Havbruk
Norskott Havbruk NOKm Q3 - 2003 Q3 - 2002 YTD - 2003 YTD - 2002 31.12.2002 Revenues 170,2 155,3 480,9 410,0 562,8 EBITDA 5,5 13,5 32,8 35,1 37,2 EBIT 2,1 3,0 10,6 4,6 7,9 Pre tax -8,7 -5 -8,6 -16,7 -20,9 Volume gw (t) 6,1 4,5 15,5 13,3 19,0 Balance sheet 30.09.2003 30.09.2002 31.12.2002 Licences, Go
Slide 30: Hydrotech Gruppen AS (39%)
Hydrotech Gruppen AS (39%) • Ownership • 39% owned by Lerøy Seafood Group ASA • 57.3% owned by L & K Karlsen Holding AS • 3.7% owned by others • Wholly integrated fish farms in Norway • 17 wholly owned licenses • Estimated sales 2003: • Salmon and trout estimated : 15,000 gwt • Smolt production: app
Slide 31: Hydrotech Gruppen
Hydrotech Gruppen NOK Q3 - 2003 Q3 - 2002 YTD 2003 YTD 2002 31.12.2002 Revenues 70,6 155,7 257,2 283,4 349,0 EBITDA -5,4 41,2 -4,9 47,8*) 25,7 EBIT -10,0 35,6 -18,9 31,0 6,5 Pre tax -13,6 0,3 -33,9 10,7 3,7 Balance sheet 30.09.2003 30.09.2002 31.12.2002 Licences / Goodwill 140,6 138,2 141,2 Fixed as
Slide 32: Egersund Fisk AS (27%)
Egersund Fisk AS (27%) • Shareholder structure • Lerøy 27% • SalMar 27% • Egersund Fiskeriinvestering 9% • Others 37% (less than 4% each) • Pelagic activity • Fish oil, fish meal • Pelagic fish for consumption • Ownership in vessels for wild catch • Production of ice • Part ownership acquired in 200
Slide 33: Agenda
Agenda 1. 1 Considerations 2. 2 Key financial figures Q3 2003 3. 3 Lerøy at a glance 4. 4 Lerøy Seafood Group – Company profile 5. 5 Pro forma figures (acquisition Nye Midnor) 6. 6 Market glance
Slide 34: Nye Midnor AS changes name to Lerøy Midnor AS
Nye Midnor AS changes name to Lerøy Midnor AS
Slide 35: Structure Nye Midnor AS
Structure Nye Midnor AS Production Nye NyeMidnor MidnorAS AS Smolt Smolt Farming Farming Slaughtery Slaughtery Processing Processing 55licenses licenses 26 26licenses licenses
Slide 36: Description of Lerøy Midnor AS
Description of Lerøy Midnor AS Production Smolt: Slaughtery: • 5 licenses • Capacity of 65 tonnes per shift • 6 mill. smolt per year • 47% ownership in Uthaug lakseslakteri (salmon/trout) AS Farming: Processing: • 26 licenses (salmon/trout) • Capacity of ca. 3.500 t per year • All production is loca
Slide 37: Nye Midnor AS Adjusted results and balance
Nye Midnor AS Adjusted results and balance NOK YTD 2003 *) Revenues 76,6 EBITDA 7,9 EBIT 2,7 Pre tax -2,9 Balance sheet 30.09.2003 Licences / Goodwill /def. Tax 72,1 Fixed assets 126,2 Inventories 242,9 Other current assets 45,5 Total assets 486,7 Equity -40,2 Debt 526,9 Total equity and debt 486,7
Slide 38: Nye Midnor AS Financial structure
Nye Midnor AS Financial structure • Interest bearing debt NOK 440 mill (per 30.09.03) • Total credit facilities after 15.01.04 NOK 420 mill • Long term debt NOK 220 mill • Repayment profile long term debt 15 years • First payment 30.06.04 • Short time debt NOK 200 mill (revolving credit facility) •
Slide 39: Nye Midnor AS Acquisition analysis
Nye Midnor AS Acquisition analysis • Adjusted booked equity - 40,2 mill • Acquisition price • Cash payment 85,0 mill • 2,3 mill LSG shares 65,6 mill • Transaction costs 2,8 mill 153,4 mill • Value in excess of adjusted booked equity 193,8 mill
Slide 40: Consolidated (pro forma) income statement
Lerøy Seafood Group Consolidated (pro forma) Acquisition Nye Midnor Proforma resultatregnskap / Pro forma income statement (Alle tall i NOK 1.000 / All figures in NOK 1,000) Proforma YTD proforma Salgsinntekter / Operating revenues 786 743 2 066 844 Vareforbruk / Cost of goods sold 675 118 1 818 290
Slide 41: Consolidated (pro forma) balance sheet
Lerøy Seafood Group Consolidated (pro forma) Acquisition Nye Midnor Proformabalanse / Pro forma balance sheet (Alle tall i NOK 1.000 / All figures in NOK 1,000) Proforma 30.09.03 Immaterielle eiendeler / Intangible assets 294 996 Varige driftsmidler / Tangible fixed assets 192 691 Finansielle anlegg
Slide 42: Consolidated (pro forma) equity and liabilities
Lerøy Seafood Group Consolidated (pro forma) Acquisition Nye Midnor Innskutt egenkapital / Equity contributions 570 858 Opptjent egenkapital / Earned equity 123 585 Minoritetsinteresser / Minority interests 11 161 Sum egenkapital / Total equity 705 604 Avsetning for forpliktelser / Accrued liabiliti
Slide 43: Consolidated (pro forma) key figures
Lerøy Seafood Group Consolidated (pro forma) Key figures • Total equity (40,6 %) 705,6 mill • Net interest bearing debt 470,7 mill • Total intangible assets 295,0 mill • Licences fish farming Norway 195,0 mill • Goodwill 100,0 mill • Total LSG-shares after new issue (acquisition of Nye Midnor AS) 31
Slide 44: Agenda
Agenda 1. 1 Considerations 2. 2 Key financial figures Q3 2003 3. 3 Lerøy at a glance 4. 4 Lerøy Seafood Group – Company profile 5. 5 Pro forma figures (acquisition Nye Midnor) 6. 6 Market glance
Slide 45: Fresh Atlantic Salmon Norway price development 1997-YTD
19 0,00 5,00 10,00 15,00 20,00 25,00 30,00 35,00 40,00 45,00 97 19 -1 97 - NOK / Kg 19 1 4 97 - Source: FHL/NSL 19 2 7 97 -4 19 0 98 19 -1 98 - 19 1 4 98 - 19 2 7 98 - 19 4 0 98 - 19 5 3 99 - 19 1 3 99 19 -2 6 99 - 19 3 9 99 - 20 5 2 00 - 20 1 3 Fresh Atlantic Salmon Norway (4-5 kgs) 00 - 20 2 6 00
Slide 46: Salmon export from Norway as of week 48-03
Salmon export from Norway as of week 48-03 Fresh atlantic salmon, cross-section, FCA Oslo. w. 27 NOK / kg Oslo Q4-01 Q1-02 Q2-02 Q3-02 Q4-02 Q1-03 Q2-03 Q3-03 Q4-03 28,00 Aver. 17,24 Aver. 18,04 Aver. 21,77 Aver. 20,16 Aver. 20,76 Aver. 20,42 Aver.18,92 Aver. 18,09 Aver. 20,58 26,00 24,00 22,00 20,0
Slide 47: Atlantic salmon – supply side
Atlantic salmon – supply side 2002 H1 2003 H1 Change H1 2002 H2 2003 H2E Change H2 2003 E Change 02-03E Norway 208 500 226 200 8,5 % 236 600 282 000 19,2 % 508 200 14,2 % Chile 132 000 132 600 0,5 % 136 300 147 100 7,9 % 279 700 4,2 % UK 66 600 79 100 18,8 % 73 500 79 700 8,4 % 158 800 13,3 % Canada
Slide 48: Atlantic salmon – demand side
Atlantic salmon – demand side 2002 H2 2003 H2E Ch H2 2003E Ch 02-03E EU 259 400 285 200 9,9 % 526 000 7,7 % USA 141 700 171 500 21,0 % 328 000 10,1 % Japan 34 500 26 900 -22,0 % 52 200 -20,1 % Others 100 300 126 900 26,5 % 225 000 12,7 % In total 535 900 610 500 13,9 % 1 131 200 7,6 % Figures per 21
Slide 49: Drivers per 31.10.03
Drivers per 31.10.03 • Norway – EU (+ 40.855 mt) + 18,8 % • Norway – Eastern Europe (fresh 11.330 mt) + 86,7 % • Norway – Eastern Europe (frozen 1.282 mt) + 8,9 % • Norway - Japan (- 5.625 mt) - 16,5 % • Norway - Feed sales (+ 29.000 mt) + 4,6%
Slide 50: Leroy Seafood innovation since 1899
LEROY |SEAFOOD INNOVATION SINCE 1899