Slide 1: Q4 2020 presentation
Q4 2020 presentation CEO: Ivan Vindheim CFO: Kristian Ellingsen 17 February 2021
Slide 2: Forward looking statements
Forward looking statements This presentation may be deemed to include forward-looking statements, such as statements that relate to Mowi’s contracted volumes, goals and strategies, including strategic focus areas, salmon prices, ability to increase or vary harvest volume, production capacity, expect
Slide 3: Highlights
Highlights • Q4 operational EBIT of EUR 49 million in line with trading update • Second wave of Covid-19 and high seasonal supply significantly impacted spot prices in Farming − Shortfall in the foodservice market not fully offset by strong growth in retail sales (net effect approx. -5%) • All-time
Slide 4: Adjusted dividend policy
Adjusted dividend policy • Dividend has been an important component of Mowi's financial strategy and to make dividend payments more predictable and transparent the Board has decided to operationalise the dividend policy by introducing ordinary and extraordinary dividends. • Mowi’s ambition is to cre
Slide 5: Key financials
Key financials Mowi Group - main figures Q4 2020 Q4 2019 2020 2019 Unaudited EUR million Operational revenue and other income 1 007.5 -9 % 1 111.7 3 761.4 4 135.4 Operational EBITDA 1) 93.6 206.5 504.6 874.5 Operational EBIT 1) 49.4 -70 % 165.7 337.7 720.9 EBIT 38.6 233.9 183.5 617.0 Cash flow from
Slide 6: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices • Prices in Q4 2020 down by 28% YoY in Europe and Chile (back-to-plant equivalent) on Covid-19 lockdown and high global supply 9 7 8 6 7 USD per lbs (Miami and Seattle) 5 6 EUR per kg (Oslo) 5 4 4 3 3 2 2 1 1 0 0 2018 2019 2020 2021 Ref. price Norway EUR (NASD
Slide 7: Price achievement, contract & superior share
Price achievement (1), contract & superior share 154 % 160 % 140 % 122 % 120 % 102 % 106 % 101 % 100 % 97 % 100 % 85 % 80 % 60 % 40 % 20 % 0% Norwegian Scottish Canadian Chilean Q4 2019 Q4 2020 Norwegian Scottish Canadian Chilean Q4-20 Contract share 28 % 66 % 2% 24 % Superior share 95 % 96 % 88 % 8
Slide 8: Operational EBIT comparison
Operational EBIT comparison 180 165.7 -0.1 -120.0 160 140 • Farming price effect: EUR -145m YoY 120 EUR million 100 80 17.5 -6.6 60 -7.1 49.4 40 20 0 Op EBIT Feed Farming Markets Consumer Other Op EBIT Q4 2019 Products Q4 2020 Page 8
Slide 9: Norway
Norway SALMON OF NORWEGIAN ORIGIN Operational EBITEBIT Operational Salmon of Norwegian Salmon Origin of Norwegian Origin EUR million Q4 2020 Q4 2019 Q4 Q4 2019 vs Q4 2020 2020 vs Q4 2019 Operational EBIT 58.9 139.9 140 EBIT 15.6 207.8 120 Harv est v olume (GWT) 78 473 65 970 100 Operational EBIT per
Slide 10: Norway: Operational EBIT/kg per region
Norway: Operational EBIT/kg per region 3.0 2.62 2.5 2.28 2.12 2.0 1.61 EUR per kg 1.5 1.29 1.0 0.75 0.49 0.38 0.5 0.0 South Mid North Total Q4 2019 Q4 2020 • Region South: Stable harvest volumes. Improved production • Region Mid: Improved volumes. Costs impacted by gill issues and harvesting from si
Slide 11: Norway: Sales contract portfolio
Norway: Sales contract portfolio 25 000 20 000 Contracted volumes (GWT) 15 000 10 000 5 000 0 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Realised contract volumes Contracted volumes (including prospects) • At the low end of contract share policy to be positioned for recovery post Covid-19 Page
Slide 12: Scotland
Scotland SALMON OF SCOTTISH ORIGIN Operational EBIT EBIT Operational Salmon of Scottish Salmon Origin of Scottish Origin EUR million Q4 2020 Q4 2019 Q4 2019 vs Q4 2020 Q4 2020 vs Q4 2019 Operational EBIT 20.4 17.4 25 EBIT 24.5 27.6 20 Harv est v olume (GWT) 13 018 14 003 Operational EBIT per kg (EUR
Slide 13: Canada
Canada SALMON OF CANADIAN ORIGIN Operational EBITEBIT Operational Salmon of Canadian Salmon Origin of Canadian Origin EUR million Q4 2020 Q4 2019 Q4 Q4 2019 vs Q4 2020 2020 vs Q4 2019 0 Operational EBIT -14.1 -8.7 EBIT -43.1 -12.7 -4 Harv est v olume (GWT) 12 417 16 246 Operational EBIT per kg (EUR)
Slide 14: Chile
Chile SALMON OF CHILEAN ORIGIN Operational Operational EBIT EBIT Salmon Salmon of Chilean of Chilean Origin Origin EUR million Q4 2020 Q4 2019 Q4 2020 Q4 2019 vs 2020 vs Q4 Q4 2019 Operational EBIT -9.9 13.2 15 EBIT 52.7 -1.2 10 Harv est v olume (GWT) 20 130 16 623 5 Operational EBIT per kg (EUR) -0
Slide 15: Ireland and Faroes
Ireland and Faroes SALMON OF IRISH ORIGIN SALMON OF FAROESE ORIGIN EUR million Q4 2020 Q4 2019 EUR million Q4 2020 Q4 2019 Operational EBIT 3.1 3.8 Operational EBIT -1.1 3.8 EBIT 4.8 3.8 EBIT -0.6 6.2 Harv est v olume (GWT) 1 189 1 127 Harv est v olume (GWT) 1 408 2 345 Operational EBIT per kg (EUR)
Slide 16: Consumer Products
Consumer Products (1) CONSUMER PRODUCTS • Record-high Q4 and full-year volumes of 70k EUR million Q4 2020 Q4 2019 tonnes and 239k tonnes, respectively Operating rev enues 705.9 725.7 Operational EBIT 34.8 17.3 • All-time high quarterly and full-year earnings of EUR Operational EBI T % 4.9% 2.4% 35m
Slide 17: Feed
Norway Feed FEED EUR million Q4 2020 Q4 2019 Operating rev enues 194.7 170.8 Operational EBIT 13.7 13.8 Operational EBI T % 7.0% 8.1% EBIT 13.6 14.0 Feed sold v olume 153 466 130 034 Feed produced v olume 153 181 112 277 Scotland: New plant • Record high quarterly and full-year volumes of 153k tonne
Slide 18: Financials, Markets and Harvest volumes
Q4 2020 presentation Financials, Markets and Harvest volumes
Slide 19: Profit and Loss
Profit and Loss Mowi Group EUR million Q4 2020 Q4 2019 2020 2019 • Positive net fair value Operational revenue and other income 1 007.5 -9 % 1 111.7 3 761.4 4 135.4 adjustment of biomass Operational EBIT 1) 49.4 -70 % 165.7 337.7 720.9 of EUR 20 million mainly Change in unrealized internal margin -0
Slide 20: Financial position
Financial position Mowi Group 31.12.2020 30.09.2020 31.12.2019 EUR million Non-current assets 3 337.3 3 369.9 3 210.4 Current assets 2 448.7 2 410.0 2 629.6 Assets held for sale 60.0 0.0 0.0 Total assets 5 846.1 5 779.9 5 840.1 Equity 2 764.1 2 721.9 2 892.6 Non-current liabilities 2 362.4 2 327.1 2
Slide 21: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Mowi Group Q4 2020 Q4 2019 2020 2019 EUR million • Working capital tie-up NIBD beginning of period -1 458.9 -1 230.2 -1 337.2 -1037.2 less than expected due Operational EBITDA* 93.6 206.5 504.6 874.4 to Covid-19 Change in working capital -0.3 -109.5 -56.9 -104
Slide 22: Overview financing
Overview financing • Total committed financing of EUR 1,956 million out of which approximately EUR 475 million in cash and undrawn lines • Comfortably compliant with equity covenant of 35%. No earnings covenant • Long term NIBD target EUR 1,400m • Bank facility: EUR 1,406m Facility Agreement − Tenor
Slide 23: 2021 Cash Flow Guidance
2021 Cash Flow Guidance • Working capital build-up EUR ~110m − Lower than expected tie-up in 2020 in Sales & Marketing due to Covid-19. Expect tie-up in 2021 as market situation improves − Support further organic growth • Capital expenditures EUR ~265m − Freshwater investments EUR ~60m − Sea water e
Slide 24: Cost saving program – EUR 35 million realised in 2020
Cost saving program – EUR 35 million realised in 2020 • Completed 2020 cost savings program with Cost savings by year annual savings of EUR 35 million 200 25 162 − ~200 initiatives across different 150 35 137 categories 41 100 61 − Farming EUR 20 million 50 − Sales & Marketing EUR 11 million 0 2018
Slide 25: Supply development
Supply development Estimated volumes Compared to Q4 2019 Est. volumes Suppliers Q4 2020 Q4 2019 Volume % Q3 2020 Norway 364 800 335 300 29 500 8.8% 322 500 Scotland 44 700 38 300 6 400 16.7% 48 900 Faroe Islands 20 700 23 600 -2 900 -12.3% 16 000 Other Europe 12 600 10 800 1 800 16.7% 10 100 Total E
Slide 26: Global volume by market
Global volume by market Estimated volumes Compared to Q4 2019 Est. volumes 12 month comparison Markets Q4 2020 Q4 2019 Volume % Q3 2020 LTM PTM % EU 313 900 277 600 36 300 13.1% 294 600 1 070 800 1 017 500 5.2% Russia 27 700 25 700 2 000 7.8% 22 800 78 600 78 700 -0.1% Other Europe 33 900 29 600 4 3
Slide 27: Development in reference prices
Development in reference prices Q4 2020 Change vs Q4 2020 Change vs Market Q4 2019 EUR Q4 2019 Norway (1) EUR 4.05 -27.6% EUR 4.05 -27.6% Chile (2) USD 3.88 -15.2% EUR 3.25 -21.2% Notes: Chile, GWT (3) USD 3.77 -28.2% EUR 3.16 -33.3% (1) NASDAQ average superior GWE/kg (gutted weight equivalent) (2)
Slide 28: Industry supply growth 2021e
Industry supply growth 2021e 2017 2018 2019 2020 2021E 2021E GWT (1,000) Low Y/Y grow th High Y/Y grow th Norw ay UK 1 087 159 1 128 137 1 200 171 1 232 163 1 320 183 1 305 179 6% 10 % 1 335 187 8% 15 % • 2021 guidance: Faroe Islands Other Europe* 72 26 65 25 78 36 73 42 88 46 85 44 17 % 4% 91 48 25
Slide 29: Mowi volume guidance
Mowi volume guidance Atlantic salmon 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Q1 2021 2021 GWT (1,000) Actual Actual Actual Actual Actual Actual Guidance Guidance Norway 236.9 50.5 56.6 76.5 78.5 262.0 68.0 260.0 Scotland 65.4 9.0 14.6 16.1 13.0 52.7 17.0 60.0 Canada 54.4 8.1 11.4 12.1 12.4 44.0 10
Slide 30: Outlook
Outlook • We still believe in a market recovery during 2021 • We believe in a tighter market balance as supply growth is projected to be only 2% for 2021 • Low price level and a shift in demand towards more elaborated products expected to boost demand post Covid-19 • Mowi well positioned to capitali
Slide 31: Appendix
Q4 2020 presentation Appendix
Slide 32: Nova Sea
Nova Sea Harv est v olume (GWT) EBI T per kg NI BD EURm Ownership % 2019 2020 Q4 2019 Q4 2020 2019 2020 Q4 2019 Q4 2020 Q4 2020 Nova Sea 48.5 % 45 962 42 584 9 987 12 590 2.41 1.72 2.14 1.03 -35.4 • Leading integrated salmon producer in Northern Norway − 33.33 wholly owned licenses − 4 partly owned
Slide 33: Dividend policy
Dividend policy • Mowi’s ambition is to create long-term value for the shareholder through both positive share price development and a growing dividend in line with long-term earnings − Quarterly ordinary dividend shall under normal circumstances be at least 50% of underlying earnings per share (EPS
Slide 34: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY Min hedging rate Max hedging rate (1) • Q1 2021 contract shares (% of guided volume): Norway (2) 0% 50 % − Norway 22% Scotland 0% 75 % Canada 0% 30 % − Scotland 50% (2) Chile 0% 50 % Ireland 0% 100 % − Canada 5% Faroes 0% 30 % − Chile
Slide 35: Quarterly segment overview
Quarterly segment overview SOURCES OF ORIGIN QTD EUR million Norway Scotland Canada Chile Ireland Faroes Other 1) Group OPERATIONAL EBIT FARMING 10.9 14.6 -15.9 -17.8 2.6 -1.2 -6.8 SALES AND MARKETING Markets 9.4 4.0 1.9 0.4 0.4 0.2 0.1 16.2 Consumer Products 26.3 0.5 -0.1 7.5 0.0 0.0 0.5 34.8 SUBTO
Slide 36: YTD segment overview
YTD segment overview SOURCES OF ORIGIN YTD EUR million Norway Scotland Canada Chile Ireland Faroes Other 1) Group OPERATIONAL EBIT FARMING 171.6 23.4 -34.4 -12.6 20.8 10.3 179.2 SALES AND MARKETING Markets 31.1 12.5 10.3 5.2 1.2 2.6 0.6 63.5 Consumer Products 33.9 8.4 2.9 35.0 0.2 0.0 1.4 81.8 SUBTO
Slide 37: Development in harvest volumes
Development in harvest volumes GWT 2016 2017 2018 2019 2020 2021E (1,000) Total Total Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1E Total Norway 236.0 210.2 230.5 56.1 51.4 63.4 66.0 236.9 50.5 56.6 76.5 78.5 262.0 68.0 260.0 Scotland 45.0 60.2 38.4 15.8 15.9 19.6 14.0 65.4 9.0 14.6 16.1 13.0 52.7 1
Slide 38: Cash flow guidance and historic developments
Cash flow guidance and historic developments Net capital expenditure Net working capital 350 160 Maintenance level 300 140 250 120 100 200 EUR million EUR million 80 150 60 100 40 50 20 0 0 2016 2017 2018 2019 2020 2021E 2016 2017 2018 2019 2020 2021E Financial commitments and cost of debt (*) 60 50
Slide 39: Debt distribution and interest rate hedging
Debt distribution and interest rate hedging CURRENCY DEBT 2021 2022 2023 CURRENCY 31.12.2020(1) Nominal (2) Fixed rate(3) Nominal (2) Fixed rate(3) Nominal (2) Fixed rate(3) EUR m 1 394.8 380.0 2.19 % - - - - USD m 60.0 78.3 2.31 % 60.0 3.72 % - - GBP m 40.0 23.5 2.83 % - - - - Other (EUR m) 76.4 -
Slide 40: Hedging and long term currency exposure - policies
Hedging and long term currency exposure - policies • EUR/NOK − Mowi shall hedge between 0% and 30% of its assumed annual expenses in NOK against the EUR with a horizon of two years. The annual hedging shall be evenly distributed across the months of the year • USD/CAD − Mowi shall hedge between 0% a
Slide 41: Strategic currency hedging
Strategic currency hedging EUR/NOK USD/CAD STRATEGIC CURRENCY HEDGING MEUR Rate MUSD Rate 2021 199.2 10.28 28.8 1.32 2022 199.2 10.92 37.2 1.34 P/L effect of contracts realized in Q4 (MEUR) -3.9 MEUR Market value 30/09/2020 -27.4 Change 30.2 Market value 31/12/2020 2.9 DESIGNATED MARKET CURRENCIES N
Slide 42: Thank you
Thank you