Mowi Asa · OSL:MOWI
Mowi Asa — Q1 2021 Earnings Presentation
39 slides from Mowi Asa's earnings presentation, May 19, 2021
Slide 1: Q1 2021 presentation
Q1 2021 presentation CEO: Ivan Vindheim CFO: Kristian Ellingsen 19 May 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 • Q1 operational EBIT of EUR 109 million in line with trading update • Demand for salmon on the road to full recovery on less restrictive Covid-19 measures – Increasing prices during the quarter despite global supply growth of 14% • Record high Q1 harvest volumes of 125k GWT – Improved bi
Slide 4: Key financials
Key financials Mowi Group - main figures Q1 2021 Q1 2020 2020 Unaudited EUR million Operational revenue and other income 1 022.4 16 % 884.8 3 761.4 Operational EBITDA 1) 151.3 149.4 504.6 Operational EBIT 1) 109.2 0 % 109.3 337.7 EBIT 268.3 -54.1 183.5 Cash flow from operations 1) 168.7 184.4 331.5
Slide 5: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices • Prices in Q1 2021 down by 23% YoY in Europe on high global supply and Covid-19 restrictions 10 7 9 6 8 USD per lbs (Miami and Seattle) 7 5 6 EUR per kg (Oslo) 4 5 3 4 3 2 2 1 1 0 0 2016 2017 2018 2019 2020 2021 Ref. price Norway EUR (NASDAQ average superior
Slide 6: Price achievement, contract & superior share
Price achievement (1), contract & superior share 160 % 140 % 114 % 120 % 101 % 100 % 92 % 93 % 91 % 89 % 92 % 90 % 80 % 60 % 40 % 20 % 0% Norwegian Scottish Canadian Chilean Q1 2020 Q1 2021 Norwegian Scottish Canadian Chilean Q1-21 Contract share 21 % 43 % 3% 35 % Superior share 89 % 96 % 89 % 85 %
Slide 7: Operational EBIT comparison
Operational EBIT comparison 180 160 140 • Farming effect: 120 -2.1 109.2 109.3 -33.9 29.8 3.9 EUR million – Price: EUR -138m 100 (price achievement down 19% YoY) 2.3 80 – Cost: EUR 53m 60 – Volume: EUR 51m 40 20 0 Op EBIT Feed Farming Markets Consumer Other Op EBIT Q1 2020 Products Q1 2021 Page 7
Slide 8: Norway
Norway SALMON OF NORWEGIAN ORIGIN Operational Operational EBITEBIT Salmon Salmon of Norwegian of Norwegian Origin Origin EUR million Q1 2021 Q1 2020 Q1 2021 Q1 2020 vs Q1 vs Q1 2020 2021 Operational EBIT 73.2 83.7 100 EBIT 149.0 -49.0 80 Harv est v olume (GWT) 74 992 50 492 60 Operational EBIT per k
Slide 9: Norway: Operational EBIT/kg per region
Norway: Operational EBIT/kg per region 2.0 1.77 1.72 1.66 1.54 1.5 1.49 1.23 EUR per kg 0.98 1.0 0.63 0.5 0.0 South Mid North Total Q1 2020 Q1 2021 • Region South: Increased harvest volumes and improved cost • Region Mid: Increased volumes, however, early harvest related to gill issues. Improved cos
Slide 10: Norway: Sales contract portfolio
Norway: Sales contract portfolio 25 000 20 000 Contracted volumes (GWT) 15 000 10 000 5 000 0 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Realised contract volumes Contracted volumes (including prospects) • At the low end of contract share policy and positioned for continued Covid-19 recovery –
Slide 11: Scotland
Scotland SALMON OF SCOTTISH ORIGIN Operational EBIT Operational Salmon EBIT Salmonofof Scottish Origin Scottish Origin EUR million Q1 2021 Q1 2020 Q1Q12020 vs Q1 2021 2021 vs Q1 2020 Operational EBIT 26.6 5.7 30 EBIT 40.2 -18.2 Harv est v olume (GWT) 18 273 9 036 20 Operational EBIT per kg (EUR) 1.4
Slide 12: Canada
Canada SALMON OF CANADIAN ORIGIN Operational EBITEBIT Operational Salmon of Canadian Salmon Origin of Canadian Origin EUR million Q1 2021 Q1 2020 Q1 Q1 2020 vs Q1 2021 2021 vs Q1 2020 9 Operational EBIT -3.9 7.3 6 EBIT -10.9 -3.0 Harv est v olume (GWT) 10 741 8 066 3 Operational EBIT per kg (EUR) -0
Slide 13: Chile
Chile Operational Operational EBIT EBIT Salmon Salmon of Chilean of Chilean Origin Origin SALMON OF CHILEAN ORIGIN Q1 2021 Q1 2020 vs 2021 vs Q1 Q1 2020 EUR million Q1 2021 Q1 2020 20 Operational EBIT 7.8 16.6 EBIT 5.8 32.7 15 Harv est v olume (GWT) 19 405 13 669 10 Operational EBIT per kg (EUR) 0.4
Slide 14: Ireland and Faroes
Ireland and Faroes SALMON OF IRISH ORIGIN SALMON OF FAROESE ORIGIN EUR million Q1 2021 Q1 2020 EUR million Q1 2021 Q1 2020 Operational EBIT 5.3 -1.2 Operational EBIT 0.4 5.2 EBIT 4.8 13.0 EBIT 3.2 -4.3 Harv est v olume (GWT) 1 157 6 Harv est v olume (GWT) 901 1 851 Operational EBIT per kg (EUR) 4.55
Slide 15: Consumer Products
Consumer Products CONSUMER PRODUCTS • Seasonal record high volumes and earnings EUR million Q1 2021 Q1 2020 Operating rev enues 685.5 628.5 – Partly driven by Easter and Lent season Operational EBIT 32.2 2.4 Operational EBI T % 4.7% 0.4% • Mowi yet again capitalised on its integrated Operational EBI
Slide 16: Feed
Norway Feed FEED EUR million Q1 2021 Q1 2020 Operating rev enues 119.9 120.1 Operational EBIT -3.0 -1.0 Operational EBI T % -2.5% -0.8% EBIT -3.0 -1.0 Feed sold v olume 93 938 93 768 Feed produced v olume 100 296 99 370 • Stable production in a low season Scotland quarter • 96% self-sufficiency rate
Slide 17: Financials, Markets and Harvest volumes
Q1 2021 presentation Financials, Markets and Harvest volumes
Slide 18: Profit and Loss
Profit and Loss Mowi Group Q1 2021 Q1 2020 2020 EUR million Operational revenue and other income 1 022.4 16 % 884.8 3 761.4 • Positive net fair value adjustment of Operational EBIT 1) 109.2 0 % 109.3 337.7 biomass of EUR 88 million mainly Change in unrealized internal margin 10.2 -2.3 14.1 due to hi
Slide 19: Financial position
Financial position Mowi Group 31.03.2021 31.03.2020 31.12.2020 EUR million Non-current assets 3 448.7 3 210.7 3 337.3 Current assets 2 547.7 2 288.6 2 448.7 Total assets 5 996.4 5 499.3 5 846.1 Equity 3 051.2 2 624.2 2 764.1 Non-current liabilities 2 191.7 2 131.4 2 362.5 Current liabilities 753.5 7
Slide 20: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Mowi Group Q1 2021 Q1 2020 2020 EUR million • Seasonal release of working capital, NIBD beginning of period* -1 458.4 -1 337.2 -1 337.2 partly offset by tax payments Operational EBITDA* 151.3 149.4 504.6 Change in working capital 34.9 75.9 -56.9 Taxes paid -24
Slide 21: Overview financing
Overview financing • Total committed financing of EUR 1,956 million out of which approximately EUR 680 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 22: 2021 Cash Flow Guidance
2021 Cash Flow Guidance • Working capital build-up EUR ~110m – Expect tie-up in 2021 as Covid-19 market situation improves – Support further organic growth • Capital expenditures EUR ~265m – Freshwater investments EUR ~60m – Sea water expansion projects EUR ~40m – Consumer Products: Automation proje
Slide 23: Supply development
Supply development Estimated volumes Compared to Q1 2020 Est. volumes Suppliers Q1 2021 Q1 2020 Volume % Q4 2020 Norway 316 600 273 500 43 100 15.8% 364 800 Scotland 35 600 28 900 6 700 23.2% 42 000 Faroe Islands 20 300 15 600 4 700 30.1% 20 500 Other Europe 13 500 9 000 4 500 50.0% 12 500 Total Eur
Slide 24: Global volume development
Global volume development Estimated volumes Compared to Q1 2020 Est. volumes 12 month comparison Markets Q1 2021 Q1 2020 Volume % Q4 2020 LTM PTM % EU+UK 266 400 221 100 45 300 20.5% 313 000 1 115 400 1 014 400 10.0% Russia 22 100 16 300 5 800 35.6% 27 400 84 100 78 600 7.0% Other Europe 28 000 23 7
Slide 25: Global volume development and prices
Global volume development Q1 2021 Change vs Q1 2021 Change vs Market Q1 2020 EUR Q1 2020 Norway (1) EUR 5.20 -22.5% EUR 5.20 -22.5% Chile (2) USD 5.19 0.6% EUR 4.31 -8.0% Notes: Chile, GWT (3) USD 5.62 -7.3% EUR 4.66 -15.2% (1) NASDAQ average superior GWE/kg (gutted weight equivalent) North America
Slide 26: Industry supply growth 2021e
Industry supply growth 2021e 2018 2019 2020 2021 Estim ates 2021 GWT (1,000) Low Y/Y grow th High Y/Y grow th Norw ay 1 128 1 200 1 232 1 330 1 318 7% 1 343 9% UK 137 171 160 185 182 13 % 188 17 % Faroe Islands Other Europe* 65 25 78 36 73 42 90 55 88 53 21 % 25 % 92 57 27 % 35 % • 2021 guidance: To
Slide 27: Mowi volume guidance
Mowi volume guidance Atlantic salmon 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Q1 2021 Q2 2021 2021 GWT (1,000) Actual Actual Actual Actual Actual Actual Actual Guidance Guidance Norway 236.9 50.5 56.6 76.5 78.5 262.0 75.0 57.0 260.0 Scotland 65.4 9.0 14.6 16.1 13.0 52.7 18.3 20.0 60.0 Canada 54.4 8
Slide 28: Outlook
Outlook • We believe in a tighter market balance – Demand on the road to full recovery driven by less restrictive Covid-19 measures – Global supply growth projected to be only 2% for 2021 • Previous low price levels and a shift in demand towards more elaborated products expected to boost demand post
Slide 29: Appendix
Q1 2021 presentation Appendix
Slide 30: Nova Sea
Nova Sea Harv est v olume (GWT) EBI T per kg NI BD EURm Ownership % 2019 2020 Q1 2020 Q1 2021 2019 2020 Q1 2020 Q1 2021 Q1 2021 Nova Sea 48.5 % 45 962 42 584 9 283 10 524 2.41 1.70 2.96 1.63 -44.2 • Leading integrated salmon producer in Northern Norway − 33.33 wholly owned licenses − 4 partly owned
Slide 31: 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 32: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY Min hedging rate Max hedging rate (1) • Q2 2021 contract shares (% of guided volume): Norway (2) 0% 50 % − Norway 28% Scotland 0% 75 % Canada 0% 30 % − Scotland 45% (2) Chile 0% 50 % Ireland 0% 100 % − Canada 4% Faroes 0% 30 % − Chile
Slide 33: Quarterly segment overview
Quarterly segment overview SOURCES OF ORIGIN QTD EUR million Norway Scotland Canada Chile Ireland Faroes Other 1) Group OPERATIONAL EBIT FARMING 50.0 20.7 -6.0 -1.9 4.2 0.5 67.5 SALES AND MARKETING Markets 7.2 2.6 2.0 1.8 0.2 0.0 0.3 14.1 Consumer Products 17.3 4.9 0.2 7.9 1.0 0.0 1.0 32.2 SUBTOTAL
Slide 34: 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 Q1 Q2E 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 75.0 57.0 260.0 Scotland 45.0 60.2 38.4 15.8 15.9 19.6 14.0 65.4 9.0 14.6 16.1 13.
Slide 35: 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 36: Debt distribution and interest rate hedging
Debt distribution and interest rate hedging CURRENCY DEBT 2021 2022 2023 (1) CURRENCY 31.03.2021 Nominal (2) Fixed rate (3) Nominal (2) Fixed rate (3) Nominal (2) Fixed rate(3) EUR m 1 165.8 380.0 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) 79.9
Slide 37: 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 38: Strategic currency hedging
Strategic currency hedging EUR/NOK USD/CAD STRATEGIC CURRENCY HEDGING MEUR Rate MUSD Rate 2021 149.4 10.33 21.6 1.32 2022 199.2 10.92 42.3 1.33 2023 49.8 10.65 10.2 1.27 P/L effect of contracts realized in Q1 (MEUR) -0.5 Market value 31/12/2020 2.9 Change 20.3 Market value 31/03/2021 23.1 DESIGNATED
Slide 39: Thank you
MOQOWI Thank you