Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Bakkafrost — Q1 2013 Earnings Presentation

30 slides from Bakkafrost P/f's earnings presentation, May 22, 2013

  1. Slide 1: Q1 2013 First Quarter Bakkafrost Group

    Q1 |2013 FIRST QUARTER BAKKAFROST GROUP Glyvrar 22 May 2013

  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: Summary of Q1 2013

     SUMMARY OF Q1 2013  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK 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 b

  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  ~55% of harvest volumes in Q1 2013  50% of farming licenses  Harvested 8,296 tgw in Q1 2013 (11,348 tgw in Q1 2012)  Feed sale of 14,906 tonnes in Q1 2013* (15,299 tonnes in

  5. Slide 5: Summary of Q1 2013

    SUMMARY OF Q1 2013 Margin  Strong results - Operational EBIT DKK 105m  Farming EBIT/kg NOK 14.95  Fishmeal, Oil and Feed 15.75% EBITDA margin  VAP negative EBIT/kg of NOK 5.44 Market  Improved salmon prices on back of reduced supply  Supply drop estimated to 3 - 5% in Q1 2013 compared to Q1 20

  6. Slide 6: Markets and Sales

     SUMMARY OF Q1 2013  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK 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 b

  7. Slide 7: Global Markets

    GLOBAL MARKETS Spot prices on fresh salmon 4-5 [NOK/kg HOG] 50,00  The NASDAQ prices for salmon increased in Q1 45,00 2013 by ~35% compared with Q1 2012 40,00 - from 26.39 to 35.75 NOK/kg 35,00 30,00  From a massive supply increase during 18 months up 25,00 to the third quarter in 2012, the global

  8. Slide 8: Low supply growth expected in 2013 and 2014

    LOW SUPPLY GROWTH EXPECTED IN 2013 AND 2014  We expect the global supply growth of Atlantic Global supply of Atlantic Salmon Salmon in 2013 to be only 2%: 2011E 2012E 2013E 2014E Norway 1.006 1.183 1.136 1.200  Negative growth of 4% in Europe and UK 157 155 150 160 Ireland 16 17 18 19  Growth of

  9. Slide 9: Markets & Sales

    MARKETS & SALES Overseas High-End markets dominated Q1 2013 Sales Q1 Q1 by markets 2013 2012 2012 2011  The demand in the US and Asian market dominated the sales in the first quarter EU 42% 58% 50% 60% USA 22% 11% 16% 23%  Eastern European market reduced from 15% in Q1 2012 to only 2% in Q1 2013 o

  10. Slide 10: Diversification and Positioning

    DIVERSIFICATION AND POSITIONING Market share, selected markets  Top Quality Salmon Salmon from the Faroe Islands Salmon from the Faroe Islands is building a strong 25% reputation as a boutique origin for top quality salmon  Limited volume (niche product) 20% Growing demand from existing and new ma

  11. Slide 11: Financial Highlights

    FINANCIAL HIGHLIGHTS Q1 Q1 Satisfying results at the given price level (DKK million) 2013 2012 2012 2011 Operating revenues 473.3 400.1 1,855.5 1,321.1  Strong salmon prices generated higher Operational EBITDA 125.9 79.7 403.3 402.5 revenues and EBIT Operational EBIT 105.0 60.0 323.0 335.1  Volume

  12. Slide 12: Key Financials, Group

    KEY FINANCIALS, GROUP Q1 Q1  Slightly lower cash flow from operations – (DKK million) 2013 2012 mainly due to increased inventory (raw Cash flow from operations 26.7 33.2 material at Havsbrún and biological assets) Total assets* 2,717.3 2,570.9  Total assets increased due to increase in inventory

  13. Slide 13: Farming – Harvest Volume

    FARMING – HARVEST VOLUME Q1 Q1 [tgw]* Harvested volume 2013 2012 2012 2011 West 3,939 10,019 20,847 9,586  Harvested volumes came down by 27% from 11,348 tgw in Q1 2012 to 8,296 tgw in Q1 2013 North 4,357 1,329 23,494 21,052  North 53% compared with 12% in Q1 last year Total 8,296 11,348 44,341 30

  14. Slide 14: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE (DKK million) Q1 2013 Q1 2012 Revenues and margin Operating revenues 425 312  Revenues increased in Q1 2013 compared with Q1 2012 from DKK 312 million to DKK 425 million Operational EBIT 125 49  Margin increased from 16% in Q1 2012 to 29% in Operational EBIT margi

  15. Slide 15: Segment VAP

    SEGMENT VAP Q1 2013 Q1 2012 Revenues and margin (DKK million) Operating revenues 148 121  Revenues increased 22% while volume increased 7% Operational EBIT -23 11  Margin went negative on back of dramatic price Operational EBIT margin -16% 9% increase in the salmon spot market VAP produced volumes

  16. Slide 16: Segment Fishmeal, Oil and Feed

    SEGMENT FISHMEAL, OIL AND FEED  Raw material intake for fishmeal/oil production Meal, Oil and Feed 30,938 tonnes in Q1 2013 compared with 23,514 tonnes in Q1 2012 Q1 Q1  Revenues increased 5% due to higher selling prices (DKK million) 2013 2012 from fishmeal, oil and feed Operating revenues* 157 1

  17. Slide 17: Group Financials

     SUMMARY OF Q1 2013  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK

  18. Slide 18: Group Profit and Loss

    GROUP PROFIT AND LOSS Q1 Q1  Revenue up 18% corresponding to DKK 73 (DKK million) 2013 2012 2012 2011 million) due to: Operating revenues 473 400 1,856 1,321  Improved market prices Operational EBITDA* 126 80 403 402 Operational EBIT* 105 60 323 335  Sale of salmon for 3rd party Fair value adjust

  19. Slide 19: Balance Sheet

    BALANCE SHEET (DKK million) Q1 2013 2012  Investments in PPE of DKK ~22 million in Q1 2013 Intangible assets 294 294 Property, plant and equipment 814 813  Higher carrying amount on inventory due to Financial assets 103 91 increase in raw material intake and higher inventory of raw material for fe

  20. Slide 20: Cash Flow

    CASH FLOW Q1 Q1 (DKK million) 2013 2012 2012 2011  Cash flow from operations in Q1 2013 hampered by Cash flow from operations 27 33 283 410 increase in inventory at Havsbrún Cash flow from investments -29 -17 -67 -723  Cash flow from investments represent payments for Cash flow from financing 101

  21. Slide 21: Bonds Issued in Q1 2013

    BONDS ISSUED IN Q1 2013 Bakkafrost entered the Norwegian bond marked  Bond’s raised in Q1 2013 of NOK 500 million,  3m NIBOR + 4.15% swapped into DKK and CIBOR 3m + 3.94%  Swapped into DKK to reduce currency risk.  DKK is Bakkafrost’s functional currency Purpose of the bond issue:  Increase sou

  22. Slide 22: Overview over Financing

    OVERVIEW OVER FINANCING Financing of the Group NIBD and available funding  Total funding increased from DKK 928 million to DKK1,428 million 1600 1400  Bond NOK 500 million due Feb 2018 (swapped into DKK) 1200  Instalment loan of DKK 375 million, repayable with DKK 25 million each quarter 1000 800

  23. Slide 23: Dividend

    DIVIDEND Dividend proposal Dividend history  Dividend of DKK 2.00 (NOK 2.04) per share paid out in Q2 2013 2012 2011 2010 Dividend (DKK mill.) 97 48 191 Dividend policy DPS (DKK) 2.00 1.00 3.91  Competitive return through: Adj. EPS** (DKK) 5.01 5.26 3.96  Dividends  Increase in the value of the

  24. Slide 24: Planned Investments in 2012 and 2013

    PLANNED INVESTMENTS IN 2012 AND 2013 Investments in PPE (DKK millon) Unchanged forecast on investments in PPE 200  Investments in 2013 of DKK 170 150  The investments are made in: 100  Hatchery division  Farming division 50  Fishmeal/oil and feed 0 2008 2009 2010 2011 2012 2013E  Harvesting di

  25. Slide 25: Outlook

     SUMMARY OF Q1 2013  MARKETS AND SALES  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  INVESTMENTS  OUTLOOK

  26. Slide 26: Outlook

    OUTLOOK  Good market outlook for Bakkafrost’s products  Increase in supply expected to be lower than increase in demand  27% of expected volumes for the rest of 2013 contracted per end Q1 as VAP products  Increased spot prices will give short term losses for VAP products  Estimated harvest of 4

  27. Slide 27: Thank You!

    \M// BAKKAFROST ESTABLISHED 1968 THANK YOU!

  28. Slide 28: Dividend

    DIVIDEND Dividend for 2012 DPS in % of adj. EPS * 100% 99% 90%  DPS of DKK 2.00 per share (NOK 2.04) 80% ~40 % of adjusted EPS 70%  For 2010 - 2012 49% of adj. EPS is paid out as dividend 60% 49% in addition to a significant acquisition made in 2011 50% 40% 40%  Double DPS in 2012, compared with

  29. Slide 29: Faroe Islands

    FAROE ISLANDS  18 islands – 1,387 km2  48,285 inhabitants (March 1st 2012)  Home rule – within the Kingdom of Denmark  Part of the Danish monetary union, Danish krone (DKK)  Key sectors (% of wage earners, 2011)  Service/public admin.: ~38%  Private service: ~33%  Fishing industry: ~15%  GD

  30. Slide 30: Largest Shareholders

    LARGEST SHAREHOLDERS 20 largest shareholders Share price development since listing in NOK 2013 1 SALMAR ASA NOR 25,21 2 Jacobsen Oddvør FRO 9,4 3 Jacobsen Johan Regin FRO 9,19 4 TF ÍLØGUR P/F FRO 5,02 5 PARETO BANK ASA NOR 4,66 6 MORGAN STANLEY & CO S/A MSIL IPB CLIENT NOM GBR 2,05 7 JPMORGAN CHASE

Bakkafrost — Q1 2013 Earnings Presentation on 6ix