Mowi Asa · OSL:MOWI
Mowi Asa — Q4 2023 Earnings Presentation
50 slides from Mowi Asa's earnings presentation, Feb 14, 2024
Slide 1: Q4 2023 presentation
Q4 2023 presentation CEO: Ivan Vindheim CFO: Kristian Ellingsen 14 February 2024
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: 2023 was a record-year for Mowi
2023 was a record-year for Mowi Delivered on all three operational pillars – volume growth, cost and sustainability 550 • Another record-breaking year for Mowi on revenues, operational EBIT and volumes – Revenues EUR 5.5 billion (NOK 63 bn) 500 – Operational EBIT 1,028 million (NOK 11.7 bn) 500 – Ha
Slide 4: Highlights Q4 2023
Highlights Q4 2023 • Operational EBIT of EUR 203 million • Good prices in Europe whilst prices in Americas weak – Prices in Americas recovered YTD 2024 • Realised blended farming cost of EUR 5.58 per kg; in line with previous quarters in 2023 – Feed prices once again stable in the quarter – Realised
Slide 5: Key financials
Key financials Mowi Group - main figures Q4 2023 Q4 2022 2023 2022 Unaudited EUR million Operational revenue and other income 1,427.9 5% 1,361.8 5,513.4 11% 4,946.0 • FY 2023: Record-high revenues and Operational EBIT 1) 203.1 -15% 238.9 1,027.5 2% 1,005.1 Operational EBITDA 1) 253.1 284.0 1,221.0 1
Slide 6: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices • Seasonally strong European prices whilst prices in Americas weak • Two-way division of prices in 2023 from Q2; however, prices in Americas recovered YTD 2024 Americas Europe Chilean D-trim lbs, Canadian GWE 10-12 lbs 14 14 6 5.21 12 12 10.62 4.51 4.44 5 USD
Slide 7: Price achievement and contract share
Price achievement and contract share 140% 132% • Price achievement 10% better than 120% 115% 107% 106% 105% 104% reference price 100% 105% 100% • Group contract 80% share of 26% 60% 40% 20% 0% Norwegian Scottish Chilean Canadian Q4 2022 Q4 2023 Norwegian Scottish Chilean Canadian Q4-23 Contract shar
Slide 8: Operational EBIT comparison
Operational EBIT comparison • In EUR terms: -15% YoY – From EUR 239 million to EUR 203 million • However, in NOK terms quite stable – From NOK 2.5 billion to NOK 2.4 billion • Farming a mixed bag on seasonal biological issues compounded by El Niño • Continued strong operational performance in CP and
Slide 9: Norway
Norway SALMON OF NORWEGIAN ORIGIN Operational EBITEBIT Operational Salmon of Norwegian Salmon Origin of Norwegian Origin Q4 2023 Q4 2022 FY 2023 FY 2022 EUR million Q4 2022 vs Q4 Q4 2023 2023 vs Q4 2022 Operational EBIT 195.6 198.3 831.5 806.1 300 EBIT 212.0 219.3 853.4 933.6 250 Harv est v olume (G
Slide 10: Mowi Norway grown by 95,000 GWT organically since 2017
Mowi Norway grown by 95,000 GWT organically since 2017 to record-high 305,000 GWT in 2024E 350 • Record-high harvest volumes in 2023 330 of 295,000 GWT on strong growth in sea 310 305 Harvest volumes GWT (1,000) 290 295 • Maintain volume guidance of 270 305,000 GWT for 2024 250 – 95,000 GWT growth 2
Slide 11: Postsmolt to give further organic growth and improve biological metrics
Postsmolt to give further organic growth and improve biological metrics • Almost 30 million capacity or 50% Fjæra commissioned Nordheim under commissioning postsmolt ratio in Norway, excluding Region North, by 2024 Postsmolt Total smolt capacity Site Region Tonnes Tonnes Fjæra Region South 3,300 4,4
Slide 12: New primary processing plant in Region Mid, Norway
New primary processing plant in Region Mid, Norway • New primary processing plant at Jøsnøya, Hitra • Started commissioning in January 2024 • State-of-the-art 100,000 GWT facility to handle harvest volumes in Production Areas 6 and 7 – Replaced Ulvan factory, Frøya • In total NOK 2.5 billion in stru
Slide 13: Norway: Operational EBIT/kg per region
Norway: Operational EBIT/kg per region 3.0 • Low margin dispersion 2.62 2.65 2.70 2.5 2.41 2.21 2.35 2.28 • Good operational performance under 1.96 2.07 challenging environmental conditions 2.0 EUR per kg 1.5 1.47 – PD in Region North 1.0 – Apolemia / string jellyfish 0.5 – Winter sores 0.0 South We
Slide 14: Norway: Sales contract portfolio
Norway: Sales contract portfolio 25,000 20,000 Contracted volumes (GWT) 15,000 10,000 5,000 0 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Realised contract volumes Contracted volumes (including prospects) • 26% contract share for the fourth quarter • Maintained contract strategy for 2024 Page 14 Note: M
Slide 15: Scotland
Scotland SALMON OF SCOTTISH ORIGIN Operational OperationalEBIT EBITSalmon Salmon of of Scottish Origin Scottish Origin Q4 2023 Q4 2022 FY 2023 FY 2022 EUR million Q4Q42022 2023vsvsQ4 Q42023 2022 Operational EBIT -1.1 7.0 76.5 42.6 20 EBIT 3.3 22.7 76.0 54.3 15 Harv est v olume (GWT) 10 568 10 386 54
Slide 16: Biological turnaround of Scotland I: Postsmolt
Biological turnaround of Scotland I: Postsmolt • Increasingly challenging environmental conditions call for a more robust salmon and shorter production cycle • Thus, acquired the Dawnfresh bankruptcy estate’s trout sites in 2023 as a move into postsmolt farming – Loch Etive the largest brackish-wate
Slide 17: Biological turnaround of Scotland II: 100% self-sufficient for eggs
Biological turnaround of Scotland II: 100% self-sufficient for eggs • Another important part of Mowi Scotland’s biological turnaround plan is to become self- sufficient in eggs • Groundwork commenced for a brand new bespoke broodstock and egg facility at Ardessie, Northern Scotland • Ensures Mowi Sc
Slide 18: Chile
Chile SALMON OF CHILEAN ORIGIN Operational EBITEBIT Operational Salmon Salmonofof Chilean ChileanOrigin Origin Q4 2023 Q4 2022 FY 2023 FY 2022 EUR million Q4 Q4 2022 vs vs 2023 Q4Q42023 2022 Operational EBIT 10.8 19.9 60.5 76.9 30 EBIT -2.1 18.6 37.1 71.8 25 Harvest volume (GWT) 27 163 18 430 69 199
Slide 19: Canada
Canada SALMON OF CANADIAN ORIGIN Operational EBIT Salmon Q4 2023 Q4 2022 FY 2023 FY 2022 Operational EBIT SalmonofofCanadian Canadian Origin Origin EUR million Q4Q42022 vs Q4 2023 2023 vs Q4 2022 Operational EBIT -4.9 16.0 18.9 65.8 20 EBIT 4.3 -8.9 -3.3 7.1 15 Harv est v olume (GWT) 4 158 10 808 28
Slide 20: Ireland and Faroes
Ireland and Faroes SALMON OF IRISH ORIGIN SALMON OF FAROESE ORIGIN EUR million Q4 2023 Q4 2022 FY 2023 FY 2022 EUR million Q4 2023 Q4 2022 FY 2023 FY 2022 Operational EBIT -3.9 -3.1 8.9 1.2 6.0 Operational EBIT 7.5 5.5 32.4 19.6 EBIT -2.1 -6.5 3.1 2.4 EBIT 13.4 1.8 33.2 18.2 Harv est v olume (GWT) 1
Slide 21: Iceland (Arctic Fish)
Iceland (Arctic Fish) SALMON OF ICELANDIC ORIGIN EUR million Q4 2023 FY 2023 Operational EBIT 3.2 13.5 EBIT 3.1 -5.6 Harv est v olume (GWT) 2 529 11 878 Operational EBIT per kg (EUR) 1.28 1.14 - of which Feed 0.02 0.02 - of which Markets -0.42 -0.10 - of which Consumer Products 0.02 0.02 Price achie
Slide 22: Consumer Products
Consumer Products CONSUMER PRODUCTS EUR million Q4 2023 Q4 2022 FY 2023 FY 2022 Operating revenues 984.2 892.7 3,600.6 3,165.5 Operational EBIT 37.8 42.5 151.7 112.1 Operational EBIT % 3.8% 4.8% 4.2% 3.5% Operational EBIT % V AP only 4.5% 6.4% 4.7% 4.5% EBIT 30.5 42.3 143.9 107.0 V olume sold (tonne
Slide 23: Feed
Norway Feed FEED EUR million Q4 2023 Q4 2022 FY 2023 FY 2022 Operating rev enues 298.1 314.8 1,071.2 986.2 Operational EBITDA 16.0 21.4 52.1 47.0 Operational EBIT 11.9 17.4 35.5 30.8 Operational EBI TDA % 5.4% 6.8% 4.9% 4.8% Operational EBI T % 4.0% 5.5% 3.3% 3.1% EBIT 11.9 17.4 35.5 30.8 Feed sold
Slide 24: Financials, Markets and Harvest volumes
Q4 2023 presentation Financials, Markets and Harvest volumes
Slide 25: Profit and Loss
Profit and Loss Mowi Group Q4 2023 Q4 2022 2023 2022 EUR million Operational revenue and other income 1,427.9 5% 1,361.8 5,513.4 11% 4,946.0 • Positive net fair value adjustment on Operational EBIT 1) 203.1 -15% 238.9 1,027.5 2% 1,005.1 higher salmon prices Change in unrealized internal margin -5.2
Slide 26: Resource rent tax in Norway with effect from 2023
Resource rent tax in Norway with effect from 2023 22% 22% 22% 22% + 25% = 47% 22% 22% 22% Breeding Smolt Feed Sales & Seawater Harvesting Processing Marketing • Estimate for effective resource rent tax rate of about 10% for Mowi Norway across the value- chain – Earnings in the seawater phase subject
Slide 27: FX: Mowi Norway opportunity cost in Q4-23 versus NOK peers
FX: Mowi Norway EUR 31 million opportunity cost in Q4-23 versus NOK peers • Mowi is a EUR company – removes currency risk EURNOK 13 • Significant weakening of NOK since 2012 12 – EUR 54%, USD 86% 11 EURNOK 10 • Mowi Norway hedged away FX gain related to 54% timing difference between revenues and exp
Slide 28: Financial position
Financial position Mowi Group EUR million 31.12.2023 30.09.2023 31.12.2022 • Strong financial position Non-current assets 4 259.5 4 165.9 4 042.6 Current assets 3 979.5 3 527.6 3 488.7 Total assets 8 239.0 7 693.5 7 531.3 Equity 3 754.7 3 671.4 3 687.1 Non-current liabilities 3 219.3 2 757.5 2 355.7
Slide 29: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Mowi Group Q4 2023 Q4 2022 2023 2022 EUR million NIBD beginning of period* -1 705.5 -1 353.4 -1 758.9 -1 257.3 • Good earnings in the Operational EBITDA* 253.1 284.0 1221.1 1,179.4 quarter and for the year Change in working capital -105.6 -228.5 -173.5 -491.4
Slide 30: 2024 Cash Flow Guidance
2024 Cash Flow Guidance • Working capital build-up of EUR 140m due to biomass growth and growth through the value chain • Capital expenditure EUR ~300m (share higher in H1 vs H2 due to phasing of projects) – Freshwater investments EUR ~35m – Seawater investments EUR ~45m – Processing / Sales & Marke
Slide 31: Cost containment initiatives to combat cost pressure
Cost containment initiatives important to combat cost pressure driven by post-Covid inflation • Farming blended cost relatively stable before Development in blended Farming cost per kg for Mowi group 2022 7 5.62 6 5.09 • Significant inflationary pressure from 2022 5 4.26 4.37 4.47 driven by higher f
Slide 32: Realised EUR 55 million in cost savings in 2023
Realised EUR 55 million in cost savings in 2023 • Realised EUR 55 million in annualised cost savings Cost savings per year and business area (EUR million) in 2023, including 4% energy savings of 35 GWh and 50% cut in travel cost 186 • Initiating a new EUR 25 million cost savings programme for 2024 •
Slide 33: Delivering on the productivity programme – 2,189 FTEs so far
Delivering on the productivity programme – 2,189 FTEs so far • Productivity programme FTE reductions based on “as is” volumes – Salary and personnel expenses second largest cost item in Mowi; EUR 648 million in 2023 – Productivity increase of 15% 2023 vs 2019, i.e. delivering in excess of the 10% ta
Slide 34: Ocean-based Atlantic salmon farming is on the right side of sustainability
Ocean-based Atlantic salmon farming is on the right side of sustainability Rating agencies About the rating Score (1) Salmon is the most sustainable farmed animal protein alternative Mowi ranked as the most sustainable animal protein producer in the world (amongst the largest 60 animal protein produ
Slide 35: Overview financing
Overview financing • Bank Facility: EUR 2,000m sustainability-linked facility Share of sustainable funding – 5 years facility (Maturity: September 2026) – Covenant: 35% equity ratio (adjusted for IFRS 16 leasing effects) – Accordion option: EUR 100m – Lenders: DNB, Nordea, ABN Amro, Rabobank, Danske
Slide 36: Supply development
Supply development Estimated volumes Compared to Q4 2022 Est. volumes Suppliers Q4 2023 Q4 2022 Volume % Q3 2023 Norway 390,600 404,500 -13,900 -3.4% 371,100 Scotland 26,400 32,000 -5,600 -17.5% 37,000 Faroe Islands 25,300 27,200 -1,900 -7.0% 22,100 Other Europe 17,000 14,300 2,700 18.9% 12,600 Tota
Slide 37: Global volume development
Global volume development Estimated volumes Compared to Q4 2022 Est. volumes 12 month comparison Markets Q4 2023 Q4 2022 Volume % Q3 2023 LTM PTM % EU+UK 317,300 323,000 -5,700 -1.8% 306,600 1,082,300 1,137,300 -4.8% Russia 16,200 16,800 -600 -3.6% 19,200 61,400 51,800 18.5% Other Europe 25,000 28,5
Slide 38: Development in reference prices
Development in reference prices Q4 2023 Change vs Q4 2023 Change vs Market Q4 2022 EUR Q4 2022 • Seasonally strong European prices whilst prices in Norway (1) EUR 6.99 -0.7% EUR 6.99 -0.7% Americas weak Chile (2) USD 5.47 -7.0% EUR 5.08 -11.7% Chile, GWT (3) USD 6.14 -8.8% EUR 5.71 -13.4% • Two-way
Slide 39: Industry supply growth 2024e
Industry supply growth 2024e 2020 2021 2022 2023 2024E 2024E GWT (1,000) Low Y/Y growth High Y/Y growth • Low supply growth of 2% Norway 1,233 1,380 1,365 1,331 1,373 1,358 2% 1,388 4% UK 160 179 145 138 151 147 6% 155 12% expected in 2024 Faroe Islands 73 95 90 80 93 90 12% 96 19% Other Europe* 42
Slide 40: Mowi volume guidance all-time high
Mowi volume guidance all-time high Atlantic salmon 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 2024 GWT (1,000) Actual Actual Actual Actual Actual Actual Guidance Guidance Norway 293.7 65.6 61.5 86.2 81.2 294.5 58.5 305.0 Scotland 48.4 11.4 18.3 14.7 10.6 54.9 14.0 64.0 Chile 65.7 10.6 13.8 17
Slide 41: Outlook
Outlook • A record-breaking 2023 and a good start to the new year • Prices in Americas recovered YTD 2024 • Expect modest supply growth of 2% for 2024 • Mowi harvest volume guidance of 500k GWT in 2024 – a new milestone – Since 2018 growth of 125k GWT (equivalent to CAGR of 4.9% vs industry at 2.9%)
Slide 42: Appendix
Q4 2023 presentation Appendix
Slide 43: Nova Sea
Nova Sea Harv est v olume (GWT) EBI T per kg (EUR) NI BD EURm Ownership % 2022 2023 Q4 2022 Q4 2023 2022 2023 Q4 2022 Q4 2023 Q4 2023 Nova Sea 48.9 % 44 027 39 985 14 743 11 379 2.90 3.01 2.04 2.39 -25.3 • Leading integrated salmon producer in Northern Norway − 33.33 wholly owned licenses − 4 partly
Slide 44: 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 45: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY Min hedging rate Max hedging rate (1) • Q1 2024 contract shares (% of guided volume): Norway (2) 0% 50 % Scotland 0% 75 % − Norway 29% Chile (2) 0% 50 % − Scotland 60% Canada 0% 30 % Ireland 0% 100 % − Chile 46% Faroes 0% 30 % − Canad
Slide 46: Quarterly segment overview
Quarterly segment overview SOURCES OF ORIGIN QTD EUR million Norway Scotland Chile Canada Ireland Faroes Iceland Other 1) Group OPERATIONAL EBIT FARMING 113.1 -3.6 4.0 -6.2 -3.9 6.9 4.2 0.0 114.6 SALES AND MARKETING Markets 40.9 1.3 1.5 1.3 0.1 0.6 -1.1 0.0 44.6 Consumer Products 28.3 2.6 5.2 0.0 0.
Slide 47: FY 2023 segment overview
FY 2023 segment overview SOURCES OF ORIGIN YTD EUR million Norway Scotland Chile Canada Ireland Faroes Iceland Other 1) Group OPERATIONAL EBIT FARMING 532.9 57.6 32.1 14.8 0.3 30.2 14.5 682.4 SALES AND MARKETING Markets 151.2 9.4 3.9 4.2 0.9 1.6 -1.2 0.0 170.1 Consumer Products 107.4 13.6 24.5 0.0 0
Slide 48: Development in harvest volumes
Development in harvest volumes GWT 2019 2020 2021 2022 2023 2024E (1,000) Total Total Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1E Total Norway 236.9 262.0 273.2 59.4 59.8 87.4 87.1 293.7 65.6 61.5 86.2 81.2 294.5 58.5 305.0 Scotland 65.4 52.7 64.4 10.5 13.0 14.5 10.4 48.4 11.4 18.3 14.7 10.6 54.9
Slide 49: Cash flow guidance and historic developments
Cash flow guidance and historic developments Net capital expenditure Net working capital 450 600 Maintenance level 400 500 350 300 400 250 EUR million EUR million 200 300 150 200 100 50 100 0 0 2019 2020 2021 2022 2023 2024E 2019 2020 2021 2022 2023 2024E Financial commitments and cost of debt (*) 1
Slide 50: Thank you
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