Leroy Seafood Group ASA · OSL:LSG
Leroy Seafood Group ASA — Lerøy Seafood Group — Q1 2010 Earnings Presentation
38 slides from Leroy Seafood Group ASA's earnings presentation, May 12, 2010
Slide 1: Lerøy Seafood Group Quarterly report First quarter 2010
Lerøy Seafood Group Quarterly report First quarter 2010 May 12th 2010 Helge Singelstad Chairman Henning Beltestad CEO Ivan Vindheim CFO 1
Slide 2: Agenda
Agenda 1 1. Considerations 2. 2 Key financial figures Q1 2010 3. 3 Lerøy at a glance 4. 4 Market glance 2
Slide 3: Highlights as of Q1 2010
Highlights as of Q1 2010 • Another good quarter profitwise • High salmon prices on the back of a significant decline in global supply and strong demand • However, relatively high proportion of contracts in Q1 • Cold winter, but biology satisfactory • Still significant regional differences • Seasonal
Slide 4: Internal considerations Q1 2010
Internal considerations Q1 2010 All figures in NOK mill Q1 2010 Q1 2009 Change 2009 2008 Change Turnover 1 873 1 522 23 % 7 474 6 057 23 % EBITDA 307 192 60 % 1 154 534 116 % EBIT bef adj biom 255 142 80 % 950 337 182 % PTP bef adj biom *) 267 124 115 % 927 201 361 % *) PTP = Pre-Tax Profit 4
Slide 5: Internal considerations Q1 2010
Internal considerations Q1 2010 • Production • In total, volumes in line with 2010E and seasonality • Overall, operations satisfactory • However, Lerøy Vest suffered from a cold winter and previous biological issues • Lerøy Hydrotech continues its operational improvements • In general, lower product
Slide 6: Internal considerations Q1 2010 cont’d
Internal considerations Q1 2010 cont’d Affiliated companies • Satisfactory biological performance • Significant increase in profit as a result of higher prices and volumes (Norskott/Scottish Sea Farms) • Financially solid • Net interest bearing debt significantly down in Q1 10 • High profit • Excell
Slide 7: External considerations Q1 2010
External considerations Q1 2010 • Demand and supply • Spot prices significantly up in Q1 10 on the back of global decline in supply of 9.6% • 23.6% Q1 10 vs Q4 09 • 20.5% Q1 10 vs Q1 09 • However, relatively high proportion of contracts resulted in lower price achievement in Q1 10 • Significant supp
Slide 8: Agenda
Agenda 1. 1 Considerations 2. 2 Key financial figures Q1 2010 3. 3 Lerøy at a glance 4. 4 Market glance 8
Slide 9: Income Statement Q1 2010
Income Statement Q1 2010 All figures in NOK 000 9
Slide 10: Key Figures Production Q1 2010
Key Figures Production Q1 2010 *) *) **) Lerøy Others / Total Total Figures NOKm Lerøy Midnor Hydrotech Lerøy Aurora Lerøy Vest elimination Q1 10 Q1 09 Revenues 239,2 149,9 102,0 222,2 124,6 837,9 719,5 EBIT before biom adj 89,7 48,9 29,1 48,6 2,7 218,9 119,1 RoS before biom adj 38 % 33 % 29 % 22 %
Slide 11: Key Figures Sales & Distribution Q1 2010
Key Figures Sales & Distribution Q1 2010 Sales & Total Total Figures NOKm Distribution Elimination Q1 10 Q1 09 Revenues 2 036,2 -167,1 1 869,0 1 466,8 EBIT 46,5 0,2 46,7 29,9 RoS 2,3 % 2,5 % 2,0 % • Taken account of seasonality, an extremely good performance 11
Slide 12: Norskott Havbruk
Norskott Havbruk LSG’s share = 50% NOKm Q1 2010 Q1 2009 2009 Revenues 285 185 922 EBITDA 83 43 212 EBIT bef adj biom 73 32 166 EBIT 119 50 166 Pre tax 116 47 155 Volumes (GWTk) 8,3 5,7 26,5 EBIT/kg 8,8 5,6 6,2 Balance sheet 31.03.10 31.03.09 31.12.09 Licences, goodwill 351 374 360 Tangible fixed ass
Slide 13: Balance Sheet Q1 2010
Balance Sheet Q1 2010 All figures in NOK 000 13
Slide 14: Cash Flow Statement Q1 2010
Cash Flow Statement Q1 2010 All figures in NOK 000 14
Slide 15: Key figures - Lerøy Seafood Group Q1 2010
Key figures - Lerøy Seafood Group Q1 2010 1) Resultatmargin = Resultat før skatt / Salgsinntekter Profit margin = Profit before tax / Revenues 2) Driftsmargin = Driftsresultat / Salgsinntekter Operating margin = Operating profit / Revenues 3) Resultat per aksje = Majoritetens andel resultat / Gjenno
Slide 16: Funding
Funding • Sound debt repayment profile • Bank loans and no material “balloons” NOK million 2010 2011 2012 2013 2014 Instalments 259 246 233 233 227 • Covenants NIBD/EBITDA < 5 and Equity ratio*) > 30% • Q1 2010, 0.9 and 63.1 % respectively • Satisfactory committed unused credit lines *) Adjusted for
Slide 17: Agenda
Agenda 1.1 Considerations 2.2 Key financial figures Q1 2010 3.3 Lerøy at a glance 4.4 Market glance 17
Slide 18: Lerøy Seafood Group - Global organization
Lerøy Seafood Group - Global organization Norway Farming Sweden Dist. & Sales Dist. & Sales Scotland/Shetland Farming Dist. & Sales Japan Portugal, Dist. & Sales Turkey France Dist. & Sales Dist. & Sales China Dist. & Sales North America Dist. & Sales Chile 18
Slide 19: Lerøy Seafood Group ASA
Lerøy Seafood Group ASA Sales & Distribution Production Affiliated Hallvard Lerøy AS Lerøy West Norskott Havbruk AS** 100% 100% 50% Lerøy Sverige AB Lerøy Mid-Norway Alfarm Alarko Lerøy*** 100% 100% 50% Lerøy North SAS Hallvard Lerøy 100% 100% Lerøy Fossen AS Nordvik SA = Salmon farming, processing
Slide 20: Lerøy Seafood Group
Lerøy Seafood Group • • Global distribution network • Global distribution from Head Office in Bergen • Local distribution and processing in Norway, Sweden, France, Portugal, and Turkey • Local representative offices in some key markets (France, Japan, China and USA) • 12.4% share of Norwegian seafoo
Slide 21: Lerøy Seafood Group
Lerøy Seafood Group • Fully integrated • From roe to the plate • Competent employees • Decentralized farming units • Autonomous units in three regions • In addition, the affiliated company Scottish Sea Farms in Scotland • Processing plants • Smokehouses • Fillets, portions etc • Post / pre-rigor • C
Slide 22: Lerøy Seafood Group
Lerøy Seafood Group • Market strategy: • Quality • Presence in major seafood markets • Branding • Diversity in product range • Diversity in customer base • Market-oriented solutions • Geographical spread • Continuity in deliveries • Cost efficiency 22
Slide 23: Lerøy Seafood Group - Sales per market Q1 10
Lerøy Seafood Group - Sales per market Q1 10 Rest of Europe Others 9,1 % 2,8 % USA and Canada 10,0 % EU 49,9 % Norway 17,1 % Asia Pacific 11,2 % 23
Slide 24: Lerøy Seafood Group - Sales per product Q1 10
Lerøy Seafood Group - Sales per product Q1 10 Salmontrout Shellfish 5,5 % Others Pelagic fish 3,2 % 4,6 % 1,0 % White fish 10,0 % Whole salmon 47,1 % Processed salmon 28,7 % 24
Slide 25: Farming Norway
Farming Norway • Lerøy Aurora AS (salmon) • Sigerfjord Aqua AS (Arctic char) • Lerøy Midnor AS (salmon) • Lerøy Hydrotech AS (salmon) • Lerøy Vest AS (salmon and trout) 25
Slide 26: Lerøy Seafood Group – Salmon/trout farming
Lerøy Seafood Group – Salmon/trout farming Company Ownership Licences Mill. smolt 2008 2009 2010E share No individuals GWT GWT GWT Lerøy Midnor AS 100 % 30 9,5 29 100 35 000 36 500 Lerøy Aurora AS 100 % 17 5,0 17 200 19 300 20 500 Lerøy Hydrotech AS 100 % 24 7,0 23 000 21 500 24 000 Lerøy Vest AS 10
Slide 27: Lerøy Seafood Group – Salmon/trout farming
Lerøy Seafood Group – Salmon/trout farming Company Ownership Volume Volume Share Rest Share share 2010E YTD Q1 % 2010E % Lerøy Midnor AS 100 % 36 500 7 400 20 % 29 100 80 % Lerøy Aurora AS 100 % 20 500 3 100 15 % 17 400 85 % Lerøy Hydrotech AS 100 % 24 000 4 600 19 % 19 400 81 % Lerøy Vest AS 100 %
Slide 28: Agenda
Agenda 1.1 Considerations 2.2 Key financial figures Q1 2010 3.3 Lerøy at a glance 4.4 Market glance 28
Slide 29: Jan-March 2009 vs Jan-March 2010
Market development for Atlantic Salmon from Norway. Jan-March 2009 vs Jan-March 2010 Volume 2009 Volume 2010 Change Value 2009 Value 2010 Change EU 128 461 141 582 10,2 % 3 447 221 4 236 415 22,9 % Others 19 857 30 710 54,7 % 537 206 936 582 74,3 % Japan 6 705 7 332 9,4 % 225 880 247 521 9,6 % Russi
Slide 30: Jan-March 2009 vs Jan-March 2010
Market development for Atlantic Salmon from Norway. Jan-March 2009 vs Jan-March 2010 "Others" Volume 2009 Volume 2010 Change Value 2009 Value 2010 Change Hongkong 3 220 4 205 30,6 % 86 102 149 854 74,0 % Ukraine 2 463 4 123 67,4 % 50 904 72 183 41,8 % China 2 181 3 943 80,8 % 56 727 116 875 106,0 %
Slide 31: SPOT prices, fresh Atlantic salmon, FCA Oslo
Avrg Q1 10 NOK 34.00 vs avrg Q1 09 NOK 28.22 (+20.5%) SPOT prices, fresh Atlantic salmon, cross-section, FCA Oslo, as of week 15-2010 (Superior quality). Avrg 2009 NOK 30.58 vs avrg 2008 NOK 25.75 (+18.7%) Q1-03 Q2-03 Q3-03 Q4-03 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 Q1-06 Q2-06 Q3-06 Q4-0
Slide 32: Atlantic salmon – Supply
Atlantic salmon – Supply in tons WFE Change Change Change Change Change Change Change Change 2003 02-03 2004 03-04 2005 04-05 2006 05-06 2007 06-07 2008 07-08 2009 08-09 2010 E 09-10 Norway 508 400 14,5 % 537 000 6% 572 200 7% 598 500 5% 723 300 20,9 % 741 000 2,4 % 855 700 15,5 % 938 600 9,7 % Unit
Slide 33: Atlantic salmon - Harvest Quantities World Wide
Atlantic salmon - Harvest Quantities World Wide in tons WFE Harvest quantities Atlantic Salmon World Wide (Kontali/Lerøy) 160 000 2% 0% 0% 150 000 ‐1 % ‐1 % ‐1 % ‐1 % ‐2 % ‐2 % 140 000 ‐2 % ‐3 % ‐4 % 130 000 ‐6 % 120 000 ‐7 % ‐7 % ‐8 % 110 000 ‐10 % 100 000 ‐12 % 90 000 ‐14 % ‐14 % ‐14 % 80 000 ‐16
Slide 34: Atlantic salmon - Harvest Quantities Europe
Atlantic salmon - Harvest Quantities Europe in tons WFE Harvest quantities Atlantic Salmon EUROPE (Kontali/Lerøy) 120 000 20 % 17 % 17 % 100 000 15 % 80 000 10 % 10 % 11 % 10 % 9% 8% 60 000 5% 40 000 4% 3% 1% 1% 0% 20 000 ‐2 % ‐ ‐5 % jan feb mar apr mai jun jul aug sep okt nov des Eur 2008 Eur 2009
Slide 35: Drivers Salmon as per 31.3.2010
Drivers Salmon as per 31.3.2010 Norway total export volume of Atlantic Salmon (214,590 MT WFE) + 22.3 % Norway total export value of Atlantic Salmon (NOK 6,500m) + 36.5 % Norway – EU (volume Atlantic Salmon) (141,582 MT WFE) + 10.2 % Norway – EU (value Atlantic Salmon) (NOK 4,236m) + 22.9 % Norway –
Slide 36: Going forward
Going forward •Competent organisation •Satisfactory financing •Normal capex “as is” •Operational improvements •Good demand for seafood •Improved profitability •Continued consolidations •Create sustainable shareholder value • Annual dividend since 1995 • NOK/share 7.0 in Q2 10 • Share liquidity • AUS
Slide 37: Product innovation!
Product innovation! 37
Slide 38: Thank you!
SEAFOOD INNOVATION SINCE 1899