Bakkafrost P/f · OSL:BAKKA
Bakkafrost P/f — Bakkafrost — Investor Day (June 2023)
109 slides from Bakkafrost P/f's investor day presentation, Jun 6, 2023
Slide 1: Capital Markets Day – Part 1
Bakkafrost presentation A world-class company in the salmon industry Capital Markets Day – Part 1 Scotland 6 June 2023 1
Slide 2: Bakkafrost - Faroe Islands
HEALTHY LIVING Bakkafrost - Faroe Islands Høgni Dahl Jakobsen CFO 2
Slide 3: Bakkafrost – Overview
HEALTHY LIVING BAKKAFROST – OVERVIEW
Slide 4: Bakkafrost – Farming Site Overview
HEALTHY LIVING BAKKAFROST – FARMING SITE OVERVIEW Inverness Applecross
Slide 5: Our Pillars and Values
HEALTHY LIVING OUR PILLARS AND VALUES 5
Slide 6: Farming salmon is a vulnerable process
HEALTHY LIVING FARMING SALMON IS A VULNERABLE PROCESS Good health is maintained when: • The salmon is robust • Environment is optimal and threats mitigated • Biological threats are well controlled 6
Slide 7: Salmon health hinges on unbroken chain of resources in the value chain
HEALTHY LIVING SALMON HEALTH HINGES ON UNBROKEN CHAIN OF RESOURCES IN THE VALUE CHAIN Farming process highly exposed to external variables Unbroken chain of resources required to control process Glitch in resources can cause material adverse effects, e.g. • Poor egg and smolt quality • Insufficient
Slide 8: State-of-the-art and fully integrated value chain
STATE-OF-THE ART AND FULLY INTEGRATED VALUE CHAIN HEALTHY LIVING STRONG CONTROL IN THE FAROE ISLANDS
Slide 9: Value chain insight – fishmeal, oil & feed
VALUE CHAIN INSIGHT – FISHMEAL, -OIL & FEED COMPETITIVE ADVANTAGE BY RICH ACCESS TO MARINE RAW MATERIAL Strategically well positioned near fishery Good sourcing of marine raw material Bakkafrost feed vs. conventional feed 400.000 12,6% 17,0% 350.000 270.000 14,3% 300.000 20,1% 250.000 20,0% Vegetabl
Slide 10: Value chain insight – broodstock
VALUE CHAIN INSIGHT - BROODSTOCK OWNERSHIP OF UNIQUE SALMON STRAINS Bakkafrost owns the Intellectual Rights of two origin-based salmon strains Broodstock programme Broodstock programme initially based Historical data since 1978 on wild salmon in outer Hebrides 400-500 families of fish in land-based
Slide 11: Value chain insight – hatcheries for smolt
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT LARGE HIGH-QUALITY SMOLT ARE THE KEY TO GROWTH AND IMPROVEMENT Average smolt weight New hatchery Current capacity 18 million smolt of 500g Glyvradal expansion Norðtoftir expansion Viðareiði expansion 500 500 X 400 424g Number of released smolt (1,00
Slide 12: Cracking the code for high-quality large smolt
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT CRACKING THE CODE FOR HIGH-QUALITY LARGE SMOLT 54% lower mortality with revised Effect of revised smolt production regime production regime on accumulated mortality (2021G) • Production of large smolt is complicated 18 16 • First generations in the Faroes d
Slide 13: Improved growth rate in H2 after revising smolt production regime
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT IMPROVED GROWTH RATE IN H2 AFTER REVISING SMOLT PRODUCTION REGIME Growth rate (TGC) Q2-Q4 2020G vs 2021G Revised production regime During the autumn, previous smolt generations 4 had low growth rate, higher mortality and more maturation issues 3,5 Growth Ra
Slide 14: Improvements of large-smolt quality
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT IMPROVEMENTS OF LARGE-SMOLT QUALITY (2020G VS. 2021G) 54% 13% Lower mortality Higher growth (number of fish) 4% Lower Feed Converstion Ratio (bio) 16% Lower Feed Converstion 32% Ratio (Eco) Lower mortality (biomass)
Slide 15: Continuously improving growth and reducing feed conversion ratio
VALUE CHAIN INSIGHT - FARMING CONTINUOUSLY IMPROVING GROWTH AND REDUCING THE FEED CONVERSION RATIO Growth 2018 – 2023 (TGC) Good growth rate 3,5 • Very strong development in growth 3,25 3 • Indication of good fish welfare and 2,75 strong biology 2,5 2,25 2018-Q1 2018-Q2 2018-Q3 2018-Q4 2019-Q1 201
Slide 16: Increasing survivability and reducing sea lice
VALUE CHAIN INSIGHT – FARMING INCREASING SURVIVABILITY AND REDUCING SEA LICE High survival rate* Bakkafrost Faroes – Survivability 2018 - 2023 • Survival rate ~95% in 2022 100 improved from 91.76% in 2021 • Our goal is above 95% survival to harvest * GSI calculation method 12m rolling 95 Sea lice
Slide 17: Farming cycles getting shorter with large high-quality smolt
VALUE CHAIN INSIGHT FARMING CYCLES GETTING SHORTER WITH LARGE HIGH-QUALITY SMOLT Large Smolt Strategy - Reduced biological risk - Increased production efficiency - Enables Sustainable Growth Faroes: Currently at 13 months in the sea 424g (Q1 2023)
Slide 18: Farming supply vessels
VALUE CHAIN INSIGHT FARMING SUPPLY VESSELS (A GROUP FUNCTION) Good capacity with treatment vessels, wellboats and now also with unique dual-treatment systems: • Combined treatment for gill-related issues and sea lice removal • Gentle treatment • Bakkafossur is able to do pre- treatment sorting of fi
Slide 19: VAP & processing – extended product range
VALUE CHAIN INSIGHT – VAP & PROCESSING EXTENDED PRODUCT RANGE VAP strategy (Share of harvest volume) 40% 60% Spot Contract (VAP) VAP production capacity in the Faroes equates to 40,000 tonnes HOG 19
Slide 20: Sales & logistics – one sales team covering all markets
VALUE CHAIN INSIGHTS - SALES & LOGISTICS ONE SALES TEAM COVERING ALL MARKETS Differentiation Markets served (2022) 67% 51% 27% 23% 15% 12% 7% 5% 0% 1% Western North Asia Eastern Other Europe America Europe Total Fresh 20
Slide 21: 5.6bn DKK of investment in the Faroes since 2013
INVESTMENTS IN A STATE-OF-THE-ART VALUE CHAIN IS KEY TO PERFORMANCE HEALTHY LIVING 5.6BN DKK OF INVESTMENT IN THE FAROES SINCE 2013 Past investments: 5.6bn DKK invested in the Faroe Islands since 2013 900 • Hatcheries RAS and advanced vaccination technology 800 delivering on the large-smolt strategy
Slide 22: Today – state-of-the-art assets in the Faroe Islands
TODAY HEALTHY LIVING STATE-OF-THE-ART ASSETS IN THE FAROE ISLANDS
Slide 23: Bakkafrost in the past
HEALTHY LIVING Bakkafrost in the past Odd Eliasen Managing Director 23
Slide 24: It was very different in the past
HEALTHY LIVING IT WAS VERY DIFFERENT IN THE PAST 24
Slide 25: 20-year history: ready, steady – go!
20-YEAR HISTORY: READY, STEADY – GO! HEALTHY LIVING RISING FROM THE DUST, GAINING STABILITY AND THEN GROW AND OUTPERFORM Faroese 120 industry (k tonnes hog) • The Faroese salmon industry re-organised after biological meltdown Growth • Industry consolidation to three operators 100 • Regulatory and op
Slide 26: Better margins than listed peers in past decade
HEALTHY LIVING IN PAST DECADE, BAKKAFROST DELIVERED BETTER MARGINS THAN LISTED PEERS Margin per kg [op.ebit NOK per kg] 45 40 35 30 25 20 15 10 5 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -5 BAKKA: Group BAKKA: Group (excl. SCT) Salmar NRS Grieg Leroy (excl. Whitefish) Mowi Avera
Slide 27: Bakkafrost also performs better than peers in the Faroe Islands
HEALTHY LIVING BAKKAFROST ALSO PERFORMS BETTER THAN PEERS IN THE FAROE ISLANDS Record high margin dkk 17.31 Margin per kg [op.ebit DKK per kg] per kg average 2014 - 2022 35 • Bakka dkk 21,58 /kg 30 • Luna dkk 15,12 /kg • Mowi dkk 14,98 /kg 25 20 15 10 5 0 Source: Annual reports 2014 2015 2016 2017 2
Slide 28: Suðuroy turnaround as proof-of-concept
A RECENT CASE-STORY: SUÐUROY TURNAROUND AS PROOF-OF-CONCEPT • In the past, Suðuroy was one of the weak performing area in the Faroe Islands • Many thought it was not viable to farm salmon in Suðuroy • In 2016, Bakkafrost took over all farming sites in Suðuroy • Since then, Bakkafrost has changed eve
Slide 29: Suðuroy = proof of concept
SUÐUROY = PROOF OF CONCEPT HEALTHY LIVING NOW ONE OF THE BEST Average number of days at sea Produced tonnes per day 650 14 12 Impacted by losses in 600 the storm Feb 2020 10 550 8 500 6 450 4 400 2 350 0 2013G 2014G 2015G 2016G 2017G 2018G 2019G 2020G 2021G 2013G 2014G 2015G 2016G 2017G 2018G 2019G
Slide 30: Best practices & well-invested value chain drives performance
PERFORMANCE HEALTHY LIVING BEST PRACTICES & WELL-INVESTED VALUE CHAIN DRIVES PERFORMANCE Smolt weight (g) (2021 Full Gen.) Biological Feed Conversion Ratio (2021 Full Gen.) Economic Feed Conversion Ratio (2021 Full Gen.) Bakkafrost Faroes 382 Bakkafrost Faroes 1,06 Bakkafrost Faroes 1,16 Norway 187
Slide 31: Scottish industry and Bakkafrost Scotland lagging behind
SCOTTISH INDUSTRY AND BAKKAFROST SCOTLAND GENERALLY LAGGING BEHIND HEALTHY LIVING A POOR PERFORMANCE IS A GOOD STARTING POINT FOR A TURNAROUND Margin comparison EBIT/kg HOG (NOK, 2022 generation) Bakkafrost Scotland has been under-resourced and under-invested Norway (Kontali) Bakkafrost Faroes Scott
Slide 32: Yield per smolt
YIELD PER SMOLT HEALTHY LIVING HIGH SURVIVABILITY AND HARVEST WEIGHT ARE FUNDAMENTAL The main cause for low yield per smolt is low survivability Survivability by generation (%) and low average harvest weight Norway (Kontali) Bakkafrost Faroes Scotland (Kontali) Yield pr. Smolt (kg HOG) Bakkafrost Sc
Slide 33: The upside in Scotland is significant
HEALTHY LIVING THE UPSIDE IN SCOTLAND IS SIGNIFICANT Higher growth in Scotland during the winter with warmer seawater 16,0 Requires: 14,0 12,0 Degree celsius • Good control of biological threats 10,0 8,0 • State of the art farming and surveillance equipment 6,0 4,0 • Sufficient treatment and transpo
Slide 34: Capital Markets Day – Part 2
Bakkafrost presentation A world-class company in the salmon industry Capital Markets Day – Part 2 Scotland 06 June 2023 1
Slide 35: Scotland
HEALTHY LIVING Scotland Ian Laister, Managing Director Dave Cockerill, Biology Director 2
Slide 36: Scottish operations overview
OVERVIEW HEALTHY LIVING SCOTTISH OPERATIONS Previous CMD Current 5 Years 7 sites 4 sites (+3rd parties) 2 / 3 sites Capacity 10.7k m3 Capacity 22k m3 You are Capacity to 62k+ m3 6.0m @ 85g 11m @ 150g here 42 Sites 37 active sites Applecross 34+ sites 69,037T Consent Consent+ (total consent: 86kt) 55
Slide 37: Our performance – 2021 to date
OUR PERFORMANCE – 2021 TO DATE HEALTHY LIVING SURVIVABILITY AND HARVEST WEIGHTS IMPACTING FINANCIAL RESULTS…BUT STRATEGY SHOWING IMPROVEMENT Leverage One Company MEAN WEIGHT Dual Treatment capacity Biology led harvesting Biology led harvesting Sales led harvesting REVENUE Focus on growth EBIT Gill &
Slide 38: EBIT analysis v Scottish peers
OUR PERFORMANCE – 2021 TO DATE HEALTHY LIVING EBIT ANALYSIS V SCOTTISH PEERS Structural differences to Scottish Peers: • Economies of scale • Geographic concentration • Marine resource • Reduced biological challenge (Northern Isles) • Historical investment • High quality smolt Insufficient FW and 3r
Slide 39: Investment prioritisation strategy
INVESTMENT TO MITIGATE RISK & DELIVER OUR STRATEGIC OBJECTIVES HEALTHY LIVING INVESTMENT PRIOITISATION STRATEGY 2020 2021 2022 2023E 2024E 2025E 2026E 2027E 2028E Planning & licencing RAS / Large smolt strategy Infrastructure upgrade, One Company Husbandry FSVs Harvest capacity/flexibility 6
Slide 40: Gill health is critical to growth & survivability
GILL HEALTH IS CRITICAL TO GROWTH & SURVIVABILITY HEALTHY LIVING BY FAR THE LARGEST DIRECT AND INDIRECT MORTALITY CAUSE Causes of mortality (count) Weak fish generally vulnerable during handling / transportation Gill Health (direct/indirect) Other handling Other causes of mortality include exposure
Slide 41: Implemented and planned measures to reduce biological risk
IMPLEMENTED AND PLANNED MEASURES TO REDUCE BIOLOGICAL RISK HEALTHY LIVING EXPECTED EFFICACY ON MORTALITY CAUSES 2020 2021 2022 2023 2024-2028 2026 Mortality 2019-2022 Seawater Full vessel Shortened Best Practice Own genetics / Havsbrún feed equipment treatment seawater cycles Share Mortality causes
Slide 42: Signs of improving biology
SIGNS OF IMPROVING BIOLOGY HEALTHY LIVING ENCOURAGING SIGNS OF PERFORMANCE FROM GENERATIONS IN SEA GILLS - 2023 RPL maintained at GILLS – 2023 mortality 45% LICE - 2023 maintained at lowest lowest ever recorded levels (-92%) lower than industry av. ever recorded levels (-50%) HARVEST - 2023 harvest
Slide 43: Our increased freshwater treatment capacity has improved gill health
OUR INCREASED FRESHWATER TREATMENT CAPACITY HAS IMPROVED GILL HEALTH HEALTHY LIVING BUT IT DOES NOT REMOVE ALL RISKS…. • Since Q4 2022, we have reported on the new capabilities for efficient and gentle dual-treatment for gill health (freshwater) and sea lice (FLS delousing) • Now permanently two Far
Slide 44: Large smolt will significantly tip the balance to reduced risk
MITIGATION OF MANY RISKS HAVE ALREADY BEEN IMPLEMENTED HEALTHY LIVING LARGE SMOLT WILL SIGNIFICANTLY TIP THE BALANCE TO REDUCED RISK Gill Health - Dual treatment FW / FLS (92% RPL / AGD reduction) Plankton - Aeration + Advanced detection Gill Health Better control of secondary AGD Sea lice - Dual tr
Slide 45: Our risk management journey
OUR RISK MANAGEMENT JOURNEY HEALTHY LIVING FRESHWATER & FARMING TRANSFORMATION 12
Slide 46: Large smolt reduces biological risk
LARGE SMOLT REDUCES BIOLOGICAL RISK HEALTHY LIVING EXTENDED RISK EXPOSURE IN THE MARINE PHASE DRIVES MORTALITY • Extended exposure to biological risks and stress leads to increased mortality • 2/3 of the mortality occurs in the second year at sea • Large smolt will reduce time at sea to around 12 mo
Slide 47: Large smolt strategy – delivering large healthy smolt
LARGE SMOLT STRATEGY HEALTHY LIVING DELIVERING LARGE HEALTHY SMOLT SMOLT CAPACITY 11m 14-15m 15m RAS 2 design & build Fairlie Hatchery 2 build AP Fairlie - Planning 8m smolt at 500g Post smolt 2 build AP 32,300m³ capacity Post smolt 1 build AP 100% smolt from RAS No 3rd party smolt Applecross - Cons
Slide 48: Large smolt and reduced risk
LARGE SMOLT….AND REDUCED RISK HEALTHY LIVING REDUCED EXPOSURE TO BIOLOGICAL & ENVIRONMENTAL RISK – ONE SUMMER 15% 500g smolt reduces exposure to the 2nd summer • Farming cycles reduce from up to 24 months, to around 12 10% Mortality [%] months First risk period Second risk period Benefits of ‘One Su
Slide 49: Large smolt and healthy growth
LARGE SMOLT….AND HEALTHY GROWTH HEALTHY LIVING TARGETING SIGNIFICANTLY REDUCED SEAWATER PHASE Growth / TGC • Driven by smolt weight and temperature • Scotland’s comparatively higher water temperatures provide an opportunity for growth • Good health (particularly Gill health) is fundamental to good g
Slide 50: Bakkafrost Scotland – large capacity headroom
HEALTHY LIVING BAKKAFROST SCOTLAND – LARGE CAPACITY HEADROOM Bakkafrost Scotland – Licence constraints and feasible production Priority for growth until 2028 Feasible harvest capacity using conventional farming • Stabilise and ensure profitability methods (100g smolt) • Best practice husbandry & str
Slide 51: Large smolt strategy – improved performance, cost
LARGE SMOLT STRATEGY HEALTHY LIVING IMPROVED PERFORMANCE - COST Cost principles – Harvest weight Cost principles – Large smolt 500g smolt drives: • More efficient utilisation of consent (yield) • Increased survivability • Reduced cost/kg Cost / kg diminishes with harvest size due to: • High asset ut
Slide 52: Starting harvest from larger smolt 2024 onwards
STARTING HARVEST FROM LARGER SMOLT HEALTHY LIVING 2024 ONWARDS • First release of large smolt expected Q3 2023 Average smolt size, smolt release and timing of harvest • First harvest from 250g smolt expected H2 2024 • A 250g smolt with a high TGC can grow to harvest weight above 5kg HOG, in around 1
Slide 53: Large smolt strategy – improved performance, price
LARGE SMOLT STRATEGY HEALTHY LIVING IMPROVED PERFORMANCE - PRICE Mean weight – Market level Mean weight – Leveraging our regions Underlying price (based on 2022 comparative MWs) Market price led (demand ahead of supply) +£1.5/kg Mean Weight led (higher MWs) +£0.6/kg Bakka premium led (Faroes origin
Slide 54: Summary: building a healthy business in Scotland
SUMMARY: BUILDING A HEALTHY BUSINESS IN SCOTLAND HEALTHY LIVING STRATEGIC OBJECTIVES CONVERTING TO FINANCIAL PERFORMANCE Feed Havsbrun 2026: 2028: efficiency feed >5kg 55kt HOG (HOG) 2028: Higher average Seal pro 15m harvest weight Production growth nets @500g Large smolt 2026: Aeration 90%
Slide 55: Capital Markets Day – Part 3
Bakkafrost presentation A world-class company in the salmon industry Capital Markets Day – Part 3 Scotland 6 June 2023 1
Slide 56: Sustainability
HEALTHY LIVING Sustainability Tordis Poulsen Group Sustainability Director 2
Slide 57: Sustainable growth is our responsibility
HEALTHY LIVING SUSTAINABLE GROWTH IS OUR RESPONSIBILITY The challenge Aquaculture production must continue to grow to meet the demand Given our location, it is our responsibility to the world to grow our production of sustainably produced healthy salmon. 3
Slide 58: Salmon is a very resource efficient source of healthy proteins
HEALTHY LIVING SALMON IS A VERY RESOURCE EFFICIENT SOURCE OF HEATHY PROTEINS 4
Slide 59: TCFD climate-related scenario analysis
TCFD CLIMATE-RELATED SCENARIO ANALYSIS HEALTHY LIVING PREPARING FOR THE FUTURE 5
Slide 60: Ambitious carbon reduction targets
HEALTHY LIVING BAKKAFROST HAS AMBITIOUS CARBON REDUCTION TARGETS 2030 Reduce scope 1 & 2 CO2 footprint by 50% Reduce scope 3 footprint by 52% per tonne sold product (2020 as baseline)
Slide 61: Healthy environment – status 2022
HEALTHY LIVING HEALTHY ENVIRONMENT - STATUS 2022 Bakkafrost total GHG emission 2022 23% 77% Scope 1&2 Scope 3
Slide 62: Sustainable transformation
SUSTAINABLE TRANSFORMATION HEALTHY LIVING INVESTING IN SCOPE 1 & 2 REDUCTION Grønarók – Fully electric workboat Powered electricity from surplus windpower Bakkafossur - 10,000m3 Wellboat with hybrid technology Fuel consumption reduced 20% Applecross hatchery 100% renewable energy & sustainable waste
Slide 63: Reducing our carbon footprint by taking control of air transport
HEALTHY ENVIRONMENT HEALTHY LIVING REDUCING OUR SCOPE 3 CARBON FOOTPRINT BY TAKING CONTROL OF AIR TRANSPORT Transport by air vs. sea/land 81% 78% 79% 67% 33% 19% 22% 21% 2019 2020 2021 2022 Air Sea/road
Slide 64: Building partnerships – Supplier Day
BULIDING PARTNERSHIPS HEALTHY LIVING REDUCING SCOPE 3 Bakkafrost Supplier Day Mobilizing strategic suppliers on sustainability topics, including climate change and carbon reduction. 10
Slide 65: Circular economy – biogas plant
CIRCULAR ECONOMY HEALTHY LIVING OUR BIOGAS PLANT REDUCES CARBON FOOTPRINT Now also converting food waste to renewable energy
Slide 66: Committed to reach our carbon reduction targets
HEALTHY ENVIRONMENT HEALTHY LIVING WE ARE COMMITTED TO REACH OUR CARBON REDUCTION TARGETS Capex 2024-2028 includes 355 mDKK dedicated for Energy Transition
Slide 67: Capex 2024-2028
HEALTHY LIVING Capex 2024-2028 Regin Jacobsen CEO 13
Slide 68: Summary of recent investments
HEALTHY LIVING SUMMARY OF RECENT INVESTMENTS Examples 4.0bn DKK invested past 5 years (Bakkafrost Group) Strond Norðtoftir Glyvradal Applecross 1.400 1.200 1.000 Investments (mDKK) 800 Viðareiði Feed line (machinery) Førka Biogas expansion 600 400 200 - 2018 2019 2020 2021 2022 Bakkafossur Bakkanes
Slide 69: 2024-2028 capex plan – investing in sustainable growth
2024-2028 CAPEX PLAN - INVESTING IN SUSTAINABLE GROWTH HEALTHY LIVING 165,000 TONNES HARVEST IN 2028, FAROE ISLANDS AND SCOTLAND COMBINED 2024-2028 Capex* of DKK 6.3 bn Volumes Faroe Islands Scotland 1.800 16,00 2023 68,000t 30,000t 1.600 14,00 1.400 12,00 Investments per kg (DKK) 2026 95,000t 45,00
Slide 70: ~6.3bn planned investments 2024-2028
~ 6.3BN PLANNED INVESTMENTS 2024-2028 HEALTHY LIVING REDUCE BIOLOGICAL RISK, IMPROVE EFFICIENCY AND INCREASE ORGANIC GROWTH Faroe Islands: 2024-2028 capex plan vs. 2022-2026 capex plan 1.800.000 • Hatchery capacity of 24m smolt at 500g in 2028 1.600.000 • Cost-efficient broodstock (repurposing old h
Slide 71: Freshwater – increased hatchery capacity
FRESHWATER HEALTHY LIVING INCREASED HATCHERY CAPACITY IN BOTH REGIONS – MORE COST-EFFICIENT BROODSTOCK IN THE FAROE ISLANDS Faroe Islands Scotland Broodstock Expansion 5-6 of Gjógv & Húsar, hatcheries repurposed Applecross 5-6 hatchery for broodstock 7m smolt at 500g 29,300m³ capacity Production in
Slide 72: Marine – cost-efficient organic growth
MARINE HEALTHY LIVING PICKING LOW-HANGING FRUITS TO ENSURE COST-EFFICIENT ORGANIC GROWTH Faroe Islands Scotland • Site optimization • New barges • New sites within existing licenses • New sites & site extensions • Maintenance • Maintenance • Offshore farming on hold Optimization examples Cycle [mths
Slide 73: Marine – Faroe Islands
MARINE – FAROE ISLANDS HEALTHY LIVING PICKING LOW-HANGING FRUITS TO ENSURE COST-EFFICIENT ORGANIC GROWTH Growing with optimization and “new technology” Potential new site locations (Closed/semi-closed, submersed, current deflectors) • Cost-efficient organic growth within existing licenses (long-term
Slide 74: Harvest & processing
HARVEST & PROCESSING HEALTHY LIVING INCREASING HARVEST CAPACITY IN FAROES – NEW HIGH-CAPACITY FACILITY IN SCOTLAND WITH NEW CAPABILITIES Marybank (Stornoway) 81 tonnes/day gutted wt Current 2024-2028 Capex • Two processing facilities • New highly automated efficient Arnish high quality focused proce
Slide 75: Fishmeal, oil and feed
FISHMEAL, -OIL AND FEED HEALTHY LIVING INCREASING ANNUAL FEED PRODUCTION CAPACITY TO 275KT, WHILE PREPARING FOR 400KT • New feed line (275kt capacity) • Factory building space for 400kt • Raw material silos • Increased tank capacity for oils • Expansion of storage tunnels in the mountain • Extending
Slide 76: Energy transition
ENERGY TRANSITION HEALTHY LIVING 355M DKK DEDICATED TO REDUCING CARBON EMISSION CO2 emissions - 2022 • The fishmeal, -oil and feed production accounts for most of our CO2 emission, followed by the hatcheries and FSV’s • To reach our CO2 reduction targets, 108m DKK have been allocated a energy transi
Slide 77: Further uplift in capacity and better balance across the value chain
FURTHER UPLIFT IN CAPACITY AND BETTER BALANCE ACROSS THE VALUE CHAIN HEALTHY LIVING VALUE CHAIN SYNCRONISED AT 200KT HOG HARVEST CAPACITY IN 2028 Development in value chain capacity Value chain synchronised at 200kt capacity in 2028 2018 2022 2026 2028 Prepared for • Extra capacity as “insurance” &
Slide 78: Financial position & Tax
HEALTHY LIVING Financial position & Tax Høgni Dahl Jakobsen CFO 24
Slide 79: Strong financial position
HEALTHY LIVING STRONG FINANCIAL POSITION • Bakkafrost has relatively low debt compared to listed peers in Norway Financing • Sustainability linked bank facilities of EUR 700 • Dividend policy is unchanged (30-50% of adjusted EPS paid as dividend) million, and an accordion of EUR 150 million. Profit
Slide 80: Local footprint
LOCAL FOOTPRINT HEALTHY LIVING BAKKAFROST IS A SIGNIFICANT CONTRIBUTOR TO THE LOCAL COMMUNITIES (2022)
Slide 81: The Faroese revenue tax has been adjusted
THE FAROESE REVENUE TAX HAS BEEN ADJUSTED HEALTHY LIVING EFFECTIVE FROM 1. AUGUST 2023 Main changes Revenue tax adjustments from 1 April 2023 • Reduced tax at low salmon prices 25,0% • Increased tax at higher salmon prices 124 NOK • 9 tax rates applicable, depending on the difference 20,0% between a
Slide 82: Bakkafrost's new segments
HEALTHY LIVING BAKKAFROST’S NEW SEGMENTS 7 segments: • FOF • Freshwater FO • Freshwater SCT • Farming FO • Farming SCT • Services • Sales & Other
Slide 83: Market & Sales
HEALTHY LIVING Market & Sales Símun P. Jacobsen Group Sales Director 29
Slide 84: Market outlook
MARKET OUTLOOK HEALTHY LIVING KONTALI PREDICTS LIMITED SUPPLY – IMPLIES TIGHT MARKET Global Harvest growth 2022-2027 estimated to be 3.7% CAGR Market balance at ~6-7% growth 3.000 2.500 2.000 1.500 1.000 500 - 2018 2019 2020 2021 2.022 2023E 2024E 2025E 2026E 2027E Norway Chile UK North America Faro
Slide 85: Sales & marketing – branding strategy
SALES & MARKETING HEALTHY LIVING CLEAR BRANDING STRATEGY, FOCUSING ON THE CORPORATE BRAND AND ORIGIN • One common main brand in B2B: BAKKA SALMON From the Faroe Islands Or From Scotland • Changed branding strategy has increased flexibility and yields synergy effects 31
Slide 86: One sales organisation = many benefits
SALES & MARKETING HEALTHY LIVING ONE SALES ORGANISATION = MANY BENEFITS One Management One Global Team Faroes, Scotland, US, France, Denmark One Common System Processes Achieving synergies, flexibility and higher market value when sales from two origins is coordinated (w1-20 2023 vs. w1-20 2022) Fre
Slide 87: Similar brand premiums in both regions
SALES & MARKETING HEALTHY LIVING SIMILAR BRAND PREMIUMS IN BOTH REGIONS, BUT SOME VALUE IS LOST IN SCOTLAND Comparing price achievement reveals issues and opportunities Opportunities in Scotland • Both regions achieve significant brand premium • Improved biology will reduce downgrades and increase h
Slide 88: One Company
HEALTHY LIVING One Company Heini S. Kristiansen Group HR Director 34
Slide 89: Organisational design – simpler and slimmer
ONE COMPANY HEALTHY LIVING ORGANISATIONAL DESIGN – SIMPLER AND SLIMMER THAN BEFORE Management and functional alignment Group admin and support functions Centre of Havsbrun Centre of excellence excellence Group FSV Group Harvest & VAP Group Sales Systems & Core systems Core systems Process 35
Slide 90: Restructure
ONE COMPANY HEALTHY LIVING RESTRUCTURE Goal: ‘One Company’ and ‘One Team’ with an aligned business strategy Scotland structure review and new Target Operating Model Headcount in Scotland reduced by 10% Restructure process concluded by end Q1 of 2023. Now looking forward Integration – Core systems, a
Slide 91: Our People
ONE COMPANY HEALTHY LIVING OUR PEOPLE 37
Slide 92: Market outlook – Applecross
HEALTHY LIVING MARKET OUTLOOK Applecross The future lies ahead 38
Slide 93: Q&A
\Wi/ BAKKAFROST = C6006 HEALTHY LIVING Q&A ‘Tasty, Healthy & Sustainable Salmon
Slide 94: Disclaimer
HEALTHY LIVING DISCLAIMER This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements. No representation or warranty (expressed or implied
Slide 95: Capital Markets Day – Part 4 (Site visit at Applecross)
HEALTHY LIVING Bakkafrost Scotland presentation Capital Markets Day – Part 4 (Site visit at Applecross) 06 June 2023
Slide 96: Welcome to Scotland
HEALTHY LIVING WELCOME TO SCOTLAND Scotland Video This is a very special place – apart from our developments that you will see today this area is known for: • Torridon National Park to the North is an ancient and enchanting wilderness of water and rock, parts of the rocky landscape are over 2,600 mi
Slide 97: Our Pillars and Values
HEALTHY LIVING OUR PILLARS AND VALUES 3
Slide 98: Overview
HEALTHY LIVING OVERVIEW Previous CMD Current 5 Years 7 sites 4 sites (+3rd parties) 2 sites You are Capacity 10.7k m3 Capacity 22k m3 Capacity to 62k+ m3 here 6.0m @ 85g 11m @ 150g+ 15M @ 500g Applecross 42 active sites 37 active sites 37 sites (6 prospects) 69kT Consent Consent opportunity (total c
Slide 99: Our risk management journey
OUR RISK MANAGEMENT JOURNEY HEALTHY LIVING FRESHWATER & FARMING TRANSFORMATION 5
Slide 100: Case study: multi award winning native Hebridean
CASE STUDY HEALTHY LIVING MULTI AWARD WINNING NATIVE HEBRIDEAN Production Refresh Further Develop Grow • Broodstock programme • Genetics - continuous QTL evaluation • Robust stock with consistent availability and develop unique attributes 1 2 3 Sales Developing the story & Positioning Raise the prof
Slide 101: Dual treatment – FW / FLS is a game changer
CASE STUDY HEALTHY LIVING DUAL TREATMENT – FW / FLS IS A GAME CHANGER Gentle and efficient treatment solution with a focus on fish welfare • 100% natural • high capacity • excellent for fish welfare • removes nearly 100% lice • reduces resettlement of lice • onboard freshwater regeneration LICE – Av
Slide 102: Large smolt strategy – delivering large healthy smolt
LARGE SMOLT STRATEGY HEALTHY LIVING DELIVERING LARGE HEALTHY SMOLT SMOLT CAPACITY 11m 14-15m 15m RAS 2 design & build Fairlie Hatchery 2 build AP Fairlie - Planning 8m smolt at 500g Post smolt 2 build AP 32,300m³ capacity Post smolt 1 build AP 100% smolt from RAS No 3rd party smolt Applecross - Cons
Slide 103: Fairlie RAS – design & planning stage
FAIRLIE RAS HEALTHY LIVING DESIGN & PLANNING STAGE Planning stage • Pre-planning - complete • Planning and ground works – est. Q2 2024 • Build – est. 2 to 3 years Production capacity • 8m smolt @ 500g • 32,300m³ tank capacity Sustainability • 5T/day waste converted to fertiliser • Water usage 82m³/h
Slide 104: Applecross RAS – commissioning / under construction
APPLECROSS RAS HEALTHY LIVING COMMISSIONING / UNDER CONSTRUCTION 19th Century Ancient 1980’s largest hatchery in Scotland, crofting settlement, excellent water quality Applecross - Post Smolt 1 Applecross - Post smolt 2 / Hatchery architectural preservation Production capacity • 7m smolt at 500g • 2
Slide 105: Applecross RAS built upon our pillars of sustainability
APPLECROSS RAS HEALTHY LIVING BUILT UPON OUR 5 PILLARS OF SUSTAINABILITY Community Engagement - Hydro project Optimise welfare & quality growth Hydro scheme developed with Applecross Trust The latest RAS technology to provide a (crofting) and local enterprises, linked by 31km private biosecure envir
Slide 106: Post smolt commissioning timeline
POST SMOLT 1 HEALTHY LIVING COMMISSIONING TIMELINE AP4-16 Completion Timeline Month Ending: Week Commencing: Month Ending: Key Milestone: Jan-23 Feb-23 Mar-23 Apr-23 May-23 29-May-23 05-Jun-23 12-Jun-23 19-Jun-23 Jul-23 Aug-23 Sep-23 Construction Complete 100% Power Supply & Commissioning 100% Biofi
Slide 107: Applecross site
HEALTHY LIVING APPLECROSS SITE Hatchery 2 Smolt 1 Site visit Hatchery 1 start Smolt 2 You are here Post Smolt 1 Post Smolt 2 You are here 13
Slide 108: Afternoon plan
HEALTHY LIVING AFTERNOON PLAN Colour coded Groups - Blue, Red, Yellow, Green • Please remember this is a working site and Port, appropriate PPE must be worn (bump caps / high-vis vests) To start: • Freshwater – minibus • Couldoran Hatchery (Red) • Biosecurity is managed, but please keep to the • App
Slide 109: Disclaimer
HEALTHY LIVING DISCLAIMER This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements. No representation or warranty (expressed or implied