Bakkafrost P/f · OSL:BAKKA
Bakkafrost P/f — Bakkafrost — Q3 2024 Earnings Presentation
47 slides from Bakkafrost P/f's earnings presentation, Nov 5, 2024
Slide 1: Q3 2024 Bakkafrost Group
Q3 2024 BAKKAFROST GROUP Oslo November 5th 2024
Slide 2: 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 3: Summary of Q3 2024
SUMMARY OF Q3 2024 MARKETS & SALES FINANCE OPERATIONS OUTLOOK APPENDIX
Slide 4: Highlights Q3 2024
HEALTHY LIVING HIGHLIGHTS Q3 24 (Q3 23) Revenues and Revenue of DKK 1,737 million (DKK 1,859 million) Operational EBIT Operational EBIT* of DKK 173 million (DKK 269 million) Harvest in the Faroe Islands: 21,618 tgw (16,740 tgw) Harvest in Scotland: 5,411 tgw (4,100 tgw) Feed sales: 41,513
Slide 5: Markets & Sales
SUMMARY OF Q3 2024 MARKETS & SALES FINANCE OPERATIONS OUTLOOK APPENDIX
Slide 6: Global Markets - Prices
GLOBAL MARKETS - PRICES HEALTHY LIVING LOW PRICES THROUGH THE QUARTER Spot prices (NASDAQ) on superior 4-5 [NOK/kg HOG] Average spot prices decreased in Q3 2024 Q1 Q2 Q3 Q4 150.00 (NOK/KG) 130.00 110.00 y/y: 78.71 -6,8% 73.33 90.00 (Q3 2023) -5.38 (Q3 2024) 70.00 q/q: 111.82 -34.4% 73.33 (Q2 2024) -
Slide 7: Global Markets - Sold Volume
GLOBAL MARKETS – SOLD VOLUME HEALTHY LIVING VOLUMES INCREASED BY 5% EU/UK: 8% consumption increase Salmon markets, sold quantity (head on gutted weight) Estimated volumes Q3 comparison Estimated volumes FY comparison In line with supply growth Markets Q3 2024 Q3 2023 Volume % H1 2024 H1 2023 Volum
Slide 8: Global Harvest
GLOBAL HARVEST HEALTHY LIVING VOLUME INCREASED BY 5% 5% increase in global harvest volume Supply Development Q3 2024 Q3 2023 Change % Increase in Europe – drop in Americas Norway 396 371 6.8 % UK 41 37 10.2 % Faroes 31 22 40.7 % Iceland 9 9 4.1 % 9% increase in European harvest volumes Ireland 4 4
Slide 9: Finance
SUMMARY OF Q3 2024 MARKETS & SALES FINANCE OPERATIONS OUTLOOK APPENDIX
Slide 10: Group Profit and Loss
GROUP PROFIT AND LOSS HEALTHY LIVING LOWER REVENUE AND OPERATIONAL EBIT Q3 2023 Q3 2024 (DKK million) Q3 24 YTD 24 Q3 23 YTD 23 Operating revenue 1,737 6,010 1,859 5,579 Revenue (mDKK) 1,859 -122 1,737 Operational EBITDA* 355 1,789 424 1,645 Operational EBIT* 173 1,270 269 1,188 Operational EBIT (mD
Slide 11: Operational EBIT and Adjusted Earnings per Share
HEALTHY LIVING OPERATIONAL EBIT* AND ADJUSTED EARNINGS PER SHARE** 710 587 565 407 418 376 388 353 356 325 248 269 Operational EBIT* 224 (mDKK) 182 173 103 89 120 71 2020 2021 2022 2023 2024 622 821 1,705 1,544 1,270 YTD 7.66 7.19 6.77 4.80 4.82 4.00 3.79 Adjusted EPS** 3.43 3.56 3.37 3.19 2.95 2.93
Slide 12: Balance Sheet
HEALTHY LIVING BALANCE SHEET Headlines (mDKK) (DKK million) Q3 24 End 2023 End 2023 Q3 2024 Intangible assets 4,515 4,509 Property, plant and equipment 6,575 6,220 PPE: 6,220 355 6,575 Right of use assets 349 413 Financial assets 289 289 Biological assets: 3,336* -734 2,602* Deferred tax assets 513
Slide 13: Cash Flow
HEALTHY LIVING CASH FLOW Q3 2023 Q3 2024 (DKK million) Q3 24 YTD 24 Q3 23 YTD 23 Cash flow, operations (mDKK) Cash flow from operations 575 2,287 185 1,135 185 390 575 Cash flow from investments -245 -723 -235 -741 Cash flow from financing -99 -1,136 -124 -742 Net change in cash 231 428 -173 -349 Ca
Slide 14: Net Interest-Bearing Debt (NIBD)
NET INTEREST-BEARING DEBT (NIBD) HEALTHY LIVING NIBD DECREASED DURING Q3 2024 NIBD was increased by: Development in NIBD in DKK millions 3,500 • Net investments (mDKK 245) 245 3,000 2,966 -245 2,710 2,500 -256 NIBD was decreased by: 2,000 • Change in working capital (mDKK -245) 1,500 • Operating Act
Slide 15: Operations
SUMMARY OF Q3 2024 MARKETS & SALES FINANCE OPERATIONS OUTLOOK APPENDIX Glyvrar, Faroe Islands
Slide 16: Performance per Region
HEALTHY LIVING PERFORMANCE PER REGION 16
Slide 17: FOF (Fishmeal, Oil and Feed)
FOF (FISHMEAL, OIL AND FEED) HEALTHY LIVING STRONG FEED SALES – SIGNIFICANT DROP IN FISH OIL PRICES Q/Q Q3 YTD Q3 YTD Raw material sourcing vs. Feed sale (tonnes) Volumes 200,000 50,000 change 2024 2024 2023 2023 Marine raw material sourced -63% 40,134 267,583 109,685 413,485 40,000 150,000 Feed sol
Slide 18: Freshwater - Faroe Islands
FRESHWATER – FAROE ISLANDS HEALTHY LIVING INCREASING SMOLT TRANSFER Q/Q Q3 YTD Q3 YTD Volumes change 2024 2024 2023 2023 Good capacity in hatcheries Transferred number of smolt (million) 48% 4.9 11.0 3.3 9.0 Strond Glyvradal Norðtoftir Viðareiði Average weight (g) 4% 423 409 405 407 Margin Operation
Slide 19: Freshwater - Scotland
FRESHWATER – SCOTLAND HEALTHY LIVING APPLECROSS RAMPING UP Q/Q Q3 YTD Q3 YTD Volumes change 2024 2024 2023 2023 Applecross hatchery: Transferred number of smolt (million) -24% 1.9 5.0 2.5 7.3 • Ramping up production Average weight (g) -23% 86 100 112 117 Margin • 6.2 million transferred in 2024 at a
Slide 20: Farming - Faroe Islands
FARMING – FAROE ISLANDS HEALTHY LIVING Q3 2024 SEVERELY IMPACTED BY EMPTYING FARMING SITE HIT BY ISA EARLIER IN Q2 Q/Q Q3 YTD Q3 YTD Negative impact from the Q2 ISA incident Volumes change 2024 2024 2023 2023 • 3.3 thousand tonnes harvested from A-19 at 3.3kg HOG Total harvest volume (tgw) 29% 21,61
Slide 21: Farming - Scotland
FARMING – SCOTLAND HEALTHY LIVING EXCEPTIONAL MORTALITY REDUCED 81% COMPARED TO Q3 2023 Q/Q Q3 YTD Q3 YTD Volumes Biology improving change 2024 2024 2023 2023 Total harvest volume (tgw) 32% 5,411 24,040 4,100 19,536 • Exceptional mortality of 34 mDKK (178 mDKK) Average harvest weight (kg) 38% 4.2 4.
Slide 22: Services
SERVICES HEALTHY LIVING EFFICIENT SEA LICE MITIGATION Q/Q Q3 YTD Q3 YTD Margin change 2024 2024 2023 2023 Services provided: Operational EBIT (mDKK) -10% 19 57 21 31 • Fish transportation Operational EBIT/KG (NOK) -27% 1.11 1.27 1.52 0.83 • Treatments Operational EBIT margin -2% 8% 8% 10% 5% • Farmi
Slide 23: Sales & Other
SALES & OTHER HEALTHY LIVING LESS VOLUMES FOR VAP (CONTRACTS) Q/Q Q3 YTD Q3 YTD Services provided: Volumes change 2024 2024 2023 2023 • Sales & Marketing Volume transferred to VAP (tgw) -36% 4,495 10,367 6,997 17,052 • Freight & Logistics Margin • Value added processing (VAP) Operational EBIT (mDKK)
Slide 24: Outlook
SUMMARY OF Q3 2024 MARKETS & SALES FINANCE OPERATIONAL UPDATE OUTLOOK APPENDIX Funningsfjørður, Faroe Islands
Slide 25: Outlook: Moderate Growth Expected
OUTLOOK HEALTHY LIVING MODERATE GROWTH EXPECTED Diminished growth expected in Europe TOTAL HARVEST ~5% growth in Q4 2024 1,600 10% 1,400 8% Low single digit growth expected throughout 2025 6% 1,200 4% 1,000 2% Mixed expectations in Americas 800 0% 600 -2% Continued drop expected during Q4 2024
Slide 26: Outlook: Growing Volume
OUTLOOK HEALTHY LIVING GROWING VOLUME Farming Contracts Harvest [gwt] Faroe Islands Scotland Total • For 2025, Bakkafrost intends to sign contracts covering 2024 plan 63,500 26,100 89,600 around 15% of the expected total harvest volumes. 2025 plan 77,000 23,000 100,000 Harvest plan 2025 Fishmeal, Oi
Slide 27: Appendix
SUMMARY OF Q3 2024 MARKETS & SALES FINANCE OPERATIONAL UPDATE OUTLOOK APPENDIX
Slide 28: Update on the 2024-2028 Capex Plan
UPDATE ON THE 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 Reprioritising CAPEX (Scotland) will reduce short-term capex: 2023 52,408t 20,598t • A
Slide 29: ~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 30: Value Chain Insight - Hatcheries for Smolt
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT HEALTHY LIVING LARGE HIGH-QUALITY SMOLT ARE THE KEY TO GROWTH AND IMPROVEMENT Average smolt weight New hatchery Current capacity (June 2023) 18 million smolt of 500g Glyvradal expansion Norðtoftir expansion Viðareiði expansion 500 500 395 Number of
Slide 31: Freshwater - Faroe Islands: New Hatchery at Skálavík
FRESHWATER – FAROE ISLANDS HEALTHY LIVING CONSTRUCTION STARTED OF NEW HATCHERY AT SKÁLAVÍK Existing hatcheries Gjógv Húsar Strond Glyvradal Norðtoftir Viðareiði Construction started of Skálavík hatchery • Same design as Glyvradal and Applecross • 3,500 tonnes capacity • Built in phases to allow earl
Slide 32: Large Smolt Strategy
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 33: Improvements of Large-Smolt Quality, Faroes
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT HEALTHY LIVING IMPROVEMENTS OF LARGE-SMOLT QUALITY, FAROES (2021G VS. 2020G) 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) 33
Slide 34: Farming Cycles Getting Shorter with Large Smolt
VALUE CHAIN INSIGHT HEALTHY LIVING 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 395g (2023) 34
Slide 35: Segment Overview
SEGMENT OVERVIEW HEALTHY LIVING VOLUMES, MARGINS AND KEY RATIOS FOF Freshwater Farming Services Sales & Other Q3 2024: Q3 2024: Q3 2024: Q3 2024: Q3 2024: Revenue = 740M Revenue = 219M Revenue = 1,100M Revenue = 237M Revenue = 2,488M Internal Feed sale = 40,667t Smolt transferred = 4.9M Harvest Volu
Slide 36: ISA Outbreak in Vágur A-19 in May 2024
ISA OUTBREAK IN VÁGUR A-19 IN MAY24 All fish harvested by Aug27 – final results: Anouncement from BAKKA 26.05.2024 Harvested number pcs: 1,020,000 Average weight: 3.3 kg HOG ISA virus found in two pens at farming site Total harvest volume: 3.330 tonnes A-19 Vágur HOG (vs planned 5,100 tonnes) • Test
Slide 37: Development in Supply and Sold Quantity by Origin
HEALTHY LIVING DEVELOPMENT IN SUPPLY AND SOLD QUANTITY BY ORIGIN Expected supply growth in 2024 Global Supply of Atlantic Salmon (head on gutted – HOG) 2019 2020 2021 2022 2023E 2024E Norway 1,198 1,226 1,383 1,359 1,329 1,355 3% increase in Global supply* UK 171 160 179 145 137 158 Ireland 14 14
Slide 38: Q3 2024 Prices
HEALTHY LIVING Q3 2024 PRICES Nasdaq spot price reflecting marginal pricing per week PRICE NORWAY (NOK/kg) 120 12 10 100 8 Statistics Norway (SSB) publish average price for all whole fish sold 6 per week 80 4 2 NOK Incorporates bilateral contracts of variable duration 60 0 -2 40 -4 -6 “Production
Slide 39: Development per Quarter
HEALTHY LIVING DEVELOPMENT PER QUARTER Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (mDKK) 2022 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 Revenue 1,639 1,684 1,867 1,940 2,050 1,670 1,859 1,562 2,206 2,067 1,737 Operational EBIT 418 587 325 376 565 353 269 356 710 388 173 Profit/Loss 405 845 249 -154 46
Slide 40: Dividend
HEALTHY LIVING DIVIDEND Dividend per share in % of adj. EPS* Dividend 99% • On 30 April 2024, the AGM decided to pay out a dividend on 8.70 DKK per share for the year 2023 59% 53% 49% 49% 50% 50% 50% 50% 50% 46% • Dividend payment equals 50% of adjusted EPS 40% • Dividend of 515M DKK was paid out on
Slide 41: 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 FCR 2023 Employees ultimo 2023 ~1,700 ~1.09 Converting low food value proteins into high volume & value healthy proteins in the Faroes Revenue 2023 (DKK) ~7.1 bn 100% ASC certified in the Faroes 750
Slide 42: Our Pillars and Values
HEALTHY LIVING OUR PILLARS AND VALUES 42
Slide 43: Q2 2024 - Reducing Costs in Scotland
Q2 2024 - REDUCING COSTS IN SCOTLAND HEALTHY LIVING ADAPTING CAPACITY TO NEED Processing facility at Marybank mothballed Sub-leasing excess • Around 75 employees affected (redundancy) vessel capacity: • Redundancy costs were accrued in Q2 2024 • Savings in H2 and onwards All harvest and processing w
Slide 44: Bakkafrost - Overview
HEALTHY LIVING BAKKAFROST – OVERVIEW 44
Slide 45: Bakkafrost - Farming Site Overview
HEALTHY LIVING BAKKAFROST – FARMING SITE OVERVIEW 45
Slide 46: Bakkafrost Salmon at a Glance
Bakkafrost salmon at a glance NUTRITION OMEGA-3 LEVELS OMEGA-3 70.6 VITAMIN D MEA RATIO. 2.58 1.4 10.1 ug PROTEIN LEVELS VITAMIN E LEVELS wht 21.0¢ 5.0 ug ver 1008 ver ob polseais fot2va SELENIUM YoDINE WEAN cons 0. 18 mg 0.05 mg ROI 0.06 mg ROIO.15 mg
Slide 47: Bakkafrost
\W// BAKKAFROST