Slide 1: Q2 2023 Presentation
24 AUGUST 2023 Q2 2023 Presentation CEO: FRODE ARNTSEN CFO: ULRIK STEINVIK
Slide 2: SalMar & Aqua Nor
SalMar & Aqua Nor • Aqua Nor - The world’s largest aquaculture technology exhibition – One of the most important meeting places for the industry – Held biannually in Trondheim, Central Norway • Natural for SalMar as the leading aquaculture company from the region to present its results at the exhibi
Slide 3: Agenda
Q 2 2 0 2 3 P R E S E N TAT I O N Agenda Highlights Q2 2023 Operational Update Financial Update Strategic Update Outlook 3
Slide 4: Highlights Q2 2023
Highlights Q2 2023 Harvest volume (1,000 tons gw) Group Norway1 • Strong results driven by continued high salmon prices 44.3 Δ QoQ Δ YoY 44.3 Δ QoQ Δ YoY – Central Norway with good operational performance results impacted by -4.2 +12.0 +2.3 +14.8 one-off costs – Strong results from Northern Norway –
Slide 5: Operational Update
Q2 2023 Operational Update
Slide 6: Farming Central Norway
Farming Central Norway Key Results Q2 2023 Q2 2022 YTD 2023 YTD 2022 Operating income (NOKm) 2,852 2,073 5,179 4,034 • Good operational performance Operational EBIT (NOKm) 1,108 1,213 2,217 2,138 • Increased cost QoQ Harvest volume (tgw) 28.3 20.7 50.5 45.6 – Lower average weight EBIT/kg (NOK) 39.1
Slide 7: Farming Northern Norway
Farming Northern Norway Key Results Q2 2023 Q2 2022 YTD 2023 YTD 2022 Operating income (NOKm) 1,542 917 3,424 2,180 • Good operational performance Operational EBIT (NOKm) 858 605 1,694 1,320 • Cost level reduced QoQ Harvest volume (tgw) 16.0 8.7 35.7 25.5 – NRS volume accounted for 15% EBIT/kg (NOK)
Slide 8: Sales & Industry
Sales & Industry Key Results Q2 2023 Q2 2022 YTD 2023 YTD 2022 Operating income (NOKm) 6,003 3,947 12,242 8,392 • Continued solid operational performance Operational EBIT (NOKm) -67 -781 -148 -1,153 – Operational set-up showcasing its strength Operational EBIT-margin (%) -1.1 % -19.8 % -1.2 % -13.7
Slide 9: Icelandic Salmon
Icelandic Salmon Key Results Q2 2023 Q2 2022 YTD 2023 YTD 2022 Operating income (NOKm) 26 349 791 716 • As expected very low harvest volume Operational EBIT (NOKm) -35 135 169 229 • Optimizing biological performance Harvest volume (tgw) 0.1 3.0 6.7 6.3 EBIT/kg (NOK) -384.6 45.5 25.4 36.2 Outlook • E
Slide 10: SalMar Aker Ocean
SalMar Aker Ocean Key Results Q2 2023 Q2 2022 YTD 2023 YTD 2022 Operating income (NOKm) 0 - 0 - • Third production cycle at Ocean Farm 1 commenced early May 2023 Operational EBIT (NOKm) -10 -39 -55 -73 Harvest volume (tgw) - - - - • Large potential for future value creation and volume growth EBIT/kg
Slide 11: Scottish Sea Farms
Scottish Sea Farms1 Key Results Q2 2023 Q2 2022 YTD 2023 YTD 2022 Operating income (NOKm) 692 884 1,197 1,523 • Low harvest volumes, harvesting from biologically Operational EBIT (NOKm) -144 190 -135 295 challenged sites affecting average harvest size, cost and price achievement Harvest volume (tgw)
Slide 12: Financial Update
Q2 2023 Financial Update
Slide 13: Resource rent tax on aquaculture in Norway
Resource rent tax on aquaculture in Norway • Tax approved 31 May 2023 in the Norwegian Parliament with a tax rate at 25% • High uncertainty regarding how the tax shall be calculated – Rules for tax calculation not finalized – Material implementation effect estimated in the financial statement for Q2
Slide 14: Group Profit & Loss
Group operational EBIT - QoQ - 139 Group Profit & Loss • Continued high salmon prices and slightly higher cost in value chain in Norway Norway • Reduction in operational EBIT QoQ driven by very low harvest volume from Iceland Group P&L NOK million Q2 2023 Q1 2023 Δ% YTD 2023 YTD 2022 Δ% Operating re
Slide 15: Group Balance Sheet
Group Balance Sheet Assets Equity ratio • Ongoing investments in the value chain progressing according to plan • Higher standing biomass QoQ and higher YoY • Dividend paid at 20 NOK/share • Equity ratio decreased to 35% • Net Interest-bearing debt (NIBD) including lease liablities increased with NOK
Slide 16: Net interest bearing debt
Net interest bearing debt Change in NIBD incl. leasing - QoQ • Net investments at NOK 584 million – Smolt NOK 145 million +1,483 -4,764 – Farming NOK 323 million – Sales & Industry NOK 101 million – Icelandic Salmon NOK 80 million – SalMar Aker Ocean NOK 15 million – Dividend received from Frøy NOK
Slide 17: Synergy realization and sale of Frøy
Synergy realization and sale of Frøy Progressing according to plan 76% of synergies with NTS, NRS and SalmoNor realized at Sale of Frøy completed in August 2023 the end of Q2 23 • Successful strategic review with strong interest • Realized 508 of 671 MNOK in yearly recurring cost savings • 72.11% ow
Slide 18: New financing in place
Overview Facilities1 Available liquidity1 New financing in place Green Bond Ensuring financial flexibility NOK 3.5 bn Ter K 6 bn bn • NOK 16 billion senior unsecured credit facilities NO mL NOK CF 10 100% R – 3+1+1 year Term Loan NOK 6 billion oan – 5+1+1 year RCF NOK 10 billion Unsecured – Accordio
Slide 19: Cancellation of treasury shares
Cancellation of treasury shares • As of Q2 2023 SalMar has 13.7 million treasury shares • Financial position in SalMar improved during 2023 – Sale of Frøy completed – New financing agreement in place – Debt level reduced, financial KPIs improved • The Board of SalMar propose to cancel 13.1 million t
Slide 20: Strategic Update
Q2 2023 Strategic Update
Slide 21: Central Norway and SalMar in the forefront of innovation and development
Central Norway and SalMar in the forefront of innovation and development in the aquaculture industry NTNU • Central Norway a strong hub for world leading aquaculture industry competence and expertise – Supplier Industry – Leading higher education institutes RAS facilities – R&D Institutions – Smolt
Slide 22: Tjuin – Worlds largest smolt facility
Tjuin – Worlds largest smolt facility • RAS facility located at Malm in Steinkjer Municipality – Close to existing smolt facility in Follafoss • First roe installed 28th of June 2023 – First batch to be transferred to sea in 2024 • Capacity to produce 20 million smolt @200g • Strengthening smolt cap
Slide 23: Several R&D projects in operation
Several R&D projects in operation • SalMar a frontrunner in testing out new technology – Ambition to increase operational efficiency through interaction with our existing value chain Aquatraz • Aquatraz - Semi-closed net pen – Previous development project – several cycles completed Neptun 4 • Neptun
Slide 24: Two offshore units in operation
Two offshore units in operation – SalMar pioneering and leading the development offshore Ocean Farm 1 Arctic Offshore Farming • 3rd production cycle started in May • Development project - 1st production cycle started in July • Located at Håbranden on Frohavet in Central Norway • Located at Felleshol
Slide 25: Outlook
Q2 2023 Outlook
Slide 26: Outlook
Outlook Guiding • Limited supply growth in 2023 Q3 2023 FY 2023 – Expect lower prices H2 23 vs. H1 23 due to seasonally higher volume Cost Harvest Contract Harvest Contract Level1 Volume1 share2 Volume share2 – Continued good demand for sustainable proteins Significantly Norway Same level Higher ~15
Slide 27: Thank you for your attention
Thank you for your attention Passion for Salmon For more information, please visit www.salmar.no FINANCIAL CALENDAR: Capital Markets Day – 6-7 September 2023 – Tromsø & Senja Q3 2023 presentation – 9 November 2023 – Oslo Q4 2023 presentation – 15 February 2024 – Oslo Annual Report 2023 – 19 April 20
Slide 28: Forward looking statements
Forward looking statements The statements contained in this presentation may contain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect current expectations and assumptions as to future events and circumstances that may not prove