Mowi Asa · OSL:MOWI
Mowi Asa — Marine Harvest — Debt Investor Presentation (May 2018)
33 slides from Mowi Asa's debt investor presentation, May 2018
Slide 1: Marine Harvest Fixed income investor meetings
Marine Harvest Fixed income investor meetings May 2018 1
Slide 2: Transaction summary
Transaction summary Issuer: Marine Harvest ASA First Tranche: Minimum EUR [●] Borrowing Limit: EUR 250,000,000 Tenor: 5 years Coupon: 3 months EURIBOR + [●] %. If EURIBOR is less than zero, EURIBOR shall be deemed to be zero. Amortisation: None, bullet Settlement Date: Expected to be [●] June 2018 M
Slide 3: Marine Harvest: At a glance
Marine Harvest: At a glance One of the world’s leading seafood The world’s largest producer companies of Atlantic salmon, 400,000 MT in 2018e (#3 measured in turnover) (~6 million meals per day) Fully integrated Listed on Oslo Stock Exchange HQ in Bergen, Norway value chain Market cap: EUR ~ 8.5 bil
Slide 4: Fully integrated from feed to plate
Fully integrated from feed to plate #4 #1 #1 4
Slide 5: Fully integrated from feed to plate
Fully integrated from feed to plate Feed Farming Consumer Products Operations Started in Norway in 2014 Started in Norway in 1964 as Mowi (including Markets) Scotland planned for 2018 Norway, Scotland, Ireland, Faroe Operations in 25 countries Islands, Canada and Chile Volumes 500,000 tonnes(1) 400,
Slide 6: Diversified farming footprint - good risk management
Diversified farming footprint - good risk management Norway Faroe Islands Volume: 242,000 Volume: 8,000 Scotland Volume: 47,000 Canada Volume: 43,000 Ireland Volume: 7,500 Chile Volume: 52,500 Note: 6 (1) Marine Harvest’s harvest volume guidance for 2018 (GWT tonnes)
Slide 7: Global operations in 25 countries – 13,233 employees at year end 2017
Global operations in 25 countries – 13,233 employees at year end 2017 VAP processing (27 plants), sales & marketing network Scandinavia, Sales Poland, Sales UK & Ireland, & processing South Korea, Japan, Sales & Sales & processing Sales & processing processing DACH & CEE, Sales & processing Spain, S
Slide 8: Development of supply vs demand
Development of supply vs demand Growth 2012-2017: 94% 14 CAGR: 14% 3 500 Global harvest volume (thousand tonnes GWT) 12 3 000 Value of global volumes (EUR billion) 10 2 500 Growth 2004-2012: 128% 8 CAGR: 11% 2 000 6 1 500 4 1 000 2 500 - 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 9: Industry supply growth 2018E
Industry supply growth 2018E 2015 2016 2017 2018 Estimates 2018 GWT (1,000) Norway 1 111 1 054 1 087 1 150 Low 1 135 Y/Y growth 4% High 1 165 Y/Y growth 7% - 2018 guidance revised UK Faroe Islands 150 68 142 70 157 72 140 66 135 63 -14 % -13 % 145 68 -8 % -6 % down to 1-6% (3-8% Total Europe 1 328 1
Slide 10: Supply and demand
Supply and demand Supply by origin Demand by market North Other Other; America; markets; 4% Other Asia; 17 % 7% 6% EU; Chile; China / Hong 45 % Norway; Kong; 26 % 52 % 4% Brazil; Faroe 4% Islands; USA; Scotland; Russia; 3% 19 % 7% 4% Source: Kontali Analyse 10 Note: Supply and demand figures last tw
Slide 11: Megatrends
Megatrends Fisheries are almost fully exploited Increasing world population Resource efficient production compared to other animal production Growing middle class Soil erosion Healthy product 11
Slide 12: Resource efficient production compared to other animal production
Resource efficient production compared to other animal production Protein Retention 31 % 21 % 18 % 15 % Energy Retention 23 % 10 % 14 % 27 % Edible Yield 68 % 46 % 52 % 41 % Feed Convertion Ratio (FCR) 1.1 2.2 3.0 4-10 Edible Meat pr 100 kg fed 61 kg 21 kg 17 kg 4-10 kg - Salmon has a high edible yi
Slide 13: Development in key figures and ratios
Development in key figures and ratios Revenue and OP EBIT Funds From Operations(1) 4 000 3 510 3 649 2.5 800 727 738 100% 3 053 3 112 2.0 80% 3 000 600 540 89 % EUR million 2 456 82 % 1.5 426 EUR million 60% EBIT/kg 2 000 379 400 1.0 52 % 40% 792 46 % 1 000 509 700 200 38 % 411 347 0.5 20% 0 0.0 0 0
Slide 14: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices 10 7 9 6 8 USD per lbs (Miami and Seattle) 7 5 EUR per kg (Oslo) 6 4 5 3 4 3 2 2 1 1 0 0 2013 2014 2015 2016 2017 2018 Reference price Norway EUR (NASDAQ average superior Oslo, GWT/kg) Reference price Chile USD (Urner Barry average D-trim 3-4 lbs FOB Miami) Re
Slide 15: Key financials
Key financials Marine Harvest Group - main figures Q1 2018 Q1 2017 2017 2016 Unaudited EUR million Operational revenue and other income 862.1 892.0 3,653.8 3,509.8 Operational EBIT 1) 157.6 219.2 792.1 700.2 EBIT 269.6 88.3 484.9 991.2 Cash flow from operations 191.8 247.8 632.4 693.2 Net interest-b
Slide 16: Financial position and financing overview
Financial position and financing overview Marine Harvest Group 31.03.2018 31.03.2017 31.12.2017 31.12.2016 EUR million Non-current assets 2 202.3 2 283.5 2 166.7 2 255.8 Current assets (including assets held for sales) 2 213.6 2 207.6 2 163.5 2 554.6 Total assets 4 415.9 4 491.0 4 330.3 4 810.4 Equi
Slide 17: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Marine Harvest Group Q1 2018 Q1 2017 2017 2016 2018 Cash Flow Guidance EUR million NIBD beginning of period - 831.9 - 890.0 -890.0 -999.7 - Working capital buildup EUR ~120m Operational EBITDA 194.8 256.8 942.5 842.7 - Support further organic growth Change in
Slide 18: Development in cost in box per kg
Global EUR 50 million p.a. cost savings program announced in Q4 2017 Development in “cost in box” per kg - Significant specific cost cutting initiatives have been identified across 5 4 the Group EUR per kg 3 - The major cost saving categories are: 2 1 - EUR 30 million: Other operating 0 expenses 201
Slide 19: Outlook
Outlook - Strong financial position - Organic growth initiatives (Feed, Farming, Consumer Products) - Information submitted to the Canadian competition authorities regarding conditional agreement to acquire Northern Harvest on the East Coast - Global cost savings program of EUR 50 million well under
Slide 20: Appendix
Appendix 20
Slide 21: Cash flow guidance and historic developments
Cash flow guidance and historic developments Net capital expenditure Net working capital 350 250 Maintenance level 300 Working capital tie-up (EUR million) 200 250 EUR million 200 150 150 100 100 50 50 0 2013 2014 2015 2016 2017 2018E 0 2013 2014 2015 2016 2017 2018E Financial commitments and cost o
Slide 22: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY - Q2 2018 contract Min hedging rate Max hedging rate (1) shares (% of guided Norway (2) 0.0 % 50.0 % volume): Scotland 0.0 % 75.0 % Canada 0.0 % 30.0 % - Norway 39% Chile (2) 0.0 % 50.0 % - Scotland 73% Ireland 0.0 % 100.0 % - Canada
Slide 23: Dividend policy
Dividend policy - The quarterly dividend level shall reflect the present and expected future cash flow generation of the Company - To this end, a target level for net interest bearing debt is determined, reviewed and updated on a regular basis - When the target is met, at least 75% of the annual fre
Slide 24: Debt distribution and interest rate hedging
Debt distribution and interest rate hedging DEBT VOLUME HEDGED AND FIXED RATES OF INTEREST RATE HEDGES (MARCH-MARCH) (1) CURRENCY DEBT 2018 2019 2020 2021 2022 (2) (3) (3) (3) (3) (3) 31/03/2018 Nominal value Fixed rate Nominal value Fixed rate Nominal value Fixed rate Nominal value Fixed rate Nomin
Slide 25: Hedging and long term currency exposure
Hedging and long term currency exposure POLICY - EUR/NOK - Marine Harvest shall hedge between 0% and 30% of its assumed annual expenses in NOK against the EUR with a horizon of two years. The annual hedging shall be evenly distributed across the months of the year. - USD/CAD - Marine Harvest shall h
Slide 26: Important information and disclaimer (1/2)
Important information and disclaimer (1/2) This presentation and its appendices (collectively, the "Presentation") has been prepared by Marine Harvest ASA (the "Company") with assistance from ABN AMRO Bank N.V, Cooperatieve Rabobank U.A, Danske Bank A/S, filial i Norge, DNB Markets, a part of DNB Ba
Slide 27: Important information and disclaimer (2/2)
Important information and disclaimer (2/2) The Managers have not independently verified any of the information contained herein through formal financial due diligence procedures or other investigations. No representation or warranty (express or implied) is made as to, and no reliance should be place
Slide 28: Risk factors (1/5)
Risk factors (1/5) RISK FACTORS – MARINE HARVEST ASA An investment in the Bonds involves inherent risks. Before making an investment decision with respect to the Bonds, investors should carefully consider the risk factors and all information contained in this Presentation, including the financial st
Slide 29: Risk factors (2/5)
Risk factors (2/5) The (sea)food industry is exposed to legal and political risk All of the jurisdictions in which the Group operates require licenses to operate each fish farm owned and operated in that jurisdiction. The Group has obtained and currently holds the licenses required for its farming o
Slide 30: Risk factors (3/5)
Risk factors (3/5) Biological factors The Group's farming operations are subject to a number of biological risks which may have a material adverse effect on the Group's business, financial condition, results of operations or cash flow through adverse effects on growth, harvest weight, harvest volume
Slide 31: Risk factors (4/5)
Risk factors (4/5) RISK FACTORS RELATED TO THE GROUPS' FINANCIAL POSITION The Group may not be able to obtain sufficient funding The current sources of financing available to the Group may not be sufficient to operate the Group's business. The Group has applied certain assumptions in determining its
Slide 32: Risk factors (5/5)
Risk factors (5/5) Significant cash requirement to meet debt obligations and sustain operations The ability of the Group to make principal or interest payments when due in respect of its financial indebtedness, including (without limitation) the Issuer's financial indebtedness in respect of the Bond
Slide 33: Thank You!
Thank You!
Marine Harvest — Debt Investor Presentation (May 2018) on 6ix