Nordic Aqua Partners As · OSL:NOAP
Nordic Aqua Partners As — Investor Presentation (February 2023)
38 slides from Nordic Aqua Partners As's investor presentation, Feb 7, 2023
Slide 1: Nordic Aqua Partners Investor Presentation
Nordic Aqua Partners Investor Presentation 7 February 2023
Slide 2: Disclaimer
Disclaimer THIS DOCUMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, ITS TERRITORIES OR POSSESSIONS, AUSTRALIA, CANADA, THE HONG KONG SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE’S REPUBLIC OF CHINA, JA
Slide 3: Presenting team
Presenting team Ove Nodland Ragnar Joensen Hjalti Hvítklett CEO Working Chairman CFO Honorary citizen of Ningbo 3
Slide 4: Content
Content 1. Investment case 2. Supplementary information 3. Risk factors 4
Slide 5: Nordic Aqua Partners – only producer of fresh Atlantic salmon in China
Nordic Aqua Partners – only producer of fresh Atlantic salmon in China 1 First local producer of fresh Atlantic Salmon to the Chinese market on an industrial scale Production capacity of 4,000 tonnes under construction and fully financed. Business plan to expand to 2 20,000 tonnes. Est. MNOK 300 add
Slide 6: China is the #1 seafood market
China is the #1 seafood market Large untapped Atlantic salmon potential China is the #1 seafood market Growing demand for Atlantic salmon Substantial market potential Total seafood demand 2031 (mtonnes) Total Atlantic salmon demand in China (ktonnes) Per capita Atlantic salmon consumption (kg) 37% o
Slide 7: Substantial advantages with local production in China
Substantial advantages with local production in China 100% of Atlantic salmon is imported to China – 55% by air from Norway Key advantages of local production Substantially lower cost 1 Avoid additional costs related to transportation and special packaging Premium freshness and quality 2 NOAP with ~
Slide 8: Atlantic salmon in China is priced substantially above Oslo
Atlantic salmon in China is priced substantially above Oslo Development in Atlantic salmon price references from FOB Oslo to wholesale in China NOK / kg 225 200 175 150 + 7 % import duty1 + NOK 7 / kg handling & distribution2 125 + Freight 100 + Special packaging & handling + Testing (required by Ch
Slide 9: Strategically located nearby more than 800 million consumers
Strategically located nearby more than 800 million consumers Dense population and high purchasing power in cities nearby High growth potential for Atlantic salmon with premium quality driven by rising middle-class in China Well established infrastructure in China enables fast and sustainable transpo
Slide 10: Gaotang is the ideal location for land-based Atlantic salmon farming
Gaotang is the ideal location for land-based Atlantic salmon farming Suitable water quality Stable energy prices 100% renewable energy Modern infrastructure Water is sourced from the ocean Stable and low electricity prices in Gaotang is a net exporter of Well established road- and train right next t
Slide 11: Strong governmental support and long-term partnership
Strong governmental support and long-term partnership Confirmed support for 20,000 tonnes production Attractive taxation for land-based farming in China • 50% reduction in corporate tax for land-based companies in China, resulting in a corporate tax rate of 12.5% for NOAP • Exemption of import fees
Slide 12: Stage 1 construction is on time and on budget
Stage 1 construction is on time and on budget • Project continues to develop on time and on budget • Construction activity in full motion – carried under lease agreement • Installation of RAS 03 completed in October, fish moved from RAS 02 to RAS 03 in November, according to schedule • Installation
Slide 13: Successful delivery of first eggs on site in Q1 2022
Successful delivery of first eggs on site in Q1 2022 Hatchery RAS 01 RAS 02 RAS 03 March May July October Batch 1 Batch 1 Batch 1 Batch 1 First eggs arrived on site March 9th Introduced in May for start feeding Transferred from RAS 01 to RAS 02 in July Transfer from RAS 02 to RAS 03 in November Stat
Slide 14: Biological performance above budget
Biological performance above budget Batch 1 startfed May 2022 Batch 2 startfed August 2022 Average weight (g) Actual Budget Average weight (g) Actual Budget 120 22% 30 60% above budget above budget 100 25 80 20 60 15 40 10 20 5 Month month month 0 0 mai.22 may.22 jun.22 jun.22 aug.22 okt.22 oct.22 n
Slide 15: RAS-team with unparalleled track-record
RAS-team with unparalleled track-record Senior RAS management team Selected reference projects Working Chairman Farm Manager Faroe Islands • >25 years of aquaculture • ~12 years of RAS Facility built by Mowi in 2017 experience experience Tank volume of 8,000 m3 with production of 1,300 • Former MD o
Slide 16: Robust technical design and production approach
Robust technical design and production approach ✓ Water replacement • The RAS design ensures very clear water with very high water exchange rate in fish tanks ✓ Water temperature • Cooling capacity is sufficient to maintain ideal temperature for Atlantic salmon ✓ Salinity • The system is fully flexi
Slide 17: Expanding capacity towards 20,000 tonnes
Expanding capacity towards 20,000 tonnes Flexibility on expansion project size (Stage 2 / 3) 2021 2022 2023 2024 2025 2026 2027 2028 Financing Q3 construction start Stage 1: Q1 production start Fully financed and 4,000 tonnes under construction Q1 First harvest Construction start Q3 2023 Stage 2: Es
Slide 18: Attractive project economics
Attractive project economics Stage 1 Stage 1+2 Stage 1+2+3 (flexibility) Annual volume tonnes (HOG) 4,000 8,000 20,000 RAS Capex1 / kg (HOG) 125 NOK 134 NOK 140 NOK Lease financed capex2 / kg (HOG) 45 NOK 43 NOK 41 NOK WC / kg (HOG) 27 NOK 28 NOK 25 NOK EBITDA cost3 / kg (HOG) 52 NOK 49 NOK 44 NOK E
Slide 19: Target production cost and local prices result in robust margins
Target production cost and local prices result in robust margins Wholesale price in China and implied margin from target production cost NOK / kg 250 200 150 100 Implied EBIT margin 50 Target EBIT cost at NOK 51 / kg (20 ktonnes) 0 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-2
Slide 20: Robust production cost profile with reductions driven by scale
Robust production cost profile with reductions driven by scale Target production cost breakdown for stage 8,000 tonnes case (NOK/kg, HOG) Volatile, but signs of Cost items exhibiting high degree of stability Cost reduction explained topping out by salary, admin and depreciation 8 58 7 5 49 51 7 2 3
Slide 21: Est. fully financed on expansion to 8,000 tonnes with MNOK 300 additional funding
Est. fully financed on expansion to 8,000 tonnes capacity with MNOK 300 additional funding Financing sources (NOKm) Uses of funds (NOKm) Stage 1 +2 (8k tonnes): Total ~NOK 2.0bn ~100 ~370 130 240 ~220 ~400 300 Stage 1 (4k tonnes): ~NOK 1.1bn (fully funded) 180 600 1 100 300 Secured debt Raised equit
Slide 22: Conservative production capacity assumptions
Conservative production capacity assumptions Productivity sensitivity analysis Productivity Stage 1+2 production EBIT cost RAS Capex 1 (kg growth lwe / m3 / yr) (tonnes) (NOK / kg HOG) (NOK / kg HOG) Downside scenario 110 6,900 62 156 120 7,600 59 141 NOAP assumption 127 8,000 58 134 140 8,800 55 12
Slide 23: Capex and funding visibility is firming up on expansion stages
Capex and funding visibility is firming up on expansion stages Stage 1 Stage 2 Stage 3 4,000 tonnes +4,000 tonnes +12,000 tonnes Land Secured Water supply & waste permission Secured Power supply Secured Groundworks and infrastructure Secured Initiated negotiations Building Secured In advanced negoti
Slide 24: Investment highlights
Investment highlights 1 Only industrial producer of Atlantic salmon in China Atlantic salmon in China is priced substantially above 2 Oslo creating a superior margin potential Access to massive Chinese consumer markets within 3 hours from production site On path towards 20,000 tonnes production. New
Slide 25: Content
Content 1. Investment case 2. Supplementary information 3. Risk factors 25
Slide 26: Funded with significant buffer for Stage 1 under construction
Funded with significant buffer for Stage 1 under construction Financing sources (NOKm) Uses of funds (NOKm) 181 523 600 1,081 181 91 164 300 122 Secured debt Raised equity Capitalized lease Total Capex Land, infra Working capital Financing & Buffer Financing & buildings general expenses 26
Slide 27: EBIT sensitivity to productivity and Atlantic salmon price
EBIT sensitivity to productivity and Atlantic salmon price Illustrative EBIT sensitivity 8,000 tonnes (NOKm) EBIT sensitivity 20,000 tonnes (NOKm) Price Price 100 120 140 160 180 100 120 140 160 180 Productivity Productivity 100 262 400 538 676 814 100 792 1,138 1,484 1,830 2,176 120 309 461 613 765
Slide 28: Overview of secured debt financing and loan agreements
Overview of secured debt financing and loan agreements Loan facility Working capital facility with local bank Provides loan of NOK 250m Working Capital facility of ~NOK 50m 70% of Guarantee 30% of Guarantee • Export Credit Financing and 70% guarantee from Export Credit • Bank of Ningbo with extensiv
Slide 29: Experienced senior management team and strong partner backing
Experienced senior management team and strong partner backing Senior management team Partnerships Working Chairman CEO NAN Feed supply • Over 25 years of experience • More than 23 years of from Aquaculture experience in conducting • Former MD of Mowi Norway and business in China Global Head of Techn
Slide 30: RAS delivery and partnership with AKVA group
RAS delivery and partnership with AKVA group ✓ AKVA group has a proven RAS technology with successful land-based projects ✓ Signed contract for stage 2 between Nordic Aqua Partners and AKVA group ✓ Stage 1 with turnkey fixed contract and complete solutions to optimize cost, user friendliness and mai
Slide 31: Illustration of the AKVA RAS technology
Illustration of the AKVA RAS technology • The basic idea with the AKVA RAS systems is to clean the water from the fish tanks so it can be reused and to maintain an optimal water quality for the salmon • Water to be sourced rom the ocean right next to the facility in the Gaotang Sound • Systems using
Slide 32: Local engagement & employees at facility
Local engagement & employees at facility 32
Slide 33: Facilities under construction
Facilities under construction 33
Slide 34: Facilities under construction
Facilities under construction 34
Slide 35: Risk factors (I/III)
Risk factors (I/III) Investing in the Company involves inherent risks. Prospective investors should carefully consider, among other things, the risk factors set out in this section before making an investment decision in respect of the Company's shares (the "Shares"). Additional risks not presently
Slide 36: Risk factors (II/III)
Risk factors (II/III) The Company's operations are subject to several biological risks The Company’s operations will be subject to several biological risks which could have a negative impact on future profitability and cash flows. Biological risks include for instance oxygen depletion, diseases, vir
Slide 37: Risk factors (III/III)
Risk factors (III/III) Risk related to terms of current financing and events of default The Company has entered into a loan agreement with Eksportfinansiering Norge, Norway, as lender and Coöperative Rabobank U.A. as Bank Guarantor for a senior secured export credit term loan and guarantee facility
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