Salmon Evolution Asa · OSL:SALME
Salmon Evolution Asa — Q1 2023 Earnings Presentation
28 slides from Salmon Evolution Asa's earnings presentation, May 23, 2023
Slide 1: Q1 2023 Presentation
Q1 2023 PRESENTATION CEO: Trond Håkon Schaug-Pettersen CFO: Trond Vadset Veibust 23 May 2023
Slide 2: Disclaimer
DISCLAIMER This presentation (the “Presentation”) has been prepared by Salmon Evolution ASA (the “Company” and together with is subsidiaries, the “Group”) except where context otherwise requires, solely for information purposes. This Presentation, and the information contained herein, does not const
Slide 3: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 3 Q1 2023 Presentation
Slide 4: Q1 2023 Highlights
Q1 2023 HIGHLIGHTS Q1 2023 Post quarter events • Continued production ramp-up at Indre Harøy. Batch 5 • Completed takeover of the two last remaining tanks in stocked in February and all-time high biomass production in phase 1 at Indre Harøy on the 17th of April March • Carried out NOK 525 million pr
Slide 5: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 5 Q1 2023 Presentation
Slide 6: Salmon Evolution at a Glance
SALMON EVOLUTION AT A GLANCE Company overview Salmon farming facilities ▪ Established in 2017 Indre Harøy Yangyang ▪ Based in Hustadvika, strategically located in the salmon farming cluster on the west coast of Norway ▪ Listed on Oslo Stock Exchange in 2021 49% ownership ▪ Highly experienced and com
Slide 7: Biology is our number one priority
BIOLOGY IS OUR NUMBER ONE PRIORITY 1 We have found the sweet-spot: 2 Minimizing risk: Hybrid flow-through system (HFS) Each tank is a separate biozone RAS Recirculating aquaculture system Biofilter shared by No biofilter – each tank a several tanks – separate biological causing cross- zone, eliminat
Slide 8: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 8 Q1 2023 Presentation
Slide 9: Ending Q1 with all-time high biomass
ENDING Q1 WITH ALL-TIME HIGH BIOMASS Comments Net biomass growth (LW) and harvest volumes (HOG) 400 1 600 • All-time high biomass production in Net growth Total biomass March with about 320 tonnes in net Net biomass growth (tonnes, LW) 350 1 400 Total biomass (tonnes, LW) biomass gain (~740 tonnes i
Slide 10: Post quarter mortality event – situation now stabilizing
POST QUARTER MORTALITY EVENT – SITUATION NOW STABILIZING • Sudden increase in mortality in selected fish groups • Increased mortality triggered by AGD, causing problems with gill health What happened • Facility has otherwise been operating under stable conditions with relevant water quality paramete
Slide 11: Group biomass overview
GROUP BIOMASS OVERVIEW Group biomass development 31 March 2023 21 May 2023 Biomass Biomass Batch Units (#) Weight (g) Units (#) Weight (g) Current status (tonnes, LW) (tonnes, LW) Fully harvested out in early May yielding ~600 tonnes HOG with Batch #2 (Jul 22) ~225,000 ~3,450 777 93% superior grade
Slide 12: Five more smolt releases planned for rest of 2023
FIVE MORE SMOLT RELEASES PLANNED FOR REST OF 2023 Graphical approximation of the current production plan and is prepared for illustration purposes Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Batch #3 Performance to be monitored closely, option for early harvest if needed Batch #4 Batch #5 Batch #6 Batch
Slide 13: Batch 2 harvested out in May with good results
BATCH 2 HARVESTED OUT IN MAY WITH GOOD RESULTS Comments • Total batch 2 harvest volumes of ~600 tonnes HOG • Fast tracking of harvest in a historically strong market as a precautionary step with regards to fish welfare • Harvest capacities and operational procedures fully stress tested – the whole b
Slide 14: Project status – Indre Harøy phase 1 & 2
PROJECT STATUS – INDRE HARØY PHASE 1 & 2 Phase 1 Phase 2 • Completed takeover of the two last remaining tanks • Preparatory activities for phase 2 at Indre Harøy in phase 1 at Indre Harøy on the 17th of April 2023. ongoing. • Accumulated capex per Q1 of NOK 1,647m. This amount includes allowances fo
Slide 15: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 15 Q1 2023 Presentation
Slide 16: K Smart Farming – focus on engineering and permitting
K SMART FARMING – FOCUS ON ENGINEERING AND PERMITTING Project overview Illustration – Yangyang on-growing site • Joint venture between SE and Dongwon Industries, ownership split 49/51% respectively. • Dongwon Industries to facilitate 75% debt financing. • Targeted total annual capacity 16.8kt HOG. C
Slide 17: North America – building a pipeline for future growth
NORTH AMERICA – BUILDING A PIPELINE FOR FUTURE GROWTH Project overview Target areas • Established dedicated team and incorporated US corporate structure. • Partnership model to be pursued once project matures, leveraging Salmon Evolution’s human capital. Target areas Comments • Ongoing evaluation of
Slide 18: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 18 Q1 2023 Presentation
Slide 19: Group profit & loss
GROUP PROFIT & LOSS • The Group did not harvest any salmon during Q1 2023. • EBITDA before fair value adjustment of biomass of NOK -22.4m in Q1 2023 ➢ Includes NOK 5.5m in charges related to unutilized production capacity expensed directly in the P&L • EBIT after fair value adjustment of biomass of
Slide 20: Low-cost and stable energy supply
LOW-COST AND STABLE ENERGY SUPPLY Salmon Evolution is favorably located in power NO3 prices have been consistently lower than price area NO3 comparable prices • Salmon Evolution is located in power Euro/MWh price area 3 (“NO3”) which is not 250 directly connected to the grid towards continental Euro
Slide 21: New green debt financing facility in place
NEW GREEN DEBT FINANCING FACILITY IN PLACE Debt funding plan Indre Harøy phase 1 and 2 NOKm Increased overdraft facility3 Existing overdraft facility Debt • New green debt financing facility arranged by DNB and Nordea • Increases debt on Phase 1 facility with 250 NOKm and secures 775 NOKm for Phase
Slide 22: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 22 Q1 2023 Presentation
Slide 23: Roadmap to 100,000 tonnes HOG
ROADMAP TO 100,000 TONNES HOG 2020 2022 2024 2026 2028 2030 2032 NORWAY 31.5kt Indre Harøy based on current licenses Phase 1 Phase 2 Phase 3 7.9kt 7.9kt 15.7kt ++ 31.5kt+ ASIA South Korea phase 1 South Korea phase 2 8.4kt 8.4kt ++ 16.8kt+ North America North America 31.5kt+ ++ 31.5kt+ TOTAL Illustra
Slide 24: Summary & outlook
SUMMARY & OUTLOOK • Long term plan unchanged • Indre Harøy situation now stabilizing – robustness of both the hybrid flow-through system and the organization fully demonstrated over the last weeks • Taking precautionary actions and securing on-site freshwater production capabilities to minimize resp
Slide 25: Q&A
Q&A www.salmonevolution.no 25 Q1 2023 Presentation
Slide 26: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 26 Q1 2023 Presentation
Slide 27: Strong management team with extensive experience leading a growing organization and corporation
Strong management team with extensive experience leading a growing organization and corporation Management team Organizational structure Corporate structure Trond Håkon Schaug-Pettersen, CEO ▪ >15 years experience from both salmon industry and capital markets notably at Hofseth International and Swe
Slide 28: Highly competent board of directors backed by strong owners
Highly competent board of directors backed by strong owners Board of directors Ownership as per 31 March 2023 Tore A. Tønseth Eunhong Min Chairman of the board Board member ▪ Investment Director at Ronja ▪ Chief Executive Officer of Capital Dongwon Industries, one of the ▪ >15 years experience in la