Salmon Evolution Asa · OSL:SALME
Salmon Evolution Asa — Q4 2020 Earnings Presentation
25 slides from Salmon Evolution Asa's earnings presentation, Mar 2, 2021
Slide 1: Q4 2020 Presentation
Q4 2020 PRESENTATION 2 March 2021
Slide 2: Disclaimer
DISCLAIMER This presentation (the “Presentation”) has been prepared by Salmon Evolution Holding AS (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 no
Slide 3: Agenda
Agenda • Introduction and highlights • Operations • Financials • Summary and outlook 3 Q4 2020 Presentation
Slide 4: Salmon Evolution – Extending the Ocean Potential
SALMON EVOLUTION – EXTENDING THE OCEAN POTENTIAL • First production facility under construction in Norway, with annual harvesting capacity of 31,500 tonnes HOG fully developed A Norwegian • Signed joint venture term sheet with Dongwon land-based Industries for a 20,000 tonnes production facility in
Slide 5: Q4 2020 Highlights
Q4 2020 HIGHLIGHTS Q4 2020 • Construction of Phase 1 at Indre Harøy progressing according to plan – on time and on budget • Critical infrastructure completed including wastewater tunnel – project execution risk significantly reduced • Received support of NOK 96.8 million from Enova • Available cash
Slide 6: South Korea Expansion Started – 20kt JV with Dongwon
SOUTH KOREA EXPANSION STARTED – 20KT JV WITH DONGWON • SE has entered into a term sheet for a JV1) (“K Smart”) with seafood giant Dongwon Industries (“Dongwon”) to develop, construct and operate a 20,000 tonnes LWE land-based salmon farming facility in Identified South Korea using SE’s technology an
Slide 7: First Mover Advantage in South Korea – A Fast Growing and High Paying Market
FIRST MOVER ADVANTAGE IN SOUTH KOREA – A FAST GROWING AND HIGH PAYING MARKET FOR SALMON WITH SOLID PRICE POTENTIAL Positioned to achieve a premium on South Korean prices Salmon demand in South Korea is growing rapidly Supply of farmed Atlantic salmon to South Korea (HOG) NOK / kg (HOG) Norway 86% In
Slide 8: K Smart – Key Figures
K SMART – KEY FIGURES Summary of estimated KPIs for the South Korean JV facility1) Item Phase 1 Phase 2 Total Capex NOK 1,400m NOK 1,300m NOK 2,700m Dongwon to facilitate debt Total project cost NOK 1,600m NOK 1,500m NOK 3,100m financing of K Smart1) SE equity requirement NOK 200m NOK 0m NOK 200m Sa
Slide 9: Roadmap to 70,000 Tonnes HOG
ROADMAP TO 70,000 TONNES HOG 2020 2022 2024 2028 2030 NORWAY Phase 1 Phase 2 Phase 3 Norway expansion 7.9kt 7.9kt 15.7kt 20kt 50kt 31.5kt Indre Harøy based on current licenses ASIA South Korea South Korea phase 1 phase 2 + 8.4kt 8.4kt 20kt+ Further expansion possible with local partners TOTAL 70kt+
Slide 10: Agenda
Agenda • Introduction and highlights • Operations • Financials • Summary and outlook 10 Q4 2020 Presentation
Slide 11: Conservative Approach in a "Disruptive Industry"
CONSERVATIVE APPROACH IN A “DISRUPTIVE INDUSTRY” 1 Biology is the most important consideration → Shown through our choice of technology There is much to learn, even though we have decades of experience 2 → That’s why we start in Norway International expansion can be accelerated with strong local par
Slide 12: Optimized Biology with HFS Technology
OPTIMIZED BIOLOGY WITH HFS TECHNOLOGY HYBRID FLOWTHROUGH ADVANTAGES INCREASED COMPLEXITY ABOVE 65% RECIRCULATION • Separate production tanks secure bio-control • Known technology • Maintenance flexibility, separate • HFS with fresh sea cleaning and disinfecting between water being replaced biomass t
Slide 13: Project Status Indre Harøy
PROJECT STATUS INDRE HARØY • Construction progress in accordance with plan • Wastewater tunnel completed • Blasting work for fish-tanks and buildings completed • Currently some 80 workers on site, increasing to approx. 200 this summer • Managing the COVID-19 situation with its highest priority to sa
Slide 14: Preparations for installation of first four fish tanks well underway
• Preparations for installation of first four fish tanks well underway – first centre column installed 23 February • Phase 1 at Indre Harøy will consist of 12 fish tanks each with a diameter of 28 meter and a height of 13 meter – fully developed, Indre Harøy will consist of 48 fisk tanks with a comb
Slide 15: Preparations for installation of first four fish tanks well underway
• Preparations for installation of first four fish tanks well underway – first center column installed 23th February • Phase 1 at Indre Harøy will consist of twelve fish tanks each with a diameter of 28 meter and a height of 13 • Preparations for intake station also meter – fully build out at Indre
Slide 16: A Stepwise Development of Stand Alone Units
A STEPWISE DEVELOPMENT OF STAND ALONE UNITS Description 2020 2021 2022 2023 2024 2025 2026 2027 2028 Capacity CAPEX Cost/kg • Land acquisition Construction Phase 1 • Building of foundations ~7,900t HOG NOK 1.2 bn* NOK 40.8 • Construction of 12 grow-out tanks Production start Production – smolt relea
Slide 17: Agenda
Agenda • Introduction and highlights • Operations • Financials • Summary and outlook 17 Q4 2020 Presentation
Slide 18: Profit & Loss
PROFIT & LOSS Summary of result • Expenses mainly comprise personnel and (figures in NOK 1000) Q4 2020 Q4 2019 YTD 2020 YTD 2019 other G&A Total operating income 0 0 704 -175 • Key management positions in place Personnel expenses -2,034 -2,265 -8,877 -3,754 Depreciations -337 -91 -550 -181 Other ope
Slide 19: Capex Indre Harøy
CAPEX INDRE HARØY Accumulated CAPEX YE 2020 (NOK million) • On time on budget Capitalized internal G&A 220 • Investments gradually increasing with higher Investments (Indre Harøya) 198 Land workload and increased complexity on site 171 149 • Total CAPEX of NOK 71.8 million in Q4 126 112 146 • NOK 68
Slide 20: Cash Flow
CASH FLOW • Solid funding base secured during Cash flow summary 2020 (figures in NOK 1000) Q4 2020 Q4 2019 YTD 2020 YTD 2019 • NOK 40 million bank debt drawn in Net cash flow from operating activities -8,311 4,746 -29,890 -2,553 Q4 2020 Net cash flow from investments activities -58,755 -14,732 -146,
Slide 21: Financing Reservations Secure Project Control
FINANCING RESERVATIONS SECURE PROJECT CONTROL Financial commitments YTD Capex plan for Phase 1 • Project turnkey-agreement (NOK million) (NOK million) includes clause for financing 177 reservations until financing is Accumulated 168 158 secured Month 130 129 296 • In Q4 2020 the company 109 committe
Slide 22: Improved Equity Funding Flexibility Following Focused Project Execution
IMPROVED EQUITY FUNDING FLEXIBILITY FOLLOWING FOCUSED PROJECT EXECUTION, STRONG COST CONTROL AND RECEIVED GRANTS Indre Harøy I - Project cost bridge from Sep 2020 to Mar 2021 (NOKm) • Received total grants of NOK 111 million in 2020 - Continuously monitoring opportunities to apply for NOK 94m reduce
Slide 23: Agenda
Agenda • Introduction and highlights • Operations • Financials • Summary and outlook 23 Q4 2020 Presentation
Slide 24: Summary & Outlook
SUMMARY & OUTLOOK • Construction of facility at Indre Harøy progressing according to plan – on time and on budget • International ambitions. JV term sheet with Dongwon formalized, with target construction start during 2022 • Global demand growth for salmon expected to continue • Salmon Evolution’s H
Slide 25: Next Event
NEXT EVENT Q1 2021 20 MAY 2021 Q&A www.salmonevolution.no 25 Q4 2020 Presentation
Salmon Evolution Holding AS — Q4 2020 Earnings Presentation on 6ix