Slide 1: Q1 2020 presentation
Q1 2020 presentation CEO: Ivan Vindheim CFO: Kristian Ellingsen 13 May 2020
Slide 2: Forward looking statements
Forward looking statements This presentation may be deemed to include forward-looking statements, such as statements that relate to Mowi’s contracted volumes, goals and strategies, including strategic focus areas, salmon prices, ability to increase or vary harvest volume, production capacity, expect
Slide 3: Highlights
Highlights • Q1 operational EBIT of EUR 109 million in line with trading update • Falling prices during the quarter, from close to a record high level, due to extensive lockdown measures in the wake of the Covid-19 pandemic • Despite the extensive lockdown measures, operations have been running clos
Slide 4: Key financials
Key financials Mowi Group - main figures Q1 2020 Q1 2019 2019 Unaudited EUR million Operational revenue and other income 884.8 -10 % 979.4 4 135.4 Operational EBIT 1) 109.3 -44 % 196.1 720.9 EBIT -54.1 249.2 617.0 Cash flow from operations 225.5 265.8 759.0 Net interest-bearing debt (NIBD)1) 2) 1 35
Slide 5: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices 10 7 9 6 8 USD per lbs (Miami and Seattle) 7 5 6 EUR per kg (Oslo) 4 5 3 4 3 2 2 1 1 0 0 2017 2018 2019 2020 Ref. price Norway EUR (NASDAQ average superior Oslo, GWT/kg) Ref. price Chile USD (Urner Barry average D-trim 3-4 lbs FOB Miami) Ref. price North Ameri
Slide 6: Price achievement, contract & superior share
Price achievement (1), contract & superior share 140 % 120 % 106 % 101 % 101 % 99 % 100 % 97 % 89 % 92 % 91 % 80 % 60 % 40 % 20 % 0% Norwegian Scottish Canadian Chilean Q1 2019 Q1 2020 Norwegian Scottish Canadian Chilean Q1-20 Contract share 43 % 75 % 0% 43 % Superior share 89 % 96 % 87 % 85 % Page
Slide 7: Operational EBIT comparison
Operational EBIT comparison 250 196.1 1.4 -82.7 200 EUR million 150 -1.3 -4.4 0.1 109.3 100 50 0 Op EBIT Feed Farming Markets Consumer Other Op EBIT Q1 2019 Products Q1 2020 Page 7
Slide 8: Norway
Norway SALMON OF NORWEGIAN ORIGIN Operational Operational EBITEBIT Salmon Salmon of of Norwegian Norwegian Origin Origin EUR million Q1 2020 Q1 2019 Q1 Q120192020 vs Q1 vs Q1 2019 2020 Operational EBIT 83.7 116.1 120 EBIT -49.0 135.2 90 Harv est v olume (GWT) 50 492 56 135 Operational EBIT per kg (E
Slide 9: Norway: Operational EBIT/kg per region
Norway: Operational EBIT/kg per region 3.0 2.47 2.5 2.21 2.07 2.0 1.72 1.77 EUR per kg 1.71 1.54 1.66 1.5 1.0 0.5 0.0 South Mid North Total Q1 2019 Q1 2020 • Relatively stable margin between the regions in the quarter, however, the lion share of volumes in Region North in March at lower prices Page
Slide 10: Norway: Sales contract portfolio
Norway: Sales contract portfolio 30 000 25 000 Contracted volumes (GWT) 20 000 15 000 10 000 5 000 0 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Realised contract volumes Contracted volumes (including prospects) • Price drop for contracts from Q4 2019 to Q1 2020 of approx EUR 0.5/kg • Stable con
Slide 11: Scotland
Scotland SALMON OF SCOTTISH ORIGIN Operational EBIT Salmon Operational of Scottish EBIT Salmon Origin of Scottish Origin EUR million Q1 2020 Q1 2019 Q1 2019 vs Q1 2020 Q1 2020 vs Q1 2019 40 Operational EBIT 5.7 35.8 EBIT -18.2 45.2 30 Harv est v olume (GWT) 9 036 15 787 Operational EBIT per kg (EUR)
Slide 12: Canada
Canada SALMON OF CANADIAN ORIGIN Operational EBITEBIT Operational Salmon of Canadian Salmon Origin of Canadian Origin EUR million Q1 2020 Q1 2019 Q1 Q1 2019 vs Q1 2020 2020 vs Q1 2019 15 Operational EBIT 7.3 13.9 EBIT -3.0 24.4 10 Harv est v olume (GWT) 8 066 9 838 Operational EBIT per kg (EUR) 0.91
Slide 13: Chile
Chile SALMON OF CHILEAN ORIGIN Operational Operational EBIT EBIT Salmon Salmon of Chilean of Chilean Origin Origin EUR million Q1 2020 Q1 2019 Q1 2020 vs Q1 2019 vs Q1 2020Q1 2019 35 Operational EBIT 16.6 29.2 30 EBIT 32.7 26.9 25 Harv est v olume (GWT) 13 669 19 810 20 Operational EBIT per kg (EUR)
Slide 14: Ireland and Faroes
Ireland and Faroes SALMON OF IRISH ORIGIN SALMON OF FAROESE ORIGIN EUR million Q1 2020 Q1 2019 EUR million Q1 2020 Q1 2019 Operational EBIT -1.2 6.2 Operational EBIT 5.2 1.9 EBIT 13.0 12.1 EBIT -4.3 4.5 Harv est v olume (GWT) 6 1 422 Harv est v olume (GWT) 1 851 1 126 Operational EBIT per kg (EUR) n
Slide 15: Consumer Products
Consumer Products (1) CONSUMER PRODUCTS EUR million Q1 2020 Q1 2019 Operating rev enues 628.5 596.9 Operational EBIT 2.4 6.8 Operational EBI T % 0.4% 1.1% EBIT 2.5 6.7 Volume sold (tonnes prod. weight) 52 093 49 967 • Record-high volumes sold in a first quarter • Shift towards value added in retail
Slide 16: Feed
Norway Feed FEED EUR million Q1 2020 Q1 2019 Operating rev enues 120.1 73.2 Operational EBIT -1.0 -2.4 Operational EBI T % -0.8% -3.2% EBIT -1.0 -2.1 Feed sold v olume 93 768 60 552 Feed produced v olume 99 370 61 755 • Despite low season, record high volumes Scotland: New plant sold in a first quar
Slide 17: Financials, Markets and Harvest volumes
Q1 2020 presentation Financials, Markets and Harvest volumes
Slide 18: Profit and Loss
Profit and Loss Mowi Group Q1 2020 Q1 2019 2019 EUR million Operational revenue and other income 884.8 -10 % 979.4 4 135.4 Operational EBIT 1) 109.3 -44 % 196.1 720.9 • Negative net fair value adjustment of Change in unrealized internal margin -2.3 5.9 -5.1 Gain/loss from derivatives -4.0 0.2 2.4 bi
Slide 19: Financial position
Financial position Mowi Group 31.03.2020 31.03.2019 31.12.2019 EUR million Non-current assets 3 210.7 2 971.3 3 210.4 Current assets 2 288.6 2 592.7 2 629.6 Total assets 5 499.3 5 564.0 5 840.1 Equity 2 624.2 2 986.1 2 892.6 Non-current liabilities 2 131.4 1 785.3 2 171.2 Current liabilities 743.8 7
Slide 20: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Mowi Group Q1 2020 Q1 2019 2019 EUR million NIBD beginning of period -1 337.2 -1 037.2 -1037.2 Operational EBITDA* 149.4 233.2 874.4 Change in working capital 75.9 51.0 -104.0 Taxes paid -53.0 -53.1 -156.3 Other adjustments 12.2 5.5 11.3 Cash flow from operati
Slide 21: 2020 Cash Flow Guidance
2020 Cash Flow Guidance • Working capital build-up EUR ~90m − Support further organic growth • Capital expenditures EUR ~265m(*) − Freshwater investments EUR ~65m in Norway, Canada, Chile − Sea water expansion projects EUR ~20m in Norway, Scotland and Canada − Consumer Products: rebuild Kritsen fact
Slide 22: Overview financing
Overview financing • Total committed financing of EUR 1,956 million out of which approximately EUR 580 million in cash and undrawn lines • Long term NIBD target EUR 1,400m • Bank facility: EUR 1,406m Facility Agreement − Tenor 5 years (Maturity: June 2022) − Covenant: 35% equity ratio (adjusted for
Slide 23: Supply development
Supply development Estimated volumes Compared to Q1 2019 Est. volumes Suppliers Q1 2020 Q1 2019 Volume % Q4 2019 Norway 270 500 266 600 3 900 1.5% 335 300 Scotland 31 100 37 400 -6 300 -16.8% 41 300 Faroe Islands 15 600 19 600 -4 000 -20.4% 23 600 Other Europe 9 500 9 400 100 1.1% 10 800 Total Europ
Slide 24: Development in reference prices
Development in reference prices Q1 2020 Change vs Q1 2020 Change vs Market Q1 2019 EUR Q1 2019 Norway (1) EUR 6.71 5.8% EUR 6.71 5.8% Notes: Chile (2) USD 5.16 -0.8% EUR 4.68 2.2% (1) NASDAQ average superior GWE/kg (gutted weight equivalent) Chile, GWT (3) USD 6.06 -1.9% EUR 5.50 1.0% (2) Urner Barr
Slide 25: Global volume by market
Global volume by market Estimated volumes Compared to Q1 2019 Est. volumes 12 month comparison Markets Q1 2020 Q1 2019 Volume % Q4 2019 LTM PTM % EU 227 400 222 700 4 700 2.1% 281 500 1 017 400 960 400 5.9% Russia 17 600 16 400 1 200 7.3% 25 700 79 900 84 000 -4.9% Other Europe 21 100 21 300 -200 -0
Slide 26: Industry supply growth 2020e
Industry supply growth 2020e 2017 2018 2019 2020 Estim ates 2020 GWT (1,000) Low Y/Y grow th High Y/Y grow th • 2020 guidance: Norw ay 1 087 1 128 1 200 1 232 1 220 2% 1 245 4% UK 159 138 165 164 161 -3 % 167 1% Modest supply growth of 2-4% Faroe Islands 72 65 78 73 71 -9 % 75 -4 % Other Europe* 26
Slide 27: Mowi volume guidance
Mowi volume guidance Atlantic salmon 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 Q1 2020 Q2 2020 2020 GWT (1,000) Actual Actual Actual Actual Actual Actual Actual Guidance Guidance Norway 230.5 56.1 51.4 63.4 66.0 236.9 50.5 54.5 260.0 Scotland 38.4 15.8 15.9 19.6 14.0 65.4 9.0 17.0 64.0 Canada 39.3 9
Slide 28: Outlook
Outlook • The Covid-19 pandemic has impacted in the short-term market dynamics, prices and costs • Mowi capitalising on an integrated value chain to meet the shift from foodservice demand to retail demand • Started to see improvements in the market as some countries are gradually re- opening • Suppl
Slide 29: Appendix
Q1 2020 presentation Appendix
Slide 30: Dividend policy
Dividend policy • The quarterly dividend level shall reflect the present and expected future cash flow generation of the Company • 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 free cash flow a
Slide 31: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY Min hedging rate Max hedging rate (1) • Q2 2020 contract shares (% of guided volume): Norway (2) 0% 50 % − Norway 42% Scotland 0% 75 % Canada 0% 30 % − Scotland 41% (2) Chile 0% 50 % Ireland 0% 100 % − Canada 0% Faroes 0% 30 % − Chile
Slide 32: Quarterly segment overview
Quarterly segment overview SOURCES OF ORIGIN QTD EUR million Norway Scotland Canada Chile Ireland Faroes Other 1) Group OPERATIONAL EBIT FARMING 82.3 3.0 5.3 7.5 -1.1 4.4 101.4 SALES AND MARKETING Markets 6.1 1.7 1.9 1.2 -0.2 0.8 0.3 11.8 Consumer Products -7.2 0.9 0.1 7.9 0.0 0.0 0.6 2.4 SUBTOTAL 8
Slide 33: Development in harvest volumes
Development in harvest volumes GWT 2016 2017 2018 2019 2020E (1,000) Total Total Total Q1 Q2 Q3 Q4 Total Q1 Q2E Total Norway 236.0 210.2 230.5 56.1 51.4 63.4 66.0 236.9 50.5 54.5 260.0 Scotland 45.0 60.2 38.4 15.8 15.9 19.6 14.0 65.4 9.0 17.0 64.0 Canada 43.3 39.4 39.3 9.8 12.5 15.8 16.2 54.4 8.1 12
Slide 34: Cash flow guidance and historic developments
Cash flow guidance and historic developments Net capital expenditure (*) Net working capital 350 160 Maintenance level 300 140 250 120 100 200 EUR million EUR million 80 150 60 100 40 50 20 0 0 2015 2016 2017 2018 2019 2020E 2015 2016 2017 2018 2019 2020E Financial commitments and cost of debt (**)
Slide 35: Nova Sea
Nova Sea Harv est v olume (GWT) EBI T per kg NI BD EURm Ownership % 2018 2019 Q1 2019 Q1 2020 2018 2019 Q1 2019 Q1 2020 Q1 2020 Nova Sea 48 % 37 879 45 962 6 318 9 283 2.66 2.30 2.22 2.96 -51.1 • Leading integrated salmon producer in Northern Norway − 33.33 wholly owned licenses − 4 partly owned lic
Slide 36: Debt distribution and interest rate hedging
Debt distribution and interest rate hedging CURRENCY DEBT 2020-2021 2021-2022 2022-2023 (2) 31/03/2020 No minal value Fixed rate (3) No minal value Fixed rate (3) No minal value Fixed rate(3) EUR m 1 287.0 380.0 2.13 % 380.0 2.20 % - 0.00 % USD m 60.0 78.3 2.31 % 78.3 2.31 % 60.0 4.13 % GBP m 40.0 2
Slide 37: Hedging and long term currency exposure - policies
Hedging and long term currency exposure - policies • EUR/NOK − Mowi 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 − Mowi shall hedge between 0% a
Slide 38: Strategic currency hedging
Strategic currency hedging EUR/NOK USD/CAD STRATEGIC CURRENCY HEDGING MEUR Rate MUSD Rate 2020 149.4 9.93 21.6 1.32 2021 199.2 10.28 28.8 1.32 2022 49.8 10.55 4.8 1.33 P/L effect of contracts realized in Q1 (MEUR) -8.4 MEUR Market value 31/12/2019 1.6 Change -57.7 Market value 31/03/2020 -56.1 DESIG
Slide 39: Thank you
MOQOWI Thank you