Salmar Asa · OSL:SALM
Salmar Asa — Q1 2023 Earnings Presentation
26 slides from Salmar Asa's earnings presentation, May 11, 2023
Slide 1: Q1 2023 Presentation
1 1 M AY 2 0 2 3 Q1 2023 Presentation CEO: FRODE ARNTSEN CFO: ULRIK STEINVIK
Slide 2: Agenda
Q 1 2 0 2 3 P R E S E N TAT I O N Agenda Highlights Q1 2023 Operational Update Financial Update Strategic Update Outlook
Slide 3: Highlights Q1 2023
Highlights Q1 2023 Harvest volume (1,000 tons gw) Group Norway1 • Strong start in 2023 driven by record high salmon prices 48.5 42.0 Δ QoQ Δ YoY Δ QoQ Δ YoY – Strong results from Central Norway -14.1 +3.5 -14.7 +0.3 – Northern Norway impacted by share of NRS volume in the period – Solid operational
Slide 4: Year of Culture 2023 – Well underway
Year of Culture 2023 – Well underway • New round of the SalMar School implemented – All parts of the value chain and all segments/regions • Cocreating and ensuring ownership for the road ahead • Gathered entire new SalMar under one roof this May • Corporate culture and team building • One united Sal
Slide 5: Operational Update
Q1 2023 Operational Update
Slide 6: Farming Central Norway
Farming Central Norway Key Results Q1 2023 Q1 2022 Operating income (NOKm) 2,326 1,914 Operational EBIT (NOKm) 1,109 925 • Cost slightly lower compared to Q4 22 – SalmoNor volume accounted for 15% 22.2 24.9 Harvest volume (tgw) • Favorable harvest profile in the period EBIT/kg (NOK) 50.0 37.2 • Star
Slide 7: Farming Northern Norway
Farming Northern Norway Key Results Q1 2023 Q1 2022 Operating income (NOKm) 1,883 1,262 Operational EBIT (NOKm) 837 716 • Cost increased compared to Q4 22 – NRS volume accounted for 56% with higher cost base 19.8 16.8 Harvest volume (tgw) • Most of volume harvested early in the period EBIT/kg (NOK)
Slide 8: Sales & Industry
Sales & Industry Key Results Q1 2023 Q1 2022 Operating income (NOKm) 6,239 4,445 Operational EBIT (NOKm) -81 -372 • Solid operational performance Operational EBIT- margin (%) -1.3 % -8.4 % – Operational set-up showcasing its strength – Improved price achievement from spot sales • Contracts1 with neg
Slide 9: Icelandic Salmon
Icelandic Salmon Key Results Q1 2023 Q1 2022 Operating income (NOKm) 765 368 Operational EBIT (NOKm) 204 94 • All time high quarterly harvest volume • 2021 generation accounted for the volume Harvest volume (tgw) 6.6 3.4 – Increase in cost compared to Q4 22 31.0 28.0 EBIT/kg (NOK) – Biological chall
Slide 10: SalMar Aker Ocean
SalMar Aker Ocean Key Results Q1 2023 Q1 2022 Operating income (NOKm) 0 - Operational EBIT (NOKm) -45 -34 • Third production cycle at Ocean Farm 1 commenced early May 2023 – Unit transported to Frohavet in March 2023 - - Harvest volume (tgw) – Expect harvest early 2024 EBIT/kg (NOK) - - • Large pote
Slide 11: Scottish Sea Farms
Scottish Sea Farms1 Key Results Q1 2023 Q1 2022 Operating income (NOKm) 506 639 Operational EBIT (NOKm) 9 105 • Low harvest volumes • High cost base Harvest volume (tgw) 5.2 7.8 – Affected by challenges in Q3 and Q4 22 EBIT/kg (NOK) 1.7 13.4 • 61% of volume sold on contracts – Prices below spot mark
Slide 12: Financial Update
Q1 2023 Financial Update
Slide 13: Group Profit & Loss
Group operational EBIT - QoQ + 878 Group Profit & Loss • Record high salmon prices increasing revenue and operational EBIT – Despite lower harvest volume QoQ Norway • One-off costs related to transaction and restructuring of NOK 60 million in Q1 23 Group P&L • Fair value adjustments* positive due to
Slide 14: Group Balance Sheet
Group Balance Sheet Assets Equity ratio • Frøy classified as assets held for sale • Ongoing investments in the value chain progressing according to plan • Lower standing biomass QoQ and higher YoY • Equity ratio increased to 41% • Net Interest-bearing debt (NIBD) including lease Equity & liabilities
Slide 15: Net interest bearing debt
Net interest bearing debt Change in NIBD incl. leasing - QoQ • Working capital impacted by reduction of trade payables +549 • Net investments at NOK 1,251 million – Compulsory aquisition NTS NOK 671 million – Smolt NOK 178 million – Farming NOK 171 million – Sales & Industry NOK 71 million – Iceland
Slide 16: Proposed new tax from 2023 in Norway
Proposed new tax from 2023 in Norway • 28 March 2023 Norwegian Government updated is proposal with a tax rate at 35% • Expected verdict in the Norwegian Parliament before the summer 2023 • SalMar strongly opposes both the proposed tax model and level – Major impact on the capacity for innovation and
Slide 17: Synergy realization and strategic review of Frøy
Synergy realization and strategic review of Frøy Progressing according to plan 63% of synergies with NTS, NRS and SalmoNor realized Exploring strategic alternatives in Frøy with the aim of maximizing value for shareholders • Realized 425 of 671 MNOK in yearly recurring cost savings – Estimated total
Slide 18: Strategic Update
Q1 2023 Strategic Update
Slide 19: Sustainability in everything we do
Sustainability in everything we do A key cultural tenet in SalMar Fish We work systematically to create an Survival rate environment in which the salmon thrives and remains healthy 95% People & Society We believe in creating local value and H.factor safe workplaces and support the local communities
Slide 20: Global food supply - our shared responsibility
Global food supply - our shared responsibility Strong demand for sustainable food Harvest volume 20231 277,500 tonnes 2,000 million meals 100% of Norway’s population supplied with salmon for 365 days Salmon one of the most sustainable animal proteins 1) Including relative share, 50%, from Scottish S
Slide 21: Robust value chain equipped for further sustainable growth
Robust value chain equipped for further sustainable growth Strong growth potential and dedicated employees with a Passion for Salmon FARMING HARVESTING & VAP Optimal locations with minimal Great benefits from enviromental footprint local processing FRY & SMOLT SALES & DISTRIBUTION Self sufficient wi
Slide 22: Outlook
Q1 2023 Outlook
Slide 23: Outlook
Outlook Guiding • SalMar well equipped for further sustainable growth Q2 2023 FY 2023 – Strong growth potential in optimal locations Cost Harvest Contract Harvest Contract Level1 Volume1 share2 Volume share2 – Robust value chain with unutilized potential Slightly Norway Same level ~25% 243,000 ~12%
Slide 24: Capital Markets Day 2023
Capital Markets Day 2023 6-7 September 2023 Tromsø & Senja, Northern Norway • Day 1: Company presentations and dinner • Day 2: Visit to our facilities across the value chain – Senja 1/2 – smolt facility – Farming site & remote feeding center – InnovaNor – harvesting & processing facility • Link for
Slide 25: Thank you for your attention
Thank you for your attention Passion for Salmon For more information, please visit www.salmar.no FINANCIAL CALENDAR: Annual General Meeting – 8 June 2023 Q2 2023 presentation – 24 August 2023 – Trondheim @ AquaNor Capital Markets Day – 6-7 September 2023 – Tromsø & Senja Q3 2023 presentation – 9 Nov
Slide 26: Forward looking statements
Forward looking statements The statements contained in this presentation may contain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect current expectations and assumptions as to future events and circumstances that may not prove