Salmar Asa · OSL:SALM
Salmar Asa — Debt Investor Presentation (January 2025)
48 slides from Salmar Asa's debt investor presentation, Jan 21, 2025
Slide 1: Green Bond Credit Investor Presentation
Green Bond Credit Investor Presentation 21 January 2025
Slide 2: Disclaimer and important information (I/II)
Disclaimer and important information (I/II) 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, JAPAN, HONG KONG OR SOUTH AFRICA OR TO ANY RESID
Slide 3: Disclaimer and important information (II/II)
Disclaimer and important information (II/II) The Presentation reflects the conditions and views as of the date set out on the front page of this Presentation. The information contained herein is subject to change, completion, or amendment without notice. In furnishing this Presentation, neither the
Slide 4: Summary of risk factors (I/II)
Summary of risk factors (I/II) General Risks Related to the Group and the Industry in which the Group Operates The Company and its subsidiaries (together the "Group") are exposed to numerous risk factors, and an investment in the • The Group faces numerous risks, including biological production, cli
Slide 5: Summary of risk factors (II/II)
Summary of risk factors (II/II) Risks related to the Group’s financing and financial situation Risks relating to the Bonds • Capital-intensive operations may require additional funding if cash from operations is insufficient. The Group may be • The Bonds may not be a suitable investment for all inve
Slide 6: Agenda
Agenda Company overview 6 Sustainability at SalMar 14 Financials 23 Market overview 32 Appendix 38 Risk factors 40 6
Slide 7: This is SalMar
This is SalMar North-Atlantic production with a global reach Norway • Founded in 1991, SalMar is the world’s 2nd largest Atlantic salmon SalMar Frøya producer and the world’s largest producer of organic salmon Iceland Icelandic Salmon • Listed on Oslo Stock Exchange with a market cap of ~NOK 70bn1 S
Slide 8: Our story
Our story is about utilizing the potential in the ocean always on the Produce healthy, terms of the nutritious & Salmon with sustainable food minimal footprint for the world’s while we maximize growing population value creation 8
Slide 9: Our story: A history of growth
Our story A history of growth Norway Offshore Northern Norway 2017 2000 Iceland Frøya, Central Norway Offshore 1991 2015 UK 2001 Iceland From a small processing plant on Frøya, to the world’s 2nd largest salmon producer UK 9
Slide 10: Our story is built on a passion for salmon
Our story is built on a passion for salmon Fundamental Operating Principles Fish welfare throughout the value chain crucial for minimal footprint maximize value production of healthy, nutritious and sustainable food in the areas we creation operate of the salmon Our growth will always be on the term
Slide 11: SalMar is strategically located in the best regions to produce salmon
SalMar is strategically located in the best regions to produce salmon… Central and Northern Offshore Iceland UK Norway Operating in the best regions in Pioneering and leading Largest producer in the UK’s second largest Norway the development West Fjords salmon producer Significant untapped growth po
Slide 12: Consistently delivering strong margins above peers
…while consistently delivering strong margins above peers EBIT-margin (NOK/kg) – 12 month rolling Source: Peer company filings 12
Slide 13: Further growth potential in all regions
Further growth potential in all regions 2025E: 254,000 tons Harvest volume +26% Δ2024: +40,700 tons / +19 % ‘000 tons gw Norway1 370 23 Unutilized potential starting to materialize 76 26 294 13 267 16 2025E: 9,000 tons 13 252 15 Offshore2 Δ2024: +2,100 tons / +30 % 18 20 9 212 2 12 199 Ramping up vo
Slide 14: Agenda
Agenda Company overview 6 Sustainability at SalMar 14 Financials 23 Market overview 32 Appendix 38 Risk factors 40 14
Slide 15: SalMar best company in food and beverage sector for sustainable growth
“SalMar is the best company in the global food and beverage sector for sustainable growth in 2025” - TIME Magazine and Statista 15
Slide 16: The future is our inspiration
The future is our inspiration Demand Supply 2020 2050 Healthy Population Protein with low New technology Growing food growth footprint needed middle class Et bilde som inneholder tekst, tre, plakat, grafisk design Automatisk generert beskrivelse UN/FAO: A Global Roadmap to 2040 Et bilde som innehold
Slide 17: Strong demand for our products
Strong demand for our products Strong demand for healthy and sustainable proteins The growing world population wants to eat healthy, organic and sustainable food, with low carbon footprint Market and authorities require sustainable food production EU farm to fork strategy, aiming to accelerate the t
Slide 18: Sustainability in everything we do
Sustainability in everything we do Fish Survival rate Antibiotic use GSI We work systematically to create an environment in which the salmon 94% 0 thrives and remains healthy Environment & Technology Scope 1+2+3 GHG target We minimize our footprint with -25% aligned with measures and routines GHG in
Slide 19: New knowledge gives new technology for sustainable growth
New knowledge gives new technology which can become a catalyst for further sustainable growth Traditional Submerged Semi-closed Closed Offshore 19
Slide 20: Strengthening value chain to ensure farming on the terms of the salmon
Strengthening value chain to ensure farming on the terms of the salmon Harvesting & Broodstock Smolt On-Growing Processing Genetics Smolt production Feed & Nutrition Production technology Fish welfare & surveillance Harvesting & VAP Breeding Semi- Treatment Vaccines Feed Closed Traditional Lasers Ha
Slide 21: Salmon Living Lab innovation center
Salmon Living Lab an innovation center to create the sustainable aquaculture the world needs We need excellence along the value chain Target – in-depth knowledge about drivers of biological performance and product quality Need to close Strong and close Time to Received very Aiming to attract knowled
Slide 22: Green Bond Framework – Project categories & eligible investments
Green Bond Framework – Project categories & eligible investments Green Project Category Eligible investments SDG1 Sustainable food production • Sustainable coastal fish farms (ASC/Debio • Sustainable facilities for smolt production (RAS facilities and closed net pens) certified) • Environmental mana
Slide 23: Agenda
Agenda Company overview 6 Sustainability at SalMar 14 Financials 23 Market overview 32 Appendix 38 Risk factors 40 23
Slide 24: Historical development of key figures and ratios
Historical development of key figures and ratios Revenue and Operational EBIT Harvest volumes1 NOKm Revenues Operational EBIT 1,000 tonnes gw Harvest volumes Operational EBIT/kg 28,219 26,570 300 .0 254.1 241.1 60.0 20,158 250 .0 50.0 182.1 193.7 15,044 200 .0 40.0 150 .0 32.1 30.0 8,159 23.1 25.4 4
Slide 25: Group Profit & Loss
Group Profit & Loss Comments related to LTM Q3 24 vs. FY 2023 Group P&L as of Q3’24 • Operational EBIT lower YoY driven by biological NOK million Operating revenues YTD Q3 24 18,550 LTM Q3 24 26,570 FY 2023 28,219 challenges at the start of 2024 EBITDA 5,178 7,752 9,578 Operational EBIT 3,940 6,133
Slide 26: Large cost savings identified in the value chain
Large cost savings identified in the value chain • Focus on optimizing the entire value chain after Cost savings in the value chain1 synergy realization from NTS, NRS and NOK million SalmoNor was finalized in 2023 120 1,255 17% 251 83% 23% Efficiency • Identified yearly cost savings of NOK 1.2 billi
Slide 27: Group Financial Position
Group Financial Position Equity and equity ratio All figures in NOK million Equity Equity ratio • Solid equity cushion at NOK 19,476 million per 30,000 24,155 140% 23,079 Q3’24 25,000 19,476 120% 20,000 100% – Equity ratio 35% following purchase of non- 15,483 80% 15,000 controlling interest, implem
Slide 28: Group Cash Flow Drivers
Group Cash Flow Drivers Changes in Cash & Cash Equivalents • Primary cash flow drivers are funds 18,000 from operations, financing activities 16,000 and dividend payments • In 2023, SalMar sold Frøy leading to a 14,000 significant positive cash flow effect 12,000 under Disposals • Furthermore, chang
Slide 29: Long-term facilities
Long-term facilities1 Sustainable and flexible Overview Maturity profile financing All figures in NOK billion Undrawn RCF Green Bond 12 NOK 4.9bn 10 NOK 3.5 bn 10 • Credit facility in SalMar ASA NOK 6 an bn 8 o 100% NO – NOK 16 billion unsecured facility (RCF+Term loan) Term L 6 RCF bn K 10 – NOK 3
Slide 30: SalMar is committed to maintain an IG credit profile through the cycle
SalMar is committed to maintain an IG credit profile through the cycle Financial & dividend policy Ratings & Outlook from NCR BBB+ Long-term/ SalMar ASA’s dividend policy is based on the company at all times having unsecured a solid balance sheet and liquidity reserve that is sufficient to handle ra
Slide 31: Hedging policy
Hedging policy Currency exposure by revenues CAD, 1% SEK, 1% 2023 JPY, 4% USD, 35% • The Group enters into forward currency contracts to reduce the risk associated with sales revenues EUR, 26% denominated in foreign currencies • The bulk of the Group’s output is sold internationally, with accounts s
Slide 32: Agenda
Agenda Company overview 6 Sustainability at SalMar 14 Financials 23 Market Overview 32 Appendix 38 Risk factors 40 32
Slide 33: Supply growth has stagnated globally and is lagging the demand
Supply growth has stagnated globally and is lagging the demand Expect a supply growth of 2-3% from conventional farming until 2030 Global harvest volume per region Demand vs. supply growth Thousand tonnes WFE Demand Supply Norway UK Chile North America Others 3,500 3,000 2,500 2,000 1,500 1,000 500
Slide 34: Salmon is not considered expensive compared to other proteins
Consumption is still low in most markets – and salmon is not considered expensive compared to other proteins Consumption of salmon Salmon-to-Meat Price Ratio Kg/capita Salmon more expensive than meat 35 32 30 25 23 20 14 Average 15 ratio 10 10 5 1.7 2.3 0.4 0 Meat more expensive than Global USA EU N
Slide 35: Local secondary processing capacity a strong strategic advantage
Whole fish Fillet Local secondary processing capacity a strong strategic advantage for SalMar • Built large capacity in close proximity to farming operations – Reduces biological risk in sea and optimizes biological production – Capacity to handle 1/5 of all volume in Norway Reduction in GHG emissio
Slide 36: Our go-to-market approach reaches customers worldwide
Our go-to-market approach reaches customers worldwide • 2/3 of volume sold to the European market Our products – Largest and most mature salmon market in the world delivered to • 1/3 of volume sold overseas > 50 – Split between North America and Asia countries – High share of VAP to overseas markets
Slide 37: Atlantic Salmon prices at a high with outlook for strong prices in 2025
Atlantic Salmon prices are currently at a high, following seasonal patterns with outlook for continued strong prices in 2025 Norwegian Salmon Exports, Fresh Price (NOK/kg) Euronext European Salmon Futures (NOK/kg) 140 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 Jan 20 Jul 20 Jan 21 Jul 21 Jan 22
Slide 38: Agenda
Agenda Company overview 6 Sustainability at SalMar 14 Financials 23 Market Overview 32 Appendix 38 Risk factors 40 38
Slide 39: Green Bond Framework – Second Party Opinion
Green Bond Framework – Second Party Opinion Medium Green shading Framework strengths • An S&P Global Second Party • “SalMar addresses important environmental and Opinion (SPO) includes S&P biodiversity risks by using certification schemes Global Ratings' opinion on throughout its entire value chain.
Slide 40: Agenda
Agenda Company overview 6 Sustainability at SalMar 14 Financials 23 Market Overview 32 Appendix 38 Risk factors 40 40
Slide 41: Risk factors (I/VIII)
Risk factors (I/VIII) An investment in the Bonds involves inherent risks. Investors should consider all information set forth in this Investor Presentation and, in particular, the specific risk factors set out below. An investment in the Bonds is suitable only for investors who understand the risks
Slide 42: Risk factors (II/VIII)
Risk factors (II/VIII) 2. RISK RELATING TO THE GROUP’S OPERATIONS 2.1 The Group's operations are subject to biological risks The Group's operations are subject to biological risks which could have a negative impact on profitability and cash flows. Biological risks include for instance oxygen depleti
Slide 43: Risk factors (III/VIII)
Risk factors (III/VIII) 2. RISK RELATING TO THE GROUP’S OPERATIONS 2.5 The Group is exposed to regulatory risk related to climate change The Group is increasingly transporting products by air freight, particularly to the US and Asian markets. The largest direct source of emissions comes from the use
Slide 44: Risk factors (IV/VIII)
Risk factors (IV/VIII) 3. RISK RELATED TO THE GROUP’S FINANCING AND FINANCIAL SITUATION 3.1 Funding may not be available on favourable terms in the future or at all The Group's business and future plans are capital intensive and, to the extent the Group does not generate sufficient cash from operati
Slide 45: Risk factors (V/VIII)
Risk factors (V/VIII) 4. RISK RELATED TO LAWS AND REGULATIONS AND POLITICAL RISKS 4.1 The Group is exposed to risk of litigation and investigations by public authorities The Group operates in a highly regulated industry and is exposed to risk related to litigation and investigations by public author
Slide 46: Risk factors (VI/VIII)
Risk factors (VI/VIII) 4.4 Risks related to international trade restrictions imposed on the Group The Group's business is affected by laws and regulations in the geographical areas in which the Group operates, and the Group may be exposed to political and other uncertainties, including risks of impo
Slide 47: Risk factors (VII/VIII)
Risk factors (VII/VIII) 5. RISKS RELATED TO THE BONDS1 5.1 Risks related to the market and potential market value of the Bonds The Bonds will be new securities for which there is currently no trading market. Even though the Issuer is intending to apply for a listing of the Bonds on the Oslo Stock Ex
Slide 48: Risk factors (VIII/VIII)
Risk factors (VIII/VIII) 5.5 The Bonds may be redeemed early due to a tax event Under the Bond Terms, the Issuer will have the right to redeem the outstanding Bonds before the final redemption date if the Issuer is required by law to withhold any tax from any payment in respect of the Bonds. In such