Gigante Salmon As · OSL:GIGA
Gigante Salmon As — Investor Presentation (July 2021)
50 slides from Gigante Salmon As's investor presentation, July 2021
Slide 1: Gigante Salmon Company Presentation July 2021
STRICTLY PRIVATE AND CONFIDENTIAL GIGANTE SALMON COMPANY PRESENTATION JULY 2021 Private and Confidential STRICTLY PRIVATE AND CONFIDENTIAL
Slide 2: Contents
CONTENTS 1. INTRODUCTION 2. MARKET OVERVIEW 3. PROJECT OVERVIEW 4. FINANCIAL INFORMATION 5. RISK FACTORS
Slide 3: Important information and disclaimer
Important information and disclaimer THIS DOCUMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR PROJECTIONS OF THE COMPANY OR ASSUMPTIONS BASED ON INFORMATION IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AVAILABLE TO THE COMPANY. SUCH FORWARD-LOOKING INFOR
Slide 4: Introduction
01 INTRODUCTION
Slide 5: Current progress and milestones
01 Introduction Current progress and milestones ✓ The Ministry of Fisheries ✓ Entered into a lease ✓ Plan and impact ✓ Rødøy approves final ✓ The Norwegian Food repealed the requirement agreement with an option assessment together with zoning plan for industry, Safety Authority gives its for a licen
Slide 6: At a glance
01 Introduction At a glance Gigante Salmon… …a part of the Gigante Havbruk group ▪ Gigante Salmon is a part of the Gigante Havbruk group, which is a major player in the Norwegian aqua culture industry. ▪ Gigante Salmon will employ the management team and lead the project. In addition to the shares o
Slide 7: Investment highlights
01 Introduction Investment highlights 1 ▪ Main owner and project initiator with extensive experience in the Norwegian aquaculture industry. EXPERIENCE ▪ Gigante Havbruk group has 30 years of experience of successful salmon farming. ▪ The group is present in the whole value chain from broodstock to e
Slide 8: Market overview
02 MARKET OVERVIEW
Slide 9: Increasing demand for healthy protein sources
02 Market overview Increasing demand for healthy protein sources Comments Population growth Global fish consumption per capita ▪ A growing global population will billion kg increase the global demand for 20.6 21.4 10.9 proteins. 9.7 8.5 15.8 7.8 6.1 9.9 ▪ Health benefits and limitations in 5.3 tradi
Slide 10: Significant growth potential for Atlantic Salmon in most geographical markets
02 Market overview Significant growth potential for Atlantic Salmon in most geografical markets Market size Consumption per capita 600 9 8.2 8 500 7 6.3 6.1 400 6 Market size tons (1000) Kg WFE per capita 5 4.8 300 4 3.4 3.3 200 3 2.7 Average 2.6 2.6 2.5 2.4 consumption 2 1.7 1.8 1.8 100 1.4 1.3 0.9
Slide 11: Stagnating growth in traditional farming
02 Market overview Stagnating growth in traditional farming Global Atlantic salmon supply (1000 tons GWT) Comments 3000 CAGR +3% ▪ The supply of Atlantic salmon has increased by CAGR +7% 7% p.a. from 2010 to 2019. 2500 ▪ Due to biological and regulatory constraints it is 2000 expected that the annua
Slide 12: Challenges in traditional fish farming
02 Market overview Challenges in traditional fish farming ▪ Traditional open pen fish farming is constrained by availability of suitable locations. Limited locations ▪ Area needs of new aquaculture sites creates potential conflicts with established users. ▪ New locations need adequate spacing from e
Slide 13: Project overview
03 PROJECT OVERVIEW
Slide 14: Project summary
03 Project overview Project summary 16,000 ~31 NOK 24 ~71 NOK ~24 NOK tons HOG per year production cost per kg months production capex/kg HOG capex/kg HOG HOG cycle 1/3 production full production 14
Slide 15: Innovative production concept increases area efficiency and reduces emissions and diseases
03 Project overview Gigante Salmon’s innovative production concept helps to increase area efficiency and reduce emissions and diseases SOCIAL Lasting Righteous NO SEA LICE NO ESCAPES Sustainability The water is collected under No escapes that could affect the the lice larva’s habitat wild salmon pop
Slide 16: Gigante Havbruk is the project initiator and will own the majority of the shares
03 Project overview Gigante Havbruk is the project initiator and will own the majority of the shares after the placement About Gigante Havbruk group Financial performance ▪ Gigante Havbruk group was established in 1988 by Kjell Lorentsen. 700 37.7 % 40.0 % 606 603 600 35.0 % 555 ▪ From humble beginn
Slide 17: Gigante Havbruk consists of four main segments
03 Project overview Gigante Havbruk consists of four main segments Corporate structure Comments ▪ Gigante Havbruk AS is owned by the families Lorentsen and Storholm. Fam. Lorentsen Fam. Storholm ▪ Gildeskål Forskningsstasjon AS 80% 20% («GIFAS») is the group’s main Gigante Havbruk AS aquaculture ope
Slide 18: Gigante Havbruk group has a fully integrated value chain
03 Project overview Gigante Havbruk group has a fully integrated value chain BROODSTOCK ROE FRY SMOLT 2 MONTHS 6 MONTHS 7 MONTHS WELLBOAT TRANSPORT - Smolt is pumped straight from well boat into raceways PRODUCTION FREIGHT HARVEST SALES/EXPORT 14-24 MONTHS Resources and expertise 18
Slide 19: All key agreements are in place
03 Project overview All key agreements are in place # Agreement Counterparty Ownership Management Gigante Havbruk AS owns 35% of the shares in Salten Aqua AS, directly and 1 Salten Aqua AS agreement indirectly. Gigante Havbruk AS owns 51% of the shares in Grytåga Settefisk AS, directly and 2 Smolt a
Slide 20: GIFAS provides aquaculture experience and R&D capabilities
03 Project overview GIFAS provides years of aquaculture experience and reasearch and development capabilities About GIFAS Financial performance ▪ GIFAS is headquartered in Sund, in the middle of Gildeskål 700 50.0 % municipality. The company currently has two departments: a 600 596 591 547 40.5 % re
Slide 21: Salten Aqua will provide administrative and operational resources
03 Project overview Salten Aqua will provide both administrative and operational resources About Salten Aqua Financial performance ▪ Salten Aqua is owned by Gigante Havbruk, Edelfisk and Wenberg 1,800 1,612 5.0 % Fiskeoppdrett. 1,600 1,430 1,400 4.0 % 1,300 1,233 1,200 ▪ Salten Aqua gives the owners
Slide 22: Smolt and fish health capabilities will be sourced from KapNord
03 Project overview Smolt and fish health capabilities will be sourced from KapNord About KapNord Financial performance ▪ KapNord is a company that invests primarily in aquaculture in 450 14.0 % 399 Northern Norway. 400 12.0 % 358 11.5 % 350 10.0 % ▪ The company owns: 300 9.1 % ▪ Grytåga Settefisk –
Slide 23: Facility to be constructed on Lille Indre Rosøya on the Helgeland coast
03 Project overview The land based facility will be constructed on Lille Indre Rosøya on the Helgeland coast 1 Lille Indre Rosøya 1 Rødøy Mo i Rana 23
Slide 24: A carefully selected location
03 Project overview A carefully selected location … Why the chosen location? ✓ Environmentally assessed in the best category by AkvaPlan Niva. ✓ Centrally placed between hatchery and slaughterhouse. ✓ Over 5 km to nearest fish farm and no need for treatment of intake water. ✓ The island is convenien
Slide 25: Makes it possible to bring the sea on land
03 Project overview … makes it possible to bring the sea on land Comments ▪ The facility will consist of three large pools. ▪ Five raceways are established in each pool. The raceway setup can be modified according to changes in futures needs. ▪ The water is pumped into the end of each raceway and ou
Slide 26: Land based flow-through system with conventional operational setup
03 Project overview The facility will be a land based flow-through system with a conventional operational setup Pool and raceways Current control ▪ 5 raceways installed in each pool: ▪ Each raceway is split with a partition and ▪ 5x9,000m3 = 45,000m3 mixers to create optimal water dynamics for aquac
Slide 27: Pools designed with flexibility to adjust to regulatory changes
03 Project overview Pools designed with flexibility to adjust to regulatory changes The pools will be excavated down to an elevation of -7 meters. In the event of a change in the regulations, water may be moved in and out of the facility without lifting the water. This will both increase total pool
Slide 28: Gigante Salmon expects low CAPEX and production cost
03 Project overview Gigante Salmon expects low CAPEX and production cost Risk Gigante Salmon RAS technology Traditional farming Technology ▪ Flow-through of fresh sea water ▪ Recycled sea water ▪ Open pens ▪ Low degree of new technology implementation ▪ High degree of new technology implementation ▪
Slide 29: Team with extensive construction and aquaculture experience
03 Project overview Team with extensive construction and aquaculture experience HELGE EGIL WÅGØ ALBERTSEN RUNE JOHANSEN CEO CFO ▪ Extensive experience with project management in building ▪ Worked as CFO in Salten Aqua and has through the and construction. administration agreement with Gigante group
Slide 30: Board of Directors
03 Project overview Board of Directors EIRIK SØRGÅRD KJELL ARILD LORENTSEN Chairman of the board Board member ▪ CEO KapNord AS. ▪ Founder and CEO of Gigante Group. ▪ Broad experience from marine sector, oil & gas, IT and ▪ Has held leading positions in the fishery and finance. aquaculture industry s
Slide 31: Completed private placement will fund construction and commercialization
03 Project overview The completed private placement of MNOK 222 will be used to fund construction and commercialization1 1 2 3 Construction phase Production first batch Sales/export 2021 - 2023 2023 - 2025 2024 - 2025 3 1 2 ▪ Acquistion of Lille Indre Rosøya finalised. ▪ 1,100,000 smolt to be releas
Slide 32: Timeline towards 16,000 tons of yearly production
03 Project overview Timeline towards 16,000 tons of yearly production 2021 2022 2023 2024 2025 2026 2027 Pilot raceway – optimisation velocity, exchange, Pilot phase purification Startup constructon on Lille Indre Rosøya Construction Testing Startup production – 1.1 mill smolt Slaughter 5,300 tons H
Slide 33: Financial information
04 FINANCIAL INFORMATION
Slide 34: Low CAPEX due to an efficient location acquired at a low price
04 Financial information Low CAPEX due to an efficient location acquired at a low price # Description Budget (MNOK) Comments 1 Acquisition Lille Indre Rosøya 1.0 Acquisition complete 2 Stone excavation and land preparation 62.0 Estimated volume 468.000 m3. Agreement with Gabbro Nor AS 3 Establish do
Slide 35: Construction financing and overdraft facility from SpareBank 1 Nord-Norge
04 Financial information Gigante Salmon has construction financing and overdraft facility from SpareBank 1 Nord-Norge in place ▪ Construction loan: NOK 204,000,000 – term approx. 12 months to be converted to a long term loan: NOK 204,000,000 – Term 1+7 years upon Granted financing: completion of con
Slide 36: Cost levels below traditional salmon farming
04 Financial information Cost levels below traditional salmon farming Estimated operating costs per kg HOG Comments NOK ▪ Supplier agreement with Grytåga Settefisk (group comapny) for delivery of smolt. 50 Lower cost per kg relative to traditional 45 farming due to use of 100g smolt and a 43 higher
Slide 37: Atlantic salmon historical price development
04 Financial information Atlantic salmon – Historical price development Fish Pool Index NOK/kg Atlantic salmon, head on gutted (HOG) Comments 90 ▪ According to the Fish Pool Index (FPI), the average 80 salmon price between January 2018 and April 70 2021 has been 58 NOK/kg. Lower and upper quartile 6
Slide 38: Production, capacity and sensitivity
04 Financial information Production, capacity and sensitivity Phase 1 Full production EBIT Sensitivity (MNOK) Harvest tons (1000) HOG Smolt released 1,100,000 3,300,000 5 8 10 13 16 38 100 160 200 260 320 36 110 176 220 286 352 Cost / kg Harvest (tons, WFE) 6,350 19,050 34 120 192 240 312 384 32 130
Slide 39: Risk factors
05 RISK FACTORS
Slide 40: Risk factors
05 Risk Factors Risk factors 1 RISK FACTORS 1.1 Risk related to the business and industry in which the Group operates Investing in the Shares involves inherent risks. Before making an investment decision, investors Risk relating to the Group's ability to meet its objectives should carefully consider
Slide 41: Risk factors
05 Risk Factors Risk factors The Group may not have sufficient insurance coverage to cover any damage to the Rosøy Risks related to existing and increasing competition in the farmed salmon market Facility, during and after the construction has completed The market for farmed salmon in general is glo
Slide 42: Risk factors
05 Risk Factors Risk factors Aquaculture is vulnerable to errors in technology, production equipment and transportation, processing and sale of fish products, the Group must to a significant extent rely maintenance routines upon its counterparties, and their contracting parties, to fulfil their cont
Slide 43: Risk factors
05 Risk Factors Risk factors Risks related to feed costs and supply management. Any loss of the services of key management or future key employees, particularly to competitors, or the inability to attract and retain highly skilled personnel could have a material Feed costs are expected to account fo
Slide 44: Risk factors
05 Risk Factors Risk factors If the Group is not able to attract and retain customers and commercial partners, this cyclical pattern based on the balance between total supply and demand. No assurance can be could adversely impact the Group's business and financial position given that the demand for
Slide 45: Risk factors
05 Risk Factors Risk factors Risks related to intellectual property apply for further permits, which could in turn have a material adverse effect on the business, financial condition, results of operations, prospects or cash flow of the Group. For example, the The success of the Group will depend on
Slide 46: Risk factors
05 Risk Factors Risk factors Risks related to international trade restrictions imposed on the Group upon matters, air pollution emissions, wastewater discharges, solid and hazardous waste commencement of operations management, and the use, composition, handling, distribution and transportation of ha
Slide 47: Risk factors
05 Risk Factors Risk factors The price of the Shares may fluctuate significantly shareholders, existing shareholders have pre-emptive rights to participate in the issuance of new shares for cash consideration. Shareholders in the United States as well as in certain other The trading price of the Sha
Slide 48: Risk factors
05 Risk Factors Risk factors Shareholders outside of Norway are subject to exchange rate risk stage it is in and also the competitive nature of its business. All of the Shares will be priced in Norwegian Kroner ("NOK"), the lawful currency of Norway and Any such additional offering could reduce the
Slide 49: Risk factors
05 Risk Factors Risk factors The transfer of the Shares is subject to restrictions under the securities laws of the United states and other jurisdictions The Shares have not been registered under the U.S. Securities Act or any U.S. state securities laws or any other jurisdiction outside of Norway an
Slide 50: STRICTLY PRIVATE AND CONFIDENTIAL STRICTLY PRIVATE AND CONFIDENTIAL
STRICTLY PRIVATE AND CONFIDENTIAL STRICTLY PRIVATE AND CONFIDENTIAL