Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Q2 2010 Earnings Presentation

23 slides from Bakkafrost P/f's earnings presentation, Aug 20, 2010

  1. Slide 1: Presentation Q2 2010

    Presentatio on Q2 2010 CEO Regin Jacobsen CFO Teitur Samuelsen ust 20th 2010 Oslo Augu

  2. Slide 2: Disclaimer

    Disclaimer  This presentation includes statements rega arding future results, which are subject to risks and uncertainties. Consequently, actuual results may differ significantly from the results indicated or implied in these statem ments.  No representation or warranty (expressed or o implied) is

  3. Slide 3: Faroe Islands

    Faroe Islands  18 islands - 1,400 km2  48,600 inhabitants  Self-governing Self governing part of the Kingdom of Denmark  Part of the Danish monetary union  Key sectors (% of wage earners, 2008)  Service/public admin.: 35%  Private service: 33%  Fishing industry: 18%  GDP: DKK 12.4 bn (2008)

  4. Slide 4: Bakkafrost – The largest fish farming company on the Faroe Islands

    Bakkafrost – The largest fish farm ming company on the Faroe Islands ~75km  Largest salmon farming company on the Faroe Islands  ~60 % of harvest volumes (H1 2010)  ~44 % of existing licenses (H1 2010)  Vestlax was merged into Bakkafrost 1 January 2010 ~110km  Produced a total of 11,085 gwt in

  5. Slide 5: Faroe Islands: Excellent conditions for cost effective farming

    Faroe Island’s: Excellent conditions for cost effec ctive farming Faroese fjords j provide p separation p between n locations Geography Average water temperatures 2002-2008 Improves biological control and area mana agement Faroe Islands Norway (Trøndelag) ºC 16 Stable water temperatures throughou

  6. Slide 6: Summary 2Q 2010

    Her Majesty The Queen of Denmark and His Royal Highness The Prince, visited at Bakkafrost 29th of June Summary 2Q Q 2010 Strictly Private and Confidential Pag ge 6

  7. Slide 7: Summary 2Q 2010

    Summary 2Q 2010  Improved margin driven by b good market prices and good operational and Marked biological performance  Challenging market for VA AP with high salmon prices Strategy  Planned operational chang ges on track • Strong financial position, position and good cash flow from operations Fi

  8. Slide 8: Financial Highlights group

    Financial Highlights group  Strong profit based on good performance Q2 2010 Q2 2009 (NO OK) Proforma  Strong salmon market drives prices and margins up to record high levels Fa arming: North West North West  Operarational performance improved EB BIT* NOK/kg gwt 18.28 14.82 11.15 2.60 Ha arvested

  9. Slide 9: Key financials, Group

    Key financials, Group Q2 2010 2009  Strong cash flow (DK KKm) Proforma  Low interest bearing debt Ca ash flow from operations 83 298 To otal assets 973 1,004 NIIBD 65 251 Eq quity ratio 74% 57% Strictly Private and Confidential Pag ge 9

  10. Slide 10: Segment Information

    SEGMENT INFORMATION Strictly Private and Confidential Page e 10

  11. Slide 11: Segments Farming

    Segments Farming  Strong operating results Q2 2010 Q2 2009 (DKKm) Proforma  High prices on salmon  Good biological g and operating p g performance Op. revenues 202 218 EBIT* 84 23  Revenues down 7% in Q2 2010 compared with Q2 2009  Harvested volumes reduced by 28%, but higher prices compensate

  12. Slide 12: Farming - Operational performance

    Farming - Operational performance  Operational EBIT* /kg and margin increased to highest level ever  Margin difference between North and West reduced * Aligned for fair value adjustment of biomass, onerous contracts provisions and costs related to the listing of the company on Oslo Børs. Strictly

  13. Slide 13: Farming - Harvest volume

    Farming - Harvest volume [1 000 tgw]  Harvested volume  N North: th 2.7 [4.8 Q2-2009 / 5.0 Q1-2010]  West 2.6 [2.5 Q2-2009 / 0.8 Q1-2010]  Harvested volumes will increase from Q4 2010, estimated quantity for 2010 24,000 tgwt.  Forecast maintained for 2010 and 2011 at total ~ 60,000 tgwt. Strict

  14. Slide 14: Segments VAP

    Segments VAP  Operating revenue increase by 61% Q2 2010 Q2 2009 (DKKm) Proforma  Volume growth by 37%  Increased raw material costs not fully covered by higher Op. Revenues 125 77 VAP prices. VAP division EBIT* -26 -13 purchases raw material at spot prices.  Contracts reduce fluctuations in the

  15. Slide 15: VAP - Operational performance

    VAP - Operational performance  High capacity utilisation in VAP factory  High VAP share in H1 2010 primarily due to reduction in harvested volumes, to come down in H2 to around 50% %  VAP challenged by increased raw material prices, continues to materialize increased prices i  Time lag between s

  16. Slide 16: Group Financials

    GROUP FINANCIALS Strictly Private and Confidential Page e 16

  17. Slide 17: Group profit and Loss

    Group profit and Loss Q2 Q2 H1 H1 2009 2010 2009 2010 2009 Proform (DKKm) Proforma a  Revenues decreased by 18% but volumes Operating revenuess 199.6 243.2 390.0 428.9 921.7 decreased by 28% - strong Purchase of goods -57.2 -64.0 -94.4 -132.9 -272.6 market Change in inventoryy and biological assets

  18. Slide 18: Balance Sheet – as per 30 June 2010

    Balance Sheet – as per 30. June 2010 2 30 June End 2010 2009 (DKKm) Proforma 136.2 136.2  Invesments in PPE to carry out the organic Intangible assets growht Property, plant and equipment 350.0 331.1 Financial assets 16.4 16.4 Longg term receivables 1.0 0.5  Reduced NIBD significantly Biological a

  19. Slide 19: Cash Flow – for 2Q 2010

    Cash Flow – for 2Q 2010 Q2 H1 2009 2010 2010 Proforma (DKKm)  Strong cash flow from operation – used to Operating profit 41.9 100.6 239.3 investments and paydown debt Cash flow from operations 82.6 124.3 298.1 Cash flow from investments -20.2 -40.0 -39.6 Cash flow from financing -48.3 -94.8 -234.7

  20. Slide 20: Outlook

    Outlook  A strong market with reduced supply lea ads to high price level  Higher contracts prices will materialize in i 2H 2010 (entered in 1H 2010)  Harvested volumes will increase from Q4Q 2010. Expect to harvest 24,000 tonnes in 2010 and maintain total production goal for 20 010 and 2011 to be

  21. Slide 21: Strong expected volume growth in existing licenses

    Strong expected volume growth in existing licenses Smolt release (million) 7.5 7.0 6.3 0.3 +42% 3.0 5.5 5.3 Expects to release 42% more smolt in 2011 than 2008 1,4 2.1 34 3.4 1,4 No absolute biomass restrictions 0.8 0.7 Trout to be phased out 4.5 3.9 3.6 3.3 3.2 2007 2008 2009PF 2010E 2011E West

  22. Slide 22: Appendix

    APPENDIX Strictly Private and Confidential Page e 22

  23. Slide 23: Strictly Private and Confidential Page e 23

    Strictly Private and Confidential Page e 23

Bakkafrost P/f — Q2 2010 Earnings Presentation on 6ix