Salmon Evolution Asa · OSL:SALME
Salmon Evolution Asa — Q3 2023 Earnings Presentation
29 slides from Salmon Evolution Asa's earnings presentation, Nov 15, 2023
Slide 1: Q3 2023 Presentation
Q3 2023 PRESENTATION CEO: Trond Håkon Schaug-Pettersen CFO: Trond Vadset Veibust 15 November 2023
Slide 2: Disclaimer
DISCLAIMER This presentation (the “Presentation”) has been prepared by Salmon Evolution ASA (the “Company” and together with is subsidiaries, the “Group”) except where context otherwise requires, solely for information purposes. This Presentation, and the information contained herein, does not const
Slide 3: Agenda
Agenda • Highlights • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 3 Q3 2023 Presentation
Slide 4: Highlights
HIGHLIGHTS • Strong biological performance. Standing biomass • On track for production cost on par with of 2,100 tonnes per 30 September, up from 1,047 conventional farming tonnes per 30 June 2023. • Batch 8 stocked end August og and batch 9 end • All-time high biomass production with 1,290 tonnes O
Slide 5: Agenda
Agenda • Highlights • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 5 Q3 2023 Presentation
Slide 6: We put biology first
WE PUT BIOLOGY FIRST Low mortality Industry leading superior share ASC certified Average monthly mortality (seawater) Average superior share 1,60% 94% Average conventional industry1 1,40% 1,20% 1,00% 85% 0,80% Salmon Evolution actuals 0,60% The prestigious ASC certification achieved after only 18 mo
Slide 7: Strong operational performance
STRONG OPERATIONAL PERFORMANCE Gearing up biomass growth and harvest Net biomass growth1 (tonnes, LW) ▪ All-time high standing biomass of 2,100 tonnes 2 500 on 30 September, up 101 % since 30 June. Steady state biomass production 2 000 ▪ All-time high biomass production during Q3 1 500 with 1,290 to
Slide 8: Group biomass overview
GROUP BIOMASS OVERVIEW Group biomass development 30 June 2023 30 September 2023 Biomass Biomass Batch Units (#) Weight (g) Units (#) Weight (g) Comments (tonnes, LW) (tonnes, LW) Harvested ~185 tonnes (HOG) mid-September. Expect Batch #3 (Oct 22) ~149,000 ~2,010 300 ~84,000 ~3,205 268 remaining biom
Slide 9: Significantly increasing harvest volumes in Q4
SIGNIFICANTELY INCREASING HARVEST VOLUMES IN Q4 Comment Gearing up harvest volumes Harvest volumes (tonnes, HOG) Superior share • Parts of batch 3 harvested in September yielding Q4-23 185 tonnes HOG with 96 % superior share, tight expectation ~1,000 ~1,200 weight concentration and good price realiz
Slide 10: Indre Harøy Phase 2
Phase 2 8kt HOG H2 2025 Phase 3 16kt HOG Processing Phase 1 30 min by 2028 wellboat 8kt HOG Complete • Phase 2 will take production capacity to 16kt HOG annually, 50% of Indre Harøy fully developed. • Focus on design, engineering and cost optimization together Smolt with contractors. Phase 2 blastin
Slide 11: Agenda
Agenda • Highlights • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 11 Q3 2023 Presentation
Slide 12: North America – building a pipeline for future growth
NORTH AMERICA – BUILDING A PIPELINE FOR FUTURE GROWTH Project overview Target areas • Established dedicated team and incorporated US corporate structure. • Partnership model to be pursued once project matures, leveraging Salmon Evolution’s human capital. Comments Target areas • Continuing evaluation
Slide 13: K Smart Farming – focus on engineering and permitting
K SMART FARMING – FOCUS ON ENGINEERING AND PERMITTING Project overview Overview main permits • Joint venture between SE and Dongwon Industries, Jeongseon (smolt facility) ownership split 49/51% respectively. • Dongwon Industries to facilitate 75% debt financing. Permit Status Comment • Targeted tota
Slide 14: Agenda
Agenda • Highlights • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 14 Q3 2023 Presentation
Slide 15: Why our salmon farming approach makes sense
WHY OUR SALMON FARMING APPROACH MAKES SENSE Illustration of different technological approaches – pros and cons PARITY PARITY Est CAPEX/kg (NOK, HOG) Est. EBIT FARMING COST/kg (NOK, HOG) 0 100 200 300 40 50 60 70 80 90 100 ESCAPE MORTALITY ENERGY NITROGEN RECOVERY AIRFREIGHT RESOURCE RENT TAX GROWTH
Slide 16: Strong outlook for Salmon Evolution
STRONG OUTLOOK FOR SALMON EVOLUTION Highly competitive farming cost Strong price outlook for Salmon Estimated EBITDA farming cost per batch excl. G&A1 Fishpool forward price3 (NOK, HOG) (NOK, HOG) 120 82 kg/HOG 100 80 60 40 53-58 kg/HOG 20 0 #1 #2 #3 #4 #5 #6 #7 Phase 1 H1-24 H2-24 H1-25 H2-25 Batch
Slide 17: Price implication of superior fish welfare and uniform harvest profile
PRICE IMPLICATION OF SUPERIOR FISH WELFARE AND UNIFORM HARVEST PROFILE Unique product +1.5-3.0 characteristics +1.0-1.5 +3.5-4.0 Certifications +1.5-3.0 +2.5-3.0 Built-in NOK 3.5-4.0 above industry Avg. realized price Higher superior Uniform harvest Built-in premium Certifications conventional share
Slide 18: Group profit and loss
GROUP PROFIT AND LOSS Summary of result Comment • Revenues of NOK 15.9m in Q3, most of it related to harvest of first fish group in batch 3. The price realization was NOK ~72.0 per KG1. ➢ Other income related to sale of services. • EBITDA before fair value adjustment of biomass of NOK -24.6m in Q3 2
Slide 19: Financial position and cash flow
FINANCIAL POSITION AND CASH FLOW Financial position Comment • Strong financial position. • Available liquidity of NOK 705 million per 30 Sept. including committed undrawn credit facilities. • Investments the next 6-9 months expected to be relatively moderate. • Negative cash flow from operations ref
Slide 20: Segments
SEGMENTS Farming Norway Other • Batch 3 partially harvested generating NOK 13.4 • Revenues of NOK 7 million related to sale of services to million in revenues. Group companies and K Smart JV. • High superior share of 96 % and strong price realization. • In Other segment all resources related to proj
Slide 21: Agenda
Agenda • Highlights • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 21 Q3 2023 Presentation
Slide 22: Summary and outlook
SUMMARY AND OUTLOOK Fully operational Highly attractive Highly competitive Strong financial Scalable business at industrial scale market backdrop farming cost position model Strong biological On the verge of Farming costs decreasing Funding for phase 2 in Ready for scaling in performance. Proof of s
Slide 23: Q&A
Q&A www.salmonevolution.no 23 Q3 2023 Presentation
Slide 24: Agenda
Agenda • Highlights • Operations – Norway • Operations - International • Financials • Summary and outlook • Appendices 24 Q3 2023 Presentation
Slide 25: Salmon Evolution is the global leader in land-based salmon farming
SALMON EVOLUTION IS THE GLOBAL LEADER IN LAND-BASED SALMON FARMING Pioneering the hybrid Proof of concept in Premium position We put biology first International expansion flow-through system Norway based on quality & ESG (HFS) Our technology approach Establish Indre Harøy as global Developing superi
Slide 26: Salmon Evolution at a glance
SALMON EVOLUTION AT A GLANCE ▪ Founded in 2017 by entrepreneurs with extensive track record in the aquaculture and seafood industry. Listed on Oslo Stock Exchange from 2021. ▪ Backed by strategic owners across the value chain. ▪ Pioneering the Hybrid flow-through system (HFS) – setting Salmon Evolut
Slide 27: Robustness of hybrid flow through system fully demonstrated during the quarter
ROBUSTNESS OF HYBRID FLOW THROUGH SYSTEM FULLY DEMONSTRATED DURING THE QUARTER 1 We have found the sweet-spot: 2 Minimizing risk: Hybrid flow-through system (HFS) Each tank is a separate biozone RAS Recirculating aquaculture system Biofilter shared by No biofilter – each tank a several tanks – separ
Slide 28: Strong management team with extensive experience
Strong management team with extensive experience leading a growing organization and corporation Management team Organizational structure Corporate structure Trond Håkon Schaug-Pettersen, CEO ▪ >15 years experience from both salmon industry and capital markets notably at Hofseth International and Swe
Slide 29: Highly competent board of directors backed by strong owners
Highly competent board of directors backed by strong owners Board of directors Ownership as per 30 September 2023 Tore A. Tønseth Eunhong Min Ownership Shareholder Board representative Comments Chairman of the board Board member share ▪ Investment Director at Ronja ▪ Chief Executive Officer of Owned