New Zealand King Salmon Investments Ltd. · NZX:NZK
New Zealand King Salmon Investments — 1H22 Earnings Presentation
32 slides from New Zealand King Salmon Investments's earnings presentation, September 2021
Slide 1: New Zealand King Salmon Half Year Financial Results
New Zealand King Salmon HALF YEAR FINANCIAL RESULTS
Slide 2: Disclaimer
DISCLAIMER The information in this presentation has been prepared by New Zealand King Salmon Investments Limited with due care and attention. However, neither New Zealand King Salmon Investments Limited nor any of its directors, employees, shareholders nor any other person shall have any liability w
Slide 3: New Zealand King Salmon
L New Zealand King Salmon 01
Slide 4: 1H22 Summary
1H22 SUMMARY 1H22 Profitability impacted by transition to new farming model: - An unintended consequence of our prior Aquaculture Model, based on best practice, was smaller fish and this became apparent in February. Harvest volumes were reduced to increase fish size and to rebuild biomass - Availabl
Slide 5: 1H22 Summary (continued)
1H22 SUMMARY (CONTINUED) Results * Sales volume of 3,629t in 1HF22 vs 2,745t 1H21 showing recovery from initial Covid impact. * Sales of $80.1m, 20% up on 1H21 levels of $67.0m. * Statutory NPAT of ($5.6rm), compared with ($5.6m) in 1H21. * Pro Forma Operating EBITDA of $3.3m, compared with $7.1m in
Slide 6: Vision, purpose, mission and values
VISION TO BE ONE OF THE TOP OF THE SOUTH’S MOST VALUED ORGANISATIONS AND THE WORLD'S MOST INSPIRATIONAL SALMON COMPANY PU RPOSE : CREATING THE ULTIMATE SALMON EXPERIENCE ; ALL STAKEHOLDERS WITH WHOM NZKS CONNECTS SHOULD BE BETTER MISSION OF AS A RESULT MAXIMISE VALUE FOR ALL STAKEHOLDERS / CONTINUOU
Slide 7: (Jan) (Jan) (Jan)
18 19 20 21 22 (Jan) (Jan) (Jan) (Jan) (Jan)
Slide 8: Our Sustainability Developments
OUR SUSTAINABILITY DEVELOPMENTS We continue to progress on our sustainability journey: * Retained our annual Best Aquaculture Practices 4-star certification FUND eo + Top of the South community engagement to support our Blue Endeavour open ocean project 0 * Continued progress to 100% reusable, recyc
Slide 9: Keeping Our Brands Prominent
KEEPING OUR BRANDS PROMINENT 2021 New Product of the Year Winner "NY - Recognition received through awards: > Three international wins for Regal recently * Regal Wood Roasted wins coveted New Product of the Year award at the 2021 Speciality Food Association sofi awards in North America = ITQI Superi
Slide 10: Diversifying Our Brands
DIVERSIFYING OUR BRANDS Continued geographical, category and channel diversification: * Sale of Regal Fresh in the US through a multi-store premium retailer * Global market test of Ora King Keiji - our interpretation of the famed Japanese Keiji, a premium sashimi or plate-size salmon enjoyed for its
Slide 11: Financial Overview
2 FINANCIAL OVERVIEW New Zealand King Salmon
Slide 12: Summary Financial Information
SUMMARY FINANCIAL INFORMATION + Change in farming model, single year class, had unexpected negative impacts on growth (size) in Pelorus Sound, resulting in lower average harvest weight and higher fish costs. Profitability impacted 1H22 but offset by closeout of surplus foreign exchange contracts ($1
Slide 13: Harvest by Farm
HARVEST BY FARM Total harvest for 1H22 was 3,435t. The smaller fish size impact was mitigated by reducing harvest to allow size growth. Farm Volume Harvested* 1H20 1H21 1H22 Queen Charlotte Reekeke i) - ses) Otanerau - - Clay Point 1,282 1,395 - Tory Channel Te Pangu 1,295 1,940 7 Ngamahau 258 13 1,
Slide 14: Financial Position
> Fina ion BALANCE SHEET Spe: Unaudited Unaudited Current Assets Cash and equivalents 2,927 3,479 Receivables eres) 16,186 . co . . . Inventories 43,363 42,489 New Zealand King Salmon maintains its strong financial position. Biological Assets 79,288 69,588 Derivative financial assets 2,969. 5,413 Ou
Slide 15: New Zealand King Salmon 1H22 HALF YEAR RESULTS 15
New Zealand King Salmon 1H22 HALF YEAR RESULTS 15
Slide 16: Sales Performance
SALES PERFORMANCE Trend in volumes show a strong recovery in sales, but opportunities missed due to fish availability (volume and size) Sale volumes have been rebuilt following Covid recovery. Excess frozen inventory has been partially released. + Astrong recovery in sales volumes 1H22 but with exce
Slide 17: Sales by Market: North America
SALES BY MARKET Sales to North America have recovered as alternative channels to market have been developed + Record 1H volume of product sold to North America whilst increasing prices in a challenging environment (except for targeted disposal sales at a lower price). + Channel diversification and b
Slide 18: Sales by Market: Australia
SALES BY MARKET a ©) pnesenteD yy Sales to Australia have performed well given continued challenges of Australian Covid lockdown. = * Good sales volumes in line with pre Covid 2020. + In-market brand events restart with Ora King documentary screenings and Noosa Eats & Drinks. * Imminent launch of Re
Slide 19: Sales by Market: Asia, China, Japan, Europe
SALES BY MARKET Strong performance in other export markets Most markets saw an increase in volumes, premium branded product maintained solid price performance + Asia (excl. Japan and China) -this market continues to track steadily but growth is impacted by fluctuations in demand from foodservice due
Slide 20: Sales by Market: New Zealand
SALES BY MARKET Growth in retail volumes as emphasis placed on smoked products + Disruption to export and foodservice markets has required increased emphasis on reviving domestic retail interest and building brand awareness. * Sales remain strong, with reduction in promotional activity during 1H22 b
Slide 21: Average Sale Prices
AVERAGE SALE PRICES Branding underpins customer loyalty and value to our business New Zealand King Salmon’s core branded and differentiated business continues to attract premium pricing. Pricing for these products has remained firm. Excess inventory of frozen whole fish contracted for sale in FY21 c
Slide 22: Fish Performance: Average Harvest Weight
Average Harvest Weight (G&G) FISH PERFORMANCE Fish performance continues to be a key focus for the business i i i i Jul-20 Aug-20Sep-20Oct-20Nov-20Dec-20 Jan-21 Feb-21 Mar-21 Apr-21May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-2! Dec-21 Jan-22 * Single year class farming model adversely impacted our
Slide 23: 04
04 New Zealand King Salmon 1H22 HALF YEAR RESULTS 23
Slide 24: Blue Endeavour farm location
The Blue Endeavour farm location is 7km from Cape Lambert in northern Marlborough
Slide 25: Future Farming & Harvest Volumes: Blue Endeavour
FUTURE FARMING & HARVEST VOLUMES BLUE ENDEAVOUR- OUR OPEN OCEAN PROPOSAL * Hearing date confirmed with Marlborough District Council: 18-22 October 2021 * Potential to grow 10,000 tonnes of salmon at full capacity + If approved, first harvest would be 2024 (FY25) * Pre-hearing meetings have been comp
Slide 26: Forecast Volumes FY22 - FY28
FORECAST VOLUMES FY22 - FY28 Harvest Volumes (tonnes) * Future harvest volumes dependent on consent approvals and successful Blue Endeavour application ii i i FY22 harvest volumes lower than previous guidance due to: i OO IM AA RO Rel RS Ae Re AD (Jun) (Jun) June 21. (Jan) = (Jan) = (Jan) = (Jan) =
Slide 27: Appendices
NDICES c ro £ 5 a D § 4 3 2 3 5 g N 3 ag z
Slide 28: Appendix: 1H22 Reconciliation Between GAAP Results and Pro Forma Financials
APPENDIX-1H22 RECONCILIATION BETWEEN GAAP RESULTS AND PRO FORMA FINANCIALS Statutory Financial Fair Value IFRS 16 Lease FX Clase-outs Pro Forma 1H22 Statements ‘Adjustments Adjustments Operating Financial NZD 000s Information Revenue 80,095 80,095 Cost of goods sod (86,621) 22,582 (980) (65,019) Fai
Slide 29: Appendix: 1H21 Reconciliation Between GAAP Results and Pro Forma Financials
APPENDIX-1H21 RECONCILIATION BETWEEN GAAP RESULTS AND PRO FORMA FINANCIALS Statutory Financial Fair Value IFRS 16 Lease FX Close-outs Pro Forma 1H21 Statements Adjustments. Adjustments Operating Financial NZD 000s Information Revenue 67,016 67,016 Cost of goods sold (68,507) 26,013 (861) (43,355) Fa
Slide 30: Understanding Our GAAP Results
UNDERSTANDING OUR GAAP RESULTS The impact of NZ IAS-41 Agriculture, NZ IAS-2 Inventory, NZ IFRS-16 Leases and NZ IFRS-9 Financial Instruments Our GAAP results are impacted by Fair Value gains or losses arising from the application of NZ IAS-41 Agriculture, NZ IAS-2 Inventory and the classification o
Slide 31: Appendix: Glossary of Terms
APPENDIX- GLOSSARY OF TERMS 1H22 Financial results for the 6 months from 1 February 2021 to 31 July 2021 1H21 Financial results for the 6 months from 1 February 2020 to 31 July 2020 CAGR Compounding annual growth rate EBITDA Earnings before interest, tax, depreciation and amortisation FCR Feed Conve
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New Zealand King Salmon Investments — 1H22 Earnings Presentation on 6ix