Bakkafrost P/f · OSL:BAKKA
Bakkafrost P/f — Bakkafrost Group — Q1 2024 Earnings Presentation
49 slides from Bakkafrost P/f's earnings presentation, May 6, 2024
Slide 1: Q1 2024 Bakkafrost Group
Q1 2024 BAKKAFROST GROUP Glyvrar 6th of May 2024
Slide 2: Summary of Q1 2024
SUMMARY OF Q1 2024 MARKETS & SALES FINANCE & ESG OPERATIONS OUTLOOK APPENDIX Koltur, Faroe Islands
Slide 3: Highlights Q1 24 (Q1 23)
HEALTHY LIVING HIGHLIGHTS Q1 24 (Q1 23) Revenues and Revenue of DKK 2,206 million (DKK 2,050 million) Operational EBIT Operational EBIT* of DKK 710 million (DKK 565 million) Harvest in the Faroe Islands: 14,294 tgw (11,005 tgw) Harvest in Scotland: 7,263 tgw (8,093 tgw) Operation Feed sale
Slide 4: Markets & Sales
SUMMARY OF Q1 2024 MARKETS & SALES FINANCE & ESG OPERATIONS OUTLOOK APPENDIX Barcelona, Spain
Slide 5: Global Markets: Higher Prices
GLOBAL MARKETS HEALTHY LIVING HIGHER PRICES Spot prices (NASDAQ) on superior 4-5 [NOK/kg HOG] Average spot prices increased in Q1 2024 Q1 Q2 Q3 Q4 150,00 (NOK/KG) 130,00 110,00 y/y: 104.83 4% 108.97 90,00 (Q1 2023) 4.13 (Q1 2024) 70,00 q/q: 83.02 31% 108.97 (Q4 2023) 25.95 (Q1 2024) 50,00 30,00 1 3
Slide 6: Salmon Markets, Sold Quantity
HEALTHY LIVING SALMON MARKETS, SOLD QUANTITY EU/UK: 4% consumption increase Salmon markets, sold quantity (head on gutted weight) Good demand, high availability of fillets from Norway Estimated volumes Q1 comparison Estimated volumes FY comparison Markets Q1 2024 E Q1 2023 Volume % FY 2023 FY 2022
Slide 7: Global Harvested Volume Dropped 5%
HEALTHY LIVING GLOBAL HARVESTED VOLUME DROPPED 5% 5% drop in global harvest volume Supply Development Q1 2024 Q1 2023 Change % 1% increase when including inventory movements Norway 271 286 -5,4 % UK 33 32 3,3 % Faroes 21 17 23,0 % Iceland 11 11 2,4 % 3% drop in European harvest volumes Ireland 3 3
Slide 8: Finance & ESG
SUMMARY OF Q1 2024 MARKETS & SALES FINANCE & ESG OPERATIONS OUTLOOK APPENDIX
Slide 9: Group Profit and Loss
GROUP PROFIT AND LOSS HEALTHY LIVING HIGHER REVENUE AND OPERATIONAL EBIT Q1 2023 Q1 2024 (DKK million) Q1 24 Q1 23 Revenue (mDKK) Operating revenue 2,206 2,050 2,050 8% 2,206 Operational EBITDA* 879 714 Operational EBIT* 710 565 Operational EBIT (mDKK) Fair value adjustment of biological assets -70
Slide 10: Operational EBIT and Adjusted Earnings per Share
HEALTHY LIVING OPERATIONAL EBIT* AND ADJUSTED EARNINGS PER SHARE** 710 587 565 407 418 376 353 356 325 248 269 Operational EBIT* 224 182 (mDKK) 120 103 89 71 2020 2021 2022 2023 2024 622 821 1,705 1,544 710 YTD 7,66 7,19 6,77 4,80 4,82 4,00 3,79 Adjusted EPS** 3,43 3,56 3,19 2,95 2.93 (DKK) 2,06 1,8
Slide 11: Balance Sheet
HEALTHY LIVING BALANCE SHEET Headlines (mDKK) (DKK million) Q1 24 End 2023 End 2023 Q1 2024 Intangible assets 4,512 4,509 Property, plant and equipment 6,312 6,220 PPE: 6,220 92 6,312 Right of use assets 391 413 Financial assets 300 289 Biological assets: 3,336* -20 3,316* Deferred tax assets 513 51
Slide 12: Cash Flow
HEALTHY LIVING CASH FLOW Q1 2023 Q1 2024 (DKK million) Q1 24 Q1 23 Cash flow, operations (mDKK) 573 103 676 Cash flow from operations 676 573 Cash flow from investments -238 -203 Cash flow, investments (mDKK) -203 -35 -238 Cash flow from financing -278 -519 Net change in cash 161 -150 Cash at the en
Slide 13: Net Interest-Bearing Debt (NIBD)
NET INTEREST-BEARING DEBT (NIBD) HEALTHY LIVING NIBD DECREASED DURING Q1 2024 NIBD was increased by: Development in NIBD in DKK millions • Net investments (mDKK 227) • Change in working capital (mDKK 137) NIBD was decreased by: • Cash flow, operating activities (mDKK -716) Financing end Q1 2024 • NI
Slide 14: ESG Update: First Integrated Annual Report
ESG UPDATE HEALTHY LIVING FIRST INTEGRATED ANNUAL REPORT – ALIGNING WITH THE CSRD DIRECTIVE First Integrated Annual Report published Aligning reporting with the CSRD directive 14
Slide 15: 2024 ESG Update
2024 ESG UPDATE HEALTHY LIVING Record-high fishmeal Scope 3 is & oil production in 2023 73% Planned electrification of of total Havsbrún important emissions to reduce scope 1&2 emissions 15
Slide 16: Operations
SUMMARY OF Q1 2024 MARKETS & SALES FINANCE & ESG OPERATIONS OUTLOOK APPENDIX Hov, Faroe Islands
Slide 17: Performance per Region
PERFORMANCE PER REGION HEALTHY LIVING STRONG QUARTER IN FAROE ISLANDS Q1 2024 Q1 2023 Faroe Faroe DKK 1,000 Scotland Islands* Group Scotland Islands* Group Total operating revenues 612.491 1.593.735 2.206.226 708.420 1.341.461 2.049.881 Depreciation and amortization -39.174 -124.769 -163.943 -61.115
Slide 18: FOF (Fishmeal, Oil and Feed)
FOF (FISHMEAL, OIL AND FEED) HEALTHY LIVING STRONG FEED SALES AND HIGH SOURCING Q/Q Raw material sourcing vs. Feed sale (tonnes) Volumes Q1 24 Q1 23 change 200.000 50.000 Marine raw material sourced -12% 136,874 156,015 40.000 150.000 Feed sold (tonnes)* 21% 27,046 22,287 Raw material Feed sale 30.0
Slide 19: Freshwater – Faroe Islands
FRESHWATER – FAROE ISLANDS HEALTHY LIVING RAMPING UP NEW CAPACITY FROM 2023 Q/Q Volumes Q1 24 Q1 23 change Good capacity in hatcheries Released number of smolt (million) 0% 2.1 2.1 Strond Glyvradal Norðtoftir Viðareiði Average weight (g) -3% 410 424 Margin Smolt transfer in 2024 planning for 17.0 mi
Slide 20: Freshwater – Faroe Islands: Skálavík Hatchery
FRESHWATER – FAROE ISLANDS HEALTHY LIVING CONSTRUCTION STARTED OF NEW HATCHERY AT SKÁLAVÍK Existing hatcheries Gjógv Húsar Strond Glyvradal Norðtoftir Viðareiði Construction started of Skálavík hatchery • Same design as Glyvradal and Applecross • 3,500 tonnes capacity • Built in phases to allow earl
Slide 21: Freshwater – Scotland
FRESHWATER – SCOTLAND HEALTHY LIVING APPLECROSS RAMPING UP - WITH SOME START-UP CHALLENGES Q/Q Volumes Q1 24 Q1 23 change Applecross hatchery: Released number of smolt (million) -6% 1.6 1.7 • Ramping up production Average weight (g) +9% 121 111 • Close to all smolt (8.0 million) delivered from Apple
Slide 22: Farming – Faroe Islands
FARMING – FAROE ISLANDS HEALTHY LIVING POSTPONED HARVEST TO OPTIMISE VALUE Q/Q Volumes Q1 24 Q1 23 change Good biological development Total harvest volume (tonnes HOG) +30% 14,294 11,005 • Focus on growing larger fish Average harvest weight (kg) +23% 5.4 4.4 • Increasing harvest volumes • All-time l
Slide 23: Farming – Scotland
FARMING – SCOTLAND HEALTHY LIVING PREPARING FOR Q2 2024 HARVEST Q/Q Comments Volumes change Q1 24 Q1 23 Total harvest volume (tonnes HOG) -10% 7,263 8,093 • Biology improving Average harvest weight (kg) -13% 4.7 5.3 • Minimizing harvest to let the fish grow • Sea temperatures higher than the same pe
Slide 24: Services
SERVICES HEALTHY LIVING EFFICIENT SEA LICE MITIGATION Margin Q/Q change Q1 24 Q1 23 Services provided: Operational EBIT (NOK/kg) +183% 1.87 0.66 • Fish transportation Operational EBIT margin +6% 10% 4% • Treatments • Farming Support Sea Lice – Faroe Islands • Harvest & Packaging Sea Lice • Waste-to-
Slide 25: Sales & Other
SALES & OTHER HEALTHY LIVING LESS VOLUMES FOR VAP - GROWING SALE TO THE US MARKET Q/Q Services provided: Volumes Q1 24 Q1 23 change • Sales & Marketing Volume transferred to VAP (tgw) -35% 3,296 5,098 • Freight & Logistics • Value added processing (VAP) Margin Operational EBIT (NOK/kg) -113% -0.16 1
Slide 26: Outlook
SUMMARY OF Q1 2024 MARKETS & SALES FINANCE & ESG OPERATIONAL UPDATE OUTLOOK APPENDIX Scotland
Slide 27: Outlook: Low Supply Growth
OUTLOOK HEALTHY LIVING LOW UPPLY GROWTH Low single-digit growth expected in Europe TOTAL HARVEST • Biological uncertainty in Norway 1.600 10% 1.400 8% • Large increase in smolt release in H2 2023 6% 1.200 • Assuming slight improvement in H2 2024 and 2025 4% 1.000 2% 800 0% -2% General reduction in A
Slide 28: Outlook: Growing Volume
OUTLOOK HEALTHY LIVING GROWING VOLUME Farming Contracts Harvest [gwt] Faroe Islands Scotland Total • For 2024, Bakkafrost has signed contracts for around 9% of 2024 plan 66,000 25,000 91,000 the total expected harvest volumes Harvest plan 2024 Fishmeal, Oil and Feed FO 19.140 20.460 • Continued high
Slide 29: Appendix
SUMMARY OF Q1 2024 MARKETS & SALES FINANCE & ESG OPERATIONAL UPDATE OUTLOOK APPENDIX
Slide 30: Value Chain Insight – Hatcheries for Smolt
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT HEALTHY LIVING LARGE HIGH-QUALITY SMOLT ARE THE KEY TO GROWTH AND IMPROVEMENT Average smolt weight New hatchery Current capacity (June 2023) 18 million smolt of 500g Glyvradal expansion Norðtoftir expansion Viðareiði expansion 500 500 395 Number of
Slide 31: Large Smolt Strategy
LARGE SMOLT STRATEGY HEALTHY LIVING DELIVERING LARGE HEALTHY SMOLT SMOLT CAPACITY 11m 14-15m 15m RAS 2 design & build Fairlie Hatchery 2 build AP Fairlie - Planning 8m smolt at 500g Post smolt 2 build AP 32,300m³ capacity Post smolt 1 build AP 100% smolt from RAS No 3rd party smolt Applecross - Cons
Slide 32: 2024-2028 Capex Plan
2024-2028 CAPEX PLAN - INVESTING IN SUSTAINABLE GROWTH HEALTHY LIVING 165,000 TONNES HARVEST IN 2028, FAROE ISLANDS AND SCOTLAND COMBINED 2024-2028 Capex* of DKK 6.3 bn Volumes Faroe Islands Scotland 1.800 16,00 2023 52,408t 20,598t 1.600 14,00 1.400 12,00 2024 66,000t 25,000t Investments per kg (DK
Slide 33: Bakkafrost's New Segments
HEALTHY LIVING BAKKAFROST’S NEW SEGMENTS Previous segments New segments: • FOF • Freshwater FO • Freshwater SCT • Farming FO • Farming SCT • Services • Sales & Other 33
Slide 34: Segment Overview
SEGMENT OVERVIEW HEALTHY LIVING VOLUMES, MARGINS AND KEY RATIOS FOF Freshwater Farming Services Sales & Other Q1 2024: Q1 2024: Q1 2024: Q1 2024: Q1 2024: Revenue = 739M Revenue = 98M Revenue = 1,168M Revenue = 259M Revenue = 2,850M Internal Feed sale = 26,875t Smolt transferred = 2.1M Harvest Volum
Slide 35: Development in Supply and Sold Quantity by Origin
HEALTHY LIVING DEVELOPMENT IN SUPPLY AND SOLD QUANTITY BY ORIGIN Expected supply growth in 2024 Global Supply of Atlantic Salmon (head on gutted – HOG) 2019 2020 2021 2022 2023E 2024E 3% increase in Global supply* Norway 1.198 1.226 1.383 1.359 1.329 1.345 UK 171 160 179 145 137 151 Ireland 14 14
Slide 36: Q1 2024 Market Environment
HEALTHY LIVING Q1 2024 MARKET ENVIRONMENT Nasdaq Norway spot price (EUR) flat in line with Q1 2023 PRICE NORWAY (Nasdaq Norway) 12,0 90,0 Low availability for spot sales due to downgrades 10,5 9,7 9,7 80,0 10,0 8,9 8,4 70,0 European harvest volume down 3% 8,0 6,7 7,2 7,3 7,1 60,0 50,0 DKK EUR 6,
Slide 37: Q1 2024 Prices
Q1 2024 PRICES HEALTHY LIVING HIGH DOWNGRADE SHARE IN NORWAY IMPACTED REFERENCE PRICES Nasdaq spot price reflecting marginal pricing per week PRICE NORWAY (NOK/kg) 120 11 100 9 7 Statistics Norway (SSB) publish average price for all whole 80 5 fish sold per week 3 60 1 Incorporates bilateral contr
Slide 38: Development per Quarter
HEALTHY LIVING DEVELOPMENT PER QUARTER Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 (mDKK) 2022 2022 2022 2022 2023 2023 2023 2023 2024 Revenue 1,639 1,684 1,867 1,940 2,050 1,670 1,859 1,562 2,206 Operational EBIT 418 587 325 376 565 353 269 356 710 Profit/Loss 405 845 249 -154 467 -123 219 392 401 Harvest FO (tgw)
Slide 39: Dividend
HEALTHY LIVING DIVIDEND Dividend per share in % of adj. EPS* Dividend 99% • On 30 April 2024, the AGM decided to pay out a dividend on 8.70 DKK per share for the year 2023 59% 53% 49% 49% 50% 50% 50% 50% 50% 46% • Dividend payment equals 50% of adjusted EPS 40% 19% 0% Dividend policy 2010 2011 2012
Slide 40: Bakkafrost – Overview
HEALTHY LIVING BAKKAFROST – OVERVIEW 40
Slide 41: Bakkafrost – Farming Site Overview
HEALTHY LIVING BAKKAFROST – FARMING SITE OVERVIEW 41
Slide 42: Our Pillars and Values
HEALTHY LIVING OUR PILLARS AND VALUES 42
Slide 43: Bakkafrost salmon at a glance
Bakkafrost salmon at a glance NUTRITION OMEGA-3 LEVELS OMEGA-3 70.6 VITAMIN D MEA RATIO. 2.58 1.4 10.1 ug PROTEIN LEVELS VITAMIN E LEVELS wht 21.0¢ 5.0 ug ver 1008 ver ob polseais fot2va SELENIUM YoDINE WEAN cons 0. 18 mg 0.05 mg ROI 0.06 mg ROIO.15 mg
Slide 44: State-of-the-Art and Fully Integrated Value Chain
STATE-OF-THE ART AND FULLY INTEGRATED VALUE CHAIN HEALTHY LIVING STRONG CONTROL IN THE FAROE ISLANDS FCR 2023 Employees ~1,700 ~1.09 Converting low food value proteins into high volume & value healthy proteins in the Faroes Revenue 2023 (DKK) ~7.1 bn 100% ASC certified in the Faroes 750 tonnes (edib
Slide 45: Performance
PERFORMANCE HEALTHY LIVING BEST PRACTICES & WELL-INVESTED VALUE CHAIN DRIVES PERFORMANCE Smolt weight (g) (2021 Full Gen.) Biological Feed Conversion Ratio (2021 Full Gen.) Economic Feed Conversion Ratio (2021 Full Gen.) Bakkafrost Faroes 382 Bakkafrost Faroes 1,06 Bakkafrost Faroes 1,16 Norway 187
Slide 46: Improvements of Large-Smolt Quality, Faroes
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT HEALTHY LIVING IMPROVEMENTS OF LARGE-SMOLT QUALITY, FAROES (2021G VS. 2020G) 54% 13% Lower mortality Higher growth (number of fish) 4% Lower Feed Converstion Ratio (bio) 16% Lower Feed Converstion 32% Ratio (Eco) Lower mortality (biomass) 46
Slide 47: Farming Cycles Getting Shorter with Large Smolt
VALUE CHAIN INSIGHT HEALTHY LIVING FARMING CYCLES GETTING SHORTER WITH LARGE HIGH-QUALITY SMOLT Large Smolt Strategy - Reduced biological risk - Increased production efficiency - Enables Sustainable Growth Faroes: Currently at 13 months in the sea 395g (2023) 47
Slide 48: ~6.3bn Planned Investments 2024-2028
~ 6.3BN PLANNED INVESTMENTS 2024-2028 HEALTHY LIVING REDUCE BIOLOGICAL RISK, IMPROVE EFFICIENCY AND INCREASE ORGANIC GROWTH Faroe Islands: 2024-2028 capex plan vs. 2022-2026 capex plan 1.800.000 • Hatchery capacity of 24m smolt at 500g in 2028 1.600.000 • Cost-efficient broodstock (repurposing old h
Slide 49: Bakkafrost
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