Mowi Asa · OSL:MOWI
Mowi Asa — Debt Investor Presentation (April 2024)
48 slides from Mowi Asa's debt investor presentation, April 2024
Slide 1: Credit Investor Presentation
Credit Investor Presentation April 2024
Slide 2: Important information and disclaimer (1/2)
Important information and disclaimer (1/2) This presentation, together with its appendices (collectively, the "Presentation") has been prepared by Mowi ASA (the "Issuer", and together with its subsidiaries, the "Group") solely for information purposes in connection with a proposed issue of bonds (th
Slide 3: Important information and disclaimer (2/2)
Important information and disclaimer (2/2) Recipients must conduct their own independent evaluation of the Issuer and of the information contained or referred to herein and any other disclosed information. Any decision to invest in the Bonds should be based solely on the recipient's own evaluation o
Slide 4: Agenda: Company overview
1. Company overview 2. Sustainability at Mowi 3. Market overview 4. Financials 5. Appendix 6. Risk factors 7.
Slide 5: Mowi in brief
Mowi in brief One of the world’s leading seafood companies The world’s largest producer of Atlantic salmon, (#1 measured by market capitalisation) 500,000 GWT in 2024E (~2.9 billion meals per year) #1 on sustainability (Coller FAIRR) Fully integrated value chain Listed on Oslo Stock Exchange HQ in B
Slide 6: Mowi will continue working along three main operational pillars
Mowi will continue working along three main operational pillars Mowi Volume Cost Sustainability ✓ Continued growth ✓ #1-2 relative cost position ✓ #1 on sustainability • 4.9% farming volume CAGR (2018- • However, too high in absolute terms • #1 Coller FAIRR 2024e) vs industry at 2.9% • A rated in CD
Slide 7: Mowi – Leading the Blue Revolution
Mowi – Leading the Blue Revolution 2023 harvest volumes (1,000 GWT) 500 Global volumes of 2.5 million GWT 400 300 200 100 0 Mowi A B C D E F G H I J K L M N O P Q R S Source: Public disclosure and Kontali Analyse. Page 7 Note: Harvest volumes in Gutted Weight Tonnes (GWT) for last year reported, Atl
Slide 8: Fully integrated value chain
Fully integrated value chain Breeding Smolt Feed Sales & Farming Harvesting Processing Marketing Feed Farming Sales & Marketing #4 #1 #1 523k tonnes 500k GWT 232k tonnes Page 8 Note: Farming volumes in Gutted Weight Tonnes (GWT) based on 2024E, Consumer Products volumes in product weight based on FY
Slide 9: Feed production of 528,000 tonnes in 2023 – Self-sufficient in Europe
Feed production of 528,000 tonnes in 2023 – Self-sufficient in Europe Total production capacity of 640,000 Valsneset, Norway tonnes 400,000 tonnes capacity Opened 2014 Kyleakin, Scotland 240,000 tonnes capacity Opened 2019 Page 9
Slide 10: Farming harvest volumes of 500,000 GWT in 2024E
Farming harvest volumes of 500,000 GWT in 2024E Harvest volumes in GWT Canada Ireland Iceland Faroes Norway Scotland 30,000 7,000 Arctic Fish (51%) 10,000 305,000 64,000 10,000 Harvest volumes Chile 74,000 Page 10
Slide 11: Sales & Marketing – Consumer Products volumes of 232,000 tonnes in 2023
Sales & Marketing – Consumer Products volumes of 232,000 tonnes in 2023 21 Secondary processing plants Europe 28 Sales offices 171,000 tonnes Germany Poland Norway France Netherlands Faroes Spain Belgium Ireland Consumer Italy Czech Sweden Products volumes sold Scotland Turkey Iceland Asia 32,000 to
Slide 12: Agenda: Sustainability at Mowi
1. Company overview 2. Sustainability at Mowi 3. Market overview 4. Financials 5. Appendix 6. Risk factors 7.
Slide 13: Ocean-based Atlantic salmon farming is on the right side of sustainability
Ocean-based Atlantic salmon farming is on the right side of sustainability Rating agencies About the rating Score (1) Salmon is the most sustainable animal protein alternative Mowi ranked as the most sustainable animal protein producer in the world (amongst the largest 60 animal protein producers in
Slide 14: Mowi ranked #1 on sustainability amongst food producers
Mowi ranked #1 on sustainability amongst food producers Submitted FLAG and 1.5°C aligned science-based targets Our sustainability achievements(1) (k tonnes) Scope 1 & 2 Scope 3 Energy & Industry Scope 3 FLAG -51% -28% -33% 99% 100% 400 1,600 1,000 of harvest volumes compliant with sustainable 300 1,
Slide 15: Mowi’s focus on sustainability across its value chain
Mowi’s focus on sustainability across its value chain • Select the best families to reduce disease and • Reduce freshwater use • Improve energy efficiency with sea lice challenges • Produce larger smolts leading to reduced time at sea state-of-the art equipment • Reduce mortality at sea • Improve fe
Slide 16: Postsmolt to give further organic growth and improve biological metrics
Postsmolt to give further organic growth and improve biological metrics ~40 million postsmolt by end of 2024 (25% coverage / Norway 50% excl. Region North) Norway - Fjæra commissioned Norway - Nordheim commissioning Norway - Haukå commissioning Q4-24 Norway - Semi-Closed Containment Scotland – Loch
Slide 17: New Green Financing Framework
New Green Financing Framework Use of proceeds Eligibility criteria Highlights from CICERO Second Party Opinion Operations within as well as investments and expenditures related to: CICERO Shades of Green has provided a second party opinion to Mowi’s Green and • Sustainable feed Sustainability-Linked
Slide 18: Agenda: Market overview
1. Company overview 2. Sustainability at Mowi 3. Market overview 4. Financials 5. Appendix 6. Risk factors 7.
Slide 19: Atlantic salmon is a fantastic product with great product features…
Atlantic salmon is a fantastic product with great product features… • Scientifically proven natural superfood – Nutritionally dense and great for one’s health (omega-3, protein, vitamins, potassium, antioxidants) • Top appetising taste, look, texture and colour • Versatile for traditional and evolvi
Slide 20: …and the beneficiary of strong megatrends
…and the beneficiary of strong megatrends Resource efficient production / Population growth Growing middle class climate change Global population growth drive Growing middle class in large Salmon production is a very increasing demand for food emerging markets expected to resource efficient protein
Slide 21: This has led to demand growth of 9% CAGR the past years
This has led to demand growth of 9% CAGR the past 10 years (Supply growth of 3% CAGR) 25 4,000 Value of global consumption (EUR billion) 3,500 Global harvest volumes (GWT '000) 20 3,000 2,500 15 2,000 10 1,500 1,000 5 500 0 0 2013 2015 2017 2019 2021 2023 Page 21 Source: Kontali and Mowi
Slide 22: Structural undersupply expected to continue in the coming years
Structural undersupply expected to continue in the coming years (guidance as per Q4 2023) 2020 2021 2022 2023 2024E 2024E GWT (1,000) Low Y/Y growth High Y/Y growth • 2024: Expect supply growth of 2% Norway 1,233 1,380 1,365 1,331 1,373 1,358 2% 1,388 4% UK 160 179 145 138 151 147 6% 155 12% Faroe I
Slide 23: Industry supply and demand
Industry supply and demand Supply by origin Demand by origin North Other Asia; Other Other, 6% America; 5% markets; 5% 13% China / Hong Kong; EU + UK; 5% Chile; 44% 27% Norway; Brazil; 53% 4% Faroe USA; Other Islands; Scotland; 24% Europe; 3% 5% 6% Source: Kontali Analyse Page 23 Note: Supply and de
Slide 24: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices • Seasonally strong European prices whilst prices in Americas weak • Two-way division of prices in 2023 from Q2; expected to recover Americas Europe Chilean D-trim lbs, Canadian GWE 10-12 lbs 14 14 6 5.21 12 12 10.62 4.51 4.44 5 USD per GWE 10-12 lbs (Seattle)
Slide 25: Agenda: Financials
1. Company overview 2. Sustainability at Mowi 3. Market overview 4. Financials 5. Appendix 6. Risk factors 7.
Slide 26: Development in key figures and ratios
Development in key figures and ratios Revenue and operational EBIT (EURm) Funds from operations1 EURm Revenue & other income Operational EBIT EURm FFO (EURm) FFO/NIBD (rhs, %) % 6,000 5,506 1,000 930 100 4,941 900 90 5,000 800 80 4,136 4,202 689 673 4,000 3,760 700 70 600 52% 545 53% 60 3,000 500 45
Slide 27: ‘BBB+’ Investment Grade rating assigned from Nordic Credit Rating
‘BBB+’ Investment Grade rating assigned from Nordic Credit Rating Extract from the rating rationale NCR key credit metrics & expectations1 NCR-adj. net debt/EBITDA “Our 'BBB+' long-term issuer rating on Norway- 1.7x 1.6x 1.4x based salmon farmer Mowi ASA is underpinned 1.2x 1.1x by the company's str
Slide 28: 2023 was a record-year for Mowi
2023 was a record-year for Mowi Delivered on all three operational pillars – volume growth, cost and sustainability 550 • Another record-breaking year for Mowi on revenues, operational EBIT and volumes – Revenues EUR 5.5 billion (NOK 63 bn) 500 500 – Operational EBIT 1,028 million (NOK 11.7 bn) Harv
Slide 29: Key financials
Key financials Mowi Group - main figures Q1 2024 trading update Unaudited EUR million Q4 2023 Q4 2022 2023 2022 Operational revenue and other income 1,427.9 5% 1,361.8 5,513.4 11% 4,946.0 • Operational EBIT ~EUR 201m Operational EBIT 1) 203.1 -15% 238.9 1,027.5 2% 1,005.1 Operational EBITDA 1) 253.1
Slide 30: Financial position and financing overview
Financial position and financing overview Mowi Group 31.12.2023 30.09.2023 31.12.2022 EUR million • Bank Facility: EUR 2,000m sustainability linked Non-current assets 4 259.5 4 165.9 4 042.6 – Tenor 5 years (Maturity: September 2026) Current assets 3 979.5 3 527.6 3 488.7 Total assets 8 239.0 7 693.
Slide 31: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Mowi Group Q4 2023 Q4 2022 2023 2022 2024 Cash Flow Guidance EUR million (as of Q4-2023) NIBD beginning of period* -1 705.5 -1 353.4 -1 758.9 -1 257.3 • Working capital build-up EUR ~140m Operational EBITDA* 253.1 284.0 1221.1 1,179.4 Change in working capital
Slide 32: Cost containment initiatives important to combat cost pressure
Cost containment initiatives important to combat cost pressure driven by post-Covid inflation • Farming blended cost relatively stable before Development in blended Farming cost per kg for Mowi group 2022 7 5.62 6 5.09 • Significant inflationary pressure from 2022 5 4.26 4.37 4.47 driven by higher f
Slide 33: Outlook
Outlook • Sector fundamentals remain good – Strong long-term demand trend – Expect industry low supply growth of 2% p.a. the next 5 years • Mowi harvest volume guidance of 500k GWT in 2024 – a new milestone – Since 2018 growth of 125k GWT (equivalent to CAGR of 4.9% vs industry at 2.9%) • Postsmolt
Slide 34: Agenda: Appendix
1. Company overview 2. Sustainability at Mowi 3. Market overview 4. Financials 5. Appendix 6. Risk factors 7.
Slide 35: Mowi volume guidance all-time high
Mowi volume guidance all-time high (guidance as per Q4 2023) Atlantic salmon 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 2023 Q1 2024 2024 GWT (1,000) Act ual Act ual Act ual Act ual Act ual Act ual Act ual Guidance Norway 293.7 65.6 61.5 86.2 81.2 294.5 54.7 305.0 Scotland 48.4 11.4 18.3 14.7 10.6 54.9 14
Slide 36: Resource rent tax in Norway with effect from 2023
Resource rent tax in Norway with effect from 2023 22% 22% 22% 22% + 25% = 47% 22% 22% 22% Breeding Smolt Feed Sales & Seawater Harvesting Processing Marketing • Estimate for effective resource rent tax rate of about 10% for Mowi Norway across the value- chain – Earnings in the seawater phase subject
Slide 37: Dividend policy
Dividend policy • Mowi’s ambition is to create long-term value for the shareholder through both positive share price development and a growing dividend in line with long-term earnings − Quarterly ordinary dividend shall under normal circumstances be at least 50% of underlying earnings per share (EPS
Slide 38: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY Min hedging rate Max hedging rate (1) • Q1 2024 contract shares (% of guided volume): Norway (2) 0% 50 % Scotland 0% 75 % − Norway 29% Chile (2) 0% 50 % − Scotland 60% Canada 0% 30 % Ireland 0% 100 % − Chile 46% Faroes 0% 30 % − Canad
Slide 39: Cash flow guidance and historic developments
Cash flow guidance and historic developments Net capital expenditure Net working capital 450 600 Maintenance level 400 500 350 300 400 250 EUR million EUR million 200 300 150 200 100 50 100 0 0 2019 2020 2021 2022 2023 2024E 2019 2020 2021 2022 2023 2024E Financial commitments and cost of debt1 125
Slide 40: Agenda: Risk factors
1. Company overview 2. Sustainability at Mowi 3. Market overview 4. Financials 5. Appendix 6. Risk factors 7.
Slide 41: Risk factors (1/7)
Risk factors (1/7) An investment in the Bonds involves inherent risks. Before making a decision to invest in the Bonds, potential investors should carefully consider the risk factors and all other information contained in this Presentation, including the financial statements and related notes. An in
Slide 42: Risk factors (2/7)
Risk factors (2/7) Farm-raised salmon may be exposed to contamination by undesirable substances through raw materials and ingredients in fish feed, polluted waters, poor processing hygiene and cross-contamination during handling. Contamination may affect food safety, fish health and the environment,
Slide 43: Risk factors (3/7)
Risk factors (3/7) The food industry is highly competitive The Group faces competition from other producers of seafood as well as from other protein sources, such as pork, beef and poultry. The bases of competition include price, product quality, brand identification, customer service and competitor
Slide 44: Risk factors (4/7)
Risk factors (4/7) RISKS RELATED TO LAWS, REGULATIONS AND LITIGATION The seafood industry is exposed to legal and political risk The Group is subject to governmental regulations in the jurisdictions in which it operates, relating to, inter alia, food safety, aquaculture regulation, tax and environme
Slide 45: Risk factors (5/7)
Risk factors (5/7) On 31 May 2023, the Norwegian Parliament approved the introduction of a resource rent tax (Nw: grunnrenteskatt) for the aquaculture industry with effect from 1 January 2023. The tax is a cash flow-based tax applicable on income from production of salmon, trout and rainbow trout. T
Slide 46: Risk factors (6/7)
Risk factors (6/7) RISK FACTORS RELATED TO THE BONDS A trading market may not develop, and market price may be volatile The Bonds will be new securities for which there is currently no trading market. Even though the Issuer is obliged to procure the listing of the Bonds, there can be no assurance th
Slide 47: Risk factors (7/7)
Risk factors (7/7) The Bond Terms will allow for modification of the Bonds or security, waivers or authorisations of breaches and substitution of the Issuer which, in certain circumstances, may be effectuated without the consent of Bondholders The Bond Trustee may agree, without the consent of the B
Slide 48: Thank you
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