Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Bakkafrost — Q1 2011 Earnings Presentation

37 slides from Bakkafrost P/f's earnings presentation, May 24, 2011

  1. Slide 1: Presentation Q1 2011

    PRESENTATION Q1 2011 CEO Regin Jacobsen / CFO Teitur Samuelsen Oslo May 24th 2011

  2. Slide 2: Disclaimer

    DISCLAIMER  This presentation includes statements regarding future  No representation or warranty (expressed or implied) is results, which are subject to risks and uncertainties. made as to, and no reliance should be placed on, the Consequently, actual results may differ significantly from fairnes

  3. Slide 3: Agenda

    AGENDA  Summary of Q1  Financial Highlights  Segment Information  Group Financials  Acquisition of Havsbrún  Outlook BAKKAFROST / Q1 PRESENTATION 2011 Page 3

  4. Slide 4: Faroe Islands

    FAROE ISLANDS  18 islands – 1,400 km2  48,565 inhabitants (1. Feb 2011)  Self-governing part of the Kingdom of Denmark  Part of the Danish monetary union  Key sectors (% of wage earners, 2009)  Service/public admin.: ~37%  Private service: ~33%  Fishing industry: ~17%  GDP: DKK 11.784 bn (2

  5. Slide 5: Bakkafrost – the largest fish farming company in the Faroe Islands

    BAKKAFROST – THE LARGEST FISH FARMING COMPANY IN THE FAROE ISLANDS  Largest salmon farming company in the Faroe Islands ~75km  ~56 % of harvest volumes (Q1 2011)  ~39 % of existing licenses (31.12.2010)  Vestlax was merged into Bakkafrost 1 January 2010  Produced a total of 5,460 gwt in Q1 2011

  6. Slide 6: Faroe Islands – excellent conditions for cost effective farming

    FAROE ISLANDS – EXCELLENT CONDITIONS FOR COST EFFECTIVE FARMING  Faroese fjords provide separation between locations Average Seawater Temperatures 2003-2009 GEOGRAPHY  Improves biological control and area management ºC Faroe Islands Norway (Trøndelag) 16 14  Stable seawater temperatures throughou

  7. Slide 7: Summary Q1 2011

    SUMMARY Q1 2011  Increased sales on new markets Market  High demand for all products  Acquisition of Havsbrún to increase farming volume and upstream value chain Strategy  Strengthening the position as a high quality Atlantic Salmon producer  Dividend of NOK 4.08 per share paid out in April 201

  8. Slide 8: Market

    MARKET  Demand driven market from new markets. Sales, divided on markets [by Value]  “New markets” consume more than 1/3 of USA Bakkafrost’s sales 26%  Relatively larger part of increased sales will go to new markets  Sales of gutted whole salmon increased from 31% Far East in 2010 to 43% in Q1

  9. Slide 9: Financial Highlights

    BAKKAFROST Sy y*. i Lm 4 ‘ fr

  10. Slide 10: Financial Highlights

    FINANCIAL HIGHLIGHTS  Margin Significantly Improved Compared (NOK) Q1 2011 Q1 2010 with Q1 2010 Farming: North West North West  Improved performance in both regions Operational EBIT/kg gwt 18.09 15.68 11.29 1.57  West impressive improvement Harvested volumes 1000 [gwt] 3,913 1,547 4,983 761  Sti

  11. Slide 11: Key Financials, Group

    KEY FINANCIALS, GROUP  Strong Cash flow in Q1 2011 used to finance: (DKKm) Q1 2011 Q1 2010  Biomass Cash flow from operations 101 93  Increased production Total assets 1,332 1,184*  Investments NIBD -10 70*  To increase capacity Equity ratio 78% 76%*  Reduce debt * End 2010  Prepare for divid

  12. Slide 12: Planned Investments in 2011 for Bakkafrost

    PLANNED INVESTMENTS IN 2011 FOR BAKKAFROST  Investments in PPE is estimated to be 70 million DKK in Investments in PPE [Mio DKK] 2011, which is same amount as in 2010 80  The investments are made in: 70 60  Hatchery division 50  Farming division 40 30  Harvesting division and 20  VAP division

  13. Slide 13: Segment Information

    SEGMENT INFORMATION Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates back to Viking times, but it was not before the 20th century that the district merged to form a large, modern

  14. Slide 14: Segments Farming

    SEGMENTS FARMING  Revenues increased 22% despite 5% reduced (DKKm) Q1 2011 Q1 2010 volume in Q1 2011 compared with Q1 2010 Operating revenues 213 175  High prices on salmon in Q1 2011 Operational EBIT 91 53  Higher production will lead to better cost absorption in coming quarters Operational EBIT

  15. Slide 15: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE  Highest margin ever: Operational Performance  Highest margin ever for the farming segment - 17.41 NOK/kg gwt in Q1 2011  Harvested quantity on higher stable level from Q2 and onwards – reducing costs  Increased volume after acquisition of Havsbrún BAKKAFROST /

  16. Slide 16: Farming – Harvest Volume

    FARMING – HARVEST VOLUME  Harvested volume: [tonnes gwt] Q1 2011 Q1 2010 2010 2009  5% reduction in Q1 2011 compared with Q1 2010 West 1,547 761 7,792 11,970  Smolt release in Q1 2011 1.6 million pieces smolt + North 3,913 4,983 13,834 18,680 Havsbrún Total 5,460 5,744 21,626 30,650  Guidance 7.

  17. Slide 17: Strong Expected Volume Growth

    STRONG EXPECTED VOLUME GROWTH  Increased smolt release by 56% from 2008 to 2010 Smolt Release (million)  Still two sites with no fish, to be started up in 2012  Harvest to be scaled up in 2011 and onwards BAKKAFROST / Q1 PRESENTATION 2011 Page 17

  18. Slide 18: Segments VAP

    SEGMENTS VAP  Revenue increased by 9% despite lower volumes sold (DKKm) Q1 2011 Q1 2010  VAP contributing again to Group Operational EBIT Operating revenues 131 120  ~80% of VAP capacity for 2011 contracted Operational EBIT 1 -2  ~50% price increase from Q1 2009 to Q1 2011 directly Operational E

  19. Slide 19: Group Financials

    BAKKAFROST ESTABLISHED 1968 GROUP FINANCIALS

  20. Slide 20: Group Profit and Loss

    GROUP PROFIT AND LOSS  Revenues increased by 26% but volumes decreased (DKKm) Q1 2011 Q1 2010 by 5% - strong market in Q1 Operating revenues 240.3 190.5  Operating EBIT increased by 83% Purchase of goods -76.5 -37.2 Change in inventory and biological  Group EBIT/KG of NOK 17.68 assets (at cost) 1

  21. Slide 21: Balance Sheet – as per 31 March 2011

    BALANCE SHEET – AS PER 31 MARCH 2011  Continue to invest in PPE to carry out the organic (DKKm) 31.03.2011 31.12.2010 growth Intangible assets 136.2 136.2  Further building up biomass as planned Property, plant and equipment 365.9 356.4 Financial assets 73.0 26.0  Reduced NIBD significantly – No

  22. Slide 22: Cash Flow – for Q1 2011

    CASH FLOW – FOR Q1 2011  Cash flow used to continuing build up biomass and to (DKKm) Q1 2011 Q1 2010 investments in Q1 2011 Cash flow from operations 100.8 93.3  Strong liquidity – no NIBD and approx DKK 336M of Cash flow from investments -20.2 -19.8 undrawn facilities at end of March 2011 Cash fl

  23. Slide 23: Acquisition of Havsbrún

    BAKKAFROST ACQUISITION OF HAVSBRUN ‘Gi! A

  24. Slide 24: Bakkafrost/Havsbrún Value Chain

    BAKKAFROST/HAVSBRÚN VALUECHAIN BAKKAFROST / Q1 PRESENTATION 2011 Page 24

  25. Slide 25: Acquisition of Havsbrún – Transaction Details

    ACQUISITION OF HAVSBRÚN – TRANSACTION DETAILS  Bakkafrost to pay DKK 1,100 million Financing for 100% of Havsbrún DKK m  Includes 16.71% of Bakkafrost 1,100 owned by Havsbrún 1,100  The shares in Bakkafrost will be 1,000 used as a part of the consideration 900 404  Acquisition financing from Nor

  26. Slide 26: Strong Position within Fish Meal and Oil

    STRONG POSITION WITHIN FISH MEAL AND OIL Capacity and production Faroe Islands surrounded by several main fish resources  Production capacities:  2,400 tonnes fish per day to fish meal and oil Summercapelin  600 tonnes salmon feed per day  Storage capacities:  Raw material tanks: Atlanto-Scandi

  27. Slide 27: Modern Fish Feed Factory Located Close to the Farming Sites

    MODERN FISH FEED FACTORY LOCATED CLOSE TO THE FARMING SITES Capacity and production Fish feed factory  Production capacities: Main Fish Farming Area  600 tonnes salmon feed per day  High percentage of marine ingredients ~25km  Fresh feed for direct transport to Meal, Oil & Feed factory customer

  28. Slide 28: Solid Performance in Meal & Oil and Fish Feed

    SOLID PERFORMANCE IN MEAL & OIL AND FISH FEED IN RECENT YEARS  EBIT increased from a level Turnover and EBIT [million DKK] – Meal, Oil and Feed around 10-12% to 24% in 2010  Havsbrún increased its share in the farming industry in 2010  Increased market prices on fish meal and oil influenced the m

  29. Slide 29: Viking Seafood – Capacity of 8,500 Tonnes GWT

    VIKING SEAFOOD – CAPACITY OF 8,500 TONNES GWT Fish Farming, primary and secondary processing Locations  Havsbrún owns 78.0% of the company  2 licenses with an estimated capacity of 8,500 tonnes gw ~75km  Located in close proximity to Bakkafrost’s existing locations  Slaughtery located in Strendu

  30. Slide 30: Faroe Farming – Capacity of 6,500 Tonnes GWT

    FAROE FARMING – CAPACITY OF 6,500 TONNES GWT Fish Farming and primary processing Locations  Havsbrún owns 78.1% of the company  3 licenses with an estimated capacity of 6,500 tonnes gutted weight ~75km  Located on the southern island of Suðuroy, 70 kilometers from Glyvrar  Slaughtery located in

  31. Slide 31: Profit and Loss – Havsbrún Group 2010

    PROFIT AND LOSS – HAVSBRÚN GROUP 2010 INCL. VIKING SEAFOOD AND FAROE FARMING  Total revenues of DKK 822.9 million (DKKm) – IFRS 2010 Operating revenues 822.9  Income from associates of DKK 325.8 million Purchase of goods -500,8  EBIT of DKK 571.4 million Change in inventory and biological assets

  32. Slide 32: Balance Sheet – Havsbrún Group 2010

    BALANCE SHEET – HAVSBRÚN GROUP 2010 INCL. VIKING SEAFOOD AND FAROE FARMING  Financial assets includs shares in Bakkafrost (DKKm) – IFRS 31.12.2010  NIBD of DKK 114.8 million Intangible assets 16.5 Tangible assets 126.1  Equity ratio 66 % Financial assets 421.7 Biological assets 127.3 Inventory 20

  33. Slide 33: Outlook

    OUTLOOK Kaldbaksfjørður Bakkafrost aquired fishfarm from Viking Seafood

  34. Slide 34: Outlook

    OUTLOOK  Smolt release for Bakkafrost maintained at 7.5 million  High demand for all products leads to good market pieces in 2011 opportunities during 2011 for all products  Plan for smolt release will be revised in Q3 2011  Significant volumes committed for 2011 on contracts, following the acqu

  35. Slide 35: Appendix

    APPENDIX Kunoyarnes Bakkafrosts fishfarm A-12

  36. Slide 36: Largest Shareholders

    LARGEST SHAREHOLDERS 20 largest shareholder Share price development since listing [% value change] SALMAR ASA NOR 23,29 Havsbrun P/F FRO 16,71 Jacobsen Hans FRO 9,40 Jacobsen Johan Regin FRO 9,19 JPMORGAN CHASE BANK NORDEA TREATY ACCOUN GBR 4,74 NORDEA BANK DENMARK S/A NORDEA (DK) CCA DNK 3,49 DANSK

  37. Slide 37: P/F Bakkafrost contact details

    P/F Bakkafrost · Bakkavegur 9 · FO-625 Glyvrar Faroe Islands · www.bakkafrost.com BAKKAFROST / Q1 PRESENTATION 2011 Page 37

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