Seafarms Group Limited · ASX:SFG
Seafarms — Shareholder Meeting (November 2018)
50 slides from Seafarms's shareholder meeting presentation, Nov 23, 2018
Slide 1: Annual General Meeting of Shareholders
Our Ref: SFG ASX Announce AGM Presentation 2018 (591) 23 November 2018 ANNOUNCEMENT 591 Company Announcements Office Australian Securities Exchange Level 6 By ASX Online 20 Bridge Street Number of pages: 50 SYDNEY NSW 2000 (including this page) DEAR SIR RE: ANNUAL GENERAL MEETING OF SHAREHOLDERS ADD
Slide 2: About Seafarms Group
About Seafarms Group Seafarms Group Limited (ASX: SFG) is an ASX listed holding company with separate subsidiary aquaculture companies., Seafarm Operations Pty Ltd operates aquaculture operations in northern Queensland, producing high‐quality seafood. Seafarms is currently the largest producer of fa
Slide 3: 2018 AGM and Market Update
2018 AGM and Market Update November 2018 The transformation of Seafarms from Australia’s largest prawn producer into a global low cost producer is underway Seafarms Group Limited 1
Slide 4: Disclaimer
Disclaimer This presentation is provided for information purposes only. The information in this presentation is in a summary form, does not propose to be complete and is not intended to be relied upon as advice to investors or other persons. The information contained in this presentation was prepare
Slide 5: Acknowledgement of Country
Acknowledgement of Country We’d like to begin by acknowledging the Traditional Owners of the land on which we meet today, the Wurundjeri, Boonwurrung, Taungurong, Dja Dja Wurrung and the Wathaurung people of the Kulin nation and pay our respects to their Elders past and present. 3
Slide 6: Contents
Contents Chairman’s Overview Overview of Seafarms Group FY18 Overview Operations Overview PSD – The Project PSD – Step 1 PSD – Photos 4
Slide 7: Chairman's Overview
RL | “Seafarms Chairman’s Overview
Slide 8: Chairman's Overview
Chairman’s Overview Welcome Ladies and Gentlemen to the Seafarms Group Limited 2018 Annual General Meeting. The 2018 year has seen Project Sea Dragon become a shovel ready project. This has taken almost 7 years to get to this stage in developing this world class project. In fact on‐ground earthmovin
Slide 9: Chairman's Overview cont.
Chairman’s Overview cont. I also welcome our Project Sea Dragon partner Nissui (and their 50% owned Sealord company). As you are aware Nissui is a major international seafood giant, with Sealord one of the largest seafood companies in the southern hemisphere. Collectively these companies have over 1
Slide 10: Overview of Seafarms Group
RL | “Seafarms Overview of Seafarms Group
Slide 11: Overview of Seafarms Group Operations
Overview of Seafarms Group Operations Seafarms Group Limited (SFG) is currently Australia’s largest producer of farmed prawns, underlining its operational aquaculture expertise. Demonstrated track record of growth and innovation. SFG is an ASX listed Australian agri‐food company, with a Crystal Bay
Slide 12: Overview of Seafarms Group Team
Overview of Seafarms Group Team Highly experienced management team across project development and management, aquaculture operations, marketing, distribution, finance and business development. Key SFG Management Team Members Ian Trahar Dr. Chris Mitchell Ian Leijer Dallas Donovan Jairo Llanos Rod Dy
Slide 13: Overview of Seafarms Group Operations
Overview of Seafarms Group Operations Project Sea Dragon (PSD) is shovel ready – development underway Major Project Status (MPS) PSD has received MPS from NT, WA and Federal Governments. Government support continues to be strong Traditional Owners/local communities Strong support by Indigenous stake
Slide 14: Overview of Seafarms Group Operations
Overview of Seafarms Group Operations Project Sea Dragon (PSD) is shovel ready, development underway PSD represents: A major project with a number of international seafood partners (Nissui and Sealord) already secured with more partners to come A shovel ready project, with PSD development already co
Slide 15: Seafarms Financial Overview FY18
Seafarms Financial Overview FY18 13
Slide 16: SFG Financial Outcome for the 12 months ending 30 June 2018
SFG Financial Outcome for the 12 months ending 30 June 2018 For the 12 months reporting period to 30 June 2018, Seafarms has reported a loss in the order of $19.9m, reflecting the positive cash contributions of domestic shrimp and carbon operations whilst fully expensing all PSD development costs, a
Slide 17: Seafarms Group Limited Corporate Overview
Seafarms Group Limited Corporate Overview ASX Listing Code SFG Market capitalisation (November 2018) Approx. $192m Fully Paid Shares on Issue 1.67b Cash, Debtors & Inventories (as at 30 June 2018) $15.4m Long Term Debt (as at 30 June 2018) $15.0m Financial Year End 30 June Directors Shareholdings 46
Slide 18: Operational Overview
RL | “Seafarms Operational Overview
Slide 19: Northern Queensland Operations
Northern Queensland Operations Overview Queensland farms at Cardwell have been operational since 1988. Cardwell Operations Cardwell production ponds are part of a fully vertical integrated operation The Cardwell operations were acquired in 2014. Commencement of redesign work began where practical to
Slide 20: FY 2018 Production Overview
FY 2018 Production Overview Production for the financial year was 1,498 tonnes, down 253 tonnes on FY2017 Reduced production was driven by the YHV7 outbreak in October and November 2017 affecting the 2017 Christmas crop (previously reported) Latest crop results (highlighted in slide 20) have shown a
Slide 21: FY 2018 Production Overview
FY 2018 Production Overview 19
Slide 22: Significant Turnaround in Second Half
Significant Turnaround in Second Half Farm 3 Crop on target Farm 3 Domesticated and NT broodstock Harvest 316 tonnes Single crop (Nov – April) Crop Yield 10.4 tonnes/ha No disease events ABW 32.2 grams Significant production outcomes AWG 1.41 grams/week Number of ponds used for R&D programs for PSD
Slide 23: Research and Development
Research and Development Key PSD biosecurity measure. World leading research Farm raised broodstock, reached broodstock size in 6 months and were collected from Farm 3 (April ’18) to be conditioned in the new maturation sheds Completed and commissioned the broodstock facility at Flying Fish Point (F
Slide 24: PSD Employment, Training and Human Resources
PSD Employment, Training and Human Resources Graduate program and development continues 17 graduates employed with a 70% retention rate Input into the National Training Standards provided Ongoing development of internal processes and training systems 107 Regional FTE’s across northern Australia 12%
Slide 25: Marketing – Delivering Brand Reach
Marketing – Delivering Brand Reach The 2018 core focus was driving strong brand messaging at point of purchase: The “Taste the Freshness” campaign delivered differentiation in the marketplace and reinforced the brand essence ‐ best tasting and highest quality The recipe card series “Simple and Delic
Slide 26: Project Sea Dragon: The Project
Project Sea Dragon The Project 24
Slide 27: Key PSD Achievements since 2017 AGM
Key PSD Achievements since 2017 AGM Key achievements since last AGM include: Securing PSD partners including Nissui. Investment, offtake, technical and international marketing partner Sealord. Domestic (Australia and NZ) marketing partner AAM. Major agricultural investor as our land partner that ena
Slide 28: PSD – A Fully Vertically Integrated Project
PSD – A Fully Vertically Integrated Project Complete end to end control of operations will allow SFG to ensure absolute biosecurity and process control Key Process Steps in PSD Prawn Aquaculture 1 2 3 4 5 Eggs, Genetics Hatching / Sales, marketing Farming Processing & Broodstock juveniles and logist
Slide 29: Project Sea Dragon: The Project Level – Step 1 of Stage 1
Project Sea Dragon The Project Level – Step 1 of Stage 1 27
Slide 30: Exmouth – 'biological early works'
Exmouth – ‘biological early works’ 13 families of G2 (second‐generation) Specific Pathogen Free (SPF) Black Tiger Prawn now housed Commercial trials of G3 animals underway Only source of Australian SPF prawns Unique resource Success at Exmouth requires expansion of facility Goal is to ensure suffici
Slide 31: PSD and associated infrastructure construction commenced
PSD and associated infrastructure construction commenced Seafarms has spent over $84m to date developing PSD. This includes the purchase of our Queensland operations in 2014, which are forecast to generate EBITDA of approximately A$5.5m in FY19 Governments have already commenced their infrastructure
Slide 32: PSD – Funding for Step 1 of Stage 1
PSD – Funding for Step 1 of Stage 1 Discussions have continued with commercial banks, government sponsored infrastructure funds and other major corporations regarding funding this initial phase development of PSD Seafarms remains determined to retain as much ownership as possible in the initial deve
Slide 33: PSD – Strong Domestic and International Demand
PSD – Strong Domestic and International Demand Australia has a strong reputation of being a supplier of high quality sustainable premium seafood. Seafarms has leveraged off this reputation by establishing itself as a high quality producer. PSD has already secured strong international partners with m
Slide 34: PSD – Strong Domestic and International Demand
PSD – Strong Domestic and International Demand Brief overview of existing PSD partners Our existing PSD Project Partners collectively have over 160 years experience in the seafood industry, employ over 10,000 people and have combined annual net sales of approximately US$6.7billion (refer page 34) Ma
Slide 35: PSD – Strong Domestic and International Demand
PSD – Strong Domestic and International Demand Seafarms/Sealord Marketing and Service Agreement Seafarms has entered into a Marketing and Service Agreement with Sealord Sealord will provide an exclusive and commission based sales and marketing service in both Australia and New Zealand. This will pro
Slide 36: PSD – Strong Domestic and International Demand
PSD – Strong Domestic and International Demand Despite high consumer demand and pricing there has been little material growth in Australian grown prawn supply for over 10 years due to environmental license limitations, fragmented nature of industry and lack of capital. Against this trend Seafarms ha
Slide 37: 2018 dry season - PSD development already commenced
2018 dry season ‐ PSD development already commenced Commencement of PSD phased construction and associated infrastructure is already underway. Government sponsored infrastructure to support PSD has also commenced (refer photographs on pages 41‐48) Stage 1 development (1,120 ha’s of ponds) to be buil
Slide 38: PSD – De-risking Construction
PSD – De‐risking Construction Seafarms continues to de‐risk the project through the front‐end engineering and design and procurement strategies First construction elements Expansion of the Exmouth facility to enable the planned and expected increase of the number of SPF families being produced Devel
Slide 39: PSD – De-risking Construction
PSD – De‐risking Construction Engineering team continues to refine design within approval envelopes to reduce capital Greater use of locally produced standard elements (e.g. sheds) More accurate bathymetry at Bynoe Harbour has revealed easier and cheaper water intake Fewer simultaneous construction
Slide 40: Step 1 – Grow Out Centre
Step 1 – Grow Out Centre Stepped approach provides earlier employment of Operations Personnel Seawater Intake Pumps (sized for full Stage 1) Structure Channel remains 100m wide but lower wall height of 2.5m (will service full 10,000 ha project) Settlement pond remains 750m wide but lower wall height
Slide 41: Legune ILUA and Indigenous
Legune ILUA and Indigenous Solid Engagement with Native Title Holders and NLC remains a project Critical Success Factor Requirement for social licence Culture protocols and cultural awareness training under rapid development and being trialled Discussions with other indigenous representative bodies
Slide 42: Governments remain supportive
Governments remain supportive Construction of government infrastructure commitments commenced NT, WA and Commonwealth Governments have all significantly contributed towards supporting PSD Over $100m of road upgrades recently tendered and/or commenced construction. Early works on Keep River Road have
Slide 43: Project Sea Dragon Photographs
Project Sea Dragon Photographs 41
Slide 44: Keep River Bridge Road construction – pylon and formwork
Keep River Bridge Road construction – pylon and formwork 42
Slide 45: Keep River Bridge Road – Completed Pylons
Keep River Bridge Road – Completed Pylons 43
Slide 46: Keep River Bridge Road construction – bridging beams
Keep River Bridge Road construction – bridging beams 44
Slide 47: Legune – quarry material for construction
Legune – quarry material for construction 45
Slide 48: Legune – Forsyth Creek Dam, showing runway
Legune – Forsyth Creek Dam, showing runway 46
Slide 49: Legune – Forsyth Creek Dam, full
Legune – Forsyth Creek Dam, full 47
Slide 50: Contact Us
Contact Us Seafarms Group Limited Level 11, 225 St Georges Terrace Perth WA 6000 PO Box 7312 Cloisters Square WA 6850 T. +61 8 9216 5200 E. info@seafarms.com.au