Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Bakkafrost — Q1 2017 Earnings Presentation

34 slides from Bakkafrost P/f's earnings presentation, May 23, 2017

  1. Slide 1: Q1 2017 Bakkafrost Group

    Q1 2017 BAKKAFROST GROUP Oslo 23 May 2017

  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: Summary of Q1 2017

     SUMMARY OF Q1 2017  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX

  4. Slide 4: Highlights

    HIGHLIGHTS High prices from 2016 continued into Q1 2017  Harvested 13,158 tgw in Q1 2017 (10,934 tgw in Q1 2016)  Feed sales of 19,827 tonnes in Q1 2017* (14,454 tonnes in Q1 2016*)  Raw material purchase of 106,567 tonnes in Q1 2017 (71,568 tonnes in Q1 2016)  Revenues of DKK 854 million in Q1

  5. Slide 5: Summary of the Quarter

    SUMMARY OF THE QUARTER High operational EBIT and high quarterly Q1 Q1 results per kg for the Farming segment. The (DKK million) 2017 2016 2016 2015 VAP segment had a loss, but the FOF Operating revenues 854 905 3,203 2,850 segment had a good result, although down Operational EBITDA 377 282 1,298 1,1

  6. Slide 6: Markets and Sales

     SUMMARY OF Q1 2017  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX

  7. Slide 7: Markets & Sales

    MARKETS & SALES Sales to Europe and Eastern Europe increased, as Total sales of salmon Q1 Q1 sales to USA and Asia decreased by markets 2017 2016 2016 2015 EU 46% 38% 43% 36%  EU market share increased from 38% in Q1 2016 to USA 19% 22% 23% 19% 46% in Q1 2017 Asia 13% 22% 17% 15% Eastern Europe 22%

  8. Slide 8: Global Markets

    GLOBAL MARKETS Undersupply and high salmon prices Spot prices (NASDAQ) on superior 4-5 [NOK/kg HOG] Q1 Q2 Q3 Q4  Prices increased 8.3% in market currency (EUR)  Increased y/y by 3.22 NOK/kg ~5% - from 63.64 to 66.86  Increased q/q by 10.33 NOK/kg ~10% - from 56.53 to 66.86 Reduced global supply i

  9. Slide 9: Q1 Market Environment

    Q1 MARKET ENVIRONMENT PRICE NORWAY  High prices as fall in supply continued 8.0 6.9 7.4 7.3 60.0 7.0 6.1 6.4 50.0 6.0  Nasdaq Norway price EUR 7.28 in Q1 2017 4.8 40.0 5.0 4.4 4.5 EUR DKK  18.3% increase vs. Q1 2016 4.0 30.0 3.0 20.0  1.5% reduction, compared to Q4 2016 2.0 10.0 1.0 - - Q2 Q3 Q4

  10. Slide 10: Development in Harvested and Sold Quantity by Origin

    DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN 1,000 tonnes HOG Q1 2017 Q1 2016 Change % Decreased supply in Q1 2017, compared to Q1 2016 Norway 249.7 243.7 2.4 %  Global supply down 3.4% UK 35.8 33.7 6.4 % Ireland 3.3 2.9 15.6 %  About 6.3% reduction when including inventory movements (liqu

  11. Slide 11: Salmon Markets, Sold Quantity (HOG)

    SALMON MARKETS, SOLD QUANTITY (HEAD ON GUTTED – HOG) EU Salmon markets, sold quantity (head on gutted - HOG) Salmon markets, sold quantity (head on gutted - HOG) Some sub geographies and segments Estimated volumes Q1 comparison Estimated volumes FY comparison shrinking due to high price environment

  12. Slide 12: Short Term Supply Outlook

    SHORT TERM SUPPLY OUTLOOK SUPPLY SUPPLY -- TOTAL TOTAL Supply increase coming quarters between 4 and 11% y/y 700 12% 600 10% Assumption of challenging biology in Norway 500 8% 6%  Upside potential to estimates if biology performs better 400 4% than expected 300 2% 0% 200 -2% Increased supply from C

  13. Slide 13: Segment Information

     SUMMARY OF Q1 2017  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX

  14. Slide 14: Farming – Harvest Volume

    FARMING – HARVEST VOLUME Harvested volumes Harvest Volumes Q1 Q1  In Q1 2017, 69% of harvested volume came tonnes [HOG] 2017 2016 2016 2015 from the North and 31% from the West region North Region 9,124 1,509 24,768 27,619  Harvested volumes increased by 20% in Q1 2017, compared with Q1 2016 West

  15. Slide 15: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE Strong performance with some challenges Q1 Q1 (DKK million) 2017 2016 2016 2015  The operational EBIT increased 43% from DKK 261 million in Q1 2016 to DKK 373 million Operating revenues 751 702 2,841 2,274 in Q1 2017 Operational EBIT 373 261 1,315 841  Good biolog

  16. Slide 16: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE Operation Margin - EBIT per kg total harvested quantity [NOK/kg]  Farming EBIT of NOK 34.27 per kg in Q1 2017, 40.00 compared to 30.45 in Q1 2016 35.00 34.27 34.50  High prices and good biological performance 30.00 30.45 25.00  Performance in North Region negativ

  17. Slide 17: Value Added Products (VAP)

    VALUE ADDED PRODUCTS (VAP) VAP revenues and margin Q1 Q1 (DKK million) 2017 2016 2016 2015  Revenues increased by 7% to DKK 192 million in Q1 2017, from DKK 180 million in Q1 2016 Operating revenues 192 180 881 737 Operational EBIT -53 -25 -201 86  Operating EBIT in Q1 2017 was DKK -53 million, co

  18. Slide 18: Fishmeal, Oil and Feed (FOF)

    FISHMEAL, OIL AND FEED (FOF) High activity and satisfactory performance Fishmeal, Oil and Feed  EBITDA DKK 45 million in Q1 2017, Q1 Q1 compared with DKK 69 million in Q1 2016 (DKK million) 2017 2016 2016 2015 Operating revenues 277 288 1,158 1,048  EBITDA margin of 16.3% in Q1 2017, compared with

  19. Slide 19: Market Conditions Feed

    MARKET CONDITIONS FEED Feed sales higher Volumes of raw material purchase and feed sale [tonnes]  Quantity of feed sold was 19,827 tonnes in Q1 2017, 35,000 120,000 compared with 14,454 tonnes in Q1 2016 Raw material (tonnes) 30,000 100,000 Feed sale (tonnes) 25,000  Faroe Farming being part of Ba

  20. Slide 20: Group Financials

     SUMMARY OF Q1 2017  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX

  21. Slide 21: Group Profit and Loss

    GROUP PROFIT AND LOSS  Revenues decreased from DKK 905 million in Q1 Q1 Q1 2016 to DKK 854 million in Q1 2017. (DKK million) 2017 2016 2016 2015 Lower external revenue in the FOF segment Operating revenues 854 905 3,203 2,850  Operational EBIT increased from DKK 254 Operational EBITDA* 377 282 1,2

  22. Slide 22: Balance Sheet

    BALANCE SHEET  Intangible assets at the end of Q1 2017 are unchanged from Q4 2016 (DKK million) Q1 2017 End 2016 Intangible assets 377 377  Investments in PPE of DKK 179 million in Q1 2017 Property, plant and equipment 2,256 2,118  Financial assets amount to DKK 62 million. Financial assets 62 59

  23. Slide 23: Cash Flow

    CASH FLOW Q1 Q1  Cash flow from operations higher in Q1 2017, (DKK million) 2017 2016 2016 2015 compared to Q1 2016, due to improved Cash flow from operations 365 244 850 768 operations, changes in receivables and changes in working capital Cash flow from investments -179 -119 -740 -602 Cash flow f

  24. Slide 24: Outlook

     SUMMARY OF Q1 2017  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX

  25. Slide 25: Outlook

    OUTLOOK Market Fishmeal, -oil and feed  Global supply in 2017 expected to increase only  Forecast for feed sales in 2017 is 85,000 tonnes around 2%, compared to 2016 Business development Farming  Optimizing of the value chain according to the  Bakkafrost expects to harvest 53,500 tonnes in annou

  26. Slide 26: Appendix

     SUMMARY OF Q1 2017  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX

  27. Slide 27: Development in Harvested and Sold Quantity by Origin

    DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN Global Supply of Atlantic Salmon (head on gutted - HOG) 2013 2014 2015 2016E 2017E Tight supply situation for 2017 Norway 1,029 1,079 1,111 1,054 1,059 UK 142 153 150 142 152  Total supply growth, sold quantity, is expected Ireland 10 11 14 13 15

  28. Slide 28: Investment Programme 2016 - 2020

    INVESTMENT PROGRAMME 2016 - 2020 Investments will be made step by step in the relevant parts of the value chain to secure:  Biological risk  Efficiency  Organic growth BAKKAFROST / Q1 2017 PRESENTATION Page 28

  29. Slide 29: Investment Programme 2016 - 2020

    From CMD June-2016 INVESTMENT PROGRAMME 2016 - 2020 Investment Programme 2016 – 2020 (mDKK) Investment program of DKK 2.2b from 2016 to 2020 590 570 Fishmeal, Oil & Feed (380 mDKK)  New salmon meal and –oil plant  New feed line to increase capacity 410  Advanced feed line capabilities 360 280 Smo

  30. Slide 30: Development per Quarter Q1 2014 – Q1 2017

    DEVELOPMENT PER QUARTER Q1 2014 – Q1 2017 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 (mDKK) 2017 2016 2016 2016 2016 2015 2015 2015 2015 2014 2014 2014 2014 Revenue 854 868 640 790 905 760 677 800 613 757 584 711 631 Operational EBIT 335 350 255 307 254 257 206 303 235 227 209 212 186 Profit/Loss 79 555

  31. Slide 31: Faroe Islands

    FAROE ISLANDS  18 islands – 1,387 km2  50,045 inhabitants (April 2017)  Home rule – within the Kingdom of Denmark  Part of the Danish monetary union, Danish krone (DKK) Key sectors (% of wage earners, 2014)  Service/public admin.: ~40%  Private service: ~31%  Construction: ~12%  Fishing : ~1

  32. Slide 32: Dividend

    DIVIDEND Dividend per share in % of adj. EPS * Dividend 100% 99% • Dividend for 2016 of DKK 8.70 (NOK 10.36) per 90% share to be paid in Q2 2017 80% 70% 60% 49%** 49% 50% 48% 50% 46% 40% Dividend policy 40% 30% 19%  Competitive return through: 20% 10%  Dividends 0%  Increase in the value of the e

  33. Slide 33: Largest Shareholders

    LARGEST SHAREHOLDERS 20 largest shareholders Share development 12 months development Traded daily NOK/share 5 years development Traded Monthly NOK/share Subscribe Oslo Stock Exchange Releases from BAKKA by e-mail on: http://www.bakkafrost.com/en/frontpage/ BAKKAFROST / Q1 2017 PRESENTATION Page 33

  34. Slide 34: Page 34

    BAKKAFROST / Q1 2017 PRESENTATION Page 34

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