Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Bakkafrost — Q2 2011 Earnings Presentation

36 slides from Bakkafrost P/f's earnings presentation, Aug 16, 2011

  1. Slide 1: Presentation Q2 2011

    PRESENTATION Q2 Q 2011 CEO Regin Jacobsen / CFO Teitur Samuelsen Oslo A t 16th 2011 O l August

  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 Q2  Financial Highlights  Segment g Information  Group Financials  Acquisition of Havsbrún  Outlook BAKKAFROST / Q2 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% 17%  GDP: DKK 11.784 b

  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  ~63 % of harvest volumes (Q2 2011) (excl Viking and Fa aroe Farming)  ~57 % of farming licenses (01.07.2011) (incl. Viking and Faroe Farming)  ~68 % of salmon licenses (

  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 A Average S Seawater t T Temperatures t 2003 2003-2009 2009 GEOGRAPHY  Improves biological control and area manag gement ºC Faroe Islands Norway (Trøndelag) 16 14  Stable St bl sea

  7. Slide 7: Summary Q2 2011

    SUMMARY Q2 2011  Increased sales of HOG on new markets Market  Achieved prices in Q2 2011 incre eased compared with last year  Acquisition A i iti off Havsbrún H b ú finally fi ll ap pproved d Strategy  Take advantages of economy of scale s  Strengthening the position as a high h quality Atlant

  8. Slide 8: Market

    MARKET  New market opportunities Sales divided on markets [by Value] Sales,  Demand driven by: USA 26%  Lower market prices  Campaigns‘ At even more competitive prices  Promotions – boosting volume West Far East Europe E 9%  New markets increasing its share 62% East More than 1/3 of Bakkafrost

  9. Slide 9: Market

    MARKET  Salmon spot price dropped during Q2 Spot prices on fresh salmon [NOK/kg HOG] 50,00  Farmed salmon now even more competitive to 45,00 other food products opening up for new possibilities 40,00  The market price for salmon dropped close to 25 35,00 NOK/kg during Q2 30,00  Earlier than expe

  10. Slide 10: Financial Highlights

    BAKKAFROST FINANCIAL HIGHLIGHTS b

  11. Slide 11: Financial Highlights

    FINANCIAL HIGHLIGHTS  Total harvested quantity increased 52% (NOK K) Q2 2011 Q2 2010 compared with Q2 2010 Farm ming: North West North West  Differences in EBIT/kg due to available sites to harvest each period Operrational EBIT/kg gwt 16.89 11.56 18.28 14.82  North harvested at higher prices - ea

  12. Slide 12: Key Financials, Group

    KEY FINANCIALS FINANCIALS, GROUP  Strong Cash flow from operations in Q2 2011 (DKKm) Q2 2011 Q2 2010 used to finance: Ca ash flow from operations 168** 76  Biomass Tottal assets 1,710 1,184*  Increased production NIB BD 594 70*  Investments  To increase capacity Eq quity ratio 48% 76%*  Reduce

  13. Slide 13: Planned investments in 2011 for Bakkafrost and Havsbrún

    PLANNED INVESTMENTS IN 2011 FOR BAKK KAFROST AND HAVSBRÚN  Investments in PPE is estimated to be 70 million DKK in Investments in PPE [Mio DKK] 2011, which is same amount as in 2010 120  The investments are made in: 100  Hatchery division 80  Farming division 60  Harvesting division and 40  VA

  14. Slide 14: Segment Information

    SEGMENT INFORMA ATION Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, Borðoy which is one of the northernmost islands 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

  15. Slide 15: Segments Farming

    SEGMENTS FARMING  Revenues increased by 44% and volumes (DKK ) (DKKm) Q2 2011 Q2 2010 increased by 52% from Q2 2010 to Q2 2011 Operating revenues 290 202  Improved margin Operational EBIT 126 84  High prices in Q2 2011 Operational EBIT margin 43,5% 41.6% BAKKAFROST / Q2 PRESENTATION 2011 Page 15

  16. Slide 16: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE E  Highest Operational EBIT ever: Operational Performance  The Operational EBIT from the farming segment Operational Performance amounted to DKK126.9 million for Q2 2011. / g EBIT NOK/kg EBIT MILL NOK 25 350  The margin for the farming segment was 16.31 NOK/kg gw

  17. Slide 17: Farming – Harvest Volume

    FARMING – HARVEST VOLUME  Harvested volume: [ton nnes gwt] Q2 2011 Q2 2010 H1 2011 2010 2009  52% increase in Q2 2011 compared with Q2 We est 892 2,602 2,439 7,792 11,970 2010 No orth 7,200 2,739 11,113 13,834 18,680  Smolt release in H1 2011 4 4.4 4 million pieces smolt* Total 8,092 5,341 13,552

  18. Slide 18: Strong Expected Volume Growth

    STRONG EXPECTED VOLUME GROWTH  Increased smolt release by 108% from 2008 to 2010 Smolt Release (million)  Still two sites with no fish, to be started up in 2012  Harvest scaled up p from Q Q2 2011 and onwards BAKKAFROST / Q2 PRESENTATION 2011 Page 18

  19. Slide 19: Segments VAP

    SEGMENTS VAP  Revenue increased by 10% despite 6% lower volumes (DKKm) Q2 2011 Q2 2010 sold Operating revenues 138 125  VAP contributing to Group Operational EBIT Operational EBIT 1 -25  Result affected by high raw material prices in April/May Operational EBIT margin 0,7% -20%  High contract por

  20. Slide 20: Group Financials

    BAKKAFROST GROUP FINANCIALS

  21. Slide 21: Group Profit and Loss

    GROUP PROFIT AND LOSS  Revenues increased by 57% and volumes increased Q2 2011 Q2 H1 H1 by 50% - strong market in Q2 (D DKKm) 2010 2011 2010 O Operating revenues 314.3 199.6 554.6 390.0  Operating EBIT increased by 216% P Purchase of g goods -94 94.8 8 -57 57.2 2 -171 171.3 3 -94 94.4 4  Group EB

  22. Slide 22: Balance Sheet – as per 30 June 2011

    BALANCE SHEET – AS PER 30 JUNE 2011  Continue to invest in PPE to carry out the organic (D DKKm) 30 06 2011 30.06.2011 31 12 2010 31.12.2010 growth In ntangible assets 136.2 136.2  Further building up biomass as planned – booked Prroperty, plant and equipment 373.5 356.4 value decreased due revers

  23. Slide 23: Cash Flow – for Q2 2011

    CASH FLOW – FOR Q2 2011  Strong cash flow from operations Q2 Q2 H1 H1 (D DKKm) 2011 2010 2011 2010  Cash flow used to build up biomass, investments and Ca ash flow from operations 167.8 75.6 268.6 168.9 dividend to shareholders Ca ash flow from investments 577.9 -577 9* -20 20.2 2 -598 598.2 2* -4

  24. Slide 24: Havsbrún – Viking Seafood – Faroe Farming

    HAVSBRÚN–VIKING SEA AFOOD–FAROE FARMING AFOOD–FAROE

  25. Slide 25: Havsbrún – Viking Seafood – Faroe Farming

    HAVSBRÚN – VIKING SEAFOOD – FAROE FARMING F ~75km 75km  Acquired 1st July 2011, with financial effect from 1st January y 2011  All formalities approved  Increases Bakkafrost farming capacity  Extend Bakkafrost Value Chain (Fish meal, Fish oil and a Fish feed)  Economy of scale ~110km  Bakkafro

  26. Slide 26: Bakkafrost New Valuechain

    BAKKAFROST NEW VALUECHAIN BAKKAFROST / Q2 PRESENTATION 2011 Page 26

  27. Slide 27: Havsbrún - strong position within fish meal and oil

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

  28. Slide 28: 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 facttory  Production capacities: Main Fish Farming Area  600 tonnes salmon l ffeed d per day* d *  High percentage of marine ingredients ~25km  Fresh feed for direct transport to Meal, Oil & Feed factor

  29. Slide 29: Fish Meal & Oil and Fish Feed

    FISH MEAL & OIL AND FISH FEED  Margins lower due to loss on Meal Oil and Feed [m Meal, million DKK] inventory in H1 2011  In 2010 increased market prices on fish meal and oil influenced the margin positively. (DKKm) – FO GAAP** H1 2011 2010 2009 The situation was opposite in H1 2011 Operating reve

  30. Slide 30: Viking Seafood

    VIKING SEAFOOD Fish Farming, Farming primary processing Locations  Bakkafrost owns 100.0% of the company ~75km  Well run company  2 licenses with an estimated capacity of 8,500 tonnes gw  Located in close proximity to Bakkafrost’s existing locations s  Slaughtery located in Strendur with a year

  31. Slide 31: Faroe Farming

    FAROE FARMING Fish Farming and primary processing Locations  Bakkafrost owns 78.1% of the company ~75km 75km  Well run company  3 licenses with an estimated capacity of 6,500 tonnes gutte ed weight  Located on the southern island of Suðuroy, y, 70 kilometers frrom Glyvrar y  Slaughtery located

  32. Slide 32: Outlook

    OUTLOOK  The spot price below expected level is expected to  Started to commit contracts for 2012 boost demand both on existing and new markets  Feed sales estimated to 72,000 tonnes in 2011  Smolt release for Bakkafrost at 10* million pieces in 2011  The acquisition q of Havsbrún g gives Bakka

  33. Slide 33: Appendix

    APPENDIX Kunoyarnes Bakkafrosts fishfarm A-12

  34. Slide 34: Acquisition of Havsbrún – Transaction Details

    ACQUISITION OF HAVSBRÚN – TRANSACTIION DETAILS  Bakkafrost to pay DKK 1,100 1 100 million Financing for 100% of Havsbrún DKK m  Includes 16.71% of Bakkafrost 1,100 owned byy Havsbrún 1,100  The shares in Bakkafrost will be 1,000 used as a part of the consideration 900 404  Acquisition financing

  35. Slide 35: Largest Shareholders

    LARGEST SHAREHOLDERS 20 largest shareholder Share price development since listing [NOK] SALMAR ASA NOR 23,29 Jacobsen Hans FRO 9,40 Jacobsen Jóhan Regin FRO 9,19 JPMORGAN CHASE BANK GBR 4 62 4,62 TF ILØGUR P/F FRO 4,15 P/F Rundingur FRO 4,07 NORDEA BANK DENMARK A/S DNK 3,45 DANSKE BANK A/S DNK 2,81

  36. Slide 36: P/F Bakkafrost contact details

    P/F Bakkafrost · Bakkavegur 9 · FO-625 Glyvrar Faroe Islands · www.bakkafrost.com BAKKAFROST / Q2 PRESENTATION 2011 Page 36

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