Salmon Evolution Asa · OSL:SALME
Salmon Evolution Asa — Q3 2024 Earnings Presentation
30 slides from Salmon Evolution Asa's earnings presentation, Nov 7, 2024
Slide 1: Presentation Q3 2024
PRESENTATION Q3 2024 CEO: Trond Håkon Schaug-Pettersen CFO: Trond Vadset Veibust 7 November 2024
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Salmon Evolution ASA (the “Company” and together with is subsidiaries, the “Group”) except where context otherwise requires, solely for information purposes. This Presentation, and the information contained herein, does not const
Slide 3: Agenda: Highlights
• Highlights • Operations • Growth • Financials • Summary and outlook EXTENDING THE OCEAN POTENTIAL 3
Slide 4: Highlights in the quarter
Q3 2024 Highlights in the quarter • Strong biological KPIs supported by continued stable operations • Group EBITDA of -7.3 NOKm - Farming EBITDA of 2.2 NOKm and NOK 3.3 EBITDA/kg • Pushing harvest into Q4 to maximize price realization – full year harvest guidance unchanged • Standing biomass near re
Slide 5: Operations
• Highlights • Operations • Growth • Financials • Summary and outlook EXTENDING THE OCEAN POTENTIAL 5
Slide 6: Consistent strong biological results
Q3 2024 Consistent strong biological results Feed conversion ratio (FCRb) Accumulated mortality Superior grade share Superior grade FCRb Mortality % share % 1,15 8,0 % 100% 7,0 % YTD 1,10 96% SE avg. 6,0 % 5,0 % 1,05 YTD 92% YTD SE avg. SE avg. 4,0 % 1,00 88% 3,0 % 2,0 % 0,95 84% 1,0 % 0,90 0,0 % 80
Slide 7: Maximizing price realization in second half of 2024
Q3 2024 Maximizing price realization in second half of 2024 Pushing harvest into Q4 Harvest guidance unchanged • Used available flexibility to push harvest into Q4 maximizing Harvest volumes (tonnes, HOG) Superior price realization on back of higher expected prices share • Q3 harvest of 680 tonnes H
Slide 8: Biomass production increase
Q3 2024 Biomass production increase Net daily biomass gain % Biomass development 1,00% % net daily biomass gain to standing biomass Net biomass growth1 / total biomass (tonnes, LW) 1 800 2 700 0,80% 0.87 % 1 440 +8 % 2 160 0.76 % 0.75 % +11 % +9 % 0,60% 0.70 % 0.67 % 1 080 -19 % 1 620 0,40% 720 1 08
Slide 9: Significant jump in harvest and production
Significant jump in harvest and production Comment Harvest guidance 2025 New production • Prioritizing biomass build-up All in HOG - Indre Harøy phase 1 ~9,000t plan during H1 2025 to take out full ~1,100t New pre-grow- out tanks growth potential on back of fully stocked farm +40 % ~7,900t Current p
Slide 10: We have the answers we need
Q3 2024 2+ YEARS OF FULL INDUSTRIAL SCALE OPERATIONS We have the answers we need Continuous improvement… …driven by unique insights after 2+ years • Backdrop: Stable performance, we can devote our Smolt • Quality and stocking weights • Upgrading smolt facility to address constraints and increase fle
Slide 11: Significant improvement in stocking weights
Q3 2024 FOCUS ON SMOLT QUALITY IS PAYING OFF Significant improvement in stocking weights Strong biomass growth at smolt facility Stocking weights above target • Strong operational performance at smolt facility, 300 300 Expected stocking weights (grams) biomass growth up 39 % Y/Y Stocking weight ~270
Slide 12: Phase 2: Taking Salmon Evolution to the next level
Q3 2024 REACHING CRITICAL SCALE OF OPERATIONS Phase 2: Taking Salmon Evolution to the next level 128 % 14 % 25 % increased output increased output shorter grow-out with phase 2 per phase cycle EXTENDING THE OCEAN POTENTIAL 12
Slide 13: Unlocking more potential at Indre Harøy with phase 2
Q3 2024 WE BENEFIT FROM MORE SCALE AND FLEXIBILITY Unlocking more potential at Indre Harøy with phase 2 Optimising outcomes Higher upside potential Weaknesses addressed ~11 17 % • 6 smolt inserts per year each batch Start weight Harvest weight months ~5.7 kg (LW) grow-out share of annual ~130g • Cap
Slide 14: Growth
• Highlights • Operations • Growth • Financials • Summary and outlook EXTENDING THE OCEAN POTENTIAL14
Slide 15: Permitted to 36,000 tonnes HOG at Indre Harøy
Q3 2024 SALMON EVOLUTION – INDRE HARØY SITE Permitted to 36,000 tonnes HOG at Indre Harøy Phase 1 – 7,900 tonnes HOG Phase 3 Zoning Permitted Designed Funded Constructed Operational +18,000t HOG Phase 2 – 10,100 tonnes HOG Phase 2 and Zoning Permitted Designed Funded Constructed Operational optimiza
Slide 16: Phase 2 on track for first harvest during 2026
Q3 2024 Phase 2 on track for first harvest during 2026 General • Project on plan and budget – good progress at building site • On track for targeted first smolt release Q1-26 and first harvest Q4-26 • 50-60 workers on-site increasing to 90- 100 before year end Status and progress – grow out • Blasti
Slide 17: Good progress at building site
Q3 2024 Good progress at building site Status and progress – water intake • Blasting works previously completed • Concrete works for the intake station underway, good progress at building site Status and progress – additional tank capacity • Planning and engineering initiated • Expected completion o
Slide 18: Indre Harøy is only the beginning
Q3 2024 EXPANSION PLANS Indre Harøy is only the beginning Norway expansion North America South Korea SE focused on capital discipline and leveraging human capital Yangyang grow out site Jeongson Target smolt facility site areas 36,000t HOG planned Indre 18-54,000t HOG Harøy phase 1-3 potential addit
Slide 19: Proposed regulation for land-based aquaculture
Q3 2024 LAND BASED AQUACULTURE IN NORWAY Proposed regulation for land-based aquaculture Background and proposal Our assessment • After a two-year standstill in considering license • The proposal introduces reasonable and logical applications for land-based aquaculture, the requirements for land-base
Slide 20: Financials
Q3 2024 • Highlights • Operations • Growth • Financials • Summary and outlook EXTENDING THE OCEAN POTENTIAL20
Slide 21: Farming: Positive EBITDA despite low harvest volume
Q3 2024 CONSOLIDATED KEY FIGURES AND HIGHLIGHTS: Q3 2024 Farming: Positive EBITDA despite low harvest volume REVENUE EBITDA EBITDA/KG HARVEST VOLUME 51.1 NOKm 2.2 NOKm NOK 3.3 680 TONNES HOG • Pushing harvest into Q4 to maximize price realization. Farming Norway (figures in NOKm) Q3 24 Q3 23 YTD 24
Slide 22: Other: Expansion cost base
Q3 2024 CONSOLIDATED KEY FIGURES AND HIGHLIGHTS: Q3 2024 Other: Expansion cost base REVENUE EBITDA EXPANSION PROJECTS EXPANSION COST1 5.4 NOKm -9.6 NOKm Three - 3 NOK 14.1/KG • Other segment encompass typical headquarter functions as well as staff working on growth projects. • Cost base is primarily
Slide 23: Group: It is all about volume
Q3 2024 CONSOLIDATED KEY FIGURES AND HIGHLIGHTS: Q3 2024 Group: It is all about volume REVENUE EBITDA EBIT EBITDA/KG 51.3 NOKm -7.3 NOKm -25.6 NOKm NOK -10.8 • Financial results impacted by temporary low harvest Group (figures in NOKm) Q3 24 Q3 23 YTD 24 YTD 23 volume and normal seasonality in price
Slide 24: Group: Positive cash flow from operations
Q3 2024 CONSOLIDATED KEY FIGURES AND HIGHLIGHTS: Q3 2024 Group: Positive cash flow from operations CASH FLOW OPERATIONS TOTAL CASH FLOW Available liquidity NIBD 6.6 NOKm -120.2 NOKm 866 NOKm 135 NOKm Summary of financial position • 6.6 NOKm positive cash flow from operations, even (figures in NOKm)
Slide 25: Gradual increase in CAPEX related to phase 2
Q3 2024 Gradual increase in CAPEX related to phase 2 Investments phase 2 Gradual increase in Capex expected Estimated capex quarter by quarter until completion (NOKm) 245 Quarterly investments +8 % Accumulated +11 % +9 % -19 % 128 117 88 • Pre-project • Design • Groundwork 29 IB Q2-24 Q2-24 Q3-24 Q4
Slide 26: Creating cash flow for substantial organic growth
Q3 2024 POTENTIAL TO FULLY FUND NORWAY EXPANSION ON RETAINED EARNINGS – FOR ILLUSTRATIVE PURPOSES Creating cash flow for substantial organic growth Est. phase 2 harvest volume ~18,000 tonnes, HOG • When Phase 2 is fully operational, Illustrative realized salmon Salmon Evolution has a strong cash NOK
Slide 27: Why our approach makes sense
Q3 2024 Why our approach makes sense Capex/kg (NOK) benchmarking Farming EBIT cost/kg (NOK) Superior price realization (NOK/kg)1 Superior Resource ~98/kg price premium rent effect ~94/kg ~245/kg ~245/kg ~62/kg Depreciations non-recurring capex Current ~55/kg levels Conventional Salmon Evolution Conv
Slide 28: Summary and outlook
Q3 2024 • Highlights • Operations • Growth • Financials • Summary and outlook EXTENDING THE OCEAN POTENTIAL28
Slide 29: Creating a foundation for substantial profitable growth
UNIQUE GROWTH PLATFORM Creating a foundation for substantial profitable growth • Proven operational excellence with strong biological and financial results • Closing in on steady state volume and financials • Competitive farming cost, expected to improve further with scale and falling feed cost • On
Slide 30: Next update
Q3 2024 Next update Q4 2024 and full year results | Q4 operational update will be released early January