Salmon Evolution Asa · OSL:SALME
Salmon Evolution Asa — Q4 2021 Earnings Presentation
33 slides from Salmon Evolution Asa's earnings presentation, Feb 10, 2022
Slide 1: Q4 2021 Presentation
Q4 2021 PRESENTATION 10 February 2022
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
Agenda • Highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 3 Q4 2021 Presentation
Slide 4: Q4 2021 Highlights
Q4 2021 HIGHLIGHTS Q4 2021 • Excellent project execution – on track for first smolt release in March 2022 – capex in line with budget • Commissioning phase started - first tank filled with seawater in January 2022 • Entered strategic feed partnership with Cargill, combined with USD 5 million private
Slide 5: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 5 Q4 2021 Presentation
Slide 6: Salmon Evolution – Extending the Ocean Potential
SALMON EVOLUTION – EXTENDING THE OCEAN POTENTIAL A Norwegian land-based salmon farming company with a goal to become a global supplier of high-quality and sustainable salmon First production facility under construction in Norway – Joint venture with Dongwon Industries for a 16,800 tonnes annual harv
Slide 7: Conservative approach in a "disruptive industry"
CONSERVATIVE APPROACH IN A “DISRUPTIVE INDUSTRY” 1 Biology is the most important consideration → Shown through our choice of technology There is much to learn, even though we have decades of experience 2 → That’s why we start in Norway International expansion can be accelerated with strong local par
Slide 8: Optimized biology with HFS technology
OPTIMIZED BIOLOGY WITH HFS TECHNOLOGY HYBRID FLOWTHROUGH ADVANTAGES INCREASED COMPLEXITY ABOVE 65% RECIRCULATION • No biofilters – less complexity • Proven technology used in smolt production for • Each tank functions as one decades independent biozone • Fresh seawater as • Maintenance flexibility,
Slide 9: Our technology extends the ocean potential
OUR TECHNOLOGY EXTENDS THE OCEAN POTENTIAL NEW AREAS POSSIBLE FOR LOW RISK PRODUCTION THROUGH USE OF HFS Too cold Too cold Conventional production area Conventional production area Possible with HFS Possible Possible with HFS with HFS Too warm Too warm Too warm Possible with HFS Possible with HFS Co
Slide 10: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations – Norway • Financials • Summary and outlook • Appendices 10 Q4 2021 Presentation
Slide 11: On track for first smolt release in March 2022
ON TRACK FOR FIRST SMOLT RELEASE IN MARCH 2022 • All twelve fish tanks now assembled • Continued strong progress on construction of buildings and structures • Water intake station technically ready for operations • Continued installation of process equipment; heat pumps, heat exchangers, oxygen equi
Slide 12: All twelve fish tanks assembled
• All twelve fish tanks assembled • Phase 1 at Indre Harøy will consist of 12 fish tanks each with a diameter of 28 meter and a height of 13 meter • Fully developed, Indre Harøy will consist of 48 fish tanks with a combined cubic capacity of 240,000m3 12 Q4 2021 Presentation
Slide 13: Coating of walls in first tanks completed; water intake streamers installed
• Coating of walls in first tanks completed • Water intake streamers installed • In process of installing feeding systems and other tank equipment • Testing of full water reuse circuit to commence mid February • First smolt release in March 2022 13 Q4 2021 Presentation
Slide 14: First tank filled with fresh seawater
• First tank filled with fresh seawater from 95 meters water depth in January 2022, seawater temperature of 8 C • Water intake and offtake systems successfully verified • Testing and commissioning to continue until first smolt release in March 14 Q4 2021 Presentation
Slide 15: Water intake station technically ready for operations
• Water intake station technically ready for operations • All particle and UV filters installed 15 Q4 2021 Presentation
Slide 16: Controlled production ramp up during 2022
CONTROLLED PRODUCTION RAMP UP DURING 2022 – STEADY STATE SMOLT RELEASE VOLUMES FROM Q4 Q1 2022 Q2 2022 Q3 2022 Q4 2022 100,000 smolt Batch #1 @ ~300g On-growing First harvest 100,000 smolt Batch #2 @ ~130g On-growing 150,000 smolt On-growing Batch #3 In-house sourcing @ ~130g of smolt from Kraft Bat
Slide 17: Signed heads of terms with Artec Aqua for Indre Harøy phase 2 construction
SIGNED HEADS OF TERMS WITH ARTEC AQUA FOR INDRE HARØY PHASE 2 CONSTRUCTION • Preparatory activities started for Indre Harøy phase 2 construction • Phase 2 in principle identical to phase 1, brining Indre Harøy production volume Phase 2 to 15,800 tons HOG • Target construction start Q4 2022 on back o
Slide 18: Agenda
Agenda • Introduction • Extending the ocean potential™ • Operations – Korea • Financials • Summary and outlook • Appendices 18 Q4 2021 Presentation
Slide 19: K Smart Farming – focus on early engineering and permits
K SMART FARMING – FOCUS ON EARLY ENGINEERING AND PERMITS • K Smart JV with Dongwon Industries formalized end of March 2021 Jeongseon smolt site – as is and first tranche of equity investment completed in May 2021 • Ownership split 49/51% for SE and Dongwon, respectively • Dongwon to provide 75% debt
Slide 20: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 20 Q4 2021 Presentation
Slide 21: Ready for operations – all main input factors secured
READY FOR OPERATIONS – ALL MAIN INPUT FACTORS SECURED WITH TIER 1 SUPPLIERS VALIDATING BUDGET ASSUMPTIONS Input factor Selected supplier Cost vs. budget In-house Smolt profitable operation Highly skilled workforce Higher feed raw material prices. Feed Low FCR gives Supporting relative advantage prod
Slide 22: Group Profit & Loss
GROUP PROFIT & LOSS Summary of result (figures in NOK 1000) Q4 2021 Q4 2020 2021 2020 • NOK 12.3m in revenues in 2021 following Total operating income 5 0 12 257 704 acquisition of Kraft Laks and sale of smolt Cost of goods sold 1 542 0 -908 0 to third party in Q3 – last delivery under Personnel exp
Slide 23: Capex Indre Harøy
CAPEX INDRE HARØY • Q4 2021 capex • Indre Harøy capex of NOK 215 million Accumulated CAPEX Q4 2021 (NOK million) • NOK 10 million capitalized internal G&A 970 • Accumulated capex of NOK 920 million from Capitalized internal G&A 920 project initiation in 2019 ex. capitalized internal Investments (Ind
Slide 24: Increased visibility on phase 1
INCREASED VISIBILITY ON PHASE 1 • Total capex for completion of phase 1 in line with Capex plan for Phase 11 budget (NOK million) • Selected strategic upgrades and adjustments 175 covered by already built-in project buffers: • NOK ~40m related to capacity increases enabling 131 efficiency gains for
Slide 25: Fully funded for committed projects
FULLY FUNDED FOR COMMITTED PROJECTS Total funding Total uses 477 480 983 173 25 506 305 Cash YE21 Undrawn Available liquidity Remaining capex K Smart Kraft Laks sellers WC / Other / committed debt IH phase 1 credit Buffer facilities 25 Q4 2021 Presentation
Slide 26: Agenda
Agenda • Highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 26 Q4 2021 Presentation
Slide 27: Roadmap to 70,000 tonnes HOG
ROADMAP TO 70,000 TONNES HOG 2020 2022 2024 2028 2030 NORWAY 31.5kt Indre Harøy based on current licenses Phase 1 Phase 2 Phase 3 Norway expansion 7.9kt 7.9kt 15.7kt 20kt 50kt ASIA South Korea South Korea phase 1 phase 2 + 8.4kt 8.4kt 20kt+ TOTAL 70kt+ Further expansion opportunities in other overse
Slide 28: Controlled production ramp up during 2022
CONTROLLED PRODUCTION RAMP UP DURING 2022 – STEADY STATE SMOLT RELEASE VOLUMES FROM Q4 Q1 2022 Q2 2022 Q3 2022 Q4 2022 100,000 smolt Batch #1 @ ~300g On-growing First harvest 100,000 smolt Batch #2 @ ~130g On-growing 150,000 smolt On-growing Batch #3 In-house sourcing @ ~130g of smolt from Kraft Bat
Slide 29: Summary & Outlook
SUMMARY & OUTLOOK • Excellent project execution – on track for first smolt release in March 2022 – capex in line with budget • Continued progress in Korea • First harvest end 2022 well aligned with strong salmon market outlook the next couple of years • Salmon Evolution’s HFS technology addressing i
Slide 30: Q&A
Q&A www.salmonevolution.no 30 Q4 2021 Presentation
Slide 31: Agenda
Agenda • Introduction and highlights • Extending the ocean potential™ • Operations • Financials • Summary and outlook • Appendices 31 Q4 2021 Presentation
Slide 32: Highly competent management team backed by a board of directors
HIGHLY COMPETENT MANAGEMENT TEAM BACKED BY A BOARD OF DIRECTORS WITH STRONG INDUSTRIAL BACKGROUND Selected management team Board of Directors and investor overview Tore A. Tønseth Kiyun Yun Håkon André Berg Chairman Board member Chief Executive Officer ▪ CIO of Ronja Capital ▪ CFO in Dongwon Industr
Slide 33: Salmon Evolution will have a state-of-the-art land-based facility at Indre Harøy
SALMON EVOLUTION WILL HAVE A STATE-OF-THE-ART LAND- BASED FACILITY AT INDRE HARØY 33 Q4 2021 Presentation