Bakkafrost P/f · OSL:BAKKA

Bakkafrost P/f — Q1 2012 Earnings Presentation

30 slides from Bakkafrost P/f's earnings presentation, May 22, 2012

  1. Slide 1: Presentation Q1 2012

    PRESENTATION Q1 2012 CEO Regin Jacobsen / CFO Teitur Samuelsen Oslo May 22nd 2012

  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 2012

     SUMMARY OF Q1 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates back to Viking times, but it was no

  4. Slide 4: 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  ~74% of harvest volumes (Q1 2012)  50% of farming licenses  Harvested a total of 11,348 gwt in Q1 2012 (5,460 tonnes gwt in Q1 2011) ~110km  Feed sale of 15,299 tonnes in Q1

  5. Slide 5: Summary Q1 2012

    SUMMARY Q1 2012  Overall EBIT/kg NOK 5,4  Farming EBIT/kg NOK 4,4  The marketplace showed a very strong demand in the period  Operational development:  The biological development of the Farming operation was beneficial together with good operational performance. Improvement on costs still in pr

  6. Slide 6: Bakkafrost – acquisition and divestment of Faroe Farming

    BAKKAFROST – ACQUISITION AND DIVESTMENT OF FAROE FARMING  Background  Prior to Q1 2012 transaction, Bakkafrost controlled ~57 % of farming licenses (July 1st 2011) in the Faroe Island  Maximum control 50% of licenses according to Faroese law  Transaction  Acquired the non-controlling interests

  7. Slide 7: Market & Sales

    MARKET & SALES Strong salmon market in Q1 2012 Market share Q1 Q1 by value 2012 2011 2011 2010  Sold quantity increased 108% in Q1 compared with Q1 2011 EU 58% 64% 60% 71% US 11% 26% 23% 15%  Strong demand from Russia & China, accounted for 23% of total revenues in Q1 2012 Far East 16% 8% 9% 7% Ea

  8. Slide 8: Global Markets

    GLOBAL MARKETS Spot prices on fresh salmon 4-5 [NOK/kg HOG]  Global supply increased 32% from 275,000 tonnes 50,00 gwt to 362,000 tonnes in the period 45,00 40,00  Salmon price dropped 35% ~ 14 NOK/kg from Q1 35,00 2011 to Q1 2012 30,00  25-38% total increase in volumes per month sold 25,00 globa

  9. Slide 9: Financial Highlights

     SUMMARY OF Q1 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates back to Viking times, but it was no

  10. Slide 10: Financial Highlights

    FINANCIAL HIGHLIGHTS Q1 Q1 Acceptable results in a supply driven market (DKK million) 2012 2011 Operating revenues 400.1 240.3  Increased revenue driven by organic growth Operational EBITDA 79.7 102.7 in harvested volumes together with revenue Operational EBIT 60.0 92.0 from acquired activities Res

  11. Slide 11: Key Financials, Group

    KEY FINANCIALS, GROUP Q1 Q1  Acceptable cash flow from operations – (DKK million) 2012 2011 hampered by lower salmon prices and Cash flow from operations 33.2 100.8 increasing net working capital Total assets* 2,299.0 2,301.8  Total assets almost unchanged – but assets and liabilities in Faroe Far

  12. Slide 12: Segment Information

     SUMMARY OF Q1 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK Klaksvík is the second largest town of the Faroe Islands. The town is located on Borðoy, which is one of the northernmost islands. The first settlement at Klaksvík dates back to Viking times, but it was no

  13. Slide 13: Farming – Harvest Volume

    FARMING – HARVEST VOLUME Harvested volume: [tonnes Q1 Q1 2011 gwt] 2012 2011  Increased 108% from 5,460 tonnes in Q1 2011 West 8,247 1,547 6,160 to 11,348 tonnes in Q1 2012 North 1,368 3,913 21,052  West region harvested the main quantity Viking 1,733 3,426* Smolt transfer:  Smolt transfer in Q1

  14. Slide 14: Farming – Operational Performance

    FARMING – OPERATIONAL PERFORMANCE Revenues and margin (DKK million) Q1 2012 Q1 2011 Operating revenues 312 213  Revenues increased in Q1 2012 compared with Q1 2011 from DKK 213 million to DKK 312 million Operational EBIT 49 91  Margin reduced from 42.7% in Q1 2011 to 15.7% in Operational EBIT marg

  15. Slide 15: Farming – Margin Development

    FARMING – MARGIN DEVELOPMENT Operational EBIT/kg [NOK]  The operational EBIT in Q1 2012 was NOK 5.42 per kg for Farming and VAP segment compared with NOK 3.83 per kg in Q4 2011  Market prices increased on average 3,34 NOK/kg compared with Q4 2011 due to strong demand  Lower downgrade in Q1 than i

  16. Slide 16: Segment VAP

    SEGMENT VAP (DKK million) Q1 2012 Q1 2011  Operational EBIT margin of 9% in Q1 2012 compared to 1% in Q1 2011 Operating revenues 122 130  Increased sales from VAP Operational EBIT 11 1  Contract level reduced Operational EBIT margin 9% 1%  Prices reduced on back of changed market situation  New

  17. Slide 17: Segment Fish Meal, Oil and Feed

    SEGMENT FISH MEAL, OIL AND FEED  17% increase in sold volumes in Q1 2012 compared Meal, Oil and Feed with Q1 2011  EBITDA margin reduced to 7.4% due to low season Q1 Q1 (DKK million) 2012 2011 2011  Raw material intake for fishmeal/oil production 23.514 tonnes in Q1 2012 Operating revenues* 150 7

  18. Slide 18: Group Financials

     SUMMARY OF Q1 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK

  19. Slide 19: Group Profit and Loss

    GROUP PROFIT AND LOSS Q1 Q1  Revenue up 67% (DKK 160 million) due to (DKK million) 2012 2011 organic growth and acquisitions Operating revenues 400.1 240.3  Harvest volumes up 108% (5,888 gwt) of which 76% (4,156 Operational EBITDA 79.7 102.7 gwt) is organic growth Operational EBIT 60.0 92.0  Low

  20. Slide 20: Balance Sheet

    BALANCE SHEET (DKK million) Q1 2012 2011  Balance sheet impacted by classification of assets Intangible assets 293.7 370.0 and liabilities in Faroe Farming as “held for sale” Property, plant and equipment 779.1 828.5  Investments in PPE of DKK 17 million Financial assets 32.5 35.9 (expectations un

  21. Slide 21: Cash Flow

    CASH FLOW Solid cash flow in the quarter: 1Q Q1 (DKK million) 2012 2011 Cash flow from operations 33.2 100.8  Lower cash flow from operations in Q1 2012 compared to Q1 2011 due to lower salmon prices and Cash flow from investments -17.0 -20.2 increased net working capital Cash flow from financing 6

  22. Slide 22: Outlook

     SUMMARY OF Q1 2012  FINANCIAL HIGHLIGHTS  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK

  23. Slide 23: Outlook

    OUTLOOK  Improved utilisation of acquired farming operation, costs & capacity  Increased sales of VAP products  Contracted VAP products corresponding to 9,000 tonnes gwt until end 2012  Feed sales estimated to 85,000 tonnes in 2012  Harvested volumes in 2012 estimated between 42,000 - 44,000 to

  24. Slide 24: Appendix

    APPENDIX Kunoyarnes Bakkafrosts fishfarm A-12

  25. Slide 25: Faroe Islands

    FAROE ISLANDS  18 islands – 1,387 km2  48,285 inhabitants (March 1st 2012)  Home rule – within the Kingdom of Denmark  Head of state: Queen Margrethe II  Head of government: Prime Minister Kaj Leo Johannesen  Part of the Danish monetary union, danish krone (DKK)  Key sectors (% of wage earner

  26. Slide 26: Overview of Financing

    OVERVIEW OF FINANCING Financing of the Group:  Total financing of DKK 1,075 million  Instalment loan of DKK 475 million, repayable with DKK 25 million/quarter  Revolving credit facility of DKK 600 million due in 5 years  NIBD end Q1 2012: DKK 764 million Covenants:  NIBD/ EBITDA max 3.5 over 12

  27. Slide 27: Planned Investments in 2012

    PLANNED INVESTMENTS IN 2012 Investments in PPE (DKK millon) Investments in PPE is estimated at DKK 115 million in 140 2012, which is DKK 15 million lower than in 2011 120  The investments are made in: 100 80  Hatchery division 60  Fish meal/oil and feed 40  Farming division 20  Harvesting divis

  28. Slide 28: Faroe Islands – excellent conditions for cost effective farming

    FAROE ISLANDS – EXCELLENT CONDITIONS FOR COST EFFECTIVE FARMING Average Seawater Temperatures 2003-2009  Faroese fjords provide separation between locations ºC Faroe Islands Norway (Trøndelag) GEOGRAPHY 16  Improves biological control and area management 14 12  Stable seawater temperatures throug

  29. Slide 29: Largest Shareholders

    LARGEST SHAREHOLDERS 20 largest shareholders Share price development since listing in NOK Salmar ASA NOR 25,21 Jacobsen Oddvør FRO 9,40 NOK BAKKA (OSL) Jacobsen Johan Regin FRO 9,19 DANSKE BANK 3993 NORDIC SETTLEME DNK 7,99 PARETO BANK ASA NOR 4,66 JPMORGAN CHASE BANK NORDEA TREATY ACCOUN NOM GBR 3,

  30. Slide 30: Bakkafrost contact details

    Bakkavegur 9 FO 625 Glyvrar, Faroe Islands Tel +298 40 50 00 Fax +298 40 50 09 bakkafrost@bakkafrost.com www.bakkafrost.com

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