Bakkafrost P/f · OSL:BAKKA
Bakkafrost P/f — Bakkafrost — Q4 2024 Earnings Presentation
53 slides from Bakkafrost P/f's earnings presentation, Feb 17, 2025
Slide 1: Q4 2024 Bakkafrost Group
Q4 2024 BAKKAFROST GROUP Oslo February 17th 2025
Slide 2: Disclaimer
HEALTHY LIVING DISCLAIMER This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements. No representation or warranty (expressed or implied
Slide 3: Summary of Q4 2024
SUMMARY OF Q4 2024 MARKETS & SALES FINANCE OPERATIONS OUTLOOK APPENDIX
Slide 4: Summary Q4 2024 (Q4 2023)
HEALTHY LIVING SUMMARY Q4 2024 (Q4 2023) Revenues and Revenue of DKK 1,470 million (DKK 1,562 million) Operational EBIT Operational EBIT* of DKK 280 million (DKK 356 million) Harvest in the Faroe Islands: 16,638 tgw (16,005 tgw) Harvest in Scotland: 3,840 tgw (1,062 tgw) Feed sales: 38,853
Slide 5: Markets & Sales
SUMMARY OF Q4 2024 MARKETS & SALES FINANCE OPERATIONS OUTLOOK APPENDIX
Slide 6: Global Markets - Prices
GLOBAL MARKETS - PRICES HEALTHY LIVING STRONG PRICES AT THE END OF THE QUARTER Average spot prices decreased YoY, increased QoQ Spot prices (NASDAQ/Sisalmoni) on superior 4-5 [NOK/kg HOG] Q1 Q2 Q3 Q4 150.00 Superior 4-5kg (NOK/KG) 130.00 y/y: 83.02 -2.7% 80.74 110.00 (Q4 2023) -2.28 (Q4 2024) 90.00
Slide 7: Global Markets - Sold Volume
GLOBAL MARKETS – SOLD VOLUME HEALTHY LIVING VOLUMES INCREASED BY 5% EU/UK: 5% consumption increase Salmon markets, sold quantity (head on gutted weight) Lower than European supply increase Estimated volumes Q4 comparison Estimated volumes FY comparison Markets Q4 2024 E Q4 2023 Volume % FY 2024 E
Slide 8: Global Harvest
GLOBAL HARVEST HEALTHY LIVING VOLUME IN INCREASED BY 5% 3.5% increase in global harvest volume Supply Development Q4 2024 Q4 2023 Change % Strong growth in Europe and drop in Americas Norway 412 391 5,5 % UK 41 25 63,0 % Faroes 21 25 -18,9 % 7.6% increase in European harvest volumes Iceland 16 14
Slide 9: Finance
SUMMARY OF Q4 2024 MARKETS & SALES FINANCE OPERATIONS OUTLOOK APPENDIX Gøtuvík, Faroe Islands
Slide 10: Group Profit and Loss
GROUP PROFIT AND LOSS HEALTHY LIVING LOWER REVENUE AND OPERATIONAL EBIT Q4 2023 Q4 2024 (DKK million) Q4 24 YTD 24 Q4 23 YTD 23 Operating revenue 1,470 7,480 1,562 7,141 Revenue (mDKK) 1,562 -92 1,470 Operational EBITDA* 465 2,254 536 2,181 Operational EBIT* 280 1,550 356 1,544 Operational EBIT (mDK
Slide 11: Operational EBIT and Adjusted Earnings per Share
HEALTHY LIVING OPERATIONAL EBIT* AND ADJUSTED EARNINGS PER SHARE** 710 587 565 407 418 376 388 353 356 325 269 280 248 Operational EBIT* 224 182 173 (mDKK) 120 103 89 71 2020 2021 2022 2023 2024 622 821 1,705 1,544 1,550 YTD 7.66 7.19 6.77 4.80 4.82 4.37 4.00 3.79 Adjusted EPS** 3.43 3.56 3.37 3.19
Slide 12: Balance Sheet
HEALTHY LIVING BALANCE SHEET Headlines (mDKK) (DKK million) End 2024 End 2023 End 2023 End 2024 Intangible assets 4,518 4,509 Property, plant and equipment 6,733 6,220 PPE: 6,220 513 6,733 Right of use assets 321 413 Financial assets 334 289 Biological assets: 3,336* -197 3,139* Deferred tax assets
Slide 13: Cash Flow
HEALTHY LIVING CASH FLOW Q4 2023 Q4 2024 (DKK million) Q4 24 YTD 24 Q4 23 YTD 23 Cash flow, operations (mDKK) Cash flow from operations 68 2,355 -112 1,023 -112 180 68 Cash flow from investments -291 -1,014 -302 -1,044 Cash flow from financing -136 -1,272 456 -287 Net change in cash -359 69 41 -308
Slide 14: Net Interest-Bearing Debt (NIBD)
NET INTEREST-BEARING DEBT (NIBD) HEALTHY LIVING NIBD INCREASED DURING Q4 2024 NIBD was increased by: Development in NIBD in DKK millions 4,000 Change in NIBD • Net investments (mDKK 291) 209 3,500 226 • Change in working capital (mDKK 225) 291 3,000 3,000 2,710 -437 2,500 • Taxes paid (mDKK 209) 2,0
Slide 15: Changed Faroese Tax on Salmon Farming
THE CHANGED FAROESE TAX ON SALMON FARMING, EFFECTIVE FROM 1. JANUARY 2025 HEALTHY LIVING Revenue tax – Old vs. new tax per 1 Jan. 2025 • Broad cross-coalition political long-term agreement 25.0% behind the change 20.0% Applicable revenue tax rate • The old revenue tax (maxed at 20%) is replace by a
Slide 16: Operations
SUMMARY OF Q4 2024 MARKETS & SALES FINANCE OPERATIONS OUTLOOK APPENDIX Strond, Faroe Islands
Slide 17: FOF (Fishmeal, Oil and Feed)
FOF (FISHMEAL, OIL AND FEED) HEALTHY LIVING STRONG FEED SALES IN A QUIET QUARTER Q/Q Q4 YTD Q4 YTD Raw material sourcing vs. Feed sale (tonnes) Volumes 200,000 Volumes of raw material purchase and feed sale 50,000 change 2024 2024 2023 2023 Marine raw material sourced -22% 41,919 309,502 53,552 467,
Slide 18: Freshwater – Faroe Islands
FRESHWATER – FAROE ISLANDS HEALTHY LIVING INCREASING SMOLT TRANSFER Q/Q Q4 YTD Q4 YTD Volumes change 2024 2024 2023 2023 Good capacity in hatcheries Transferred number of smolt (million) 17% 6.1 17.1 5.2 14.2 Strond Glyvradal Norðtoftir Viðareiði Average weight (g) 10% 413 410 375 396 Margin Operati
Slide 19: Freshwater – Scotland
FRESHWATER – SCOTLAND HEALTHY LIVING APPLECROSS RAMPING UP Q/Q Q4 YTD Q4 YTD Volumes change 2024 2024 2023 2023 Applecross hatchery: Transfered number of smolt (million) -41% 1.0 6.0 1.7 9.0 • Ramping up production Average weight (g) 35% 152 109 113 117 • Applecross phase 5 in operation • Completion
Slide 20: Farming – Faroe Islands
FARMING – FAROE ISLANDS HEALTHY LIVING STRONG BIOLOGICAL DEVELOPMENT & LARGE FISH Q/Q Q4 YTD Q4 YTD Good size on harvested fish Volumes change 2024 2024 2023 2023 • Harvest size 11% up to 5.3 kg vs 4.7 kg last year Total harvest volume (tgw) 4% 16,639 62,777 16,005 52,408 Operational EBIT 56% up Ave
Slide 21: The Importance of Robust Smolt
THE IMPORTANCE OF ROBUST SMOLT A RECENT CASE STUDY RINGSIDE COST FROM MARINE SITE- FAROE DEVELOPMENT KUNOYARNES, FAROE ISLANDS VS.ISLANDS SCOTLAND HEALTHY LIVING SCOTTISH COST MORE VOLATILE DUE TO MORTALITY COST. FALLING TREND IN 2024 High-quality Reduced-quality Smolt weight (g) Time to harvest (no
Slide 22: Farming – Scotland
FARMING – SCOTLAND HEALTHY LIVING 68% HIGHER AVERAGE HARVEST WEIGHTS Q/Q Q4 YTD Q4 YTD Volumes Biology improving change 2024 2024 2023 2023 • Significantly larger fish – 4.8 kg up from 2.8 kg Total harvest volume (tgw) 262% 3,840 27,880 1,062 20,598 Average harvest weight (kg) 68% 4.8 4.3 2.8 4.2 •
Slide 23: Services
SERVICES HEALTHY LIVING EFFICIENT SEA LICE MITIGATION IN THE FAROE ISLANDS AND SCOTLAND Q/Q Q4 YTD Q4 YTD Margin Services provided: change 2024 2024 2023 2023 Operational EBIT (mDKK) 92% 25 83 13 44 • Fish transportation Operational EBIT/KG (NOK) 64% 1.93 1.42 1.18 0.91 • Treatments Operational EBIT
Slide 24: Sales & Other
SALES & OTHER HEALTHY LIVING MORE VOLUMES AS HEAD ON GUTTED (HOG) LESS VOLUMES SOLD AS READY-TO-EAT PRODUCTS Q/Q Q4 YTD Q4 YTD • 20% increased volume Volumes change 2024 2024 2023 2023 • 55% increase in head-on-gutted products Volume to VAP (tgw) -42% 3,299 13,666 5,735 22,787 • 42% reduction in rea
Slide 25: Performance per Region
PERFORMANCE PER REGION HEALTHY LIVING SCOTLAND IMPROVING Faroe Islands* - Operational EBIT (mDKK) * Included a marginal contribution from US, DK, UK and FR Q4 2024 Q4 2023 800 Faroe Faroe DKK 1,000,000 Scotland Islands* Group Scotland Islands* Group 700 671 Operational EBIT -31 310 280 -104 461 357
Slide 26: Outlook
SUMMARY OF Q4 2024 MARKETS & SALES FINANCE OPERATIONAL UPDATE OUTLOOK APPENDIX Bakkafossur, A85-Nes
Slide 27: Outlook
OUTLOOK HEALTHY LIVING MODERATE GROWTH EXPECTED ~5% total supply growth expected in 2025 TOTAL HARVEST 1,600 15% 1,400 10% ~4% growth expected from European origins 1,200 1,000 • Diminishing growth during the year 5% 800 600 0% 400 ~7% growth expected from Americas -5% 200 • Majority of growth expec
Slide 28: Outlook
OUTLOOK HEALTHY LIVING GROWING VOLUME Farming Contracts Harvest [gwt] Faroe Islands Scotland Total • For 2025, Bakkafrost intends to sign contracts covering 2025 plan 77,000 20,000 97,000 around 15% of the expected total harvest volumes. Harvest plan 2025 Fishmeal, Oil and Feed 24,000 FO 18,500 18,5
Slide 29: Appendix
SUMMARY OF Q4 2024 MARKETS & SALES FINANCE OPERATIONAL UPDATE OUTLOOK APPENDIX
Slide 30: CMD2023 - Investing in Sustainable Growth
CMD2023 - INVESTING IN SUSTAINABLE GROWTH HEALTHY LIVING 165,000 TONNES HARVEST IN 2028, FAROE ISLANDS AND SCOTLAND COMBINED 2024-2028 Capex* of DKK 6.3 bn Volumes Faroe Islands Scotland Reprioritising CAPEX (Scotland) will reduce short-term capex: 2024 62,776t 27,880t • Around 300 mDKK less in 2024
Slide 31: CMD2023 ~6.3bn Planned Investments 2024-2028
CMD2023 ~ 6.3BN PLANNED INVESTMENTS 2024-2028 HEALTHY LIVING REDUCE BIOLOGICAL RISK, IMPROVE EFFICIENCY AND INCREASE ORGANIC GROWTH Faroe Islands: 2024-2028 capex plan vs. 2022-2026 capex plan 1,800,000 • Hatchery capacity of 24m smolt at 500g in 2028 1,600,000 • Cost-efficient broodstock (repurposi
Slide 32: Faroe Islands - More Capacity in Hatcheries, Larger Smolts
FAROE ISLANDS - MORE CAPACITY IN HATCHERIES, LARGER SMOLTS HEALTHY LIVING INCREASING SMOLT QUALITY, PRODUCTION VOLUME AND CAPACITY TO 24 MILLION SMOLT @500G Average smolt weight Capacity Skálavík project 2023: 18 million smolt of 500g Glyvradal expansion Norðtoftir expansion Viðareiði expansio
Slide 33: Freshwater – Faroe Islands: New Hatchery at Skálavík
FRESHWATER – FAROE ISLANDS HEALTHY LIVING CONSTRUCTION STARTED OF NEW HATCHERY AT SKÁLAVÍK Existing hatcheries Gjógv Húsar Strond Glyvradal Norðtoftir Viðareiði Construction started of Skálavík hatchery • Same design as Glyvradal and Applecross • 3,500 tonnes capacity • Built in phases to allow earl
Slide 34: CMD2023 - Large Smolt Strategy
CMD2023 - LARGE SMOLT STRATEGY HEALTHY LIVING DELIVERING LARGE HEALTHY SMOLT SMOLT CAPACITY 11m 14-15m 15m RAS 2 design & build Fairlie Hatchery 2 build AP Fairlie – project - 8m smolt at 500g - 32,300m³ capacity Post smolt 2 build AP - 2024: project on hold Post smolt 1 build AP 100% smolt from RAS
Slide 35: Value Chain Insight – Hatcheries for Smolt
VALUE CHAIN INSIGHT – HATCHERIES FOR SMOLT HEALTHY LIVING IMPROVEMENTS OF LARGE-SMOLT QUALITY, FAROES (2021G VS. 2020G) 54% 13% Lower mortality Higher growth (number of fish) 4% Lower Feed Converstion Ratio (bio) 16% Lower Feed Converstion 32% Ratio (Eco) Lower mortality (biomass) 35
Slide 36: Value Chain Insight: Shorter Farming Cycles
VALUE CHAIN INSIGHT HEALTHY LIVING FARMING CYCLES GETTING SHORTER WITH LARGE HIGH-QUALITY SMOLT Large Smolt Strategy - Reduced biological risk - Increased production efficiency - Enables Sustainable Growth Faroes: Currently at 13 months in the sea 395g (2023) 36
Slide 37: Segment Overview
SEGMENT OVERVIEW HEALTHY LIVING VOLUMES, MARGINS AND KEY RATIOS FOF Freshwater Farming Services Sales & Other Q4 2024: Q4 2024: Q4 2024: Q4 2024: Q4 2024: Revenue = 565M Revenue = 283M Revenue = 953M Revenue = 193M Revenue = 2,293M Internal Feed sale = 38,259t Smolt transferred = 6.1M Harvest Volume
Slide 38: Development in Supply and Sold Quantity by Origin
HEALTHY LIVING DEVELOPMENT IN SUPPLY AND SOLD QUANTITY BY ORIGIN Expected supply growth in 2025 Global Supply of Atlantic Salmon (head on gutted – HOG) 2020 2021 2022 2023 2024E 2025E 6% increase in Global supply* Norway 1.226 1.383 1.359 1.329 1.361 1.400 UK 160 179 145 137 170 164 3% increase
Slide 39: Q4 2024 Market Environment
HEALTHY LIVING Q4 2024 MARKET ENVIRONMENT 9% drop in reference price compared to Q4 2023 (DKK) Price Norway (NOK/kg) 12.0 100.0 Driven by 8% increase in European harvest 9.7 9.7 90.0 10.0 8.9 9.0 80.0 70.0 8.0 7.2 7.1 6.7 6.5 60.0 6.0 EUR DKK 6.0 50.0 2H prices seasonally lower 40.0 4.0 30.0 Eur
Slide 40: Q4 2024 – Contract Prices Significantly Higher than Spot
HEALTHY LIVING Q4 2024 – CONTRACT PRICES SIGNIFICANTLY HIGHER THAN SPOT Sisalmoni/Nasdaq spot price reflecting marginal weekly price Price Norway (NOK/kg) 120 12 10 100 8 Statistics Norway (SSB) publish average price for all exported 6 80 4 whole fish (HOG) per week 2 NOK 60 0 Incorporates bilater
Slide 41: Development per Quarter
HEALTHY LIVING DEVELOPMENT PER QUARTER Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (mDKK) 2022 2022 2022 2023 2023 2023 2023 2024 2024 2024 2024 Revenue 1,684 1,867 1,940 2,050 1,670 1,859 1,562 2,206 2,067 1,737 1,470 Operational EBIT 587 325 376 565 353 269 356 710 388 173 280 Profit/Loss 845 249 -154 467 -1
Slide 42: Dividend
HEALTHY LIVING DIVIDEND Dividend per share in % of adj. EPS* Dividend 99% • On 30 April 2024, the AGM decided to pay out a dividend on 8.70 DKK per share for the year 2023 (equals 50% of adjusted EPS) 59% 53% 49% 49% 50% 50% 50% 50% 50% 50% 46% • Dividend of 515M DKK was paid out on May 21st 2024 40
Slide 43: State-of-the-Art and Fully Integrated Value Chain
STATE-OF-THE ART AND FULLY INTEGRATED VALUE CHAIN HEALTHY LIVING STRONG CONTROL IN THE FAROE ISLANDS FCR 2024 Employees ultimo 2024 1,567 ~1.09 Converting low food value proteins into high volume & value healthy proteins in the Faroes Revenue 2024 (DKK) ~7.5 bn 100% ASC certified in the Faroes 750 t
Slide 44: Our Pillars and Values
HEALTHY LIVING OUR PILLARS AND VALUES 44
Slide 45: Q2 2024 - Reducing Costs in Scotland
Q2 2024 - REDUCING COSTS IN SCOTLAND HEALTHY LIVING ADAPTING CAPACITY TO NEED Processing facility at Marybank mothballed Sub-leasing excess • Around 75 employees affected (redundancy) vessel capacity: • Redundancy costs were accrued in Q2 2024 • Savings in H2 and onwards All harvest and processing w
Slide 46: Bakkafrost – Overview
HEALTHY LIVING BAKKAFROST – OVERVIEW 46
Slide 47: Bakkafrost – Farming Site Overview
HEALTHY LIVING BAKKAFROST – FARMING SITE OVERVIEW 47
Slide 48: Bakkafrost Salmon at a Glance
Bakkafrost salmon at a glance NUTRITION OMEGA-3 LEVELS OMEGA-3 70.6 VITAMIN D MEA RATIO. 2.58 1.4 10.1 ug PROTEIN LEVELS VITAMIN E LEVELS wht 21.0¢ 5.0 ug ver 1008 ver ob polseais fot2va SELENIUM YoDINE WEAN cons 0. 18 mg 0.05 mg ROI 0.06 mg ROIO.15 mg
Slide 49: Ringside Cost Development - Faroe Islands vs. Scotland
RINGSIDE COST DEVELOPMENT - FAROE ISLANDS VS. SCOTLAND HEALTHY LIVING 9-12 MONTHS DELAY BEFORE FEED COST CHANGES ARE REFLECTED IN COST OF HARVESTED FISH Faroe Islands Scotland 220 220 200 200 Smolt & Cost Ringside - INDEX Smolt & Cost Ringside - INDEX 180 180 160 160 140 140 120 120 100 100 80 80 Q1
Slide 50: Performance per Region
HEALTHY LIVING PERFORMANCE PER REGION 50
Slide 51: Bakkafrost's Segments
HEALTHY LIVING BAKKAFROST’S SEGMENTS Previous segments Segments: • FOF • Freshwater FO • Freshwater SCT • Farming FO • Farming SCT • Services • Sales & Other 51
Slide 52: Performance per Region
HEALTHY LIVING PERFORMANCE PER REGION Scotland - Operational EBIT / KG 12,000 40.00 20.00 10,000 - 8,000 (20.00) 6,000 (40.00) (60.00) 4,000 (80.00) 2,000 (100.00) 0 (120.00) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Scotland - TGW Scotland Faroe Islands* - Operational EBIT / KG 25,000 50.00 4
Slide 53: Bakkafrost
\W// BAKKAFROST