Seafarms Group Limited · ASX:SFG
Seafarms — FY2019 Earnings Presentation
50 slides from Seafarms's earnings presentation, Sep 2, 2019
Slide 1: Annual Report Presentation 2019
For personal use only ASX Announcement | 30 August 2019 Seafarms Group Limited (ASX:SFG) (SFG Announcement No. 627) Seafarms Group Limited Year Ended 30 June 2019 Annual Report Presentation 2019 Enclosed is Seafarms Group’s Annual Report Presentation and Market Update for the financial year ended 30
Slide 2: About Seafarms Group
About Seafarms Group Seafarms Group Limited (ASX:SFG) is a sustainable aquaculture company, producing the premium Crystal Bay® Prawns and developing the Project Sea Dragon prawn aquaculture project in northern Australia. Seafarms Group uses environmentally sustainable culture processes and is curren
Slide 3: 2019 Full Year Result and Market Update
For personal use only 2019 Full Year Result and Market Update August 2019 The transformation of Seafarms from Australia’s largest prawn producer into a global low cost producer is underway Seafarms Group Limited (ASX:SFG) 1
Slide 4: Disclaimer
Disclaimer For personal use only This presentation is provided for information purposes only. The information in this presentation is in a summary form, does not propose to be complete and is not intended to be relied upon as advice to investors or other persons. The information contained in this pr
Slide 5: Contents
Contents For personal use only Overview of Seafarms Group FY19 Overview Operations Overview PSD – Project Overview PSD – Step 1 3
Slide 6: Overview of Seafarms Group
For personal use only Overview of Seafarms Group 4
Slide 7: Overview of Seafarms Group: Queensland Operations
Overview of Seafarms Group Queensland Operations For personal use only Seafarms Group Limited (SFG) aquaculture expertise has demonstrated a track record of growth and innovation. SFG is an ASX listed Australian agri‐food company, with a current market capitalisation of circa A$174 million: SFG’s Qu
Slide 8: Project Sea Dragon (PSD) Development Underway
Project Sea Dragon (PSD) Development Underway For personal use only Project Sea Dragon (PSD) is shovel ready – development underway. Major agreements already in place for 90 year operational life ‐ 10,000ha PSD project: Project Development Agreement with the NT Government; Indigenous Land Use Agreem
Slide 9: Overview: Project Sea Dragon
Overview: Project Sea Dragon De‐risked For personal use only Sovereign and regulatory Sponsorship & partnership Major Project Status with Australian, WA and NT Government; Secured industry partner investments totalling approximately Project Development Agreement (‘State Agreement’) with NT Governmen
Slide 10: Strong Government Support for Seafarms Project Sea Dragon
Strong Government Support for Seafarms Project Sea Dragon For personal use only Project Sea Dragon (PSD) is shovel ready, with continued strong government support by both major political parties at both State, Territory and Federal level. Policy support Bi‐partisan, Joint Select Committee on Norther
Slide 11: Tangible Government Support for Seafarms Project Sea Dragon
Tangible Government Support for Seafarms Project Sea Dragon For personal use only Seafarms has entered into a Project Development Agreement with Northern Territory Government (NTG) which provides a pathway for the grant to secure tenure over the proposed project sites for PSD and upgrades to numerou
Slide 12: Overview of Seafarms Group Team
Overview of Seafarms Group Team For personal use only Highly experienced management team across project development and management, aquaculture operations, marketing, distribution, finance and business development. Key SFG Management Team Members Ian Trahar Dr. Chris Mitchell Ian Leijer Dallas Donov
Slide 13: Financial Overview FY19
For personal use only Seafarms Financial Overview FY19 11
Slide 14: Seafarms Achieves Revenue of A$24.4M in FY19
Seafarms Achieves Revenue of A$24.4M in FY19 Supporting Continued Investment in PSD For personal use only As previously stated the Queensland operations are primarily intended to demonstrate and trial operating concepts for PSD – a commercial pilot approximately 40% of the size of the initial PSD de
Slide 15: Corporate Overview
Seafarms Group Limited Corporate Overview For personal use only ASX Listing Code SFG Market capitalisation (August 2019) Approx. $174M Fully Paid Shares on Issue 1.97B Cash, Debtors & Inventories (as at 30 June $35.9M 2019) Financial Year End 30 June Directors Shareholdings 40.7% (including Nissui)
Slide 16: Ongoing Improvements Across Operations and Productions Continues
For personal use only Ongoing Improvements Across Operations and Productions Continues 14
Slide 17: Overview of Northern Queensland Operations
Overview of Northern Queensland Operations For personal use only Queensland farms at Cardwell are a fully vertically integrated business and have been operational for over 30 years: Seafarms acquired Cardwell in early 2014, continued its banana prawn production and commenced production of its premiu
Slide 18: FY 2019 Production Overview
FY 2019 Production Overview For personal use only Production for the financial year was 1,770 tonnes, up 320 tonnes (22%) on FY2018. Product/species mix was changed to accommodate wild broodstock supply. Second half production in line with expectations with significantly larger animals (15% larger Y
Slide 19: Operational Improvements
Operational Improvements For personal use only A further A$3.9m of PSD R&D trials were undertaken during FY19 (A$3.4m in FY18). The farms significantly improved biosecurity outcomes with no biosecurity related losses. As a consequence of our on‐farm R&D, a major reconfiguration of Farms 1 & 2 has oc
Slide 20: Wild Broodstock – the Challenge
Wild Broodstock – the Challenge For personal use only Wild broodstock remain the dominant source of breeders for Queensland operations and the industry as a whole. Industry dependence on wild animals is driven by high cost, long‐lead times and scale of infrastructure required to develop a domesticat
Slide 21: Broodstock – Seafarms Solutions
Broodstock – Seafarms Solutions For personal use only Seafarms is solving the broodstock challenge through multiple approaches: 1. Domestication program at Flying Fish Point (Qld) as part of ARC Hub Program; 2. Developing better management and husbandry practices to improve fecundity of broodstock (
Slide 22: Domestication and Breeding
Domestication and Breeding For personal use only Exmouth Seafarms has produced its first generation of SPF families; This is the second generation of prawns produced at the facility; Significant milestone for Project Sea Dragon; 3rd generation by year end; FSC is at capacity. East coast The domestic
Slide 23: Breeding Research and Development
Breeding Research and Development For personal use only World leading research with James Cook University, CSIRO, University of Sydney and Australian Genome Research Facility (‘ARC Hub’): work is placed in commercial context focused at FFP hatchery and also on‐farm. Domesticated east coast prawns no
Slide 24: Workplace Health and Safety
Workplace Health and Safety For personal use only Further significant improvement in HSE performance. 59% reduction in incidents. 22
Slide 25: Seafarms Current Employment
Seafarms Current Employment For personal use only Seafarms Group Jobs Seafarms currently employs approximately 234 people. (Headcount) This employment snapshot 6 23 excludes: 21 Consultants and advisers (engineering, environmental, legal, accounting, tax); Directly paid positions with other organisa
Slide 26: Investment in Export Market Development
Investment in Export Market Development For personal use only Through its Queensland operations Seafarms commenced significant investment in export market development for PSD (>$4.5M in FY 2019). Noting all initiatives are retrofitted to equipment and processes for Australian market requirements, th
Slide 27: Nissui / Crystal Bay Prawn Export Packaging
Nissui / Crystal Bay Prawn® Export Packaging For personal use only 25
Slide 28: Domestic Marketing Initiatives
Domestic Marketing Initiatives For personal use only In consideration of the insight that freshness and Australian are key purchase drivers, the “100% Aussie Freshness” message was driven at point of purchase throughout the fresh Crystal Bay Tigers® and Crystal Bay Prawns® seasons. The winter Crysta
Slide 29: Project Sea Dragon (PSD) Overview
For personal use only Project Sea Dragon (PSD) Overview 27
Slide 30: PSD Achieves Key Milestones in FY19
PSD Achieves Key Milestones in FY19 For personal use only At the Exmouth Founder Stock Centre: construction is well advanced on upgraded water systems and the first building; The Board authorised the construction of an additional two buildings with associated tanks and systems to further advance the
Slide 31: PSD's Strong Competitive Advantages
PSD’s Strong Competitive Advantages For personal use only Strong competitive advantage over the Asian black tiger where sourcing white spot (WSSV) free, genetically diverse broodstock is becoming increasingly difficult. Australia enjoys a genetically diverse wild black tiger population that are dist
Slide 32: The US$200B Global Opportunity
The US$200B Global Opportunity For personal use only Global aquaculture market to grow by US$58B up to 2020 to over US$200B. Middle class population growth and per capita consumption increase of seafood particularly China. Growth of Asian middle class: Almost 5 fold increase in Chinese middle class
Slide 33: Seafood Industry Diversification a Key Growth Driver
Seafood Industry Diversification a Key Growth Driver For personal use only Globally the race for further seafood production diversification and more seafood product offering into the growth markets of Asia are gaining real momentum. This is being lead by the major seafood companies wanting to reduce
Slide 34: Legune Station an Ideal Location for Mass-Production of High-Quality Seafood
Legune Station an Ideal Location for Mass‐ Production of High‐Quality Seafood For personal use only Based upon study originally done by CSIRO from Pilbara to Cape York but Seafarms spent a further A$1M on a more detailed review. Pristine environment. No other aquaculture operations. Multiple crop lo
Slide 35: PSD to Achieve Estimated Revenue of +$3B per Year at Full Production
PSD to Achieve Estimated Revenue of +$3B per Year at Full Production For personal use only Complete end to end control of operations will allow SFG to ensure absolute biosecurity and process control. A fully vertically integrated project. Key Process Steps in PSD Prawn Aquaculture 1 2 3 4 5 Eggs, Ge
Slide 36: PSD and Queensland Operations Comparison
PSD and Queensland Operations Comparison For personal use only Table below highlights a broad comparison between PSD and Queensland operations. It should be noted that PSD yield assumption is considered conservative – given current Queensland operational results, particularly Farm 3 which more assem
Slide 37: Seafarms Farm 3 a Significant Upgrade on Farms 1 and 2
Seafarms Farm 3 a Significant Upgrade on Farms 1 and 2 For personal use only As highlighted below, from a production perspective Farm 3 more closely simulates PSD farms. Farm 1/2 Farm 3 PSD Age of Assets +30 years +19 years First new development in Australia since circa 2000 Produce own Post Larvae
Slide 38: PSD Step 1 Stage Well Underway
For personal use only PSD Step 1 Stage 1 Well Underway 36
Slide 39: Exmouth Founder Stock Centre Expansion
Exmouth Founder Stock Centre Expansion For personal use only Temporary shade‐cloth facilities built Three large indoor facilities last year to be decommissioned at (FSC 1 2 & 3) under Stage 2, with provision for an extra 3 construction indoor facilities 37
Slide 40: Construction Progress - Founder Stock Centre
Construction Progress ‐ Founder Stock Centre For personal use only The building works for building 1 at Exmouth is substantially complete – fitout has commenced. Earthworks for the additional two buildings has commenced. Water treatment systems continue to be developed and upgraded with installation
Slide 41: Commenced Construction of Broodstock Maturation Centre
Commenced Construction of Broodstock Maturation Centre For personal use only Local contractors have been engaged to perform earthworks and fencing for the site: Earthworks completed including access roads, inlet and outlet ponds and residential sites; Fencing 30% completed. Commenced construction of
Slide 42: Planned Early Works Completed at Legune Grow Out Centre
Planned Early Works Completed at Legune Grow Out Centre For personal use only Early Works undertaken to de‐ risk construction. Various sizes of rock have been quarried graded and stockpiled to ensure material is available for first bulk earthworks contracts. Access road built to enable Stock piles o
Slide 43: Progressing Design and Development of Processing Plant
Progressing Design and Development of Processing Plant For personal use only Design of the Processing Plant has Development and works approvals commenced – site plan completed. granted. Processing equipment specification for Ground water licence granted. the process plant is being refined based Depo
Slide 44: Key Approvals Schedule June 2019
Key Approvals Schedule June 2019 For personal use only 42
Slide 45: Phased Approach to Legune Grow Out Centre Implemented
Phased Approach to Legune Grow Out Centre Implemented For personal use only Stage 1 development is to be built in 3 steps. Step 1 totals 400 ha’s of ponds producing 5,000 tonnes per annum. The benefits of phasing Stage 1 development include: De‐risking construction – less complex initial development
Slide 46: De-risking PSD Construction
De‐risking PSD Construction For personal use only Seafarms continues to de‐risk the project through the front‐end engineering and design and procurement strategies. First construction elements: Expansion of the Exmouth facility to enable the planned and expected increase of the number of SPF familie
Slide 47: De-risking PSD Construction
De‐risking PSD Construction For personal use only Engineering team continues to refine design within approval envelopes to reduce capital: Greater use of locally produced standard elements (e.g. sheds); More accurate bathymetry at Bynoe Harbour has revealed easier and cheaper water intake. Fewer sim
Slide 48: Legune ILUA and Indigenous Employment
Legune ILUA and Indigenous For personal use only Employment Developed a 12 month Indigenous employment action plan; Seafarms contractors are meeting or exceeding agreed Indigenous employment targets. Business Accepted as an Associate member of the Northern Territory Indigenous Business Network (NTIB
Slide 49: Cost and Funding Status of PSD
Cost and Funding Status of PSD For personal use only Stage 1 Step 1 development (400 ha’s of ponds ‐ producing 5,000 tonnes per annum) has a total Project Construction Budget of $285M excluding cost contingency and escalation, less current PSD infrastructure spending of A$16M and includes over A$150
Slide 50: Contact Us
For personal use only Contact Us Seafarms Group Limited Level 11, 225 St Georges Terrace Perth WA 6000 PO Box 7312 Cloisters Square WA 6850 T. +61 8 9216 5200 E. info@seafarms.com.au