Slide 1: Q2 2020 presentation
Q2 2020 presentation CEO: Ivan Vindheim CFO: Kristian Ellingsen 26 August 2020
Slide 2: Forward looking statements
Forward looking statements This presentation may be deemed to include forward-looking statements, such as statements that relate to Mowi’s contracted volumes, goals and strategies, including strategic focus areas, salmon prices, ability to increase or vary harvest volume, production capacity, expect
Slide 3: Highlights
Highlights • Q2 operational EBIT of EUR 99 million in line with trading update • Operations have been running close to normal despite Covid-19 − Maintaining strict measures, and securing health and safety of our employees • Farming spot prices in market currency subject to significant downward movem
Slide 4: Key financials
Key financials Mowi Group - main figures Q2 2020 Q2 2019 YTD Q2 2020 YTD Q2 2019 2019 Unaudited EUR million Operational revenue and other income 910.9 -11 % 1 021.4 1 795.7 2 000.9 4 135.4 Operational EBIT 1) 98.6 -53 % 211.2 207.9 407.4 720.9 EBIT 68.8 193.8 14.7 443.0 617.0 Cash flow from operatio
Slide 5: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices 10 7 9 6 8 USD per lbs (Miami and Seattle) 7 5 6 EUR per kg (Oslo) 4 5 3 4 3 2 2 1 1 0 0 2017 2018 2019 2020 Ref. price Norway EUR (NASDAQ average superior Oslo, GWT/kg) Ref. price Chile USD (Urner Barry average D-trim 3-4 lbs FOB Miami) Ref. price North Ameri
Slide 6: Price achievement, contract & superior share
Price achievement (1), contract & superior share 140 % 122 % 120 % 108 % 112 % 98 % 99 % 95 % 100 % 100 % 100 % 80 % 60 % 40 % 20 % 0% Norwegian Scottish Canadian Chilean Q2 2019 Q2 2020 Norwegian Scottish Canadian Chilean Q2-20 Contract share 41 % 57 % 0% 43 % Superior share 88 % 96 % 81 % 89 % Pag
Slide 7: Operational EBIT comparison
Operational EBIT comparison 250 211.1 3.0 -136.1 200 EUR million 150 3.7 15.8 98.6 100 1.0 50 0 Op EBIT Feed Farming Markets Consumer Other Op EBIT Q2 2019 Products Q2 2020 Page 7
Slide 8: Norway
Norway SALMON OF NORWEGIAN ORIGIN Operational Operational EBITEBIT Salmon Salmon of Norwegian of Norwegian Origin Origin EUR million Q2 2020 Q2 2019 Q2 Q220192020 vs Q2 vs Q2 2019 2020 Operational EBIT 60.1 126.1 140 EBIT 126.9 148.0 120 Harv est v olume (GWT) 56 598 51 368 100 80 Operational EBIT p
Slide 9: Norway: Operational EBIT/kg per region
Norway: Operational EBIT/kg per region 3.5 2.97 3.0 2.57 2.45 2.5 1.88 EUR per kg 2.0 1.43 1.5 1.16 1.06 1.0 0.5 0.27 0.0 South Mid North Total Q2 2019 Q2 2020 • Region South: High cost in the quarter due to low volumes and harvesting from poor performing sites − We expect improvements in Q3 2020 Pa
Slide 10: Norway: Sales contract portfolio
Norway: Sales contract portfolio 30 000 25 000 Contracted volumes (GWT) 20 000 15 000 10 000 5 000 0 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Realised contract volumes Contracted volumes (including prospects) • Stable contract volumes and prices for Q3 2020 and Q4 2020 Page 10 Note: Mowi Norw
Slide 11: Scotland
Scotland SALMON OF SCOTTISH ORIGIN Operational EBIT Salmon Operational of Scottish EBIT Salmon Origin of Scottish Origin EUR million Q2 2020 Q2 2019 Q2 2019 vs Q2 2020 Q2 2020 vs Q2 2019 Operational EBIT 14.3 46.5 50 EBIT 24.6 59.6 40 Harv est v olume (GWT) 14 572 15 941 30 Operational EBIT per kg (
Slide 12: Canada
Canada SALMON OF CANADIAN ORIGIN Operational EBITEBIT Operational Salmon of of Salmon Canadian Origin Canadian Origin EUR million Q2 2020 Q2 2019 Q2 Q2 2019 vs Q2 2020 2020 vs Q2 2019 12 Operational EBIT -7.7 10.4 8 EBIT -63.9 -8.6 4 Harv est v olume (GWT) 11 416 12 538 0 Operational EBIT per kg (EU
Slide 13: Chile
Chile SALMON OF CHILEAN ORIGIN Operational EBITEBIT Operational Salmon SalmonofofChilean Chilean Origin Origin EUR million Q2 2020 Q2 2019 Q2 2020 Q2 2019 vs vs Q2Q2 2019 2020 30 Operational EBIT 11.7 28.2 25 EBIT -49.2 17.9 Harv est v olume (GWT) 14 227 15 118 20 Operational EBIT per kg (EUR) 0.82
Slide 14: Ireland and Faroes
Ireland and Faroes SALMON OF IRISH ORIGIN SALMON OF FAROESE ORIGIN EUR million Q2 2020 Q2 2019 EUR million Q2 2020 Q2 2019 Operational EBIT 15.3 5.6 Operational EBIT 6.6 3.8 EBIT 5.6 11.8 EBIT 6.8 2.0 Harv est v olume (GWT) 4 002 2 089 Harv est v olume (GWT) 3 488 1 429 Operational EBIT per kg (EUR)
Slide 15: Consumer Products
Consumer Products (1) CONSUMER PRODUCTS EUR million Q2 2020 Q2 2019 Operating rev enues 652.4 648.7 Operational EBIT 23.3 7.5 Operational EBI T % 3.6% 1.2% Operational EBI T % VAP only 4.1% 1.5% EBIT 23.9 -12.7 Volume sold (tonnes prod. weight) 56 749 53 600 • All-time high profit on record high vol
Slide 16: Feed
Norway Feed FEED EUR million Q2 2020 Q2 2019 Operating rev enues 146.3 110.3 Operational EBIT 6.1 3.0 Operational EBI T % 4.1% 2.7% EBIT 5.9 3.1 Feed sold v olume 109 747 86 231 Feed produced v olume 144 501 104 389 • Good quarterly results for a low season Scotland: New plant − Steady and sound ope
Slide 17: Cost saving programme
Cost saving programme • The cost saving programme introduced in Development of price and “cost in box” per kg 2018 has delivered savings of EUR 118 million 7 across all business areas 6 EUR per kg − More than 700 separate initiatives 5 • However, cost is still increasing more than 4 4.47 inflation 3
Slide 18: Financials, Markets and Harvest volumes
Q2 2020 presentation Financials, Markets and Harvest volumes
Slide 19: Profit and Loss
Profit and Loss Mowi Group Q2 2020 Q2 2019 YTD Q2 2020 YTD Q2 2019 2019 EUR million Operational revenue and other income 910.9 -11 % 1 021.4 1 795.7 2 000.9 4 135.4 • Negative net fair Operational EBIT 1) 98.6 -53 % 211.2 207.9 407.4 720.9 value adjustment of Change in unrealized internal margin 12.
Slide 20: Financial position
Financial position Mowi Group 30.06.2020 30.06.2019 31.12.2019 EUR million Non-current assets 3 296.5 2 970.8 3 210.4 Current assets 2 351.3 2 601.8 2 629.6 Total assets 5 647.8 5 572.7 5 840.1 Equity 2 658.8 2 957.1 2 892.6 Non-current liabilities 2 225.1 1 880.6 2 171.2 Current liabilities 763.9 7
Slide 21: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Mowi Group Q2 2020 Q2 2019 YTD Q2 2020 YTD Q2 2019 2019 EUR million NIBD beginning of period -1 356.6 -1 014.8 -1 337.2 -1 037.2 -1037.2 • Payment of tax in Operational EBITDA* 140.2 248.0 289.5 481.2 874.4 Norway of EUR 36 Change in working capital -73.5 -29.
Slide 22: 2020 Cash Flow Guidance
2020 Cash Flow Guidance • Working capital build-up EUR ~90m − Support further organic growth • Capital expenditures EUR ~265m(*) − Freshwater investments EUR ~65m in Norway, Canada, Chile − Sea water expansion projects EUR ~20m in Norway, Scotland and Canada − Consumer Products: rebuild Kritsen fact
Slide 23: Overview financing
Overview financing • Total committed financing of EUR 1,956 million out of which approximately EUR 550 million in cash and undrawn lines • Long term NIBD target EUR 1,400m • Bank facility: EUR 1,406m Facility Agreement − Tenor 5 years (Maturity: June 2022) − Covenant: 35% equity ratio (adjusted for
Slide 24: Supply development
Supply development Estimated volumes Compared to Q2 2019 Est. volumes Suppliers Q2 2020 Q2 2019 Volume % Q1 2020 Norway 270 500 277 400 -6 900 -2.5% 274 000 Scotland 41 000 40 700 300 0.7% 29 500 Faroe Islands 20 100 16 700 3 400 20.4% 15 600 Other Europe 10 100 8 300 1 800 21.7% 9 000 Total Europe
Slide 25: Development in reference prices
Development in reference prices Q2 2020 Change vs Q2 2020 Change vs Market Q2 2019 EUR Q2 2019 Norway (1) EUR 5.24 -18.5% EUR 5.24 -18.5% Notes: Chile (2) USD 4.03 -24.4% EUR 3.67 -22.9% (1) NASDAQ average superior GWE/kg (gutted weight equivalent) Chile, GWT (3) USD 4.11 -35.4% EUR 3.73 -34.0% (2)
Slide 26: Global volume by market
Global volume by market Estimated volumes Compared to Q2 2019 Est. volumes 12 month comparison Markets Q2 2020 Q2 2019 Volume % Q1 2020 LTM PTM % EU 242 900 236 400 6 500 2.7% 221 800 1 017 000 978 800 3.9% Russia 12 600 15 400 -2 800 -18.2% 17 800 77 300 79 400 -2.6% Other Europe 20 000 20 300 -300
Slide 27: Industry supply growth 2020e
Industry supply growth 2020e 2017 2018 2019 2020 Estim ates 2020 GWT (1,000) Low Y/Y grow th High Y/Y grow th Norw ay UK 1 087 159 1 128 138 1 200 165 1 232 158 1 221 155 2% -6 % 1 243 161 4% -3 % • 2020 guidance: Faroe Islands Other Europe* 72 26 65 25 78 36 77 43 75 41 -4 % 14 % 79 45 2% 25 % Mode
Slide 28: Mowi volume guidance
Mowi volume guidance Atlantic salmon 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 GWT (1,000) Actual Actual Actual Actual Actual Actual Actual Actual Guidance Guidance Guidance Norway 230.5 56.1 51.4 63.4 66.0 236.9 50.5 56.6 79.0 73.9 260.0 Scotland 38.4 15.8 15.9
Slide 29: Outlook
Outlook • Covid-19 has impacted short-term market dynamics and prices negatively, however, long-term fundamentals remain unchanged • Mowi continues to capitalise on current shift in demand from foodservice to retail through its integrated value chain • Expecting a volatile autumn driven by seasonali
Slide 30: Appendix
Q2 2020 presentation Appendix
Slide 31: Dividend policy
Dividend policy • The quarterly dividend level shall reflect the present and expected future cash flow generation of the Company • A target level for net interest-bearing debt is determined, reviewed and updated on a regular basis • When the target is met, at least 75% of the annual free cash flow a
Slide 32: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY Min hedging rate Max hedging rate (1) • Q3 2020 contract shares (% of guided volume): Norway (2) 0% 50 % − Norway 25% Scotland 0% 75 % Canada 0% 30 % − Scotland 58% (2) Chile 0% 50 % Ireland 0% 100 % − Canada 0% Faroes 0% 30 % − Chile
Slide 33: Quarterly segment overview
Quarterly segment overview SOURCES OF ORIGIN QTD EUR million Norway Scotland Canada Chile Ireland Faroes Other 1) Group OPERATIONAL EBIT FARMING 40.4 8.1 -12.9 0.0 14.8 5.5 55.9 SALES AND MARKETING Markets 6.4 1.8 3.5 1.9 0.6 1.1 0.1 15.3 Consumer Products 7.2 4.5 1.7 9.8 0.0 0.0 0.2 23.3 SUBTOTAL 5
Slide 34: YTD segment overview
YTD segment overview SOURCES OF ORIGIN YTD EUR million Norway Scotland Canada Chile Ireland Faroes Other 1) Group OPERATIONAL EBIT FARMING 122.7 11.1 -7.7 7.5 13.7 9.9 157.3 SALES AND MARKETING Markets 12.5 3.5 5.4 3.1 0.4 1.8 0.3 27.1 Consumer Products 0.0 5.5 1.8 17.7 0.0 0.0 0.8 25.8 SUBTOTAL 135
Slide 35: Development in harvest volumes
Development in harvest volumes GWT 2016 2017 2018 2019 2020E (1,000) Total Total Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3E Q4E Total Norway 236.0 210.2 230.5 56.1 51.4 63.4 66.0 236.9 50.5 56.6 79.0 73.9 260.0 Scotland 45.0 60.2 38.4 15.8 15.9 19.6 14.0 65.4 9.0 14.6 17.0 15.4 56.0 Canada 43.3 39.4 39.3 9.8
Slide 36: Cash flow guidance and historic developments
Cash flow guidance and historic developments Net capital expenditure (*) Net working capital 350 160 Maintenance level 300 140 250 120 100 200 EUR million EUR million 80 150 60 100 40 50 20 0 0 2015 2016 2017 2018 2019 2020E 2015 2016 2017 2018 2019 2020E Financial commitments and cost of debt (**)
Slide 37: Nova Sea
Nova Sea Harv est v olume (GWT) EBI T per kg NI BD EURm Ownership % 2018 2019 Q2 2019 Q2 2020 2018 2019 Q2 2019 Q2 2020 Q2 2020 Nova Sea 48 % 37 879 45 962 12 189 9 245 2.66 2.30 3.15 1.70 -67.1 • Leading integrated salmon producer in Northern Norway − 33.33 wholly owned licenses − 4 partly owned li
Slide 38: Debt distribution and interest rate hedging
Debt distribution and interest rate hedging CURRENCY DEBT 2020-2021 2021-2022 2022-2023 (2) 30/06/2020 Nominal value Fixed rate (3) Nominal value Fixed rate (3) Nominal value Fixed rate(3) EUR m 1 313.0 380.0 2.13 % 380.0 2.20 % - 0.00 % USD m 60.0 78.3 2.31 % 78.3 2.31 % 60.0 4.13 % GBP m 40.0 23.5
Slide 39: Hedging and long term currency exposure - policies
Hedging and long term currency exposure - policies • EUR/NOK − Mowi shall hedge between 0% and 30% of its assumed annual expenses in NOK against the EUR with a horizon of two years. The annual hedging shall be evenly distributed across the months of the year • USD/CAD − Mowi shall hedge between 0% a
Slide 40: Strategic currency hedging
Strategic currency hedging EUR/NOK USD/CAD STRATEGIC CURRENCY HEDGING MEUR Rate MUSD Rate 2020 99.6 9.91 14.4 1.33 2021 199.2 10.28 28.8 1.32 2022 99.6 10.92 12.0 1.37 P/L effect of contracts realized in Q2 (MEUR) -4.3 MEUR Market value 31/03/2020 -56.1 Change 31.2 Market value 30/06/2020 -24.9 DESI
Slide 41: Thank you
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