Grieg Seafood ASA. Company presentation. Andreas Kvame (CEO) Hordaland på børs griegseafood.com

Transcription

1 Grieg Seafood ASA Company presentation Andreas Kvame (CEO) Hordaland på børs 2015

2 Content Company overview Industry overview Financials Outlook 2

3 About Grieg Seafood One of the world s leading aquaculture companies, Salmon farming in North and South Norway, British Columbia (Canada) and Shetland (UK) High-quality products exported to large markets on the USA, Great Britain, Continental Europe and the Far East Headquartered in Bergen, Norway Approx. 630 employees 95,000 tonnes GWE* (capacity) 64,736 tonnes GWE production (2014) guidance of 72,000 tonnes GWE NOK 2,739m in revenues (2014) Listed on Oslo Børs in 2007 with a current market cap. of approx. NOK 3,182m** Grieg Holdings AS largest shareholder - 50% (Grieg family controls 55%). Marine Harvest ASA second largest shareholder 25.8% Note: * GWE = Gutted Weight Equivalent, ** 20 May

4 History and development Start up of farming activities and numerous acquisitions in Rogaland and Nordland, Norway. Participation in Fjord Seafood ASA and Marine Farms ASA 2001 Acquisition of Scandic in British Columbia (BC), Canada and GSF Chile (sold 04) 2006 Merger with Volden Group, Finnmark, Norway 2007 Acquisition of Target Marine in BC, Canada Acquisition of Hjaltland Seafarms, Shetland 2010 Established Ocean Quality together with Bremnes Seashore 2011 Acquisition of majority of Erfjord Stamfisk and licenses in Shetland 2012 Inaugural senior unsecured bond issue in December (GSF01) and subsequent listing on Oslo Børs in January Sale of shares in SalmoBreed, a leading salmon genetics company Awarded four new green licenses in Finnmark, Norway 4

5 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Shareholders and share information Shareholders No. shares % GRIEG HOLDINGS AS ,97 % DNB NOR MARKETS, AKSJEHAND/ANALYSE ,87 % NORDEA BANK NORGE ASA MARKETS EGENHANDELSKONTO DERIVATER 998 5,92 % KONTRARI AS ,87 % YSTHOLMEN AS ,62 % OM HOLDING AS ,34 % STATE STREET BANK AND TRUST CO ,16 % GRIEG SEAFOOD ASA ,12 % KVASSHØGDI AS ,90 % GRIEG SHIPPING II AS ,74 % SKANDINAVISKA ENSKILDA BANKEN AB ,74 % VERDIPAPIRFONDET PARETO NORDIC ,43 % STOREBRAND VEKST ,40 % THE BANK OF NEW YORK MELLON ,39 % VERDIPAPIRFONDET DNB SMB ,35 % HSBC BANK PLC ,34 % MP PENSJON PK ,25 % FONDSAVANSE AS ,25 % GRIEG LTD A/S ,19 % PICTET & CIE (EUROPE) S.A ,18 % Total 20 largest shareholders ,02 % Total other ,98 % Total numbers of shares ,00 % Source: Bloomberg 20 May 2015 GSF share price development (NOK) Share Price (NOK) 5

6 ONSHORE SEA WATER FRESH WATER ONSHORE GSF carrying the fish through the entire value chain Norway UK Canada Eggs from Broodfish Stage 1: Production from egg to finished smolt in fresh water (hatchery and juvenile stage). Roe hatches after 60 days + external suppliers Smolt Stage 2: After months in fresh water, growth in seawater (feeding) + external suppliers + external suppliers + external suppliers Farming Stage 3: Feeding, farming after additional months in sea water(or 4-6 kilo) Rogaland & Finnmark Harvesting Processing Stage 4: Slaughtering & gutting, then head off, filleting, portioning, then smoking, making ready meal or MAP + external suppliers + external suppliers External suppliers Note: MAP = Modified Atmosphere Sales Stage 5: End product distributed from Ocean Quality to final customers GSF-company GSF-company GSF-company 6

7 Organization Group CEO Andreas Kvame Finance/IT CFO - Atle H Sandtorv GSF 60% Bremnes 40% Farming COO Knut Utheim Sales Ocean Quality Arne Aarhus Biology Feed Norway Rogaland Finnmark BC Shetland UK A. KnudsenO R.T. Rikardsen S. Hawthorn S. Pettersen North America 7

8 Geographical diversity Finnmark Shetland Rogaland British Columbia 8

9 Production capacity Grieg Seafood ASA Grieg Seafood Rogaland Grieg Seafood Finnmark Grieg Seafood BC Grieg Seafood Hjaltland Licenses 19 farming 27 farming 21 farming 39 farming 106 farming 2015 guiding 20,500 tons GWE 22,000 tons GWE 13,000 tons GWE 16,500 tons GWE 72,000 tons GWE Growth pot. +17% +50% +38% +21% +32% Capacity ~24,000 tons GWE ~33,000 tons GWE ~18,000 tons GWE ~20,000 tons GWE ~95,000 tons GWE 9

10 Regions - Rogaland South West Norway 19 licences 125 employees 24,000 tonnes GWE (capacity) Primary export to the EU Trosnavåg Hognaland Erfjord Stamfisk Dyrholmen/Nordheimsøy Tallaksholmen Stjernelaks Lauplandsholmen Rennaren Q Q FYE 2014 FYE 2013 Harvest (gwt) Sales revenues (TNOK) EBIT (TNOK) EBIT/kg 5,82 9,52 6,09 9,60 of which Markets NOK/kg 1,02 0,40 0,55 0,58 Hestholmen Dale Stavanger Teistholmen Ocean Quality, Bergen Broodstock Freshwater Seawater Harvest Value added Sales 10

11 Regions - Finnmark Northern Norway (close to the North Cape) 27 licences 170 employees 33,000 tonnes GWE (capacity) Primary export to the EU and the Far East Hammerfest Nordkapp Adamselv Loppa Alta Q Q FYE 2014 FYE 2013 Harvest (gwt) Sales revenues (TNOK) EBIT (TNOK) EBIT/kg 4,71 15,94 7,78 9,39 of which Markets NOK/kg 0,35 0,05 0,30 0,13 Ocean Quality, Bergen Broodstock Freshwater Seawater Harvest Value added Sales 11

12 Regions British Columbia Western Canada 21 licences 105 employees 18,000 tonnes GWE (capacity) Primary export to the USA Esperanza Inlet Nootka Sound Clio Channel Okisollo Channel Walcan, Quadra Island Gold River Jervis Inlet Grieg, Egmont Sechelt Q Q FYE 2014 FYE 2013 Harvest (gwt) Sales revenues (TNOK) EBIT (TNOK) EBIT/kg 7,25-5,44-7,64-1,15 of which Markets NOK/kg 0,98 Ocean Quality Vancouver Broodstock Freshwater Seawater Harvest Value added Sales 12

13 Regions Shetland North of Scotland* 39 licences 160 employees 20,000 tonnes GWE (capacity) Primary export to the UK, USA and continental Europe Q Q FYE 2014 FYE 2013 Harvest (gwt) Sales revenues (TNOK) EBIT (TNOK) EBIT/kg 3,28 10,08 4,22 2,07 of which Markets NOK/kg 2,01 1,09 *Scotland: Ise of Skye, Argyll, South Uist Hillswick, Hammer Gonfirth Brindister Scalloway Setterness Whalsay Millbrook Wadbister Lerwick Broodstock Freshwater Seawater Harvest Value added Sales 13

14 Ocean Quality (est. 2010) Ocean Quality is the sales company of Grieg Seafood ASA (60%) and Bremnes Fryseri AS (40%). Handles all sale of GSF s fish harvested in Norway and UK, and from Q also Canada Ocean Quality/GSF is certified by Global G.A.P., Chain of Custody, and target ASC Chain of Custody 45 sales professionals in Norway/Scotland/BC Q developments: Margins trending up in Norway: Price achieved vs. market (NOS): 104% Stronger performance in Shetland: Price achieved vs. market (NOS + NOK 5.15): 103% New Sales organization in North America Price achieved vs. market (Urner and Barry Seattle mid): 110% Norway UK 14

15 Content Company overview Industry overview Financials Outlook 15

16 Top players in main producing regions Norway H.Q. UK H.Q. North America H.Q. Chile H.Q. Marine Harvest 264,000 Marine Harvest 50,000 Cooke Aquaculture 41,500 Lerøy Seafood 157,000 Scottish Salmon Company 27,000 Marine Harvest 28,000 Salmar 128,000 Scottish Seafarms 25,000 Cermaq 21,000 Cermaq 56,000 Grieg Seafood 18,000 Northern Harvest 16,000 Grieg Seafood 55,000 Cooke Aquaculture 17,400 Grieg Seafood 7,000 Nordlaks 37,000 Nova Sea 34,900 Alsaker Fjordbruk 29,000 Norway Royal Salmon 29,000 Bremnes Seashore 25,000 Marine Harvest 56,000 Cermaq 51,000 Pesquera Los Fiordos 50,400 Empresas AquaChile 47,700 Camanchaca 38,800 Salmones Multiexport 25,750 Australis Seafood 24,300 Blumar 23,200 Invermar 16,200 Cooke Aquaculture 15,300 Top players 814,900 Top players 137,400 Top players 113,500 Top players 348,650 Others 335,100 Others 2,600 Others 16,500 Others 81,350 Total 1150,000 Total 140,000 Total 130,000 Total 430,000 H.Q. = Harvested Quantity (2013 numbers) Source: Marine Harvest Fish Farming Handbook

17 Global salmon supply (000 tonnes wfe) 2,500 2,000 1,500 1, , ,006 1,144 1,198 1, e2015e Norway Chile Other Growth 25 % 20 % 15 % 10 % 5 % 0 % -5 % Global salmon production have increased by a CAGR of 9.2% over the last 20 years from 1994 to 2014 Norway and Chile are main drivers behind global salmon supply growth The 2 countries accounted for approx. 80% of all salmon production in 2014 Global salmon production increased by approx. 9% in 2014 Grieg Seafood/Kontali forecast a global supply growth of approx. 3% in 2015E Source: Company data, Kontali, Danske Bank Markets 17

18 Strong demand for salmon in most markets Salmon consumption has increased by an average of 6.2% annually over the last 10 years Prices have increased in this period, implying an even stronger demand Global salmon consumption increased by an estimated 8.3% in 2014 Strong growth in both new and established markets Strong growth in other category is driven by Brazil and China Russian consumption is negatively affected by the weak Rouble and the import ban for Norwegian and Scottish salmon 25 out of the 30 largest export markets for Norwegian salmon continued to grow in 2014 despite record strong prices Global salmon consumption growth (%) 15 % 10 % 5 % 0 % -5 % -10 % -15 % 5.1 % 9.4 % Global salmon consumption (k tonnes and share) China/HK; 86; 4 % Brazil; 100; 4 % Other; 431; 19 % Japan; 64; 3 % 2.7 % Russia; 145; 7 % 5.7 % 12.8 % % % 8.3 % 6.2 % EU USA Russia Japan Other Total -0.3 % CAGR E -9.2 % 7.9 % 2014E YOY growth EU; 989; 45 % Source: Kontali, Danske Bank Markets USA; 392; 18 % 18

19 Prices have been linked to supply growth Salmon prices have normally increased when salmon supply is below normalized growth It appears that salmon prices are balancing at around 7-8% global supply growth 2012 and 2013 stands out positively Prices decreased only 13% in 2012 despite a 22% global supply growth Prices increased by 49% to approx. NOK40/kg in 2013 on the back of approx. 2% global supply growth Supply balance in 14/ 15 disturbed by Russian import ban equal 6% demand drop Salmon prices (NOK/kg) and global supply growth % % % 10 % % % % % Salmon prices (NOK/kg) Global supply growth (%) Correlation between prices and growth 50 % % 30 % 20 % 10 % % -5 % 0 % 5 % 10 % 15 % 20 % 25 % -10 % % Source: FHL/NOS, Fishpool, Company data, Danske Bank Markets -30 % 19

20 General food prices have increased steadily Salmon Commodity food price index Salmon prices have not increased more than the general food price index over the last 20 years The general food inflation is positive for salmon farming due to a low feed conversion ratio Source: IndexMundi, Danske Bank Markets 20

21 Content Company overview Industry overview Financials Outlook 21

22 Key financials Solid key financials Revenue (NOKm) EBITDA before biomass adj (NOKm) NIBD (NOKm) Equity ratio 49% 41% 37% 43% 44% EBIT margin before biomass adj 26% 10% -9% 14% 13% ROCE 20% 7% -6% 12% 10% Harvest (GWE - tons) Turnover of NOK 2 665m in 2014 EU 48%, the UK 29%, the US 12%, Far east 9% & Russia/East Europe 2% Book equity NOK 2 222m in 2014 (2013: NOK 1 989m) EBIT before fair value adjustments amounted to NOK 341m and profit before tax of NOK 288m in 2014 Net working capital of NOK 1 745m (2013: NOK 1 667m) Overall positive EBIT/kg NOK/kg 60 EBIT/kg Salmon price Q1'10 Q1'11 Q1'12 Q1'13 Q1'14 NOK/kg

23 Key operational highlights Q1-15 All figures in NOK 1,000 Q Q Total operating income 1,033,616 1,026,275 Share of profit from joint venture 5,810 1,766 Change in inventories 92,974 12,062 Raw materials and consumables used -690, ,629 Salaries and personnel expenses -100,452-80,343 Other operating expenses -233, ,443 EBITDA 108, ,687 Depreciation and amortisation -37,351-32,155 Depreciation and amortisation of licenses Impairment adjustments on assets 0 0 EBIT before biomass adj 70, ,246 Fair value adj biological assets -112,793-50,983 Highlights Q1 15 EBIT before FV adjustment of biomass NOK 70m in Q (NOK 143m in Q1 2014) Stable seawater production in all regions Strong European market, although a small reduction in prices throughout the quarter attributable to trade sanctions against Russia and increased supply Falling prices in the American market EBIT/kg (incl. Ocean Quality (60%)) : NOK 4.9 Slight volume decrease (0.1%) 2015 volume guidance maintained at 72,000 MT. Andreas Kvame new CEO, starting within 1 June 2015 EBIT after biomass adj. -42,751 92,263 Share of profit from ass. companies 889 1,669 Net financial -25,361-22,177 Profit before tax and biomass adj 45, ,739 Profit before tax -67,223 71,756 Estimated taxation 15,838-15,406 Net profit in the period -51,385 56,350 23

24 Performance update Q In Rogaland, fish affected by PD have been harvested, and the proportion of rejects/prod B has been high. In Finnmark, low harvest volume has resulted in high cost, measured per kilo. EBIT (MNOK) Harvest EBIT/kg Rogaland 21, ,1 Finnmark -4, ,6 BC 5, ,9 Shetland -44, ,5 The results in BC reflect the occurrence of acute mortality in connection with a low oxygen level. Added to this, the US market remains weak which has resulted in low prices for BC fish. Fish harvested in Shetland have previously presented major gill challenges. This has resulted in a reduced average weight for parts of the biomass, which in turn has also led to low realised prices in the UK market 24

25 Main focus areas 1. Operational and biological performance Bio security and fish health Systematic approach to operational improvements From expansion to focus on continuous improvements 2. Reporting, Control, Management tools KPI based management system throughout organization Link to personal performance targets and incentives Integrate and harmonize 3. Human Capital Corporate culture Utilize strength as one company. Strive for improvements every day Sharing with pride (best practise, knowledge, information) 4. Sales and Market Become a market led company Shift sales focus from traders to end customers Utilize points of differentiation 25

26 Thank you! 26