Grieg Seafood ASA · OSL:GSF
Grieg Seafood ASA — Q2 2021 Earnings Presentation
39 slides from Grieg Seafood ASA's earnings presentation, Aug 18, 2021
Slide 1: Q2 Presentation 2021
en Q2 PRESENTATION 2021
Slide 2: Agenda
Grieg Seafood ASA Q2 2021 Agenda • HIGHLIGHTS • OPERATIONAL REVIEW • FINANCIAL REVIEW • OUTLOOK & CONCLUDING REMARKS 18.08.2021 2
Slide 3: Highlights Q2 2021
Grieg Seafood ASA Q2 2021 Highlights Q2 2021 • EBIT before production fee and fair value adjustment of NOK 44 million (47 million) ◦ Downgrades, harvest weight and harvest profile impacted price achievement in Finnmark by NOK -41 million ◦ Operational cost in Newfoundland, including write down relat
Slide 4: Agreement to sell Shetland
Grieg Seafood ASA Q2 2021 Agreement to sell Shetland • Agreement with Scottish Sea Farms to sell GSF Shetland for GBP 164 million • Shetland operations showing good performance following extensive restructuring and operational improvements • Transaction approved by EU competition authorities - await
Slide 5: Improvement- and growth initiatives
Grieg Seafood ASA Q2 2021 Improvement- and growth initiatives • Post smolt to reduce time in sea, improve • Mitigation to reduce biological risk of ISA • Algae mitigation, digital monitoring and biology, higher utilization of MAB and lower and winter ulcers aeration systems cost ◦ Change in vaccinat
Slide 6: Newfoundland main growth driver
Grieg Seafood ASA Q2 2021 Newfoundland main growth driver Harvesting goals 1 000 tonnes • Significant growth potential, targeting 15 000 tonnes in 2025 50 000 • Strengthens exposure to the world’s largest and fastest growing market for Atlantic salmon 40 000 ◦ Synergies in integration with existing
Slide 7: Markets
Grieg Seafood ASA Q2 2021 MARKETS 18.08.2021 7
Slide 8: Quarterly market development
Grieg Seafood ASA Q2 2021 Quarterly market development Market consumption (tonnes Q2 2021 Q2 2020 %-change Market developments HOG) EU 247 100 242 000 2% • Demand driven by supermarkets and grocery stores USA 137 900 119 500 15% • Stable demand in Europe and Asia vs Q2 2020 • Strong demand increase
Slide 9: Spot market price development
Grieg Seafood ASA Q2 2021 Spot market price development NASDAQ SALMON INDEX (NOK/KG) 90 80 70 60 50 40 30 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 2017 2018 2019 2020 2021 The NQSALMON weekly average is presented less distributor margin of NOK/KG 0.75. 18.08.2021 9
Slide 10: Reduced supply growth in 2021
Grieg Seafood ASA Q2 2021 Reduced supply growth in 2021 GLOBAL HARVEST GROWTH FARMED ATLANTIC SALMON (Y-O-Y) EXPECTED VOLUME CHANGE BY COUNTRY (1 000 tonnes WFE) 62 59 59 57 60 22% 54 2 800 47 2 786 50 109 -116 41 30 39 40 40 2 712 4 9% 2 700 7% 25 6% 5% 30 4% 5% 2% 3% 20 8% -15% 3% 17% 19% 2 600 10
Slide 11: Downstream strategy supported by in house market organization
Grieg Seafood ASA Q2 2021 Downstream strategy supported by in Repositioning from being a supplier house market organization to an innovative partner In house sales- and market organization fully operational from Q2 handling 100% of harvested volume Objectives and results • Improve supply chain manag
Slide 12: Operations
Grieg Seafood ASA Q2 2021 OPERATIONS 18.08.2021 12
Slide 13: GSF Rogaland
Grieg Seafood ASA Q2 2021 GSF Rogaland NOK million Q2 2021 Q1 2021 Q2 2020 YTD 2021 YTD 2020 Harvest volume (tonnes GWT) 7 783 5 346 4 527 13 129 11 471 Q2 2021 highlights Revenues 435.2 273.0 243.5 708.2 680.2 Revenue/kg (NOK) 55.9 51.1 53.8 53.9 59.3 • Price achievement negatively impacted by fixe
Slide 14: GSF Finnmark
Grieg Seafood ASA Q2 2021 GSF Finnmark NOK million Q2 2021 Q1 2021 Q2 2020 YTD 2021 YTD 2020 Harvest volume (tonnes GWT) 4 780 7 385 6 280 12 165 13 108 Q2 2021 highlights Revenues 232 313 325 544 672 Revenue/kg (NOK) 48.4 42.3 51.7 44.7 51.3 • Price achievement negatively impacted by fixed price co
Slide 15: GSF BC
Grieg Seafood ASA Q2 2021 GSF BC NOK million Q2 2021 Q1 2021 Q2 2020 YTD 2021 YTD 2020 Harvest volume (tonnes GWT) 5 249 853 9 332 6 101 11 876 Revenues 348.5 51.8 479.9 400.3 658.7 Q2 2021 highlights Revenue/kg (NOK) 66.4 60.8 51.4 65.6 55.5 • Good price achievement driven by high superior share (8
Slide 16: Newfoundland project review
Grieg Seafood ASA Q2 2021 Newfoundland project review • Fully operational hatchery, nursery and smolt units • Eight seawater licenses and one freshwater license secured, four more in application • One cycle of freshwater farming completed. Both biology and RAS facility performed well • Postponed smo
Slide 17: Financials
Grieg Seafood ASA Q2 2021 FINANCIALS 18.08.2021 17
Slide 18: Profit & loss
Grieg Seafood ASA Q2 2021 Profit & loss Profit & loss from continued operations (NOK million) Q2 2021 Q2 2020 YTD Q2 2021 YTD Q2 2020 Sales revenues 1 122.1 1 169.4 1 781.9 2 328.1 • Increased market prices vs Q2 2020, somewhat offset by EBIT before production fee and fair value adj. of 43.5 47.3 27
Slide 19: Free liquidity
Grieg Seafood ASA Q2 2021 Movement in free liquidity 31.03.2021 to 30.06.2021 (NOK million) Free liquidity • Free liquidity end of Q2 2021 of NOK 900 million 189 ◦ NOK 204 million in cash 142 92 894 748 -183 ◦ Unutilized revolving credit facility and overdrafts of NOK 690 million -93 ◦ Factoring arr
Slide 20: Investments
Grieg Seafood ASA Q2 2021 Investments • Gross investments CAPEX 2021 by region* Biomass WC investments (net)* Estimated at approx. NOK 700 million full-year 2021 NOK million • Rogaland • NOK 100 million in estimated CAPEX Maintenance CAPEX Growth Site and brood stock upgrade biomass net working capi
Slide 21: Financials summary
Grieg Seafood ASA Q2 2021 Financials summary Net Interest-bearing debt (NIBD) Key figures according to covenant • NIBD/harvest 28 as at 30 June 2021 (NIBD net of the enterprise value of the Shetland transaction) 4500 Covenants 4000 • Equity ratio 42% measured according to covenants (requirement mini
Slide 22: Outlook & Concluding Remarks
Grieg Seafood ASA Q2 2021 OUTLOOK & CONCLUDING REMARKS 18.08.2021 22
Slide 23: Outlook
Grieg Seafood ASA Q2 2021 Outlook Sales & Market Operations Guiding Rogaland Finnmark BC GSF Group (tonnes GWT) Q1 2021 5 350 7 380 850 13 600 • Expect retail demand to stay strong and • Optimize production, focusing on fish HoReCa market to open gradually health & welfare Q2 2021 7 780 4 780 5 250
Slide 24: Summary of the quarter
Grieg Seafood ASA Q2 2021 Summary of the quarter • Agreement to sell Shetland, concentrating operations and strengthening financials to pursue long term strategy • Strong production and good price achievement in British Columbia • Norway impacted by downgrades, fixed price contracts and increased co
Slide 25: Upcoming financial results
Q2 2021 UPCOMING FINANCIAL RESULTS Q3 2021 3 November 2021 Q4 2021 16 February 2022 The Company reserves the right to make amendments to the financial calendar. 18.08.2021 25
Slide 26: Appendix Q2 2021
Grieg Seafood ASA Q2 2021 APPENDIX Q2 2021 18.08.2021 26
Slide 27: Our approach to sustainable business
Grieg Seafood ASA Q2 2021 Our approach to sustainable business Our pillars PROFIT & HEALTHY SUSTAINABLE LOCAL INNOVATION OCEAN FOOD PEOPLE COMMUNITIES Topics • Seafood demand • Fish health and welfare • Safe and healthy food • Human rights and ethics • Local value creation • Economic productivity •
Slide 28: Profit & loss
Grieg Seafood ASA Q2 2021 NOK 1 000 Q2 2021 Q2 2020 YTD 2021 YTD 2020 FY 2020 Continuing operations Sales revenues 1 122 073 1 169 420 1 781 904 2 328 062 4 384 357 Other income 8 141 9 587 27 479 22 711 23 902 Share of profit from associates 176 -1 037 459 -435 3 350 Raw materials and consumables u
Slide 29: Comprehensive income
Grieg Seafood ASA Q2 2021 NOK 1 000 Q2 2021 Q2 2020 YTD 2021 YTD 2020 FY 2020 Net profit for the period 124 037 -49 533 240 472 -494 509 -514 820 Net other comprehensive income to be reclassified to profit/loss in subsequent periods Currency effect on investment in subsidiaries 30 347 -53 183 40 526
Slide 30: Financial position - assets
Grieg Seafood ASA Q2 2021 NOK 1 000 30.06.2021 30.06.2020 31.12.2020 Deferred tax assets 36 340 56 427 29 293 Goodwill 657 269 670 604 638 019 Licenses incl. warranty licenses 1 533 314 1 621 216 1 508 452 Other intangible assets incl. exclusivity agreement 38 838 51 175 38 015 Property, plant and e
Slide 31: Financial position - equity and liabilities
Grieg Seafood ASA Q2 2021 NOK 1 000 30.06.2021 30.06.2020 31.12.2020 EQUITY AND LIABILITIES Share capital 453 788 453 788 453 788 Treasury shares -4 686 -4 855 -4 686 Contingent consideration (acquisition of Grieg Newfoundland AS) 701 535 701 535 701 535 Retained earnings and other equity 3 519 369
Slide 32: Cash flow
Grieg Seafood ASA Q2 2021 NOK 1 000 Q2 2021 Q2 2020 YTD 2021 YTD 2020 FY 2020 EBIT after production fee and fair value adjustment of biological assets 148 312 94 555 283 664 -200 601 -56 648 Depreciation and amortization 98 198 94 434 185 789 185 477 368 874 Gain/loss on sale of property, plant and
Slide 33: Cash flow
Grieg Seafood ASA Q2 2021 Cash flow 189 • Net cash flow from operations NOK 372 million 142 • EBITDA contributed positively with NOK 142 million -183 (NOK 142 million in Q2 2020) • Changes in accounts inventory, accounts receivable and other 208 92 204 receivables, and accounts payable of NOK 189 mi
Slide 34: Financials
Grieg Seafood ASA Q2 2021 NIBD (NOK million)* 30.06.2021 30.06.2020 31.12.2020 Green bond loan 1 500 1 000 1 500 Financials Term loan and revolving credit and other non- current interest bearing liabilities Leasing liabilities** 2 513 756 2 120 883 2 023 685 • In November 2020, Grieg Seafood was gra
Slide 35: Share information
Grieg Seafood ASA Q2 2021 Share information THE 20 LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA AT SHARE- NO. OF SHARES 30.06.2021 HOLDING Grieg Aqua AS 56 914 355 50.17% Number of shares Folketrygdfondet 4 879 366 4.30% • 113 447 042 shares incl. treasury shares OM Holding AS 4 713 957 4.16% Ystholmen
Slide 36: Our organization
Grieg Seafood ASA Q2 2021 Grieg Seafood farms Our organization Sales GSF Headquarters 2 3 1 5 4 Rogaland Finnmark Shetland British Columbia Tonnes Tonnes Tonnes Tonnes 40 000 40 000 40 000 40 000 30 000 30 000 30 000 30 000 20 000 20 000 20 000 20 000 10 000 10 000 10 000 10 000 0 0 0 0 2017 2018 20
Slide 37: Strong focus on improved biological performance
Grieg Seafood ASA Q2 2021 STRONG FOCUS ON IMPROVED BIOLOGICAL PERFORMANCE Area management People and routines Post-smolt GSF precision farming Sea lice control Algae prevention agreements • Strong competence • More robust when placed • Operational and strategic • Preventive measures: • Aeration syst
Slide 38: Our priorities
Grieg Seafood ASA Q2 2021 Our priorities STREAMLINE SECURE SUSTAINABILITY CREATE IMPROVE AND EXECUTE FINANCIAL AT THE CORE OF SHAREHOLDER PROFITABILITY GROWTH CAPACITY OUR BUSINESS VALUE 18.08.2021 38
Slide 39: Key metrics and targets
Grieg Seafood ASA Q2 2021 Key metrics FY 2018 FY 2019 FY 2020* YTD 2021* 80 000 tonnes in 2021, 130 000 tonnes in 2025 Harvest volume 74 623 tonnes 82 973 tonnes 71 142 tonnes 31 395 tonnes (ex Shetland) NOK 40/kg (Norway) in 2022 NOK 43.3/kg NOK 46.0/kg Farming cost NOK 43.1/kg NOK 43.5/kg CAD 7/kg