Mowi ASA · OSL:MOWI
Mowi ASA — Q1 2023 Earnings Presentation
42 slides from Mowi ASA's earnings presentation, May 10, 2023
Slide 1: Q1 2023 presentation
Q1 2023 presentation CEO: Ivan Vindheim CFO: Kristian Ellingsen 10 May 2023
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 • Record-high revenues and Operational EBIT in the first quarter on strong operational performance combined with seasonal record-high salmon prices – Revenues of EUR 1,362 million and Operational EBIT of EUR 322 million • Blended farming cost up somewhat from Q4 due to last year’s inflati
Slide 4: Key financials
Key financials Mowi Group - main figures Q1 2023 Q1 2022 2022 Unaudited EUR million Operational revenue and other income 1,362.4 24% 1,095.3 4,946.0 • All-time high Operational EBIT Operational EBITDA 1) 367.4 248.9 1,179.4 Operational EBIT 1) 321.8 56% 206.7 1,005.1 Net interest-bearing debt (NIBD)
Slide 5: Salmon prices – weekly reference prices
Salmon prices – weekly reference prices • Reference prices in Q1 2023 up by 18% YoY in Q1-23 prices GWT/kg Europe, down 1% in Miami and up 6% in • Chile USD 8.10(1) (8.14) Boston/New York • Canada USD 11.40(1) (10.81) Note (1) Back-to-Plant equivalent prices Americas Europe Chilean D-trim lbs, Canad
Slide 6: Price achievement and contract share
Price achievement and contract share 120% • Price achievement 100% 102% 6% below the 97% 99% 96% 100% 93% reference price 89% 90% – Seasonally record- 80% high spot prices higher than 60% contract prices 40% – Winter sores in Norway 20% 0% Norwegian Scottish Chilean Canadian Q1 2022 Q1 2023 Norwegia
Slide 7: Operational EBIT comparison
Operational EBIT comparison • Best ever Operational EBIT • Strong performance in all business areas Page 7
Slide 8: Norway
Norway SALMON OF NORWEGIAN ORIGIN Operational EBITEBIT Operational Salmon Salmonof of Norwegian NorwegianOrigin Origin EUR million Q1 2023 Q1 2022 Q1 Q12022 vs Q1 2023 2023 vs Q1 2022 Operational EBIT 244.7 151.4 300 EBIT 267.1 199.9 250 Harvest volume (GWT) 65 627 59 424 200 Operational EBIT per kg
Slide 9: Norway: Operational EBIT/kg per region
Norway: Operational EBIT/kg per region 5.0 • Region North: Good margin on higher prices and 4.5 4.48 strong operational performance. 3.93 4.0 3.72 3.73 • Region Mid: No harvesting in March when prices 3.5 peaked. Earnings impacted by biological issues. Turnaround plan has been prepared. EUR per kg 2
Slide 10: Norway: Sales contract portfolio
Norway: Sales contract portfolio 25,000 20,000 Contracted volumes (GWT) 15,000 10,000 5,000 0 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Realised contract volumes Contracted volumes (including prospects) • 26% contract share for the first quarter • Second quarter expected to be around 29%, with
Slide 11: Scotland
Scotland SALMON OF SCOTTISH ORIGIN Operational OperationalEBIT EBITSalmon ofScottish Salmon of ScottishOrigin Origin EUR million Q1 2023 Q1 2022 Q1Q12022 2023vsvsQ1 Q1 2023 2022 Operational EBIT 26.6 10.7 35 EBIT 39.1 1.2 30 Harv est v olume (GWT) 11 373 10 541 25 Operational EBIT per kg (EUR) 2.34
Slide 12: Chile
Chile SALMON OF CHILEAN ORIGIN Operational Operational EBITSalmon EBIT Salmon of of Chilean ChileanOrigin Origin Q1 2023 vs Q1 2022 EUR million Q1 2023 Q1 2022 Q1 2022 vs Q1 2023 Operational EBIT 15.9 20.1 30 EBIT 29.1 19.3 25 Harv est v olume (GWT) 10 588 16 017 20 Operational EBIT per kg (EUR) 1.5
Slide 13: Canada
Canada SALMON OF CANADIAN ORIGIN Operational EBIT Operational Salmon EBIT Salmon ofofCanadian CanadianOrigin Origin EUR million Q1 2023 Q1 2022 Q1Q12022 vsvs 2023 Q1Q12023 2022 Operational EBIT 16.4 22.5 40 35 EBIT 27.7 17.1 30 Harv est v olume (GWT) 7 579 8 759 25 Operational EBIT per kg (EUR) 2.17
Slide 14: Ireland and Faroes
Ireland and Faroes SALMON OF IRISH ORIGIN SALMON OF FAROESE ORIGIN EUR million Q1 2023 Q1 2022 EUR million Q1 2023 Q1 2022 Operational EBIT 1.3 2.5 Operational EBIT 7.0 1.8 EBIT 3.2 10.8 EBIT 5.3 0.4 Harv est v olume (GWT) 781 667 Harv est v olume (GWT) 2 130 1 192 Operational EBIT per kg (EUR) 1.68
Slide 15: Iceland (Arctic Fish)
Iceland (Arctic Fish) SALMON OF ICELANDIC ORIGIN Excellent growth and living conditions for salmon in Iceland EUR million Q1 2023 Q1 2022 Operational EBIT 10.3 0.0 EBIT 5.7 0.0 Harv est v olume (GWT) 4 866 0 Operational EBIT per kg (EUR) 2.12 0.00 - of which Feed 0.00 0.00 - of which Markets 0.00 0.
Slide 16: Consumer Products
Consumer Products CONSUMER PRODUCTS EUR million Q1 2023 Q1 2022 Operating rev enues 854.5 725.4 Operational EBIT 37.2 21.3 Operational EBI T % 4.3% 2.9% Operational EBI T % VAP only 4.8% 4.0% EBIT 37.0 19.2 Volume sold (tonnes prod. weight) 53 184 56 414 • Seasonally record-high results on strong op
Slide 17: Feed
Norway Feed FEED EUR million Q1 2023 Q1 2022 Operating rev enues 196.0 135.3 Operational EBITDA 6.1 0.6 Operational EBIT 2.2 -3.5 Operational EBI TDA % 3.1% 0.5% Operational EBI T % 1.1% -2.6% EBIT 2.2 -3.5 Feed sold v olume 93 994 88 184 Feed produced v olume 108 577 87 762 Scotland • First quarter
Slide 18: Financials, Markets and Harvest volumes
Q1 2023 presentation Financials, Markets and Harvest volumes
Slide 19: Profit and Loss
Profit and Loss Mowi Group Q1 2023 Q1 2022 2022 EUR million Operational revenue and other income 1,362.4 24% 1,095.3 4,946.0 • Positive net fair value adjustment of Operational EBIT 1) 321.8 56% 206.7 1005.1 biomass of EUR 54 million mainly Change in unrealized internal margin Gain/loss from derivat
Slide 20: Resource rent tax in Norway with effect from Q1 2023
Resource rent tax in Norway with effect from Q1 2023 22% 22% 22% 22% + 35% = 57% 22% 22% Breeding Smolt Feed Products & Seawater Harvesting Processing Customer • Integrated value chain which has been part of same tax regime until 2023 • Only seawater phase in scope for resource rent tax • Consultati
Slide 21: Significant weakening of NOK
Significant weakening of NOK • Significant weakening of NOK YTD 2023 (EUR 13.2%, USD 9.7%) EURNOK 12.0 • Mowi is a EUR company 11.5 − Remove currency risk − Historically, EUR funding has also been cheaper EURNOK 11.0 • Mowi Norway hedged away FX gain related to 10.5 timing difference between revenue
Slide 22: Financial position
Financial position Mowi Group EUR million 31.03.2023 31.03.2022 31.12.2022 • Strong financial position Non-current assets 4 054.8 3 522.6 4 042.6 Current assets 3 414.7 2 812.3 3 488.7 Total assets 7 469.7 6 335.0 7 531.3 Equity 3 829.9 3 272.7 3 687.1 Non-current liabilities 2 379.1 2 064.6 2 355.7
Slide 23: Cash Flow and Net Interest Bearing Debt
Cash Flow and Net Interest Bearing Debt Mowi Group Q1 2023 Q1 2022 2022 EUR million NIBD beginning of period* -1 758.9 -1 257.3 -1 257.3 • Strong cash flows Operational EBITDA* 367.4 248.9 1179.4 Change in working capital 15.8 -10.9 -491.4 Taxes paid -40.2 -22.2 -118.3 Other adjustments -2.7 -6.8 -1
Slide 24: 2023 Cash Flow Guidance
2023 Cash Flow Guidance • Working capital release of EUR 100m due to temporary build-up last year • Capital expenditure EUR ~380m (including Arctic Fish EUR ~ 40m) – Freshwater investments EUR ~ 70m – Seawater investments EUR ~ 50m – Processing / Sales & Marketing: New processing plants/upgrades, au
Slide 25: Overview financing
Overview financing • EUR 200 million increase of bank facility Share of sustainable funding • Bank Facility: EUR 2,000m sustainability-linked facility – 5 years facility (Maturity: September 2026) – Covenant: 35% equity ratio (adjusted for IFRS 16 leasing effects) – Accordion option: EUR 100m – Lend
Slide 26: Supply development
Supply development Estimated volumes Compared to Q1 2022 Est. volumes Suppliers Q1 2023 Q1 2022 Volume % Q4 2022 Norway 286,100 306,700 -20,600 -6.7% 404,500 Scotland 34,200 29,700 4,500 15.2% 35,000 Faroe Islands 17,200 20,900 -3,700 -17.7% 27,200 Other Europe 14,100 17,600 -3,500 -19.9% 14,500 Tot
Slide 27: Global volume development
Global volume development Estimated volumes Compared to Q1 2022 Est. volumes 12 month comparison Markets Q1 2023 Q1 2022 Volume % Q4 2022 LTM PTM % EU+UK 222,800 250,300 -27,500 -11.0% 326,300 1,116,100 1,136,600 -1.8% Russia 12,800 13,400 -600 -4.5% 14,900 48,100 75,500 -36.3% Other Europe 24,400 2
Slide 28: Development in reference prices
Development in reference prices Q1 2023 Change vs Q1 2023 Change vs Notes: Market Q1 2022 EUR Q1 2022 (1) NASDAQ average superior GWE/kg (gutted weight equivalent) Norway (1) EUR 9.55 18.3% EUR 9.55 18.3% (2) Urner Barry average D trim 3-4 lbs FOB Miami Chile (2) USD 6.81 -1.3% EUR 6.35 3.2% (3) Ref
Slide 29: Industry supply growth 2023e
Industry supply growth 2023e • Low supply growth of 1% expected for 2023 2020 2021 2022 2023E 2023E GWT (1,000) Low Y/Y grow th High Y/Y grow th Norw ay 1,233 1,380 1,365 1,387 1,374 1% 1,400 3% UK 160 179 149 162 159 7% 165 11% Faroe Islands 73 95 90 94 92 3% 96 7% Other Europe* 42 52 55 52 50 -9%
Slide 30: Mowi volume guidance all-time high
Mowi volume guidance all-time high Atlantic salmon 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Q2 2023 2023 GWT (1,000) Actual Actual Actual Actual Actual Actual Actual Guidance Guidance Norway 273.2 59.4 59.8 87.4 87.1 293.7 65.6 61.0 290.0 Scotland 64.4 10.5 13.0 14.5 10.4 48.4 11.4 17.5 64.
Slide 31: Outlook
Outlook • A record start to 2023 on modest supply and good demand • Salmon normally fares well in challenging economic times • Modest supply growth expected in 2023 • Mowi harvest volume guidance maintained at 484k GWT in 2023 – Equivalent to growth of 4.4% • Resource rent tax proposal reduced from
Slide 32: Appendix
Q1 2023 presentation Appendix
Slide 33: Proposed resource rent tax on salmon farming in Norway – 57% total tax
Proposed resource rent tax on salmon farming in Norway – 57% total tax • Currently, the industry pays 22% corporate tax, in addition to 0.6% export tax (on revenues) and NOK 0.4 per kg in production fee • On 28 September 2022 the Norwegian government announced a proposal for an additional resource r
Slide 34: Mowi ranked #1 on sustainability amongst food producers
Mowi ranked #1 on sustainability amongst food producers Good progress on reducing (FY 2022) GHG emissions in 2022 and since 2019 Scope 1 & 2 GHG emissions Scope 3 GHG emissions -10% 400 -33% 2,000 Tonnes (1,000) Tonnes (1,000) -3% 350 1,900 -9% 300 1,800 250 1,700 200 1,600 150 1,500 2019 2020 2021
Slide 35: Ocean-based Atlantic salmon farming is on the right side of sustainability
Ocean-based Atlantic salmon farming is on the right side of sustainability Rating agencies About the rating Score (1) Salmon is the most sustainable farmed animal protein alternative Mowi ranked as the most sustainable animal protein producer in the world (amongst the 1st largest 60 animal protein p
Slide 36: Nova Sea
Nova Sea Harv est v olume (GWT) EBI T per kg (EUR) NI BD EURm Ownership % 2021 2022 Q1 2022 Q1 2023 2021 2022 Q1 2022 Q1 2023 Q1 2023 Nova Sea 48.7 % 43 539 44 027 7 114 8 647 1.84 2.90 2.85 3.27 -71.0 • Leading integrated salmon producer in Northern Norway − 33.33 wholly owned licenses − 4 partly o
Slide 37: Dividend policy
Dividend policy • Mowi’s ambition is to create long-term value for the shareholder through both positive share price development and a growing dividend in line with long-term earnings − Quarterly ordinary dividend shall under normal circumstances be at least 50% of underlying earnings per share (EPS
Slide 38: Contract coverage and sales contract policy
Contract coverage and sales contract policy SALES CONTRACT POLICY Min hedging rate Max hedging rate (1) • Q2 2023 contract shares (% of guided volume): Norway (2) 0% 50 % Scotland 0% 75 % − Norway 29% Chile (2) 0% 50 % − Scotland 45% Canada 0% 30 % Ireland 0% 100 % − Chile 46% Faroes 0% 30 % − Canad
Slide 39: Quarterly segment overview
Quarterly segment overview SOURCES OF ORIGIN QTD EUR million Norway Scotland Chile Canada Ireland Faroes Iceland Other 1) Group OPERATIONAL EBIT FARMING 202.5 23.4 8.6 16.0 1.0 6.9 10.3 268.7 SALES AND MARKETING Markets 13.8 1.5 0.2 0.5 0.2 0.1 0.0 0.0 16.3 Consumer Products 24.2 3.6 7.2 0.0 0.3 0.0
Slide 40: Development in harvest volumes
Development in harvest volumes GWT 2018 2019 2020 2021 2022 2023E (1,000) Total Total Total Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Q1 Q2E Total Norway 230.4 236.9 262.0 75.0 56.1 71.0 71.1 273.2 59.4 59.8 87.4 87.1 293.7 65.6 61.0 290.0 Scotland 38.4 65.4 52.7 18.3 19.2 15.0 12.0 64.4 10.5 13.0 14.5 10
Slide 41: Cash flow guidance and historic developments
Cash flow guidance and historic developments Net capital expenditure Net working capital 450 600 Maintenance level 400 500 350 400 300 300 250 EUR million EUR million 200 200 150 100 100 0 50 -100 0 -200 2018 2019 2020 2021 2022 2023E 2018 2019 2020 2021 2022 2023E Financial commitments and cost of
Slide 42: Thank you
MOQOWI Thank you