For personal use only Huon Aquaculture Group Limited Half Year Results Presentation FY2020
Important Information For personal use only This presentation is provided by Huon Aquaculture Group Limited (ACN 114 456 781) to provide summary information about Huon Aquaculture Group Limited and its subsidiaries (Huon) and their activities as at the date of this presentation. The information in this presentation is of a general nature and does not purport to be complete and may change without notice. Undue reliance should not be placed on the information or opinions contained in this presentation for investment purposes as it does not take into account your investment objectives, financial position or needs. These factors should be considered, with professional advice, when deciding if an investment is appropriate. The financial information includes non-IFRS information which has not been specifically audited in accordance with Australian Accounting Standards but has been extracted from the 2020 Half Year Financial Report (Appendix 4D). This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. No representation, warranty or assurance (express or implied) is given or made by Huon that the forward looking statements contained in this presentation are accurate, complete, reliable or adequate or that they will be achieved or prove to be correct. Except for any statutory liability which cannot be excluded, Huon and its respective officers, employees and advisers expressly disclaim any responsibility for the accuracy or completeness of the forward looking statements and exclude all liability whatsoever (including negligence) for any direct or indirect loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission from it. Subject to any continuing obligation under applicable law or any relevant listing rules of the ASX, Huon disclaims any obligation or undertaking to disclose any updates or revisions to any forward looking statements in these materials to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any statement is based. Nothing in these materials shall under any circumstances create an implication that there has been no change in the affairs of Huon since the date of this presentation. Huon Aquaculture | Results Presentation | February 2020 2
For personal use only Agenda 1 OVERVIEW 2 FINANCIAL PERFORMANCE 3 OPERATIONAL PERFORMANCE 4 OUTLOOK
Overview For personal use only • Market • Efficiency – Recovery of biomass and average harvest size has allowed focus – With all major capex projects complete, clear focus on driving to return to key strategic markets production efficiencies to deliver returns from those projects – Retail volumes maintained despite the completion of three-year – Technology projects completed in the last three years have retail MAP contract delivered: – Both domestic and international markets for salmon remain in increased smolt size to sea, • long term demand growth Improved growth and survival rates at sea, and • improved feed conversion rates • • Growth – Huon remains confident in production forecasts of 25,000t in • Capital Management FY2020 and 30,000t in FY2021, with further capacity for expansion – Two year $150m capital expenditure programme to expand – Marine leases and major infrastructure in place to achieve further production capacity completed in FY2019 production growth Funded from cashflow and borrowings • – Biomass in the water has been rebuilt following issues faced in – Rebuild of biomass in FY2019 and FY2020 funded from cashflow FY2018 and FY2019 and debt – Key components of the industry biosecurity plan are being met – FY2020 balance sheet carrying all the costs associated with this – Impact from climate change is managed through investment with returns delayed until harvest of the 19Year Class Access to fish created under selective breeding programs in FY2021 • Positioning of leases in high energy sites offshore – Dividend suspended for FY2020 reflecting the current poor • earnings profile and while the business reinvests in biological Purpose built infrastructure designed to support transition to • assets farming under adverse weather conditions Strong cashflow anticipated in FY2021 and FY2022 from • significant increase in harvest volume Huon Aquaculture | Results Presentation | February 2020 4
For personal use only Financial Performance HY2020
FINANCIAL PERFORMANCE Overview of 1H2020 For personal use only • Performance in the first half benefited from the significant Post AASB 16 Pre AASB 16 Pre AASB 16 increase in the biomass during FY2019 but was held back 31 Dec 31 Dec 30 Jun 31 Dec Dec to Dec by low harvest weights in Q1 due to the slow recovery from Six months ending 2019 2019 2019 2018 % Change the previous summer and jellyfish Tonnage t 13,321 13,321 9,830 9,019 48% Revenue^ $M 178.1 178.1 145.7 136.3 31% • Revenue rose 31% to $178.1m following a 48% rise in Revenue per HOG kg $ 13.37 13.37 14.82 15.11 -12% production volume on pcp 20.4 25.8 21.6 -6% Operating EBITDA** $M 23.0 Operating EBITDA Margin % 13% 11% 18% 16% -28% • The sale of increased volumes through the lower priced Operating NPAT*** $M 3.7 4.3 7.0 8.9 -52% export spot market resulted in an 11.5% fall in Huon’s total Operating Earnings Per Share c 4.16 4.81 8.03 10.10 -40% weighted average price to $13.37/HOG kg • Operating EBITDA fell 6% to $20.4m and Operating NPAT fell EBITDA* $M 49.2 46.6 (8.4) 46.6 0% 52% to $4.3m on pcp -14% NPAT $M 22.0 22.6 (16.9) 26.4 Earnings Per Share c 25.19 25.83 -19.35 30.17 -14% – The sale of increased volumes through the export spot market Dividend Per Share c 0.00 0.00 3.00 3.00 - reduced the average price per kg by 11.5% – Production costs reduced 7% to $11.84 /HOG kg Fair Value Adjustment $M 26.2 26.2 (34.2) 25.1 4% – As a result, Operating EBITDA /HOG kg fell 36% to $1.53 /HOG kg Biological Assets $M 252.1 251.6 209.1 228.5 10% – Depreciation increased $16.9m (+42%), impacting Operating NPAT • Statutory NPAT fell 14% to $22.6m, supported by a small uplift in the Fair Value Adjustment of Biological Assets ^ Revenue from the sale of goods EBITDA is a non-IFRS financial measure which is used to measure business performance • using net depreciation and amortisation recognised in the income statement • Investment in biological assets of $31m on pcp was offset ** Operating EBITDA excludes the impact of the Fair Value Adjustment of Biological Assets *** Operating NPAT excludes the impact of the Fair Value Adjustment of Biological Assets by improved cash flow and related tax impact – Net debt rose 8% and gearing increased to 41.8% on pcp Huon Aquaculture | Results Presentation | February 2020 6
FINANCIAL PERFORMANCE Revenue Drivers For personal use only • Harvest volume rose 48%, consistent with the forecast FISH WEIGHT AND PRICE harvest for the full year of 25,000 tonnes $HOG kg kg • Revenue rose 31% supported by higher sales volumes 15.50 5.50 but offset by short term price weakness in the 15.00 international market 5.00 14.50 • Average price per HOG kg fell 12% on the previous 4.50 corresponding half to $13.37 14.00 – Driven by channel mix weighted to export and lower 13.50 4.00 international prices 13.00 • Average HOG weight increased 6% on pcp to 5.07kg 3.50 12.50 and 24% on the previous half (4.10kg) – Fish growth in Q1 remained poor due to the ongoing impacts of 12.00 3.00 gill necrosis, resulting in low harvest weights 31 Dec 30 Jun 31 Dec 30 Jun 31 Dec 30 Jun 31 Dec 2016 2017 2017 2018 2018 2019 2019 – Harvest weights recovered in Q2 due to optimal growing conditions, driving volume increases into the export channel, Average price/HOG kg (net sales) Average HOG weight accounting for 29% of revenue in 1H2020 – Export sales coincided with a sharp drop in international pricing, the lowest since 2015, with Huon’s export price averaging $10.85 Huon Aquaculture | Results Presentation | February 2020 7
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