Q2 2020 B AKKAFROST GROUP Glyvrar 25 August 2020
DISCLAIMER This presentation includes statements regarding future No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from fairness, accuracy or completeness of the information the results indicated or implied in these statements. contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary under- takings or any of such person’s officers or employees or advisors accept any liability whatsoever arising dir- ectly or indirectly from the use of this document. Page 2 BAKKAFROST / Q2 2020 PRESENTATION
SUMMARY OF Q2 2020 MARKETS AND SALES SEGMENT INFORMATION FINANCIALS & ESG OUTLOOK APPENDIX Faroe Islands, Gøtuvík
HIGHLIGHTS Harvest in the Faroe Islands (FO): 12,941 tgw in Q2 2020 (12,609 tgw in Q2 2019) Harvest in Scotland (SCT): 7,937 tgw in Q2 2020 Operation Feed sales of 22,121 tonnes in Q2 2020* (18,872 tonnes in Q2 2019*) Raw material purchase of 122,512 tonnes in Q2 2020 (110,109 tonnes in Q2 2019) Revenues of DKK 1,134 million in Q2 2020 (DKK 947 million in Q2 2019) Revenues and Operational EBIT Operational EBIT** of DKK 182 million in Q2 2020 (DKK 339 million in Q2 2019) Cash Flow Cash flow from operations of DKK 111 million in Q2 2020 (DKK 327 million in Q2 2019) Positive operational EBIT for all segments Segments *) Including internal sales of 16,159 tonnes in Q2 2020 (15,689 tonnes in Q2 2019) **) EBIT aligned for fair value adjustments of biomass, onerous contracts provisions, income from associates and revenue tax Page 4 BAKKAFROST / Q2 2020 PRESENTATION
SUMMARY OF THE QUARTER (DKK million) Q2 2020 Q2 2019 H1 2020 H1 2019 Farming/VAP (FO)* Operating revenue 1,134 947 2,389 1,910 31.31 15.34 Operational EBITDA 298 397 665 718 (Q2 2019) (Q2 2020) Operational EBIT 182 339 430 606 Farming (FO)* Profit for the period 472 189 324 401 31.31 9.79 (Q2 2019) (Q2 2020) Operational EBITDA margin 26.2% 41.9% 27.8% 37.6% Operational EBIT margin 16.0% 35.8% 18.0% 31.8% Farming (SCT)* 5.36 N/A (Q2 2020) Operational EBIT/Kg (Farming FO) (NOK) 9.79 31.31 17.54 26.39 Operational EBIT/Kg (Farming FO and VAP) (NOK) VAP* 15.34 31.31 19.83 26.46 Operational EBIT/Kg (VAP) (NOK) 11.19 -0.01 4.59 0.19 -0.01 11.19 (Q2 2019) (Q2 2020) Operational EBIT/Kg (Scotland Farming SCT) (NOK) 5.36 N/A 5.52 N/A EBITDA margin (Fishmeal, -oil and Feed) 18.6% 20.6% 15.6% 21.8% FOF** 20.6% 18.6% (Q2 2019) (Q2 2020) Group Operational EBIT was DKK 182 million in Q2 2020, * Operational EBIT in NOK/kg compared to DKK 339 million in Q2 2019 ** EBITDA margin Page 5 BAKKAFROST / Q2 2020 PRESENTATION
SUMMARY OF Q2 2020 MARKETS AND SALES SEGMENT INFORMATION FINANCIALS & ESG OUTLOOK APPENDIX
MARKETS & SALES SALES TO WESTERN EUROPE INCREASED – OTHER MARKETS DECREASED Total sales of salmon Sales & volume (FO only) Q2 2020 Q2 2019 H1 2020 H1 2019 by markets Western Europe FO SCT Total FO SCT Total FO SCT Total FO SCT Total Western Europe 64% 82% 73% 43% N/A 43% 56% 87% 70% 46% N/A 46% 43% 64% North America 16% 8% 12% 25% N/A 25% 24% 6% 16% 24% N/A 24% (Q2 2019) (Q2 2020) Asia 19% 3% 10% 25% N/A 25% 15% 1% 9% 25% N/A 25% Eastern Europe 1% 0% 0% 7% N/A 7% 4% 0% 2% 5% N/A 5% North America Rest of world 0% 7% 4% 0% N/A 0% 0% 5% 2% 0% N/A 0% Total 100% 100% 100% 100% N/A 100% 100% 100% 100% 100% N/A 100% 25% 16% (Q2 2019) (Q2 2020) Fresh salmon only by Q2 2020 Q2 2019 H1 2020 H1 2019 markets FO SCT Total FO SCT Total FO SCT Total FO SCT Total Western Europe 30% 82% 67% 23% N/A 23% 24% 87% 63% 26% N/A 26% Asia North America 32% 8% 15% 33% N/A 33% 43% 6% 21% 32% N/A 32% 25% 19% Asia 37% 3% 13% 36% N/A 36% 26% 1% 11% 36% N/A 36% (Q2 2019) (Q2 2020) Eastern Europe 0% 0% 0% 8% N/A 8% 7% 0% 3% 6% N/A 6% Rest of world 0% 7% 5% 0% N/A 0% 0% 5% 3% 0% N/A 0% Total 100% 100% 100% 100% N/A 100% 100% 100% 100% 100% N/A 100% Eastern Europe 7% 1% Contract share FO, VAP products [% of qty] (Q2 2019) (Q2 2020) 100% 80% 50% 50% Harvest volumes used in the VAP 67% 68% 60% 32% 50% 40% (Q2 2019) (Q2 2020) 50% 50% 20% 32% 33% 0% Q2 2020 Q2 2019 H1 2020 H1 2019 VAP on contract HOG, Spot Page 7 BAKKAFROST / Q2 2020 PRESENTATION
GLOBAL MARKETS LOWER PRICES AND MODERATE GROWTH IN GLOBAL HARVEST Spot prices (NASDAQ) on superior 4-5 [NOK/kg HOG] Average spot prices increased in Q2 2020 Q1 Q2 Q3 Q4 ( NOK/KG) 80.00 70.00 64.02 59.36 y/y: -7.3% -4.67 (Q2 2019) 60.00 (Q2 2020) 50.00 69.92 59.36 -15.1% q/q: -10.56 40.00 (Q1 2020) (Q2 2020) 30.00 Spot prices were lower in Q2 2020 - especially in the first half of the quarter (mainly a Covid-19 effect) 20.00 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 2015 2016 2017 2018 2019 2020 Global harvest grew 3% y/y Change in global market [volume harvested and market price] 50% Change in global FX: NOK still weak market supply of farmed Atlantic 30% salmon from the previous year 10% Change in European spot prices - fresh 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 Atlantic salmon -10% (FishPool index) 2018 2019 2020 from the previous -30% year -50% Source: Kontali Page 8 BAKKAFROST / Q2 2020 PRESENTATION
DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN MODERATE INCREASE IN SUPPLY Harvest & Supply Development Q2 2020 Q2 2019 Change % Global growth of 1.4% [Head On Gutted 1,000 tonnes] Norway 271 277 -2.5 % Europe flat development – down 0.3% UK 41 41 0.7 % Norway down 6kt Faroes 21 17 23.2 % UK modest growth Iceland 5 4 14.3 % Faroes up by 4kt Ireland 5 4 30.2 % Total Europe 342 343 -0.3 % Americas up 8% Chile 157 143 9.7 % Chile up 14kt Canada 34 32 4.2 % Indications of liquidity driven harvest USA 4 5 -17.0 % Total Americas 195 181 8.0 % Other up 31.8% Other 21 16 31.8 % Inventory Total (Harvested quantity) 558 539 3.4 % Build-up of frozen inventory 11kt Inventory movements -15 -4 292.3 % Total (Sold Quantity) 543 536 1.4 % Source: Kontali Page 9 BAKKAFROST / Q2 2020 PRESENTATION
SALMON MARKETS, SOLD QUANTITY (HEAD ON GUTTED – HOG) MODERATE GROWTH Salmon markets, sold quantity (head on gutted - HOG) Global growth of 1.3% EU & USA growth of 3% Increased supply through retail chain Russia down 18% Reduced frozen supply from Chile Latin America down 18% High proportion normally sold through food service Asia Generally strong growth Source: Kontali Page 10 BAKKAFROST / Q2 2020 PRESENTATION
SHORT TERM SUPPLY OUTLOOK Moderate global supply growth SUPPLY - TOTAL Moderate European supply in 2020, drop in 2021 Reduced output expected in Norway and Scotland Significant drop in Americas driven by Chile Outlook for tighter supply from medio 2021 SUPPLY - EUROPE SUPPLY - AMERICAS Source: Kontali Page 11 BAKKAFROST / Q2 2020 PRESENTATION
SUMMARY OF Q2 2020 MARKETS AND SALES SEGMENT INFORMATION FINANCIALS & ESG OUTLOOK APPENDIX
FARMING – HARVEST VOLUME INCREASED HARVEST IN THE FAROE ISLANDS – INCREASED AVG. SMOLT SIZE Q2 2019 Q2 2020 Q2 Q2 H1 H1 Harvest Volumes tonnes [HOG] 2020 2019 2020 2019 Harvested volumes (tonnes HOG) North: 100% FO - North Region 12,941 7,858 19,206 14,601 12,609 12,941 3% FO: FO - West Region 0 4,751 2,769 11,715 West: 0% 7,937 FO - South Region 0 0 1,633 0 South: 0% SCT: N/A FO – Total 12,941 12,609 23,608 26,316 Average harvest weight (kg) SCT 7,937 n/a 15,205 n/a 5.43 5.43 Total (FO & SCT) 20,878 12,609 38,813 26,316 FO: N/A 4.45 SCT: Seawater Temperatures at 18m depth in the Faroe Islands Smolt transfer (million pcs.) 2.9 -18% 3.6 FO: N/A 2.8 SCT: Smolt transfer (gram per pcs.) 242 286 18% FO: SCT: N/A 76 Avg. Seawater temperatures (°C) 7.67 7.47 FO: -0.20 Page 13 BAKKAFROST / Q2 2020 PRESENTATION
FARMING – OPERATIONAL PERFORMANCE REVENUE AND OPERATIONAL EBIT DECREASED IN THE FAROE ISLANDS Faroe Islands (FO) Operational EBIT (mDKK) 303 86 (Q2 2019) (Q2 2020) Operational EBIT margin (%) Skálafjørður, Faroe Islands - (view from Bakkafrost’s Headquarters) 40 15 Farming FO (DKK million) Q2 2020 Q2 2019 H1 2020 H1 2019 (Q2 2019) (Q2 2020) Operating revenue 574 759 1,207 1,514 Operational EBIT 86 303 289 533 Operating revenue (mDKK) Operational EBIT margin 14.9% 40.0% 23.9% 35.2% 759 574 (Q2 2019) (Q2 2020) Farming SCT (DKK million) Q2 2020 Q2 2019 H1 2020 H1 2019 Scotland (SCT) Operating revenue 377 N/A 790 N/A Compared to the Faroe Islands, Scotland had a lower operational EBIT Operational EBIT 29 N/A 59 N/A and EBIT margin. Operational EBIT margin 7.6% N/A 7.4% N/A Compared to Q1 2020, SCT’s operational EBIT margin increased from 7.2% to 7.6%. Page 14 BAKKAFROST / Q2 2020 PRESENTATION
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