9M 2019 Results Presentation to Investors and Analysts Forward - - PowerPoint PPT Presentation

9M 2019 Results

Presentation to Investors and Analysts

Forward Looking Statements

9M 2019 Results Presentation to Investors and Analysts

Disclaimer

This presentation is furnished and intended for European market participants and should be viewed in that manner. Any potential forward looking statements contained in this presentation are reflective of managements current views on future events and performance, whilst the views are based on positions that management believes are reasonable there is no assurances that these events and views will be

• achieved. Forward looking views naturally involve uncertainties and risk and

consequently actual results may differ to the statements or views expressed.

We are Iceland Seafood

9M 2019 Results Presentation to Investors and Analysts

Building an industry leader from Iceland with a strong heritage

9M 2019 Results Presentation to Investors and Analysts

Global value added seafood producer and global sales and marketing company

9M 2019 Results Presentation to Investors and Analysts

12

Businesses inesses in 8 countries ries

620

Employ loyees ees

Market and client expertise

Me Meals ls sold ld every ry day

Global Sourcing with core from Iceland

7

Valu lue e added ed factor

• rie

ies

Innovation and client focus

+€440m

Annual ual revenues enues

Listed on Nasdaq Main Market. Mcap €182m

3000 customers

across

45 countries

Global distribution

Serving over

+1.1m

Successful public share offering and main market listing

9M 2019 Results Presentation to Investors and Analysts

Public offering of new shares completed in October

• In total 225million new shares sold at a price of

9,5 per share. Total increase in equity of €15.2m

• 90% of the issued shares were sold to investors in
• rderbook B, majority of that going to Icelandic

institutional investors, thereof 9 pension funds

• 112 new shareholders joined through the share
• ffering, in total 444 shareholders at end of

October

• Good balance between industrial and financial

investors in shareholders group post issuance

• October 29th, the first day of trading on the main

market

• Good liquidity since listing, average trade of 8.8m

shares per day

• Market Cap ISK 25.1 bn at end of October, the 12th

largest of companies listed on Nasdaq Iceland Stock exhange

• Two market making contracts, both providers

committed to make bid and ask for a minimum of ISK 5m at market value, with maximum spread of 1.5%

Successful main market listing

Great addition to well positioned S-European operation

9M 2019 Results Presentation to Investors and Analysts

Elba strong seafood player in Spain

• Focusing on sales and processing of light salted

frozen products

• Operating a production facility in Barcelona, total

annual sales volume of around 2.200MT

• Owned by GPG Seafood and IceMar, which are also

the main providers to the company

Share Purchase Agreement signed to acquire Elba

• The acquisition price for 100% stake in the company

is €4.4m on a “debt free, cash free” basis

• 50% of the price will be settled by cash and the
• ther 50% with shares in Iceland Seafood
• Due diligence process currently taking place, with

the aim of completion around year end

Opportunities with the acquisition

• Opportunities to further leverage distribution and

production capabilities in Spain

• The Elba brand is well recognized and with strong

image in the Spanish market

• Iceland Seafood will get strong producers into its

network, current shareholders of Elba will get 1.2% stake in Iceland Seafood

Key projects progressing as expected

9M 2019 Results Presentation to Investors and Analysts

Merger project in Spain on track

• Operation in Barcelona in one

place from mid November

• All production of light salted

products being moved to a single location in Barcelona. Fully implemented in Q2 2020

• Synergies within sales, logistics

and distributions starting to come through

• One legal entity from January 1st

2020

• Investment in increased freezing

capacity will be finished next week

• Daily production capacity will

double with this investment

• The second phase of the

investment is expected to be fully completed in Q2 2020, with extended facility and a new coldstore up and running from that time

• Total investment in the range of

$1.3-1.6m

• Total investment of c.a. €1.0m in

UK before year end 2019, in relation to new listings within the retail sector

• IS Barraclough becoming a key

frozen natural provider to Tesco from September 2019 after winning a tender earlier this year

• Sales to Aldi growing from

previous years

• Launching chilled whitefish with

a key retail partner in Q4 2019

First phase of investment project in Achernar will be completed next week New listings within UK retail requiring new investments

9M 2019 Results Presentation to Investors and Analysts Oceanpath Facility extension and filleting line €2.9m IS Barraclough New listings within retail requiring investment €1.0m IS Iberica Barcelona office in

• ne place, all cod

production in Barcelona from Q2 2020 - €1.0m Achernar Increased production and coldstore €1.4m

Key Investment projects

Financial performance

9M 2019 Results Presentation to Investors and Analysts

Of Divisions At Group level Balance sheet

Strong combination of sourcing expertise and well positioned value added activities

9M 2019 Results Presentation to Investors and Analysts

Iceland Seafood International

Executive management

Value Added N- Europe Value Added S- Europe Sales & Distribution IS Iceland and IS Fran ance ce IS Germany any IS USA IS Barracl aclough gh Havelok Oceanp npat ath IS Spain Iceland andic Iberica ica Ecomsa msa Achern ernar ar 37 (6%) 226 (37%) 354 (57%)

Employees

Dunn‘s of Dublin

61% 39% 71% 29% 9% 91% 74% 26%

Turnover Profit before tax

Sales & Distribution Value Added

2013 2013 2018P 2018P

9M 2019 € m´s 5.0 6.6 15.3 134.7 Normalis lised ed PBT* T* Normalis lised ed EBITD TDA Net margin Sales

Solid results despite headwinds in supply during Q3

9M 2019 Results Presentation to Investors and Analysts

Division incorporates three manufacturing sites in Barcelona, Malaga and Argentina Servicing the foodservice and retail markets in Southern Europe The 9M sales growth driven by strong demand

• f light salted products
• Sales in Q3 5% down on prior year

proforma, due to lower availability from Iceland and lower prices on Argentinean shrimp

• Lack of cod supply and smaller cod

being catched around Iceland

9M 2018 9M 2018P 8P 51.9 130.6 5.1 15.7 1.7 6.2 1.4 4.8

* Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations

> VA S-Europe > VA N-Europe > Sales & Distribution

Normalised PBT €3.6m up from prior year, up €0.2m on proforma 2018

• Sales increase a key driver for 9M

sales, €4.1m up on prior year

• Cost reduction related to the

merger in Spain starting to pay off

• Results of Q3 €0.7m down on

prior year, due to lower sales in the period

9M 2019 € m´s 2.6 3.9 8.4 69.9 Normalis lised ed PBT* T* Normalis lised ed EBITD TDA Net margin Sales

Good recovery in Q3 after challenging 1H 2019

9M 2019 Results Presentation to Investors and Analysts

Division incorporates manufacturing sites in Grimsby, Bradford and two in Dublin Servicing the retail and foodservice markets in the UK and Ireland External challenges impacting sales and profits in the period

• Ongoing uncertainty around

Brexit

• High raw material prices
• UK retail trending towards

packed at source

9M 2018 9M 2018P 8P 69.2 75.2 7.9 9.2 4.1 4.9 2.9 3.6

* Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations.

> VA S-Europe > VA N-Europe > Sales & Distribution

Good results in Q3 despite ongoing Brexit uncertainty

• New listings within UK retail
• Investments in Ireland starting to

pay off

• Salmon prices came down in Q3

from a high level in 1H 2019

• The positive results are expected

to continue in Q4

• However FY 2019 profitability is

not expected to reach last year results

9M 2019 € m´s 1.3 1.6 5.9 146.5 Normalis lised ed PBT* T* Normalis lised ed EBITD TDA Net margin Sales

Encouraging performance driven by good sales out of Iceland

9M 2019 Results Presentation to Investors and Analysts

The Sales & Distribution division incorporates subsidiaries in Iceland, France, Germany and the USA Division sells to over 45 countries Sales increase of 8% from prior year

• Sales from Iceland continue to

benefit from stronger cooperation with producers

• Sales of seafrozen products from

Iceland increased by 52% from 2018

9M 2018 9M 2018P 8P 136.0 136.0 5.4 5.4 1.0 1.0 0.8 0.8

* Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations

> VA S-Europe > VA N-Europe > Sales & Distribution

Normalised PBT €0.5m up from the first 9M 2018

• Sales increase in Iceland a key driver

for increased profitability

• Profitability in Q3 in line with prior year,

impacted by lower availability of groundfish in Iceland

Q4 starting strong, good

• utlook for the remainder
• f the year
• New quota year started in September

with increased cod quotas

• Q4 an important sales period for fresh

products in France and Germany

9M 2019 € m´s 7.6 12.2 29.8 332.2 Normalis lised ed PBT* T* Normalis lised ed EBITD TDA Net margin Sales

Positive results with normalised PBT of €7.6m

9M 2019 Results Presentation to Investors and Analysts

Sales growth of 5% from 9M 2018 Proforma

• Significant sales growth from S&D

division

• Strong sales in S-Europe,

especially of light salted products.

• Sales growth have slowed down

in Q3 due to low availability out of Iceland

Normalised PBT up €0.3m from prior year

• Strong sales in both S&D and S-

Europe driving profitability

• N-Europe division impacted by

external challenges, but recovering well in Q3

• Key projects in all divisions

started to pay off

9M 2018 9M 2018P 8P 232.0 316.7 18.3 30.4 5.8 11.0 3.6 7.3

*Normalised PBT represents Profit before tax before allowing for significant items and discontinued operations. **Proforma numbers based on 12mth operation of the acquired subsidiaries and include finance cost in HO related to the acquisitions.

Iceland Seafood Group

Net Profit of €4.3m impacted by one off cost of €1.8m, which mainly consist of:

• Changes in key management of

the Group and in Spain

• Cost of merging process in Spain
• Cost of Nasdaq main market

listing

• Operational restructuring within

VA-N Europe, reacting to external challenges

• Calculated income tax of €1.1m

for the period

4.3 Net Profit 2.4 5.2

30.9.20 .2019 € m´s 3.1 44.6 3.5 16.4 Deferred tax/other Intangibl ble assets Leased assets Fixed assets

Net debt €1.9m lower than year beginning. NWC seasonally low at end of September.

Strong balance sheet which strengthened further with €15.2m share increase in October

9M 2019 Results Presentation to Investors and Analysts

Total assets increased by €5.3m in the period, due to capex investments, higher cash and implementation of IFRS 16, Lease accounting

31.12.20 .2018 Variance 14.4 2.0

• 3.5

44.7 (0.1) 2.7 0.4 5.0 57.3 61.2 67.6 Other assets Trade and other receivables Inventor tory Non Current Assets 61.8 5.8 62.1 (0.9) 62.4 (5.1) 3.5 1.5 199.1 131.5 8.0 Total Assets Current Assets Bank deposits s and cash 4.0 4.0 132.0 (0.5) 193.8 5.3

Equity ratio of 31.9% at end of the period. After the share increase in October 2019 the ratio goes up to 39.5%

30.9.20 .2019 € m´s 4.0 9.1 3.5 63.5 Lease liabiliti ties Long term borrowings Thereof minority ty interest Total Equity ty 31.12.20 .2018 Variance 59.3 4.2 2.9 0.6 6.7 2.4

• 4.0

40.6 73.9 1.8 Trade and other payables Short term borrowings Obligati tions 1.7 0.2 75.8 (1.9) 44.9 (4.3) 199.1 120.7 6.2 Total Equity ty and Liabiliti ties Current liabiliti ties Other current liabiliti ties 5.4 0.8 126.1 (5.4) 193.8 5.3 Non Current Liabiliti ties 14.9 8.4 6.5

Group funding headroom in excess of €30m at end of September 2019, in addition to strong cash position

Outlook

9M 2019 Results Presentation to Investors and Analysts

Unchanged outlook for full year 2019 normalised PBT

9M 2019 Results Presentation to Investors and Analysts

Uncertainty Focus and growth Full year 2019 Normalised PBT* (m´s) Outlook for 2019

• Q4 is highly important for

profitability of the Group, with Christmas being a crucial sales period and production in Argentina starting in beginning of December

• Full year Normalised PBT estimated

at €11.0-11.8m in 2019, compared to €10.8m for 2018P

• The Group targets €20m PBT in the

next 3-5 years, primarily via synergy effects and increased profitability from current investments

• Estimated annual synergies from

merger in Spain estimated €3.0- 3.5m, expected to materialize in full before year end 2021

*Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations 2018P (proforma) based upon 2018 actuals as Oceanpath and Solo were

• wned for the full year
• Group’s results are influenced by

fishing and quota changes

• Changes in underlying global

economic conditions, currency rates, import duty rates, competition and consumer behaviors all generate uncertainty

• Among these uncertainties are

Brexit, USA related tariffs and political uncertainty in Argentina

• Iceland Seafood’s priority in the

coming periods is to integrate

• ur new companies into the

Group to maximise strategic

• pportunities as well as driving
• rganic growth
• The Group remains on the

lookout for strategic investments in well positioned companies

11.8 3.3 2010 2011 2012 2013 2014 2015 2016 2017 2018 2018P 2019 Outlook 10.8 11.0 7.4 3.5 2.9 1.7 1.0 1.3 0.5 0.8

We are Iceland Seafood

9M 2019 Results Presentation to Investors and Analysts