EMPRESAS AQUACHILE S.A. Corporate Presentation 2013 AQUACHILE Pg. - - PowerPoint PPT Presentation

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Corporate Presentation 2013

EMPRESAS AQUACHILE S.A.

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Pág. 03 Pág. 09 Pág. 28 Pág. 36 Pág. 40

INDEX

01 Overview 02 About AquaChile 03 Industry Performance & New Regulation 04 Sustainability and Stakeholders 05 New Developments

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01

Overview

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AquaChile is a Chilean company that

produces and commercializes Atlantic Salmon, Pacific Salmon, Sea Trout and Tilapia.

Empresas AquaChile

at a glance.

Source: Infotrade

It owns inland farms in Costa Rica and the only three farming licenses granted in the Bayano Lake in Panama to produce Tilapia. It has operations in Chile, Costa Rica, Panama and a commercial office in the United States. It is the largest producer in Chile of Salmon and Sea Trout. It owns 150 sea licenses which provide a solid basis for its growth. It has more than

230

customers in 30 countries.

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Main Shareholders:

Puchi and Fischer Families

Public since

May 19th, 2011

Market capitalization of

USD 578 millions

as of October 30, 2013

Empresas AquaChile

at a glance.

Shareholder’s Structure**

Fischer Family 33,03% Puchi Family 33,03% Pension Funds 4,53% Others 29,41% Others 33,95%

Source: The Company

*As of October 30, 2013 ** As of September 30, 2013

578 283 281 163 143 34

Chilean Salmon Companies by Market Cap (MUSD)*

Source: Bloomberg

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2012 Main Chilean Salmon and Sea Trout Exporters

(Th. Net Tons)

51.027 46.604 32.101 31.200 30.448 26.993 24.190 20.335 19.122

10,4% 9,5% 6,6% 6,4% 6,2% 5,5% 5,0% 4,2% 3,9%

Volume Market Share

Source: Infotrade Dic-12

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Annual Sales

In MUSD

Source: The Company

25 years

• f succesful track record.

Crisis

• ISA virus effects
• Financial restructuring
• New legal framework focused

in long term sustainability

• Advantages of diversification

2006 – 2007 Period

• 3rd largest world producer
• Global presence and

reputation

• IPO and acquisition plans

Beginnings

• 25 years of history
• Merger with Salmones Pacífico

Sur

• Track record forming strategic

alliances

• Sustained growth

Today

• Diversified business model
• Vertical integration
• High growth potential
• Industry consolidation capacity

Revenues

In MUSD

2012 410

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19% 36% 20% 25% 17% 31% 16% 15% Atlantic Salmon Sea Trout Pacific Salmon Tilapia

Bayano Lake Guanacaste X and XI Region

Source: The Company as of December 31, 2012

X and XI Region X and XI Region

Focus in

diversification for success.

% of Consolidated Sales (US$ ) % of Consolidated Sales (tons) Geographic Diversification

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02

AquaChile

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AquaChile:

Strong organic growth plan based on unique assets Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Sea Water: High quality and diversified license portfolio Global presence and reputation

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Sea water:

Unique, diversified and large license portfolio.

One of the largest sea licenses base and the largest presence within sanitary areas in the Chilean industry.

150*

Sea licenses distributed in

29

Sanitary Areas

• Geographic distribution
• Organic growth capacity
• Operational and productive continuity
• Continuous supply to clients
• Species diversification
• Natural, climate and sanitary risk

diversification

* Include 7 brackish water licenses

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Sea water:

Unique, diversified and large license portfolio.

INDUSTRY Total of 34 sanitary areas AQUACHILE 95 sea licenses and 17 sanitary areas

50% of sanitary areas of the Aysen Region

Sea licenses Sanitary areas INDUSTRY Total of 24 sanitary areas AQUACHILE 55 sea licenses in 12 sanitary areas

50% of sanitary areas of the Los Lagos Region

Aysen Region Los Lagos Region

Geographical diversification in sea licenses for Salmon and Sea Trout production.

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Tilapia Costa Rica & Panama:

Large water volume and favorable climate.

Costa Rica

• Strategic access to large volumes of high-quality water
• Optimal location for logistics
• 21,000 tons WFE capacity

Panama

• The Company has the only three tilapia farming licenses granted in the Bayano Lake
• Potential to produce over 20,000 ton WFE

Geographical diversification in Tilapia production

Guanacaste Bayano Lake

Costa Rica Panama

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AquaChile:

Strong organic growth plan based on unique assets Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Sea Water: High quality and diversified license portfolio Global presence and reputation

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Fresh water:

Flexibility and excess installed capacity.

24*

hatcheries from the IXthRegion to the XIthRegion, including 1 hatchery near Santiago.

14**

fresh water farming licenses in the Xthand XIth Regions for Sea Trout and Coho smoltification.

7

brackish water licenses in the XIth Region for Coho smoltification.

* Seven of them are rented under long term contract ** Two of them are rented under long term contract

Geographical diversification in fresh water.

1

River licenses in the XVthRegions for Atlantic Salmon smoltification.

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AquaChile:

Strong organic growth plan based on unique assets Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Sea Water: High quality and diversified license portfolio Global presence and reputation

16

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50,0 26,0 21,6 34,4 36,7 21,0 Cardonal Cailín Hueñocoihue Antarfood Calbuco Costa Rica

Current production capacity of AquaChile’s processing plants

In thousands of WFE tons

7 plants with a total capacity of 190,000 WFE tons, including one of the largest plant in the World

Processing:

Installed capacity to absorb growth.

Location Puerto Montt Calbuco Quellón Dalcahue Chonchi Plant Type Value Added Value Added Whole Salmon Whole Salmon Value Added PAC-HACCP Certification Yes Yes Yes Yes Yes Value Added Yes Guanacaste

Source: The Company

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Diversity of Salmon Products

Whole HG Trim C Portions Trim E Trim D Whole Breaded Fillets Fillets

Diversity of Tilapia Products

Processing:

Installed capacity to absorb growth.

Chile Costa Rica

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AquaChile:

Strong organic growth plan based on unique assets Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Sea Water: High quality and diversified license portfolio Global presence and reputation

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GENETICS FRESH WATER Eggs & Smolts SEA WATER Farming PROCESSING COMMERCIALIZATION FEED

SALMON AND SEA TROUT TILAPIA

Vertical integration

troughout the value chain.

INTEGRATION AquaChile is vertically integrated in the Salmon and Tilapia business. The Company adds value to all of its productive chain, from genetics up to commercialization.

FRY PRODUCTION GENETICS FARMING FEED* PROCESSING COMMERCIALIZATION FEED

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Source: The Company

Universidad de Chile 0,12% AquaChile 99,88% Increase in harvest weight of the Pacific Salmon

In WFE kg ∆+40%

Aquainnovo: Created to be a world class center for genetic improvement in aquaculture

Source: The Company Source: The Company

Improvement in Tilapia conversion factor of ACI Group Reduction in the Tilapia’s on growing cycle

In number of days Δ-36% Δ-21%

Genetics:

15 years of succesfull and proven genetic development.

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Genetics in Salmon and Sea Trout Genetics in Tilapia

Genetics:

15 years of succesfull and proven genetic development.

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Fish feed plant:

State of the art assets to feed our fish.

Joint venture with Biomar in Chile, one of the world’s leading suppliers of high performance fish feed. 126,000 tons of installed capacity. Modular design allows the company to double its output capacity.

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AquaChile:

Strong organic growth plan based on unique assets Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Sea Water: High quality and diversified license portfolio Global presence and reputation

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AquaChile has over 230 clients in more than 30 countries in the five continents We have more than 19 years of experience in Asia and over 20 years in the fresh salmon market

Source: The Company

Destination of AquaChile’s main Salmon, Sea Trout and Tilapia sales

In net tons

Commercialization:

Global presence and reputation.

Operations Salmon and Sea Trout sales 2012 (net tons) Tilapia Sales 2012 (net tons)

Salmon Tilapia

3.690 1.012 810 274 16.577 54 127 21 84 23 127 78 6.870 127 793 1.859 6.709 157 132 2.018 5.563 146 32 1.230 867 2.094 , 1.505 268

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The only Salmon & Tilapia company with

• perations inside Miami International

Airport Improved cold chain Less handling involved

AquaChile Inc:

Servicing the United States from Miami.

Experienced customer service Reliability and commitment We deliver!

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Renowned Brands Reputable Clients

Our brands and

• ur main clients.

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03

Industry Performance & New Regulation

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0% 5% 10% 15% 20% ago-08 dic-08 abr-09 ago-09 dic-09 abr-10 ago-10 dic-10 abr-11 ago-11 dic-11 abr-12 ago-12 dic-12 abr-13 ago-13

Pacific Salmon Atlantic Salmon Sea Trout

Chilean industry

Productivity performance

Significant mortality reduction in the industry since 2009 Sea lice level increasing according to the increase in the industry biomass

Source: Aquabench

Monthly mortality rates (%)

0,6 7,4 5,9

10 20 30 40 50 60 70 mar-07 jul-07 nov-07 mar-08 jul-08 nov-08 mar-09 jul-09 nov-09 mar-10 jul-10 nov-10 mar-11 jul-11 nov-11 mar-12 jul-12 nov-12 mar-13 jul-13 Pacific Salmon Atlantic Salmon Sea Trout Sea lice monthly monitoring 2007-2013 (Number of sea lice per fish)

Source: Aquabench, Sernapesca

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Ova imports with no restrictions. Non-existence of biosecurity standards. Low-quality Smolts. Inadequate regulation. Excessive densities. Non-interrupted cycles, with no fallowing. Deficient coordination among production sites. Low usage and low quality vaccines.

0% 5% 10% 15% 20% mar-08 ago-08 ene-09 jun-09 Pacific Salmon Atlantic Salmon Sea Trout 20 40 60 80 mar-07 ago-07 ene-08 Pacific Salmon Atlantic Salmon Sea Trout Monthly mortality rates (%) Sea lice monthly monitoring (Number of sea lice per fish)

Consequences

Sea lice Crisis ISAv Crisis

Origin of the sanitary crisis:

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New regulations

Structural Changes in the Industry: Controlling Risk

AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon

Fresh water

AS ST PS Restrictions and new sanitary protocols on egg imports and hatchery use

✓✓✓

Individual Screening of Broodstock

✓✓✓

Affluent and effluent treatment

✓✓✓

Land based hatcheries

✓

Safe mortality disposal

✓✓✓

Standardization and validation

• f diagnostic laboratories

✓✓✓

Smolts: ISA free certification before transferring to the sea

✓✓✓

Safeguards and optimization of freshwater production

✓✓✓

Clear and strong disinfection protocols

✓✓✓

Sea water

AS ST PS Sanitary areas

✓✓✓

Operating and fallowing schedules in sanitary areas

✓✓✓

Macrozone definition: 4 in the XthRegion and 3 in the XIthRegion

✓✓✓

Corridors definition between macrozones (5 miles)

✓✓✓

Minimum distance between licenses (1.2-1.7 miles) and sanitary areas (3.5 miles)

✓✓✓

Re-location of licenses located in corridors ✓✓✓ New licenses granted for 25 years with the option to be renewed

✓✓✓

Sanitary zoning for diseases

✓✓✓

Strengthening of control powers (biomass stamping out in case of disease) and forfeiture conditions of the farming licenses

✓✓✓

Establishment of specific sanitary programs for ISA, Sea Lice and SRS

✓✓✓

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AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon

Sea water (Cont..)

AS ST PS Improved adherence of legal framework regarding sanitary and environmental issues

✓ ✓ ✓

Coordinated programs for sea lice control

✓ ✓

Safe mortality disposal

✓ ✓ ✓

No fish movements between marine sites

✓ ✓ ✓

Restrictions and new sanitary protocols for wellboats

✓ ✓ ✓

Application of maximum farming densities in the sanitary areas

✓ ✓ ✓

Standardization and validation of diagnostic laboratories

✓ ✓ ✓

Re-location allowed in the XIth Region

✓ ✓ ✓

License application suspended in the Xth and XIth Region until 2015

✓ ✓ ✓

Penalties increase (penalty equal to economic value of biomass)

✓ ✓ ✓

Increase in patents: more resources for research

✓ ✓ ✓

New regulations

Structural Changes in the Industry: Controlling Risk

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AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon

Final steps on the legal framework : pending final decree

AS ST PS Flexibility in the fallowing period of licenses

• Extended fallowing periods without expiring dates
• Licenses located in corridors allowed to stand by without expiring

✓ ✓ ✓

Density restriction per license Biosafety qualification regarding mortality records from the last productive cycle

• Low mortality: maximum allowed density
• High mortality: stocking restrictions

✓ ✓ ✓

Density restriction per sanitary area

• The sanitary area density will determine the maximum number of fish to stock in each pen, except

those licenses with low mortality performance during the last productive cycle (less than 15%)

• The density will be determined by:
• Environmental performance (10%): Number of licenses presenting aerobic conditions at the end
• f the productive cycle
• Sanitary performance (65%): Total mortality within the last period
• Productivity performance (25%): Stocking intention in the sanitary area compared with the
• ptimal stocking
• Optimal stocking in the sanitary area depends of the mortality in the last productive cycle.
• Low mortality: optimal stocking increase in 16%
• High mortality: optimal stocking decrease 24%

✓ ✓ ✓

New regulations

Structural Changes in the Industry: Controlling Risk

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New regulations

Structural Changes in the Industry: Controlling Risk

Density restriction per License

Mortality Biosecurity Level Next Cycle Smolt stocking ] 0% ; 15% ] High Maximum allowed density ] 15% ; 18% ] Medium High 10% smolt stocking reduction ] 18% ; 22% ] Medium 20% smolt stocking reduction ] 22% ; 26% ] Low 1 40% smolt stocking reduction > 26% Low 2 60% smolt stocking reduction

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New regulations

Structural Changes in the Industry: Controlling Risk

Environmental Performance:

Weight Rank (%) Score 10% ]75,100] 100 ]50;75] 75 ]25;50] 50 [0;25] 25

Sanitary Performance:

Weight Rank (%) Score 65% [0%,15%[ 100 [15%;17%[ 75 [17%;20%[ 50 >20% 25

Productive Performance:

Weight Rank (%) Score 25% [0%,100%[ 100 [100%;110%[ 75 [110%;120%[ 50 >120% 25

Score Biosecurity Level Permitted Pen Density ] 85 ; 100 ] High Atlantic Salmon: 17 kg / m3 Sea Trout: 12 kg / m3 Pacific Salmon: 12 kg / m3 ] 64 ; 85 ] Medium Atlantic Salmon: 15 kg / m3 Sea Trout: 11 kg / m3 Pacific Salmon: 11 kg / m3 ] 43 ; 64 ] Low 1 Atlantic Salmon: 13 kg / m3 Sea Trout: 10 kg / m3 Pacific Salmon: 10 kg / m3 ] 0 ; 43 ] Low 2 Atlantic Salmon: 11 kg / m3 Sea Trout: 8 kg / m3 Pacific Salmon: 8 kg / m3

Density restriction per Sanitary Area*

* Apply for licenses with more than 15% mortality in the last cycle

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New regulations

Structural Changes in the Industry: Controlling Risk

Final steps on the legal framework : pending final decree

AS ST PS Smoltification in lakes, rivers and brackish water

• Minimum distance between smoltification sites and on growing sites / gathering sites / docks for

aquaculture operations (3 miles)

• Smoltification area must be located in disease free area from list # 2 with specific sanitary control

program

• However Sea Trout and Pacific Salmon smoltification area can be located in surveillance area from list

# 2 with sanitary control program for 3 years

✓ ✓ ✓

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04

Sustainability and Stakeholders

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• More than

5,100

employees in Chile, Costa Rica, Panama & United States

• Benefits above legal requirements
• On the job training
• Costa Rica: ISO 14001:2004, OHSAS 18001:2007 and BAP for Global Aquaculture

Alliance, the most demanding at present

• Chile: Global GAP certification in progress
• Social Responsibility Report available (www.aquachile.com/sustainability)

OUR LABOR AND ENVIROMENTAL STANDARDS

We are committed

to our employees, our clients and the environment.

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• To produce quality, healthy and safe food
• To act in a proactive and respectful way towards the environment
• To develop in a safe and healthy work environment
• To benefit the communities and suppliers in the places where the

company operates

OUR CORPORATE SOCIAL RESPONSIBILITY PRINCIPLES

We are committed

to our employees, our clients and the environment.

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We are committed

to our employees, our clients and the environment.

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05

New Developments

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Disease free eggs

recirculation hatchery: Chaicas.

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State of the art

research facility: Lenca.

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Alejandro Cristian Verlasso salmon Verlasso farms

Harmoniously raised fish

www.verlasso.com

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Fish feed in Costa Rica:

association with Biomar.

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Pet food flavoring plant:

association with SPF.

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Note on forward-looking statements This report includes forward-looking statements. These may include words like “anticipates”, “estimates”, “expects”, “projects”, “intends”, “plans”, “believes”

• r
• ther

comparable expressions. Forward-looking statements do not represent past events, including statements on the beliefs and expectations of the company. These statements are based on current plans, estimates and projections, and therefore cannot be overrated. Forward-looking statements entail certain risks and uncertainties. The company notes that a significant number of factors could result in current results to differ materially from those contained in any forward-looking statement. These factors and uncertainties include in particular those described in the document that the company submitted to the Chilean Securities and Insurance Commission (SVS), section on Risk Factors. Forward-looking statements are related only to the date when they are made and the company assumes no

• bligation to publicly update any such statements in the

presence of new information, future events or otherwise. This document purports to deliver general information on Empresas AquaChile S.A. Under no circumstance does it constitute an exhaustive analysis of the financial, productive, commercial and health situation of the company, and therefore any consideration on the advisability of acquiring

• r selling securities of the company would require the

interested party to conduct an independent analysis. In accordance with applicable standards, Empresas AquaChile S.A. has sent its financial statements and notes to the Securities and Insurance Commission, which are available for consultation and analysis on its webpage at www.svs.cl and also at www.aquachile.com.