long-term trends and opportunities Schouw & Co. CEO Jens Bjerg - - PowerPoint PPT Presentation
Deep dive into BioMar and the long-term trends and opportunities Schouw & Co. CEO Jens Bjerg Srensen BioMar CEO Carlos Diaz 9 December 2019 Agenda SCHOUW & CO. Very short introduction 2019 status and current outlook Jens
Schouw & Co. CEO Jens Bjerg Sørensen BioMar CEO Carlos Diaz 9 December 2019
SCHOUW & CO. ▪ Very short introduction ▪ 2019 status and current outlook Jens Bjerg Sørensen, CEO Schouw & Co. BIOMAR ▪ The World of BioMar ▪ Trends, developments, future Carlos Diaz, CEO BioMar QUESTIONS ▪ Discussion and debate
3 SCHOUW & CO. STRATEGY
Bigger and stronger portfolio Consolidating the conglomerate Go Strong Diversification
1988 2001 2006 2016
From focused packaging business to a diversified industrial conglomerate Adding new businesses in the portfolio to create a conglome- rate with scale and strength Strengthening by capex and bolt-on acquisitions and di- vestment of non-core activities Sustaining the growth platform and adding new businesses to the portfolio
2020
Consolidated revenue DKK billion
1988 2020E 2016 2001 2006
7.4 14.4 0.3 +20 2.2 CAGR +17% CAGR +27% CAGR +7% CAGR +11% No new
platform investments
GPV and Borg
new platform investments
Elopak and Martin
new platform investments
Fibertex and BioMar
new platform investments
Vis/skjul grid: ALT+F9
SCHOUW & CO. STRATEGY
Structuring the wind industry Micon / Nordtank / Vestas Creating a European giant by merger of Grene and Kramp Strengthening Schouw & Co. by acquisition of BioMar Trebling Hydra by acquisition of Specma Divestment of Martin Professional Doubling GPV by acquisition of CCS Fibertex Personal Care’s Malaysian greenfield expansion Unfolding potential by demerger of Fibertex Global expansion of BioMar by acquisition of Provimi Divestment of Elopak Divestment of Schulstad BioMar’s entrance in shrimp by acquisition of Alimentsa Internationalising Fibertex by acquisition of Tharreau Unlocking value by demerger of Grene Divestment of Kramp
94/97 2004 2013 2005 2015 2012 2018 2003 2011 2008 2006 2002 2017 2011 2009 2016
Vis/skjul grid: ALT+F9
5 SCHOUW & CO. STRATEGY
▪ Good comfort on 2019 Group guidance ▪ Different impacts and dynamics going into 2020 ▪ BioMar non-cyclical ▪ Long-term megatrend driven demand across all businesses ▪ Better than expected development in Norway ▪ Solid 2020 contract base and higher capacity than in 2019 ▪ Solid sale of funct. feed ▪ 2019 benefits significantly from FX and positive raw material regulations ▪ Intense competition to continue in 2020 ▪ Asian dynamics changing ▪ Strategic review confirms long-term potential ▪ Decline in automotive hard to compensate ▪ Good product pipeline, e.g. in nano ▪ Very successful 1st phase
▪ Soft demand from selected customers ▪ Many potential orders and customers in 2020-2021 ▪ Strong outlook in wind ▪ Vehicle segment soft, bullwhip effect in 2019 Q4 ▪ Cost base lowered going into 2020 ▪ Decline in sales have reached the bottom ▪ Remanufacturing fundamentally demanded ▪ Short-term uncertainty on core prices
Comfort
Low High Low High Low High Low High Low High Low High Low High
Comfort Comfort Comfort Comfort Comfort Comfort
Vis/skjul grid: ALT+F9
6 SCHOUW & CO. STRATEGY
Notes: 1) Including capital increase and dividend adjustment prior to acquisition
894
111 2006-2010 dividends 2012 dividend 2014 dividend 2016 dividend 2005 acquisition 2008 share swap1 300 150 200 300 2015 dividend 2011 dividend 200 2013 dividend 2018 dividend BioMar purchase value 2019 dividend "Cash Flow" to date 1,516 623 250 200 200 200 2017 dividend ’06 ’07 ’08 ’17 ’13 ’11 ’16 ’09 ’10 ’12 ’14 ’15 ’18 ’19 3.3 ~11.0 +10% ’06 ’13 ’07’08’09 ’12 ’10 ’11 ’14’15’16’17’18’19 202 600-630 +9%
Carlos Diaz
CEO in BioMar since 2014 Part of BioMar since 2000 Educated veterinarian Originally responsible for building BioMar organisation in Chile Solid profitable growth since Schouw & Co.’s acquisition in 2005…
Revenue
DKK billion
EBIT
DKK million
…and a long-term highly value-creating investment for Schouw & Co.
DKK million
Schouw Investor Day December 2019
Double production by 2050 without taking one more fish from the ocean or using any more agriculture land for crops. Aquaculture feed is responsible for up to 80% of the environmental impact
#ClimateAction
~50% Growth
2010 - 2050
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The World of BioMar
Trends & Developments
In the Spotlight
The Future of BioMar
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The BioMar Portfolio Research & Development
The World of BioMar
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Turnover EUR ~1.5bn Only high performance aqua feed EBIT EUR ~80m Feeds 1 out of 5 farmed fish in Europe/Chile Sales volume ~1.35m tons Feed for +45 different species + shrimp Employees ~1,400 Owned since 2006 by Danish industrial conglomerate Schouw & Co. Sale to more than 80 countries
WE ARE INNOVATORS DEDICATED TO AN EFFICIENT AND SUSTAINABLE GLOBAL AQUACULTURE
Production Facilities & Sales
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13
16 sites
~1.7 mtons capacity
Volumes* (ktons)
730 880 850 900
2016 2017 2018 2019F
CAGR
+7%
Atlantic Salmon Coho Rainbow Trout
MS: 20-25% MS: 30-35% MS: 25-30%
Species Markets Headlines
* Including inter company sales & 100% Consolidation of JV’s
MS: N/A Comments
across all business units
to take place
Salmon
Volumes* (ktons)
Species Markets Headlines
* Including inter company sales & 100% Consolidation of JV’s
Rainbow Trout Sea Bass Sea bream Eel
Non exhaustive
MS: 45-55% MS: 20-25% MS: 5-10% MS: 25-30%
260 280 280 290
2016 2017 2019F 2018
CAGR
+4% Comments
professionalization & consolidation of the bass & bream segment
fundamentals still in place
Volumes* (ktons)
Species Markets Headlines
* Including inter company sales & 100% Consolidation of JV’s Non exhaustive
MS: N/A MS: 15-20% MS: 10-15% Tilapia Shrimp Japanese Sea Bass Rainbow Trout Sturgeon
Comments
more important part of BioMar
from acquisition
support our business concept
35 130 220 235
2018 2017 2016 2019F
CAGR
+89%
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Latest Moves
2019 2018 2020 2021 2022
CAGR +11%
Shrimp Feed Volumes by Country
(k tonnes)
Expected BioMar Volume Development
Brazil: ~ 100 Mexico: 200 Nicaragua: < 30 Honduras: < 75 Venezuela: < 40 Peru: < 40 Panama: < 14 Guatemala: < 30 Ecuador: ~ 750 Costa Rica: < 3
Tongwei establish a joint venture in China
fish yearly is produced by aquaculture in China, making it the biggest aquaculture country in the world Distance between Plants ~ 1300 km.
2022 2018 2019 2020 2021
CAGR
+14%
Wuxi Factory Haiwei Factory
Trout Sturgeon Tilapia Japanese Sea bass Tilapia Shrimp Snakehead Pomfret / Pompano Sea bass Sea bream Shrimp Tilapia Yellow croaker Shrimp Sturgeon Flat fish Crab Shrimp Sturgeon Sea bass Red drum
Expected BioMar Volume Development
Latest Moves
Production Facility Under Construction
performance feed, functional products and services. Market share have increased considerably.
into an acquisition agreement giving BioMar full
service and drive the development in this important market.
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Driving the development in Chile
Latest Moves
Volume kT
Pargua, Chile Castro, Chile
1.290 1.350 1.420 1.460 1.500
2021 2019 2018 2020 2022
CAGR +4%
Market Volume
Ercilla, Chile
Building a factory in Tasmania
Latest Moves
Construction of a feed factory in Tasmania - capacity of 110.000T of feed yearly A 5 year agreement signed with Huon for supply of feed Start of commercial production in Q1/Q2 2020, also for species like Barramundi, King Salmon etc.. Furthermore South East Asia is also reachable from our factory.
King (chinook) salmon Barramundi Yellowtail kingfish Rainbow trout
Other species than Atlantic salmon in Australia
UK Australia
Distance between Factories ~ 15 000 km.
Latest Moves
Company highlights
sales & distribution
mainly to USA, Japan and Asia (excl. Japan)
(farming zones)
1985 Founded 1988 Founded 2013 Merger in July SA produced
1990 - 2000 Focus on steady growth and consolidation in the market 2007 After ISA virus focus on more reliable structures 2012 SPS produced more than 18,000 WFR tons and Trusal more than 35,000 WFE tons 2018 Sales of around 45,000 WFE tons 2019 BioMar shareholding at 22,9% of Salmones Austral, book value 52 mUSD
EBIT / Kilo Comparison – H1 2019 (USD)
A leading Chilean seafood company with attractive farming licenses at strategic locations.
1,25 1,05 0,89 0,88 1,29 0,66 1,62 0,74 MHC Aquachile S.Austral Blumar Australis Camanchaca Multiexport NOVA
Possible IPO
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The BioMar Portfolio Research & Development
The World of BioMar
We make our contribution by utilising cutting edge technology at state-of-the-art research facilities around the world. BioMar’s R&D organisation is structured in three units which have different focus areas. Several R&D collaborations with universities and institutes across the world.
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Nutrition Unit works on identifying nutritional requirements and raw material knowledge by building biological models to support customers performance targets. Health Unit focuses on active components and nutrition to increase fish and shrimp health. Process Unit concentrates on
possibilities by developing knowledge on process and process effects on different raw materials.
Nutrition Unit Health Unit Process Unit
Our performance model drives cost efficiency in farming, our competitiveness allow us to gain Important contracts around the world Functional feeds are becoming increasingly important ~ 40% of sales today Our strong hatchery feeds & extruded shrimp feeds are the latest examples of our commitment to continuous improvements
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BioMar Global Innovation Network ATC Patagonia ATC Ecuador ATC LetSea ATC Hirtshals
All fish species
Fresh & salt water fish Shrimp
ATC
Aquaculture Technology Center
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Species, Geographies & Profit pools Trends in the market
Trends & Developments
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18% 22% 56%
4% Salmonids Seabrass & Seabream Shrimp Other
74% 8% 8% 11% 5% 6% 9% 17% 23% 41% 14% 36% 32% 10% 8%1%
Africa North Sea
China Americas Asia ex. China
17% 38% 37% 5% 1%
2%
World Distribution BioMar Distribution
2018 2023 2018
68% 11% 11% 11%
BioMar’s current core Markets not addressed by BioMar until recent entrance in Shrimp
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Profit pools in feed by species and geography (Rough estimations, EBIT mDKK, EBIT margin)
Other
275-300 275-300 725-750 525-550
Salmonid Shrimp
1275-1300 175-200 800-850 150-175 200-225 950-975 150-175 Africa Americas China Continental Europe Asia (ex. China) North Sea ~ 5% ~ 9% ~ 4%
% Estimated EBIT margin
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Species, Geographies & Profit pools Trends in the market
Trends & Developments
Feed Market
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Salmon – New Frontiers
Business Potential
and new markets
Feed Market
Business Potential
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Shrimp – Raising the bar
Feed Market
Indonesia
Business Potential
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Marine fish – Attractive opportunities
Feed Market
Business Potential
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Freshwater fish – Volume
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Sustainability Dynamic Solutions & Value Chain collaborations Recirculation (RAS)
In the Spotlight
Sustainability starts with the feed
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
1990 1995 2000 2005 2010 2015 2020 2025 2030
Raw material inclusion level
Salmon feed has evolved over time
OVERALL NORWAY BIOMAR NORWAY BIOMAR FUTURE? PLANT PROTEINS BLOOD MEAL PLANT OILS KRILL MEAL SINGLE CELL RMs INSECT MEAL Plant proteins (soy) is used at larger extent Blood meal is used, but is phased out due to fear of Mad Cow decease Plant oil (soy/ rapeseed) makes its entry, strongly driven by El Niño Krill meal is put into use Nutrients produced by single cell
use and higher inclusion is expected Insect meal is expected to be used
Concepts & product development Key ingredient highlights Raw material inclusion levels
BIO-OPTIMAL PERFORMANCE 1, 2 & 3 (OPEN FORMULATION) BRANDING (OF & BΩT)
The majority of the diet will still be vegetables
More by-product ingredients and trimmings More ingredients from lower trophic levels More ingredients from single cell technologies
Purpose: “We are innovators dedicated to an efficient and sustainable global aquaculture” Guiding principles: Innovation | Cooperation | Sustainability | Performance
Governance & CSR EEM & LCA Triple S Reporting & Communication MFA
(SAAT) (Dashboard)
Building trust through transparency
Scan the QR code with your phone camera to Discover Kvarøy Salmon
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Sustainability Dynamic Solutions & Value Chain collaborations Recirculation (RAS)
In the Spotlight
Documentation: Analytics & Reporting tools > Traceability & Transparency Rewards & Recognition
Consumer Value & Satisfaction Feed Production Fish Production Product Claims Hot Topics Raw Materials Compounding Converting Brands Retail
A
Technology Push Market Pull
B
Technology
processing excellence
value
Leveraging a growing consumer trend to know where our food comes from and what is in it. Discover Tool - Building Trust BioMar provides feed recipes with full transparency and traceability right back to the raw material and incorporates it with
Dynamic Solutions
Big Moves
Aquaculture feeds targeted to consumer needs Health Growth Dynamic Solutions
Customer Consumer
Human Health Sustainability Culinary
Organic Natural feeds Environmental footprint FCR, FIFO CO2 Label Rouge Algae-fed seafood
with high value seafood like Salmon
needed for first movers
market
the way for other species
Value Chain Collaborations
Big Moves
Decommoditising seafood & aquaculture feeds Human Health
2004
Lochmuir Produced by Scottish Seafarm in UK. Differentiated offering is supporting M&S point of difference. Higher levels of omega3s Improved consumer eating experience
Sustainability
2017
Silverside Produced by Ventisqueros with sales and distribution by BluGlacier USA Algae-fed salmon Great colour 28-30 FFDR 0.5 & FIFO 0.5
Culinary
2014
“In the Blue” Custom-made innovative feed concept using microalgae. Salmon produced by Kvaroy in Norway. FIFO ratio below 0,5 -1 Rated Good Alternative by Monterey Bay Aquarium Seafood Watch program.
2019
Salvea BioMar feed concept for trout developed with Pirinea but available to all trout farmers. Natural feeds with ingredients naturally found in nature.
In market
Label Rouge Aquafeed recipes based on French culinary excellence
2020
IMPACT BioMar sustainability feed concept
Niche Mass Market To date, over 500.000 tonnes of feed sold worldwide 2019 2020 2014 2004 2017 In Market
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Sustainability Dynamic Solutions & Value Chain collaborations Recirculation (RAS)
In the Spotlight
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Recirculation
Latest moves – BioMar is on the ball!
Picture source: atlantic sapphire
BioMar in RAS
species, however, we will undoubtedly expand and utilise our knowledge and expertise to other species, where applicable. Rabobank: RAS could be a disruptor in the next 10 years with 25% of expected growth in the total Salmon supply out to 2030. More than 50 publicly announced RAS projects on Salmon
metric tons by 2030
2022 2019 2020 2023 2021
CAGR
+130%
Expected BioMar Volume Development
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BioMar Strategy Concluding remarks
The Future of BioMar
2023 Strategic Ambition
Volume: +50% | EBIT x 2
COMMERCIAL ACTIVITIES
Strengthen the Core
Strengthen position in Salmon Further develop EMEA
Broaden the Reach
Succeed in China Grow and sustain profit level in Ecuador Expansion Possibilities Succeed in Australia Revitalize Hatchery
Shape the Future
Solution Provider Obtain significant RAS position
ENABLERS (GROUP FUNCTIONS)
Global alignment R&D/ innovation Sourcing Sustainability People & Organisation Manufacturing excellence Business development
IT
I N N O V A T I O N ● C O L L A B O R A T I O N ● S U S T A I N A B I L I T Y ● P E R F O R M A N C E
“In collaboration with industry partners BioMar acts as a catalyst for change, developing pragmatic solutions that will progressively transform aquaculture”
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Sustainable Development Goals
Global Strategy linked to UN Goals
# ClimateAction
“home” markets and species
increase its importance even further
“new” geographies & species
attractive opportunities going forward
e.g. Offshore & RAS
& Innovation even more important in the future
BioMar Group is much more than BioMar Norway ~ 10% of Group EBIT