Q1 2015 - - PowerPoint PPT Presentation

griegseafood.com

Grieg Seafood ASA

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Q1 2015

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Agenda

• Highlights
• Business Units (Regions)
• Financials
• Outlook

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HIGHLIGHTS Q1 2015

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Highlights Q1 2015

• EBIT before fair value adjustment of biomass was MNOK 70 in Q1 (MNOK 143 in 2014).
• Production has been good throughout the period, with volume indication for 2015 maintained at

72 000 tons. Some of the expected Q1 volume has been moved to Q2.

• High costs on harvested fish in the company’s European regions.
• Higher production and lower costs in BC.
• Strong underlying market in Europe, but price pressure as a consequence of increased offer and

a closed Russian market. Considerable falling/descending prices in the American market.

• With the establishment of Ocean Quality in North America, sales from all GSF regions are now

handled through this organisation.

• OQ is consolidated as a subsidiary of GSF.

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Financial highlights Q1 2015

• EBIT/kg excl. non-controlling interest OQ: NOK 4.9.
• 0.1% volume decrease.

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Q1 2015 Q1 2014

Total operating income (TNOK) 1 033 616 1 026 275 EBITDA (TNOK) 108 047 175 687 EBIT before fair value adj. (TNOK) 70 042 143 246 EBIT / kg (NOK) 5,35 10,94 Harvest volume (tons gwe) 13 081 13 095

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BUSINESS UNITS (REGIONS)

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Business units performance – Q1 2015

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EBIT before biomass adjustment/KG gwt

Q1 15 Q1 14 Q1 15 Q1 14 Q1 15 Q1 14 Q1 15 Q1 14 Harvest (gwt) 2 761 2 138 5 042 5 775 1 840 1 053 3 438 4 129 Sales MNOK 121 110 192 256 74 59 195 199

Rogaland Finnmark BC Scotland

5,82 9,52 4,71 15,94 7,25

• 5,44

3,28 10,08

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GSF Rogaland

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• Sea production was stable

throughout Q1.

• Harvest from PD locations and

with large treatment costs resulting in high Q1 2015 cost.

• Cost expected to still be high in

Q2, then moving down.

Q1 2015 Q1 2014

Harvest (gwt) 2 761 2 138 Sales revenues 120 730 110 480 EBIT 16 067 20 347 EBIT/kg 5,82 9,52

• f which Markets NOK/kg

1,02 0,40

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GSF Finnmark

• Sea production was stable throughout

Q1.

• The EBIT of NOK 4.7 per kilo includes

profit of NOK 0.9 per kilo related to sale

• f a well boat.
• Cost in Q1 was high as fish were

harvested from inefficient locations.

• Low harvest volume in 2015 will affect

the cost negatively.

• In 2016 harvest volume will increase and

cost will move down.

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Q1 2015 Q1 2014

Harvest (gwt) 5 042 5 775 Sales revenues 192 320 255 960 EBIT 23 769 92 080 EBIT/kg 4,71 15,94

• f which Markets NOK/kg

0,35 0,05

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GSF BC (Canada)

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• Ocean Quality was established in

North America in Q1. The contribution from sales was NOK 1 per kilo in Q1 2015.

• The biological situation was

favourable in 2014 and the production volume in the region has

• increased. The overall effect of this is

reduced cost of harvested fish in Q1 2015.

• Sea and smolt production was also

stable throughout Q1 2015.

• Price pressure due to large Canadian

industry supply increase.

Q1 2015 Q1 2014

Harvest (gwt) 1 840 1 053 Sales revenues 74 033 58 562 EBIT 13 342

• 5 724

EBIT/kg 7,25

• 5,44
• f which Markets NOK/kg

0,98

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GSF Shetland

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• Ocean Quality continues to show

good margins. Contribution from sales NOK 2 per kg in Q1.

• Sea and smolt production was stable

throughout Q1 2015.

• The fish harvested in Q1 were

characterised by high sea lice treatment costs.

• Processing of fish (filleting and

smoking) has been temporarily stopped.

• High costs in Q2 due to gill disease

and lice challenges on ‘13 generation to be harvested.

• First smolt batch from new hatchery.

Q1 2015 Q1 2014

Harvest (gwt) 3 438 4 129 Sales revenues 194 903 198 682 EBIT 11 285 41 618 EBIT/kg 3,28 10,08

• f which Markets NOK/kg

2,01

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Ocean Quality (GSF 60%, Bremnes 40%)

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• Total margin moving up in Norway.
• High margin in UK.
• Positive margin in North America

in the first quarter with a new sales organization.

Norway: UK: North America:

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Improvements and targets

• Prosesses
• “Keep the fish alive”
• Focus on planning, execution and

quality

• Organize for best practice
• Install “sense of urgency” in
• rganization
• “Future foundation” – ITC

integration

• Targets
• Be the best farmer in our regions on

cost

• Mortality below 14% on generation

(93%yearly survival)

• Increase MAB utilization to 1200 t gw

per year (Norway)

• Segmentation of markets to maximize

price

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Financials

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Profit and Loss

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All figures in NOK 1,000 Q1 2015 Q1 2014 Total operating income 1 033 616 1 026 275 EBITDA 108 047 175 687 Depreciation and amortisation

• 38 006
• 32 441

EBIT before biomass adj 70 042 143 246 Fair value adj biological assets

• 112 793
• 50 983

EBIT after biomass adj.

• 42 751

92 263 Share of profit from ass. companies 889 1 669 Net financial

• 25 361
• 22 177

Profit before tax

• 67 223

71 756 Estimated taxation 15 838

• 15 406

Net profit in the period

• 51 385

56 350

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Net financial

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All figures in NOK 1,000

Q1 2015 Q1 2014

Changes in fair value from hedging instruments

• 5 604

1 496 Net financial interest

• 22 614
• 21 043

Net currency gain (losses) 3 544

• 1 874

Dividends Net other financial expenses/-income

• 688
• 755

Net financial item

• 25 361
• 22 177

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Investments

Maintenance level 17

Capex

* Green licenses Finnmark included in 2014 figures – 40 MNOK

*

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Cash Flow

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Q1 2015 Q1 2014

Cash - opening balance 181 498 182 258 EBITDA 108 047 175 687 Inventory, trade payables and trade receivables

• 4 107
• 50 766

Other adjustments 15 530

• 25 885

Cash flow from operations 119 470 99 036 Capital expenditure (fixed assets)

• 119 779
• 40 711

Investments in associated companies/shares Change in other non-current receiveables

• 17
• 2

Cash flow from investments

• 119 796
• 40 713

Changes in interest-bearing debt 37 673 64 968 Paid dividends Net interest and financial items

• 19 073
• 20 293

Cash flow from financing 18 600 44 675 Currency effect on cash - opening balance 1 448 971 Changes in cash (incl currency effect on cash) 19 722 103 969 Cash - closing balance 201 220 286 227

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Net Interest Bearing Debt/EBITDA

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NIBD

(excl factoring)

NIBD/EBITDA

(according to covenants)

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NIBD

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MNOK

Q1 2015 Q1 2014

Term Loan 833 530 Revolving Credit 275 500 Bond 400 400 Leasing 309 218 Other interest bearing debt 12 5 Cash - closing balance

• 201
• 286

NIBD excl factoring 1 627 1 367 Factoring 155 206

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Balance sheet 1

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ASSETS

31.03.15 31.03.14

Goodw ill 108 997 107 155 Licenses 1 073 923 987 496 Other intangible assets 13 974 5 185 Property, plant and equipment 1 475 818 1 202 010 Investments in associtated and joint venture companies 29 078 31 569 Other non-current assets 2 828 1 634 Total non-current assets 2 704 617 2 335 050 Inventories 92 612 60 371 Biological assets 1 655 074 1 372 663 Fair value biological assets 168 385 350 253 Accounts receivable 394 446 369 116 Other current receivables 96 788 100 845 Derivates and other financial instruments Cash and cash equivalents 201 220 286 227 Total current assets 2 608 524 2 539 476 Total assets 5 313 142 4 874 526

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Balance sheet 2

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EQUITY AND LIABILITIES

31.03.15 31.03.14

Share capital 446 648 446 648 Treasury Shares

• 5 000
• 5 000

Retained earnings and other equity 1 758 206 1 595 540 Total equity 2 199 854 2 037 188 Deferred tax liabilities 545 237 566 245 Pension- and other obligations 1 612 788 Subordinated loans 22 900 21 679 Borrow ings and leasing 1 257 164 1 001 944 Total non-current liabilities 1 826 914 1 590 656 Short-term loan facilities 562 117 646 016 Factoring 154 916 205 758 Accounts payable 339 908 278 023 Tax payable 55 254 2 805 Derivates and other financial instruments 30 526 6 939 Other current liabilities 143 652 107 141 Total current liabilities 1 286 374 1 246 682 Total liabilities 3 113 287 2 837 338 Total equity and liabilities 5 313 142 4 874 526

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Key financial indicators

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Q1 2015 Q1 2014

EBITDA-margin before adj biomass 10 % 17 % EBIT-margin before adj biomass 7 % 14 % NIBD/EBITDA before adj biomass 4,0 2,4 ROCE before adj biomass 7 % 18 % Equity ratio 41 % 42 %

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OUTLOOK

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Harvest estimate

• 2015 guidance of 72,000 MT.
• Production in BC close to normal.
• Finnmark/Shetland guiding down due to site/area structure, expected to increase in

2016.

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Guiding 2015 (1,000 tons gw e)

Rogaland Finnmark BC Shetland GSF Group

Q1 2,8 5,0 1,8 3,4 13,1 Growth % 29 %

• 13 %

75 %

• 17 %

0 % Q2 6,4 1,1 5,5 3,7 16,7 Growth % 18 %

• 86 %

225 %

• 5 %
• 12 %

Q3-Q4 11,4 15,8 5,7 9,4 42,3 Growth % 117 % 24 % 62 %

• 16 %

29 % Total 20,5 22,0 13,0 16,5 72,0 Growth % 60 %

• 17 %

108 %

• 14 %

11 %

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Supply outlook

• Global supply growth moving down, 2015 vs 2014 expected

to be 3% .

• Norway - stable growth rate:
• 2014: +5%
• 2015: +5% (1,135’ MT)
• Chile – form positive to negative growth rate:
• 2014: +25%
• 2015: -3% (508’ MT)
• Canada – from negative to positive growth rate:
• 2014: -11%
• 2015: +19% (130’ MT)
• UK – stable growth rate:
• 2014: +9%
• 2015: +4% (161’ MT)

Global supply growth farmed salmon (YoY):

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NASDAQ (Norway) price development :

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Outlook summary

• Limited supply growth is expected to result in a strong market in the period ahead, but with the

possibility of regional variations in the short term.

• Harvest volume guiding 2015 of 72,000 MT. Increasing 7,000 MT vs 2014. Growth expected to continue in

2016.

• The harvested volume in Q2 2015 is expected to be 16,700 MT.
• It is expected high costs for the fish which will be harvested in the company’s European regions in Q2.
• Ocean Quality has expanded its activities to include the sale of GSF’s fish in BC. All of the fish produced

by GSF is now sold through Ocean Quality,

• Short term price pressure in North America
• New CEO, Andreas Kvame, will start 1 June 2015.
• The company’s main goal is lower cost through continuous improvement of biological performance,

including better utilisation of licences/equipment.

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Thank you !

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APPENDIX

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Share info

−

Number of shares

• 111.7 million (after full conversion of bonds in August 2009).

−

Last issues: Q2 2009

• 139 MNOK new share issue.

−

Subordinated convertible bond issue: Q1 2009

• 100 mill. convertible at NOK 4.00 per share within 31.12.2010.
• 85% converted in Q2 2009.
• 15% converted in Q3 2009.

−

EPS

• 0,5 NOK/share Q1 2014.
• 0,5 NOK/share Q1 2015.

−

Shareholder structure

• Largest 20 have 94.12% of total no. of shares.

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Shareholders

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• No. shares

%

GRIEG HOLDINGS 55 801 409 49,97 % DNB NOR MARKETS, AKSJEHAND/ANALYSE 22 260 036 19,94 % NORDEA BANK NORGE ASA MARKETS 6 605 998 5,92 % KONTRARI AS 6 559 309 5,87 % YSTHOLMEN 2 928 197 2,62 % OM HOLDING AS 2 610 000 2,34 % STATE STREET BANK AND TRUST CO. 1 295 901 1,16 % GRIEG SEAFOOD ASA 1 250 000 1,12 % KVASSHØGDI AS 1 000 000 0,90 % GRIEG SHIPPING II AS 824 565 0,74 % SKANDINAVISKA ENSKILDA BANKEN AB 822 349 0,74 % VERDIPAPIRFONDET PARETO NORDIC 475 000 0,43 % STOREBRAND VEKST 447 713 0,40 % VERDIPAPIRFONDET DNB SMB 444 814 0,40 % THE BANK OF NEW YORK MELLON 402 271 0,36 % HSBC BANK PLC 382 691 0,34 % MP PENSJON PK 276 944 0,25 % SVENSKA HANDELSBANKEN AB 270 970 0,24 % SKANDINAVISKA ENSKILDA BANKEN AB 223 423 0,20 % GRIEG LTD A/S 217 390 0,19 %

Total 20 largest shareholders

105 098 980 94,12 % Total other 6 563 020 5,88 %

Total numbers of shares

111 662 000 100,00 %

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Profit and Loss

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All figures in NOK 1,000

Q1 2015 Q1 2014

Total operating income 1 033 616 1 026 275 Share of profit from joint venture 5 810 1 766 Change in inventories 92 974 12 062 Raw materials and consumables used

• 690 814
• 621 629

Salaries and personnel expenses

• 100 452
• 80 343

Other operating expenses

• 233 087
• 162 443

EBITDA 108 047 175 687 Depreciation and amortisation

• 37 351
• 32 155

Depreciation and amortisation of licenses

• 655
• 286

Impairment adjustments on assets EBIT before biomass adj 70 042 143 246 Fair value adj biological assets

• 112 793
• 50 983

EBIT after biomass adj.

• 42 751

92 263 Share of profit from ass. companies 889 1 669 Net financial

• 25 361
• 22 177

Profit before tax and biomass adj 45 570 122 739 Profit before tax

• 67 223

71 756 Estimated taxation 15 838

• 15 406

Net profit in the period

• 51 385

56 350