Lerøy Seafood Group SEPTEMBER 2018
1. Lerøy Seafood Group 2. Key market trends supply and demand
Our vision To be the leading and most profitable global supplier of sustainable high-quality seafood
History a company in growth Trace it operations back to 1899 Significant acquisitions made sine 1999 Among the world s largest producers of salmon and trout A significant player in catch of whitefish for human consumption Distribution network in Europe, and global sales activities
NOK million Revenue Lerøy Seafood Group 20 000 15 000 10 000 5 000 0 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1995 1990 1985 1980
Lerøy Seafood Group ASA Farming Wild catch VAP, Sales and Distribution 6
Farming geographic diversification Lerøy Aurora Integrated value chain Lerøy Aurora (salmon) Lerøy Midt (salmon) Lerøy Sjøtroll (salmon and trout) UK through JV with SalMar Lerøy Midt Expected volume incl. share of associates in 2018 of 179,000 GWT of salmon and trout Investing for growth through new RAS facilities Lerøy Sjøtroll 7
Havfisk and Norway Seafoods Havfisk Norway s largest trawler company 11% of the Norwegian white fish quota Fleet of 9 active vessels (and 1 ordered for delivery 2020 A highly modern fleet (considerable investments in recent years) All fish are headed and gutted on board Expected catch volum in 2018 of ~65,000 tons Lerøy Norway Seafoods Lerøy Norway Seafoods is one of Europe s leading companies for processing of wild caught whitefish Norway s largest sourcing network for whitefish 12 processing and purchasing plants in Norway Access to some 40-50,000 tons whitefish from 3 parties
Strong downstream distribution Global reach and sales to more than 70 countries Signficant collaboration with 3 parties for sourcing of seafood A significant industrial activity within trading, processing, sales and distribution of fish (including white species) Global sales network, significant downstream capacity in Europe Processing facilities Fish-cuts/fresh distribution facilities 9
NOK million Volume from own licenses and quotas. In addition more than 100,000 tonnes sourced from 3 parties 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 240 000 220 000 200 000 180 000 160 000 140 000 120 000 100 000 80 000 60 000 40 000 20 000 0 GWT Wild Catch (H/G) Salmon&Trout (GWT) Market Cap EV
Return on capital employed 35 % 30 % 25 % 20 % 15 % 18 %* 10 % 5 % 0 % 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 * Target communicated at the listing on Oslo Stock Exchange 03.06.2002
NOK million NOK million Annual dividend since 1995 Dividend & Dividend yield Market Cap & Dividend yield 900 800 700 600 500 400 300 200 100 0 200 0 2005 2010 2017 9 % 8 % 7 % 6 % 5 % 4 % 3 % 2 % 1 % 0 % 30 000 28 000 26 000 24 000 22 000 20 000 18 000 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 2000 2005 2010 2017 9 % 8 % 7 % 6 % 5 % 4 % 3 % 2 % 1 % 0 % The dividend in the table above is the proposed dividend based on present year`s profit, for distribution in the following year.
Key market trends
The history of the salmon industry in one slide
Margin and smolt release/seeding
Indicative cost curve and size of producing countries salmon farming Price 2017-2018 Source: Pareto
Atlantic salmon Supply in tons WFE Change Change Change Change Change Change Change 2013 12-13 2014 13-14 2015 14-15 2016 15-16 2017 16-17 2018 17-18 2019 18-19 Norway 1 143 600-3,3 % 1 199 000 4,8 % 1 234 200 2,9 % 1 171 100-5,1 % 1 207 800 3,1 % 1 297 900 7,5 % 1 354 900 4,4 % United Kingdom 157 800-1,0 % 170 500 8,0 % 166 300-2,5 % 157 400-5,4 % 174 300 10,7 % 157 000-9,9 % 176 600 12,5 % Faroe Islands 72 600 3,3 % 82 700 13,9 % 75 600-8,6 % 77 300 2,2 % 80 300 3,9 % 68 800-14,3 % 78 700 14,4 % Ireland 10 600-32,1 % 12 300 16,0 % 15 700 27,6 % 15 800 0,6 % 17 000 7,6 % 14 300-15,9 % 17 000 18,9 % Iceland 3 350 3,1 % 4 400 31,3 % 3 600-18,2 % 8 100 125,0 % 11 500 42,0 % 14 000 21,7 % 19 000 35,7 % Total Europe 1 387 950-3,1 % 1 468 900 5,8 % 1 495 400 1,8 % 1 429 700-4,4 % 1 490 900 4,3 % 1 552 000 4,1 % 1 646 200 6,1 % Chile 468 100 28,6 % 582 900 24,5 % 598 200 2,6 % 504 400-15,7 % 564 200 11,9 % 632 900 12,2 % 645 700 2,0 % Canada 115 100-15,7 % 95 000-17,5 % 135 200 42,3 % 146 000 8,0 % 140 000-4,1 % 148 400 6,0 % 152 000 2,4 % USA 20 300 3,6 % 24 000 18,2 % 20 200-15,8 % 22 500 11,4 % 21 700-3,6 % 18 000-17,1 % 17 500-2,8 % Australia 39 000-2,5 % 42 000 7,7 % 54 400 29,5 % 50 900-6,4 % 61 800 21,4 % 60 700-1,8 % 61 800 1,8 % Others 11 200 38,3 % 15 200 35,7 % 13 700-9,9 % 12 500-8,8 % 12 100-3,2 % 13 600 12,4 % 16 000 17,6 % Total Others 653 700 15,0 % 759 100 16,1 % 821 700 8,2 % 736 300-10,4 % 799 800 8,6 % 873 600 9,2 % 893 000 2,2 % Total World-wide 2 041 650 2,1 % 2 228 000 9,1 % 2 317 100 4,0 % 2 166 000-6,5 % 2 290 700 5,8 % 2 425 600 5,9 % 2 539 200 4,7 % Figures as per 16.08.2018 Source: Kontali
Demand trends salmon Volume x Price = Value
Drivers of salmon demand Volume x Price (EUR/kg) = Value CAGR 1996-2012: ~9% ~1% ~10% 20
A «revolution» in distribution of fresh seafood 22
Significant change in drivers in salmon demand (Measured in EUR) Volume x Price (EUR/kg) = Value CAGR 1996-2012: ~9% ~1% ~10% CAGR 2012-2016: ~0% ~20% ~20% 2017 Norway: ~3% ~2% ~+5% 2018 YTD Norway ~8% ~-8% ~1% 23
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Atlantic Salmon Consumption 2018 Q2 Market 2016 2017 2018 Chng Chng % EU 248 500 226 900 243 000 16 100 7 % USA 108 500 108 600 123 000 14 400 13 % Russia 14 300 14 900 22 500 7 600 51 % Japan 13 800 16 200 13 500-2 700-17 % Other Markets 145 800 150 900 157 500 6 600 4 % Total 530 900 517 500 559 500 42 000 8 % 300 000 250 % 250 000 200 % 200 000 150 % 150 000 100 000 50 000 7 % 13 % 51 % -17 % 4 % 100 % 50 % 0 % - EU USA Russia Japan Other Markets -50 % Figures as per 17.08.2018 Source: Kontali / Nasdaq 2016 2017 2018 Chng % 0-line 25
Atlantic Salmon Consumption 2018 YTD Q2 Market 2016 2017 2018 Chng Chng % EU 495 600 453 800 481 800 28 000 6 % USA 225 100 219 900 243 700 23 800 11 % Russia 35 400 30 600 47 100 16 500 54 % Japan 30 300 31 600 27 700-3 900-12 % Other Markets 306 700 305 500 338 000 32 500 11 % Total 1 093 100 1 041 400 1 138 300 96 900 9 % 600 000 250 % 500 000 200 % 400 000 150 % 300 000 54 % 100 % 200 000 100 000 6 % 11 % -12 % 11 % 50 % 0 % - EU USA Russia Japan Other Markets -50 % Figures as per 17.08.2018 Source: Kontali / Nasdaq 2016 2017 2018 Chng % 0-line 26
Atlantic Salmon Consumption (Other markets) 2018 YTD Q2 80 000 100 % 70 000 60 000 50 000 40 000 30 000 23 % 14 %4 9 % % -6 % 30 % 23 % 12 % 17 %17 % 9 % -4 % 0 % -26 % -6 % 50 % 26 % -1 % 7 % 0 % -14 % 29 % 14 % 4 % -6 % -14 % 75 % 50 % 25 % 0 % -25 % 20 000-50 % 10 000-75 % - -100 % 2016 2017 2018 Chng % 0-line Figures as per 17.08.2018 Source: Kontali / Nasdaq 27
Klikke for å legge til annet bilde Outlook - Demand for seafood remains strong, outlook remains positive - Harvest guidance for salmon and trout including associates 179.000 GWT for 2018, with lower release from stock cost in H2/18 - Expected contract share for salmon and trout in Q3/18 ~25% - Significant potential in whitefish. Expected catch volume around 65,000 tonnes in 2018, with a y-o-y increase in catch volume of shrimps
Lerøy Seafood Group