Intrafish Seafood Investor Forum 31 October 2014 Forward looking - - PDF document

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Intrafish Seafood Investor Forum 31 October 2014 Forward looking - - PDF document

Intrafish Seafood Investor Forum 31 October 2014 Forward looking statements This presentation may be deemed to include forward-looking statements, such as statements that relate to Marine Harvests contracted volumes, goals and strategies,


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Intrafish Seafood Investor Forum

31 October 2014

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Forward looking statements

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This presentation may be deemed to include forward-looking statements, such as statements that relate to Marine Harvest’s contracted volumes, goals and strategies, including strategic focus areas, salmon prices, ability to increase or vary harvest volume, production capacity, expectations of the completion and capacity of our fish feed plant, trends in the seafood industry, including industry supply

  • utlook, exchange rate and interest rate hedging policies and fluctuations, dividend policy and

guidance, asset base investments, capital expenditures and net working capital guidance, NIBD target, cash flow guidance and financing update, guidance on financial commitments and cost of debt and various other matters (including developments with respect to laws, regulations and governmental policies regulating the industry and changes in accounting policies, standards and interpretations) on Marine Harvest's business and results. These statements speak of Marine Harvest’s plans, goals, targets, strategies, beliefs, and expectations, and refer to estimates or use similar terms. Actual results could differ materially from those indicated by these statements because the realization of those results is subject to many risks and uncertainties. Our registration statement on Form 20-F filed with the US Securities and Exchange Commission in 2014 contain information about specific factors that could cause actual results to differ, and you are urged to read them. Marine Harvest disclaims any continuing accuracy of the information provided in this presentation after today.

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3 70 % of the surface 2% of the food production Energy efficient and low emission food production Healthy and tasty food Increasing population needs new solutions «Leading the blue revolution»

Can we produce food in the ocean?

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4

QUANTITY OF FEED FED CARBON EMISSION FRESH WATER CONSUMPTION

The responsible choice for the environment…

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5 Proteins:

High quality, easy digestable proteins

Omega-3:

High content of Omega-3 fatty acids

Vitamins:

Rich in A, D and B12 vitamins

Mineral:

High content of iodine & selen, taurin and sterols

…for your body…

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6 Note: Examples of consumer products and branding initiatives from Marine Harvest

AMERICAS EUROPE ASIA

…and it’s tasty!

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1 2 3 4 5 6 7 8 9 10 1996-2005 (1) 2006-2014 (2) 2015-2020 EBIT per kg (NOK) 500 1 000 1 500 2 000 2 500 1996 2005 2014 2020 Global harvest (thousand tonnes)

7 Notes: (1) Average EBIT per kg for the Norwegian industry (Source: Kontail - The Salmon Farming Industry in Norway) (2) Average EBIT per kg for Marine Harvest in Norway (3) Marine Harvest does not provide guidance on industry supply beyond 2015

Biological carrying capacity diminishes growth

Source: Kontali (3)

CAGR 6.6% CAGR 9.6% CAGR 2.9%

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Highlights from Q3-2014 results

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  • Strong earnings - Operational EBIT NOK 912m
  • Sales contracts reduced impact of market disruptions
  • Large exceptional costs linked to biology in the quarter
  • Successful start up of feed plant in Norway
  • Agreement to purchase 40 thousand tonnes farming capacity in Chile
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Outlook

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  • Limited supply growth expected in the coming periods
  • Industry supply response challenging due to sustainability issues
  • Futures prices NOK ~40 for rest of Q4 and above NOK 40 for 2015
  • Strong focus on containing biological costs
  • Continued focus on consolidation initiatives in Norway and Chile
  • High emphasis on solving issues in VAP Europe
  • Quarterly dividend of NOK 1.10 per share
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10 Note: (1) Based on 2014 HOG tonnes

Marine Harvest business areas

Position Focus areas

220 thousand tonnes vs global production of ~2.6m Successful construction and implementation by 2014 414 thousand tonnes vs global production of 2.0m (21%)(1) Acquisitive growth in Norway and Chile Global sales network Leading position in VAP Integration of Morpol Restructuring programme in VAP Organic growth in VAP

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R&D & superior product

  • Gradual competitive advantage through intellectual property

rights

  • Capitalise on internal competence to produce the best feed
  • Cleaning the fish oil from impurities
  • Take part in the economic profits in the feed chain
  • Control of key performance indicators
  • ROCE target >10%
  • Bulk production makes distribution and transportation to our
  • wn sea water sites more effective
  • Environmental friendly and efficient vessels and energy

requirements (LNG and wind power)

Fish feed - Key motivations

Economic Logistics & green energy

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Fish feed successfully initiated

12 Note: (1) Based on 2014 harvest volume estimate

  • Profitable operations in the first quarter of operations
  • Reached 100% capacity utilisation
  • 220 thousand tonnes capacity
  • 60% of MHG requirement in Norway(1)

Photo: Rune Røstad

FEED NOK million

  • Q3. 14
  • Q3. 13

Operating revenues 539 na Operational EBIT 20 na Operational EBIT % 3.7% na Feed sold volume 55 384 na Feed produced volume 56 097 na Exceptional items na

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13 Note: Volumes in HOG tonnes

MHG Farming – Geographic diversification

Canada Volume: 29 000 Canada Volume: 29 000 Chile Volume: 66 000 Chile Volume: 66 000 Faroe Islands Volume: 9 000 Faroe Islands Volume: 9 000 Scotland Volume: 49 000 Scotland Volume: 49 000 Ireland Volume: 6 000 Ireland Volume: 6 000 Norway Region North Volume: 57 000 Norway Region North Volume: 57 000 Norway Region Mid Volume: 62 000 Norway Region Mid Volume: 62 000 Norway Region West Volume: 80 000 Norway Region West Volume: 80 000 Norway Region South Volume: 55 000 Norway Region South Volume: 55 000

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14 Note: Marine Harvest estimates and company disclosures

Output per license in Norway is quite stable and high

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15 Source: Marine Harvest estimates

Number of sea water licenses 157 150 97 88

100 200 300 400 500 600 700 800 900 1 000 Marine Harvest Company A Company B Company C

Salmonids production per license (HOG thousand tonnes)

Deliberate low capacity utilisation in Chile

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We have changed our production strategy in Chile and have ample spare capacity

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50 55 60 65 70 75 80 85 90 95 100 2007 2014e

Harvest volumes MHG in Chile (HOG thousand tonnes)

0 % 5 % 10 % 15 % 20 % 25 % 30 % 2007 2014e

Market share harvest volumes in Chile (% )

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17 Norway: Sales Poland: VAP & Sales BeNe: VAP & Sales France: VAP & Sales Germany: VAP & Sales Spain: VAP & Sales Prague: VAP & Sales Italy: VAP & Sales US, LA: VAP & Sales US, Miami: VAP & Sales US, Maine: VAP & Sales Canada: Sales Chile: Sales Japan: VAP & Sales South Korea: VAP & Sales China: VAP & Sales Taiwan: VAP & Sales Vietnam: VAP Singapore: Sales UK: VAP & Sales

Marine Harvest - leading the world of salmon processing and sales (2013)

VAP volume (HOG tonnes) Europe 130 000 Americas 13 400 Asia 8 000 Total 151 400

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Sales contracts form an important part of our strategy and we continue to grow the consumer market share

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0 % 5 % 10 % 15 % 20 % 25 % 30 % 35 % 40 % 45 % 50 % 2010 2011 2012 2013 2014E

Sales contracts in Norway (%

  • f volumes harvested)
  • Contracts with market leading

retailers are increasing

  • Focus on longer term contracts
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0,0 % 0,5 % 1,0 % 1,5 % 2,0 % 2,5 % 3,0 % 5 10 15 20 25 30 35 40 45 2010 2011 2012 2013 2014E margin % thousand tonnes Volume (k tonnes) EBIT margin %

Marine Harvest development in Asia

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The “Prada” of seafood in emerging markets

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Out concepts stores in Taiwan are gaining popularity and driving consumer awareness

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Mowi brand name and concept positioning in Asia

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  • Mowi
  • Marine Harvest’s own superior

breeding programme

  • Based on the famous Vosso salmon
  • Supreme strength and size
  • Sustainably developed by natural

selection

  • Supreme quality with unique colour

guarantee

  • “Stronger, healthier and tastier

salmon”

  • Mowi video:

https://vimeo.com/106263933