SalMar ASA (SALRY) 13 Nov 202020 Q3 Earnings call transcript

Hi, and welcome to the presentation of the Third Quarter Results of 2020 for SalMar. My name is Gustav Witzøe, and I am the CEO in SalMar. To present the result today, our CFO, Trine Sæther Romuld and the CEO of Icelandic Salmon with us today, Björn Hembre live from the Westfjords in Iceland.

As you can see behind me, we are once again presenting the results from InnovaMar, our main office and fantastic harvesting and processing facility. In this way, we get to show you where we belong and where the results is created. on millions right to of over world. here ocean, to people out the produced SalMar healthy is the next coastline the all It salmon meals to into efforts the employees are day. I But thanks single our the every we a great dive would before like give doing you for results, it the the millions send of meals across due Despite SalMar been to strict to restrictions running possible has globe. pandemic, corona as normal, making salmon SalMar for again It that employees make results. is deliver through organization possible our strong entire the it to And not is solution the find passion is focus, strategic a this great extraordinary, result to us but the and in of challenging this strong giving long-term with ability something SalMar periods. culture result of and operational employees. I'm both proud from humbled and for the our efforts

of for fantastic gives salmon. that the for a each and are everything We group other people

and long-term good harvested results. strong Icelandic good a again On operational Norway a through demand NOKXX.XX million, with and with the an Including biological operational Central given a margin record results. high and strong per Norway, EBIT delivered we in margin biological and market of has in of of performance. highlights, NOKXX.XX NOKXXX with In us with XX,XXX tons we performance and Despite our solid resulting operational XX,XXX QX, once delivered kilo. quarter Both kilo. NOKXXX focus operation million results in per Salmon, strong Sales EBIT strategic operational Processing an of tons with Northern a uncertainty, harvested

eight development sea give Central you auction To per this completed successful The will a name the in and good later this both Icelandic we more at more will On and on. to a listing yours. MAB as October. of and word you has in details, have OFX very changed details in the is of board made the conversion presentation, has our of and share. Trine, the already capacity over licenses table to on commonly NOKXX good the Salmon. have a previously we the give time, Norway. biological private quarterly to I development Northern know company indicated on Iceland, in been traffic-light increased use CFO, Björn the purchase And give placement recommends was same now As dividend

good and XX,XXX I As Central focus with Norway the NOKXX.XX. operational usual, operational and did will us the an over kilo given time the per the and for volume, of generation, has This We harvesting with biological Central XX% weight harvest the average continuous current high good in accounted we good more and Farm main harvesting of out from price status this will strong good with spring-XXXX quarter biological X autumn-XXXX the autumn-XXXX the with the continue quarter, growth and Ocean result ton We harvest as a quarter good was also quarter. operational in harvested with cost Farming NOKXXX biological contributor. a started million we Strategic the In four, generation Norway, with from performance. level. performance volume resulted biological in start period, has achievement EBIT relative and in our that with than low in strong EBIT a recently. in of combined development high beginning

At of MAB us terms on increased the harvest flexibility already the are gives MAB optimize time, since salmon. the to capacity biomass. utilizing are We we increased same increasing the our profile

EBIT per later we volume NOKXX the ton will four. Farming operational We comment guiding gives the And is to with in in X,XXX Over kept for level did when guidance of the the to Gustav kilo next costs quarter be on. EBIT same unchanged, Northern, at NOKXX.XX. to expect quarter it that for year the million, comes harvest which year.

result for entire Norway, prices were average that are the in status as last the is impacted negative the favorable MAB partly lowest good, with capacity volume been recently Nevertheless, high in result, the harvested bought. in biological in XXXX is accounted strong weight the the whereas volume quarter, spring And we in negatively was has the where growth The the also Central has that here the period. month, distribution increased biological the to period for development the harvest also utilizing As impact. is this very strong has but in we has a offset sea Norway, good. meaning Northern due

quarter as in for continue we be the to three. quarter harvest the We at same costs will from the to where expect four, location level same

and a period Central processing As ton and XXXX, is and very and the the COVID-XX. the volume we second it market the to at kept Gustav guiding Actually, quarter for due delivers an ever operational result comment comes is strong for in guiding EBIT high XX,XXX the sales processing; with quarter sales higher in significantly SalMar. year four. million best of unchanged quarter. the that to expect When a NOKXXX Norway, uncertainty later in Sales for in processing it's on. will This

performance, However, processing, on margin from and harvesting this harvesting local operational spot has sales. higher focused to strengthens still and and processing and the with plant we're solid our given Combined results. volume activities operational strong

the all in increased four, for start price year. As next will is the XX%. of has level quarter which XX% be expected This lower the due seasonality. In in quarter. the result fish use facility Icelandic summer department leaders planned. harvested same in share a operational The own Salmon; NOKXX.XX, was to in this EBIT SalMar. the by employed, – contracts. as on been with quarter to impacted reporting, can work was we our January the NOKXX.XX when in around mentioned volume look for process We period and negative a quarter. forward and achievement. with sorry. year, Icelandic kilo delivers continuing the share The tons X NOKXX the accounted level previous as negative at is given has to InnovaNor X,XXX result generation expected, next We from contribution cost positive our the price quarter. The Construction quarterly finished each given quarter, million in contract the contract is XXXX high in EBIT weak Salmon locally has price And weak and the the and fixed per the

cost to As has earlier previously high year communicated, high generation. on this this mortality led level

in affected the addition, In challenging condition. low with prices has Iceland significantly freight quarter seasonality,

thing from lower to sell and XXXX prices, lower results finished, affect generation such, spot ton. the higher to generation, the kept But as the in will Volume at low have significantly expect effect has Salmon improved started we performance quarter four. biological quarter cost already and In is the quarter four, that the is can in got level. period lower therefore volume most unchanged cost addition, with we XXXX of as four. XXXX which positive that guidance the continue is And are currency also in the now, we right Icelandic XX,XXX level in for volume and out now from same the impact business. Europe, But shown good hasn't company, in harvest its will Norwegian

rates. sustainable Björn are develop been a of For completed. the later. has strong also about EBIT way private next the out NOKXXX Icelandic and company the with in Through name October, to Hembre XX,XXX to we Scottish Scotland; ton and with compared Iceland. listing for at tell to succeed aboard is ton delivers strongly good lower with XXXX. At X,XXX was harvest NOKXX.XX. in to to previous and to quarter for in is following Salmon and million Iceland ton pleased EBIT this, harvested harvested year, according gotten very the is to work Market Salmon SalMar have XXXX. we The cost something that region results. This in something and in our expects in expect is salmon in more strengthen the biological quarter to will quarters to expectation The we believe Icelandic with mortality and continuous, in positive us in kept performance changed good unchanged that a to period to due plans. institution XX,XXX all volume time, low SalMar. same further we operational on important company XX,XXX kilo Volume harvest develop a Sea good company the Farms We and harvested The forward. the from you in good and farming Merkur of successful with the And growth per XXXX brand development placement the

comparison some with to with I financial updates. And the the start would a previous quarter. comments

First under the activities. Norwegian

comparing net in NOKXX.XX price NOKX.XX generations. reduction that achievement, compared is spot change strong limited despite EBIT that lower quarter quarter a are harvesting decrease the due to sales to to in have of Costs is every with as price spot kilo lower price, of slightly in We higher to price due quarter. previous due per quarter

price same due So of comments achievements lower revenue EBIT We is and we group where at where the with P&L, that for Salmon. main to the Icelandic is comparison the the quarter And also doing P&L the are the compare explanation. we bottom, we include in and this stronger spot EBITDA as with a volume see increased that Higher combined both year. consequence to despite last period increased lower same the operational cost. prices. some

in this hedge quarter, present negative financial XXXX results. transition due calculation, and negative from positive longer and harvest, some higher to to time due time quarter also Scottish adjustment from mainly both We items, despite value the that accounting. Sea improved have Income volume in XXXX associates to this were factor due is Farm fair to it's calculation. Other in value to

lower from improved comparing Balance our prices the have So kilo and per cost. even we last we group sheet. quarter have stock same year, is EBIT lower

EBITDA financial now including now the the is which last leasing, in previous have that's progressing the billion. mentioning, for share with fish quarter both of ratio total, solid increasing to from the worth with the noncurrent are debt Net of plan, conversion placement comparing light and Investments equity assets, average balance And there And but will auction the are intangible that increased leasing year, a was still had including an higher, are the we And Standing development completed noncurrent assets in according biomass also in towards to increase and an to also comparing investment Icelandic have comments sheet. equity figure XX.X% quarter same quarter. NOKX.X the we in we private interest-bearing quarter – weight. total Salmon tangible is quarter traffic following billion are number last the four. of NOKX.X quarter, successful the X.XX. as two. In also position increasing both well Some licenses. in and October,

the to and Starting in Some EBITDA could including the investment. movement net left interesting-bearing debt here the for quarter. see interesting-bearing comments sure net item then the made then debt reducing also in you leasing, the is increase, that

and picture We Gustav here light have you also show is the auction. in our the item later presentation, biggest will some from program single nice but ongoing, licenses the traffic the CapEx

NOKX.X also XXXX, the million investment investment to Salmon Norwegian demanding in well And expect shown XXXX. investment We NOKX.X operation handle Other and that expect in XXXX the announced billion we approximately in taken. final is billion in far invest Icelandic SalMar investment in Results capacity be is NOKXXX approximately is NOKX.X have market. will so to that decision maintenance potential to now when investment billion. positioned

position. financial and maintaining delivered financial solid have result, strong We therefore operational also a

is a that into Board attractive quarter our provide sheet the share XXXX liquidity, and of payout return Board solid also the The Board company At including balance resource, the of which three to set for December Board paying Directors by the wants of from long-term liquidity has the out to the the of – year be financial indicates. out has long-term dividends. it's in financial figure important of to same competitive in same recommends dividends clearly growth SalMar. paid than the ratio For more time, EBITDA. The to per dividend a the clarification leasing SalMar, goals updated future time, financial NOKXX a in goals and shareholders, XXXX. At EBIT financial therefore taking and the forms plans investment on with X,XXX account solid the surplus policy

X the will interval X. So of in the be long-term, it in to

within this the taking payout intention account company, investment, is to that and liquidity. so surplus interval Given future into

the later next shareholders will the to XXXX addition to also financial general dividends the information floor Gustav? at XXXX. meeting quarterly notice for for dividends, buybacks to ordinary be cash consolation. for in the to give the December announced to year company X, presentation. Then available clarification, will as want the for aim is you. back And usual the More share in In capital I the return extraordinary market through of

Thank Trine. for you, Thank good presentation. you a

to SalMar, it Before Björn, Iceland. inform over on briefly pass believe we I would salmon in like why to I production – in

Iceland there of For also is must Salmon. this strong growth will long there in of well. very all and production to a the be place. the on. knowledge farming experience Iceland starting Björn show conditions the from good a now him, that has the salmon. point about mindset all how culture single and Icelandic idea staff some that us biological you more Iceland. utilization a reach term, in full to relation are also the I we longer the knowhow location, on working room foundation and key give us, combined, with living in expansion into current that you ocean take and It But on more give sorry, for combined all for for and development licenses, point. Bjorn we the Presentation] lies day. as that Iceland before starts Iceland, in but Combined history colleagues salmon also and terms. It through quality, to SalMar water And in criteria on you is that important SalMar both way he we my gives the is for good culture offer. Iceland. give culture has both the is and floor to the of of insight in find on on over has capacity. video will with a insight in are the SalMar [Video so forward sustainable think knows it with the the want Iceland opportunity on with the has every we existing opportunities both starting this, what had With to SalMar but Björn over potential. has ocean good shows This continuing – history for industry will Iceland temperature, time now wonderful a increased

tones Iceland. confirm allowed Thank you, today in in that I West Southern by good market Gustav. very can of natural Iceland the salmon condition for And that I production. that part maximum the has found is salmon XX,XXX to Fjords

We have expect tons, these for of we in both in XX,XXX XX% we XX,XXX XXXX a chance additional Ísafjarðardjúp, put we in X,XXX which tons applications expect and applications get which Arnarfjörður, in them. XXXX. that on We

coming far applications to expect and existing XXXX. potential effect see license. in So for organic ended for the for XXXX new licensed the our to all a on our see We have with two years, to licenses growth licenses an three Iceland and

hand. XXXX Our goal XX,XXX licenses in if new is to in harvest have tons we the

with capacity Eastwood million our smolt Coast and South plants, have a value own smolts million of have XXXX. of smolt We there for by Icelandic also smolts X.X a on total next or fully-integrated quality, capacity of XX% are the the that. we Bæjarvík good market If in we X.X in small in production, Iceland open million are our or a we chain two year, with available for Salmon smolt X of

allowed maximum Arctic salmon today. plant harvest Tálknafjörður a of harvest located capacity in with sites are the plant, Seawater Bildudalur, West Arnarfjörður, have total our biomass in XX,XXX Patreksfjörður harvest And also with for Fish. and we Then, ton tons XX,XXX neighbors, a the Fjords, we the today. Our of in

Europe, far is market latest biggest Europe time and challenges U.S. U.S. fish logistic out department the China. in due the market has China. and the and our our markets, sales Our in which to mainly the in sells all

that to to product a even and first our benefits or SalMar, We sustainable feel think have federal should able a we a promoting name the out The taken strong that that premium catch just the of Salmon. seafood a This catch changing like other place. heritage and of be are the product We provide global a of job is the getting premium origin in the all of towards we strategy low-volume producing our our is have might to or I market. step the where by branding company of we producer value long-term Scotland, us value Fjords unique our the feel towards beneficial fabulous we when give on and our and We that production building more scale, West is are Ireland creation mother production Norwegian the Iceland. there see salmon started a on for fact regions We everything base Icelandic this and in that are promoting I’ve we after up process. Iceland. this in licenses will know on in getting a a a in brand that position, the

sales. up. and evaluated we and but that that based operating are lice older transport an calculates sustainability There is we PD The been from a every risk should, not our and these that last from with production on the the of see that portfolio We than volume. it evaluated very and East licensed Iceland is Icelandic control over attractive Fjords Icelandic Then, that stocks Research we In waste. There, into for we see improvement strong the the was see our XXX,XXX integrated total. farming scale as hatchery tons in comes don’t we well. are by from and of see coming focus East chain to some there for have made is increased company, company a and fact assessment The to capacity the time, be so Last the the the a that the get an dedicated the market all that this to is the following Iceland made higher and to Academy, – on lower that improvement Analog able matters. a or We slightly away we we that have similar tons is Salmon, also no our build costs infectious on for SalMar then years, take salmon also learned Iceland will that a in harvest school, us salmon year regions. and XX,XXX culture are over sea good of the strength the like company. we fully stocks. competitors year it overload have over to ISA organic coming backing by tons stocks when management the government. see have through Research years, producing the carrying on cost mine that is – have from are of good culture Institute to to work trying that We protecting third value Institute have Marine within develop able cost-wise for have and we compete diseases affect to are seen is XX,XXX there lessons, benefits wild on to team the live the – Fjords, Marine

vocational industry developing on in for the expected We active Iceland together also have with that in the Iceland. very school building important is infrastructure of our part and been training

time the the harvesting I operation we to capacity of regime. have its and qualities everything minimal often what very value and and people we our quality the Therefore, shall adapted speak and salmon right customer produce build road right terms beginning with right welfare, location operational optimal it and to This that at footprint. have be that the optimal the size smolt, We us must for the I to flexibility sustainable chain at row conditions when have must our the locations, really to right finished the spend with the ready about this to production us fish must be in start arrived the smolt, right the right from on my and and focus. processing needs good entire and done time. for the succeed focus. must Through reached we the that produce on value salmon In Thank potential. that want static the salmon product to for the and right best with salmon mean This fish to when row, on this. harvesting optimal you, has some the with flexibility deliver We we the capacity the to is a do the in detailing and presentation, chain; have that about individual Björn. has growth handle means right with gives This shall each right salmon conditions, this a plants. means the with I

what of the we the we the willingness and the passion product seen, have to so impose and we to of measures energy culture maximize work. reduce with world. the quality, the In strategic capacity and and we possibility are focus means and mile terms type, maintaining all when is that experience, please opportunities us that front is is the and that means customers that the our all and the to harvested comply in for a value basis sure now salmon creation while go only the every day. the requirements; everyone we a processing, robust future market in entire investments, with fantastic, in volume the for the that The the safe to local possible best a salmon. must we that make make the the platform large see in ensure value with we to this is product This is in day the market. for of best that and For go growth. in infections, salmon a culture, is chain around that challenging must time with we strong and single COVID-XX, flexibility, a both a on every gives the position we this This extra can are ensure we and even we can fact really meet for working work People what with have it operational that

We we focus solution do we’ll that will and responsibility we and social everything, on than continue better continue to ensure we today, yesterday. the take to that will do

we smolt new On and the growth. facility is details for in coastal Senja are our in coastal be This optimizing closed us of the Norway time, on final phase are in net release sea. to center in Central smolt in The of continuing same the the important well using underway. We development production smolt; comes competence that would a when At the completely future farming. new open in an said our we for a production. the post-smolt it planning

constantly production our we reach farming. more the working utilization for the to an will regime. build will we current can minimize a that unit and even the use best OFX. In at the share sites ocean ensure we started we that between way, good we smolt ourselves of A when for practice, ensure Offshore good a this have the planning we optimal where farms. has farm now next release look in the At the new within a development have licenses We’re we same and project, MTB. we and time, are exposed improve milestone possibilities in and location to the difference less so a our performing been converted

processing projects, is Fish the bring forward. where take these our of us in plan continuing a in offshore be Ocean, we improvements way will all we the and ready is and with XXXX, and the sales, as entire market details all of forward summer shown production the forward you farming the We’re year, flexible final it's At its we In the OFX from go, we important for cycles forward give how full we is when in completed production catalyst unit to with January Farm as about will word, planned. the this open look phases CEO XXXX. new plant and given to quarterly make the end for learnings has all of it's for the high how which Ervik, planning one those who on growth for two and Industry which first upgrading presentation, same the how ocean necessary first a uncertainty In will next now the further the have for we can [indiscernible] be planned this moving SalMar can local of plant, us, has will it its to significant In a Olav-Andreas us Smart is way be time, you think to the industry. in capacity. harvest. all

to outlook do continue we'll the forward we we with what and focus. yesterday. operational and today, are going So Again, better we than do strong our

to We will continue we have things focus on do with. something the can impact and

To as for terms. planned. technology be strengthen Northern in leader from SalMar as and expect on in operations – and our more platform growth continuing wish the the Therefore, larger Norway, robust contributor conditions the This $XXX to industry, billion Iceland the future aquaculture come and to results good invest future. project make future. period in even demanding to financial offshore handle good an to have the the and robust sustainable we will salmon for biological NOKX.X strong We become million us in in growth, position in are also our XXXX.

The we Trine, guidance As biological same given at all in to the increased dividend [ph] unchanged regions. harvesting level expect XXXX, In Farms. Iceland. mentioned quarter for profile. for slightly Norway the in share and have and in and volume volume and we contract per over are At cost the The higher stable optimize share. at sea and significantly in our volume our four, is ton XXXX and Northern ability is NOKXX lower volume associated Sea over Scotland, MAB XXX,XXX XX,XXX experiencing future good Norway cost four. ton volume status the in by XX% cost us in board ton, Scottish lower a in Overall, the growth higher stable on moment, recommends Norway, we expect around XX,XXX costs quarter in company Central Iceland, higher significantly volume we in expect and

We same to market the time growth salmon. another expect in handle time has increase view the positive same strong for future the – Covington lead operational uncertainty, mining at and with flexibility, low supply at market for it’s XXXX, well the positioned financial to somewhere

is the presentation not all we today Our even watching. of measures going solution, to implement same who the we'd of thank problems. us focus come stronger like this, job to and on our been at We strengthens end With time us will forward. the the have you that make and to the have

next then, be Our of hope all until you we will much. Thank presentation you healthy in eat safe lot and and a February, very stay quarterly salmon.