Mowi Asa S/Adr

Good morning all and a warm welcome to this presentation of MoE's Third Quarter Results of 2026 here at Salmon, our combined knowledge center for farming Atlantic salmon and fantastic fish restaurant if I do say so myself at Aker Brygge in the heart of Oslo. And to those of you who are in the room here with me this morning, I hope you have settled in well, had something to drink and grabbed a bite to eat of some of our delicious Mowi products. And to those of you who are following the presentation online across the world, which I guess is the majority this morning, I hope you have made yourselves comfortable so you can follow along in peace and quiet. Otherwise, my name is Ivan Vindheim, and I'm the CEO of Moe. Together with our CFO, Kristian Ellingsen, I will take you through the numbers and the fundamentals this morning, and to the best of my and our ability, provide some context to them. And after the presentation of IRO Kim Dosvig, we'll routinely host a Q&A session, but those of you who are following the presentation online can submit your questions or comments in advance or as we go along by email. Please refer to the website at movi.com for the necessary details. This letter is still long and extensive, so I think we leave it for self-study, as we always do. So without further ado, I think we can move on to the highlights of the quarter. A quarter that for Mowi will go down in history first and foremost for its harvest volumes, I think it's fair to say, as we harvested a whopping 186,000 tons in the quarter, setting new quarterly high for Mowi by a wide margin, up by 12% year-over-year from the previous quarterly high. And coupled with the good realized weight of production cost for seven production countries in the quarter of 5.11 euro per kilo, which is slightly lower than our guidance, and reasonably good prices given seasonality, this translated into an operator profit of 275 million euro for the quarter. Which is a good result I would say, seasonally record high and two and a half times higher than the 112 million euro we posted in the third quarter last year. Thanks to better prices and as I said higher volumes and lower costs. The latter down by 31 euro cent per kilo year over year or 51 million euro in absolute terms. made possible by a falling feed price through the cycle, but also aided by good operation performance in the third quarter and the quarters leading up to the third quarter. And high prices and volumes also translated into the highest turnover on record for any quarter for Mowi of 1.73 billion euro. Otherwise, it seems like the forecasted market recovery is playing itself out, as prices were up by as much as 18% year-over-year in the third quarter, and up by 13% so far in the fourth quarter, driven by strong demand in most markets. Combined with an industry supply growth which has now normalized around a low single-digit rate, as previously untapped production capacity now is more or less fully utilized by the industry, released by very favorable growth conditions in the sea last year and this year. These price hikes are also attesting to the historical supply-to-demand ratio, which bodes well for the coming quarters and years, despite the once again rising feed price at the moment, following weak pelagic fisheries this year. The latter hopefully just temporarily, as fisheries naturally fluctuate by nature. But in the meantime, higher feed prices mean inevitably higher realized cost in the end of the day. There is unfortunately no hiding from that. Anyone saying otherwise has a too high cost in the first place, I would argue. And that doesn't apply to Mowi. So for Mowi, we expect somewhat higher realized costs in the fourth quarter when compared to the third quarter, also partly driven by lower harvest volumes and consequently less dilution of fixed costs. But when compared to the fourth quarter last year, so a year-of-year comparison, we expect a relatively stable cost in the fourth quarter. So there I think you have an okay picture of at least our cost expectations for the fourth quarter. Carrying on, when it comes to two other divisions, Mowi Feed and Mowi Consumer Products, a downstream business, things are still going well, I would say, with new records for both divisions in the third quarter. Because in Mowi Feed, we saw record high sales volumes leading to record high earnings. And in consumer products, we also enjoyed record high sales volumes, driving strong earnings also for that division, I would say. And then last but not least, and as the last bullet point reads, our board of directors has decided to distribute a quarter dividend of 2.30 NOK per share after the third quarter. I think that covers the highlights of the quarter, so then we can move on to our farming volume guidance, which we have increased for this year since last time we reported to now 620,000 tonnes, which is up from previously 600,000 tonnes due to an exceptionally good growth in the sea this year. And 620,000 tonnes correspond to a growth year-over-year of as high as 11%. Most of which of course related to the acquisition of Nova Sea last year, but there's also a great deal of organic growth in that number, approximately one third of it. And as for next year, we expect to have 630,000 tons, assuming normal growth conditions, so not the fantastic growth we have seen this year, because we cannot expect to hit the biological jackpot three years in a row, particularly not with an El Nino coming, because then I guess the likelihood for that is even less than it otherwise would be. And for the sharp-eyed amongst you, we have taken out our organic Volume target for 2029 of at least 650,000 tons from this slide, this time around, simply because we are almost there. So now I guess we need a new long-term farming volume target in Mowi. The number that naturally comes to mind, I assume, is 700,000 tons. It's more a question of the time frame to get there, not to mention investments and resources needed, because any growth must be profitable. Otherwise, there is no point in growing. We do not grow for the sake of growing. At least, that's not how we do it in Mowi. The organic part of that growth will still come through increased smolt stockings and by use of post-smolt, because we have still unutilized license capacity in MoE. And by use of post-smolt, we can increase the productivity on licenses already in operation, which are to be set into operation. So MoE's farming volume growth continues steadily after a rather flatlining 2010s. and in surpassing that of the wider industry, and at least it pierced by a large margin. Cementing our number one position in the market for the Atlantic is salmon, here measured in whole fish equivalents, by which we normally measure the market. So 700,000 tons for Moe in whole fish equivalents versus 3.3 billion tons for the market, which yields a global market share of 21%, which is quite unique in the protein space. Then from the overall volume picture to key financial figures for the quarter. There are a lot of numbers on this slide, so I think we have to leave most of it to Kristian and his session later. And then also avoid getting ahead of things and becoming too repetitive, which is a positive effect from that. In terms of profit, we have just been through, so I think we can skip them here. But before we move on entirely, maybe we can allow ourselves a little fun fact this morning, because these revenues and volumes Make Mowy, now also the largest seafood company in the world measured by revenue or turnover. So now we are the largest seafood company in the world measured by all metrics, so not only the largest salmon farmer in the world. Which is quite something I would say, 60 years after we started out small in a closed off bay outside the city of Bergen where we are headquartered. Carrying on, net interest-bearing debt stood at 2.89 billion euro at the end of the quarter, which is slightly higher than our long-term debt target of 2.70 billion euro. But having said that, equity ratio was at a healthy 43% at the end of the quarter, so I would argue we still have a strong balance sheet in MoE. And it can also be mentioned that we have 140 million euro in proceeds coming in sometime in the fourth quarter, or first quarter, following our sale of our farming assets in Canada East, which is pending antitrust approval. Furthermore, underlying earnings per share were 33 euro cent in the quarter, whilst the annualized return on capital employed was 15.8%. And finally, in terms of regional margins through the value chain, there was quite a wide spread in the field also this time around, and we will come back to the explanation shortly when we go through the various business entities. But first, Further on prices in the quarter, which were set up by as much as 18% year-over-year, and are up by 13% so far in the fourth quarter, driven by strong demand in most markets, in combination with industry supply growth, which are now normalized around a low single-digit rate, as previously untapped production capacity now is more or less fully utilized by the industry. These price hikes are also attesting to the historical supply-to-demand ratio, which bodes well for the coming quarters and years, because we believe in a tight supply side going forward due to regulatory and technological issues. Thanks for watching! Then our own price performance in the third quarter, which I would say was good, as it was 7% above the reference price, which is the standard we hold ourselves to internally in Mowi, and against which we measure ourselves. Positively impacted this time around by a counter share of 16%, and the counter price somewhat above the prevailing spot price in the Q quarter. But also helped. and aided by strong sales execution by our sales organization which laid the foundation for also good spot price performance in the quarter. So credit to the sales organization for that. So with that, I think we are ready to start to drill down into the different business entities. We begin, as usual, with Mowi Norway, our largest business and farming entity by far, and consequently also our most important one, as it's the locomotive of our business model. Let's take the numbers first this morning. Operational profit was 239 million euro. For the quarter for Mowi Norway, its margin was 1.79 euro per kilo, and harvest volumes, brace yourselves, 134,000 tons. In another good quarter for Mowi Norway, operationally, I think it's fair to say, despite the fact that Autumn is the time of year when things get a bit tighter in the sea due to higher sea temperatures. All that entails biologically. But once again, I think we can say we landed on our feet in Norway. and particularly in over Norway we continue to perform extremely well which was led into an impressive margin given the prices in the quarter or 2.07 euro per kilo for region and north so hats off for that region office as you know our Most and largest farming entity or farming region by far in Mowi, so consequently extremely important to us with its almost 190,000 tons of harvest volume this year. But also region mid delivered a strong margin in the third quarter of 1.94 euro per kilo. Partly aided by good timing of harvest. For Midwest, it was the other way around. The timing was poor, but the cost level was good, actually on par with region mid. And finally, when it comes to the overall margin for mowing in Norway, 1.79 euro per kilo, I think we have to say we are satisfied with all things considered, including the price environment in the third quarter. And the volume guidance for MoE Norway, which we have increased for this year to now 395,000 tons, up from previously 380,000 tons due to, I said earlier this morning, fantastic growth in the sea. 395,000 tonnes are equivalent to a growth of as high as 19% year-over-year, primarily driven by the acquisition of NovaSea last year, but also here there is a great deal of organic growth. 24,000 tonnes, or 8 percentage points to be precise. And as for next year, we expect to harvest 405,000 tons, assuming normal growth conditions and not the exceptional growth we have seen this year. And 405,000 tons would be a major milestone for us, as there's always something special about reaching and crossing new three-digit numbers in harvest volumes. So if we do not nail that record this year, let's see if we can nail it next year and add another section to the history books. Because it's not that long time ago since we harvested 210,000 tons in Norway in the aftermath of some challenging years back in the 2010s in the transition from chemical to mechanical ideal housing. So it's quite a journey the Norwegian farming organization has taken us on. So big credit to them for that. Then the last slide on Movi Norway, our sales contract portfolio. Contract share was 14% in the third quarter, and was red spot on our guidance. And these contracts delivered us more positive contributions of earnings in the third quarter. And as for the fourth quarter, we expect our contract share to be relatively stable, with relatively stable contract prices quarter over quarter. And finally, when it comes to next year, that we cannot unfortunately say much about this morning as we are negotiating as we speak. So that we will have to revert to in February at a fourth quarter release. In the meantime, we must keep our cards close to our chest for obvious reasons. So, then I think we can conclude Mowi Norway and start having a look at our six farming countries. We begin as usual with Mowi Scotland. Mowi Scotland continues to deliver good quarters biologically, I think it's fair to say, at least taking into consideration seasonality, but very low harvest volumes in Scotland this time around left a mark on our absolute earnings. which materialized internal operation profit of 20 million euro from OE Scotland in the third quarter representing a strong margin I would say 1.69 euro per kilo on our 11,500 tons of harvest volume. Then we move across the Atlantic to the Pacific and to Chile and our Chilean farming operation. Mowi Kjella also continues to deliver good quarters biologically. I think we can say, despite some issues with briketza in Kjella, but soft prices and tariffs are still weighing on our earnings in Mowi Kjella. By extension, operational profit came in at 13 million euro for Movicilla in the third quarter, reflecting a modest margin of 53 eurocent per kilo. On a seasonal record, I harvest volumes of almost 24,000 tons. So consequently, there is nothing wrong with our volumes in Chile. Neither costs, I would argue, as Moitille has the second lowest standing biomass cost in the group, only surpassed by region north, which is a lot in my view. So prices over the two pinches for Chilean salmon. But having said that, that might change when we get the outcome of the so-called 301 section investigation into excess capacity and overproduction in manufacturing categories for Norway and 15 other countries. Because if we end up with a double tariff on Norwegian salmon into the US, that would obviously benefit Chilean salmon. But whatever scenario that plays out, I think with Mowi's farming portfolio, we are well equipped to take advantage of the scenario that plays out in the end of the day. So let's see what the future has in store for us. Then our second farming entity in the Americas, Mowi Canada. As guided in connection with our second quarter release in August, we encountered some seasonal issues with algae in Maui, Canada in July and August, which cost us €8 million in the third quarter when everything is tallied up. But despite this, we posted a strong operational profit of €9 million in Maui, Canada in the quarter. Reflecting a strong margin of 1.24 euro per kilo, all things considered, on our 7,500 tons of harvest volume. Thanks to good prices, and of course no tariffs on our Canadian salmon into the US, but also good cost performance adjusted for the algae heat. And before we move on, it can also be mentioned that the fourth quarter has developed satisfactorily at sea so far. So with that, I think we can go back to Europe again, first to Ireland and the Faroes, our two smallest farming entities. In Ireland, we ended up roughly breakeven on our almost 2,500 tons of harvest volume there, whilst in the Faroes, we turned a profit of 2,500,000 euro on our almost 3,000 tons of harvest volume, reflecting a margin of 84 eurocent per kilo, of which the latter was adversely impacted by 100% spot price exposure in the quarter. Because biological metrics are once again good in the Faroes, in the quarter was even more of a mixed bag in Ireland. Ireland is, as you know, a more challenging place to farm Atlantic salmon due to its shallow waters and higher sea temperatures with all that entails biologically. Then we move further out into the Atlantic to Iceland and our Atlantic farming operation, Arctic Fish. Arctic Fish recorded a small loss of 3 million euro in the third quarter on its 4,000 tons of harvest volume due to weak prices and somewhat higher costs. But on a positive note, biological metrics were once again reasonably good In Iceland, which should lay the foundation for once again positive earnings in Iceland when prices are fully recovered and we get back to historical levels. So that I think we can conclude Mowi farming and have a look at our two other divisions, Mowi consumer products, a downstream business, and Mowi feed. In consumer products, we can put behind us a solid quarter, I think it's fair to say, despite the decline in earnings year over year, with an operational profit of 45 million euro in this quarter. On quarterly record high sales volumes of 84,000 tons product weight, of which the latter is up by as much as 18% year over year, demonstrating very strong demand for our products. And in terms of the decline in earnings year-over-year, that's solely a result of weaker contracts, because all of the KPIs are more or less improved year-over-year for this division. Then, last one out this morning, Mowi Feed. MoFeed can also look back on a strong quarter. I think we can safely say with quarterly record high operational EBITDA of 34 million euro and quarterly record high sales volumes of 211,000 tons, up by 33% and 19% respectively in a rather challenging sourcing environment, which I think we have handled well so far. And before I hand over to Kristian, it can also be mentioned that our recently expanded feed factory in Bjorn is running smoothly. So consequently, we reiterate our targeted sales volume goal for this year of 650,000 tons, corresponding to a growth year-over-year of 11%, which aligns well with our farming volume growth. So with that, Kristian, the floor is all yours. You can take us through the financial figures and fundamentals. Thank you so far.

Thank you very much, Ivan. Good morning, everyone. Hope you are doing well. As mentioned, my name is Kristian Ellingsen, and I will discuss the financial figures and also have a look into the fundamentals, including supply and demand, and our own volume figures. As usual, we start with the overview of profit and loss, where the top line shows all-time high revenue of 1.73 billion euro on record high harvest volumes. And between operational revenues and operational EBIT, we have the operational costs. And there we saw a reduction year over year of 31 eurocent or 51 million euro. We saw a decline in most cost items, but the largest individual decrease was in the feed cost. The improvements in revenue and cost resulted in seasonally all-time high operational EBIT of 275 million euro. When it comes to the items between operational EBIT and financial EBIT, they include a fair value adjustment of biomass, which was positive this time around, on higher salmon prices. Earnings translated into underlying earnings per share of €0.33. Cash flow per share was somewhat impacted by working capital tie-up and COPX. Annualized return on capital employed was good at 15.8% in Q3. And the same goes for return on equity, which was 18.6%. We then move on to the financial position, the balance sheet. We see that the total assets have increased somewhat from year end, driven by investments in the value chain. I can also comment that the Q3 25 figures are not that comparable as this was before the NovoC acquisition. And Moe has a strong financial position with 43% equity ratio. Net interest-bearing debt increased somewhat during the quarter as cash flow generation was partly offset by seasonal working capital tie-up in sales and marketing, tax payments, and investment projects. And as Ivan mentioned, when it comes to Group NIBD, that will benefit from approximately 140 million euro in proceeds from the agreed divestment of Canada East once the transaction closes, pending competition clearance. When it comes to the guidance for cash flow items for this year, interest paid is increased by 10 million euro, otherwise the cash flow guidance is unchanged. And the financing we leave for self-study, as there are no changes to this slide from the last quarterly presentation. Moving on to cost. Following the reduction in feed prices in 2023 to 2025, feed prices have increased this year, driven by temporary supply issues from weak pelagic fisheries. The second anchovy fishery season in Peru was canceled this year, but the new fishery season in Peru is coming up in the spring, and we expect the situation over time will normalize. However, the current supply disruptions have put pressure on industry feed prices. and this is expected to lead to higher realized costs in 2027. On a positive note, the Scretting-Nutrico industrial partnership with Moe is well underway, paving the way for €55 million in annualized net savings related to that, and there are also some mitigating effects from adjustments to the feed formulation. Realized costs in Q426 is expected to be at the same level as Q425, i.e. somewhat up from the level seen now in the third quarter. This is due to negative scale effects from lower volumes, in addition to the already mentioned temporary inflation effects from the feed. And we in MoE continue to work with cost-cutting measures, both operational improvements and more generic cost measures. And this is an area where MoE has a very strong track record, high credibility. We have seen that this cost work has resulted in MoE taking the number one or the number two position in the various regions you operate, as demonstrated in the graph here on the slide. And in addition to having the highest earnings amongst peers, Moe also have the most stable earnings, as shown here on the graph. We also have a lower stock beta. Consequently, cost of equity is lower versus peers. And in addition to strong operational efficiency, we also have a strong utilization of our most important assets, the licenses. In Norway, we have become as much as 42% more efficient compared with 2018 and gone from being below the industry benchmark to being above. And this combination of industry leading margins, high license utilization has resulted in the number one position also on EBIT per license. Moe is also more COPX efficient than Peers, with a difference of 3 NOK per kilo less COPX, or 1.9 billion Norwegian kroner. And the strong operational efficiency, the strong asset turnover, has resulted in a return on capital employed above the 12% capital requirement. Also, the return on equity components are strong versus peers. If you start with the interest costs, that's below peers, where the lower Euro financing for MAUI versus NOC financing is a key driver. And the combination of lower cost of equity and lower funding costs gives a lower capital cost for MAUI. Another return on equity component is the tax component. Also, the tax cost benefits from the most extensive value chain in the industry, which is favorable in the resource rent tax system. And the final return on equity component is the equity multiplier. And Movi has a competitive equity share compared with peers, 43%, balancing return and risk. Not too high, not too low. So much for the financials. We move on to the fundamentals, starting with industry supply. Global market supply for the industry for salmon increased by 7% in the quarter when you adjust for inventory movements, 5% if you don't adjust for inventory movements. We see that this was driven by growth in Europe, partly offset by lower supply in Americas. And this also means that the trend from the second quarter with a normalization of supply has continued in the third quarter. Strong biological performance supported higher than expected harvesting in Norway and Chile during the quarter without a corresponding buildup of biomass. So the potential for further supply growth remains limited, with global volumes expected to decline by approximately 3% in the fourth quarter of this year. and increased by a low growth rate of around 1% in 2027. So then I'm referring to year-on-year figures. Demand continued to be strong in the third quarter. Demand growth was as high as 18% on higher consumption at increased prices. And one and a half year of high supply growth and attractive pricing appear to have strengthened underlying demand for salmon, with the market now absorbing record high quarterly volumes at higher prices than at the same period last year. We see that consumption in Europe increased by 11% on continued strong retail demand, We see good growth in the UK in particular, but also very positive developments in Germany, also in France. And a strong supply growth in 2025-2026 has contributed to more attractive salmon prices relative to other comparable proteins, stimulating demand in the European markets. Consumption in the U.S. increased by around 1% as available volumes were temporarily impacted by less supply from Chile and Canada. But underlying demand in the U.S. market remained good. We see that the fresh pre-packed products continue to grow strongly, and that's also reflected in Maui's own figures. We see that our own skin pack sales increased by 15% in the third quarter. In Asia, we see also an increased consumption. But we see also, of course, that there is a more moderate growth rate in the third quarter, reflecting a higher base level. China continue to lead the development with consumption increasing by a further 7% year on year. Following the 18% price increase in the third quarter, prices have continued to grow in Q4 as a further testament to the already mentioned developments. If we have a look at the outlook here for supply growth, these figures sum it all up. We expect limited industry supply growth ahead. both in the fourth quarter and next year and also in the coming years. For next year, this is caused by lower number of individuals globally in C for the industry and a tough baseline from very strong environmental conditions seen in 2026. So we expect a volume contraction of 3% in Q4 and around 1% volume growth in 2027. When it comes to our own volumes, we guide 620,000 tons this year, increasing to 630,000 tons in 2027, assuming normal growth conditions in the sea. Then I hand over to Ivan for the summary and also some comments on the outlook.

Thank you for that, Kristian. Much appreciated and strong numbers, I have to say. Now it's time to sum up and give some closing remarks before we wrap up with our Q&A session hosted by our IRO, Kim Dosvig. To begin with, I think it's fair to say that the third quarter turned out to be a very strong quarter again for Moe operationally. We had seasonally record high earnings, quarterly record high turnover and volumes, and once again very competitive margins to name a few. So I think we will give our peers a run for their money also this time around. So a big thank you to the organization for that. It's of course much, much appreciated. Otherwise, I have to say, it's very encouraging to see that the forecasted market recovery seems to be playing itself out, as prices were up by as much as 18% year-over-year in the third quarter, and 13% so far in the fourth quarter, driven by strong demand in most markets, combined with an industry supply growth, which has now normalized around a low single-digit rate, as previously untapped production capacity now is more or less fully utilized by The industry released by a fantastic growth in the sea this year but also last year. Which bodes well for the coming quarters and years despite once again rising feed prices following weak pelagic fisheries this year. The latter hopefully just temporarily as fisheries naturally fluctuate by nature. But in the meantime, higher feed prices mean inevitably higher realized costs in the end of the day. There is no hiding from that. And anyone saying otherwise has a too high cost in the first place, I would argue. And that doesn't apply to Mowi. So for Mowi, we expect somewhat higher realized costs in the fourth quarter when compared to the third quarter, also partly driven by lower harvest volumes and consequently less dilution of fixed costs. But year-over-year comparison, so when compared to the fourth quarter last year, we expect relatively stable realized costs in the fourth quarter. And then last but not least, in terms of harvest volumes, we are in good shape, I would say, as we have just increased our guidance for this year early this morning to now 620,000 tons from previously 600,000 tons due to the exceptionally good growth in the sea we have seen this year. And 620,000 tons are equivalent to a growth of as high as 11% year-over-year, most of which, of course, related to the acquisition of NovaSea last year, but there's also a great deal of organic growth in that number, approximately one-third, as we said earlier this morning. And as for next year, we expect to have 630,000 tons in Moe, assuming normal growth conditions, not the fantastic growth we have seen this year, because we cannot expect to hit a biological home run three years in a row, particularly not with an El Nino coming, but all that entails, then I guess the likelihood for that is even less than it otherwise would be. And finally, in Norway, we are aiming for 405,000 tons, which would be a major milestone for us, as there's always something special about reaching and crossing new three-digit numbers in harvest volumes. So if we do not nail that record this year, let's see if we cannot nail it next year and add another section to the history books. So that's Kristian and Kim. I think we are ready for the Q&A sessions. If you, Kristian, can please join me on the stage and help me out with some of the questions, and then you, Kim, can administer the mic and orchestrate the questions from the audience and the web.