Mowi Asa

Moe has always led the way in perfecting salmon production, integrating every stage of the value chain. Now we're taking it to new heights. Welcome to Moe 4.0, where cutting edge technology meets sustainable innovation. Our smart farming begins at Moe Genetics, where advanced algorithms ensure each generation of our Moe strain is the best yet. In custom-built, recirculating aquaculture systems and state-of-the-art semi-closed productions, real-time monitoring of water quality nurtures strong, healthy post-smolt for the next phase of growth. Our digitalized seawater farms utilize cutting-edge machine perception and learning to monitor fish welfare and performance in real time. We adapt to climate change by deploying drones and applying AI, safeguarding our salmon from environmental challenges like algae and jellyfish. Innovative solutions like subsea farming and laser technology protect our salmon from sea lice, enhancing fish welfare. Maintenance by robotic cleaning and remote-operated vehicles ensure a stress-free, healthy environment for our salmon. From our remote operations centers, we use precision data to implement tailored feeding with optimized feed from our own factories. State of the art vessels transport our fish to AI powered smart factories, which guarantee top quality products, efficiently matched to demand and delivered through our digitalized logistics chain. Our precision marketing and e-commerce tools connect us directly with consumers In our Moe Insights platform, we harness countless real-time data from across the whole value chain to drive growth, reduce costs, enhance customer value, and champion sustainability and fish welfare. This is Moe 4.0, giving our analog salmon a digital voice.

Good morning everyone, both in the room and online. That was a little taste of the technological revolution taking place in fuel-based salmon farming these days. My name is Ivan Windheim and I'm the CEO of Mowi and together with our CFO Kristian Ellingsen, I will take you through the numbers this morning and to the best of my and our ability, give a few appropriate comments to them. And after the presentation, our IRO, Kim Dosvik, will routinely host a Q&A session, but also 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 our website at mowi.com for the necessary details. Disclaimer, I think we leave for a self-study. So with the pleasantries, practicalities, and the disclaimer out of the way, I think we are ready for the highlights of the quarter. And as the first bullet point reads, Moe posted 1.44 billion euro in operating revenues in the third quarter, which translated into an operational profit of 173 million euro, which is in accordance with our trading update of the 15th of October. And if you are to sum up the quarter in just a few words, I think it's fair to say it will be remembered for its record high operating revenues driven by all time high quarterly harvest volumes of 161,000 tons, which is in line with our volume guidance and which is another step towards 500,000 tons for the year, which would be a milestone achievement for us as it would be the first time in over 60 years history we crossed the for us magic 500,000 tons mark. and which is equivalent to a growth of 5.3% year over year. For next year, we expect to harvest 520,000 tons, which is the next step towards next volume milestone of 600,000 tons, which we seek to reach in 2029, and which is equivalent to a growth of 4% year-over-year, if we compare 2025 to 2024. So Moe's idiosyncratic growth continues, and it's still surpassing that of the wider industry by a large margin. Because as we can see from the charter, as recently as in 2018, we harvested 375,000 tons, which means we have grown our farming volumes by as much as 145,000 tons over the past few years. Or the CAGR of 4.8% versus 2.7% for the industry. And this growth has in practice been organic growth as we have lost more capacity than what we have bought in that period. So a big thank you to my 11,600 colleagues in 26 countries for their tireless efforts to make this happen. It's of course much, much appreciated. Otherwise, prices in the third quarter were relatively soft, I would say, due to seasonal high industry supply. And I realized blended farming costs, i.e. weighted farming costs for our seven farming countries, was impacted by seasonal issues with lice and gills in Norway, compounded this year by record high sea temperatures from central Norway northwards, in addition to being hit by phytoplankton in British Columbia. So I think it's fair to say that our realized blended farming cost of 5.72 euro per kilo in the third quarter was somewhat higher than what we expected and what we were hoping for. Although it's down from 5.84 euro per kilo in the second quarter and 605 euro per kilo in the first quarter. So the cost trend is still down, driven by lower feed prices. Feed accounts for, as you know, more than 40% of cost in a box. When it comes to two other divisions, both consumer products and feed enjoyed a strong quarter with record high results, and for feed parts also record high volumes, both capitalizing on record high farming volumes in the quarter. And finally, the board of directors has decided to distribute the quarterly dividend of 1.50 NOK per share after the third quarter. I think that does it for the highlights of the quarter, so now on to key financial figures. Christian will, as usual, go in depth on these numbers later this morning, so it's not to be too repetitive. I think we'll just touch briefly upon the most important ones now and leave the rest for later. And turnover profit, I think we skip as we have just been through them. So if you start with cash, net interest rate came in at 1.77 billion euro in the third quarter, which is down from 1.88 billion euro in the second quarter due to partly release of working capital as a result of lower standing biomass cost. And 1.77 billion euro is also quite close to our long-term debt target of 1.7 billion euro. Equity ratio was of roughly 48% at the end of the quarter, so I think we can say we have a strong balance sheet. Furthermore, online earnings per share was 21 euro cent, whilst annualized return on capital employed was 13%. And finally, in terms of regional margins through the value chain, Farming Europe, which accounts for four out of every five kilos of Atlantic salmon we produce in Mowi, once again stood out as the margin winner due to both cost and price. So nothing new under the sun in that respect. Then prices in the quarter. As expected, prices in Europe corrected down in the third quarter from record levels in the first half of the year on seasonal higher industry supply. And prices in America has continued to be soft in the wake of the cost of living crisis there. But as I said previously, we expect the salmon consumption in America to gradually pick up the pace in parallel with Western economies continuing to recover on lower interest rates and higher real wages. And more generally speaking, in the short term, we believe that seasonal lower industry supply in the run up to Christmas and into the new year will be a positive price trigger in addition to the Christmas demand itself. So in other words, we believe in a tighter market balance in the coming months than what we have seen recently, which under normal circumstances should bode well for our price achievement. Speaking of which, Our own price achievement in the quarter was 14% above the reference price, which is the standard we like to hold ourselves to internally. Positively impacted by contract share of 21% in the quarter and contract prices above the prevailing spot price. But negatively impacted by lower harvest rates in Norway as a result of already addressed seasonal issues with gills and lice compounded by record high sea temperatures in parts of Norway. You know, six of the farming countries, however, harvest rates were good in the quarter, and Superchef was excellent across the board. Then it's time to have a look at the different business entities and we start as usual with Mowi Norway, the locomotive of our business model. And if you take the numbers first, operation profit was 146 million euro for Mowi Norway in the third quarter, whilst margin was 1.38 euro per kilo and harvest volumes record high 106 000 tons. As we can see from the chart here, both profit and margin are down year over year due to lower spot prices and little assistance from a relatively low contract share for Mogenova in the quarter. because harvest volumes are substantially up year-over-year, from 86,000 tons in the third quarter last year to 106,000 tons this year. The cost is relatively stable, although it's somewhat higher than what we expected and what we were hoping for due to already addressed sea-store issues with gills and lice compounded by record high sea temperatures from central Norway northwards. which lingered on into October, but November looks better. And in terms of string jellyfish, we have just had a few sporadic cases so far, so nothing of significance. And no signs of winter source, but it's still early days. And finally, as the last bullet point reads, the FX hit in the wake of the unprecedented weakening of the NOC we saw last year and the long production and accounting cycle cost Norway 18 million euro in the third quarter or 1.17 euros per kilo versus our Norwegian peers. So just for that, our operating profit would have been 164 million euro in the quarter, not 146 million euro. And our EBIT margin, 1.55 euro per kilo and not 1.38 euro per kilo. So please take that into account when you do your own benchmark comparisons for Norway for the third quarter. Then the breakdown of the margins for the different regions in Moe Norway in the quarter. As you can see from this chart, it was a rather mixed bag this time around due to already addressed issues with biology. So as not to be too repetitive, I think we leave it at that and move on to the last slide on Moe Norway. Our sales contract portfolio. The contract share was 16% from over and over in the third quarter and was without a spot on our guidance. These contracts contributed, as already said, positively to our earnings. As for the fourth quarter, we expect the contract share to be about 21% with relatively stable contract prices quarter over quarter. And finally, as regards to next year, since we are negotiating new contracts as we speak, we cannot say much about that today, other than to ask for your understanding that we will revert to it in February at our fourth quarter release. In the meantime, we must keep things close to the chest for commercial reasons. Then it's time to have a look at our six other farming countries, and we start with Mowi Scotland. Mowi Scotland delivered a good quarter biologically, I would say. Much better than last year, and particularly taking into account season. and obviously helped or will help from a lower sea temperatures and this resulted in operation profit of 30 million euro for a Scottish operation in the quarter which is up from 9 million euro in a comparable quarter last year due to lower cost because as we can see from this chart price achievement is slightly down year over year and volumes are quite stable at 15 000 tons As for the fourth quarter, I think we can say things have developed well so far, knock on wood. Then overseas to Chile, MoviChile also delivered a set of good biological metrics in the third quarter, I would say, but soft prices in Americas unfortunately weighed once again on an otherwise good quarter for our Chilean operation. So despite being best on realized cost in Movi farming in the quarter, margin came therefore to modest 59 Eurocent per kilo for our Chilean salmon. And paired with 23,000 tons harvest volumes, this translated into an operation profit of 14 million euro in the quarter, which is up from 9 million euro in the third quarter last year. And soft prices were also a recurring theme in Mowi, Canada in the quarter. And combined with algae issues and aloe vera mortality in British Columbia, this resulted in a loss of 4 million euro in the quarter. On a positive note, however, biology in Canada East was good and margin was positive 64 euros per kilo. And biology in Canada West in British Columbia recovered in September and has been good so far in the fourth quarter. And finally, in terms of our strategic review of British Columbia, we have nothing new to report this morning other than that we have started a process and that it is well underway and we will revert with more information when we have some. Then the time has come for two smallest farming entities, Mowi Ireland and Mowi Faroes. And if you take Mowi Ireland first, operation profit was 4.3 million Euro for our Irish operation in the quarter, which is a good result, I would say, given the time of year. Margin was 1.18 Euro per kilo and harvest volumes 3,700 tons. In more farrows, we saw relatively soft earnings and margin in the quarter to be farrows, with an operation profit of 1.8 million euro by means of a margin of 61 euro cent per kilo on 3,100 tons harvest volumes. Adversely impacted by harvesting from a high-cost site in the quarter, in addition to being 100% exposed to the spot price. because biological metrics were once again strong for our Faroese operation with a monthly mortality rate of 0.2% and a biological feed conversion ratio of 1.02, just to mention a few. It doesn't get much better than that. Then our Atlantic operation. Operation profit was €1.3 million for Arctic fish in the third quarter, whilst margin was €37 per kilo and harvest volumes 3,400 tonnes. Both profit and margin bear the mark of 100% spot price exposure in the quarter in a market with soft spot prices. because biological performance was good in Iceland in the quarter with, for example, a monthly mortality rate almost on par with Moe Faroes, showcasing some of the potential in Iceland if we can get the framework conditions right and scale this up. With that, I think we can conclude Moe Farming and move on to consumer products or downstream business. Well, great profit was record high 44 million Euro for consumer products in the third quarter, capitalizing on record high farming volumes and seasonal low raw material prices in addition to good operational performance more or less across the board. And which is up from 40 million Euro in the third quarter last year. So I think we can say we still see good demand for our products. Then last one out this morning, Moe Feed. More feed also capitalized on record high farming volumes in the quarter and to date for that matter. And this translated into an all time high operation EBITDA of 25 million Euro for our feed operation on all time high sold volumes of 191,000 tons. And this is up from 20 million Euro in operation EBITDA in the third quarter last year on then 169,000 tons. And feed performance was evidently strong in the quarter and year to date, demonstrated by all the volume records, which is, of course, extremely important for us as the world's largest salmon farmer by far. So I think we can say things go in the right direction for our feed operation. So with that, Christian, I think we are ready for the financial figures and fundamentals. Thank you so far.

Thank you very much, Ivan. Good morning, everyone. Hope you are all doing well. As usual, we start with the overview of profit and loss, which shows an all-time high revenue of 1.44 billion euro. This is up 6% on the highest volumes ever harvested. Operational EBIT was 173 million euro. where the movement from Q3 23 is explained by lower market prices. But still, this translates into an annualized return on capital employed of 12.6%, i.e. above the target level. When it comes to the items between operational EBIT and financial EBIT, the difference is mainly explained by the net fair value adjustment of biomass, which was colored by lower salmon prices. With regards to income from associates, There have been industry-wide biological issues in Northern Norway, and the operational result for NovaSea was 1.21 euro per kilo, which was below Norway region north in Q3. Our underlying earnings per share was 21 euro cent, while cash flow per share was 34 euro cent, positively influenced by the working capital movement. We then move on to the balance sheet where total assets are somewhat down from year end 23, driven by current items. And Moe's financial position is strong with a 51% covenant equity ratio. The cashflow was strong in the quarter In addition to the contribution from EBITDA, there was a working capital release in Q3 of 99 million euros, of which approximately 70 million euro were related to farming and lower biomass cost at stock, driven by lower feed prices. Then there was also some release related to accounts receivable and inventory in Maui feed. CapEx was 54 million Euro adjusted for payment of 58 million Euro related to the traffic light auction in June. Net interest bearing debt was improved during the quarter from 1.88 billion Euro to 1.77 at the end of Q3, somewhat above the long-term target of 1.7 billion Euro. The 2024 full year cash flow guidance has been adjusted somewhat with a net positive effect of the changes from the Q2 guiding of 30 million euro. Working capital build up this year is estimated to 100 million euro, capex to 290, interest payments 115 and taxes to 85 million euro. When it comes to the overview of the financing, this is unchanged from the previous quarter. And consequently, we leave this for self study. But speaking of financing, we would take this opportunity to remind everyone of the positive effects of being financed in Euro versus Norwegian kroner. Euroiber is consistently lower than Niber. And this gap is expected to increase based on interest forward curves. We get the full effect of this with our floating raised, sorry, floating rate based financing. And for 2025, we expect a saving of around 25 million Euro related to lower rates compared with 2024. Historically, there has been a significant advantage to be financed in Euro instead of Norwegian kronor. This removes FX fluctuations. There has also been a saving for Moe of over 100 million Euro the last 10 years. And the forward curves indicate that this advantage is very much valid also in the coming years, as we see here with the 1.6 percentage points lower Euro rate versus NOC rate. And consequently, this supports a lower cost of capital for companies financed in Euro, such as Moe. Another positive cash effect is related to our most important input factor, namely feed. Last year, we saw a decline in prices for vegetable-based commodities. And this year, the marine ingredients have followed suit. The marine ingredients represent about 20% of total full cost. And these prices are down above 30% from the peak. following a good first fishery season for anchovy in Peru, and also prospects of a good second season, which commenced now in November. The quota for both the first and second season this year have been above the 10 year average, as shown here in the graph. And the yield was also good in the first season this year. Consequently, feed prices have continued to trend down, and the year-to-date effect is around 6%. We then move on to market fundamentals. Global supply increased by 5%, which was in line with the guiding we gave in Q2. This was a new quarterly record high level for global supply, driven by Norway. This was a result of increased small stocking, good production in the quarter, but also early harvesting from rising industry biological challenges, particularly at the end of the quarter. And standing biomass end September in Norway is down 0.5% from last year for the industry. The value of the consumption remained at the peak level. In Europe, consumption in volume terms increased by 8% with continued positive retail developments and positive market activity effects of promotions. Food service was relatively stable. Consumption in the US was stable as opposed to the strong growth we have seen for many years now. Food service consumption offset some retail growth and the US is behind the recovery curve compared with Europe. But we believe that demand will improve in due course. In Asia, there was good growth in all markets, 5% in total. And the record high seasonal supply took its toll on prices in the quarter, but we expect much tighter market balance in the coming months on lower supply. And when we analyze biomass data, the biomass, number of individuals, current trends in the various countries, we estimate industry supply growth for 2025 of modest 2%, with a risk on the downside. The split is then shown here between the various countries. And this means that The 2% is consistent also with what we believe done for the coming years when it comes to supply growth. We are in a structural under supply scenario where supply is definitely down from the previous decade as we see it. But when it comes to our own volumes, we maintain the guidance of 500,000 tons in 2024. And for 2025, we guide on 520,000 tons, supported by record high biomass NC of 329,000 tons lightweight. And this 520,000 tons is the next step to our next milestone of 600,000 tons, expected volume in 2029, as we see here on the graph. with reference to the capital market day and information we provided back in September. And this is then a continuation of our good growth trajectory the last years where we have gone from lagging behind on volume growth to being ahead on volumes. This in the end is the most important volume value earnings driver in the business. And we would also like to take this opportunity to remind everyone of our good track record when it comes to actually delivering on our volume guidance. We have a plus 0.2 positive deviation when it comes to our guidance and what we actually deliver on. This is done over the last five years versus minus 7.9% for our listed peers. So this provides confidence as we see it. Then it's over to Ivan for some comments on the outlook.

Thank you, Christian. Much appreciated. And it's time to conclude with some closing remarks before we wrap it all up with our Q&A session hosted by our IRO, Kim Dusvik. And I said earlier this morning, the third quarter was another record-breaking quarter for Mowi in terms of top line and growth. And by extension, we have maintained our volume guidance of 500,000 tons for this year, which would be a Milestone achievement for us, as it will be the first time in Moe's 60 years history we crossed the for us magic 500,000 tons mark and which is equivalent to a growth of 5.3% year over year. And for next year we expect to harvest 520,000 tons which is the first step towards next volume milestone of 600,000 tons which we seek to reach in 2029. and which is equivalent to a growth of 4% year-over-year if you compare 2025 to 2024. So Mowi's idiosyncratic growth continues, and it's still surpassing that of the wider industry by a large margin. Because as recently as in 2018, we harvested only 375,000 tons in Mowi, which means we have grown our farming volumes by as much as 145,000 tons over the past few years. with a KG of 4.8% versus 2.7% for the industry. And this growth has in practice been organic growth. Otherwise, as we also said earlier this morning, we expect a tighter market balance in the coming months than what we have seen recently, which under normal circumstances should bode well for our price achievement. And further on that note, in all humility, we believe that Contali is overshooting again with the industry supply growth estimate of 5% for next year. And as Kristin just showed us, our peers have a history of promising much more volumes than they ultimately deliver. So we for our part believe that industry supply growth next year once again will be at the low end, at a modest 2%. And if anything, we believe the risk is on the downside. And finally, as the last bullet point reads, we expect a realized blended farming cost in the fourth quarter on par with or lower than that of the third quarter, depending on biological cost, because the cost trend is down, driven by lower feed prices, and this will sooner or later manifest itself further in the P&L cost. So with that, Christian and Kim, I think we are ready for the Q&A session. So if Christian can please join me on the stage and Kim can run or administer the mic.

Christian Nordby, Arctic Securities. It's obviously a lot of uncertainty regarding string jellyfish and winter wounds, but what are your expectations regarding downgrades or superior share for the coming winter?

That's a really good question and I think the 100% honest answer is that no one knows. Nothing that has happened so far will impact that question. That's my mere assertion. So we have had a few cases so far as we said during the presentation but nothing of significance and also limited to region mid so central Norway so but let's see this week those cases have been in retreats but what next week brings or the week after and no one knows so

And like you say, there's been quite a lot of sea lice treatments in northern Norway. How do you think that will impact the wound situation and later downgrades in the coming winter?

Well, it's obviously not positive, but having said that, we also have taken several over measures. So the net effect of this, I still hope will be much better than last year. But of course, the more you handle the fish, well, the more the more biological issues you get. That's the name of the game in biological production. Thank you.

You mentioned that feed prices have come down some 6% from the year to date, and that might also be from the peak levels, but what is the potential drop based on the recent feed prices or ingredient prices in your view?

It's a tough one. We never guide on future costs. We take the next quarter. At the end of the day, it depends on the biological cost. It doesn't help if your input factors drop when your biological issues increase. But hopefully the third quarter was an exception to the rule. Last year was a good year for us in Norway and also the year before that and this year has been a troublesome year if we are completely honest with each other. But normally things fluctuate also in biology so let's hope next year is getting much better and that we also can have 100% of these tailwinds from lower input factors because I think we have had our share of setbacks in recent months in Norway.

Okay, then a question from the web, from Marius Kirkemar, Sparbank 1. If you can comment on the growth outlook in Norway. We guide on 3.3% for growth in Maui Norway versus industry growth of only 1-2%. If you can comment on the reasoning why Maui is growing more than the industry.

As Christian just showed us here, we have grown more than industry for many years and that's our plan to continue with. So I think it is as easy as that and as difficult as that. It's not easy to deliver growth in this industry. You need investments, you need a lot of focus and you need an organization that is very supportive and and ship shape but if you look at our numbers now we have grown our business now since volume wise since 2017 actually so and our clear goal is to to continue with this growth trajectory and IE then we also will outgrow the the rest of the industry and the other listed peers

Hi, Alex Ochner from GMB Markets. So just a question regarding dividends and your net interest-bearing debt targets. Typically or historically, it's been linked to supply growth, net interest-bearing debts per kilo produced. You've now announced new targets, significant growth. The feed division, the consumer products division is now generating healthy profits. What should we expect in terms of the net interest-bearing debt target going forward? Is that up for revision?

Yeah, absolutely. Absolutely. If we can continue to grow this business and also continue to grow cash flow, then we can also handle more debt and also increase our dividend capacity. So absolutely everything is connected to everything else here.

Thank you.

Welcome. That's it.

No more questions from the web.

Okay. Then it only remains for me to thank everyone for the attention. We hope to see you back already in February at the fourth quarter release. Meanwhile, take care and have a great day ahead. Thank you.