Mowi Asa

To the salmon lover, you crave more than just food. You crave the taste of excellence, savoring the joy of something truly special. At Mowi, we do too. From the purest waters of Norway to the shores of Scotland, Ireland, Chile, and beyond, we share a mutual love, one filled with rich flavor, beautiful texture, and deep tradition. That's why we pour our hearts into the salmon you place on your tables. You deserve only the finest salmon. You deserve Moe. Salmon is good. Moe is goodness.

Good morning, everyone, both in the room and online. And thank you very much for joining us this morning in connection with the release and presentation of Mowi's first results of 2025. My name is Ivan Windheim. I'm the CEO of Mowi. And together with our CFO, Christian Ellingson, I will take you through the numbers and the fundamentals this morning. And to the best of my and our ability, add a few appropriate comments to them. And after presentation, our IRO, Kim Dersvik, will routinely host our Q&A session. For those of you who are following the presentation online, you can submit your questions or comments in advance, or as we go along, by email. Please refer to our website at movi.com for the necessary details. Disclaimer, I think we leave for self-study, so with the pleasantries, practicalities, and the disclaimer out of the way, I think we are ready for the highlights of the Q water. And to begin with, and on a general note, I think it's fair to say that the first quarter was another strong quarter for MoE, both operationally and biologically, with seasonally record high growth in the sea and improved biological metrics across the board, to mention a few. So once again, a big thank you to all of my colleagues who have made that happen. It's, of course, much, much appreciated. And this translated into, as the second bullet point there reads, an operational profit of 240 million euro in the quarter, an operational revenue of 1.36 billion euro. 108,000 tons harvest volumes, which is up by as much as 12% year over year, partly with the help of good environmental conditions, both in the northern and southern hemisphere. which seems to have been mirrored across the industry this time around, as industry supply growth was up by a hefty 13% year-over-year in the quarter in Europe and 8% globally. And if you rewind the time, our numbers we haven't seen since the first quarter of 2021, and we stand in stark contrast to the first quarter last year, when industry supply was down by 4% year-over-year. following biological issues in Norway, in large part due to a winter-sore vaccine that had lost efficacy, but which seems now to have been resolved. This, of course, impacted prices in the quarter, which I think is fair to say were lower than our expectations. But on a positive note, however, our price realization is stable year over year, indicating a good underlying demand for our products. Furthermore, our realized blended farming costs, i.e. weighted production costs for seven production countries, was 5.89 euro per kilo in the first quarter and was that somewhat down compared with the first quarter last year, following the positive cost trend we have seen over the past few quarters and underpinning our expectation of a further decrease in the coming months on economies of scale. ref more harvest volumes and enhance more dilution of fixed cost. Carrying on, two other divisions, consumer products and feed, they both delivered another good quarter, I would say. And in terms of a strategic review of the feed division, it's well underway. And finally, as the last bullet point reads, our board of directors has decided to distribute a quarterly dividend of 1.70 NOK per share after the first quarter. I think that does it for the highlights of the quarter. Then we move on to our farming volume guidance. And as you can see from this chart, we maintain our farming volume guidance for this year of 530,000 tons, supported by a strong biology so far this year, and seasonally record high standing biomass in C. And if anything, there is upside risk to this guidance. Furthermore, next year, we expect to harvest 600,000 tons with Nova Sea on board. And finally, we reiterate our farming volume target of at least 650,000 tons in 2029. And this we will achieve through increased smolt stocking and by means of post-smolt. Because we have still unutilized license capacity in Norway, in several of the countries where we operate, and with post-smolt we can increase the productivity on licenses already in operation, which are to be set into operation. Samoa's idiosyncratic growth continues unabated after the rather quiet 2010s and is now surpassing that of the wider industry and are listed peers by a large margin, cementing our number one position in Atlantic salmon. Then from the grand scheme of things to more specifically about the first quarter and first key financial figures. Chris and I will go in depth on all these numbers later this morning, so as not to be too repetitive, we'll just touch briefly upon the most important ones now. And turnover profit, I think we skip as we have just been through them. So let's start with cash. Net interest bearing debt stood at 1.88 billion euro at the end of the quarter. And with Nova Sea on board, it would have been 2.46 billion euro and corresponding equity ratio of 46%, indicating a sustainable pro forma debt level. Having said that, and as we have said previously, we will revert with a new long-term debt target for Mowi post-closing of Nova Sea. Furthermore, underlying earnings per share was €0.29 in the quarter, whilst the annualized return on capital employed was 16%. And in terms of regional margins for the value chain, we will get back to all these numbers later this morning when we drill down into the different business entities. But first, the elephant in the room, prices. As already said, prices in the quarter were lower than our expectations due to seasonally record high industry supply, following very favorable environmental conditions both in the northern and southern hemisphere. And further on that note, tariff turmoil in our largest single market, the US, has not helped the situation either. And as for the latter, now the big question is how this will develop going forward. No one knows the answer to that question, of course, but if I may venture to make an attempt. The direct effects, we believe, will be rather limited, as we are, after all, talking about only a 9% weighted tariff on 20% of our market, which, all else being equal, is equivalent to a demand hit of 2% if we assume a price illicitity of 1%. So in isolation, that should be manageable. We have been through far worse before. In the pandemic, we lost half of our market overnight, for example. And in 2014, large parts of the industry lost access to then the very important Russian market in the aftermath of the invasion of Crimea. And that market is, for all practical purposes, a goner today. So then we believe there is more reason to be concerned about the potentially indirect effect of this if the world economy slows down or takes a major blow. Personally, I'm not too worried, as the summer normally fares well in challenging times. People need food also in rainy days, and it's particularly in situations like this Moe's integrated and diversified global value chain comes into its own as it enables us to tailor our trade more effectively than most of our peers. And finally, it doesn't hurt being cost-competitive either, which Christian will talk more about later this morning. But first, above the reference price, which is the standard we like to hold ourselves to internally and measure ourselves against. Positively impacted by a contract share of 28% in the quarter and contract prices slightly above the prevailing spot price in addition to good harvest weights and a high quality of our fish. Then it's time to drill down into our 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 155 million euro for Mowi Norway in the quarter, whilst the margin was 2.51 euro per kilo, and harvest volume 62,000 tonnes. all of which are a result of improvements on all fronts in the quarter, as we can see from the chart there, apart from our price achievement, which is down year over year, left the second bar here on the chart. On strong operation performance, I would say, partly with the help of favourable environmental conditions along the Norwegian coastline. And this applies to all regions in the quarter in Norway, which may come across as a bit counterintuitive as region mid is well behind the others on this margin chart. The explanation is that region mid harvested very low volumes in the quarter and hence had very low dilution of fixed costs in addition to harvesting out high cost sites following issues with string jellyfish and gills last autumn. Because if you go behind the numbers, region mid was actually our best performing region in the first quarter, both in terms of cost to stock and in terms of growth in the sea. So consequently, we expect a lower realized production cost for region mid in the second quarter. Then our farming volume guidance for Norway. As we can see from this chart, we maintain our guidance for this year of 315,000 tonnes. And as we now see on board, we are on course for 400,000 tonnes in Norway. Then the last slide on MoviNorway, our sales contract portfolio. Contract share was 25% for MoviNorway in the first quarter and was a red spot on our guidance, and these contracts were neutral to our earnings. As for the second quarter, we expect our contract share to be stable, with relatively stable contract prices. Then it's time to drill down into our six other farming countries, and we start with Moe Scotland. Like Moe Norway, Moe Scotland leaves behind another strong quarter, I would say, with good biological results. This manifested itself in an operation profit of 32 million euro for Scottish operation in the first quarter, and a margin of 1.78 euro per kilo on 18,000 tons harvest volumes. Like MAUI Norway, MAUI Scotland can point to improvements on all fronts in the quarter, apart from price achievement, which is down year over year. Then overseas to Chile, Moe Chile posted an operation profit of 12 million euro in the second quarter, which is stable with the... I said second quarter, I meant first quarter, which is stable with the first quarter last year on a slightly lower margin of 88 euro cent per kilo and 14,000 tons harvest volumes, which is somewhat up compared with the first quarter last year. In a quarter, the better prices were offset by higher costs due to that we harvested out some high cost sites in Chile in the quarter. So consequently, we expect realized erosion costs for Mohoi-Chile to come down in the coming quarters. Then from north to Canada, more in Canada went from losing 2 million euro in the first quarter last year to make a profit of 4 million euro in this quarter thanks to better prices because harvest volumes are down year over year and cost is up. Otherwise, it's worth noting that Canada has come out as the winner so far in the tariff turmoil, with no tariffs on Canadian salmon into the US, versus 10% tariff on salmon of all other regions. Every cloud has a silver lining, they say, but it's still early days, so let's see if it stays like this. Which brings us to our two smallest farming entities, Mowi Island and Mowi Faroes. And if we take Mowi Island first, our Irish operation posted a modest operation profit of 2 million euro in the first quarter by means of a margin of 95 euro cent per kilo on 2,500 tons harvest volumes. Whilst Moby Faroes impressed with a margin of 2.75 euro per kilo and an operational profit of 12 million euro on 4,000 tonnes. And finally, biological metrics were once again stellar in the Faroes in the quarter, whilst they were more of a mixed bag in Ireland. Then our last farming entity this morning, Arctic fish, our Atlantic operation. Arctic fish broke even in the first quarter, which coincided sharply with the first quarter last year, when we made 10 million euro in operation profit in Iceland, due to both low prices and higher costs, because harvest volumes are relatively stable year over year. Prices are hard to do anything about in the short term. So consequently, our work to reduce costs to a sustainable level in Iceland continues unabated because neither we nor the industry are there today. So with that, I think we can conclude more with farming and move on to consumer products or downstream business. Consume products posted an operating profit of €33 million in the quarter, which is up from €24 million in the corresponding quarter last year, which I would say is a strong achievement as we had no help from upgrading this year, contrary to last year. On the other hand, lower spot prices were a helping hand for this part of the value chain. So in many ways, you can say this is some sort of a hedge for us. In terms of the market, we still see good demand for products, underpinned by stable prices year-over-year, notwithstanding the hefty supply growth of 13% year-over-year in the quarter in Europe and 8% globally. The last one out this morning, Moe Feed. The first quarter is a slow season for our feed operation, but all that entails. But just for that, I would say the first quarter was another strong quarter for Moe Feed, with seasonally record high volumes and a pace out of the starting blocks indicating new volume and earning records this year. And if you take the numbers, sold volumes were 112,000 tonnes in the quarter, which is up by an impressive 14,000 tonnes year-over-year, or 14%. Whilst operational EBITDA was €7 million in the quarter, versus €6 million in the comparable quarter last year. And finally, feed performance was evidently strong. And as we said earlier this morning, our strategic review of this division is well underway. And we will be working with more information in due course, but not today. It's too early in the process. So with that, Christian, 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're all doing well. As usual, we start with the overview of profit and loss. This shows a top line of 1.36 billion Euro, which is a record high level for Q1, and an increase from last year on strong volumes. Operational EBIT increased by approximately €14 million from last year, following lower costs and higher volumes. Achieved global prices were relatively stable. Earnings translated into an underlying earnings per share of €0.29. Return on capital employed was 16.3% and return on equity was 18.1%. And the difference between operational EBIT and financial EBIT was explained by the net fair value adjustment of biomass, which was negative this time around related to the price development. With regards to associated companies, this was mainly related to Nova-C. The operational result for Nova-C was 1.85 euro per kilo in Q1 on somewhat lower prices. We still expect competition clearance sometime in the second half, and from that point, Nova-C will be consolidated into the group figures. We then move on to the balance sheet. Moe's financial position is strong, with a covenant equity ratio of 51%. Performa covenant equity ratio, including the effects of the novice acquisition, would have been 49%. And then the ordinary equity ratio is listed here also on Performa basis, which would then be 46%. Total assets increased somewhat since Q1 2024, driven by fixed assets in addition to prepayments of tax. With regards to the cash flow, NIBD was slightly up during the quarter, as we see here. The cash contribution from EBITDA was partly offset by working capital tie up, mainly related to feed inventory. Cash outflows related to cutbacks, tax and financial items were reduced versus Q1 24. Net cash flow per share improved to €0.14 from €0.09 in Q1 2024. And with regards to NIBD, we will revert to an updated long-term NIBD target following closing of the NovaSea transaction. We maintain the guidance on the cash flow items listed here for the full year of 2025, so we leave the details here for self-study. And the same goes for the overview of our financing, which is unchanged from the Q4 presentation. Before we leave the financial section, we want to reiterate our commitment to cost focus and cost leadership. As shown in the graph above here, blended farming costs across our different farming regions has increased in recent years, driven by feed prices. On a positive note, feed prices decreased by approximately 8% during 2024, and we have expectations of continued decline. This will contribute to a reduction, as we see it, in the full cost for 2025 versus 2024. Cost is expected to be reduced in Q2, including also in our most important region, Norway. And then we expect cost to be further decreased in the second half of 2025. In addition to the feed price effect, we are expecting positive effects of our various cost measures. This includes operational improvements such as post-malt, MW4.0, yield, automation. And we have a good starting point, former position as the number one or number two performer in the various regions. We see that also from the graph below here. On a positive note, we see also that the three-year average shows that we are now number one also in Norway. At the end of the day, it's all about earnings and how much you earn on the licenses you have. And we find this slide here very interesting. Essentially, this slide encompasses both production efficiency, i.e. how much you get out of your licenses, and cost performance. Because over time, salmon farmers achieve more or less the salmon price. We are therefore very pleased to see that Farming Norway, our largest and most important farming country, there in Norway recorded the highest EBIT per standard license of NOK 31.2 million in 2024, ahead of all listed competitors. Even if you are just for FX, Norway is still number one. So this is a strong slide. When it comes to cost, feed cost is the number one cost item. Raw material market prices have improved for most input factors, including marine ingredients. The two most recent and showy wildcatch seasons in Peru in 24 were strong with regards to volumes and yield. And this has contributed to a favorable raw material price development. And the first and showy wild catch season this year started in April. This is now ongoing then. And with a quota of three million tons. This is the second highest quota during the last decade. So a positive outlook here. So much for financials, including cost. We then move on to market fundamentals in the quarter. In Q1, there was a solid supply growth from the salmon-producing regions of 8%. This was above guidance, as the biological improvements were even better than we assumed. In Norway, the volume growth was 13%, driven by an improved winter sore vaccine and higher temperatures. This has led to lower mortality, more individuals available for harvesting in the first quarter. Harvest growth in Norway is expected to be more moderate in the coming months. Also in the other regions, biological conditions and growth have improved. In Chile, harvest volumes increased by 4%, while biomass at the end of the quarter was up 14%. In Canada, volumes declined due to Canada West. Consumption was approximately 7,000 tons higher than supply, meaning that there was some inventory release in the quarter. Consumption growth was 5%, including inventory movements. And then with relatively stable global prices, this means that there was a good demand increase in the quarter, estimated to around 6%. And with regards to the various regions, we see that in EU plus UK, i.e. in Europe, consumption increased by 6%. Retail developments were good, particularly in the natural fresh category. We saw good developments in France, Germany, UK, Southern Europe. Food service was relatively stable. In the US, consumption increased by 6%. The fresh prepacked category continued to drive growth. And on our own numbers, this category increased by as much as 24%. Food service was relatively stable. Asia very positive in the quarter, as we see here with the 13% supply and consumption growth, particularly good in China with the 28% increase and improved availability of large salmon has been positive. Yeah, and the spot prices have been reduced, particularly in Europe, where the superior reference price was somewhat inflated in Q1 24 due to the challenging winter and low availability of superior salmon back then. Yeah, and I'm looking at the cheap prices. These were relatively stable on a global basis. And the higher than expected harvest volumes so far this year should be seen in context of catching up effect. We have seen challenging biology in recent years, no growth the last years since 2021. So 2025 is expected to be a recovery year with approximately 6% estimated supply growth. And then we expect supply to return to trend growth of around 2-3% in the coming years because of regulation constraints. With regards to our own volumes, we maintain our volume guidance of 530,000 tons, but we are even more confident that we will reach these volumes. Then it's time for Ivan and some comments on the outlook. Thank you.