1H 2019 Results Presentation to Investors and Analysts - Iceland Seafood
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1H 2019 Results Presentation to Investors and Analysts
1H 2019 Results
Forward Looking
Presentation to
Investors and Analysts Statements
Disclaimer
This presentation is furnished and intended for European market participants and
should be viewed in that manner.
Any potential forward looking statements contained in this presentation are
reflective of managements current views on future events and performance,
whilst the views are based on positions that management believes are
reasonable there is no assurances that these events and views will be
achieved. Forward looking views naturally involve uncertainties and risk and
consequently actual results may differ to the statements or views expressed.
1H 2019 Results Presentation to Investors and Analysts We are Iceland Seafood
1H 2019 Results
Global value added seafood producer and
Presentation to
Investors and Analysts global sales and marketing company
1932 620 12
Our beginning Employees Businesses in 8
Long lasting Market and client countries
relationship expertise Global distribution
7 +€440m Serving over
3000 customers
Value added factories Annual revenues
across
Innovation Listed on Nasdaq
and client focus First North 45 countries
1H 2019 Results
Key projects to drive growth
Presentation to
Investors and Analysts and efficiency
Facility extension and Ongoing merger of Closer cooperation
automation of Icelandic Iberica and with producers a key
production within IS Spain growth driver
Oceanpath
• Fresh fish production facility • The decision of merging • The benefits of integrated value
extended by 1,258m2, Icelandic Iberica and IS Spain chain, with key producers in
construction finalized in May announced in February. Magnus Iceland joining the shareholders
• Salmon filleting line up and Jonsson appointed as MD for group, have started to come
running from mid-July the merged entity and new through
• Total investment of €2.9m, will management team formed • Continuing focus on utilizing our
support further growth and • Significant opportunities of platform of 3000 customers
increase efficiency economies of scale and scope, worldwide in cooperation with
integration and optimization of producers in Iceland
functions and processes • At the same time, continue to
• Encourages better services to grow our substantial global
both customers and suppliers sourcing network
1H 2019 Results
Key projects to drive growth
Presentation to
Investors and Analysts and efficiency
Investment to enhance Main Market listing,
growth and profitability logical step for Iceland
of Achernar Seafood
• In 1H 2019, the board approved • More efficient pricing of shares
an investment project for and increased awareness
Achernar • Facilitates further growth, both
• The new building will consist of a organic and acquired
coldstore and a new production • Increased information sharing
area and discipline towards investors
• Investment will increase • Dividend policy – Pay 20-40% of
production capacity by ca. 50%, PAT annually as dividend.
secure storage space, make Targeted equity ratio of 35%,
logistic more efficient and which shall be reached within
improve quality controls, the next three years
• Total investment in the range
from €1.3-1.6m
1H 2019 Results
Merger in Spain - Creation of
Presentation to
Investors and Analysts South European powerhouse
Will create a strong value Significant synergy
added player with great opportunities, in
product and brand revenue as well as for
recognition in the market cost
• S-European market vitally important • Estimated annual synergies of
for cod products from Iceland €3.0-3.5m, expected to
materialize in full before year
Ongoing integration end 2021
process • To enjoy long term benefits, one
• Operation in Barcelona in single off cost will be incurred in the
location as of October this year coming periods
• Part of Icelandic production in Malaga
being moved to Barcelona as of June
2019
• Merged legal entity operating from
January 1st 2020
1H 2019 Results
New shares to be offered in
Presentation to
Investors and Analysts relation to main market listing
Main market listing in early Q4 Public offering of new shares
2019
• As previously announced, the Company is working • As approved at the Company‘s Annual General
towards a listing on Nasdaq Iceland meeting in June this year, 225,000,000 new shares
• Preparations are ongoing and the listing, along will be issued and sold by Iceland Seafood in a
with a public offering of new shares, is expected public offering managed by Kvika banki hf. 1)
in early Q4 2019 • Subscriptions will be offered in two order books,
which differ in terms of size of subscription,
pricing and rules of allocation
• The purpose of the offering is to further
strengthen the Issuer's financial position, facilitate
increased liquidity of the shares, create a more
diverse shareholder base and support continuing
growth
1) Equivalent to 9.63% of Iceland Seafood‘s share capital pre dilution and 8.78% post dilution
1H 2019 Results
Presentation to
Investors and Analysts
Financial Of Divisions
At Group level
performance Balance sheet
1H 2019 Results
Profitability driven
Presentation to
Investors and Analysts by value added activities
Corporate Structure Turnover Profit Before Tax
Value Added Divisions • Good cooperation and service to
producers in Iceland is vitally
• Following acquisitions last year,
important for the Group’s 2013 2013
two value added activities are Iceland Seafood
success
reported in two divisions
• The decision to merge Icelandic Strong combination 71%
29%
74% 26%
Iberica and Iceland Seafood • Strong ties to the source is key to
Spain will form a strong Va l u e Va l u e
our position in selling food Ad d e d Ad d e d
Sales &
organization in the important protein to the market Distribution Northern Southern
E urope E urope
Southern Europe market • Understanding of the market 2018 2018
• The two Value Added divisions demand and behavior is vital to Proforma Proforma
generate over 90% of total maximise sourcing power 9%
IS Spain
divisional PBT IS Iceland
• Having strong sourcing and IS
Barra c lough Icelandic 39%
Sales & Distribution processing capabilities and being IS France
Ibérica
close to the market is a key Oceanpath 61% 91%
• Approximately 60% of the Group IS Germany
attribute towards profitability Havelok Ec o m s a
sales are generated by products
IS USA
sourced from Iceland, the Achernar
Sales & Value Added
backbone of the Group
Distribution1H 2019 Results
Good results enhanced by > VA S-Europe
> VA N-Europe
Presentation to
Investors and Analysts strong sales growth > Sales & Distribution
€ m´s 1H 2019 1H 2018 1H 2018P Division incorporates Normalised PBT €3m
Sales 96.8 33.9 90.5 three manufacturing up from prior year, up
sites in Barcelona, €1m on proforma 2018
Net margin 10.8 3.3 10.5
Malaga and Argentina • Sales increase a key driver
Normalised EBITDA 4.9 1.0 3.9
• Cost reduction related to the
Normalised PBT* 3.8 0.8 2.8
Servicing the merger in Spain starting to pay off
* Normalised PBT represents Profits before tax before allowing for significant items
and discontinued operations
foodservice and retail • Outlook for weaker 2H of the year,
markets in Southern impacted by lower profits of
Europe Achernar and reduced volume of
wet salted products.
Sales increased by 7%
from prior year Proforma Key projects for 2H
2019
• Strong demand for light salted
products in S-Europe • Merged legal entity operating from
year beginning 2020
• Squid sales from Argentina, a new
project delivering sales of €2.1m in • Investment in coldstore and
1H 2019 production facility at Achernar,
total investment of €1.3-1.6m.1H 2019 Results
Challenging start of the year, > VA S-Europe
> VA N-Europe
Presentation to
Investors and Analysts encouraging outlook for 2H 2019 > Sales & Distribution
€ m´s 1H 2019 1H 2018 1H 2018P Division incorporates External challenges
50.1 manufacturing sites in impacting profits in
Sales 48.3 44.1
Grimsby, Bradford and the period
Net margin 5.4 4.8 6.2
two in Dublin • Fluctuations and higher
Normalised EBITDA 2.6 2.7 3.4 stockholding due to the ongoing
Normalised PBT* 1.6 1.9 2.5 uncertainty around Brexit
Servicing the retail
• High raw material prices
* Normalised PBT represents Profits before tax before allowing for significant items
and discontinued operations.
and foodservice
• UK retail trending towards
markets in the UK and
packed at source
Ireland
Outlook for improved
2H 2019
Sales 4% down on
• Salmon prices stabilizing and
prior year proforma,
currently at lower levels than
Normalised PBT down
same time last year. Benefits
€0.9m
from new investment in Ireland
• Sales in Ireland in line with
• New listings with key retailers
previous year, but at lower
and cost reduction actions in UK
margins
starting to pay off1H 2019 Results
Strong profit growth driven by > VA S-Europe
> VA N-Europe
Presentation to
Investors and Analysts close cooperation with producers > Sales & Distribution
€ m´s 1H 2019 1H 2018 1H 2018P The Sales & Distribution Normalised PBT of €1.0m
Sales 102.3 92.3 92.3 division incorporates doubling from prior year
Net margin 4.2 3.6 3.6
subsidiaries in Iceland, • Increased sales from Iceland a key
France, Germany and driver for improved profitability
Normalised EBITDA 1.3 0.7 0.7
the USA • Operating cost reducing by €0.1m
Normalised PBT* 1.0 0.5 0.5
helped by cost savings in Iceland and
* Normalised PBT represents Profits before tax before allowing for significant items
and discontinued operations
Division sells to over slight weakening of ISK
45 countries
Continued growth
expected in the second
Over 10% increase in
half of the year
sales from previous year
• Mackerel season starting well
• Significant increase in sales from
• Increased cod quotas
Iceland, driven by 70% increase in
• Q4 an important sales period for fresh
volume of frozen-at-sea products
products in France and Germany
• Mackerel from 2018 season sold
• Continued focus on closer cooperation
early 2019 which offsets the impact
with producers in Iceland
of no capelin season this yearSolid performance with
1H 2019 Results
Normalised PBT increasing Iceland Seafood
Presentation to
Investors and Analysts by 20% from 2018 Proforma Group
€ m´s 1H 2019 1H 2018 1H 2018P Sales up €18m from Net Profit of €2.9m
Sales 232.1 150.0 213.8 2018 Proforma driven impacted by one off
Net margin 20.5 11.7 20.2
by: cost of €1.3m, which
• Strong sales in S-Europe mainly consist of:
Normalised EBITDA 8.3 3.6 7.2
especially of light salted products • Changes in key management of
Normalised PBT* 5.5 2.2 4.6 the Group and in Spain
• Significant sales growth within
Net Profit 2.9 1.3 3.2 S&D, especially from frozen-at- • Cost of merging process in Spain
*Normalised PBT represents Profit before tax before allowing for significant items sea • Operational restructuring within
and discontinued operations.
**Proforma numbers based on 12mth operation of the acquired subsidiaries and VA-N Europe, reacting to external
include finance cost in HO related to the acquisitions.
Normalised PBT challenges.
growing by 20% from
2018 Proforma
• Significant sales growth a key
profit driver
• Positive impact from actions in all
divisions to drive efficiency and
reduce cost1H 2019 Results
Strong financial position and
Presentation to
Investors and Analysts good liquidity
€ m´s 30.6.2019 31.12.2018 Variance € m´s 30.6.2019 31.12.2018 Variance
Fixed assets 16.5 14.4 2.0 Total Equity 62.4 59.3 3.1
Leased assets 3.3 - 3.3 Thereof minority interest 3.2 2.9 0.3
Intangible assets 44.6 44.7 (0.1) Long term borrowings 9.7 6.6 3.1
Deferred tax/other 3.1 2.7 0.4 Lease liabilities 3.8 - 3.8
Non Current Assets 67.5 61.8 5.7 Obligations 2.1 1.7 0.4
Inventory 62.4 62.1 0.3 Non Current Liabilities 15.6 8.4 7.2
Trade and other receivables 61.1 62.4 (1.3) Short term borrowings 79.9 75.8 4.1
Other assets 3.5 3.5 (0.1) Trade and other payables 40.2 44.9 (4.7)
Bank deposits and cash 9.5 4.0 5.5 Other current liabilities 5.9 5.4 0.5
Current Assets 136.5 132.0 4.5 Current liabilities 126.0 126.1 (0.1)
Total Assets 204.0 193.8 10.2 Total Equity and Liabilities 204.0 193.8 10.2
Total assets of €204m Net debt amounts to New long term loans in Equity ratio of 30.6% at Group funding
up €10.2m from year end €80.2m compared to Spain, to secure long end of the period, headroom in excess of
2018, partly explained by €78.5m at end of 2018. term funding of the negative impact due to €28m at end of June
implementation of IFRS Increase driven by business and support IFRS 16 of 70bps 2019
16, Lease accounting seasonally higher NWC investments
position1H 2019 Results Presentation to Investors and Analysts Outlook
1H 2019 Results
Growing
Presentation to
Investors and Analysts with global trends
20,8% 2015 2020 2030 2050
2015 2030
39% 41% 44% 46%
14,5% 41%
7,4 bn 64%
8,5 bn
6,2% 7,3%
5,8%
Mi d d le c l a s s Re s t
Age +50 15-50 0-14
Beef Lamb Pork Chicken Fish
Drive towards Older western Growing Need for food
healthy living population Middle class solutions
Increasing seafood consumption Increasing seafood consumption Increasing seafood consumption Increasing seafood consumption
Source: Seafish.org Source: Eruostat Source: Brookings.edu1H 2019 Results
Continuing strong growth –
Presentation to
Investors and Analysts organic and acquisitive
Outlook for 2019 Uncertainty Focus and growth Full year 2019 Normalised
PBT* (m´s)
• Seafood demand in major markets • Group’s results are influenced by • Iceland Seafood’s priority in the
11.8
expected to remain strong fishing and quota changes coming periods is to integrate 11.0
10.8
• Significant upward price movement • Changes in underlying global our new companies into the
in some key species and markets economic conditions, currency Group to maximise strategic
• Global cod supply has reduced rates, import duty rates, opportunities as well as driving
whilst Iceland’s quota has competition and consumer organic growth
7.4
increased behaviors all generate • The Group remains on the
• Full year Normalised PBT uncertainty. lookout for strategic investments
estimated at €11.0-11.8m in 2019, • Among these uncertainties are in well positioned companies.
compared to €10.8m for 2018P Brexit, USA related tariffs and
• The Group targets €20m PBT in the political uncertainty in Argentina 3.5
3.3
*Normalised PBT represents Profits 2. 9
next 3-5 years, primarily via before tax before allowing for
significant
synergy effects and increased items and discontinued operations 1.7
1.3
1.0
profitability from current 2018P (proforma) based upon 2018 0 .5 0 .8
actuals as Oceanpath and Solo were
investments and both organic and owned for the full year
2010 2011 2012 2013 2014 2015 2016 2017 2018 2018P 2019
acquisitive growth. Outlook1H 2019 Results Presentation to Investors and Analysts We are Iceland Seafood
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