2. Agenda
Opening remarks
Introduction to Cermaq and strategic priorities
Mainstream - Long term cost optimization
EWOS - Focus on excellence
Mainstream - Chilean farming update
Closing remarks & preparing for site visits
2
3. Cermaq introduction
Two business units; EWOS and Mainstream
EWOS: The leading producer of salmonid
feed – market share of 37%
Sales 2011: 1,081,000 tonns
Mainstream: The third largest global salmon
farming company - market share of app. 7%
Sales 2011: 108,500 tons (gwe)
Total EBIT pre gain 2011 of NOK 1,369 mill
4,000 employees
Operations: Norway, Chile, Canada, Scotland,
Vietnam
3
4. Present in all major salmonid regions
Pangasius feed
in Vietnam
Sales volume per region (2011)
Canada Vietnam
Canada Norw ay
Scotland
20% 7%
8% 3%
35%
51% Norw ay
31%
45% Chile
Chile
4
5. Sustainable aquaculture our mission
• Our mission is Sustainable
Aquaculture
• Our vision is to to be a global leader in
sustainable aquaculture with main
focus on farming of salmon and trout
and the production of feed for these
fish species
Sustainable aquaculture defined as
• Operating the business in such a way that it does not reduce the potential for future aquaculture
activity and the production of fish feed with basis in the same natural resources
• Operating in the society in such a way that the business maintains the future support of our
stakeholders, including our employees, the local community, politicians and authorities, consumers and
customers.
• Creating value to the shareholders in such a way that the business can attract capital and secure growth
and profitability
5
6. Our platform for value creation
PLATFORM BUSINESS STRUCTURE LONG-TERM OBJECTIVE
CREATING SHAREHOLDER
OBJECTIVES CERMAQ
VALUE
Profitable growth within
Two separate business units salmon farming and feed
A leading global supplier of
EWOS – Feed operations
feed to salmonids
Mainstream - Farming Delivering solid operational
A significant player within
and financial results
global farming of salmonid
species A decentralized operating Sound financing and ability to
structure reap benefits of growth
Among the best players in
opportunities
R&D on fish feed and salmon
farming Centralized strategy, finance,
Maintain strong operational IT and corporate functions
… while maintaining a strong
focus as a basis for success
dedication to sustainable
and future growth
aquaculture
6
6
7. Strong financial development and position
KEY FINANCIALS SHAREPRICE DEVELOPMENT
Operating revenues (NOK bn) Dividend per share
EBITDA%
NOK 2.25 NOK 0 NOK 1.50 NOK 5.40 NOK 4.63
CAGR
+11%
12
10
9 9
8
18% 15%
13%
10%
4%
2007 2008 2009 2010 2011
NIBD/EBITDA KEY RATIOS
9.4x ROCE
Equity ratio
57.3% 59.8% 59.5%
52.7%
42.0%
21.7% 22.1%
2.1x 14.2%
1.2x 8.0%
0.7x 0.6x 0.8%
2007 2008 2009 2010 2011 2007 2008 2009 2010 2011
7
7
8. Value Chain Positioning
No position
Sourcing
No position partners
PELAGIC FISH MEAL AND
FISHING FLEET OIL FACTORIES
FEED
PRIMARY
TERRESTRIAL RAW MATERIAL
FARMING PROCES- VAP SALES
FARMING PROCESSING
SING
BROODSTOCK SMOLT
Limited
Partnerships in position
selected areas
8
8
9. EWOS – a leading global feed supplier
7 factories world wide
20 feed production lines
Norway, UK, Chile, Canada and Vietnam
Global market share of 37% on salmonid feed
More than 1,000 employees
> 1 mill tonnes sold in 2011
Significant activities in R&D through EWOS Innovation
EBIT/tonnes (NOK) ROCE (PERCENT)
600
30
500 25
400 20
300 15
200 10
5
100
0
0
2007 2008 2009 2010 2011
2007 2008 2009 2010 2011
9
11. ..the combination creates value for Cermaq Group
KNOWLEDGE JOINT PROJECTS
Feed the single largest cost
component in farming
Combined knowledge
improves performance
ORGANIZATIONAL
FINANCIAL SYNERGIES DEVELOPMENT
Less volatile feed business Larger variances in
improves financial stability and competencies improves
structure solutions
Currency hedging synergies Exchange of personnel
11
13. Lower supply growth and strong demand support positive sentiment
HARVEST OF ATLANTIC SALMON CHANGES IN RETAIL SALE IN KEY MARKETS (%)
Change in price Change in volume Change in value
1,975
1,914 GERMANY – SMOKED
145 Other
137 16
107 Canada 11
120 7 8 10 8 7
1,620 155 UK 2 3 2 3 2
1
128 150
-1
-3
110
422 Chile 2007 2008 2009 2010 2011
155 378
FRANCE – SMOKED
221 14
10 12 9
8
6 6 5 6
3 4
1 1
-1
-5
2007 2008 2009 2010 2011
1,129 1,146 Norway
1,006 FRANCE – FRESH FILLETS
20
14
10
6 6
1 0 2
0 0 -2
-6 -8
-9 -11
2011 2012 2013
2007 2008 2009 2010 2011
Source: Kontali Analyse Source: Norw egian Seafood Council/Cermaq
13
14. Organic growth in Mainstream require new licenses from 2014
VOLUME IN CURRENT OPERATIONS
Estimated harvest volumes based on full utilization, gwe kt
CAGR
+1%
145 145
141
119
65 65 Chile
68
48
21 21 Canada
20 17
32 35 35 Norway - FM
27
24 24 24 24 Norway - NL
2012 2013 2014 2015
Note: In Canada, 2013 estimated volume is after IHN culling
14
15. Limited aquisition opportunities
Enterprise Value 81
NOK/kg 79
75
71
70
60 60
52
50 50
49
38
35
33
26
21
16 17
Midnor S. Andes Aurora Follalaks Heritage Aqua F. Senja S. MHG Fjord Hydrotech Polarlaks Arctic Rauma MS, W/R Lakeland Sjøtroll Bakkafrost Jøkelfjord
Lerøy Cermaq Lerøy Cermaq Cermaq Pan Fish Salmar Pan Fish Pan Fish Lerøy Cermaq Cermaq Salmar Morpol Morpol Lerøy Salmar Morpol
2003 2004 2004 2004 2004 2005 2005 2006 2006 2006 2006 2006 2010 2010 2010 2010 2010 2011
Limited # of transactions during the low cycle
Recent transactions suggests significant synergies or long term high EBIT expectations
Note: Selected transaction multiples (harvest next FY)
Source: ABGSC
15
16. Key strategic objectives – Mainstream
Long term cost optimization by focus on preventive
fish health and best in class operations
– Support industry regulations in Chile to secure long term
sustainable operations
Profitable growth in Mainstream Norway
– Develop existing licenses and actively pursue new licenses
– Focus on Nordland and Finnmark
MAINSTREAM
Profitable growth Mainstream Chile
– Increase capacity to enable growth and operational flexibility
– Acquisitions in selected areas
Maintain current activity in Mainstream Canada
– Focus on good biological and operational results at current
levels
16
17. EWOS with 8% annual volume growth in salmonids last 6 years
EWOS salmonid feed volumes EWOS
Thousand tonnes EWOS market share in salmonids
1,227
7.9%
1,081
902 876
847
777 788
37%
35% 35%
33% 32% 33%
2006 2007 2008 2009 2010 2011 2012E
• Approximately 95% organic growth
• Continued growth dependent also on increased salmon farming
• Limited growth in EWOS so far from new markets
Source: Cermaq 2011 annual report
17
18. Securing continued leadership position
EST. SALMONID FEED VOLUMES (1000 TONNES) FOCUS GOING FOWARD
5.0% 1,420 PRIORITY ONE - SALMONIDS
1,353
1,288
1,227 • Secure and develop leading position in
salmonids
• Invest in new capacity if and when needed
PRIORITY 2 – NEW MARKETS
• Investment in Vietnam to be developed to
secure profitable growth
• Assess feasibility and develop plans for
other markets next 12-18 months
2012E 2013E 2014E 2015E
18
19. Substantial farming consolidation in Norway the last 20 years
CONSOLIDATION IN NORWEGIAN FISH FARMING IN 2011, 40% WITH MAJOR PLAYERS
Number of commercial licenses per holder category Number of all licenses per holder category
976
10 1 license
889 897
29 156 2-5 licenses
846 34
2-5 1 license
45
148 licenses 1% >30
760
215 122 6-10 licenses licenses
65 16%
692 186
84 6-10
licenses
70 40%
221
283 12%
162
97 688
636 >10 licenses
(70%)
342 570 (71%) 31%
(64%)
453
11-30
(54%)
315 licenses
(41%)
53
76
(11%)
1994 1998 2002 2006 2008 2011
Source: Kontali
19
20. Cermaqs Strategic Positioning
Farming & Value
Feed Sales and
Feed primary added
ingredients marketing
processing products
• Large farming consolidation last 15 # of players producing 80% of volume
years – opportunities in Norway & 70 Norway
Chile also forward Chile
60
• Main focus on growth in feed and Scotland
farming – continue developing value 50 Canada
added product business in Chile
40
• R&D as an important part of value
creation 30
- New functional feeds to secure fish 20
health continuously under development
- Alternative sources to produce fish oil 10
explored
0
• Participation in industry development 1995 2000 2005 2010 2015
Source: Kontali
20
21. Key strategic objectives – Group
Be a leading global aquaculture company within Salmonids with
presence in all major production regions
Continue developing a coordinated feed and farming group
Strong operational and financial performance on key value
CERMAQ drivers
Participate in the in the salmonid industry consolidation to the
extent this generates shareholder values
Secure a strong financial position with flexibility during cycles
and be able to reap opportunities
21
22. Agenda
Opening remarks
Introduction to Cermaq and strategic priorities
Mainstream - Long term cost optimization
EWOS - Focus on excellence
Mainstream - Chilean farming update
Closing remarks & preparing for site visits
22
23. Mainstream leadership philosophy
Competence and decision-making close to the fish
Lean business management at BU level
Autonomous OpCos
Committed and educated site management
Highest possible operating result through
Biological performance
Optimization
Benchmarking
Prudence
Efficient procurement
23
24. Cost leadership strategies – various approaches
SHORT TERM LONGER TERM LONG TERM
• Sustainability, i.e.,
• Cost per kg fish
• Cost per kg fish having lowest
over time/across
MAIN FOCUS harvested possible risk
cycles
adjusted cost
• Low cost (as long • Low average cost • Might give higher
as everything over time
works…) short term costs
IMPLICATIONS • Possibly higher • Should over time
• Close to the limit cost short term give lower costs
of risks and
regulations and less volatility
WE STAY FAITHFUL TO OUR LONG-TERM STRATEGY
24
25. Mainstream cost optimization: Critical to focus on the right elements
FOCUSING ON THE RIGHT ELEMENTS KEY DRIVERS FOR OPTIMIZING COST
Preventive fish health
LOWEST POSSIBLE
COST PER KG
Smolt quality
HIGHEST EBIT
=
EBIT per kg
x
Volum Optimal feed and nutrition
25
26. The main driver in cost optimization is biological performance
THE TWO MAJOR COST ELEMENTS EFFECTS ON PERFORMANCE
Effects on total cost from a 10%
increase in cost Increased mortality by 5%-points
increases costs by NOK 0.35-0.70 per
4% kg
Increased feed conversion of 5%
increases cost by NOK ~0.50 per kg
1%
5% lower MAB utilization reduce EBIT
by NOK ~1 per kg
Smolt cost Feed cost
26
27. Dedicated focus on fish health across organization
Mainstream Central fish health team
• Research on critical topics (e.g., ISA, SRS,
Parvicapsula)
• Developing policies and best practice
Mainstream Central
• Staying updated on external research
fish health team
• Assisting the OpCos on case-by-case basis
Functional team
Functional team • Global functional team
• Coordinate best practice and competence
Extensive fish health work in each OpCo
Extensive fish health • Monitoring fish health status
work in each OpCo • Preventive measures
• Responding to issues
• Operating procedures and policies
27
28. Current fish health status
MS Canada MS Norway
• IHN - depopulated two sites • Overall status is good
• Low sea lice levels • Mortality is low
• Winter Ulcers is reducing premium • Low sea lice levels
percentage • PD in Finnmark
• Algae and low Dissolved Oxygen
levels (DO)
MS Chile
• Increasing Caligus levels
• SRS creates problems
• Increased antibiotic use
28
29. Preventive measures per country
MS Canada MS Norway
• IHN: Screening, reduced handling • Stress reducing measures
and vaccination • Education and competence building
• Winter Ulcers: Vaccination, vitamin • Working on smolt sourcing
C trials and antibiotics trials
• Fungus: Improved handling and
water quality
• Algae and DO: Close monitoring and
preventive measures
MS Chile
• Harvesting trout before summer
• SRS vaccine trials
• Antiparasite treatments
• Extensive use of functional feed
29
30. Industry cost leveling out and increasing since 2005
VOLUME, PRICE AND COST IN SALMON FARMING
Source: Kontali
30
31. ”Sharpen Mainstream” – an improvement process in Mainstream
EXECUTION
Sharpen PROCESS
focus • Bottom-up process
• Generating support and enthusiasm
• Input to cost-reducing and performance-enhancing
measures from all levels in the OpCos
KEY TOPICS
• Competence
Sharpen • Biological performance
mindset • Competitive prices on supplies and services
• Re-thinking logistics and processes
Sharpen
position
31
32. Focus on developing operational excellence in Finnmark
2010 2011 2012e 2013e Learn to tackle the more challenging climatic
conditions
Smolt 5,5m 8,5m 7,4m 7,5m
Develop organization to handle volume-
Harvest 15kt 16kt 27kt 32kt doubling
Benchmark and stabilize operational
Growth 35 % 4% 70 % 20 %
performance
EX-CAGE COST PER KG FOR ALL HARVESTED SITES 2004G UNTIL TODAY (NOK)
NORDLAND FINNMARK
25 25
20 20
15 15 15
13 14
10 10
5 5
0 0
32
33. Agenda
Opening remarks
Introduction to Cermaq and strategic priorities
Mainstream - Long term cost optimization
EWOS - Focus on excellence
Mainstream - Chilean farming update
Closing remarks & preparing for site visits
33
34. Key topics
Salmonid fish feed is an enabler in feeding the world and
EWOS has an increasingly stronger position
Raw material sourcing is challenging, but EWOS has a
unique set-up in understanding and generating value from
raw material transformation
Large feed volumes with significant elements of seasonality is
logistically challenging – EWOS with new technology to
increase flexibility and capacity
34
35. Global aquaculture volumes will increase
FEEDING A GROWING POPULATION SUSTAINABLE AND EFFICIENT
Low resource usage
Efficient energy retention
35
36. Salmon feed is a relatively small part, but a front-
runner in the global aqua feed market
GLOBAL AQUA FEED MARKET (MILLION TONNES)
100% = 23 MILLION TONNES
Front-running the industry
• More industrialized than any
other aqua feed segment
• Consolidated from decades
Other with fierce competition in
Salmon
aqua 86% 14% innovation and operation
feed efficiency
feed
• High barriers to entry from
significant investments,
knowledge requirements and
distribution capacity
Source: EWOS
36
37. EWOS has strengthened its position through profitable growth
EWOS SALMONID FEED VOLUMES FINANCIAL PERFORMANCE
EWOS volume (1000 tonnes) EBIT-margin*
EWOS market share* ROCE
23.2%
CAGR:
15.9% 19.1%
1,227
1,081 15.1%
876
788
37%
35%
33%
6.9% 6.7%
6.1%
2009 2010 2011 2012E 2009 2010 2011
* In salmonids * Before unrealised fair value adjustments
37
38. Current capacity and competitive edge support strong entry barriers
EWOS “HARDWARE” – EWOS “SOFTWARE” –
CAPACITY IN PLACE BUILDING COMPETITIVE EDGE
Nutritional
excellence
1.5 million tonnes NOK 4.5 billion
Operational Logistical
excellence excellence
Economies of Market
scale orientation
Brand
leverage
Current Replacement
capacity cost
Building competitive edge through transformation of
Significant installed capacity in good shape, with an
commodity-like raw materials to customer oriented
assumed replacement cost of NOK 3 per kg
advanced nutrition solutions
38
39. Key topics
Salmonid fish feed is an enabler in feeding the world and
EWOS has an increasingly stronger position
Raw material sourcing is challenging, but EWOS has a
unique set-up in understanding and generating value from
raw material transformation
Large feed volumes with significant elements of seasonality is
logistically challenging – EWOS with new technology to
increase flexibility and capacity
39
40. Significant amounts of raw material pass through EWOS
EWOS RAW MATERIAL SOURCING VALUE
2011, USD million
Marine
409 34%
proteins
Oils 394 33%
Vegetable
229 19%
proteins Represents
Micro
more than one
57 million tonnes
ingredients
of raw material
Carbohydrates/
52
binders
Other 54
Total 1,195
40
41. High volatility and increased raw material prices
RAW MATERIAL MARKET PRICES, 2002-2012 (NOK PER KG CIF)
13,00
Fish Meal
12,00
Soy Protein Concentrate
11,00 Soy (non GMO)
10,00
9,00
8,00
7,00
6,00
5,00
4,00
3,00
2,00
1,00
0,00
jan.02
jan.03
jan.04
jan.05
jan.06
jan.07
jan.08
jan.09
jan.10
jan.11
jan.12
41
42. To meet these challenges, EWOS has organized a global
and specialized sourcing function
EWOS APPROACH TO RAW MATERIAL
SOURCING AND PURCHASING TEAM
SOURCING
Category management
Focus on category management
Global knowledge of the raw material markets
Leading raw material skill set
High commercial and biological competence
and knowledge
Understanding the drivers in the market
R&D knowledge base – EWOS Innovation
Develops operational tools for better selection
of optimal raw materials
Ensuring best raw materials and suppliers
42
43. EWOS’ knowledge enables significant cost avoidance on
raw material sourcing – improves competitive position
4.3% USD 1.2 BILLION
TOTAL COST AVOIDANCE GLOBAL RAW MATERIAL
NORWAY 2011 SOURCING VALUE 2011
Note: Cost avoidance is defined as EWOS price vs. spot price in the Norwegian market
43
44. Large variations in raw material availability and quality
FISH GROWTH WITH DIFFERENT FISH MEALS
Proportional fish growth for various fish meals
44
45. Controlling and optimizing raw material sourcing is
handled through EWOS Innovation
You cannot
make high
quality feed
from low
quality raw
materials!
45
46. EWOS Innovation with competence to evaluate
prospective raw material batches
PREDICTION CYCLE RAW MATERIALS
«Fm-tool»
predicts the
potential for
growth in
fish in any
selected
fish meal
sample –
before we
sign the
contract
46
47. Functional feed – only(?) way to influence fish in production
SEA PRODUCTION: 15-18 MONTHS
STOCKING
33.000 MEALS SERVED TO EACH FISH
HARVEST
1 BILLION SALMONIDS SWIMMING AROUND WITHOUT
“SUPERVISION OR INFLUENCE-POTENTIAL”
EWOS obvious strategic platform is to develop products that can influence the fish positively
through oral delivery
47
50. Key topics
Salmonid fish feed is an enabler in feeding the world and
EWOS has an increasingly stronger position
Raw material sourcing is challenging, but EWOS has a
unique set-up in understanding and generating value from
raw material transformation
Large feed volumes with significant elements of seasonality is
logistically challenging – EWOS with new technology to
increase flexibility and capacity
50
51. Distribution – some challenges
Feed volume in peak month
– Average volume x 2
– For large companies x 4.5
– Up to 100 tonnes/day
Delivery 1-3 times a week
Storage capacity varies from
50 to 600 tonnes
51
52. Distribution – increased capacity
• Maximizing what we already have
- Cabin Factor
- PIT – Stop
• A new Lemon
- Flexible trade (Blue Line)
- Not specialized
- Lower cost
- Two In – Two Out
52
53. Agenda
Opening remarks
Introduction to Cermaq and strategic priorities
Mainstream - Long term cost optimization
EWOS - Focus on excellence
Mainstream - Chilean farming update
Closing remarks & preparing for site visits
53
54. Introduction to Mainstream Chile
Harvest 2012e: 54,000 tonnes (rwe)
2,200 employees
63 sea water licenses in regions Los Lagos,
Aysén and Magallanes ( X, XI and XII)
Strong value-add processing capacity
Focus on performance Focus on margin
54
55. Four cornerstones of the Chilean operations
3 regions 3 species
On-shore Preventive
smolt fish health
55
56. Región de Magallanes (XII): Update on operations 3 regions
KEY HIGHLIGHTS AMBITIONS Pt o Montt
Stocking plan: Access to unutilized
2.2 mill Atlantics organic growth
smolt/year opportunities at
acceptable cost
Harvest volume: Ays én
- 3,000 t in 2013 Ensure risk
- Avg. 10,000 t from 2014 diversification
- Work in an isolated area
Employment: ~120 - Better sanitary Pto. Natales Pt a Arenas
people (direct/indirect) conditions 53° 10′ 1″ S, 70°
56′ 1″ W
Total investment
- USD 25 million
- Net investment reduced
with 36% tax benefit
Current status:
Fry grows according
to plans
56
57. 3 regions
Region XII: Status and experience so far
• First stocking was 28. December 2011
• Two full sea sites currently stocked with
Atlantics
• Lower than expected sea water
temperatures
• Low mortality
• Good growth
57
58. Strategy on species 3 species
Gross margin per specie
2,50
2,00
1,50
USD/ KG RWE
1,00
Atlantic
0,50 Coho
Trout
0,00
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
-0,50 YTD
-1,00
-1,50
• Disease resistance different between the three species,
specially ISAv & sealice
• Better usage of licenses considering the new regulations
• Ability to be present in different markets with different
products (USA, Japan, Russia, Brazil)
58
60. Coho price and margin development 3 species
COHO PRICES AND GROSS MARGIN 2001-2012 YTD
60
61. Challenging market outlook for the 2012/13 season 3 species
MONTHLY INVENTORY OF FROZEN SALMON IN JAPAN (TONNES) COMMENTS
120,000
High inventory of
110,000
frozen salmon
100,000
Typical annual Coho
90,000 consumption in
80,000
Japan: 90,000 tons
(HG)
70,000
Expected Chilean
60,000 Coho production in
50,000 2012/13: ~115,000
40,000
tons (HG)
Reduced catch of
30,000
Sockeye in Alaska,
20,000 97,000 tons vs.
10,000 113,000 tons in 2011
0 Reduced Sockeye
2005 2006 2007 2008 2009 2010 2011 2012 export to Japan
61
62. All Atlantic and Trout smolt are now on-shore On-shore smolt
PRODUCTION CYCLE PRODUCTION AND CAPACITIES (MILLION SMOLTS)
Mainstream Broodstock 18.3
100% in Fresh Water
1.8 Rio Pescado
2.0 Cipreces
Full individual screening
for all relevant diseases 12.8 3.0 Providencia
1.5
1.7
Mainstream eggs are sent 3.5 Confluencia
to six different MS
1.6
incubation facilities
3.0
Mainstream Atlantic and 4.0 Collin
Trout incubation/smolt
facilities are land-based
and 100% isolated 3.5
4.0 Trafun
The Mainstream on-shore
1.5
smolt cycle ensures high
quality smolt free of
diseases 2012 production Max production
62
63. Current sanitary status Preventive fish health
CHALLENGING SANITARY SITUATION MORTALITY (PERCENT IN INDUSTRY)
Coho
18
More challenging sanitary situation YTD Atlantic
15
2012 compared to 2010 and 2011 Trout
12
Increased mortality due to bacterial diseases
9
(SRS), hence increased usage of antibiotics
6
Increased sea lice level and anti parasite
3
treatment
Reduced effectiveness of anti parasite 0
jul- jan- jul- jan- jul- jan- jul- jan- jul-
treatments 08 09 09 10 10 11 11 12 12
USE OF ANTIBIOTICS (FULL-YR, GR/TONNES) CALIGUS (PARASITE PER FISH IN INDUSTRY)
800 Mainstream
Industry
600
400
200
0
2008 2009 2010 2011 2012 YTD
63
64. Mainstream’s fish health plan going forward Preventive fish health
SHORT TERM LONG TERM
Caligus Re-definition of capacities, species, time
Develop a system for closed treatment of stocking of Neighborhoods / Areas /
Sites
(Best) alternation of available treatment
To be based on analysis of historical data
products
Identify connections between diseases/
Use of functional feed areas/sites neighbors and confirm those
Test of vaccine with statistical facts
Test of skirts around cages
Stop SRS - project
SRS & IPN
Use of oral vaccine across the sites
Continue use of functional feed against
SRS and implemented across the sites as
policy
Use of Boost post transfer to sea
64
65. Preventive fish health
Update on regulatory framework in Chile
Establishment of “macrozones”
New concessions suspended in X and XI regions
Sites with > 9 avg. total adult parasites is declared as “High
Infestation Sites”
No more than 3 events in a six weeks period
Non compliance => mandatory harvest
Sanitary fallowing program, January 2012
- Extended to 2016
Health management and biosecurity regulation required to loading ports and unloading ports (Resolution
302), February 16th, 2012
- Estab lish b iosecurity measures. Ob ligatory from March, 2013
Certification and other health requirements for import of aquatic species (Decree 72), March 24th, 2012
- Risk analysis required b efore import eggs from other countries
- Chilean authority has to approve sanitary certification issued b y origin country
Changes to the Fisheries Act (Decree 430), April 2nd , 2012
- Estab lish “macrozones”
- New concessions suspended in X and XI regions
- Estab lish new penalty and and license rental payments
Caligus (Resolution 1141), May 29th , 2012
- Ob ligatory closed system will not b e b efore than May, 2013
- Sites with > 9 Average total adult parasites, it is declared, “High Infestation Site”: No more than 3 events in a six
weeks period (non compliance => mandatory harvest)
Mortalities handling and sorting (Resolution 1468), July 28th, 2012
- Ob ligatory classification (twice a week)
- Daily removal of mortalities
- Necropsy (twice a week) 65
66. Summary of focus in the Chilean operations
3 REGIONS Controlled growth in Region XII
Diversifying biological and market risk by maintaining three
3 SPECIES
species
ON-SHORE
FRESH
Broodstock, trout and Atlantic smolt production moved on shore
WATER
OPERATIONS
PREVENTIVE Structured approach to fish health with both short-term and
FISH HEALTH long-term strategies
66
67. Agenda
Opening remarks
Introduction to Cermaq and strategic priorities
Mainstream - Long term cost optimization
EWOS - Focus on excellence
Mainstream - Chilean farming update
Closing remarks & preparing for site visits
67
68. Closing remarks
A walk to the boat (follow the guides)
Boat trip to the facilities
Further info to be provided on the boat
Presentation of Mainstream Norway
Q&A from the presentations
Touring the facilities
And then safely to the airport
68
70. Agenda – Capital Markets Day 2012 – Part II
Presentation Mainstream Norway
Site visit – Oksøy sea farm
Site visit – Dyping Hatchery
70
71. Overview Mainstream Norway
• 44 licenses in operation
• Estimated 2012-harvest: 52kt
• Growth 32%
• Licenses fully utilized in Nordland and fully
utilized in Finnmark from August 2012
• Main markets are Russia and EU
2011
Harvest volume 38
Turnover 1.120
EBIT 217
Growth (%) 3%
71
72. Nordland – complete aquaculture production
Broodstock/eggs Hatchery On growing Processing
Nordnorsk Stamfisk AS
- JV with Aqua Gen, Nordlaks and Nova Sea
- Secure local production and supply of roe
Three hatcheries in Nordland, covering 50 %
of stocking requirements
New hatchery in Steigen under planning to
boost own smolt production by 8.4 mill
17 licenses in Northern Nordland
Two processing plants: Skutvik and Alsvåg
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73. Main advantages in Nordland – Geography
Deep fjords with unique sites
Limited number of neighbors
makes long term biosecurity and
sea lice strategy easier to
implement
Opportunity to develop new
production cluster in Ofoten
(Narvik) with Ballangen Sjøfarm
(2 licenses)
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74. Practicing risk adjusted cost leadership in Nordland
Not the most aggressive when it
comes to short term cost leadership
Pay a risk premium in some cost elements
Avoid mixing well boats
Conservative when it comes to
equipment and size
- Larges cages limited to 120m in diameter
- Still use feed automats at some sites
- Feeding is done at the cage
- Largest site is 5,400 tonnes MAB
Some biological statistics
- Not used antibiotics since 1992
- Sea lice treatment cost was NOK 0.20
per kg (lwe) last generation
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75. Main advantages in Nordland – People
Mainstreams leading principle:
Operational decisions to be decided
as close to the cage as possible
Good site managers is the key to
ensure operational success
83 % of employees have Craft
Certificate
Annual courses at the University of
Nordland for site managers to
improve competence and update
skills
Extensive internal and external
benchmarking
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76. MSN Nordland – the best farming region in Norway?
MAB UTILIZATION* FOR NORWEGIAN FARMERS, 2011
0 200 400 600 800 1,000 1,200 1,400
MSN Nordland
Average sample
MS Norway
*Tonnes produced per normal license
Source: Kontali
M SN NORDLAND WITH THE BEST M AB-UTILIZATION IN 2011
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77. MSN Nordland with low mortality
DEVELOPMENT IN MORTALITY (PERCENT)
Industry average
MSN NL
16%
15%
14%
Focus on preventive fish
health and reduced stress in
smolt production and during
stocking has given results
8%
Decreased mortality in
Mainstream
5%
4% Significant improvement of
production parameters
Reduction of fixed costs
10G 11G Est. 12G
Source: University of Nordland
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78. Large potential for future growth in Nordland
Northern Nordland with significant
potential for future growth
Strong biological results
- No disease issues
- Low levels of sea lice
Available areas
- Opportunity to expand within existing sites
- New areas are available
Economy of scale for well boat and
processing will secure cost optimization
…but new licenses are needed
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79. Agenda – Capital Markets Day 2012 – Part II
Presentation Mainstream Norway
Site visit – Oksøy sea farm
Site visit – Dyping Hatchery
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80. Oksøy Sea Site
• The first smolt was stocked in 1992
• 1,000 tons harvested in 1994
• Maximum allowed biomass 5,400 tons
• Total production approx. 6,000 tons lwe
• Stocking of 1.2 mill. smolt every second year
• One site manager and 5 staff
• The fallow period is 12 months at this site
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81. FarmBase 500
• The FarmBase 500 is a feed barge
constructed and delivered by Marine
Construction
• Central feeding system which feeds 12 cages
at the same time
• 380 tons silo capacity
• When the site is at peak biomass, we feed 50
tons per day
• 4 Cabins with separate bathroom
• Sauna and fitness room
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82. Testing of Polarcirkel EcoNet
• High durability and escape prevention
• This long-life net technology used to make
over 4,000 fish farming nets in Japan the
last 20 years
• Also eliminates the use of antifouling paints
and ongoing net changes
• Easily recyclable
• Technical data;
- PolarCirkel 400 mm -120m.
- EcoNet:
- Depth of cylinder 17.4 m
- Depth of bottom 9.6 m
- Circumference of net 118.8 m.
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83. Dønnland – Well Boat
• Next generation wellboat which will be put in operation late September 2012
• 1,500 m³ capacity and state of the art technology
• First type of well boat that fulfills the requirements in the new regulation
currently on hearing and supposed to come into force in 2017
• Full recirculation of water
• Sea Lice filter both on intake and outlet of water
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84. Agenda – Capital Markets Day 2012 – Part II
Presentation Mainstream Norway
Site visit – Oksøy sea farm
Site visit – Dyping Hatchery
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85. Mainstream Norway – Dyping Hatchery
• Annual production of 2.5 mill. smolt
split 50/50 between S1 and S0
• Dyping was amongst the first
hatcheries in Norway with an electric
generator installed to produce
electricity from the water intake
• The generator cover 80 % of the
needed electricity of the production
• Uses sea water during winter time to
enhance growth
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86. Grading and vaccination
• Grading of the fish is essential in
order to have fish with equal
performance and good growth
• We also vaccinate all the fish
manually before transfer to sea
• In one day 130,000 fish are
vaccinated
• Laboratory and quality control are
crucial to secure good performance
and smolt quality
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87. Growth hall
• In this hall we have 100 % control of
temperature to maximize the growth of
the fish
• Four tanks of 190 m3 volume and
maximum biomass of 30 tons of fish
• The water temperature never exceeds
14°C because too strong growth
increase the risk of deformities
• 4,500 l/min of warm water
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88. Outdoor area
• The outdoor area consists of 10 tanks
which uses natural tempered water
• In the winter time sea water may be
used to boost growth on the smolt
before transfer to the sea sites
• The seawater is pumped up from 100
meter deep and the temperature is
approx. 7°C year around
• The seawater pump station has a
capacity of 30,000 l/min
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