Henrik Heiberg, head of IR and treasury in Marine Harvest details MHGs aquaculture, processing and now also feed production is moving into the future.

1. Marine Harvest
Havbrukskonferansen
Oslo 28 November 2013

2. Implied protein consumption driven by population
growth only
Assumption: Constant consumption of protein per capita
Sources:
FAO (2009); FAOstat Food Balance Sheets,
United Nations population data; World Population Prospects: the 2012 Revision

3. Farmed Atlantic salmon relatively small
Atlantic
salmon
Sources: OECD-FAO Agricultural Outlook 2013
Kontali Analyse
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4. Large opportunities within aquaculture species
Source: Kontali Analyse
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5. Examples of protein co’s and area of potential
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6. A unique nutritional package
Proteins:
High quality,
easy digestable
proteins
Omega-3:
High content of
Omega-3 fatty
acids
Vitamins:
Rich in A, D og
B12 vitamins
Mineral:
High content of
iodine & selen,
taurin og
sterols
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7. Farmed salmon - Highly efficient use of resources
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8. Value CAGR of 8% - Volume CAGR of 6%
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9. Historic price–volume relationship
 Both 2012 and 2013 clear outliers compared to historical relationship
Source: Kontali Analyse
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10. 2014 growth expected between -1% and 5%

Growth in 2015 also expected to be moderate
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11. Tough biological conditions in Chile….

Weighted average EBIT/kg for selected listed companies in Chile and Rest of World
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12. …leads to strong cost increases…

Weighted average EBIT/kg for selected listed companies in Chile
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13. …and declining yields per smolt for the industry


Cannot rule out unprofitable operations next few years
Slight decline in industry volumes expected in 2014
Source: Sernapesca
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14. MHG – Sea lice treatments per site in operation
in Chile
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15. Expectations for new Norwegian government

Initial signals implies more liberal licensing regime


Introduction of average Maximum Allowed Biomass constraints
Assessment of current licensing system in general

This may lead to increased biological risk and reduced sustainability

Marine Harvest perceives this as a threat due to the industry’s dependency
of a well regulated and sustainable framework

Marine Harvest’s recommendation:





Continuation of current system with maximum allowed biomass
Predictable annual capacity increase of 3-5% for ten years if deemed sustainable
Aquaculture Stewardship Council (ASC) certification should be encouraged
Establishment of Aquaculture Directorate to secure uniform approach
Proceeds from increased capacity directed to host communities
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16. MHG – Leading position across the value chain
Marine Harvest business areas
Feed
New
Farming
#1
Sales/VAP
#1
Position:
220 thousand tonnes vs.
global production of ~2.6m
405 thousand tonnes vs.
global production of c.1.85m
(22%)
Global sales network
Leading position in VAP
Focus areas:
Successful construction
and implementation by
July 2014
Acquisitive growth in
Norway and Chile
Integration of Morpol
Restructuring programme in VAP
Organic growth in VAP
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17. Fish feed project proceeding according to plan
 220 thousand tonnes capacity – 60% of MHG requirement in Norway
 ~NOK 800m investment - Completion July 2014
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18. Marine Harvest farming regions
Norway
Region North
Volume: 62 000
Faroe Islands
Volume: 9 000
Canada
Volume: 28 000
Norway
Region Mid
Volume: 59 000
Scotland
Volume: 50 000
Norway
Region West
Volume: 77 000
Ireland
Volume: 8 000
Norway
Region South
Volume: 56 000
Chile
Volume: 56 000
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19. MHG – Volume recovery from drop in 2013
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20. Marine Harvest sales & marketing structure
America, Sales &
Marketing:
Europe, Sales &
Marketing:
•
•
•
•
•
•
VAP Processing: 13,400MT
finished product, turnover
1,0BN NOK
VAP Processing: USA & Chile
Sales to retail, food service
and industry
485FTE
Sales Office in: Miami, LA and
Puerto Montt (Chile)
•
•
•
•
Note: Figures in Europe excluding Morpol
VAP Processing: 60,000MT
finished product, turnover
4,5BN NOK (VAP)
VAP Production: France,
Belgium, Holland, Poland,
Czech Rep
2500FTE
Sales to retail, food service
and industry
Sales office: France, Belgium,
Spain, Italy, Czech Rep,
Norway, Scotland and Ireland
Asia, Sales & Marketing:
•
•
•
•
Sales 1,1BN NOK. 25,000MT
finished products
VAP Processing: Tokyo &
Shanghai
115FTE
Sales Office in: Japan, China,
Korea, Taiwan, Thailand and
Singapore
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21. Morpol – Competition clearance obtained
 Major step in becoming a leading integrated protein player
 The leading secondary processing entity in Europe
 Complementary market position to Marine Harvest
 ~30 thousand tonnes HOG farming assets
 ~18 thousand tonnes in Orkneys and Shetland to be divested
 ~12 thousand tonnes to be integrated Norway and Scotland


Location in Northern Norway where MHG is not currently present
Well positioned for further licences in this region in 2013 licencing round
 About 4,000 employees
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22. Outlook
 Strong market poses attractive 2014 net cash flow opportunity
 Forward prices of NOK 38 per kg in 2014 and 35 in 2015
 Significantly reduced level of investment
 Strategic focus areas
 Successful development of green-field feed capacity
 Acquisitions in Norway and Chile
 Integration of Morpol
 Expected impact from the higher than normal investments in 2013
 65 000 tonnes increase in 2014 harvest volumes
 Significant feed capacity in Norway from 2H 2014
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