Multiexport Foods 2018, current situation and outlook Santiago, January 24 th, 2019
Agenda I. Highlights II. Financial & Operational Indicators 2018 III. Outlook
Highlights Total harvest of 82 Th. WFE Tons; 72 Th. Atlantic Salmon tons and 10 Th. of Coho Salmon First Atlantic Salmon exporter and third Chilean exporter for all species Operational result of Q4 explained by good production performance and low production costs compared to the previous quarters X Region harvest, with ex-farm cost under USD 2.9 in Q4 Good performance of Coho Season 2018-2019 XII Region stocking progress according to plan (1.8 million Smolts in 2018) MOU agreement to build and operate a processing plant in Punta Arenas -XII Region- (BLUMAR and MULTIEXPORT) Accumulated EBITDA fulfillment for the period 2016 to 2018 for Earn-Out payment related to 20115 Mitsui capital increase.
Agenda I. Highlights II. Financial & Operational Indicators 2018 III. Outlook
Financial Highlights Solvency and shares rating maintain a positive trend by both risk rating agencies: Fitch ( 2018): Solvency BBB- (from BB+) Shares: 1 st class level 3 (from 1 st class level 4) Humphreys (Apr 2018): Improves trend from "stable to favorable, maintaining rating on Solvency (BBB) and Shares (1 st class level 2) Net Leverage< 0,5x Current ratio > 4x Net financial debt : USD 28,5 millions EBITDA Goal 2016-2018 (USD 234 mill) over fulfilled: Earn Out of USD 24,4 mill. Source: Multiexport Foods 5
Jan Apr Aug Jan Apr Aug Jan Apr Aug Earn-Out for the Mitsui capital increase of 2015 375 Earn-Out Determination (Accumulated EBITDA 2016-2018) 325 275 225 175 125 75 25 2016 2017 2018 USD 24,4 mill USD 0-25 2016 2017 2018 Ebitda Accumulated Acumulado EBITDA Max Min Additional value for Mitsui's Shares, based on Accumulated EBITDA for the period 2016 to 2018: Linear from 0 to USD 24.4 mill in the EBITDA range between USD 148.2 mill and USD 234.1 mill. 6
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Main Operational Indicators Main Indicators 4T18* 4T17 Var. Var. % 2018* Jan - 2017 Jan Var. % Harvest (WFE Ton)* 28.385 26.035 2.351 9% 81.839 75.657 8% Atlantic Salmon 18.997 17.049 1.949 11% 71.656 65.272 10% Coho Salmon 9.388 8.986 402 4% 10.182 10.385-2% Average weight (WFE Kg) Atlantic Salmon 4,77 5,21-0,44-8% 4,83 4,89-1% Coho Salmon 3,47 2,99 0,48 16% 3,43 2,96 16% Ex-Farm Cost (USD/WFE kg) 3,30 3,13 0,17 5% 3,53 3,35 5% Atlantic Salmon 3,45 3,18 0,26 8% 3,60 3,42 5% Coho Salmon 3,02 3,05-0,03-1% 3,02 2,89 4% Sales (WFE Ton) 29.283 24.999 4.284 17% 82.850 75.255 10% Atlantic Salmon 19.272 17.113 2.159 13% 71.058 64.741 10% Coho Salmon 10.011 7.887 2.125 27% 11.792 10.514 12% Atlantic Salmon Harvest (WFE Tons) 20.000 15.000 10.000 Stability in Atlantic Salmon production and supply 5.000 0 * preliminary figures 2016 2017 2018 7
Chilean supply as of -2018 Th. USD FOB Atlantic Salmon Exports Jan- 2018 #1 68% Smoked Salmon exports from Chile Company Atlantic Trout Coho Total % Exp. Mitsubishi / Cermaq 333.729 129.734 17.251 480.714 10% Aquachile 284.972 78.408 89.187 452.567 10% Multiexport Foods 339.640 40.637 9.924 390.200 8% ine Harvest 326.743 326.743 7% Salmones Camanchaca 295.952 295.952 6% Australis 237.616 3.513 39.275 280.404 6% Blumar 267.673 2.832 270.505 6% Los Fiordos 223.663 43.620 18 267.301 6% Salmones Austral 157.928 58.133 216.061 5% Invermar 168.259 14.490 137 182.887 4% Others 926.608 329.403 240.476 1.496.487 32% Total 3.562.783 700.771 396.268 4.659.821 100% Multiexport Foods Mitsubishi / Cermaq Puerto de Humos Smoked products Serie 1exporters South Wind Pure Nature Others 3.759 3.258 1.160 7.097 2.870 (12 companies) 39.282 Source: Infotrade 8
USD/LB FOB MIAMI Atlantic Salmon Prices US ket 6,50 6,00 ATLANTIC SALMON PRICE: UB TRIM D 3-4 LBS 6,24 5,95 Year Price usd/lb Var. % Previous year 2017 5,48 +5,5% 2018 5,38-1,9% 5,50 5,23 5,89 5,27 5,12 5,00 5,18 5,00 4,80 4,50 4,00 3,50 3,00 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Jan Apr Aug Spread 10y Avg 10y 2017 2018 2019 Price Q4-2018: 5,12 USD/lb (Q4-2017: 4,80 USD/lb) +6,6% Source : Urner Barry 9
JPY/KG FOB JAPÓN Coho Prices Japanese ket COHO PRICES: PREMIUM FROZEN HG 4-6 1.000 900 800 844 865 853 853 805 700 776 785 800 600 500 400 300 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Jan Apr Aug Spread 10y Avg 10y 2017 2018 Q4-18 Price Q4-2019: 805 JPY/kg (Q4-2017: 800) +0,6% Source: FIS 10
EBIT USD/kg WFE UB USD/lb Atlantic Salmon operational margin EBIT pre-ifrs (USD/kg WFE) 2016 2017 2018 Q4-2018 2,50 2,00 2,21 2,09 7,5 6,0 Lower sale prices compared to Q3-18 and to the average of 2017 1,50 1,00 0,50 0,85 1,40 1,31 0,95 1,53 0,91 4,5 3,0 1,5 Higher unitary Ebit influenced by lower production costs compared to Q3-18 and 9M-18 0,00 FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4E 2016 2017 2018 0,0 Atlantic Salmon Ebit (USD/kg WFE) UB TD 3-4 lb Reference Price Annual Avg. Unitary EBIT (USD/kg WFE) Source: Multiexport Foods 11
Th. Ton WFE USD/kg WFE Coho Season No inventories in Japan at the start of the season High prices in Japan, about 800 JPY/kg for the HG 4-6 Premium Good productive performance 2017 2018 ICA antibiotic free antibiotic free Yield 2,81 3,24 Average weight (WFE Kg) 2,96 3,43 More than 10k harvest Harvested Ton and Ex-Farm Costs 12,0 3,5 10,0 8,0 6,0 4,0 2,0 6,5 6,0 6,6 10,4 10,2 3,0 2,5 2,0 1,5 1,0 0,5-0,0 Harvest Volume (WFE Ton) Ebit/kg Season Ex - Farm Cost Source: Multiexport Foods 12
Fuente: Multiexport Foods OPERATIONAL PERFORMANCE
Operational performance Atlantic Salmon Atlantic Salmon Yield (kg WFE/smolt) Multiexport vs. Chilean Industry 6,0 5,5 5,0 4,5 4,0 3,5 3,51 4,03 4,23 4,26 4,54 4,63* 4,47 4,40 3,0 2,5 2,0 2013 Ind. 2014 Ind. 2015 Ind. 2017 Ind. 2018 Ind. 2016 MEF 2017 MEF 2018 MEF 25% Atlantic Salmon Accum. Mortality (%) Multiexport vs. Chilean Industry Atlantic Salmon Harvest Weight (WFE Kg) Multiexport vs. Chilean industry 20% 15% 10% 19% 17% 14% 13% 13% 10%** 7%* 7% 3,5% 6,0 5,0 4,0 3,0 2,0 Industry 5% 1,0 MEF 0% 2013 Ind. 2014 Ind. 2015 Ind. 2017 Ind. 2018 Ind. 2016 MEF 2017 MEF 2018 MEF 0,0 2016 2017 2018 * Algae Bloom affected sites are not considered Source: Aquabench / Multiexport Foods 14
Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Jan Apr Aug Monthly mortality rates by specie 4,00% 3,50% 3,00% 2,50% 2,00% 1,50% 1,00% 0,50% 0,00% Atlantic Salmon (%) MEF 0,3% 4,00% 3,50% 3,00% 2,50% 2,00% 1,50% 1,00% 0,50% 0,00% Trout (%) 4,00% 3,50% 3,00% 2,50% 2,00% 2015 2016 2017 2018 Coho Salmon (%) 2015 2016 2017 2018 Since e 2015 the company doesn t produce trout 1,50% 1,00% 0,50% 0,00% MEF 0,4% 2015 2016 2017 2018 Source: Aquabench / Multiexport Foods 15
USD/kg WFE Ex Farm Cost Evolution Atlantic Salmon Multiexport Foods Ex-Farm Costs (USD/WFE Kg) 5,00 4,00 3,00 2,00 +4% -9% Cost recovery in Q4-6% Ex-Farm vs 9M-18-9% Ex-Farm vs Q3-18 1,00 0,00 2013 2014 2015 2016 2017 2018 Q3-18 Q4-18 Source: Multiexport Foods 16
USD/kg WFE Ex Farm Costs Atlantic Salmon Multiexport Foods Ex-Farm Costs (USD/WFE Kg) 5,00 4,00 +4% -9% 2,70 3,30 USD/kg WFE 3,00 2,00 1,00 0,00 2013 2014 2015 2016 2017 2018 Q3-18 Q4-18 3,00 3,50 USD/kg WFE Multiexport s production by region: X + XI continental [30%-50%] XI insular [50% - 70%] 3,10 3,60 USD/kg WFE 17
Agenda I. Highlights II. Financial & Operational Indicators 2018 III. Outlook
Biomass and stocking - Norway Smolt Stocking Norway Million smolts + 11% last 12 month Source: ABG Sundal Collier 19
Stocking - Chile Atlantic Salmon Millones de smolts Millones de smolts Ene Abr Ago Dic Ene Abr Ago Dic Millones de smolts 18 16 14 Atlantic Salmon Stocking 2017-2018 12,0 avg 2017 12,4 avg 2018 14 12 Atlantic Salmon average monthly Stocking Period January - ember (12 Months) 12 10 8 6 4 2 0 10 8 6 4 2 0 12,0 11,1 11,1 12,0 12,4 2014 2015 2016 2017 2018 Last 3 Years Atlantic Salmon Stocking 18 16 14 12 10 8 6 4 2 0 Ene Abr Ago Dic 2016 2017 2018 Source: Aquabench / Multiexport Foods 2017 2018 Stocking Levels: +3,5% stocking last 12 months +5% stocking jul-dec 2018 vs jul-dec 2017 +3% stoking jul-dec 2018 vs jul-dec 2016 Sea Water Biomass: +5,1% in live fish numbers -18 vs -17 +2,5% in live fish numbers > 2,5 kg -18 vs -17 20
Mid-term Outlook Average harvest weights Chile: Harvest weights (salmon) Norway: Harvest weights (salmon) 5.2 2017: 4.95 kg wfe 2018: 5.24 kg wfe Fuente: ABG Sundal Collier 21
Harvest Projection Atlantic salmon Atlantic Salmon Th. WFE Ton 2012 2013 2014 2015 2016 2017 2018E 2019E Norway 1.183 1.144 1.194 1.230 1.170 1.211 1.246 1.276 Chile 364 473 596 612 521 587 680 698 Others 447 428 445 490 485 517 494 545 Total 1.994 2.045 2.235 2.332 2.176 2.315 2.420 2.519 Growth 2012 2013 2014 2015 2016 2017 2018E 2019E Norway 18% -3% 4% 3% -5% 4% 3% 2% Chile 65% 30% 26% 3% -15% 13% 16% 3% Others 10% -4% 4% 10% -1% 7% -4% 10% Total 22% 3% 9% 4% -7% 6% 5% 4% Source: ABG Sundal Collier / Multiexport Foods 22
Global Atlantic Salmon Production (2017 & 2018E) Th. Ton 1.500 1.300 1.100 900 700 500 300 100-100 800 700 600 500 400 300 200 100 0 Europe 3% 0% 10% -1% 0% 0% 4% 4% 372 363 405 453 372 379 420 497 291 282 321 352 285 286 322 383 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018E 2019E Norway UK Faroes Others Q-o-Q Growth (%) - Previous Year America 30% 15% 11% 3% 7% 7% 1% -3% 207 191 205 224 210 205 219 217 176 152 168 184 173 168 180 177 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018E 2019E Chile Canada Q-o-Q Growth (%) - Previous Year Growth (%) 20% 0% -20% -40% -60% -80% -100% 40% 20% 0% -20% -40% -60% -80% -100% Source: ABGSC, MEF 23
Demand Source: ABGSC, MEF 24
Price outlook Atlantic salmon Forward Prices (NOK/Kg) Avg 2018 ~5,50 USD/lb Source: ABG Sundal Collier, Carnegie 25
Fuente: Multiexport Foods MULTIEXPORT FOODS OUTLOOK
Multiexport Foods stocking and harvest 2016-2020 Smolt Stocking Th. Smolts 2016 2017 2018E 2019E Atlantic Salmon (X+XI) 16,028 16,410 17,372 18,300 Atlantic Salmon (XII) - - 1,800 1,800 Coho Salmon 2,208 3,700 3,147 2,900 Total 18,235 20,110 23,319 23,000 Harvest WFE Tons 2016 2017 2018* Q1-2019E Q2-2019E H2-2019E FY-2019E 2020E Atlantic Salmon (X+XI) 54.284 65.272 71.656 18.000 21.000 43.000 82.000 73.000 Atlantic Salmon (XII) - - - - - - - 17.000 Coho Salmon 6.603 10.385 10.182 - - 8.000 8.000 7.000 Total 60.887 75.657 81.839 18.000 21.000 51.000 90.000 97.000 27
Multiexport Foods XII Region Project Puerto Natales The operation was started in the XII Region, which would allow to expand production between 15 and 20 thousand WFE Ton per year, in a gradual period of 4 years. The stocking began in Q4-18 successfully. Punta Arenas 3 sites (3.6 million smolts) in the period Q4/18 - Q1/19, with an associated capex of USD 20 million. First harvest: Q1/20 Puerto Williams 28
Process Plant in Magallanes Puerto Natales MOU with Blumar for processing plant in the Magallanes Region, in the industrial place of Punta Arenas. Punta Arenas Process on review and pending to government regulatory authorizations. Capex: USD 40 million. Puerto Williams Balanced capacity with the production programs of both companies. 29
Thanks