Company Presentation July 2021
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STRICTLY PRIVATE AND CONFIDENTIAL GIGANTE SALMON COMPANY PRESENTATION JULY 2021 Private and Confidential STRICTLY PRIVATE AND CONFIDENTIAL CONTENTS 1. INTRODUCTION 2. MARKET OVERVIEW 3. PROJECT OVERVIEW 4. FINANCIAL INFORMATION 5. RISK FACTORS Important information and disclaimer THIS DOCUMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR PROJECTIONS OF THE COMPANY OR ASSUMPTIONS BASED ON INFORMATION IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AVAILABLE TO THE COMPANY. SUCH FORWARD-LOOKING INFORMATION AND AMERICA, AUSTRALIA, CANADA, JAPAN, HONG KONG OR SOUTH AFRICA OR TO ANY STATEMENTS ARE SOLELY OPINIONS AND FORECASTS WHICH REFLECT CURRENT RESIDENT THEREOF OR ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION IS VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS, UNCERTAINTIES UNLAWFUL. THIS DOCUMENT IS NOT AN OFFER OR AN INVITATION TO BUY OR SELL AND ASSUMPTIONS. NONE OF THE COMPANY OR ANY OF ITS REPRESENTATIVES SECURITIES. PROVIDES ANY ASSURANCE THAT THE ASSUMPTIONS UNDERLYING SUCH FORWARD- LOOKING STATEMENTS ARE FREE FROM ERRORS, NOR DO ANY OF THEM ACCEPT ANY ABOUT THIS PRESENTATION RESPONSIBILITY FOR THE FUTURE ACCURACY OF THE OPINIONS EXPRESSED IN THIS PRESENTATION. THIS PRESENTATION (THE “PRESENTATION") HAS BEEN PRODUCED BY GIGANTE SALMON AS (“GIGANTE SALMON” OR THE “COMPANY”) FOR INFORMATION PURPOSES ONLY AND DOES NOT IN ITSELF CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF NO REPRESENTATION OR WARRANTY AN OFFER TO BUY ANY FINANCIAL INSTRUMENTS. BY ATTENDING A MEETING WHERE THIS PRESENTATION IS PRESENTED, OR BY READING THIS PRESENTATION, YOU (THE THE INFORMATION CONTAINED IN THIS PRESENTATION IS FURNISHED BY THE COMPANY “RECIPIENT”) AGREE TO BE BOUND BY THE FOLLOWING TERMS, CONDITIONS AND AND HAS NOT BEEN INDEPENDENTLY VERIFIED. NO REPRESENTATION OR WARRANTY LIMITATIONS. (EXPRESS OR IMPLIED) IS MADE AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION CONTAINED HEREIN. NONE OF THE COMPANY, ANY REPRESENTATIVE NEITHER THE DELIVERY OF THIS PRESENTATION NOR ANY FURTHER DISCUSSIONS WITH ACTING ON BEHALF OF THE COMPANY, OR ANY OF ITS RESPECTIVE PARENT OR THE RECIPIENT OR ANY OTHER PERSON SHALL, UNDER ANY CIRCUMSTANCES, CREATE SUBSIDIARY UNDERTAKINGS OR ANY SUCH PERSON’S DIRECTORS, OFFICERS, ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE EMPLOYEES, ADVISORS OR REPRESENTATIVES (COLLECTIVELY THE COMPANY SINCE THE DATE OF THIS PRESENTATION. THE COMPANY DOES NOT “REPRESENTATIVES”) SHALL HAVE ANY LIABILITY WHATSOEVER ARISING DIRECTLY OR UNDERTAKE ANY OBLIGATION TO REVIEW OR CONFIRM, OR TO RELEASE PUBLICLY OR INDIRECTLY FROM THE USE OF THIS PRESENTATION OR OTHERWISE ARISING IN OTHERWISE TO THE RECIPIENT OR ANY OTHER PERSON, ANY REVISIONS TO THE CONNECTION THEREWITH, INCLUDING BUT NOT LIMITED TO ANY LIABILITY FOR ERRORS, INFORMATION CONTAINED IN THIS PRESENTATION TO REFLECT EVENTS THAT OCCUR INACCURACIES, OMISSIONS OR MISLEADING STATEMENTS IN THIS PRESENTATION. THE OR CIRCUMSTANCES THAT ARISE AFTER THE DATE OF THIS PRESENTATION. THE RECIPIENT ACKNOWLEDGES THAT IT WILL BE SOLELY RESPONSIBLE FOR ITS OWN COMPANY DOES NOT INTEND TO UPDATE THE INFORMATION AFTER ITS DISTRIBUTION, ASSESSMENT OF THE COMPANY’S BUSINESS AND THE MARKET, THE MARKET POSITION EVEN IN THE EVENT THE INFORMATION BECOMES MATERIALLY INACCURATE. AND CREDIT WORTHINESS OF THE COMPANY. THE RECIPIENT WILL BE REQUIRED TO CONDUCT ITS OWN ANALYSIS AND ACCEPTS THAT IT WILL BE SOLELY RESPONSIBLE FORWARD LOOKING INFORMATION AND STATEMENTS FOR FORMING ITS OWN VIEW OF THE POTENTIAL FUTURE PERFORMANCE OF THE COMPANY, ITS BUSINESS AND THE SHARES. THE CONTENT OF THIS PRESENTATION IS THIS PRESENTATION INCLUDES AND IS BASED ON, AMONG OTHER THINGS, FORWARD- NOT TO BE CONSTRUED AS LEGAL, CREDIT, BUSINESS, INVESTMENT OR TAX ADVICE. LOOKING INFORMATION AND STATEMENTS. SUCH FORWARD-LOOKING INFORMATION THE RECIPIENT SHOULD CONSULT WITH ITS OWN LEGAL, CREDIT, BUSINESS, AND STATEMENTS ARE BASED ON THE CURRENT EXPECTATIONS, ESTIMATES AND INVESTMENT AND TAX ADVISERS AS TO LEGAL, CREDIT, BUSINESS, INVESTMENT AND TAX ADVICE. 3 01 INTRODUCTION 01 Introduction Current progress and milestones ✓ The Ministry of Fisheries ✓ Entered into a lease ✓ Plan and impact ✓ Rødøy approves final ✓ The Norwegian Food repealed the requirement agreement with an option assessment together with zoning plan for industry, Safety Authority gives its for a license for land- to purchase Indre Lille Rødøy municipality land based aquaculture. permit for a production of based aquaculture Rosøya in Rødøy started. 20,000 tons of salmon, facilities in Norway. municipality. ✓ Plan approved by Rødøy with 13,731 tons MAB. ✓ Gigante Havbruk AS by end of the year. For the first 24 months, («Gigante Havbruk») the license is limited to started the planning to 3,600 tons MAB. realise a land based ✓ Discharge permit aquaculture facility. granted. ✓ Final aquaculture license approved. ✓ Equity capital raise MNOK 65 2016 2017 2018 2019 2020 5 01 Introduction At a glance Gigante Salmon… …a part of the Gigante Havbruk group ▪ Gigante Salmon is a part of the Gigante Havbruk group, which is a major player in the Norwegian aqua culture industry. ▪ Gigante Salmon will employ the management team and lead the project. In addition to the shares of Gigante Salmon Rødøy AS, the company owns a second island that has been acquired for future Revenue1: 603 NOKm EBIT1: 170 NOKm development of a potential second production site. ▪ Construction on Lille Indre Rosøya is scheduled to start in the second half of 2021 and planned production start is in 2023. ▪ The planned facility will consist of three pools with a total production capacity of approx. 16,000 tons. FTE: 63 Production: 10,000 tons Projected harvest volumes HOG (tons) Favorable location on the Helgeland coast 16,000 7,000 5,000 900 2024 2025 2026 2027 1 Annual accounts 2019 6 01 Introduction Investment highlights 1 ▪ Main owner and project initiator with extensive experience in the Norwegian aquaculture industry. EXPERIENCE ▪ Gigante Havbruk group has 30 years of experience of successful salmon farming. ▪ The group is present in the whole value chain from broodstock to export and Gigante Salmon will have access to necessary know-how. 2 ▪ The design of the production site and processes builds on technology proven in conventional sea-based aquaculture. TECHNOLOGY ▪ The concept has been dilligently designed to minimize technological risk. ▪ The site has been designed to optimise both fish welfare and economic efficiency. 3 ▪ Extensive work has been put into finding the most suitable location for realising the project. CAPITAL ▪ The production site has been carefully selected to provide a cost efficient facility, with a high level of flexibility and low CAPEX levels. EXPENDITURES ▪ The Rødøy site enables Gigante Salmon to construct a land-based salmon farming site with industry leading capital expenditures per kilo produced salmon. 4 ▪ The demand for salmon expected to stay strong due to increased focus on sustainability and health. PROFITABILITY ▪ No sea lice, efficient feed utilization, large capacity with intensive production and biomass optimization gives favorable costs per kg HOG. ▪ High expected profit margins creates resilience to market price fluctuations. 5 • The company will produce high quality food with a sustainable environmental footprint and creating valuable rural jobs. SUSTAINABLE • Land based production allows for control of water quality parameters and emissions. PRODUCTION • Sludge from the operations will be separated off and utilised for fertilizer production. 6 ▪ Financing for construction phase granted. Refer to slide 42 for details. FUNDING IN ▪ Long term financing granted. PLACE ▪ Overdraft facility for working capital granted. ▪ Leasing financing for work barge and machinery granted 7 02 MARKET OVERVIEW 02 Market overview Increasing demand for healthy protein sources Comments Population growth Global fish consumption per capita ▪ A growing global population will billion kg 21.4 increase the global demand for 20.6 10.9 proteins. 9.7 8.5 15.8 7.8 6.1 ▪ Health benefits and limitations in 5.3 9.9 traditional meat production is expected to increase fish consumption per capita. Global 1990 2000 2020 2030 2050 2100 1960 2000 2019 2029 fisheries are to a large extent fully exploited, meaning that the supply Resource-efficient production Climate friendly production of wild fish has limited potential to 1000 meet the growing demand for 60 56 12.0 20 70.0 marine protein. 50 10.0 15.4 60.0 15 39 50.0 40 8.0 8.0 40.0 30 6.0 10 39.0 30.0 ▪ Environmental issues are 19 6.0 20 4.0 4.3 20.0 5 increasingly influencing peoples 3.9 7 2.0 10 2.0 10.0 1.9 1.3 7.9 6.2 12.2 dietary choices. Increased fish 0 0.0 0 0.0 consumption will contribute to Salmon Poultry Pork Beef Salmon Poultry Pork Beef reducing global emissions. Edible Meat per 100 kg fed Feed conversion ratio Litre water / kg edible meat kg CO2 / kg edible meat Source: Salmon farming industry handbook 9 02 Market overview Significant growth potential for Atlantic Salmon in most geografical markets Market size Consumption per capita 600 9 8.2 8 500 7 6.3 400 6.1 6 (1000) 5 capita 4.8 tons 300 size 4 3.4 3.3 Kg WFE per Market Market 200 3 2.7 2.6 2.6 Average 2.5 2.4 consumption 2 1.7 1.8 1.8 100 1.3 1.4 1 0.8 0.9 0.5 0.6 0.6 0.4 0.3 0 0.1 0 UK Italy USA Chile Israel Brazil Spain Japan Russia Poland France Taiwan Finland Norway Canada Sweden Belgium Vietnam Thailand Australia Germany Netherlands South Korea South China/Hong Kong China/Hong Sources: Kontali 10 02 Market overview Stagnating growth in traditional farming Global Atlantic salmon supply (1000 tons GWT) Comments 3000 CAGR +3% ▪ The supply of Atlantic salmon has increased by CAGR +7% 7% p.a. from 2010 to 2019. 2500 ▪ Due to biological and regulatory constraints it is 2000 expected that the annual growth rate going forward will be reduced to 3%.