How non-financial reporting creates financial value in Cermaq

Transcription

1 How non-financial reporting creates financial value in Cermaq CEO Jon Hindar 29th January Norske Finansanalytikeres Forening

2 Content Company introduction Why sustainable aquaculture is important Why sustainability reporting is important.. and how we do it Why it creates financial value 2

3 Cermaq - #3 salmon farming company in the world Cermaq is a dedicated global salmonid fish farmer Operations in Chile, Norway, and Canada Estimated sales volume in 2014 is 161,000 tonnes* 4,400 employees Listed on Oslo Stock Exchange since 2005 Norwegian Government holds 59 percent of the shares *estimate from Q3 13 report 3

4 Our vision is to be leading in sustainable aquaculture, but what does it mean? SOCIETY Healthy and safe working environment for our employees Respect labour rights, e.g. the right to be organised in Trade Unions and collective bargaining Respect the right of indigenous people, e.g. First Nations in Canada Zero tolerance for corruption Open and transparent dialogue with stakeholders ENVIRONMENT Produce healthy seafood with minimal ecological footprint Optimal biological performance through preventive fish health and animal welfare Efficient use of resources, e.g. marine ingredients in feed ECONOMIC Create value to our shareholders and attract capital to secure further growth and profitability Create economic value to the communities in which we operate 4

5 Sustainable aquaculture - not limited to own organisational borders Cermaq s extended value chain Pelagic fishing Terrestrial farming Fish meal and fish oil production Raw material processing Feed production* Smolt production RESEARCH & DEVELOPMENT Salmon farming Primary processing Secondary Processing (VAP) *Cermaq owned EWOS though Oct 13 5

6 Content Company introduction Why sustainable aquaculture is important Why sustainability reporting is important.. and how we do it Why it creates financial value 6

7 mar.10 jun.10 sep.10 des.10 mar.11 jun.11 sep.11 des.11 mar.12 jun.12 sep.12 des.12 mar.13 jun.13 sep.13 des.13 mai.11 jul.11 sep.11 nov.11 jan.12 mar.12 mai.12 jul.12 sep.12 nov.12 jan.13 mar.13 mai.13 jul.13 sep.13 nov.13 Sustainability indicators = early warning High sea lice levels in 2012 in Chile warned of high cost in 2013 Sea lice and cost: absolute levels Sea lice and cost: change yoy percent ,5 4 3,5 3 2,5 0,5 0,45 0,4 0,35 0,3 0,25 0,2 0,15 0,1 0,05 0 2,5 2 1,5 1 0,5 0-0,5 sea lice per Atlantic salmon ex-cage cost, all species, USD/kg GWE ex-cage cost, 3m average, pct change yoy sea lice 3m average, pct change yoy 7

8 Demonstrating sustainable farming is a prerequisite for further growth NORWAY CHILE CANADA Nordland 17 licenses Finnmark region 27 licenses Authorities revise growth ambitions due to unsustainable farming conditions No new licenses since : «Green licenses» expected Region X Region XI 89 licenses British Colombia 27 licenses Cohen commission questioned sustainability of salmon farming Region XII Unrealistic to expect growth short term 8

9 Sustainable salmon farming can only be achieved through joint efforts The Global Salmon Initiative was established in member companies representing 70% of global salmon production GSI ambitions: Bring together global farmed salmon producers and other industry stakeholders to strive towards significantly improving the sustainability of salmon farming GSI partners : FAO, WWF, feed suppliers +++ GSI is currently focusing on three main areas: 1. Biosecurity (sea lice) 2. Feed and nutrition (sustainability) 3. Standards (ASC) 9

10 Active stakeholder dialogue enhances license to operate Examples key stakeholders Examples Cermaq initatives First Nations NGOs Canada Canada Agreement with Ahousaht (First Nation) in Tofino area Chile Chile Trade Unions Local communities Norway Municipalities NGOs Regular meetings, collective bargaining agreements, social sports Norway Promoting arealavgift 10

11 Content Company introduction Why sustainable aquaculture is important Why sustainability reporting is important.. and how we do it Why it creates financial value 11

12 Why is sustainability reporting important? What gets measured, gets done Enhances the ability to assess company valuation Key to recruit and retain talents Provides essential information to evaluate our performance Promotes facts based dialogue with NGOs 12

13 Sustainability reporting process 1 2 Define what is material External reporting Follow up on results Cermaq standards: Develop/ revise indicators and set targets 5 Values Guidelines 3 External audit Sustainability principles Report on progress 4 Follow up on results and ensure necessary actions 13

14 Importance to stakeholders Materiality analysis our tool for identifying the most important topics Most important to Cermaq Sea lice management Fish mortality Fish escapes Medicine use Sustainable feed ingredients High Customer health and safety Compliance OHS Economic performance Management systems Environmental topics Low Social topics Low Importance to Cermaq - Significance of impact High Economic topics Product and service topics 14

15 Board of Directors monitors most important topics Example: Environmental account statement YTD 13 YTD 12 Trend Indicator Unit OpCo Targets 2013 Q3 13 Q3 12 Trend Rolling 12 1 Fish month - Mortality ATS (%) Norway 5,50 % 5,2 6,5 5,2 6,5 Chile 15 % 15,2 16,8 15,2 16,8 Canada 8,40 % 8,4 10,8 8,4 10,8 15

16 Importance to stakeholders To meet the information need from communities, we disclose additional information High Low Additional topics important to external stakeholders Biodiversity Fish welfare Energy and emissions Breeding and genetics Sourcing & Supplier assessment (feed suppliers) Training and education Anti-corruption Freedom of association and collective bargaining Employment Indegenous rights Local community Child labor Human rights assessment Indirect economic impact Low Importance to Cermaq - Significance of impact High 16

17 Content Company introduction Why sustainable aquaculture is important Why sustainability reporting is important.. and how we do it Why it creates financial value 17

18 Why does sustainability reporting generate financial value? Salmon farming is a global commodity business The main value driver a farmer can control is cost Biological performance is the key driver of cost Sustainability indicators are key in understanding and explaining biological development, and therefore lead financial indicators - Measurement and reporting of sustainability indicators give a better grip on how the company generates value, and gives management improved understanding of cost development and a better tool to run the business - Demonstrating sustainable operations is a prerequisite for growth in practically all farming areas globally 18

19 From reactive to proactive Seafood Intelligence has ranked Cermaq as # 1, for 3 consecutive years, for transparent sustainability reporting Transparency International ranked Cermaq as #3 out of the 50 largest companies listed on the Oslo Stock Exchange for its openness on anticorruption programmes and disclosure of company information Farmandprisen 2013: The best annual report among Norwegian listed companies 19

20 Thank you for the attention! Visit Cermaq s sustainability reporting at 20