Presentación corporativa 2013

EMPRESAS AQUACHILE S.A. Corporate Presentation 2013

AQUACHILE

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INDEX 01 Overview

Pág. 03

02 About AquaChile

Pág. 09

03 Industry Performance & New Regulation

Pág. 28

04 Sustainability and Stakeholders

Pág. 36

05 New Developments

Pág. 40

AQUACHILE

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01

Overview

AQUACHILE

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Empresas AquaChile at a glance.

AquaChile is a Chilean company that produces and commercializes Atlantic Salmon, Pacific Salmon, Sea Trout and Tilapia.

It owns inland farms in Costa Rica and the only three farming licenses granted in the Bayano Lake in Panama to produce Tilapia.

It has more than

It has operations in Chile, Costa Rica, Panama and a commercial office in the United States.

30 230 customers in countries.

It is the largest producer in Chile of Salmon and Sea Trout. It owns 150 sea licenses which provide a solid basis for its growth.

Source: Infotrade

AQUACHILE

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Empresas AquaChile at a glance.

Chilean Salmon Companies by Market Cap (MUSD)*

Public since

578 283

May 19th, 2011

281

163

143

34

Market capitalization of

USD 578 millions as of October 30, 2013 Main Shareholders:

Puchi and Fischer Families

Source: Bloomberg

Shareholder’s Structure** Puchi Family 33,03%

Pension Funds 4,53% Others 33,95% Others 29,41%

Fischer Family 33,03%

Source: The Company

*As of October 30, 2013 ** As of September 30, 2013

AQUACHILE

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2012 Main Chilean Salmon and Sea Trout Exporters (Th. Net Tons)

Volume

Market Share

51.027 46.604

32.101

10,4% 9,5%

31.200

30.448 26.993 24.190

6,6%

6,4%

6,2%

5,5%

20.335

19.122

4,2%

3,9%

5,0%

Source: Infotrade Dic-12

AQUACHILE

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25 years of succesful track record.

Annual Sales InBeginnings MUSD

• 25 years of history • Merger with Salmones Pacífico Sur • Track record forming strategic alliances • Sustained growth

2006 – 2007 Period

• 3rd largest world producer • Global presence and reputation • IPO and acquisition plans

Crisis

Today

• ISA virus effects • Financial restructuring • New legal framework focused in long term sustainability • Advantages of diversification

• • • •

Diversified business model Vertical integration High growth potential Industry consolidation capacity

Revenues In MUSD

410

2012 Source: The Company AQUACHILE

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Focus in diversification for success. % of Consolidated Sales (US$ )

19%

Sea Trout

36%

20%

Tilapia

Geographic Diversification

17% X and XI Region

Pacific Salmon

Atlantic Salmon

% of Consolidated Sales (tons)

31% X and XI Region

16% X and XI Region

25%

15% Bayano Lake

Guanacaste

Source: The Company as of December 31, 2012 AQUACHILE

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02

AquaChile

AQUACHILE

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AquaChile: Strong organic growth plan based on unique assets

Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation

AQUACHILE

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Sea water: Unique, diversified and large license portfolio.

One of the largest sea licenses base and the largest presence within sanitary areas in the Chilean industry.

150* Sea licenses distributed in

29 Sanitary Areas -Geographic distribution -Organic growth capacity -Operational and productive continuity -Continuous supply to clients -Species diversification -Natural, climate and sanitary risk diversification * Include 7 brackish water licenses AQUACHILE

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Sea water: Unique, diversified and large license portfolio.

Los Lagos Region

Geographical diversification in sea licenses for Salmon and Sea Trout production.

INDUSTRY Total of 24 sanitary areas AQUACHILE 55 sea licenses in 12 sanitary areas

50% of sanitary areas of the Los Lagos Region

Aysen Region INDUSTRY Total of 34 sanitary areas AQUACHILE 95 sea licenses and 17 sanitary areas

50% of sanitary areas of the Aysen Region

Sea licenses

Sanitary areas AQUACHILE

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Tilapia Costa Rica & Panama: Large water volume and favorable climate.

Costa Rica

Geographical diversification in Tilapia production

-Strategic access to large volumes of high-quality water Guanacaste

Costa Rica

-Optimal location for logistics

Bayano Lake

-21,000 tons WFE capacity

Panama

Panama -The Company has the only three tilapia farming licenses granted in the Bayano Lake -Potential to produce over 20,000 ton WFE

AQUACHILE

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AquaChile: Strong organic growth plan based on unique assets

Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation

AQUACHILE

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Fresh water: Flexibility and excess installed capacity.

Geographical diversification in fresh water.

24*

hatcheries from the IXth Region to the XIth Region, including 1 hatchery near Santiago.

14** fresh water farming licenses in the Xth and XIth Regions for Sea Trout and Coho smoltification.

1

River licenses in the XVth Regions for Atlantic Salmon smoltification.

7

brackish water licenses in the XIth Region for Coho smoltification. * Seven of them are rented under long term contract ** Two of them are rented under long term contract

AQUACHILE

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AquaChile: Strong organic growth plan based on unique assets

Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation

AQUACHILE

16

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Processing: Installed capacity to absorb growth.

7 plants with a total capacity of 190,000 WFE tons, including one of the largest plant in the World Current production capacity of AquaChile’s processing plants In thousands of WFE tons

50,0

34,4

36,7

26,0 21,6

Cardonal

Cailín

Hueñocoihue

Plant Type

Value Added

Whole Salmon

PAC-HACCP Certification

Yes Puerto Montt

Location

21,0

Antarfood

Calbuco

Costa Rica

Whole Salmon

Value Added

Value Added

Value Added

Yes

Yes

Yes

Yes

Yes

Quellón

Dalcahue

Chonchi

Calbuco

Guanacaste Source: The Company

AQUACHILE

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Processing: Installed capacity to absorb growth.

Chile

Costa Rica

Diversity of Salmon Products

Diversity of Tilapia Products

Whole

Trim D

HG

Trim C

Trim E

Portions

Fillets

Whole

Breaded Fillets

AQUACHILE

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AquaChile: Strong organic growth plan based on unique assets

Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation

AQUACHILE

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Vertical integration troughout the value chain.

INTEGRATION

AquaChile is vertically integrated in the Salmon and Tilapia business.

The Company adds value to all of its productive chain, from genetics up to commercialization.

SALMON AND SEA TROUT

FRESH WATER Eggs & Smolts

SEA WATER Farming

GENETICS

PROCESSING

COMMERCIALIZATION

PROCESSING

COMMERCIALIZATION

FEED

TILAPIA

FRY PRODUCTION

GENETICS

FARMING

FEED* FEED

AQUACHILE

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Genetics: 15 years of succesfull and proven genetic development.

Aquainnovo: Created to be a world class center for genetic improvement in aquaculture Increase in harvest weight of the Pacific Salmon In WFE kg

AquaChile 99,88%

∆+40%

Universidad de Chile 0,12% Source: The Company

Improvement in Tilapia conversion factor of ACI Group

Reduction in the Tilapia’s on growing cycle In number of days

Δ-36%

Δ-21%

Source: The Company

Source: The Company AQUACHILE

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Genetics: 15 years of succesfull and proven genetic development.

Genetics in Salmon and Sea Trout

Genetics in Tilapia

AQUACHILE

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Fish feed plant: State of the art assets to feed our fish.

Joint venture with Biomar in Chile, one of the world’s leading suppliers of high performance fish feed.

126,000 tons of installed capacity.

Modular design allows the company to double its output capacity.

AQUACHILE

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AquaChile: Strong organic growth plan based on unique assets

Sea Water: High quality and diversified license portfolio Fresh Water: Flexibility and excess installed capacity Processing: Installed capacity to absorb growth Vertical integration throughout the value chain Global presence and reputation

AQUACHILE

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Commercialization: Global presence and reputation.

AquaChile has over 230 clients in more than 30 countries in the five continents We have more than 19 years of experience in Asia and over 20 years in the fresh salmon market Destination of AquaChile’s main Salmon, Sea Trout and Tilapia sales In net tons

6.870

268

274

146

84

5.563 6.709

127

127

157

54

1.505 32

Tilapia

16.577 3.690

2.018 1.230

810 793

21 78

, 1.859

132

127 23 1.012

Salmon

867 2.094

Operations Salmon and Sea Trout sales 2012 (net tons) Tilapia Sales 2012 (net tons)

Source: The Company AQUACHILE

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AquaChile Inc: Servicing the United States from Miami.

Experienced customer service Reliability and commitment We deliver!

The only Salmon & Tilapia company with operations inside Miami International Airport Improved cold chain Less handling involved

AQUACHILE

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Our brands and our main clients.

Renowned Brands

Reputable Clients

AQUACHILE

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03

Industry Performance & New Regulation AQUACHILE

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Chilean industry Productivity performance Significant mortality reduction in the industry since 2009 Sea lice level increasing according to the increase in the industry biomass Monthly mortality rates (%)

Sea lice monthly monitoring 2007-2013 (Number of sea lice per fish)

20%

70 60

15%

50 40

10%

30 20 1,65% 1,20% 0,70%

ago-08 dic-08 abr-09 ago-09 dic-09 abr-10 ago-10 dic-10 abr-11 ago-11 dic-11 abr-12 ago-12 dic-12 abr-13 ago-13

0%

Pacific Salmon

Atlantic Salmon

Sea Trout

10

7,4 5,9 0,6

0 mar-07 jul-07 nov-07 mar-08 jul-08 nov-08 mar-09 jul-09 nov-09 mar-10 jul-10 nov-10 mar-11 jul-11 nov-11 mar-12 jul-12 nov-12 mar-13 jul-13

5%

Pacific Salmon

Atlantic Salmon

Sea Trout

Source: Aquabench, Sernapesca

Source: Aquabench

AQUACHILE

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Origin of the sanitary crisis: Sea lice monthly monitoring (Number of sea lice per fish) Sea lice Crisis 80

Ova imports with no restrictions.

60 40

Non-existence of biosecurity standards.

Low-quality Smolts.

Inadequate regulation.

Excessive densities.

Non-interrupted cycles, with no fallowing.

Consequences

20 0 mar-07

ago-07

Pacific Salmon

ene-08 Atlantic Salmon

Sea Trout Monthly mortality rates (%) ISAv Crisis

Deficient coordination among production sites.

20%

Low usage and low quality vaccines.

15% 10% 5% 0% mar-08

ago-08

Pacific Salmon Sea Trout AQUACHILE

ene-09

jun-09

Atlantic Salmon Pรกg. Nยบ30

New regulations Structural Changes in the Industry: Controlling Risk Fresh water

AS ST PS

Sea water

AS ST PS

Restrictions and new sanitary protocols on egg imports and hatchery use

✓✓ ✓

Sanitary areas

✓✓ ✓

Operating and fallowing schedules in sanitary areas

✓✓ ✓

Macrozone definition: 4 in the Xth Region and 3 in the XIth Region

✓✓ ✓

Corridors definition between macrozones (5 miles)

✓✓ ✓

Minimum distance between licenses (1.2-1.7 miles) and sanitary areas (3.5 miles)

✓✓ ✓

Re-location of licenses located in corridors

✓✓ ✓

New licenses granted for 25 years with the option to be renewed

✓✓ ✓

Sanitary zoning for diseases

✓✓ ✓

Strengthening of control powers (biomass stamping out in case of disease) and forfeiture conditions of the farming licenses

✓✓ ✓

Establishment of specific sanitary programs for ISA, Sea Lice and SRS

✓✓ ✓

Individual Screening of Broodstock

Affluent and effluent treatment

Land based hatcheries

Safe mortality disposal

✓✓ ✓ ✓✓ ✓ ✓ ✓✓ ✓

Standardization and validation of diagnostic laboratories

✓✓ ✓

Smolts: ISA free certification before transferring to the sea

✓✓ ✓

Safeguards and optimization of freshwater production

✓✓ ✓

Clear and strong disinfection protocols

✓✓ ✓

AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon AQUACHILE

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New regulations Structural Changes in the Industry: Controlling Risk Sea water (Cont..)

AS

ST

PS

Improved adherence of legal framework regarding sanitary and environmental issues

✓

✓

✓

Coordinated programs for sea lice control

✓

✓

Safe mortality disposal

✓

✓

✓

No fish movements between marine sites

✓

✓

✓

Restrictions and new sanitary protocols for wellboats

✓

✓

✓

Application of maximum farming densities in the sanitary areas

✓

✓

✓

Standardization and validation of diagnostic laboratories

✓

✓

✓

Re-location allowed in the XIth Region

✓

✓

✓

License application suspended in the Xth and XIth Region until 2015

✓

✓

✓

Penalties increase (penalty equal to economic value of biomass)

✓

✓

✓

Increase in patents: more resources for research

✓

✓

✓

AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon AQUACHILE

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New regulations Structural Changes in the Industry: Controlling Risk

Final steps on the legal framework : pending final decree

AS

ST

PS

Flexibility in the fallowing period of licenses • Extended fallowing periods without expiring dates • Licenses located in corridors allowed to stand by without expiring

✓

✓

✓

Density restriction per license Biosafety qualification regarding mortality records from the last productive cycle • Low mortality: maximum allowed density • High mortality: stocking restrictions

✓

✓

✓

✓

✓

✓

Density restriction per sanitary area • The sanitary area density will determine the maximum number of fish to stock in each pen, except those licenses with low mortality performance during the last productive cycle (less than 15%) • The density will be determined by: • Environmental performance (10%): Number of licenses presenting aerobic conditions at the end of the productive cycle • Sanitary performance (65%): Total mortality within the last period • Productivity performance (25%): Stocking intention in the sanitary area compared with the optimal stocking • Optimal stocking in the sanitary area depends of the mortality in the last productive cycle.

• Low mortality: optimal stocking increase in 16% • High mortality: optimal stocking decrease 24% AS: Atlantic Salmon; ST: Sea Trout; PS: Pacific Salmon AQUACHILE

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New regulations Structural Changes in the Industry: Controlling Risk Density restriction per License

Mortality

Biosecurity Level

Next Cycle Smolt stocking

] 0% ; 15% ]

High

Maximum allowed density

] 15% ; 18% ]

Medium High

10% smolt stocking reduction

] 18% ; 22% ]

Medium

20% smolt stocking reduction

] 22% ; 26% ]

Low 1

40% smolt stocking reduction

> 26%

Low 2

60% smolt stocking reduction

AQUACHILE

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New regulations Structural Changes in the Industry: Controlling Risk Density restriction per Sanitary Area* Environmental Performance: Weight

10%

Rank (%)

Score

]75,100]

100

]50;75]

75

]25;50]

50

[0;25]

25

Score

Biosecurity Level High

Atlantic Salmon: Sea Trout: Pacific Salmon:

17 kg / m3 12 kg / m3 12 kg / m3

Medium

Atlantic Salmon: Sea Trout: Pacific Salmon:

15 kg / m3 11 kg / m3 11 kg / m3

Low 1

Atlantic Salmon: Sea Trout: Pacific Salmon:

13 kg / m3 10 kg / m3 10 kg / m3

Low 2

Atlantic Salmon: Sea Trout: Pacific Salmon:

11 kg / m3 8 kg / m3 8 kg / m3

Sanitary Performance: ] 85 ; 100 ] Weight

Rank (%)

Score

[0%,15%[

100

[15%;17%[

75

[17%;20%[

50

>20%

25

] 64 ; 85 ]

65%

] 43 ; 64 ]

Productive Performance: Weight

Rank (%)

Score

[0%,100%[

100

[100%;110%[

75

[110%;120%[

50

>120%

25

] 0 ; 43 ]

Permitted Pen Density

25%

* Apply for licenses with more than 15% mortality in the last cycle AQUACHILE

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New regulations Structural Changes in the Industry: Controlling Risk

Final steps on the legal framework : pending final decree Smoltification in lakes, rivers and brackish water • Minimum distance between smoltification sites and on growing sites / gathering sites / docks for aquaculture operations (3 miles) • Smoltification area must be located in disease free area from list # 2 with specific sanitary control program • However Sea Trout and Pacific Salmon smoltification area can be located in surveillance area from list # 2 with sanitary control program for 3 years

AQUACHILE

AS

ST

PS

✓

✓

✓

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04

Sustainability and Stakeholders AQUACHILE

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We are committed to our employees, our clients and the environment.

-More than

5,100 employees in Chile, Costa Rica, Panama & United States OUR LABOR AND ENVIROMENTAL STANDARDS

-Benefits above legal requirements -On the job training -Costa Rica: ISO 14001:2004, OHSAS 18001:2007 and BAP for Global Aquaculture Alliance, the most demanding at present -Chile: Global GAP certification in progress -Social Responsibility Report available (www.aquachile.com/sustainability)

AQUACHILE

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We are committed to our employees, our clients and the environment.

-To produce quality, healthy and safe food

-To act in a proactive and respectful way towards the environment OUR CORPORATE SOCIAL RESPONSIBILITY PRINCIPLES

-To develop in a safe and healthy work environment -To benefit the communities and suppliers in the places where the company operates

AQUACHILE

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We are committed to our employees, our clients and the environment.

AQUACHILE

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05

New Developments

AQUACHILE

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Disease free eggs recirculation hatchery: Chaicas.

AQUACHILE

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State of the art research facility: Lenca.

AQUACHILE

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Harmoniously raised fish www.verlasso.com

Alejandro

Cristian

Verlasso salmon

Verlasso farms

AQUACHILE

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Fish feed in Costa Rica: association with Biomar.

AQUACHILE

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Pet food flavoring plant: association with SPF.

AQUACHILE

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obligation to publicly update any such statements in the

Note on forward-looking statements

presence of new information, future events or otherwise.

This report includes forward-looking statements. These may include words like “anticipates”, “estimates”, “expects”,

This document purports to deliver general information on

“projects”,

other

Empresas AquaChile S.A. Under no circumstance does it

comparable expressions. Forward-looking statements do not

constitute an exhaustive analysis of the financial, productive,

represent past events, including statements on the beliefs

commercial and health situation of the company, and

and expectations of the company. These statements are

therefore any consideration on the advisability of acquiring

based on current plans, estimates and projections, and

or selling securities of the company would require the

therefore cannot be overrated. Forward-looking statements

interested party to conduct an independent analysis.

entail certain risks and uncertainties. The company notes

In

that a significant number of factors could result in current

AquaChile S.A. has sent its financial statements and notes to

results to differ materially from those contained in any

the Securities and Insurance Commission, which are

forward-looking statement. These factors and uncertainties

available for consultation and analysis on its webpage at

include in particular those described in the document that

www.svs.cl and also at www.aquachile.com.

“intends”,

“plans”,

“believes”

or

accordance

with

applicable

standards,

Empresas

the company submitted to the Chilean Securities and Insurance Commission (SVS), section on Risk Factors.

Forward-looking statements are related only to the date when they are made and the company assumes no

AQUACHILE

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