Mowi ASA

OSE:MOWI

Earnings Call Transcript 2021-Q4

[Ivan Vindheim, Chief Executive Officer]

Good morning, everyone. My name is Ivan Vindheim, and I'm the CEO of Mowi. And it's my pleasure to wish you all welcome to the presentation of Mowi's fourth quarter results of 2021.With me today to present our financial figures and fundamentals, I have, as usual, our CFO, Kristian Ellingsen. And after presentation, our IRO, Kim Dosvig, will routineously post a Q&A session where you can submit your questions in advance or as we go along by e-mail. Please refer to our website at mowi.com for the necessary details. The disclaimer, I think, will leave for self study.Then highlights. Despite the escalation of the pandemic with the new Omicron variant and new closedowns in many markets, the fourth quarter saw increasing prices towards the end of the quarter, which have continued into the new year, driven by both strong demand and the supply growth that has begun to slow down after a period of high growth. With this backdrop, Mowi have made an operational profit of EUR 146 million, which is a tripling since last year and in line with the trading update of the January 17. And despite a challenging pandemic environment, we have managed with a few minor exceptions to keep our many farms and factories running normally. So yet again, a big thank you to all of our 12,000 employees who have made that happen. It's much appreciated.Blended Farming cost of EUR 4.62 per kilo in the quarter was stable from the third quarter. Furthermore, we harvested 115,000 tonnes in the quarter, more than guidance due to good growth conditions and some conservatism in our guidance figures and some advanced harvesting driven by biological issues in some regions. This adds up to all-time high farming volumes for Mowi for 2021 of 466,000 tonnes, equivalent to 6% or 26,000 tonnes organic growth year-over-year. And last year was also a record high year. This is both encouraging and very important as farming volumes and thereby farming volume growth are the mainstay of our business model.From one farming pillar to another, sustainability. As we have said numerous times, sustainability is deeply ingrained in the Mowi culture and at the heart of everything we do. It was, therefore, with great pleasure and pride, we were notified before Christmas that we for the third year in a row, were on the top of the Coller FAIRR index that ranks the World's Largest Animal Protein Producers on sustainability. This shows that Mowi is at the forefront when it comes to sustainable food production. And personally, I must say I feel extremely honored and humbled to be allowed to lead such a company and organization that once again excels in this way. Please also note that the Coller FAIRR index and the quartile of the Coller FAIRR index is -- the upper end of the Coller FAIRR index is dominated by Salmon-farming companies. This is maybe equally important. It shows that agriculture and Salmon farming in particular, are most definitely part of the solution to the green shift. So much about farming for now.For Consumer Products part, we had yet another good quarter earnings and volume-wise. And 2021 also turned out to become the best year ever for consumer products with record-high earnings and volumes of EUR 96 million and 248,000 tonnes product weight, respectively. Our Feed division also had a respectable quarter in a rather challenging sourcing environment and in a market subject to fierce competition. And feed performance was good, which is of utmost importance to us. Last but not least, the Board of Directors has declared a quarterly dividend of NOK 1.40 per share, equivalent to 70% of underlying earnings per share, of which 50% is ordinary dividend and 20% is extraordinary dividend.Then over to key financials. Kristian will, as usual, go in depth on financial figures under his session. So to not disrupt the course of events, we will just touch briefly upon the most important ones now. Mowi recorded record-high quarterly revenues of EUR 1.15 billion in the quarter, up by 14% year-over-year. Full year turnover was EUR 4.207 billion, and it's also an all-time high on, as already said, record-high volumes in both farming and consumer products. Operational EBIT of EUR 146 million, we have already commented on, tripled since last year. Cash flow was good in the quarter, adjusted for seasonality and tie-up of working capital and net interest-bearing debt came in at EUR 1.257 billion, well within our long-term target of EUR 1.4 billion. Underlying earnings per share in the quarter was EUR 0.20, and annualized return on capital employed was 15.5%, above the long-term target of 12%.In terms of regional margins through the value chain, they were reasonably good in Norway in the quarter, particularly from production area 6 and Northwards, whereas our farming regions abroad this time was more of a mixed bag. We will get back to the explanations shortly when we go through the various business entities. But first, briefly about prices. As already said, we saw increasing prices towards year-end, which have continued into the new year, driven by both strong demand and a supply growth that has slowed down. Compared to the fourth quarter last year, prices were up by impressive 49% in Europe and 42% and 20%, respectively, for Salmon of Chilean and Canadian origin in the American market. In other words, a very strong Salmon market, the way we see it. Kristian will elaborate more on prices and supply under his session. But first, our own relative price performance.Overall price performance for Mowi was 2% below the reference price in the quarter, held back by Norway and Canada East this time around. All other regions were on or better than the reference price in the quarter. Our Norwegian volumes suffered from contracts substantially lower than the prevailing spot price in the quarter plus some negative deviations related to size distribution and quality. Canada East on the other hand was yet again negatively impacted by its biological issues.Briefly about the EBIT waterfall. Overall, operational EBIT increased from EUR 49 million last year to EUR 146 million this year for the fourth quarter. This was in its entirety driven by increased earnings in farming as a result of higher spot prices. Farming volumes are in the same period, down and cost's up. Other businesses contributed with EUR 13 million less earnings-wise year-over-year.Then it's time to address the various business entities. And as usual, we start with the largest and most important one, Mowi Norway. Operational EBIT was EUR 125 million in the quarter, up from EUR 59 million in the comparable quarter last year. EBIT margin was EUR 1.76 per kilo this year versus EUR 0.75 last year, i.e., an improvement of 135% year-over-year. As the graph clearly demonstrates, this is caused by higher prices. Cost is stable and volumes are down from 78,000 tonnes to 71,000 tonnes. That said, full year volumes from Mowi Norway for 2021 were record high at 273,000 tonnes, up from 262,000 tonnes in 2020, which also was a record-high year. Finally, we expect higher realized costs in the first quarter due to lower volumes and less dilution of costs combined with higher feed prices last year.Then the breakdown of the regions in Norway. Margin wise, it was a mixed bag also this time around following the coast line. Region North stands yet again out as the margin winner with impressive EUR 2.37 per kilo on very low cost, NOK 34.8 per kilo in the quarter. Region North is Norway -- Mowi Norway's by far largest farming entity and harvested approximately 100,000 tonnes from production areas 7 to production area 12 in 2021. Region Mid achieved a margin of EUR 1.68 per kilo in the fourth quarter with a production cost of NOK 39.3 per kilo and harvested approximately 60,000 tonnes from production area 6. For both Region North and Region Mid, we had reasonably good biology in the quarter. There is a pattern in Norway that the further south you get, the more challenging the biology become. And for Region West and Region South part, it was a rather challenging quarter, biologically with particular Gill issues that led to some elevated mortalities and some advanced harvesting. With this backdrop, Region West and Region South recorded an EBIT per kilo of EUR 1.15 and EUR 1.09 per kilo, respectively. In terms of volumes, Region West harvested 65,000 tonnes from production Area 4 and 5, whereas Region South harvested close to 50,000 tonnes from production area 1, 2 and 3.Then our Norwegian sales contract portfolio. In 2021, we deliberately decided to keep the contract share low at 24% to capitalize on the expected market recovery after a very challenging 2020 with COVID-related market disruptions. This strategy served us well and due to our optimistic market view for 2022, we have decided to maintain this strategy with a contract share in the low end at 26% or 70,000 tonnes, though at significantly higher prices.Issues with gills and sea lice in the third quarter continued, unfortunately, into the fourth quarter for our Scottish operation. In addition to that, we also struggled with poor performing external eggs we introduced in Scotland in lack of other opportunities in the aftermath of the Norwegian egg export ban, which was imposed in 2019. We have phased out this egg supplier, but unfortunately, these eggs accounts for close to half of our stock in the first half of 2022. With this backdrop, Mowi Scotland made an operational profit of EUR 7 million, substantially down from the EUR 20 million we made last year due to higher cost, and EBIT per kilo of EUR 0.61 against EUR 1.57 per kilo last year.Mowi Chile, on the other hand, saw a significant improvement in operational EBIT year-over-year in the fourth quarter from minus EUR 10 million to a positive EUR 11 million this year and EBIT margin of EUR 0.64 against negative EUR 0.49 last year, driven by much higher prices. Cost is up as we harvested from sites with a higher cost level following our prolonged period of challenging environmental conditions after the algae bloom last year. However, on a positive note, production on the 2021 year class was good in the quarter.Mowi Canada broke even in the fourth quarter against a loss of EUR 14 million last year. And yet again, there were big differences between the farming regions in this business entity. Canada West turned a profit of EUR 8 million or EUR 1.07 per kilo versus a loss of EUR 6 million last year. Both cost and biology were good in the quarter, and prices are as addressed initially this morning, up by 20% year-over-year. Canada East, on the other hand, had unfortunately yet another disappointing quarter with a loss of close to EUR 8 million, after seeing incident-based mortality losses of EUR 6.2 million in the quarter related to challenging environmental conditions and sea lice. As stated before, we are not happy with the development in Canada East after the acquisition of Northern Harvest in 2018. Our performance has simply not lived up to the Mowi standard, and it's not only because of a challenging biology. Further to this, we have hired a new, very experienced production director from Mowi Scotland to secure that we apply Mowi's best practice also in this region going forward.Then it's time for Mowi Ireland and Mowi Faroes. For Salmon of Irish origin, we made an operational EBIT of EUR 1.5 million. This is down from the EUR 3.1 million we made last year due to higher costs as a consequence of toxic algae bloom in Bantry Bay in South Ireland. In the Faroes, operational EBIT improved from negative EUR 1.1 million in the fourth quarter last year due to positive EUR 5.3 million this year on the back of significantly higher prices, improved costs and higher volumes. That was all about the farming, then over to sales and marketing and more specifically, consumer products.As already touched upon on the highlights, Consumer Products has had yet another good quarter with an operational EBIT of EUR 26 million, which marked the end of yet another record-high year for consumer products with a total EBIT of EUR 96 million on 248,000 tonnes product weight, which is also record high. Return on value-added sales was 4.1% in 2021, and if we include bulk sales, 3.6%. Equivalent to a return on -- of a decent 15.3% for 2021, return on capital employed for order sake. The demand for label products have been strong throughout the year, and the fourth quarter was no exception, also partly driven by good Christmas demand. We also see good development in demand in more or less all markets. And the fourth/fifth wave of COVID has not impacted the market negatively so far.Our latest addition to the Mowi family, Mowi Feed. Feed turned on respectable profit of EUR 8 million in the quarter in what we said earlier this morning, a rather challenging sourcing environment and in the market subject to fierce competition, down from EUR 14 million last year. Return on sales for 2021 full year was 2.7% versus 4.6% in 2020 and demonstrates how slim the margins are right now in the feed market due to overcapacity. However, that said, we expect margins to gradually improve in the coming years as current overcapacity will be counteracted with farming volume growth going forward. Return on capital employed for the feed division for 2021 was 7.6%. And operationally, our feed has performed well with very good RGIs, which have laid the foundation for the record high farming volumes we have seen for Mowi in Europe.Then Kristian, the floor is all yours for walking us through the financial figures and fundamentals. Thank you so far.

[Kristian Ellingsen, Chief Financial Officer]

Yes. Thank you very much, Ivan, and good morning, everybody. We start as usual with the statement of profit and loss, where the top line shows revenue of EUR 4.2 billion for the year 2021, up 12% from 2020 on 6% higher farming volumes and the rest explained by higher prices. Increased revenue is the main driver behind the increased operational EBIT, both for the fourth quarter and for the year as a whole. With regards to the items between operational EBIT and financial EBIT, we see a net fair value adjustment positive this time around EUR 19 million, explained by higher prices. With regards to income from associated companies, that's mainly related to our associated company, Nova Sea, which had a good result operationally of EUR 1.92 per kilo, although somewhat behind the industry leader, Mowi Region North with EUR 2.37 in the quarter.Underlying earnings per share in the quarter, EUR 0.20, 3x the number in Q4 last year on the higher operational EBIT. Net cash flow per share in Q4, impacted by working capital tie-up and CapEx both are large in the quarter. But the corresponding cash flow per share for the full year was EUR 0.85, which was good. Return on capital employed above the 12% target for the year at 13.4% and for Q4, even better at 15.5%. Then we take a look at the balance sheet or the financial position, and with the covenant equity ratio of 55%, Mowi's financial position is very strong. And then we move on to the cash flow and net interest-bearing debt. We had a very good cash flow for the year of 2021. We see that, that cash flow was approximately EUR 200 million, and that's including a dividend paid of EUR 227 million. In Q4, there was a significant working capital tie up, as we see here, EUR 122 million, mainly related to accounts receivable and also biomass in sea. The figure for the year ended at a tie-up of EUR 26 million, somewhat behind the guiding.CapEx for the year of EUR 240 million for 2021, excluding licenses. That's EUR 25 million behind the guiding due to COVID-19-related delays in our projects but we carry that forward to 2022 as we will come back to shortly. Taxes paid, interest paid for the year, slightly below the guiding, but no significant differences there. And then we ended the year at EUR 1.257 billion in net interest-bearing debt, well below the EUR 1.4 billion target.We then take a look at the cash flow guidance for 2022. Working capital tie-up, we guide for EUR 90 million down 30% from the previous guiding. Capital expenditure, EUR 300 million. We have these pandemic-induced delays of EUR 25 million, which we carry forward into 2022. We continue to invest throughout the value chain, including freshwater investments, EUR 80 million, including the projects at [ Fjørdur] in Norway South, we have [ Horeca ] in the mid. We have [ Nordheim ] in Mid, [ Hercosul ] in West. They are the largest freshwater projects. And we also see here that we invest in seawater equipment, new sites, et cetera, approximately EUR 50 million on those items.With regards to processing, we are investing in several plants, including our primary processing facility in Scotland. And we continue with the automation investments in consumer products to support the productivity program. Interest paid down from 2021 estimated to EUR 35 million, and the guidance for tax payments is EUR 130 million. And then the quarterly dividend is payable in the first quarter, quarter dividend of NOK 1.4 per share. Then a few comments about costs and cost savings. We start with the picture seen now for several years that farming blended cost per kilo has been rather stable since 2016. We see a CAGR of 2.2%, which is less than inflation. That means that Mowi Farming has a period of actually a decrease in cost in real terms. That being said, the cost level is still too high, nominally impacted by more challenging biology, more handling of the fish, more expensive treatment technologies. There is an underlying pressure in biology. We see that the increase in health and mortality costs there are higher than the overall CAGR, both for health cost and mortality costs. And of course, we address biology, we address farming utilization of licenses. We have many different initiatives. We described that at length in our Capital Markets Day last year. So for more information, we also remind you of that material there. Cost-cutting initiatives are important, demonstrated by the fact that costs have been stable in a period with high underlying cost pressure. And we need a continued cost focus to combat the increasing feed prices, more challenging biology and more complex regulations. While we continue to work on costs, we take some comfort in the fact that Mowi has a good cost performance versus peers. This has to be analyzed region by region due to our unique global farming footprint. If we start with Norway, costs in 2021 below EUR 4 lower than in 2020, a good cost performance in our most important and largest region. We are clear #1 in Region North, PO7 and up outstanding operation, a cost leader, license utilization close to 1,300 tonnes per license, mortality reduced from the year before and volumes at almost 100,000 tonnes. We are #1 also in Region South. We have worked hard on cost improvements also on operational improvements in Region South. In Region Mid PO6, we are somewhat behind. We have had a year now impacted by somewhat more challenging biology, but the summary is that this region also performs well with a potential of becoming even better. Region West, a challenging area with a separate action plan, but the overall picture is that we perform very well in Norway on cost. We see in Chile, we are #1. Canada, we are #1, Scotland #2, Faroes #2 and #1 also in the other category, a good cost performance for Mowi over time. With regards to our cost saving program, for 2021, we realized cost savings of EUR 45 million in annualized cost savings. That's well above the target of EUR 25 million. We had a split of approximately EUR 25 million to EUR 30 million related to the productivity program, meaning that, that's the biggest part of this program. That's related to more efficient way of working, reduction of FTEs. We have cut 1,000 FTEs in this program. We have increased yield. We have improved our operations. This is hard work, and these are real permanent savings to our cost picture. We also have procurement savings related to improved agreements, managing the spend going through all the categories, working hard on different types of measures, whether it's frame agreements, whether it's tough negotiations, hard work also here. Both treatment have also managed a cost reduction there. And all in all, if you look at the picture since 2018, we have a total cost saving annually of EUR 182 million over 1,000 different initiatives throughout our operations. We have initiated a new EUR 25 million cost program now for 2022, split more or less 50-50 on procurement and productivity, other savings, so far around 223 different initiatives. And we see also from the graph here on the screen that the largest savings are related to productivity, different measures in operations. We see both treatments, a big category, salary. We see that procurement is also a category but not the largest one. So there's still a potential to work on this and continue to work hard on fighting cost to combat this underlying pressure that we see in the industry. And as I said, an important part of this is to deliver on the productivity program, and that is what we are doing. Since the start, we have cut over 1,000 FTEs, 2/3 of the target communicated back in 2020 when we launched this. We see the salary expenses now account for 15% of our cost base. It used to be 16%, so we have had a reduction. Still the second largest cost item for the group. There is, of course, still a potential here. If you take the farming volumes in this period, they are up 7%, while we also have a 7% reduction of FTEs in the period, that amounts to a productivity improvement of 14%. So if you look at the target we communicated, that was actually on as is volume. So in that sense, we are over-delivering on the 10% productivity target. We continue to work on this in 2022. FTE reductions will, to a large extent, be managed through natural turnover, retirement, reduced overtime, reduced contracted labor. And our expectation is, of course, to continue to grow and improve operation, extend our operation and be a net job creator in the coming years. When it comes to our financing, that's very solid. And this picture here is unchanged since the previous presentation. No changes here. We have a strong liquidity. We have available credit lines through the sustainability-linked facility we have with the banks and with our different bonds. No debt is maturing until June 2023. And our lenders in the bank syndicate are DNB, Nordea, ABN AMRO, Rabobank, Danske Bank, SEB and Crédit Agricole.Then over to the fundamentals. Supply development is where we start. And we had a good supply growth in the fourth quarter, global supply growth of 4% versus Q4 last year. That was above the guiding, and that was driven by higher volumes in Norway and in Chile. In Norway, plus 10%, we see here. We harvested in Norway in the industry, more individuals following good growth conditions during 2021, also some early harvesting due to gill issues and other challenges. Average rates continue to improve. 2021 saw the best average rate since 2015 for the industry. But the high harvesting has reduced the growth potential for 2022 and biomass year-end in Norway is down 3% versus 2020 for the industry. Chile, negative growth, minus 7%. We guided for an even larger decrease. The larger volumes versus expectations were driven by more fish being harvested at lower weights related to SRS, early harvesting, also taking advantage, of course, of good prices and being ahead of the algal season. Year-end standing biomass in Chile for the industry, down 6%, that's before taking into account the algae bloom, which has impacted the industry now in the first quarter, approximately 2 million fishes lost. When it comes to consumption increased by 3% versus Q4 last year, food service generally improved during the quarter. some concerns about the Omicron variant when this was new and certain, but we had a very good development, and this has continued now in the first quarter. Retail sales remains at very strong levels. We see EU plus U.K. plus 4%. Retail remained high in all major markets in Europe. Penetration and frequency rates, record high. We see foodservice recovered notably in Europe, but still below 2019 levels. So still a potential there. Russian consumption decreased on lower volumes available from Chile. The U.S., up 6% despite lower volumes from Chile, a higher share of Chilean volumes went to the U.S. at the expense of other markets such as Brazil and Russia. We also saw more imports into the U.S. from Europe at this quarter.Asia plus 13%; China, up as much as 51%; Norway exports higher volumes to China than 2019, but reduced volumes again from Chile. Reference prices increased from a low base in Europe, market prices increased by 49% and 40% in Americas. Prices have continued very good now in the first quarter. Strong demand seasonably reduced supply. And we see here that the supply outlook for 2022 is very modest. We have 0% estimated growth in 2022 versus 2021, approximately 0% in Europe, minus 2% in Americas. And for Q1, the estimate is minus 9%. So the supply and demand fundamentals look very positive in the coming periods. When it comes to our own volumes, we have unchanged volume guidance since the last presentation 460,000 tonnes. And then we can conclude my part, and we can move over to Ivan and the outlook section.

[Ivan Vindheim, Chief Executive Officer]

Thank you, Kristian. Much appreciated. Then it's time to conclude with some closing remarks before we wrap it all up with a Q&A session hosted by our IRO, Kim Dosvig. I said a few times already, we are very optimistic about the market prospects going forward. Current prices are good, and supply growth has come down after a period of high growth. The latest control figures suggest 0% supply growth in both Europe and Americas this year, and our internal figures indicate the same. So we believe in continued good price achievement going forward. And with Mowi's diverse and integrated value chain and low contract share, we think we are in a good position to capitalize on this. In terms of harvest volume guidance for 2022, we have, as Kristian just showed us, maintained it at 460,000 tonnes. And finally, the Board of Directors has declared a quarterly dividend of NOK 1.40 per share, equivalent to 70% of underlying earnings per share, of which 50% is ordinary and 20% is extraordinary. Then, Kim, I think the time has come for a Q&A session. So if Kristian can please join me on the stage.

[Kim Galtung Dosvig, Head of Treasury & Investor Relations Officer]

So we have received some questions. So starting with demand, 2 questions there. Can you comment on the demand supply balance short and medium term? And the second one, how much of the demand growth is driven by the sushi segment?

[Ivan Vindheim, Chief Executive Officer]

Yes. So I can start, Kristian. We are very optimistic about the market prospects going forward. The underlying demand has begun for not only years but for decades. And right now, there is no supply growth neither in Europe nor in Americas. And the way we see it, there will also be limited supply growth in the coming year. So again, we are very optimistic in the short term, but we're also very optimistic in the medium term. In the long term, no one knows. So we will not speculate on that. Good question about the sushi part of this. According to our internal Intelligence, the sushi market accounts for approximately 20% of the total salmon market, which is close to 3 million tonnes. And this share has increased substantially over the past years. So it definitely plays an important in this. And we think this will only continue. In Asia, the sushi consumption is 70% of total consumption. But in Europe, it's only 10%, and the same goes for U.S., which is the single -- the largest single market for salmon. So yes, so to put it like that, sushi has played an important role so far and we think it will play an even more important role going forward.

[Kim Galtung Dosvig, Head of Treasury & Investor Relations Officer]

Then some questions on consumer products and contracts, how our margins in consumer products developing so far this year, considering the higher spot prices? Are you able to transfer higher spot prices over to consumers?

[Ivan Vindheim, Chief Executive Officer]

Very early days. So I think this question we must revert to next time we meet. But so far, we are fine. But again, come on, we have just finished off January. So it's like running a marathon, we have finished -- we are finished with the first 5 kilometers, so it's a little bit early to talk about the run at this point.

[Kim Galtung Dosvig, Head of Treasury & Investor Relations Officer]

Another question on farming Norway Region North. A good relative performance versus peers so far this quarter. Can you elaborate on the biological and financial performance?

[Ivan Vindheim, Chief Executive Officer]

Well, as Kristian said, and I said, we had a very good production last year with good biology and things goes well in this region. And it's not only about people, it's also about geography. This is from production area 7 to 12 which is maybe the best area in the salmon world to grow the salmon in. So we also expect to see a good development going forward. And that's Region North will stand out as a margin winner compared to both peers and internally.

[Kim Galtung Dosvig, Head of Treasury & Investor Relations Officer]

Good. Then a question on the taxonomy sustainability. Have you heard any updates on this from the commission resources and the next steps for the taxonomy in terms of the salmon farming industry?

[Ivan Vindheim, Chief Executive Officer]

This one, I think we leave for the CFO, Kristian.

[Kristian Ellingsen, Chief Financial Officer]

Yes, I will try to give some comments on that. There are no major news. The EU platform for sustainable finance is still working on establishing criteria for seafood and for the salmon sector. This work has taken some time, and we expect that to be a little bit delayed. The platform has worked a lot with the energy sector and will come to other sectors now in the coming periods. We know that the salmon sector and seafood, those are regulated industries. So we think there are many good starting points for establishing criteria for our industries. And we look forward, of course, to seeing those proposals. And then there will be a hearing process when the platform for sustainable finance will comment there suggestions. And then countries, companies and industry organizations can come with their input in that hiring process. And then the final place of the salmon sector and seafood will then be decided by the EU Commission at some point in time. So we have to just continue to work on our part. In the meantime, we continue to cut emissions. We cut Scope 1 and 2 emissions in 2021. We have avoided 2 million tonnes of carbon emissions every year through our mix of protein production, salmon is a very efficient protein. And 98% of our volumes are sustainably certified, and we are part of the solution. So we are positive to this work, but no major news as of now on that area.

[Kim Galtung Dosvig, Head of Treasury & Investor Relations Officer]

Good. Then the last question received so far on the productivity program, the cost program. Can you please elaborate on the recent achievements and targets for 2022?

[Ivan Vindheim, Chief Executive Officer]

I think Kristian can answer this one, too.

[Kristian Ellingsen, Chief Financial Officer]

Yes. When it comes to the productivity program, I think we can start by saying that we have had good achievements so far around 1,000 FTEs, I mentioned in my section in the presentation. We see that around 75% of this comes in sales and marketing, more specifically consumer products, the processing side. The rest is mainly farming. And we have set ambitious targets for our processing plants on operational excellence, on improvements. And we are delivering on those targets, but we still have a way to go. So we are continuing with new targets now for 2022. And to elaborate a little bit, I guess we can say that this is a mix of different types of realizations. We see that we have more of an FTE culture now in Mowi than we did, a more cost-aware culture and more FTE aware culture. And then you can always realize some gains just from that. Then we have the equipment side. We have invested in automation and continue to do so. The largest part of the investment program in Consumer Products is related to automation. We also work very hard on improving our processes. The sales and marketing organization does a very good job there. And we can work more efficiently, get more out of the volumes we have. We can also mention that we have closed some factories, but that's not the biggest part of this. That's through working more efficiently and having a more focus on using equipment to do this better. So we don't want to disclose all of our secrets, but I guess those are some input that we can at least give.

[Kim Galtung Dosvig, Head of Treasury & Investor Relations Officer]

Good. So that concludes the questions from the web this morning.

[Ivan Vindheim, Chief Executive Officer]

Right. Then it only remains for me to thank everyone for your attention. We hope to see you back in May at our first quarter release. Meanwhile, take care and have a great day ahead. Thank you.