Q4 2018 B AKKAFROST GROUP Oslo 19 February 2019 DISCLAIMER No - PowerPoint PPT Presentation

Q4 2018 B AKKAFROST GROUP Oslo 19 February 2019

DISCLAIMER  No representation or warranty (expressed or implied) is  This presentation includes statements regarding future results, which are subject to risks and uncertainties. made as to, and no reliance should be placed on, the Consequently, actual results may differ significantly from fairness, accuracy or completeness of the information the results indicated or implied in these statements. contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary under- takings or any of such person’s officers or employees or advisors accept any liability whatsoever arising dir- ectly or indirectly from the use of this document. Page 2 BAKKAFROST / Q4 2018 PRESENTATION

 SUMMARY OF Q4 2018  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX

HIGHLIGHTS  Harvested 12,234 tgw in Q4 2018 (11,470 tgw in Q4 2017)  Feed sales of 24,711 tonnes in Q4 2018* (18,955 tonnes in Q4 2017*) Operation  Raw material purchase of 46,478 tonnes in Q4 2018 (50,852 tonnes in Q4 2017)  Revenues of DKK 750 million in Q4 2018 (DKK 906 million in Q4 2017) Revenues and Operational EBIT  Operational EBIT** of DKK 231 million in Q4 2018 (DKK 331 million in Q4 2017)  Cash flow from operations of DKK -59 million in Q4 2018 (DKK 261 million in Q4 2017) Cash Flow  Positive operational EBIT for all segments Segments Dividends  Proposed dividend of DKK 8.25 per share for 2018 (DKK 10.50 per share for 2017) *) Including internal sales of 21,649 tonnes in Q4 2018 (17,597 tonnes in Q4 2017) **) EBIT before fair value adjustments of biomass, onerous contracts provisions, income from associates and revenue tax Page 4 BAKKAFROST / Q4 2018 PRESENTATION

SUMMARY OF THE QUARTER Operational EBIT for the Farming segment Q4 Q4 decreased due to lower achieved prices. (DKK million) 2018 2017 2018 2017 Positive operational EBIT for the VAP Operating revenue 750 906 3,177 3,770 segment, but lower EBITDA margin for the Operational EBITDA 282 378 1,274 1,561 FOF segment. Operational EBIT 231 331 1,075 1,378  Farming/VAP margin decreased from 29.88 Profit for the period -7 -22 960 511 NOK/kg in Q4 2017 to 21.91 NOK/kg in Q4 2018 Operational EBITDA margin 37.6% 41.7% 40.0% 41.4%  VAP segment had a positive margin of 1.51 Operational EBIT margin 30.7% 36.6% 33.8% 36.5% NOK/kg in Q4 2018, compared to 9.54 NOK/kg in Q4 2017 Operational EBIT/Kg (Farming) (NOK) 21.56 25.76 27.89 30.02 Operational EBIT/Kg (Farming and VAP) (NOK) 21.91 29.88 27.24 28.29  Farming margin was 21.56 NOK/kg in Q4 2018, compared to 25.76 NOK/kg in Q4 2017 Operational EBIT/Kg (VAP) (NOK) 1.51 9.54 -3.46 -4.96 EBITDA margin (Fishmeal, -Oil and Feed) 21.0% 25.5% 20.0% 20.4%  FOF margin was 21.0% in Q4 2018, compared to 25.5% in Q4 2017  Group Operational EBIT was DKK 231 million in Q4 2018, compared to DKK 331 million in Q4 2017 Page 5 BAKKAFROST / Q4 2018 PRESENTATION

 SUMMARY OF Q4 2018  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX

MARKETS & SALES Sales distribution changed in Q4 2018, compared with Total sales of salmon Q4 Q4 Q4 2017 and the previous quarter, especially sales of by markets 2018 2017 2018 2017 fresh salmon. Sales to Eastern Europe decreased EU 44% 45% 31% 45% significantly, and all other markets increased in the USA 26% 17% 20% 18% fresh salmon sales. VAP on contract is still on a low Asia 24% 15% 24% 16% level Eastern Europe 6% 23% 25% 21%  EU market decreased from 45% in Q4 2017 to 44% in Fresh salmon only Q4 Q4 Q4 2018 by markets 2018 2017 2018 2017  USA increased from 17% to 26% EU 35% 12% 23% 23%  Asia increased from 15% to 24% USA 30% 25% 21% 24% Asia 28% 23% 27% 23%  Eastern Europe decreased from 23% to 6% Eastern Europe 7% 40% 29% 30%  Harvest volumes used in the VAP segment were 23% in Q4 2018, compared to 43% in Q4 2017 Contract share, VAP products [% of qty] 100% 80% 57% 65% 77% 60% 81% 40% 43% 20% 35% 23% 19% 0% Q4 2018 Q4 2017 2018 2017 VAP on contract HOG, spot Page 7 BAKKAFROST / Q4 2018 PRESENTATION

GLOBAL MARKETS Higher prices in Q4 2018 Spot prices (NASDAQ) on superior 4-5 [NOK/kg HOG] Q1 Q2 Q3 Q4  Prices increased 12%, compared with Q4-2017  y/y by 6.20 NOK/kg ~12% - from NOK 50.16 to NOK 56.36  q/q by 1.05 NOK/kg ~2% - from NOK 55.31 to NOK 56.36 Increased global supply in Q4 2018  4.7% increased global supply in Q4 2018, compared with Q4 2017, corresponding to Change in global market supply and market price 27,500 tonnes 50% Change in global market supply of farmed Atlantic salmon from the 30% previous year 10% Change in European spot 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 prices - fresh -10% Atlantic salmon 2013 2014 2015 2016 2017 2018 (FishPool index) from the previous -30% year -50% Source: Kontali Page 8 BAKKAFROST / Q4 2018 PRESENTATION

DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN 5% global supply growth in Q4 2018 SUPPLY DEVELOPMENT Q4 Q4 Change (HOG ‐ 1,000 tonnes) 2018 2017 % 1% growth in European harvest -0.3 % Norway 321.0 321.8 0.4 % UK 40.6 40.4  Low average harvest weights in Norway 4.9 % Ireland 3.9 3.7  Sea lice issues 16.0 % Faroes 21.5 18.5  Stable disease situation Total Europe 387.0 384.5 0.7 %  Stable output but strong underlying growth in 16.3 % Chile 169.2 145.4 the UK 3.2 % Canada 35.0 33.9  35% increase in feed consumption during Q4 2018 -1.8 % USA 5.0 5.1 Total Americas 209.3 184.5 13.4 % American harvest increased by 13%  Chile increased harvest by 16% 1.3 % Other 21.8 21.5 Total (Harvested quantity) 618.0 590.5 4.7 %  High harvest weight – strong biological performance  Minor changes in Canada and the USA  Build-up of frozen inventory in Chile Source: Kontali Page 9 BAKKAFROST / Q4 2018 PRESENTATION

SALMON MARKETS, SOLD QUANTITY (HOG) Strong momentum in most markets Salmon markets, sold quantity (head on gutted - HOG) EU growth 2% higher than European Estimated volumes Q4 comparison Estimated volumes FY comparison Markets Q4 2018E Q4 2017 Volume % FY 2018E FY 2017 Volume % harvest EU 275,000 268,000 7,000 2.6% 955,600 921,100 34,500 3.75 %  Demand fuelled by price pressure on USA 107,700 103,000 4,700 4.6% 427,700 397,700 30,000 7.54 % Russia 24,300 23,300 1,000 4.3% 87,100 69,800 17,300 24.79 % small sized fish Japan 16,200 15,900 300 1.9% 53,800 57,600 -3,800 -6.60 % Greater China 30,600 33,000 -2,400 -7.3% 122,000 108,100 13,900 12.86 % Solid US growth at increased prices ASEAN 22,100 20,300 1,800 8.9% 72,000 79,000 -7,000 -8.86 %  Lower growth than previous quarters Latin America 40,100 36,100 4,000 11.1% 152,600 135,400 17,200 12.70 % Ukraine 5,100 4,800 300 6.3% 15,700 13,600 2,100 15.44 %  Very low presence of European fish in the Other markets 84,000 74,300 9,700 13.1% 278,400 255,500 22,900 8.96 % market Total all markets 605,100 578,700 26,400 4.6% 2,164,900 2,037,800 127,100 6.24 % Declining growth rate in Russia Comments: Greater China = China / Hong Kong / Taiwan (incl. estimated re‐export from Vietnam)  25% growth in 2018 ASEAN = Association of Southeast Asian Nations (estimated re‐export from Vietnam subtracted) Latin America (including both Mexico and Caribbean + domestic consumption in Chile)  Chile major contributor to the growth All figures above are in tonnes hog, and are rounded to the nearest 100 tonnes. Greater China/ASEAN  Chile has taken larger share of large fish markets Strong growth in Latin America Source: Kontali Page 10 BAKKAFROST / Q4 2018 PRESENTATION

SHORT TERM SUPPLY OUTLOOK 4 - 6% supply growth expected in 2019 SUPPLY - TOTAL 700 7%  Europe – Increasing growth 600 6%  Uncertainty linked to biological performance in Norway 500 5%  Strong growth in Scotland – recovery to 2017 harvest levels 400 4%  Americas – Limited growth 300 3%  Chile expected to grow modestly due to regulatory constraints 200 2%  Growth must be driven by increased smolt as yield per smolt is historic high 100 1% levels 0 0%  2H 2018 smolt release in Chile is up 13% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 TOTAL Change same quarter last year SUPPLY - EUROPE SUPPLY - AMERICAS 450 10.0% 280 30% 9.0% 400 240 25% 8.0% 350 200 20% 7.0% 300 6.0% 160 15% 250 5.0% 200 120 10% 4.0% 150 3.0% 80 5% 100 2.0% 40 0% 50 1.0% 0 -5% 0 0.0% Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 AMERICAS Change same quarter last year EUROPE Change same quarter last year Source: Kontali Page 11 BAKKAFROST / Q4 2018 PRESENTATION

 SUMMARY OF Q4 2018  MARKETS AND SALES  SEGMENT INFORMATION  GROUP FINANCIALS  OUTLOOK  APPENDIX Bakkafrost’s hatchery at Viðareiði viewed from the top of the mountain