Clean Seas Seafood Limited

Investor Presentation • Oct 27, 2023

ANNUAL GENERAL MEETING

ASX:CSS & OSE:CSS

27th October 2023

O V E R V I E W

• Full year profitability and positive cash flow milestones achieved in FY23 through record revenue and reduced non-feed production costs
• Resonance of Clean Seas commercial messaging and the transition away from frozen clearance stock continues to drive strong pricing and revenue growth
• Highly competitive trading environment due to the global economic downturn coupled with increased competition across all markets from cheaper proteins
• Ongoing elevated feed prices due to inflationary pressures and raw material supply shortages
• Progress on sustainability agenda with novel feed ingredients and asparagopsis collaboration

F Y 2 3 F I N A N C I A L O V E R V I E W

• Group revenue of \$69.4 million and an underlying operating EBITDA of A\$1.21/kg or \$3.4 million, up \$8.5 million on FY22
• Turnaround strategy over the last 3 years has transformed Clean Seas into a profitable business
• Improved profitability reflects 29% and 26% increase in revenue and farmgate per kg, with increased and converging Fresh and Frozen pricing
• Farming and overhead cost efficiencies achieved despite an increase in costs, lowest Economic Feed Conversion Ratio in 5 years of 2.43
• Harvest volumes increased to 3,354 tonnes, a 15% increase
• Increased fresh sales, and the sell-through of all surplus clearance frozen inventory resulted in sales volumes of 3,054 tonnes being 19% below FY22

M A R K E T S

Targeted and consistent commercial approach drives worldwide demand for our Kingfish

• Maintained strong farmgate returns despite increased worldwide competition.
• Continued rationalisation of our supply chain in Europe and North America to better service end customers and maximise returns
• The South Australian Yellowtail push into independent and specialty retailers in Australia and North America has demonstrated that consumers are looking for accessible alternative proteins
• Reinforced our collaboration with Australian restaurant groups and sushi chain retailers
• Strong performance of our high-end foodservice business across all markets despite growing competition
• Strong resonance of commercial messaging, highlighting quality, culinary flexibility of our Kingfish

Strategic ambition to establish a reputation for its sustainable practices, leveraging the unique Spencer Gulf provenance story of growing native Kingfish in its natural waters

• In FY23 Clean Seas formed its key ESG priorities including
  • o the establishment of an ESG reporting framework
  • o selecting a platform that can assist in preparing the ESG report and start gathering the necessary information for its compilation
  • o engaging with a reputable partner who will aid Clean Seas in calculating its greenhouse gas emissions, ensuring accuracy and compliance.
• Successful trial to substitute the fish oil in its diet with sustainably sourced algal oil. In this trial, up to 100% of the fish oil in the diet was replaced with algal oil without materially impacting the heath or performance of the Kingfish. As a result of this trial, algal oil has now been incorporated into Clean Seas production diet, with the expectation that this will evolve into more sustainable diets in the future.

I N F R A S T R U C T U R E & A U T O M A T I O N

Investment in infrastructure and automation to lower production costs, promote operational stability and unlock productive efficiencies

• FY23 saw investment in larger vessels, hatchery capacity and marine infrastructure, plus the commitment to acquire a new automated feed barge (which is currently in production)
• When operationalised in mid-2024, the new feed barge will allow feed to be dispensed remotely regardless of the weather, promoting operational stability, improving feed efficiency and on farm performance
• Capacity to store 650 tonnes of feed, received directly on board via ocean transshipment from the feed mill, rather than by road, reducing the cost of freight and eliminating double handling and further reducing cost of production

T R A D I N G & P R O D U C T I O N U P D A T E

• Challenging market conditions have persisted throughout 2023, resulting in flat sales volumes year-on-year.
• Revenue is up versus Q1 last year due to ongoing reinforcement by our sales team and strong resonance of Clean Seas commercial positioning, with pricing up 4% on Q1 FY23
• Harvest volumes are up 23% on last year, with frozen inventory increasing by 190 tonnes in Q1 FY24 to 540 tonnes
• Live fish biomass is up 10% to 3,110 tonnes

Revenue (AUD \$) & Production Metrics (tonnes)	Q1 FY24	Q1 FY23	Change (Fav/Unfav)
Revenue ('000's)	16,151	16,071	1%
Revenue (\$/kg)	22.62	21.78	4%
Sales Volume	714	738	(1%)
Harvest Volume	904	732	23%
Live Fish Biomass	3,110	2,817	10%

O P E R A T I N G O U T L O O K

Leveraging premium market position, investment in infrastructure and automation, and reviewing operational footprint to help offset competitive market forces and input cost pressures

• Implement automated feed barge in early 2024 to provide capability whilst managing operational and financial risks
• Explore the development of alternate diets to drive fish performance and options to offset exposure to volatility in feed prices
• Continue to highlight the quality, usage, provenance and sustainability credentials of Clean Seas' ocean farmed Yellowtail Kingfish to maintain premium pricing
• Focus on driving efficiencies and improvement across the business to offset global inflationary pressures
• Ensure decisions related to investment, biomass and growth ambitions are appropriate in the context of profitability and cash flows in the short and medium term

DISCLAIMER:

Certain statements contained in this presentation, including information as to the future financial or operating performance of Clean Seas Seafood Limited ("CSS"), are forward looking statements.

Such forward looking statements may include, among other things, statements regarding targets, estimates and assumptions in respect of CSS' operations, production and prices, operating costs and results, capital expenditures, and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions; are necessarily based upon a number of estimates and assumptions that, while considered reasonable by CSS, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies; and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward looking statements.

CSS disclaims any intent or obligation to update publicly any forward looking statements, whether as a result of new information, future events or results or otherwise. The words "believe", "expect", "anticipate", "indicate", "contemplate", "target", "plan", "intends", "continue", "budget", "estimate", "may", "will", "schedule" and similar expressions identify forward looking statements.

All forward looking statements made in this presentation are qualified by the foregoing cautionary statements. Investors are cautioned that forward looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward looking statements due to the inherent uncertainty therein.

All volumes are in Whole Weight Equivalents (WWE).

Authorised for release by the Board of Clean Seas Seafood Limited.