Bakkafrost P/f

Investor Presentation • Jun 6, 2023

Bakkafrost presentation A world-class company in the salmon industry

Scotland 06 June 2023

2

Scotland

Ian Laister, Managing Director Dave Cockerill, Biology Director

			HEALTHY LIVING
	Previous CMD	Current 5 Years
You are here	7 sites Capacity 10.7k m3 6.0m @ 85g	sites (+3rd 4 parties) 2 / 3 sites Capacity 22k m3 Capacity to 62k+ m3 11m @ 150g
Applecross	42 Sites	37 active sites 34+ sites 69,037T Consent Consent+ (total consent: 86kt) 55kT production
	2 Processing facilities 2 Harvest stations Capacity 185T/day	2 Processing facilities Primary / secondary 2 Harvest stations facilities Integrated Capacity 185T/day Capacity 450+ T/day
	2,100 m3 Harvest 150T/hr Delousing 2500 m3 FW treatment	2,840 m3 Harvest 5,000+ m3 Harvest 200T/hr Delousing 200T/hr Delousing 6,500 m3 FW / delousing 6,500+ T/hr FW / delousing
	610 fte 49T/fte	535 fte 600+ fte 55T/fte 83T/fte
	*) fte: Full Time Equivalent

HEALTHY LIVING

EBIT ANALYSIS V SCOTTISH PEERS

INVESTMENT TO MITIGATE RISK & DELIVER OUR STRATEGIC OBJECTIVES INVESTMENT PRIOITISATION STRATEGY

HEALTHY LIVING

GILL HEALTH IS CRITICAL TO GROWTH & SURVIVABILITY BY FAR THE LARGEST DIRECT AND INDIRECT MORTALITY CAUSE

Principle underlying causes for weak gill health

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Challenged gill health amplifies impact of other issues

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Weak fish generally vulnerable during handling / transportation

Other causes of mortality include exposure to viral diseases: • PD (Pancreas Disease)

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Note: Tail of 2021G still being harvested

IMPLEMENTED AND PLANNED MEASURES TO REDUCE BIOLOGICAL RISK

EXPECTED EFFICACY ON MORTALITY CAUSES

SIGNS OF IMPROVING BIOLOGY ENCOURAGING SIGNS OF PERFORMANCE FROM GENERATIONS IN SEA

lowest ever recorded levels (-92%)

+1.5kg on 2022, consistent supply

lower than industry av.

the Scottish industry (-38% v peak)

ever recorded levels (-50%)

sea c. 3% lower to date

Havsbrun Feed : State of the art farming and surveillance equipment : Best practice husbandry : Fleet capacity

RISK REMAINS ELEVATED PENDING LARGE HEALTHY SMOLT

- OUR INCREASED FRESHWATER TREATMENT CAPACITY HAS IMPROVED GILL HEALTH BUT IT DOES NOT REMOVE ALL RISKS…. • Since Q4 2022, we have reported on the new capabilities for efficient and gentle dual-treatment for gill health (freshwater) and sea lice (FLS delousing)

MITIGATION OF MANY RISKS HAVE ALREADY BEEN IMPLEMENTED LARGE SMOLT WILL SIGNIFICANTLY TIP THE BALANCE TO REDUCED RISK

(45% lice reduction), with safer treatments as a result of better gill health

(92% RPL / AGD reduction)

Gill Health - Dual treatment FW / FLS Plankton - Aeration + Advanced detection Better control of secondary AGD

Sea lice - Dual treatment FW / FLS PD - Vaccine, review and benchmarking. Improved gill health indirectly reduces PD (and CMS) mortality

Predation - Seal pro nets (99% mortality reduction)

Large smolt Sites secured or under development

FRESHWATER & FARMING TRANSFORMATION

LARGE SMOLT REDUCES BIOLOGICAL RISK EXTENDED RISK EXPOSURE IN THE MARINE PHASE DRIVES MORTALITY • Extended exposure to biological risks and stress leads to increased mortality • 2/3 of the mortality occurs in the second year at sea

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Note: Average of spring smolt releases 2019, 2020 and 2021

LARGE SMOLT STRATEGY DELIVERING LARGE HEALTHY SMOLT

HEALTHY LIVING

8m smolt at 500g 32,300m³ capacity

29,300m³ capacity

LARGE SMOLT….AND REDUCED RISK

500g smolt reduces exposure to the 2nd summer

• Farming cycles reduce from up to 24 months, to around 12 months

Benefits of 'One Summer' cycles

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Other benefits

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- customer supply

LARGE SMOLT….AND HEALTHY GROWTH TARGETING SIGNIFICANTLY REDUCED SEAWATER PHASE • Driven by smolt weight and temperature • Scotland's comparatively higher water temperatures provide • Good health (particularly Gill health) is fundamental to good

Growth / TGC

• an opportunity for growth
• growth

Virtuous Health impact

• Healthy smolt (from RAS) have no retained stress or challenge
• Higher TGC (healthy growth) reduces time in sea, and thus exposure to risks (health challenges)

Large healthy smolt

• Large healthy smolt, reduces the time in sea and exposure to biological and environmental risk
• Maintaining Gill health, delivers a high TGC, reducing time in the sea further
• Smolt from RAS (3rd parties), and of specific Strains, have shown exceptional growth

Global salmon farming licences generally "fully utilised" Scottish output constrained by biological thresholds

• Permitted volume have not been practically achievable

Bakkafrost Scotland has a large scope for growth

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• Stabilise and ensure profitability • Best practice husbandry & strategic investment • Growth through larger smolt • Site development and capacity increase

Cost / kg diminishes with harvest size due to:

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500g smolt drives:

- Cost principles Large smolt • More efficient utilisation of consent (yield) • Increased survivability

Target volume of 55kT by 2028

STARTING HARVEST FROM LARGER SMOLT 2024 ONWARDS • First release of large smolt expected Q3 2023

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• A 250g smolt with a high TGC can grow to harvest weight above 5kg HOG, in around 13- 14 months
• hatchery enters production

Average smolt size, smolt release and timing of harvest

-2,000

-1,000

0,000

1,000

2,000

3,000

4,000

5,000

6,000

Clear strategy to materially increase harvest weights

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Consistency of volume is attractive to customers

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A consistent supply of larger fish helps develop the brand value further

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Mean weight – Leveraging our regions

• • Underlying price (based on 2022 comparative MWs)
  • Market price led (demand ahead of supply) +£1.5/kg
  • Mean Weight led (higher MWs) +£0.6/kg
  • Bakka premium led (Faroes origin sales channel for large fish) +£1.0/kg

Sales Price performance Q1'23 vs Q1'22 (HOG Spot only)

SUMMARY: BUILDING A HEALTHY BUSINESS IN SCOTLAND STRATEGIC OBJECTIVES CONVERTING TO FINANCIAL PERFORMANCE

Large smolt Reduced cycle Higher average harvest weight Production growth Higher survivability Higher prices Lower cost Freshwater FLS 2028: 15m @500g 2028: 12m 2028: 55kt (HOG) 2026: 90% (GSI calculation) 2026: >5kg HOG Havsbrun feed Feed efficiency Seal pro nets Aeration Advanced monitoring Broodstock Vaccines Site development