Investor Presentation • Sep 14, 2021
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Faroe Islands 14 September 2021
This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements.
No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person's officers or employees or advisors accept any liability whatsoever arising directly or indirectly from the use of this document.
4th Annual Sustainability Report is available on our website
Salmon farming is about being in control of biology in a difficult environment
Bakkafrost has an excellent track record in the Faroes
Embarked on a journey to structurally strengthen Scotland
Bakkafrost has adopted an integrated value chain in the Faroe Islands, strengthening factors under own control
Bakkafrost has reduced reliance on third party contracts
Bakkafrost owns the Intellectual Rights of two origin-based salmon strains:
Benefits
Bakkafrost will be self-sufficient with roe in 2024
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: Holtermann Marine oil inclusion Marine protein inclusion Non-marine inclusion
0%
Source: Holtermann, Bakkafrost 11
• Fish welfare is the primary focus
High focus on having competent, trained staff with short decision lines
• Sharing culture and common systems
Marine farming staff is equipped with advanced technology
External risks efficiently mitigated
| Not own control |
Level of control | Own control |
|---|---|---|
| Site flexibility | ||
| Site consolidation | ||
| Coordinated use of large smolt | ||
| Zone coordination/treatment sequencing | ||
| Zone fallowing | ||
| Site swaps | ||
| Suppliers |
Limited capacity has been available
Seawater exposure highest during summer/early autumn
Exposed fish are weakened leading to cumulative mortality
Summer/Autumn Risk
Movement of sites from shallow to more exposed waters
Comprehensive programme for improvement
Source: Kontali, Bakkafrost
Realised prices/kg, NOK (2020)
Source: Kontali, Bakkafrost
Fixed cost dilution expected in line with growth
Very high costs in Scotland
Healthy salmon appreciated by the high end market!
Source: Kontali, Bakkafrost Source: Kontali, Bakkafrost 30
Source: Sjømatdatabasen, Bakkafrost
Source: Sjømatdatabasen, Bakkafrost
Faroe Islands – Harvest allocation, 2020
HOG VAP
HOG VAP
• Higher turnover of existing licence through larger smolt
MODERATE SUPPLY IMPACT EXPECTED DUE TO LOWER RETURNS FROM INCREMENTAL CAPACITY
Total marginal investment Assumed marginal EBIT Implied marginal return
Note: See assumptions, sources etc. in New Technology chapter
Note: Bakkafrost takes no responsibility for the accuracy or correct interpretation of the collected estimates listed above. The purpose of the table is to generally illustrate return dynamics of projects requiring larger capital investments.
Primary processing (market flexibility)
Transportation (flexibility and future growth)
Maintain global EBIT/kg leadership in the Faroes
HEALTHY MARGINS IN SCOTLAND
MAINTAIN COST POSITION
BUILD CAPACITY 180,000t (HOG)
HARVEST 150,000t (HOG)
Feed
Sources: UN, Earth Overshoot Day 2019, FAO, IPCC 2018 Report
Note: CO2e is calculated by multiplying the emissions of each of the six greenhouse gases (CO2, CH4, N2O, HFCs, PFCs and SF6) by its 100-year global warming potential (GWP)
Source: Unilever Food Solutions & Global Salmon Initiative
Source: GSI
Note: Feed conversion ratio (FCR) measures the productivity of different protein production methods. It demonstrates the kg in feed need to increase the animal's bodyweight by 1kg.
Source: GSI
Source: GSI
These calculations take into account differences in FCR, edible yields and the cost of progeny. Source: Global Salmon Initiative, Bakkafrost
Source: Sjømatdatabasen, Bakkafrost
Source: Sjømatdatabasen, Bakkafrost
Growth in world fish supply since the 1990s has come from aquaculture.
Recycle or repurpose old farming nets and chains. Repair and reuse cables and pipes
plant produces renewable energy from bioorganic waste from Bakkafrost hatcheries
Building for the future Energy vessel efficiency (Bakkafoss, electical work boat, fuel consumption)
Own airline to reduce carbon air freight emission by 40-50%
We remain committed to our local communities in which we live and work.
As a responsible business, we are passionate about driving the economic growth and sustainability of the rural economy
• Industry, customers, investors, stakeholder groups and our communities
Drive forward and collaborate with authorities, peers in the industry and a number of leading industry groups including:
Global Salmon Initiative (founding member)
EFFOP (European Fishmeal and Fish oil producers)
Faroese Employers Association and Fish Farmers Association
Scotland Food & Drink
IFFO The Marine Ingredients Association
Lantra
Develop a mental health & wellbeing strategy
Active participation in Modern Apprenticeships and Graduate training schemes in Scotland
Partnering with local schools for internships. Expanded partnership 10th grade maritime concentration
Participation in "kick-start" programme to encourage employment for young people
Integration initiatives for our growing international staff
"The partnership with Bakkafrost is exemplary, and we are thankful for their commitment to offer our clients an opportunity to be active in the labor market again"
Quote: Hallur Thomsen, Director at Almannaverkið, Department of Social Services
Housing programme as part of new site development plans, included a local Café in Lochcarron
Investment in key skills to facilitate sustainable growth and investment plan
HEALTHY COMMUNITIES
Ensured sustainable feed ingredients for further growth
Truly One Company
ISO 45001 certified
500g smolt across the Group
Yield per smolt >4.3 for the Group
Further organic growth opportunities explored
Faroe Islands 14 September 2021
This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements.
No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information 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 directly or indirectly from the use of this document.
Ability to meet increased retail demand for consumer products
Central location
Capacities per day
Capacities per day
GLYVAR TOUR LAYOUT
of Nordic consumers claim to eat healthily all or most of the time.
of Nordic consumers aspire to consume more nutritious food/drink over the next year
Nordic consumers agree that there is too much conflicting information about what a healthy diet is
Spotlighting 'genuine' immunity credentials has never been more timely. Less than 1% of food/drink launches in the Nordics over the past year featured immunity claims.
Tine Biola Lactose Free Skimmed Cultured Milk with Melon & Passionfruit is enriched with vitamin D, which is said to contribute to the normal function of immune system, Norway
Innocent Super Smoothie On Guard comprises a mix of pineapple, guava, orange and turmeric with added vitamins and "helps guard your immunity", Sweden
of Finnish adults have been prompted by the COVID-19 outbreak to include immuneboosting foods to their diets (e.g. fresh fruit, zinc-rich foods)
of consumers across Nordic countries claim to be avoiding animalderived food
of the Nordic population claim to be limiting their meat intake
of consumers in Norway, Sweden and Finland say that COVID-19 proves that humans need to eat fewer animals (Denmark: 24%)
Neither agree nor disagree Somewhat disagree Orkla in Denmark launches an umami sauce to provide flavour for vegetable dishes
consumers across Nordic countries say they try to act in a way that is not harmful to the environment
of consumers across Nordic countries agree it is hard to know which factors have the most impact on the environment (eg food waste, reduced energy use)
of consumers across Nordic countries agree that companies/brands can be leaders in protecting the environment
Global: % of food and drink launches making health* or sustainability claims, by year, 2005-20
* for this analysis, health-related claims include functional, plus, minus, and natural claim categories on GNPD Source: Mintel GNPD (dotted lines are based on the continuation of current rates of growth)
Governments are reacting. Denmark recently updated its official dietary advice to consider not only health, but also the environment (Denmark)
Brands are reacting. Fazer have launched a range of "responsible" oat-based cooking sauces to add flavour to vegetarian and vegan foods. "What nature would feed you" (Finland)
Chefs are reacting. Norwegian chef Lise Finckenhagen promotes a "Weekly Planetary Health Menu", including dishes such as vegetable tacos, grilled cod, and falafel wraps with hummus (Norway)
Source: Our World in Data
CO2 neutral, CO2 negative, CO2 positive: Climate-friendly labelling on food and drink is emerging but it lacks standardization and, often, clarity.
CO2 compensated (Sweden)
CO2 neutral (Denmark)
Climate positive (Finland)
When surveyed during the pandemic, many consumers were turning to food and drink solutions from local producers and brands.
LOCALLY GROWN 32%
of Swedish consumers typically try to buy locally grown food all or most of the time
LOCAL BRANDS
of Finnish consumers plan to support more local food/drink brands over the next 12 months
Totensupper Sweet Potato and Carrot Soup is described as local, short-distance travelled and healthy food that comes straight from the farmer (Norway)
Base: 1,000 internet users aged 16+ per country in Sweden, Finland Source: Lightspeed/Mintel, Mintel GNPD
A third of Swedish and Finnish, 37% of Danish and 43% of Norwegian consumers say, after the COVID-19 pandemic subsides, they'll try to plan meals ahead to make use of all ingredients and avoid waste.
In Sweden, Karma connects surplus food from restaurants and grocery stores with hungry consumers via the Karma app.
Rema 1000 Stop Madspild Daloon Odd Sized Vegetable Mini Spring Rolls comprise discarded and imperfect in appearance vegetable spring rolls that would not have been sold, in order to minimize food waste, Denmark
Svenska Sea Salt Root Vegetable Chips are made with rescued beetroot, carrots and parsnips, and are said to be part of the food waste revolution, Sweden
3 in 5 Consumers want less plastic
of consumers across Nordic markets think brands should reduce the amount of plastic packaging they use
Tine Organic Milk:
The new pack is lighter in weight having one less layer, it does not have a screw cap, contains less plastic, and causes lower carbon footprint than common carton, Norway
Lantmännen Durum Wheat Hot Dog Buns now feature 21% less plastic, which is said to save 60 tonnes of plastic annually, and 121 tonnes CO2 emissions, Sweden
Consumers are putting the responsibility for recycling squarely on the shoulders of brand owners.
56%
of Swedish consumers say food and drink brands should use packaging that can be recycled
Source: Lightspeed/Mintel
of Finnish consumers say food and drink brands should use more recycled material when making packaging
of Danish consumers say food and drink brands should make it easier to recycle their packaging
45%
Base: 1,000 internet users aged 16+ per country in Sweden, Finland, Denmark
been repackaged in a 1L pack made from 50% recycled plastic, Denmark
In the longer run, brands will have to come up with suitable alternatives to plastic that have same or similar advantages (light weight, inexpensive production, protecting the product and holding it fresh).
Chew Folk Peppermint Natural Chewing Gum retails in a 100% biodegradable pack: "You're never too small to make a difference, said the plastic-free chewing gum", Sweden
Base: 1,000 internet users aged 16+ per country
Faroe Islands 14 September 2021
This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements.
No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person's officers or employees or advisors accept any liability whatsoever arising directly or indirectly from the use of this document.
4th Annual Sustainability Report is available on our website
| Healthy Business | Healthy People | Healthy Salmon | Healthy Environment | Healthy Communities | |
|---|---|---|---|---|---|
| STRATEGIC PRIORITY |
To grow efficiently and responsibly |
To be a preferred employer | To exceed leading standards | To minimise our environmental impact | To create shared value |
| $\blacksquare$ 2020 PERFORMANCE AGAINST OUR 2020 COMMITMENTS $\bullet\bullet\bullet$ |
• Have zero cases of noncompliance • Have customer net promoter score (NPS) of 9 out of 10 or above $\cdot$ Invest in a new biogas plant $\bullet$ |
• Renew our employee strategy $\cdot$ Launch an employee engagement survey • Have zero fatalities |
• Maintain our high omega-3 levels $\bullet$ • Maintain high customer satisfaction with $\bullet$ product quality • Reduce fish mortality to 6% • Have ASC certification across all sites (end of 2020 GSI goal) • Further develop and implement non- medicinal treatments with high focus on fish welfare • Have zero fish escapes |
• Further optimise feed distribution • Continue phasing out copper-treated nets • Implement a sustainable feed policy |
• Set up a new 'Healthy Living' Fund • Implement stakeholder engagement plan • Implement a new community investment plan |
| See page 22 for more details | See page 28 for more details | See page 40 for more details | See page 54 for more details | See page 68 for more details | |
| 2023 GOALS | • Have zero cases of non- compliance • Actively engage customers in waste reduction • Maintain high NPS and customer satisfaction with quality scores • Update procurement policy and supplier code of conduct • Influence the improvement of aquaculture practices • Extend ISO9001 standard certification • Focus on producing salmon from own unique breed |
• Have industry-leading employee engagement scores • Launch internal sustainable behavior campaign • Maintain gender diversity in senior positions • Reduce absence rate by 10% • Become certified against ISO45001 standard • Reduce LTA to zero • Have zero fatalities |
• Increase smolt size to 500g • Maintain our high omega-3 levels · Zero antibiotica use • Maintain salmon survival rate at 94% or above • Increase research to optimise fish welfare and product quality • Maintain industry leading approach to animal welfare • Maintain ASC certification, BAP certification or similar for all Bakkafrost salmon |
• By 2030 reduce by 50% the scope 1 & 2 CO2 footprint in the Faroes • Continue research into sustainable feed ingredients • Investigate new sustainable marine sources for fishmeal • Optimise feed strategy to maintain industry leading FCR • Achieve ISO14001 environmental standard certification in the Faroe Islands, already in place in Scotland • Zero fish escapes • Measurably reduce environmental impact from packaging • Explore innovative waste streams at the new biogas plant • Over 97% water recirculation rate in hatcheries |
• Actively educate key stakeholders on the benefits of salmon aquaculture • Increase collaboration with key stakeholders to achieve the Healthy Living Plan · Increase transparency on local value creation • Continue 10m DKK 3yr investment in Healthy Living Fund in the Faroe Islands • Continue investment in Community Fund in Scotland |
| (SDGs | • SDG 2 Zero Hunger • SDG 7 Affordable and Clean Energy • SDG 8 Decent Work and Economic Growth • SDG 9 Industry, Innovation, and Infrastructure |
• SDG 5 Gender Equality • SDG 8 Decent Work and Economic Growth |
• SDG 2 Zero Hunger • SDG 6 Clean Water and Sanitation • SDG 14 Life Below Water • SDG 17 Partnerships for the Goals |
• SDG 6 Clean Water and Sanitation • SDG 7 Affordable and Clean Energy • SDG 9 Industry, Innovation, and Infrastructure • SDG 12 Responsible Consumption and Production • SDG 13 Climate Action • SDG 14 Life Below Water • SDG 15 Life on Land |
• SDG 8 Decent Work and Economic Growth • SDG 17 Partnerships for the Goals |
| Healthy Business | $\textbf{C}^{\text{g}}$ Healthy People |
Healthy Salmon | Healthy Environment | Healthy Communities | |
|---|---|---|---|---|---|
| STRATEGIC PRIORITY |
To grow efficiently and responsibly |
To be a preferred employer | To exceed leading standards | To minimise our environmental impact | To create shared value |
| $\binom{1}{1}$ 2020 PERFORMANCE AGAINST OUR 2020 COMMITMENTS |
• Have zero cases of $\bullet$ noncompliance • Have customer net promoter score (NPS) of 9 out of 10 or above $\cdot$ Invest in a new biogas plant |
• Renew our employee strategy • Launch an employee engagement survey · Have zero fatalities |
• Maintain our high omega-3 levels • Maintain high customer satisfaction with product quality • Reduce fish mortality to 6% • Have ASC certification across all sites (end of 2020 GSI goal) • Further develop and implement non- $\bullet$ medicinal treatments with high focus on fish welfare • Have zero fish escapes |
• Further optimise feed distribution • Continue phasing out copper-treated nets • Implement a sustainable feed policy |
• Set up a new 'Healthy Living' Fund • Implement stakeholder engagement plan • Implement a new community investment plan |
| See page 22 for more details | See page 28 for more details | See page 40 for more details | See page 54 for more details | See page 68 for more details |
| Healthy Business | Healthy People | Healthy Salmon | Healthy Environment | Healthy Communities | |
|---|---|---|---|---|---|
| STRATEGIC PRIORITY |
To grow efficiently and responsibly |
To be a preferred employer | To exceed leading standards | To minimise our environmental impact | To create shared value |
| 3 2023 GOALS | • Have zero cases of non- compliance • Actively engage customers in waste reduction • Maintain high NPS and customer satisfaction with quality scores • Update procurement policy and supplier code of conduct • Influence the improvement of aquaculture practices • Extend ISO9001 standard certification • Focus on producing salmon from own unique breed |
• Have industry-leading employee engagement scores • Launch internal sustainable behavior campaign • Maintain gender diversity in senior positions • Reduce absence rate by 10% • Become certified against ISO45001 standard • Reduce LTA to zero • Have zero fatalities |
• Increase smolt size to 500g • Maintain our high omega-3 levels • Zero antibiotica use • Maintain salmon survival rate at 94% or above • Increase research to optimise fish welfare and product quality • Maintain industry leading approach to animal welfare • Maintain ASC certification. BAP certification or similar for all Bakkafrost salmon |
• By 2030 reduce by 50% the scope 1 & 2 CO2 footprint in the Faroes • Continue research into sustainable feed ingredients • Investigate new sustainable marine sources for fishmeal • Optimise feed strategy to maintain industry leading FCR • Achieve ISO14001 environmental standard certification in the Faroe Islands, already in place in Scotland • Zero fish escapes • Measurably reduce environmental impact from packaging • Explore innovative waste streams at the new biogas -plant • Over 97% water recirculation rate in hatcheries |
• Actively educate key stakeholders on the benefits of salmon aquaculture • Increase collaboration with key stakeholders to achieve the Healthy Living Plan • Increase transparency on local value creation • Continue 10m DKK 3yr investment in Healthy Living Fund in the Faroe Islands • Continue investment in Community Fund in Scotland |
Bakkafrost's scope 1 & 2 emissions account for 28% of the total GHG emissions.
Scope 3 emissions account for 72% of Bakkafrost's emissions
Bakkafrost has chosen to continue a high inclusion of marine content in our feed, as this is a more sustainable approach for our operations given our location.
Fisheries in the North Atlantic, primarily within Faroese waters, transparent supply chain, low demand on freshwater and land compared to imported plant proteins, reduced transportation, supporting circular economy, all off cuts purchased in the Faroes Island, positive economic impact for the Faroese community, increased nutritional value in the feed, high in omega 3 & fishmeal with a diet closer to the natural diet of wild salmon Low FCR, Good fishhealth.
The plant proteins and oils in our feed are all non-GMO, all soybeans are Pro-Terra certified and we do not use of palm oil
Reducing the scope 3 emission via consumer behaviour.
We will help make sustainable decision-making easier for consumers by adding environmental data, CO2e pr kg product, available on our packaging.
In cooperation with our customers we want to increase the demand for sustainable salmon and support the shift to a more environmental friendly diet, e.g. our new salmon burger.
Develop more recipes with low carbon cooking methods and recipes with a lower total amount of CO2.
By replacing a traditional burger with a salmon burger, you can cut around 75% of your carbon footprint.
The wealthiest 20 per cent of the world's population account for 80 per cent of consumption of global resources
Distributed on:
Travel 1 tons, Services 1 tons, Food & drink 3 tons, Electricity, heat, etc. 3 ton, Shopping 4 tons
Worlds total average around 6 tons.
According to UN the average emissions need to be down to 2 tons per person by 2050 (4 tons by 2030)
Only 0.5% of the earth's water is available fresh water.
Globally 70% of freshwater is used for agriculture. With a growing population we all need to share this small amount of
freshwater.
1 person drinks
2 to 4 liter of water per day
1 person eats
2,000 to 5,000 liters
of virtual water embedded in food per day
Source: Menu.pdf (waterfootprint.org) 20
NET ZERO BY 2050
| Norsk Hydro $A+$ |
Kongsberg Automotive | B. | Fjordkraft Holding | D. |
|---|---|---|---|---|
| Yara International $A+$ |
Kværner | B | Norwegian Air Shuttle | D |
| Aker Solutions A |
Norske Skog | B. | Norwegian Finans Holding | D. |
| Borregaard $\mathbf{A}$ |
Norwegian Property | B. | Ocean Yield | D. |
| A Entra |
Shelf Drilling | B. | Sbanken | D |
| $\mathbf{A}$ Equinor |
SpareBank 1 Nord-Norge | B. | Selvaag Bolig | D |
| $\mathsf{A}$ Europris |
SpareBank 1 SMN | B. | SpareBank 1 Ringerike Hadeland | D |
| Gjensidige Forsikring $\mathsf{A}$ |
Sparebanken Vest | B. | SpareBank 1 Østfold Akershus | D |
| Grieg Seafood $\mathsf{A}$ |
Subsea 7 | B. | Sparebanken Møre | D |
| Mowi $\mathsf{A}$ |
TietoEVRY | B. | Axactor | E. |
| Orkla $\mathsf{A}$ |
XXI | B. | B2Holding | $\mathsf{E}\hspace{-.10em}$ |
| Scatec Solar $\mathbf{A}$ |
Golden Ocean Group | $B -$ | Bonheur | $\mathsf E$ |
| Telenor $\mathsf{A}$ |
Norway Royal Salmon | $B -$ | Bouvet | $\mathsf{E}$ |
| Aker BP A- |
Wilh, Wilhelmsen Holding | $B -$ | Crayon Group Holding | $\mathsf E$ |
| $A -$ Atea |
Avance Gas Holding | $\mathsf{C}$ | DNO | $\mathsf{E}\,$ |
| Bakkafrost | $A - D$ Borr Drilling |
$\mathsf{C}$ | Medistim | $\mathsf{E}$ |
| DNB $A-$ |
BW LPG | $\mathsf{C}$ | Norwegian Energy Company | $\mathsf E$ |
| Kongsberg Gruppen A- |
FLEX LNG | $\mathsf{C}$ | NTS | E |
| Lerøy Seafood Group $A-$ |
Frontline | $\mathsf{C}$ | Olav Thon Eiendomsselskap | $\mathsf E$ |
| Nordic Semiconductor A- |
Hexagon Composites | $\mathsf{C}$ | PCI biotech | $\mathsf{E}$ |
| SalMar $A-$ |
NRC Group | $\mathsf{C}$ | Protector Forsikring | $\mathsf{E}$ |
| Schibsted $A-$ |
Odfiell Drilling | $\overline{C}$ | RAK Petroleum | E |
| SpareBank 1 Østlandet A- |
PGS | $\mathsf{C}$ | Salmones Camanchaca | $\mathsf E$ |
| Storebrand $A-$ |
SATS | $\mathsf{C}$ | Self Storage Group | $\mathsf E$ |
| TGS-NOPEC Geophysical Company $A-$ |
SpareBank 1 BV | $\mathsf{C}$ | Solon Eiendom | $\mathsf{E}$ |
| Veidekke $A-$ |
Stolt-Nielsen | $\mathsf{C}$ | VoW (Scanship Holding) | $\mathsf E$ |
| Elkem $B +$ |
Tomra Systems | $\mathsf{C}$ | Komplett Bank | $\mathsf F$ |
| SpareBank 1 SR-Bank $B +$ |
Wallenius Wilhelmsen | $\mathsf{C}$ | NEL | $\mathsf F$ |
| Adevinta B |
Aker | D. | Northern Drilling | $\mathsf F$ |
| AF Gruppen B. |
AKVA Group | D | Otello Corporation | $\mathsf F$ |
| B. Akastor |
Arcus | D | Pareto Bank | Æ. |
| Austevoll Seafood B. |
Arendals Fossekompani | D | Treasure | F |
| BW Offshore Limited B. |
Data Respons | D | ||
| Höegh LNG Holdings B. |
Fjord1 | D |
Faroe Islands 14 September 2021
This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements.
No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information 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 directly or indirectly from the use of this document.
Note: Bakkafrost takes no responsibility for the accuracy or correct interpretation of the collected estimates listed above. The purpose of the table is to generally illustrate return dynamics of projects requiring larger capital investments.
| Example, 10 ktonnes (HOG) marginal output | Conventional farming method | Offshore | Onshore | ||
|---|---|---|---|---|---|
| Purchasing | |||||
| Using idle licence capacity |
licence capacity (Norway) |
Using idle licence capacity |
|||
| Smolt size | 100g | 100g | 500g | 500g | 500g |
| Onshore (months) Conventional seawater (months) Structures for harsh environment |
12 18 |
12 18 |
16 12 |
16 7 5 |
26 |
| Total | 30 | 30 | 28 | 28 | 26 |
| Licence cost (MNOK) (1) | 0 | 1,360 | 0 | n.a. (2) | n.a. |
| Marginal investment on shore (MNOK) Marginal investment seawater (conventional) (MNOK) |
50 80 |
50 80 |
350 80 |
350 | 2,000 (3) |
| Marginal investment harsh environment structure (MNOK) Total marginal investment excl. working capital, vessels etc. |
130 | 1,490 | 430 | 1,000 (4) 1,350 |
2,000 |
| Price example | 60 | 60 | 60 | 60 | 60 (5) |
| Cost example | 40 | 40 | 40 | 37 (6) | 45 (5) |
| Implied marginal EBIT | 200 | 200 | 200 | 230 | 150 |
| Implied marginal return | 154% | 13% | 47% | 17% | 8% |
(1) Based on average auction price in Norway
(2) No basis for assumption offshore licence, assuming no increase in conventional MAB (stand alone project)
(3) Source: Broker research
(4) Assumed cost of structure required for net increase of 10k tonnes (HOG) after adjustment for reduced harvest in conventional farming
(5) Recalculated to HOG in Box Norway, cost estimate assuming scale, high utilisation and stable biology
(6) Public estimate from industry player testing structure, presumably exluding depreciation of farming structure and additional costs of servicing offshore
Note: Bakkafrost takes no responsibility for the accuracy or correct interpretation of the collected estimates listed above. The purpose of the table is to generally illustrate return dynamics of projects requiring larger capital investments.
| Vessel | Type | Capacity (m3) | Main tasks |
|---|---|---|---|
| Hans á Bakka | Wellboat | 3,000 | Harvest FW treatments |
| Martin | FSV | N/A | Delousing (Optilice & FLS), Net cleaning, Cable laying, towing |
| Róland | FSV | 1,000 | Delousing (Optilice), Net cleaning, Cable laying, towing, emergency mort. |
| Bakkanes | FSV | 1,000 | Delousing (FLS), Net cleaning, Cable laying, towing, emergency mort. |
| Víkingur | Wellboat | 240 | Live fish carrier (smolt) |
| Stígabrúgv | Wellboat | 325 | Live fish carrier (smolt) |
| Vesthav | Wellboat | 650 | Live fish carrier (smolt + harvest) |
| Bakkafossur | Wellboat | 7,000 | Live fish carrier (smolt + harvest), FW treatments, FW production |
Faroe Islands 14 September 2021
2
Applecross
West Strome
CAPACITY / CAPABILITY
To create long term sustainable growth focussed on the principles of: Simplify - Strengthen - Growth
Water 90% reduction of use vs current
Recycled Materials Batching plant on site saves 130,000 km road miles 4,000 tonnes of rubble for subbase
Waste Reduced to 90% dry matter Reduce solids from 10 T/day to 0.35T/day, Saves 260 trucks/year 96% waste reduction
Heat Recovery Salt Water Heat Exchanger Reduces heat pump energy Saving 400kW/hr
Power Upgrade substation to 33kv Incoming power 3.4MW for supply security Power factor correction 10% energy reduction
Production increase to 8m smolt @ 500g
Production at 50kT by 2026
Survivability, health and efficiencies of scale transforms cost per kg
Mean weight increase to 5kg+
| No.1 | |||
|---|---|---|---|
| Capability Capacity |
RAS FW Treatment One Team + |
50kT Survivability Mean Weights |
|
| Control | Processing Vessels Brands |
Feed Conversion Quality Value |
EBIT/kg ESG Animal Welfare Employer of Choice Growth |
Bakkafrost presentation A world-class company in the salmon industry
Faroe Islands 14 September 2021
This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements.
No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information 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 directly or indirectly from the use of this document.
HEADLINE 1 (ARIAL BOLD 16)
HEADLINE 2 (ARIAL 14)
An agreement on total allowable catches for Northeast Atlantic mackerel, Norwegian Spring Spawning (Atlanto-scandian) herring, and Northeast Atlantic blue whiting in line with scientific advice,
A long-term science-based management agreement.
FISH MEAL, OIL AND SALMON FEED MSC CERTIFICATION BLUE WHITING
FISH MEAL, OIL AND SALMON FEED
27
Faroe Islands 14 September 2021
This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information 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 directly or indirectly from the use of this document.
Well-placed to capitalise on:
| Raised, Hand Cured and Freshly Smoked on the Hebridean Islands of Scotland We hand cure and freshly smoke only Native Hebridean Salmon, born and sustainably raised on the Hebridean Islands of Scotland. These award winning salmon are prized by the world's finest chefs BLE 01 NORTH UIST for their firm texture and outstanding flavour. BLE OF Fresh fillets are hand cured by skilled Smoke Masters using our 'Traditional Island Recipe'. Cured fillets are then smoked in pebble lined kilns using wood shavings of aged Scotch Whisky barrels. Naturally rich in Omega 3, Native Hebridean Smoked Salmon offer a unique fresh taste of the Scottish Hebridean Islands. www.nativehebrideansmoked.com PRODUCT OF SCOTLAND X Nutrition Facts Ingredients: Native Hebridean Farmed Scottish Salmon 2 Servings per package. Serving size 2oz, 2 slices (Salmo salar) (Fish) (97%), Sea Salt. Allengens: For allengens see ingredients in bold. Storage: Keep refrigerated below 38°F. Once opened consume within 3 days. Do nat exceed the Use by Date. Amount per serving 106 This product is suitable for home freezing. Calories Warning: Although all care has been taken to remove N Dally Value small bones, some may remain. Total Fat 6g 8% PRODUCED ON THE HEBRIDES BY Saturated Fat 2g 10% THE SCOTTISH SALMON COMPANY Trans Fat Og 28 Drumsheugh Gardens, Edinburgh, EH3 7RN, Scotland, UK Cholesterol 32mg 11% 33% Sodium 754mg 0% Total Carbohydrates Og 0% Dietary Fiber 0g $O\%$ Total Sugars 0g $O\%$ Includes Added Sugars 0g 28% Protein 14g Vitamin D 4mcg 20% 0% Calcium 4mg 0% Iron Omg 6% Potassium 294mg The % Daily Value (DV) tells you how much a nubtent in a serving of food contributes to a daily diet. 2,000 calories a day Contains 1.0g of Ornega 3 fatty acids per serving. 5 |
'NATIVE HEBRIDEAN SMOKED SCOTTISH SALMON Raised, Hand Cured and Freshly Smoked on the Hebridean Islands of Scotland |
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| Image Front View from Dalbeg, Isle of Lewis Image Back: "Machair" unique dune grassland, Pabay Sound ōì (Cadas Phabaight Valtos, Isle |
Net weight: See reverse |
Prototype of Sous Vide consumer product
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Faroe Islands 14 September 2021
This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements.
No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person's officers or employees or advisors accept any liability whatsoever arising directly or indirectly from the use of this document.
STROND: 500G SMOLT PLANT (8 MILLION P.A.)
| Hatchery | Water capacity (m3) |
Production capacity (tons/year) |
|
|---|---|---|---|
| S03 Norðtoftir | 5.150 | 649 | |
| S04 Húsar | 1.350 | 170 | |
| 2021 | S08 Gjógv | 1.260 | 159 |
| S16 Glyvradalur | 1.537 | 194 | |
| S21 Viðareiði | 11.248 | 1.417 | |
| S24 Strond | 29.000 | 3.654 | |
| Total | 49.545 | 6.243 |
| Hatchery | Water capacity (m3) |
Production capacity (tons/year) |
|
|---|---|---|---|
| S03 Norðtoftir | 5.150 | 680 | |
| S04 Húsar | 1.350 | 178 | |
| 2022 | S08 Gjógv | 1.260 | 166 |
| S16 Glyvradalur | 1.537 | 203 | |
| S21 Viðareiði | 12.568 | 1.659 | |
| S24 Strond | 29.000 | 3.828 | |
| Total | 50.865 | 6.714 |
S03 Norðtoftir 17.150 2.264 S04 Húsar 1.350 178 S08 Gjógv 1.260 166 S16 Glyvradalur 14.450 1.907 S21 Viðareiði 12.568 1.659 S24 Strond 29.000 3.828 Total 75.778 10.003
Production capacity
(tons/year)
Hatchery Water capacity (m3)
2023
| Hatchery | Water capacity | Production capacity |
|---|---|---|
| (m3) | (tons/year) | |
| S03 Norðtoftir | 17.150 | 2.470 |
| S04 Húsar | 1.350 | 194 |
| S08 Gjógv | 1.260 | 181 |
| S16 Glyvradalur | 14.450 | 2.081 |
| S21 Viðareiði | 12.568 | 1.810 |
| S24 Strond | 29.000 | 4.176 |
| Total | 75.778 | 10.912 |
| 2024 | S08 Gjógv | 1.260 | 181 |
|---|---|---|---|
| S16 Glyvradalur | 14.450 | 2.081 | |
| S21 Viðareiði | 12.568 | 1.810 | |
| S24 Strond | 29.000 | 4.176 | |
| Total | 75.778 | 10.912 | |
| Hatchery | Water capacity | Production capacity | |
| (m3) | (tons/year) | ||
| S03 Norðtoftir | 17.150 | 2.264 | |
| S04 Húsar | 1.350 | 178 | |
| 2025 | S08 Gjógv | 1.260 | 166 |
| S16 Glyvradalur | 14.450 | 1.907 | |
| S21 Viðareiði | 12.568 | 1.659 | |
| S24 Strond | 29.000 | 3.828 | |
| S25 Ónavík | 9.860 | 1.302 | |
| Total | 85.638 | 11.304 | |
| Hatchery | Water capacity | Production capacity | |
| (m3) | (tons/year) | ||
| S03 Norðtoftir | 17.150 | 2.470 | |
| S04 Húsar | 1.350 | 194 | |
| 2026 | S08 Gjógv | 1.260 | 181 |
| Hatchery | Water capacity | Production capacity | |
|---|---|---|---|
| (m3) | (tons/year) | ||
| S03 Norðtoftir | 17.150 | 2.470 | |
| S04 Húsar | 1.350 | 194 | |
| S08 Gjógv | 1.260 | 181 | |
| S16 Glyvradalur | 14.450 | 2.081 | |
| S21 Viðareiði | 12.568 | 1.810 | |
| S24 Strond | 29.000 | 4.176 | |
| S25 Ónavík | 9.860 | 1.420 | |
| Total | 85.638 | 12.332 |
90d mortality falling as our smolt size has increased
45% <10% 1 – 3 years
Loch Damph FW Loch
Couldoran FT - 700m3 RAS – 500m3
Kinlochmoidart FT 220m3 RAS – 800 m3
Flow-thru 1380 m3
36,000 m3 Production capacity increase up to 10m smolt @ 500g
Scottish Provenance
Individually tested for IPN Sentinel populations
DNA assisted markers for family identification
Multipliers speed up genetic improvement
.
Next goal: Sea lice resistance
Bakkafrost is building a new large broodstock facility in the Faroe Islands with annual production of 70 million eggs
Building tools?
Free accounts include 100 API calls/year for testing.
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