Bakkafrost P/f

Investor Presentation • Nov 5, 2019

Q3 2019

BAKKAFROST GROUP Oslo 5 November 2019

DISCLAIMER

• 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.

SUMMARY OF Q3 2019

• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

Lambavík, East of Eysturoy, Faroe Islands

HIGHLIGHTS

	Q Q H t d 1 2 9 3 8 t i 3 2 0 1 9 ( 7, 2 1 7 t i 3 2 0 1 8 ) a r e s e g n g n  v w w ,
O t i p e r a o n	F d l f 3 3, 8 4 i Q 3 2 0 1 9 ( 2 3, 4 6 8 i Q 3 2 0 1 8 ) 7 t t  e e s a e s o o n n e s n o n n e s n
	Q Q R t i l h f 1 7, 8 4 5 t i 3 2 0 1 9 ( 7, 4 9 6 t i 3 2 0 1 8 ) a m a e r a p r c a s e o o n n e s n o n n e s n  w u
R d e v e n u e s a n	Q Q R f D K K 9 9 6 i l l i i 3 2 0 1 9 ( D K K 6 2 2 i l l i i 3 2 0 1 8 ) e e n e s o m o n n m o n n  v u
O t i l E B I T p e r a o n a	O i l E B I T ** f D K K 3 0 3 i l l i i Q 3 2 0 1 9 ( D K K 1 6 8 i l l i i Q 3 2 0 1 8 ) t  p e r a o n a o m o n n m o n n
C h F l a s o w	C h f l f i f D K K 9 i l l i i Q 3 2 0 1 9 ( D K K 3 2 4 i l l i i Q 3 2 0 1 8 ) t 7 7  a s o w r o m o p e r a o n s o m o n n m o n n
S t e g m e n s	P i i i l E B I T f l l t t t  o s v e o p e r a o n a o r a s e g m e n s

*) Including internal sales of 26,156 tonnes in Q3 2019 (20,783 tonnes in Q3 2018)

**) EBIT aligned for fair value adjustments of biomass, onerous contracts provisions, income from associates and revenue tax

SUMMARY OF THE QUARTER

Positive margin in all segments

• Farming/VAP margin increased: 26.25 NOK/kg in Q3 2019 vs. 25.34 NOK/kg in Q3 2018

• VAP margin increased: 9.23 NOK/kg in Q3 2019 vs.2.49 NOK/kg in Q3 2018

• Farming margin decreased: 23.61 NOK/kg in Q3 2019 vs. 24.85 NOK/kg in Q3 2018

• FOF margin decreased: 19.5% in Q3 2019 vs. 11.7% in Q3 2018

Group Operational EBIT was DKK 303 million in Q3 2019, compared to DKK 168 million in Q3 2018

( D K K i l l io ) m n	Q 3 2 0 1 9	Q 3 2 0 1 8	D 2 Y T 0 1 9	D 2 Y T 0 1 8
O ing t p er a re ve nu e	9 9 6	6 2 2	2, 9 0 6	2, 4 2 7
O t io l E B I T D A p er a na	3 3 7	2 2 1	1, 0 9 1	9 9 2
O t io l E B I T p er a na	3 0 3	1 6 8	9 1 0	8 4 4
Pr f i t fo t he io d o r p er	1 8 1	3 5 6	5 8 2	9 6 7
O t io l E B I T D A in p er a na m ar g	3 4 2 % 7.	3 6 1 % 5.	3 3 % 7. 5	4 0. 8 % 7
O t io l E B I T in p er a na m ar g	3 0. 4 6 %	2 7. 0 7 %	3 1. 3 1 %	3 4. 7 9 %
O / ( ) ( O ) t io l E B I T Kg Fa in N K p er a na rm g	2 3. 6 1	2 4. 8 5	2 5. 4 9	3 0. 2 8
O / ( ) t io l E B I T Kg Fa in d V A P p er a na rm g an ( O ) N K	2 6. 2 5	2 5. 3 4	2 6. 3 9	2 9. 2 5
O t io l E B I T / Kg ( V A P ) ( N O K ) p er a na	9. 2 3	2. 4 9	2. 8 5	-6 0 1
( -O ) E B I T D A in F is hm l, i l a d Fe d m ar g ea n e	1 9. 5 3 %	1 1. 6 9 %	2 0. 7 6 %	1 9. 7 7 %

• SUMMARY OF Q3 2019
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

MARKETS & SALES

Sales to Eastern Europe decreased significantly while all other markets increased

• EU market increased from 27% in Q3 2018 to 45% in Q3 2019
• USA increased from 18% to 23%
• Asia increased from 23% to 24%
• Eastern Europe decreased from 32% to 8%
• Harvest volumes used in the VAP segment were 29% in Q3 2019, compared to 20% in Q3 2018

T t l l f l o a s a e s o s a m o n b k t m a r e s y	Q 3 2 0 1 9	Q 3 2 0 1 8	M 9 2 0 1 9	M 9 2 0 1 8
E U	4 5 %	2 7 %	4 6 %	2 9 %
U S A	2 3 %	1 8 %	2 4 %	1 6 %
As ia	2 4 %	2 3 %	2 5 %	2 3 %
Ea te Eu s rn ro p e	8 %	3 2 %	5 %	3 2 %

F h l l b r e s s a m o n o n y y k t m a r e s	Q 3 2 0 1 9	Q 3 2 0 1 8	M 9 2 0 1 9	M 9 2 0 1 8
E U	2 4 %	1 9 %	2 6 %	2 1 %
U S A	3 2 %	1 8 %	3 2 %	1 6 %
As ia	3 4 %	2 6 %	3 6 %	2 6 %
Ea Eu te s rn ro p e	1 0 %	3 % 7	6 %	3 % 7

Contract share, VAP products [% of qty]

Significantly lower prices in Q3 2019

• y/y 10% down 4.96 NOK/kg - from NOK 55.31 to NOK 50.35
• q/q 27% down 13.67 NOK/kg - from NOK 64.02 to NOK 50.35

Growth in global supply in Q3 2019

13% increased global supply in Q3 2019, compared with Q3 2018, corresponding to 70,000 tonnes

Spot prices (NASDAQ) on superior 4-5 [NOK/kg HOG]

Change in global market supply and market price

DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN

Strong supply growth in Q3 2019 vs Q3 2018

• 13% global supply growth in Q3 2019
• 15% growth in European harvest
  • Strong growth conditions in Norway
    • Enforced by advanced harvest due to biological issues
  • Strong growth and increased harvest weights in the UK
• American harvest increased by 10%
  • Chile increased harvest by 13%
    • High harvest weights, good biological performance
  • Natural variation driver for changes in North America
• Some inventory build up in Chile

Su ly De lo t p p ve p m en S U P P L Y D E V E L O P M E N T [ He ad O n G utt ed 1, 00 0 t s] on ne	Q 3 2 0 1 9 Q 3 2 0 1 9	Q 3 2 0 1 8 Q 3 2 0 1 8	C ha % ng e C h % a n g e
N o r w a y	3 2 2	2 9 0	% 1 1. 2
U K	4 5	3 6	% 2 7. 0
I l d r e a n	4	3	7. 9 %
F a r o e s	1 8	1 1	6 2. 1 %
T t l E o a u r o p e	3 9 0	3 4 0	1 4. 5 %
C h i l e	1 6 6	1 4 7	% 1 2. 7
C d a n a a	3 4	3 6	-5 3 %
U S A	6	5	2 2. 2 %
T t l A i o a m e r c a s	2 0 6	1 8 8	9. 5 %
O t h e r	2 3	1 8	3 0. 3 %
T t l ( H t d t i t ) o a a r e s e q a n v u y	6 1 9	5 4 6	1 3. 3 %
I t t n v e n o r y m o v e m e n s	-7	-4	1 % 5 7.
( S Q ) T t l l d t i t o a o u a n y	6 1 2	4 2 5	1 2. 9 %

Good momentum in most markets

• Strong demand in EU and the US
• Stable development in Russia
• Greater China
  • Improved trade relations with Norway
• ASEAN
  • Strong performance in Vietnam

Salmon markets, sold quantity (head on gutted - HOG)

	Est im ate	d v lum Q 3 c iso o es om p ar n		Est im d v lum ate o es			H 1 c iso om p ar n
Ma rke ts	Q 3 2 0 1 9 E	Q 3 2 0 1 8	Vo lum e	%	H 1 2 0 1 9	H 1 2 0 1 8	Vo lum e	%
EU	27 5, 3 0 0	24 6, 6 0 0	2 8, 7 0 0	1 2 %	45 7, 5 0 0	4 3 1, 4 0 0	2 6, 1 0 0	6 %
U S A	1 17, 0 0 5	1 0 3, 9 0 0	1 3, 6 0 0	1 3 %	2 3 0, 0 0 7	2 2 0, 2 0 0	1 0, 0 0 5	% 5
Ru ia ss	2 3, 7 0 0	2 2, 8 0 0	9 0 0	% 4	3 3, 1 0 0	4 1, 8 0 0	-8, 7 0 0	% -2 1
Jap an	1 2, 8 0 0	1 2, 8 0 0	0	0 %	25 7 0 0 ,	24 8 0 0 ,	9 0 0	4 %
Gr eat C hin er a	3 2, 0 0 0	2 9, 6 0 0	2, 4 0 0	8 %	6 6, 2 0 0	6 1, 8 0 0	4, 4 0 0	7 %
A S EA N	1 9, 3 0 0	14, 7 0 0	4, 6 0 0	3 1 %	35 0 0 0 ,	35 3 0 0 ,	-3 0 0	-1 %
Lat in A rica me	3 8, 0 0 5	3 6, 9 0 0	1, 6 0 0	4 %	8 0, 8 0 0	0 0 75 7 ,	1 0 0 5,	% 7
U kra ine	6, 0 0 0	3, 9 0 0	2, 1 0 0	% 5 4	8, 3 0 0	6, 7 0 0	1, 6 0 0	% 24
Ot he ket r m ar s	8 6, 5 0 0	7 0, 4 0 0	1 6, 1 0 0	2 3 %	1 3 6, 8 0 0	1 2 3, 8 0 0	1 3, 0 0 0	1 1 %
To ta l a ll m ke ts ar	6 1 1, 6 0 0	5 4 1, 6 0 0	7 0, 0 0 0	% 1 2. 9	1, 07 4, 1 0 0	1, 0 2 1, 5 0 0	5 2, 6 0 0	% 5. 1

Comments:

Greater China = China / Hong Kong / Taiwan (incl. estimated re‐export from Vietnam & Thailand) ASEAN = Association of Southeast Asian Nations (estimated re‐export from Vietnam & Thailand subtracted) Latin America (including both Mexico and Caribbean + domestic consumption in Chile) All figures above are in tonnes hog, and are rounded to the nearest 100 tonnes.

SHORT TERM SUPPLY OUTLOOK

Diminishing growth in global supply

• Low growth expected in Europe
  • Impact from early harvest in 2019
  • Continued high lice pressure expected in Norway
• Americas
  • Low increase in smolt release
  • Good biological performance expected

• SUMMARY OF Q3 2019
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

FARMING – HARVEST VOLUME

Harvested volumes

• The expected harvest for 2019 is 54,500 tonnes gutted weight
• Harvested volumes increased by 79% in Q3 2019, compared with Q3 2018
• The share of harvest in Q3 2019 was 28% from the North Region and 72% from the West Region
• Average weight of harvested fish increased 0.3 kg in Q3 2019 to 5.5 kg head on gutted from 5.2 kg in Q3 2018

Smolt transfer

Bakkafrost transferred 2.4 million smolts in Q3 2019 (3.3 million smolts in Q3 2018)

Seawater temperatures in the Faroe Islands

Average temperatures increased 0.15 oC in Q3 2019 – from 9.93 oC in Q3 2018 to 10.08 oC in Q3 2019

Ha Vo lu [ H O G ] t to rv es m es nn es	Q 3 2 0 1 9	Q 3 2 0 1 8	M 9 2 0 1 9	M 9 2 0 1 8
No h Re io t r g n	3, 6 5 1	6, 2 5 4	1 8, 2 5 2	2 1, 8 9 2
W Re io t es g n	9, 2 8 7	9 6 3	2 1, 0 0 2	1 0, 4 6 4
To l ta	1 2, 9 3 8	2 1 7, 7	3 9, 2 4 5	3 2, 3 6 5

Seawater Temperatures in the Faroe Islands 2003 – 2019 [°C]

Operational EBIT 65% up

• Operational EBIT increased 65% from DKK 140 million in Q3 2018 to DKK 231 million in Q3 2019
• Operational EBIT margin was 33% in Q3 2019, compared to 31% in Q3 2018
• Operating revenue increased from DKK 445 million in Q3 2018 to DKK 693 million in Q3 2019

( D K K i l l io ) m n	Q 3 2 0 1 9	Q 3 2 0 1 8	M 9 2 0 1 9	M 9 2 0 1 8
O t ing p er a re ve nu e	6 9 3	4 4 5	2, 2 0 7	1, 8 8 7
O t io l E B I T p er a na	2 3 1	1 4 0	7 6 5	7 6 1
O t io l E B I T in p er a na m ar g	% 3 3	% 3 1	% 3 5	% 4 0

Operation

• Farming operational EBIT decreased by NOK 1.24 per kg from NOK 24.85 in Q3 2018 to NOK 23.61 in Q3 2019
• Average weight West 5.79 kg and North 4.90 kg HOG
• Operational EBIT per kg in the West Region was NOK 26.24 and in the North Region NOK 16.93 in Q3 2019
• The biological performance on harvested fish was very good from West Region

Margin - EBIT per kg total harvested quantity [NOK/kg]

( O / ) N K k g	Q 3 2 0 1 9
	N t h o r R i e g o n	W t e s R i e g o n	F i a r m n g
O / t i l E B I T k p e r a o n a g g w	1 6. 9 3	2 6. 2 4	2 3. 6 1

Strong quarter from VAP

• Higher volumes in Q3 2019, compared to Q3 2018
• Revenue increased to DKK 217 million in Q3 2019, from DKK 69 million in Q3 2018
• Operating EBIT in Q3 2019 was DKK 26 million, compared with DKK 3 million in Q3 2018
• Operational EBIT per kg was NOK 9.23 in Q3 2019, compared to NOK 2.49 in Q3 2018
• Higher ratio of total harvested volumes used in VAP (29% in Q3 2019 vs 20% in Q3 2018)

( D K K i l l io ) m n	Q 3 2 0 1 9	Q 3 2 0 1 8	M 9 2 0 1 9	M 9 2 0 1 8
O ing t p er a re ve nu e	2 1 7	6 9	1 6 7	2 6 5
O t io l E B I T p er a na	2 6	3	2 7	-2 6
O t io l E B I T in p er a na m ar g	% 1 2	% 4	% 4	% -1 0
V A P du d lu ( ) tg p ro ce vo m es w	3, 6 9 4	1, 4 2 5	1 2, 4 1 7	1 0 5, 5

Margin - EBIT per kg total VAP produced [NOK/kg]

Strong quarter in FOF segment

• EBITDA more than doubled to DKK 94 million in Q3 2019, compared with DKK 41 million in Q3 2018
• EBITDA margin increased to 19.5% in Q3 2019, compared with 11.7% in Q3 2018
• External fishmeal sales decreased by 12% in Q3 2019, compared to Q3 2018

( D K K i l l io ) m n	Q 3 2 0 1 9	Q 3 2 0 1 8	M 9 2 0 1 9	M 9 2 0 1 8
O t ing p er a re ve nu e	4 8 4	3 5 4	1, 0 5 0	9 8 1
E B I T D A	9 4	4 1	2 1 8	1 9 4
E B I T D A in m ar g	% 1 9. 5	% 1 1. 7	% 2 0. 8	% 1 9. 8
Fe d l d ( to ) * e so nn es	3 3, 8 7 4	2 3, 4 6 8	6 9, 0 1 0	5 3, 0 6 4
F is hm l s l d l ( ) te to ea o ex rn a nn es	1 0, 2 8 8	1 1, 6 4 8	2 7, 6 4 6	3 9, 4 5 3

Good raw material sourcing in the quarter

• Havsbrún sourced 17,845 tonnes of raw material in Q3 2019, compared to 7,496 tonnes in Q3 2018
• 2018 was the second highest raw material sourcing year, since Havsbrún became part of the Bakkafrost Group

* Including sales to Bakkafrost, corresponding to 77% of feed volumes in Q3 2019 (Q3 2018: 89%)

Sourcing of raw material (tonnes)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

116,348

47,122

2012 2011 2010

70,460

MARKET CONDITIONS FEED

44% Increased feed sales

• Quantity of feed sold was 33,874 tonnes in Q3 2019, compared to 23,468 tonnes in Q3 2018
• External feed sales 187% higher in Q3 2019, compared to Q3 2018

Volumes of raw material purchase and feed sale [tonnes]

Market fluctuations

Both fishmeal and fish oil prices decreased in Q3 2019, compared to previous quarter

Fishmeal and fish oil price index in DKK (Q1 2015 = 100)

Source: Holtermann

• SUMMARY OF Q3 2019
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

GROUP PROFIT AND LOSS

• Revenue in Q3 2019 amounted to DKK 996 million, compared to DKK 622 million in Q3 2018
• Operational EBIT in Q3 2019 was higher, compared with Q3 2018, amounting to DKK 303 million (DKK 168 million)
• Fair value of biomass decreased due to lower salmon prices
• Revenue tax, recognized as cost, amounted to DKK -21 million in Q3 2019, compared to DKK -14 million in Q3 2018 (tax rate was raised from 4.5% to 5.0% from Jan 1 2019)
• Financial items amounted to DKK 2 million and taxes amounted to DKK -42 million in Q3 2019
• Profit after tax for Q3 2019 was DKK 181 million, compared to DKK 356 million in Q3 2018

( D K K i l l io ) m n	Q 3 2 0 1 9	Q 3 2 0 1 8	M 9 2 0 1 9	M 9 2 0 1 8
O t ing p er a re ve nu e	9 9 6	6 2 2	2, 9 0 6	2, 4 2 7
O t io l E B I T D A * p er a na	3 7 3	2 2 1	1, 0 9 1	9 9 2
O * t io l E B I T p er a na	3 0 3	1 6 8	9 1 0	8 4 4
Fa ir lue d j tm t o f b io log ica l a ts va a us en ss e	-7 0	2 9 3	-1 1 7	4 3 5
O tra ts ne ro us c on c	0	-1 1	0	-1 7
In fro ia te co m e m as so c s	8	-2	1 0	-2
Re ta ve nu e x	-2 1	-1 4	-8 5	-7 2
E B I T	2 2 1	4 3 4	7 1 8	1, 1 8 9
Ne t F ina ia l i te nc m s	2	-1	-7	-1 0
E B T	2 2 3	4 3 4	1 1 7	1, 1 9 7
Ta xe s	-4 2	-7 8	-1 2 9	-2 1 2
Pr f i fo he io d t t o r p er	1 8 1	3 5 6	5 8 2	9 6 7
O t io l E B I T D A in p er a na m ar g	3 7. 4 %	3 5. 6 %	3 7. 5 %	4 0. 9 %
O t io l E B I T in p er a na m ar g	% 3 0. 5	% 2 7. 1	% 3 1. 3	% 3 4. 8
O t io l E B I T / kg p er a na ( Fa in d V A P ) ( N O K ) rm g an	2 6. 2 5	2 3 4 5.	2 6. 3 9	2 9. 2 5
E B I T D A in ( f is hm l, i l a d fe d ) m ar g ea o n e	1 9. 5 %	1 1. 7 %	2 0. 8 %	1 9. 8 %

* Operational EBITDA and EBIT aligned for fair value adjustment of biomass, onerous contracts provisions, income from associates and revenue tax.

OPERATIONAL EBIT* AND EARNINGS PER SHARE

1,378

2017

1,075

YTD 2019

910 (YTD)

2018

Operational EBIT* (DKK million)

Earnings per share(DKK)

*) Operational EBIT is EBIT before fair value adjustments of biomass, onerous contracts provisions, income from associates and revenue tax

1,001

2015

1,165

11.44

2016

BALANCE SHEET

• Intangible assets amounts to DKK 390 million at the end of Q3 2019
• Investments in PPE of DKK 173 million in Q3 2019 and PPE amounts to DKK 3.2 billion
• Financial assets amount to DKK 494 million an increase of 375 million, relating to the acquisition of SSC 9.2%
• The carrying amount of biological assets amounts to DKK 1,269 million, whereof fair value adjustment amounts to DKK 265.3 million
• Inventory amounts to DKK 534 million at the end of Q3 2019
• Changes in equity consist primarily of the positive results in and paid out dividend but also affected by the emission amounting to DKK 1,716.8 million. Equity ratio is 68% at the end of Q3 2019
• NIBD is positive DKK -1,271 million at the end of Q3 2019, compared with DKK 495 million at the end of 2018

( D K K i l l io ) m n	Q 3 2 0 1 9	En d 2 0 1 8
In ta i b le ts ng as se	3 9 0	3 9 0
Pr la d ip ty t a t op er p n n eq u m en ,	3, 2 1 6	2, 8 8 4
F ina ia l a ts nc ss e	4 9 4	1 1 3
Lo -te iva b les ng rm re ce	3	9
B io log ica l a ts ss e	1, 2 6 9	1, 3 5 8
Inv to en ry	3 4 5	4 3 9
Re iva b les ce	3 5 6	2 6 9
O t he iva b les r r ec e	3 7	2 3
Ca h d h iva le ts s an ca s eq u n	2, 6 1 2	3 1 7
To ta l As ts se	8, 9 1 1	5, 8 0 3
Eq i ty u	6, 0 3 8	4, 0 7 7
De fe d ta d t he ta rre an o r xe s x	6 7 3	5 3 4
Lo in be ing de b -te te t- t ng rm re s ar	1, 3 4 0	8 1 2
O t he de b t r	1 7	0
F ina ia l de iva t ive nc r s	0	0
S ho in be ing de b t- te te t- t r rm re s ar	0	1
Ac ts d t he b les co un an o r p ay a	8 9 7	3 9 7
To l Eq i d L ia b i l i ie ta ty t u a n s	8, 9 1 1	5, 8 0 3

CASH FLOW

• Cash flow from operations amounted to DKK 779 million in Q3 2019, compared to DKK 324 million in Q3 2018
• Cash flow from investments amounted to DKK -544 million in Q3 2019, compared to DKK -164 million in Q3 2018
• Cash flow from financing is affected by paying out dividend and by the increase in share capital amounting to DKK 1,716.8 million

( D K K i l l io ) m n	Q 3 2 0 1 9	Q 3 2 0 1 8	M 9 2 0 1 9	M 9 2 0 1 8
Ca h f low fro t io s m o p er a ns	7 7 9	3 2 4	1, 1 8 2	9 7 2
Ca h f low fro inv tm ts s m es en	-5 4 4	-1 6 4	-8 0 6	-3 8 4
Ca h f low fro f ina ing s m nc	2, 0 3 5	-1 3 8	1, 9 1 9	9 1 -5
Ne ha in h t c ng e ca s	2, 2 8 9	2 2	2, 2 9 5	-3
Ca h he d f he io d t t t s a e n o p er	2, 6 1 2	3 0 6	2, 6 1 2	3 0 6
fa Un dr i l i t ies aw n c	1, 4 8 1	1, 2 0 5	1, 4 8 1	1, 2 0 5

Net interest-bearing debt

• Cash flow from operating activities decreased the NIBD with DKK 422 million in Q3 2019
• Net investments increased the NIBD with DKK 544 million in Q3 2019, whereof DKK 375 million was due to acquisition of shares in The Scottish Salmon Company.
• Change in working capital in Q3 2019 decreased the NIBD with DKK 421 million
• Cash flow from capital raise was DKK 1,717 million.

Financing end Q3 2019

• Bank facilities of EUR 200 million
• NIBD: positive DKK -1,271 million
• Undrawn loan facilities: DKK 1,481 million

Development in NIBD in DKK millions

NIBD and available funding

• SUMMARY OF Q3 2019
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

Funningsfjørður, North of Eysturoy, Faroe Islands

OUTLOOK

Market

• Global supply in Q3 2019 increased around 13%, compared to Q3 2018
• Global harvest in Q4 2019 is expected to increase 3%, compared to Q4 2018
• Global supply growth in Q4 2019 is expected to be around 3%. For 2020 the global supply growth is expected to be around 4% compared to 2019

VAP

• Contracted around 40% of expected harvest volume for Q4 2019 and 26% of 2020 harvest volume
• Bakkafrost's long-term strategy is to sell 40-50% of the harvested volumes as VAP products at fixed price contracts

Fishmeal, Oil and Feed

Feed sales are expected to be around 98,000 tonnes in 2019 and around 110,000 tonnes in 2020

Farming

• Bakkafrost expects to harvest 54,500 tonnes HOG in 2019
• Bakkafrost expects to harvest 57,000 tonnes HOG in 2020
• Bakkafrost has postponed release of 0.8 million smolts from 2019 to Q1 2020. Expected smolt release for 2019 will therefore be 12.7 million smolts, compared with 12.6 million smolts in 2018 and 9.9 million smolts in 2017
• Bakkafrost expect to release 15.0 million smolts in 2020

Business development / Investment program

• Pursuing sustainable organic growth in the Faroes
• For the remaining period 2019 – 2022 of the investment program ~ DKK 2.5 billion will be invested
• Financial flexibility enables M&A like the recent acquisition of SSC
• Bakkafrost intends to acquire 100% of SSC during Q4 2019 – financed by issue of new shares in Bakkafrost
• SUMMARY OF Q3 2019
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

ENTERING SCOTLAND

Strategic rationale

• 1. Provides access to the attractive Scotland farming region
  2. Niche and differentiated region
  3. High quality salmon from Scottish Provenance priced at a premium
• 1. Creating a differentiated global leader in premium salmon
  2. Exposure to two geographies Faroe Island and Scotland
  3. Premium brands

Gravir, Isle of Lewis in the Hebrides

3.Potential for significant improvement

Strategic

ENTERING SCOTLAND

rationale

• Scottish Salmon profitability to improve over a five-year period through transfer of best practices
• Synergies and
• Targeted investment programs
• 1. Financially attractive acquiring the business at a reasonable value multiple to the sector and Bakkafrost

Gousam, in Loch Roag, Isle of Lewis in the Hebrides

SCOTLAND SITE OVERVIEW

43 farming sites / 67,023T consent

South

• 20 sites / 29,205T consent
  • Mull and Gigha, 6 sites
  • Loch Striven and Arran, 4 sites
  • Loch Fyne, 10 sites

North

• 23 sites / 37,818T consent
  • Uist, 5 sites
  • Sky & mainland, 7 sites
  • Loch Roag, 6 sites
  • East Lewis & Harris, 5 sites

DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN

EU

USA

Japan

Russia

Others

Total (Sold Quantity)

• 7% global supply growth in 2019
• 8% growth in European harvest in 2019
• Americas harvest increased by 4% in 2019

Global Supply of Atlantic Salmon (head on gutted - HOG)

937

385

59

68

548

1,997

	2 0 1 6	2 0 1 7	2 0 1 8	2 0 1 9 E	2 0 2 0 E
No rw ay	1, 0 5 5	1, 0 8 7	1, 1 3 0	1, 1 9 3	1, 2 4 8
U K	1 4 2	1 9 5	1 3 8	1 6 6	1 6 7
Ire lan d	1 4	1 5	1 3	1 5	1 5
Fa ro es	7 1	7 2	6 4	7 5	7 9
To l Eu ta ro p e	1, 2 8 1	1, 3 2 5	1, 3 4 5	1, 4 5 0	1, 5 0 9
C h i le	0 3 5	9 0 4	9 8 5	6 3 2	6 3 5
Ca da na	1 3 1	1 2 3	1 3 2	1 2 9	1 3 1
U S A	2 0	2 0	1 7	1 8	1 6
To ta l Am ica er s	6 5 4	6 3 3	7 4 7	7 8 0	8 0 1
O t he r	6 0	7 7	7 8	9 7	1 1 6
To ta l ( So l d Qu t i ty ) an	1, 9 9 6	2, 0 3 5	2, 1 7 0	2, 3 2 7	2, 4 2 6
Su G ly t h lo ba l p p g ro w -	% ‐4	2 %	% 7	% 7	% 4
Su ly h - Eu t p p g row ro p e	‐5 %	3 %	2 %	8 %	4 %
Su ly t h - Am ica p p g row er s	‐2 %	‐3 %	1 8 %	4 %	3 %
Sa ( lm Ma ke ts he d on r a on g u	O G ) t te d H -
	2 0 1 6	2 0 1 7	2 0 1 8 E	2 0 1 9 E	2 0 2 0 E

918

402

58

70

588

2,034 952

434

54

89

641

2,170 1,016

470

55

82

704

2,327

Co ent mm s:
All fig hog ale and tho nd in uiv nts ton ure s are ‐eq usa nes
sol of Atl Sal fro h Fig d ity ic du cin ent ant ant ntr ure s rep res s qu mo n m eac pro g cou y

Source: Kontali 1,057

488

57

90

734

2,426

Q3 MARKET ENVIRONMENT

• Reduced market prices compared to Q3 2018
• Nasdaq Norway price EUR 5.0 in Q3 2019
  • 13% down vs. Q3 2018
  • Driven by exceptional supply increase
• Urner Barry East Coast price USD 8.1 per kg in Q3 2019
  • 2% down vs. Q3 2018

PRICE NORWAY

PRICE US – NORTH EAST

C C M A R K E T U R R E N Y	Q 3 2 0 1 9	Q 3 2 0 1 8	C % ha ng e
Na da No ( E U R ) s q rw ay	4. 9 9	5. 7 3	-1 3. 0 %
U B No t h Ea t U S 1 4- 1 6 l b H O G ( U S D kg ) r s p er	8. 1 4	8. 3 0	-1 9 %

D K K	Q 3 2 0 1 9	Q 3 2 0 1 8	C % ha ng e
Na da No s q rw ay	3 7. 2 2	4 2. 7 4	-1 2. 9 %
U B No t h Ea t U S 1 4- 1 6 l b H O G ( kg ) r s p er	5 4. 6 4	5 3. 2 4	2. 6 %

SUPERIOR BIOLOGY COMBINED WITH STATE OF THE ART INFRASTRUCTURE

	S O F I H M E A L, I L A N D F E E D	O O S O C B R D T K	S O M L T	S E A W A T E R	O C S S G P R E I N	/ S S G A L E M A R K E T I N
C U R R E N T C A P A C I T Y	len k ( ) Eq uiv 10 0 t to tgw a l ha @ st an nu a rve f rin in de 44 % ma e o x	No ne	l lio 12 mi @ 20 0 n gra ms	far / fjo ds 21 mi sit 17 ng es r k ( ) lt / 55 @ 10 0g tgw sm o ( ) 65 k @ 50 0g lt tgw sm o 4 l l bo ats we 2 vic ls ser e ve sse	k ( ) 13 0 im tgw pr ary k da ( ) 40 tgw sec on ry ( ) 80 k kag ing ia l ter tgw pa c ma	l les Ce Far ntr a sa oe s les f fic UK sa o e f fic US les sa o e din Bra n g
/ O N G O I N G P L A N N E D I N V E S T M E N T S	d dit ion l k ( ) A 65 tgw a l ha @ st an nu a rve de f rin in 44 % ma e x o	bre din Ow n e g pro gra mm e l l l f f fic ien Fu se su cy	mi l lio 19 @ 50 0 n gra ms	de d in fra Up str uct gra ure Fis h ati tra ort nsp on &D R	lec d din Se te up gra g, f fic ien d fun cti lity e cy an on a	/sa ket ing les init iat ive Ma r s ket tio Ma tra r pe ne n
O S P U R P E	b le h Su ina Gr sta t ow lex bi lity F i /s f fic ien lin ing E tre cy am ati Inn ov on l En vir im nta nt on me pro ve me d fet Fo o sa y	da bi lity loc l bio log A ta to p a y du di f fer Pro tia tio ct en n bra din Su ort str ate pp n g gy ( im ia l ) ter rty ma pro pe de de f l In ext pe n nce o ern a lie su pp rs l Ve ina ter ntr ry co o	b le h Su ina sta wt gro du d Re in ce ex po su re sea	k ( ) lt >7 6 @ 50 0g tgw sm o	du lity Pro ct qu a du Pro ion ct tat pre sen du di f fer tia tio Pro ct en n h mi du Fre ct s pre um pro bi lity cap a	hie Pre mi ice nt um pr ac ve me du d Re ice sit ivit t ce spo pr sen y int ain low Ma to ex po su re sin le ket g ma r s

• Entire infrastructure wholly owned and on balance sheet

DEVELOPMENT PER QUARTER

	Q 3	Q 4	Q 1	Q 2	Q 3	Q 4	Q 1	Q 2	Q 3	Q 4	Q 1	Q 2	Q 3	Q 4	Q 1	Q 2	Q 3
( D K K ) m	20 15	20 15	20 16	20 16	20 16	20 16	20 17	20 17	20 17	20 17	20 18	20 18	20 18	20 18	20 19	20 19	20 19
Re ve nu e	67 7	76 0	90 5	79 0	64 0	86 8	85 4	120 6	80 4	90 6	85 1	95 4	62 2	0 75	96 4	94 7	99 6
Op t ion l E B I T er a a	20 6	25 7	25 4	30 7	25 5	35 0	33 5	45 9	25 2	33 1	26 8	40 8	168	23 1	26 8	33 9	30 3
f / Pr i t Lo o ss	168	31 9	21 3	22 4	34 6	55 5	79	39 8	56	-22	27 2	33 9	35 6	-7	21 3	189	18 1
Ha t ( tg ) rve s w	12 98 2 ,	13 67 5 ,	10 93 4 ,	13 00 4 ,	10 66 4 ,	12 94 0 ,	13 158 ,	18 40 2 ,	11 58 5 ,	11 47 0 ,	12 23 7 ,	12 90 2 ,	7, 21 7	12 23 4 ,	13 70 7 ,	12 60 9 ,	12 93 8 ,
Op E B I T Fa ing & V A P ( N O K / kg ) rm	18 .10	21 .83	27 .55	27 .88	28 .97	32 .00	29 .40	29 .77	23 .02	29 .88	22 .92	37 .41	25 .34	21 .91	21 .99	31 .31	26 .25
Op E B I T Fa ing ( N O K / kg ) rm	17 .25	19 .67	30 .45	34 .47	34 .44	37 .70	34 .27	33 .50	23 .51	25 .76	24 .15	39 .09	24 .85	21 .56	21 .86	31 .31	23 .61
Op E B I T V A P ( N O K / kg )	2.9 5	6.0 9	-10 .03	-18 .37	-14 .15	-11 .95	-17 .62	-13 .01	-1. 08	9.5 4	-7. 10	-11 .00	2.4 9	1.5 1	0.3 7	-0. 01	9.2 3
Eq i io ty t ra u	63 %	66 %	66 %	61 %	63 %	66 %	65 %	64 %	68 %	70 %	69 %	68 %	70 %	70 %	70 %	65 %	68 %
N I B D	182	39 2	21 8	60 3	50 4	63 5	45 9	56 0	35 6	25 8	102	44 3	28 6	49 5	52 2	74 4	-1, 27 1

Revenue (mDKK)

Revenue for the Bakkafrost Group has increased from 820 mDKK in 2010 to 3.2 bDKK in 2018.

1,200 1,400 1,600

Operational EBIT (mDKK)

Operational EBIT for the Bakkafrost Group has increased from 247 mDKK in 2010 to 1.1 bDKK in 2018.

Farming margin Op. EBIT (NOK/kg)

Dividend

• Dividend for 2018 of DKK 8.25 (NOK 10.65) per share was paid out on 26 April 2019. Totalling 403.1 DKK million (NOK 520.3 million)

Dividend policy

• Competitive return through:
  • Dividends
  • Increase in the value of the equity
• Generally, Bakkafrost shall pay dividend to its shareholders
• A long-term goal is that 30–50% of EPS shall be paid out as dividend

Dividend per share in % of adj. EPS*

Dividend per share (DKK)***

* Adjusted EPS is EPS adjusted for fair value adjustments of biomass and onerous contracts provisions

** Dividend and acquisition of treasury shares

*** Dividend is paid out the following year

FAROE ISLANDS

• 18 islands – 1,387 km²
• 52,122 inhabitants (1 August 2019)
• Home rule – within the Kingdom of Denmark
• Part of the Danish monetary union, Danish krone (DKK)

Key sectors (% of wage earners, M9 2019)

• Service/public admin.: ~34%
• Private service: ~31%
• Construction: ~16%
• Fish & aquaculture: ~19%
• Unemployment rate (July 2019): 1.3%
• Total working force (July 2019): 28,147
• GDP: DKK ~20.5bn (2019e)
• GDP/capita: DKK 394,000 (2019e)
  • (Norway: DKK 463,000) (2017)

Total export of fish products (2018)

• DKK 7,487 million 11% decrease from 2017
• whereof farmed fish accounts for 45%

TAXES

• Total percent of GDP: 41.8% (2016)
• Corporate tax: 18%
• Farming revenue tax: 5.0% of revenues after 1 January 2019
  • The tax is applied as follows (IMP ~ International market price):
  • If the IMP is above DKK 36 per kilo, the tax is 5%
  • If the IMP is between DKK 32 and DKK 36 per kilo, the tax is 2.5%
  • If the IMP is lower than DKK 32 per kilo, the tax is 0.5%

Restriction on single foreign ownership of 20% in farming companies

One company may max. control 50% of licences in the Faroe Islands

Source: Hagstova Føroya

20 largest shareholders

k Ran	ldi Ho ng	Sha re	Na me	Cit ise nsh ip	Acc nt typ ou e
1	5.0 94 .62 7	8, 74 %	FO LK ET RY GD FO ND ET	NO R	Or din ary
2	4.6 15 .89 6	7, 92 %	JA CO BS EN JO HA N R EG IN ,	FR O	Or din ary
3	4.5 94 .43 7	7, 88 %	JA CO BS EN OD DV Ø R M AR ITA ,	FR O	Or din ary
4	2.2 56 .47 0	3, 87 %	DO LF IN FIN AN CIA L ( UK ) LT D	US A	Or din ary
5	1.8 07 .41 8	10% 3,	No rde a B k A bp an	DN K	No mi nee
6	1.4 22 .31 0	2, % 44	Sta Str Co te t B k a nd Tru st ee an mp	US A	No mi nee
7	1.0 06 .27 7	1, 73 %	Th e B k o f N Yo rk Me llon SA /NV an ew	BE L	No mi nee
8	1.0 03 .10 6	1, 72 %	Sta te Str t B k a nd Tru st Co ee an mp	US A	No mi nee
9	91 3.1 42	1, 57 %	Sta te Str t B k a nd Tru st Co ee an mp	US A	No mi nee
10	86 6.6 18	% 1, 49	ON DS NN PA RA PL UF 1 N.V	BE L	Or din ary
11	85 7.2 74	1, 47 %	Sta Str t B k a nd Tru Co te st ee an mp	US A	No mi nee
12	82 9.2 24	1, 42 %	JP Mo n C has e B k, N.A Lo ndo rga an n .,	GB R	No mi nee
13	80 9.6 23	1, 39 %	JP Mo n C has e B k, N.A Lo ndo rga an n .,	GB R	No mi nee
14	772 .67 3	1, 33 %	NN ( L) Glo ba l S ust ain ab le E ity qu	LU X	Or din ary
15	75 3.0 55	% 1, 29	n C JP Mo has e B k, N.A Lo ndo rga an n .,	GB R	No mi nee
16	71 9.1 56	1, 23 %	CL RS G S EA TR EA M B AN KIN .A.	LU X	No mi nee
17	664 .30 9	1, 14%	RB C I NV ES TO R S ER VIC ES TR US T	GB R	No mi nee
18	65 1.5 14	1, 12%	HA ND EL SB AN KE N N OR DE N S EL EK TIV	GB R	Or din ary
19	59 1.3 93	1, 01 %	Sta te Str t B k a nd Tru st Co ee an mp	US A	No mi nee
20	57 8.6 71	0, 99 %	SW ED BA NK R OB UR SM AB OL AG SF ON D	GB R	Or din ary
	3 0.8 07 .19 3	52, 87%	ldi of larg Ho 20 est nts ng acc ou
	5 8.2 73 .24 4 al mb of nd ing sha Tot out sta nu er res

BAKKAFROST / Q3 2019 PRESENTATION

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