Bakkafrost P/f

Earnings Release • May 7, 2018

Q1 2018

BAKKAFROST GROUP Oslo 7 May 2018

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 Q1 2018

• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

HIGHLIGHTS

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

*) Including internal sales of 13,152 tonnes in Q1 2018 (18,953 tonnes in Q1 2017)

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

SUMMARY OF THE QUARTER

The result for the Farming segment decreased due to lower salmon prices and higher costs. The VAP result was negative again, but the FOF segment had a very strong result.

• Farming/VAP margin decreased from 29.40 NOK/kg in Q1 2017 to 22.92 NOK/kg in Q1 2018
• VAP segment had a margin of -7.10 NOK/kg in Q1 2018, compared to -17.62 NOK/kg in Q1 2017
• Farming margin was 24.15 NOK/kg in Q1 2018, compared to 34.27 NOK/kg in Q1 2017
• FOF delivered a very strong margin of 28.8% in Q1 2018, compared to 16.3% in Q1 2017
• Group Operational EBIT was DKK 268 million in Q1 2018, compared to DKK 335 million in Q1 2017

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

• SUMMARY OF Q1 2018
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

MARKETS & SALES

Sales to Eastern Europe and Asia increased, and sales to EU and USA decreased in Q1 2018, compared with Q1 2017. VAP on contract was on a low level at 17%

• EU market decreased from 46% in Q1 2017 to 31% in Q1 2018
• USA decreased from 19% to 16%
• Asia increased from 13% to 21%
• Eastern Europe increased from 22% to 32%
• VAP contract share was 17% in Q1 2018, compared to 28% in Q1 2017

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 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7	2 0 1 6
E U	3 1 %	4 6 %	4 5 %	4 3 %
S U A	% 1 6	% 1 9	% 1 8	% 2 3
As ia	2 1 %	1 3 %	1 6 %	1 7 %
Ea Eu ter s n rop e	3 2 %	2 2 %	2 1 %	1 7 %

F h l l r e s s a m o n o n y b k t y m a r e s	Q 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7	2 0 1 6
E U	% 2 2	% 2 9	% 2 3	% 1 9
U S A	1 7 %	2 5 %	2 4 %	3 3 %
As ia	2 3 %	1 7 %	2 3 %	2 5 %
Ea ter Eu s n rop e	% 3 8	% 2 9	% 3 0	% 2 3

GLOBAL MARKETS

Large price increase during Q1 2018

• Exceptional high price change during Q1 2018
• Price change (low/high) of NOK 25.95 ~50% from NOK 51.90 to NOK 77.85
• y/y by 5.93 NOK/kg ~8.8% from NOK 67.07 to NOK 61.14
• q/q by 10.98 NOK/kg ~21.9% from NOK 50.16 to NOK 61.14

Increased global supply in Q1 2018

10% increased global supply in Q1 2018, compared with Q1 2017, corresponding to 45,190 tonnes

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

Change in global market supply and market price

10% supply growth in Q1 2018

• European harvest increased by 4%
• American harvest increased by 23%

6% growth from Norway

• Reduced harvest during the quarter
• Weaker productivity compared to Q4 2017
• Low temperatures caused higher mortality

Scotland low due to few individuals for harvest and low temperatures

29% growth from Chile

• Q1 2017 impacted by few individuals for harvest
• 2016 algae bloom caused high mortality
• Higher than expected harvest in Q1 2018
• Opportunistic due to high prices
• Precautionary due to algae bloom

Notes:

All figures are in hog-equivalents and thousand tonnes.

Source: Kontali

S O U P P L Y D E V E L P M E N T ( h d d H O G ) t t e a o n g u e -	Q 1 2 0 1 8	Q 1 2 0 1 7	C h a n g e %
No rw ay	2 6 3. 3	2 4 9. 3	% 5. 6
U K	3 1. 1	3 8 5.	1 3. 1 % -
Ire lan d	3. 5	2. 4	4 4. 4 %
Fa roe s	1 6. 5	1 5. 6	5. 8 %
l To Eu ta ro p e	3 1 4. 4	3 0 3. 1	3. 7 %
C h i le	1 5 1. 9	1 1 8. 1	% 2 8. 7
Ca da na	2 7. 5	2 6. 4	4. 1 %
U S A	3. 3	3. 8	1 1. 9 % -
l ica To Am ta er s	1 8 2. 7	1 4 8. 2	2 3. 3 %
O t he r	2 0. 4	1 8. 2	1 2. 4 %
To l ( Ha d i ) ta te t ty rv es q ua n	5 1 7. 5	4 6 9. 5	1 0. 2 %
Inv to ts en ry mo ve me n	0. 8 -	1. 9	1 4 2. 9 % -
l ( l d i ) To So Q ta t ty ua n	5 1 6. 7	4 7 1. 4	9. 6 %

Good growth in most markets in Q1 2018

EU performed well

• 7% growth vs. 4% growth in European harvest
• High quantities from Norway early in the quarter
• Only main market with growth in latter part of the quarter

Low growth in the US given supply

• However strong consistent growth trend
• Improved image of Chilean salmon due to reduced use of antibiotics

Russia – strong growth

Mainly driven by Chile

Greater China

• Spectacular growth
• Supply from all main origins

Positive development in other markets

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

	Es im t te a	d v lum o es	Q 1 c om p	iso Es im d v lum F Y c t te ar n a o es om p ar				iso n
Ma ke ts r	Q 1 2 0 1 8 E	Q 1 2 0 1 7	Vo lum e	%	F Y 2 0 1 7	F Y 2 0 1 6	Vo lum e	%
E U	2 1 8, 0 0 0	2 0 4, 2 0 0	1 3, 8 0 0	6. 8 %	9 1 9, 0 0 7	9 4 2, 6 0 0	2 2, 9 0 0 -	2. 4 % -
U S A	1 0 9, 1 9 0	1 0 0, 2 0 0	8, 9 9 0	9. 0 %	3 9 6, 3 0 0	3 8 0, 0 0 0	1 6, 3 0 0	4. 3 %
Ru ia ss	1 9, 5 0 0	1 4, 1 0 0	5, 4 0 0	3 8. 3 %	6 8, 5 0 0	6 9, 9 0 0	1, 4 0 0 -	2. 0 % -
Ja p an	1 3, 6 0 0	1 3, 9 0 0	3 0 0 -	2. 2 % -	7, 6 0 0 5	8, 7 0 0 5	1, 1 0 0 -	1. 9 % -
Gr C ter h ina ea	2 8, 4 0 0	2 1, 1 0 0	7, 3 0 0	% 3 4. 6	1 0 4, 6 0 0	9 5, 0 0 0	9, 6 0 0	% 1 0. 1
A S E A N	2 0, 5 0 0	2 0, 3 0 0	2 0 0	1. 0 %	8 2, 5 0 0	6 5, 0 0 0	1 7, 5 0 0	2 6. 9 %
La t in Am ica er	4 0, 3 0 0	3 4, 7 0 0	5, 6 0 0	1 6. 1 %	1 3 5, 5 0 0	1 3 7, 4 0 0	1, 9 0 0 -	1. 4 % -
U kra ine	3, 4 0 0	3, 0 0 0	4 0 0	1 3. 3 %	1 3, 6 0 0	9, 1 0 0	4, 0 0 5	4 9. % 5
O t he ke ts r m ar	6 3, 8 0 0	6 0, 0 0 0	3, 8 0 0	6. 3 %	2 5 6, 0 0 0	2 4 2, 6 0 0	1 3, 4 0 0	5. 5 %
To ta l a l l m ke ts ar	1 6, 6 9 0 5	4 1, 0 0 7 5	4 1 9 0 5,	9. 6 %	2, 0 3 4, 3 0 0	2, 0 0 0, 3 0 0	3 4, 0 0 0	1. % 7

Comments:

Greater China = China / Hong Kong / Taiwan (incl. estimated re‐export from Vietnam) ASEAN = Association of Southeast Asian Nations (estimated re‐export from Vietnam 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

• Growth rate impacted by inventory movements
• Growth in harvest likely to be instrumental for pricing
• Frozen products are materially sold through alternative channels
• Uncertainty in Chilean estimates
• Indications of higher growth in 2019

SUPPLY - TOTAL

Source: Kontali

• SUMMARY OF Q1 2018
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

Harvested volumes

• Harvested volumes decreased by 7% in Q1 2018, compared with Q1 2017
• The West Region represented 78% of the harvested volumes and the North Region the remaining 22% in Q1 2018
• Average weight of harvested fish in the quarter was 4.7 kg head on gutted

Smolt transfer

Bakkafrost transferred 3.1 million smolts in Q1 2018 (1.4 million smolts in Q1 2017)

Seawater temperatures in the Faroe Islands

Temperatures in Q1 2018 were 0.78oC down from 6.95oC in Q1 2017 to 6.17oC in Q1 2018

H V l t a r v e s o u m e s t [ H O G ] o n n e s	Q 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7	2 0 1 6
N t h R i o r e g o n	2, 7 3 6	9, 1 2 4	3 0, 2 5 1	2 4, 7 6 8
W t R i e s e g o n	9, 5 0 1	4, 0 3 4	2 4, 3 6 4	2 2, 7 7 4
T t l o a	1 2, 2 3 7	1 3, 1 5 8	5 4, 6 1 5	4 7, 5 4 2

Seawater Temperatures in the Faroe Islands 2003 – 2017 [°C]

Reduced margin at lower prices and higher production costs

• The operational EBIT decreased from DKK 373 million in Q1 2017 to DKK 228 million in Q1 2018
• Operational EBIT margin was 34% in Q1 2018, compared to 50% in Q1 2017

( D K K i l l i ) m o n	Q 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7	2 0 1 6
O t i p e r a n g r e v e n u e s	6 6 7	7 5 1	2, 9 8 7	2, 8 4 1
O i l E B I T t p e r a o n a	2 2 8	3 3 7	1, 3 0 8	1, 3 1 5
O i l E B I T i t p e r a o n a m a r g n	3 4 %	0 % 5	4 4 %	4 6 %

Farming manager Hjalgrím Svøðstein and farmers April 30th 2018 – M/S Hans á Bakka preparing for harvest of 320 tons of salmon at an average size of 6 kg on site A-72 Haraldssund

Operation

• Farming EBIT down by NOK 10.12 per kg to NOK 24.15 in Q1 2018, compared to NOK 34.27 in Q1 2017
• Difference between the North Region and the West Region in operational EBIT was NOK 11.04 per kg. The West Region had higher production costs per kg, and the North Region started harvesting later in the quarter, which resulted in higher prices. Prices increased during the quarter.

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

( O / ) N K k g	Q 1 2 0 1 8
	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 i l E B I T / k t p e r a o n a g g w	3 2. 2 7	2 1. 6 8	2 4. 1 5

Positive VAP margin negative again

• Substantial decrease in revenue by 51% to DKK 93 million in Q1 2018, from DKK 192 million in Q1 2017
• Operating EBIT in Q1 2018 was DKK -12 million, compared with DKK -53 million in Q1 2017

Higher raw material prices and lower activity in Q1 2018

The low production activity and higher salmon spot prices in Q1 2018 resulted in negative margins in the VAP segment

( ) D K K i l l i m o n	Q 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7	2 0 1 6
O t i p e r a n g r e e n e s v u	9 3	1 9 2	9 9 9	8 8 1
O t i l E B I T p e r a o n a	1 2 -	5 3 -	7 5 -	2 0 1 -
O i l E B I T i t p e r a o n a m a r g n	1 2 % -	2 8 % -	8 % -	2 3 % -
V A P d d l p r o u c e v o u m e s ( t ) g w	2, 1 1 5	3, 6 3 6	1 9, 0 6 7	1 8, 1 2 0

Margins very strong in the quarter Fishmeal, Oil and Feed

• EBITDA of DKK 86 million in Q1 2018, compared with DKK 45 million in Q1 2017
• EBITDA margin of 28.8% in Q1 2018, compared with 16.3% in Q1 2017
• Feed sales decreased, due to lower biomass in sea and lower sea temperatures in Q1 2018, compared with Q1 2017
• Strong performance due to external sales of fishmeal and fish oil

Havsbrún sourced 22% more raw material

( D K K i l l i ) m o n	Q 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7	2 0 1 6
O t i p e r a n g r e v e n u e s	3 0 0	2 7 7	1, 3 0 3	1, 1 5 8
E B I T D A	8 6	4 5	2 6 6	2 4 8
E B I T D A i m a r g n	2 8. 8 %	1 6. 3 %	2 0. % 4	2 1. % 4
F d l d ( t ) * e e s o o n n e s	1 3, 9 2 3	1 9, 8 2 7	7 8, 1 3 4	8 4, 5 8 6
F i h l l d l ( ) t t s m e a s o e x e r n a o n n e s	1 1, 3 9 9	6 3 7, 5	9, 0 0 6 5	2 3, 4 6 1

Sourcing of raw material (tonnes)

* Including sales to Bakkafrost, corresponding to ~ 94% of feed volumes in Q1 2018 (Q1 2017: 96%)

Raw material sourcing increased

in Q1 2018, compared to Q1 2017

Total feed sale

MARKET CONDITIONS FEED

Feed sales decreased

• Quantity of feed sold was 13,923 tonnes in Q1 2018, compared to 19,827 tonnes in Q1 2017
• Biomass on lower level in Q1 2018, compared to Q1 2017. At the same time the growth conditions in Q1 2017 were better than average

The market prices for marine ingredients increased again on the spot market

• Both fishmeal and fish oil prices increased in Q1 2018, compared with Q4 2017.
• Fish oil prices in Q1 2018 were on the highest level since Q1 2015
• Fishmeal prices in Q1 2018 approached 2016 price level again

Volumes of raw material purchase and feed sale [tonnes] 05,000 10,000 15,000 20,000 25,000 30,000 35,000 020,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Feed sale (tonnes) Raw material (tonnes)

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

Internal feed sale

Raw material

• SUMMARY OF Q1 2018
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

Hatchery Strond, Klaksvík under construction 29 April 2018 – Intake of first eggs expected at 20 June 2018. At full operation in 2019/2020 the hatchery is expected to produce 7 million smolts at 500 gram each.

GROUP PROFIT AND LOSS

• Revenues on nearly same level as in Q1 2017 from DKK 854 million to DKK 851 million in Q1 2018.
• Operational EBIT in Q1 2018 decreased to DKK 268 million, compared to DKK 335 million in Q1 2017
• Fair value of biomass increased due to higher salmon prices, compared to the end of last quarter, and there was no provision for onerous contracts
• Revenue tax, recognized as cost, amounted to DKK -26 million in Q1 2018, compared to DKK -30 million in Q1 2017
• Financial items amounted to DKK -19 million and taxes amounted to DKK -60 million in Q1 2018
• Profit after tax for Q1 2018 was DKK 272 million, compared to DKK 79 million in Q1 2017

( ) D K K i l l i m o n	Q 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7	2 0 1 6
O ing t p e ra re ve nu e s	8 5 1	8 5 4	3, 7 7 0	3, 2 0 3
O t io l E B I T D A * p e ra na	3 1 4	3 7 7	1, 5 6 1	1, 2 9 8
O io l E B I T * t p e ra na	2 6 8	3 3 5	1, 3 8 7	1, 1 6 5
Fa ir lu d j t t f b io lo ic l a t va e a u s m e n o g a s s e s	1 0 7	2 3 5 -	6 9 4 -	6 0 8
O t t ne ro u s c o n ra c s	0	3 0	6 7	1 6 -
In fro ia t c o m e m a s s o c e s	2	2	1 7	1 5
Re t ve nu e ax	-2 6	3 0 -	1 2 0 -	1 0 8 -
Ba dw i l l	0	0	0	1 0
E B I T	3 1 5	1 0 3	6 4 9	1, 6 4 7
Ne t F ina ia l i t nc e m s	-1 9	6 -	2 5 -	4 1 -
E B T	3 3 2	9 7	6 2 4	1, 6 3 3
Ta xe s	-6 0	1 8 -	1 1 2 -	2 9 4 -
f fo Pr i t t he io d o r p e r	2 2 7	9 7	1 1 5	1, 3 3 9
O io l E B I T D A in t p e ra na m a rg	3 6. 2 %	4 4. 2 %	4 1. 4 %	4 0. 5 %
O t io l E B I T in p e ra na m a rg	% 3 1. 5	% 3 9. 3	% 3 6. 5	% 3 6. 4
O io l E B I T / kg t ( Fa ing d V A P ) ( N O K ) p e ra na rm an	2 2. 9 2	2 9. 4 0	2 8. 2 9	2 9. 2 3
E B I T D A in ( f is hm l, - i l a d fee d ) m a rg ea o n	% 2 8. 8	% 1 6. 3	% 2 0. 4	% 2 1. 4

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

OPERATIONAL EBIT* AND EARNINGS PER SHARE

235 ²⁵⁴ 335268303 307 459206257 255 252350331

Operational EBIT* (DKK million)

1,001 1,165 1,378 268 2015 2016 2017 YTD 2018

Earnings per share (DKK)

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

BALANCE SHEET

• Intangible assets at the end of Q1 2018 are unchanged from year end 2017
• Investments in PPE of DKK 111 million in Q1 2018 and PPE amounts to DKK 2.6 billion
• Financial assets amount to DKK 79 million
• The carrying amount of biological assets amounts to DKK 1,115 million, whereof fair value adjustment amounts to DKK 294 million
• Inventory amounts to DKK 429 million at the end of Q1 2018, compared to DKK 306 million at the end of 2017
• Changes in equity because of positive results in Q1 2018. Equity ratio is 69% at the end Q1 2018
• NIBD at DKK 102 million down from DKK 258 million at end 2017

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

CASH FLOW

• Cash flow from operations on same level in Q1 2018 as in Q1 2017
• Cash flow from investments represents investments in PPE, which amounted to DKK -111 million in Q1 2018, compared to DKK - 179 million in Q1 2017
• Cash flow from financing is affected by change in interest-bearing debt

( ) D K K i l l i m o n	Q 1 2 0 1 8	Q 1 2 0 1 7	2 0 1 7	2 0 1 6
C h f l f t i a s o w r o m o p e r a o n s	3 6 8	3 6 5	1, 4 5 8	8 5 0
C h f l f i t t a s o w r o m n v e s m e n s	1 1 1 -	1 7 9 -	6 3 6 -	7 4 0 -
C f f f h l i i a s o r o m n a n c n g w	1 0 2	7 8	7 4 8 -	2 4
N h i h t e c a n g e n c a s	3 5 9	2 6 4	7 5	1 3 3
C h h d f h i d t t t a s a e e n o e p e r o	6 6 8	4 9 9	3 1 0	2 3 5
U d f i l i i t n r a w n a c e s	1, 3 8 0	8 2 6	1, 0 0 5	6 5 5

Net Interest-Bearing Debt

• Cash flow from operating activities and changes in working capital decreased the NIBD with DKK 284 million in Q1 2018
• Net investments and other in Q1 2018 increased the NIBD with DKK NIBD 127 million

16111-6 -278

Development in NIBD in DKK millions

Financing end Q1 2018

• NOK 500 million bond loan repaid in Q1 2018
• New EUR 200 million bank financing in Q1 2018
• NIBD: DKK 102 million
• Undrawn loan facilities: DKK 1,380 million

NIBD and available funding

• SUMMARY OF Q1 2018
• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

Service operation with M/S Róland in progress at farming site A-11 Hvannasund April 30th 2018

OUTLOOK

Market

• Global supply in Q1 2018 estimated to increase around 10%, compared with Q1 2017
• Global harvest increase in 2018 expected to be around 4%
• Supply growth next three quarters expected to be around 2%

Farming

• Bakkafrost expects to harvest 51,000 tonnes in 2018
• Expected total smolt release in 2018 is 13.9 million pieces, compared to 9.9 million pieces in 2017 and 11.7 million pieces in 2016
• Bakkafrost has made an agreement with Fiskaaling and the Faroese Authorities to take responsibility of the Faroese broodstock program with the option to get the genome rights in 2021

VAP

Contracted around 13% of expected harvest for the rest of 2018

Fishmeal, Oil and Feed

• Feed sales in 2018 is expected to be around 85,000 tonnes
• The new salmon fishmeal and -oil production is expected to start operation in the beginning of Q2 2018 and to have full production in the second half of 2018

Business development

• Optimizing of the value chain according to the announced investment plan continues
• Pursuing organic growth

• Financial flexibility enables M&A

• SUMMARY OF Q1 2018

• MARKETS AND SALES
• SEGMENT INFORMATION
• GROUP FINANCIALS
• OUTLOOK
• APPENDIX

DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN

4% harvest growth in 2018

• Inventory movements expected to add 2-3%
• Total supply growth of 7% in 2018
• Total supply growth of 2% in 2017

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

Salmon Markets (head on gutted - HOG)

	2 0 1 4	2 0 1 5	2 0 1 6	2 0 1 7 E	2 0 1 8 E
E U	9 1 1	9 7 4	9 4 3	9 2 0	9 6 1
U S A	3 3 6	3 8 0	3 8 0	3 9 6	4 1 8
Ja p an	8 5	4 5	9 5	8 5	9 5
Ru ia ss	1 3 1	9 4	7 0	6 8	7 4
he O t rs	5 4 8	5 7 5	5 4 9	5 9 2	6 5 9
To ta l ( So l d Q t i ty ) ua n	1, 9 8 4	2, 0 7 8	2, 0 0 0	2, 0 3 4	2, 1 7 1

Notes:

All figures are in hog-equivalents and thousand tonnes.

Figures represent sold quantity of Atlantic Salmon from each producing country

Source: Kontali

Q1 2018 MARKET ENVIRONMENT

Prices higher than last quarter, but below same quarter last year

• Reduced quantities and increasing prices during the quarter
• Nasdaq Norway price EUR 6.2 in Q1 2018
• 14% decrease, compared to Q1 2017
• 22% increase, compared to Q4 2017
• Urner Barry East coast price close to all time high
• Despite 23% quantity growth in Americas
• 4% decrease, compared to Q1 2017
• 12% increase, compared to Q4 2017

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

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

Source: Kontali

BAKKAFROST / Q1 2018 PRESENTATION

Investments will be made step by step in the relevant parts of the value chain to secure:

• Biological risk
• Efficiency
• Organic growth

INVESTMENT PROGRAMME 2016 - 2020

Investment program of DKK 2.2b from 2016 to 2020

Fishmeal, Oil & Feed (380 mDKK)

• New salmon meal and –oil plant
• New feed line to increase capacity
• Advanced feed line capabilities

Smolt (1,130 mDKK)

• Viðareiði 2016 – finalizing facility
• Strond 2018 – new facility
• New site 2019
• Upgrade existing facilities 2019-2020

Harvest/VAP Finalizing new plant (160 mDKK)

• Consolidating fragmented processing structure into one state of the art facility
• Represents large efficiency benefits
• Improves capability of extracting benefits of a premium product in the fresh category

Investment Programme 2016 – 2020 (mDKK)

Results in

• •reduced biological risk
• •opportunities for organic growth
• •better usage of offcuts from the salmon production
• •5-6 years pay back on investments

Larger smolt (PS) will reduce time of cycle in farming

• Harvest cycle every second year from the same fjords until effect from larger smolt evolves
• Smolt size will gradually increase to 500 gram by 2020
• Smolt release will gradually increase to ~14 million pcs as production cycle decreases from 24 to ~14 months (incl. fallowing period)
• Production volume will gradually increase to ~70 thousand tonnes

Farming volume – growth potential with PS (1,000 tonnes)

Smolt size on released fish (size gram) Smolt release (million pcs)

Smolt production (1,000 tonnes)

DEVELOPMENT PER QUARTER Q1 2014 – Q1 2018

( D K K ) m	Q 1 2 0 1 8	Q 4 2 0 1 7	Q 3 2 0 1 7	Q 2 2 0 1 7	Q 1 2 0 1 7	Q 4 2 0 1 6	Q 3 2 0 1 6	Q 2 2 0 1 6	Q 1 2 0 1 6	Q 4 2 0 1 5	Q 3 2 0 1 5	Q 2 2 0 1 5	Q 1 2 0 1 5	Q 4 2 0 1 4	Q 3 2 0 1 4	Q 2 2 0 1 4	Q 1 2 0 1 4
Re ve nu e	8 5 1	9 0 6	8 0 4	1, 2 0 6	8 5 4	8 6 8	6 4 0	7 9 0	9 0 5	7 6 0	6 7 7	8 0 0	6 1 3	7 5 7	5 8 4	7 1 1	6 3 1
O t io l E B I T p e ra na	2 6 8	3 3 1	2 5 2	4 5 9	3 3 5	3 5 0	2 5 5	3 0 7	2 5 4	2 5 7	2 0 6	3 0 3	2 3 5	2 2 7	2 0 9	2 1 2	1 8 6
Pr f i / Lo t o s s	2 7 2	2 2 -	6 5	3 9 8	7 9	5 5 5	3 4 7	2 2 4	2 1 3	3 1 9	1 6 8	1 9 1	1 3 2	2 2 2	2 1 1	1 2 6	8 7
Ha ( ) t t rv e s g w	1 2, 2 3 7	1 1, 4 7 0	1 1, 8 5 5	1 8, 4 0 2	1 3, 1 8 5	1 2, 9 4 0	1 0, 6 6 4	1 3, 0 0 4	1 0, 9 3 4	1 3, 6 7 5	1 2, 9 8 2	1 4, 1 8 2	9, 7 2 6	1 2, 6 1 5	1 0, 8 8 1	1 1, 2 1 2	9, 2 6 9
O E B I T Fa ing & V A P p. rm ( N O K / kg )	2 2. 6 0	2 9. 8 8	2 3. 0 2	2 9. 7 7	2 9. 4 0	3 2. 0 0	2 8. 9 7	2 8 8 7.	2 7. 5 5	2 1. 8 3	1 8. 1 0	2 2. 6 2	2 6. 1 2	1 9. 4 8	1 9. 3 7	1 6 6 7.	2 1. 3 7
Eq i io ty t u ra	6 9 %	0 % 7	6 8 %	6 4 %	6 % 5	6 6 %	6 3 %	6 1 %	6 6 %	6 6 %	6 3 %	6 1 %	6 1 %	6 0 %	% 5 7	3 % 5	% 5 7
N I B D	1 0 2	2 8 5	3 6 5	6 0 5	4 9 5	6 3 5	0 4 5	6 0 3	2 1 8	3 9 1	1 8 2	3 0 2	2 2 7	2 3 3	3 5 7	5 5 5	0 3 5

Revenue for the Bakkafrost Group has increased from 820 mDKK in 2010 to 3.8 bDKK in 2017.

Operational EBIT for the Bakkafrost Group has increased from 247 mDKK in 2010 to 1.4 bDKK in 2017.

The margin in Farming was NOK 30.02 per kg in 2017.

The margin in VAP was NOK -4.96 per kg in 2017.

Dividend

• Dividend for 2017 of DKK 10.50 (NOK 13.52) per share is paid out in Q2 2018

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

* Adj. 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

Dividend per share in % of adj. EPS*

Dividend per share (DKK)***

FAROE ISLANDS

• 18 islands – 1,387 km²
• 50,750 inhabitants (Mar 2018)
• Home rule – within the Kingdom of Denmark
• Part of the Danish monetary union, Danish krone (DKK)
• Key sectors (% of wage earners, 2017)
• Service/public admin.: ~33%
• Private service: ~32%
• Construction: ~14%
• Fishing : ~21%
• Unemployment rate (Mar 2018): 2.2%
• Total working force (Jan 2018): 26,282
• GDP: DKK ~18.8bn (2017e)
• GDP/capita: DKK 374,000 (2017e) (Norway: DKK 455,000) (2016)

Total export of fish products (2017) 13% increase in 2017

• DKK 8,650 million
• whereof farmed fish accounts for 45%

TAXES

• Total percent of GDP: 41.8% (2016)
• Corporate tax: 18%
• Farming revenue tax : 4.5% of revenues since 1 January 2016 more details see page 44 in Bakkafrost CMD presentation from June 2016
• 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

LARGEST SHAREHOLDERS

Tra ded da ily

2 0 la rg e s	t ha s	ho l d re e rs
f s No ha o res	%	Na me	Ty pe	Na tio lity na

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BAKKAFROST / Q1 2018 PRESENTATION

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