Bakkafrost P/f

Investor Presentation • Mar 14, 2016

ANNOUNCEMENT RE. INVESTMENT IN HATCHERY AT STROND, KLAKSVÍK

BAKKAFROST GROUP Glyvrar 14 March 2016

• 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.

• In operation in H2 2018

• Capacity to produce 7 million smolt á 500g
• Goal to secure improvements in the following areas:
• Efficiency
• Biological risk
• Organic growth

New Hatchery at Strond in Klaksvík

NEW HATCHERY AT STROND IN KLAKSVÍK

• Significant capacity expansion
• Increase average size of smolts for Bakkafrost Group up to above 400g in 2019
• Reduce risk in farming
• Reduce total time of production cycle at sea
• Environment
• Recycling of 99,7% of water
  • saving water and heating
• Sludge treatment of discharge water and recycling of nutrients

New Hatchery at Strond in Klaksvík

• Significant capacity expansion
• The capacity increases in 2016 with the new Hatchery at Viðareiði 8,000m3
• New Hatchery at Strond 29,000m3 in operation in 2018
• Total capacity 4 folded from 2015 to 2018

Capacity development

Actual growth period with larger smolt

• Reduced risk
• Up to 6 months reduced growth period will reduce risk significantly
• Reduced mortality
• Fewer treatments and lower treatment costs
• Organic growth
• Shorter production cycle in farms will increase production
• Around 30% theoretical growth potential with size increase from 100g to 500g

Results with large smolts in the Faroe Islands

The graph shows actual growth period until harvest at 6 kg wfe in the Faroe Islands in the period from 2005-2014

FAROE ISLANDS

• 18 islands – 1,387 km²
• 49,192 inhabitants (January 2016)
• Home rule – within the Kingdom of Denmark
• Part of the Danish monetary union, Danish krone (DKK)
• Key sectors (% of wage earners, 2014)
• Service/public admin.: ~40%
• Private service: ~31%
• Construction: ~12%
• Fishing : ~17%
• Unemployment rate (June 2015): 3.8%
• Total working force, (number of people 2014): 28,707
• GDP: DKK 14.7bn (2013)
• GDP/capita: DKK 305,000 (2013) (Norway: 360,000) (2013)

Total export of fish products (2013)

• DKK 6,171 million
• whereof farmed fish accounts for 48%

TAXES

• Total Percent of GDP: 42.4% (2013)
• Corporate Tax: 18%
• Farming Licence Tax : 4.5% of revenues from 1. Jan 2016 see page 24
• Restriction on a single foreign ownership of 20% in farming companies
• One company may max. control 50% of licences in the Faroe Islands