Bakkafrost P/f

Investor Presentation • Mar 3, 2016

GOOD BIOLOGY – GOOD PERFORMANCE

BAKKAFROST GROUP North Atlantic Seafood Forum, Bergen 3 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.

WHAT IS GOOD BIOLOGY

• FARMING PERFORMANCE
• INVESTMENTS REQUIRED TO IMPROVE
• SUMMARY OF Q4 2015

NATURAL CONDITIONS

FAROE ISLANDS – EXCELLENT CONDITIONS FOR COST EFFECTIVE FARMING

Natural growth area for wild salmon

FEED

Sustainable feed, based on local marine raw materials. High on Omega-3, proved track record with best performance on high SGR and low FCR

Biological sustainability setting the biomass target per

license

WATER between 6-12 degrees Celsius

markets

LOCATION

BIOMASS

GEOGRAPHY

• Average temperature in 2015 was 7.94°C, which is 0.35°C lower than average for the last 13 years
• Highest average month temperature the last 13 years was in September 2003 at 11.28°C, compared to 9.96°C in September 2015, highest average month temperature in 2015

Temperatures Seawater Temperatures in the Faroe Islands 2003 – 2015 [°C]

A different taste – taste of the Faroe Islands

• Full traceability
• Certifications and quality systems
• Fish oil cleaned for pollutants

High marine ingredient in feed

Local raw materials

MORTALITY

• Mortality rate stable
• No disease outbreak in period
• Mortality mainly related to smolt release and sea lice treatment
• Average mortality rate on 7.3% over the last six years
• Mortality was 7.4% in 2015

AVERAGE HARVEST SIZE

• Highest harvest size ever on 6.7 kg (wfe) in 2015
• Harvest size > 6 kg last four years
• Indication of good biology
• Attractive product on the market

AVERAGE SMOLT SIZE

• Bakkafrost has 6 hatcheries on different locations
• Average smolt size in 2015 was 144 gram, which is an increase of 25 gram, compared to 2014
• The goal is to reach smolt size of 300 gram in 2018
• Investment required to reach the goal
• New facility in Viðareiði will start-up in Q2 2016

Smolt size at release (gram)

WHAT IS GOOD BIOLOGY

FARMING PERFORMANCE

• INVESTMENTS REQUIRED TO IMPROVE
• SUMMARY OF Q4 2015

PERFORMANCE IN BAKKAFROST FARMING

Farming operational EBIT (mDKK)

• WHAT IS GOOD BIOLOGY
• FARMING PERFORMANCE

INVESTMENTS REQUIRED TO IMPROVE

SUMMARY OF Q4 2015

INVESTMENTS – PROGRAMME 2013 - 2017

The investments will be made step by step in the relevant parts in the value chain to secure:

• Efficiency
• Biological risk
• Organic growth

BUILDING NEW HATCHERIES

• Significant capacity expansion in progress
• 99% of the water is recycled
  • saving water and heating
• The goal is to increase average size of smolts from 100 gram to 300 gram in 2018
• Reduce risk in farming
• Reduce total time of production cycle at sea
• Viðareiði facility to start-up in Q2 2016
• New hatchery project to startup in H1 2016 to be finalized in H1 2018

New Hatchery in Viðareiði (S-21)

Building new 8,000m³ Hatchery in Viðareiði to be finalized in summer 2016

Advantages 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 100 gram to 500 gram

Results with large smolt in the Faroe Islands

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

Sea lice a biological challenge

• Operation started in 2015
• Main focus on freshwater treatment
• Promising results up to 99% total efficiency
• Until end of February 2016 3.1 million pieces treated with freshwater

M/S Hans á Bakka

M/S Hans á Bakka in operation

• WHAT IS GOOD BIOLOGY
• FARMING PERFORMANCE
• INVESTMENTS REQUIRED TO IMPROVE
• SUMMARY OF Q4 2015

Higher volumes from Farming

• Harvested 13,675 tgw in Q4 2015 (12,651 tgw in Q4 2014)
• Feed sales of 19,797 tonnes in Q4 2015* (23,133 tonnes in Q4 2014*)
• Revenues of DKK 760 million in Q4 2015 (DKK 757 million in Q4 2014)
• Operational EBIT of DKK 257 million in Q4 2015 (DKK 227 million in Q4 2014)
• Positive results in all segments
• Completed refinancing of 5 year bank facilities
• Proposed dividend of DKK 8.25 per share (DKK 6.00 per share 2014)

*) Including internal sale of 18,042 tonnes in Q4 2015 (19,218 tonnes in Q4 2014)

Positive results in all segments

• Farming/VAP division increased margin from 19.48 NOK/kg in Q4 2014 to 21.83 NOK/kg in Q4 2015
• VAP segment delivered a margin of 6.09 NOK/kg in Q4 2015, compared with 7.36 NOK/kg in Q4 2014
• Farming margin was 19.67 NOK/kg in Q4 2015, compared with 16.53 NOK/kg in Q4 2014.
• FOF delivered a margin of 18.7% in Q4 2015, compared with 18.1% in Q4 2014
• Group Operational EBIT was DKK 257 million in Q4 2015, compared with DKK 227 million in Q4 2014

(DKK million)	Q4 2015	Q4 2014	2015	2014
Operating revenues	760	757	2,850	2,683
Operational EBITDA	285	255	1,109	931
Operational EBIT	257	227	1,001	834
Profit for the period	319	222	810	647
Operational EBITDA margin	37.6%	33.6%	38.9%	34.7%
Operational EBIT margin	33.8%	30.0%	35.1%	31.1%
Operational EBIT/Kg (Farming) (NOK)	19.67	16.53	19.63	17.65
Operational EBIT/Kg (Farming and VAP) (NOK)	21.83	19.48	21.64	19.43
Operational EBIT/Kg (VAP) (NOK)	6.09	7.36	5.58	3.69
EBITDA margin (Fishmeal, oil and feed)	18.71%	18.11%	19.28%	18.70%

DEVELOPMENT PER QUARTER Q1 2012 – Q4 2015

(mDKK)	Q4 2015	Q3 2015	Q2 2015	Q1 2015	Q4 2014	Q3 2014	Q2 2014	Q1 2014	Q4 2013	Q3 2013	Q2 2013	Q1 2013	Q4 2012	Q3 2012	Q2 2012	Q1 2012
Revenue	760	677	800	613	757	584	711	631	667	741	610	473	582	457	416	400
Op. EBIT	257	206	303	235	227	209	212	186	124	187	169	105	99	86	78	60
Profit/Loss	319	168	191	132	222	211	126	87	138	200	184	67	148	26	91	16
Harvest (tgw)	13,675	12,982	14,182	9,726	12,651	10,881	11,212	9,269	11,097	11,335	10,540	8,296	13,044	9,730	10,219	11,348
Op. EBIT Farming & VAP (NOK/kg)	21.83	18.10	22.62	26.12	19.48	19.73	17.66	21.37	12.44	15.76	15.29	12.16	7.25	8.00	7.78	5.42
Equity ratio	66%	63%	61%	61%	60%	57%	53%	57%	54%	52%	49%	48%	49%	47%	47%	43%
NIBD	391	182	302	227	233	357	555	503	641	728	786	775	807	770	733	764

Turnover for the Bakkafrost Group has increased from 820 mDKK in 2010 to 2.9 bDKK in 2015.

Operational EBIT for the Bakkafrost Group has increased from 247 mDKK in 2010 to 1.0 bDKK in 2015.

The margin in Farming was NOK 19.63 per kg in 2015 – the highest ever.

The margin in VAP was NOK 5.58 per kg in 2015 – at the same time as Farming margin was record high.