Andfjord Salmon

Quarterly Report • Feb 29, 2024

Q4 2023 STATUS AND PROGRESS

29 FEBRUARY 2024

Q4 2023

• INTRODUCTION

• Quarterly highlights and subsequent events
• Status Kvalnes build-out
• Financials
• Post-smolt strategy
• Summary and outlook

Bjarne Martinsen CFO

AGENDA

NATURAL OPTIMAL WATER TEMPERATURES

OXYGEN-RICH AND CLEAN ARCTIC SEAWATER

LOW ENERGY COSTS. NO LIFTING, HEATING OR COOLING

THE BEST OF TWO WORLDS

3 BENEFITS FROM SEA BASED NET PEN FARMING 3 BENEFITS FROM LAND BASED FARMING

1

2

NO PROBLEMS WITH SALMON LICE AND POISONOUS ALGAE 1

NATURAL ESCAPE PREVENTION 2

COLLECTION AND RECYCLING BIOWASTE = COMMERCIAL VALUE 3

KEY FIGURES: FIRST PRODUCTION CYCLE

LOW FEED CONVERSION RATE

STRONGER GROWTH

INDUSTRY LEADING SURVIVAL RATE

Feed conversion rate for first production cycle

Industry average = 1.27**

+1 kilo

Extra growth first 12 months in cycle, compared to Skretting's growth table

1 kWh

Energy use per kilo produced salmon, first production cycle

97.5%

Survival rate for first production cycle

Industry average = 83.3%*

Source: *Fish Health Report 2023, ** 2022 industry average

• Introduction
• QUARTERLY HIGHLIGHTS AND SUBSEQUENT EVENTS
• Status Kvalnes build-out
• Financials
• Post-smolt strategy
• Summary and outlook

AGENDA

HIGHLIGHTS Q4 AND SUBSEQUENT PERIOD

Q4 2023

EXCAVACTION COMPLETED

Pool pit excavation at Kvalnes completed one quarter ahead of schedule

PROGRESSING AS PLANNED

Harbour area and waterways workstreams progressing as planned

PREPARATION FOR POOL CONCRETE PRODUCTION

Initiated preparation for pool concrete production

POST-SMOLT STRATEGY

Post-smolt production opportunity identified, approved and being realised

• Introduction
• Quarterly highlights and subsequent events
• STATUS KVALNES BUILD-OUT
• Financials
• Post-smolt strategy
• Summary and outlook

AGENDA

PRODUCTION VOLUME OF 40,000t AT KVALNES WITH TOTAL POTENTIAL OF 90,000t

Q4 2023

• Gradual ramp-up to full capacity of 40,000 tonnes at Kvalnes, focusing on capital efficiency
• Next step at Kvalnes encompasses 4 new pools, bringing total production capacity to 8,000 tonnes, followed by further expansion
• Larger interventions and blasting to be completed in this step,

meaning that the only required pause in production due to ground works will be in 2024

• Current production license of 10,000 tonnes MAB at Kvalnes (total potential of 19,000 tonnes HOG), with further license applications to be submitted in accordance with the original business plan

Kvalnes build-out plan

Comments

Tons HOG Stage, Kvalnes	Added production (HOG, est.)	Accum. production (HOG, est.)
First pool	+1,000t	1,000t
1	+7,000t	8,000t
2	+11,000t	19,000t
3 (license expansion)	+4,000t	23,000t
4	+5,000t	28,000t
5	+12,000 t	40,000t

KVALNES

In operation: 1,000 tonnes

First pool

1 2 3

Construction start in 2026: +5,000 tonnes

4

Q3 2023 Q4 2023

Construction 2023-2025: +18,000 tonnes +4,000 tonnes license expansion

KVALNES STATUS AND PROGRESS

POOLS Pool pit excavation reached 100% completion, one quarter ahead of schedule

WATERWAYS Outlet and inlet waterways reached 10% completion

KEY CONSTRUCTION MILESTONES FOR BUILD-OUT PHASE AT KVALNES (8,000 t)

	PLAN: INSTALL. OF TECHNICAL INFRASTRUCTURE
STATUS: NOT STARTED
		SMOLT RELEASE

PLAN: EXCAVATION OF POOL PITS K1-K12
STATUS: 100% FINISHED – AHEAD OF SCHEDULE
PLAN: CONCRETE WORKS: K1-K4
STATUS: PREPARATIONS STARTED
PLAN: WATERWAYS
STATUS: 10% FINISHED
PLAN: INSTALL. OF TECHNICAL INFRASTRUCTURE
STATUS: NOT STARTED
PLAN: HARBOUR AND PORT
STATUS: 30% FINISHED

• Introduction
• Quarterly highlights and subsequent events
• Status Kvalnes build-out
• FINANCIALS
• Post-smolt strategy
• Summary and outlook

AGENDA

STATEMENT OF COMPREHENSIVE INCOME All amounts in 1000 NOK

Statement of comprehensive income	Q4 2023	Q4 2022	2023	2022
	1.10 – 31.12 Unaudited	1.10 – 31.12 Unaudited	1.1 – 31.12 Unaudited	1.1 – 31.12
Operating income and expenses
Revenue from contracts with customers	1	-	37 279	-
Other income	-	81	-	113
Total operating income	1	81	37 279	113
Change in biological assets at cost and other inventories	-	299	-1 162	700
Cost of materials	-429	-5 369	-59 638	-12 704
Fair value adjustments of biological assets	-	5 108	25 707	14 285
Employee benefit expenses	-5 424	-8 261	-25 208	-23 211
Depreciation and amortisation expenses	-6 305	-6 039	-24 904	-13 603
Other operating expenses	-7 283	-4 007	-31 707	-21 691
Total operating expenses	-19 441	-18 269	-116 912	-56 224
Operating profit/loss	-19 440	-18 188	-79 634	-56 111
Financial income and expenses
Financial income	5 229	1 832	12 187	1 836
Net financial costs	-137	-1 948	-2 340	-2 402
Net financial result	5 092	-116	9 847	-566
Profit/loss for the period	-14 348	-18 304	-69 787	-56 677

STATEMENT OF FINANCIAL POSITION

Assets	31.12.2023 - Unaudited	31.12.2022
Intangible assets	14 389	8 556
Property, plant & equipment	876 632	498 386
Right-of-use assets	17 640	22 539
Other non-current assets	113	89
Total non-current assets	908 774	529 570
Biological assets	-	14 285
Other inventories	1 697	1 162
Other current assets	52 361	7 803
Cash and cash equivalents	250 032	82 911
Total current assets	304 090	106 161
Total assets	1 212 864	635 731

All amounts in 1000 NOK

31.12.2023 - Unaudited	31.12.2022
14 389	8 556
876 632	498 386
17 640	22 539
113	89
908 774	529 570
	14 285
1 697	1 162
52 361	7 803
250 032	82 911
304 090	106 161
1 212 864	635 731

Figures do not include an undrawn construction loan of NOK 825 million and an undrawn credit facility of NOK 20 million

STATEMENT OF FINANCIAL POSITION

Equity and liabilities	31.12.2023 - Unaudited	31.12.2022
Total equity	993 688	475 704
Borrowings	59 959	67 375
Lease liabilities	9 340	13 296
Total non-current liabilities	69 299	80 671
Borrowings	7 666	56 168
Lease liabilities	4 511	4 683
Trade payables	131 134	10 361
Other current liabilities	6 567	8 144
Total current liabilities	149 877	79 356
Total liabilities	219 176	160 027
Total equity and liabilities	1 212 864	635 731

All amounts in 1000 NOK

STATEMENT OF CASH FLOWS

Q4 2023

Statement of cash flows	Q4 2023	Q4 2022	2023	2022
	1.10 – 31.12 Unaudited	1.10 – 31.12 Unaudited	1.1 – 31.12 Unaudited	1.1 – 31.12
Net cash flow from operating activities	-17 247	-16 287	-29 148	-88 443
Net cash flow from investing activities	-256 776	-15 337	-326 866	-90 702
Net cash flow from financing activities	-2 164	-2 586	523 136	247 139
Net change in cash and cash equivalents	-276 186	-34 210	167 121	67 993

All amounts in 1000 NOK

SCALE-UP TAILORED FOR CAPITAL EFFICIENCY

• Large part of investment towards shared infrastructure for full Kvalnes site
• Shared upside and downside: 60/40 between AF Hæhre-Contur and Andfjord Salmon
• All future expansions (step 2 and later) expected to be financed by a mix of debt and cash flow
• Significant shared infrastructure across stages
• Highly competitive blended capex for Kvalnes of NOK 114/kg (including substantial buffers)

Note: Stated capex numbers relate to investments (working capital/biomass, finance and operational costs not included). Estimates only.

Kvalnes build-out plan Capital expenditure, Kvalnes phase 1

In this upcoming stage of construction, the company is planning to establish major infrastructure such as waterways and a port area to support 40,000 tonnes of production at Kvalnes. Together with highly reputable construction partners AF Hæhre-Contur and Cflow, a budget of NOK 1,300 million plus a buffer of NOK 350 million has been estimated for the next two years.

Incurred costs vs estimated budget cost, incl. buffer)

• Actual cost of NOK 397 million per 31 December 2023

SUPPORTIVE SHAREHOLDER BASE

Q4 2023

TOP 10 SHAREHOLDERS (PER 26 FEBRUARY 2024)

TOP 10 SHAREHOLDERS (PER 26 FEBRUARY 2024)
Jerónimo Martins Agro-Alimentar, S.A.	25.12%
Andfjord Holding AS	11.45%
KG Investment Comp AS	5.96%
Eidsfjord Sjøfarm AS	4.54%
Skagerak Vekst AS	4.29%
OG Invest AS	3.95%
UFI AS	3.61%
Karstein Gjersvik	2.44%
Verdipapirfondet DNB SMB	2.24%
Traaseth Property AS	2.22%

JERÓNIMO MARTINS

Listed on stock exchange in Lisbon. Ranked the 18th largest food retailer in Europe (2022), 5,729 stores, ̴130,000 employees, and sales of EUR 30.6 billion (2023).

EIDSFJORD SJØFARM (HOLMØY HAVBRUK)

Part of Holmøy Maritime, and produces around 25,000 tonnes of salmon annually (2023e) based on conventional licenses in Nordland and Troms

NUTRECO

Nutreco International (holds 505,050 shares / 0.89 %) Nutreco is a global leader in animal nutrition and aquafeed, and owner of Skretting.

• Introduction
• Quarterly highlights and subsequent events
• Status Kvalnes build-out
• Financials
• POST-SMOLT STRATEGY
• Summary and outlook

AGENDA

KEY DRIVERS: THE POST-SMOLT* OPPORTUNITY

STRONG DEMAND

Substantial demand for post-smolt due to the major benefits of shortening the ocean-based grow-out phase

BIOLOGICAL BENEFITS

Ocean-based fish farmers keen on releasing larger, more robust fish into net pens as this offers multiple biological and environmental benefits

AVAILABLE POOL SPACE

Surplus space in land-based pools following release of smolt can be used for further growth

SUSTAINABLE PRODUCTION

Norwegian aquaculture industry is dedicated to achieving even more sustainable salmon production

The combination of land and ocean-based farming is a unique opportunity for Norway and the Norwegian salmon farming industry

*Post-smolt are salmon that have grown accustomed to seawater over a long time and are approximately 1 kg in size.

A SUPPLEMENT TO PRODUCTION OF HUMAN GRADE SALMON

POOL DENSITY PROFILE (KG/M3) – ILLUSTRATIVE

• Estimated 15-25% increase in EBIT through combined production strategy, strategic collaboration agreed with Eidsfjord Sjøfarm/Holmøy Havbruk to realise plans
• Andfjord Salmon will release smolt of approximately 100-150 grams at the start of each production cycle, which is planned to grow to harvest weights of 4 – 6 kg
• Towards the end of each production cycle and with increased salmon weights, pools will have maximum density level targets of ~35-40 kg/m3 after splitting
• This implies significant unused pool capacity at the start of each production cycle, allowing for an increased number of smolt to be released in order to grow to weights of approx. ~1,000 grams
• The plan: utilise surplus pool capacity for post-smolt production for ocean-based fish farmers
• A supplement to Andfjord Salmon's land-based, human grade salmon production

HOW WE WILL DO IT NOTE: SIMPLIFIED ILLUSTRATIVE EXAMPLE OF PRODUCTION CYCLE

SMOLT RELEASE

Smolt weight: 100-150 grams

AFTER 3 MONTHS Smolt weight: 500 grams

AFTER 6 MONTHS Post-smolt weight: ~ 1,000 grams

AFTER 12-15 MONTHS Salmon slaughter weight: 4-6 kg

POOL DENSITY PROFILE (KG/M3) – ILLUSTRATIVE PRODUCTION CYCLE

ADDITIONAL POST-SMOLT PRODUCTION

ADDITIONAL POST-SMOLT PRODUCTION HUMAN GRADE SALMON PRODUCTION

Illustrative and estimates only

Slaughter weight: 4-6 kg

Q3 Q4 2023

POST-SMOLT OFFERS MULTIPLE BENEFICIARIES

• More robust fish released to sea, less susceptible to diseases
• Shorter production cycle in sea: e.g. a reduction in time from 17-19 to 10 months
• Reduced exposure time to salmon lice
• Improved utilisation of MAB license
• Financial benefits of potentially higher survival rates

OCEAN-BASED FISH FARMERS

• More robust fish released to sea, less susceptible to diseases = enhanced fish welfare
• Potentially higher survival rates
• Reduced exposure to salmon lice and other biological risks in the sea such as winter ulcers and jellyfish
• Farmed for longer period in a controlled, closed cage environment, benefiting from natural advantages of combining land and ocean-based farming

THE SALMON THE LOCAL MARINE ENVIRONMENT

• Longer production time in facilities with collection of biological waste (faeces and feed) - circular economy in practice
• Longer production time in facilities with no escape risk
• More frequent fallowing (brakkleggingsstruktur)= reduced organic footprint on-site
• Possibility to strengthen overall conditions for regional aquaculture clusters

Enhanced cooperation between ocean-based and land-based farmers = positive for regional economic development

BENEFICIAL FOR LOCAL AQUACULTURE INDUSTRY

Salmon farming licenses surrounding Andfjord Salmon

• Andfjord Salmon beneQts from the extensive expertise of Qsh farming and aquaculture supply companies in the Vesterålen region
• Our location at Andøya is optimally situated to supply nearby conventional salmon farmers with post-smolt

STRATEGIC POST-SMOLT PARTNERSHIP AGREED

Q4 2023 Q4 2023

• Agreement reached with Eidsfjord Sjøfarm/Holmøy Havbruk (part of Holmøy Group) whereby Andfjord Salmon will farm post-smolt for a select number of nearby ocean-based farming locations as part of upcoming production cycles
• Initial production plan approved by relevant authorities
• Ongoing discussions with additional local conventional farmers regarding partnering with Andfjord Salmon as off-take partners for post-smolt

BENEFITS FOR ANDFJORD SALMON

FINANCIAL BENEFITS

• Strong fundamentals for post-smolt drives an estimated 15-25% increase in EBIT by utilizing this combined production strategy
• Shorter runway to revenue, with positive cash flow effects
• Further de-risking of the revenue stream

-

INDUSTRIAL BENEFITS

• Enables a closer working relationship with conventional farming partners in the region, and enhances smolt supply access

• Andfjord Salmon becomes a strategic partner to conventional farmers with added competence and infrastructure sharing

OPTIMISING INFRASTRUCTURE AND REVENUE POTENTIAL

• Inclusion of post-smolt production in pools
• No additional infrastructure capex required
• Enabling 10% higher biomass turnover

SUPPLEMENTARY POST-SMOLT STRATEGY INCREASES PRODUCTION VOLUME, EBIT AND SUSTAINABILITY

ADDITIONAL REVENUE STREAM

Significant surplus pool capacity at the start of each production cycle enables post-smolt production

10% increase in biomass turnover

Supplement to production of human grade salmon

APPROVED BY AUTHORITIES

Initial production plan approved by the Norwegian Directorate of Fisheries

PARTNERSHIP IN PLACE

Agreement in place with Eidsfjord Sjøfarm/Holmøy Havbruk to farm post-smolt for locations near Kvalnes for upcoming production cycles

INCREASES EBIT

Strong fundamentals for post-smolts drives an estimated 15-25% increase in EBIT by utilising this combined production strategy

STRENGHTENS SUSTAINABILITY

More robust fish released in combination with shortened production time in sea bring multiple biological and environmental benefits

• Introduction
• Quarterly highlights and subsequent events
• Status Kvalnes build-out
• Financials
• Post-smolt strategy
• SUMMARY AND OUTLOOK

AGENDA

SUMMARY AND OUTLOOK

Q4 2023

EXCAVACTION COMPLETED

Pool pit excavation at Kvalnes completed one quarter ahead of schedule

PROGRESS AS PLANNED

Harbour area and waterways workstreams progressing as planned

PREPARATION FOR POOL PRODUCTION

Initiated preparation for concrete production

Expected production start late Q1

POST-SMOLT STRATEGY

Post-smolt production opportunity identi`ed, approved and being realised

Q & A

Q4 2023

IMPORTANT INFORMATION

This presentation (the "Presentation") has been produced by Andfjord Salmon AS (the "Company") solely for information purposes. By reading the Presentation slides or by otherwise receiving this Presentation or the information contained herein, you agree to be bound by the following terms, conditions, and limitations:

This Presentation does not constitute an offer to sell or a solicitation of an offer to buy, or a recommendation regarding, any securities of the Company. Any failure to comply with the restrictions set out herein may constitute a violation of applicable securities laws or other regulations. No representation, warranty or undertaking, express or implied, is made by the Company, its affiliates or representatives as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein, for any purpose whatsoever. Neither the Company nor any of its affiliates or representatives shall have any responsibility or liability for any loss arising from any use of this Presentation or its contents or otherwise arising in connection with this Presentation.

This Presentation speaks as of the date hereof. All information in this Presentation is subject to updating, revision, verification, correction, completion, amendment and may change materially and without notice. None of the Company, its affiliates or representatives undertake any obligation to provide the recipient with access to any additional information or to update this Presentation or any information or to correct any inaccuracies in any such information. The information contained in this Presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect developments that may occur after the date of this Presentation. These materials do not purport to contain a complete description of the Company or the market(s) in which the Company operates. The contents of this Presentation are not to be construed as financial, legal, business, investment, tax or other professional advice. Each recipient should make its own independent assessment of the information in the Presentation and should take its own professional advice in relation thereto.

This Presentation contains forward-looking information and statements relating to the business, financial performance, and results of the Company and/or industry and markets in which it operates. Forwardlooking statements are statements that are not historical facts and may be identified by words such as "aims", "anticipates", "believes", "estimates", "expects", "foresees", "intends", "plans", "predicts", "projects", "targets", and similar expressions. Such forward-looking statements are based on current expectations, estimates and projections, reflect current views with respect to future events, and are subject to risks, uncertainties, and assumptions. Forward-looking statements are not guarantees of future performance and risks, uncertainties and other important factors could cause the actual results of operations, financial condition and liquidity of the Company or the industry to differ materially from the results expressed or implied in this Presentation by such forward-looking statements. No representation is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved, and you are cautioned not to place any undue influence on any forward-looking statement.

This Presentation, and the information contained herein, does not constitute or form part of, and is not prepared or made in connection with, an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities of the Company and nothing contained herein shall form the basis of any contract or commitment whatsoever. This Presentation is not a prospectus and has not been reviewed or approved by any regulatory authority, stock exchange or market place. The distribution of this Presentation or other documentation into jurisdictions other than Norway may be restricted by law. Persons into whose possession this Presentation comes should inform themselves about and observe any such restrictions.

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DISCLAIMER

Appendix

Q4 2023

DEFINITION: WHAT IS POST-SMOLT?

POST-SMOLT: 400 GRAMS – 1,000 GRAMS

Post-smolt is salmon that has become accustomed to seawater for a long periode and weighs of up to approx. 1 kg.

SMOLT: 100 – 150 GRAMS

Smolt is salmon that weighs approx. 100 grams and has recently been introduced to seawater.

Post-smolt is a more robust fish, considered to be a key to further growth in the Norwegian salmon farming industry, since it provides improved sustainability and fish health.