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Bakkafrost P/f

Investor Presentation • Nov 6, 2018

7331_rns_2018-11-06_8c2a343b-7b31-4b71-852b-476357561dcf.pdf

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Q3 2018

BAKKAFROST GROUP Oslo 6 November 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 Q3 2018

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

HIGHLIGHTS

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*) Including internal sales of 20,783 tonnes in Q3 2018 (20,398 tonnes in Q3 2017)

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

SUMMARY OF THE QUARTER

Operational EBIT for the Farming segment decreased due to lower volumes. Positive operational EBIT for the VAP segment, but lower EBITDA margin for the FOF segment.

  • Farming/VAP margin increased from 23.02 NOK/kg in Q3 2017 to 25.34 NOK/kg in Q3 2018
  • VAP segment had a positive margin of 2.49 NOK/kg in Q3 2018, compared to -1.08 NOK/kg in Q3 2017
  • Farming margin was 24.85 NOK/kg in Q3 2018, compared to 23.51 NOK/kg in Q3 2017
  • FOF margin was 11.7% in Q3 2018, compared to 23.2% in Q3 2017.
  • Group Operational EBIT was DKK 168 million in Q3 2018, compared to DKK 252 million in Q3 2017
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  • SUMMARY OF Q3 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

MARKETS & SALES

Sales distribution in Q3 2018 had similar trends as in the first half of 2018. Sales to Eastern Europe increased and sales to EU decreased in Q3 2018, compared to Q3 2017. Small changes in sales to USA and Asia. VAP on contract is still on a low level at 20%

  • EU market decreased from 45% in Q3 2017 to 27% in Q3 2018
  • USA decreased from 20% to 18%
  • Asia increased from 21% to 23%
  • Eastern Europe increased from 14% to 32%
  • Harvest volumes used in VAP were 20% in Q3 2018, compared to 45% in Q3 2017
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GLOBAL MARKETS

Lower prices in Q3 2018

  • Prices dropped 3% compared with Q3-2017
  • y/y by 1.39 NOK/kg ~2% from NOK 56.70 to NOK 55.31
  • q/q by 14.86 NOK/kg ~21% from NOK 70.17 to NOK 55.31

Increased global supply in Q3 2018

5.4% increased global supply in Q3 2018, compared with Q3 2017, corresponding to 28,300 tonnes

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

Change in global market supply and market price -50%-30%-10%10%30%50%1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 2013 2014 2015 2016 2017 2018 Change in global market supply of farmed Atlanticsalmon from theprevious year Change in European spot prices - fresh Atlantic salmon(FishPool index) from the previous year

Source: Kontali

DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN

5.4% global supply growth in Q3 2018

Supply increase exceeded change in harvest due to inventory movements in Chile

FlatEuropean harvest

  • Norway increased harvest by 4%
  • Some acceleration in harvest due to challenges
  • Increased lice challenges in the North
  • UK reduced harvest by 20%
  • Impacted by past biological challenges
  • Improved underlying performance

Americasharvest increased by 13%

  • Chile increased harvest by 18%
  • Very strong biological performance
  • Reduced harvest in Canadaand in USA
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Source: Kontali

Strong momentum in most markets

Marginal growth in the EU

Reflecting 1% harvest decline in Europe

Strong US growth at increased prices

However prices are reduced from previous quarter

Growth in Russia

Chile major contributor to the growth

Greater China/ASEAN

  • Marginal combined decline
  • Significant growth in supply from Chile
  • Boost from Norway – China relations
  • Inaccurate quarterly number – should be read in concert

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

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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

Modest supply growth expected coming quarters

  • Growth rate impacted by inventory movements
  • Growth in harvest likely to be instrumental for pricing
  • Frozen products are materially sold through alternative channels
  • Europe – Increasing, but still limited growth
  • Uncertainty linked to biological performance in Norway
  • Scotland expected to recover
  • Americas – Limited growth
  • Chile expected to grow modestly due to regulatory constraints
  • May be surprise on the upside

Source: Kontali

SUPPLY - TOTAL

  • SUMMARY OF Q3 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

Harvested volumes

  • Harvested volumes decreased by 38% in Q3 2018, compared with Q3 2017
  • The harvest in the North Region was 87% and harvest in the West Region was 13% in Q3 2018
  • Average weight of harvested fish in Q3 2018 was 5.2 kg head on gutted

Smolt transfer

  • Bakkafrost transferred 3.3 million smolts in Q3 2018 (3.2 million smolts in Q3 2017)
  • Moved 1 million smolts from Q4 2018 to Q1 2019. Expected smolt release in 2018 is therefore reduced, from 13.9 million to 12.9 million smolts

Seawater temperatures in the Faroe Islands

Average temperatures in Q3 2018 were 0.28 oC down – from 10.22 oC in Q3 2017 to 9.93 oC in Q3 2018

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Seawater Temperatures in the Faroe Islands 2003 – 2018 [°C]

Critical incident at A-81 Kolbanagjógv September 2018

Wednesday 19th of September

  • Farmers reported lower appetite
  • Sea lice disappeared from lumpfish
  • Samples taken to check for algae

Thursday 20th of September

  • Farmers reported high mortality started from the morning
  • Samples taken by vet and bio to check fish health and environmental tests
  • Results from tests indicate presence of algae
  • Mortality stops in the afternoon

Total loss of nearly 700,000 smolts out of 1.37 million smolts registered due to the incident

  • The remaining fish are in a good and healthy condition, good appetite – growth from 500 to 825g since the incident

  • Nothing registered at neighbour site A-05, distance of 1 km

  • The operational EBIT decreased from DKK 217 million in Q3 2017 to DKK 140 million in Q3 2018

  • Operational EBIT margin was 31% in Q3 2018, compared to 35% in Q3 2017
  • Mortality at Kolbanagjógv due to algae on September 20th caused a net expense of DKK 7.2 million in Q3 2018
  • Delay in starting new harvesting factory in Suðuroy from September to mid October moves harvest of 3,000 tonnes gw from Q4 2018 to Q1 2019
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A25-Gøtuvík

Operation

  • Farming operational EBIT increased by NOK 1.34 per kg from NOK 23.51 in Q3 2017 to NOK 24.85 in Q3 2018
  • Operational EBIT per kg in the North Region was NOK 23.95 and in the West Region NOK 30.68 in Q3 2018
  • Majority of harvest in the North Region was in the beginning of Q3 2018
  • Mortality at Kolbanagjógv due to algae on September 20th affected Farming operational EBIT by NOK 1.28 per kg in Q3 2018

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

(
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VAP operational EBIT margin positive again

  • Substantial decrease in revenue by 72% to DKK 69 million in Q3 2018, from DKK 246 million in Q3 2017
  • Operating EBIT in Q3 2018 was DKK 3 million, compared with DKK -4 million in Q3 2017

Lower raw material prices and lower activity in Q3 2018

  • The low salmon spot prices in Q3 2018 affected the margin in the VAP segment positively, but the low production activity had a negative effect on the margin
  • Operational EBIT per kg was NOK 2.49 in Q3 2018, compared to NOK -1.08 in Q3 2017
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Reduced EBITDA margin in the quarter Fishmeal, Oil and Feed

  • EBITDA of DKK 41 million in Q3 2018, compared with DKK 79 million in Q3 2017
  • EBITDA margin of 11.7% in Q3 2018, compared with 23.2% in Q3 2017
  • Feed sales had a small increase, but external fishmeal sales decreased by 20% in Q3 2018, compared to Q3 2017
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Raw material sourcing lower than same quarter last year

  • Havsbrún sourced 66% less raw material in Q3 2018, compared to Q3 2017
  • Third quarter is normally a weak sourcing quarter for Havsbrún

* Including sales to Bakkafrost, corresponding to ~ 89% of feed volumes in Q3 2018 (Q3 2017: 91%)

Sourcing of raw material (tonnes)

7,496

MARKET CONDITIONS FEED

Increase in feed sales

  • Quantity of feed sold was 23,468 tonnes in Q3 2018, compared to 22,320 tonnes in Q3 2017
  • External feed sales higher in Q3 2018, compared to Q3 2017

Market fluctuations

  • Drop in fish oil prices continued, fishmeal prices increased in Q3 2018
  • Fishmeal prices increased in Q3 2018 and are now approaching 2016 levels
  • Fish oil prices dropped moderately in Q3 2018 from a significant drop previous quarter.
  • Fish oil prices in Q3 2018 approached mid 2017 prices

Volumes of raw material purchase and feed sale [tonnes]

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

  • SUMMARY OF Q3 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

GROUP PROFIT AND LOSS

  • Revenue on lower level in Q3 2018, due to lower harvest. Revenue in Q3 2018 amounted to DKK 622 million, compared to DKK 804 million in Q3 2017.
  • Operational EBIT in Q3 2018 decreased to DKK 168 million, compared to DKK 252 million in Q3 2017
  • Fair value of biomass increased due to higher salmon prices, compared to Q3 2017
  • Revenue tax, recognized as cost, amounted to DKK -14 million in Q3 2018, compared to DKK -24 million in Q3 2017
  • Financial items amounted to DKK -1 million and taxes amounted to DKK -78 million in Q3 2018
  • Profit after tax for Q3 2018 was DKK 356 million, compared to DKK 56 million in Q3 2017
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* 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

Operational EBIT* (DKK million)

1,001 1,165 1,378 844 2015 2016 2017 YTD 2018

Earnings per share (DKK)

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

BALANCE SHEET

  • Intangible assets increased by DKK 12 million in the quarter and amounts to DKK 389 million at the end of Q3 2018
  • Investments in PPE of DKK 127 million in Q3 2018 and PPE amounts to DKK 2.8 billion
  • Financial assets amount to DKK 102 million
  • The carrying amount of biological assets amounts to DKK 1,563 million, whereof fair value adjustment amounts to DKK 622 million
  • Inventory amounts to DKK 331 million at the end of Q3 2018
  • Changes in equity consist primarily of the positive results in Q3 2018. Equity ratio is 70% at the end Q3 2018
  • NIBD is DKK 286 million at the end of Q3 2018, compared with DKK 258 million at end 2017
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CASH FLOW

  • Cash flow from operations amounted to DKK 324 million in Q3 2018, compared to DKK 334 million in Q3 2017
  • Cash flow from investments amounted to DKK -164 million in Q3 2018, compared to DKK -118 million in Q3 2017
  • Cash flow from financing is affected by change in interest-bearing debt
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Net Interest-Bearing Debt

  • Cash flow from operating activities decreased the NIBD with DKK 207 million in Q3 2018
  • Net investments increased the NIBD with DKK 164 million in Q3 2018
  • Change in working capital in Q3 2018 decreased the NIBD with DKK 115 million

Financing end Q3 2018

  • Bank facilities of EUR 200 million
  • NIBD: DKK 286 million
  • Undrawn loan facilities: DKK 1,205 million

Development in NIBD in DKK millions

NIBD and available funding

  • SUMMARY OF Q3 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

OUTLOOK

Market

  • Global supply in Q3 2018 increased around 5%, compared to Q3 2017
  • Global harvest in Q4 2018 is expected to increase 1%
  • Global supply increase in 2018 expected to be around 7%, compared to 2017
  • Global supply growth in 2019 is expected to be around 4%, compared to 2018

Farming

  • Bakkafrost's guidance for harvest in 2018 is reduced by 3,000 tonnes gw, from 49,000 to 46,000 tonnes gw, as the new harvest factory at Vágur, Suðuroy, started operation in October rather than September 2018
  • Bakkafrost expects to harvest 53,000 tonnes gw in 2019
  • Bakkafrost has postponed release of 1.0 million smolts from 2018 to 2019. Expected smolt release for 2018 will therefore be 12.9 million, compared to 9.9 million smolts in 2017 and 11.7 million smolts released in 2016
  • Bakkafrost expect to release 13.5 million smolts in 2019

VAP

  • Contracted around 12% of expected harvest for the rest of 2018
  • Bakkafrost is presently negotiating new contracts for 2019

Fishmeal, Oil and Feed

  • Feed sales in 2018 are expected to be around 80,000 tonnes
  • Feed sales in 2019 are expected to be around 85,000 tonnes

Business development / Investment program

  • Pursuing sustainable organic growth
  • Financial flexibility enables M&A
  • New 2018 – 2022 investment program

  • Totalling ~ DKK 3 billion over five years

  • SUMMARY OF Q3 2018

  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

INVESTMENT PROGRAMME 2018 - 2022

Same aim as in previous investment programs:

  • Biological risk
  • Efficiency
  • Sustainable growth

And investments will be made step by step in the relevant parts of the value chain

Sustainable Growth part of Investment Program

  • New portfolio of sites in Suðuroy
  • 10,000 tonnes expected by 2023
  • Full infrastructure to be upgraded
  • Roll-out of large smolt strategy
  • 15,000 tonnes expected by 2022 (1)
  • R&D projects
  • Aimed at identifying growth beyond current horizon

Note: (1) Full harvest effect from large smolt strategy deferred from 2021 to 2022, compared to previous communication, due delay in construction and start up of the Strond smolt plant

SUÐUROY – SOLE OPERATOR IN REORGANIZED PRODUCTION CLUSTER

  • To be operated with separate infrastructure
  • Harvest capacity of 15,000 tonnes annually
  • Of which 5,000 tonnes from large smolt
  • Separate hatchery for large smolt
  • Four farming sites
  • Only operator in area secures biological control
  • Separate harvest facility in place

Suðuroy - Reorganized production cluster

PREPARING FOR THE FUTURE – UPDATED INVESTMENT PLAN (DKK 3 BILLION)

Fishmeal, oil and feed (DKK ~ 425 million)

  • Increased fish oil capacity to support marine index
  • Increased feed capacity and advanced feed line capabilities

Development of unique Faroese breeding program (DKK ~ 200 million)

Support product differentiation and adaptability to local biology

Completion of existing smolt projects and new development (DKK ~ 1,000 million)

Support growth and reduce biological risk

Farming investments to allow sustainable growth (DKK ~ 1,300 million)

  • Farming equipment, fish transportation and biogas plant
  • Selected R&D investments to cater for growth beyond current horizon

Market driven investments within processing (DKK ~ 85 million)

Investment program 2018 - 2022

Note: Total aggregate spend for 2018 – 2020 increased by DKK 970 million, compared to previous investment plan

IN-HOUSE BROODSTOCK OPERATION

  • Breeding program based on gene pool of local wild salmon strain
  • Adaptability to local biology
  • Product differentiation
  • Support branding strategy
  • Independence of external suppliers
  • Veterinary control
  • Location in remote area with no farming operation

Sandoy east side – remote and good location for broodstock site

SUSTAINABILITY UPDATE – BIOGAS PLANT INVESTMENT

Faroe Islands Biogas Plant Investment (2019-)

  • Sustainability commitment
  • Part of Bakkafrost's 2020 Healthy Living Plan
  • Waste management
  • 40-50,000 tonnes from salmon and dairy farms to be processed annually
  • Heat and electricity production
  • Enough heat for 400 homes and electricity for 1,900 homes
  • Contribution to national renewable target
  • 100% electricity from renewable sources by 2030
  • Reducing carbon emissions
  • Projected to save 11,000 tonnes of CO2 emissions annually
  • Reducing fertilizer imports
  • 40-45,000 tonnes of liquid fertilizer to be distributed annually

UPDATED INVESTMENT PROGRAM TO SUPPORT SUSTAINABLE GROWTH

Total investments of DKK 3 billion (2018-2022)

  • Front loaded average investment level of DKK 10/kg
  • Incremental investments of DKK 120/kg growth (25k tgw)

Completes upgrading of entire infrastructure in value chain

Total investments of DKK 5.3 billion (2013-2022)

Average cash conversion ratio1 2016-2017 > 50%

Note 1: (Adj. EBITDA – capex – delta WC) / Adj. EBITDA

DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN

  • 7% supply growth expected in 2018
  • 1% in Europe
  • 13% in Americas
  • 4% supply growth expected in 2019
  • 6% in Europe
  • 2% in Americas
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e		 1,
28
7		 1,
24
6		 1,
31
4		 1,
34
4		 1,
27
9		 1,
33
4		 1,
34
9		 1,
43
0
Ch
ile		 31
8		 41
7		 50
8		 52
9		 45
4		 50
8		 58
7		 59
7
Ca
nad
a		 123 104 85 122 13
1		 125 13
1		 137
U
SA		 18 18 22 18 20 20 17 16
To
tal
A
ric
me
as		 45
9		 53
9		 61
5		 66
9		 60
6		 65
2		 73
5		 75
0
Ot
he
r		 45 47 54 64 115 51 91 91
To
tal
(
So
ld
Qu
tity
)
an		 1,
79
1		 1,
83
2		 1,
98
4		 2,
07
8		 2,
00
0		 2,
03
7		 2,
175		 2,
27
1
Su
- G
ly
th
lob
al
pp
g
row		 2
%		 8
%		 5
%		 4
%
‐		 2
%		 7
%		 4
%
Su
ly
th
- E
pp
g
row
uro
pe		 3
%
-		 6
%		 2% %
5
-		 4% 1% 6
%
Su
ly
th
- A
rica
pp
g
row
me
s		 17% 14% %
9		 %
10
-		 %
8		 %
13		 2%

Comments:

All figures are in hog‐equivalents and thousand tonnes.

Figures represents sold quantity of Atlantic Salmon from each producing country

Sa
lm
M
ark
ets
(
he
ad
tte
d -
HO
G)
on
on
gu
20
15		 20
16		 20
17		 20
18E		 20
19E
EU 974 943 922 956 1,
004
US
A		 380 380 397 436 46
1
Jap
an		 54 59 58 54 56
ssi
Ru
a		 94 70 69 94 97
he
Ot
rs		 575 549 592 636 652
To
tal
(
So
ld
Qu
tity
)
an		 2,
078		 2,
000		 2,
037		 2,
175		 2,
270
  • Nasdaq Norway price EUR 5.7 in Q3 2018
  • 5% decrease vs. Q3 2017
  • 20% decrease vs. Q2 2018
  • 1% increase in Urner Barry East Coast price
  • 2.2% decrease in DKK
M
A
R
K
E
T
C
U
R
R
E
N
C
Y		 Q
3
2
0
1
8		 Q
3
2
0
1
7		 C
ha
%
ng
e
Na
da
No
(
E
U
R
)
s
q
rw
ay		 3
5.
7		 6.
0
1		 4.
6
%
-
O
U
B
No
t
h
Ea
t
U
S
1
4-
1
6
l
b
H
G
(
U
S
D
kg
)
r
s
p
er		 8.
3
0		 8.
2
2		 0.
9
%
D
K
K		 Q
3
2
0
1
8		 Q
3
2
0
1
7		 C
ha
%
ng
e
Na
da
No
s
q
rw
ay		 4
2.
7
4		 4
4.
6
9		 4.
4
%
-
U
B
No
h
Ea
U
S
1
4-
1
6
l
b
H
O
G
(
kg
)
t
t
r
s
p
er		 5
3.
2
4		 5
2.
0
8		 2.
2
%

Source: Kontali

PRICE US – NORTH EAST

SUPERIOR BIOLOGY COMBINED WITH STATE OF THE ART INFRASTRUCTURE

FIS
HM
EA
L,
OIL
AN
D F
EED		 BR
OO
DST
OC
K		 SM
OL
T		 SEA
W
AT
ER		 PR
OC
ESS
ING		 /
SA
LES
MA
RK
ETI
NG
CU
RR
EN
T
CA
PA
CIT
Y		 len
0k
(
)
Equ
iva
10
t to
tgw
ual
ha
st @
ann
rve
of
rin
e in
dex
44
%
ma		 No
ne		 mil
lion
12
@
20
0 g
ram
s		 far
/
fjo
rds
21
min
ites
17
g s
lt/
55k
(
)
@
100
tgw
g s
mo
(
)
65k
@
500
lt
tgw
g s
mo
ell
boa
4 w
ts
2 s
ice
ls
erv
ve
sse		 k p
(
)
130
rim
tgw
ary
k se
dar
(
)
40
tgw
con
y
l (
)
80k
cka
ing
ria
ate
tgw
pa
g
m		 al s
ale
Ce
s F
ntr
aro
es
les
off
ice
UK
sa
off
US
sal
ice
es
ndi
Bra
ng
/
ON
GO
ING
PLA
NN
ED
INV
EST
ME
NT
S		 (
)
Ad
dit
ion
al 6
5k
tgw
ual
ha
st @
ann
rve
rin
e in
dex
of
%
44
ma		 Ow
n b
din
ree
g p
rog
ram
me
Ful
l se
lf s
uff
icie
ncy		 19
mil
lion
@
50
0 g
ram
s		 inf
Up
ded
tru
ctu
gra
ras
re
h t
Fis
tio
rta
ran
spo
n
R&
D		 Sel
ed
rad
ing
ect
upg
,
ffic
and
fu
alit
ien
ion
nct
e
cy
y		 /sa
Ma
rke
tin
les
init
iati
g
ves
rke
Ma
tio
t p
tra
ene
n
PU
RP
OS
E		 Sus
tai
nab
le G
th
row
Fle
xib
ility
Eff
/st
mli
icie
nin
ncy
rea
g
tio
Inn
ova
n
Env
iro
al i
ent
ent
nm
mp
rov
em
d s
afe
Foo
ty		 Ad
tab
ility
loc
al b
iolo
to
ap
gy
duc
t d
iffe
Pro
tiat
ion
ren
t b
din
Sup
tra
teg
por
ran
g s
y
(
l pr
)
imm
ria
ate
rty
ope
Ind
nde
of
nal
ter
epe
nce
ex
lier
sup
p
s
rol
Ve
ina
ter
ont
ry c		 Sus
tai
nab
le g
th
row
Red
d e
e in
uce
xpo
sur
se
a		 (
)
76k
@
500
lt
tgw
>
g s
mo		 Pro
duc
ual
ity
t q
duc
Pro
atio
t p
ent
res
n
duc
t d
iffe
Pro
tiat
ion
ren
sh
miu
rod
Fre
uct
pre
m p
abi
lity
cap		 Pre
miu
rice
hie
ent
m p
ac
vem
Red
d s
rice
nsi
tiv
ity
t p
uce
po
se
low
Ma
int
ain
to
ex
pos
ure
ing
le m
ark
ets
s

Entire infrastructure wholly owned and on balance sheet

•

DEVELOPMENT PER QUARTER Q1 2015 – Q2 2018

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

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 was paid 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
  • 51,060 inhabitants (Sept 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.: ~36%
  • Private service: ~33%
  • Construction: ~16%
  • Fish & aquaculture: ~15%
  • Unemployment rate (Aug 2018): 1.5%
  • Total working force (July 2018): 27,977
  • GDP: DKK ~19.2bn (2018e)
  • GDP/capita: DKK 380,000 (2018e) (Norway: DKK 463,000) (2017)

Total export of fish products (2017)

  • DKK 8,412 million 10% increase from 2016
  • whereof farmed fish accounts for 46%

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

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

Subscribe Oslo Stock Exchange Releases from BAKKA by e-mail on: http://www.bakkafrost.com/en/bakkafrost_investor/

BAKKAFROST / Q3 2018 PRESENTATION

Page 44

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