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Bakkafrost P/f

Investor Presentation • Aug 21, 2018

7331_rns_2018-08-21_cff70537-3829-4df7-b2c2-d052d341191d.pdf

Investor Presentation

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Q2 2018

BAKKAFROST GROUP Oslo 21 August 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 Q2 2018

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

HIGHLIGHTS

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*) Including internal sales of 14,656 tonnes in Q2 2018 (16,012 tonnes in Q2 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 volumes. The VAP result was negative again, but the FOF segment had a good result.

  • Farming/VAP margin increased from 29.77 NOK/kg in Q2 2017 to 37.41 NOK/kg in Q2 2018
  • VAP segment had a margin of -11.00 NOK/kg in Q2 2018, compared to -13.01 NOK/kg in Q2 2017
  • Farming margin was 39.09 NOK/kg in Q2 2018, compared to 33.50 NOK/kg in Q2 2017
  • FOF delivered a strong EBITDA margin of 20.2% in Q2 2018, compared to 15.1% in Q2 2017
  • Group Operational EBIT was DKK 408 million in Q2 2018, compared to DKK 459 million in Q2 2017
(
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  • SUMMARY OF Q2 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

MARKETS & SALES

Same trend in Q2 2018 as in previous quarter. Sales to Eastern Europe and Asia increased, and sales to EU decreased. Sales to USA was nearly flat in Q2 2018, compared to Q2 2017. VAP on contract was on a low level at 16%

  • EU market decreased from 46% in Q2 2017 to 27% in Q2 2018
  • USA was nearly flat at 15%, compared to 16%
  • Asia increased from 16% to 25%
  • Eastern Europe increased from 22% to 33%
  • Harvest volumes used in VAP was 15% in Q2 2018, compared to 29% in Q2 2017
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ACQUISITION OF US SALMON IMPORTER – NORTH LANDING

The acquisition has been closed in Q3 2018

  • North Landing – Sales office, handling and processing facilities in Clifton, New Jersey
  • Market access
  • Serve Bakkafrost's customers in the US market

GLOBAL MARKETS

Large price reduction during Q2 2018

  • Exceptionally large price change during Q2 2018
  • Price change (low/high) of NOK 24.88 ~44% from NOK 56.09 to NOK 80.97
  • y/y by 1.14 NOK/kg ~2% from NOK 69.03 to NOK 70.17
  • q/q by 9.03 NOK/kg ~15% from NOK 61.14 to NOK 70.17

Increased global supply in Q2 2018

8% increased global supply in Q2 2018, compared with Q2 2017, corresponding to 37,800 tonnes

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

Change in global market supply and market price

DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN

8% supply growth in Q2 2018

  • European harvest was flat
  • Americas harvest increased by 16%

8% growth from Norway

Increasing harvest during the quarter

Scotlandlow due to few individuals for harvest

Chileangrowth much higher than expected

  • Good productivity/increased harvest weights
  • Higher than expected number of individuals
  • Low comparator as Q2 2017 harvest was impacted by biological issues
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Notes:

All figures are in hog-equivalents and thousand tonnes.

Source: Kontali

Strong momentum in most markets

EU performed well

  • Contract prices below spot early in the quarter
  • Spot demand fuelled by lower prices latter part of the quarter

Strong US growth at increased prices

Close to all time high quarterly price

Russia – continued strong growth

Mainly driven by Chile

Greater China/ASEAN

  • Strong combined growth
  • Inaccurate quarterly number – should be read in concert

Japan impacted by currency

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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 – Fairly high growth
  • Norway driven by new licences and expected improved biological performance
  • Scotland expected to recover from Q4 2018 after three weak quarters
  • Americas
  • Chile expected to grow modestly due to regulatory constraints

Source: Kontali

SUPPLY - TOTAL

  • SUMMARY OF Q2 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

First salmon meal and -oil produced at Havsbrún

FARMING – HARVEST VOLUME

Harvested volumes

  • Harvested volumes decreased by 30% in Q2 2018, compared with Q2 2017
  • The harvest in Q2 2018 was in the North Region only
  • Average weight of harvested fish in Q2 2018 was 4.8 kg head on gutted

Smolt transfer

Bakkafrost transferred 2.8 million smolts in Q2 2018 (1.9 million smolts in Q2 2017)

Seawater temperatures in the Faroe Islands

Temperatures in Q2 2018 were 0.11oC down from 8.53oC in Q2 2017 to 8.42oC in Q2 2018

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

FARMING – OPERATIONAL PERFORMANCE

Improved production costs and higher prices had positive effect on performance, but volumes were lower in Q2 2018, compared to Q2 2017

  • The operational EBIT decreased from DKK 489 million in Q2 2017 to DKK 393 million in Q2 2018
  • Operational EBIT margin was 51% in Q2 2018, compared to 47% in Q2 2017
(
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n		 %
5
1		 %
4
7		 %
4
3		 %
4
8

A-06 Gulin 22 July 2018

Operation

  • Farming EBIT increased by NOK 5.59 per kg to NOK 39.09 in Q2 2018, compared to NOK 33.50 in Q2 2017
  • Non recurring gain included in operational EBIT of DKK 1.62 per kg in Q2 2018
  • Harvest in Q2 2018 was in the North Region only
  • A-13 Borðoyarvík in the North Region was harvested early, because of precautionary action to maintain a good biological situation

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

(
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VAP margin negative

  • Substantial decrease in revenue by 66% to DKK 94 million in Q2 2018, from DKK 273 million in Q2 2017
  • Operating EBIT in Q2 2018 was DKK -17 million, compared with DKK -54 million in Q2 2017

High raw material prices and lower activity in Q2 2018

  • The low production activity and high salmon spot prices in Q2 2018 resulted in negative margins in the VAP segment
  • Operational EBIT per kg was NOK -11.00 in Q2 2018, compared to NOK -13.01 in Q2 2017
(
)
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FISHMEAL, OIL AND FEED (FOF)

Margins reduced from previous quarter, Fishmeal, Oil and Feed but still strong

  • EBITDA of DKK 66 million in Q2 2018, compared with DKK 48 million in Q2 2017
  • EBITDA margin of 20.2% in Q2 2018, compared with 15.1% in Q2 2017
  • Feed sales decreased, due to lower biomass in sea
(
)
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Raw material sourcing increased

Havsbrún sourced 27% less raw material in Q2 2018, compared to Q2 2017

Sourcing of raw material (tonnes)

* Including sales to Bakkafrost, corresponding to ~ 94% of feed volumes in Q2 2018 (Q2 2017: 94%)

MARKET CONDITIONS FEED

Feed sales lower

  • Quantity of feed sold was 15,673 tonnes in Q2 2018, compared to 17,032 tonnes in Q2 2017
  • Biomass on lower level in Q2 2018, compared to Q2 2017.
  • External feed sales on same level in Q2 2018, compared to Q2 2017.

The market prices for fish oil dropped significantly in the quarter

  • Both fishmeal and fish oil prices decreased in Q2 2018, compared with Q1 2018
  • Fishmeal prices dropped moderately, but still not on 2017 levels
  • Fish oil prices in Q2 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 Q2 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

Bakkafrost HQ Glyvrar

  • Revenues on lower level in Q2 2018 due to lower harvest. Revenues in Q2 2018 amounted to DKK 954 million, compared to DKK 1,206 million in Q2 2018.
  • Operational EBIT in Q2 2018 decreased to DKK 408 million, compared to DKK 459 million in Q2 2017
  • Fair value of biomass increased due to higher salmon prices, compared to the end of last quarter and provisions for onerous contracts increased
  • Revenue tax, recognized as cost, amounted to DKK -31 million in Q2 2018, compared to DKK -45 million in Q2 2017
  • Financial items amounted to DKK 9 million and taxes amounted to DKK -74 million in Q2 2018
  • Profit after tax for Q2 2018 was DKK 339 million, compared to DKK 398 million in Q2 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 1,378 676 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 at the end of Q2 2018 are unchanged from year end 2017
  • Investments in PPE of DKK 131 million in Q2 2018 and PPE amounts to DKK 2.7 billion
  • Financial assets amount to DKK 79 million
  • The carrying amount of biological assets amounts to DKK 1,107 million, whereof fair value adjustment amounts to DKK 329 million
  • Inventory amounts to DKK 479 million at the end of Q2 2018, compared to DKK 306 million at the end of 2017
  • Changes in equity consist primarily of the positive results and paid-out dividend in Q2 2018. Equity ratio is 68% at the end Q2 2018
  • NIBD at DKK 443 million up from DKK 258 million at end 2017
(
)
D
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5

CASH FLOW

  • Cash flow from operations amounted to DKK 279 million in Q2 2018, compared to DKK 498 million in Q2 2017
  • Cash flow from investments represents net investments in PPE, which amounted to DKK -108 million in Q2 2018, compared to DKK -170 million in Q2 2017
  • Cash flow from financing is affected by paidout dividend and change in interest-bearing debt
(
)
D
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Net Interest-Bearing Debt

  • Cash flow from operating activities decreased the NIBD with DKK 421 million in Q2 2018
  • Dividend payment increased the NIBD with DKK 511 million in Q2 2018
  • Net investments, change in working capital and other in Q2 2018 increased the NIBD with DKK 252 million

Development in NIBD in DKK millions

Financing end Q2 2018

  • Bank facilities of EUR 200 million
  • NIBD: DKK 443 million
  • Undrawn loan facilities: DKK 1,039 million

NIBD and available funding

  • SUMMARY OF Q2 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

A-18 Hovsfjørður - new exposed site in Suðuroy employed in June 2018

Market

  • Global supply in Q2 2018 increased around 8%
  • Global harvest increase in 2018 expected to be around 6-8% (4% at last presentation)
  • Supply growth next three quarters expected to be between 3-5%

VAP

Contracted around 12% of expected harvest for the rest of 2018

Fishmeal, Oil and Feed

  • Feed sales in 2018 is expected to be around 80,000 tonnes
  • The new salmon meal and -oil production started operation in Q3 2018

Farming

  • Bakkafrost's harvest forecast for 2018 is reduced by 2,000 tonnes gw. Bakkafrost expects to harvest 49,000 tonnes gw 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

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 Q2 2018

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

Hatchery Strond, Klaksvík under construction First batch of eggs came into the hatchery 19 June 2018. At full operation in 2019/2020, the hatchery is expected to produce 7 million smolts at 500 gram each.

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 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 eastside – 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

  • SUMMARY OF Q2 2018
  • MARKETS AND SALES
  • SEGMENT INFORMATION
  • GROUP FINANCIALS
  • OUTLOOK
  • INVESTMENT PLAN 2018 - 2022
  • APPENDIX

DEVELOPMENT IN HARVESTED AND SOLD QUANTITY BY ORIGIN

8% harvest growth in 2018

  • The estimated supply growth increased during Q2 from 7% to 8%
  • Norway increased 2.4% from 1,156 to 1,184 tonnes
  • Chile increased 3.0% from 561 to 578 tonnes
  • Supply growth expected to come down to 3% in 2019
  • Highest share of supply growth is behind us
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Ire
lan
d		 1
4		 1
4		 1
5		 1
3		 1
5
Fa
roe
s		 6
8		 7
1		 7
2		 6
1		 7
1
To
ta
l
Eu
ro
p
e		 1,
3
4
4		 1,
2
8
1		 1,
3
2
2		 1,
4
0
0		 1,
4
6
4
C
h
i
le		 5
2
9		 5
0
3		 4
9
0		 5
7
8		 5
7
9
Ca
da
na		 1
2
2		 1
3
1		 1
2
6		 1
3
4		 1
3
7
U
S
A		 1
8		 2
0		 2
0		 1
6		 1
6
To
l
Am
ica
ta
er
s		 6
6
9		 6
5
4		 6
3
5		 7
2
8		 7
3
2
O
he
t
r		 6
4		 6
4		 8
7		 8
0		 8
8
To
ta
l
(
So
l
d
Q
t
i
ty
)
ua
n		 2,
0
7
8		 2,
0
0
0		 2,
0
3
5		 2,
2
0
7		 2,
2
8
4
Su
ly
h
G
lo
ba
l
t
p
p
g
ro
w
-		 5
%		 4
%
‐		 2
%		 8
%		 3
%
Su
ly
t
h -
Eu
p
p
g
row
rop
e		 2
%		 5
%
‐		 3
%		 6
%		 5
%
Su
ly
t
h -
Am
ica
p
p
g
row
er
s		 %
9		 %
2
‐		 %
3
‐		 %
1
5		 %
1
Sa
(
O
G
)
lm
Ma
ke
ts
H
on
r
2
0
1
5		 2
0
1
6		 2
0
1
7		 2
0
1
8
E		 2
0
1
9
E
E
U		 9
7
4		 9
3
4		 9
2
0		 9
8
6		 1,
0
0
6
U
S
A		 3
8
0		 3
8
0		 3
9
6		 4
3
4		 4
5
6
Ja
p
an		 5
4		 5
9		 5
8		 5
5		 5
6
Ru
ia
ss		 9
4		 0
7		 6
8		 8
2		 8
9
he
O
t
rs		 5
7
5		 5
4
9		 5
9
3		 6
5
0		 6
7
6
(
So
Q
)
To
ta
l
l
d
t
i
ty
ua
n		 2,
0
7
8		 2,
0
0
0		 2,
0
3
5		 2,
2
0
7		 2,
2
8
4

Notes:

All figures are in hog-equivalents and thousand tonnes.

Figures represent sold quantity of Atlantic Salmon from each producing country

Source: Kontali

Q2 2018 MARKET ENVIRONMENT

  • Decreasing prices during the quarter
  • Nasdaq Norway price EUR 7.2 in Q2 2018
  • 1% decrease, compared to Q2 2017
  • 15% increase, compared to Q1 2018
  • Urner Barry East Coast price increased 11%
  • 2% increase in DKK
M
A
R
K
E
T
C
U
R
R
E
N
C
Y		 Q
2
2
0
1
8		 Q
2
2
0
1
7		 C
ha
%
ng
e
Na
da
No
(
E
U
R
)
s
q
rw
ay		 7.
1
7		 7.
2
2		 0.
7
%
-
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
5		 8.
6
1		 1
0.
6
%
D
K
K		 Q
2
2
0
1
8		 Q
2
2
0
1
7		 C
ha
%
ng
e
Na
da
No
s
q
rw
ay		 5
3.
3
7		 5
3.
7
0		 %
0.
6
-
U
B
No
h
Ea
U
S
1
4-
1
6
l
b
H
O
G
(
kg
)
t
t
r
s
p
er		 5
9.
4
9		 5
8.
1
2		 2.
4
%

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

•Entire infrastructure wholly owned and on balance sheet

DEVELOPMENT PER QUARTER Q1 2015 – Q2 2018

(
D
K
K
)
m		 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		 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
O
io
l
E
B
I
T
t
p
e
ra
na		 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
/
Lo
t
o
s
s		 3
3
9		 2
2
7		 2
2
-		 6
5		 3
9
8		 9
7		 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
t
rv
e
s
g
w		 1
2,
9
0
2		 1
2,
2
3
7		 1
1,
4
0
7		 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,
2
6
7
O
E
B
I
T
Fa
ing
&
V
A
P
(
N
O
K
/
kg
)
p.
rm		 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		 %
6
8		 %
6
9		 %
7
0		 %
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		 3
4
4		 1
0
2		 2
8
5		 3
6
5		 6
0
5		 9
4
5		 6
3
5		 0
5
4		 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
  • 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

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

5 years development NOK/share

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

BAKKAFROST / Q2 2018 PRESENTATION

Page 45

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