Frøy ASA — Investor Presentation 2021

Jun 10, 2021

Frøy ASA North Atlantic Seafood Forum June 2021

Important notice

This presentation (the "Presentation") has been prepared by Frøy ASA (the "Company" and together with its subsidiaries (the "Group"). This Presentation has been prepared for information purposes only. This Presentation does not constitute an offer to buy or subscribe for any shares in the Company.

This Presentation speak only as of its date, and the views expressed are subject to change based on a number of factors, including, without limitation, macroeconomic and equity market conditions, investor attitude and demand, the business prospects of the Group and other specific issues. This Presentation and the conclusions contained herein are necessarily based on economic, market and other conditions, as in effect on, and the information available to the Company as of, its date. This Presentation does not purport to contain a complete description of the Group or the market(s) in which the Group operates, nor does it provide an audited valuation of the Group. The analyses contained in this Presentation are not, and do not purport to be, appraisals of the assets, stock or business of the Group or any other person.

Neither the Company nor any of its affiliates (nor any of its or their respective directors, officers, employees, professional advisers or representative) makes any representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of such information. No responsibility or liability (whether in contract, tort or otherwise) is or will be accepted by the Company or any of its affiliates (or any of its or their respective directors, officers, representatives, employees, advisers or agents) as to, or in relation to, this Presentation.

This Presentation contains forward looking information. The words "believe", "expect", "could", "may", "anticipate", "intend" and "plan" and similar expressions identify forward-looking statements. All statements other than statements of historical facts included in this Presentation are forward-looking statements. Such forwardlooking statements involve known and unknown risks, uncertainties and other factors which may cause the Group's actual results, performance, achievements and value to be materially different from any future results, performance, achievements or values expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. No warranty or representation is given by the Company as to the reasonableness of these assumptions. Further, certain forward-looking statements are based upon assumptions of future events that may not prove to be accurate.

This Presentation is governed by and shall be construed in accordance with Norwegian law with Oslo District Court as legal venue.

This is Frøy

Leading competence and infrastructure partner to the salmon farming industry

Provider of businesscritical salmon farming services

Frøy assists salmon farmers with maintaining efficient day-to-day farming operations at sea.

Team of 670 specialized aqua service professionals and a modern fleet of 85 vessels1

Long term partner with salmon farmers

+20-year track record of creating new efficient and sustainable aqua service solutions in cooperation with salmon farmers

Long term contracts with global leading salmon farmers. NOK 6.500 million backlog incl. options.

i i i i Scalable operational platform with multiple growth initiatives

Ongoing newbuild program est. minimum EBITDA contribution of NOK 250-310m

In dialogue with clients regarding new projects

Opportunistic approach to M&A

Returning excess capital to shareholders

Dividend policy backed by long term contracts and high cash conversion

Ambition to pay minimum 50% of net profit as dividend when NIBD/EBITDA on a fully invested basis is at or below 3.5x

1) Including newbuilds and chartered vessels.

Frøy service offering

Delivering solutions to salmon farmers to control biological risk and maximize operational efficiency at sea

Site infrastructure services

• Installation of mooring, nets and other site infrastructure
• Maintenance and inspection of installed base of assets

i i i Biological optimization

• Biological treatments, removing sea lice and disease treatment
• Cleaning of nets to ensure optimal oxygen levels and growth conditions in the pens

Logistics

• Safe and efficient transport of salmon
• Sorting, counting and MAB control
• Feed and cargo transport

Local experts in all Norwegian salmon farming regions

Broad service offering across production areas

Local expertise and scale benefits

670

Contract backlog NOK 6.500m1

Fixed backlog

• Total fixed revenue commitments of more than NOK 4.0 billion
• Wellboat fleet with weighted avg. backlog coverage of approx. 5 years1

Options

• Most fixed time charter contracts include extension options
• Total options of more than NOK 2.4 billion

Backlog (NOKm)

Stable historical return profile

Stable historical returns without correlation to salmon prices

Return on capital employed

Note 1: ROCE defined as Operating profit / (Avg. Beginning and end of year fixed assets and net working capital)

Note 2: ROE defined as net income / (Avg. equity beginning and end of year)

Note 3: Historical ROCE graph based on: 2020 proforma, 2018 and 2019 consolidated financial statements for Frøygruppen AS, 2015-2017 aggregated NGAAP figures for Frøy Akvaservice AS, Frøy Akvaresurs AS, Frøy Vest AS, Frøy Nord AS, NCE AS, Stava Sjø AS, Evja AS, Frøy Rederi AS, Fisketransport AS. 2015-2017 figures are aggregated figures excluding eliminations.

Growth backed by newbuilds on long term contracts

6 new wellboats and 9 service vessels Scheduled for delivery 2021-2023

Based on Frøy target minimum ROE requirement of 10-18% Est. minimum EBITDA NOK 250- 310m from newbuilds

5- 8 years fixed contracts On all wellboat newbuilds

Newbuild program 2021-2023

Service

+ 17%

Addition to current # vessels

Wellboat

+ 46%

Addition to current # vessels

Capital allocation

Illustrative cash conversion1 excl. newbuild program

Note 1 ) Estimated normalized maintenance capex level

Minimum dividend % of net profit..

..when the fully invested NIBD/EBITDA is at or below

IPO primary proceeds of NOK 1,000 million

Listed on Oslo Børs since March 29 ²⁰²¹ Ticker FROY

Market cap NOK 5,2 billion

3,865 shareholders

Financial calendar

• Aug 26 2021: 2Q results
• Nov 11 2021: 3Q results

Home page

www.froygruppen.no

Contact info

Investor relations

Sondre.Vevstad@froygruppen.no

Appendix

Share information 31.03.21

Total number of shares 31.03.21

• 86 348 605 shares outstanding

Total number of shares owned by 20 largest shareholders

• 90,4% of total number of shares outstanding

Non-IFRS financial measures / Alternative Performance Measures

• The non-IFRS financial measures/APMs presented herein are not measurements of performance under IFRS or other generally accepted accounting principles and investors should not consider any such measures to be an alternative to: (a) operating revenues or operating profit (as determined in accordance with IFRS or other generally accepted accounting principles), as a measure of the Groupʹs operating performance; or (b) any other measures of performance under generally accepted accounting principles. The non-IFRS financial measures/APMs presented herein may not be indicative of the Groupʹs historical operating results, nor are such measures meant to be predictive of the Groupʹs future results.
• The Company believes that the non-IFRS measures/APMs presented herein are commonly reported by companies in the markets in which it competes and are widely used by investors in comparing performance on a consistent basis without regard to factors such as depreciation, amortisation and impairment, which can vary significantly depending upon accounting methods (particularly when acquisitions have occurred), business practice or based on non-operating factors. Accordingly, the Group discloses the non-IFRS financial measures/APMs presented herein to permit a more complete and comprehensive analysis of its operating performance relative to other companies and across periods, and of the Groupʹs ability to service its debt. Because companies calculate the non-IFRS financial measures/APMs presented herein differently, the Groupʹs presentation of these non-IFRS financial measures/APMs may not be comparable to similarly titled measures used by other companies.
• The non-IFRS financial measure/APMs are not part of the Companyʹs consolidated financial statements and are thereby not audited. The Company can give no assurance as to the correctness of such non-IFRS financial measures/APMs and investors are cautioned that such information involve known and unknown risks, uncertainties and other factors, and are based on numerous assumptions. Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these non-IFRS financial measures/APMs.

APMs and Key Figures

Non-IFRS financial measures / Alternative Performance Measures

• EBITDA is defined as total revenue less operating expenses (direct expenses, employee benefit expenses and other operating expenses).
• EBITDA is used by the management as measure the Groupʹs ability to service debt and finance investments. Management believes the measure enables an evaluation of operating performance and a basis to allocate resources to the segment.

Reconciliation of EBITDA – NOK millions

NOKm	2020
Total revenue	1561
Direct expenses	221
Employee benefit expenses	456
Other operating expenses	299
EBITDA	585

APMs and Key Figures

Non-IFRS financial measures / Alternative Performance Measures

ROCE defined as last 12 months Operating profit / (Avg. Beginning and end of year fixed assets and net working capital)

Net working capital defined as: Receivables - Payables

Calculations based on: 2020 proforma and 2018 and 2019 consolidated financial statements for Frøygruppen AS

Frøy ASA	2018	2019	2020
EBIT	177	274	319
Fixed Assets	1732	2056	4154
Receivables	124	185	156
Payables	110	129	282
ROCE	10,7 %	14,2 %	10,4 %

Frøy subsidiaries - historical NGAAP financials

Frøy Rederi AS	2014	2015	2016	2017
EBIT	24	28	35	57
Fixed Assets	282	469	544	949
Receivables	5	11	12	20
Payables	3	5	36	8
Fisketransport AS	2014	2015	2016	2017
EBIT	5	6	1	2
Fixed Assets	8	6	4	2
Receivables	3	2	0	0
Payables	1	1	1	0
Frøy Akvaservice AS	2014	2015	2016	2017
EBIT	21	25	34	42
Fixed Assets	113	159	212	210
Receivables	15	13	18	25
Payables	5	5	14	20
Frøy Vest AS	2014	2015	2016	2017
EBIT	6	21	19	8
Fixed Assets	16	101	105	89
Receivables	3	17	16	19
Payables	3	6	4	6
Aggregated figures	2014	2015	2016	2017
EBIT	67	87	120	143
Fixed Assets	490	867	1020	1527
Receivables	29	51	51	85
Payables	14	28	81	45
NWC	16	23	-31	41
ROCE based on aggregated figures		12,5 %	12,7 %	11,2 %

Frøy Akvaressurs AS	2014	2015	2016	2017
EBIT	0	3	14	9
Fixed Assets	45	109	131	158
Receivables	0	3	1	5
Payables	0	2	17	2
Frøy Nord AS	2014	2015	2016	2017
EBIT	3	2	10	16
Fixed Assets	0	1	3	103
Receivables	0	1	1	11
Payables	1	7	4	6
Stava Sjø AS	2014	2015	2016	2017
EBIT	5	2	6	8
Fixed Assets	10	10	9	4
Receivables	2	2	2	4
Payables	1	2	4	2
Evja AS	2014	2015	2016	2017
EBIT	3	1	1	1
Fixed Assets	14	13	12	12
Receivables	0	0	0	0
Payables	0	0	0	0