Leroy Seafood Group — Earnings Release 2020

Feb 19, 2021

Q4 2020

FEBRUARY 19TH 2021

II

Our goal is to create the world's most efficient and sustainable value chain for seafood. The large, extensive investments we have made over a long period of time are now starting to yield results.

Turnover Lerøy Seafood Group

Highlights

• EBIT pre FV adj. NOK 441m
• Continued impact from Covid-19. Lower price realisation the driver for y-o-y fall in profitability
• Growth from post smolt investments on track, and expect significant growth in 2021 for salmon and trout
• Expect harvest incl. associated between 205-210'' GWT for 2021
• Potential for further growth beyond this
• Expect whitefish volume around 73 000 tonnes for 2021

	Q4 2020	Q4 2019	2020	2019
Harvest volume salmon&trout (GWT)	48 349	42823	170849	158 178
Catch volume whitefish (tonnes)	12 6 19	12 950	68419	62 497
Revenue (NOKm)	5 1 7 0	5 2 3 9	19 960	20427
EBIT before FV adj. (NOKm)	441	769	1950	2734
ROCE before FV adj.	9,6%	16,8%	10,5%	15,5%

• Spot prices below last year
• NSI Q4/20 NOK 43.4 vs NOK 56.1 in Q4/19 (-23%)
• Down NOK 4/kg q-o-q, and down NOK 13/kg y-o-y
• Trout market more balanced than earlier quarters in 2020
• Contract share for salmon 32% , price realisation on contracts higher than spot
• Cost (RFS) further down from Q3/20
• EBIT/kg in farming in Q4/20 of NOK 6.1 compared to NOK 14.0 in Q4/19

Farming volumes
	2015 GWT	2016 GWT	2017 GWT	2018 GWT	2019 GWT	2020 GWT	2021E GWT
Lerøy Aurora AS	29 200	30 000	39 200	36 800	32 800	35 000	~47 000
				66 500	64 800	67 900	~70 000
Lerøy Midt AS	71 400	52 200	64 500
Lerøy Sjøtroll	57 100	68 000	54 000	58 800	60 600	68 000	~75 000
Total Norway	157 700	150 200	157 800	162 000	158 200	170 900	~192 000
Norskott Havbruk (UK)*	13 500	14 000	15 500	13 700	12 900	12 000	~18 000

• Q4 2020 Wildcatch highlights - A challenging quarter, significantly impacted by Covid-19, and lower price realisation. Since price top in Q1, pre Covid, the prices for cod is down 18% and haddock 17%
• Catch volume at 12 619 tonnes. Basically in line with last year, but lower catches of haddock
• challenging in Q4
• EBIT 2020 of NOK 205m compared to NOK 293m in 2019
• Framework conditions continue to be challenging for the processing industry, with no signs of improvement

Catch volumes Havfisk/Wild Catch

	Catch volume Q4/20	Catch volume Q4/19	2020	2019
Cod	7 022	7 215	23 594	22 516
Saithe	2 089	1 595	14 547	11 527
Haddock	994	1907	7402	8696
Shrimps	16	0	6 348	9 917
Other	2 498	2 232	16 528	9 841
Total
	12 619	12 949	68 419	62 497

Q4 2020 VAPS&D highlights

• Significant increase in most aspects of risk due to Covid-19. Clear impact from the second wave of lockdowns in Q4/20, and a big shift of volumes from the HoReCa market to the retail market
• Underlying operational improvements in key operations are yielding results and supporting profitability development. Continued potential for improvements
• EBIT margin of 3.6% up from 3.3% in same quarter last year. EBIT in Q4/20 of NOK 176m compared to NOK 162 in Q4/19

Key financial figures

Key financial figures – Q4 2020
(NOKm)	Q4 2020	Q4 2019	▲%
Revenue	5 170	5 239	-1 %
Other gains and losses	1	17
EBITDA	750	1 031	-27 %
Depreciation & amortisation	309	262
EBIT*	441	769	-43 %
Income from associates*	54	39
Net finance	-23	-56
Pre-tax profit*	473	752	-37 %
EPS (NOK)*	0,62	0,94	-34 %
Salmon and trout harvest volume (GWT)	48 349	42 823	13 %
	9,3	17,0
EBIT* all incl. excl. Wildcatch/kg
		12 949	-3%
Whitefish catch volume (tonnes)
EBIT/kg Wildcatch	12 619
	-0,6	3,2
ROCE* (%)	9,6 %	16,8 %

Key financial figures – 2020
(NOKm)	2020	2019	▲%
Revenue	19 960	20 427	-2 %
Other gains and losses	7	27
EBITDA	3 109	3 746	-17 %
Depreciation & amortisation	1 159	1 012
EBIT*	1 950	2 734	-29 %
Income from associates*	161	198
Net finance	-241	-215
Pre-tax profit*	1 869	2 718	-31 %
EPS (NOK)*	2,46	3,48	-29 %
	170 849	158 178	8 %
	10,2	15,5
Salmon and trout harvest volume (GWT)
EBIT* all incl. excl. Wildcatch/kg
Whitefish catch volume (tonnes)	68 419	62 496	9 %
EBIT/kg Wildcatch segment	3,1	4,5
ROCE* (%)	10,5 %	15,5 %

Balance sheet

(NOKm)	31.12.2020	31.12.2019	▲%
Intangible assets	8 325	8 154
Right-of-use-assets	2 429	2 378
Tangible fixed assets	6 797	6 230
Financial non-current assets	1 151	1035
Total non-current assets	18 702	17 797	5 %
Biological assets at cost	4 594	4 402
Fair value adjustment of biomass	320	1 173
Other inventory	1 095	1 031
Receivables	2 486	2 755
Cash and cash equivalents	2 966	3 031
Total current assets	11 461	12 393	-8 %
Total assets	30 163	30 189	0 %
Equity	17 633	17 763	-1 %
Equity ratio	58,5 %	58,8 %
NIBD	3 521	2 641	33 %

Change in NIBD
Change in NIBD	Q4 2020	Q4 2019	2020	2019
EBITDA before fair value adjustment on biological assets	750	1 030	3 109	3 746
Paid tax	-15	-9	-456	-690
Change in working capital	-185	-378	-279	-169
Other	-1	-15	-7	-27
NIBD impact from operating activities	549	628	2 367	2 859
New intangibles, fixed assets and right of use assets (from credit institutions), net a)	-503	-425	-1 833	-1 460
Dividends and interests received	19	65	54	304
Other changes in non-current assets	-23	4	-40	3
b) NIBD impact from investing activities	-508	-357	-1 821	-1 153
Dividends distributed	0	0	-924	-1 272
Installments paid on lease liabilities with other than credit institutions c)	-60	-50	-221	-206
Interests and other financial expenses	-42	-72	-254	-254
NIBD impact from financing activities	-102	-121	-1 400	-1 732
Implementation effect from IFRS 16	0	-2	0	-74
Other changes (currency conversion, unrealized agio etc)	16	3	-25	5
	16	1	-25	-69
d) NIBD impact from other changes (incl.currency effects)
				-95
Total change in NIBD	-45	150	-879
NIBD at beginning	3 476	2 792	2 641	2 546
Change in NIBD NIBD at end e)	45 3 521	-150 2 641	879 3 521	95 2 641

* Target communicated at the listing on Oslo Stock Exchange 03.06.2002

The dividend in the table above is the proposed dividend based on present year`s profit, for distribution in the following year.

EBIT per segment

* Before biomass adjustment

Lerøy Aurora

Lerøy Aurora
	Q4 2020	Q4 2019	2020	2019	Positive cost development
Revenue (NOKm)	749	862	1 977	2 134
EBIT* (NOKm)	165	340	434	702
			34 986	32 758
Harvested volume (GWT)	14 836	13 391
EBIT/kg* (NOK)	11.1	25.4	12.4	21.4

Positive cost development

• Cost improvement q-o-q. Signs of winter wounds in start of 2021 which will give some impact on price realisation in Q1/21
• Smolt development in Laksefjord according to plan. Facility finished and will be fully utilised in 2021
• Expect increase in RFS-cost coming quarter, with higher cost H1/21 compared to H2/21
• Significant growth potential going forward. Expected harvest volume in 2021 is 47,000 GWT, and growth potential beyond this

* Before biomass adjustment

Lerøy Midt

Lerøy Midt
Revenue (NOKm)	Q4 2020 745	Q4 2019 843	2020 3 734	2019 3 797
	52	155	788	934
EBIT* (NOKm) Harvested volume (GWT)	15 570	14 481	67 906	64 786
EBIT/kg* (NOK)	3.4	10.7	11.6	14.4
	EBIT*/kg

Soft quarter, but developing according to plan

• Harvesting smaller sizes salmon this quarter, impacting cost and price realisation, with cost up q-o-q • Expansion of smolt facility at Belsvik according to plan, will be finalised
• end 2021/start 2022, with impact on smolt release from 2022
• Currently expect some cost improvements in 2021 compared to 2020
• Expected harvest volume in 2021 of around 70,000GWT in 2021

Lerøy Sjøtroll

Lerøy Sjøtroll Q4 2020	Q4 2019	2020	2019
Revenue (NOKm) 876	820	3 454	3 233
EBIT* (NOKm) 82	105	159	425
Harvested volume (GWT) 17 943	14 951	67 957	60 635	2021 compared to 2020.
EBIT/kg* (NOK) 4.5	7.0	2.3	7.0

Positive development continues

• Positive development continue. Expect higher volume and lower costs in 2021 compared to 2020.
• Strong cost improvement in Q4/20 compared with previous quarters, and improvement seen for particularly salmon
• Improvement in trout market relative to salmon market seen in the quarter, and continuing into 2021. 40% of quarterly harvest volume was trout. Cost and price realisation below salmon
• Expects harvest volume of 75,000 GWT in 2021, with potential for growth beyond this

Wildcatch	(Lerøy Havfisk/LNWS)
	Q4 2020	Q4 2019	2020	2019	Challenging Q4
Revenue (NOKm)	520	514	2 574	2 544
EBITDA (NOKm)	41	84	398	456
EBIT (NOKm)	-10	42	205	293
Havfisk, catch volume	Q4 2020	Q4 2019	2020	2019
Cod	7 022	7 215	23 594	22 516	• Quota situation higher in 2021 than 2020
Saithe	2 089	1 595	14 547	11 527
	994	1907	7402	8696
				9 917
	16	0	6 348
	2 498	2 232	16 528	9 841
Haddock Shrimps Other Total	12 619	12 949	68 419	62 497
Havfisk, prices	Q4 2020	Q4 2019	2020	2019
Cod	31.4	35.9	34.9	34.5
Haddock	24.4	29.3	25,0	26.7

Havfisk, prices	Q4 2020	Q4 2019	2020	2019
Cod	31.4	35.9	34.9	34.5
Haddock	24.4	29.3	25,0	26.7
Saithe	15.9	15.1	14.7	13.7

Challenging Q4

• Demand impacted by Covid-19, impacting price realisation
• Covid-19 also with negative impact for the landbased processing industry, which was until Covid-19 imposed restrictions, showing improvements
• Quota situation higher in 2021 than 2020

VAPS&D –				VAP, Sales and Distribution
	Q4 2020	Q4 2019	2020	2019
Revenue (NOKm)	4 891	4 962	18 886	19 388
EBIT (NOKm)	176	162	475	480
EBIT margin	3.6%	3.3 %	2.5%	2.5%	(HotelRestaurantsCatring) to retail
		Revenue and EBIT margin (line graph)

Years of downstream investments starting to show potential

• Second wave of Covid-19 lock-down in key markets significantly impacting demand. Large volumes moved from the HoReCa (HotelRestaurantsCatring) to retail
• Positive underlying improvements in key operations gives margin increase y-o-y on lower revenue. Continued potential for improvements
• Long term trends for the seafood industry remains very positive, and with several new factories started in recent years significant potential in this segment in years to come 3 % 4 %

Norskott Havbruk (associate, 50% owned					by Lerøy Seafood Group)
	Q4 2020	Q4 2019	2020	2019	Expect significant growth into 2021
			1 699	1 834
Revenue (NOKm)	427	392
EBIT* (NOKm)	76	49	308	292
Harvested volume (GWT)	6 389	5 317	23.968	25 866	into 2021
EBIT/kg* (NOK)	11.9	9.3	12.9	11.3	into Q1/21
	EBIT*/kg				ever smolt release in 2020 at about 10m smolts.

^** Figures based on 100% basis

Expect significant growth into 2021

• into 2021
• Good biological performance in all regions, and low sealice levels going • Cost improvement in Q4/20 compared to Q4/19. Expect reduction in cost into Q1/21
• New smolt facility working well, improved smolt quality and size. Highest ever smolt release in 2020 at about 10m smolts.
• Significant potential for growth. Expected harvest volume in 2021 of 36,000GWT

Outlook

Atlantic Salmon - Supply

in tons WFE

Year	2015		2016		2017		2018		2019		2020		2021
Region	Volume	Change Volume		Change Volume		Change Volume		Change Volume		Change Volume		Change Volume		Change
Europe	1495400	1.8%	1 429 700	$-4.4%$	493 900	4.5 %	505 100	0.7%	650 500	9.7%	677 000		1.6 % 1 818 600	8.4%
Norway	234 200	2.9%	171 100	$-5.1%$	207 800	3.1%	253 400	3.8%	333 400	6.4%	369 200	2.7%	466 300	7.1%
United Kingdom	166 300	$-2.5%$	157 400	$-5.4%$	177 200	12.6 %	152 100	$-14.2%$	190 500	25.2 %	181 200	$-4.9%$	203 500	12.3 %
Faroe Islands	75 600	$-8.6%$	77 300	2.2%	80 300	3.9%	71 700	$-10.7%$	86 600	20.8 %	80 800	$-6.7%$	97 800	21.0 %
Iceland	3 600	$-18.2%$	8 100	125.0 %	11 600	43.2 %	13 600	17.2 %	24 500	80.1%	30 000	22.4 %	37 000	23.3 %
Ireland	15700	27.6 %	15 800	0.6%	17 000	7.6 %	14 300	$-15.9%$	15 500	8.4 %	15 800	1.9%	14 000	$-11.4%$
Americas	823 600	8.3%	732 900	$-11.0%$	797 200	8.8%	899 100	12.8 %	931 500	3.6%	037710	11.4 %	962 300	$-7.3%$
Chile	598 200	2.6%	504 400	$-15.7%$	564 200	11.9 %	660 100	17.0 %	690 300	4.6 %	778 400	12.8 %	682 100	$-12.4%$
Canada	135 200	42.3 %	146 000	8.0 %	137 000	$-6.2%$	146 400	6.9%	138 000	$-5.7%$	141 000	2.2%	140 500	$-0.4%$
Australia	54 400	29.5 %	50 900	$-6.4%$	61 200	20.2 %	62 600	2.3%	64 000	2.2%	77 800	21.6 %	84 500	8.6 %
USA	20 200	$-15.8%$	22 500	11.4 %	21 700	$-3.6%$	19 000	$-12.4%$	20 800	9.5%	20 400	$-1.9%$	18 000	$-11.8%$
Others	15 600	$-6.6%$	9 100	$-41.7%$	13 100	44.0 %	11 000	$-16.0%$	18 400	67.3 %	20 110	9.3%	37 200	85.0 %
Total	2 319 000	4.0%	2 162 600	$-6.7%$	2 291 100	5.9%	2 404 200	4.9%	2 582 000	7.4%	2 714 710		5.1 % 2 780 900	2.4%

Figures as per:

27.01.2021

Source: Kontali

Quarter 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

	$\Omega$ 1		26 29			34 40 27 36 47 41 58 65 60 61				68	45
	Q 2	26	36 41 38 28			42 40 38 64 67 68 62				58
	Q 3	28				32 39 27 26 38 35 41 60		56 55 49 47
$\mathsf{I} \mathsf{O} \mathsf{P} \mathsf{O} \mathsf{O} \mathsf{P}$		26	28 38			23 27 42 39 44 66	49	55	56	-43
	Total					27 31 38 32 27 41 40 41 62	59	59 57		53	45

Spot Prices, Fresh Atlantic Salm - Cross Section, FCA Oslo, Superior Quality

as of week 3-2021

• Weekly Price NSI FCA Oslo - Quarterly Price NSI FCA Oslo

Atlantic Salmon - Harvest Volumes Norway in tons WFE

Atlantic Salmon - Harvest Volumes Europe in tons WFE

Atlantic Salmon - Harvest Volumes Americas in tons WFE

Atlantic Salmon - Harvest Volumes WW in tons WFE

2021

Atlantic Salmon Consumption

Atlantic Salmon Consumption - Other markets

Atlantic Salmon Consumption

2020 - FY	Market	2017	2018	2019	2020	Growth	Growth %
	EU	1 020 535	1 052 806	1 131 813	1 198 391	66,578	5.9%
	Others	649 418	708 481	757 801	735 000	$-22,802$	$-3.0%$
	USA	459 466	491 197	528 890	560 615	31,726	6.0%
	Russia	77 582	99 357	87 405	88 954	1,549	1.8%
	Japan	63 936	59 804	58789	70 673	11,884	20.2 %
	Total			2 270 936 2 411 643 2 564 698 2 653 633		88,935	3.5%

$\bullet$ 2017 $\bullet$ 2018 $\bullet$ 2019 $\bullet$ 2020 $__$ Growth --- Zero-line

Atlantic Salmon Consumption - Other Markets

in tons WFE

2015 2016 2017 2018 2019 2020 2021 Year Volume Change Volume Change Volume Change Volume Change Volume Change Volume Change Volume Change Region $-11.5%$ 164 200 $-11.6%$ 145 300 152 700 $5.1%$ 132 500 $-13.2%$ 146 100 10.3 % 144 400 $-1.2 \%$ 128 100 $-11.3%$ Americas 100 400 $-23.8%$ 74 200 $-26.1%$ 75 200 $1.3%$ 73 900 $-1.7%$ 83 900 13.5 % 83 600 $-0.4%$ 62 000 $-25.8%$ Chile Others 57 800 18.7 % 64 600 11.8 % 71 000 $9.9%$ 52 600 $-25.9%$ 55 800 $6.1%$ 54 700 $-2.0%$ 59 000 7.9 % 3 500 $9.4%$ 4 0 0 0 14.3 % 4 4 0 0 10.0% $9.1%$ 4 4 0 0 $-8.3%$ 4 100 $-6.8%$ 4 0 0 0 $0.0\%$ 4 800 Australia 2 500 13.6 % 2 500 $0.0%$ 2 500 $0.0%$ 1 600 $-36.0%$ 1 600 $0.0%$ 1700 $6.3%$ 3 0 0 0 76.5 % Canada Europe 120 200 $0.1%$ 135 640 12.8% 116 000 $-14.5%$ 122 500 5.6 % 138 700 13.2 % 153 100 10.4 % 141 100 $-7.8%$ 84 500 18.2 % 60 000 6.7 % 22.2 % 18.4 % $-15.6%$ 71 500 $-3.1%$ $-29.0%$ 64 000 78 200 92 600 78 200 Norway 15 000 $7.1%$ 16 540 10.3 % 18 000 20 000 11.1 % 10.0% 22 000 $0.0\%$ 24 000 $9.1%$ Russia $8.8%$ 22 000 4.8% $0.0%$ Finland 14 500 11.5 % 14 500 $0.0%$ 14 500 $0.0%$ 14 500 14 500 $0.0%$ 13 900 $-4.1%$ 13 000 Denmark 10 900 $3.8%$ 10 500 $-3.7%$ 13 000 23.8 % 13 500 3.8 % 13 500 $0.0%$ 13 500 $0.0%$ 13 800 $2.2%$ 9800 4.3 % 9600 $-2.0%$ 10 500 $9.4%$ $0.0%$ 10 500 $0.0%$ 10 500 $0.0%$ 11 200 $6.7%$ 10 500 Sweden 284 400 $-7.0%$ 280 940 $-1.2%$ 268 700 $-4.4%$ 255 000 $-5.1%$ 284 800 11.7 % 297 500 4.5 % 269 200 $-9.5%$ Total

Source: Kontali

Trout - Harvest Volumes WW in tons WFE

Outlook 2021

• The end of Covid-19 restrictions are unpredictable. However, the position among end consumers remain strong.
• Expect significant growth in harvest volume and lower costs from improvement efforts and investments in smolt facilities.
• Expected harvest volume 2021 incl. associates 205-210,000GWT
• Expected contract share in Q1/21 of 20-25%
• Significant potential in whitefish
• Quota for 2021 expected to be +14% for cod, +6% for Haddock, +16% for saithe North of 62 degrees and down 6% for saithe South of the 62 degrees. Final decision end February
• Significant potential for further developments of downstream value chain

Farming - New management group

Bjarne Reinert (38)

COO Farming – January 2021 Came from the position as fish health manager in LSG Master in Fish Health - Norwegian School of Fisheries UiT Master in Strategy and Management - NHH

Nina Møgster (43)

General Manager Lerøy Sjøtroll - October 2018 Came from the position as CFO in Lerøy Sjøtroll Master in Fisheries and Aquaculture Science - Norwegian School of Fisheries UiT MBA in Seafood Management - NHH General Manager Lerøy Midt - February 2021 Came from the position as Production Manager Lerøy Midt - Nord-Møre Master in Biology, Marine Resources and Aquaculture - NTNU Bachelor in Marine Biology and Economics - Ålesund University College

Harald Larssen (42)

Kurt-Einar Karlsen (46)

General Manager Lerøy Aurora - August 2016 Came from the position as Head of Industry and R&D in Lerøy Aurora 3 yrs studies in Fisheries and Aquaculture Science - Norwegian School of Fisheries UiT 1 year studies Innovation Managment – UiT

Kjærelva II/Årskog – further development of RAS capacity in Region West

Final negotiations for further RAS capacity in Region West

• Kjærelva, Fitjar, finalised in 2019. Delivering 6m smolt of 160grams and 6m smolts of 500grams
• Lerøy has developed a RAS–modul concept, each module of around 2,000 biomass production.
• Considering to build three such modules at Årskog, Fitjar
• Module 1: 6m smolt from 160gram to 500grams
• Modul 2&3 in total: 6m smolts from 500 grams to 1200 grams
• Third module may also be used from growing fish to full harvest weights
• Total capex for three modules around 1bn NOK, expected potential in increased production in Lerøy Sjøtroll of about 8-10,000 GWT
• Decision to be taken shortly, construction may be finalised 2023

II

Our goal is to create the world's most efficient and sustainable value chain for seafood. The large, extensive investments we have made over a long period of time are now starting to yield results.

CONTACT – Henning Beltestad, hb@leroy.no CONTACT – Sjur Malm, sjur.malm@leroy.no