Mowi ASA — Investor Presentation 2010

Jun 22, 2010

"Capacity utilisation and pricing power"

Marine Harvest

Handelsbanken – Nordic small/mid cap seminar

Stockholm 22 June 2010

Henrik Heiberg, VP Finance & Treasury

marineharvest

excellence in seafood

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marineharvest
excellence in seafood

Marine Harvest at a glance

• Turnover NOK 14.5bn
• Salmon volume 327' tonnes (HOG)
• 5.000 employees
• Presence in 18 countries
• Global market share of ~25%
• Farmed Atlantic Salmon
• Leading producer in:
• Norway
• Canada (West Coast)
• Scotland
• Ireland
• Extensive value adding processing of convenient, healthy, natural and fresh salmon and other species

2009 Sales breakdown

Harvest volume 2010E (HOG)

Note: Marine Harvest's guided volume for 2010 is 298' tonnes (HOG)

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Development in global harvest volumes

marineharvest

excellence in seafood

CAGR 1990-2008: 11% CAGR 1990-2010E: 10%

Source: Kontali Analyse. Note: Harvest Quantity of Atlantic Salmon - World wide - In tons HOG

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marineharvest excellence in seafood

Historic price and volume relationship

Y-o-Y	Global supply growth	Change in av. price FCA Oslo
2000-01	13%	-25%
2001-02	7%	-10%
2002-03	8%	-3%
2003-04	5%	11%
2004-05	4%	17%
2005-06	2%	1%
2006-07	10%	-4%
2007-08	6%	4%
2008-09	3%	18%

Source: Kontali Analyse. Marine Harvest calculation. Note: Supply differs from harvest volumes

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Inflation adjusted price and production cost - Norway

marineharvest
excellence in seafood

Adjusted according to KPI (2009 = 100)

21.06.2010

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marineharvest

excellence in seafood

Development in harvest volumes

NORWAY

CHILE

SCOTLAND

NORTH AMERICA

Source: Kontali Analyse/MHG mid range estimate for 2010

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marineharvest

excellence in seafood

Norway approaching full capacity

Estimated MAB - Utilization Norway; 2005 - 2009

Source: Kontali Analyse. Note: Total Biomass Salmon/Trout in Norway, compared to

Total Industry Licence MAB-Capacity - Both in tonnes WFE

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Chile: New legislation

marineharvest
excellence in seafood

• General Law on Fisheries and Aquaculture (LGPA) enacted 5 April.
• Development of regulations expected to take several months
• Improved sanitary and environmental regulations. Details to be established through development of regulations over the next months.
• No impact on duration of Marine Harvest current licenses
• Future production capacity will be impacted by the new law, and specifically by the following:
• No new licences to be awarded during next 12 months.
• Gradual opening of regions XII, XI and X after 12 months, two years and five years respectively.
• Regulations of zones, availability of areas suitable for aquaculture (AAA) and fallow periods will limit production capacity and growth rate until new licences can be approved and/or new areas opened.

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marianhervest excellence in seafood

Industry supply outlook 2010

HOG tons (thousands)	2008	2009	ESTIMATES 2010
			Low	Y/Y growth	High	Y/Y growth
Norway	667	770	824	7%	839	9%
Chile	363	215	65	-70%	86	-60%
North America	122	117	119	2%	123	5%
UK	123	130	124	-5%	129	-1%
Other	70	88	81	-8%	84	-4%
Total	1,345	1,320	1,212	-8%	1,261	-4%

Note: Atlantic salmon

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Price movements in EU and USA last 4 quarters

marineharvest
excellence in seafood

Price movements last 4 quarters
(Change in prices and supply vs 12 months before)

21.06.2010

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marineharvest

excellence in seafood

Price development in market currencies

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marineharvest
excellence in seafood

Focus areas for the large industry player

Procurement

Utilise scale advantages

Feed

• Global contracts
• Clear commercial dynamics
• Optimal recipes
• Work closely with suppliers

Other procurement

• Standardise requirements
• Centralised tender processes

Farming

Best practice

• Disease prevention
• Disease handling
• Feed

Standardisation

• Processes
• Methods

Processing

Primary processing

• Efficient plant structure
• High utilisation
• Best practice
• Hygiene
• Quality systems
• Standardised processes

Secondary processing

• Improved upstream/downstream balance
• Reduced exposure to non salmon species

Market/Logistics

Think global - act local

Optimise global market opportunities

Maximise netback for each entity

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Market matrix

marineharvest

excellence in seafood

2008 VOLUME DISTRIBUTION

Thousand tonnes (HOG)	Norway	Chile	Scotland	North America	Other	Total	%
EU (1)	477	62	104	-	36	680	51%
USA	9	158	14	78	7	266	20%
Russia	56	5	1	-	6	68	5%
Japan	22	13	0	2	4	42	3%
Other markets	102	106	3	26	41	279	21%
Total	666	346	123	106	93	1,334
%	50%	26%	9%	8%	7%

2009 VOLUME DISTRIBUTION

Thousand tonnes (HOG)	Norway	Chile	Scotland	North America	Other	Total	%
EU (1)	532	36	100	0	22	690	51%
USA	36	96	24	81	15	253	19%
Russia	63	5	1	-	2	71	5%
Japan	26	6	1	1	2	36	3%
Other markets	113	105 (2)	5	35	45	304	22%
Total	770	248	131	117	87	1,353
%	57%	18%	10%	9%	6%

Source: Kontali

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Arbitrage determinants

marineharvest

excellence in seafood

Customer EU (Price elastic in EUR)

Customer USA (Price elastic in USD)

• Deboning and processing (USD)
• USD/EUR rate
• Freight cost (truck + plane)
• Filleting cost

Net back price point HOG (EUR) ———— Winner takes the volume

Marine Harvest Norway
Sales revenues maximised in EUR
NOK cost base converted into EUR through hedging programme

Note: Simplified illustration

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marineharvest

excellence in seafood

Arbitrage determinant - Currency

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21.06.2010

Consolidation of the industry

marineharvest
excellence in seafood

2009
2006
2003
2000
1997

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Financial position

marineharvest

excellence in seafood

| Marine Harvest Group
NOK million | 31.03.2010 | 31.03.2009 | 31.12.2009 |
| --- | --- | --- | --- |
| Non-current assets | 12 037 | 12 552 | 11 900 |
| Current assets | 8 298 | 8 297 | 8 490 |
| Total assets | 20 335 | 20 849 | 20 389 |
| Equity | 12 292 | 9 971 | 11 461 |
| Non-current liabilities | 3 528 | 6 961 | 6 359 |
| Current liabilities | 4 515 | 3 917 | 2 569 |
| Total equity and liabilities | 20 335 | 20 849 | 20 389 |
| Cash and cash equivalents | 236 | 271 | 172 |
| Net interest-bearing debt | 4 140 | 7 074 | 5 075 |
| Equity ratio | 60.4% | 47.8% | 56.2% |
| NIBD/Equity | 33.7% | 71.0% | 44.3% |

• NIBD/Equity well within target of less than 0.5x

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Furry

marineharvest

excellence in seafood

Full refinancing in place

• New five year financing obtained through a combination of
• Convertible bond, and
• Continued bank financing
• EUR 225 million convertible bond issued in March 2010
• Tenor 5 years
• Annual coupon 4.5%
• EUR 600 million syndicated loan agreement signed 4 May 2010
• Maturity – Q1 2015
• Lenders: DnB NOR, Nordea, Rabobank and Fortis Bank (Nederland) N.V.
• Annual repayments: EUR 32 million
• Covenants:
• 40% equity ratio
• Declining NIBD/EBITDA ratio over tenor (gradual reduction from 3.5x to 3.0x)

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Marine Harvest
marineharvest excellence in seafood

Marine Harvest's dividend policy

• The dividend level shall reflect the present and future cash generation potential of the Company
• Marine Harvest will target a net interest-bearing debt/equity ratio of less than 0.5x
• When target level is met, at least 75% of the annual free cash flow after operational and financial commitments will be distributed as dividend

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marineharvest excellence in seafood

Outlook

• We expect a tight market in 2010 and 2011. Global supply growth is expected to be limited the coming years
• Strong forward prices for 2010 and 2011 confirmed by recent sales contracts
• Potential for improved price achievement from a better organized and coordinated sales function, including VAP activities
• Strong results expected in Q2, and for the remainder of 2010, based on market balance and improved operational performance
• Robust 5 year financing with low financial commitments in place
• Dividend policy established

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