SalMar ASA

Investor Presentation • Feb 25, 2021

SalMar ASA

Presentation Q4 2020

CEO Gustav Witzøe CFO & COO Trine Sæther Romuld

Agenda

• Highlights
• Operational update
• Financial update
• Strategic update
• SalMar Ocean
• SalMar
• Outlook

30 years of delivering excellent operational performance

• SalMar was founded 8th of February 1991
• Strong track record of growth
• 11 to 1700 employees
• From operations on Frøya in Norway to operations in 8 countries across the globe
• Production 800 tons in 1991 to 195 000 tons in 2021
• Fantastic dedicated employees with a passion for salmon
• Significant growth opportunities
• Need to utilize the potential of the ocean to produce more healthy food
• Sustainable growth on the terms of the salmon
• Pioneering use of new technology

2020 showcasing our ability to handle a challenging situation

	FY 2020	FY 2019	Δ YoY
Group
Harvest volume (1,000 tons)	161.5	153.1	+8.4
Operational EBIT (MNOK)	3,007	3,068	-60
EBIT/kg (NOK/kg)	18.62	20,04	-1.42

Norway
Harvest volume (1,000 tons)	150.3	143.3	+7.0
Operational EBIT (MNOK)	3,058	2,967	+91
EBIT/kg (NOK/kg)	20.35	20.71	-0.36
Nasdaq spot price (NOK/kg)	54.34	57,98	-3.64

• Covid-19 has led to significant market uncertainty
• Strict disease prevention measures implemented
• Strong strategic and operational focus throughout the value chain resulting in solid biological and operational performance
• Dedication, passion and strong culture

Highlights

• Satisfactory results in a challenging quarter with low salmon prices
• Total operational EBIT 433 MNOK from Norway, including Icelandic Salmon total operational EBIT 414 MNOK
• Central and Northern Norway delivers satisfactory results due to good biological and operational performance
• Challenging market conditions impacting results from Sales & Processing
• Positive cost development for Icelandic Salmon
• Guiding for 2021 maintained at 163,000 tons in Norway and 14,000 tons on Iceland
• Record high standing biomass going into 2021
• Proposed dividend for 2020 of NOK 20.00 per share

• Strengthening our strategic focus on offshore fish farming

Farming Central Norway

	Q4 2020	Q4 2019	FY 2020	FY 2019
Operating income (NOKm)	1,086	1,349	5,895	5,670
Operational EBIT (NOKm)	271	418	2,218	2,165
Operational EBIT %	25.0 %	31.0 %	37.6 %	38.2 %
Harvested volume (tgw)	20.9	24.4	100.4	95.3
EBIT/kg	12.96	17.13	22.10	22.71

• Continuing the trend with solid results

• Strategic and operational focus resulting in good biological and operational performance
• Autumn 19 accounted for the volume in the period
• Stable biological performance
• High harvest volume at the end of the period
• Volume reduced at the end of the year to optimize utilization of increased MAB capacity
• Expect slightly lower volume and costs at same level in Q1 2021
• Will finish harvest of autumn 19 generation and start harvest from spring 20 generation
• Production tax at 0.40 NOK/kg will be included from Q1 2021
• Expect to harvest 107,000 tons in 2021

Harvest volume (1,000 tons) EBIT/kg (NOK)

Farming Northern Norway

	Q4 2020	Q4 2019	FY 2020	FY 2019
Operating income (NOKm)	822	746	2,613	2,789
Operational EBIT (NOKm)	156	270	848	931
Operational EBIT %	19.0 %	36.2 %	32.4 %	33.4 %
Harvested volume (tgw)	19.1	13.4	49.9	48.0
EBIT/kg	8.18	20.21	16.99	19.41

Harvest volume (1,000 tons) EBIT/kg (NOK)

• Satisfactory results and continuing the positive development
• Strategic and operational focus has given good biological and operational performance reducing cost level
• Spring 19 generation accounted for 80% of the volume and was finished in the quarter
• Continued strong biological performance and low cost
• Autumn 19 started in in the quarter
• Good biological performance
• Expect lower volume and higher cost level in Q1 2021
• Continue harvesting from autumn 2019
• Production tax at 0.40 NOK/kg will be included from Q1 2021
• Expect to harvest 56,000 tons in 2021

Sales & Processing

	Q4 2020	Q4 2019	FY 2020	FY 2019
Operating income (NOKm)	2,857	3,002	12,393	11,699
Operational EBIT (NOKm)	73	8	282	124
Operational EBIT %	2.6 %	0.3 %	2.3 %	1.1 %

• Satisfactory results in a quarter with challenging market and low salmon prices
• Positive contribution from fixed price contracts
• Contract share at 20% in the period
• Current market situation underlines the importance of our strategic focus on local processing
• Strong results and operational performance in 2020
• Contract share currently at 30 % for Q1 2021 and FY 2021 20%
• Construction work on InnovaNor is progressing according to plan
• First harvest in the summer of 2021

Icelandic Salmon

Operating income (NOKm) 173 165 662 627 Operational EBIT (NOKm) -20 27 -50 100 Operational EBIT % -11.3 % 16.3 % -7.6 % 16.0 % Harvested volume (tgw) 3.6 2.6 11.2 9.8		FY 2020	FY 20191
	EBIT/kg	-5.51	10.35	-4.49	10.21

1) Consolidated results from February 2019

Harvest volume (1,000 tons) EBIT/kg (NOK)

• Successful private placement and listing on Euronext growth in October 2020
• As expected, negative result due to low price achievement
• Result for the period negatively impacted by one-off costs and costs related to the share issue / listing process (3,70 NOK/kg)
• Positive cost development driven by improved biological performance
• Started harvesting of 2019 generation with lower cost level
• Expect slightly higher volume and stable cost level in Q1 2021
• Continue harvesting from 2019 generation
• Improved biological status of fish in sea
• Expect to harvest 14,000 tons in 2021
• Positive signals for new licenses in Ísafjarðardjúp, 10,000 MAB tons

Norskott Havbruk (Scottish Sea Farms)

	Q4 2020	Q4 2019	FY 2020	FY 2019
Operating income (NOKm)	427	392	1,699	1,834
Operational EBIT (NOKm)	76	49	308	292
Operational EBIT %	17.8 %	12.6 %	18.2 %	15.9 %
Value adjustments biomass	-21	109	-143	-48
Profit before tax	50	152	143	229
SalMar's share after tax	22	73	49	106
Harvested volume (tgw)	6.4	5.3	24.0	25.9
EBIT/kg	11.87	9.28	12.87	11.29

Harvest volume (1,000 tons) EBIT/kg (NOK)

• Good results in the period
• Costs improved from Q4 19
• Harvest volume below guidance for FY 2020
• Impacted by early harvest of small fish at 2 sites
• Good biological status in all regions
• Expect lower cost in Q1 21
• Expect 36,000 tons harvest volume in 2021

Operational EBIT deviation analysis (qoq)

Group profit and loss

NOK million	Q4 2020	Q4 2019	Δ%	FY 2020	FY 2019	Δ%
Operating income	3,049.0	3,186.7	-4 %	12,912.3	12,237.6	6 %
EBITDA	648.1	863.9	-25 %	3,819.6	3,786.0	1 %
Depreciations and write-downs	234.3	205.7		812.1	718.4
Operational EBIT	413.8	658.1	-37 %	3,007.5	3,067.6	-2 %
Fair value adjustment	-328.6	218.4		-179.5	-33.0
EBIT	85.2	876.5	-90 %	2,828.0	3,034.6	-7 %
Income from investments in associates	8.9	77.8		42.2	118.7
Net financial items	-17.5	-62.9		-298.5	5.1
Net interest costs	-30.2	-42.9		-139.6	-157.7
Other financial items	12.7	-20.0		-158.9	162.8
Profit before tax	76.6	891.4	-91 %	2,571.6	3,158.4	-19 %
Tax	24.9	168.2		563.4	613.9
Net profit for the period	51.7	723.2	-93 %	2,008.3	2,544.5	-21 %
Other comprehensive income	-85.6	14.6		212.1	39.9
Total comprehensive income	-33.9	737.8	-105 %	2,220.4	2,584.4	-14 %
Earnings per share (NOK)	0.22	5.93	-96 %	17.52	22.06	-21 %
Harvested volume (tgw)	43.6	40.3	8 %	161.5	153.1	6 %
EBIT per kg (NOK)	9.50	16.31	-42 %	18.62	20.04	-7 %
Nasdaq spot price (average)	43.69	57.67	-24 %	54.34	57.98	-6 %

FY 2020 vs. FY 2019

• Revenue increased following higher volume and stronger price achievement
• Operational EBIT only reduced 2% due to lower cost
• Fair value adjustment negative due to lower forward prices
• Reduced income from associates
• Other financial items in 2019 positively impacted by gain from acquisition of increased shareholding in Icelandic Salmon

Group balance sheet

Equity ratio 49.9%

• Investments progressing according to plan
• Higher standing biomass YoY and QoQ
• Net Interest-bearing debt incl. leasing liabilities increased with NOK 1,684 million during the quarter due to dividend paid
• NIBD incl. leasing at NOK 5 826 million at the end of 2020
• Solid financial position with equity ratio at 49.9% and NIBD incl. leasing /EBITDA at 1.53

Equity & liabilities NIBD incl. leasing

Movement in net interest-bearing debt

• Cash flow from operations impacted by taxes paid
• Net cash flow from investments at NOK 509 million
• Farming and Ocean NOK 94 million
• Smolt and hatchery NOK 150 million
• Sales & Processing NOK 186 million
• Upgrade of Vikenco NOK 59 million
• Capex Iceland NOK 18 million
• Dividend of 13,00 NOK per share paid out in December
• Successful private placement for Icelandic Salmon
• NIBD incl. leasing increased with NOK 1,684 million

Secured new sustainability linked financing

• Securing financial flexibility by strengthening our credit facilities
• Increasing credit facilities by NOK 1,000 million
• Sustainability linked revolving credit facility of NOK 4,000 million
• Duration 5 years
• 4 ESG KPI's linked to the RCF
• Survival rate
• Economic feed conversion ratio
• Share of local processing in Norway
• Greenhouse gas emission intensity
• Overdraft facility of NOK 1,000 million
• Duration 1 year with annual renewal
• Covenants
• Equity ratio at least 30%
• Interest cover* greater than 4

SalMar Ocean

Offshore – a new era in aquaculture

Sustainable growth on the terms of the salmon

• Utilizing the potential of the ocean to produce healthier food¹
• Salmon one of the most resource efficient protein sources
• Sustainable production to feed a growing world population
• SalMar targeting sustainable growth through new technology since 1991
• Technological development on the terms of the salmon
• Always seek minimal environmental footprint
• Consistently delivering excellent operational performance
• SalMar pioneered and will lead the way offshore
• Build on 30 years of operational experience
• Natural habitat of the Atlantic salmon
• Optimal biological conditions
• Unlock vast areas for sustainable production world-wide
• Separate area for investments and operations

Oceans of opportunity

Two directions going forward – coastal and offshore fish farming

Continue to deliver operational excellence at the optimal locations

COASTAL OFFSHORE

Gamechanger for releasing the potential of the ocean

SalMar Ocean

SalMar pioneering and leading the way

Always on the terms of the salmon

Going offshore is building on our fundamentals

Terms of the salmon not the limitations of the equipment

• Optimal biological conditions for the salmon
• Stable temperatures
• Unidirectional currents
• Offshore is the natural habitat of the salmon
• Technology development to utilize the harsh conditions
• Improved biological performance and fish welfare

Already producing in exposed areas offshore Exposed - Ocean Farm

Ocean Farm 1 Ocean Farm 2

• Two production cycles completed
• Unlocked significant new areas for farming
• 10 000 tons of salmon with superior quality already delivered to customers worldwide
• Strong biological results strengthens our confidence
• Strong growth
• Low mortality
• Low sea lice levels
• Production cost on level with our best coastal locations
• Lessons learned implemented in future development
• Operational and technological improvements
• New and improved design for Ocean Farm 2
• Reduced construction cost
• Reduced production cost and build time
• Planning for construction of new units
• Identified areas along the coastline with minimal footprint

Gamechanger for releasing the potential of the open ocean Open Ocean – Smart Fish Farm

• Vast areas available in the open ocean
• Identified several areas with optimal biological conditions unaffected by the coastal currents
• Areas identified in the open ocean larger than the area used for all coastal salmon production in Norway today –> huge potential
• Site application for first unit sent
• Location in the Norwegian Sea
• 50 nm west of Frøya in Central Norway
• Large unit specifically designed for handling the harsh conditions
• Final investment decision expected H2 2021 subject to government approval
• In dialogue with both domestic and foreign shipyards
• Construction time 23 months
• In operation from Q2 2024* with expected first harvest Q2 2025*

*) subject to government approval H2 2021

Serial expansion of both OF and SFF technology

	EXPOSED Ocean Farm (OF)						First unit OF1	Additional units OF2->
				Volume*		7 500 rwt		10 000 rwt
			CAPEX		1 billion NOK		0,6-0,8 billion NOK
		Production cost**		35 NOK/kg		33 NOK/kg
		Construction time		18 months			18 months
			In operation		Since Q3 2017		From 2024->
	OF1			OF2+
Units in 2021 operation	2022	2023	2024	2025	2026	2027	2028	2029	2030->
	OPEN OCEAN Smart Fish Farm (SFF)		SFF1 Volume* CAPEX			SFF2+
					First unit SFF1		Additional units SFF2->
					23 000 rwt		23 000 rwt
					2,3 billion NOK		1,5-2,0 billion NOK
		Production cost**		37 NOK/kg		34 NOK/kg
		Construction time		23 months		20 months
				In operation***		From Q2 2024		From 2026->

• Speed of expansion subject to government approval and regulatory framework
• Attractive cost level
• Lesson learned from OF1 reducing CAPEX
• Strong biological performance and capacity utilization results in low production cost
• Significant positive ripple effects to the entire value chain and supplier industry
• Combine unique SalMar farming competence with OF exposed experience and Norwegian offshore construction know-how

*) rwt = tonnes round weight **) Based on full capacity utlization and current estimates based on todays cost structure ***) subject to government approval H2 2021

Sustainable global expansion opportunities

Close to key markets across the globe

Mean sea water temperatures

• Technology not only limited to Norwegian waters
• Technology can be deployed close to the core markets
• SalMar has been approached by producers and vendors across the globe for further opportunities
• Releasing the potential of the ocean a vital part for making food production even more sustainable¹
• Further growth in seafood production needs to come from aquaculture
• Optimal biological conditions in the ocean gives no need for additional energy and no need for freshwater during production

SalMar pioneered and will lead the way offshore

OPEN OCEAN Smart Fish Farm (SFF)

• Offshore provides optimal biological conditions
• Stable temperatures and unidirectional currents
• Improved biological performance and fish welfare
• No need for additional energy and no need for freshwater during production
• Serial expansion of both OF and SFF technology
• Speed of expansion subject to government approval and regulatory framework
• Attractive cost level; path to serial production efficiencies
• SalMar Ocean leading the development offshore
• Protecting SalMar core: Build and develop SalMar Ocean organization to handle growth ambition
• Exploring several financing alternatives

Strong strategic and operational focus throughout the value chain

Always on the terms of the salmon

Flexibility and capacity to deliver the right smolt at the right time …

… to deliver the best fish through good fish welfare…

… for local processing with the right capacity at strategic locations…

… for production at the optimal locations with minimal footprint…

… with flexibility to handle the volume when the fish is ready for harvest…

… to maximize value creation of the salmon…

… all handled by fantastic dedicated employees with strong competence & culture and a passion for salmon

Investing in a robust platform for further growth

• Complete Senja 2
• Closed net pen

• Planning for new RAS facility in Tjuin, Central Norway

• Continuous improvements

• Learning from best practice
• "On the site-managers" terms
• Cost program ongoing
• New sites & zone structure
• Optimize organization in respect of production volume

• Seek attractive M&A opportunities

• Build and develop SalMar Ocean organization to handle growth ambition

• Ongoing processes continuing
• 3 rd cycle OF1
• Ocean Farm 2
• Smart Fish Farm 1

Continuous improvements Industry

• Optimize use of InnovaMar
• Complete InnovaNor
• Upgrade of Vikenco finalized Sales
• Optimize allocation of salmon
• Best distribution

GENETICS & SMOLT COASTAL FARMING OFFSHORE FARMING INDUSTRY & SALES ICELANDIC SALMON

• Continue to develop Icelandic Salmon

• Large biological and market potential

• Disease prevention measures related to Covid-19

• Corporate social responsibility
• WE@SalMar holistic culture project for all employees
• Focus on contribution from each individual
• Goals, ambitions and values
• SalMar school and leadership training
• Employee satisfaction survey

Outlook

• SalMar pioneering and leading the way offshore
• Continued strong strategic and operational focus to build an even more robust platform for further growth
• Dedicated employees and strong corporate culture set for growth
• Proposed dividend for 2020 of NOK 20.00 per share
• Guiding for 2021 maintained
• Good biological status in all regions
• Expect slightly lower volume and stable cost level in Q1 2021
• Contract share for Q1 2021 30% and FY 2021 20%
• Expect moderate increase in global supply in 2021
• Covid-19 has led to significant market uncertainties
• SalMar is well positioned to handle a demanding market with strong operational and financial flexibility

THANK YOU FOR YOUR ATTENTION www.salmar.no