Salmon Evolution ASA — Investor Presentation 2022

Feb 10, 2022

Q4 2021 PRESENTATION

10 February 2022

DISCLAIMER

This presentation (the "Presentation") has been prepared by Salmon Evolution ASA (the "Company" and together with is subsidiaries, the "Group") except where context otherwise requires, solely for information purposes. This Presentation, and the information contained herein, does not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities of the Company and neither the issue of the materials nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity. and do not constitute or form part of any offer, invitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction.

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• Highlights

• Extending the ocean potential™
• Operations
• Financials
• Summary and outlook
• Appendices

Q4 2021 HIGHLIGHTS

Q4 2021

• Excellent project execution on track for first smolt release in March 2022 – capex in line with budget
• Commissioning phase started first tank filled with seawater in January 2022
• Entered strategic feed partnership with Cargill, combined with USD 5 million private placement towards Cargill
• Entered into green purchase power agreement with Statkraft, securing the vast majority of electricity needs through 2023 at attractive terms, confirming original budget assumptions
• Secured NOK 52 million debt financing package relating to Kraft Laks
• Kraft Laks smolt continuing to perform well, expected average release weight for first smolt of around 300 gram
• Available liquidity of NOK 983 million per 31 December 2021 including committed undrawn credit facilities

Post quarter events

• Initiated phase 2 preparations at Indre Harøy – signed Heads of Terms with Artec Aqua for phase 2 build-out

Indre Harøy, January 2022

• Highlights
• Extending the ocean potential™
• Operations
• Financials
• Summary and outlook
• Appendices

SALMON EVOLUTION – EXTENDING THE OCEAN POTENTIAL

A Norwegian land-based salmon farming company with a goal to become a global supplier of high-quality and sustainable salmon

First production facility under construction in Norway – annual harvesting capacity of 31,500 tonnes head-ongutted ("HOG") fully developed

Joint venture with Dongwon Industries for a 16,800 tonnes HOG production facility in South Korea – first grow-out production targeted in 2024

Utilizing hybrid flow-through system ("HFS") with 30%-35% fresh seawater intake, reducing complexity and biological risk and securing optimal growth at low cost

farmer, enabled by a strong ESG profile

Targeting a position as a global leading land-based

Indre Harøy illustration – fully developed South Korea project illustration (Source: Dongwon)

CONSERVATIVE APPROACH IN A "DISRUPTIVE INDUSTRY"

There is much to learn, even though we have decades of experience ^→ That's why we start in Norway ²

International expansion can be accelerated with strong local partners ^→ That's why we don't go solo on our first project overseas 3

OPTIMIZED BIOLOGY WITH HFS TECHNOLOGY

• No biofilters less complexity
• Each tank functions as one independent biozone
• Maintenance flexibility, separate cleaning and disinfecting between biomass transfers
• Easy to operate and reduced risk of technical accidents
• Area efficient

HYBRID FLOWTHROUGH ADVANTAGES INCREASED COMPLEXITY ABOVE 65% RECIRCULATION

• Proven technology used in smolt production for decades
• Fresh seawater as primary water treatment source
• Optimal and stable production environment
• Minimal handling of the fish

OUR TECHNOLOGY EXTENDS THE OCEAN POTENTIAL NEW AREAS POSSIBLE FOR LOW RISK PRODUCTION THROUGH USE OF HFS

9 Q4 2021 Presentation

• Highlights
• Extending the ocean potential™
• Operations Norway
• Financials
• Summary and outlook
• Appendices

ON TRACK FOR FIRST SMOLT RELEASE IN MARCH 2022

• All twelve fish tanks now assembled
• Continued strong progress on construction of buildings and structures
• Water intake station technically ready for operations
• Continued installation of process equipment; heat pumps, heat exchangers, oxygen equipment, CO2 and nitrogen strippers and piping
• Currently ~200 workers on site gradual reduction over the coming quarters
• Commissioning ongoing first tank successfully filled with seawater in January 2022
• Phase 1 completion in Q4 2022

Indre Harøy January 2022

• All twelve fish tanks assembled
• Phase 1 at Indre Harøy will consist of 12 fish tanks each with a diameter of 28 meter and a height of 13 meter

• Fully developed, Indre Harøy will consist of 48 fish tanks with a combined cubic capacity of 240,000m3

• Coating of walls in first tanks completed

• Water intake streamers installed
• In process of installing feeding systems and other tank equipment
• Testing of full water reuse circuit to commence mid February
• First smolt release in March 2022

• First tank filled with fresh seawater from 95 meters water depth in January 2022, seawater temperature of 8 C

• Water intake and offtake systems successfully verified

• Testing and commissioning to continue until first smolt release in March

• All particle and UV filters installed

CONTROLLED PRODUCTION RAMP UP DURING 2022 – STEADY STATE SMOLT RELEASE VOLUMES FROM Q4

SIGNED HEADS OF TERMS WITH ARTEC AQUA FOR INDRE HARØY PHASE 2 CONSTRUCTION

• Preparatory activities started for Indre Harøy phase 2 construction
• Phase 2 in principle identical to phase 1, brining Indre Harøy production volume to 15,800 tons HOG
• Target construction start Q4 2022 on back of completion and successful ramp up of phase 1
• Capex estimated to NOK 1.3–1.4 bn, reflecting both copy effects from phase 1 and general inflation – final capex target to be set in 2H 2022
• Signing of final design and construction agreement with Artec Aqua targeted during 1H 2022

• Final agreement to include financing reservations providing necessary flexibility to align phase 2 build out with overall financing plan

• Introduction

• Extending the ocean potential™
• Operations Korea
• Financials
• Summary and outlook
• Appendices

K SMART FARMING – FOCUS ON EARLY ENGINEERING AND PERMITS

• K Smart JV with Dongwon Industries formalized end of March 2021 and first tranche of equity investment completed in May 2021
• Ownership split 49/51% for SE and Dongwon, respectively
• Dongwon to provide 75% debt financing
• Target construction start for phase 1 during 2022 and first grow out production in 2024
• Fully developed production capacity of 16,800 tons HOG, consisting of 2 equal phases of 8,400 tons HOG each
• Initial feasibility study delivered in October 2021for both the smolt site and grow out site – currently in process of tuning facility layouts and production plans
• Retained highly experienced Korean civil engineering firm and project management company with global experience
• Good progress on regulatory approvals and constructive dialogue with Korean authorities
• Organization in place with dedicated focus
• Established joint SE / Dongwon project team

Jeongseon smolt site – as is

Jeongseon smolt site – sketch project

• Highlights
• Extending the ocean potential™
• Operations
• Financials
• Summary and outlook
• Appendices

READY FOR OPERATIONS – ALL MAIN INPUT FACTORS SECURED WITH TIER 1 SUPPLIERS VALIDATING BUDGET ASSUMPTIONS

Supporting production cost on par with conventional farming at steady state production

GROUP PROFIT & LOSS

Summary of result

(figures in NOK 1000)	Q4 2021	Q4 2020	2021	2020
Total operating income	5	0	12 257	704
Cost of goods sold	542 1	0	908 -	0
Personnel expenses	6 918 -	2 034 -	21 067 -	8 877 -
Depreciations	819 -	337 -	2 229 -	-550
Other operating expenses	6 228 -	214	25 894 -	8 954 -
Operating profit (EBIT)	-12 418	-2 158	-37 841	-17 676
Financial income	3 061	113 1	12 524	114 1
Financial expense	2 069 -	-147	335 -7	263 -
Share of net income from associated companies	660 -	0	634 -	0
Financial - net expense	333	966	4 555	850
Profit/loss before tax	-12 085	-1 192	33 286 -	-16 826
Income tax expense	0	0	0	0
Profit/loss for the period	-12 085	192 -1	-33 286	-16 826

• NOK 12.3m in revenues in 2021 following acquisition of Kraft Laks and sale of smolt to third party in Q3 – last delivery under existing contract in Q2 2022
• Operating loss of NOK 12.4m in Q4 reflecting higher activity level and higher head count ahead of production start
• Continued focus on implementation of operational reporting, quality systems, certifications, digital infrastructure and preparations for commercial activities

CAPEX INDRE HARØY

• Q4 2021 capex
• Indre Harøy capex of NOK 215 million
• NOK 10 million capitalized internal G&A
• Accumulated capex of NOK 920 million from project initiation in 2019 ex. capitalized internal G&A
• High activity level during the quarter
• Finalization of intake station
• Installation of process equipment incl. heat pump, O2 systems, CO2 and nitrogen strippers
• Concrete works nearing completion
• Works inside fish tanks including coating and installation of equipment

Accumulated CAPEX Q4 2021 (NOK million)

INCREASED VISIBILITY ON PHASE 1

• Total capex for completion of phase 1 in line with budget
• Selected strategic upgrades and adjustments covered by already built-in project buffers:
• NOK ~40m related to capacity increases enabling efficiency gains for phase 2; joint feed storage and distribution system, waste-water treatment, emergency power systems and other smaller items
• NOK ~30m mainly related to increased raw material prices, in particular concrete
• NOK ~20m allocated to potential but not materialized or identified changes
• NOK 480m in remaining capex gradual reduction over the coming quarters towards completion

1) Net of grants directly tied to capital expenditure and exclusive of internal capitalized G&A costs

• Highlights
• Extending the ocean potential™
• Operations
• Financials
• Summary and outlook
• Appendices

ROADMAP TO 70,000 TONNES HOG

CONTROLLED PRODUCTION RAMP UP DURING 2022 – STEADY STATE SMOLT RELEASE VOLUMES FROM Q4

SUMMARY & OUTLOOK

• Excellent project execution on track for first smolt release in March 2022 – capex in line with budget
• Continued progress in Korea
• First harvest end 2022 well aligned with strong salmon market outlook the next couple of years
• Salmon Evolution's HFS technology addressing industry growth and ESG challenges
• Phase 1 completion in Q4 2022
• Preparations started for phase 2 construction on back of successful phase 1 ramp up
• Fully funded for all committed projects

Indre Harøy January 2022

• Introduction and highlights
• Extending the ocean potential™
• Operations
• Financials
• Summary and outlook
• Appendices

HIGHLY COMPETENT MANAGEMENT TEAM BACKED BY A BOARD OF DIRECTORS WITH STRONG INDUSTRIAL BACKGROUND

Håkon André Berg Chief Executive Officer

▪ Extensive experience from private equity with more than 10 years experience in various private equity related companies

Trond Håkon Schaug-Pettersen

Chief Financial Officer

▪ ~15 years experience from both the salmon industry and the capital market with prior experience from Hofseth International and Swedbank

Ingjarl Skarvøy Chief Operating Officer

▪ >30 years of experience in the seafood industry

▪ Owner of Terra Mare AS, which owns 0.6% of Salmon Evolution

Odd Frode Roaldsnes Head of Asia and CCO

▪ >15 years experience in seafood sales and marketing ▪ Previously Sales Director in Ocean Supreme

Kamilla Mordal Holo Project Director

▪ >10 years of experience from the building and construction industry ▪ MSc in Civil and Environmental Engineering from NTNU

Selected management team Board of Directors and investor overview

Tore A. Tønseth

• Chairman ▪ CIO of Ronja Capital

• 15 years experience in finance

Kristoffer Reiten Board member

• CEO of Vikomar since 1995
• Processing and downstream expertise

Ingvild Vartdal

• Board member ▪ Partner at Adviso law firm with in
• corporate and international tax

Peder Stette

▪ >20 years experience from technology development in seafood industry

Glen Bradley

Board member ▪ VP and Chair of Rostein, one the

Anne Breiby Board member

▪ Has held board positions in Ulstein Group, Rem Offshore and Akva Group

▪ CFO in Dongwon Industries, one of the largest seafood groups globally

Janne-Grethe Strand Aasnæs

Board member

▪ CEO and majority owner of Strand Havfiske

	Shareholders as of 31.12.2021	% ownership
	Ronja Capital II AS	8.6 %
	The Bank of New York Mellon	6.7 %
	Farvatn Private Equity AS	5.5 %
	Dongwon Industries	5.2 %
	Rofisk AS	4.3 %
	Stette Invest AS	3.6 %
	Artec Holding AS	3.6 %
	Kjølås Stansekniver AS	3.5 %
	Verdipapirfondet DNB Norge	3.4 %
	Jakob Hatteland Holding AS	2.8 %
	Others	52.8%
	Total	100 %

SALMON EVOLUTION WILL HAVE A STATE-OF-THE-ART LAND-BASED FACILITY AT INDRE HARØY