Bakkafrost presentation A world-class company in the salmon industry Capital Markets Day Faroe Islands 12 June 2019 Page 1 DISCLAIMER This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary under-takings or any of such person’s officers or employees or advisors accept any liability whatsoever arising directly or indirectly from the use of this document. Page 2 OUTSTANDING OPERATIONAL AND FINANCIAL PERFORMANCE Average price Norway (NOK per kg HOG) . NOK ~20 price increase from 2013 to 2018 2013 . EBIT/kg conversion . Norwegian industry 1/3 2018 . Bakkafrost 80% 0 10 20 30 40 50 60 70 . Performance driven by Group operational EBIT per kg (HOG, NOK) . The unique Faroese regulatory framework 2013 . Business model adapted to market and biological requirements . Markets recognizing the uniqueness in taste, texture and nutrition 2018 0 5 10 15 20 25 30 35 Bakkafrost Norway Source: Kontali, Company reports Notes: EBIT/kg figures for Norway based on largest listed companies Page 3 PERFORMANCE DRIVERS WITHIN THE FAROESE VETERINARY MODEL Page 4 THE SECRET BEHIND THE FAROESE BUSINESS MODEL Structure of production zones . Strong regulatory framework . Few players to agree on coordination of unregulated matters – avoids “tragedy of the commons” . Limited overlap of players within production zones . Autonomy to adjust production cycles/fallowing periods Licenses . Existing licenses are operated on a 12-year rolling lifespan system with automatic renewal unless . Subject to regulatory compliance . Licenses give right to utilize given area of fjords for farming fish . No MAB, but strict regulative measures on farming activity maintaining environmental sustainability Page 5 INTEGRATED BUSINESS MODEL UNDERGOING SIGNIFICANT INVESTMENT PROGRAMME Investments 2013-2018 (MDKK) Page 6 MARINE DIET – IMPACT ON FISH WELFARE AND PRODUCT NUTRITION Development of feed recipes - Norway Key performance indicator 2016-18 100% 90% 80% Bakkafrost 70% 60% 50% 40% 30% 20% Norway 10% 0% 2,5 2,7 2,9 3,1 3,3 3,5 3,7 3,9 4,1 4,3 4,5 Yield per smolt (kg, HOG) Fish oil inclusion Fish meal inclusion Non marine inclusion Source: Kontali, Bakkafrost Source: Holtermann Omega 3/Omega 6 ratio consumer portion 2017 54% Non marine inclusion 79% Bakkafrost 30% Fish meal inclusion 12% 16% Fish oil inclusion 9% Norway 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Bakkafrost 2019 Norway 2015-2019 0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 Page 7 Source: Holtermann, Bakkafrost Source: Sjømatdatabasen, Bakkafrost INTEGRATED SUSTAINABILITY APPROACH HIGHLIGHTS FROM HEALTHY LIVING PLAN Page 8 BIOLOGICAL PARAMETERS Mortality rate Economic Feed Conversion Ratio (EFCR) 23 1,6 21 19 1,5 17 1,4 15 13 1,3 11 Mortality Mortality rate (%) 9 1,2 7 1,1 5 2016 2017 2018 1 Economic feed conversion ratio Norway Bakkafrost 2014 2015 2016 2017 2018 Norway Bakkafrost Harvest Weight (HOG) 5,5 . Indication of well managed/functioning biology 5 . Declining cost curve with weight (fixed cost dilution) 4,5 4 . Indication of animal welfare 3,5 3 Average harvest weight (HOG) 2016 2017 2018 Norway Bakkafrost Page 9 Source: Kontali, Bakkafrost SIGNIFICANT COST ADVANTAGE Comparison – Group cost per kg, NOK (2017) . Costs materially below average level in Norway Bakkafrost . High other costs due to low capacity utilization . Wellboats, treatment vessels, processing Norway . 2018 costs somewhat higher than 2017 32 33 34 35 36 37 38 . Isolated mortality incident NOK per kg, HOG in box at processing plant . Adjustment difficulties for new mechanical sea lice method Comparison – Group cost items (2017) . 2019YTD costs significantly improved from 2018 . Well invested infrastructure impacting depreciation . Good prospects for fixed cost dilution in coming years Source: Kontali, Company reports Note: (1) Harvesting, fish transportation and processing/packaging Page 10 PRICE ADVANTAGE – DIFFERENTIATING FACTORS Page 11 PRICE ADVANTAGE – DIFFERENTIATING FACTORS Size distribution and price Revenues by geography 35,0% 80,0 Eastern Europe 70,0 25% Western 30,0% Europe 60,0 31% 25,0% 50,0 20,0% 40,0 15,0% 30,0 10,0% 20,0 Proportion of harvest 5,0% 10,0 Price Norway, NOK/kg HOG Asia 24% North America 0,0% 0,0 20% 1-2 kg 2-3 kg 3-4 kg 4-5 kg 5-6 kg 6-7 kg 7+ kg Bakka Norway Price Norway Omega 3/Omega 6 ratio consumer portion 2017 Bakkafrost Norway 0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 Page 12 Source: Sjømatdatabasen, Bakkafrost THE BAKKAFROST BRAND AND FAROESE ORIGIN . Premium pricing through visibility of . The Bakkafrost brand . Faroese origin . Retail sales focus . Visibility in the shelves and wet counters . Food service/Restaurants . Bakkafrost and/or Faroese origin on menus Page 13 VALUE ADDED PRODUCTS SIGNIFICANT PROPORTION OF SALES . VAP contract coverage: 30-40% Contract coverage - VAP . Brand/Origin visibility 100% . Reduced exposure to spot prices 90% 80% . Contracts normally vary between 6-12 months 70% . Fixed prices 60% . 2018 impacted by change in product portfolio 50% 40% . 2019 coverage at 2015-2017 level 30% 20% 10% 0% 2012 2013 2014 2015 2016 2017 2018 VAP Spot Page 14 PRICE ADVANTAGE . Significant price premium Comparison – Price 2017 . Larger fish fetch a higher price Bakkafrost realised superior . Good market access . Significant Bakkafrost brand premium component Spot Norway . Faroese/Bakkafrost origin favoured in many markets 54,0 56,0 58,0 60,0 62,0 64,0 66,0 68,0 NOK per kg (HOG) . High marine index Comparison – Price 2017 . Excellent texture and taste 68,0 . High customer satisfaction index 66,0 64,0 62,0 60,0 NOK per kg (HOG) 58,0 56,0 54,0 Spot Norway Weight Brand Bakkafrost Downgrades Total realised premium realised price superior Source: Kontali, Bakkafrost Page 15 SUMMARY – EBIT PER KG COMPARISON Group operational EBIT/kg Spot Norway vs realized prices, NOK (2017) 68,0 66,0 2018 64,0 62,0 60,0 2017 NOK per kg (HOG) 58,0 56,0 0 5 10 15 20 25 30 35 54,0 Bakkafrost Norway Spot Norway Weight Brand Realised Downgrades Total realised premium superior price Source: Kontali, Bakkafrost . Material outperformance in EBIT/kg Comparison – Group cost items (2017) . Differentiated product . Sustainable farming . State of the art infrastructure . Alignment between sustainability and profitability Source: Kontali, Company reports Note: (1) Harvesting, fish transportation and processing/packaging Page 16 ORGANIC GROWTH DRIVERS Large smolt strategy New production cluster New farming methods Growth Drivers Historic harvest (tonnes HOG) 60.000 50.000 40.000 30.000 20.000 10.000 0 2012 2013 2014 2015 2016 2017 2018 Page 17 LARGE SMOLT STRATEGY - CONCEPT . Risk management . Production efficiency . Growth Page 18 LARGE SMOLT STRATEGY – EXPECTED IMPACT Larger smolt will reduce time of cycle in sea farming Smolt release (million pcs) 20 . Harvest cycle every second year from the same fjords until effect 18 16 from larger smolt evolves 14 12 . Smolt size will gradually increase from 100-200g to 500g by 2022 10 8 . Smolt release will gradually increase from ~10-11 million pcs to 6 4 ~16 million pcs 2 0 . Production volume will gradually increase to ~76 thousand tonnes Smolt size on released fish (size gram) 600 500 400 300 200 100 0 Page 19 NEW PRODUCTION CLUSTER - SUÐUROY . Suðuroy is isolated in the south of the Faroe Islands . Own production cluster . Risk reduction . The farming operation on the islands was underdeveloped . Bakkafrost started investment in 2016 when Faroe Farming * was acquired . The farming legislation stipulates that all salmon farmed in Suðuroy shall be harvested in Suðuroy *) Hov A-18 started operation in 2018 Page 20 NEW PRODUCTION CLUSTER - SUÐUROY . Four farming sites operational in 2019 Harvest capacity in Suðuroy – tonnes HOG 16.000 . Froðba A-15 14.000 . Porkeri A-19 12.000 10.000 . Hov A-18 8.000 . Hvalba A-23 6.000 4.000 . Implementing large smolt strategy in Suðuroy 2.000 0 . Suðuroy has capacity to harvest ~ 15 thousand tonnes annually 2019E 2020E 2021E 2022E 2023E in 2023 Hvalba Page 21 ~40% HARVEST GROWTH EXPECTED (2019-2023) . Expecting growth ~22 thousand tonnes (HOG) Estimated harvest profile 2019-2022 (Thousand tonnes HOG) . 80 Large growth strategy 40% Growth . Development of Suðuroy 70 9% CAGR 60 50 40 30 20 Harvest,thousand tonnes (HOG) 10 0 2019 2020 2021 2022 2023 Page 22 PAST CAPACITY DEVELOPMENT INFRASTRUCTURE . Summary main investments 2014-2018 Development in capacity constraints . First stage of major smolt investment programme 2014 2018 Smolt . Expansion of seawater capacity . Suðuroy FOF . Large smolt strategy Seawater . Acquisition of 2 farming service vessels . Acquisition of live fish carrier Vessels - Treatment . Commissioning of Glyvrar processing site Vessels - Transportation Primary processing . Large smolt capacity current bottleneck 0 20 40 60 80 100 120 Capacity - Thousand tonne HOG equivalent 2014 2018 . Material free capacity in all other parts of infrastructure Page 23 Note: FOF Fishmeal, fish oil and fish feed EXPECTED IMPACT OF 2019-2022 INVESTMENT PROGRAMME . Investment focus Development in capacity constraints . Large smolt capacity 2018 2022 . Vessels – Transportation Smolt . Bottleneck shift from smolt to seawater sites FOF . Infrastructure rigged for application of new technology Seawater Vessels - Treatment Vessels - Transportation Primary processing 0 20 40 60 80 100 120 140 160 Capacity - Thousand tonne HOG equivalent 2018 2022 Page 24 Note: FOF Fishmeal, fish oil and fish feed INDUSTRY R&D INTO NEW PRODUCTION TECHNOLOGIES LARGE SCALE TRIALS UNDERWAY Page 25 INFRASTRUCTURE PREPARED FOR APPLICATION OF NEW TECHNOLOGY .