Company Presentation - Oslo November 22 nd 2019 Private & - PowerPoint PPT Presentation

Company Presentation - Oslo November 22 nd 2019 Private & confidential

Executive summary 1 The leading salmon farmer in Iceland – the potential next growth region within salmon farming 2 Integrated from hatchery to sales channel 3 Dedicated management team backed by seafood experts 4 Financials 2

Iceland at a glance – macro indicators Key facts GDP per capita among highest in the world  Population: 360,000 people 70 60 USD thousands  GDP: USD 25.9 billion 50 40 30  Education: 42.4% of people aged 25-64 have 20 graduated from university 10 0  Unemployment rate: c. 3% Norway United States Iceland Denmark EU28 Japan GDP growth projections From fish to tourism in two decades 3

Political landscape Parliament composition Comments  Prime Minister: Katrin Jakobsdottir  The government is a coalition of 3 parties: Left Green Movement, the Independence Party and the Progressive Party  The government parties received 55% of the popular vote and hold 35 of the 63 parliamentary seats 4

Arnarlax is the leading salmon farmer on Iceland Production, capacity, applications and locations of Icelandic salmon farmers 1 Locations West Fjords East Fjords ‘000 tonnes West Fjords 45 39.7 40 37 35 30 17 30 triploid 25 20 8 12 15 triploid East Fjords 10 5 0 Production Capacity Applications Source: Arnarlax, Markó Partners – pending application status Notes: 1 Only for Atlantic salmon 5

The Marine Research Institute in Iceland recently released a biological risk assessment providing support for Arnarlax ’ licenses and applications West Fjords Maximum volume according to Allowable Biomass Risk assessment Arnarlax  1 Tálknafjörður 1 20,000 MT 20,000 MT 3  2 Arnarfjörður 20,000 MT 20,000 MT 2  3 Dýrafjörður 10,000 MT 10,000 MT 4 Ísafjarðardjúp 30,000 MT 0 MT No 2 8 Total West Fjords 80,000 MT 50,000 MT 7 6 5 East Fjords Maximum volume according to Allowable Biomass Risk assessment Arnarlax 5 Berufjörður 10,000 MT 6,000 MT No 6 Stöðvarfjörður 7,000 MT 0 MT No 7 Fáskrúðsfjörður 15,000 MT 7,500 MT No Closed by regulation Closed by nature 8 Reyðarfjörður 20,000 MT 7,500 MT No To be decided Total East Fjords 52,000 MT 21,000 MT 1 Does also include Patreksfjarðarflói and Patreksfjörður 2 Arnarlax has applications for 10,000 tons 6

New legislation puts the focus in maximum biomass instead of harvesting to determine site capacity Capacity Location applications Arnarfjörður Ísafjarðardjúp Capacity based on Volume 4,500 MT Volume 10,000 MT Harvest (under previous Max biomass (new Company sites legislation) legislation) Probability 50% Probability 50% Tálknafjörður 10,700 MT 12,200 MT Expected Expected Arnarfjörður 10,000 MT 10,000 MT 2021 2021 timing timing Fossfjörður 1,500 MT 3,000 MT Current licenses 22,200 MT 25,200 MT Applications Arnarfjörður 4,500 MT Ísafjarðarðjúp 10,000 MT Reykjavik Total licenses and applications 39,700 MT Note: Probabilities are based on managements’ own opinion 7

Iceland has farming conditions similar to Northern Norway, which has become very competitive in recent years Seawater temperatures 1 Day degrees EBIT/kg Annual day degrees (‘000s) West Fjords EBIT/kg (NOK) Finnmark vs. other Norway for LSG, °C in water Norway - Finnmark SALM, NRS and GSF Eastern Fjords 1.9 Norway - Hordaland 30 18 Norway excl. Finnmark Finnmark Northern Fjords 2.2 16 25 14 Southern coastline 3.1 20 12 Western Fjords West Fjords 2.1 10 15 +/- 15% YoY fluctuation 8 Finnmark 2.4 10 6 Northern Norway 2.8 4 5 Southern Norway 3.5 2 -- 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Faroe Islands 3.1 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec  Decreasing production costs and increasing  West Fjords have low temperatures from November to March/April and medium temperatures during profitability for Northern Norway in line with summer until fall increasing production volumes  Lower seawater temperatures compared to Finnmark from January to early summer, and higher  Arnarlax has similar farming conditions as temperatures for the rest of the year Finnmark, illustrating the cost and  Iceland provide beneficial conditions – compensated growth in the summer time profitability potential Source: www.seatemperature.org, Lusedata, Pareto Securities Equity Research, Fiskeridirektoratet, Arnarlax Notes: 1 Average 2002 – 2017 for Norway and average 2016 and 2018 in West Fjords 8

Iceland has a long coastline and a big potential for salmon farming 2017 production (WFE) per region and density Density: Production vs. coastline 138k tonnes 12k tonnes 1,211k tonnes 2017 production/km coastline (tonnes WFE) 80 73 60 48 40 81k tonnes 17k tonnes 174k tonnes 20 2 Iceland vs. Faroe Islands 0 Faroe Islands is small compared to Iceland, even smaller than the West Fjords  Iceland has a large potential when comparing production densities to the neighbour countries Norway and Faroe Islands  Iceland has already established production zones and joint fallow periods for production areas  The figures above include the entire coast line for each country Source: Kontali, Arnarlax 9

Positioned to replicate the growth model of neighbours Norway and Faroe Islands Iceland Norway ‘000 tonnes (WFE) ‘000 tonnes (WFE) Arnarlax Iceland other 1,600 2017 2017 1,400 45 1,200 40 1,000 35 800 30 600 25 400 20 200 15 -- 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018e2020e 10 Faroe Islands 5 0 ‘000 tonnes (WFE) 100 2017 90 80 70 60  Iceland is positioned to leverage on experience and know-how developed 50 over decades in other production regions, especially neighbour countries 40 such as Norway and Faroe Islands 30  Iceland can apply best-practice farming techniques, equipment and 20 regulatory frameworks to support sustainable growth in future salmon 10 farming production -- 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018e2020e Source: Kontali, Pareto Securities Equity Research, DNB Markets, Marko Partners 10

Salmon farming potential on Iceland validated by Norwegian industry giants Overview of Icelandic salmon farmers with ownership from leading Norwegian salmon farmers Icelandic salmon farming company Norwegian partner/ shareholder Ownership 59% 50% 62% 54%     SalMar is a leading Norwegian Norway Royal Salmon ASA (NRS) Midt-Norsk Havbruk AS, owned by Måsøval Fiskeoppdrett AS salmon farming company with a acquired 50% of Arctic Fish in the listed company NTS ASA, acquired 53.5% of Laxar Fiskeldi in harvest volume of 159k tonnes August 2016 through a directed invested in Fiskeldi Austfjarda (Ice June 2016 (HOG) in 2018, including private placement Fish Farm) in March 2017 through – Måsøval Fiskeoppdrett is a family owned salmon farming company contributions from Scottish Sea – a directed private placement NRS is a leading Norwegian salmon located in Sør-Trøndelag with 9 farming company with a harvest Farms in Scotland and Arnarlax – Midt-Norsk Havbruk is a Norwegian concessions for salmon farming volume of ~32k tonnes (HOG) in 2017 salmon farming company with an  SalMar supports Arnarlax by  Måsøval invested in Laxar because  NRS considers Iceland to be an annual production volume of ~15k continously sharing operational tonnes they see a large potential for attractive area for growth and experience and know-how, and  Description Midt-Norsk Havbruk supports Ice growth in salmon farming on entered Arctic Fish to capitalise on through board membership Fish Farm by continously sharing Iceland NRS’ farming knowledge to build operational experience and know-  the company and develop the Las Måsøval, a key employee in how, and through board Icelandic industry Måsøval group, moved to Iceland membership for a period to support Laxar in  Recruited new CEO internally from their contemplated growth NRS  Måsøval supports Laxar through  NRS supports Arctic Fish through sharing operational experience sharing operational experience and through board membership and through board membership Source: Arnarlax, Newsweb, Norway Royal Salmon, various news articles 11

Structural challenges 12

Natural advantages 13

Executive summary 1 The leading salmon farmer in Iceland – the potential next growth region within salmon farming 2 Integrated from hatchery to sales channel 3 Dedicated management team backed by seafood experts 4 Financials 14

Corporate and operational milestones Acquisition and capital increase Incorporated Capital increase First harvest Capital increase NOTC Listing First invoice sent Acquisition of Fjarðalax and private Private placement of NOK 200m In Arnarfjörður, Private placement of The Company lists its West Fjords NOK 50 million to placement of NOK 300m shares in OTC Oslo fund biomass growth 2016 2016 2018 2019 2009 2014 2014 2015 2016 2017 2019 First smolt stocking SalMar entry New Licenses New Licenses SalMar interest 500,000 fish put into the SalMar invests into the Receives licenses for Receives licenses for Increases ownership ocean Company through Salmus AS additional 10,000 MT additional 10,700 MT stake over 50% of the shareholding 15