PRESENTATION Q3 2016 Oslo, 9 November 2016 Charles Hstlund, CEO - PowerPoint PPT Presentation

NORWAY ROYAL SALMON PRESENTATION Q3 2016 Oslo, 9 November 2016 Charles Høstlund, CEO Ola Loe, CFO 1

NORWAY ROYAL SALMON AGENDA:  Highlights for the period  Segment information  Green licenses  Group financials  Markets  Outlook 2

NORWAY ROYAL SALMON Highlights in Q3 2016  All time high operational EBIT of MNOK 218  All time high operational EBIT per kg ex contracts of NOK 33.41  Strong salmon market driven by good demand and low supply growth  High salmon price in the quarter  Steady production costs in Region North and substantially lower production costs in Region South  Good financial flexibility  Acquisition of 50 % of Arctic Fish on Iceland 3

NORWAY ROYAL SALMON Highlights in Q3 2016  Operational EBIT MNOK 218 in Q3 16 NORWAY ROYAL SALMON - KEY FIGURES Q3 Q3 (NOK '000) 2016 2015  Operational EBIT per kg NOK 30.35 Operating revenues 1 106 855 770 518 Operational EBITDA 233 190 36 328 Operational EBIT 218 112 22 649  Average salmon price (NASDAQ) up Income from associates 15 222 12 482 NOK 18.81 per kg from Q3 last year EBIT 250 659 121 565 EBT 286 244 114 938  Harvested volume up 16 % and sold EPS (NOK) – before fair value adjustments 4,92 0,68 ROCE 1) 50,6 % 13,2 % volume up 8 % from Q3 last year Net cash flow from operating activities 119 077 77 602 Investments in tangible fixed assets/licences 14 660 28 236  Gain on financial assets of MNOK 39 Net interest-bearing debt -13 122 558 576 Equity ratio 50,0 % 38,3 %  EBT pre fair value adjustments of Volume harvested (HOG) 7 537 6 519 Operational EBIT per kg 2) 30,35 9,24 MNOK 269 Volume sold - Sales 17 662 16 333 1)ROCE: Return on average capital employed based on 4-quarters rolling EBIT aligned for fair value adjustments / average (NIBD + Equity - Financial assets)  Positive operational cash flow of 2) Operational EBIT for segments incl margin from sales MNOK 119  NIBD down MNOK 160 in Q3 16 4

NORWAY ROYAL SALMON SEGMENT INFORMATION 5

NORWAY ROYAL SALMON Region North EBIT pr kg (ex contracts) KEY FIGURES Q3 Q3 (NOK '000) 2016 2015 34,15 32,79 27,78 Operating revenues 1 038 773 708 256 Operational EBIT * 220 321 60 163 14,54 Volume harvested (tonnes) 7 086 6 206 9,69 Operational EBIT (ex contracts) 34,15 9,69 Loss on open fixed price contracts -3,06 0,00 Operational EBIT per kg 31,09 9,69 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 * EBIT pre fair value adjustments and non-recurring items incl. allocated margin from sales  Operational EBIT per kg ex contracts NOK 34.15  Up NOK 24.46 from Q3 15 and up NOK 1.36 from Q2 16  Sales price FCA packing station up NOK 21.88 per kg from Q3 15 and up NOK 0.27 from Q2 16  Loss on fixed price contracts up NOK 3.06 per kg from Q3 15 and up NOK 0.55 from Q2 16  High harvest weight to premium prices  A significant part of the harvested volume was in September when prices were at the lowest in Q3 6

NORWAY ROYAL SALMON Farming – Region North Production Cost - NORTH Harvested Volume - NORTH 7 086 30,47 6 806 6 501 29,81 29,47 6 206 28,94 28,92 5 468 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16  Production cost of NOK 29.47 per kg  Production cost down by NOK 0.34 from Q2 16 and down by NOK 1.00 from Q3 15  Steady production cost last quarters  Volume up 14 % compared to Q3 15  Operation  Good fish health and sea lice situation 7

NORWAY ROYAL SALMON Region South 21,79 KEY FIGURES Q3 Q3 EBIT pr kg (ex contracts) (NOK '000) 2016 2015 16,38 Operating revenues 66 135 35 650 13,69 Operational EBIT * 8 451 76 Volume harvested (tonnes) 451 312 3,63 Operational EBIT (ex contracts) 21,79 0,24 0,24 Loss on open fixed price contracts -3,06 0,00 Operational EBIT per kg 18,73 0,24 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 * EBIT pre fair value adjustments and non-recurring items incl. allocated margin from sales  Operational EBIT per kg ex contracts NOK 21.79  Up NOK 21.55 from Q3 15 and up NOK 8.10 from Q2 16  Sales price FCA packing station up NOK 15.57 per kg from Q3 15 and down NOK 6.42 from Q2 16  Loss on fixed price contracts up NOK 3.06 per kg from Q3 15 and up NOK 0.55 from Q2 16 8

NORWAY ROYAL SALMON Farming – Region South Production Cost - SOUTH Harvested Volume - SOUTH 49,79 1 912 44,66 41,86 40,41 1 445 36,01 708 451 312 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16  Production cost of NOK 36.01 per kg  Production cost significantly down by NOK 13.78 from Q2 16 and down by NOK 4.40 from Q3 15  Better production have resulted in lower production cost  Volume up 139 tonnes compared to Q3 15  Operation  The growth in Q3 has been better than expected  Good fish health situation 9

NORWAY ROYAL SALMON Associated companies KEY FIGURES Q3 2016 Q3 2015 Other Other Farming associated Farming associated (NOK '000) companies companies companies companies Operating revenues 127 198 44 223 56 118 28 445 Operational EBIT * 16 562 3 113 12 467 441 EBIT 43 654 3 113 34 566 441 Result after tax 39 823 1 689 33 160 1 323 Volume harvested (tonnes) 2 354 1 449 Operational EBIT per kg * 7,04 8,60 NRS' share of result after tax 14 721 502 11 929 554 *EBIT pre fair value adjustments  3 fish-farming companies with 10 licenses 2 harvesting companies 2 hatcheries with a yearly capacity of 8 million smolt  Arctic Fish ehf will be recognised in the accounts from Q4 2016  Q3 16 EBIT per kg of NOK 7.04 for associated farming companies  NRS share of result after tax of MNOK 15.2  Fair value adjustment after tax positive by MNOK 10.4 Shares in NRS owned by associated companies as of 30 Sept. 2016  Recognised at cost in the accounts of the associated companies NRS' share of Number of Fair value fair value Shareholding shares Cost Fair value adjustment adjustment Måsøval Fishfarm AS 36,10 % 252 520 783 35 605 34 823 12 571 Hellesund Fiskeoppdrett AS 33,50 % 1 620 380 13 190 228 474 215 283 72 120 10 Total 1 872 900 13 973 264 079 250 106 84 691

NORWAY ROYAL SALMON GREEN LICENSES 11

NORWAY ROYAL SALMON Production of triploid (sterile) salmon  Experiences with the biomass of triploid salmon today  Generation 2014  Now completely harvested  Growth has been better than for diploid fish  Harvest weight: 5.5 kg  Quality: 92 % superior and ordinary  Generation 2015  Growth seems to be the same as for the diploid fish  No difference in mortality  Generation 2016  Released 2.7 million triploide smolt at 4 sites  No big difference in performance between triploid and diploid fish so fare  Smolt in freshwater plants  Triploid fish grow faster than diploid  Clear positive development with less mortality in the early phase (start feeding) compared to previous experiences  NRS’ experiences so fare are in accordance with the R&D milestone report from AquaGen  Under NRS’ farming conditions, triploid fish perform at the same level as ordinary farmed salmon  The production must be adapted to the needs, such as for special feed, of the triploid fish  Grew faster than diploid salmon in the fresh water period 12  Grew faster or same as diploid salmon in the sea water period

NORWAY ROYAL SALMON GROUP FINANCIALS 13

NORWAY ROYAL SALMON Key income statement items Operating revenues  Revenues up by MNOK 336 (44 %) from 1 200 Q3 15 1 107 1 000 MNOK  995 Average salmon price (NASDAQ) up 18.81 800 per kg 771 600  Sold volume up 8 % 400 Q3 15 Q2 16 Q3 16  EBITDA of MNOK 233.2 (MNOK 36.3 in Operational EBITDA 250 Q3 15) EBIT 15,1 Depreciation 200  Farming: MNOK 14,8 150  Sales price up NOK 21.51/kg 218,1 100  168,5 Production cost down NOK 1.08/kg 50  Harvested volume up 1 019 tonnes 13,7 22,6 -  Q3 15 Q2 16 Q3 16 Sales:  Margins sold volume up by NOK 0.68/kg NOK  EPS pre fair value Loss on fixed price contracts up by NOK 6,00 1.31/kg 5,00 4,00  Depreciation increased by MNOK 1.4 from 3,00 4,92 4,18 2,00 Q3 15 1,00 0,68 -  EPS pre FV up 4.24 per share from Q3 15 Q3 15 Q2 16 Q3 16 14

NORWAY ROYAL SALMON Key balance sheet items  Biomass pre FV up by MNOK 113 from Q2 16  Biomass up by 2 559 tonnes from Q2 16 Q3 15 Q2 16 Q3 16 700  Receivables pre FV up MNOK 70 from Q2 16 657 600 638  Higher volume increased account receivables 613 611 605 500  546 541 Working capital pre FV up MNOK 102 from Q2 16 536 MNOK 515  Accounts payable up by MNOK 101 400  Inventories of feed and frozen fish down by MNOK 6 300  Other current liabilities down by MNOK 27 200  Equity up by MNOK 237 from Q2 16  Equity ratio 50.0 % 100  Capital employed pre FV up by MNOK 72 from Q2 16 0  ROCE 50.6 % Biomass pre FV Receivables pre FV NWC pre FV  ROE (after tax) 65.4 % Q3 15 Q2 16 Q3 16 1800 1600 1605 ROCE ROE 65,4 % 70% 1400 1447 1423 1375 1368 60% 55,1 % 1200 50,6 % MNOK 1000 50% 42,2 % 981 800 40% 34,4 % 600 30% 24,1 % 22,0 % 400 19,6 % 20% 15,4 % 13,2 % 200 10% 0 Equity Cap. Empl. Pre FV 0% 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16