RS Platou Oslo 4 June 2009 Geir Isaksen CEO
Global activities and key business areas Distribution of revenues (2008 - NOK mill.) Feed Farming Agri Total* Percent of group total Norway 3 380 827 1 560 5 767 52 % Chile 2 575 903 3 477 31 % Canada 515 635 1 150 10 % UK 455 233 688 6 % Group Total 6 925 2 598 1 560 11 082 100 % 62 % 23 % 14 % Eliminations -1 251 Group Total 9 832 Feed Farming * Total by country not adjusted for inter company sales Presence in all major salmon producing regions within both feed and farming 2
Farming : Growth and earnings development Growth in sales volumes by region Cermaq farming EBITA development (1000 T wfe) 140 120 100 80 60 40 20 0 Scotland Norw ay CAGR 14% Canada 8 8 9 Chile 17 7 25 34 8 30 22 24 11 14 4 22 10 53 52 60 53 48 35 2003 2004 2005 2006 2007 2008 Total mill (NOKm) 11 111 504 1106 418-131 24 Scotland 154 Norw ay Canada 373 Chile 49 123 97 556 103 3 345 103 201 201 222 95-80 -58-14 -4-32 -110-332 2003 2004 2005 2006 2007 2008 A compound annual growth rate in sales volumes of 14% Organic growth and through acquisitions Very good profitability in Chile prior to ISA Solid performance in Canada and Norway Scotland poor results, restructuring underway 3
EWOS volumes Total feed market will drop more than farming volumes in 2009 Q1 reduction of 34% in EWOS is not indicative of the full year impact due to seasonality of feeding between regions Chile has normally the highest volume share in Q1 Total volume reduction in EWOS in 2009 expected to be around 15% EWOS margin still expected to improve this year Volume share by region Q109 7 % 10 % Norway Chile 50 % Canada Scotland 33 % Volume share by region Q108 9 % 5 % 36 % Norway Chile Canada Scotland 51 % 4
Chilean harvest 2008 Volumes up by 6,5 % in 2008 Atlantics increased by 9 % - Average size reduced by 0,5 kg - Average mortality rate increased especially in the last part of 2008 Trout increased 6 % Coho increased 2 % (but drop by season) Tonnes Thousands 800 700 600 500 400 300 200 100-2006 2007 2008 Atlantic Trout Coho 5
Biomass has dramatically decreased Dramatic drop in biomass from April 08 to April 09 25.0 Total number of fish down from 120 million to 20 million for G6 companies Sales volumes in 2009 will be down by more than 50% Millions of Smolts 20.0 15.0 10.0 5.0 Apr-08 Apr-09 for total industry Further drop into 2010 - Less 500g 1000-1500 2000-2500 3000-3500 Weight Grammes 4000-4500 Above 5kg 6
Smolt release decreased The number of smolts released in 2008 was substantially reduced compared to 2007, especially in the last 3 months. Impact on 2010 production volumes 25,000 20,000 15,000 10,000 5,000 0 Atlantics smolt release 2007 2008 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 7
Why such a reduction? Sanitary situation is unstable - All areas are infected - Transmission of the ISA virus believed to take place in both fresh water and sea - Transferring Atlantic smolt under these circumstances implies high risk New Governmental regulations - All sites will have to be fallowed within the next 18 months ISA virus 8
Governmental measures Area management (neighborhoods) 53 neighborhoods established All sites in a neighborhood must be fallowed in a coordinated way for at least 3 months after maximum 24 months of production Each neighborhood decides when they want to start their fallowing period, and if they want to apply shorter cycles than the maximum Region X neighborhoods 9
New regulations The industry cooperates with the Government to improve regulations concerning transmitting of disease. The following regulations are already in effect: - Imported eggs: brood stock must be screened against ISA and PD - Domestic eggs: individual screening for ISA and other diseases - No transportation of live fish between sea sites - No mixing of species allowed - Closed containment for mortality, nets, etc - Mandatory effluent treatment at processing plants 10
Proposed regulations The following regulations are proposals expected to be implemented over coming months: - Improved monitoring of sea beds - Maximum four months to transfer fish to a certain sea site, in order to ensure no mixing of generations (single class) - Minimum one month fallowing for all sites (including lakes) - Dedicated Well Boats for smolt transfer or harvesting only 11
When back in business? Based in current transfers, production will stay low through 2010 Transfers will not increase until the sanitary situation has improved Improved sanitary situation require that the Governmental regulations are put in place Current financial stress makes access to capital restricted, will slow down growth even when the ISA is under control The new Government regulations will reduce capacity long term Chile, With regions 12
What will happen to Coho and Trout No rush by industry to stock more Coho and Trout Stocking levels remain at similar levels as last year Markets (demand) for these species are not growing at same fast rates as Atlantic salmon Cash constraints in Chilean industry give problems to fund working capital for growth 13
Mainstream Chile sales volume 2009 25 1000 T GWE 20 15 10 5 0 Q1 Q2e Q3e Q4e 2009e Q4 2008 guiding Total 23 12 2 7 43 43 Trout 7 2 0 1 9 11 Coho 8 2 2 5 18 16 Atlantic 8 8 1 1 17 16 Latest company estimates 14
A different business Chilean salmon farming has had a very expensive experience, Mainstream Chile went from an EBIT of 556 MNOK in 2006 to a negative EBIT of 332 MNOK in 2008 A good coordination between the Government, companies and science is required to reshape the industry All other regions in fish farming must learn from this experience Chile will be back in business, and the business will be changed 15
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