Salmar Asa

Good morning everyone and welcome to the presentation of Salmar's results for the fourth quarter of 2024. My name is Frode Arntsen and I am the CEO of Salmar and today I'm joined as usual by our CFO Ulrik Steenvik. At Salmar, it is always about producing salmon on the salmon's terms. As you know, 2024 has been a challenging year for Salmar, but it's good to present the figures today where we see improvements in biological performance. This gives us a brighter outlook for the coming year compared to when we stood here several times last year. The commitment, effort and passion our employees have shown in 24 make me proud. It has been demanding for all of us in various ways, especially for those who go out to sea every day to take care of the salmon, aiming for large, healthy and fresh fish. Through diligent work, day in and day out, by people who care, together with a strong and solid Salmajr setup, we have managed to get through the year in an okay manner. Even though we naturally wish that 2024 had been different and better than it actually was. But our focus is always forward. We must always do what we do today better than yesterday. We must continue and strengthen the work Salmeir has done since 1991, ensuring good interaction with the environment we operate in to optimize in relation to fish, people and values. We have a fantastic starting point in Norway with nature, the Gulf Stream and our coastline. The review will follow the same order as before. I will take you through some highlights for 24 and the fourth quarter, as well as the operational results for various segments. Then CFO Ulrik will take you through the financial update. Finally, I will focus on how we are investing in the value chain to improve fish welfare and reduce costs. 2024 has been a challenging year, as mentioned. Environmental conditions and biological challenges have affected the operational choices we had to make and the biological performance. On the average weight, the cost, growth, volume, quality and share of downgraded fish have all been negatively impacted. However, the year has also provided us with important lessons and knowledge that we will take with us. The setup we have built over time at Salmaid has been very important. Our belief in large local harvesting and processing capacity near where we farm has been crucial. At the same time, we see that the foundation and philosophy of our operations remain just as relevant and strong. The right location, the right smoke, the right technology, the right feed and the right handling by people who always want to do a little more and care. This is the core and guiding principle at Salma every single day. We know what has caused the challenges we experienced in 24, and we take those lessons with us as we move forward and adapt to the challenges so that we can continue to produce salmon on the salmon terms. Although we have not found a 100% solution to all challenges, such as jellyfish and lois, it strengthens our belief in the way forward and the volume potential we have in our value chain. While we have handled the challenges well, we have also maintained a robust financial position, which is why the board proposed a dividend of NOK 22 per share for the financial year 2024. Let's now move on to the results for the fourth quarter of 2024. In total, we harvested 67,300 tons in Norway with a margin of NOK 22.1 per kilo. For the Norwegian operations, we delivered an operational EBIT of NOK 1,485 million. Including Icelandic salmon and salmon rock erosion, we harvested 73,800 tonnes in the quarter, with a total operational EBIT of NOK 1,489 million and a margin of NOK 20.2 per kilo. Despite challenges at sea early in the quarter, we see that biological performance improved throughout the quarter. and the structure in sales and industry contributed well to handling volume variations during the period. Both production cycles in Salmar Aker Oceans units are well underway. The result in Iceland is better than earlier in the year, but still high costs are dragging down the result. Once again, Scottish Shea Farms delivers relatively good results. In addition, we have taken steps to strengthen our value chain and structure. The sale of Osan smalt was completed in December. The purchase of a controlling stake in Knutsaug Fisk in mid-Norway was completed in the first quarter. Additionally, I will also provide some comments on our ownership interest in Vilsgård. The harvest volume for 2025 remains unchanged in all regions. In summary, we are reasonably satisfied with the overall results for the quarter, and it is good that we have seen an improvement in the biological situation throughout the quarter. To give you more details, I would like to go through the operational update, starting with Farming Central Norway. where we harvested 39,700 tons in a quarter with an operational EBIT of NOK 622 million, giving an EBIT per kilo of NOK 15.7. We mainly harvested the autumn 23 generation during the period. We also started some harvesting of the spring 24 generation. As mentioned in the previous quarterly presentation, we had sporadic visits from jellyfish around Smyrna area in P06. This affected the average weight of the fish we harvested during the period. We choose to harvest some individual cages at a lower average weight than desired to ensure fish welfare. Additionally, we had to reduce the volume somewhat towards the end of the year due to very bad weather and to optimize both biology and handling towards the end of the year. Looking ahead, we will continue harvesting from the autumn 23 and spring 24 generations in the first quarter. Despite the challenges we experienced in the fourth quarter, the biological status of the fish at sea is satisfactory. The cost level in the first quarter is expected to be at the same level as in the fourth quarter. We expect a significantly lower volume in the first quarter compared to the same time last year, which is a conscious choice to optimize the utilization of our MAB. Volume guidance for the year remains unchanged at 154,000 tons. In northern Norway, we harvested 27,700 tons in a quarter, with an operational EBIT of NOK 773 million and an EBIT per kilo of NOK 27.7. It is gratifying to see significantly better results from northern Norway in the fourth quarter compared to earlier quarters in 2024. to harvest the autumn 23 and had good biological development during the period. This led to reduced cost levels and improved price achievement for the fish. As in central Norway, some volume was moved to 25 due to bad weather towards the end of the year and optimization of biology and handling in the last weeks of the year. Looking ahead, we will continue harvesting from the spring and autumn 23 generations. The biological status in the north is good and significantly improved compared to the same time last year. In the first quarter, we expect a slightly lower cost level than in the fourth quarter. The volume is expected to be slightly lower than what we had at the same time last year as we choose to build MAB. Guidance for 2025 remains unchanged at 100,000 tons. The sales and industry segment delivers an operational EBIT of NOK 131 million. Once again, the flexible setup in sales and industry shows its strength. When we choose to harvest some individual cages at short notice in November in central Norway, or when there are individual weeks with very high volumes, I am simply impressed by the strength of the value chain in Salmar. All plans change in a short time, and the harvesting facility and sales assist farming in handling challenges by being able to handle large volumes in a short time, while further processing ensures that we utilize the fish in a good way. Higher volumes in the quarter have also provided good capacity utilization during the period. Spot prices were as expected higher in the fourth quarter, and with a contract share of 30%, this still made a positive contribution, but lower than in the previous quarter. At the same time, the sales team managed to handle spot sales well, so the price we achieved for our fish in the market was good. In the first quarter, we expect significantly lower volumes through our facilities due to seasonal variations. The market for salmon remains strong, and the dialogue we have with the customers shows that they want even more fish. And it is motivating to hear many customers present their plans for further growth opportunities. For the first quarter of 2025, we have a contract share of 45%, given the low harvesting volume. And for the whole of 2025, it is around 25%. The price points on the contracts are better than we had in 2024, which is for us a good signal of a strong market also in 2025. Moving to Salmar Aker Ocean, which had an operational EBIT of minus 12 million NOK. As you know, the segment now has two semi-ocean units in operation. Arctic Ocean Farming started production in August, and Ocean Farm 1 started in May-June. Especially Ocean Farm 1 has good development so far in its cycle. volume guidance for this year maintained at 9 000 tons and we expect harvesting from both units in the first half of 2025 in the first quarter we will harvest arctic offshore farming when weather windows allow As mentioned earlier, we have experienced good biological performance on the fish that have been harvested from our semi-offshore units with low mortality, high growth and few lice treatments. This gave us increased confidence in the further potential in offshore farming. At the end of January this year, we were awarded a new location at Frohavet, named Frohvar. No investment decisions have been made beyond the two units currently in operation and producing salmon. But the location gives us strategic opportunities in Norway, in addition to continuing to look at opportunities in Scotland. Moving to Vestfjords in Iceland. In Iceland, 6,500 tons were harvested in the quarter with an operational EBIT of 16 million NOx and an EBIT per kilo of 2.4. An improved result compared to earlier in the year. Due to higher volumes, capacity utilization has been better, but the cost base of the fish we harvested is still high due to the challenges we experienced earlier in 24. The biological situation has been more stable in the fourth quarter, and our focus going forward will be to optimize the utilization of the licenses we have in Iceland and build biomass in 2025. This also meant that harvesting volumes in the last couple of weeks of 2024 were postponed due to a combination of MIB building and bad weather. Looking ahead, we expect a continued high cost level and very low volume in the first half of 2025. We expect the volume guidance for 2025 remains unchanged at 15,000 tons. Our associated company in Scotland, Scottish Seafarm, which continues its good development. In the quarter, 9,000 tonnes were harvested with an operational EBIT of 93 million NOC and an EBIT per kilo of 10.3. For the year, the harvesting volume ended at 40,400 tonnes, which is a record high volume for Scottish. Very gratifying and congratulations. We like setting records. The trend of good results of harvested fish continues in the fourth quarter. High harvesting volume in the period with a very good average weight of the fish, over five kilo gutted weight, has given good results both in terms of cost level and price achievement. The company also reports continued good biological status at sea, where the next generations of fish to be harvested are doing well in all regions. The lessons from the events experienced in 22 and 23 have led to better results in 24. And in 25, we will continue to optimize the site structure and smolt strategy so that we can realize the potential in the value chain we have in Scotland. The volume guidance for 2025 remains unchanged at 32,000 tons. With this, I have come to the end of the operational update and will give the floor to Ulrik, who will take you through the financials.

Thank you, Frode, and good morning to all of you. As mentioned several times throughout the last year and also commented by Frode just now, 2024 has been a challenging year both in the areas where Salmar operates and for Salmar, impacting both volume, cost and price achievement in 2024. However, the solid and cost-effective setup in Salmar and the Salmar culture demonstrates an ability to manage and mitigate the financial consequences of challenging situations, but will need for increased resource use to address the challenges in 2024. We are currently experiencing positive developments in both production and key figures. But I would like to remind you that in a business engaged in biological production, with long production time, this will not immediately be reflected in the profit and loss statement. The financial position, however, remains robust and enables the realization of the group's operational and growth strategies. This will help ensure organic growth in line with previously stated goals, in addition to consistently demonstrating both the ability and willingness to seize opportunities for profitable growth through acquisitions. This was most recently demonstrated through the transaction with the owners of Knutshög Fisk. My review today will focus on changes throughout the year to a greater extent than before, where the focus has been on quarterly changes. Towards the end, I will comment on changes in the financing carried out at the beginning of the first quarter of 2025 and then conclude with the proposal for dividend for 2024. I will start with some comments related to the profit and loss statement. At the top right, we see that operational EBIT increased by 448 million NOK compared to the third quarter, from 1,041 million NOK to 1,489 million NOK. The increase is driven by both higher volume and higher price achievement, which increase operational EBIT by 217 million NOK and 259 million NOK respectively. Higher demand increase the price level and the price achievement is further positively affected by an increased share of superior quality. The reason for increased costs of 73 million NOC is related to event-based mortality during the period. Beyond this, costs in total show a slight decline. Iceland and Salma-Laker Ocean contribute with a positive change of a total of 45 million NOC, mainly explained by increased harvest volume. Moving to the profit and loss statement on the right, I will comment on the year-over-year changes. We start at the bottom of the slide. Harvest volume was reduced by 9% to 231,800 tons, and EBIT per kilo was 23.4 after a combination of increased cost and lower price achievement in 2024. Driven by biological development, reduced growth, lower harvest rates and reduced superior quality caused by jellyfish and increased sea life pressure in the areas we operate in. In total, this has contributed to an EBITDA of 7,120 million NOK, which is a reduction of 26% from the previous year. Operational EBIT was 5,429 million NOK. Production tax in Norway and resource tax in Iceland amount to 241 million NOK, an increase from 2023 by 33 million NOK due to increased tax rates. Non-recurring items, which are limited to cost related to lawsuit restructuring and write-downs, increase the result by 58 million NOK in 2024, and 128 million NOC in the quarter. The most significant items for 2024 are gain from the sale of ocean setter fish of 198 million NOC, cost related to decommissioning of the cleaning fish activity with 65 million NOC, and the write-down of nets at Arctic offshore farming in connection with planned replacement with 46 million NOC. As a result of higher biomass and better prices on the contract portfolio, net fair value adjustments are positive. The fair value adjustment increases the result by 137 million NOK. The higher biomass is positively affected by higher number of fish in sea. The result from associated companies was positive with 122 million NOK in 2024, an increase of 149 million NOK. Very significant improvement in Scottish sheep farm is the main driver. Net financial cost amounts to 1,214 million NOK, and it's relatively stable from the previous year. In total, this gives a result before tax of 4,201 million NOK. Ordinary corporate tax together with the recognized resource rent tax cost for 24 amounts to a total of 1.1 billion NOK. The result of the tax cost is therefore 3105 million NOK for 2024, an increase of 359 million NOK from 2023. As you can see, this gives an adjusted earnings per share of 22.5 NOK per share for 2024. Moving on to the balance sheet, we see that the total capital has been reduced by 528 million NOK from the previous quarter to 54.4 billion NOK. The change is mainly due to the previously communicated sale of Osan Satterfisk, which was completed in the fourth quarter and that reduced the total capital by 497 million NOK. Beyond the changes due to OSAN certificates, fixed assets have increased by 174 million NOK and current assets have decreased by 203 million NOK. Investments during the period are mainly related to activities in the sea phase. The reduction in current assets in the quarter is driven by a reduced value of biological assets due to seasonally high harvest volume and consequently reduced number and biomass in the sea from the previous quarter. Conversely, accounts receivable increased due to higher prices at the end of 2024. Compared to 2023, however, we have a both higher number and higher biomass in the sea, which provides a good basis for higher volume in 2025 and the beginning realization of the organic growth potential. Through the reduction in total capital and the net positive result during the period, the equity ratio has increased to 37%. NIBD, including leasing, has been reduced to 18.5 billion NOK, where the key figure for debt ratio NIBD, including leasing on EBITDA, has increased to 2.6. And as you can see, and unlike others, Vinsalmar chooses to comment on and show NIBD, including leasing. Without leasing, the debt ratio is 2.4. This means that by the end of Q4 2024, we have 6.8 billion NOK in available liquidity in the group. The liquidity is also positively affected by the issuance of new bonds now in the first quarter of 2025. We informed at the previous quarterly presentation that we had entered into an agreement with the owners of Knusre Fisk, securing us controlling influence in the company with settlement 80% in shares and 20% in cash. The transaction was completed in the first quarter and will result in the issuance of 716,651 new shares and a change in debt, including debt in Knusafisk, totaling 211 million NOK. We are pleased to have completed the transaction and to start working on developing the company further for everyone's benefit. Further pleased to demonstrate both the ability and willingness to carry out acquisitions that provide us with opportunities for profitable growth in the value chain. I will briefly explain the change in net interest-bearing debt, including leasing, in a quarter. We started with a nib, including leasing, of 19,720 million NOK. The sale of OSAN certificates ultimately reduced net interest premium debt by 648 million NOK. So the new interest premium debt became 19,071 million NOK. During the period, we had a good cash flow from operations, where EBITDA was 1.9 billion NOK. Tax payment amounted to 260 million NOK in a quarter, and the change in working capital was 37 million NOK. Total investments amounted to 531 million NOK in a quarter. 43 million NOK is related to cash consideration for the buyout of minority interests. Investment in fixed assets amounted to a total of 488 million NOK and are mainly related to activities in the CFS and in accordance with previously communicated prioritized measures. Total investments in fixed assets for the year ended at 1790 million NOK, which is in line with the original expected capex level for 2024 and supports the strict capex discipline in Salmar. The amount spent on interest and leasing payments during the period is higher than in previous quarters and is affected by interest paid to others. Taking these payments into account, we end up with 18,493 million NOK in NIBD, including leasing, at the end of 2024. This is an ordinary reduction of 578 million NOK in a quarter, which implies a total reduction, including Osan Satterfisk, of 1,226 million NOK. As a result of tax payments and the building of working capital in the first quarter, an increase in NIBD including leasing is expected at the end of the first quarter of 2025 compared to the fourth quarter. But this does not affect our assessment of the financial situation for the group. Salmar's strategy is to be robustly financed at all times and to stay ahead of maturity dates. Therefore, in January this year, Salmar issued new green bonds totaling NOK 4,350 million divided into the following two tranches. 3,250 million NOC in a five-year unsecured green bond with a floating rate of three-month nibble plus 1.15% per year. 1,100 million NOC in a seven-year unsecured green bond with a floating rate of three-month nibble plus 1.35% per year. Danske Bank, Danmark Markets, Nordea and SEB, the global coordinators and joint lead managers, and Rabobank was joint lead manager on the transaction. We have then established 100% green unsecured financing with a suitable maturity structure, the lowest capital cost from a seafood company on the seven year transaction. This gives us the flexibility to carry out the investments we want in the value chain and the proceeds will be used in accordance with our green framework, which is available on our website. In summary, we now have a flexible financing with a long time to maturity and frameworks that ensure sufficient liquidity at all times. As the financial update shows, Salmar has a robust financial position where, despite the challenges, we have managed to create good financial results throughout 2024. At the same time, we have flexible financing that facilitates further sustainable growth. The Board of Salmar therefore proposes a cash dividend of 22 NOK per share for the financial year 2024. This will, as usual, be subject to approval at our ordinary general meeting in June, with payment thereafter. The proposed dividend is in accordance with Salmar's current dividend policy and previous practice. The dividend is weighed against the necessary liquidity reserve to handle future obligations and sufficient access to capital to make our growth investments is in place. And with this, I've come to the end of the financial update and would like to hand the floor back to Frode.

Thank you for the review, Ulrik. In the previous quarterly presentation, I gave you an insight into how we systematically facilitate the salmon's terms at Salmar and the steps we take to strengthen the value chain to give our salmon the best opportunities to thrive, ensure good quality, and realize the harvesting volume potential in our licenses. The investments we plan for 2025 reflect this with the majority of investments in 2025 related to fish welfare. I will not repeat everything, but we do it because we see that the investments provide reduced number of treatments, reduced mortality, improved quality, reduced cost, and increased volume. In sum, this strengthens our performance in both biology and finance. We have many projects ongoing at Salmar and we are probably the only one with all production forms in operation along the coast of Norway. This gives us a lot of learning and new knowledge. Previously, When we have implemented preventive technology to avoid lice treatments, we have done so at individual locations. But in 2025, we are changing our mindset to have more zone focus. We will deploy production farms in entire areas to reduce the total lice pressure. We are investing in submerged technology in entire areas with locations adapted to this technology. We are doing the same with lasers, so the effect comes both at individual locations and as a top effect for a larger area. This will be exciting to follow. Good luck to everyone at our newly established laser centers. Towards the end of 2024, 20% of our locations have preventive technology. And through 2025, we will significantly increase this to 40% of our locations. Submerged, laser, closed, and semi-closed. This shows that Salmar is leading the industry with various tracks and facilitating that we continue to have the best biological results and thus also the best financial results. And for the group as a whole, we expect to invest 1.9 million NOCs in 2025. For Norway, we expect to invest 1.7 million NOC. Maintenance investments account for approximately NOC 0.7 billion or approximately NOC 3 per kilo. In addition, we are making capacity-increasing investments that will make us even more efficient. The three largest individual investments are investments in lasers, submerged facilities and upgrading harvesting and processing capacity. In Iceland, we will make investments mainly in the sea phase in 2025 to realise the potential in the licences, totalling NOK 130 million. For Salma-Iraq Erosion, the investments are related to upgrading of the net at Arctic offshore farming and maintenance investments, totaling 70 million NOK. Ann Salmar is a growth company, and it's always looking for good opportunities for profitable growth in the areas we operate in. Since the acquisition of NTS and NRS in 2022, we at Salmar have held a 37.5% stake in Vilskår AS. Vilskår currently has a strong presence on Senja, and is a company with which we have had a strong and good relationship for a long time. They have 5,854 tonnes MAB in production areas 10 and 11, which are in the core areas for Salmar and are among the best areas in the world for farming. In February, Salmar ASA and Vilsgård Sea Service AS, who together owns 75% of the shares in Vilsgård AS, have agreed to work together to further develop their ownership interests in Vilsgård. This includes a consolidation with Salmar. which means that Vilskoi will go from being an associated company in our balance sheet to being a consolidated company and will provide opportunities for further growth in close proximity to existing farming areas in Northern Norway. This ensures synergies and further development of existing activities. Salmair look forward to working even more closely with Vilskoi in the future. As we approach the end, we conclude today's presentation. The forward guidance has been reviewed, and you see it summarized on the right side of the slide. For 2025, we expect low global supply growth, but somewhat higher than previous years. As mentioned, we still see strong demand for our products in the market. At Solmoy, we are optimists. We have strong faith in this industry and still believe that we are just in the beginning of an industrial adventure that can help feed the growing world population. We will ensure that we do our part of the job so that we can utilize the strong platform we have at Salmar. I know that we have an organization that is passionate about the work they do and the salmon swimming in our cages. And every single day, they strive to ensure that our salmon have the best conditions for success. With this, we have come to the end of the presentation. Thank you very much for your attention. Our next presentation is in May, and I hope everyone has a nice winter break, and maybe take a trip to the Ski World Championship in Trondheim, where Salmar is an official partner for seafood and sustainability, and where salmon, of course, is on the menu every day in Granåsen Stadium. Welcome to the Ski World Championships and remember to eat a lot of salmon wherever you are in the world. Thank you very much.