#1ISI SEAFOOD ICELAND Q3 2020 Results Presentation to Investors and Analysts#2ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts We are Iceland Seafood#3Iceland Seafood International is proud of its strong heritage and history and continues to build on that foundation, to become a respected industry leader The Union of Icelandic Fish Producers (SIF) Founded in 1932 for export of salted fish products The Herring Board Founded in 1935 for the export of salted herring from Iceland Samband of Iceland Samband of Iceland establishes a seafood division for export of frozen seafood armengol sa Armengol Spanish company Purchased in 1999 SIE Merger: SÍF and Iceland Seafood Plc. Including the Herring Board, under the name SIF Plc. ISI SEAFOOD SÍF Plc founds Iceland Seafood International in order to take over all export and sales of marine products TROS Tros The first company in exporting fresh fish from Iceland became a part of Iceland Seafood ICELAND ISI SEAFOOD BARRACLOUGH IS Barraclough Acquired in 2010 and marks the beginning of value added operations in the UK 1932 2012 1935 1957 1999 1999 2016 2018 2018 2019 2004 2008 2020 2020 2010 2020 HAVELOK Havelok Limited Founded as a joint venture, Havelok today is a leading seafood supplier to UK foodservice First North listing Iceland Seafood listed on the First North Iceland market OCEANPATH QUALITY SEAFOOD Oceanpath Purchased in 2018, Oceanpath is the largest seafood provider in the Irish retail market ICELANDIC SEAFOOD Solo Seafood Purchased in 2018, creating a strong integrated company in the Southern European market Nasdaq Main Market listing Iceland Seafood International lists its shares on the Nasdaq Iceland Main Market elBa Elba Seafood Purchased in 2020, Elba is a great addition to well positioned S-European operation ISI ICELAND SEAFOOD UK Iceland Seafood UK Merge of the two Iceland Seafood's UK based companies Havelok Ltd and Iceland Seafood Barraclough in one -ESTE 1946- CARR & SONS OF IRELAND Carr & Sons Acquisition of Carr & Sons Seafood Ltd, an Irish seafood processing company specialized in high quality smoked salmon production#4ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Global value added Seafood producer and sales and marketing company Iceland Seafood in numbers +448m € Annual revenues in 2019 11.3m Normalised PBT 2019, up from €10.8 proforma in 2018 38.3% Equity ratio 38.3% at year end 2019 up from 30.6% in 2018 11 Businesses in 8 countries 3000+ Customers across 45 countries 、 1.1m Meals sold every day 7 value added factories 4 +700 employees 100.000 MT of products sold annually#5aste ICELAND ISI SEAFOOD Q3 2020 Results Presentation to Investors and Analysts CARR & SONS CARR & SONS WHITE WINE COOKED IRISH MUSSELS CARR taste FIRELAND .D IRISH IRISH SALMON SONS CARF & SONS OF IRELAN IRISH WHISK SMOKED SALMON Footprint in Ireland significantly expanded with the acquisition of Carr & Sons Production of IS UK in one location from mid December From beginning of November all production that took place in Bradford has been moved to the new facility in Grimsby. Sale of property in Bradford completed, Production of the former Havelok being moved into the new facility in December, Launching of new production for Aldi taking place in December. Will start to generate benefits from Q1 2021, The process of moving the operation into one place under a single management team has turned out to be more complex and costly than anticipated, Covid19 has caused various issues in relation to the transition, with regards to coldstore space, transportation and delivery delays of equipment, Considerable cost synergies being created on top of a significant sales growth into retail. Benefits will start to come through from 1H 2021. Call option exercised to Acquistion of Carr&Sons own Oceanpath in full completed • • • • The 33% minority share acquired from the Ecock family. Ken and Trevor Ecock will continue to lead the Irish business going forward. The consideration for the shares is €9.0m with 40% of the consideration paid with shares in Iceland Seafood and 60% with cash, The Ecock family continues to be invested in the company through their shareholding Uncertain Brexit impacts for both UK and Ireland • UK operation not dependant on trading with EU, but Brexit is likely to create issues in logistics, regardless of the outcome, Scotland is the most important sourcing area for Oceanpath, Brexit will create additional costs but uncertainty to what extend. • • . • • A company producing from 1000MT of raw material predominantly salmon for Irish retail. Generated PBT of €0.9m in 2019, Will significantly expand Iceland Seafood's footprint in the Irish seafood market for retail, Stronger brand recognition with access to the market leading Nolan Quality Seafood brand, Significant synergy opportunities in sourcing, processing and logistics. These will start to come through from 2021. The Group will be a market leader in smoked and fresh seafood production for the retail market in Ireland Overview Mr. Ken Ecock Super Value Ad 5#6ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Increasing production efficiency a key focus point after having completed the sale of Ecomsa Sale of the Malaga based distribution company Ecomsa to Aquamar Gold SL • The sale is a direct consequence of Iceland Seafood moving all its productions in Spain to its Barcelona factory After moving the Malaga production to Barcelona, Ecomsa became a focused distribution company selling directly to hotels and restaurants, which is outside the core strategy of IS Iberica, The 100% shareholding in Ecomsa is sold for €346k, which is in line with book value of equity in Iceland Seafood accounts at end of October, The continuing task of improving production efficiency in the Barcelona factory will get even greater focus after the sale. The strong position of IS Iberica evident in the current situation • • Strong sales recovery during Q3 is a clear sign of IS Iberica strength in the S-European market. The core business in Spain generated profits of €0.6m in Q3. Significant synergies have been created with the merger and reduction in overhead, although disruptions due to Covid19, such as higher stock and lower production, have had delaying effect, Stronger focus to leverage the economies of scale the merged entity has. Future layout of production in Barcelona being developed, maximising efficiency and minimising production cost. Good outlook for the recently started Rawson season in Argentina Coldstore with capacity of 800MT up and running from end of November. This will increase flexibility, improve margins and save costs both for shrimp and squid, Investments in production facility in the last 12 months will both increase capacity and improve efficiency, Raw material prices for shrimp have come down, at the same time market prices have recovered, Covid19 impact has been. significant, both in terms of late delivery of equipment and delayed construction of the coldstore. Has also increased operating and production cost. 6#7ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Q3 2020 Results Financial performance#8ICELAND ISI SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Sales & Distribution IS Iceland Unique combination of sourcing expertise and well positioned value added activities Iceland Seafood International Executive management Value Added N-Europe Turnover 2019 Value Added S-Europe VA S-Europe 38% 40% VA N-Europe IS Barraclough IS Ibérica IS France IS UK IS Germany IS USA Oceanpath Dunn's of Dublin Carr & Sons Employees 34 (5%) >> New incorporation << 241 (38%) 0 Elba Ecomsa >> On the way out << Achernar 354 (56%) 3 (0.5%) Executive management & Group reporting: 8 Sales & Distribution Profit before tax 2019 VA S-Europe 22% 15% VA N-Europe 53% 32% Sales & Distribution 8#9ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Q3 results marked by Covid19 impacts. Sales started to recover from June € m's Q3 20 Q3 19 9M 20 9M 19 Sales 33.3 33.8 96.0 124.2 Net margin 2.8 4.0 9.6 13.9 Normalised EBITDA 0.9 1.8 2.9 6.5 Normalised PBT* 0.1 1.1 1.0 5.1 * Normalised PBT represents Profits before tax before allowing for significant items. ** Ecomsa classified as discontinued operation, therefore not included in numbers seastar gambon gambero surgelato ultracongelado gambão argentino ultracongelar crevette Peso neto Peso netto Poids net 净重 Peso líquido Καθαρό βάρος Net weight 2kge ☆ seastar argentino surgelée A 阿根廷红虾 Argentine 深度冷冻 red shrimp deep-frozen gambón ultracongelado gambero gambão argentino surgelato argentino ultracongelado crevette surgelée Argentine Táuwapn 阿根廷红虾 red shrimp Αργεντινής ΒΑΘΙΑΣ ΚΑΤΑΨΥΞΗΣ 深度冷冻 deep-frozen • • • 9M 2020 sales down 23% on prior year Sales improved during Q3 after a significant reduction during lockdown from Mid March to May, Increased sales of Argentinian shrimp, driven by higher production and strong sales to customers in Italy helped sales in the quarter, Sales of light salted cod improved as well, but are still 33% down on prior year during the 9M period, Covid19 restrictions implemented in S-Europe have impacted sales negatively, especially since mid October. Not to the same level as in March/April. > VA S-Europe > VA N-Europe > Sales & Distribution 9M 2020 Normalised PBT of €1.0m Weaker sales especially in Q2 is the key explanation for reduction in profits. for 9M 2020 compared to prior year, Price reductions and increased complexity of supply chains have negatively impacted margins in the period, especially with regards to Argentinian Shrimp and other shellfish species, Margin percentage of cod products have remained strong, although they have come down slightly from 2019 levels, Restructuring of Ecomsa completed in the quarter and sale of the company finalized in November. 9#108,0 7,5 7,0 6,5 6,0 5,5 5,0 4,5 4,0 40 ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Results in Q3 impacted by supply chain disruptions due to Covid19 > VA S-Europe > VA N-Europe > Sales & Distribution Sales growing by 13% Normalised PBT down from prior year €0.7m from 9M 2019 € m's Q3 20 Q3 19 9M 20 9M 19 Sales 25.0 21.6 79.4 69.8 Net margin 2.3 3.0 8.4 8.4 Normalised EBITDA 0.8 1.5 3.8 3.8 • Normalised PBT* 0.1 1.0 1.9 2.6 * Normalised PBT represents Profits before tax before allowing for significant items. SALMON PRICES (€/KG) 2019 2020 • H&G COD FROZEN PRICES (NOK/KG) 44 42 40 38 36 34 32 30 Jan Feb March April May June July Agu Sept Okt Nov Dec Jan Source: SeaData Center Source: Norges Sjomatrad 2018 2019 2020 Feb March April May June July Agu Sept Okt Nov Sales growth driven by higher sales into retail, both in Ireland and UK. Sales into UK foodservice improved. in Q3 following easing of Covid19 restrictions in UK, but were still 40% down on Q3 2019, Q4 is a key sales period especially in Ireland where smoked salmon is a big Christmas item, Dec • • • • . Supply chain disruptions due to Covid19 having significant impact on margins in UK. Cost related to implementation of Covid19 contingency plans negatively impacted margins and operating costs in the period, Merging the two UK entities in a single location to be completed in Q4. The process has turned out to be more costly than anticipated, Good results from the operation in Ireland, driven by strong sales growth of Irish retail, Interest cost €0.4m higher than last year, driven by sales growth and investment in UK. 10#11ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Good results in Q3 driven by cost reductions > VA S-Europe > VA N-Europe > Sales & Distribution € m's Q3 20 Q3 19 9M20 9M 19 Sales 40.3 44.2 109.3 146.5 Net margin 1.6 1.7 4.6 5.9 Normalised EBITDA 0.5 0.4 1.1 1.6 Normalised PBT* 0.4 0.3 0.9 1.3 * Normalised PBT represents Profits before tax before allowing for significant items. FRESH FILLETS (€/KG) Saithe Haddock Cod 9 FROZEN AT SEA FILLETS (€/KG) Saithe 8,8 Haddock Cod Around 25% reduction in sales compared to 9M 2019 After difficult Q2, sales gradually recovered in Q3 with easing of restrictions in key markets, Sales of fresh fish remained strong in the quarter, and pelagic sales were 4% up on last year driven by good mackerel sales, Outlook for Q4 2020 remains uncertain, with ongoing challenges in key markets. Normalised PBT in Q3 €0.1m up on last year driven by cost reductions Net margin €1.3m below 9M 2019, due to lower sales. Net margin in the quarter only €0.1m down on last year with normalized PBT higher due to reduced cost. Various actions were taken to reduce overhead cost in all regions. Depreciation of ISK has supported reduced cost in EUR, as operating costs in Iceland are in ISK, Overall reduction in overhead costs of €0.8m compared to 9M 2019 16 13,5 12,4 14 12,9 12,9 8 12 11,6 12,4 11 7,1 6,9 12 10,6 10,3 7 12,7 11,7 7,4 6,7 6,5 6,4 6,3 5,5 55 12,3 7,1 10 12,4 10,2 5,6 6 11,2 11,5 6,6 6,6 8 9,7 10,4 - 6 6 10,2 5 5 4,7 6 6,3 5,5 4,1 4,1 5,2 5,3 6 4,6 4,7 4,1 4 3,5 3,5 6,2 6,2 4,7 2,9 2,8 2,8 4 5,7 5,5 3 3,5 3,4 3,3 2 2 Jan Feb March April May June July Aug Sept Oct Jan Feb March April May June July Aug Sept Oct 11#12ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Overall sales in Q3 only marginally down on same period last year € m's Q3 20 Q3 19 9M 20 9M 19 Sales 95.7 96.0 276.2 321.6 Net margin 7.3 8.7 22.6 28.3 Normalised EBITDA 2.0 4.3 7.7 12.2 Normalised PBT* 0.4 2.1 3.0 7.7 • Net Profit (0.4) 1.0 1.0 4.3 * Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations. Overall sales in Q3 only marginally down on last year • • After significant reduction in sales during Q2, sales recovered gradually during the summer, Sales in the 9M period still 14% down on prior year, Strong sales in retail during the whole period. Sales into S- European HORECA sector only slightly down on prior year in Q3, Stricter Covid19 restrictions implemented in key markets in Q4 are impacting sales, but not to the same extend as during the first waive, Forthcoming growth in Irish and UK retail sales will create a better balance between retail and foodservice within the Group. Iceland Seafood Group Normalised PBT down €4.7m on prior year Margins impacted by price reductions, especially in S- Europe, Covid19 causing supply chain disruptions and increased costs in our production units, which is further impacting margins and profit, Overhead cost in the 9M 2020 period €1.3m lower than last year, driven by cost synergies in Spain, depreciation of ISK and various actions taken to reduce costs in all regions, Ecomsa classified as discontinued, €0.5m net cost in the 9M period. Net profit €3.3m down on last year. 12#13ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Total assets down €8m from end of June, driven by reduction in inventory € m's Fixed assets Leased assets Intangible assets 30.9.2020 31.12.2019 Variance € m's 30.9.2020 31.12.2019 Variance 21.6 17.6 4.0 Total Equity 82.4 80.2 2.2 1.7 2.7 (1.0) Thereof minority interest. 4.2 3.8 0.4 48.3 44.7 3.6 Long term borrowings 22.4 8.0 14.4 Deferred tax/other 3.1 3.1 0.0 Lease liabilities 1.4 2.1 (0.7) Non Current Assets 74.7 68.1 6.6 Obligations/Deferred tax 1.7 2.1 (0.4) Inventory 78.2 65.1 13.1 Non Current Liabilities 25.5 12.2 13.3 Trade and other receivables 51.4 62.3 (10.9) Short term borrowings 76.9 67.2 9.7 Other assets 5.9 4.4 1.5 Trade and other payables 35.1 42.2 (7.1) Bank deposits and cash 14.1 9.6 4.5 Other current liabilities 5.8 7.7 (1.9) Current Assets 149.7 141.4 8.2 Current liabilities 117.8 117.1 0.7 Assets classified as held for sale Total Assets 5.2 5.2 Liabilities assets held for sale 3.9 3.9 229.6 209.5 20.1 Total Equity and Liabilities. 229.6 209.5 20.1 Stock level in S-Europe division has reduced by €15.2m during Q3 with higher sales. At the same time inventories in N-Europe division increased by €7.5m driven by new retail sales in UK and build up of Christmas stock in Ireland. Following the decission to sell Ecomsa its assets are classified as held for sale at 30.9.2020. Net debt at end of September of €85.2m were €19.6m higher than at year beginning, driven by higher stock levels, investments in UK and acquisition of Elba. Equity ratio of 36% compared to 38% at year beginning. New funding of €8.9m raised with Tightening of risk management auction of 6-month bills in Iceland at end of September. Group funding headroom (including cash) of €42m at end of September. controls, especially around receivables and inventories. Receivables contract in line with lower revenues. Around 82% of receivables credit insured at end of September. Inventories consist of frozen and salted products with long shelf life. 13#14ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Q3 2020 Results Outlook#15ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Increased uncertainty due to negative Covid19 development in key markets • After significant reduction in sales during Q2, sales recovered strongly during Q3, The restrictions that have been put in place in key markets to control current Covid19 wave are severally impacting sales, especially in S-Europe, As the recent restrictions are not as strict as these implemented in March-May, the impact on sales is not of the same level, Increased costs due to higher inventory levels, disruption in supply chains and various contingency plans, Price developments have impact margins negatively and are expected to continue to do so in Q4, Strong retail sales have helped managing the situation. Improved balance between retail and foodservice being created recent investments in VA N-Europe division, Previous Outlook range withdrawn due to ongoing uncertainty. Trading update to be published in December The last two months of the year an important trading period in key businesses December is a key sales period for smoked salmon in Ireland. This period becomes even more important with the acquisition of Carr & Sons, Outlook for Ireland is good, as retail consumption has increased considerably due to Covid19 restrictions, Rawson season in Argentina started in November this year. Sales of significant part of the planned production in Q4 has already been contracted with customers, Shellfish consumption in UK and saltfish. consumption in S-Europe also high during Christmas and should positively impact sales, 50,0 45,0 GROUP MONTHLY SALES 2020 VS. 2019 (€'M) 43,0 39,5 2020 2019 44,3 40,0 38,3 37,2 36,8 32,4 33,8 32,1 30,1 35,6 34,5 32,8 29,2 35,0 36,6 30,0 25,0 20,0 Jan Feb Mar 21,1 23,2 Apr 29,8 32,4 28,8 May Jun Jul Aug 35,8 32,5 Sep Oct Nov Dec * Group sales on a like for like basis, excluding Elba and Ecomsa Number of factors that will positively drive profits in Q4 (especially Ireland with 100% retail focus and Argentina where shrimps are in good demand), at the same time as impacts of Covid19 restrictions are evident. Although positive profits are expected in the quarter, the previously announced profit outlook range for 2020 is withdrawn due to the high uncertainty. A trading update will be published in December when more clarity is obtained.#16ISI ICELAND SEAFOOD Q3 2020 Results Presentation to Investors and Analysts Forward Looking Statements Disclaimer This presentation is furnished and intended for European market participants and should be viewed in that manner. Any potential forward looking statements contained in this presentation are reflective of managements current views on future events and performance, whilst the views are based on positions that management believes are reasonable there is no assurances that these events and views will be achieved. Forward looking views naturally involve uncertainties and risk and consequently actual results may differ to the statements or views expressed. 17#17ICELAND ISI SEAFOOD www.icelandseafood.com We are Iceland Seafood