#1ISI ICELAND SEAFOOD THE ICELAND SEAFOOD GROUP Q3 and 9M 2021 RESULTS Presentation to Investors and Analysts E ปี#2ISI ICELAND SEAFOOD Q3 2021 Results Presentation to Investors and Analysts We are Iceland Seafood#3ICELAND ISI SEAFOOD Q3 2021 Presentation to Investors and Analysts Iceland Seafood in numbers +370m € Annual revenues in 2020 Global value added Seafood producer and sales and marketing company 11 Businesses in 7 countries 曲 8 value added factories 3 5.1m Normalised PBT 2020 31.2% Equity ratio at year end 2020 5.000+ Customers across 45 countries 0.8m Meals sold every day during 2020 +865 employees 80.000 MT of products sold in 2020#4ISI ICELAND SEAFOOD Q3 2021 Presentation to Investors and Analysts External challenges continue to exist but big opportunities in the long run Demand in Iceland Seafood's key markets Investments going forward can be continues to be strong • Demand continues to be strong in our key • . • • markets. The challenge is to bring the products to the customers in a highly volatile operating environment with low visibility on various cost factors and availability, Disruption and price increases in various supply chains. are expected to continue for the coming months, especially in relation to transportation to and from Asia, which is especially impacting our UK operation, Local production in Europe becoming more competitive where automation and investments in production efficiencies will play a key role, All these factors have had and will have significant impact on the operating environment. Further price inflation is expected, The overall impact on Iceland Seafood operations is uncertain, different factors will both bring new opportunities and challenges, segmented in three main categories: • • The operation of Iceland Seafood is well balanced, the . company is in good position with its strong sourcing base and value-added operations close to key markets. Investments connected with sustainability matters. E.g. Solar Panels, waste management, water treatment etc. New head of ESG for the Group, Elma Sif Einarsdóttir, will start in January 2022. Investments connected with automation and operational efficiency. This is key in driving. efficiency, further enhancing consistency and increasing competitiveness, Marketing and branding investments, Iceland Seafood has invested in companies with retail or consumer brands (Carr&Sons, Ahumados Dominguez). The Group plans to further invest in the brands it holds and increase their value, With the combination of these investments Iceland Seafood will drive organic and acquired. growth going forward. Along with cross sales between units, this is key in increasing profitability in the future, This is in line with the Group's strategy of focusing mainly on value-added activities in Europe. 50 45 40 40 GROUP MONTHLY SALES YTD 2021 VS 2020 & 2019 (€'M) 43 45 42 44 39 38 42 37 36 36 35 35 37 35 37 34 36 33 33 35 30. 32 33 32 30 29 31 28 35 33 30 32 32 30 25 20 24 21 32 30 15 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2021 2020 2019 October 2021 achieved the highest sales number ever for Iceland Seafood €44.7m 4#5ISI ICELAND SEAFOOD Q3 2021 Presentation to Investors and Analysts AHUMADOS DOMINGUEZ MADOS DOMIN EZ LIMALINS ARMADO Ahumados Dominguez food market stand in San Miguel Foodcourt in Madrid Strong sales and demand in S-Europe and the completion of the acquisition of Ahumados Dominguez Continued good performance in S- Europe and groundwork laid for future growth • • . . • Continued good performance of IS-Iberica in a difficult market underlining Iceland Seafood's category leading position. Growth in both sales and margins, Acquisition of Ahumados Dominguez (AD) was concluded at end of September. The company becomes part of the Group with P/L effect from Q4, AD has a good consumer recognition as a premium brand. The acquisition will strengthen and broaden our proposition in retail and create cross selling opportunities between AD and IS-Iberica, This is part of our strategy to increase proximity to the end consumer and investments in consumer brands, Our investment in AD and extension of our current facility in Barcelona will generate growth opportunities in both the HORECA and retail sector due to increased product offering, more efficiency and increased automation within production. 5 Planned growth in Argentinian shrimp production . The Rawson season (Summer in-shore season) started last week (Nov-Mar). We are projecting a 25% increase in production compared to last season or up to 3.400MT of final product, The planned increase is the result of recent investments in production facilities, giving better control of the production process resulting in better yields and optimization of the final product, Market conditions remain good, prices have been stable supported by good demand from key markets in Europe and US. At the same time sales to China have been low and logistics been challenging, Overall, a positive outlook given the dynamic and challenging environment we are operating in.#6ICELAND ISI SEAFOOD Q3 2021 Presentation to Investors and Analysts Management team of IS UK being strengthened to address complex integration process and extreme external challenges Complex integration process of IS UK severally impacted by extreme external challenges • All UK operation moved into a single location at year end 2020. The merger process and integration has proven to be more costly and complex than anticipated, severally impacted by both Brexit and Covid19, The business continues to deal with external challenges, in terms of logistics and more recently difficult labour market in the UK. This has significantly impacted the business. performance this year, New agreements with both existing and new customers have been secured, which will significantly increase production volume and utilization of the facility, The new business is coming on stream both in Q4, and to a larger extent in Q1 2022, which should balance the business. • • Local management team of IS UK being strengthened to address business complexities and harvest upcoming growth • The UK management team is being strengthened with Reynir Jonsson, the Group CFO, stepping in as an interim Managing Director (MD), Danny Burton, former MD will concentrate on improving and expanding production capabilities, Glen Mathews, will join the business as Operating Director from end of February 2022. Glen will be a great addition to the business, he is the former Operating Director of Hilton (former Icelandic Seachill), with over 20 years experience within the sector, With strong customer base and new state of the art factory the future outlook and potential for the UK business remains strong. 6#7ISI Q3 2021 ICELAND SEAFOOD Presentation to Investors and Analysts B2B Branded products continue to grow as proportion of total sales - now 40%+ and growing Sales value of branded products first 10mth of 2021 B2C €18m €20.9m €12.2m €5.8m €122.5m €101.6m ICELANDIC SEAFOOD NOLANS Quality Seafoods AHUMADOS DOMINGUEZ seastar TOP Banord LIDER ISLANDIA ESTR 1946- CARR 00000 & SONS OF IRELAND Total Sales €140.5m Own Brands Iceland Seafood has historically had strong brands to differentiate on merits of quality, consistency and being able to deliver. That has resulted in higher margins and more sustainable business. Important part of the strategy to diversify from foodservice to retail is to own our consumer brands. elBa ARCTIC FISH Dunn's#8ISI ICELAND SEAFOOD Q3 and 9M 2021 RESULTS PRESENTATION TO INVESTORS AND ANALYSTS Financial performance#9ICELAND ISI SEAFOOD Q3 2021 Presentation to Investors and Analysts Unique combination of sourcing expertise and well positioned value added activities. Iceland Seafood Int'l management Sales & Distribution IS Iceland Value Added N-Europe IS UK Turnover 2020 Value Added S-Europe VA S-Europe 36% 34% VA N-Europe IS Ibérica Sales & Distribution IS France Oceanpath Elba IS Germany Dunns of Dublin 0 Ahumados Dominguez Profit before tax 2020 Carr & Sons Achernar VA S-Europe 24% Employees 34 (3,9%) 354 (40.9%) Executive management & Group reporting: 474 (54.8%) 3 (0.4%) 9 30% 49% VA N-Europe 27% Sales & Distribution#10ICELAND ISI SEAFOOD Q3 2021 Presentation to Investors and Analysts Excellent results driven by increased > VA S-Europe demand following easing of Covid19 restrictions in S-Europe € m's Q3 21 Q3 20 9M 21 9M 20 Sales 46.3 32.9 124.1 96.0 Net margin 6.8 2.8 16.8 9.6 Normalised EBITDA 4.3 0.9 9.0 2.9 Normalised PBT* 4.0 0.1 8.5 1.0 * Normalised PBT represents Profits before tax before allowing for significant items. ** Ecomsa classified as discontinued operation, therefore not included in numbers Sales picked up in S-Europe from March, after slow start of the year due to lockdown restrictions, > VA N-Europe > Sales & Distribution Sales in Q3 €13.4m up on Q3 Normalised PBT of €8.5m, 2020 up €7.5m from 9M 2020 €7.2m growth in net margin, continuing strong margins from Cod products, Improved efficiency in production of Arg. Shrimp with increased coldstore capacity have positively impacted margins in the period. Good market conditions and higher volumes have also helped the results, • • Significant revenue and profit improvement of Achernar, compared to same period last year, driven by both increased production and improved market conditions, Focus on sales growth into Spanish retail, where the acquisition of Ahumados Dominguez will be of a further support, Outlook for Q4 is positive, with continuing strong sales in October. Sale of Salmon is expected to be particularly strong in November/December. Overhead cost in line with expectations, annual cost reduction after the 2019 merger in excess of €1.3m, Vaccination is progressing well in S- Europe. Spain with 80% of the population fully vaccinated, Italy 72% and Portugal 87% on November 9th 10#118,0 7,5 70 7,0 6,5 6,0 5,5 5,0 4,5 45 40 4,0 ICELAND ISI SEAFOOD Q3 2021 Presentation to Investors and Analysts Results impacted by costly integration > VA S-Europe process in UK, affected by supply chain) Sales & Distribution disruptions € m's Q3 21 Q3 20 9M 21 9M 20 Sales 29.6 25.0 93.0 79.4 Net margin 1.9 2.3 7.1 8.4 Normalised EBITDA 0.1 0.8 1.7 3.8 Normalised PBT* (0.9) 0.1 (1.3) 1.9 *Normalised PBT represents Profits before tax before allowing for significant items. SALMON PRICES (€/KG) 2019 2020 2021 4,60 4,40 4,20 4,00 3,80 H&G COD FROZEN PRICES (US$/KG) 2019 2020 2021 17% sales growth compared to 9m 2020 • • Strong demand from Irish retail, sales of Oceanpath grew by 12% from 9M 2020 on top of €8.0m sales of Carr&Sons, The Irish operation was well prepared for Brexit. Our Irish companies are in better position to service local customers than suppliers in UK, Launching of new products for UK retail positively impacted sales, but supply chain disruptions both in relation to transport from China and local distribution in UK have caused significant challenges and increased costs, Foodservice sales in UK have improved in Q2 and Q3, with easing of Covid19 restrictions. > VA N-Europe Negative PBT of €0.9m in 9M 2021 • • All UK operation moved into a single location at year end 2020. It has taken longer time and been more costly than expected to stabilize and integrate the operation. UK operation further impacted by challenges due to disruption in the supply chain, both in relation to transportation from China and local distribution, New contracts have been secured with both existing and new customers, which will improve sales. and margins in the coming months, Profitability in Ireland has improved compared to same time last year driven by strong demand and relatively stable salmon price, 3,60 3,40 Jan Feb March April May June July Agu Sept Okt Nov Dec Jan Source: SeaData Center Feb March April May June July Agu Sept Okt Nov Dec Source: Norges Sjomatrad 11#1216 14 14 12 10 10 8 6 ISI ICELAND SEAFOOD Q3 2021 Presentation to Investors and Analysts Excellent sales and improved profitability on prior year € m's Q3 21 Q3 20 9M 21 9M 20 Sales 39.5 40.3 116.0 109.3 Net margin 1.8 1.6 5.3 4.6 Normalised EBITDA 0.6 0.5 1.9 1.1 Normalised PBT* 0.6 0.4 1.7 0.9 * Normalised PBT represents Profits before tax before allowing for significant items. FRESH FILLETS (€/KG) FROZEN AT SEA FILLETS (€/KG) Saithe 12,2 12 Haddock Cod 11,7 11,3 10,5 10,5 10,6 10,1 10,3 9,9 10 9,5 9,3 5,2 5,5 4 4,7 Saihte Haddock Cod 9 12,7 11,4 8 7,7 12,8 7,4 7,2 7,3 7,2 7 LO 18,3 12,4 12,4 6,5 7,2 6,8 7,2 6,1 7 6,4 6,3 6. 6,1 6,5 6,5 6,3 5,5 5,3 5,3 5 5,9 5,9 4 5,9 5,5 5,1 5,2 5,7 4,9 5,3 33 8,9 8,7 Excellent sales in all product categories out of Iceland 9 3,8 3,1 3,1 3,7 2,8 3 3 2,8 2,7 2,7 2,7 2,9 2,9 3 2 2 Oct Nov Dec Jan Feb March April May June July Aug Sept Sept Oct Nov Dec Jan Feb March April May June July Aug Sept Sales in the period 6% higher than 9M 2020. Sales helped by easing of restrictions in key markets in the period, Excellent sales in all product categories out of Iceland, such as fresh fish into Continental Europe and seafrozen products into UK, Pelagic sales from the 2021 fishing seasons have also been strong, Supply chain disruptions, especially related to transportation to and from Asia, have positively impacted demand for Icelandic products in the period both in Europe and the US, Successful cooperation between the Icelandic entity and Oceanpath, where fresh fish from Iceland is becoming more competitive compared to UK origin post Brexit. > VA S-Europe > VA N-Europe > Sales & Distribution Improved profitability on prior year • • • Net margin up €0.7m on last year, driven by higher sales, Good results from fresh fish operation in Germany and France. Results in France further supported by good sales of Argentinian shrimp, Operation in the USA being simplified. and risk reduced, with closing of sales office and signing of an agreement with Villa Seafood. Market served directly from Iceland, Overall Normalised PBT of €1.7m up €0.8m. Source: Navision 12#13ICELAND ISI SEAFOOD Q3 2021 Presentation to Investors and Analysts € m's Strong sales and margins in S-Europe key driver for growth in profits Q3 21 Q3 20 9M 21 9M 20 Sales 111.3 95.7 319.6 276.2 Net margin 10.5 6.6 29.2 22.6 Normalised EBITDA 5.0 2.0 12.3 7.7 Normalised PBT* 3.4 0.4 8.2 3.0 Net Profit 2.1 (0.4) 5.6 1.0 * Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations. Group sales 16% up on 9M 2020 • Excellent sales growth from March onwards, after slow start of the year, Sales in VA S-Europe 29% up on 9M 2020. Strong sales and margins from both Icelandic Cod products and Argentinian shrimp, Significant Sales growth in Ireland. The Irish operation well prepared for Brexit in the beginning of the year, In the UK complex and costly integration affected by supply chain disruption, continue to cause challenges for UK operations, leading to negative results in the period, • Good sales of all product • categories out of Iceland, Continuing focus on balance between retail and foodservice sales. Iceland Seafood Int'l Normalised PBT up €5.2m on 9M 2020 Net margin €6.6m up on 9M 2020, driven by strong margins in S-Europe division, Overhead costs €2.0m higher than 9M 2020, mainly due to costs associated with the UK merger and the addition of Carr&Sons, Total FX benefit of €0.4m in the 9M 2021, including €0.4m benefit from capital injection to Achernar, to finance recent investments, Normalised PBT in 9M 2021 of €8.2m is up €5.2m on last year. Q3 2021 results of €3.4m up €3.0m on last year, After considering cost of significant items (€0.5) and income tax (€2.1m), net profit in 9M 2021 of €5.6m was up €4.6m on same period last year, Good outlook for the important Christmas season. Rawson season in Argentina just starting. 13#14ICELAND ISI SEAFOOD Q3 2021 Presentation to Investors and Analysts Significant reduction in Inventory during Q3. Balance sheet at end of September includes impacts of the acquisition of AD € m's Fixed assets Leased assets Intangible assets 30.9.2021 31.12.2020 Variance € m's 30.9.2021 31.12.2020 Variance 30.7 24.6 6.1 Total Equity 88.7 75.3 13.4 2.1 1.7 0.4 Thereof minority interest 2.3 0.1 2.2 62.6 52.7 9.9 Long term borrowings 36.9 22.8 14.1 Deferred tax/other 3.6 3.1 0.5 Lease liabilities 1.6 1.4 0.2 Non-Current Assets 99.0 82.1 16.9 Obligations/Deferred tax 2.9 2.5 0.4 Inventory 73.2 80.9 (7.7) Non-Current Liabilities 41.3 26.7 14.6 Trade and other receivables 65.7 48.8 17.0 Short term borrowings 84.8 89.0 (4.2) Other assets 7.1 6.4 0.7 Trade and other payables 39.1 39.3 (0.2) Bank deposits 18.9 23.3 (4.4) Other current liabilities 10.1 11.2 (1.1) Current Assets 164.9 159.3 5.6 Current liabilities 134.0 139.5 (5.5) 263.9 241.5 22.4 Total Equity and Liabilities. 263.9 241.5 22.4 Total Assets On the 27 September 2021, Iceland Seafood acquired 85% of the share capital of Ahumados Dominguez (AD) in Spain. Acquisition price was €12.4m, resulting in provisional goodwill of €10m, At end of September, 84% of Group receivables are insured, AD receivables are still not insured. (Without AD the ratio is 87%) Net debt at end of September was Inventories are €7.7m lower than at year €102.8m which is €14.3m higher than at beginning, partly as a result of increased sales. Inventory has decreased by €9.9m during Q3, thereof by €9.1m in IS-Iberica, Trade receivables €17.0m higher than at beginning of the year, reflecting increased sales. the beginning of the year primarily due to acquisition of AD, Cash position is still strong, particularly in IS-Iberica, 14 Private placement of ISK3.4bn (€23.1m) 4 years unsecured bond completed in June. The issuance marks a milestone for the Icelandic Capital Market. The bond is listed on Nasdaq Iceland, Two offerings of 6 months bills for ISK1.5bn each completed in the 9M Total equity of €88.7m at end of September, has increased by €13.4m from year beginning, resulting in equity ratio of 33.6% compared to 31.7% at end of Q2. Issuance of new shares in relation to the acquisition of AD was 1,5% of outstanding 2021. Total fixed amount of bills at end of number of shares. Total proceeds was September amounts to €20.9m, Group funding headroom (including bank deposits) is around €54m at end of September, €4,5m.#15ICELAND ISI SEAFOOD Q3 2021 RESULTS PRESENTATION TO INVESTORS AND ANALYSTS Outlook#16ICELAND ISI SEAFOOD Q3 2021 Presentation to Investors and Analysts . Outlook range unchanged. UK continues to make losses, but offset by stronger operating income in other divisions Strong performance of VA S-Europe, with positive market conditions for both Icelandic light salted cod and Argentinian Shrimp, Costs of integrating and stabilizing operations in UK still impacting results negatively in Q3. Actions have been taken to pass on increased costs, at the same time new agreements have been secured with both current and new customers, Covid19 restrictions have been eased in key markets which has helped sales to foodservice and HORECA customers. The sector has however not fully recovered, Based on the assumption that Covid19 related factors will not further impact the Group negatively in key markets, the Outlook range for 2021 Normalised PBT is kept at €12.0 - 16.0m, The level of uncertainty remains high, both in relation to Covid19 development and other key external factors. Disruptions on supply chains will continue to impact transportation and logistic costs, December is a key sales month for salmon in Ireland and Spain, as well as key harvesting period in Argentina, In addition to the Covid19 uncertainty, Group results are influenced by various other external factors such as: • • Fishing and quota changes as well as price development and ability to pass on price changes in the value chain, Changes in underlying global economic conditions, currency rates, import duty rates, access and cost of labour, competition and consumer behaviours, Political uncertainty, for example in Argentina and UK (related to tariffs), 2,9 1,7 1,3 1,0 Full year 16,0 Normalised PBT* (m's) 3,5 3,3 7,4 11,3 12,0 5,1 Major marketing campaign to promote Ahumados Dominguez brand will be conducted in December, Based on Outlook, the Group will reach a run rate of annual Normalised PBT in excess of €20m post the pandemic. 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 With recent investments and projects that will increase efficiency and drive profit growth, the Group is in strong position to reach it's target of Normalised PBT in excess of €20m post the pandemic. 16#17ICELAND ISI SEAFOOD Q3 2021 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#18ISI ICELAND SEAFOOD WE ARE ICELAND SEAFOOD www.icelandseafood.com 1897