#1ISI SEAFOOD ICELAND Q2 2020 Results Presentation to Investors and Analysts#2ICELAND ISI SEAFOOD Q2 2020 Results Presentation to Investors and Analysts We are Iceland Seafood#3ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Iceland 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 SIF 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 1932 1957 1999 1999 2004 2008 2012 HAVELOK Limited Havelok Founded as a joint venture, Havelok today is a leading seafood supplier to UK foodservice 2016 First North listing Iceland Seafood listed on the First North Iceland market 2018 2018 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 2019 Nasdaq Main Market listing Iceland Seafood International lists its shares on the Nasdaq Iceland Main Market 2020 Elba Seafood Purchased in 2020, Elba is a great addition to well positioned S- European operation 2020 ISI ICELAND SEAFOOD UK Iceland Seafood UK Merge of the two Iceland Seafood's UK based companies Havelok Ltd and Iceland Seafood Barraclough Ltd. in one 3 2010#4ISI ICELAND SEAFOOD Q2 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 12 Businesses in 8 countries 3000+ Customers across 45 countries X 1.1m Meals sold every day 7 value added factories 4 +630 employees 100.000 MT of products sold annually#5ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Sales growth in excess of GBP 18m secured to UK retail. Better balance beeing created between Group retail and foodservice sales . Merger Project in UK on track despite external challenges Coldstore with 2.000MT capacity up and running from June 2020, generating annual savings of €0.5m based on current volume, Refurbishment of production facility on track, with production starting in Q4 2020, Production being moved from Bradford to Grimsby in Q4 2020. Sale of property in Bradford expected to be concluded in Q4 2020, Merger under the name of Iceland Seafood UK completed during this year, under one leadership team and in a single location, Considerable cost synergies being created on top of a significant sales growth into retail. • New listings of GBP18m sales per annum secured with UK retail customers Commercial agreements with key UK retail customers resulting in expected revenue growth in excess of GBP 18m for 2021. Product range will reflect current offerings on a larger scale Will create a significant player, servicing UK retail, with strong buying, production and marketing power, Improved balance between retail and foodservice. Expected that c.a. 50% of Group future profit generation will come from retail compared to c.a. 33% in 2019. • LOI signed to acquire Carrs & Sons in Ireland • A company producing from 1000MT of raw material predominantly salmon for Irish retail. Generated PBT of €0.9m in 2019, Opportunity to further strengthen Iceland Seafood's position when comes to servicing Irish retail customers, Would improve brand recognition with accessing the Nolan Seafood brand, Significant synergy opportunities when comes to processing, sourcing and logistics, Positive impact from synergy creation and revenue growth estimated to come through from 2021. MEALS 5#6ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts OMOS 100 DE BACALAO DE ISLANDIA SOLO BACALAO Y SAL ISLANDIA LOMOS 300+ DE BACALAO DE ISLANDIA ULTRACONGELADOS-AL PUNTO DE SAL-SIN ESPINAS-PRIMERA CONGELACION 2010--was SAGOUR COMMONTO DE SAL-Sonotago me BACALAO DE ISLANDIA GAMA PROFESIONAL ALTA COCINA VENTRESCAS DE BACALAO DE ISLANDIA 52 VENTRESCAS DE BACA BACALAO DE ISLANDIA 2ke ESPINAS PRIMERA CONGELACIÓN ISLANDIA LOMOS 2000 DE BACALAO DE ISLANDIA SIN ILADOS AL PUNTO DE SALE OLACA ULTRACONSTANTINORA 0 . . IS Iberica in strong position to manage operation through the Covid19 situation Benefits of merger in Spain evident during Covid19 pandemic All production of IS Iberica in a single location from February 2020, Optimisation of distribution and logistics on track, Ecomsa in Malaga focused on local distribution in Andalusia after restructuring in Q1, Headcount of IS Iberica (excluding production staff) reduced by 17 from March 2019 or by 20%, The merged entity in a good position to manage operation through the Covid19 situation and create value post pandemic, Significant cost synergies have been created, but disruption due to Covid19, such as higher stock and lower production, have had delaying effect. • • • Significant steps taken to integrate Elba operation with IS Iberica Joint management team with IS Iberica management taking over operational and financial management, Purchasing, sales and logistics being integrated with IS Iberica operation. Production capabilities of Elba effectively managed during period of Covid19, Further opportunities being actioned to leverage production and marketing capabilities in the near future. Investment in increased efficiency of Achernar being completed Investment in increased capacity finalized before year end 2019. Coldstore capacity of 800MT up and running in Q3 2020. This will improve margins and reduce costs both for shrimp and squid, Price reduction of Argentinian shrimp has had significant impact on margins in 1H 2020 JV project of squid went well with three landings in 1H 2020, which generated good margins, Outlook for coming Rawson season, starting in Q4 is good. Raw material prices for shrimp have come down and benefits from the investment will reduce costs and improve efficiency. 60#7ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Covid19 causing a temporary shift in seafood consumption from foodservice to retail VA S-Europe VA N-Europe Sales & Distribution • • Lion's share of sales to the HORECA sector which was significantly impacted by restrictions implemented in March to May, Strong recovery with easing of restrictions in June, both in Italy and Spain. July sales 96% of sales same time last year and August sales close to par with prior year, Margins from stock purchased prior to the pandemic affected by price reduction. This especially applied to Argentinean shrimp and other shellfish species, Outlook remains uncertain, but gradual recovery and current trend give positive sign. • Over 80% of the divisional sales is to the retail sector, which saw a significant growth during the pandemic. 20% of sales are to the foodservice sector which reduced considerably in the period, Production for retail up and running during restrictions with food production defined as essential. Reduction in raw material prices have helped the divisional profitability, • • Foodservice sales in UK recovering with schools starting and canteens and cafe's opening, Strong outlook for 2H of the year, with new listings into UK retail starting and foodservice sales recovering. • • • • After significant reduction in sales during April and May, the division has seen a strong recovery in the last three months, Fresh fish sales to continental Europe and US have remained strong during the period, Frozen at Sea sales declined significantly in April and May with restrictions implemented in key markets such as UK, Divisional profits helped by 14% devaluation of ISK against EUR from year beginning to end of June, Outlook for 2H of the year relatively strong, with new quota year starting in Iceland and Q4 being a key sales period for Groundfish and Pelagic. 7#8ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Q2 2020 Results Financial performance#9ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts 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 Sales & Distribution IS Iceland IS France Havelok Elba IS Germany Oceanpath 0 Ecomsa Dunn's of Dublin 0 Achernar IS USA Employees 34 (5%) 241 (38%) Executive management & Group reporting: 354 (56%) 3 (0.5%) 0 9 Sales & Distribution Profit before tax 2019 VA S-Europe 22% 15% 53% VA N-Europe 32% Sales & Distribution#10ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Q2 results marked by Covid19 impacts. Sales started to recover from June € m's Q2 20 Q2 19 1H 20 1H 19 Sales 22.4 47.0 65.4 97.0 Net margin 1.8 4.9 7.0 10.8 Normalised EBITDA (0.6) 2.0 1.8 4.9 Normalised PBT* (1.4) 1.6 0.3 3.8 * Normalised PBT represents Profits before tax before allowing for significant items. 7 SALES PRICE ARGENTINIAN SHRIMP (€/KG) 2019 2020 6,4 6,4 6,4 6,3 6,3 6,5 6,8 6 5,5 5 4,5 5,92 5,28 5,13 5,14 5,02 5,56 =2 6,2 6 5,43 5,67 4 Jan Feb March April May June July August 1H 2020 sales down 33% on prior year • • . Significant reduction in sales from Mid March due to lockdown restrictions, which heavily impacted the HORECA sector, Lent season and Easters normally an important sales period, Good sales growth to customers within retail and strong fishing of squid in Argentina helped in the difficult situation, Sales started to recover with easing of restrictions in June. IS Iberica sales in July only 15% down on sales same time last year and sales in August are recovering as well, Although Outlook for the 2H of the year remains uncertain, current sales trend is a positive sign. > VA S-Europe > VA N-Europe > Sales & Distribution 1H Normalised PBT of €0.3m Weaker sales a key explanation for reduction in profits during 1H 2020 and loss in Q2, Production of Argentinian shrimp during 1H 2020 increased by over 40% from prior year. Margin were negatively impacted by price reduction, In addition to weaker sales, Covid19 has negatively impacted margins in the period with declining seafood prices and increased complexity of supply chains, Cost synergies from the merger delivering a €0.9m reduction in operating cost on a like for like basis (excluding Elba), Operation of Ecomsa and Elba reduced to minimal level from mid March to end of May as a response to Covid19 impact on demand. 10#118,0 7,5 7,0 6,5 6,0 5,5 5,0 45 4,5 4,0 40 ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Divisional sales benefited from shift in consumption from foodservice to retail € m's Q2 20 Q2 19 1H 20 1H 19 Sales 26.7 23.1 54.4 48.3 Net margin 3.1 2.4 6.0 5.4 Normalised EBITDA 1.6 1.0 3.1 2.6 Normalised PBT* 1.0 0.5 1.9 1.6 * Normalised PBT represents Profits before tax before allowing for significant items. SALMON PRICES (€/KG) ■2019 2020 44 42 40 38 36 34 32 32 > VA S-Europe > VA N-Europe > Sales & Distribution Sales growing by 13% Normalised PBT up from prior year €0.3m from 1H 2019 • • H&G COD FROZEN PRICES (NOK/KG) 2018 2019 2020 • In total 30% divisional sales growth to retail, driven by new listings from 2H 2019 and increased demand due to temporary shift in consumption from foodservice to retail At the same time sales into UK foodservice were heavily impacted by the pandemic, are 40% down on last year. Positive outlook for the remainder of the year and into 2021, with the merger in UK and new listings with UK retail customers. Foodservice sales have started to pick up with easing of restrictions and opening of schools in UK. • Retail driven sales growth delivering €0.6m net margin increase compared to same time last year Raw material prices were high in the first two months of the year, but eased down with the Covid19 outbreak in March, Acceptable service levels maintained. during the period despite significant fluctuation in demand and various disruptions in the supply chain, Cost related to implementation of Covid19 contingency plans negatively impacted margins and operating costs in the period, Interest cost €0.2m higher than last year, driven by higher working capital to support sales increase. Production of the foodservice focused Havelok closed down from Mid-March to late May. Jan Feb March April Source: SeaData Center 30 May June July Agu Sept Okt Nov Dec Jan Feb March April May June July Agu Sept Okt Nov Dec Source: Norges Sjomatrad 11#12ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Strong sales of fresh fish through the time of pandemic Around 32% reduction in sales compared to 1H 2019 € m's Q2 20 Q2 19 1H 20 1H 19 Sales 29.0 46.1 69.0 102.2 Net margin 1.3 1.9 3.0 4.2 • Normalised EBITDA 0.3 0.5 0.7 1.3 Normalised PBT* 0.1 0.4 • 0.5 1.0 * Normalised PBT represents Profits before tax before allowing for significant items. FRESH FILLETS 2020 (€/KG) Saithe Haddock Cod FAS FILLETS 2020 (€/KG) Saithe Haddock Cod 8,8 16 13,5 14 9 12,4 12,9 12,9 12 8 11,6 7,1 6,9 12 10,6 10,3 6,7 12,7 7 6,5 6,4 6,2 12,3 12,4 7,1 10 11,2 11,5 9 5,6 6,6 6,6 4,7 9,7 10,4 6,1 8 10,2 6 5 60 9 4,1 4,1 5 6 4,6 4,7 3,5 4,1 4 5,2 3,5 5,3 32 19 4 6,2 6,2 5,7 3 2,7 3,5 3,4 3,3 2 2 Jan Feb March April May June July August Jan Feb March April May June July August · • Slow sales in Jan-Feb, caused by bad weather in Iceland, Reduction in demand due to Covid19 restrictions significantly impacted sales from Mid-March to May, Sales gradually recovered with easing of restrictions in June and July, overall sales in July only 9% down on last year sales Relatively strong sales of fresh fish from Iceland have helped mitigating the Covid19 impact. Fresh sales during 1H2020 were 97% of last year sales. Outlook for 2H 2020 remains uncertain, with ongoing challenges in key markets. > VA S-Europe > VA N-Europe > Sales & Distribution Normalised PBT down €0.5m from 1H2019 • Net margin €1.2m below 1H 2019, due to lower sales, At the same time overhead cost reduced by 0.6m. Various actions. have been taken to reduce costs in all regions. Devaluation of ISK has also helped with regards to costs in Iceland. Finance cost slightly higher than last year. 12#13ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts € m's Results in Q2 significantly impacted by Covid19. Sales have gradually recovered from June to August Q2 20 Q2 19 1H 20 1H 19 Sales 76.0 111.2 183.2 232.1 Net margin 6.2 9.3 16.1 20.5 Normalised EBITDA 1.2 3.3 5.2 8.3 Normalised PBT* (0.6) 2.0 2.0 5.5 Net Profit (0.5) 1.0 1.3 2.9 * Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations. GROUP MONTHLY SALES 2020 VS. 2019 (€'M) 2020 2019 43,4 45,0 37,9 40,6 39,4 40,0 21% reduction in Group sales from 1H 1H 2019 • Significant reduction in sales due to Covid19 outbreak, Strong sales growth in N-Europe division driven by retail sales, partly offsetting shortfall in S- Europe and S&D divisions, Forthcoming growth in UK retail sales will create a better balance between retail and foodservice within the Group Iceland Seafood Group Normalised PBT down €3.5m on prior year Reduction in sales in the higher margin S-Europe division, the key explanation for €4.4m drop in net margin. Overhead cost €0.3m lower than last year, driven by cost synergies in Spain, devaluation of ISK and various actions taken to reduce costs in all regions, Net profit €1.6m down on last year. 1H 2019 results impacted by €1.6m one off cost, compared to €0.3m this year. Gradual recovery of sales and profits from June to August. 35,0 37,2 30,0 25,0 38,1 29,6 37,1 21,3 23,5 33,5 33,5 34,8 23.4 31,7 30,4 31,3 20,0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 13#14ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Liquidity improved by new €17.5m long term financing with Spanish banks € m's Fixed assets Leased assets Intangible assets 30.6.2020 31.12.2019 Variance € m's 30.6.2020 31.12.2019 Variance 22.5 17.6 4.9 Total Equity 82.8 80.2 2.6 2.3 2.7 (0.4) Thereof minority interest. 4.0 3.8 0.2 48.6 44.7 3.9 Long term borrowings. 24.6 8.0 16.6 Deferred tax/other 2.7 3.1 (0.4) Lease liabilities 1.7 2.1 (0.4) Non Current Assets 76.1 68.1 8.0 Obligations/Deferred tax 1.9 2.1 (0.2) Inventory 89.6 65.1 24.5 Non Current Liabilities 28.2 12.2 16.0 Trade and other receivables 48.3 62.3 (14.0) Short term borrowings 77.2 67.2 10.0 Other assets 7.5 4.4 3.1 Trade and other payables 44.0 42.2 1.8 Bank deposits and cash 16.1 9.6 6.5 Other current liabilities 5.4 7.7 (2.3) Current Assets 161.5 141.4 20.1 Current liabilities 126.6 117.1 9.5 Total Assets 237.6 209.5 28.1 Total Equity and Liabilities 237.6 209.5 28.1 Total assets €28.1m higher than at year beginning driven by: • • • Acquisition of Elba Investments in UK Higher stock levels, in Spain and UK Net debt at end of June of €85.7m were €20.1m higher than at year beginning, driven by higher stock levels, investments in UK and acquisition of Elba. Equity ratio of 35% compared to 38% at year beginning. Actions taken to improve liquidity. New long-term financing of €17.5m secured with a group of Spanish banks, resulting in strong cash position. Group funding headroom (including cash) of €34m at end of June. Tightening of risk management controls, especially around receivables and inventories. Receivables contract in line with lower revenues. Around 86% of receivables credit insured at end of June. Inventories consist of frozen and salted products with long shelf life. 14#15ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Q2 2020 Results Outlook#16ISI ICELAND SEAFOOD Q2 2020 Results Presentation to Investors and Analysts Outlook for 2020 As expected, the results in Q2 were significantly impacted by the pandemic. Sales have gradually recovered in Q3, in line with previous expectations, Outlook from May was based on the view that sales would be on track with original pre-pandemic outlook in Q4 2020, Covid19 instances remains high in key markets and several restrictions are still in place to control the situation. Likely that full recovery of sales will be delayed especially in S- Europe, Increased costs due to higher inventory levels and segregation of labour during the pandemic. Price developments likely to impact margins negatively, Due to these reasons upper end of the outlook range is now reduced by €1m, current outlook range for 2020 Normalised PBT is €6.0m - €8.0m, Strong performance of VA N-Europe division and improved balance between retail and foodservice will help managing the situation. Upper end of outlook range reduced by €1m due to the ongoing uncertainty on Covid19 development Uncertainty Covid19 is causing a significant uncertainty on the Group sales and profitability during this year, Group results are also influenced by other external factors such as: i. Fishing and quota changes as well as price development and our ability to pass on price changes in key markets ii. Changes in underlying global economic conditions, currency rates, import duty rates, competition and consumer behaviors all generate uncertainty iii. Among these uncertainties are Brexit, USA related tariffs and political uncertainty in Argentina • • Focus and growth Actions have been taken to secure funding and liquidity of the Group in the current situation. Risk management controls have been tightened with focus on key assets i.e. inventories and receivables, Focus on projects to drive synergies and organic growth within our value-added activities, At the same time the Group is acting on certain external growth opportunities and further opportunities are being explored. Full year Normalised PBT* (m's) 3,5 3,3 2,9 1,7 1,3 1,0 0,8 *Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations 11,3 10,8 8,0 7,4 6,0 2011 2012 2013 2014 2015 2016 2017 2018 2018P 2019 2020 16#17ISI ICELAND SEAFOOD Q2 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#18ICELAND ISI SEAFOOD www.icelandseafood.com We are Iceland Seafood