#1ISI ICELAND SEAFOOD THE ICELAND SEAFOOD GROUP Q2 and 1H 2022 RESULTS Presentation to Investors and Analysts#2ISI ICELAND SEAFOOD Q2 2022 Results Presentation to Investors and Analysts 90 YEARS 1932-2022 We are Iceland Seafood#3ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts Iceland Seafood in numbers 449m+ € Annual revenues in 2021 Global value-added Seafood producer and sales and marketing company 11 Businesses in 7 countries 曲 7 value added factories 3 12.5m Normalised PBT 2021 32.8% Equity ratio at year end 2021 5.000+ Customers across 45 countries X 1.0m+ Meals sold every day during 2021 945+ employees 100.000 MT of products sold in 2021#4ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts 1932-2022 90 years together Iceland Seafood International is proud of its strong heritage and history and continues to build on that foundation, to be a respected industry leader. 1914 PASYN BLOVN NASSON GA 2021 1955 2015 4 1932 1935 2022 2022#5ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts Cost increases and shortage of supply has been the main drivers for negative performance in Q2 & H1 Increased political risk and disruptive supply chains bringing on challenges and opening up opportunities at the same time Significant and rapid price increases in all areas during 1H 2022, driven by strong demand and unstable supply. Prices have leveled off in certain areas, These price increases impacted Iceland Seafood negatively, especially in areas that relies on retail sales. It takes longer time to pass the cost on in retail than foodservice, • • • Price volatility is expected to continue for the coming months with the contrary drivers of decrease in fishing quotas and disruptive supply chains on one side, but economic decline and diminishing consumer purchasing power on the other side having an impact, Due to Covid19 and geopolitical turmoil, it is expected that price volatility and disruptions in various supply chains will continue for the coming months, with increased prospects of deglobalization, This will have negative impact on profitability of the sector in general, as companies are likely to carry higher inventories and diversify the supply base further to manage the underlying risk, On the other hand, it is likely that production will move closer to consumers. Production in Europe will become more competitive where automation and investments in production efficiencies will play a key role. Iceland Seafood is in good position to benefit from this development, The operation of Iceland Seafood is well balanced. The company is in good position to address challenges and utilize opportunities that will arise, due to its strong sourcing base and value-added operations close to key markets. 300 250 200 150 100 50 208.3 Sales 1H 21 Group sales growth driven by price increases (€'m) 32.2 (8.9) 238.4 6.7 Price increases Volume decrease Changes to Group Sales 1H 22 Investments going forward can be segmented into three main categories: • • Investments connected with sustainability matters. E.g., Solar Panels, waste management, water treatment etc. Emissions and waste management will be measured and reported from beginning of 2023, 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 Domínguez). The Group plans to further invest in the brands it holds and increase their value. LO#6€ 14,00 ISI Q2 2022 ICELAND SEAFOOD and Analysts Salmon prices levelling off after reaching all time high in Q2. Weekly Salmon prices (2006 - 2022)* € 12,00 € 10,00 € 9,16 €9,06 € 8,64 € 7,37 € 8,00 € 8,00 € 7,17 € 6,58 € 6,00 € 4,00 € 2,00 € - 1 2 € 7,03 € 7,18 3 4 5 60 7 8 9 2006 € 12,77 € 12,31 € 11,95 € 11,43 € 10,72 € 8,44 € 9,19 €9,00 € 8,22 € 10,37 € 10,38 € 10,38 € 10,24 € 10,00 € 10,03 € 9,44 € 9,66 € 9,28 € 8,97 € 7,72 € 7,16 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 466 40 41 42 43 44 45 46 2021 2022 88 47 48 49 49 50 51 52 52 *Source NASDAQ#7ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts Good performance of S-Europe division despite of challenging external conditions Factory extension progressing in accordance with schedule • Sales in the 1H of €108.8m were 27% up on 1H 2021 on like for like basis, largely driven by price increases. Sold volume grew by 7% at the same time, . • • Profitability of IS Ibérica improved significantly from prior year, with both higher sales and margins. Strong market position for Icelandic cod products paying off, Challenges in logistics having a negative impact, with both increased transportation costs (inbound and outbound) and cold storage costs, Factory extension on track in Barcelona. Installing of solar panels progressing both in Barcelona and Madrid. The investment will improve efficiency level in production and provide savings in electricity cost, Rapid increase of salmon prices affected the results of Ahumados Domínquez in the 1H 2022. Performance is improving in Q3 with prices leveling off and increased sales which have been secured following marketing campaign in December 2021. 7 Challenges in sourcing of raw • material at Achernar during 1H 2022 • . Overall fishing volumes in 1H 2022 decreased by 25% from same time last year, largely due to bad weather conditions, unstable labour environment and later start of the winter season (national waters) than last year, The production in the winter season has been affected by lower supply of raw material and increased prices. Lower volume is partly offset by big sizes and good quality of the raw material, Outcome of squid season in line with expectation. This helped results in Q2, in a period of low shrimp production as Rawson season concludes in March and National waters season starts at end of June, Shrimp prices remain stable for sales to Asia. Signs that prices into Europe will be under pressure in 2H with lowering prices of vannamei shrimp, Overall, a positive but uncertain outlook given the dynamic environment we are operating in.#8ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts Extreme cost increases impacting the operation of IS UK Results impacted by severe cost increases and disruptive supply chain • All UK operations moved into a single location at year end 2020. The merger process and integration has proven to be more costly and complex than anticipated, severely impacted by external challenges (Brexit, Covid19, severe cost increases this year), Production continued to be affected by difficult. labour market and Covid situation in the beginning of the year but improved from beginning of March, Extreme cost increases of almost all input factors having significant negative impact on the operation, Price increases have generally been accepted by customers, but with time delays. As price increases have come into affect, more input cost has occurred, Price increases are negatively impacting demand. In some cases products have been delisted consequently, Increased tariffs and reluctance in the market against Russian origin products having negative impacts in the short term but brings opportunities in the mid/longer term. 8 New management team in place. Main emphasis on credibility towards retail and stabilising the operation . • • • Glen was previously the Production Director of Hilton (former Icelandic Seachill), for 20 years, managing over 1,400 employees across three factories, The management team has been strengthened in various positions during 1H 2022. People with retail processing and commercial experience have joined the business, many of them have worked successfully together in their previous jobs, Key focus points of the team in the short term are: To stabilize and improve efficiency in the operation and quality of the production. Steps have been taken in that direction but there is still a way to go, To push through price increases to customers. This takes time, and occasionally leads to delisting of products, Grow the business with both current and new customers, with increased focus on leveraging the Groups sourcing position in Iceland. This will require investments in automation and processing equipment., At the same time the long term vision and strategy of the business is being reviewed.#9ISI ICELAND SEAFOOD Q2 and 1H 2022 RESULTS PRESENTATION TO INVESTORS AND ANALYSTS Financial performance#10ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts Strong demand for core products driving positive results in the period € m's Q2 22 Q2 21 1H 22 1H 21 Sales 54.6 40.7 108.8 77.8 Net margin 6.7 4.0 14.1 9.9 Normalised EBITDA 2.0 1.3 5.2 4.7 Normalised PBT* 1.6 1.4 4.2 4.5 *Normalised PBT represents Profits before tax before allowing for significant items. ** Ahumados Domignuez in the figures from Q4 21 > VA S-Europe > VA N-Europe > Sales & Distribution Sales in 1H 2022 up 27% like Normalised PBT of €4.2m, for like from 1H 2021 down €0.3m from 1H 2021 • . Sales growth largely driven by price increases, volume growth 7% from last year on like for like basis, i.e. excluding Ahumados Domínguez (AD), Production volume of Argentinian shrimp at Achernar 30% down on last year. Lower fishing volumes in Q1, labour issues and slower start of winter season in June than last year impacting production, Sales of AD €9.6m in the period, grew by 18% from last year. Price increases and market campaign in December 2021 driving the sales growth. Good results of IS Ibérica driving the positive results, Good demand and strong margins on light salted products and stable market conditions for Argentinian shrimp contributed to the results, Extreme price increases of salmon negatively impacted profitability of AD in the period. With cost prices levelling off and increased sales prices, profitability is expected to be back to normal levels in Q3, Lower production volume of shrimp at Achernar than last year, negatively impacted the results. Results from Squid season were in line with plan, helping results in Q2, The addition of AD, (where both margin % and operating costs is higher), and €0.5m negative FX movement skews comparison with prior year. 10#11ISI ICELAND SEAFOOD Q2 2022 Presentation to Investors and Analysts > > VA N-Europe Unprecedented price increases having a VA S-Europe severe negative impact on results both in UK and Ireland in the period € m's Q2 22 Q2 21 1H 22 1H 21 Sales 28.2 31.6 56.8 63.4 Net margin (0.8) 2.1 (0.9) 5.2 Normalised EBITDA (2.9) 0.3 (4.9) 1.5 Normalised PBT* (3.8) (0.6) (6.7) (0.4) *Normalised PBT represents Profits before tax before allowing for significant items. Salmon prices (€/kg) 5,40 H&G cod frozen prices (US$/kg) 2019 2020 2021 2022 5,61 5,55 5,51 5,23 5,06 Sales in 1H 2022 down €6.6m on same period last year • 11,5 2019 2020 2021 2022 5,90 10,82 11,0 10,5 10,52 10,0 10,05 9,5 9,0 8,57 8,5 8,28 4,90 8,0 7,68 7,46 7,2 7,5 7,1 7,02 4,55 6,95 7,0 4,5 4,48 6,58 6,38 4,44 4,44 6,5 6,4 6,95 6,3 6,25 4,40 6,0 5,69 6,4 6,09 4,24 4,29 4,27 4,35 4,32 4,40 4,17 4,24 5,63 6,72 6,15 5,51 4,32 4,33 4,13 4,38 5,5 5,5 5,13 4,09 3,98 4,01 4,9- 5,4 5,64 3,92 3,92 4,01 5,0 5,6 3,91 4,04 4,26 4,29 5,54 5,25 5,05 5,1 3,90 5,1 5,18 3,74 3,69 3,98 3,80 4,5 5,08 4,7 4,8 4,0 4,6 4,5 4,5 4,54 3,79 3,83 3,80 3,71 3,73 3,76 Jan Feb March April May June July Agu Sept Okt Nov Dec 3,58 3,40 Jan Feb March April May June July Agu Sept Okt Nov Dec Demand in Ireland unusually strong in 1H 2021, due to lockdown restrictions on restaurant activity and strong position of our Irish operation post Brexit. This affects comparison with prior year, The price increases that have been pushed through in the period, have had negative impact on demand. Sold volume in Ireland 16% down on same period last year, Challenges in production and disruptive supply chains negatively impacted service levels and launching of new products in UK in the period. > Sales & Distribution Results severely impacted by price • increases in the period Significant and rapid price increases in all areas negatively impacted results in the period, The division mostly relies on sales to retail customers, it takes longer to pass on price increases to customers in retail than foodservice, IS UK business was loss making in the period. Continuing impact of challenging external environment. Outbreak of Omicron in the beginning of the year had disruptive impact on both operations and logistics. Price increases of various input factors had significant impact on margins, Results in Ireland especially impacted by sharp salmon price increase in the period. These prices have now levelled. off, at the same time cost increases have been passed on to customers. Performance of the Irish business expected to be back to normal levels. from Q3. Source: SeaData Center Source: Norges Sjomatrad 11#12ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts Continuing strong demand for products > VA S-Europe from Iceland > VA N-Europe > Sales & Distribution € m's Q2 22 Q2 21 1H 22 1H 21 Sales 46.6 37.4 87.0 76.8 Net margin 2.0 1.7 4.1 3.5 Normalised EBITDA 0.8 0.6 1.7 1.2 Normalised PBT* 0.7 0.5 1.7 1.1 19,1 18,3 7,7 Sales growth of 13% from 1H 2021, Sales are up €10.2m from prior year, despite the closure of IS US activity at back end of last year, Price increases are driving the divisional sales growth, volume of Groundfish is 9% down on last year (like for like) and pelagic 22% down, Market for Frozen at Sea and landfrozen products strong in the period. Prices seems to have topped at end of Q2, Ukraine is an important market for pelagic products. That market was active in Q2, goods are sold against prepayments as buyers can't be credit insured, Continuing supply chain disruptions and tariffs/sanctions on Russian products are having further positive impact on demand for Icelandic products, both in Europe and US. Normalised PBT of €1.7m up 49% from 1H 2021 • Net margin in 1H 2022 €0.6m up on last year, driven by price increases in the period, Both the French and the German. operations performed well in the period, Operating and finance costs are in line with last year, resulting in divisional Normalised PBT of €1.7m, compared to €1.1m in 1H 2021. Saithe 16 16 Haddock Cod *Normalised PBT represents Profits before tax before allowing for significant items. Frozen at Sea fillets (€/kg) Fresh fish (€/kg) Saithe 15,1 Haddock 20 Cod 14,1 14 13,4 14,3 14,2 18 13,0 12 22 14,7 16 11,7 14,1 10,9 10 10 10,9 8 7,7 6,8 7,27,3 7,2 6 6,3 6,1 7,2 7,2 7,8 9,29,2 9,8 10,1 6,1 6,4-7 5,3 6,5 4 4 8,7 7,9 4,8 5,1 5,1 2,7 2,9 2,9 3,8 3 3,1 3,1 2 Jan Feb Mar... 3 April May June July Aug Sept Source: Navision Oct Nov Dec Jan Feb Mar... April 10,7 11,5 14 9,7 8,8 5,3 4 5,5 4,9 May June Ju' 2 Jan Feb Ma... April May June July Aug Sept 5,2 Oct Nov 13,8 17,1 13,3 13,8 11,4 14,1 12,7 13,7 12,4 15,8 12,9 14,7 11,3 13,9 12,8 11,1 13,5 12 9,9 10,6 13,2 11,3 10,5 13,1 L 13,1 12,9 10,9 14,1 10 10,3 11,9 12,3 11,2 12,3 11,8 6,0 6,6 6,5 10,1 10 12,6 7,1 8,1 9,3 6,5 7,9 7,5 8 5,21 8 5,4 8,9 6,3 5,9 6,4 5,9 9 5,1 7,9 7,4 7 5,7 6,4 Dec Jan Feb Ma... April May June July Aug 12#13ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts Group's results impacted by rapid and substantial price increases of all input. factors in the period Group sales in 1H 2022 of €238.4m up 14% on 1H 2021 • € m's Q2 22 Q2 21 1H 22 1H 21 Sales 122.5 103.9 238.4 208.3 Net margin 8.0 7.8 17.3 18.7 Normalised EBITDA 0.0 2.2 1.9 7.3 Normalised PBT* (1.8) 1.0 (1.8) 4.8 . Net Profit (2.1) 0.7 (2.9) 3.4 * Normalised PBT represents Profits before tax before allowing for significant items and discontinued operations. . ** Ahumados Dominguez in the figures from Q4 21 • Sales growth driven by higher prices in all regions. Total volume sold (MT) is down 6% from prior year on like for like basis, Sales in S-Europe increased by €21.4m on a like-for-like basis (excluding Ahumados Domínguez). Sales of IS Ibérica up 29% in value but 7% in volume, Retail sales in Ireland were exceptionally good during 1H 2021, due to covid impact on restaurant activities. Rapid price increases negatively impacted demand in both Ireland and UK in 1H 2022, Continuing strong demand for Icelandic products. Increase in sales of S&D division, despite closing of the US sales office late 2021. Iceland Seafood Int'l Normalised loss before tax of €1.8m in the period • Net margin down €1.4m despite higher sales, impacted by the extreme cost increases in the period, Different cost structure of Ahumados Domíngues than elsewhere in the Group (higher margin % and higher operating cost) impacts comparison with prior year, Operating costs in 1H 2022 €4.0m higher than 1H 2021, driven by the addition of Ahumados Domínguez, Finance cost slightly up on prior year, due to increase in net debt and increased interest rates. Adverse movement of €0.5m in FX from 1H 2021, Normalised loss before tax of €1.8m in the period, Income tax of €1.1m expensed in 1H 2022, mostly related to taxes on profits in Spain. Deferred tax loss in UK is not capitalised in the period, • After considering cost of significant items and income tax, net loss in the period of €2.9m was €6.3m down on the results same time last year. 13#14ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts Impact of price increases on inventories and receivables inflates the Balance sheet at end of the period € m's Fixed assets Leased assets Intangible assets. 30.6.2022 31.12.2021 Variance € m's 30.6.2022 31.12.2021 Variance 32.5 31.6 0.9 Total Equity 89.3 91.7 (2.5) 1.7 1.9 (0.2) Thereof minority interest 2.0 2.3 (0.3) 62.4 62.6 (0.2) Long term borrowings 38.3 40.3 (2.0) Deferred tax/other 4.7 4.9 (0.2) Lease liabilities 1.3 1.5 (0.2) Non-Current Assets 101.3 101.0 0.3 Obligations/Deferred tax 2.5 2.3 0.2 Inventory 101.0 77.3 23.7 Non-Current Liabilities 42.1 44.1 (2.0) Trade and other receivables 67.3 65.7 1.6 Short term borrowings 88.1 81.6 6.5 Other assets 10.7 7.6 3.1 Trade and other payables 55.3 52.2 3.1 Bank deposits 4.0 27.8 (23.8) Other current liabilities 9.6 9.6 0.0 183.1 178.4 4.7 Current liabilities 153.0 143.5 9.5 Current Assets Total Assets Inventories in S-Europe division €19.6m higher than at same time last year, and €24.2m higher than at year end 2021 driven by price increases in the period, Cash position decreased by €23.8m from year end 2021. Group funding. headroom of €31.8m at end of June, 284.4 279.4 5.0 Accounts receivables have increased by €1.6m from year beginning and by €6.8m from same time last year, due to price increases. At end of June, 84% of Group receivables are insured, Net debt at end of June of €122.4m, increased by €28.2m from year beginning, driven by increase in inventories and receivables, Total Equity and Liabilities Loan agreement of €20m with Arion. banki extended for 3 years in April 2022. The bank will provide funding to the S&D division. The facility was only drawn €0.3m at end of June, Two offerings of 6 months bills for ISK 2.000 million in total outstanding at end of June, was reduced by ISK 1.000 million in the period, 284.4 279.4 5.0 Total equity of €89.3m and equity ratio of 31.4% at end of June compared to 32.8% at end of 2021. 14#15ISI ICELAND SEAFOOD Q2 and 1H 2022 RESULTS PRESENTATION TO INVESTORS AND ANALYSTS Outlook#16ICELAND ISI SEAFOOD Q2 2022 Presentation to Investors and Analysts • Revised outlook range for Normalised PBT €9.0- 14.0m (previously €11.0-16.0m) 1H 2022 results impacted by extreme price increases of all input factors in the period. The operation of IS UK was loss making in the period, has become clear that it will take longer and cost more to stabilize the operation than previously estimated, Certain prices have levelled off, e.g. salmon prices have decreased after reaching all time high in May. Performance of our Irish operation and Ahumados Domínguez in Spain expected to be back to normal levels from Q3 onwards, However, the current political instability and disruptive supply chains is causing increased uncertainty and volatility in pricing of various input factors, Disruptions and cost increases in various supply chains are expecting to continue, with increased prospects of deglobalization. This will negatively impact efficiency and profitability of the sector, as companies are likely to carry higher inventories and diversify their supply base to mange underlying risk, At the same time, it is likely that production will move closer to home. Iceland Seafood is in good position to benefit from this development with its value-added production facilities in Europe, Investments in automation and energy saving projects are being implemented to address difficult labour market and improve efficiency. These investments have short payback time, Revised outlook range for Normalised PBT of €9.0-14.0m for the year 2022. This is based on the assumption that prices of key input factors will not be as volatile as in 1H 2022, Q4 is a key trading period for the Group, in terms of smoked salmon, light salted cod and Argentinean shrimp. Majority of the projected profit is expected to be generated during that quarter. Group results are influenced by various 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 and geopolitical turmoil. Current war between Russia and Ukraine and further sanctions and tariffs on Russian products, with repercussions, Covid19 development and key factors indirectly impacted by the pandemic. 1.7 2.9 1.0 Full year Normalised PBT* (m's) 3.5 3.3 7.4 11.3 5.1 12.5 14,0 9,0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 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 when the external environment and the UK operation stabilizes. 16#17ICELAND ISI SEAFOOD Q2 2022 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