Slides
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MARCH 2025 STATUS AND PROGRESS 11 MARCH 2025
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2025 Martin Rasmussen CEO • ANDFJORD SALMON IN BRIEF • Quarterly highlights and subsequent events • Status Kvalnes build-out: Phase 1 • Kvalnes Phase 2: Plans and ambitions • Financials • Summary and outlook Bjarne Martinsen CFO AGENDA Jostein Nilssen Project Director
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NATURAL OPTIMAL WATER TEMPERATURES OXYGEN-RICH AND CLEAN ARCTIC SEAWATER LOW ENERGY COSTS. NO LIFTING, HEATING OR COOLING THE BEST OF TWO WORLDS 3 BENEFITS OF SEA BASED NET PEN FARMING 3 BENEFITS OF LAND BASED FARMING 1 2 3 NO PROBLEMS WITH SALMON LICE AND POISONOUS ALGAE NATURAL ESCAPE PREVENTION COLLECTION AND RECYCLING BIOWASTE = COMMERCIAL VALUE 1 2 3 2025 First pool, Kvalnes First pool, Kvalnes
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NATURAL FLOW – ANDFJORD SALMON’S FLOW-THROUGH SYSTEM JUNE2023
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KEY FIGURES – FIRST PRODUCTION CYCLE 1.05 LOW FEED CONVERSION RATE STRONGER GROWTH LOWER ENERGY COSTS HIGH SURVIVAL RATE Industry average = 1.27** +1 kilo Extra growth compared to Skretting’s growth table 1 kWh Energy use per kilo produced salmon 97.5% Industry average = 83.3%* Source: *Fish Health Report 2023 ** 2023 industry average HIGH SUPERIOR SHARE 91.1% Industry average = 85.1%** 2025
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2025 • Andfjord Salmon in brief • QUARTERLY HIGHLIGHTS AND SUBSEQUENT EVENTS • Status Kvalnes build-out: Phase 1 • Kvalnes Phase 2: Plans and ambitions • Financials • Summary and outlook AGENDA
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HIGHLIGHTS Q4 AND SUBSEQUENT PERIOD 2025 KVALNES PHASE 1 BUILD-OUT ON TRACK Waterways near completion, solid progress on four next pools and other workstreams OPTIMISING PRODUCTION LOGISTICS FOR +20% HIGHER VOLUMES Increased water flow capacity and optimized fish logistics to enable 20% higher through-put to give 23,700 tonnes (HOG + post-smolt) production capacity from current Kvalnes license INITIATING PHASE 2A CONSTRUCTION Initiating phase 2a with additional production volume of 6,000 tonnes (HOG + post-smolt) RAISED FUNDS OF NOK 1.4 BN Through bank package, potential sale and leaseback agreement, plus successful private placement DE-RISKING FOR POTENTIAL REGULATORY CHANGES Future-proofing Andfjord Salmon through investments in redundancy for potential regulatory changes
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2025 • Andfjord Salmon in brief • Quarterly highlights and subsequent events • STATUS KVALNES BUILD-OUT: PHASE 1 • Kvalnes Phase 2: Plans and ambitions • Financials • Summary and outlook AGENDA
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K1 K2 K3 K4 K5 K6 K7 K9 K 1 1 K8 K 1 0 K 1 2 PHASE 2 B: K9 – K12 PHASE 1: K1 – K4 PHASE 2 A: K5 – K8 Illustration showing what Kvalnes may look like in 2027
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STATUS AND PROGRESS – WATERWAYS 2025 o Capacity to support annual production of 48,100 tonnes (HOG + post-smolt) of salmon o Workstream on track o Total tunnel length 4.4 km: o 6-7 m of outlet waterway remains o 70 m of inlet waterway left o Completed tunnel infrastructure below pools o Concrete work in tunnels ongoing o Final breakthrough to sea (nearby Andfjorden) planned for Q2 2025 WATERWAYS ON TRACK
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INFRASTRUCTURE FOR WATER- WAYS AND POOLS IN PLACE 2023Q3 2023 2025 TUNNEL INFRASTRUCTURE BELOW POOLS COMPLETED o 8 x vertical inlet shafts to provide pools with fresh seawater (most adjacent pools share one inlet) o 6 x vertical outlet shafts (adjacent pools share one outlet) o Completed sections from pools to tunnels Illustration and photo: UHPC concrete elements and shafts
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STATUS AND PROGRESS – POOLS 2023 2025 o Workstream on track: 65% completion per 10 March 2025 o UHPC concrete wall elements produced by factory on site o Columns, supports and preparations for wall elements completed for K1 and K3 o UHPC wall elements being assembled in K1 – 80% complete 4 POOLS BEING CONSTRUCTED
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STATUS AND PROGRESS – HARBOUR 2023 2025 o Workstream on track o Temporary breakwater constructed to shield ongoing construction work from waves and currents originating from Andfjorden o Once harbour and port infrastructure are fully completed, temporary section of breakwater will be removed, allowing vessels to enter and operate within the protected harbour. QUAY AND BREAKWATER BEING CONSTRUCTED
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Testing Construction Production Phase 1 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25e Q2’25e Q3’25e Q4’25e Q1’26e Q2’26e Excavation of Phase 1 and 2 pool pits Initial scheduleStatus: 100% finished (ahead of schedule) Waterways Status: 98% finished (on track) Technical infrastructure Status: 25% finished (ahead of schedule) Operational harbour and port Status: 71% finished (on track) Phase 2a K5-K8 Shared infrastructure as part of Phase 1 Construction period Q3’26e Concrete works K1-K4 Status: 65% finished (on track) Harbour area Water- ways Initial schedule Production Phase 2a First post- smolt sale First harvestFirst smolt insert Pool pits excavation Off-take from Note: Status per 24th February 2025 BUILD-OUT OF PHASE 1 AT KVALNES NEARING COMPLETION 2025
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2025 • Andfjord Salmon in brief • Quarterly highlights and subsequent events • Status Kvalnes build-out: Phase 1 • KVALNES PHASE 2: PLANS AND AMBITIONS • Financials • Summary and outlook AGENDA
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• Kvalnes construction plan follows a four-by-four pool expansion • Construction of Phase 1 and shared operational infrastructure for all 12 pools to be finalized by Q2 2025, on time and budget • Decision to start Phase 2a construction immediately, reaping construction synergies from continuous process across phases. Retaining personnel and equipment on-site, allowing for optimized resource usage and accelerated execution time • Accretive investment opportunity to be further pursued now, prior to pool pits being cemented in: ‒ This includes wall segment joining Phase 1 and Phase 2a, which will reinforce the pools to allow for optimized water flow and fish logistics, as well as preparations for adherence to potential regulatory changes (further described on subsequent pages) 1 ✓ 2b 2a Phase 2a Dividing walls between pools already started SPEED AND ACCURACY OF PHASE 1 ALLOWS FOR IMMEDIATE START OF PHASE 2 EXP. 2025 20252025
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OLD water flow and fish logistics NEW water flow and fish logistics 19,000 tons Previous annual production estimate, Phases 1 & 2 (HOG) 23,700 tons Revised annual production estimate, Phases 1 & 2 (HOG + post-smolt) water inlet water outlet water inlet water outlet water inlet water outlet water inlet water outlet New system for increased flexibility of moving fish Reinforced concrete walls for increased water flow and levels Previous capex/kg estimate, full Kvalnes site NOK 114/kg Updated capex/kg estimate, full Kvalnes site NOK 105/kg Note: Illustrative DESIGN IMPROVEMENTS FOR OPTIMIZED POOL UTILISATION AND +20% OUTPUT 2025
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Key features of upgraded systemNew fish logistics system developed in partnership with Cflow • Originally, Andfjord had planned for splitting between pools to utilize piping going over the walls, one time per life cycle • Now, with a new design developed together with fish handling experts and core partner Cflow, the company will move fish using a network of piping below the ground • This revised method imposes less stress on the fish • Further, the revised logistics system enables more flexibility in splittings, meaning that pools will achieve significantly higher utilization (higher average number of fish across all pools) • The method for moving fish entails having a lower water level in the ‘receiving’ pool versus the ‘sending’ pool, resulting in a natural flow of water and fish between pools • This added water pressure means that walls need reinforcing • For Kvalnes in total, the optimizations are expected to give approximately +20% production output Tank with fish INCREASED water level Receiving tank(s) DECREASED water level New fish logistics system allows for GENTLE AND LOW-RISK MOVING OF FISH Note: Illustrative NEW AND MORE GENTLE LOGISTICS SYSTEM REDUCES OPERATIONAL RISK 2025
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• New fish logistics system allowing for more flexibility in the relocation of fish between pools thanks to increased water flow, with up to 24 times water renewal per day, and new fish transport system • Possible to stock more smolt when avoiding the illustrated drops in pool utilization, and thereby increasing production • Improved MAB utilization of current license while maintaining optimal farming conditions • Better water flow and fish management also means that the system can handle higher densities at the peaks 1 2 3 4 5 6 7 8 9 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 40 41 42 43 44 45 46 47 48 49 50 51 52 Average MAB utilization: ~86-88 % Current license (10,000t MAB) 1 2 3 4 5 6 7 8 9 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 40 41 42 43 44 45 46 47 48 49 50 51 52 Average MAB utilization: ~90-93 % Current license (10,000t MAB) License utilization through the year based on OLD fish logistics and water flow Expected license utilization through the year based on NEW fish logistics and water flow Note: Illustrative ENSURING MORE STABLE, HIGH UTILISATION OF THE CURRENT LICENSE 20252025
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Construction completed: 1,200 tons Total production potential at Kvalnes: 48,100t HOG + post-smolt Construction start in 2023-2025: +22,500 tons +5,100 tons license expansion Construction start in 2027 (target): +5,400 tons Construction start in 2028 (target): +13,900 tons (exact location to be decided) 1 2 3 4 5 Pilot 2025 +20% PRODUCTION VOLUME AT KVALNES
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2 Reinforced concrete water inlet water outlet 3 Water treatment chambers 1 Fish transport system 1 2 3 • The Norwegian Ministry of Trade, Industry and Fisheries has proposed changes to the regulations to ensure the sustainable development of aquaculture production on land: – The proposals will not affect facilities that have already received permission for farming on land1 – The proposal eliminates past confusion about which aquaculture facilities are defined as being “on land” – Proposed requirement for disinfection of seawater at water inlet • Proactive upgrades made to all Phase 1 and 2 pools – highly accretive given that it also enables stronger MAB utilization • Upgrades include treatment chambers for both inlet- and outlet water as well as significant reinforcements to pool concrete structures • As such, Andfjord is fully prepared to retrofit water treatment equipment in case of future water cleansing requirements Source: 1) https://www.regjeringen.no/contentassets/7b417694a3f24a50ab5d5a68e4a3b030/horingsbrev- endring-i-regelverket-for-akvakultur-pa-land.pdf OPTIMIZATIONS ALSO OPEN FOR ADHERENCE TO POTENTIAL REGULATORY CHANGES 2025
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2025 • Andfjord Salmon in brief • Quarterly highlights and subsequent events • Status Kvalnes build-out: Phase 1 • Kvalnes Phase 2: Plans and ambitions • FINANCIALS • Summary and outlook AGENDA
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Highly competitive blended capex for Kvalnes down from 114 NOK/kga to NOK 105/kga Updated Kvalnes build-out plan increases production by +20% Notes: 1) Stated capex numbers relate to investments (working capital/biomass, finance and operational costs not included). Estimates only; 2) Official Company guidance for human grade at full production, including energy costs; a) Included contingency buffer to investment plan of NOK 350m Illustrative EBITDA sensitivity to salmon prices, Kvalnes Phase 1 & 2 (NOKm) ~250 ~360 ~470 ~580 ~690 ~380 ~550 ~720 ~890 ~1 060 ~530 ~770 ~1 010 ~1 240 ~1 480 70 80 90 100 110 Phase 1 Phase 2a Phase 2b Company expects a highly competitive NOK ~48/kg in EBITDA cost2 Phase, Kvalnes Previous capex1 (NOK, est.) Previous accum. Production (HOG, est.) Updated capex1 (NOK, est.) Updated accum. production (HOG, est.) Pilot ~ 450m 1,000t ~ 450m 1,200t 1 Up to 1,650ma 8,000t Up to 1,650ma 11,000t 2a ~ 800m 13,000t ~ 1,150m 17,000t 2b ~ 300m 19,000t ~ 400m 23,700t 3 (license expansion) ~ 0m 23,000t ~ 0m 28,800t 4 ~ 280m 28,000t ~ 280m 34,200t 5 ~ 1,100m 40,000t ~ 1,100m 48,100t Average split of human grade vs. post-smolt TOTAL CAPEX FOR KVALNES DOWN TO AN ESTIMATED NOK 105/KG 2025
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27 Note: 1) Based on NOK 100/kg and a cost base of NOK 48/kg Estimated annual production volumes Tons, HOG & post-smolt – Kvalnes Phase 1 & 2a Estimated EBITDA1 NOKm – Kvalnes Phase 1 & 2a Estimated annual production volumes1 Tons, HOG – Kvalnes Phase 1 & 2a 13 000 17 000 Old Updated +4,000 tons ~680 ~890 Old Updated +200 NOKm NOK ~350 million optimization capex (Phase 2a additions) NOK ~200 million enabled in additional EBITDA ~1.8 years estimated period required for full payback on optimization investment 17,000 tons of annual production from Phase 1 and 2a, through a mix of volume for human consumption and previously announced post-smolt strategy. Full Phase 1 & 2 to give 23,700 tons (HOG + post-smolt) within current license Production optimizations estimated to unlock an additional NOK ~200 million in annual EBITDA on Phases 1 and 2a LESS THAN TWO YEARS IN EXP. PAYBACK PERIOD ON PRODUCTION OPTIMIZATIONS 2025
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Key terms of the bank facility • Andfjord Salmon has received a term sheet signed by the banks for an additional commitment for a construction loan of up to N OK 400 million (up to 50% loan to Phase 2a construction capex), for a total debt package of NOK 1,100 million • As shown on the next page, Andfjord is working on securing a 100% financing on the harbour area which implies a NOK 200 milli on reduction of the existing bank package • The commitment comes with attractive terms from SpareBank 1 Nord-Norge, SpareBank 1 Sør-Norge and SpareBank 1 SMN, with support from Export Finance Norway (NO: Eksfin) • The loan represents a major step in the further expansion of Andfjord Salmon and another strong signal from lending banks • Overdraft facility of up to 60% of the value of borrowing base (standing biomass, inventories, accounts receivables) discusse d, not yet committed • Utilization of the construction loan is subject to customary conditions, including fully financed status • Flexibility on timing of full financing and construction start Leasing facility • A leasing facility of NOK 175m is planned for certain equipment financing Further financing plans • Good dialogue with several banks regarding future financing • Future expansions expected to be financed through debt Debt funding plan for next expansion at Kvalnes Main terms Updated bank package Lenders Construction loan Up to NOK 400m Existing loana Up to NOK 700mc Construction loan converted to term loan At first production Total loan Up to NOK 1,100mc Amortization holiday 24 months after first term loan draw down Repayment profile 12 years Equity ratio covenantb 35% at year-end Overdraft facility 60% of borrowing based Notes: a) Including loan with Sparebank1 Nord-Norge and Innovation Norway; b) The loan is subject to additional covenants not shown in this page; c) Net of the sale leaseback shown on next page; d) Not yet committed NEW BANK PACKAGE TO COMPLETE PHASE 2 EXPANSION 2025
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Key terms of the sale leaseback to Asset Buyout Partners AS (“ABP”) • Andfjord Salmon signed a term sheet for the sale of the harbour area to ABP based on estimated cost of ~NOK 400m which, if such transaction is duly agreed and completed, will give ~NOK +200m in immediate positive cash effect to Andfjord • Upon completion, the harbour is leased back to the company on an 80-year contract at 7.5% yield adjusted for CPI • The transaction is conditional upon the parties agreeing on a share purchase agreement, lease agreement and due diligence, with estimated signing of the share purchase agreement in March 2025 Harbour area • The harbour is a key asset for Andfjord and its operations for the transportation of feedstock, product and waste to and from the site • Contract design and length will ensure full right of use ABP1 • ABP is a leading Norwegian industrial real estate company with a dedicated investment strategy focusing on mission critical real estate and infrastructure located in major Norwegian energy and maritime clusters 29 Harbour area ABP sale leaseback Total value Harbour sales value ~NOK 400m Repayment of bank loan linked to harbour area NOK -200m Cash effect for Andfjord ~NOK +200m Note: 1) ABP is owned by Fastighets AB Balder, the largest listed real estate company in the Nordics, listed on Nasdaq Stockholm with a balance sheet of around SEK 220 billion. For more info on ABP, go to www.abpre.no ~NOK 400M SALE OF INFRASTRUCTURE ASSET 2025
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~800 ~600 ~250 ~400 ~200 ~200 ~100 ~175 ~25 0 200 400 600 800 1000 1200 1400 1600 Uses Sources Fish logistics system Phase 2a capex • Phase 2a construction, optimizations across the system and buffer to amount to approximately NOK 1,375 million • Construction capex for Phase 2a to be 50% debt financed • Fish transportation system of NOK ~100m and water flow enhancements of NOK 250 million to increase production output by ~20% (accretive optimization capex-per-kg of NOK 88) • Preparing pools to be able to accommodate potential changes in regulations • Lease financing of NOK ~175 million on certain technical equipment • Immediate cash effect of NOK +200m from harbour sale and leaseback agreement • NOK 600 million of new equity through private placement of new shares • Working capital financing planned upon production start NOKm Concrete reinforcements / water flow Leased equipment Bank debt Harbour financing Lease financing Equity Sources and uses Buffer and other Uses Sources ~1,375 ~1,375 CONSTRUCTING GROWTH AND ENABLING PRODUCTION BOOST 2025
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31 Note: Ownerships as of 24th February 2025 About Jerónimo Martins: • Portugal-based international industry group that operates in food distribution, retail and agribusiness • 19th largest food retailer in Europe and 47th largest retailer in the world, regardless of sector (Deloitte, 2023) • Listed in Lisbon with market cap of EUR ~12 billion per January 2025 • Consolidated group sales of EUR 33.5 billion (2024) • Allocated shares for NOK 226 million in private placement 28.0% ownership About High Liner Foods: • North American processor and supplier of seafood • Established in 1899 with significant network in their region • Sales revenue of close to USD 1.1 billion in 2023 • Exploring opportunity for distribution of Andfjord Salmon’s fish to the North American market • Allocated shares for NOK 114 million in private placement About Eidsfjord Sjøfarm (Holmøy Havbruk): • Conventional salmon farmer based in Northern Norway • Eidsfjord Sjøfarm/Holmøy Havbruk produces around 30,000 tons of salmon annually based on conventional licenses in Nordland and Troms • Off-taker of post-smolt from Andfjord Salmon for nearby ocean-based farming locations • Allocated shares for NOK 15 million in private placement 4.5% ownership 5.4% ownership HIGHLY SUPPORTIVE SHAREHOLDER GROUP 2025
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2025 • Andfjord Salmon in brief • Quarterly highlights and subsequent events • Status Kvalnes build-out: Phase 1 • Kvalnes Phase 2: Plans and ambitions • Financials • SUMMARY AND OUTLOOK AGENDA
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SUMMARY AND OUTLOOK 2025 KVALNES PHASE 1 BUILD-OUT ON TRACK Waterways near completion, solid progress on four next pools and other workstreams OPTIMISING PRODUCTION LOGISTICS FOR +20% HIGHER VOLUMES Increased water flow capacity and optimized fish logistics to enable 20% higher through-put to give 23,700t (HOG + post-smolt) production capacity from current Kvalnes license INITIATING PHASE 2A CONSTRUCTION Initiating phase 2a with additional production volume of 6,000 t (HOG + post-smolt) RAISED FUNDS OF NOK 1.4 BN Through bank package, potential sale and leaseback agreement, plus successful private placement SMOLT RELEASE IN Q3 On track for smolt release in Q3 2025
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Q & A 2025
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35 APPENDIX 2025
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STATEMENT OF COMPREHENSIVE INCOME Q4 2024 All amounts in NOK 1,000 Statement of comprehensive income Q4 2024 Q4 2023 2024 2023 1.10 – 31.12 Unaudited 1.10 – 31.12 Unaudited 1.1 – 31.12 Unaudited 1.1 – 31.12 Operating income and expenses Revenue from contracts with customers 8 1 190 37 279 Other operating income 134 - 134 - Total operating income 142 1 324 37 279 Change in biological assets at cost and other inventories - - - -1 162 Cost of materials -101 -429 -375 -59 638 Fair value adjustments of biological assets - - - 25 707 Employee benefit expenses -5 377 -5 424 -21 683 -25 208 Depreciation and amortisation expenses -6 217 -6 305 -24 756 -24 904 Other operating expenses -7 679 -7 283 -25 450 -31 707 Total operating expenses -19 375 -19 441 -72 264 -116 902 Operating profit/loss -19 232 -19 440 -71 940 -79 634 Financial income and expenses Financial income 1 371 5 229 4 914 12 187 Net financial costs -215 -137 -837 -2 340 Net financial result 1 156 5 092 4 077 9 847 Profit/loss for the period -18 076 -14 348 -67 862 -69 787
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STATEMENT OF FINANCIAL POSITION Q4 2024 Assets 31.12.2024 - Unaudited 31.12.2023 Intangible assets 16 420 14 389 Property, plant & equipment 2 230 854 876 632 Right-of-use assets 13 060 17 640 Other non-current assets 139 113 Total non-current assets 2 260 473 908 774 Biological assets - - Other inventories 1 340 1 697 Trade and other receivables 44 - Other current assets 76 443 52 361 Cash and cash equivalents 59 196 250 032 Total current assets 137 023 304 090 Total assets 2 397 496 1 212 864 All amounts in NOK 1,000 Figures do not include an undrawn construction loan of NOK 40 million and an undrawn credit facility of NOK 20 million
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STATEMENT OF FINANCIAL POSITION Q4 2024 Equity and liabilities 31.12.2024 - Unaudited 31.12.2023 Total equity 1 254 355 993 688 Borrowings 832 309 59 959 Lease liabilities 6 163 9 340 Total non-current liabilities 838 472 69 299 Borrowings - 7 666 Lease liabilities 4 276 4 511 Trade payables 295 506 131 134 Other current liabilities 4 887 6 567 Total current liabilities 304 669 149 877 Total liabilities 1 143 141 219 176 Total equity and liabilities 2 397 496 1 212 864 All amounts in NOK 1,000
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STATEMENT OF CASH FLOWS Q4 2024 Statement of cash flows Q4 2024 Q4 2023 2024 2023 1.10-31.12 Unaudited 1.10-31.12 Unaudited 1.1 – 31.12 Unaudited 1.1 – 31.12 Net cash flow from operating activities -22 089 -17 247 -63 227 -29 148 Net cash flow from investing activities -300 057 -256 776 -1 205 173 -326 866 Net cash flow from financing activities 219 165 -2 164 1 077 564 523 136 Net change in cash and cash equivalents -102 982 -276 186 -190 836 167 121 All amounts in NOK 1,000
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NEXT QUARTERLY UPDATE: Q1 2025 presentation – 28 May 2025 2025 For more information on this presentation and its contents, please contact: Bjarne Martinsen, CFO Andfjord Salmon bjarne.martinsen@andfjord.no.