aker seafood

The preferred partner

part of the Aker group

Drivers of value creation in harvesting

June 9th, 2011

Thomas Farstad, CEO

Aker Seafoods ASA



Agenda

2

Aker Seafoods in brief

Value drivers in harvesting

Aker Seafoods Harvesting performance



Aker Seafoods consists of two businesses

Aker Seafoods ASA

Aker Seafoods

Harvesting Norway Seafoods

100 % ownership

11 trawlers

29.6 licenses

Processing

Marketing

Sales and

Distribution

3



Norway Seafoods

Aker Seafoods’ / Norway Seafoods’ position in the value chain

Harvesting

• Trawling in Norway

• Cod, Haddock and

Saithe

• Catch 2010: 51 000 tons

headed and gutted

• Fresh and frozen filet products

• Whitefish, salmon, trout

• Aker Seafoods covering 30 %

of raw materials in Norway

• Working primarily towards retail

• France and Scandinavia

© EFF: Tom Haga

Aker Seafoods details

• Primary processing • 9 in Norway • 1 in Denmark

• Secondary processing

• 1 in Norway

• 2 in Denmark

• 2 in France

4



Q1 2011: Improved operations in Harvesting and positive outlook

Increased prices for white fish

Improved operations in Aker Seafoods Harvesting

Reduced capacity utilization in Norway Seafoods

Reduced margins for Norway Seafoods

Increased remaining quotas for Harvesting in 2011 compared to Q1 2010

5



Aker Seafoods - financial key indicators – Q1 2011

Operating Revenues EBIT EBIT-margin (%)

780752

681702

786

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011

72

34

8 9

59

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011

9

4,5

1,2 1,3

7,5

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011

Earnings per share (NOK)

0,15

0,42 0,360,11

-0,12Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011

6



Agenda

7







8

EBIT

Harvested volume

EBIT / kg

• Quota sizes

• Utilization-rate

• Achieved prices

• Cost of harvesting

per kg

Key value drivers



Quota system

9

• Total allowable catch (TAC) per specie set annually by the

government

• International co-operation

• Researched based approach – ICES recommendation

• The quota year starts for most species on January 1st

• Norwegian TAC distributed to different types of vessel groups

• Trawler fleet; Conventional fleet

• Other purposes (research, recruitment, recreation, etc.)

• «Trålstigen» - Trawler fleet 28 – 33 % of available quota

• Quotas distributed within each vessel group based on the

number of existing licenses

• Quotas can be reallocated during the year



Trawler licenses

10

• A total of 87.8 licenses for trawling of Cod in Norway

• 1 license gives quotas for Cod, Haddock and Saithe north of 62

latitude

• Each vessel can hold up to 3 licenses

• Each vessel have 1 license to harvest Saithe south of 62 latitude

(Special vessels have 1.4 license)

• Vessels can also hold licenses for Greenland Halibut, Shrimp and

other permits

• Bi-catch (red fish, other species) also contributes to total value

creation



Source: The Norwegian Ministry of Fisheries

North East Arctic Cod: Catches increasing

0

200

400

600

800

1000

1200

1400

1600

1800

0

500

1000

1500

2000

2500

3000

3500

4000

45001

94

6

19

48

19

50

19

52

19

54

19

56

19

58

19

60

19

62

19

64

19

66

19

68

19

70

19

72

19

74

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

Cat

ch (

tho

usa

nd

to

n)

Bio

mas

s (t

ho

usa

nd

to

n)

Umoden Gytebestand Bpa Blim Fangst

Catch

level

11



Increase in Norwegian quotas for 2011

0 200 400 600 800

Saithe - S

Saithe - N

Haddock

Cod

Sum + 6 %

+ 19 %

+ 24 %

- 17 %

- 14 %

2010 vs. 2011 Quotas for Norwegian vessels (ktons)

Source: The Norwegian Ministry of Fisheries; Aker Seafoods analysis

658

310

147

150

49

All volumes in round weights

Increased by 10 000

tons on May 19th

12



Price drivers

Fresh vs. frozen landings

Price point for different species

Cod highest revenue / kg

Global supply and demand

Salt fish segment important

Cost drivers – direct expenses

Price influences salaries – revenue sharing system

Crew receives approx. 1/3 of total revenues

Bunker oil prices

Repair and maintenance

Other costs (gear, admin, insurance, etc.)

Depreciation

Fleet structure

Capacity vs. need (and vs. regulation)

Catch rates, peak capacity per vessel

Price and cost drivers

13


part of the Aker group 14

0

4

8

12

16

20

2005 2006 2007 2008 2009 2010 1Q11

NO

K /

kg

FERSK Hyse FRYS Hyse

0

5

10

15

20

25

30

2005 2006 2007 2008 2009 2010 1Q11

NO

K /

kg

FERSK Torsk FRYS Torsk

Prices 2005-2010

0

2

4

6

8

10

12

14

16

2005 2006 2007 2008 2009 2010 1Q11

NO

K /

kg

FERSK Sei FRYS Sei

Average

gap: 2.7 NOK / kg 4.1 NOK / kg 3.0 NOK / kg

Cod Haddock Saithe

Prices fresh and frozen – main species



Cost overview* - main categories

14 %

31 %

12 %

18 %

4 %

22 %

Bunker Oil

Personnel costs

Maintenance

Other costs

Administrative costs

EBITDA*Share of

revenue

Figures illustrate AKS Harvesting 2010 performance



Agenda

16






Total harvested volumes 2008 – 2011

Harvested volumes

Quota utilization 2011 MT (H/G weight)

Cod Haddock Saithe N Saithe S Other

Remaining Quotas 15 282 15 490 8 525 4 314

Catch Q1 7 160 1 703 4 453 871 461

0

5 000

10 000

15 000

20 000

25 000

2008 2009 2010 YTD 2010 YTD 2011

Total catch 41 011 46 780 51 254 16 616 14 647

0

10 000

20 000

30 000

40 000

50 000

60 000

Challenging availability for Saithe

Remaining quotas of Cod and

Haddock 5 500 tons higher than

Q1 2010

25 % increase in harvested volumes

2008-2010

Increased quotas for Cod and

Haddock in 2011

MT (H/G weight)

17



Quota utilization

18

0 % 50 % 100 %

Saithe S

Saithe N

Haddock

Cod

Total

0 % 50 % 100 % 0 % 50 % 100 %

2010 2009 2008

Quotas include all reallocations during actual year

• Total utilization from 64 – 72 %

• Cod quotas fully utilized

• Lost opportunity on Saithe



Achieved prices per quarter

Price development

Q1'10 Q2'10 Q3'10 Q4'10 Q1'11

Cod 16,0 15,3 15,5 18,3 18,4

Haddock 12,1 11,8 10,7 11,6 12,2

Saithe 11,4 10,9 11,7 12,3 13,4

6,08,0

10,012,014,016,018,020,022,024,0

Cod continuing at a level comparable to

Q4 2010

Haddock back to a level above Q1 2010

Very strong development for Saithe

Increasing prices for all species

following price drop linked to 2008

financial crisis

Significant increase for Saithe – strong

salt fish markets

Cod prices below 2008 level

2008 2009 2010 2011 YTD

Cod 22,9 15,7 16,4 18,4

Haddock 11,0 10,3 11,3 12,2

Saithe 8,2 8,7 11,6 13,4

6,08,0

10,012,014,016,018,020,022,024,0

NOK/KG NOK/KG

Achieved prices 2008 - 2011

19



Operating cost development

Bunker oil costs reduced from 2008 – increasing trend

Personnel cost increases with higher prices

Maintenance and deprecation level per kg stable – increasing in absolute

value

0,0

1,0

2,0

3,0

4,0

5,0

6,0

Bunker oil Personnel costs

Maintenance Other costs Depreciation

2008

2009

2010

2011

YTD

NOK/kg

Cost development 2008 - 2011

20



EBIT per kilo

1,51,3

2,0

3,9

0,0

1,0

2,0

3,0

4,0

5,0

2008 2009 2010 2011 YTD

EBIT per kilo 2008 - 2011 EBIT per kilo per quarter

3,5

1,7

0,70,9

3,9

0,0

1,0

2,0

3,0

4,0

5,0

2010 profitability per kilo significantly improved over 2008 and 2009

Increased prices

Improved profitability continuing in Q1 2011

NOK/kg NOK/kg

Non recurring items excluded. Overhead costs in 2008-2009 not distributed to segments (not included)

21



Outlook 2011

Increased profitability in the Harvesting segment is expected in 2011

Quota situation is positive for the remainder of 2011

• 5 500 tons additional quota of Cod and Haddock remaining

compared to Q1 2010

• Reallocation in May increases quota with 900 tons of Cod

Increased prices for white fish

Increased fuel costs

Increased quotas and renewal of trawler fleet enables more efficient

fisheries

• “Havtind” to start fishing in Q2 2011

• Evaluating technical and financial aspects of possible new

vessels

22

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