stronger for longer - fish poolfishpool.eu/wp-content/uploads/2016/11/abg-price...this document is...

This document is for the use of the recipient only and should not be copied or distributed to any other person or entity.

Please refer to important disclosures at the end of this presentation.

Stronger for longer

Fish Pool/Nasdaq Christmas Seminar

23 November 2016

Vidar Strat

[email protected]

Investment Research

mailto:[email protected]

This document is for the use of the recipient only and should not be copied or distributed to any other person or entity.

Please refer to important disclosures at the end of this presentation.

Stronger, but only for a little longer

Fish Pool/Nasdaq Christmas Seminar

23 November 2016

Vidar Strat

[email protected]

Investment Research

mailto:[email protected]

ABG Sundal Collier

2.6

3.2

4.0

3.13.1

3.5

4.7

4.0

3.5

5.0 4.7

4.5

6.5

6.4

5.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

EUR/kg

21.7

25.3

32.0

25.025.8

30.6

37.5

31.3

26.2

39.139.7

40.6

60.8

58.0

51.0

20

25

30

35

40

45

50

55

60

65

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

NOK/kg

Salmon price, Norway (NOK/gwe) Salmon price, Norway (EUR/gwe)

We were used to a cyclical salmon price

Source: ABG Sundal Collier, NASDAQ, Sjømat Norge, Bloomberg * YTD

ABG Sundal Collier

2.6

3.2

4.0

3.13.1

3.5

4.7

4.0

3.5

5.0 4.7

4.5

6.5

6.4

5.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

EUR/kg

21.7

25.3

32.0

25.025.8

30.6

37.5

31.3

26.2

39.139.7

40.6

60.8

58.0

51.0

20

25

30

35

40

45

50

55

60

65

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

NOK/kg


Then followed three years with stable prices


ABG Sundal Collier

2.6

3.2

4.0

3.13.1

3.5

4.7

4.0

3.5

5.0 4.7

4.5

6.5

6.4

5.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

EUR/kg

21.7

25.3

32.0

25.025.8

30.6

37.5

31.3

26.2

39.139.7

40.6

60.8

58.0

51.0

20

25

30

35

40

45

50

55

60

65

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

NOK/kg


Super strong salmon price in 2016


ABG Sundal Collier

2.6

3.2

4.0

3.13.1

3.5

4.7

4.0

3.5

5.0 4.7

4.5

6.5

6.4

5.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

EUR/kg

21.7

25.3

32.0

25.025.8

30.6

37.5

31.3

26.2

39.139.7

40.6

60.8

58.0

51.0

20

25

30

35

40

45

50

55

60

65

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

NOK/kg




+50% +45%

ABG Sundal Collier

2.6

3.2

4.0

3.13.1

3.5

4.7

4.0

3.5

5.0 4.7

4.5

6.5

6.4

5.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

EUR/kg

21.7

25.3

32.0

25.025.8

30.6

37.5

31.3

26.2

39.139.7

40.6

60.8

58.0

51.0

20

25

30

35

40

45

50

55

60

65

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

NOK/kg




With «The salmon price», we mean NASDAQ salmon price (all sizes) minus NOK 0.75/kg = Old FHL price

+50% +45%

ABG Sundal Collier

2.6

3.2

4.0

3.13.1

3.5

4.7

4.0

3.5

5.0 4.7

4.5

6.5

6.4

5.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

EUR/kg

21.7

25.3

32.0

25.025.8

30.6

37.5

31.3

26.2

39.139.7

40.6

60.8

58.0

51.0

20

25

30

35

40

45

50

55

60

65

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

NOK/kg




With «The salmon price», we mean NASDAQ salmon price (all sizes) minus NOK 0.75/kg = Old FHL price

+50% +45%

What awaits in 2017?

? ?

ABG Sundal Collier

2016 was special

Global supply of Atlantic salmon, 2016e

54%

22%

8%

7%4% 5%

Norway Chile UK Canada Faroes Others

ABG Sundal Collier

537 574 599

723 741

856945

1006

1183 11441199 1234

1179

6%7%

4%

21%

2%

16%

10% 6%

18%

-3%5%

3%-4%

0

200

400

600

800

1000

1200

1400

-20%

0%

20%

40%

60%

80%

100%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

e

Supply, Norway Supply growth, Norway

Growth y-o-y kTonnes

346385 369 356

403

239

130

221

364

468

583 598

486

23%11%

-4%

-4%

13%

71%65%

29% 24%

3%

-19%0

100

200

300

400

500

600

700

800

-20%

0%

20%

40%

60%

80%

100%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

e

Supply, Chile Supply growth, Chile


2016 was special – Low supply in main production regions


54%

22%

8%

7%4% 5%


Supply of Atlantic salmon, Norway

Supply of Atlantic salmon, Chile

ABG Sundal Collier



54%

22%

8%

7%4% 5%


Supply of Atlantic salmon, Global

1205 1249 12701397

1492 1468 14551633

2000 20412228

23222163

5%4%

2%

10%7%

-2% -1%

12%

22%

2%9%

4%

-7%

0

500

1,000

1,500

2,000

2,500

-20%

0%

20%

40%

60%

80%

100%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

e



ABG Sundal Collier



54%

22%

8%

7%4% 5%



1205 1249 12701397

1492 1468 14551633

2000 20412228

23222163

5%4%

2%

10%7%

-2% -1%

12%

22%

2%9%

4%

-7%

0

500

1,000

1,500

2,000

2,500

-20%

0%

20%

40%

60%

80%

100%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

e



Is this really a strong price reaction?

ABG Sundal Collier



54%

22%

8%

7%4% 5%



1205 1249 12701397

1492 1468 14551633

2000 20412228

23222163

5%4%

2%

10%7%

-2% -1%

12%

22%

2%9%

4%

-7%

0

500

1,000

1,500

2,000

2,500

-20%

0%

20%

40%

60%

80%

100%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

e



Is this really a strong price reaction?

I will soon revert to this question…

ABG Sundal Collier

Supply model – ChileSupply model - Norway

4%

11%

0%4%

2% 1% 2%-1%

3%

-3%

3%

0% 0%

3%

4%

0%-3%

1%

-6%

1%

6%

18%

-3%

5%3%

-4%

3%

-10%

-5%

0%

5%

10%

15%

20%

2011 2012 2013 2014 2015 2016e 2017e

Y-o-y growth

Estimation error H1 sea temp. impact (adj. for last year )

Fish due for harvest (end September) Actual/ABGSC est.

1205 1249 12701397

1492 1468 14551633

2000 20412228

23222163

2260

5%4%

2%

10%7%

-2% -1%

12%

22%

2%9%

4%

-7%

4%

0

500

1,000

1,500

2,000

2,500

-20%

0%

20%

40%

60%

80%

100%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

e

20

17

e

Global supply, ktonnes Global supply growth


What salmon supply to expect in 2017e?

Global supply, Atlantic Salmon

KPIs and annual summary

2013 2014 2015 2016e 2017e

Average harvest weight (WFE kg) 4.3 4.8 4.8 4.8 4.9

Number of smolts expected to be harvested (m) 140 153 135 143 132

Actual number of harvested fish (m) 109 122 124 102 109

Mortality and losses/wastage 22% 20% 8% 29% 17%

Smolt yield, fish harvested (WFE kg) 3.3 3.8 4.4 3.4 4.0

Harvest (WFE ktonnes) 468 587 598 486 531

29% 25% 2% -19% 9%

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%

Global supply change (Atl. salmon)

Nominal price change (EUR)

R2 = 0.81

What is the implication for the salmon price?

Nominal supply/salmon price regression (EUR)

Source: ABG Sundal Collier, Kontali, Sjømat Norge, NASDAQ, Bloomberg

2001-2011

?

?

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81

4% global supply growth = 10% price increase NOK 67/kg



2001-2011

?

?

+10%?2017e?

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81




2001-2011

?

?

+10%?

Is it really that simple?

2017e?

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81




2001-2011

?

?

+10%?2017e?

Is it really that simple?

Probably not

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81

We are obsessed with supply forecasts



2001-2011

?

?

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81

We are obsessed with supply forecasts, for good reasons



2001-2011

?

?

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81




2001-2011

?

?

What about demand?

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81



2001-2011

?

?


What about demand?

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81



2001-2011

?

?


What about demand?

What happened in 2012 and in 2013?

ABG Sundal Collier

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

Jan-90 Jan-93 Jan-96 Jan-99 Jan-02 Jan-05 Jan-08 Jan-11 Jan-14

50

100

150

200

250

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Index value

Salmon index Beef Poultry Pork

We have to study the salmon price relative to other proteins

0.4x

0.5x

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1990 1995 2000 2005 2010 2015

Ratio

High/low band Salmon vs. avg. meats

Salmon price/meat price ratio since 1990Salmon vs. other proteins (indexed since 2000)

Source: ABG Sundal Collier, Kontali, Kontali, IMF, FAO, Sjømat Norge, NASDAQ, Bloomberg

Salmon price/meat price ratio since 1990

ABG Sundal Collier

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x


50

100

150

200

250

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Index value


2012: Abnormal salmon price relative to other proteins

0.4x

0.5x

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1990 1995 2000 2005 2010 2015

Ratio





ABG Sundal Collier

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x


50

100

150

200

250

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Index value



0.4x

0.5x

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1990 1995 2000 2005 2010 2015

Ratio





Change in demand

ABG Sundal Collier

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x


50

100

150

200

250

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Index value



0.4x

0.5x

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1990 1995 2000 2005 2010 2015

Ratio





ABG Sundal Collier

0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x


50

100

150

200

250

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Index value



0.4x

0.5x

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1990 1995 2000 2005 2010 2015

Ratio




Change in demand?


ABG Sundal Collier

Selected quotes about demand from listed salmon farming companies’ Q3’16 quarterly material

– «Notwithstanding the substantial decline in supply, continued strong demand globally»

But demand is super strong, right?

ABG Sundal Collier



– «Strong salmon market driven by good demand and low supply growth»


ABG Sundal Collier




– «Together with a strong demand for salmon in nearly all markets, this has resulted in

a significant increase in the salmon prices during 2016»


ABG Sundal Collier






– «Experiencing continued good demand in core markets»

– «There is strong underlying demand for salmon and good prices are therefore epected

during the remaining months of 2016 and into 2017»

– «… strong growth in demand for seafood in general, and fresh seafood in a

consumer-friendly format in particular, gives grounds for optimism …»


ABG Sundal Collier






– «Experiencing continued good demand in core markets»

– «There is strong underlying demand for salmon and good prices are therefore epected

during the remaining months of 2016 and into 2017»

– «… strong growth in demand for seafood in general, and fresh seafood in a

consumer-friendly format in particular, gives grounds for optimism …»


Let’s look at the facts!

ABG Sundal Collier


1205 1249 12701397

1492 1468 14551633

2000 20412228

23222163

5%4%

2%

10%7%

-2% -1%

12%

22%

2%9%

4%

-7%

0

500

1,000

1,500

2,000

2,500

-20%

0%

20%

40%

60%

80%

100%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

eSupply, Norway Supply growth, Norway


6% supply growth in three years is not much (~2% per year)


?

+6%

2.6

3.2

4.0

3.13.1

3.5

4.7

4.0

3.5

5.0 4.7

4.5

6.5

6.4

5.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

EUR/kg

Salmon price, Norway (EUR/gwe)

+30%

ABG Sundal Collier

1205 1249 12701397

1492 1468 14551633

2000 20412228

23222163

5%4%

2%

10%7%

-2% -1%

12%

22%

2%9%

4%

-7%

0

500

1,000

1,500

2,000

2,500

-20%

0%

20%

40%

60%

80%

100%

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

e




6% supply growth in three years is not much (~2% per year)


?

+6%

2.6

3.2

4.0

3.13.1

3.5

4.7

4.0

3.5

5.0 4.7

4.5

6.5

6.4

5.6

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16* '17e '18e

EUR/kg

Salmon price, Norway (EUR/gwe)

+30%

+16% per year Fair price reaction = 55% increase

ABG Sundal Collier

50

100

150

200

250

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Index value


0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x



0.4x

0.5x

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1990 1995 2000 2005 2010 2015

Ratio





ABG Sundal Collier

50

100

150

200

250

Jan-

00

Jan-

01

Jan-

02

Jan-

03

Jan-

04

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

Index value


0.4x

0.6x

0.8x

1.0x

1.2x

1.4x

1.6x



0.4x

0.5x

0.6x

0.7x

0.8x

0.9x

1.0x

1.1x

1.2x

1.3x

1.4x

1990 1995 2000 2005 2010 2015

Ratio





So, what do I believe?

ABG Sundal Collier

The salmon price will stay stronger, but only for a little longer

Source: ABG Sundal Collier, NASDAQ, Sjømat Norge, Bloomberg

ABG Sundal Collier

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

1.8x

Q1'

07

Q3'

07

Q1'

08

Q3'

08

Q1'

09

Q3'

09

Q1'

10

Q3'

10

Q1'

11

Q3'

11

Q1'

12

Q3'

12

Q1'

13

Q3'

13

Q1'

14

Q3'

14

Q1'

15

Q3'

15

Q1'

16

Q3'

16

Q1'

17e

Q3'

17e

Salmon vs other meats (lhs) Global supply growth y-o-y (rhs, reversed)

481467507

585

509543

569607

535556

580

651

541503

532

587

518516

584

642

6%

-2%1%

4%6%

16%

12%

4%5%

2% 2%

7%

1%

-10%-8%

-10%

-4%

3%

10%9%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0

100

200

300

400

500

600

700

Global supply Global supply growth

Global supply of Atlantic Salmon (quarterly) Salmon/meat price ratio vs change in global supply



ABG Sundal Collier

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%0.6x

0.8x

1.0x

1.2x

1.4x

1.6x

1.8x

Q1'

07

Q3'

07

Q1'

08

Q3'

08

Q1'

09

Q3'

09

Q1'

10

Q3'

10

Q1'

11

Q3'

11

Q1'

12

Q3'

12

Q1'

13

Q3'

13

Q1'

14

Q3'

14

Q1'

15

Q3'

15

Q1'

16

Q3'

16

Q1'

17e

Q3'

17e

Salmon vs other meats (lhs) Global supply growth y-o-y (rhs, reversed)

481467507

585

509543

569607

535556

580

651

541503

532

587

518516

584

642

6%

-2%1%

4%6%

16%

12%

4%5%

2% 2%

7%

1%

-10%-8%

-10%

-4%

3%

10%9%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0

100

200

300

400

500

600

700

Global supply Global supply growth

Global supply of Atlantic Salmon (quarterly) Salmon/meat price ratio vs change in global supply



2017 = NOK 58/kg

ABG Sundal Collier

2012

2013

2014

2015

2016e

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

-10% -5% 0% 5% 10% 15% 20% 25%



R2 = 0.81

Our ’17e salmon price estimate is in line with ’15e reaction



2001-2011

-4%2017e

ABG Sundal Collier

NOK 58/kg is quite decent, right?


ABG Sundal Collier

67.061.5

50.5 53.058.0

74.5 72.0

62.3 62.267.8

-10%

-15%

-19%

-15% -14%

-20 %

-18 %

-16 %

-14 %

-12 %

-10 %

-8%

-6%

-4%

-2%

0%

0

10

20

30

40

50

60

70

80

Q1 Q2 Q3 Q4 2017e average

2017e

NOK/kg

ABGSCe Forward ABGSCe vs forward curve

NOK 58/kg is quite decent, right?



Yes, but expectations are even higher

ABG Sundal Collier

Concluding remarks

ABG Sundal Collier

Concluding remarks

I believe the salmon price in 2017 will be NOK 58/kg, down 6% from ‘16e at NOK 61.6/kg

ABG Sundal Collier

Concluding remarks


The salmon price will probably be higher in the first half of 2017 than in the second half of 2017

– I question the robustness in demand as

• the volume growth is slim (and limited opportunities to develop new markets)

• the salmon price is very high relative to other proteins

– I believe ~10% increase in supply in H2’17 will contribute to a correction in the salmon price relative to other

proteins

ABG Sundal Collier

Concluding remarks







proteins

The market will probably be disappointed

– Fish Pool forward curve is currently at NOK 67.8/kg (we are 14% below)

ABG Sundal Collier

Concluding remarks







proteins

The market will probably be disappointed

– Fish Pool forward curve is currently at NOK 67.8/kg (we are 14% below)

Risks to these conclusions: Biological challenges/surprises

– Example:

ABG Sundal Collier

DisclosuresAnalyst certification

I/We, Vidar Strat, the author(s) of this report, certify that not withstanding the existence of any such potential conflicts of interests referred to below, the views expressed in this report accurately reflect my/our

personal view about the companies and securities covered in this report. I/We further certify that I/we have not been, nor am/are or will be, receiving direct or indirect compensation related to the specific

recommendations or views contained in this report.

Analyst stock ratings definitions

BUY = We expect this stock’s total return to exceed the market’s expected total return by 5% or more over the next six months.

HOLD = We expect this stock’s total return to be in line with the market’s expected total return within a range of 4% over the next six months.

SELL = We expect this stock’s total return to underperform the market’s expected total return by 5% or more over the next six months.

TRADING BUY = We expect this stock’s total absolute return to exceed 10% over the next six weeks.

TRADING SELL = We expect this stock’s total absolute return to fall below negative 10% over the next six weeks.

Analyst valuation methods

When setting the individual ratings, ABG Sundal Collier assumes that a normal total absolute return (including dividends) for the market is 8% per annum, or 4% on a six-month basis. Therefore,

when we rate a stock a buy, we expect an absolute return of 9% or better over six months. We have more rigorous guidelines for trading buys and trading sells on small cap stocks; defined as having

a market capitalisation below USD 1.5 billion. For trading buys on small cap stocks, we must identify a potential absolute return of 15% or more over the next six weeks. This more rigorous

guideline reflects the fact that the low trading volume for small cap stocks inhibits the ability to trade them within a narrow price band.

ABG Sundal Collier analysts publish price targets for the stocks they cover. These price targets rely on various valuation methods. One of the most frequently used methods is the valuation of a

company by calculation of that company’s discounted cash flow (DCF). Another valuation method is the analysis of a company’s return on capital employed relative to its cost of capital. Finally, the

analysts may analyse various valuation multiples (e.g. the P/E multiples and the EV/EBITDA multiples) relative to global industry peers. In special cases, particularly for property companies and

investment companies, the ratio of price to net asset value is considered. Price targets are changed when earnings and cash flow forecasts are changed. They may also be changed when the

underlying value of a company’s assets changes (in the cases of investment companies, property companies or insurance companies) or when factors impacting the required rate of return change.

Stock price, company ratings and target price history

For the stock price, company ratings and target history of each company mentioned in this report for which ABG Sundal Collier provides coverage (unless it is initiating coverage), please refer

to the research section of our website located at www.abgsc.com.

ABG Sundal Collier

Important company specific disclosures

For company specific disclosures including employee, partner and ABGSC holdings, Corporate Finance services, market making, conflicts of interest of each company

mentioned in this report for which ABG Sundal Collier provides coverage (unless it is initiating coverage), please refer to the research section of our website located at

www.abgsc.com.

Stock price, company ratings and target price history

For company specific disclosures, stock price, company ratings and target history of each company mentioned in this report for which ABG Sundal Collier provides

coverage (unless it is initiating coverage), please refer to the research section of our website located at www.abgsc.com.

All prices are as of 22 November 2016, unless otherwise noted

Disclaimer

This document has been prepared by ABG Sundal Collier which is the marketing name referring to all or any of ABG Sundal Collier ASA, ABG Sundal Collier AB or ABG Sundal Collier Partners LLP and any of

their affiliated or associated companies and their directors, officers, representatives and employees. This document is provided solely for the information and use of professional investors, who are expected to make

their own investment decisions without undue reliance on this document. The information contained herein does not apply to, and should not be relied upon by, retail clients. This document is for distribution only

under such circumstances as may be permitted by applicable law. This document is a marketing communication that has been prepared by ABG Sundal Collier for information purposes only, is provided purely on a

factual basis and does not constitute investment research as described in European Union legislation. Any recommendation(s) in this publication is (are) has/have no regard to specific investment objectives and the

financial situation or needs of any specific recipient. The views expressed in this document may not reflect the views of the firm, which means that they may differ from the views of our fundamental research

analysts. For information on the opinions and estimates of our research analysts, please visit the research section of our website located at www.abgsc.com. All opinions herein reflect the judgment of the author of

the document on the date it was issued and are subject to change without notice. The material in this document has not been prepared in accordance with legal requirements designed to promote the independence of

investment research. ABG Sundal Collier accepts no liability whatsoever for any losses arising from any use of this document or its contents. This document is not to be used or considered as an offer to sell, or a

solicitation of an offer to buy. The information herein has been obtained from, and any opinions herein are based upon, sources believed reliable, but ABG Sundal Collier makes no representation as to its accuracy

or completeness and it should not be relied upon as such. Past performance is not indicative of future results. The compensation of persons contributing to this document is not based on specific investment banking

revenues, however, it is determined from the profitability of the ABG Sundal Collier Group, which includes earnings from investment banking operations and other business. Investors should assume that ABG

Sundal Collier is seeking or will seek investment banking or other business relationships with the companies in this report. From time to time, ABG Sundal Collier and its affiliates and any shareholders, directors,

officers or employees thereof may (I) have a position in, or otherwise be interested in, any securities directly or indirectly connected to the subject of this document, or (II) perform investment banking or other

services for, or solicit investment banking or other services from, a company mentioned herein. ABG Sundal Collier relies on information barriers to control the flow of information contained in one or more areas

of ABG Sundal Collier, into other areas, units, groups or affiliates of ABG Sundal Collier.

Norway: ABG Sundal Collier ASA is regulated by the Financial Supervisory Authority of Norway (Finanstilsynet); Sweden: ABG Sundal Collier AB is regulated by the Swedish Financial Supervisory Authority

(Finansinspektionen); UK: This document is a communication made, or approved for communication in the UK, by ABG Sundal Collier Partners LLP, authorised and regulated by the Financial Conduct Authority

in the conduct of its business. US: This document is being distributed in the United States in accordance with FINRA Rule 1050(f)(3)(B) by ABG Sundal Collier Inc., a FINRA member which accepts responsibility

for its content. Research analysts are not registered/qualified as research analysts with FINRA or the NYSE, and are not associated persons of ABG Sundal Collier Inc. and therefore not subject to FINRA Rule 2711

and NYSE Rule 472, the research analyst conflict rules. Research reports distributed in the U.S are intended solely for “major institutional investors,” as defined under Rule 15a-6 of the Securities Exchange Act of

1934. Each U.S major institutional investor that receives a copy of this document by its acceptance represents that it agrees it will not distribute this document to any other person. Any U.S. major institutional

investor receiving this document who wishes to effect transactions in any securities referred to herein should contact ABG Sundal Collier Inc., not its affiliates. Further information on the securities referred to

herein may be obtained from ABG Sundal Collier Inc., on request.

This document may not be reproduced, distributed or published by any recipient for any purpose whatsoever without the prior written express permission of ABG Sundal Collier.

Disclosure with respect to the company mentioned above can be found on our website: www.abgsc.com. Furthermore, if reference is made in this publication to other companies and ABG Sundal

Collier provides research coverage for those companies details regarding disclosures may also be found on our website: www.abgsc.com. Additional information is available upon request

© Copyright 2016 ABG Sundal Collier ASA

http://www.abgsc.com/



ABG Sundal Collier

ABGSC contact details

Norway

ABG Sundal Collier ASA

Pb. 1444 Vika

Munkedamsveien 45E, 7th floor

NO-0115 OSLO

Norway

Tel +47 22 01 60 00

Fax +47 22 01 60 60

Sweden

ABG Sundal Collier AB

Box 7269

Regeringsgatan 65, 5th floor

SE-103 89 STOCKHOLM

Sweden

Tel +46 8 566 28 600

Fax +46 8 566 28 601

USA

ABG Sundal Collier Inc.

850 Third Avenue, Suite 9-C

NEW YORK, NY 10022

USA

Tel +1 212 605 38 00

Fax +1 212 605 38 01

United Kingdom

ABG Sundal Collier Partners LLP.

St Martins Court, 5th floor

10 Paternoster Row

LONDON EC4M 7EJ

United Kingdom

Tel +44 207 905 56 00

Fax +44 207 905 56 01

Germany

ABG Sundal Collier, Frankfurt Branch

Schillerstrasse 2,

5. Obergeschoss

DE-60313 FRANKFURT / MAIN

Germany

Tel +49 69 96 86 96 0

Fax +49 69 96 86 96 99

Denmark

ABG Sundal Collier, Copenhagen Branch

Forbindelsesvej 12

DK-2100 COPENHAGEN K

Denmark

Tel +45 35 46 30 00

Fax +45 35 46 30 10

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