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Waiting for China,

What to do in the meantime?

Havbrukskonferansen

22 Nov 2011

Henning Beltestad

Lerøy Seafood Group ASA CEO

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Agenda

1. Q3 Lerøy Seafood Group ASA

2. Supply and demand

3. Status China

4. Potential in Asia

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Internal considerations Q3 2011 All figures in NOK mill

*) PTP = Pre-Tax Profit

Q3 - 11 Q3 - 10 Change YTD Q3 2011 YTD Q3 2010 Change 2010

Turnover 2 304 2 264 2 % 6 926 6 314 10 % 8 888

EBITDA 276 477 -42 % 1 293 1 204 7 % 1 806

EBIT bef adj biom 207 424 -51 % 1 093 1 047 4 % 1 586

PTP bef adj biom 190 431 -56 % 1 088 1 080 1 % 1 623

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Tveitnesvik, Hardanger

Rode Beheer B.V. •Urk, Netherlands

•87 employees

•Processing c.11.5’ GWT raw material, of which c.85% Atlantic salmon

•Smoked/marinated

•VAP/convenience

•Fillets/MAP

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Scotland

Norway

France

Portugal

Finland Sweden

Turkey

North America

China

Japan

Farming

Production

Sales & Distribution

Lerøy Seafood Group - Global organization

The

Netherlands

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Atlantic salmon – Supply in tons WFE

Figures as per 27.10.11

Source: Kontali

Change Change Change Change Change

2008 07-08 2009 08-09 2010 09-10 2011 10-11 2012 11-12

Norway 741 000 2,4 % 855 700 15,5 % 944 600 10,4 % 991 100 4,9 % 1 081 500 9,1 %

UK 136 400 1,1 % 144 800 6,2 % 141 800 -2,1 % 154 900 9,2 % 154 200 -0,5 %

Faroe Island 37 900 98,4 % 48 100 26,9 % 42 100 -12,5 % 56 700 34,7 % 63 500 12,0 %

Ireland 11 400 -25,5 % 14 800 29,8 % 17 800 20,3 % 16 000 -10,1 % 16 000 0,0 %

Total Europe 926 700 3,8 % 1 063 400 14,8 % 1 146 300 7,8 % 1 218 700 6,3 % 1 315 200 7,9 %

Chile 403 500 13,2 % 239 100 -40,7 % 129 500 -45,8 % 216 100 66,9 % 313 100 44,9 %

Canada 118 500 8,2 % 115 400 -2,6 % 118 000 2,3 % 110 300 -6,5 % 112 500 2,0 %

Australia 25 700 8,0 % 32 200 25,3 % 33 000 2,5 % 36 000 9,1 % 37 000 2,8 %

USA 17 000 38,2 % 16 400 -3,5 % 18 000 9,8 % 18 500 2,8 % 19 300 4,3 %

All others 2 400 -38,5 % 1 700 -29,2 % 1 400 -17,6 % 2 100 50,0 % 3 200 52,4 %

Total America 567 100 12,1 % 404 800 -28,6 % 299 900 -25,9 % 383 000 27,7 % 485 100 26,7 %

Total World-wide 1 493 800 6,8 % 1 468 200 -1,7 % 1 446 200 -1,5 % 1 601 700 10,8 % 1 800 300 12,4 %

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Market development for Atlantic Salmon from Norway YTD Q3 2010 vs YTD Q3 2011

”Others” is specified on the following slide

(Volume in tons WFE, value in thousand NOK)

Figures as per 25.10.11

Source: NSEC/Lerøy

Region 2010 YTD Q3 2011 YTD Q3 Chng % 2010 YTD AUG 2011 YTD AUG Chng %

EU 434 102 449 256 3,5 % 14 284 628 14 509 666 1,6 %

Others 93 642 107 614 14,9 % 3 065 667 3 323 158 8,4 %

Russia 64 722 73 132 13,0 % 1 982 676 2 134 052 7,6 %

USA 41 222 21 059 -48,9 % 1 716 833 906 932 -47,2 %

Japan 20 296 22 713 11,9 % 752 208 872 236 16,0 %

Totalt 653 985 673 775 3,0 % 21 802 013 21 746 045 -0,3 %

TONS (WFE) TNOK

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(Volume in tons WFE, value in thousand NOK)

Figures as per 25.10.11

Source: NSEC/Lerøy

Market development for Atlantic Salmon from Norway YTD Q3 2010 vs YTD Q3 2011

Country 2010 YTD Q3 2011 YTD Q3 Chng % 2010 YTD Q3 2011 YTD Q3 Chng %

HONG KONG 14 879 13 710 -7,9 % 566 632 463 814 -18,1 %

UKRANIE 12 903 14 628 13,4 % 240 119 279 121 16,2 %

VIETNAM 5 305 13 381 152,2 % 126 847 349 571 175,6 %

ISRAEL 5 592 9 101 62,8 % 205 577 316 588 54,0 %

TAIWAN 6 264 7 257 15,9 % 223 605 236 191 5,6 %

SOUTH KOREA 5 259 6 876 30,8 % 196 613 249 060 26,7 %

THAILAND 6 454 6 061 -6,1 % 208 398 185 534 -11,0 %

CHINA 9 933 5 229 -47,4 % 346 731 154 732 -55,4 %

SINGAPORE 3 520 4 157 18,1 % 134 237 146 930 9,5 %

TURKEY 2 933 3 581 22,1 % 102 397 114 542 11,9 %

SWITZERLAND 2 769 3 247 17,3 % 107 431 133 885 24,6 %

FHILIPPINE 1 347 2 808 108,4 % 27 201 56 541 107,9 %

BELARUS 2 412 2 434 0,9 % 57 841 62 871 8,7 %

CANADA 1 667 2 320 39,1 % 74 106 109 333 47,5 %

OTHER CONTRIES 12 405 12 824 3,4 % 447 933 464 443 3,7 %

Total "Others" 93 642 107 614 14,9 % 3 065 667 3 323 158 8,4 %

TONS (WFE) TNOK

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Integrated value chain

www.leroy.no

Waiting for China

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Norwegian Salmon export after Dec. 8, 2010

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Business as usual for seafood … except salmon

All shipments of Norwegian Salmon are tested for:

Florfenicol

Flumequine

Lincomycin

Spectinomycin

Oxytetracycline

Oxilinic Acid

Sealice

Anisakis

Crystal violet

Paralytic shellfish poisoning

Staphylococcus aureus

Vibrio parahaemolyticus

Vibrio cholerae

Listeria monocytogenes

Exports

reduced by

56% in 2011!

Growth

estimate in

normal times

- 30% above

last year.

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Our customers hit the hardest

• Can Norwegian exporters motivate Norwegian authorities?

•FHL, MoF, MoFA

•What is Norway doing to initiate dialog with China?

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Fossen launched in China

• Launched in October in high-end supermarkets

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Potential in Asia

Highlights:

•South-Korea:49 millions

•Taiwan: 23 millions

•Singapore: 5 millions

•Indonesia:237 millions

•Southeast-Asia: 447 million people (Indonesia, Philipines, Malaysia, Singapore, Taiwan, Thailand, Vietnam)

•India: 1,2 billion people

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KOREA: Local farmed halibut dominate the sahsimi segment with

Norwegian Salmon, but exports are still low. Only local smoked salmon.

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Potential in Asia

• Increasing middle class and economic growth

• Tourism increasing

• Huge differences between countries

• Consentration around large cities: Bangkok, Taipei, KL.

• From wetmarket to modern retail; important distribution channel for Norwegian Salmon

• Salmon present in hotels and in the growing number of sushi chains and high-end supermarkets

• Lack of knowledge about salmon and Norway

• Competition from Chile

• Sushi/sashimi is popular – advantage fresh Norwegian Salmon

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BRIC middle class increase by 800 million

, NSEC

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Incredible India

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India: world’s largest population in 2030

• 1,2 billion people

• 2030: no.1 population

• ¾ lives in rural areas

• Third largest economy in Asia and Oceania, after Japan and China

• Increasing middle class

• One of the poorest countries in the world

• Big differences – rich and poor

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Trade barrieres Norwegian Salmon

• 30% tariff on salmon, excluding whole salmon which was reduced to 12% in 2006

• EFTA negotiations ongoing

2006: Kronprinsparet besøkte India. Foto: EFF/Kjartan Mærstad

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Indias retail sector

Kilde: Planet Retail

•Modern retail outlets holds a small share of the grocery market

•One of the least developed retail markets in the world

•Supermarket is the dominating type at present

•Hypermarkets will increase (Dairy Farm, Metro Group) Food rite, SPAR, Walmart, Tesco and Carrefour

•Restrictions on foreign ownership, 100% foreign ownership only allowed in cash& carry segment

•Undeveloped distribution channels

2010 2015

CompanyNumber

Of

Outlets

Number

Of

OutletsFuture Group 437 923

Reliance Retail 604 1 169

Walmart 5 50

Aditya Birla 543 743

Metro Group 6 18

Grand Total 1 595 2 903

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