1

Morpol ASA

Salmon Demand in Europe John-Paul McGinley – Chief Operating Officer

Havbrukskonferansen, Oslo - 17 November 2011

2

AGENDA

• Introduction to Morpol

• Market update

• Outlook

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THE LEADING SALMON PROCESSOR IN THE WORLD

• Market leader in smoked salmon

• Consistent quality

• Innovation leader salmon VAP

• 72,000 MTs of raw material

processed in 2010

• Over 3,200 employees

• 22,000MT of salmon farming in UK

• 7,000MT of salmon farming in

Norway

(Million EUR)

Revenue CAGR of 33%, strong EBITDA margin

105 152

239 295

354 430

344

0

4

8

12

16

20

0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010 YTDQ3

2011

%

Revenue

EBITDA %

4

FULLY INTEGRATED BUSINESS PRESENT IN ALL MAIN MARKETS FOR SALMON

Waynor Trading

Purchasing office

Laurin Seafood

Production Site

MeridianSalmon

Salmon

Production

Laschinger Seafood

Sales office

Laschinger Seafood

Logistics and distribution

centre

Morpol France

Sales logistics and

distribution centre

Morpol

Main Production Site

Morpol Italia

Sales office

Morpol ASA

Corporate

Brookside Products

Production Site

Morpol UK

Sales Office

Morpol USA

Sales Office

Morpol Japan

Sales Office

Jøkelfjord Laks

Salmon Production

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MORPOL MISSION & CORE VALUES

• Mission

• .....to be the most efficient producer of value added salmon products, exceeding customer expectations with excellent products that are attractive and convenient for consumers and food service. Morpol will continuously innovate in product concept, equipment design and food safety to set the performance standards for the industry.

• Core values

• Quality

• Reliability

• Innovation

• Convenience

• Value for money

• Food safety

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OUR PRODUCTS

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MARKET UPDATE

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SALMON PRICES SPIKED IN 2009/2010

10

15

20

25

30

35

40

45

50

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

NO

K /

KG

NOS Price - Average all sizes

NOS Salmon Price

Linear (NOS SalmonPrice)

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SALMON PRICES CONTINUED DECLINE Q3 Prices averaged NOK 26/kg in quarter

Source: NOS

15

20

25

30

35

40

45

50

1 2 3 4 5 6 7 8 910

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

NO

K /

KG

NOS Salmon Price (Ex Oslo) - Average all sizes

2011

2010

2009

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SALMON IS NOW CHEAP RELATIVE TO OTHER PROTEINS

Source: DNB / IndexMundi

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BUT RETAIL PRICES REMAIN HIGH Monthly Average prices, Jan 2000 – Oct 2011

Source: Kontali

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GLOBAL PRODUCTION OUTLOOK Harvest volumes – Atlantic Salmon (tonnes WFE)

Source: Kontali Nov 18th 2011

2009 2010 Change 2011E Change 2012E Change

Norway 856 945 10% 987 4% 1074 9%

Chile 239 130 (46%) 227 75% 342 51%

UK 145 142 (2%) 157 11% 149 (5%)

Canada 115 118 2% 109 (8%) 112 3%

USA 16 18 10% 19 3% 19 4%

Faroe

Islands 48 42 (12%) 57 35% 64 12%

Australia 32 33 2% 36 9% 38 6%

Ireland 15 18 20% 16 (10%) 16 0%

Others 2 1 (18%) 2 50% 2 0%

Total 1 468 1 446 (1%) 1 608 11% 1815 13%

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INCREASED SUPPLY OF ATLANTIC SALMON IN 2011 AND 2012 • 2011 Worldwide supply +11%

• Increase of 1 percentage point since

previous estimate

• EU supply +7%

• USA supply +9%

• Increased supply in all main markets

• 2012 Worldwide supply +13%

766 737 795 872

340 318

373

432

281 257

283

324 78

100

115

135

40 34

41

53

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2009 2010 2011E 2012E

JAPAN:

RUSSIA:

USA:

ALL OTHERS:

EU:

Atlantic salmon supply

2009 – 2012E (000’s MT)

Source: Kontali Nov 18th 2011

+11%

-4%

+13%

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ESTIMATED QUARTERLY GROWTH 2012E CAGR: 2009 – 2012E PER QUARTER Y-o-Y growth is only part of the story due to low volumes in 2010

Source: Kontali Nov 18th 2011

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RETAIL SALES OF SALMON – YTD Q3 Consumers have reacted negatively to higher prices in salmon

Fresh Smoked

Volume

development

Price

development

Volume

development

Price

development

France -14.5% +5% -2.6% 6.2%

Germany -3% +8.4% -2.2% 6.9%

UK -7% +5.5% -6.4% +6.2 %

Source: Europanel / NSEC

YTD Q3 2011 versus YTD Q3 2010

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RETAIL SALES OF SALMON – Q3 Consumers have not yet got the full benefit of raw material price decreases

Fresh Smoked

Volume

development

Price

development

Volume

development

Price

development

France +5.7% -7.2% -8.8% 10.6%

Germany +34% -4.6% 4.2% 5.6%

UK -1% +1% -3.4% -3 %

Source: Europanel / NSEC

Q3 2011 versus Q3 2010

• Clear evidence in the quarter that recent price decreases have had a positive impact

on demand

• In Germany we have seen a price drop from Q2 2011 to Q3 2011

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GERMANY Retail sales of smoked salmon

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

MT

p.w

. 2008

2009

2010

2011

Retail price moved

from €2.99 to €3.19*

Retail price moved

from €3.19 to €2.99*

Retail price moved

from €2.99 to €2.69*

Source: Europanel / NSEC

*200g pack smoked salmon

Retail price moved

from €2.79 to €2.99*

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FRANCE Retail sales of smoked salmon

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

P01 P02 P03 P04 P05 P06 P07 P08 P09 P10 P11 P12 P13

MT

p.w

. 2008

2009

2010

2011

Source: Europanel / NSEC

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OUTLOOK

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THE WAY FORWARD Salmon fits with the global mega trends

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LONG TERM CONSUMPTION GROWTH REQUIRES INNOVATION

Sashimi slices Salmon Trout

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LONG TERM CONSUMPTION GROWTH REQUIRES INNOVATION

Pasta Salmon “Look, no brown meat!”

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LONG TERM CONSUMPTION GROWTH REQUIRES INNOVATION

Infusions Additions

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LONG TERM CONSUMPTION GROWTH REQUIRES INNOVATION

Paper packed Scottish organic salmon

Smoked Scottish salmon loin

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SALMON DEMAND WILL PICK UP IN EUROPE

Demand will pick up as lower prices reach the consumer

• Supply increases will keep raw material prices under pressure

• End product prices will have to come down

• Lower prices to end consumer

• Demand for (smoked) salmon expected to increase

• As an industry we must focus on the customer

• Stable quality

• Stable pricing

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THANK YOU

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APPENDIX

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WHAT IS DEMAND?

Elements of the Law of Demand

• The quantity of a well-defined good

or service that:

• People are willing and able to buy.

• During a particular period of time.

• Decreases/increases as the price of

that good or service rises/falls

• All other factors remain constant.