In this presentation we will go through the summary of the quarter. We will look into market and sales for Bakkafrost, and for the sale market in general.

We will look at the segment information, and we will have a financial update from Hogni Jakobsen. And then finally we will look for the outlook for the quarter and take questions from you.

In the second quarter Bakkafrost harvested more fish than last year. 25% more fish was harvested in the quarter.

In the Faroe Islands 17,551 tonnes compared with 12,941 tonnes last year. In Scotland, we harvested 10,634 tonnes compared with 7,937 tonnes last year.

Feed sales also increased 23% to 27,272 compared with 22,121 last year. Raw material sourcing for Havsbrún declined to 59,290 tonnes compared with 120,512 tonnes last year.

The revenues for the Group was very high, an indicator on a high activity in the quarter. I think this is the probably the largest revenue for Bakkafrost Group in the quarter DKK1.617 million in the second quarter, compared with 1,134,000,000 last year.

The operational EBIT amounted to 407.5 million compared with 181.9 million last year. The cash flow from operations was 532 million, compared with 111 last year, and Bakkafrost had positive results from all segments.

If you look at the summary of the quarter, we see that the farming margin for the farming and VAP combined in the Faroe Islands increased from 15.34 up to NOK26.93 per kilo. For Scotland, the margin also increased from 536 last year to 675 this year.

The VAP margin however dropped due to the market changes, the raw material price for raw materials from NOK1106 per kilo to NOK1.53. The VAP margin dropped slightly from 18.6% to 16.5%.

If we look into the market and sales, we see that our sales changed somewhat. We reduced the sale in Western Europe from 72% last year overall to 59% this year.

And the changes was moved or some volumes was moved to Asia and North America. We see that North America increased from 13% to 18%.

And we see that Asia dropped from 15% to 14%. But from Faroes those are drop in the fresh supply - sorry, our total supply from 19% to 13%.

And in Scotland from - it increases from 8% to 15%. Eastern Europe increases especially from the Faroe Islands, from 1% to 13%.

On the fresh sales we see also our drop in Western Europe from 66% to 56%. And this is mainly due to the changes in Eastern Europe, which goes up to 10% of the total or 16% of the Faroes sales.

The VAP share in this quarter was 28% compared with 50% last year, a big change. The salmon price in the quarter was bit up and down started around 70 in the beginning of the quarter dropped slightly, then up to 75.

And then by the end of the quarter - in the end of the 50s. So huge changes in the quarter, but the average price year-on-year increased NOK39.6 from NOK 59.36 to NOK 63.31 per kilo salmon.

On quarter-over-quarter NOK54.48 to NOK 63.31. On the next page, we see the development in harvested and sold quantity by region.

The development in harvested quantity of salmon into the markets show an increase of 1% in the quarter. Volumes dropped significantly in Chile from 158,000 to 135,000 tonnes.

This balanced out with the growth in other regions, especially Norway and U.K. And due to the big demand in the market, inventories were reduced by 27,000 tonnes in the quarter compared with an increase of 16,000 tonnes in the same period last year.

The difference in the movements of inventories is 43,000 tonnes, which is an indicator of a strong market. Average rate of harvested fish from two of the big suppliers Norway and Chile, Norway the average weight of harvested fish was 4.35 flat from last year, and in Chile 4.4 kilos.

So slightly less availability of large fish. If you look at the markets, we see that the supply into the markets increased 9%.

And this is the inventory movements which cost this difference. And we see that there's a strong development especially in U.S.

which increased 22%. That's an increase of 26,800 tonnes of salmon in this quarter.

Also, Europe which is the largest market increased 2%, Russia 46%. We see it especially by the end of the quarter and into the third quarter some indications of lockdown in Asia, which has hampered the market by the end of the quarter and into the third quarter.

We see also a rolled up to the Chinese market has a drop in this quarter by on 20%. If you look at the next slide, there's an overview of the expected development over the next couple of quarters.

We expect a very tight market going forward for next couple of quarters and overall drop of supply compared with last year, no growth and that's mainly due to the fact that in Chile, there is less availability of fish, less biomass and that will cause a reduction of supplies from Chile and even if European suppliers are increasing somewhat, the overall volume over the next couple of quarters and also into the first half of next year will not decreased but be on the negative side of change compared with the year before. So tight market going forward.

If you look at the segment, the information we see in the Faroe Islands, the volume in Faroe Islands increased to 36% from 12,941 tonnes to 17,561. The spread is 14% from North, 75% from West and 11% from South.

The fish in - for next year harvested in this quarter was 9,800 tonnes, that's the biggest single farm harvested this quarter came out 5.3 kilo with very good numbers. So this is a big positive impact on the numbers in this quarter.

In Scotland, the volume increased also 34% from 7,937 to 10,634 tonnes. This is spread on many farms more than 20 farms harvested.

The average weight in the Faroe Islands dropped from 5.4 to 4.9 kilo in the quarter. This is mainly due to the fact that we harvested 4.1 kilos in VAP started bit early to harvest due to the market conditions and also that we have a lot of fish from this site for the second half of the year with limited harvesting capacity in the factory.

The average weight in Scotland was more or less flat or 100 grand up from 4.4 to 4.5 kilos. The small transfer in the quarter in Faroes from 2.9 to 3.2 million versus 8% up in Scotland, from 2.8 to 2.1, 27% down.

The average rate in the Faroes increased significantly 48% from 286 gram to 422 gram in Scotland, flat from 76 gram to 77 gram. And the temperature in the waters in the Faroes were more or less in line with last year slightly down.

If you look at the margin, we see that especially in Faroes those are huge increase from 86 million to 343 million, 300% up. The margin was 36% compared with 15%, and the revenue 67% up from 574 million to 961 million.

And this is of course, mainly due to the fact that the price increased significantly. In Scotland, also increased margin 84% up to NOK53 million compared to NOK29 million, and the margin up 9%, the revenue up to NOK559 million.

On the next page, there is overview on the performance in the regions. And on the Faroe Islands, the key performance indicators have developed good in the quarter.

The TGC which is the growth on fish was very, very good 3.2, an average for all harvested fish, which is more or less the same as last year but stable on a good high level. The FCR which is Feed Conversion Rate improved compared with last year from 1.1 down to 1.03 on average for all harvested fish, which is very, very good.

And the cost in the Faroe Islands came slightly down around NOK1 which is the pure farmer cost from last year. We've had the fish 18,500 tonne in the quarter feed us which is 24% up compared with the same quarter last year.

So very good biological development in the quarter with strong key performing indicators here in the Faroe Islands. In Scotland, we still struggle with small smolt weights.

It will take time for us to increase the weight of smolts. But if we look at the same key performing indicators like growth, feed conversion rates, et cetera, we see that there's some improvements 5% improvement on growth compared with last year.

The TGC is 2.64. The FCR improved 4% down to 1.11 which is very good.

The cost dropped - the farmer cost dropped slightly NOK25 per kilo. The overall cost dropped more, but the farmer cost was 35 or down.

The feed consumption in Scotland was down mainly due to the fact that we have reduced the biomass by the end of the quarter. So down by 15%.

We are good aligned with our plans with integration. We are now using all the feed from - not all but the majority of the feed is from Havsbrún, which is of course also - which is creating a good operation both with Havsbrún now and also for unharvested fish.

And we are aligning and simplifying systems structure practices to enable best practice. We are rolling out the so called fresh approach integration strategy, which will simplify and strengthen our operations.

And I'm confident that the smarter farming model that we try to implement will - or next year's show significant improvements in the operations in Scotland. If you look at the VAP, value added products, we see lower activity.

There were high prices on fishermen, and we used this opportunity to improve the overall value for the company. So the revenues in the quarter was down compared with last year 259 million compared with 308.

The volumes were 33% down, compared with 16% down on revenues. The EBIT was 89% down from NOK49 million to NOK5 million.

The operational EBITDA margin was NOK1.13 per kilo and the share of raw materials used for VAP was 28% compared with 50 last year. We look at the Faroes segment, we see improved margin of NOK57 million and a margin on 17%.

So, this is mainly due to the increased activity in the feed division. Because we see that the raw material source for fishmeal is significantly down 52% down on the external fish mill salt and this is mainly for [indiscernible] is slightly up 10% up to 2,961 tonnes.

On next page overview on the feed, we see increase of 22% up to 27,272 tonnes. The majority of the feed is sold internally, the external feed sales decreased from 5,952 tonnes down to 856 tonnes.

Obviously, the market locations or raw materials, slightly increase in raw material prices compared with the quarters before. And now, Hogni will go through the financials on the ESG.

Thank you, Johan. As today and has mentioned, the positive development on the prices had a positive impact on our financials, but also the volume growth that we have seen in this quarter.

So revenue increased by 43% to 1,618,000,000 in this quarter, and the operational EBIT increased by 224% and amounted to 407 million in this quarter and the main contribution is the Faroese farming segment which has tripled its operational EBIT, but also a strong increase in the Scottish farming segment and some increase in the VAP segment as well. The VAP segment was however, lower on operational EBIT compared to the same quarter last year.

For our value adjustments in this quarter were lower than in Q2 last year. It amounted to 176 million and the main drivers behind that are changes in the size distribution and the biomass at sea, where we especially in Scotland have a slightly higher time to harvest for the biomass.

We paid NOK41 million in this quarter in revenue tax, and NOK102 million in corporate taxes. And the profit after tax was reduced from 472 million to 428 million.

Operating EBIT margins increased from 16% to 25.2%. And this was amongst our better quarters for many years.

It's one of the strongest quarters that we have had over the past five years in terms of operational EBIT. And the best second quarter that we have had since 2018.

For the half year - the first half year of this year, the total operational EBIT amounted to 631 million and adjusted earnings per share accumulated in the first half of the year amounted to NOK7.75 kroner. If we look at our balance sheet which is still very strong, our intangible assets amount to slightly less than 4.5 billion, and our property plant and equipment increased by 329 million, and amount to 4,550,000,000.

Our biological assets amount to slightly less of 2.5 billion and inventory increased by 33 million to 809 million in this quarter. Receivables have increased by 129 millions to 619 million.

Cash and cash equivalents have also increased by 86 million and now amount to 553 million. Equity is slightly less than 9.4 billion, an increase by 667 million in this quarter, and equity ratio is 67%.

Cash flow from operations in this quarter increased compared to last - the same quarter last year from 111 million to 532 million. And cash flow from investments were minus 245 million and cash flow from financing minus 107 million.

Net cash at the end of this quarter were 179 million. However, if we look at the net interest bearing debt, we have reduced the net interest bearing debt by 36 million throughout the quarter.

We have made investments of 245 million and paid dividends also in this quarter, amounting to 216 million. But our cash flow from operating activities amounted to minus 400 or have reduced the net interest bearing debt with 448 million.

And the same goes with changes in working capital, which has reduced with further 49 million, so that we end up with a net interest bearing debt of 1,000,000,903 by the end of the quarter. We still have undrawn - significant undrawn credit facilities.

Our bank facilities are the same as the ones that we secured by the end of 2019. And we have undrawn credit facilities amounting to 1,523,000,000 by the end of this quarter.

And on top of that, we have an accordion option of 150 million. And finally from me some main events on ESG that has occurred during this quarter.

We have now published our fourth sustainability report. And what makes this report special compared to previously is that it now includes this Scottish Salmon Company as well so that we can increase the transparency across the entire group and provide better - a better picture of how we progress on the ESG agenda as a Group.

In this quarter, we also made some improvements in regards to the capacity that we have for - in the farming service operation in Scotland, as we acquired a sister ship of our farming supply ship here in the Faroese, Martin which we use for mechanical de-licing. We bought, excuse me, - we acquired the sister ship and it is intended to be put into operation in in Scotland and is being equipped now with a new technology for mechanical de-licing which we have high hopes for which we expect can improve the fish welfare even more and reduce mortality when we do mechanical sea lice treatment in Scotland.

The ship is called [indiscernible] and will be deployed in operation in Scotland soon. And finally, Havsbrún was recognized in this quarter with best agricultural practice certification VAP, which is very important now, where we supply increasing volumes of feed to our Scottish operation.

In Scotland, we are - forced our VAP certified as the first European salmon farmer. So having Havsbrún and VAP certified is an important step forward.

And with that, I will leave the outlook to you Johan.

The outlook for the global harvest of salmon in the market is very tight. We expect reduction of global harvest in the third quarter and also in the second half of 2020.

So the market is expected to be tight, especially from the supply side. When we look at our own operations, we expect 106,000 tonnes of total harvest for Bakkafrost Group same as we have announced earlier.

We expect to release 14.5 million smolts in the Faroese and 11 million in Scotland. On contracts, 31% of our sales for this year have been contracted.

We have a strategy to allocate around 40% of expected volumes on contracts at any time. And in Havsbrún, we expect to sell 120,000 tonnes of feed.

It might be slightly more depending on the growth in the second half of the year. But it has been good all the summer.

The business development for Bakkafrost is focused on the growth strategy. The focus is to reduce the risk to secure healthy and sustainable growth for the group.

And we see a lot of possibilities in our continuous journey. And we will focus on this - on our Capital Market Day - on our upcoming Capital Market Day on the 14th of September, where we will look into our plants until 2026 and go through the different options, especially with focus on these plans and investments and how we can grow our operations sustainably and reduce our risk.

So that will be the main agenda on the Capital Market Day which will be shortly. So with this, I will open up for questions.

You have to unmute your microphone if - and then just go ahead with your question.

Alexander Aukner from DNB. In terms of the small transfer, you're transferring substantially larger smolt into the sea at the moment, could you make some comments on how that the initial reaction has been in terms of sea growth?

Yes, as you know we have increased our capacity a large smolt significantly over the last couple of years. And we see that now, in our numbers.

We have in this quarter nearly doubled the weight of the smolt. Some of the large groups that were transferred last year were harvested last one year after transfer.

So, we have - so far we have seen a positive impact on mortality, positive impact on growth TTC and also a positive impact on fee commercial rate. So, so far, there has been a positive impact on all our KPIs and as expected reduction of the risk of our operations.

Okay, thank you. You also made some comments in terms of your highest pay markets at the moment?

Well, as you know, we try to differentiate our products and produce assignment which is with higher - not with the lowest feed costs, but highest quality of raw materials in the feed. And we try to need to - market this fish as a premium in the market.

And in general, we obtained a premium in the market, but of course, it depends on the market conditions, how those are, and especially when, during the COVID-19, this has had an impact. This was a lower impact in second quarter.

And as the COVID-19, our effects are less, we see a positive impact on our availability to obtain a larger value on our sales in all markets.

Okay, thank you. So final question from me, could you comment on the working capital buildup in the second half of the year?

Okay. Well, we are building up some more biomass due to the fact that the fish grows more and we have more fish in the water.

So that's where we are building more working capital, especially.

Right, thank you.

Anyone else?

Chris Nordby speaking Kepler Cheuvreux. I have a quick question on Scotland.

In Q3 last year, you recorded extraordinary mortalities. How's the autumn looking right now for you in Scotland and how the cost side looking there you think over the Q3, Q4 period?

Well this year, we have not seen any of these issues, as we saw last year, hopefully, everything will be calm going forward, so of course that's positive. The big change in Scotland will be when we are releasing larger smolts, that is the big driver on reduction of costs for our operations in Scotland and that will take some time.

We have however now stocked some fish in our new RAS systems in Applecross. So there's some small improvements going to be seen next year.

But the big change will be when we have the big capacity up running. We have a broken ground now in Scotland for the RAS development.

So that capacity will start to be available in one and a half years from now. So it will take another three years, three to four years before we will see the big game changer in Scotland.

So the costs in general are higher in Scotland. We focus on making - taking the low hanging fruits so some small changes but not a big impact before these three to four years.

Thank you. And on transport costs, you just recalled in your presentation that they are still higher than pre-COVID terms.

Are you - can you do something on sort of improving them medium term or what are you thinking regarding this year, I saw the news regarding chartering in an airplane and these things?

Well, the costs on air transport are still high. The initiative that you refer to on the airplane is mainly that as we have, as you know we have operations, our own operations in U.S.

We see significant possibility to improve the freshness of the product by harvesting fish today, supplying that fish into the market already tomorrow. And even with slightly lower costs than today.

So the impact will be mainly on, we think that instead of supplying three days old fish, we can supply 24 hours old fish, so more or less close to live fish into the market. So that that's quite important, we see also that was this initiative, we can reduce the CO2 impact from the air transport we can half the CO2 impact.

Because as we have our operations on the other side, we can reduce the ice that we transport, we can reduce traveling from Faroes by ship and by truck. So, we have calculated close to 50% reduction on CO2 at less costs, and fresher fish.

So this is a project that we hope will have many different aspects. And it works especially for the East Coast of the U.S.

as we have our operations there, and can manage the whole value chain with our own trucks and delivery directly to customers.

Thank you very much.

Any other question.

Martin Kaland from ABG Sundal Collier. It seems that it's going in or you mentioned the improvements and potential for improvements in Scotland, but it also seems that the operations and performance at the Faroese is better than a year ago.

Could you - could this leave some potential for lower costs in the second half of this year or are there other cost drivers moving in the other direction?

Yes, in Faroes we are in good development with low fee conversion rate low - and good growth those numbers are quite good. We see also a potential that we - over the next year or two as we see - as we will see the big effect from large smolt that we can reduce the cost further as the risk picture in general will improve.

That should have some positive impact. But in general, we have good numbers now in Faroes.

We had also some issues last year as you remember we lost some fish. This year, we have not had any kind of incidents and of course we should not.

We have in [indiscernible] we have upgraded and installed totally new equipment. And we have probably done the strongest farm that we have ever seen in order to mitigate that risk.

So that should move things in the right directions, but I would recommend that if you keep the same numbers on the cost side in your calculations.

Sounds good. And then could you please add some details on the new mechanical de-licing system that you are installing on the new supply vessel?

Is it entirely new or have you been using this system at the Faroe Islands?

We are using it in the Faroe Islands as well. So we are using same technology in this boat as what we are doing in Faroes, but this is actually also used in Scotland.

So we have results, and people are trained for this both in Faroes and in Scotland, but we need more capacity. And we see also that in general, when we have our own people handling this kind of complex equipment, it is important that we use best practice and also the knowledge that we get from one farm to another.

And we hope that that can have a positive impact also in Scotland, when we will start using our own boats instead of only relying on external boats.

Okay, thank you.

Any other question?

Alex Jones from Bank of America. Could you maybe comment on the feed division and how you think about the margin outlook into the second half of the year?

Thank you.

Yes, I think that the biggest change right now in the feed division is that we see a significant increase of the operation and this is mainly due to the upscaling of production to our Scottish operation. As you remember, we had contracts in Scotland that we had to respect and now these contracts are fulfilled.

So now, we see significant uplift in the production of Havsbrún to Scotland and that has a positive impact on the cost because the capacity utilization is much higher. So, that is in general positive for the cost side in the feeder division on the utilization of the fixed costs.

The market outlook for raw materials in general are tight. It seems like costs are still high on raw materials.

So at the moment, our best guess is that they will remain on the same level on the same high level as they are at the moment, and our intention at the moment is to remain with the same recipe that we are using for our salmon both in Faroe Islands and in Scotland the same with a high utilization - that with inclusion of marine raw materials, because this is one of the fundamental drivers for the superior quality fish that we provide with high omega 3 and are very healthy ingredients of raw materials from marine sources. Is that okay, Alex or anything else you…

Yes, maybe just one more question on the farming weights in the Faroes in the second half of the year, do you expect to go back towards more normal levels or should we expect them to stay a bit lower than usual?

Well right now we have slightly lower weights. We have a bigger biomass at the moment and we are increasing the capacity here in the processing site in [indiscernible] right now as we speak.

So it's important that we also have some contingency on the processing site. So we are doing that at the moment.

The markets in the second quarter were strong. So we use that.

But there will be - there will be at least here in the Faroes, there will be at least one site that we will harvest at lower average weight in the third quarter, which will impact the average weight in the Faroe Islands. But our strategy remains the same that we want to produce large fish and there will be larger fish from other sites.

So it is a bit up and down. And if you look at the quarters, there is a slight variation in the average weight.

So it's not a change of strategy. It's just that we have to adapt to the market conditions and of course, the actual picture in the processing in our operations.

Okay, thank you.

Okay. Very good.

Is there any final question or are we good. Very good.

Thank you very much.