Good morning and welcome to the Fourth Quarter Presentation for 2021 for Bakkafrost. We will present the summary of the quarter, a bit of the sales prices, segment information, financials, and then a bit about the markets and outlook for the company and the industry.

In this quarter, Bakkafrost harvested record high volumes in the Faroe Islands both in this quarter, but also for the full year. We harvested 20,694 tons in the Faroe Islands compared with 15,957 tons last year.

In Scotland, we harvested 5,122 tons compared with 9,305 tons, the year before. The feed sales were 32,527 tons compared with 30,885 tons the year before.

This was also record high sales for the fourth quarter for our Feed segment and also record high for the full year. The market balance seems to be strong and is very tight supply outlook for the summer markets.

In this quarter, our raw material purchase was 27,322 tons compared with 71,887 tons, the year before. The revenues amounted to DKK 1,488 million compared with DKK 1,139 million the year before.

We saw strong increased prices and very strong demand. The operational EBIT for the group amounted to DKK 120 million compared with DKK 86 million, the year before.

The margin was hampered by biological issues for the group. The cash flow from operations amounted to DKK 189 million in the quarter compared with minus DKK 107 million the year before.

We had positive EBIT for all segments except Scotland, the Feed segment high volumes and EBITDA Farming Faroes more than tripled the margin compared with the year before. The Board of Directors will propose dividend on the Annual General Meeting of DKK 5.14 per year.

The operational EBIT for the Faroe Islands more than tripled from NOK 5.66 up to NOK 18.29 in this quarter. In Scotland, the margin was very poor, developed from minus NOK 8.4 down to minus NOK 55.95 per kilo.

The VAP segment in Faroes had a margin of NOK 5.71 compared with NOK 17.31 the year before. And the EBITDA margin from our fleet operation was strong 20.6% compared with 13.4%, the year before.

If we go to the markets or the sales, and look at the sales price in the quarter, we see a strong development. The quarterly sales price in average for the size 4-5 was 60.71, which is NOK 16.48 up from the year before.

And this is in a quarter where the supply increased around 5%. So indicating a strong market and we see also the development continued in the first quarter '22 with all time high summer prices over the last weeks.

If you go into the segment information, Bakkafrost Faroe Islands delivered a record high volume from our farming operations. The volume increased 30% from 15,957 tons to 20,694 tons, full year growth of 33% from 67,200 tons compared with 50,700 tons, the year before.

The average weight dropped 10% from 5.4 kilos to 4.9 kilos in the quarter. This was in the Farming segment North, the average weight was 4.5 kilos.

In Kunoyarnes the average weight was 4.9 kilos. Kunoyarnes delivered 28% of the volume in the quarter.

Lambavík delivered 8% at 4.6 kilos. But the big miss is in Hvannasund, which we had harvested in the third quarter but also continued for the first two weeks in October at 3.3 kilos.

And this was the synchronization of so A-72 and A-73 where two sites were synchronized in order to have a better operation going forward. On both sites, we're stocked again in December with smolt.

And we expect that this - the cost of this synchronization will eventually be paid back with a stronger performance from these two sites, going forward, already starting to harvest by the end of this year or in the first quarter '23. 43% of the harvest in this quarter was from [indiscernible], where average weight was 5.4 kilo, this is in the West, and 12% of the harvest in the quarter was from the South Island at 5.8 kilo on average from Hov A18.

Bakkafrost Scotland has been through a very, very tough period. Average weight in the fourth quarter dropped 20% from 3.7 kilo to 3.0 kilo in average.

Volume dropped 45% in the fourth quarter to 5,122 tons versus 9,300 tons last year. Full year, dropped 15% in volume 29,700 tons versus 35,000 tons, the year before.

The smolt transfer in the Faroe Islands was 5.1 million pieces versus 5.5 million pieces the year before, 8% down. Average weight of transferred smolt increased 8% from 343 gram to 371 gram in the quarter, all time high.

For full year, 14.4 million smolt were released with an average weight of 382 gram versus 14.3 million at 318 gram the year before and this will eventually reduce the production time. In Scotland, 4.2 million smolt were released in the quarter at 105 gram which is also all time high in Scotland, first time about 100 gram.

Sea water temperatures in the Faroe Islands were 0.3 degrees higher in the fourth quarter, this year compared with the year before. The revenues in the Faroes Farming division increased 84% from DKK 600 million in the fourth quarter '20 to DKK 1,111 million in the fourth quarter '21.

Operational margin increased 351% from DKK 63 million to DKK 282 million, mainly driven by good sales price achievement, which was about NOK 16 per kilo for the 4-5 kilo fish. However, some challenges in the quarter prevented the division from excellent numbers.

This was mainly due to two causes. One was the synchronization of Haraldssund and Vioareioi, which cost harvest of smaller fish around 10% of the volume in the quarter.

And the second was the treatment vessel Martin was which was delayed in the upgrade delivery in the summer, which caused the sea lice situation to become more severe than planned and causing higher mortalities from treatments. In Scotland, the revenues dropped 44% from DKK 389 million to DKK 218 million in the quarter.

Operational margin dropped 296% from minus DKK 54 million to minus DKK 214 million, driven by continued issues on seven sites from mass mortality that started in the third quarter impacted with PD, AGD on micro jellyfish. We are disappointed about the numbers on the development in Scotland, but confident that we will do much better long term as our investments and updated procedures will start to make impact.

We have already seen positive impacts from Loch Striven and Loch Fyne with our new operational procedures. The operational performance in the Faroe Islands was good, not excellent, in the fourth quarter.

The margin increased from NOK 5.66 to NOK 1829. In Scotland, the performance was extremely much affected by the exceptional mass mortality event and issues on totally seven sites, which has caused margin to drop from minus NOK 8.41 to minus NOK 55.95 in the quarter.

There are still logistical impacts from COVID-19, which affects costs of transportation and availability negatively. In the fourth quarter, farming operations were impacted in the Faroe Islands with DKK 45 million DKK of exceptional mortality.

And this was treatment vessel Martin upgrade delay in the summer, which caused higher pressure on sea lice treatment and higher mortality. The exceptional mortality is mainly driven by the treatment of ready to harvest fish.

Our capacity in 2022 will be better and the planning process will be much better. This will be both with our present equipment, upgrades and procedures and also with the new freshwater possibilities with our new vessel Bakkafossur which we will have in operation in the summer, and will be positive for our fish welfare.

Impact from exceptional mortality in the Faroe Islands was NOK 2.93 per kilo and reduced the operational average from NOK 21.22 per kilo to NOK 18.29 per kilo. The impacts were on three sites, A-12 Kunoyarnes, A-13 Borðoyarvík and A-63 Árnafjørðu.

The development into the first quarter has not continued with the same numbers. So we expect this to be better in 2022.

In Scotland, we saw in the late summer on the west coast of Scotland, which faced an unprecedented challenge from blooms, which was related to micro-jellyfish. This was alongside a prolonged period of warming temperatures in some loch systems, which caused significant challenges to our operations.

The exceptional mortality amounted to DKK 179 million in this quarter, corresponding to NOK 47 per kilo, significant mortalities of jellyfish in the second half of 2021 in all areas. Gill health issues on top of which there were blooms, which caused mass mortality.

The implications were widely spread in all regions and has never before been seen this kind of issues, so, devastating to the farming operation in Scotland. And we see that it is crucial to improve the strength and quality of our operations.

We are going to see results from improved quality of our operations as we go forward. In the short-term we'll, implementing early warning indicators give us some better position.

More capacity is the main strategy to maintain strong biology. Gradually we will see robust large smolt, we will see reduced time in the sea and reduced need for mechanical treatments.

In areas where we have recently stocked under the new operational strategy, we are now seeing fundamental improvements. This includes Loch Striven, Loch Fyne, Arran, Harris, which are all outperforming historical experience.

All new stocking in Scotland is under our new farming strategy. And we have secured additional freshwater capacity resources directly with fleet owners vastly increasing our capacity going forward.

Our VAP segment sold slightly less volumes in the fourth quarter versus the year before, 1% down from 6,688 tons to 6,603 tons. However, the revenues increased 25% from DKK 287 million to all time high revenues, DKK 359 million.

The operational EBIT dropped from DKK 80 million to DKK 28 million due to increase raw material costs as internal buying price traded in line with spot price development from farm increased. The EBIT per kilo dropped from NOK 17.31 to NOK 5.71 in this quarter.

31% of the volume in the quarter was sold internally in our VAP operations, down from 43% in the same quarter the year before. Our Feed department generated all time high revenues of DKK 1,659 million for the full year versus DKK 1.4 billion the year before and in the four quarter DKK 433 million compared with DKK 359 million, the year before.

EBITDA increased 86% to DKK 89 million in the quarter versus DKK 48 million the year before. The margin increased from 13% to 21% in the quarter.

Fish feed sold was also record high for the fourth quarter and for the full year, which was 128,489 tons. Raw material sourced were low in the quarter, 27,000 tons versus 72,000, the quarter year before.

For the full year, raw material sourcing was second low of all years since 2012 but the first quarter '22 is all time high. The reason for the blue whiting starting - the season of the blue whiting started later this season, which caused a delay in start off of catch.

Fish feed sold in the fourth quarter was record high 32,527 tons, 5% up from last year. Now almost all feed is used internally which makes our feed operation more like a cost center.

Fishmeal and fish oil prices have fluctuated somewhat on a relatively high level over the last couple of years, especially fish oil is all time high. But compared with other material cost, marine ingredients have not increased as much in cost as many others.

And now Høgni Jakobsen will take us through the financials.

If we look at Group's revenue in this quarter, we had a strong 31% increase compared to the same quarter last year. Our operational EBIT also had a comparable increase, relatively speaking, amounting to DKK 120 million in this quarter.

The negative fair value adjustments in this quarter were DKK 140 million, and that's primarily driven by changes in the volume, the size distribution of the biomass, remaining time to harvest, FX rates and so on. We paid DKK 49 million in revenue taxes which also was a significant increase from the same quarter last year and that is due to higher volumes being harvested but also the increasing salmon price.

The revenue tax is linked to the FishPool index. Profit after tax was DKK 3 million in this quarter.

If we look at the results on a quarterly basis and look at 2021 as a whole, our operational EBIT has varied quite significantly throughout 2021. And we see that we have a very strong first half of the year and very weak second half of the year and that's primarily driven by the biology in Scotland, which has caused significant losses not only in the fourth quarter but also in the third quarter, as we have reported on previously.

The adjusted earnings per share in 2021 totaled DKK 10.28 and as our dividend policy states, 30% to 50% of the earnings will be paid out as dividends. So, the Board has decided to propose to the Annual General Meeting on the 29th of April that we will pay out DKK 5.14 in dividends for 2021.

A short glimpse at the balance sheet reveals that our property, plant and equipment has increased by DKK 668 million, and now amount to roughly DKK 4.9 billion by the end of this quarter. Our biological assets increased by DKK 331 million and amounted to just short of DKK 2.5 billion by the end of this quarter, including DKK 605 million in value, the fair value adjustments.

Inventory decreased in this quarter, whereas receivables increased significantly by 68% and amounted to DKK 824 million in this quarter. Cash and cash equivalents amounted to DKK 509 million, and equity increased by DKK 618 million and amounted to excess of DKK 9.3 billion.

Equity ratio reduced from 66% to 64%. And the total equity and liabilities balanced out DKK 14.6 billion in this quarter.

Cash flow from operation have improved by DKK 296 million in this quarter compared to the same quarter last year, and amounted to DKK 189 million. Cash flow from investments were a minus DKK 298 million and cash flow from financing reduced by DKK 235 million and amounted to DKK 237 million in this quarter.

And the net change in cash in this quarter was positive with DKK 136 million and we had DKK 509 million at the end of the quarter. During this quarter, we have increased our net interest bearing debt with DKK 140 million and our net interest bank debt at the end of the quarter was DKK 2,126 million.

The main change is the negative cash flow from investments amounting to DKK 290 million, therefore DKK 54 million in paid taxes and the positive cash flow from operations amounting to DKK 198 million. In December, we signed a term sheet with our existing banks, Nordea, Rabobank, and DNB for a new five-year loan facility for the facility of €700 million and with an additional accordion option of €150 million, sustainability linked financing.

And this agreement is being closed in this during this week. And with reference to this new facility agreement, our undrawn committed facilities by the end of the quarter was around DKK 3 billion.

If we look at some main events from ESG and the sustainability work in this quarter, we are pleased to announce that we have made new commitments in regards to reducing our scope 3 emissions by 52% per product sold and with 2020 as a base year. Previously, we have also announced our commitment in regards to scope 1 and 2 reduction by 50% in 2030.

And now we add on with the scope 3 emission targets, reduction targets for 2030 as well. This is in line with the Science Based Targets, in order to ensure that our planet does not heat with more than 1.5 degree and we will soon submit these targets to SBTI for approval.

Another main event in this quarter was of course the, now sustainably linked financing that we have, which means that all our financing is linked to sustainability targets. We have in collaboration with our banks, set some targets on survivability of the fish and the feed conversion factor and also ambitious targets for our own production of renewable energy to which the finance agreement is linked.

And finally, we also won an award this quarter, as we were announced as the National Winner of Energy Globe Awards for our biogas plant FÖRKA. And then I will leave it back to you Regin to tell us about markets and the outlook.

In the quarter, we saw a 5% increase in total harvest, higher growth than expected in the fourth quarter has negatively impacted the supply in the first half of '22; some fish seem to have been pulled. Some countries have harvested smaller fish in the fourth quarter, which indicates that fish was pulled between the years.

In Faroe Islands, we harvested all time high quantity in the full year, but also in the fourth quarter up to 30,000 ton versus 21,000 ton the year before and full year, 31% growth from 72,000 ton to 95,000 ton in gutted weight. For Faroe Islands in general, mean weight of harvested fish was 4.9 kilo for the full year, and versus 5.2 kilo, the year before and 5.5 kilo when it was all time high in 2019.

Smolt transfer in the Faroe Islands was totally 20.3 million in the year versus 20.1 million, the year before. But mean weight of transferred smolt in the Faroe Islands are all time high at 350 gram for the full year versus 332 gram year the before.

Feed conversion rate for the Faroe Islands for the full year is all time high. And this is all on of harvested fish groups 1.07 versus 1.08, the year before and average for the last five to six years from - the last 10 years, the level was between 1.12 and 1.15.

Cycle time per generation in the Faroe Islands in 2021, for all harvested fish groups was 13.9 months versus 14.8 months in 2020 and 18 months in general in the period in 2014 and at that time. So this dropped from 18 down to 13.9 months over the last six, seven years.

Mortality in 2021 for Faroe Islands in general was 14%, flat from '20 but slightly down from 2019. This level for full generation was around 11% to 12% in the years from 2012 to 2017.

And now I refer to full cycle mortality not a yearly mortality but full cycle mortality. And this increase over these years has mainly been related to more strict lice handling regimes which takes some time to adopt into operation before mortality levels are expected to come down again, as results of new initiatives will emerge.

The global demand for salmon is high. The market consumed 3.1% more in this quarter and 8.8% for the full year.

Most important salmon markets are EU and US which takes around 67% of the global volume. The EU market is a large share of the growth from - in Europe a large share of the growth from the supply from European farmers were exported out of Europe.

In US market, we had the record high growth in the year, 65,500 ton from 505,000 tons to 570,000 tons which corresponds to 13% growth last year. This growth came simultaneously with logistic cost supply disruptions and record high transport costs absorbed by customers on top of increased product price.

For Bakkafrost, the Chinese market is next after Europe and US, also a very important market with 40% of global volume. Despite huge impact by COVID-19 and logistic issues, the market had an impressive growth of 31% in the fourth quarter corresponding with 3% for the full year.

Other markets in general have developed positively with 5% full year growth and 4% growth in the fourth quarter. These markets are also important for Bakkafrost and have a high focus for us to develop further.

The export value of salmon from Norway increased 8% in 2021 from NOK 57.77 per kilo to - NOK 257.77 from NOK 53.29. All in all, this indicates that demand for salmon has been very strong in 2021.

The supply setback has been driven by a combination of higher than expected harvest in the fourth quarter 2021 and issues in several countries where algae blooms, storms and other events have reduced biomass for harvest in 2022. Feeding in the fourth quarter was between 3% and 12% down in all production countries except North America and Iceland.

These results of a development where supply in 2022 is expected to have dropped 60,000 ton from our expectations three months ago. And this means that there will be a global setback of supply in the first half of 2020 of around 7% and in the second half of the year, the supply growth will be 6% in supplied volumes.

However, the total harvest for the full year 2022 seems to be lower than in 2021 around 0.2%. This means that there is a tight supply outlook in the market which will lead to high prices as we saw on indication on the previous page.

For Bakkafrost, we expected to harvest 103,000 tons in 2022, 68,000 tons in Faroese and 35 tons in Scotland. Our issues in Scotland are not finished in the fourth quarter.

There are also some issues in January with high cost of harvested fish. The mortality levels are back on normal levels, but the cost of our production in January and probably also February will be higher, which means that it will impact our margins in Scotland.

In Faroese things are back to normal in the first quarter. In our smolt releases in 2022, we expect to release slightly more than last year.

We're more or less on the same level 25.7 million compared to 25.5 million, 14.9 million in Faroese and 10.8 million in Scotland. We have continued with contracts with many of our clients.

Contracts are mainly pulled forward, but prices have increased. At the moment, of course, spot prices are higher than contract prices which causes VAP to have losses.

We expect to sell more or less the same quantity of feed in 2022 as the year before and as we have had good to catch us of blue whiting in January, we also expect the raw material for our feed, our fishmeal and oil department to be more or less on the same level as the year before. On our Capital Market Day, we announced our plans for next five years to reduce the risk of our operations.

Biology is the biggest risk as we see these days. We will have a strong focus on improving our operations with targeted investments to get this development as soon as possible and also to improve our efficiency.

On the next pages, we see a glimpse of the expectation - the exceptional investments Bakkafrost has under construction as we speak, in order to reduce the risk and increase efficiency and creating organic growth over the next seven to eight years. And to mirror our ambition for Scotland, we will change the company name for our Scottish operation to back Bakkafrost Scotland.

This year, we will see a transitional year of our five year strategy in Scotland. And now we are open to take any questions.

Please go ahead, Mr. Ola.

Thank you. Good morning.

Just a question on the cost in on the Faroese going forward. You mentioned that you have good growth and low FCR, so if we just for the mortality in the fourth quarter, how should we expect the cost to develop going forward?

Yeah, as we are showed on one of the graphs, in this quarter, we had to close to DKK 3 increased cost level because of higher mortality, we expect this to come down. There are - there might be some increased cost in the fourth quarter because of some of the fish groups are still in the water which was impacted.

But we see strong indicators that we will reduce these risks as we go forward. In Faroe Islands, we see several of our initiatives which are taking us in the right direction.

When we talk about costs, we see also of course, that inflation is part of the cost drive. There is an inflation in the industry and feed costs have been driven up by increased raw material prices, but also other costs.

This has impacted also our operations somewhat. Of course, the biggest driver on that has been transportation, which has been on significantly higher level.

We don't expect transportation to come back on pre-COVID levels in the short term. So that will have some implications and so far, we see that the market is accepting prices on higher levels than before which to some extent at least will offset this development.

Regin, thank you.

Carl-Emil?

Hi, good morning and a quick question on the smolt releases in Scotland. You guys put on 10.8 million for 2022, which I guess is fairly in line with '21 and the size of smolt at least in Q4 was around 100 gram.

What should we expect in terms of sizes so on the smolt in 2022 and when will you release the first smolt from the new Applecross facility?

Yeah. The Applecross facility is under construction and we see some small deliveries from the first building stages AP1 to AP3.

And the AP4 will be finished later this year. And the big impact will be when that will start up and we will see that mainly in '23.

And then AP5 will be done also in '23, that's when we will see the big development take place. That's when we are going to be able to increase our average weight of smolt significantly.

So in '23, it will be even more exciting for our smolt sizes. So this year it will not be a big step in Scotland with the size but some development hopefully.

Thank you.

And there's another hand, I can't see the name. Please go ahead.

Yeah, Christian Nordby at Kepler Cheuvreuxe. And I have a question regarding the synchronization of sites in the Faroes.

Can you elaborate a little bit on how you came in this situation in the first place?

This situation came when we had the ISA issues in A-73, I think it was in 2016. I think it was in 2016.

And that caused our synchronization to go out of sync. So eventually, we took the decision to harvest this fish to get back in sync because we see a significant negative development with sea lice on the areas when they are out of sync.

And of course, the risk of disease is also higher when we are out of sync.

And on your harvest weights, should we expect harvest weights in Faroes in Q1 to come back to previous high levels or should they still be a bit lower than what, like we've seen in the past few quarters?

We are a bit a bit lower. And this is a bit driven by the need to be in line with guidelines on sea lice.

In order to be in line especially for larger fish, at the moment at least, we don't want to treat them, so we have to harvest them. So that means that we need sometimes to harvest fish at 4.5 kilos instead of 5.5 kilos.

So unfortunately, for the time being this will continue. Hopefully, when we will have better capacity with fresh water and also with other means we can increase the average weight again.

Thank you.

Alex Jones, please go ahead.

Thanks. Just a question on Scotland costs, you alluded to sort of higher mortality in January, February, give any sort of quantification about being hopeful and then into the full year?

Can you get a sense of how much of a difference the new fresh water treatment capacity will have? Should we think about costs being back towards 2020 levels once that starts off?

Thank you.

Yeah, that's a good question. We have strong indicators that the development that we now are in with our updated operational procedures, and also when we will have the capacity for freshwater treatment, that was this will have a significant positive impact.

The big impact will of course be to make the fish surviving instead of too much mortality. So it will have a big impact.

But it's difficult for me right now in the middle of the storm to quantify the impact so unfortunately, I cannot give a certain number. Yes, please go ahead, Mr.

Ola.

Yeah, one more for me. Just on average our harvest weights in Scotland, should we expect them to be lower than last year even what's happened throughout January, February or are we reverting back to sort of quantification will be helpful and then could you give us how much difference the treatment capacity will have, should we think that cost being back to 2020 levels?

Thank you

We are very focused, very focused to get the harvest weight up. So that has a huge priority for us in Scotland.

Thank you.

And one more hand. Is it Christian or someone else?

No, it's Alex from DNB.

Alex. Yeah, go ahead.

So a few questions, if I may? First of all, how will the harvest pattern for Bakkafrost look in 2022?

Will it be a very back-end loaded or any comments there?

Yes, we have probably more in the second half of the year, probably a bit more in second half of the year. I don't have the exact numbers to give you but I will say a bit back end loaded but -

Okay, that's fine. So apologies if you actually answered this during the call, I dropped out for a few minutes.

But in terms of the challenges in the Faroe Islands with sea lice, I mean, are there any structural changes sort of using more high risk sites etc. Or is it simply the fact that you have grown volumes more than you support capacity can handle and hence you have these increased sea lice issues?

Now, as I referred to earlier, last summer, when we did the upgrade of our treatment vessel, Martin, the plan was that they should be back in operation in June in order to prevent, it's very important to be on top of the situation before the fall. But due to COVID, there were some delays in supplies, which caused the vessel to be in operation only in mid-July.

And that caused us to be a bit on the back of the issues during the whole period in the fall. And it's very important to be in front of this during the fall.

And when you are a bit behind, in our case, we this means that we have to treat a bit more tough. And also we have to refer to that the sea lice requirements in Faroes have been more and this means that we have to treat more than before.

So, the combination of these two has been bad for us in 2021 in the fall. We expect that now, we will be better prepared for the fall this year.

And also now we will have freshwater capacity which we think is quite needed. We see also in order to have a good fish health, it is good to treat the gills of the fish prior to sea lice or in combination and that capacity will be in place now.

Because in the fall, there are all always also some gill issues, the combination of some gill issues and sea lice treatments is bad, that's what we experienced very much in Scotland. So, we expect this to be positive.

Also now we will see more and more reduced cycle time in Faroes. Now when the small size is as big as now, the time in the sea will be much shorter, which means that the need for treatment will be lower.

So we think that things are going to move positively in the Faroes. We think that we have enough capacity especially now when we get the freshwater treatment capacity on top of what we already have.

Okay, thank for that. A final question from my side, in terms of the HORECA market, the hotels, restaurants etc., is that now back to pre-COVID levels or how much left or how much do we have left to get to sort of get back to Pre-COVID with retail markets?

We see a very strong demand in all markets. Very, strong, customers are accepting prices never seen before.

And for many markets you must remember that this is with very high transportation cost. So the demand seems to be very strong even at these prices.

So the combination of a strong retail market which has been developed during the COVID-19 in combination the HORECA market coming back full service in all markets is a very strong push for prices and demand.

Okay, thank you.

Good, any other question? No?

Thank you very much.