Good morning, everyone. Welcome to Nordic Aqua's presentation of Q1.

With us today, we have myself, Ragnar Joensen, CEO, and Tom Austrheim, CFO, and from China is our Managing Director, Andreas Thorud. The agenda for today, I will start with giving some highlights.

Andreas will come and give us an update on market. I will come back with operations and projects, and then finally CFO will take us through financials, and I will end with summary and outlook.

If we look at the highlights this quarter, we can see that we have had an excellent production. Production is running very well, over 2,000 tonnes in production.

We can say that Phase 1 is running as it should, fully, and almost also full run in Stage 2. Very good, even though we started without having some of the capacity in this quarter.

It was finalized during this quarter. Harvest, just under 800 tonnes, we are building up biomass, not harvesting as much, filling up these new production facilities.

If we look at price, we can see that price achievements for the bigger fish is also very strong. We can go for the cost.

The cost is coming down as the production is going up. Operational EBIT was -€0.5 million in the quarter, but for March, we had a positive EBIT, we are moving in the right direction, definitely.

We can also say that we have started to design for the next stage, Stage 3, as planned, and we will come back to exactly when production start could commence. Then the market, as Andreas also will take us through, is extremely strong in China, growing very fast.

With this, I will just head over to Andreas, and please take us through the market part.

Thank you so much for that, Ragnar. I think it's very exciting to be able to present this market part and also the sales part, because we see kind of two things that are happening now in the Chinese market.

The market is happening, we will get back to that, but I think it's also very exciting to see that Nordic Aqua commercially is starting to happen, and we work very hard for that. We saw for the Q1 this year that we had a very good increase in both sales and harvest, and we also had a good HOG size on the 771 tonnes that we harvested.

This is actually our best quarter in terms of harvest volume so far, and as we get back to in the outlook, we will also continue to have strong harvest. 4.4 kilo HOG, and we are now closing in on what is the Norwegian average, as you can see from the graph on the left-hand lower corner there.

As we have said before, our goal is to even increase that further, because then we are meeting the demands of the Chinese market when it comes to size. Speaking about size, if we look at our pricing, then benchmarked towards Sitagri in the same periods and weighted, we are 13% on the 5-plus, which gives us a healthy premium.

Obviously, we hope to have that even further, but it just is a testament to the strategy of having bigger fish, and also the realities of the Chinese market with that preference of bigger size. The average sales price we achieved in the quarter was €7.79, and obviously we had some parts of our harvest during the quarter was a little bit of a lower size.

That means that the prices came down a bit, but overall, we are slightly above the quarter in terms of the average Sitagri price when we take all sizes into consideration. Just to repeat something we have talked about before, but the Chinese market likes larger salmon fish.

They think it's better taste, there's better texture to it, they have better yield when they manually cut it, and there's also a lot of sashimi consumption here, which they are drawn to the bigger size. That's why we see some price sensitivity when it comes to the weight variations, which we don't necessarily see in other markets.

I think the graph on the right-hand side just illustrates that, that when we look at the average Sitagri Index and also our sales in the market, we are 1% above, but once we go above 5 kilo, it really shows that the Chinese market has a premium to that, which was 13 13%. This is just something to taking into consideration when we look at China, because it's not a fully developed salmon market in the sense that you might see in Europe, where there's also a demand for the whole range of sizes from a harvest, which you tend to see there.

Moving forward, we are also working hard to establish our brand, our position. We work in different channels.

We have a strong sales and commercial team that is working on that. We had some events in the quarter which we think were relevant to talk very briefly about.

We had in Shanghai an event with a famous restaurant, which really put our Nordic Pure Atlantic to shine in terms of talking about the origin of our product, the quality of our product, and also adapting it to a local flavor. We see that this preference for what is produced in China, the pride of buying a high-quality product in China, is something we are now seeing in this Atlantic salmon market as well, and we think that is very good for our further future positioning by building a premium brand of our Nordic Pure Atlantic.

We were also part of an Ningbo city promotion event in Shanghai, which showcased the product to many embassies or consulates and also business stakeholders. It seems like a few months already, and actually what it was, there was a Chinese New Year in February, and we had a special edition we made this year, which we celebrated the uses of the whole fish, and that was also something that was well-received, where we had a small-scale limited edition that we provided to certain stakeholders in the market.

Now, if you look at the value proposition we bring here with our Nordic Pure Atlantic, we talk about our freshness, which is unique. What is the top-of-mind of Chinese consumers when they buy seafood?

It's freshness. We have an unparalleled story when it comes to talking about freshness given our localized production of Atlantic salmon.

The very high safety profile of our products: we're not using any antibiotics, we have a very controlled environment, we are free from other medicines and parasites. That's also highly valued in the local market, where food safety is often a key concern when people are buying food.

We also have a sustainability factor to take into consideration. Very little CO2 emissions when it comes to the transport side.

We are localized here in this market, which is growing and booming, and it makes a lot of sense to produce an Atlantic salmon on land to cater to what we see is and continues demand for Atlantic salmon. That also shows us the agility we have by being here locally and building those strategic partnerships that we are aiming to this year, which our sales is working hard on, and that's also based on how we are now getting into a very good rhythm of stable harvesting, and we can be in close contact with our customers and just building the brand equity and also providing a special product to the local market.

Then we seek to do that in food service and also in retail, and this is also size dependent. Then Ragnar has talked about this many times, but we are in China, we are in Ningbo, south of Ningbo.

For those of you who are not that familiar with China, we are in the eastern seaboard of China, very strategically localized. We have a close proximity to Shanghai.

It takes us 5 hours with a truck to get products there. In this wider Yangtze River Delta area around Shanghai, there is a high-income area, there's a focus on health.

We also have a good availability to reach other high-end markets, such as Beijing, which we have developed, in Guangzhou, and also in inland. We think this is a very good starting point to cater to market, but we are very close to the biggest market, which is the Greater Shanghai region, and then we are also in an area with suitable water quality, and we have energy at stable prices, and also the modern infrastructure that China is so good for, that can facilitate an efficient logistics, also within cold chain, to our customers.

There's a lot to talk about the Chinese market these days, and then there's no wonder, because there's an explosive growth that has been going on here. It started last year particularly, but we see that it's continuing into this year with an very impressive 55% year-on-year growth for Q1 in terms of import of fresh Atlantic salmon, which reached around 46,550 tonnes.

If you just use that number as an example, you have a run rate of between 180 and 190,000 tonnes potentially for the year. We have earlier talked about an estimate which was from 2023 for 2030 by Alibaba, who said it should be around 210,000 tonnes in the Atlantic salmon market in China.

We think that is going to be surpassed way before 2030, and we have now looked at another estimate, which is showing a 300,000 tonnes market in China in 2030 by Pareto Securities, also including Hong Kong, but that's usually around 10, 12,000 tonnes for the Hong Kong market. It just shows that where we are now, we feel very much we are in the right market, at the right time, with the right product, because there is a very nice growth opportunity here, and what we are doing now with getting the sizes there, building that sales organization, we feel very comfortable where we are.

If you look at just quickly the nature of the Chinese market, there are many competitive origins here. They all want to have a piece of this market.

Norway had a strong market share here during the COVID years as it was able to deliver. Last year and this year, it's been grown their market share further from after pre-COVID.

That's obviously because the prices have been a bit lower. There's a strong preference for Norwegian origin.

Obviously, we are here based on Norwegian heritage of Atlantic salmon, we have Norwegian technology, we are also obviously have an association to this Norwegian salmon story by doing it localized here. Also here again, the Q1 numbers fantastic if you look at compared to last year and the years before.

It really really a booming market in China, and we are very excited to be a part of that. Then finally, in terms of pricing, we hope to see that the pricing will return to what has been the average price in China, which has been above €10.

If we follow the graph here, we see there was a bottom point last year during the summer. It have been slight improvement in prices as we here differentiate between the European origin and the Chilean and Australian.

We hope to see this a bit more return to the normal, return to the average, and that puts us in a very good position to leverage our prices and our products. Thank you.

Thank you, Andreas. I will just continue with the operations.

I mentioned briefly in the start that the production has been going very well. Production over 2,000 tonnes, nearly 2,200 tonnes for the first quarter of this year.

We started with full capacity in mid-February, of Phase 2. We nearly have a full run rate of Stage 2 without having all the capacity available.

We expect this also to continue into Q2. Instead of harvesting much, we can see over the past two quarters, we have built up biomass into the new facility, nearly 2,000 tonnes more or just about 2,000 tonnes more in stock, which we can generate more harvest from.

We have said that we will harvest slightly more in Q2, but especially from Q3, we will start having a full run rate on the Stage 2. If we just have a look at how have the KPIs been since we started operations in 2024: we have produced just over 12,000 tonnes, all batches have shown low mortality, and we have harvested now just over 4,000, and this will continue into this year.

We have said the estimates for this year is between 5 and 6,000 tonnes. Average weight was high, and then we had a little dip last year, but it's coming up again now, and also continuing into Q2.

Very high superior rates also. Just going to have a brief look at Stage 2.

We have Stage 2 in full operations now, which can bring us our capacity up to 8,000 tonnes of harvesting. If we look at the cost, we have said previously that we took the cost down.

We had an estimate of 77 million for Stage 2, we took it down to 65. Of these 65, we have paid so far out just around 50 million, we still have some to pay, but most of all systems are fully in operations now.

Just some slight auxiliaries that still needs to be completed. Of course, we are also looking at our Stage 3 now, which we are starting to design on already.

Then I will give the word to Tom, our CFO, to the financials, please.

Yeah. Thank you, Ragnar.

Looking at the first quarter, the financials, the revenue, as we have touched upon, was €6 million, which is 771 tonnes at that €7.79. Then the release cost from stock was €4.8 million, just shy of €6.3 per kilo.

That is significantly below our Q4 figures at a €2.7 reduction, and also below what we guided on for the quarter. That gives operating EBITDA of 920, and operating EBIT of -529.

We had a net cash flow for the period of -6.8, and that negative is primarily driven by a reduction in working capital, payment of trade payables, and also investment in biomass. We spent 1.2 million in investments in PPE for Stage 2, and ended the quarter with a biomass of 35.4 million, including 8.6 in fair value adjustments.

The equity ratio was 59%. Then in Q4, we entered into these transformational capitalization and financing transactions on the financing side by refinancing existing debt with a syndicate of Chinese banks, onboarding a group of Chinese banks, not only for Stage 2, but also for the working capital purposes, as we'll come back to, and also for a future Stage 3.

Then we had an equity injection directly into the Chinese subsidiary. This offers strategic and operational synergies and accelerates the strategy execution towards 20,000 tonnes, obviously.

The debt is now financed with Chinese banks and in local currency. We have 385 million in the syndicated project finance facility, whereof 272 million was drawn at the end of Q1 in capex for Stage 2.

Then we have the working capital facility, where we have an active dialogue with the same group of banks and some others. We expect that to come into around 200 million, or €24 million, and to be completed within 2026.

Last but not least, the same group of banks are in principle looking at Stage 3 when we get to a final investment decision on that one. Together, these credit facilities have refinanced our short-term credits, and some of that was repaid during Q1.

Yeah. Thank you.

Thank you, Tom. I will just continue to the last part of the presentation, that's outlook and summary.

If we look at the outlook for Q2 this year, as Andreas was touching upon, market is growing extremely well. Harvest, we expect to harvest between 1,000 and 1,200 tonnes for Q2, and average weight is going to be slightly higher than Q1.

Estimates for the year, still the same, 5 to 6,000 tonnes. Prices seem to be strengthen also, and if we look at the costs, we expect to have slightly decrease also from the current level into Q2.

The production is going well still, and as Tom was touching upon, working capital is going to be fully subscribed during the year. Project, finished with Stage 2, and starting to design and moving towards a final decision when to start on constructing Stage 2 throughout this year.

All in all, we feel that this quarter has been very good for us. Good growth, market is growing, financing are well in place, and yeah, looking into the future by expanding into Stage 3.

With this, I would just like to thank you for listening, and then you have had the chance also to put on some questions if you're interested during the presentation. You have to write them down, and I will just look to Tom here to see if we have received any questions so far.

We have, Ragnar. We have received only one question, which is regarding the Sitagri index.

There was a question here, The Sitagri index does not include the transportation cost. How should we think about this component going forward?

Please, Andreas, can you...

Yeah. I think the transportation cost is obviously somewhat of a fluctuating cost driver in this.

We have to pick something that we can benchmark ourselves against, and we see that by looking at Sitagri as is, that's one way of showing what we are getting paid for here in the Chinese market compared to as if it was exported from Norway. Then one can do one's own calculations in terms of estimating a freight cost and doing an type of import duty type of estimation, but that's what we chose to have a benchmark, just to show that the premium for the bigger size is something that China has shown to have, although in Q1, we saw sometimes that the prices from Norway, in terms of the larger size fish, 5 to 6, 6 to 7, 7 to 8, was the same as the smaller size fish.

It was also a little bit of a peculiar market in that respect. Q1 last year, when we had the same type of comparison, at that time we had a 20% premium, we hope to increase our premium further as the market comes back to perhaps a more normal rhythm when it comes to the demand for the big fish and also obviously the supply of the big fish, which have been a lot in the quarter that was just happening.

Thank you. Thank you.

We can see that there are no other questions in the inbox for us. Maybe we can just wait a few seconds and see if something should come up.

We know that there is sometimes a delay in this system also, so that's why we just have to wait a little bit to see. If not, then we can just say also that if somebody raises questions after we have seen them, before we end now, then we can come back to you on email, perhaps.

Okay.

With this, I'll just say thank you very much for listening, and yeah, thank you from all three of us. Okay.

Thank

you.