Salmon Evolution (SALME) Investor Update summary

Strategic project and operational update

• Phase II expansion at Indre Harøy is fully funded, increasing total production capacity to 18,000 tons HOG, leveraging existing infrastructure for cost efficiency and operational flexibility.

• Strong operational and biological results achieved, with mortality rates at 3%-5% and a superior grade share of 95%-96%, outperforming industry averages.

• Optimization of production plan and additional tank capacity will reduce production cycle to 8-9 months, increase batches per year, and boost output by 2,200 tons.

• Phase II construction is expected to begin in Q3 2024, with first smolt in Q1 2026, and operational improvements from Phase I will be implemented.

• Long-term plans include scaling Indre Harøy to 36,000 tons HOG and pursuing international projects in North America and South Korea.

Financial and funding highlights

• NOK 2.2 billion investment for Phase II, with NOK 200 million contingency and additional buffer, fully funded through NOK 675 million in new bank facilities and NOK 350-365 million from a private placement.

• Total bank commitments increased to NOK 2,225 million, supporting both Phase I and II.

• Combined phases expected to generate strong cash flow, enabling self-funded future expansion and reducing reliance on external financing.

• At a salmon price of 90 NOK/kg, annual investment capacity is estimated at 6,000 tons HOG, supporting rapid scaling.

• Key shareholders and management have pre-committed to subscribe for NOK 81 million in the private placement.

Cost structure and operational efficiency

• Achieved farming EBITDA cost of NOK 40.2 per kg in Q1-24, with a target of NOK 50/kg at full Phase II run-rate, and competitive with traditional Norwegian fish farmers.

• Scaling effects and operational leverage are expected to further optimize costs, with learning effects in Phase III anticipated to reduce CapEx per kilo and construction time.

• Secured external smolt capacity ensures production continuity and minimizes timing effects on harvest volumes.

• More frequent batches and lower average harvest weights improve commercial regularity and reduce operational risk.

• Hybrid flow-through system and vertical integration support cost leadership and operational excellence.