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R&D - a Crucial Element in Fish FeedNew York Investment Forum, May 2014

Torben SvejgardGroup CEO BioMar

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BioMar key figures 2013

• Turnover 1.6 billion USD*

• EBIT 73 m USD*

• ROIC 20%

• Production volume approx. 1 million tons

• Approx. 1,000 employees (including JV’s)

• Production in Norway, Scotland, Denmark, France, Spain, Greece, Chile, and Costa Rica (and planned for Turkey late 2015)

* May 2014 exchange rate

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Owned by listed industrial conglomerate Schouw & Co.

3

135 years of history 125 years in packaging

25 years as conglomerate

5 core businesses today

Consolidated revenue $2.1bn

Consolidated EBIT $126m

2,100 employees in more than 20 countries

Listed on Nasdaq OMXCopenhagen since 1954

BioMar 75% of consolidated revenue and 58% of EBIT

$1,600m

$287m

$172m

$845m

$89m

BIOMARThe World’s third largest manufacturer of quality

feed for industrialised fish farming

FIBERTEX PERSONAL CARE

The World’s fifths largest producer

of spunbond for hygieneFIBERTEX NONWOVENSLeading European

manufacturer of nonwovens for industrial applications

KRAMP (20%)The absolute largest supplier in Europe of

accessories and parts for farming

HYDRA-GRENELeading in Denmark within hydraulic components and

solutions

2013

rev

enue

THE PORTFOLIOAT A GLANCE

FY2013 amounts converted at USD/DKK 5.42Kramp (20% owned) not in consolidated figures

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Total Shareholder Return

• Indexed share price performance adjusted for share splits etc.

• Any cash dividends are reinvested in the stock (no transaction costs assumed)

• Danish companies are denominated in DKK, US companies in USD, i.e. the data show no exchange rate effect

• Percentages show the annual return whereas the y-axis show the total increase over the period

• Last date is 3 April 2014• Source: Datastream• Maersk and Berkshire have

multiple share classes, and Maersk B shares and Berkshire Hathaway A shares are used

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From 2013: A period of 1¼ yearsSchouw & Co. 64,3%

Mærsk45,8%

Berkshire30,3%

GE22,7%

Total Shareholder ReturnHistorical share price developent with dividends reinvested

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From 2009: A period of 5¼ yearsSchouw & Co. 29,4%

Mærsk20,0%Berkshire13,4%

GE13,4%

Total Shareholder ReturnHistorical share price developent with dividends reinvested

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Berkshire8,1%

From 2004: A period of 10¼ yearsSchouw & Co. 18,3%

Mærsk5,9%

GE1,7%

Total Shareholder ReturnHistorical share price developent with dividends reinvested

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W o r l d C l a s s F i s h F e e d8Generalforsamling 2014

From 1994: A period of 20¼ years

1 0 . 0 4 . 2 0 14

Schouw & Co. 14,5%

Mærsk9,6%

Berkshire12,8%

GE8,4%

Total Shareholder ReturnHistorical share price developent with dividends reinvested

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R&D in fish feed- needed or just a buzzword?

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Just a pile of pellets – how difficult can that be??!!

Well………………

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An example - looking back on fishmeal replacement

• Late 90’es to late 00’es: High focus on fishmeal replacement in salmon industry

• Total feed industry R&D spend on this task: up towards 175 million USD +/- (?)

• Result: Global salmon farming industry saves 1.3 billion USD annually (not only related to fishmeal/oil replacement work, but also generally increased nutritional knowledge)

• Much higher fishmeal prices if no reduction in usage, so added value much higher

• Same relative savings in bass & bream and (European) portion trout, etc. – and being transferred to other species, e.g. shrimp

1998 Knowledge

2013 Knowledge

00.5

11.5

22.5

Price in USD/kg for a typical Norwegian

Salmon feed

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Fish feed still early on learning curve

Fish feed

Poultry feed

Pig feed

Time

Knowledge / sophistication

Fish nutrition R&D probably more complex than for terrestrial animals

• Variation in water temperatures and thereby fish body temperatures

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Future feed R&D work

Process technology innovation an essential discipline including the link between physical quality and nutrition

Days post challenge

0 5 10 15 20 25 30 35

Cum

ulat

ive

mor

talit

y (%

)

0

10

20

30

40

50

60

70

Control dietPrevious PlusPlus 3

SRS

Still focus on feed performance – optimising and extending raw material basket

Increased focus on health and feed nutrition interaction

Prioritisation depends much on the development stage of

the market!

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Conclusions and implications for feed industry

• A lot of feed R&D work conducted, but we still have a lot to do

• Further substantial increase in feed R&D investment needed

• Consequences for feed suppliers• Need for continued significant R&D costs increases (BioMar has

almost doubled R&D spend last 4 years)• Critical size essential for a feed supplier to be able to afford needed

R&D investments

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THANKS FOR YOUR ATTENTION!