Review Credit Research 19 February 216 Marine Harvest Industry (GICS): Food Products Sector (Nordea): Seafood BB Stable Key info Country Bloomberg debt Bloomberg equity Moody's S&P Market cap. (bn) Norway MHGNO Corp MHG NO NR/--- NR/--- EUR 5.76/NOK 55.9 Nordea Markets - Analysts Lars Kirkeby +47 22 48 4264 Chief analyst, Credit lars.kirkeby@nordea.com Kristoffer B. Pedersen +47 22 48 79 8 Analyst kristoffer.b.pedersen@nordea.com Revenue by segment 215 MH Consumer Products 2% Feed 6% MH Markets 4% Other 1% Farming 33% Bond spreads spread to swap, bp 4 3 2 1 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Strong market outlook mitigates higher leverage Marine Harvest posted Q4 215 earnings below our expectations, as ongoing cost inflation is a major concern. In addition, the overall financial profile is slowly weakening quarter by quarter owing to the ongoing debt financing of dividends. Luckily, the market outlook for 216 is very strong. The group's listed 218 bond has widened in line with the overall market at the start of the year and is trading in line with comparable sector peers. Q4 215 earnings fall short of our estimates Group revenue increased y/y, but adjusted EBITDA (excluding fair value adjustments on biological assets and operational leasing expense) declined by 7%, reflecting increased production costs in all regions. Second consecutive quarter with debt financing of dividends The proposed dividend of NOK 1.4 per share for Q4 corresponds to a total dividend distribution of NOK 63m in Q1, unchanged from the previous quarter. The quarterly dividend will be paid to shareholders in the form of a repayment of capital. This is the second consecutive quarter with debt financing of dividends, as the group's quarterly free cash flow after capex was insufficient to cover distribution to shareholders in both Q3 and Q4 215. Credit view We maintain our shadow rating on Marine Harvest at BB with a Stable outlook, reflecting our assessment of a Weak business risk profile and an Intermediate financial risk profile. The current financial profile of the group is firmly rooted within the Intermediate category, but ongoing margin pressure and the debt financing of the dividend may put pressure on the group's financial profile. MHG1 Source: OSE and Nordea Markets Key credit metrics and ratios (adjusted numbers) NOKm 29 21 EBITDA 2,228 3,95 15% 26% EBIT 1,357 4,512 9% 3% Shareholders' equity 11,461 12,592 Debt 5,486 5,737 Debt/(Debt+Equity).3.3 FFO/Debt 47.6% 74.3% FOCF/Debt 27.2% 11.4% DCF/Debt 27.2% -1.4% EBITDA interest coverage 5.8 1.9 Debt/EBITDA 2.5 1.5 ROC 7.2% 23.3% 211 3,547 22% 1,35 8% 1,837 7,83.4 49.9% 29.5% -7.2% 1.3 6.3% 212 1,373 9% 991 6% 11,689 6,629.4 25.7% 1.1% 1.1% 4.2 4.8 4.7% 213 4,266 22% 3,46 18% 16,346 9,535.4 37.% -3.8% -12.5% 5.8 13.6% 214 5,64 22% 4,533 18% 14,718 12,169.5 4.7% 8.7% -19.7% 8.2 15.2% 215 4,95 18% 3,611 13% 18,187 11,773.4 36.9% -2.5% -17.8% 8.1 2.4 11.3% 216E 7,491 25% 6,7 2% 19,153 11,451.4 61.% 33.6% 6.1% 15. 1.5 17.8% 217E 9,247 3% 7,827 25% 2,34 11,95.4 78.9% 35.6% 3.5% 18.8 1.2 22.5% 218E 9,726 31% 8,36 27% 18,24 11,297.4 81.8% 38.2% -3.1% 19.9 1.2 24.3% IMPORTANT INFORMATION AND DISCLOSURES AT THE END OF THIS REPORT Markets
Marine Harvest 19 February 216 Strong market outlook mitigates higher leverage Marine Harvest posted Q4 215 earnings below our expectations, as the ongoing cost inflation is a major concern. In addition, the overall financial profile is slowly weakening quarter by quarter owing to the ongoing debt financing of dividends. Luckily, the market outlook for 216 is very strong. Earnings below our expectations Weaker operating cash flow, insufficient to fund net capex and investments Comparable revenue increased by 16% y/y, while adjusted EBITDA (excluding fair value adjustments on biological assets and operational leasing expense) declined by 7% and the adjusted EBITDA margin weakened to 15% (Q4 214: 18%). The decline in EBITDA reflects increased production costs in all regions, driven by higher feed costs as well as ongoing sea lice challenges. Marine Harvest's reported operating cash flow dropped by 56% y/y to NOK 233m (Q4 214: NOK 534m), hurt by a seasonal build-up of working capital. The group's operating cash flow was insufficient to fund quarterly net capex and investments of NOK 714m. Revenue and EBITDA, NOKm FFO and total debt, NOKm 3 25 2 15 1 5 21 211 212 213 214 215 3% 25% 2% 15% 1% 5% % 14 12 1 8 6 4 2 21 211 212 213 214 215 7% 6% 5% 4% 3% 2% 1% % Revenue EBITDA EBITDA margin FFO Total debt FFO/Total debt Unchanged dividend Weaker credit profile New financial target The proposed dividend of NOK 1.4 per share for Q4 215 corresponds to a total dividend distribution of NOK 63m in Q1 216, unchanged from the previous quarter. The quarterly dividend will be paid to shareholders in the form of a repayment of capital. Marine Harvest s free cash flow after capex is insufficient to cover distribution to shareholders, so the group s leverage is creeping upwards. The group s adjusted net debt increased by NOK 85m during the quarter, coming in at NOK 11.1bn (Q3 215: NOK 1.2bn), hurt by higher capex, continued high dividends and the weaker NOK. Consequently, the net debt to EBITDA and total debt to capitalisation ratios weakened to 2.3x and 39% (Q3 215: 2.1x and 38%), respectively. Following the business expansion and higher harvest volumes, the board has revised its long-term net interest-bearing debt target from EUR 95m to EUR 1,5m. Net debt and EBITDA, NOKm Total debt and capitalisation, NOKm 12 1 8 6 4 2 21 211 212 213 214 215 5. 4. 3. 2. 1.. 14 12 1 8 6 4 2 21 211 212 213 214 215 5 % 4 % 3 % 2 % 1 % % Net debt EBITDA Net debt to EBITDA Total debt Total debt to capitalisation Nordea Markets 2
Marine Harvest 19 February 216 High salmon prices in Europe, but the opposite in the US Industry demand was strong in Europe and Asia in Q4, combined with modest supply growth, prices increased in Europe. In the US and Chile however, prices were weak as a result of relatively high supply growth and an increase of European salmon into the American market. Reference prices Norway, per kg gutted weight Reference prices Chile and North America, per kg gutted weight 5 4 3 2 1 Q1 213 Q1 214 Q1 215 Q1 216 Norway 7 6 5 4 3 2 1 Q1 213 Q1 214 Q1 215 Q1 216 Chile North America Strong market outlook The market balance is expected to be tight in 216 as global supply is forecast by Kontali Analyse to decline by approximately 3%. At the same time, global demand is expected to be robust. Accordingly, the Nasdaq forward price for 216 has increased to a record-high NOK 5 per kg, up from NOK 44 per kg in the previous quarter. Cost inflation is a major concern The cost trend for the salmon farming industry continued up in Q4 215 owing to rising input factors and biological issues. In particular, costs related to sea lice are unacceptably high. The cost development is concerning and Marine Harvest expects high costs also in H1 216. Nordea Markets 3
Marine Harvest 19 February 216 Credit profile considerations The business risk profile is supported by: Supportive business risk profile elements Strong market position as the world's largest producer of farmed salmon, with a global market share of approximately 2%. Strong geographical diversification, with presence in all major salmonfarming regions (Norway, Chile, Scotland and Canada). Healthy financial profile. The business risk profile is challenged by: Challenging business risk profile elements Weak business risk profile Fish farming being a highly volatile and cyclical industry. The industry being characterised by volatile demand and supply patterns. High business risk, in particular biological risk. High event risk, with an aggressive acquisition history. Risk of increasing dividend distributions. We believe that the overall business risk profile associated with Marine Harvest can be considered Weak, according to the Expanded Rating Matrix below from Standard & Poor's. Expanded Rating Matrix - Financial Risk Profile - Business Risk Profile Minimal Modest Intermediate Significant Aggressive Highly Leveraged Excellent AAA/AA+ AA A+/A A- BBB BBB-/BB+ Strong AA/AA- A+/A A-/BBB+ BBB BB+ BB Satisfactory A/A- BBB+ BBB/BBB- BBB-/BB+ BB B+ Fair BBB/BBB- BBB- BB+ BB BB- B Weak BB+ BB+ BB BB- B+ B/B- Vulnerable BB- BB- BB-/B+ B+ B B- Core ratios Supplementary coverage ratios Supplementary payback ratios FFO/Debt (%) Debt/EBITDA (x) FFO/Interest (x) EBITDA/Interest (x) CFO/Debt (%) FOCF/Debt (%) DCF/Debt (%) Minimal > 6 < 1.5 > 13 > 15 > 5 > 4 > 25 Modest 45-6 1.5-2 9-13 1-15 35-5 25-4 15-25 Intermediate 3-45 2-3 6-9 6-1 25-35 15-25 1-15 Significant 2-3 3-4 4-6 3-6 15-25 1-15 5-1 Aggressive 12-2 4-5 2-4 2-3 1-15 5-1 2-5 Highly Leveraged < 12 > 5 < 2 < 2 < 1 < 5 < 2 Source: Standard & Poor's Intermediate financial risk profile We adjust the reported debt with respect to pension liabilities and operational leases Our opinion is that the financial risk profile associated with Marine Harvest can be considered Intermediate. According to the guidelines from S&P, we evaluate credit ratios on a time series basis. We consider the group's credit ratios for the previous two years, as well as the current year's forecast. We adjust Marine Harvest's reported debt by adding pension liabilities and operational lease commitments. The minimum lease payments under noncancellable operating leases amounted to NOK 1,49m as of 31 December 214. Nordea Markets 4
Marine Harvest 19 February 216 Bond details Ticker Issuer Corp Bond Issue Maturity Coupon Size (m) Rank MHG1 Marine Harvest ASA BB BB- 213-3-12 218-3-12 N3M +35 NOK 1 25 Senior unsecured Marine Harvest ASA BB BB- 214-5-6 219-5-6.875 % EUR 375 Unsecured convertible Marine Harvest ASA BB BB- 215-11-5 22-11-5.125 % EUR 34 Unsecured convertible Source: Stamdata Last trade level(s) The listed 218 (MHG1) bond last traded on the OSE on 18 February 216 at 1.15 (spread to swap +343 bp). Peer group, last bond trades on the OSE, bp 45 4 AUSS8 35 MHG1 Spread to swap 3 25 2 15 AUSS6 PRO BAKKA1 AUSS7 1 5 1 2 3 4 5 6 Maturity Source: OSE and Nordea Markets Key bond details for MHG1 Key bond details for the convertible bond issue Bank debt details Senior unsecured Subordinated secured bank debt Put option at 11% if a change-of-control event occurs The change-of-control event is triggered if any entity other than Geveran Trading or other companies controlled by John Fredriksen become owners of more than 5% of the shares Minimum equity ratio of 3.% Call option at 13.% from March 216 up to March 217 Call option at 11.5% from March 217 and thereafter. Senior unsecured Subordinated secured bank debt Put option at 1% if a change-of-control event occurs. EUR 555m facility agreement Maturity in Q4 219 Minimum equity ratio of 35% Accordion option for increase of facility by EUR 295m Lenders: ABN Amro, DNB, Nordea and Rabobank. Nordea Markets 5
Marine Harvest 19 February 216 Reported numbers and forecasts Income statement NOKm Total revenue -growth Gross profit EBITDA EBITA EBIT Net finance Pre-tax profit Taxes Net profit, continuing operations Discontinued operations Net profit to equity 29 14,499 7.5% 4,938 34.1% 2,194 15.1% 1,56 1.4% 1,334 9.2% 326 1,66 358 1,296 1,296 21 15,191 4.8% 4,941 32.5% 3,874 25.5% 3,221 21.2% 4,491 29.6% -29 4,282 1,152 3,13 3,13 211 16,133 6.2% 5,671 35.2% 3,363 2.8% 2,696 16.7% 1,182 7.3% 193 1,375 275 1,11 1,11 212 15,464-4.1% 3,627 23.5% 1,28 7.8% 531 3.4% 881 5.7% -91 79 377 49 49 213 19,199 24.2% 3,945 2.5% 3,975 2.7% 2,71 14.1% 3,212 16.7% -1,24 3,457-1,27 2,431 92 2,515 214 25,531 33.% 5,183 2.3% 5,221 2.4% 4,19 15.7% 4,254 16.7% -2,147 1,487-752 735 25 936 215 26,71 4.6% 4,763 17.8% 4,784 17.9% 3,693 13.8% 3,646 13.7% -466 2,189-638 1,551-2 1,531 216E 29,161 9.2% 7,115 24.4% 7,5 24.% 5,786 19.8% 5,786 19.8% -299 5,486-1,372 4,115 4,115 217E 29,13 -.2% 7,893 27.1% 7,764 26.7% 6,545 22.5% 6,545 22.5% -29 6,255-1,564 4,691 4,692 218E 24,775-14.9% 4,97 19.8% 4,97 19.8% 3,688 14.9% 3,688 14.9% -287 3,41-85 2,551 2,551 EBITDA (credit adj) EBIT (credit adj) Interest expense (credit adj) 2,228 1,357-382 3,95 4,512-357 3,547 1,35-345 1,373 991-328 4,266 3,46-737 5,64 4,533-684 4,95 3,611-611 7,491 6,7-5 9,247 7,827-491 9,726 8,36-488 Balance Sheet NOKm Goodwill Other intangibles Tangible assets Shares associates Interest bearing assets Deferred tax assets Other non-interest bearing non-current assets Other non-current assets Non-current assets 29 2,143 5,41 3,518 829 11,9 21 2,112 5,69 3,885 83 12,49 211 2,146 5,578 4,168 624 16 123 118 12,917 212 2,116 5,435 4,112 647 74 114 1,82 13,58 213 2,375 6,36 6,677 9 179 188 141 16,497 214 2,417 6,515 8,257 978 147 181 167 18,662 215 2,48 7,68 9,26 1,2 165 22 19,961 216E 2,48 7,68 9,787 1,2 165 22 2,542 217E 2,48 7,68 1,368 1,2 165 22 21,123 218E 2,48 7,68 1,349 1,2 165 22 21,14 Inventory Accounts receivable Other current assets Cash and cash equivalents Current assets 6,94 2,224 172 8,49 8,54 2,549 319 1,922 7,68 2,525 279 9,872 7,28 2,375 89 246 9,738 11,288 4,278 167 439 16,172 12,415 4,471 1,48 18,294 12,555 5,2 599 18,354 12,483 4,43 1,37 18,22 12,61 4,471 1,273 18,345 11,582 3,861 872 16,314 Assets held for sale 1,59 19 Total assets 2,39 23,412 22,789 23,318 33,728 36,974 38,316 38,763 39,468 37,418 Shareholders equity Minority interest 11,416 45 12,521 71 1,766 71 11,62 69 16,319 28 14,72 16 18,169 19,223 2,266 17,986 Deferred tax Convertible debt Long term interest bearing debt Non-current liabilities Pension provisions Other long-term provisions Other long-term liabilities Non-current liabilities 1,143 5,134 9 6,367 2,242 5,17 571 7,92 2,357 6,589 99 9,45 2,544 5,339 415 8,297 3,365 7,71 976 12,51 3,569 1,669 2,334 16,573 3,252 9,51 1,243 13,996 3,252 9,945 1,243 14,44 3,252 9,589 1,243 14,83 3,252 9,791 1,243 14,286 Short-term provisions Accounts payable Other current liabilities Short term interest bearing debt Current liabilities Liabilities for assets held for sale Total liabilities and equity 2,449 113 2,562 2,39 2,47 43 2,9 23,412 2,749 157 2,96 22,789 2,928 26 378 3,332 23,318 4,2 253 687 5,139 191 33,728 5,151 525 7 5,684 36,974 6,137 14 6,151 38,316 5,86 14 5,1 38,763 5,12 14 5,116 39,465 4,887 14 4,91 37,173 Cash and cash eq (credit adj) Total assets (credit adj) Shareholders equity (credit adj) Debt (credit adj) 172 2,39 11,461 5,486 319 23,412 12,592 5,737 279 22,789 1,837 7,83 246 23,318 11,689 6,629 439 33,728 16,346 9,535 1,48 36,974 14,718 12,169 689 4,26 18,187 11,773 1,659 4,37 19,153 11,451 1,658 41,84 2,34 11,95-1,41 38,964 18,24 11,297 Nordea Markets 6
Marine Harvest 19 February 216 Cash flow statement NOKm EBITDA Adj due to change in group structure Change in Provisions Other non-cash adjustments Net financials Dividends received Paid taxes Other Operating cash flow before NWC Change in NWC Operating cash flow CAPEX Free Operating cash flow Dividends paid Share issues / buybacks Discretionary cash flow Other investments / divestments Other Proceeds from sale of assets Net change to group borrowing/repayments Other Change in cash 29 2,194-41 23 326 52 268 2,453-757 1,696-586 1,11 295 1,45-231 325 8-1,866 243-44 21 3,874-1,77-215 -29-53 -18 2,14-924 1,216-918 299-1,251-952 -159 294 197 29 512 182 211 3,363 1,52-1,24 193-165 -4 3,667-632 3,35-1,79 1,956-2,865-99 -468-8 6 1,29 39-149 212 1,28-344 193 77-123 -88 923 442 1,365-1,25 34 425 765-395 -4 64-784 381 27 213 3,975 6-786 26-134 -116 462 3,433-1,463 1,97-1,967 3-826 -823 1 18 88-1,233-42 214 5,221-239 -212-1,76-1 -186 2,778 1,26 3,984-1,978 2,6-3,455-1,449-926 1,173 2,3-83 756 215 4,784-55 -844 9-69 65 3,269-1,128 2,141-1,375 766-1,8-1,34 1 18 88-1,13-1,22 216E 7,5-299 -1,372 5,334-29 5,125-1,8 3,325-3,151 174 444 618 217E 7,764-29 -1,564 5,911-144 5,767-1,8 3,967-3,556 411-356 55 218E 4,97-287 -85 3,77 1,415 5,185-1,2 3,985-4,751-766 22-563 Adjusted metrics Funds from operations (FFO) (adj) Operating cash flow (OCF) (adj) Free operating cash flow (FOCF) (adj) Discretionary cash flow (DCF) (adj) 2,61 2,78 1,492 1,492 4,262 1,574 656-595 3,892 3,38 2,31-564 1,71 1,693 668 668 3,529 1,65-363 -1,189 4,956 3,41 1,63-2,392 4,339 1,348-292 -2,92 6,99 5,652 3,852 72 8,756 5,746 3,946 39 9,238 5,52 4,32-353 Key ratios Profitability ROC ROIC after tax ROE after tax Debt & Interest coverage FFO/Debt FOCF/Debt DCF/Debt EBITDA interest coverage FFO cash interest coverage Leverage Debt/EBITDA Equity ratio Debt/(Debt+Equity) Capital expenditure CAPEX/Depreciation and amortisation CAPEX/Sales Working capital ratios Inventory turnover (days) Receivables turnover (days) Days sales outstanding (days) Per share data EPS EPS (adj.) DPS BVPS Equity valuation and yield Market cap. Enterprise value P/E P/BV EV/Sales EV/EBITDA Dividend yield Payout ratio 29 7.2% 7.6% 12.3% 29 47.6% 27.2% 27.2% 5.8-6.8 29 2.5 56.%.3 29.85.4 29 153 56 62 29 3.63.4. 31.9 29 15,125 2,245 11.7 1.3 1.4 9.2.%.% 21 23.3% 17.6% 26.1% 21 74.3% 11.4% -1.4% 1.9 21 1.5 53.5%.3 21 1.4.6 21 194 61 59 21 8.75.62.6 35. 21 22,57 27,346 7. 1.8 1.8 7.1 1.% 4.% 211 6.3% 4.4% 9.5% 211 49.9% 29.5% -7.2% 1.3 211 47.2%.4 211 1.62.7 211 16 57 62 211 3.7.61 1.1 3.1 211 9,261 15,798 8.4.9 1. 4.7 4.1% 26.3% 212 4.7% 3.4% 3.7% 212 25.7% 1.1% 1.1% 4.2-5.2 212 4.8 49.8%.4 212 1.51.7 212 166 56 69 212 1.9.4. 31. 212 19,192 24,85 46.9 1.7 1.6 19.9.%.% 213 13.6% 1.4% 18.% 213 37.% -3.8% -12.5% 5.8-4.8 213 48.4%.4 213 2.58.1 213 215 81 8 213 6.66 6.66.4 43.5 213 27,682 34,767 11.1 1.7 1.8 9.3.5% 32.8% 214 15.2% 11.3% 6.% 214 4.7% 8.7% -19.7% 8.2-7.2 214 39.8%.5 214 2.5.8 214 177 64 74 214 8 8 7.7 35.8 214 42,228 5,534 45.1 2.9 2. 1. 7.5% 369.3% 215 11.3% 9.1% 9.3% 215 36.9% -2.5% -17.8% 8.1-7.1 215 2.4 47.4%.4 215 1.18.5 215 172 71 84 215 3.4 3.4 5.4 44.3 215 49,81 56,976 35.2 2.7 2.1 1 4.5% 117.6% 216E 17.8% 13.7% 22.% 216E 61.% 33.6% 6.1% 15. 216E 1.5 49.6%.4 216E 1.48.6 216E 156 55 64 216E 9.14 9.14 7. 42.7 216E 55,9 62,722 13.4 2.9 9. 5.7% 76.6% 217E 22.5% 15.2% 23.8% 217E 78.9% 35.6% 3.5% 18.8 217E 1.2 51.4%.4 217E 1.48.6 217E 158 56 64 217E 1.42 1.42 8. 45. 217E 55,9 62,4 11.7 2.7 2.1 8. 6.5% 75.8% 218E 24.3% 8.6% 13.3% 218E 81.8% 38.2% -3.1% 19.9 218E 1.2 48.4%.4 218E.98.5 218E 171 57 72 218E 5.67 5.67 1.6 4. 218E 55,9 63,3 21.6 3.1 2.5 12.8 8.6% 186.2% Nordea Markets 7
Marine Harvest 19 February 216 Disclaimer and legal disclosures Disclaimer Origin of the publication or report This publication or report originates from: Nordea Bank AB (publ), Nordea Bank Danmark A/S, Nordea Bank Finland Plc and Nordea Bank Norge ASA (together the "Group Companies" or "Nordea Group") acting through their unit Nordea Markets. The Group Companies are supervised by the Financial Supervisory Authority of their respective home countries. Content of the publication or report This publication or report has been prepared solely by Nordea Markets. Opinions or suggestions from Nordea Markets credit and equity research may deviate from one another or from recommendations or opinions presented by other departments or companies in the Nordea Group. This may typically be the result of differing time horizons, methodologies, contexts or other factors. Investment opinions, ratings, recommendations and target prices are based on one or more methods of valuation, for instance cash flow analysis, use of multiples, behavioural technical analyses of underlying market movements in combination with considerations of the market situation and the time horizon. Key assumptions of forecasts, ratings, recommendations, target prices and projections in research cited or reproduced appear in the research material from the named sources. The date of publication appears from the research material cited or reproduced. Opinions and estimates may be updated in subsequent versions of the publication or report, provided that the relevant company/issuer is treated anew in such later versions of the publication or report. Validity of the publication or report All opinions and estimates in this publication or report are, regardless of source, given in good faith, and may only be valid as of the stated date of this publication or report and are subject to change without notice. No individual investment or tax advice The publication or report is intended only to provide general and preliminary information to investors and shall not be construed as the basis for any investment decision. This publication or report has been prepared by Nordea Markets as general information for private use of investors to whom the publication or report has been distributed, but it is not intended as a personal recommendation of particular financial instruments or strategies and thus it does not provide individually tailored investment advice, and does not take into account the individual investor's particular financial situation, existing holdings or liabilities, investment knowledge and experience, investment objective and horizon or risk profile and preferences. The investor must particularly ensure the suitability of an investment as regards his/her financial and fiscal situation and investment objectives. The investor bears the risk of losses in connection with an investment. Before acting on any information in this publication or report, it is recommendable to consult one's financial advisor. The information contained in this publication or report does not constitute advice on the tax consequences of making any particular investment decision. Each investor shall make his/her own appraisal of the tax and other financial merits of his/her investment. Sources This publication or report may be based on or contain information, such as opinions, recommendations, estimates, price targets and valuations which emanate from Nordea Markets analysts or representatives, publicly available information, information from other units of the Group Companies or other companies in the Nordea Group or other named sources. To the extent this publication or report is based on or contain information emanating from other sources ("Other Sources") than Nordea Markets ("External Information"), Nordea Markets has deemed the Other Sources to be reliable but neither the companies in the Nordea Group, others associated or affiliated with said companies nor any other person, do guarantee the accuracy, adequacy or completeness of the External Information. The perception of opinions or recommendations such as Buy or Sell or similar expressions may vary and the definition is therefore shown in the research material or on the website of each named source. Limitation of liability Nordea Group or other associated and affiliated companies assume no liability as regards to any investment, divestment or retention decision taken by the investor on the basis of this publication or report. In no event will entities of the Nordea Group or other associated and affiliated companies be liable for direct, indirect or incidental, special or consequential damages resulting from the information in this publication or report. Risk information The risk of investing in certain financial instruments, including those mentioned in this document, is generally high, as their market value is exposed to a lot of different factors such as the operational and financial conditions of the relevant company, growth prospects, change in interest rates, the economic and political environment, foreign exchange rates, shifts in market sentiments etc. Where an investment or security is denominated in a different currency to the investor's currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor. Past performance is not a guide to future performance. Estimates of future performance are based on assumptions that may not be realized. When investing in individual shares, the investor may lose all or part of the investments. Conflicts of interest Companies in the Nordea Group, affiliates or staff of companies in the Nordea Group, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives) of any company mentioned in the publication or report. To limit possible conflicts of interest and counter the abuse of inside knowledge, the analysts of Nordea Markets are subject to internal rules on sound ethical conduct, the management of inside information, handling of unpublished research material, contact with other units of the Group Companies and personal account dealing. The internal rules have been prepared in accordance with applicable legislation and relevant industry standards. The object of the internal rules is for example to ensure that no analyst will abuse or cause others to abuse confidential information. It is the policy of Nordea Markets that no link exists between revenues from capital markets activities and individual analyst remuneration. The Group Companies are members of national stockbrokers' associations in each of the countries in which the Group Companies have their head offices. Internal rules have been developed in accordance with recommendations issued by the stockbrokers associations. This material has been prepared following the Nordea Conflict of Interest Policy, which may be viewed at www.nordea.com/mifid. Important disclosures of interests regarding this research material are available at: http://www.nordea.com/equitydisclosure Distribution restriction The securities referred to in this publication or report may not be eligible for sale in some jurisdictions. This research report is not intended for, and must not be distributed to private customers in the UK or the US. This research report is intended only for, and may be distributed only to, accredited investors, expert investors or institutional investors in Singapore who may contact Nordea Bank, Singapore Branch of 3 Anson Road, #22-1, Springleaf Tower, Singapore 7999. This publication or report may be distributed by Nordea Bank Luxembourg S.A., 562 rue de Neudorf, L-215 Luxembourg which is subject to the supervision of the Commission de Surveillance du Secteur Financier. This publication or report may be distributed by Nordea Bank, Singapore Branch, which is subject to the supervision of the Monetary Authority of Singapore. This publication or report may be distributed in the UK to institutional investors by Nordea Bank, London Branch of 6th Floor, 5 Aldermanbury Square, London, EC2V 7AZ, which is authorised by Finanssivalvonta (Financial Supervisory Authority) in Finland and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority in the United Kingdom. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request. This publication or report may not be mechanically duplicated, photocopied or otherwise reproduced, in full or in part, under applicable copyright laws. Nordea Markets 8
Marine Harvest 19 February 216 Analyst Shareholding Nordea Markets analysts do not hold shares in the companies that they cover. No holdings or other affiliations by analysts or associates. Market-making obligations and other significant financial interest Nordea Markets has no market-making obligations in Marine Harvest. Recommendation definitions Outperform Over the next three months, the fixed income instrument's total return is expected to exceed the total return of the relevant benchmark. Market perform Over the next three months, the fixed income instrument's total return is expected to be below the total return of the relevant benchmark. Investment banking transactions Nordea Markets has no ongoing or completed public investment banking transactions with Marine Harvest. In view of Nordea s position in its markets readers should however assume that the bank may currently or may in the coming three months and beyond be providing or seeking to provide confidential investment banking services to the company/ companies Underperform Over the next three months, the fixed income instrument's total return is expected to be below the total return of the relevant benchmark. All research is produced on an ad hoc basis and will be updated when the circumstances require it. Distribution of recommendations Recommendation Outperform Market perform Under perform Total As of 1 October 215 Count 75 29 116 4 % Distribution 19% 52% 29% 1% Distribution of recommendations (transactions)* Recommendation Outperform Market perform Under perform Count 6 18 4 % Distribution Total 28 As of 1 October 215 * Companies under coverage with which Nordea has ongoing or completed public investment banking transactions. 22% 64% 14% 1% Issuer Review This report has not been reviewed by the Issuer prior to publication. Nordea Bank AB (publ) Nordea Bank Danmark A/S Nordea Bank Finland Plc Nordea Bank Norge ASA Nordea Markets Division, Equities Nordea Markets Division, Equities Nordea Markets Division, Equities Nordea Markets Division, Equities Hamngatan 1 Strandgade 3 (PO Box 85) Aleksis Kiven katu 9, Helsinki Essendropsgate 7 SE-15 71 Stockholm DK-9 Copenhagen C FI-2 Nordea N-368 Oslo Sweden Denmark Finland Norway Tel: +46 8 614 7 Tel: +45 3333 3333 Tel: +358 9 1651 Tel: +47 9 32 12 Fax: +46 8 534 911 6 Fax: +45 3333 152 Fax: +358 9 165 5971 Fax: +47 2256 865 Reg.no. 51646-12 Reg.no.2649 593 Reg.no. 399.326 Reg.no. 911 44 11 Stockholm Copenhagen Helsinki Oslo