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Capital Markets Day 2018Atria Denmark & EstoniaNovember 2018

Atria Denmark & Estonia 1 Jan – 30 September 2018

Q3 Q3 Q1-Q3 Q1-Q3EUR million 2018 2017 2018 2017 2017

Net sales 24.7 25.0 72.0 73.6 98.9

EBIT 1.6 1.4 4.3 3.9 5.2

EBIT % 6.7 % 5.7 % 6.0 % 5.2 % 5.2 %

Adjusted EBIT 1.6 1.4 4.3 3.9 5.2

• The business operations of Atria Denmark & Estonia met their set earnings target. • In Estonia, Atria's sales to retail increased during January-September. • In Denmark, the net sales decreased due to tight price competition. • The EBIT of the business area increased slightly thanks to good cost management and a

favourable sales structure.• In Estonia, the African swine fever still occurs amongst wild boars, but no new cases have

been found at pig farms.

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Capital Markets DayAtria Estonia

Executive Vice President Olle Horm

November 2018

Atria Estonia

• Full cycle meat company – from primary production to fresh meat and meat products

• Atria is the second biggest pork producer in Estonia

• Atria is not involved in grain farming, cost of grain and feed has significant impact on company’s financial results

• Market share in meat products is appr. 15% (Aug/Sept18, AC Nielsen)

• Main market is retail sales Estonia with some export of meat

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Macro Economics

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• Growth has decelerated in Estonia and Lithuania and is expected to ease in all Baltic countries in 2019 and 2020.

• GDP growth in Estonia 4,9% in 2017, 3,5% in 2018E and 3,2% in 2019E.

• Household income and domestic demand remain strong, but increasing unit labourcosts. Labour shortage remains one of the main production limiting factors.

• Weaker external demand have started to bite into exports

• Overall, all three Baltic economies remain well balanced, show little signs of overheating

• High oil prices will have a particularly significant impact given the relatively large share of energy in in Estonia inflation basket compared to other Member States.

• Employment is projected to grow by about 1% in 2018 and to slow substantially thereafter, under the influence of negative demographic factors.

Sources: National statistics and Swedbank Research

Number of Pigs & cattle 1996-2017; th. heads

6

234,7 251,3

285,7

379

284,5

230250270290310330350370

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

veised sead

Source: Estonian Board of Statistics

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Import & export of agricultural meat & meat products2018 (jan-aug.)

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KAUBAGRUPP EKSPORT (EUR) IMPORT (EUR) BILANSS (EUR)

Elusveised 12 334 629 308 252 12 026 377

Elussead 0 1 516 934 ‐1 516 934

Veiseliha jahutatud 2 204 878 3 491 476 ‐1 286 598

Veiseliha külmutatud 2 211 087 6 485 595 ‐4 274 508

Sealiha 14 960 696 34 389 600 ‐19 428 904

Lambaliha 416 095 1 768 375 ‐1 352 280

Hobuseliha 474 708 394 764 79 944

Veise, sea jms.söödav rups 1 630 140 1 615 847 14 293

Kana, kalkuni jms liha ja söödav rups 8 063 865 27 111 068 ‐19 047 203

Seapekk ja  searasv 349 617 637 068 ‐287 451

Soolatud, suitsutatud liha ja söödav rups  177 431 1 284 393 ‐1 106 962

Vorstitooted 8 731 680 7 617 907 1 113 773

Lihast, rupsist või verest tooted või konservid

15 536 072 17 963 541 ‐2 427 469

KOKKU  67 090 898 104 584 820 ‐37 493 922Source: Estonian Board of Statistics

Development of Wheat price 2018

Source: https://www.zmp.de

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Meat consumption Dynamics in Estonia 2002-2017

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64,871,4 68,4

78,5

12,1

13,99,7 9,6

26,835,7 33,7

40,7

20,7 17,722,1 25,8

0102030405060708090

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Mea

tco

nsum

ptio

npe

rca

pita

(kg)

Liha ja rupsid kokku Veiseliha Sealiha Linnuliha

Source: Estonian Board of Statistics

Dynamics of Estonian meat products retailmarket, bimonthly (Nielsen)

10 Nielsen

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

500

1 000

1 500

2 000

2 500

3 000

AS 2016 ON 2016 DJ 2017 FM 2017 AM 2017 JJ 2017 AS 2017 ON 2017 DJ 2018 FM 2018 AM 2018 JJ 2018 AS 2018

1000KG total p

rocessed

 meat

1000KG

CC TOTAL CF TOTAL MS TOTAL MEAT IN MARINADE TOTAL PROCESSED MEAT

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Marketshare development of Estonian meat industries(volume, aug-sept 2018 vs 2017, Nielsen)

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30,1

14,3

10,28,7

7,35,45,35,3

2,4 2,12,0

‐5,0

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

‐1,0 ‐0,8 ‐0,6 ‐0,4 ‐0,2 0,0 0,2 0,4 0,6 0,8 1,0

Volume marke

tshare (%

)

Annual change in marketshare (pp)

RAKVERE ATRIA RANNAROOTSI TALLEGG PRIVATE LABELS SAAREMAA NÕO OSKAR OSKAR ARKE UVIC

Retail sales segments mix

• The biggest segments are fresh minced meat and grill sausages. The previous year the positions were the opposite.

12

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

Segments Q1‐Q3 2013‐2018 (kg)

2013

2014

2015

2016

2017

2018

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Noveltys 2018

13 2018-11-28

Retail market of Estonia (shares, 2013-2017)

• 5 biggest retail chains have a total marketshare of 80%

• The number of shopping centers increases rapidly, local countryside shops disappear

• Rimi closed Säästumarket shops (discounter) and opened new shops Mini Rimi

14

21,6%

18,7%

16,9%

17,8%

9,6%

4,0%

21,1%

18,2%

16,7%

16,5%

9,4%

4,2%

20,8%

18,7%

16,3%

15,7%

8,4%

4,0%

21,0%

18,4%

16,4%

16,0%

7,9%

4,2%

22,0%

18,5%

17,2%

15,1%

7,3%

4,8%

COOP MAXIMA SELVER RIMI PR ISMA OG ELEKTRA

2013 2014 2015 2016 2017

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General Meat Market Development trends

• Economy is booming, but unfortunartely the sale of meat & meat products is level

• Inflation & legislation driven growth of costs issignificant

• Constant defficiancy of workforce is accompaniedhuge salary inflation

• General profitability of meat market is on a decline

• ASF is still an issue

Capital Markets Day 2018Atria Denmark

CFO Tomas BackNovember 2018

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Denmark Market Update – cold cut market position.

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• ATRIA Denmark remains market leader with 19% of total market.

• Total cold cut market is down by -0,6% MAT 2018 (moving annual total).

• Atria gaining market share with a +1,2% growth, driven by strong performance of 3-Stjernet and Aalbæk brand.

• Private label market is continuing growing by +2,7% driven by more chain-specific house-brands within cold cut.

ATRIA19 %

(+1,2%)

TULIP FOOD COMP17 %

(+0,8%)

T. OTHER27 %

(-6,6%)

T. PRIVATE LABEL37 %

(+2,7%)

MARKET SPLITCOLD CUT

Denmark Market Update – Consumer trends

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• Consumption of cold cut is moving from home-prepared meals and lunchboxes to foodservice channels such as schools, canteens and cafes/restaurants as well as to convenience stores.

• However, cold cut remain large category within retail with 11,4 million lunchboxes being prepared every week in Denmark and remain a substantial part of lunch meals in Denmark.

• The cold cut category is evolving with new food trends such vegetarian, non-meat, flexitarian and animal welfare growing rapidly.

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Denmark Market Update – Customer trends

Confidential: Business Plan 201919

Retail

• Atria Denmark hold a very broad distribution in Denmark and is listed in all major retailers in Denmark. 3-Stjernet brand a household brand in Denmark.

• The Danish retail market is dominated by 4 big retailers Salling Group, COOP, Reitan and Dagrofa plus the German discounters Lidt and Aldi.

• The discount sector in Denmark account for more than 40% -the highest shares of total retail in the Nordics countries.

• Salling Group (35% market leader) and Reitan continue to perform well, while COOP and Dagrofa have suffered and lost market share.

Foodservice• Atria aiming to grow its share in foodservice by entering the foodservice

segment with both 3-Stjernet and Aalbæk brands.

• High focus on penetrating all major foodservice players with current range of products with focus on canteens and schools.

Export• Atria Denmark is now approved for China (Q1 2018) and expect to establish a

solid and ongoing business in the Chinese foodservice and retail segments during 2019.

• High focus on export to near-by-markets such as UK, Sweden and Norway.

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Denmark Market Update – Customer trends

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