The Portuguese clipfish market 2017

The Portuguese clipfish market 2017 08.02.2018 Johnny Thomassen Fiskeriutsending i Portugal

On this presentation we will try to answer: - How is the Portuguese economy doing? - Are the consumer habits changing? - How is the consumption of Clipfish at Home? - What is the performance of Clipfish in Modern Distribution? - What is the performance of Clipfish in the Cash & Carry Market? 08.02.2018 The Future of clipfish By Johnny Thomassen 2

How is the Portuguese economy doing?

2017: Deficit All Time Low, 1,5% 08.02.2018 Presentasjonstittel 4

Deficit lower than 1% Growth 2018 2% Tourism growth of 10% to 14% 08.02.2018 Presentasjonstittel 5

Unemployment Rate Under 9% in 2017. 08.02.2018 Presentasjonstittel 6

Portuguese Consumers Confidence Index with a positive trend and with the highest level of Confidence of the last years WORLD EUROPE PORTUGAL Source - AC Nielsen 08.02.2018 The Future of clipfish By Johnny Thomassen 7

How are consumers changing in Portugal?

PORTUGUESES HH S ARE BUYING LESS BUT MORE EXPENSIVE FOOD FMCG KPI s Evolution YTD P13 17 vs YTD P13 16 To t a l F M C G ( F a s t M o v i n g C o n s u m e r G o o d s ) Purchase Frequency +0.4% Household buyers +0.5% Spend per Trip -0.1% Average Price +3.4% -2.7% Volume Evol. +0.7% Value Evol. -3.5% Volume per trip Source:Kantar 9

..AND SPEND MORE WHEN OUT OF HOME OOH Drinks & Snacking Evolution Out of Home YTD Q3 2017 vs. homologous OOH +12.5% (units) PURCHASE ACTS 243 M (-3.1%) 54 x (-1.1%) FREQUENCY VOLUME / ACT 1,45 uni (+16,0%) 1,33 (+15.7%) SPENT / ACT Source:Kantar 10

AFFECTING IN HOME PURCHASES MAINLY FOOD CATEGORIES, OTHER CATEGORIES STABLE FMCG Volume, Value and Average Price Evolution per Sector YTD P13 2017 vs YTD P13 2016 Food Beverages Home Care % Volume Evol. % Value Evol. % Avg Price Evol. + 3% Evol. vs homólogo + 3% - 3% Evol. vs homólogo - 3% Evol. vs homólogo Source:Kantar 11

LIDL AND ALDI ARE GROWING AND HOLDING FMCG* VALUE ( ) FMCG Retailers Share and Evolution % Value YTD P13 2017 vs. homologous 32,9 32,5 26,2 26,3 YTD P13 2016 YTD P13 2017 9,1 7,1 6,6 6,3 5,9 4,3 8,1 7,5 6,4 6,9 5,7 4,7 1,0 0,9 1,0 0,7 Continente Pingo Doce Lidl Traditional Trade Others ITMI Auchan Minipreço E.Leclerc Aldi 1,3 13,7 3,6 3,7 33,3-0,4-4,7-8,0-7,3-5,9 * F M C G = F a s t M o v i n g C o n s u m e r G o o d s Source:Kantar 12

How is the consumption of Clipfish at Home?

One of the major products for the Portuguese families 3.5 million Portuguese HH s bought at least once Cod Fish in 2017 87,3% Penetration 6,0days Frequency 19,20 Spend X Act 2,33kgs Volume X Act Source - Kantar 2017 Volume Evol. % -5,7% Value Evol. % -0,6% Source:Kantar 2/8/2018 The Future of clipfish By Johnny Thomassen 15

LESS SHOPPERS AND LOWER PURCHASE INTENSITY IN COD DURING 2017 HOWEVER A STABLE CATEGORY IN VALUE Total Cod Fish KPI s (Market Indicators) Ytd P13 2017 vs Ytd P13 2016-1.0pts Source:Kantar

DRIED COD DROVE MARKET TREND Total Cod Fish KPI S Contribution to Segments evolution (%) and Volume Share Ytd P13 2017 vs Ytd P13 2016 KPI s Contribution for Growth Volume Evol. (%) -5.7% Total Cod Volume Share (%) -6.3% Cod Nat. Salt/Dried 86,3 85,7-0.7% Cod Frozen Salt/Dried 10,0 10,5 Ytd P13 2016 Ytd P13 2017 Penetration % Frequency Volume per Trip Average Price ( /kg) Population Source:Kantar

HOWEVER DRIED COD SHOPPERS ARE SPENDING MORE PER BASKET FROZEN SLOW DOWN RECRUITMENT Total Cod Fish Segments KPI S Ytd P13 2017 vs Ytd P13 2016 Volume Evol. (%) -5.7% Ytd P13 2016 Ytd P13 2017 Penetration % Frequency Spend per Trip Volume per Trip Kgs 88,2 6,1 18,76 2,404 Total Cod 87,3 6,0 19,20 2,332-6.3% Cod Nat.Salt/Dried 74,8 74,0 4,7 4,6 24,42 25,35 3,144 3,080-0.7% Cod Frozen Salt/Dried 40,6 41,1 3,1 3,0 8,89 8,98 1,039 1,023 Source:Kantar

BOTH COD SEGMENTS ARE INCREASING PRICE STEADILY Dried cod fish & Frozen Cod Average Price Evolution Mat P13 2010 to Mat P13 2017 10,0 Dried Cod Frozen Cod 9,0 8,0 7,0 6,0 5,0 4,0 Source:Kantar

WITH PRICE INCREASE AFFECTING DRIED COD ATTRACTIVENESS Dried cod fish Volume and Penetration Evolution Mat P13 2010 to Mat P13 2017 Volume 000s Kgs Penetration % Source:Kantar

WHILE FROZEN RESISTS AND ABLE TO ACHIEVE FLATENESS Frozen cod Volume and Penetration Evolution Mat P13 2010 to Mat P13 2017 Volume 000s Kgs Penetration % Source:Kantar

LOWER FREQUENCY OVERLAPS BASKET SIZE ISSUES IN DRIED COD Dried cod fish Measure Tree Main market indicators Ytd P13 2017 vs Ytd P13 2016-0.8pts Source:Kantar

LIDL GROWTH STANDS OUT, WILE CONTINENTE MAINTAIN LEADERSHIP Dried cod fish Retailers Volume Share and Evolution Ytd s P13 2017 vs Ytd P13 2016 Ytd P13'16 Ytd P13'17 37,2 36,6 35,0 33,0 7,4 7,1 6,4 6,0 4,6 4,4 5,2 4,2 2,5 3,6 3,8 3,1 Continente Pingo Doce Intermarché Others Auchan Trad. Trade Lidl Minipreço -7.9% -0.4% -9.5% +2.7% -10.2% -25.1% +36.3% -23.6% Volume Evol. Vs Ytd P13 16(%) Source:Kantar

What is the performance of Clipfish in Modern Distribution?

Total Food Stores In 2017, both volume and value sales increased for total Codfish market Total Dry+Frozen Codfish Value Sales (M ) % Value Change Vs. Year Ago Volume Sales (M Kg) % Volume Change Vs. Year Ago MAT Nov. 2015 290.272 43.371 MAT Nov. 2016 288.942 0% 42.762-1% MAT Nov. 2017 294.092 +2% 42.978 +1% Source : Nielsen Markettrack W52 2017 Value sales overcome the result of 2015

Frozen Codfish continue to grow more vs Dry in 2017. Increased 7% its value sales and 3% its volume Total Food Stores Dry Codfish also increased its value and keeps leading the market Dry Codfish Frozen Codfish MAT Nov.16 2016 MAT Nov.17 2017 MAT Nov.16 MAT 16 Nov.17 2017 Value Sales (M ) 234.673 236.285 54.269 +1% Volume Sales (M Kg) 36.354 36.406 6.408 57.807 6.572 +7% 0% +3% Source : Nielsen Markettrack W52 2017

Christmas period (December) increase on volume sales 20% Total Food Stores Volume Sales (Kg) Nov-Dec % Weight vs Year Total Dry+Frozen Codfish 9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 Dez 15 Jan 16 Fev 16 Mar 16 Abr Mai 16 16 Christmas 15 Jun 16 Jul 16 Ago 16 Set 16 Out 16 Nov 16 18% Dez Jan Christma 16 17 s 16 Fev 17 Mar 17 Abr 17 Mai 17 Jun 17 Jul 17 Ago Set Christma 17 17 s 17 Out 17 Nov 17 20% Dez 17 Source : Nielsen Markettrack

Comparing with Christmas 2016, average price /kg total Codfish decreased in 5% 8,00 7,00 6,00 5,00 4,00 3,00 2,00 1,00 Total Food Stores Price /Kg Fev 15 Abr 15 Jun 15 Ago 15 Dez15 7,25 Out 15 Dez 15 Fev 16 Abr 16 Jun 16 Dez16 7,03-3% Ago 16 Out 16 Dez 16 Fev 17 Abr 17 Jun 17 Dez17 6,70-5% Ago 17 Out 17 Dez 17 Fev 15 Mar 15 Abr 15 Mai 15 Jun 15 Jul 15 Ago 15 Set 15 Out 15 Nov 15 Dez 15 Jan 16 Fev 16 Mar 16 Abr 16 Mai 16 Jun 16 Jul 16 Ago 16 Set 16 Out 16 Nov 16 Dez 16 Jan 17 Fev 17 Mar 17 Abr 17 Mai 17 Jun 17 Jul 17 Ago 17 Set 17 Out 17 Nov 17 Dez 17 Source : Nielsen Markettrack

¾ of the Market are in Supermarkets Dry+Frozen Codfish Dry Codfish Frozen Codfish 42763 42979 6 7 30 28 36354 36406 6409 6573 5 5 12 15 30 28 30 28 42 42 44 44 32 31 22 24 22 23 26 26 MAT Dez 16 MAT Dez 17 MAT Dez 16 MAT Dez 17 MAT Dez 16 MAT Dez 17 Volume Sales (000 Kg) HIPERS SUPERS GRANDES SUPERS PEQUENOS TRADICIONAIS Source : Nielsen Markettrack W52 2017 Hypers are more important in Frozen Codfish 25%

Traditional channels increased volume sales, while supers had negative or null dynamics % Var. Volume Sales (Kg) Dry+Frozen Codfish Dry Codfish Frozen Codfish Hypers 6% 7% 2% Big Super 0% 0% 0% SmallSuper -6% -6% -5% Traditional 12% 4% 29% MAT W52 17 MAT W52 17 MAT W52 17 Source : Nielsen Markettrack W52 2017

What is the performance of Clipfish on the C&C market?

In 2017, total Codfish Market continues increasing value sales and increased also its volume Total C&C Total Dry+Frozen Codfish Value Sales (000 ) Volume Sales (000Kg) MAT Nov. 2015 26.342 3.769 MAT Nov. 2016 27.273 3.696-2% +4% MAT Nov. 2017 32.602 +20% 4.185 +13% Source : Nielsen C&C panel

Both Frozen and Dry Codfish revealed a good performance Dry increased 21% its value sales Total C&C Dry Codfish MAT Nov. 2016 Value Sales (000 ) 21.576 %Value Change vs Year Ago Volume Sales (000Kg) 2.928 %Volume Change vs Year Ago MAT Nov. 2017 26.060 +21% 3.342 +14% Frozen Codfish MAT Nov. 2016 MAT Nov. 2017 5.697 768 6.542 +15% 843 +10% Source : Nielsen C&C panel

Since Summer very good market increases. Pré Christmas period, important for a good year in sales, increased 16% Total C&C Volume Sales (Kg) Total Dry+Frozen Codfish Nov-Dec % Weight vs Year 21 % 24 % 28 % Assuming December = last Year 700000 600000 500000 400000 300000 200000 100000 +4% 0 Nov15 Jan16 Mar16 Mai16 Jul16 Set16 Nov16 Jan17 Mar17 Mai17 Jul17 Set17 Nov17 Christmas 15 +13% Christma s 16 +16 % Christma s 17 Source : Nielsen C&C panel

Tendence in last periods is decreasing prices Total C&C Price /Kg Nov 15 7,30 C&C MARKET Nov 16 7,72 +6% Nov 17 7,74 0% Dez14 Fev15 Abr15 Jul15 Set15 Nov15 Jan16 Mar16 Mai16 Jul16 Set16 Nov16 Jan17 Mar17 Mai17 Jul17 Set17 Nov17 Dez14 Fev15 Abr15 Jul15 Set15 Nov15 Jan16 Mar16 Mai16 Jul16 Set16 Nov16 Jan17 Mar17 Mai17 Jul17 Set17 Nov17 Jan15 Mar15 Jun15 Ago15 Out15 Dez15 Fev16 Abr16 Jun16 Ago16 Out16 Dez16 Fev17 Abr17 Jun17 Ago17 Out17 Source : Nielsen C&C panel

Dry Codfish with same average price as Frozen. 9,5 Total C&C Price /Kg 8,5 7,5 6,5 5,5 8,2 7,3 7,4 7,4 7,7 7,8 7,6 7,5 7,4 7,1 6,9 6,9 6,9 7,0 6,9 7,0 6,6 6,1 6,1 6,3 7,0 7,3 7,8 8,0 7,1 7,2 7,2 7,4 7,6 7,5 7,5 7,5 7,4 7,0 7,2 7,8 7,0 7,1 7,0 7,2 7,3 7,3 7,2 7,4 6,7 6,5 7,8 8,4 8,0 8,2 8,2 8,0 7,9 7,1 7,3 7,5 7,4 7,6 7,6 7,2 7,3 7,3 7,4 7,7 7,8 8,0 7,7 8,0 7,8 7,4 4,5 3,5 Dez14 Fev15 Abr15 Jul15 Set15 Nov15 Jan16 Mar16 Mai16 Jul16 Set16 Nov16 Jan17 Mar17 Mai17 Jul17 Set17 Nov17 TOTAL BACALHAU CONGELADO TOTAL BACALHAU SECO Source : Nielsen Markettrack W52 2017

Do Cash & Carry Vs. Retailers have the same trend in Clipfish Market?

Both HORECA and Food Stores increase volume and value sales Codfish market (dry+ frozen) Cash&Carry Food Stores () Volume Sales Volume Change % Volume Sales Volume Change % 4.185 Ton 32.602 M 42.978 Ton 294.092 M Source : Nielsen C&C panel and MakretTrack Source : Nielsen RMS panel

- How is the Portuguese economy doing? - Lowest Deficit Since Democratic Republic in 1974, (-1,5%) - Lowest Unemployment last 10 years(- 8,5%) - Turism except to grow + 10% in 2018 - Consumers strong confidence in economic growth - - Are the consumer habits changing? - Less Home Consumption,more eating Out - Less, more expensive food - - How is the consumption of Clipfish at Home? - Less Volume(-5,7%) but almost same Value (-0,6%)

- What is the performance of Clipfish in Modern Distribution? - Total cod market stable on +/-43.000 tons last 3 years - Slight increase on Frozen Codfish(+3%) do not reduce volume of dried Codfish(0%) - What is the performance of Clipfish in the Cash & Carry Market? - Increase in both Value(+20%) and Volume(+13%) - Dry Increase More than Frozen, on both Value(+21) and Volume(+14%) - Frozen Increase Value(+15%) and Volume (10%) - CONCLUTION 2017; - People eat less Clipfish at home, but more when going out. - Dried cod is more attractive and grows faster than frozen cod in the Horeca Chanel 08.02.2018 Presentasjonstittel 40

Good perspectives for Portugal in 2018! 08.02.2018 Presentasjonstittel 41

Takk for idag!