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II . Multiexport Foods Overview

Agenda. Chilean Industry Competitiveness. II . Multiexport Foods Overview. Chile, historically has been one of the most competitive producers in the world’s salmon industry…. Chilean Competitiveness Period 1986 - 2006. Chilean salmon industry enjoyed two decades of healthy growth. X.

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II . Multiexport Foods Overview

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  1. Agenda Chilean Industry Competitiveness II. Multiexport Foods Overview

  2. Chile, historically has been one of the most competitive producers in the world’s salmon industry…

  3. Chilean Competitiveness Period 1986 - 2006 Chilean salmon industry enjoyed two decades of healthy growth... X XI Source: Multiexport Foods

  4. Chilean Competitiveness Period 2000 - 2006 EBIT per Kg (WFE) – ATLANTIC SALMON Current situation Source: Multiexport Foods

  5. Everything went well until the ISA virus hit the industry, cutting production by half…

  6. Chilean Competitiveness The ISA Crisis (2007-2009) Industry did not pay attention to strong sanitary alarms, Cáligus (sea lice) went out of control and by 2007 the first sanitary crisis hit the foundations of the industry Source: Multiexport Foods

  7. Chilean Competitiveness The ISA Crisis (2007-2009) EBIT per Kg (WFE) – ATLANTIC SALMON Source: Multiexport Foods

  8. ISA Crisis Aftermath: Action Required • Current model not working @ 600 Th Tons WFE • Government awareness: Employment and regional development • Action required: Redefine production model • Regulation / Enforcement required • Neighborhood system - fallowing period • Monitor ISA virus and Sea Lice levels • Adopt Sanitary best practices • Smolt quality control

  9. Chilean Competitiveness Post ISA (2010 - 2011) Good production performance + high market prices  Historic high margins Source: Multiexport Foods

  10. Chilean Competitiveness Post ISA (2010 - 2011) EBIT per Kg (WFE) – ATLANTIC SALMON Source: Multiexport Foods

  11. Chilean Competitiveness Post ISA (2010 - 2011) • Production decreased by 40%  Cáligus decreased  sanitary problems almost disappeared • Low supply  historic high prices & margins • Yield @ 4.5 Kg/smolt, Ex-cage cost @ 3.0 US$/Kg WFE • New and aggressive growth period(US$2,0bn investment)

  12. But the industry grew too much and too fast… making the same mistakes done in the past…

  13. Chilean Competitiveness Post ISA (2012 - 2013) Too good to be true…the new production level reached by the Chilean industry showed its old structural design problems. Source: Multiexport Foods

  14. Chilean Competitiveness Post ISA (2012 - 2013) EBIT per Kg (WFE) – ATLANTIC SALMON Source: Multiexport Foods

  15. Chilean Competitiveness Post ISA (2012 - 2013) What went wrong? • Production grew 70% for two consecutive years Market price dropped 45% •  Sea lice out of control (again) • Fast Sanitary deterioration  3 isolated ISA virus cases • Ex-cage cost increased US$ 1.0 - 1.5/Kg WFE : • Sanitary deterioration : 60% • Over regulation : 25% • Industry inflation : 15% • Industry suffered strong losses…(US$ 1bn) and stock prices dropped by 50-60%

  16. Towards a more Competitive & Sustainable industry Chilean industry has been working hard with the government to make further improvements on existing regulation General consensus, among a large majority of industry players, about the following issues to be changed : • Remove over regulation • Improve biomass distribution throughout the maritime space: • Improve Neighborhood System: Sea current model, fewer and larger, calendars • Dynamic Carrying Capacity depending on biological and environmental performance

  17. Towards a more Competitive & Sustainable industry In the meantime, industry has made significant improvements: • Caligus Control: • New products • Area Coordination • Strict treatment trigger • Stocking Decision: • Stocking planning and individual site selection defined at board meeting level • More information available for risk management • Government approval of neighborhood stocking plans • New regulation: Stocking adjustments by previous cycle performance

  18. Towards a more Competitive & Sustainable industry

  19. Agenda Chilean Industry Competitiveness II. Multiexport Foods Overview

  20. Multiexport Foods S.A. at a glance $ TON • One of the Leading Companies in the Chilean Salmon IndustryTop 3in Chile and Top 10 in the world MULTIFOO:CL Listed since 2007Santiago Stock Exchange 60,000 Tons 2014E (WFE) MMUSD 400 Turnover (2014E) 2,100 Employees HarvestMix (2014E) Sales Mix (2013) Sales By Country (2013)

  21. Multiexport Foods 25 years of growth Annual sales (Million usd) 2013: JV MITSUI 2010: Capital Follow-on (USD 89MM) 2007: IPO (USD 97MM) 2001: Acquisition of Pisciculturadel Rio Bueno S.A. 2002: Smoked processing plant 2008: ISA Crisis 2000: Acquisition of Chisal S.A. 1988: Salmon farming in Chiloé Island 1991: USA Sales Office

  22. Multiexport Pacific Farms S.A. Joint-Venture between leading partners Nourishing the future On January 2013 Multiexport Foods & Mitsui & Co. (USA) Inc, announced the joint initialization of a company specialized in the production and commercialization of Coho Salmon and Trout destined for Asian markets, with particular focus on China and Japan. MITSUI acquired 30% of the JV company shares in USD 36 million

  23. Multiexport Foods: Present in every stage Maximum Value Added MinimumCost Value Chain

  24. Farming facilities equipped with modern amenities to accommodate our professionals in remote areas

  25. Multiexport Foods: Farming Division (Fresh & Sea Water) Sea Water Fresh Water • 99 Concessions • 30 concessions in operation • 23/62 neighborhoods • State of the art technology • 5 Locations • 15 MM Smolts • 7 river/lake concessions

  26. Our company is recognized worldwide for the quality of its processing plants

  27. Multiexport Foods: Processing & Sales • Processing: • Among top 3 largest Chilean processing plants • 75,000 Tons WFE capacity (62 units/minute) • Largest Smokehouse in Chile (built in 2002)Designed by top quality Japanese smoker (Oji Salmon) Capacity: 7,500 tons WFE • Sales: • Competitive Sales Mix • Largest Chilean Smoked Salmon Exporter • Sales Office in USA • Experienced Sales Team

  28. Multiexport Foods Atlantic Salmon Ebit USD/Kg WFE Q1-2014, first financial recovery signs…

  29. Multiexport Foodsproductive performance • 2013 harvestsmainlyfrom XI region (>90%) whileindustryharvested 60% from XI region • XI regionhighlydeterioratedsanitarysituationduring S1-2013 • High Sea Lice Count • High Mortality due to SRS • 3 isolated ISA cases (Camanchaca, Los Fiordos, Multiexport) • Strong impactduring 2013: Low Harvest Weight and High Unitary Cost

  30. Multiexport Foods today… • Back to Basics: Farming focus and implementation of a new farming organizational model • Analytic , informed and coordinated stocking decision • No stocking growth until the performance improves • Smolt size increase: >120 gr • Operational Efficiency, Cash generation and Debt reduction

  31. Industry Benchmark - Financial Obligations 8,82

  32. Multiexport Foods Stock Shareholder Composition (Apr-14) -19,2% IPSA* Px: 3.773 Traded in Santiago Stock Exchange Since July 2007Free Float 35% -17,9% Px: 118,9 MULTIEXPORT FOODS -73,9% AUSTRALIS Px: 35,0 -75,9% -13,8% AQUACHILE Px: 353,6 INVERMAR Px: 43,1 (*) IPSA Index : average of top 40 Chilean companies listed in Santiago Stock Exchange

  33. Investment Opportunity Nourishing the future StrongGrowth Potential Convenient Consolidation Vehicle SolidCommercial Base Experienced Management Specie diversification with focus on Atlantic Salmon

  34. Thank You

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