L abrīt ! Laipni lūdzam līdz Nortura!

1. Labrīt! Laipni lūdzamlīdz Nortura!

2. Laipni lūdzamlīdz Nortura!

3. Agenda on Tuesday 6th Sept 0900 - 1300 • 0900 - 0915 Transport to Nortura HQ • 0930 – 1000 Welcome and mutual introduction • 1000 – 1200 • The meat and poultry sector in Norway • Nortura as Market Organizer • Corporate and Member communication • 1200 – 1300 Lunch • 1300 Transport from Nortura to The Norwegian Cooperative Centre

4. Co-operatives in a modern world • A globally spread and acknowledged company structure, both in developed and developing countries • Common in commodity markets characterised by numerous and / or small producers / suppliers • Effective instrument to balance the power and the profit sharing between the different players of the value chain • Co-operative organised food industry has high reliability on commodity supplies (from members) • Profit sharing dependent on each member’s participation with the Co-op, and disconnected from invested capital • Robust and long-term company structure, but also characterised by time comsuming processes on decissions • Members wish for maximum commodity prices every day often challenges the co-op’s need for equity capital and a stronger consumer market focus

5. Nortura SA at a glance • Key figures 2010 • Annual turnover USD BN 3 • Been in business for 80 years • Launched 128 new products on the consumer market • Production : 223 000 tons fresh meat 39 000 tons of eggs • Market share: 70% on carcass level 50% on processed products • Industries in 34 municipalities in 15 counties • Approx 5 800 man years -63% men - 37% women - 70 nationalities - 48% specialist qualifications • Organised as a co-operative owned by 18 000 farmers Headquarter

6. Member organisation 18 000 members Working committees 5+1 members (poultry, egg, sheep, pigs, poultry meat) 140 Districts 11 Region Committees (400 elected representatives) Annual General Meeting 110 delegates Election Committee 7 members Nortura Council Board members RC-leaders AC-leaders Control Committee 3 members 5 Advisory Committees Animal specific issues Board of Directors 9 member-elected + 5 employee elected

7. Nortura Corporate Governance Nortura SA Runar Larsen CEO HR & communication Innovation & marketing Sales Operation Poultry & egg Economy, finance & IKT Egil Olsvik Arne Kristian Kolberg Torleif Bjella Tor Aamot Kristin Olstad Schea Kai Linnes Executivedirector Executivedirector Executivedirector Executivedirector Executivedirector Executivedirector Procurement & member Frode Vik Executivedirector

8. Positive Trustworthy Innovative Focused

9. Results before extra payments & tax in Mn NOK

10. Nortura’s equity ratio in %

11. Plants: Shrinking numbers 1999-2010

12. Nortura’s volumes 2007 - 2010 2007 2008 2009 2010 Tons Tons Tons Tons Pigs 83 650 86 450 85 502 85 880 Cattle 63 700 65 100 64 978 58 467 Sheep and lamb 16 500 17 600 16 629 16 303 Chickens 47 900 55 350 51 472 56 109 Turkeys 4 980 6 150 7 311 6 510 Eggs 35 960 37 900 39 469 39 435 Total Nortura 252 690 268 550 265 361 262 704

13. Poultry 74.8% Nortura’s marketshare on wholesale level Egg Red Meat 71.2% 67.8% • Competitors: • Fatland • Spis • Furuseth • Prima Jæren • Andre • Competitors : • Rema (Norsk Kylling) • Cardinal • Competitors : • Arne Magnussen • Jonas H. Meling • Nødland og Gundersen • Knallgoe egg • Toten Egg

14. «Food Safety is the cornerstone of the society’s and consumers' confidence in meat and egg products” Food safety: A compulsory feature of the food value chain • Top focus on: • Public health • Animal welfare • Animal health • Environment • Food quality • Operations: • Risk analyses • Quality Assurance • Independent audits • Contingency plans • Communication

15. Use of antibiotics in European animal husbandry

16. Total production 1990 - 2010

17. Total meat supply, some countries (FAO) kg/capita/year

18. Beef prices Norway, Germany and Denmark : Farmer’s net price

19. The farmers’ incomes: - 70 % derives from market (consumer) prices - The food industry carries the revenues back to the producer Meat and egg constitutes approx 40% of the market revenues

20. Nortura’s price formation vs. an EU-company Coming week price on carcassannounced Achieved market price Starting point EU Costs of processing & sale Price corr.etc Costs of animal transport and slaughtery operations Dk Gvt fee Mar-gin Farmer Consumer Ma r g i n Ma r g i n Gvt. fees Costs of processing & sale Calculated costs of slaughtery operations etc MO Fee Kostnader i foredling og salg Price corr. etc N Carcass prices change when wholesale prices and/or calculated costs change Consumer market price incl VAT Achieved wholesale prices observed every week Starting point N Target price / Wholesale price decided every year/half year

21. The Norwegian Market Organisation’s objective is to optimize volumes and prices • The market organisation for meat and eggs has vital functions to secure: • Market balancing at optimal domesticvolumes • Price formation: Implementingthe target prices • Market access for all producers nationwide • = Fundament for farmers’ market revenues • Nortura is delegated to operatethe Market organisation. This leaves Nortura with a keyrole in the Norwegian agricultural policy. • Nortura is as Market Organizersubject to give market access to producers all over the country, also non-members

22. Prognosis: Market balance Year 2011

23. Targetprice Market Organisation: Pigs- Lamb - Eggs WMP + tarifs Price Tarif reduction if prices exceed the upper price limit for 2 weeks in a row Upper price limit Observed prices Target price Unbalance: Observed prices above target price. Market organizer releases stocks or requests supplementary imports Time A year Unbalance: Observed prices far below target. Market organizer implements measures (storage, export, production reduction schemes, sales promotion etc.)

24. Volumebased Market Organisation - Beef WMP + tarifs Unbalanced market: Increasing volume deficit may result in prices climbing above planned level. Market organizer releases stocks or requests supplementary imports Tarifs reduction if prices exceed the upper price limit for 2 weeks in a row Upper price limit Observed wholesale price Volumes (pink) and prices Planned avg. wholesale price Time 6 mths • Unbalanced market: Observed increasing volume surplus may result in wholesale prices far below planned level. • Market organizer implements measures (storage, production reduction schemes, sales promotion etc. )