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Annual statement by the Group CEO

Annual statement by the Group CEO Key figures Business overview Important events in 2019

Strong foundations for the future

One Lerøy

Annual statement by the Group CEO

In 2019, we recorded the highest revenue in the history of the Group. We have for the first time broken through the NOK 20 billion ceiling, with a total revenue of NOK 20.5 billion. Our company can continue its impressive rate of development sustained over the past 25 years. We are not satisfied to report that the profit figure before tax fell from NOK 3.7 billion in 2018 to NOK 2.7 billion in 2019, but do acknowledge that the major, comprehensive investments made throughout the value chain over a long period of time are now starting to produce results. We are also very much aware of the hard work and efforts of all our employees, every single day. This gives us grounds for an optimistic outlook. 2019 is in the past now, and we must focus on the exciting times that lie ahead of us, and where we can make changes.

Good catches and increasing prices

Our fisheries operations were positive in 2019, with good catches and increasing prices for most species. High raw material prices, however, represented challenges for our onshore facilities. For Farming, 2019 came with a number of unforeseen incidents in all three regions, and these had a negative impact on development in terms of both volume and costs. For VAP, Sales & Distribution, we can report in total a very positive development and our best year to date. Nonetheless, this segment still has a lot of potential that is not exploited.

Over the past 20 years, Lerøy has invested in and developed a fantastic, fully-integrated value chain for seafood. Few companies worldwide can boast such strong foundations. We now have to shift our focus from major, strategic investments to exploiting the full potential of what we have created. The question is, how?

Over the past 20 years, Lerøy has invested in and developed a fantastic, fully-integrated value chain for seafood. Few companies worldwide can boast such strong foundations.

Henning Kolbjørn Beltestad, CEO of Lerøy Seafood Group

Unique opportunities

Our Group is now a global operation with more than 60 companies, 4,600 employees and a high number of different nationalities covering the entire value chain. Our goal is to create “The world’s most efficient and sustainable value chain for seafood”. To achieve this, we are absolutely reliant on developing a unique integration throughout every single part of the value chain, by focusing on “ONE LERØY”.

As a fully-integrated company, we gain unparalleled opportunities to drive the development of our value chain and product categories, in collaboration with key end customers worldwide. The future development of our company will be determined by our ability to achieve continuous improvements, increased efficiency, innovation and development of sustainable solutions throughout the value chain. We have to work hard to sustain the positive developments achieved over the past – always keeping our customers at the front of our minds, and relying on our values as strong foundations. “Open, honest, responsible and creative” are our values, and they underpin everything we do at Lerøy.

As a Group, we have a strong desire to improve. We can look back on several great years with impressive results, but we are constantly striving to do better. In 2017, we started the process of developing a continuous improvement programme specially designed for our Group – LERØY WAY. This was implemented after we had reported record-high results. Lerøy Way comprises the principles by which we can improve together as a company – One Lerøy.

Lerøy Way is derived from our own experiences and lessons learned, combined with tried and tested improvement methods from other major international companies, which have completed similar systematic improvement programmes in order to understand, control and improve their processes and increase value for the customer. It is important, however, to ensure that Lerøy Way is our programme, designed to solve our challenges. Lerøy Way is based on the most established techniques, but adapted to our requirements. It is a comprehensive and long-term process that will receive high priority as we work to generate an even stronger winner culture in Lerøy, moving forwards.

As a Group, we have a strong desire to improve. We can look back on several great years with impressive results, but we are constantly striving to do better.

Henning Kolbjørn Beltestad

Creating Together

I am extremely proud of my colleagues – Lerøy's employees – who are the most important resource for the Group. Every single day, all year round, they supply seafood amounting to five million meals in more than 80 countries. Our talented employees have competencies in a large number of disciplines covering the entire value chain. We are and shall continue to focus on guaranteeing proper training and competencies in every part of the Group, aiming to provide for our customers’ future requirements.

Together, we will create “The world’s most efficient and sustainable value chain for seafood”!

Thank you again for all your hard work in 2019. The future is bright!

Henning Beltestad

Key figures

Key Figures 2019

Business overview

Lerøy Seafood Group ASA is a global seafood corporation with its head office in Bergen. We have close to 5,000 employees who process between 350,000 and 400,000 tonnes of seafood every year via our value chain, corresponding to around 5 million meals every day.

Lerøy - A global seafood company

Business overview

Our values – open, honest, responsible and creative – represent the very foundations of everything we do, and we work hard to achieve our vision through developing the world’s most efficient and sustainable value chain for seafood.

Click here for this year's digital solution for the Business overview chapter

Important events in 2019

Fleet renewal for Havfisk AS

In April 2018, the Group signed an agreement with Vard for the construction of the trawler “Kongsfjord”. The new trawler is the same size as “Nordtind” (80.4 x 16.7 metres), which was handed over in 2018, and is a combination trawler, like Nordtind (fresh/frozen fish). Hand-over of Kongsfjord took place in January 2020, and the vessel was christened in Båtsfjord on 15 February 2020. This vessel will be the first stern trawler with integrated energy storage system, with the option for both battery operation, diesel-mechanic and diesel-electric propulsion. It has tanks for storage of live fish and equipment for full exploitation of residual raw materials as silage.

Jøsnøya, Hitra (Farming): Official opening of new factory

In September 2019, the Group’s new salmon processing plant on the island of Jøsnøya in Hitra was officially opened, with 800 guests attending a two-day ceremony. Production in the factory started in 2018. The factory represents a significant investment that will boost the Group's operations within processed products. The Group is confident that this is the world’s most high-tech salmon processing plant. The plant, which can produce 70,000 tonnes per year with just one shift a day, will provide a significant increase in the volume of fillets transported to the market. This provides a considerable boost to improved efficiency for the salmon value chain.

First release from the RAS facility in Kjærelva

In May 2017, Lerøy Vest AS and Sjøtroll Havbruk AS started work on the construction of one of the world’s largest RAS facilities for young fish at Kjærelva in Fitjar municipality. On completion in 2019, the building became one of the largest and most productive young fish facilities in the world. The facility has 12 departments, two of which are hatchery departments and 10 are RAS departments for further growth. The production facility has the most advanced filters for water purification both for input and output water and close to zero discharges of nutrient salts. The first roe were introduced in the plant in 2018. The first fish from the plant were released on 2019. In 2020, the majority of releases for Lerøy Sjøtroll will be large smolt weighing 250-500 grams.

Construction start in Belsvik, extension in Laksefjord and opening in Bjørsvik

In the autumn of 2019, Lerøy Midt AS started construction work on the extension of the RAS facility in Belsvik, in Heim municipality, Trøndelag. The aim with the extension project is to facilitate production of large smolt for Lerøy Midt AS, potentially at a higher volume than in Kjærelva. Construction work continued in 2019 on the extension of the RAS facility in Laksefjord, Lebesby municipality, Finnmark. This development project is scheduled for completion in December 2020, but the previous development stages will allow the plant to supply a substantial volume of large smolt before completion.

In 2019, Lerøy Sjøtroll opened a reconstructed and far more resource-efficient young trout facility in Bjørsvik, Alver municipality, Vestland.

Opening in Stamsund

In March 2019, Lerøy Norway Seafoods started production of processed fish and ready-to-eat products at their plant in Stamsund in Vestvågøy municipality. Industrial processing of whitefish in Norway is challenging, but the Group is confident that such operations are possible and that the challenges can be solved by means of improved marketing and more efficient operations. This process is difficult and will take time, but the Group is confident there are gains to be made.