Grieg Seafood Asa Ord

Hello everyone and welcome to the presentation of the fourth quarter of Greek Seafood and the whole year 2024. My name is Andreas Kwame and I am the head of the company in Greek Seafood. With me today is Magnus Johannesson, who came to Greek Seafood in September last year and took over as CFO earlier this month. You will get to know him through the presentation today. In the fourth quarter and through the following year, GRIG SIFU has faced biological and operational challenges. These challenges, in combination with ongoing investment obligations, have gradually led to us losing some of our financial flexibility. We know that the performance has not satisfied expectations, and therefore we present today a transformation program that we think will give us the best conditions for strengthening Grieg Seafood and equipping companies for sustainable and profitable growth in the future. We relocate resources to develop our strong Norwegian regions. We carry out necessary operational improvements and cost-effectiveness, and increase the level of ambition in this area. As previously commented, we have been in dialogue with investors for a possible sale of our operations in Canada. The negotiations have not progressed, and we have therefore chosen to terminate this norm. In the future, we will drive Canada with lower investments and resource use. This occurs in a situation with increased political and regulatory uncertainty in the country. In addition to reallocating our resources, we are planning a significant refinancing that will ensure financial liquidity and flexibility going forward. In today's presentation, we will first go through the quarter. I will stick to the main line, so that Magnus can use more time to go through our transformation program. Then I will round it all off in the end. A little about the highlights of the quarter. Our operational EBIT, The quarter ended at minus 74 million kroner, something we are of course not satisfied with. The main reason for the result to end as it did is pearl snowmaneter in Finnmark. In one of our locations there were two million fish, as well as still weak results from Newfoundland, which is still in an early phase. Furthermore, we experienced challenging climate conditions in Canada, as a result of changing the operational, economic and regulatory conditions in the region, which has changed our future plans in Canada. We expect a decline of 1.7 billion kroner. Magnus will come back to this in his review. As a result of this, We will continue to make changes in our priorities for the allocation of capital, and the mentioned transactions will contribute to this foundation for sustainable growth in the future. What is our transformation program? In short, it means that we channel the resources where we think the best result has been discovered and gives the best return. The company does not have sufficient financial resources to implement the opportunities we have, which we must prioritize. We therefore want to reallocate the financial resources for the development of our Norwegian region. In general, this means that we continue to work with operational improvement, as we communicated earlier, Our ambition is to transfer knowledge and experience from what we have done in Rogaland to our activities in Finnmark, and in this way liberate the value potential in this region. At the same time, we make the necessary steps to ensure our values in Canada, and in this way maintain future options for this business. The financial foundation for the implementation of our strategy will be secured through various measures. One, the issuance of a hybrid obligation of up to 2 billion. We are also planning for a sale leaseback of our small post office in Finnmark. Our main goal is to have control over everything that has to do with biology, fish and production, but we do not necessarily need to own steel and concrete. In addition to refinancing existing loans, this will strengthen our financial flexibility in the future. In total, this will reduce our net and interest rates by 1.5 to 2.2 billion kroner, which will give us the necessary flexibility and liquidity to carry out our plans. Magnus will come back to more details about these transactions later in the presentation, but before that I would like to update you on the development of our various operating units. Rogaland delivered well this quarter as well. It is a stable, good region, but we also came far when it comes to mail. Good production in the sea. We went out of the quarter with full MTB utilization. We also had good production in Rogaland, which gives us an advantage in that we slaughtered something more than guiding 800 tons. But a superior share of 95% and the postage that I mentioned, still gives good results. The region's EBIT is still 14 kroner per kilo, despite some lower slaughter weights. Årdal Aqua has been a facility that we have built together with partners. There we have had our first ... There are two or three modules now finished out of four. Two of them are in production. They got fish in in October last year. And the first set out in the sea will take place in April this year. The cost in Rogaland is around 62 kroner per kilo, and we expect the same stable development in the QN. The volume for 2025 is 30,000 tons, and of this, 6500 tons will be stored in the QN. The result in Finnmark is greatly affected by the pearl snot manet attack on Vinnerland. There we got a wave of pearl snot, which both caused death in the facility, but we also chose to take out this location. There were two million fish, and that is to ensure fish health. This means that we slaughtered very small fish at the end of the year. Low average weight, which again affects price achievement in Finnmark. And again, when you slaughter a small fish, it does not become the whole volume of it. It has to come to about 1300 tons under guiding. This event in Vinnerland, we directly lost 75 million euros. We guided from between 70 to It's 90, but we managed to open the result to only minus 75. The underlying production is very good in Finnverk. It also gives the guiding a sense of security for what we are going into this year. We have never had such high MTB utilization in the two Norwegian regions, ever. We are at full MTB when we enter the year, and that gives me confidence that we have volume to produce through the winter into the spring. This is something that we have used the last two years to achieve. Everyone remembers what we have been through when it comes to Spiro, and it is a reconstruction after Spiro, and what is in force now performs very well. The winter sore problem that we have been through the last few years, there are still some winter sores in Finnmark, but significantly reduced compared to what was before, and that is related to the measures that we have implemented. We are looking at 32,000 tons, 25% up from 2024. The volume of slaughter in the first quarter is estimated at 7,600 tons. In the quarter that has not had any slaughter, we should not have any slaughter in the herd. Production in the sea is stabilized. This is the event we had last summer, and the fish grow well. We have taken an action in BC on the basis of the political situation we are well aware of. The investments are maintained, and we only carry out the necessary maintenance investments in this region. We have also provided some deductions, as a result of an unclear political regulatory situation in this area. We take through slagting in the second quarter, and our guiding for 2025 is at 12,000 tonnes. So, the new fund. There is still good production in the sea. We have a superior share in Newfoundland at 96%. There are still high costs, which is related to low-capacity use, but we are happy to say that we have had a positive EBIT in Newfoundland in January. We feel a situation on the political side. Trouble at twelve o'clock. We have chosen that most of the fish we have in this area will be taken out in February, just to be on the safe side if they should arrive at twelve o'clock from March. We have also provided deductions, and they are related to changing framework conditions, changing strategic priorities in the company, and reducing investment needs in the short and long term. We slaughtered 10,000 tons in 2025, and 4,700 of them will come in the first quarter. With this, I will give the floor to Magnus for a review of the financials. Good morning.

Thank you, Andreas. Good morning, everyone. Many said it was a bit difficult to start with, but I think it will go very well. I look forward to getting to know all of you in the room today, investors, analysts, everyone. I think it will be very exciting. But before I go into the details, I would just like to say that I have the impression that we have the best conditions for delivering profitable growth and profitable growth in the future. And that we are now doing the necessary measures and priorities in our capital strategy to do just that. And there is no doubt that biological and emotional care has had a very big effect on our growth in the fourth quarter and also in recent years. We take this to us, and we understand the seriousness of how to address it, and we will do just that. And it's like this. This affects the employees as well, but I can assure you that we are very motivated to take this situation, and I also appreciate the trust I have received from Andreas and the rest of the management to do it. Yes. Yes. If we start with the results, this is characterized by the biological conditions of the winners. But if we start on the revenue side, we see that we have managed to achieve a good income in the quarter, characterized by good prices, higher superiors, and increased volume from slaughter. If we go down to the cost side, we see that we have an increase in average slaughter costs of 1.9 kroner per EBIT, but not least also because we have a higher share of volume coming from our high cost regions, i.e. Canada. This means that we end up with an EBIT of minus 74 million, which corresponds to minus 3.1 kroner per kilo. This is a very important issue in the results management, and it is related to the deductions. When we have to do a deduction assessment, we have to evaluate many scenarios. With such a big political and regulatory uncertainty now, while we are pulling down capital investments for the future, this will have an effect on how we evaluate the value of these properties. It is important to note that this follows a methodology that is defined in a standard that we cannot deviate much from. If we go to the cash flow, we see that it has given us a negative operational cash flow for the quarter at minus 213 million. This is characterized by biomass, but also by changes in our working capital towards the end of the year. When it comes to investments, we have wanted to maintain our investment level when it comes to the expansion of Postmolt. When the prerequisite for doing this has been that we are going to finance this out over operational cash flow, then it says for itself that it will have implications when the cash flow gives out optional conditions. Therefore, at the end of the year, we also moved down to financial cash flow, took up a bridge loan of 750 million kroner. And then we go into a little deep dive into the investments. In the past year, we have invested both in growth, i.e. in post-mold and in maintenance, at the same level as before. And in the future, we will maintain this investment pressure, just to implement and break down the synergies we see from the post-mold investment, and take the good synergies we see in Rogaland into Finnmark, and just therefore implement the expansion of Adamselv. But with such an investment level, without being able to finance it through a cash flow, this will drag this down to the cash buffer you have internally. And when you can't pull the cash buffer down, you may have to take your credit facilities. This makes us enter the quarter with 4.8 billion in net interest. This means that there is a negative implication from EBITDA, a positive implication from biomass construction, but then significantly affected by net investment of over 400, up to 450 million. The last column here is about other changes, i.e. customer demand and delivery aid primarily, which then makes us leave the quarter with 5.6 billion in net revenue aid. And this is not something that can continue. That is obvious. And we must also have a capital discipline in order to allocate the capital where it gives the highest return. That is quite obvious, but we must also do something about our balance. We plan to do three things that optimize for the following. We must ensure flexibility and robustness in our balance. We must ensure satisfactory liquidity supply, but this money must not go to projects where we have not yet seen a drop. Hence, reprioritization against the Norwegian business. If I start by addressing the first goal of increased flexibility, we will do this by allocating a hybrid obligation that will be classified as own capital. This is why it does not count in our balance. This bond will help to pay off the green bond, while ensuring a strong single capital and flexibility in the balance. But we also want to set a long-term liquidity buffer in Grieg Seafood, which means that we do not want to be managed by steel and concrete, we want to focus on operations. Therefore, we will also make a sail leaseback of the Adams Elves facility, where we focus on maintaining operational control, being able to optimize our operations, without a sail leaseback affecting this negatively. And what we see is that we get quite good, favorable conditions on the sale threshold, both on yield level, but also on ownership value, which is around 2 billion. And there has been concrete interest here from several, but we now go into an interconnected process with an ownership sector. It is important to say that this has no negative implications on how we run our business. It is important because we have a value chain perspective that we will maintain. This should not come in the way of that. The third pillar is to create the optionality in our capital bonds, where a lot of our capital investments have been allocated to Canada. That will be reversed. And in that connection, I can also share that over the past few weeks, we have managed to achieve a reduced capital bond against Canada of 500 to 600 million kroner, which we instead can invest in our Norwegian regions. And when you say the profitability in our Norwegian regions, after the potential that lies in Finnmark, it is perhaps not so surprising. But what does this have to do with specific effects? We said first that we strengthen single capital. We have not been in breach with Covenant, and we also went out of the year without being in breach with Covenant. And we see that the effect this gives us will give us up to 50% in single capital per form, with a starting point in Q4. But it is also the liquidity we need to maintain the investments and continue the strategy of Postmolt and take out synergies both short- and long-term at cost, not least, and biological security. We see that these, both the hybrid and the sale aspect, and the optionality measures we take, will give us about 3.2 billion in liquidity effects, before we take into account the down payment of possible yield posts and further strengthening of our balance. Then there is the strategic rationale. We now have a target strategy, we have seen it work, and we will copy this further, but it requires that we complete the projects that are underway. We do that. We therefore get refinanced Green Bond, which is still in June. That is important. We get a substantial liquidity boost that will be important for stability, both when it comes to securing projects and doing proactive projects to secure operational stability, but also to create opportunities to have flexibility in our resources. And not least, the optionality in Canada, where there has been a lot of focus on how much capital we have. into areas that have not met the expectations of you and the market in general. And we have taken that seriously. Therefore, it is fun to be able to set the foundation to implement it. And I therefore think it is natural for me to give the floor back to Andreas to take you further on the way forward. Thank you.

Thank you, Magnus. I will look at the future. Magnus went well through our plans on the financial side. I will try to talk a little more when it comes to operational. These are the two regions we have, Norway and Canada. Our refocus is back to Norway, that is what should be focused and allocated capital for the future. Here we also see that in 2025, we will have about 75% of our fish in our Norwegian regions, and it is stable in Canada. Bridge Columbia, as we have said for a long time, is a bit of a hold. When it comes to Newfoundland, we can look at it as a stabilized drift and have it as an optionality. I want to go back to this with Postmalt. If we look at Rogaland, for example, then it is now actually an area that ... Among the best in the country is the utilization of the capacity in the factory, the MTB. We have 17,800 tons in MTB. We have a volume of 30,000 tons. This comes from our goal strategy and what we have achieved over the years. We are the leaders in this. We have good capacity utilization. The results speak for themselves. We have significantly less lice treatment. We have a shorter time in the sea, so they are less exposed to the pathogens that must be in the sea. We have a lower economic advantage as a result of survival has gone significantly up, or mortality has gone significantly down. And where we have pure postmortem groups, we are at 8%, while the region has had both 22% and 17% on average in recent years. So we definitely mean that we are on the right track, and in 2025, with the Ordal Aqua in place, we will be close to a kilo of the fish that will go out into the sea. But the potential is at least as big in Finnmark as in Rogaland. That should be our focus. We have carried out many measures in Finnmark, especially after we got the Spiro parasite. We have installed UV filters so that no one should enter the facility. We have added greater capacity for light treatment and larger boats. We have driven on our facilities, both for LUS, but also for those who are up for this list, which we have now experienced for two years in this area. And we have vaccinated our fish. Finnmark had in 2022, they were on a level with Rogaland in results, then came Spiro. And now it is a reconstruction after Spiro, which we are also investing in Postmalt in Adamshelm, as you can see in the picture here. Canada, our focus is to secure values and maintain future optionality in this area. This is what we will do by to scale down the ambitions related to Capex in Newfoundland. Strategic investments in BC, long-term investments in BC, we have seen hold in anticipation of this transition plan that has been communicated until 2019, which is not yet finalized. Yes, I don't think we see Canada. A little about Outlook and a summary. The market for our products is good. There is still a big and good demand. We have had a very good entry this year, both from our Norwegian region and from the new fund. We are very happy. There are good prices and good demand in the market. We have some more contracts this year than we have had in the last two years. The uncertainty in the last two years is related to the winter season, so it was very difficult to enter a lot of commitment on subfishing. With a completely different situation this year, we now have a contract portfolio of 22% for the whole year, and in the first quarter of 2023. The volume this year is expected to be 84,000 tons by 2025. Of this, 18,800 tons will be distributed to the three regions in the first quarter. I am very happy with the development we are seeing in Rogaland and Finnmark. The growth in Finnmark is good. Full capacity utilization on MTB is a very positive thing. Production in BC has stabilized after last summer with low DO and algae challenges. Now we have good production and it is stable. No slaughter in the first quarter. In Newfoundland, this generation was largely eliminated in February. A little summary of the quarter. Winners, I think it was in all newspapers and pictures of the soup that came into the facility. It has had a great impact on our results, and we had to take out the two million with fish. That said, we have been good with fish again in the sea, and we managed to maintain the NTB. Good production in Norway, with good use of NTB. All time high, never had such a high input. Good and stable production in Newfoundland, and improved production in British Columbia. We have launched a transformation program on the company, where we reallocate our resources away from the Canadian operation and fully focus on the Norwegian, where we have had a good income in recent years. If we get a mark up on the level with Rogaland, this will be very good. Only the license value in this company in Norway is the last auction as a starting point. Then you have a value in the company of 12 billion, only based on license value. So the company is a solid company. Then I try to translate the words to questions. Henrik Knudsen, Carnegie.

You don't say much about the process of selling assets in Canada. Can you say more about that?

Yes, we had long-term conversations, especially with one actor. We went out to partnerships and sales. In the end, the conditions were that we found it best to keep it internal, in combination with the fact that we had a big challenge with a president who lives a little further south there, with 12 and these things, and that makes it self-sufficient and reduces its costs.

I'll just add something. What we saw in the negotiations is that when the transaction security on the deal is too low, as a result of 12, it is not important to continue with a sale when you do not know if it will be completely carried out. Then it is about creating optionality and giving shareholders the opportunity to maintain a strategically important position and rather take out the benefits they have received from a sale by reducing capital obligations. So when you take the risk-reward we had received there, it was not the appropriate part in any way.

And then another thing. You say you want to maintain operational control by this Selisberg agreement. Then one should interpret it as a sale of Finnmark is completely out of the question.

Yes, we are UDIT and the flexibility in our balance is created. We want to maintain operational control in Finnmark. And we see that Finnmark can be as good an area as Rogaland. But we cannot let the operational and biological control in the company out of our company. Therefore, it is concrete and steel.

Thank you, Nordea. Can you tell us a little bit about which investments you are cutting down on in Canada, the 500-600 million? And maybe also, if you can say now, if you completely close the door for a sale partnership, even if things would change next year or month or week in Canada?

Should you start with the investments? Yes, I can start with the investments. It is primarily related to PSA, the post-molding plant in Newfoundland, which is being reversed. It is important to say that there are no cables and cables in the winter yet. The concrete phase has been completed, so by stopping that investment, the concrete will have a chance to resist the wind and wind in the coming year. So it's not like there are pipes and cables out of electricity contacts and things like that. When it comes to other investments in Foundland, we will continue to focus on ensuring stability in the operations there. Maintenance and replacement will also be carried out.

Another question. If we close, we will close. But if there are conditions that give share value, we will consider it. Thank you.

Hi, Alexander Aukner for MB. We had the same questions, but we can go a little further on the cost side. If we have the same volume in 2025 as we had in 2024, is there any reason to believe that the production cost will go down this year versus 2024?

This year, towards the end of the year, we will be able to get it down, but of course we have scaled a lot over there for a larger volume that should come. Now we come to that, so now we need a revaluation of our cost base, that is, fixed costs and boats and everything that is out of equipment, to see how much we can scale this down to get the costs down in terms of the volume we now have.

So we can assume that everything else is the same as loss making in Newfoundland, at least until the end of the year?

It depends on what the price is up in this, but our goal is to get the costs down in Newfoundland. It will never come down to the Norwegian level with this volume, but we can get it down compared to the current situation. Thank you.

Martin Karlan, ABG Sundal Collier. What are the expectations for the construction of biomass and labor capital through 2025? Can you tell us about that or other larger expenses, whether it's for tax or... Yes?

One more time, the last part of the question.

Whether there are other expenses in relation to tax or other larger positions that we should be aware of?

Biomass construction will probably be quite the same as it was last year. When it comes to In terms of labor capital, we will have to make decisions on the delivery side, and we will also add new content, so it will improve accordingly. When it comes to other costs, it is of course the remaining costs of demobilizing the entire project, but we have managed to limit them to a minimum. So yes, there are some costs that come with it.

And on Finnmark, it doesn't say much about costs. It says maybe that it will gradually go down, but would I say stable in Q1 and then gradually down through the year, or can it already happen in Q2?

It also happens gradually in Q1. So we see that the trend is positive.

Okay, thanks.

Yes, a few follow-up questions on that labor capital. You said that there would be an improvement in the supplier value, but right now it is still called an artificial high in comparison to what it used to be.

When you have limited flexibility in operational relations when it comes to planning payments, it will of course have an impact on the supplier's obligations. But what is important is that we go out of what we have to do in the course of planning and optimization, so that we can have more long-term planning and communication with the suppliers regarding payment obligations. I think it will have an effect on suppliers, so that they are not kept artificially high, for example by moving payments, so that we can actually have a much more planned solution that affects our business, or is planned against our business. That's how I see it.

Olav Troaten, DNB Markets. On the transformation plan, the bridge loan on 750 miles is not mentioned. Can you say if it has been converted to permanent, or will it also be paid in the course of the year?

Yes, the deadline for that was 18 months when we drew it up in December. Our goal is to pay it down, at least with the measures we are doing now. And we think it is essential because we see that we have lower financing in other places, for example in Lisbecken. So that's where we are on that. So it will be the same classification. Thank you.

I have a few questions. You mentioned that Finnmark is not currently selling other businesses. Are there other parts of the Norwegian business that can be sold?

No, but as I said, we are most interested in performing, and the way we do it now in Pinmark can be relevant in the future, but to date, no concrete plans for that.

We can also add that we see enormous interest in our steel and concrete. We see enormous value potential in underlying values in our facilities, and that is something we see in action as a structurally possible transaction, which is in line with what we do in Adamsell for the entire portfolio we have on our own.

You mentioned that especially 12 has been a topic in discussions around sales in Newfoundland. If that turns out to be the case, do you think the process will resume, or are there other things that have been stopped?

No, we can speculate on that, but if the numbers don't go down, I expect that interest will be more intense than it was now, in the uncertain situation between Canada and the US.

When it comes to Newfoundland, the topic has been Milestone Payments. Has that been a limitation in relation to the discussion on sales?

I can answer that. It hasn't. But as we see it now, with the relocation we are doing now, and with the plans we have Going forward, when we think about volume in Newfoundland, we don't see that we have more than 15,000 tonnes in the horizon where these milestones were valid, so that means that there are no milestones.

Just to add to that, I've gotten a lot of SMS from your colleagues, so the fact that we don't achieve that volume doesn't affect how the milestone is treated in intangibles in our business. It's very important when you're crunching.

In the first quarter, what is the average weight of slaughtered fish in Q1 in Finnmark and Rogaland so far?

We had half of the winners in the first two weeks. in January in Finnmark, but the average weight in Finnmark is now almost 600 grams higher than it was at the same time last year. In Rogaland we have very good average weights of up to 5 kilos.

A question back to Newfoundland. Can you tell us a bit about how Newfoundland and B.C.

performed after the demolition? Many have asked about the distribution. No, I won't say anything about that. We'll get back to that in the first quarter. As many have pointed out, when we stopped these processes, Of course, there are a lot of people who share, or not a lot, but there is of course a lot of interest. So to avoid any impact on the interest and share information, we come out and wait for it to happen. Without any signals in any way, but it is of course important not to close every door of information there, or open every door of information there.

There were no more questions from the web, there are more from the audience.

Then all you have to do is say thank you for coming. In the middle of the winter holiday. Yes. You can visit Bergen's winter holiday this time.