Leroy Seafood Group

And welcome to Læresif Group's fourth quarter presentation for 2025. My name is Henning Beltstad, CEO in Læresif Group, and with me today I have Sjur Malm, CFO. First of all, I will take you through the highlights in a quarter, then Sjur Malm will take you through the key financial highlights, and then I will come back and talk a little bit about the outlook going forward. Our goal is to create the world's most efficient and sustainable value chain for seafood. We are a fully integrated company both in redfish and in whitefish and are a total supplier of seafood. Our fully integrated value chain is our competitive advantage. Our customers are seeking sustainability and health, quality and traceability, stability and availability, and convenience. And we as a partner can help our customers with that. Highlights for the quarter. High profitability on higher spot prices for salmon and trout. Cost development in farming better than expected. Strong profitability in WAP sales and distribution, surpassing 2025 target of NOC 0.25 billion. And low quarters in Wildcatch, somewhat offset by significant price increase. The harvest guidance for Norway in 2026 will be around 95,000 ton as guided earlier. And the board proposed NOC 2.5 per share as a dividend for 2026. And for fourth quarter, we had an operational EBIT of $758 million compared to $799 fourth quarter 2024. We report in three segments, farming, wildcatch, bup sales, and distribution. And I will start with the highlights for the farming. Fourth quarter of 25 marks the end of the best year ever biologically, and we are very happy to see that. Record growth rates and biomass production, low mortality, high sub-share and higher harvest weights. And gradually improving prices through the quarter. The weighted SSI prices 2025 is knock eight lower than 24. But for the fourth quarter, it's five knock higher than same quarter 2024. The cost in the fourth quarter is down and better than guided. There has been a strong biological development year-to-date in 2026, and the guidance for 2025 reached, and we rate a harvest volume for Norway in 2026 of 195,000 tons. And then we go into the different regions, and we start with Lerøy Rura, a strong biological development in 2025, record net growth, high survival rates, high superior share, and a continued high license utilization. And the harvest profile in Fort Quartza is impacted by ISA detection in October 2025. which have given us a higher volume in the beginning of the quarter with the lowest prices. The cost is 25, and fourth quarter is significantly down year on year, and we expect a cost increase first quarter 26 on lower capacity utilization. So far this year, strong biological development year to date, 26, and estimated harvest volume is 49,000 ton for 2026. And if we look at the harvest volume in the fourth quarter, we had 60,395 tons and a harvest weight of 4.3 kilo compared to 3.7 kilo last year and EBIT per kilo value chain of 20.6 compared to 15.3 same quarter 2024. So a good performance in the Aurora and we are very proud of the development and the high volume that we achieved this year of close to 55,000 tons, which is up 10,000 tons from year 2024. L'Hermite improved biology, increasing standing biomass during fourth quarter of 25, cost development better than expected with a quarter-on-quarter decline, expect slight quarter-on-quarter cost increase in first quarter of 26, strong biological development year-to-date, 26, and harvest guidance unchanged at 73,000 ton for 2026. And the harvested volume in fourth quarter was 60,000 ton, compared to 22,000 ton in 2024. And the average weight of 3.8, which is the same level as fourth quarter of 2024. And during the quarter, we have step-by-step built biomass. The operational EBIT is 19.6 compared to 19.8 in fourth quarter 2024, so a good performance in Lerøy Midt. For Lerøy Kjøttrol, we have had a strong biological development in 2025, record net growth, harvest volume up 20%, cost up quarter on quarter on higher cost generation of trout, And the throat represented 47% of the harvest volume in Q4 2025. And same generation to be harvested the first quarter, but expectation for significant reduction in cost from second quarter 2026. Strong biological development years to date, 26, and the harvest guidance is unchanged at 73,000 ton for 2026. Fourth quarter harvest volume, 16,800 compared to 18,800 in same quarter 2024, but with a significantly higher harvest weight of 4.4 kilo. compared to 3.9 kilo in 2024. So we see an underlying good development in inlay regime with an EBIT of 13.7 compared to fourth quarter of 24 of 10.7. Scottish seafarm, a more challenging quarter. Low harvest volume in the period. Weak result driven by biological challenges. Gill health challenges led to incident-based mortality at several sites. And lower harvest rates impacting cost and sales price. The biological performance is improved at the end of the period, and going into 2026, the situation is under control. And we expect a harvest volume of 43,000 ton, which is down 2,000 ton, mainly because of the incidents that we had in fourth quarter last year. The harvest volume in fourth quarter was 5,500 ton, an operational EBIT of minus 33.8 NOC, and so a very challenging quarter for Scottish eFarm, but we are sure that the trend going forward, we are in a good place now, and we believe that we will deliver 43,000 ton with a good performance in 2026. Farming volumes, the guidance for 2026, 49,000 ton in Lere Aurora, 73,000 ton in Lere Mitt, and 73,000 ton in Lere Kjøttroll, so a total in Norway of 195,000 ton. comparable to 196,000 ton last year. We are in a good situation, we have good biology, and we believe that it might be upside on this volume as it looks today. For Scottish e-farm, our 50% share is 22,000 tonnes and a total of 217,000 tonnes of farming volumes in the Larry A. Seaford Group. If we look at the wild catch, highlights this quarter, it's been a quarter with lower volume, and that's also seasonal. And in general for whitefish, the quarter is significantly down, prices significantly up. A clear operational improvement in the land-based industry with 10 factories in north of Norway. Challenging operation conditions but operational EBIT increased from 130 million in 2024 to 270 million in 2025. So I will say that the general performance in 2025 is really good. Well, we expect further quota reduction for 2026, which might mark the bottom of the quota situation. And so we expect higher quotas going forwards, especially for the cod. And the wild catch quarters and catch volumes, fourth quarter, a total of 7,600 ton, 2,700 ton cod, 1,900 ton zait, and 0.7,000 ton of haddock, compared to 9,000 ton. 800 ton total in fourth quarter 24 and the total volume catched in 25 is 58,000 ton compared to 65,000 ton in 2024. Sales and processing operation in 18 countries and sales to more than 80 markets. That's our, this is what we represent in this segment. It's build up over the last 25 to 30 years. We have a strong position in all our key markets and step by step also expanding with branches to new markets like Vietnam, Thailand, and India, which is, of course, a great potential, challenging market, but we believe that we can be a strong partner with strategic customers in this country and to find a good way of doing distribution into the India market. So the highlights for the quarter. The quarter is surpassing ambitious target of 1.25 presented in 2022, and we are really happy with that. Record 12-month rolling operation a little bit. It's due to effects of structural improvement work, detailed work in all operations, strong demand in end markets, strong positioning with strategic customers globally. New branches open in Asia starting to show results, as I mentioned. And the lower than expected salmon and trout prices had some positive impact in 2025. For 2026, the expectation of continued revenue growth at slightly lower margin. And if we look at the total EBIT for 2025, it's 1.2%. 1 billion 290 million which is the highest result ever in this segment and a step by step going up so it's good to see the development in this segment it's work working really hard out in all the markets improving improving and and and getting more and more customers connected to our fantastic value shape Dan Kyr will take you through the key financial highlights, and I will come back with outlook afterwards.

Yes, thank you, Henning. Following some 45 quarters with reduced cost and a positive development, we were a bit disappointed with development in Q3 of 2025, which following high seawater temperatures made production a bit lower and cost a bit higher than we had anticipated. But it's good to be back on a positive track now in Q4. And obviously, our ambition is to continue that positive track into 2026. Looking into our P&L, this sums up what Henning has commented already. Key earning drivers are shown on the lateral lines. We see that our harvest volume in salmon and trout are 13% below last year. That is related to challenges and high sea lice pressure in Q3 and start of Q4. And also then that we have built biomass, standing biomass in sea, in particular in Leremitt during the quarter. If you look at the margin, and this margin includes the profitability downstream, we see that the margin is up around 2.5 kroner, which is positive. The spot price for salmon is up 5 kroner compared to the corresponding quarter last year. The price realization in farming is up 2.5, but it's also an element that the cost is up somewhat from last year and the profitability in value-added sales and processing is up somewhat compared to last year. But in sum, we see we have a higher margin on a lower volume. Looking into wild catch, kouta is the big reason for the lower catch volumes. When it comes to profitability, the key reason is that prices for whitefish developed very positively toward the end of the year, but that was a challenge for the land-based industry. Quarterly numbers in this operation is always a bit challenging, but it's positive to see on an annual basis that profits, despite lower quota, are significantly up. compared to last year. In sum, lower volumes and higher margins, good activity in downstream means our revenue is up 4% compared to the corresponding quarter last year. We see that our operational EBIT is down 5% from the drivers already explained. And we also see that the EBITDA is flattish from last year, indicating that the investments we have done, we have not fully yet taken out the potential. In that, Henning will comment more on submerged farming later. We are happy with development, but there is further potential, which we will realize during 2026 and the years to come. EPS this quarter is impacted in particular by a weak quarter from Scottish Seafarm. Looking at the year, the adjusted EPS is 2,12 kroner and the suggested and proposed dividend to the General Assembly will be 2,50 kroner. Looking at our balance sheet, we have invested significantly in new technology in farming in recent years. That is the key reason for the higher fixed asset base. If you look on working capital items, we've done a good job this year. In Q4 compared to Q3 you will see a significant rise in customer receivables and that is related to high prices towards the very end of the year. So that draws some working capital in this quarter but for the year the development is positive. We have a strong balance sheet. We are investment graded. And obviously our aim is to minimize the asset base and maximize the profitability. And we will continue to work on increasing returns and profitability in coming years. And this slide shows development in net interest-bearing debt from previous quarter to this quarter. I already commented on working capital. I will comment on the next slide on capex. But the overall theme here is that the net interest-bearing debt is basically unchanged. Looking into capex, we have a maintenance capex of around one billion. We see that we have invested significantly into shielding technology. That is still a new technology. Henning will comment on performance so far. There is further potential. In 2026, we guide for 1.7 billion in CapEx. And please note that CapEx in 2025 was around 200 million NOC. lower than what we had previously guided and that 150 million of those are periodization effects included in a 1.7 billion in for 2026. We will invest in Aquatross which is a closed containment system for farming during 2026, first fish expected in 2027. We will continue to invest in small upgrades in our downstream segment and we are making some investments to further increase the profitability potential of the catches in the factories on the drawers. This slide is to show that we have a significant activity in Norway all across the country and this industry is a very important industry for the Norwegian nation. We are around 6,000 employees in Lerøy and on a daily basis we work to supply the world with sustainable, high quality food, and we are very proud of that. And value generation for Norway is significant. With that, Tanning, I give the word back to you.

Okay, then I will take you through the outlook. And first of all, have a look at the strategic targets that we set in 2022. And we see for the 50 billion goal in 2030, it's within reach. We are on a good direction there. If we go to EBIT for farming and web sales and distribution and being number one on EBIT, we did not achieve the first position. But we believe it's... Possible to do that, but this target is not within the reach in 2025, but step by step we will work hard to get the number one position. That's our goal, and we believe it's possible to get there, but we will see when. But we have a good structure of how we work to get into that position. For WAP sales and distribution, as we mentioned, we set a goal in 2021 of EBIT of 1.25 billion NOC. And we achieved this goal. And we had an EBIT of 1.29 billion NOC in 2025. So a very good goal. performance, good work for the last five years to achieve this goal. So congratulations to everyone working in this segment, working structured in a way to achieve this goal. So we are very satisfied by that. And we also had a goal of 200,000 ton in 2025 for the farming operation, and we achieved 195,600 ton, which is close to goal achievement, and also are very happy with this achievement in 2025. If we look at the EBIT, the Web Sales and Distribution and the EBIT target that we set in 2020, it was presented in 2022, but it was set in 2025. And we worked structurally improving and focusing on achieving this goal in 2025. And we are very satisfied and congratulations to everyone working in Leroy and especially into this segment, achieving this goal and achieving an EBIT of 1.29 billion NOK. So congratulations to everyone working in this segment out in front of our value chain. Also, we have had great development in farming and in biology in 2025. It shows clear improvement. We see that the net growth rate compared to the The average of the last five years is up 7%. The mortality is down 10%. The superior, the quality, is up 4%. And the biomass at sea is up 3%. So a good performance in farming here. And also we have worked in a structural way to improve our performances and better biology. And we see that this is getting results. For the genetics, we see that it's a good improvement. Second half 2025, we see for the row quality and the performance, it's also giving a good effect and also on the quality of the smolt. shielding technology and also the implementation of layer away the way that we improve the whole company so I will say we see that we work when we work structurally with the improvements we also are achieving the goals that we set so we are on a good route to a great performance going forward And if we look at farming shielding technology, we see in the fourth quarter, we reduced the lice treatments with 24% compared to traditionally. Superior share is about the same, but we also reduced the mortality by 9%. So that's a good performance. But if we look at You know, the fourth quarter was a more challenging quarter with the submerged technology. But if we look at, you know, the 2025, the whole year, we reduced the lice treatment by 60% in submerged, superior share up 2%, and mortality about the same level. But this is showing that this technology is really helping us achieving our goal going forward. And the share of harvest that we have in our operation, in the farming side, is now, end of 2025, 27%. It's submerged farming, it's semi-contained farming, it's laser de-lousing, and also now we are investing into closed-contained farming. And we will put fish into the sea first quarter of 2027, which also will improve our performance in farming and better biology. If we look at the supply of Atlantic salmon, we saw that in 2025, there was a global increase in the amount of 10.6%, and in Norway, 11.6%. For 2026, we expect a stable level, and maybe a little bit up, 1.3% globally. In Norway, a minus of And we also see the beginning of this year, it's been a significant growth in the harvest. So it might, yeah, give an effect on the rest of the year. Then we will see a higher demand and a lower supply that we might see a situation where price increases can come. Outlook for farming, we see a strong biological improvements in 2025. We expect lower cost in 2026 compared to 2025 with further long-term potential. Expect harvest volume of 195,000 ton in 2026 for Norway and a 16,500 gutter weight including leather shears in Scottish seafarm. So we have a good base in farming, and we believe that this segment will perform going forward with stable biology, good quality, and also high average weights on the fish. So for wildcatch, Of course, it's been challenging years for the wildcatch with the lower quota situation. We have had a strong development in 2025. And it's an even more challenging quarter situation for 2026, but indication for 2026 will mark the bottom, we believe. An indication for quarter 2026 is Codd minus 16%, Haddock plus 18%, SAIT North minus 19%, and SAIT South 27%. And for WAP sales and distribution, we expect profitability surpassing ambitious targets. And we see that profitability is surpassing ambitious targets set in 2022. The lower salmon and trout price are building markets, increased demand for integrated sustainable value chain, and a strong demand in emerging markets. Some tailwind on the lower than expected prices in 2025, for 2026 expectation of a continued growth and a slightly lower margins, but good performance also going forward. and that was all thank you very much and also the ones that's coming to our capital market say next week can get the deep dive into our value chain thank you very much and