By 2030, Lerøy Seafood Group (LSG) wants to achieve annual revenue of NOK 50 billion (USD 4.8 billion, EUR 4.9 billion), the Norwegian fish farming and fishing company advised ahead of the opening of its Capital Markets Day.
In a filing with the Oslo Stock Exchange on 22 September, 2022, LSG stated that over the past 20 years, it has developed a fully integrated value chain for seafood, with an average revenue growth of 12 percent per annum, and a return on capital employed of 17 percent per annum.
Steady performance from its salmon and trout farms across three regions in Norway and having a substantial wild-catch operation, effective downstream operation in its Value-Added Products and Sales and Distribution divisions, and having an increasing share of its raw materials processed through the group’s value chain have given Lerøy the means to pursue the NOK 50 million target, it said.
“Historically, value chains for seafood have been very fragmented and not suited to meet increasingly complex customer requirements. By comparison, LSG's fully integrated value chain is more reliable, faster, and cost-efficient. The group's sustainable value chain supports full traceability, quality assurance, and increased value creation through product innovation. This is what our strategic customers expects and what we work for every day. This is our competitive advantage,” Lerøy Seafood CEO Henning Beltestad said.
Beltestad said he hopes to continue to achieve gains in the company’s farming volumes, which have increased by 9 percent annually over the last three years, driven by post-smolt investments.
“The strategy for post-smolt has proven successful, but there is still untapped potential,” he said. “Our goals are ambitious yet obtainable. The common theme is operational improvements across all our segments. We have clearly defined initiatives to achieve operational excellence which we will demonstrate today. I am confident we are on the right track for continued profitable growth.”
According to the filing, LSG’s other targets for 2025 and beyond include becoming the market leader of EBIT per kilogram for farming and VAP S&D by 2025; achieving NOK 1.25 billion (USD 120.6 million, EUR 122.1 million) by 2025 in its
VAP S&D segment EBIT; achieving NOK 500 million (USD 48.2 million, EUR 48.8 million) by 2025 for its wild-catch segment EBIT; and achieving a harvest volume in Norway of 205,000 gross-weight tonnage by 2025.
For the farming segment targets for operational efficiency towards 2025 include a production cost reduction of NOK 4.60 (USD 0.44, EUR 0.45) per kilogram in 2025; an economic feed conversion ratio of 1.19; a 4.5-kilogram average harvest weight; and a goal of having 93 percent of salmon and trout classified as superior quality.
“Like any business today, Lerøy is experiencing cost inflation. However, we aim to counterbalance this through operational improvements,” Beltestad said.
To achieve its targets, LSG said that it will strengthen and develop its core business by improving the quality of its biological operations with the goal of increasing the survival rate and growth rate of its fish, increasing the utilization of license capacity, and improving harvest quality. It also set the goal of improving sales and production planning, increasing the share of volume to strategic customers and attracting additional strategic customers, increasing the share of raw materials processed through the group’s value chain, and accelerating its digital transformation and automation.
LSG achieved revenues of almost NOK 12.1 billion (USD 1.2 billion, EUR 1.2 billion) in the first half of 2022, compared with NOK 10.2 billion (USD 984.1 million, EUR 996.3 million) in H1 2021. Its operating profit before fair-value adjustment related to biological assets climbed to NOK 1.6 billion (USD 154.4 million, EUR 156.3 million).
Photo courtesy of Lerøy Seafood
