Leroy Seafood : Årsrapport 2023

Annual Report 2023

Norwegian seafood pioneer since 1899

Contents

Introducing Lerøy		4
Lerøy in short		5
Values for the future		6
Creating the world's most efficient and
sustainable value chain for seafood		7
Local roots, global perspective		8
125 years of history		9
Key figures - financial		10
Key figures - environment		11
Key figures - social		12
Strategic aspirations		14
A year full of learning		15
Strategic development		17
Strategic priorities		18
Strategic framework and operating model		20
Targets		23
Key developments and initiatives in 2023		24

The Board's report		31
Board of Directors		32
The Board's report		34
Shares		41
Risk management		43
EU Taxonomy		51
Material topics		61
Materiality assessment		62
Environmental sustainability		65
Material topics environmental sustainability .. .		67
Social sustainability		75
Involvement of local communities		78
Material topics		79
Corporate governance		84
Corporate governance report		85

Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Consolidated financial statements . . . . . . . . . . . . . . . . . . . . . 96 Parent company financial statements . . . . . . . . . . . . . . . 179

Responsibility statement from the Board of Directors and CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

Independent Auditor's Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

Consolidated ESG ­statement . . . . . . . . . . . . . . . . . . . . . 204 Additional reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Social statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Environmental statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Global Reporting Initiative Index for 2023 . . . . . . . . . 209 GRI Content Index (2023) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 GRI 3: Material topics 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Independent statement regarding Lerøy Seafood Group ASA's sustainability reporting . 229

Lerøy Seafood Group

Annual Report 2023

Contents

4

Introducing

Lerøy

Lerøy in short		5
Values for the future		6
Creating the world's most efficient and
sustainable value chain for seafood		7
Local roots, global perspective		8
125 years of history		9
Key figures - financial		10
Key figures - environment		11
Key figures - social		12

Lerøy Seafood Group

Annual Report 2023

Contents	Introducing Lerøy > Strategic aspirations > The Board's report > Material topics > Corporate governance > Financial statements > ESG statements	5

Lerøy in short

All figures in NOK 1 000

Key notes

Key financial figures	2023	2022	2021	2020	2019
Operating revenue	30 869 712	26 645 877	23 073 280	19 959 652	20 426 902
Operational EBIT*/EBIT before pr. value adjustement before 2021	3 335 059	3 471 068	2 603 867	1 949 655	2 734 236
Earnings per share before fair value adjustments	2.91*	3.59	3.08	2.46	3.48
NIBD	5 209 443	4 346 083	3 297 487	3 520 768	2 641 431
Equity ratio	48.0%	56.7%	56.5%	58.5%	58.8%
ROCE before fair value adjusmtents of biomass	12.6%	14.5%	12.4%	10.5%	15.5%
Harvest volume (GWT)	159 620	174 629	186 635	170 849	158 178
Catch volume in tonnes (HOG)	75 893	71 726	71 521	68 419	62 497
LSG stock price last annual trading day	41.8	55.15	69.00	60.56	58.30
Dividend per share for payment following year	2.5	2.5	2.5	2.0	1.5
Key figures ESG
Number of employees	6 013	5 972	5 475	4 912	4693
H1 value/LTIFR	18.73	13.31	15.33	17.23	12.2
Sick leave (%)	6.04	6.68	5.85	6.51	5.20
Scope 3 (tCO2e)	1 021 417	1 038 392	1 157 174	1 284 642	1 292 739
Survival for salmon and trout in the sea, rolling 12 months (%)	91.5	92.5	92.5	92.2	93.4
Number of fish escaped per year, salmon and trout	15 030	10 544	4	208	85
Antibiotics (kg active substance)	0	0	0	18.9	0
Product recalls (number)	3	11	5	0	0

*) before implementation effect of resource tax

About the Group

Lerøy Seafood Group is a global seafood company, with approximately 6 000 employees, that handles 350 000-400 000 tonnes of seafood annually. The Group has a vertically integrated value chain for redfish and whitefish, as well as significant third-party activity.

Values for the future

Our 6 000 employees are our most important resource. Based on our values - honest, open, responsible and creative, we work as One Lerøy to reach our objective of creating the world's most efficient and sustainable value chain for seafood, and our vision to be the leading and most profitable global supplier of high-quality sustainable seafood.

Lerøy Seafood Group

Annual Report 2023

Contents	Introducing Lerøy > Strategic aspirations > The Board's report > Material topics > Corporate governance > Financial statements > ESG statements	6

Values for the future

In our fully integrated value chain

- covering about 70 companies and

6 000 employees - we work together to create the world's most efficient and sustainable value chain for seafood.

Henning Beltestad, CEO

Lerøy Seafood Group

Annual Report 2023

Contents	Introducing Lerøy > Strategic aspirations > The Board's report > Material topics > Corporate governance > Financial statements > ESG statements	7

Creating the world's most efficient and sustainable value chain for seafood

Values and strategic priorities

Lerøy has a 125-year history of growth, and we have developed a vertically integrated value chain for redfish and whitefish, as well as significant third party activity.

Throughout our history, we have always believed that value creation depends on access to both knowledge and capital. Our employees are our most important resource.

Every day we provide 5 million meals to 80 countries, and to Norway we supply

1 million meals per week, totalling 350 000-

400 000 tonnes of seafood annually.

To ensure food safety for the consumer, we actively work in all stages of the value chain. As a fully integrated seafood supplier, we have the ability to control and quality-assure our products throughout the entire value chain. This way, we can meet the seafood market's increasingly

strict requirements for traceability, food safety, product quality, cost-effectiveness, sustainability, and continuous delivery.

Lerøy has a distinctive position to build the world's most efficient and sustainable value chain for seafood, from raw material to end product.

We, our 6 000 employees, plan to do so.

Lerøy Seafood Group

Annual Report 2023

Contents	Introducing Lerøy > Strategic aspirations > The Board's report > Material topics > Corporate governance > Financial statements > ESG statements	8

Local roots, global perspective

Farming

Wild Catch

VAP, Sales & Distribution (VAPS&D)

Lerøy reports in three segments. Within Wild Catch our 1 000 employees operate 10 trawlers and 10 processing plants in Northern Norway, which in addition to own catches receive regular deliveries from more than 600 fishing vessel in the coastal fleet.

Within Farming, our 1 800 employees operate a fully integrated value chain for the production of salmon and trout in three regions in Norway: Lerøy Sjøtroll (West Coast), Lerøy Midt (Central Norway) and Lerøy Aurora (Northern Norway).

Within downstream operations, Value Added Processing, Sales and Distribution (VAPS&D), we have operations in 14 countries, and our 3 000 employees not only engage in the processing, sale and distribution of the Group's own-produced seafood, but also have significant dealings with third-party suppliers.

In recent years, the Group has increased its focus on its operating model and on clarifying its financial, operational and sustainability targets, which are further described in this annual report. To achieve

our objectives, it is imperative that the Group's most important resource, its employees, work together as "One Lerøy" and thereby increase synergies, improve the sharing of expertise and create a winning culture.

Lerøy Seafood Group

Annual Report 2023

Contents	Introducing Lerøy > Strategic aspirations > The Board's report > Material topics > Corporate governance > Financial statements > ESG statements	9

125 years of history

2013

2020

1939

The export and wholesale company, Hallvard Lerøy AS was established

2001

Lerøy Sverige Investments in VAP, sales and distribution

Scottish Sea Farms Investments via 50% shareholding in Norskott Havbruk AS

2002

Stock Exchange listing and Capital injection

Lerøy Smögen

Investments in VAP, sales and distribution - smoking company

2003

Lerøy Midnor AS Farming - acquisition of 100% of the shares. Now part of Lerøy Midt AS

2004

Lerøy Portugal Investments in VAP, Sales

• Distribution. Acquisition of 60% of the shares (Portnor Lda)

2010

Lerøy Sjøtroll AS

Acquisition of 50.71% of the shares in Sjøtroll Havbruk AS

2011

Lerøy Finland

Acquisition of 68% of the shares in Jokisen Evää OY. Investments in VAP, sales and distribution

2012

Rode Beheer BV

Shareholding in the Dutch seafood group increased to 50.1%

Lerøy Midt AS Opening of new smolt facility in Belsvik with RAS tech-

nology in (what is now) Heim municipality, Trøndelag, with production capacity of 14 million fish per year

2014

Lerøy Aurora AS

Villa Organic AS is demerged, and Lerøy Aurora gains eight new licences for consumer products

Investment in fish-cut

Investments in new factories in Norway, Spain, France and Denmark

Lerøy Havfisk

Delivery of stern trawler "Kongsfjord" from Vard Søviknes

Lerøy Midt Construction start for extension of RAS facility in Belsvik, Heim municipality, for production of large smolt

2021

Lerøy Seafood Italy SRL

Opening of production facility

Seafood Denmark Lerøy increases shareholding in seafood group Seafood Danmark from 33% to 78%

Scottish Sea Farms Lerøy and Salmarowned Scottish Sea Farms (SSF) acquire Grieg Seafood Hjaltland, making SSF Scotland's second largest fish farming company

2023

PWC announces Lerøy as one of Norway's climate winners in 2022

Significant investment in new shielding technology within Farming

Lerøy Austevoll Opening new factory for processing of salmon and trout on Austevoll

	1900		1950		2000

2005 2010 2015 2020 2025

1899	1997
The fisherman-	First private placing
farmer Ole Mikkel	with financial
Lerøen began	investors

selling live fish at	1999
the fish market in
Lerøy Hydrotech
Bergen
LSG's first investment
	(associate) in salmon
	production

2005

Lerøy Aurora AS Acquisition of 100% of the shares (Aurora Salmon AS)

Alfarm Alarko Lerøy

(Associate) Partnership entered into with Alarko Holding in Turkey

2006

Lerøy Hydrotech

Acquisition of 100% of the shares. Currently part of Lerøy Midt AS

Lerøy Fossen AS Acquisition of 100% of the shares in Fossen AS. Investments in VAP, sales and distribution

2007

Lerøy Vest AS Acquisition of 100% of the shares via business combination

2008

Austevoll Seafood Increases its shareholding in LSG from 33.34% to 74.93%

2009

Austevoll Seafood Reduces its shareholding in LSG from 74.93% to 63.74%

2015

Seistar Holding AS Acquisition of 50% of the shares in the well boat company

2016

Lerøy Havfisk og Lerøy Norway Seafoods Acquisition of 100% of the shares in Havfisk ASA (now Lerøy Havfisk ASA) and Norway Seafoods Group AS (now Lerøy Norway Seafoods) Investments in VAP, sales and distribution of whitefish

Rode Beheer BV Acquisition of remaining 49.9% of the shares (VAP, sales and distribution)

2019

Lerøy Norway Seafoods

Converted factory in Stamsund in Vestvågøy municipality for production of processed fish and ready- to-eat products

Lerøy Midt Official opening of new factory on Jøsnøya island, Hitra municipality

Lerøy Sjøtroll First release of smolt from new RAS production facility for large smolt in Kjærelva, Fitjar municipality

2024

125 years of history - in disitinctive position to create the world's most efficient and sustianable value chain for seafood

Lerøy Seafood Group

Annual Report 2023

Contents	Introducing Lerøy > Strategic aspirations > The Board's report > Material topics > Corporate governance > Financial statements > ESG statements	10

Key figures - financial

Lerøy Seafood Group

Annual Report 2023