Lerøy aims for NOK 50bn turnover target by 2030

Henning Beltestad, CEO Lerøy Seafood

Lerøy Seafood Group aims to achieve a turnover of NOK 50 billion (£4.3bn) by the end of the decade. The ambitious goal was set out at the opening of the company’s Capital Markets Day today.

The combined fish farming and trawler fishing group, which owns a half share in Scottish Sea Farms, is setting out a far-reaching programme of growth in several areas.

In a message to the Oslo Stock Exchange, Lerøy said: “Over the past 20 years the Lerøy Seafood Group (LSG) has developed a fully integrated value chain for seafood with an average revenue growth of 12% p.a. and a return on capital employed of 17% p.a.

“LSG operates salmon and trout farms across three regions in Norway and has a substantial wild catch operation completing the product offering.

“The downstream operation in VAP S&D is growing and an increasing share of the groups raw materials is processed through the groups value chain. Our sales and processing operations now span 14 countries.”

CEO Henning Beltestad 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 expect and what we work for every day. This is our competitive advantage.”

The targets being presented at the Capital Markets Day event are:

* Revenues of NOK 50bn by 2030

* Market leading EBIT per kg for farming and VAP S&D by 2025

* Segment EBIT, VAP S&D: NOK 1.25bn by 2025

* Segment EBIT, wild catch: NOK 500m by 2025

* Farming: Harvest volume (Norway) of 205,000 GWT by 2025 For the farming segment targets for operational efficiency towards 2025 include:

* Production cost reduction of NOK 4.6 per kg in 2025 (measured in 2021 money)

* Economic feed conversion ratio of 1.19

* 4.5 kg average harvest weight

* 93% of salmon and trout to be superior quality.

Lerøy is experiencing cost inflation, but it aims to counterbalance this through operational improvements, according to CEO Beltestad.

LSG plans to strengthen and develop its core business by:

* Improving biology;

* Improving sales and production planning;

* Increasing share of volume to strategic customers and attract additional strategic customers;

* Increasing the share of raw materials processed through the groups value chain; and

* Accelerating digital transformation and automation.

As regards biology, LSG aims to increase survival rate, increase growth rate, increase utilisation of licence capacity and improve harvest quality while further strengthening its position as a global climate- and environmentally-sustainable food producer.

CEO Beltestad was expected to tell the event: “Farming volumes have increased by 9% p.a. last three years driven by post-smolt investments. The strategy for post-smolt has proven successful, but there is still untapped potential.”

“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.”