ANNUAL REPORT
2020
R E SH A P IN G O U R BU SINE S S T O MEE T T HE F U T U R E
RESHAPING
GRIEG SEAFOOD
T O A D VA N CE F U T U R E G R O W T H , IN CR E A SE C O MP E T I T I V ENE S S
A ND R A I SE T HE B A R O N S U S TA IN A BIL I T Y
2020 did not go as expected. Not only did Covid-19 severely impact our
markets. We also experienced extraordinary biological challenges in several
production regions. Despite impressive efforts by dedicated employees, Grieg
Seafood did not reach our targets.
When things do not go as planned, we must adapt. Change. Execute needed
measures to get back on track. A crisis is a good time to do just that.
During the year, we have taken action to reshape our business. We have
narrowed our operational focus to the production regions with the best
potential for profitable growth: Norway and Canada. We have restructured
our organizational set-up and added key competences to improve
competitiveness and sustainability. We have established a new sales and
market organization to increase the value of our salmon downstream. We
have found new ways to drive change towards a sustainable global food
system - both in production and our value chains.
After a challenging year, and despite some unexpected twists and turns, we
are proud to present the progress we have made on our journey of sustainable
growth. We are more than ever dedicated to improving our operational
performance and profitability, fish welfare and survival.
Change will never stop, but one thing will stay the same, Grieg Seafood will
always pursue improvement wherever we see it. It is embedded in our DNA,
it is what drives our commitment and lets us capture new opportunities.
That is how we farm the ocean for a better future.
CONTENT
A B O U T U S
RESHAPING
OUR BUSINESS
H I S T O R Y A N D F U T U R E
O U R O R G A N I Z AT I O N
M A I N A C H I E V E M E N T S 2 0 2 0
K E Y F I G U R E S
O U R S C O R E B O A R D
L E T T E R F R O M C E O
O U R G R O W T H J O U R N E Y
O U R 2 0 2 5 B U S I N E S S S T R AT E G Y
C O V I D -19
O U R VA L U E C H A I N
O U R I M P R O V E M E N T S
TOWARDS A
SUSTAINABLE
FOOD SYSTEM
O U R A P P R O A C H T O S U S TA I N A B L E B U S I N E S S
A Q U A C U LT U R E I N A S U S TA I N A B L E G L O B A L F O O D S Y S T E M
H E A LT H Y O C E A N
S U S TA I N A B L E F O O D
P E O P L E
L O C A L C O M M U N I T I E S
P R O F I T & I N N O VAT I O N
A C C O U N T S
OUR FINANCIAL
RESULTS
B O A R D O F D I R E C T O R S ' R E P O R T
C O R P O R AT E G O V E R N A N C E
A N N U A L A C C O U N T S 2 0 2 0
A U D I T O R ' S R E P O R T
SUSTAINABILITY
REPORTING
G R I I N D E X
S TA K E H O L D E R D I A L O G U E
A U D I T O R ' S S U S TA I N A B I L I T Y R E P O R T
APPENDIX
S H E T L A N D
8
10
12
14
16
18
2 0
2 2
3 2
3 4
3 8
4 6
5 2
6 8
9 2
114
12 2
174
194
2 10
3 3 4
3 4 2
3 6 0
3 6 2
3 6 6
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A B OU T U S
RESHAPING
OUR BUSINESS
During 2020, we took measures to advance future
growth and value creation, increase competitiveness
and raise the bar on sustainability.
H I S T O R Y A N D F U T U R E
O U R O R G A N I Z AT I O N
M A I N A C H I E V E M E N T S 2 0 2 0
K E Y F I G U R E S
O U R S C O R E B O A R D
L E T T E R F R O M C E O
O U R G R O W T H J O U R N E Y
O U R 2 0 2 5 B U S I N E S S S T R AT E G Y
C O V I D -19
O U R VA L U E C H A I N
O U R A P P R O A C H T O S U S TA I N A B L E B U S I N E S S
8
10
12
14
16
18
2 0
2 2
3 2
3 4
3 8
R E S H A P ING OUR BU S INE S S
HISTORY AND
FUTURE
5000 B.C.E
First fish farms reported in China.
1850
The first wild salmon hatcheries established in
Norwegian salmon rivers.
1969
The brothers Ove and Sivert Grøntvedt transfer
the first salmon smolt to sea pens at the island
Hitra in Norway.
1970s
Commercial salmon farming of chinook, coho
and sockeye is established around Sechelt in
British Columbia.
1973
The Norwegian parliament adopts a licensing
system for the country's growing aquaculture
industry, with the aim of strengthening local
communities along the coast. Since then,
salmon farms have contributed jobs and
revenues to small, coastal communities.
1992
Grieg Seafood Salmon (trading company)
and Bioinvest (salmon farming investor) are
established.
1998
Grieg Seafood Rogaland is established.
2000s
The Norwegian government launches
the “green license” scheme, with stricter
environmental standards. Grieg Seafood
currently has eight green licenses.
2001
Grieg Seafood acquires Scandic Marine Ltd. in
British Columbia and establishes Grieg Seafood
BC.
2006
Grieg Seafood merges with the Volden Group
and establishes Grieg Seafood Finnmark.
2007
Grieg Seafood is listed on Oslo Stock Exchange.
Grieg Seafood acquires Hjaltland Ltd in
Shetland, the beginning of Grieg Seafood
Shetland.
Grieg Seafood starts implementing RAS
technology in Rogaland.
1990s
Fish vaccines are introduced. As a result, the
salmon farming industry has significantly
reduced its use of antibiotics.
2008
Grieg Seafood Rogaland is certified by
GLOBALG.A.P.
2010
2020
Together with Bremnes Seashore, Grieg
Seafood establishes the sales company Ocean
Quality.
2011
Grieg Seafood British Columbia is certified by
BAP.
2013
The Norwegian government and the industry
develop the standard NS9415 to ensure fish
farms are technically safe and prevent the
escape of farmed salmon.
2015
Grieg Seafood Shetland is certified by
GLOBALG.A.P.
2016
Grieg Seafood Finnmark is certified by
GLOBALG.A.P.
2017
Grieg Seafood harvests 63 000 tonnes.
Grieg Seafood Finnmark receives its first ASC
certifications.
2018
Grieg Seafood harvests 75 000 tonnes.
2019
Grieg Seafood harvests 83 000 tonnes.
Grieg Seafood harvests 87 000 tonnes.
Grieg Seafood acquires Grieg Newfoundland in
Eastern Canada.
Grieg Seafood starts building its own sales and
market organization, and the Ocean Quality
partnership is dissolved.
Grieg Seafood achieves an A- score from CDP in
the areas of Climate and Forest.
2022
Grieg Seafood targets a farming cost of NOK 40
per kg in Norway and CAD 7 per kg in BC.
2023
Grieg Seafood targets 100 percent Aquaculture
Stewardship Council certifications in all
regions.
2025
Grieg Seafood aims to harvest at least 130 000
tonnes, be cost competitive and have a stronger
market position in the value chain.
2030
Grieg Seafood aims to have reduced carbon
emissions (Scope, 1, 2 and 3) by 35%.
2050
Grieg Seafood aims to have reduced carbon
emissions (Scope, 1, 2 and 3) by 100%.
The seafood industry
Grieg Seafood
The future
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
OUR ORGANIZATION
3
5
GRIEG SEAFOOD FARMING
We farm Atlantic Salmon in Rogaland and Finnmark in Norway,
Shetland in the UK and British Columbia in Canada. We have
hatcheries, sea farms and processing plants. In 2020, we acquired
a greenfield project in Newfoundland, with facilities currently under
construction.
GRIEG SEAFOOD SALES
We have sales offices in each country. Until year-end 2020, our sales
were handled by Ocean Quality, a joint venture with Bremnes Seashore
AS. As from year-end 2020, we have our own integrated, global sales
and market organization.
2
4
1
BERGEN (HQ)
1
2
ROGALAND
FINNMARK
3
BRITISH
COLUMBIA
4
5
SHETLAND*
NEWFOUNDLAND
35 000
37 000
35 000
45 000
28 000
23 043
26 919
21 181
15 000
15 705
15 000
Harvested volume 2020
Harvest volume target 2021
Harvest volume target 2025
R E S H A P ING OUR BU S INE S S
OUR VISION
ROOTED IN NATURE
FARMING THE OCEAN FOR A BETTER FUTURE
OUR VALUES
OPEN
We are open with each other. We share knowledge and ideas, and learn from each other.
We meet new perspectives with an open mind. We are always honest – also in difficult
situations. Our managers have an open door and welcome suggestions for ways to improve.
We are open and transparent towards society. We proactively share honest information
about our operations with the public, the authorities, and the media – even before they ask.
We invite the community to our facilities, participate in the public debate, and engage in
dialogue with other users of the fjords.
AMBITIOUS
Every day, we endeavor to do our job in the best possible way. We never settle for the
average. We walk the extra mile. We always strive to improve. We think big and set
ambitious goals for everything we do. We are not afraid of making bold decisions, even if
they are tough and push us out of our comfort zone.
We embrace change and innovation. We prioritize our commitments and carry them out.
Our ambitious goals aim to make Grieg Seafood ever more profitable. Only then can we
develop the salmon farming industry further.
CARING
We not only treat each other with respect, we care. We care about our people, and help
them flourish and develop their talents. We foster a caring environment – even in difficult
situations and when hard decisions must be made.
We care about our fish and the natural environment that is vital to the production of healthy
salmon. We work constantly to maintain good biological control and reduce our impact on
the environment. We will pass healthy fjords and salmon on to future generations.
We care about our communities. We recognize that the fjords belong to them, and we take
their concerns seriously. We are a good neighbor. We create opportunities and lasting value
for society.
For more information on the Group structure, refer to note 1 in the Group Accounts.
*We have initiated a divestment process for the Shetland assets, and in accordance with IFRS 5, Shetland is classified as held for sale at year end 2020. As such,
Shetland has been excluded from the majority of this report.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
MAIN ACHIEVEMENTS
2020
GROUP
HARVEST VOLUME
(TONNES GWT)
EBIT PER KG
(NOK)
3.3
15.0*
86 847
71 142
Ex. Shetland
82 973 / 71 700*
ROGALAND
23 043
25 217*
12.7
22.5*
FINNMARK
26 919
32 362*
4.7
17.9*
BRITISH COLUMBIA
-0.4
21 181
14 120*
5.2*
NEWFOUNDLAND
OPERATIONAL
Fish growing in our freshwater facility
R E S H A P ING OUR BU S INE S S
GROUP
2020
ROGALAND
FINNMARK
BRITISH COLUMBIA
NEWFOUNDLAND
New region
Established a new region
in Newfoundland
Restructuring
Narrow focus to the regions
with greatest potential for
profitable growth: Eastern and
Western Canada, and Northern
and Southern Norway. Our
business in Shetland will be
sold when the time is right
GPTW
All regions Great Place to
Work certified
ZERO
Zero escapes
New position in
value chain
Fully integrated sales
and market organization
operational
A-
Recognized by CDP as a
leader for our actions on both
climate change and forest
conservation
38%
of Group financing is “Green”
Deforestation-free
Brazilian suppliers
Our Brazilian soy vendors have
committed to becoming 100%
deforestation free, halting sale of
deforestation-related soy to all
customers
400g
Average weight of smolt
transferred to sea farms
1 100g
The highest average weight
for smolt transferred to sea
farms in a single batch
100%
All sites monitored and fed by
our pilot integrated operations
center
66%
Farms powered by renewable
energy
2
Two new sites approved,
supporting our growth
strategy
15
Total of fifteen sites ASC
certified by year-end 2020
0
Zero farmed salmon found
in the Alta River monitoring
project
65%
Farms powered by renewable
energy
1
One new site approved under
First Nations agreement
11
Total sites ASC certified
90%
Despite algae challenges,
survival rate improved to 90%
due to algae mitigation system
UN Declaration on the
Rights of Indigenous
Peoples
Truth and Reconciliation Committee’s
“Call to Action” under implementation
2021
First smolt will be
transferred to sea farms
2022
First harvest expected
15 000
Harvest volume (tonnes gwt)
expected in 2025
8
Eight farming licenses, with a
production capacity of 30 0000
tonnes. Additional licenses have
been applied for
*2019 figures
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
KEY
FIGURES
FIGURE 1.1
HARVEST VOLUME 2020
FIGURE 1.2
SALES REVENUE 2020
FIGURE 1.3
EBIT* 2020 (NOK MILLION)
30%
32%
31%
34%
38%
36%
300
200
100
0
Rogaland
Finnmark
British Columbia
The figures above are on ex. Shetland basis as the Shetland assets are classified as held
for sale according to IFRS 5. *EBIT before fair value adjustment of biological assets
FIGURE 1.4
HARVEST VOLUME (1 000 TONNES GWT)
FIGURE 1.5
EBIT VS. PRICE REFERENCE
Group ex Shetland
Shetland
EBIT/kg GWT
Price NQSALMON (NOK/kg)
90
80
70
60
50
40
30
20
10
0
70
60
50
40
30
20
10
0
-10
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
R E S H A P ING OUR BU S INE S S
4 384
SALES REVENUES*
MNOK
950
NO. OF
EMPLOYEES*
FTE
3.3
EBIT/KG*
NOK
KEY FIGURES NOK MILLION
2020 *
2019 *
2018
2017
2016
2015
2014
2013
2012
2011
Operational
Harvested volume (tonnes GWT)
71 142
71 700
74 623
62 598
64 727
65 398
64 736
58 061
70 000
60 082
Spot price of salmon (NOK/kg) 1)
Group farming cost (NOK/kg)
EBIT/kg
Financial
Sales revenues 2)
EBITDA
EBIT before fair value adj.
Profit/loss for the year
Cash flow from operations
Capital structure
NIBD according to covenants
requirement
NIBD/EBITDA 3)
NIBD/Harvest (NOK) 4)
Equity %
Gross investments incl. Shetland 5)
Profitability
Return on Capital Employed
(ROCE)
Dividend per share (NOK)
Earnings per share (NOK)
Total market value (OSE)
People
53.7
47.0
3.3
4 384
602
233
-316
412
3 679
n/a
42.36
41%
1 069
3.3%
0.00
-4.84
9 643
57.2
40.5
15.0
4 756
1 384
1 077
599
1 193
1 939
1.40
23.37
46%
706
59.2
43.1
14.7
7 500
1 334
1 099
997
820
1 690
1.30
22.64
48%
733
59.2
43.4
14.5
7 017
1 106
904
601
709
1 284
1.20
20.51
47%
553
61.9
39.7
18.0
6 545
1 342
1 168
1 222
953
906
0.70
14.00
47%
255
19.1%
22.0%
24.0%
33.0%
4.00
5.61
4.00
8.81
4.00
5.02
15 666
11 423
8 068
1.50
10.74
9 123
40.7
37.7
0.7
39.8
35.2
5.3
38.9
34.0
6.0
25.5
32.5
-2.7
30.5
31.4
3.4
4 609
4 100
2 404
2 050
2 047
261
48
4
367
1 569
6.30
23.99
38%
322
1.0%
0.50
-0.06
3 462
484
343
144
157
1 566
3.30
24.19
42%
312
484
348
431
317
-30
-191
-147
203
1 445
1 530
3.00
-51.30
24.89
21.86
43%
164
37%
190
10.0%
12.0%
(6.0)%
0.00
1.26
0.00
3.90
3 182
2 736
0.00
-1.33
1 379
346
206
-123
215
1 444
4.20
24.03
41%
324
7.0%
1.35
-1.11
463
Number of employees (full-time
equivalent) incl. Shetland
950
822
769
707
654
681
686
626
640
589
*Ex. Shetland: As of year end 2020, the Group presents both the farming and sales operations of Grieg Seafood Shetland and the sales operations of Ocean Quality related to Bremnes
Fryseri AS, as discontinued operations. Unless otherwise explicitly mentioned, qualitative and quantitative information disclosed in this report refer to the continued operations of Grieg
Seafood. The figures for 2019 have been re-presented to be comparable to 2020 figures. The key figures presented on this page, including historical information in charts for 2019, are
disclosed for the Group's continuing operations (excluding Ocean Quality and Shetland), unless stated otherwise. See also Note 5, and the appendix for details about Grieg Seafood
Shetland.
1) Average of weekly NQSALMON prices less 0.75/kg.
2) Ref figure 1.2 - see Note 8 for more information on the calculation of total revenues.
3) NIBD/EBITDA not measured through Q3 2021. See Note 12.
4) Harvest volume incl. Shetland.
5) Incl. financial lease (according to IFRS in force prior to 1 January 2019) investments.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
OUR SCOREBOARD
PILLAR
KPI
PROFIT &
INNOVATION
Return on capital employed*
Farming cost per kg
Rogaland (NOK)
Finnmark (NOK)
British Columbia (CAD)
TARGET
12% p.a.
NOK 40/kg in Norway and CAD 7/kg in BC in 2022
Harvest volume (tonnes GWT)
80 000 tonnes in 2021 (ex Shetland)
74 623
82 973 86 847 (71 142 ex Shetland)
HEALTHY
OCEAN
ASC certification **
All sites by 2023
Rogaland
Finnmark
British Columbia
Survival rate at sea ***
93% by 2022
Rogaland
Finnmark
British Columbia
Use of antibiotics (g per tonne LWE) ****
No use of antibiotics
Rogaland
Finnmark
British Columbia
Sea lice treatments (g per tonne LWE) ****
Minimize use of pharmaceutical treatments
Rogaland
Finnmark
British Columbia
Use of hydrogen peroxide (kg per tonne LWE) ****
Minimize use of pharmaceutical treatments
Rogaland
Finnmark
British Columbia *****
Escape incidents
Zero escape incidents
Rogaland
Finnmark
British Columbia
SUSTAINABLE
FOOD
Carbon emission (kgCO2e per tonne GWT)
35% reduction (from 2018) in total emissions by 2030
High quality product
Scope 1 + 2 location based
Scope 3
Rogaland
Finnmark
British Columbia
93% superior share
PEOPLE
Absence rate
Below 4.5%
LTIR
Rogaland
Finnmark
British Columbia
Rogaland
Finnmark
British Columbia
LOCAL
COMMUNITIES
Workplace culture
Above average score in Great Place to Work survey
89% (Norway)
79% (global)
84% (global)
page 100
Support our local communities
Collaborate and contribute to local community
yes
page 100-100
* ROCE in 2019 and 2020 ex Shetland. ** Number of sites certified and % of net production. *** 12 months rolling survival rate calculated according to the GSI standards.
**** Amount of active pharmaceutical ingredients (APIs) used (gr/kg) per tonne of fish produced (LWE).
2016
33%
33.9
36.3
7.7
64 727
n/a
n/a
n/a
93%
94%
90%
0.0
0.0
126.9
5.2
0.2
0.3
18.5
42.4
0.0
1 (200)
0
0
n/a
n/a
88%
89%
76%
3.4%
6.1%
1.6%
9
13
72
n/a
yes
2017
24%
38.4
40.7
7.4
62 598
n/a
2
n/a
91%
95%
93%
0.0
0.0
18.3
0.2
1.0
0.1
10.8
13.4
9.2
0
0
0
421
n/a
81%
78%
81%
3.2%
4.4%
0.9%
11
24
16
n/a
yes
2018
22%
40.3
35.6
7.4
n/a
4
n/a
92%
96%
88%
0.0
0.0
151.3
1.1
0.8
0.3
3.5
14.5
5.8
0
0
0
459
n/a
74%
86%
84%
4.7%
5.4%
1.8%
24
18
38
yes
2019
19%
35.9
37.7
8.3
n/a
10
n/a
93%
96%
88%
0.0
0.0
87.0
0.0
0.3
0.5
11.9
0.0
6.0
0
0
0
514
n/a
75%
86%
86%
3.5%
4.9%
2.0%
15
22
35
yes
2020
STATUS
REFERENCE
page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
n/a
15 (80%)
11 (59%)
3%
42.1
44.1
8.0
90%
92%
90%
0.0
0.0
62.3
0.0
1.0
0.2
7.2
3.6
46.6
0
0
0
498
1 685
85%
69%
86%
3.0%
5.5%
6.8%
9
28
36
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
R E S H A P ING OUR BU S INE S S
PILLAR
KPI
PROFIT &
INNOVATION
Return on capital employed*
Farming cost per kg
TARGET
12% p.a.
NOK 40/kg in Norway and CAD 7/kg in BC in 2022
HEALTHY
OCEAN
Harvest volume (tonnes GWT)
80 000 tonnes in 2021 (ex Shetland)
ASC certification **
All sites by 2023
Survival rate at sea ***
93% by 2022
Use of antibiotics (g per tonne LWE) ****
No use of antibiotics
Sea lice treatments (g per tonne LWE) ****
Minimize use of pharmaceutical treatments
Use of hydrogen peroxide (kg per tonne LWE) ****
Minimize use of pharmaceutical treatments
Escape incidents
Zero escape incidents
SUSTAINABLE
FOOD
Carbon emission (kgCO2e per tonne GWT)
35% reduction (from 2018) in total emissions by 2030
Scope 1 + 2 location based
High quality product
93% superior share
PEOPLE
Absence rate
Below 4.5%
LTIR
LOCAL
COMMUNITIES
Workplace culture
Above average score in Great Place to Work survey
Support our local communities
Collaborate and contribute to local community
Rogaland (NOK)
Finnmark (NOK)
British Columbia (CAD)
Rogaland
Finnmark
British Columbia *****
Rogaland
Finnmark
British Columbia
Rogaland
Finnmark
British Columbia
Rogaland
Finnmark
British Columbia
Rogaland
Finnmark
British Columbia
Rogaland
Finnmark
British Columbia
Scope 3
Rogaland
Finnmark
British Columbia
Rogaland
Finnmark
British Columbia
Rogaland
Finnmark
British Columbia
2016
33%
33.9
36.3
7.7
64 727
n/a
n/a
n/a
93%
94%
90%
0.0
0.0
126.9
5.2
0.2
0.3
18.5
42.4
0.0
0
1 (200)
0
n/a
n/a
88%
89%
76%
3.4%
6.1%
1.6%
9
13
72
n/a
yes
2017
24%
38.4
40.7
7.4
62 598
n/a
2
n/a
91%
95%
93%
0.0
0.0
18.3
0.2
1.0
0.1
10.8
13.4
9.2
0
0
0
421
n/a
81%
78%
81%
3.2%
4.4%
0.9%
11
24
16
n/a
yes
The colours indicate
● Within target ● On track to meet our target ● Unsatisfactory result
2020
STATUS
REFERENCE
2018
22%
40.3
35.6
7.4
2019
19%
35.9
37.7
8.3
3%
42.1
44.1
8.0
74 623
82 973 86 847 (71 142 ex Shetland)
n/a
4
n/a
92%
96%
88%
0.0
0.0
151.3
1.1
0.8
0.3
3.5
14.5
5.8
0
0
0
459
n/a
74%
86%
84%
4.7%
5.4%
1.8%
24
18
38
n/a
10
n/a
93%
96%
88%
0.0
0.0
87.0
0.0
0.3
0.5
11.9
0.0
6.0
0
0
0
514
n/a
75%
86%
86%
3.5%
4.9%
2.0%
15
22
35
n/a
15 (80%)
11 (59%)
90%
92%
90%
0.0
0.0
62.3
0.0
1.0
0.2
7.2
3.6
46.6
0
0
0
498
1 685
85%
69%
86%
3.0%
5.5%
6.8%
9
28
36
89% (Norway)
79% (global)
84% (global)
yes
yes
yes
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●
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page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
page 100
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page 100-100
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***** The Government of Canada - Department of Fisheries and Oceans Canada (DFO) has defined that the Canadian industry shall calculate the API of hydrogen peroxide using a
different formula than what is used in Norway. For more information, see the sustainability KPI overview for BC here.
GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
CEO LETTER
Dear Shareholder
2020 was unlike what any of us expected. The Covid-19 pandemic
and PD, tend to occur at the end of the fish’s saltwater lifecycle.
surprised governments, businesses, and citizens alike across our
While still early days, experience from Rogaland, where we are
production regions and in all of our markets. Repeated lockdowns
piloting the strategy, indicates fewer outbreaks of PD and fewer
and fewer customers eating at hotels and restaurants had a major
sea lice treatments at the farms where fish spend a significantly
impact on salmon prices during most of the year, which affected
shorter time in sea. In other words, our post-smolt approach allows
our 2020 result in all regions.
us to work more preventatively, which again increases survival
and harvest volumes, and reduces cost-driving treatments. The
Still, the pandemic has shown us how resilient our relatively
technology strengthens ocean farming.
young industry has become. We have been operational throughout
the year, harvesting a record high volume, due to the skills,
flexibility, and passion of our dedicated employees. Demand
A new market approach to increase value
During the next few years, we will evolve from purely being a
for salmon remained strong, but shifted from restaurants to
supplier of farmed salmon and become an innovation partner
retail as consumers ate more dinners at home. Our global value
for selected customers. The aim is to improve synergies with our
chains have for the most part been open and operational. The
farming operations, reduce price volatility, and increase the value
high unemployment rates caused by the pandemic have also
created from our salmon downstream.
demonstrated how important secure jobs are to our communities,
and further highlighted the role that our industry can play to ensure
In 2020, we took significant steps on this journey. We dissolved
continued value creation in the rural areas where we operate.
our previous external sales arm, Ocean Quality, and established
our own, fully integrated sales and market organization, which
Competitiveness for a post-pandemic world
Grieg Seafood did not deliver on the ambitious 2020 targets we
will become fully operational in all markets during April 2021.
During the pandemic, lower prices have attracted many new
set for ourselves. That was due not only to the pandemic, but also
customers to the salmon segment, and consumers have gotten
to extraordinary biological challenges in several regions. During
used to preparing salmon for dinner at home as a part of their
the year, we implemented mitigating measures to set the stage
regular diet. When the hotel and restaurant segment recovers,
for stronger profitability and increased competitiveness in a post-
we expect demand to increase significantly. With better control
pandemic world. First of all, we have narrowed our operational
over Covid-19 in sight, and long-term consumer trends boosting
focus to the regions where we have the best opportunities
demand for healthy and climate-friendly products, it is the perfect
for profitable growth and the highest return on investment.
time to intensify our focus on the market and grasp opportunities
Going forward, we will invest in Norway and Canada as strong
in this area.
production regions, supplying the geographically close European
and US markets respectively. We have also made changes to our
organizational set-up, with more attention to farming operations.
Sustainable production growth
During 2020, we also moved towards our goal of harvesting 130
We have strengthened capabilities in key areas strongly impacting
000 tonnes (excluding Shetland) in 2025. We established a new
our competitiveness, such as fish health and welfare, RAS
farming region in Newfoundland, Canada, where we have exclusive
technology and R&D.
rights to farm fish in Placentia Bay. Here we will build up farming
operations from scratch, based on best available industry practices.
Increased survival and improved fish health and welfare are at
The first fish will be transferred to the sea this summer, and the
the heart of profitability in fish farming. Reducing the time that
the fish spend in the sea is a key measure to improve fish health
and welfare, which is precisely the aim of our post-smolt strategy.
Not only will larger smolt be more robust when transferred to the
sea, but both practical experience and big data analyses show that
some of the most severe diseases we struggle with, such as ISA
first harvest is expected in 2022. We are also investing in growth
opportunities in our Norwegian regions and British Columbia,
especially through increased access to post-smolt, which allows
us to utilize our licenses better. New and exciting types of farming
technologies are emerging, which will help us reduce our impact
and improve fish welfare, opening up for further growth. Grieg
Seafood is testing out closed-containment solutions, planning to
100% deforestation free in all of their soybean business. This has
grow fish to harvestable size on land, and working to integrate
been recognized by NGOs as setting a new global benchmark for
artificial intelligence and data analytics into our operations. We
sustainable supply chains. We urge other animal protein sectors
will consider all technologies that work in practice and that will
to work with their supply chains to achieve the same. This type of
help us grow sustainably.
bold leadership from our Brazilian suppliers is precisely what is
needed to transform our global food system.
Driving change towards a sustainable global food system
the global
The Covid-19 pandemic has only accelerated
sustainability agenda. Focus on the impacts of the global food
system is rightfully increasing. Aquaculture can be an important
part of the solution in a sustainable global food system, but only
if we continue to get better. Improving fish welfare, working more
preventatively, and reducing our environmental impact are at
the heart of our production focus. Going forward, a more holistic
approach to sustainability is needed to safeguard our license
to operate and to remain attractive for tomorrow’s consumer.
Reducing our climate impact, protecting human rights and
nature, improving Indigenous relationships, more sustainable feed
ingredients, and producing more food from fewer resources are
key challenges to solve. Grieg Seafood is committed to helping
drive change in our production and supply chains through pre-
competitive collaboration. We know this type of engagement works.
Recently, our Brazilian soy suppliers committed to becoming
"During the year, we implemented
mitigating measures to set the
stage for stronger profitability and
increased competitiveness in a
postpandemic world."
2020 was tough for all of us, and we are still not out of the
pandemic. But the light at the end of the tunnel is getting stronger
every day. With the measures we have implemented during 2020,
we are prepared for and excited about the opportunities that lie
ahead. Grieg Seafood is in a good shape to meet the future.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
OUR GROWTH
JOURNEY
FIGURE 1.6
OUR GROWTH JOURNEY: HARVESTED TONNES GWT
We aim to harvest at least 130 000 tonnes in 2025.
BC harvest volumes vary significantly every other year due to local production region
arrangements and less farms on the West Coast of Vancouver Island compared to the
East Coast. As a consequence, the Group volumes also vary every other year, regardless
of the underlying biology. Measures are being done to equalize harvest volumes.
74 623
62 599
Newfoundland
Shetland
British Columbia
Finnmark
Rogaland
82 973
2017
2018
2019
R E S H A P ING OUR BU S INE S S
We are on a long-term journey towards sustainable growth. In
2020, we restructured our business and narrowed our operational
focus to the regions with the greatest potential for profitable
production. We aim to sell Shetland, and build up our new region
in Newfoundland.
130 000
86 847
80 000
2020
2021
2025
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
OUR 2025 BUSINESS
STRATEGY
We aim to expand globally through growth and value chain
innovation. Our 2025 strategy comprises three key strategic
objectives for continued business development. Increasingly
sustainable farming practices form the very foundation of all
areas of the strategy.
1
2
3
GLOBAL GROW TH
Harvest volume of 130 000
tonnes by 2025
COST IMPROVEMENT
Improve competitiveness in
each region
VALUE CHAIN
REPOSITIONING
Evolve from supplier to
innovation partner
SUSTAINABILIT Y
4
We are aiming for an annual harvest of at least 130 000 tonnes
We will increase the value of our products through a stronger
by 2025. We will focus on post-smolt investments, target new
presence
in the market, based on partnerships, category
licenses, and seize opportunities afforded by new technology. There
development, and brand cultivation. Repositioning Grieg Seafood
is also potential for continued improvement of site utilization. We
from a salmon supplier to an innovative partner for selected
participate in new growth initiatives, M&As, joint ventures, and
customers is an important part of our value creation plan going
greenfield projects, and seek cooperation with farmers in existing
forward. The aim is to increase margins, reduce price volatility and
areas.
risk, and optimize collaboration between farming and sales.
We target a farming cost (cost directly related to production and
Salmon farming is a long-term commitment, where sustainability
harvest of salmon) of NOK 40 per kg in Rogaland and Finnmark,
and long-term profitability go hand in hand. Sustainability drivers
and CAD 7 per kg in BC in 2022. Costs will be reduced by improving
like sea lice control and fish survival rates directly impact success
operational performance, with a rigorous focus on biological
control, increased survival, and fish health and welfare. We
will also drive performance improvements through continuous
research and development, as well as through the utilization of
new technologies.
factors like cost and volume. Our sustainability drivers must
perform well if we are to reach our financial targets.
R E S H A P ING OUR BU S INE S S
FIGURE 1.7
SUSTAINABILIT Y DRIVES RESULT
SUSTAINABILITY DRIVERS
• Sea lice control and minimal sea
SUCCESS FACTORS
• License to operate
lice medication
• Escape control
• Survival and disease control
• Wildlife management
• Carbon emissions
• HSE, diversity and work
satisfaction
• Certifications
• Local value creation
• Higher volume
• Superior quality
• Reduced cost
FINANCIAL TARGETS
• ROCE: 12%
• Harvest: 80 000 tonnes in 2021 ex
Shetland, 130 000 tonnes in 2025
• Group farming cost: NOK 40/kg
• Engaged employees
• Preferred by customers and
and CAD 7/kg in 2022
• NIBD/EBITDA: < 4.5*
<
consumers
• Dividend: 30-40% of net profit
*Not applicable in the period 31.12.2020 -
30.09.2021, due to temporary amended covenant.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
STATUS AND ACTIONS TAKEN IN 2020
1
GLOBAL GROW TH
STATUS
• Our ambition was to harvest 100 000 tonnes (including
• Acquired additional production capacity in Norway through the
Shetland) in 2020. This target was based on new sites, more
traffic light growth system: 647 tonnes in Rogaland and 259
than 25 million smolt transferred to sea farms in 2019,
tonnes in Finnmark.
increasing survival rates, and a good average weight at harvest.
• Two new sites approved in Finnmark and one new site under
We ended the year with a total harvest of 86 847 tonnes (71 142
First Nations agreement approved in BC.
excluding Shetland), mainly due to biological challenges with
• BC harvest volumes vary significantly every other year due to
low temperatures in Finnmark causing winter ulcers, early
local production region arrangements and less farms on the
harvests and lost on-growth, as well as challenges with ISA.
West Coast of Vancouver Island compared to the East Coast. As
MEASURES TAKEN
• We established a new region in Newfoundland in Eastern
a consequence, the Group volumes also vary every other year,
regardless of the underlying biology. Measures are being done
to equalize harvest volumes.
Canada, which we will build up using best industry practices
•
In January 2021, we received three of the ten development
for sustainable farming operations. This region will provide a
licenses for the offshore concept “Blue Farm”, that we applied
harvest of at least 15 000 tonnes in 2025, and has a long-term
for in 2016. The concept is based on technology from the
harvest potential of at least 45 000 tonnes.
Norwegian oil and gas industry, and the aim is to eventually
• Better utilization of our seawater licenses by moving more
relocate these innovative farms offshore. We have appealed the
growth to land through our post-smolt program.
decision to the Ministry of Industry and Fisheries as we believe
• Better utilization of our seawater licenses by improving
there are grounds for additional licenses.
biosecurity, fish health, welfare and survival rates, and securing
on-growth and harvest volumes.
R E S H A P ING OUR BU S INE S S
2
COST IMPROVEMENT
STATUS
• We targeted a farming cost of NOK 37.9 per kg for 2020.
and reduce overall costs, due to reduced mortality, disease
— In 2019, we reached this target both in Rogaland (NOK 35.9
outbreaks, sea lice treatments, and fish handling. Our farming
per kg) and Finnmark (NOK 37.7 per kg). However, the cost
experience and our data analyses indicate that reduced time
in 2020 increased due to extraordinary biological challenges
in the sea will reduce risk of biological challenges such as sea
in these regions, with NOK 42.1 per kg in Rogaland and NOK
lice, Pancras Disease, winter ulcers, and infectious salmon
44.1 per kg in Finnmark. As the biological conditions are
anemia (ISA).
normalizing, we expect significant cost reductions, targeting
• We have expanded investments in digital monitoring and
NOK 40 per kg towards the end of year 2021 and 2022.
measures to mitigate the effects of harmful algae blooms,
— Cost reductions were achieved in BC, from CAD 8.3 per kg in
our main biological challenge in BC. The results so far are
2019 to CAD 8.0 per kg in 2020. We expect stable cost during
promising, and survival rates have increased to 90%.
2021 and additional cost reductions in 2022, targeting CAD
• We have increased competences at Group level within key areas
7 per kg.
MEASURES TAKEN
• During 2020, we narrowed our focus to the regions with the
that impact cost, like fish health and welfare, RAS technology
for the freshwater phase, and project management of post-
smolt facility construction.
• Due to a challenging market, strongly impacted by Covid-19,
greatest potential for profitable and competitive farming
we took measures to secure our financial position. We issued
operations. Our Norwegian and Canadian regions have the
a Green Bond of NOK 1.5 billion, with the aim of reducing our
greatest biological potential and are also in close proximity to
environmental footprint and improving fish welfare. Over the
our most important markets - Europe and the USA, respectively.
coming years, we will invest heavily in post-smolt production,
As a result, we aim to sell our Shetland operations when the
ASC certification, carbon emission reducing initiatives, and
timing is right.
the commercialization of new feed ingredients with a lower
• Changes were made to the Group executive management team,
environmental impact. With this, 38% of the Group’s financing
increasing focus on farming and operations.
was “Green” at year-end.
• While our post-smolt strategy
increases
investment
expenditures, we expect it to reduce operational expenditures
3
VALUE CH AIN REPOSITIONING
4
SUSTAIN A BILIT Y
Our main sustainability drivers and results are presented in Part
2 of this report.
STATUS
• We added a Chief Commercial Officer role to the Group
management team.
• We dissolved the sales organization Ocean Quality and are
building up a new, integrated sales and market organization.
The organization went into operation 1 January 2021.
GOING FORWARD
• Sell all of Grieg Seafood’s Norwegian fish by April 2021.
•
Implement all functions of a modern sales and market
organization during 2021.
• Develop a new sales and market strategy towards 2025,
including:
— strategic partnerships in retail and foodservice
— downstream innovation
— value added processing (VAP)
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
OPERATIONAL FOCUS AREAS
To achieve sustainable growth and improve competitiveness, we focus
on reducing the time fish spend at sea, improving fish welfare and
providing data-driven decision support to our operations. Together,
the focus areas strengthen our ocean farming.
R E S H A P ING OUR BU S INE S S
LESS TIME AT SE A (POST-SMOLT)
During the first stages of their life, salmon are raised in onshore
freshwater hatcheries. In traditional salmon farming, fish are
ACHIEVEMENTS 2020
•
In Rogaland, where post-smolt is piloted on a regional level:
transferred to the sea when they have undergone the smoltification
— While an average smolt transferred to the sea in 2014
process, making them physiologically ready for life in saltwater.
weighed 90 grams, the average smolt transferred in
With our post-smolt strategy, we keep the fish longer on land or
Rogaland weighed 280 grams in 2019 and 400 grams in
in closed facilities in the sea, shortening the time that they spend
2020.
growing in open sea-pens by several months.
— Production and growth of fish based on a post-smolt cycle
is working well. Batches of post-smolt with a variety of
Less time at sea will improve biological control, fish welfare,
average transfer weights have been tested, including a
survival, and quality because each salmon is less exposed to
batch with an average weight of 1.1 kg.
biological risks like sea lice, seaborn diseases or other unfavorable
— Pancras Disease (PD) has been one of the main biological
ocean conditions such as harmful algae or sub-optimal oxygen
challenges in Rogaland in recent years, often occurring at
levels. Less exposure to these risks will also allow us to better
the end of the time in sea in a traditional production cycle.
utilize preventative methods and avoid expensive treatments. This
In 2020, we had only one outbreak at one site, indicating that
will reduce our environmental impact as well as our production
post-smolt and shorter time in sea helps avoid this disease.
cost. Post-smolt also increases flexibility with regard to the
More generations with post-smolt will give us a better
transfer of smolt, allowing us to fallow sites for longer periods if
foundation on which to conclude.
necessary. The fish will be larger and more robust when entering
— Batches of post-smolt fish spending less than 12 months
the sea-growing phase, which we believe will increase health and
at sea reduced the number of sea lice treatments by 50%.
welfare in and of itself.
— Overall, our confidence in our post-smolt program is
Post-smolt transfer also allows for a more efficient production
cycle. It takes less time to reach harvestable size in the sea, which
frees up capacity at farms to grow more salmon within existing
GOING FORWARD
•
In Rogaland:
strengthened.
licenses. The result is a lower environmental footprint per fish,
— We have executed our post-smolt strategy gradually to
better fish health and welfare, lower costs, and increased annual
utilize increased production capacity, and have so far tested
harvests. Altogether, we expect post-smolt transfer to reduce
batches of post-smolt together with batches of traditional
operational expenditure
in the sea-growing phase,
improve
smolts on farms. In 2021, we will transfer post-smolt to
profitability and competitiveness, and provide opportunities for
entire farms. The average time our salmon spend at sea is
sustainable production growth. It strengthens our ocean based
expected to be further reduced.
salmon farming operations.
— We will trial harvesting an entire farm after only ten months
at sea, reducing seawater production by 100-150 days.
Grieg Seafood is piloting our post-smolt strategy in Rogaland.
— The expansion of Tytlandsvik Aqua is expected to be
We have also invested in post-smolt capacity in Finnmark, British
completed during 2021, adding an additional capacity of 750
Columbia, and Newfoundland. As it takes two to three years
tonnes of post-smolt. Going forward, additional initiatives
to farm one salmon, it will take time before we have harvested
are pursued, including Årdal Aqua, which will provide at
enough generations of fish with a substantially shorter time at
least 3 000 tonnes of post-smolt.
sea to draw final conclusions. We also need to learn how we can
— Grieg Seafood Rogaland targets an average smolt transfer
optimize welfare and fish farming with this new type of production
weight of at approximately 600 grams
in 2022, and
cycle, and adjust accordingly. However, our experience so far
approximately 750 grams in 2025.
indicates that results are meeting expectations.
•
In Finnmark, we target an increase of 4 000 tonnes of post
smolt by 2025 through various initiatives.
•
In BC, we will increase our smolt capacity from 500 tonnes to
900 tonnes by 2022 through our Gold River smolt facility.
• The RAS facility currently under construction in Newfoundland
includes a smolt module with a capacity of 1 500 tonnes.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
PRE VENTION AND FISH WELFARE
We pursue a systematic, long-term approach to fish health
and welfare. The key is investment and further development of
GOING FORWARD
• We have many ongoing initiatives to improve fish health and
preventive measures against seaborne hazards, such as sea lice,
welfare throughout the production cycle, including selection of
harmful plankton, jellyfish, low oxygen levels, infectious diseases,
roe with specific qualities related to sea lice and diseases, feed
and low seawater temperatures.
customized for the various stages of the salmon´s life cycle,
or vaccination targeted to combat specific diseases. Some
Prevention will reduce handling and stress for the fish. It will also
examples are:
reduce our environmental footprint by, for instance, reducing the
— Tests with improved feed formulas in Finnmark, utilizing
number of treatments needed. Moreover, prevention instead of
best available science, to strengthen health, welfare,
handling reduces production costs. The result is stronger growth,
robustness and quality. Examples of changes are increased
high harvesting quality, increased survival rates and lower costs.
levels of essential marine fat and a stronger vitamin mix.
ACHIEVEMENTS 2020
•
In BC, we are developing an algae detection and mitigation
— Initiatives to optimize health, welfare and robustness of
post-smolt. Post-smolt is a new type of production, and
we must learn and adapt accordingly. For example, we are
system, which is becoming more effective every year as we
looking into how the vaccine program should be structured
learn how to fine-tune and use it. The system comprises long
optimally for post-smolt, and what temperature profiles
tarps around the pens and aeration/oxygen generation systems
during the land-based phase is optimal for post-smolt
to keep harmful algae out and push clean and oxygenated
production cycles.
water up to the fish during periods of harmful algae blooms
— Initiatives to mitigate ISA and winter ulcers in Finnmark.
or sub-optimal oxygen levels. The effect is increased survival
We are testing an ISA vaccine, making changes to our smolt
and continued feeding and on-growth during challenging
transfer strategy and are working with the Norwegian
conditions. We have trialled this system with success in one of
Veterinary Institute to increasing knowledge about the virus
our most challenging areas, with results exceeding all previous
origin.
generations in growth and survival.
— Efforts to mitigate the negative impact mechanical sea lice
•
In Rogaland, we have had success with using cleaner fish as a
treatments may have on fish health and welfare. Mortality
preventive method to control sea lice. As a result, we did not
caused by such treatments have been reduced, and we work
use any sea lice treatments from July to November 2020.
to reduce it further.
• Key capabilities to improve fish health, welfare and survival
— Further improvements to our algae mitigation system in BC
are added on a Group level. A Group fish health and welfare
is under implementation.
manager will ensure more systematic improvement efforts in
• We are developing additional fish welfare indicators for the
this area. A specialist on RAS technology is also employed, to
Group, to be able to more systematically assess and improve
help optimize fish health and welfare in the fresh water and
fish welfare throughout our operations. The indicators are
post-smolt phase.
based partly on the Fishwell project. They will first be rolled
out in the seawater phase and subsequently in the freshwater
phase.
R E S H A P ING OUR BU S INE S S
“PRECISION FARMING”: DATA-DRIVEN DECISION SUPPORT
“Grieg Seafood Precision Farming” is our concept for digitalizing
farming operations, with the aim of providing strategic, tactical
GOING FORWARD
• New data analyses are in progress, to gain new strategic
and operational decision support into our production processes.
insights into various production areas, aimed at improving
Experience-based knowledge has always been the foundation
biological control. For example, one project will analyze
of salmon farming. With advanced sensors, big data, artificial
aspects of how on-growth is impacted by different feed types
intelligence, and automation incorporated into our operations,
and feeding regimes.
the Precision Farming concept introduces data-driven decision
• All Precision Farming initiatives in Rogaland will be connected
support as an addition to existing knowledge and experience.
to the operational center. Examples are dashboards on feed,
production, fish health and welfare to better benchmark
Big data analyses on previously unknown connections between the
between farms and increase learning from each production
fish and the environment provide insights for strategic decision-
cycle.
making. Digital tools and dashboards, providing real-time data on
• Evaluation of sea lice treatments, to gain insights into the
various farming parameters to operational centres as well as to
effectiveness of various treatments under various conditions.
farmers, aims to improve tactical and operational decisions. They
•
Improved capabilities in our tool to predict exposure to harmful
also allow us to benchmark on new parameters and better learn
algae blooms and low oxygen levels in BC.
from best practice. We aim to be able to predict negative events
•
Initiative to utilize video analytics with machine learning
early, enabling us to apply preventative measures and improve
algorithms to automize biomass control and sea lice counts is
management decisions. The result is expected to be increased
ongoing, and will be expanded to new areas such as behavioural
growth, reduced environmental impact, improved fish welfare,
based fish welfare monitoring.
increased productivity, and lower costs.
ACHIEVEMENTS 2020
• We have built up internal expertise in our analysis HUB for
the entire Group. During the year, we have conducted several
data and regression analyses, to provide strategic and tactical
decision-making support, aimed at mitigating biological
challenges:
— Analyses of outbreaks of ISA and winter ulcers in Finnmark
have caused changes in production planning to reduce risk.
— Data analyses support shorter time at sea (post-smolt) as
an important tool to reduce risk of biological challenges like
ISA and winter ulcers.
— Analyses of smolt yield have provided new insights into
how we can optimize production of post-smolt during the
land-based phase, to ensure robustness, strong health and
growth in the sea phase.
• Our full-scale integrated operational center in Rogaland
was completed at year end. All biological production is now
monitored and controlled by the center.
• BC significantly improved survival rates, due to the use of
sensors and ongoing mitigation improvements to reduce
impact of harmful algae. Mortality related to algae blooms was
reduced from 3.4% in 2019 down to 0.9% in 2020.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
LEARN MORE ON OUR WEBSITE
REDUCED TIME AT SEA (POST-SMOLT)
PREVENTION AND FISH WELFARE
“Our experience with post-smolt so far
indicates that our post-smolt salmon
is more protected against disease and
need fewer sea lice treatments. Shorter
time at sea strengthens ocean-based
salmon production.”
“Prevention is the key to all good things
in salmon farming. We aim to prevent
and protect our fish from the dangers
that exist naturally in the marine eco-
system, like diseases, sea lice, low oxygen
levels, or harmful algae.”
K JE TIL ØRNES
INTERIM REGION AL DIRECTOR ROGAL AND
SOLVEIG N YGA ARD
GLOB AL FISH HE ALTH M AN AGER
→ FULL STORY
→ FULL STORY
R E S H A P ING OUR BU S INE S S
DATA-DRIVEN DECISION SUPPORT
INDIGENOUS RECONCILIATION
“Data-driven knowledge has already
improved insight into some of the
industry’s most pressing fish welfare
challenges. Still, we are only at the
beginning of the digital transformation
in salmon farming.”
TROND K ATHENES
CHIEF DIGITAL OFFICER
→ FULL STORY
“Grieg is continuously working to
develop and improve our relationships –
and our trust – with the First Nations in
all of our areas. It’s very important that
we can give them knowledge, but that
they also can give us knowledge, so we
are both learning together.”
R ACHEL COMM ANDANT
ENVIRONMENTAL TRE ATMENT COORDIN ATOR, GRIEG SE AFOOD BC
MEMBER OF THE WÁHTA MOH AWKS OF THE MOH AWK N ATION
→ FULL STORY
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
COVID-19
The Covid-19 pandemic has disrupted the salmon market, causing a significant
shift in demand and lower prices in core markets. Grieg Seafood’s priorities are
to protect our people, the local communities where we operate, our partners, and
business operations, and to secure liquidity and financial strength. Despite the
challenging circumstances, demand for Atlantic salmon remains strong and Grieg
Seafood has been able to maintain efficient operations throughout the year.
R E S H A P ING OUR BU S INE S S
TAKING CARE OF EMPLOYEES
ENSURING FIN ANCIAL STA BILIT Y
Since the outbreak of Covid-19, employee well-being has been the
Following the outbreak of Covid-19, market uncertainty increased
number one priority for Grieg Seafood. We have crisis management
and prices have come down in all core markets, impacting the
teams at head office and in each region. We follow the advice of the
Group's earnings negatively. In November 2020, we were granted
authorities in the regions where we operate. We have implemented
temporary amendment to the financial covenants in our loan
measures to lower the risk of transmission and safeguard business
agreements with secured lenders through the third quarter
continuity, including strict rules at production sites and harvesting
of 2021. We were in compliance with the temporary amended
facilities to limit physical contact and encourage social distancing.
financial covenants at 31 December 2020. Our equity-ratio
Working from home has been encouraged whenever possible, and
measured according to IFRS was 41% at year-end 2020, while the
business travel has been restricted.
equity-ratio according to covenants was 43%.
PRODUCTION MAINTAINED
Due to higher market uncertainty, the risk of bad debts has
increased. Grieg Seafood has good routines for collecting and
managing trade receivables, and we have an open dialogue with
During the pandemic, the salmon farming industry has been
our customers. Countries highly dependent on tourism have been
recognized as an essential function in the regions where we
hit hard, and the US market has been badly affected due to the
operate. Despite the challenging circumstances, we have been able
importance of the HoReCa segment. The increased risk of loss has
to maintain efficient operations. Through industry organizations,
been reflected in our accruals.
Grieg Seafood maintains a constructive dialogue with the
authorities, continuously monitoring and discussing possible
Our investment target for 2020 was NOK 1 664 million. Total
arrangements to safeguard our salmon farming operations in
investments for 2020 ended at NOK 1 689 million, which include
various scenarios.
CHALLENGING AND VOL ATILE MARKE TS
both the cash consideration related to the acquisition of Grieg
Newfoundland and capital expenditures made in Shetland. In
the current, highly uncertain market climate, we continuously
evaluate our investment projects. Low salmon prices and reduced
market visibility, in addition to increased project complexity, has
Covid-19 has disrupted the salmon market, and caused a
impacted the pace of investment in our largest project, Grieg
significant shift in demand, away from the hotels, restaurants
Seafood Newfoundland. The changes will not affect our on-growth
and catering (HoReCa) segment towards the retail segment.
capacity or our harvesting targets.
Successive waves of restrictions and lockdowns have impacted
consumption patterns in most markets. particularly in Europe
The Company´s long-term dividend strategy states that the
and the USA. Despite this, our sales have remained good, though
average dividend should correspond to 30-40% of profit after
salmon prices have fallen.
tax, before fair value adjustment of biological assets. Dividends
are evaluated twice a year. Due to the increased volatility and
The retail segment and home consumption have been boosted.
uncertainty caused by the Covid-19 situation, combined with an
The shift from HoReCa to retail is expected to be reversed at some
extensive investment plan, the Board has decided to postpone the
point, but the current market situation may also lead to permanent
ordinary dividend for 2020.
changes in consumer behavior. With an increasing share of people
preparing food at home, combined with a growing preference for
healthy food and the current low prices, the demand for salmon
may increase in the retail segment going forward.
GOVERNMENT GR ANTS AND SUPPORT
Grieg Seafood Newfoundland has received approximately NOK
Supply lines have remained largely open during the year. However,
3.9 million in Covid-19 funding through an innovation assistance
somewhat limited availability has made airfreight expensive.
program and a regional relief program in Newfoundland. No other
Most of our salmon is shipped by truck from Norway or the UK to
regions have received any government grants or direct economic
European markets, or from Canada to North American markets.
support due to the impact of Covid-19.
Our diversified geographical presence provides some flexibility
and reduces logistical challenges.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
OUR VALUE CHAIN
OUR STRATEGY FOR 2020
OUR STRATEGY FOR 2025
BREEDING
FRESHWATER
FARMING
POST-SMOLT
SEAWATER
FARMING
In Rogaland, we
have a broodstock
operation where
we breed for
specific traits,
such as strong
health or
resistance to sea
lice and diseases.
In all of our
regions, we have
RAS freshwater
facilities, where
the eggs are
hatched and the
salmon spend
at least the first
year.
As part of our
post-smolt
strategy, we
keep the salmon
longer on land in
all regions.
The salmon
live and grow
in the sea until
they reach a
harvestable size
of 4–5 kg.
INPUT
NATURAL CAPITAL
• Public natural resources: we
lend sea areas for our sites and
fresh water for our RAS facilities.
• Privately owned natural
resources: Plant-based and
marine feed ingredients, and
salmon eggs.
TECHNOLOGICAL CAPITAL
• Farming equipment and
technology
FINANCIAL CAPITAL
• Trust and investment from
investors
• Access to capital
HUMAN CAPITAL
• People (experience, ideas,
passion)
• Culture
• Corporate Governance
POLITICAL/SOCIAL CAPITAL
• Our License to Operate
• Trusted among our key
stakeholders
• Favourable political conditions
R E S H A P ING OUR BU S INE S S
OUR STRATEGY FOR 2020
OUR STRATEGY FOR 2025
OUTCOME
HARVESTING
SALES AND
DISTRIBUTION
VALUE ADDED
PROCESSING
RETAIL /
HORECA
We have
harvesting plants
in Rogaland and
Finnmark. We
use a harvesting
vessel in BC. In
Newfoundland we
have cooperation
with a local plant.
We are building
our own global
sales organization
to support
growth and the
downstream
strategy. As of
January 2021,
our new sales
and market
organization was
operational.
We will
form closer
partnerships in
the market and
increase the value
of our salmon
through VAP.
Our salmon is
found in retail
stores or on
the menu at
restaurants or
hotels. Today, we
have two HoReCa
brands, Skuna
Bay and Kvitsøy.
2 300 000
HEALTHY MEALS PER DAY*
*Based on harvest volume of 130 000 tonnes
gwt in 2025, with 68% yield from live weight,
and servings of 125 grams.
OUR BRANDS
SKUNA BAY
KVITSØY
Skuna Bay is our high-end HoReCa brand for the US market.
Kvitsøy is our high-end HoReCa brand for
Skuna Bay fish is preferred by some of America’s top chefs, and
the European market. It is sold mainly to
is regularly served at the James Beard Award. Read more here.
Italy and Spain.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
MATERIALITY MATRIX
Together with our stakeholders, we have identified our most important risks and
opportunities, based on our operations and geographical locations. The materiality
matrix is the foundation of our five pillars.
• Anti-corruption
• Employee health & safety
• Safe and healthy food
• Fish health & welfare
• Protecting wild salmon (escape and sea lice
control)
• Protecting biodiversity & marine ecosystems
(local emissions, medicine use, wildlife
interaction)
• Low use of antibiotics
• GHG emissions
• Plastics pollution
• Sustainable feed ingredients (zero
deforestation, sustainable marine
ingredients, novel ingredients)
• Human rights, including labour rights
• Economic performance
• Corporate governance & responsible
business conduct
•
Indigenous rights
• Climate and nature risk
• Fresh water use
• Diversity
• Value creation in local communities
• Visual and noise pollution
• Recycling & waste
• Transparency and
management
stakeholder dialogue
• Circular economy
• Community sponsorships
• R&D/ innovation
• Lifelong learning for
employees
• Data security and privacy
S
N
O
I
S
I
C
E
D
D
N
A
S
T
N
E
M
S
S
E
S
S
A
R
E
D
L
O
H
E
K
A
T
S
N
O
E
C
N
E
U
L
F
N
I
L
A
I
R
E
T
A
M
T
N
A
C
I
F
I
N
G
I
S
E
T
A
R
E
D
O
M
MODER ATE
SIGNIFICANT
M ATERIAL
SIGNIFICANCE OF ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS
The identified sustainability topics are based on the positive and negative environmental, social, and economic impacts that our stakeholders think Grieg Seafood may have.
The materiality analysis is based on stakeholder dialogues and evaluations by our global and regional management teams. The material topics identified define the content
of this report and are aligned with how we report our pillars. The materiality matrix is reviewed and updated annually. The Board of Directors has oversight of the materiality
assessment. During 2021, we are strengthening our corporate governance on sustainability. All material areas in the materiality assessments will be covered by group policies,
and progress is reviewed by the Board on a monthly or quarterly basis. For more information, please see the GRI index in the Appendix of this Annual Report.
R E S H A P ING OUR BU S INE S S
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
OUR APPROACH
TO SUSTAINABLE
BUSINESS
OUR PILLARS
SDG ALIGNMENT
TOPICS
HEALTHY OCEAN
SUSTAINABLE FOOD
• Fish health & welfare
• Sea lice control
• Escape control
• Limiting local emissions
Interactions with wildlife
•
• Safe and healthy food
• Sustainable feed ingredients
• Climate action
• Recycling and waste
management
• Plastic pollution
R E S H A P ING OUR BU S INE S S
In our long-term perspective, there is no contradiction between
clean seas, healthy fish, and financial profit. It is our task to make
these aspects go hand in hand and contribute to a sustainable ocean
economy. Our targets go beyond short-term profitability. Based on
our materiality assessment, our five pillars show our commitment to
sustainable and long-term value creation for all of our stakeholders.
PROFIT & INNOVATION
PEOPLE
LOCAL COMMUNITIES
• Our market
• Economic productivity
• Profitable growth
• Precision farming
• Research and innovation
• Human rights and ethics
• Embracing diversity
• Creating attractive jobs
• Keeping our employees safe
• Anti-corruption
• Local value creation
•
Indigenous relationships
• Dialogue and engagement
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
OUR CERTIFICATIONS
It is important for both local communities and customers to know
that our farming practices are sustainable. For reassurance, our farms
are certified by independent bodies.
To ensure that local communities, customers, and civil society can trust that we farm responsibly and to the highest
standards, we certify our farms according to several recognized, third-party certifications. Read more about our
certifications and their current status here.
CERTIFICATE
DESCRIPTION
STATUS
AIM
ASC
GLOBALG.A.P
BAP
Aquaculture Stewardship Council
(ASC) was founded in 2010 by World
Wide Fund for Nature (WWF) and IDH
Sustainable Trade Initiative to establish
global standards for sustainable seafood
production.
At year-end 2020, 15 sites
(80% of net production)
in Finnmark and 11 sites
(59% of net production)
in BC have received ASC
certification.
100% ASC certification or
compliance: In Finnmark
and BC by the end of 2021,
in Rogaland by 2023.
Newfoundland also aims to
certify when the seawater
sites are in production.
Global Good Agricultural Practices is
a standard for both agriculture and
aquaculture. The standard covers food
safety, animal welfare, sustainability,
employment, and traceability.
GlobalG.A.P is particularly important for
customers in Europe.
Best Aquaculture Practices is an
aquaculture standard that covers
practices in all stages of the fish farming
process. BAP is particularly important
for customers in the United States.
All our farms in Norway
and the UK are certified.
Maintain certification of all
farms in Norway and the UK.
(Not relevant for Canada)
All our farms in BC are
certified.
Maintain certification of all
farms in BC.
(Not relevant for Norway
and the UK).
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
R E S H A P ING OUR BU S INE S S
TRANSPARENT REPORTING
ON OUR PROGRESS
This is an integrated report, and covers our progress with respect
to all of our pillars. We believe that measuring and integrating
comparable, consistent, and reliable environmental, social, and
governance parameters is fundamental to making more informed
decisions and to facilitating long-term sustainable growth.
R E S H A P ING OUR BU S INE S S
INDE X / FR AMEWORK
2020 RESULT
COMMENT
CDP CLIMATE
CDP FOREST
FAIRR INDEX COLLER FAIRR PROTEIN
PRODUCER INDEX
A-
A-
5th
SUSTAINALYTICS ESG RISK RATING
38.2 - High Risk
(where 0 is best)
MSCI ESG RATINGS
THE GOVERNANCE GROUP - ESG 100 - THE
OSLO STOCK EXCHANGE
A
A
GRI GLOBAL REPORTING INITIATIVE
Audited
GSI GLOBAL SALMON INITIATIVE
Audited
Grieg Seafood has engaged with CDP since 2018.
Grieg Seafood reported on CDP Forest actions for the
first time in 2020.
Grieg Seafood is engaging with the index to better
understand the concerns of our stakeholders and
issues we should address in our reporting.
Sustainalytics have based their score on our annual
report from 2018. Since then, we have published and
updated Group policies and increased transparency
and disclosures in subsequent annual reports. We
are trying to engage Sustainalytics in a dialogue to
understand why they do not include updated material
in their analyses, as well as how we can improve
generally.
Grieg Seafood started looking into the ESG Ratings’
methodology and criteria in 2020.
Since 2019, Grieg Seafood has engaging with The
Governance Group, which published its first “ESG 100
- The Oslo Stock Exchange” report in 2018. The report
assesses the 100 largest listed companies on the Oslo
Stock Exchange based on the three ESG dimensions.
In 2020, Grieg Seafood maintained our top score from
2019.
This is our second annual report prepared in
accordance with the GRI Standards.
We have reported to the GSI for several years. The
GSI issues an annual sustainability report covering
approximately 40% of the salmon farming industry.
NUES NORWEGIAN CODE OF PRACTICE FOR
CORPORATE GOVERNANCE
In compliance
We adopted the Norwegian Code of Practice for
Corporate Governance in 2007.
OECD GUIDELINES FOR MULTINATIONAL
ENTERPRISES
OSE OSLO STOCK EXCHANGE
TCFD TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES
TNFD TASK FORCE ON NATURE-RELATED
FINANCIAL DISCLOSURES
–
–
–
–
EU SUSTAINABLE FINANCE TAXONOMY
n/a
We adhere to principles and standards for responsible
business conduct.
We follow the Euronext guidance on ESG reporting.
Our second TCFD report has been published in
connection with this annual report. We have also
performed climate-related scenario analysis in 2020.
We are a member of the Observer Group to the
TNFD. TNFD will build awareness and capacity to
reduce the negative impacts of the financial sector on
biodiversity.
From 2022, the EU taxonomy will provide a
classification system for which economic activities
can be considered environmentally sustainable.
Aquaculture has not yet been included in the list of
industries covered by the taxonomy. We are constantly
monitoring developments in this area.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 01: RESHAPING OUR BUSINESS
OUR IMP R O V E ME N T S
TOWARDS A
SUSTAINABLE
FOOD SYSTEM
We advance a more sustainable global food system
by continuously improving and by creating
shared value for shareholders, local communities,
employees and customers alike.
A Q U A C U LT U R E I N A S U S TA I N A B L E G L O B A L F O O D S Y S T E M
H E A LT H Y O C E A N
S U S TA I N A B L E F O O D
P E O P L E
L O C A L C O M M U N I T I E S
P R O F I T & I N N O VAT I O N
4 6
5 2
6 8
9 2
114
12 2
T O WA R D S A S U S TA IN A BL E F OOD S Y S T E M
AQUACULTURE IN A
SUSTAINABLE GLOBAL
FOOD SYSTEM
Currently, food systems are responsible for 70 percent of the water extracted from
nature, cause 60 percent of biodiversity loss, and generate up to a third of human
greenhouse gas emissions. A complete transformation of our global food system
is needed. We must provide healthy food for a growing population using fewer
resources and with a lower impact. If we do it right, food from the ocean can play
an important role.
FIGURE 1.8
FEED CONVERSION RATIO
Feed conversion ratio (FCR) measures the productivity of different protein production
methods. A lower FCR represents a more efficient use of feed resources.
6–10
2.7–5
1.7–2
CHICKEN
PORK
CATTLE
1.2–1.5
FARMED
SALMON
T O WA R D S A S U S TA IN A BL E F OOD S Y S T E M
TOMORROW’S SUSTAINABLE GLOBAL
FOOD SYSTEM
• Healthy and nutritious food for 9 billion people
• Nature and biodiversity protected
• Low carbon and low climate risk
• Good animal welfare
• A circular economy with resources recycled
• Social and economic justice for producers in
supply chains
FARMED SALMON NUTRIENT PROFILE
• Omega 3 fatty acids
• Protein
• Vitamin D, B12 and A
•
Iodine
• Selenium
• Minerals
Research shows that eating seafood at least twice a week helps
maintain a healthy heart and reduces the risk of cardiovascular
diseases. Regular consumption of salmon can promote health
and development across the lifespan. Read more here.
Aquaculture has the potential to be an important part of the solution. 70% of the Earth is covered by ocean. Today, however, we obtain
only about 2% of our food from the sea. While there are limits to the amount of wild fish that can be sustainably harvested, sustainable
aquaculture can meet the increased demand for seafood in people’s diets. With a low carbon footprint, low feed conversion ratio, low land
and fresh water consumption, and a high edible yield, farmed salmon continues to be one of the most eco-efficient forms of animal protein.
In addition, farmed salmon is a nutritious food with numerous proven health benefits. Read more here.
FIGURE 1.9
EDIBLE YIELD
68%
FARMED ATLANTIC
SALMON
Edible yield measures how much of the animal is actually used for human consumption. Farmed Atlantic
salmon has a high edible yield compared to other animal proteins.
46%
CHICKEN
52%
PORK
38%
LAMB
FIGURE 1.10
CARBON FOOTPRINT
Farmed salmon has a low carbon footprint compared to other animal proteins. Carbon footprint measures the
total greenhouse gas emissions caused directly and indirectly by production of an item. Carbon footprint is
measured as tonnes of carbon dioxide equivalent per tonne of edible protein.
0.60
FARMED SALMON
0.88
CHICKEN
1.30
PORK
5.92
BEEF
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
T O WA R D S A S U S TA IN A BL E F OOD S Y S T E M
THE CHALLENGES
WE MUST SOLVE
Though we have made great progress in finding more
sustainable fish farming methods in recent decades,
many challenges remain to be solved. For farmed
salmon to be a part of a sustainable global food
system, we must keep improving.
1. ENSURING CO-EXISTENCE WITH NATURE AND OTHER SPECIES
It is our responsibility to protect biodiversity wherever we operate. Our aim is to use
farming methods that allow us to co-exist with other species, such as wild salmon, cod,
shrimp, wild mammals, and birds. Going forward, our industry must work hard to reduce
our environmental impact.
2. IMPROVING FISH WELFARE
While only a few fish from millions of eggs survive in the wild, farming fish in captivity puts
an ethical responsibility on us to safeguard our stocks’ survival, health, and welfare. While
we have worked hard to improve survival rates and fish health in recent decades, much
work remains to understand how we can improve animal welfare at our farms. This also
includes cleaner fish.
3. FINDING SUSTAINABLE FEED INGREDIENTS
As an industry, we need to develop new feed ingredients in order to grow sustainably. We
need novel marine ingredients, as well as novel protein ingredients.
4. CUTTING CARBON EMISSIONS
While farmed salmon has a low carbon footprint compared to other animal proteins,
our industry must do more to contribute to the Paris Climate Agreement’s goals.. New
technologies must be developed to cut emissions in our operations and value chain.
5. RECYCLE RESOURCES
Our industry must develop a circular approach in more areas. The aim is to support the
circular economy and recycle resources throughout our value chain.
6. PROMOTING HUMAN RIGHTS
As an industry with global supply chains both upstream and downstream, we have a
responsibility to respect and promote human rights both in our own operations and in our
value chains.
T HE SU S TAIN A BLE
DE V EL OP MEN T GO AL S
The UN Sustainable Development Goals guide
us towards a more sustainable food system.
They highlight opportunities to grasp and
challenges to solve - both in our farming
operations and in our value chain. Read how
Grieg Seafood aligns with the various SDGs
here.
GL OB AL SU S TAIN A BILI T Y
I NI T I AT I V E S
Grieg Seafood has committed to several
initiatives that set high standards for our
farming operations and value chain. Initiatives
range from ocean stewardship to the climate,
deforestation, and human rights. Read more
about these initiatives here.
R&D A C T I V I T Y
R&D is inherent to delivering on our strategy
and targets, such as improvements in fish
welfare, sustainability, cost control and
product quality. Read about our efforts here.
PAR T NER SHIP S AND
C OLL A B OR AT ION
Collaboration and partnerships with
researchers, peers, companies in our value
chain, NGOs or other relevant actors is
highly valued by Grieg Seafood. Only through
collaboration can we drive necessary change,
and solve the challenges we have in our
industry and in our global food system. Read
more about our partnerships here.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
PA R T 2
TOWARDS A
SUSTAINABLE
FOOD SYSTEM
Though we have made great progress in
finding more responsible fish farming
methods in recent decades, many challenges
remain to be solved on our journey towards
a more sustainable food system. Each day,
we strive to improve.
HE A LT H Y O C E A N
Farming salmon with practices that keep the fish and
F I S H H E A LT H A N D W E L FA R E
oceans healthy has a positive impact on our harvested
volume, cost, quality, license to operate and employee
engagement.
S U S TA IN A BL E F OOD
We work to make our practices more sustainable along
S A F E A N D H E A LT H Y F O O D
the entire value chain. Focus areas extend from safe
and healthy food, traceability, and feed to carbon emis-
sions and waste management.
P E OP L E
Every single day, whether it is sunny, stormy or freezing
H U M A N R I G H T S & E T H I C S
cold, our fantastic employees are out there working
hard in the hatcheries, on the farms or at the harvest-
ing plants. Their passion and dedication drive Grieg
Seafood forward.
L OC A L C OMMUNI T IE S
We are grateful to our local communities for giving us
L O C A L VA L U E C R E AT I O N
PROF I T & INNOVAT ION
Without a profitable business, we will not be able to
T H E S A L M O N M A R K E T
permission to farm salmon in their fjords and inlets. In
return, we do not only do what we can to ensure local
biodiversity and sustainable farming methods. We also
contribute to vibrant local communities in the many ru-
ral areas where we operate.
farm healthy salmon for people to eat all over the world.
To achieve good financial results, our farming methods
need to be both cost-effective and sustainable.
S E A L I C E C O N T R O L
E S C A P E C O N T R O L
I N T E R A C T I O N W I T H W I L D L I F E
L O C A L E M I S S I O N S
S U S TA I N A B L E F E E D I N G R E D I E N T S
R E D U C I N G C A R B O N E M I S S I O N S
C L I M AT E A N D N AT U R E R I S K
WA S T E M A N A G E M E N T
E M B R A C I N G D I V E R S I T Y
C R E AT I N G AT T R A C T I V E J O B S
K E E P I N G O U R E M P L O Y E E S S A F E
A N T I - C O R R U P T I O N
E C O N O M I C P R O D U C T I V I T Y
P R O F I TA B L E G R O W T H
G R I E G S E A F O O D ' S S H A R E S
A N A LY T I C A L I N F O R M AT I O N
O U R S P E C I A L L I C E N S E S
K E Y P E R F O R M A N C E I N D I C AT I O R S
5 4
6 0
6 2
6 3
6 4
7 0
74
8 0
8 6
8 8
9 2
10 0
10 4
10 8
112
114
12 4
12 8
13 4
15 6
16 0
16 6
16 8
HE A LT H Y OC E A N
Farming salmon with practices that keep the fish and
F I S H H E A LT H A N D W E L FA R E
oceans healthy has a positive impact on our harvested
volume, cost, quality, license to operate and employee
engagement.
S E A L I C E C O N T R O L
E S C A P E C O N T R O L
I N T E R A C T I O N W I T H W I L D L I F E
L O C A L E M I S S I O N S
S U S TA IN A BL E F OOD
We work to make our practices more sustainable along
S A F E A N D H E A LT H Y F O O D
the entire value chain. Focus areas extend from safe
and healthy food, traceability, and feed to carbon emis-
sions and waste management.
S U S TA I N A B L E F E E D I N G R E D I E N T S
R E D U C I N G C A R B O N E M I S S I O N S
C L I M AT E A N D N AT U R E R I S K
WA S T E M A N A G E M E N T
P E OP L E
Every single day, whether it is sunny, stormy or freezing
H U M A N R I G H T S & E T H I C S
cold, our fantastic employees are out there working
hard in the hatcheries, on the farms or at the harvest-
ing plants. Their passion and dedication drive Grieg
Seafood forward.
E M B R A C I N G D I V E R S I T Y
C R E AT I N G AT T R A C T I V E J O B S
K E E P I N G O U R E M P L O Y E E S S A F E
A N T I - C O R R U P T I O N
L OC A L C OMMUNI T IE S
We are grateful to our local communities for giving us
L O C A L VA L U E C R E AT I O N
permission to farm salmon in their fjords and inlets. In
return, we do not only do what we can to ensure local
biodiversity and sustainable farming methods. We also
contribute to vibrant local communities in the many ru-
ral areas where we operate.
PROF I T & INNOVAT ION
Without a profitable business, we will not be able to
T H E S A L M O N M A R K E T
farm healthy salmon for people to eat all over the world.
To achieve good financial results, our farming methods
need to be both cost-effective and sustainable.
E C O N O M I C P R O D U C T I V I T Y
P R O F I TA B L E G R O W T H
G R I E G S E A F O O D ' S S H A R E S
A N A LY T I C A L I N F O R M AT I O N
O U R S P E C I A L L I C E N S E S
K E Y P E R F O R M A N C E I N D I C AT I O R S
5 4
6 0
6 2
6 3
6 4
7 0
74
8 0
8 6
8 8
9 2
10 0
10 4
10 8
112
114
12 4
12 8
13 4
15 6
16 0
16 6
16 8
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
PA R T 2
TOWARDS A
SUSTAINABLE
FOOD SYSTEM
HEALTHY OCEAN
Farming salmon with practices that keep the
fish and oceans healthy has a positive impact
on our harvested volume, cost, quality, license
to operate and employee engagement.
PA R T 2
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
F I S H HE A LT H A ND W E L FA R E
HE A LT H Y OC E A N
FISH HEALTH
AND WELFARE
Ensuring the good health and
welfare of the fish in our care
is first and foremost an ethical
responsibility. It is also the most
important factor in achieving good
growth, higher quality at harvest
and lower costs.
OUR AP P R O A CH T O FISH HE ALT H
AND W ELFAR E
We are committed to improving the health and welfare of our fish.
Good fish health and welfare implies that the highest possible
number of fish thrive, grow, and survive to the end of their lifecycle.
Every region has implemented measures to fully comply with
national fish health and welfare legislation. Every region also has
a specific plan for preventive measures and treatments to secure
fish health.
We have the same ethical responsibility to safeguard the good
health and welfare of the cleaner fish in our care as our salmon.
Our policies for fish health and welfare therefore apply equally to
salmon and cleaner fish.
Our fish health policy and our fish welfare policy follow the
guidelines of the World Organization for Animal Health (OIE).
OU R P R INCIP LE S F OR FIS H HE ALT H AND W ELFAR E
FISH HEALTH
• Minimize the pathogens (harmful micro organisms) entering
FISH WELFARE
There is no universal definition of animal welfare, but we accept
our farms.
that every fish is an individual with a perception of life. We regard
— Intake of healthy and robust roe and fish.
fish welfare as the quality of life as perceived by the animal itself.
— Strict hygienic control of boats, feed, people, or any
equipment taken into the farms.
We seek to fulfill “The five freedoms for animals under human
• Minimize the pathogens multiplying within the fish farm
control”:
environment.
— Daily removal of mortalities.
1. Freedom from hunger, thirst, and malnutrition
2. Freedom from fear and distress
— Feed program targeted for each fish species and stage of
3. Freedom from discomfort
the lifecycle.
4. Freedom from pain, injury, and disease
— Intake of fish with the physiology to thrive in the farm.
5. Freedom to express normal patterns of behavior
— Intake of fish vaccinated with available and effective vaccines
relevant for the area.
• Minimizing any discomfort to the fish during its lifetime at our
— Continuous health monitoring and rapid implementation of
farms:
necessary measures during disease outbreaks.
— Regular risk-based water monitoring for early detection of
• Minimize any environmental health risk to the fish.
risk factors and rapid implementation of measures.
— Regular monitoring of water quality with respect to
— Careful handling of any live fish during treatments, grading,
temperature, oxygenation, and salinity, according to local
transport, etc.
risks. In our freshwater facilities, we control and adjust
— Monitoring welfare indicators during treatments in sea
these factors to ensure healthy growth conditions for the
fish.
water for early detection of physical damage and rapid
implementation of measures.
— Monitoring of algae and jellyfish blooms in periods of risk.
— Monitoring the seabed regularly to avoid sedimentary
loading, and the implementation of fallowing periods
according to local environmental conditions.
— Regular fish health checks for early detection of diseases
and rapid implementation of measures.
• Ensuring that all live fish are anesthetized prior to killing. Fish
is killed by electrical stunning.
HE A LT H Y OC E A N
There is still a lot to learn about fish welfare, including finding
good ways to measure it. Grieg Seafood has participated in
the development of the FISHWELL handbook, which we are
implementing. However, we are still not satisfied with our ability to
measure good welfare in a precise way. We find that daily feeding
measurements are still the best indicators of whether our fish
are thriving, as fish with good health and welfare eat well and
according to predicted parameters. We are working on developing
our own additional indicators for good welfare.
CLEANER FISH
Cleaner fish eat sea lice off the salmon and are used as a
preventive measure to keep sea lice numbers low. In this way,
they help to reduce the number of delousing treatments salmon
undergo. We use wrasse and lump suckers in Rogaland, and lump
suckers in Finnmark. Our cleaner fish are either farmed or wild.
Fishing quotas for wild cleaner fish are regulated by Norwegian
Authorities.
As cleaner fish are living animals in our care, they are also covered
by our fish health and welfare policies. However, we recognize
that fish health and welfare is not on a sufficient level as of today,
and mortality rates are too high. We are working systematically to
improve in this area. However, as a new species in aquaculture, it
will take time to get to a sufficient health and welfare level. Some
of our efforts are:
• Established practices to ensure that the cleaner fish are as
robust and healthy as possible.
• Optimized vaccination programs.
• Screening before release into the pens.
• Specific feed in the pens, tailor-made for cleaner fish.
• Tailor-made, artificial kelp forests in the pens where the
cleaner fish can hide, avoid stress, rest, and sleep.
We are working systematically to improve our reporting routines,
evaluate causes of mortality and to have better control of the loss
of cleaner fish at sea.
F I S H HE A LT H A ND W E L FA R E
LEARN MORE ON OUR WEBSITE
→
Improving fish health and welfare
→
Policies for fish health and welfare of
salmon and cleaner fish
→
Policy for the use of antibiotics
FIGURE 2.1
DENSIT Y IN THE PENS
Our seawater pens are between 97.5% - 98,5% water and
2.5% - 1.5% fish biomass, providing space for the fish in our
facilities to allow for comfort, natural behavior and a healthy
growth cycle.
FISH BIOMASS: 2.5%
WATER: 97.5%
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HE A LT H Y OC E A N
F I S H HE A LT H A ND W E L FA R E
OU R AP P R O A CH T O AN T I BIO T I C S
OUR P R INCIP LE S F OR AN T IBIO T IC S
Resistance to antibiotics is a growing global challenge, and
• Antibiotics are used only as a last resort to treat bacterial
such risks increase with extensive use of antibiotics in animal
diseases when fish health and fish welfare are threatened, and
protein production. We are committed to combating resistance to
never as a growth-promotor.
antibiotics.
• All farming operations comply with the WHO Guidelines on
Use of Medically Important Antimicrobials in Food Producing
We are committed to preventing bacterial diseases by using
Animals.
available vaccines and biosecurity measures. We aim to avoid use
• Antibiotics on the WHO list of Highest Priority Critically
of antibiotics when possible. In Norway, effective vaccines have
Important Antibiotics categorized as “critically important” will
reduced our use of antibiotics to zero.
not be used.
• Antibiotics on the WHO list of Highest Priority Critically
Important Antibiotics categorized as “highly important” or
“important” can be used if fish welfare is threatened.
• Antibiotics must be prescribed by authorized fish health
personnel and only drugs licensed as veterinary medicine will
be used.
• Withdrawal periods for medicine use are rigorously controlled
and documented.
• All prescriptions for antibiotics must be approved by central
management in Grieg Seafood ASA.
“Ensuring good fish health and welfare is one of the main tasks
of a salmon farmer. While we have seen progress in recent years,
we are not satisfied with the status quo. We need more research
and development, and to continuously improve.”
SOLVEIG NYGAARD GLOBAL FISH HEALTH MANAGER
HE A LT H Y OC E A N
F I S H HE A LT H A ND W E L FA R E
O UR TA R GE T S
Antibiotics
No use of antibiotics
Survival rate*
Above 93% seawater survival rate by 2022
Above 95% seawater survival rate by 2025
*Survival reported in accordance with the standards of the Global Salmon Initiative (GSI) is defined as: (Total number of mortalities at sea in the last 12
months – total number of culled fish due to illness or similar and not included in the harvested number)/(closing number of fish at sea the last month +
total number of mortalities at sea the last 12 months + total number of harvested fish the last 12 months + total number of culled fish (due to illness or
similar and not included in the harvested number)) X 100.
We have also set targets for survival rates in fresh water, which will be implemented in 2021. In the wild, only
a small percentage of fertilized eggs survive and become adults. That is our biological starting point. Over the
years, research has allowed us to improve the quality of breeding process, the eggs and survival rates, but we still
experience mortality especially in the very early phase. We work systematically at the various stages in the lifecycle
to improve survival rates. These targets can be found in our fish health and fish welfare policies.
RESULTS IN OUR REGIONS
→ Rogaland
→ Finnmark
→ British Columbia
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
HE A LT H Y OC E A N
HE A LT H Y OC E A N
S AL MON FAR MING AND BIODI V ER SI T Y
We must use farming practices with the smallest possible
environmental impact, and work continuously to reduce our impact
further. It is our responsibility to protect nature and biodiversity
wherever we operate. Our aim is to use farming methods that allow
us to co-exist with other species. Going forward, our industry must
work hard to reduce our environmental impact.
Read more about our efforts to ensure co-exist with wild salmon
here, coastal white fish here, and crustaceans here.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
S E A L IC E C ON T R OL
HE A LT H Y OC E A N
SEA LICE
CONTROL
Controlling sea lice levels is one of the
most important measures to protect
both wild salmon and the health and
welfare of farmed salmon. Sea lice
treatments are expensive and resource
intensive. We aim to keep sea lice
levels low at all times.
OUR AP P R O A CH
We have an ethical responsibility to protect our salmon against
health issues caused by sea lice. We also have a responsibility to
reduce the risk of sea lice from salmon farms contaminating wild
salmonids, especially during the smolt migration period. We also
need to protect biodiversity and the ecosystems around our farms,
and to minimize the impact from sea lice treatments.
Every region has implemented measures to comply with national
sea lice legislation.
FIGURE 2.2
OUR APPROACH TO SE A LICE CONTROL
1. PREVENTION
Genetics, post smolt, closed or semi-closed
containment, fallowing zones, skirt, tarp
2. BIOLOGICAL REDUCTION
Cleaner fish, laser, etc.
3. TREATMENTS
Medical/non-
medical
1. When available, we use roe that has
proven more resistant to sea lice.
Post-smolt reduces the time at sea
and reduces the exposure to sea lice,
which improves sea lice control. We
use sea lice skirts/tarps, to prevent
sea lice from entering the pens.
2. We use lump suckers and wrasse,
which eat sea lice. Rogaland in
particular has succeeded in using
wrasse effectively. We use lump
suckers at all green licenses in
Finnmark. Read about cleaner fish
health and welfare here.
3. We use mechanical treatments, such
as fresh water, to avoid affecting
the environment. The methods
are selected when conditions are
favorable. Only as a last resort do we
use medical treatments.
HE A LT H Y OC E A N
S E A L IC E C ON T R OL
LEARN MORE ON OUR WEBSITE
→
→
Policy for sea lice control
Co-existence with wild salmon
RESULTS IN OUR REGIONS
→
→
→
Rogaland
Finnmark
British Columbia
OU R P R INCIP LE S
Grieg Seafood prefers to use preventive and biological sea lice
measures rather than medical and non-medical treatments.
Harvesting will always be considered when sea lice-infested fish
are close to harvestable weight.
• Sea lice measures are based on IPM (Integrated Pest
Management) principles. A multifaceted approach will give
improved results and reduce the risk of sea lice becoming
resistant.
• Minimize use of pharmaceutical treatment methods that
discharge treatment water into the sea. Pharmaceutical lice
treatments are acceptable in clean treatment systems, which
purify the treatment water before it is discharged back into the
ocean.
• Non-medical treatments are preferred if they provide an
acceptable level of fish welfare. A risk assessment must be
performed prior to any treatment. The treatment’s effectiveness
and the risk of side effects on fish and the environment should
be evaluated.
• Pharmaceuticals for sea lice treatments must be prescribed by
authorized fish health personnel, and only medicines licensed
for sea lice control should be used.
• Withdrawal periods for medicine use are rigorously controlled
and documented.
OU R TAR GE T S
Sea lice level Rogaland
and Finnmark*
Average adult female sea lice below 0.5
Sea lice level BC**
Average motile sea lice below 3.0
*At the green licenses in Finnmark, the limit is 0.25 adult female sea lice per fish, while
during April and June, when wild salmon smolt migrate from the rivers and pass the
salmon farms, the limit is 0.2 adult female sea lice per fish.
**Pacific salmon species on the Canadian west coast have a higher tolerance for sea
lice and for that reason we use separate KPI for British Columbia.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
HE A LT H Y OC E A N
ESCAPE
CONTROL
In areas where the wild salmon
population is of the Atlantic species,
escapes may cause interbreeding
between farmed and wild salmon
in the rivers, and interfere with the
genetic uniqueness of the local wild
salmon population.
OUR AP P R O A CH
We regard it as our responsibility to avoid interbreeding between
our farmed salmon and the local wild salmon populations. In
Rogaland and Finnmark, our farmed salmon is of the same
species as the wild salmon population (Atlantic salmon), and
interbreeding may happen should escapes occur. In BC, the wild
salmon are of the Pacific salmon specie, which cannot interbreed
with our Atlantic salmon. In Newfoundland, we use sterile fish,
which cannot interbreed with local wild fish.
Grieg Seafood have zero tolerance for escapes from our farms in
all regions.
OUR P R INCIP LE S
• High technical standards at our sites. We have implemented
the technical minimum requirement set by the government,
the NYTEK standard, at all facilities in Norway to avoid escapes
during harsh weather.
• We follow procedures to avoid escapes before, during and after
operations, according to local conditions:
— Divers and/or a ROV are used before and after the transfer
or treatment of fish.
— In Rogaland, divers are used during operations.
— In Finnmark, a ROV is used during operations.
— In British Columbia, we use double nets on all pens. An ROV
is used to inspect the grow nets after each targeted two
week cleaning cycle.
• Regular inspections of vessels, moorings, and facilities to
verify compliance.
•
Inspections before and after harsh weather.
• Our goal is that all employees attend courses on escape
prevention at least every third to fifth year. New employees also
receive risk and procedural training, and do not carry out work
operation.
OUR TAR GE T
Escape
Zero escape incidents
OUR R E SULT S
We did not have any escapes in 2020.
HE A LT H Y OC E A N
INTERACTION
WITH WILDLIFE
Farms are often located in areas
abundant with birdlife and marine
mammals. We strive to avoid
conflicts with wildlife.
OUR AP P R O A CH
We arrange operations and facilities in a way that minimizes our
impact on local wildlife.
OUR P R INCIP LE S
• Potential conflicts with wild animals are evaluated when we
consider new sites.
• We minimize use Acoustic Deterrent Devices (ADDs) as some
research indicates that they impact the navigation systems of
certain marine mammals.
• Weapons are not allowed on our sites.
• Where relevant, we use equipment that minimizes the risk of
injury to wildlife, such as strong nets, anti-predator equipment
or electric fences.
• We generally only euthanize animals that are injured, and
choose alternative ways to protect farms against intruders.
• We aim to release any animal that gets stuck in our pens
unharmed.
OUR TAR GE T
Wildlife interaction
Minimize impact on wildlife
LEARN MORE ON OUR WEBSITE
→
Co-existence with wild life
RESULTS IN OUR REGIONS
→
→
→
Rogaland
Finnmark
British Columbia
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HE A LT H Y OC E A N
LOCAL
EMISSIONS
Local emissions from salmon farming
may affect the marine ecosystem in
the ocean under or around the pens.
Therefore, the environment gets time
to restore between each generation of
fish farmed. Our impact should never
be irreversible.
OUR AP P R O A CH
As in all other types of food production, our farming operations
leave a footprint through local emissions. Such emissions may be
excess feed, feces from the fish or copper from the fish net.
This impact should never be irreversible. Between each generation
of fish, we allow the ecological system to rest and restore.
L OC A L E MI S S ION S
HE A LT H Y OC E A N
L OC A L E MI S S ION S
OU R P R INCIP LE S
OUR TAR GE T S
• We choose sites with good currents and exchange of water.
Seabed conditions
This ensures that faecal waste is dispersed rather than
accumulating in one place, thus mitigating its negative impact.
We move away from sites that have less optimal conditions and
increase production on sites with optimal conditions, which
reduces our overall impact.
• All farms are fallowed after each generation, allowing the
environment to rest until it reaches regulated limits of
restoration. Only then may we transfer a new generation of
salmon to the farm. Sites with optimal conditions restore
quicker than sites with less optimal conditions. We monitor the
seabed under and around our sea farms, and perform benthic
testing during peak biomass.
• All regions apply Area Based Management, where all farms in
an entire fjord system is fallow at the same time, allowing a
larger marine ecosystem to rest at the same time.
• We aim to reduce excess feed by using underwater cameras
and move feeding to operational centres where feeding experts
are developed, so we can stop feeding when the fish are replete.
• We support copper-free antifouling solutions on our nets.
All sites restored between each generation
of fish farmed
Copper
100% copper free nets
LEARN MORE ON OUR WEBSITE
→
Impact on nature
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L OC A L E MI S S ION S
HE A LT H Y OC E A N
OU R R E SULT S
Each country has its own scoring system for benthic tests of the
if seabed test results indicate that is needed. Only when a farm
seabed under fish farms, including their own threshold of when
has reached the threshold of restoration, may we transfer a new
a site is restored. The marine ecosystem under all farms are
generation of fish to the site. If fallowing is not enough to improve
restored through fallowing before a new generation of fish is
seabed test results, additional measures, such as reducing
transferred to the farm.
production, is taken.
In Norway, farms must conduct independent seabed tests (B
In BC, regulations require us to conduct benthic tests at peak
test) at peak biomass production/max load, and also undertake
biomass at each farm, and fallow the farm after ended production
regular independent tests in the area around the farms (C test).
cycle until the seabed of the site reaches the regulated threshold
Local regulations impose fallowing periods after each generation
of remediation. The test must be accepted by the regulators and,
to ensure the environment under and around the pen recover.
for most farms, an independent third party.
The minimum fallowing period is at least two months, and longer
FIGURE 2.3
RESTORED ECOSYSTEMS UNDER FARMS
Region
Rogaland
Finnmark
Remediated ecosystems under farms before a new generation of fish was transferred in 2020
100% of farms*
100% of farms*
British Columbia
100% of farms**
*Restored to “very good” or “good” thresholds according to local regulations.
**Threshold on hard bottom according to local regulations: Beggiatoa species, similar bacteria or marine worms does not cover 10% or more of any four segments of substrate.
Threshold on soft bottom according to local regulations: Sulphide does not exceed 1 300 µM at 30 m and 700 µM at 125 m away from the cage edge along two transects.
ROGALAND
Grieg Seafood has partnered with other salmon
farming
waste from fish farming is low and the environmental ecosystem
companies
in Rogaland
to commission an
independent,
condition is good in Rogaland (the salmon production area PO2).
environmental monitoring program, to ensure that the combined
organic emissions from all the farms do not significantly impact
92% of our sites received a very good or good score on seabed tests
the fjords. The program monitors the water quality and possible
in 2020, compared to 100% in 2019. The site that received a poor
eutrophication in the Ryfylke fjord system. The results from 2020
score must subsequently fallow for longer. Through our integrated
show that the fjord system’s environmental condition is good.
operation center, we can develop specialized feeding expertise.
We are working to reduce excess feeding by using underwater
According to the Risk Report of Norwegian Fish Farming by the
cameras, so that we can stop feeding when the fish are replete.
Institute of Marine Research, the risk of impact from organic
FIGURE 2.4
ROGAL AND RESULTS OF B-TEST
Year
2020
2019
Very good
Good
83%
92%
8%
8%
Poor
8%
0%
Very poor
Test not yet taken (new sites)
0%
0%
0%
0%
HE A LT H Y OC E A N
L OC A L E MI S S ION S
FINNMARK
According to the Risk Report on Norwegian Fish Farming by the
52% of our sites received a very good or good score on seabed
Institute of Marine Research, the risk of impact from organic waste
tests in 2020, compared to 39% in 2019. We are working to increase
from fish farming in Finnmark (the salmon production area PO12) is
the percentage of good scores. Our results are impacted by use of
low and the environmental ecosystem condition is good. Compared
deep sea lice skirts, which lead to an increased concentration of
to Western Norway, there are far fewer fish farming operations in
benthic impact. Longer fallowing periods are in place for sites with
Finnmark, which reduces the overall risk. An environmental study
“poor” scores, and a new generation will not be stocked until the
of the organic impact of fish farming in the Alta fjord, published in
impact is reversed and the sites have met the regulated thresholds
2017, showed low impact on the fjord system. Organic materials
of restoration. Access to new sites will also reduce the organic
decompose more slowly in low seawater temperatures.
impact. In addition, digital models of the conditions in sea help us
better place the farms in relation to the currents, which will reduce
the organic impact.
FIGURE 2.5
FINNMARK RESULT OF B-TEST
Year
Very good
Good
Poor
Very poor
Sites with hard seabed (do
not get a score)
Test not yet taken (new sites)
2020
2019
26%
29%
26%
10%
26%
24%
0%
10%
16%
10%
5%
19%
BRITISH COLUMBIA
The Aquaculture Activities Regulation, established under the
substrate monitoring according to the Monitoring Standard. The
Canadian Fisheries Act, sets exceedance limits for the benthic
sites can not be restocked if they exceed these limits.
FIGURE 2.6
BC % OF SITES THAT ARE RESTORED
Substrate Type
Benthic exceedance thresholds at peak biomass or before re-stocking
Compliance 2020
Hard Bottom
Soft bottom
Beggiatoa species, similar bacteria or marine worms does not cover 10% or more
of any four segments of substrate.
Sulphide does not exceed 1 300 µM at 30 m and 700 µM at 125 m away from the
cage edge along two transects.
Sulphide does not exceed 1 500 µM outside the Allowable Zone of Effect*
100%
100%
100%
* ASC Salmon standard.
FIGURE 2.7
USE OF COPPER
Region
Rogaland
Finnmark
British Columbia
Copper-free antifouling solutions on nets
100%
100%
100%
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
PA R T 2
TOWARDS A
SUSTAINABLE
FOOD SYSTEM
SUSTAINABLE FOOD
We work to make our practices more sustainable
along the entire value chain. Focus areas extend
from safe and healthy food, traceability, and feed
to carbon emissions and waste management.
PA R T 2
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
S U S TA IN A BL E F O OD
SAFE AND
HEALTHY FOOD
Our salmon are safe to eat and
healthy for our bodies. We are
transparent about our farming
methods and communicate our
standards to our customers.
OUR AP P R O A CH
Customers and consumers can trust our products, our approach
to food safety, and our food safety management systems.
S A F E A ND HE A LT H Y F OOD
S U S TA IN A BL E F O OD
S A F E A ND HE A LT H Y F OOD
LEARN MORE ON OUR WEBSITE
→
Our policy for food safety
QUALITY SHARE OF SALMON
→
→
→
Rogaland
Finnmark
British Columbia
OU R P R INCIP LE S
• Grieg Seafood’s products are produced, processed, packaged,
labelled, and sold in a value chain that ensure a high level and
focus on protection of human health.
• Based on scientific advice, data collection, analysis, and
regulatory requirements Grieg Seafood deliver a seamless
integrated approach to food safety and quality
• Grieg Seafood has a fully integrated traceability system from
roe to finished product, including fish feed. Our operation also
keeps adequate records of raw material suppliers, and the
ingredients they supply.
• Grieg Seafood will advise customers to comfortably recognize
that they are responsible for proper storage, handling,
processing, or cooking of food after delivery.
• Products originating from our processing plants have been
handled under a competent HACCP- and sanitary program.
Grieg Seafood focus on risk-based thinking to take advantage
of opportunities and preventing unwanted results.
• Zero residues of any medicines in our products.
OUR TAR GE T S
Global Food Safety
Initiative certification
All operations 100% certified in 2021
Quality share
93% superior share
Medicine residue
Zero residues
Environmental
contaminants
No levels above limits set by authorities
Foodborne bacteria
No levels above limits set by authorities
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S A F E A ND HE A LT H Y F OOD
S U S TA IN A BL E F O OD
OU R R E SULT S
CERTIFICATIONS
All our farming operations are certified according to GFSI at year
PRODUCT RECALLS
We did not have any product recalls in 2020. We have not had any
end 2020, as our BAP and GLOBALG.A.P. certifications cover our
product recalls for the last ten years. However, we perform regular
entire supply chain. Our sales and market organization is chain-
training on our procedures for managing product recalls. We are
of-custody certified according to ASC.
not banned from any markets.
TRACEABILITY
Each salmon has a CV with information about origin and production
QUALITY SHARE OF OUR SALMON
We categorize our salmon as superior, ordinary or production
to ensure full traceability. The information includes details on the
grade. Superior quality has a positive overall impression with good
relevant fish group, farm and pen where it was grown, broodstock,
meat quality and no external damage or faults. The superior share
roe, feed batches, certifications, vaccinations and medical
is calculated as a percentage of net biomass, excluding discards.
treatments if relevant. Each fish box has a traceable LOT number.
During 2021, we will assess Blockchain services or equivalent
measures aimed at improving traceability related to sustainability
and food safety.
FIGURE 2.8
ENVIRONMENTAL CONTAMINANTS AND LIMITS IN 2020 FOR SAMPLES OF GRIEG SE AFOOD SALMON
Environmental contaminant
Lead
Mercury
PCB 6
EU limit
0.3 mg/kg
Samples
Norway
British Columbia
Median
Max
<
<0.05 mg/kg
<
<0.05 mg/kg
<
<0.05 mg/kg
<
<0.05 mg/kg
0.5 mg/kg
Median
0.010 mg/kg
0.005 mg/kg
Max
0.025 mg/kg
0.02 mg/kg
75 µg/kg
Median
3.405 µg/g
Max
11.60 µg/g
n/a
n/a
n/a
n/a
Dioxins PSDD/F TEQ excl LOQ
3.5 pg/g
Median
0.0237 pg/g
Max
0.126 pg/g
Our sampling for PCBs, dioxins, PCB-like dioxins and heavy metals are taken on all farms at the end of the production cycle. Samples from
each site are tested according to standard analytical methods by external laboratories. BC does not source fish oil from areas where all of
these contaminants can be a challenge, and therefore the samples are less comprehensive.
S U S TA IN A BL E F O OD
S A F E A ND HE A LT H Y F OOD
FIGURE 2.9
LISTERIA CONTAMINATION
Region
Rogaland
Finnmark
Shetland
British Columbia
Number of samples*
2019
Listeria detected (%)
2019
Number of samples*
2020
Listeria detected (%)
2020
2 136
2 406
1 564
572
5.2%
1.3%
2.1%
2.1%
2 661
1 791
N/A
588
6.4%
0.8%
N/A
0.7%
*Number of samples of end product and harvesting plant environment.
Our Listeria sampling is done at key points on the processing line to ensure food safety. Samples are taken regularly to show variations over
time. We also test finished products for Listeria. Samples are analyzed according to standard methods by external laboratories. If Listeria
is detected, action plans are executed in the form of extra thorough cleaning or technical measures such as change of equipment set-up, or
replacement of equipment. Relevant customers are informed. Most of them have measures in place to manage Listeria for the fish they buy,
even when Listeria is not found at the harvesting plant. The share of Listeria detected has decreased in Finnmark and BC in 2020 compared
to 2019, while in Rogaland the percentage has increased. In 2020, we expanded our sampling in Rogaland, and detected Listeria at a higher
rate than in 2019. To mitigate listeria we have implemented a new cleaning procedure, including the replacement of the cleaning firm used
by an in-house cleaning team. We expect these measures to be reflected in the sampling of 2021.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
S U S TA IN A BL E F O OD
S U S TA IN A BL E F E E D INGR E DIE N T S
SUSTAINABLE
FEED INGREDIENTS
Fish feed is the most important and
cost-intensive input factor in salmon
farming. Feed ingredients should
come from sustainable sources. We
continuously work to reduce the
impacts from our fish feed.
OUR AP P R O A CH
Input factors in fish feed, both marine ingredients and plant-based
ingredients, should come from sustainable sources.
Ingredients with high-risk are certified by recognized certifications.
Today, fish meal and fish oil from fisheries, Brazilian soy and
palm oil are identified as ingredients of high-risk. To get a
fuller picture of the sustainability risks connected to feed, Grieg
Seafood is currently risk assessing ingredients used according to
environmental, social and governmental parameters.
The environmental impact from feed must be reduced. In addition,
the aquaculture industry is expected to grow significantly during
the coming decades, due to global population growth. As such,
novel types of feed ingredients are needed to be able to produce
salmon sustainably going forward.
O UR TA R GE T S A ND A CHIE V EMEN T S
Targets
Achieved in 2020
All marine ingredients (excluding byproducts) used are based on
fisheries certified according to MSC or MarineTrust (including
FIPs)
Phased in throughout the year and achieved by year-end 2020
in all regions
FFDRo below 2.52 (ASC requirement)
Yes (in all regions)
FFDRm below 1.20 (ASC requirement)
Yes (in all regions), even below 1.0, making us a net producer of
marine protein
All Brazilian soy protein concentrate certified according to
ProTerra or segregated RTRS
Yes (in all regions using Brazilian soy protein concentrate)
All Brazilian soy protein concentrate supplied by Brazilian
vendors with a 2020 cut-off date + robust MRV system
Yes (in all regions using Brazilian soy protein concentrate). CJ
Selecta, Caramuru and Imcopa are the Brazilian suppliers used.
All palm oil used certified according to Round Table on
Sustainable Palm Oil
Yes (in the UK, the only region using a small amount of palm oil)
S U S TA IN A BL E F O OD
S U S TA IN A BL E F E E D INGR E DIE N T S
OU R P R INCIP LE S
• Marine ingredients do not contribute to overfishing:
— Palm oil is certified by Round Table on Sustainable Palm Oil
— No marine ingredients come from illegal, unreported, or
— Plant-based ingredients should not cause planting on
unregulated fisheries.
peatlands or exploitation
— All marine ingredients (excluding byproducts) are certified
— Grieg Seafood is committed to engage with stakeholders to
by MSC or MarinTrust (including Fisheries
Improver
promote awareness of moving towards zero deforestation
Programmes).
• Feed ingredients used by Grieg Seafood do not pose any risks to
— We comply with the ASC standard for how much fish meal
human health. Read more here.
and fish oil we have in our feed.
• Be a net producer of marine protein
• Grieg Seafood will take part in commercializing novel feed
ingredients.
• Grieg Seafood is committed to ensure we do not contribute to
• Grieg Seafood is committed to work with stakeholders towards
deforestation either directly or indirectly and we require the
more sustainable feed with lower impact.
following:
• Feed suppliers are required by our Supplier Code of Conduct
— Brazilian soy protein concentrate are certified according to
to minimize their environmental impact, to safeguard basic
ProTerra or Round Table on Responsible Soy (segregated)
human rights and to behave responsibly. They are expected
— Brazilian soy protein concentrate is supplied by Brazilian
to identify and monitor their environmental impact, and to
vendors with a 2020 cut-off date, including a robust MRV
implement measures where needed.
system, for all of their soy bean business. This is important
to mitigate indirect contribution to deforestation in this
high-risk geography.
FIGURE 2.10
FEED INGREDIENTS IN 2020
3%
5%
19%
Rapseed oil
Fishmeal
Wheat
Wheat gluten
Fishoil
Guar
Soy
Beans and peas
Sunflower
15%
9%
9%
11%
14%
15%
This illustrates the average of raw material content in our feed
used in Norway and UK. In BC, the content is somewhat different as
in general a larger part of protein from vegetable are replaced by
poultry-bi product. Palm oil comprises 0.22% of our feed, only used
in GSF Shetland, and soy protein concentrate comprises 15% of our
feed globally.
LEARN MORE ON OUR WEBSITE
→
→
→
Supplier Code of Conduct
Our feed approach
Green Bond
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
S U S TA IN A BL E F E E D INGR E DIE N T S
S U S TA IN A BL E F O OD
OU R R E SULT S
ZERO DEFORESTATION
Grieg Seafood’s Brazilian soy protein concentrate vendors, CJ
Selecta, Imcopa and Caramuru, have as the first Brazilian soy
traders set a 2020 cut-off date for all of their soybean business in
GRIEG SEAFOOD FEED PROJECT - A HOLISTIC
APPROACH TO ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG) RISKS
In the animal feed industry, the sustainability focus has mainly
the Cerrado, including a robust and NGO approved MRV system.
been on high-risk ingredients such as soy, palm oil, fish meal and
With this move, they have set a new benchmark for sustainable
fish oil. In the past, efforts to mitigate the risk of overfishing lead to
supply chains globally. Grieg Seafood have engaged with these
less use of marine ingredients in salmon feed. Unfortunately, some
producers and applaud their leadership. Read more here.
of the alternatives introduced, like Brazilian soy, were later linked
to new issues of concern, such as deforestation and conversion. To
Grieg Seafood participated in the CDP Forest program for the
avoid repeating the mistakes of the past, a more holistic approach
first time in 2020. CDP Forest provides a framework of action to
to the mitigation of sustainability linked risks in feed ingredients
measure and manage forest-related risks and opportunities,
is needed. This is especially necessary as the seafood industry is
transparent reporting on progress, and commitment to proactive
looking at developing novel feed ingredients suitable for scale. We
action for the restoration of forest and ecosystem. We scored A- on
must ensure that a scale-up of these ingredients do not contribute
our work against deforestation. For more information, please visit
to new or unforeseen ESG risks, and that they are a good fit for a
CDP’s website here.
future sustainable food system.
FIGURE 2.11
MARINE INGREDIENTS - FISH ME AL FFDRM
FFDRm
Norway
British Columbia
ASC REQUIREMENT: 1.2
2016
0.6
0.6
2017
0.7
0.5
2018
0.5
0.5
2019
0.4
0.4
2020
0.4
0.4
Norway
British Columbia
ASC requirement
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2016
2017
2018
2019
2020
The forage fish dependency ratio (FFDRm) represents the amount of wild fish needed to produce sufficient fishmeal for one kilo farmed
salmon. We use little fish meal in our feed. Our FFDRm figures shows a continuous reduction and that we were a net producer of marine
protein in 2020 in all regions. Our FFDRm is well below the ASC limit.
S U S TA IN A BL E F O OD
S U S TA IN A BL E F E E D INGR E DIE N T S
Grieg Seafood has initiated a project to evaluate environmental,
social and governance risks in salmon feed ingredients in a
holistic manner. In the assessment we have included topics
previously unexplored in-depth in relation to all ingredients,
like land use and biodiversity, carbon footprint and climate risk,
circularity, pollution, soil health, fresh water consumption, human
rights, governance risk and scaleability. The goal of the project is
to increase transparency and traceability, to be able to benchmark
feed ingredients on material ESG aspects and have the ability to
reduce risk and drive change throughout our supply chains. The
assessment will also inform what novel ingredients we engage
with.
WWF US is our partner in the project. The aim is to release a pilot
of the assessment during 2021. The materials produced will be
public.
2016
1.6
1.9
2017
1.8
1.5
2018
1.6
1.9
2019
2.0
1.4
2020
2.1
1.8
Norway
British Columbia
ASC requirement
FIGURE 2.12
FISH OIL FFDRO
FFDRo
Norway
British Columbia
ASC REQUIREMENT: 2.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2016
2017
2018
2019
2020
The forage fish dependency ratio (FFDRo) represents the amount of wild fish needed to produce sufficient fish oil for one kilo farmed
salmon. We use little fish oil in our feed. We used more fish oil in 2020 than the year before, but we are still well below ASC requirements.
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S U S TA IN A BL E F O OD
S U S TA IN A BL E F E E D INGR E DIE N T S
ADVOCACY TO PROMOTE MORE SUSTAINABLE
FEED
• We have taken part in the development of the new ASC feed
standard.
NOVEL FEED INGREDIENTS
Grieg Seafood will take part in commercializing novel feed
ingredients. Parts of the funds from our Green Bond will be
used for that purpose. We are in dialogue with producers of such
• We are a member of the MarineTrust Governing Body Comittee,
ingredients, like insect meal, and have previously engaged in
to engage in the improvement of global fisheries.
projects aimed at transforming algae into feed. Based the outcome
• We are a co-chair of the Steering Group of the Cerrado
of our ESG feed project outlined above, we will determine our
Manifesto Statement of Support, to promote action towards
approach to novel ingredients.
zero deforestation and conversion in the Cerrado.
• We are a funding member of the Cerrado Funding Coalition,
to provide funding for local Brazilian soy farmers for the
environmental service of ending deforestation.
• We have excluded Cargill Aqua Nutrition from our Green Bond
use of proceeds, until their mother company Cargill Inc. have
reduced their soy related deforestation risk in Brazil
• Through the Global Salmon Initiative, we take part in the
development of a new industry standard for carbon emissions
from feed, which will allow us to benchmark and work more
systematically to reduce carbon emissions from feed.
FIGURE 2.13
BIOLOGICAL FEED CONVERSION RATIO (BFCR)
Rogaland
Finnmark
British Columbia
Grieg Seafood Group
1.5
1.4
1.3
1.2
1.1
1.0
2016
2017
2018
2019
2020
The biological feed conversion ratio describes the amount of feed required to produce one kilo of farmed salmon. It is calculated as the total
weight of feed divided by gross growth (incl. mortality). The ratio is an indicator of feed efficiency, reflecting how effective a feed strategy can
be. The bFCR ratio is impacted by the ability of the fish to utilize the nutrients in the feed for growth. The ratio is also impacted by over- or
underfeeding, causing feed spill or reduced growth, respectively. The biological challenges we experienced in 2020 impacted fish appetite
negatively and as such the bFCR increased. Mitigations of biological challenges will consequently reduce bFCR.
S U S TA IN A BL E F O OD
S U S TA IN A BL E F E E D INGR E DIE N T S
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S U S TA IN A BL E F O OD
R E DUC ING C A R B ON E MI S S ION S
REDUCING CARBON
EMISSIONS
While farmed salmon has a low
carbon footprint compared to other
animal proteins, our industry must
do more to contribute to achieving
the Paris Climate Agreement. New
technologies must be developed to cut
emissions at both our operations and
along our value chain.
OUR AP P R O A CH
According to the Intergovernmental Panel on Climate Change,
global warming may cause ecosystem
imbalance, ocean
acidification, extreme weather and social unrest. To fulfil the
Paris Agreement and avoid the consequences of global warming,
significant climate action by nations, businesses and individuals is
needed in the coming years.
According to the High-Level Panel for a Sustainable Ocean
Economy, food production from the sea may be advantageous
from a climate perspective, because the carbon footprint
from production is low compared to terrestrial animal protein
production. However, we recognize that we must do more to cut
greenhouse gas (GHG) emissions from our farming operations and
supply chains. Direct emissions from our production (Scope 1 & 2)
account for less than 10% of our total emissions. More than 90% of
our emissions originate from our value chain (Scope 3), particularly
those aspects linked to fish feed and the transportation of salmon
from our harvesting plants to the markets.
We are working continuously to improve data quality and reporting
from our operations and suppliers. By cutting GHG emissions,
Grieg Seafood aims to be a part of the low carbon solution in a
sustainable global food system.
S U S TA IN A BL E F O OD
R E DUC ING C A R B ON E MI S S ION S
LEARN MORE ON OUR WEBSITE
→
→
Our policy for climate action
Reducing carbon emissions
OU R P R INCIP LE S
Our focus and efforts to reduce our GHG emissions particularly
target feed and the transportation to the markets. We also work
continuously to reduce GHG emissions from our production.
• Reduce the GHG emissions from our feed.
• Favour transportation methods with a low carbon footprint.
— Grieg Seafood’s set-up allows for shorter transportation
routes and limits use of air freight to our two main markets:
− Main supply to Europe from Northern and Southern Norway
− Main supply to the USA from Eastern and Western Canada
— Eliminate unnecessary weight from transportation.
— Preferred methods of transportation are train, ship, and low
emission trucks.
— Take part
in R&D projects and help commercialize
climate friendly transportation methods suited for our
transportation routes.
• Reduce the carbon footprint of our production, with the aim
of eliminating our dependence on finite energy sources.
Prefer renewable energy sources in regions where that is
commercially available.
• Take part in R&D projects in regions where renewable energy
sources are not available.
• Encourage suppliers to take climate action through:
— Setting GHG emission reduction targets in line with the
Paris Agreement.
— Conducting annual climate accounting.
•
Improve transparency and contribute to the development of
robust GHG reporting standards that allow for comparison and
benchmarking.
• Do not engage in lobbying activities that run contrary to the
fulfilment of the Paris Agreement.
• Engage in carbon offset initiatives.
OU R TAR GE T S
OUR R E SULT S
GHG emission
reduction
35% reduction of Scope 1, 2 and 3 by 2030
(from a 2018 base year)
100% reduction of Scope 1, 2 and 3 by 2050
THE SCIENCE BASED TARGET INITIATIVE
Our Greenhouse Gas (GHG) emission reduction targets are
classified as well-below 2°C (2030) and 1.5°C (2050), aligned with
the Paris Agreement. Our emission targets have been approved by
the Science Based Targets initiative, and can be found here.
CDP
Grieg Seafood scored A- in the CDP for 2020 for our climate
disclosures and efforts to transition to a low-carbon future. Even
though farmed fish already has a low carbon footprint compared
to other animal proteins, our industry must still find ways to cut
more emissions from our operations and supply chain. For more
information, please visit CDP’s website here.
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TOTAL EMISSIONS (tCO2e)
EMISSIONS (kgCO2e) / tonnes
R E DUC ING C A R B ON E MI S S ION S
S U S TA IN A BL E F O OD
FIGURE 2.14
GREENHOUSE GAS EMISSIONS SCOPE 1 + 2 + 3
REGION
Scope
Scope 1
Scope 2 location based
Total (Scope 1 + 2)
Scope 3
ROGALAND
Downstream transportation
Other
Total (Scope 3)
Total GHG emissions Rogaland
Scope 1
Scope 2 location based
Total (Scope 1 + 2)
Scope 3
FINNMARK
Downstream transportation
Other
Total (Scope 3)
Total GHG emissions Finnmark
Scope 1
Scope 2 location based
Total (Scope 1 + 2)
Scope 3
Downstream transportation
Other
Total (Scope 3)
BRITISH
COLUMBIA
2018
3 721
456
4 177
n/a
n/a
n/a
4 177
7 134
420
7 554
n/a
n/a
n/a
7 554
9 143
783
9 926
n/a
n/a
n/a
2019
9 211
424
9 635
n/a
n/a
n/a
9 635
4 779
696
5 475
n/a
n/a
n/a
5 475
14 867
685
2020
8 875
420
9 295
67 529
6 234
73 763
83 058
4 123
776
4 899
19 488
8 368
27 856
32 755
15 609
673
2018
2019
2020
256
382
403
n/a
256
n/a
382
3 201
3 605
254
169
182
n/a
254
n/a
169
1 035
1 217
15 552
16 282
597
1 101
769
n/a
n/a
n/a
20 533
6 883
27 416
43 698
n/a
597
n/a
1 101
1 294
2 063
Total GHG emissions British Columbia
9 926
15 552
Our absolute Scope 1 and Scope 2 greenhouse gas (GHG) emissions
Well-boat services make up a substantial proportion of our
increased by 1% compared to last year, while production increased
emissions, and the decisions whether to provide these services
by 5%. Measured as kgC02 equivalents per tonne harvested, the
ourselves or outsource them to external service providers, have a
emissions decreased by 3%. Excluding Newfoundland, which
considerable influence on our Scope 1 emissions. Note that well-
has been included in 2020 for the first time, absolute Scope 1
boat emissions for Finnmark are categorized as Scope 3 emissions
and Scope 2 greenhouse gas (GHG) emissions decreased by 3%,
relative emission by 7%.
due to contractual details. The emissions from well-boat activities
in 2020 totals almost 3000 tCO2e.
In Rogaland, total emissions decreased by 4% from 2019 to 2020.
In BC, the increase in total emissions by 5% is attributable to a
The decrease is due to a 9% decrease in the harvested volume.
substantial 50% increase in harvested volume which also made
However, since the correlation between production volume and
relative emissions per tonne go down by 30%.
emissions is not entirely linear, emissions per tonne slightly
increased by 6% from 2019 to 2020.
In Finnmark, the harvested volume dropped by 17%, reducing
total emissions by 11%. Measures taken to reduce greenhouse
gas emissions includes connecting two production sites to the
electrical grid.
In Shetland, the harvested volume increased by 39%, while total
emissions decreased by 10%. Emissions per tonne dropped by
35%.
S U S TA IN A BL E F O OD
R E DUC ING C A R B ON E MI S S ION S
Scope 1
Scope 2 location based
Total (Scope 1 + 2)
Scope 3
SHETLAND
Downstream transportation
Other
Total (Scope 3)
9 813
2 741
12 554
10 507
1 494
12 001
n/a
n/a
n/a
n/a
n/a
n/a
Total GHG emissions Shetland
12 554
12 001
OTHER *
Scope 1
Scope 2 location based
Total (Scope 1 + 2)
Scope 3
Other
Total (Scope 3)
Total GHG emissions Other
Scope 1 (tCO2e)
Scope 2 location based (tCO2e)
Total Scope 1 + Scope 2 location based
TOTAL GROUP
Scope 3
Downstream transportation
Other
Total (Scope 3)
—
4
4
n/a
n/a
4
29 811
4 404
34 215
n/a
n/a
n/a
—
5
5
n/a
n/a
5
39 364
3 304
42 668
12 031
4 571
16 602
27 416
1 847
106
1 953
713
713
2 666
40 184
3 059
43 243
n/a
n/a
n/a
119 581
26 769
146 350
Total GHG emissions Group
34 215
42 668
189 593
* Newfoundland, ASA, Sales & Market
9 730
1 084
10 814
1 053
1 065
689
n/a
1 053
n/a
1 065
1 057
1 746
459
514
498
n/a
459
n/a
514
1 685
2 183
Grieg Seafood Newfoundland was onboarded subsequent to
In Finnmark and Rogaland, we are observing the benefits of using
the acquisition date 15 April 2020, and completed its very first
onshore electricity, battery packs, or hybrid solutions instead of
greenhouse gas accounts in 2020. However, as Newfoundland
diesel generators to operate a growing number of production sites.
has not yet started its seawater production, its emissions, mostly
A new department established in 2020 with focus on improving
attributable to the use of heavy construction equipment and
competitiveness and sustainability will support the regional
company vehicles, are still relatively low but expected to increase
management teams in different areas such as sustainability, R&D,
noticeably once the first smolt are transferred to the sea (expected
and fish health and welfare. The department will also contribute
summer 2021).
to local emission reduction projects. As a first step, we conducted
sustainability workshops with our farming operations in Finnmark,
Since we are growth-oriented, and are targeting higher production
Rogaland, and British Columbia in 2020. Capturing the majority
and harvest volumes, we cannot exclude an increase in our total
of emission data on an individual production site basis allows us
emissions in the short run. Nevertheless, we will continue to work
towards reducing both relative and total emissions, and to achieve
the reduction targets we revised from relative to total in 2020.
to compare the energy intensity of each production site across all
regions, and to develop strategic low-carbon transition plans for
2021 and beyond.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
S U S TA IN A BL E F O OD
R E DUC ING C A R B ON E MI S S ION S
• Our preventative approach to sea lice control will also reduce
Our greenhouse gas emissions are reported in accordance with
our carbon footprint, as use of large vessels in treatments also
the Corporate Accounting and Reporting Standard, developed by
lead to greenhouse gas emissions (GHG).
the Greenhouse Gas Protocol Initiative (GHG protocol), using the
• We have tested out methods to chill the salmon after harvesting,
which made it possible to avoid ice in packaging and reduced
the carbon footprint per kilo of packed salmon. We will invest in
this equipment in the years to come.
operational approach and we report on all seven greenhouse
gases covered by the Kyoto Protocol (CO2, CH4, N2O, HFC, PCFs,
SF6, NF3) which are converted to CO2e. 2018 is our new baseline
year in accordance with SBTi guidance that companies should
• Before making any investments, we evaluate their potential
"choose the most recent year for which data are available as the
carbon emissions and environmental impact.
base year".
The two most substantial contributors both with regard to Scope 3
Scope 1 emissions are those that are directly emitted by Grieg
and in totality are fish feed and downstream transportation. Even
Seafood’s activities and include emissions from the combustion
though we collected data on fish feed as well, we are still waiting
of fossil fuels for generators, heating, and our own vehicles.
to receive the emission factors for the feed from our suppliers. We
Emissions are calculated on the basis of recorded energy cost using
will publish the data on our website once we have received and
local energy prices. We also have a relatively small consumption of
audited the factors. Once fish feed is included, we expect Scope 3
hydrofluorocarbons for cooling, which are included in Scope 1. All
to make up more than 90% of our total emissions (see also Figure
Scope 1 emission factors used are from DEFRA (Department for
2.16).
Environment Food and Rural Affairs, UK Government). Underlying
data is collected from financial cost.
In general, downstream transportation was calculated as transport
from harvest facility to airport of departure to destination country
Scope 2 emissions are indirect emissions relating to third-party
(capital) in tonne-kilometre (tkm). For all sales of our Canadian
generation of the electricity we consume at our sites. Emissions are
sales operations (mostly delivered to the North American market),
reported as location-based emissions in accordance with the GHG
transport was calculated to state capital in order to achieve an
protocol. Location-based factors are from the International Energy
acceptable degree of precision. For the sales from UK, transport
Agency (IEA), using three-year rolling averages. For electricity
from harvest facility to airport was not included. Value added
consumed in Norway, Grieg Seafood applies the Nordic mix since
processing and details on the exact transportation routes were
this is the most representative emission factor for Norway given
not taken into consideration due to missing data. With our new
that Norway is almost self-sufficient when it comes to electricity
sales organization and new technology, e.g. blockchain, we aim to
and that the major part of electricity imported in Norway comes
increase the level of detail in regard to tracking the transport way
from Sweden and Danmark (nve.no). The Nordic mix is calculated
our salmon covers from harvest facility to end-consumer in the
as a weighted average of the Swedish, Norwegian, Finnish, and
years to come.
Danish factor. Underlying data is collected from financial cost and
With regard to Scope 3, we are aware that the level of detail in data
on-site meters.
collection is not yet satisfying. Some of the figures are only technical
Scope 3 emissions are all other indirect emissions (not included
calculations on the basis of science-based emission research in
in Scope 2) that occur in our value chain, including both upstream
an attempt to estimate our real emissions. However, we deem the
and downstream emissions. In 2020, we were able to significantly
disclosure of our Scope 3 emissions an important step towards
increase the level of detail of our data collection, and completed
achieving awareness for those emissions and encouraging our
our GHG accounting for Scope 3 for the first time. We mapped
suppliers to also conduct annual climate accounting, even if data
the emissions in our supply chain in a comprehensive analysis
accuracy is an aspect we need to improve on. This will help us, our
and identified the categories most relevant to Grieg Seafood.
industry and all industries connected to our industry to improve
Upstream, we
included (1) Purchased goods and services,
together as we go along.
(3) Fuel- and energy-related activities (not included in Scope 1
or Scope 2), (5) Waste generated in operations, and (6) Business
travel. Downstream, we included (9) Downstream transportation
and distribution, (12) End-of-life treatment of sold products, and
(15) Investments. The categories correspond to the fifteen Scope 3
categories defined by the GHG Protocol. A graphical overview of
this process is depicted in Figure 2.15. Underlying data is collected
from production data, financial cost, suppliers or estimated based
on production data.
S U S TA IN A BL E F O OD
R E DUC ING C A R B ON E MI S S ION S
FIGURE 2.15
SCOPE 3 MAPPING PER COMPANY
Data collected and audited by PwC
Data to be published in 2021
Scoped out
Data not available
Category
Subcategory
ASA
GSFR
GSFF
GSFUK GSFBC GSFNL OQAS* OQNA* OQUK*
1
Purchased goods and services
Fish feed
Capital goods
Well-boat services
EPS boxes
N/A
Fuel-and-energy-related activities
Well-to-Tank (WTT)
Upstream transportation and distribution
N/A
2
3
4
5 Waste generated in operations
Waste
6
Business travel
Air travel
Employee mileage
7
8
9
Employee commuting
Upstream leased assets
N/A
N/A
Downstream transportation and
distribution
Goods transportation
10 Processing of sold products
11 Use of sold products
N/A
N/A
12 End-of-life treatment of sold products
Rest raw materials
13 Downstream leased assets
14 Franchises
15 Investments
N/A
N/A
Nordnorsk Smolt
Tytlandsvik Aqua
* Up until the close of 2020, our fish was sold through Ocean Quality, a dedicated sales organization in which Grieg Seafood had a 60% stake. However, Grieg Seafood has built up its
own sales organization. The new sales organization is partly based on the Ocean Quality sales force, through Grieg Seafood’s acquisition of the companies Ocean Quality North America
(OQ NA), Ocean Quality USA (OQ USA) and Ocean Quality UK (OQ UK) at year-end 2020. OQ NA is now Grieg Seafood Sales North America, OQ USA is Grieg Seafood Sales USA, while in
Shetland the sales organization has been merged with the farming entity Grieg Seafood Shetland.
FIGURE 2.16
DISTRIBUTION OF SCOPE 1 + 2 + 3
FIGURE 2.17
GREENHOUSE GAS EMISSIONS SCOPE 1 + 2
Scope 1
19%
Scope 2
1%
45 000
Scope 1 (tCO2E)
Scope 2 Location based (tCO2e)
3 304
39 364
3 042
39 259
4 404
29 811
Scope 3
79%
0.0
2018
2019
2020
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
S U S TA IN A BL E F O OD
C L IM AT E A ND N AT UR E R I S K
CLIMATE AND NATURE RISK
The effects of climate change, such as extreme weather and
fluctuating temperatures in seawater, and decline in biodiversity,
can have a significant financial impact in the coming decades.
Knowledge of the possible financial consequences of global
warming, biodiversity loss, or even ecosystem collapse, and the
integration of climate risk and nature risk, are an essential part
of our risk management strategy.
S U S TA IN A BL E F O OD
C L IM AT E A ND N AT UR E R I S K
LEARN MORE ON OUR WEBSITE
→
Our TCFD report and climate-related
scenario analysis for 2020
OU R AP P R O A CH
The climate plays an important role in our operations. We recognize
that climate change is likely to present a range of challenges to
the aquaculture industry. Without proactive adaptation, salmon
farming may become more vulnerable to acute physical risks
caused by extreme weather events, such as damage to production
facilities and infrastructure, increased employee accident rates
and increased downtime due to harsh weather, and higher risks of
escapes due to structural impairment.
We also acknowledge that biodiversity, the diversity within species,
between species, and of ecosystems, is declining globally faster
than at any other time in human history. Nature and ecosystems
provide the basic building blocks of the global economy, and
biodiversity loss and ecosystem collapse will also affect our
operations, supply chains, and markets.
OU R P R INCIP LE S
OUR R E SULT S
• We are committed to transitioning to a low-carbon economy
together with the rest of the world.
TCFD
We have mapped our climate-related risks in accordance with the
• Climate-related risks and nature-related risks are part of our
recommendations of the Task Force on Climate-Related Financial
overall risk management strategy.
Disclosures (TCFD) for the second year. The risks include the
• When considering our exposure to climate and nature-related
physical risks of climate change, such as disruption of operations
risks and opportunities, we also consider exposure in our value
due to extreme weather and the impact of the transition to a lower-
chain.
OU R TAR GE T S
Climate risk
Map climate risk and conduct climate-
related risks scenario analyses to assess
financial impact
Nature risk
Explore framework to map nature-related
risks
carbon economy. Transition risk covers market risk, regulatory
risk, technology risk and reputational risk.
SCENARIO ANALYSIS
We have performed a climate-related scenario analysis. The
analysis stress-tests our strategical and financial plans from the
potential impact of climate change on our core business in the
future. We have performed a thorough assessment of 2C and 4C
global warming impact on our salmon production. We aim to meet
the Paris Agreement criteria to reduce global warming below 2C
pre-industrial levels, but assess the risks involved in a scenario
where we fail to meet our ambitions.
TNFD
We are an observer to a working group to the Taskforce on Nature-
related Financial Risk and Disclosure (TNFD). TNFD will build on
the lessons learned from the TCFD. TNFD will build awareness
and capacity to reduce the negative impacts of the financial sector
on biodiversity. It will increase understanding of the dependencies
that different business sectors of the economy have, on nature’s
ecosystem services.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
S U S TA IN A BL E F O OD
WASTE
MANAGEMENT
Grieg Seafood aims to produce
salmon in a way that reduces our
consumption of resources and
materials. A circular economy
is essential to ensure sustainable
food production in the future.
OUR AP P R O A CH
We do not pollute the environment where we farm salmon. Waste
should be properly disposed, recycled where possible and fed back
into the circular economy.
We use freshwater at our land-based facilities for smolt and post-
smolt production. We also use freshwater at our harvesting plants
for hygiene purposes. None of our facilities are located in areas of
water scarcity and material fresh water risks. Still, we recognize
the importance of minimizing the use of fresh water.
Plastic waste in the ocean is harmful to the environment. Plastic
slowly breaks down into smaller fragments, eventually turning
into microplastics, which may impact ecosystems and wildlife
negatively. Plastic materials used by Grieg Seafood should not end
up in the ocean. It should be disposed properly and recycled where
possible.
WA S T E M A N A GE ME N T
S U S TA IN A BL E F O OD
WA S T E M A N A GE ME N T
OU R P R INCIP LE S
FRESH WATER USE
• We aim for a high water usage efficiency by utilizing technology
BIOLOGICAL WASTE
• Fish trimmings and dead fish from farms are collected and
to recirculate water in land-based fresh water facilities. All
processed into fish silage. Depending on quality, it may be used
fresh water facilities have RAS technology, recycling at least
for animal feed, biofuel, or fertilizer.
90 – 97% of fresh water used. Fresh water sourcing to the RAS
• Organic waste from our freshwater facilities is recycled and
facilities are based on permits from local Authorities in line
used for biofuel or fertilizer production.
with local regulations.
• We treat waste water from processing plants and fresh water
facilities in accordance with local regulations. Our smolt facility
FARMING EQUIPMENT
• Old farming equipment is safely removed and handled through
in Newfoundland has zero discharge of water.
recycling and waste management.
• Assessing possible fresh water risks connected to our feed
• Traceable ropes that are signed by Grieg Seafood will be
ingredients is included in the Grieg Seafood feed project. Read
established in our regions.
more here.
PLASTICS
• No plastics in the ocean. All plastic consumed is managed
through proper waste collection and recycling.
•
Implement the 3 Rs throughout our production: reduce, re-use,
recycle.
• Eliminate the use of plastics we do not need.
• Strive to use plastics that are reusable, recyclable, or
compostable.
• Collaborate with the industry to develop improved plastic
products and infrastructure for recycling.
• Ensure sustainable use, waste collection and recycling of
transport packaging materials.
•
Increase the amount of recycled plastic in the products we
purchase from third parties, and reduce our demand for virgin
plastic.
• Phase out environmental toxins (SVHC) used in plastic products.
• Use plastic products of high quality; focusing on longevity,
reduced microplastic formation and wear resistance.
OCEAN WASTE
• All regions engage in annual beach clean-ups around our
farms to remove ocean waste that have drifted onto the shores.
LEARN MORE ON OUR WEBSITE
→
Our policy for ocean plastics
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
S U S TA IN A BL E F O OD
WA S T E M A N A GE ME N T
P R O JEC T S T O IMP R O V E
PLASTIC PILOT PROJECT WITH BELLONA
As part of Grieg Seafood’s partnership with the NGO Bellona,
Finnmark has piloted a project on plastics. The results of this
initiative include:
901352). With this we aim to set key performance indicators for
plastic management that will be published in the future.
As shown in the pie chart below, we now have a clearer
understanding of how the plastic material distribution is at a
• Mapping sources of plastics in our operations. At our sites,
typical production site. We will use this information to improve our
cages, moorings and ropes, nets, feeding tubes, sea lice skirts,
plastic management. Note that feeding tubes are not included in
and shelter for cleaner fish are the main sources of plastics.
this distribution.
A typical site with ten cages made up of 90 x 90 meter pens
contains approximately 360 000 kg of plastic. It is estimated
that 0.5% of this, 1 800 kg, simply disappears.
RESEARCH COLLABORATION
Grieg Seafood is a partner in the POCOplast project initiated in
• Developing plastics accounting, an overview of all plastics
2019. POCOplast is short for: “Pathways to sustainable use of
bought. The aim is to recycle all plastics and avoid loss.
post-consumer plastics in aquaculture”. The aim of the project is
• Using separate containers to recycle plastics at sites, and
to increase the value of recycled plastics, by utilizing used plastic
creating a culture for reducing the use of plastics and recycling
from the aquaculture industry in new products, thereby reducing
what is used.
the demand for new plastic. This will also increase knowledge of
• Working with suppliers to develop products that last longer and
recyclability in the supply chain and reduce the loss of the material
are easier to recycle, such as sea lice skirts and artificial kelp
value that many high-value plastics exhibit today.
forests for cleaner fish.
• Work with suppliers to develop return schemes. For instance,
nets made of nylon can be reused in various textiles and
GLOBAL ENGAGEMENT
As a contributor to the Grieg Foundation, we have also partnered
carpets, or turned into other nylon products.
with the World Wildlife Fund to reduce ocean plastics in Asia. The
project has clear ambitions: 50% reduction of plastic pollution in
We will extend the pilot, and we are now looking into how to improve
three Philippine port cities by 2023.
Rogaland’s initiatives on ocean plastic and waste management in
2021. Our current focus is on staff training and establishing waste
supply chains that ensures material recycling.
INCREASING RECYCLING
We have established several agreements for closed-loop recycling
of particular aquaculture products, like feed tubes, pens and
worn hardened plastic (HDPE). The results show a high degree of
recycled material quality and promising outcomes. We will also
look into ways of including more recycled plastic in the aquaculture
products that we consume.
MOOC ON PLASTIC WASTE
We have received funding from Norwegian Retailers’ Environment
Fund to establish a massive open online course (MOOC) on plastic
waste management in aquaculture. Together with Bellona and
NTNU (Norwegian University of Science and Technology), we aim
to provide the industry with e-learning and instructional videos on
the importance of proper plastic handling.
MATERIAL ACCOUNTING
We have engaged Asplan Viak to help us establish materials
accounting processes. By estimating our consumption of plastic
materials and comparing it to our waste management reports,
we get an indication of how we are progressing with our materials
handling. The estimation for Finnmark’s plastic consumption was
carried out in line with an established methodology (FHF project
FIGURE 2.18
PL ASTIC WEIGHT DISTRIBUTION OF A
PRODUCTION SITE IN GRIEG SE AFOOD
FINNMARK
Moorings
29%
Sea lice skirts
1%
Pens
4%
Pen rings
(top and bottom)
66%
S U S TA IN A BL E F O OD
WA S T E M A N A GE ME N T
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
PA R T 2
TOWARDS A
SUSTAINABLE
FOOD SYSTEM
PEOPLE
Every single day, whether it is sunny, stormy or
freezing cold, our fantastic employees are out
there working hard in the hatcheries, on the
farms or at the harvesting plants. Their passion
and dedication drive Grieg Seafood forward.
PA R T 2
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P E OP L E
MEET SOME OF OUR
EMPLOYEES
KRISTIAN SPISSØY KLOSTER
APPRENTICE
SIGRUN NESS JOHANNESSEN
VETERINARIAN
"We work with living animals.
Fish welfare and animal health
take precedence all the way."
→ FULL STORY
“I do care for each fish. Even
though there are hundreds of
thousands of them in each pen.
You simply have to love animals
to become a veterinarian."
→ FULL STORY
P E OP L E
ROY EVAN STRØMSK AG
MANAGER OPERATIONAL CENTER
RADU BRATICEVICI
MANAGER HYGIENE TEAM
“During the pilot period, we have
become better feeding experts.
As a result, we see that the fish is
growing better, without increasing
the feed factor.”
“We are proud to be one of
the cleanest harvesting plants in
the country. With a good
working environment, you get
good results!”
→ FULL STORY
→ FULL STORY
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
HUM A N R IGH T S & E T HIC S
P E OP L E
HUMAN RIGHTS
& ETHICS
Respecting the rights and dignity
of all human beings is the very
basis of a civilized society. Human
rights relevant to our operations
range from labour rights and a
ban on child labour in our supply
chain to privacy rights.
OUR AP P R O A CH
Respecting human rights is a fundamental part of Grieg Seafood
Group’s corporate responsibility and is vital to the sustainable
operation of our business.
We are committed to respecting fundamental human rights in our
operations, our value chain, and in the communities where we
operate. We use our influence to promote the fulfilment of human
rights and always seek to avoid involvement, even indirectly, in
their abuse.
We recognize that we can contribute to the fulfilment of human
rights. We have a responsibility to prevent, mitigate, and address
adverse human rights impacts in our own operations but we also
use our leverage to promote respect for human rights in our value
chain.
Our commitment is based on our company values, our Employee
Code of Conduct, and our Supplier Code of Conduct.
T R A NSP OR TAT ION
AND R ISK S
Some areas in our supply chain entail a
particularly high risk of breaching human
rights. One such area is labour rights in
the transportation industry. Most of our
salmon is transported by truck to European
or North American markets. There are
some particular risks connected to this
part of our supply chain, which we are
aware of and are working to mitigate. Read
more about the “Safe trucking” project and
other initiatives here.
P E OP L E
HUM A N R IGH T S & E T HIC S
OU R P R INCIP LE S
Our approach to human rights is based on the UN Guiding
Principles on Business and Human Rights. We have a responsibility
IN OUR OWN OPERATIONS
• Grieg Seafood welcomes and promotes unionization, collective
to protect, respect, support, and promote human rights in all our
bargaining, and other formal employee representation arenas
operating regions and throughout our value chain.
appropriate to the business culture of each of our operating
We have committed to respecting all the nine UN internationally
join a labour union. All employees have access to third-party
recognized conventions of human rights.
representation regardless whether they are a union member
countries. All our employees have the right to join or not
or not.
The Human Rights that are most relevant to our operations and
• We conduct our activities without discrimination, we treat our
supply chains are:
employees fairly and compensate fairly by offering competitive
• The Universal Declaration of Human Rights.
salary and benefit packages. We use the Kornferry methodology
• The ILO Declaration on Fundamental Principles and Rights at
to benchmark our salaries yearly and ensure that we are paying
Work.
market rates as a minimum. We pay the same rates for same
• The United Nations Convention on the Rights of the Child
type of work regardless of gender, culture or other origin.
(UNCRC).
• We offer sick-pay to all our employees based on the national
• The United Nations Convention on the Elimination of
laws of the countries we operate in regardless of if they are
Discrimination against Women (CEDAW).
permanent or temporary staff. We demand that our external
• The United Nations Declaration on the Rights of Indigenous
hired staff and contractors have sick pay included in their
Peoples (UNDRIP).
contracts.
•
International Covenant on Economic, Social and Cultural
• All our employees are offered good and reasonable working
Rights.
hours, in accordance with union agreements, to maintain a
• The Organization for Economic Cooperation and Development
good work-life balance.
Guidelines for Multinational Enterprises. (OECD Guidelines).
• Everyone who is employed by us works here of their own free
• The United Nations Global Compact.
will in alignment with the ILO Declaration.
IN OUR SUPPLY CHAIN
• We have our own Supplier Code of Conduct, which our suppliers
• We have zero tolerance for bullying, unwanted sexual attention,
or harassment.
• We promote diversity with respect to employee gender, age,
are obligated to follow. Suppliers must abide by the same rules
ethnicity, physical abilities, personality, skills, experiences and
as those we have laid down for our own employees.
backgrounds.
• Grieg Seafood is currently implementing the UN Guiding
• We respect employees’ rights to privacy. The General Data
Principles of Business and Human Rights. During 2021, we will
Protection Regulation (GDPR) became Norwegian law in 2018.
conduct a due diligence process for our supply chain, identify
The GDPR provides assurance that personal information a
the risks to prioritize, assess grievance mechanisms and
company has a legitimate need to collect and use will not be
remediation.
used for other purposes. Basically, it concerns the weighing of
• Grieg Seafood is a member of the Coalition for Responsible
interests. With the GDPR, the individuals’ rights are highlighted,
Business. The Coalition calls for a Norwegian human rights law
clarified and prioritized.
for business, based on the United Nations Guiding Principles
• We contribute to economic, social and cultural development
on Business and Human Rights. The Coalition is comprised
in the rural communities where we operate. Recognizing that
of Norwegian civil society, trade unions and businesses, and
our operations are based on natural capital, belonging to local
Grieg Seafood is a signatory.
communities as a whole, we strive to minimize our impact and
create shared opportunities.
• We recognize the rights of indigenous peoples in our relevant
production regions, as laid down in the United Nations
Declaration on the Rights of Indigenous Peoples (UNDRIP), and
we take particular care to avoid infringing such rights.
LEARN MORE ON OUR WEBSITE
→
→
Our policy and grievance mechanisms for human rights
Human rights
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P E OP L E
OU R TAR GE T S
Whistleblowing
Professional handling of harassment and
whistleblowing cases
Code of Conduct
100% of employees completed the Code of
Conduct program
Compensation
Annual evaluation of salaries and benefits
to ensure fairness
HUM A N R IGH T S & E T HIC S
OU R R E SULT S
FIGURE 2.19
UNIONIZED EMPLOYEES (%) AT YE AR END 2020
Region
Rogaland
Finnmark
British Columbia
Newfoundland
ASA
Sales & Market
Share
25%
39%
0%
0%
0%
0%
We accept and welcome labour union memberships among employees. Grieg Seafood has established a good, collaborative relationship with our union
representatives. This collaboration extends beyond periodic salary negotiation to a variety of internal improvement projects.
The numbers reflect memberships of the United Federation of Trade Unions (Fellesforbundet) and The Norwegian Food and Allied Workers Union (NNN), the
largest labour unions in our industry. We do not have access to data on all types of memberships, such as association for professionals and graduates.
P E OP L E
HUM A N R IGH T S & E T HIC S
FIGURE 2.20
CODE OF CONDUCT PROGRAM
FIGURE 2.21
HARASSMENT INCIDENTS
FIGURE 2.22
WHISTLEBLOWER CASES
8 8%
1
2
88% of our employees (excluding Shetland,
Newfoundland and all Sales & Market
subsidiaries overseas) have completed our
Code of Conduct program. The employees
in Newfoundland and the Sales & Market
employees will complete our Code of Conduct
in 2021, when the new version is launched.
For the Group (excluding Shetland and
Newfoundland), one harassment incident was
reported in 2020. See Figure 2.22 for more
information.
For the Group (excluding Shetland and
Newfoundland), two cases were reported
through our whistle blower channel in 2020.
One of these cases was a harassment incident
(see Figure 2.21). Both cases were investigated
and handled by our external partner EY and
closed after implementing new procedures and
measures to avoid similar cases in the future.
In addition, management was given training
in how to deal with and resolve these types of
cases in the future.
FIGURE 2.23
HUMAN RIGHTS TRAINING
FIGURE 2.24
NON-DISCRIMINATION TRAINING
IN FINNMARK
1 8%
83%
In 2020, 116 employees, 18% of our employees
(excluding Shetland, Newfoundland and all
Sales & Market subsidiaries), were given
human rights training. One completed Code
of Conduct test corresponds to one hour
of training. See also Figure 2.20 for more
information on our Code of Conduct program.
Grieg Seafood Finnmark held a non-
discrimination training course in 2020,
which 83% of the 257 employees have taken
(40% of all our employees in 2020).
OUR EMP L O YEE S'
R IGH T T O
P R I VA C Y
• Declarations of Consent
• Right to access personal
information
• Right to erase personal
information
• Right to breach notification
• Right to be informed
• Right to correct erroneous
information
• Right to limited processing of
information
• Right to oppose processing
of information
• Right to transmit information
to new employer
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P E OP L E
EMBRACING
DIVERSITY
Diversity is not only the right thing
to do ethically. It leads to greater
employee retention and improves
productivity. Bringing together
employees with different experiences,
backgrounds, and educations spurs
creativity and can lead to new and
innovative ideas.
OUR AP P R O A CH
Grieg Seafood is committed to being an equal opportunity employer.
Having a diverse workforce is crucial for our organization and is
part of our company culture. This means all our business units
select and appoint the most suitable person for a position on the
basis of their skills, qualifications, and aptitudes.
Grieg Seafood is committed to supporting gender equity in the
workplace. We aim to ensure that all our staff have the same
opportunities, rights, and respect, regardless of their gender. To
ensure fairness, strategies must often be available to compensate
for historical and social disadvantages that prevent women and
men from operating on a level playing field. Gender equity leads to
gender equality, where there are equal rights, responsibilities, and
opportunities for women and men.
E MBR A C ING DI V E R S I T Y
P E OP L E
E MBR A C ING DI V E R S I T Y
OU R P R INCIP LE S
DIVERSITY
We always:
GENDER EQUITY
We:
• Employ the most suitable person regardless of age.
• Ensure our workplace provides equitable opportunities for
• Employ the most suitable person regardless of race or ethnicity.
our male and female employees, and foster an organizational
• Employ the most suitable person regardless of gender.
culture which supports gender equity.
• Employ the most suitable person regardless of political,
• Promote a family-friendly workplace for men and women
religious, or sexual persuasion.
through the following activities:
• Employ the most suitable person regardless of national origin.
— Parental leave options for both men and women.
• Employ people with disabilities provided they can safely
— Flexible working arrangements for staff.
perform the task in a competent manner and any changes
— Working from home options for staff.
to accommodation requirements are reasonable and do not
• Create an equitable, respectful, and enabling environment for
create an undue hardship on the operation of our business.
men and women within the organization through the following
activities:
— Ensuring that there is gender representation in all cross-
functional teams, interview and assessment panels.
— Ensuring that gender equity exists with regards to
remuneration of employees.
— Seeking opportunities to encourage gender diversity in
traditionally gender-typical positions historically filled by
gender stereotypes.
• Demonstrate gender equity social responsibility through the
following community related activities:
— Requiring our suppliers to support our principles through
our Supplier Code of Conduct.
— Ensuring senior representation on external networks that
address gender equity issues.
• Support external organizations that demonstrate gender equity.
OUR TAR GE T S
Gender equality
40% female representation in management
positions by 2026
40% female representation at level 2, 3 and
4 by 2026
Education diversity*
Employ the best candidates regardless of
origin and culture
Cultural diversity*
Employ more candidates from other
countries
*To ensure our recruitment process is open and fair with regard to candidates with
different backgrounds, from other industries, and regardless of origin and culture.
LEARN MORE ON OUR WEBSITE
→
→
→
Our policy for diversity
Our policy for gender equity
Embracing diversity
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E MBR A C ING DI V E R S I T Y
P E OP L E
OU R R E SULT S
FIGURE 2.25
THE SHE INDEX
1 2 T H
2018
8 T H
2019
8 T H
2020
24 T H
2021
We report on the SHE Index in order to be transparent about the gender balance in our organization. The SHE Index scores companies based
on the gender balance in management teams at different levels, as well as the companies’ policies to improve female representation in
management. Our goal is to improve gender balance and diversity to become a preferred employer.
The methodology used in the index has changed several times. In the first half of 2019, we gained 8th place, while in the second half of
2019, we came in 29th place due to such changes. In 2020, however, the SHE Index adjusted its weighting to focus more on the policies and
practices that will create a long-term change. Change takes time, and we should pay more attention to the work being done to create greater
diversity and inclusion. During 2020, Grieg Seafood has taken several steps to improve our gender balance, including promoting women to
top management positions. However, due to a structural change and internal promotion in our organization and management team on level
2, we were ranked 24th in the SHE Index published in March 2021.
FIGURE 2.26
GENDER BAL ANCE AT YE AR-END 2020
Rogaland
19%
81%
Finnmark
21%
79%
British Columbia
23%
77%
Newfoundland
ASA
Sales & Market
0%
41%
59%
39%
61%
36%
64%
Female
Male
100%
At year end 2020, the Grieg Seafood Group had 735 employees, including full-time and temporary workers (excluding contractors). Women
make up 24% of the workforce, while 76% are men. The ratio between male and female employees is similar across Rogaland, Finnmark,
and BC. In Newfoundland, the share is higher due to focus on gender balance when the organization was set up. The management and
support functions at Grieg Seafood ASA, Newfoundland and the Sales & Market teams have the highest proportion of female employees.
Employee data is registered in a dedicated HR database. Only HR personnel are allowed access to register employee data, which is reviewed
regularly to ensure its continued quality.
P E OP L E
E MBR A C ING DI V E R S I T Y
THREE IMPORTANT TASKS FOR
MAKING CHANGES TOWARDS
AN EQUAL WORKFORCE
Bold leadership
Top management have defined policies,
strategies, goals and practices.
Measuring equality targets openly
A diverse leadership team that sets,
shares and measures equality targets
openly.
An empowering environment
One that trusts employees, respects
individuals and offers equal
opportunities.
0 1
0 2
0 3
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
C R E AT ING AT T R A C T I V E JOB S
P E OP L E
CREATING
ATTRACTIVE
JOBS
To reach our goals and resolve
the challenges we face, we need
the best people. A good working
environment is key to attracting
and retaining the best talent.
OUR AP P R O A CH
Our goal is to attract the best skills, and to be the preferred
employer, regardless of industry. We have a fair and transparent
recruitment process. We believe that a good working environment
creates attractive jobs. We also believe in life-long learning, and
aim to help our employees develop and reach their individual
potential.
OU R P R INCIP LE S
COMPENSATION
• We offer fair compensation. Our pay and benefits policies are
DIALOGUE AND CULTURE
• We live by our values: Open, Ambitious, and Caring.
based on a bi-annual survey to ensure that we always pay
• We hold quarterly feedback meetings to discuss important
market rates or above for all jobs (there are some differences
initiatives with our labour union representatives in order to
in the payment and benefit arrangements for temporary
encourage good and constructive dialogue.
employees due to the number of hours worked).
• We focus on internal communication. Through our shared
• We comply with the laws and regulations related to employment
communications platform, Workplace by Facebook, all our
protection, compensation, and working hours in the countries
employees are given a voice and an opportunity to participate
where we operate.
actively in discussions, and to share knowledge and information
• All our employees have written employment contracts.
across borders.
• All permanent employees are part of our annual bonus
program.
• We share our profits with our employees through our employee
share purchase program.
EMPLOYEE DEVELOPMENT
• We offer employees training and further education to support
the development of necessary skills.
• We offer aquaculture apprenticeships.
• Through the use of new technology and digitalization, e.g. our
Precision Farming scheme, we aim to offer untraditional and
exciting positions. Sensor technology, big data, and analytics
OUR TAR GE T
demand further development and training of our employees,
Job satisfaction
and will also attract people with new skills to the industry.
Above average in Great Place to Work
survey
P E OP L E
C R E AT ING AT T R A C T I V E JOB S
OUR R E SU LT S
FIGURE 2.27
GRE AT PL ACE TO WORK 2020
FIGURE 2.28
APPRENTICESHIP ACHIEVEMENTS IN
NORWAY IN 2020
FIGURE 2.29
APPRENTICESHIP PARTICIPATION IN
NORWAY AT YE AR-END 2020
84 %
8
29
In Rogaland and Finnmark, a total of eight employees
received their certificate of apprenticeship in 2020.
In cooperation with the North Island College, Grieg
Seafood British Columbia has prepared the “Seawater
Technician Advancement Program” (TAP). The program
provides mandatory additional training for technicians,
as well as further training for higher positions within
aquaculture. The program has so far been a success.
In Rogaland and Finnmark, a total of twenty-eight
employees were participating in an apprenticeship at
year-end 2020.
Great Place to Work assesses and evaluates
organizations and the practices that underpin
workplace culture, based on the experience of
employees. In 2020, we took part in the Great Place to
Work survey for the third time in Norway, and for the
second time globally. We are proud to announce that all
our regions received Great Place to Work certification
in 2020. The Group (including Shetland) achieved a
total score of 84%, which was very satisfactory and an
improvement from 79%. The high score shows that
Grieg Seafood is among the best companies to work
for. 85% of our employees also confirmed that they
feel a sense of pride when they look at what we have
accomplish at Grieg Seafood, which is better than
the best companies in the survey. The certification is
an enormous credit to the employees and their hard
work and loyalty, in particular during a time of global
pandemic.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
C R E AT ING AT T R A C T I V E JOB S
P E OP L E
FIGURE 2.30
THE WORKFORCE AT YE AR-END 2020
Rogaland
Finnmark
British Columbia
Newfoundland
ASA
Sales & Market
0%
Permanent
Temporary
Contractor
80%
16% 4%
88%
12%
98% 2% 1%
59%
17%
24%
81%
8%
11%
91%
6% 3%
100%
Overall, 85% (653 of 770) of our workers are permanent employees.We have some temporary employees, particularly seasonal workers
in our processing facilities and apprentices at the farms. Most of our apprentices are offered a permanent position with us after their
apprenticeship is over. Contractors are mainly used in Norway during peak periods of harvesting.
Employee data is registered in a dedicated HR database. Only HR personnel are allowed access to register employee data, which is reviewed
regularly to ensure its continued quality.
FIGURE 2.31
THE WORKFORCE BY REGION AND GENDER IN 2020
Region
Rogaland
Finnmark
British Columbia
Newfoundland
ASA
Sales & Market
Total
Gender
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Permanent
Temporary
Contractor
Total
Full-time
Part-time
Full-time
Part-time
Full-time
Part-time
21
101
41
180
37
134
22
32
12
18
11
20
6
9
5
1
0
0
0
3
0
0
0
0
4
22
5
19
0
0
8
7
0
2
1
1
1
1
2
4
3
0
0
1
1
0
0
0
629
24
69
13
1
3
0
0
1
0
7
16
0
3
1
0
32
0
2
0
0
0
0
0
0
0
1
0
0
3
33
138
53
204
41
134
37
59
13
24
13
21
770
P E OP L E
C R E AT ING AT T R A C T I V E JOB S
FIGURE 2.32
TURNOVER RATE PER REGION IN 2020
25%
20.5%
10.1%
10.7%
4.4%
0.0%
Rogaland
Finnmark
British Columbia
ASA
Sales & Market
Group
These figures are calculated based on the total number of permanent employees (excluding Shetland and Newfoundland) since it is only these employees
who are meant to stay with the company permanently. Temporary employees and contractors have been excluded from these figures. As per GRI definition,
employee turnover includes all employees who leave the organization voluntarily or due to dismissal, retirement, or death in service.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P E OP L E
K E E P ING OUR E MP L O Y E E S S A F E
OUR AP P R O A CH
We work systematically to safeguard our employees’ health, safety,
and working environment. Our aim is to prevent and manage
work-related injuries, illness, accidents, and fatalities. We have a
zero-tolerance philosophy with respect to accidents.
KEEPING OUR
EMPLOYEES SAFE
Accidents can be prevented through
the development of adequate
operating procedures, a safety-focused
corporate culture, and by improving
equipment quality. We never
compromise on health and safety.
SAFETY MANAGEMENT PRINCIPLES
• All locations shall establish annual
safety targets with action plans (what,
who, when).
• All locations shall have high standards
of housekeeping.
• All managers shall carry out safety
walk-arounds (Walk - Observe -
Communicate).
• All employees shall participate in safety
meetings on a regular basis.
• The use of personal protective
equipment and life jackets shall be
mandatory for employees, contractors,
and visitors.
• A safety assessment shall be carried out
for all jobs, equipment, and potentially
hazardous materials.
• Annual audits of HSE-related activities
shall be conducted.
• All regions shall have safety procedures,
to help facilitate a safety focus
throughout the organization.
• A program for systematic and regular
safety training shall be in place.
• All accidents and near-misses
shall be reported and investigated,
including a root-cause analysis, and
corrective actions implemented within a
reasonable period of time.
P E OP L E
K E E P ING OUR E MP L O Y E E S S A F E
OU R P R INCIP LE S
SYSTEMS, PROGRAMS AND RISK ASSESSMENT
• All aspects of work are covered by our health and safety
HAZARD MANAGEMENT
• Our occupational health services provider helps to map and
systems. We use occupational health and safety systems and
assess the risk of the work environment, including physical,
standards in line with local regulations in each country.
organizational and psychosocial factors and include areas such
• Job risks in each department are formally evaluated and
as:
categorized using a risk matrix. Job hazard assessments are
— help working out guidelines for work processes.
also carried out for non-routine jobs.
— suggestions for preventative safety measures.
CREATING AN HSE CULTURE
• All employees receive health and safety training when they join
— training and
information about occupational health,
industrial hygiene, ergonomics, external environment,
chemicals, and general health and safety.
the Company, and are required to re-take the courses regularly.
— work environment evaluation and adaptation.
— As a general guide, employees are provided with appropriate
— measurement of physical, chemical and biological factors.
training on
joining Grieg Seafood,
joining specific
— help with following up workplace absenteeism.
departments or transfer between posts. This is particularly
— help with conflict resolution and harassment.
important when increased risks are identified due to
•
In BC, a revised standard on reporting and investigating hazards,
changes in tasks or responsibilities, changes in equipment
close calls and incidents was developed in 2020. Through this
or technology, or changes in the system of work.
standard, improvements to the incident investigation process
— Formal orientation training are given to all new site
and tracking of follow up corrective actions are expected.
employees to Grieg Seafood based on the position and are of
•
In 2020, we conducted a review to identify key metrics to
responsibility and will include instruction on general health
track as leading indicators in 2021. Leading indicators being
and safety provisions and any area specific hazards.
tracked will focus on the quality of SOPs, completion of risk
— Office staff are given an orientation on workplace safety
assessments, participation in safety meetings, and results of
during their onboarding process.
workplace inspections.
• Employees have the possibility to actively participate in and
contribute to the development of their workplace safety through
their shop steward representing them.
INCIDENT REVIEW
• All incidents are recorded in our health and safety system, and
• We have dedicated HSE managers in each region, who are
reviewed. After corrective action is taken, the result of the action
certified according to local laws. We perform annual HSE
is disseminated to the rest of the region for implementation.
exercises to ensure that everyone knows what to do in case of
an emergency.
• All our staff have the right to stop any type of work or task
PROMOTING EMPLOYEE HEALTH
• External health services provide health checks and advice to
if they feel unsafe or that they are not competent enough to
employees. In some regions they are represented on our Health
carry out their duties. These routines are established in all our
and Safety committees.
regions and all new employees are given the information about
• We provide a health-plan for employees, ranging from dental
how these systems work and they can also report anonymously
and medical to counselling depending on the region.
through their union representative, employee representative or
• We offer a variety of health programs to the employees
our whistleblowing channel for major issues which is handled
(competitions, gym membership).
by an external partner EY.
• We have a "no reprisal" policy when it comes to reporting
health and safety issues. This is described in our Employee
IN OUR SUPPLY CHAIN
• Our Supplier Code of Conduct requires suppliers to provide a
Code of Conduct.
safe and healthy environment for their workers and contractors,
and minimize workers´ exposure to potential safety hazards.
Furthermore, we expect our suppliers to adhere to all
applicable laws and regulations.
OU R TAR GE T S
Absence rate
Absence rate below 4.5%
LEARN MORE ON OUR WEBSITE
→
Health and safety
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K E E P ING OUR E MP L O Y E E S S A F E
P E OP L E
OU R R E SULT S
In Norway we commit to Workers' Health, Safety, and Welfare by the use of the GLOBALG.A.P.
GRASP module which is designed to assess social practices on the farms. GRASP provides
the minimum compliance criteria for a good social management system and we are audited
on regular basis from external parties. The QMS requirement addresses specific aspects of
our workers' health, safety and welfare.
Grieg Seafood BC has obtained an occupational health and safety management
system certification named OSSE (Occupational Standard of Safety Excellence). The
OSSE Certifications is granted to BC companies who have successfully developed and
implemented a comprehensive health & safety management system and is coordinated by
WorkSafeBC.
FIGURE 2.34
FATALITIES IN 2020
0
Grieg Seafood Newfoundland is implementing a new EHS (Environment, Health & Safety)
system throughout its operations based on standard industry best practices and legislative
requirements.
We had zero fatalities in 2020.
FIGURE 2.33
ABSENCE RATE IN 2020
Short term
Long term
Target
8.0%
3.1%
2.5%
4.4%
2.4%
1.6%
1.5%
3.0%
2.1%
0.0%
Rogaland
Finnmark
British Columbia
0.4%
ASA
0.0%
Sales & Market
Group
In Sales & Market and Rogaland, the absence rate has decreased compared to the year before, while in British Columbia, ASA and Finnmark, the absence
rate increased. The absence rate in British Columbia and Finnmark is above our target of 4.5%, mainly due to long-term sickness and employees taking time
off while waiting to be tested for Covid-19. When the pandemic started, we introduced new policies to enable our employees to stay at home without having
a sick note from a doctor if they suspected Covid-19 infection. The Company also made a risk analysis on how to control and manage the risk of employees
bringing covid-19 to our sites and decided to increase the amount of paid sick leave days during 2020. We offered our employees up to 2.5 times the paid
sick leave days they usually are guaranteed by contract, which they could use to stay at home until they were tested for Covid-19 or other types of illness. We
always monitor developments according to our guidelines for absence from work.
P E OP L E
K E E P ING OUR E MP L O Y E E S S A F E
FIGURE 2.35
SAFET Y INDICATORS IN 2020
Region
Rogaland
Finnmark
British Columbia
ASA
Sales & Market **
* Excluding overtime
** Estimate based on number of employees and general annual working hours.
Hours worked *
Total work-related
injuries
High-consequence
work-related injuries
234 837
378 322
330 650
56 861
38 100
26
24
29
0
0
4
3
1
0
0
Health and safety incidents are registered in our systems and reviewed as part of our monthly HSE meetings. In BC, quality control of incident data is
achieved through support from a third party (WorkSafeBC). Injuries are caused mainly by being struck by objects, handling equipment, crushing, cuts, slips,
and falls. Risk assessments show that high-consequence injuries derive from being struck by an object, crushing and cuts. High-consequence injuries
incurred in 2020 related to being struck by an object, falls and crushing. The injuries were assessed and reported to other sites to prevent similar accidents
from happening.
In BC, the majority of LTI incidents happened in Q1 and Q2. Countermeasures were taken and risk assessments conducted which helped us to achieve zero
LTI incidents from July to December 2020. The WorkSafeBC framework which we use to compare ourselves with the industry average has been one of the
tools used to decrease the number of LTI incidents.
Our improvement initiatives are based on preventive measures and risk assessments on all accidents and near misses that are reported in our deviation
system. Examples of measurements: service on machinery, ordering of new equipment’s, training of employees, change in procedures and instructions.
FIGURE 2.36
H1-FACTOR/LTIR
Region
Rogaland
Finnmark
British Columbia
ASA
Sales & Market
Group
H1-factor/LTIR *
Absence rate
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
9
13
72
0
n/a
n/a
11
24
16
0
n/a
n/a
24
18
38
0
0
15
22
35
0
0
9
28
36
0
0
3.4%
6.1%
1.6%
0.3%
n/a
3.2%
4.4%
0.9%
1.0%
4.7%
5.4%
1.8%
0.1%
3.5%
4.9%
2.0%
0.3%
n/a
0.6% **
0.5% **
n/a
n/a
24
3.7% **
3.2% **
3.3% **
3.2% **
3.1%
5.6%
6.8%
1.1%
0.0%
4.9%
* H1-factor/LTIR: number of lost-time injuries divided by the total number of hours worked, multiplied by 1 000 000. Permanent and temporary employees are included in our incident
data. Information on contractors is not currently available.
** including Shetland
In Grieg Seafood BC we have for a couple of years been working on our openness and reporting to create a more mature safety performance culture. We
implemented the BrainSafe program as a pilot project in BC. The intention is to roll this out to all our regions based on its success. Our ultimate goal is that
people feel safe, that we have an open reporting culture and that HSE always are on top of our agenda. In our quarterly Business Reviews with our regions we
always start the meetings with going through the HSE statistics. We conduct audits, execution of inspections and execution of safety action plans as well as
safety observations execution (and, if possible, quality of observations and closure of actions). We also participate in safety training and safety meetings.
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A N T I-C OR RUP T ION
P E OP L E
ANTI-
CORRUPTION
OUR AP P R O A CH
We have zero tolerance for all forms of fraud, corruption, facilitation
payments, kickbacks, bribery, or other misconduct.
Business integrity is essential if we
are to become a preferred provider
of sustainably produced salmon.
OUR TAR GE T
Corruption
No incidents of non-compliance with our
anti-corruption principles
OU R P R INCIP LE S
OUR R E SULT S
• Our Code of Conduct sets out a zero-tolerance policy with
respect to corruption, bribery, and money-laundering.
INVESTIGATIONS
In February 2019, the European Commission launched an
• We continuously assess our own operations and those of our
investigation to explore potential anti-competitive behavior in
suppliers with regard to corruption risk, as part of our risk
the Norwegian salmon industry. Grieg Seafood is one of the
management framework.
companies under investigation. Based on the EU investigation,
• Members of group and local management are encouraged
US competition authorities launched their own investigation into
not to own shares or accept board positions in companies
the matter in November 2019. By the end of 2019, four class-
that Grieg Seafood has commercial relations or competes
action lawsuits had been filed by small-scale customers in the
with. All relations that may involve a conflict of interest must
USA and two in Canada. Grieg Seafood is not aware of any anti-
be reported, to ensure that business decisions are made by
competitive behavior within the Group in Norway, the EU, the USA,
impartial staff members.
or in Canada. We are collaborating fully with European and US
• Our zero-tolerance policy is stated clearly in our Supplier
authorities in this matter and will follow up the lawsuits in the USA
Code of Conduct. We expect our suppliers to adhere to the
and Canada accordingly. Currently, there is no new information
same principles and to never enter into agreements or
regarding these investigations.
understandings with competitors, or engage in other conduct,
that undermines competition.
CORRUPTION
We did not experience any incidents of corruption in 2020. We had
no corruption incidents that resulted in the termination or non-
renewal of contracts with a business partner.
FIGURE 2.37
NON-COMPLIANCE WITH L AWS AND REGUL ATIONS IN 2020
Area of non-compliance
Description
Fines (NOK)
Number of non-monetary sanctions
Dispute resolution mechanisms
Environmental
Social
Economic
n/a
n/a
n/a
0
0
0
0
0
0
None
None
None
P E OP L E
A N T I-C OR RUP T ION
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
PA R T 2
TOWARDS A
SUSTAINABLE
FOOD SYSTEM
LOCAL
COMMUNITIES
We are grateful to our local communities for
giving us permission to farm salmon in their
fjords and inlets. In return, we do not only do
what we can to ensure local biodiversity and
sustainable farming methods. We also contribute
to vibrant local communities in the many rural
areas where we operate.
PA R T 2
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
L OC A L C OMMUNI T IE S
R E L AT ION S HIP S W I T H L OC A L C OMMUNI T IE S
RELATIONSHIPS
WITH LOCAL
COMMUNITIES
Grieg Seafood operates in many
rural communities across our
regions. We are grateful to these
local communities for giving us
permission to farm salmon in their
inlets and fjords. We need their
social license to operate to achieve
sustainable growth.
OUR AP P R O A CH
We earn our social license to operate first and foremost by
constantly striving to reduce our impact on the local environment
and overcome the practical challenges we face. We report on
our efforts in these areas in the chapters Healthy Ocean and
Sustainable Food.
Secondly, we earn it by creating shared opportunities and
contributing to local value creation and vibrant local communities.
Transparency, honesty, and open dialogue underpins our
relationships with local communities. Grieg Seafood aims to be
open and honest with local communities about our production
methods, our successes, and our remaining challenges. We view
it as our responsibility to engage in constructive dialogue with all
stakeholders and groups that are impacted by our activities.
In British Columbia, Grieg Seafood is farming in areas that belong
to indigenous peoples, while Finnmark has been home to the Sami
people for millennia. We recognize that these groups have special
rights, as acknowledged in the United Nations Declaration on the
Rights of Indigenous Peoples (UNDRIP), and take particular care
to avoid infringing them.
L OC A L C OMMUNI T IE S
R E L AT ION S HIP S W I T H L OC A L C OMMUNI T IE S
OU R P R INCIP LE S
• We create jobs and opportunities in the rural areas where we
operate.
• We use local suppliers as often as we can.
• We hire local apprentices and support aquaculture schools and
training facilities.
• We engage in local environmental projects to mitigate impacts
from our operations.
• We sponsor sports and cultural activities
in our local
LEARN MORE ABOUT OUR
RELATIONSHIPS WITH OUR LOCAL
COMMUNITIES ON OUR WEBSITE
→
→
→
→
Rogaland
Finnmark
British Columbia
Newfoundland
communities.
Learn more about our approach
to
the
• We support the implementation of UNDRIP in British Columbia.
implementation of UNDRIP and our journey of
We use the Truth and Reconciliation Commission’s “Call to
reconciliation with Indigenous Peoples in British
Action” for businesses as guidance on how we can support
Columbia here.
the reconciliation process between Indigenous Peoples, the
government and businesses in the province.
•
In Finnmark, Grieg Seafood is also in a process to understand
how we can advance indigenous culture where we farm salmon.
• We provide a grievance mechanism for local communities on
our regional websites.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
L OC A L C OMMUNI T IE S
GRIEG SEAFOOD
ROGALAND
C OM MU NI T Y S T OR I E S
ORGANIZATIONS
We support organizations that engage in ocean-related activities,
such as the diving club Sletta Dykkerklubb. Amongst other things,
they collect litter and plastics from the ocean.
CULTURAL EVENTS
We support cultural events for children and young people, to
make participation in cultural activities affordable for those with
few financial resources. In Stavanger, for instance, we support
Barnas Mablis, a cultural event for children which takes place in
the summer.
SPORTS CLUBS
We support sports clubs in all the municipalities where we have
farms. Our aim is to contribute to the health and social life of local
children and young people.
165
employees
1 060 000 000NOK
purchase from local suppliers in Rogaland
64%
of total purchase was from local suppliers in Rogaland
750 000NOK
donated to local cultural and sports activities
7 075 000NOK
support from the Norwegian Aquaculture Fund to
municipalities where we operate*
*Based on estimates from the Norwegian government
L OC A L C OMMUNI T IE S
GRIEG SEAFOOD
FINNMARK
C OM MU NI T Y S T OR I E S
KVENVIK BYGDELAG
We support Kvenvik Bygdelag, a local community responsible for
outdoor recreation facilities.
ØKSFJORD IL
We support Øksfjord IL, a sports club that offer local activities for
all ages. Øksfjord IL is located in a small village and means a lot
for the local community.
FINNMARKSLØPET
We sponsored Finnmarksløpet – the longest dog sledge race in
Europe. 1 200 km under harsh winter conditions. It start in Alta,
goes all the way to the Russian border and back again.
257
employees
807 000 000NOK
purchase from local suppliers in Troms and Finnmark
60%
of total purchase was from local suppliers
1 780 000NOK
donated to local cultural and sports activities
30 985 000NOK
support from the Norwegian Aquaculture Fund to
municipalities where we operate*
*Based on estimates from the Norwegian government
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
L OC A L C OMMUNI T IE S
GRIEG SEAFOOD
BRITISH COLUMBIA
C OM MU NI T Y S T OR I E S
FIELD OFFICE IN GOLD RIVER
We have a field office to recognize the importance of the community
where our hatchery is located and where we use the local
government's dock to transport harvested fish. Members of the
public can come to the office to find out about job vacancies, inquire
about our sponsorship of events and arrange for farm tours. Most
of the 25 employees at our hatchery make their home in Gold River
174
employees
920 000 000NOK
or the neighbouring First Nation community of Tsaxana.
purchase from local suppliers in B.C.
DONATIONS TO LOCAL FOOD BANKS AND
INDIGENOUS COMMUNITIES
In August and December 2020, we donated more than 700 kilos
of canned farmed salmon to eight food banks in smaller BC towns
and Indigenous communities where young families and seniors
83%
living on pensions are unable to afford high-quality protein. We
of total purchase was from local suppliers
also donated 60 000 cans of salmon to Food Banks BC and Food
Banks Canada to help families suffering financially from the loss
of their jobs during Covid-19, who turned to food banks in high
numbers for much of the year.
NATIONAL CANADA DAY CELEBRATIONS
Each July 1 in the community of Sayward, a team of Grieg
volunteers prepares a salmon barbecue lunch for the community
as part of their national Canada Day celebrations. Residents of
Sayward and nearby towns participate in the parade and events
after enjoying a barbecue lunch.
1 140 000NOK
donated to local cultural and sports activities
L OC A L C OMMUNI T IE S
NEWFOUNDLAND
C OM MU NI T Y S T OR I E S
SPONSORSHIP OF LOCAL AQUARIUM
As a valued member of the Mini Aquarium family, we sponsored
the Petty Harbour Mini Aquarium for the 2020 season. This
sponsorship helped the Aquarium continue its mission of marine
education through the winter.
DONATION TO HEALTH CARE
Our donation to the Burin Peninsula Health Care Foundation’s
Patient Comfort and Care program was used to purchase gift cards
for patients receiving chemotherapy and dialysis, to assist with
the cost of travel to medical appointments throughout the holiday
season.
We have also donated towards improvements at the neonatal care
73
employees
389 000 000NOK
purchase from local suppliers in NL in 2020
46%
unit at the Burin Peninsula Health Care Centre.
of total purchase in 2020 was from local suppliers
92 000NOK
donated to local cultural activities and health care
initiatives
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
PA R T 2
TOWARDS A
SUSTAINABLE
FOOD SYSTEM
PROFIT &
INNOVATION
Without a profitable business, we will not be
able to farm healthy salmon for people to eat
all over the world. To achieve good financial
results, our farming methods need to be both
cost-effective and sustainable.
PA R T 2
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
T HE S A L MON M A R K E T
P R OF I T & INNO VAT ION
THE SALMON
MARKET
Grieg Seafood is part of a global salmon market, supplying 2.6% of
the global volume of Atlantic salmon harvested in 2020. As part of
our new strategy, we will reposition Grieg Seafood in the value chain
and become an innovative partner for selected customers. By focusing
on sustainable farming practices and good fish health and welfare,
we can provide the healthy, tasty, and high-quality product that our
customers and consumers demand.
FIGURE 2.38
GLOBAL ATL ANTIC SALMON HARVEST IN 2020*
FIGURE 2.39
GLOBAL ATL ANTIC SALMON CONSUMPTION IN 2020*
Other
9%
Canada
5%
UK
7%
Chile
29%
≥ Source: NASDAQ Salmon Index
≤ Source: Kontali Analyse AS
Norway
50%
Other
28%
Russia
3%
Japan
3%
USA
21%
EU
45%
P R OF I T & INNO VAT ION
T HE S A L MON M A R K E T
OUR SALES AND MARKET ORGANIZATION
GLOBAL MARKET DEVELOPMENTS IN 2020
Up until the close of 2020, our fish was sold through Ocean Quality,
In 2020, the global volume of Atlantic salmon harvested increased
a dedicated sales organization in which Grieg Seafood had a 60%
by approximately 5% compared to 2019, according to Kontali,
stake and Bremnes Fryseri a 40% stake. The purpose of Ocean
continuing an upward trend seen over several years. A total of
Quality was to sell our salmon at above the market rate. However,
2 442 960 tonnes GWT was estimated to have been harvested
Grieg Seafood has built up its own sales organization to support
globally in 2020, up from 2 323 800 tonnes in 2019. The largest
growth and the downstream strategy. The new sales organization
contributors to the increase were Chile and Norway, with an
is partly based on the Ocean Quality sales force, through Grieg
increase in output of 79 200 and 32 040 tonnes, respectively. The
Seafood’s acquisition of the companies Ocean Quality North
Chilean industry has mustered an impressive recovery after its
America (OQ NA), Ocean Quality USA (OQ USA) and Ocean Quality
difficulties in 2017, while Norway has seen incremental growth
UK (OQ UK) at year-end 2020. OQ NA is now Grieg Seafood Sales
in harvested volumes as farmers have adapted to challenging
North America, OQ USA is Grieg Seafood Sales USA, while in
biological conditions over the past few years. The UK experienced
Shetland the sales organization has been merged with the farming
a reduction in the volume harvested in 2020. The global supply of
entity Grieg Seafood Shetland. Bremnes Fryseri took ownership of
Atlantic salmon increased by approximately 4% compared to 2019.
the Norwegian organization Ocean Quality AS at the end of 2020,
It is estimated that consumption in most major markets increased
and the sales joint venture Ocean Quality was dissolved. Our new
in 2020, except for China, were it decreased by 25%. The largest
sales entity in Norway is Grieg Seafood Norway. To facilitate the
relative increases in consumption were found in the EU and the
transition, Grieg Seafood and Bremnes Fryseri will continue to
USA, up 5% and 8%, respectively.
collaborate on sales until June 2021. Our new sales and market
organization became operational in January 2021. From being
purely a supplier of farmed salmon from Norway, Scotland and
Canada, we will reposition Grieg Seafood in the value chain and
become a partner for selected customers in our main markets.
FIGURE 2.40
NQSALMON WEEKLY AVERAGES (NOK/KG) (LESS DISTRIBUTOR MARGIN OF NOK 0.75)
2017
2018
2019
2020
2021
100
80
60
40
20
1
6
11
16
21
26
31
36
41
46
51
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I T & INNO VAT ION
T HE S A L MON M A R K E T
OUR MARKET DEVELOPMENT IN 2020
With a limited increase in supply to the market, high prices would
Continental Europe
is by far our most
important market,
normally be expected, but Covid-19 impacted both consumption
representing 45% of our sales revenues in 2020. The market
patterns and overall demand for salmon during the year. Sales
distribution of sales varies year on year, depending on the
to the HoReCa market have been low due to Covid-related
harvested volumes across our regions. The main change in our
restrictions, curfews and lockdowns in most markets. On the other
sales distribution was a decrease to the EU, from 52% in 2019
hand, sales to the retail segment and home consumption have
to 45% in 2020, due to the increased volume from our Canadian
increased. Salmon spot prices noted on NASDAQ Salmon Index
farming operations. At the same time, sales directed to the UK
(NQSALMON) sell substantially during both the first and second
market increased from 6% in 2019 to 9% in 2020. The figures
wave of restrictions and lockdowns in Europe. The same trend was
exclude sales from Shetland.
observed in the North American market. The spot market price
stood at NOK 78.4 at the beginning of the year, the lowest price
Our sales revenues amounted to NOK 4 384 million, corresponding
was seen towards the end of the year at NOK 40.2 per kg. Prices
to a decrease of NOK 371 million or 7.8% from 2019. The average
closed 2020 at NOK 50.7. The 12-month average NQSALMON
spot salmon price (NQSALMON weekly average less distributor
for 2020 (less distributor margin of NOK 0.75) came to NOK 53.7
margin) for the year was down by NOK 3.5 per kg compared to
compared to NOK 57.2 in 2019.
2019. Although spot market prices negatively impacted our sales
revenue, fixed-price contracts in Norway made a significant
contribution. The total share of fixed-price contracts was 41% in
Norway, in line with our targeted contract rate of 20-50%.
FIGURE 2.41
OUR MARKETS IN 2020
FIGURE 2.42
OUR MARKETS IN 2019
Other
1%
Asia
16%
Other
2%
Asia
19%
EU
45%
North America
29%
UK
9%
EU
52%
North America
21%
UK
6%
P R OF I T & INNO VAT ION
T HE S A L MON M A R K E T
MARKET EXPECTATIONS
The global harvest of Atlantic salmon in 2021 is expected to
Covid-19 has disrupted the salmon market, with a significant shift
increase by 2-4%. Due to the Norwegian increase in maximum
in demand, away from hotels, restaurants and catering (HoReCa)
allowed biomass (MAB), good seawater conditions during the
and to a greater extent towards the retail segment. The retail
second half of 2020, and volumes held back for harvest in 2020,
segment and home consumption have been boosted. The shift
Norwegian salmon farmers are expected to harvest 100 000 tonnes
from HoReCa to retail is expected at some point to be reversed,
more in 2021 than in 2020, while the harvest in Chile is expected to
but the current market situation may also lead to permanent
decrease by approximately 100 000 tonnes. With a limited increase
changes in consumer behavior. With an increasing share of people
in the volume harvested, high prices would normally be expected,
preparing food at home, combined with a growing preference for
but the market situation has been significantly impacted by
healthy food and the current low prices, the demand for salmon
Covid-19. Strict measures due to the pandemic continue to affect
may increase in the retail segment going forward.
most markets, despite ongoing vaccination programs. Good supply
combined with a market affected by Covid-19 measures, including
Looking further ahead, there is a consensus in the market that
border closures, continued to impact market prices going into
the existing coastal open-pen aquaculture industry will achieve
2021. However, In the first quarter of 2021, the spot market prices
modest organic growth. This will primarily be driven by the
increased significantly. The average spot market price for the first
opening of new sites and areas for sea farms, new and improved
11 weeks of 2021 was NOK 50.4 per kg, compared to NOK 70.6
technologies and farming practices, and better cooperation both
for the same period of 2020. While the pandemic is still causing
between industry players and with the public authorities. In
uncertainty, the implementation of vaccination programs in many
addition to this incremental growth, more experimental attempts
countries makes the short-term market outlook look promising.
to farm salmon, either offshore or on land, may supplement the
Forward prices on Fish Pool for the second half of 2021 trade
traditional salmon farming industry with additional volumes in the
around NOK 55 per kg, and NOK 58 per kg for 2022.
longer term.
So far in 2021 Norwegian export of fresh HOG salmon has increased
For the past 25 years, literally all new fish volumes have come
with approximately 31 000 tonnes, an increase of 22% compared to
from aquaculture. Wild fishing has long had to cope with smaller
the same period in 2020. This means that a significant amount of
catches, quotas, and other regulatory restrictions. Since 1990,
the total estimated yearly harvest increase is already realized in
the volume of farmed fish has multiplied more than six-fold, with
the market. Going forward, the harvest increase per week will be
salmon making up less than 2.5% of the volume.
lower, and we expect this will help sustain a higher price level then
observed over the last six months.
In line with the ongoing global megatrends relating to health and
sustainability, there has been growing interest in the health and
The transition period following the UK’s withdrawal from the
potential environmental benefits of sustainable aquaculture. At
European Union (Brexit) expired at year-end 2020. What Brexit will
the moment, Europe is the largest and most mature market for
mean for the Scottish salmon farming industry and Norwegian
Atlantic salmon, consuming more per capita than other continents.
exporters remains uncertain, due to possible tariffs on trade and
There are, however, countless ongoing initiatives to introduce
logistical problems in getting fresh salmon from Norway to the UK
salmon to a larger number of new consumers across the globe. An
and from the UK to the rest of Europe. So far, the salmon trade
increase in consumption per capita in large markets and growing
has not been significantly affected by Brexit. See the Board of
economies such as the USA, Brazil, China, and India is expected to
Director’s report for further information regarding risks related to
contribute to rising demand for Atlantic salmon over time.
Brexit.
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E C ONOMIC P R ODUC T I V I T Y
P R OF I T & INNO VAT ION
ECONOMIC
PRODUCTIVITY
By focusing on sustainability and
driving forward improvements at our
farming operations, we aim to create
value for all our stakeholders.
OUR P R INCIP LE S
• Our investments reflect our growth strategy and the evolution
of our position in the value chain, as well as our on post smolt,
improving fish welfare and digitalization .
• We aim to provide our shareholders with a competitive return
on capital invested.
OUR TAR GE T
Return On Capital
Employed (ROCE)
ROCE of 12%
OU R R E SULT S
PROFIT AND LOSS
2020 was significantly impacted by the Covid-19 pandemic. Spot
Comparing the prices in 2020 and 2019, and using the volume
prices for Atlantic salmon were affected by lower demand from
harvested in 2020, the change in price reduced our EBIT by NOK
the HoReCa segment due to Covid-19 restrictions, curfews and
289 million in 2020.
lockdown. Sales to the retail segment and home consumption
have, however, been increased. Despite a challenging situation,
Total costs, excluding depreciation and write-downs, came
we were able to maintain production and transport our salmon to
to NOK 3 810 million, up NOK 411 million (12%) from
the markets.
NOK 3 399 million in 2019. The change in costs was mainly driven
by biological issues in Finnmark and Rogaland, which generated
We reached a harvested volume of 86 847 tonnes, which was below
additional direct and indirect operating costs and reduced our
our original target of 100 000 tonnes. During 2020, we reduced
EBIT by NOK 510 million. Feed, which comprises the main part
our targeted harvest volume mainly due to biological challenges
of the cost, increased by approximately 3.5% in 2020 compared to
with low temperatures in Finnmark causing winter ulcers, early
2019. The total farming cost for the Group came to 47.0 per kg in
harvests and lost on-growth, as well as challenges with ISA. As
2020, compared to NOK 40.5 per kg in 2019. EBIT for the Group
our Shetland assets are classified as held or sale at year-end 2020,
before fair value adjustment of biological assets ended at NOK 233
our results are presented exclusive of Shetland for 2020 and 2019.
million, down from NOK 1 077 million in 2019.
Exclusive of Shetland, our harvested volume was 71 142 tonnes,
1% lower than the harvest of 71 700 tonnes in 2019. The overall
volume decrease reduced our EBIT by 1% compared to 2019.
The average spot price for 2020 (NASDAQ Salmon weekly average,
less a distributor margin of NOK 0.75) came to NOK 53.7 per kg,
down by NOK 23.4 per kg compared to prices at the end of 2019,
and down NOK 3.5 per kg compared to the average spot price for
2019 as a whole. The negative effect of lower market prices was
somewhat offset by favorable fixed-price contracts in Rogaland
and Finnmark. The Group´s sales revenues decreased by NOK
371 million, or 7.8%, to NOK 4 384 million in 2020 (2019: NOK 4 756
million). The average price achievement by our regions was NOK
54.7 per kg in 2020 compared to NOK 58.8 per kg the year before.
P R OF I T & INNO VAT ION
E C ONOMIC P R ODUC T I V I T Y
FIGURE 2.43
EBIT BEFORE FAIR VALUE ADJUSTMENT OF BIOLOGICAL ASSETS WATERFALL
Grieg Seafood (NOK million)
Rogaland (NOK million)
1 077
-9
-9
232
-510
-35
568
-49
-97
292
-130
EBIT
2019
Volume
Price
Operational
costs
Group
costs
EBIT
2020
EBIT
2019
Volume
Price
Operational
costs
EBIT
2020
Finnmark (NOK million)
British Columbia (NOK million)
580
-98
-121
37
73
127
-234
-97
EBIT
2019
Volume
Price
Operational
costs
EBIT
2020
EBIT
2019
Volume
Price
-20
Operational
costs
-7
EBIT
2020
Source: Group Accounts Note 8. Volume effect = (Harvest volume CY - Harvest volume PY)*EBIT per kg PY. Price effect = ([Sales revenue CY/Harvest volume CY] - [Sales revenue PY/
Harvest volume PY])*Harvest volume CY. Operational cost effect = (((Sales revenues CY - EBIT before fair value adjustment of biomass CY)/Harvest volume CY) - ((Sales revenues PY
- EBIT before fair value adjustment of biomass PY)/Harvest volume PY))*Harvest volume CY. Group costs effect = Total EBIT before fair value adjustment of biomass from Elim/Other-
column in the segment information table. CY = Current year. PY = Previous year.
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E C ONOMIC P R ODUC T I V I T Y
P R OF I T & INNO VAT ION
FIGURE 2.44
KEY FIGURES
NOK MILLION
Sales revenues
EBITDA
EBIT
Harvest volume (tonnes GWT)
Group Farming cost/kg (NOK)
EBIT/ kg (NOK)
ROCE
2016
6 545
1 342
1 168
64 727
39.7
18.0
33%
2017
7 017
1 106
904
62 598
43.4
14.5
24%
2018
7 500
1 334
1 099
74 623
43.1
14.7
22%
2019
4 756
1 384
1 077
71 700
40.5
15.0
19%
2020
4 384
602
233
71 142
47.0
3.3
3%
The 2020 and 2019 figures are impacted by the held for sale- and discontinued operations-classification of Shetland and Ocean Quality in 2020, significantly
impacting a comparative analysis of prior periods. The figures for 2016 to 2018 is not re-presented (includes farming operations of Shetland, and sales
activities attributable to Bremnes Fryseri). For more information, see Note 5 of the Group Accounts.
FIGURE 2.45
GROSS INVESTMENTS (INCL. SHETL AND)
Growth investment
Maintenance investment
Harvest volume (GWT)
NOK million
1 000 tonnes
1 200
1 000
800
600
400
200
0
2016
2017
2018
2019
2020
Gross investment of NOK 1 069 million in 2020 includes NOK 87 million related to Grieg Seafood Shetland. Cash payment made on the acquisition of Grieg
Newfoundland of NOK 620 million is not included. The comparable figures 2016-2019 also include capital expenditures made in Shetland.
80
75
70
65
60
P R OF I T & INNO VAT ION
E C ONOMIC P R ODUC T I V I T Y
CASH FLOW
Operating activities
FINANCIAL POSITION AND LIQUIDITY
As of 31 December 2020, the book value of total assets was NOK
The Group had a net positive cash flow from operating activities
10 650 million, up from NOK 8 935 million at the same point in
of NOK 412 million, compared to NOK 1 193 million in 2019. The
2019. The composition of our balance sheet as at 31 December
lower net cash flow from operating activities is primarily due to
2020 compared to 31 December 2019 is significantly impacted
lower market prices and higher operating costs in 2020, as our
by Shetland being classified as held for sale in 2020. NOK 1 973
harvested volume was at the same level as in 2019.
million of the book value of assets relates to assets held for sale.
Financing activities
In accordance with IFRS 5, the Statement of Financial Position
for 2019 has not been re-presented, which makes a comparative
analysis of the 31 December 2020 Statement of Financial Position
Net cash flow from financing activities amounted to NOK 1 478
with prior periods more difficult. Please see Note 5 of the
million in 2020 compared to NOK -625 million in 2019. The net
Group Accounts for a specification of the net assets attributable
cash from financing activities in 2020 was significantly boosted
to the Shetland disposal group, and more information on the
by our NOK 1 500 million Green Bond issue, completed through
classification. The increase of NOK 1 715 million in our total asset
tap issues in June and November 2020. As part of our Covid-19
value is primarily due to the acquisition of Grieg Newfoundland
measures, we postpone dividends for 2019, hence no dividends
and the ongoing greenfield project there. Total equity amounted to
were paid in 2020. In 2019, NOK 442 million was paid in dividends
NOK 4 371 million, corresponding to an equity ratio of 41% at year-
to our shareholders.
end. The return on capital employed (ROCE) was 3%, compared to
our target of 12%.
Investing activities
In addition to a revolving credit facility, the Group has long-term
Net cash flow from investing activities amounted to NOK -1 593
loan agreements including two term loans of NOK 600 million and
million in 2020, compared to NOK -297 million in 2019. In 2020, we
EUR 60 million. The principal outstanding on these loans as of 31
acquired 99% of Grieg Newfoundland, partly settled with a cash
December 2020 was NOK 475 million and EUR 47.5 million. Both
consideration of NOK 620 million. Through Grieg Newfoundland,
term loans mature in 2023. We also have a senior unsecured Green
we are developing a greenfield project in Newfoundland, Canada,
Bond issue of NOK 1 500 million, maturing 25 June 2025. The bond
with the potential to harvest 15 000 tonnes by 2025. Our 2030
was rated as Medium Green by Cicero, and was listed on Euronext
ambition for the project is a harvested volume of at least 45 000
in October 2020. Our cash balance at the end of the year was
tonnes. We have also invested NOK 159 million in Rogaland and
NOK 275 million with an additional NOK 1 203 million available in
Finnmark on new maximum allowable biomass (MAB) capacity
undrawn credit facilities. For more information on interest-bearing
of 527 tonnes, in addition to MAB (traffic light) growth. Increasing
liabilities including amendments to our loan agreements, please
the farming capacity in Rogaland and Finnmark is a key part of
see Note 12 of the Group Accounts. At the end of 2020, net interest-
our growth strategy to ensure flexibility in production and harvest
bearing debt (NIBD) amounted to NOK 3 931 million, up from NOK
planning.
2 376 million at the same time the year before. The change in NIBD
compared to 2019 was mainly driven by the Group’s NOK 1 500
million Green Bond issue in 2020. At year-end 2020, 38% of our
net interest-bearing liabilities were green. In addition, the change
in NIBD is attributable to increased drawdowns on other interest-
bearing debt including leases related to growth investments and
increased operating capacity. NIBD at 31 December 2020 includes
lease liabilities of NOK 252 million (2019: NOK 380 million) that
would be recognized as operational leases according to IFRS in
force prior to 1 January 2019.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I T & INNO VAT ION
E C ONOMIC P R ODUC T I V I T Y
DIRECT ECONOMIC VALUE GENERATED
Taxes are important sources of government revenue. They are
central to the fiscal policy and macroeconomic stability of countries
and are acknowledged by the United Nations to as playing a vital
role in achieving its Sustainable Development Goals. Furthermore,
they are a key mechanism by which organizations contribute to the
economies of the countries in which they operate, i.e. Norway and
Canada for Grieg Seafood. By reporting our taxes paid country-by-
country, we indicate our scale of activity and the contribution we
make through tax in these jurisdictions. Living up to our obligation
to comply with tax legislation and our responsibility to meet our
stakeholders’s expectations with respect to good tax practice is
extremely important to us.
The information on the creation and distribution of economic value
shall provide a basic indication of how we create wealth for our
stakeholders. In addition, the components of the economic value
generated and distributed sharpen Grieg Seafood’s economic
profile, permit a different interpretation of the economic figures
and outline the overall economic value retained from the Group’s
ordinary operations during the year. In 2020, the economic value
retained came to NOK 430 million, corresponding to a decrease of
about NOK 204 million compared to 2019.
FIGURE 2.46
DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED
NOK MILLION
Value generated
Revenues
Value distributed
Salaries and personnel expenses
Operating cost
Raw materials and consumables used
Other operating expenses
Payments to providers of capital
Net interest and other financial items
Paid dividends
Payments to government
Estimated taxation
Value retained
All figures compiled from the audited Group accounts.
2016
2017
2018
2019
6 545
483
3 287
1 457
91
179
339
709
7 017
483
3 724
1 725
62
474
198
351
7 500
541
3 853
1 822
64
467
280
473
4 756
493
1 498
1 407
64
462
197
634
2020
4 384
500
1 717
1 593
133
—
12
430
P R OF I T & INNO VAT ION
E C ONOMIC P R ODUC T I V I T Y
FIGURE 2.47
VALUE GENERATED IN 2020
10%
11%
0%
3%
FIGURE 2.48
TOTAL TA XES (INCOME AND PROPERT Y TA X) PAID IN
2020 (NOK 1 000)
Norway
Canada
Total taxes paid
204 223
5 375
209 597
36%
39%
Estimated taxation
Value retained
Other operating expenses
Salaries and personell expenses
Raw materials and consumables used
Net interest and other financial items
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I TA BL E GR O W T H
P R OF I T & INNO VAT ION
PROFITABLE
GROWTH
By combining skilled and motivated
people with new technology, and
increasingly farming salmon on
nature’s terms, we aim to ensure
sustainable and profitable growth in
the years ahead.
OUR P R INCIP LE S
• We aim to expand globally through growth and value chain
innovation. Increasingly sustainable farming practices form the
very foundation of all areas of our strategy.
• To achieve sustainable growth and improve competitiveness,
we focus on reducing the time in sea, improving fish welfare
and increasing our operational insight through digitalization.
• By focusing on a number of different areas, we will reduce our
environmental impact, improve fish welfare, and boost survival
rates. As a result, the harvested volume will increase and
production costs will decrease.
O U R TA R G E T S
Harvested volume
80 000 tonnes in 2021 (ex. Shetland)
130 000 tonnes in 2025 (ex. Shetland)
Farming cost per kg
NOK 40/kg, CAD 7/kg in 2022
OU R R E SULT S
FIGURE 2.49
GROUP HARVEST AND FARMING COST
Tonnes GWT
100 000
80 000
60 000
40 000
20 000
0
Harvest (tonnes GWT) Group ex Shetland
Harvest (tonnes GWT) Shetland
Group farming cost (NOK/kg)
NOK/kg
60
55
50
45
40
35
30
25
2011
2012
2013
2014
2015
2016
2017
2018
2019*
2020*
* Group farming cost (NOK/kg) 2019 and 2020 excluding Shetland
P R OF I T & INNO VAT ION
P R OF I TA BL E GR O W T H
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I TA BL E GR O W T H
ROGALAND
R OG A L A ND
P R OF I TA BL E GR O W T H
R OG A L A ND
SUSTAINABILITY KPIs
PILLAR
KPI
TARGET
2016
2017
2018
2019
2020
Harvest volume (tonnes GWT)
28 000 tonnes in 2021
18 367
18 111
16 293
25 217
23 043
PROFIT &
INNOVATION
HEALTHY
OCEAN
EBIT per kg (NOK)
Farming cost per kg (NOK)
NOK 40/kg in 2022
ASC certification
All sites by 2023
Survival rate in freshwater
Survival rate in seawater
93% by 2022
Cost of reduced survival
(NOK 1 000)
Use of antibiotics
(g per tonne LWE) *
25.4
33.9
n/a
95%
93%
21.7
38.4
n/a
94%
91%
13.5
40.3
n/a
90%
92%
22.5
35.9
n/a
93%
93%
12.7
42.1
n/a
95%
90%
18 039
35 988
48 609
26 127
63 664
No use of antibiotics
0.00
0.00
0.00
0.00
0.00
Use of hydrogen peroxide
(kg per tonne LWE) *
Minimize use of pharmaceutical
treatments
18.45
10.79
3.46
11.94
7.21
Sea lice treatments - in feed
(g per tonne LWE) *
Minimize use of pharmaceutical
treatments
3.32
0.15
1.09
0.03
0.00
Sea lice treatments - in bath
(g per tonne LWE) *
Minimize use of pharmaceutical
treatments
1.88
0.00
0.00
0.00
0.02
Escape incidents (# of fish)
Zero escape incidents
Dead birds
Minimize impact on wildlife
Dead marine mammals
Minimize impact on wildlife
SUSTAINABLE
FOOD
Carbon emissions
(kgCO2e per tonne GWT)
35% reduction (from 2018)
in total emissions by 2030
Scope 1 + 2 location based
Scope 3
0
n/a
n/a
n/a
n/a
0
20
0
230
n/a
0
24
0
256
n/a
0
2
0
0
20
0
382
n/a
403
3 201
High quality product
93% superior share
88%
81%
74%
75%
85%
Biological feed conversion ratio
(bFCR)
Economic feed conversion ratio
(eFCR)
1.18
1.24
1.33
1.17
1.22
1.34
1.44
1.52
1.28
1.44
PEOPLE
Employees
135
148
145
157
165
Absence rate
Below 4.5%
3.4%
3.2%
4.7%
3.5%
3.0%
Lost time incident rate
Turnover rate
LOCAL
COMMUNITIES
Local procurement
* Amount of active pharmaceutical ingredients (APIs) used (in gr or kg) per tonne of fish produced (LWE).
n/a: Data not available.
9
n/a
n/a
11
n/a
n/a
24
n/a
15
n/a
9
4%
n/a
64%
64%
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
R OG A L A ND
P R OF I TA BL E GR O W T H
GRIEG SEAFOOD
ROGALAND
Grieg Seafood Rogaland AS farms salmon in the county of Rogaland
on the west coast of Norway. The company has 18* seawater license
equivalents and two licenses for land-based production of smolt. We
also operate our own broodstock activity in Erfjord. All the salmon
we harvest in this region is processed and packed at our own facilities.
OP E R AT I ON A L P R IOR I T IE S
Grieg Seafood Rogaland aims to reduce production time in the sea,
In Rogaland, a full-scale integrated operational center was
which will result in improved biological performance and a higher
completed in 2020. The center monitors and controls the production
utilization of each site’s maximum allowable biomass (MAB). The
on all farms, including feeding operations. All Precision Farming
average size of the smolt transferred to the sea in 2020 was 400
initiatives in Rogaland will be connected to the operational center.
grams, compared to 280 grams in 2019. The transfer of larger
Examples are dashboards on feed, production, fish health and
smolt has produced promising results, with the time the fish spend
welfare to better benchmark between farms and increase learning
at sea reduced from the previous norm of 18 months to less than
from each production cycle. Initiative to utilize video analytics with
12 months. Our closed-containment facility, FishGLOBE, produced
machine learning algorithms to automize biomass control and sea
a batch of smolt with average weight of 830 grams, while the
lice counts is ongoing, and will be expanded to new areas such as
highest average weight at transfer to our sea farms was delivered
behavioural based fish welfare monitoring.
by our land-based facility, with an impressive 1.1 kg. Larger smolt
will significantly reduce seawater production time, making the
Aquaculture Stewardship Council (ASC) certification is an important
fish less exposed to issues such as sea lice and Pancreas Disease
objective, as we believe it provides our customers and consumers
(PD). Joint venture investments in post-smolt facilities form
with the assurance that we are operating in a responsible manner,
an important part of this strategy. We have a 33% shareholding
producing high-quality seafood certified to the highest social and
in Tytlandsvik Aqua, which will be expanded from its current
environmental standards. We aim to certify all sites in Rogaland
production capacity of 3 000 tonnes to 4 500 tonnes, with an option
according to ASC, or be in compliance with ASC, by 2023.
for further capacity increases. In January 2021, we invested in
Årdal Aqua, which will produce at least 3 000 tonnes of post-smolt
We are continuously looking for opportunities to increase our
annually. The project is currently in the design development phase,
farming capacity. In 2020, we acquired an additional capacity of
and the company aims to start construction during the autumn of
647 tonnes maximum allowable biomass (MAB), which will allow
2021. Production capacity will be 5 000 tonnes annually, according
improved production and flexibility.
to current plans, but the aim is to increase production capacity
further and to gradually raise fish to harvestable size on land.
We have set a cost target of NOK 40 per kg, which we expect to
reach towards 2022. Our goal is to harvest 28 000 tonnes in 2021,
increasing to 35 000 tonnes in 2025.
*We have 17 licenses, but one of our licenses is doubled, which in practice means we
have 18 licenses. In addition, we have a long-term rental agreement with Rogaland
County Council for one license.
P R OF I TA BL E GR O W T H
R OG A L A ND
23 043
TONNES GWT HARVESTED
12.7
EBIT/KG (NOK)
FIGURE 2.50
RESULTS FOR ROGAL AND
ROGALAND
2016
2017
2018
2019
2020
Harvest (tonnes GWT)
18 367
18 111
16 293
25 217
23 043
Revenue (NOK million)
1 140.4
1 150.2
EBIT (NOK million)
466.8
393.1
EBIT / kg (NOK)
Farming cost / kg (NOK)
25.4
33.9
21.7
38.4
959.6
219.6
13.5
40.3
1 538.9
1 309.6
568.2
292.3
22.5
35.9
12.7
42.1
FIGURE 2.51
EBIT AND HARVEST ROGAL AND
Harvest (tonnes GWT)
EBIT/kg (NOK)
30 000
25 000
20 000
15 000
10 000
5 000
0
Harvest (tonnes GWT)
EBIT/kg (NOK)
30
25
20
15
10
5
0
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2017
2018
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I TA BL E GR O W T H
R OG A L A ND
OP E R AT I ON A L R E SULT S
A total of 23 043 tonnes was harvested in 2020, a decrease of
in 2019 (NOK 1.0 per kg). The biological issues and decreased
9% compared to the 25 217 tonnes harvested in 2019, below our
survival rate also impacted our economic feed conversion ratio.
original estimate of 25 000 tonnes.
We are working to improve survival rates through general health
and welfare measures, and a preventive and targeted approach to
Revenue amounted to NOK 1 310 million in 2020, a decrease of
diseases and sea lice. We have not used antibiotics in Rogaland
15% compared to 2019 (NOK 1 539 million). The average spot price
for several years, due to good results from vaccines and efforts
in 2020 was NOK 53.7 per kg, compared to NOK 57.2 per kg in
to ensure robust fish health. One of the main initiatives intended
2019. The sale of 41% of our volume under fixed-price contracts
to reduce sea lice numbers is our post-smolt strategy, which
contributed to our overall price achievement of NOK 56.8 per kg
shortens the time spent at sea and thereby reduces sea lice
in 2020. The share of superior quality fish improved from 75% in
pressure per fish. Our experience so far indicates a 50% reduction
2019, when the quality was significantly impacted by PD, to 85%
in sea lice treatments. In addition to post-smolt, we aim to use
in 2020. In 2020, we had a stable PD situation, with PD at just one
wild-caught wrasse and freshwater treatment as our primary
site at year-end. We target a 93% superior share, which was not
methods to combat sea lice. We have had success with preventive
reached in 2020 due to the continued impact of PD and occurrences
methods, and by planning and using cleaner fish, in particular
of winter ulcers. The improved PD situation also reduced the
wrasse, effectively, have managed to reduce the number of sea lice
number of claims, which were mainly related to gristle, melanin
treatments in the period where wrasse are available (mainly July to
and texture.
November). As a result, we did not perform any sea lice treatments
between July and November 2020, and we have reduced the use
Our freshwater production has been good in 2020. We transferred
of hydrogen peroxide and bath treatments. We aim to avoid using
more than 6.5 million smolt to the sea in 2020, with an average
hydrogen peroxide whenever possible, but in 2020 it was used to
weight of 395 grams, compared to 279 grams in 2019. The
treat large numbers of fish at the same time, as a targeted and
freshwater survival rate from our own facility improved from 93%
efficient measure to reduce high sea lice levels.
in 2019 to 95% in 2020. The main losses happened in the early life
phase, up to 1 gram.
Due to continued focus on escape prevention, we did not have any
escape incidents in 2020. We also work on measures to minimize
Our seawater production performed well, but was impacted by
our impact on local wildlife. In 2020, 20 birds got caught in our
biological challenges and reduced survival at two sites in the
nets. We are not content with reporting any dead birds, and will
summer and autumn. The farming cost ended at NOK 42.1 per kg
continue our effort to reduce this number.
in 2020, up from NOK 35.9 per kg in 2019, mainly due to a reduced
volume harvested and reduced survival. The 12-month rolling
survival rate decreased from 93% in 2019 to 90% in 2020, due to
a combination of Cardiomyopathy Syndrome (CMS), a virus that
infects heart muscle cells and can lead to increased mortality, and
wounds caused by mechanical delousing treatment during the first
half of 2020. The reduced survival rate had a cost (cost recognized
as abnormal mortality in the income statement) of NOK 63.7
million in 2020 (NOK 2.8 per kg), compared to NOK 26.1 million
P R OF I TA BL E GR O W T H
R OG A L A ND
FIGURE 2.52
SURVIVAL RATE AT SE A IN ROGAL AND, ROLLING 12
MONTHS
FIGURE 2.53
MAIN CAUSES FOR REDUCED SURVIVAL IN SE AWATER IN
ROGAL AND IN 2020
100%
95%
90%
85%
80%
75%
MAIN CAUSE
NUMBER OF FISH
TONNES OF FISH
Target: 93%
Infectious
Bacterial
Virus
Gill infections
Non-Infectious
Treatments
Life cycle
Environment
447 913
171 234
1 643
331 287
158 256
89 346
1 240
734
6
999
329
268
We report diseases, mortality, and other fish health indicators
to the Norwegian authorities on a weekly basis. This is publicly
available information, please see Barentswatch.
2016
2017
2018
2019
2020
FIGURE 2.54
SE A LICE LEVELS (ADULT FEMALES) IN ROGAL AND
2020
2019
2018
2017
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
0.5 Limit of adult female
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Our sites in Rogaland are located in Norwegian production area 2 (PO2), which received a green light under Norway’s recently introduced
“traffic light” system (“green - low sea lice density"). We report sea lice levels and sea lice treatments to the Directorate of Fisheries on a
weekly basis. This is publicly available information, please see Barentswatch.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I TA BL E GR O W T H
FINNMARK
F INNM A R K
P R OF I TA BL E GR O W T H
F INNM A R K
SUSTAINABILITY KPIs
PILLAR
KPI
TARGET
2016
2017
2018
2019
2020
Harvest volume (tonnes GWT)
37 000 tonnes in 2021
22 104
22 831
29 774
32 362
26 919
PROFIT &
INNOVATION
HEALTHY
OCEAN
EBIT per kg (NOK)
Farming cost per kg (NOK)
NOK 40/kg in 2022
ASC certification *
All sites by 2021
Survival rate in freshwater
Survival rate at sea
93% by 2022
Cost of reduced survival
(NOK 1 000)
Use of antibiotics
(g per tonne LWE) **
20.2
36.3
n/a
91%
94%
15.4
40.7
2
86%
95%
20.0
35.6
4
89%
96%
17.9
37.7
10
87%
96%
4.7
44.1
15
89%
92%
71 770
16 965
624
15 055
37 495
No use of antibiotics
0.00
0.00
0.00
0.00
0.00
Use of hydrogen peroxide
(kg per tonne LWE) **
Minimize use of pharmaceutical
treatments
42.43
13.36
14.53
0.00
3.62
Sea lice treatments - in feed
(g per tonne LWE) **
Minimize use of pharmaceutical
treatments
0.14
0.06
0.08
0.10
0.14
Sea lice treatments - in bath
(g per tonne LWE) **
Minimize use of pharmaceutical
treatments
0.02
0.90
0.72
0.21
0.82
Escape incidents (# of fish)
Zero escape incidents
1 (200)
Dead birds
Minimize impact on wildlife
Dead marine mammals
Minimize impact on wildlife
SUSTAINABLE
FOOD
Carbon emissions
(kgCO2e per tonne GWT)
35% reduction (from 2018)
in total emissions by 2030
Scope 1 + 2 location based
Scope 3
n/a
n/a
n/a
n/a
0
18
0
224
n/a
0
1
0
0
2
0
0
6
0
254
n/a
169
n/a
182
1 035
High quality product
93% superior share
89%
78%
86%
86%
69%
Biological feed conversion ratio
(bFCR)
Economic feed conversion ratio
(eFCR)
1.10
1.16
1.12
1.14
1.20
1.17
1.29
1.17
1.21
1.35
PEOPLE
Employees
203
250
247
256
257
Absence rate
Below 4.5%
6.1%
4.4%
5.4%
4.9%
5.5%
Lost time incident rate
Turnover rate
LOCAL
COMMUNITIES
Local procurement
* Number of sites
** Amount of active pharmaceutical ingredients (APIs) used (in gr or kg) per tonne of fish produced (LWE).
n/a: Data not available.
13
n/a
n/a
24
n/a
n/a
18
n/a
22
n/a
28
10%
n/a
66%
60%
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F INNM A R K
P R OF I TA BL E GR O W T H
GRIEG SEAFOOD
FINNMARK
Grieg Seafood Finnmark AS farms salmon in Troms and Finnmark,
the northernmost county in Norway. Of the company's 28
seawater licenses, eight are “green licenses” and therefore subject
to stricter environmental standards. In addition, we own one
freshwater license. In general, the salmon we harvest are processed
and packed at our local facility in Alta.
OP E R AT I ON A L P R IOR I T IE S
As in all our regions, Grieg Seafood Finnmark focuses on
Flexibility is a requirement to achieve better utilization of our
improving fish welfare and achieving a high survival rate. Camera
capacity, and we are continuously looking for opportunities to
surveillance and sensor technology are utilized to continuously
secure access to good new locations. In 2020, we were granted
monitor the environment. As a result of our efforts in the area
approval for two new locations, and we also acquired an additional
of sustainable production, we had achieved the ASC certification
capacity of 259 tonnes maximum allowable biomass (MAB), which
of 15 sites in Finnmark by year-end 2020, corresponding to 80%
will allow improved production and flexibility.
of net production. We aim for ASC certification of all sites within
2021 (new sites must reach peak biomass to be considered for
We have set a cost target of NOK 40 per kg, which we expect to
certification).
reach towards 2022. Our harvesting target for 2021 is 37 000
tonnes, increasing to 45 000 tonnes in 2025.
Production at the smolt facilities at Adamselv and Nordnorsk
Smolt (50% shareholding) has been good throughout 2020, with
the smolt transferred to the sea in 2020 averaging 190 grams.
We aim to increase our post-smolt production capacity by 4 000
tonnes of post smolt by 2025. Increasing the smolts’ weight will
make them more robust when they are transferred to the sea, and
a shorter period at sea will reduce exposure to biological risks
such as winter ulcers and ISA.
P R OF I TA BL E GR O W T H
F INNM A R K
26 919
TONNES GWT HARVESTED
4.7
EBIT/KG (NOK)
FIGURE 2.55
RESULTS FOR FINNMARK
FINNMARK
2016
2017
2018
2019
2020
Harvest (tonnes GWT)
22 104
22 831
29 774
32 362
26 919
Revenue (NOK million)
1 244.3
1 265.2
1 671.3
1 815.3
1 389.0
EBIT (NOK million)
447.1
351.9
594.9
580.2
127.4
EBIT / kg (NOK)
Farming cost / kg (NOK)
20.2
36.3
15.4
40.7
20.0
35.6
17.9
37.7
4.7
44.1
FIGURE 2.56
EBIT AND HARVEST FINNMARK
Harvest (tonnes GWT)
EBIT/kg (NOK)
35 000
30 000
25 000
20 000
15 000
10 000
5 000
0
Harvest (tonnes GWT)
EBIT/kg (NOK)
25
20
15
10
5
0
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I TA BL E GR O W T H
F INNM A R K
OP E R AT I ON A L R E SULT S
A total of 26 919 tonnes was harvested in 2020, a decrease of
the reduced survival rate also impacted our feed conversion ratio.
17% compared to the 32 362 tonnes harvested in 2019. We had an
We are working to improve survival rates through both general
original harvest estimate of 38 000 tonnes in 2020. The reduction
and targeted health and welfare measures. In Finnmark, colder
was due to low seawater temperatures during the winter and
sea temperatures in general can cause winter ulcers to occur, and
spring of 2020, which had impacted growth, while challenges with
can lead to increased mortality and reduced quality at harvest.
winter ulcers led to early harvesting. Later in the year, four of our
The outbreak during the winter of 2019/2020 was severe. We have
sites suffered outbreaks of Infectious Salmon Anemia (ISA), a virus
investigated the reason for both the winter ulcer outbreak and
that can cause high mortality. However, also fish at nearby sites,
the ISA outbreak, though our analysis is inconclusive. Efforts to
within a defined zone, must be treated according to ISA harvest
ensure a more robust fish, includes change of feed ingredients and
regulations. This also impacted our harvest to some extent.
changes in our vaccination process. Smolt transferred to the sea
Revenues amounted to NOK 1 389 million, a decrease of 23%
feed ingredients In general, good results from vaccines and efforts
compared to NOK 1 815 million in 2019. The average spot price in
to ensure robust fish health have eliminated the need of antibiotics,
2020 was NOK 53.7 per kg, compared to NOK 57.2 per kg in 2019.
which have not been used in Finnmark for several years.
in spring 2021 will be vaccinated against ISA. We are also changing
We achieved an average price of NOK 51.6 per kg in 2020. Although
we sold 41% of the year’s volume under fixed-price contracts, our
Finnmark has low sea lice levels throughout the year. Generally,
price achievement was significantly impacted by a superior share
lower seawater temperatures in the region are an advantage,
of 69%, which was due to quality downgrades related to ISA and
and the interconnectivity between the sites remains low. We use
winter ulcers. The number of claims, however, were low and stable
targeted preventive methods such as sea lice skirts and cleaner
throughout the year, and mainly related to melanin and texture.
fish to ensure that the sea lice level is low. Despite a stable sea
lice level, sea lice treatments have been carried out to maintain
Our freshwater production at both our own facility at Adamselv
low sea lice pressure. Although we avoid using hydrogen peroxide
and at the jointly-owned Nordnorsk Smolt was good in 2020. We
whenever possible, it was used at two sites in 2020. We have not
transferred a total of 10.1 million smolt with an average weight of
performed more bath or feed treatments in 2020 than in 2019, but
190 grams to the sea in 2020. The freshwater survival rate from
we have treated larger size fish.
our own facility improved from 87% in 2019 to 89% in 2020.
Due to continued focus on escape prevention, we did not have any
The seawater production in 2020 was impacted by issues related to
our impact on local wildlife. In 2020, 6 birds got caught in our nets.
escape incidents in 2020. We also work on measures to minimize
winter ulcers and ISA. The farming cost was NOK 44.1 per kg in 2020,
up from NOK 37.7 per kg in 2019. The increase was mainly due to
the reduced volume harvested, but was also significantly impacted
by added wellboat costs and external harvesting related to culling
of ISA-infected fish. We do not have permission to perform sanitary
harvesting at our own plant, and found it challenging to secure
harvesting capacity at external processing plants. Winter ulcers
and salmon with reduced health also impacted our 12-month
rolling survival rate, which decreased from 96% in 2019 to 92%
in 2020. The reduced survival rate had a cost (cost recognized as
abnormal mortality in the income statement) of NOK 37.5 million
in 2020 (NOK 1.4 per kg), compared to NOK 15.1 million in 2019
(NOK 0.5 per kg). The issues related to winter ulcers and ISA, and
P R OF I TA BL E GR O W T H
F INNM A R K
FIGURE 2.57
SURVIVAL RATE AT SE A IN FINNMARK, ROLLING 12
MONTHS
FIGURE 2.58
MAIN CAUSES FOR REDUCED SURVIVAL IN SE AWATER IN
FINNMARK IN 2020
100%
95%
90%
85%
80%
75%
MAIN CAUSE
NUMBER OF FISH
TONNES OF FISH
Target: 93%
Infectious
Bacterial
Virus
Parasite
Non-Infectious
Life cycle
Treatments
Predators
583 036
139 673
158 630
931 986
22 566
1 315
1 388
508
377
1 199
64
2
We report diseases, mortality, and other fish health indicators
to the Norwegian authorities on a weekly basis. This is publicly
available information, please see Barentswatch.
2016
2017
2018
2019
2020
FIGURE 2.59
SE A LICE LEVELS (ADULT FEMALES) IN FINNMARK
0.5
0.4
0.3
0.2
0.1
0.0
2020
2019
2018
2017
0.5 Limit of adult female sea lice per fish per site
0.25 Limit of adult female sea lice per fish per site on green licenses
0.2 Limit when wild salmon smolt migrate from the rivers and pass the salmon farms
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
We report sea lice levels and sea lice treatments to the Directorate of Fisheries on a weekly basis. This is publicly available
information, please see Barentswatch.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I TA BL E GR O W T H
BR I T I S H C OL UMBI A
BRITISH COLUMBIA
P R OF I TA BL E GR O W T H
BR I T I S H C OL UMBI A
SUSTAINABILITY KPIs
PILLAR
KPI
TARGET
2016
2017
2018
2019
2020
Harvest volume (tonnes GWT)
15 000 tonnes in 2021
10 715
9 600
16 632
14 120
21 181
PROFIT &
INNOVATION
HEALTHY
OCEAN
EBIT / kg (NOK)
Farming cost per kg (CAD)
CAD 7/kg in 2022
ASC certification *
All sites by 2021
Survival rate in freshwater
Survival rate at sea
93% by 2022
Cost of reduced survival
(NOK 1 000)
Use of antibiotics
(g per tonne LWE) **
7.5
7.7
n/a
81%
90%
12.5
17.5
7.4
n/a
81%
93%
7.4
n/a
83%
88%
5.2
8.3
n/a
63%
88%
-0.4
8.0
11
78%
90%
46 372
17 395
88 454
73 327
66 082
No use of antibiotics
126.93
18.30
151.26
87.00
62.32
Use of hydrogen peroxide
(kg per tonne LWE) **/ ***
Minimize use of pharmaceutical
treatments
0.00
9.17
5.83
6.01
46.62
Sea lice treatments - in feed
(g per tonne LWE) **
Minimize use of pharmaceutical
treatments
0.28
0.14
0.32
0.52
0.22
Sea lice treatments - in bath
(g per tonne LWE) **
Minimize use of pharmaceutical
treatments
0.00
0.00
0.00
0.00
0.00
Escape incidents (# of fish)
Zero escape incidents
Dead birds
Minimize impact on wildlife
Dead marine mammals
Minimize impact on wildlife
SUSTAINABLE
FOOD
Carbon emissions
(kgCO2e per tonne GWT)
35% reduction (from 2018)
in total emissions by 2030
Scope 1 + 2 location based
Scope 3
0
n/a
n/a
n/a
n/a
0
0
0
0
0
0
0
14
0
0
12
1
702
n/a
597
n/a
1 101
769
n/a
1 294
High quality product
93% superior share
76%
81%
84%
86%
86%
Biological feed conversion ratio
(bFCR)
Economic feed conversion ratio
(eFCR)
1.35
1.20
1.23
1.25
1.23
1.67
1.29
1.54
1.41
1.43
PEOPLE
Employees
110
150
148
171
174
Absence rate
Below 4.5%
1.6%
0.9%
1.8%
2.0%
6.8%
Lost time incident rate
Turnover rate
LOCAL
COMMUNITIES
Local procurement
72
n/a
n/a
16
n/a
n/a
38
n/a
35
n/a
36
20%
n/a
83%
83%
* Number of sites
** Amount of active pharmaceutical ingredients (APIs) used (in gr or kg) per tonne of fish produced (LWE).
n/a: Data not available.
*** The Government of Canada - Department of Fisheries and Oceans Canada (DFO) has defined that the Canadian industry shall calculate the API of hydrogen peroxide from
Paramove 50 using the formula 1 L (Paramove 50) * 1.15 (density) * 0.45 (concentration) = 1 kg H2O2. The method differs from the one used in the UK and Norway, which is 1 L
(Paramove 50) * 1.19 (density) * 0.49 (concentration) = 1 kg H2O2. The reported figures were calculated by using the Canadian formula.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
BR I T I S H C OL UMBI A
P R OF I TA BL E GR O W T H
GRIEG SEAFOOD
BRITISH COLUMBIA
Grieg Seafood BC Ltd farms salmon on the east and west sides of
Vancouver Island, and along the Sunshine Coast north of Vancouver.
The company has 20 seawater licenses and one license for land-based
production of smolt. We do not process our own salmon in BC.
OP E R AT I ON A L P R IOR I T IE S
Grieg Seafood BC aims to achieve 100% ASC certification by the
The federal regulator Fisheries, Oceans and Canadian Coast has
end of 2021. At the end of 2020, a total of 11 sites were certified,
announced that it will not renew licenses in the Discovery Islands
corresponding to 59% of net production. Obtaining ASC certification
farming area after 30 June 2022. This is not one of our main
is an important signal that our salmon is a responsible choice,
farming areas, but we have one farm there. We have the capacity to
because ASC has strict requirements with respect to minimizing
move this production to other farms, and production plans will not
fish farms’ impact on the natural environment and supporting
be impacted. Salmon farming companies in BC, including Grieg
local communities.
Seafood BC, have asked for a judicial review of the Government’s
decision process to allow us to better understand the implications.
Access to high-quality smolt is key to ensuring sustainable
production growth. Grieg Seafood BC will increase smolt capacity
Harmful Algae Blooms (HAB) and low oxygen events represent
from 500 tonnes to 900 tonnes, with the first smolt transfer from
significant biological risks in BC. Algae movements and oxygen
our the Gold River smolt facility going to sea farms scheduled for
levels are continuously monitored and analyzed using high-grade
the spring of 2022.
real-time in pen sensors, and machine learning with predictive
environmental data software. In addition, aeration systems have
Our main farming areas in BC are operated under agreements
been installed to enable feeding also during challenging situations.
with the First Nations in those areas. Our relations with the
Mortality rates are decreasing, but are still too high. We expect our
Mowachaht Muchalaht, Tlowitsis and Ehattesaht Chinehkint First
algae mitigation and digital monitoring efforts to increase survival
Nations are good, and are very important to us. The United Nations
rates and harvest volumes, and reduce costs going forward. This
Declarations on the Rights of Indigenous Peoples (UNDRIP) is
will enable us to reach our cost target of CAD 7 per kg, which we
under implementation by the BC provincial government. This
expect to achieve in 2022. We expect to harvest 15 000 tonnes in
is part of a process of reconciliation including the Government,
2021, increasing to 35 000 tonnes in 2025.
businesses and First Nations. We support this process. We work
to get better at operating with respect for the culture of our First
Nations partners in every way, to deepen our understanding of
each individual Nation and to provide shared opportunities, based
on Truth & Reconciliation Commission: Call to Action #92. Read
more about our journey of reconciliation in BC here.
P R OF I TA BL E GR O W T H
BR I T I S H C OL UMBI A
21 181
TONNES GWT HARVESTED
-0.4
EBIT/KG (NOK)
FIGURE 2.60
RESULTS FOR BRITISH COLUMBIA
BRITISH COLUMBIA
Harvest (tonnes GWT)
Revenue (NOK million)
EBIT (NOK million)
EBIT / kg (NOK)
Farming cost / kg (NOK)
Farming cost / kg (CAD)
2016
10 715
611.2
80.5
7.5
48.8
7.7
2017
9 600
580.3
120.2
12.5
49.8
7.4
2018
2019
2020
16 632
14 120
21 181
1 075.3
861.4
1 194.7
290.9
17.5
50.0
7.4
73.3
5.2
55.3
8.3
-7.4
-0.4
56.1
8.0
FIGURE 2.61
EBIT AND HARVEST BRITISH
COLUMBIA
Harvest (tonnes GWT)
EBIT/kg (NOK)
25 000
20 000
15 000
10 000
5 000
0
Harvest (tonnes GWT)
EBIT/kg (NOK)
20
15
10
5
0
-5
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
HEALTHY OCEAN
P R OF I TA BL E GR O W T H
BR I T I S H C OL UMBI A
OP E R AT I ON A L R E SULT S
A total of 21 181 tonnes was harvested in 2020, an increase of
During 2020, we reduced the use of antibiotics, which had been for
50% compared to the 14 120 tonnes harvested in 2019. Harvesting
the treatment of Yellowmouth disease, to safeguard the welfare of
volumes vary significantly every other year in BC due to local
the fish (the antibiotic used was Florfenicol). Our use of antibiotics
production region arrangements. We had an original harvest
is too high, and we are installing infrastructure that will allow
estimate of 20 000 tonnes in 2020, which was upgraded to 22 000
us to lower water temperatures and salinities to help limit the
tonnes during the year due to the positive effects of our algae
transmission of diseases. We also pursue non-therapeutic means
mitigation and digital monitoring efforts.
to manage disease, such as vaccines and a healthy diet. Our post-
smolt strategy will enable us to have better control of the fish’s
Revenues totaled NOK 1 195 million, an increase of 39% compared
environment for a longer period. It will also make the fish more
to NOK 861 million in 2019. Despite a challenging market impacted
robust when they are transferred to sea, and a shorter period
by Covid-19 measures, we achieved a price of NOK 56.4 per kg in
at sea will reduce exposure to biological risks. This in turn will
2020, compared to NOK 61.0 per kg in 2019. Good average weight
reduce the risk of disease outbreaks and the need for antibiotics.
at harvest and a stable superior share contributed to the price
achievement. The share of superior quality has been rising in
BC is heavily influenced by sea lice pressure from wild salmon each
recent years, and the main cause of downgrading in 2020 related
autumn, when the wild salmon pass our farms on their way to the
to biological issues. Claims during the year were mainly related to
river to spawn. Here, unlike Norway, the wild salmon population
pigmentation and texture.
greatly outnumbers the farmed salmon population. We are testing
preventative methods such as sea lice skirts and tarps to keep the
Our freshwater production was good in 2020. We transferred a
sea lice level stable. When the sea lice level increases, we carry
total of 5.4 million smolt with an average weight of 117 grams to
out the type of treatment we consider most appropriate. Hydrogen
the sea in 2020. The freshwater survival rate improved from 63% in
peroxide has been applied regularly throughout the year to reduce
2019 to 78% in 2020. In 2019 we lost a significant number of fry due
the sea lice pressure. Use of feed treatments has decreased since
to an unusual incident of bromide exposure, while in 2020 there
2019, and sea lice bath treatments distributed were minimized
was a power outage which lead to loss of fish. The survival rate is
in 2020. The addition of the new wellboat (Ronja Islander) was
also impacted by culling of eggs due to lower quality.
implemented in the beginning of 2020 and successfully treated
with 100% sea lice recapture systems.
Seawater production has been good in 2020, despite somewhat
challenging biological conditions due to low oxygen events during
Due to continued focus on escape prevention, we did not have any
the summer, which negatively affected feeding. Due to our algae
escape incidents in 2020. We also work on measures to minimize
mitigation system, we managed to limit the impact, and the
our impact on local wildlife. In 2020, 12 birds and one mammal got
12-month survival rate increased from 88% in 2019 to 90% in 2020.
caught in our nets. We are not content with reporting any dead
The survival rate was impacted by incidents of low oxygen levels
animals, and will continue our effort to reduce this number.
and plankton blooms in previous years, but is steadily increasing
due to positive results from our algae mitigation system, which
stabilizes the survival rate in periods of challenging environmental
conditions. The increased survival rate contributed to a decrease
in our farming cost, which ended at CAD 8.0 (NOK 56.1) per kg
in 2020 compared to CAD 8.3 (NOK 55.3) per kg in 2019. Reduced
survival had a cost (cost recognized as abnormal mortality in the
income statement) of NOK 66.1 million in 2020 (NOK 3.1, or CAD
0.4 per kg), compared to NOK 73.3 million in 2019 (CAD 0.8 per kg).
P R OF I TA BL E GR O W T H
BR I T I S H C OL UMBI A
FIGURE 2.62
SURVIVAL RATE AT SE A IN BRITISH COLUMBIA,
ROLLING 12 MONTHS
FIGURE 2.63
MAIN CAUSES FOR REDUCED SURVIVAL IN SE AWATER IN
BRITISH COLUMBIA IN 2020
MAIN CAUSE
NUMBER OF FISH
TONNES OF FISH
Target: 93%
Infectious
Gill infections
Bacterial
Other infectious
Non-Infectious
Life cycle
Treatments
Environment
53 799
111 254
1 469
403 997
311 285
307 982
206
136
7
920
830
468
100%
95%
90%
85%
80%
75%
2016
2017
2018
2019
2020
FIGURE 2.64
SE A LICE LEVELS (MOTILE SE A LICE ) IN BRITISH COLUMBIA
2020
2019
2018
2017
8.0
6.0
4.0
2.0
0.0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I TA BL E GR O W T H
NE W F OUNDL A ND
NEWFOUNDLAND
P R OF I TA BL E GR O W T H
NE W F OUNDL A ND
Grieg Seafood Newfoundland is a greenfield project located in
Placentia Bay in Newfoundland. At year-end 2020, we have eight
seawater licenses and one freshwater license. Additional seawater
licenses have been applied for.
OP P O R T UNI T Y
S TAT U S
The Newfoundland project includes long-term, exclusive farming
The project
includes a high-end freshwater and saltwater
rights to the Placentia Bay area. The area is highly isolated from
Recirculating Aquaculture System (RAS) facility in Marystown
other salmon farmers in the region, and long distances and
Marine Industrial Park, close to Placentia Bay. The RAS facility
low interconnectivity between sites lower the risk of biological
currently under construction includes a hatchery, a nursery and a
contamination. The sites and production areas chosen in Placentia
smolt unit. In the third quarter 2020, it was decided to slow down
Bay are at least 100 meters deep, have good currents and optimal
the pace of investment to lower financial exposure in the current
oxygen levels. There are no known algae issues in the area. Our
project phase, due to market uncertainty caused by the Covid-19
seawater sites have favorable biological conditions for salmon
pandemic, combined with changes in the project’s complexity.
farming, with environmental conditions like northern Norway.
Although the construction of an additional post-smolt unit was
The sites are exposed to high seas and will be equipped with
deferred, the original production capacity has been maintained.
state-of-the-art technology and systems for harsh environments.
The RAS facility is dimensioned to serve all future post-smolt
40-meter-deep pens and underwater feeding will allow the fish to
modules, and has adequate capacity to ensure necessary add-
stay below layers of super-chilled or potentially warm water.
on growth. We are committed and on track to develop the project
according to milestones outlined in the permits granted by the
The US market is the world’s largest and fastest growing market
authorities.
for Atlantic salmon, but only a third of US demand is currently met
by North American production. We already have a position in this
Our seawater licenses in Newfoundland require use of sterile
market through our operations in British Columbia, where we have
female salmon in order to eliminate the risk of genetic pollution
obtained significant sales and market experience. With proximity
of wild Atlantic salmon in case of escape. We see this as an
to important markets on the US East Coast, the Newfoundland
opportunity to minimize our impact on the environment. The first
region significantly strengthens our US market exposure and
batch of eggs was delivered to our freshwater facility in July 2020.
opens for synergies with existing operations.
We lost some of the fry during first feeding in the autumn of 2020,
The project has a long-term annual harvest potential of 45 000
process. We have started to install equipment at our seawater
tonnes. By using cutting-edge technologies at all stages of the
sites, and expect to transfer smolt to the sea in summer 2021, with
production process, our Newfoundland region will strengthen our
harvest starting in 2022. By 2025, we expect to reach an annual
position as a global leader in sustainable salmon farming.
harvest volume of 15 000 tonnes.
which was to be expected as part of the production unit’s testing
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I T & INNO VAT ION
GR IE G S E A F OOD ' S S H A R E S
GRIEG SEAFOOD’S
SHARES
We aim to provide an attractive return
to our shareholders and contribute
to the correct pricing of our shares.
To achieve this, we are proactive in
disclosing reliable information about
our operations.
OUR P R INCIP LE S
• Our ambition is to create shareholder value and deliver
competitive returns relative
to comparable
investment
alternatives.
• We engage with the investor community in an open, transparent
and continuous dialogue. Building trust and awareness is
critical to ensure that the information disclosed to the financial
market, including current and potential investors, analysts
and other stakeholders, provides the best possible basis for a
correct valuation of Grieg Seafood.
OUR TAR GE T
Dividend
30-40% of the Group's net profit after tax
before fair value adjustments
FIGURE 2.65
GEOGRAPHICAL OWNERSHIP IN 2013
FIGURE 2.66
GEOGRAPHICAL OWNERSHIP IN 2020
USA
2%
EU
7%
UK
2%
USA
4%
EU
15%
UK
3%
Norway
88%
Norway
78%
P R OF I T & INNO VAT ION
GR IE G S E A F OOD ' S S H A R E S
OU R SH AR E S AN D SH AR EHOLDER S
T HE R E T UR N ON OUR SH AR E S
Our shares are listed at Oslo Stock Exchange/Euronext. Grieg
Our ambition is to create shareholder value and deliver competitive
Seafood was listed on the Oslo Stock Exchange on 21 June 2007,
returns relative to comparable investment alternatives. The return
under the ticker GSF. We have only one class of shares, and all
on our shares derives from a combination of the dividend paid and
shares carry the same rights. As of 31 December 2020, the
share price appreciation.
Company had 112 275 548 shares outstanding, at a nominal value
of NOK 4.00 per share (excluding treasury shares).
Grieg Seafood’s share price decreased by -39.4% in 2020. The
closing price at 31 December 2020 was NOK 85.0, compared to
As of 31 December 2020, we had 12 436 shareholders, with our
NOK 140.3 at year-end 2019. No dividend has been paid out in 2020
ten largest investors holding 67.2% of our shares. The number
due to the Covid-19 pandemic. However, from 2015 to 2019 we have
of shareholders increased during the year, from 4 968 at year-
had a dividend yield in the range of 1.6 - 5.5%. Over the preceding
end 2019. Norwegian-based shareholders own the majority of
years, we have had a consistent pay-out ratio. In the same period,
the Company’s shares, with Per Grieg Jr. and the Grieg family
by comparison, the Oslo Stock Exchange Total Return Index (OBX)
controlling 53.2% of the outstanding shares as of 31 December
and the Oslo Stock Exchange Seafood Index (OBSFX) produced
2020. A further 3.8% was controlled by the Norwegian National
a return of 1.8% and -3.8% respectively. The total accumulated
Insurance Fund (Folketrygdfondet) and 3.7% by OM Holding AS at
dividend per share since our initial public offering in 2007 is NOK
year-end 2020. Grieg Seafood ASA held a total of 1 171 494 treasury
15.6.
shares as of 31 December 2020. For a detailed breakdown of our 20
largest shareholders, please see Note 18 in the Group Accounts.
Over the past five years and until the outbreak of the Covid-19
pandemic in the first quarter of 2020, the salmon farming industry
Our shareholders reside in all parts of the world, with a clear
has experienced a tremendous increase in profitability and market
concentration in Europe. Grieg Seafood has experienced an
capitalization. Driven by high demand and increased prices, the
upsurge in interest from investors, and we have doubled the
Grieg Seafood share has yielded a long-term return of 228% over
percentage of non-Norwegian shareholders since 2013. Excluding
the past five years, compared to 156% for the OBSFX, and 61%
our majority shareholder, the Grieg family, which is based in
for the OBX. Since the release of shares following the exercise
Bergen, Norway, most of the shareholders come from the EU, the
of forward contracts in 2016 (see below), the return on the Grieg
UK or the USA.
Seafood share has substantially outperformed the Seafood Index.
T HE LI QUID I T Y OF OU R SH AR E S
DI V IDEND AND DI V IDEND P OLIC Y
Since May 2016, the liquidity of our shares has increased
We aim to provide our shareholders with a competitive return on
significantly compared to previous years. This development was
invested capital, through the payment of dividends in addition to
triggered by Mowi ASA realizing a set of old forward contracts,
share price appreciation. Dividends will be evaluated twice a year.
acquiring nearly 29 million shares in Grieg Seafood ASA, and
The dividend payout should amount to 30-40% of the Group's
immediately selling them in the market. Following this injection
net profit after tax, before fair value adjustments on biological
of shares into the open market, the Grieg Seafood share has been
assets. Dividends declared and paid may be adjusted to satisfy the
traded at a much higher volume. In 2020, a total of 100 million
targeted level of debt.
shares were traded, with a median of 317 106 shares per trading
day.
Due to the increased volatility and uncertainty caused by the
Covid-19 situation, combined with an extensive investment plan,
the Board has decided to postpone the ordinary dividend for 2020.
Our last dividend distribution was in 2019, when we had a pay-out
ratio on profit after tax of 55%.
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P R OF I T & INNO VAT ION
FIGURE 2.67
FIVE YE AR REL ATIVE SHARE PERFORMANCE
30-days average volume
GSF
OBSFX
OBX
GR IE G S E A F OOD ' S S H A R E S
450%
400%
350%
300%
250%
200%
150%
100%
50%
0%
-50%
R E LAT IV E TO B ASE
MILLIONS
3.0
2.5
2.0
1.5
1.0
0.5
0.0
31.12.15
31.12.16
31.12.17
31.12.18
31.12.19
31.12.20
Last trading day of 2015 set as base for relative performance of GSF and benchmarks
Source GSF: https://live.euronext.com/en/product/equities/no0010365521-xosl/grieg-seafood/gsf
Source OBSFX: https://live.euronext.com/en/product/indices/no0010760663-xosl/obsfx-seafood-gr/obsfx
Source OBX: https://live.euronext.com/en/product/indices/no0000000021-xosl/obx-gr/obx
FIGURE 2.68
DIVIDEND PAID
NOK million
500
400
300
200
100
0
Dividend paid
Dividend paid per share
NOK per share
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
P R OF I T & INNO VAT ION
GR IE G S E A F OOD ' S S H A R E S
KEY FIGURES
2016
2017
2018
2019
2020
Number of shares at year-end (incl. own shares)
111 662 000
111 662 000
111 662 000
111 662 000
113 447 042
Number of shares traded
Number of shareholders
167 281 077
143 109 533
116 144 510
72 001 397
99 831 798
4 390
4 433
5 124
4 968
12 436
Total value of shares traded per day (NOK million)
Average number of shares traded per day
Median number of shares traded per day
Total market value OSE (NOK 1 000)
31.64
661 190
317 820
40.68
570 158
486 933
42.07
466 444
411 341
33.70
289 162
240 801
37.5
396 158
317 106
9 122 785
8 067 580
11 423 023
15 666 178
9 642 999
Share price 31.12 (NOK)
Average share price (NOK)
Lowest closing price (NOK)
Highest closing price (NOK)
Price/Earnings ratio*
Price/Book ratio**
Pay-out ratio (%)***
Enterprise value (EV)****/Capital employed (CE)*****
Enterprise value (EV)****/EBITDA
Enterprise value (EV)****/EBIT before fair value adjustments
Dividend yield (%)
Return on Capital Employed (ROCE)
81.7
52.7
26.7
84.5
11.38
2.81
-556%
2.64
7.77
8.92
1.8 %
33%
72.3
71.5
58.0
85.1
12.26
2.41
56%
2.27
8.81
10.77
5.5 %
24%
102.3
92.2
66.2
131.9
14.61
2.95
68%
2.71
10.14
12.31
3.9 %
22%
140.3
118.0
96.8
146.8
19.57
3.79
55%
3.05
11.93
16.43
2.9 %
19%
85.0
99.1
66.3
144.9
-40.36
2.18
0%
1.67
26.81
443.94
0.0%
3%
* P/E is calculated as Profit after tax, excluding non-controlling interest and fair value adjustments, divided on total number of shares. **P/B is calculated as Profit after tax, excluding
non-controlling interest and fair value adjustments, divided on equity to controlling interest. *** Pay-out ratio is calculated as the dividend paid out in a year divided by the earnings
before fair value in the prior accounting year. **** EV is calculated as market capitalization excl. treasury shares plus NIBD. ***** CE is calculated as NIBD plus equity net of booked fair
value adjustment of biomass net of tax.
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P R OF I T & INNO VAT ION
A N A LY T IC A L INF OR M AT ION
ANALYTICAL INFORMATION AND
ALTERNATIVE PERFORMANCE
MEASURES
Our ambition is to be open and transparent to all our stakeholders. This
is the only way we can earn their trust. By sharing reliable and relevant
information about our operations and the salmon farming industry, we
aim to contribute to an improved understanding and correct valuation of
our shares.
P R OF I T & INNO VAT ION
A N A LY T IC A L INF OR M AT ION
VA L U E C R E AT ION
VAL UE DR I V ER S
Creating shareholder value is a prerequisite for company growth
With ROCE as our starting point, we break down our performance
and survival. Return on Capital Employed (ROCE) is our ultimate
based on the profitability of our product (EBIT per kg before fair
financial performance indicator. We also believe that sustainability
value adjustment) and developments in invested capital (fixed
and financial results go hand in hand. We need good financial
assets and working capital). We have a long-term goal of delivering
results to develop our operations sustainably. However, we also
a ROCE of at least 12% per year. Our EBIT performance is driven
need sustainable operations to safeguard our long-term financial
by a multitude of operational factors that affect both revenues
results and performance. This lays the foundation for our strategy
and costs. Producing salmon takes two to three years from roe
– to create stakeholder value through the sustainable production
to harvest, and while the cost of a harvested fish accumulates
of Atlantic salmon at the lowest possible cost.
through the production period, it does not impact the profit and
loss statement (apart from through fair value adjustment) before
the fish is harvested. Although EBIT per kg (before fair value
adjustment) is an important external benchmark for our regions,
our operational focus is not on the cost of the harvested fish, but
on the development of the cost drivers affecting our production
volume and the cost of salmon to be harvested in the future.
FIGURE 2.69
ROCE AND EBIT/KG
ROCE %
40%
30%
20%
10%
0%
Return on Capital Employed (ROCE)
EBIT before fair value (NOK/kg)
NOK/kg
35
30
25
20
15
10
5
0
2016
2017
2018
2019
2020
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A N A LY T IC A L INF OR M AT ION
P R OF I T & INNO VAT ION
R E V E NUE DR I V ER S
HARVESTED VOLUME
Our harvested volume depends on the number of smolt transferred
QUALITY
Diseases, winter ulcers and other biological issues may affect the
to the sea, and how well that fish performs in terms of growth and
quality of our product. We categorize the quality of our harvested
survival. Fish growth and survival rates at sea can be affected by
salmon as superior, ordinary or production grade. "Superior"
innumerable factors, of which are critically important:
quality salmon has a positive overall impression with good meat
• Seawater temperatures and seawater conditions
quality and no external damage or faults. Downgraded salmon
• Weight and robustness of the fish when transferred to sea
has from minor to significant external and/or internal faults or
• Diseases, health issues, and sea lice
damage, and therefore commands a lower price. In Norway,
By effectively preventing and combatting sea lice and health
downgraded salmon is priced according to standard discount
issues, and by understanding our salmon’s behavior, we work
rates. For salmon classified as "ordinary", the standard discount
continuously to improve survival and growth rates.
is NOK 1.5-2.0 per kg GWT. For salmon classified as "production
grade", the discount is NOK 5.0-15.0 per kg GWT, depending on
Our total production volumes are limited by our farming licenses,
the extent of the impairment. In other countries, price deductions
which impose maximum allowed biomass (MAB) restrictions on
compared to "superior" salmon are less standardized, but the
the volume of fish we can have at sea at any given time. In British
same principles apply. As other companies in the salmon farming
Columbia, the limitations are imposed only on a site-by-site basis,
industry may use other quality categories and criteria for grading
while the Norwegian system also introduces limitations on defined
their harvested salmon, the quality share may not be comparable
areas and per company. Effective utilization of farming licenses,
between the companies.
equipment and personnel requires sophisticated and detailed
planning of stocking, feeding, and harvesting activities across sites
and regions.
FIGURE 2.70
ACHIEVED PRICE (NOK/KG)
Rogaland
Finnmark
British Columbia
NQSALMON
80
70
60
50
40
30
2016
2017
2018
2019
2020
P R OF I T & INNO VAT ION
A N A LY T IC A L INF OR M AT ION
C O S T DR I V ER S
PRICES
Our main product, whole gutted salmon, is largely traded as a
Cost directly related to production and harvest of salmon comprise
commodity, and the prices achieved largely reflect a general
our farming cost. The inputs needed to raise a live salmon from
market price. The prices we achieve will, to some extent, deviate
roe to harvest size accounts for the bulk of our farming cost. In
from the spot market price, based on quality, sales contracts,
addition, cost related to harvest and processing is included in
and our ability to place our salmon effectively in the market. We
our farming cost. We track our performance, both internally and
measure our price achievement relative to the relevant observed
externally, through the farming cost per kg of harvested salmon.
market price or reference price.
Most important is tracking the underlying drivers that influence
the cost of salmon to be harvested in the future, such as survival,
There are several reference prices for salmon. In Norway, Fish
feeding and growth. Our regional EBIT is calculated as sales
Pool provides historic price information, as well as future salmon
revenue deducted by the farming cost.
derivative prices FCA Oslo as part of the NASDAQ Salmon Index
(NQSALMON). In the USA, Urner Barry provides reference prices
for North American salmon in Seattle and Chilean salmon in
Miami. Market prices are correlated across regions, but significant
short-term variations between markets are not uncommon.
FIGURE 2.71
SURVIVAL RATE AT SE A
Rogaland
Finnmark
British Columbia
Target
100%
90%
80%
2016
2017
2018
2019
2020
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P R OF I T & INNO VAT ION
A N A LY T IC A L INF OR M AT ION
SALMON SURVIVAL
A vast number of factors can affect salmon survival rates, such as
SALMON GROWTH
Our profitability is also influenced by how quickly our salmon
diseases, algal blooms, water conditions, predation, and sea lice
grow and how efficiently feed is converted into weight gain (feed
treatments. In the industry as a whole, approximately one out of
conversion rate). Water temperatures, biological conditions,
five of the smolt transferred is lost during the seawater growth
farming practices and fish survival are key drivers for salmon
phase. The number of fish lost per generation varies immensely
growth. Higher seawater temperatures increase growth, but
across locations and regions. In our financial statements, we
also increase biological risks in the form of diseases, sea lice,
expense mortality exceeding a threshold level, deemed to be
and algal blooms. This may in turn result in lost feeding days,
extraordinary, either by month or for the generation to date. Costs
lower growth and reduced survival. Through the introduction of
associated with "normal" mortality are retained in the book value
improved sensor technology, use of advanced imaging analysis
of the remaining inventory, contributing to an increased cost when
and other technologies, we continuously improve our ability to
the fish are harvested.
make informed decisions about feeding and protective measures.
Efficient feed conversion is crucial to meeting our future cost
targets. Feed accounted for 42% of our total cost per kg harvested
fish in 2020. Strong and healthy fish, combined with high feed
quality and good feeding practices, is key to achieving a low
production cost. We measure our farming performance through
feed conversion rates (amount of fish feed used to produce one
kg of live salmon) and relative growth indices (achieved growth
compared to own and feed supplier expectations). Salmon growth,
survival rates and the economic feed conversion rate (EFCR*), are
strongly linked to fish health, disease and sea lice. Treatments,
fasting, and reduced appetite negatively impact growth, reduce
our harvested volumes, and increase the cost per kg of harvested
fish.
*EFCR describes the amount of feed required to produce one kilo of farmed
salmon. It is calculated as the total weight of feed divided by net production
(harvested weight).
SENSI T I V I T Y AN A LY S IS
The salmon farming industry might be volatile, due to both biological and market conditions. Below is a sensitivity analysis showing how our
EBIT is estimated to be impacted by changes in sales price, farming cost and eFCR.
Sensitivity analysis
Sales price (NOK/kg)
Effect on EBIT (NOK million)
Farming cost (NOK/kg)
Effect on EBIT (NOK million)
eFCR (feed/ kg production)
Effect on EBIT (NOK million)
Variables and EBIT effect
55.0
156
38.0
641
1.30
97
60.0
512
40.0
499
1.35
48
65.0
867
50.0
-213
1.40
-1
50.0
-200
35.0
855
1.25
146
P R OF I T & INNO VAT ION
A N A LY T IC A L INF OR M AT ION
FIGURE 2.72
ECONOMIC FEED CONVERSION RATE
Rogaland
Finnmark
British Columbia
Grieg Seafood Group
1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1.0
2016
2017
2018
2019
2020
FIGURE 2.73
FARMING COST
2016
2017
2018
2019
2020
0%
Feed cost
Admin
Depreciation
Smolt
Other
47%
5%
5%
13%
30%
31%
4%
5%
15%
33%
4%
5%
16%
5%
5%
14%
43%
43%
44%
42%
4%
6%
17%
32%
31%
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 02: TOWARDS A SUSTAINABLE FOOD SYSTEM
P R OF I T & INNO VAT ION
OUR S P E C I A L L IC E N S E S
OUR SPECIAL LICENSES
In Norway, we also have some farming licenses with
specific requirements.
LI C ENSE
DE S CR IP T I ON
S TAT U S
AIM
GREEN
LICENSES
EDUCATION
LICENSES
Green Licenses in Norway have stricter
environmental criteria. The sea lice limit
is half that of regular licenses, there are
stricter criteria for escape prevention
technologies, and the amount of medical
treatment permitted per generation is
limited.
Grieg Seafood has
eight green licenses in
Finnmark.
Maintain our green licenses
in Finnmark by adhering to
the environmental criteria.
Education licenses in Norway are given
to universities, colleges, or high schools
offering aquaculture-related courses
of study. Salmon farming companies
can lease education licenses from the
educational institution. Part of the
students’ training will then take place at
these salmon farms.
Grieg Seafood leases one
education license from
Nordkapp High School
in Finnmark, and one
education license from
Strand High School in
Rogaland.
Utilize our education
licenses in Finnmark and
Rogaland, while transferring
experience to students.
BROODSTOCK
LICENSES
The purpose is to produce roe and milt
from salmon with improved and/or
specific traits.
Grieg Seafood has three
broodstock licenses in
Erfjord in Rogaland.
Maintain our broodstock,
licenses and ensure we are
self-sufficient in salmon roe.
R&D LICENSES
The purpose is to encourage important
research projects that can bring the
Norwegian aquaculture industry
forward.
Grieg Seafood has three
R&D licenses in Rogaland,
two of which are operated
in cooperation with
Skretting.
Maintain R&D licenses to be
able to performing various
research projects.
P R OF I T & INNO VAT ION
OUR S P E C I A L L IC E N S E S
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P R OF I T & INNO VAT ION
A P M
KEY PERFORMANCE INDICATORS
AND ALTERNATIVE PERFORMANCE
MEASURES (APM)
We believe that our financial statements only partially reflect
consistently applied over time, with one exception: the calculation
the underlying performance of our operations. We are therefore
of net interest-bearing debt for covenant purposes. From the first
working continuously to develop key operational performance
quarter of 2016, we removed the non-controlling interest Bremnes
indicators and alternative performance measures that we believe
Fryseri AS's share of Ocean Quality AS’s bank deposits from the
better describe our performance. The APMs listed below have been
calculation. As of year-end 2020, we have sold all our shares in
Ocean Quality AS (see Note 5).
AP M
DE FINI T I ON AND
C AL CU L AT I ON
R E A S ON F OR AP P LYING
AP M
EBIT
= EBIT BEFORE FAIR
VALUE ADJUSTMENT OF
BIOLOGICAL ASSETS
Operating profit incl. amortization and
depreciation excl. fair value adjustment of
biological assets.
Unless otherwise specified, EBIT before
fair value adjustment of biological assets is
shortened to EBIT (earnings before interest and
taxes). This also applies to all key figures where
EBIT is a component, including:
EBIT margin (%)
EBIT/ kg GWT
ROCE
Operating profit before amortization and
depreciation excl. fair value adjustment of
biological assets.
Unless otherwise specified, EBITDA before
fair value adjustment of biological assets is
shortened to EBITDA. This also applies to all
key figures where EBITDA is a component,
including:
EBITDA margin (%)
NIBD/EBITDA
The equity ratio is calculated both with and
without consolidation of Ocean Quality Group.
The bank syndicate equity covenant definition is
exclusive of Ocean Quality. It covers only Grieg
Seafood companies both with regards to equity
and total liabilities, excluding effects of IFRS 16.
EBITDA
= EBITDA BEFORE FAIR
VALUE ADJUSTMENT OF
BIOLOGICAL ASSETS
EQUITY RATIO
EXCLUDING OCEAN
QUALITY
EBIT before fair value adjustment provides a
more informative result, as it does not consider
future gains or losses on fish not yet sold. The
fair value adjustment has a non-operational
nature and can affect the comparability of our
performance from period to period. EBIT before
fair value adjustment is generally considered
the standard industry measure for profitability.
EBITDA before fair value adjustment provides a
more informative result, as it does not consider
future gains or losses on fish not yet sold. The
fair value adjustment has a non-operational
nature and can affect the comparability of our
performance from period to period.
The equity ratio is applied to measure financial
solidity in accordance with the Group's covenant
requirements.
P R OF I T & INNO VAT ION
A P M
AP M
NIBD
ROCE
FARMING COST/KG
DE FINI T I ON AND
C AL CU L AT I ON
R E A S ON F OR AP P LYING
AP M
Net interest-bearing debt (NIBD) comprises
non-current and current debt to financial
institutions, after deducting cash and cash
equivalents.
NIBD is calculated in three ways:
1. For ROCE calculation: including all long-
term and current debt to credit institutions,
incl. IFRS 16 effect and factoring liabilities.
2. Including all long-term and current debt to
credit institutions incl. IFRS 16 effect, but
excl. factoring liabilities.
3. For covenant calculation as required by the
bank syndicate: as in method 2, but cash and
cash equivalents are reduced with an amount
corresponding to Bremnes Fryseri AS 40%
share of Ocean Quality AS bank deposits, and
lease liabilities (former IAS 17 operational
leases only) are excluded. This method is
used for calculation of NIBD/EBITDA.
Return on capital employed (ROCE) is calculated
using values before fair value adjustment of
biological assets and is calculated as follows:
ROCE for the year is calculated as the average
of the ROCE for each of the years four quarters.
Quarterly ROCE is calculated as quarterly EBIT
before fair value adjustment of biological assets
multiplied by four, to annualize the EBIT figure.
The annualized EBIT figure is divided by the sum
of NIBD plus equity before fair value adjustment
of biological assets.
The quarterly values for NIBD and equity are
calculated as Opening balance plus Ending
balance divided by 2. NIBD is calculated
according to method 1, described in the NIBD
section above.
Farming cost per kg is the farming cost directly
related to production and harvest of salmon,
divided by the applicable harvest volume. We
disclose our farming cost figures for year-to-
date and quarter-to-date, per region and Group
level.
NIBD/EBITDA is a measure of financial solidity
and is one of the covenants in our bank
agreement. When calculating NIBD/EBITDA,
NIBD is calculated according to method 2
and EBITDA is before fair value adjustment of
biological assets and consolidation of Ocean
Quality Group.
ROCE measures the return on invested capital.
Fair value adjustment of biological assets
is extracted, as this reflects future gains or
losses on fish not yet sold, which can affect the
comparability of performance from period to
period.
Each generation of salmon tie up net-working
capital (production cost recognized as biological
assets) for a considerable time, while the sales
prices in the markets we’re engaged in are
highly dependant on the prevailing spot prices.
We track and measure our farming cost level
for the Group as a whole, and per region level,
to evaluate our profitability and operational
performance.
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A C C OUN T S
OUR FINANCIAL
RESULTS
By always improving our operational excellence,
reflecting our holistic performance approach,
we are driving sustainable value creation.
B O A R D O F D I R E C T O R S ' R E P O R T
C O R P O R AT E G O V E R N A N C E
A N N U A L A C C O U N T S 2 0 2 0
A U D I T O R ' S R E P O R T
174
194
2 10
3 3 4
S E C UR E F IN A NC I A L C A PA C I T Y
P R E SEN TAT I ON OF T H E B O AR D OF DIR EC T OR S
Our Board of Directors will provide leadership to the Company and deliver shareholder
value over the long term.
Find the presentation of our Board of Directors here.
GR O UP M AN A GEME N T T E AM
Our management team is responsible for overseeing the Group’s day-to-day
operations and working to realize our vision, values and targets.
Find the presentation of our management team here.
S E C UR E F IN A NC I A L C A PA C I T Y
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTS
BOARD OF
DIRECTORS’ REPORT
HIGHLIGHTS 2020
The Covid-19 pandemic disrupted the salmon market, causing a significant shift in demand and lower prices in core
markets. Nevertheless, Grieg Seafood was able to maintain efficient operations throughout the year.
Based on the volume harvested in 2020, the change in price from 2019 to 2020 reduced EBIT by NOK -289 million.
Harvested volume of 86 847 tonnes (71 142 tonnes ex. Shetland), up 5% compared to 2019 (82 973). Although this was
the Group’s largest ever harvest, it fell short of the target of 100 000 tonnes, mainly due to biological issues.
EBIT per kg of NOK 3.3, compared to NOK 15.0 in 2019.
No dividend payout due to the volatility and uncertainty caused by the Covid-19 situation.
Satisfactory seawater production, but results impacted by a combination of sea lice treatments and cardiomyopathy
syndrome (CMS) Rogaland, and winter ulcers and infectious salmon anemia (ISA) in Finnmark.
Good production in British Columbia. Despite incidents of low oxygen levels and plankton blooms, the survival rate is
increasing due to positive results from the algae mitigation system.
Successful placement of a Green Bond of NOK 1.5 billion, rated as Medium Green by Cicero, to support the Group’s
sustainable growth strategy. At year-end, 38% of the Group’s financing was green.
Acquisition of a new region in Newfoundland, with exclusive fish farming rights, as part of the 2025 growth strategy.
Initiated a process to divest the Shetland assets, to focus operations on regions with the greatest potential for
profitable growth and the highest return on investment.
Dissolved the jointly-owned sales organization Ocean Quality and established an integrated sales and market
organization.
Changes in the operational set-up, with even greater attention paid to farming operations and sustainability.
Average smolt size is increasing due to post-smolt investments, with the highest average weight for the smolt in a
single batch transferred to the sea reaching more than 1 kg.
Continued focus on Aquaculture Stewardship Council) certification by the Aquaculture Stewardship Council (ASC), with
41% of net production certified at year-end.
Awarded rating of A- by the CDP for actions on both climate change and forest preservation.
Grieg Seafood is committed to driving change in their supply chain. In 2020, the Brazilian soy suppliers committed to
becoming 100% deforestation fee.
Grieg Seafood is preparing for competitiveness in a post-pandemic world, and is committed to leading the transition to
a sustainable global food system.
OUR FINANCIAL RESULTS GR IE G SE AF OOD’S V ISION AND AMBI T IONS
The Grieg Seafood Group is one of the world's leading salmon farmers. The Group has licenses for seawater
farming and land-based smolt production in Finnmark and Rogaland in Norway, British Columbia and
Newfoundland in Canada, and Shetland in the UK. In 2020, the Group harvested a total of 86 847 tonnes of
Atlantic salmon.
The Group was established in 1992, and over the years has grown into a leading industry player. The Group's
vision "Rooted in nature – farming the ocean for a better future", represents how the Group intends to
make a difference and what it aims to accomplish. It also encompasses the foundation for the Group's
operational development – a healthy ocean, sustainable food, profitable growth and innovation, good jobs
for everyone, and local value creation. With its 2025 strategy, the Group aims to harvest 130 000 tonnes in
2025 at a competitive cost level, and to evolve from purely a commodity supplier to an innovation partner
for selected customers. Sustainable farming practices are the foundation of Grieg Seafood’s operations.
Achieving the lowest possible environmental impact and the best possible fish welfare is both an ethical
responsibility and a prerequisite for long-term profitability. To achieve sustainable growth and improve
competitiveness, the Group focuses on reducing the time fish spend at sea, improving fish welfare, and
providing digital decision-making support to their farmers.
TARGETS AND ACHIEVEMENTS
The sustainability scoreboard is a set of key performance indicators for the Group´s five pillars - Healthy
ocean, Sustainable food, Profit & Innovation, People, and Local Communities, which is used to track the
operational performance of the Group.
Creating shareholder value is a prerequisite for growth and survival, and return on capital employed
(ROCE) is the Group´s ultimate performance measure. The sustainability drivers specified below drive the
financial results. The ROCE for 2020 ended at 3%, below the target of 12% per year, mainly impacted by
the salmon market prices combined with higher operational cost, and increased debt level to finance the
Group’s growth investments.
In 2020, the Group decided to sell its Shetland assets. In accordance with IFRS 5, these assets are classified
as held for sale/discontinued operations, and as such not included in the Group’s income statement or
cash flow statement. Unless otherwise explicitly mentioned, qualitative and quantitative information
refers to Grieg Seafood’s continued operations. As Grieg Seafood Newfoundland has not been operational
throughout 2020 and did not have production in seawater, it has not been included as a separate reporting
region in 2020. The operational results in this report focuses mainly on the performance of Grieg Seafood
Rogaland (Rogaland), Grieg Seafood Finnmark (Finnmark) and Grieg Seafood British Columbia (BC).
HARVESTED VOLUME
The Group’s ambition was to harvest 100 000 tonnes in 2020. This target was based on new sites, more
than 25 million smolt transferred to sea farms in 2019, increasing survival rates, and a good average
weight at harvest. In the end, the Group harvested 86 847 tonnes, or 71 142 tonnes excluding Shetland.
The shortfall was mainly due to extraordinary biological challenges in Rogaland, Finnmark, and Shetland.
British Columbia delivered 1 000 tonnes above estimates, due to the positive effects of its algae mitigation
and digital monitoring efforts.
The Group targets growth going forward, and aims to harvest at least 130 000 tonnes by 2025. Establishing
a new region in Newfoundland is an important part of the growth strategy, as well as improving the
utilization of the seawater licenses, providing additional capacity and post-smolt production.
FARMING COST
The Group targeted a farming cost of NOK 37.9 per kg for 2020. In 2019, the target was reached both
in Rogaland and Finnmark, achieving NOK 35.9 and NOK 37.7 per kg, respectively. In 2020, biological
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challenges drove the farming cost up to NOK 42.1 per kg in Rogaland and NOK 44.1 per kg in Finnmark.
As the biological conditions have normalized, significant cost reductions are expected going forward.
Rogaland and Finnmark are targeting a farming cost of NOK 40 per kg in 2022.
Cost reductions were achieved in BC, from CAD 8.3 per kg in 2019 to CAD 8.0 per kg in 2020. The volume
harvested in 2020 was significantly higher than in 2019, as harvesting volumes vary significantly every other
year due to local production arrangements. While lower harvesting volumes in 2021 will impact costs, the
underlying ongoing improvement is expected to continue. Coupled with higher harvesting volumes in 2022,
additional cost reductions are expected, targeting a cost of CAD 7 per kg.
An important factor in reducing costs is the Group’s post-smolt program, which is expected to reduce
mortality, disease outbreaks, sea lice treatments, and fish handling.
AQUACULTURE STEWARDSHIP COUNCIL (ASC) CERTIFICATION
Achieving ASC certification is an important objective, as it provides customers and consumers with an
assurance of responsible and sustainable operations. As at year-end, 15 sites are ASC certified in Finnmark
and 11 sites in BC, equivalent to 80% and 59% of net production, respectively. The Group aims to be 100%
ASC certified or compliant in Finnmark and BC by the end of 2021, and in Rogaland by 2023. Newfoundland
also aims to be ASC certified.
FISH HEALTH AND WELFARE
The Group targets a 12-month survival rate of 93%. None of the regions met this target in 2020. The
survival rate in Rogaland fell from 93% in 2019 to 90% in 2020, and in Finnmark from 96% in 2019 to 92%
in 2020 due to biological issues, while in BC, it improved from 88% in 2019 to 90% in 2020 due to algae
mitigation measures.
The total use of active pharmaceutical ingredients increased in 2020 compared to 2019, mainly due to
regular use of hydrogen peroxide in BC to reduce the sea lice pressure. The Group’s post-smolt program
will provide better control of the fish’s environment for a longer period of time. Post-smolt makes the
fish more robust before they are transferred to the sea farms, and reduces their exposure to seaborne
biological risks. Other initiatives to improve fish health and welfare include the selection of roe with
specific qualities related to sea lice and diseases, feed customized for the various stages of the salmon´s
lifecycle, and vaccinations to immunize against specific diseases.
ESCAPE
The Board is pleased to report that the Group had no fish escapes in 2020, due to continuous escape
prevention efforts.
GREENHOUSE GAS EMISSIONS
In 2020, the Group amended its greenhouse gas emission (GHG) targets, from a 30% reduction in emissions
per tonne for Scope 1 and 2 by 2030, to a target of reducing total carbon emissions for Scope 1, 2 and 3
by 35% in 2030 and 100% by 2050. The emission targets have been approved by the Science Based Target
Initiative.
In 2020, the absolute Scope 1 (direct emissions from company-owned and controlled resources) and
Scope 2 (indirect emissions from the generation of purchased energy) greenhouse gas emissions increased
by 1% compared to last year, while production increased by 5%. Measured as kgC02 equivalents per
tonne harvested, the emissions decreased by 3%. Scope 3 emissions (emissions that occur upstream and
downstream in the value chain of the company), excluding feed, were reported for the first time in 2020,
and accounted for 77% of total emissions. Once feed is included, it is expected that this figure will increase
to more than 90%. Even though farmed Atlantic salmon already has a low carbon footprint, cutting more
emissions from both own operations and the supply chain is a challenge that the Group will continue to
work on. The Board is proud that Grieg Seafood has been awarded A- by the CDP for its climate disclosures
and actions to facilitate a low-carbon future.
OUR FINANCIAL RESULTS QUALITY SHARE OF SALMON
The Group aims for 93% of its salmon to be graded as “superior” quality. However, because biological
issues had a negative impact on the quality of the fish harvested, none of the regions reached this target
in 2020. The Group’s post-smolt program and initiatives to improve fish health and welfare are expected to
contribute to an increased superior share.
HEALTH AND SAFETY
The Group does not compromise on occupational health and safety, and follows up accidents and absence
rates. In Finnmark (5.5%) and BC (6.8%), the absence rate is above the target of 4.5%, mainly due to long-
term illness and employees taking time off while waiting to be tested for Covid-19. When the pandemic
started, the Group introduced new policies to enable employees to stay at home without having a sick note
from a doctor if they suspected they were suffering from Covid-19. Rogaland had an absence rate of 3.0%
in 2020.
The Group conducted a global Great Place to Work survey in 2020. The Board is proud to report that
all regions received Great Place to Work certification. The total score of 84% for the Group was very
satisfactory, and an improvement from 79% last year, proving that Grieg Seafood is a great place to work
and among the best companies to work for.
LOCAL COMMUNITIES
Grieg Seafood operates in many rural communities, and are grateful for their permission to farm salmon
in their inlets and fjords. Communities’ social license to operate is essential to achieve sustainable growth.
The Group aims to create local jobs and opportunities, use local suppliers, and engage in and support
various local projects and activities.
OP ER AT ION A L R E V IE W AND SEGMEN T S
2020 was a challenging year, both in terms of market conditions and biological issues leading to a
harvested volume below target. The Group experienced biological issues in three of its regions, particularly
in Finnmark and Shetland, where issues led to mortality, lost growth, and premature harvesting. In
addition, Covid-19 disrupted the salmon market, causing a significant shift in demand and increased the
uncertainty, contributing to lower prices in all core markets.
In 2020, the global harvest of Atlantic salmon increased by approximately 5% compared to 2019, according
to Kontali, continuing an upward trend seen over several years. The largest contributors to the increase
were Chile and Norway, whose output rose by 79 200 and 32 040 tonnes, respectively. The Chilean industry
has mustered an impressive recovery after its difficulties in 2017, while Norway has seen incremental
growth in harvested volumes as farmers have adapted to challenging biological conditions over the past
few years. The UK experienced a reduction in the volume harvested in 2020. The global supply of Atlantic
salmon increased by approximately 4% compared to 2019. It is estimated that consumption in most major
markets increased in 2020, except for China which decreased by 25%. The largest relative increases in
consumption were found in the EU (up 5%) and the USA (up 8%).
With a limited increase in supply to the market, high prices would normally be expected, but Covid-19
impacted both consumption patterns and overall demand for salmon during the year. Sales to the
HoReCa market have been low due to restrictions, curfews and lockdowns in most markets. Sales to the
retail segment and home consumption have risen. Salmon spot prices noted on NASDAQ Salmon Index
(NQSALMON) fell substantially both during the first and second wave of restrictions and lockdowns in
Europe. The same trend was observed in the North American market. The spot price started the year at
NOK 78.4, while the lowest price was seen towards the end of the year at NOK 40.2 per kg. Prices ended
the year at NOK 50.7 per kg. The 12-month average NQSALMON for 2020 (less distributor margin of NOK
0.75) came to NOK 53.7 compared to NOK 57.2 in 2019.
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Continental Europe is by far the Group’s most important market, accounting for 45% of sales revenues in
2020. The market distribution of sales varies year on year, depending on the volumes harvested across the
Group’s regions. The main change in the sales distribution was a decrease to the EU, from 52% in 2019 to
45% in 2020, due to the increased volume from Grieg Seafood BC. At the same time, sales directed to the
UK market increased from 6% in 2019 to 9% in 2020.
Sales revenues (ex. Shetland) amounted to NOK 4 384 million, corresponding to a decrease of NOK 371
million or 7.8% from NOK 4 756 million in 2019. The average salmon spot price (NQSALMON weekly
average less distributor margin) for the year was NOK 3.5 per kg lower in 2020 than in 2019. Although
spot market prices negatively impacted the Group’s sales revenue, fixed-price contracts in Norway made
a significant contribution. Fixed price contracts accounted for 41% in Norway, in line with the Group’s
targeted contract share of 20-50%.
Grieg Seafood harvested a total of 71 142 tonnes of Atlantic salmon in 2020, ex Shetland, a 1% increase
from 2019. As the volume harvested in Shetland was 15 705 tonnes in 2020 and 11 273 tonnes in 2019, a
record-high volume of 86 847 tonnes was achieved in 2020, compared to 82 973 in 2019.
In 2020, the operational performance at the Group’s freshwater facilities has been good. The Group
continues to follow its growth strategy and transferred 22 million smolt to the sea during 2020, with
an average weight of 233 grams per smolt (figures excluding Shetland). Seawater production has been
satisfactory, though the Group experienced biological challenges at certain seawater sites in Rogaland,
Finnmark and Shetland, which had a significant financial impact. Compared to 2019, the farming cost
increased in all regions except BC. The group farming cost ended at NOK 47.0 per kg, compared to NOK
40.5 per kg in 2019. Abnormal mortality totalled NOK 2.4 per kg in 2020, compared to NOK 1.6 per kg in 2019
(ex. Shetland). Feed comprised 42% of the Group’s costs in 2020, compared to 44% in 2019. The feed cost
increased by approximately 3.2% in Norway, 1.8% in Shetland and 3.9% in BC. Feed prices are sensitive
to changes in currency rate, marine and vegetable raw material prices, seasonal variation, fish catches,
and production. The feed price in 2020 has been driven by a general increase in commodities, which also
applies for feed raw materials, in particular in BC, as well as foreign exchange rates, in particular in
Norway and the UK.
The Group targets a farming cost (total production cost at harvest including harvesting cost) of NOK 40
per kg in Rogaland and Finnmark, and CAD 7 per kg in BC, in 2022. Costs will be reduced by improving
operational performance, with a rigorous focus on biological control, increased survival, and fish health
and welfare. The Group will also drive performance improvements through continuous research and
development, as well as through the utilization of new technologies.
In 2020, Grieg Seafood restructured its business and narrowed the operational focus to the regions
with the greatest potential for sustainable and profitable production. A greenfield project was acquired
in Newfoundland, Eastern Canada, which will be build up using best industry practices for sustainable
farming operations. Grieg Seafood Shetland will be sold. The operations that the Group will continue
to operate are characterized as “continued operations”, while the Shetland assets are characterized as
“discontinued operations”. In addition, all shares in Ocean Quality AS were sold in 2020. Activity related
to the sale of fish produced by Bremnes Fryseri, including trading, have been defined as discontinued
operations. For further details, see Note 5 to the Group Accounts.
CONTINUED OPERATIONS
ROGALAND
Grieg Seafood Rogaland harvested 23 043 tonnes in 2020, a decrease of 9% compared to the 25 217 tonnes
harvested in 2019. Sales revenues amounted to NOK 1 310 million, compared to NOK 1 539 million in 2019.
The average spot price in 2020 was NOK 53.7 per kg, compared to NOK 57.2 per kg. The price achievement
in Rogaland was NOK 56.8 per kg, compared to NOK 61.0 per kg in 2019. Lower spot prices were slightly
OUR FINANCIAL RESULTS offset by fixed-price contracts in 2020. Besides the effect of fixed-price contracts, the lower revenue in
2020 is mainly explained by lower price achievement impacting the EBIT before fair value adjustment of
biomass by NOK -97 million, while the lower volume harvested impacted Rogaland’s EBIT before fair value
adjustment of biomass by NOK -49 million.
The share of superior quality fish improved from 75% in 2019, when the quality was significantly impacted
by pancreas disease (PD), to 85% in 2020. In 2020, Rogaland had a stable PD situation, with PD at just one
site at year-end, however, PD and occurrences of winter ulcers impacted the superior share.
The seawater production in Rogaland performed well, but was impacted by biological challenges and
reduced survival at two sites in the summer and autumn. The 12-month rolling survival rate ended at 90%
for 2020, down from 93% in 2019. The lower survival was caused by a combination of CMS and wounds from
mechanical delousing treatments. The lower survival had a cost (cost recognized as abnormal mortality in
the income statement) of NOK 64 million in 2020 (NOK 2.8 per kg) compared to NOK 26 million (NOK 1.0
per kg) in 2019. The lower rate of survival, combined with a lower volume harvested, impacted the farming
cost, which came to NOK 42.1 per kg compared to NOK 35.9 per kg in 2019.
EBIT before fair value adjustment of biological assets for the year was NOK 292 million, which corresponds
to NOK 12.7 per kg. Comparable figures for 2019 were NOK 568 million and NOK 22.5 per kg, respectively.
Grieg Seafood Rogaland aims to reduce the time fish are kept at sea, primarily by increasing average smolt
size. In 2020, Grieg Seafood Rogaland transferred more than 6.5 million smolt to sea, with an average
weight of 400 grams, compared to 280 grams in 2019. The highest average weight of smolt being transferred
to the sea farms in 2020, was 1.1 kilo. Larger smolt will significantly reduce seawater production time,
making the fish less exposed to issues such as sea lice and PD. Joint venture investments in post-smolt
facilities form an important part of this strategy. Through Rogaland, the Group has a 33% shareholding
in Tytlandsvik Aqua, which will be expanded from its current production capacity of 3 000 tonnes to 4 500
tonnes, with an option for further capacity increases. In January 2021, Grieg Seafood Rogaland invested in
Årdal Aqua, which will produce at least 3 000 tonnes of post-smolt annually.
As part of the Group’s Precision Farming strategy, Grieg Seafood has a full-scale, integrated operations
and centralized feeding in Rogaland. All sites in Rogaland are monitored and fed remotely from this facility.
Precision farming will ensure more efficient feeding, leading to reduced costs and improved growth going
forward.
Grieg Seafood is continuously looking for opportunities to increase the farming capacity. In 2020, an
additional capacity of 647 tonnes maximum allowable biomass (MAB) was acquired, which will allow
improved production and flexibility.
Grieg Seafood Rogaland has a cost target of NOK 40 per kg, which is expected to be to reached in 2022. The
goal is to harvest 28 000 tonnes in 2021, increasing to 35 000 tonnes in 2025.
FINNMARK
Grieg Seafood Finnmark harvested 26 919 tonnes in 2020, a decrease of 17% compared to the 32 362
tonnes harvested in 2019. The harvest estimate for 2020 was 38 000 tonnes. The reduction in harvested
volume was due to biological challenges with low temperatures causing winter ulcers, early harvests and
lost on-growth, as well as challenges with ISA.
Revenues amounted to NOK 1 389 million, a decrease of 23% compared to NOK 1 815 million in 2019. The
average spot price in 2020 was NOK 53.7 per kg, compared to NOK 57.2 per kg in 2019. Finnmark achieved
an average price of NOK 51.6 per kg in 2020, compared to NOK 56.1 per kg in 2019. Although Finnmark sold
41% of the year’s volume under fixed-price contracts, price achievement was significantly impacted by a
superior share of 69%, which was due to quality downgrades related to ISA and winter ulcers. Compared
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to 2019, lower price achievement impacted EBIT before fair value adjustment of biomass by NOK -121
million, while the lower volume had an impact of NOK -98 million compared to 2019.
The seawater production in 2020 was impacted by issues related to winter ulcers and ISA. The farming
cost was NOK 44.1 per kg in 2020, up from NOK 37.7 per kg in 2019. The increase was mainly due to
the reduced volume harvested, but was also impacted by added wellboat costs and external harvesting
related to culling of ISA-infected fish. Grieg Seafood Finnmark do not have permission to perform sanitary
harvesting at it’s own plant, and found it challenging to secure harvesting capacity at external processing
plants. Winter ulcers and salmon with reduced health also impacted the 12-month rolling survival rate,
which decreased from 96% in 2019 to 92% in 2020. The reduced survival rate had a cost (cost recognized
as abnormal mortality in the income statement) of NOK 37.5 million in 2020 (NOK 1.4 per kg), compared
to NOK 15.1 million in 2019 (NOK 0.5 per kg). The Group is working to improve survival rates through both
general and targeted health and welfare measures. Increasing the smolts’ weight is also important, as it
will make the smolt more robust when they are transferred to the sea, and a shorter period at sea will
reduce exposure to biological risks such as winter ulcers and ISA.
EBIT before fair value adjustments ended at NOK 127 million or NOK 4.7 per kg, compared to NOK 580
million and NOK 17.9 per kg in 2019.
Flexibility is a requirement to achieve better utilization of the Group’s capacity, and Grieg Seafood are
continuously looking for opportunities to secure access to good new locations. In 2020, Finnmark was
granted approval for two new locations, and acquired additional capacity of 259 tonnes maximum allowable
biomass (MAB), which will allow improved production and flexibility.
Grieg Seafood Finnmark is focused on continuing to improve fish welfare and survival rates. Camera
surveillance and sensor technology are used to continuously monitor the environment and take appropriate
actions. Grieg Seafood Finnmark works towards sustainable production, and at the end of 2020, fifteen out
of 28 sites were ASC certified.
Grieg Seafood Finnmark has a cost target of NOK 40 per kg, which is expected to be reached in 2022. The
harvesting target for 2021 is 37 000 tonnes, increasing to 45 000 tonnes in 2025.
BRITISH COLUMBIA
Grieg Seafood British Columbia (BC) harvested 21 181 tonnes in 2020, compared to 14 120 tonnes in 2019.
Harvesting volumes vary significantly every other year in BC due to local production region arrangements,
and this cyclicality explains the higher volume in 2020 compared to 2019. The harvest estimate of 20 000
tonnes in 2020 was upgraded to 22 000 tonnes during the year due to positive effects of the algae mitigation
and digital monitoring efforts. Revenues totaled NOK 1 195 million, an increase of 39% compared to NOK
861 million in 2019.
In 2020, BC achieved an average price of NOK 56.4 per kg compared to NOK 61.0 per kg in 2019. Exchange
rates fluctuated significantly in 2020. The NOK/CAD exchange rate opened the year at 6.8 and closed at
6.7, peaking at 7.9 in March and averaging out at 7.0 for the year. The average price achievement in CAD
for 2020 was CAD 8.0 per kg compared to CAD 9.2 per kg in 2019. Compared to 2019, the foreign exchange
rate boosted sales revenue by NOK 66 million in 2020. With respect to EBIT before fair value adjustment of
the biomass, the impact of the foreign exchange rate in 2020 was only NOK 0.8 million. Measured in NOK,
the effect of prices in 2020 compared to 2019 was NOK -97 million, while the effect of increased volume in
2020 compared to 2019 was NOK 37 million.
Seawater production has been good in 2020, despite somewhat challenging biological conditions due to
low oxygen events during the summer, which negatively affected feeding. Due to the algae mitigation
system, the impact was limited, and the 12-month survival rate increased from 88% in 2019 to 90% in
2020. The increased survival rate contributed to a decrease in the farming cost, which ended at CAD 8.0
OUR FINANCIAL RESULTS (NOK 56.1) per kg in 2020 compared to CAD 8.3 (NOK 55.3) per kg in 2019. Reduced survival had a cost (cost
recognized as abnormal mortality in the income statement) of NOK 66.1 million in 2020 (NOK 3.1 per kg, or
CAD 0.4 per kg), compared to NOK 73.3 million in 2019 (CAD 0.8 per kg).
In a challenging market characterized by Covid-19 mitigation measures, good average weight and a stable
superior share from BC’s harvest contributed to an EBIT before fair value adjustment of the biomass of
NOK -7.4 million, which corresponds to NOK -0.4 per kg, compared to NOK 73.3 million and NOK 5.2 per
kg in 2019.
Access to high-quality smolt is key to ensuring sustainable production growth. Grieg Seafood BC will
increase smolt capacity from 500 tonnes to 900 tonnes, with the first smolt transfer from the new Gold
River smolt facility going to sea farms scheduled for the spring of 2022. The Group’s post-smolt strategy
will enable BC to have better control of the fish’s environment for a longer period. It will also make the
fish more robust when they are transferred to sea, and a shorter period at sea will reduce exposure to
biological risks.
Grieg Seafood BC is heavily influenced by sea lice pressure from wild salmon each autumn, when the wild
salmon pass its farms on their way to the river to spawn. BC is testing preventative methods such as sea
lice skirts and tarps to keep the sea lice level stable. When the sea lice level increases, BC carry out the
type of treatment they consider most appropriate. The addition of the new wellboat (Ronja Islander, long-
term lease agreement) was implemented in the beginning of 2020 and successfully treated with 100% sea
lice recapture systems.
The Group’s main farming areas in BC are operated under agreements with the First Nations in those
areas. BC’s relations with the Mowachaht Muchalaht, Tlowitsis and Ehattesaht Chinehkint First Nations
are good, and are very important for the Group.
The federal regulator Fisheries, Oceans and Canadian Coast has announced that it will not renew licenses
in the Discovery Islands farming area after 30 June 2022. Grieg Seafood BC has only one farm in the area.
Production plans will not be impacted, as the capacity lost in this area can be moved to other farms.
Salmon farming companies in BC, including Grieg Seafood BC, have asked for a judicial review of the
Government’s decision process to allow a better understanding the implications of closing open seawater
farming in the Discovery Islands.
Harmful Algae Blooms (HAB) and low oxygen events represent significant biological risks in BC. Algae
movements and oxygen levels are continuously monitored and analyzed using high-grade, real-time, in-
pen sensors, and machine learning with predictive environmental data software. In addition, aeration
systems have been installed to enable feeding also during challenging situations. Mortality rates are
decreasing, but are still too high. The Group expect BC’s algae mitigation and digital monitoring efforts
to increase survival rates and harvest volumes, and reduce costs going forward. This will enable BC to
reach the cost target of CAD 7 per kg, which is expected to be reached in 2022. Grieg Seafood BC expect to
harvest 15 000 tonnes in 2021, increasing to 35 000 tonnes in 2025.
SALES
Until year-end 2020, the Group’s salmon has been sold through Ocean Quality, the sales organization
jointly owned by Grieg Seafood (60%) and Bremnes Fryseri (40%). Grieg Seafood has been building its own
sales organization to support the 2025 growth and the downstream strategy. The new sales organization
is partly based on the Ocean Quality sales force, as the companies Ocean Quality North America (OQ NA),
Ocean Quality USA (OQ USA) and Ocean Quality UK (OQ UK), including their employees, were acquired
by Grieg Seafood at year-end 2020. OQ NA is now Grieg Seafood Sales North America, OQ USA is Grieg
Seafood Sales USA, while in Shetland the sales organization has been merged with the farming entity
Grieg Seafood Shetland. Bremnes Fryseri took ownership of the Norwegian organization Ocean Quality AS
at the end of 2020, and the sales partnership Ocean Quality was dissolved. The Group’s new sales entity
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in Norway is Grieg Seafood Norway. To facilitate the transition, Grieg Seafood and Bremnes Fryseri will
continue with a sales agreement until June 2021. As of January 2021, the Group’s new sales and market
organization was operational. From being a pure supplier of farmed salmon from Norway, Scotland and
Canada, the downstream strategy will re-position Grieg Seafood in the value chain and become a partner
for selected customers in main markets.
In 2020, Ocean Quality sold Grieg Seafood salmon to Europe, Asia, the USA, and Canada. Europe is the
dominant market, representing 45% of the total sales, compared to 52% in 2019.
Overall demand for Atlantic salmon remained strong in 2020 with demand for branded and certified, high-
quality products increasing. This included the Grieg Seafood brands; Skuna Bay and Kvitsøy. By the end of
2020, Grieg Seafood had achieved ASC certification equal to 80% of net production in Finnmark and 59% of
net production in BC. The Group is working to certify more sites, including those in Rogaland, and aims for
100% certification or compliance by 2023.
DISCONTINUED OPERATIONS
In 2020, the assets relating to the operations in Shetland are classified as held for sale, and the activity is
presented under discontinued operations. In addition, all shares in Ocean Quality AS have been sold, and
the activities of Ocean Quality not related to sale of fish produced by Grieg Seafood are also presented as
discontinued operations. See more information in Note 5 in the Group Accounts.
SHETLAND
Following a thorough analysis of the Shetland investment during the year, Grieg Seafood has decided not to
include Shetland in the Group’s long-term strategy. The Group has therefore appointed DNB Markets and
Nordea Markets to advise on the divestment of the Shetland assets. This process is expected to conclude
by the end of 2021.
Shetland harvested 15 705 tonnes in 2020, compared to 11 273 tonnes in 2019, contributing to a total
operating income in 2020 of NOK 969 million, compared to NOK 816 million in 2019. The NOK/GBP
exchange rate fluctuated significantly during 2020, opening the year at NOK 11.6, peaking at NOK 13.3, and
closing at NOK 11.6. The average exchange rate for the year was NOK 12.0, thus the foreign exchange rates
has significantly impacted the segment’s figures.
Biological challenges combined with jellyfish issues caused a high rate of mortality in Skye towards the
end of the year. As a result, both survival rates and the superior quality share were reduced. Operating
costs in Shetland were significantly impacted by extraordinary mortality write-downs, and a high cost
per kg for fish from the sites in Skye. Harvest from the Isle of Skye farms was accelerated following the
decision to cease operations at those locations. Production in Shetland has developed positively and the
cost per kg is expected to come down in 2021, once operations in Skye have ended.
In recent years, Grieg Seafood Shetland has taken several steps to ensure strong biosecurity and improved
fish health and welfare, such as extended fallowing areas coordinated with neighboring farmers, and
control of the sea lice situation by means of aeration systems, sea lice skirts and freshwater treatments.
Measures such as a new vaccination strategy to improve smolt quality have significantly increased the
survival rate for smolt transferred to the sea.
Grieg Seafood Shetland expects to harvest 15 000 tonnes in 2021.
OUR FINANCIAL RESULTS FIN A NCI A L P ER F OR M ANCE
GROUP FINANCIAL STATEMENTS
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRS).
In 2020, the Group’s activity in Shetland and the part of Ocean Quality not related to sale of fish produced
by Grieg Seafood has been presented as discontinued operations, and the 2019 comparative figures have
been re-presented to be comparable. At year-end, Shetland is classified as held for sale. For further
information, see Note 5 of the Group Accounts.
PROFIT AND LOSS
Sales revenue and harvested volume
Grieg Seafood harvested a total of 71 142 tonnes (86 847 tonnes incl. Shetland) in 2020, down 1 % compared
to 71 700 tonnes in 2019 (82 973 incl. Shetland). The harvest in 2020 generated revenues of NOK 4 384
million, down 8% from NOK 4 756 million in 2019. The decreased revenues are primarily due to lower price
achievement 2020 compared with 2019.
The global supply of Atlantic salmon increased by approximately 4% compared to 2019. With a limited
increase in supply to the market, high prices would normally be expected, but Covid-19 impacted both
consumption patterns and overall demand for salmon during the year. As the salmon market can be
volatile, Grieg Seafood has adopted a policy to ensure that 20-50% of the harvested volume is hedged
at fixed prices. In 2020, the share of fixed-price contracts was 41% in Norway, in line with the Group’s
targeted contract share of 20-50%.
Farming cost
The total farming cost (ex. Shetland) per kg for the Group came to NOK 47.0 in 2020, compared to NOK 40.5
the year before. This includes write-downs due to abnormal mortality (ex. Shetland) of NOK 2.4 per kg ,
compared to NOK 1.6 per kg in 2019.
Raw materials and consumables, which consist mainly of the Group’s freshwater and seawater fish stocks,
in addition to feed, ended at NOK 1 717 million, a cost increase of NOK 219 million compared to NOK 1 498
million in 2019, primarily due to biological issues in Rogaland and Finnmark during the year.
Salaries and personnel expenses for the year ended at NOK 500 million, an increase of NOK 7 million
from NOK 493 million in 2019. The increase was partly driven by the acquisition of the new region in
Newfoundland in April 2020, and partly by the establishment of the Group’s wholly owned sales and market
department, which went into operation at the start of 2021. Other operating expenses ended at NOK 1 593
million, an increase of NOK 186 million compared to NOK 1 407 million in 2019. The increase is mainly
driven production related costs incl. wellboat costs. Digitalization projects also led to increased operating
cost during the testing and implementation phase. The Group also recognized increased cost related to
attorneys' fees in connection with the investigations being carried out by the European Commission and
US competition authorities.
EBIT
Depreciation and amortization came to NOK 369 million in 2020, an increase of NOK 62 million compared
to NOK 307 million in 2019. The increase is driven by increased operational capacity in owned and leased
assets, which has driven up depreciation.
EBIT before fair value adjustment of biological assets ended at NOK 233 million, compared to NOK 1 077
million in 2019.
EBIT per kg came to NOK 3.3, compared to NOK 15.0 per kg in 2019. EBIT per kg was negatively affected by
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biological issues, primarily in Rogaland and Finnmark, combined with low spot prices during the second
half of the year.
Fair value adjustment
Fair value adjustments of biological assets in 2020 were negative in the amount of NOK 290 million, such
that EBIT after fair value adjustments came to NOK -57 million. In 2019, fair value adjustments of biological
assets were also negative in the amount of NOK 255 million, while EBIT after fair value adjustments of
biological assets came to NOK 822 million. Both the market price and the forward price at the end of the
year remained low and have a negative effect on the fair value of biomass.
Financial items
Net financial items came to NOK -248 million, bringing profit before tax to NOK -304 million. In 2019, net
financial items came to NOK -26 million, while profit before tax totalled NOK 796 million. The decrease in
financial items is due to negative foreign exchange effects compared to 2019, increased debt service costs
due to the Group’s Green Bond issue, and costs related to the temporarily amended financial covenants
related to the syndicated debt.
Taxes and net profit
Taxes for the year amounted to an expense of NOK 12 million, bringing the net profit from continued
operations for the year to NOK -316 million. Taxes in 2019 amounted to an expense of NOK 197 million,
while net profit from continued operations ended at NOK 599 million. The net result from discontinued
operations for the year, which include Shetland and the part of Ocean Quality relating to sale of fish
produced by Bremnes Fryseri, amounted to NOK -199 million in 2020 compared to NOK 46 million in 2019.
The decrease in net profit from discontinued operations is primarily due to biological challenges in the Isle
of Skye, which brought the year’s net loss for the year to NOK 515 million in 2020, compared to a net profit
of NOK 645 million in 2019
FINANCIAL POSITION
The Group's recognized asset value as at 31 December 2020 was NOK 10 650 million, compared to NOK
8 935 million at the end of 2019. A total of NOK 1 973 million of the Group’s asset values is classified as
held for sale. This consists primarily of the Shetland assets. The balance sheet for 2019 has not been re-
presented to reflect the held for sale-classification, which significantly impacts any comparative analysis.
Please see Note 5 of the Group Accounts for a summary of the book value of the Shetland assets year-
end 2020. Goodwill amounted to NOK 638 million at 31 December 2020 compared to NOK 110 million at
31 December 2019, while the book value of farming licenses was NOK 1 508 million at year-end 2020
compared to NOK 1 134 million in 2019. The book value of property, plant, and equipment including right
of use assets totalled NOK 3 033 million at year-end 2020, compared to NOK 2 958 million in 2019. The
change in property, plant and equipment, goodwill and farming licences is primarily due to the net effect
of the Shetland held for sale classification and the Grieg Newfoundland acquisition. See Note 5 and Note
6 of the Group Accounts, respectively.
At 31 December 2020, the Group’s equity amounted to NOK 4 371 million, compared to NOK 4 141 million in
2019. The equity ratio at the end of the year was 41% compared with 46% at the end of 2019.
The Group's net interest-bearing liabilities totalled NOK 3 931 million at year-end 2020. In 2019, the
comparable figure was NOK 2 376 million. The increase in net interest-bearing liabilities is primarily due
to the Group’s Green bond issue of NOK 1 500 million in 2020.
Net interest-bearing liabilities excluding factoring and the effect of IFRS 16 lease liabilities (see Note 12
and Note 13 of the Group Accounts), as per bank covenants, totalled NOK 3 679 million at year-end 2020,
compared to NOK 1 939 million in 2019. The bank syndicate consists of Nordea and DNB.
OUR FINANCIAL RESULTS The Grieg Seafood Group’s loan agreements include two term loans of NOK 600 million and EUR 60
million, respectively; a revolving credit facility of NOK 1 500 million (extended from NOK 1 300 million
year-end 2019), a overdraft facility of NOK 100 million, and a revolving credit facility/bridge loan of NOK 600
million. At the end of the year, NOK 1 203 million of the revolving credit facility and the overdraft facility was
available for the Group. See Note 12 of the Group Accounts for more information.
Current loan agreements also allow the Group to utilize up to NOK 600 million for leasing (finance leases
according to IFRS in force prior to 1 January 2019). The majority of the Group's new feed barges, well
boat, cages and other operational equipment are leased. At the end of 2020, operational lease liabilities
(classification according to IFRS in force prior to 1 January 2019) amounted to NOK 252 million (2019: NOK
380 million), while financial lease liabilities (classification according to IFRS in force prior to 1 January
2019) amounted to NOK 433 million in 2020 (2019: NOK 452 million). The change in the operational leases
are primarily due to the held for sale classification of the Shetland assets.
According to the Group’s loan covenants, the equity ratio is calculated excluding Ocean Quality, and
was 43% at year-end 2020, compared to 51% at year-end 2019. At 31 December 2020, the Group was in
compliance with its financial covenants. See Note 12 of the Group Accounts for more information.
CASH FLOW
Net cash flow from operations ended at NOK 412 million in 2020, down from NOK 1 193 million in 2019. The
decrease is mainly related to lower earnings due to biological issues in Rogaland and Finnmark, as well as
low spot market prices. In BC, the Group has had a reduction in farming cost per kg in 2020 compared with
2019 (measured in CAD), however profitability has suffered due to a decrease in market prices.
Net cash flow from investment activities amounted to NOK -1 593 million, compared to NOK -297 million
in 2019. The change in cash flow from investment activities is due to a comprehensive investment plan, as
the Group is establishing the Newfoundland region through a business acquisition, amounting to NOK 620
million in 2020. Additionally, a significant part of the Group’s capital expenditure was related to develop
the Newfoundland region, where the Group is targeting a harvest volume of 15 000 tonnes by 2025. Grieg
Seafood’s ambition for the region is an annual harvest of at least 45 000 tonnes by 2030. In line with its
growth strategy, the Group has invested substantially in smolt production, biosecurity, and digitalization.
Net cash flow from financing activities came to NOK 1 478 million, compared to NOK -625 million in 2019.
The change is primarily due to the Green bond issue of NOK 1 500 million in 2020.
Cash and cash equivalents from continued operations increased by NOK 298 million during the year, and
available cash totalled NOK 275 million as at 31 December 2020, up from NOK 214 million in 2019. In 2020,
NOK 16 million are proceeds from sale of Ocean Quality, while NOK -255 million (2019: NOK -196 million)
is attributable to the net effect discontinued operations had on the Group’s cash and cash equivalents from
continued operations in 2020.
GR IE G SE AF OOD A S A
PROFIT FOR THE YEAR
The parent company’s financial statements are prepared in accordance with Norwegian accounting
principles (NGAAP).
The parent company recorded an operating loss of NOK 73 million in 2020, compared to a loss of NOK
87 million in 2019. A lower cash-based remuneration cost (options) to the management team resulted in
reduced operating expenses.
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The company has a syndicate loan provided 50/50 by DNB and Nordea. The financing agreement includes
two term loans of NOK 600 million and EUR 60 million, respectively; a revolving credit facility of NOK 1 500
million, alongside overdraft facility of NOK 100 million (extended from NOK 1 300 million year-end 2019),
and a revolving credit facility/bridge loan of NOK 600 million. In June 2020, Grieg Seafood issued its first
Green Bond with NOK 1 000 million and in November 2020 the Group issued the second tap of the Green
Bond of NOK 500 million, bringing total Green Bond proceeds for the year to NOK 1 500 million.
At the end of the year, NOK 1 203 million of the revolving credit facility and the overdraft facility was
available for utilization.
Dividends from Ocean Quality, in the amount of NOK 17 million (NOK 15 million in 2019), and Group
contributions from subsidiaries in the amount of NOK 100 million (NOK 862 million in 2019), contributed
to a positive financial result.
Interest expenses from external financing increased in 2020. This is due to increased external funding
compared to 2019. In the forth quarter of 2020, Grieg Seafood was granted an amendment to its covenants
through the third quarter in 2021. At the end of the year, Grieg Seafood was in compliance with these
temporary amended terms. See the Note 17 for more information about the requirement for the
amendment. The equity ratio of Grieg Seafood ASA at year-end was 43%, compared to 45% last-year,
corresponding to a book value of equity of NOK 2 670 million in 2020 compared to NOK 1 760 million in
2019.
During the year, there has not been any dividend payments because of the increased volatility and
uncertainty caused by the Covid-19 situation, combined with an extensive investment plan for the Group.
The parent company´s net cash flow from operations in 2020 totalled NOK -277 million, compared to NOK
-157 million in 2019.
Cash flow from investing activities came to NOK -1 232 million (NOK 349 million in 2019). The decrease is
due to higher lending to Group companies compared to 2019.
Net cash flow from financing activities came to NOK 1 687 million, compared to NOK -192 million in 2019.
The difference is primarily due to the Green Bond Issue of NOK 1 500 million in 2020.
As at 31 December 2020, available cash totalled NOK 184 million compared to NOK 6 million as at
31 December 2019.
FINANCIAL RESULTS AND ALLOCATIONS – GRIEG SEAFOOD ASA
The aim of the Group is to offer a competitive return on invested capital to its shareholders through a
combination of dividends and share price appreciation.
The Group’s dividend policy is that the dividend should, over time, average 30-40% of the Group's net profit
after tax before fair value adjustment of biological assets. At the same time, the Group’s net interest-
bearing debt per kg harvested salmon should remain below NOK 30, but can be exceeded in periods of
growth investments.
The Board has resolved to request an authorization provided by the Annual General Meeting to pay dividend
in 2021.
The parent company, Grieg Seafood ASA, recorded a gain of NOK 12 million for 2020, which the Board
proposes the Annual General Meeting to allocate to other equity.
OUR FINANCIAL RESULTS R ISK A ND R I SK M AN A GEMEN T
The Group is exposed to risks in numerous areas, such as biological production, the effects of climate
change, degradation of nature, compliance risk, the risk of accidents, changes in salmon prices, and
the risk of politically motivated trade barriers. The current Covid-19 pandemic poses a material risk to
most of the Group's operational areas. The Group’s internal controls and risk exposure are subject to
continuous monitoring and improvement, and efforts to reduce risk in different areas have a high priority.
Management has established a framework for managing and eliminating most of the risks that could
prevent the Group from attaining its goals. See the Group’s risk overview here. A summary of some of the
risks may be found below.
OPERATIONAL RISK
The greatest operational risk relates to biological developments within the Group’s smolt and aquaculture
operations. The book value of live fish in the balance sheet at year-end was NOK 2 546 million. To reduce
this risk, the Group focuses on improving fish health and welfare through several initiatives. The Group’s
post-smolt strategy, where fish are grown to a larger size on land, thereby shortening the time they spend
in open sea pens, is an important part to reduce the biological risk.
The aquaculture industry has experienced major issues with sea lice and algae in recent years. The
Group collaborates actively with the authorities and other aquaculture players to implement measures
and initiate activities to reduce biological risk. Some of the initiatives are joint fallowing and area-based
management. The Group has initiated a digitalization process to facilitate operational improvements. The
aim is to use sensor technology to reduce the algae challenges in BC and Shetland. The introduction of
sensor technology to monitor algal blooms enables the determination at an early stage the type of algae
and the appropriate feeding response. This is of vital importance as different types of algae have different
effects on the salmon. With respect to sea lice, the Group is switching from pharmaceutical to mechanical
delousing treatment methods.
MARKET RISK
Salmon prices are highly volatile, with major fluctuations within relatively short time spans. However,
there has been a stable rise in demand for salmon over recent years, while the growth in supply has been
limited. This development is expected to continue going forward. Supply is also impacted by other factors,
such as government regulations, sea temperatures, sea lice, outbreaks of disease, and other indirect
and direct factors, which affect production and therefore also supply. The Covid-19 pandemic and the
measures implemented by authorities worldwide to deal with it, have impacted global demand for salmon
and disrupted global supply chains, at least in the short to medium term. In 2020, the global harvest of
Atlantic salmon increased by approximately 5% compared to 2019, according to Kontali. The 12-month
average NQSALMON (less distributor margin of NOK 0.75) was NOK 53.7 per kg in 2020 compared to
NOK 57.2 per kg in 2019. Although spot market prices negatively impacted the Group’s sales revenue in
2020, the sale of 41% of the harvested volume in Norway under fixed-price contracts made a significant
contribution. The percentage was in line with the targeted contract share of 20-50%.
The transition period following the UK’s withdrawal from the European Union (Brexit) expired at year-end
2020. The outcome of Brexit still represents an uncertainty for the Scottish salmon farming industry and
Norwegian exporters, due to possible tariffs on trade and logistical difficulties in getting fresh salmon from
Norway to the UK and from UK to the rest of Europe. Although the Scottish salmon sector had prepared
extensively over several years to ensure they were ready for post-Brexit conditions, the impact on the
sector in January 2021 alone was estimated at more than GBP 11 million. This was caused by delays (lost
customers, spoilt products), in addition to higher costs related to logistics and export documents. So far,
the Group’s sales have not been significantly affected by Brexit.
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FINANCIAL RISK
Financing risk
The Group operates within an industry characterized by high volatility, which entails greater financial
risk. The Group’s business and future plans are capital intensive. To the extent that sufficient cash is not
generated from operations in the long term, additional funding needs to be raised to pursue its growth
strategy and finance capital expenditures. Adequate sources of capital funding might not be available when
needed, or may only be available on unfavorable terms.
The Group renegotiated its syndicated bank loan agreement in 2018, which will secure the working capital
needed to achieve the Group’s growth targets. The agreement matures in 2023. The Group issued its first
Green Bond, which raised proceeds of NOK 1 000 million, in June 2020. In November, the Group issued
the second tap of this senior unsecured green bond, with an additional drawdown of NOK 500 million. The
bond matures on 25 June 2025. Financial and contractual hedging is a matter of constant consideration,
in combination with operational measures. Management draws up rolling liquidity forecasts, extending
over five years. These forecasts are based on conservative assumptions for salmon prices and form the
basis for calculating liquidity requirements. This forecast also forms the basis for the Group’s financing
needs. In November 2020, the Group was granted an amendment to its loan covenants through the third
quarter of 2021, which gives management greater room for maneuver in an uncertain market still affected
by Covid-19.
Liquidity risk
In line with the Group's growth strategy, interest-bearing liabilities have increased and may continue to
increase. The Group has invested substantial amounts during the last year, such as the acquisition of
Grieg Newfoundland and the build-up of its biomass. The previous year's refinancing made the Group
financially equipped to carry out further investments in increased smolt stocking and new locations
for sea production. The Group has had a factoring agreement in Norway, which has been derecognized
through the sale of Sjór AS (Ocean Quality AS) year-end 2020. In 2021, Grieg Seafood Norway, the Group’s
new sales entity, has entered into a factoring agreement. Furthermore, there is a factoring agreement
in UK, classified as liabilities directly associated with assets held for sale. The UK agreement means
that significant risk and control of trade receivables remains with Grieg Seafood. In Norway, however,
the factoring company purchases 90% credit-insured trade receivables from the company, transferring
significant risk and control thereof to the credit institution. Such receivables are then derecognized from
the company’s balance sheet.
At the end of 2020, the Group had 1 203 million in available liquidity. The revolving credit is flexible, as it
can be drawn upon within a month, or for a longer period, depending on the Group´s need for liquidity.
Management monitors the Group’s liquidity reserve, which comprises a loan facility, bank deposits, and
cash equivalents, based on expected cash flows. This is carried out at group level in collaboration with
the operating companies. Management and the Board seek to maintain a high equity ratio, to be well
positioned to meet financial and operational challenges. Considering the dynamic nature of the industry,
the Group aims to maintain funding flexibility.
Currency risk
In translating the operating income and balance sheet items of foreign subsidiaries, the Group's major
currency exposure is to CAD and GBP. The strategy is to reduce the currency risk by funding the subsidiaries
in their local currencies. All long-term loans to subsidiaries from Grieg Seafood ASA are in the local
currency and are regarded as net investments, as there are no set plan for repayment of those loans.
The currency effect of these net investments is included in the Group's consolidated statement of other
comprehensive income (OCI). The production companies sell in local currencies to the sales organization,
which hedges its transactions against currency fluctuations related to CAD/USD, EUR/NOK, GBP/EUR
and USD/NOK, and other currencies if required. Long-term foreign currency contracts are hedging
instruments, where unrealized currency gains or losses are recognized through other comprehensive
income (OCI). The currency situation is continuously assessed against the volatility of the currencies. The
OUR FINANCIAL RESULTS
remaining net exposure is frequently monitored. However, the Group may not be successful in hedging
against currency fluctuations and significant fluctuations may have a material adverse effect on the
Group's financial results and business. The Group is also exposed to currency fluctuations on long-term
lease agreements, primarily operational equipment including well boat charter hire. Lastly, the Group is
also exposed to EUR, as part of its credit facility is in EUR.
Interest rate risk
The Group is exposed to interest rate risk through its borrowing activities, and to fluctuating interest rate
levels in connection with the financing of its activities in the various regions. The Group's existing loans are
at floating interest rates, but separate fixed-rate contracts have been entered into to reduce interest rate
risk. Grieg Seafood’s policy is to have 20–50% of interest-bearing debt hedged through interest rate swap
agreements. A given proportion shall be at floating rates, while consideration will be given to entering and
exiting hedging contracts for the remainder. The interest rate swap agreement changes with the three-
month NIBOR.
CLIMATE RISK
The climate plays an important role in Grieg Seafood’s operations. The Group recognizes that climate
change is likely to present a range of challenges to the aquaculture industry. Without proactive adaptation,
salmon farming may become more vulnerable to physical risks such as damage caused by extreme
weather and disease due to higher seawater temperature, as well as regulatory risk, technology risk,
market risk, and reputational risk. However, climate change may also offer opportunities, including the
adoption of resource efficiencies and waste management initiatives.
Grieg Seafood has developed policies to ensure adequate management of climate change, and its impact
on the business. This includes a climate action policy and the disclosure of climate-related information
based on Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
C OR P OR AT E AND S O CI AL R E SP ONSIBILI T Y
Sustainability underpins Grieg Seafood’s operations – it is the license to operate and the motivation to
perform. Sustainability is also core business, driving results and generating value for all stakeholders.
Grieg Seafood’s overarching goal is to sustainably produce food in the ocean. This is expressed in the
company’s vision "Rooted in nature – farming the ocean for a better future", which demonstrates the
Group’s commitment to corporate social responsibility and the desire to operate profitably and sustainably
in a manner that conforms with fundamental ethical norms and respect for the individual, society as a
whole, and the environment.
Grieg Seafood’s sustainability strategy is built on the five pillars: Healthy ocean, Sustainable food, Profit
& innovation, People, and Local Communities. These pillars define the Group’s focus areas. They are
founded on external expectations, based on dialogues with stakeholders, and the company’s own goals
and ambitions. The Group is currently revising and updating its policies and will publish relevant policies
on the Group’s webpage.
The company’s reporting on corporate social responsibility is based on several standards, such as the
Euronext guidance on ESG reporting, OECD guidelines for multinational enterprises, the Global Reporting
Initiative (GRI), the Global Salmon Initiative (GSI), and the Task Force on Climate-related Financial
Disclosures (TCFD), amongst others. Grieg Seafood is also committed to the UN Global Compact, and has
signed the Sustainable Ocean Principles. The Group’s sustainability strategy is described in Part 1, while
the activities and results are presented in Part 2 of this Annual Report.
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RESEARCH AND DEVELOPMENT – ACHIEVING SUSTAINABLE GROWTH
Innovation and research in the areas of biology and technology are a prerequisite for sustainable farming,
maintaining healthy oceans, and farming profitability going forward. Grieg Seafood continuously allocates
resources for research and development. Through active participation in national research projects, and
local tests and trial projects in the various regions, the Group contributes to the industry’s advancement.
Active projects report on their progress throughout the year. The project plan is reviewed annually,
summarizing completed projects and prioritizing new ones. The Group's R&D focus is on operational
projects that contribute to short-term and long-term solutions to biological and technical challenges, and
improved operational efficiency. The projects are numerous and span a wide area, ranging from fish health
and fish welfare to effective use of large units, feeding control, and the optimization of smolt production in
large recirculation units.
EMPLOYEES
To reach goals and to solve challenges, Grieg Seafood needs the best people, regardless of their gender
or background. A good working environment is key to attracting and retaining the best talent. For the third
time in Norway, and the second time globally, the Group participated in the Great Place to Work survey.
The Board is proud to announce that all regions received the Great Place to Work certification in 2020.
The majority of the Group’s employees, including managers, are men. In total (including Shetland), 945
people were employed in the Group at 31 December 2020, of whom 221 were women and 724 were men.
The Group’s employment policy facilitates the recruitment and retention of qualified employees of both
genders. A good working environment is key to attracting and retaining the best talent. Grieg Seafood
annually monitors and report on gender balance, pay gaps, women in management positions and key roles
through the SHE Index. In the last SHE Index, published in February 2021, the Group ranked 24th, which is
a fall compared to the previous ranking, due to changes on the management structure.
The Group conducts yearly assessments of its pay structure to identify any pay gaps between men and
women performing the same jobs. The non-administrative positions are covered by union agreements
and there are no differences between women and men. The only differences that may occur are based on
seniority, which is also regulated by the union agreements. The Group uses the Korn Ferry methodology
to benchmark salaries and benefits against the market. Salaries that are not on the median level are
adjusted according to the benchmark – both for women and men.
The Group’s positions and pay structure are based on a matrix where all positions are given a score/
number based on their responsibility, mandate, and content. There is no gender-based discrimination
in this matrix. Salaries are based on roles and responsibility not on gender, culture, or origin. The Group
offers flexible working hours for the office staff and seek to ensure a good work-life balance throughout its
operations. The goal is to improve workplace diversity and become a preferred employer.
Human resources are managed locally in compliance with local rules and instructions, and in accordance
with the Group’s guidelines. The Group is working continuously to strengthen global routines and guidelines
for human resources and health and safety throughout the Group, and actively seeks to reduce sick leave
and the number of health and safety incidents. All such incidents are registered and reviewed as part of
monthly HSE meetings. The Group’s employee policy is described in detail in the “People” section of this
Annual Report.
Business integrity is essential for the Group, with zero tolerance for fraud, corruption, or other misconduct.
In 2020, there were two whistleblowing cases, one of which related to harassment. New procedures and
measurement have been implemented to avoid similar cases going forward. Management was also given
training in how to deal with and resolve this type of cases in the future. To strengthen the corporate culture
and encourage employee loyalty, Grieg Seafood continues to give its employees the opportunity to become
company shareholders through the annual share program.
OUR FINANCIAL RESULTS The Board wishes to thank all employees for their dedication, efforts, and contributions in 2020.
CORPORATE GOVERNANCE
Grieg Seafood ASA seeks to comply, where applicable, with the Norwegian Code of Practice for Corporate
Governance, last revised on 17 October 2018. The company’s corporate governance policies and practices
are disclosed in the "Corporate governance" section of this Annual Report, and on the Grieg Seafood
website.
P O S T-B A L ANCE SHEE T E V EN T S
On 18 January 2021, the Norwegian Directorate of Fisheries granted Grieg Seafood three development
licenses to build the “Blue Farm” installation. In 2016, Grieg Seafood applied for ten development licenses
to build this innovative farm and position it in exposed waters off the coast of Rogaland. The concept is
based on technology from the Norwegian oil and gas industry, and the aim is to subsequently relocate the
farm to an area further offshore. Grieg Seafood has appealed the decision to the Ministry of Industry and
Fisheries as the Group believe there are grounds for additional licences.
On 20 January 2021, Grieg Seafood announced its investment in the joint venture Årdal Aqua AS, owned
in equal parts by Grieg Seafood Rogaland AS, Vest Havbruk AS and Omfar AS. The project is currently in
the design development phase, with the aim to start construction during the autumn of 2021. The facility
will have a production capacity of 5 000 tonnes annually according to current plans, though the objective
is to increase production capacity still further. Årdal Aqua will deliver at least 3 000 tonnes of post-smolt
annually to Grieg Seafood’s sea farms in Rogaland. In addition, the company aims to gradually produce
fish to harvestable size on land. The move makes Grieg Seafood the first global salmon producer to invest
in land-based salmon farming.
OU T L OOK
MARKET EXPECTATIONS
The global harvest of Atlantic salmon in 2021 is expected to increase by 2-4% compared to 2020. With
limited increases in volume and strong demand, high prices would normally be expected. However, the
market situation has been significantly impacted by Covid-19. Strict public health restrictions continue
to affect most markets, despite increasing levels of vaccination. Covid-19 measures, including border
closures, continued to impact market prices into 2021. The average spot market price for the first 11 weeks
of 2021 was NOK 50.4 per kg, compared to NOK 70.6 for the same period of 2020. Despite the continued
uncertainty caused by the pandemic, mitigated to some degree by ongoing vaccination programs, the
short-term market outlook seems promising. The forward prices on Fishpool for the second half of 2021
trade around NOK 55 per kg, and NOK 58 per kg for 2022.
Covid-19 has disrupted the salmon market, with a significant shift in demand, away from hotels, restaurants
and catering (HoReCa) and to a greater extent towards the retail segment. The retail segment and home
consumption have been boosted. The shift from HoReCa to retail is expected at some point to be reversed,
but the current market situation may also lead to permanent changes in consumer behavior. With an
increasing share of people preparing food at home, combined with a growing preference for healthy food
and the current low prices, the demand for salmon may increase in the retail segment going forward.
PRODUCTION
Grieg Seafood's operations are currently running normally, and salmon is being harvested according
to plan. As food producers, the industry is recognized as an essential function in Norway and Canada.
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Governments want production to continue and have signaled that they are willing to facilitate that where
necessary. Through industry organizations, the Group has engaged in a good dialogue with the authorities
in Norway, the UK, and Canada, and is discussing possible arrangements to safeguard salmon farming
operations in various scenarios. On a broader scale, initiatives implemented by the authorities to avoid the
spread of infection in the general population reduce the risk of supply chain disturbances.
EMPLOYEES
Grieg Seafood's priority is the wellbeing of its employees, their families, and the local communities where
the Group operate. The Group complies fully with the authorities' recommendations at all its locations. The
Group has implemented measures to limit the spread of Covid-19, with crisis management teams operating
at head office and in each region. The regions have conducted local risk assessments and implemented
measures accordingly, such as limiting contact between shifts, hygiene measures, and working from home
where possible. Companies in the value chain have also implemented measures to avoid the spread of
infection and keep operations running safely.
FINANCIAL POSITION
Grieg Seafood’s financial position is satisfactory, given the market situation and the biological challenges
experienced during the year. The Group is continuously monitoring the liquidity levels. Cash flow forecasts
for all farming regions, sales and the Group are performed regularly, and simulation/stress tests of the
liquidity risk is carried out.
Grieg Seafood ASA´s dividend policy states that the average dividend should correspond to 30-40% of
profit after tax, but before fair value adjustment of biological assets. At the same time, the net-interest
bearing debt per kg of harvested salmon should be NOK 30, through with the possibility to increase this
during periods of growth-related investment. Dividends will be adjusted to meet the targeted level of debt.
The Group may reassess or postpone some of the investments scheduled for 2021 to ensure a solid
financial position. However, the Group aims to continue with its 2025 strategy, including the integration of
Grieg Newfoundland into its operations.
FORECAST FOR 2021
For 2021, Grieg Seafood has guided on a total harvest of 80 000 tonnes GWT (ex. Shetland).
GOING C O NCE R N
The market situation at the start of 2021 remains impacted by the Covid-19 pandemic. Grieg Seafood's
operations are currently running as normal. Although there has been a shift in the market from restaurants
to retail, consumer demand is still there. Market prices have, however, been impacted. At the end of
2020, Grieg Seafood established a completely new sales and market organization, which will become
operational in all markets during the first quarter of 2021. The Group will go from being purely a supplier
of farmed salmon to an innovation partner for selected customers. Read more in the Outlook section. The
management team and the Board will monitor the market situation closely, and measures will be taken to
ensure continued shareholder value.
In November 2020, the Group was granted an amendment to the loan covenants through the third quarter
2021. At year-end, the Group was in compliance with these terms. In March 2021, the Group was given an
extension of its NOK 600 million bridge loan, with maturity postponed from 31 December 2021 to 31 March
2022.
In 2020, the Group took several steps to pave the way for stronger profitability and increased
competitiveness. Grieg Seafood has narrowed the operational focus to the regions where the Group has
OUR FINANCIAL RESULTS the greatest opportunities for profitable growth and the highest return on investment. Grieg Seafood will
invest in Norway and Canada as strong production regions.
The Board is of the opinion that the financial statements give a true and fair presentation of the Group’s
assets and liabilities, financial position, and financial results. Based on the above presentation of the
Group’s results and financial position, and in accordance with the Norwegian Accounting Act, the Board
confirms that the annual financial statements have been prepared on a going concern basis, and that the
requirements for so doing have been met.
S TAT EM EN T FR OM T HE B O AR D OF DIR EC T OR S A ND C EO
We hereby confirm that, to the best of our knowledge, the financial statements for the period from 1
January to 31 December 2020 have been prepared in accordance with applicable accounting standards and
give a true and fair view of the Group and of the Group’s assets, liabilities, financial position, and overall
results. We also confirm that the Board of Directors’ Report gives a true and fair view of the development
and performance of the business and the position of the Company and the Group, as well as a description
of the principal risks and uncertainties facing the Company and the Group.
Bergen, 25 March 2021
The Board of Directors of Grieg Seafood ASA
PER GRIEG JR.
Chair
TORE HOLAND
Vice Chair
SIRINE FODSTAD
Board Member
MARIANNE RIBE
Board Member
KATRINE TROVIK
ANDREAS KVAME
Board Member
CEO
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CORPORATE
GOVERNANCE
OUR FINANCIAL RESULTS In keeping with our vision of farming the ocean for a better future,
implementation and assessment are, however, a line management
Grieg Seafood demonstrates its commitment to corporate social
responsibility. This means that corporate social responsibility is
responsibility by operating profitably and sustainably in a manner
an integral component of all our operations, for all management
that conforms to fundamental ethical norms and respect for the
teams, units, and departments.
individual, society as a whole, and the environment. At the same
time, we face risks to our business strategy, operational risks, and
risks associated with the protection of our employees, assets, and
RISKS RELATED TO CLIMATE CHANGE
One of the many factors that could materially and adversely affect
reputation. Because our operations are clearly connected with a
our business and financial results, is the long-term effect of
multitude of external expectations, we seek to maintain a regular
climate change on general economic conditions and the salmon
dialogue with our stakeholders, as they are the basis for our social
farming industry in particular, along with changes in the supply
license to operate. Transparency and disclosure are vital in building
of feed raw materials and requirements to cut carbon emissions.
trust, and by engaging in a dialogue with our stakeholders we are
More information on our risk management procedures, and risks
able to better understand the role we play in local communities
related to climate change in particular, is included in the Board of
and in society as a whole.
Directors’ report in Part 3 of this Annual Report.
GOVERNANCE STRUCTURE
Grieg Seafood believes that strong corporate governance is an
COMPLIANCE
As salmon farming is a highly regulated industry, we are subject
essential element in achieving our overall objectives and acting as
to strict standards for fish welfare, environmental impact, food
a responsible organization. The Board of Directors is committed to
production, and production equipment. We must also comply
sound corporate governance, and our governance structure helps
with operational requirements related to the use of medicines
enable the Board to fulfill its fiduciary duties to our shareholders
and chemicals, biomass levels, sea lice levels, stock density, and
and ensure our long-term success. The Board exercises oversight
water quality, etc. We report regularly to public authorities on, for
of strategic, operational, and financial matters, including the
instance, biomass levels, sea lice levels, disease outbreaks, and
factors that constitute our major risks. The Audit Committee,
mortality rates for salmon and cleaner fish. We are also subject to
which consists of two members of the Board of Directors, has been
regular inspections and audits by local, national, and international
given a particular responsibility to monitor critical business risks
stakeholder groups and authorities. See here for more information
and address the quality and effectiveness of relevant risk-reducing
about our ASC certificates.
measures. The Audit Committee reviews the Group’s governing
policies annually and assesses our risk management quarterly. In
2020, we set up a committee to review and update our group policies
CODE OF CONDUCT AND BUSINESS BEHAVIOR
Our Values and Code of Conduct underpin the way we conduct
on the basis of a holistic assessment of economic, environmental,
ourselves and our approach to corporate social responsibility.
social and governance issues. Our group management team,
Our Code of Conduct sets out the ethical principles and standards
consisting of eight senior executives and representing all aspects
that must be upheld by each and every employee, and any agent
of our operations, are the approval committee for these policies.
that acts on our behalf, including our Board of Directors. Through
The Board of Directors holds the group management team
our Supplier Code of Conduct, we demonstrate that we expect
accountable for following its strategies and policies, maintaining
no less from our supply chain. As part of our risk management,
a high standard of ethical and responsible business conduct,
we continuously assess all our operations for risks related to
taking care of our employees and safeguarding human rights, and
corruption. Corruption is not considered a significant risk and we
assessing risks related climate change and the environment. The
have controls in place to minimize exposure to it.
group management team convenes weekly. We also have quarterly
business review meetings with our farming and sales operations.
In 2020, most of these meetings were held on digital platforms,
which has worked well. We have a dedicated, cross-functional
Sustainability Team, led by the Chief Sustainability Officer,
consisting of members of the group management team and
employees with particular functional responsibilities. Day-to-day
Grieg Seafood refrains from anti-competitive behavior, anti-trust
and monopolistic practices, as this can severely affect consumer
choice, pricing, and other factors that are essential for efficient
salmon markets. For more information, see the People section in
this Annual Report.
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CORPORATE GOVERNANCE
PRINCIPLES
Adopted by the Company’s Board of Directors on 20 April
2007, and updated on 25 March 2021.
FIGURE 3.1
GRIEG SEAFOOD'S COMPLIANCE WITH THE NORWEGIAN CODE OF PR ACTICE FOR CORPOR ATE GOVERNANCE
Section of the Norwegian Code of Practice for Corporate Governance
Deviation from the Code of Practice
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Statement of corporate governance
Activities
Share capital and dividends
Equal treatment of shareholders and transactions with related parties
Negotiablility
General Meeting
Nomination Committee
Corporate Assembly and Board of Directors - composition and independence
Work of the Board of Directors
Risk management and internal control
Directors' fees
Remuneration of executive personnel
Information and communication
Company takeovers
Auditor
No deviation
No deviation
No deviation
No deviation
No deviation
Two deviations, see below
Two deviations, see below
No deviation
No deviation
No deviation
No deviation
No deviation
No deviation
No deviation
No deviation
OUR FINANCIAL RESULTS 1. IMP LE ME N TAT ION AND R EP OR T ING ON C OR P OR AT E
GO V E R N A NCE
PRESENTATION OF CORPORATE GOVERNANCE
Responsibility for ensuring that the Company has good corporate governance rests with the Board of
Directors. The Board and Responsibility for ensuring that the Company has good corporate governance
rests with the Board of Directors. Board and management annually review Grieg Seafood Group’s corporate
governance principles and code of practice.
The Company abides by the Norwegian Code of Practice for Corporate Governance as recommended by
the Norwegian Corporate Governance Board (NUES) on 17 October 2018. The Grieg Seafood Group follows
NUES’s latest recommendations and has updated its existing rules and defined values in accordance with
changes to the Norwegian Code of Practice published in 2014.
The Company has adopted the “follow or explain principle” with respect to the Code’s application. This
means that the Company provides an explanation whenever it deviates from the Code.
This Annual Report offers a full account of the Company's principles for corporate governance, which is
available here.
Deviations from the Norwegian Code of Practice: None
2. B U SI NE S S
GRIEG SEAFOOD ASA
The Company's business is defined in Article 3 of its Articles of Association:
“The object of the company is to engage in the production and sale of seafood and in naturally related
activities, including investment in companies engaged in the production and sale of seafood and in other
naturally related activities”.
The Company is established and registered in Norway and is required to comply with Norwegian law,
including laws and regulations pertaining to companies and securities. Find our Articles of Association
here.
GRIEG SEAFOOD ASA’S VISION AND OVERALL OBJECTIVES
In keeping with Grieg Seafood’s vision “Rooted in nature - farming the ocean for a better future”, we
demonstrate our commitment to corporate social responsibility by operating profitably and sustainably in
a manner that conforms to fundamental ethical norms and respect for the individual, society as a whole,
and the environment. Through its five pillars, Grieg Seafood is committed to creating sustainable and long-
term value. Sustainability is fundamental to the industry and strongly impacts our financial performance.
Our 2025 strategy is rooted in our desire for sustainable salmon farming. Focus areas are global growth,
cost leadership, and value chain repositioning.
The Board of Directors is committed to sound corporate governance, and our governance structure helps
enable the Board to fulfill its fiduciary duties to our shareholders and ensure our long-term success.
The Board of Directors has established objectives, strategies, and risk profiles for the Company’s defined
business scope, in order to create value for its shareholders. The Board has an annual plan for its endeavors
and follows a five-year cycle in its strategy work. This includes a review of risk areas and internal controls,
as well as approving the strategy, objectives, and risks relating to sustainable development.
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The Company aims to comply with all relevant laws and regulations, and with the Norwegian Code of
Practice for Corporate Governance. This also applies to all companies controlled by the Group. To the
extent possible, therefore, this statement of principle also applies to all companies within the Group. The
Company has its own Code of Conduct, which all employees and contract workers must abide by. The
Company also has its own Supplier Code of Conduct, which we expect all our suppliers to comply with.
MANAGEMENT OF THE GROUP
Control and management of the Group is divided between the shareholders, represented by the General
Meeting, the Board of Directors, and the Group CEO, and is exercised in accordance with prevailing
company legislation.
Deviations from the Norwegian Code of Practice: None
3 . EQU I T Y AND DI V IDENDS
EQUITY
At any given time, the Group shall have a level of equity and a capital structure that are appropriate to
the Group’s cyclical activities. The Board requires that, as a minimum, equity consistently complies with
current loan covenants.
As at 31 December 2020, the Company's consolidated equity totaled NOK 4 371 million, equivalent to 41%
of total assets, and a debt-to-equity ratio of 1.4. The Board of Directors considers the current capital
structure to be satisfactory in relation to the Company’s objectives, strategy, and risk profile.
DIVIDEND
The Group’s objective is to give shareholders a competitive return on invested capital through dividend
payments and appreciation in the value of the share, at a level at least equivalent to other companies with
comparable risk.
Any future dividend will depend on the Group’s future earnings, financial situation, and cash flow. The
Board believes that the dividend paid should keep pace with the Group’s profit growth, while at the same
time ensuring that equity remains at a healthy and optimal level. In addition, the Board must ensure that
there are adequate financial resources to pave the way for future growth and investment, and meet its
desire to minimize capital costs.
The Board of Directors at Grieg Seafood has adopted a dividend policy whereby the average dividend, over
a period of several years, should correspond to 30-40% of profit after tax before fair value adjustment of
biological assets.
Furthermore, although a net interest-bearing debt per harvested kg of up to NOK 30 is considered
reasonable, it may be exceeded in periods of growth-related investments. Based on this, the size of the
dividend could be adjusted within the margin set out above.
In 2020, the Company did not pay out any dividend due to the increased volatility and uncertainly caused by
the Covid-19 situation, combined with an extensive investment plan.
BOARD AUTHORIZATION
The Board can ask the AGM to grant a general mandate to pay out dividends in the period until the next
AGM. An explanation must be given for the Board´s proposal. The dividend will be based on the Group's
current policy. Dividends should be paid on the basis of the last financial statements approved within
the scope of the Norwegian Public Limited Companies Act. Upon authorization being granted, the Board
determines from which date the shares are to be traded ex-dividend.
OUR FINANCIAL RESULTS The Board has a general authorization to increase the Company’s share capital through share subscription
for a total amount not exceeding NOK 44 664 800, divided into not more than 11 166 200 shares at the
nominal value of NOK 4.00 each. The authorization covers merger decisions as provided for in Section
13-5 of the Norwegian Public Limited Companies Act. The Board is entitled to increase the share capital
on several occasions and to itself determine the amount of the share capital increase in each case. The
general authorization to increase the Company’s share capital was used in connection with the acquisition
of Grieg Newfoundland AS on 20 April 2020, with the issue of 1 785 042 new shares. The subscription price
for each shares was NOK 140.052727, corresponding to a total contribution in kind of NOK 250 000 000.
After this private placement, the Company has a total of 113 447 042 shares.
As at 31 December 2020, 1 785 042 shares have been issued pursuant to this authorization. This
authorization remains in effect until 30 June 2021.
The Board has a general authorization to acquire the Company’s own (treasury) shares in accordance with
the provisions of Chapter 9 of the Norwegian Public Limited Companies Act for an aggregate nominal
amount not exceeding NOK 44 664 800. The Company shall pay not less than NOK 4.00 per share and not
more than NOK 180.00 per share when acquiring treasury shares. As at 31 December 2020, no shares have
been acquired pursuant to this authorization.
This authorization remains in effect until the next AGM, but not later than 30 June 2021. Going forward, the
Company will observe the Norwegian Code of Practice in respect of new proposals to authorize the Board
to implement capital increases and acquire treasury shares.
Deviations from the Norwegian Code of Practice: None
4. EQU A L T R E AT MEN T OF SH AR EHOLDER S A ND
T R ANS A C T IONS W I T H R EL AT ED PAR T IE S
SHARE CLASS
The Company has one class of shares, and all shares carry the same rights. As at 31 December 2020, the
Company had 113 447 042 outstanding shares, including treasury shares.
TREASURY SHARES
If the Company trades in its own (treasury) shares, the Norwegian Code of Practice’s provisions relating to
the equal treatment of shareholders and transactions with related parties shall be observed.
As at 31 December 2020, the Company held 1 171 494 treasury shares.
APPROVAL OF AGREEMENTS WITH SHAREHOLDERS AND OTHER RELATED
PARTIES
All non-immaterial transactions between the Company and a shareholder, board member, senior
employee, or their related parties, shall be subject to valuation by an independent third party. If the
consideration exceeds one-twentieth of the Company’s share capital, transactions of this kind shall be
approved by a General Meeting of Shareholders, in so far as this is required under Section 3-8 of the
Norwegian Public Limited Companies Act. The Board has approved an internal policy for the Company’s
as of 3 February 2021.
There was one transaction with related parties in 2020. This concerned the purchase of the shares in Grieg
Newfoundland AS pursuant to the authorization above, and took place on 15 April 2020. An Extraordinary
General Meeting was held on 25 March 2020 to approve the agreement. Deloitte AS had obtained an
independent fairness opinion in connection with the transaction. For further details see Notes 6, 18, and
23 to the Group Accounts in this Annual Report.
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CAPITAL INCREASES
Should shareholders’ preferential subscription right be waived, the Norwegian Code of Practice shall be
observed. There was one capital increase in connection to the purchase of Grieg Newfoundland AS, which
was registered on 20 April 2020. A total of 1 785 042 shares were issued with a nominal value of NOK 4.00
per share. As a result, the Company’s share capital increased by NOK 7 140 168, from NOK 446 648 000
to NOK 453 788 168.
Deviations from the Norwegian Code of Practice: None
5. SH AR E S AND N EGO T I A BI LI T Y
There are no limitations with regards to owning, trading, or voting for the Company’s shares. All shares are
freely negotiable to all parties.
Deviations from the Norwegian Code of Practice: None
6. GENE R AL MEE T ING S
The Company’s highest decision-making body is the General Meeting of shareholders.
With respect to the timing and facilitation of General Meetings, the Board of Directors will do its best to
ensure that as many shareholders as possible may attend and exercise their rights, thereby making the
General Meeting an effective forum for the views of shareholders and the Board of Directors.
The Company’s Annual General Meeting (AGM) shall be held each year before the end of June. The
Board will assess whether, in light of the situation relating to the Covid-19 pandemic, the meeting will be
conducted physically or via a digital meeting platform. The AGM shall consider and, if thought fit, adopt the
annual financial statements, the annual report, and the proposed dividend, as well as deciding on other
matters which under current laws and regulations pertain to the AGM.
The Board may convene an Extraordinary General Meeting (EGM) at whatever time it deems necessary
or when such a meeting is required under current laws or regulations. The Company’s auditor and any
shareholder or group of shareholders representing more than 5% of the Company’s share capital may
require the Board to convene an EGM.
The Board must give at least 21 days’ notice that a General Meeting is to be held. During this period, the
notice and documents pertaining to matters to be considered at the General Meeting shall be accessible
on the Company’s website. The same applies to the Nomination Committee’s recommendations. When
documents are made available in this manner, the statutory requirements for distribution to shareholders
do not apply. Nevertheless, a shareholder may ask to be sent physical documents concerning matters to
be considered at the General Meeting.
The deadline to register for attendance at the General Meeting is set by the Board in the notice, normally
five days prior to the meeting’s scheduled date.
Shareholders can vote on each individual matter, including on each individual candidate nominated for
election. Shareholders unable to attend may vote by proxy. An authorization form containing a vote option
for each agenda item will be enclosed with the notice of meeting. Shareholders may also authorize the
Board’s chair or the Group CEO to vote on their behalf.
OUR FINANCIAL RESULTS
The Company will publish the minutes of General Meetings in accordance with the stock exchange
regulations, in addition to making them available for inspection at the Company’s registered offices.
The Board’s chair, a member of the Nomination Committee and the Group CEO will attend the General
Meeting. The Board’s chair will normally chair the General Meeting. The Board of Directors will ensure
that, if it so requests, the General Meeting is also able to appoint an independent chair.
The Board shall not contact the Company’s shareholders outside the General Meeting in a manner which
could be deemed to constitute preferential treatment or which could be in conflict with current laws or
regulations.
The Nomination Committee proposes candidates for election to the Board by the AGM.
In 2020, Grieg Seafood Group held its AGM on 14 May as a digital meeting, as recommended due to Covid-19.
Deviations from the Norwegian Code of Practice:
GSF Group deviates from the code of practice in two ways.
1. The AGM is not led by an independent chair, but by the Board’s chair. This is in accordance with its
Articles of Association. Given the matters considered by the AGM, an independent chair has not been
considered necessary. In cases that involve related parties, the AGM is chaired by an independent
board member.
2. Not all members of the Board or the Nomination Committee attend the AGM. The Board of Directors
considers it sufficient that the Board’s chair and the chair of the Audit Committee, are present. Other
board members and members of the Nomination Committee attend as needed.
7. NOMIN AT ION C OMMI T T EE
On 13 February 2009, the AGM approved a resolution to establish a Nomination Committee. This is
described in Article 8 of the Articles of Association. At the same time, the AGM adopted instructions for the
Nomination Committee. According to these instructions, the Nomination Committee should safeguard the
interests currently set out in the Norwegian Code of Practice for Corporate Governance.
The present Nomination Committee was elected at the AGM on 14 May 2020.
Nomination Committee
Elisabeth Grieg
Yngve Myhre
Helge Nielsen
Role
Chair
Member
Member
Considered independent
Served since
No
Yes
No
12.06.2018
07.06.2017
18.06.2012
Term expires
AGM 2021
AGM 2021
AGM 2021
The members of the Nomination Committee are elected for a term of one year. At least 2/3 of the members
of the Nomination Committee shall be independent of the Board, and may not be board members. The
Group CEO cannot be a member of the Nomination Committee. The Nomination Committee shall have
meetings with the directors, Group CEO, and relevant shareholders.
The Nomination Committee´s recommendations to the AGM must be submitted well ahead of time and
accompany the notice of the AGM, no later than 21 days before the meeting. The Nomination Committee’s
recommendations must include information about each candidate’s impartiality, competence, age,
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education, and professional experience. Upon proposal for re-election, the recommendation should
include additional information about how long the candidate has been a board member, as well as details
of their attendance at board meetings.
All shareholders are entitled to submit proposals to the Nomination Committee for candidates to the
Board of Directors and other appointments. Proposals must be submitted to the Nomination Committee
no later than two months prior to the AGM. Information on how to propose candidates can be found on the
Company’s website.
Recommendations concerning candidates for the Nomination Committee itself should also include
relevant information about the candidates. commendation comprises candidates for the Nomination
Committee itself, it should include relevant information about these candidates.
Deviations from the Norwegian Code of Practice:
GSF Group deviates from the Norwegian Code of Practice in two ways.
1. The Code of Practice recommends that all shareholders should be able to submit proposals to the
Nomination Committee for candidates to the Board of Directors and other appointments in a simple
and easy manner. Currently, shareholders must contact the Nomination Committee directly. The
Company will observe the Norwegian Code of Practice in respect of new proposals to facilitate that all
shareholders can propose candidates to the Board and Nomination Committee.
2. The majority of Nomination Committee’s members are not independent of the Board.
8. B O AR D OF DIR EC T OR S :
C OM P O SI T ION AND INDEP ENDENCE
NUMBER OF BOARD MEMBERS
Pursuant to Article 6 of its Articles of Association, the Company’s Board of Directors comprises up to seven
members elected by the General Meeting.
The Board’s chair is elected by board members. In the event of a tied vote, the Board’s chair has the casting
vote. The Group CEO is appointed by the Board and has both a right and a duty to attend board meetings.
The Group CEO is only entitled to vote on board decisions if he or she is an elected member of the Board.
ELECTION PERIOD
From 2020, all board members are elected by the AGM. At the 2020 AGM, the shareholders decided to
change the board members’ term of office from two years to one year. Board members may be re-elected.
INDEPENDENT BOARD MEMBERS
As at 31 December 2020, the Board of Directors consisted of the following members:
Name
Per Grieg Jr.
Tore Holand
Sirine Fodstad
Marianne Ødegaard Ribe
Katrine Trovik
*Per Grieg Jr. and indirectly via the Grieg Group.
Role
Chair
Vice chair
Board member
Board member
Board member
Considered
independent
No
Yes
No
Yes
Yes
Served since
Term expires
20.05.2009
AGM 2021
12.06.2018
13.06.2019
14.05.2020
14.05.2020
AGM 2021
AGM 2021
AGM 2021
AGM 2021
2020 Meeting
attendance
% of shares in GSF
per 31.12.2020
100%
100%
100%
100%
100%
53.2*
0.0%
0.0%
0.0%
0.0%
OUR FINANCIAL RESULTS The Company's annual report and the website provide information on board members’ backgrounds and
expertise. An overview of board members’ shareholdings in the Company appears in Note 18 to the Group
Accounts in this Annual Report.
Deviations from the Norwegian Code of Practice: None.
9. T H E W OR K OF T HE B O AR D OF DIR EC T OR S
DUTIES AND ANNUAL PLAN
The Norwegian Public Limited Liability Companies Act regulates the duties and workings of the Board
of Directors. In addition, the Board of Directors has adopted supplementary rules of procedure covering
the duties of the Board of Directors and the Group’s chief executive officer (CEO), the division of labor
between the Board and the Group CEO, the annual plan for the Board of Directors, notices of board
proceedings, administrative procedures, minutes, board committees, transactions between the Company
and shareholders, and confidentiality.
The Board has overall responsibility for the Group and for overseeing its day-to-day management and
business activities. The Company shall be managed by an effective Board of Directors (the Board) which
is jointly responsible for the success of the Company. The Board represents and is accountable to the
Company’s shareholders.
The Board’s duties include drawing up the Group’s strategy and ensuring that the adopted strategy is
implemented, effective supervision of the Group CEO, control and supervision of the Group’s financial
situation, internal control, anti-corruption, and the Company’s responsibility to and communication with
the shareholders. The Board shall initiate any investigations it considers necessary to perform its duties.
The Board shall also initiate such investigations requested by one or more board members.
To ensure all matters are given unbiased and satisfactory consideration, members of the Board and
executive management cannot consider matters in which they have a special and prominent interest.
The Board of Directors jointly assess each board member´s impartiality with respect to matters under
consideration.
INSTRUCTIONS
The Board has drawn up a set of instructions for its members and executive management, which contain
a more detailed description of the Board’s duties, meetings, the Group CEO’s duties in relation to the
Board, the meeting schedule for the Board, participation, separate entries in the minutes, and duty of
confidentiality.
The Board and the Group CEO have separate roles, and there is a clear division of responsibility between
the two. The Group CEO is responsible for the Company’s group management team. The Board underlines
that special care must be exercised in matters relating to financial reporting and the remuneration of the
group management team.
In matters of importance where the Board’s chair is or has been actively involved, the Board’s discussions
shall be chaired by the vice chair.
Board members and the group management team shall inform the Board if they have any significant
interest in a transaction to which the Company is a party. For further information, please see Note 23 to
the Group Accounts in this Annual Report.
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The instructions for the Board and executive management were last revised by the Board on 20 September
2017.
ANNUAL ASSESSMENT
Each year, the Board shall carry out an assessment of its work in the previous year. The assessment is
based on the results of a questionnaire completed anonymously by each member of the Board and the
group management team.
AUDIT COMMITTEE
The Board has set up a sub-committee (Audit Committee) comprising a minimum of two and a maximum
of three members elected from among the Board’s members, and has drawn up a mandate for its work.
The committee assists the Board to exercise its supervisory responsibility by monitoring and controlling
the financial reporting process, systems for internal control and financial risk management, external
audits, and procedures for ensuring that the Company complies with laws and statutory provisions as well
as the Company’s own guidelines. From 1 January 2021, a new Audit Act was implemented in Norway. The
mandate for the Audit Committee will be updated in line with the principles and requirements of the new act.
As at 31 December 2020, the Audit Committee consisted of:
Board´s Audit Committee
Katrine Trovik
Tore Holand
Role
Chair
Member
Considered independent
Yes
Yes
REMUNERATION COMMITTEE
The Remuneration Committee is governed by a separate set of instructions adopted by the Board of
Directors. The members of the Remuneration Committee are appointed by and from among the members
of the Board of Directors and shall be independent of the Company's executive management. As at
31 December 2020, the Remuneration Committee consisted of:
Board's Compensation Committee
Per Grieg Jr
Marianne Ødegaard Ribe
Sirine Fodstad
Role
Chair
Member
Member
Considered independent
No
Yes
No
The primary purpose of the Remuneration Committee is to assist and facilitate the Board’s decision-
making in matters related to the remuneration of the group management team, review recruitment
policies, career planning and management development plans, and prepare matters relating to other
material employment issues with respect to executive management.
The committee shall hold discussions with the Group CEO concerning his/her financial terms of
employment. The committee shall submit a recommendation to the Board concerning all matters relating
to the Group CEO’s financial terms of employment.
The committee shall also keep itself updated on and propose guidelines for determining the remuneration
of the group management team. The committee is also the advisory body for the Group CEO in relation
to remuneration schemes which cover all employees to a significant extent, including the Group’s bonus
OUR FINANCIAL RESULTS system and pension scheme. Matters of an unusual nature relating to personnel policy, or matters
considered to entail an especially great or additional risk, should be put before the committee.
The Remuneration Committee reports and makes recommendations to the Board of Directors, but the
Board retains responsibility for implementing such recommendations.
The composition of the committee is subject to assessment each year.
Deviations from the Norwegian Code of Practice: None.
RISK MANAGEMENT AND INTERNAL CONTROL
The Board has a responsibility to ensure that the Group has proper risk management and such internal
control as is required by statute. The Audit Committee has been given a particular responsibility to monitor
critical business risks and address the quality and effectiveness of relevant risk-reducing measures.
Management performs a risk assessment quarterly, which is reviewed by the Audit Committee in
connection with quarterly reporting. The Audit Committee updates the Board after each meeting. Each
year, the external auditor carries out a review of the internal control which is an element of financial
reporting. The auditor’s review is submitted to the Audit Committee.
Internal control means activities and procedures carried out by the Group to safeguard its resources and
those of its customers, and to realize its goals through appropriate operations. The achievement of these
goals also requires systematic strategy development and planning, identification of risk, choice of risk
profile, as well as establishing and implementing control measures to verify that the goals are achieved.
The Group’s core values, external guidelines, and corporate social responsibility constitute the external
framework for internal control. The Group is decentralized, and considerable responsibility and authority
are therefore delegated to the regional operating units. Day-to-day implementation and assessment are a
line management responsibility. This means that corporate social responsibility is an integral component
of all our operations, for all management teams, units, and departments. Risk management and internal
control are designed to take account of this.
Internal control is an on-going process that is initiated, implemented, and monitored by the Group´s
Board of Directors, management and other employees. Internal control is designed to provide reasonable
assurance that the Group’s goals will be achieved in the following areas:
• Targeted, efficient, and appropriate operations.
• Reliable internal and external reporting.
• Compliance with laws and regulations, including internal guidelines
The Group has implemented the 2017 COSO Enterprise Risk Management (COSO ERM) scheme as the
main framework for risk management, where risks and opportunities are positioned in the context of
objectives and performance. The framework includes a description of the Group’s risk management policy,
as well as all financial control processes. There is an ongoing risk assessment of the main transaction
processes. Descriptions of the transaction processes are currently being revised, with the aim of clarifying
key controls and ensuring that these controls are in place. This means assessing all processes to determine
the probability of non-conformity arising, and how serious the economic consequences would be of any
such non-conformity. The establishment of controls in each region is intended to reduce the likelihood of
non-conformities with major economic consequences from arising.
The Group categorizes its main risks as: strategic risk, operational risk, financial risk, compliance risk, and
climate and nature risk. The Group’s greatest risk relates to biological development during the production
of smolt and sea farming. The Group therefore works continuously and systematically to develop processes
that safeguard animal welfare and reduce disease and mortality, and ensure that "best practices" are
implemented at all levels. Control routines have been prepared for employee working conditions, as well
as for escape prevention, animal welfare, pollution, water resources, and food safety.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTS
The long-term effect of climate change on general economic conditions could also have a material
impact on the Group. The Group’s climate risk management has been mapped in accordance with the
recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). Management is also
involved in a project to map risks related to the loss of nature, based on a similar framework as the TCFD.
Amongst the financial risks the Group is exposed to, are: market risk (including foreign exchange risk,
interest rate risk, and price risk), credit risk, and liquidity risk. The Group’s overall risk management
plan focuses on the unpredictability of the capital markets and seeks to minimize any potentially negative
effects on the Group’s financial results. The Group uses financial derivatives to hedge against some risks.
Risk management is drawn up at Group level and involves identifying, evaluating, and hedging financial
risk in close cooperation with the Group’s operational units. The Board has established written principles
for risk management related to foreign exchange and interest rate risk, price risk, and the use of financial
instruments.
The Board has established procedures for reporting within the Group. At the start of each year the Board
adopts a budget for the year. Deviations from the budget are reported on a monthly basis. Forecasts are
drawn up for the next five years and updated every month.
Every month, each region submits a report containing given Key Performance Indicators (KPIs). The
main KPIs are: EBIT/kg, feed factor, number of smolt transferred to the sea, production, production cost,
harvested volume, harvest cost, and level of sea lice. Analyses are made and measured against budget
figures and KPIs. Generational accounts for harvested generations will be updated on a monthly basis.
Each region’s performance data is summarized in a report submitted to the Board.
Each quarter, group management holds meetings with the management of each region. The aim of the
meeting is to follow up the results achieved in relation to the strategies and goals that have been set.
Deviations from the Norwegian Code of Practice: None.
11. R EMU NER AT I ON OF T H E B O AR D OF DIR EC T OR S
Proposals concerning the remuneration of the Board are submitted by the Nomination Committee.
Remuneration of Board members is not linked to the Company’s results. No board member has any
special duties in relation to the Company over and above those they have as a board member.
No board members participate in any incentive or share programs.
Board remuneration is shown in the financial statements of both the parent company and the Group
Deviations from the Norwegian Code of Practice: None.
12. R EMU NER AT I ON OF T H E GR OUP M AN A GEMEN T T E AM
The objective of the guidelines for salary and other remuneration payable to senior employees within the
Group is both to attract people with the required competence and retain key personnel. The guidelines
should also motivate employees to work with a long-term perspective to achieve the Group´s goals.
The determination of salary and other remuneration payable to the Group’s senior employees is therefore
based on the following guidelines:
OUR FINANCIAL RESULTS • Salary and other remuneration shall be competitive and motivating for each manager and for everyone
in the senior management group.
• Salary and other remuneration shall be linked to value creation generated by the Company for the
shareholders.
The principles used to determine salary and other forms of remuneration shall be simple and
understandable to employees, shareholders, and the public at large.
The principles used to determine salary and other forms of remuneration shall also be sufficiently
flexible to allow adjustments to be made on an individual basis in the light of the results achieved and the
contribution made by the individual to the development of the Group.
The salary paid to the group management team in 2020 consists of a fixed and a variable element. Under
the current bonus scheme, the variable salary cannot exceed six times the monthly salary.
The Company´s Board approved the allocation of cash options based on the AGM´s resolution on the share
and cash options program. The last approval granted by the AGM dates from 13 June 2019. Members of
group management are included in the synthetic options program, see Note 17 to the Group Accounts in
this Annual Report. The option agreements have been entered within the scope of the resolution adopted
by the AGM. Minutes of this AGM can be accessed here.
The remuneration payable to the Group CEO is determined at a meeting of the Board of Directors. The
salary payable to the other members of the group management team is determined by the Group CEO. The
Group CEO shall discuss the proposed group management remuneration with the Board’s chair before the
amount of remuneration is determined.
General schemes for the allocation of variable benefits, including bonus schemes and options programs,
are determined by the Board. Schemes which entail an allotment of shares, subscription rights, options,
and other forms of remuneration related to shares or the development of the Company’s share price, are
determined by the AGM. The Board´s statement on management remuneration is a separate item on the
AGM’s agenda. The AGM votes separately on guidelines to the Board and remuneration comprising the
synthetic options program.
As of 1 January 2021, new rules apply for reporting on remuneration to senior executives in listed
companies. The Board has to prepare and submit proposals for guidelines to the AGM for approval. New
guidelines must be adopted by 1 October 2021. As this is the first year the new rules apply, companies are
free to choose whether the rules are to be adopted at the AGM or an EGM. Grieg Seafood will prepare new
guidelines in line with the new requirements, to be approved at the AGM on 2 June 2021.
SEVERANCE PAY
The Group CEO is entitled to 12 months’ severance pay after termination of the employment relationship
by the Company. The Group CEO is further entitled to full salary during sick leave lasting up to 12 months’
duration.
A severance pay agreement has also been established for the CFO, providing for 12 months’ severance pay
after termination of the employment relationship by the Company.
Deviations from the Norwegian Code of Practice: None.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTS
13. INF OR M AT ION AND C OMMUNIC AT ION
FINANCIAL INFORMATION
The guidelines for reporting financial and other information to the stock market are defined within the
framework established by securities and accounting legislation and the rules and regulations of the stock
exchange. The Company also complies with the Oslo Stock Exchange (Euronext) Code of Practice for IR,
published on 1 July 2019.
The Board of Directors has adopted an investor relations policy to clarify roles and responsibilities related
to financial reporting and regulate contact with shareholders and the investor market. This policy is based
upon the key principles of transparency and equal treatment of market participants to ensure they receive
correct, clear, relevant, and up-to-date information in a timely manner. The IR policy is available on the
Company’s website.
In addition, the Board has adopted a separate manual on the disclosure of information, which sets forth the
Company's disclosure obligations and procedures.
The Company shall at all times provide its shareholders, the Oslo Stock Exchange (Euronext), and other
stakeholders (through the Oslo Stock Exchange information system) with timely and accurate information.
The Board shall ensure that the Company’s quarterly reports give a correct and complete picture of the
Group’s financial and commercial position, and whether the Group’s operational and strategic objectives
are being met. Financial reporting shall also contain realistic forecasts for the Group’s commercial and
performance-related development.
The Company publishes all information on its own website and through stock exchange/press releases.
Quarterly reports, annual reports, and stock exchange/press releases are published on the Company’s
website in accordance with the Company’s financial calendar. The presentation of each quarter’s results
is available as a webcast.
The Company shall be open and active with respect to investor relations, and shall hold regular
presentations in connection with the announcement of its annual and interim results.
SHAREHOLDER INFORMATION
The Board shall ensure that information is provided on matters of importance for shareholders and for
the stock market’s assessment of the Company, its activities, and results, and that such information is
made publicly available without undue delay. Publication shall take place in a reliable and comprehensive
manner, and by means of information channels which ensure that everyone has equal access to the
information.
All information shall be provided in English. The Company has procedures to ensure that this is done. The
Board of Directors’ communication with shareholders and other stakeholders is delegated to the Board’s
chair, or other appointed persons in specific cases. The Board’s chair shall ensure that the shareholders’
views are communicated to the entire Board.
Deviations from the Norwegian Code of Practice: None.
OUR FINANCIAL RESULTS 14 . TAK EO V E R S
CHANGE OF CONTROL AND TAKEOVERS
The Company has no established mechanisms which can prevent or avert takeover bids. Any such decision
must be made by a General Meeting of Shareholders and require a majority of two-thirds of the votes
cast and of the share capital represented. After a takeover bid has become known, the Board will not
use its authority to prevent it without the approval of the General Meeting. If a takeover bid is received,
management and the Board will ensure that all shareholders are treated equally. The Board will obtain
a valuation from a competent independent party and advise the shareholders whether to accept or reject
the bid. Shareholders will be advised of any difference of views among board members in the Board’s
statements on the takeover bid.
At its meeting of 13 October 2015, the Board adopted some core principles for how it will act in the event of
any takeover bid. These core principles accord with the Norwegian Code of Practice.
Deviations from the Norwegian Code of Practice: None.
15 . A U DI T OR
Through its Audit Committee, the Board seeks to collaborate fully and transparently with the Company’s
auditor. Each year, the Audit Committee obtains confirmation that the auditor meets the requirements of
the Norwegian Auditing Act concerning the independence and objectivity of the external auditor.
The Board of Directors ensures that the auditor’s auditing plan is submitted to the Audit Committee once a
year. In particular, the Audit Committee considers whether the auditor is performing a satisfactory control
function.
Both the Company’s management and the auditor comply with guidelines issued by the Financial
Supervisory Authority of Norway concerning the extent to which the auditor may provide advisory services.
The Board invites the auditor to meetings which address the annual financial statements. The Audit
Committee has an additional meeting with the auditor at least once a year to review the auditor’s report
on the Group’s accounting principles, risk areas, and internal control procedures. Moreover, each year
the Board has a meeting with the auditor when neither the Group CEO nor anyone else from company
management is present.
The auditor also attends meetings of the Audit Committee to consider quarterly reports and other relevant
matters. The auditor’s fee appears in the relevant note in this Annual Report, showing the breakdown of
the fee between auditing and other services.
Deviations from the Norwegian Code of Practice: None.
Bergen, 25 March 2021
Grieg Seafood ASA
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTS
GRIEG SEAFOOD
GROUP ACCOUNTS
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS GR OU P A C C OUN T S
212
213
214
216
218
Income statement
Comprehensive income statement
Statement of financial position
Statement of changes in equity
Cash flow statement
NO T E S
220
223
235
242
245
249
253
255
259
261
265
267
272
276
278
280
283
286
289
289
290
292
292
294
295
296
297
299
299
NOT E 1
NOT E 2
NOT E 3
NOT E 4
NOT E 5
NOT E 6
NOT E 7
NOT E 8
NOT E 9
General information
Accounting policies
Financial risk management
Critical accounting estimates and judgements
Non-current assets held for sale and discontinued operations
Business combinations
Investment in associates
Segment information
Biological assets and other inventories
NOT E 10
Intangible assets
NOT E 11
Property, plant and equipment incl. right-of-use assets
NOT E 12
NOT E 13
NOT E 14
NOT E 15
NOT E 16
NOT E 17
NOT E 18
NOT E 19
NOT E 2 0
NOT E 21
NOT E 2 2
NOT E 2 3
NOT E 24
NOT E 25
NOT E 26
NOT E 27
NOT E 2 8
NOT E 2 9
Borrowings
Leases
Classifications of financial instruments
Taxes
Salaries and personnel expenses
Share based payments
Share capital and shareholder information
Earnings per share and dividend per share
Cash and cash equivalents
Trade receivables
Other current receivables
Related parties
Financial income and financial expenses
Other operating expenses
Other current liabilities
New accounting standards
Contingent liabilities
Post-balance sheet events
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
INC OM E S TAT E ME N T
GRIEG SEAFOOD GROUP NOK 1 000
NOTE
2020
2019
CONTINUING OPERATIONS
Sales revenues
Other income
Other gains/losses
Share of profit from associates
Raw materials and consumables used
Salaries and personnel expenses
Other operating expenses
EBITDA before fair value adjustment of biological assets
Depreciation of property, plant and equipment and right-of-use assets
Amortization of licenses and other intangible assets
EBIT before fair value adjustment of biological assets
Fair value adjustment of biological assets
EBIT after fair value adjustment of biological assets
Financial income
Financial expenses
Net financial items
Profit before tax from continuing operations
Income tax expense
Net profit for the year from continuing operations
DISCONTINUING OPERATIONS
8
8
8
7
9
16/17
13/21/25
11/13
10
3/9
24
24
15
4 384 357
4 755 705
28 688
-4 786
3 350
-1 717 279
-499 546
-1 592 852
601 932
-360 178
-8 696
233 057
-289 705
-56 648
103
-247 895
-247 792
23 397
3 612
211
-1 498 482
-493 183
-1 407 263
1 383 996
-301 400
-5 671
1 076 926
-254 931
821 995
40 695
-66 374
-25 679
-304 440
796 315
-11 557
-315 997
-197 137
599 179
Net profit for the year from discontinued operations
5
-198 823
45 729
Net profit for the year
Allocated to
Controlling interests
Non-controlling interests
PROFIT AVAILABLE TO SHAREHOLDERS IN PARENT COMPANY
Earnings per share (NOK)
Diluted earnings per share (NOK)
-514 820
644 908
-541 054
26 234
619 510
25 398
-4.8
-4.8
5.6
5.6
5
19
19
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS C OM P R EHEN SI V E INC OME S TAT EMEN T
GRIEG SEAFOOD GROUP NOK 1 000
Net profit for the year
NOTE
NET OTHER COMPREHENSIVE INCOME THAT MAY BE RECLASSIFIED TO PROFIT/LOSS IN SUBSEQUENT YEARS
Currency effect on investment in subsidiaries
Currency effect on loans to subsidiaries
Cash flow hedges
Tax effect
3
3
NET OTHER COMPREHENSIVE INCOME NOT TO BE RECLASSIFIED TO PROFIT/LOSS IN SUBSEQUENT YEARS
Change in fair value of equity instruments
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
ALLOCATED TO
Controlling interests
Non-controlling interests
See Note 5 for specification of the net other comprehensive income for the year attributable to the discontinued operations.
2020
-514 820
-50 298
-23 667
-786
5 380
2019
644 908
52 826
29 819
-4 529
-5 564
-433
-107
-69 804
72 446
-584 624
717 354
-611 210
26 586
689 916
27 438
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
S TAT E MEN T OF FIN ANCI AL P O SI T ION
GRIEG SEAFOOD GROUP NOK 1 000
NOTE
31.12.2020
31.12.2019
ASSETS
Goodwill
Deferred tax assets
Licenses incl. warranty licenses
Other intangible assets incl. exclusivity agreement
Property, plant and equipment incl. right-of-use assets
Indemnification assets
Investments in associates
Other non-current receivables
Total non-current assets
Inventories
Biological assets
Trade receivables
Other current receivables
Derivatives and other financial instruments
Cash and cash equivalents
Total current assets
Assets held for sale
Total assets
6/10
15
6/10/12
6/10/12
11/13
6
7
7
9/12
9/12
3/12/21
22
3/14
3/20
638 019
29 293
1 508 452
38 015
3 033 154
40 000
84 421
9 476
109 526
998
1 133 630
16 205
2 957 942
—
81 071
3 130
5 380 830
4 302 503
78 001
2 545 903
179 384
133 069
84 189
275 427
177 847
3 437 948
459 897
334 625
7 368
214 497
3 295 972
4 632 181
5
1 972 725
—
10 649 527
8 934 684
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS GRIEG SEAFOOD GROUP NOK 1 000
NOTE
31.12.2020
31.12.2019
EQUITY AND LIABILITIES
Share capital
Treasury shares
Contingent consideration (acquisition of Grieg Newfoundland AS)
Other equity
Retained earnings
Total controlling interests
Non-controlling interests
Total equity
Deferred tax liabilities
Share based payments
Borrowings
Subordinated loans
Lease liabilities
Total non-current liabilities
Current portion of borrowings
Current portion of lease liabilities
Factoring liabilities
Share based payments
Trade payables
Tax payable
Public duties payable
Derivatives and other financial instruments
Other current liabilities
Total current liabilities
18
18
6
15
17
12
12
12/13
12
12/13
3/12
17
3
15
3/14
26
453 788
-4 686
701 535
84 401
3 135 880
4 370 918
—
4 370 918
908 958
491
3 376 178
—
531 644
4 817 272
104 435
153 195
—
2 411
562 848
14 791
21 867
14 346
94 616
968 509
446 648
-4 855
—
154 559
3 487 859
4 084 211
56 632
4 140 843
874 664
8 379
1 563 935
13 240
632 666
3 092 883
98 212
199 327
86 122
11 270
855 061
211 569
50 570
9 321
179 507
1 700 958
Liabilities directly associated with the assets held for sale
5
492 829
—
Total liabilities
Total equity and liabilities
BERGEN, 25 MARCH 2021
GRIEG SEAFOOD ASA
6 278 609
4 793 840
10 649 527
8 934 684
PER GRIEG JR.
Chair
TORE HOLAND
Vice Chair
SIRINE FODSTAD
Board Member
MARIANNE RIBE
Board Member
KATRINE TROVIK
ANDREAS KVAME
Board Member
CEO
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
S TAT E MEN T OF CH ANGE S I N EQUI T Y
GRIEG SEAFOOD GROUP NOK 1 000
Equity at 01.01.2019
Profit for 2019
Other comprehensive income
Total comprehensive income 2019
Sale of treasury shares to employees
Dividend
Transactions with owners [in their
capacity as owners] 2019
Total change in equity 2019
Equity at 31.12.2019
Profit for 2020
Other comprehensive income 2020
Total comprehensive income 2020
Contribution in kind
Contingent consideration (2)
Sale of treasury shares to employees
Establishment costs Grieg Seafood
Norway AS
Dividend
Sale of subsidiary - derecognition of
non-controlling interests (4)
Transactions with owners [in their
capacity as owners] 2020
Total change in equity 2020
Equity at 31.12.2020
TREASURY
SHARES (1)
CONTINGENT
CONS. (2)
OTHER
EQUITY (3)
RETAINED
EQUITY
84 152
3 308 166
SHARE
CAPITAL
446 648
—
—
—
—
—
—
—
-4 914
—
—
—
59
—
59
59
446 648
-4 855
—
—
—
7 140
—
—
—
—
—
7 140
7 140
—
—
—
—
—
169
—
—
—
169
169
453 788
-4 686
—
—
—
—
—
—
—
—
—
—
—
—
—
701 535
—
—
—
—
701 535
701 535
701 535
NON-
CONTROLLING
INTERESTS
49 458
25 398
2 040
27 438
TOTAL
3 883 510
644 908
72 446
717 354
—
2 005
-20 263
-462 027
-20 263
7 175
56 632
26 234
352
26 586
—
—
—
—
-460 022
257 332
4 140 843
-514 820
-69 804
-584 624
193 142
701 535
3 255
-13
-17 658
-17 658
-65 560
-65 560
619 510
—
619 510
1 946
-441 764
-439 818
179 692
3 487 859
-541 054
—
-541 054
186 002
—
3 086
-13
—
—
189 075
-351 979
3 135 880
-83 218
-56 632
814 701
230 076
—
4 370 918
—
70 406
70 406
—
—
—
70 406
154 559
—
-70 156
-70 156
—
—
—
—
—
—
—
-70 156
84 401
1) The recognized amount equals the nominal value of the parent company's holding of treasury shares
2) Contingent consideration related to the acquisition of Grieg Newfoundland AS, see Note 6.
3) Other equity, reclassified through OCI
4) Sale of Ocean Quality AS, see Note 5.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS SPECIFICATION OF RETAINED EQUITY NOK 1 000
Book value at 01.01.2019
Changes in 2019
Changes in 2020
Book value at 31.12.2020
EFFECT OF
SHARE-BASED
REMUNERATION
PURCHASE/
SALES OF
TREASURY
SHARES *
ACCUMULATED
INCOME LESS
ACCUMULATED
DIVIDEND
1 094
—
—
1 094
-10 508
1 946
3 086
-5 476
3 317 580
177 746
-355 065
3 140 261
* The amount classified under "purchase of treasury shares" equals the cost price in excess of nominal value. See also Note 2.
SPECIFICATION OF ACCUMULATED OTHER
COMPREHENSIVE INCOME
NOK 1 000
CHANGES IN FAIR
VALUE OF EQUITY
INSTRUMENTS
CURRENCY
EFFECT ON
LOANS TO
SUBSIDIARIES
CURRENCY
EFFECT ON
INVESTMENT IN
SUBSIDIARIES
CASH FLOW
HEDGES
Book value at 01.01.2019
Changes in 2019
Changes in 2020
Reclassification
Book value at 31.12.2020
503
-107
-433
—
-37
61 102
23 259
-50 298
-7 694
26 370
23 703
52 826
-18 461
—
58 068
-1 156
-5 572
-965
7 694
—
See Note 5 for specification of the accumulated other comprehensive income attributable to the assets classified as held for sale.
TOTAL
3 308 167
179 692
-351 979
3 135 880
TOTAL
84 152
70 406
-70 157
—
84 401
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
C A SH FL O W S TAT EMEN T
GRIEG SEAFOOD GROUP NOK 1000
EBIT after fair value adjustment of biological assets
Depreciation and amortization
Gain/loss on sale of property, plant and equipment
Share of profit from associates
Fair value adjustment of biological assets
Change in inventories and biological assets excl. fair value
Change in trade and other receivables
Change in trade payables
Change in other accruals
Change in non-current, cash-settled share option liability
Taxes paid
Net cash flow from operating activities
Proceeds from sale of property, plant and equipment
Payments on purchase of property, plant and equipment
Payments on purchase of intangible assets incl. licenses
Payments on business combinations
Accumulated cash acquired in business combinations
Sale of subsidiary, deconsolidation of cash and cash equivalents
Investment in associates and other invest.
Net cash flow from investing activities
Revolving credit facility (net draw-down/repayment)
Proceeds of long-term int. bearing debt
Repayment long-term int. bearing debt
Repayment short-term int. bearing debt
Repayment lease liabilities
Change in factoring liabilities
Interests received
Interests paid
Other financial items
Paid dividends
Net cash flow from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents - 01.01.
Currency translation of cash and cash equivalents
Proceeds sale of subsidiary, discontinued operations
Discontinued operations, other cash flow items
Cash and cash equivalents - 31.12.
NOTE
10/11
7
9
15
11
10
6
6
5
12
12
12
12
12/13
12
24
24
24
5
5
20
2020
-56 648
368 874
4 786
-3 350
289 705
-83 434
166 467
75 674
-136 869
-7 888
-205 162
412 156
781
-760 089
-159 066
-620 464
30 628
-84 754
20
-1 592 944
364 135
1 527 493
-102 267
—
-177 931
—
—
-94 665
-38 268
—
2019
821 995
307 070
-7 571
-211
254 931
-360 716
-22 664
117 650
210 911
-114
-128 215
1 193 067
2 095
-282 870
-1 635
—
—
—
-14 163
-296 573
368 930
—
-99 345
-46 597
-149 759
-194 320
1 699
-60 792
-3 087
-441 764
1 478 498
-625 035
297 710
271 460
214 497
1 982
16 337
-255 099
275 427
137 920
1 323
—
-196 206
214 497
The Cash Flow Statement is presented for the Group’s continuing operations. Comparable figures are re-presented. See further information in Note 5, including information on net cash
flows from operating-, investing- and financing activities from discontinued operations.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS P
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
NO T E 1
GE NE R A L IN F OR M AT ION
Grieg Seafood ASA is an integrated Norwegian seafood company
In April 2020, Grieg Seafood acquired 99% of the Grieg
engaged in salmon farming and processing. Grieg Seafood ASA
Newfoundland Group. Grieg Newfoundland AS is the holding
is a public limited company registered in Norway. The head office
company of Grieg Seafood Newfoundland Ltd Group, which include
is located at C. Sundtsgt. 17/19, Bergen. The Company was listed
the seafarm- and nursery-entities of the farming operations
on the Oslo Stock Exchange (Euronext) on 21 June 2007 and has
in Newfoundland, as well as an entity responsible for the
operations in Norway, the UK and Canada. The consolidated
development of the Newfoundland project. The financial position
financial statements have been prepared in accordance with
of Grieg Newfoundland Group has since the date of the acquisition,
International Financial Reporting Standards (IFRSs) as adopted by
15 April 2020, been 100% consolidated into Grieg Seafood Group.
EU, and were approved by the Board of Directors on 25 March 2021.
In the following, "Group" describes information relating to the
Grieg Seafood Group, while "Company" refers to the parent
GRIEG SEAFOOD GROUP COMPRISED THE FOLLOWING
ENTITIES AT 31 DECEMBER 2020:
company, Grieg Seafood ASA. Through 2020 Ocean Quality AS
Grieg Seafood Hjaltland UK Ltd, including all subsidiaries, and
(Sjór AS, new name in December 2020) has wholly owned Ocean
Ocean Quality UK Ltd (new name Grieg Seafood Sales UK Ltd), are
Quality UK Ltd, Ocean Quality USA Inc., Ocean Quality (Shanghai)
domiciled in the UK. Grieg Seafood BC Ltd, Grieg Seafood Sales
and Ocean Quality North America Inc., while the latter wholly
North America Inc (before Ocean Quality North America Inc.) and
owns Ocean Quality Premium Brands, Inc. On the 23 May 2020, we
Grieg Seafood Newfoundland Ltd (including three all subsidiaries)
entered into an agreement with Bremnes Fryseri to dissolve the
are domiciled in Canada, respectively in British Columbia for the
Ocean Quality sales partnership. At the same time, we announced
two former and Newfoundland as to the latter. Ocean Quality
that we would establish a fully owned sales organization to support
Premium Brands, Inc. (new name Grieg Seafood Premium Brands
growth and the downstream strategy of Grieg Seafood. At the end
Inc.) and Ocean Quality USA Inc. (new name Grieg Seafood Sales
of December 2020, we sold all our shares in Sjór AS. As part of the
USA Inc.) are both domiciled in the USA. Ocean Quality (Shanghai)
transaction with Bremnes Fryseri, Grieg Seafood has taken over
International Trading Company is part of Ocean Quality AS (new
the ownership of Ocean Quality North America Ltd., Ocean Quality
name Sjór AS) and was part of the settlement with Bremnes
USA Inc. and Ocean Quality UK Ltd. Through 2020 the operations
Fryseri AS and is deconsolidated from the Grieg Seafood Group.
and cooperation with Ocean Quality AS (Sjór AS) has been in
The remaining companies are domiciled in Norway.
line with the preceding years, as all activity up until the sale 31
December 2020 is reflected in the consolidated income statement
In November 2020, we announced that the Board of Grieg Seafood
of Grieg Seafood. The operations in Ocean Quality related to sale
has decided to divest our investment and operations in Shetland,
of fish produced by Bremnes Fryseri has however been defined
as we will focus on our operations in Norway and Canada going
as discontinued operations classified as held for sale. This impact
forward. The operations of the Grieg Seafood Hjaltland UK Ltd
the income statement and cash flow statement figures of 2020
Group is defined as discontinued operations and are presented and
and 2019 of the consolidated Grieg Seafood Group such that the
classified as held for sale in the consolidated financial position,
part of Ocean Quality related to fish farmed by Bremnes Fryseri,
and income statement and cash flow statement of Grieg Seafood.
is presented net, on a single line item, as profit from discontinued
In these financial statements we refer to this disposal group as the
operations in the income statement and presented separately from
“Shetland” disposal group. The Shetland disposal group includes
the income statement from continued operations of the Group. See
the prior reporting segment of Shetland UK, in addition to the UK
more information in Note 5. Grieg Seafood Group does not receive
sales operations. See both Note 5 and Note 8.
any of the profit from the sale of fish from Bremnes Fryseri, as
earnings are based on a skewed distribution of profit based on the
Grieg Seafood Hjaltland UK Ltd., Grieg Seafood Canada AS
delivered volume from each shareholder. The share of profit from
and Grieg Newfoundland AS are holding companies within
and share of equity in Ocean Quality AS attributable to Bremnes
the Group, which wholly own the production companies Grieg
Fryseri are been presented as non-controlling interests until the
Seafood Shetland Ltd., Grieg Seafood BC Ltd. and Grieg Seafood
sale of the shares was completed. As the sale transaction with
Bremnes Fryseri was completed at the end of the year 2020, Ocean
Quality (Sjór AS, incl. Ocean Quality Shanghai) is deconsolidated
and thus the financial position of Sjór AS is not included in the
consolidated financial position of Grieg Seafood Group at year-end.
Newfoundland Ltd (incl. it’s subsidiaries), respectively.
Grieg Seafood Shetland Ltd owns the following, dormant company
at the end of 2020 (no activities in this company): Isle of Skye
Salmon Ltd.
All amounts in these financial statements with note disclosures
are stated in NOK thousand unless otherwise specified.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS G R O U P L E G A L S T R U C T U R E
GRIEG
SEAFOOD
ASA
OWNER SHARE: 100%
OWNER
SHARE: 99%
OWNER
SHARE: 100%
GRIEG SEAFOOD
NORWAY AS
GRIEG SEAFOOD
ROGALAND AS
GRIEG SEAFOOD
FINNMARK AS
GSF CANADA
AS
GRIEG
NEWFOUNDLAND AS
GRIEG SEAFOOD
HJALTLAND LTD.
GRIEG SEAFOOD
SALES UK LTD
TYTLANDSVIK
AQUA AS (33.33%)
NORDNORSK
SMOLT AS (50%)
GRIEG SEAFOOD
BC LTD.
GRIEG SEAFOOD
NEWFOUNDLAND LTD
GRIEG SEAFOOD
SHETLAND LTD.
GRIEG SEAFOOD
SALES USA INC.
GRIEG SEAFOOD
SALES NORTH
AMERICA INC.
GRIEG SEAFOOD
PREMIUM BRANDS
INC.
GRIEG NL
SEAFARMS LTD.
GRIEG NL
NURSERIES LTD.
GRIEG NL
DEVELOPMENT LTD.
ISLE OF SKYE
SALMON LTD.
(DORMANT)
G R O U P S T R U C T U R E T H R O U G H 2 0 2 0
100%
NEW SALES COMPANY
GRIEG SEAFOOD NORWAY AS
Established November 2020
GRIEG SEAFOOD SALES UK LTD (DORMANT)
GRIEG SEAFOOD SALES USA LTD
GRIEG
SEAFOOD
ASA
60%
OCEAN QUALITY GROUP
GSF sold the shares in OQ AS at
31 December 2020. GSF acquires:
Ocean Quality UK Ltd.
Ocean Quality NA Inc.
Ocean Quality Premium Brands Inc.
Ocean Quality USA Inc.
100%
100%
99%
100%
100%
GRIEG SEAFOOD
ROGALAND AS
GRIEG SEAFOOD
FINNMARK AS
GRIEG
NEWFOUNDLAND AS
from 15 April
GRIEG SEAFOOD
NEWFOUNDLAND LTD
GRIEG SEAFOOD
CANADA AS
GRIEG SEAFOOD
B.C. LTD
GRIEG SEAFOOD
HJALTLAND UK LTD.
Held for sale
GRIEG SEAFOOD
SHETLAND LTD.
Held for sale
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S E G M E N T S T R U C T U R E T H R O U G H 2 0 2 0
GRIEG
SEAFOOD
ASA
NOR
NOR
UK
CAN
ROGALAND
FINNMARK
SHETLAND
SHETLAND
GRIEG SEAFOOD
ROGALAND AS
OCEAN QUALITY
AS
OCEAN QUALITY
USA INC.
OCEAN QUALITY
SHANGHAI
GRIEG SEAFOOD
FINNMARK AS
GRIEG SEAFOOD
SHETLAND LTD
GRIEG SEAFOOD
B.C. LTD
OCEAN QUALITY
AS
OCEAN QUALITY
UK LTD
OCEAN QUALITY
NORTH AMERICA INC
OCEAN QUALITY
USA INC.
OCEAN QUALITY
USA INC.
OCEAN QUALITY
PREMIUM BRANDS INC.
OCEAN QUALITY
SHANGHAI
OCEAN QUALITY
SHANGHAI
OCEAN QUALITY
SHANGHAI
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 2
A C C OUN T ING P OLICIE S
The principal accounting policies applied in the preparation
Contingent consideration classified as equity shall not be
of these consolidated financial statements are set out below.
remeasured and its subsequent settlement shall be accounted for
These policies have been consistently applied to all the periods
within equity. Other contingent considerations shall be measured
presented, unless otherwise indicated.
at fair value at each reporting date and changes in fair value shall
BASIS OF PREPARATION
The consolidated financial statements have been prepared in
Intragroup transactions, intercompany balances, and unrealized
accordance with International Financial Reporting Standards
profits and losses between Group companies are eliminated.
be recognized in the income statement.
(IFRSs) as adopted by the EU.
Reported figures from the subsidiaries are restated when this
is necessary to achieve consistency with the Group's accounting
The consolidated financial statements have been prepared under
policies.
the historical cost convention, modified for biological assets, equity
instruments, and financial assets/liabilities (including derivative
instruments) at fair value through profit or loss. The preparation of
financial statements in accordance with IFRSs requires the use of
CHANGES IN SHAREHOLDINGS IN SUBSIDIARIES
WITHOUT LOSS OF CONTROL
Transactions with non-controlling owners of subsidiaries that do
estimates. It also requires management to exercise its judgement
not involve loss of control are treated as equity transactions. When
in the process of applying the company’s accounting policies.
shares are purchased from non-controlling owners, the difference
Areas involving a higher degree of judgement or complexity,
between the consideration and the proportionate percentage of
or areas where assumptions and estimates are material to the
net assets recognized in the subsidiary’s statement of financial
consolidated financial statements are described in Note 4.
position relating to such shares is recognized in the parent
NEW STANDARDS ADOPTED BY THE GROUP
No new IFRS accounting standards have been implemented in
2020. See Note 27 for more information.
CONSOLIDATION PRINCIPLES
SUBSIDIARIES
Subsidiaries are all entities (including structured entities) over
company’s owners’ equity. Gains or losses on disposals of non-
controlling owners are similarly recognized in equity.
DIVESTMENT OF SUBSIDIARIES
When the Group no longer has control, any residual ownership
interest is measured at fair value with changes in value recognized
in profit or loss. Using this fair value as deemed cost, the interest
is subsequently classified either as an investment in associates
which the Group exercises control. Control over an entity arises
or as a financial asset. Amounts previously recognized in other
when the Group is exposed to variability in the return from the
comprehensive income relating to this company are treated as if
entity and has the ability to impact this return by virtue of its
the Group had disposed of the underlying assets and liabilities.
influence over the entity. Subsidiaries are consolidated from the
This could mean that amounts that were previously recognized in
day control arises and deconsolidated when control ceases.
other comprehensive income are reclassified to profit or loss.
The acquisition method of accounting is applied for acquisitions.
The consideration is measured as the fair value of any transferred
ASSOCIATES
Associates are entities over which the Group exercises significant
assets, liabilities or issued equity instruments. The fair value of
influence, but not control. Significant influence will generally exist
all the assets or liabilities resulting from contingent consideration
when the Group has a shareholding of between 20% and 50% of
agreements is included in the consideration. Identifiable assets
the voting rights. Investments are recognized at cost at the time
and liabilities and contingent liabilities assumed in a business
of acquisition, and the Group’s share of the results in subsequent
combination are initially measured at fair value at the acquisition
periods is recognized through profit or loss. The amount recognized
date. Non-controlling interests in the acquired entity are measured
in the statement of financial position includes any implicit goodwill
from time to time either at fair value, or at their proportionate
identified at the date of purchase.
share of net assets of the acquired entity.
Costs relating to business combinations are expensed as they are
incurred. In the case of multi-stage acquisitions, the proportion of
ownership from any earlier purchases is restated at fair value at
the date of control, with changes in value recognized in the income
statement.
Any share of profit or loss from associates that are closely linked
to the Group´s operations and thus part of the Group’s value chain,
are presented on a separate line and included in the Group’s EBIT.
The Group’s share of its associates’ post-acquisition profits or
losses is recognized in the income statement, the share of other
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comprehensive income is recognized in the consolidated statement
Property, plant and equipment and intangible assets are not
of comprehensive income and both are added to the investment in
depreciated or amortized once classified as held for sale. A disposal
associates in the statement of financial position. When the Group’s
group qualifies as discontinued operation if it is a component of an
share of losses in an associate equals or exceeds its interest in the
entity that either has been disposed of, or is classified as held for
associate, including any other unsecured receivables towards the
sale, and:
entity, the Group does not recognize further losses, unless it has
• Represents a separate major line of business or geographical
incurred obligations or made payments on behalf of the associate.
area of operations.
If necessary, the associates’ financial statements are restated to
•
Is part of a single coordinated plan to dispose of a separate
achieve consistency with the Group’s accounting policies.
major line of business or geographical area of operations, or;
•
Is a subsidiary acquired exclusively with a view to resale.
At the end of each accounting period, the Group determines
whether there is any need to recognize an impairment of the
Discontinued operations are excluded from the results of
investment in the associate. In such cases, the impairment
continuing operations and are presented as a single amount as
amount is measured as the difference between the recoverable
profit or loss after tax from discontinued operations in the income
amount of the investment and its carrying value, and the difference
statement.
is recognized in the income statement on a together with share of
profit or loss in “Share of profit from associates”.
Disclosures for the Group’s discontinued operations are provided
for in Note 5. All other notes to this consolidated financial
In the event of any gains or losses on transactions between the
statement refer to the Group’s continuing operations, unless the
Group and its associates, only the proportionate share relating
note explicitly states otherwise.
to external shareholders is recognized. Unrealized losses are
eliminated unless there is a need to recognize an impairment
for the asset that was the subject of the transaction. Accounting
SEGMENT REPORTING
Operating segments are reported in a manner consistent with
policies of associates are changed when necessary to ensure
internal reporting to the chief operating decision-maker. The
consistency with the accounting policies adopted by the Group.
chief operating decision-maker, who is responsible for allocating
Dilution gains and losses arising on investments in associates are
resources and assessing performance of the operating segments,
recognized in the income statement.
has been identified as the Group management.
In the event of a reduction in a shareholding in an associate
where the Group continues to exercise significant influence, only
FOREIGN CURRENCY TRANSLATION
The financial statements of each of the Group’s entities are
a proportionate share of amounts previously recognized in other
generally measured using the currency of the economic area
comprehensive income is reclassified to profit or loss.
in which the entity operates (“the functional currency”). The
NON-CURRENT ASSETS HELD FOR SALE AND
DISCONTINUED OPERATIONS
The Group classifies non-current assets and disposal groups as
consolidated financial statements are presented in Norwegian
Kroner (NOK), which is the parent company’s functional and
presentation currency.
held for sale if their carrying amounts will be recovered principally
through a sale transaction rather than through continuing use.
TRANSACTIONS AND BALANCE SHEET ITEMS
Foreign currency transactions are translated into the functional
Non-current assets and disposal groups classified as held for sale
currency using the exchange rates in force at the transaction date.
are measured at the lower of their carrying amount and fair value
Foreign exchange gains or losses resulting from the settlement
less costs to sell. Costs to sell are the incremental costs directly
of such transactions, are recognized in profit or loss. Translation
attributable to the disposal of an asset (disposal group), excluding
differences on monetary items (assets and liabilities), that are
finance costs and income tax expense.
not denominated in the entity´s functional currency, are also
The criteria for held for sale classification is regarded as met only
when the sale is highly probable and the asset or disposal group
is available for immediate sale in its present condition. Actions
required to complete the sale should indicate that it is unlikely that
significant changes to the sale will be made or that the decision
to sell will be withdrawn. Management must be committed to the
plan to sell the asset and the sale expected to be completed within
one year from the date of the classification.
recognized through profit or loss.
GROUP COMPANIES
The income statements and statements of financial positions
of the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the
presentation currency as follows:
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS The statement of financial position is translated using the closing
rate at the end of the period.
INTANGIBLE ASSETS
Intangible assets that arise internally within the Group are not
•
Income and expense items are translated at average exchange
recognized. Goodwill and licenses with an indefinite economic
rates for the period (if the average is not a reasonable estimate
life are subject to annual impairment tests. Impairment tests
of the cumulative effects of using the transaction rate, the
are performed more frequently if indications of impairment exist.
transaction rate is used).
Amortized licenses are tested for impairment only if there are
• Translation differences are recognized in other comprehensive
indications that future earnings do not justify the asset’s carrying
income and specified separately.
value.
When a foreign operation is sold, the exchange difference, which in
previous periods was recognized in other comprehensive income,
GOODWILL
Goodwill represents the excess of the cost of an acquisition over
is not accrued. The accumulated exchange difference on the sale
the fair value of the Group’s share of the net identifiable assets
of the foreign operation is hence reversed in other comprehensive
of the acquired entity at the date of acquisition. Goodwill on
income. Gains or losses on the sale are recognized on a basis of
acquisitions of subsidiaries is classified as an intangible asset.
zero exchange difference in the net profit on ordinary activities.
Goodwill on the purchase of a share in an associate is included
Goodwill and fair value adjustments of assets and liabilities on the
impairment and carried at cost less accumulated impairment
acquisition of a foreign entity are treated as assets and liabilities
losses. Impairment losses on goodwill are not reversed. Gains and
of the foreign entity and are translated using the closing currency
losses on the disposal of an entity include the carrying amount of
rate at the balance sheet date.
goodwill relating to the entity sold.
in “investments in associates”. Goodwill is tested annually for
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at historical cost less
For the purpose of impairment testing, goodwill is allocated to
those cash-generating units or groups of cash-generating units
depreciation and impairment losses. Historical cost includes
that are expected to benefit from the business combination in
expenditure that is directly attributable to the acquisition of the
which the goodwill arose.
asset. Cost may also include gains or losses transferred from
equity as a result of hedging the cash flow in foreign currency on
the purchase of property, plant and equipment.
LICENSES
Fish-farming licenses with an indefinite useful life are not
amortized but reviewed for
impairment annually, or more
Improvements are recognized in the asset’s carrying amount or as
frequently if there are indications that the carrying value may have
a separate asset when it is probable that future economic benefits
decreased.
associated with the improvement will flow to the Group and the
cost of the item can be reliably measured. All other repairs and
The Group considers the following licenses to have indefinite
maintenance are recognized in the income statement during the
useful lives:
financial period in which they are incurred.
Land and buildings mainly comprise factories and offices. Land
has no other contractual restrictions relating to the use of the
is not depreciated. Other operating assets are depreciated in
license. Licenses granted with a finite useful life, but where
accordance with the straight-line method so that the cost, or
the license holders can renew the licenses without incurring
remeasured value, is written down to residual value over its
considerable expenses.
Licenses granted with an indefinite useful life, where the company
expected useful economic life as follows:
• Buildings/real estate 10–50 years
Licenses with a finite useful life are amortized over their useful
• Plants, barges, onshore power supply 5–30 years
lives. These relate to water licenses for hatcheries and some
• Nets/cages/moorings 5–25 years
• Other equipment 3–35 years
specific seawater licenses. The following sections provide a
description of licenses relating to the Norway and Canada (BC)
segments. In addition, information related to the licenses of UK
The assets’ useful lives and residual values are estimated at each
(Shetland) is included below, of which is classified as held for sale
balance sheet date and adjusted if necessary.
An asset’s carrying value is written down to its recoverable amount
if the carrying value is greater than its estimated recoverable
amount. Gains and losses on disposals are recognized on a net
basis and represent the difference between the sales price and the
carrying value.
at 31 December 2020. Please refer to Note 10 Intangible assets
for an overview of the number and types of licenses, as well as
impairment testing, and to Note 5 for information on the held for
sale-classification of UK.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
NORWAY
The licensing regime for the production of salmon in Norway is
Duration and renewal
The Ministry may in individual decisions or regulations specify
enacted by the Norwegian Parliament through the Aquaculture
further provisions on the content of aquaculture licenses, including
Act. The Ministry of Trade, Industry and Fisheries grants permits
relating to scope, time limitations, etc., see the Aquaculture Act
for aquaculture (licenses). All aquaculture operations are subject
§ 5, second paragraph. Nonetheless, the preparatory work for
to licensing and no one can produce salmon without permission
the Aquaculture Act specifies that licenses are normally granted
from the authorities, see Aquaculture Act § 4.
without a time limit.
The aquaculture permit allows the production of salmon in limited
Grieg Seafood’s general food fish licenses and hatchery licenses
geographic areas within the current determined limitations of the
are not time-limited under current regulations. After the reform in
permit scope. The Aquaculture Act is administered centrally by the
2009, a number of licenses were time-limited, mainly for 15 years.
Ministry of Trade, Industry and Fisheries, with the Directorate of
As no government practices have been established relating to the
Fisheries as the supervisory authority. Regionally, several industry
renewal of broodstock licenses, the current understanding is that
authorities jointly manage full administrative and supervisory
expiration of licenses allows for application for renewal based on
responsibility within the regulating range of the Aquaculture
demand. A license for harvesting cages is valid for ten years and
Act. The county is the regional administrative body, while the
must be renewed on expiration, provided that the license is still
Directorate of Fisheries serves as appellate body in locality and
connected to an approved harvesting facility.
licensing matters.
Seawater licenses
Disposal and withdrawal
All licenses can be transferred and mortgaged in accordance
Each license for salmon in the sea is subject to a production
with the Aquaculture Act § 19. Transfers and mortgages must be
limit in the form of “maximum allowed biomass” (MAB). MAB
recorded in a separate register (the Aquaculture Register). It is not
does not directly limit the tonnes of fish produced within a year,
permitted to rent out licenses or license capacity.
but rather limits the biomass that can be kept in the sea at any
time. Normally, a license has a limit of 780 tonnes MAB, while in
The Aquaculture Act § 9 reviews the basis for withdrawal of an
Troms and Finnmark counties, a standard license has a limit of
aquaculture license. This states that there must be significant
945 tonnes MAB (provided all associated locations are situated in
breaches of the terms of an aquaculture license before it can be
Troms and Finnmark), but in conjunction with the new traffic light
revoked.
system, Finnmark acquire additional production capacity and have
now 964 tonnes MAB. See the Salmon Allocation Regulation § 15
(“laksetildelingsforskriften”). Such licenses are limited in number
BC
Grieg Seafood BC Ltd (GSF BC) has farms on both the west and
and only subject to application, following politically determined
east coasts of Vancouver Island. In order to operate farms in British
licensing rounds.
Hatchery licenses
Columbia, Canada, the following three licenses must be in place:
1. Aquaculture license – issued by the Department of Fisheries
Young salmon are defined as eggs, juveniles, parr or smolt to be
and Oceans and the First Nation
released in another location, see Salmon Allocation Regulation §
2. License of Occupation (Tenures) – issued by the Ministry of
4 f. Such licenses are not limited and thus subject to continuous
Forest, Lands and Natural Resource Operations
application for new licenses or changes to existing licenses. Per
3. Navigation Water Permit – issued by Transport Canada
year, as per regulations the production is limited to a number of
(Canadian public authorities)
15 million fish.
For restrictions regarding production quantity, see table in Note
R&D and broodstock licenses
10.
These licenses are not limited in number. Permits are means
tested, meaning that the applicant must demonstrate a need
Duration and renewal
for the production of eggs, specific research projects or for
1. Aquaculture license – duration of one year, renewal each year
educational purposes. Broodstock licenses include both a land
is a formality.
and sea phase, i.e. the broodfish and egg production are covered
by the same licensing process.
2. License of Occupation – duration of 2–20 years. Renewal is
applied for on expiration.
Harvesting pen licenses
Licenses utilized for pen-setting of live fish for harvesting. These
relate to specific locations.
3. Navigation Water Permit – duration of five years, but possible
to apply for renewal.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
New renewal process in Canada West
In June 2018, the Government of British Columbia announced
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets with an indefinite useful life are not amortized but are tested
a new policy regarding renewal of aquaculture licenses in the
annually for impairment. Assets that are subject to amortization
Broughton area. The new policy requires agreement with the local
are reviewed for impairment whenever there are indications that
First Nations prior to applying for license renewal from Fisheries
future earnings do not justify the carrying value.
and Ocean Canada (DFO). The new policy will be effective from
2022. The authorities want to cooperate with companies that
An impairment loss is recognized for the amount by which the
have licenses where the production might conflict with the wild
asset’s carrying value exceeds its recoverable amount. The
salmon and find alternative solutions such as moving the licenses
recoverable amount is the higher of an asset’s fair value less costs
to new areas. Grieg Seafood BC has one site in this area, and the
to sell and value in use. For the purposes of assessing impairment,
production will not be impacted by this change.
assets are grouped at the lowest levels for which there are
Licenses included in assets classified as held for sale in 2020: UK
financial assets, other than goodwill, that have suffered an
Grieg Seafood Shetland Ltd (GSF UK) has farms on both the west
impairment are reviewed for indicators of possible reversal of the
and east coasts of Shetland, as well as the west coast of Scotland.
impairment at each reporting date.
separately identifiable cash flows (cash-generating units). Non-
In order to operate farms in Scotland, the following five licenses
must be in place:
FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial
1. Water Environment (Controlled activities) “CAR” license –
asset of one entity and a financial liability or equity instrument of
issued by the Scottish Environment Protection Agency (SEPA)
another entity. The classification is performed in accordance with
2. Planning permission – issued by the local authorities (Town and
the substance of the contractual arrangement, and in line with the
Country Planning Act)
definitions of a financial asset, a financial liability and an equity
3. Crown Estate Lease/Permission (The Crown Estate Act 1961)
instrument.
4. Aquaculture Production Business License (APB) – issued by
Aqua Animal Health
Ordinary purchases and sales of investments are recognized on
5. Marine License (Navigation) – issued by the Scottish government
the trade-date – the date on which the Group commits to purchase
Duration and renewal
or sell the asset. All financial assets that are not stated at fair
value through profit or loss are initially recognized at fair value
1. CAR license – requires periodic inspection and monitoring. If a
plus transaction costs.
substantial negative impact on the environment can be proven
as a consequence of the operation, the production volume can
be reduced or, as in a worst-case scenario, revoked.
FINANCIAL ASSETS
Financial assets are classified, at
initial recognition, as
2. Planning Permission – indefinite duration; however, if the plant
subsequently measured at amortized cost, fair value through other
is left unused for three consecutive years, the license may be
comprehensive income (OCI), and fair value through profit or loss.
withdrawn.
3. Crown Estate Lease/Permission – 25 years’ duration. The
The classification of financial assets at initial recognition depends
normal procedure is to renew the licenses on expiration.
on the financial asset’s contractual cash flow characteristics and
4. APB – indefinite duration subject to compliance with the
the Group’s business model for managing them. With the exception
license´s conditions.
of trade receivables that do not contain a significant financing
5. Marine License – application for renewal required every six
component, the Group initially measures a financial asset at its
years.
fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. The Group has financial
Renewal is normally a formality.
assets classified as follows:
OTHER INTANGIBLE ASSETS
Acquired customer portfolios and computer software licenses
• Financial assets at amortized cost (debt instruments)
• Financial assets designated at fair value through OCI with no
are recognized in the statement of financial position at cost and
recycling of cumulative gains and losses upon derecognition
amortized over their estimated useful lives. Customer portfolios
are recognized in the statement of financial position at cost at the
date of purchase. Amortization is calculated using the straight-
line method over the estimated useful life, as follows:
• Customer portfolios 6 years
• Computer software 3–10 years
(equity instruments)
• Financial assets at fair value through profit or loss
Financial assets measured at amortized cost
The Group measures financial assets at amortized cost if both of
the following conditions are met:
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• The financial asset is held within a business model with the
part of a group of similar financial assets) is primarily derecognized
objective to hold financial assets in order to collect contractual
(i.e., removed from the Group’s consolidated statement of financial
cash flows and,
position) when:
• The contractual terms of the financial asset give rise on
a. The rights to receive cash flows from the asset have expired, or
specified dates to cash flows that are solely payments of
b. The Group has transferred its rights to receive cash flows from
principal and interest on the principal amount outstanding
the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a
Financial assets at amortized cost are subsequently measured
‘pass-through’ arrangement; and either
using the effective interest (EIR) method and are subject to
i. the Group has transferred substantially all the risks and
impairment. Gains and losses are recognized in profit or loss when
rewards of the asset, or
the asset is derecognized, modified or impaired.
ii. the Group has neither transferred nor retained substantially
The Group's financial assets at amortized cost includes trade
all the risks and rewards of the asset, but has transferred
receivables and other short-term deposit. Trade receivables that
control of the asset.
do not contain a significant financing component are measured
at the transaction price determined under IFRS 15 Revenue from
contracts with customers.
Equity instruments designated at fair value through OCI
Upon initial recognition, the Group can elect to classify irrevocably
Impairment on financial assets
The Group recognizes an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and
its equity investments as equity instruments designated at fair
all the cash flows that the Group expects to receive, discounted
value through OCI when they meet the definition of equity under
at an approximation of the original effective interest rate. ECLs
IAS 32. The classification is determined on an instrument-by-
are recognized in two stages. For credit exposures for which
instrument basis.
there has not been a significant increase in credit risk since initial
recognition, ECLs are provided for credit losses that result from
An equity instrument is any contract that evidences a residual
default events that are possible within the next 12-months (a
interest in the assets of an entity after deducting all of its liabilities.
12-month ECL). For those credit exposures for which there has
Gains and losses on these financial assets are never recycled to
a loss allowance is required for credit losses expected over the
profit or loss. Dividends are recognized as other income in the
remaining life of the exposure, irrespective of the timing of the
been a significant increase in credit risk since initial recognition,
income statement when the right of payment has been established,
default (a lifetime ECL).
except when the Group benefits from such proceeds as a recovery
of part of the cost of the financial asset, in which case, such gains
See the “Trade receivable”-section in this note for specific
are recorded in OCI. Equity instruments designated at fair value
accounting principles on expected credit loss on trade receivables.
through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its equity investments
under this category.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in
the statement of financial position at fair value with net changes in
fair value recognized in the income statement.
FINANCIAL LIABILITIES
Financial liabilities are classified, at
initial recognition, as
amortized cost (loans and borrowings), or as financial liabilities at
fair value through profit or loss.
Financial liabilities at amortized cost (loans and
borrowings)
After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortized cost using the EIR method.
This category includes derivative instruments and listed equity
Gains and losses are recognized in profit or loss when the liabilities
investments which the Group had not irrevocably elected to classify
are derecognized as well as through the EIR amortization process.
at fair value through OCI. Dividends on listed equity investments
are recognized as other income in the income statement when
Amortized cost is calculated by taking into account any discount or
the right of payment has been established. Derivatives are initially
recognized at fair value on the date a derivative contract is entered
into, and are subsequently stated at fair value on an ongoing basis.
premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortization is included as finance costs in the
income statement.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS financial derivative contracts. Derivatives are initially recognized
methods for accounting measurement of biological assets at level
at fair value on the date a derivative contract is entered into, and
3. The basic principle is that such assets shall be measured at fair
are subsequently stated at fair value on an ongoing basis.
value less costs to sell. Fair value is defined in IFRS 13 as “the
Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the
a liability in an orderly transaction between market participants
at the measurement date”. According to IFRS 13, the highest and
liability is discharged or cancelled or expires. When an existing
best use of the biological asset establishes the valuation premises.
price that would be received to sell an asset or paid to transfer
financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are
Considering the industry’s common goal to harmonize the model,
substantially modified, such an exchange or modification is treated
Grieg Seafood made adaptations to the model during 2018. The
as the derecognition of the original liability and the recognition of
previous calculation was based on a growth model which has
a new liability. The difference in the respective carrying amounts is
been the standard model in the salmon industry, while the new
recognized in the income statement.
HEDGING
Hedge accounting
The Group applies hedge accounting according to IFRS 9 for
calculation is cash-flow based (present value model). Changes to
the model involve calculation techniques and do not represent a
change in accounting policy.
Biological assets comprise of live fish, smolt and fish in sea. The
non-current foreign currency forward contracts entered into
fish are divided into two main groups, depending on the stage of
in connection with contracts of future physical delivery of fish
the life cycle. At the earliest stage of the life cycle, the fish are
to customers. Changes in value of foreign currency forward
classified in group 1) roe, fry and smolt. Group 1 biological assets
contracts which meet the hedging criteria are recognized in other
is disclosed as “biological assets onshore” in Note 9, see the
comprehensive income. Changes in the fair value of derivatives
tables “Status of biological assets” and “abnormal mortality –
entered into to hedge operating revenues are recognized in
write down”. Roe, fry and smolt are kept onshore.
revenues.
Non-hedge accounting
The Group do not utilize hedge accounting for its short-term
classified in group 2) biomass in sea. The group 2 biological assets
classification is further decomposed in Note 9 as “immature fish
foreign currency forward contracts. Such contracts are recognized
in sea, round weight < 4.60 kg” and “mature fish in sea, round
<
at fair value through profit or loss and presented as financial
weight > 4.60 kg” – see the tables “Status of biological assets”
>
income/financial expenses.
and “abnormal mortality – write down”.
When the fish is large enough to be released to sea, they are
NASDAQ FISH POOL SALE AND PURCHASE
AGREEMENTS
With regard to financial contracts relating to sale and purchase
• Fish onshore (smolt) are recognized at accumulated cost. The
best estimate of fair value is considered to be the accumulated
cost because of very little biological transformation. This
agreements on Nasdaq Fish Pool, changes in unrealized gains
assessment must be seen in the light of the fact that smolt are
and losses on the sale and purchase agreements are recognized
currently released to sea at a stage when their weight is still
net in the income statement as a value adjustment of biological
relatively low.
assets, while the carrying value is reported as a derivative in the
• For fish in sea, the fair value is calculated by applying a cash-
statement of financial position at the gross carrying amount of
flow based present value model.
sales and contracts, respectively. Assets/liabilities in this category
are classified as current assets/ current liabilities when they are
The fair value of fish in the sea is estimated for each location.
intended to be disposed of within 12 months, otherwise as non-
current assets/liabilities.
INVENTORIES
Inventories are stated at the lower of cost and net realizable value.
In accordance with the principle for highest and best use, the
Industry Group considers that the fish have optimal harvest weight
when they have a live weight of 4.60 kg, which corresponds to 4
kg gutted weight. Fish with a live weight of 4.60 kg or more are
Cost is determined using the first-in, first-out (FIFO) method. The
classified as ready for harvest (mature fish), while fish that have
net realizable value is the estimated sales price less the estimated
costs of completion and sale.
still not achieved this weight are classified as not ready for harvest
(immature fish).
BIOLOGICAL ASSETS
The accounting treatment of live fish by enterprises applying IFRS
is regulated by IAS 41 Agriculture. IAS 41 comprises a hierarchy of
The cash-flow based present value model does not rely on historical
and company specific factors. In a hypothetical market with perfect
competition, a hypothetical buyer of live fish would maximum be
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willing to pay the present value of the estimated future profit from
assets are recognized at fair value, the fair value adjustments of
the sale of the fish when it is ready for harvest. The estimated
the biological assets will be included into the estimated expenses
future profit, considering all price adjustments and payable fees
required to fulfil the contract. This implies that the Group may
for completion, constitutes the cash flow. No deductions are made
experience loss-making (onerous) contracts according to IAS 37
for sales expenses, as these are not observable on the market.
even if the contract price for physical delivery contracts is higher
Such expenses are also deemed immaterial.
than the actual production cost for the products. If that occurs, a
provision is made for the estimated negative value.
Incoming cash flow is calculated as a function of estimated volume
multiplied by estimated price. For fish not ready for harvest, a
Changes arising from physical delivery contracts are recognized
deduction is made to cover estimated residual costs to grow
as “fair value adjustment of biological assets”. The liability in the
the fish to harvest weight. The cash flow is discounted monthly
statement of financial position is recognized as other current
by a discount rate. The discount rate comprises three main
liabilities (see Note 9).
components: 1) the risk of incidents that influence cash flow, 2)
hypothetical license lease and 3) the time value of money. Please
Fish farming naturally comes with a certain level of loss of fish
refer to the Note 4 on significant accounting estimates for more
along the production cycle, and our budgets are typically produced
detailed information.
with an inherent assumption of a 0.5-1% monthly mortality. The
losses associated with normal levels of survival are not directly
When estimating the actual accumulated cost at the respective
recognized in the income statement. In periods where specific
seawater facility, direct costs (fish feed and similar) are allocated
abnormal incidents lead to reduced survival, we immediately
to each group of fish, set into sea at the same location. Financial
recognize write-downs of the biomass inventory, to better reflect
costs are not included in the costs of production.
the actual biomass in sea or on land. The write-down cost is
recorded as they arise under raw materials and consumables used
The sales price for fish in the sea are based on the forward price
in the income statement.
from Fish Pool. Fish Pool is a marketplace for financial purchase
and sale agreements for superior Norwegian Salmon size 3-6
kg gutted weight. The volume on Fish Pool is limited, but Grieg
TRADE RECEIVABLES
Trade receivables arise from the trading of goods or services within
Seafood’s opinion is that the observable forward prices must be
the ordinary operating cycle, and under normal terms of payment
seen as the best approach to a price for the sale of salmon. With
are initially recognized at nominal value. Trade receivables with
regard to foreign countries, the most relevant price information
longer terms of payment are discounted to present value, and
available for the expected harvesting period is applied. For fish
represents the Group’s unconditional right to consideration from
in the sea, the forward price in Norway is adjusted for historical
the customer.
differences in achieved prices between Norway and Canada/the
UK. The price/net sales value is adjusted for quality differences
(superior, ordinary and prod.), and for logistics expenses and sales
EXPECTED CREDIT LOSS ON TRADE RECEIVABLES
For trade receivables, the Group applies a simplified approach in
commissions. Estimated harvesting expenses are deducted.
calculating ECLs. Therefore, the Group does not track changes
in credit risk, but instead recognizes a loss allowance based on
The volume (biomass) is based on the actual number of individuals
lifetime ECLs at each reporting date. For receivables where the
in the sea at the balance sheet date, adjusted to cover estimated
credit risk has increased substantially after the establishment,
mortality up to harvest date and multiplied by the estimated
a write-down shall be made for the expected credit loss over
harvest weight per individual at the time of harvest. The fish in sea
the maturity of the receivables. The model for calculating loss
is adjusted for gutting waste, as the price is measured for gutted
allowance classifies the trade receivables into two groups: normal
weight. Budgeted harvesting and freight costs are applied. Foreign
risk and high-risk, based on their country of origin. Furthermore,
currency forward contracts associated with the date of harvesting
the trade receivables are classified as credit-insured receivable or
are applied when translating the price into CAD and GBP.
not. According to internal policy, 85% of all trade receivables must
The change in the fair value of biological assets is recognized
and recoverable amount, which is the present value of estimated
through profit or loss and presented as “fair value adjustment of
future cash flows, discounted at the original effective interest rate.
be credit insured. The provision is the difference between nominal
biological assets”.
Loss allowance is recognized as “other operating expenses” in the
income statement.
Onerous contracts are contracts where the expenses of fulfilling
the contracts are higher than the economic yield the company
expects to gain by fulfilling the contracts. The Group enters into
contracts related to future deliveries of salmon. As biological
FACTORING AGREEMENTS
The Group is engaged in factoring agreements that compromises
financing of outstanding receivables for the Ocean Quality entities
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS in Norway and in UK. In UK, the agreement is part of the Shetland
tax is determined using tax rates and laws that have been enacted
disposal group, and since Ocean Quality AS is deconsolidated, the
or substantively enacted by the balance sheet date and that are
Group do not hold factoring liabilities other than the liabilities
expected to apply when the related deferred tax asset is realized,
directly associated with the Shetland assets held for sale as of 31
or the deferred income liability is settled. Deferred tax assets are
December 2020. See the section “Derecognition of financial assets“
recognized to the extent that it is probable that future taxable
in this note for accounting principle disclosure for derecognition
income will be available, from which the temporary differences
of financial assets and Note 3 and 12 for further information on
can be deducted. Deferred tax is calculated on temporary
factoring agreements.
CONTRACT ASSETS
A contract asset is the right to consideration in exchange for goods
or services transferred to the customer. If the Group performs by
transferring goods or services to a customer before the customer
pays consideration or before payment is due, a contract asset is
recognized for the earned consideration that is conditional. See
differences arising on investments in subsidiaries and associates,
except where the timing of the reversal of the temporary difference
is controlled by the Group and it is probable that the temporary
difference will not be reversed in the foreseeable future.
EMPLOYEE BENEFITS
PENSION OBLIGATIONS
The company pays premiums to local, defined-contribution
“revenue recognition” in this Note for more information.
schemes for all employees. The company's pension schemes
CONTRACT LIABILITIES
A contract liability is the obligation to transfer goods or services to
meet the requirements in the Mandatory Occupational Pension
Act. Pension premiums are recognized in the income statement
through operations on an ongoing basis. Employer’s social security
a customer for which the Group has received consideration (or an
contributions are expensed based on paid pension premiums. The
amount of consideration is due) from the customer. If a customer
Group companies Grieg Seafood Rogaland AS and Grieg Seafood
pays consideration before the Group transfers goods or services to
Finnmark AS have a contractual early retirement pension scheme
the customer, a contract liability is recognized when the payment
(AFP). The financial commitments associated with this scheme
is made. Contract liabilities are recognized as revenue when the
are included in the Group’s pension expenses. The AFP early
Group fulfils the performance obligation(s) under the contract. See
retirement scheme follows the rules for public sector AFP, and
“revenue recognition” in this Note for more information.
both companies are members of the Norwegian Confederation
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, bank deposits,
of Trade Unions (LO)/the Confederation of Norwegian Enterprise
(NHO) scheme. The pension payment calculations are based on
standard assumptions relating to the development of mortality and
other short-term highly liquid investments with original maturities
disability as well as other factors such as age, years of service and
of three months or less. The overdraft facility is included in current
remuneration. Pension premiums are recognized in the income
borrowings in the statement of financial position.
statement through operations as they arise.
SHARE CAPITAL
Ordinary shares are classified as equity. Costs directly attributable
SHARE-BASED REMUNERATION
The Group operates a share-based management remuneration
to the issue of new shares or options, net of tax, are shown in
scheme with settlement in cash, where individual employees are
equity as a deduction, net of tax, from the proceeds.
obliged to buy shares proportionate to their annual salary. The
fair value of the employee services received in exchange for the
BORROWINGS
Borrowings are initially recognized at fair value when the funds
grant of the options is recognized as an expense. The total amount
to be charged over the vesting period is calculated on the basis
are received, net of transaction costs incurred. Borrowings are
of the fair value of the options granted, excluding the impact of
subsequently stated at amortized cost applying the effective
any non-market vesting conditions (for example, profitability and
interest method. Any difference between the proceeds (net of
sales growth targets). Non-market vesting conditions are included
transaction costs) and the redemption value is recognized in the
in assumptions about the number of options that are expected to
income statement over the period of the borrowings. Borrowings
vest. At each balance sheet date, the company revises its estimates
are classified as current liabilities unless the Group has an
of the number of options that are expected to be vested and
unconditional right to defer settlement of the liability for at least
recognizes the impact of the revision relative to original estimates,
12 months after the balance sheet date.
DEFERRED TAX
Deferred tax is provided for in full at nominal value, using the liability
method, on temporary differences arising between the value of
assets and liabilities for tax and accounting purposes. Deferred
if any, in the income statement. The Black and Scholes option
pricing model is used for valuation. The company´s obligations
are recognized under non-current liabilities if the latest possible
redemption date is more than one year into the future.
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SHARE SAVINGS PROGRAM
Grieg Seafood established a share savings program for its
employees in 2018 and it was continued in 2019 and 2020. It is the
the change in value because of passage of time is recognized as a
financial expense.
Board's intention that the plan shall be a continuing part of the
company's employee incentive scheme. The Board shall, however,
REVENUE RECOGNITION
Revenue from contracts with customers is recognized when
have the right to decide, in its sole discretion, whether the plan will
control of the goods or services are transferred to the customer
be extended in the future, and the terms of the plan.
at an amount that reflects the consideration to which the Group
Employees may invest up to NOK 25 000 per year. There is a 3 years
The Group recognizes revenue from the sale of goods at the point
lock-up period. The saved amount is deducted from the monthly
in time when control of the goods is transferred to the customer.
net salary and used to purchase Grieg Seafood shares on behalf of
Control of an asset refers to the ability to direct the use of and
the employees. The purchase will be made from transfer of Grieg
obtain substantially all of the remaining benefits from the asset,
Seafood's treasury shares or bought in the market. The purchase
and the ability to prevent others from directing the use of and
price and the number of shares acquired by the company will be
receiving the benefits from the asset.
expects to be entitled in exchange for those goods or services.
reported in accordance with the applicable regulations.
TERMINATION BENEFITS
Termination benefits are payable when employment is terminated
For the Group, this is when
• the Group has delivered its products to, and performed its
services for, the customer
by the Group before the normal retirement date, or whenever an
• the customer has accepted the products and collectability of
employee accepts voluntary redundancy in exchange for these
the related receivables, and
benefits. The Group recognizes termination benefits when it is
• the risks and rewards have been transferred to the customer.
demonstrably committed to either terminating the employment
of current employees according to a detailed formal plan without
The Group considers whether there are other promises in the
the possibility of withdrawal or providing termination benefits as a
contract that are separate performance obligations to which
result of an offer made to encourage voluntary redundancy.
a portion of the transaction price needs to be allocated. In
PROFIT-SHARING AND BONUS SCHEMES
The Group recognizes a provision where it has a contractual
considers the effects of variable consideration, the existence of
significant financing components and consideration payable to the
determining the transaction price for the sale of goods, the Group
obligation or where there is a past practice that has created a
customer (if any).
constructive obligation.
PROVISIONS
Provisions (e.g. environmental improvements, restructuring costs
and legal claims) are recognized when:
The Group has generally concluded that it is the principal in its
revenue arrangements, because it typically controls the goods or
services before transferring them to the customer.
• the Group has a present legal or constructive obligation as a
Revenue is shown net of value added tax, returns, rebates and
result of past events;
discounts and after eliminating intragroup sales.
•
it is more likely than not that an outflow of resources will be
required to settle the obligation;
• the amount of the obligation can be reliably estimated.
SALE OF FISH
The Group’s revenue streams are primarily the sale of mainly
comprise revenues from sale of whole and processed fish and
Restructuring provisions comprise lease termination penalties and
some ensilage, and processed fish. Sales contracts are engaged
employee termination payments. Provisions are not recognized for
as both spot sales and from fixed delivery contracts. Revenue
future operating losses.
from sale of salmon is generally recognized at the point in time of
delivery, as the Group considers delivery as the point in time which
Where there are a number of similar obligations, the likelihood
control of the goods/service is transferred to the customer. Each
that an outflow will be required in settlement is determined by
sale contract – either being spot sale or a fixed delivery contract
considering the class of obligations as a whole. A provision is
– is considered as one performance obligation. Each week, sale of
recognized even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured as the present value of the expenditures
expected to be required to settle the obligation, using a pre-tax
discount rate that reflects the current market situation and the
risks specific to the obligation. The increase in the provision due to
fish is settled with customer. The fixed delivery contracts that are
entered into with customers, specify per-week volume.
The sales price is determined upon contract settlement and is
based on available market price (hereof Nasdaq prices including
transport and margin, and the price is per kilogram). The price
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS varies according to the quality of the salmon and its size, and
the fish is mainly sold Delivery Duty Paid (DDP) to customer. The
SEPARATING COMPONENTS IN THE LEASE CONTRACT
For contracts that constitute, or contain a lease, the Group
payment is settled upon delivery, and the performance obligation
separates lease components if it benefits from the use of each
related to the sale of fish is satisfied at point in time of delivery.
underlying asset either on its own or together with other resources
That also applies to the fulfilment of physical delivery contracts.
that are readily available, and the underlying asset is neither highly
The Group’s consideration becomes unconditional at the point of
dependent on, nor highly interrelated with, the other underlying
delivery, and as the contracts generally hold one performance
assets in the contract. The Group then accounts for each lease
obligation (fulfilled at the point of time of delivery), the Group
component within the contract as a lease separately from non-
thus do not hold material contract assets. As such, the Group do
lease components of the contract.
not disclose further information on contract assets other than
receivables with unconditional right to consideration.
RECOGNITION OF LEASES AND EXEMPTIONS
At the lease commencement date, the Group recognizes a
The normal credit term of the Group’s sales transaction is 30
lease liability and corresponding right-of-use asset for all lease
days and based on the nature of the business of sale of fresh
agreements in which it is the lessee, except for short term leases
and frozen fish, the Group generally do not have any material
(defined as 12 months or less) and lease agreements where
contract liabilities. The Group generally do not engage in customer
the leased asset is of low value. For leases that meet these two
contracts where fulfilment of the performance obligation lies more
exceptions as elaborated on above, the Group recognizes the lease
than one year in the future, and as such the Group do not disclose
payments as other operating expenses in the income statement
further information on contract liabilities and related performance
when they incur.
obligations.
Cash refunds is given the customer if the sold product is delivered
Lease liabilities
The lease liability is recognized at the commencement date of the
with discrepancies compared to the agreed sale contract with the
lease. The Group measures the lease liability at the present value
customer, or if the product is damaged. Generally, refunds are not
of the lease payments for the right to use the underlying asset
material.
OTHER REVENUE STREAMS
In addition to the sale of fresh and frozen salmon, the Group also
during the lease term that are not paid at the commencement
date. The lease term represents the non-cancellable period of the
lease, together with periods covered by an option either to extend
or to terminate the lease when the Group is reasonably certain to
sells roe, smolt and ensilage, together historically making up
exercise this option.
about 1 % of the total sales. The Group furthermore offers harvest
services to other aquaculture companies in the case of surplus
The lease payments included in the measurement comprise of:
capacity (however these services generally constitute less than
• Fixed lease payments (including in-substance fixed payments),
1 % of total revenues). Revenue related to the before mentioned
less any lease incentives receivable
performance obligations are presented as other operating income
• Variable lease payments that depend on an index or a
in the Group’s income statement.
rate, initially measured using the index or rate as at the
INTEREST INCOME
Interest income is recognized in the income statement based on
Lease payments generally also include any exercise price of a
the effective interest rate (EIR) method.
purchase option/payments of penalties for terminating a lease,
provided that the Group is reasonably certain to exercise such an
commencement date,
DIVIDEND INCOME
Dividend income from investments or equity instruments, is
option.
recognized when the right to receive payment is established.
The lease liability is subsequently measured by increasing the
Dividend income from entities recognized under the equity method
carrying amount to reflect interest on the lease liability, reducing
are not recognized but recorded as a reduction in the carrying
the carrying amount to reflect the lease payments made and
value of the investment.
LEASES
IDENTIFYING A LEASE
At the inception of a contract, The Group assesses whether the
contract is, or contains, a lease. A contract is, or contains, a lease
if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
remeasuring the carrying amount to reflect any reassessment or
lease modifications, or to reflect adjustments in lease payments
due to an adjustment in an index or rate.
The Group does not include variable lease payments in the lease
liability. Instead, the Group recognizes these variable lease
expenses in the income statement.
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The Group presents its lease liabilities as separate line items in
Contingent liabilities acquired through the purchase of operations
the statement of financial position.
(an acquisition) are recognized at fair value even if it is not probable
that the liability will become unconditional. The assessment of
Right-of-use assets
The Group measures the right-of use asset at cost, less any
probability and fair value is subject to constant review. Subsequent
measurement is at the higher of the amount initially recognized
accumulated depreciation and impairment losses, adjusted for
(less any amount recognized as revenue) and the amount according
any remeasurement of lease liabilities. The cost of the right-of-
to the general provision measurement rules.
use asset comprise:
• The amount of the initial measurement of the lease liability
Contingent assets are not recognized in the statement of financial
recognized,
position, but are disclosed if it is likely that a benefit will accrue to
• Any lease payments made at or before the commencement
the Group.
date, less any incentives received, and
• Any initial direct costs incurred by the Group.
CASH FLOW STATEMENT
The Group’s cash flow statement shows the overall cash flow
The Group presents its right-of-use asset included on the financial
broken down into operating, investing and financing activities
statement line item “Property, plant and equipment incl. right-of-
using the indirect method. The cash flow statement illustrates the
use assets”.
effect of the various activities on cash and cash equivalents. Cash
flows resulting from the divestment of operations are presented
The Group applies the depreciation requirements in IAS 16
under investing activities.
Property, Plant and Equipment in depreciating the right-of-use
asset, except that the right-of-use asset is depreciated from the
The Group has prepared an overview of changes in the Group’s
commencement date to the earlier of the lease term and the
liabilities in accordance with IAS 7, Statement of Cash Flows (see
remaining useful life of the right-of-use asset. The Group applies
Note 12). This includes changes due to cash flow (e.g. utilization
IAS 36 Impairment of Assets to determine whether the right-of-
and repayments of loans) and changes without cash flow
use asset is impaired and to account for any impairment loss
effect such as acquisitions, sales, calculated interest rates and
identified.
unrealized currency translation differences.
DIVIDENDS
Dividends payable to the company’s shareholders are recognized
Changes in financial assets are disclosed if cash flows have been,
or will be, included in the cash flow from financing activities. This
as a liability in the Group’s financial statements when the dividends
may be the case for instance for assets pledged as security for
are approved by the AGM.
financial liabilities.
BORROWING COSTS
Borrowing costs incurred during the construction of operating
EARNINGS PER SHARE
Earnings per share are calculated by allocating the profit for the
assets are capitalized during the period of time that is required
year to the company’s shareholders based on a weighted average
to complete and prepare the asset for its intended use. Other
of the number of issued ordinary shares during the year. Diluted
borrowing costs are expensed in the income statement.
earnings per share are calculated by adjusting the weighted
CONTINGENT ASSETS AND LIABILITIES
Contingent liabilities are defined as:
• possible obligations resulting from past events whose existence
depends on future events,
average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares.
EVENTS AFTER THE REPORTING PERIOD
New information on the Group’s financial position on the end of the
• obligations that are not recognized because it is not probable
reporting period which becomes known after the reporting period
that they will lead to an outflow of resources entailing financial
is recorded in the annual accounts. Events after the reporting
benefits from the company,
period that do not affect the Group’s financial position on the end of
• obligations that cannot be measured with sufficient reliability.
the reporting period but which will affect the company’s financial
position in the future are disclosed if significant.
Contingent liabilities are not recognized in the annual financial
statements apart from contingent liabilities resulting from the
acquisition of an entity. Material contingent liabilities are disclosed,
with the exception of contingent liabilities where the probability of
the liability crystalizing is remote.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 3
FIN A NC I AL R ISK M AN A GEMEN T
CAPITAL MANAGEMENT
The Group aims to ensure sufficient access to capital to enable the business to develop in accordance with adopted strategies and thus
continue to be one of the leading players in the sector. Historically, the industry has always been vulnerable to price fluctuations in the
market. For this reason, accounting results may fluctuate considerably from year to year. Consequently, the Group also strives to ensure
that the business maintains an appropriate level of disposable liquidity.
The Group aims to provide a competitive return on invested capital to shareholders, by distributing dividends and increasing the share price.
The Board aims to achieve an average long-term dividend corresponding to 30-40% of the Company's profit after tax, allowing for the effects
of fair value adjustments of biomass on profits. However, all dividends must be assessed in the light of what is deemed to be a healthy and
optimal level of equity. Dividends are evaluated twice a year. Due to the increased volatility and uncertainty caused by the Covid-19 situation,
combined with an extensive investment plan and the fact that the Group has granted a temporary amendment to loan agreements with
secured lenders through the third quarter of 2021, the Board has decided to postpone the ordinary dividend for 2020.
At 31 December 2020, the Group had net interest-bearing liabilities, including lease liabilities, of NOK 3 931 million, see Note 12.
Funding mainly constitutes of bank loans, however in 2020 we successfully issued our first Green Bond issue of NOK 1 500 million. At year-
end 2020, 38% of our net interest-bearing liabilities consist of green financing. The level of liabilities and alternative forms of funding are
subject to constant evaluation.
FINANCIAL RISK FACTORS
The Group is exposed to a number of financial risks; market risk (including foreign exchange risk, interest rate risk and price risk), credit
risk and liquidity risk. The Group’s overall risk management program focuses on the volatility of the financial markets and seeks to minimize
potential adverse effects on the Group’s financial performance. The Group uses financial derivatives to reduce certain risks.
The Group identifies, evaluates and hedges financial risks in close cooperation with the Group’s operational units. The Board has established
written principles for the management of foreign exchange risk, interest rate risk and use of the Group´s financial instruments.
I) MARKET RISKS
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk from various currency exposures, primarily CAD, USD, GBP and
EUR. Foreign exchange risk arises from future commercial transactions, recognized assets, and liabilities and net investments in foreign
operations. The Group enters into foreign currency forward contracts to manage this risk.
TRADE RECEIVABLES AND
TRADE PAYABLES
CURRENCY IN NOK 1 000
2020
Trade receivables
Trade payables
2019
Trade receivables
Trade payables
NOK
USD
EUR
GBP
CAD
JPY
OTHER
CURRENCIES
TOTAL
121 859
409 259
39 234
12 708
—
1 145
—
—
18 291
139 737
—
—
—
—
179 384
562 848
28 521
649 551
147 185
-48
134 953
18 096
116 987
88 795
25 744
92 279
5 615
—
892
6 389
459 897
855 061
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NET INTEREST-BEARING LIABILITIES
CURRENCY IN NOK 1 000
NOK
USD
EUR
GBP
CAD
JPY
OTHER
CURRENCIES
TOTAL
2020
Cash and cash equivalents*
Loans to associated companies
Interest-bearing liabilities**
309 278
1 910
3 567 768
33 717
—
—
603
—
533 985
-104 272
36 098
—
—
—
106 466
Net interest-bearing liabilities
3 256 580
-33 717
533 383
104 272
70 368
—
—
—
—
2
—
—
-2
275 427
1 910
4 208 219
3 930 882
2019
Cash and cash equivalents*
Interest-bearing liabilities**
384 665
1 758 451
Net interest-bearing liabilities
1 373 786
-21 774
21 300
-124 398
-474
568 114
692 512
-92 791
228 186
320 976
20 897
36 007
15 110
4 205
—
-4 205
618
—
214 497
2 590 283
-618
2 375 786
*The Group has set up a group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company, is the legal account holder. Those subsidiaries which take part
in the agreement can make overdrafts on individual bank accounts as long as the Group's total bank deposit is positive. All subsidiaries participating in the group account scheme are
jointly and severally liable for the entire amount of the commitment under the scheme. Cash and cash equivalents include the currency exposure in the group account scheme. At 31
December 2020, the net amount of bank deposits in the group account scheme amounted to NOK 181 million (2019: NOK 3 million).
**For an overview of interest-bearing liabilities, see Note 12
The Group has investments in foreign subsidiaries whose net assets are exposed to foreign currency translation risk. Currency exposure
arising from the net assets of the Group’s foreign operations was previously primarily managed through borrowings denominated in the
relevant foreign currencies.
The base currency of the syndicated bank loan was previously solely in NOK, however after the renegotiation of the syndicate agreement in
February 2018, the term loan was split into NOK 600 million and EUR 60 million. This was carried forward as a great proportion of the sales
revenues are denominated in EUR, and hence the EUR loan would act as a hedge against currency fluctuation. Further, converting to EUR
loan would reduce the interest cost.
In 2020, we issued our first Green bond, of a total of NOK 1 500 million through two tap issues. The bond matures in 2025, and is denominated
in NOK.
The holding companies in the Group extends current and non-current loans to the subsidiaries denominated in these companies’ functional
currency. The non-current loans, with some exceptions, are considered to be equity in these companies, as there is not a planned repayment
for the principal amount outstanding of the loans. The currency effect of loans is recognized under "currency effect on loans to subsidiaries"
in consolidated comprehensive income. The numerical effects for 2020 and 2019 are presented below.
CURRENCY EFFECTS ON LOANS TO SUBSIDIARIES NOK 1 000
Currency effect
Tax effect (22%)
Net effect recognized in equity through OCI
2020
-23 667
5 207
-18 460
2019
29 819
-6 560
23 259
Sensitivity analysis
A 10% appreciation of NOK against USD, CAD, GBP and EUR at the balance sheet date would be expected to have the following effects on
net interest-bearing liabilities (NOK 1 000).
10% APPRECIATION AGAINST NOK 1 000
(Gain)/loss before tax in profit or loss on net interest-bearing liabilities,
31.12.2020
(Gain)/loss before tax in profit or loss on net interest-bearing liabilities,
31.12.2019
USD
3 372
2 177
EUR
GBP
CAD
-53 338
-10 427
-69 251
-32 098
-7 037
-1 511
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS FORWARD CURRENCY CONTRACTS
Hedge accounting has been applied to foreign currency forward contracts relating to non-current physical delivery contracts. The effect on
profit is recorded in other comprehensive income. Current forward currency contracts are not subject to hedge accounting. Value changes in
current forward contracts affect profit or loss, as these contracts are recognized at fair value through profit or loss, see accounting policies
(Note 2).
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT OR LOSS
SOLD
EUR
USD
Total
AMOUNT
CURRENCY
IN 1 000
BOUGHT
AMOUNT
CURRENCY IN 1 000
WEIGHTED
HEDGING RATE
MARKET RATE
MATURITY INTERVAL *
3 710
5 502
GBP
CAD
3 351
7 078
0.9031
1.2865
0.9047
1.2721
10.03.2021-12.01.2022
04.01.2021-05.02.2021
MARKET VALUE
NOK 1 000
31.12.2020
69
532
601
*Maturity specified as an interval for multiple contracts
HEDGING CONTRACTS THROUGH COMPREHENSIVE INCOME AT FAIR VALUE
At 31 December 2020, no hedging contracts through comprehensive income at fair value is present for the Group, as the hedging
arrangements have matured before the balance sheet date.
FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT OR LOSS
SOLD
CHF
CAD
EUR
EUR
GBP
JPY
USD
USD
Total
AMOUNT
CURRENCY
IN 1 000
16
631
113
7 784
445
83 400
2 419
9 995
BOUGHT
AMOUNT
CURRENCY IN 1 000
WEIGHTED
HEDGING RATE
MARKET RATE
MATURITY INTERVAL *
MARKET VALUE
NOK 1 000
31.12.2019
NOK
USD
GBP
NOK
NOK
NOK
NOK
CAD
149
475
96
77 191
5 184
6 773
21 633
13 173
9.1118
0.7528
0.8531
9.9169
11.6492
0.0812
8.9446
1.3177
9.0877
0.7696
0.8508
9.8638
07.01.2020
09.01.2020
05.05.2020
02.01.2020-04.01.2021
11.5936
06.01.2020-17.01.2020
0.0809
8.7803
1.2994
06.01.2020-10.01.2020
02.01.2020-07.02.2020
03.01.2020-14.02.2020
0
-90
-1
348
18
23
387
1 204
1 891
*Maturity specified as an interval for multiple contracts
HEDGING CONTRACTS THROUGH COMPREHENSIVE INCOME AT FAIR VALUE
SOLD
EUR
GBP
JPY
NOK
USD
Total
AMOUNT
CURRENCY
IN 1 000
1 260
2 211
369 000
92 522
525
BOUGHT
AMOUNT
CURRENCY IN 1 000
WEIGHTED
HEDGING RATE
MARKET RATE
MATURITY INTERVAL *
NOK
EUR
NOK
EUR
NOK
12 574
2 588
27 961
9 010
4 767
9.9760
1.1704
0.0758
10.2695
9.0747
9.8638
1.1754
0.0809
9.8638
8.7803
02.01.2020-06.03.2020
17.01.2020-26.10.2020
06.01.2020-08.01.2021
06.01.2020-04.01.2021
02.01.2020-10.01.2020
MARKET VALUE
NOK 1 000
31.12.2019
160
-17
-2 144
2 627
160
786
*Maturity specified as an interval for multiple contracts
(ii) Interest rate risk
Since the Group has no significant interest-bearing assets apart from bank deposits, its income and operating cash flows are largely
independent of changes in market interest rates. The Group’s interest rate risk arises from borrowings. Borrowings at variable rates expose
the Group to cash flow interest rate risk. Fixed-interest contracts are used to reduce this risk. The Group continuously monitors its interest
rate exposure. The Group calculates the impact on profit or loss of a defined interest rate change. The same change in the interest rate is
used for all currencies in each simulation. The scenarios are only run for liabilities that represent major interest-bearing positions.
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Sensitivity calculations show the following expected values: If the interest rate had been 1% higher (lower) throughout the year, all other
factors remaining unchanged, the pre-tax profit would have decreased (increased) by NOK 26.6 million in 2020 and NOK 20.7 million in 2019
due to the floating rate of interest on loans and deposits. The sensitivity analysis is based on average net interest-bearing liabilities during
2020 and 2019, irrespective of concluded interest rate swap agreements.
SENSITIVITY NOK 1 000
CHANGE IN INTEREST RATE POINTS
2020
2019
Effeet on profit before income tax
-/+ 1%
-/+26 577
-/+20 688
INTEREST RATE SWAP AGREEMENTS
The purpose of the Group’s risk management activities is to establish an overview of the financial risk that exists at any given time and
to provide more time to adapt to relevant developments. To this end, the Group has chosen to employ interest rate swap agreements to
establish greater stability for the Group’s variable-rate loan interest expenses. The Group has decided that at any given time, a certain
percentage of its variable interest-bearing liabilities should be hedged using interest rate swap agreements. A given proportion will always
be at a floating rate, while the remainder will be subject to potential hedging. This situation is constantly reviewed in light of the market
situation. The interest rate swap agreements have a duration of four years. The Company constantly evaluates whether these periods should
be rolled over.
INTEREST RATE SWAP
PRINCIPAL
NOK 1 000
FIXED
RATE (%)
BASIS OF
FLOATING RATE
Fixed rate paid - floating rate received
NOK 260 million
Fixed rate paid - floating rate received
NOK 200 million
Fixed rate paid - floating rate received
NOK 200 million
Fixed rate paid - floating rate received
NOK 200 million
Fixed rate paid - floating rate received
NOK 200 million
Fixed rate paid - floating rate received
NOK 200 million
Total
1.28
1.64
1.61
1.35
1.07
0.71
Nibor 3 months
Nibor 3 months
Nibor 3 months
Nibor 3 months
Nibor 3 months
Nibor 3 months
MATURITY
20.10.2021
05.07.2022
28.08.2023
04.03.2024
05.07.2024
18.12.2024
MARKET VALUE
NOK 1 000
31.12.2020
MARKET VALUE
NOK 1 000
31.12.2019
-1 867
—
-5 465
-4 402
-2 612
372
2 641
1 016
1 820
—
—
—
-13 975
5 477
Interest rate swap contracts assessed at market value excl. accrued interest
The interest swap with maturity 05.07.2022 has been amended during 2020, new maturity date is 05.07.2024 and new rate is 1.07 % until maturity 05.07.2024.
INTEREST RATE DERIVATIVE CONTRACT
PRINCIPAL
RATE (%)
MATURITY
Interest rate derivative contract
NOK 200 million
0.38/0.72
18.12.2024
Total
CROSS CURRENCY INTEREST RATE SWAP
PRINCIPAL
MATURITY
Cross currency interest rate swap (NOK/EUR)
NOK 200 million / EUR 23 million
25.06.2025
Interest rate option, floor
Total
NOK 250 million
25.06.2025
MARKET VALUE
NOK 1 000
31.12.2020
MARKET VALUE
NOK 1 000
31.12.2019
310
310
—
—
MARKET VALUE
NOK 1 000
31.12.2020
MARKET VALUE
NOK 1 000
31.12.2019
6 693
423
7 115
—
—
—
(iii) Price risk
Financial salmon price contracts allow the buyer and seller to agree prices and volumes for future delivery. The Group targets a contract
share of 20-50%. As of 31 December 2020, estimated contract share for the full-year 2021 is 28%. In UK, no financial salmon price contracts
had been entered into for 2021 at year-end 2020. The total share of fixed price contracts in 2020 was 41% for Norway The financial contracts
are presented gross in the balance sheet with changes in value recognized through profit/loss as part of the fair value adjustment of
biological assets. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair
value adjustment. As at 31 December 2020, the Group had financial salmon contracts for 2020 totalling NOK 76 million, of which all were
sales contracts, and physical delivery contracts recognized as liability, was zero.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS Fair value of financial derivatives
The carrying value of derivatives and other financial instruments as at 31 December is shown below. The carrying value equals fair value.
Positive values are classified as an asset, while negative values are classified as a liability in the balance sheet.
FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000
ASSETS
2020
CURRENT
LIABILITIES
2019
ASSETS
CURRENT
LIABILITIES
Forward currency contracts at fair value through profit or loss
Forward currency hedging contracts at fair value through
comprehensive income
Cross currency interest rate swap w/ interest rate floor-option
Interest rate swap agreements
Financial salmon contract - purchase contracts
Financial salmon contract - sales contracts*
Total financial instruments at fair value
601
—
7 115
681
—
75 792
84 189
—
—
—
-14 346
—
—
-14 346
1 891
—
—
5 477
—
—
7 368
—
786
—
—
—
-10 107
-9 321
*At year-end 2020, we had NOK 27 million classified as current-receivable (Note 22) related to realized financial salmon contracts as of 31 December 2020. In 2019, the comparative
figure was a current liability (Note 26) of NOK 11 million. These amounts represent settled price contracts, not part of the fair value-derivative amount, however the receivable/liability
on the settled positions have not been settled between Grieg Seafood and our counterpart at year-end.
II) CREDIT RISK
Credit risk is managed at Group level. Credit risk arises from transactions involving derivatives and deposits in banks and financial institutions,
transactions with customers, including trade receivables, and fixed contracts as well as loans to associates. The Group has procedures to
ensure that products are only sold to customers with satisfactory creditworthiness. The Group normally sells to new customers solely
against presentation of a letter of credit or against advance payment. Credit insurance is used when deemed necessary. For customers
who have a reliable track record with the Group, sales up to certain previously agreed levels are permitted without any security. Factoring
agreements have been concluded with Ocean Quality in the past - we're establishing our own fully owned sales organization, which is
operational in Q1 2021. At 31 December 2020, besides factoring liabilities classified as liabilities directly associated with the Shetland assets
held for sale, the Group is not exposed to factoring liabilities.
Up until year-end 2020, all fish produced in the Group was sold to Ocean Quality Group, which in turn sells to external customers. The sales
companies secures the bulk of its sales through credit insurance and bank guarantees. At year-end 2020, Ocean Quality AS is deconsolidated
and renamed Sjór AS. The Grieg Seafood Group had until year-end intercompany receivables on Sjór which at year-end is external, totalling
NOK 79 million of the Grieg Seafood Group's trade receivables.
The book value of financial assets represents the maximum credit exposure. For further information about loss allowance, please refer to
Note 21.
MAXIMUM CREDIT RISK EXPOSURE NOK 1 000
Trade receivables
Other receivables
Cash and cash equivalents
Total
III) LIQUIDITY RISK
NOTE
21
22
20
2020
18 595
—
275 427
294 022
2019
278 391
60 000
214 497
552 888
The Group adopts a prudent approach to liquidity risk management, which includes maintaining sufficient cash and marketable securities,
securing funding through sufficient credit facilities and maintaining the ability to close market positions when considered appropriate.
Due to the dynamic underlying nature of the business, the Group aims to secure flexibility through available credit lines. The Group maintains
a financing agreement through a 50/50 syndicate with DNB and Nordea. The agreement includes a non-current credit facility of NOK 1 500
million and a bank overdraft facility of NOK 100 million. In addition, we have a NOK 600 million RCF/bridge loan, undrawn at 31 December
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2020, which matures at 31. March 2022 (extended maturity from 31 December 2021 to 31 March 2022 after the balance sheet date of 31
December 2020). For further information about the agreement and other non-current liabilities, see Note 12.
Management monitors the Group’s liquidity reserve, which comprises credit facilities (see Note 12) and cash and cash equivalents (Note 20),
based on expected cash flows. This is generally carried out at Group level in cooperation with the operating companies. Grieg Seafood ASA
has in Q4 2020 been granted a temporary amendment to the loan agreement with secured lenders through the third quarter of 2021, see
more information in Note 12. At year-end 2020, the Group had undrawn credit facilities of NOK 1 203 million, in addition to cash reserves of
NOK 275 million, and an equity-ratio of 41% (equity-ratio according to covenants of 43%). The Group is continuously monitoring the liquidity
levels. Cash flow forecasts for all farming regions, sales and the Group are performed regularly, and simulation/stress tests of the liquidity
risk is carried out.
The following table shows a breakdown of the Group’s non-derivative financial liabilities, classified by maturity structure. The amounts in the
table are undiscounted contractual cash flows. Note 12 shows the payment profile for the Group’s non-current liabilities.
31.12.2020
NOK 1 000
Green bond loan instalments
Green bond loan interest - floating
Non-current term-loan instalments
Term-loan interest - floating
Non-current credit facility
Interest non-current credit facility
Other non-current liabilities
Interest on other non-current liabilities
Lease liabilities (prior IAS 17 finance leases)
Interest on lease liabilities (prior IAS 17 finance leases)
Lease liabilities (prior IAS 17 operational leases)
Interest on lease liabilities (prior IAS 17 operational leases)
Trade payables
Total liabilities
KEY FOR TABLE
M = Months Y = Year
YRS = Years
31.12.2019
NOK 1 000
Non-current loan instalments
Loan interest - floating
Non-current credit facility
Interest non-current credit facility
Lease liabilities (prior IAS 17 finance leases)
Interest on lease liabilities (prior IAS 17 finance leases)
Lease liabilities (prior IAS 17 operational leases)
Interest on lease liabilities (prior IAS 17 operational leases)
Trade payables
Factoring liabilities
Total liabilities
KEY FOR TABLE
M = Months Y = Year
YRS = Years
< 3 M
<
—
14 625
51 176
8 643
—
8 792
1 514
630
16 755
3 025
20 739
1 993
562 848
3 M
- 1 Y
—
44 688
51 176
24 438
—
Y 2
—
Y 3
—
Y4
Y 5 > 5 YRS
>
TOTAL
— 1 500 000
— 1 500 000
59 313
59 313
59 475
29 575
102 352
767 636
15 077
2 311
—
996 646
26 281
17 441
569
1 833
61 014
8 257
54 687
5 293
—
2 820
2 625
71 771
9 159
66 526
4 457
—
2 819
7 281
2 503
64 930
7 289
38 955
3 459
—
—
—
—
—
5 867
2 214
55 337
5 707
29 109
2 606
—
—
—
—
—
—
—
—
—
—
266 988
972 339
50 468
996 646
55 334
54 395
16 259
6 160
1 916
30 185
4 537
43 932
119 448
433 186
4 348
7 354
946
—
6 771
44 555
34 284
251 653
5 429
24 182
—
562 848
690 740
278 234
351 539
1 953 141
160 314
1 594 231
200 654 5 228 853
< 3 M
<
49 106
5 068
—
4 304
19 080
3 670
34 595
2 651
855 061
86 122
3 M
- 1 Y
49 106
14 941
—
13 412
54 495
9 985
91 157
6 527
—
—
Y 2
98 212
18 129
—
17 844
69 040
11 229
90 347
6 087
—
—
Y 3
98 212
16 096
Y4
748 215
2 563
—
629 319
17 844
62 852
9 009
72 193
3 790
—
—
2 999
56 068
7 046
34 918
2 229
—
—
Y 5 > 5 YRS
>
TOTAL
—
—
—
—
— 1 042 850
—
—
—
56 797
629 319
56 402
46 423
144 195
452 152
5 471
22 192
1 407
—
—
10 446
34 440
17 935
—
—
56 855
379 841
40 626
855 061
86 122
1 059 658
239 622
310 887
279 995
1 483 355
75 493
207 015
3 656 026
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS FAIR VALUE ESTIMATION
(I) FINANCIAL INSTRUMENTS
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques (see Note 14). The
Group uses different methods and makes assumptions based on market conditions at each balance sheet date. The fair value of forward
foreign exchange contracts is determined using quoted forward exchange rates at the balance sheet date. The fair value of financial salmon
contracts is determined using forward prices from Fish Pool.
(II) TRADE RECEIVABLES AND TRADE PAYABLES
The nominal value less write-downs for realized losses on trade receivables and trade payables is assumed to correspond to the fair value
of these items. The fair value of financial liabilities is assumed to approximate to the book value, as virtually all these items are exposed to
floating interest rates.
(III) BIOLOGICAL INVENTORIES
Fish in sea is measured at estimated fair value. Consequently, the value of biological inventories is likely to vary more than the value of
inventories based on cost. The estimated fair value varies for a number of reasons, including volatility in the price of Atlantic salmon,
factors relating to production, changes in harvesting schedules, and changes in the composition of inventories. Grieg Seafood considers
three components to be key parameters for valuation; price, estimated harvest biomass volume and the applied monthly discount rate. The
monthly discount rate is applied to expected future cash flows, to account for risk, time value of money and the cost of contributory assets.
In the following table is a sensitivity analysis, showing the change in the fair value of the biological assets, and hence the Group profit before
tax, in the event of changes in these parameters.
SENSITIVITY ANALYSIS OF BIOMASS - EFFECT ON PRE-TAX PROFIT NOK 1 000
Change in discount rate +1%
Change in discount rate -1%
Changes in sales price +1 NOK/kg
Changes in sales price -1 NOK/kg
Changes in sales price +5 NOK/kg
Changes in sales price -5 NOK/kg
Changes in biomass volume +1% kg
Changes in biomass volume -1% kg
2020
-120 801
108 247
81 184
-54 322
304 472
-223 100
23 458
-23 458
2019
-127 246
138 808
59 411
-59 411
297 055
-297 057
35 207
-35 207
Note that change in harvest volume have a linear effect on the fair value of biological assets. Therefore any change in harvest volume as a
multiple of the numbers in the above table, will have the similar multiple effect on the fair value of biological assets.
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NO T E 4
CR I T IC A L A C C OU N T ING E S T IM AT E S AND JUDGEMEN T S
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS
Management is required to make estimates and assumptions
to comply with license requirements or related regulations. Also,
local government may change the way licenses are renewed. In
concerning the future, which affect which accounting policies
June 2018, B.C government announced a new approach to salmon
are to be used and reported amounts for assets, liabilities and
farm tenures in BC, Canada. The new regulation will be effective
contingent liabilities in the balance sheet, as well as income
from June 2022, where the licenses must be approved by both
and expenses for the accounting year in accordance with IFRS.
Fisheries and Oceans Canada (DFO) and the local First Nations in
Estimates and underlying assumptions are continuously evaluated
the area where the company has its licenses. There are several
and are based on historical experience and other factors, including
indigenous nations with different opinions on how they want to
expectations of future events that are believed to be probable under
develop the salmon farming industry. The DFO wants to cooperate
the present circumstances. The final outcomes may deviate from
with companies that have licenses where the production might
these estimates. Changes in accounting estimates are recognized
conflict with the wild salmon and find alternative solutions such
in the period in which the estimates are changed. The Group is
as moving the licenses to new areas. In December 2020, the
involved in claims and complaints related to the sale of goods on a
Government in Canada has decided to phase out salmon farming
continuous basis. As of year-end there were no material ongoing
licenses in Discovery Islands, British Columbia, Canada West, by
issues.
ESTIMATED IMPAIRMENT OF GOODWILL, LICENSES
AND PROPERTY, PLANT AND EQUIPMENT
The Group tests whether goodwill and licenses have suffered any
30 June 2022. Grieg Seafood has applied for a judicial review of the
government’s decision. Impacted harvest volumes represented 5%
production capacity or approximately 2 600 GWT of our total annual
harvest volume in BC. Harvest volume for 2021 will not be impacted
by the new regulation. We have production capacity that has not
impairment on an annual basis, in accordance with the accounting
been utilized in BC, which will cover the losses of the production
policy stated in Note 2. The recoverable amounts of cash-generating
capacity in Canada West. The decision from the federal government
units are determined based on value-in-use calculations. These
will not in the long term have significant negative effect of the total
calculations require the use of estimates of future cash flows
production. There will be some cost to clean up the site and move
from the cash-generating unit, and the application of a discount
the equipment to another production area. The government and
rate in order to calculate the present value of future cash flows.
the First Nations in Canada have a focus on sustainable utilization
Expectations of future cash flows will vary over time. Changes in
of ocean resources, and are following up that the farming
market conditions and expected cash flows can result in losses
industry complies with the requirements. The agreements with
due to future value decreases. The value of long-term growth
First Nations are set to varying durations of 5 to 25 years, but
in demand, changes in market competition, the strength of the
there are continuous meetings where the parties review how the
production stage in the value chain and thus also expectations of
collaboration has worked and agree to extend the duration of the
the long-term profit margin are also of significance. The different
agreement beyond 25 years or longer. Such meetings are part of
parameters could variously affect the value of the licenses over
the agreements. Even though the agreements cannot be said to
time. Any change in these critical assumptions will result in
be everlasting, the Group has nevertheless classified the licenses
related write-downs, or the reversal of write-downs of the value
as indefinite lives, as finding the right depreciation profiles is very
of licenses in accordance with the accounting policies described in
difficult. Given that it is desirable for both First Nations and the
Note 2. Please also refer to Note 10 for further comments on tests
Group to have a close and good working relationship and that they
relating to value impairment.
want the Group to operate in the area, the Group’s best estimate
is that the licenses will still be classified as indefinite lives. This
CLASSIFICATION OF LICENSES
A significant judgment is whether a license should be amortized
will be continuously assessed. If the situation changes and the
Group agrees not to use the option to extend the duration of the
over its definite life, or whether it is deemed to have an indefinite life
agreement, the estimate of the remaining depreciation period
and tested for impairment only. All licenses where the Group has
must be re-evaluated. For further information, please see Note
no other contractual restrictions relating to the use of the licenses
10.
have indefinite lives and, as such are not amortized. Also, licenses
granted with a finite useful life, but where the license holders can
renew the licenses without incurring considerable expenses are
assessed as indefinite lives. However, the Group’s licenses in each
country are subject to certain requirements and the Group risks
penalties, sanctions or even license revocation if the Group fails
In April 2020, Grieg Seafood acquired 99% of Grieg Newfoundland
AS, the holding company of the Canadian Grieg Newfoundland Ltd
Group. At the end of the year Grieg Newfoundland have 8 approved
licenses. The licenses are classified as indefinite lives and, as
such are not amortized. The completion process for approval
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS of licenses is similar to Norway, where approval it is subject to
of fish that results in gutted weight of 4.0 kg. If there are any
certain requirements and if the Group fails to comply with licenses
specific conditions at the balance sheet date resulting in the fish
requirements or related regulations company may lose the right
being harvested before they reach optimal weight, the estimated
to operate. Grieg Newfoundland has also the exclusive rights to be
harvest weight is adjusted. Mortality during the period from the
the sole salmon farmer in the Placentia Bay area long-term. The
balance sheet date to the date when the fish reach harvest weight
fair value of the right to operated alone will be amortized when the
is estimated to be 1% of the number of incoming fish per month.
production in sea have started, in 2022, over the duration of the
agreement.
BIOLOGICAL ASSETS
The Group’s biological assets comprise smolt and fish in the sea.
Discount rate
The sales income and remaining expenses are allocated to the
same period as the fish is harvested. The cash flows from all
localities where the Group has fish in the sea will then be distributed
Biological assets are measured at fair values less costs to sell.
over the entire period it takes to farm the fish in the sea. With the
The measurement unit is the individual fish, however, for practical
current size of the smolt released and the frequency of the smolt
reasons, cash flows and estimates are carried out per locality. The
releases, this period may be up to 18 months. The estimated
fair value model assessed by the Group calculates the net present
future cash flow is discounted by a monthly rate, which is 5.0 %
value of expected cash flow. Valuation is based on a different
for Rogaland and Finnmark, and 3.5% for British Columbia per
premise, many of which are non-observable. The premises are
December 2020. The discount rate considers both risk adjustment
divided into the four following categories:
(risk related to volume, cost and price), compensation for the value
1. Sales price
2. Production cost
3. Volume
4. Discount rate
of the licenses (hypothetical rent) and time value (tying up capital).
The reason for differentiation the discount factor per regional level
is the different prerequisites for biological production and thus
also a differentiation of recognized synthetic license rent. The risk
For mature fish (ready for harvesting) at the balance sheet date,
adjustment shall reflect the price discount a hypothetical buyer
uncertainty mainly involves realized prices and volume. For
would demand as compensation for the risk assumed by investing
immature fish (not ready for harvesting), level of uncertainty is
in live fish rather than a different investment. The longer it takes to
higher. Price, volume, discount rate are the main uncertainty
reach harvest date, the higher the risk that something may occur
factors; however, uncertainty
is also related to biological
that will affect the cash flow. Three significant factors could have
transformation and mortality prior to harvest date for the fish.
an impact on the cash flow: volume, costs and prices. The one
thing all three factors have in common is that the sample space
Sales price
Salmon sales prices are volatile. The sales price is based on
is asymmetrical.
forward prices and/or the most relevant pricing information
Due to limited access to licenses for farming fish, the license
available for the period in which the fish is expected to be mature
value is currently considered to be very high. For a hypothetical
(ready for harvesting). Changes in price assumptions have the
buyer of live fish to take over and continue to farm the fish, the
greatest impact on the fair-value estimate. The market price
buyer needs a license, locality and other permits required for such
constitutes the basis for calculating fair value for both mature and
production. However, in a hypothetical market for the purchase
immature fish. The forward prices for superior Norwegian salmon
and sale of live fish, one must assume that this would be possible.
weighing 3-6 kg gutted weight from Nasdaq Fish Pool are applied.
In that scenario, a hypothetical buyer would claim a significant
For fish ready for harvest, the forward price for the following
discount to allocate a sufficient share of the returns to the buyer's
month is applied. For fish not ready for harvest the forward price
own licenses. It is difficult to create a model that would allow a
for the month when the fish is expected to be harvested is applied.
hypothetical annual lease cost to be derived from prices for sold
The price is adjusted for export margin and clearing costs. This
licenses as the curve in the model would be based on projections
accounts for both fish ready for harvest and not ready for harvest.
of future profit performance in the industry.
Volume
Estimated harvest volume is based on estimated number of fish at
A discount must be made for the time value of the tied-up capital
linked to the share of the present value of the cash flow allocated
the balance sheet date less estimated future mortality multiplied
to the biomass. The buyer who is investing in live fish rather than
by optimal harvest weight (4.60 kg). Actual harvest volume may
differ from the estimated volume due to changes in biological
conditions or due to special events, such as a mass mortality.
Estimated number of fish is based on the number of smolt released
to sea, and mortality is a given percentage of the fish in sea. The
normal estimated harvest weight is assessed to be the live weight
some other type of investment, would claim compensation for
the alternative cost. The production cycle for salmon in the sea
currently takes up to 18 months. The cash flow will therefore
extend over a similar period. Assuming a constant sales price
throughout the period, the cash flow would decrease for each
month, as costs are incurred to farm the fish to harvested weight.
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The cost increase for every month the fish are in the sea. As
discontinued operations of Ocean Quality, reported in the Grieg
such, the effect of deferred cash flow is lower than what would
Seafood consolidated financial statement, has been defined as
be the case if the cash flow had been constant. This component
the operations related to sale of fish produced by Bremnes Fryseri
is however deemed important due to the major values the stock
AS, as well as the trading activity within Ocean Quality AS, as we
of fish represents. Please refer to Note 2 and Note 9 for further
will continue to sell fish produced by Grieg Seafood within our new
information on estimation and calculation of fish values.
sales organization. The entity Ocean Quality USA will be retained
Estimating remaining cost
The planned point of harvesting is assumed to be when the fish
sale of fish with origin from Bremnes Fryseri AS will discontinue.
The Ocean Quality North America Inc. and Ocean Quality UK Ltd
reaches a live weight of 4.60 kg, however, there may be uncertainty
has not been trading fish produced from Bremnes Fryseri AS and
regarding the estimated growth rate. For immature fish the fair
the companies has been retained by Grieg Seafood in December
value is adjusted by the estimated remaining cost necessary to
2020, has not been defined as discontinued operations. See more
by Grieg Seafood, however the part of Ocean Quality USA related to
grow the fish to optimal harvest weight. Forecasted production
information in Note 5.
costs include provisions for estimated feed prices, costs of
treatment of lice and other costs to prevent biological accidents.
In November 2020, Grieg Seafood announcement that the Board
Here, estimations are affected by uncertainty regarding the
has decide to divest our investment and operations in Shetland. A
number of lice treatments to be carried out, the sea temperature
conclusion of the process is expected within 2021. The discontinued
and other conditions affecting growth and costs.
operation of Shetland includes the prior reporting segment of
Significant assumptions sensitivity
The estimate of fair value of biomass will always be based on
uncertain assumptions, even though the Group has built expertise
Shetland UK, in addition to the UK sales operations. The Shetland
disposal group are classified as held for sale 31 December 2020,
and the operations reported as discontinued operations.
in assessing these factors. There are three components to be
The net asset values booked in the consolidated financial statements
key parameters for valuation; average price, estimated biomass
of Grieg Seafood directly associated with the Shetland assets held
volume and monthly discount rate. Please refer to Note 3 for a
for sale amounts to NOK 1 481 million. A disposal group's held for
sensitivity analysis of these factors.
Non-current assets held for sale and
discontinued operations
sale is measured at the lower of book value and fair value less cost
of sale. Fair value estimates as of 31 December 2020 indicate that
the Shetland assets is not impaired, and the assets are therefore
measured at book value year-end 2020. To assess the value of the
assets held for sale, numerous published analyst reports, as well
In 2020, we defined two disposal groups within the Grieg Seafood
as statements made by finance professionals in the media, have
Group, which both has been classified as assets held for sale and
been used as input to establish a range of likely transaction values.
presented as discontinued operations during the year. The activity
In addition, previous comparable acquisitions have been used as
within the Grieg Seafood Group have thus been separated into
input to guide our estimate. For more information on the Shetland
our continuing operations and our discontinued operations. The
disposal group, see Note 5.
two disposal groups are “Ocean Quality” and “Shetland”, of which
the assets in the former group has been divested within year-end
2020, while the assets associated with the latter is classified as
assets held for sale at the balance sheet date year end 2020.
All note disclosures in these consolidated financial statements
for 2020 of Grieg Seafood have been prepared for the Group’s
continuing operations if not otherwise explicitly stated in the
specific note disclosure.
In May 2020 Grieg Seafood announcement that the collaboration
with Bremnes Fryseri AS through Ocean Quality AS (Sjór AS) will
be dissolved at the end of December 2020. Grieg Seafood will
establish fully owned sales organization to support growth and
downstream strategy. From the second quarter Ocean Quality AS
has been classified as held for sale, and the operations reported
as discontinued operations. At the end of December, we sold
all our shares in Ocean Quality AS to Bremnes Fryseri AS. The
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 5
OP E R AT I ON S
NON- CU R R E N T A S SE T S HELD F OR S ALE AND DIS C ON T INUED
All note disclosures in these consolidated financial statements
USA and Grieg Seafood Sales UK, respectively, and Ocean Quality
for 2020 of Grieg Seafood have been prepared for the Group’s
Premium Brands, the subsidiary of Grieg Seafood Sales North
continuing operations if not otherwise explicitly stated in the
America, has been renamed Grieg Seafood Premium Brands.
specific note disclosure. This Note 5 of the consolidated Grieg
In the remainder of this Note, entity names referred to are kept
Seafood financial statements has been prepared for the Group's
consistent with the terminology of the “Ocean Quality” disposal
assets classified as held for sale and discontinued operations only.
group.
THE EFFECT OF NON-CURRENT ASSETS CLASSIFIED AS
HELD FOR SALE AND DISCONTINUED OPERATIONS:
The discontinued operations were defined as the operations related
to Ocean Quality's sale of fish produced by Bremnes Fryseri, as
well as the trading activity within Ocean Quality (purchase and
In 2020, we defined two disposal groups within the Grieg Seafood
resale of fish not produced by Grieg Seafood nor Bremnes Fryseri).
Group, which both has been classified as assets held for sale and
Grieg Seafood ASA has assumed ownership of Ocean Quality USA,
presented as discontinued operations during the year. The activity
however, the part of the Ocean Quality USA sale attributable to fish
within the Grieg Seafood Group have thus been separated into our
produced by Bremnes Fryseri has been defined as discontinued
continuing operations and our discontinued operations. The two
operations.
disposal groups are “Ocean Quality” and “Shetland”, of which the
assets in Ocean Quality has been divested within year-end 2020,
This means that the part of Ocean Quality that related to the sale of
while the assets associated with the Shetland disposal group are
fish farmed by Grieg Seafood has not been defined as discontinued
classified as assets held for sale at the balance sheet date year-
operations, as we will continue to farm and sell our Atlantic
end 2020.
salmon through our new sales organization.
The Group’s Income Statement and Cash Flow Statement have
The operations defined as discontinued under the agreement with
been re-presented for the comparative figures of 2019 for the
Bremnes Fryseri, were classified as held for sale in Q2 2020. As the
effects of the disposal group's Shetland and Ocean Quality. The
transaction with Bremnes Fryseri for the sale of all Grieg Seafood's
Statement of Financial Position has not been re-presented for
shares in Ocean Quality AS was completed at 31 December 2020,
the comparative 31 December 2019 figures. When preparing the
the financial position of Ocean Quality AS is not consolidated into
financial information of the two disposal group’s, intercompany
the Grieg Seafood Group at year end. All activity up until the sale 31
balances and -transactions between the entities within the
December 2020 is, however, reflected in the income statement and
disposal group's, as well with other group companies, have been
cash flow statement of Grieg Seafood. As of 31 December 2020,
eliminated in the consolidated financial statement.
the net assets directly associated with the Ocean Quality disposal
OCEAN QUALITY
group relates to receivables and liabilities to be settled with Ocean
Quality USA for fish sold with origin from Bremnes Fryseri from
the former disposal group are still recognized in the Grieg Seafood
On 23 May 2020, we entered into an agreement with Bremnes
Group’s statement of financial position.
Fryseri to dissolve the Ocean Quality sales partnership. At the same
time, we announced that we would establish a fully owned sales
Upon deconsolidation of Ocean Quality AS at year-end 2020, we
organization to support our growth and downstream strategy. Our
have recognized a gain of NOK 5.0 million. The gain is classified
new global sales organization is operational in Q1 2021, and before
as part of the net profit (loss) from discontinued operations in
year-end we have completed the transaction with Bremnes Fryseri
2020. The consideration between Grieg Seafood ASA and Bremnes
to sell our shares (60%) in Ocean Quality AS. As part of the sales
Fryseri for the sale of Grieg Seafood's 60 % equity interest in Ocean
agreement with Bremnes Fryseri, the use of the “Ocean Quality”
Quality AS is based terms and clauses agreed between the parties
name shall cease, as the sales partnership “Ocean Quality”
when establishing the sales partnership. Furthermore, as part of
has been discontinued at year-end 2020, and Ocean Quality AS
changed its legal name to Sjór AS within year-end 2020. As part
of the sale, Grieg Seafood has assumed the ownership of Ocean
Quality North America, Ocean Quality USA and Ocean Quality
UK. These subsidiaries therefore continue to be consolidated in
Grieg Seafood. Furthermore, these three subsidiaries have been
renamed Grieg Seafood Sales North America, Grieg Seafood Sales
the transaction, the brand "Ocean Quality" is dissolved, as neither
Grieg Seafood nor Bremnes Fryseri can use the Ocean Quality
name in the future. Lastly, through the agreements laid forth
when establishing the sales partnership, both parties have, on a
consistent basis, been distributed dividends from Ocean Quality
generated through the sales operation carried out by the entity.
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SHETLAND
In November 2020, we announced that the Board of Grieg Seafood
Grieg Seafood Shetland harvested 15 705 tonnes in 2020 (11 273
ASA has decided to divest the investment and operations in
tonnes in 2019). Significant volumes were harvested from the Isle
Shetland, as we will focus on our operations in Norway and Canada
of Skye towards the end of the year, which has been affected by
going forward. We have appointed DNB Markets and Nordea
severe biological challenges. The increased volume was offset
Markets to advice on a potential divestment of the Shetland assets.
by low market prices throughout most of the year and low price
A conclusion of the process is expected within 2021.
achievement on small fish from sites at Isle of Skye. Operating
The net asset values booked in the consolidated financial
million in 2020, compared to NOK 816 million in 2019. EBIT was
statements of Grieg Seafood directly associated with the Shetland
impacted by high cost, impacted by the biological challenges at
assets held for sale amounts to NOK 1 481 million. See more
Skye. At year end 2020, only one farm remained with fish on the
information in Note 4 as to the book value of the Shetland assets.
Isle of Skye, which will be harvested in Q1 2021.
income from the disposal group Shetland amounted to NOK 969
The operations defined as discontinued are presented as held for
sale at 31 December 2020, and the discontinued operations of
Shetland are defined as the farming and sales operations by Grieg
Seafood in Shetland. Thus, the discontinued operation of Shetland
includes the prior reporting segment of Shetland UK, in addition to
the UK sales operations.
SHETLAND: BIOLOGICAL ASSETS AT 31.12.2020
NUMBER OF FISH
(1 000)
BIOMASS
(TONNES)
Biomass onshore
Biological assets with round weight
< 4.60 kg
<
Biological assets with round weight
> 4.60 kg
>
Total
2 665
4 329
—
6 994
191
8 951
—
9 142
COST OF
PRODUCTION
(NOK 1 000)
34 349
FAIR VALUE
ADJUSTMENT
(NOK 1 000)
CARRYING
AMOUNT (NOK
1 000)
—
34 349
433 471
-17 953
415 518
—
467 820
—
-17 953
—
449 867
The fair value adjustment of biological assets in Grieg Seafood Shetland has been calculated using a discount factor of 3.5 %. See Note 9 for information on the fair value assessment
considerations, which also applies for Grieg Seafood Shetland.
FINANCIAL INFORMATION FOR THE HELD FOR SALE DISPOSAL GROUPS
In the following, we have included financial information for profit (loss), cash flows and classes of assets and liabilities for the disposal group's
as a whole. In addition, we have also provided disaggregated information disclosing each of the disposal group's financial information.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS PROFIT (LOSS) FROM DISCONTINUED OPERATIONS
TOTAL (NOK 1 000)
SHETLAND*
OCEAN QUALITY
TOTAL
Operating income
Operating expenses
EBIT before fair value adjustment of biological assets
Fair value adjustment of biological assets
EBIT after fair value adjustment of biological assets
Net financial items
Impairment loss recognized on the remeasurement to fair value
less cost to sell
Profit before tax from discontinued operations
Estimated taxation
2020
968 729
-1 197 303
-228 574
-97 039
-325 613
-6 744
—
-332 357
100 838
2019
816 430
-831 826
-15 396
34 217
18 821
-9 558
—
9 263
9 665
2020
2019
2020
2019
3 084 108
2 704 578
4 052 837
3 521 009
-3 058 240
-2 678 534
-4 255 543
-3 510 361
25 868
—
25 868
10 271
26 044
—
26 044
9 003
-202 706
-97 039
-299 745
3 526
10 648
34 217
44 865
-555
—
—
—
—
36 139
-8 476
35 047
-8 245
-296 219
92 363
44 310
1 419
Profit for the period from discontinued operations
-231 519
18 928
27 663
26 802
-203 856
45 729
Gain on the sale of the subsidiary after income tax
—
—
5 033
—
5 033
—
Net profit for the period from discontinued operations
-231 519
18 928
32 696
26 802
-198 823
45 729
*Depreciation ceased from 1 October 2020, in accordance with IFRS 5.
CLASSES OF ASSETS AND LIABILITIES OF THE DISPOSAL GROUP (NOK 1 000)
SHETLAND
OCEAN QUALITY
TOTAL
31.12.2020
31.12.2020
31.12.2020
Classes of assets and liabilities of the disposal group
Deferred tax assets
Intangible assets
Property, plant and equipment
Biological assets incl fair value
Inventories
Trade receivables and other receivables
Cash and cash equivalents
Assets directly related with the disposal group
Non-current liabilities
Current liabilities
Liabilities directly associated with the disposal group
Net assets directly associated with the disposal group
CASH FLOWS FROM DISCONTINUED OPERATIONS
(NOK 1 000)
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Net change in cash and cash equivalents
81 681
556 577
719 626
449 867
24 448
139 516
855
1 972 570
212 838
279 173
492 011
1 480 559
—
—
—
—
—
112
43
155
-152
970
818
-663
81 681
556 577
719 626
449 867
24 448
139 627
899
1 972 725
212 686
280 143
492 829
1 479 897
SHETLAND
OCEAN QUALITY
TOTAL
2020
-24 966
-77 905
-118 796
-221 667
2019
-31 446
-85 862
-86 005
-203 314
2020
28 471
-43 632
-1 366
-16 526
2019
317 817
-173
-311 332
6 312
2020
3 505
-121 537
-120 161
-238 193
2019
286 371
-86 035
-397 337
-197 001
Reconciliation with "Discontinued operations" in Continued
Operation Cash Flow Statement:
Net change in cash and cash equivalents*
Usage of Group Account, Shetland**
Discontinued operations, other cash flow items
37 459
184 734
222 192
-20 261
222 779
202 518
32 907
—
32 907
-6 312
—
-6 312
70 366
184 734
255 099
-26 573
222 779
196 206
*2020: Calculated as the opening balance of cash attributable to discontinued operations, as the closing balance of cash and cash equivalents is not included in the financial statement
line item "cash and cash equivalents" in the balance sheet. 2019: Calculated as the net change in cash and cash equivalents for the year, because the balance sheet is not re-presented
for 2019.
**Grieg Seafood Shetland, included in the disposal group "Shetland", is part of Grieg Seafood ASA' group account (cash pool) arrangement with banks. Master account of the cash pool
is booked in "Cash and cash equivalents" in the balance sheet, attributable to the Group's continued operations.
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AMOUNTS INCLUDED IN ACCUMULATED OCI ASSOCIATED WITH THE DISPOSAL GROUP(NOK 1 000)
SHETLAND
TOTAL
Currency effect on investment in subsidiaries
Currency effects on loans to subsidiaries
Other gains and losses
Cash flow hedges
Tax effects
Accumulated other comprehensive income 31.12.
31.12.2020
31.12.2020
7 377
88 624
-636
—
-19 497
75 868
7 377
88 624
-636
—
-19 497
75 868
All accumulated OCI at year-end 2020 is related to Shetland. Both the cumulative translation adjustment and the currency effect on loans to subsidiaries (with tax effects) are related
to Grieg Seafood ASA' net investment in the Shetland assets. The long term loan from Grieg Seafood ASA to Grieg Seafood UK is denominated in GBP. The intercompany balances is
eliminated, thus the liability is not included in the Shetland disposal group.
There are no accumulated OCI items associated with the Ocean Quality disposal group at year-end 2020.
OTHER COMPREHENSIVE INCOME RELATED TO THE DISPOSAL
GROUPS FOR THE YEAR (NOK 1 000)
SHETLAND
OCEAN QUALITY
TOTAL
Currency effect on investment in subsidiaries
Currency effects on loans to subsidiaries
Cash flow hedges
Tax effects
Sum
2020
20 535
1 973
—
-434
22 074
2019
6 088
17 711
—
-3 896
19 903
2020
—
—
451
-99
352
2019
—
—
2 615
-575
2 040
2020
20 535
1 973
451
-533
22 426
2019
6 088
17 711
2 615
-4 472
21 943
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 6
BU SINE S S C OMBI N AT IONS
On 15 April 2020, Grieg Seafood ASA (GSF) completed the acquisition of Grieg Newfoundland AS (GNL). At the acquisition date, 99% of
the shares were transferred, while the remaining 1% is subject to a put/call option accounted for as contingent consideration. GNL holds
ownership in a fish farming business under development in Newfoundland, Canada.
ABOUT GRIEG NEWFOUNDLAND
The Newfoundland-project comprises currently licenses for 11 sea sites across four areas in the Placentia Bay area in Newfoundland.
At year end 2020, a total of eight licenses have been approved. The remaining licenses are in different stages of application. The licenses
require use of female sterile salmon in order to eliminate the risk of genetic pollution of wild Atlantic salmon in case of escape. The project
includes a high-end fresh and saltwater Recirculating Aquaculture System (RAS) facility in Marystown Marine Industrial Park, close to
Placentia Bay. The facility currently under construction includes a hatchery, nursery and a smolt unit. The RAS facility is planned for a
dimension that may serve all future post-smolt modules, with adequate capacity to ensure necessary add-on growth. We are committed and
on track to developing the project according to milestones outlined in the permits granted by the authorities. Our targeted annual harvest
volume for Newfoundland is 15 000 tonnes by 2025. The first batch of eggs was delivered in July 2020. We expect to transfer smolt to sea in
summer 2021, with harvest starting in 2022.
The marine sites have favorable biological conditions for salmon farming, with environmental conditions like northern Norway. The sites are
exposed to high seas and will be equipped with state-of-the-art technology and systems for harsh environments. 40-meter-deep pens and
underwater feeding will allow the fish to stay below layers of super-chilled or potentially warm water. We have started installing equipment
at the seawater sites, and expect to have the sites ready for operation late spring 2021.
TRANSACTION
Grieg Newfoundland was a project initiated by the Grieg Group and Per Grieg Jr. in collaboration with their Canadian partner. Per Grieg Jr.
is Chairman of the Board of GSF and an owner of the Grieg Group. The transaction has been approved by the General Assembly in line with
the section 3-8 of the Public Limited Liability Companies Act.
The consideration is split into three parts - the net cash payment, the completion shares and contingent consideration. The negotiated
subscription price for completion shares was set at NOK 140.05, corresponding to a total contribution of NOK 250 million. As the market
price per share was NOK 108.20 at closing, the value of the completion shares was NOK 193.1 million.
Cost of business combination (NOK 1 000)
Cash payment for the shares adjusted for leakage cost
Completion shares in Grieg Seafood ASA
Adjusted to fair value at the transaction day
Consideration transferred at closing
Contingent consideration
Total consideration
Total consideration
Book value of equity, excluding goodwill
Excess value
250 000
-56 858
15.04.2020
67 558
193 142
260 700
701 535
962 235
962 235
78 630
883 605
CONTINGENT CONSIDERATION
If certain production volumes are reached within the next ten years, additional payments are triggered. The additional amount becomes
unconditional when GNL has reached a planned annual harvest volume of 15 000 tonnes, and the amount increases with volume until an
annual harvest volume of 33 000 tonnes. The amount due is NOK 43 per kg for volumes between 15 000-20 000 tonnes, and NOK 55 per kg
for volumes between 20 000- 33 000 tonnes, with a 4% per annum inflation adjustment in the period 2023-2029.
Fair value estimate of the additional amount has been arrived at by using the DCF-model based on four different scenarios of volume
development and the timing of this development. Volumes exceeding 15 000 tonnes require further investments in additional post-smolt
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modules, biomass, and seafarm equipment. The high probability of such investments being made have been incorporated in the scenario
analysis. The maximum nominal amount is estimated to NOK 930 million +4% annual increase in the period from 2023 to 2029. The additional
amount is settled in shares in GSF and/or cash. The sellers may require a cash payment of maximum 33.34%. Further GSF has the discretion
to increase the cash portion up to 100% cash. If settlement is made in shares, the number of settlement shares is calculated based on the
last month’s volume weighted average listed price from time the conditions are met.
CLASSIFICATION OF THE CONTINGENT CONSIDERATION
Under IFRS 3.40, an obligation to pay contingent consideration that meets the definition of a financial instrument shall be classified as a
liability or equity based on the definitions in IAS 32.11. It is in GSF’s sole discretion to decide whether the expansion investments are to
be carried out in line with the production plan. If stage two and three of the post-smolt facilities are not constructed within ten years, the
additional milestone payments will not be triggered. Thus, the contingent consideration is classified as equity. Classification as equity
reflects that the sellers continue to share the risk of the operations. Only if the first phase of the operation is successful, the seller will
receive a payment when the next phase is entered into. Due to the materiality of the amount, the contingent consideration is presented as
a separate component of equity.
Allocation of the excess value (NOK 1 000)*
Licences (incl. warranty licences)
Goodwill
Property, plant and equipment
Indemnification assets
Excess value assets
Deferred tax
Net excess value allocated
Assets acquired and liabilities assumed (NOK 1 000)
Licences (incl. warranty licences)
Other intangible assets (incl. exclusivity agreement)
Property, plant and equipment
Indemnification assets
Other receivables
Cash and cash equivalents
Total assets acquired
Deferred tax
Long-term debt
Current liabilities
Total obligations assumed
Identified net assets
Goodwill
Net assets at acquisition
15.04.2020
748 017
677 255
-493 230
40 000
972 041
-88 436
883 605
762 171
44 044
130 702
40 000
12 779
30 628
1 020 323
88 436
584 639
62 269
735 344
284 979
677 255
962 235
*The preliminary purchase price allocation (PPA) published in the Group's report for the second quarter and first half of 2020 has been
adjusted. See the subsection "Adjustment of previously allocated excess values" below.
VALUATION OF LICENSES
Aquaculture licenses are valued assuming an indefinite useful life. At the time of the transaction, GNL had been granted a long-term
exclusive right to operate in Placentia Bay and received approval for 11 site holds in the area. An awarded site hold grants an exclusive right
for the holder to the farming location in question, while the application process is in progress. When the application process is finalized
and approved, the site hold is converted into a fish farming license. Without the granting of a farming license, the value of the site holds is
deemed to be immaterial. At the time of the transaction, three of the site holds were approved and converted to fish farming licenses, in
addition one freshwater license was approved. For site holds with a fish farming license granted at the transaction date, valuation is based
on expected volumes using reasonable income and cost assumptions to the amount of NOK 213.5 million value added per license. For three
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS additional site holds, the seller has granted a warranty as to the value of the license. If a farming license is not obtained for three additional
sites within 31 December 2021, the seller is obliged to compensate for loss incurred by the non-receipt of the licenses in the period
2020-2021. However, if the licenses are granted within 31 December 2024, the compensation will be based on the calculated loss in the
intermediate period up until the licenses are granted. The compensation is capped at NOK 122.5 million. The approval of the license is valid
for five years until it must be renewed, but this is merely a formality if conditions in the licenses are adhered to. The exclusivity agreement
states that GNL has the exclusive right to the area Placentia Bay for a period up to 20 years. We expect to be the sole or leading operator in
the area, creating high barriers of entry to other operators.
EXCLUSIVITY CONTRACT
GNL has received a grant to operate in the production area in Placentia Bay, and an exclusivity agreement for 12 years plus an option of eight
years. This means no one else can operate in this geographical area in this period, which is similar to a non-compete advantage. The book
value of the cost for the work with the documentation and meetings required in the application process to receive the exclusivity agreement
is NOK 38.7 million. The book value is considered a reasonable proxy for the fair value of the exclusivity. This exclusivity will be depreciated
over the duration of the agreement.
GOODWILL
Intangible assets that do not meet the conditions for separate recognition are subsumed into goodwill. The project GNL has been going on
for some years, where the sellers have developed the area for salmon farming and started construction of a high-end RAS facility, providing
a going-concern value. The exclusive rights to be the sole salmon farmer in the Placentia Bay area long-term, reduces biological risk, with
long distances and low interconnectivity between sites, thus providing synergies between the various components of the facilities. The
sites and production areas are minimum 100-meter-deep, have good currents and optimal oxygen levels. Goodwill also covers the licenses
pending approval. At year-end 2020, eight licenses are finally approved, while three are in different stages of application. Newfoundland
is also close to the US market, which may create synergies with existing operations in British Columbia. Lastly, a portion of the goodwill
reflects the difference between the fair value and nominal value of deferred tax liabilities, in particular for the licenses that are deemed to
have indefinite useful life.
TAX
For valuation purposes and calculation of deferred tax liabilities, the tax rate is set to 30% which is the current tax rate in Canada for private
companies controlled by non-Canadians.
TRANSACTION COST
Total transaction cost related to the acquisition is NOK 14 million, included in other operating expenses.
ADJUSTMENT OF PREVIOUSLY ALLOCATED EXCESS VALUES
In accordance with IFRS 3.45, the measurement period for the Purchase Price Allocation (PPA) can be up to 12 months from the transaction
date. Upon preparation of the Group's consolidated financial statements for 2020, we have conducted a reassessment of the preliminary
PPA to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The preliminary amounts
recognised in our published report for the second quarter and first half of 2020 have been adjusted retrospectively in accordance with IFRS 3.
To best reflect the actual underlying values as they were identified in the transaction, significant amount of the fair value has been shifted
from the freshwater facility on land (property, plant and equipment) to licenses and goodwill (intangible assets). The adjustment has been
made due to certain elements of the facility on land being designed or constructed in a manner that result in a too expensive construction
of the assets. As such, we believe that the historic cost of the property, plant and equipment does not accurately reflect the fair value of the
land facility.
This fact was known to Grieg Seafood at the time of negotiations and was as such reflected in the negotiated purchase price. However,
due to the estimation uncertainty, the allocation to facilities on land were preliminary based on historical cost figures. During the year,
Grieg Seafood has been able to prepare a more accurate measurement of the fair value for the property, plant and equipment which has
resulted in significant changes to the preliminary measurement of identifiable assets and liabilities. Due to a special warranty regarding the
expected cost overrun on the RAS facility, the Seller shall reimburse NOK 40 million to the purchaser. The amount has been recognised in
the adjusted PPA as Indemnification Assets and presented on a separate line item in the Group's statement of financial position.
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Allocation of the excess value (NOK 1 000)
15.04.2020
Goodwill*
Licences
Warranty licences
Property, plant and equipment
Indemnification assets**
Total assets
Equity, contingent consideration
Equity, other equity
Deferred tax liabilities
Total equity and liabilities
*Goodwill on excess values and technical goodwill due to deferred tax liabilities
**Special warranty claim against the sellers of Grieg Newfoundland AS.
Preliminary PPA
588 082
299 717
122 500
—
—
1 010 299
701 535
182 071
126 694
1 010 299
Change
89 172
325 800
—
-493 230
40 000
-38 258
—
—
-38 258
-38 258
Adjusted PPA
677 255
625 517
122 500
-493 230
40 000
972 041
701 535
182 071
88 436
972 041
FINANCIAL RESULTS
As of 31 December 2020, GNL is not yet operational, as we have worked on current construction activities as well as tested the production
unit. The first batch of eggs was delivered in July 2020. We expect to transfer smolt to sea in summer 2021, with harvest starting in 2022.
The loss before tax from 15 April to 31 December for the Grieg Newfoundland sub-group, in Grieg Seafood consolidated, was NOK -82.8
million, of which NOK -51.9 million was due to disagio on financing. EBIT from the same period was NOK -35.9 million. It is our view that
proforma financial results for the period 1 January 2020 to 31 December 2020 does not provide any relevant information.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 7
INV E S T MEN T IN A S S O CI AT E S
Associates that are closely related to the Group's operations and included in the Group´s value chain are classified on a separate line in
EBIT when the relevant associates operate in the same position in the value chain as the Group. For 2019 and 2020, no investments were
classified on a separate line after EBIT.
In 2019, the Group, through Grieg Seafood Finnmark AS, has invested NOK 1.2 million in Nordnorsk Smolt AS to acquire 50% of the company's
shares. The remaining shareholdings are held by Norway Royal Salmon ASA (50%). Nordnorsk Smolt AS is located in Troms and Finnmark
county, Norway. The expansion of the smolt facility of Nordnorsk Smolt AS has been financed by loan from the shareholders during the
development and expansion period. The loan has been converted to equity at the end of 2019, to strengthen the balance. Planned production
is approximately 800 tonnes of smolt per year. At 31 December 2020, Grieg Seafood Finnmark has provided a long-term loan to Nordnorsk
Smolt AS, amounting to 1.9 million, which is included in other non-current receivables. The interest is booked as current receivables.
In 2018, the Group, through Grieg Seafood Rogaland AS, invested NOK 30 million in Tytlandsvik Aqua AS to acquire 33.33% of the company's
shares. The remaining shareholdings are held by Bremnes Seashore AS (33.33%) and Vest Havbruk AS (33.33%). Tytlandsvik Aqua AS is
located in Ryfylke in Rogaland, Norway. Through Tytlandsvik Aqua AS, the partners will secure increased and improved access to post
smolt and are planning for an annual production capacity of 3 000 tonnes, of which Grieg Seafood's share of the volume is 50%. A total of
approximately NOK 300 million has been invested in the facility, which was completed according to plan at the end of 2018. The production
started at the beginning of 2019.
The investment in Tytlandsvik Aqua AS and Nordnorsk Smolt AS are classified on a separate line in the balance sheet, and the share of profit
is included in EBIT. Total recognized share of profit/loss from associates in 2020 was NOK 3.4 million and the total book value was NOK 84
million at 31 December 2020.
ASSOCIATES CLASSIFIED AS
OPERATIONS
Nordnorsk Smolt AS
Tytlandsvik Aqua AS
Total associates classified as operations
EQUITY INTEREST
AT 31.12.2020
BOOK VALUE AT
01.01.2020
NOK 1 000
PROFIT/LOSS 2020
NOK 1 000
CHANGES IN THE
PERIOD, INCL.
REPAID CAPITAL
NOK 1 000
BOOK VALUE AT
31.12.2020
NOK 1 000
50.00 %
33.33%
42 433
38 638
81 071
-1 169
4 520
3 350
—
—
—
41 264
43 158
84 421
The share issue and shareholder agreement for Nordnorsk Smolt were signed on 30 June 2019. Value added relating to the investment has
been allocated to hatcheries under construction, based on provisional accounting figures from Nordnorsk Smolt AS at the acquisition time.
AT 31.12.2020
Nordnorsk Smolt AS
Tytlandsvik Aqua AS
Total ownership
TIME OF
INVESTMENT
EQUITY INTEREST
01.07.2019
01.06.2017
50.00%
33.33%
FAIR VALUE
ADJUSTMENT
HATCHERY
NOK 1 000
DEPRECIATION OF
FAIR VALUE
ADJUSTMENT
NOK 1 000
BOOK VALUE OF
FAIR VALUE
ADJUSTMENT
NOK 1 000
17 022
14 600
31 623
2 553
1 754
4 307
14 469
12 847
27 316
The share issue and shareholder agreement for Nordnorsk Smolt were signed on 30 June 2019. Fair value adjustment relating to the
investment has been allocated to hatcheries under construction, based on provisional accounting figures from Nordnorsk Smolt AS at the
acquisition date. The value added is amortized from the date of acquisition.
Tytlandsvik Aqua AS the share issue and shareholder agreement were signed on 1 June 2017. Fair value relating to the investment has been
allocated to hatcheries under construction, based on provisional accounting figures from Tytlandsvik Aqua as at 31 December 2018. The fair
value adjustment is amortized from the time the facility was completed and commissioned.
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Tytlandsvik Aqua AS and Nordnorsk Smolt has the same financial year as the Group. The following table displays provisional financial
information at 31 December 2020 (100%).
AT 31.12.2020 NOK 1 000
TOTAL ASSETS
TOTAL LIABILITIES
TOTAL EQUITY
OPERATING INCOME
PRE-TAX PROFIT/LOSS
Nordnorsk Smolt AS
Tytlandsvik Aqua AS
106 902
442 539
53 313
351 596
53 589
90 943
72 624
171 548
1 438
19 464
ASSOCIATES CLASSIFIED AS
OPERATIONS
Nordnorsk Smolt AS
Tytlandsvik Aqua AS
Total associates classified as operations
EQUITY INTEREST
AT 31.12.2019
BOOK VALUE AT
01.01.2019
NOK 1 000
PROFIT/LOSS 2019
NOK 1 000
CHANGES IN THE
PERIOD, REPAID
CAPITAL NOK 1 000
BOOK VALUE AT
31.12.2019
NOK 1 000
50.00%
33.33%
—
37 122
37 122
-1 304
1 516
211
43 737
—
43 737
42 433
38 638
81 071
AT 31.12.2019
Nordnorsk Smolt AS
Tytlandsvik Aqua AS
Total ownership
TIME OF
INVESTMENT
EQUITY INTEREST
01.07.2019
01.06.2017
50.00%
33.33%
FAIR VALUE
ADJUSTMENT
HATCHERY
NOK 1 000
DEPRECIATION OF
FAIR VALUE
ADJUSTMENT
NOK 1 000
BOOK VALUE OF
FAIR VALUE
ADJUSTMENT
NOK 1 000
17 022
14 600
31 623
851
294
1 145
16 171
14 306
30 478
AT 31.12.2019 NOK 1 000
TOTAL ASSETS
TOTAL LIABILITIES
TOTAL EQUITY
OPERATING INCOME
PRE-TAX PROFIT/LOSS
Nordnorsk Smolt AS
Tytlandsvik Aqua AS
113 495
322 747
60 973
249 746
52 523
73 001
32 925
10 107
-6 783
6 711
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
NO T E 8
SE GMEN T IN F OR M AT ION
The segment information is provided for the Group’s continuing operations. Information regarding the Group’s discontinuing operations is
disclosed in Note 5.
The operating segments are identified on the basis of the reports which Group management (the chief decision-maker) uses to assess
performance and profitability at a strategic level. Group management assesses business activities from a geographical perspective, based
on the location of assets. The operating segments are divided geographically by country or region, based on the reporting applied by Group
management when assessing performance and profitability at a strategic level. Earnings from the sales companies in the Group is reported
per producer.
The Group has only one production segment: Production of farmed salmon. Geographically, management assesses the results of production
in Rogaland – Norway, Finnmark – Norway and BC – Canada. In Q4 2020, Grieg Seafood defined the reporting segment "Shetland-UK"
(included in the segment information up until and including 2019), as part of the disposal group held for sale "Shetland". The segment
information has been re-presented to be comparable.
Group management evaluates the results from the segments based on EBIT before value adjustments of biological assets. The method of
measurement excludes the effect of non-recurring costs, such as restructuring costs, legal costs on acquisition and amortisation of goodwill
and intangible assets when amortisation is attributable to an isolated event which is not expected to recur. The measurement method also
excludes the effect of cash-settled share options, as well as unrealised gains and losses on financial instruments, and ownership costs.
These gains/losses and costs are reported in the "Elim/Other" column in the segment information of Grieg Seafood. In 2020, ownership
costs also include acquisition costs and current operating costs of Grieg Newfoundland, as well as lawyer fees related to the EU commission
investigation.
The Group’s customers are divided into different geographical markets. Up until year-end 2020, Ocean Quality carried out the Group's sales
activity. The Group divested all its shares in Ocean Quality AS year-end 2020 to Bremnes Fryseri AS, which up until the sale held a non-
controlling interest in the sales company. In Q2 2020 Grieg Seafood announced the divestment of Ocean Quality, and the 2020 and comparing
2019 financial information has thus been prepared for the Group's continued operations. 2019 segment information is re-presented to be
comparable. See more information in Note 5.
The Group's revenues mainly comprise revenues from sale of whole and processed fish and some ensilage. Furthermore, the Group also
generates revenues from sale of roe and harvest services to external parties. Sales revenues are recognized at the point in time when
control of the fish has been transferred to the customer. This will normally be upon delivery. In 2020, sale of whole fish (fresh and frozen)
constituted 90 % (2019: 92%) of the Group's sales revenues (excluding other products), while processed fish constituted 10 % (2019:8%).
Specification of the Group's revenue from contract with customers per geographical market and per type of product are disclosed in this
Note. The sales revenues are recognised at point in time.
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SALES REVENUES FROM
CONTRACTS WITH CUSTOMERS, BY
GEOGRAPHICAL MARKET
NOK 1 000
EU
UK
USA
Canada
Russia
Asia
Other markets
Total
Norway
BC
Total
2020
2019
2020
2019
2020
2020 %
2019
20.19
1 964 336
2 481 456
401 378
23 227
4 193
—
605 842
52 501
270 190
967
105 916
—
852 670
82 431
—
—
871 033
376 388
—
85 459
—
—
—
644 354
251 319
—
66 403
—
1 964 336
401 378
894 260
380 581
—
691 301
52 501
45%
9%
20%
9%
—
16%
1%
2 481 456
270 190
645 321
357 235
—
919 073
82 431
52%
6%
14%
8%
—
19%
2%
3 051 476
3 793 629
1 332 881
962 076
4 384 357
100%
4 755 705
100%
SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY DISTRIBUTED
PRODUCTS
NOK 1 000
NORWAY
BC
TOTAL
2020
2019
2020
2019
2020
2019
Fresh whole fish
Frozen whole fish
Fresh processed fish
Frozen processed fish
Other products
Total
2 740 344
3 487 049
1 107 890
790 431
3 848 234
4 277 480
3 287
173 250
24 412
110 181
375
19
—
194 558
220 947
171 277
22 253
89 393
167
3 858
38
330
3 306
394 197
24 579
114 040
375
365 836
22 291
89 723
3 051 475
3 793 629
1 332 881
962 076
4 384 357
4 755 705
Information reported to Group management from the reporting segments.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS GEOGRAPHICAL SEGMENTS
NOK 1 000
Sales revenues, 1)
Other income 2)
Other gain/losses 3)
NORWAY ROGALAND
NORWAY FINNMARK
CANADA BC
OTHERS/
ELIMINATIONS, 4)
GRIEG SEAFOOD
GROUP
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
1 309 554
1 538 871
1 389 011
1 815 257
1 194 672
861 361
491 119
540 215
4 384 357
4 755 705
31 973
53 234
566
136
185
-2 241
—
6 401
1 029
-2 636
3 488
-756
-4 880
-33 326
-45
-2 218
28 688
-4 786
23 397
3 612
Share of profit from associates
4 520
1 516
-1 169
-1 304
—
—
—
—
3 350
211
Operating costs before
depreciation and amortisation
EBITDA before fair value
adjustment of biological assets
Depreciation, amortization and
reversals
EBIT before fair value adjustment
of biological assets
-952 879
-935 367
-1 113 980
-1 104 887
-1 094 740
-718 193
-648 079
-640 482
-3 809 678
-3 398 929
393 304
658 439
272 187
715 467
98 324
145 900
-161 884
-135 809
601 932
1 383 996
-101 005
-90 210
-144 763
-135 310
-105 749
-72 585
-17 357
-8 966
-368 874
-307 071
292 299
568 229
127 424
580 157
-7 425
73 315
-179 242
-144 775
233 057
1 076 926
Harvesting volume (tonnes GWT)
23 043
25 217
26 919
32 362
21 181
14 120
12.7
22.5
4.7
17.9
-0.4
5.2
71 142
71 700
3.3
15.0
2 023 442
1 997 262
2 996 414
2 917 782
1 455 341
1 614 711
2 201 605
2 404 929
8 676 801
8 934 684
EBIT/kg (NOK)
Assets
Assets classified as held for sale
—
—
—
—
—
— 1 972 725
— 1 972 725
—
Total assets
Liabilities
2 023 442
1 997 262
2 996 414
2 917 782
1 455 341
1 614 711
4 174 330
2 404 929 10 649 527
8 934 684
995 977
602 446
1 555 995
1 148 940
698 702
742 417
2 535 106
2 300 038
5 785 781
4 793 840
Liabilities directly associated with
the assets held for sale
—
—
—
—
—
—
492 829
—
492 829
—
Total liabilities
995 977
602 446
1 555 995
1 148 940
698 702
742 417
3 027 935
2 300 038
6 278 609
4 793 840
1) Sales revenues equals the Group's revenue from contracts with customers.
2) Other income mainly relates to the settlement of insurance and other services not directly related to production.
3) Other gains/losses include items such as foreign currency, and sale of fixed assets and other equipment.
4) Elim. /other includes bonus and share of profit from sales entities to Grieg Seafood farming entities/producers. Other items comprise the profit/loss from activities conducted by the
parent company or other Group companies not geared for production. Internal transactions between group companies are eliminated and included in the “Elim./other” column. Sales
revenue generated from sale of fish not produced by the Group is also included in Elim./other. Net costs of Elim./other for 2020 are higher than 2019 and primarily due to acquisition
costs and current operating costs from the time of acquisition to the reporting date related to Grieg Newfoundland.
GROUP EBIT NOK 1 000
2020
2019
EBIT before fair value adjustment of biological assets
Fair value adjustment of biological assets (Note 9)
EBIT after fair value adjustment of biological assets
Net financial items (Note 24)
Profit before tax
Income tax expense
Profit for the year
233 057
-289 705
-56 648
-247 792
-304 440
-11 557
-315 997
1 076 926
-254 931
821 995
-25 679
796 315
-197 137
599 179
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NO T E 9
BIOL OGIC A L A S SE T S AND O T HER INV EN T OR IE S
TONNES
NOK 1 000
Biological assets at 01.01.
Biological assets classified as held for sale*
Currency translation differences
Increase due to production
Decrease due to abnormal mortality/loss
Decrease due to sales
Fair value adjustment at 01.01.
Fair value adjustment in connection with business acquisition
Fair value adjustment at 31.12.
2020
67 614
-11 480
N/A
80 748
-4 844
-79 419
N/A
N/A
N/A
2019
2020
2019
56 399
-8 311
N/A
93 403
-3 058
-82 299
N/A
N/A
N/A
3 437 948
-641 389
1 442
3 407 539
-177 225
-3 121 283
-708 355
N/A
347 227
2 545 903
3 195 142
-477 295
34 518
2 912 299
-114 508
-2 515 133
-946 819
N/A
708 355
2 796 559
Book value of biological assets at 31.12. ex. Shetland
52 619
56 134
Assets classified as held for sale in 2020- incl. in biological assets at 31.12.2019
Biological assets at 31.12.
N/A
52 619
11 480
67 614
N/A
2 545 903
641 389
3 437 948
*This Note is prepared for the Group’s continued operation. In 2020, we have classified our Shetland assets as held for sale and treated the operations as discontinued operations. The
movement table above is prepared for the Group’s continued operations, and the comparable 2019 movement table is re-presented to be comparable, including the closing balance of
the financials directly related to the assets classified as held for sale to be comparable with the balance sheet. See more information in Note 5.
RECOGNIZED FAIR VALUE ADJUSTMENT
Change in fair value adjustment of biological assets (1)
Currency adjustment of fair value adjustment of biological assets
Change in physical detivery contracts relating to fairvalue adjustment of biological assets (2) (Note 26)
Change in fair value of financial derivatives from salmon (Fish Pool contracts) (3)
Total recognition of fair value adjustment of biological assets
2020
-361 128
-16 511
—
87 933
-289 705
2019
-238 464
-2 897
-1 577
-11 993
-254 931
The biological assets are, in accordance with IAS 41, measured at fair value, unless the fair value cannot be measured reliably. Broodstock
and smolt are measured at cost less impairment losses. Fair value of biological assets is calculated on a discounted cash flow based present
value model, which does not rely on historical cost.
Recognized value adjustments of biological assets include:
1. Fair value adjustments of biological assets
2. Fair value (liability) change in loss contracts
3. Change in unrealized gains/losses from financial purchases/sales contracts (derivatives) from fish at Nasdaq Fish Pool
Provisions allocated to future physical delivery contracts that require fair value adjustments are recognized as other current liabilities
in the balance sheet. The contracts are calculated based on the same forward prices used for fair value calculation of biological assets.
Value adjustment of financial derivatives from salmon are recognized in the balance sheet as derivatives and other financial instruments.
Financial derivatives are calculated at market value. Please refer to Note 3 for further information.
For further information on accounting policies for biological assets, please refer to Note 2 and Note 4.
BASIS FOR VALUES
Weighted price per kg GWT
Source
BC
SHETLAND
NORWAY
CAD 9.03
GBP 5.31
NOK 54.16
Nasdaq Fish Pool
Nasdaq Fish Pool
Nasdaq Fish Pool
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS Forward prices from Nasdaq Fish Pool as stated above are adjusted for expected quality reductions and stated before logistics expenses.
The standard deduction for quality reduction is considered. Forward prices are weighted in relation to the intended harvesting period.
The price for BC is based on the forward price in Norway adjusted for historical differences in price levels between Norway and Canada.
The same principle applies to Shetland. Estimated harvesting and logistics expenses are deducted. Forward exchange rates are used to
translate prices into CAD and GBP in relation to the harvesting period.
The estimated future cash flow is discounted by a monthly rate, which are assessed individually for each region. The discount factor reflects
a combination of the cost of capital for the biomass, risk discounting and synthetic licenses rent.The reason for differentiating the discount
factor per regional level is the different prerequisites for biological productions and thus also a differentiation of recognized synthetic
license rent. From 2019 to 2020 there has been a changes in the discount rate for all our regions. See the table below and the Note 4 for
more information.
BASIS FOR VALUES DISCOUNT RATE PER REGION
Rogaland
Finnmark
BC
Shetland
2020
5.0%
5.0%
3.5%
N/A
2019
6.0%
6.0%
6.0%
6.0%
SPECIFICATION OF OUR BIOLOGICAL ASSETS IN THE REGIONS OF ROGALAND, FINNMARK AND BRITISH COLUMBIA,
INCL. ABNORMAL MORTALITY:
STATUS OF BIOLOGICAL ASSETS
2020
Biological assets onshore *
Immature fish in sea, round weight < 4.60 kg
<
Mature fish in sea, round weight > 4.60 kg
>
Total
2019 ex. Shetland
Biological assets onshore *
Immature fish in sea, round weight < 4.76 kg
<
Mature fish in sea, round weight > 4.76 kg
>
Total
* Smolt production
NUMBER OF
FISH 1 000
BIOLOGICAL
ASSETS
TONNES
ACCRUED COST
OF PRODUCTION
NOK 1 000
FAIR VALUE
ADJUSTMENT
NOK 1 000
BOOK VALUE
NOK 1 000
19 617
26 933
1 498
48 048
19 692
28 378
41
48 111
699
43 419
8 500
52 619
685
55 247
202
56 134
139 360
1 795 414
263 902
2 198 676
148 368
1 931 734
8 103
2 088 205
—
321 444
25 782
347 227
—
706 909
1 446
708 355
139 360
2 116 858
289 684
2 545 903
148 368
2 638 642
9 549
2 796 559
Abnormal mortality - write-down
Cost related to abnormal mortality will be immediately recognized in profit or loss and presented as "decrease due to abnormal mortality/
loss" in the table above. Normal mortality is classified as part of the production cost. The classification of mortality only affects the note
presentation, and hence not the fair-value calculation. The main causes of abnormal mortality during 2020, were lice treatment and PD in
Rogaland, winter ulcers in Finnmark and low DO and algae blooms in BC.
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ABNORMAL MORTALITY - WRITE-DOWN
2020
Biological assets onshore *
Immature fish in sea, round weight < 4.60 kg
<
Mature fish in sea, round weight > 4.60 kg
>
Total
2019 ex. Shetland
Biological assets onshore *
Immature fish in sea, round weight < 4.76 kg
<
Mature fish in sea, round weight > 4.76 kg
>
Total
* Smolt production
OTHER INVENTORIES NOK 1 000
Raw materials (feed) at cost price
Roe
Other (goods in transit, frozen fish, supplementary products)
Total inventories
Impairment of inventories recognized at year-end
NUMBER OF
FISH 1 000
BIOLOGICAL
ASSETS
TONNES
AVERAGE
SIZE KG
ACCRUED COST
OF PRODUCTION
NOK 1 000
1 714
1 104
227
3 045
1 000
783
229
2 012
1 184
2 610
1 050
4 844
—
1 726
1 332
3 058
0.69
2.36
4.63
1.59
0.00
2.20
5.82
1.52
2020
65 857
4 176
7 968
78 001
5 518
40 066
97 392
39 766
177 224
3 982
68 399
42 127
114 508
2019
92 135
19 760
65 952
177 847
—
COST OF RAW MATERIALS AND CONSUMABLES PURCHASED NOK 1 000
2020
2019
Inventories at 01.01. (inverted number)
Raw materials and consumables purchased
Inventories at 31.12.
Total
-177 841
-1 617 439
78 001
-1 717 279
-126 092
-1 550 231
177 841
-1 498 482
Raw materials and consumables used mainly comprises feed, roe, recognition of extraordinary mortality, and external purchase of fish in
the sales company, Sjór AS (previously known as Ocean Quality AS).
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 1 0
I N TA NGIB LE A S SE T S
2020 NOK 1 000
Book value at 01.01.
Assets classified as held for sale*
Acquisition of business
Currency translation differences
Additions
Disposals
Amortization
Reclassifications
Book value at 31.12.
ACCUMULATED VALUES
Acquisition cost
Accumulated amortization
Accumulated impairments
Book value at 31.12.
FISH FARMING
LICENSES –
INDEFINITE
LIVES
GOODWILL
FISH FARMING
LICENSES –
FINITE LIVES
OTHER
INTANGIBLE
ASSETS
109 526
-78 781
677 255
-69 981
—
—
—
—
638 019
727 622
—
-89 603
638 019
1 112 136
-477 867
762 171
-79 511
159 066
—
—
17 425
1 493 419
1 493 419
—
—
1 493 419
21 495
—
—
-86
—
—
-1 491
-4 885
15 034
43 094
-28 061
—
15 034
16 205
-26
38 720
-5 116
7 980
—
-7 206
-12 542
38 015
73 917
-35 902
—
38 015
TOTAL
1 259 360
-556 675
1 478 146
-154 695
167 046
—
-8 696
—
2 184 486
2 338 052
-63 963
-89 603
2 184 486
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
*This Note is prepared for the Group’s continued operations. In 2020, we have classified our Shetland assets as held for sale and treated as discontinued operations. In addition, we
have sold all our shares in Ocean Quality AS in 2020, which also was treated as discontinued operations. The movement table above is prepared for the Group’s continued operations,
and the comparable 2019 movement table is re-presented to be comparable, including the closing balance of the financials directly related to the assets classified as held for sale to be
comparable with the balance sheet. See more information in Note 5.
2019 NOK 1 000
Book value at 01.01.
Assets classified as held for sale*
Currency translation differences
Additions
Disposals
Amortization
Reclassifications
Book value at 31.12 excl assets classified as held for sale
Assets classified as held for sale*
Book value at 31.12.
ACCUMULATED VALUES
Acquisition cost
Accumulated amortization
Accumulated impairments
Book value at 31.12.
FISH FARMING
LICENSES –
INDEFINITE
LIVES
FISH FARMING
LICENSES –
FINITE LIVES
OTHER
INTANGIBLE
ASSETS*
1 099 744
-471 100
5 625
—
—
—
—
634 268
477 867
1 112 136
1 112 136
—
—
1 112 136
21 917
—
996
—
—
-1 419
—
21 495
—
21 495
51 907
-30 413
—
21 495
25 174
-42
-1
1 636
-6 337
-4 252
—
16 178
26
16 205
46 166
-29 961
—
16 205
GOODWILL
109 015
-78 383
114
—
—
—
—
30 745
78 781
109 526
199 129
—
-89 603
109 526
TOTAL
1 255 850
-549 525
6 733
1 636
-6 337
-5 671
—
702 685
556 675
1 259 360
1 409 338
-60 375
-89 603
1 259 360
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
*See the information below the 2020 table in this Note.
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LICENSES
The tables below provide an overview of the Group’s licenses. See Note 2 for further information on licenses.
Canada - BC
All owners of industrial open net pens must be approved by the the Department of Fisheries and Oceans Canada (DFO), who has regulated
the industry since 2009. From 2022, farming companies need to obtain support from local First Nations in the area where the company has
its licenses, together with the DFO. 66 % of our production in BC is under First Nations agreements. Each local First Nations establishes
its own protocol and procedures for engaging with companies operating in its territory. Grieg Seafood BC are working with all local First
Nations in their area of its operations and have positively engaged with all of them. The new regulation will contribute to a more sustainable
future for local communities and workers. We expect that the changes will not affect the definition of indefinite useful life of licenses in
Canada. See Note 4 for further information.
CANADA - BC
FARM/AREA**
Ahlstrom
Atrevida
Barnes bay
Noo-La
Conception
Culloden
Esperanza
Gore
Hecate
Muchalat N.
Muchalat S.
Salten
Site 13
Steamer Point
Tsa-ya
Vantage
Williamson
Wa-kwa
Lutes
Total
CAPACITY PER LOCATION
TONNES
NORWAY LICENSE
CATEGORY*
TOTAL NUMBER
CAPACITY
TONNES
Seawater licences
Green licences
R&D permit
Broodstock
Smolt
Harvesting cage
Education
Total
34
8
1
3
3
2
2
53
30 853
7 743
780
2 340
4 045
1 106
1 560
48 427
1 100
3 300
3 000
4 400
4 100
1 500
3 600
4 100
4 000
4 100
3 900
1 500
900
3 600
3 000
1 500
3 900
3 600
3 900
59 000
* Finnmark and Rogaland are renting education licenses from Troms and Finnmark and
Rogaland County respectively.
** The capacity in BC is merely theoretical capacity, as all locations cannot be utilized
simultaneously.
CANADA - NEWFOUNDLAND
Newfoundland currently holds 8 licenses, with the aim to develop additional licenses as the project progresses. The regulations for salmon
farming in Placentia Bay are based on the number of fish in the sea at any one site. Per license there is a maximum of 1 million fish in the
sea in the first generation, and a maximum of 2 million fish in the second generation. In addition there are in place regulations related to
fallowing and adherence to certain environmental indicators.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS IMPAIRMENT TESTING OF GOODWILL AND LICENSES
No impairments were recognized for goodwill or licenses in 2020 or 2019. Goodwill and licenses with indefinite economic lives are subject
to an annual impairment test. Tests are performed more frequently where indications of impairment exist. Licenses with finite useful lives
are tested for impairment only if there are indications of a decline in value. The estimated value in use (VIU) is used as a basis for calculating
the recoverable amount, except for Grieg Newfoundland where the fair value less cost of disposal (FVLCD) has been used as basis for
recoverable amount. An impairment is deemed to exist when the carrying value is higher than the recoverable amount. Grieg Newfoundland
is a new segment from 2020. As at the date of control, 15 April, the RAS-facility was under completion, and the first batch of eggs was
delivered to our freshwater facility in July 2020. The first smolt will be transferred to sea in 2021. The investments in sea-farming equipment
has not yet started, but will be completed when the smolt is going to sea and the volume increases. See note 6 for information about the
business combinations of Grieg Newfoundland. At the end of 2020 Grieg Seafood Shetland is held for sale and therefore not included in this
impairment. See information in Note 5 for book value.
CASH-GENERATING UNIT NOK 1 000
Rogaland
Finnmark
British Columbia (BC)
Newfoundland
Total value
LOCATION
Norway
Norway
Canada
Canada
BOOK VALUE OF
RELATED
GOODWILL
BOOK VALUE
OF LICENSES
20 463
—
10 265
607 291
638 019
253 635
397 218
159 092
698 508
1 508 453
TOTAL
274 098
397 218
169 357
1 305 799
2 146 472
Goodwill arises on the acquisition of the subsidiaries and the goodwill is measured based on a group of CGU’s that are expected to benefit
from the synergy effects in the overall segment. Annual impairment test is carried out for goodwill and licenses. The recoverable amount
is determined based on value-in-use calculations except for Grieg Newfoundland which has been based on FVLCD. These calculations use
after tax cash flow projections based on financial budgets from the respective cash-generating units over a three-year period. Cash flows
beyond the three-year period are extrapolated using the estimated growth, rates stated below.
The estimated growth rate corresponds to expected inflation. For Newfoundland the period is 10 years based on the first harvest in 2022 and
the production is first up and run in 2030. The first years the production volume is estimated to be fairly small to begin with, and the cash
flow will be negative the first five years until the production has increased.
Assumptions used for estimating recoverable amount
Rogaland
Finnmark
BC
Newfoundland
Budget period
Increase in revenues in budget period
EBITDA margin 1)
EBITDA margin in terminal period
Harvest growth – tonnes 2)
Required rate of return before tax 3)
Required rate of return after tax 3)
Growth rate 4)
3 years
39 %
3 years
64 %
3 years
10 %
10 years
38 %
19% - 36%
23% - 35%
11% - 28%
-20%-+32%
36 %
37 %
8.3 %
6.5%
1 %
33 %
44 %
8.3 %
6.4%
1 %
28 %
-11 %
8.9 %
6.5%
1 %
31 %
N/A
13.6%
9.5 %
1 %
As stated above, the budget period/explicit period is three years, for Rogaland, Finnmark and BC. Impairment tests are initially based on the
Group´s rolling four-year projections, which are also used in connection with the Group's liquidity planning. The estimated increase in future
price level is calculated using Fish Pool projections for future prices, taking into account quality reductions and shipping. Newfoundland is
a new region from 2020, the impairment test is based on a fair value less cost of disposal (FVLCD). In practice the valuation model used in
the PPA may serve as a starting point with updating the various input factors. To estimate FVLCD we used a period of 10 years to reflect full
utilisation for production as steady state in the terminal year. The first smolt to sea will be in summer 2021 with first harvesting in 2022. The
production will slowly be increase as the facility is completed. Harvest volume will increase from approximately 3 750 tonnes in 2022 to 15
000 tonnes in 2025, and further grow to 37 500 tonnes in 2030.
Other comments/explanations on assumptions applied in impairment testing are presented below.
1. Budgeted EBITDA margin. The margin remains more stable for the Norwegian regions, and is assumed to increase for our overseas
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regions during the budget period. Increase in harvest volume is assumed in all regions towards 2024.
2. The growth rate in the harvested volume in the budget period (nominal growth rate) is measured against the 2020 volume. A corresponding
increase in output is assumed over time. For Newfoundland the first harvest will be in 2022, and volume is expected to increase to 37 500
tonnes in 2030.
3. Weighted required return on capital employed before tax and after tax. Cash flow forecasts are thus estimated after tax.
In the calculation the return on capital employed is also after tax.
4. Weighted average growth rate used to extrapolate cash flows beyond the budget period. In the years after 2023, the annual reinvestment
is assumed to be equal to annual depreciation. For Newfoundland we use a 10 years prognosis period.
EBITDA MARGIN IN THE BUDGET AND TERMINAL PERIOD
The budgeted EBITDA margin is based on past performance, expected cost of production and expected market developments. An increase
in gutted weight output is assumed towards 2023, as for Grieg Newfoundland it is 2030. The increased harvest volume assumes an increase
in utilization of existing production capacity and licenses, reflecting the Group's post-smolt strategy and operational improvement. Over
the past few years, the Group has expanded its smolt capacity for more and larger smolt, and further expansions are underway. A higher
number and larger average weight of smolt will contribute to both higher growth and harvesting volumes. Larger smolt will also reduce
the production time in the sea, which in turn will reduce the biological risk level, including mortality. An increase in smolt numbers will
also improve overall utilization of locations and licenses. Rogaland, Finnmark and BC have received new locations in recent years, helping
better utilize their licenses and increasing production volumes. In BC, Canada, an increase in harvesting volumes is based on more efficient
monitoring of algae, and recirculation of fresh water from the deeper sea. Measures to secure the intake water have been successful.
Access to high-quality smolt is key to ensuring sustainable production growth. The new smolt facility in BC will be completed in spring 2022
and will ensure access to smolt and increase better quality. Measures being taken include delivering larger smolt with a lower number of
days in the sea. In Newfoundland, the high-end fresh and saltwater Recirculating Aquaculture System (RAS) is currently under construction,
includes a hatchery, nursery and a smolt unit. The RAS facility is dimensioned to serve all future post-smolt modules and has adequate
capacity to ensure necessary add-on growth. The first batch of eggs was delivered in July 2020. We are committed and on track to developing
the project according to milestones outlined in the permits granted by the authorities.
The assumptions in the terminal year are based on the budget for 2023 (for Newfoundland 2030), but with some adjustments to reflect EBIT/
kg in the benchmark and the Group’s own historical results. The applied discount rates are after tax and reflect specific risks relating to the
relevant operating segments.
SENSITIVITY ANALYSIS
Value-in-use is sensitive to changes in the assumptions made, the most important of which are the discount rate and EBIT/kg.
A sensitivity analysis has been carried out based on these assumptions for all group of CGUs. An isolated increase of the discount rate by
one percentage point would result in an estimated impairment for the Newfoundland of NOK 428 million, while a NOK 1 reduction in EBIT/
kg would require an estimated impairment for Newfoundland of NOK 209 million. The other CGUs are not sensitive to equivalent changes
in the same assumptions.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 1 1 P R OP ER T Y, P L AN T A ND EQUIP MEN T INCL. R IGH T- OF -U SE-
A S SE T S
2020 NOK 1 000
Book value at 01.01.
Assets classified as held for sale (1)
Acquisition of business (2)
Currency translation differences
Reclassification asset under construction (3)
Other reclassifications
Additions (4)
Disposals
Depreciation
Book value at 31.12.
ACCUMULATED VALUES
Acquisition cost
Accumulated depreciation
Accumulated impairments
Book value at 31.12.
RIGHT-OF-USE ASSETS
Book value at 31.12 of right-of-use assets (see
separate specification in Note 13)
Of which book value of non-depreciable property
BUILDINGS/
PROPERTY
PROD. PLANTS AND
BARGES
NETS, CAGES AND
MOORINGS OTHER EQUIPMENT
TOTAL
663 171
-119 513
127 009
-39 811
26 770
—
566 316
-8 234
-33 114
1 182 595
1 418 736
-236 141
—
1 182 595
77 659
41 270
1 069 051
-173 687
1 849
1 422
—
-516
91 004
-1 435
-94 649
893 039
1 566 619
-633 689
-39 891
893 039
586 218
-116 490
695
4 846
—
80
135 355
-3 381
-97 111
510 212
1 165 973
-655 761
—
510 212
639 502
2 957 942
-212 615
-622 305
1 148
-2 234
-26 770
437
227 188
-44 043
-135 304
447 308
130 702
-35 778
—
—
1 019 864
-57 093
-360 178
3 033 154
832 100
4 983 429
-384 961
-1 910 552
168
-39 723
447 308
3 033 154
260 832
105 232
297 732
741 454
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
1)This Note is prepared for the Group’s continued operation. In 2020, we have classified our Shetland assets as held for sale and treated as discontinued operations. In addition, we
have sold all our shares in Ocean Quality AS in 2020, which also was treated as discontinued operations. The movement table above is prepared for the Group’s continued operations,
and the comparable 2019 movement table is re-presented to be comparable, including the closing balance of the financials directly related to the assets classified as held for sale to be
comparable with the balance sheet. See more information in Note 5.
2) Assets acquired in business combinations relate the the property, plant and equipment of Grieg Newfoundland. See more information in Note 6.
3) Reclassification assets under construction relates to the RAS plant in BC.
4) Investments in 2020 relates primarily to the Grieg Newfoundland Greenfield project and the RAS plant in BC, in addition to other growth- and maintenance-investments.
See Note 13 for specification of the Group's right-of-use assets and further information on its leases.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
2019 NOK 1 000
Book value at 01.01.
Initial application effect of IFRS 16 (1)
Assets classified as held for sale (2)
Acquisition of business
Currency translation differences
Reclassification asset under construction (3)
Other reclassifications
Additions (4)
Disposals
Reversals
Depreciation
Book value at 31.12 excl assets classified as held
for sale
Assets classified as held for sale (2)
Book value at 31.12
ACCUMULATED VALUES
Acquisition cost
Accumulated depreciation
Accumulated impairments
Book value at 31.12.
RIGHT-OF-USE ASSETS
Book value at 31.12 of right-of-use assets (see
separate specification in Note 13)
Of which book value of non-depreciable property
BUILDINGS/
PROPERTY
PROD. PLANTS AND
BARGES
NETS, CAGES AND
MOORINGS OTHER EQUIPMENT
TOTAL
477 168
65 248
-120 351
—
4 550
106 968
-373
41 747
-365
—
-30 935
543 659
119 513
663 171
946 472
-283 301
—
663 171
70 016
38 168
1 042 385
—
-168 244
—
9 164
-112 679
—
212 910
-1 438
—
-86 733
895 364
173 687
1 069 051
2 085 633
-976 690
-39 891
1 069 051
534 869
—
-97 132
—
10 279
—
—
111 489
—
—
238 491
253 806
-211 913
—
2 525
5 711
—
233 455
-1 233
—
2 292 912
319 054
-597 641
—
26 518
—
-373
599 601
-3 035
—
-89 777
-93 956
-301 400
469 729
116 490
586 218
1 409 435
-823 217
—
586 218
426 887
2 335 637
212 615
622 305
639 502
2 957 942
985 006
5 426 546
-345 672
-2 428 881
168
-39 723
639 501
2 957 942
282 764
95 503
417 224
865 507
See Note 2 for information on useful economic lifetime of assets, and Note 12 for information on assets pledged as security for financial liabilities.
1) As of 1 January 2019 the Group apply IFRS 16 on its leases. See Note 13 for more information. This line item is gross of assets which in 2020 have been classified as held for sale.
2) See footnote provided below the 2020 table in this Note.
3) Reclassification assets under construction relates to hatchery in Adamselv. The asset under construction has been recognised as "Prod. plants and barges" until commissioning of
the completed facility. Acquisition cost of the constructed asset not related to "prod.plant and barges" has been reclassified to "Buildings/property" and "other equipment".
4) Investments in 2019 related to expansion of smolt plant in BC, new locations, operations center in Rogaland, digitalization, new equipment such as aeration systems, algal monitoring
and general maintenance.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 12 B OR R O W ING S
Grieg Seafood ASA has a syndicated loan provided 50/50 by DNB
entity is included in the Shetland disposal group classified as held
and Nordea. The financing agreement includes two term loans
for sale. See Note 5 for more information on the liabilities directly
of NOK 600 million and EUR 60 million, a revolving credit facility
associated with the assets held for sale.
of NOK 1 500 million, alongside overdraft facilities of NOK 100
million. Repayments of NOK 50 million and EUR 5 million will be
Grieg Seafood ASA has in Q4 2020 been granted an amendment to
made for term loans of respectively NOK 600 million and EUR 60
the covenants through the third quarter of 2021. In this period which
million, split into half-yearly instalments. The drawdown rate of
the temporary amended terms to the syndicated loan agreement
the EUR loan is 9.6691. The agreement has a term of five years and
apply, Grieg Seafood is required to have a minimum free liquidity
matures on 28 February 2023.
of NOK 200 million. In addition, there is a set requirement for the
12 month rolling EBITDA throughout the period. NIBD/EBITDA will
The financial covenant of the syndicated loan agreements is
thus not be measured, according to agreements with our creditors,
equity-ratio of minimum 35%, measured on the book value of the
through Q3 2021. At 31 December 2020, Grieg Seafood ASA was in
consolidated Grieg Seafood Group (exclusive of Ocean Quality).
compliance with these temporary amended terms.
In addition, there is a rolling last-twelve months NIBD/EBITDA
leverage-ratio requirement. The leverage-ratio metric of NIBD/
Total unutilized credit facilities of the Group amount to NOK 1 203
EBITDA is linked to our equity-ratio requirement: if equity-ratio is
million as of 31 December 2020. Of the available credit facilities,
more than 40%, maximum leverage-ratio is 5.0, and if equity-ratio
NOK 1 500 million of revolving credit facility and NOK 100 million of
is equal to or less then 40%, maximum leverage ratio is 4.5.
overdraft are part of the syndicated bank loan (NOK and EUR term
loans) agreements with maturity in February 2023. In addition, we
Net interest-bearing debt is calculated in accordance to covenant
have a NOK 600 million revolving credit facility, which matures 31
requirements in the financing agreement. According to the
March 2022 (extended from 31 December 2021 after the balance
agreement, factoring liabilities, IFRS 16 effects and non-controlling
sheet date of 2020). This revolving credit facility was undrawn in its
ownership interests’ share of bank assets, are not included. The
entirety at 31 December 2020.
transaction with Bremnes Fryseri for the sale of Ocean Quality
AS (now Sjór AS) was completed 31 December 2020, and as such
In June 2020, we issued our first Green Bond issue, with proceeds
bank assets are not adjusted for the assets attributable to the non-
of NOK 1 000 million. In November 2020, Grieg Seafood ASA
controlling ownership interests when calculating the net-interest
issued the second tap of this senior unsecured green bond with an
bearing liabilities according to covenants.
additional drawdown of NOK 500 mill, bringing the total principal
of the green bond issue to NOK 1 500 million. The bond matures
The equity share requirement according to covenants is 35%,
on 25 June 2025 and is listed on Euronext (Oslo Stock Exchange)
without consolidation of Ocean Quality Group and effects of IFRS
with ticker "GSF01 G". The bond carries a coupon rate of 3 months
16. The Group had 31 December 2020 an equity ratio (according
NIBOR + 3.4% p.a., with quarterly interest payments, and its
to IFRS) of 41%, while the equity ratio of the Grieg Seafood Group
financial covenant is an equity-ratio requirement of minimum
according to financial covenants was 43%, compared to 51% at
30%, measured consistent with the Group’s equity-ratio financial
31 December 2019. The Group's net interest-bearing liabilities,
covenants as defined in its syndicated loan agreement with
measured according to the financial statement line items of IFRS
secured lenders. Grieg Seafood ASA was in compliance with the
(exclusive of liabilities directly associated with assets held for
financial covenants of the bond agreement at 31 December 2020.
sale), was NOK 3 931 million at 31 December 2020, compared to
NOK 2 376 million at 31 December 2019. The statement of financial
position of 31 December 2019 is not re-presented as for the held for
sale classification. The net interest-bearing liabilities according to
covenants was NOK 3 679 million at 31 December 2020 compared
to NOK 1 939 million at 31 December 2019. The difference between
the two metrics is the effect of IFRS 16 Leases, compared to IFRS
in force prior to 1 January 2019. In the consolidated financial
position of Grieg Seafood, we aren’t exposed to factoring liabilities
as of year-end 2020, which is a significant change since 2019. The
change in factoring liabilities since 31 December 2019 is due to
Ocean Quality AS being deconsolidated, and that the UK sales
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NON-CURRENT LIABILITIES AND FINANCE LEASE OBLIGATIONS (INTEREST-BEARING) NOK 1 000
Green bond loan
Non-current syndicated loan
Non-current credit facility
Non-current lease liabilities (prior IAS 17 finance leases)
Non-current lease liabilities (prior IAS 17 operational leases)
Other non-current liabilities
Total
NON-CURRENT LIABILITIES (NON-INTEREST BEARING)
Subordinate loans
Total
Amortization effect of loans
Total non-current liabilities
CURRENT LIABILITIES (INTEREST-BEARING) NOK 1 000
Current portion of borrowings
Current portion lease liabilities (prior IAS 17 finance leases)
Current portion lease liabilities (prior IAS 17 operational leases)
Overdraft facility
Factoring liabilities
Total current liabilities (interest-bearing)
NET INTEREST-BEARING LIABILITIES NOK 1 000
Total non-current interest-bearing liabilities (see above), 1)
Total current interest-bearing liabilities (see above)
Gross interest-bearing liabilities
Cash and cash equivalents
Loans to associates
Net interest-bearing liabilities
Factoring liabilities
Quote of Bremnes' share of cash OQ AS (40%), 2)
Lease liabilities (prior IAS 17 operational leases), 3)
Net interest-bearing liabilities according to covenants
2020
1 500 000
869 988
996 646
355 417
176 226
52 312
2019
—
944 638
629 319
378 577
254 090
—
3 950 589
2 206 624
—
—
-42 768
3 907 822
2020
104 435
77 769
75 426
—
—
257 630
2020
3 950 589
257 630
4 208 219
275 427
1 910
3 930 882
—
—
-251 653
3 679 230
13 240
13 240
-10 022
2 209 841
2019
98 212
73 575
125 752
—
86 122
383 660
2019
2 206 624
383 660
2 590 283
214 497
—
2 375 786
-86 122
28 849
-379 841
1 938 672
1) Green bond loan and non-current borrowings incl. syndicate term loan and revolving facility as presented above, are exclusive of amortized effect of loans.
2) The transaction with Bremnes Fryseri for the sale of Ocean Quality AS (Sjór AS) has been completed at 31 December 2020. In 2019, the net interest-bearing liabilities where adjusted
for the non-controlling interest's (Bremnes Fryseri) share of cash in Ocean Quality AS.
3) Leasing liabilities that would, according to IFRS in force prior to 1 January 2019, be classified as operational leases, are excluded from the net interest-bearing liabilities according to
the covenant calculation.
PAYMENT PROFILE NON-CURRENT LIABILITIES NOK 1 000
Green bond loan
Non-current loan
Non-current revolver credit facility
Subordinated loan
Lease liabilities (prior IAS 17 finance leases)
Lease liabilities (prior IAS 17 operational leases)
Other non-current liabilities
Total
2021
—
2022
—
102 352
102 352
—
—
77 769
75 426
2 083
—
—
71 587
66 526
2 820
2023
—
767 636
996 646
—
64 930
38 955
7 281
2024
2025
LATER
TOTAL
—
—
—
—
55 337
29 109
5 867
1 500 000
—
—
—
—
—
—
—
43 932
119 632
7 354
6 160
34 284
30 186
1 500 000
972 339
996 646
—
433 186
251 653
54 396
257 629
243 284
1 875 447
90 312
1 557 446
184 102
4 208 220
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NOK 1 000
Liabilities secured by mortgages/charges on assets*
ASSETS PLEDGED AS SECURITY NOK 1 000
Licences
Property, plant and equipment *
Trade receivables
Inventories and biological assets excl. fair value of biological assets
Assets classified as held for sale **
Total assets pledged as security
2020
2019
2 407 926
2 210 442
2020
809 947
2 240 700
179 384
2 267 501
1 107 076
6 604 607
2019
1 133 630
2 583 781
459 897
2 847 632
—
7 024 939
*Book value for liabilities secured by mortgage/charges on assets, and the property, plant and equipment do not include the book value of the right-of-use and lease liability of the
leases with IFRS 16-effect, that is leases that would be classified as operational leases according to IFRS in force prior to 1 January 2019.
**Part of the Shetland assets pledged as security. As for *, the book value of assets is exclusive of the effect of IFRS 16.
Pledges include shares in subsidiaries. The book value of these shares in the consolidated financial statements is NOK 0.
FIXED OR
FLOATING
INTEREST RATE
EFFECTIVE
INTEREST
RATE
CURRENCY
FINAL
MATURITY
(MTH/
YEAR)
CURRENT
PORTION
NOK 1 000
NON-
CURRENT
PORTION
NOK 1 000
CURRENT
PORTION
NOK 1 000
NON-
CURRENT
PORTION
NOK 1 000
2020
2019
DESCRIPTION OF
LIABILITIES*
Grieg Seafood ASA
Bond loan
NOK
Floating
Price grid
Non-current syndicated loan
NOK/EUR
Floating
Price grid
Syndicated loan- credit facility
NOK/EUR
Floating
Price grid
Grieg Seafood Group
Lease liability (prior IAS 17
finance leases)
Lease liability (prior IAS 17
operational leases)
Subordinate loan
Other non-current and current
liabilities
Multiple
Multiple
GBP
CAD
Floating
Floating
Ocean Quality **
Factoring liabilities
Total
06/2025
02/2023
02/2023
—
1 500 000
102 352
—
869 988
996 646
—
98 212
—
—
944 638
629 319
77 769
355 417
73 575
378 577
75 426
—
176 226
125 752
—
2 083
52 312
—
—
254 090
13 240
—
—
257 630
3 950 589
383 660
2 219 863
Multiple
Floating
—
—
86 122
* Exclusive of the amortization effect of loans
** See Note 5. Ocean Quality AS has been deconsolidated in 2020, and Ocean Quality UK is classified as part of the Shetland disposal group at 31 December 2020.
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BOOK VALUE OF GROUP BORROWINGS BY
CURRENCY NOK 1 000
Green bond loan
Non-current syndicated loan
Syndicated loan- credit facility
Factoring
Lease liability (prior IAS 17 finance leases)
Lease liability (prior IAS 17 operational leases)
Subordinated loan
Other non-current and current liabilities
Amortization effect of loans
Total
BOOK VALUE OF GROUP BORROWINGS BY
CURRENCY NOK 1 000
Green bond loan
Non-current syndicated loan
Syndicated loan- credit facility
Factoring
Lease liability (prior IAS 17 finance leases)
Lease liability (prior IAS 17 operational leases)
Subordinated loan
Other non-current and current liabilities
Amortization effect of loans
31.12.2020
NOK
GBP
EUR
USD
CAD
Other
1 500 000
1 500 000
972 339
475 000
996 646
960 000
—
—
433 187
429 868
251 653
202 899
—
54 394
—
—
-42 768
-42 768
4 165 452
3 525 000
—
—
—
—
—
—
—
—
—
—
—
497 339
36 646
—
—
—
—
—
—
533 985
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3 319
48 753
—
54 394
—
106 466
—
—
—
—
—
—
—
—
—
—
31.12.2019
NOK
GBP
EUR
USD
CAD
Other
—
1 042 850
629 319
86 122
452 152
379 841
13 240
—
—
525 000
580 000
—
—
—
—
85 650
446 699
206 752
—
—
—
142 535
13 240
—
—
—
517 850
49 319
946
—
—
—
—
—
—
—
—
-474
—
—
—
—
—
—
—
—
—
5 453
30 554
—
—
—
-10 022
-10 022
Total
2 593 501
1 748 429
241 425
568 114
-474
36 007
Of which are liabilities at 31.12.2019 associated with assets
classified as held for sale* in 2020:
Factoring
Lease liability (prior IAS 17 operational leases)
Subordinated loan
Total
*See Note 5.
Average interest rate (NOK)
Average interest rate (EUR)
86 122
184 618
13 240
283 980
—
42 083
—
85 650
142 535
13 240
42 083
241 425
946
—
—
946
—
—
—
—
-474
—
—
-474
2020
2.81%
1.59%
The effect of interest rate swaps is not taken into account in calculating the average interest rate on borrowings and credit facilities.
BOOK VALUE AND FAIR VALUE OF BORROWINGS NOK 1 000
Green bond loan
Borrowings (non-current syndicated loan and credit facility, incl.
current part of the non-current liability)
Total
BOOK VALUE
FAIR VALUE
2020
1 500 000
1 968 985
3 468 985
2019
—
2020
1 456 875
2019
—
1 672 169
1 672 169
1 968 985
3 425 860
1 672 169
1 672 169
Book values in the table above are excl the amortization effect of loan cost.
The book value of borrowings (excl. green bond) closely approximates to the fair value.
Our green bond is listed on Oslo Børs (Euronext). Market price of the bond was 97% of par value at year-end 2020.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
2019
2.57%
1.10%
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES NOK 1 000
LEASE LIABILITY
BORROWINGS
At 31.12.2018
Recognized lease liabilities on first-time adoption of IFRS 16
At 01.01.2019
360 441
319 054
679 495
2 039 842
—
2 039 842
TOTAL
2 400 283
319 054
2 719 337
LIABILITIES ARISING FROM FINANCING ACTIVITIES
Liabilities directly associated with the assets classified as held for sale
-219 865
-105 051
-324 917
Cash movements:
Draw-down non-current syndicated NOK term loan incl. credit facility
Repayment non-current syndicated term loan (NOK and EUR)
Repayment overdraft facility
Repayment lease liability (prior IAS 17 finance leases)
Repayment lease liability (prior IAS 17 operational leases)
Loan costs
Sum cash movements
Non-cash movements:
Draw-down lease liability (prior IAS 17 finance leases)
Draw-down lease liability (prior IAS 17 operational leases)
Non-cash movement in factoring liabilities
Foreign currency adjustments
Loan costs
Sum non-cash movements
—
—
—
-43 855
-105 904
—
-149 759
161 798
165 807
—
9 900
—
337 505
369 319
-98 346
-46 597
—
—
-1 169
223 207
—
—
-477 223
-6 639
1 250
-482 612
369 319
-98 346
-46 597
-43 855
-105 904
-1 169
73 449
161 798
165 807
-477 223
3 261
1 250
-145 108
Liabilities directly associated with the assets classified as held for sale
184 618
86 122
270 740
At 31.12.2019
At 01.01.2020
Cash movements:
Draw-down Green bond loan
Draw-down non-current syndicated NOK term loan incl. credit facility
Draw-down other non-current loan
Repayment non-current syndicated term loan (NOK and EUR)
Repayment lease liability (prior IAS 17 finance leases)
Repayment lease liability (prior IAS 17 operational leases)
Loan cost
Sum cash movements
Non-cash movements:
Liabilities directly associated with the assets classified as held for sale
Acquisition of business
Draw-down lease liability (prior IAS 17 finance leases)
Draw-down lease liability (prior IAS 17 operational leases)
Non-cash movements (ex. foreign currency adjustments)
Foreign currency adjustments
Loan costs and net difference to nominal amount raised on green bond loan
Sum non-cash movements
At 31.12.2020
831 993
1 761 508
2 593 501
831 993
1 761 508
2 593 501
—
—
—
—
-77 857
-100 074
—
-177 931
-184 618
4 734
58 850
196 124
-39 084
-5 228
—
30 777
1 500 000
364 135
23 464
-102 267
—
—
-36 743
1 748 589
-98 890
32 758
—
—
2 862
29 788
3 998
-29 484
1 500 000
364 135
23 464
-102 267
-77 857
-100 074
-36 743
1 570 658
-283 508
37 492
58 850
196 124
-36 222
24 561
3 998
1 294
684 839
3 480 613
4 165 453
This Note is prepared for the Group’s continued operations. In 2020, we have classified our Shetland assets as held for sale and treated as discontinued operations. In addition, we have
sold all our shares in Ocean Quality AS in 2020, which also was treated as discontinued operations. The movement table above is prepared for the Group’s continued operations, and
the comparable 2019 movement table is re-presented to be comparable, including the closing balance of the financials directly related to the assets classified as held for sale to be
comparable with the balance sheet. See more information in Note 5.
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NO T E 1 3
LE A S E S
THE GROUP AS A LESSEE
This note is prepared for the Group’s continued operations. See more information in Note 5.
The Group has several lease arrangements. Prior to IFRS 16, the Group had both financial leases according to IAS 17 recognized on the
statement of financial position, in addition to operating leases recognized in the "other operating expenses" in the income statement as the
lease cost incurred. As of 1 January 2019, the Group applied IFRS 16 using the modified retrospective approach. Information concerning the
implementation of IFRS 16 has been disclosed in our 2019 Annual Report. In this 2020 Annual Report, only some if the information relevant
for the initial application and implementation of IFRS 16 has been repeated.
LEASES PREVIOUSLY CLASSIFIED AS FINANCE LEASES UNDER IAS 17
Prior to 1 January 2019, the Group classified finance leases according to IAS 17 as property, plant & equipment. The carrying amount of
the right-of-use asset and the lease liability at 1 January 2019 was carried over from 31 December 2018 at the date if initial application of
IFRS 16. The leases relate to barges, cage installations, plant, machinery and other equipment. The lease term for equipment of this kind is
normally 7-8 years. The Group must give written notification if it wishes to terminate these agreements.
LEASES PREVIOUSLY CLASSIFIED AS OPERATING LEASES UNDER IAS 17
The Group leases offices, docks, berths, vessels, etc. with terms of 5–10 years. The Group also leases various well-boats, as well as
contracts for delousing and cleaning of nets. The term of the contracts is 2–5 years, whereof some of the contracts have extension options.
On transition to IFRS 16 at 1 January 2019, the Group recognized right-of-use assets (ROU assets) corresponding to the present value of
lease liabilities at a total amount of NOK 319 million on leases previously classified as operating leases under IAS 17. Equity effect of the
transitioning 1 January 2019 was NOK 0. The right-of-use asset is classified as property, plant and equipment.
INCREMENTAL BORROWING RATES
The incremental borrowing rates applied to the lease liabilities at the date of initial recognition 1 January 2019 was in the interval of 3.1% -
4.1% for buildings and properties and 2.8% - 4.1% for other assets.
The Group reassesses the incremental borrowing rates applicable for new lease agreements annually. The applied rates for 2020 ranged
from 2.4 % - 3.5 % for buildings and properties, and 2.4 - 3.5 for other assets.
CURRENCY
The leases are recognized in the respective Group companies in local currencies, and translated to the Group’s presentation currency at the
balance sheet date.
PRACTICAL EXPEDIENTS APPLIED
The Group leases smaller office equipment, such as coffee machines with contract terms of 1-3 years. The Group has elected to apply
the practical expedient of low-value assets for some of these leases. Leases that have a present value as new lower than USD 5 000, are
considered low value leases. The Group has also applied the practical expedient for short-term leases. Short term is defined as a lease term
of 12 month or less at the commencement date. For low-value leases and short-term leases, the Group does not recognize lease liabilities
or right-of-use assets. These leases are recognized as operating expenses over the life of the life of the contract.
EXTENSION OPTIONS
Some of the Group's agreements have extension options which may by exercised during the last period of the lease term. The Group
assesses at the commencement whether it is reasonably certain to exercise the renewal right. The Group's potential future lease payments
not included in the lease liabilities related to extension options is NOK 137 million at 31 December 2020.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS THE EFFECT OF IFRS 16
The effect of IFRS 16 is calculated as the amount capitalized as lease liabilities and right-of-use assets, with income statement effects,
related to leases classified as operating leases according to IFRS in force prior to 1 January 2019. The following two tables illustrate the
effect IFRS 16 has had on the Group in 2020, with comparable figures for 2019. The 2019 balance sheet figures are not re-presented for the
effects of IFRS 5.
THE EFFECT OF IFRS 16 - STATEMENT OF FINANCIAL POSITION NOK 1 000
31.12.2020
31.12.2019
Right of use assets included in Property, plant and equipment inclusive right-of-use assets
Lease liabilities included in non-current lease liabilities
Lease liabilities included in current lease liabilities
THE EFFECT OF IFRS 16 - INCOME STATEMENT NOK 1 000
Other operating expenses
EBITDA before fair value adjustment
Depreciation and amortization
EBIT before fair value adjustment of biological assets
Fair value adjustment of biological assets
EBIT after fair value adjustment of biological assets
Net financial items
Profit before tax
244 692
176 226
75 426
2020
108 313
108 313
-103 343
4 970
—
4 970
-8 882
-3 911
374 161
254 090
125 752
2019
112 387
112 387
-107 331
5 057
—
5 057
-9 875
-4 818
SPECIFICATION OF RIGHT-OF-USE ASSETS
The Group's right-of-use assets are included in the financial statement line item "Property, plant and equipment incl. right-of-use-assets".
These leased assets include both assets that would be treated as financial leases according to IFRS in force prior to 1 January 2019, as well
as operational leases ("the effect of IFRS 16").
RIGHT-OF-USE ASSETS 2020
NOK 1 000
Book value at 01.01.
Assets classified as held for sale*
Currency translation differences
Additions
Cancellation of lease and other changes
Depreciation
Book value at 31.12.
BUILDINGS/
PROPERTY
PROD. PLANTS
AND BARGES
NETS, CAGES
AND MOORINGS
OTHER
EQUIPMENT
70 016
-27 966
-288
53 102
-8 234
-8 971
77 659
282 764
95 503
—
42
-1 854
-956
-19 164
260 832
—
8
31 595
-6 064
-15 810
105 232
417 224
-159 809
2 027
186 286
-43 629
-104 367
297 732
TOTAL
865 507
-187 775
1 789
269 128
-58 883
-148 311
741 454
*This Note is prepared for the Group’s continued operation. In 2020, we have classified our Shetland assets as held for sale and treated as discontinued operations. In addition, we have
sold all our shares in Ocean Quality AS in 2020, which also was treated as discontinued operations. The movement table above (and the other movement tables in this Note, including
comparative information, as well as the maturity tables) is prepared for the Group’s continued operations, and the comparable 2019 movement table is re-presented to be comparable,
including the closing balance of the financials directly related to the assets classified as held for sale to be comparable with the balance sheet. See more information in Note 5.
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RIGHT-OF-USE ASSETS 2019
NOK 1 000
Book value at 01.01.*
Initial application effect of IFRS 16**
Assets classified as held for sale, opening balance***
Acquisition of business
Currency translation differences
Additions
Cancellation of lease and other changes
Depreciation
Book value at 31.12 excl assets classified as held for sale
Assets classified as held for sale, closing balance***
Book value at 31.12.
BUILDINGS/
PROPERTY
PROD. PLANTS
AND BARGES
NETS, CAGES
AND MOORINGS
OTHER
EQUIPMENT
—
65 248
-29 056
—
654
12 528
—
-7 324
42 050
27 966
70 016
193 463
105 648
—
—
—
1 254
130 330
-24 827
-17 456
282 764
—
282 764
—
—
—
710
18 145
-12 142
-16 858
95 503
—
95 503
113 201
253 806
TOTAL
412 312
319 054
-181 913
-210 969
—
-522
155 730
-10 059
-72 827
257 415
159 809
417 224
—
2 095
316 733
-47 028
-114 465
677 732
187 775
865 507
*For leases that as of 31 December 2018 were classified as finance leases under IAS 17, the carrying amount of the right-of-use asset and the lease liability at 1 January 2019 was
carried over at the date if initial application of IFRS 16. The Group applied IFRS 16 in line with the modified retrospective approach as of 1.1.2019.
**The initial application effect of IFRS 16 relates to the recognition of leases classified as operational leases under IAS 17.
***See footnote under the right-of-use assets for 2020 table in this Note.
LEASE LIABILITY
SUMMARY OF THE LEASE LIABILITIES NOK 1 000
Lease liabilities at 01.01.
At initial application of IFRS 16, 01.01.
Assets classified as held for sale*
Acquisition of business
New leases recognized during the year
Cash payments for the principal portion of the lease liability
Currency exchange differences
Cancellation of lease and other changes
Total lease liabilities at 31.12. excl assets classified as held for sale
Liabilities directly associated with the assets classified as held for sale*
Total lease liabilities at 31.12.
2020
831 993
—
-184 618
4 734
254 973
-177 931
-5 227
-39 085
684 839
—
684 839
2019
360 442
319 054
-213 179
—
328 354
-149 759
2 463
—
647 376
184 618
831 993
*Relates to the held for sale- and discontinued operations-classifications of the Group's Shetland assets, as well as the discontinued operations of Ocean Quality. See more information
in the footnote under this Note’s 2020 right-of-use assets movement table, in addition to Note 5.
MATURITY ANALYSIS - LEASE LIABILITIES NOK 1 000
2020
FORMER IAS 17
FINANCIAL LEASE
FORMER IAS 17
OPERATIONAL LEASE
TOTAL LEASE
LIABILITY
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
More than five years
Total undiscounted liabilities at 31.12
Lease liabilities included in the statement of financial position at 31.12
Current portion
Non-current portion
88 866
80 930
72 218
61 044
48 280
126 404
477 742
433 186
82 712
70 077
42 684
31 895
8 352
40 115
275 835
251 653
171 578
151 007
114 902
92 939
56 632
166 519
753 577
684 839
153 195
531 644
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS MATURITY ANALYSIS - LEASE LIABILITIES NOK 1 000
2019
FORMER IAS 17
FINANCIAL LEASE
FORMER IAS 17
OPERATIONAL LEASE
TOTAL LEASE
LIABILITY
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
More than five years
Total undiscounted liabilities at 31.12 continued operations
Total undiscounted liabilities at 31.12 directly associated with the assets classified
as held for sale*
Total undiscounted liabilities at 31.12
Lease liabilities included in the statement of financial position at 31.12
Current portion
Non-current portion
*See the footnote inserted below the 2020 movement table for right-of-use assets in this Note.
AMOUNTS RECOGNIZED IN PROFIT OR LOSS NOK 1 000
Interest on lease liabilities
Foreign currency effect
Depreciation right-of-use assets
Expenses relating to short-term leases
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets
Total
NOK 1 000
Total cash outflow for leases
87 230
80 269
71 861
63 113
51 894
154 641
509 008
—
509 008
452 152
72 222
53 135
45 774
13 853
6 163
17 549
208 696
211 771
420 467
379 841
2020
-22 717
1 035
-148 311
-17 898
-8
-187 901
2020
-200 648
159 451
133 404
117 635
76 966
58 057
172 190
717 703
211 771
929 475
831 993
199 327
632 666
2019
-20 114
—
-110 514
-49 416
-8
-180 052
2019
-169 872
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NO T E 1 4
CL A S SI FIC AT IONS OF FIN ANCI AL INS T RUMEN T S
FINANCIAL INSTRUMENTS AT 31.12.2020 NOK 1 000
FVPL 1)
AMORTIZED COST
FVOCI 2)
TOTAL
FINANCIAL ASSETS
Other non-current receivables
Trade receivables
Other receivables
Derivatives
Cash and cash equivalents
Total financial assets
FINANCIAL LIABILITIES
Borrowings
Lease liability (prior IAS 17 finance leases)
Lease liability (prior IAS 17 operational leases)
Factoring liabilities
Cash-settled options
Derivatives
Trade payables
Other current liabilities
Total financial liabilities
—
—
—
84 189
—
84 189
—
—
—
—
2 842
14 346
—
—
17 188
2 484
179 384
38 160
—
275 427
495 454
3 480 613
433 186
251 653
—
—
—
562 848
—
4 728 300
295
—
—
—
—
295
—
—
—
—
—
—
—
—
—
2 778
179 384
38 160
84 189
275 427
579 937
3 480 613
433 186
251 653
—
2 842
14 346
562 848
—
4 745 487
FINANCIAL INSTRUMENTS AT 31.12.2019 NOK 1 000
FVPL 1)
AMORTIZED COST
FVOCI 2)
TOTAL
FINANCIAL ASSETS
Other non-current receivables
Trade receivables
Other receivables
Derivatives
Cash and cash equivalents
Total financial assets
FINANCIAL LIABILITIES
Borrowings
Lease liability (prior IAS 17 finance leases)
Lease liability (prior IAS 17 operational leases)
Factoring liabilities
Cash-settled options
Derivatives
Trade payables
Other current liabilities
Total financial liabilities
—
—
—
7 368
—
7 368
—
—
—
—
19 649
10 107
—
—
29 756
2 077
459 897
60 000
—
214 497
736 471
1 675 386
452 152
379 841
86 122
—
—
855 061
10 902
3 459 464
1 053
—
—
—
—
1 053
—
—
—
—
—
-786
—
—
-786
3 130
459 897
60 000
7 368
214 497
744 892
1 675 386
452 152
379 841
86 122
19 649
9 321
855 061
10 902
3 488 434
1) FVPL: Fair value through profit or loss.
2) FVOCI: Fair value through other comprehensive income.
The purpose of the derivatives is to reduce the Group´s exposure to changes in floating interest rates and exchange rates. See Notes 2 and 3 for further details.
CREDITWORTHINESS OF FINANCIAL ASSETS
Credit risk attaching to financial instruments that have not matured or have not been written down is shown in accordance with the internal
classification of historical information on breaches of credit covenants. Further information about credit risk is provided in Note 3.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS TRADE RECEIVABLES NOK 1 000
2020
2019
COUNTERPARTIES WITH NO EXTERNAL CREDIT RATING
Group 1
Group 2
Group 3
Total trade receivables
BANK DEPOSITS NOK 1 000
AAA
AA
A
Total bank deposits
81 717
64 319
33 348
179 384
2020
—
275 427
—
275 427
46 665
354 736
58 495
459 897
2019
—
214 497
—
214 497
Group 1 - new customers/related parties (less than 6 months).
Group 2 - existing customers/related parties (more than 6 months) with no history of credit covenant breaches.
Group 3 - existing customers/related parties (more than 6 months) with a history of one or more credit covenant breaches. All amounts due
have been paid in full following the breaches.
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NO T E 1 5
TA X E S
BREAKDOWN OF TAX EXPENSE NOK 1 000
Tax payable Norway
Tax payable abroad
Changes in assessment of taxes for prior years
Change in deferred tax Norway
Change in deferred tax abroad
Taxes
TAX RECONCILIATION
Profit before tax
Taxes calculated at nominal tax rate
Withholding tax
Change in deferred tax liabilities because of tax rate change
True up deferred tax position incl. recognition of deferred tax assets previously not recognized
Utilization of tax position not recognized in basis for deferred tax previously
Other permanent differences
Taxes
CHANGE IN BOOK VALUE OF NET DEFERRED TAX
Balance sheet value at 01.01.
Effect of discontinued operations*
Currency conversion
Effect of business combinations**
Tax effect of OCI transactions (see Note 3)
Other effects
Change in deferred tax recognized in income in period
Net deferred tax liability at balance sheet date
*See Note 5.
**See Note 6.
2020
279
14 513
-7 599
-1 228
5 593
11 557
-304 440
-39 945
3 033
—
56 962
-8 916
423
11 557
874 664
-66 839
-14 710
83 110
-5 380
4 455
4 365
879 665
2019
209 797
4 235
11 225
-15 624
-12 496
197 137
796 315
192 634
1 016
197
—
—
3 290
197 137
877 639
—
15 295
-955
6 560
3 248
-28 120
873 666
The nominal tax rate in Norway is 22%. The nominal tax rate for 2020 in Canada was 27% in BC and 30 % in Newfoundland. The nominal tax
rate on Shetland, of which relates to the Group’s assets classified as held for sale (Note 5), was 19%.
The significant tax effect is attributable to a change in the tax rate and other permanent differences.
The following tables provide a breakdown of deferred tax. The tax effects of taxable and deductible temporary differences are shown
separately. The Norwegian, Canadian and UK parts of the Group each have a net deferred tax position. Deferred tax liabilities and deferred
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS tax assets within Norway, BC, Canada, and UK can be offset.
DEFERRED TAX NOK 1 000
LICENSES
NON-
CURRENT
ASSETS
BIOLOGICAL
ASSETS
RECEIVABLES /
PENSIONS
INVENTORIES
DEFERRED
CAPITAL
GAIN
CURRENT
LIABILITIES
TOTAL
903 447
-20 923
15 421
2 369
—
900 313
900 314
-102 484
54 458
-11 797
5 874
88 436
934 800
TOTAL
-27 526
-7 197
-127
8 187
15
164 935
63 142
637 028
29 062
9 007
-105
2 405
-1 218
—
31 379
1 674
-360
—
-51 772
10 992
-417
—
-558
—
7 556
—
166 017
95 835
595 832
36 061
166 017
-76 188
-105
-23 697
—
224 405
290 433
95 835
-14 933
7 457
14 725
—
-147 969
-44 886
595 832
-11 364
23 819
-1 529
5 453
—
612 211
36 062
—
23 381
-1 240
420
12 000
70 624
187
351
-3 193
—
6 352
6 352
—
-990
-56
—
—
5 305
272
-55
—
—
—
217
216
—
897
—
—
—
1 113
—
—
—
—
—
—
—
—
—
—
—
—
—
LOSS CARRY
FORWARDS
NON-
CURRENT
ASSETS
RECEIVABLES
/PENSIONS
LEASE
OBLIGATION
TAX
CREDITS
OTHER
LIABILITIES
-18 669
-19 869
149
4 748
15
-33 626
-33 626
36 744
-40 609
—
-3 219
-5 326
-46 035
—
—
—
—
—
—
—
—
42
—
—
—
42
-1 424
5 898
105
—
—
4 578
4 578
1 273
-1 925
-51
-5 800
—
-1 925
-1 811
1 396
-120
5 382
—
4 848
4 848
557
5 919
-155
269
—
-714
-650
-55
—
—
-4 909
6 028
-205
-1 943
—
-1 419
-1 028
-26 648
-1 419
—
8 025
-6
—
—
-1 028
-2 929
-21 546
251
-1
—
-26 648
35 646
-50 094
38
-8 751
-5 326
2019
Opening balance Opening balance
01.01.
Recognized in income in the
period
Currency translation differences
Other effects
Effect of business combinations
At 31.12.
2020
Opening balance 01.01.
Assets classified as held for sale*
Recognized in income in the
period
Currency translation differences
Other effects
Effect of business combinations**
At 31.12.
*See Note 5.
**See Note 6.
DEFERRED TAX NOK 1 000
2019
Opening balance Opening balance 01.01.
Recognized in income in the period
Currency translation differences
Other effects
Effect of business combinations
At 31.12.
2020
Opening balance 01.01.
Assets classified as held for sale*
Recognized in income in the period
Currency translation differences
Other effects
Effect of business combinations**
At 31.12.
*See Note 5.
**See Note 6.
NOK 1 000
Net deferred tax
Deferred tax classified as non-current assets
Deferred tax classified as non-current liabilities
Tax payable classified as current liabilities
11 436
6 600
-25 253
-55 135
2020
2019
879 665
873 666
29 293
908 959
14 792
998
874 664
211 569
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NET CHANGE IN DEFERRED TAX RECOGNIZED IN INCOME NOK 1 000
Change in deferred tax in Norway
Change in deferred tax abroad
Change in book value of deferred tax
Change in the period for positions with net deferred tax
Change in the period for positions with net deferred tax asset
Change in book value of deferred tax
2020
-1 228
5 593
4 365
54 458
-50 094
4 365
2019
-15 624
-12 496
-28 120
-20 923
-7 197
-28 120
LOSS CARRIED FORWARD
Deferred tax assets related to an allowable deficit are recognized in the balance sheet in so far as it is likely that these can be offset against
future taxable profits.
DEFERRED TAX ASSETS RELATING TO A TAX LOSS CARRIED FORWARD
ARE DIVIDED AMONG THE FOLLOWING JURISDICTIONS
Norway
Canada
USA
UK
Total
2020
-22 136
-14 657
-3 816
—
-40 609
2019
-478
—
—
-18 191
-18 669
NO T E 16
S AL AR I E S AND P ER S ONNEL E XP ENSE S
SALARIES AND PERSONNEL EXPENSES NOK 1 000
Salaries
Social security costs
Share options granted to directors and key employees, incl. social security costs (Note 17)
Pension costs
Other personnel costs
Total
Average number of employees
Continued operations
Discontinued operations (Note 5)
Total
2020
393 390
24 838
-4 996
24 151
62 163
499 546
697
258
955
2019
369 895
33 691
16 387
22 666
50 543
493 183
608
229
837
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS THE BOARD´S GUIDELINES AND PRINCIPLES FOR DETERMINATION OF REMUNERATION AND OTHER BENEFITS PAID
TO KEY PERSONNEL:
In December 2019 the Norwegian Parliament adopted new rules on the wage policy of listed public companies. New rules came into
force in January 2021 and replace the current rules on guidelines for wage policy as well as the requirements for reporting wages and
remuneration. New provisions from 1 January 2021 mean that the public limited companies are not obliged to submit a management salary
declaration for 2020.
SHARE SAVINGS PROGRAM
Grieg Seafood established a share savings program for its employees in 2018, which was continued in 2019 and 2020.
Employees may invest up to NOK 25 000 per year. There is a three years lock-up period. The saved amount is deducted from the monthly
net salary and used to purchase Grieg Seafood shares on behalf of the employees. The purchase will be made from transfer of Grieg
Seafood's treasury shares or bought in the market. The purchase price and the number of shares acquired by the company will be
reported in accordance with the applicable regulations.
At 31 December 2020, loan to employees related to the share savings program constitutes NOK 2.6 million (2018: NOK 1.6 million). The total
shares sold to employees was 42 193 in 2020 (14 737 in 2019).
REMUNERATION PAID TO GROUP
MANAGEMENT IN 2020 NOK 1 000
SALARY
BONUS
RETAINED, NOT
YET PAID
OPTIONS
EXERCISED
DURING THE
YEAR
OTHER
REMUNERATION
CEO
CFO
CTO
CHRO
COO Farming Europe
COO Farming North America
CCO
GCM
2 841
2 173
1 996
1 574
1 996
1 825
525
1 035
536
342
308
236
402
233
—
139
Total remuneration paid to group management
13 963
2 197
—
—
—
—
—
—
—
—
—
2 709
2 070
1 868
1 431
1 615
1 571
—
—
11 264
118
101
101
106
78
78
81
96
759
TOTAL
6 203
4 686
4 272
3 347
4 092
3 706
606
1 269
28 183
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 18.
In May 2020, Grieg Seafood announced changes to the Group management structure, with inclusion of COOs for farming in Europe and North America. In June, the Chief Commercial
Officer was added to the Group management team of Grieg Seafood.
REMUNERATION PAID TO BOARD MEMBERS IN 2020 NOK 1 000
Per Grieg Jr.*
Tore Holand**
Sirine M. Fodstad*
Marianne Ribe (from 14 May 2020)*
Katrine Trovik (from 14 May 2020)**
Asbjørn Reinkind (until 14 May 2020)
Karin Bing Orgland (until 14 May 2020)**
Solveig M.R. Nygaard (until 14 May 2020)
Total remuneration including social security costs
TOTAL
479
348
308
178
195
140
143
119
1 909
* Payment for work performed on the Remuneration Committee of NOK 22 820 is included in the remuneration paid to Per Grieg Jr. and Sirine Fodstad, and NOK 11 410 for Marianne
Ribe.
** Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand, Katrine Trovik and Karin Bing Orgland, amounting to NOK 57 050, 28 525
and 23 770, respectively.
The amounts include social security costs.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
REMUNERATION PAID TO GROUP
MANAGEMENT IN 2019 NOK 1 000
SALARY
BONUS
RETAINED, NOT
YET PAID
OPTIONS
EXERCISED
DURING THE
YEAR
OTHER
REMUNERATION
CEO
CFO
COO
CHRO
Total remuneration paid to group management
2 759
1 795
1 919
1 505
7 980
347
184
133
280
945
601
383
345
265
1 594
2 592
1 652
1 787
1 645
7 677
101
101
101
103
406
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 18.
REMUNERATION PAID TO BOARD MEMBERS IN 2019 NOK 1 000
Per Grieg Jr.*
Asbjørn Reinkind*
Wenche Kjølås (until 13.06.2019)**
Karin Bing Orgland **
Solveig M.R. Nygaard
Tore Holand**
Sirine M. Fodstad (from 13.06.2019)***
Total remuneration including social security costs
TOTAL
6 401
4 117
4 286
3 798
18 602
TOTAL
456
319
140
311
257
285
154
1 923
* Payment for work performed on the Remuneration Committee of NOK 19 968 is included in the remuneration paid to Per Grieg Jr. and Asbjørn Reinkind.
** Payment for work performed on the Audit Committee is included in the remuneration paid to Wenche Kjølås, Karin Bing Orgland and Tore Holand, amounting to NOK 25 673, 54 198
and 28 525, respectively.
*** Payment for work performed on the Remuneration Committee of NOK 11 410 is included in the remuneration paid to Sirine Fodstad.
The amounts include social security costs.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 17
SH A R E B A SE D PAYMEN T S
The Group has issued options to the management team and regional directors. The options’ strike price is the stock market price on the date
of issue, rising by 0.5% per month until the exercise date. Since 2009, an option scheme with settlement in cash has been established for
the Group management and regional directors. The most recent allocation was in 2020, totalling 1 890 000 options. The final exercise date
is 31 May 2024. The options have a term of two years, where 50% is vested each year.
Employees starting in the Group after the initial allocation of options, are allocated options on taking up employment.
The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to perform the calculations. The
table below shows the movement in outstanding options in 2019 and 2020.
OVERVIEW 2020
(TOTAL OPTIONS)
OPTION
CATEGORY
OUTSTANDING
OPTIONS AT
31.12.2019
GRANTED
OPTIONS
EXERCISED
OPTIONS
Cash settlement
Cash settlement
Cash settlement
Cash settlement
Cash settlement
400 000
200 000
200 000
132 712
—
340 000
170 000
170 000
100 000
100 000
48 271
36 881
33 287
25 509
—
EXPIRED
OPTIONS
151 729
63 119
66 713
7 203
—
OUTSTANDING
OPTIONS AT
31.12.2020
OF WHICH CASH-
SETTLED
540 000
270 000
270 000
200 000
100 000
540 000
270 000
270 000
200 000
100 000
Cash settlement
200 000
170 000
28 781
71 219
270 000
270 000
Cash settlement
Cash settlement
Cash settlement
200 000
—
277 492
1 610 205
170 000
170 000
500 000
1 890 000
27 992
—
51 990
252 711
72 008
—
25 503
457 494
270 000
170 000
700 000
270 000
170 000
700 000
2 790 000
2 790 000
OPTION
CATEGORY
OUTSTANDING
OPTIONS AT
31.12.2018
EXERCISED
OPTIONS
EXPIRED
OPTIONS
OUTSTANDING
OPTIONS AT
31.12.2019
OF WHICH CASH-
SETTLED
Cash settlement
Cash settlement
Cash settlement
Cash settlement
Cash settlement
600 000
276 044
300 000
200 000
999 999
2 376 044
29 530
18 826
20 364
67 288
157 238
293 246
170 470
57 218
79 636
—
165 269
472 593
400 000
200 000
200 000
132 712
677 492
400 000
200 000
200 000
132 712
677 492
1 610 205
1 610 205
P
A
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E
2
8
2
—
2
8
3
CEO
CFO
CTO
CHRO
GCM
COO Farming
Europa
COO Farming North
America
CCO
Others
Total
OVERVIEW 2019
(TOTAL OPTIONS)
CEO
CFO
COO
CHRO
Others
Total
GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
ALLOCATION:
YEAR - MONTH
EXPIRY DATE: YEAR -
MONTH
STRIKE PRICE NOK PER
SHARE AT 31.12.2020
STRIKE PRICE NOK PER
SHARE AT 31.12.2019
2017 - 11
2017 - 11
2020 - 12
2020 - 12
Total
2020 - 05
2021 - 05
2023 - 05
2024 - 05
100.07
100.07
78.96
78.96
94.29
94.29
—
—
Cash-based options available for settlement
Weighted average exercise price on outstanding options (NOK per option)
OPTIONS
2020
—
900 000
945 000
945 000
2019
710 205
900 000
—
—
2 790 000
1 610 205
2020
2 790 000
80.26
2019
1 610 205
83.00
NOK/OPTION
AMOUNTS IN NOK 1 000
OPTION
CATEGORY
LISTED
PRICE ON
ALLOCATION
CALCULATED
VALUE PER
OPTION ON
ALLOCATION
CALCULATED
TOTAL
VALUE ON
ALLOCATION *
TOTAL
VALUE
OF ALL
OPTIONS AT
1.1.2020
CHANGE IN
PROVISION
CB-OB*
EXERCISED
OPTION
2020
ACC. COST
RECOGNIZED
IN EQUITY AT
31.12.2020
RECOGNIZED
LIABILITY
CASH
SETTLEMENT
AT 31.12.2020
2020
Former employees
with expired options
Equity
option
CEO
CFO
CTO
CHRO
GCM
COO Farming
Europe
COO Farming North
America
CCO
Other options
allocated in 2020
CEO
CFO
COO
CHRO
Other options
allocated in 2017
Total
Cash
Cash
Cash
Cash
Cash
—
78.96
78.96
78.96
78.96
78.96
Cash
78.96
Cash
Cash
Cash
Cash
Cash
Cash
Cash
78.96
78.96
78.96
83.00
83.00
83.00
83.00
Cash
83.00
*) Amounts exclude social security costs
—
4.35
6.34
5.82
7.20
6.04
5.87
5.87
6.13
7.04
2.26
2.79
2.79
2.38
2.35
—
1 480
1 078
989
720
604
999
999
1 042
3 519
906
557
557
475
—
—
—
—
—
—
—
—
—
—
4 007
2 505
2 688
1 891
—
56
41
37
27
23
38
38
39
132
-3 540
-2 188
-2 392
-1 645
—
—
—
—
—
—
—
—
—
—
2 709
2 070
1 868
1 431
1 880
15 802
8 557
19 649
-7 472
-16 807
6 103
14 181
6 887
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6 887
—
56
41
37
27
23
38
38
39
132
467
316
296
247
1 085
2 842
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NOK/OPTION
AMOUNTS IN NOK 1 000
OPTION
CATEGORY
LISTED
PRICE ON
ALLOCATION
CALCULATED
VALUE PER
OPTION ON
ALLOCATION
CALCULATED
TOTAL
VALUE ON
ALLOCATION *
TOTAL
VALUE
OF ALL
OPTIONS AT
01.01.2019
CHANGE IN
PROVISION
CB-OB*
EXERCISED
OPTION
2019
ACC. COST
RECOGNIZED
IN EQUITY AT
31.12.2019
RECOGNIZED
LIABILITY
CASH
SETTLEMENT
AT 31.12.2019
2019
Former employees
with expired options
Equity
option
CEO
CFO
COO
CHRO
CEO
CFO
COO
CHRO
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
—
25.50
25.50
25.50
79.00
83.00
83.00
83.00
83.00
Other options
allocated in 2015
Other options
allocated in 2017
Total
Cash
25.50
Cash
83.00
*) Amounts exclude social security costs
ACCRUED COSTS RELATED TO CASH OPTIONS NOK 1 000
Change in provisions
Exercised options during the year
Total costs excl. social security costs
Social security costs
Total costs incl. social security costs
—
3.36
3.97
3.97
3.63
2.26
2.79
2.79
2.38
3.60
2.35
—
1 342
793
793
363
906
557
557
475
—
2 575
1 634
1 773
—
1 709
1 057
1 130
898
—
-2 575
-1 634
-1 773
—
2 298
1 448
1 558
994
—
2 592
1 652
1 787
1 645
—
—
—
—
2 876
3 027
-3 027
3 267
1 880
10 543
3 699
17 503
4 858
2 145
2 995
13 939
6 887
—
—
—
—
—
—
—
—
—
—
6 887
—
—
—
—
—
4 007
2 505
2 688
1 891
—
8 557
19 649
2020
-16 807
14 181
-2 626
-2 370
-4 996
2019
CLASSIFICATION IN FINANCIAL STATEMENTS
2 145
Other provisions for liabilities
13 939
Salaries and personnel expense / cash
16 085
303
Public taxes payable
16 387
Salaries and personnel expense
Cost relating to cash-based remuneration in 2020 totalled NOK -4 996 thousand. This is recognized in the income statement as a personnel
cost. Social security contributions are provided for on an ongoing basis based on the fair value of the options.
As at 31 December 2020, outstanding options with the right to cash settlement were stated at NOK 2 842 thousand excl. social security costs,
of which NOK 2 411 thousand were classified as current liabilities. Issued options are cancelled on termination of employment. Book value
of long term liabilities incl. social security cost is NOK 491 thousand.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS
Anticipated volatility (%)
Risk-free rate of interest (%)
Estimated qualification period (years)
31.12.2020
31.12.2019
37.90%
1.39%
0.98
41.49%
1.07%
1.56
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
In order to estimate volatility, management has applied historical volatility for comparable listed companies.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
NO T E 1 8
S H AR E C AP I TA L AN D SH AR EHOLDER INF OR M AT ION
As at 31 December 2020, the Company had 113 447 042 shares with a nominal value of NOK 4 per share. All shares issued by the Company
are fully paid-up. There is one class of shares and all shares confer the same rights.
SHARE CAPITAL AND NUMBER OF SHARES
31.12.2020
NOMINAL VALUE
PER SHARE (NOK)
TOTAL SHARE CAPITAL NOK 1 000
NO. OF ORDINARY SHARES
Total
Holdings of treasury shares
Sale of treasury shares 2018-2019
Sale of treasury shares 2020
Total excl treasury shares
4.00
4.00
4.00
4.00
453 788
-5 000
145
169
449 102
113 447 042
-1 250 000
36 313
42 193
112 275 548
TREASURY SHARES
In June 2011, the Company purchased 1 250 000 treasury shares at NOK 14.40 per share. On 21 November 2018, the Company sold 21 576
shares to employees for use in the share savings program. The sales price was NOK 121.56 per share, which provided a gain of NOK 107.16
per share. Another 14 737 shares were sold to employees in November 2019 at a sales price of NOK 136.05 per share, providing a gain of
NOK 121.65 per share. In 2020, Grieg Seafood ASA sold 42 193 at a sales price of NOK 77.16 a share, providing a gain of NOK 62.76 a share.
After the transactions the Company has 1 171 494 treasury shares.
CHANGES IN SHARE CAPITAL
Share capital
Contribution in kind
Share capital
NOMINAL VALUE
PER SHARE (NOK)
TOTAL SHARE CAPITAL
NOK 1 000
NO. OF ORDINARY SHARES
1 January 2020
20 April 2020
31 December 2020
4.00
4.00
4.00
446 648
7 140
453 788
111 662 000
1 785 042
113 447 042
ACQUISITION OF GRIEG NEWFOUNDLAND
On 20 April 2020, Grieg Seafood ASA' share capital was increased by 1 785 042 shares (nominal value of NOK 4 per share), from 111 662 000
shares to 113 447 042 shares. The share capital was thus increased by NOK 7 140 168, from NOK 446 648 000 to NOK 453 788 168. The share
issue in the Company to shareholders Grieg Aqua AS, Kvasshøgdi AS, Knut Skeidsvoll and Ocean Choice International Ltd was related to the
Company’s acquisition of Grieg Newfoundland AS, which was completed on 15 April 2020. For more information, see Note 6.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA
31.12.2020
31.12.2020
31.12.2019
31.12.2019
NO. OF SHARES
SHAREHOLDING
NO. OF SHARES
SHAREHOLDING
Grieg Aqua AS
Folketrygdfondet
OM Holding AS
Ystholmen Felles AS
Clearstream Banking S.A. (nominee)
State Street Bank and Trust Comp (nominee)
Ronja Capital II AS
Grieg Seafood ASA
Six Sis AG (nominee)
UBS Switzerland AG (nominee)
JPMorgan Chase Bank, N.A., London (nominee)
Banque Degroof Petercam Lux. SA (nominee)
Verdipapirfondet Pareto Investment
State Street Bank and Trust Comp (nominee)
State Street Bank and Trust Comp (nominee)
Ferd AS
Svenska Handelsbanken AB (nominee)
J.P. Morgan Bank Luxembourg S.A. (nominee)
State Street Bank and Trust Comp (nominee)
Danske Invest Norge Vekst
Total 20 largest shareholders
Total others
Total number of shares
56 914 355
50.17%
56 018 799
50.17%
4 281 530
4 235 656
2 928 197
1 937 653
1 616 926
1 200 000
1 171 494
1 038 659
945 209
915 596
822 051
764 000
737 722
697 771
688 453
593 415
592 624
524 061
521 000
3.77%
3.73%
2.58%
1.71%
1.43%
1.06%
1.03%
0.92%
0.83%
0.81%
0.72%
0.67%
0.65%
0.62%
0.61%
0.52%
0.52%
0.46%
0.46%
5 100 130
6 169 379
2 928 197
1 745 002
2 166 080
—
1 213 687
—
780 949
915 596
—
1 701 000
1 057 400
597 876
—
—
—
—
—
4.57%
5.53%
2.62%
1.56%
1.94%
—%
1.09%
—%
0.70%
0.82%
—%
1.52%
0.95%
0.54%
—%
—%
—%
—%
—%
83 126 372
30 320 670
113 447 042
73.27%
26.73%
100.00%
80 394 095
31 267 905
111 662 000
72.00%
28.00%
100.00%
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
SHARES CONTROLLED BY BOARD MEMBERS AND GROUP
MANAGEMENT
31.12.2020
31.12.2020
31.12.2019
31.12.2019
NO. OF SHARES
SHAREHOLDING
NO. OF SHARES
SHAREHOLDING
58 961 996
52.80%
BOARD OF DIRECTORS
Per Grieg Jr. *
Tore Holand (Skippergata 24 AS, and privately)
Sirine Fodstad
Marianne Ribe (board member from 14 May 2020)
Katrine Trovik (board member from 14 May 2020)
Asbjørn Reinkind (Reinkind AS, board member until 14 May 2020)
Karin Bing Orgland (board member until 14 May 2020)
Solveig Nygaard (board member until 14 May 2020)
GROUP MANAGEMENT
CEO
CFO
CTO
COO Farming Europe
COO Farming North America
CHRO
GCM
CCO
60 354 324
2 000
—
—
—
120 000
—
4 000
39 489
24 532
23 831
22 489
19 889
12 060
424
—
53.20%
0.00%
—%
—%
—%
0.11%
—%
0.00%
0.03%
0.02%
0.02%
0.02%
0.02%
0.01%
0.00%
—%
—
—
—
—
120 000
—
—
39 165
24 208
23 507
22 165
19 565
7 536
—
—
* THE SHARES OWNED BY THE FOLLOWING COMPANIES ARE CONTROLLED BY PER GRIEG JR.AND FAMILY
Grieg Aqua AS
Ystholmen Felles AS
Kvasshøgdi AS
Per Grieg Jr. privately
Total shares
56 914 355
2 928 197
496 772
15 000
60 354 324
50.17%
2.58%
0.44%
0.01%
53.20%
56 018 799
2 928 197
—
15 000
58 961 996
—%
—%
—%
—%
0.11%
—%
—%
0.04%
0.02%
0.02%
0.02%
0.02%
0.01%
—%
—%
50.17%
2.62%
—%
0.01%
52.80%
On 30 December 2020, the board of Ystholmen Felles AS submitted a proposal to the company's general meeting to
demerge the company, where 500 000 shares in Grieg Seafood ASA will be transferred from Ystholmen Felles AS to Kvasshøgdi AS, org.
no. 921 020 961. The demerger was effective from 4 March 2021. Subsequent to the demerger, Per Grieg Jr. is the sole shareholder in
Kvasshøgdi AS, and Per Grieg Jr. and the other shareholder's, through their ownership of Ystholmen Felles AS, own 2 428 197 shares in
Grieg Seafood ASA. In addition, Per Grieg Jr. own, through his ownership of Kvasshøgdi AS, 996 772 shares in Grieg Seafood ASA.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 1 9
E AR NING S P E R S H A R E AND DI V IDEND P ER SH AR E
CALCULATION OF EARNINGS PER SHARE
Profit / loss after tax continued operations (majority share)
Profit / loss discontinued operations (majority share)
Profit / loss after tax (majority share)
Number of shares at 01.01
Effect of treasury shares (Note 18)
Increase of share capital through contribution in kind (acquisition of Grieg Newfoundland)
Sale of treasury shares to employees
Number of outstanding shares at 31.12.
Effect of the contribution in kind
Effect of share options to employees
Weighted average number of outstanding shares at 31.12.
Diluted number of outstanding shares at 31.12.
Earnings per share (NOK)
Continued operations
Discontinued operations
Earnings per share - Total
Diluted earnings per share (NOK)
Continued operations
Discontinued operations
Earnings per share - Total
Proposed dividend per share (NOK)
2020
-315 997
-225 057
-541 054
111 662 000
-1 213 687
1 785 042
42 193
2019
599 179
20 331
619 510
111 662 000
-1 228 424
—
14 737
112 275 548
110 448 313
537 958
37 569
111 700 021
111 700 021
—
14 855
110 433 458
110 433 458
-2.8
-2.0
-4.8
-2.8
-2.0
-4.8
0.00
5.4
0.2
5.6
5.4
0.2
5.6
0.00
NO T E 2 0
C A SH A ND C A SH E QUI VALEN T S
CASH AND CASH EQUIVALENTS NOK 1 000
Restricted deposits relating to employee tax deductions
Other cash and bank deposits
Total
2020
27 219
248 208
275 427
2019
14 515
199 981
214 497
The Group's currency and interest rate exposure is described in Note 3.
See Note 3 and Note 12 for information on the Group’s available credit facilities.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
NO T E 2 1
T R A DE R ECE I VA B LE S
TRADE RECEIVABLES NOK 1 000
Gross amount of trade receivables*
Trade receivables deducted**
Loss allowance
Loss allowance assets classified as held for sale***
Trade receivables at 31.12.
2020
192 921
—
-13 538
—
179 384
2019
1 233 786
-764 034
-3 623
-6 233
459 897
*The change in trade receivables from 2019 to 2020 is primarily due to the fact that Grieg Seafood ASA within year-end 2020 sold all its shares in Sjór AS to Bremnes Fryseri and has
deconsolidated the entity. Up until year-end 2020, Sjór performed the Group’s marketing, sales and distribution activity for the Group and Bremnes Fryseri, as Sjór was jointly owned.
Thus, the receivables in 2019 both for fish produced by Grieg Seafood and fish produced by Bremnes Fryseri. In 2020, the trade receivables reflect only receivables for sale of fish
produced by Grieg Seafood. Furthermore, Sjór AS had a factoring agreement (see **) which also is deconsolidated at year-end 2020. See more information in Note 5.
**Trade receivables bought by the factoring company. At year-end 2020, the none of the NOK 193 million in gross trade receivables are financed through a factoring agreement.
***See Note 5 for more information.
RECOGNIZED LOSSES NOK 1 000
Change in loss allowance
Confirmed losses in the year
Confirmed losses and change in loss allowance from operations classified as held for sale
Amounts received for previously written off trade receivables
Total recognized losses on receivables
2020
9 915
508
4 063
—
14 486
2019
-2 076
2 725
—
-1 698
-1 049
Losses on receivables are classified as other operating expenses in the income statements.
In the Group's ECL (Expected credit loss) calculation model, customers are categorized as high or low risk, depending on their country
of origin and as credit insured or unsecured. The group of unsecured receivables also consist of some receivables that have other type of
securities and hence, the risk of loss is considered as low and no loss allowance is calculated for these receivables. The risk evaluation
is based on own experience and input from Credit Insurance Companies. Loss allowance is further calculated on a %-basis of the aging
distribution (days past due). The Group also makes manual accruals if significant information implies that there is a higher risk of losses.
Some credit risk (10%) also remains for the factored trade receivables, thus the aging analysis given below is based on the total receivables
rather than total receivables less the factored receivables. For more information about credit risk, refer to Note 3.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NOK 1 000
GROSS
AMOUNT
EXPOSED
AMOUNT
NOT YET
DUE
OVERDUE
0-30 days
OVERDUE
31-60
days
OVERDUE
61-90
days
OVERDUE
> 90 days
OVERDUE
> 1 year
Total
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2020
TR Credit
insured
TR Unsecured
TR Credit
insured
TR Unsecured
Regular/normal
risk countries
High risk
countries
Total
LOSS ALLOWANCE 31.12.2020
TR Credit
insured
TR Unsecured
TR Credit
insured
TR Unsecured
Regular/normal
risk countries
High risk
countries
Total
68 657
124 264
18 310
285
29 623
57 352
23 558
21 789
1 145
44 130
—
—
—
—
—
—
—
—
—
—
337
21
—
—
12 222
972
1 770
—
68 657
124 264
—
—
—
—
—
—
192 921
18 595
86 975
45 347
45 275
358
13 195
1 770
192 921
—
—
—
—
—
18 310
285
—
—
18 595
—
—
—
—
—
7
—
—
—
7
6
—
—
—
6
29
—
—
—
29
1 903
285
—
—
11 309
—
—
—
13 253
285
—
—
2 188
11 309
13 538
Of the NOK 193 million in gross trade receivables at 31 December 2020, NOK 79 million are trade receivables with Sjór AS, carried over from internal to external trade receivables at the
time of sale of shares in Sjór AS and deconsolidation of the entity from the Grieg Seafood Group (see Note 5). These trade receivables are not credit insured, and explain the main part of
the relative increase in unsecured vs. credit insured trade receivables in 2020 compared to 2019.
NOK 1 000
GROSS
AMOUNT
EXPOSED
AMOUNT
NOT YET
DUE
OVERDUE
0-30 days
OVERDUE
31-60
days
OVERDUE
61-90
days
OVERDUE
> 90 days
OVERDUE
> 1 year
Total
AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2019
TR Credit
insured
TR Unsecured
TR Credit
insured
TR Unsecured
Regular/normal
risk countries
High risk
countries
Total
LOSS ALLOWANCE 31.12.2019
TR Credit
insured
TR Unsecured
TR Credit
insured
TR Unsecured
Regular/normal
risk countries
High risk
countries
Total
921 822
211 395
89 656
149 887
613 675
177 279
285 868
19 780
68 741
31 827
7 250
31 598
46 130
19 186
19 973
9 921
12 606
2 906
1 037
919
2 835
2 603
1 085
1 016
5 412
8 513
519
783
1 426
314
921 822
211 395
—
—
68 741
31 827
1 233 786
278 391
856 270
335 542
17 468
7 539
15 226
1 740
1 233 786
—
—
—
—
—
89 656
149 887
7 250
31 598
278 391
90
580
20
87
777
230
152
45
135
562
85
31
5
50
30
877
57
460
368
3 274
23
435
2 213
610
—
—
170
1 424
4 100
2 823
3 016
5 523
150
1 166
9 856
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NO T E 2 2
O T HE R CUR R E N T R ECEI VA BLE S
OTHER CURRENT RECEIVABLES NOK 1 000
Vat receivable
Prepaid expenses
Current loans extended to non-controlling interests
Realised gain on price contracts, receivable on counterpart*
Other current receivables
Total
*See Note 3.
2020
38 851
37 259
—
27 411
16 347
133 069
2019
120 847
77 421
60 000
—
76 357
334 625
In 2020, we classified our Shetland assets as held for sale. In addition, we have sold all our shares in Ocean Quality AS. The 2019 comparative figures are not re-presented as for the
effect of IFRS 5. The 2019 balance sheet amount related to assets classified as held for sale / assets sold on 2020 is NOK 213 million (out of NOK 335 million) and primarily relates to the
current loan-item of NOK 60 million and VAT receivables.
NO T E 2 3
R EL AT ED PAR T IE S
TOTAL
2020 NOK 1 000
Total related parties as shareholders
Total related parties as associates
Total
CONTINUED OPERATIONS
2020 NOK 1 000
Total related parties as shareholders
Total related parties as associates
Total
OPERATING
INCOME
OPERATING
EXPENSES
NON-CURRENT
BALANCES
CURRENT
BALANCES
—
11 556
11 556
44 553
145 877
190 430
-7
1 910
1 903
-11 028
—
-11 028
OPERATING
INCOME
OPERATING
EXPENSES
—
11 556
11 556
44 553
132 216
176 769
*Of which is included in the profit and loss from continued operations. The change in operating expenses from 2019 is primarily due to the indirect effect of changes in composition of
the board of directors during 2020.
TOTAL
2019 NOK 1 000
Total related parties as shareholders
Total related parties as associates
Total
CONTINUED OPERATIONS*
2019 NOK 1 000
Total related parties as shareholders
Total related parties as associates
Total
*Of which is included in the profit and loss from continued operations.
OPERATING
INCOME
OPERATING
EXPENSES
NON-CURRENT
BALANCES
CURRENT
BALANCES
40 340
—
40 340
277 257
72 535
349 792
—
1 910
1 910
-35 584
60 000
24 416
OPERATING
INCOME
OPERATING
EXPENSES
40 340
—
40 340
51 028
72 535
123 563
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS ACQUISITION OF GRIEG NEWFOUNDLAND AS
The acquisition of Grieg Newfoundland AS (99%) was completed on 15 April 2020. Grieg Newfoundland AS was 39% owned by Grieg Kapital
AS/Grieg Aqua AS (the owner of the majority of the shares in Grieg Seafood ASA), and 39% by Kvasshøgdi AS (owned by Per Grieg Jr,
Chairman of the Board of Grieg Seafood ASA). The remaining of the shares were owned by the local partner Ocean Choice International Ltd
(19.5%) and Knut Skeidsvoll (2.5%).
The up-front payment was based on an enterprise value of Grieg Newfoundland AS of NOK 539.1 million. NOK 250 million of the up-front
payment was settled through issuance of new shares in the Company to the sellers of Grieg Newfoundland AS.
On 20 April 2020, the directed private placement was completed by issuing 1 785 042 new shares to Grieg Aqua AS and Kvasshøgdi AS, in
addition to the other owners as part of consideration for the shares in Grieg Newfoundland AS. The subscription price for each new share
was set at NOK 140.05, corresponding to a total contribution in kind of NOK 250 million. For more information, see Note 6.
OTHER RELATED PARTIES’ TRANSACTIONS
The Group carries out transactions with companies controlled by Grieg Maturitas II AS, who is the parent company of Grieg Aqua AS,
majority owner of Grieg Seafood ASA.
THE SERVICES PROVIDED INCLUDE:
• ICT-related services and other functions such as catering, reception etc. are provided by Grieg Group Resources AS on an arm’s length
basis.
• Grieg Seafood ASA rents its offices from Grieg Gaarden AS on an arm’s length basis. The office rental
agreement runs for a period of ten years.
• The regions purchased cleansing fish from Rensefiskgruppen AS incl. subsidiaries, a company owned by Grieg Kapital AS.
* Purchase of fuel from Eidsvaag AS, a company related to a board member of Grieg Seafood.
The parent company provides a range of services to the subsidiaries. The services include administrative services and services relating to
the provision of parent company non-current loans and current credit facilities to the subsidiaries. Interest is charged on an arm's length
basis.. In addition, Grieg Seafood ASA engage in hedge contracts on behalf of subsidiaries. The arrangement is intended to reduce these
companies' exposure to salmon prices. The agreement with the subsidiaries are priced on the basis of a "back-to-back"-arrangement.
Grieg Seafood ASA sold all its shares in Sjór AS (previously known as Ocean Quality AS) at 31 December 2020. Transactions with Ocean
Quality AS for the year 2020 was all related parties transactions, however the company is not part of the Grieg Seafood Group at year-end
2020 (see Note 5). Ocean Quality AS was classified as a subsidiary of Grieg Seafood ASA since 2015. As part of the sale of shares in Ocean
Quality AS, Grieg Seafood ASA has assumed the liabilities of the rental agreement Ocean Quality AS had with Grieg Garden AS for office
space in Bergen. Ocean Quality AS purchases fish from its shareholder Bremnes Fryseri AS, for resale to domestic and international
customers. The fish from Bremnes Fryseri AS is supplied by its subsidiary Bremnes Seashore AS. Ocean Quality AS rents office premises
and office equipment from Bremnes Fryseri AS. The sale activity of Ocean Quality related to sale of fish produced by Bremnes has been
treated as discontinued operations in the Grieg Seafood consolidated financial statements for 2020.
The Group also purchases services relating to operations from other related parties and associates. The board and management are related
parties.
See Note 17 on share-based options and Note 18 on shares controlled by board members and management.
All transactions, including both sale and purchase of goods and services, are made on an arm’s length basis
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NO T E 2 4
FIN A NC I A L INC OME AND FIN ANCI AL E XP ENSE S
FINANCIAL ITEMS NOK 1 000
2020
2019
FINANCIAL INCOME
Other interest income
Dividend
Net currency gains
Other financial income
Total
FINANCIAL EXPENSE
Interest expense on external borrowings and leases*
Amortized establishment cost
Other interest expenses
Net change in fair value of derivatives
Net currency losses
Other financial expenses
Total
—
20
—
83
103
92 132
21 498
7 456
24 518
98 714
3 577
247 895
6 318
—
34 377
—
40 695
53 743
2 750
6 781
2 690
—
411
66 374
Net financial items has changed with NOK -222 million compared with 2019, mainly due to currency losses on loans and receivables, increased debt service costs incl. bond issue, and
increased amortized establishment cost for financial liabilities.
*Interest expenses on bank borrowings and leases includes recognized gains/losses from realized interest rate swaps of NOK 2 million in 2020 (2019: NOK 0.1 million).
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 2 5
O T HE R OP E R AT I NG E XP ENSE S
OTHER OPERATING EXPENSES NOK 1 000
Transportation costs
Maintenance costs
Electricity and fuel
Lease expenses 1)
Outsourced services and audit fees
Insurance
IT expenses
Marketing costs
Other operating expenses 2)
Other production-related costs 1, 3)
Total other operating expenses
2020
355 994
256 442
92 157
14 938
101 686
47 920
53 079
5 517
101 148
563 971
1 592 852
2019
356 617
237 141
104 214
67 212
97 950
45 168
45 970
7 913
83 003
362 075
1 407 263
1) Reduction in lease expenses (not classified as other production-related costs, incl. well-boats). See the profit (loss specification of Note 13.
2) Includes equipment, telephony/postage, office supplies, fees, travel costs etc.
3) Production-related costs comprise harvesting costs including expenses for well-boat services, packaging material, diving services, vaccination, de-lousing, oxygen, and analyses etc.
BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000
AUDITOR'S FEES
Group auditor
Other auditors
OTHER CERTIFICATION SERVICES
Group auditor
Other auditors
TAX ADVICE
Group auditor
Other auditors
OTHER SERVICES
Group auditor
Other auditors
Total Group auditor
Total other auditors
Total auditor's fees
AUDIT FEES INCLUDED IN PROFIT (LOSS) FROM CONTINUED OPERATIONS NOK 1 000
Total Group auditor
Total other auditors
Total auditor's fees
2020
2 797
1 183
362
—
669
473
489
342
4 317
1 998
6 315
2020
3 971
1 374
5 345
2019
3 414
628
574
—
578
460
179
157
4 745
1 245
5 990
2019
4 606
—
4 606
The audit fee specification for 2020 include fees from Advokatfirmaet PricewaterhouseCoopers AS (tax-related assistance) of NOK 338
thousands.
Total audit fees in 2020 was NOK 6 926 thousands, of which NOK 969 thousands where related to discontinued operations. Thus, audit fees
included in other operating expenses for the group's continued operations for 2020 was NOK 5 957 thousands, while NOK 969 thousands are
included on net profit from discontinued operations. The 2019-audit fee specification is re-presented to be comparable.
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NO T E 2 6
O T HE R CUR R E N T LI A BILI T IE S
OTHER CURRENT LIABILITIES NOK 1 000
Accrued expenses *
Realised gain on price contracts, liability on counterpart **
Other current liabilities ***
Other current liabilities
2020
83 559
—
11 057
94 616
2019
158 993
10 902
9 612
179 507
* Accrued expenses relate to other operating expenses, including accrued purchases, transportation costs, bonuses/discounts for buyers, accrued salaries, and insurance.
**)See Note 3.
*** At year-end 2019, the Group had physical delivery contracts recognized as liability, totalling NOK 2 million. At year-end 2020 the Group was not exposed to physical delivery
contracts.
In 2020, we classified our Shetland assets as held for sale. In addition, we have sold all our shares in Ocean Quality AS. The 2019 comparative figures are not re-presented as for the
effect of IFRS 5. The 2019 balance sheet amount related to assets classified as held for sale / assets sold on 2020 is NOK 80 million (out of NOK 180 million) and primarily relates to
accrued expenses.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 2 7 N E W A C C OUN T I NG S TAND AR DS
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURE OF NEW STANDARDS
A) NEW AND AMENDED STANDARDS, AND INTERPRETATIONS - ADOPTED IN 2020
AMENDED STANDARDS AND INTERPRETATIONS
Amendments to IFRS 3 - Definition of a Business
The amendments help determine whether an acquisition made is of a business or a group of assets.
The amended definition emphasises that the output of a business is to provide goods and services to customers, whereas the previous
definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others. It also clarifies that
to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create output. This assessment must be based on what has been acquired in its current
state and condition. The amendments also introduce an optional fair value concentration test to permit a simplified assessment of whether
an acquired set of activities and assets is not a business. The amendments are applied to transactions for which the acquisition date is on
or after the beginning of the first annual reporting period beginning on or after 1 January 2020.
In April 2020, Grieg Seafood ASA acquired 99 % of Grieg Newfoundland AS in 2020, parent of the Grieg Newfoundland subgroup, which is
currently developing and establishing Atlantic salmon farming operations at Newfoundland, Canada. The amendments to IFRS 3 has had no
effect on the Group in 2020 of whether we have acquired business, or a group of assets in Newfoundland. See Note 6.
Amendments to IAS 1 and IAS 8 - Definition of Material
The International Accounting Standards Board (IASB) has issued amendments to its definition of material to make it easier to make materiality
judgements. The definition of material helps decide whether information should be included in the financial statements. The amendments
set out a new definition of material: “Information is material if omitting, misstating or obscuring it could reasonably be expected to influence
decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide
financial information about a specific reporting entity“. Also, the amendments clarify that materiality depends on the nature or magnitude
of information, or both. Finally, the amendments ensure that the definition of material is consistent across all IFRS Standards. The changes
are effective for annual periods beginning on or after 1 January 2020.
Amendments to IFRS 9, IAS 39 and IFRS 7 - the IBOR reform
The amendments provide temporary reliefs to certain requirements related to hedge accounting in the period of uncertainty before the
replacement of an existing interest rate benchmark with an alternative nearly risk-free interest rate. The effective date of the amendments
is for annual periods beginning on or after 1 January 2020. The requirements are applied retrospectively. Grieg Seafood has had hedge
accounting in 2020, however not related to IBOR-rates. Thus, the amendment has had no effect in 2020.
Amendment to IFRS 16 - Covid-19-Related Rent Concessions
In May 2020, the International Accounting Standards Board amended IFRS 16 Leases to provide relief to lessees from applying the IFRS 16
guidance on lease modifications to rent concessions arising as a direct consequence of the covid-19 pandemic. The amendment does not
affect lessors. The amendment exempts lessees from having to consider individual lease contracts to determine whether rent concessions
occurring as a direct consequence of the covid-19 pandemic are lease modifications and allows lessees to account for such rent concessions
as if they were not lease modifications. It applies to covid-19-related rent concessions that reduce lease payments due on or before 30 June
2021. Lessees must apply the practical amendment retrospectively, recognizing the cumulative effect of initially applying the amendment
as an adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the annual
reporting period in which the amendment is first applied. The amendment is effective for annual periods beginning on or after 1 June 2020,
but earlier application is permitted. The amendment has had no effect on the Group in 2020.
B) NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS - NOT YET ADOPTED
Standards, amendments and interpretations that are issued up to the date of issuance of the consolidated financial statement, but not yet
effective, are disclosed below. The Group’s intention is to adopt the relevant new and amended standards and interpretations when they
become effective, subject to EU approval before the consolidated financial statement are issued.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS
Amendments to IAS 1 on classification of liabilities as current or non-current
IASB has issued amendments to IAS 1 to clarify the requirements for classifying liabilities as current or non-current. The amendments aim
to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt
and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or
non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity.
The amendment clarifies
• The interpretation of the right to defer settlement of a liability
• That a right to defer must exist at the end of the reporting period
• That classification is unaffected by the likelihood that an entity will exercise its deferral right
• That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its
classification.
The amendments must be applied retrospectively and are effective for annual periods beginning on or after 1 January 2023. The Group does
not intend to early adopt the amendments.
ANNUAL IMPROVEMENTS 2018-2020 CYCLE
IFRS 9 Financial Instruments - Fees in the ’10 per cent’ test for derecognition of financial liabilities
The amendment clarifies that a borrower only includes fees paid or received between the borrower and the lender, including fees paid
or received by either the borrower or lender on the other’s behalf. The amendment is applied to financial liabilities that are modified or
exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendment is
required for annual reporting periods beginning on or after 1 January 2022, and earlier application is permitted.
IAS 41 Agriculture - Taxation in fair value measurements
The amendment removes the requirements in IAS 41.22 Agriculture for entities to exclude cash flows for taxation when measuring the fair
value of assets applying IAS 41. An entity applies the amendment to fair value measurements on or after the beginning of the first annual
reporting beginning on or after 1 January 2022. Earlier application is permitted. The new guidance is not expected to have an effect for the
fair value estimates of the Grieg Seafood Group.
OTHER STANDARDS, AMENDMENTS AND INTERPRETATIONS
No other new standards, amendments and interpretations, not yet adopted at 31 December 2020, is expected to have material impact on the
consolidated financial statement of the Group.
OUR FINANCIAL RESULTSGRIEG SEAFOOD GROUP ACCOUNTS NO T E 28
C ON T INGE N T LI A B ILI T IE S
In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the Norwegian
salmon industry. Grieg Seafood is one of the companies under investigation. Based on the EU investigation, US competition authorities
launched their own investigation into the matter in November 2019, and American class-action lawsuits were filed in the USA by minor
customers. Two lawsuits by two persons have also been filed in Canada.
Grieg Seafood is not aware of any anti-competitive behavior within the Group, not in Norway, the EU, the USA, or in Canada. We are fully
collaborating with European and American authorities in this matter and will follow up the lawsuits in the USA and Canada accordingly.
As of year-end 2020, there is no new information regarding these investigations.
Approximately NOK 25.5 million (NOK 20 million) was spent on lawyer fees related to the EU commission investigation during the year.
There is no new information regarding the EU investigation, and Grieg Seafood considers it to be probable that the investigation will be in
its favor, which also is supported by legal advice. Furthermore, the amount of the contingent liability related to a negative outcome of this
matter cannot be reasonable estimated, due to the lack of information. Consequently, no provision has been recognized in relation to both
the EU and the US investigation, nor to any of the civil lawsuits.
NO T E 29
P O S T-B A L A NCE S HE E T E V EN T S
On 18 January 2021, the Norwegian Directorate of Fisheries granted Grieg Seafood Rogaland three development licenses to build “Blue
Farm”. In 2016, Grieg Seafood applied for ten development licenses to build the innovative farm and place it in exposed seas in Rogaland.
The concept is based on the technology from the Norwegian oil and gas industry, and the aim is to later move the farm to areas offshore.
Grieg Seafood has appealed the decision to the Ministry of Industry and Fisheries as we believe there are grounds for additional licences.
On 20 January 2021, Grieg Seafood announced the investment in the joint venture Årdal Aqua AS, owned in equal parts by Grieg Seafood
Rogaland AS, Vest Havbruk AS and Omfar AS. The project is currently in the design development phase, with the aim to start construction
during the autumn of 2021. The facility has a production capacity of 5 000 tonnes annually according to current plans and aims to increase
the production capacity further. Årdal Aqua will deliver at least 3 000 tonnes of post-smolt annually to Grieg Seafood’s sea farms in Rogaland.
In addition, the company aims to gradually produce fish to harvest size on land. The move makes Grieg Seafood the first global salmon
producer to invest in land-based salmon farming.
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GRIEG SEAFOOD
ASA ACCOUNTS
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS A S A A C C OUN T S
302
304
306
307
Income statement
Statement of financial position
Statement of changes in equity
Cash flow statement
NO T E S
308
310
310
313
316
317
317
318
319
320
321
322
323
326
328
328
330
332
NOT E 1
NOT E 2
NOT E 3
NOT E 4
NOT E 5
NOT E 6
NOT E 7
NOT E 8
NOT E 9
Accounting policies
Operating income
Salaries, personnel and other operating expenses
Share based payments
Financial income and financial expenses
Other current receivables/other current liabilities
Bank deposits
Short-term investments and financial instruments
Investments in subsidiaries
NOT E 10
Investments in shares
NOT E 11
Intangible assets
NOT E 12
NOT E 13
NOT E 14
NOT E 15
NOT E 16
NOT E 17
NOT E 18
Property, plant and equipment
Share capital and shareholder information
Taxes
Guarantees
Related parties
Net interest-bearing liabilities and pledges
Post-balance sheet events
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INC OM E S TAT E ME N T
GRIEG SEAFOOD ASA NOK 1 000
Other operating income
Total operating income
Salaries and personnel expenses
Depreciation and amortization
Other operating expenses
Total operating expenses
Operating loss
Financial income
Financial expenses
Net financial items
Profit before tax
Income tax expense
Net profit for the year
APPROPRIATION OF PROFIT FOR THE YEAR
Proposed dividend
Additional dividend paid-out, not accrued previous year
Transferred to other equity
Total appropriations
NOTE
2/16
3/4
11/12
3/16
5/16
5/16
14
2020
75 456
75 456
-48 276
-6 220
-93 985
-148 481
-73 024
252 069
-183 255
68 814
2019
79 264
79 264
-61 186
-5 840
-99 620
-166 646
-87 382
982 858
-42 171
940 687
-4 210
853 305
15 826
11 615
—
—
11 615
11 615
-186 345
666 960
—
220 897
446 064
666 960
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS P
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S TAT E MEN T OF FIN ANCI AL P O SI T ION
GRIEG SEAFOOD ASA NOK 1 000
NOTE
31.12.2020
31.12.2019
ASSETS
Software
Property, plant and equipment
Investments in subsidiaries
Loan to Group companies
Other non-current receivables
Investment in shares
Total non-current assets
Trade receivables from Group companies
Other receivables from Group companies
Other current receivables
Short-term investments and financial instruments
Bank deposits
Total current assets
Total assets
11
12/17
9/17
16/17
10
16/17
16/17
6/16
8
7
14 504
2 131
2 362 159
1 216 143
—
169
15 238
3 379
1 385 840
648 991
167
194
3 595 106
2 053 808
4 307
2 361 526
57 311
7 328
183 710
21 217
1 806 443
12 084
6 360
6 395
2 614 181
1 852 499
6 209 287
3 906 306
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS GRIEG SEAFOOD ASA NOK 1 000
NOTE
31.12.2020
31.12.2019
EQUITY AND LIABILITIES
Share capital
Treasury shares
Other paid-in equity
Contingent consideration (acquisition of Grieg Newfoundland AS)
Other retained earnings
Total equity
Deferred tax
Share based payments
Total provisions
Green bond loan
Non-current loan
Total non-current liabilities
Current portion of non-current loan
Share based payments
Trade payables
Trade payables to Group companies
Current liabilities to Group companies
Tax payable
Public duties payable
Financial instruments
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
BERGEN, 25 March 2021
GRIEG SEAFOOD ASA
13
13
9
14
4
17
17
17
4
16
16
16/17
14
8
6/8/16
453 788
-4 686
226 067
701 535
446 648
-4 855
39 627
—
1 293 215
1 279 034
2 669 919
1 760 455
11 862
491
12 353
23 083
8 379
31 461
1 468 462
1 855 404
—
1 563 935
3 323 866
1 563 935
102 352
2 411
6 414
45 750
2 993
279
3 910
15 616
23 423
98 212
11 270
11 415
1 625
216 868
180 394
2 808
—
27 865
203 148
550 455
3 539 368
2 145 851
6 209 287
3 906 306
PER GRIEG JR.
Chair
TORE HOLAND
Vice Chair
SIRINE FODSTAD
Board Member
MARIANNE RIBE
Board Member
KATRINE TROVIK
ANDREAS KVAME
Board Member
CEO
P
A
G
E
3
0
4
—
3
0
5
GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
S TAT E MEN T OF CH ANGE S I N EQUI T Y
GRIEG SEAFOOD ASA NOK 1 000
Equity at 01.01.2019
PROFIT FOR THE YEAR 2019
Reclassification of equity
Sale of treasury shares to employees
Dividend paid-out 2019, not accrued 2018
Equity at 31.12.2019
PROFIT FOR THE YEAR 2020
Sale of treasury shares to employees
Contribution in kind
Contingent consideration*
Other gains and losses recognized in equity
TREASURY
SHARES
OTHER PAID-
IN EQUITY
CONTINGENT
CONS.*
OTHER
EQUITY TOTAL EQUITY
SHARE
CAPITAL
446 648
—
—
—
—
-4 914
—
—
59
—
13 877
—
25 597
153
—
446 648
-4 855
39 627
—
—
7 140
—
—
—
169
—
—
—
—
439
186 001
—
—
—
—
—
—
—
—
—
—
—
701 535
—
856 775
666 960
-25 597
1 793
1 312 386
666 960
—
2 005
-220 897
1 279 034
-220 897
1 760 455
11 615
2 647
—
—
-83
11 615
3 255
193 142
701 535
-83
Equity at 31.12.2020
453 788
-4 686
226 067
701 535
1 293 215
2 669 919
*Contingent consideration related to the acquisition of Grieg Newfoundland AS, see Note 9.
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS C A SH FL O W S TAT E MEN T
GRIEG SEAFOOD ASA NOK 1 000
Profit before tax
Recognized, not paid Group contributions
Taxes paid
Gain/loss sale of subsidiary
Depreciation and amortization
Change in trade receivables
Change in trade payables
Change in other accruals
Items classified as investing or financing activities
Currency translation differences
Net cash flow from operating activities
Dividend income
Dividend income from Group companies - no cash effect
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of shares (Grieg Newfoundland AS)
Proceeds sale of subsidiary
Payments/proceeds, loans to/from Group companies
Paid-in capital establishment of new subsidiary
Group contribution from subsidiaries
Payments/proceeds on loans to/from associates
Net cash flow from investing activities
Change in overdraft facility (net draw-down/repayment)
Revolving credit facility (net draw-down/repayment)
Proceeds of long-term interest bearing debt
Repayment of long-term interest-bearing debt
Change in loans to/from Group companies
Interest paid
Dividends paid
Net cash flow from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at 01.01.
Cash and cash equivalents at 31.12.
NOTE
14
9
11/12
5
12
11
9
9
9
17
17
7
2020
-4 210
-99 710
-180 954
-59 978
6 220
16 910
39 124
-81 038
57 759
28 534
2019
853 305
-862 390
-115 816
—
5 840
-20 752
-8 742
9 186
19 157
-36 919
-277 343
-157 131
17 362
-17 342
-294
-3 944
-620 464
16 337
-1 485 134
-1 000
862 390
—
-1 232 090
—
364 135
1 500 000
-102 267
—
-75 120
—
1 686 748
177 315
6 395
183 710
14 737
—
-534
-695
—
—
-297 964
—
610 982
22 940
349 465
-46 597
368 930
—
-99 345
60 939
-33 893
-441 764
-191 730
604
5 790
6 395
P
A
G
E
3
0
6
—
3
0
7
GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
NO T E 1
A C C OUN T ING P OLICIE S
The annual financial statements have been prepared in accordance
life, providing the asset has an expected useful life of more than 3
with the Norwegian Accounting Act and generally accepted
years and a cost price of more than NOK 15 thousand. Maintenance
accounting principles in Norway.
costs are recognized in income as operating expenses as they arise,
while improvements and additions are added to the acquisition
All amounts are stated in NOK thousand, unless otherwise
cost of the asset and depreciated at the same rate as the asset.
indicated.
The distinction between maintenance and improvements is made
based on the asset’s relative condition at the original purchase
USE OF ESTIMATES
The management has used estimates and assumptions that have
date.
affected assets, liabilities, incomes, expenses and information
on potential liabilities in accordance with generally accepted
SUBSIDIARIES
Subsidiaries are valued at cost in the single-entity financial
accounting principles in Norway.
statements. Investments are recognized as the cost of the shares
adjusted for any minor impairments where necessary. Group
contributions paid to subsidiaries, net of tax, are recognized
REVENUE RECOGNITION
Revenue from the sale of goods is recognized at the time of
as an increase in the cost of the shares. Dividends and Group
contributions are recognized in the same year as they are
delivery. Revenue from the sale of services is recognized when the
proposed in the subsidiary’s financial statements. If dividends/
services are delivered. The share of sales revenue associated with
Group contributions materially exceed retained earnings after
future service is recognized in the balance sheet as accrued sales
acquisition, the excess amount is regarded as a reimbursement
revenues and is transferred to income at the time of execution.
CLASSIFICATION AND VALUATION OF BALANCE
SHEET ITEMS
Assets intended for long-term ownership or use are classified as
of invested capital and is deducted from the recorded cost in the
balance sheet. Dividends and group contributions received are
recognized as other financial income.
Contingent consideration is included in cost at the acquisition date
of a subsidiary. The likelihood of payment and time value of money
non-current assets. Assets related to the normal operating cycle
are considered when estimating the fair value of the contingent
are classified as current assets. Receivables are classified as
consideration at the acquisition date.
current assets if they are expected to be repaid within 12 months
of the transaction date. Similar criteria are applied to liabilities.
Current assets are valued at the lower of cost and fair value.
IMPAIRMENT OF NON-CURRENT ASSETS
Impairment tests are performed upon indication that the carrying
Current liabilities are recognized in the balance sheet at nominal
amount of a non-current asset exceeds its estimated fair value.
value. Non-current assets are valued at historical cost. Property,
The test is performed at the lowest level of non-current assets
plant and equipment whose value will deteriorate is depreciated
at which independent cash flows can be identified. If the carrying
on a straight-line basis over the asset’s estimated useful life.
amount is higher than both the fair value less costs to sell and the
Non-current assets are written down to fair value where this is
recoverable amount (net present value of future use/ownership),
required by accounting rules. Nominal amounts are discounted if
the asset is written down to the higher of fair value less costs to
the interest rate element is material.
INTANGIBLE ASSETS
Expenditure on intangible assets is recognized in the balance sheet
sell and the recoverable amount. Previous impairment charges
are reversed in a later period if the prerequisites for impairment
are no longer present (except for impairment of goodwill).
to the extent that a future economic benefit can be identified as
deriving from the development of an identifiable intangible asset
TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognized in the balance sheet
and cost can be measured reliably. Otherwise, the cost is expensed
at nominal value after a provision for bad debts. The provision for
as it arises. Capitalized development costs are amortized over
their useful life.
bad debts is estimated based on an individual assessment of each
material receivable.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is recognized in the balance sheet
and depreciated on a straight-line basis over its estimated useful
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS CURRENT INVESTMENTS
investments
Current
(shares and
investments which are
considered current assets) are carried at the lower of average
DERIVATIVES
FORWARD CURRENCY CONTRACTS
Realized gains (loss) on forward currency contracts are recognized
acquisition cost and fair value at the balance sheet date. Dividends
in the income statement as a financial income (financial cost).
and other distributions received are recognized as other financial
The fair value of a forward currency contract is measured in its
income.
PENSIONS
The company’s pension schemes are according
to
the
requirements of the Mandatory Occupational Pensions Act. The
contracted currency and translated to NOK using the foreign
exchange currency rate at the balance sheet date.
INTEREST RATE SWAPS
Interest rate swap contracts are measured according to the lowest
company operates a defined contribution pensions scheme for
of its acquisition cost and fair value at the balance sheet date.
its employees. The premium is paid through operations and is
expensed on an ongoing basis. Social security costs are charged
based on the pension premium paid.
GROUP ACCOUNT SCHEME – DEPOSITS AND
LOANS
Grieg Seafood ASA operates as an internal bank for its subsidiaries.
TAXES
The tax expense in the income statement consists of both tax
payable for the accounting period and changes in deferred tax.
Deferred tax is calculated at the relevant rate on temporary
differences between the value of assets and liabilities for tax
purposes and any allowable loss to be carried forward at the
Grieg Seafood ASA borrows funds from financial institutions and
year-end in the financial statements. Temporary differences, both
then lends these funds to its subsidiaries. The company has set
positive and negative, are offset within the same period. Deferred
up a group account (cash pool) scheme (multi-account scheme) in
tax assets are recognized in the balance sheet when it is more
which Grieg Seafood ASA is the legal account holder. Deposits and
likely than not that the tax assets will be utilized. Deferred tax
loans are recognized as intercompany transactions. All subsidiaries
assets and deferred tax liabilities are presented net in the balance
are jointly and severally liable to the financial institutions for the
sheet. Tax on paid Group contributions recognized as an increase
entire amount of the commitment under the scheme.
in the purchase price of shares in other companies. Taxes payable
FOREIGN CURRENCY
The company’s functional and presentational currency is NOK.
that they relate to equity transactions (offset against tax payable
if the Group contribution affects tax payable and offset against
Monetary items in a foreign currency are translated into NOK
deferred taxes if the Group contribution affects deferred taxes).
and deferred taxes are recognized directly in equity to the extent
using the exchange rate applicable on the balance sheet date.
Non-monetary items that are measured at their historical price
expressed in a foreign currency are translated into NOK using the
CASH FLOW STATEMENT
The cash flow statement has been prepared according to the
exchange rate applicable on the transaction date. Non-monetary
indirect method. Cash and cash equivalents include cash, bank
items that are measured at their fair value expressed in a foreign
deposits and other short-term highly liquid investments which
currency are translated at the exchange rate applicable on the
entail no appreciable exchange rate risk, and which mature within
balance sheet date. Changes to exchange rates are recognized in
three months of the purchase date.
the income statement as they occur during the accounting period.
CASH-BASED REMUNERATION
The company operates a share-based remuneration scheme with
settlement in cash. Each employee is obliged to purchase shares
relative to their annual salary. The company’s estimated liability
is recognized as a current or non-current liability based on the
estimated settlement date. The cost for the year is recognized in
the income statement.
P
A
G
E
3
0
8
—
3
0
9
GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
NO T E 2 OP E R AT ING I NC OME
OPERATING INCOME NOK 1 000
Administrative services – Group companies (Note 16)
Other operating income
Total operating income
2020
75 413
43
75 456
2019
79 394
-130
79 264
NO T E 3
S A L A R IE S, P E R S ONNEL AND O T HER OP ER AT ING E XP ENSE S
SALARIES AND PERSONNEL EXPENSES NOK 1 000
Wages and salaries
Social security costs
Share options for directors and key personnel (Note 4)
Pension costs – defined contribution scheme
Other personnel costs
Total
Average number of employees
2020
38 678
6 692
-4 996
1 657
6 243
48 276
29
2019
30 013
5 912
16 387
1 424
7 450
61 186
25
The Company has a pension scheme covering all employees at 31 December 2020. The pension scheme is funded and managed through an
insurance company.
Grieg Seafood established a share savings program for its employees and has been continued in 2020. See the consolidated financial
statements Note 16 for further information.
In December 2019 the Norwegian Parliament adopted new rules on the wage policy of listed public companies. New rules came into
force in January 2021 and replace the current rules on guidelines for wage policy as well as the requirements for reporting wages and
remuneration. New provisions from 1 January 2021 mean that the public limited companies are not obliged to submit a management salary
declaration for 2020.
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS REMUNERATION PAID TO GROUP
MANAGEMENT IN 2020 NOK 1 000
SALARY
BONUS
RETAINED,
NOT YET PAID
OPTIONS EXERCISED
DURING THE YEAR
OTHER
BENEFITS
CEO
CFO
CTO
CHRO
COO Farming Europe
COO Farming North America
CCO
GCM
2 841
2 173
1 996
1 574
1 996
1 825
525
1 035
536
342
308
236
402
233
—
139
Total remuneration incl. social security costs
13 963
2 197
—
—
—
—
—
—
—
—
—
2 709
2 070
1 868
1 431
1 615
1 571
—
—
11 264
118
101
101
106
78
78
81
96
759
TOTAL
6 203
4 686
4 272
3 347
4 092
3 706
606
1 269
28 183
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 4.
In May 2020, Grieg Seafood announced changes to the Group management structure, with inclusion of COOs for farming in Europe and North America. In June, the Chief Commercial
Officer was added to the Group management team of Grieg Seafood.
REMUNERATION PAID TO BOARD MEMBERS IN 2020 NOK 1 000
Per Grieg Jr.*
Tore Holand**
Sirine M. Fodstad*
Marianne Ribe (from 14 May 2020)*
Katrine Trovik (from 14 May 2020)**
Asbjørn Reinkind (until 14 May 2020)
Karin Bing Orgland (until 14 May 2020)**
Solveig M.R. Nygaard (until 14 May 2020)
Total remuneration including social security costs
TOTAL
479
348
308
178
195
140
143
119
1 909
*Payment for work performed on the Remuneration Committee of NOK 22 820 is included in the remuneration paid to Per Grieg Jr. and Sirine Fodstad, and NOK 11 410 for Marianne
Ribe.
**Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand, Katrine Trovik and Karin Bing Orgland, amounting to NOK 57 050, 28 525
and 23 770, respectively.
The amounts include social security costs.
REMUNERATION PAID TO GROUP
MANAGEMENT IN 2019 NOK 1 000
SALARY
BONUS
RETAINED,
NOT YET PAID
OPTIONS EXERCISED
DURING THE YEAR
OTHER
BENEFITS
CEO
CFO
COO
CHRO
Total remuneration incl. social security costs
2 759
1 795
1 919
1 505
7 980
347
184
133
280
945
601
383
345
265
1 594
2 592
1 652
1 787
1 645
7 677
101
101
101
103
406
Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 4.
TOTAL
6 401
4 117
4 286
3 798
18 602
P
A
G
E
3
1
0
—
3
1
1
GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
REMUNERATION PAID TO BOARD MEMBERS IN 2019 NOK 1 000
Per Grieg Jr.*
Asbjørn Reinkind*
Wenche Kjølås (until 13.06.2019)**
Karin Bing Orgland**
Solveig M.R. Nygaard
Tore Holand**
Sirine M. Fodstad (from 13.06.2019)***
Total remuneration including social security costs
TOTAL
456
319
140
311
257
285
154
1 923
*Payment for work performed on the Remuneration Committee of NOK 19 968 is included in the remuneration paid to Per Grieg Jr. and Asbjørn Reinkind.
**Payment for work performed on the Audit Committee is included in the remuneration paid to Wenche Kjølås, Karin Bing Orgland and Tore Holand, amounting to NOK 25 673, 54 198
and 28 525, respectively.
***Payment for work performed on the Remuneration Committee of NOK 11 410 is included in the remuneration paid to Sirine Fodstad.
The amounts include social security costs.
BREAKDOWN OF AUDITOR'S FEES NOK 1 000
Statutory audit
Other certification services
Tax advisory fee
Other services
Total
2020
852
362
347
101
1 663
2019
994
514
302
173
1 983
The audit fee specification for 2020 include fees from Advokatfirmaet PricewaterhouseCoopers AS (tax-related assistance) of NOK 338
thousands.
OTHER OPERATING EXPENSES
In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the Norwegian
salmon industry. Grieg Seafood is one of the companies under investigation. Based on the EU investigation, US competition authorities
launched their own investigation into the matter in November 2019, and American class-action lawsuits were filed in the USA by minor
customers. Two lawsuits by two persons have also been filed in Canada.
Grieg Seafood is not aware of any anti-competitive behavior within the Group, not in Norway, the EU, the USA, or in Canada. We are fully
collaborating with European and American authorities in this matter and will follow up the lawsuits in the USA and Canada accordingly.
There is no new information regarding the EU investigation, and Grieg Seafood considers it to be probable that the investigation will be in
its favor, which also is supported by legal advice. Furthermore, the amount of the contingent liability related to a negative outcome of this
matter cannot be reasonable estimated, due to the lack of information. Consequently, no provision has been recognized in relation to both
the EU and the US investigation, nor to any of the civil lawsuits.
Approximately NOK 25.5 million (2019: NOK 20 million) was spent on lawyer fees related to the EU commission investigation in 2020.
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS NO T E 4
S H AR E B A S ED PAYMEN T S
The Company has issued options to the management group and regional directors. The options’ strike price is the stock market price on the
date of issue, rising by 0.5% per month until the exercise date. Since 2009, an option scheme with settlement in cash has been established
for the Group management and regional directors. The most recent allocation was in 2020, totalling 1 890 000 options. The final exercise
date is 31 May 2024. The options have a term of two years, where 50% is vested each year.
The Black & Scholes option pricing model is used to calculate the market value. A brokerage firm is used to perform the calculations. The
table below shows the movement in outstanding options during 2019 and 2020.
OVERVIEW 2020
(TOTAL OPTIONS)
OPTION
CATEGORY
OUTSTANDING
OPTIONS AT
31.12.2019
GRANTED
OPTIONS
EXERCISED
OPTIONS
CEO
CFO
CTO
CHRO
GCM
Cash settlement
Cash settlement
Cash settlement
Cash settlement
Cash settlement
400 000
200 000
200 000
132 712
—
COO Farming Europa
Cash settlement
200 000
340 000
170 000
170 000
100 000
100 000
170 000
170 000
170 000
500 000
48 271
36 881
33 287
25 509
—
28 781
27 992
—
51 990
252 711
200 000
0
277 492
1 610 205
1 890 000
OPTION
CATEGORY
OUTSTANDING
OPTIONS AT
31.12.2018
EXERCISED
OPTIONS
Cash settlement
Cash settlement
Cash settlement
Cash settlement
Cash settlement
600 000
276 044
300 000
200 000
999 999
2 376 044
29 530
18 826
20 364
67 288
157 238
293 246
EXPIRED
OPTIONS
151 729
63 119
66 713
7 203
—
71 219
72 008
—
25 503
457 494
EXPIRED
OPTIONS
170 470
57 218
79 636
—
165 269
472 593
COO Farming North America
Cash settlement
Cash settlement
Cash settlement
CCO
Others
Total
OVERVIEW 2019
(TOTAL OPTIONS)
CEO
CFO
COO
CHRO
Others
Total
ALLOCATION:
YEAR - MONTH
EXPIRY DATE:
YEAR - MONTH
STRIKE PRICE NOK
PER SHARE AT 31.12.2020
STRIKE PRICE NOK
PER SHARE AT 31.12.2019
2017 - 11
2017 - 11
2020 - 12
2020 - 12
Total
2020 - 05
2021 - 05
2023 - 05
2024 - 05
100.07
100.07
78.96
78.96
94.29
94.29
—
—
OUTSTANDING
OPTIONS AT
31.12.2020
OF WHICH
CASH-
SETTLED
540 000
270 000
270 000
200 000
100 000
270 000
270 000
170 000
700 000
540 000
270 000
270 000
200 000
100 000
270 000
270 000
170 000
700 000
2 790 000
2 790 000
OUTSTANDING
OPTIONS AT
31.12.2019
OF WHICH
CASH-
SETTLED
400 000
200 000
200 000
132 712
677 492
400 000
200 000
200 000
132 712
677 492
1 610 205
1 610 205
OPTIONS
2020
—
900 000
945 000
945 000
2019
710 205
900 000
—
—
2 790 000
1 610 205
P
A
G
E
3
1
2
—
3
1
3
GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
Cash-based options available for settlement
Weighted average exercise price on outstanding options (NOK per option)
2020
2019
2 790 000
80
1 610 205
83
NOK/OPTION
AMOUNTS IN NOK 1 000
OPTION
CATEGORY
LISTED
PRICE ON
ALLOCATION
CALCULATED
VALUE PER
OPTION ON
ALLOCATION
CALCULATED
TOTAL
VALUE ON
ALLOCATION *
TOTAL VALUE
OF ALL
OPTIONS AT
01.01.2020
CHANGE IN
PROVISION
CB-OB*
EXERCISED
OPTION 2020
ACC. COST
RECOGNIZED
IN EQUITYAT
31.12.2020
RECOGNIZED
LIABILITY
CASH
SETTLEMENT
AT 31.12.2020
Equity
option
Cash
Cash
Cash
Cash
Cash
—
78.96
78.96
78.96
78.96
78.96
Cash
78.96
Cash
Cash
Cash
Cash
Cash
Cash
Cash
78.96
78.96
78.96
83.00
83.00
83.00
83.00
—
4.35
6.34
5.82
7.20
6.04
5.87
5.87
6.13
7.04
2.26
2.79
2.79
2.38
—
1 480
1 078
989
720
604
999
999
1 042
3 519
906
557
557
475
—
—
—
—
—
—
—
—
—
—
56
41
37
27
23
38
38
39
—
4 007
2 505
2 688
1 891
132
-3 540
-2 188
-2 392
-1 645
—
—
—
—
—
—
—
—
—
—
2 709
2 070
1 868
1 431
6 887
—
—
—
—
—
—
—
—
—
—
—
—
—
—
56
41
37
27
23
38
38
39
132
467
316
296
247
Cash
83.00
2.35
1 880
15 802
8 557
19 649
-7 472
-16 807
6 103
14 181
—
6 887
1 085
2 842
2020
Former
employees with
expired options
CEO
CFO
CTO
CHRO
GCM
COO Farming
Europe
COO Farming
North America
CCO
Other options
allocated in 2020
CEO
CFO
COO
CHRO
Other options
allocated in 2017
Total
*Amounts exclude social security costs
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS NOK/OPTION
AMOUNTS IN NOK 1 000
OPTION
CATEGORY
LISTED
PRICEON
ALLOCATION
CALCULATED
VALUE PER
OPTION ON
ALLOCATION
CALCULATED
TOTAL
VALUE ON
ALLOCATION *
TOTAL VALUE
OF ALL
OPTIONS AT
01.01.2019
CHANGE IN
PROVISION
CB-OB*
EXERCISED
OPTION 2019
ACC. COST
RECOGNIZED
IN EQUITY AT
31.3.2020
RECOGNIZED
LIABILITY
CASH
SETTLEMENT
AT 31.3.2020
Equity
option
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
—
25.50
25.50
25.50
79.00
83.00
83.00
83.00
83.00
—
3.36
3.97
3.97
3.63
2.26
2.79
2.79
2.38
—
1 342
793
793
363
906
557
557
475
—
2 575
1 634
1 773
—
1 709
1 057
1 130
898
—
-2 575
-1 634
-1 773
—
2 298
1 448
1 558
994
—
2 592
1 652
1 787
1 645
—
—
—
—
Cash
25.50
3.60
2 876
3 027
-3 027
3 267
Cash
83.00
2.35
1 880
10 543
3 699
17 503
4 858
2 145
2 995
13 939
6 887
—
—
—
—
—
—
—
—
—
—
6 887
—
—
—
—
—
4 007
2 505
2 688
1 891
—
8 557
19 649
2019
Former
employees with
expired options
CEO
CFO
COO
CHRO
CEO
CFO
COO
CHRO
Other options
allocated in 2015
Other options
allocated in 2017
Total
*Amounts exclude social security costs
ACCRUED COST RELATED TO CASH OPTIONS NOK 1 000
2020
2019 CLASSIFICATION IN FINANCIAL STATEMENTS
Change in provisions
Exercised options during the year
Total cost excl. social security costs
Social security costs
Total cost incl. social security costs
-16 807
14 181
-2 626
-2 370
-4 996
2 145 Other provisions for liabilities
13 939 Salaries and personnel expense / cash
16 085
303 Public taxes payable
16 387 Salaries and personnel expense
Cost relating to cash-based remuneration in 2020 totalled NOK -4 996 thousand. This is recognized in the income statement as a personnel
cost. Social security contributions are provided for on an ongoing basis based on the fair value of the options.
As at 31 December 2020, outstanding options with the right to cash settlement were stated at NOK 2 842 thousand, of which NOK 2 411
thousand were classified as current liabilities. Issued options are cancelled on termination of employment. Book value of long term liabilities
incl. social security cost is NOK 491 thousand.
ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS
Anticipated volatility (%)
Risk-free rate of interest (%)
Estimated qualification period (years)
The estimated qualification period for the options is based on historical data, and does not necessarily represent future developments.
In order to estimate volatility, management has applied historical volatility for comparable listed companies.
31.12.2020
31.12.2019
37.90%
1.39%
0.98
41.49%
1.07%
1.56
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NO T E 5
FIN A NC I A L INC OME AND FIN ANCI AL E XP ENSE S
FINANCIAL ITEMS NOK 1 000
FINANCIAL INCOME
Interest income from Group companies
Gain/loss sale of subsidiary
Other interest income
Group contributions from subsidiaries
Dividend
Unrealized value changes, derivatives (note 8)
Unrealized currency change, non-current EUR term loan
Unrealized currency change, non-current loans from Group companies
Net realized currency gains
Net unrealized currency gains
Total
FINANCIAL EXPENSE
Financial expense
Loan interest expenses
Interest expense to Group companies
Other interest expenses
Unrealized value changes, derivatives, (note 8)
Realized value changes, derivatives
Unrealized currency change, non-current loans from Group companies
Unrealized currency change, non-current EUR term loan
Other financial expenses
Net realized currency losses
Net unrealized currency losses
Total
Net financial items
2020
2019
67 914
59 978
254
99 710
17 362
6 761
—
89
—
—
252 069
94 247
1 090
3 460
21 493
2 022
—
28 623
3 601
15 677
13 042
183 255
68 814
34 484
—
615
862 390
14 737
4 704
7 100
29 819
1
29 008
982 858
35 494
535
860
—
125
—
—
2 381
2 776
—
42 171
940 687
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS NO T E 6
O T HE R CUR R E N T R ECEI VA BLE S/O T HER CUR R EN T LI A BILI T IE S
OTHER CURRENT RECEIVABLES NOK 1 000
Prepaid expenses
VAT
Other current receivables to Sjór AS (before Ocean Quality AS)
Realised gain on price contracts, receivable on counterpart
Other current receivables
Tax refund as a part of Corona tax measures
Total other current receivables
OTHER CURRENT LIABILITIES NOK 1 000
Accrued interest
Other accrued expenses
Unrealized loss on foreign currency contracts (Note 8)
Other current liabilities
Total other current liabilities
NO T E 7
B A NK DEP O S I T S
BANK DEPOSITS NOK 1 000
Restricted deposits relating to employees' tax deductions
Other bank deposits
Total
2020
4 162
1 740
16 940
27 411
458
6 600
57 311
2020
10 451
11 938
—
1 034
23 423
2019
8 925
3 061
—
—
97
—
12 084
2019
4 984
20 090
—
2 791
27 865
2020
2 163
181 547
183 710
2019
1 591
4 803
6 395
The company has an overdraft facility of NOK 100 million. Available credit on the overdraft facility was NOK 100 million at year-end 2020
(2019: NOK 100 million).
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NO T E 8
S HOR T-T ER M INV E S T MEN T S AND FIN ANCI AL INS T RUMEN T S
SHORT-TERM INVESTMENTS AND FINANCIAL INSTRUMENTS NOK 1 000
Financial instruments
DNB Global Allokering Norway (book value)*
Total
2020
6 761
566
7 328
2019
5 877
483
6 360
*Registered office: Oslo, Norway. Ownership percentage 0.00%. Numbers of shares: 3 038. Acquisition cost of NOK 630 thousands.
FINANCIAL INSTRUMENTS NOK 1 000
Interest rate swap contracts (five contracts for NOK 260 million, NOK 200 million, NOK 200
million, NOK 200 million and NOK 200 million maturing in 2021, 2023, 2024, 2024 and 2024,
respectively
Foreign currency contract GBP/NOK (Maturity interval 10.03.2021-12.01.2022)
Cross currency interest rate swap (NOK/EUR), maturity in 2025, NOK 250 million / EUR 23
million
Total financial instruments
—
69
6 692
6 761
15 616
5 877
—
—
—
—
15 616
5 877
2020
2019
ASSETS
CURRENT
LIABILITIES
ASSETS
CURRENT
LIABILITIES
CHANGES IN FINANCIAL INSTRUMENTS RECOGNIZED AS FINANCIAL ITEMS NOK 1 000
Unrealized gain/loss on interest rate swaps
Unrealized gain/loss on foreign currency contracts
Net unrealized gain/(loss) on financial instruments
2020
-19 823
6 761
-13 062
—
—
—
—
2019
4 619
85
4 704
The Company is exposed to a number of financial risks; market risk (including foreign exchange risk, interest rate risk and price risk), credit
risk and liquidity risk. The Company’s overall risk management program focuses on the volatility of the financial markets and seeks to
minimize potential adverse effects on the Company’s financial performance. The Company uses financial derivatives to reduce certain risks.
The Board has established written principles for the management of foreign exchange risk, interest rate risk and use of the Company´s
financial instruments.
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS NO T E 9 INV E S T ME N T S IN S UB SIDI AR IE S
SUBSIDIARY
Grieg Seafood Rogaland AS
Grieg Seafood Canada AS
Grieg Seafood Finnmark AS
Grieg Seafood Norway AS
Grieg Seafood Shetland Ltd
Grieg Newfoundland AS
Total
*Newly established in 2020.
REGISTERED
OFFICE
COUNTRY
REGISTERED
OFFICE
LOCATION
OWNERSHIP/
VOTING
SHARE
EQUITY AT
31.12.2020
NOK 1 000
PROFIT/
LOSS 2020
NOK 1 000
BOOK VALUE
NOK 1 000
Norway
Norway
Norway
Norway
Bergen
Bergen
Alta
Bergen
UK
Shetland
Norway
Bergen
100 %
100 %
100 %
100 %
100 %
99 %
829 445
227 353
1 056 238
1 062
-119 929
80 587
2 074 756
208 674
-9
68 020
-2 324
-202 820
-12 544
58 997
223 497
297 112
400 481
1 000
458 750
981 319
2 362 159
Equity and profit/loss are taken from provisional financial statements, which have been prepared in accordance with local accounting
standards.
GRIEG SEAFOOD SHETLAND LTD
In November 2020, we announced that the board of Grieg Seafood ASA has decided to divest the investment and operations in Shetland,
as we will focus on our operations in Norway and Canada going forward. We have appointed DNB Markets and Nordea Markets to advice
on a potential divestment of the Shetland assets. A conclusion of the process is expected within 2021. The net asset values booked in the
consolidated financial statements of Grieg Seafood directly associated with the Shetland assets held for sale amounts to NOK 1 481 million.
A disposal group's held for sale is measured at the lower of book value and fair value less cost of sale. See more information in Note 5 in the
Group's consolidated financial statement for 2020.
ACQUISITION OF GRIEG NEWFOUNDLAND
Grieg Seafood ASA acquired 99 % of the shares in Grieg Newfoundland AS on the 20 April 2020. The transaction was a related party
transaction, see more information in Note 16. See also Note 6 of the Grieg Seafood consolidated group financial statement.
The book value of the investment in Grieg Newfoundland AS in Grieg Seafood ASA equals the consideration in addition to capitalized
transaction costs. The consideration is split into three parts - the net cash payment, the completion shares in Grieg Seafood ASA and
contingent consideration. The negotiated subscription price for the completion shares was set at NOK 140.05, corresponding to a total
contribution of NOK 250 million. As the market price per share was NOK 108.20 at closing, the value of the completion shares was NOK
193.1 million.
CONTINGENT CONSIDERATION
If certain production volumes are reached within the next ten years, additional payments are triggered. The additional amount becomes
unconditional when Grieg Newfoundland has reached a planned annual harvest volume of 15 000 tonnes, and the amount increases with
volume until an annual harvest volume of 33 000 tonnes. The amount due is NOK 43 per kg for volumes between 15 000-20 000 tonnes, and
NOK 55 per kg for volumes between 20 000-33 000 tonnes, with a 4% per annum inflation adjustment in the period 2023-2029.
Fair value estimate of the additional amount has been arrived at by using the DCF-model based on four different scenarios of volume
development and the timing of this development. Volumes exceeding 15 000 tonnes require further investments in additional post-smolt
modules, biomass, and seafarm equipment. The high probability of such investments being made have been incorporated in the scenario
analysis. The maximum nominal amount is estimated to NOK 930 million +4% annual increase in the period from 2023 to 2029. The additional
amount is settled in shares in Grieg Seafood ASA and/or cash. The sellers may require a cash payment of maximum 33.34%. Further Grieg
Seafood ASA has the discretion to increase the cash portion up to 100% cash. If settlement is made in shares, the number of settlement
shares is calculated based on the last month’s volume weighted average listed price from time the conditions are met.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
It is in GSF’s sole discretion to decide whether the expansion investments are to be carried out in line with the production plan. If stage
two and three of the post-smolt facilities are not constructed within ten years, the additional milestone payments will not be triggered.
Thus, the contingent consideration is classified as equity. Classification as equity reflects that the sellers continue to share the risk of the
operations. Only if the first phase of the operation is successful, the seller will receive a payment when the next phase is entered into. Due
to the materiality of the amount, the contingent consideration is presented as a separate component of equity.
See more information in Note 6 in the Group's consolidated financial statement for 2020.
SALE OF OCEAN QUALITY AS (SJÓR AS)
Grieg Seafood ASA sold its 60 % stake in Ocean Quality AS (now named Sjór AS) to Bremnes Fryseri AS (non-controlling interest up until the
sale) at 31 December 2020. As part of the agreement, Grieg Seafood ASA' short term liability of NOK 43 million towards Ocean Quality AS
was transferred to Bremnes Fryseri AS. The consideration comprises cash consideration and accruals, debtor changes on receivable and
liabilities, in addition to Grieg Seafood ASA book value of the investment in Ocean Quality AS was NOK 6 million, resulting in a gain of NOK
60 million at 31 December 2020. The gain is booked as other financial income at the end of 2020. See more information in Note 1 and Note
5 in the Group’s consolidated financial statement for 2020.
NO T E 1 0
I NV E S T MEN T S IN S H AR E S
INVESTMENTS IN SHARES
Finnøy Næringspark AS
Norsk Villaksforvaltning Foundation
The Seafood Innovation Cluster AS
Book value of shares at 31.12
REGISTERED
OFFICE
COUNTRY
REGISTERED
OFFICE
LOCATION
OWNERSHIP/
VOTING SHARE
NUMBER OF
SHARES
ACQUISITION
COST
NOK 1 000
BOOK VALUE
NOK 1 000
Norway
Norway
Norway
Finnøy
Førde
Førde
7.14 %
15.15 %
12.50 %
100
5
25 000
103
50
8
103
57
8
169
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS NO T E 1 1
I N TA NGIB LE A S SE T S
2020 NOK 1 000
Book value at 01.01
Additions
Amortization
Book value at 31.12
ACCUMULATED VALUES
Acquisition cost
Accumulated amortization
Book value at 31.12
Economic life/amortization schedule
2019 NOK 1 000
Book value at 01.01
Additions
Amortization
Book value at 31.12
ACCUMULATED VALUES
Acquisition cost
Accumulated amortization
Book value at 31.12
Economic life/amortization schedule
SOFTWARE
15 238
3 944
-4 678
14 504
50 381
-35 877
14 504
3 - 10 years
SOFTWARE
18 739
695
-4 196
15 238
46 492
-31 254
15 238
3 - 10 years
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NO T E 1 2
P R OP ER T Y, P L AN T AND EQUIP MEN T
2020 NOK 1 000
Book value at 01.01
Additions
Depreciation
Book value at 31.12
ACCUMULATED VALUES
Acquisition cost
Accumulated depreciation
Book value at 31.12
Economic life/depreciation schedule
2019 NOK 1 000
Book value at 01.01
Additions
Depreciation
Book value at 31.12
ACCUMULATED VALUES
Acquisition cost
Accumulated depreciation
Book value at 31.12
Economic life/depreciation schedule
The company has operating lease agreements, which are not recognized in the balance sheet:
2020
ASSETS
Buildings
Other equipment
Total lease amount charged
PLANT, EQUIPMENT AND
OTHER FIXTURES ETC.
3 379
294
-1 542
2 131
17 959
-15 828
2 131
3–5 years
PLANT, EQUIPMENT AND
OTHER FIXTURES ETC.
4 488
534
-1 643
3 379
17 665
-14 286
3 379
3–5 years
DURATION
Until 2028
3-5 years
OPERATING LEASE
EXPENSE
3 520
755
4 275
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS NO T E 1 3
S H AR E C AP I TA L AN D SH AR EHOLDER INF OR M AT ION
As at 31 December 2020, the Company had 113 447 042 shares with a nominal value of NOK 4 per share. All shares
issued by the Company are fully paid-up. There is one class of shares and all shares confer the same rights.
SHARE CAPITAL AND NUMBER OF SHARES
31.12.2020
NOMINAL VALUE
PER SHARE (NOK)
TOTAL SHARE CAPITAL NOK 1 000
NO. OF ORDINARY SHARES
Total
Holdings of treasury shares
Sale of treasury shares 2018-2019
Sale of treasury shares 2020
Total excl treasury shares
4.00
4.00
4.00
4.00
453 788
-5 000
145
169
449 102
113 447 042
-1 250 000
36 313
42 193
112 275 548
TREASURY SHARES
In June 2011, the Company purchased 1 250 000 treasury shares at NOK 14.40 per share. On 21 November 2018, the Company sold 21 576
shares to employees for use in the share savings program. The sales price was NOK 121.56 per share, which provided a gain of NOK 107.16
per share. Another 14 737 shares were sold to employees in November 2019 at a sales price of NOK 136.05 per share, providing a gain of
NOK 121.65 per share. In 2020, Grieg Seafood ASA sold 42 193 at a sales price of NOK 77.16 a share, providing a gain of NOK 62.76 a share.
After the transactions the Company has 1 171 494 treasury shares.
CHANGES IN SHARE CAPITAL
Share capital
Contribution in kind
Share capital
1 January 2020
20 April 2020
31 December 2020
NOMINAL VALUE
PER SHARE (NOK)
4.00
4.00
4.00
TOTAL SHARE CAPITAL
NOK 1 000
NO. OF ORDINARY SHARES
446 648
7 140
453 788
111 662 000
1 785 042
113 447 042
ACQUISITION OF GRIEG NEWFOUNDLAND
On 20 April 2020, Grieg Seafood ASA' share capital was increased by 1 785 042 shares (nominal value of NOK 4 per share), from 111 662 000
shares to 113 447 042 shares. The share capital was thus increased by NOK 7 140 168, from NOK 446 648 000 to NOK 453 788 168. The share
issue in the Company to shareholders Grieg Aqua AS, Kvasshøgdi AS, Knut Skeidsvoll and Ocean Choice International Ltd was related to the
Company’s acquisition of Grieg Newfoundland AS, which was completed on 15 April 2020. For more information, see more information in
Note 6 of the Consolidated Financial Statement of 2020 for Grieg Seafood.
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THE 20 LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA
31.12.2020
31.12.2020
31.12.2019
31.12.2019
NO. OF SHARES
SHAREHOLDING
NO. OF SHARES
SHAREHOLDING
Grieg Aqua AS
Folketrygdfondet
OM Holding AS
Ystholmen Felles AS
Clearstream Banking S.A. (nominee)
State Street Bank and Trust Comp (nominee)
Ronja Capital II AS
Grieg Seafood ASA
Six Sis AG (nominee)
UBS Switzerland AG (nominee)
JPMorgan Chase Bank, N.A., London (nominee)
Banque Degroof Petercam Lux. SA (nominee)
Verdipapirfondet Pareto Investment
State Street Bank and Trust Comp (nominee)
State Street Bank and Trust Comp (nominee)
Ferd AS
Svenska Handelsbanken AB (nominee)
J.P. Morgan Bank Luxembourg S.A. (nominee)
State Street Bank and Trust Comp (nominee)
Danske Invest Norge Vekst
Total 20 largest shareholders
Total others
Total number of shares
56 914 355
50.17%
56 018 799
50.17%
4 281 530
4 235 656
2 928 197
1 937 653
1 616 926
1 200 000
1 171 494
1 038 659
945 209
915 596
822 051
764 000
737 722
697 771
688 453
593 415
592 624
524 061
3.77%
3.73%
2.58%
1.71%
1.43%
1.06%
1.03%
0.92%
0.83%
0.81%
0.72%
0.67%
0.65%
0.62%
0.61%
0.52%
0.52%
0.46%
5 100 130
6 169 379
2 928 197
1 745 002
2 166 080
—
1 213 687
—
780 949
915 596
—
1 701 000
1 057 400
597 876
—
—
—
—
4.57%
5.53%
2.62%
1.56%
1.94%
—%
1.09%
—%
0.70%
0.82%
—%
1.52%
0.95%
0.54%
—%
—%
—%
—%
521 000
83 126 372
30 320 670
113 447 042
0.46%
73.27%
26.73%
100.00%
—
80 394 095
31 267 905
111 662 000
—%
72.00%
28.00%
100.00%
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS SHARES CONTROLLED BY BOARD MEMBERS
AND GROUP MANAGEMENT
NO. OF SHARES
SHAREHOLDING
NO. OF SHARES
SHAREHOLDING
31.12.2020
31.12.2020
31.12.2019
31.12.2019
58 961 996
52.80%
BOARD OF DIRECTORS
Per Grieg Jr. *
Tore Holand (Skippergata 24 AS, and privately)
Sirine Fodstad
Marianne Ribe (board member from 14 May 2020)
Katrine Trovik (board member from 14 May 2020)
Asbjørn Reinkind (Reinkind AS, board member until 14 May 2020)
Karin Bing Orgland (board member until 14 May 2020)
Solveig Nygaard (board member until 14 May 2020)
GROUP MANAGEMENT
CEO
CFO
CTO
COO Farming Europe
COO Farming North America
CHRO
GCM
CCO
60 354 324
2 000
—
—
—
120 000
—
4 000
39 489
24 532
23 831
22 489
19 889
12 060
424
—
53.20%
0.00%
—%
—%
—%
0.11%
—%
0.00%
0.03%
0.02%
0.02%
0.02%
0.02%
0.01%
0.00%
—%
—
—
—
—
120 000
—
—
39 165
24 208
23 507
22 165
19 565
7 536
—
—
* THE SHARES OWNED BY THE FOLLOWING COMPANIES ARE CONTROLLED BY PER GRIEG JR. AND FAMILY
Grieg Aqua AS
Ystholmen Felles AS
Kvasshøgdi AS
Per Grieg jr. privately
Total shares
56 914 355
2 928 197
496 772
15 000
60 354 324
50.17%
2.58%
0.44%
0.01%
53.20%
56 018 799
2 928 197
—
15 000
58 961 996
—%
—%
—%
—%
0.11%
—%
—%
0.04%
0.02%
0.02%
0.02%
0.02%
0.01%
—%
—%
50.17%
2.62%
—%
0.01%
52.80%
On 30 December 2020, the board of Ystholmen Felles AS submitted a proposal to the company's general meeting to
demerge the company, where 500 000 shares in Grieg Seafood ASA will be transferred from Ystholmen Felles AS to Kvasshøgdi AS, org.
no. 921 020 961. The demerger was effective from 4 March 2021. Subsequent to the demerger, Per Grieg Jr. is the sole shareholder in
Kvasshøgdi AS, and Per Grieg Jr. and the other shareholder's, through their ownership of Ystholmen Felles AS, own 2 428 197 shares in
Grieg Seafood ASA. In addition, Per Grieg Jr. own, through his ownership of Kvasshøgdi AS, 996 772 shares in Grieg Seafood ASA.
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NO T E 1 4
TA X E S
BASIS FOR TAX PAYABLE NOK 1 000
Profit before tax
Dividends recognized in profit or loss
3% dividend tax
Net other permanent differences
Other permanent differences from gain of sales of share
Unrealized value adjustments of share
Change in financial derivatives
Change in temporary differences
Change in temporary differences from 2019 and 2018
Group contribution received/provided
Taxable loss
Group contribution received
Basis for tax expense for the year
22% (22%) tax payable
Underprovision for tax previous year
22% (22%) tax payable
2020
-4 210
-17 362
521
1 459
-54 486
-165
14 732
-3 163
-1 267
-99 710
-163 651
99 710
-63 941
—
279
279
2019
853 305
-14 737
442
2 665
—
—
-5 104
-17 328
-16 054
-862 390
-59 200
862 390
803 190
176 702
3 692
180 394
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS BREAKDOWN OF DEFERRED TAX BASIS NO 1 000
CHANGE
2020
2019
TEMPORARY DIFFERENCES
Non-current assets
Profit and loss account
Cash-based options
Non-current debt/amortized cost
Revaluation account non-current liabilities
Discount bond loan
Net temporary differences
Financial instruments
Loss carryforward
Profit from 2019 carryforward to cover loss in 2020 (Corona refund)
Basis for deferred tax in balance sheet
22% deferred tax
Deferred tax assets/deferred tax liabilities in the balance sheet
BREAKDOWN OF TAX CHARGE
Tax payable
Change in deferred tax, 22% (22%)
Tax refund as a part of Corina tax measures
Tax effect of foreign tax not credited Norwegian tax
Tax expense in income statement
RECONCILIATION OF TAX EXPENSE
Profit before tax
Estimated tax 22% (22%)
Tax expense in income statement
Difference
THE DIFFERENCE CONSISTS OF THE FOLLOWING:
22% of permanent differences
Tax effect of foreign tax not credited Norwegian tax
Change in tax/deferred tax due to change of tax rate
Total reconciled difference
-2 372
-159
19 177
32 746
-29 013
-17 216
3 163
-14 732
-69 433
30 000
-51 003
-11 221
-11 221
2 379
635
-3 242
42 768
76 882
-17 216
102 206
-8 855
-69 433
30 000
53 917
11 862
11 862
279
-11 221
-6 600
1 716
4 751
794
-22 419
10 022
105 895
—
99 044
5 877
—
104 921
23 083
23 083
180 394
4 935
—
1 016
-15 826
186 345
-4 210
926
-15 826
-14 899
-16 616
1 716
—
-14 899
853 305
-187 727
186 345
-1 382
-2 558
1 016
161
-1 382
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
NO T E 1 5 GU A R A N T E E S
Grieg Seafood ASA acted as a guarantor for Grieg Seafood Sales UK (formerly know as Ocean Quality UK Limited) and Grieg Seafood Sales
North America Inc. (formerly known as Ocean Quality North America Inc.) in connection with sales contracts with customers. The total
guaranteed amounts are EUR 250 000 and USD 3 000 000.
NO T E 1 6 R EL AT ED PAR T IE S
2020
NOK 1 000
OPERATING
INCOME
OPERATING
EXPENSES
FINANCIAL
INCOME
FINANCIAL
EXPENSES
NON-
CURRENT
RECEIVABLES
TRADE
RECEIVABLES
CURRENT
RECEIVABLES
TRADE
PAYABLES
OTHER
CURRENT
LIABILITIES
Total related
parties – Group
companies
Total related
parties –
Shareholders
Total
75 413
-3 474
85 256
1 090
1 216 143
4 307
2 361 526
-45 750
-2 993
—
75 413
-13 452
-16 926
—
—
—
85 256
1 090
1 216 143
—
4 307
—
-188
—
2 361 526
-45 939
-2 993
2019
NOK 1 000
OPERATING
INCOME
OPERATING
EXPENSES
FINANCIAL
INCOME
FINANCIAL
EXPENSES
NON
CURRENT
RECEIVABLES
TRADE
RECEIVABLES
CURRENT
RECEIVABLES
TRADE
PAYABLES
OTHER
CURRENT
LIABILITIES
Total related
parties – Group
companies
Total related
parties –
Shareholders
79 394
—
941 516
-535
648 991
21 217
1 806 443
-1 625
-216 868
Total
79 434
-10 060
941 516
40
-10 060
—
—
-535
—
—
—
-505
—
648 991
21 217
1 806 443
-2 130
-216 868
The company carries out transactions with companies controlled by Grieg Maturitas II AS, who is the parent company of Grieg Aqua AS,
majority owner of Grieg Seafood ASA.
The parent company, Grieg Maturitas II AS, is headquartered in C. Sundts gate 17/19, Bergen, Norway, where one can obtain consolidated
financial statements, in which the Company is included.
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS The services provided include:
•
ICT-related and other services such as catering, reception etc. are delivered by Grieg Group Resources AS. The services are provided on
an arm's length basis.
• Grieg Seafood ASA rents its offices from Grieg Garden AS on an arm’s length basis.
The parent company provides a range of services to the subsidiaries. The services include administrative services and services relating to
the provision of parent company non-current loans and current credit facilities to the subsidiaries. Interest is charged on an arm's length
basis.
Grieg Seafood ASA sold all its shares in Sjór AS (previously known as Ocean Quality AS) at 31 December 2020. Transactions with Ocean
Quality AS for the year 2020 was all related parties transactions, however Sjór AS is not part of the Grieg Seafood Group at year-end 2020.
Included in income the administrative services provided to Sjór AS for 2020 as long they was a subsidiaries with NOK 5 million. Dividend of
NOK 17 million is included in financial income for 2020.
Grieg Seafood ASA enters into hedging contracts on behalf of Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS. The arrangement
is intended to reduce these companies´ exposure to salmon prices. The agreements with the subsidiaries are priced on the basis of a “back-
to-back” arrangement.
The acquisition of Grieg Newfoundland AS (99%) was completed on 15 April 2020. Grieg Newfoundland AS was 39% owned by Grieg Kapital
AS/Grieg Aqua AS (the owner of the majority of the shares in Grieg Seafood ASA), and 39% by Kvasshøgdi AS (owned by Per Grieg Jr,
Chairman of the Board of Grieg Seafood ASA). The remaining of the shares were owned by the local partner Ocean Choice International Ltd
(19.5%) and Knut Skeidsvoll (2.5%). The up-front payment was based on an enterprise value of Grieg Newfoundland AS of NOK 539.1 million.
NOK 250 million of the up-front payment was settled through issuance of new shares in the Company to the sellers of Grieg Newfoundland
AS.
On 20 April 2020, the directed private placement was completed by issuing 1 785 042 new shares to Grieg Aqua AS and Kvasshøgdi AS, in
addition to the other owners as part of consideration for the shares in Grieg Newfoundland AS. The subscription price for each new share
was set at NOK 140.05, corresponding to a total contribution in kind of NOK 250 million. For more information, see Note 6 and 23 to the Grieg
Seafood consolidated financial statement for 2020.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
NO T E 1 7 N E T IN T E R E S T-BE AR ING LI A BILI T IE S AND P LEDGE S
Grieg Seafood ASA has a syndicated loan provided 50/50 by DNB and Nordea. The financing agreement includes two term loans of NOK 600
million and EUR 60 million, a revolving credit facility of NOK 1 500 million, alongside overdraft facilities of NOK 100 million. Repayments
of NOK 50 million and EUR 5 million will be made for term loans of respectively NOK 600 million and EUR 60 million, split into half-yearly
instalments. The drawdown rate of the EUR loan is 9.6691. The agreement has a term of five years and matures on 28 February 2023.
The financial covenant of the syndicated loan agreements is equity-ratio of minimum 35 %, measured on the book value of the consolidated
Grieg Seafood Group (exclusive of Ocean Quality). In addition, there is a rolling last-twelve months NIBD/EBITDA leverage-ratio requirement.
The leverage-ratio metric of NIBD/EBITDA is linked to our equity-ratio requirement: if equity-ratio is 40% or more, maximum leverage-ratio
is 5.0, and if equity-ratio is between 35%-40%, maximum leverage ratio is 4.5.
Grieg Seafood ASA has in Q4 2020 been granted an amendment to the covenants through the third quarter of 2021. In this period which
the temporary amended terms to the syndicated loan agreement apply, Grieg Seafood is required to have a minimum free liquidity of
NOK 200 million. In addition, there is a set requirement for the 12 month rolling EBITDA throughout the period. NIBD/EBITDA will thus
not be measured, according to agreements with our creditors, until 31 December 2021. At 31 December 2020, Grieg Seafood ASA was in
compliance with these temporary amended terms.
In June 2020, we issued our first Green Bond issue, with a proceed of NOK 1 000 million. In November 2020, Grieg Seafood ASA issued the
second tap of the senior unsecured green bond with an additional drawdown of NOK 500 million, bringing the total principal of the green
bond issue to NOK 1 500 million. The bond matures on 25 June 2025 and is listed on Euronext (Oslo Stock Exchange) with ticker "GSF01 G".
The bond carries a coupon rate of 3 months NIBOR + 3.4% p.a., with quarterly interest payments, and its financial covenant is an equity-
ratio requirement of minimum 30%, measured consistent with the Group’s equity-ratio financial covenants as defined in its syndicated loan
agreement with secured lenders. Grieg Seafood ASA was in compliance with the financial covenants of the bond agreement at 31 December
2020.
In addition to the NOK 1 500 million revolving credit facility and overdraft facility of NOK 100 million, Grieg Seafood ASA also has a revolving
credit facility of NOK 600 million available at the reporting date, which expires 31 March 2022.
NON-CURRENT LIABILITIES (INTEREST-BEARING) NOK 1 000
Green bond loan
Non-current syndicated loan
Non-current revolver credit facility *
Amortized cost
Total
CURRENT LIABILITIES (INTEREST-BEARING) NOK 1 000
Current overdraft facility *
Current portion of non-current borrowing
Current liquidity loan from subsidiaries
Total
2020
1 500 000
869 988
996 646
-42 768
3 323 866
2020
—
102 352
—
102 352
2019
—
944 638
629 319
-10 022
1 563 935
2019
—
98 212
60 000
158 212
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
NET INTEREST-BEARING LIABILITIES NOK 1 000
2020
2019
Gross interest-bearing liabilities
Unrestricted bank deposits
Loans to subsidiaries
Net interest-bearing liabilities
3 426 218
181 547
3 474 445
-229 774
1 722 146
4 803
1 375 657
341 686
* At the end of 2020, the Company had a total revolver credit facility, overdraft facility and bridge financing of NOK 2 200 million, of which NOK 1 203 million was available for utilization
at the reporting date.
MATURITY PROFILE - NON-CURRENT LIABILITIES NOK 1 000
2021
2022
2023
2024
2025
Later
Total
Green Bond loan
Non-current loan
Non-current revolver credit facility
Total
—
—
—
102 352
102 352
767 636
—
—
996 646
—
—
—
1 500 000
— 1 500 000
—
—
—
—
972 339
996 646
— 3 468 985
102 352
102 352
1 764 282
— 1 500 000
Figures include in the maturity profile table are nominal figures. Amortized cost is not included.
Liabilities secured by mortgage Nok 1 000
Liabilities to credit institutions
Total liabilities
BOOK VALUE OF ASSETS PLEDGED AS SECURITY
Shares in subsidiaries
Property, plant and equipment
Trade receivables
Loans to subsidiaries*
Total assets pledged as security
2020
2019
1 968 985
1 968 985
1 672 169
1 672 169
1 379 840
1 385 840
2 131
4 307
2 563 196
3 949 474
3 379
21 217
1 375 657
2 786 093
*The subsidiaries and the parent company have a joint and several liability against the credit institutions. See the consolidated financial statements Note 12 for further information
about liabilities secured by mortgage.
2020
2019
TYPE OF LIABILITY NOK 1 000
CURRENCY
INTEREST
RATE
MATURITY
CURRENT
PART
Green bond loan
Syndicated non-current loan
Syndicated non-current loan
Syndicated loan revolving credit
Syndicated loan revolving credit
Overdraft facility
Total
NOK
NOK
EUR
NOK
EUR
Multiple
Floating
Floating
Floating
Floating
Floating
Floating
06/2025
02/2023
02/2023
02/2023
02/2023
—
50 000
52 352
—
—
—
NON-
CURRENT
PART
1 500 000
425 000
444 988
960 000
36 646
—
CURRENT
PART
NON-
CURRENT
PART
—
50 000
48 212
—
—
—
—
475 000
469 638
580 000
49 319
—
102 352
3 366 634
98 212
1 573 957
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
Currency exposure on loans to credit institutions
Nok 1 000
Green bond loan
Syndicated non-current loan (NOK)
Syndicated non-current loan (EUR)
Syndicated loan revolving credit (non-current) (NOK)
Syndicated loan revolving credit (non-current) (EUR)
Overdraft facility
Total
Average interest rate (NOK)
Average interest rate (EUR)
31.12.2020
NOK
GBP
EUR
USD
Other
1 500 000
1 500 000
475 000
497 339
960 000
36 646
—
475 000
—
960 000
—
—
3 468 985
2 935 000
—
—
—
—
—
—
—
—
—
497 339
—
36 646
—
533 985
—
—
—
—
—
—
—
2020
2.81%
1.59%
—
—
—
—
—
—
—
2019
2.57%
1.10%
The effect of interest rate swaps is not taken into account in calculating the average interest rate on borrowings and credit facilities.
NO T E 1 8
P O S T-B A L ANCE SH EE T E V EN T S
There has been no significant events after the reporting date that will materially affect the financial statement.
Please refer to the consolidated financial statements Note 29 for further information.
OUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS P
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTSOUR FINANCIAL RESULTSGRIEG SEAFOOD ASA ACCOUNTS
OUR F IN A NC I A L R E S ULT S
A UDI T OR ' S R E P OR T
PricewaterhouseCoopers AS, Sandviksbodene 2A, Postboks 3984 - Sandviken, NO-5835 Bergen T: 02316, org. no.: 987 009 713 VAT, www.pwc.no State authorised public accountants, members of The Norwegian Institute of Public Accountants, and authorised accounting firm To the General Meeting of Grieg Seafood ASA Independent Auditor’s Report Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Grieg Seafood ASA, which comprise: • The financial statements of the parent company Grieg Seafood ASA (the Company), which comprise the Statement of financial position as at 31 December 2020, the Income Statement, Statement of changes in equity and Cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and • The consolidated financial statements of Grieg Seafood ASA and its subsidiaries (the Group), which comprise the balance sheet as at 31 December 2020, the income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion: • The financial statements are prepared in accordance with the law and regulations. • The accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2020, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway. • The accompanying consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2020, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. Basis for Opinion We conducted our audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. OUR F IN A NC I A L R E S ULT S
A UDI T OR ' S R E P OR T
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Independent Auditor's Report - Grieg Seafood ASA (2) Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Grieg Seafood Group has during 2020 acquired Grieg Newfoundland AS. Due to the judgement involved, we consider the purchase price allocation a key audit matter in this year’s audit. Measuring and valuation of biological assets continue to represent key audit matters due to consistent complexity and risk related to these matters. Key Audit Matter How our audit addressed the Key Audit Matter Purchase price allocation from the acquisition of Grieg Newfoundland In April 2020 the Group acquired a controlling interest in Grieg Newfoundland AS. The consideration for the acquisition consisted of a combination of cash, shares in GSF, and a contingent consideration. The potential future contingent consideration may be settled in cash or shares. At the date of acquisition, the fair value of the total consideration was estimated to 962 MNOK. The acquisition led to a significant increase in assets and liabilities in the Group statement of financial position, including an increase in goodwill of 677 MNOK. Assessment of the Purchase Price Allocation (“PPA”) was a key audit matter in the audit for several reasons. In addition to the substantial amounts involved, the assessment and valuation of the acquired assets and liabilities was complex and subject to judgement. Error in calculations or application of judgement could affect several financial statement line items, including equity, intangible assets, deferred tax and goodwill. We refer to note 6 (Business Combination) and note 2 (Accounting policies) in the financial statements where accounting of the acquisition is described. We obtained and reviewed the PPA report prepared by the Group and discussed key elements with management and their advisors to understand the background and purpose of the transaction. We evaluated the key elements in the PPA and valuation of the separate assets and liabilities and compared them to the requirements in IFRS. To verify the elements in the PPA, we have among others, performed the following procedures: - Obtained and reviewed the Sales Purchase Agreements (SPA), including amendments, as well as other relevant information from the Group, to check consistency with the PPA. - Obtained financial statements for the acquired business at the transaction date. The financial statements were then traced to the numbers applied in the PPA. - Considered the mathematical logic and accuracy of the PPA model and recalculated a sample of the key elements. - We involved our own internal specialists to assess the appropriateness of the accounting treatment of the business combination. In meetings with management and their advisors, we discussed and challenged key areas such as identification of assets and liabilities, valuation methodology, key assumptions, as well as the accounting treatment. We challenged management specifically on the accounting treatment and valuation of the contingent consideration, including whether this additional payment should be recognised as a liability or an equity instrument. We concluded that managements conclusions were reasonable. Finally, we reviewed the note disclosures describing the acquisition and found them to be adequate and appropriate information about the accounting treatment and use of judgement. GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTS
OUR F IN A NC I A L R E S ULT S
A UDI T OR ' S R E P OR T
Independent Auditor's Report - Grieg Seafood ASA (3) Measuring of the amount of biological assets Biological assets include inventories of broodstock, smolt and live fish held for harvesting purposes. For audits of significant inventories, the international audit standards require that the auditor participates at inventory count, provided it is practicable. The biological assets are by nature difficult to count, observe and measure due to lack of sufficiently accurate measuring techniques that at the same time does not affect fish health. As a result, there is some uncertainty related to the number of fish and biomass in the sea. Therefore, we focused on measuring the inventory of biological assets (biomass), emphasizing live fish held for harvesting purposes, which constitute the major part of the Group’s biological assets. The amount of biomass in the sea has direct influence on the valuation; see more about this in the paragraph «Valuation of biological assets at fair value» below. See note 2 (Accounting policies) and note 9 (Biological assets and other inventories) for further information about measuring of biological assets. The Group’s biomass system shows the number of fish, average weight and biomass per site. We directed our effort at the movement in biological inventory (in numbers) in the period. The movement is the total of smolt stocked, loss of fish and harvested fish for the period. We reviewed the Group’s processes for controlling the number of fish stocked. To assure accuracy of the number of fish registered in the biomass system, we tested a selection of smolt stocked, by tracing the number of fish stocked back to underlying documentation. Underlying documentation are e.g. vaccination documentation for internally produced smolt and invoices for purchase of external smolt. The growth in the period is connected to the total feed consumption and is closely associated with purchase of feed. We reviewed the Group’s internal controls of reconciliation of feed inventory and obtained external confirmation from feed suppliers in order to verify purchased volume. We also assessed recorded accumulated feed conversion rate for live fish held for harvesting purposes and obtained explanations from management and further documentation for sites with significantly either higher or lower feed conversion rate than expected. Our procedures substantiated that the growth for the year was reasonable. In order to challenge the historical accuracy of management’s biomass estimates we reviewed the harvest deviation for the period. By harvest deviation, we refer to the deviation between actual harvested biomass (in numbers and kilos) and the estimated biological inventory according to the group’s biomass system. We found the accumulated deviations to be reasonable. We satisfied ourselves that the disclosures in the notes about measuring of biological assets were reasonable and in accordance with the requirements in the accounting standards. Valuation of biological assets at fair value The Group measures biological assets at fair value using the requirements in IAS 41. As per 31.12.2020, the book value of biological assets is MNOK 2 546, of which MNOK 2 199 is historical cost and MNOK 347 is value adjustment. Biological assets comprise about 24 % of total assets. We challenged management’s model for calculation of fair value of biological assets by assessing the model against the criteria in IAS 41 and IFRS 13. We found that the model includes the elements that the accounting standards require. We examined whether the biomass that formed the basis for the Group’s model corresponded with the Group’s biomass OUR F IN A NC I A L R E S ULT S
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Independent Auditor's Report - Grieg Seafood ASA (4) The fluctuations in the fair value estimate that occur due to, for instance, changes in the market price, may have significant impact on the period’s operating result. The Group therefore shows the effect of fair value adjustments for biological assets as a separate line item before operating result (EBIT). We focused on the valuation of biological assets at fair value due to the size of the amount, the complexity of the calculation, because the estimate involves judgement and due to its significance on the financial result for the year. See note 2 (Accounting policies) and note 9 (Biological assets and other inventories) for further information about valuation of biological assets at fair value. system and controlled that the model made the mathematical calculations as intended. After having assured that these fundamental elements were in place, we assessed whether the assumptions that management used in the model were reasonable. We assessed the price assumptions against observable forward prices from FishPool. We challenged the assumption made with regards to when the fish is considered to be ready for harvest, the expected monthly mortality rate and the discount rate applied. We found the management’s assumptions to be reasonable and consistent with industry norm. Further, we assessed whether information about fish health and harvest deviation after the balance sheet date is reflected in the valuation. We found that the calculation model adequately reflects available information. We satisfied ourselves that the disclosures in notes 2 and 9 to the financial statements referring to valuation of biological assets appropriately reflect the valuation method and that the disclosures are according to requirements in the accounting principles. Other information Management is responsible for the other information. The other information comprises information in the annual report, except the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Board of Directors and the Managing Director for the Financial Statements The Board of Directors and the Managing Director (Management) are responsible for the preparation in accordance with law and regulations, including a true and fair view of the financial statements of the Company in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and true and fair view of the consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTS
OUR F IN A NC I A L R E S ULT S
A UDI T OR ' S R E P OR T
Independent Auditor's Report - Grieg Seafood ASA (5) In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The consolidated financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with laws, regulations, and auditing standards and practices generally accepted in Norway, including ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's or the Group's internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. • obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. OUR F IN A NC I A L R E S ULT S
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Independent Auditor's Report - Grieg Seafood ASA (6) We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements Opinion on the Board of Directors’ report Based on our audit of the financial statements as described above, it is our opinion that the information presented in the Board of Directors’ report and in the statements on Corporate Governance and Corporate Social Responsibility concerning the financial statements, the going concern assumption and the proposed allocation of the result is consistent with the financial statements and complies with the law and regulations. Opinion on Registration and Documentation Based on our audit of the financial statements as described above, and control procedures we have considered necessary in accordance with the International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements Other than Audits or Reviews of Historical Financial Information, it is our opinion that management has fulfilled its duty to produce a proper and clearly set out registration and documentation of the Company’s accounting information in accordance with the law and bookkeeping standards and practices generally accepted in Norway. Bergen, March 25 2021 PricewaterhouseCoopers AS Sturle Døsen State Authorised Public Accountant GRIEG SEAFOOD — ANNUAL REPORT 2020PART 03: OUR FINANCIAL RESULTS
PA R T 0 4
SUSTAINABILITY
REPORTING
G R I I N D E X
S TA K E H O L D E R D I A L O G U E
A U D I T O R ' S S U S TA I N A B I L I T Y R E P O R T
3 4 2
3 6 0
3 6 2
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
GLOBAL REPORTING
INITIATIVE INDEX
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
This report has been prepared in accordance with the GRI
Standards: Core option. We follow the GRI Standards to report
our economic, environmental and social performance, allowing for
greater transparency and accountability. For more information on
our approach to corporate social responsibility and transparency,
see here.
REPORT QUALITY
The quantitative information provided in this report, is mainly data we have retrieved from our production, logistics
and financial systems. Where data have been measured or estimated, this is indicated in footnotes. If we use external
data, the source is specified. Our data is reported consistently, unless otherwise indicated. Any restatement of
historical data is disclosed. All entities consolidated into the Grieg Seafood Group’s financial statement are included
in our sustainability data.
EXTERNAL VERIFICATION
To ensure the quality of our report and the information (both quantitative and qualitative) provided, it is reviewed and
verified internally. To ensure high data quality and to enhance the credibility of our sustainability reporting, it has
been verified by our independent auditor, PwC. The auditor´s opinion on sustainability reporting concludes that our
Annual Report 2020 is presented according to the GRI Standards Core Option. In addition to assessing the extent
to which our report complies with the GRI Standards Core Option, PwC has also examined selected metrics. These
metrics include data reported to the Global Salmon Initiative and our greenhouse gas emissions. Reference is made
to the auditor´s statement on sustainability reporting in the Annual Report 2020.
MANAGEMENT APPROACH
With our vision of farming the ocean for a better future, we demonstrate our commitment to corporate responsibility
by operating profitably and sustainably in a manner that conforms with fundamental ethical norms and respect for
the individual, the environment, and society as a whole. We apply the precautionary principle as our strategy for
approaching issues of potential harm when scientific knowledge is lacking. We aim to collaborate and take part in
research to develop and test new solutions. In pursuit of our vision, we will face risks and opportunities. Our risk
management is clearly connected with a multitude of stakeholder expectations, and the topics we have identified
as material.
The Board exercises oversight of strategic, operational and financial matters, including the nature and extent of
major risks. The Board and the CEO have delegated responsibility to the various business areas and functions,
ensuring that operational responsibility is an integral part for all management teams and units and departments.
From 2021, we have implemented new policies and targets which are aligned with our pillars and 2025 strategy.
Our monthly key performance indicator (KPI) report that is used both by operational management and the Board,
is based on these policies and targets. Deviations from targets are followed up monthly, and action plans are
implemented. We have a whistleblower channel, operated by EY, available for our employees and external parties
to report any unwanted behavior and breaches to our Code of Conduct.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 04: SUSTAINABILITY REPORTING
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
PILLAR
FOUNDATION
MATERIAL
TOPIC
TOPIC DEFINITION AND
BOUNDARIES
Corporate
governance &
responsible
business conduct
Strong corporate governance is essential
in achieving our objectives and acting as
a responsible organization. We need to
ensure that all employees practice sound
ethics, care for the environment, and social
wellbeing. We expect nothing less from
our suppliers through our Supplier Code of
Conduct.
CHOSEN
UN SDGS
16, 17
MANAGEMENT APPROACH
Our governance system consists of
our culture, management principles,
risk and internal control framework,
policies, procedures etc. We adhere to
our Corporate Governance Principles,
and our Code of Conduct guides our
behavior. Training in our Code is performed
regularly. External assurance and
certifications are performed in several
areas of our operations.
HEALTHY
OCEAN
Fish health and
welfare
Ensuring fish health and welfare is an
ethical responsibility and important to
ensure good growth, quality and lower cost.
It includes the full lifecycle of the salmon
as well as our use of cleaner fish.
We have policies and operational
procedures to ensure good fish health and
welfare. We adhere to regulations, and
report to authorities. KPIs to measure fish
health and welfare include survival rate
and causes for reduced survival.
Protecting wild
salmon (escape
and sea lice
control)
Avoiding fish escape incidents is important
to minimize impact on wild salmon, as well
as to protect our values.
In all our regions, we have procedures in
place, as well as high technical standards
on equipment to avoid escapes. Any
escape incident is an indicator that our
measures are not effective, and require an
investigation of our procedures.
Sea lice control is important to ensure
the health and welfare of our fish, as well
as to protect wild salmon, in particular in
Norway. In BC, the wild salmon carries sea
lice, impacting our farms each autumn.
Main target is keeping the sea lice level
below national limits. We have a policy
for sea lice management and several
approaches to keep the sea lice level
below the national limits. We adhere to
local regulations, and report sea lice levels
regularly to authorities.
14
14
14
Protecting
biodiversity
and marine
ecosystems
(local emissions,
medicine
use, wildlife
interaction)
We aim to keep emissions of feed and feces
from all our open-net pens in line with
regulations to minimize local emissions
and avoid eutrophication.
We aim to avoid using medicines to combat
sea lice or diseases affecting our salmon,
as it can impact the local environment.
We assess our sites and apply operating
procedures to ensure that local emissions
are below legal limits. Environmental
monitoring programs and tests is the main
approach to evaluate the effectiveness of
our measures.
12, 14
We have policies and procedures in place
for the use of medicines and chemicals.
We also adhere to regulations. We track
the use of medicines and chemicals, and
the result of our measures is the survival
rate and the quality of our fish.
3, 12, 14
We aim to avoid impact on wild mammals
and birds at all our seawater facilities.
We have procedures and equipment in
place to minimize the risk of injury to
wildlife. Any lethal incident is an indicator
that we need to reassess our measures.
Low use of
antibiotics
We aim to avoid use of antibiotics when
possible throughout our operations, as
resistance to antibiotics is a growing
global challenge. The risk increases with
extensive use of antibiotics in animal
protein production.
We are committed to prevent bacterial
diseases by using available vaccines
and biosecurity measures. In Norway,
effective vaccines have reduced our use
of antibiotics to zero. We have a policy for
the use of antibiotics. Use of antibiotics
must be approved by headquarter,
any use is registered and followed up
regularly.
12
3
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
PILLAR
SUSTAINABLE
FOOD
MATERIAL
TOPIC
TOPIC DEFINITION AND
BOUNDARIES
Safe and healthy
food
Grieg Seafood has full traceability in
our value chain (from roe to customer),
including records of feed given to the
salmon and treatments applied. We need
to ensure that our fish meet rigorous food
safety standards, in some cases even above
and beyond official regulations, to meet
customer expectations.
MANAGEMENT APPROACH
We have a policy for food health and
safety. We have procedures, including
traceability and strict quality control, in
place to ensure that our salmon is safe. We
operate according to standards and certify
our supply chain. Samples are taken by
external laboratories to ensure our salmon
is well below limits for environmental
contaminants.
CHOSEN
UN SDGS
3
GHG emissions
To ensure future competitiveness and do
our part in reaching the Paris Agreement,
we must reduce our greenhouse gas
emissions, while also working with
upstream suppliers and downstream
transportation to reduce our own and our
supply chain’s footprint.
We have a policy for climate action.
We have set a Science Based Target
for reduction, and have improved our
data collection for a more systematic
assessment of our emissions, for Scope 1,
2 and 3.
3, 12, 13
Plastics pollution
We aim not to pollute the environment
where we farm our salmon, and to improve
the circular economy.
Sustainable feed
ingredients (zero
deforestation,
sustainable
marine
ingredients, novel
ingredients)
We do not produce our own fish feed. Input
factors in fish feed, both marine ingredients
and plant-based ingredients, should come
from sustainable sources. Ingredients
with high-risk (fish meal and fish oil from
fisheries, Brazilian soy and palm oil) are
certified by recognized certifications. We
are currently risk assessing ingredients
used according to environmental, social
and governmental parameters.
3, 12, 13,
14, 17
12, 13, 17
We have a policy for plastic in the ocean.
We work to reduce negative impacts of
plastic waste, including using recycled
materials and recycling our materials. We
work with suppliers to assess alternative
materials.
As we do not produce our own fish feed,
we set requirements for our feed suppliers
to develop more sustainable feed. We
comply with standards, and support and/
or participate to develop new and higher
standards for sustainable sourcing of
feed raw materials. We also have a
deforestation statement.
Climate and
nature risk
Climate changes and loss of nature are
likely to present a range of challenges
to our business. We are committed to
transitioning to a low-carbon economy and
do our part to conserve and limit the impact
on climate and nature. We are committed
to transitioning to a low-carbon economy
together with the rest of the world.
Risks related to climate change and
loss of nature are part of our overall
risk management strategy. We map our
climate-related risks in accordance with
the recommendations of the Task Force
on Climate-Related Financial Disclosures
(TCFD). We are participating in a project to
develop a similar framework as TCFD for
nature.
2, 13, 14, 17
PROFIT &
INNOVATION
Economic
performance
We aim to create value for our
stakeholders, in particular our
shareholders, by focusing on sustainable
production and improve our operations.
We have a 2025 strategy, with targets
for growth and farming cost. We have a
target for the return on capital employed,
and strategies in place to ensure focus
on particular areas. We communicate our
results on a quarterly basis.
5, 8
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 04: SUSTAINABILITY REPORTING
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
PILLAR
PEOPLE
MATERIAL
TOPIC
TOPIC DEFINITION AND
BOUNDARIES
Employee health
and safety
We aim to prevent accidents, and offer
workplace conditions and other support to
help ensure the health and safety of our
employees. We expect the same from our
value chain.
Human rights,
including labour
rights
Respecting human rights is the basis for
society, and also for our business and our
value chain.
Anti- corruption
Business integrity is essential for our
business strategy. We have zero tolerance
for all forms of fraud, corruption,
facilitation payments, kickbacks, bribery,
or other misconduct in our own operations
and also in our supply chain.
MANAGEMENT APPROACH
We work systematically to safeguard our
employees, and have principles, systems,
programs and risk assessment in place.
CHOSEN
UN SDGS
3, 4, 17
We have a Human Rights policy and Code
of Conduct in place, and adhere to various
global principles and practices. We also
require our suppliers to follow our Supplier
Code of Conduct.
8, 16
Our Code of Conduct and the Supplier
Code of Conduct state the principles for
anti-corruption.
8, 16
LOCAL
COMMUNITIES
Indigenous rights
Respecting Indigenous rights is essential
as we need their permission to farm
salmon on their land. This applies in
particular to our farming operations in
Finnmark and BC.
We aim for good relations and dialogue,
and recognize the special rights of
Indigenous peoples. We support the
UNDRIP, which is under implementation
in BC.
8, 16, 17
Value creation in
local communities
Respecting and supporting local
communities are essential for our license
to operate.
Our procurement policy states that we aim
to use local suppliers. We engage in, and
support local projects.
2, 5, 8, 17
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
GRI 102: GENERAL DISCLOSURES 2016
#
DISCLOSURE
DESCRIPTION
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
ORGANIZATIONAL PROFILE
102-1
Name of the
organization
102-2
102-3
Activities, brands,
products, and services
Location of
headquarters
Grieg Gaarden, C. Sundts gate 17/19,
5004 Bergen, Norway.
102-4
Location of operations
102-5
Ownership and legal
form
102-6
Markets served
102-7
Scale of the
organization
102-8
Information on
employees and other
workers
102-9
Supply chain
102-10
Significant changes to
the organization and its
supply chain
Our main customer segment is
HoReCa (hotels, restaurants and
catering).
The Grieg Seafood Group
comprises 17 legal companies.
We follow up our operations
according to our farming regions,
the headquarter and our sales
operations. See also Note 1 for
more information.
Feed was our main supply category
in 2020, comprising 42% of our cost.
Our main feed suppliers are Skretting,
Cargill and BioMar. Other main
suppliers include Cermaq Norway
AS (external harvesting services) ,
Tytlandsvik Aqua AS (smolt), Sølvtrans
Rederi AS (wellboat services).
In 2020, we established a new farming
region in Newfoundland, Canada.
We dissolved our sales organization
Ocean Quality and established
our own fully integrated sales and
market organization. We have ceased
operations at the Isle of Skye and have
initiated a divestment process for the
Shetland assets. Therefore, Shetland
has been scoped out in both this
Annual Report and Global Reporting
Initiative Index.
No
No
No
No
No
No
No
No
No
Front page
Part 1: Our value chain
Part 2: Profit - The salmon market
34-35
124-125
Part 1: Our organization
Part 3: Grieg Seafood Group accounts - Note
1
10
220
Part 2: Profit - The salmon market
124-127
Part 1: Our organization; Key figures; Our
value chain
Part 3: Note 8
10;
14-15;
34-35
256
Part 2: People - Creating attractive jobs, Our
results
106
Part 1: Our value chain
34-35
No
Part 1: Dear Shareholder
18-19
102-11
Precautionary Principle
or approach
We respect and adhere to the
precautionary principle.
Part 4: Global Reporting Initiative Index -
Management approach
343
102-12
External initiatives
No
Part 1: Transparent reporting on our progress
42-43
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 04: SUSTAINABILITY REPORTING
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
GRI 102: GENERAL DISCLOSURES 2016
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
No
Membership in political organizations:
Norwegian Seafood Federation, The
Federation of European Aquaculture
Producers, Scottish Salmon
Producers Organisation, BC Salmon
Farmers Association, Newfoundland
Aquaculture Industry Association,
and Canadian Aquaculture Industry
Alliance.
#
DISCLOSURE
DESCRIPTION
102-13
Membership of
associations
STRATEGY
102-14
Statement from senior
decision-maker
ETHICS AND INTEGRITY
Values, principles, and
102-16
norms of behavior
102-17
Mechanisms for advice
and concerns about
ethics
GOVERNANCE
102-18
Governance structure
Decision-making on economic,
environmental, and social topics lies
with the Group management team.
STAKEHOLDER ENGAGEMENT
List of stakeholder
102-40
groups
102-41
Collective bargaining
agreements
Unionized employees for Rogaland and
Finnmark are disclosed. Labour unions
in Shetland and BC are organized
differently. Therefore, a group average
is not disclosed.
102-42
102-43
Identifying and
selecting stakeholders
Approach to
stakeholder
engagement
102-44
Key topics and concerns
raised
No
Part 1: Dear Shareholder
18-19
No
Part 1: Our vision, Our values
Part 2: People - Human rights & ethics; Anti-
corruption
11
96-97;
112
No
Part 2: People - Human rights & ethics
96-97
No
No
No
No
No
No
Part 3: Board of Directors' report; Corporate
Governance
174-193;
194-195
Part 4: Stakeholder dialogue
360-361
Part 2: People - Human rights & ethics
98
Part 4: Stakeholder dialogue
Part 4: Stakeholder dialogue
Part 4: Stakeholder dialogue; Global
Reporting Initiative Index - Management
approach
360-361
360-361
360-361
343
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
GRI 102: GENERAL DISCLOSURES 2016
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
#
DISCLOSURE
DESCRIPTION
REPORTING PRACTICES
Entities included in the
102-45
consolidated financial
statements
102-46
Defining report content
and topic boundaries
102-47
List of material topics
102-48
Restatements of
information
102-49
Changes in reporting
Shetland has been scoped out in the
majority of this report. A summarizing
chapter containing the most essential
information on our Shetland operations
is added to the Appendix of the report.
As of year-end 2020, the Group
presents the farming and sales
operations of Grieg Seafood Shetland
as discontinued operations according
to IFRS 5. Unless otherwise explicitly
mentioned, qualitative and quantitative
information disclosed in this report
refer to the continued operations of
Grieg Seafood. The figures in the the
financial statements for 2019 have
been re-presented to be comparable
to 2020 figures. No restatement is
made to other KPIs, however, reporting
boundaries has been changed in 2020,
ref. 102-46.
The topics defined as material in our
matrix have changed in relation to
the Annual Report 2019, based on
feedback from our stakeholders. More
topics are categorized as material
in 2020 than in 2019. New topics in
2020 include climate and nature risk,
and circular economy. We have also
renamed some topics, while others
have been divided into subcategories.
102-50
Reporting period
January 1 - December 31, 2020
102-51
Date of most recent
report
102-52
Reporting cycle
The Annual Report 2019 is the most
recent previous report and was
published April 8, 2020.
We report annually according to the
GRI Standards. Our quarterly reports
include some of our sustainability
metrics.
Part 3: Grieg Seafood Group accounts - Note
1
220
Part 1: Materiality matrix
Part 4: Global Reporting Initiative Index -
Management approach
Part 1: Materiality matrix
Part 4: Global Reporting Initiative Index -
Report quality
36
343
36
343
No
No
No
No
No
No
No
No
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 04: SUSTAINABILITY REPORTING
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
GRI 102: GENERAL DISCLOSURES 2016
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
#
102-53
DISCLOSURE
DESCRIPTION
Contact point for
questions regarding the
report
Chief Sustainability Officer: Tor Eirik
Homme,
tor.eirik.homme@griegseafood.com.
Group Communication Manager:
Kristina Furnes,
kristina.furnes@griegseafood.com
Global Finance Officer: Renete Kaarvik,
renete.kaarvik@griegseafood.com.
102-54
Claims of reporting in
accordance with the GRI
standards
This report has been prepared in
accordance with the GRI Standards:
Core option.
102-55
GRI content index
102-56
External assurance
The Chief Sustainability Officer seeks
external verification of sustainability
reporting according to GRI Standards
Core Option and selected sustainability
KPIs. Our sustainability reporting
has been verified by our independent
auditor PwC. Reference is made to the
auditor's statement according to ISAE
3000 at the end of the Annual Report
2020.
No
No
No
No
Part 4: Global Reporting Initiative Index
343
Part 4: Global Reporting Initiative Index
346-359
Part 4: Global Reporting Initiative Index -
External verification
343
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
TOPIC-SPECIFIC DISCLOSURES
#
DISCLOSURE
DESCRIPTION
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
CORPORATE GOVERNANCE AND RESPONSIBLE BUSINESS CONDUCT
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
103-3
Explanation of the
material topic and its
Boundary
The management
approach and its
components
Evaluation of the
management approach
GRI INDICATORS
206-1
307-1
419-1
Legal actions for anti-
competitive behavior,
anti-trust, and
monopoly practices
Non-compliance with
environmental laws and
regulations
Non-compliance with
laws and regulations in
the social and economic
area
HEALTHY OCEAN
FISH HEALTH AND WELFARE
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
GRIEG SEAFOOD INDICATORS
Survival rate at sea
Grieg
Seafood
indicator
This Grieg Seafood indicator
corresponds to the GSI indicator "Fish
Mortality" which is defined as "12
months rolling mortality = (total # of
mortalities in sea last 12 months - total
# of culled fish due to illness or similar
and not in harvest figures)/ (closing #
of fish in sea + total # of mortalities in
last 12 months + total # of harvested
fish in last 12 months + total # of
culled fish in sea) x 100".
No
No
No
Part 4: Global Reporting Initiative Index -
Management approach
342-346
Part 3: Corporate governance
Part 4: Global Reporting Initiative Index -
Management approach
192-346
Part 2: People - Anti-corruption, Our results
Part 4: Global Reporting Initiative Index -
Management approach
112
342-346
No
Part 2: People - Anti-corruption, Our results
112
No
No
No
No
No
No
Part 2: People - Anti-corruption, Our results
112
Part 2: People - Anti-corruption, Our results
112
Part 2: Healthy Ocean - Fish health and
welfare
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Healthy Ocean - Fish health and
welfare
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Healthy Ocean - Fish health and
welfare, Regional results
Part 4: Global Reporting Initiative Index -
Management approach
54-57
342-346
54-57
342-346
57
342-346
Part 2: Healthy Ocean - Fish health and
welfare, Regional results
57
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 04: SUSTAINABILITY REPORTING
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GR I R E P OR T
TOPIC-SPECIFIC DISCLOSURES
#
DISCLOSURE
DESCRIPTION
RESPONSE
OMISSION CHAPTER REFERENCE
Grieg
Seafood
indicator
Main causes for
reduced survival in
seawater
List of the main cause of reduced
survival, with loss stated in number
and tonnes of fish.
PROTECTING WILD SALMON (ESCAPE AND SEA LICE CONTROL)
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
GRIEG SEAFOOD INDICATORS
Grieg
Seafood
indicator
Number of escape
incidents and fish
escaped
Sea lice levels
Grieg
Seafood
indicator
This Grieg Seafood indicator
corresponds to the GSI indicator "Fish
escapes" which is defined as "number
of fish escape incidents and number of
fish escaped (after net recapturing)".
This Grieg Seafood indicator
corresponds to the GSI indicator "Sea
lice counts" which is defined as "sea
lice according to local action levels
set by the authorities" for Rogaland,
Finnmark and Shetland. For BC, the
sea lice levels are adjusted from
"motile" to "adult females".
No
No
No
No
No
No
Part 2: Healthy Ocean - Fish health and
welfare, Regional results
Part 2: Healthy Ocean - Escape control; Sea
lice control
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Healthy Ocean - Escape control; Sea
lice control
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Healthy Ocean - Escape control, Our
results; Sea lice control, Regional results
Part 4: Global Reporting Initiative Index -
Management approach
PAGE
57
60-61;
62
342-346
60-61;
62
342-346
61; 62
342-346
Part 2: Healthy Ocean - Escape control, Our
results
62
Part 2: Healthy Ocean - Sea lice control,
Regional results
61
PROTECTING BIODIVERSITY AND MARINE ECOSYSTEMS (LOCAL EMISSIONS, MEDICINE USE, WILDLIFE INTERACTION)
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
No
No
No
Part 2: Healthy Ocean - Local emissions; Sea
lice control; Interaction with wildlife
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Healthy Ocean - Local emissions; Sea
lice control; Interaction with wildlife
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Healthy Ocean - Local emissions, Our
results; Sea lice control, Regional results;
Interaction with wildlife, Regional results
Part 4: Global Reporting Initiative Index -
Management approach
64-67;
60-61;
63
342-346
64-67;
60-61;
63
342-346
66-67;
61; 63
342-346
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
TOPIC-SPECIFIC DISCLOSURES
#
DISCLOSURE
DESCRIPTION
GRIEG SEAFOOD INDICATORS
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
Environmental status of
our sites
Result of benthic monitoring according
to local regulations.
No
Part 2: Healthy Ocean - Local emissions, Our
results
66-67
Grieg
Seafood
indicator
Grieg
Seafood
indicator
Hydrogen peroxide
treatments
Grieg
Seafood
indicator
Active substances used
for treatments
Grieg
Seafood
indicator
Number of dead birds
and marine mammals
This Grieg Seafood indicator equals
the GSI indicator "Use of hydrogen
peroxide", which is defined as "the
amount of active pharmaceutical
ingredients (API) used (in gr) per tonne
of fish produced (LWE)", however we
have chosen to recalculate to use kg
instead of gr.
This Grieg Seafood indicator
corresponds to the GSI indicator "Sea
lice treatments" which is defined as
"the amount of active pharmaceutical
ingredients (API) used (in kg) per tonne
of fish produced (LWE)".
This Grieg Seafood indicator is
based on the GSI indicator "Wildlife
interactions" which is defined as "total
number of lethal incidents by species
divided by total number of sites" except
that we report the total number of
lethal incidents per region.
LOW USE OF ANTIBIOTICS
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
GRIEG SEAFOOD INDICATOR
Use of antibiotics
Grieg
Seafood
indicator
This Grieg Seafood indicator
corresponds to the GSI indicator
"Antibiotic Use" which is defined as
"the amount of active pharmaceutical
ingredients (API) used (in g) per tonne
of fish produced (LWE)".
No
Part 2: Healthy Ocean - Sea lice control,
Regional results
61
No
No
No
No
No
No
Part 2: Healthy Ocean - Sea lice control,
Regional results
61
Part 2: Healthy Ocean - Interaction with wild
life, Regional results
63
Part 2: Healthy Ocean, Fish health and
welfare
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Healthy Ocean, Fish health and
welfare
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Healthy Ocean, Fish health and
welfare, Regional results
Part 4: Global Reporting Initiative Index -
Management approach
54-57
342-346
54-57
342-346
57
342-346
Part 2: Healthy Ocean - Fish health and
welfare, Regional results
57
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S U S TA IN A BIL I T Y R E P OR T ING
TOPIC-SPECIFIC DISCLOSURES
#
DISCLOSURE
DESCRIPTION
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
SUSTAINABLE FOOD
SAFE AND HEALTHY FOOD
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
GRI 416 CUSTOMER HEALTH AND SAFETY 2016 & GRIEG SEAFOOD INDICATOR
416-2
Incidents of non-
compliance concerning
the health and safety
impacts of products and
services
There have been no incidents of non-
compliance concerning the health and
safety impact of our salmon in 2020.
Grieg
Seafood
indicator
Level of environmental
contaminants
The level of the environmental
contaminants PCB, PCB-like dioxins
and heavy metal, based on samples of
our salmon.
GHG EMISSIONS
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
GRI 305 EMISSIONS 2016
305-1
305-2
Direct (Scope 1) GHG
emissions
Biogenic CO2 emissions (tCO2e) is not
relevant for our operations.
Energy indirect (Scope
2) GHG emissions
305-4
GHG emissions intensity
305-5
GHG emissions
No
No
No
Part 2: Sustainable food - Safe and healthy
food
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Safe and healthy
food
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Safe and healthy
food, Our results
Part 4: Global Reporting Initiative Index -
Management approach
70-73
342-346
70-73
342-346
72-73
342-346
No
Part 2: People - Anti-corruption, Our results
112
No
No
No
No
No
No
No
No
Part 2: Sustainable food - Safe and healthy
food, Our results
72-73
Part 2: Sustainable food - Reducing carbon
emissions
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Reducing carbon
emissions
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Reducing carbon
emissions, Our results
Part 4: Global Reporting Initiative Index -
Management approach
80-85
342-346
80-85
342-346
81-85
342-346
Part 2: Sustainable food - Reducing carbon
emissions, Our results
Part 2: Sustainable food - Reducing carbon
emissions, Our results
Part 2: Sustainable food - Reducing carbon
emissions, Our results
Part 2: Sustainable food - Reducing carbon
emissions, Our results
81-85
81-85
81-85
81-85
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
TOPIC-SPECIFIC DISCLOSURES
#
DISCLOSURE
DESCRIPTION
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
PLASTICS POLLUTION
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
GRIEG SEAFOOD INDICATOR
No
No
No
Part 2: Sustainable food - Waste
management
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Waste
management
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Waste
management
Part 4: Global Reporting Initiative Index -
Management approach
88-91
342-346
88-91
342-346
88-91
342-346
Grieg
Seafood
indicator
Measure taken to
reduce the use of
plastic in the production
We will work to develop and measure
relevant KPI(s) regarding waste
management going forward.
Yes
Part 2: Sustainable food - Waste
management
88-91
SUSTAINABLE FEED INGREDIENTS (ZERO DEFORESTATION, SUSTAINABLE MARINE INGREDIENTS, NOVEL INGREDIENTS)
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
GRIEG SEAFOOD INDICATOR
Grieg
Seafood
indicator
Forage fish dependency
ratio (FFDR)
This Grieg Seafood indicator
corresponds to the GSI indicator "Use
of marine ingredients in feed", which
is defined as "forage fish dependency
ratio, calculated per calendar year".
CLIMATE AND NATURE RISK
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
No
No
No
No
No
No
Part 2: Sustainable food - Sustainable feed
ingredients
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Sustainable feed
ingredients
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Sustainable feed
ingredients, Our results
Part 4: Global Reporting Initiative Index -
Management approach
74-79
342-346
74-79
342-346
76-79
342-346
Part 2: Sustainable food - Sustainable feed
ingredients, Our results
76-77
Part 2: Sustainable food - Climate and nature
risk
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Climate and nature
risk
Part 4: Global Reporting Initiative Index -
Management approach
86-87
342-346
86-87
342-346
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TOPIC-SPECIFIC DISCLOSURES
GR I R E P OR T
RESPONSE
OMISSION CHAPTER REFERENCE
We have mapped our climate risk
according to the TCFD framework and
have conducted a scenario analysis.
Further, we are participating in a
project to develop nature risk mapping
#
103-3
DISCLOSURE
DESCRIPTION
Evaluation of the
management approach
GRIEG SEAFOOD INDICATOR
Grieg
Seafood
indicator
Mapping of climate and
nature risk including
scenario analyses
PROFIT & INNOVATION
ECONOMIC PERFORMANCE
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
GRI 201 ECONOMIC PERFORMANCE 2016
201-1
Direct economic
value generated and
distributed
PEOPLE
EMPLOYEE HEALTH AND SAFETY
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
No
No
No
No
No
No
No
No
No
PAGE
86-87
342-346
Part 2: Sustainable food - Climate and nature
risk, Our results
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Sustainable food - Climate and nature
risk, Our results
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Profit & Innovation - Economic
productivity
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Profit & Innovation - Economic
productivity
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Profit & Innovation - Economic
productivity
Part 4: Global Reporting Initiative Index -
Management approach
128-133
342-346
128-133
342-346
128-133
342-346
Part 2: Profit & Innovation - Economic
productivity
132
Part 2: People - Keeping our employees safe
Part 4: Global Reporting Initiative Index -
Management approach
108-111
342-346
Part 2: People - Keeping our employees safe
Part 4: Global Reporting Initiative Index -
Management approach
108-111
342-346
Part 2: People - Keeping our employees safe,
Our results
Part 4: Global Reporting Initiative Index -
Management approach
108-111
342-346
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
TOPIC-SPECIFIC DISCLOSURES
#
DISCLOSURE
DESCRIPTION
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
GRI 403 OCCUPATIONAL HEALTH AND SAFETY 2018
403-1
Occupational health
and safety management
system
Workers covered by this standard
(workers who are not employees
but whose work and/or workplace is
controlled by the organization) are
not a material part of Grieg Seafood's
operations. Therefore, this part of the
standard is not relevant.
No
Part 2: People - Keeping our employees safe
108-111
403-2
403-3
403-4
403-5
403-6
403-7
Hazard identification,
risk assessment, and
incident investigation
Occupational health
services
Worker participation,
consultation, and
communication on
occupational health and
safety
Worker training on
occupational health and
safety
Promotion of worker
health
Prevention and
mitigation of
occupational health and
safety impacts directly
linked by business
relationships
403-9
Work-related injuries
Workers covered by this standard
(workers who are not employees
but whose work and/or workplace is
controlled by the organization) are
not a material part of Grieg Seafood's
operations. Therefore, this part of the
standard is not relevant.
HUMAN RIGHTS, INCLUDING LABOUR RIGHTS
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
103-3
Explanation of the
material topic and its
Boundary
The management
approach and its
components
Evaluation of the
management approach
No
No
No
No
No
No
No
No
No
No
Part 2: People - Keeping our employees safe
108-111
Part 2: People - Keeping our employees safe
108-111
Part 2: People - Keeping our employees safe
108-111
Part 2: People - Keeping our employees safe
108-111
Part 2: People - Keeping our employees safe
108-111
Part 2: People - Keeping our employees safe
108-111
Part 2: People - Keeping our employees safe,
Our results
111
Part 2: People - Human rights & ethics
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: People - Human rights & ethics
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: People - Human rights & ethics, Our
results
Part 4: Global Reporting Initiative Index -
Management approach
96-99
342-346
96-99
342-346
96-99
342-346
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TOPIC-SPECIFIC DISCLOSURES
#
DISCLOSURE
DESCRIPTION
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
GRI 412 HUMAN RIGHTS ASSESSMENT 2016
412-1
Operations that have
been subject to human
rights reviews or
impact assessments
In 2020, we did not perform any human
rights reviews. During 2021, we will
conduct a due diligence process
for our supply chain, identify the
risks to prioritize, assess grievance
mechanisms and remediation.
412-2
Employee training on
human rights policies
or procedures
ANTI-CORRUPTION
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
103-3
Explanation of the
material topic and its
Boundary
The management
approach and its
components
Evaluation of the
management approach
GRI 205 ANTI-CORRUPTION 2016
205-1
205-3
Operations assessed
for risks related to
corruption
Confirmed incidents of
corruption and actions
taken
LOCAL COMMUNITIES
INDIGENOUS RIGHTS
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
No
Yes
No
No
No
No
No
No
No
No
Part 2: People - Human rights & ethics, Our
results
Part 4: Global Reporting Initiative Index -
Management approach
97
342-346
Part 2: People - Human rights & ethics, Our
results
Part 4: Global Reporting Initiative Index -
Management approach
99
342-346
Part 2: People - Anti-corruption
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: People - Anti-corruption
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: People - Anti-corruption, Our results
Part 4: Global Reporting Initiative Index -
Management approach
112
342-346
112
342-346
112
342-346
Part 3: Corporate governance
195
Part 2: People - Anti-corruption, Our results
112
Part 2: Local communities - Relationships
with local communities
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Local communities - Relationships
with local communities
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Local communities - Relationships
with local communities
Part 4: Global Reporting Initiative Index -
Management approach
116-121
342-346
116-121
342-346
116-121
342-346
S U S TA IN A BIL I T Y R E P OR T ING
GR I R E P OR T
TOPIC-SPECIFIC DISCLOSURES
#
DISCLOSURE
DESCRIPTION
RESPONSE
OMISSION CHAPTER REFERENCE
PAGE
GRI 411 RIGHTS OF INDIGENOUS PEOPLES 2016
411-1
Incidents of violations
involving rights of
Indigenous peoples
In 2020, we did not have any incidents
of violations involving rights of
Indigenous peoples.
No
VALUE CREATION IN LOCAL COMMUNITIES
GRI 103 MANAGEMENT APPROACH 2016
103-1
103-2
Explanation of the
material topic and its
Boundary
The management
approach and its
components
103-3
Evaluation of the
management approach
No
No
No
Part 2: Local communities - Relationships
with local communities
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Local communities - Relationships
with local communities
Part 4: Global Reporting Initiative Index -
Management approach
Part 2: Local communities - Relationships
with local communities, Regional results
Part 4: Global Reporting Initiative Index -
Management approach
116-121
342-346
116-121
342-346
116-121
342-346
GRI 203 INDIRECT ECONOMIC IMPACTS 2016 & GRI 204 PROCUREMENT PRACTICES 2016
204-1
Proportion of spending
on local suppliers
No
Part 2: Local communities - Relationships
with local communities
118-121
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S U S TA IN A BIL I T Y R E P OR T ING
S TA K E HOL DE R DI A L OGUE
STAKEHOLDER DIALOGUE
Our value ‘Open’ guides our stakeholder dialogue. We aim to be
open and honest about our performance and challenges, make it easy
for our stakeholders to hold us accountable, and share how we work
to improve.
Engaging and collaborating with our stakeholders helps us understand and address our most material sustainability
issues. Our stakeholders span our five pillars and gaining their trust is integral for our license to operate.
Stakeholders are chosen according to the impact they have on our business, and the economic, environmental
and social impact we have on the stakeholders. Stakeholder dialogue is also key to be able to grasp emerging
opportunities for our business, and to understand and mitigate risk.
We engage actively and continuously with our stakeholders, and always maintain an open door for stakeholder
feedback. Stakeholders frequently contact us to discuss issues. We also engage stakeholders proactively on
matters where we believe we can have significant impact, such as with feed suppliers. The continuous dialogue
with our stakeholders provides the basis for the materiality matrix. Ultimately, our stakeholders help us deliver
healthy food and make positive impacts throughout our value chain.
STAKEHOLDER
KEY TOPIC
NATIONAL
AUTHORITIES /
REGULATORS
LOCAL
AUTHORITIES /
COMMUNITIES
HOW WE
ENGAGE
Meetings, site
visits, and
correspondence.
• Sustainability
challenges
• Balanced
regulation and
long-term local
value creation
• Local
employment and
purchasing
• Contributions to
public life
• Sustainability
challenges
• Co-existence
with other local
interests
Dialogue with
special interest
groups locally,
open meetings,
site visits, and
dialogue through
mainstream
media and digital
channels.
ACTIONS
EXAMPLE
We have an open dialogue
with all official authorities
where we operate, and
collaborate on all aspects.
We welcome their efforts
to enforce regulations and
engage in constructive
dialogue.
We engaged with
national politicians,
such as the Minister
of Fisheries in
Norway, on how we
can mitigate impacts
of Covid-19 in our
production.
During 2020,
we launched
a new website
for each region,
aiming to improve
transparency and
dialogue with our
local communities.
We recognize public
concern for the oceans,
invite visitors to our farms
and participate in the
public debate about salmon
farming. We try to find
solutions to accommodate
other local interests. In
areas with Indigenous
populations, consent,
dialogue and relations with
Indigenous representatives
are especially important.
S U S TA IN A BIL I T Y R E P OR T ING
S TA K E HOL DE R DI A L OGUE
STAKEHOLDER
KEY TOPIC
STAKEHOLDER
ORGANIZATIONS/ NON-
GOVERNMENTAL
ORGANIZATIONS
• Sustainability
challenges
HOW WE
ENGAGE
Correspondence,
meetings, media
and social media.
SHAREHOLDERS,
INVESTORS, ASSET
MANAGERS AND
ANALYSTS
CUSTOMERS
EMPLOYEES
• Long-term
performance and
returns, both
on financial and
sustainability-
related
parameters
• How we utilize
opportunities and
mitigate risk
• Food safety
• Health attributes
• Quality
• Certifications
• Sustainability
challenges
Quarterly
presentations,
roadshows,
meetings, frequent
dialogue, capital
market days, and
engagement with
relevant indexes.
Customer surveys,
frequent dialogue,
audits, visits and
trade fairs.
Continuous
dialogue and
meetings, intranet,
and employee
surveys.
• Health and safety
• A good working
environment
• Personal
development
• Fish welfare and
sustainability
challenges
SUPPLIERS
• Our integrity
• That we are a fair
and predictable
partner
Dialogue,
meetings,
conferences and
correspondence.
ACTIONS
EXAMPLE
We collaborate with
and seek advice from
actors that constructively
seek to improve the
industry. That includes
several environmental
organizations and research
institutions.
We make every effort to
maintain a continuous,
open, and honest dialogue
about our strategy and
results. We have also
started engaging with
relevant indexes where we
are rated, to make sure
they give Grieg Seafood an
accurate score.
We have frequent dialogues
with our customers. We
supply them with material
for dialogue with their
own stakeholders, and
participate in initiatives
where our customers are
present.
Frequent dialogue on all
levels and initiatives for
training, education, and
development. We also
engage in dialogue with
trade unions and employee
representatives. Focus on
developing a culture in line
with our values.
Ensuring that they comply
with our Code of Conduct,
and that we have a common
understanding of ethics,
sustainability and the
delivery of goods and
services. This particularly
pertains to our suppliers of
fish feed and staffing.
We have regularly
received advice
from the Rainforest
Foundation Norway
on deforestation risk
in our supply chain.
Due to the Covid-19
pandemic, we have
completed most of
our presentations
and investor
meetings as video
conferences.
We have engaged in
Cerrado Manifesto
Signatories of
Support, which aims
to halt deforestation
in the Brazilian
Cerrado. Many of our
customers are also
signatories to the
initiative.
We use Workplace
on an almost daily
basis to inform
employees about
developments, build
culture, and cultivate
engagement.
We have quarterly
meetings with our
feed suppliers,
where we discuss
issues and
developments.
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GRIEG SEAFOOD — ANNUAL REPORT 2020PART 04: SUSTAINABILITY REPORTING
S U S TA IN A BIL I T Y R E P OR T ING
A UDI T OR ' S S U S TA IN A BIL I T Y R E P OR T
PricewaterhouseCoopers AS, Sandviksbodene 2A, Postboks 3984 - Sandviken, NO-5835 Bergen T: 02316, org. no.: 987 009 713 VAT, www.pwc.no State authorised public accountants, members of The Norwegian Institute of Public Accountants, and authorised accounting firm To the Board of Directors of Grieg Seafood ASA Independent statement regarding Grieg Seafood ASA’s sustainability reporting We have been engaged by Grieg Seafood ASA (Grieg Seafood) to examine whether the Group’s sustainability reporting is conducted in accordance with the Global Reporting Initiative (GRI) Standards Core Option, and to examine whether the sustainability KPIs is calculated, estimated and reported in accordance with the definitions and explanations provided in relation to each key performance indicator - Grieg Seafood’s GRI Index for 2020 is an overview of which principles, aspects and indicators from the GRI guidelines that Grieg Seafood use to measure and report on sustainability; together with a reference to where the material sustainability information is reported within the integrated annual report for 2020 (Annual Report 2020). We have examined whether Grieg Seafood has developed a GRI Index for 2020 and whether mandatory disclosures are presented in accordance with the Standards published by The Global Reporting Initiative (www.globalreporting.org/standards) (criteria). - Key performance indicators for sustainability are reported in “Our Scoreboard” on pages 16-17 in the Annual Report 2020. This table contains sustainability indicators that Grieg Seafood measures and controls. Grieg Seafood has defined the key performance indicators in the Scoreboard and the referenced pages therein, where they also explain how they are measured (criteria). We have examined the basis for the KPIs reported in “Our Scoreboard” and examined whether these are calculated, estimated and reported in accordance with the criteria. Tasks and responsibilities of management Management is responsible for Grieg Seafood’s Sustainability Reporting for 2020 and that the GRI Index for 2020 is developed in accordance with the Standards published by the GRI. Management is also responsible for key performance indicators for sustainability and that these are calculated, estimated and reported in accordance with the definitions given in the referenced pages in “Our Scoreboard”. Their responsibility includes to implement such internal control as management determines is necessary to enable development and reporting of the GRI Index and to enable correct calculation, estimation and reporting of the sustainability KPIs in the Annual Report 2020. Our independence and quality control We are independent of the company in accordance with applicable laws and regulations and the Code of Ethics for Professional Accountants (IESBA Code) and with the ethical requirements that are relevant to our independent statement, and we have fulfilled our ethical obligations in accordance with these requirements and IESBA Code. We use ISQC 1 - Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements and maintains a comprehensive quality control system including documented policies and procedures of the ethical standards, professional standards and applicable legal and regulatory requirements. The Auditors responsibilities Our responsibility is to express an opinion on Grieg Seafoods sustainability reporting based on our controls. We have performed our work in accordance with the Standard on Assurance Engagements ISAE 3000: “Assurance engagements other than audits or review of historical financial information". S U S TA IN A BIL I T Y R E P OR T ING
A UDI T OR ' S S U S TA IN A BIL I T Y R E P OR T
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(2) Our work involves performing procedures to obtain evidence that Grieg Seafood’s GRI Index 2020 and key performance indicators for sustainability are developed in accordance with GRI Standards Core Option and the criteria for reporting and measurement that are given in relation to “Our Scoreboard” containing key performance indicators. The procedures selected depend on our judgement, including assessments of the risks that the sustainability reporting as a whole are free from material misstatement, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation of the GRI Index 2020 and sustainability KPIs. Therefore, we design procedures that are appropriate to the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. Our control also includes an assessment of whether the applied criteria are appropriate and an assessment of the overall presentation of the GRI Index 2020 and sustainability KPIs. Our controls include meetings and interviews with representatives from Grieg Seafood that are responsible for the key areas covered by the sustainability reporting, evaluating internal controls and procedures for reporting key performance indicators for sustainability, collecting and reviewing relevant information that supports the calculation and estimation of key performance indicators, evaluating the completeness of the key performance indicators and controlling whether the calculation and estimation of the key performance indicators are accurate. We believe that the evidence we have obtained is sufficient and appropriate to provide basis for our conclusion. Conclusion In our opinion the GRI Index 2020 is, in all material respects, developed and presented in accordance with the requirements of the Global Reporting Initiative Standards Core Option. Based on the procedures performed and evidence obtained, nothing has come to our attention that causes us to believe that the calculation, estimation and reporting of the sustainability key performance indicators presented in “Our Scoreboard” in the Annual Report for 2020 are not prepared, in all material respects, in accordance with the definitions and explanations provided in relation to each key performance indicator presented in “Our Scoreboard”. Bergen, March 25 2020 PricewaterhouseCoopers AS Hanne Sælemyr Johansen State authorised public accountant GRIEG SEAFOOD — ANNUAL REPORT 2020PART 04: SUSTAINABILITY REPORTING
APPENDIX
S H E T L A N D
3 6 6
SHETLAND
SUSTAINABILITY KPIs
PILLAR
KPI
TARGET
2016
2017
2018
2019
2020
PROFIT &
INNOVATION
HEALTHY
OCEAN
Harvest volume (tonnes GWT)
15 000 tonnes in 2021
13 541
12 056
11 924
11 273
15 705
EBIT / kg (NOK)
ASC certification
Survival rate in freshwater
Survival rate at sea
93% by 2022
13.0
n/a
85%
83%
5.7
n/a
87%
89%
2.8
n/a
93%
83%
-12.4
-19.2
n/a
95%
89%
n/a
89%
81%
Use of antibiotics
(g per tonne LWE) *
No use of antibiotics
0.93
1.65
13.90
29.18
6.17
Use of hydrogen peroxide
(kg per tonne LWE) *
Minimize use of pharmaceutical
treatments
75.96
82.72
32.58
12.23
21.45
Sea lice treatments - in feed
(g per tonne LWE) *
Minimize use of pharmaceutical
treatments
0.47
0.22
0.21
0.17
0.18
Sea lice treatments - in bath
(g per tonne LWE) *
Minimize use of pharmaceutical
treatments
1.99
5.70
2.98
1.79
2.95
Escape incidents (# of fish)
Zero escape incidents
2 (1 446)
0 2 (22 212)
2 (4 500)
Dead birds
Minimize impact on wildlife
Dead marine mammals
Minimize impact on wildlife
SUSTAINABLE
FOOD
Carbon emissions
(kgCO2e per tonne GWT)
35% reduction (from 2018)
in total emissions by 2030
Scope 1 + 2 location based
Scope 3
n/a
n/a
n/a
n/a
0
1
857
n/a
High quality product
93% superior share
93%
93%
0
0
2
0
0
0
0
1 053
1 065
689
n/a
94%
n/a
1 057
94%
82%
Biological feed conversion ratio
(bFCR)
Economic feed conversion ratio
(eFCR)
PEOPLE
Employees
1.21
1.26
1.25
1.28
1.25
1.46
1.50
1.44
1.47
1.63
169
186
192
189
211
Absence rate
Below 4.5%
2.7%
3.2%
2.3%
3.4%
3.1%
LTIR
LOCAL
COMMUNITIES
Local procurement
10
n/a
13
n/a
24
n/a
15
36
70%
76%
* Amount of active pharmaceutical ingredients (APIs) used (in gr or kg) per tonne of fish produced (LWE).
n/a: Data not available.
Grieg Seafood Shetland Ltd farms salmon in Shetland and the Isle of
Skye in Scotland. We have 21 active seawater sites and one freshwater
location. We process our salmon at our own facility in Lerwick.
OPERATIONAL PRIORITIES
A total of 15 705 tonnes was harvested in 2020, compared to 11 273
tonnes in 2019, corresponding to an increase of 39%. This increase
The aquaculture industry in Shetland has experienced a variety of
is mainly due to significant volumes harvested from the Isle of
biological challenges over the years. Grieg Seafood Shetland has
Skye, where harvest was accelerated due to biological challenges
taken several measures the last years to ensure strong biosecurity
combined with jellyfish.
and improved fish health and welfare, such as extended fallowing
areas coordinated with neighboring farmers, use of aeration
Revenues amounted to NOK 851 million, compared to NOK 732
systems, sea lice skirts and freshwater treatments. However, the
million in 2019. The increase is due to higher harvest volume,
farming cost have remained high, especially in our Skye farms. In
however offset by lower market prices, lower superior share (82%
November 2020, as part of our growth strategy, we announced that
in 2020 compared to 94% in 2019) and price achievement on small
we will divest our investment and operations in Shetland to focus
fish from our sites in Isle of Skye.
on operations with growth potential in our other regions. Although
Grieg Seafood Shetland is presented as discontinued operations in
Biological conditions in Shetland have been challenging in the
our financial statements, we continue the operational focus on fish
past year due to gill-related diseases, algae, and plankton, in
health and welfare and takes measures to fight biological issues.
combination with high sea lice pressure. As a result of healthier
OPERATIONAL RESULTS
and more robust smolt,
improved vaccine strategies and
continuous improvement of the handling and treatment of fish at
sea, the 12-month survival rate improved in 2019, but due to the
biological issues in 2020, the survival rate ended at 81% in 2020.
As per 31 December 2020, Grieg Seafood Shetland is classified
The cost on our sites in Isle of Skye was significantly impacted by
as held for sale in the Group’s consolidated financial statements,
extraordinary mortality write-downs and high cost on harvested
together with the sales operations of the UK, thus not included
fish, in addition to shut-down cost. Production on mainland
in the segment information of the Group (Group Accounts,
Shetland developed positively during the year. Loss of production,
Note 8). The financial figures in the following are disclosed for
combined with extensive efforts to mitigate biological challenges,
the operating segment Grieg Seafood Shetland, and thus not
impacted the cost per kg of salmon harvested in 2020.
comparable with the financial figures for the “Shetland” disposal
group disclosed in the Group Accounts Note 5, as the “Shetland”
disposal group figures include the activity generated by the sales
entity in the UK and intercompany balances and transactions
have been eliminated. Furthermore, as per requirement in IFRS
5, amortization and depreciation on tangible and intangible assets
cease when classifying the Shetland assets as held for sale, while
for the figures presented herein, amortization and depreciation
on such assets are included in EBIT before fair value of biological
assets.
G
R
I
E
G
S
E
A
F
O
O
D
—
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
0
A
P
P
E
N
D
I
X
P
A
G
E
3
6
6
—
3
6
7
LOCAL COMMUNITY SUPPORT
205
employees
772 200 000NOK
purchase from local suppliers in Scotland
76%
of total purchase was from local suppliers
114 000NOK
donated to local cultural and sports activities
5 220 000NOK
£24.75/£27.50 per tonne harvested salmon from sites
in Shetland and Isle of Skye, respectively, contributed in
local tax to the Crown Estate
FIGURE 4.1
RESULTS FOR SHETL AND
SHETLAND
2016
2017
2018
2019
Harvest (tonnes GWT)
13 541
12 056
11 924
11 273
Revenue (NOK million)
EBIT (NOK million)
EBIT / kg (NOK)
859.8
176.6
13.0
745.9
799.9
68.7
5.7
33.8
2.8
731.6
-67.2
-12.4
2020
15 705
851.5
-300.9
-19.2
FIGURE 4.2
EBIT AND HARVEST SHETL AND
Harvest (tonnes GWT)
EBIT/kg (NOK)
20 000
15 000
10 000
5 000
0
Harvest (tonnes GWT)
EBIT/kg (NOK)
12
8
4
0
-4
-8
-12
-16
-20
2016
2017
2018
2019
2020
SUSTAINABILITY REPORTING G
R
I
E
G
S
E
A
F
O
O
D
—
A
N
N
U
A
L
R
E
P
O
R
T
2
0
2
0
A
P
P
E
N
D
I
X
P
A
G
E
3
6
8
—
3
6
9
SUSTAINABILITY REPORTING
A NN UA L R E P O R T 2 0 2 0
R E S H A P ING OUR BU S INE S S T O ME E T T HE F U T UR E