Grieg Seafood
Annual Report 2023

Plain-text annual report

2023 OUR ORGANIZATION GRIEG SEAFOOD FARMING We farm Atlantic salmon (Salmo Salar) in Rogaland and Finnmark in Norway, and in British Columbia and Newfoundland in Canada. We have hatcheries, sea farms and processing plants. Newfoundland is a greenfield project, where we transferred our first fish to sea in 2022 and started harvesting towards year end 2023. GRIEG SEAFOOD SALES We have our own integrated sales organization, with offices in Norway, Canada and the USA. BERGEN (HQ) ROGALAND FINNMARK BRITISH COLUMBIA NEWFOUNDLAND 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, we can 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. Harvested volume 2023 Harvested volume target PART 01 - OUR FOUNDATION For more information on the Group structure, refer to Note 1 in the Group Accounts. 2 OUR VALUE CHAIN INPUT NATURAL CAPITAL • Public natural resources: we lend sea TECHNOLOGICAL CAPITAL • Farming equipment and FINANCIAL CAPITAL • Trust and investment HUMAN CAPITAL • People (experience, from investors ideas, passion) areas for our sites and technology • Access to capital • Culture POLITICAL/SOCIAL CAPITAL • Our license to operate • Trusted among our key fresh water for our RAS facilities. • Privately owned natural resources: Plant- based and marine feed ingredients, and salmon eggs. • Corporate governance stakeholders • Favorable political conditions OUR BRANDS SKUNA BAY Skuna Bay is our high-end HoReCa brand for the US market. Skuna Bay fish is preferred by some of America’s top chefs, and is regularly served at the James Beard Award. Read more here. BREEDING FRESHWATER FARMING POST-SMOLT SEAWATER FARMING HARVESTING SALES AND DISTRIBUTION VALUE ADDED PROCESSING RETAIL / HORECA OUTCOME In Rogaland, we have a In all of our regions, we As part of our post-smolt The salmon live and grow We have harvesting plants We have our own global We have a small share Our salmon is found in broodstock operation have land based RAS strategy, we keep the in the sea until they reach a in Rogaland and Finnmark. sales and market of VAP in Norway and retail stores or on the where we breed for specific freshwater facilities, where salmon longer on land harvestable size of 4–5 kg. We use a harvesting vessel organization with local BC. We will form closer menu at restaurants or traits, such as strong the eggs are hatched and in all regions to shorten in BC and perform primary offices in the countries partnerships in the market hotels. Currently, we have health or resistance to sea the salmon spend at least the time in seawater, processing at a local plant. we farm salmon and in and establish our own VAP the HoReCa brand Skuna lice and diseases. the first year. reducing risk of biological challenges. In Rogaland, the average size of the smolt transferred to the sea in 2014 was 90 grams, and we aim to increase this to 1 kg in 2027. PART 01 - OUR FOUNDATION In Newfoundland, we have selected markets, to facility in Norway, and Bay in Canada. established cooperation with support growth and the increase the value of our a local plant. downstream strategy. salmon through VAP. 1 200 000 HEALTHY MEALS PER DAY* *Based on our harvest volume in 2023, with 68% edible yield from live weight, and servings of 125 grams. 3 OUR BUSINESS OPPORTUNITY AQUACULTURE IN A SUSTAINABLE GLOBAL FOOD SYSTEM Food systems are responsible for 70% of the water extracted from nature, cause 60% of biodiversity loss, and generate up to a third of human greenhouse gas emissions. A complete transformation of our global food system is needed during the next decades. 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. THE CHALLENGES WE MUST SOLVE • Ensuring co-existence with nature and other species TOMORROW’S SUSTAINABLE GLOBAL FOOD SYSTEM • Improving fish welfare • Finding sustainable feed ingredients • Cutting carbon emissions • Recycle resources • Promoting human rights • Healthy and nutritious food for nine 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 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. PART 01 - OUR FOUNDATION FARMED SALMON NUTRIENT PROFILE FIGURE 1.1 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. • 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. FIGURE 1.2 EDIBLE YIELD, WATER CONSUMPTION AND CARBON FOOTPRINT EDIBLE YIELD 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. WATER CONSUMPTION Farmed salmon has a low water consumption compared to other animal proteins. 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. FARMED ATLANTIC SALMON CHICKEN PORK LAMB BEEF 68% 46% 52% 38% N/A 2 000 4 300 6 000 N/A 15 400 0.60 0.88 1.30 N/A 5.92 Source: GSI 4 CONTENT 01 02 03 04 OUR FOUNDATION OUR OPERATIONAL RESULTS OUR FINANCIAL RESULTS OUR INTEGRATED REPORTING HIGHLIGHTS KEY FINANCIAL FIGURES OUR SUSTAINABILITY SCOREBOARD CEO LETTER OUR BUSINESS STRATEGY OPERATIONAL FOCUS AREAS SUSTAINABLE FOUNDATION 7 8 9 10 11 13 16 PROFITABLE OPERATIONS EU TAXONOMY GRIEG SEAFOOD ROGALAND GRIEG SEAFOOD FINNMARK GRIEG SEAFOOD BRITISH COLUMBIA GRIEG SEAFOOD NEWFOUNDLAND OUR CERTIFICATIONS SALES & MARKET CLIMATE ACTION SUSTAINABLE FEED INGREDIENTS PEOPLE 20 23 27 31 35 40 43 44 47 50 52 BOARD OF DIRECTORS’ REPORT CORPORATE GOVERNANCE GRIEG SEAFOOD GROUP ACCOUNTS GRIEG SEAFOOD ASA ACCOUNTS AUDITOR’S REPORT ALTERNATIVE PERFORMANCE MEASURES 60 75 84 123 139 142 GLOBAL REPORTING INITIATIVE (GRI) INDEX STAKEHOLDER DIALOGUE THE SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB) INDEX AUDITOR’S SUSTAINABILITY REPORT HISTORY AND FUTURE 146 154 155 156 157 OUR FOUNDATION Farming the ocean comes with a responsibility. We are dedicated to providing healthy seafood to people all over the world while reducing our footprint and improving fish welfare. People, partnerships, technologies and innovations will help us get there. This is our tiny way of making the world a better place. PART 01 HIGHLIGHTS KEY FINANCIAL FIGURES OUR SUSTAINABILITY SCOREBOARD CEO LETTER OUR BUSINESS STRATEGY OPERATIONAL FOCUS AREAS SUSTAINABLE FOUNDATION 7 8 9 10 11 13 16 HIGHLIGHTS 2023 GROUP • Harvested volume of 72 015 tonnes • In the process of identifying long-term partners for the development of the Canadian • Operational EBIT of NOK 780 million, with Operational EBIT/kg of NOK 10.8 farming operations • Net profit after tax of NOK 560 million and earnings per share equal to NOK 5.0 • Continued focus on sustainable farming certification with 34 out of 40 eligible sites • Salmon market remained strong • Results impacted by historical biological events • Milestone achieved with first harvest ever in Newfoundland ASC certified, representing 81% of the harvested volume in 2023 • Dividend proposal of NOK 1.75 per share, subject to approval by the Annual General Meeting in June 2024 • Improved processing capacity via partnerships and expanded availability of Value- • Ranked third by the Coller FAIRR Protein Producer Index, acknowledging Grieg Added Products (VAP) Seafood as one of the world’s top sustainable protein producers • Approved a NOK 130 million investment in a secondary processing facility with a • Received a Leadership (A-) score from CDP for transparency and actions on climate capacity of at least 10 000 tonnes at Oslo airport change risks, reinforcing the Group’s environmental commitment • Identified initiatives to reduce costs by NOK 150 million over the next two years as part of the ongoing improvement program ROGALAND • Harvested volume of 25 980 tonnes • Best ever Operational EBIT/kg of NOK 28.3 due to a strong market and good price achievement • Seawater survival rate of 94% despite challenges posed by ISA in the beginning of the year, attributed to post-smolt and preventative sea lice measures • Average smolt weight upon sea transfer at 460 grams BRITISH COLUMBIA • Harvested volume of 17 682 tonnes • Operational EBIT/kg of NOK -5.3 due to a combination of spot prices in the North American market under pressure and one-off farming cost • Good seawater production with a survival rate of 91% • All eleven sites ASC certified, representing 100% of the harvested volume • Reduced use of sea lice treatments due to a successful integration of preventive • No antibiotic used owing to our efforts to ensure robust fish health, including vaccine measures and mechanical treatments administration • 65% of the harvested fish groups in Rogaland required no sea lice treatments, attributed to post-smolt strategies and other preventative measures • Six out of eleven sites ASC certified, representing 74% of the harvested volume • No escapes • 53% of farms powered by renewable energy • Respect the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) • Continued constructive dialogue with Canadian government on "transition" into better farming practices FINNMARK PART 01 - OUR FOUNDATION • Harvested volume of 25 170 tonnes • Operational EBIT/kg of NOK 13.0, negatively impacted by a low superior share • Biological challenges had a significant impact on seawater production • Executing on post-smolt strategy with the construction of 3 000 tonnes capacity post- smolt facility in Adamselv, Finnmark • 17 out of 18 active sites ASC certified, representing 86% of the harvested volume • 57% of farms powered by renewable energy NEWFOUND- LAND • Successfully conducted the first harvest with a total volume of 3 184 tonnes • Superior share of 97% and average harvest weight at 4.7 kg • Continued good seawater production with 12-months survival rate of 95%, driven by favorable biological conditions and high-quality smolt • 2.5 million smolt transferred to sea in 2023. Smolt performing well and in good health • Ground works for expansion of the post-smolt facility developing according to plan 7 KEY FINANCIAL FIGURES FIGURE 1.3 SALES REVENUE BY MARKET Continental Europe UK North America Asia FIGURE 1.4 HARVEST VOLUME 2023 FIGURE 1.5 SALES REVENUE 2023 FIGURE 1.6 OPERATIONAL EBIT 2023 4% 4% 25% 36% 25% 736 39% 327 -94 -146 35% 33% Rogaland Finnmark British Columbia Newfoundland KEY FIGURES NOK MILLION Operational 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 Harvested volume (tonnes GWT) 72 015 84 697 75 601 71 142 71 700 74 623 62 598 64 727 65 398 64 736 Revenue/kg (NOK/kg) 1 Farming cost (NOK/kg) 1 Other costs incl. ownership and headquarters costs/kg (NOK) 1 Operational EBIT/kg 1 Financial Sales revenues Operational EBITDA 1 Operational EBIT 1 EBIT (Earnings before interests and taxes) Profit/loss for the year Cash flow from operations Capital structure NIBD according to covenants requirement 1 NIBD/Harvest (NOK) 1,2 Equity % Gross investments 1,3 Profitability Return on Capital Employed (ROCE) 1 Dividend per share (NOK) Earnings per share (NOK) Total market value (Oslo Stock Exchange) 82.7 70.2 1.7 10.8 7 020 1 334 780 981 560 -302 75.8 52.7 2.5 20.5 7 164 2 191 1 739 1 498 1 154 1 584 55.7 47.2 2.7 5.9 52.8 47.0 2.5 3.3 4 599 4 384 818 442 941 604 601 602 233 -57 -316 412 56.9 40.5 1.3 15.0 4 756 1 384 1 077 822 599 1 193 58.3 43.1 0.5 14.7 7 500 1 334 1 099 1 355 997 820 58.3 43.4 0.4 14.5 7 017 1 106 904 813 601 709 3 873 1 739 1 869 3 679 1 939 1 690 1 284 53.8 49% 880 7% 4.5 5.0 20.5 50% 679 23% 3.0 10.3 24.7 52% 570 6% 0.0 10.7 42.4 41% 979 3% 0.0 -4.8 23.4 46% 667 22.6 48% 733 20.5 47% 553 19% 22% 24% 4.0 5.6 4.0 8.8 4.0 5.0 59.1 39.7 1.4 18.0 6 545 1 342 1 168 1 683 1 222 953 906 14.0 47% 255 33% 1.5 10.7 42.2 37.7 3.8 0.7 39.4 35.2 -1.1 5.3 4 609 4 100 261 48 81 4 367 484 343 219 144 157 1 569 1 566 24.0 38% 322 1% 0.5 -0.1 24.2 42% 312 10% 0.0 1.3 7 748 8 917 9 427 9 643 15 666 11 423 8 068 9 123 3 462 3 182 Ex. Shetland. The Shetland assets was sold 15 December 2021. Figures up to and including 2018 include Shetland, while 2019 and after do not include Shetland. 1 See more information in the Alternative Performance Measures of this report. 2 Net interest-bearing liabilities according to covenant divided by last 12 months harvested volume. For 2020, last 12 months harvest include Shetland (as Shetland was not sold as at 31 December 2020, and NIBD as 31 December 2020 was impacted by our Shetland operations). 3 Incl. financial lease investments. (according to IFRS in force prior to 1 January 2019) PART 01 - OUR FOUNDATION 8 OUR SUSTAINABILITY SCOREBOARD The sustainability scoreboard is a set of some of the key performance indicators, where we track our performance. THE COLORS INDICATE ● Within target ● On track to meet our target ● Unsatisfactory result 1) Number of sites certified and % of harvested volume. Newfoundland not yet eligible for certification. 2) 12 months rolling survival rate calculated according to the GSI standards. 3) Amount of active pharmaceutical ingredients (APIs) used (gr/kg) per tonne of fish produced (LWE). 4) As of 01.01.2021, the Government of Canada - Department of Fisheries and Oceans Canada (DFO) changed the calculation formula for the API of hydrogen peroxide from Paramove 50 from 1 L (Paramove 50) * 1.15 (density) * 0.45 (concentration) = 1 kg H2O2 to 1 L (Paramove 50) * 1.19 (density) * 0.49 (concentration) = 1 kg H2O2, which corresponds to the method used in Norway. Previous years (2019 - 2020) have not been recalculated. 5) LTIR figures are not scored since an LTIR target has not been defined in order to avoid under-reporting of incidents. PART 01 - OUR FOUNDATION PILLAR KPI PROFIT & INNOVATION Return on capital employed Farming cost per kg TARGET 12% p.a. Cost leader in our operating regions Rogaland (NOK) Finnmark (NOK) British Columbia (CAD) Newfoundland (CAD) HEALTHY OCEAN Harvest volume (tonnes GWT) ASC certification1) 82 000 tonnes in 2023 All sites by 2023 Rogaland Finnmark British Columbia Survival rate at sea2) 95% by 2023 Rogaland Finnmark British Columbia Newfoundland Use of antibiotics (g per tonne LWE)3) No use of antibiotics Rogaland Finnmark British Columbia Newfoundland Sea lice treatments (g per tonne LWE)3) Minimize use of pharmaceutical treatments Rogaland Finnmark British Columbia Newfoundland Use of hydrogen peroxide (kg per tonne LWE)3) Minimize use of pharmaceutical treatments Rogaland Finnmark British Columbia4) Newfoundland Escape incidents Zero escape incidents in 2023 Rogaland Finnmark British Columbia Newfoundland 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 Newfoundland 93% superior share Absence rate Below 4.5% Rogaland Finnmark British Columbia Newfoundland Lost time incident rate 5) Rogaland Finnmark British Columbia Newfoundland SUSTAINABLE FOOD PEOPLE LOCAL COMMUNITIES Workplace culture Above average score in Great Place to Work survey Support our local communities Collaborate and contribute to local community STATUS ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 2023 7% 60.4 64.4 11.2 12.1 2022 23% 48.2 47.3 9.1 n/a 2021 6% 44.6 43.7 8.8 n/a 2020 3% 42.1 44.1 8.0 n/a 2019 19% 35.9 37.7 8.3 n/a 72 015 84 697 75 601 71 142 71 700 6 (74%) 17 (86%) 11 (100%) 5 (53%) 17 (81%) 7 (82%) 0 18 (100%) 12 (47%) 0 15 (88%) 11 (99%) 94% 92% 91% 95% 0.0 2.6 32.6 0.0 0.1 0.9 0.3 0.0 0.0 7.7 17.4 0.0 0 0 2 (301) 0 434 5 306 79% 58% 90% 97% 3.9% 8.0% 3.9% 1.4% 32 22 8 9 92% 91% 91% n/a 0.0 6.8 34.8 0.0 1.7 0.8 0.2 0.0 0.0 6.5 12.8 0.0 0 92% 95% 92% n/a 0.0 6.0 41.7 n/a 4.4 0.5 0.3 n/a 1.6 2.4 35.7 n/a 0 1 (2 878) 1 (4 352) 0 n/a 359 4 120 84% 86% 85% n/a 5.6% 9.7% 6.4% 1.6% 25 21 9 0 2 (4) n/a 429 4 843 81% 82% 87% n/a 3.0% 8.7% 5.6% 1.3% 42 22 6 5 90% 92% 90% n/a 0.0 0.0 62.3 n/a 0.0 1.0 0.2 n/a 7.2 3.6 46.6 n/a 0 0 0 n/a 456 5 720 85% 69% 86% n/a 3.0% 5.5% 6.8% n/a 9 28 36 n/a 0 10 n/a 93% 96% 88% n/a 0.0 0.0 87.0 n/a 0.0 0.3 0.5 n/a 11.9 0.0 6.0 n/a 0 0 0 n/a 431 6 359 75% 86% 86% n/a 3.5% 4.9% 2.0% n/a 15 22 35 n/a 74% (global) 85% (global) 85% (global) 84% (global) 79% (global) yes yes yes yes yes 9 CEO LETTER DEAR SHAREHOLDER In recent years, Grieg Seafood has achieved several strategic Expanding our post-smolt strategy is paramount to enhancing While the underlying biology shows signs of improvement, we milestones, positioning the company for future value creation. biology, fish health, and welfare and to minimize interactions initiated an improvement program in 2023 to comprehensively We have repositioned Grieg Seafood to Norway and Canada with wild salmon across all our regions. We have observed review all aspects of our operations. The aim is to identify areas where we see significant potential for sustainable growth and significant biological improvements from post-smolt operations where we can enhance profitability and streamline costs. Our aim to become a reliable supplier to key markets. In 2022, we in Rogaland, where we have been pioneering this production target is to achieve cost reductions of approximately NOK 150 initiated sea farming operations in Newfoundland, with the first method since 2019. Notably, we have observed reduced mortality million over the next two years. harvests commencing towards the end of 2023. This development rates during the ocean phase for larger post-smolt groups, along allows us to cater to the burgeoning North American market with a marked improvement in sea lice control achieved with In addition to pursuing short-term return opportunities in with locally farmed salmon from both Canadian coasts, reducing preventative measures and no need for treatments. In Rogaland Finnmark, we recognize the potential for robust and sustainable reliance on expensive and carbon-intensive air freight. we will open the second post-smolt facility Årdal Aqua at the end growth in British Columbia and Newfoundland, particularly of 2024, allowing us to increase the transfer size on more fish in Eastern Canada. This region presents significant untapped The demand for salmon remains robust, driven by increasing groups in the region. We have also commenced the construction growth potential and is strategically located near one of the consumer interest in healthy and sustainably sourced proteins. of a post-smolt unit at our freshwater facility in Finnmark. This largest and fastest-growing markets. We are committed to The establishment of our in-house sales organization has proved facility is expected to add 3 000 tonnes of post-smolt to the realizing the sustainable growth potential in Canada. However, beneficial, facilitating a more integrated approach between region starting from 2026/2027. We anticipate witnessing similar the development of Canadian operations requires substantial production and sales and enhancing the value derived from our biological improvements in Finnmark as those observed in investments, especially given the resource tax and overall fish. We continue to expand our presence in value-added product Rogaland. (VAP) markets, with 5% of our harvested volume sold as VAP inflation, necessitating greater capital discipline. To advance our growth journey in Canada, we are actively seeking long- in 2023. Additionally, we have committed to a NOK 130 million Despite challenges such as outbreaks of ISA leading to term partners to participate in the development of our Canadian investment in a new secondary processing facility at Oslo airport, early harvests in the initial months of 2023, Rogaland has operations. The process of identifying potential partners is with a capacity of 10 000-12 000 tonnes, slated to be operational demonstrated robust biological production with high survival ongoing. by 2025. rates, and achieved their best ever Operational EBIT per kilo. Following a successful vaccination program for all smolt, we are It has been a tough year, and my colleagues have worked hard However, I am not satisfied with our 2023 results. Our results pleased to see that there is currently no PD or ISA in Rogaland, in all regions to implement improvement measures and move were significantly affected by poor biological performance which have previously been some of our largest challenges. forward. I want to thank them all for their efforts. I am confident in Finnmark. Biological challenges have impacted survival that we are on the right path and that we will see results during rates and operational efficiency, resulting in reduced volumes, In British Columbia, seawater production has remained stable. 2024. I also believe that farmed salmon will play an increasingly increased handling costs, and lower price realization. The Spiro Despite seasonal challenges associated with sea lice and important role in producing food from the ocean in the future, parasite alone is estimated to have caused a total loss of NOK occurrences of low dissolved oxygen, we have successfully especially if the seafood industry keeps innovating and improving. 900 million since its detection in 2022 at our freshwater facility stabilized survival rates through mitigating measures. Moreover, And we have no intention of doing anything but that. in Finnmark, with most of the impact already realized. We have mortality attributed to algal blooms has progressively declined taken measures to address the challenges both in the short and over the past years, thanks to our initiatives focusing on algae medium term. We have implemented measures to prevent Spiro mitigation, digital monitoring, and aeration systems, reaching a from entering our facility again with good results. All fish that low of 1.1% in 2023. was transferred to the ocean farms in 2023 were Spiro free, and we expect impact from Spiro to cease after we have harvested out the last fish groups from the 2022 generation during the first half of 2024. We are also turning every stone to mitigate winter ulcers, including new vaccines and probiotic treatments to enhance fish health. However, due to the long production cycle, it will take some time to realize the positive impacts of these measures. PART 01 - OUR FOUNDATION In Newfoundland, we successfully conducted the first harvest with a volume of 3 184 tonnes, a superior share of 97% and favorable reception from the North American market. The seawater production in Newfoundland continues to be strong with a 12-month survival rate of 95%. ANDREAS KVAME CEO 10 OUR BUSINESS STRATEGY Our business strategy targets three key strategic objectives for continued business development. The development and application of increasingly sustainable farming practices underpins all areas of the strategy. GLOBAL GROWTH Ambition of a harvest volume of 120 000-135 000 tonnes COST IMPROVEMENT Cost leader in our operating regions VALUE CHAIN REPOSITIONING Evolve from raw material supplier to strategic partner SUSTAINABILITY We aim to achieve production growth, cost improvements and to reposition the company in the value chain. Sustainability is the foundation of all areas of the strategy. STATUS AND ACTIONS TAKEN IN 2023 GLOBAL GROWTH Our ambition is to increase harvest to 120 000-135 000 tonnes. Growth will mainly be driven by improved utilization of current operations, in addition to continue to develop Newfoundland as our new farming region. We will focus on post-smolt investments, target new licenses and seize opportunities within new technology. In some regions, there is also potential for continued improvement of site utilization. We also participate in new growth initiatives, M&As, joint ventures and greenfield projects, and seek cooperation with farmers in existing areas. STATUS • In 2023, we harvested 72 015 tonnes compared to 84 697 GOING FORWARD • We expect further growth to come from increased utilization tonnes in 2022. Our original harvest guiding for 2023 was of our seawater licenses by moving more growth to land 87 000 tonnes. Biological events impacted our harvested through our post-smolt program. We have come far with good volume, in particular in Finnmark where harvest ended 8 000 results from our post-smolt strategy in Rogaland, and aim to tonnes lower than expected. increase post-smolt capacity in Finnmark and BC as well. • We successfully started harvesting from our Newfoundland • Better utilization of our seawater licenses, by improving region in 2023. transferred our first smolt to sea farms in biosecurity, fish health, welfare and survival rates, is also 2022, and expect to harvest 5 000 tonnes towards the end of expected to secure on-growth and harvest volumes. Flexibility 2023. is a requirement to achieve better utilization of our capacity, • We reached a milestone in the last quarter of 2023, when we and we are continuously looking for opportunities to secure started the first harvesting in our Newfoundland region. We access to new locations. have good biological results with high survival and high share of superior quality. Following the announcement of a resource tax on the salmon • We invested NOK 525 million in growth initiatives in 2023. industry in Norway in 2022, we put all investments on hold Close to 70% of the investments were related to the until most of the technical details of the tax were clear to preparation, digitalization and expansion of seawater locations understand how the additional 25% resource tax would impact in Newfoundland. We also initiated construction of the new funds available for investments. Based on our experience with post-smolt unit at Adamselv in Finnmark. The unit will add post-smolt in Rogaland, we have chosen to prioritize post-smolt 3 000 tonnes of post-smolt capacity, with the first post-smolt expansion in Finnmark as the major investment as it is expected expected to be transferred to sea summer of 2026. We also to drive biological control, earnings and sustainability. In parallel continued installation of barrier systems in BC. These allow with the short-term return opportunities in Finnmark, we are us to protect the fish at sea during periods of challenging well positioned for robust and sustainable growth in British conditions, which we expect will increase survival rates going Columbia and Newfoundland. Canada, and in particular Eastern forward. Canada, is one of the few salmon farming regions globally with • We have a 44% shareholding in Årdal Aqua, a land-based a significant untapped growth potential and proximity to one facility which is expected to produce at least 4 500 tonnes of of the largest and fast-growing markets. We aim to realize the post-smolt annually from 2025, with the potential to raise potential of sustainable growth in Canada. However, developing fish to harvestable size on land. Construction commenced in the Canadian operations require substantial investments at a August 2022 and is progressing according to plan. time when the resource tax and overall inflation requires greater capital discipline. We are committed to take the next step of the growth journey in Canada and will focus on maximizing this value while also mitigating risks. All plans for expansion in Canada need to be considered in this context, and for that reason we are seeking long-term partners to take part in the development of our Canadian operations. The process to identify potential partners is ongoing. PART 01 - OUR FOUNDATION 11 135 000 VALUE CHAIN REPOSITIONING Our sales currently consist mainly of fresh, head-on gutted salmon. We aim to increase the value of our products through a stronger presence in the market, based on partnerships, category development and brand cultivation. Repositioning Grieg Seafood from a salmon raw material supplier to a strategic partner for selected customers is an important part of our value creation plan. Increasing our VAP share is also an important part of reducing our greenhouse gas emissions. STATUS • Key milestones in 2023 were to continue to establish GOING FORWARD • We will invest in a new 10 000 - 12 000 tonnes capacity processing partnerships in Norway and Europe, launch our secondary processing facility at Oslo airport Gardermoen. This VAP products in selected markets and boost our VAP share to will improve the utilization of our production and reduce risk 5-10% of harvested volume. We are in line with our targeted related to lower superior share, while also provide increased milestones, and are currently processing salmon into fresh flexibility and efficiency in our farming operations. The facility and frozen value added products with partners in Norway, is expected to be up and running in 2025. Europe and Western Canada. Furthermore, we have an • We will also continue to evaluate external opportunities increasing supply of our own VAP products in the European, to strengthen our processing capacity, such as long-term Asian and US markets. 5% of our global harvested volume in partnerships with third parties in Norway, North America and 2023 was sold as VAP. Europe, as well as the development of our existing internal processing infrastructure. • We are targeting 20-30% share of our volume for VAP by 2026. In 2024, we expect a VAP share of 7-8% of harvested volume. • We aim to develop B2B brands going forward. Currently, we have the successful Skuna Bay brand in the USA. FIGURE 1.7 OUR GROWTH JOURNEY: HARVESTED TONNES GWT Rogaland Finnmark BC Newfoundland 71 142 75 601 84 697 81 000 72 015 Due to the local production arrangements and larger farms on the West Cost of Vancouver Island (where we harvested from in 2020 and 2022), the harvested volume vary every other year, regardless of the underlying biology. Rogaland Finnmark 2020 2021 2022 2023 BC 2024E Aim Newfoundland COST DEVELOPMENT To be cost competitive in the regions where we farm, we continuously focus on operational performance. Biological control through preventative measures and fish health and welfare is essential in securing increased survival and reduced production costs. We will also drive performance improvements through continuous research and development, as well as through the utilization of new technologies. STATUS • Over the last two years, our farming cost (cost directly related GOING FORWARD • We have launched an improvement program in 2023 to review to production and harvest of salmon) has increased due to all aspects of our operations and identify areas where we can combination of general inflation and biological challenges.In improve profitability and reduce costs. The program targets 2022, industry cost rose across the board, with feed prices, cost-reductions of NOK 150 million over the next two years. in particular, increasing by approximately 40% in Norway and • While our post-smolt strategy increases investment close to 20% in BC. This has impacted our farming cost as we expenditures and smolt costs, we expect it to reduce have harvested the fish, in particular during 2023 which has operational expenditures and reduce costs related to reflected most of the cost increase. The table below shows mortality, disease outbreaks, sea lice treatments and fish the underlying farming cost adjusted for general inflation and handling. Our experience with post-smolt in Rogaland abnormal mortality only (not taking into account the higher indicate that less time in the sea reduces both the risk of and cost of feed). Increased feed prices accounts for a large part impact from biological challenges such as sea lice, winter of the cost rise in all regions. The cost in Finnmark in 2023 ulcers and ISA. is also significantly impacted by challenges in seawater • In BC, we have had good results with digital monitoring and production due to Spironucleus Salmonicida (Spiro). measures to mitigate the effects of harmful algae blooms, our main biological challenge in the region. The measures have contributed to a reduction in mortality related to algae blooms from 3.4% in 2019 to 1.1% in 2023. FIGURE 1.8 COST DEVELOPMENT Farming cost/kg 2021 2022 2022 adj for inflation* and abnormal mortality Rogaland (NOK) Finnmark (NOK) BC (CAD) 44.6 43.7 8.8 48.2 47.3 9.1 44.6 42.2 8.1 2023 60.4 64.4 11.2 *Adjusted to 2021, based on the consumer price index for all goods and services, according to the Statistics Norway. Newfoundland not included, as 2023 was the first year of harvest and farming cost. 2023 adj for inflation* and abnormal mortality 54.7 58.4 10.4 PART 01 - OUR FOUNDATION 12 OPERATIONAL FOCUS AREAS To achieve sustainable growth and improve competitiveness, we focus on reducing the time fish spend at sea (post-smolt), improving fish welfare and providing data-driven decision support (“Precision Farming”) to our operations. Together, these focus areas strengthen our ocean farming. OPERATIONAL FOCUS AREAS LESS TIME AT SEA (POST-SMOLT) PREVENTIVE FARMING PRACTICES AND FISH WELFARE PRECISION FARMING (DATA-DRIVEN DECISION SUPPORT) LESS TIME AT SEA (POST-SMOLT) During the first stages of their life, salmon are raised in onshore freshwater hatcheries. In traditional salmon farming, fish are transferred to the sea when they have undergone the smoltification process, making them physiologically ready for life in saltwater. With our post-smolt strategy, we keep the fish longer on land or in closed facilities in the sea, shortening the time that they spend growing in open sea-pens by several months. Less time at sea will improve biological control, fish welfare, survival and quality because each salmon is less exposed to biological risks like sea lice, seaborne diseases or other unfavorable ocean conditions such as harmful algae or sub-optimal oxygen levels. Less exposure to these risks will also allow us to improve sea lice control better utilize preventative methods and avoid expensive treatments. This will reduce our environmental impact as well as our production cost. Post-smolt also increases flexibility with regard to the transfer of smolt, allowing us to fallow sites for longer periods if necessary. The fish will be larger and more robust when entering the sea-growing phase, which we believe will increase health and welfare in and of itself. 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 licenses. The result is a lower environmental footprint per fish, better fish health and welfare, lower costs, and increased annual harvests. Altogether, we expect post-smolt transfer to reduce operational expenditure in the sea-growing phase, improve profitability and competitiveness, and provide opportunities for sustainable production growth. ACHIEVEMENTS 2023 • In Rogaland, where we are pioneering our post-smolt strategy: GOING FORWARD • We plan to boost post-smolt capacity in Rogaland by at least 4 500 tonnes. In Finnmark, we target an increase of – The average smolt transferred to the sea in 2023 weighed 3 000 tonnes of post-smolt with a new unit at our current 460 grams compared to an average of 90 grams in 2014. freshwater facility in Adamselv. – Close to 60% of fish harvested were raised from post- • Grieg Seafood Rogaland aims to increase the average smolt smolt (fish weighing more than 250 grams when transfer weight to approximately 1 kg in 2027. transferred to sea). – Post-smolt in combination with preventive sea lice measures indicates a reduction in production time at sea from 460 days in 2021 to 220 days in 2023 while also providing a significant reduction in mortality. – There are strong indications of improved biological control compared to standard smolt weight, with a significant reduction in sea lice treatments as the post-smolt weight increases. 65% of the pens from which fish were harvested did not receive any sea lice treatment, up from 43% in 2021 and 54% in 2022. – Our results so far demonstrate stable production of post- smolt up to 1 kg. PART 01 - OUR FOUNDATION 13 PREVENTION AND FISH WELFARE We pursue a systematic, long-term approach to fish health and welfare. The key is investment in and further development of preventive measures against seaborne hazards, such as sea lice, harmful plankton, jellyfish, low oxygen levels, infectious diseases and low seawater temperatures. Prevention will reduce handling and stress for the fish. It will also reduce our environmental footprint by, for instance, reducing the number of treatments needed. Moreover, prevention instead of handling reduces production costs. The result is improved welfare, stronger growth, increased survival, high harvesting quality and lower costs. ACHIEVEMENTS 2023 • In 2022, the parasite Spironucleus Salmonicida (Spiro) was GOING FORWARD • We continue to work with academia to investigate and learn detected in fish from our freshwater facility in Finnmark. The more about the parasite Spiro. We also participate in multiple source of the parasite is believed to be the water intake to the industrial R&D projects to share and identify best practices for facility. In 2023, we invested NOK 70 million in top-notch UV winter ulcers and jellyfish, amongst other seaborne hazards. treatment and purification systems to reduce future risks of • Some of our numerous ongoing initiatives to improve fish Spiro entering the facility. We also collaborate with research health and welfare throughout the production cycle include institutions to close knowledge gaps related to Spiro. We have the selection of roe with specific qualities related to sea not had any new detections of Spiro at the freshwater facility. lice and diseases, feed customized for the various stages of • Winter ulcers have been a recurring issue for the Norwegian the salmon’s life cycle, and vaccinations targeting specific salmon farming industry the last years, and have impacted diseases: our harvest in Finnmark. We have implemented new vaccines – We have enhanced our feed for use during the winter and are testing "probiotica" treatments before transfer to sea period, utilizing best available science, to strengthen to increase robustness. Preliminary results will be available health, welfare, robustness and quality. Examples of during Summer of 2024. changes are increased levels of essential marine fat and a • In BC, we have installed a combination of aeration/oxygen stronger vitamin mix. generation systems and retractable barriers to keep harmful – Initiatives to optimize health, welfare and robustness algae outside and push clean and oxygenated water up to the of smolt and post-smolt by conducting data analysis on fish during periods of harmful algae blooms or sub-optimal historical production data to provide decision-making oxygen levels. The effect is increased survival and continued support. feeding and on-growth during challenging conditions, as well – Efforts to mitigate the negative impact mechanical sea lice as better sea lice control. Mortality related to algal blooms treatments may have on fish health and welfare. Mortality has been stable the last year due to our efforts relating to caused by such treatments has been reduced, and we are algae mitigation, digital monitoring and aeration systems, and working to reduce it further. came down from 3.4% in 2019 to 1.1% in 2023. – We have developed our own fish welfare indicators, based • In Rogaland, due to post-smolt and the use of cleaner fish as on the Fishwell research project, to enable us to more a preventive method to control sea lice, 65% of the pens of fish systematically assess and improve fish welfare throughout harvested did not receive any sea lice treatments in 2023. our operations. PART 01 - OUR FOUNDATION 14 “PRECISION FARMING” - DATA-DRIVEN DECISION SUPPORT “Grieg Seafood Precision Farming” is our concept for digitalizing farming operations, where we apply advanced sensors, data analytics, artificial intelligence, and prediction models with the aim of supporting our farmers to take insight-based decisions before eventual negative impact occurs in everyday operations. The aim is to implement more automation, work more preventatively, improve fish welfare, reduce our impact, and improve our farming. We are gaining positive results by combining experience-based knowledge and data-based insight in our projects. Data analyses on previously unknown connections between the fish and the environment provide insights for strategic decision-making. The use of digital tools and dashboards, providing real-time data on various farming parameters to operational centers as well as to farmers, aims to improve tactical and operational decisions. They also allow us to benchmark on new parameters and learn better from best practice. We aim to be able to predict negative events early, enabling us to apply preventative measures and improve management decisions. The result is expected to be increased growth, reduced environmental impact, improved fish welfare, increased productivity GOING FORWARD • Implementing ChatGPT to internal library of scientific articles, internal documents etc., to increase internal competence and knowledge sharing (GSF SalmoPedia). • Implementing prediction tools to improve the process between sales, processing, and harvest planning (GSF AI Harvest Hub). • Continuing set up of integrated operation centers in both Newfoundland and Finnmark as a continuation of our strategy to strengthen our seawater production by enforcing the utilization of digital capabilities in the group. Both centers will be built to the same design and with similar capabilities as we are running in Rogaland. and lower costs. Read more about Precision Farming here. ACHIEVEMENTS 2023 • Our internal analysis team has continued with new data analyses to provide strategic and tactical decision-making support, aimed at mitigating biological challenges: – Introduced concept of data democratization to enable production managers and biological planners to perform data analysis and gain insights based on facts, including simple simulation capabilities. – Analysis of the drivers behind risk of mortality in sea lice treatment methods. Findings gives the operational personnel decision support when choosing treatment methods. – Developed models for prediction of harvest distribution and quality, based on historical data. – Implemented common dashboards for environmental monitoring in freshwater production. Enables production managers to analyze water chemistry towards production variables, and to benchmark against the other facilities and regions. – Implemented tools enabling operation managers to optimize input to sea for reducing winter ulcers in Finnmark. The optimization is based on prediction models developed on markers in historical data found in analytic projects. – Analysis to find markers in the feeding data from our integrated operation center to improve growth and reduce feed waste. Developing AI models for prediction of feed next day based on historical data together with testing of autonomous feeding. – Finalized project to identify the eFCR, bFCR and growth rates for different smolt sizes throughout the whole production cycle (freshwater & seawater), including the optimal smolt size given location, time of input and cost. – Benchmarking genetics providers on fish performance in sea, utilizing full traceability in the data from harvest to egg. Findings will be used to optimize production and input to sea. PART 01 - OUR FOUNDATION 15 SUSTAINABLE FOUNDATION OUR FIVE PILLARS AND MATERIAL TOPICS Grieg Seafood's business is based on sustainable operations. 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. The topics listed under each pillar is identified as important to our organization and our stakeholders, and is covered by group policies. The topics in red represents the list of material topics reported in line with the GRI standards. Find a combined overview of our pillars, targets and Group policies here. HEALTHY OCEAN SUSTAINABLE FOOD PROFIT & INNOVATION PEOPLE LOCAL COMMUNITIES S R A L L I P R U O T N E M N G I L A G D S I S C P O T L A R E T A M I • Fish health & • Safe and healthy • Profitable • Human rights • Local value welfare food operations • Embracing • Protecting wild • Sustainable feed • Our market diversity creation • Indigenous salmon (escape ingredients • Research, • Creating attractive relationships • Climate action • Recycling and waste management development and jobs innovation • Responsible business conduct • Keeping our employees safe • Dialogue and engagement • Plastic pollution • Corporate governance and sea lice control) • Protecting biodiversity & marine ecosystems (local emissions, medicine use, wildlife interaction) PART 01 - OUR FOUNDATION 16 FINANCIAL IMPACT OF MATERIAL ESG TOPICS All material areas, as well as many significant ones, are covered by Group policies, to ensure a systematic improvement efforts across the Group. While managing many of these risks is an ethical responsibility, it also supports our financial performance directly or indirectly. Our impact and principles: Fish health and welfare Policy for fish health Policy for fish welfare Policy for use of antibiotics Our impact and principles: Co-existence with wild salmon Policy for protecting biodiversity PILLAR MATERIAL AREA Fish health and welfare FINANCIAL IMPACT ANNUAL TARGET LINK TO MANAGEMENT APPROACH Mainly direct financial impact: Fish with good health and welfare grow well. Health and welfare is important to secure the highest possible harvest volume with the highest possible quality. Diseases and treatments on the other hand, are key cost drivers. 95% survival at sea by 2023 No use of antibiotics Protecting wild salmon - escape Mainly indirect financial impact: Escaped fish may interbreed with wild salmon in some of our farming regions. Escape events increase risk of stricter regulations and reduce the social license to operate needed to achieve growth. Zero escape incidents Protecting wild salmon - sea lice control Mainly direct financial impact: Controlling sea lice through preventative methods is the most cost-efficient approach. Sea lice treatments are resource intensive and increase production cost. Average adult female sea lice below 0.5 in Norway / average motile sea lice below 3.0 in BC Our impact and principles: Co-existence with wild salmon, and Co-existence with crustaceans Protecting biodiversity and marine ecosystems - local emission Mainly direct financial impact: Good sites that restore easily during the fallowing period between each production cycle are the most optimal for salmon production. They do not only have the lowest impact on the marine ecosystem, they also typically have the best fish health, welfare, growth and lowest cost. All sites restored to regulatory accepted level between each generation of fish Protecting biodiversity and marine ecosystems - medicine use Protecting biodiversity and marine ecosystems - wild life interaction Safe and healthy food See sea lice control above. Mainly indirect financial impact: Impacting wild life around our farms increases risk of stricter regulations, and reduce the social license to operate needed to achieve growth. Mainly direct financial impact: If our product does not meet health and safety expectations, we risk losing confidence with our customers, leading to loss of revenues. No use of copper in nets Minimize use of pharmaceutical treatments Zero dead marine animals Number of dead birds in compliance with ASC All our operations certified according to a Global Food Safety Initiative See more targets in the policy Policy for sea lice control Our impact and principles: Impact on nature Policy for protecting biodiversity Our impact and principles: Co-existence with crustaceans Policy for protecting biodiversity Our impact and principles: Co-existence with wild life Policy for protecting biodiversity Our impact and principles: Safe food Policy for food safety Healthy ocean Sustain- able food PART 01 - OUR FOUNDATION PILLAR MATERIAL AREA Sustainable feed ingredients FINANCIAL IMPACT Mainly indirect financial impact: Fish feed comprises approximately 40% of the farming cost. Ensuring access to a broad basket of potential feed ingredients that are accepted by the consumer is important to keeping costs down. Working proactively to improve the sustainability of salmon feed and ensure that it meets the requirements of the future consumer is key to ensure access to various feed ingredients and the lowest possible feed cost in the short, medium and longer term. Sustain- able food ANNUAL TARGET LINK TO MANAGEMENT APPROACH All marine ingredients, palm oil and Brazilian soy protein concentrate certified GHG emissions from feed reduced by 30% from 2018 to 2030 See more targets in the policy Our impact and principles: Sustainable feed ingredients, Sustainable marine ingredients, Zero deforestation Policy for sustainable feed Climate action Direct financial impact: Physical climate risks, such as increased water temperature in the ocean, may in the longer run cause financial impacts if they are not mitigated. 35% reduction of Scope 1, 2 and 3 by 2030 Our impact and principles: Reducing carbon emissions Indirect financial impact: Efforts to reduce carbon emissions reduce transitional climate risks, such as impacts of future carbon taxes or regulations Responsible business conduct Mainly indirect financial impact: Strong corporate governance is essential to achieve our objectives. Breaches and non-compliances can lead to fines and lawsuits, impacting revenues and costs. No incidents of non- compliance Profit & innovation Corporate governance Human rights Mainly indirect financial impact: Promoting respect for human rights in our operations and supply chain supports our social license to operate, our reputation and attractiveness in the market, all of which underpin growth and price achievement 100% completion of Code of Conduct program. Human Rights Due Diligence People Keeping our employees safe Mainly indirect financial impact: A safe workplace with good conditions is a prerequisite for good performance. Absence rate below 4.5% Local comm- unities Local value creation Mainly indirect financial impact: Contributing to the rural communities where we operate is key to our social license to operate, which underpins our growth ambitions and a prosperous industry. Collaborate and contribute to local community Indigenous relationships Mainly indirect financial impact: Respecting Indigenous people’s rights in the relevant regions is also key to our social license to operate. Policy for climate action TCFD report Code of Conduct Supplier Code of Conduct Policy for anti-money laundering Policy for anti-corruption Governing policies including Principles of Corporate Governance Our impact and principles: Human rights Policy for human rights Our impact and principles: Health and safety Policy for diversity Policy for gender equity Policy for HSE Rogaland Finnmark British Columbia Newfoundland Our impact and principles: Indigenous relationships 17 THE SUSTAINABLE DEVELOPMENT GOALS R&D ACTIVITY 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. 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. GLOBAL SUSTAINABILITY INITIATIVES PARTNERSHIPS AND COLLABORATION Grieg Seafood has committed to several initiatives that Collaboration and partnerships with researchers, peers, set high standards for our farming operations and value companies in our value chain, NGOs or other relevant chain. Initiatives range from ocean stewardship to the actors is highly valued by Grieg Seafood. Only through climate, deforestation, and human rights. Read more collaboration can we drive necessary change, and solve about these initiatives here. the challenges we have in our industry and in our global food system. Read more about our partnerships here. PART 01 - OUR FOUNDATION 18 OUR OPERATIONAL RESULTS We aim to create shared value for shareholders, employees, local communities and customers alike. PART 02 OPERATIONAL RESULTS FROM OUR FARMING AND SALES ACTIVITIES RESULTS FROM SELECTED SUSTAINABILITY TOPICS PROFITABLE OPERATIONS EU TAXONOMY GRIEG SEAFOOD ROGALAND GRIEG SEAFOOD FINNMARK GRIEG SEAFOOD BRITISH COLUMBIA GRIEG SEAFOOD NEWFOUNDLAND OUR CERTIFICATIONS SALES & MARKET CLIMATE ACTION SUSTAINABLE FEED INGREDIENTS PEOPLE 20 23 27 31 35 40 43 44 47 50 52 PROFITABLE OPERATIONS We aim to provide our shareholders with a competitive return on capital invested, with a ROCE target of 12%. With initiatives to reduce our environmental impact and improve fish welfare, we aim to increase harvest rates and reduce production costs. GROUP FINANCIAL RESULTS 2023 PROFIT AND LOSS The Group harvested 72 015 tonnes GWT of Atlantic salmon in 2023, down 15% compared to 84 697 in 2022. Our Norwegian regions contributed 71% (76%) of the volume harvested, while the Canadian regions contributed 29% (24%). Total sales revenue for the year came to NOK 7 020 million, down NOK 144 million from NOK 7 164 million in 2022. Sales revenues from the Group’s farming regions totaled NOK 5 956 million in 2023, down NOK 462 million from NOK 6 418 million in 2022 (see Note 5 to the Group Accounts). The difference between the total sales revenue for the Group and sales revenues from farming regions is attributable to Elim/Other effects (see Note 5 to the Group Accounts), which includes the gross uplift on sales revenue for the Group generated by the sales organization. The Group's price achievement for the year was NOK 82.7 per kg (NOK 75.8 per kg) on aggregate for our farming regions. By comparison, the average NQSALMON NOK/kg price for 2023 was NOK 92.3 per kg (82.0). Price realization was negatively impacted by fixed-price contracts for some of our Norwegian harvested volume, as well as the lower price achieved for production grade volumes. The lower sales revenue for the Group compared to last year is mainly due to a lower harvested volume. The Group's farming cost for 2023 ended at NOK 70.2 per kg (NOK 52.7 per kg). In total, our Norwegian farming regions contributed to 63% (69%) of the farming cost, an increase of NOK 14.6 per kg from NOK 47.7 per kg in 2022 to NOK 62.3 per kg in 2023. British Columbia had, on a 13% lower harvest volume year- on-year, a farming cost of CAD 11.2 per kg, up CAD 2.0 per kg compared to CAD 9.1 per kg in 2022. The increased farming costs is primarily due to inflation pressure on key input to production throughout 2022, which impacted our EBIT in 2023 when the fish was harvested. This is due to the long production cycle for Atlantic salmon, where the cost to produce the biological assets are capitalized to the balance sheet and released to the income statement at the point of harvest (if not previously expensed as abnormal mortality). Additionally, we have also had lower growth than expected, which all else equal increase cost per kg due to, on the short term, fixed costs in the cost base of the farming operations. Raw materials and consumables, which consist mainly of the Group’s freshwater and seawater fish stocks, in addition to feed, ended at NOK 2 748 million, up NOK 514 million from the NOK 2 234 million recognized in 2022. Salaries and personnel expenses ended the year at NOK 726 million, an increase of NOK 30 million from NOK 696 million in 2022. Other operating expenses ended at NOK 2 236 million, up NOK 149 million compared to NOK 2 087 million in 2022. Operational EBIT (see Alternative Performance Measures) in 2023 ended at NOK 780 million (NOK 1 739 million), equivalent to an Operational EBIT of NOK 10.8 per kg (NOK 20.5 per kg). The decrease was driven by lower harvested volume and higher farming cost. The ROCE for 2023 ended at 7%, compared to 23% in 2022. EBIT (earnings before interests and taxes) came to NOK 981 million, down NOK 517 million compared to NOK 1 498 million in 2022. For a more detailed review of the Group’s financial performance in 2023, see the Board of Directors’ report. PART 02 - OUR OPERATIONAL RESULTS Shetland was sold 15 December 2021. The figures from 2019 to 2021 are ex. Shetland, as the assets was held for sale as from 2020 and presented as discontinued operations. FIGURE 2.1 KEY FIGURES GRIEG SEAFOOD GROUP NOK MILLION Sales revenues Operational EBITDA Operational EBIT EBIT (Earnings before interests and taxes) Harvest volume (tonnes GWT) Farming cost/kg (NOK) Operational EBIT/ kg (NOK) ROCE 2019 4 756 1 384 1 077 822 2020 4 384 602 233 -57 2021 4 599 818 442 941 2022 7 164 2 191 1 739 1 498 2023 7 020 1 334 780 981 71 700 71 142 75 601 84 697 72 015 40.5 15.0 19% 47.0 3.3 3% 47.2 5.9 6% 52.7 20.5 23% 70.2 10.8 7% 20 DIRECT ECONOMIC VALUE GENERATED Taxes are important sources of government revenue. They acquisition cost for tax purposes for the acquired biomass from are central to the fiscal policy and macroeconomic stability of Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS. countries and are acknowledged by the United Nations to as playing a vital role in achieving its Sustainable Development The information on the creation and distribution of economic Goals. Furthermore, they are a key mechanism by which value shall provide a basic indication of how we create wealth organizations contribute to the economies of the countries for our stakeholders. In addition, the components of the in which they operate, i.e. Norway and Canada for Grieg economic value generated and distributed sharpen Grieg Seafood. By reporting our taxes paid country-by-country, we Seafood’s economic profile, permit a different interpretation indicate our scale of activity and the contribution we make of the economic figures and outline the overall economic value through tax in these jurisdictions. Living up to our obligation to retained from the Group’s ordinary operations during the comply with tax legislation and our responsibility to meet our year. In 2023, the economic value retained came to NOK -312 stakeholders expectations with respect to good tax practice is million, corresponding to a decrease of about NOK 1 862 million extremely important to us. compared to 2022. In 2023, the Norwegian Parliament passed the resource tax scheme on aquaculture in Norway. The tax scheme applies to net profits from commercial sea-phase salmon aquaculture activity in Norway. This is an additional layer of taxation on aquaculture on top of ordinary corporate income taxation of 22%, bringing the total marginal tax rate for the in-scope aquaculture activity to 47%. Corporate taxes paid in 2023 are higher than 2022 and prior years primarily due to Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS, following a reorganization of commercial aquaculture licenses in Norway, chose to capitalize the FIGURE 2.2 TOTAL TAXES (INCOME AND PROPERTY TAX) PAID IN 2023 (NOK million) Norway Canada UK Total taxes paid 784 83 — 867 FIGURE 2.3 DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED FIGURE 2.4 VALUE RETAINED IN 2023 NOK MILLION Value generated Revenues Total value generated Value distributed 2019 2020 2021 2022 2023 4 756 4 756 4 384 4 384 4 599 4 599 7 164 7 164 7 020 7 020 Salaries and personnel expenses 493 500 577 696 726 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 Income taxes and production fee Total value distributed 1 498 1 407 64 442 128 4 033 1 717 1 593 133 — 205 4 148 1 738 1 527 200 — 31 4 075 2 234 2 087 140 337 120 5 614 2 748 2 236 222 504 896 7 331 Total value retained 723 237 524 1 550 -312 All figures compiled from the audited Group accounts. PART 02 - OUR OPERATIONAL RESULTS 12.2% 9.9% 6.9% 3.0% 30.5% 37.5% 21 Salaries and personnel expenses Raw materials and consumables used Other operating expenses Net interest and other financial items Paid dividends Income taxes and production fee Salaries and personell expenses Raw materials and consumables used Other operating expenses Net interest and other financial items Paid dividends Income taxes and production fee CREATING SHAREHOLDER VALUE Our ambition is to create shareholder value and deliver Company’s shares, with the Grieg family controlling 50.17% of competitive returns relative to comparable investment the outstanding shares as of 31 December 2023. A further 4.5% alternatives. We engage with the investor community in an was controlled by OM Holding AS and 2.1% by Folketrygdfondet open, transparent and continuous dialogue. Building trust and (the Norwegian National Insurance Fund) at year-end 2023. awareness is critical to ensure that the information disclosed to Grieg Seafood ASA held a total of 1 313 654 treasury shares as of the financial market, including current and potential investors, 31 December 2023. For a detailed breakdown of our 20 largest analysts and other stakeholders, provides the best possible basis shareholders, please see Note 24 of the Group Accounts. for a correct valuation of Grieg Seafood. Grieg Seafood was listed on the Oslo Stock Exchange/Euronext dividends should correspond to 30-40% of the Group’s profit after on 21 June 2007, under the ticker GSF. We have only one class of tax, before fair value adjustment on biological assets (limited to shares, and all shares carry the same rights. As of 31 December 50% by Green Bond agreement). At the same time, the Group’s 2023, the Company had 112 133 388 shares outstanding, at a net interest-bearing debt per kg harvested salmon should nominal value of NOK 4.00 per share (excluding treasury shares). remain below NOK 40, but can be exceeded in periods of growth Total ordinary shares as at 31 December 2023 was 113 447 042. investments. In 2023, the Group distributed a dividend of NOK The Board of Directors maintains that, as an average over time, 4.5 per share to shareholders, which correspond to 48% of the As of 31 December 2023, we had 10 445 shareholders, with our net profit for FY 2022, before fair value adjustment of biological ten largest investors holding 65.8% of our shares, and the 20 assets. As at 31 December 2023, Grieg Seafood was in a good largest investors holding 74.3%. The number of shareholders financial position to execute strategic priorities. Based on the increased during the year, from 10 590 at year-end 2022. 2023 financials, the Board of Directors proposes a dividend of Norwegian-based shareholders own the majority of the NOK 1.75 per share (equivalent to NOK 196 million) be distributed to shareholders in 2024. The proposed dividend is subject to approval by the Annual General Meeting of Grieg Seafood ASA in 2024. FIGURE 2.5 GEOGRAPHICAL OWNERSHIP (NUMBER OF SHARES) FIGURE 2.6 THE GRIEG SEAFOOD SHARE KEY FIGURES GRIEG SEAFOOD SHARE 2019 2020 2021 2022 2023 Number of shares at year-end (incl. own shares) 111 662 000 113 447 042 113 447 042 113 447 042 113 447 042 Number of shares traded Number of shareholders Total value of shares traded per day (NOK million) Average number of shares traded per day Median number of shares traded per day 72 001 397 99 831 798 85 769 401 86 797 490 77 793 571 4 968 33.7 289 162 240 801 12 436 37.5 396 158 317 106 9 938 28.5 340 355 265 456 10 590 35.8 343 073 283 718 10 445 23.4 327 148 234 696 Total market value OSE (NOK 1 000) 15 666 178 9 642 999 9 427 449 8 916 938 7 748 433 Share price at year-end (NOK) Average share price (NOK) Lowest closing price (NOK) Highest closing price (NOK) Dividend per share LEARN MORE ON OUR WEBSITE → Our share, shareholders and dividends 140.3 118.0 96.8 146.8 4.0 85.0 99.1 66.3 144.9 — 83.1 84.4 73.2 95.6 — 78.6 108.1 63.0 154.0 3.0 68.3 76.0 60.6 90.6 4.5 22 Norway UK EU USA Other PART 02 - OUR OPERATIONAL RESULTS contracts, well-boats which is utilized in the farming operations • Grieg Seafood has a group wide and global approach to the We believe that the sustainable production of salmon is vital primarily for treatments, smolt transportation and transportation assessment of minimum safeguards. to feed a growing population in the world. As at year-end 2023, EU TAXONOMY BACKGROUND AND SCOPE The EU taxonomy serves as a classification framework that defines a set of economic activities considered to be of fish to harvesting plants. Well-boats are designed and equipped for transportation of fish. environmentally sustainable. Its primary goal is to facilitate the expansion of investments in environmentally sustainable 7.7. Acquisition and ownership of buildings The activity refers to buying real estate and exercising ownership practices, contributing to the achievement of the European of that real estate. Grieg Seafood owns and operates buildings Union's 2030 climate and environmental goals and advancing the and lease properties through its ordinary course of business. objectives outlined in the European Green Deal. Environmentally We have an integrated value chain, and own broodstock, smolt sustainable economic activities are described as those which facilities and harvesting plants on land, in addition to owned and The assessment of the eligible activities has resulted in none of eligible activity according to the EU Taxonomy, and consequently the activities being taxonomy aligned as at 31 December 2023. are treated as a non-eligible activity for 2023. aquaculture has not been defined as either an eligible or non- NON-ELIGIBLE ECONOMIC ACTIVITIES Our climate action target is to reduce carbon emissions by 35% towards 2030, and by 100% in 2050, with 2018 as the baseline KPI DENOMINATOR year. This reduction target is for Scope 1, 2 & 3. Our carbon emission reduction targets are classified as well-below 2°C REVENUE (TURNOVER) Revenue represent Grieg Seafood’s total revenue from contracts “make a substantial contribution to at least one of the EU’s leased buildings that function as land bases in the near proximity global warming, and aligned with the Paris Agreement. Our with customers, in addition to rental income. A specification is climate and environmental objectives, while at the same time of certain fish farms in our regions. Additionally, we own and emission targets have been approved by the Science Based provided below. not significantly harming any of these objectives and meeting lease administration buildings for our farming regions, sales Targets initiative (SBTi). minimum safeguards.” operations and corporate headquarter. As a non-financial company, Grieg Seafood ASA is in scope of the Taxonomy Regulation (EU) 2020/852 and the Delegated Acts to disclose information on the proportion of the company's revenue (turnover), capital expenditure (CapEx), and operating DETERMINING WHETHER ELIGIBLE ACTIVITIES ARE ALIGNED WITH THE TAXONOMY CRITERIA The EU Taxonomy regulation sets out four overarching conditions REVENUE NOK MILLION NOTE Revenue from contracts with customers Note 6 to the Group Accounts expenses (OpEx) associated with assets or processes related that an economic activity must meet in order to qualify as Rental income Note 28 to the Group Accounts Total revenue according to EU Taxonomy 2023 7 020 9 7 028 to environmentally sustainable economic activities. The environmentally sustainable. Firstly, the activity must do a information is compiled on a Group consolidated level displayed substantial contribution to at least one of the six environmental in Norwegian Kroner (NOK), consistent with the format used objectives, Secondly, the activity must do no significant harm to in the consolidated financial statements. For the mandatory any of the other five environmental objectives. Third, the company KPI’s under the EU Taxonomy, further information concerning must comply with the minimum safeguards. And forth, the reconciliation with the consolidated financial statements of Grieg activity must comply with the technical screening criteria set out Seafood has been provided below. in the Taxonomy Delegated Acts. ELIGIBLE AND ALIGNED ECONOMIC ACTIVITIES Grieg Seafood has established that economic activities qualify as eligible if they can be evaluated against the technical screening criteria outlined in the Climate Delegated Act and possess the potential to either be or become taxonomy-aligned. Grieg Seafood has identified the following economic activities to be in scope of EU taxonomy reporting as of year-end 2023: 6.5 Transport by motorbikes, passenger cars and light commercial vehicles This activity refers to the purchase, financing, renting, leasing and operation of vehicles, for the Group, typically passenger cars. Grieg Seafood utilizes passenger cars, both owned and leased, as a means of transportation of personnel between farms, our land based facilities and administration offices sites. 6.10 Sea and coastal freight water transport, vessels for port operations and auxiliary activities This activity refers to operation of vessels designed and equipped for transport of freight or for the combined transport of freight and passengers on sea or coastal waters, whether scheduled or not, and auxiliary activities. For this activity, we have allocated CapEx and OpEx related to assets that are designed and equipped for the transportation of freight, including fish, irrespective of the usage of the asset. This is particular relevant for well-boats. Grieg Seafood operates, through long-term time charter PART 02 - OUR OPERATIONAL RESULTS TECHNICAL SCREENING PROCEDURES Grieg Seafood has implemented the assessment of technical screening criteria for the environmental objectives climate change mitigation and climate change adaptation according to the EU Taxonomy. For 2023, Grieg Seafood’s activities relate to climate change mitigation. An economic activity contributes substantially to the environmental objective climate change mitigation where that activity contributes substantially to the stabilization of greenhouse gas concentrations in the atmosphere at a level consistent with the Paris Agreement. Grieg Seafood has carried out the technical screening procedures as follows: • The compliance with the substantial contribution criteria is assessed individually for each identified economic activity. Where the activities have been assessed as similar across segments, the activity has been assessed at Group level. • Assessment of the do no significant harm-criteria has been assessed individually for each identified economic activity. Where the activities have been assessed as similar across segments, the activity has been assessed at Group level. CAPITAL EXPENDITURES Total capital expenditures (CapEx) according to the EU Taxonomy consists of additions of property, plant and equipment including right-of-use assets and additions to intangible assets. The total CapEx according to the EU Taxonomy is consistent with the consolidated financial statement of Grieg Seafood. A specification is provided below. CAPITAL EXPENDITURES NOK MILLION NOTE Intangible assets Note 13 to the Group Accounts Property, plant and equipment incl. right-of-use assets Note 14 to the Group Accounts Total CapEx according to EU Taxonomy 2023 2 1 529 1 530 Grieg Seafood is a salmon farming company, and we hold biological assets on our balance sheet. According to the EU Taxonomy, additions to biological assets are a part of CapEx. For Grieg Seafood, biological assets is classified as current assets and a part of the Group’s working capital. Additions to biological assets (at cost) has therefore not been included as part of the CapEx reported under the EU Taxonomy as stated in the table above, since biological assets is not property, plant and equipment. OPERATING EXPENSES Total operating expenses (OpEx) according to the EU Taxonomy covers the direct non-capitalized costs that relate to research and development, building renovation, short-term leases, maintenance and repair, and any direct expenditures relating to the day-to- day servicing of assets of property, plant and equipment that are necessary to ensure the continued and effective functioning use of such assets. The definition of OpEx under the EU Taxonomy is not consistent with the operating expenses as included in the Group’s consolidated financial statement. In short, the OpEx under the EU Taxonomy cover only part of the operating expenses in the consolidated financial statement, as the EU Taxonomy’s OpEx definition is more narrow. OPERATING EXPENSES NOK MILLION NOTE Other operating expenses Note 9 to the Group Accounts Other operating expenses according to IFRS, not defined as OpEx according to the EU Taxonomy Total OpEx according to EU Taxonomy 2023 2 236 1 845 391 23 KPI NUMERATOR The KPI numerators of consist of the taxonomy-eligible and taxonomy-aligned revenue, CapEx and OpEx that are included in the denominator. MINIMUM SAFEGUARDS  Grieg Seafood ensures that its economic activities strictly adhere to minimum safeguards, with the majority of these principles being addressed through Group policies that are in alignment with both national and global regulations. HUMAN RIGHTS CORRUPTION TAXATION FAIR COMPETITION 1. Grieg Seafood is committed 1. Grieg Seafood perform risk 1. Grieg Seafood treat tax 1. Grieg Seafood ensures assessments of our operations and have mitigating measures and controls to prevent corruption. We also perform risk assessments of the countries where we operate. 2. Grieg Seafood or any senior management affiliated with the company has not been finally convicted in court on corruption. governance and compliance as integral components of its oversight framework and maintains tax management practices in strict accordance with national accounting principles and laws. compliance with competition laws through our Code of Conduct, which all employees are obliged to comprehend and comply with through our Code of Conduct Program. 2. Grieg Seafood or its senior 2. Grieg Seafood or its subsidiaries has not been found violating of tax laws. management has not been finally convicted on violating competition laws. to the UN Guiding Principles on Business and Human Rights (UNGP) and OECD Guidelines for MNEs, and have established an Human Rights Due Diligence Process in line with the Norwegian Transparency Act where we have used the OECD Guidelines in the implementation of the law, and based our due diligence process on the approach of the UNGP. 2. There exists no signals that Grieg Seafood has finally been found in breach of labor law or human rights. NUCLEAR AND FOSSIL GAS RELATED ACTIVITIES The disclosure requirement for Grieg Seafood’s exposure to nuclear and fossil gas related activities is provided in the table below. ROW NUCLEAR ENERGY RELATED ACTIVITIES YES/NO The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. FOSSIL GAS RELATED ACTIVITIES The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. No No No No No No 1 2 3 4 5 6 24 PART 02 - OUR OPERATIONAL RESULTSFIGURE 2.7 PROPORTION OF TURNOVER FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES ECONOMIC ACTIVITIES A. TAXONOMY-ELIGIBLE ACTIVITIES Substantial Contribution Criteria DNSH Criteria (‘Does not Significantly Harm’) Absolute turnover (mNOK) Proportion of turnover % Climate change mitigation % Climate change adaptation % Water and marine resources % Circular economy % Pollution % Code Biodiversity and ecosystems % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular economy Y/N Pollution Y/N Biodiversity and ecosystems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of total turnover, year N % Category (enabling activity) Category (transitional activity) A.1. Environmentally sustainable activities (Taxonomy-aligned) Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 Sea and coastal freight water transport, vessels for port operations and auxiliary activities Acquisition and ownership of buildings CCM 6.10 CCM 7.7 Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 Sea and coastal freight water transport, vessels for port operations and auxiliary activities Acquisition and ownership of buildings Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) CCM 6.10 CCM 7.7 Total (A.1+A.2) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy-non-eligible activities Total (A+B) FIGURE 2.8 PROPORTION OF CAPEX FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES 0 0 0 0 0 0 0 0 0 0% 100% 100% 100% 0% 0% 0% 0% 0% 0% 0% 0% 7 028 7 028 100% 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y 0% 0% 0% T T Substantial Contribution Criteria DNSH Criteria (‘Does not Significantly Harm’) ECONOMIC ACTIVITIES A. TAXONOMY-ELIGIBLE ACTIVITIES Absolute CapEx (mNOK) Proportion of CapEx % Climate change mitigation % Climate change adaptation % Water and marine resources % Circular economy % Pollution % Code Biodiversity and ecosystems % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular economy Y/N Pollution Y/N Biodiversity and ecosystems Y/N Minimum safeguards Y/N A.1. CapEx of environmentally sustainable activities (Taxonomy-aligned) Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 Sea and coastal freight water transport, vessels for port operations and auxiliary activities Acquisition and ownership of buildings CCM 6.10 CCM 7.7 CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 Sea and coastal freight water transport, vessels for port operations and auxiliary activities Acquisition and ownership of buildings CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) CCM 6.10 CCM 7.7 Total (A.1+A.2) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities Total (A+B) PART 02 - OUR OPERATIONAL RESULTS 0 0 0 0 6 611 191 808 808 0% 100% 100% 100% 0% 0% 0% 0% 40% 12% 53% 53% 722 1 530 47% 100% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y 0% 0% 0% T T 25 Taxonomy aligned proportion of total turnover, year N % Category (enabling activity) Category (transitional activity) FIGURE 2.9 PROPORTION OF OPEX FROM PRODUCTS OR SERVICES ASSOCIATED WITH TAXONOMY-ALIGNED ECONOMIC ACTIVITIES ECONOMIC ACTIVITIES A. TAXONOMY-ELIGIBLE ACTIVITIES Substantial Contribution Criteria DNSH Criteria (‘Does not Significantly Harm’) Absolute OpEx (mNOK) Proportion of OpEx % Climate change mitigation % Climate change adaptation % Water and marine resources % Circular economy % Pollution % Code Biodiversity and ecosystems % Climate change mitigation Y/N Climate change adaptation Y/N Water and marine resources Y/N Circular economy Y/N Pollution Y/N Biodiversity and ecosystems Y/N Minimum safeguards Y/N Taxonomy aligned proportion of total turnover, year N % Category (enabling activity) Category (transitional activity) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y 0% 0% 0% T T A.1. OpEx of environmentally sustainable activities (Taxonomy-aligned) Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 Sea and coastal freight water transport, vessels for port operations and auxiliary activities Acquisition and ownership of buildings CCM 6.10 CCM 7.7 OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1) A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) Transport by motorbikes, passenger cars and light commercial vehicles CCM 6.5 Sea and coastal freight water transport, vessels for port operations and auxiliary activities Acquisition and ownership of buildings OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) CCM 6.10 CCM 7.7 Total (A.1+A.2) B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities Total (A+B) 0 0 0 0 3 0 32 36 36 355 391 0% 100% 100% 100% 0% 0% 0% 1% 0% 8% 9% 9% 91% 100% PART 02 - OUR OPERATIONAL RESULTS 26 GRIEG SEAFOOD ROGALAND Grieg Seafood Rogaland farms salmon in the county of Rogaland on the west coast of Norway. In the region, we have seawater licenses with a maximum allowed biomass (MAB) of 17 800 tonnes. We have smolt and post-smolt facilities and also operate our own broodstock activity. We process and pack our salmon at our own facility. OPERATIONAL RESULTS A total of 25 980 tonnes was harvested in 2023, a decrease of 8% to reduce the number of sea lice treatments, resulting in 65% of compared to the 28 387 tonnes harvested in 2022. Despite this pens from which fish were harvested not receiving any treatment decline, sales revenues amounted to NOK 2 305 million in 2023, in 2023, compared to 54% in 2022. Notably, our efforts to ensure an increase of 9% compared to 2022 (NOK 2 124 million). This robust fish health have resulted in the elimination of antibiotics increase was primarily driven by higher spot prices, with the usage in Rogaland for several years. Read more about our post- Nasdaq spot price averaging NOK 92.3 per kg i 2023 compared to smolt results in “Our business strategy” in Part 1 of this report. NOK 82.0 per kg in 2022. However, the sale of 17% of our volume under fixed-price contracts coupled with quality downgrades, However, the costs associated with reduced survival (cost resulted in a decline in price achievement in 2023 to NOK 88.7 recognized as abnormal mortality in the income statement), per kg, compared to NOK 74.8 per kg in 2022. Additionally, the notably attributable to ISA, gill diseases, winter ulcers, and sea share of superior quality fish decreased from 84% in 2022 to 79% lice treatments, increased to NOK 56.6 million in 2023 (NOK 2.2 in 2023. per kg), compared to NOK 33.6 million in 2022 (NOK 1.2 per kg). The farming cost (the total cost of producing and harvesting our Our freshwater production was good in 2023, with close to fish) ended at NOK 60.4 per kg in 2023, up from NOK 48.2 per kg eight million smolt transferred to the sea, with an average weight in 2022. The industry experienced a general rise in costs in 2022, of 460 grams. Notably, the freshwater survival rate from our own in particular in feed prices, which has continued to impact the facility increased to 94% in 2023, up from 93% in 2022. farming cost until the generation of impacted fish is harvested. Despite encountering challenges related to Infectious Salmon risk related to ISA, increased the economic feed conversion Anemia (ISA), winter ulcers, and gill disease throughout the rate (eFCR, a measure of the feed utilization) from 1.38 in 2022 year, our underlying seawater production remained robust. Early to 1.42 in 2023. The farming cost was additionally impacted by harvest due to ISA impacted biomass growth, but the 12-month harvesting from ISA-affected sites, which increased the cost of rolling survival rate improved from 92% in 2022 to 94% in 2023. handling fish, including well boat costs. Additionally, reduced growth due to early harvest to minimize To address these challenges, we have intensified efforts to improve fish health and welfare, particularly focusing on the Due to our continued focus on escape prevention, we did not freshwater phase to ensure robust smolt. A vaccination program have any escape incidents in 2023. We also strive to minimize against ISA for all smolt released to sea has been initiated, along with additional measures at our smolt facilities to mitigate ISA- related risks. Furthermore, transferring larger and more robust smolt to sea farms has facilitated improved biological control and reduced disease impact. Our post-smolt results so far also indicates a higher survival rate. Thanks to the implementation of post-smolt and cleaner fish, including wrasse, we have managed PART 02 - OUR OPERATIONAL RESULTS our impact on local wildlife. Our operations did not harm any mammals during the year. However, three bird got caught in our nets, compared to four last year. We continue our efforts to reduce our impact. 25 980 TONNES GWT HARVESTED 28.3 OPERATIONAL EBIT/KG (NOK) 27 As part of our Climate Action Plan to reduce our carbon Aquaculture Stewardship Council (ASC) certification is an emissions by 35% in 2030, we are connecting our sea farms to the important objective, as we believe it provides our customers and onshore power grid, thereby lowering our carbon emissions from consumers with assurance that we are operating in a responsible diesel consumption. In Rogaland, 53% of our farms are powered manner and producing high-quality seafood certified to the by onshore electricity. Due to challenges in connecting the rest highest social and environmental standards. We aim to certify all SUSTAINABILITY SCOREBOARD of the farms, we have installed batteries to enable diesel-electric sites in Rogaland according to ASC. We started the certification PILLAR KPI TARGET STATUS 2023 2022 2021 2020 2019 power generation at three sites in 2023. Read more about our and audit process at the start of 2022, and had six of 11 eligible work to reduce carbon emissions in Part 02 - Climate action. sites ASC-certified by the end of 2023. This corresponds to 74% of harvested volume for the year. We are committed to maintaining a good working environment and keeping our employees safe. In 2023, the total absence rate for Rogaland was 3.9%, below the target of 4.5%. We monitor and follow up absence in accordance with our procedures and guidelines. Read more about how we work to secure our employees well-being and labor rights in Part 02 - People. FIGURE 2.10 RESULTS NOK MILLION Harvest (tonnes GWT) Revenue (NOK million) 2019 2020 2021 2022 2023 25 217 23 043 26 670 28 387 25 980 1 538.9 1 263.1 1 430.9 2 123.7 2 305.2 Operational EBIT (NOK million) 568.2 292.3 242.0 754.6 736.4 Operational EBIT / kg (NOK) Farming cost / kg (NOK) 22.5 35.9 12.7 42.1 9.1 44.6 26.6 48.2 28.3 60.4 FIGURE 2.11 OPERATIONAL EBIT AND HARVEST Harvest (tonnes GWT) Operational EBIT/kg (NOK) ) T W G S E N N O T ( T S E V R A H 30 000 25 000 20 000 15 000 10 000 5 000 0 30 25 20 15 10 5 0 2019 2020 2021 2022 2023 I O P E R A T O N A L E B T K G / I ( N O K ) PROFIT & INNOVATION HEALTHY OCEAN Harvest volume (tonnes GWT) 29 000 tonnes in 2023 Operational EBIT per kg (NOK) Farming cost per kg (NOK) Cost leader ASC certification (# of sites) All sites (11 eligible) by 2023 Survival rate in freshwater Survival rate at sea 95% by 2023 Cost of reduced survival (NOK 1 000) Use of antibiotics (g per tonne LWE) * No use of antibiotics Use of hydrogen peroxide (kg per tonne LWE) * Minimize use of pharmaceutical treatments Sea lice treatments - in feed (g per tonne LWE) * Minimize use of pharmaceutical treatments Sea lice treatments - in bath (g per tonne LWE) * Minimize use of pharmaceutical treatments Escape incidents (# of fish) Zero escape incidents Dead birds Dead marine mammals SUSTAINABLE FOOD Carbon emissions (kgCO2e per tonne GWT) Scope 1 + 2 location based Scope 3 Minimize impact on wildlife in 2023 Minimize impact on wildlife in 2023 35% reduction (from 2018) in total emissions by 2030 High quality product 93% superior share Biological feed conversion ratio (bFCR) Economic feed conversion ratio (eFCR) PEOPLE Employees Absence rate Below 4.5% Lost time incident rate ** Turnover rate LOCAL COMMUNITIES Local procurement ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 25 980 28 387 26 670 23 043 25 217 28.3 60.4 6 94% 94% 26.6 48.2 5 93% 92% 9.1 44.6 0 94% 92% 12.7 42.1 0 95% 90% 22.5 35.9 0 93% 93% 56 638 33 553 30 804 63 664 26 127 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.58 7.21 11.94 0.00 1.61 3.74 0.00 0.03 0.13 0.05 0.63 0.02 0.00 0 3 0 0 4 0 0 13 0 0 20 0 0 2 0 295 272 332 403 392 5 636 5 289 5 676 7 641 8 200 79% 84% 81% 85% 75% 1.27 1.24 1.26 1.22 1.17 1.42 1.38 1.43 1.44 1.28 181 175 162 165 157 3.9% 5.6% 3.0% 3.0% 3.5% 32 25 15% 11% 42 n/a 9 n/a 15 n/a 41% 52% 60% 64% 64% * Amount of active pharmaceutical ingredients (APIs) used (in gr or kg) per tonne of fish produced (LWE). ** An LTIR target has not been defined in order to avoid under-reporting of incidents. n/a: Data not available or applicable. Please refer to Part 1 - Our pillars and material topics for a description of the general financial impact of each topic. PART 02 - OUR OPERATIONAL RESULTS 28 FIGURE 2.12 SURVIVAL RATE AT SEA, ROLLING 12 MONTHS FIGURE 2.13 MAIN CAUSES FOR REDUCED SURVIVAL IN SEAWATER IN 2023 FIGURE 2.14 MAIN CAUSES FOR REDUCED SURVIVAL IN SEAWATER (NUMBER OF FISH) Target: 95% 95% 90% 85% 80% 75% 2019 2020 2021 2022 2023 We have also set targets for survival rates in fresh water. 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. The calculation of survival rate at sea corresponds to the GSI indicator "Fish Mortality" which is defined as "12 months rolling mortality = total # of mortalities in sea last 12 months / (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". MAIN CAUSE Diseases Handling and/or treatments Non-infectious diseases Other known Unknown Total Abnormal seawater mortality write-down % NUMBER OF FISH TONNES OF FISH 459 423 1 595 106 015 4 626 18 959 309 343 898 366 430 081 48% 250 12 90 737 2 684 952 35% 500 000 400 000 300 000 200 000 100 000 0 2021 Diseases Diseases Treatments Handling and/or treatments Non-infectious diseases Non-infectious diseases Other known Other known Unknown Unknown 2022 2023 The main causes of reduced survival in seawater are categorized according to a new standardized mortality classification scheme developed in 2023 by the Norwegian University of Life Sciences (NMBU) together with industry leaders. In previous years, we have classified mortality by the main categories ”infectious and “non-infectious” with subcategories. Historical data is reclassified according to the new standard. We perform a daily count and registration of dead fish. Laboratory analysis are undertaken to establish the main cause of mortality. In some cases, the cause of mortality can be difficult to establish due to various reasons such as weather- and environmental conditions, and the lack of diagnostic tools on site to identify causal agents. Mortality caused by diseases in 2023 was mainly related to winter ulcers and complex gill disease (CGD). Gill infections are in most cases complex and multifactorial, and the primary cause is unknown. Gill infection is a welfare issue, as well as being an important cause of mortality. In addition, handling and treatments that led to lesions and bacterial infections (including winter ulcers) were also a main driver for reduced survival. In addition to being a welfare issue, winter ulcers can lead to increased mortality and reduced quality at harvest. Our fish are vaccinated against the disease, however, high challenge pressure and presence of other strains or bacteria can also cause skin ulcers. Site-specific information about treatments and notifiable diseases are publicly available at Barentswatch. FIGURE 2.15 SEA LICE LEVELS (ADULT FEMALES) 2019 2020 2021 2022 2023 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 sea lice per fish per site PART 02 - OUR OPERATIONAL RESULTS 29 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 has a yellow light under Norway’s “traffic light” system (“yellow - moderate sea lice density", the current level of production capacity will be maintained). Sea lice counts are conducted by visual inspections, done by lifting a minimum of 20 salmon out of the water for each pen on a weekly or biweekly basis, depending on the seawater temperature. The number of sea lice on each fish is recorded in our systems, and this information is used to estimate the overall prevalence of sea lice in the population. The sea lice counts are calculated as the average number of adult female sea lice per month. Sea lice levels shall stay below the legal limit of 0.5 adult female per fish, or 0.2 during April and May when the wild salmon smolt migrate from the rivers and pass the fjords. On average, we did not exceed the sea lice limits in 2023. 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. FIGURE 2.16 USE OF COPPER FIGURE 2.17 RESTORED ECOSYSTEMS UNDER FARMS OPERATIONAL PRIORITIES  LOCAL COMMUNITIES Copper-free antifouling solutions on nets We used one net with copper antifouling solutions at one site in Rogaland in 2023 Remediated ecosystems under farms before a new generation of fish was transferred to the farms in 2023 100% of farms We expect to harvest 28 000 tonnes in 2024, with an ambition to We aim to be open and honest with local communities about increase harvest to 35 000-40 000 by improving the utilization our production methods, our successes, and our remaining Restored to “very good” or “good” thresholds according to local regulations. of our seawater capacity. The key to achieving this, is to reduce challenges. We view it as our responsibility throughout all of our Very poor Test not yet taken (new sites) time, reduce our impact and improve growth in sea in the local apprentices and support aquaculture schools and training production time in the sea, which we expect to result in improved four farming regions to engage in constructive dialogue with biological performance and a higher utilization of each site’s all stakeholders and groups that are impacted by our activities. maximum allowable biomass (MAB). Read more about how larger We create jobs and opportunities in the rural areas where we smolt (post smolt) will significantly reduce seawater production operate, and we use local suppliers as often as we can. We hire FIGURE 2.18 RESULTS OF B-TEST Year 2023 2022 2021 Very good 73% 75% 83% Good 18% 17% 17% Poor 9% 8% 0% 0% 0% 0% 0% 0% 0% 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 fish nets. This impact should never be irreversible. Read more about our impact on nature here. Between each generation of fish, we allow the ecological system to rest and restore itself. In Norway, all farms are required to conduct independent seabed tests (B-test) at peak biomass production/max load, and undertake regular independent tests in the area around the farms (C-test). Local regulations impose fallowing periods after each generation to ensure the environment under and around the pen recover. The minimum fallowing period is at least two months, and longer if seabed test results indicate that is needed. Only when a farm has reached the threshold of restoration, may we transfer a new generation of fish to the site. If fallowing is not enough to improve seabed test results, additional measures, such as reducing production, is taken. In 2023, 91% of our sites received a very good or good score on seabed tests compared to 92% in 2022. The results are based on last B-test taken for each site that is part of our ongoing operations, either at peak biomass production/max load, or before restocking when the seabed has recovered. We have one site in Rogaland where the ecosystem takes longer to recover, and where we performed testing at peak biomass in 2022 and 2023. The site that received a poor score must fallow for longer. Results of the B-tests are publicly available information, please see The Directorate of Fisheries. According to the Risk Report of Norwegian Fish Farming by the Institute of Marine Research, the risk of impact from organic waste from fish farming is low and the environmental ecosystem condition is good in Rogaland (the salmon production area PO2). Grieg Seafood has partnered with other salmon farming companies in Rogaland to commission an independent environmental monitoring program, to ensure that the combined organic emissions from all the farms do not significantly impact the fjords. The program monitors the water quality and possible eutrophication in the Ryfylke fjord system. The results after a decade of monitoring show that the fjord system’s environmental condition is good. FIGURE 2.19 PROTECTING MARINE ECOSYSTEMS Impact assessments performed Operations in protected areas/areas of high biodiversity value Red list species impacted 100% of farms Two broodstock farms, total water surface area of 0.083km2 One species (2 birds) We perform environmental and social impact assessment for all of our farms. The assessment also include presence of cauliflower corals. These assessments are also part of the ASC certification process, which includes criteria to minimize environmental impact and preserve biodiversity. Two broodstock sites in Rogaland are located in Sandsfjorden, a "national salmon fjord" category created by the Norwegian Parliament to protect wild salmon. These seawater farms were present prior to the establishment of the category, and became subject to certain restrictions as a result. We do have sites in the proximity of land nature reserves, but we do not have any other sites in or adjacent to protected areas or areas of high biodiversity value (areas defined as Special Areas of Conservation (SAC), Marine Protected Areas (MPA), High Conservation Value Areas (HCVA) or Federal Marine Protected Areas). For the definition of protected areas and areas of high biodiversity value, we refer to the ASC Salmon Standard. All site locations are available on our website. FIGURE 2.20 IUCN RED LIST- AND NATIONAL CONSERVATION LIST SPECIES Critically endangered Endangered Vulnerable Near threatened Least concern IUCN Red List Artsdatabanken 10 6 13 17 45 28 47 22 940 296 Our impact assessments also include identification of species listed in the IUCN Red List and Norway’s national conservation list, Artsdatabanken, with habitats in areas where we operate. The International Union for Conservation of Nature (IUCN) ‘Red List of Threatened Species’ provides an inventory of the global conservation status of plant and animal species, and national conservation lists serve as authorities on the sensitivity of habitat in areas affected by our operations, and on the relative importance of these habitats from a management perspective. Our assessments have not identified that our activities pose a threat to any endangered plants or animal species. We keep track of red listed species impacted in areas affected by our operations as a part of the ASC-certification. In 2023, we had three incidents which involved two Black-headed gulls, which according to Norway’s national conservation list is critically endangered, and one Mew gull, which according to Norway’s national conservation list is vulnerable. The Mew gull and one Black-headed gull have drowned. One Black- headed gull was found entangled in the anti-bird net. We have changed our procedures to ensure we keep our nets tight to prevent similar incidents. Each year we monitor beach areas in proximity to our active sites in Rogaland (the size of the beach areas varies and we do not keep track of this, only positioning in terms of coordinates). This is done to ensure that the algae and seagrass vegetation and other species are healthy, and not negatively impacted by our farming operations. Algae and seagrass can sequester carbon dioxide in their roots, and also provide nursery, refuge and foraging habitats for marine animals. In 2023, we conducted several assessments. The results showed no significant impact from our farming operations. We continue to monitor beach areas each year to keep track of changes and will implement protective measures if negative impact is detected. operational focus area chapter in Part 1 of this report. In 2023, facilities. We sponsor sports and cultural activities, and we 65% of fish harvested were from post-smolt. In 2023, the average engage in monitoring and protection of the local environment. weight of smolt transferred to sea was 460 grams. We aim to We also provide a grievance mechanism for local communities increase the average smolt weight to 1 kg in 2027. on our regional website as well as a whistle blower channel. This enable us to identify and prevent potential negative impact Another tool that will improve biology and drive growth, is our on local communities, such as pollution of local environment Precision Farming strategy. Read more about Precision Farming and violations of human rights. In 2023, we did not identify any in our operational focus areas chapter in Part 1 of this report. significant negative impact on local communities from our operations. We are well-positioned with land-based production, and aim to add at least 4 500 tonnes by increasing our post-smolt capacity. Our current freshwater facilities at Trosnavåg and Hognaland have a production capacity of 1 200 tonnes smolt. We also have a 33% shareholding in Tytlandsvik Aqua, with a current smolt production capacity of 6 000 tonnes (where Grieg Seafood Rogaland is entitled to 50% of the smolt). Tytlandsvik is exploring additional capacity of 3 000 tonnes, possibly adding 1 500 tonnes of smolt to Grieg Seafood Rogaland. In addition, we use two closed-containment facilities in sea, FishGLOBE, to produce post-smolt. These facilities have a total capacity of 900 tonnes. Further, we have a 44% shareholding in Årdal Aqua, a land-based facility with the same design as Tytlandsvik Aqua. Årdal Aqua is expected to produce at least 4 500 tonnes of post-smolt annually from 2025. Due to the introduction of a resource rent tax in 2023, we have not had any strategic investments in Rogaland this year, however, we have spent a total of NOK 77 million in maintenance investments. equal to 41% of total purchases, spent on goods and services purchased from local suppliers in the county of Rogaland. NOK 799 million NOK 1.9 million  donated to local services and projects, all of which are pro bono. We support preserving the coastal history of our region, positioning ourselves within the timeline of coastal culture and the Norwegian way of life connected to the sea. Our contributions include sponsoring the restoration of a local fishing boat and books on local history. 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 supported Childern’s Mablis, a family festival in the woods. We also support sports clubs in the municipalities where we have farms. NOK 16.9 million in direct support from the Norwegian Aquaculture Fund to the municipalities where we operate, based on the production fee of NOK 0.56/kg (gutted weight) for volume harvested during the first half of 2023 and NOK 0.90/kg (gutted weight) for volume harvested during the second half of 2023. Learn more about our relationships with our local community on our website, PART 02 - OUR OPERATIONAL RESULTS 30 25 170 TONNES GWT HARVESTED 13.0 OPERATIONAL EBIT/KG (NOK) GRIEG SEAFOOD FINNMARK Grieg Seafood Finnmark farms salmon in Troms and Finnmark, the northernmost county in Norway. We have seawater licenses with a maximum allowed biomass (MAB) of 27 000 tonnes, including green licenses which are subject to stricter environmental standards. We also operate freshwater facilities. In general, the salmon we harvest are processed and packed at our local facility in Alta. OPERATIONAL RESULTS A total of 25 170 tonnes was harvested in 2023, a decrease of 30% Seawater production has been significantly impacted by compared to the 36 024 tonnes harvested in 2022. Sales revenues biological challenges this year. Historically, Finnmark is a region amounted to NOK 1 947 million, a decrease of 26% compared to with lower seawater temperatures which, combined with low NOK 2 629 million in 2022. The year-on-year reduction is related interconnectivity between farming sites, helps to keep sea lice to the lower harvest volume. The Nasdaq average spot price in levels low. We use targeted preventive methods, such as sea 2023 was NOK 92.3 per kg, compared to NOK 82.0 per kg in 2022. lice skirts, to ensure that the sea lice level remains low. Despite Our price achievement in 2023 was NOK 77.3 per kg (NOK 73.0 the natural advantages and our preventive measures, we have per kg in 2022). The price achieved was significantly depressed by experienced an increase in sea lice pressure since the summer downgrades, in addition to the sale of 15% of our volume under of 2022, which has necessitated several treatments, resulting in fixed-price contracts. The superior quality share decreased reduced feeding and growth. We have however, managed to keep from 86% in 2022 to 58% in 2023 due to impact from the parasite the sea lice level stable and lower than last year as a result of Spironucleus Salmonicida (Spiro) in addition to winter ulcers and being able to perform sea lice treatments at an early stage. string jellyfish. Additionally, Spiro has continued to impact the seawater Freshwater production at our own facility at Adamselv was good production throughout the year, leading to early harvesting and during the year. Throughout the year, we have performed regular the culling of fish with sickness signs to protect fish welfare. testing for Spiro, which was detected in fish from Adamselv Towards the end of the year, we, together with several fish in 2022. The source of the parasite is believed to be the water farmers in Norway, experienced an increasing impact from string intake to the facility. Water treatment equipment have been jellyfish and winter ulcers. This has affected the biomass growth. installed and disinfection measures have been implemented to Measures to reduce the impact from winter ulcers include feed significantly reduce future risks of Spiro in the freshwater facility. composition and vaccination. We are also performing testing with We also collaborate with research institutions to close knowledge probiotic treatments before transferring fish to sea to increase gaps related to Spiro. We have not had any new detections of the robustness of the salmon. We also participate in several Spiro at the freshwater facility in 2023. We transferred a total of research projects across the industry to identify best practices 12.2 million smolt with an average weight of 210 grams to the to combat these challenges. We are monitoring the situation sea in 2023. The freshwater survival rate increased from 90% continuously to safeguard the welfare of the fish. Nevertheless, in 2022 to 95% in 2023. During the year, we have completed a redesign of the freshwater facility at our jointly-owned Nordnorsk Smolt, where we commenced production in the autumn. our 12-month survival rate improved from 91% in 2022 to 92% in 2023, due to better survival of the new generation. We anticipate Spiro to have an impact on the production until the generation is completely harvested by Q2 2024. PART 02 - OUR OPERATIONAL RESULTS 31 Spiro has also impacted our cost of reduced survival (cost As part of our Climate Action Plan to reduce our carbon recognized as abnormal mortality in the income statement) the emissions by 35% in 2030, we have connected our feed barges last years, which came to NOK 95.5 million in 2023 (NOK 3.8 per to the onshore power grid. In Finnmark, 57% of our farms are kg) and NOK 100.6 million in 2022 (NOK 2.8 per kg). The farming connected to the onshore grid. For sites that are not suitable for cost (the total cost of producing and harvesting our fish) ended the provision of onshore power, we use diesel-electric batteries SUSTAINABILITY SCOREBOARD at NOK 64.4 per kg in 2023, up from NOK 47.3 per kg in 2022. In to reduce carbon emissions. We have only one more remaining PILLAR KPI TARGET STATUS 2023 2022 2021 2020 2019 addition to reduced survival and early harvest of fish impacted by barge without electrification or diesel-electric batteries left Spiro, the farming cost was impacted by a general rise in cost. in Finnmark. This means that 95% of all operational sites and This applies in particular to feed, whose prices increased by barges are reducing their annual fossil fuel emissions. Read PROFIT & INNOVATION Harvest volume (tonnes GWT) 33 000 tonnes in 2023 Operational EBIT per kg (NOK) close to 40% from 2021 to 2022. This impacted our farming cost more about how we work to reduce our carbon emissions in Part Farming cost per kg (NOK) Cost leader in 2023, when we have harvested fish impacted by the increases. 02 - Climate action. Additionally, reduced growth due to biological challenges increased our economic feed conversion rate (eFCR, a measure We are committed to maintaining a good working environment HEALTHY OCEAN ASC certification (# of sites) All sites (18 eligible) by 2023 Survival rate in freshwater of the feed utilization) from 1.40 in 2022 to 1.48 in 2023. Overall, and keeping our employees safe. In 2023, the total absence Survival rate at sea 95% by 2023 we are working to improve survival rates through both general rate for Finnmark was 8.0%, against a target of 4.5%. We are and targeted health and welfare measures. Good results from monitoring and following up on absence in accordance with vaccines and efforts to ensure robust fish health have eliminated procedures and guidelines. Read more about how we work to the need of antibiotics for several years. However, we did use the secure our employees well-being and labor rights in Part 02 - antibiotic Florfenicol in the beginning of the year to safeguard the People. welfare of fish at selected pens impacted by sores. We have a continuous focus on escape prevention, as we regard improving fish welfare, achieving a high survival rate and working it as our responsibility to avoid interbreeding between our farmed towards sustainable production. As a result of our efforts in the salmon and local wild salmon should an escape occur. We had no area, 17 out of 18 eligible sites were ASC certified at year end. escapes in 2023. We are also working on measures to minimize This is equivalent to 74% of harvested volume for the year. New our impact on local wildlife. No birds and no mammals got sites must reach peak biomass to be considered for certification. As in all our regions, Grieg Seafood Finnmark focuses on caught in our nets in 2023. FIGURE 2.21 RESULTS FINNMARK Harvest (tonnes GWT) Revenue (NOK million) 2019 2020 2021 2022 2023 32 362 26 919 34 484 36 024 25 170 1 815.3 1 313.5 1 756.3 2 629.2 1 946.6 Cost of reduced survival (NOK 1 000) Use of antibiotics (g per tonne LWE) * No use of antibiotics Use of hydrogen peroxide (kg per tonne LWE) * Minimize use of pharmaceutical treatments Sea lice treatments - in feed (g per tonne LWE) * Minimize use of pharmaceutical treatments Sea lice treatments - in bath (g per tonne LWE) * Minimize use of pharmaceutical treatments Escape incidents (# of fish) Zero escape incidents Dead birds Dead marine mammals SUSTAINABLE FOOD Carbon emissions (kgCO2e per tonne GWT) Scope 1 + 2 location based Scope 3 Minimize impact on wildlife in 2023 Minimize impact on wildlife in 2023 35% reduction (from 2018) in total emissions by 2030 Operational EBIT (NOK million) 580.2 127.4 250.5 926.1 326.6 High quality product 93% superior share Operational EBIT / kg (NOK) Farming cost / kg (NOK) 17.9 37.7 4.7 44.1 7.3 43.7 25.7 47.3 13.0 64.4 FIGURE 2.22 OPERATIONAL EBIT AND HARVEST Harvest (tonnes GWT) Operational EBIT/kg (NOK) ) T W G S E N N O T ( T S E V R A H 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 30 25 20 15 10 5 0 2019 2020 2021 2022 2023 I O P E R A T O N A L E B T K G / I Biological feed conversion ratio (bFCR) Economic feed conversion ratio (eFCR) PEOPLE Employees Absence rate Below 4.5% 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). ** An LTIR target has not been defined in order to avoid under-reporting of incidents. n/a: Data not available. ( N O K ) Please refer to Part 1 - Our pillars and material topics for a description of the general financial impact of each topic. ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 25 170 36 024 34 484 26 919 32 362 13.0 64.4 17 95% 92% 25.7 47.3 17 90% 91% 7.3 43.7 18 95% 95% 4.7 44.1 15 89% 92% 17.9 37.7 10 87% 96% 95 525 100 567 53 133 37 495 15 055 2.63 6.77 5.98 0.00 0.00 7.68 6.54 2.36 3.62 0.00 0.18 0.07 0.14 0.14 0.10 0.74 0.73 0.34 0.82 0.21 0 0 0 1 (2 878) 1 (4 352) 20 0 8 0 0 6 0 0 2 0 241 151 166 182 169 4 997 3 774 4 492 5 973 5 330 58% 86% 82% 69% 86% 1.26 1.23 1.21 1.20 1.14 1.48 1.40 1.34 1.35 1.21 300 283 262 257 256 8.0% 9.7% 8.7% 5.5% 4.9% 22 17% 21 16% 22 n/a 28 n/a 22 n/a 28% 28% 45% 60% 66% PART 02 - OUR OPERATIONAL RESULTS 32 FIGURE 2.23 SURVIVAL RATE AT SEA, ROLLING 12 MONTHS FIGURE 2.24 MAIN CAUSES FOR REDUCED SURVIVAL IN SEAWATER IN 2023 FIGURE 2.25 MAIN CAUSES FOR REDUCED SURVIVAL IN SEAWATER (NUMBER OF FISH) 100% 95% 90% 85% 80% 75% Target: 95% MAIN CAUSE Diseases Environmental Handling and/or treatments Non-infectious diseases Predators Smolt related Other known Unknown Total Abnormal seawater mortality write-down % NUMBER OF FISH TONNES OF FISH 856 485 80 526 28 412 348 667 119 338 419 842 848 1 929 043 1 183 970 61% 1 726 29 73 1 1 25 1 1 538 3 395 1 698 50% 2019 2020 2021 2022 2023 We have also set targets for survival rates in fresh water. 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. The calculation of survival rate at sea corresponds to the GSI indicator "Fish Mortality" which is defined as "12 months rolling mortality = total # of mortalities in sea last 12 months / (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". 800 000 600 000 400 000 200 000 0 2021 Diseases Smolt related Treatments Diseases Predators Unknown Other known 2022 2023 Non-infectious diseases Handling and/or treatments Smolt related Predators Non-infectious diseases Other known Unknown The main causes of reduced survival in seawater are categorized according to a standardized mortality classification scheme developed by the Norwegian University of Life Sciences (NMBU) together with industry leaders. In previous years, we have classified mortality by the main categories ”infectious and “non-infectious” with subcategories. Historical data is reclassified according to the new standard. We perform a daily count and registration of dead fish. Laboratory analysis are undertaken to establish the main cause of mortality. In some cases, the cause of mortality can be difficult to establish due to various reasons such as weather- and environmental conditions, and the lack of diagnostic tools on site to identify causal agents . Mortality caused by lesions from string jelly fish encounters, treatments and after effects from parasitic infestations were the main drivers for reduced survival. Diseases include Spironucleus salmonicida and winter ulcers, a bacterial infection. In addition to being a welfare issue, winter ulcers can lead to increased mortality and reduced quality at harvest. Our fish are vaccinated against the disease, however, high challenge pressure and presence of other strains or bacterias can also cause skin ulcers. We have used antibiotics during the year to treat our fish from winter ulcers. The parasite Spironucleus salmonicida (Spiro) is a rare parasite that can lead to high mortality. In 2023, we culled fish showing signs of ill health from the parasite Spiro. According to the standardized classification scheme, mortality does not include culling of fish. Site-specific information about treatments and notifiable diseases are publicly available at Barentswatch. FIGURE 2.26 SEA LICE LEVELS (ADULT FEMALES) 2019 2020 2021 2022 2023 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 0.5 0.4 0.3 0.2 0.1 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The sea lice counts are calculated as the average number of adult female sea lice per month. Sea lice levels shall stay below the legal limit of 0.5 adult female per fish. 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. Sea lice counts are conducted by visual inspections, done by lifting a minimum of 20 salmon out of the water for each pen on a weekly or biweekly basis, depending on the seawater temperature. The number of sea lice on each fish is recorded in our systems, and this information is used to estimate the overall prevalence of sea lice in the population. On average, we did not exceed the sea lice limits in 2023. 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. PART 02 - OUR OPERATIONAL RESULTS 33 FIGURE 2.27 USE OF COPPER FIGURE 2.28 RESTORED ECOSYSTEMS UNDER FARMS OPERATIONAL PRIORITIES LOCAL COMMUNITIES Copper-free antifouling solutions on nets We used two nets with copper antifouling solutions at one site in Finnmark in 2023 Remediated ecosystems under farms before a new generation of fish was transferred to the farms in 2023 100% of farms Restored to “very good” or “good” thresholds according to local regulations. FIGURE 2.29 RESULTS OF B-TEST Year 2023 2022 2021 Very good Good 86% 62% 43% 14% 33% 10% Poor 0% 0% 19% Very poor Sites with hard seabed (do not get a score) Test not yet taken (new sites) 0% 5% 5% 0% 0% 14% 0% 0% 10% 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 fish nets. This impact should never be irreversible. Read more about our impact on nature here. Between each generation of fish, we allow the ecological system to rest and restore itself. In Norway, all farms are required to conduct independent seabed tests (B-test) at peak biomass production/max load, and undertake regular independent tests in the area around the farms (C-test). Local regulations impose fallowing periods after each generation to ensure the environment under and around the pen recover. The minimum fallowing period is at least two months, and longer if seabed test results indicate that is needed. Only when a farm has reached the threshold of restoration, may we transfer a new generation of fish to the site. If fallowing is not enough to improve seabed test results, additional measures, such as reducing production, is taken. 100% of our sites received a very good or good score on seabed tests in 2023, up from 95% in 2022. The results are based on last B-test taken for each site that is part of our ongoing operations, either at peak biomass production/max load, or before restocking when the seabed has recovered. Longer fallowing periods are in place for sites with poor scores, and a new generation will not be stocked until the impact is reversed and the sites have met the regulated restoration thresholds. Access to new sites will also reduce the organic impact. In addition, we are conducting digital analyses of the marine conditions at sites to understand how the farms can hit the currents in the most optimal way, which reduces the organic impact. We are subsequently working with local authorities to adjust the farms accordingly. Results of the B-tests are publicly available information, please see The Directorate of Fisheries. According to the Risk Report on Norwegian Fish Farming by the Institute of Marine Research, the risk of impact from organic waste from fish farming in Finnmark (the salmon production area PO12) is low and the environmental ecosystem condition is good. An environmental study of the organic impact of fish farming in the Alta fjord, published in 2017, showed low impact on the fjord system. FIGURE 2.30 PROTECTING MARINE ECOSYSTEMS Impact assessments performed Operations in protected areas/areas of high biodiversity value Red list species impacted 100% of farms One harvest site, total area of 0.004 km2 of the water surface 0 We perform environmental and social impact assessment for all of our farms. Such assessments are also part of the ASC certification process, which includes criteria to minimize environmental impact and preserve biodiversity. Our harvesting plant in Finnmark, where we have the fish ready to be harvested in one seawater pen, is located in Altafjorden, a "national salmon fjord" category created by the Norwegian Parliament to protect wild salmon. The harvesting plant was present prior to the establishment of the category, and became subject to certain restrictions as a result. We do have sites in the proximity of land nature reserves, but we do not have any other sites in or adjacent to protected areas or areas of high biodiversity value (areas defined as Special Areas of Conservation (SAC), Marine Protected Areas (MPA), High Conservation Value Areas (HCVA) or Federal Marine Protected Areas). For the definition of protected areas and areas of high biodiversity value, we refer to the ASC Salmon Standard. All site locations are available on our website. FIGURE 2.31 IUCN RED LIST- AND NATIONAL CONSERVATION LIST SPECIES Critically endangered Endangered Vulnerable Near threatened Least concern IUCN Red List Artsdatabanken 10 6 13 10 45 22 47 24 940 294 Our impact assessments also include identification of species listed in the IUCN Red List and Norway’s national conservation list, Artsdatabanken, with habitats in areas where we operate. The International Union for Conservation of Nature (IUCN) ‘Red List of Threatened Species’ provides an inventory of the global conservation status of plant and animal species, and national conservation lists serve as authorities on the sensitivity of habitat in areas affected by our operations, and on the relative importance of these habitats from a management perspective. Our assessments have not identified that our activities pose a threat to any endangered plants or animal species. We keep track of red listed species impacted in areas affected by our operations as a part of the ASC certification. As a part of our commitment to co-existence with wild salmon, the Alta river (total length of 47 km) and the Repparfjord river (total length of 100 km) in Finnmark are monitored in collaboration with the Norwegian Institute for Nature Research, the management of the Alta rivers, and the West Finnmark Hunting and Fishing Association. The objective is to investigate the impact of escaped farmed salmon from recreational fishing, and to evaluate the need for enhanced protective measures. In 2023, 485 shell samples was submitted from the Alta river, whereas no samples was identified as escaped farmed salmon. In the Repparfjord river, one (0.2%) out of 547 shell samples submitted was identified as farmed salmon. Read more about these projects here. Grieg Seafood Finnmark targets a harvest volume of 27 000 tonnes in 2024, with an ambition to increase harvest to 40 000-45 000 by improving the utilization of our seawater capacity. The key to achieving this is to optimize our existing site structure, obtaining new sites and reducing production time at sea, which we expect to result in improved biological performance and a higher utilization of each site’s MAB. We currently farm smolt at our own facility in Adamselv and at Nordnorsk Smolt, in which we have a 50% shareholding. We are targeting a capacity increase of 3 000 tonnes of post-smolt at Adamselv. The construction of the new post-smolt unit in Adamselv commenced at the end of the year. Larger smolt will significantly reduce seawater production time, avoiding two winters at sea, while also providing increased flexibility in timing their transfer to seawater, as larger fish is more robust. Shorter time in sea will also decrease the fishes’ exposure to issues such as winter ulcers, sea lice and other biological challenges. Flexibility is a requirement to achieve better utilization of our capacity, and we are also continuously looking for opportunities to secure access to new sites. In 2023, we spent NOK 141 million in growth investments, mainly related to the UV water treatment system at our current freshwater facility in and construction start-up of the new post-smolt unit in Adamselv, in addition to NOK 169 million in maintenance investments. We aim to be open and honest with local communities about our production methods, our successes, and our remaining challenges. We view it as our responsibility throughout all of our four farming regions to engage in constructive dialogue with all stakeholders and groups that are impacted by our activities. We create jobs and opportunities in the rural areas where we operate, and we use local suppliers as often as we can. We hire local apprentices and support aquaculture schools and training facilities. We sponsor sports and cultural activities, and we engage in monitoring and protection of the local environment. We also provide a grievance mechanism for local communities on our website. This enable us to identify and prevent potential negative impact on local communities This enable us to identify and prevent potential negative impact on local communities, such as pollution of local environment and violations of human rights. In 2023, we did not identify any significant negative impact on local communities from our operations. Finnmark has been home to the Sami people for millennia. We recognize that the Sami people 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. We are in a process to understand how we can advance the Same culture in Finnmark. We continue our close dialogue with the Sami people and we did not identify any violations of their rights caused by our operations in 2023. NOK 585 million equal to 28% of total purchases, spent on goods and services purchased from local suppliers in the county of Troms and Finnmark. NOK 2.7 million donated to local services and infrastructure projects, all of which are pro bono. Amongst other clubs and events, we support the local sports club Bossekopp and cultural festivals like Nordkapp Film Festival. Bossekopp is located in Alta, where we have our local administration office and our harvesting plant. The Nordkapp Film Festival is a small and intimate festival located in Honningsvåg. The Nordkapp Film Festival is an important meeting place for the northern Norwegian film industry. We also sponsored Finnmarksløpet – the longest dog sled race in Europe. The 1 200 km race starts in Alta, with the course going all the way to the Russian border and back again. Competitors must tackle challenging terrain and harsh winter conditions. NOK 18.1 million in direct support from the Norwegian Aquaculture Fund to the municipalities where we operate, based on the production fee of NOK 0.56/kg (gutted weight) for volume harvested during the first half of 2023 and NOK 0.90/kg (gutted weight) for volume harvested during the second half of 2023. Learn more about our relationships with our local community on our website, PART 02 - OUR OPERATIONAL RESULTS 34 17 682 TONNES GWT HARVESTED -5.3 OPERATIONAL EBIT/KG (NOK) GRIEG SEAFOOD BRITISH COLUMBIA Grieg Seafood BC Ltd farms salmon on the east and west sides of Vancouver Island, north of Vancouver. The company's operations includes land-based production of smolt, broodstock and seawater production. We process our BC salmon externally. OPERATIONAL RESULTS A total of 17 682 tonnes was harvested in 2023, 13% lower than means to manage diseases, such as vaccines and an adapted in 2022 (20 286 tonnes). Harvesting volumes vary every other diet. Infrastructure such as the barrier system, might also aid in year regardless of the underlying biological performance, due to reducing disease transmission. an imbalance in the number of farms and maximum allowable biomass (MAB) in the different production areas on the East and BC has low sea lice levels during the important out-migration West Coast of Vancouver Island. Sales revenues for the year period (when the juvenile wild salmon pass our farms on amounted to NOK 1 468 million, a decrease of 12% compared to their way from the rivers to the ocean). However, the region NOK 1 665 million in 2022. According to Urner Barry, the average is influenced by sea lice pressure each autumn, during the spot price (farm-raised salmon Seattle West Coast, fresh, whole in-migration period when adult wild salmon pass our farms fish) was NOK 84.7 per kg in 2023, compared to NOK 84.1 per on their way back to the rivers to spawn. Sea lice are then kg in 2022. Our price achievement was NOK 83.0 per kg in 2023, transferred from the wild salmon to the farmed salmon, with compared to NOK 82.1 per kg in 2022. The price achievement was risk of multiplication within the farms. In BC, unlike Norway, the positively impacted by an increased share of superior quality fish, wild salmon population greatly outnumbers the farmed salmon which improved from 85% in 2022 to 90% in 2023. population. Our barrier system have shown potential to improve sea lice control significantly. When additional measures are The freshwater production has experienced reduced survival needed, we carry out the type of treatment most appropriate to due to technical issues which has impacted the number of the biological situation. During 2023, medicinal sea lice treatment smolt transferred to sea this year. The freshwater survival rate with hydrogen peroxide and in-feed treatments were used to decreased from 84% in 2022 to 81% in 2023. We have added reduce and maintain a stable sea lice level. We aim to reduce the additional expertise at the hatchery to address the production use of medical sea lice treatments through a combination of a issues. barrier system between the farmed salmon and the environment and use of the latest mechanical sea lice removal tool. Seawater production was stable in 2023, and the 12-month survival rate remained unchanged from 2022 to 2023 at 91%. The cost of reduced survival (cost recognized as abnormal Despite seasonal challenges related to sea lice and events of mortality in the income statement) was NOK 142.7 million in low dissolved oxygen, we managed to stabilize survival due to 2023 (NOK 8.1 or CAD 1.0 per kg), compared to NOK 90.7 million treatments and our semi-closed technology solution. Mortality in 2022 (NOK 4.5 or CAD 0.6 per kg). The cost was significantly related to algal blooms has been gradually reduced over the impacted by reduced survival at the freshwater stage. The last year due to our efforts relating to algae mitigation, digital monitoring and aeration systems, and came to 1.1% in 2023. We are constantly working to reduce the use of antibiotics. In 2023, the antibiotic Florfenicol was used to treat Yellow mouth, to safeguard the welfare of the fish. Our use of antibiotics has historically been too high, and we are pursuing non-therapeutic farming cost (the total cost of producing and harvesting our fish) increased from CAD 9.1 per kg (NOK 68.8) in 2022 to CAD 11.2 per kg (NOK 88.4) in 2023. The increase is mainly related to cost inflation on feed and other input factors during 2022, which has continued to impact the farming cost until the generation of impacted fish is harvested, in addition to the increased cost of reduced survival. PART 02 - OUR OPERATIONAL RESULTS 35 In BC, the wild salmon are Pacific salmon species which cannot As part of our Climate Action Plan to reduce our carbon interbreed with our Atlantic salmon. Unfortunately, we had two emissions by 35% in 2030, we exchanged our compressors escape incidents from our sea farms in 2023, where the first with flow technology, reducing our compressor energy usage incident was one fish lost to the ocean during a transfer from and thereby our diesel consumption. It is estimated that the the pen to the broodstock transport vessel. The fish was not flowpressors will reduce annual carbon emissions by 3 000 tCO2e SUSTAINABILITY SCOREBOARD recaptured. The second incident occurred during a transfer per year. Read more about how we are working to reduce our PILLAR KPI TARGET STATUS 2023 2022 2021 2020 2019 of fish between pens, where the offload pipes were wrongly carbon emissions in Part 02 - Climate action. positioned, and approximately 300 fish were offloaded to the walkway. Immediate corrective action was taken to improve our We are committed to maintaining a good working environment procedures to prevent this type of incidents from happening and keeping our employees safe. In 2023, the total absence rate again. We also continue our efforts to minimize our impact on for BC was 3.9%, below the target of 4.5%. We are monitoring other local wildlife. In 2023, no mammals got caught in our nets, and following up on absence in accordance with procedures but unfortunately, five birds got stuck in our nets and under and guidelines. Read more about how we work to secure our PROFIT & INNOVATION HEALTHY OCEAN Harvest volume (tonnes GWT) 20 000 tonnes in 2023 Operational EBIT / kg (NOK) Farming cost per kg (CAD) Cost leader ASC certification (# of sites) All sites (11 eligible) by 2023 Survival rate in freshwater walkways. Causes of death are accidental drowning and net employees well-being and labor rights in Part 02 - People. Survival rate at sea 95% by 2023 entanglement. We have changed our procedures to ensure we keep our nets tight and conduct regular inspections beneath our Obtaining ASC certification is an important signal that our salmon walkways to avoid similar incidents. is a responsible choice, as ASC has strict requirements with respect to minimizing fish farms’ impact on the environment and supporting local communities. At the end of 2023, all of our 11 eligible sites were ASC certified (corresponding to 100% of harvested volume for the year). FIGURE 2.32 RESULTS BRITISH COLUMBIA Harvest (tonnes GWT) Revenue (NOK million) Operational EBIT (NOK million) Operational EBIT / kg (NOK) Farming cost / kg (NOK) Farming cost / kg (CAD) 2019 2020 2021 2022 2023 14 120 21 181 14 448 20 286 17 682 861.4 1 178.9 1 023.5 1 665.1 1 468.3 73.3 5.2 55.3 8.3 -7.4 -0.4 56.0 8.0 150.2 270.4 -93.9 10.4 60.4 8.8 13.3 68.8 9.1 -5.3 88.4 11.2 FIGURE 2.33 OPERATIONAL EBIT AND HARVEST Harvest (tonnes GWT) Operational EBIT/kg (NOK) ) T W G S E N N O T ( T S E V R A H 25 000 20 000 15 000 10 000 5 000 0 20 15 10 5 0 (5) (10) 2019 2020 2021 2022 2023 I O P E R A T O N A L E B T K G I / ( N O K ) ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 17 682 20 286 14 448 21 181 14 120 -5.3 11.2 11 81% 91% 13.3 10.4 -0.4 9.1 7 84% 91% 8.8 12 85% 92% 8.0 11 78% 90% 5.2 8.3 n/a 63% 88% 142 668 90 728 17 617 66 082 73 327 32.61 34.75 41.67 62.32 87.00 17.38 12.83 35.66 46.62 6.01 0.27 0.17 0.30 0.22 0.52 0.00 0.00 0.00 0.00 0.00 2 (301) 5 0 0 6 0 2 (4) 8 1 0 12 1 0 14 0 677 741 1 091 769 1 101 2 799 2 439 4 025 3 276 5 411 90% 85% 87% 86% 86% 1.19 1.21 1.18 1.23 1.25 1.32 1.38 1.27 1.43 1.41 153 157 176 174 171 3.9% 6.4% 5.6% 6.8% 2.0% 8 9 27% 40% 6 n/a 36 n/a 35 n/a 79% 86% 84% 83% 83% Cost of reduced survival (NOK 1 000) Use of antibiotics (g per tonne LWE) * No use of antibiotics Use of hydrogen peroxide (kg per tonne LWE) */ ** Minimize use of pharmaceutical treatments Sea lice treatments - in feed (g per tonne LWE) * Minimize use of pharmaceutical treatments Sea lice treatments - in bath (g per tonne LWE) * Minimize use of pharmaceutical treatments Escape incidents (# of fish) Zero escape incidents Dead birds Dead marine mammals SUSTAINABLE FOOD Carbon emissions (kgCO2e per tonne GWT) Scope 1 + 2 location based Scope 3 Minimize impact on wildlife in 2023 Minimize impact on wildlife in 2023 35% reduction (from 2018) in total emissions by 2030 High quality product 93% superior share Biological feed conversion ratio (bFCR) Economic feed conversion ratio (eFCR) PEOPLE Employees Absence rate Below 4.5% 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). ** As of 01.01.2021, the Government of Canada - Department of Fisheries and Oceans Canada (DFO) changed the calculation formula for the API of hydrogen peroxide from Paramove 50 from 1 L (Paramove 50) * 1.15 (density) * 0.45 (concentration) = 1 kg H2O2 to 1 L (Paramove 50) * 1.19 (density) * 0.49 (concentration) = 1 kg H2O2, which corresponds to the method used in Norway. Previous years (2019 - 2020) have not been recalculated. *** An LTIR target has not been defined in order to avoid under-reporting of incidents. n/a: Data not available. Please refer to Part 1 - Our pillars and material topics for a description of the general financial impact of each topic. PART 02 - OUR OPERATIONAL RESULTS 36 FIGURE 2.34 SURVIVAL RATE AT SEA, ROLLING 12 MONTHS FIGURE 2.35 MAIN CAUSES FOR REDUCED SURVIVAL IN SEAWATER IN 2023 FIGURE 2.37 SEA LICE LEVELS (MOTILE SEA LICE ) 8.0 2019 2020 2021 2022 2023 95% 90% 85% 80% 75% Target: 95% MAIN CAUSE NUMBER OF FISH TONNES OF FISH Diseases Environmental Handling and/or treatments Non-infectious diseases Predators Smolt related Other known Unknown Total Abnormal seawater mortality write-down % 183 341 189 278 201 317 17 458 28 542 5 158 2 643 335 634 963 371 320 093 33% 304 619 547 30 55 1 9 625 2 191 1 151 53% 2019 2020 2021 2022 2023 We have also set targets for survival rates in fresh water. 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. The calculation of survival rate at sea corresponds to the GSI indicator "Fish Mortality" which is defined as "12 months rolling mortality = total # of mortalities in sea last 12 months / (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". FIGURE 2.36 MAIN CAUSES FOR REDUCED SURVIVAL IN SEAWATER (NUMBER OF FISH) 3 Limit of motile sea lice per fish per site (March to June) 6.0 4.0 2.0 0.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec The sea lice counts are calculated as the average number of motile sea lice per salmon. The limit as defined by the authorities is three motile sea lice per salmon in the period from March to June during the out-migration period, recognized as a vulnerable time for wild salmon migrating out to sea. Sea lice counts are conducted by visual inspections, done by lifting a minimum of 20 salmon out of the water for three pens on a weekly basis. The number of sea lice on each fish is recorded in our systems, and this information is used to estimate the overall prevalence of sea lice in the population. On average, we did not exceed the sea lice limits in 2023. 500 000 400 000 300 000 200 000 100 000 0 2021 Diseases Predators Environmental Diseases Non-infectious diseases Other known Smolt related 2022 2023 Treatments Other known Environmental Predators Unknown Non-infectious diseases Handling and/or treatments Smolt related Unknown The main causes of reduced survival in seawater are categorized according to a standardized mortality classification scheme developed by the Norwegian University of Life Sciences (NMBU) together with industry leaders. In previous years, we have classified mortality by the main categories ”infectious and “non-infectious” with subcategories. Historical data is reclassified according to the new standard. We perform a daily count and registration of dead fish. We undertake routine screening to determine the cause of mortality. In some cases, the cause of mortality can be difficult to establish due to various reasons such as weather- and environmental conditions, and the lack of diagnostic tools on site to identify causal agents. The main causes for reduced survival in 2023 were complications post handling and sea lice treatments, in addition to bacterial infections and gill infections. Gill infections are in most cases complex and multifactorial, and the primary cause is unknown. Gill infections is a welfare issue, as well as being an important cause of mortality. Diseases include Yellow mouth disease. Yellow mouth diseases typically occur during the first few weeks after transfer to the sea, and is controlled through therapeutic treatments using antibiotics. Algae blooms and low oxygen levels explains the environmental causes. PART 02 - OUR OPERATIONAL RESULTS 37 FIGURE 2.38 USE OF COPPER FIGURE 2.39 RESTORED ECOSYSTEMS UNDER FARMS OPERATIONAL PRIORITIES Grieg Seafood BC targets a harvest volume of 15 000 tonnes in The United Nations Declarations on the Rights of Indigenous 2024. We aim to increase the volume harvested to 30 000-35 Peoples (UNDRIP), giving Indigenous peoples rights in their own 000 tonnes by both developing current sites to utilize more of traditional territory, is under implementation in BC. This is a our seawater capacity and developing new sites. Key initiatives process of reconciliation between the government, businesses to achieve our objective include the implementation of barrier and First Nations. The vast majority of our production in BC systems to provide better biological control and higher survival is operated under agreements with First Nations and we are rates. We also seek to develop sites that are well suited for pursuing agreements with others. These relationships are salmon farming, and phase out older and smaller sites with more very important to us. The Truth & Reconciliation Commission: challenging biological conditions. Call to Action #92 provides us with guidance on our role in the reconciliation process. We strive to operate with respect for the Access to high-quality smolt is also key to ensuring sustainable culture of our First Nations partners in every way, to deepen our production growth. Last year, we completed the expansion of our Gold River smolt facility, with smolt capacity increasing understanding and to provide shared opportunities. Read more about our journey of reconciliation in BC here. from 500 to 800 tonnes. Another key priority to increase survival rates and harvest volume, is the use of digital monitoring and By 2025, the Canadian Federal Government aims to have created prediction technology. Harmful Algae Blooms (HAB) and low a responsible plan to transition into better and more sustainable oxygen events represent significant biological risks in BC. practices in British Columbia, in order to reduce interactions Mortality related to algae blooms has been reduced the last with wild salmon. Grieg Seafood welcomes the transition process years due to our successful efforts in the field of algae mitigation, and the transition framework published. We have established digital monitoring and aeration systems. Algae movements and a constructive dialogue with the federal Minister of Fisheries, oxygen levels are continuously monitored and analyzed using Oceans and the Canadian Coast Guard, The Honourable Diane high-grade real-time in-pen sensors, and machine learning with Lebouthillier and her Department about finding a good solution predictive environmental software. We have installed aeration going forward. We also continue to work collaboratively with our systems to enable feeding also during challenging situations, which increases the survival during these periods. In combination First Nation partners, government and local communities on innovation and modernization towards a sensible transition plan. with HAB and oxygen monitoring tools, we are also using the CO2L Flow barrier systems on some sites, which we expect to contribute to improved oxygen levels and a reduction in sea lice treatments. In 2023, we spent approximately NOK 29 million in growth investments, mainly related to the barrier systems and NOK 105 million in regular maintenance investments. Copper-free antifouling solutions on nets 100% Remediated ecosystems under farms before a new generation of fish was transferred to the farms in 2023 100% of farms We did not use copper antifouling solutions on our nets in BC in 2023. 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. FIGURE 2.40 % OF SITES THAT ARE RESTORED Substrate Type Benthic exceedance thresholds at peak biomass or before re-stocking Compliance 2023 Hard 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* Soft bottom * ASC Salmon standard. 100% 100% 100% 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 fish nets. This impact should never be irreversible. Read more about our impact on nature here. In BC, regulations require us to conduct benthic tests at peak biomass at each farm, and fallow the farm after ended production cycle until the seabed of the site reaches the regulated threshold of remediation. The test must be accepted by the regulators and, since our farms are BAP and ASC certified farms, an independent third party. The Aquaculture Activities Regulation, established under the Canadian Fisheries Act, sets exceedance limits for the benthic substrate monitoring according to the Monitoring Standard. The sites cannot be restocked if they exceed these limits. FIGURE 2.41 PROTECTING MARINE ECOSYSTEMS Impact assessments performed Operations in protected areas/areas of high biodiversity value Red list species impacted 100% of farms None None We perform environmental and social impact assessment for all of our farms. Such assessments are also part of the ASC certification process, which includes criteria to minimize environmental impact and preserve biodiversity. We do not have sites in the proximity of land nature reserves, nor do we have sites in or adjacent to protected areas or areas of high biodiversity value (areas defined as Special Areas of Conservation (SAC), Marine Protected Areas (MPA), High Conservation Value Areas (HCVA) or Federal Marine Protected Areas). For the definition of protected areas and areas of high biodiversity value, we refer to the ASC Salmon Standard. All site locations are available on our website. FIGURE 2.42 IUCN RED LIST- AND NATIONAL CONSERVATION LIST SPECIES Endangered Critically endangered Vulnerable Near threatened Least concern IUCN Red List Species at Risk Act 1 0 3 371 3 200 4 258 235 201 Our impact assessments also include identification of species listed in the IUCN Red List and BC’s national conservation list, Species at Risk Act (SARA), with habitats in areas where we operate. The International Union for Conservation of Nature (IUCN) ‘Red List of Threatened Species’ provides an inventory of the global conservation status of plant and animal species, and national conservation lists serve as authorities on the sensitivity of habitat in areas affected by our operations, and on the relative importance of these habitats from a management perspective. Our assessments have not identified that our activities pose a threat to any endangered plants or animal species. We keep track of red listed species impacted in areas affected by our operations as a part of the ASC-certification. No red list species was impacted in proximity of our operations in 2023. As wild salmon is an important part of the Indigenous culture, we embrace the responsibility of not causing harm and has engaged in several wild salmon enhancement projects in BC, including the Nootka Sound Watershed Society. The Nootka Sound Watershed Society works to protect, restore and enhance pacific salmonids and their habitat in Nootka Sound, Esperanza Inlet (52.2 km2) through sustainable, science-based practices. Read more about the projects and their habitat status assessments here. PART 02 - OUR OPERATIONAL RESULTS 38 LOCAL COMMUNITIES We aim to be open and honest with local communities about We are active in the communities in which we live and work our production methods, our successes, and our remaining through our sponsorship and donation program. Contributions challenges. We view it as our responsibility throughout all of include financial support, in-kind and employee knowledge our farming regions to engage in constructive dialogue with all sharing or participation. In 2023, we supported dozens of stakeholders and groups that are impacted by our activities. initiatives ranging from youth sports team funding to support for We create jobs and opportunities in the rural areas where we wild salmon restoration and enhancement. Throughout the year operate, and we use local suppliers as often as we can. We hire we have collected funds for local Food Banks, and supported local apprentices and support aquaculture schools and training school programs and camps for local children. facilities. We sponsor sports and cultural activities, and we engage in monitoring and protection of the local environment. In British Columbia, we farm in areas that belong to Indigenous We also provide a grievance mechanism for local communities peoples. These groups have special rights, as acknowledged on our website. This enable us to identify and prevent potential in the United Nations Declaration on the Rights of Indigenous negative impact on local communities, such as pollution of local Peoples (UNDRIP), and Grieg Seafood takes particular care environment and violations of human rights. In 2023, we did not to avoid infringing them. The vast majority of our production identify any significant negative impact on local communities is covered by agreements with First Nations, and we are from our operations. pursuing agreements with others. These agreements are a layer of regulation requiring compliance and the details of these agreements are unique to each Nation. They ensure transparency and Nation oversight to our operations while providing economic and social benefits to each community. We are continuously working to be in compliance with the agreements. NOK 1 298 million equal to 79% of total purchases, spent on goods and services purchased from local suppliers in BC. NOK 0.44 million donated to local services and projects, all of which are pro bono. In 2023, we supported dozens of community and Indigenous initiatives ranging from youth sports teams to wild salmon restoration and enhancement projects. Throughout the year, we have collected funds for local Food Banks and supported programs for local children such as the Campbell River Angel Tree Society, various school programs and Uu-a-thluk Science Camp. Learn more about our relationships with our local community here, and our approach to the implementation of UNDRIP and our journey of reconciliation with Indigenous Peoples in British Columbia here. PART 02 - OUR OPERATIONAL RESULTS 39 3 184 TONNES GWT IN FIRST HARVEST GRIEG SEAFOOD NEWFOUNDLAND Grieg Seafood Newfoundland is a greenfield project with fish farming rights in Placentia Bay in Newfoundland and Labrador, and the only salmon farmer in this area. We will develop the region gradually and responsibly, based on the biological development of our first generations of fish. OPERATIONAL RESULTS In 2023, an important milestone was reached, when we The farming cost (the total cost of producing and harvesting our successfully conducted our first harvest from the first generation fish) came to CAD 12.1 per kg (NOK 95.9) in 2023. The farming of fish from our region in Newfoundland. The harvest volume was cost is high due to the low harvest volume and to still being in a 3 184 tonnes. Sales revenues amounted to NOK 235.7 million and development phase with low capacity utilization. There has been our realized price for the year came to NOK 74.0 per kg. Our price no recognition of abnormal mortality in the income statement. achievement was supported by a favorable superior share of 97% Parts of our operational cost have been allocated directly to the in addition to good average harvest weight. income statement as we are still in a development phase, which totaled NOK 76.4 million (NOK 24.0 per kg) in 2023. Production at our Recirculating Aquaculture System (RAS) freshwater facility in Marystown Marine Industrial Park, in While Newfoundland's emissions notably increased in 2023 due Placentia Bay, remained on track. The new generation of fish at to operational expansion following successful harvesting, our the facility is healthy and growing well, with high survival rates. Climate Action Plan anticipates continued emissions growth in Approximately 2.5 million smolt were transferred from our this region in the coming years. We plan to offset these increases freshwater facility to three sea farms in Placentia Bay during the with enhanced reductions in other farming regions, while also spring and summer of 2023. taking direct measures in Newfoundland. In 2023, we have invested in diesel-electric power on all of our feed barges in Our seawater licenses in Newfoundland require use of Newfoundland, where two have been in operation during the year. sterile all-female salmon in order to eliminate the risk of These investments have reduced potential emissions by 50%. genetic interaction of wild Atlantic salmon in case of escape. The Read more about how we work to reduce our carbon emissions in salmon is of European broodstock, and we apply best practices Part 02 - Climate action. from sterile production across the globe, tailored to ensure we optimize the growth and health of our sterile all-female salmon We are committed to maintaining a good working environment production. We have a year-round supply of high-quality eggs, and keeping our employees safe. In 2023, the total absence rate and we optimize the conditions during the freshwater phase, the for Newfoundland was 1.4%, well below our target of 4.5%. We times of the year when the fish are transferred to the sea, and are monitoring and following up on absence in accordance with the feed composition. Sterile all-female salmon perform well in procedures and guidelines. Read more about how we work to cold environments and do not mature. Our fish have performed secure our employees well-being and labor rights in Part 02 - well biologically, with a 12-month rolling survival rate of 95% People. and good growth at sea, and we have not experienced sea lice issues or other biological issues. We are still in an early phase and will expand the project gradually and in line with biological developments. Obtaining ASC certification is an important signal that our salmon is a responsible choice, as ASC has strict requirements with respect to minimizing fish farms’ impact on the environment and supporting local communities. We aim to certify our sites in Newfoundland when the seawater sites are eligible for certification. PART 02 - OUR OPERATIONAL RESULTS 40 We remain committed to developing our operations in Newfoundland and Labrador gradually and responsibly, and to meeting all regulatory requirements from the local provincial and federal authorities. We are well prepared in terms of equipment, employees and knowledge of biological conditions, and we will adjust our operations according to the experience we gain from the first generations of fish. We are confident that we will be able to build a strong farming region in Newfoundland during the coming years and create jobs and value for our local communities. FIGURE 2.43 RESULTS NEWFOUNDLAND Harvest (tonnes GWT) Revenue (NOK million) Operational EBIT (NOK million) Operational EBIT / kg (NOK) Farming cost / kg (NOK) Farming cost / kg (CAD) Other cost / kg (NOK) 2022 — — 2023 3 184 235.7 -114.7 -146.1 n/a n/a — 6.0 -45.9 95.9 12.1 n/a FIGURE 2.44 MAIN CAUSES FOR REDUCED SURVIVAL IN SEAWATER IN 2023 MAIN CAUSE NUMBER OF FISH TONNES OF FISH Handling and/or treatments Non-infectious diseases Smolt related Other known Unknown Total Abnormal seawater mortality write-down % 1 928 921 29 755 21 200 890 233 515 0 —% 12 2 5 0.01 410 428 0 —% The main causes of reduced survival in seawater are categorized according to a standardized mortality classification report developed by the Norwegian University of Life Sciences (NMBU) together with industry leaders. In previous years, we have classified mortality by the main categories ”infectious and “non-infectious” with subcategories. The survival in Newfoundland is high and within expected goals. We have lost some fish due to transport related issues, however the underlying cause is unknown. There have been no detections of infectious diseases, and the fish has not been treated against sea lice. SUSTAINABILITY SCOREBOARD  PILLAR KPI TARGET STATUS 2023 2022 PROFIT & INNOVATION Harvest volume (tonnes GWT) 5 000 tonnes in 2023 Operational EBIT (NOK million) Farming cost per kg (CAD) Cost leader HEALTHY OCEAN Survival rate in freshwater Survival rate at sea 95% by 2023 Cost of reduced survival (NOK 1 000) Use of antibiotics (g per tonne LWE) * Use of hydrogen peroxide (kg per tonne LWE) * Sea lice treatments - in feed (g per tonne LWE) * Sea lice treatments - in bath (g per tonne LWE) * No use of antibiotics Minimize use of pharmaceutical treatments Minimize use of pharmaceutical treatments Minimize use of pharmaceutical treatments Escape incidents (# of fish) Zero escape incidents Dead birds Minimize impact on wildlife Dead marine mammals Minimize impact on wildlife SUSTAINABLE FOOD Carbon emissions (tCO2e) 35% reduction (from 2018) in total emissions by 2030 Scope 1 + 2 location based Scope 3 High quality product 93% superior share Biological feed conversion ratio (bFCR) Economic feed conversion ratio (eFCR) PEOPLE Employees Absence rate Lost time incident rate Turnover rate LOCAL COMMUNITIES Local procurement Below 4.5% ** * Amount of active pharmaceutical ingredients (APIs) used (in gr or kg) per tonne of fish produced (LWE). ** An LTIR target has not been defined in order to avoid under-reporting of incidents. n/a: Data not available or not applicable as seawater production started mid-year 2022. ● ● ● ● ● ● ● ● ● ● ● ● ● ● 3 184 n/a -146.1 -114.7 12.1 88% 95% 0 0 0 0 0 0 0 0 n/a 85% n/a n/a 0 0 0 0 0 n/a n/a 5 524 2 244 39 985 8 890 97% 1.20 1.24 106 0 1.27 1.29 104 1.4% 1.6% 9 32% 27% 0 42% 37% Please refer to Part 1 - Our pillars and material topics for a description of the general financial impact of each topic. PART 02 - OUR OPERATIONAL RESULTS 41 OPERATIONAL PRIORITIES LOCAL COMMUNITIES North America is one of the world’s fastest growing market for We aim to be open and honest with local communities about Atlantic salmon, and currently only one sixth of demand is met our production methods, our successes, and our remaining by North American production. We already have a position in challenges. We view it as our responsibility throughout all of our this market through our operations in British Columbia, where four farming regions to engage in constructive dialogue with we have attained significant sales and market experience. all stakeholders and groups that are impacted by our activities. With proximity to important markets on the US East Coast, our We create jobs and opportunities in the rural areas where we Newfoundland region will significantly strengthen our US market operate, and we use local suppliers as often as we can. We hire exposure and open up to synergies with our existing operations local apprentices and support aquaculture schools and training as we should be able to provide a more stable supply to the US facilities. We sponsor sports and cultural activities, and we market year-round. engage in monitoring and protection of the local environment. We also provide a grievance mechanism for local communities Our RAS facility currently consists of a hatchery, nursery and a on our website. This enable us to identify and prevent potential smolt unit with a capacity of 600 tonnes. We have resumed the negative impact on local communities, such as pollution of local first phase construction, which comprises the foundation and environment and violations of human rights. In 2023, we did not ground work, of the new post-smolt building. This investment is identify any significant negative impact on local communities estimated to approximately CAD 14 million. For the full year 2023 from our operations. we have spent a total of NOK 355 million in investments, related to start-up of the first phase construction of the new post-smolt building, in addition to investments in seawater locations and equipment for digital monitoring. We currently have 14 seawater licenses, each with an allowance of one million fish at first stocking, increasing to two million fish in subsequent stockings. Five of our sites are stocked with fish at year end. We expect to harvest 11 000 tonnes of salmon in 2024. We have also been awarded rights to submit an application for license in the Bays West area, with the potential to produce an additional 20 000 tonnes of salmon. NOK 323 million equal to 27% of total purchases, spent on goods and services purchased from local suppliers in Newfoundland. NOK 0.29 million donated to local services and projects, all of which are pro bono. We support different local youth sports clubs, such as hockey and darts. We also donated to the Burin Peninsula Health Care Foundation, a direct support of the local health care centers to improve the quality of care for patients and long term care residents. Additionally, our support has been directed towards local food banks and charitable organizations, assisting in the provision of clothing and facilitating social gatherings for the community. Learn more about our relationships with our local community on our website. FIGURE 2.45 USE OF COPPER Copper-free antifouling solutions on nets 100% We did not use copper antifouling solutions on our nets in Newfoundland in 2023. FIGURE 2.46 % OF SITES THAT ARE RESTORED Substrate Type Benthic exceedance thresholds at peak biomass or before re-stocking Compliance 2023 Hard Bottom Soft bottom Beggiatoa species or similar bacteria, marine worms or barren substrate does not cover 70% or more of the locations specified in the Monitoring Standard 50% The mean concentration of free sulfide as calculated at the locations specified in the Monitoring Standard does not exceed 3 000 µM No primarily soft bottom sites active in 2023 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 fish nets. This impact should never be irreversible. Read more about our impact on nature here. In 2023, samples from both our sites were sampled at peak biomass. One out of the two sampled sites exceeded the threshold as outlined in the Aquaculture Activities Regulations (AAR) Monitoring Standard. Though the 70% threshold was exceeded, there was no indication of barrenness due to aquaculture activities or off-gassing. Fauna such as sea anemones, crabs, brittle stars, shrimp, sea urchins, worms and encrusting sponges were observed at the monitoring stations. This site will have an extended fallow period and follow-up monitoring prior to restocking. The site will not be restocked unless the monitoring results indicates that the threshold of organic enrichment has been reduced to accepted levels. FIGURE 2.47 PROTECTING MARINE ECOSYSTEMS Impact assessments performed Operations in protected areas/areas of high biodiversity value Red list species impacted 100% of farms Five farming sites, total area of 0.071km2 of water surface None We perform environmental and social impact assessment for all of our farms. Such assessments are also part of the ASC certification process, which includes criteria to minimize environmental impact and preserve biodiversity. According to Department of Fisheries and Oceans (DFO), we have sites located in an area in Placentia Bay (~7800 km2), which is classified as a “Ecologically and Biologically Significant Area” (EBSA). Grieg Seafood Newfoundland has conducted an Environmental Impact Statement (EIS) Assessment which was reviewed by DFO and other regulators. Approval to operate in this area has been granted based on the assessment by both federal and provincial regulators. Our sites are located away from Important bird areas and proposed leatherback sea turtle critical habitat identified within the EBSA. FIGURE 2.48 IUCN RED LIST- AND NATIONAL CONSERVATION LIST SPECIES Critically endangered Endangered Vulnerable Near threatened Least concern IUCN Red List Species at Risk Act 0 0 1 371 5 200 2 258 156 201 Our impact assessments also include identification of species listed in the IUCN Red List and BC’s national conservation list, Species at Risk Act (SARA), with habitats in areas where we operate. The International Union for Conservation of Nature (IUCN) ‘Red List of Threatened Species’ provides an inventory of the global conservation status of plant and animal species, and national conservation lists serve as authorities on the sensitivity of habitat in areas affected by our operations, and on the relative importance of these habitats from a management perspective. Our assessments have not identified that our activities pose a threat to any endangered plants or animal species. We keep track of red listed species impacted in areas affected by our operations as a part of the ASC-certification. No red list species was impacted in proximity of our operations in 2023. Together with Provincial and Federal regulators, we have implemented monitoring procedures and protective measures as part of our commitment to co-existence with wild salmon in Newfoundland. In late spring and summer 2023, we monitored upstream migration of adult, wild Atlantic salmon on the Come-by-Chance River and the Bay de l’Eau River. This was the third year the Come-by-Chance River was monitored, with Atlantic salmon in sea at the Red Island AMA and Merasheen AMA. We expect to stock fish to sea during spring/summer 2024 in the Rushoon farming area, the first year of data collection on the Bay de l’Eau river is considered baseline. In 2023, river monitors did not report any suspected farmed salmon based on their visual examination of salmon removed from the trap for sample collection nor from those salmon observed within the trap at both the Come by Chance and Bay de l’Eau rivers. PART 02 - OUR OPERATIONAL RESULTS 42 OUR CERTIFICATIONS 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. Our farming operations in Rogaland, Finnmark and BC are food safety, allowing food businesses that hold these recognized certified according to BAP or GLOBALG.A.P. Both these certificates to access all corners of the global market. External standards for management systems are tailored to address processing partners in BC hold the GFSI-recognized BAP farming operations withing the aquaculture industry. Our harvest, certification for their operations, while our external partners in sales and market operations are chain-of-custody certified Newfoundland and Norway either hold equivalent certificates or according to ASC and/or GlobalG.A.P. ensuring traceability in are on a path to GFSI-recognized certification. Read more about our product value chain, and our internal processing plants are our certifications and their current status here. certified according to FSSC 22000, a Global Food Safety Initiative (GFSI) recognized standard. While GFSI does not provide food safety certification, it recognizes a number of certification programs that meet the GFSI benchmarking requirements. GFSI- recognized certification is a mark of the highest standards in CERTIFICATE DESCRIPTION TARGET STATUS 31.12.2023 ASC Aquaculture Stewardship Council (ASC) was founded in 2010 by the 100% ASC 81% of our total harvest World Wide Fund for Nature (WWF) and the IDH Sustainable Trade certification volume is ASC-certified. Initiative to establish global standards for sustainable seafood (or compliance production. with ASC) for 17 sites (86% of active and harvested volume) in The ASC label only appears on food from farms that have been eligible sites by Finnmark, independently assessed and certified as being environmentally and 2023. All sites (100% of socially responsible. ASC-certified salmon farms minimize impacts Newfoundland harvested volume) in on the local ecosystem to protect biodiversity. Farms are required aims to certify BC, and to measure various water parameters and remain within set limits. when its Six sites (74% of Farms are required to adhere to rigorous requirements to minimize seawater sites harvested volume) in disease outbreaks, keep sea lice levels low and can only use certain are eligible for Rogaland medicines under very strict conditions. Use of wild fish as an ingredient certification. have received ASC for feed must be minimized and full traceability back to a responsibly certification. managed source, preferably certified, must be ensured for both wild fish and soy. There are also strict social requirements. A Chain of Custody certification ensures that companies selling certified seafood have identification, segregation and traceability processes and procedures in place. Our sales and market organizations in Norway and Canada are ASC Chain of Custody certified. GLOBALG.A.P Global Good Agricultural Practices (GLOBALG.A.P.) is a standard for 100% of farms 100% of our farms (thus both agriculture and aquaculture. The standard covers food safety, in Norway 100% of our production animal welfare, sustainability, employment and traceability. GlobalG.A.P. volume) in Norway are GlobalG.A.P. certification provides assurance that food has been grown (certification Rogaland have been using recognized levels of quality and safety. It also ensures that it not relevant for certified since 2008, and has been produced sustainably in a way that respects the health, the Canada) farms in Finnmark since environment and the welfare and safety of workers and animals. 2016. certified certified. Our farms in The Chain of Custody Standard ensures that the product is sourced from GLOBALG.A.P. certified farms. GlobalG.A.P is particularly important for customers in Europe. Our sales and market organization in Norway is GlobalG.A.P. Chain of Custody certified. BAP Best Aquaculture Practices (BAP) is an aquaculture standard that 92% of farms 92% of our farms (thus covers practices in all stages of the fish farming process. in Canada 85% of our production BAP certification helps to assure consumers that the seafood they buy (certification certified. BC have been is produced in a manner that is considerate of the animal’s welfare, the not relevant for certified since 2011. environment, workforce and community, food safety and traceability. Norway). For the first time in late BAP certified volume) in Canada are BAP is particularly important for customers in the United States. 2023, our Newfoundland region started delivering to the market and has not yet achieved certification. FSSC 22000 FSSC 22000 is a certification scheme for Food Safety Management 100% of We have two processing Systems that is aligned with the ISO Management System approach processing facilities in Norway. and the ISO Harmonized Structure. The FSSC 22000 standard is plants (62% of The processing plant in recognized by the Global Food Safety Initiative (GFSI). our production volume) in Norway FSSC 22000 certified Finnmark was certified in December 2022, while the Rogaland plant was certified in May 2023. PART 02 - OUR OPERATIONAL RESULTS 43 SALES & MARKET Grieg Seafood is part of a global salmon market, supplying 3% of the global volume of Atlantic salmon harvested in 2023. As part of our new strategy, we will reposition Grieg Seafood in the value chain and become a strategic partner for selected customers. THE GLOBAL SALMON MARKET In 2023, the global volume of Atlantic salmon harvested The average spot price for Norwegian salmon (NQSALMON, decreased by approximately 2% compared to 2022, according weekly average) for 2023 varied significantly during the year, to Kontali. A total of 2 516 463 tonnes GWT (gutted weight depending on supply to the market. The same trend was equivalent) was estimated to have been harvested globally in observed in the North American market. The spot market 2023, down from 2 577 042 tonnes in 2022. Chile contributed an price stood at NOK 88.7 per kg at the beginning of the year. It increase in output of 11 430 tonnes, while most other salmon increased to a peak above NOK 126 per kg mid-March before producing countries saw their output fall. Norway experienced Easter holiday, then fell to the high-60s at the end of August, a reduction of 34 020 tonnes and Canada a reduction of 20 790 bouncing back and closing the year at NOK 99.0 per kg. The tonnes (all figures in GWT). 12-month average NQSALMON for 2023 came to NOK 92.3 per kg, compared to NOK 82.0 in 2022. Spot salmon prices in the US Salmon exports from Norway fell by 2% in 2023 compared to market started the year at NOK 97.5 per kg, peaked at around 2022. The volume of fresh salmon exports decreased by 1%, NOK 113 per kg before Easter holiday and ended the year at NOK while exports of fresh salmon filet decreased by 7% compared 70.9 per kg. The average price came to NOK 84.7 per kg, down by to 2022. The main export markets for salmon from Norway were NOK 20.6 per kg compared to 2022. Europe, which accounted for 75% of the volume, while Asia accounted for 17% and North America 8% (source: Norwegian Seafood Council). The total volume supplied by Canada decreased by 17% in 2023 compared to 2022. Demand for farmed salmon both in the retail and HoReCa sectors was strong in 2023. However, due to the limited supply of salmon, consumption decreased by 5% in the European market in 2023 compared to 2022. Consumption in China and Russia increased by 39% and 19%, respectively. FIGURE 2.49 GLOBAL HARVEST OF ATLANTIC SALMON IN 2023 Source: Kontali Analyse AS FIGURE 2.50 GLOBAL CONSUMPTION OF ATLANTIC SALMON IN 2023 Source: Kontali Analyse AS 10% 4% 5% 27% 53% 11% 3% 4% 15% 24% 44% PART 02 - OUR OPERATIONAL RESULTS 44 OUR SALES & MARKET RESULTS   We continue to capitalize on the benefits of having a fully integrated global sales organization and reached further key milestones in 2023. We strengthened processing capacity with partners in Norway, Europe and Western Canada during the year. We have an increasing supply of our own VAP (Value Added Processing) products in the European, Asian and the US markets. 5% of our global harvested volume in 2023 was sold as VAP. We aim to build on this development by optimizing biological performance and market timing through close collaboration between farming and sales, thereby securing good price achievement. The sales organization of Grieg Seafood operates as one coherent unit across the global salmon market, and we expect to leverage this for both our Norwegian and Canadian origins. By a continued focus on sustainable farming practices and good fish health and welfare, we can provide the safe, healthy, tasty, and high-quality product that our customers and consumers demand. Through our food safety management system we ensure that our products are safe throughout harvest, processing and logistics on it’s way to the market. We are transparent about our farming and production methods and communicate our standards and results to our customers. All our products are intended for human consumption. Read more about why our salmon is healthy and nutritious here. Products originating from our processing plants have been handled according to our Food Safety Management System ensuring compliance with principles and requirements for HACCP- and food hygiene programs in food production. We have not had any product recalls related to serious food safety incidents for the last ten years, nor did we have any in 2023. No serious incidents of food safety non-conformities in regard to requirements in regulations or voluntary codes have been reported in 2023. Our product is not banned from any markets. To manage possibly product recalls and serious incidents related to food safety, regular training is performed. Read more about how we work with food safety on our web site. OUR MARKETS Grieg Seafood accounted for 2.9% of the global supply of Atlantic salmon in 2023. Continental Europe is by far our most important market, accounting for 56% (63%) of our volume and contributing 53% of our sales revenue in 2023. North America is our second largest market, and accounted for 31% (26%) of our volume and 31% (29%) of our revenues in 2023. The market distribution of sales varies year on year, depending on the volumes harvested across our regions. The main change in our sales distribution was a decrease to Continental Europe from 58% in 2022 to 53% in 2023. We decreased our harvested volume by 21% from our Norwegian farming operations in 2023, while we harvested 3% more in Canada compared to 2022, mainly as a result of the first harvest in Newfoundland. In 2023, 15% of our total sales were to airborne markets, mainly delivered from our Norwegian operations. Our main export markets from Norway were Europe (79% of our volume) with a strong focus on key markets in southern Europe, Asia (17%) and North America (4%). 6% of our volume of Norwegian origin was sold as value added products. Approximately 31% of our salmon from BC was sold in Canada, while 68% was sold to the USA and 1% to Asia. 7% of our harvested salmon was processed and sold as value added products, while the Skuna Bay brand made up approximately 3% of the volume. We did not have any sales to Russia or Belarus in 2023. See here for further details of sales revenues by markets and products. Our sales revenues amounted to NOK 7 020 million, a decrease of NOK -144 million or 2.0% from 2022. The decrease in sales revenue is due to a 15% lower volume harvested in 2023. The group's price achievement was NOK 82.7 per kg compared to NOK 75.8 per kg in 2022. By comparison, the average NQSALMON price for 2023 came to NOK 92.3 per kg compared to NOK 82.0 in 2022. The price realization was negatively impacted by contracts for some of our Norwegian volume, in addition to price achievement on production grade harvest volume. For more information on our harvested volume and sales performance, see the regional chapters in this report. FIGURE 2.51 NQSALMON WEEKLY AVERAGE (NOK/KG) Source: NASDAQ Salmon Index 2020 2021 2022 2023 2024 120 100 80 60 40 1 6 11 16 21 26 31 36 41 46 51 2020 2021 2022 2023 2024 FIGURE 2.52 URNER BARRY FARM RAISED SALMON SEATTLE WEST COAST, FRESH, WHOLEFISH (NOK/KG) 2020 2021 2022 2023 120 100 80 60 40 1 6 11 16 21 26 31 36 41 46 51 The Urner Barry Farm Raised Salmon Seattle West Coast, Fresh, Wholefish shown above is a weekly average of all weight classes (4-6 lb, 6-8 lb, 8-10 lb, 10-12 lb,12-14 lb, 14-16 lb, 16-18 lb) in USD/lb, converted into NOK/kg using the weekly average of Norges Bank's daily exchange rate. There are no registered UB entries for Farm Raised Salmon, Fresh Wholefish Seattle in week 2-10 in 2023 nor in the beginning of 2024 due to limited availability of UB salmon prices. 2021 2022 2023 2020 PART 02 - OUR OPERATIONAL RESULTS 45 MARKET EXPECTATIONS AND OUR PRIORITIES The global harvest of Atlantic salmon in 2024 is expected While our sale currently consists mainly of fresh, head-on gutted to increase by 2% compared to 2023, to a total of 2 857 600 salmon, we aim to establish processing partners close to key tonnes, according to Kontali (figures in whole fish equivalent, markets and customers in the EU and the USA, targeting 20-30% WFE). Norwegian salmon farmers are expected to harvest share of our volume for Value Added Processing (VAP) by 2026. approximately 46 000 tonnes more in 2024 than in 2023, while To further strengthen our processing capacity, we have decided the UK and the Faroe Island are expected to increase harvest by to invest in a new 10 000-12 000-tonnes capacity secondary approximately 14 000 tonnes each. Chile is expected to decrease processing facility at Oslo airport Gardermoen. We expect the harvest for 2024 by approximately 35 000 tonnes while Canada facility to be operational from Q3 2025. Increasing our VAP share is expected to increase harvest by approximately 6 000 tonnes. is integral to our CO2 emissions reduction strategy, as it reduces The current harvest estimates indicate no supply growth in the the need to transport non-edible salmon parts to markets. We first half of the year, with the main increase coming towards also aim to develop B2B brands going forward. Currently, we year end. With expectations of limited growth in global harvest have the successful Skuna Bay brand in the USA. in 2024, combined with an outlook for continuing strong demand fueled by an increased focus on healthy food and sustainably North America is one of the world’s fastest growing market for produced proteins, we expect a sustained strong market in 2024. Atlantic salmon, but only one sixths of the demand is currently The current Fish Pool forward price reflects this, with an average met by North American production. We already have a position price around NOK 100 per kg for 2024. We currently have a in this market through our operations in British Columbia, contract share for 2024 of 6% of our Norwegian harvest volume. where we have attained significant sales and market experience. We do not have contracts in Canada. With proximity to important markets on the US East Coast, our Newfoundland region significantly strengthens our US market exposure. FIGURE 2.53 OUR MARKETS BY SALES REVENUES FIGURE 2.54 OUR MARKETS BY HARVESTED VOLUME Asia North America UK Continental Europe PART 02 - OUR OPERATIONAL RESULTS 46 CLIMATE ACTION While farmed salmon has a low carbon footprint compared to other animal proteins, our industry must do its part to achieve the goals set out in the Paris Agreement. New solutions must be developed to cut emissions in our operations and along our value chain. PART 02 - OUR OPERATIONAL RESULTS Reducing carbon emissions drastically. In Rogaland, our focus on post-smolt practices has led to carbon reduction by minimizing the need for sea lice control treatments. We anticipate similar benefits in other According to the High-Level Panel for a Sustainable Ocean regions as smolt sizes increase. Economy (Ocean Panel), food production from the sea may be advantageous from a climate perspective, because the carbon While Newfoundland's emissions notably increased in 2023 due footprint from production is low compared to terrestrial animal protein production (see Figure 1.2 in our Aquaculture in a sustainable global food system chapter). However, we recognize that we must do more to cut carbon emissions from our farming operations and supply chains. Direct carbon emissions from our production (Scope 1 & 2) account for 8% or 31 000 tCO2e of our total emissions. 92% or 382 000 tCO2e, of our emissions originate from our value chain (Scope 3), particularly those aspects linked to fish feed and the transportation of salmon to our markets. Our climate action target is to reduce carbon emissions by 35% to operational expansion following successful harvesting, our climate action plan anticipates continued emissions growth in this region in the coming years. However, we plan to offset these increases with enhanced reductions in other farming regions, as outlined in our strategy. GREENHOUSE GAS EMISSIONS In 2023, our total greenhouse gas (GHG) emissions increased by 9%, or close to 34 000 tCO2e, compared to 2022. The increase is mainly attributable to an increase in our emission factors towards 2030, and by 100% in 2050, with 2018 as the baseline from feed in Scope 3, operational expansion and harvest in year. This reduction target is for Scope 1, 2 & 3. Our carbon Newfoundland, and purchase and distribution of a larger volume emission reduction targets are classified as well-below 2°C global warming, and aligned with the Paris Agreement. Our emission targets have been approved by the Science Based of external fish compared to previous years. Feed emissions increased by 13%, or close to 30 500 tCO2e compared to the year before, which contributed significantly to an increase in Scope 3 Targets initiative (SBTi). More information can be found here. emissions. Despite the substantial increase in the Newfoundland CLIMATE ACTION PLAN UPDATE In 2022, we developed a comprehensive climate action plan region following successful harvesting, we have experienced reduction in our other operating regions. This has constrained the overall rise in our total emissions for 2023. It should be noted outlining the necessary measures and investments to achieve that according to our climate action plan, we expect emissions our climate targets. This plan emphasizes the importance of in Newfoundland to keep increasing in the subsequent years as operational changes affecting Scope 1 & 2 emissions, as well as production volume increases. supply chain adjustments in Scope 3. Our goals include reducing operational fossil fuel consumption, transitioning to renewable electricity, and implementing supplier requirements to lower our absolute emission levels. We are also investing in site and boat electrification, promoting novel feed ingredients with lower emissions, and reducing transportation-related emissions. In 2023, we continued to implement and monitor the projects outlined in the plan, making any necessary adjustments based on our progress. We have also enhanced our governance of emission reduction initiatives through internal ESG training, improved documentation, and increased regional involvement to ensure the effectiveness of our efforts. Given the reliance on innovation and development for our projects, we recognize the need for flexibility in our climate plan, particularly due to technical risks impacting cost estimates and emission reduction potential. Collaborating with suppliers and customers has allowed us to improve data quality and reporting, while increased stakeholder attention to carbon emissions has further supported our initiatives. In our farming regions Rogaland and Finnmark, we have continued investing in sea site electrification to eliminate fossil fuel usage. Diesel-electric batteries have been acquired in all regions, significantly reducing fuel consumption and improving feeding operations at sea sites. In British Columbia, we have replaced barge feeding compressors with high efficient flowpressors, reducing our energy and fuel consumption SCOPE 1 & SCOPE 2 EMISSIONS Our absolute Scope 1 and Scope 2 GHG emissions increased by 3%, or approximately 800 tCO2e, in 2023 compared to 2022, while harvest volume decreased by 15% due to biological challenges and focus on growing biomass in 2023. As a consequence, the emissions measured as kilograms of CO2 equivalents per tonne harvested increased by 21%. In Rogaland, total emissions decreased by 1% from 2022 to 2023, accompanied by a 8% decrease in the harvested volume. As a consequence, emissions per tonne increased by 9%. In Finnmark, total emissions increased by 11%, primarily attributed to treatments and preventive actions undertaken to address the biological issues prevalent in the region. Furthermore, we have included emission data from an operational service boat, which were previously unaccounted for. Due to the significant decrease in harvested volume of 30%, the relative emissions increased by 59%. Well-boat services make up a substantial proportion of our emissions, and whether we decide to provide these services ourselves or outsource them to external service providers has a considerable influence on our Scope 1 emissions. In Rogaland, BC, and Newfoundland well-boat emissions are included in Scope 1, while well-boat emissions in Finnmark are categorized as Scope 3 due to contractual considerations. Finnmark’s Scope 3 emissions from well-boat activities in 2023 totaled 3 250 tCO2e. 47 In BC, total emissions in Scope 1 and 2 decreased by 20%, Value-added processing and details of the exact transportation accompanied by a decrease of 13% in the harvested volume. routes were not taken into consideration due to lack of data This caused relative emissions per tonne to decrease by 9%. The availability. In 2023, we collaborated with our seafood logistics reduction can be explained by the closure and decommissioning software provider to create a tool that monitors real-time of five operating farms in the Sechelt production area. An added emissions from our downstream transportation and distribution contributor to the decrease is our CoolFlow trial aeration barges activities. This software tool is designed to enhance accuracy in which we installed on some of the sites. The volume harvested in tracing the path of our salmon from the harvesting facility to the BC varies significantly every other year, however our emissions end consumer. We plan to implement this tool in 2024. Moreover, are not correlated with harvested volume as production, or the establishment of a processing facility in Oslo Airport City at activities to prepare for production, might still take place. Gardermoen will notably decrease emissions from transporting our salmon to various markets. In Newfoundland, we started harvest of our first generation in Q4 2023. As a result, we had a significant increase in Scope 1 and 2 emissions. Seawater production resulted in a noticeable Fish feed Carbon emissions from fish feed are calculated on the basis of increase in Scope 3, due to the use of feed and transportation the amount of feed used and the carbon emission factor of the and distribution of our first harvested volume. As our operation feed products used. Our carbon emissions from fish feed are continues to grow in Newfoundland, we are expecting an increase highly dependent on the different raw materials used in the feed, in emissions in the years to come. Our total energy consumed for 2023 was 152 672 MWh from Scope 1 and 2, whereas the percentage renewable energy as well as the life cycle assessments and methodology chosen by our feed suppliers. More information about the composition of our feed can be found in our chapter on feed ingredients. Fish feed carbon emission factors are calculated on the basis of life (location-based) was 21.4%. The percentage grid electricity cycle assessments (LCAs) and appear to be variable over time varies in our operating regions. In Rogaland, 53% of our and different between our suppliers. The reason for this is that farms are powered by onshore electricity, and in Finnmark data quality and transparency vary and increase in relation to the 57% of our farms are connected to the onshore grid. In BC efforts made and resources allocated to those comprehensive and Newfoundland the infrastructure provides challenges in analyses. connecting farms to onshore grid. However, we are investing in diesel-electric power and other technology to increase our Our feed-related emission factors increased from 2022 to 2023. renewable energy share. SCOPE 3 EMISSIONS The two most substantial contributors to Scope 3 emissions are downstream transportation and fish feed. Downstream transportation accounts for 18% and fish feed for 63% of our total emissions (19% and 68% of our Scope 3 emissions, respectively). As shown in Figure 2.55, our total emissions increased by approximately 34 000 tCO2e in 2023. Downstream transportation In 2023, we experienced a decrease of 17% or 15 000 tCO2e in downstream transportation in our operating regions from 2022. There are various reasons for this development. The choice of transport mode is influenced by logistical restrictions, harvest schedules, availability and demand for certain sizes and qualities of fish, and prices. However, we increased our purchase, resale, and transportation of external fish compared to prior years in 2023. This activity, recorded in “ASA and sales”, contributed an additional 19 300 tCO2e. Consequently, our total transport emissions increased by 5% or 4 300 tCO2e from 2022 to 2023. In general, downstream transportation is calculated as transport from the harvesting facility to the airport of departure to the destination country (capital) by air in tonne-kilometers (tkm). For all sales from our Canadian operations (mostly delivered to the North American market), transport was calculated to the state capital in order to achieve an acceptable degree of precision. PART 02 - OUR OPERATIONAL RESULTS We have worked continuously through 2023 on getting more specific data regarding carbon emissions from feed, down to the specific feed product level. This information has been supplemented by a list of additional information, such as LCA database used, calculation methodology, data aggregation level and origin. As a result of this supplemented information, we have been able to conclude with two reasons for the increase in feed- related emissions from 2022 to 2023. The main reason is that our feed suppliers use different sources (database or primary data) when calculating emissions from different raw materials. The other reason is that the volume supplied from different feed suppliers often vary from one year to another. Consequently, depending on which supplier delivers the most volume in a given year, our volume-weighted emission factor will differ. Towards the 2030 target Our climate target is set in line with SBTi, which requires a baseline year as starting point. In 2023, we have a total reduction in Scope 1, 2 and 3 of 6% from our 2018 baseline year, which shows that we are moving towards a 35% reduction in 2030. Although there has been a significant increase in emissions from our operations in Newfoundland, attributed to expansion efforts, we have successfully reduced emissions in other regions. This progress ensures that we remain aligned with our objectives. The increase in emissions from Newfoundland was anticipated and has been factored into our climate action plan. OUR GREENHOUSE GAS ACCOUNTS FIGURE 2.55 GREENHOUSE GAS EMISSIONS SCOPE 1 + 2 + 3 REGION Scope Scope 1 Scope 2 location based Total (Scope 1 + 2) Scope 3 ROGALAND Downstream transportation Fish feed Other Total (Scope 3) Total GHG emissions Rogaland Scope 1 Scope 2 location based Total (Scope 1 + 2) Scope 3 FINNMARK Downstream transportation Fish feed Other Total (Scope 3) Total GHG emissions Finnmark Scope 1 Scope 2 location based Total (Scope 1 + 2) Scope 3 TOTAL EMISSIONS (tCO2e) 2022 2021 *Baseyear 2018 RELATIVE EMISSIONS (kgCO2e / tonnes) 2021 2022 2023 *Baseyear 2018 2023 3 939 8 519 7 433 456 331 287 4 395 8 850 7 720 7 363 309 7 673 58 454 40 567 54 409 44 179 86 257 104 470 89 472 92 257 4 065 6 350 6 248 9 983 148 776 151 387 150 129 146 419 153 171 160 237 157 849 154 091 7 134 5 122 4 948 420 591 496 7 554 5 713 5 444 5 480 580 6 059 52 971 13 963 21 739 20 066 115 949 131 286 101 894 97 065 9 921 9 645 12 323 8 631 178 841 154 894 135 956 125 762 186 395 160 607 141 400 131 821 9 143 15 129 14 509 11 501 783 629 513 476 270 332 272 295 9 131 9 401 5 676 6 008 5 289 5 561 5 636 5 931 254 166 151 241 6 007 6 260 4 492 4 657 3 774 3 925 4 997 5 237 9 926 15 758 15 022 11 977 597 1 091 741 677 BRITISH COLUMBIA Downstream transportation 45 602 4 884 12 097 7 809 Fish feed Other Total (Scope 3) Total GHG emissions British Columbia Scope 1 Scope 2 location based Total (Scope 1 + 2) Scope 3 Downstream transportation* Fish feed Other Total (Scope 3) 38 116 46 700 29 934 34 058 5 695 6 563 7 454 89 413 58 147 49 485 99 339 73 905 64 507 1 637 429 2 066 1 572 672 2 244 7 627 49 494 61 471 4 855 670 5 524 5 376 5 973 4 025 5 115 2 439 3 180 2 799 3 477 n/a n/a n/a 1 735 n/a n/a n/a n/a n/a n/a n/a n/a 212 523 735 n/a 1 184 8 427 36 907 463 1 893 8 890 39 985 n/a n/a n/a n/a n/a 12 557 n/a 14 292 Total GHG emissions Newfoundland n/a 2 801 11 134 45 509 Scope 1 Scope 2 location based Total (Scope 1 + 2) Scope 3 Other** Total (Scope 3) Total GHG emissions Other Scope 1 (tCO2e) — 33 33 253 253 286 1 14 15 2 12 14 4 12 16 991 991 1 006 4 470 4 470 4 484 20 435 20 435 20 451 20 216 30 408 28 464 29 202 NEW- FOUNDLAND ASA & SALES Scope 2 location based (tCO2e) 1 692 1 994 1 980 2 047 Total Scope 1 + Scope 2 location based 21 908 32 402 30 444 31 249 349 429 359 434 Scope 3 TOTAL GROUP Downstream transportation Fish feed Other Total (Scope 3) Total GHG emissions Group 157 027 59 414 88 245 73 237 240 322 282 668 229 727 260 287 19 934 24 072 30 958 48 569 417 283 366 154 348 930 382 093 439 191 398 556 379 374 413 342 6 655 7 005 4 843 5 272 4 120 4 479 5 306 5 740 *In 2023, we included downstream transportation for Newfoundland for the first time as we started harvest of our first generation in Q4 2023. **In 2023 we purchased, re-sold and transported a larger volume of external fish, hence the significant increase in “Other” Scope 3 emissions from ASA and sales compared to previous years. Specifically, the transportation of external fish accounts for 19 329 tCO2e of the “Other” Scope 3 emissions from ASA and sales. 48 Scope 3 challenges We strive to continuously improve our collection of Scope 3 Scope 2 emissions are indirect emissions relating to third-party generation of the electricity we consume at our sites. Emissions emissions data. Some of the figures are only technical estimates are reported as location-based emissions in accordance with of our actual emissions, calculated on the basis of science-based the GHG Protocol (market-based Scope 2 emissions can be emission research. However, we deem the disclosure of our found in the response field of GRI standard 305-2 in our GRI FIGURE 2.56 SCOPE 3 MAPPING PER REGION/UNIT Status Data collected Scoped out Data not available Category Subcategory Rogaland Finnmark BC Newfound- land ASA Sales Norway Sales NA Scope 3 emissions to be an important step towards achieving index). Location-based factors are from the International Energy 1 Purchased goods and services Fish feed awareness of those emissions and encouraging our suppliers Agency (IEA), using three-year rolling averages. For electricity to also conduct annual greenhouse gas accounting, even if data consumed in Norway, we apply the Nordic mix, since this is the accuracy is an aspect we need to improve on. This will help us, most representative emission factor for Norway. This is because our industry and all business sectors linked to our industry to Norway is almost self-sufficient when it comes to electricity, improve in concert as we go forward. GHG REPORTING STANDARD Our greenhouse gas emissions are reported in accordance with the Corporate Accounting and Reporting Standard, developed by the Greenhouse Gas Protocol Initiative (GHG Protocol), using the operational approach. 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 defined as our baseline year in accordance with SBTi guidance that companies should "choose the most recent year for which data is available as the base year". When structural changes, improved data collection methods or discovery of significant errors occur, the GHG Protocol supports recalculating the base year*. However, it is important to note that certain changes do not require recalculation, for example, changes involving facilities that did not exists in the base year, out/in-sourcing of activities previously reported under a different scope, and organic growth or contraction. *Grieg Seafood Shetland was divested in 2021, and is excluded from the base year and all current years. Additionally, our former sales organization, Ocean Quality, was divested in 2020 and is thus excluded from the base year. As Grieg Seafood Newfoundland was acquired in 2020, but did not exist before the acquiring year, it is not included in the base year. Scope 1 emissions are those that are directly emitted by Grieg Seafood’s activities and include emissions from the combustion of fossil fuels for generators, heating and our own vehicles. Emissions are calculated based on the purchased quantities of commercial fuels . We also have a relatively small consumption of hydrofluorocarbons (HFC) for cooling, which are included in Scope 1. All Scope 1 emission factors used are from DEFRA (the UK’s Department for Environment Food and Rural Affairs). Underlying data is collected from financial cost. while the bulk of the electricity imported to Norway comes from Sweden and Denmark (nve.no). The Nordic mix is calculated as a weighted average of the Swedish, Norwegian, Finnish and Danish factors. Underlying data is collected from metered electricity consumption and invoices from electricity suppliers. Scope 3 emissions are all other indirect emissions (not included in Scope 2) that occur in our value chain, including both upstream and downstream emissions. In 2021 we had the first year with comparable Scope 3 figures. However, in 2022 we managed to improve our data collection processes to the extent of calculating historic Scope 3 emission to achieve a comparable trend from the base year. Throughout 2023, our efforts have been centered on enhancing the quality of data in existing categories and examining the potential integration of additional relevant emission categories into Scope 3. We have mapped the emissions in our supply chain in a comprehensive analysis and identified the categories most relevant to Grieg Seafood. Upstream, we included (1) Purchased goods and services, (3) Fuel and energy-related activities (not included in Scope 1 or Scope 2), (4) Upstream transportation and distribution, (5) Waste generated in operations, and (6) Business travel. Downstream, we included (9) Downstream transportation and distribution, and (15) Investments. The categories correspond to the 15 Scope 3 categories defined by the GHG Protocol. Underlying data is collected from production data, financial cost or suppliers, or estimated based on production data. Capital goods Well-boat services EPS boxes N/A Fuel and energy-related activities Well-to-Tank (WTT) Upstream transportation and distribution Boat/truck transportation Waste generated in operations* Waste Business travel Air travel Employee commuting Employee mileage Public/private transportation Upstream leased assets N/A Downstream transportation and distribution Goods transportation Processing of sold products Use of sold products End-of-life treatment of sold products Downstream leased assets Franchises N/A N/A N/A N/A N/A 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Investments Nordnorsk Smolt** Tytlandsvik Aqua * Waste generated in operations was included for the first time in BC for 2023. **Nordnorsk Smolt was scoped out in 2022 due to no production, but included again in 2023. FIGURE 2.57 GREENHOUSE GAS EMISSIONS DEVELOPMENT FROM BASE YEAR (1000 tCO2e) 439 1 + 2 (tCO2e) Scope 3 (tCO2e) 399 379 413 285 LEARN MORE ON OUR WEBSITE → → Our policy for climate action Reducing carbon emissions 2018 2021 2022 2023 2030 The chart shows the last three years compared with the base year, and our development towards our 35% reduction target in 2030 PART 02 - OUR OPERATIONAL RESULTS 49 SUSTAINABLE FEED INGREDIENTS We are conscious of the environmental and social risks that may be connected to feed ingredients and are committed to responsible sourcing. We are committed to reduce the impacts from our fish feed. As an industry, we also need to develop new feed ingredients in order to grow sustainably. TOWARDS MORE SUSTAINABLE FEED INGREDIENTS  Grieg Seafood has identified and mitigated the most material risks related to our feed ingredients, such as overfishing and deforestation. With a growing aquaculture sector, we need new marine and protein-based feed ingredients in order to reduce the environmental and social impact in the years to come. CERTIFICATIONS To ensure that our ingredients do not contribute to overfishing and deforestation, we require recognized certification of our high-risk ingredients. Fish meal and fish oil from fisheries and Brazilian soy and palm oil are identified as high-risk ingredients. In 2023, all our marine ingredients (excluding trimmings) in feed were based on fisheries certified according to the Marine Stewardship Council (MSC) or MarineTrust (including FIPs). As a member of MarinTrust Governing Body Committee (GBC), we continuously work towards increasing the share of certified fisheries across the industry. All Brazilian soy protein concentrate was certified according to ProTerra or Round Table on Responsible Soy (segregated). The only region where we used a small amount of palm oil (0.10% of the raw material content) was in Newfoundland. The palm oil used was certified according to Round Table on Sustainable Palm Oil. FIGURE 2.58 FEED INGREDIENTS IN 2023 Rapeseed oil Fishmeal Soy protein concentrate Wheat gluten Fishoil Beans and peas Wheat Guar Sunflower Micro ingredients TRACEABILITY Feed traceability is a key concern in aquaculture, as it relies on depleted fish stocks or plant-based protein which is associated with natural ecosystem conversion. We are in close dialogue with our feed suppliers concerning the sourcing of raw material, and we expect continuous improvements in our feed supply chains with respect to environmental, social and governance (ESG) risks. We require information on each ingredient and raw material in the feed we buy, including the origin of all ingredients used as well as how they were produced. This covers the entire supply chain – from farm/boat to feed manufacturer. While we recognize that it will take time to provide the traceability needed in all supply chains, we require continuous improvements every year. In 2023, we improved our level of traceability on our high-risk ingredients. We were able to identify the vast majority of the species, origin and certification of forage fisheries and trimmings used in our feed. Additionally, we managed to trace soy to national and regional level. LEARN MORE ON OUR WEBSITE → → → Supplier Code of Conduct Sustainable feed policy Our feed approach 6% 2% 5% 18% 9% 10% PART 02 - OUR OPERATIONAL RESULTS This illustrates the average raw material content in our feed used in Norway and Newfoundland. In BC, the content is somewhat different, as, in general, a larger proportion of vegetable protein is replaced by animal-byproducts. Palm oil constituted 0.10% of the raw material ingredients in the feed used in Newfoundland. 11% 13% 11% 15% 50 ZERO DEFORESTATION Our Brazilian soy protein concentrate vendors, CJ Selecta, NOVEL FEED INGREDIENTS The aquaculture industry is looking at developing novel feed Imcopa and Caramuru, were the first Brazilian soy traders to ingredients to mitigate sustainability-linked risks such as set a 2020 cut-off date for their entire soybean business in the deforestation and overfishing. We must ensure that a scale- Cerrado, and establish a robust MRV system. With this move, up of ingredients does not repeat the mistakes of the past by they have set a new benchmark for sustainable supply chains contributing to new or unforeseen ESG risks. As a member of the globally. We have engaged with these producers and applaud Global Roundtable on Marine Ingredients and the Global Salmon their leadership. Read more here. Initiative Climate Taskforce, we take part in commercializing novel feed ingredients that are a good fit for a future sustainable We participated in the CDP Forest program for the fourth time food system. In 2021, we initiated a project to perform a holistic in 2023. CDP Forest provides a framework of actions to measure evaluation of ESG risks relating to salmon feed ingredients in and manage forest-related risks and opportunities, transparent order to increase transparency and traceability, to enable us to reporting on progress, and commitment to work proactively for benchmark feed ingredients on material ESG aspects and have the restoration of forests and ecosystems. We scored B on our the ability to reduce risk and drive change throughout our supply work against deforestation related to soy. Additionally, Grieg chains. The project was adopted by Global Salmon Initiative (GSI) Seafood was acknowledged as a supplier engagement leader and has received approval from all members, including Grieg (A-) by CDP in recognition of our efforts to measure and reduce Seafood. The project was launched in March 2024. Read more climate risk within our supply chain. For more information, about how the project is driving industry-wide accountability please visit CDP’s website. here. FIGURE 2.59 TARGETS AND ACHIEVEMENTS 2023 Targets All marine ingredients (excluding trimmings) used are based on fisheries certified according to MSC or MarineTrust (including FIPs) Achievements 2023 Yes, in all regions for the full year FFDRo below 2.52 (ASC requirement) Yes, in all regions FFDRm below 1.20 (ASC requirement) Yes, in all regions. The level is 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 Newfoundland, the only region where we used a small amount of palm oil) FIGURE 2.60 VOLUME OF MARINE INGREDIENTS Volume of marine ingredients (tonnes) Forage fish 2022 Forage fish 2023 Trimmings 2022 Trimmings 2023 Total 2022 Total 2023 Fish meal Fish oil 10 107 8 280 9 817 5 839 5 394 5 316 6 777 5 771 15 501 13 596 16 594 11 610 Trimmings also referred to as co-products, are viable cut-offs (e.g. entrails, fins, scales, heads, and tails) from fishing-processing activities commonly not used for other consumption. Trimmings are often ground and dried into fishmeal. Marine feed ingredients should come from sustainable sources. An overview of marine raw materials in our feed, including species, country of origin and certification of each raw material, is available here. PART 02 - OUR OPERATIONAL RESULTS 51 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. OUR COLLEAGUES Grieg Seafood consists of people with different backgrounds, The Grieg Seafood workplace is a secure environment for all genders, experiences, expertise and age. We have talented employees, and initiatives like this will only further emphasize employees range from teenage apprentices to people who will the core values of Grieg Seafood, which include openness, soon retire. We have people fresh from university, people with ambition, and concern for others.. advanced degrees, people who have worked in the industry for multiple years, and people who have grown up with salmon and In 2023, Grieg Seafood has implemented several measures to are experts in their field through dedication and experience. You enhance the gender balance. The appointment of women to can read more about our talented employees and their stories on fill vacant management roles, drawing from both internal and our website. DIVERSITY Diversity and equality are among the most essential aspects of external candidates, and the appointment of another female executive management team member are all included in this category. In 2023, women made up 27% of our newly hired staff. We undertake a yearly evaluation of the salaries and benefits living our culture. We are dedicated to being an employer that provided to our employees, and we benchmark our pay using provides equal opportunities. Our varied workforce consists of the Kornferry technique. The Kornferry methodology is one of 837 (ex contractors) employees representing 30 different nations, the tools we utilize to maintain gender equity and to ensure fair, with a gender balance of 235 women (28%) and 602 men (72%). competitive and living wages for our employees. In 2023, we placed a particular emphasis on the development of We select and appoint the best-suited individuals for a position female leaders and potential leaders. This was accomplished based on their abilities, qualifications, and aptitudes, including by completing the international program FiftyFifty, and other everyone from aquaculture technicians to regional directors. We initiatives focused on the local level. FifityFifty is a think tank and continue to place a significant emphasis on recruitment. Being an networking collaboration amongst various companies, aiming attractive employer and being visible in the areas where the next to encourage the development of individual projects within generation of aquaculture talent comes from are both essential those organizations. A greater gender balance in managerial components of our recruitment approach. positions in Norway and around the world is the target of the FiftyFifty initiative, which aims to provide a boost to focus on and We have prioritized ensuring that all of our employees, contribute to this goal. The concluding meeting was held in the regardless of ethnicity or background, are afforded the same Munch Museum in Oslo, Norway, and was attended by both our opportunities, rights, and respect. Strategies that compensate Chief Executive Officer and the attendees. for historical and societal barriers prohibiting women and men from working on a level playing field must also be readily «It is not counting the numbers of women employed that is available to guarantee fairness. There is a direct correlation important; it's all about that women thrive and have equal between gender equity and gender equality, characterized by opportunities as their male colleagues in Grieg Seafood,» says equal rights, responsibilities, and opportunities for men and Andreas Kvame, CEO. women. Our digital coaching program was maintained for all our employees, regardless of gender, in 2023. Under the terms of this program, participants would have the opportunity to get one-on-one instruction from a native speaker for six months to improve their language skills. The program was one of the projects we launched after COVID to grow our staff professionally and personally, and it has been met with positive feedback from those who participated. LEARN MORE ON OUR WEBSITE → → → → → → → Our policy and grievance mechanisms for human rights Human rights in our operations and value chain Our policy for diversity Our policy for gender equity Embracing diversity Health and safety principles HSE policy PART 02 - OUR OPERATIONAL RESULTS 52 HEALTH AND SAFETY In 2023, we once again conducted our now annual Great Place to HUMAN RIGHTS We are committed to respecting fundamental rights in our Work survey, and we are happy to say we kept our certification. operations, our value chain, and in the communities where we Not only does this confirm that our employees feel that Grieg operate. In 2022, the Norwegian Transparency Act entered into Seafood is a great place to work, they also think it is a safe force. Grieg Seafood operate in compliance with the Norwegian place to work. We have a zero accidents vision and encourage Transparency Act and is committed to following the UN Guiding our employees to report all deviations in accordance with our Principles on Business and Human Rights (UNGPs). In the end of recently published health and safety global policy. All employees June 2023 we published our first human rights progress report. receive health and safety training when they join us, and are The report provides an account of the due diligence conducted, required to re-take the courses regularly. Employees have findings and actions, in line with the Norwegian Transparency the possibility to actively participate in and contribute to the Act. We will provide status on our efforts to ensure respect for development of their workplace safety through their employee human rights each year. representative. External health services provide health checks and advice to employees. In our Norwegian regions they are Based on this year’s assessment, the risk of human rights represented on our Health and Safety committees. We provide breaches connected to our own operations is evaluated as a health-plan for employees, ranging from dental and medical low. However, the human rights risk connected to our value to counselling depending on the region, and we offer a variety chain is considered high. Both upstream and downstream, our of health programs to the employees (competitions, gym value chains are linked to high-risk geographies and high-risk membership). We have a strong health and safety program to industries. There is generally low transparency and traceability in ensure our workers are protected and risks are minimized. This these value chains, as many of them are linked with the trading of includes adhering to local laws and legislation regarding working global commodities, where transparency and traceability can be hours in all our regions. We will never compromise on the health a huge challenge. Read more about how we have started to take and safety of our employees. Through our Supplier Code of action on prioritized areas in our value chain here. Conduct, we expect the same from our suppliers. OUR RESULTS FIGURE 2.61 UNIONIZED EMPLOYEES (%) AT YEAR-END 2023 Rogaland Finnmark British Columbia Newfoundland ASA Sales & Market Share 28% 48% n/a n/a n/a n/a We accept and welcome labor union membership 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 membership of the United Federation of Trade Unions (Fellesforbundet) and The Norwegian Food and Allied Workers Union (NNN), the largest labor unions in our industry. Due to privacy and security laws, we do not have access to data on all types of memberships, such as associations of professionals and graduates. It is therefore presumed that the actual number of unionized employees is higher than depicted. We also accept and welcome collective bargaining and freedom of association, by union or employee representation. Any employee working in the same jobs as those covered by either of the above will receive the same working conditions and terms. FIGURE 2.62 CODE OF CONDUCT PROGRAM FIGURE 2.63 HARASSMENT INCIDENTS FIGURE 2.64 WHISTLEBLOWER CASES 1 One case was reported through our whistle blower channel in 2023. One of our employees claimed unlawful terminations and work-related concerns. The claim was closed after an external investigation. All employees have both the right and a responsibility to raise concerns. Such concerns should be reported immediately to line management, Group Management or the CHRO, or through our external whistleblower channel. The whistle blower channel is also available for external stakeholders through our website. All notifications through our external whistleblower channel are handled in a professional manner by EY. Depending on the content of the notification, it is logged either as an issue of information or as a whistleblower concern to be followed up. The CHRO receives a summary report from the operator of the whistleblower channel, and all reported incidents are reported to the CEO and Board of Directors. All reported incidents are investigated. Unless the whistleblower has chosen to remain anonymous, they will be kept adequately informed about the process and its outcome. We prohibit any retaliation against anyone for raising or helping to address a concern about violation of our policies. Our Supplier Code of Conduct requires suppliers to provide a 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. Our suppliers can also use our whistleblower channel to report negative occupational health and safety impacts in business relationships. 0 No harassment incidents were reported in 2023. Grieg Seafood has zero tolerance for misconduct in the workplace, and all reports of harassment are dealt with in accordance with established procedures. We do however, for reasons of privacy protection, not comment specifically on any reported incidents. 87% 87% (726) of our 837 employees (ex contractors) have completed our Code of Conduct program, broken down by 141 (19%) permanent and 16 (2%) temporary employees from Rogaland, 247 (34%) permanent and 27 (4%) temporary employees from Finnmark, 78 (11%) permanent and 1 (0.1%) temporary employees from Newfoundland, 125 (17%) permanent and 2 (0.3%) temporary employees from BC. Lastly, 84 (12%) permanent and 5 (1%) temporary employees from ASA and Sales & Market. Eight out of nine (89%) of our Group Executive Team have completed the Code of Conduct program, all from Norway. There has been no changes to the Group policies or similar that required the Boards supervision in the reporting year, hence none of the members of the Board of Directors from Norway received any particular Code of Conduct communication or training in 2023. Our Code of conduct program involves presentation and training on all of our principles. The Code of Conduct program is required to be completed every second year by all our employees FIGURE 2.65 HUMAN RIGHTS TRAINING FIGURE 2.66 NON-DISCRIMINATION TRAINING 88% 52% In 2023, 739 employees (88%) were given human rights training. This includes, but is not limited to, our Code of Conduct. Overall, 52% of our 837 employees (ex contractors) have completed a non-discrimination training course. 46% of our employees completed the course in 2023. This does not include our Code of Conduct program, which also includes a non-discrimination section. PART 02 - OUR OPERATIONAL RESULTS 53 FIGURE 2.67 GENDER BALANCE AT YEAR-END 2023 Female Male ROGALAND 23% 77% FINNMARK 25% 75% BRITISH COLUMBIA 28% 72% NEWFOUNDLAND 30% 70% ASA 40% 60% SALES & MARKET 50% 50% 0% 100% At year-end 2023, the Grieg Seafood Group had 837 employees (235 women and 602 men), including full-time and temporary workers but excluding contractors. Hence, women make up 28% of the workforce, while 72% are men. Management and support functions at Grieg Seafood ASA 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. The data provided is collected from the HR database in head-count at the end of the reporting period. FIGURE 2.68 GREAT PLACE TO WORK 74% FIGURE 2.69 APPRENTICESHIP PARTICIPATION AT YEAR-END FIGURE 2.70 APPRENTICESHIP ACHIEVEMENTS 27 10 Great Place to Work assesses and evaluates organizations and the practices that underpin workplace culture, based on the experience of employees. In 2023, we took part in the Great Place to Work survey for the sixth time in Norway, and for the fifth time globally. We are proud to announce that all our regions maintained the Great Place to Work certification in 2023. The Group achieved a total score of 74%, with 79% stating this is a great place to work. The score is above average and shows that Grieg Seafood is among the best companies to work for. With a high participation rate, this certification is an enormous credit to the employees and their hard work and loyalty. At year-end 2023, a total of 27 employees were participating in an apprenticeship: 16 in Rogaland and 11 in Finnmark. British Columbia and Newfoundland did not have any apprentices at year-end 2023. In 2023, a total of ten employees received their final certificate of apprenticeship: four in Rogaland, four in Finnmark, and two in Newfoundland. In cooperation with the North Island College and Fleming College, Grieg Seafood British Columbia has established 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. PART 02 - OUR OPERATIONAL RESULTS 54 FIGURE 2.71 THE WORKFORCE AT YEAR-END Permanent Temporary Contractor FIGURE 2.73 TURNOVER RATE 100% 2023 2022 ROGALAND FINNMARK BRITISH COLUMBIA NEWFOUNDLAND ASA SALES & MARKET 0% 84% 81% 97% 97% 91% 88% 13% 4% 16% 3% 2% 1% 3% 0% 2% 7% 9% 4% 100% The compiled data is reported in head-count as of 31 December 2023. Overall, 88% (752 of 858) of our workers were permanent employees in 2023 (incl. contractors). We had some temporary employees, particularly seasonal workers in our processing facilities and apprentices at our 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, or in office roles, providing regular services as needed (mostly IT-related work). 15% 11% 16% 17% 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. 40% 42% 32% 27% 23% 20% 14% 9% 5% 5% 0% ROGALAND FINNMARK BRITISH COLUMBIA NEWFOUNDLAND ASA SALES & MARKET GROUP These figures are calculated based on the total number of permanent employees 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. Turnover has overall decreased in 2023 compared to 2022. Grieg Seafood Newfoundland experienced a lower turnover in 2023 compared to 2022, but still high due to a competitive market. We expect more stability in the future. The turnover in BC has been high, which has been common through all industries in this region, as it was challenging to attract candidates in a competitive market. We continue to support our good relationships with First Nations and local communities to help attract potential employees from the region. We also work closely with training institutions to offer employment to applicants that have chosen aquaculture as their desired career path. Through our commitment to supporting the Truth and Reconciliation process in Canada, employment priority goes to First Nations candidates who want to work in their traditional territories. As a result, we are pleased to see the turnover decreasing in BC in 2023 compared to 2022. FIGURE 2.72 THE WORKFORCE AT YEAR-END Rogaland Finnmark British Columbia Newfoundland ASA Sales & Market Total 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 26 105 55 191 39 109 31 71 17 24 25 21 9 17 5 0 2 0 1 0 0 1 1 2 4 16 7 27 1 1 0 3 0 0 0 2 2 2 8 7 1 0 0 0 0 1 1 2 1 4 1 4 0 0 0 0 0 1 1 1 714 38 61 24 13 0 2 0 3 0 1 0 0 0 2 0 0 8 42 146 76 232 43 111 32 74 17 29 28 28 858 PART 02 - OUR OPERATIONAL RESULTS 55 FIGURE 2.74 FATALITIES 0 We had zero fatalities in 2023. FIGURE 2.75 ABSENCE RATE Short-term 2023 Short-term 2022 Target Long-term 2023 Long-term 2022 In Finnmark, Rogaland, Sales & Market, British Columbia and Newfoundland, the absence rate has decreased compared to the year before, while in ASA, the absence rate increased. The absence rate in Finnmark is above our target of 4.5%, mainly due to short-term absence. We continue to monitor the situation and implement actions to reduce the absence rate. In Finnmark, we have an ongoing process related to facilitating reduced work assignments and we have introduced training in absence follow-up for all employees. All initiatives in this area are implemented in consultation with employee representatives. PART 02 - OUR OPERATIONAL RESULTS 56 FIGURE 2.76 SAFETY INDICATORS Rogaland Finnmark British Columbia Newfoundland ASA Sales & Market * Hours worked (incl. overtime) Total work-related injuries Rate of work-related injuries** High-consequence work-related injuries Rate of High-consequence work-related injuries** 249 508 400 922 246 844 224 244 69 095 88 327 9 18 24 4 0 0 36 45 97 18 0 0 0 0 0 0 0 0 0 0 0 0 0 0 * Estimate based on number of employees and general annual working hours. **Rate of work-related injuries divided by the total number of hours worked (incl. overtime), multiplied by 1 000 000. Permanent and temporary employees are included in our incident data. Information on contractors is not currently available. 100% of our (858) employees are covered by health and safety systems, including contractors. We use occupational health and safety systems and standards in line with local regulations in each country. All of our health and safety procedures are internally audited and reviewed by management. As a part of our ASC, Global G.A.P and BAP certifications and ongoing certification processes, all of our health and safety management procedures are certified by an external party. The administrative support department are not directly covered by an occupational health and safety management system, but are subject to occupational health services and represented by a a staff-elected safety representative. Health and safety incidents are registered in our systems and reviewed as part of our monthly HSE meetings. Our occupational health services provider helps to map and assess the risk of the work environment, including physical, organizational and psychosocial factors. Job risks in each department are formally evaluated and categorized using a risk matrix. Job hazard assessments are also carried out for non-routine jobs. 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. We did not have any high-consequence injuries in 2023. All our staff have the right to stop any type of work or task if they feel unsafe or that they are not competent enough to carry out their duties. These routines are established in all our regions and all new employees are given the information about how these systems work and they can also report anonymously through their union representative, employee representative or our whistleblowing channel for major issues which is handled by an external partner EY if they feel anything is unsafe or a hazard in their work environment. We have a "no reprisal" policy when it comes to reporting health and safety issues. This is described in our Code of Conduct. Our improvement and preventative initiatives are based on thorough evaluation of all accidents and near misses that are reported in our deviation system and are designed to reduce risk and prevent the reoccurrence of unwanted incidents. Mitigating measures may, for example, include servicing machinery, ordering new equipment, training employees, or changes in procedures and instructions. We always use required Personal Protective Equipment (PPE) to do our job as safely as possible, and our operations pose no known ill-health risks. FIGURE 2.77 H1-FACTOR/LTIR Rogaland Finnmark British Columbia Newfoundland ASA Sales & Market Group H1-factor/LTIR * Absence rate 2019 2020 2021 2022 2023 2019 2020 2021 2022 15 22 35 9 28 36 n/a n/a 0 0 0 0 42 22 6 5 0 0 25 21 9 0 0 0 32 22 8 9 0 0 3.5% 4.9% 2.0% n/a 0.3% 0.5% 3.1% 5.6% 6.8% n/a 1.1% 3.0% 8.7% 5.6% 1.3% 0.5% 0.0% 0.9% ** n/a 24 15.97 13 16 3.2% ** 4.9% ** 5.0% ** 5.6% 9.7% 6.4% 1.6% 0.4% 2.2% 6.0% 2023 3.9% 8.0% 3.9% 1.4% 0.7% 0.6% 4.5% * H1-factor/LTIR: number of lost-time injuries divided by the total number of hours worked (incl. overtime from and including 2023), multiplied by 1 000 000. Permanent and temporary employees are included in our incident data. Information on contractors is not currently available. ** Including Shetland. On a group level, the number of LTI incidents in 2023 has increased compared to 2022, mainly due to an increase in the more common type of work injuries. As a result of this we will have an increased focus on procedures and handling of equipment in order to reduce these incidents going forward. In Grieg Seafood BC, we have been working for several years to improve our openness and reporting in order to create a more mature safety performance culture and as a result Grieg Seafood BC are OSSE certfifed. Our ultimate goal is that people both feel and are safe, that we have an open reporting culture and that HSE always are at the top of our agenda. In our quarterly Business Reviews with our regions, we always start the meetings by going through the HSE statistics. We conduct audits and inspections, execute both safety action plans and safety observations, and, if possible, assess the quality of observations and how actions are closed. We also conduct safety training and safety meetings. In order to avoid any under-reporting of incidents, no LTIR target has been defined. PART 02 - OUR OPERATIONAL RESULTS 57 OUR FINANCIAL RESULTS PART 03 BOARD OF DIRECTORS’ REPORT CORPORATE GOVERNANCE GRIEG SEAFOOD GROUP ACCOUNTS GRIEG SEAFOOD ASA ACCOUNTS AUDITOR’S REPORT ALTERNATIVE PERFORMANCE MEASURES 60 75 84 123 139 142 BOARD OF DIRECTORS 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. GROUP EXECUTIVE MANAGEMENT TEAM Our executive 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. PART 03 - OUR FINANCIAL RESULTS 59 BOARD OF DIRECTORS’ REPORT BOARD OF DIRECTORS’ REPORT GRIEG SEAFOOD’S VISION AND AMBITIONS OPERATIONAL REVIEW FINANCIAL PERFORMANCE GROUP FINANCIAL STATEMENT FINANCIAL PERFORMANCE GRIEG SEAFOOD ASA RISK AND RISK MANAGEMENT CORPORATE SOCIAL RESPONSIBILITIES EVENTS AFTER THE REPORTING DATE OUTLOOK GOING CONCERN STATEMENT FROM THE BOARD OF DIRECTORS AND THE CEO 61 63 65 69 70 72 73 73 74 74 MAIN ACHIEVEMENTS GRIEG SEAFOOD’S VISION AND AMBITIONS 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, and British Columbia and Newfoundland in Canada. 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 business strategy, the Group aims to increase the harvest volume to 120 000-135 000 tonnes 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 are 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 by stocking larger smolt to sea, improving fish health and welfare, and providing digital decision-making support to its farmers. TARGETS AND ACHIEVEMENTS Global growth, value chain repositioning and cost improvement are the key areas of the Group’s business strategy. Despite challenges in some areas during 2023, the Board wants to recognize the hard work, passion and dedication of the employees in all regions. With the improvement measures that have been implemented throughout the year, the Group moves forward with expectations of improved results in 2024. As part of the strategy, the Shetland operations were sold in 2021 to concentrate the Group’s focus on the regions with the greatest potential for profitable growth - Norway and Canada. An important project for Grieg Seafood has been the development of Grieg Seafood Newfoundland, where salmon was transferred to the sea for the first time in 2022 and harvesting started towards the end of 2023. The Group originally estimated a total harvest volume of 87 000 tonnes in 2023. The actual harvest volume was impacted by reduced growth at sea due to biological challenges, mainly in Finnmark, and came to 72 015 tonnes GWT in 2023. The market demand for farmed salmon both in the retail and HoReCa sectors continued strong in 2023. The average NQSALMON price for 2023 came to NOK 92.3 per kg, while Urner Barry (Seattle West Coast, fresh, whole fish) came to NOK 84.7 per kg in 2023. Weak biological performance in Finnmark mainly due to the rarely occurring parasite Spironucleus Salmonicida (Spiro) that led to reduced survival and reduced growth in sea put pressure on both the farming cost and price realization from this region. Measures have been taken to address the challenges both in the short and medium term. • Harvested volume of 72 015 tonnes • Operational EBIT of NOK 780 million, with Operational EBIT/kg of NOK 10.8 • Net profit after tax of NOK 560 million and earnings per share equal to NOK 5.0 • Salmon market remained strong • Results impacted by historical biological events • Milestone achieved with first harvest ever in Newfoundland • Improved processing capacity via partnerships and expanded availability of Value-Added Products (VAP) • Approved a NOK 130 million investment in a secondary processing facility with a capacity of at least 10 000 tonnes at Oslo airport • Identified initiatives to reduce costs by NOK 150 million over the next two years as part of the ongoing improvement program • In the process of identifying long-term partners for the development of the Canadian farming operations • Continued focus on sustainable farming certification with 34 out of 40 eligible sites ASC certified, representing 81% of the harvested volume in 2023 • Dividend proposal of NOK 1.75 per share, subject to approval by the Annual General Meeting in June 2024 • Ranked third by the Coller FAIRR Protein Producer Index, acknowledging Grieg Seafood as one of the world’s top sustainable protein producers • Received a Leadership (A-) score from CDP for transparency and actions on climate change risks, reinforcing the Group’s environmental commitment FIGURE 3.1 HARVEST VOLUME (1 000 TONNES GWT) 90 80 70 60 50 40 30 20 10 0 2019 2020 2021 2022 2023 PART 03 - OUR FINANCIAL RESULTS 61 The Group aims to be cost competitive. The industry experienced 3nd on the Coller FAIRR Index, as one of the world’s most- feed ingredients in order to grow sustainably. Grieg Seafood has to secure the water intake to the freshwater facility in Adamselv. general cost inflation during 2022, including a sharp rise in feed sustainable protein producers. Grieg Seafood also received the identified and mitigated the most material risks related to feed Grieg Seafood also participates in a project with academia to prices, which has driven up the farming cost in all regions in 2023 Leadership (A-) score from the CDP for its transparent reporting ingredients, overfishing and deforestation. To ensure that feed investigate and learn more about Spiro. Towards year end 2023, as the fish has been harvested. In addition, biological challenges and actions related to climate change. ingredients does not contribute to overfishing and deforestation, construction of a new 3 000 tonnes capacity post-smolt unit in put pressure on the farming cost, particularly in Finnmark due to Grieg Seafood requires recognized certification of its high-risk Finnmark started, where the first smolt will be transferred to sea the impact from Spiro. The Group has climate reduction targets approved by the Science ingredients. Fish meal and fish oil from fisheries and Brazilian in 2026. In general, it is expected that post-smolt will improve Biological control is the main cost driver and the primary Based Target initiative (SBTi), with the aim of reducing carbon soy and palm oil are identified as high-risk ingredients. Grieg fish health and welfare, as it provides better control of the fish’s operational focus area in the farming regions. The Group has emissions by 35% by 2030 and 100% by 2050. In 2023, the Group Seafood has been acknowledged by CDP Forest with a B-score environment for a longer period of time. Post-smolt makes the implemented several cost improvement initiatives, in the area increased total emissions by 9% compared to the year before. for its work against deforestation related to soy. fish more robust before they are transferred to the sea farms, of research and development (R&D) and the utilization of new The increase is mainly attributable to an increase in the emission and reduces their exposure to seaborne biological risks. The technologies in addition to cost saving program, which, combined factors from feed in Scope 3, operational expansion and harvest Aquaculture Stewardship Council (ASC) certification is an Group’s post-smolt strategy in Rogaland has provided promising with a higher harvested volume, are expected to reduce or in Newfoundland, and purchase and distribution of a larger important objective for the Group, as it provides the market with results so far. Other initiatives to improve fish health and welfare stabilize the farming cost. volume of external fish compared to previous years. Despite a substantial increase in the Newfoundland region following assurance of responsible operations and production of high- include the selection of roe with specific qualities related to sea quality seafood certified to the highest social and environmental lice and diseases, feed customized for the various stages of the Creating shareholder value is a prerequisite for company growth successful harvesting, the Group has experienced reduction in standards. As at year-end, 81% of the Group’s harvested volume salmon’s lifecycle, and vaccinations to immunize against specific and survival, and Return on Capital Employed (ROCE) is the its other operating regions. The absolute Scope 1 greenhouse for 2023 was ASC certified. The Group aims to continue to certify diseases. Group’s ultimate financial performance indicator (see Alternative gas (direct emissions from company-owned and controlled sites. Performance Measures for definition). The ROCE for 2023 resources) and Scope 2 (indirect emissions from the generation Grieg Seafood aims to reduce the overall use of medical sea lice ended at 7%, compared to the ROCE target of 12% per year. The of purchased energy) emissions increased by 3% in 2023 Production and harvest volumes depend on the number of smolt treatments based on efforts to use targeted preventive methods, result was impacted mainly by weak biological performance in compared to 2022, while harvest volume decreased by 15% due transferred to the sea, and how well that fish performs in terms such as sea lice skirts and cleaner fish (Rogaland only). Grieg Finnmark. The sustainability scoreboard includes some of the key to biological challenges and focus on growing biomass in 2023. Measured as kilograms of C02 equivalents per tonne harvested, emissions increased by 21%. Scope 3 emissions (emissions that of growth and survival. By effectively preventing and combating Seafood BC uses a combination of a barrier system between the sea lice and health issues, and by understanding the salmon’s farmed salmon and the environment and the latest mechanical behavior, the Group’s farming regions have worked continuously sea lice removal tool to keep sea lice levels down. The Group performance indicators (KPIs) for the Group. Sustainability occur upstream and downstream in the value chain) accounted to improve survival and growth rates. Grieg Seafood targeted a also aims to avoid use of antibiotics when possible, and use of and financial results go hand in hand. Good financial results for 92% of total emissions in 2023. Even though farmed Atlantic survival rate of 95% for 2023. Only Newfoundland reached this antibiotics decreased compared to 2022. In Norway, effective are needed to develop the Group's operations sustainably, and salmon already has a low carbon footprint, more work needs to target in 2023. The survival rate in Rogaland increased from 92% vaccines have reduced the use of antibiotics significantly. Limited sustainable operations are needed to safeguard long-term be done to reduce the impact from the global food system. in 2022 to 94% in 2023, Finnmark came to 92% up from 91% in amounts have been used to secure the welfare of the fish when financial results and performance, and create or maintain value 2022, while BC was stable at 91%. The main biological challenge there are no other alternative treatments, which was the case in for all stakeholders. That is why sustainable farming practices Salmon feed is the most important and cost-intensive input factor in Finnmark in 2023 has been Spiro. To mitigate Spiro, Grieg Finnmark and BC in 2023. form the very foundation of all areas of Grieg Seafood’s strategy. in salmon farming. The industry needs to develop new Seafood has invested NOK 70 million in UV treatment facilities The Board was pleased to see that Grieg Seafood was rated FIGURE 3.2 FARMING COST PER KG Rogaland (NOK/kg) Finnmark (NOK/kg) British Columbia (CAD/kg) FIGURE 3.3 ROCE AND OPERATIONAL EBIT/KG ROCE ROCE target (12%) Operational EBIT/kg / g k K O N 80.0 70.0 60.0 50.0 40.0 30.0 C A D k g / 12.0 11.0 10.0 9.0 8.0 7.0 6.0 5.0 30% 20% E C O R 10% 0% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 30 20 10 0 O p e r a t i o n a l I E B T k g / Newfoundland not included, as the farming cost in 2023 is not representative as we are scaling up our production in the region, which impact the cost level of the first harvested generation. Rogaland (NOK/kg) Finnmark (NOK/kg) British Columbia (CAD/kg) ROCE ROCE target (12%) Operational EBIT/kg PART 03 - OUR FINANCIAL RESULTS 62 Diseases, winter ulcers and other biological issues can affect the The Group conducted the global Great Place to Work survey also quality of the salmon. A superior quality salmon gives a positive in 2023. The Board is proud to report that all regions received OPERATIONAL REVIEW second half of 2023. ISA led to early harvest on some sites, which affected the biomass growth throughout the year.The 12-month overall impression, with good meat quality and no external their Great Place to Work certification. The total score of 74% for In general, both freshwater and seawater production through rolling survival rate for 2023 improved from 92% in 2022 to 94% damage or faults, while downgraded salmon has external and/ the Group was very satisfactory, proving that Grieg Seafood is the year was good, however with some challenges to freshwater in 2023. or internal faults or damage, and obtains a lower price in the among the best companies to work for. production in BC and seawater production in Finnmark impacting market. The Group aims for 93% of its salmon to be graded the Operational EBIT. For further details, see the separate The farming cost ended at NOK 60.4 per kg in 2023, up NOK 12.2 as superior quality. Biological issues such as winter ulcers, Grieg Seafood operates in many rural communities, and is regional chapters in Part 2 Profit & Innovation. per kg from NOK 48.2 per kg in 2022. The industry experienced a Spiro and string jellyfish negatively impacted the quality of the grateful for their permission to farm salmon in their inlets and general rise in costs in 2022, in particular in feed prices with an fish harvested in 2023, and only Newfoundland reached this fjords. The Group aims to create local jobs and opportunities, A summary for the farming regions in Rogaland, Finnmark, increase close to 40%, which has continued to impact the farming target. Finnmark was particularly hit hard, while BC had an use local suppliers, and engage in and support various local British Columbia, Newfoundland and the sales organization cost in 2023 until the generation of impacted fish is harvested. improvement in quality share compared to 2022. The Group’s projects and activities. Communities’ social license to operate follows below. post-smolt program, with reduced exposure to biological is essential for sustainable growth. In British Columbia, Grieg challenges in the sea, is expected to contribute to an increased Seafood is farming in areas that belong to indigenous peoples, superior share. while Finnmark has been home to the Sami people for millennia. Grieg Seafood recognizes that these groups have special rights, Unfortunately, the Group reported two escape incidents in 2023, as acknowledged in the United Nations Declaration on the Rights ROGALAND Grieg Seafood Rogaland harvested a volume of 25 980 tonnes compared to NOK 755 million in 2022. This corresponds to NOK 28.3 per kg in 2023, up NOK 1.8 per kg from NOK 26.6 per kg in Operational EBIT for the year ended at NOK 736 million, in 2023, a decrease of 8% compared to the 28 387 tonnes 2022. harvested in 2022. Sales revenues amounted to NOK 2 305 in British Columbia. Both incidents happened during transfer of Indigenous Peoples (UNDRIP), and takes particular care to million, compared to NOK 2 124 million in 2022. The increase Read more about Grieg Seafood Rogaland’s operational priorities of fish, and due to human errors. Management has taken steps avoid infringing them. was mainly driven by the strong market in 2023. In 2023, the in the regional chapter in Part 2 Profit & Innovation. to prevent similar incident from happening again. In addition to ensuring that farms have high technical standards and that procedures are being followed, all employees regularly attend courses on escape prevention. The Group does not compromise on occupational health and safety, and follows up accidents and absence rates. The Group had no high-consequence work-related injuries in 2023. The Board is pleased to see that the Group reached the absence rate target below 4.5% for most regions, expect in Grieg Seafood Finnmark. Management has routines in place to monitor and follow up absence. price achievement came to NOK 88.7 per kg, up NOK 13.9 per kg from NOK 74.8 per kg in 2022. Higher market prices were offset by the sale of 17% of the volume under fixed-price contracts, in addition to quality downgrades. The share of superior quality fish FIGURE 3.6 ROGALAND OPERATIONAL EBIT/KG YEAR-OVER-YEAR Source: Group Accounts Note 5 decreased from 84% in 2022 to 79% in 2023. 13.9 The freshwater production has been good in 2023. During the year, close to eight million smolt were transferred to the sea, with an average weight of 460 grams. Overall, the underlying seawater production was good during the year, despite some challenges related to Infectious Salmon Anemia (ISA) and winter ulcers during the first half of the year and gill disease during the 26.6 28.3 -12.2 OpEBIT/kg 2022 Sales revenue/ kg Farming cost/kg OpEBIT/kg 2023 FIGURE 3.4 SURVIVAL RATE AT SEA FIGURE 3.5 SUPERIOR SHARE OF SALMON Rogaland Finnmark British Columbia Newfoundland Target (93%) Rogaland Finnmark British Columbia Newfoundland Target (93%) Rogaland Finnmark British Columbia Newfoundland Target (95%) Rogaland Finnmark British Columbia Newfoundland Target (93%) 100% 90% 80% 100% 80% 60% 40% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Survival rate calculated as a rolling twelve month survival rate. PART 03 - OUR FINANCIAL RESULTS 63 FINNMARK Grieg Seafood Finnmark harvested a volume of 25 170 tonnes in 2023, a decrease of 30% compared to 36 024 tonnes in 2022. Sales revenues amounted to NOK 1 947 million, a decrease of 26% compared to NOK 2 629 million in 2022. The reduction was mainly driven by the lower harvest volume. Finnmark achieved an average price of NOK 77.3 per kg in 2023, up NOK 4.4 per kg from NOK 73.0 per kg in 2022. The price achieved was significantly depressed by downgrades, in addition to the sale of 15% of our volume under fixed-price contracts. The superior quality share decreased from 86% in 2022 to 58% in 2023 due to impact from Spiro, winter ulcers and string jellyfish. Freshwater production at Finnmark’s own facility at Adamselv was good during the year. A total of 12.2 million smolt, with an average weight of 210 grams, were transferred to the sea in 2023. Seawater production has been challenging this year. Spiro, which was detected in fish from Adamselv in 2022, has continued to FIGURE 3.7 FINNMARK OPERATIONAL EBIT/KG YEAR-OVER-YEAR Source: Group Accounts Note 5 FIGURE 3.8 BRITISH COLUMBIA OPERATIONAL EBIT/KG YEAR-OVER-YEAR Source: Group Accounts Note 5 13.3 1.0 4.4 25.7 13.0 -17.1 SALES & MARKET Grieg Seafood is on an exciting journey of growth, which involves building a stronger presence in the market. With a fully-integrated global sales organization, the Group aims to optimize biological performance and market timing through close collaboration between farming and sales, thereby securing good price achievement. The downstream strategy is based on strategic partnerships, value added processing and brand cultivation. While sales currently consist mainly of fresh, head-on gutted salmon, the target is for Value Added Processing (VAP) to account for 20-30% share of the harvested volume by 2026. OpEBIT/kg 2022 Sales revenue/ kg Farming cost/kg OpEBIT/kg 2023 OpEBIT/kg 2022 Sales revenue/ kg Farming cost/kg OpEBIT/kg 2023 close to key markets and customers in the EU and the USA. Increasing the VAP share is also an important part of reducing CO2 emissions. -19.6 -5.3 To this end, the Group aims to establish processing partners BRITISH COLUMBIA Grieg Seafood British Columbia (BC) harvested 17 682 tonnes NEWFOUNDLAND Grieg Seafood Newfoundland is a greenfield project acquired Today, the Group has the successful Skuna Bay brand in the USA, and aims to develop B2B brands going forward. Key milestones in impact the seawater production, leading to early harvesting and in 2023, 13% lower than in 2022 (20 286 tonnes). Harvesting in 2020. In 2023, an important milestone was reached, when 2023 included a strengthened processing capacity with partners the culling of fish with sickness signs to protect fish welfare. At volumes vary significantly every other year in BC due to local harvesting of the first generation of fish that was transferred in Norway, Europe and Western Canada and an increasing supply the end of the year, Finnmark also experienced an increasing production region arrangements and fewer farms on the West to sea in 2022 started. The harvest volume came to 3 184 of own VAP products in the European, Asian and the US markets. impact from string jellyfish and winter ulcers. This has affected Coast of Vancouver Island compared to the East Coast. As a tonnes. Sales revenues amounted to NOK 235.7 million and the 5% of the global harvested volume in 2023 was sold as VAP. the biomass growth. Measures to reduce the impact from winter consequence, the region's volume varies every other year, realized price for the year came to NOK 74.0 per kg. The price ulcers include feed composition and vaccination. String jellyfish regardless of the underlying biology. achievement was supported by a favorable superior share of 97% For more information on the sales organization and the markets, has been a threat to several fish farmers towards the end of the in addition to good average harvest weight. see the Sales & Market chapter in Part 2 Profit & Innovation. year. The situation is closely monitored to safeguard the welfare Sales revenues for the year amounted to NOK 1 468 million, a of the fish. Nevertheless, the 12-month survival rate improved decrease of 12% compared to NOK 1 665 million in 2022. The from 91% in 2022 to 92% in 2023, due to better survival of the new price achievement came to NOK 83.0 per kg in 2023, up NOK generation. Spiro will impact the production until the generation 1.0 per kg compared to NOK 82.1 per kg in 2022. The price is completely harvested by Q2 2024. achievement was positively impacted by an increased share of superior quality fish, which ended at 90% in 2023 compared to The farming cost ended at NOK 64.4 per kg in 2023, up NOK 85% in 2022, however, suppressed by lower market prices. 17.1 per kg from NOK 47.3 per kg in 2022. In addition to reduced survival and early harvest of fish impacted by Spiro, the farming The freshwater production has been impacted by reduced Production at the freshwater facility has been on track. The new generation is healthy and growing well, with high survival rates. Approximately 2.5 million smolt were transferred from our freshwater facility to sea during the spring and summer of 2023. The seawater licenses in Newfoundland require use of sterile all-female salmon in order to eliminate the risk of genetic pollution of wild Atlantic salmon in case of escape. The fish have performed well biologically, with a 12-month rolling survival rate cost was impacted by the general rise in cost during 2022, which survival during the year due to technical issues and lower quality at 95% and good growth, and the company has not experienced applied in particular to feed, whose prices increased by close to roe, which has impacted the number of smolt transferred to sea any sea lice or other biological issues during the year. 40%. This impacted the farming cost in 2023, when fish impacted this year. Seawater production was stable in 2023. The 12-month by the price increase have been harvested. Additionally, reduced survival rate remained unchanged from 2022 to 2023 at 91%. The farming cost (the total cost of producing and harvesting fish) growth due to the biological challenges increased the economic Despite seasonal challenges related to sea lice and events of feed conversion rate (eFCR, a measure of the feed utilization) low dissolved oxygen, BC managed to stabilize survival due to from 1.40 in 2022 to 1.48 in 2023. treatments and the barrier and CO2L flow system. Operational EBIT for 2023 ended at NOK 327 million, compared to The farming cost increased from CAD 9.1 per kg (NOK 68.8) NOK 926 million in 2022, which corresponds to NOK 13.0 per kg in 2022 to CAD 11.2 per kg (NOK 88.4) in 2023. The increase is came to CAD 12.1 per kg (NOK NOK 95.9) in 2023. The farming cost is high due to the low harvest volume and to still being in a development phase with low capacity utilization. Most of the production cost has been accounted for as inventory (biological assets excluding fair value adjustment) in the balance sheet, although a portion has been expensed directly to the income in 2023, down NOK 12.7 per kg from NOK 25.7 per kg in 2022. mainly related to cost inflation on feed and other input factors, in statement, which totaled NOK 76.4 million (NOK 24.0 per kg) in addition to the increased costs recognized as abnormal mortality 2023. Read more about Grieg Seafood Finnmark’s operational priorities in the income statement. in the regional chapter in Part 2 Profit & Innovation. Operational EBIT for 2023 totaled NOK -146.1 million, compared Operational EBIT for the year ended at NOK -94 million, to NOK -114.7 million in 2022. compared to NOK 270 million in 2022, which corresponds to NOK -5.3 per kg in 2023, down NOK 18.6 per kg from NOK 13.3 per kg in 2022. Read more about Grieg Seafood British Columbia’s operational priorities in the regional chapter in Part 2 Profit & Innovation. Read more about Grieg Seafood Newfoundland in the regional chapter in Part 2 Profit & Innovation. PART 03 - OUR FINANCIAL RESULTS 64 FINANCIAL PERFORMANCE GROUP FINANCIAL STATEMENTS The consolidated financial statements have been prepared in accordance with IFRS® Accounting Standards as adopted by the EU. PROFIT AND LOSS SALES REVENUE AND HARVESTED VOLUME The Group harvested 72 015 tonnes GWT in 2023, down 15% Market demand remained strong in 2023. Relative to 2022, it is estimated by Kontali Analyse that the global volume of Atlantic salmon harvested decreased by approximately 2%. However, due to a limited supply of salmon, consumption decreased in most markets in 2023 compared to 2022. The largest relative increases in consumption were found in China, up 39%, and Russia, up 19%, while the demand in EU & the UK was down by 5%. The Group's price realization for the year was NOK 82.7 per kg (NOK 75.8 per kg) on aggregate for its farming regions. By comparison, the average NQSALMON NOK/kg price for 2023 was NOK 92.3 per kg (82.0). The Group’s price realization FIGURE 3.9 SENSITIVITY ANALYSIS SALES REVENUE/KG Actual for 2023 +/- 2.5 % +/- 5.0 % +/- 7.5 % +/- 10.0 % +/- 12.5 % Sales revenue/kg opEBIT/kg impact 82.7 84.8 / 80.6 86.8 / 78.6 88.9 / 76.5 91.0 / 74.4 93.0 / 72.4 2.1 4.1 6.2 8.3 10.3 The Group’s primary market is Continental Europe. Sales to Continental Europe comprised 53% of sales revenue in 2023 (or 56% of volume sold), down from 58% of the sales revenue in 2022 (63% of volume sold). North America was the second largest market, and totaled 31% of sales revenue in 2023 (or 31% of volume sold), up from 29% of the sales revenue in 2022 (26% of volume sold). Sales to Asia accounted for 11% of the sales revenue in 2023 (or 7% of the volume), compared to 9% in 2022 (6% of volume). Even though salmon is regarded as a commodity, prices vary across geographical markets, with the (relatively) highest price/kg generated in Asia and North America. compared to 84 697 in 2022. The Norwegian regions contributed was negatively impacted by contracts for some of the Group’s 71% (76%) of the harvested volume, while the Canadian regions Norwegian volume, in addition to price achievement on contributed 29% (24%). production grade harvest volume. The calculation is performed bottom-up, based on separate calculations for the four farming regions, by analyzing incremental percentage changes in sales revenue, all other factors remaining unchanged. Grieg Seafood did not have sales to Russia in 2023 or 2022. Sales to Ukraine accounted for 0.1% of Grieg Seafood’s total revenue in 2023, compared to 0.3% in 2022. The Group’s main product, fresh whole gutted Atlantic salmon, The sensitivity analysis below illustrates the impact changes in is traded largely as a commodity, and the prices achieved largely sales revenue/kg have on Operational EBIT/kg. reflect a general market price. The prices achieved will, to some extent, deviate from the spot market price, based on quality, sales contracts and the ability to place the salmon effectively in the market. Price achievement is measured relative to the relevant observed market price or reference price. There are several reference prices for salmon. In Norway, Fish Pool provides historic price information, as well as future salmon 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. Total sales revenue for the year came to NOK 7 020 million, down NOK -144 million from NOK 7 164 million in 2022. The sales revenue from the Group’s farming regions totaled NOK 5 956 million in 2023, down NOK -462 million from NOK 6 418 million in 2022 (see Note 5 to the Group Accounts). The decrease in sales revenue is due to a combination of lower harvest volume and lower share of superior quality fish in 2023 compared to 2022. The difference between the total sales revenue for the Group of NOK 7 020 million and sales revenue from farming regions of NOK 5 956 million is attributable to the Elim/Other effect (see Note 5 to the Group Accounts), which includes the gross uplift on sales revenue for the Group generated by the sales organization. PART 03 - OUR FINANCIAL RESULTS 65 FARMING COST Costs directly related to the production and harvesting of salmon FIGURE 3.10 SENSITIVITY ANALYSIS FARMING COST/KG FIGURE 3.11 FARMING COST comprise the farming cost. The inputs needed to raise a live salmon from roe to harvestable size account for the bulk of the farming cost. In addition, costs related to harvesting and Actual for 2023 Farming cost/kg opEBIT/kg impact Feed cost Admin Depreciation Smolt Salaries Other processing are included. Performance is tracked through the farming cost per kg of harvested salmon. Tracking the underlying drivers that influence the cost of salmon to be harvested in the future, such as survival, feeding and growth, is therefore vital. The regional Operational EBIT is calculated as sales revenue less the farming cost. See Note 5 to the Group Accounts and Alternative Performance Measures for more information. Until harvest, the production cost of the salmon is capitalized to inventory and included in the line item ‘biological assets’ in the balance sheet. The production cycle for a salmon, from roe to harvest weight, is about three years, whereas the production cycle after smoltification is about 12-24 months. Working capital requirement is, per generation, generally progressive throughout the production cycle. Due to the long production cycle for Atlantic salmon with a harvest weight of about 4-5 kg, the expensed farming cost through the income statement at the point of harvest reflects all costs for all past periods (if not previously expensed as abnormal mortality). Production cost capitalized to inventory (biological assets excluding fair value adjustment, see Note 19 of the Group Accounts) comprises feed as well as health, treatment and fish welfare-related expenses. In addition, the production cost capitalized to inventory includes salary, depreciation of fixed assets and administration costs that are allocated to production. Feed cost comprises the largest individual part of the production cost. In recent years, the industry has faced challenges with respect to sea lice. This has caused an increase in costs directly related to treatments and increased investments in equipment and technologies. This development has had a noticeable impact on the relative allocation of cost factors, as well as the total cost level in the industry. In terms of cost per kg, however, the loss of harvested volumes has had a significantly larger impact than the direct cost increases. As production cost per kg has risen in recent years, the directly variable cost of feed has become a smaller part of the total incurred cost per kg produced salmon. At the same time, other costs, such as salaries, health costs and maintenance, have become a larger share of the total. Although the industry has seen feed prices increase by up to 40% from 2021 to 2022, this was not fully captured in the expensed farming cost until 2023 when the fish impacted by the price increase was harvested. The sensitivity analysis illustrates the impact changes in farming cost/kg have on the Operational EBIT/kg, expressed as percentage changes in the 2023 financials. -/+ 2.5 % -/+ 5.0 % -/+ 7.5 % -/+ 10.0 % -/+ 12.5 % 70.2 68.5 / 72.0 66.7 / 73.7 64.9 / 75.5 63.2 / 77.2 61.4 / 79.0 1.7 3.3 5.0 6.6 8.3 The calculation is performed bottom-up, based on separate calculations for the farming regions, by analyzing incremental percentage changes in farming cost, all other factors remaining unchanged. In addition to purchase prices for inputs to production, profitability is also influenced by how quickly the salmon grow and how efficiently feed is converted into weight gain (feed conversion rate). Water temperatures, biological conditions, farming practices and fish survival are key drivers for salmon growth. Higher seawater temperatures increase growth, but also increase biological risks in the form of diseases, sea lice and algal blooms. This may in turn result in lost feeding days, lower growth and reduced survival. Through the introduction of improved sensor technology, use of advanced imaging analysis and other technologies, the Group is continuously improving the ability to make informed decisions about feeding and protective measures. Strong and healthy fish, combined with high feed quality and good feeding practices, are the key to achieving a low production cost. Farming performance is measured through the economic feed conversion rate, or eFCR, and relative growth indices (achieved growth compared to own and feed supplier expectations). Feed accounted for 39% of the total cost per kg harvested fish in 2023, similar to 2022. At the same time, the economic feed conversion rate (eFCR) also remained unchanged from 2022 to 2023 at 1.39 for the Group (or 1.41 in 2023 excl Newfoundland). The eFCR measures how much fish feed is used to produce one kilogram of live salmon (net of mortality). The main difference between eFCR and bFCR (biological feed conversion rate) is that bFCR does not adjust the production figure for mortality. 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. In short, an efficient feed conversion is crucial to being cost competitive. Feed cost Admin Depreciation Smolt Salaries Other 2019 2020 2021 2022 2023 41% 4% 5% 11% 6% 32% 37% 37% 39% 39% 4% 5% 12% 6% 36% 4% 5% 15% 6% 4% 4% 14% 5% 33% 33% 4% 4% 13% 5% 36% 0% 100% FIGURE 3.12 ECONOMIC FEED CONVERSION RATE Rogaland Finnmark British Columbia Newfoundland Grieg Seafood Group Rogaland Finnmark British Columbia Newfoundland Grieg Seafood Group 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 2019 2020 2021 2022 2023 PART 03 - OUR FINANCIAL RESULTS 66 FIGURE 3.13 KEY FIGURES Rogaland Finnmark British Columbia Newfoundland Elim/Other Grieg Seafood Group Source: Group Accounts, Note 5 Harvest volume GWT tonnes Operational EBIT/kg (NOK) Operational EBIT (NOK million) 2023 25 980 25 170 17 682 3 184 — 72 015 2022 28 387 36 024 20 286 — — 84 697 2023 28.3 13.0 -5.3 -45.9 n/a 10.8 2022 26.6 25.7 13.3 n/a n/a 20.5 2023 736 327 -94 -146 -43 780 2022 755 926 270 -115 -97 1 739 The Group's farming cost for 2023 ended at NOK 70.2 per kg (NOK 52.7 per kg). The rise in farming cost compared to previous year is mainly due to inflation pressure on key input to production, including feed, in addition to increased cost of reduced survival. In total, the Norwegian farming regions contributed to 63% (69%) of the farming cost, an increase of NOK 14.6 per kg in cost, from NOK 47.7 per kg in 2022 to NOK 62.3 per kg in 2023. Canada had, despite a 3% higher harvest volume year-on-year, a farming cost of CAD 11.3 per kg, up CAD 2.2 per kg compared to CAD 9.1 per kg in 2022. This is mainly related to cost inflation and increased cost of reduced survival in BC, which increased by CAD 0.4/kg compared to 2022. Additionally, Newfoundland is included in the Canada segment’s farming cost from 2023, as they commenced harvesting during the year. The farming cost in Newfoundland is high due to the low volume and to still being in a development phase with low capacity utilization. The salmon farming industry might be volatile, due to both biological and market conditions. The following sensitivity analysis illustrates the impact changes in eFCR has on the Operational EBIT/kg, calculated as percentage changes on the 2023 financials. EBIT OPERATIONAL EBIT Operational EBIT (see Note 5 to the Group Accounts and Alternative Performance Measures for more information) in 2023 ended at NOK 780 million (NOK 1 739 million), equivalent to NOK 10.8 per kg (NOK 20.5 per kg). The decrease was mainly driven by a weak EBIT in Finnmark due to Spiro as well as loss in BC related to increased cost. The difference between Operational EBIT and the EBIT line item presented in the income statement for 2023 relates to the non-operational share of profit from associates, the production fee on the volume harvested in Norway, fair value adjustment of the Group’s biological assets, impairment of tangible and intangible non-current assets, litigation and legal claims, and decommissioning costs, as explained in the following. Additionally, a reconciliation between Operational EBIT and the EBIT presented in the income statement is provided in Note 5 of the Group Accounts. FIGURE 3.15 GRIEG SEAFOOD GROUP OPERATIONAL EBIT/KG YEAR-OVER-YEAR Source: Group Accounts, Note 5. FIGURE 3.14 SENSITIVITY ANALYSIS ECONOMIC FEED CONVERSION RATIO (EFCR) 6.9 Actual for 2023 -/+ 2.5 % -/+ 5.0 % -/+ 7.5 % -/+ 10.0 % -/+ 12.5 % eFCR opEBIT/kg impact 20.5 1.39 1.36 / 1.43 1.32 / 1.46 1.29 / 1.49 1.25 / 1.53 1.22 / 1.56 0.7 1.4 2.0 2.7 3.4 The calculation is performed bottom-up based on separate calculations for the farming regions, by analyzing incremental percentage changes in eFCR, all other factors remaining unchanged. 0.8 10.8 -17.5 OpEBIT/kg 2022 Sales revenue/kg Farming cost/kg Other cost/kg OpEBIT/kg 2023 RAW MATERIALS, SALARIES AND OTHER OPERATING EXPENSES Raw materials and consumables, which consist mainly of the Group’s freshwater and seawater fish stocks, in addition to feed, ended at NOK 2 748 million, up NOK 514 million compared to NON-OPERATIONAL SHARE OF PROFIT FROM ASSOCIATED COMPANIES, PRODUCTION FEE AND FAIR VALUE ADJUSTMENT OF BIOLOGICAL ASSETS The share of profit from associated companies included in NOK 2 234 million in 2022. Salaries and personnel expenses Operational EBIT ended at NOK -7 million for 2023 (NOK -1 ended the year at NOK 726 million, an increase of NOK 30 million million), see Note 5 to the Group Accounts. The production from NOK 696 million in 2022. See the Group Accounts Note 5 for fee, calculated at NOK 0.56 per kg (gutted weight) for volume more information. Other operating expenses ended at NOK 2 236 harvested during the first half of 2023 and NOK 0.90 per kg million, up NOK 149 million compared to NOK 2 087 million in (gutted weight) for volume harvested during the second half 2022. of 2023 (NOK 0.41 per kg) by the Norwegian regions, came to NOK 35 million in 2023 (NOK 26 million), while the fair value adjustment of biological assets impacted the Group positively by NOK 218 million in 2023, up NOK 135 million from NOK 83 million in 2022. PART 03 - OUR FINANCIAL RESULTS 67 WRITE-DOWN OF NON-CURRENT TANGIBLE AND INTANGIBLE ASSETS, LITIGATION AND LEGAL CLAIMS, AND DECOMMISSION COSTS In 2022, Norwegian aquaculture licenses were written down by NOK 47 million in the income statement (see Note 15 to the Group Accounts). Additionally, Grieg Seafood decided to end production in the shíshálh (Sechelt) farming area of British Columbia, negatively impacting the income statement for 2022 with a write-down of licenses and relevant seawater assets of NOK 93 million, in addition to site clean-up costs amounting to NOK 24 million. During the first half of 2023, Grieg Seafood finished the clean-up and expensed another NOK 3 million in decommissioning costs and reversed NOK 0.1 million in write- down of fixed assets related to the project. Total write-down not included in Operational EBIT in 2023 was as such NOK -0.1 million (NOK 140 million). The site clean-up costs are included in the financial statement line item "Decommissioning costs" (see Note 10 of the Group Accounts for more information). In 2023, the remaining accrual estimated as at year-end 2022 related to litigation and legal claims was reversed in connection to a settlement of lawsuits in North America, which explain the net positive line item contribution litigation and legal claims had on EBIT in the year, totaling NOK 20 million (cost of NOK 157 million). The income/cost are included in the financial statement line item "Litigation and legal costs" and thus not included in the Group’s Operational EBIT (see Note 10 of the Group Accounts for more information). EBIT EBIT (Earnings before interests and taxes) ended at NOK 981 million in 2023, down NOK 517 million from NOK 1 498 million in 2022. NET FINANCIAL ITEMS, TAXES AND NET PROFIT FOR THE YEAR FINANCIAL POSITION As at 31 December 2023, the book value of the Group's assets totaled NOK 13 663 million, up NOK 788 million from NOK 12 875 million as at 31 December 2022. The increase in the Group's balance sheet compared to 2022 was primarily due to increases in the biological assets and property, plant and equipment. The Group's goodwill, licenses, other intangible assets, and property plant and equipment including right-of-use assets totaled NOK 7 326 million as at 31 December 2023, up NOK 1 121 million from NOK 6 205 million as at 31 December 2022. Measured relative to total assets, these assets contributed 54% of the balance sheet as at 31 December 2023, compared to 48% as at 31 December 2022. The increase in assets are driven by our gross investment of NOK 880 million for the year as well as NOK depreciating versus CAD, increasing the book value of the Group’s Canadian operations when translating to NOK. Lastly, the Group has made additions of approximately NOK 708 million in leases that would be classified as operational leases according to the prior IFRS Standard IAS 17, which is not included in gross investments. These lease additions primarily relate to long-term well-boat charter hire, securing the Group’s operational capacity in the year’s ahead. Biological assets measured at cost totaled NOK 3 736 million as at 31 December 2023, up NOK 840 million from NOK 2 896 million as at 31 December 2022. Even though all farming regions had a higher biological asset book value at cost as at year- end 2023 compared to the same time last year, a significant contribution to the increase in biological assets are driven by Newfoundland. Newfoundland are, at year-end, conducting harvesting of the first generation of fish from the region, which explain a significant increase in biological assets measured at cost from Newfoundland. Measured relative to total assets, the accumulated capitalized cost of inventory contributed 27% of the balance sheet as at 31 December 2023, compared to 22% NET FINANCIAL ITEMS Net financial items came to NOK -137 million in 2023, down NOK as at 31 December 2022. Grieg Seafood’s biological assets are primarily fish at sea, which represented 93% of the book value 87 million from NOK -50 million in 2022. Compared to 2022, the of biological assets, excluding fair value adjustment, as at debt service cost in 2023 was higher. This is primarily due to the 31 December 2023. The comparable figure for 31 December 2022 increased market interest rates compared to 2022, which impact was 94%. By weight, biological assets totaled 58 181 tonnes at our borrowing costs through the floating rate component of the year-end 2023, up 7 568 tonnes from 50 614 tonnes at year-end term-loans’ and bond loan’s interest rate. 2022. Biological assets stocked at sea accounted for 99% of this TAXES AND NET PROFIT FOR THE YEAR Profit before tax in 2023 totaled NOK 844 million, a decrease of NOK 603 million from NOK 1 448 million in 2022. The tax expense for 2023 came to NOK 284 million, compared to a tax expense of NOK 294 million in 2022. Net profit in 2023 came to NOK 560 million, down NOK 594 million from NOK 1 154 million in 2022. amount at year-end 2023 (99% as at year-end 2022). The average live weight of the fish on aggregate (on land and at sea) was 1.0 kg as at 31 December 2023, compared to 1.1 kg at year-end 2022. As at 31 December 2023, Grieg Seafood was in a good financial position. The cash balance at the end of the year was NOK 216 million, down NOK 426 million from NOK 643 million as at 31 December 2022. In addition, The undrawn revolving credit facility and overdraft facility was NOK 887 million as at 31 December 2023, compared to NOK 1 700 million as at 31 December 2022. At the end of 2022, the Group had invested approximately NOK 1 000 million of cash surplus in money market funds - an investment that the Group has exited in full as at year-end 2023. Current assets (excluding fair value adjustment lease additions incl. the effect of changes in lease agreements of biological assets) over current liabilities measured 3.1 as at of approximately NOK 708 million not included in gross 31 December 2023, compared to 2.8 as at 31 December 2022. investments, which primarily relates to long-term well-boat Total equity as at 31 December 2023 came to NOK 6 669 million, charter hire contracts. up NOK 183 million from NOK 6 486 million as at 31 December 2022. The equity ratio as at 31 December 2023 was 49% The Group was in compliance with its financial covenants as compared to 50% as at 31 December 2022. at 31 December 2023. As at 31 December 2023, the equity ratio according to covenant was 53%, compared to 52% as at The Group's debt structure comprises sustainability-linked loans 31 December 2022. As at 31 December 2023, 56% of gross with a NOK 750 million term loan (outstanding NOK 656 million), interest-bearing liabilities (See Note 27 to the Group Accounts) an EUR 75 million term loan (outstanding EUR 66 million), a were green or sustainability-linked, compared to 75% as at NOK 1 500 million revolving credit facility and a NOK 200 million 31 December 2022. The decrease in the share of green and overdraft facility. As at 31 December 2023, net interest-bearing sustainability-linked financing is due to an increase of leasing liabilities (NIBD) excluding the effect of IFRS 16 totaled NOK liabilities during 2023. 3 873 million, up NOK 2 135 million from NOK 1 739 million as at 31 December 2022. The increase in NIBD excluding the effect Grieg Seafood aims to provide shareholders with a competitive of IFRS 16 is due to biomass build-up during the year and cash return on invested capital through payment of dividends and outflow related to dividend payout of NOK 504 million and taxes share price increases. The Board of Directors maintains that, as paid totaling NOK 861 million. an average over time, dividends should correspond to 30-40% of the Group’s profit after tax, adjusted for the effect of the In total, NIBD excluding the effect of IFRS 16 divided by the last fair value of biological assets (limited to 50% by Green Bond twelve months’ actual harvest volume (tonnes GWT) equalled agreement). At the same time, the Group’s net interest-bearing NOK 53.8 per kg as at year-end 2023, compared to NOK 20.5 at debt per kg harvested salmon should remain below NOK 40, year-end 2022. In comparison, at year-end 2023, NIBD including but can be exceeded in periods of growth investments. In 2023, the effects of IFRS 16 was NOK 4 879 million, up NOK 2 656 the General Meeting of Grieg Seafood ASA approved a dividend million from NOK 2 223 million as at 31 December 2022, which distribution of 4.5 (NOK 3.0 per share), which was according to equals 36% of the Group’s assets as at 31 December 2023, the Board of Directors proposal as communicated in the Annual compared to 17% as at 31 December 2022. Besides the causes Report of 2022. Based on the 2023 financials, the Board of of changes in NIBD excluding IFRS 16 as mentioned above, the Directors proposes a dividend of NOK 1.75 per share (equivalent changes in NIBD incl. the effects of IFRS 16 is driven by to NOK 196 million) be distributed to shareholders in 2024. The proposed dividend is subject to approval by the Annual General Meeting of Grieg Seafood ASA in 2024. FIGURE 3.16 EQUITY RATIO AND NIBD/HARVEST Equity ratio NIBD/Harvest o i t a r y t i u q E 55% 50% 45% 40% 2019 2020 2021 2022 2023 NIBD/harvest calculated as NIBD according to covenant divided by last 12 months harvested volume. Equity ratio NIBD/Harvest 58 55 53 50 48 45 43 40 38 35 33 30 28 25 23 20 18 / I N B D H a r v e s t PART 03 - OUR FINANCIAL RESULTS 68 Depreciation and amortization of non-current tangible and Total equity at the end of 2023 stood at NOK 2 981 million, up NOK 1 500 million revolving credit facility and a NOK 200 million intangible assets ended at NOK 3 million, down NOK 4 million NOK 30 million compared to NOK 3 011 million in 2022. During overdraft facility. At the end of the year, NOK 887 million of the compared to NOK 7 million in 2022. the year, a dividend of NOK 4.5 per share, or NOK 504 million revolving credit facility and the overdraft facility was available for Other operating expenses totaled NOK 85 million in 2023, down was recognized in the equity as at year-end 2022). At year-end, was NOK 2 144 million as at 31 December 2023 (excl. amortized NOK 115 million from NOK 200 million in 2022. Last year, in 2022, Grieg Seafood ASA had an equity ratio of 39%, in line with the loan costs). The company also has a green bond issue of NOK the Group recognized litigation and legal claims costs related to year before. At the end of the year, Grieg Seafood ASA was in 1 393 million (excl. amortized loan costs), which matures in June lawsuits in North America under other operating expenses. The compliance with its financial covenants. Grieg Seafood ASA’s 2025. in total, was distributed to shareholders (the dividend accrual utilization. The total amount outstanding on the syndicated debt reduction in other operating expenses in 2023 compared to 2022 financial covenant is tied to the equity ratio (excl. the effect is primarily due to the settlement paid in North America last year, of IFRS 16) in the Grieg Seafood Group, which was 53% as at 31 December 2023 compared to 52% at the end of 2022. CASH FLOW Grieg Seafood ASA’s net cash flow from operations in 2023 totaled NOK 218 million, compared to NOK -36 million in 2022. CASH FLOW The net cash flow from operating activities for 2023 totaled NOK -302 million (NOK 1 584 million). The reduction in net cash from operational activities is primarily due to a combination of lower harvest volume and thus lower revenue, higher cost level in the farming regions, and NOK 861 million in income taxes paid in 2023 compared to NOK 94 million in 2022. For 2023, the net cash flow from investing activities totaled NOK 256 million (NOK -1 651 million), of which investments in non- current tangible and intangible assets totaled NOK 792 million (NOK 564 million). In addition, investments of NOK 23 million (NOK 112 million) have been made in associated companies. At the end of 2022, the Group invested approximately NOK 1 000 million of cash surplus in money market funds - an investment that the Group has exited in full as at year-end 2023. The net cash flow from financing activities for 2023 was NOK -387 million (NOK -226 million). In 2023, a dividend of NOK 504 million (NOK 4.5 per share) was paid. In 2022, the Group repurchased bonds worth NOK 77 million during the year, of which NOK 50 million had been settled in cash by year-end 2022, with the remaining NOK 25 million paid in January 2023. Towards the end of the year, the Group made a drawdown on the revolving credit facility and overdraft facility totaling NOK 750 million and NOK 63 million, respectively. The net change in cash and cash equivalents for the 2023 was NOK -434 million (NOK -292 million), and as at 31 December 2023, the Group had a cash balance of NOK 216 million, down NOK 426 million from NOK 643 million as at 31 December 2022. GRIEG SEAFOOD ASA PROFIT FOR THE YEAR The parent company’s financial statements have been prepared in accordance with Norwegian accounting principles (NGAAP). Grieg Seafood ASA is the holding company of the farming and sales operations in the Grieg Seafood Group. In addition, the company is the employer of Group management as well as centralized functions of the Group. Total operating income for the year ended at NOK 258 million in 2023, down NOK 30 million compared to NOK 288 million in 2022. The company’s operating income was reduced in 2023 compared to 2022 primarily due to adjustments made on the management fee model. Salaries and personnel expenses totaled NOK 85 million in 2023, down NOK 33 million compared to NOK 118 million in 2022. The decrease in salary costs are primarily due to the 2022-cost included NOK 30 million related to the synthetic option scheme, compared to NOK 2 million in 2023. PART 03 - OUR FINANCIAL RESULTS for which a portion of the settlement relates to Grieg Seafood ASA. See the Group Accounts Note 10 for more information. The parent company recorded an operating profit of NOK 85 million in 2023, compared to a loss of NOK 37 million in 2022. Net financial items ended at NOK 126 million in 2023, down NOK 927 million from NOK 1 053 million in 2022. The lower net financial items is due primarily to Grieg Seafood ASA being a receiver of group contributions from subsidiaries in 2022 of approx NOK 1 000 million, compared to being a provider of Group contribution in 2023 (which increase cost price of investment in subsidiary and are thus not recognized in the income statement). Interest expenses from external financing decreased in 2023. This is primarily due to the general increase in market rates, which increase our borrowing costs through the floating rate component of the term-loans’ and bond loan’s interest rate. Profit before tax for Grieg Seafood ASA totaled NOK 211 million in 2023, down NOK 805 million from NOK 1 016 million in 2022. The tax expense in 2023 ended at NOK 52 million, compared to NOK 222 million in 2022, bringing net profit for the year to NOK 159 million, down NOK 635 million from NOK 794 million in 2022. BALANCE SHEET Total assets amounted to NOK 7 584 million at the end of 2023, up NOK 405 million from NOK 7 178 million the year before. The change in the book value of assets is primarily due to changes in current assets and working capital items, including receivables from subsidiaries. As Grieg Seafood ASA is the owner of the cash pool arrangement, net cash flow from the subsidiaries part in the group account impacts Grieg Seafood ASA’s working capital through changes in cash and cash equivalents and short-term receivables/liabilities to subsidiaries. The book value of investments in subsidiaries came to NOK 2 023 million, which is up NOK 119 million compared to NOK 1 903 million in 2022. The increase is due to Grieg Seafood ASA being a provider of group contribution to subsidiaries in 2023. Long-term loans to subsidiaries amounted to NOK 810 million, up NOK 13 million from NOK 798 million due to changes in foreign exchange rates, as the principal (in CAD) is unchanged. In 2022, a cash surplus was of approximately NOK 1 000 million was invested in money market funds - an investment which the company has exited in full as at 31 December 2023. The company has a syndicated sustainability-linked loan with The difference in net cash flow from operations between 2023 secured lenders totaling NOK 3 200 million, which compromises and 2022 is primarily due to differences in net working capital a NOK 750 million term loan, an EUR 75 million term loan, a items. Additionally, there was a higher income tax paid in 2023 compared to the year before. FIGURE 3.17 GROSS INVESTMENTS, HARVEST VOLUME TONNES GWT AND GROSS INVESTMENTS/KG Gross investments Harvest volume GWT I I N O L L M K O N 1 200 800 400 0 1 0 0 0 T O N N E S 100 90 80 70 2019 2020 2021 2022 2023 Gross investments Harvest volume GWT / g k K O N 15 10 5 2019 2020 2021 2022 2023 The cash payment of NOK 620 million made on the acquisition of Grieg Newfoundland is not included in the 2020 figure presented in the chart above. The increased level in 2020 (gross investments of NOK 13.8/kg) is largely attributable to capital investments in the freshwater facility in Newfoundland. The freshwater facility in Newfoundland was completed in 2021. 69 Cash flow from investing activities came to NOK -812 million (NOK -575 million in 2022). The difference from 2022 to 2023 is primarily due to a cash surplus of approximately NOK 1 000 million being invested in money market funds in 2022, and the very same investment been exited in full as per 31 December 2023. Additionally, loans to subsidiaries have increased substantially during the year. Net cash flow from financing activities came to NOK 97 million, compared to NOK 343 million in 2022. The change in net cash flow from financing activities from 2022 to 2023 is primarily due to a higher dividend of NOK 4.5 per share being distributed during the year compared to NOK 3.0 per share in 2022. Additionally, debt service costs is increased during the year, primarily due to generally higher market rates which increase the floating rate component of the interest rate in our term-loan facilities and bond loan. As at 31 December 2023, available cash totaled NOK 27 million, compared to NOK 525 million as at 31 December 2022. FINANCIAL RESULTS AND ALLOCATIONS – GRIEG SEAFOOD ASA Our ambition is to create shareholder value and deliver competitive returns relative to comparable investment RISK AND RISK MANAGEMENT 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 substantially enacted resource rent tax on salmon farming in Norway is deemed a high political risk for our operations. 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 these risks, in the short and medium term, is included below. The members of the Board of Directors and the CEO are covered by Directors and Officers (D&O) insurance. The insurance provides liability cover for members of the Board of Directors and the CEO with respect to claims arising from decisions or actions they may take on behalf of Grieg Seafood ASA. OPERATIONAL RISK The greatest operational risk relates to biological developments alternatives. The Group’s dividend policy is that the dividend within the Group’s smolt and marine aquaculture operations. should, over time, average 30-40% of the Group's net profit after The book value of live fish at year-end was NOK 5 066 million, tax before fair value adjustment of biological assets (limited to of which the fair value adjustment was NOK 1 330 million. The 50% by Green Bond agreement). At the same time, the Group’s book value of live fish exclusive fair value at year-end 2023 net interest-bearing debt per kg harvested salmon should was NOK 3 736 million, or 27% of the balance sheet. Biological remain below NOK 40, although this may be exceeded in periods risks include oxygen depletion, diseases, viruses, bacteria, of growth investments. In 2023, the General Meeting of Grieg parasites, algae blooms, jelly fish and other contaminants. To Seafood ASA approved a dividend distribution of 4.5 (NOK 3.0 per reduce this risk, the Group focuses on improving fish health share), which was according to the Board of Directors proposal and welfare through several initiatives, including joint fallowing as communicated in the Annual Report of 2022. Based on the and area-based management, switching from pharmaceutical 2023 financials, the Board of Directors proposes a dividend of to mechanical delousing treatment methods, and use of sensor NOK 1.75 per share (equivalent to NOK 196 million) be distributed technology to reduce algae challenges. The Group’s post-smolt to shareholders in 2024. The proposed dividend is subject to strategy, where fish are grown to a larger size on land, thereby approval by the Annual General Meeting of Grieg Seafood ASA in shortening the time they spend in open sea pens, is an important 2024. element of the effort to reduce biological risk. The parent company, Grieg Seafood ASA, recorded a profit after The freshwater production has been good across all regions tax of NOK 159 million for 2023, which the Board proposes that during the year, except from BC, which has experienced reduced the Annual General Meeting allocate as follows: survival due to technical issues and lower quality roe, resulting FIGURE 3.18 ALLOCATION OF PROFIT/LOSS FOR THE YEAR, GRIEG SEAFOOD ASA NOK million Provision for dividends Transfer from retained equity Total allocated 196.2 -37.1 159.1 in lower stocking to sea and growth. We have added additional expertise at the hatchery to address the production issues. Seawater production was impacted by biological challenges in the beginning of the year. In Rogaland, advanced harvesting was performed to reduce biological risk related to Infectious Salmon Anemia (ISA) in addition to winter ulcers. During the second half of the year, there were some challenges related to gill disease. However, despite this, the underlying production has been good during the year in Rogaland. To reduce the risk related to ISA, Rogaland has initiated a vaccination program of all smolt going to sea, which is expected to reduce the impact from ISA going forward. Finnmark has had a challenging year, with the parasite Spironucleus Salmonicida (Spiro), leading to advanced harvest and culling of fish with sickness signs, in addition to winter ulcers and impact from string jellyfish towards the end of the year. To compensate for lost biomass growth, the region transferred more smolt to sea. Additionally, water treatment equipment have been installed and disinfection measures have been implemented to reduce future risk of Spiro entering the freshwater facility. There have been no new incidents of Spiro in the freshwater facility during the year. Seawater production in BC has been affected by high sea lice pressure and low oxygen events. However, due to successful efforts in treatments, aeration and barrier systems, the region has been able to maintain the sea lice level stable and to reduce the impact from low oxygen events. MARKET RISK The global volume of Atlantic salmon harvested in 2024 is expected to increase by only 2% compared to 2023. With expectations of limited supply growth in 2024, combined with an outlook for continuing strong demand fueled by an increased focus on healthy food and sustainably produced proteins, the Group currently believes in sustained strong market in 2024. The current Fishpool forward price for 2024 is around NOK 100 per kg, reflecting an optimistic market outlook. The Group targets a contract share of 20-50% for its Norwegian harvested volume. The estimated contract share for 2024 is 6%. The Group does not have contracts in Canada. The Group’s has its own internal sales and market organization, including a value-added department. The Group has secured value-added processing capacity in both Norway and Canada to reduce the risk of low price achievement on production grade fish. Processing capacity will be further strengthened in 2025, when a new 10 000-12 000 tonnes capacity secondary processing facility at Oslo airport Gardermoen is expected to open. Newfoundland has had a good and stable production throughout the year, and has not experienced any sea lice or other biological issues thus far. Continental Europe is the Group’s most important market, with North America as the second largest market. The Group does not sell salmon to Russia due to the ongoing war against Ukraine. The feed industry is characterized by large global suppliers operating under cost plus contracts, and feed prices are accordingly linked to the global markets for fishmeal, vegetable meal, animal proteins and fish/vegetable/animal oils, which are the main ingredients in fish feed. Access to terrestrial feed ingredients is stable, while access to marine feed ingredients continues to be limited. The Group expects, on an aggregate level, high but relatively stable prices in 2024. COMPLIANCE RISK Grieg Seafood is committed to conducting its business ethically and with integrity. The Group performs risk assessments on its operations and value chain, and has implemented mitigating measures and controls to prevent corruption and money laundering activities. The Group did not experience any incidents of corruption or money laundering activities in 2023. The Group adheres to all relevant sanctions related to Russia and Belarus. The risk of cyberattacks is relevant for the Group. Cyberattacks may cause disruption to the ordinary course of operations, both within the Group and at third parties, as well as damage and/ or incapacitate critical infrastructure necessary to operate the Group’s freshwater and seawater sites. The outcome of a cyberattack may adversely impact fish welfare at affected sites, the Group’s reputation and financial performance. Grieg Seafood are continuously working to strengthen its defense towards cyberattacks and other malicious attempt to disrupt our infrastructure. Cybersecurity is high on management’s agenda, and is addressed through securing the digital systems and infrastructure (incl. monitoring and analysis of all network traffic in our infrastructure), as well as awareness and training, strengthening the focus on securing remote access for employees and vendors. Furthermore, the Group has procedures in place for incident handling and strategic crisis management should a cyber incident occur. In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the market for spot sales of fresh, whole and gutted Norwegian farmed Atlantic salmon. On 25 January 2024, Grieg Seafood received a Statement of Objections from the European Commission related to its investigation. The issuance of a Statement of Objections is a common and formal step in the process, where the European Commission sets out its preliminary view in the matter. The Statement of Objections in no way prejudices the final outcome of the European Commission's proceedings. Subsequent to the Statement of Objections, the companies concerned may examine the documents in the Commission's investigation file and present its views on the case, before the Commission takes a decision on the matter. Grieg Seafood is currently examining the Statement of Objections carefully and continues to fully cooperate with the European Commission's investigation. PART 03 - OUR FINANCIAL RESULTS 70 Furthermore, three class-actions were filed in Canada (none has been certified as a class-action). Even though Grieg Seafood POLITICAL RISK considers the complaints to be entirely without merit, Grieg Seafood have agreed to a settlement offer from the plaintiffs and entered into a respective settlement agreement dated 22 September 2023 as the costs of litigation in Canada can be substantial. The settlement agreement was approved by the Federal Court on 9 February 2024. A claim has been filed for damages in the UK against, among others, Grieg Seafood ASA and Grieg Seafood UK Limited arising from alleged unlawful cartel arrangements in relation to the supply of farmed Atlantic salmon. Grieg Seafood rejects that there is any basis for the alleged claim and considers the complaint to be entirely unsubstantiated. In general, Grieg Seafood denies any anti-competitive conduct whether it is in regard to the EC investigation, the claim filed in the UK or any possible future claims related to this matter subsequent to the issuance of the SO. Grieg Seafood will continue to collaborate with the European Commission and follow up all processes as it deems appropriate. See more information in Note 10 and Note 32 of the Group Accounts. NORWAY The Norwegian Parliament passed the a resource tax scheme on aquaculture in Norway 31 May 2023, with a tax rate of 25%, effective from 1 January 2023. The tax applies to commercial marine-phase salmon aquaculture activity in Norway and the resource rent tax is an additional taxation on aquaculture, as the operations are subject to corporate taxation of 22%, bringing the total marginal tax rate to 47%. The uncertainties related to the structure and impact of the resource rent tax has delayed the Group's investment and growth plans. Grieg Seafood farms Atlantic salmon in both Norway and Canada, and the Norwegian resource rent tax will not affect the tax load of the Group’s operations in British Columbia and Newfoundland, as they are subject to Canadian tax legislation. Overall, salmon farming in Norway may lose competitiveness compared to aquaculture in other countries. With new technologies being developed, where there is no reliance on a coastline with naturally tempered water, aquaculture investors may find it more attractive to invest and develop the industry in places with lower tax levels. See further information provided in Note 12 of the Group Accounts. CANADA In British Columbia (BC), licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, with different length. By 2025, the Canadian Federal Government aims to have created a responsible plan to transition into better and more sustainable practices in British Columbia, in order to reduce interactions with wild salmon. In 2022, the Canadian Department of Fisheries and Oceans renewed all farming licenses for two years to allow for the development of the plan. Grieg Seafood expects that the licenses will be renewed in 2024 and that they are incorporated into the transition plan. Grieg Seafood supports the transition and continues to work collaboratively with their First Nation partners, government and local communities on innovation and modernization towards a sensible transition plan. In addition, farm tenures in BC are renewed by the province on a regular basis. From 2022, farm tenures that are not accepted by the First Nation that is the rights-holder of the territory where the farm is located will not be renewed. All of Grieg Seafood's current production is operating under agreements with First Nations. Grieg Seafood supports the implementation of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into BC regulations, and we are engaging in the ongoing process of reconciliation between the government, First Nations and industries. See Note 13 of the Group Accounts for more information. FINANCIAL RISK FINANCING RISK The Group operates within an industry characterized by high LIQUIDITY RISK The Group has invested substantial amounts during the last few years. This includes the acquisition of Grieg Newfoundland and the build-up of biological assets in all regions. The Group utilizes volatility, which entails financial risk. The Group’s business and factoring agreements to finance its trade receivables in Norway. plans are capital intensive. To the extent that sufficient cash The trade financier purchases credit-insured trade receivables is not generated from operations in the long term, additional (maximum NOK 500 million of outstanding receivables) from the funding needs to be raised to pursue the Group’s growth Norwegian sales organization, transferring significant (95%) risk strategy and finance capital expenditures. Adequate sources of and control to the credit insurer. The receivables purchased by capital funding might not be available when needed or may only the trade financier are derecognized from the Group’s statement be available on unfavorable terms. Financial and contractual of financial position. hedging is a matter of constant consideration, in combination with operational measures. Management draws up rolling Monitoring of the Group’s liquidity reserve is carried out at group liquidity forecasts, extending over five years. These forecasts are level in collaboration with the operating companies. Management based on conservative assumptions for salmon prices and form and the Board seek to maintain a high equity ratio (49% at the basis for calculating liquidity requirements. This forecast 31 December 2023), to be well positioned to meet financial and also forms the basis for the Group’s financing needs. Available operational challenges. financing will be impacted by the Norwegian resource rent tax regime, as - all else equal - less cash will be available to service debt, finance investments and provide a return on investment for CURRENCY RISK The Group is primarily impacted by currency exposure to CAD, shareholders. USD and EUR. Part of the long-term intercompany loans to subsidiaries in the Group are in the local currency and are The Group's debt structure comprises sustainability-linked loans, regarded as net investments, as there are no set plans for including a NOK 750 million term loan, an EUR 75 million term their repayment. The currency effect of these net investments loan, a NOK 1 500 million revolving credit facility and a NOK 200 is included in the Group's consolidated statement of other million overdraft facility. See Note 27 of the Group Accounts for comprehensive income (OCI). In addition, the sales organization more information. In addition, the Group has a senior unsecured hedges foreign currency risk expose if required. The Group may green bond issue with an outstanding amount of NOK 1 393 not be successful in hedging against currency fluctuations, and million, which matures in June 2025. significant fluctuations may have a material adverse effect on the Group's financial results and business. As at 31 December 2023, the Group had NOK 4 879 million in net interest-bearing liabilities (NOK 3 873 million, excluding the effect of IFRS 16), and an equity ratio of 49% compared to 50% as INTEREST RATE RISK The Group is exposed to interest rate risk through its borrowing at 31 December 2022. The equity ratio according to the financial activities, and to fluctuating interest rate levels in connection covenants was 53% compared to 52% as at 31 December 2022. with the financing of its activities in the various regions. The See Note 27 of the Group Accounts for more information. Group's existing loans are at floating interest rates, but separate Cash and cash equivalents at 31 December 2023 totaled NOK fixed-rate contracts have been entered into to reduce interest 216 million (NOK 643 million). The Group had a good financial rate risk. Grieg Seafood’s policy is to have 20–50% of interest- foundation at year-end 2023. 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. 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 sold only to customers with satisfactory creditworthiness. The Group normally sells to new customers solely against presentation of a letter of credit or against advance payment, and credit insurance is used when deemed necessary. PART 03 - OUR FINANCIAL RESULTS 71 topics are covered by group policies. Find an overview of the United Nations Declaration on the Rights of Indigenous Peoples pillars, targets and policies here. The five pillars are aligned with (UNDRIP), and takes particular care to avoid infringing them. CLIMATE AND NATURE RISK The effects of climate change, such as extreme weather events, fluctuating seawater temperatures and a decline in biodiversity, could 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 as a separate risk category, are an essential part of Grieg Seafood’s risk management strategy. Grieg Seafood aims to increase its understanding of climate and nature-related risks, in order to find solutions to reduce adverse impacts. The Group has mapped its climate-related risks, which is reported in accordance with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). The Group has also prepared a climate-related scenario analysis, assessing the impact of transitional risks and physical risks. These risks and opportunities are included in the risk assessment as part of the Group’s regular forecast process. Overall, the impacts of climate-related risks are expected to be moderate in the short term, with no quantifiable impact as per year-end 2023. However, these impacts could become more severe in the medium to long term. Any significant physical change is likely to interfere with the Group’s current business model or damage facility infrastructure, both of which could be costly. Similarly, the transitional risks related to increased climate-change regulation or significant changes in consumer preferences could affect the Group’s bottom line and access to capital. On the other hand, Grieg Seafood is being uniquely placed to mitigate these risks and take advantage of climate-related opportunities. The Group’s Climate Action Plan describes the measures and investments needed to reach the climate targets (reducing carbon emissions by 35% towards 2030, and 100% in 2050, with 2018 as a baseline year). This plan stresses the importance of both operational measures that affect Scope 1 and 2, and supply chain measures in Scope 3. The Group needs to reduce operational fossil fuel consumption, purchase renewable electricity and set supplier requirements to be able to reduce its absolute emissions. The Group needs to continue to invest in electrification of its sites and boats, choose fish feed that has a lower emission factor and reduce emissions from transportation. The largest direct source of emissions is from the fuel that powers the boats, use of well-boats, vehicles, and on-site electricity generators. Transitioning to equipment that will enable reduction in fossil fuel consumption will be done gradually through replacement investments, in addition to investments targeting growth. Before making any investments, the Group evaluates the potential carbon emissions and environmental impact of the investment. This is an integrated part of the Group’s CapEx process. To get a full overview over how these climate-related risks and opportunities may evolve and affect the Group, likelihood and impact analyses under different emission pathways and time horizons have been developed and will be regularly revised. The Group’s TCFD report, including the climate-related scenario analysis, is available here. PART 03 - OUR FINANCIAL RESULTS The Group also acknowledges that biodiversity, diversity within and between species, and diversity 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 the Group’s operations, supply chains and markets. Grieg Seafood is a Member of the Taskforce on Nature-related Financial Disclosures (TNFD). TNFD has published a risk management and financial disclosure framework on nature- topics assessed as material according to the GRI standards. The GRI Index is included in Part 4 of this Annual Report. The Group has also prepared an overview of the material topics’ financial impacts in Part 1 of this report. The Group has a responsibility to protect biodiversity wherever it operates. The aim is to use farming methods that allow co- related risks, and will support organizations to report and act on existence with other species, such as wild salmon, cod, shrimp, both their impacts and dependencies on nature. Grieg Seafood is wild mammals and birds. The Group has targets to minimize its committed to start publishing nature-related disclosures using impact on biodiversity, and has adopted policies and operational the TNFD Recommendations as of the financial year 2024. For procedures, as well as high technical standards on equipment, further information, visit the TNFD’s website. The salmon farming industry is regulated to avoid impact on biodiversity and the marine environment. In addition, certifications like the Aquaculture Stewardship Council (ASC) help raise the bar above regulatory limits. As of year-end, 81% of the Group’s harvested volume in 2023 was ASC certified. to reduce the risk of impact. Environmental impact assessments are performed prior to establishing new seawater sites as well as a part of the continuing ASC certification process. Please refer to the regional sections in Part 2 of this report for information relating to use of treatments and medicines, escape, wildlife interaction and local emissions. Grieg Seafood acknowledges that there are still challenges to Along with the rest of the industry, the Group needs to develop overcome and believes that preventive farming is key to reducing new feed ingredients in order to grow sustainably. The Group the Group’s impact on both the climate and nature. Several of the Group’s ongoing initiatives target climate and nature- related challenges, such as shortening the time the fish spend at sea and are exposed to risks; using real-time ocean data, data analytics, machine learning and artificial intelligence to does not produce its own fish feed, but set requirements for the feed suppliers to develop more sustainable feed. Input factors in fish feed, both marine ingredients and plant-based ingredients, should come from sustainable sources. Ingredients associated with a high risk (fish meal and fish oil from fisheries, Brazilian better predict outcomes and implement mitigating actions early; soy and palm oil) are certified by recognized certification and experimenting with new farming technologies that create barriers between the fish and the natural environment, such as semi-closed sea-based systems, land-based farming and offshore farming. CORPORATE SOCIAL RESPONSIBILITY Grieg Seafood’s vision “Rooted in nature – farming the ocean for a better future” demonstrates the Group’s commitment to corporate responsibility by operating profitably and sustainably in a manner that conforms with fundamental ethical norms and respect for the individual, society and the environment. Sustainable operations underpin the Group’s license to operate and its strategy. In a long-term perspective, there is no contradiction between clean seas, healthy fish and financial profit. It is the Group’s task to make these aspects go hand in hand and contribute to a sustainable ocean economy. The targets go beyond short-term profitability. Read more about the Group’s foundation, value chain and strategy in Part 1 of this Annual Report. Grieg Seafood’s sustainability strategy is built on material topics and the five pillars: Healthy Ocean, Sustainable Food, Profit & Innovation, People, and Local Communities. These pillars are founded on external expectations, based on dialogues with stakeholders, and the company’s own goals and ambitions. The schemes. The Group has also committed to a deforestation statement. Read more about the Group’s work on sustainable feed ingredients in Part 2 of this report. While farmed salmon has a low carbon footprint compared to other animal proteins, the industry must do more to contribute to the Paris Agreement’s climate goals. New technologies must be developed to cut emissions in our own operations and value chain. The Group has a policy for climate action, and has set a Science Based Target for emission reduction. The Group undertakes climate accounting and performs a systematic assessment of its emissions, for Scope 1, 2 and 3. For more information on the Group’s climate action plan and emission reductions, see the climate action section in Part 2 of this report. The Group is grateful to the local communities for giving permission to farm salmon in their fjords and inlets. In return, the Group not only does what it can to safeguard local biodiversity and apply sustainable farming methods, but also aims to contribute to vibrant local communities in the rural areas in which it operates. See the end of each regional section for information on our contribution to local communities. Grieg Seafood has a responsibility to engage in constructive dialogue with all stakeholders and groups that are impacted by its activities. In British Columbia, Grieg Seafood is farming in areas that belong to indigenous peoples, while Finnmark has long been home to the Sami people. Grieg Seafood recognizes that these groups have special rights, as acknowledged in the RESEARCH AND DEVELOPMENT AS PART OF ACHIEVING SUSTAINABLE GROWTH The main objective of Grieg Seafood’s R&D activities is to create value, ensure sustainability and promote innovation in the Group. The activities and priorities are anchored in the Group’s strategy. A continuous process of identifying the most important issues to be addressed forms the basis for R&D activities. The project portfolio covers most areas of Grieg Seafood’s value chain. The majority of projects are related to fish health and welfare, environmental documentation and impact, nutrition and feeding, as well as novel and improved production methods both in the freshwater and the seawater phases of production. An internal R&D strategy provides guidance in the process of project prioritization and qualification to secure each project's relevance and industry value. Projects are aligned with the needs of the farming regions in order to ensure the relevance and potential applicability of the planned endeavors. Meeting with the farming regions are regularly carried out to discuss R&D needs. Short descriptions of the ongoing projects are available in an internal project archive, and finalized projects and results are shared throughout the Group and with external participants, if applicable. The global functional team for R&D works continuously with the farming regions to facilitate the operational implementation of the R&D results. EMPLOYEES AND HUMAN RIGHTS As an industry with global supply chains both upstream and downstream, Grieg Seafood has a responsibility to respect and promote human rights both at its own operations and in its value chains. The Group has a Human Rights policy and Code of Conduct in place, and adheres to various related global principles and practices. The Group also requires its suppliers to abide by its Supplier Code of Conduct. In accordance with the Norwegian Transparency Act, the Group published its first human rights progress report in June 2023. The report provides an account of the due diligence conducted, findings and actions. To reach goals and solve challenges, Grieg Seafood needs the best people, regardless of their gender, age, ethnicity, origin, or political, religious, or sexual persuasion. The Group embraces diversity and is committed to being an equal opportunity employer. This is reflected in the Group’s Gender Equity policy and the Diversity policy. At year-end 2023, the majority of the Group’s employees, including managers, are men. The Group aims to have 40% female representation in management positions and in positions such as supervisors, site managers and other administrative positions, by 2026. At year-end 2023, the Group had 33% female representation in the Group executive team, while 50% of the regional farming directors were female. In total, 837 people were employed at the Group as at 31 December 2023, of whom 235 (28%) were women and 602 (72%) were men. The Group conducts annual assessments of its pay structure to 72 CORPORATE GOVERNANCE Strong corporate governance is essential to achieving the Group’s objectives and acting as a responsible organization. EU TAXONOMY As a non-financial company Grieg Seafood reports on revenue (turnover), capital expenditure and operating expenses that are The Group’s governance system includes its vision, core values, associated with EU Taxonomy-aligned and -eligible activities, in strategies, objectives, operational performance, impact on the economy, environment and people, and related risk, as well as accordance with the Taxonomy Regulation (EU) 2020/852 and the Delegated Acts. The company’s statement on EU Taxonomy for compliance with laws and regulations. Grieg Seafood ASA seeks sustainable economic activities are disclosed in part two of this to comply, where applicable, with the Norwegian Code of Practice report. identify any pay gaps between men and women performing jobs of equal value. Non-administrative positions are covered by labor 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 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, cultural background or place of origin. The Group offers flexible working hours to office staff and seeks to ensure a good work-life balance throughout its operations. The goal is to attract the best skills, improve workplace diversity and to be the preferred employer, regardless of industry. A good working environment creates attractive jobs, and the Group has established and lives by the values: Open, Ambitious and Caring. For the sixth time in Norway, and the fifth time globally, the Group participated in the Great Place to Work survey. The Board is proud to announce that all regions maintained the Great Place to Work certification in 2023. The Group also works systematically to safeguard its employees’ health, safety and working environment. The aim is to prevent work-related injuries, illness, accidents and fatalities. The Group expects nothing less from its supply chain. Human resources are managed locally in compliance with local rules and regulations, 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. Read more about how the Group is committed to safeguarding its employees and the results of this work in the People section of this report. 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-purchase program. Through this program, participants receive a 30% discount on the purchase price of shares. The maximum number of shares per employee in 2023 was 759. There is a lock-up period of 18 months for the shares. Primary insiders employed by Grieg Seafood ASA are also eligible under the share program. for Corporate Governance issued by the Norwegian Corporate Governance Board (NUES). The 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 2021. The company’s corporate governance policies and practices are disclosed in the Corporate Governance section of this report. Business integrity is essential for the Group, which has zero tolerance for fraud, corruption or other misconduct. In 2023, there were no reported incidents of corruption. There was one reported whistleblowing case, from one employee claiming unlawful terminations and work-related concerns. The claim was closed after an external investigation. The Group investigates misconduct and whistleblowing situations with third-party assistance to ensure justice and objectivity.. The whistleblower channel, operated by EY, is available for the employees and external stakeholders to report any unwanted behavior and breaches of the Group’s Code of Conduct. The Group has established grievance mechanisms for external parties and local communities, available through the Group’s regional websites. No incidents involving infringement of the rights of indigenous peoples were reported in 2023. The company’s reporting on corporate social responsibility is based on several standards, such as the Euronext guidance on ESG reporting, the OECD Guidelines for Multinational Enterprises and the Global Reporting Initiative (GRI). Grieg Seafood is also committed to the UN Global Compact, and has signed the Sustainable Ocean Principles. Corporate social responsibility reporting is integrated in this Annual Report. The Board has assessed the Group’s achievements in relation to the above-mentioned topics as part of the sustainability scoreboard, see “Targets and achievements” at the beginning of the Board of Director’s report. Overall, the Board is satisfied with the Group’s achievements and efforts in relation to corporate social responsibility and the management of the Group’s impact on the economy, environment and people in 2023. The Group will continue working to reduce or minimize its impact on the needs stable regulatory conditions to be able to grow in a sustainable manner going forward. In Norway, the resource rent tax that was adopted by the Norwegian Parliament on 31 May 2023, with a tax rate of 25% effective from 1 January 2023, has generated a lot of uncertainty. Overall, salmon farming in Norway may lose competitiveness compared to aquaculture in other countries. With new technologies being developed, where there is no reliance on a coastline with naturally tempered water, aquaculture investors may find it more attractive to invest and develop the industry in places with lower tax levels. This might have a tremendous impact on local communities on the coast where salmon farming takes place, and also throughout the supply chain. For the past 25 years, literally all new fish volumes have come from aquaculture. Wild fishing has long had to cope with smaller catches, quotas and other regulatory restrictions. Since 1990, the volume of farmed fish has multiplied more than six-fold, with salmon making up less than 2.5% of the volume. In line with the ongoing global megatrends relating to health and sustainability, there has been growing interest in the health and potential environmental benefits of sustainable aquaculture. Currently, Europe is the largest and most mature market for Atlantic salmon, consuming more per capita than other continents. There are, however, countless ongoing initiatives to introduce salmon to a larger number of new consumers across the globe. An increase in consumption per capita in large markets and growing economies such as the USA, Brazil, China and India is expected to contribute to rising demand for Atlantic salmon over time. According to Kontali, the global harvest of Atlantic salmon in 2024 is expected to increase by 2% compared to 2023, and come to 2 857 600 tonnes (whole fish equivalent, WFE). With limited supply growth in 2024, combined with an outlook for continuing strong demand fueled by an increased focus on healthy food and sustainably produced proteins, the Group currently (at the time of publishing this report) believe in sustained strong market prices in 2024. The Board acknowledges that there is a natural and inherent uncertainty related to estimated future market demand, trends, growth, and outlook in general. However, looking into 2024, we remain cautiously optimistic, recognizing both the opportunities and challenges that lie ahead. EVENTS AFTER THE REPORTING DATE On 25 January 2024, Grieg Seafood received a Statement of Objections (SO) from the European Commission related to its investigation of potential anti-competitive behavior regarding the sale of farmed Norwegian Atlantic salmon which was launched back in 2019. The issuance of a SO is a common and formal step in the process without prejudice of the final outcome, where the European Commission sets out its preliminary view in the matter. On 9 February 2024, the Federal Court in Canada approved the settlement agreement dated 22 September 2023 entered into by the plaintiffs and Grieg Seafood regarding the proposed three class-actions in Canada. On 13 and 14 February 2024, Grieg Seafood ASA and Grieg Seafood UK Limited have received a service letter according to which certain claimants filed a claim for damages against, among other, Grieg Seafood ASA and Grieg Seafood UK Limited arising from alleged unlawful cartel arrangements in relation to the supply of farmed Atlantic salmon. In general, Grieg Seafood denies any anti-competitive conduct whether it is in regard to the EC investigation, the claim filed in the UK or any possible future claims related to this matter subsequent to the issuance of the SO. We will continue to collaborate with the European Commission and follow up all processes as it deems appropriate. OUTLOOK environment, to have a positive social impact and maintain strong health and environmental considerations. improved in to the first quarter of the year. The Group’s farming The Group has guidelines for management remuneration, available here and the Remuneration Report for 2023 is available here. corporate governance. The Board wishes to thank all employees for their dedication, efforts and contributions in 2023. There is a consensus in the market that the existing coastal, open-pen aquaculture industry will achieve modest organic growth. This will primarily be driven by the opening of new sites and areas for sea farms, new and improved technologies and farming practices, and better cooperation both between industry players and with the public authorities. The industry operations are running as normal, and salmon is being harvested according to plan. The emphasis is on continued optimization of production, focusing on fish health and welfare. During 2023, an improvement program was launched to review all aspects of the Group’s operations. In addition to improving operational efficiency and profitability, the Board also expects PART 03 - OUR FINANCIAL RESULTS 73 MARKET EXPECTATIONS, CHALLENGES AND POSSIBILITIES The outlook for the salmon farming sector remains promising. OWN OPERATIONS In 2024, Grieg Seafood expects to harvest a total of 81 000 tonnes GWT. At the time of issuing this report, biological production was Demand for high-quality, sustainably sourced protein continues good in all regions. Grieg Seafood Finnmark had some issues to grow worldwide, driven by increasing consumer awareness of with string jellyfish at the start of 2024, however the situation that the program will contribute to cost-reductions of NOK 150 operations in British Columbia, with significant sales and market million over the next two years. experience. With proximity to important markets on the US East Coast, the Newfoundland region significantly strengthens The Board has, at the start of 2024, approved the investment in a the Group’s US market exposure and opens for synergies with new 10 000-12 000 tonnes capacity secondary processing facility existing operations, as the Group should be able to provide a at Oslo airport. This will improve the utilization of production in more stable supply to the US market. However, developing the Norway and reduce risk related to lower superior share, while Canadian operations require substantial investments at a time also provide increased flexibility and efficiency in the farming when the resource tax in Norway and global inflation requires operations. The facility is expected to be up and running in 2025. greater capital discipline. The Group is committed to take the Based on the results achieved so far with post-smolt in Rogaland, term partners to take part in the development of the Canadian the Board has chosen to prioritize a post-smolt expansion in operations. A process to identify potential partners has been Finnmark of NOK 1.1 billion as the major investment the next initiated. next step of the growth journey in Canada and are inviting long- years. Post-smolt is expected to drive biological control, earnings and sustainability. The construction of a new post-smolt unit in Grieg Seafood Finnmark commenced at the end of 2023. The company is targeting a capacity increase of 3 000 tonnes of post- smolt from 2026. The Board still believes that the Canadian operations have untapped growth potential, while also having the advantage of being close to one of the largest and fast-growing markets for Atlantic salmon. North America is one of the world’s fastest growing market for Atlantic salmon, but only one sixths of the demand is currently met by North American production. The Group already has a position in this market through its FINANCIAL POSITION As at 31 December 2023, Grieg Seafood was in a good financial position, with NOK 216 million in cash and cash equivalents and NOK 887 million of undrawn credit facilities as at 31 December 2023. GOING CONCERN 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. STATEMENT FROM THE BOARD OF DIRECTORS AND THE CEO We hereby confirm that, to the best of our knowledge, the financial statements for the period from 1 January to 31 December 2023 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, 21 March 2024 The Board of Directors and CEO of Grieg Seafood ASA PER GRIEG Chair TORE HOLAND Vice Chair KATRINE TROVIK Board Member RAGNHILD JANBU FRESVIK Board Member MARIANNE RIBE Board Member NICOLAI HAFELD GRIEG ANDREAS KVAME Board Member CEO PART 03 - OUR FINANCIAL RESULTS 74 CORPORATE GOVERNANCE Grieg Seafood believes that strong corporate governance is an essential element in achieving our overall objectives and acting as a responsible organization. Our vision “Rooted in nature – farming the ocean for a better future” demonstrates our commitment to corporate responsibility by operating profitably and sustainably in a manner that conforms with fundamental ethical norms and respect for the individual, society and the environment. PART 03 - OUR FINANCIAL RESULTS COMPONENTS OF CORPORATE GOVERNANCE A sound corporate structure, with viable decision-making processes, a clear division of responsibility and authority, appropriate information and communication processes as well as remuneration and reward schemes, is key to Grieg Seafood being able to achieve its strategic goals and objectives. The main components of the Group’s corporate governance consist of objectives and directions, structure, organizational planning and management as well as learning and improvement. Together with the external context, these components underpin our ability to create value and achieve goals. Our operations are clearly connected with a multitude of external expectations. We, therefore, seek to maintain a regular dialogue with our stakeholders, as they are the basis for our social license to operate. Transparency and disclosure are vital in building trust, and engaging in a dialogue with our stakeholders enables us to better understand the role we play in local communities and in the society as a whole. GOVERNANCE STRUCTURE The shareholders are the owners of the company, and the General Meeting, which all shareholders are invited to attend, is the supreme governing body of the company. The General Meeting provides instructions to the Nomination Committee, which safeguards shareholders’ interests by nominating Board members to be elected by the General Meeting. The Board of Directors is setting the strategy and overseeing the conduct and management of Grieg Seafood. The Board’s responsibilities to ensure good corporate governance include setting and approving the vision, core values, strategies, objectives, plans, budgets and overall organization of the operations, monitoring operational performance and due diligence, as well as the company’s impact on the economy, environment, people, and related risks, as well as ensuring compliance with laws and regulations. The Board nominates its members to specific committees (Audit Committee and Remuneration Committee) to provide counsel and advice or to handle tasks on the Board's agenda. The Audit Committee members have a particular responsibility for overseeing the integrated reporting process, the audit process, the company's system of risk management, internal controls and compliance with laws and regulations. The role of the Remuneration Committee is to establish and maintain an appropriate rewards policy that attracts and motivates executives to achieve the short and long-term interests of shareholders. The Board has delegated the management of the Group’s overall operations and resources to the CEO. The CEO’s responsibilities include establishing a vision, core values, strategies, objectives, plans and budgets for the Group. The CEO is also responsible for establishing and approving group policies, and is accountable for the Group’s operational performance and its impacts on the economy, environment and people. In addition, the CEO is responsible for managing related risks and ensuring compliance with laws and regulations. The CEO acts as the main point of communication between the Board and the Group’s operations, and is the public face of the Group, responsible for stakeholder engagement. The CEO is also responsible for establishing rules for handling possible conflicts of interest. The CEO delegates authority and responsibility to the group executive management team, from where responsibilities cascade throughout the Group. The executive management team, which consists of senior executives representing all aspects of the Group’s operations, is responsible for establishing operational plans and targets, allocating resources to its members’ specific functions and following-up their operational performance. In 2023, the executive team consisted of the Chief Financial Officer (CFO), two Chief Operational Officers (COO, responsible for farming operations in Norway and Canada), the Chief Commercial Officer (CCO, responsible for the sales function), in addition to the supporting functions lead by Chief Technology Officer (CTO), the Chief Human Resource Officer (CHRO), the Chief Communication Officer, and the Chief Strategy Officer. The executive management team is responsible for implementing group policies, monitoring their functions’ impacts on the economy, environment and people, managing related risks and securing compliance with laws and regulations. This also includes adhering to our Code of Conduct and ensuring that responsible business conduct underpins all activities. The executive management team is responsible for ensuring that employees receive the proper training of policy commitments. The CEO and the group executive management team together engage with the Group’s stakeholders, which is key to be able to grasp emerging opportunities for the Group, and at the same time to understand and mitigate economic, environmental and social risks. Results of stakeholder engagement is reported to the Board as part of risk management procedures and regular business updates in Board meetings. See examples of stakeholder engagements in Part 4 of this report. The CEO has delegated the establishment of group policies to the Sustainability Steering Committee, which prepares and updates them on the basis of a holistic assessment of economic and environmental, social and governance (ESG) issues (the materiality assessment). Relevant organizational functions and expertise take part in preparing the policies. The policies are approved by the CEO while the Board of Directors monitors compliance with the policies. Policies are presented to the group management team and the regional management team, and are available to all employees through the internal Governance, Risk and Control system. We have a special focus on our Code of Conduct, where the employees are required to complete a program every second year. In 2023, 87% of our employees completed the Code of Conduct program. Our policies are available to the public through our website. The group policies contain a set of targets and Key Performance Indicators (KPIs), of which most are included in the sustainability scoreboard in the company’s quarterly and annual reports as part of the material topic they relate to. As such, the Board, and in particular the Audit Committee, reviews and approves the Group’s performance with respect to material topics, including the management of its 75 impact on the economy, environment and people. Combined with International/OECD, aquaculture is not assessed as an industry Furthermore, three class-actions were filed in Canada (none the quarterly risk assessment and the review of the quarterly and of high risk for corruption. Our risk assessments in 2023, which has been certified as a class-action). Even though Grieg Seafood annual report, the Audit Committee and the Board are advancing included all of our sales and farming operations, did not uncover considers the complaints to be entirely without merit, Grieg their knowledge on sustainable development. Additionally, any significant risks that required specific mitigation actions. Seafood have agreed to a settlement offer from the plaintiffs and the Audit Committee has been presented a detailed ESG None of the countries in which we operate were considered entered into a respective settlement agreement in September stakeholders analysis in 2023. high-risk countries according to the Transparency International 2023 as the costs of litigation in Canada can be substantial. The Corruption Perception Index. We did not experience any incidents settlement agreement was approved by the Federal Court in RESPONSIBLE BUSINESS CONDUCT Our values and Code of Conduct underpin the way we conduct of corruption or money laundering activities in 2023. We had no February 2024. corruption incidents that resulted in the termination or non- ourselves and our approach to responsible business behavior. renewal of contracts with a business partner. We will continue to A claim has been filed for damages in the UK against, among Our Code of Conduct sets out the ethical principles and standards perform these risk assessments. that must be upheld by each and every employee, and any agent that acts on our behalf, including our Board of Directors. Our policies stipulate our mechanisms for grievance and Through our Supplier Code of Conduct, we demonstrate that remediation of negative impacts, as well as for seeking advice others, Grieg Seafood ASA and Grieg Seafood UK Limited arising from alleged unlawful cartel arrangements in relation to the supply of farmed Atlantic salmon. Grieg Seafood rejects that there is any basis for the alleged claim and considers the complaint to we expect no less from our supply chain. A large share of our and raising concerns. We aim to have an open and transparent be entirely unsubstantiated. suppliers, in purchase value, have signed the Supplier Code of dialogue with all our stakeholders, and regularly meet with Conduct. Additionally, our Procurement policy provides global stakeholders as well as invite them to our sites. Our employees In general, Grieg Seafood denies any anti-competitive conduct standards for how we source goods and services. Through our can raise any concerns about our business conduct, business Human Rights policy, we recognize that we can contribute to the relationships, or potential and actual negative impacts whether it is in regard to the EC investigation, the claim filed in the UK or any possible future claims related to this matter fulfillment of human rights. We have a responsibility to prevent, through our whistleblower channel. All reported incidents are subsequent to the issuance of the SO. Grieg Seafood will continue mitigate, and address adverse human rights impacts in our own investigated and reported to the CEO and Board of Directors. to collaborate with the European Commission and follow up all operations, but we also use our leverage to promote respect for Employees can also raise concerns through their line manager processes as it deems appropriate. COMPLIANCE We aim to comply with all relevant laws and regulations in the regions in which we operate. Salmon farming is a highly regulated industry, and we are subject to strict standards for fish welfare, environmental impact, food production and production equipment. We must comply with operational requirements related to the use of medicines and chemicals, biomass levels, sea lice levels, stock density, water quality, etc. We report regularly to public authorities on, for instance, biomass levels, sea lice levels and disease outbreaks. We are also subject to regular inspections and audits by local, national and international stakeholder groups and authorities. human rights in our value chain. Our approach to responsible or HR functions, through their labor unions or relevant human business conduct including human rights is based on the OECD rights tribunals. Complaints by local communities or other Guidelines for Multinational Enterprises, the OECD Due Diligence stakeholders can be raised through meetings, through the Guidance for Responsible Business Conduct, the UN Convention regional websites or through the whistleblower channel. In 2023, against Corruption, the UN Guiding Principles on Business and we had one whistleblower case, where one of our employees Human Rights, the Universal Declaration of Human Rights, the claimed unlawful terminations and work-related concerns. The ILO Declaration on Fundamental Principles and Rights at Work, claim was closed after an external investigation. Our organization the United Nations Convention on the Rights of the Child, the UN investigates misconduct and whistleblowing situations with Convention on the Elimination of Discrimination against Women, third-party assistance to ensure justice and objectivity. We have the UN Declaration on the Rights of Indigenous Peoples, and the not received any concerns from external stakeholders, and UN Global Compact. as such have not provided any related remediation. While our policies set out our commitments related to the environment and Our policies set out guidelines and precautionary principles to social impacts, we recognize that we can improve our grievance enable adoption of precautionary measures. We are committed mechanisms and remediation processes. 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 fulfillment of human rights INVESTIGATIONS In February 2019, the European Commission launched an and always seek to avoid involvement, even indirectly, in their investigation to explore potential anti-competitive behavior in abuse. Please find the details of our commitment in the Human the market for spot sales of fresh, whole and gutted Norwegian Rights policy on our website. We also aim to conduct proper due farmed Atlantic salmon. In January 2024, Grieg Seafood received diligence when engaging with third parties. In June 2023, we a Statement of Objections from the European Commission published our first human rights due diligence report, covering related to its investigation. The issuance of a Statement of both our own operations and our supply chain, in line with the Objections is a common and formal step in the process, where Norwegian Transparency Act. the European Commission sets out its preliminary view in the matter. The Statement of Objections in no way prejudices the Our policies state that we do not permit or tolerate engagement final outcome of the European Commission’s proceedings. in any form of corruption or money laundering activities. We Subsequent to the Statement of Objections, the companies also refrain 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. As part of our risk management process, we assess our operations for risks related to corruption and implement mitigating measures or controls to prevent corruption and money laundering activities. According to Transparency concerned may examine the documents in the Commission’s investigation file and present its views on the case, before the Commission takes a decision on the matter. Grieg Seafood is currently examining the Statement of Objections carefully and continues to fully cooperate with the European Commission’s investigation. FIGURE 3.19 NON-COMPLIANCE WITH LAWS AND REGULATIONS Area of non-compliance Description Environmental Leak of chlorine Social Economic n/a n/a Fines (NOK) 1 400 000 0 0 Number of non-monetary sanctions Dispute resolution mechanisms 0 0 0 None None None In 2023, we received a fine related to a chlorine spill at our harvesting facility in Alta that occured in 2021. An independent environmental assessment of the chlorine spill was performed by a third party, which concluded that the spill had a limited local impact and that rapid recovery and recolonization of the seabed could be expected. We have not received any other fines related to non-compliance, nor were any non-monetary sanctions imposed on us. Additionally, we did not have any significant instances of non-compliance (where significant is determined to be any instance, except charges related to delayed reporting to authorities). PART 03 - OUR FINANCIAL RESULTS 76 CORPORATE GOVERNANCE PRINCIPLES Adopted by the Company’s Board of Directors on 20 April 2007, and updated on 21 March 2024. FIGURE 3.20 GRIEG SEAFOOD'S COMPLIANCE WITH THE NORWEGIAN CODE OF PRACTICE FOR CORPORATE 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 Negotiability 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 One deviation, see below No deviation No deviation No deviation No deviation No deviation No deviation No deviation No deviation 1. IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE PRESENTATION OF CORPORATE GOVERNANCE Responsibility for ensuring that the company has good corporate governance rests with the Board of Directors (the Board). The Board reviews the updates Grieg Seafood Group’s corporate governance policy, which is part of the Group’s governing framework and forms the basis of this summary. Grieg Seafood’s principles for corporate governance are based on standards such as the Norwegian Code of Practice for Corporate Governance as recommended by the Norwegian Corporate Governance Board (NUES), the Institute of Internal Auditors Norway’s guidelines for governance, in addition to best practices from, for example, the Euronext guidance on ESG reporting, the OECD Guidelines for Multinational Enterprises and the Global Reporting Initiative (GRI). The company abides by the latest Norwegian Code of Practice for Corporate Governance as recommended by the Norwegian Corporate Governance Board (NUES), published 14 of October 2021. 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 of Practice. Deviations from the Norwegian Code of Practice: None PART 03 - OUR FINANCIAL RESULTS 77 2. BUSINESS 3. EQUITY AND DIVIDENDS 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 EQUITY At any given time, the Group shall have a level of equity and a capital structure that is appropriate to the Group’s cyclical activities. The sale of seafood and in naturally related activities, including investment in companies engaged in the production and sale of seafood and in Board requires that, as a minimum, equity consistently complies with current loan covenants. other naturally related activities.” The company is established and registered in Norway, and is required to comply with Norwegian law, including laws and regulations equity ratio of 1.0. The Board of Directors considers the current capital structure to be satisfactory in relation to the company’s objectives, pertaining to companies and securities. strategy, and risk profile. As at 31 December 2023, the company's consolidated equity totaled NOK 6 669 million, equivalent to 49% of total assets and a debt-to- GRIEG SEAFOOD ASA’S VISION, TARGETS AND STRATEGY 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 DIVIDEND The Group’s objective is to give shareholders a competitive return on invested capital through dividend payments and appreciation in the respect for the individual, society as a whole and the environment. Through its five pillars, Grieg Seafood is committed to creating value of the share, at a level at least equivalent to other companies with comparable risk. sustainable and long-term value. Sustainability is fundamental to the industry and strongly impacts our financial performance. Our strategy comprises three key strategic objectives for continued business development: global growth, cost improvement and value chain Any future dividend will depend on the Group’s earnings after taxes, financial situation and cash flow. The Board believes that the dividend repositioning. Increasingly sustainable farming practices underpin all areas of the strategy. 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 The Board is committed to sound corporate governance, and our governance structure helps enable the Board to fulfil its fiduciary duties meet its desire to minimize capital cost. and ensure our long-term success. The Board 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 The Board has adopted a dividend policy whereby the average dividend, over a period of several years, should correspond to 30-40% strategy work. This includes a review of risk areas and internal controls, as well as approving the strategy, objectives and risks relating to of profit after tax before fair value adjustment of biological assets (limited to 50% by Green Bond terms). Furthermore, although a net sustainable development. interest-bearing debt per harvested kg of up to NOK 40 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. 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. Therefore, to the extent possible, this statement of principle also applies to In 2023, the Group distributed a dividend of NOK 4.5 per share to shareholders, which corresponds to 48% of the net profit before fair all companies within the Group. The company has its own Code of Conduct, which all employees and contract workers must abide by. The value adjustment of biological assets for the 2022 fiscal year. company also has its own Supplier Code of Conduct, which all suppliers are expected 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 CEO, and is exercised in accordance with prevailing company legislation. Deviations from the Norwegian Code of Practice: None BOARD AUTHORIZATIONS The Board can ask the Annual General Meeting (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 the date from which the shares are to be traded ex-dividend. The Board has a general authorization to increase the company’s share capital through share subscriptions for a total amount not exceeding NOK 45 378 816, divided into 11 344 704 shares at the nominal value of NOK 4 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 may itself determine the amount of the share capital increase in each case. 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 45 378 816. The company shall pay not less than NOK 4 per share and not more than NOK 240 per share when acquiring treasury shares. No treasury shares were acquired in 2023. See Note 24 to the Group Accounts. All the authorizations remain in effect until the next AGM, but not later than 30 June 2024. 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 PART 03 - OUR FINANCIAL RESULTS 78 4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH RELATED PARTIES 6. GENERAL MEETINGS SHARE CLASS The company has one class of shares, and all shares carry the same rights. As at 31 December 2023, 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 2023, the company held 1 313 654 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, The shareholders are the owners of the company, and the General Meeting is the supreme governing body of the company. All shareholders are invited to attend the Annual General Meeting (AGM) and Extraordinary General Meeting (EGM), if any. 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 AGM shall be held each year before the end of June. The Board will assess the meeting form (physically and/or digital). The AGM shall consider and, if thought fit, adopt the annual financial statements, the integrated annual report and proposed dividend, and the annual report on remuneration of executive personnel. It shall also decide other matters which under current laws and regulations pertain to the AGM. Guidelines in accordance with the Norwegian Public Limited Liability Companies Act, Section 6-16a, and the regulations about guidelines and reporting for remuneration of executive personnel were adopted by the AGM in June 2021. Pursuant to Sections 6-16a and 6-16b of the Public Limited Liability Companies Act, the remuneration report shall be approved by the AGM. The shall be subject to valuation by an independent third party. If the consideration exceeds one-twentieth of the company’s share capital, remuneration guidelines shall be reviewed and approved every four years or earlier in the event of significant changes. transactions of this kind shall be approved by the General Meeting, in so far as this is required under Section 3-8 of the Norwegian Public Limited Companies Act. The company has adopted a policy for transactions with related parties/majority shareholders. There were no The Board may convene an Extraordinary General Meeting (EGM) at whatever time it deems necessary or when such a meeting is significant transactions with related parties in 2023. Day to day transactions with related parties have taken place under market conditions required under current laws or regulations. The company’s auditor and any shareholder or group of shareholders representing more in accordance with arm's length principle, and are described in Note 30 to the Group Accounts. than 5% of the company’s share capital may require the Board to convene an EGM. CAPITAL INCREASES Should shareholders’ preferential subscription right be waived, the Norwegian Code of Practice shall be observed. There were no capital increases in 2023. 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 each shareholder do not apply. Nevertheless, a shareholder may ask to be sent physical documents concerning matters to be considered at Deviations from the Norwegian Code of Practice: None the General Meeting. 5. SHARES AND NEGOTIABILITY Shareholders who wish to attend the General Meeting in person or by proxy, must notify the company at the latest two working days before the General Meeting. Shareholders can vote on each individual matter (subject to statutory disqualifications), including on each individual candidate nominated There are no limitations with regards to owning, or trading for the company’s share or voting right conferred by them. for election. Shareholders unable to attend may vote by proxy. An authorization form containing a vote option for each agenda item will be Deviations from the Norwegian Code of Practice: None enclosed with the notice of meeting. Shareholders may also authorize the Board’s chair or the CEO to vote on their behalf. The Nomination Committee proposes candidates for election to the Board by the AGM. 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 minutes of meetings are available here. The Board’s chair and the CEO will attend the General Meeting. The Board’s chair will normally chair the General Meeting. The Board will ensure that, if it so requests, the General Meeting is also able to appoint an independent chair. A member of the Nomination Committee will attend the General Meeting if they are likely to be needed or are available. 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. In 2023, Grieg Seafood Group held its AGM on 27 June as a virtual meeting. 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 is present. Other Board members and members of the Nomination Committee and Audit Committee attend as needed. PART 03 - OUR FINANCIAL RESULTS 79 7. NOMINATION COMMITTEE On 13 February 2009, the AGM approved a resolution to establish a Nomination Committee.. This is described in Article 9 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 of the shareholders by nominating Board members according to principles set out in the Norwegian Code of Practice for Corporate Governance. Instructions for the Nomination Committee were updated on 27 June 2023. The present Nomination Committee was elected at the AGM on 27 June 2023. Nomination Committee Elisabeth Grieg Marit Solberg Erlend Sødal Role Chair Member Member Considered independent Served since Term expires No Yes Yes 12.06.2018 02.06.2021 27.06.2023 AGM 2024 AGM 2024 AGM 2024 The members of the Nomination Committee are elected for a term of one year. At least 2/3 of the Nomination Committee’s members shall be independent of the Board. The CEO cannot be a member of the Nomination Committee. The Nomination Committee shall have meetings with the directors, CEO and relevant shareholders. None of the members of the Nomination Committee are company executives. The Nomination Committee must ensure that the composition of the Board can safeguard the interests and independence of the shareholder community and the company's need for expertise, capacity and diversity. Furthermore, the Nomination Committee should consult relevant stakeholders to assess the need for changes in the composition of the Board. 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, education and professional experience. Upon proposal for re-election, the recommendation should include additional information about how long the candidate has been a member of the Board, 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. Proposals should be submitted via email to the chair of the Nomination Committee, Elisabeth Grieg, at elisabeth.grieg@grieg.no. A proposal submitted to the Nomination Committee should include relevant information about the recommended candidates. Deviations from the Norwegian Code of Practice: GSF Group deviates from the Norwegian Code of Practice in one way. 8. BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE BOARD MEMBERS Pursuant to Article 6 of its Articles of Association, the company’s Board of Directors comprises three to seven members. The shareholder elected Board members are elected by the General Meeting. Board members are chosen based on their competence and experience representing the company’s need of expertise in various fields. The requirements for gender representation apply, i.e. if the Board has three of four members, no more than two Board members may belong to the same gender and if the Board has five or more members, no more than 60% of the Board members may belong to the same gender. The Board’s chair is either elected by Board members or directly by the AGM. The chair of the Board is not an executive in the company. In the event of a tied vote, the Board’s chair has the casting vote. The CEO is appointed by the Board and has both a right and a duty to attend Board meetings but is not a member of the Board. The CEO is not entitled to vote on Board decisions. ELECTION PERIOD All Board members are elected at the AGM, for a one-year term. Board members may be re-elected. INDEPENDENT BOARD MEMBERS As at 31 December 2023, the Board of Directors consisted of the following non-executive members (whereof 50% men and women): Name Per Grieg Tore Holand Marianne Ødegaard Ribe Katrine Trovik Nicolai Hafeld Grieg Ragnhild Janbu Fresvik *Indirectly via the Grieg Group. Male/ Female Role Considered independent Served since Term expires 2023 meeting attendance % of shares in GSF per 31.12.2023 M M F F M F Chair Vice chair No Yes 20.05.2009 AGM 2024 12.06.2018 AGM 2024 100% 100% Board member Yes 14.05.2020 AGM 2024 90% Board member Yes 14.05.2020 AGM 2024 Board member No 04.11.2021 AGM 2024 100% 100% Board member Yes, part of the year 09.06.2022 AGM 2024 80% 51.06% * 0.00% 0.00% 0.00% 50.17% * 0.0% Ragnhild Janbu Fresvik was considered dependent of Grieg Seafood ASA until 31 March 2023 as she was employed by Grieg Maturitas AS, the largest shareholder of Grieg Seafood ASA via Grieg Aqua AS, until this time. Per Grieg and Nicolai Hafeld Grieg represent the main shareholders in the Group, and as such are defined as not independent. The Board works on the basis that there may be cases where one or more of its members may be prejudiced. To prevent and mitigate any conflict of interests, any such issues are clarified before meetings are held. A Board member or members who are prejudiced refrain from participating in the relevant matter. Apart from 1. The Code of Practice recommends that all shareholders should be able to submit proposals to the Nomination Committee for candidates shareholder’s representation, no other stakeholders are represented in the Board. to the Board of Directors and other appointments in a simple and easy manner. Currently, shareholders must send an email to the chair of the Nomination Committee directly. The company will investigate how it can further facilitate the submission of new proposals so that all shareholders can easily propose candidates to the Board and Nomination Committee. Board members’ qualifications are wide-ranging, with the relevant competencies relevant to the impacts of the Grieg Seafood. Two of the members have extensive knowledge within salmon farming, having both served on boards and been employed in the industry for several years. Five of the members have a finance background, whereof three have experience from banking and financial institutions, and one from innovation and marketing. One Board member is currently engaged in the development of new business opportunities related to the energy transition within the maritime segment, where part of this knowledge can be applicable to Grieg Seafood’s business. The average age of the Board members is 57. Board members are not included in share option programs as Board members are only elected for one year at a time while the share option program runs over a longer period. The company’s website provide information on Board members’ backgrounds, expertise as well as quarterly updated Board members’ shareholdings in the company. No under-represented social groups are included in the Board or any of its committees. Deviations from the Norwegian Code of Practice: None. PART 03 - OUR FINANCIAL RESULTS 80 9. THE WORK OF THE BOARD OF DIRECTORS 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 has adopted supplementary rules of procedure covering the duties of the Board and the Group’s CEO, the division of labor between the Board and the CEO, the annual plan for the Board, notices of Board proceedings, administrative procedures, minutes, Board committees, handling of conflicts of interests, transactions between the company and shareholders, and confidentiality. The Board’s main task is to ensure a proper organization of the company’s business and thereby also safeguard the shareholders' interests. The Board has partly delegated the management and takes up a supervisory role for delegated tasks, overseeing the conduct and management of Grieg Seafood. The Board’s responsibilities to ensure good corporate governance include approving the vision, core values, strategies, objectives, plan and budgets. It also includes approving the overall organization of the operations, including an efficient and value-creating management structure. The Board also monitors the Group’s operational performance and financial position, and its impacts on the economy, environment and people, as well as related risks, and verifies compliance. The Board shall initiate any investigation it considers necessary to perform its duties, or 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 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, procedural matters relating to meetings of the Board, including attendance and schedule, separate entries in the board minutes, and duty of confidentiality. The Board and the CEO have separate roles, and there is a clear division of responsibility between the two. The Board of directors has delegated the management of the Group’s overall operation and resources to the CEO. The Board underlines that special care must be exercised in matters relating to financial reporting and the remuneration of the executive management team. The instructions for the Board and executive management were last revised by the Board on 20 September 2017. CONFLICT OF INTEREST Board members and the Group’s executive management team shall inform the Board if they have any significant interest in a transaction to which the company is a party. To prevent and mitigate any conflict of interests, any such issues are clarified before Board meetings are held. A Board member or members who are not independent must refrain from participating in the relevant matter. Any conflicts of interest must be registered by the administration and disclosed in the Annual Report. Please refer to Note 30 to the Group Accounts in the Annual Report 2023 for an overview of related parties transactions in 2023. The Group has adopted a policy that sets out Grieg Seafood’s principles for interaction with the Group’s majority shareholder, with the aim of ensuring equal treatment of all shareholders. 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. ANNUAL ASSESSMENT Each year, the Board shall carry out an assessment of its work, including its performance in overseeing the conduct and management of the company in the previous year. The assessment is based on the results of a questionnaire completed anonymously by each member of the Board and the executive management team. The latest assessment, completed in the autumn of 2023, did not uncover any need for changes to the composition of the Board or organizational practices. AUDIT COMMITTEE The Board has set up a sub-committee, Audit Committee, comprising a minimum of two and a maximum of three members with relevant financial and operational background and experience, elected from among the Board’s members, and has drawn up a mandate for its work. The mandate was last updated in 2023. The Audit Committee has a particular responsibility for overseeing the integrated financial and sustainability reporting process, the audit process, the company’s system of risk management, internal controls and compliance with laws and regulations. The Audit Committee reviews the Group’s quarterly and annual reports before they are put to the full Board for final approval. In 2023, the Audit Committee held seven meetings, in accordance with its annual plan. The Audit Committee also carries out an annual assessment of is work, including its performance in overseeing the conduct, impact and management of all risk areas, as well as its own composition. The Group’s external auditor participates in all Audit Committee meetings. As at 31 December 2023, the Audit Committee consisted of one woman and one man: Board’s Audit Committee Katrine Trovik Tore Holand Role Chair Member Considered independent Served since 2023 meting attendance Yes Yes 14.05.2020 13.06.2019 100% 88% 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 and shall be independent of the company's executive management. As at 31 December 2023, the Remuneration Committee consisted of one woman and one man: Board's Remuneration Committee Per Grieg Marianne Ødegaard Ribe Role Chair Member Considered independent No Yes Served since 13.06.2009 14.05.2020 The role of the Remuneration Committee is to have an appropriate reward policy that attracts and motivates executives to achieve the long-term interests of shareholders. The Remuneration Committee assists and facilitates the Board’s decision-making in matters related to the remuneration of the executive management team. It also reviews recruitment policies, career planning and management development plans, and prepares matters relating to other material employment issues with respect to executive management. The Remuneration Committee monitors that remuneration is in line with guidelines approved by the AGM, and prepares a remuneration report which must be audited by the company’s auditor. The AGM shall conduct a consulting vote over the remuneration report. The Remuneration Committee shall hold discussions with the CEO concerning his/her financial terms of employment. It shall further submit a recommendation to the Board concerning all matters relating to the CEO’s financial terms of employment. The Remuneration Committee is also the advisory body for the CEO in relation to remuneration schemes which cover all employees to a significant extent, including the Group’s bonus 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, but the Board retains responsibility for implementing such recommendations. The composition of the Remuneration Committee is assessed each year. Deviations from the Norwegian Code of Practice: None. RISK MANAGEMENT AND INTERNAL CONTROL Governance is intended to provide a means by which management and other employees can contribute to the achievement of the company’s objectives, plan for sound internal control and risk management, support efficient and effective operations with the required level of monitoring and reporting, as well as establish effective independent control and assurance. Risk management is part of governance and involves identifying the types of risk exposure the company faces, measuring these potential risks, proposing means to hedge, insure or mitigate the risks, and estimating the impact of various risks and opportunities on the future earnings. Internal control represents a subset of the broader risk management activities. Internal control comprises activities and procedures carried out to safeguard the Group’s resources and those of its customers, and to realize its goals through appropriate operations. The achievement of these goals 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 internal control system is designed to provide reasonable assurance that the Group’s goals will be achieved. Such goals include targeted, efficient, and appropriate operations, reliable internal and external reporting, as well as compliance with laws and regulations, including internal policies and principles. PART 03 - OUR FINANCIAL RESULTS 81 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 informs the Board after each meeting. Each year, the external auditor carries out a review of the Group’s performance of internal control relevant for financial reporting. The auditor’s review is submitted to the Audit Committee. Grieg Seafood has established risk management principles based on the COSO Enterprise Risk Management (COSO ERM) framework, which is the most widely used risk management framework. Based on this, a described and quantified risk appetite and risk tolerance level has been established. Risk management processes are established at all relevant levels of the Group, including strategic and operational levels. Day-to-day implementation of risk management and risk assessment are a line management responsibility, with ultimate responsibility lying with the Board and executive management. Risks are attributed to risk owners according to the functional matrix of the organization. Risk owners decide, manage and accept risk exposure and identify and ensure implementation of adequate controls to close any risk gaps. The company follows the “three lines model” to implement roles responsible for risk management, internal control and assurance activities. The Group categorizes its main risks as: strategic risk, operational risk, financial risk, compliance risk, political risk and climate and nature risk. Management conducts continuous assessments of acute risks and scenarios for possible outcomes. The Group’s greatest risk relates to biological development during the production of smolt in freshwater facilities and production in open net pens in seawater. The Group 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. The Group is exposed to the following 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 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 undertaken at group level and involves identifying, evaluating and hedging financial risk in close cooperation with the Group’s operational units. The Group has 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 financial risk 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, executive management reviews a set of Key Performance Indicators (KPIs) for the Group’s farming and sales and marketing operations. Example of KPIs include the number of smolt transferred to the sea, freshwater and seawater production, production cost, feed factor, harvested volume, farming cost and Operational EBIT/kg. Analyses are made and measured against budget figures and forecasts, aligned with the overall strategy of the Group. The performance data is summarized in a report submitted to the Board. Each quarter, the Group’s executive management holds meetings with the management of each region. The aim of such meetings 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. REMUNERATION OF THE BOARD OF DIRECTORS Proposals concerning the remuneration of the Board are submitted by the Nomination Committee. The guidelines approved by the AGM 12. REMUNERATION OF THE GROUP EXECUTIVE TEAM The objective of the guidelines approved by the AGM for salary and other remuneration payable to executive employees within the Group is both to attract people with the required competence and retain key personnel. The guidelines shall create a wage culture which promotes the company’s long-term interests, business strategy and financial strength. The guidelines should also motivate employees to work with a long-term perspective to achieve the company’s goals. The determination of salary and other remuneration payable to the Group’s executive management team is based on the following guidelines: • Ensuring that salaries and other remuneration are competitive and motivating for each executive. • Linking salaries and other remuneration to, among other things, the company’s value creation, the company’s stakeholders and shareholders. • Attracting, motivating and retaining an executive management team with qualifications that correspond to the company’s size and complexity. • Developing competence and creating continuity in management. • Ensuring transparency and publishing management’s remuneration in the company. The principles used to determine salary and other forms of remuneration shall be simple and understandable to employees, shareholders and the public at large. Salaries, other remuneration and important terms for the executive management team are evaluated by the CEO annually. Salary, other remuneration and key terms for the CEO are evaluated annually by the Remuneration Committee, which prepares a recommendation for the Board’s decision on remuneration to the CEO. The committee shall hold discussions with the CEO about financial terms annually and, at the latest, by the end of June each year. The Remuneration Committee presents its evaluation to the Board, which makes the final decision. The salary agreed to the members of the Group’s executive management team in 2023 consisted of a fixed and a variable element. A fixed basic salary is the main component of executive compensation and should be competitive, taking into consideration the industry and the individual’s qualifications, and ensuring effective operations to achieve the company’s strategic aims. The variable element depends on good financial results being achieved as well as company or personal goals and priorities, based on a pre-defined set of key performance indicators (KPIs). No variable element was paid to the Group's executive management in 2023 (cf. below incentive plan). General schemes for the allocation of variable benefits, including bonus schemes and option programs, are determined by the Board according to the guidelines approved of the AGM. 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. Each year, the Board must report to AGM that remuneration to executive personnel complies with the guidelines. 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 on remuneration comprising the synthetic options program. The guidelines and the remuneration report will be published on the company’s website. 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 2 June 2021. Members of executive management are included in the synthetic options program, see Note 8 to the Group Accounts in the Annual Report 2023. The option agreements have been entered into within the scope of the resolution adopted by the AGM. Minutes of this AGM can be accessed here. OPTION PROGRAM A synthetic option scheme has been established for group management including regional directors. The Board wishes group state that remuneration to members of the Board shall be a fixed remuneration and not performance-related. Remuneration shall reflect management to become shareholders through the option program. The Board believes this is a decisive tool for realizing its ambitions the position’s complexity, responsibility and time spent, with remuneration reflecting the levels at comparable companies. No Board member has any special duties in relation to the company over and above those they have as a member. No Board member participates in any incentive or share-purchase 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. PART 03 - OUR FINANCIAL RESULTS and building the company, by allowing group management to take part in the company’s dividends from growth and success. 82 INCENTIVE PLAN Grieg Seafood ASA has also established an incentive plan that applies to all employees. Its aim is to stimulate goal achievement, while SHAREHOLDER INFORMATION The Board shall ensure that information is provided on matters of importance for shareholders and for the stock market’s assessment promoting good risk management, preventing excessive risk taking and contributing to the avoidance of conflicts of interest. Annual of the company, its activities and results, and that such information is made publicly available without undue delay. Publication shall take goal achievement and pay-outs from the incentive plan are regulated by the Remuneration Committee. Taking into consideration the place in a reliable and comprehensive manner, and by means of information channels which ensure that everyone has equal access to the company’s financial position, risks and costs, as well as its capital requirements and liquidity, the committee will decide if the payment information. of variable compensation under the incentive plan is acceptable. If so, the committee will submit a recommendation to the Board, which makes the final decision. If the company cannot achieve the financial results associated with the incentive plan, no bonus pay-out will All information shall be provided in English. The company has procedures to ensure that this is done. The Board of Directors’ be awarded. The bonus is a function of the number of fixed monthly salaries (maximum six month) and the individual’s level within the communication with shareholders and other stakeholders is delegated to the Board’s chair, or other appointed persons in specific cases. organization. The Board’s chair shall ensure that the shareholders’ views are communicated to the entire Board. General schemes for the allocation of variable benefits, including bonus schemes and option programs, are determined by the Board Deviations from the Norwegian Code of Practice: None. according to the guidelines approved of the AGM. 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. Each year, the Board must report to AGM that remuneration to executive personnel complies with the guidelines. 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 on remuneration comprising the synthetic options program. The guidelines and the remuneration report will be published on the company’s website. SHARE PURCHASE PROGRAM The company’s share purchase program aims to stimulate co-ownership and a sense of common interest with the company. The Board can decide annually that all employees, including executive management, shall be offered shares at a discount. All permanent employees who have been employed for at least six months at Grieg Seafood ASA or a wholly owned subsidiary are included in this program. Minor changes in qualifications to this program may be approved by the Remuneration Committee and/or the CEO. SEVERANCE PAY The CEO and the CFO are entitled to 12 months’ severance pay after termination of the employment relationship by the company. The CEO is further entitled to full salary during sick leave lasting up to 12 months. Deviations from the Norwegian Code of Practice: None. 13. INFORMATION AND COMMUNICATION 14. TAKEOVERS CHANGE OF CONTROL AND TAKEOVERS The company has not established mechanisms which can prevent or avert takeover bids. Any such decision must be made by a General Meeting of shareholders and requires 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 members of the Board in its statements on the takeover bid. At its meeting on 13 October 2015, the Board adopted some core principles for how it will act in the event of any takeover bid. These core principles are in accordance with the Norwegian Code of Practice. Deviations from the Norwegian Code of Practice: None. 15. AUDITOR 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 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. Exchange (Euronext) Code of Practice for IR, published on 1 March 2021. The Board of Directors ensures that the auditor’s auditing plan is submitted to the Audit Committee once a year. In particular, the Audit The Group’s investor relations policy clarifies roles and responsibilities related to financial reporting, and regulates contact with shareholders and the investor market. This policy is based upon the key principles of transparency and equal treatment of market Both the company’s management and the auditor comply with guidelines issued by the Financial Supervisory Authority of Norway participants to ensure they receive accurate, clear, relevant, complete and balanced information about performance and outlook. The concerning the extent to which the auditor may provide advisory services. IR policy is available on the company’s website. 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 information. The Board shall The Board invites the auditor to the meeting which address the annual financial statements. The auditor attends all meetings with the ensure that the company’s quarterly reports give a correct and complete picture of the Group’s financial and operational position, and Audit Committee to consider quarterly reports and other relevant matters, and has at least one meeting a year to report on the Group’s whether the Group’s operational and strategic objectives are being met. In addition, the Board has adopted a separate policy on the accounting principles, risk areas and internal control procedures. Moreover, each year, the Board has a meeting with the auditor at which disclosure of inside information, which sets forth the company’s disclosure obligations and procedures. neither the CEO nor anyone else from company management is present. Committee considers whether the auditor is performing a satisfactory control function. The company shall be open and active with respect to investor relations, and shall hold regular presentations in connection with The auditor’s fee appears in the relevant note in the Annual Report, showing the breakdown of the fee between auditing and other the announcement of its interim results. The company publishes all information (including quarterly reports and annual reports in accordance with the company’s financial calendar) through stock exchange/press releases, all of which are also published on the company’s website. The presentation of each quarter’s results is available as webcast. services. Deviations from the Norwegian Code of Practice: None. Bergen, 21 March 2024 Grieg Seafood ASA PART 03 - OUR FINANCIAL RESULTS 83 GRIEG SEAFOOD GROUP ACCOUNTS GROUP ACCOUNTS 85 Income statement 85 86 87 87 Comprehensive income statement Statement of financial position Statement of changes in equity Cash flow statement NOTES 88 89 90 91 94 95 95 96 98 99 99 100 102 105 106 107 108 108 109 112 113 113 113 113 115 115 116 118 119 120 120 122 NOTE 1 General information NOTE 2 Accounting Policies NOTE 3 Nature and climate-related risk NOTE 4 Financial risk management NOTE 5 Segment information NOTE 6 Sales revenues NOTE 7 Salaries and personnel expenses NOTE 8 Share-based payments NOTE 9 Other operating expenses NOTE 10 Contingent liabilities, litigation and legal claims and decommissioning costs NOTE 11 Financial income and financial expenses NOTE 12 Income taxes NOTE 13 Intangible assets NOTE 14 Property, plant and equipment incl. right-of-use assets NOTE 15 Impairment of non-financial assets NOTE 16 Investment in associated companies and joint ventures NOTE 17 Other non-current receivables NOTE 18 Inventories NOTE 19 Biological assets NOTE 20 Trade receivables NOTE 21 Other current receivables NOTE 22 Investment in money-market funds NOTE 23 Cash and cash equivalents NOTE 24 Share capital and shareholder information NOTE 25 Contingent consideration, other equity and retained earnings NOTE 26 Earnings per share and dividend per share NOTE 27 Borrowings NOTE 28 Leases NOTE 29 Other current liabilities NOTE 30 Related parties NOTE 31 Financial instruments and fair value measurement NOTE 32 Events after the reporting date PART 03 - OUR FINANCIAL RESULTS 84 INCOME STATEMENT COMPREHENSIVE INCOME STATEMENT GRIEG SEAFOOD GROUP NOK 1 000 NOTE 2023 2022 GRIEG SEAFOOD GROUP NOK 1 000 NOTE 5/6 7 019 632 7 163 956 Net profit for the year 38 497 -6 959 -6 957 31 490 13 393 21 096 -2 747 944 -2 233 655 -725 653 -695 577 16 19 7/8 9/20/28 -2 236 165 -2 087 310 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 Tax effect Total other comprehensive income for the year, net of tax 25 25 2023 559 750 98 316 28 784 -6 332 120 767 2022 1 153 779 109 335 24 792 -5 454 128 673 Total comprehensive income for the year 680 517 1 282 452 ALLOCATED TO Controlling interests 680 517 1 282 452 Sales revenues Other income Other gains/losses Share of profit from associates Raw materials and consumables used Salaries and personnel expenses Other operating expenses Depreciation property, plant and equipment and right-of-use assets Amortization licenses and other intangible assets Write-down of tangible and intangible non-current asset 14/28 13 13/14/15 Production fee Fair value adjustment of biological assets Litigation and legal claims Decommissioning costs EBIT (Earnings before interest and taxes) Financial income Financial expenses Net financial items Profit before tax Income tax expense Net profit for the year ALLOCATED TO Owners of the parent company, Grieg Seafood ASA Earnings per share Earnings per share (NOK) Diluted earnings per share (NOK) 19 10 10 11 11 12 26 26 -532 911 -21 792 136 -34 987 217 922 20 427 -2 515 -434 641 -16 706 -140 074 -26 350 83 412 -157 065 -24 382 980 730 1 497 586 140 195 -276 768 -136 573 126 267 -176 210 -49 944 844 157 1 447 642 -284 407 559 750 -293 863 1 153 779 559 750 1 153 779 5.0 5.0 10.3 10.3 PART 03 - OUR FINANCIAL RESULTS 85 STATEMENT OF FINANCIAL POSITION GRIEG SEAFOOD GROUP NOK 1 000 NOTE 31.12.2023 31.12.2022 GRIEG SEAFOOD GROUP NOK 1 000 NOTE 31.12.2023 31.12.2022 ASSETS Goodwill Licenses Other intangible assets 13/15 13/15 13 727 111 691 094 1 489 798 1 463 710 EQUITY AND LIABILITIES Share capital Treasury shares 13 275 14 689 Contingent consideration Property, plant and equipment incl. right-of-use assets 14/15/28 5 095 401 4 035 590 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 Investments in money market funds Cash and cash equivalents Total current assets Total assets 16 17/31 18 19 4/20/31 21/31 4/31 22/31 40 000 209 667 42 337 40 000 216 624 17 935 7 617 589 6 479 642 230 053 240 172 5 065 718 4 045 800 327 160 171 249 35 164 259 137 157 060 37 988 — 1 012 848 4/23/31 216 318 642 719 6 045 663 6 395 723 13 663 252 12 875 365 Other equity Retained earnings Total equity Deferred tax liabilities Share-based payments Borrowings Lease liabilities Total non-current liabilities Share-based payments Current portion of borrowings Current portion of lease liabilities Trade payables Tax payable Public duties payable Derivatives and other financial instruments Other current liabilities Total current liabilities Total liabilities Total equity and liabilities BERGEN, 21 MARCH 2024 The Board of Directors and CEO of Grieg Seafood ASA 24 24 25 25 25 12 8/31 27/31 27/28/31 8/31 27/31 27/28/31 4/31 12 4/31 29/31 453 788 -5 255 701 535 317 947 5 201 155 6 669 170 842 612 8 178 3 491 980 1 111 049 5 453 819 833 208 335 299 626 760 753 6 156 27 266 1 709 235 584 453 788 -5 407 701 535 197 180 5 138 612 6 485 708 1 041 101 6 756 2 838 809 653 650 4 540 316 672 141 968 226 910 717 498 353 191 55 963 64 928 288 210 1 540 263 1 849 341 6 994 082 6 389 657 13 663 252 12 875 365 PART 03 - OUR FINANCIAL RESULTS 86 PER GRIEG Chair TORE HOLAND Vice Chair KATRINE TROVIK Board Member RAGNHILD JANBU FRESVIK Board Member MARIANNE RIBE Board Member NICOLAI HAFELD GRIEG ANDREAS KVAME Board Member CEO STATEMENT OF CHANGES IN EQUITY GRIEG SEAFOOD GROUP NOK 1 000 Equity at 01.01.2022 Profit for 2022 Other comprehensive income 2022 Total comprehensive income 2022 Sale of treasury shares to employees1 Purchase of treasury shares Dividend Transactions with owners [in their capacity as owners] 2022 Total change in equity 2022 Equity at 31.12.2022 Equity at 01.01.2023 Profit for 2023 Other comprehensive income 2023 Total comprehensive income 2023 Sale of treasury shares to employees1 Purchase of treasury shares Dividend Transactions with owners [in their capacity as owners] 2023 Total change in equity 2023 Equity at 31.12.2023 SHARE CAPITAL TREASURY SHARES1 CONTINGENT CONS.2 OTHER EQUITY2 RETAINED EQUITY2 TOTAL 453 788 -4 532 701 535 68 205 4 344 307 5 563 302 — — — — — — — — — — — 385 -1 260 — -875 -875 — — — — — — — — — 1 153 779 1 153 779 128 976 -303 128 673 128 976 1 153 476 1 282 452 — — — — 6 510 6 895 -28 739 -29 999 -336 942 -336 942 -359 171 -360 046 CASH FLOW STATEMENT GRIEG SEAFOOD GROUP NOK 1000 EBIT (Earnings before interest and taxes) Depreciation, amortization and write-down of non-current assets 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 128 976 794 305 922 406 Change in non-current, cash-settled share option liability 453 788 -5 407 701 535 197 180 5 138 612 6 485 708 Taxes paid 453 788 -5 407 701 535 197 180 5 138 612 6 485 708 — — — — — — — — — — — 433 -280 — 153 153 — — — — — — — — — 559 750 559 750 120 767 — 120 767 120 767 559 750 680 517 — — — — 6 632 280 7 065 — -504 120 -504 120 -497 208 -497 055 120 767 62 543 183 463 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 Government grant Investment in money market funds Investment in associates and other invest. incl. loan receivables Net cash flow from investing activities Proceeds of long-term int. bearing debt Proceeds of short-term int. bearing debt 453 788 -5 255 701 535 317 947 5 201 155 6 669 170 Repayment long-term int. bearing debt excl. lease liabilities 1 The recognized amount equals the nominal value of the parent company's holding of treasury shares. 2 See Note 25. Repayment lease liabilities Interests paid Repurchase of own shares 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 Cash and cash equivalents - 31.12. NOTE 13/14 16 19 8 12 14 13 14 22 16/17 27 27 27 27/28 11 25 25 23 2023 980 730 554 568 8 159 6 957 -217 922 -829 630 -82 213 43 256 93 357 1 422 -860 705 -302 021 2 408 -790 032 -1 592 25 847 2022 1 497 586 591 422 -5 535 -21 096 -83 412 -529 150 -117 071 194 302 155 412 -4 359 -93 865 1 584 234 17 112 -561 916 -2 581 9 119 1 041 914 -1 000 224 -22 821 255 724 754 379 63 113 -193 517 -279 830 -221 759 -5 540 -504 120 -387 274 -112 212 -1 650 702 1 463 423 — -962 146 -225 468 -140 002 -24 400 -336 942 -225 535 -433 571 -292 003 642 719 7 170 216 318 928 342 6 380 642 719 PART 03 - OUR FINANCIAL RESULTS 87 NOTE 1 GENERAL INFORMATION G R O U P L E G A L S T R U C T U R E AUTHORIZATION OF THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements of Grieg Seafood for the full year ended 31 December 2023 were approved for issuance by COMPANIES OF THE GROUP Grieg Seafood Group comprised the following entities at 31 December 2023: the Board of Directors on 21 March 2024 and subject to approval Grieg Seafood UK Ltd (owned 100% by Grieg Seafood Sales AS) is by the Annual General Meeting of Grieg Seafood ASA. domiciled in the UK. Grieg Seafood BC Ltd., and its 100% owned ORGANIZATION The Grieg Seafood Group (Grieg Seafood) consist of the parent subsidiary Grieg Seafood Sales North America Inc, are domiciled in British Columbia, Canada, while Grieg Seafood Newfoundland Ltd (incl. the subsidiaries Grieg Marine NL Ltd and Grieg NL company Grieg Seafood ASA and its subsidiaries. Grieg Seafood Nurseries Ltd) are domiciled in Newfoundland, Canada. Grieg ASA is incorporated and domiciled in Norway. Grieg Seafood Seafood Premium Brands Inc (domiciled in the USA) is owned ASA is a public limited company registered in Norway, and is 100% by Grieg Seafood Sales North America Inc. Grieg Seafood listed on the Oslo Stock Exchange in Norway. The address for its Sales USA Inc (domiciled in the USA) is owned 100% by Grieg registered office is C. Sundts Gate 17/19, 5008 Bergen, Norway. Seafood Sales AS. Grieg Seafood is an integrated Norwegian seafood company To be able to correctly calculate and report the resource rent tax engaged in farming of Atlantic salmon. The consolidated Grieg in Norway as from 2023, Grieg Seafood considered it necessary Seafood’s (“The Group”) integrated sales organization sell the in 2022 to reorganize the ownership of aquaculture licenses farmed salmon from our regions to the market, primarily as in Norway into separate legal entities owning the commercial fresh head-on gutted, but also processed through external and non-commercial aquaculture licenses. Therefore, Grieg processing partners. The Group has operations in Norway and Seafood Rogaland Sjø AS was established as a subsidiary (100%) Canada. of Grieg Seafood Rogaland AS, and Grieg Seafood Finnmark Sjø AS as a subsidiary (100%) of Grieg Seafood Finnmark AS. The GRIEG SEAFOOD ASA OWNER SHARE: 99% GRIEG SEAFOOD SALES AS GRIEG SEAFOOD UK LTD GRIEG SEAFOOD SALES USA INC. GRIEG SEAFOOD ROGALAND AS GRIEG SEAFOOD FINNMARK AS GRIEG SEAFOOD CANADA AS GRIEG SEAFOOD NEWFOUNDLAND AS GRIEG SEAFOOD ROGALAND SJØ AS GRIEG SEAFOOD FINNMARK SJØ AS GRIEG SEAFOOD BC LTD GRIEG SEAFOOD NEWFOUNDLAND LTD TYTLANDSVIK AQUA AS (33.33%) NORDNORSK SMOLT AS (50%) ÅRDAL AQUA AS (44.44%) NEXTSEAFOOD AS (50%) GRIEG SEAFOOD SALES NORTH AMERICA INC GRIEG SEAFOOD PREMIUM BRANDS INC. GRIEG MARINE NL LTD GRIEG NL NURSERIES LTD The ultimate parent company of Grieg Seafood ASA is Grieg commercial aquaculture licenses in Norway are owned by Grieg Maturitas AS, the parent company of Grieg Maturitas II AS, which Seafood Rogaland Sjø AS and Grieg Seafood Finnmark Sjø AS. S E G M E N T S T R U C T U R E in turn owns 100 % of Grieg Aqua AS, which owns 50.17% of Grieg These four entities are all domiciled in Norway. See Note 12 for Seafood ASA. more information concerning the internal reorganization of the Rogaland and Finnmark farming regions in 2022. The remaining subsidiaries are domiciled in Norway and owned by Grieg Seafood ASA. Grieg Seafood Canada AS (100%) and Grieg Seafood Newfoundland AS (99%) are holding companies within the Group, and wholly own the production companies Grieg Seafood BC Ltd. (incl. subsidiaries) and Grieg Seafood Newfoundland Ltd (incl. subsidiaries), respectively. Grieg Seafood Rogaland AS has investments in three associated companies; Tytlandsvik Aqua AS (33%), Årdal Aqua (44%) and Nextseafood AS (50%), while Grieg Seafood Finnmark has an investment (50%) in Nordnorsk Smolt AS. GRIEG SEAFOOD ASA NOR NOR CAN CAN ROGALAND FINNMARK BRITISH COLUMBIA NEWFOUNDLAND GRIEG SEAFOOD ROGALAND AS GRIEG SEAFOOD ROGALAND SJØ AS GRIEG SEAFOOD SALES AS GRIEG SEAFOOD SALES USA INC. GRIEG SEAFOOD FINNMARK AS GRIEG SEAFOOD FINNMARK SJØ AS GRIEG SEAFOOD SALES AS GRIEG SEAFOOD SALES USA INC. GRIEG SEAFOOD SALES NORTH AMERICA INC. GRIEG SEAFOOD SALES NORTH AMERICA INC. GRIEG SEAFOOD BC LTD GRIEG SEAFOOD NEWFOUNDLAND LTD GRIEG SEAFOOD SALES NORTH AMERICA INC GRIEG SEAFOOD SALES NORTH AMERICA INC PART 03 - OUR FINANCIAL RESULTS 88 NOTE 2 ACCOUNTING POLICIES NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS - NOT YET ADOPTED At the end of 2023, there are some amendments to, and interpretations of, existing IFRS standards that are not yet the change in the underlying estimate and include within the relevant financial statement line item relevant for the item that is estimated. The material accounting policies applied by Grieg Seafood when The material accounting policies described in these consolidated effective. The Group has not early adopted any amendments Non-monetary assets measured at historical cost in a foreign preparing the consolidated financial statement are set out below financial statements have been applied consistently to all periods or interpretations of such standards. The Group’s intention currency are translated using the currency exchange rate at the and in the following note disclosures. These note disclosures of presented, except as otherwise noted in in the disclosure related is to adopt the relevant new and amended standards and date of the transaction. the consolidated financial statement have been structured such to the impact of new standards, amendments and interpretations interpretations when they become effective, subject to EU that the material accounting policies relevant for the various note adopted by the Group. disclosures have been presented together, and not separated approval before the consolidated financial statements are issued. There are no amendments, or interpretations, of standards not CONSOLIDATED FINANCIAL STATEMENT The consolidated financial statements are presented in by a dedicated accounting policy note. For those material note All amounts in these consolidated financial statements are stated yet adopted that are expected to have a material impact on the Norwegian Kroner (NOK), which is the parent company’s disclosures then encompass accounting policies not specific for in NOK thousand unless otherwise specified. consolidated financial statements of Grieg Seafood. functional currency and the Group’s presentation currency. a financial statement line item or otherwise topic of disclosure, the relevant material accounting policies have been set forth in Certain amounts in the comparable years can be reclassified to this Note 2. STATEMENT OF COMPLIANCE The consolidated financial statements as per 31 December 2023 conform to current year presentation. If such reclassification is not clearly immaterial, the reclassification is disclosed in the relevant note disclosure for the financial statement line item. CONSOLIDATION PRINCIPLES The consolidated financial statements include all entities controlled by Grieg Seafood ASA. When preparing the consolidated financial statements, 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 Subsidiaries are all entities over which the Group exercises different from the presentation currency are translated into the for the period 1 January to 31 December have been prepared Operational expenses in the consolidated income statement are control. Control over an entity arises when the Group is exposed presentation currency as follows: in accordance with IFRS® Accounting Standards as adopted by presented based on nature of expense. to variability in the return from the entity and has the ability the EU and with IFRSs as issued by the International Accounting Standards Board (IASB), interpretations issued by IASB and the additional requirements of the Norwegian Accounting Act, effective on 31 December 2023. BASIS OF PREPARATION The consolidated financial statements have been prepared under the historical cost convention, modified for biological assets, equity instruments and financial assets/liabilities (including derivative instruments) at fair value through profit or loss. NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ADOPTED BY THE GROUP NEW AND AMENDED STANDARDS, AND INTERPRETATIONS - ADOPTED IN 2023 AMENDMENTS TO IAS 1 AND IFRS PRACTICE STATEMENT 2 - DISCLOSURE OF ACCOUNTING POLICIES The IASB amended IAS 1 to require entities to disclose their material rather than their significant accounting policies. The The preparation of financial statements in accordance with IFRS amendments requires the use of estimates. It also requires management to define what is “material accounting policy information” and exercise its judgement in the process of applying the company’s explain how to identify when accounting policy information to impact this return by virtue of its influence over the entity. • The statement of financial position is translated using the Subsidiaries are consolidated from the day control arises and closing rate at the end of the period. deconsolidated when control ceases. • Income and expense items are translated at average exchange rates for the period (if the average is not a The acquisition method of accounting is applied for acquisitions. reasonable estimate of the cumulative effects of using the There are no non-controlling interests recognized in the Group’s transaction rate, the transaction rate is used). equity. All the subsidiaries of Grieg Seafood ASA, except for • Translation differences are recognized in other Grieg Seafood Newfoundland AS, are wholly owned, see Note 1 comprehensive income and specified separately. in general and Note 25 for Grieg Seafood Newfoundland AS in specific. FOREIGN CURRENCY TRANSLATION INDIVIDUAL ENTITIES OF GRIEG SEAFOOD The financial statements of each of the Group’s entities are Grieg Seafood ASA has provided loans to subsidiaries of the Group with other functional currencies than the parent company, and for which settlement of the loan neither is planned nor likely to occur in the foreseeable future. In addition, certain parent companies of sub-consolidation levels of the Group has provided accounting policies. Estimates and underlying assumptions are is material. If it is disclosed, it should not obscure material generally measured using the currency of the economic area in similar loans to subsidiaries of its sub-group. Foreign currency continuously evaluated and are based on historical experience accounting information.The Group has adopted the amendment which the entity operates (“the functional currency”). exchange differences arising on such loans are recognized in the and other factors, including expectations of future events that in 2023 when preparing the note disclosure for the consolidated consolidated statement of other comprehensive income in the are believed to be probable under the present circumstances. financial statement of 2023. In preparing the financial statements of the individual entities in consolidated financial statements of the Group. The final outcomes may deviate from these estimates. Changes in accounting estimates are recognized in the period in which the estimates are changed. The main areas where Grieg Seafood has made significant OTHER STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS OF STANDARDS, EFFECTIVE AS OF 1 JANUARY 2023 The Group has not early adopted any standards, amendments judgements when applying the accounting policies and that or interpretations. Other amendments to standards, and the Grieg Seafood Group, transactions in currencies other than the functional currency are translated at the foreign currency exchange rate at the transaction date. CASH FLOW STATEMENT The Group’s cash flow statement shows the overall cash flow specified by operating, investing and financing activities using the Monetary assets and liabilities denominated in foreign currencies indirect method. The cash flow statement illustrates the effect are translated at the functional currency at the foreign currency of the various activities on cash and cash equivalents. Operating have the most material effect on the amounts as recognized interpretations of standards, effective as from 1 January 2023, exchange rate at the balance sheet date. Foreign currency activities are presented using the indirect method, where EBIT in the consolidated financial statements are listed below, with adopted by the Group in 2023, has not had any material impact on translation differences are recognized in the consolidated income (Earnings before interests and taxes) is adjusted for changes in reference to the relevant note disclosure. the consolidated financial statements of Grieg Seafood. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY Norwegian resource rent tax scheme (assumptions made concerning the basis for taxation) Classification of fish-farming licenses (indefinite or definite economic life) Impairment test of non-financial non-current assets Fair value measurement of biological assets NOTE 12 13 15 19 statement as foreign currency exchange gains or losses within biological assets at cost, other inventories, operating receivables the subtotal financial statement line item of “Net financial items”. and liabilities, the effect of non-cash items such as depreciation, However, there are two exceptions. Firstly, foreign currency amortization and fair value adjustment of biological assets, profit translation differences arising from sales revenue to external customers of the Group, which is included on the financial statement line item of “other gains and losses”, included in the subtotal of EBIT (Earnings before interests and taxes) in the consolidated income statement. Secondly, foreign currency translation differences arising from the translation of estimate- based provisions are generally recognized as part of and loss from investment in associates and joint ventures, and taxes paid. Increase/decrease in derivative financial instruments are included as part of the operational activities. See Note 27 for opening to closing balance reconciliation of the Group’s gross interest-bearing liabilities, specified by cash and non-cash items. PART 03 - OUR FINANCIAL RESULTS 89 NOTE 3 NATURE AND CLIMATE-RELATED RISKS IMPACT ON FINANCIAL REPORTING AND ESTIMATES AS AT 31 DECEMBER 2023 As at 31 December 2023, there has been no material impact CLIMATE-RELATED SCENARIO ANALYSIS The scenario analysis helps Grieg Seafood to understand the potential impact of climate change on the Group’s core business identified on financial reporting judgments and estimates. The in the future, and is used to stress-test the Group’s strategical Group recognizes the ever-changing risks related to climate and financial planning. Grieg Seafood has performed a thorough change and will regularly assess these risks against judgments assessment of the impact on the Group’s salmon production and estimates made in the preparation of the Group’s financial of 2C and 4C of global warming. Grieg Seafood aims to meet statements. the Paris Agreement criteria to keep global warming below 2C, compared to pre-industrial levels. The Group is currently MANAGING PHYSICAL RISKS AND OPPORTUNITIES Assessing the impact of increased seawater temperature The analysis shows that Grieg Seafood expects increased risks and costs related to global warming. 4C is a vastly greater threat than 2C. However, the risks associated with global warming indicate a shift towards the necessity of alternating sites, increasing post-smolt production on land and investing in heavy equipment at those sites which are exposed to harsh weather. This is in line with the Group’s current strategy, where large concrete production vessels, and overlay protected work boats have been introduced to our fleet recent years. Together The transitioning to equipment that enables the Group to reduce its fossil fuel consumption, in order to meet the our 2030 Climate Action Plan target, is an important part of reaching our carbon reduction target. The transitioning of operating equipment will be carried out gradually through replacement investments. Before making any investments, the Group evaluates their potential carbon emissions and environmental impact. This is an integrated part of Grieg Seafood’s CapEx process. As at 31 December 2023, the Group’s action plan for reducing increasing its production volume, and the assessments for 2030 with increased personnel training, education and specialization, carbon emissions (see below) has not had any material impact on and 2050 are based on our business strategy and the targeted investment in communication equipment and our focus on our accounting estimates for the useful life of property, plant and production volumes. equipment, or materially impacted the Group’s impairment test calculations. This is due to the gradual replacement of equipment which generally has a useful life shorter than the timeframes 2C of global warming In this scenario, Grieg Seafood assumes that the Paris improving our smolt facilities, we believe that Grieg Seafood is prepared to meet the challenges it will face in the future. The issue of sea lice and their implications for the Group’s future production is associated with high levels of uncertainty and for the Group’s climate action targets. Furthermore, our budget Agreement targets will be met. The Group assumes production varies between regions. The future effects of increased seawater (basis for the impairment tests) has factored in the quantifiable of target volumes until 2030. How the Group’s production will temperature on sea lice levels in the Group’s regions cannot be nature- and climate related risks. change towards 2050 is difficult to predict, but many initiatives predicted without performing a comprehensive analysis. This is a and forecasts look towards the ocean and aquaculture to provide topic Grieg Seafood will further pursue in the future. CLIMATE-RELATED RISK The effects of climate change, such as extreme weather more food for the future. With 2C of global warming, Grieg Seafood’s business is well positioned to seize opportunities for events, fluctuating temperatures in seawater and a decline sustainable growth. in biodiversity, could have a significant financial impact in the decades ahead. Knowledge of the possible financial Main impacts from the scenario: consequences of global warming, biodiversity loss, or even – Higher risk from transitional risks ecosystem collapse, and the integration of climate risk and – Carbon taxing Reducing carbon emission Last year, in 2022, Grieg Seafood developed a Climate Action Plan, which describes the measures and investments needed to reach the Group’s climate targets (reducing our carbon emissions by 35% towards 2030, and 100% in 2050, with 2018 as a baseline year). This plan stresses the importance of both nature risk as a separate risk category, are an essential part of – Initiatives to reduce deforestation increase cost of raw feed operational measures, which affect Scope 1 and 2, and supply Grieg Seafood’s risk management strategy. Grieg Seafood aim to materials increase its understanding of climate and nature-related risks, in – Increased cost of procured aquaculture equipment order to find solutions to reduce adverse impacts. – Policies and legislation that restrict production Grieg Seafood has mapped its climate-related risks, which the Group reports in accordance with the recommendations of the 4C of global warming In this scenario, Grieg Seafood sees the need to differentiate chain measures in Scope 3. Grieg Seafood needs to reduce its operations’ fossil fuel consumption, purchase renewable electricity and set supplier requirements to be able to reduce its absolute emissions. The Group needs to invest in the electrification of sites and boats, choose fish feed that has a lower emission factor and reduce emissions from transportation. Task Force on Climate-related Financial Disclosures (TCFD). our products to prove their value with respect to sustainability. Fish feed is our largest single source of GHG emissions (Scope Grieg Seafood has also prepared a climate-related scenario This comes with an increased cost and risk of lower earnings analysis, assessing the impact of transitional risks and physical potential. Meeting the Group’s Paris Agreement targets may 3). We are committed to continually challenging our fish feed suppliers on the carbon emission from their production of the risks. These risks and opportunities are included in the Group’s adversely impact Grieg Seafood’s margins compared to our fish feed. The Group’s largest direct source of emissions is from risk assessment as part of Grieg Seafood’s regular forecast competitors, and the Group must base its business viability on the fuel that powers our boats, including well-boats, vehicles, process. The results from the TCFD scenario analysis are specific customer groups. and on-site electricity generators. summarized below. Overall, Grieg Seafood expects the impacts of climate-related – Temperature increases and daily temperature variations the Group’s current efforts are focused on actionable measures risks to be moderate in the short term, with no quantifiable may increase events that are stressful for the salmon impact as per year-end 2023, but these impacts could become – More frequent extreme weather events increase the to meet the 2030 target. Actionable measures to meet the 2050 target will be set when we are closer to the calender year of more severe in the medium to long term. Any significant physical personnel risk (HSE) associated with operating exposed 2030. Main impacts from the scenario: As the Climate Action Plan is staged in 2030 and 2050 targets, change is likely to interfere with the Group’s current business model or damage the Group’s facility infrastructure, both of which could be costly. Similarly, the transitional risks related to increased climate-change regulation or significant changes in consumer preferences could affect the Group’s bottom line and access to capital. On the other hand, the Group sees Grieg Seafood as being uniquely placed to mitigate these risks and take advantage of climate-related opportunities. PART 03 - OUR FINANCIAL RESULTS sites – More droughts and floods reduce the production of land- based feed ingredients, which increases feed cost We are working closely with the salmon feed suppliers and focus on sustainable feed ingredients. In addition, the Group expects that new technology and transport of more processed products will enable us to reduce our carbon emissions from freight transport. 90 NOTE 4 FINANCIAL RISK MANAGEMENT CAPITAL MANAGEMENT The Group aims to ensure sufficient access to capital to enable FINANCIAL RISK FACTORS The Group is exposed to a number of financial risks: market the business to develop in accordance with adopted strategies, risk (including foreign exchange risk, interest rate risk and and thus continue to be one of the leading players in the salmon price risk), credit risk and liquidity risk. The Group’s overall risk farming industry. Historically, the industry has always been management program focuses on the volatility of the financial vulnerable to price fluctuations in the market. For this reason, markets and seeks to minimize potential adverse effects on accounting results may fluctuate considerably from year to year. the Group’s financial performance. The Group uses short-term Consequently, the Group strives to ensure that the business financial derivatives to reduce certain risks. Such contracts are maintains an appropriate level of liquidity. recognized at fair value through profit or loss and presented as The Group’s funding is primarily syndicated debt with banks December 2022), the Group does not apply hedge accounting. The in addition to a green bond loan. The level of liabilities and Group identifies, evaluates and hedges financial risks in close alternative forms of funding are subject to constant evaluation. cooperation with the Group’s operational units. The Board has financial income/financial expenses. As at 31 December 2023 (31 TRADE RECEIVABLES AND TRADE PAYABLES CURRENCY IN NOK 1 000 2023 Trade receivables Trade payables 2022 Trade receivables Trade payables NET INTEREST-BEARING LIABILITIES CURRENCY IN NOK 1 000 2023 Cash and cash equivalents Loans to associated companies NOK CAD EUR USD GBP OTHER TOTAL 77 744 79 815 544 185 195 287 214 681 1 911 556 910 143 587 15 276 16 603 23 901 12 590 154 221 3 390 17 207 1 044 — 751 1 517 174 104 535 327 160 760 753 -81 259 137 3 193 717 498 NOK CAD EUR USD GBP OTHER TOTAL 30 452 32 529 138 121 — 144 — 47 601 — — — — — 216 318 32 529 As at 31 December 2023, the Group had a good financial established written principles for the management of foreign Gross interest-bearing liabilities* 3 749 524 798 184 650 265 -52 476 -16 068 -1 698 5 127 730 foundation, with cash and cash equivalents of NOK 216 million exchange risk, interest rate risk and use of the Group’s financial and unutilized facilities of NOK 887 million. See Note 27 for more instruments. information. Grieg Seafood aims to provide shareholders with a competitive return on invested capital through payment of dividends and I) MARKET RISKS (I) FOREIGN EXCHANGE RISK The Group operates internationally and is exposed to foreign share price increases. The Board of Directors maintains that, as exchange risk relating to various currencies, primarily CAD, an average over time, dividends should correspond to 30-40% EUR, USD and GBP. Foreign exchange risk arises from future of the Group’s profit after tax, adjusted for the effect of the commercial transactions, recognized assets, and liabilities and Net interest-bearing liabilities 3 686 542 660 062 650 122 -100 077 -16 068 -1 698 4 878 884 2022 Cash and cash equivalents 284 965 134 040 87 485 88 647 41 877 5 705 642 719 Money market funds Loans to associated companies 1 012 848 8 300 — — — — Gross interest-bearing liabilities* 2 678 379 452 331 755 679 — — — — — — — — — 1 012 848 8 300 3 886 390 Net interest-bearing liabilities 1 372 266 318 292 668 194 -88 647 -41 877 -5 705 2 222 522 fair value of biological assets (limited to 50% by Green Bond net investments in foreign operations. The Group enters into *See Note 27 for more information on the Group’s interest-bearing liabilities. agreement). At the same time, the Group’s net interest-bearing foreign currency forward contracts to manage this risk. debt per kg harvested salmon should remain below NOK 40, but can be exceeded in periods of growth investments. PART 03 - OUR FINANCIAL RESULTS 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 is managed primarily through intercompany borrowings denominated in the relevant foreign currencies. The term-loan facility of the syndicated bank loan is split into NOK and EUR. Since a substantial portion of the Group's sales revenues are denominated in EUR, the EUR loan acts as a natural, economical hedge on foreign currency translation rate fluctuations. SENSITIVITY ANALYSIS The sensitivity of a depreciation (appreciation) of 5% change in NOK foreign exchange rates versus CAD, EUR, USD and GBP at the balance sheet date (all other factors remaining unchanged) would be expected to have the following effects on the Group's profit after tax, other comprehensive income and total comprehensive income / equity effect. The OCI item reflect agio on intercompany long-term loans and the effect of translating the foreign subsidiary financials to the Group’s presentation currency, while the profit after tax-item include trade receivables and trade payables (incl. intercompany items), term-loan, lease liabilities, cash and cash equivalents and foreign currency derivative contracts. SENSITIVITY NOK 1 000 CAD EUR USD GBP TOTAL 31.12.2023 Profit after tax Other comprehensive income Total comprehensive income / effect on equity 31.12.2022 Profit after tax Other comprehensive income Total comprehensive income / effect on equity -/+ -/+ -/+ -/+ -/+ -/+ 8 487 25 660 34 147 21 478 24 335 45 813 -32 533 — -32 533 -25 703 — -25 703 -632 — -632 1 270 — 1 270 -570 — -570 — — — -25 249 25 660 411 -2 955 24 335 21 380 91 FORWARD CURRENCY CONTRACTS AT FAIR VALUE THROUGH PROFIT AND LOSS AMOUNT CURRENCY IN 1 000 BOUGHT AMOUNT CURRENCY IN 1 000 2 372 1 073 8 528 NOK NOK NOK 22 147 CAD 26 259 14 680 100 580 29 852 SOLD USD GBP EUR USD Total *Maturity specified as an interval for multiple contracts 31.12.2023 WEIGHTED HEDGING RATE MARKET RATE MATURITY INTERVAL * 11.0702 13.6809 11.7940 1.3479 10.1724 16.01.2024 - 17.06.2024 12.9342 23.01.2024 - 06.02.2024 11.2405 30.01.2024 - 30.12.2024 1.3251 04.01.2024 - 08.02.2024 AMOUNT CURRENCY IN 1 000 BOUGHT AMOUNT CURRENCY IN 1 000 31.12.2022 WEIGHTED HEDGING RATE MARKET RATE MATURITY INTERVAL * 2 600 3 518 NOK NOK 415 CAD 27 376 37 091 561 10.5291 10.5433 1.3515 10.5138 01.01.2023 - 03.01.2023 9.8573 03.01.2023 - 29.12.2023 1.3538 06.01.2023 - 03.02.2023 SOLD EUR USD USD Total *Maturity specified as an interval for multiple contracts MARKET VALUE NOK 1 000 2 243 843 4 525 4 241 11 852 MARKET VALUE NOK 1 000 29 2 721 -9 2 741 (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. Sensitivity calculations show the following expected values: If the interest rate had been 100 basis points lower (higher) throughout the year, all other factors remaining unchanged, the pre-tax profit would have increased (decreased) by NOK 30.4 million in 2023 and NOK 28.3 million in 2022 due to the floating rate of interest on loans and deposits. The sensitivity analysis is calculated based on our term loans in NOK and EUR (including revolving credit facility and overdraft) and bond loan, irrespective of concluded interest rate swap agreements. SENSITIVITY NOK 1 000 Effect on profit before income tax CHANGE IN BASIS POINTS 2023 2022 -/+100 +/- 30 439 +/- 28 257 The sensitivity table is for our bank and bond loans. A reduction in interest rates will increase profit before tax. 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 loan-related, variable-rate 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. PART 03 - OUR FINANCIAL RESULTS INTEREST RATE SWAP PRINCIPAL NOK 1 000 FIXED RATE (%) BASIS OF FLOATING RATE MATURITY MARKET VALUE NOK 1 000 31.12.2023 MARKET VALUE NOK 1 000 31.12.2022 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 Fixed rate paid - floating rate received NOK 200 million 1.61 1.35 1.07 0.71 0.72 3.16 Nibor 3 months 28.08.2023 Nibor 3 months 04.03.2024 Nibor 3 months 05.07.2024 Nibor 3 months 18.12.2024 Nibor 3 months 18.12.2024 Nibor 3 months 30.08.2027 — 1 677 5 391 7 187 7 181 1 875 2 670 5 018 7 627 9 963 9 961 — Total 23 312 35 238 IBOR REFORM The Group is exposed to the ongoing IBOR reform, as the Group has bank and bond loans, and engages in interest-rate swaps, which are exposed to the relevant IBOR rate. The bank loans, which are denominated in NOK and EUR, carry an interest rate which is based on the 3M IBOR plus a margin set per interest period based on a margin ratchet. The 3M IBOR and the margin are fixed per interest period. The bond loan’s interest rate, which is denominated in NOK, is 3M NIBOR plus a margin of 3.4 percentage points. 3M NIBOR is fixed per interest rate period. The Group monitors the IBOR reform and its potential impacts on the Group. As at 31 December 2023, the IBOR reform is not expected to significantly impact the Group. The information concerning our interest rate swaps disclosed above, explicitly states the swaps exposed to NIBOR. (III) PRICE RISK Financial salmon price contracts allow the buyer and seller to agree prices and volumes for future delivery. The Group uses financial contracts to hedge the sales price for the volume harvested by our two Norwegian regions, Rogaland and Finnmark. For the financial contracts entered into with Fish Pool, changes in unrealized gains and losses on the sale and purchase agreements are recognized net in the income statement as a fair value adjustment of biological assets, while the carrying value is reported as a derivative in the statement of financial position at the gross carrying amount of sales and contracts, respectively. As biological assets are recognized at fair value, the expected costs to meet contract terms will be included in the fair value adjustment. We target a contract share of 20-50% of our Norwegian volume. In 2023, financial fixed-price contracts accounted for 16% (22%) of the volume harvested in our Norwegian regions. As at 31 December 2023, the Group had financial salmon contracts totaling NOK -1.7 million (2022: NOK -64.9 million), of which all were sales contracts. The estimated contract share for the Norwegian harvest volume is 6% for the full-year 2024. 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 sales companies secure the bulk of the sales through credit insurance and bank guarantees. 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. For customers who have a reliable track record with the Group, sales up to certain previously agreed levels are permitted without any security. The Group utilizes a factoring arrangement for sales transactions entered into by the Norwegian sales organization. The book value of financial assets represents the maximum credit exposure. For further information about loss allowance, please refer to Note 20. MAXIMUM CREDIT RISK EXPOSURE NOK 1 000 Trade receivables Cash and cash equivalents Total NOTE 20 23 2023 109 187 216 318 325 505 2022 64 283 642 719 707 002 92 III) LIQUIDITY RISK 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. Management monitors the Group's liquidity reserve, which comprises a bond and loan facility (see Note 27), cash and cash equivalents (Note 23), and short-term money market investments (Note 22). Cash flow forecasts for all farming regions, sales and the whole Group are performed regularly, and simulation/stress testing of the liquidity risk is carried out. This is generally carried out at Group level in cooperation with the operating companies. Management and the Board seek to maintain a high equity ratio (49% at 31 December 2023), to be well positioned to meet financial and operational challenges. The following table is a specification of the Group’s financial liabilities, classified by maturity structure. 31.12.2023 NOK 1 000 Green bond loan instalment Green bond loan interest* Term-loan instalment Term-loan interest* < 3 M — 3 M - 1 Y Y 2 — 1 392 500 28 057 86 693 57 375 Y 3 — — Y4 — — 66 377 66 377 132 753 132 753 995 648 19 634 65 111 67 318 59 838 14 025 Revolving credit and overdraft installment 63 113 — — — 750 000 Revolving credit and overdraft interests* 12 120 37 306 49 425 49 425 12 120 Y 5 > 5 YRS TOTAL — — — — — — — 1 392 500 — 172 125 — 1 393 908 — — — 225 926 813 113 160 396 Other non-current liabilities 5 577 11 176 13 490 15 772 15 391 15 262 67 094 143 761 Lease liabilities Trade payables Derivative financial instruments Other current liabilities Total liabilities M = Months, Y = Year, YRS = Years, * = floating 31.12.2022 NOK 1 000 Green bond loan instalment Green bond loan interest* 89 784 274 425 300 234 274 530 233 619 151 077 312 041 1 635 709 760 753 — 8 741 -7 033 15 667 — — — — — — — — — — — — — — — — 760 753 1 709 15 667 1 069 823 534 055 2 013 094 532 318 2 020 803 166 339 379 134 6 715 567 < 3 M — 3 M - 1 Y — Y 2 Y 3 — 1 423 500 23 070 72 094 95 951 47 713 Y4 — — Y 5 > 5 YRS TOTAL — — — 1 423 500 — 238 829 Non-current term-loan instalment 64 106 64 106 128 211 128 211 128 211 961 584 — 1 474 429 Term-loan interest* 10 860 31 273 38 412 34 470 30 638 7 007 — 152 661 Other non-current liabilities 4 829 12 609 14 471 12 615 12 860 13 770 61 285 132 439 Lease liabilities Trade payables Derivative financial instruments Other current liabilities Total liabilities M = Months, Y = Year, YRS = Years, * = floating 71 460 187 538 226 320 139 445 127 249 97 112 136 986 986 111 717 498 — 28 526 36 401 76 585 — — — — — — — — — — — — — — — — 717 498 64 928 76 585 996 935 404 021 503 366 1 785 955 298 959 1 079 474 198 271 5 266 981 PART 03 - OUR FINANCIAL RESULTS 93 NOTE 5 SEGMENT INFORMATION ACCOUNTING POLICIES Operating segments are reported in a manner consistent with internal reporting to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the group management. The operating segments are identified on the basis of the reports which Group management 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 Group has one production segment: Production of farmed salmon. Earnings from the sales companies in the Group are reported per producer. Geographically, management assesses the results of production in Rogaland – Norway, Finnmark – Norway, British Columbia – Canada, and Newfoundland – Canada. Group management evaluates the results from the segments based on Operational EBIT. The method by which Operational EBIT is calculated excludes the effect of non-recurring costs, such as restructuring costs, legal costs on acquisition and impairment of goodwill and intangible assets, when impairment is attributable to an isolated event which is not expected to recur. Costs or gains which relate to prior years and not to the current operation of Grieg Seafood, are not included as Operational EBIT, as such costs are not considered meaningful for the comparability of the Group's results from one period to another. See Alternative Performance Measures. RECONCILIATION OF OPERATIONAL EBIT WITH EBIT IN THE INCOME STATEMENT NOK 1 000 2023 2022 Sales revenues Other income Other gains/losses Share of profit from associates (operational) Raw materials and consumables used Salaries and personnel expenses Other operating expenses Operational EBITDA Depreciation property, plant and equipment Amortization licenses and other intangible assets Operational EBIT Share of profit from associates (non-operational) Write-down of non-current assets (non-operational) Production fee Fair value adjustment of biological assets Litigation and legal claims Decommissioning costs 7 019 632 7 163 956 38 497 -6 959 -6 957 31 490 13 393 -1 463 -2 747 944 -2 233 655 -725 653 -695 577 -2 236 165 -2 087 310 1 334 451 -532 911 -21 792 779 747 — 136 -34 987 217 922 20 427 -2 515 2 190 834 -434 641 -16 706 1 739 486 22 558 -140 074 -26 350 83 412 -157 065 -24 382 EBIT (Earnings before interest and taxes) 980 730 1 497 586 2023 SEGMENTS NOK 1 000 Sales revenues Other income Other gains/losses Share of profit from associates FARMING NORWAY FARMING CANADA ELIM/OTHER GRIEG SEAFOOD GROUP ROGALAND FINNMARK BRITISH COLUMBIA NEW- FOUNDLAND 2 305 214 1 946 648 1 468 303 235 715 1 063 750 7 019 632 93 550 -1 710 2 386 28 335 -3 678 -9 343 7 884 -2 771 — 2 186 -93 458 — — 1 200 — 38 497 -6 959 -6 957 Operating costs before depreciation and amortization -1 560 157 -1 473 517 -1 428 871 -241 463 -1 005 754 -5 709 761 Depreciation and amortization -102 834 -161 828 -138 444 -142 545 -9 051 -554 703 Operational EBIT 736 449 326 617 -93 899 -146 107 -43 312 Harvest volume (tonnes GWT) 25 980 25 170 17 682 3 184 Sales revenue/kg (NOK) Farming cost/kg (NOK) Other costs/kg (NOK) * Operational EBIT/kg (NOK) Total assets Total liabilities *Other costs incl. ownership and headquarters costs/kg (NOK) 2022 SEGMENTS NOK 1 000 Sales revenues Other income Other gains/losses Share of profit from associates 88.7 60.4 — 28.3 77.3 64.4 — 13.0 83.0 88.4 — -5.3 74.0 95.9 24.0 -45.9 — n/a n/a n/a n/a 779 747 72 015 82.7 70.2 1.7 10.8 3 062 846 4 503 373 2 541 031 4 180 619 -624 616 13 663 252 931 648 2 171 857 1 316 620 4 151 619 -1 577 662 6 994 082 FARMING NORWAY FARMING CANADA ELIM/OTHER GRIEG SEAFOOD GROUP ROGALAND FINNMARK BRITISH COLUMBIA NEW- FOUNDLAND 2 123 671 2 629 226 1 665 105 81 137 -1 954 7 195 18 619 11 965 -8 658 8 649 -4 475 — — 321 — — 745 954 -77 237 7 858 — 7 163 956 31 490 13 393 -1 463 Sales revenue/kg (NOK) Farming cost/kg (NOK) Other costs/kg (NOK) * Operational EBIT/kg (NOK) Total assets Total liabilities Operating costs before depreciation and amortization -1 356 928 -1 579 017 -1 279 079 -40 576 -760 943 -5 016 543 Depreciation and amortization -98 536 -145 997 -119 789 -74 474 Operational EBIT 754 585 926 139 270 411 -114 728 Harvest volume (tonnes GWT) 28 387 36 024 20 286 74.8 48.2 — 26.6 73.0 47.3 — 25.7 82.1 68.8 — 13.3 -12 552 -96 920 — n/a n/a n/a n/a -451 347 1 739 486 84 697 75.8 52.7 2.5 20.5 — n/a n/a n/a n/a 2 920 718 3 422 148 1 913 438 3 116 131 1 502 930 12 875 365 1 236 330 1 610 495 692 878 2 735 606 114 349 6 389 657 *Other costs incl. ownership and headquarters costs/kg (NOK). Sales revenue on regional level comprises revenue from the sale of Atlantic salmon including gains/loss on contracts. Other income at regional level includes the sale of byproducts (such as ensilage), as well as income from the sale of smolt, fry and roe. At the Group level, such income is reclassified to sales revenue in the "Elim/Other"column in the Group's segment information. On regional level, other income also includes rental income and income from overcapacity of operational assets. Gains/losses from the sale of fixed assets and other equipment, are included in the line “other income” in the segment information. Profit and loss from associated companies that are closely related to the Group's operations and included in the Group’s value chain, for example when the relevant associates operate in the same position in the value chain as the Group, are included in the Group's Operational EBIT. Otherwise, the profit from associates is excluded and presented as share of profit from associates (non-operational) in the Group’s segment information. The elim/other items comprise, in addition to intercompany eliminations and the effect of share-based payments, the profit/loss from activities conducted by the parent company or other Group companies not geared to production. Earnings from the sales companies in the Group are reported per producer. The elim/other column thus include the effect the sales organization has on the gross figures related to sales revenue and operating expenses, as well as the impact the other non-farming entities has on the Group’s consolidated figures. Sales revenue/kg reported in the segment information is equal to the sum of sales revenue of the regions divided by the related harvest volume. Group sales revenue is calculated based on the farming operation of the Group, excluding sales revenue from Group companies not geared for production. PART 03 - OUR FINANCIAL RESULTS 94 Farming cost/kg reported in the segment information comprise all cost directly related to production and harvest of salmon, divided by the related harvest volume. On regional level, farming costs equal the operational costs. Other income are included in the farming cost metric, considered as cost reduction activities. Group farming cost is calculated based on the farming operation of the Group, excluding ownership costs and costs from Group companies not geared for production. Other costs incl. ownership and headquarter costs/kg reported in the segment information include all costs and revenue not directly related to production and harvest of salmon, hereof the costs from activities conducted by the parent company and other Group companies not geared for production, divided by the Group's harvest volume. Operational EBIT/kg reported in the segment information is equal to the operational EBIT divided by the related harvest volume. See Alternative Performance Measures for more information on the non-IFRS measures relating to sales revenue/kg, farming cost/kg, other costs incl. ownership and headquarters costs/kg and Operational EBIT/kg. SALES REVENUE IN TOTAL 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 2023, the sale of fresh whole Atlantic salmon totaled 93% (2022: 97%) of the Group's sales revenues (excluding other products), while fresh processed fish accounted for 4% (2022: 2%). SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY GEOGRAPHICAL MARKET NOK 1 000 NORWAY* CANADA* TOTAL 2023 2022 2023 2022 2023 2023% 2022 2022% NOTE 6 SALES REVENUES ACCOUNTING POLICIES UK USA Canada Asia Other markets Total Continental Europe 3 690 607 4 152 843 384 716 247 295 — — — — 3 690 607 53% 4 152 843 384 716 5% 247 295 316 139 181 659 1 228 930 1 323 551 1 545 069 22% 1 505 210 49 944 87 722 586 334 466 935 636 279 702 646 584 914 36 694 67 028 739 340 23 621 52 008 — — 23 621 9% 11% 0% 554 657 651 943 52 008 5 167 674 5 306 441 1 851 957 1 857 515 7 019 632 100% 7 163 956 100% 58% 3% 21% 8% 9% 1% SALE OF ATLANTIC SALMON Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The Group’s revenue derives primarily from the sale of whole and processed fish. Sales contracts cover both spot sales and fixed-price deliveries. Revenue from the sale of salmon is generally recognized upon delivery, as the Group considers delivery as the point in time when control of the goods/service is transferred to the customer. Each sales contract – either for a spot sale or a fixed delivery – is considered as one performance obligation. Each week, the sale of fish is settled with the customers. The fixed-price delivery contracts that are entered into with customers, specify a per-week volume. The sales price is determined upon contract settlement and is based on available market price (for example Nasdaq prices including transport and margin, with a price per kilogram). The price varies according to the quality and weight of the salmon. Payment is settled upon delivery, and the performance obligation related to the sale of fish is satisfied at delivery. The normal credit term of the Group’s sales transactions is 30 days. Based on the nature of the sale of fresh and frozen fish, the Group generally has no material contract liabilities. The Group does not generally engage in customer contracts where fulfillment of the performance obligation lies more than one year in the future. Therefore, the Group does not disclose further information on contract liabilities and related performance obligations. Cash refunds are given to the customer if the sold product is delivered with discrepancies compared to the agreed sales contract, or if the product is damaged. Generally, refunds are not material. Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating intragroup sales. OTHER REVENUE STREAMS The Group’s revenue stream also comprises some ensilage (byproduct from the harvesting of Atlantic salmon), in addition to sales of smolt, roe and and third-party harvesting if the Group has overcapacity at its facilities. Together, these have historically made up a non-significant part of the total sales of Grieg Seafood. *Sum of revenue from contracts with customers generated by the farming and sales organization, net of intercompany eliminations. See Note 5. Grieg Seafood did not have any sales to Russia in 2023 or in 2022. SALES REVENUES FROM CONTRACTS WITH CUSTOMERS, BY DISTRIBUTED PRODUCTS NOK 1 000 Fresh whole fish Fresh processed fish Frozen processed fish Other products and services Total NORWAY* CANADA* TOTAL 2023 2022 2023 2022 2023 2022 4 864 040 5 149 017 1 686 482 1 805 633 6 550 522 6 954 650 136 072 57 142 164 134 51 588 300 206 108 729 95 227 53 373 32 72 335 46 909 1 310 10 284 95 259 53 383 73 645 47 193 5 167 674 5 306 441 1 851 957 1 857 515 7 019 632 7 163 956 *Sum of revenue from contracts with customers generated by the farming and sales organization, net of intercompany eliminations. See Note 5. NOTE 7 SALARIES AND PERSONNEL EXPENSES SALARIES AND PERSONNEL EXPENSES NOK 1 000 Salaries Social security costs Synthetic stock options granted to directors and key employees, incl. social security costs (Note 8) Pension costs Other personnel costs Total Average full time equivalents (FTE) 2023 579 759 41 388 1 584 34 188 68 733 2022 533 629 38 635 30 399 29 069 63 844 725 653 695 577 759 718 Pension obligations The Group pays premiums to local, defined-contribution schemes for all employees. The Group's Norwegian pension schemes meet the requirements of the Norwegian Mandatory Occupational Pension Act. Pension premiums are recognized in the income statement through operations on an ongoing basis. Employer’s social security contributions are expensed based on paid pension premiums. Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS have a contractual early retirement pension scheme (AFP). AFP is a multi-enterprise defined benefit pension scheme that is booked as an defined contribution scheme as the Group cannot identify the obligation per employee which is part of the scheme. The financial commitments associated with the AFP scheme are therefore included in the Group’s pension expenses. The AFP early retirement scheme follows the rules for private sector AFP, and both companies are members PART 03 - OUR FINANCIAL RESULTS 95 of the Norwegian Confederation 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 disability as well as other factors such as age, years of service and remuneration. Pension premiums are recognized in the income statement through operations as they arise. Share savings program Grieg Seafood established a share savings program for its employees in 2018, which has continued throughout 2023. Each year has its own set of terms and conditions concerning how much each employee can invest in the program that year. In addition, each year has it’s set of terms for the lock-up period. The participating employees buy shares on a discount. The discount is recognized as a cost in the income statement and included as an other personnel cost as presented in the table above. The total costs related to the discount was NOK 2.1 million, in line with NOK 2.1 million in costs for 2022. The purchase price and the number of shares acquired by the company will be reported in accordance with the applicable regulations. At 31 December 2023, loan to employees related to the share savings program equals NOK 5.0 million (2022: NOK 4.9 million). The total shares sold to employees was 107 473 in 2023 (2022: 96 150). See also Note 24. Management remuneration The guidelines for management remuneration are available on Grieg Seafood ASA’s website. The remuneration to the Group Management Team is disclosed below. REMUNERATION PAID TO GROUP MANAGEMENT TEAM IN 2023 NOK 1 000 SALARY BONUS RETAINED BONUS , NOT YET PAID OPTIONS EXERCISED DURING THE YEAR OTHER REMUNERATION Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Alexander Knudsen (Chief Operating Officer Farming Europe) Grant Cumming (Chief Operating Officer Farming Canada) Erik Holvik (Chief Commercial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Nina Stangeland (Chief Strategy Officer) Kristina Furnes (Chief Communication Officer) Total remuneration 4 003 2 885 2 270 2 347 2 435 2 259 1 833 524 1 348 19 903 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — TOTAL 4 457 3 020 2 601 2 600 2 573 2 406 1 985 568 1 463 454 136 331 252 139 147 152 44 116 1 770 21 673 REMUNERATION PAID TO GROUP MANAGEMENT TEAM IN 2022 NOK 1 000 SALARY BONUS RETAINED BONUS, NOT YET PAID OPTIONS EXERCISED DURING THE YEAR OTHER REMUNERATION* Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Alexander Knudsen (Chief Operating Officer Farming Europe) Roy Tore Rikardsen (Chief Operating Officer Farming Canada until 10 of June 2022) Erik Holvik (Chief Commercial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) 3 644 2 349 2 066 1 802 2 247 2 098 1 631 1 229 1 007 612 321 -26 483 426 323 172 Total remuneration 17 067 3 318 — — — — — — — — — 4 540 3 202 2 917 2 917 3 070 2 883 2 209 1 773 23 509 *The CEO has in 2022 received a one-time payment in arrears for pension benefits. Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 8. REMUNERATION PAID TO BOARD MEMBERS IN 2022 NOK 1 000 Per Grieg1 Tore Holand2 Marianne Ribe1 Katrine Trovik2 Nicolai Hafeld Grieg Ragnhild Fresvik (from 9 of June 2022) Total remuneration including social security costs 1 Payment for work performed on the Remuneration Committee of NOK 25 673 is included in the remuneration paid to Per Grieg and Marianne Ribe. 2 Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik, amounting to NOK 68 460. The amounts include social security costs. NOTE 8 SHARE-BASED PAYMENTS TOTAL 12 144 6 282 5 637 4 740 5 923 5 538 4 296 3 282 2 954 120 332 47 123 131 133 108 3 948 47 842 TOTAL 516 401 328 372 308 183 2 107 Grant Cumming was appointed as Chief Operating Officer Farming Canada in Q1 2023, and Nina Stangeland appointed as Chief Strategy Officer in Q3 2023. Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 8. ACCOUNTING POLICIES REMUNERATION PAID TO BOARD MEMBERS IN 2023 NOK 1 000 Per Grieg1 Tore Holand2 Marianne Ribe1 Katrine Trovik2 Nicolai Hafeld Grieg Ragnhild Fresvik (from 9 of June 2022) Total remuneration including social security costs 1 Payment for work performed on the Remuneration Committee of NOK 25 525 is included in the remuneration paid to Per Grieg and Marianne Ribe. 2 Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik, amounting to NOK 79 870. The amounts include social security costs. TOTAL 542 422 342 394 314 314 2 328 The Group operates a share-based remuneration scheme with settlement in cash for the management team of the Group. The options’ strike price is the stock market price on the date of issue, rising by 0.5% per month until the exercise date. The most recent allocation was in 2023, totalling 2 680 000 options. The final exercise date is 31 May 2026. The options have a term of two years, where 50% is vested each year. Employees taken on after the initial allocation of options are allocated options on taking up employment. The value of the synthetic stock options settles in cash is recognized as a salary and personnel cost in income statement (see Note 7) and as a liability in the statement of financial position (see Note 31) as well as the table in this note that specify the amounts in the balance sheet. The cost of the executive management synthetic option scheme is expensed over the average vesting period. The liability is measured at fair value at each balance sheet date until settlement, and changes in the fair value are recognized in profit and loss. Social security tax on options is recorded as a liability and is recognized over the estimated vesting period. PART 03 - OUR FINANCIAL RESULTS 96 The Black and Scholes option pricing model is used for valuation. A brokerage firm is used to perform the calculations and the measurement is according to level 3 of the fair value hierarchy. The table below shows the movement in outstanding options in 2023 and 2022. GRANTED OPTIONS EXERCISED OPTIONS EXPIRED/ CANCELLED OPTIONS OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2023 OVERVIEW 2023 (TOTAL CASH-SETTLED OPTIONS) Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (Chief Operating Officer Farming Norway) Grant Cumming (Chief Operating Officer Farming Canada) Erik Holvik (Chief Commercial Officer) Nina Stangeland (Chief Strategy Officer) OUTSTANDING OPTIONS AT 31.12.2022 229 764 80 799 88 302 49 011 39 262 86 832 — 65 788 — 380 000 250 000 100 000 100 000 100 000 170 000 170 000 170 000 100 000 Others Total 135 260 1 140 000 775 016 2 680 000 — — — — — — — — — — — 59 764 — 3 302 — — 1 832 — — — — 550 000 330 799 185 000 149 011 139 262 255 000 170 000 235 788 100 000 1 275 257 64 898 3 390 118 OVERVIEW 2022 (TOTAL CASH-SETTLED OPTIONS) Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (Chief Operating Officer Farming Norway) Roy Tore Rikardsen (Chief Operating Officer Farming Canada) Erik Holvik (Chief Commercial Officer) Others Total OUTSTANDING OPTIONS AT 31.12.2021 GRANTED OPTIONS EXERCISED OPTIONS EXPIRED/ CANCELLED OPTIONS OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2022 540 000 270 000 270 000 200 000 100 000 270 000 270 000 170 000 600 000 2 690 000 — — — — — — — — — — 310 236 189 201 181 698 150 989 60 738 183 168 183 168 104 212 416 863 — — — — — — 86 832 — 47 877 1 780 273 134 709 229 764 80 799 88 302 49 011 39 262 86 832 — 65 788 135 260 775 016 ALLOCATION: YEAR - MONTH EXPIRY DATE: YEAR - MONTH STRIKE PRICE NOK PER SHARE AT 31.12.2023 STRIKE PRICE NOK PER SHARE AT 31.12.2022 2020 - 12 2020 - 12 2023 - 12 2023 - 12 Total 2023 - 05 2024 - 05 2026 - 05 2027 - 05 — 94.03 79.20 79.20 83.82 94.03 na na OUTSTANDING OPTIONS TOTAL OUTSTANDING OPTIONS VESTED 2023 — 2022 64 898 2023 — 2022 64 898 710 118 710 118 710 118 710 118 1 340 000 1 340 000 — — — — — — 3 390 118 775 016 710 118 775 016 Cash-based options available for settlement Weighted average exercise price on outstanding options (NOK per option) PART 03 - OUR FINANCIAL RESULTS 2023 2022 3 390 118 775 016 76.56 78.96 LISTED PRICE ON ALLOCATION CALCULATED VALUE PER OPTION ON ALLOCATION CALCULATED TOTAL VALUE ON ALLOCATION * TOTAL VALUE OF ALL OPTIONS AT 01.01.2023 CHANGE IN PROVISION CB-OB* EXERCISED OPTION 2023 ACC. COST RECOGNIZED IN EQUITY AT 31.12.2023 RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2023 AMOUNTS IN NOK 1 000 2023 Former employees with expired options** Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (Chief Operating Officer Farming Norway) Erik Holvik (Chief Commercial Officer) Other options allocated in 2020 Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (COO Farming Norway) Alexander Knudsen (Chief Operating Officer Farming Norway) Erik Holvik (Chief Commercial Officer) Nina Stangeland (Chief Strategy Officer) Other options allocated in 2023 Total — 78.96 78.96 78.96 78.96 78.96 78.96 78.96 78.96 75.93 75.93 75.93 75.93 75.93 75.93 75.93 75.93 75.93 75.93 — 4.35 6.34 5.82 7.20 6.04 5.87 6.13 7.04 4.29 4.22 7.97 6.53 5.26 5.43 5.95 5.30 6.24 5.28 — — — 1 480 1 652 -1 488 1 078 989 720 604 999 1 042 3 519 1 632 1 055 797 653 526 923 1 011 901 624 5 227 669 663 442 354 654 606 -589 -579 -392 -316 -570 -542 1 469 -1 334 — — — — — — — — — — 803 519 390 320 258 453 497 443 306 2 877 23 777 6 510 1 056 — — — — — — — — — — — — — — — — — — — — 6 887 — — — — — — — — — — — — — — — — — — 6 887 * Amounts exclude social security costs. ** The option category for the line item “Former employees with expired contracts” is equity options. All the other options in this table are options with settlement in cash. — 163 81 84 50 39 84 65 135 803 519 390 320 258 453 497 443 306 2 877 7 566 97 AMOUNTS IN NOK 1 000 COSTS RELATED TO CASH OPTIONS NOK 1 000 LISTED PRICE ON ALLOCATION CALCULATED VALUE PER OPTION ON ALLOCATION CALCULATED TOTAL VALUE ON ALLOCATION * TOTAL VALUE OF ALL OPTIONS AT 01.01.2022 CHANGE IN PROVISION CB-OB* EXERCISED OPTION 2022 ACC. COST RECOGNIZED IN EQUITY AT 31.12.2022 RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2022 — — — — 6 887 — 1 480 1 408 244 2 541 2022 Former employees with expired options** Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (COO Farming Norway) Roy Tore Rikardsen (COO Farming Canada) Erik Holvik (Chief Commercial Officer) Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Other options allocated in 2020 Other options allocated in 2017 Total — 78.96 78.96 78.96 78.96 78.96 78.96 78.96 78.96 83.00 83.00 83.00 83.00 78.96 83.00 — 4.35 6.34 5.82 7.20 6.04 5.87 5.87 6.13 2.26 2.79 2.79 2.38 7.04 2.35 1 078 989 720 604 999 999 1 042 906 557 557 475 3 519 1 880 909 840 600 511 847 847 881 7 4 4 4 -240 2 202 -177 1 883 -158 1 210 -157 1 773 -193 1 917 -847 1 917 -274 3 070 -7 -4 -4 -4 1 999 999 999 999 9 628 2 998 2 921 -1 451 11 -11 15 802 9 792 -3 283 34 135 6 887 — — — — — — — — — — — — — — 1 652 669 663 442 354 654 — 606 — — — — 1 469 — 6 510 * Amounts exclude social security costs. ** The option category for the line item “Former employees with expired contracts” is equity options. All the other options in this table are options with settlement in cash. RECOGNIZED LIABILITY, COSTS AND KEY ESTIMATES USED FOR THE FAIR VALUE CALCULATION OF OPTIONS As at 31 December 2023, fair value of outstanding options with the right to cash settlement were NOK 8 million (NOK 7 million). In addition, social security costs is included in the recognized liability in the statement of financial position, which totaled NOK 1.4 million (NOK 0.9 million) bringing the total recognized liability to NOK 9.0 million (NOK 7.4 million). See the table below for specification of the liability as per the balance sheet date. FAIR VALUE OF SYNTHETIC OPTIONS SOCIAL SECURITY COSTS TOTAL RECOGNIZED LIABILITY RECOGNIZED LIABILITY IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 Non-current liabilities Current liabilities Total 2023 6 867 700 7 566 2022 5 921 589 6 510 2023 1 312 134 1 445 2022 835 83 918 2023 8 178 833 9 012 2022 6 756 672 7 428 Change in provisions Exercised options during the year Total costs excl. social security costs Social security costs Total costs incl. social security costs 2023 1 056 — 1 056 527 1 584 2022 CLASSIFICATION IN FINANCIAL STATEMENTS -3 282 Other provisions for liabilities 34 137 Salaries and personnel expense / cash 30 855 -456 Public taxes payable 30 399 Salaries and personnel expense The total cost incl. social security costs totaled NOK 1.6 million (NOK 30.4 million) These costs are recognized in the income statement as an other personnel cost (see Note 7). Social security contributions are provided for on an ongoing basis based on the fair value of the options. ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS Anticipated volatility (%) Risk-free rate of interest (%) Estimated qualification period (years) 2023 45.63% 4.00% 2.33 2022 58.29% 3.12% 1.11 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. NOTE 9 OTHER OPERATING EXPENSES OTHER OPERATING EXPENSES NOK 1 000 Transportation costs Maintenance costs Electricity and fuel Lease expenses1 Outsourced services and audit fees Insurance IT expenses Marketing costs Other operating expenses2 Other production-related costs1,3 Total other operating expenses 2023 433 469 346 941 179 076 28 563 98 980 115 583 84 225 14 327 162 689 772 312 2022 497 679 327 031 177 902 60 490 107 318 66 512 77 298 6 642 119 311 647 128 2 236 165 2 087 310 1Includes lease expenses and lease-related expenses, including the effect of IFRS 16. 2Includes equipment, telephony/postage, office supplies, fees, travel costs and the like. 3Production-related costs comprise harvesting costs including expenses for well-boat services, packaging material, diving services, vaccination, delousing, oxygen, and analyses and the like. PART 03 - OUR FINANCIAL RESULTS 98 BREAKDOWN OF TOTAL AUDITOR'S FEES NOK 1 000 2023 2022 AUDIT SERVICES Group auditor Other auditors OTHER ASSURANCE AND CERTIFICATION SERVICES Group auditor Other auditors TAX SERVICES Group auditor Other auditors OTHER SERVICES Group auditor Other auditors Total Group auditor Total other auditors Total auditor's fees 3 815 1 180 1 416 — 1 082 20 563 — 6 877 1 200 8 077 3 049 1 128 783 — 764 124 26 — 4 622 1 252 5 873 LITIGATION AND LEGAL CLAIMS Three class-actions were filed in Canada (none has been certified as a class-action). Even though Grieg Seafood considers the complaints to be entirely without merit, Grieg Seafood have agreed to a settlement offer from the plaintiffs and entered into a respective settlement agreement in 22 September 2023 as the costs of litigation in Canada can be substantial. The settlement agreement was approved by the Federal Court in February 2024. In 2022, incurred costs and provisions for expected costs related to the lawsuits in North America in total of NOK 157 million were expensed, of which NOK 129 million were used at year end 2022. The remaining NOK 28 million were carried over to 2023. After the settlement related payment was made, the remainder of the accrual was released. At year-end 2022, the accrual was reported as other current liability in the Statement of Financial Position, while the costs in the income statement in 2023 and 2022 are presented as a separate financial statement line item - "Litigation and legal claims". DECOMMISSIONING COSTS Grieg Seafood has in 2022 discontinued production in the shíshálh (Sechelt) farming area of British Columbia. At year-end 2022, all fish from the farming area of Sechelt have been harvested. The Group are required to decommission the sites and at year-end 2022 the Group has accrued a total of NOK 24 million of clean-up costs. The decommissioning activities were finalized in 2023, following an additional NOK 2.5 million in costs reported as decommissioning costs for the year. The costs are reported on the financial statement line item "Decommissioning costs". NOTE 11 FINANCIAL INCOME AND FINANCIAL EXPENSES The auditor’s fees cover financial audit of the Group, assurance engagement on sustainability reporting and related services. FINANCIAL INCOME AND FINANCIAL EXPENSES NOK 1 000 2023 2022 NOTE 10 CONTINGENT LIABILITIES, LITIGATION AND LEGAL CLAIMS AND DECOMMISSIONING COSTS CONTINGENT LIABILITIES ACCOUNTING POLICIES Contingent liabilities are defined as: • • possible obligations resulting from past events whose existence depends on future events, obligations that are not recognized because it is not probable that they will lead to an outflow of resources entailing financial benefits from the company, obligations that cannot be measured with sufficient reliability. • Contingent liabilities are not recognized in the annual financial statements apart from contingent liabilities resulting from the acquisition of an entity. In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the in the market for spot sales of fresh, whole and gutted Norwegian farmed Atlantic salmon. In January 2024, Grieg Seafood received a Statement of Objections from the European Commission related to its investigation. See Note 32 concerning events after the balance sheet date of 2023. FINANCIAL INCOME Realized gain (loss) on investment in money market fund Unrealized gain (loss) on investment in money market fund Net change in fair value of derivatives Net currency gains Other interest income Other financial income Total financial income FINANCIAL EXPENSE Interest expense on external borrowings and leases Amortization of transaction cost on external borrowings Net change in fair value of derivatives Other financial expenses Total financial expenses Net financial items 41 461 -12 624 26 703 79 060 3 796 1 800 — 12 624 61 851 38 205 11 893 1 693 140 195 126 267 253 706 8 311 11 926 2 825 276 768 -136 573 156 067 16 471 — 3 672 176 210 -49 944 PART 03 - OUR FINANCIAL RESULTS 99 NOTE 12 INCOME TAXES ACCOUNTING POLICIES Income tax expense consists of tax payable and changes to 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. The liability method is applied both for ordinary corporate taxation as well as for the Norwegian resource rent tax scheme. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply when the related deferred tax asset is realized, or the deferred income liability is settled. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available, from which the temporary differences can be deducted. Deferred tax is calculated on temporary 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. For the Norwegian resource rent tax scheme deferred tax liability is recognized for temporary differences on biological assets allocated to fish farming licenses subject to the resource rent tax. The deferred resource rent tax is recognized using the effective tax rate 25%. For the fish farming licenses subject to the resource rent tax, no deferred tax liability is recognized, because a subsequent sale will not be subject to resource rent tax and the carrying value is not realized through use. A deferred tax asset is recognized, with the effective rate of 25%, for any loss carried forward within the resource rent tax regime as long as it probable that there is sufficient taxable income in future periods. PART 03 - OUR FINANCIAL RESULTS ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY THE NORWEGIAN RESOURCE RENT TAX SCHEME On 31 May 2023, the Norwegian Parliament passed the resource rent tax scheme on aquaculture in Norway. The tax scheme applies to net profits from commercial sea-phase salmon aquaculture activity in Norway. The tax is an additional layer of taxation on aquaculture, on top of ordinary corporate income taxation of 22%, bringing the total marginal tax rate for the in-scope aquaculture activity to 47%. This new tax scheme was implemented retrospectively with effect from 1 January 2023. The Norwegian resource rent tax will not affect the tax load of the Group’s operations in British Columbia and Newfoundland. In December 2022, the Group carried out an internal reorganization, in which its commercial aquaculture licenses, together with the connected standing biomass of live fish in sea, were transferred from Grieg Seafood Rogaland AS and Grieg Seafood Finnmark AS to Grieg Seafood Rogaland Sjø AS and Grieg Seafood Finnmark Sjø AS, which are also (indirectly) wholly owned by Grieg Seafood ASA. The biomass was transferred by way of a sale and purchase transaction at fair value, using tax discontinuity. Both companies that acquired biomass chose to capitalize the acquisition costs in 2022 for tax purposes (as opposed to expensing the acquisition costs), thereby carrying over these tax positions into 2023. With tax effect for 2023, the companies have deducted the capitalized costs both in the basis for the ordinary corporate income tax, as well as in the basis for the new resource rent tax scheme. Consequently, the Group has not recognized an implementation effect concerning the transitioning to the resources rent tax scheme. If the deduction in the new resource rent tax scheme is not accepted by the tax authorities, the deferred tax asset released to loss carried forward in the regime will be reduced accordingly. As the Group has aquaculture licenses both in- and out-of-scope of the resource rent tax scheme, the income and expenses related to the tax scheme have to be identified. To be able to calculate the resource rent tax in accordance with the chapter 19 of the Norwegian tax law, a number of analyses have been performed related to transfer pricing according to the Norwegian tax law chapter 13 and the OECD guidelines for transfer pricing. The implementation of the resources tax regime has resulted in changes in process and procedures, transforming from an integrated value chain of breeding, freshwater and seawater farming and harvesting of salmon to carving out the farming business subject to the resource rent tax into individual companies. The transfer pricing model applied by the Group pursuant to the OECD transfer pricing guidelines induces that a variability in profitability mainly affects the companies subject to resources rent tax. As this is a new tax, it is unknown how the tax authorities will assess the methods used and the assumptions made. Management is, therefore, not able to quantify any meaningful sensitivity, caused by a reasonable change in the assumptions applied. Due to weak operational performance in Finnmark combined with a substantial share of non-commercial licenses (not being subject to resource rent tax) in Rogaland, the basis for the resource rent tax is limited in 2023. INCOME TAXES FOR THE YEAR IN THE INCOME STATEMENT NOK 1 000 Norway Norway - resource rent tax Abroad Current income tax Norway Norway - resource rent tax Abroad Changes in deferred tax Total income taxes related to profit for the year 2023 14 614 — 4 084 18 698 250 032 11 273 4 403 265 708 284 407 2022 263 084 — 59 422 322 506 116 873 — -145 516 -28 643 293 863 100 TAX RECONCILIATION BETWEEN NOMINAL AND EFFECTIVE TAX RATES NOK 1 000 Profit before tax Taxes calculated at nominal tax rate Withholding tax Non-taxable income/loss from associated companies Effect of adjustment of income tax from previous years Effect of recognition of previously non-recognized tax assets Effect of non-recognition of losses and tax assets Effect of resources tax Other permanent differences Total income tax expense Weighted average tax rate TAX PAYABLE BOOKED IN FINANCIAL STATEMENT CURRENT LIABILITIES NOK 1 000 Tax payable in Norway Tax payable resource rent in Norway Tax payable abroad Total tax payable in the statement of financial position CHANGE IN BOOK VALUE OF DEFERRED TAX NOK 1 000 Balance sheet value at 01.01. Reclassified from deferred tax to tax payables * Currency conversion Tax effect of OCI transactions (see Note 25) Other effects Changes to income in the period Changes to income in the period of resource rent tax Net deferred tax liability at balance sheet date 2023 844 157 210 484 12 600 1 531 -10 436 — 74 439 11 273 -15 484 284 407 33.7% 2023 — — 6 156 6 156 2023 1 041 101 -492 959 14 892 6 332 7 538 254 435 11 273 842 612 2022 1 447 642 286 185 6 085 -4 641 -27 453 -4 187 37 189 — 685 293 863 20.3% 2022 286 586 — 66 605 353 191 2022 1 069 743 — 30 467 5 454 -27 453 -37 111 — 1 041 101 *After the completion of the consolidated financial statements and before the submission of tax returns for each subsidiary, there was a reclassification of deferred tax to payable tax, resulting in an impact on the consolidated financial statement. Instead of expensing all costs associated with the biomass, the value of the biomass was capitalized for tax purposes, reflecting a general option available to taxpayers. The corresponding amount was included in the tax payment for corporate income tax paid in 2023. The nominal tax rate in Norway is 22% and the resource rent tax is 25%. The nominal tax rate for 2023 was 27% in British Columbia (BC) and 30% in Newfoundland. TOTAL DEFERRED TAX ASSETS/LIABILITIES IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 Deferred tax assets (+) Deferred tax liabilities (-) Net deferred tax (-) 2023 — -842 612 -842 612 2022 — -1 041 101 -1 041 101 The following tables provide a breakdown of deferred tax. The tax effects of taxable and deductible temporary differences are shown separately. The Norwegian and Canadian parts of the Group each have a net deferred tax position. Deferred tax assets linked to tax losses are offset against deferred tax liabilities in the tax jurisdictions where acceptable. SPECIFICATION OF DEFERRED TAX AND TAX ASSETS NOK 1 000 Non-current assets Current assets Debt (lease, other liabilities) Tax losses carried forward Total recognized deferred tax liability ordinary taxation Biological assets - deferred resource rent tax Tax losses carried forward - resource rent tax Total recognized deferred tax liability resource rent tax 2023 340 073 711 458 -76 484 -143 708 831 339 624 315 -613 042 11 273 2022 572 722 617 349 1 493 -150 461 1 041 101 — — — Total recognized deferred tax liability 842 612 1 041 101 TAX LOSS CARRIED FORWARD ARE DIVIDED AMONG THE FOLLOWING JURISDICTIONS NOK 1 000 Tax losses carried forward resources rent tax in Norway Tax losses carried forward in Canada Total 2023 -613 042 -143 708 -756 750 2022 — -150 461 -150 461 The tax loss carry forward in Norway has no expiration date. Losses in Canada have a 20-years carry forward period, with the first expiration date in 2036. Deferred tax assets related to tax losses carried forward in Canada not book is NOK 96 million. 101 PART 03 - OUR FINANCIAL RESULTSNOTE 13 INTANGIBLE ASSETS ACCOUNTING POLICIES Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is the fair value of the asset at the date of the acquisition. Intangible assets that arise internally within the Group are not recognized. GOODWILL Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired entity at the date of acquisition. Goodwill on acquisitions of subsidiaries is classified as an intangible asset. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. LICENSES Fish-farming licenses acquired by the Group are measured on initial application at cost. Fish-farming licenses with an indefinite useful life are not amortized but reviewed for impairment annually, or more frequently if there are indications that the carrying value may have decreased. The Group considers the following licenses to have indefinite useful lives: • Licenses granted with an indefinite useful life, where the company has no other contractual restrictions relating to the use of the license. • Licenses granted with a finite useful life, but where the license holders can renew the licenses without incurring considerable expenses. Licenses with a finite useful life are amortized over their useful lives, and tested for impairment if there are indications that future earnings do not justify the asset’s carrying value. Such licenses relate to water licenses for hatcheries and some specific seawater licenses. See the separate section below for more information concerning the fish farming licenses of our farming regions. OTHER INTANGIBLE ASSETS Acquired customer portfolios and computer software licenses are measured on initial recognition at cost and amortized over their estimated useful lives. Customer portfolios are recognized in the statement of financial position at cost on the date of purchase. Amortization is calculated using the straight-line method over the estimated useful life, as follows: • Other intangible assets 3–10 years ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY CLASSIFICATION OF LICENSES A significant judgment is whether a license should be amortized over its definite life, or whether it is deemed to have an indefinite life and tested for impairment only. All licenses where the Group has no other contractual restrictions relating to the use of the licenses have indefinite lives and, as such, are not amortized. Also, licenses granted with a finite useful life, but where the license holder can renew the licenses without incurring considerable expenses are assessed as having indefinite lives. However, the Group’s licenses in each country (see separate section in this Note for each license regime) are subject to certain requirements and the Group risks penalties, sanctions or even license revocation if the Group fails to comply with license requirements or related regulations. Local governments may, moreover, change the way licenses are renewed. BRITISH COLUMBIA In British Columbia (BC), licenses are renewed by the federal Department of Fisheries and Oceans (DFO) on a regular basis, with different length. By 2025, the Canadian Federal Government aims to have created a responsible plan to transition into better and more sustainable practices in British Columbia, in order to reduce interactions with wild salmon. In 2022, the Canadian Department of Fisheries and Oceans renewed all farming licenses for two years to allow for the development of the plan. We expect that the licenses will be renewed in 2024 and that they are incorporated into the transition plan. Grieg Seafood supports the transition and continues to work collaboratively with our First Nation partners, government and local communities on innovation and modernization towards a sensible transition plan. In addition, farm tenures in BC are renewed by the province on a regular basis. From 2022, farm tenures that are not accepted by the First Nation that is the rights-holder of the territory where the farm is located will not be renewed. All of Grieg Seafood's current production is operating under agreements with First Nations. Grieg Seafood supports the implementation of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) into BC regulations, and we are engaging in the ongoing process of reconciliation between the government, First Nations and industries. The vast majority of Grieg Seafood’s production are under long-term agreements with the First Nations in those areas, and we are pursuing agreements with more First Nations. The current agreements we have with First Nations last until 2037-2045. Even though the agreements cannot be said to be everlasting, the Group has nevertheless classified the licenses as having indefinite lives, based on the lack of sufficient relevant factors to change the principle at this point. Work on the transition plan has not been completed, and based on the experience we have with the work so far, it is not considered reasonable to change estimates regarding the economic life of the aquaculture licenses in BC. Given that it is desirable for both First Nations partners and the Group to have close and good working relationships, and that they want the Group to operate in the area, the Group’s best estimate is that the licenses will still be classified as having indefinite lives. This will be continuously assessed. If the situation changes and the Group agrees not to use the option to extend the duration of the agreement, the estimate of the remaining amortization period must be re-evaluated. NEWFOUNDLAND Grieg Seafood Newfoundland has 14 approved seawater farming licenses, as well as one freshwater license. The seawater licenses are granted for terms of six years. To renew the licenses, licenses must follow the Provincial Aquaculture Policy and Procedures Manual. As long as licenses follow and comply with the requirements, the license will be renewed. For this reason, the licenses are classified as having indefinite lives and, as such, are not amortized. Grieg Seafood Newfoundland is the single aquaculture operator/salmon farmer in the Placentia Bay area. The fair value related to this (the excess value of book values as identified in the acquisition of Newfoundland in 2020) is amortized over the duration of the agreement. PART 03 - OUR FINANCIAL RESULTS 102 See Note 27 for information on assets pledged as security for financial liabilities. Pursuant to the regulations, annual production is limited to 15 million fish. INTANGIBLE ASSETS 2023 NOK 1 000 Book value at 01.01. FISH FARMING LICENSES – INDEFINITE LIVES FISH FARMING LICENSES – FINITE LIVES OTHER INTANGIBLE ASSETS GOODWILL TOTAL 691 094 1 332 936 130 775 14 689 2 169 493 Currency translation differences 36 016 37 055 Additions Amortization Book value at 31.12. ACCUMULATED VALUES Acquisition cost Accumulated amortization Accumulated impairments Book value at 31.12. INTANGIBLE ASSETS 2022 NOK 1 000 Book value at 01.01. Reclassifications1 Additions Amortization Impairment2 Book value at 31.12. ACCUMULATED VALUES Acquisition cost Accumulated amortization Accumulated impairments Book value at 31.12. — — — — 727 111 1 369 991 816 714 1 505 283 — -89 603 727 111 — -135 292 7 461 — -18 429 119 807 182 694 -62 888 — 357 1 592 -3 363 13 275 80 891 1 592 -21 792 2 230 184 63 957 2 568 649 -50 682 — -113 570 -224 895 1 369 991 119 807 13 275 2 230 184 FISH FARMING LICENSES – INDEFINITE LIVES FISH FARMING LICENSES – FINITE LIVES OTHER INTANGIBLE ASSETS GOODWILL 660 071 1 522 227 14 092 -4 439 124 845 7 380 -11 103 — 36 828 1 483 -20 687 2 669 -5 603 50 560 -104 159 — — -135 693 — -130 752 — — — — — -89 603 691 094 691 094 1 332 936 130 775 14 689 2 169 493 780 697 1 463 687 173 274 -42 499 — 61 944 2 479 602 -47 255 -89 754 — -220 355 1 332 936 130 775 14 689 2 169 493 Currency translation differences 31 023 See Note 27 for information on assets pledged as security for financial liabilities. 1The reclassification primarily concerns licenses in Newfoundland that have been considered as having finite economic life and subject to amortization. In addition, the reclassification lite item relate to other intangible assets reclassified to indefinite licenses following formal approval of license application in Newfoundland. 2For information concerning the impairment of aquaculture licenses in 2022 see Note 15. LICENSES Seawater licenses Each license for the farming of salmon in the sea is subject to a production limit in the form of “maximum allowed biomass” (MAB) on both company and location/seawater site level. The system means the license holder can at no time have a standing biomass (number of kg of live fish in seawater) that exceeds the company level MAB, in addition that no location can have a standing biomass that exceeds the seawater site’s MAB. When a seawater site is approved, a maximum level of tonnes of fish is set, based on the location and environmental conditions on the site. The normal size of a permit is 780 tonnes at the license level ex. the county of Troms and Finnmark, while the normal size of a permit in Troms and Finnmark is 945 tonnes. While the extent of biomass a company can possess primarily depends on the type and number of licenses, the limitation at site level is primarily dependent on the site’s environmental sustainability. See Section 15 of the Salmon Allocation Regulation (“Laksetildelingsforskriften”). Norway also has green licenses, with stricter environmental criteria. The sea lice limit is half that of regular licenses, with stricter criteria for escape prevention technologies and limits on the amount of medical treatment permitted per generation. Hatchery licenses Young salmon are defined as eggs, juveniles, parr or smolt to be released at another location, see Section 4(f) of the Salmon Allocation Regulation. Such licenses are not limited and thus subject to continuous application for new licenses or changes to existing licenses. TOTAL 2 233 218 78 627 — 10 048 -16 706 Broodstock and R&D licenses These licenses are not limited in number. The purpose of broodstock licenses is to produce roe and milt from salmon with improved and/ or specific traits. Broodstock licenses include both a land and sea phase, i.e. broodstock and egg production are covered by the same licensing process. The purpose of an R&D license is to encourage important research projects that can bring the Norwegian aquaculture industry forward. Permits are means tested, meaning that the applicant must demonstrate a need for the production of eggs, specific research projects or for educational purposes. Educational licenses Educational licenses in Norway are given to universities, colleges or high schools offering aquaculture-related courses of study. Salmon farming companies can lease educational licenses from the educational institution. Part of the students’ training will then take place at — -135 693 these salmon farms. Harvesting pen licenses Licenses utilized for holding pens where live fish are kept prior to harvesting. These relate to specific locations. Duration and renewal The Ministry may in individual decisions or regulations specify further provisions on the content of aquaculture licenses, including matters relating to scope and time limitations, see Section 5(2) of the Aquaculture Act. Nonetheless, the preparatory work for the Aquaculture Act specifies that licenses are normally granted without a time limit. Grieg Seafood’s general fish farming and hatchery licenses are not time-limited under current regulations. After the reform in 2009, a number of licenses were time-limited, mainly for 15 years. As no government practices have been established relating to the renewal of broodstock licenses, the current understanding is that they will be renewed upon application. Expiration of licenses allows for application for renewal on demand. A license for harvesting pens is valid for ten years and must be renewed on expiration, provided that the license is still connected to an approved harvesting facility. NORWAY The licensing regime for the production of salmon in Norway is enacted by the Norwegian Parliament through the Aquaculture Act. The Disposal and withdrawal Ministry of Trade, Industry and Fisheries grants permits for aquaculture (licenses). All aquaculture operations are subject to licensing, All licenses can be transferred and mortgaged in accordance with Section 19 of the Aquaculture Act. Transfers and mortgages must be and no one can produce salmon without permission from the authorities, see Section 4 of the Aquaculture Act. recorded in a separate register (the Aquaculture Register). It is not permitted to rent out licenses or license capacity. The aquaculture permit allows the production of salmon in limited geographic areas within the current determined limitations of the Section 9 of the Aquaculture Act sets out the basis for withdrawal of an aquaculture license. This states that there must be significant permit scope. The Aquaculture Act is administered centrally by the Ministry of Trade, Industry and Fisheries, with the Directorate of Fisheries as the supervisory authority. Regionally, several industry authorities jointly manage full administrative and supervisory responsibility within the regulating range of the Aquaculture Act. The county council is the regional administrative body, while the Directorate of Fisheries serves as appellate body in locality and licensing matters. breaches of the terms of an aquaculture license before it can be revoked. PART 03 - OUR FINANCIAL RESULTS 103 TOTAL NUMBER CAPACITY TONNES 35 30 853 CANADA - NEWFOUNDLAND Grieg Seafood Newfoundland is the single aquaculture operator/salmon farmer in the Placentia Bay area. Newfoundland currently holds 14 seawater licenses and one freshwater license, with the aim to develop additional licenses as the project progresses. 8 3 3 3 2 2 56 1 57 7 743 2 340 2 340 4 045 1 106 1 560 49 987 780 50 767 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 one million fish in the sea in the first generation, and a maximum of two million fish in the second generation. In addition there are regulations related to fallowing and adherence to certain environmental indicators. To operate aquaculture sites in Newfoundland, the following approvals and licenses must be in place: • Aquaculture License – issued by the Department of Fisheries Forestry and Agriculture • Lease License for Occupancy – issued by Crown Lands division of Department of Fisheries Forestry and Agriculture • Canadian Navigable Waters Act - issued by Transport Canada • Water Use Approval – issued by Department of Environment, Climate Change, and Municipalities Duration and renewal Aquaculture licenses are granted for a six-year term. Each year, licensees must complete the validation process and abide by the legislative references: Aquaculture Act and the Policy cross references as Aquaculture License Renewal AP 6, Annual reporting AP 7 and site utilization. For renewal, licensees are required to follow and comply with the requirements set out in AP 6 License Renewal. Licensees must abide by license conditions, policies, and regulations at all times. Licenses may be suspended or cancelled if a breach occurs, or they may not be renewed. The timeline supports two production cycles and promotes longer-term investment and stability. Ensuring sites are being utilized and developed by license holders in accordance with approved plans on file with the department falls under AP 8 Site Utilization. If sites are not being utilized based on approved plans on file, they may not be renewed. NORWAY LICENSE CATEGORY AND TOTAL CAPACITY Seawater licenses Green licenses 1 R&D permit Broodstock Smolt Harvesting pens Education 2 Total licenses in production Visitor center for fish farming 3 Total 1 Of which four green licenses are converted. 2 Finnmark and Rogaland lease education licenses from the Troms and Finnmark and Rogaland County Councils, respectively. 3 Finnmark has a license for a visitor center for fish farming. The center is under construction, and expected to be completed in 2025. The license cannot be utilized before the visitor center is constructed. CANADA - BRITISH COLUMBIA Grieg Seafood BC Ltd (GSF BC) has farms on both the west and east coasts of Vancouver Island. To operate farms in British Columbia, Canada, the following three licenses must be in place: 1. 2. 3. Aquaculture license – issued by the Department of Fisheries and Oceans and the First Nations. License of Occupation (Tenures) – issued by the Ministry of Forest, Lands and Natural Resource Operations. Navigation Water Permit – issued by Transport Canada (Canadian public authority). For restrictions regarding production quantity, see the table summarizing BC licenses below. Duration and renewal 1. 2. 3. Aquaculture license – duration of one year, renewal each year is a formality. License of Occupation – duration of 2–20 years. Renewal is applied for on expiration. Navigation Water Permit – duration of five years, but possible to apply for renewal. CANADA - BC TOTAL CAPACITY, WEST AND EAST OF VANCOUVER ISLAND Total - Of which relates to Sechelt WEST 38 500 0 EAST 17 500 11 000 TOTAL 56 000 11 000 The capacity in BC is merely theoretical capacity, as all locations cannot be utilized simultaneously. BC also has a license for broodstock and smolt. In 2022, the licenses for Sechelt farming area were written down. Grieg Seafood formally holds the licenses with DFO as at year-end 2023, however we have decommissioned our farming operations at the sites. PART 03 - OUR FINANCIAL RESULTS 104 NOTE 14 PROPERTY, PLANT AND EQUIPMENT INCL. RIGHT-OF-USE-ASSETS ACCOUNTING POLICIES Property, plant and equipment incl. right-of-use assets is stated at historical cost less depreciation and impairment losses. Land and buildings mainly comprise freshwater facilities, harvesting plants and offices. Land is not depreciated. Other operating assets are depreciated in accordance with the straight-line method so that the cost, or remeasured value, is written down to residual value over its expected useful economic life as follows: • Buildings/real estate 10–50 years • Plants, barges, onshore power supply 5–30 years • Nets/cages/moorings 5–25 years • Other equipment 3–35 years The assets’ useful lives and residual values are estimated at each balance sheet date and adjusted if necessary. In 2023 there has not been any changes to the estimated useful life of the Group’s property, plant and equipment as a consequence of climate- related risk. TANGIBLE ASSETS 2023 NOK 1 000 Book value at 01.01. Currency translation differences Grants and other deductions to historic cost1 Additions2 Disposals Depreciation Impairment3 34 151 -25 847 209 058 -2 299 -45 705 136 BUILDINGS/ PROPERTY PROD. PLANTS AND BARGES NETS, CAGES AND MOORINGS OTHER EQUIPMENT TOTAL 1 302 600 1 380 814 30 916 — 300 518 -5 857 603 938 16 575 — 230 046 -928 748 238 4 035 590 19 018 100 660 — -25 847 788 893 1 528 515 -1 657 -10 741 -129 895 -120 458 -236 855 -532 911 — — — 136 TANGIBLE ASSETS 2022 NOK 1 000 Book value at 01.01. Currency translation differences Reclassification Grants and other deductions to historic cost1 Additions Disposals Depreciation Impairment BUILDINGS/ PROPERTY PROD. PLANTS AND BARGES NETS, CAGES AND MOORINGS OTHER EQUIPMENT TOTAL 1 169 285 1 065 018 529 502 638 824 3 402 629 28 997 -35 799 75 664 106 449 -269 -41 726 — 15 431 21 046 775 393 178 -5 889 8 944 -747 — 180 331 -3 160 17 390 15 501 70 762 — 24 76 464 256 922 936 879 -2 803 -12 121 -108 632 -106 867 -177 416 -434 641 -113 -4 065 603 938 -204 -4 382 748 238 4 035 590 Book value at 31.12. 1 302 600 1 380 814 ACCUMULATED VALUES Acquisition cost Accumulated depreciation Accumulated impairments Book value at 31.12. Of which book value of non-depreciable property RIGHT-OF-USE ASSETS Book value at 31.12 of right-of-use assets (see separate specification in Note 28) 1 611 916 -309 317 — 1 302 600 113 016 2 178 260 1 439 973 1 320 913 6 551 062 -797 339 -832 197 -572 483 -2 511 335 -107 1 380 814 — -3 838 603 938 — -192 -4 137 748 238 4 035 590 — 113 016 66 622 292 209 72 302 547 010 978 143 See Note 27 for information on assets pledged as security for financial liabilities. See Note 28 for specification of the Group's right-of-use assets and further information on its leases 1Grants received and other deductions to historic cost, of which NOK -86 million relates to the reversal of Investment Tax Credit (ITC) carried over from 31 December 2021 in Newfoundland (see Note 17) and NOK 9 million relates to government grants received in 2022 in Newfoundland. 2The Group leases vessels which are capitalized on the balance sheet as right-of-use assets. Some of these vessels are utilized in the development of the Newfoundland region. 3Impairment in 2022 is related to the Sechelt farming area in British Columbia, Canada. See Note 15 for more information. Book value at 31.12. 1 472 094 1 576 496 729 174 1 317 638 5 095 401 ACCUMULATED VALUES Acquisition cost Accumulated depreciation Accumulated impairments Book value at 31.12. Of which book value of non-depreciable property RIGHT-OF-USE ASSETS Book value at 31.12 of right-of-use assets (see separate specification in Note 28) 1 820 899 -348 805 — 1 472 094 118 833 2 428 996 1 468 702 1 958 891 7 677 488 -852 391 -109 -735 600 -3 928 -641 057 -2 577 853 -197 -4 234 1 576 496 729 174 1 317 638 5 095 401 — — — 118 833 64 048 303 108 66 039 1 063 884 1 497 079 See Note 27 for information on assets pledged as security for financial liabilities. See Note 28 for specification of the Group's right-of-use assets and further information on its leases. 1Grants and other deductions to historic cost, of which NOK 26 million relates to government grants received in 2023 in Newfoundland. 2The Group leases vessels which are capitalized on the balance sheet as right-of-use assets. Some of these vessels are utilized in the development of the Newfoundland region. 3Reversal of impairment in 2023 related to Sechelt farming area in British Columbia. PART 03 - OUR FINANCIAL RESULTS 105 NOTE 15 IMPAIRMENT OF NON-FINANCIAL ASSETS ACCOUNTING POLICIES Assets with an indefinite useful life are not amortized but are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever there are indications that future earnings do not justify the carrying value. An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets, other than goodwill, that have suffered an impairment are reviewed for indicators of possible reversal of the impairment at each reporting date. ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The Group tests whether goodwill and licenses have suffered any impairment on an annual basis. The recoverable amounts of cash-generating units are generally determined on the basis of value-in-use calculations. 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. These calculations require the use of estimates of future cash flows from the cash-generating unit, and the application of a discount rate to calculate the present value of future cash flows. Expectations of future cash flows will vary over time. Changes in market conditions and expected cash flows can result in losses due to future value decreases. The value of long-term growth in demand, changes in market competition, the strength of the production stage in the value chain and thus also expectations of the long-term profit margin are also of significance. The different parameters could variously affect the value of the licenses over time. Any changes in these critical assumptions will result in related write-downs, or the reversal of write-downs of the value of licenses. IMPAIRMENT TESTING OF GOODWILL AND LICENSES value in use for Newfoundland is in line with previous years, and is applied due to Newfoundland being a region under development. During 2023, the second transfer of smolt to sea was successfully completed in Newfoundland. Additionally, we successfully commenced harvesting of the first generation of fish from the region. The quality of the fish was excellent. The second generation is healthy with good biological performance. The Group has carried out climate-related scenario analysis, assessing the scenarios of 2C global warming and 4C global warming (see Note 3). With 2C of global warming, Grieg Seafood’s business is well positioned to seize opportunities for sustainable growth. The 4C global warming scenario represents a risk for increased cost and lower earnings potential. In the impairment tests for year-end 2023, the scenarios have been considered. The uncertainty is high. The basis for the impairment test - the Group’s budget and business plans - look five years ahead (the explicit period applied in the impairment tests are three years for Rogaland, Finnmark and BC, while in Newfoundland 12 years is used such that production at full capacity is reflected in the terminal value). The explicit periods for the impairment tests represent in general a short time interval when considering nature and climate related risks, as the risk primarily has to be adjusted for in the terminal value. Additionally, time value of money through discounting also impact any quantifiable effect caused by climate-related risks. At year-end 2023, the Group’s budget and business plans are aligned towards the 2C global warming scenario. Overall, as disclosed in Note 3, Grieg Seafood expects the impacts of climate-related risks to be moderate in the short term, with no quantifiable impact as per year-end 2023. Assumptions used for estimating recoverable amount Rogaland Finnmark BC Newfoundland Budget period 3 years 3 years 3 years 12 years Revenue growth - growth from base year to terminal year 24% 97% 67% NA Operational EBITDA margin (1) 33%-36% 32%-38% 19%-30% 0% - 34% Operational EBITDA margin in terminal period Harvest growth (tonnes) - growth from base year to terminal year (2) Required rate of return before tax (3) Required rate of return after tax (3) Growth rate (4) 33% 21% 10.2% 8.0% 1% 38% 68% 10.2% 8.0% 1% 30% 41% 10.7% 7.8% 1% 34% NA 13.4% 9.4% 1% 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 regions during the budget period. Increase in harvest volume is assumed in all regions the next three years. 2. The growth rate for the harvest volume in the budget period (nominal growth rate) is measured against the 2023 volume. A corresponding increase in output is assumed over time. 3. Weighted required return on capital employed before and after tax. Cash flow forecasts are thus estimated after tax. In the calculation, the return on capital employed is also after tax. No impairments of goodwill or licenses were recognized in 2023. 4. Weighted average growth rate used to extrapolate cash flows beyond the budget period. In the years after 2026, the annual reinvestment is assumed to be equal to annual depreciation. 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 — 10 561 696 086 727 111 206 394 397 218 88 898 TOTAL 226 857 397 218 99 459 797 288 1 493 374 1 489 798 2 216 908 Impairment tests are initially based on the Group’s rolling five-year projections, which are also used in connection with the Group's liquidity planning. Future price levels are estimated by using Fish Pool forward prices as a basis, adjusted for other considerations such as quality reductions and shipping costs. The explicit period in the impairment test is three years for Rogaland, Finnmark and BC. Cash flows beyond the three-year period are extrapolated using the estimated growth rates stated below. The estimated growth rate corresponds to expected inflation. To test the Newfoundland operation for impairment, we estimated the FVLCD using a period of 12 years to reflect production at full capacity in the terminal year. Although production will increase at a slow pace in the first few years, it will pick up speed once the facilities are completed and more smolt are transferred to the sea. The methodology for estimation of the OPERATIONAL EBITDA-MARGIN IN THE BUDGET AND TERMINAL PERIOD The budgeted Operational EBITDA-margin is based on past performance, expected cost of production and expected market developments. An increase in gutted weight output is assumed towards 2026 (2035 for Grieg Seafood Newfoundland). The increased harvest volume assumes an increase in utilization of existing production capacity and licenses, reflecting the Group's post-smolt strategy and operational improvements. We expect further growth to come from better utilization of our seawater licenses by moving more growth to land through our post-smolt program. We are piloting post-smolt in Rogaland, and will increase post-smolt capacity also in Finnmark. Better utilization of our seawater licenses by improving biosecurity, fish health, welfare and survival rates, is also expected to secure on- growth and harvest volumes. Flexibility is a requirement to achieve better utilization of our capacity, and we are continuously looking for opportunities to secure access to new locations. The assumptions in the terminal year are based on the budget, adjusted for inflation. The applied discount rates are after tax and reflect specific risks relating to the relevant operating segments. PART 03 - OUR FINANCIAL RESULTS 106 SENSITIVITY ANALYSIS The assessment of fair value less cost of disposal and value-in-use is sensitive to changes in the assumptions made, the most important The Group owns, through Grieg Seafood Rogaland AS, 33.33% of Tytlandsvik Aqua AS, together with Bremnes Seashore AS (33.33%) and Vest Havbruk AS (33.33%). Tytlandsvik Aqua AS has an annual smolt production capacity of 6 000 tonnes, of which Grieg Seafood Rogaland of which are the discount rate and Operational EBIT/kg. A sensitivity analysis has been carried out based on these assumptions for AS is entitled to 50%. all groups of cost-generating units. An isolated increase in the discount rate by 1.5% percentage points would result in an estimated impairment for the Newfoundland operations of NOK 327 million, while a reduction of NOK 5 in Operational EBIT/kg for each year in the entire budget period and terminal would entail an estimated impairment for Newfoundland of NOK 254 million. The other cash- generating units (Rogaland, Finnmark and BC) are not sensitive to equivalent changes in the same assumptions. The Group owns, through Grieg Seafood Rogaland AS, 44.44% of Årdal Aqua AS together with Vest Havbruk AS and Omfar AS. Grieg Seafood Rogaland AS has provided an interest-bearing loan of NOK 6 million (NOK 6 million) to Årdal Aqua AS. The loan is classified as a non-current receivable in the statement of financial position (see Note 17). The construction of Årdal Aqua AS, a land based facility with the same design as Tytlandsvik Aqua AS, is progressing according to plan. Årdal Aqua AS is expected to produce at least 4 500 tonnes of See Alternative Performance Measures for more information on Operational EBIT, Operational EBIT/kg and Operational EBITDA. post-smolt annually from 2025. WRITE-DOWN OF TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS There was no impairment of tangible and intangible non-current assets in 2023, only a reversal of impairment of NOK 0.1 million from The Group owns, through Grieg Seafood Rogaland AS, 50.00% of NextSeafood AS. NextSeafood AS is owned together with Havbrukskompaniet AS and aims to explore and realize the closed containment system known as FishGLOBE V6. FishGLOBE AS was awarded two development licenses (1 560 tonnes MAB) in 2019. Grieg Seafood Rogaland AS has provided a long-term interest-free loan 2022 related to the discontinuing of farming operations in the shíshálh (Sechelt) area in BC. In 2022, Grieg Seafood recorded write-down to FishGLOBE AS (an affiliated company of NextSeafood AS) of NOK 8.6 million (NOK 8.6 million). The loan is classified as a non-current of tangible and intangible non-current assets totalling NOK 140 million related to reorganization of ownership structure of licenses in receivable in the statement of financial position (see Note 17). Following the resource rent tax in Norway, Grieg Seafood has put the Norway, and decommissioning of farming operations in BC. development of FishGLOBE V6 on hold. WRITE-DOWN ON TANGIBLE AND INTANGIBLE NON-CURRENT ASSETS NOK 1 000 Commercial aquaculture licenses in Rogaland, Norway Commercial aquaculture licenses in British Columbia, Canada Non-current tangible assets in British Columbia, Canada Total write-down - Of which total write-down of intangible non-current assets Note 13 13 14 2023 — — -136 -136 — 2022 47 242 88 451 4 382 140 074 135 693 NOTE 16 INVESTMENT IN ASSOCIATED COMPANIES AND JOINT VENTURES ACCOUNTING POLICIES The Group’s investments in associated companies and joint ventures are recognized in the consolidated financial statement according to the equity method. Associates and joint ventures that are closely related to the Group's operations and included in the Group’s value chain are classified on a separate line in the income statement and included in the subtotal of EBIT (Earnings before interests and taxes) when the relevant associates operate in the same position in the value chain as the Group (see Note 5). All investments in associates in 2023 and 2022 are closely related. The carrying value of the investment is classified on a single line item included in the subtotal of non-current assets in the statement of financial position. Set out below are the associated companies and joint ventures of the Group as at 31 December 2023. The entities listed below have share capital consisting solely of ordinary shares, which are held directly by the Group. The country of incorporation or registration is also their principal place of business, and the proportion of ownership interest is the same as the proportion of voting rights held. All investments in associates and joint ventures have the same financial year as the Group. The Group owns, through Grieg Seafood Finnmark AS, 50.00% of Nordnorsk Smolt AS together with SalMar ASA (50.00%). At 31 December 2023, Grieg Seafood Finnmark AS has an outstanding interest-bearing long-term loan to Nordnorsk Smolt AS of NOK 26.5 million (NOK 2.3 million at 31 December 2022). The loan is classified as a non-current receivable in the statement of financial position (see Note 17). Nordnorsk Smolt AS is located in Troms and Finnmark county in Northern Norway, and has an annual production capacity of 900 tonnes. There was no production in the facility during the first half of 2023 due to a redesign of the facility. Nordnorsk Smolt AS commenced operations in the second half of 2023, and will be fully operational in 2024. PART 03 - OUR FINANCIAL RESULTS Specification of excess values included in the equity method accounting for investments in associates and joint ventures: INVESTMENT IN ASSOCIATES AND JOINT VENTURES PLACE OF BUSINESS / COUNTRY OF INCORPORATION EQUITY INTEREST AT 31.12.2023 BOOK VALUE AT 01.01.2023 NOK 1 000 PROFIT/LOSS 2023 NOK 1 000 CHANGES IN THE PERIOD, INCL. REPAID CAPITAL NOK 1 000 BOOK VALUE AT 31.12.2023 NOK 1 000 Nordnorsk Smolt AS Troms and Finnmark County, Norway Tytlandsvik Aqua AS Rogaland County, Norway Årdal Aqua AS Rogaland County, Norway Nextseafood AS Rogaland County, Norway 50.00% 33.33% 44.44% 50.00% Total 39 053 55 951 114 047 7 574 216 624 -9 343 2 264 121 — -6 957 — — — — — 29 710 58 215 114 168 7 574 209 667 Specification of excess values included in the equity method accounting for investments in associates and joint ventures: AT 31.12.2023 Nordnorsk Smolt AS Tytlandsvik Aqua AS Årdal Aqua AS* Nextseafood AS Total ownership TIME OF INVESTMENT EQUITY INTEREST EXCESS VALUE HATCHERY NOK 1 000 DEPRECIATION OF EXCESS VALUE NOK 1 000 BOOK VALUE OF EXCESS VALUE NOK 1 000 01.07.2019 01.06.2017 15.01.2020 31.01.2022 50.00% 33.33% 44.44% 50.00% 17 022 14 600 17 634 — 49 257 7 660 6 134 — — 13 794 9 362 8 466 17 634 — 35 463 *Depreciation of the excess values in Årdal Aqua will start when the facility of Årdal Aqua is constructed and production has commenced. The following table displays provisional financial information at 31 December 2023 (100%). AT 31.12.2023 NOK 1 000 TOTAL ASSETS TOTAL LIABILITIES TOTAL EQUITY OPERATING INCOME PRE-TAX PROFIT/LOSS Nordnorsk Smolt AS Tytlandsvik Aqua AS Årdal Aqua AS Nextseafood AS 125 099 746 748 707 436 15 149 88 016 596 389 490 213 — 39 084 150 359 217 223 15 149 25 752 298 620 2 006 — -19 395 13 742 218 — 107 Specification of book value of the investments in associates and joint ventures according to the equity method: NOTE 17 OTHER NON-CURRENT RECEIVABLES INVESTMENT IN ASSOCIATES AND JOINT VENTURES PLACE OF BUSINESS / COUNTRY OF INCORPORATION EQUITY INTEREST AT 31.12.2022 BOOK VALUE AT 01.01.2022 NOK 1 000 PROFIT/LOSS 2022 NOK 1 000 CHANGES IN THE PERIOD, REPAID CAPITAL NOK 1 000 BOOK VALUE AT 31.12.2022 NOK 1 000 Nordnorsk Smolt AS Troms and Finnmark County, Norway Tytlandsvik Aqua AS Rogaland County, Norway Årdal Aqua AS Rogaland County, Norway NextSeafood AS Total Rogaland County, Norway 50.00% 33.33% 44.44% 50.00% 47 710 48 087 8 878 — 104 675 -8 658 7 864 21 915 -26 21 096 — — 39 053 55 951 83 254 114 047 7 600 90 854 7 574 216 624 Specification of excess values included in the equity method accounting for investments in associates and joint ventures: OTHER NON-CURRENT RECEIVABLES NOK 1 000 Loan to associated company (interest- and non-interest bearing) Investments in shares Other non-current receivables Total NOTE 16 31 2023 41 129 402 806 2022 16 900 271 764 42 337 17 935 NOTE 18 INVENTORIES AT 31.12.2022 Nordnorsk Smolt AS Tytlandsvik Aqua AS Årdal Aqua AS NextSeafood AS Total ownership TIME OF INVESTMENT EQUITY INTEREST EXCESS VALUE HATCHERY NOK 1 000 DEPRECIATION OF EXCESS VALUE NOK 1 000 BOOK VALUE OF EXCESS VALUE NOK 1 000 ACCOUNTING POLICIES 01.07.2019 01.06.2017 15.01.2020 31.01.2022 50.00% 33.33% 37.04% 50.00% 17 022 14 600 17 634 — 49 257 5 958 4 674 — — 11 064 9 926 17 634 — 10 632 38 625 Inventories are stated at the lower of historical cost and net realizable value. Cost are determined by FIFO (first in, first out), with the exceptions being weighted average cost for feed, and broodstock and roe. The net realizable value is the estimated sales price less the estimated costs of completion and sale. Biological assets are classified on a separate financial statement line item in the statement of financial position. See Note 19 for The following table displays provisional financial information at 31 December 2022 (100%). AT 31.12.2022 NOK 1 000 TOTAL ASSETS TOTAL LIABILITIES TOTAL EQUITY OPERATING INCOME PRE-TAX PROFIT/LOSS Nordnorsk Smolt AS Tytlandsvik Aqua AS Årdal Aqua AS NextSeafood AS 91 295 623 770 220 614 15 149 36 227 485 682 3 665 — 55 068 138 088 216 949 15 149 195 322 999 — — -13 911 34 631 -1 449 -45 more information. INVENTORIES NOK 1 000 Raw materials (feed) at cost price Broodstock and roe Other (goods in transit, frozen fish, supplementary products) Total inventories Write-down of inventories recognized in the statement of financial position at year-end Write-down of inventories recognized in the income statement for the year* *The impairments of inventories for the year where related to broodstock and roe. See Note 27 for information on assets pledged as security for financial liabilities. COST OF RAW MATERIALS AND CONSUMABLES PURCHASED NOK 1 000 Inventories at 01.01. (inverted number) Raw materials and consumables purchased Inventories at 31.12. Total 2023 132 198 25 027 72 828 230 053 — 34 620 2023 -240 172 -2 737 825 230 053 2022 105 585 41 219 93 368 240 172 — 507 2022 -128 299 -2 345 528 240 172 -2 747 944 -2 233 655 The item raw materials and consumables mainly comprises feed, roe, recognition of extraordinary mortality and external purchases of fish by our sales organization. PART 03 - OUR FINANCIAL RESULTS 108 NOTE 19 BIOLOGICAL ASSETS ACCOUNTING POLICIES Biological assets are recognized in the statement of financial position at their fair value less cost to sell. The fair value of biological assets are measured according to level 3 of the fair value hierarchy, based on factors not drawn from observable market rates and -prices. The fish are divided into two main groups, depending on the stage of the life cycle. At the earliest stage of the life cycle, the fish are kept on land in freshwater facilities, This group encompass roe, fry and smolt. When the fish are large enough to be transferred to the sea, they are classified as biomass in sea. In accordance with application of highest and best use when estimating the fair value of live fish, Grieg Seafood considers that the fish have optimal harvest weight when they have a live round weight of 4.60 kg, which corresponds to 4.00 kg gutted weight. Fish with a live round weight of 4.60 kg or more are classified as ready for harvest (mature fish), while fish with an weight less than 4.60 kg are classified as not ready for harvest (immature fish). Fish onshore (smolt) are recognized at accumulated cost, which is considered the best estimate of fair value because of very little biological transformation. This assessment must be seen in the light of the fact that smolt are currently transferred to the sea at a stage when their weight is still relatively low. For fish in sea, the fair value is calculated by applying a cash-flow based present value model. The measurement unit is the individual fish. However, for practical reasons, cash flows and estimates are carried out per locality. When estimating the fair value of the fish, a cash flow model is applied. The cash-flow based present value model for estimating the fair value less cost to sell 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 willing to pay the present value of the estimated future profit from the sale of the fish when it is ready for harvest. The estimated future profit, considering all price adjustments and payable fees for completion, constitutes the cash flow. No deductions are made for sales expenses, as these are not observable in the market. Such expenses are also deemed immaterial. Incoming cash flow is calculated as a function of estimated volume multiplied by estimated price. For fish not ready for harvest, a deduction is made to cover estimated residual costs to grow the fish to harvestable weight. The cash flow is discounted monthly by a discount rate. The discount rate comprises three main components: 1) the risk of incidents that influence cash flow, 2) hypothetical license lease and 3) the time value of money. The sales price for fish in the sea is based on the forward price from Fish Pool. Fish Pool is a marketplace for financial purchase and sale agreements for superior Norwegian Salmon size 3-6 kg head-on gutted weight. The volume on Fish Pool is limited, but Grieg Seafood’s opinion is that the observable forward prices must be seen as the best approach to a price for the sale of salmon as there are limited alternative observable prices in the market. Regarding foreign countries, the most relevant price information available for the expected harvesting period is applied. For fish in the sea, the forward price in Norway is adjusted for historical differences in achieved prices between Norway and Canada. The price/ net sales value is adjusted for quality differences (superior, ordinary and production grade), and for logistics expenses and sales commissions. Estimated harvesting expenses are deducted. OPENING TO CLOSING BALANCE RECONCILIATION OF THE CARRYING VALUE OF BIOLOGICAL ASSETS BIOLOGICAL ASSETS Biological assets at 01.01. 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 at 31.12. Biological assets at 31.12. TONNES NOK 1 000 2023 50 614 NA 94 144 -3 801 2022 2023 2022 59 121 4 045 800 3 449 412 NA 58 707 36 945 93 087 -3 408 5 563 616 4 348 288 -294 832 -224 924 -82 776 -98 186 -4 487 742 -3 743 033 NA NA NA NA -1 149 591 -970 480 1 329 761 1 149 591 58 181 50 614 5 065 718 4 045 800 See Note 27 for information on assets pledged as security for financial liabilities. Tonnes is provided in live round weight. SPECIFICATION OF THE CARRYING VALUE OF BIOLOGICAL ASSETS 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 27 227 28 854 3 262 59 343 17 680 26 562 1 648 45 890 541 39 784 17 857 58 181 547 41 614 8 453 50 614 265 069 2 497 747 973 142 — 265 069 943 998 385 763 3 441 745 1 358 905 3 735 957 1 329 761 5 065 718 181 569 2 370 985 343 655 — 181 569 934 708 214 883 3 305 693 558 537 2 896 209 1 149 591 4 045 800 STATUS OF BIOLOGICAL ASSETS 2023 Biological assets on land * Immature fish at sea, round weight < 4.60 kg Mature fish at sea, round weight > 4.60 kg Total 2022 Biological assets on land * Immature fish at sea, round weight < 4.60 kg Mature fish at sea, round weight > 4.60 kg Total * Smolt production ABNORMAL MORTALITY ACCOUNTING POLICIES Fish farming naturally comes with a certain level of loss of fish along the production cycle, and our budgets are typically produced with an inherent assumption of a 0.5-1% monthly mortality. The losses associated with normal levels of survival are not directly recognized in the income statement. In periods where specific abnormal incidents lead to reduced survival, we immediately recognize write-downs of the biomass inventory to better reflect the actual biomass in the sea or on land. The write-down costs When estimating the actual accumulated cost at the respective seawater facility, direct costs (fish feed and similar) are allocated to are recorded in the income statement as they arise, included in the financial statement line item “raw materials and consumables each group of fish transferred to the sea at the same location. Financial costs are not included in the costs of production. used”. The volume (biomass) is based on the actual number of individuals in the sea at the balance sheet date, adjusted to cover estimated mortality up to harvest date and multiplied by the estimated harvest weight per individual at the time of harvest. The fair value estimate for the fish in sea figure is adjusted for gutting waste, as the price is measured for gutted weight. Budgeted harvesting and freight costs are applied. Foreign currency forward contracts associated with the date of harvesting are applied when translating the price to CAD. 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 for opening-to-closing balance reconciliation as disclosed above. Normal mortality is classified as part of the production cost. The classification of mortality only affects the note presentation, and not the fair value calculation. Abnormal mortality in 2023 is related to winter ulcers, Spironucleus salmonicida (Spiro), sea lice treatment and gill disease. PART 03 - OUR FINANCIAL RESULTS 109 ABNORMAL MORTALITY - WRITE-DOWN 2023 Immature fish in sea, round weight < 4.60 kg Mature fish in sea, round weight > 4.60 kg Total abnormal mortality in sea Biological assets onshore Total abnormal mortality 2022 Immature fish in sea, round weight < 4.60 kg Mature fish in sea, round weight > 4.60 kg Total abnormal mortality in sea Biological assets onshore Total abnormal mortality NUMBER OF FISH 1 000 BIOLOGICAL ASSETS TONNES AVERAGE SIZE KG WRITE-DOWN NOK 1 000 1 832 102 1 934 2 290 85 2 374 3 278 523 3 801 2 994 414 3 408 1.79 5.13 1.97 1.31 4.89 1.44 197 750 23 865 221 615 73 217 294 832 154 694 16 983 171 677 53 247 224 924 FAIR VALUE ESTIMATE AND RECOGNIZED FAIR VALUE ADJUSTMENT TO THE BIOLOGICAL ASSETS ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY Discount rate The sales revenue and remaining expenses are allocated to the same period in which the fish is harvested. The cash flows from all localities where the Group has fish in the sea will then be distributed over the entire period it takes to farm the fish in the sea. With the current size of the smolt released and the frequency of the smolt transfers, this period may be from 12 to 18 months. The discount rate considers both risk adjustment (risk related to volume, cost and price), compensation for the value of the licenses (hypothetical rent) and time value (tying up capital). The reason for differentiating the discount rate at the regional level is the different prerequisites for biological production, which also requires a differentiation of the recognized synthetic license rent. The risk adjustment shall reflect the price discount a hypothetical buyer would demand as compensation for the risk assumed by investing in live fish rather than a different object. The longer it takes to reach harvest date, the higher the risk that something may occur that will affect the cash flow. Three significant factors could have an impact on the cash flow: volume, costs and price. The one thing all three factors have in common is that the sample space is asymmetrical. Due to limited access to licenses for the farming of fish, the license value is currently considered to be very high. For a hypothetical buyer of live fish to take over and continue to farm the fish, the buyer needs a license, locality and other permits required for such production. However, in a hypothetical market for the purchase and sale of live fish, one must assume that this would be possible. In that scenario, a hypothetical buyer would claim a significant discount to allocate a sufficient share of the returns to the buyer's own licenses. It is difficult to create a model that would allow a hypothetical annual lease cost to be derived from prices for sold licenses as the curve in the model would be based on projections of future profit performance in the industry. 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 to the biomass. The buyer who is investing in live fish rather than some other type of object, 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 harvest weight. The cost increases for every month the fish are in the sea. As such, the effect The fair value model assessed by the Group calculates the net present value of expected cash flow. Valuation is based on a variety of deferred cash flow is lower than would be the case if the cash flow had been constant. This component is, however, deemed of premises, many of which are non-observable. For mature fish (ready for harvesting) on the reporting date, uncertainty mainly important due to the substantial value the stock of fish represents. fish. The forward prices for superior Norwegian salmon weighing 3-6 kg gutted weight from Fish Pool are applied. For fish ready Change in physical delivery contracts relating to fair value adjustment of biological assets2 involves realized prices and volume. For immature fish (not ready for harvesting), the level of uncertainty is generally higher. Price, volume and discount rate are the main uncertainty factors. However, uncertainty is also related to biological transformation and mortality prior to the harvest date for the fish. Sales price Salmon sales prices are volatile. The sales price is based on forward prices and/or the most relevant pricing information available for the period in which the fish is expected to be mature (ready for harvesting). Changes in price assumptions have the greatest impact on the fair-value estimate. The market price constitutes the basis for calculating fair value for both mature and immature for harvest, the forward price for the following month is applied. For fish not ready for harvest, the forward price for the month when the fish is expected to be harvested is applied. Estimating remaining production cost The planned point of harvesting is assumed to be when the fish reaches a live round weight of 4.60 kg, however, there may be uncertainty regarding the estimated growth rate. For immature fish, the fair value is adjusted by the estimated remaining cost necessary to grow the fish to optimal harvest weight. Forecast production costs include provisions for estimated feed prices, the cost of lice treatments and other costs to prevent biological accidents. Here, estimations are affected by uncertainty regarding the number of lice treatments to be carried out, the sea temperature and other conditions affecting growth and costs. Volume Estimated harvest volume is based on the estimated number of fish on the reporting date, less estimated future mortality multiplied by optimal harvest weight (4.60 kg round weight). 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. The estimated number of fish is based on the number of smolt transferred to the sea, and mortality is a given percentage of the fish in the sea. The normal estimated harvest weight is assessed to be the live round weight of fish that results in a gutted weight of 4.0 kg. If there are any specific conditions at the reporting date resulting in the fish being harvested before they reach optimal weight, the estimated harvest weight is adjusted. Mortality during the period from the reporting date to the date when the fish reach harvest weight is estimated to be 1% of the number of opening balance of fish per month in the forecast period. Biological assets are measured at fair value, unless the fair value cannot be measured reliably. The change in the fair value of biological assets is recognized in the income statement as “fair value adjustment of biological assets”. The table below summarizes the components of the fair value adjustment recognized in the income statement for the year. RECOGNIZED FAIR VALUE ADJUSTMENT IN THE INCOME STATEMENT NOK 1 000 Change in fair value adjustment of biological assets1 Change in fair value of financial derivatives from salmon (Fish Pool contracts)3 Total recognition of fair value adjustment of biological assets Recognized value adjustments of biological assets include: 1 Fair value adjustments of biological assets 2 Fair value (liability) change in loss-making contracts 3 Change in unrealized gains/losses from financial purchases/sales contracts (derivatives) from fish at Fish Pool 2023 156 557 -1 846 63 211 217 922 2022 129 331 -1 610 -44 309 83 412 Changes arising from physical delivery contracts are recognized as “fair value adjustment of biological assets”. The provision relates to onerous contracts for delivery of salmon, where the expenses of fulfilling the contracts are higher than the economic yield the company expects to gain by fulfilling the contracts. As biological assets are recognized at fair value, the fair value adjustments of the biological assets will be included in the estimated expenses required to fulfil the contract. The contracts are calculated based on the same forward prices used for the fair value calculation of biological assets. This implies that the Group may experience loss-making (onerous) contracts according to IAS 37 even if the contract price for physical delivery contracts is higher than the actual production cost for the products. If that occurs, a provision is made for the estimated negative value. The liability in the statement of financial position is recognized as other current liabilities, see Note 29. Changes in the value of salmon-related financial derivatives are recognized in the balance sheet under derivatives and other financial instruments. Financial derivatives are calculated at market value. See Note 31 for further information. PART 03 - OUR FINANCIAL RESULTS 110 BASIS FOR VALUES - WEIGHTED PRICE PER KG GWT 31.12.2023 31.12.2022 Source NORWAY 95.84 84.06 BRITISH COLUMBIA NEWFOUNDLAND 14.28 12.83 12.79 11.66 Fish Pool Fish Pool Fish Pool Forward prices from Fish Pool are adjusted for expected quality reductions and stated before logistics expenses. The standard deduction for quality reduction is applied. Forward prices are weighted in relation to the intended harvesting period. The price for British Columbia and Newfoundland is based on the forward price in Norway, adjusted for historical differences in price levels between Norway and Canada. Forward exchange rates are used to translate prices into CAD in relation to the harvesting period. The estimated future cash flow is discounted by a monthly rate, which is assessed individually for each region. The discount rate reflects a combination of the cost of capital for the biological assets, risk adjustment (the risk related to volume, cost and price of the biological assets) and a synthetic license rent. The discount rate is differentiated to take account of each region’s different prerequisites for biological production, which also results in a differentiation of the recognized synthetic license rent. See the table below for the applied discount rates per region. DISCOUNT RATE PER REGION Rogaland Finnmark British Columbia Newfoundland 2023 5.0% 5.0% 3.5% 3.5% 2022 5.0% 5.0% 3.5% 3.5% 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, the time value of money and the cost of contributory assets. The following table is a sensitivity analysis, showing the change in the fair value of the biological assets, and hence the Group’s profit before tax, in the event of changes in these parameters. The estimate of fair value of the biomass will always be based on uncertain assumptions, even though the Group has built up expertise in assessing these factors. 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 2023 2022 -215 696 -175 527 264 132 82 860 -70 722 409 732 207 074 69 555 -68 073 357 629 -359 003 -325 903 62 821 -50 824 54 202 -53 427 PART 03 - OUR FINANCIAL RESULTS 111 NOTE 20 TRADE RECEIVABLES ACCOUNTING POLICIES Trade receivables arising from the trading of goods or services within the ordinary operating cycle and under normal terms of payment are initially recognized at nominal value. The Group is engaged in factoring agreements that cover financing of outstanding receivables for the sales organization in Norway. Generally, a financial asset is derecognized from the statement of financial position when either the rights to receive cash flows from the asset have expired, or the Group has transferred its right to receive cash flows from the asset, preconditioned that the Group has transferred substantially all risks and rewards, or control, of the financial asset to a third party. 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 all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. Losses on receivables are classified as other operating expenses in the income statement. For trade receivables, the Group applies a simplified approach in calculating expected credit loss (ECL). In the Group's expected credit ECL 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 consists of some receivables that have other types of security. The risk evaluation is based on our own experience and input from credit insurance companies. A loss allowance is calculated as a percentage of the aging distribution (days past due). The Group also makes manual accruals if significant information implies that 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) 31.12.2023 Regular/normal risk countries High risk countries Total TR Credit insured 520 137 27 925 336 869 169 204 12 480 TR Unsecured 82 117 81 261 21 591 17 934 21 370 TR Credit insured TR Unsecured 975 — — — 975 — — — — — 293 412 — — 1 291 5 364 — 520 137 15 445 82 117 — — — — 975 — 603 229 109 187 359 434 187 139 33 850 705 6 655 15 445 603 229 LOSS ALLOWANCE 31.12.2023 TR Credit insured TR Unsecured TR Credit insured TR Unsecured Regular/normal risk countries High risk countries Total NOK 1 000 — — — — — 27 925 81 261 — — 132 244 2 1 — 7 — — 109 187 135 251 94 28 — — 122 5 202 — — 3 — 478 4 389 14 365 18 993 — — — — 1 — 207 4 392 14 365 19 472 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 there is a higher risk of losses. Around 5% credit risk also remains for the factored trade receivables. The aging analysis given AGING PROFILE OF TRADE RECEIVABLES (TR) 31.12.2022 below is therefore based on the total receivables rather than total receivables less the factored receivables. For more information about credit risk, refer to Note 4. TRADE RECEIVABLES NOK 1 000 Gross amount of trade receivables Trade receivables deducted* Loss allowance Trade receivables at 31.12. *Trade receivables bought by the factoring company. See Note 4 for a specification of the carrying value per currency. See Note 27 for information on assets pledged as security for financial liabilities. RECOGNIZED LOSSES ON TRADE RECEIVABLES RECOGNIZED LOSSES NOK 1 000 Change in loss allowance Confirmed losses in the year Total recognized losses on receivables 2023 603 229 -256 597 -19 472 327 160 2022 690 226 -416 053 -15 036 259 137 2023 4 436 — 4 436 2022 71 33 104 Regular/normal risk countries High risk countries Total TR Credit insured 615 863 — 486 463 121 035 6 332 TR Unsecured 59 939 61 444 33 057 1 550 10 898 TR Credit insured 11 583 — TR Unsecured 2 841 2 839 5 399 2 839 5 732 2 474 — 381 601 — — 1 616 36 615 863 60 13 773 59 939 -22 — — — 11 583 2 841 690 226 64 283 527 757 128 319 17 704 982 1 655 13 809 690 226 LOSS ALLOWANCE 31.12.2022 TR Credit insured TR Unsecured TR Credit insured TR Unsecured Regular/normal risk countries High risk countries Total — — — — — — 61 444 — 2 839 64 283 271 8 3 2 283 8 — 16 — 25 316 — 12 — 328 79 — — — 79 512 — — — 36 1 223 13 773 13 780 — — 31 2 512 13 809 15 036 PART 03 - OUR FINANCIAL RESULTS 112 NOTE 21 OTHER CURRENT RECEIVABLES NOTE 24 SHARE CAPITAL AND SHAREHOLDER INFORMATION OTHER CURRENT RECEIVABLES NOK 1 000 VAT receivable Prepaid expenses Other current receivables Total NOTE 22 INVESTMENT IN MONEY MARKET FUNDS 2023 80 968 58 656 31 625 2022 87 431 44 113 25 515 As at 31 December 2023, 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 31.12.2023 NOMINAL VALUE PER SHARE (NOK) TOTAL SHARE CAPITAL NOK 1 000 NO. OF ORDINARY SHARES 171 249 157 060 Total Holdings of treasury shares Total excl treasury shares 4.00 4.00 4.00 453 788 -5 255 448 533 113 447 042 1 313 654 112 133 388 Treasury shares Grieg Seafood ASA hold treasury shares in connection to its share saving program for employees. The latest sale of treasury shares from the company to employees was in December 2023, as 107 473 treasury shares was sold through the share saving program. As at 31 December 2023, the company has 1 313 654 treasury shares. In 2022, 96 150 shares was sold to employees through the share savings program at an average price of NOK 71.10. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 has been settled within year-end 2022 and the remainder was settled in January 2023. INVESTMENT IN MONEY MARKET FUNDS NOK 1 000 NOTE 2023 Investment in money market funds Unrealized gain/loss Total investment in money market funds Realized fair value gains (losses) recognized in the income statement Unrealized fair value gains (losses) recognized in the income statement 11 11 — — — 41 461 -12 624 2022 1 000 224 12 624 1 012 848 — 12 624 In 2022, the Group temporarily placed surplus liquidity funds in money market funds. The entire investment has been exited as per year- end 2023. The Group did not invest directly in bonds or securities, but through units in established money market funds. All three funds held in the investment portfolio as per 31 December 2022 were money market funds that invested in bonds and securities with short time to maturity in the Norwegian market. NOTE 23 CASH AND CASH EQUIVALENTS ACCOUNTING POLICIES Cash and cash equivalents include cash in hand, bank deposits and other short-term highly liquid investments with original THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA Grieg Aqua AS OM Holding AS Folketrygdfondet Ystholmen Felles AS Clearstream Banking S.A. (Nominee) State Street Bank and Trust Comp (Nominee) State Street Bank and Trust Comp (Nominee) Grieg Seafood ASA BNP Paribas (Nominee) maturities of three months or less. The overdraft facility is included in current borrowings in the statement of financial position. JPMorgan Chase Bank, N.A., London (Nominee) CASH AND CASH EQUIVALENTS NOK 1 000 Restricted deposits incl. employee tax deductions Other cash and bank deposits Total 2023 1 000 215 318 216 318 2022 1 000 641 719 642 719 The Group has two multi-currency group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company, is the legal account holder. One of the cash-pool agreements do have a multi-currency overdraft facility of NOK 200 million, which is utilized with NOK 63 million at year-end 2023. See Note 27 for more information. The subsidiaries that are part of the agreement can utilize the group cash pool arrangement provided that the arrangement without overdraft cannot be net negative, and that the arrangement with overdraft facility can not exceed negative NOK 200 million. Not all subsidiaries are part of the cash pool arrangement. The 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 2023, the net amount of bank deposits in the group account scheme amounted to NOK 26 million (2022: NOK 524 million). At the same time, unutilized overdraft facility was NOK 137 million (NOK 200 million), in addition to unutilized revolving credit facility of NOK 750 million (NOK 1 500 million). See Note 4 for a specification of the carrying value per currency. See Note 27 for information on the Group’s available credit facilities. PART 03 - OUR FINANCIAL RESULTS Sparebank 1 Markets AS Frøy Kapital AS J.P. Morgan SE (Nominee) State Street Bank and Trust Comp (Nominee) Kvasshøgdi AS Bank Pictet & Cie (Europe) AG (Nominee) Six Sis AG (Nominee) BNP Paribas (Nominee) Skandinaviska Enskilda Banken AB (Nominee) State Street Bank and Trust Comp (Nominee) Total 20 largest shareholders Total others Total number of shares NO. OF SHARES SHAREHOLDING 31.12.2023 31.12.2023 56 914 355 50.17% 5 160 982 2 419 585 1 923 197 1 615 271 1 512 715 1 435 586 1 313 654 1 192 532 1 171 727 1 159 872 1 116 323 1 105 349 1 078 185 996 772 921 918 853 102 842 579 800 350 753 837 4.55% 2.13% 1.70% 1.42% 1.33% 1.27% 1.16% 1.05% 1.03% 1.02% 0.98% 0.97% 0.95% 0.88% 0.81% 0.75% 0.74% 0.71% 0.66% 84 287 891 29 159 151 113 447 042 74.30% 25.70% 100.00% 113 THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA Grieg Aqua AS OM Holding AS Folketrygdfondet Ystholmen Felles AS State Street Bank and Trust Comp (Nominee) State Street Bank and Trust Comp (Nominee) Morgan Stanley & Co. Int. Plc. (Nominee) Clearstream Banking S.A. (Nominee) Grieg Seafood ASA JPMorgan Chase Bank, N.A., London (Nominee) Gåsø Næringsutvikling AS Kvasshøgdi AS Ferd AS State Street Bank and Trust Comp (Nominee) DZ Privatbank S.A. (Nominee) J.P. Morgan SE (Nominee) Danske Invest Norge Vekst Six Sis AG (Nominee) J.P. Morgan SE (Nominee) DNB Bank ASA (Broker) Total 20 largest shareholders Other shareholders Total shares NO. OF SHARES SHAREHOLDING 31.12.2022 31.12.2022 56 914 355 50.17% SHARES CONTROLLED DIRECTLY AND INDIRECTLY BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT 31.12.2023 31.12.2023 31.12.2022 31.12.2022 NO. OF SHARES SHAREHOLDING NO. OF SHARES SHAREHOLDING 5 110 982 2 939 985 1 923 197 1 717 439 1 692 877 1 470 346 1 376 622 1 351 811 1 136 470 1 116 323 996 772 924 407 724 407 698 518 687 236 540 000 534 229 526 442 482 561 4.51% 2.59% 1.70% 1.51% 1.49% 1.30% 1.21% 1.19% 1.00% 0.98% 0.88% 0.81% 0.64% 0.62% 0.61% 0.48% 0.47% 0.46% 0.43% 82 864 979 30 582 063 73.04% 26.96% 113 447 042 100.00% BOARD OF DIRECTORS Per Grieg * Tore Holand ** Marianne Ribe Katrine Trovik Nicolai Hafeld Grieg * Ragnhild Janbu Fresvik (board member from 9 June 2022) GROUP MANAGEMENT Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Alexander Knudsen (Chief Operating Officer Farming Norway) Grant Cumming (Chief Operating Officer Farming Canada)*** Erik Holvik (Chief Commercial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Nina Stangeland (Chief Strategy Officer)*** Kristina Furnes (Chief Communications Officer) 2 877 206 3 160 — — 2 117 289 — 44 372 28 015 24 272 9 857 11 135 25 614 15 833 — 5 167 2.54% 0.00% —% —% 1.87% —% 0.04% 0.02% 0.02% 0.01% 0.01% 0.02% 0.01% —% 0.00% 2 877 206 2 000 — — 2 117 289 — 40 513 25 556 23 513 NA 8 831 24 855 15 074 NA 4 711 2.54% 0.00% —% —% 1.87% —% 0.04% 0.02% 0.02% NA 0.01% 0.02% 0.01% NA 0.00% *Per Grieg and Nicolai Hafeld Grieg both own indirectly in Grieg Seafood ASA through their indirect ownership in Grieg Maturitas II AS (see Note 1). Grieg Maturitas II AS owns 100% of Grieg Aqua AS, which is the largest shareholder in Grieg Seafood ASA representing 50.17% of the shares. Additionally, both Per Grieg and Nicolai Hafeld Grieg is represented in the Board of Directors of Grieg Maturitas II AS. Together, Per Grieg and Nicolai Hafeld Grieg therefore represents, through their indirect ownership and board representation in Grieg Maturitas II AS, 50.17% of the shares in Grieg Seafood ASA through Grieg Aqua AS. Additionally, Per Grieg has further ownership interests in Grieg Seafood ASA through shares invested privately and through Kvasshøgdi AS, bringing the total percentage of shares in Grieg Seafood ASA represented by Per Grieg to 51.06%. **Tore Holand owns shares in Grieg Seafood ASA through shares invested in Skippergata 24 AS as well as shares invested privately. ***Grant Cumming and Nina Stangeland were appointed to Group Management in 2023. PART 03 - OUR FINANCIAL RESULTS 114 NOTE 25 CONTINGENT CONSIDERATION, OTHER EQUITY AND RETAINED EARNINGS RETAINED EARNINGS CONTINGENT CONSIDERATION ACCOUNTING POLICIES Equity-classified contingent consideration is measured initially at fair value on the acquisition date and is not remeasured subsequent to initial recognition. Settlement of the equity-classified contingent consideration is accounted for within equity. On 15 April 2020, Grieg Seafood ASA completed the acquisition of Grieg Seafood Newfoundland AS, which is the holding company for the farming operations in the Newfoundland region. On the date the acquisition was completed, 99% of the shares in Grieg Seafood Newfoundland AS were transferred, while the remaining 1% is subject to a put/call option accounted for and included in the contingent consideration (classified as equity) of the acquisition. Through the acquisition, a contingent consideration of NOK 702 million was recognized. Depending on the planned production volume within the first 10 years following the transaction, additional payments may be triggered. The additional amount becomes unconditional when Newfoundland has reached an annual harvest volume of 15 000 tonnes, and the amount increases with planned volume until an annual harvest volume of 33 000 tonnes. The amount due is NOK 43 per kg for volumes between 15 000 and 20 000 tonnes, and NOK 55 per kg for volumes between 20 000 and 33 000 tonnes, with a 4% per annum inflation adjustment from the calendar year 2023. SPECIFICATION OF RETAINED EQUITY NOK 1 000 Book value at 01.01.2022 Changes in 2022 Book value at 31.12.2022 Changes in 2023 Book value at 31.12.2023 EFFECT OF SHARE-BASED REMUNERATION PURCHASE/ SALES OF TREASURY SHARES * ACCUMULATED INCOME LESS ACCUMULATED DIVIDEND TOTAL 1 094 — 1 094 — 1 094 -2 020 4 344 929 4 344 002 -22 229 -24 249 816 839 794 610 5 161 767 5 138 612 6 912 55 631 62 543 -17 337 5 217 398 5 201 155 * The amount classified under "purchase of treasury shares" equals the cost price in excess of nominal value. NOTE 26 EARNINGS PER SHARE AND DIVIDEND PER SHARE ACCOUNTING POLICIES The contingent consideration is classified as equity. It is in Grieg Seafood’s sole discretion to decide when to make the expansion Earnings per share are calculated by allocating the profit for the year to the company’s shareholders based on a weighted average investments and increase production. OTHER EQUITY SPECIFICATION OF ACCUMULATED OTHER COMPREHENSIVE INCOME NOK 1 000 Book value at 01.01.2022 Changes in 2022 Book value at 31.12.2022 Changes in 2023 Book value at 31.12.2023 CHANGES IN FAIR VALUE OF EQUITY INSTRUMENTS CURRENCY EFFECT ON LOANS TO SUBSIDIARIES CURRENCY EFFECT ON INVESTMENT IN SUBSIDIARIES -37 — -37 — -37 -29 010 19 338 -9 672 22 451 12 780 97 553 109 336 206 888 98 316 305 204 TOTAL 68 506 128 674 197 180 120 767 317 947 The holding companies in the Group extend current and non-current loans to the subsidiaries, denominated in these companies’ functional currencies. The non-current loans, with some exceptions, are considered to be equity in these companies, as there is no planned repayment of the principal amount outstanding. The currency effect of loans is recognized under "currency effect on loans to subsidiaries" in the Other Comprehensive Income (OCI) statement. The numerical effects for 2023 and 2022 are presented in the table below. CURRENCY EFFECTS ON LOANS TO SUBSIDIARIES NOK 1 000 Currency effect Tax effect (22%) Net effect recognized in equity through OCI 2023 28 784 -6 332 22 451 2022 24 792 -5 454 19 338 PART 03 - OUR FINANCIAL RESULTS of the number of issued ordinary shares during the year. Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. CALCULATION OF EARNINGS PER SHARE Profit / loss after tax (majority share) NOK 1 000 SPECIFICATION NUMBER OF SHARES AT 31.12: Number of shares Number of treasury shares Number of outstanding shares Weighted average number of outstanding shares Diluted average number of outstanding shares Earnings per share (NOK) Diluted earnings per share (NOK) ACCOUNTING POLICIES 2023 2022 559 750 1 153 779 113 447 042 113 447 042 1 313 654 1 351 811 112 133 388 112 095 231 112 034 001 112 309 715 112 034 001 112 309 715 5.0 5.0 10.3 10.3 Dividends payable to the company’s shareholders are recognized as a liability in the Group’s financial statements when the dividends are approved by the annual general meeting of Grieg Seafood ASA. DIVIDENDS Proposed dividend per share (NOK)* Distributed dividend to owners during the year per share (NOK) *Proposed dividend per share (NOK) by the Board of Directors. Per the date of this Annual Report - not yet approved by the Annual General Meeting. 2023 1.75 4.50 2022 4.50 3.00 115 NOTE 27 BORROWINGS ACCOUNTING POLICIES CURRENT LIABILITIES (INTEREST-BEARING) NOK 1 000 2023 2022 CURRENT BORROWINGS Current portion of non-current syndicated term-loan Overdraft facilities* Current portion of other non-current liabilities 132 753 128 211 63 113 12 469 — 13 757 208 335 141 968 Borrowings are initially recognized at fair value when the funds are received, net of transaction costs incurred. Borrowings Current portion of borrowings according to the statement of financial position are subsequently stated at amortized cost applying the effective interest method. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Grieg Seafood ASA has a syndicated, secured loan provided by DNB and Nordea. The syndicated financing consists of an aggregate of NOK 3 200 million in five-year senior secured sustainability-linked loans and credit facilities with maturity date in 2027. The debt structure comprises a NOK 750 million term loan (outstanding NOK 656 million), an EUR 75 million term loan (outstanding EUR 66 million), a NOK 1 500 million revolving credit facility and a NOK 200 million overdraft facility. As at the end of 2023, the Group has NOK 887 million (NOK 1 700 million) available on the revolving credit facility and overdraft facility. The revolving credit facilities are non- current and may be redrawn. Of the syndicated debt, NOK 133 million is installments due the next 12 months from the reporting date. The financing carries floating interest rates, calculated as the relevant three month IBOR plus the applicable margin per interest period. The financial covenant of the facility is a minimum equity ratio requirement of 31%, measured excl. the effect of IFRS 16. In addition to the senior secured facility, the Group also has a green bond (GSF01 G, listed at Euronext), which matures in June 2025. The outstanding amount of the bond loan was NOK 1 393 million at the end of 2023. The total bond issue in 2020 was NOK 1 500 million, and since the bond issue, Grieg Seafood has repurchased NOK 107 million. The bond carries a coupon rate of three months NIBOR + 3.4% p.a. The bond's 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 its financial covenant at 31 December 2023. At 31 December 2023, the Group had an equity ratio of 49% (2022: 50%) while the equity ratio according to financial covenant was 53%, compared to 52% at 31 December 2022. In addition to bank- and bond loan, the Group's financing consists of lease agreements with credit institutions, in addition to the effect of IFRS 16 by capitalizing leases on the balance sheet (operational leases according to IFRS in force prior to 1 January 2019). NON-CURRENT LIABILITIES NOK 1 000 NON-CURRENT BORROWINGS Green bond loan Non-current syndicated term-loan Non-current syndicated revolving credit facility Other non-current liabilities Non-current interest-bearing borrowings Amortization effect of loans Non-current borrowings according to the statement of financial position NON-CURRENT LEASE LIABILITIES 2023 2022 1 392 500 1 423 500 1 261 155 1 346 218 750 000 105 067 — 94 144 3 508 722 2 863 862 -16 742 -25 053 3 491 980 2 838 809 Non-current lease liabilities according to the statement of financial position 1 111 049 653 650 TOTAL NON-CURRENT BORROWINGS INCL AMORTIZED LOAN COSTS AND LEASE LIABILITIES Total non-current liabilities 4 603 028 3 492 459 CURRENT LEASE LIABILITIES Current portion of leasing liabilities according to the statement of financial position 299 626 226 910 TOTAL CURRENT BORROWINGS AND LEASE LIABILITIES Total current liabilities 507 960 368 878 *The Group has two multicurrency cash pool schemes, held at two different banks. One of the cash pool schemes has a multi-currency overdraft facility of NOK 200 million. As at year- end 31.12.2023, the cash pool scheme with the overdraft engagement had a net negative cash position, classified as overdraft facility at year-end. For more information on the Group's cash and cash equivalents, see Note 4 and 23. NET INTEREST-BEARING LIABILITIES NOK 1 000 Total non-current interest-bearing liabilities Total current interest-bearing liabilities Gross interest-bearing liabilities Loans to associated companies Investment in money market fund Cash and cash equivalents Net interest-bearing liabilities Lease liabilities for contracts classified as operating lease for the lessor Net interest-bearing liabilities ex. the effect of IFRS 16 2023 2022 4 619 770 3 517 512 507 960 368 878 5 127 730 3 886 390 -32 529 -8 300 — -1 012 848 -216 318 -642 719 4 878 884 2 222 522 -1 005 714 -483 946 3 873 170 1 738 576 Loans to associated companies, investment in money market funds, cash and cash equivalents and lease liabilities for contracts classified as operating lease for the lessor are presented by their inverted figure in the table above. Lease liabilities for contracts classified as operating lease for the lessor, corresponds to leases under the previous IFRS accounting standard IAS 17’ definition of operational leases. These lease liabilities (NOK 1 006 million in 2023 and NOK 484 million in 2022), also referred to as “the effect of IFRS 16”, are not included in the financial covenant’s definition of net interest-bearing liabilities. The Group monitors leverage by assessing both the net interest-bearing liabilities including the effect of IFRS 16, totalling NOK 4 879 million (NOK 2 223 million) and net interest-bearing liabilities ex. the effect of IFRS 16, totalling NOK 3 873 million (NOK 1 739 million). In this Note, the lease liabilities are reported in aggregate. See Note 28 for a specification of the Group’s lease liabilities, separated into lease liabilities for contracts classified as financial lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17’ definition of financial leases) and lease liabilities for contracts classified as operating lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17’ definition of operational leases). MATURITY PROFILE INTEREST-BEARING LIABILITIES NOK 1 000 2024 2025 2026 2027 2028 LATER TOTAL 31.12.2023 Green bond loan Syndicated term-loan Syndicated revolving credit facility Overdraft facility Lease liabilities (book values)* Other non-current liabilities** — 1 392 500 — — 132 753 132 753 132 753 995 648 — 63 113 — — — — 750 000 — — — — — — 1 392 500 — 1 393 908 — — 750 000 63 113 299 626 249 578 236 302 206 866 133 219 285 083 1 410 674 12 468 9 355 12 151 12 223 12 543 58 796 117 535 Total 507 960 1 784 186 381 206 1 964 738 145 762 343 879 5 127 730 *See Note 4 for a specification of the nominal payments for the lease component of the contractual liability **NOK 117.6 million attributable to various loans provided by government agencies in Canada concerning the development of the Newfoundland region. These loans are recognized at present value, with a calculated interest charged to the income statement until maturity. PART 03 - OUR FINANCIAL RESULTS 116 MATURITY PROFILE INTEREST-BEARING LIABILITIES NOK 1 000 2023 2024 2025 2026 2027 LATER TOTAL Average interest rate (NOK) Average interest rate (EUR) 31.12.2022 AVERAGE INTEREST RATE ON BANK- AND BOND LOAN 2023 6.62% 4.15% 2022 4.61% 1.77% Green bond loan Syndicated term-loan Lease liabilities (book values)* Other non-current liabilities** Total — — 1 423 500 — — — 1 423 500 128 211 128 211 128 211 128 211 961 584 — 1 474 429 226 910 201 443 122 059 114 500 88 482 127 165 880 560 13 757 11 310 9 944 9 856 11 004 52 029 107 900 368 878 340 965 1 683 714 252 568 1 061 071 179 194 3 886 390 *See Note 4 for a specification of the nominal payments for the lease component of the contractual liability **NOK 107.8 million attributable to various loans provided by government agencies in Canada concerning the development of the Newfoundland region. These loans are recognized at present value, with a calculated interest charged to the income statement until maturity. LIABILITIES SECURED BY MORTGAGES/CHANGES ON ASSETS NOK 1 000 Liabilities secured by mortgages/charges on assets ASSETS PLEDGED AS SECURITY NOK 1 000 Licenses Property, plant and equipment (excl. the effect of IFRS 16 / prior IAS 17 operational leases) Trade receivables Inventories and biological assets excl. fair value of biological assets Total assets pledged as security 2023 2022 2 642 413 1 899 364 2023 2022 1 489 798 1 463 709 4 112 535 3 562 816 327 160 259 137 3 966 011 3 136 381 9 895 503 8 422 043 Pledges also include shares in subsidiaries in addition to charges directly on assets. The book value of these shares is NOK 0 for the Group, as such shares according to the consolidation method of subsidiaries are eliminated in the Group. See Note 13 in the financial statement of the parent, Grieg Seafood ASA. BOOK VALUE OF GROUP BORROWINGS BY CURRENCY NOK 1 000 31.12.2023 NOK CAD Green bond loan Syndicated term-loan 1 392 500 1 392 500 1 393 908 656 250 Syndicated revolving credit facility 750 000 750 000 — — — EUR — 737 658 — USD GBP OTHER — — — — — — — — — Overdraft facility* Lease liabilities 63 113 79 924 140 824 -87 393 -52 476 -16 068 -1 698 Other non-current and current liabilities 117 535 — 117 535 Amortization effect of loans -16 742 -16 742 — 1 410 674 870 850 539 824 — — — — — — — — — — — — Total 5 110 989 3 732 782 798 184 650 265 -52 476 -16 068 -1 698 The effect of interest rate swaps is not taken into account in calculating the average interest rate on borrowings and credit facilities. BOOK VALUE FAIR VALUE BOOK VALUE AND FAIR VALUE OF BORROWINGS NOK 1 000 2023 2022 2023 2022 Green bond loan 1 392 500 1 423 500 1 404 684 1 414 532 Borrowings (non-current syndicated loan and revolver credit facility, incl. current part of the non-current liability and overdraft facility) Total 2 207 021 1 474 429 2 207 021 1 474 429 3 599 521 2 897 929 3 611 705 2 888 961 Book values in the table above are excluding the amortization effect of loan cost. The book value of borrowings (excluding the green bond) closely approximates to the fair value. Our green bond is listed on Oslo Børs (Euronext). Our green bond is listed on Oslo Børs (Euronext). Market price of the bond was 100.88% of par value at year-end 2023 (2022: 99.37%). 2023 CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES NOK 1 000 Green bond loan Syndicated term-loan 31.12.2022 CASH INFLOW CASH OUTFLOW TOTAL CASH FLOW TOTAL NON-CASH MOVEMENTS 31.12.2023 1 423 500 1 474 429 — — -56 000 -56 000 25 000 1 392 500 -133 275 -133 275 52 753 1 393 908 Syndicated revolving credit facility — 750 000 — 750 000 Other interest-bearing liabilities 107 900 4 379 -4 242 137 — 9 498 750 000 117 535 Long-term int.-bearing liabilities excl leases 3 005 830 754 379 -193 517 560 862 87 252 3 653 943 Overdraft facility Short-term int.-bearing liabilities excl leases Amortized loan costs Total borrowings Lease liabilities — — -25 053 63 113 63 113 — 63 113 63 113 — — 63 113 63 113 — 8 311 -16 742 — — 2 980 777 817 492 -193 517 623 975 95 563 3 700 314 880 560 — -279 830 -279 830 809 944 1 410 674 Total borrowings and lease liabilities 3 861 337 817 492 -473 348 344 145 905 507 5 110 989 SPECIFICATION OF NON-CASH FLOW MOVEMENTS FOR 2023 NOK 1 000 NEW LEASE LIABILITY OTHER CHANGES AMORTIZED LOAN COSTS FOREIGN CURRENCY TRANSLATION TOTAL NON-CASH MOVEMENTS Green bond loan Syndicated term-loan Syndicated revolving credit facility Other interest-bearing liabilities Long-term int.-bearing liabilities excl leases — — — — — — — — — 708 349 708 349 25 000 — — 3 772 28 772 — — — 28 772 87 751 116 524 — — — — — — — 8 311 8 311 — 8 311 — 52 753 — 5 726 25 000 52 753 — 9 498 58 479 87 252 — — — 58 479 13 844 72 323 — — 8 311 95 563 809 944 905 507 BOOK VALUE OF GROUP BORROWINGS BY CURRENCY NOK 1 000 Green bond loan Syndicated term-loan Lease liabilities 31.12.2022 NOK CAD 1 423 500 1 423 500 1 474 429 718 750 — — 880 560 536 129 344 431 Other non-current and current liabilities 107 900 — 107 900 Amortization effect of loans -25 053 -25 053 — EUR — 755 679 — — — Total 3 861 337 2 653 326 452 331 755 679 USD GBP OTHER Overdraft facility — — — — — — — — — — — — — — — — — — Short-term int.-bearing liabilities excl leases Amortized loan costs Total borrowings Lease liabilities Total borrowings and lease liabilities PART 03 - OUR FINANCIAL RESULTS 117 2022 NOTE 28 LEASES CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES NOK 1 000 31.12.2021 CASH INFLOW CASH OUTFLOW TOTAL CASH FLOW TOTAL NON-CASH MOVEMENTS 31.12.2022 Green bond loan Syndicated term-loan Syndicated revolving credit facility Other interest-bearing liabilities 1 500 000 — -50 275 424 524 1 463 423 -469 288 -50 275 994 134 -26 225 1 423 500 55 771 1 474 429 440 000 100 622 — — -440 000 -440 000 — — -2 582 -2 582 9 860 107 900 Long-term int.-bearing liabilities excl leases 2 465 146 1 463 423 -962 146 501 277 39 407 3 005 830 Overdraft facility Short-term int.-bearing liabilities excl leases Amortized loan costs Total borrowings Lease liabilities — — -29 671 — — — — — -11 854 2 435 474 1 463 423 -973 999 — — -11 854 489 423 — — 16 471 55 878 — — -25 053 2 980 777 755 828 — -225 468 -225 468 350 200 880 560 Total borrowings and lease liabilities 3 191 303 1 463 423 -1 199 467 263 955 406 078 3 861 337 SPECIFICATION OF NON-CASH FLOW MOVEMENTS FOR 2022 NOK 1 000 NEW LEASE LIABILITY OTHER CHANGES AMORTIZED LOAN COSTS FOREIGN CURRENCY TRANSLATION TOTAL NON-CASH MOVEMENTS Green bond loan Syndicated term-loan Syndicated revolving credit facility Other interest-bearing liabilities Long-term int.-bearing liabilities excl leases Overdraft facility Short-term int.-bearing liabilities excl leases Amortized loan costs Total borrowings Lease liabilities Total borrowings and lease liabilities — — — — — — — — — 255 901 255 901 -26 225 — — 4 625 -21 600 — — — -21 600 83 654 62 055 — — — — — — — 16 471 16 471 — 16 471 — 55 771 — 5 235 -26 225 55 771 — 9 860 61 006 39 407 — — — 61 006 10 644 71 651 — — 16 471 55 878 350 200 406 078 ACCOUNTING POLICIES The Group as a lessee The Group acts primarily as a lessee as the Group do not have any business directed toward a role as a lessor. However, from time to time, when overcapacity on operational assets (e.g. well-boats), leased assets may be subleased by the Group. Identifying a lease The Group has several lease arrangements; various offices, equipment and vehicles. Contracts are engaged both with credit institutions and external parties (where the material leases are mostly with well-boat and workboat providers). Contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may not be used as security for borrowing purposes. 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. Lease payments The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. The Group reassesses the incremental borrowing rates applicable for new lease agreements annually. The applied incremental borrowing rates for new leases as from 2023 ranged from 4.8% - 5.7% for buildings and properties, and 4.9% - 6.2% for other assets. The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. 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 357 million (NOK 267 million at 31 December 2022). Practical expedient 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 contract. Presentation The Group presents its lease liability separately from other liabilities in the statement of financial position. The Group presents its right-of-use assets on the financial statement line item “Property, plant and equipment incl. right-of-use assets”. PART 03 - OUR FINANCIAL RESULTS 118 TOTAL 978 143 14 767 707 898 44 848 AMOUNTS RECOGNIZED IN THE INCOME STATEMENT NOK 1 000 Interest on lease liabilities Foreign currency effect Depreciation right-of-use assets Income from subleasing of right-of-use assets Expenses relating to short-term leases -200 681 -248 576 1 063 884 1 497 079 Expenses relating to leases of low-value assets, excl. short-term leases of low-value assets Total amounts recognized in the income statement TOTAL 835 898 15 048 339 450 -24 849 NOK 1 000 Total cash outflow for leases -140 396 -187 404 547 010 978 143 NOTE 29 OTHER CURRENT LIABILITIES 2023 2022 OTHER CURRENT LIABILITIES NOK 1 000 880 560 708 349 755 828 255 901 -279 830 -225 468 13 845 87 751 10 902 83 397 1 410 674 880 560 Accrued expenses1 Production fee (Norway)2 Realized gain/loss on fixed-price contracts3 Other current liabilities4 Other current liabilities 2023 -55 765 1 142 2022 -33 613 3 746 -248 576 -187 404 8 801 -23 176 -1 31 261 -40 530 -1 -317 576 -226 543 2023 335 596 2022 259 081 2023 166 326 11 137 8 424 49 697 2022 150 241 7 987 30 930 99 052 235 584 288 210 1 Accrued expenses relate to other operating expenses, including accrued purchases, transportation costs, bonuses/discounts for buyers, accrued salaries, and insurance. 2 Production fee charged by NOK 0.56/kg for harvested volume (gutted weight) during the first half of 2023, and NOK 0.90/kg for harvested volume (gutted weight) during the second half of 2023 (NOK 0.405/kg in 2022) in Rogaland and Finnmark in Norway. The production fee is settled throughout the year. The production fee is presented on a separate financial statement line item in the income statement ("Production fee"). 3 See Note 31. 4 2022 figures Include NOK 25 million related to repurchased bonds. The repurchase was finalized in 2022 but settled in cash in 2023. In addition, NOK 28 million related to litigation and claims was accrued at year-end 2022, see Note 10. 2023 does not include such items as per year-end 2023. *Incl. the effect of exercising extension options and CPI adjustment of applicable leases. RIGHT-OF-USE ASSETS 2023 NOK 1 000 Book value at 01.01. Currency translation differences Additions Other changes in the right-of-use assets* Depreciation Book value at 31.12. RIGHT-OF-USE ASSETS 2022 NOK 1 000 Book value at 01.01. Currency translation differences Additions Other changes in the right-of-use assets* Depreciation Book value at 31.12. BUILDINGS/ PROPERTY PROD. PLANTS AND BARGES NETS, CAGES AND MOORINGS OTHER EQUIPMENT 66 622 292 209 1 690 5 194 3 520 -12 978 64 048 — 43 350 -12 273 -20 179 303 108 72 302 17 23 193 -14 734 -14 739 66 039 67 927 1 760 10 036 -1 399 -11 703 66 622 242 934 26 69 549 -743 -19 556 292 209 87 743 43 8 058 -7 792 -15 749 72 302 547 010 13 060 636 161 68 335 437 294 13 220 251 807 -14 915 BUILDINGS/ PROPERTY PROD. PLANTS AND BARGES NETS, CAGES AND MOORINGS OTHER EQUIPMENT *Incl. the effect of exercising extension options and CPI adjustment of applicable leases. LEASE LIABILITIES NOK 1 000 Lease liabilities at 01.01. New leases recognized during the year Cash payments for the principal portion of the lease liability Currency exchange differences Other changes in the lease liabilities* Total lease liabilities at 31.12. *Incl. the effect of exercising extension options and CPI adjustment of applicable leases. See Note 4 for a maturity analysis for the contractual nominal amount (of the lease component in the contract) of the total lease liabilities. SPECIFICATION OF LEASE LIABILITIES AT 31.12 NOK 1 000 Non-current portion Current portion 2023 CLASSIFIED AS FINANCIAL LEASE FOR THE LESSOR CLASSIFIED AS OPERATING LEASE FOR THE LESSOR TOTAL LEASE LIABILITY 329 013 75 948 782 036 223 678 1 111 049 299 626 Total lease liabilities included in the statement of financial position at 31.12 404 960 1 005 714 1 410 674 SPECIFICATION OF LEASE LIABILITIES AT 31.12 NOK 1 000 Non-current portion Current portion Total lease liabilities included in the statement of financial position at 31.12 2022 CLASSIFIED AS FINANCIAL LEASE FOR THE LESSOR CLASSIFIED AS OPERATING LEASE FOR THE LESSOR 318 198 78 416 396 614 335 452 148 494 483 946 TOTAL LEASE LIABILITY 653 650 226 910 880 560 PART 03 - OUR FINANCIAL RESULTS 119 NOTE 30  RELATED PARTIES NOTE 31 FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT 2023 NOK 1 000 Total related parties as shareholders Total related parties as associates Total 2022 NOK 1 000 Total related parties as shareholders Total related parties as associates Total OPERATING INCOME OPERATING EXPENSES NON-CURRENT BALANCES CURRENT BALANCES — — — 22 797 174 380 197 177 — 41 129 41 129 -5 039 -182 -5 221 OPERATING INCOME OPERATING EXPENSES NON-CURRENT BALANCES CURRENT BALANCES — — — 33 742 168 353 202 095 — 16 650 16 650 -1 906 -40 879 -42 785 The Grieg Seafood Group carries out, in the normal course of business, transactions with companies controlled by Grieg Maturitas II AS, which is the parent company of Grieg Aqua AS, the majority owner of Grieg Seafood ASA. The ultimate parent company of Grieg Seafood ASA is Grieg Maturitas AS, the parent company of Grieg Maturitas II AS. These transactions relate to: • 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. • Grieg Seafood ASA purchases services from Grieg Investor AS. • The regions purchased cleaner fish from Rensefiskgruppen AS including subsidiaries, a company owned by Grieg Kapital AS. Furthermore, the Group also purchases goods and services from associated companies, including companies affiliated with the Group through managerial positions in Grieg Seafood and the related party. These transactions relate to: • Purchase of smolt from the associated company Tytlandsvik Aqua AS, which is owned 33.33% by Grieg Seafood Rogaland AS. • Purchase of smolt from the associated company Nordnorsk Smolt AS, which is owned 50.00% by Grieg Seafood Finnmark AS. • Interest-bearing loan provided to Årdal Aqua AS, which is owned 44.44% by Grieg Seafood Rogaland AS. • Interest-bearing loan provided to Nordnorsk Smolt AS, which is owned 50.00% by Grieg Seafood Finnmark AS. • Non-interest bearing loan provided to an affiliated company of NextSeafood AS, which is owned 50.00% by Grieg Seafood Rogaland AS. • Fuel is purchased from Eidsvaag AS, which is affiliated with Grieg Seafood through a board member of Grieg Seafood being the Chair of the Board of Directors of the affiliated company. • Algae monitoring services are purchased from Blue Planet AS, which is affiliated with Grieg Seafood through the Chief Operating Officer Norway of the Group being the Chair of the Board of Directors of the affiliated company. The parent company provides a range of services to its subsidiaries. The services include administrative services performed on behalf of the subsidiaries of the Group. Grieg Seafood ASA is set up with facility agreements with external parties incl. banks, and lend out funds to subsidiaries. Interest is charged on an arm's length basis. In addition, Grieg Seafood ASA engages in hedge contracts on behalf of subsidiaries. The arrangement is intended to reduce these companies' exposure to salmon prices. Agreements with the subsidiaries are priced on the basis of a "back-to-back" arrangement. The Board and Group Management are related parties. See Note 8 on share-based options and Note 24 on shares controlled by members of the Board and Group Management. All transactions, including both the sale and purchase of goods and services, are made on an arm’s length basis. ACCOUNTING POLICIES A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity. The classification is performed in accordance with the substance of the contractual arrangement, and in line with the definitions of a financial asset, a financial liability and an equity instrument. Ordinary purchases and sales of investments are recognized on the trade-date, the date on which the Group commits to purchase or sell the asset. All financial assets that are not stated at fair value through profit or loss are initially recognized at fair value plus transaction costs. FINANCIAL ASSETS Financial assets are initially recognized at fair value when Grieg Seafood becomes party to the contractual provision of the asset. The subsequent measurement of the financial asset depends on which category the asset have been classified into at inception of the contract. The classification is based on an evaluation of the contractual terms and the business model applied. The Group does not have financial assets with fair value measured through other comprehensive income. As such, the Group’s categories of financial assets range from amortized cost and fair value through profit and loss. Financial assets at amortized cost The Group’s financial assets measured at amortized cost includes trade receivables and other short-term deposits. The Group does not normally have, and has not had at year date of the reporting year nor in the comparable period, trade receivables that contain a significant financing component. Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. 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. 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. The category also include the Group’s investments in debt instruments and money market funds. Impairment of 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 all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. See Note 20 for more information concerning trade receivables. 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. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or 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. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial derivative contracts. 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. PART 03 - OUR FINANCIAL RESULTS 120 FINANCIAL INSTRUMENTS NOK 1 000 FVPL 1 AMORTIZED COST FVOCI 2 TOTAL 31.12.2023 FAIR VALUE MEASUREMENT FINANCIAL ASSETS Other non-current receivables3 Trade receivables Other current receivables Derivatives5 Cash and cash equivalents Total financial assets FINANCIAL LIABILITIES Borrowings Lease liabilities Share-based payments6 Derivatives5 Trade payables Other current liabilities Total financial liabilities 131 — — 35 164 — 35 295 — — 7 566 1 709 — — 41 129 327 160 20 292 — 216 318 604 899 3 491 980 1 410 674 — — 760 753 15 667 9 275 5 679 075 271 — — — — 271 — — — — — — — 41 531 327 160 20 292 35 164 216 318 640 466 3 491 980 1 410 674 7 566 1 709 760 753 15 667 5 688 349 ACCOUNTING POLICIES The following of the Group’s financial instruments are not measured at fair value: cash and cash equivalents, accounts receivables, other current receivables and payables, bank loans, bond loans and leasing liabilities. The Group uses the following hierarchy of valuation techniques to determine and disclose the fair value of financial instruments: • Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities • Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly • Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. For recurring level 3 measurements, transfers between the levels in the fair value hierarchy are evaluated when reassessing the categories of the financial instruments at the end of the period. During the reporting period, there were no changes in the fair value measurement which caused transfers between level 1 and level 2, and no transfers to or from level 3. The information below describes valuation techniques for fair value measurement and estimation used by Grieg Seafood, including leases and the fair value adjustment of biological assets. 31.12.2022 (I) FINANCIAL DERIVATIVE INSTRUMENTS FINANCIAL INSTRUMENTS NOK 1 000 FVPL 1 AMORTIZED COST FVOCI 2 TOTAL FINANCIAL ASSETS Other non-current receivables3 Trade receivables Other current receivables Investment in money market funds4 Derivatives5 Cash and cash equivalents Total financial assets FINANCIAL LIABILITIES Borrowings Lease liabilities Share-based payments6 Derivatives5 Trade payables Other current liabilities Total financial liabilities — — — 1 012 848 37 988 — 1 050 836 — — 6 510 64 928 — — 16 900 259 137 8 863 — — 642 719 927 618 2 980 777 880 560 — — 717 498 76 585 71 439 4 655 420 271 — — — — — 17 171 259 137 8 863 1 012 848 37 988 642 719 271 1 978 725 — — — — — — — 2 980 777 880 560 6 510 64 928 717 498 76 585 4 726 859 1 FVPL: Fair value through profit or loss. 2 FVOCI: Fair value through other comprehensive income. 3 Investments in non-listed shares (equity instruments). Measured at level 3. Loans to associated companies at amortized cost. 4 Investments in money market funds. Measured at level 2. See Note 22 for more information. 5 Forward currency contracts, interest rate swap and financial salmon price contracts. Measured at level 2. See below for specification. The purpose of the derivatives is to reduce the Group´s exposure to changes in floating interest rates, exchange rates and fluctuations in the salmon sales price. 6 Synthetic option scheme. Measured at level 3. See Note 8 for more information. The fair value of quoted financial assets classified as financial assets at fair value through OCI is determined by reference to published price quotations in an active market. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The fair value of forward currency contracts is determined using the forward exchange rate at the end of the reporting period. The fair value of interest rate swaps is determined by the present value of future cash flows. The fair value of options is determined using option pricing models. For all the above-mentioned derivatives, the fair value is confirmed by the financial institution with which the Group has entered into the contracts. The carrying value of derivatives and other financial instruments as at 31 December 2023 and 31 December 2022 is shown in the table below. All the financial derivative instruments included in the table below are measured according to level 2 of the fair value hierarchy. FAIR VALUE OF FINANCIAL DERIVATIVES NOK 1 000 NOTE 2023 2022 Forward currency contracts at fair value through profit or loss Interest rate swap agreements Financial salmon contract - sales contracts* Total financial instruments at fair value 4 4 ASSETS 11 852 23 312 — 35 164 CURRENT LIABILITIES ASSETS CURRENT LIABILITIES — — 1 709 1 709 2 749 35 238 — 37 988 9 — 64 920 64 928 *In addition, as at year-end 2023, Grieg Seafood had NOK 8 million (2022: NOK 31 million) classified as current liabilities (see note Note 29) related to realized financial salmon contracts. This amount represents settled price contracts, not part of the fair value amount of the financial instrument (derivative contract). (II) TRADE RECEIVABLES, OTHER 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, as they are short term and entered into on “normal” terms and conditions. (III) CASH AND CASH EQUIVALENTS The carrying amount of cash and cash equivalents is approximately equal to fair value, since these instruments have a short term to maturity. (IV) BANK AND BOND LOANS The carrying amount of bank loans is assessed to be approximately equal to fair value because the floating interest rate is adjusted to reflect current conditions. The fair value of the bond loan is disclosed in Note 27. PART 03 - OUR FINANCIAL RESULTS 121 (V) LEASES The fair value of financial assets and liabilities recognized at their carrying amount is calculated as the present value of estimated cash flows discounted by the interest rate that applies to corresponding liabilities and assets at the end of the reporting period. This applies to lease liabilities, see Note 28. (VI) BIOLOGICAL ASSETS Fish in the 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. See more information concerning the fair value estimation of biological assets in Note 19. NOTE 32 EVENTS AFTER THE REPORTING DATE On 25 January 2024, Grieg Seafood received a Statement of Objections (SO) from the European Commission related to its investigation of potential anti-competitive behavior regarding the sale of farmed Norwegian Atlantic salmon which was launched back in 2019. The issuance of a SO is a common and formal step in the process without prejudice of the final outcome, where the European Commission sets out its preliminary view in the matter. On 9 February 2024, the Federal Court in Canada approved the settlement agreement dated 22 September 2023 entered into by the plaintiffs and Grieg Seafood regarding the proposed three class-actions in Canada. On 13 and 14 February 2024, Grieg Seafood ASA and Grieg Seafood UK Limited have received a service letter according to which certain claimants filed a claim for damages against, among other, Grieg Seafood ASA and Grieg Seafood UK Limited arising from alleged unlawful cartel arrangements in relation to the supply of farmed Atlantic salmon. In general, Grieg Seafood denies any anti-competitive conduct whether it is in regard to the European Commission’ investigation, the claim filed in the UK or any possible future claims related to this matter subsequent to the issuance of the SO. Therefore, no provision has been recognized at the current stage. We will continue to collaborate with the European Commission and follow up all processes as it deems appropriate. There have not been any other significant events after the balance sheet date of 31 December 2023. PART 03 - OUR FINANCIAL RESULTS 122 GRIEG SEAFOOD ASA ACCOUNTS ASA ACCOUNTS 124 Income statement 125 126 126 Statement of financial position Statement of changes in equity Cash flow statement NOTES 127 NOTE 1 Accounting policies 128 128 128 130 130 131 131 131 132 132 133 134 135 138 138 138 NOTE 2 Related parties NOTE 3 Operating income NOTE 4 Salaries, personnel and other operating expenses NOTE 5 Financial income and financial expenses NOTE 6 Income taxes NOTE 7 Software, and property, plant and equipment NOTE 8 Investments in subsidiaries NOTE 9 Other current receivables NOTE 10 Short-term investments and derivatives NOTE 11 Cash and cash equivalents NOTE 12 Share capital and shareholder information NOTE 13 Net interest-bearing liabilities and pledges NOTE 14 Share-based payments NOTE 15 Other current liabilities NOTE 16 Guarantees NOTE 17 Events after the reporting date PART 03 - OUR FINANCIAL RESULTS 123 INCOME STATEMENT 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 profit (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 Transferred from other equity Total appropriations NOTE 2/3 4/14 7 2/4 2/5 2/5 6 2023 258 137 258 137 -84 870 -3 357 -84 964 -173 191 2022 288 015 288 015 -118 348 -6 984 -199 548 -324 879 84 946 -36 865 410 974 -285 218 1 273 786 -221 178 125 756 1 052 608 210 702 1 015 743 -51 593 159 109 196 233 -37 125 159 109 -221 666 794 077 504 120 289 957 794 077 PART 03 - OUR FINANCIAL RESULTS 124 STATEMENT OF FINANCIAL POSITION GRIEG SEAFOOD ASA NOK 1 000 NOTE 31.12.2023 31.12.2022 GRIEG SEAFOOD ASA NOK 1 000 NOTE 31.12.2023 31.12.2022 ASSETS Deferred tax assets Software Property, plant and equipment Investments in subsidiaries Loan to Group companies 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 Cash and cash equivalents Total current assets Total assets 6 7 7 8 2 2 2 2/9 10 11 296 7 265 1 209 14 192 8 357 1 207 2 022 531 1 903 409 810 459 169 797 907 169 2 841 929 2 725 241 131 650 180 989 4 567 414 2 715 580 10 445 4 908 27 194 18 281 1 013 415 524 823 4 741 610 4 453 087 7 583 539 7 178 328 EQUITY AND LIABILITIES Share capital Treasury shares Other paid-in equity Contingent consideration Other retained earnings Total equity 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 Accrued dividend Other current liabilities Total current liabilities Total liabilities Total equity and liabilities BERGEN, 21 March 2024 The Board of Directors and CEO of Grieg Seafood ASA 12 12 14 13 13 13 14 2 2 2 6 2/15 453 788 -5 255 228 593 701 535 1 602 064 2 980 725 8 178 8 178 1 383 463 2 003 450 453 788 -5 407 227 477 701 535 1 633 390 3 010 783 6 756 6 756 1 408 523 1 336 142 3 386 913 2 744 665 195 866 128 211 833 9 910 27 619 743 739 — 5 530 196 233 27 993 672 5 432 8 526 412 125 243 039 9 586 504 120 104 414 1 207 723 1 416 125 4 602 814 4 167 547 7 583 539 7 178 328 PER GRIEG Chair TORE HOLAND Vice Chair KATRINE TROVIK Board Member RAGNHILD JANBU FRESVIK Board Member MARIANNE RIBE Board Member NICOLAI HAFELD GRIEG ANDREAS KVAME Board Member CEO PART 03 - OUR FINANCIAL RESULTS 125 STATEMENT OF CHANGES IN EQUITY GRIEG SEAFOOD ASA NOK 1 000 Equity at 01.01.2022 Profit for the year 2022 Sale of treasury shares to employees Purchase of treasury shares Accrued dividend at year-end* Equity at 31.12.2022 Equity at 01.01.2023 Profit for the year 2023 Sale of treasury shares to employees Purchase of treasury shares Accrued dividend at year-end* Equity at 31.12.2023 SHARE CAPITAL TREASURY SHARES OTHER PAID- IN EQUITY CONTINGENT CONS.** OTHER EQUITY TOTAL EQUITY 453 788 -4 532 226 468 701 535 1 366 671 2 743 930 — — — — — 385 -1 260 — — 1 009 — — — — — — 794 077 794 077 5 501 6 895 -28 739 -29 999 -504 120 -504 120 453 788 -5 407 227 477 701 535 1 633 390 3 010 783 453 788 -5 407 227 477 701 535 1 633 390 3 010 783 — — — — — 433 -280 — — 1 116 — — — — — 159 109 159 109 5 517 280 7 065 — -196 233 -196 233 453 788 -5 255 228 593 701 535 1 602 064 2 980 725 *Accrued dividend is allocated as at 31 December and not yet authorized by the Annual General Meeting (AGM) ** Contingent consideration related to the acquisition of Grieg Seafood Newfoundland AS. See Note 25 in the Group Accounts for more information. CASH FLOW STATEMENT GRIEG SEAFOOD ASA NOK 1 000 Profit before tax Recognized, not paid Group contributions Taxes paid 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 Purchase of property, plant and equipment Purchase of intangible assets Payments/proceeds, loans to/from Group companies Group contribution from subsidiaries Investment in money market funds Net cash flow from investing activities Proceeds of long-term interest bearing debt Repayment of long-term interest-bearing debt Proceeds of short-term interest bearing debt Change in loans to/from Group companies Interest paid Paid dividends Repurchase of own shares 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. CASH AND CASH EQUIVALENTS AT 31.12. CONSISTS OF: Restricted deposits Other bank deposits UNUTILIZED CREDIT FACILITIES AT 31.12: Unutilized credit facilities at the year-end NOTE 6 7 7 7 10 13 13 13 5 11 2023 210 702 — -247 137 3 357 49 339 23 571 -89 086 227 007 40 201 217 955 -674 -1 592 -2 847 125 995 290 2022 1 015 742 -995 291 -79 658 6 984 -180 811 -10 751 40 515 121 889 44 961 -36 421 -659 -2 581 121 030 307 845 1 041 914 -1 000 224 -812 187 -574 589 750 000 -164 275 63 113 178 892 -221 467 -504 120 -5 540 96 603 1 463 423 -960 788 — 310 014 -108 349 -336 942 -24 400 342 957 -497 629 -268 052 524 823 27 194 1 000 26 194 792 875 524 823 1 000 523 823 886 887 1 700 000 PART 03 - OUR FINANCIAL RESULTS 126 NOTE 1 ACCOUNTING POLICIES The annual financial statements have been prepared in as operating expenses as they arise, while improvements and accordance with the Norwegian Accounting Act and generally additions are added to the acquisition cost of the asset and accepted accounting principles in Norway. depreciated at the same rate as the asset. The distinction between maintenance and improvements is made based on the All amounts are stated in NOK thousand, unless otherwise asset’s relative condition on the original purchase date. indicated. USE OF ESTIMATES Management has used estimates and assumptions that have SUBSIDIARIES Subsidiaries are recognized at cost in the financial statement of Grieg Seafood ASA (parent). Group contributions paid to affected assets, liabilities, revenues, expenses and information subsidiaries, net of tax, are recognized as an increase in the on potential liabilities in accordance with generally accepted cost of the shares. Dividends and group contributions from accounting principles in Norway. REVENUE RECOGNITION Revenue from the sale of goods is recognized at the time subsidiaries to Grieg Seafood ASA are recognized in the same year in the Company’s financial statement as when recognized in the subsidiary’s financial statements. If dividends/group contributions materially exceed retained earnings received from of delivery. Revenue from the sale of services is recognized the investment in the subsidiary after acquisition, the excess when the services are performed. The share of sales revenue amount is regarded as a reimbursement of invested capital associated with future service is recognized in the statement of and is deducted from the recognized cost of investment in the financial position as accrued sales revenues and is transferred to subsidiary in the statement of financial position of Grieg Seafood income at the time of execution. ASA. Dividends and group contributions received are recognized CLASSIFICATION AND VALUATION OF BALANCE SHEET ITEMS Assets intended for long-term ownership or use are classified as in the income statement as other financial income. Contingent consideration is included in costs on the acquisition date of a subsidiary. The likelihood of payment and time value non-current assets. Assets related to the normal operating cycle of money are considered when estimating the fair value of the are classified as current assets. Receivables are classified as contingent consideration on 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 Non-current assets are written down to fair value where this is the value in use (net present value of future use/ownership), the required by accounting rules. Nominal amounts are discounted if asset is written down to the higher of fair value less costs to sell the interest rate element is material. INTANGIBLE ASSETS Expenditure on intangible assets is recognized in the statement of financial position to the extent that a future economic benefit can be identified as deriving from the development and the value in use. Previous impairment charges are reversed in a later period if the prerequisites for impairment are no longer present (except for impairment of goodwill). TRADE AND OTHER RECEIVABLES Trade and other receivables are recognized in the statement of of an identifiable intangible asset and cost can be measured financial position at nominal value after a provision for bad debts. reliably. Otherwise, the cost is expensed as it arises. Capitalized The provision for bad debts is estimated based on an individual development costs are amortized over their useful life. assessment of each material receivable. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is recognized in the statement of financial position and depreciated on a straight-line basis over its estimated useful life, providing the asset has an expected useful life of more than 3 years and a cost price of more than NOK 15 000. Maintenance costs are recognized in the income statement CURRENT INVESTMENTS Current investments (shares and investments which are SHARE-BASED PAYMENTS The Company operates a share-based remuneration scheme considered current assets) are carried at the lower of acquisition for the Group management of the Grieg Seafood Group. The cost and fair value at the reporting date. Dividends and other share-based option scheme is a synthetic option scheme with distributions received are recognized as other financial income. settlement in cash. Each member of the scheme is obliged to Investments in money market funds are measured at fair value purchase shares relative to their annual salary. The company’s in the Company’s statement of financial position. Unrealized estimated liability is recognized as a current or non-current gains (losses) are presented as financial income (-expense) in the liability based on the estimated settlement date. The cost for the income statement. year is recognized in the income statement. CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash in hand, bank deposits and other short-term highly liquid investments with original maturities of three months or less. The overdraft facility is DERIVATIVES FORWARD CURRENCY CONTRACTS Realized gains (losses) on forward currency contracts are included in current borrowings in the statement of financial recognized in the income statement as a financial income position. PENSIONS The company’s pension schemes meet the requirements of the Norwegian Mandatory Occupational Pensions Act. The Company operates a defined contribution pensions scheme for (financial cost). The fair value of a forward currency contract is measured in its contracted currency and translated to NOK using the foreign exchange currency rate at the reporting date. INTEREST RATE SWAPS Interest rate swap contracts are measured according to the its employees. The pension premium is paid through operations lowest of its acquisition cost and fair value at the reporting date. 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 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 subsidiaries. Grieg Seafood ASA borrows funds from financial tax purposes and any allowable loss to be carried forward at institutions and then lends these funds to its subsidiaries. The year-end in the financial statements. Temporary differences, Company has set up two multi-currency group account (cash both positive and negative, are offset within the same period. pool) schemes in which Grieg Seafood ASA is the legal account Deferred tax assets are recognized in the statement of financial holder. Deposits and loans from/to the subsidiaries, which position when it is more likely than not that the tax assets will are part of the cash pool, are recognized as intercompany be utilized. Deferred tax assets and deferred tax liabilities are transactions. All subsidiaries that are part of the cash pool (not presented net in the statement of financial position. Tax on group all subsidiaries of the Group are part of the cash pool) are jointly contributions is recognized as an increase in the purchase price and severally liable to the financial institutions for the entire of shares in other companies. Taxes payable and deferred taxes amount of the commitment under the scheme. are recognized directly in equity to the extent that they relate FOREIGN CURRENCY The Company’s functional and presentational currency is the Norwegian Krone (NOK). Monetary items in a foreign currency are translated into NOK using the exchange rate applicable on the reporting date. Non-monetary items that are measured to equity transactions (offset against tax payable if the group contribution affects tax payable and offset against deferred taxes if the group contribution affects deferred taxes). CASH FLOW STATEMENT The cash flow statement has been prepared according to the at their historical price expressed in a foreign currency are indirect method. Cash and cash equivalents include cash, bank translated into NOK using the exchange rate applicable on the deposits and other short-term highly liquid investments which transaction date. Non-monetary items that are measured at entail no appreciable exchange rate risk, and which mature their fair value expressed in a foreign currency are translated at within three months of the purchase date. the exchange rate applicable on the reporting date. Changes to exchange rates are recognized in the income statement as they occur during the accounting period. PART 03 - OUR FINANCIAL RESULTS 127 NOTE 2 RELATED PARTIES 2023 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 257 719 9 601 269 057 35 373 810 459 131 650 4 567 414 27 619 743 739 — 14 561 — — — — — 4 5 000 Total 257 719 24 162 269 057 35 373 810 459 131 650 4 567 414 27 623 748 739 2022 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 287 954 2 185 1 109 243 2 958 797 907 180 989 2 715 580 8 526 412 125 — 12 409 — — — — — 5 500 — Total 287 954 14 594 1 109 243 2 958 797 907 180 989 2 715 580 14 026 412 125 See Note 13 for information on assets pledged as security for financial liabilities. The company carries out, in the normal course of business, transactions with companies controlled by Grieg Maturitas II AS, which is the parent company of Grieg Aqua AS, the majority owner of Grieg Seafood ASA. The ultimate parent company of Grieg Seafood ASA is Grieg Maturitas AS, the parent company of Grieg Maturitas II AS. Grieg Maturitas II AS is headquartered in C. Sundts gate 17/19, Bergen, Norway. NOTE 3 OPERATING INCOME OPERATING INCOME NOK 1 000 Administrative services – Group companies Royalty fee - Group companies Other operating income - Group companies NOTE 2023 117 053 140 130 536 2022 141 622 146 332 — Total operating income - group Group companies 2 257 719 287 954 Other operating income Total operating income 418 258 137 61 288 015 NOTE 4 SALARIES, PERSONNEL AND OTHER OPERATING EXPENSES SALARIES AND PERSONNEL EXPENSES NOK 1 000 Wages and salaries Social security costs Synthetic stock options for directors and key personnel (Note 14) Pension costs – defined contribution scheme Other personnel costs Total Average full time equivalents (FTE) 2023 53 995 9 384 1 584 2 561 17 346 84 870 39 2022 68 263 13 122 30 399 2 523 4 041 118 348 39 Consolidated financial statements, in which Grieg Seafood ASA is included, may be obtained from the parent company - in addition to Grieg Seafood ASA also prepares its own consolidated financial statement for the Grieg Seafood Group. PENSION SCHEME The company has a defined contribution pension scheme covering all employees at 31 December 2023. The pension scheme is funded and The transactions with Grieg Maturitas II AS and subsidiaries relate to ICT-related services and other functions such as catering, reception, etc., are provided by Grieg Group Resources AS on an arm’s length basis. In addition, 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. Lastly, Grieg Seafood ASA purchases services from Grieg Investor AS. Grieg Seafood ASA provides a range of services to the subsidiaries of the Grieg Seafood Group. The services include administrative services performed on behalf of the subsidiaries of the Group. Grieg Seafood ASA is set up with facility agreements with external parties incl. banks, and lend out funds to subsidiaries. Interest is charged on an arm's length basis. In addition, Grieg Seafood ASA engages in hedge contracts on behalf of subsidiaries. The arrangement is intended to reduce these companies' exposure to salmon prices. Agreements with the subsidiaries are priced on the basis of a "back-to-back" arrangement. managed through an insurance company. SHARE SAVINGS PLAN Grieg Seafood established a share savings program for its employees in 2018, which has continued throughout 2023. Each year has its own set of terms and conditions concerning how much each employee can invest in the program that year. In addition, each year has it’s set of terms for the lock-up period. The participating employees buy shares on a discount. The discount is recognized as a cost in the income statement and included as an other personnel cost as presented in the table above. The total costs related to the discount was NOK 2.1 million in 2023 (NOK 2.1 million in 2022). The purchase price and the number of shares acquired by the company will be reported in accordance with the applicable regulations. At 31 December 2023, loan to employees related to the share savings program equals NOK 5.0 million (2022: NOK 4.9 million). The total shares sold to employees was 107 473 in 2023 (2022: 96 150). See also Note 12. MANAGEMENT REMUNERATION The guidelines for management remuneration are available on Grieg Seafood ASA’s website. Not all members of the Grieg Seafood Group Management Team is employed by Grieg Seafood ASA. For a specification of the remuneration to the Group’s Management Team, see Note 7 of the Group Accounts. This Note provide the specification of remuneration of the members of the Group Management that is employed by Grieg Seafood ASA. PART 03 - OUR FINANCIAL RESULTS 128 1 187 16 473 BREAKDOWN OF AUDITOR'S FEES NOK 1 000 Statutory audit Other certification services Tax advisory fee Other services Total REMUNERATION PAID TO BOARD MEMBERS IN 2022 NOK 1 000 Per Grieg1 Tore Holand2 Marianne Ribe1 Katrine Trovik2 Nicolai Hafeld Grieg Ragnhild Fresvik (from 9 of June 2022) Total remuneration 1 Payment for work performed on the Remuneration Committee of NOK 25 673 is included in the remuneration paid to Per Grieg and Marianne Ribe. 2 Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik, amounting to NOK 68 460. The amounts include social security costs. TOTAL 516 401 328 372 308 183 2 107 2022 1 063 783 — 26 2023 1 823 1 116 — 459 3 398 1 872 Other operating expenses In February 2019, the European Commission launched an investigation to explore potential anti-competitive behavior in the in the market for spot sales of fresh, whole and gutted Norwegian farmed Atlantic salmon. In January 2024, Grieg Seafood received a Statement of Objections from the European Commission related to its investigation. See Note 17 concerning events after the balance sheet date of 2023. Furthermore, three class-actions were filed in Canada (none has been certified as a class-action). Even though Grieg Seafood considers the complaints to be entirely without merit, Grieg Seafood have agreed to a settlement offer from the plaintiffs and entered into a respective settlement agreement in 22 September 2023 as the costs of litigation in Canada can be substantial. The settlement agreement was approved by the Federal Court in February 2024. In 2022, incurred costs and provisions for expected costs related to the lawsuits in North America in total of NOK 157 million were expensed, of which NOK 129 million were used at year end 2022. The remaining NOK 28 million were carried over to 2023. After the settlement related payment was made, the remainder of the accrual was released. The costs are reported as “other operating expenses” in Grieg Seafood ASA. See also Note 10 of the Group Accounts. REMUNERATION PAID TO MEMBERS OF GROUP MANAGEMENT TEAM EMPLOYED BY GRIEG SEAFOOD ASA IN 2023 NOK 1 000 SALARY BONUS RETAINED BONUS, NOT YET PAID OPTIONS EXERCISED DURING THE YEAR OTHER REMUNERATION TOTAL Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Erik Holvik (Chief Commercial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Nina Stangeland (Chief Strategy Officer) Kristina Furnes (Chief Communication Officer) Total remuneration to member’s of Group Management employed by Grieg Seafood ASA 4 003 2 885 2 435 2 259 1 833 524 1 348 15 286 — — — — — — — — — — — — — — — — — — — — — — — — Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 14. Nina Stangeland was appointed as Chief Strategy Officer in Q3 2023. REMUNERATION PAID TO BOARD MEMBERS IN 2023 NOK 1 000 Per Grieg1 Tore Holand2 Marianne Ribe1 Katrine Trovik2 Nicolai Hafeld Grieg Ragnhild Fresvik Total remuneration 1 Payment for work performed on the Remuneration Committee of NOK 25 525 is included in the remuneration paid to Per Grieg and Marianne Ribe. 2 Payment for work performed on the Audit Committee is included in the remuneration paid to Tore Holand and Katrine Trovik, amounting to NOK 79 870. The amounts include social security costs. REMUNERATION PAID TO MEMBERS OF GROUP MANAGEMENT TEAM EMPLOYED BY GRIEG SEAFOOD ASA IN 2022 NOK 1 000 SALARY BONUS RETAINED BONUS, NOT YET PAID OPTIONS EXERCISED DURING THE YEAR 454 136 139 147 152 44 116 4 457 3 020 2 573 2 406 1 985 568 1 463 TOTAL 542 422 342 394 314 314 2 328 Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) 3 644 2 349 Alexander Knudsen (Chief Operating Officer Farming Europe) 2 066 Roy Tore Rikardsen (Chief Operating Officer Farming Canada until 10 of June 2022) Erik Holvik (Chief Commercial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) 1 802 2 247 2 098 1 631 1 229 1 007 612 321 -26 483 426 323 172 Total remuneration to member’s of Group Management employed by Grieg Seafood ASA 17 067 3 318 — — — — — — — — — OTHER REMUNERATION* TOTAL 2 954 12 144 120 332 47 123 131 133 108 6 282 5 637 4 740 5 923 5 538 4 296 3 282 4 540 3 202 2 917 2 917 3 070 2 883 2 209 1 773 23 509 3 948 47 842 *The CEO has in 2022 received a one-time payment in arrears for pension benefits. Recognized expenses arising from synthetic options not declared throughout the year are not included in the above statement. See Note 14. PART 03 - OUR FINANCIAL RESULTS 129 NOTE 5 FINANCIAL INCOME AND FINANCIAL EXPENSES NOTE 6 INCOME TAXES NOTE 2023 2022 BASIS FOR TAX PAYABLE NOK 1 000 FINANCIAL ITEMS NOK 1 000 FINANCIAL INCOME Interest income from Group companies Group contributions from subsidiaries Unrealized currency change, non-current loans from Group companies Realized currency change, non-current EUR term loan Realized gain (loss) on investment in money market fund Unrealized gain (loss) on investment in money market fund Realized gain/loss on interest rate swap contracts Unrealized gain/loss on interest rate swaps Realized gain/loss on cross currency interest rate swap incl. option Unrealized gains/losses FX contracts Net realized currency gains Net unrealized currency gains Gain/loss sale of subsidiary Other interest income Other financial income Total financial income FINANCIAL EXPENSE Loan interest expenses Interest expense to Group companies Realized currency change, non-current EUR term loan Unrealized currency change, non-current EUR term loan Unrealized gains/losses FX contracts Other interest expenses Other financial expenses Total financial expense Net financial items PART 03 - OUR FINANCIAL RESULTS 2023 210 702 -10 9 536 — — -4 341 -63 166 — 152 721 — 152 721 33 599 152 721 -33 599 2022 1 015 743 -10 -1 118 -7 924 -12 624 20 426 90 227 -995 290 109 431 995 290 1 104 721 243 039 — — — 243 039 103 141 995 290 10 811 2 624 — 12 624 4 657 751 35 740 — 317 89 849 7 924 8 378 1 678 Profit before tax Dividends recognized in profit or loss Net other permanent differences Other permanent differences from gain of sales of share Unrealized of adjustments of investment in money funds Change in financial derivatives Change in temporary differences Group contribution received/provided Taxable income/loss Group contribution - receivable Basis for tax expense for the year 22% (22%) tax payable Group contribution - liability Tax of group contribution - liability Tax payable after paid group contribution 256 505 — 12 552 — 41 461 -12 624 26 703 — — 4 341 7 625 73 015 — — 1 396 410 974 2 2 2 10 10 10 10 10 10 2 10 1 273 786 BREAKDOWN OF DEFERRED TAX BASIS NOK 1 000 CHANGE 2023 2022 189 196 134 897 35 373 11 298 41 430 — 5 214 2 708 2 958 — 58 396 21 178 188 3 562 285 218 221 178 125 756 1 052 608 TEMPORARY DIFFERENCES Non-current assets Profit and loss account Provisions for liabilities Cash-based options Non-current debt/amortized cost Discount bond loan Net temporary differences Basis for deferred tax in balance sheet Deferred tax assets (-) /deferred tax liabilities (+) in the balance sheet BREAKDOWN OF TAX CHARGE Tax payable Change in deferred tax, 22% (22%) 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 Total reconciled difference -7 -81 69 310 -1 584 -8 311 3 839 63 166 63 166 13 897 -3 699 325 — -9 012 16 742 -5 700 -1 344 -1 344 -296 33 599 13 897 4 098 51 593 210 702 -46 354 51 593 5 239 1 141 4 098 5 239 -3 692 407 -69 310 -7 428 25 053 -9 539 -64 510 -64 510 -14 192 243 039 -24 343 2 971 221 666 1 015 743 -223 464 221 666 -1 797 -4 769 2 971 -1 797 130 NOTE 7 SOFTWARE, AND PROPERTY, PLANT AND EQUIPMENT NOTE 8 INVESTMENTS IN SUBSIDIARIES 2023 NOK 1 000 Book value at 01.01. Additions Amortization/depreciation Book value at 31.12. ACCUMULATED VALUES Acquisition cost Accumulated amortization/depreciation Book value at 31.12. Economic life (amortization/depreciation schedule) 2022 NOK 1 000 Book value at 01.01. Additions Amortization/depreciation Book value at 31.12. ACCUMULATED VALUES Acquisition cost Accumulated amortization/depreciation Book value at 31.12. Economic life (amortization/depreciation schedule) SOFTWARE OTHER EQUIPMENT 8 357 1 592 -2 684 7 265 1 207 674 -672 1 209 56 471 18 599 -49 206 -17 390 7 265 1 209 3 - 10 years 3–5 years SOFTWARE OTHER EQUIPMENT 10 737 2 581 -4 961 8 357 2 571 659 -2 023 1 207 54 879 20 173 -46 522 -18 965 8 357 1 207 3 - 10 years 3–5 years See Note 13 for information on assets pledged as security for financial liabilities. The company has operating lease agreements, which are not recognized in the statement of financial position: 2023 ASSETS Buildings Other equipment Total lease amount charged DURATION Until 2028 3-5 years OPERATING LEASE EXPENSE 4 597 34 4 632 SUBSIDIARY Grieg Seafood Rogaland AS Grieg Seafood Canada AS Grieg Seafood Finnmark AS Grieg Seafood Sales AS Grieg Seafood Newfoundland AS Total REGISTERED OFFICE COUNTRY REGISTERED OFFICE LOCATION OWNERSHIP/ VOTING SHARE EQUITY AT 31.12.2023 NOK 1 000 PROFIT/ LOSS 2023 NOK 1 000 BOOK VALUE NOK 1 000 Norway Bergen 100 % 1 540 666 581 358 Norway Bergen 100 % 227 361 Norway Alta 100 % 1 759 215 Norway Bergen Norway Bergen 100 % 99 % 134 387 158 926 -10 591 629 151 456 223 497 297 112 519 603 1 000 20 677 981 319 3 820 555 1 345 110 2 022 531 Equity and profit/loss are based on provisional financial statements, which have been prepared in accordance with local accounting standards. See Note 13 for information on assets pledged as security for financial liabilities. NOTE 9 OTHER CURRENT RECEIVABLES OTHER CURRENT RECEIVABLES NOK 1 000 Prepaid expenses VAT * Estimated remaining purchase price for the sale of Shetland ** Other current receivables Total other current receivables 2023 6 980 1 797 — 1 667 10 445 2022 6 600 2 934 7 624 1 123 18 281 *Grieg Seafood ASA is the parent company in jointly registered VAT for the Norwegian entities of the Grieg Seafood Group. **Grieg Seafood sold its shares in Grieg Seafood Shetland UK Ltd in 2021. As at year-end 2022, the company included an estimate concerning the remaining settlement price, of which was settled in full in 2023. PART 03 - OUR FINANCIAL RESULTS 131 NOTE 10 SHORT-TERM INVESTMENTS AND DERIVATIVES NOTE 11 CASH AND CASH EQUIVALENTS SHORT-TERM INVESTMENTS AND FINANCIAL INSTRUMENTS NOK 1 000 Investment in money market funds including unrealized gain* Foreign exchange contracts Other financial assets Total 2023 — 4 341 566 4 908 2022 1 012 848 — 566 1 013 415 CASH AND CASH EQUIVALENTS NOK 1 000 Restricted deposits relating to employees' tax deductions Other bank deposits Total 2023 1 000 26 194 27 194 2022 1 000 523 823 524 823 The Company has two multi-currency group account scheme (cash pool agreement), in which Grieg Seafood ASA, the parent company of the Group, is the legal account holder. One of the cash-pool agreements do have a multi-currency overdraft facility of NOK 200 million, which is utilized with NOK 63 million at year-end 2023. See Note 13 for more information. The subsidiaries that are part of the agreement can utilize the group cash pool arrangement provided that the arrangement without overdraft cannot be net negative, and that the arrangement with overdraft facility can not exceed negative NOK 200 million. Not all subsidiaries are part of the cash pool arrangement. The 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 2023, the net amount of bank deposits in the group account scheme amounted to NOK 26 million (2022: NOK 524 million). At the same time, unutilized overdraft facility was NOK 137 million (NOK 200 million), in addition to unutilized revolving credit facility of NOK 750 million (NOK 1 500 million). See Note 16 concerning guarantee for employee advance tax deduction. See Note 13 for information on the company's credit facility and drawdown as at year-end 2023. *In 2022, the company temporarily placed surplus liquidity funds in money market funds. The company did not invest directly in bonds or securities, but through units in established money market funds. At year-end 2023, the investment in money market funds has been exited in full. FINANCIAL DERIVATIVE INSTRUMENTS FAIR VALUE BOOK VALUE FAIR VALUE BOOK VALUE 2023 2022 Interest rate options Interest rate swap contracts* Financial derivative instruments classified as current assets Financial derivative instruments classified as current liabilities Financial instruments booked at fair value in according to accounting act § 5-8. *See specification below. 4 341 23 312 27 653 — 4 341 — 4 341 — — 35 238 35 238 — — — — — SPECIFICATION ON INTEREST RATE SWAP PRINCIPAL NOK 1 000 FIXED RATE (%) BASIS OF FLOATING RATE MATURITY MARKET VALUE NOK 1 000 31.12.2023 MARKET VALUE NOK 1 000 31.12.2022 Fixed rate paid - floating rate received NOK 200 million 1.61 Nibor 3 months 28.08.2023 Fixed rate paid - floating rate received NOK 200 million 1.35 Nibor 3 months 04.03.2024 Fixed rate paid - floating rate received NOK 200 million 1.07 Nibor 3 months 05.07.2024 Fixed rate paid - floating rate received NOK 200 million 0.71 Nibor 3 months 18.12.2024 Fixed rate paid - floating rate received NOK 200 million 0.72 Nibor 3 months 18.12.2024 Fixed rate paid - floating rate received NOK 200 million 3.16 Nibor 3 months 30.08.2027 — 1 677 5 391 7 187 7 181 1 875 2 670 5 018 7 627 9 963 9 961 — Total 23 312 35 238 CHANGES IN FINANCIAL INSTRUMENTS RECOGNIZED AS FINANCIAL ITEMS NOK 1 000 NOTE Unrealized gain/loss on interest rate swaps Unrealized gain/loss on foreign currency contracts Unrealized gain on money market funds Net unrealized gain/(loss) on financial instruments Realized gain/loss on interest rate swap contracts Realized gain/loss on cross-currency interest rate swap contract incl option Realized gain/loss on investment in money market funds Net realized gain/(loss) on financial instruments 5 5 5 5 5 5 2023 — 4 341 -12 624 -8 283 26 703 — 41 461 68 164 2022 751 -21 178 12 624 -7 803 4 657 35 740 — 40 397 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. PART 03 - OUR FINANCIAL RESULTS 132 THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA Grieg Aqua AS OM Holding AS Folketrygdfondet Ystholmen Felles AS State Street Bank and Trust Comp (Nominee) State Street Bank and Trust Comp (Nominee) Morgan Stanley & Co. Int. Plc. (Nominee) Clearstream Banking S.A. (Nominee) Grieg Seafood ASA JPMorgan Chase Bank, N.A., London (Nominee) Gåsø Næringsutvikling AS Kvasshøgdi AS Ferd AS State Street Bank and Trust Comp (Nominee) DZ Privatbank S.A. (Nominee) J.P. Morgan SE (Nominee) Danske Invest Norge Vekst Six Sis AG (Nominee) J.P. Morgan SE (Nominee) DNB Bank ASA (Broker) Total 20 largest shareholders Other shareholders Total shares NOTE 12 SHARE CAPITAL AND SHAREHOLDER INFORMATION As at 31 December 2023, 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 31.12.2023 NOMINAL VALUE PER SHARE (NOK) TOTAL SHARE CAPITAL NOK 1 000 NO. OF ORDINARY SHARES Total Holdings of treasury shares Total excl treasury shares 4.00 4.00 4.00 453 788 -5 255 448 533 113 447 042 1 313 654 112 133 388 Treasury shares Grieg Seafood ASA hold treasury shares in connection to its share saving program for employees. The latest sale of treasury shares from the company to employees was in December 2023, as 107 473 treasury shares was sold through the share saving program. As at 31 December 2023, the company has 1 313 654 treasury shares. In 2022, 96 150 shares was sold to employees through the share savings program at an average price of NOK 71.10. In December 2022, Grieg Seafood purchased 385 000 shares at a weighted average price of NOK 77.76 per share of which 314 980 has been settled within year-end 2022 and the remainder was settled in January 2023. THE LARGEST SHAREHOLDERS IN GRIEG SEAFOOD ASA Grieg Aqua AS OM Holding AS Folketrygdfondet Ystholmen Felles AS Clearstream Banking S.A. (Nominee) State Street Bank and Trust Comp (Nominee) State Street Bank and Trust Comp (Nominee) Grieg Seafood ASA BNP Paribas (Nominee) JPMorgan Chase Bank, N.A., London (Nominee) Sparebank 1 Markets AS Frøy Kapital AS J.P. Morgan SE (Nominee) State Street Bank and Trust Comp (Nominee) Kvasshøgdi AS Bank Pictet & Cie (Europe) AG (Nominee) Six Sis AG (Nominee) BNP Paribas (Nominee) Skandinaviska Enskilda Banken AB (Nominee) State Street Bank and Trust Comp (Nominee) Total 20 largest shareholders Total others Total number of shares PART 03 - OUR FINANCIAL RESULTS NO. OF SHARES SHAREHOLDING 31.12.2023 31.12.2023 56 914 355 50.17% 5 160 982 2 419 585 1 923 197 1 615 271 1 512 715 1 435 586 1 313 654 1 192 532 1 171 727 1 159 872 1 116 323 1 105 349 1 078 185 996 772 921 918 853 102 842 579 800 350 753 837 4.55% 2.13% 1.70% 1.42% 1.33% 1.27% 1.16% 1.05% 1.03% 1.02% 0.98% 0.97% 0.95% 0.88% 0.81% 0.75% 0.74% 0.71% 0.66% 84 287 891 29 159 151 113 447 042 74.30% 25.70% 100.00% NO. OF SHARES SHAREHOLDING 31.12.2022 31.12.2022 56 914 355 50.17% 5 110 982 2 939 985 1 923 197 1 717 439 1 692 877 1 470 346 1 376 622 1 351 811 1 136 470 1 116 323 996 772 924 407 724 407 698 518 687 236 540 000 534 229 526 442 482 561 4.51% 2.59% 1.70% 1.51% 1.49% 1.30% 1.21% 1.19% 1.00% 0.98% 0.88% 0.81% 0.64% 0.62% 0.61% 0.48% 0.47% 0.46% 0.43% 82 864 979 30 582 063 73.04% 26.96% 113 447 042 100.00% 133 SHARES CONTROLLED DIRECTLY AND INDIRECTLY BY THE BOARD OF DIRECTORS AND GROUP MANAGEMENT 31.12.2023 31.12.2023 31.12.2022 31.12.2022 NO. OF SHARES SHAREHOLDING NO. OF SHARES SHAREHOLDING NOTE 13 NET INTEREST-BEARING LIABILITIES AND PLEDGES BOARD OF DIRECTORS Per Grieg * Tore Holand ** Marianne Ribe Katrine Trovik Nicolai Hafeld Grieg * Ragnhild Janbu Fresvik (board member from 9 June 2022) GROUP MANAGEMENT Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Alexander Knudsen (Chief Operating Officer Farming Norway) Grant Cumming (Chief Operating Officer Farming Canada)*** Erik Holvik (Chief Commercial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Nina Stangeland (Chief Strategy Officer)*** Kristina Furnes (Chief Communications Officer) 2 877 206 3 160 — — 2 117 289 — 44 372 28 015 24 272 9 857 11 135 25 614 15 833 — 5 167 2.54% 0.00% —% —% 1.87% —% 0.04% 0.02% 0.02% 0.01% 0.01% 0.02% 0.01% —% 0.00% 2 877 206 2 000 — — 2 117 289 — 40 513 25 556 23 513 NA 8 831 24 855 15 074 NA 4 711 2.54% 0.00% —% —% 1.87% —% 0.04% 0.02% 0.02% NA 0.01% 0.02% 0.01% NA 0.00% *Per Grieg and Nicolai Hafeld Grieg both own indirectly in Grieg Seafood ASA through their indirect ownership in Grieg Maturitas II AS (see Note 1 of the Group Accounts). Grieg Maturitas II AS owns 100% of Grieg Aqua AS, which is the largest shareholder in Grieg Seafood ASA representing 50.17% of the shares. Additionally, both Per Grieg and Nicolai Hafeld Grieg is represented in the Board of Directors of Grieg Maturitas II AS. Together, Per Grieg and Nicolai Hafeld Grieg therefore represents, through their indirect ownership and board representation in Grieg Maturitas II AS, 50.17% of the shares in Grieg Seafood ASA through Grieg Aqua AS. Additionally, Per Grieg has further ownership interests in Grieg Seafood ASA through shares invested privately and through Kvasshøgdi AS, bringing the total percentage of shares in Grieg Seafood ASA represented by Per Grieg to 51.06%. **Tore Holand owns shares in Grieg Seafood ASA through shares invested in Skippergata 24 AS as well as shares invested privately. ***Grant Cumming and Nina Stangeland was appointed to Group Management in 2023. PART 03 - OUR FINANCIAL RESULTS Grieg Seafood ASA has a syndicated, secured loan provided by DNB and Nordea. The syndicated financing consists of an aggregate of NOK 3 200 million in five-year senior secured sustainability-linked loans and credit facilities with maturity date in 2027. The debt structure comprises a NOK 750 million term loan (outstanding NOK 656 million), an EUR 75 million term loan (outstanding EUR 66 million), a NOK 1 500 million revolving credit facility and a NOK 200 million overdraft facility. As at the end of 2023, the company has NOK 887 million (NOK 1 700 million) available on the revolving credit facility and overdraft facility. The revolving credit facilities are non- current and may be redrawn. Of the syndicated debt, NOK 133 million is installments due the next 12 months from the reporting date. The financing carries floating interest rates, calculated as the relevant three month IBOR plus the applicable margin per interest period. The financial covenant of the facility is a minimum equity ratio requirement of 31%, measured excl. the effect of IFRS 16. In addition to the senior secured facility, the company also has a green bond (GSF01 G, listed at Euronext), which matures in June 2025. The outstanding amount of the bond loan was NOK 1 393 million at the end of 2023. The total bond issue in 2020 was NOK 1 500 million, and since the bond issue, Grieg Seafood has repurchased NOK 107 million. The bond carries a coupon rate of three months NIBOR + 3.4% p.a. The bond's financial covenant is an equity ratio requirement of minimum 30% for the consolidated Grieg Seafood Group, 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 its financial covenant at 31 December 2023. At 31 December 2023, the Group had an equity ratio of 49% (2022: 50%) while the equity ratio according to financial covenant was 53%, compared to 52% at 31 December 2022. NON-CURRENT LIABILITIES NOK 1 000 NON-CURRENT LIABILITIES (INTEREST-BEARING) Green bond loan Non-current syndicated term-loan Non-current syndicated revolving credit facility Total non-current interest-bearing liabilities Amortization effect of loans* Total non-current liabilities *Amortization effect on green bond loan and non-current syndicated term-loan. CURRENT INTEREST-BEARING LIABILITIES NOK 1 000 Current portion of non-current syndicated term-loan Overdraft facility* Total current interest-bearing liabilities 2023 2022 1 392 500 1 261 155 750 000 1 423 500 1 346 218 — 3 403 655 2 769 718 -16 742 -25 053 3 386 913 2 744 665 2023 132 753 63 113 195 866 2022 128 211 — 128 211 *The Company has two multi-currency cash pool schemes, held at two different banks. One of the cash pool schemes has a multi-currency overdraft facility of NOK 200 million. As at year-end 31.12.2023, the cash pool scheme with the overdraft engagement had a net negative cash position, classified as overdraft facility at year-end. For more information on the Group's cash and cash equivalents, see Note 11. NET INTEREST-BEARING LIABILITIES NOK 1 000 Gross interest-bearing liabilities Loans to subsidiaries Investments in money market funds Cash and cash equivalents Net interest-bearing liabilities Loans to subsidiaries, investment in money market funds and cash and cash equivalents are presented by their inverted figure in the table above. 2023 2022 3 599 521 2 897 929 -5 331 016 -2 420 009 — -1 012 848 -26 194 -523 823 -1 757 689 -1 058 750 134 MATURITY PROFILE INTEREST-BEARING LIABILITIES NOK 1 000 Green bond loan Syndicated term-loan Syndicated revolver credit facility Overdraft facility Total 31.12.2023 2024 2025 2026 2027 2028 LATER TOTAL — 1 392 500 — — 132 753 132 753 132 753 995 648 — 63 113 — — — — 750 000 — 195 866 1 525 253 132 753 1 745 648 — — — — — — — — — 1 392 500 1 393 908 750 000 63 113 — 3 599 521 MATURITY PROFILE INTEREST-BEARING LIABILITIES NOK 1 000 Green bond loan Syndicated term-loan Total 31.12.2022 2023 2024 2025 2026 2027 LATER TOTAL — — 1 423 500 — — 128 211 128 211 128 211 128 211 961 584 — — 1 423 500 1 474 429 128 211 128 211 1 551 711 128 211 961 584 — 2 897 929 Figures included in the maturity profile tables are nominal figures. Amortized cost is not included. LIABILITIES SECURED BY MORTGAGE NOK 1 000 BOOK VALUE OF LIABILITIES SECURED BY MORTGAGE 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 2023 2022 2 143 908 2 143 908 1 474 429 1 474 429 2 022 531 1 903 409 1 209 131 650 5 331 016 7 486 406 1 207 180 989 2 420 009 4 505 613 *The subsidiaries and the parent company have a joint and several liability against the credit institutions. See the consolidated financial statements Note 27 for further information about liabilities secured by mortgage. CURRENCY EXPOSURE ON LOANS TO CREDIT INSTITUTIONS NOK 1 000 31.12.2023 NOK CAD Green bond loan Syndicated term-loan 1 392 500 1 392 500 1 393 908 656 250 Syndicated revolving credit facility 750 000 750 000 — — — EUR — 737 658 — Overdraft facility Total 63 113 79 924 140 824 (87 393) (52 476) (16 068) 3 599 521 2 878 674 140 824 650 265 (52 476) (16 068) USD GBP OTHER — — — — — — — — — (1 698) (1 698) CURRENCY EXPOSURE ON LOANS TO CREDIT INSTITUTIONS NOK 1 000 31.12.2022 NOK CAD Green bond loan Syndicated term-loan Total 1 423 500 1 423 500 1 474 429 718 750 2 897 929 2 142 250 — — — EUR — 755 679 755 679 AVERAGE INTEREST RATE ON BANK AND BOND LOAN Average interest rate (NOK) Average interest rate (EUR) The effect of interest rate swaps is not taken into account in calculating the average interest rate on borrowings and credit facilities. USD GBP OTHER — — — — — — 2023 6.62% 4.15% — — — 2022 4.61% 1.77% NOTE 14 SHARE-BASED PAYMENTS Grieg Seafood ASA operates a share-based remuneration scheme with settlement in cash for the management team of the Group. Members of the management team not employed in Grieg Seafood ASA are also included in the option program. The options’ strike price is the stock market price on the date of issue, rising by 0.5% per month until the exercise date. The most recent allocation was in 2023, totalling 2 680 000 options. The final exercise date is 31 May 2026. The options have a term of two years, where 50% is vested each year. Employees taken on after the initial allocation of options are allocated options on taking up employment. The value of the synthetic stock options settles in cash is recognized as a salary and personnel cost in income statement (see Note 4) and TYPE OF LIABILITY NOK 1 000 CURRENCY INTEREST RATE MATURITY CURRENT PART NON- CURRENT PART CURRENT PART NON- CURRENT PART The cost of the executive management synthetic option scheme is expensed over the average vesting period. The liability is measured at fair value at each balance sheet date until settlement, and changes in the fair value are recognized in profit and loss. Social security tax 2023 2022 as a liability in the statement of financial position. Floating 06/2025 — 1 392 500 — 1 423 500 on options is recorded as a liability and is recognized over the estimated vesting period. Green bond loan Syndicated term-loan Syndicated term-loan Syndicated revolving credit facility Overdraft facility Total NOK NOK EUR NOK Floating 03/2027 Floating 03/2027 Floating 03/2027 Multiple Floating 62 500 70 253 — 63 113 593 750 667 405 750 000 — 62 500 65 711 — — 656 250 689 968 — — 195 866 3 403 655 128 211 2 769 718 The Black and Scholes option pricing model is used for valuation. A brokerage firm is used to perform the fair value calculation. The table below shows the movement in outstanding options in 2023 and 2022. PART 03 - OUR FINANCIAL RESULTS 135 OVERVIEW 2023 (TOTAL OPTIONS) Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (Chief Operating Officer Farming Norway) Grant Cumming (Chief Operating Officer Farming Canada) Erik Holvik (Chief Commercial Officer) Nina Stangeland (Chief Strategy Officer) OUTSTANDING OPTIONS AT 31.12.2022 229 764 80 799 88 302 49 011 39 262 86 832 — 65 788 — 380 000 250 000 100 000 100 000 100 000 170 000 170 000 170 000 100 000 135 260 775 016 1 140 000 2 680 000 Others Total OVERVIEW 2022 (TOTAL OPTIONS) GRANTED OPTIONS EXERCISED OPTIONS EXPIRED/ CANCELLED OPTIONS OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2023 — — — — — — — — — — — 59 764 — 3 302 — — 1 832 — — — — 550 000 330 799 185 000 149 011 139 262 255 000 170 000 235 788 100 000 1 275 257 64 898 3 390 118 OUTSTANDING OPTIONS AT 31.12.2021 GRANTED OPTIONS EXERCISED OPTIONS EXPIRED/ CANCELLED OPTIONS OUTSTANDING CASH-SETTLED OPTIONS AT 31.12.2022 Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (Chief Operating Officer Farming Norway) Roy Tore Rikardsen (Chief Operating Officer Farming Canada) Erik Holvik (Chief Commercial Officer) Others Total 540 000 270 000 270 000 200 000 100 000 270 000 270 000 170 000 600 000 2 690 000 ALLOCATION: YEAR - MONTH EXPIRY DATE: YEAR - MONTH STRIKE PRICE NOK PER SHARE AT 31.12.2023 STRIKE PRICE NOK PER SHARE AT 31.12.2022 2020 - 12 2020 - 12 2023 - 12 2023 - 12 Total 2023 - 05 2024 - 05 2026 - 05 2027 - 05 — 94.03 79.20 79.20 83.82 94.03 na na Cash-based options available for settlement Weighted average exercise price on outstanding options (NOK per option) — — — — — — — — — — 310 236 189 201 181 698 150 989 60 738 183 168 183 168 104 212 416 863 1 780 273 — — — — — — 86 832 — 47 877 134 709 229 764 80 799 88 302 49 011 39 262 86 832 — 65 788 135 260 775 016 OUTSTANDING OPTIONS TOTAL OUTSTANDING OPTIONS VESTED 2023 — 2022 64 898 2023 — 2022 64 898 710 118 710 118 710 118 710 118 1 340 000 1 340 000 — — — — — — 3 390 118 775 016 710 118 775 016 2023 2022 3 390 118 775 016 76.56 78.96 PART 03 - OUR FINANCIAL RESULTS NOK/OPTION AMOUNTS IN NOK 1 000 LISTED PRICE ON ALLOCATION CALCULATED VALUE PER OPTION ON ALLOCATION CALCULATED TOTAL VALUE ON ALLOCATION * TOTAL VALUE OF ALL OPTIONS AT 01.01.2023 CHANGE IN PROVISION CB-OB* EXERCISED OPTION 2023 ACC. COST RECOGNIZED IN EQUITY AT 31.12.2023 RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2023 2023 Former employees with expired options** Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (Chief Operating Officer Farming Norway) Erik Holvik (Chief Commercial Officer) Other options allocated in 2020 Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (COO Farming Norway) Alexander Knudsen (Chief Operating Officer Farming Norway) Erik Holvik (Chief Commercial Officer) Nina Stangeland (Chief Strategy Officer) Other options allocated in 2023 Total — 78.96 78.96 78.96 78.96 78.96 78.96 78.96 78.96 75.93 75.93 75.93 75.93 75.93 75.93 75.93 75.93 75.93 75.93 — 4.35 6.34 5.82 7.20 6.04 5.87 6.13 7.04 4.29 4.22 7.97 6.53 5.26 5.43 5.95 5.30 6.24 5.28 — — — 1 480 1 652 -1 488 1 078 989 720 604 999 1 042 3 519 1 632 1 055 797 653 526 923 1 011 901 624 5 227 669 663 442 354 654 606 -589 -579 -392 -316 -570 -542 1 469 -1 334 — — — — — — — — — — 803 519 390 320 258 453 497 443 306 2 877 1 056 — — — — — — — — — — — — — — — — — — — — 6 887 — — — — — — — — — — — — — — — — — — 6 887 *Amounts exclude social security costs. **The option category for the line item “Former employees with expired contracts” is equity options. All the other options in this table are options with settlement in cash. 23 777 6 510 — 163 81 84 50 39 84 65 135 803 519 390 320 258 453 497 443 306 2 877 7 566 136 NOK/OPTION AMOUNTS IN NOK 1 000 LISTED PRICEON ALLOCATION CALCULATED VALUE PER OPTION ON ALLOCATION CALCULATED TOTAL VALUE ON ALLOCATION * TOTAL VALUE OF ALL OPTIONS AT 01.01.2022 CHANGE IN PROVISION CB-OB* EXERCISED OPTION 2022 ACC. COST RECOGNIZED IN EQUITY AT 31.12.2022 RECOGNIZED LIABILITY CASH SETTLEMENT AT 31.12.2022 RECOGNIZED LIABILITY, COSTS AND KEY ESTIMATES USED FOR THE FAIR VALUE CALCULATION OF OPTIONS As at 31 December 2023, fair value of outstanding options with the right to cash settlement were NOK 8 million (NOK 7 million). In addition, social security costs is included in the recognized liability in the statement of financial position, which totaled NOK 1.4 million (NOK 0.9 million) bringing the total recognized liability to NOK 9.0 million (NOK 7.4 million). See the table below for specification of the — — — — 6 887 — liability as per the balance sheet date. 2022 Former employees with expired options** Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Kristina Furnes (Chief Communication Officer) Alexander Knudsen (COO Farming Norway) Roy Tore Rikardsen (COO Farming Canada) Erik Holvik (Chief Commercial Officer) Other options allocated in 2020 Andreas Kvame (Chief Executive Officer) Atle Harald Sandtorv (Chief Financial Officer) Knut Utheim (Chief Technology Officer) Kathleen O. Mathisen (Chief Human Resource Officer) Other options allocated in 2017 Total — 78.96 78.96 78.96 78.96 78.96 78.96 78.96 78.96 78.96 83.00 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 2.35 1 480 1 408 244 2 541 1 078 989 720 604 999 999 1 042 3 519 906 557 557 475 1 880 -240 2 202 -177 1 883 -158 1 210 -157 1 773 -193 1 917 -847 1 917 909 840 600 511 847 847 881 -274 2 921 -1 451 7 4 4 4 11 -7 -4 -4 -4 -11 3 070 9 628 1 999 999 999 999 2 998 — — — — — — — — — — — — — — 1 652 669 663 442 354 654 — 606 1 469 — — — — — 15 802 9 792 -3 283 34 135 6 887 6 510 *Amounts exclude social security costs. **The option category for the line item “Former employees with expired contracts” is equity options. All the other options in this table are options with settlement in cash. FAIR VALUE OF SYNTHETIC OPTIONS SOCIAL SECURITY COSTS TOTAL RECOGNIZED LIABILITY RECOGNIZED LIABILITY IN THE STATEMENT OF FINANCIAL POSITION NOK 1 000 Non-current liabilities Current liabilities Total 2023 6 867 700 7 566 2022 5 921 589 6 510 2023 1 312 134 1 445 2022 835 83 918 2023 8 178 833 9 012 2022 6 756 672 7 428 COSTS RELATED TO CASH OPTIONS NOK 1 000 Change in provisions Exercised options during the year Total cost excl. social security costs Social security costs Total cost incl. social security costs 2023 1 056 2022 CLASSIFICATION IN FINANCIAL STATEMENTS -3 282 Other provisions for liabilities — 34 137 Salaries and personnel expense / cash 1 056 527 1 584 30 855 -456 Public taxes payable 30 399 Salaries and personnel expense The total cost incl. social security costs in 2023 totaled NOK 1.6 million (2022: NOK 30.4 million). These costs are recognized in the income statement as an other personnel cost (see Note 4). Social security contributions are provided for on an ongoing basis based on the fair value of the options. ESTIMATES USED TO CALCULATE ALLOCATION OF OPTIONS Anticipated volatility (%) Risk-free rate of interest (%) Estimated qualification period (years) 2023 45.63% 4.00% 2.33 2022 58.29% 3.12% 1.11 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. PART 03 - OUR FINANCIAL RESULTS 137 NOTE 15 OTHER CURRENT LIABILITIES OTHER CURRENT LIABILITIES NOK 1 000 Accrued interest Other accrued expenses1 Other current liabilities2 Total other current liabilities 2023 5 286 22 686 22 27 993 2022 1 977 43 710 58 728 104 414 1Includes a liability related to a realized loss on fixed-price contracts of NOK 8 million (NOK 31 million). 2The 2022-figure includes NOK 25 million related to repurchased bonds. The repurchase was finalized in 2022 but settled in cash in 2023. In addition, NOK 28 million related to litigation and claims is accrued at year-end 2022. As at year-end 2023, no such items where present in the balance sheet of Grieg Seafood ASA. NOTE 16 GUARANTEES Grieg Seafood ASA has a guarantee relating to employees’ tax deductions on total NOK 4.4 million (6.0 million) at the end of 2023. Grieg Seafood ASA acted as a guarantor for Fiskehav SA. Total amount is NOK 7 million. The guarantee expires 9 September 2024. NOTE 17 EVENTS AFTER THE REPORTING DATE On 25 January 2024, Grieg Seafood received a Statement of Objections (SO) from the European Commission related to its investigation of potential anti-competitive behavior regarding the sale of farmed Norwegian Atlantic salmon which was launched back in 2019. The issuance of a SO is a common and formal step in the process without prejudice of the final outcome, where the European Commission sets out its preliminary view in the matter. On 9 February 2024, the Federal Court in Canada approved the settlement agreement dated 22 September 2023 entered into by the plaintiffs and Grieg Seafood regarding the proposed three class-actions in Canada. On 13 and 14 February 2024, Grieg Seafood ASA and Grieg Seafood UK Limited have received a service letter according to which certain claimants filed a claim for damages against, among other, Grieg Seafood ASA and Grieg Seafood UK Limited arising from alleged unlawful cartel arrangements in relation to the supply of farmed Atlantic salmon. In general, Grieg Seafood denies any anti-competitive conduct whether it is in regard to the European Commission’ investigation, the claim filed in the UK or any possible future claims related to this matter subsequent to the issuance of the SO. Therefore, no provision has been recognized at the current stage. We will continue to collaborate with the European Commission and follow up all processes as it deems appropriate. There have not been any other significant events after the balance sheet date of 31 December 2023. 138 PART 03 - OUR FINANCIAL RESULTSPART 03 - OUR FINANCIAL RESULTS 139 PART 03 - OUR FINANCIAL RESULTS 140 PART 03 - OUR FINANCIAL RESULTS 141 ALTERNATIVE PERFORMANCE MEASURES We believe that our financial statements only partially reflect the underlying performance of our operations, and as such some of the financial information presented in the Annual Report 2023 contains alternative performance measures (APM). The APMs represented are important key performance indicators for how the management of Grieg Seafood monitors operational and financial performance on regional and group level. Therefore, we believe that the APMs disclosed provide additional, useful information when analyzing Grieg Seafood and our business activity. APMs are non-IFRS financial measures. These measures are not intended to substitute, or to be superior to, any measure of IFRS. The APMs used by the Group have been defined by Grieg Seafood to supplement our financial reporting and the APMs could therefore deviate from, or otherwise not being directly comparable to, similar APMs disclosed by other companies. APM DEFINITION AND CALCULATION REASON FOR APPLYING APM Operational EBIT and operational EBIT/kg (GWT) Operational EBIT is calculated by adding production fee and fair value adjustment of biological assets, in addition to isolated non-operational events, such as costs (incl. impairment) of closing down sites, legal claims- and litigation costs and other non-operational items to the financial statement line item EBIT (Earnings before interests and taxes) of the income statement. Operational EBIT is reported in the Group's segment reporting (see Note 5), where a reconciliation with EBIT of the income statement is included. The operational EBIT/kg (GWT), or operational EBIT/kg, metric is the operational EBIT divided by harvested volume in kg gutted weight equivalent. The metric is calculated per farming region, for Norway and Canada, and for the Group as a whole. Operational EBIT/kg equals sales revenue/kg subtracted by farming cost/kg and other costs incl. headquarter costs/kg. The metric is reported in the Group's segment information (see Note 5), and calculated using solely figures included in the segment information. Operational EBIT (and operational EBIT/kg) is defined by Grieg Seafood. Operational EBIT and operational EBIT/kg are used by management, analysts, investors and are generally considered the industry-measures for profitability and are used to assess our performance. Operational EBIT has been defined by Grieg Seafood and exclude items as described below. We exclude these items from our operational EBIT as we believe that these items impact the usefulness and comparability of our operational- and financial performance from one period to the other, as these items have a non-operational or non-recurring nature. These items include country-specific taxation on harvest, fair value on biological assets (expected future (unrealized) gains or losses on fish not yet sold), isolated events not expected to reoccur, such as litigation and legal claim costs that arise from prior years as well as costs (incl. impairment) and phasing out seawater sites. Operational EBIT/kg is a relative metric which ensures comparability between our farming regions and across time. The metric captures operational profitability for the Group and each farming region. Operational EBIT% Operating EBIT% is calculated by dividing operational EBIT by sales revenue as reported in the segment reporting (see Note 5). Operating EBIT% is reported per region, in addition to Group level of Grieg Seafood. Operating EBIT% is used by management to assess operational performance per region as well as for the Group. Operational EBITDA Operational EBITDA is calculated by adding depreciation (and write-down) of property, plant and equipment, and amortization of licenses and intangible assets to Operational EBIT. Operational EBITDA is reported in the Group's segment reporting (see Note 5), where a reconciliation with EBIT of the income statement is included. Operational EBITDA provides a more informative result, as it does not consider the items with non-operational and/ or non-recurring nature as described for Operational EBIT. Furthermore, it excludes the impact accounting estimates of depreciation and amortization has on our profitability. Operational EBITDA% Operating EBITDA% is calculated by dividing Operational EBITDA by sales revenue as reported in the segment reporting (see Note 5). Operating EBITDA% is reported per region, in addition to Group level of Grieg Seafood. Operating EBITDA% is used by management to assess operational performance per region as well as for the Group. PART 03 - OUR FINANCIAL RESULTS 142 APM ROCE Equity ratio NIBD DEFINITION AND CALCULATION REASON FOR APPLYING APM APM DEFINITION AND CALCULATION REASON FOR APPLYING APM Return on capital employed (ROCE) is calculated by comparing operational EBIT incl. production fee to capital employed. Capital employed is calculated on annual and quarterly basis, both as a quarter-to-date figure and a year-to-date figure. The quarter- to-date figure is annualized. Capital employed is defined as total equity excl. the equity component of the fair value adjustment of biological assets, plus net interest-bearing liabilities according to the NIBD calculation method 1, as described in the NIBD section of this APM disclosure. Capital employed for the reporting period is calculated as the average of the opening and closing balances. As the salmon farming industry is a capital-intensive line of business, ROCE is an important metric to measure the Group’s profitability relative to the investments made. ROCE is used by management to measure the return on capital employed. ROCE is not impacted by capital structure, that is whether the financing is through equity or debt. The fair value adjustment of biological assets is excluded from the calculation, both in operational EBIT and as part of capital employed, as this reflect estimated future gains or losses on fish not yet sold and this is not considered useful information by the Group when assessing whether invested capital yields competitive return. NIBD/Harvest NIBD/harvest is calculated using NIBD according to methods 1-3 as described in the NIBD section of this APM disclosure. The applicable NIBD/harvest indicates which NIBD metric is used in the calculation. The NIBD/harvest is calculated in two ways: 1. NIBD divided by actual harvest volume in kg gutted weight in the last 12 months NIBD divided by guided full-year harvest volume in kg gutted weight. 2. The metric is reported as a key figure of the Group. NIBD/Harvest captures the leverage of the Group measured by the harvest capacity and is utilized when optimizing the Group’s leverage ratio. Actual harvest volume in the last 12 months indicates the leverage ratio according to proven harvest capacity, while guided harvest volume indicates the leverage ratio according to business plans as the Group are targeting volume growth in an annual basis. NIBD/harvest is, together with equity ratio and NIBD, useful to assess the financial robustness and -flexibility of the capital structure of the Group. Equity ratio captures the financial solidity of the Group. Furthermore, the equity ratio according to calculation method 2 is a covenant requirement for the Group. Equity ratio is, together with NIBD and NIBD/harvest, useful to assess the financial robustness and -flexibility of the capital structure of the Group. Net interest-bearing liabilities is a measure of the Group’s net debt and borrowing commitments, and, together with equity ratio and NIBD/harvest, useful to assess the financial robustness and -flexibility of the capital structure of the Group. The metric is reported as a key figure of the Group, and also reported in Note 27 to the Group Accounts. The Group has deducted the investment in money market funds in the NIBD calculation as from 2022. Gross investment Gross investment is equal to the Group’s capital expenditures (CAPEX) excluding lease liabilities for contracts classified as operating lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17’ definition of operational leases). Thus, the gross investment figure includes additions made on property, plant and equipment and intangible assets owned by the Group, together with long-term lease arrangements with credit institutions. The metric is reported as a key figure of the Group. The Group’s CAPEX monitoring shows that gross investments are in line with the CAPEX monitoring of the Group. The accounting impact of lease liabilities for contracts classified as operating lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17’ definition of operational leases) is excluded from gross investments, as such leases are not treated as part of CAPEX. Sales revenue/kg (GWT) The sales revenue/kg (GWT) metric is calculated as sales revenue from farming operations divided by harvested volume in kg gutted weight equivalent. The metric is calculated per farming region, for Norway and Canada, and for the Group as a whole. Sales revenue from farming operations equals the revenue directly attributable to the sale of Atlantic salmon, including the impact of fixed contracts and the margin generated by the sales department. The term "sales revenue from sale of Atlantic salmon" is also used by the Group. Group sales revenue from farming operations equals the sum of the sales revenue from farming operations per farming region according to the segment information. Sales revenue/kg is reported in the Group's segment information (see Note 5). Sales revenue from farming operation is calculated as the directly attributable revenue from sale of Atlantic salmon, and is in line with our segment reporting. For the Group, sales revenue is adjusted for income from sale of bi-products (smolt, fry, roe, ensilage) as such income are considered as cost reduction activities for our farming operation. Sales revenue/kg is a relative metric which ensures comparability between our farming regions and across time. The metric captures the price achievement- and -realization generated by the Group and each farming region. Equity ratio is calculated in two ways: 1. Equity according to the Statement of Financial Position divided by total equity and liabilities according to the Statement of Financial Position. Equity according to loan agreements divided by total equity and liabilities, ex. the impact of IFRS 16. The metric is reported as a key figure of the Group. 2. Net interest-bearing debt (NIBD) comprises non-current and current debt to financial institutions and other interest-bearing liabilities, after deducting cash and cash equivalents. Amortized loan costs are not included in NIBD. NIBD is calculated in three ways: 1. NIBD includes all long-term and current debt to credit institutions and other interest-bearing liabilities, incl. lease liabilities for contracts classified as operating lease for the lessor (which corresponds to leases under the previous IFRS accounting standard IAS 17’ definition of operational leases). This NIBD metric is disclosed in Note 27 to the Group Accounts. This NIBD metric is included in the ROCE calculation. NIBD includes all long-term and current debt to credit institutions and other interest-bearing liabilities, but is adjusted according to terms and conditions set out in the bank loan agreement. This NIBD metric is disclosed in Note 27 to the Group Accounts, and excludes lease liabilities for contracts classified as operating lease for the lessor, in addition to other adjustments made according to the loan agreement. NIBD includes all long-term and current debt to credit institutions and other interest-bearing liabilities but excludes lease liabilities for contracts classified as operating lease for the lessor. This metric is calculated as NIBD according to bullet 1 above, subtracted by lease liabilities for contracts classified as operating lease for the lessor as included in the adjustment to the covenant relating to NIBD in bullet 2 above. 2. 3. PART 03 - OUR FINANCIAL RESULTS 143 APM DEFINITION AND CALCULATION REASON FOR APPLYING APM FIGURE 3.22 NIBD ACCORDING TO METHOD 1 (NOK MILLION) Farming cost/kg (GWT) The farming cost/kg (GWT) metric is the sum of all costs directly related to the production and harvest of salmon, divided by the related harvest volume in kg gutted weight equivalent (GWT). Thus, at the regional level, farming costs equal operational costs. Other income is included in the farming cost metric as cost-reduction activities. Therefore, farming cost can be calculated as, using the segment information, sales revenue from farming operations less operational EBIT, divided by harvest volume. The metric is calculated per farming region, for Norway and Canada, and for the Group as a whole. Group farming cost equals the sum of the regions’ farming costs. Farming cost/kg is reported in the Group's segment information (see Note 5). Farming cost/kg is a relative metric which ensures comparability between our farming regions and across time. The metric captures the cost level of the farming operations. As Atlantic salmon is traded largely as a commodity, and the prices achieved largely reflect a general market price, the farming cost/kg captures the operational profitability for the Group and each farming region. Other costs incl. ownership and headquarter costs/kg (GWT) The Other costs incl. ownership and headquarters costs/kg (GWT) metric captures all costs and revenue not directly related to the production and harvesting of salmon. This includes costs deriving from activities conducted by the parent company and other Group companies not related to production, divided by the Group's harvest volume. The metric is calculated for the Group, and is reported in the Group's segment information (see Note 5). Other costs incl. headquarters costs/kg is a relative metric which ensures comparability when assessing the Group’s cost level over time. The metric captures the costs of the Group which are not deemed directly attributable to farming operations. RECONCILIATION OF ALTERNATIVE PERFORMANCE MEASURES Below, the APMs derived in absolute figures are disclosed and reconciled to the Income Statement, Statement of Financial Position and Borrowings Lease liabilities Non-current liabilities Current portion of borrowings Current portion of lease liabilities Current liabilities Loans to associates Cash and cash equivalents Investments in money market funds Amortized loan costs NIBD (method 1) FIGURE 3.23 GROSS INVESTMENTS (NOK MILLION) Property, plant and equipment Intangible assets Additions according to the Cash Flow Statement Cash Flow Statement, respectively. The EBITDA and EBIT are disclosed on the Income Statement, and are thus indirectly reconciled on Finance leases according to IFRS in force prior to 1 January 2019 that statement. Gross investments FIGURE 3.21 SALES REVENUE FARMING OPERATIONS, FARMING COST AND OPERATIONAL EBIT (NOK MILLION) 2023 Source Rogaland Finnmark Columbia Newfoundland Group British Source Statement of Financial Position Statement of Financial Position Statement of Financial Position Statement of Financial Position Note 27 Statement of Financial Position Statement of Financial Position Note 27 2023 3 492 1 111 4 603 208 300 508 -33 -216 0 17 4 879 2022 2 839 654 3 492 142 227 369 -8 -643 -1 013 25 2 223 Source 2023 2022 Cash Flow Statement Cash Flow Statement 790 2 792 88 880 562 3 564 115 679 Sales revenue farming operations Elim/Other - revenue Sales revenue Farming cost Elim/Other & Newfoundland - cost Note 5 Note 5 Income Statement Note 5 Note 5 2 305 1 947 1 468 236 1 569 1 620 1 562 Operating EBIT Income Statement Operational EBIT farming operations Note 5 736 736 327 327 -94 -94 British 5 956 1 064 7 020 5 056 1 183 780 875 305 76 -146 -94 2022 Source Rogaland Finnmark Columbia Newfoundland Group Sales revenue farming operations Elim/Other & Newfoundland - revenue Sales revenue Farming cost Elim/Other & Newfoundland - cost Note 5 Note 5 Income Statement Note 5 Note 5 Operational EBIT Income Statement Operational EBIT farming operations Note 5 2 124 2 629 1 665 2 124 1 369 755 755 2 629 1 703 926 926 1 665 1 395 270 270 0 0 NA -115 -115 NA 6 418 746 7 164 4 467 958 1 739 1 951 PART 03 - OUR FINANCIAL RESULTS 144 OUR INTEGRATED REPORTING Our integrated report covers our progress with respect to all of our pillars and material topics. 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. PART 04 GLOBAL REPORTING INITIATIVE (GRI) INDEX STAKEHOLDER DIALOGUE THE SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB) INDEX AUDITOR’S SUSTAINABILITY REPORT 146 154 155 156 GLOBAL REPORTING INITIATIVE INDEX This report has been prepared in accordance with the GRI Standards 2021. We follow the GRI Standards to report our impacts on the economy, environment and people, including human rights, allowing for greater transparency and accountability. For more information on our approach to corporate social responsibility and transparency, see our website. MANAGEMENT OF MATERIAL TOPICS With our vision of farming the ocean for a better future, we REVIEWING MATERIAL TOPICS The annual materiality review process is based on a revision demonstrate our commitment to corporate responsibility of existing material topics, in addition to an assessment of by operating profitably and sustainably in a manner that the likely material topics proposed by the sector standard, conforms with fundamental ethical norms and respect for the GRI 13: Agriculture, aquaculture and fishing sectors 2022. In individual, the environment and society as a whole. We apply the 2023, we reviewed our detailed impact assessment, where precautionary principle as our strategy for approaching issues identified and assessed sustainability topics were reviewed in of potential harm when scientific knowledge is lacking. We aim light of our negative and positive impact on the environment, to collaborate and take part in research to develop and test economy and people for the reporting year. In order to be able to new solutions. In pursuit of our vision, we will face risks and prioritize the impacts for reporting based on their significance, opportunities. Our risk management is clearly connected with a a materiality assessment impact rating tool was used, with multitude of stakeholder expectations, and the topics we have severity and likelihood as key concepts. Read more about the identified as material. stakeholders whose views have informed the process here. The revision resulted in no changes in the list of material topics The Board exercises oversight of strategic, operational and represented in bold under our pillars from 2022 to 2023. The list financial matters, including the nature and extent of major risks. is reviewed by our Board of Directors. We consider several topics The Board and the CEO have delegated responsibility to the as significant and cover our impact related to other topics not various business areas and functions, ensuring that operational included in our list of material topics in this report as well as on responsibility is an integral part for all management teams and our website. units and departments. We have implemented Group policies and targets aligned with our pillars and business strategy. Both monthly key performance indicator (KPI) report, which is EXTERNAL VERIFICATION To ensure the quality of our report and the information (both used both by operational management and the Board, and our quantitative and qualitative) provided, it is reviewed and verified published quarterly reports, are based on these policies and internally. To ensure high data quality and to enhance the targets. Deviations from targets are followed up and action plans credibility of our sustainability reporting, it has been assured by are implemented. We have a whistleblower channel, operated by our independent auditor, PwC. Our GRI Index provides further EY, available both internally for our employees and externally for information about the audit performed, where “A” refers to our stakeholders to report any unwanted behavior and breaches assurance that the disclosures are presented according to of our Code of Conduct. We also provide a grievance mechanism the GRI Standards (2021). “B” refers to assurance that the for local communities on our regional websites. quantitative sustainability disclosures, referred to from the GRI DETERMINING MATERIAL TOPICS The materiality assessment is fundamental to our holistic and integrated reporting. Together with our stakeholders, we have Index, are calculated, estimated and reported in accordance with the criteria defined in GRI or the GRI index. Reference is made to the auditor’s statement on sustainability reporting. identified our current and future positive and negative impact on the environment, economy and people, including human rights. REPORTING SCOPE AND BOUNDARY Grieg Seafood exclusively produces Atlantic salmon, accounting The topics listed under each pillar is identified as important to for 100% of its animal protein production, and has not our organization and our stakeholders, and is covered by group delegated any of its production to outsourcing. The scope of policies. The highlighted topics represents the list of material our sustainability metrics provided in this report includes the topics reported in line with the GRI standards. Find a combined environmental, social, and governance performance that has overview of our pillars, targets and Group policies here. been deemed material to Grieg Seafood's operations for the calendar year ended 31 December 2023. The metrics covers our global operations and includes wholly-owned subsidiaries. It does not include associated companies or joint ventures, as we do not have management control of these companies. There have been no mergers, acquisitions or disposal of entities in 2023 impacting the scope. No adjustments have been made for any minority interests. 146 PART 04 - OUR INTEGRATED REPORTINGLegal entities Within scope Material topic Grieg Seafood Rogaland AS Yes Grieg Seafood Rogaland Sjø AS Yes Grieg Seafood Finnmark AS Yes Grieg Seafood Finnmark Sjø AS Grieg Seafood Sales AS Grieg Seafood ASA Grieg Seafood BC Ltd Yes Yes Yes Yes Fish health & welfare, Protecting wild salmon, Protecting biodiversity & marine ecosystem, Sustainable feed ingredient, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe, Local value creation Fish health & welfare, Protecting wild salmon, Protecting biodiversity & marine ecosystem, Sustainable feed ingredient, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe, Local value creation Fish health & welfare, Protecting wild salmon, Protecting biodiversity & marine ecosystem, Sustainable feed ingredient, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe, Local value creation, Indigenous relationships Fish health & welfare, Protecting wild salmon, Protecting biodiversity & marine ecosystem, Sustainable feed ingredient, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe, Local value creation, Indigenous relationships Safe & healthy food, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe Fish health & welfare, Protecting wild salmon, Protecting biodiversity & marine ecosystem, Sustainable feed ingredient, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe, Local value creation, Indigenous relationships Grieg Seafood Sales North America Inc Yes Safe & healthy food, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe Grieg Seafood Newfoundland Ltd Yes Grieg Marine Ltd Grieg NL Nurseries Ltd Grieg Seafood Canada AS Grieg Seafood Newfoundland AS Grieg Seafood UK Ltd Grieg Seafood Sales USA Inc Grieg Seafood Premium Brands Inc Yes Yes No No No No No Fish health & welfare, Protecting wild salmon, Protecting biodiversity & marine ecosystem, Sustainable feed ingredient, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe, Local value creation Fish health & welfare, Protecting wild salmon, Protecting biodiversity & marine ecosystem, Sustainable feed ingredient, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe, Local value creation Fish health & welfare, Protecting wild salmon, Protecting biodiversity & marine ecosystem, Sustainable feed ingredient, Climate action, Responsible business conduct, Corporate governance, Human rights, Keeping our employees safe, Local value creation N/A N/A N/A N/A N/A DATA QUALITY We have implemented internal controls to ensure the accuracy and completeness of the data included in this report. Any limitations or exclusions to our reporting are disclosed throughout this report. The quantitative information provided in this report, is mainly data we have retrieved from our production-, logistics-, human resource- and financial systems. Where data has 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. 147 PART 04 - OUR INTEGRATED REPORTINGGRI CONTENT INDEX DISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. The GRI content index refers to where information about each disclosure is presented in our 2023 Annual Report, 2023 Remuneration Report, 2023 TNFD Report or company website. 2-8 Workers who are not employees We define workers who are not employees as contractors. Data reported on contractors are compiled in headcount, similarly to our employees Part 02 - Our operational results, People: The workforce at year-end 2023 Statement of use Grieg Seafood has reported in accordance with the GRI Standards for the period 01.01.2023 to 12.31.2023 GRI 1 used GRI 1: Foundation 2021 GRI 13: Agriculture, Aquaculture and Fishing Sectors 2022 Applicable GRI Sector Standard DISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. EXTERNAL ASSURANCE GRI 2: GENERAL DISCLOSURES 2021 The organization and its reporting practices 2-1 2-2 2-3 Organizational details Entities included in the organization's sustainability reporting Reporting period. frequency and contact point 2-4 Restatements of information 2-5 External assurance Part 03 - Our financial results, Note 1 General information Part 02 - Our operational results, Climate action: GHG reporting standard; Part 04 - Our integrated reporting, Reporting scope and boundary In our integrated sustainability and financial report, we report annually according to the GRI Standards. Contact points: Chief Sustainability Officer: Tor Eirik Homme, tor.eirik.homme@griegseafood.com. Group Communication Manager: Kristina Furnes, kristina.furnes@griegseafood.com. Part 02 - Our operational results, Climate action: GHG reporting standard; Part 03 - Our financial results, Note 1 General information From 2022 to 2023 we changed our definition of the percentage of production volume certified to third-party animal health and welfare standards from being calculated based on budgeted net production to harvest volume per year-end. The changes led to the inclusion of more specific information, which in turn caused a reduction in percentage. The Chief Sustainability Officer seeks external assurance of sustainability reporting according to GRI Standards, climate accounting and sustainability KPIs. Our sustainability reporting has been assured by our independent auditor PwC. Activities and workers 2-6 Activities, value chain and other business relationships Feed was our main supply category in 2023, comprising 39% of our cost. Other relevant business relationship is our investment associates 2-7 Employees We do not have any non-guaranteed hours employees Part 04 - Our integrated reporting, Auditor’s sustainability report Part 01 - Our foundation, Our value chain; Part 03 - Our financial results, Note 16 Investment in associated companies and joint ventures Part 02 - Our operational results, People: The workforce at year-end 2023 NO NO NO NO NO NO NO A A A A A A A, B Governance 2-9 Governance structure and composition 2-10 2-11 2-12 2-13 2-14 2-15 2-16 2-17 2-18 Nomination and selection of the highest governance body Chair of the highest governance body Role of the highest governance body in overseeing the management impacts Delegation of responsibility for managing impacts Role of the highest governance body in sustainability reporting Conflicts of interest Communication of critical concerns Collective knowledge of the highest governance body Evaluation of the performance of the highest governance body Part 03 - Our financial results, Corporate governance principles: 8. Board of directors: composition and independence; Webpage - Board of Directors Part 03 - Our financial results, Corporate governance principles: 7. Nomination committee Part 03 - Our financial results, Corporate governance principles: 8. Board of directors: composition and independence Part 03 - Our financial results, Corporate governance principles: 8. Board of directors: composition and independence Part 03 - Our financial results, Corporate governance: Governance structure Part 03 - Our financial results, Corporate governance: Governance structure Part 03 - Our financial results, Corporate governance principles: 9. The work of the Board of directors: Conflict of interest; Group Accounts, Note 30 Related parties; Corporate social responsibility, Corporate governance Part 03 - Our financial results, Corporate governance: Responsible business conduct Part 03 - Our financial results, Corporate governance: Governance structure Part 03 - Our financial results, Corporate governance principles: 9. The work of the Board of Directors, Annual assessment NO NO NO NO NO NO NO NO NO NO NO EXTERNAL ASSURANCE A, B A A A A A A A A A A 148 PART 04 - OUR INTEGRATED REPORTINGEXTERNAL ASSURANCE MATERIAL TOPICS DISCLOSURE RESPONSE LOCATION OMISSION GRI DISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. 2-19 Remuneration policies The remuneration policy does not have any stated principles on sign-on bonuses, recruitment incentive payments or clawbacks 2-20 Process to determine remuneration 95.5 % voted for the Remuneration report 2022 and 4.5% voted against 2-21 Workers who are not employees Strategy, policies and practices 2-22 Statement on sustainable development strategy 2-23 Policy commitments 2-24 Embedding policy commitments 2-25 2-26 2-27 2-28 Process to remediate negative impacts Mechanisms for seeking advice and raising concerns Compliance with laws and regulations Membership associations Grieg Seafood do not hold any significant role in membership associations. However, we are member of several industry associations and engage in collaboration and partnerships with researchers, peers, companies in our value chain, NGOs and other relevant actors Webpage - Executive Remuneration policy Part 03 - Our financial results, Corporate governance principles: 12. Remuneration of executive personnel Remuneration Report - Remuneration of executive personnel: Fixed pay salary; Governance: Authorization of the Board Remuneration Report -Comparative information on the remuneration paid in the last five years Part 03 - Our financial results, Board of Directors report: Main Achievements, Targets and achievements Part 03 - Our financial results, Corporate governance: Governance structure; Responsible business conduct Part 03 - Our financial results, Corporate governance: Governance structure; Responsible business conduct Part 03 - Our financial results, Corporate governance: Responsible business conduct Part 03 - Our financial results, Corporate governance: Responsible business conduct Part 03 - Our financial results, Corporate governance: Compliance NO NO NO NO NO NO NO NO NO Webpage - Partnerships and collaboration NO Stakeholder engagement 2-29 2-30 Approach to stakeholder engagement Collective bargaining agreements Part 04 - Our integrated reporting, Stakeholder dialogue Unionized employees for Norway are disclosed. Labor unions in Canada are organized differently. Therefore, a group average is not disclosed. Part 02 - Our operational results, People: Unionized employees (%) at year end 2023 NO NO A A A A A A A A A A A A GRI 3: MATERIAL TOPICS 3-1 3-2 Process to determine material topics List of material topics ANIMAL HEALTH AND WELFARE 3-3 Management of material topics Additional sector disclosures Percentage of production volume certified to third-party animal health and welfare standards We recognize the ASC-certification as the main animal health and welfare standard in our industry. We refer to our production volume as total harvested volume per 31.12.2023 in line with GSI definition, as this is the quantity of production that is made available for market distribution. The percentage is calculated as total harvested volume from ASC certified sites divided by total harvested volume. Survival rate at sea Main causes for reduced survival in seawater List of the main causes of reduced survival with loss stated in number and tonnes of fish. Use of antibiotics Grieg Seafood Indicator 009 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)". SECTOR STANDARD REF.NO. NO NO Part 04 - Our integrated reporting, Global reporting initiative index: Determining material topics, Reviewing material topics; Stakeholder dialogue Part 1 - Our foundation, Sustainable foundation Part 04 - Our integrated reporting, Global reporting initiative index: Reviewing material topics EXTERNAL ASSURANCE A A Webpage - Fish health and welfare, Cleaner fish health and welfare; Webpage - Group policies, Fish welfare of salmon and cleaner fish, Fish health of salmon and cleaner fish; Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, Our certifications NO 13.11.1 A NO 13.11.2 A, B Part 01 - Our foundation. Our sustainability scoreboard Part 02 - Our operational results, Grieg Seafood Rogaland-, Grieg Seafood Finnmark-, Grieg Seafood BC-, Grieg Seafood Newfoundland - Main causes of reduced survival in seawater Part 1 - Our foundation, Our sustainability scoreboard NO 13.11.3 A, B NO A, B NO A, B 149 PART 04 - OUR INTEGRATED REPORTINGDISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. EXTERNAL ASSURANCE DISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. EXTERNAL ASSURANCE BIODIVERSITY 3-3 Management of material topics Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas Significant impacts of activities, products and services on biodiversity Habitats protected or restored IUCN Red List species and national conservation list species with habitats in areas affected by operations Information on species of aquatic organisms, juvenile seeds stocks and fishing products in feed Number of escape incidents and fish escaped Sea lice levels 304-1 304-2 304-3 304-4 Additional sector disclosures Grieg Seafood Indicator 003 Grieg Seafood Indicator 004 NO 13.3.1 A NO 13.3.2 A, B Webpage - Wild salmon, Wildlife, White fish, Crustaceans, Impact on nature; Webpage - Group policies, Protecting biodiversity; Part 01 - Our foundation, Our sustainability scoreboard; Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, Grieg Seafood Rogaland-, Grieg Seafood Finnmark-, Grieg Seafood BC-, Grieg Seafood Newfoundland - Protecting marine ecosystems Webpage - Wild salmon, Wildlife, White fish, Crustaceans, Impact on nature NO 13.3.3 A NO 13.3.4 A NO 13.3.5 A, B NO 13.3.6 A, B NO NO A, B A, B Part 02 - Our operational results, Grieg Seafood Rogaland-, Grieg Seafood Finnmark-, Grieg Seafood BC-, Grieg Seafood Newfoundland - Restored ecosystem under farms; Protecting marine ecosystems Part 02 - Our operational results, Grieg Seafood Rogaland-, Grieg Seafood Finnmark-, Grieg Seafood BC-, Grieg Seafood Newfoundland- IUCN Red list- and national conservation list species Webpage - Sustainable marine ingredients; Part 01 - Our foundation, Our organization, Our value chain; Part 02 - Our operational results, Sustainable feed ingredients: Volume of marine ingredients Part 1 - Our foundation, Our sustainability scoreboard Part 02 - Our operational results, Grieg Seafood Rogaland-, Grieg Seafood Finnmark-, Grieg Seafood BC - Sea lice levels 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". Grieg Seafood Indicator 005 Environmental status of our sites Grieg Seafood Indicator 006 Grieg Seafood Indicator 007 Grieg Seafood Indicator 008 Hydrogen peroxide treatments Active substances used for treatments Number of dead birds and marine mammals FOOD SAFETY 3-3 Management of material topics 416-1 416-2 Additional sector disclosures Assessment of the health and safety impacts of product and service categories Incidents of non-compliance concerning the health and safety impacts of products and services Percentage of production volume from sites certified to internationally recognized food safety standards Environmental status of our sites is a result of benthic monitoring tests under and around our sites according to local regulations, as explained under the presentation of the B-test results and %-of sites that are restored in the regional chapters we refer to. 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 kg) per tonne of fish produced (LWE)". 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 gr) per tonne of fish produced (LWE)". Part 02 - Our operational results, Grieg Seafood Rogaland-, Grieg Seafood Finnmark - Results of B-test. Grieg Seafood BC-, Grieg Seafood Newfoundland - % of sites that are restored Part 1 - Our foundation, Our sustainability scoreboard Part 1 - Our foundation, Our sustainability scoreboard 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. Part 02 - Our operational results, Grieg Seafood Rogaland-, Grieg Seafood Finnmark-, Grieg Seafood BC-, Grieg Seafood Newfoundland - Sustainability scoreboard NO A, B NO NO NO A, B A, B A, B Webpage - Safe food; Webpage - Group policies, Food safety; Part 04 - Our integrated reporting reporting, Stakeholder dialogue Part 02 - Our operational results, Our certifications NO 13.10.1 A NO 13.10.2 A Part 02 - Our operational results, Sales & market: Our sales & market results NO 13.10.3 A, B Part 02 - Our operational results, Our certifications NO 13.10.4 A, B As all of our products is appropriated human consumption, the health and safety impacts are constantly tested as a part of our certification processes. We refer to Global G.A.P, BAP and FSSC 22000 as internationally recognized food safety standards. We refer to our production volume as total harvested volume per 31.12.23, as this is the quantity of production that is made available for market. 96% of harvested volume in our operating regions is certified according to Global G.A.P and BAP. 62% of harvested volume in our regions in Norway is certified according to FSSC 22000. 150 PART 04 - OUR INTEGRATED REPORTINGDISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. EXTERNAL ASSURANCE DISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. EXTERNAL ASSURANCE Part 02 - Our operational results, Sales & market: Our sales & market results NO 13.10.5 A, B 201-2 Financial implications and other risks and opportunities due to climate change No direct cost is taken in 2023 to manage climate related risks or opportunities Part 03 - Our financial results, Note 3 Nature and climate related risk NO 13.2.2 A, B NO 13.3.1 A FOOD SECURITY 3-3 Management of material topics Our commitment and lessons learned related to food security and providing healthy food with lower impact is explained through our actions taken and targets described in polices related to sustainable feed and climate action Webpage - Blue food in a transformed food system; Webpage - Group policies, Sustainable feed, Climate action; Part 04 - Our integrated reporting, Stakeholder dialogue NO 13.9.1 A Number of recalls issued for food safety reasons and the total volume of products recalled EMISSIONS 3-3 Management of material topics 305-1 Direct (Scope 1) GHG emissions Biogenic CO2 emissions (tCO2e) is not relevant for our operations. 305-2 Energy indirect (Scope 2) GHG emissions The group's market-based Scope 2 GHG emissions amount to 11 610 tCO2e in 2023. There has been an adjustment in the Canadian conversion factor for market- based Scope 2 emissions within our climate accounting system. If these changes had not occurred, the market-based Scope 2 emission would have increased significantly compared to last year. We have not acquired any guarantees of origin. 305-3 Other indirect (Scope 3) GHG emissions Biogenic CO2 emissions (tCO2e) is not relevant for our operations. 305-4 GHG emissions intensity 305-5 Reduction of GHG emissions 305-6 305-7 Emissions of ozone-depleting substances (ODS Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions Grieg Seafood does not have emissions from ODS. We do not have any significant air emissions. CLIMATE ADAPTATION AND RESILIENCE 3-3 Management of material topics Webpage - Reducing carbon emission; Webpage - Group polices, Climate action; Part 02 - Our operational results, Climate action: Climate action plan update; Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, Climate action: Scope 1 & Scope 2 emissions; GHG reporting standard Part 02 - Our operational results, Climate action: Scope 1 & Scope 2 emissions; GHG reporting standard NO 13.3.2 A, B NO 13.3.3 A, B NO 13.3.4 A, B NO 13.3.5 A, B NO 13.3.6 A, B Part 02 - Our operational results, Climate action, Scope 3 emissions; GHG reporting standard Part 02 - Our operational results, Climate action: Our greenhouse gas accounts; GHG reporting standard Part 02 - Our operational results, Climate action: Greenhouse gas emissions; GHG reporting standard; Scope 1 & Scope 2 emissions; Scope 3 emissions NO 13.3.7 A, B NO 13.3.8 A NO 13.2.1 A TCFD-report; Part 02 - Our operational results, Climate action: Climate action plan update; Part 04 - Our integrated reporting, Stakeholder dialogue NATURAL ECOSYSTEM CONVERSION 3-3 Management of material topics SUPPLY CHAIN TRACEABILITY 3-3 Management of material topics Additional sector disclosures Level of traceability Improvements projects related to certification ANTI-CORRUPTION 3-3 Management of material topics 205-1 Operations assessed for risks related to corruption Webpage - Zero deforestation and conversion; Webpage - Group polices, Sustainable feed; Part 04 - Our integrated reporting, Stakeholder dialogue Webpage - Continuous improvement in our value chain; Sustainable feed ingredients; Sustainable marine ingredients; Zero deforestation and conversion Webpage- Group polices, Sustainable feed; Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, Sustainable feed ingredients: Traceability Part 02 - Our operational results, Sustainable feed ingredients: Certifications Webpage - Anti-corruption policy; Part 03 - Our financial results, Corporate governance: Responsible business conduct; Part 04 - Our integrated reporting, Stakeholder dialogue Part 03 - Our financial results, Corporate Governance: Responsible business conduct NO 13.4.1 A NO 13.23.1 A NO 13.23.2 NO 13.23.4 A A NO 13.26.1 A NO 13.26.2 A, B 151 PART 04 - OUR INTEGRATED REPORTINGDISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. EXTERNAL ASSURANCE DISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. EXTERNAL ASSURANCE 205-2 Communication and training about anti- corruption policies and procedures Our Code of Conduct program involves guidelines and procedures for anti- corruption. The disclosure requirements is met with one minor exemption, a large share of our suppliers in purchase value has signed the Supplier Code of Conduct. We are not able to provide the exact number and percentage, nor break down by region. We will work to systemize this data going forward. 205-3 Confirmed incidents of corruption and actions taken EMPLOYEE HEALTH AND SAFETY 3-3 Management of material topics 403-1 403-2 403-3 403-4 403-5 Occupational health and safety management system 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 403-6 Promotion of worker health 403-7 403-8 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Workers covered by an occupational health and safety management system Part 02 - Our operational results, People: Code of conduct program YES, point c. 13.26.3 A, B 403-9 Work-related injuries The disclosure requirements is met with one minor exemption, 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. Part 02 - Our operational results, People: Safety indicators 2023 YES, point b. 13.19.10 A, B NO 13.26.4 A, B NO 13.19.1 A Part 03 - Our financial results, Corporate governance: Responsible business conduct Webpage - Health and safety; HSE policy Part 02 - Operational results, People: Health and safety, Our results; Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, People: Safety indicators in 2023 NO 13.19.2 Part 02 - Our operational results, People: Safety indicators in 2023 NO 13.19.3 Part 02 - Our operational results, People: Safety indicators in 2023 Part 02 - Our operational results, People: Our colleagues, Health and safety Part 02 - Our operational results, People: Our colleagues, Health and safety Part 02 - Our operational results, People: Our colleagues, Health and safety Part 02 - Our operational results, People: Safety indicators in 2023 NO 13.19.4 NO 13.19.5 NO 13.19.6 NO 13.19.7 NO 13.19.8 A A A A A A A Part 02 - Our operational results, People: Safety indicators in 2023 NO 13.19.9 A, B 403-10 Work-related ill health We have no incidents of work-related ill health Part 02 - Our operational results, People: Safety indicators in 2023 NO 13.19.11 A, B FORCED OR COMPULSORY LABOR 3-3 Management of material topics 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor CHILD LABOR 3-3 Management of material topics 408-1 Operations and suppliers at significant risk for incidents of child labor RIGHTS OF INDIGENOUS PEOPLE 3-3 Management of material topics 411-1 Incidents of violations involving rights of indigenous peoples Additional sector disclosure Location of operations Webpage - Human rights; Group policies - Human rights; Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, People: Our colleagues, Human rights; Webpage - Human Rights Progress Report Webpage - Human rights; Group policies - Human rights; Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, People: Our colleagues, Human rights; Webpage - Human Rights Progress Report Webpage - BC, Indigenous people; Finnmark, Aquaculture in Sami areas; Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood BC - Local communities Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood BC - Local communities; Part 03 - Our financial results, Corporate social responsibility: Corporate governance Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood BC - Local communities NO 13.16.1 A NO 13.16.2 A NO 13.17.1 A NO 13.17.2 A NO 13.14.1 A NO 13.14.2 A, B NO 13.14.3 A 152 PART 04 - OUR INTEGRATED REPORTINGDISCLOSURE RESPONSE LOCATION OMISSION GRI SECTOR STANDARD REF.NO. EXTERNAL ASSURANCE LOCAL COMMUNITIES 3-3 Management of material topics We report on our efforts in local communities in all of the regional chapters. 413-1 413-2 Operations with local community engagement, impact assessments, and development programs Operations with significant actual and potential negative impacts on local communities ECONOMIC INCLUSION 3-3 Management of material topics 201-2 203-3 Direct economic value generated and distributed Infrastructure investments and services supported 203-2 Significant indirect economic impacts Salmon farming has a range of significant indirect economic impacts that can affect local and regional economies in terms of economic activity, such as purchasing equipment and feed, as well as creating employment opportunities. We describe the significance of our indirect economic impacts in the context of UNSDGs and zero hunger. Part 01 - Our foundation, Our sustainability scoreboard; Sustainable foundation: Financial impact of material topics; Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood Rogaland-, Grieg Seafood BC-, Grieg Seafood Newfoundland; Part 04 - Our integrated reporting, Stakeholder dialogue Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood Rogaland-, Grieg Seafood BC-, Grieg Seafood Newfoundland - Local communities Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood Rogaland-, Grieg Seafood BC-, Grieg Seafood Newfoundland -Local communities Part 01 - Our foundation, Our sustainability scoreboard; Sustainable foundation: Financial impact of material topics; Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood Rogaland-, Grieg Seafood BC-, Grieg Seafood Newfoundland - Local communities; Part 04 - Our integrated reporting, Stakeholder dialogue Part 2 - Our operational results, Profitable operations: Direct economic value generated and distributed Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood Rogaland-, Grieg Seafood BC-, Grieg Seafood Newfoundland -Local communities Part 02 - Our operational results, Grieg Seafood Finnmark-, Grieg Seafood Rogaland-, Grieg Seafood BC-, Grieg Seafood Newfoundland -Local communities; Webpage - UNSDG NO 13.12.1 A NO 13.12.2 A TOPICS IN THE APPLICABLE GRI SECTOR STANDARD DETERMINED AS NOT MATERIAL TOPIC EXPLANATION GRI 13: Agriculture, Aquaculture and Fishing Sectors 2022 Soil health Pesticides use Soil health is determined as not material as a result of the detailed impact assessment. The scope of impact is limited to the countries where our feed suppliers source vegetable raw materials. Hence, the overall severity of the impacts is assessed to be moderate Pesticides use is determined as not material as a result of the detailed impact assessment. The severity is assessed as moderate as the use of pesticide in crop production is regulated and the scope is limited to tier-two suppliers. The approach to sea lice control is discussed under animal health and welfare, as the use of delousing chemicals is defined as medicine or disinfectant which is readily dissolvable, and not a pesticide. Water and effluents Water and effluents is determined as not material as a result of the detailed impact assessment. Grieg Seafood does not operate in water scarce areas. The nutrient build-up from fish feces is likely, however the scope is limited to local impact and restoration of sea beds allows remediation. Waste Waste is determined as not material as a result of the detailed impact assessment. In the comparison of impact level to the other material topics, waste is considered to be significant. Land and resource rights Land and resource rights is determined as not material as a result of the detailed impact assessment. The possession of farming licenses to operate ensures predictability and accountability of land and resource rights. NO 13.12.3 A Non-discrimination and equal opportunity Non-discrimination and equal opportunities is determined as not material as a result of the detailed impact assessment. The severity is high, however the likelihood is limited by human rights regulation. NO 13.22.1 A NO 13.22.2 A, B NO 13.22.3 A, B NO 13.22.4 A Freedom of association and collective bargaining Freedom of association and collective bargaining is determined as not material as a result of the detailed impacts assessment. Grieg Seafood ensures freedom of association and collective bargaining for its employees. The likelihood is limited through regulations from ILO. Employment practices Employment practices is determined as not material as a result of the detailed impact assessment. The scope is limited to our direct operations, whereas the severity is determined to moderate. Living income and living wage Living income and living wage is determined as not material as a result of the detailed impact assessment, as the scale is low and impacts concerning living income and wage is possible to counteract. Thus, the severity is determined to be moderate. Public policy Public policy is determined as not material as a result of the detailed impact assessment, as the scale is low and the impact is easy to counteract, the severity is determined to be moderate Anti-competitive behavior Anti-competitive behavior is determined as not material, as a result of the detailed impact assessment, as there is no documented indication of impact on the economy, environment and people 153 PART 04 - OUR INTEGRATED REPORTING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 We engage actively and continuously with our stakeholders, understand and address our most material sustainability issues. and always maintain an open door for stakeholder feedback. Our stakeholders span our five pillars and gaining their trust Stakeholders frequently contact us to discuss issues. We also is integral for our license to operate. Stakeholders are chosen engage stakeholders proactively on matters where we believe according to the impact they have on our business, and the we can have significant impact, such as with feed suppliers. The economic, environmental and social impact we have on the continuous dialogue with our stakeholders provides the basis stakeholders. Stakeholder dialogue is also key to be able to grasp for the materiality matrix. Ultimately, our stakeholders help us emerging opportunities for our business, and to understand and deliver healthy food and make positive impacts throughout our mitigate risk. value chain. STAKEHOLDER STAKEHOLDER MATERIAL TOPIC HOW WE ENGAGE ACTIONS EXAMPLE • All sustainability Correspondence, We collaborate with and Together with WWF ORGANIZATIONS/ NON- challenges meetings, media seek advice from actors US, we have initiated GOVERNMENTAL ORGANIZATIONS SHAREHOLDERS, INVESTORS, ASSET MANAGERS AND ANALYSTS and social media. that constructively seek to a project to evaluate improve the industry. That environmental, social includes several environmental and governance organizations and research risks in salmon feed institutions. ingredients in a holistic manner. • All sustainability Quarterly We make every effort to maintain We actively engage challenges, and presentations, a continuous, open, and honest with ESG raters, such how we utilize roadshows, dialogue about our strategy and as Sustainalytics opportunities and meetings, frequent results. We have also started and Coller FAIRR, mitigate risk dialogue, capital engaging with relevant indexes to understand their • In particular market days, and where we are rated, to make assessments and also long-term engagement with sure they give Grieg Seafood an to provide feedback performance and relevant indexes. accurate score. returns, both on financial and sustainability- related parameters on how we work with various topics. CUSTOMERS • All sustainability Customer surveys, We have frequent dialogues with We have engaged in challenges frequent dialogue, our customers. We supply them Cerrado Manifesto • In particular audits, visits and with material for dialogue with Signatories of Support, safe and healthy trade fairs. their own stakeholders, and which aims to halt food, including certifications and transparency participate in initiatives where deforestation in the our customers are present. Brazilian Cerrado. Many of our customers are also signatories to the initiative. MATERIAL TOPIC HOW WE ENGAGE ACTIONS EXAMPLE STAKEHOLDER NATIONAL AUTHORITIES / REGULATORS • All sustainability Meetings, site We have an open dialogue with We are EMPLOYEES • Keeping our Continuous dialogue Frequent dialogue on all levels We use Workplace on challenges visits, and all official authorities where committed to be a • In particular correspondence. we operate, and collaborate on constructive partner employees safe and meetings, and initiatives for training, a daily basis to inform • Fish health intranet, and education, and development. employees about balanced regulation and long-term local value creation all aspects. We welcome their for the government efforts to enforce regulations and and Indigenous engage in constructive dialogue. communities in the 2025 transition process in BC, and to find a path forward that works for all stakeholders. LOCAL AUTHORITIES / COMMUNITIES • All sustainability Dialogue with We recognize public concern Through our website, challenges special interest for the oceans, invite visitors and in particular the • In particular local groups locally, to our farms and participate regional websites, employee surveys. We also engage in dialogue developments, build with trade unions and employee culture, and cultivate representatives. Focus on engagement. developing a culture in line with our values. and welfare, and all other sustainability challenges • Significant topics include embracing diversity and creating attractive jobs value creation, open meetings, in the public debate about we aim to improve SUPPLIERS • Responsible Dialogue, meetings, Ensuring that they comply with We have quarterly indigenous site visits, and salmon farming. We try to find transparency and business conduct conferences and our Code of Conduct, and that we meetings with our feed relationships and co-existence with other local interests dialogue through mainstream media and digital channels. solutions to accommodate other local interests. In areas with Indigenous populations, consent, dialogue and relations with Indigenous representatives are especially important. dialogue with our local communities. • Local value creation correspondence. 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. suppliers, where we discuss issues and developments. 154 PART 04 - OUR INTEGRATED REPORTINGSASB INDEX The Sustainability Accounting Standards Board (SASB) functions as an autonomous organization responsible for establishing standards. Its primary goal is to advocate for the disclosure of essential sustainability information to cater to investor requirements. The SASB standards is classified as Sustainability Accounting Standards and is a part of the The International Financial Reporting Standards (IFRS) Foundation and is under stewardship of the International Sustainability Standards Board (ISSB). In the table provided below, specific indicators are cited from the SASB standards for the Meat, Poultry & Dairy industry, representing a comprehensive standard applicable to the entire industry. Consequently, only certain aspects of these disclosures are relevant to Grieg Seafood. Nevertheless, we remain committed to enhancing further SASB-related disclosures that hold relevance for our business. DISCLOSURE CODE METRIC DESCRIPTION LOCATION RESPONSE Greenhouse gas emissions FB-MP-110a.1 Gross global Scope 1 emissions FB-MP-110a.2 Discussion of long- and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets Part 02 - Our operational results, Climate action: Scope 1 & Scope 2 emissions; GHG reporting standard See GRI 305-1 Partial overlap with GRI 201-2 Part 02 - Our operational results, Climate action: Climate action plan update Part 03 - Our financial results, Note 3 Climate related risk; TCFD Report Energy management FB-MP-130a.1 Food safety FB-MP-250a.2 FB-MP-250a.3 (1) Total energy consumed, (2) percentage grid electricity and (3) percentage renewable Part 02 - Our operational results, Climate action: Scope 1 & Scope 2 emissions Partial overlap with GRI 302-1 Percentage of supplier facilities certified to a Global Food Safety Initiative (GFSI) food safety certification program Part 02 - Our operational results, Our certifications See GRI 416-1 (1) Number of recalls issued and (2) total weight of products recalled Part 02 - Our operational results, Sales & market: Our sales & market results GRI Sector 13.10.5 Workforce health and safety FB-MP-320a.1 (1) Total recordable incident rate (TRIR) and (2) fatality rate Part 02 - Our operational results, People: Fatalities; Safety indicators 2023; H1- Factor/LTIR See GRI 403-9 Animal care and welfare FB-MP-410a.3 Percentage of production certified to a third-party animal welfare standard Part 02 - Our operational results, Our certifications GRI Sector 13.11.2 Animal feed & sourcing FB-MP-440a.1 Percentage of animal feed sourced from regions with High or Extremely High Baseline Water Stress Webpage - Zero deforestation and conversion FB-MP-440a.3 Discussion of strategy to manage opportunities and risks to feed sourcing and livestock supply presented by climate change Activity metric FB-MP-000.A Number of processing and manufacturing facilities FB-MP-000.B Animal protein production, by category; percentage outsourced Webpage - Sustainable feed ingredients; Sustainable marine ingredients; Zero deforestation and conversion Part 02 - Our operational results, Our certifications Part 04 - Our integrated reporting, Reporting scope and boundary 155 PART 04 - OUR INTEGRATED REPORTING156 PART 04 - OUR INTEGRATED REPORTINGHISTORY AND FUTURE 5000 B.C.E First fish farms reported in China. 1850 The first wild salmon hatcheries 1969 The brothers Ove and Sivert Grøntvedt 1970s Commercial salmon farming of chinook, 1973 The Norwegian parliament adopts 1990s Fish vaccines are introduced. As a established in Norwegian salmon rivers. transfer the first salmon smolt to sea coho and sockeye is established around a licensing system for the country's result, the salmon farming industry pens at the island Hitra in Norway. Sechelt in British Columbia. growing aquaculture industry, with the has significantly reduced its use of aim of strengthening local communities antibiotics. along the coast. Since then, salmon farms have contributed jobs and revenues to small, coastal communities. 2007 Grieg Seafood is listed on Oslo Stock 2006 Grieg Seafood merges with the Volden 2001 Grieg Seafood acquires Scandic Marine Exchange. Group and establishes Grieg Seafood Ltd. in British Columbia and establishes Grieg Seafood acquires Hjaltland Ltd in Finnmark. Grieg Seafood BC. Shetland, the beginning of Grieg Seafood Shetland. Grieg Seafood starts implementing RAS technology in Rogaland. 2000s The Norwegian government launches 1998 Grieg Seafood Rogaland is established. the “green license” scheme, with stricter environmental standards. Grieg Seafood currently has eight green licenses. 1992 Grieg Seafood Salmon (trading company) and Bioinvest (salmon farming investor) are established. 2010 Together with Bremnes Seashore, Grieg 2013 The Norwegian government and the 2020 Grieg Seafood acquires Grieg 2021 Grieg Seafood disposes Grieg Seafood 2023 Grieg Seafood harvest its first salmon 2030 Grieg Seafood aims to have reduced total Seafood establishes the sales company industry develop the standard NS9415 Newfoundland in Eastern Canada, and Shetland to focus operations on the ever in Newfoundland. carbon emissions by 35%. Ocean Quality. to ensure fish farms are technically establishes Grieg Seafood Newfoundland. regions with most growth potential, safe and prevent the escape of farmed Grieg Seafood establishes its own sales Norway and Canada. salmon. and market organization, and the Ocean Quality partnership is dissolved. Industry Grieg Seafood The future 2050 Grieg Seafood aims to have reduced total carbon emissions by 100%. 157 PART 04 - OUR INTEGRATED REPORTING2023 

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