CEO’s perspective

IMPROVED OUTPUT POTENTIAL AND STRONG POSITION FOR FURTHER GROWTH

AHS-Sirkler

Acting CEO Atle Harald Sandtorv

2014 has been an eventful and challenging year for Grieg Seafood. Salmon prices remained high throughout most of the year but were slightly reduced due to general volatility and barriers in the Russian market towards year-end. At the fish farms our employees handled challenges in association with winter storms, hot summer with high sea temperatures and low weight gain, as well as different disease. The output was somewhat reduced from the plants in Rogaland and Shetland, and BC has implemented a successful turnaround that yielded increased biological stability. The company has implemented solid measures which counter the challenges for the weakest localities. New licenses and untapped production potential of existing licenses constitute the basis for further growth in 2015.

Anyone doing salmon farming is aware that every day brings new challenges. The industry is subject to considerable uncertainty associated with biological production, changes in salmon prices, political trade barriers, as well as financial risks such as changes in interest and currency exchange rates. To Grieg Seafood, it is all about drafting realistic plans to control risks and avoid the biggest surprises. Our employees are working continuously and are determined to maintain a normal situation where the fish are healthy, eat well and stay inside the cage. Good plans and procedures make up the cornerstone to succeed in these efforts and to preserve a stable and safe platform for our production. In 2014 Grieg Seafood carried out a refinancing which provides a good basis for further growth. The company has also strengthened its equity during the year.

Grieg Seafood aims to become the best fish farmer in our four regions. By doing things satisfactorily the first time and adapt to changing circumstances, our employees can be proud to tell their neighbors, friends and family that they work in the best business of the industry in their region. The business culture which we promote focuses on continuous improvement and to honor those who propose and implement improvements. By sharing knowledge within the region and across the entire Group, we reduce the risk of adverse surprises and enhance our chances for success both regionally and globally. When our endeavors pay off, we can be sure that the outcome serves many people. Farmed fish is considered the most promising nutritional commodity for the world’s growing population. A desired and necessary increase in salmon production depends on our ability to strengthen output without inflating the negative impact on the environment and fauna. When we succeed in this, Grieg Seafood´s employees add values to the world community.

2015 is going to be a good year for Grieg Seafood. We will complete a series of ongoing projects, including a new IT platform which will extend interaction between localities, companies and regions, create a basis for benchmarking our performance and highlight the best from our business. We will also optimize the ratio between production of young fish and fish in the sea, which will provide all regions with sufficient smolt deliveries. We will adopt new technology and marine sites, and we will upgrade capacity with four new licenses in Finnmark and a new location in Scotland. With the establishment of Ocean Quality in the US market from 2015, the sales company now covers all our four regions.

Grieg Seafood´s main goal is to improve license utilisation and reducing costs through continuous improvement of our biological presentations. The strategic priority is to continue to increase production on existing licenses in Norway, in addition to completing the promising turnaround in Shetland and BC. The long-term market conditions are on our side – the momentum of demand is not just a question of salmon prices, but rather a consequence of increased accessibility to new markets, new products that make cooking easier, and last but not least that salmon is tasty and healthy food. On the supply side, we currently see increased shipments from Chile, but in the longer term it is constantly harder to see how supply growth can meet the growth in demand.

We will work on many exciting projects together, and we will continue to demonstrate that Grieg Seafood is a good place to work.