Grieg Seafood — Earnings Release 2019

Nov 7, 2019

Grieg Seafood ASA: Q3 2019 results - Solid earnings driven by strong performance in Norway

Grieg Seafood ASA: Q3 2019 results - Solid earnings driven by strong performance in Norway

Highlights

* Harvest volume of 21 000 tonnes (16 900 tonnes)

* EBIT/kg NOK 7.32, down 22% from Q3 2018

* Earnings impacted by lower spot market prices

* Strong biological performance in Norway and biological improvements in

British Columbia

* Improved biological situation in Shetland resulted in lower cost

* Expected harvest volume of 82 000 tonnes in 2019, 10% growth from 2018

* 2020 harvest guiding of 100 000 tonnes remains

* Launch of GSF 2025 strategy, targeting cost leadership and harvest volume

above 150 000 tonnes

* Dividend of NOK 2.00 per share

Financial results

The Grieg Seafood Group harvested 21 028 tonnes GWT in Q3 2019, an increase of

24% compared to 16 941 tonnes in Q3 2018.

The average realized price was down in Q3 2019 compared to Q3 2018, mainly

driven by lower average spot market prices. Revenues amounted to NOK 2 011

million, an increase of 27% compared to the same period last year, driven mainly

by higher harvest volume.

Farming costs during the period (total cost related to fish harvested this

quarter) remained stable compared to the same quarter last year.

The Group's EBIT before fair value adjustment of biological assets was NOK 154

million (160) during the quarter, corresponding to an EBIT per kg of NOK 7.32

(9.43). EBIT from the four regions includes value creation from the respective

sales activities of the Group's jointly-owned sales company, Ocean Quality.

The Board is authorized by the Annual General Meeting to pay out additional

dividends during 2019 based on the financial statements for 2018. Based on the

financial position and the market outlook, the Board has decided to pay a

dividend of NOK 2.00 per share.

Commenting on the Group's performance, CEO Andreas Kvame, said:

"The third quarter was yet again characterized by solid performance for our

Norwegian operations, with strong biological performance and continued high

survival rates. Our post-smolt strategy in Rogaland is developing well and in

Finnmark another two sites were ASC certified during the quarter - a testament

to our strict focus on sustainability.

We also began to see biological improvements in BC, for which 2019 has been

characterized by challenging environmental conditions. These improvements are

the result of diligent, persistent work by our dedicated employees as well as

extensive operational and technical solutions implemented to combat issues such

as algae and low oxygen levels."

Strategic priorities

Improving sustainability is key to increasing our profits. By focusing on

reducing our environmental impact and improving fish welfare, we aim to increase

harvest rates and reduce production cost. Short term, our goal is to increase

production to 100 000 tonnes with a production cost at or below weighted

industry average.

We aim to provide our shareholders with a competitive return on capital invested

and have set a ROCE target of 12%. Our investments reflect our growth strategy:

digitalization, post-smolt, biosecurity and fish welfare, including continuous

evaluation of expansion opportunities.

Post-smolt improves biosecurity and survival rates and allows for a more

efficient farming cycle. Increased growth on-shore also frees up sea water

capacity. Digitalization in salmon farming includes applying advanced sensors,

big data, artificial intelligence and automation, with the aim of generating

better farming decisions.

With a strict focus on biosecurity and fish welfare, Grieg Seafood aims to

achieve strong biological performance through the implementation of a broad

range of technological and operational initiatives, including large smolt, GSF

Precision Farming and other preventive operational measures aimed at combating

sea lice and algae. The group targets an average survival rate in seawater above

93%.

GSF 2025

Grieg Seafood aims to build on its existing platform for continued sustainable

growth and cost improvements going forward. With an ambition for global growth,

Grieg Seafood aims to strengthen its market position while driving increased

value creation as a global supplier of sustainably farmed salmon.

Grieg Seafood's strategy for 2020-2025 is based on an ambition for sustainable

salmon farming and comprises three key strategic objectives for continued growth

and business development: Global growth, cost leadership and value chain

repositioning.

Commenting on Grieg Seafood's strategy, CEO Andreas Kvame, said:

"For several years, we have been working towards our 2020 targets of harvesting

100 000 tonnes at a cost at or below industry average, with the underlying

ambition of building a platform for sustainable growth beyond 2020. Although we

have faced some biological challenges in Shetland and BC, our 2020 harvest

target is well within reach and costs at our Norwegian operations are developing

in line with our ambitions.

We are now looking beyond 2020 and setting the direction for the next five years

as we launch our GSF 2025 strategy. We will aim to build on our existing

platform to ensure continued growth and cost improvements and harvest more than

150 000 tonnes by 2025. To scale our global operations, we will grow organically

as well as through M&A activity. Furthermore, we will work to reposition Grieg

Seafood from a pure commodity supplier to an innovation partner, increasing our

presence downstream through partnerships, category development and brand

cultivation. Thus, we aim to drive increased value creation as a global,

integrated supplier of sustainably farmed salmon."

Outlook

The global supply of Atlantic Salmon for 2019 is expected to increase by

approximately 7% compared to 2018. With outlook for continued strong underlying

demand, combined with limited growth potential in the short- to mid-term, prices

are expected to increase going forward.

The Group's total share of fixed price contracts in Q3 2019 was 30% in Norway

and 20% in the UK. The share of fixed price contracts for the full year 2019 is

estimated at 22% and 24% for Norway and the UK, respectively.

During Q3 2019, 6 million smolt with an average weight of 180 grams were

transferred to sea. Year-to-date, 17 million smolt have been stocked to sea. For

the full year 2019, a total of 26 million smolt, with an average weight around

190 grams, is planned stocked.

Grieg Seafood expects to harvest approximately 82 000 tonnes in 2019. Expected

harvest volume for Q4 2019 is 24 400 tonnes, comprised of:

* Rogaland: 7 300 tonnes

* Finnmark: 10 400 tonnes

* Shetland: 3 000 tonnes

* BC: 3 600 tonnes

Results presentation

CEO Andreas Kvame and CFO Atle Harald Sandtorv will present the results today at

08:00 CET at Hotel Continental, Stortingsgaten 24/26, Oslo.

The presentation and subsequent Q&A will be held in Norwegian and can be

followed live via webcast at www.griegseafood.com or at

https://webtv.hegnar.no/presentation.php?webcastId=98164401

It will be possible to ask questions online.

An English transcript of the presentation will be made available at

www.griegseafood.com within a few days of the presentation.

For further enquiries, please contact:

Andreas Kvame, CEO

Cell phone: +47 907 71 441

Atle Harald Sandtorv, CFO

Cell phone: +47 908 45 252

About Grieg Seafood

Grieg Seafood ASA is one of the world's leading salmon farmers, specializing in

Atlantic salmon. The Group has an annual production target of 100 000 tonnes

gutted weight in 2020. Our farming facilities are in Finnmark and Rogaland in

Norway, British Columbia in Canada and Shetland in the UK. 834 people are

employed by the Grieg Seafood Group (inkl. Ocean Quality). Grieg Seafood ASA was

listed at the Oslo Stock Exchange in June 2007. Our headquarters are situated in

Bergen, Norway. The business development of Grieg Seafood ASA focuses on

profitable growth, sustainable use of resources and being the preferred supplier

to selected customers.

To learn more, visit www.griegseafood.com

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.