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Henning Beltestad: Welcome to Leroy Seafood Group's First Quarter Presentation 2025. My name is Henning Beltestad and I'm the CEO of Leroy Seafood Group and with me today I have Sjur Malm, CFO, which will take us through the key financial numbers. First of all, I will take you through the highlights and then Sjur will take us through the key financial highlights and then I will come back and talk about outlook going forward and to indicate what we believe about the future. First of all, Leroy is creating the world's most efficient and sustainable value chain for seafood. That is our task every day we go to work. Our fully integrated value chain is our competitive advantage and we really see that today with increased supply that this is a good advantage for us when the volume is getting bigger. So our customer is seeking sustainability and health, quality, traceability, stability and availability and convenience. And we believe that our value prediction can give that in speed and cost efficiency, reliability and trust, product category innovation and traceability and quality assurance and clear ESG commitments. So our fully integrated is a perfect match for our key customers. And then about the highlights of the quarter. We had a strong biological performance starting to show results. Spot prices for salmon and trout well below last year, record earnings in the VAP sales and distribution segment 12 months rolling, low quarters in wild catch offset by significant price increase, positive cost development in farming and expect to continue in 2025. And the Board has proposed a dividend of NOK2.5 per share. And the quarter, the operational EBIT of the quarter is NOK1.049 billion, which is good performance compared to first quarter 2024. Leroy is reporting in three segments farming, wild catch, VAP, sales and distribution and we start with the farming highlights this quarter. This has been a quarter where spot benchmark prices is about NOK90 lower compared to first quarter '24. We have seen clear improvement in biology starting to show in our harvest result. We have seen the highest net production in sea in the first quarter ever, reduced mortality, declining cost and higher superior share. And we see positive biological development quarter-to-date in second quarter '25 encouraging for cost and volume development in 2025 and shielding technology is showing good results. If we go into the different regions and the companies, we see Leroy Aurora. We have had a strong biological development, a record net growth in first quarter, high survival rate, continued high license utilization, quarter-on-quarter cost decrease and a lower cost expected quarter-on-quarter in second quarter '25 and also expect lower costs in '25 compared to 2024 and keep our estimated volume of 50,000 tons. So clearly, a good performance in the quarter and also good expectations for further improvement going forward even though a good result behind us. And if we look at the harvest volume, it's about 7,000 tons compared to 6,000 tons last year and an average weight of 4 kilo compared to 4.6 kilo last year and an EBIT all inclusive of about NOK30 in the quarter compared to NOK44 same quarter last year. Then we have a mid region Leroy Midt, also here strong biological performance, record net growth also in this region in the quarter, high survival rates continue, high license utilization and we see continued positive results from shielding technology and the quarter-on-quarter decrease in cost on good biological development and expect slight higher cost into second quarter '25 and the estimated harvest volume is kept at 75,000 tons. In total in the quarter, we harvested 16,000 tons compared to about 13,700 ton in same quarter last year. And also higher average weights with 4.4 kilo compared to 4.1 kilo and an operational EBIT value chain of NOK32, which is about the same level as first quarter '24. And then Leroy Sjotroll in Southwest region, really glad to see the improvements in this region. So significant increase in growth rates, high survival rates and higher license utilization into 2025. And the biological improvement is showing in the results, cost down quarter-on-quarter, expect cost at same level in second quarter. But then you use significant potential for cost reduction in 2025 as a whole. So we are really glad to see the development in Leroy Sjotroll and the estimated harvest volume is about 70,000 ton. The harvested volume in a quarter is close to 15,000 ton compared to 6,700 ton, so a great increase in volume in this quarter and an EBIT all inclusive of NOK18 compared to NOK9 in first quarter last year. So yes, great improvement. Scottish Sea Farms 50% owned by Leroy, here also increase in harvest volume with good harvest weights, strong biological development with next generation of fish performing well, significant year-on-year decrease in price realization in this quarter. Volume in '25 is impacted by reorganizing site structure and long-term potential significantly higher than the level that we see on 32,000 ton, which is the estimate for 2025. And in this quarter, we achieved operational EBIT of NOK9 compared to NOK19 first quarter last year and the main reason for the decrease is the price realization. Then if we look at the farming and the guiding numbers to summarize that 2025, Leroy Aurora 50,000 ton, Leroy Midt 75,000 ton and Leroy Sjotroll 70,000 ton and a total of 195,000 ton and we all know about our target, which is 200,000 ton and we believe if we continuously work with improvements like we do today, our target should be within reach. So right now, we are in a good position and have a great fundament for achieving our goal of 200,000. And our share of Scottish Sea Farms is 16,000 ton, so a total of 211,000 ton. Wild Catch, of course a challenging segment at the moment because of significant quota reduction. The catch volume for trawling fleet, raw material price and volume in the land industry is affected by these reductions. 2025 will be challenging. Higher prices has partly offset the impact of lower quotas for trawling, but still it's really challenging for the industry to take out the price level -- the increased price level and the reduction in availability of fish to get -- to be at a very high level in this segment in 2025. So cod quota in '25 is down 32%. 25% stems from overall industry quota reduction and 7% due to reallocation from the trawler fleet to the coastal fleet under new regulations. And header quota is down 2% in 2025. And EBIT in a quarter -- operational EBIT in a quarter is about NOK150 million. And if we see at the prices for the key species, the cod price is close to NOK80, haddock is close to NOK60 and saithe is about NOk30, which is strong increase in price level compared to same quarter last year. The Wild Catch quotas and the Catch volumes for first quarter, we catch the 3,600 ton cod, 5,400 ton saithe, 3,400 ton haddock and a total of 90,000 ton compared to 24,000 ton last year. But the good thing is to look at the remaining quotas compared to 2024. We have a 5,300 ton cod compared to 6,000 ton last year and saithe13,000 ton compared to 10,000 ton, saithe and haddock 2,700 ton. So we have more remaining quota this year compared to same period last year. And taking into consideration that the fairly good first quarter and the remaining quarter means that we are in a good situation compared to last year if we take the quota situation into consideration. Then sales processing, we have operations in 70 countries and sell to more than 80 markets all over the world. And this has been investments done over 20 years and we feel now that we really have a strong position in all the key markets for seafood. The new thing in this segment is the branch office in South Korea, in Vietnam and in Thailand. And the main reason for this is to take out the potential of this market to drive the innovation and the market development together with our partners in this market. And this is also very crucial for our trout operation that we have to create new markets for trout from Norway. The VAP, sales and distribution had a strong quarter. We continue the positive development in the segment with operational EBIT of first quarter of NOK212 million compared to NOK176 million first quarter '24, so a great improvement in first quarter '24 and first half '24 profitability supported by the high capacity utilization of Norwegian processing capacity following a high share of quality downgrades. But this year, there is less quality downgrades and we see now that most -- the profitability growth is more from the capacity utilization and high demand in our downstream units in this segment and we see that really, really improving in mainly all of our operations out in the market. So there's been a strong start of the year with a record 12 month rolling operation, strong demand in the end markets, positive development in emerging markets, strong positioning with strategic customers globally and effects of structural improvements really starts to work in a different operation and expectations for continued profitability trend in 2025. So I feel that we have a really strong position out in all our key markets and a team that's really focused on building the markets and the category for seafood. So then Sjur.
Sjur Malm: Yes, thank you, Henning. So we are 6,000 employees and we work daily on creating sustainable food for global population, but we also work with structural improvement initiatives. And while we were not happy with the results we posted perhaps particular in 2023 and we through 2024 have talked about signs of improvement, we are pleased to report this quarterly figures showing that the improvements are starting also to show in the financial results. At this slide, we can see the key value drivers on the latter line. We must keep in mind that the spot price for salmon is down NOK19 compared to corresponding quarter last year. And despite that, you can see that margin through the value chain for salmon is more or less unchanged. That is very positive. That is a reflection of a significant cost cut in farming and in particular in Leroy Sjotroll. It's a reflection of significant improvement in quality and share of superior. It's an increase in harvest weights and you can also see the biological improvement in the harvested figure, which is up 50% almost compared to last year. It's also a reflection of good work in our downstream operations. If you look on the Wild Catch part, we see margins are more or less even with last year, volumes are down following a lower quarter. In this, it's important to highlight what's written about in the report that we have a negative inventory effect of around NOK50 million in Q1 this year compared to last year and when that inventory is sold, it will lead to also a profit. So all in all a good quarter also in Wild Catch given the low quotas. So this sums up to the EBIT Henning already has mentioned of NOK1.050 billion, the result we are pleased with given the price development and we also see there's a healthy development in EPS and the return on capital employed was around well 15% this quarter. At the balance sheet, I will focus on what's changed. You see compared to last year, we have a higher standing biomass, which is building working capital compared to last year and you see biological asset cost up just above NOK800 million. We also see the effect of the investments we are doing in the targeted initiatives. I will return to them, but you see tangible fixed assets are up and you also see the size of balance needed to run this operation and total asset of around NOK40 billion. We believe we have a strong balance sheet, investment-grade rating, equity ratio of just above 50%. Looking down on cash flow, we are pleased with cash flow development this quarter. There is a working capital build compared to the corresponding quarter last year. But compared to fourth quarter, our standing biomass has remained high and we have held good working capital control while operation in downstream is growing. So it's a strong operational cash flow. Our return to investments and you see the effect of financing cost and the IFRS 16 effects. In sum, net interest bearing debt is reduced by NOK700 million this quarter. This shows our planned CapEx. There are no changes, but it highlights our priorities also. We have a maintenance CapEx of around NOK1 billion that has increased measured in NOK due to weaker Norwegian kroner. We are investing in all parts of operation. We are developing the whitefish operation and now we are coming to an end when it comes to the upgrades of these factories. We are investing also downstream, but we are particularly investing in farming, in initiatives in shielding technology and in improving quality of smolt. And we believe the results this quarter are showing that these investments are having good returns. Then there is debate particularly in Norway to which degree this industry make economic footprint. So this slide is just highlighting in 2024 the fact that our 3,900 employees and our activity in Norway contributed in total with around NOK2.5 billion in tax in 2024. In addition to that, there are significant ripple effects through our NOK18 billion in acquisitions from companies all around Norway as the dotted line shows and we see the total value creation in Norway is close to NOK15 billion and generating around 10,000 jobs. So this is an important industry in Norway and Leroy is important both for Norway and for many coastal communities. There is a new aquaculture paper. In that paper, there are suggestions on quite significant changes in how licensing regime in Norway will work. And we support the view of the industry organization Sjomat Norge, which basically is that there is need for more evaluation and considering consequences before, there's any major principal decision being made. And we also believe the development we are showing in these results, which Henning will return to in a few minutes, they are showing that there are incentives and it's possible to do quite a lot of positive work also in the current regulation. So with that, Henning, I give the word back to you on outlook.
Henning Beltestad: Thank you. Then I will go through the outlook going forward and we start with our strategic targets. I will not go into details about all of these. We try to give you a kind of reporting every quarter now how we are on the way to reach the targets and we feel that after first quarter that we are in a good position for the rest of the quarters for 2025 and also for what we're going to achieve going forward after that. But we focus, of course, keeping our long-term goals and objectives out there at the same time as we focus a lot on the operational improvements to get to our targets. And where are we, if we look at VAP, sales and distribution, we have a target of NOK1.250 billion EBIT target and where are we, the last 12 months rolling is about NOK924 million and one year ago we were at NOK723 million. So we have the directions towards our goals this year and we work hard with the short-term action and also long-term actions. I don't go in details with that, but we have a good drive in the whole segment and people are motivated and I'm really impressed by what they achieve every quarter going forward also. So we work hard and we believe that this is achievable. If we look at the farming, we have a target of 200,000 ton. We were at about 171,200 ton last year. So that means improvement or increased volume of close to 30,000 ton. This is going to be done through operational efficiency through adjustment or improvements in ROE in small production and new technology in sea. And is this achievable? Yes, we believe it's achievable. This has been a long-term program to achieve this goal. This is showing where we will get the results on harvested fish from the different initiatives that's done on genetics, raw smolt shield technology and the implementation of Leroy way and we see that we are on track on the improvement as we expected for first half. And hopefully, there is no guarantee, but we will see greater improvement for second half of 2025. And if we look at first quarter with the total improvements in farming segment, it's been very good quarter for us compared to the average of the last five years. We have a net growth 30% higher, mortality is 33% lower, superior share is 11% higher and the biomass at sea is 7% higher. So this shows that we are taking out the improvements as expected. And if we look at the shielding technology, we started to harvest much more in first quarter and now we report on harvested fish of shielded and not shielded. And if we compare the harvested fish, we see that we reduced lice treatment of 75%, the superior share increased by 20% and the average harvest weight increased by 8%. So that's a great improvement and the results are really promising. So we believe that what we have done in new technology and especially in submerged technology is making beneficial and improving the way we operate the farming segment. And if we look at farming shielding technology, increased share of harvest volume from shielding technology. In first quarter, we were at about 30% and plan for 2025 is about 35%. And then we see the total production of salmon and trout of Leroy. And we are focusing on three technology, submerged farming, semi contained farming and Lhasa delousing in north of Norway. So we invested a lot into this kind of technology that we really believe in and we see that this is showing more and more good results. And then at the end, we take up the supply side and expectations for '25 and also '26 and the global supply growth of 6.4% for '25 and about 2% for '26. But we also have seen the last couple of months that we have had a tremendous increase in supply and so the big question is, will this last? And if we look at the monthly harvest volumes from Europe, we see that we had an increase of close to 17% first four months. And if you look at April, it was up almost 30% and we see that the growth compared to last year will be lower going forward. So we expect that we build a lot of markets now, which will make a huge potential for the demand in the second half of the year. We also see on the market side, the markets are taking out the volume. There is -- yes, both in EU other markets and also in U.S., it's a stable growth in the markets the first three months. But if you look at -- dig into the other markets, we see especially one market that is really speeding up and that is China and China has a huge potential also going forward and we see that in April and in May that the growth in the Chinese market is three to four times what it was in the same weeks last year. So China is really taking a strong position as the number one market from Norway. And that's good to see and also to summarize shortly about the different segments, farming, we have had a good parade behind us. We also see that the position with the fish in the sea and what is coming forward is in a good position. So that feels good. Wild Catch, of course, challenging with the quota situation, but we are doing what we can out of the reduced quota that we have and we feel that we are doing a good job. VAP, sales and distribution is showing big momentum, more available supply and also building markets both in Asia and also in Europe and other markets. And we have a strong belief in what we're going to do in this segment and all the three different segments going forward. So that's what I have. Thank you very much.
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