Welcome to Lerøy Seafood Group's First Quarter Presentation 2026. My name is Henning Beltestad. I'm a CEO in Lerøy Seafood Group, and with me today, I have Sjur Malm, CFO. First of all, I will take you through the highlights and also give you a short strategy and targets update. Sjur Malm will take you through the key financial highlights, and then I will come back and take you through some outlook for going forward. First of all, Lerøy Seafood Group is a leading global provider of high-quality seafood with a long history, reaching back all to 1899. We are 6,000 employees, NOK 34 billion in turnover, and had last year an operational EBIT of NOK 2.5 billion.
We catched close to 60,000 tons of whitefish, 195,000 tons production of salmon and trout, and had a VAP processing volume of 340,000 tons. We are a global company. Our goal is to create the world's most efficient and sustainable value chain for seafood, We are continuing improving our value chain and getting into new markets around the world. Lerøy is a unique company, integrated both in red fish and in whitefish, we have invested heavily the last 20-25 years. Our values are open, honest, responsible, and creative. Highlights of the quarter. It's been a quarter with a strong biological development in farming.
First quarter, we harvested close to 40,000 tons compared to 38,000 tons last year. We have increased expectation for profitability in Wild Catch after a good quarter. There has been some pressure on gross margins in some units in VAP, Sales & Distribution. We keep our harvest guidance of 195,000 tons in Norway. The board propose NOK 2.5 per share as a dividend for 2025. We achieved EBIT, operational EBIT of NOK 858 million compared to NOK 1.05 billion in first quarter 2025. A fairly good quarter for us so far.
On our Capital Markets Day we presented our updated strategy. We are at a good place at the moment. We have a proven execution model of Lerøy Way and how we work with the continuous improvements in the whole value chain. We're at a good place there after eight years of hard work. We updated the strategy framework with the strategic priority on growth, cost, simplify, and leadership. We also sharpened the financial framework with a focus on return on investment, CapEx discipline, strategic alignment, and portfolio thinking. This is the base for our direction going forward and it's communicated well out to the whole company.
On Capital Markets Day, we presented new targets for 2030 and also 2026. We will quarter by quarter give you update on where we are. Of course, it's a little bit early after one quarter, but we keep our route to 220,000 ton in Norway. We are at 196,000 ton today and 197,000 ton rolling. NOK 1 billion cost base reduction through initiatives in 2026. We realized NOK 173 million. We are on the track to NOK 50 billion in turnover, and we also have a good speed in VAP, Sales & Distribution. If we look at the cost reduction progress, we had a good start.
We realized NOK 173 million through so far through first quarter. We identified and have execution and on NOK 586 million, and we have a gap to target of NOK 241 million. We have a motivated organization that's step-by-step now and are implementing, you know, this cost culture in the whole value chain. We believe that it's achievable to reach the goal of NOK 1 billion target. I will go through the different segments. We start with the Farming, then Wild C atch, and then we take VAP, Sales & Distribution.
The Farming highlights for the quarter, we have a continued strong biology. Strong growth rates, low mortality, high harvest weight, 4.8 kg compared to 4.2 kg the same quarter last year, and year-on-year improvement in quality, but some maturation on the trout which have given a little bit downgrades in Lerøy Sjøtroll. The prices in the quarter is NOK 4 lower than the same quarter last year with reference to SSB price. As expected, quarter-on-quarter cost increase and lower share of volume from Lerøy Aurora, and harvest guidance is reiterated at 195,000 tonnes. We go into the different regions, and we start in north with Lerøy Aurora. Continuous strong biological development in first quarter, strong growth rates, high survival rates, high superior share, and high harvest weights.
We see the harvest weights has been going from 4 kg- 5.3 kg this quarter compared to first quarter last year. Cost in Q1 lower than Q1 2025 and lower than fourth quarter if adjusting for utilization effects of infrastructure. We expect a marginal cost increase in second quarter. Estimated harvest volume is 49,000 tonnes. The operational EBIT in the quarter is NOK 24 per kilo compared to NOK 29 per kilo last year. Lerøy Midt also a strong biological development in the quarter, strong growth rates, high survival rates, high superior share, and high harvest weights. Here we have been going from 4.4 kg- 4.9 kg. The cost in first quarter is marginally higher than first quarter 2025 and in line with fourth quarter 2025. We expect marginal quarter-on-quarter cost reduction in second quarter.
The estimated harvest volume for the year is 73,000 tonnes compared to 71,000 tonnes 2025. We also need to take the operational EBIT, which is a strong performance in this quarter, close to NOK 23 per kg compared to NOK 32 last year. Lerøy Sjøtroll, also here a strong biological development through the quarter, strong growth rates, high survival rates, and higher harvest weights. For the harvest weights, we go from 4.1 kg- 4.4 kg. Expect marginal cost reduction for second quarter and potential significant cost reduction for second half 2026 if the biological trends continue like we see today. Price achievement in trout is influenced by maturation in this quarter. Estimated harvest volume of 73,000 tonnes. Scottish Sea Farms, weak quarter on low volumes and high cost stock. It's been a challenging year of 2025. The volumes are down 36% to 5,400 tonnes.
Low volume impact unit cost, particularly on wellboat and processing. Harvested fish impacted by challenging situation in, as I said, in 2025. The next generation of fish is performing well. We estimate volume of the year to be at 43,000 tons compared to 33,000 tons last year. A strong improvement in volume in 2026. Yeah. Then to update the Farming volumes, we estimate 195,000 tons 2026, about the same level as 2025. Total with our 50% share of Scottish Sea Farms of 217,000 tons. Then if we go to sales and processing operation, we have sales and processing operation in 80 countries and sales to more than 80 markets. To have a good spread in markets is good to have when you have a situation like today with a lot of unpredictability globally at the moment.
We see that to have a big spread on available market is a good thing to have, both with operations but also with branch offices in overseas markets. For this quarter, it's continued growth in volumes and in revenue, but the operational EBIT is reduced from NOK 212 million in first quarter 2025 to NOK 160 million in 2026. Many units, increasing profitability, but a negative impact on gross margins in some units, and also affected by increased logistic costs to some high-margin markets. We believe we have a strong position.
We have handled the situation in first quarter in a good way and everyone in this segment are really working hard, you know, to stabilize, you know, the end of the value chain even though it's fluctuating exchange rates and changes in cost of especially transport to the overseas markets. Wild Catch, a very good quarter. Strong performance in light of the quota situation. The catch volumes are down, prices are significantly up. We also see clear operational and financial improvements in land-based industry. We also are affected by increased fuel costs toward end of the first quarter and of course, especially for the fishery side, for the trawlers.
Challenging operation conditions, operational EBIT increased from NOK 148 million- NOK 228 million, very good and strong performance in this quarter. We increased the profit expectations for the year as a whole. Yeah. If we look at the catch volumes in the quarter, we caught 14,000 ton compared to 19,000 ton same quarter last year. The remaining quarter for 2026 is 20,000 ton compared to 21,000 ton in 2025. Sjur Malm will take you through the key financial highlights.
Yes. Thank you, Henning. I'll sum up into our P&L and balance sheet the comments already given by Henning. If you look on our P&L, key drivers are shown on the lateral lines. We see that the profitability per kilo in salmon and trout, which here includes the profitability downstream, is lower per kilo than last year. The key driver for this is lower price realization. We also have a slightly higher cost position and a lower margin per kilo downstream. I will return with more details on the latter. We harvested also a slightly higher volume. In Wild Catch, as commented, we have low quota, low volume, but price development has been very strong, which has given a high margin increase.
In sum, this makes our operational EBIT at NOK 858 million compared to NOK 1.05 b illion last year, where lower price is the key driver. We also see that the decline in EBITDA percentage-wise is a bit smaller, and we are doing investments, particularly in Farming. I'll comment on those later, which we yet have to realize the full potential of. On the balance sheet, there are no big changes. We see that total asset is around the same level as last year. The investments, particularly in Farming, is increasing tangible fixed asset. Our biomass is a little bit lower in volume and in value. Other inventory is a bit lower than same period last year, but in the quarter, we built some working capital related to whitefish inventory.
In general, we are investment grade rated company. We have a strong balance sheet and equity ratio of 50%. Looking into changes in interest-bearing debt, I think the key point to comment on this slide is the change in working capital, and that is majority driven by inventories in the whitefish, which is seasonal. CapEx, I will return to comment, and in general, we reduced our debt from NOK 8 billion- NOK 7.7 billion in this quarter. This shows our historic CapEx and best estimate for 2026. There are no changes on this slide from previous quarter. As said then, we had guided for NOK 2 billion in CapEx in 2025. There are some periodization effects moving some of that into 2026, which makes the best estimate as of today at around NOK 1.7 billion.
On top of the maintenance level, at around NOK 1 billion in Lerøy, we are investing in new technology. The biggest investment this year is the closed containment system Aquatraz, where we are building three units, and the first will be operational in 2027. We are also making some investment in Wild Catch related to new and more efficient engines, as well as capacity for cooking more prawns, which has a higher price realization. We are also making some investment in expansion to follow the growth that we see downstream. This slide is also then targeted a bit for Norway, where there are at times are discussion on the ripple effects from our industry. We just want to highlight that Lerøy and this industry has very strong ripple effects in Norway.
The dots highlight where we operate and where we have suppliers. We have employees in 50 municipalities. We operate in 50 municipalities and have employees in 190 municipalities. We bought goods and services for NOK 20 billion in Norway last year. Tax impact from our company and our employees was around NOK 2 billion in 2025. This is a very important industry for Norway. At the Capital Markets Day, we gave some more insight into the drivers of profitability in our downstream segment. For those who would like more details on that, please look into that presentation. We divide it into three segment: primary processing, which is basically fillets and slaughtering. Sales & Distribution, which is sales, distribution, logistics, globally.
The consumer products, which is a lot outside Norway, but we also have some units in Norway which are processing raw materials then into finished, products. this shows the overall profitability drivers for the segment, and Henning has already commented upon them on them. We see down to the left that the 12 months rolling revenue is on a continued positive trend. That is good. we also see that the profitability, trend is a little bit lower, this quarter, which is a reflection of then a lower operational EBIT this quarter compared to, same quarter last year. I give some insight into that.
Looking then at those, three parts of this operation, starting with Sales & Distribution, we see that sold volumes shown up to the right is showing a healthy development, around 8% growth in volumes. Revenue is up, 7%, so, the lower profitability is not a reflection of poor demand or poor volumes. If you look then into the drivers of the profitability shown down to the right, we also see that OpEx per kilo is reduced, but that the key driver is the lower gross, lower gross margin per kilo. That lower gross margin per kilo is basically driven by two things.
One is the logistic cost into some of the higher margin markets, and the other part is related to the fact that this is not then only Lerøy's volume, but we are a buyer of production grade volume in Norway. The availability of those volume has been significantly reduced in the first quarter, which is a reflection of the very strong biological development also for Norwegian Farming. Looking into consumer products, also here it's a healthy and positive volume and revenue growth. We also see a slightly lower profitability this year. That is mostly related to one unit and related to access to whitefish, which has been lower due to low catch volumes and having some impact on gross margins there, while other units are performing very well.
We see also here OpEx per kilo is reduced. Gross profit per kilo is also reduced. In sum, the EBIT is marginally down from last year. Within the primary processing side, we see that the EBIT is at level with last year on a slightly higher volume. No big changes there. During Q2, we will integrate also this activity from Lerøy Midt and Lerøy Nord, and that segment will then be, that part of this segment will then be larger. Also on Capital Markets Day, we gave some insights into the driver of our Wild Catch segment. On the Wild Catch segment, it is challenging to estimate profitability from quarter- to- quarter, basically because timing of the fishery and sales of fishery is challenging.
If you look at the year, it's much, much easier. What we highlighted there, and again, I refer to the Capital Markets Day presentation for more details, was a simple model on how to estimate profitability for the year. That profitability is basically a reflection of catch values, the cost of the trawling operation, the result in the land-based industry, and depreciation and amortization. At the Capital Markets Day, this model indicated an EBIT level of NOK 250 million-NOK 300 million in 2026. There has been some changes, and we just highlight these changes. Our new estimate for the year is NOK 250 million-NOK 300 million, but it's increased by NOK 100 million to NOK 350 million-NOK 400 million.
The drivers for that is the increased catch values. Here we have given some estimate on catch volume in 2026, and we highlighted what prices were in Q1 2026. If you look, for example, on shrimp, to make one comment on that, the price level for the year will be lower because this is a quarter where we sold only consumer-graded shrimp, and for the year we will also sell industrial-grade shrimp, which has a lower price point. Still it highlights that price level is vastly higher in the start of 2026 than what we saw last year, and that catch values are then significantly increased. An estimate and indication then for the year is that catch values will be significantly up despite the lower quota. On the negative side, we know fuel prices have increased a lot.
Havfisk is using MGO as fuel. Towards late quarter, we saw a significant increase in fuel price. With what we've seen so far and forward prices for 2026, we get to a best estimate as of today that fuel costs should be around NOK 10.50 per liter, and that consumption should be around 38 million a liter. That means that the fuel cost will be around NOK 130 million higher in 2026 than in 2025. Summing up these two factors into that model shown on the previous slide, the best indication today is that the EBIT in this segment would be in the range of NOK 350 million-NOK 400 million in 2026. I give the word back to you, Henning, for outlook.
Thank you very much, Sjur . I will summarize a little bit and to see a little bit forward, going forward. First of all, we start with the supply of Atlantic Salmon globally. We have had 2025 with strong growth in volumes of 12% in globally. We see Norway was up 12%. Faroe Islands up 30%. Chile up 15%. Then we had a reduction in U.K. A very strong growth in 2025 and we passed 3 million tons of volume for the first time.
For 2026, it's a small increase, as we estimate, or Kontali estimate a 2.4% increase and for 2027, a small increase of 1%. We believe that going forward for the Farming side, we believe that with the development that we are doing in the markets, we believe that we can develop even more. We have a good momentum in the overseas markets and especially in China. For you know the demand of farmed salmon, I see that will see as that will increase going forward.
The most important thing is, of course, you know, the strong biological performance that we see is continuous and we are very happy for that. We also have a good speed now with the cost reduction program gradually impact cost of harvested fish with a lower cost from second half of 2026 and then into 2027. We keep our harvest volume at the 100 estimate of harvest volume of 195,000 ton. Even though there might be a little bit upside in these numbers, if the biological situation continues in the strengthening like it's been so far.
The total volume is close to 270,000 tons, including our 50% share in Scottish Sea Farms, which also are showing great improvement in biology so far in this quarter and also into this quarter that we're in today. The Wild Catch a very strong quarter and we believe with the quota situation that the prices will stay high. We see strong operational development in the industry segment with the nine factories and believe that yeah there is still a huge potential of improvements going forward. VAP, Sales & Distribution are, you know. We have a good structure.
We have a good setup in European markets with distribution and processing centers and in the overseas markets with the branch offices. The increased demand for integrated sustainable value chain is strong and we see a strong demand in emerging markets and some tailwind on lower than expected prices in 2025. For 2026, expectation of continued growth and slightly lower margins, but we have a good speed in that segment also. This is just summarizing, you know, long and medium term ambitions. We believe, as I said, the Farming, it's for the short term. We are on good track for the long term also.
It is long term, 2030, but we really believe with that, with the hard work that we do in the value chain, you know, it will drive us to reach the 220,000 ton goal. The Wild Catch, it depends, of course, of the quota, and but the indicative operational EBIT for 2026, as Sjur said, is adjusted to NOK 350 million-NOK 400 million. A good performance in this segment and we will keep up a good speed. For VAP, Sales & Distribution, a little bit down in 2026, but we keep our goal and believe that this is possible to achieve.
With the investments that we have done, with the potential to improve all our units in Europe for distribution centers, we believe that also the long-term goal is really achievable. That was all and thank you very much for spending time together with us.