Then I have the pleasure wishing you welcome to Lerøy Seafood Group's third quarter presentation 2026. My name is Henning Beltestad. I am CEO in Lerøy Seafood Group, and with me today I have Sjur Malm, CFO. First of all, I will take you through the highlights in the quarter, then I will give you a short strategic update, and Sjur will take us through the key financial highlights. Then I will come back and talk a little bit about the future and the outlook for our business. First of all, this is Lerøy. We are a fully integrated seafood company, which are operating globally, and we are a total of 6,000 employees.
Had a turnover last year of NOK 34 billion and operational EBIT of NOK 2.5 billion, and a total processed volume of 340,000 tons, and a harvest volume of Atlantic salmon and trout of 195,000 tons, and Wild Catch of 57,000 tons. Then I will go into highlights of the quarter. It has been a quarter with strong biology and lower cost in Farming compared to third quarter 2025. It has been a very strong quarter in Market Operations of an EBIT of NOK 446 million compared to NOK 410 million same quarter last year. Wild Catch is a challenging quarter for Wild Catch. We have also adjusted down the prognosis for the full year to NOK 315 million and NOK 350 million on a lower price for saithe, cod, and haddock, and a higher fuel cost. It has been a quarter with strong salmon demand and slowing growth point to a tighter market.
I will come back to more details about that later today. We have in the quarter reduced the net interest-bearing debt by NOK 676 million. The result in the quarter, operational EBIT, is NOK 459 million compared to NOK 15 million same quarter last year, so a strong improvement. Earlier this year, we have a Capital Markets Day in Lerøy. We will try to give you update every quarter on the performance and the direction of this work. I think this time the most important or the closest target is the NOK 1 billion reduction in cost, which is for this year. We see that the work that we are doing in Lerøy, all employees are doing on the process, on reducing the cost reduction is really impressive. We believe that, yeah, we are close to the target already and believe that this is really within the reach.
I just have to say and give a great thanks to all our employees that implemented this cost focus in the whole value chain. It is really impressive how we as a team has worked achieving this goal. Lerøy is a fully integrated seafood company. We report in three segments. Farming, Wild Catch, and Market Operations. First of all, I will take you through the Farming highlights. It has been a quarter with strong biology and lower cost, and a very low mortality, and a very good improvement in fish health. Prices up year-on-year, but lower than second quarter 2026. SSI price is up NOK 4.2 year-on-year and up to NOK 67 per kilo. So, we had a price increase, and when we also look at the export volume, which is up 12%, shows that there is a really strong demand for Atlantic salmon and trout globally.
The cost in the quarter is in line with the second quarter 2026 and significantly lower than the third quarter last year. We keep our harvest guidance for 2026 of 195,000 tons and guide the same level for 2027. If we go into the different regions, we start with Lerøy Aurora. It has been a good biological development in the quarter. Lower growth due to low sea temperatures, but a good biological performance and also achieved high harvest weights with 4.5 kg. The cost is up from second quarter 2026 and third quarter 2025. We expect a lower cost in fourth quarter, and the cost levels 2026 is on the same level as for 2025. The harvest guidance in this region is reduced by 2,000 tons down to 5,000 tons, mainly because of lower sea temperatures through third quarter and into fourth quarter.
We increase our guiding up to 53,000 tons for 2027. If we look at the operational EBIT, it is NOK 12.3 in third quarter compared to NOK 9.5 in third quarter last year. If we go into Lerøy Midt, it has been a quarter with good biological performance, higher growth rate than in third quarter 2025, so a good underlying performance in the quarter for growth. Lower sea lice levels and fewer treatments. It is good. The cost is up from second quarter, but well below third quarter 2025. We expect slightly lower cost in fourth quarter and 2026 cost level lower than 2025. So we are on the right track. The harvest guidance 2026 is 76,000 tons, which is up 3,000 tons, and we have a guidance for 2027 at 74,000 tons. This quarter is affected by lower harvest weight.
We had a harvest weight in average of 3.9/kg compared to 4.1/kg last year. We have taken out some groups with lower performance in growth and prioritized to take them out. The EBIT is NOK 6.7/kg value chain compared to -NOK 3/kg in the same quarter last year. Lerøy Sjøtroll, a good biological development. Trout is 45% of the harvest volume. Growth somewhat dampened by low temperatures during the summer, but that also might have a positive impact on what is coming going forward. The cost is significantly down from both second quarter and third quarter 2025 to the lowest level in many years in this region. We expect higher cost quarter-on-quarter in fourth quarter. Trout prices with premium compared to salmon. Harvest guidance is reduced by 1,000 tons to 69,000 tons, and for 2027, 68,000 tons.
If we look at the harvest weights, it is 4.3 kg, which is fairly good, and that also the same harvest weights that we had last year. It is great to see the performance in this quarter, which is a low price quarter. We achieved NOK 12 EBIT in value chain compared to -NOK 1.5 last year. So great improvement, and so far this year, a fairly good year and underlying good biological situation for Lerøy Sjøtroll, which really are on the right track. Scottish Sea Farms, it has been a challenging quarter. The harvest volumes is up 79,000 tons to 193,000 tons. The results are negatively impacted by incident-based mortality sites with biological challenges in third quarter, harvested out in October. So also the beginning of fourth quarter is affected by this situation, but we see improvement and a normalization going into November.
The fish generation for 2026 is performing really well. That is a good situation for what comes going into next year. Operational EBIT of NOK 30 million compared to NOK 8 million last year, which is an EBIT per kilo of NOK 1. We expect higher and better results going forward from Scottish Sea Farms, and we really believe that that also is the situation, especially with the good performance on the 2025 generation, no, 2026 generation fish. The guidance for 2026 is taken down by 3,000 tons to 40,000 tons, and we raise our guiding to 45,000 tons for 2027. If we look at the total guidance, we see that the split between the regions in 2026, 50,000 tons Lerøy Aurora, 76,000 tons in Lerøy Midt, 69,000 tons in Lerøy Sjøtroll, and a total of 195,000 tons.
We keep the same guiding for 2027, so 195,000 tons, and for the full year 2027 with our share of Scottish Sea Farms, full guiding of 218,000 tons. We look into the Market Operations. We have operations in 18 countries, sales to more than 80 markets. We had a quarter with a very good performance, and revenue is down year-on-year, impacted by lower harvest volume and strengthening NOK. The operational EBIT in the third quarter of NOK 446 million versus NOK 410 million last year. It is a great performance and is also in line with our guidance earlier this year. The EBIT margin of 5.4%, really impressive. We would love to keep it on 5%+ for the full year.
It is a hard job to get there, but I think the whole segment is really working well, reducing operational expenses and improving the profitability. I believe that that could be in reach in the future. Year-on-year improvement mainly from higher earnings in primary processing. The Wild Catch highlights this quarter, seasonal weak quarter operational EBIT of -NOK 20 million compared to NOK 3 million last year, and operational EBIT year-to-date of NOK 347 million, up 16% from last year. The 2026 estimate reduced to NOK 315 to NOK 350 million on lower prices than assumed, and especially for haddock.
If we look at the catch volumes, we have a total of 10,000 tons in third quarter, 13,000 tons last year, and we have a remaining quarter in 2026 of 12,000 tons, and it is in line with the quarter that we had at the same time, the remaining quarter as we had in 2025. Sjur will take us through the key financials.
Yes. Thank you, Henning. I think trying to sum up this third quarter of the things we can control, most have developed in line or better than expected, and we are happy with that in this quarter. Looking into the financial, summing up what Henning already has said, we can see the key drivers, value drivers on the latter line. We see on the harvest volume for S almon and trout, it is down 8%, and that is a reflection of us building biomass in the third quarter, and then basically an objective of utilizing our license capacity fully, and I believe that prices will be higher going forward than what we saw in Q3. If you look into the margin, that is substantially up from last year.
It is positive to see that that margin expansion comes from both a significant reduction in cost in the Farming segment and also from higher prices. Those higher prices are realized in a market with a substantial increase in export volumes out of Norway and a strong underlying market. In the Wild Catch segment, we will return to the forward-looking statement. This quarter is low season. Prices have been reduced, and that is impacting the margin, and the volume is impacted by the fact that quotas are at a very low level. This sums up to operational EBIT of NOK 459 million, a very big improvement from last year. If you look on the revenue, it is down 3%. That is a reflection both of a slightly lower harvest volume, but also the strengthened Norwegian krone. Return on capital employed, 6% this quarter. We are not happy with that.
This is also then typically a seasonal low when it comes to profitability, but we are happy to see the vast improvement from last year. In our Capital Markets Day this year, we talked a lot about capital control and reducing capital bind in our operation, and we are happy with development as shown here. As of Q3, we can see total non-current asset is reduced. Year-over-year, we can see total current asset is increased, but we also see that it is cash that is the key driver for that increase. We believe we have a very strong balance sheet. We are investment graded. We did a green bond this quarter, and we are happy with cash flow this quarter, which is also highlighted here from the EBITDA.
We have released NOK 300 million in working capital, and also CapEx is lower than what we saw corresponding quarter last year. In sum, we reduced our net interest-bearing debt significantly through the quarter. Looking more into CapEx , there are some big items coming toward the end of the year, which is the Aquatraz. They just arrived in Norway, and the finalization of the Aquatraz closed containment systems will be finalized, some delivered before New Year and some after, and that could impact timing of CapEx , and that could make this CapEx lower this year from timing effects. But we also see that overall CapEx is, we are slightly below this plan. As of today, there is some downside to this estimate for 2026.
This slide is here to show that this industry has significant ripple effects in Norway, highlighting all the suppliers we acquire goods from, and the fact that the industry has significant ripple effects in Norway, and that those ripple effects are seen both along the coastline, but also in all of Norway. This slide, we have been doing kelp production, particularly on the west coast country of Norway since 2013, together with Bellona. We believe kelp has interesting potential, both when it comes to having positive impact in the fjords we grow it, but also as a resource for both human consumption and for feed. This is a good example of circular economy. In Norway, the fjord with the biggest challenges perhaps is outside the capital in Oslofjord.
We are pleased to see that although in a small scale, tomorrow we will start together with Bellona growing kelp in the Oslofjord. If this is scaled, it has substantial potential to improve the conditions in the Oslofjord. At the Capital Markets Day, we gave more data and more information on what we do and how we operate in our Market Operations segment. It is basically primary processing, Sales & Distribution, and Consumer Products in downstream factories. For those who would like more input, please see the Capital Markets Day presentation. I will just give a short update on key drivers this quarter. Henning has already highlighted the overall development. Perhaps the most interesting on this slide is the split on operational EBIT. We can see that primary processing is increasing significantly from last year.
A key driver in that is that we have organized all primary processing as of 1st of January in this segment, and that has a positive effect implicit that we moved two factories in Lerøy and Lerøy Midt to Market Operations has a positive impact on primary processing of NOK 52 million this quarter. That is a key reason for that increase, but we also see that that new organization will help us realize cost synergies in the time to come. If you look on Sales & Distribution, it is about the same level as last year. On Consumer Products, we see a significant improvement from Q1, Q2. It is still lower than last year, and that is, key driver for that is that we had very helpful contract positions in Q3 last year where prices were much lower than expected. That is as previously communicated.
Overall, significantly higher profitability level Q3 compared to Q1, Q2, and a development in line with what we stated in previous quarters. I will just make some brief comments on the key drivers in each of these. Sales & Distribution, our harvest volume of Atlantic salmon and trout is down, so volumes are a little bit down. We see OpEx levels is in line with last year. A marginal increase in gross profit is positive, but overall profitability level measured as operational EBIT in line with last year. In Consumer Products, we can see volumes are about the same as last year. Here you can see the effect of the contracts already mentioned, meaning that gross margins are lower this year than last year. You can also see that we have good control on operational costs, which also are lower than last year.
Within primary processing, as said, some more activity starting from January this year, and that is impacting positively on volume. We can see we have a positive development in cost, which is good, and that has a positive impact on margin. A little bit also on Wild Catch. Again, I would like to highlight the Capital Markets Day for those who would like to look really into it. We have then It's challenging to measure our Wild Catch segment from quarter- to- quarter. The truth is that quarters are annual, so on an annual basis, it's easier to understand the value drivers, while quarters will be dependent on when volumes are fished and sold, and that could change a bit from year- to- year.
What has happened this year, we said as of Q2, based on this kind of like market prices, we indicated the operational EBIT we see on the price development seen in Q3 and expectations as of today for Q4. We see that particularly price and price realization, Q3, Q4 is lower than what was indicated in spot prices as of Q2. In addition, we see that fuel consumption is higher than what we estimated previous quarter. In sum, that means that using this model on indicated prices, best indication as of today is that operational EBIT in Wild Catch would be in the range NOK 315 million-NOK 350 million. Yes, then I give the word back to you, Henning.
Yeah. Then I will summarize and give a short look into the future and what we believe and where we are going. First of all, I will start with the supply side. The global supply of Atlantic salmon. We see a year in 2026 with 4.1% increase globally. We see Norway increased by 5.2% last year. Europe in total 5.5%, and others about 23%. The total sum up of 2026 is 4.1% increase. If we look into 2027, 2026 has been a good performance mainly in all regions, all over in all global salmon-producing countries. For 2027, we expect a lower growth. In Europe, we expect a negative growth of 1.1%. Norway, which is the main producing country, and Norway is down by 2%.
For Americas, there is an expected increase of 2.3%, but I believe it's a lot of uncertainty, especially in the volumes coming from Chile, where Kontali is expected an increase of 2.1%. But I think that is, I will say, on the upside of what we can expect from Chile in 2027. So we will see. Global zero growth in total. So we believe that there is, it's been an extremely good demand in 2026, if we look at the supply side increasing by more than 4%. I think the markets has been developing in a good way. There is a good demand in all major markets. So we believe that that will continue into next year, and we believe in a positive price development for salmon going into 2027. Yeah. Like I said, we report in three segments.
I start with a short outlook for Farming to sum up a little bit. We have had and we have a strong biological performance in the companies, in the regions, and we believe that that will continue. We have a high standing biomass into fourth quarter in 2026, and we also believe that we will have a high standing biomass going in, and with a high quality going into 2027. The cost reduction program is progressing as planned. This will significantly reduce the impact of higher feed price in 2027, and the cost focus will also be implemented into 2027 and going forward. The expectation of Yeah, we guide the volumes of 195,000 tons in 2026 and 195,000 tons in 2027. Including Scottish Sea Farms in 2027, we will have around 218,000 tons.
For the Wild Catch, a little bit more challenging, lower prices for saithe, cod, and haddock, and the increased estimate fuel cost affected the guiding for the full year of 2026, with the estimate reduced to NOK 315 to NOK 350. We see a positive operational development in the land industry, which has been the case the last period. The cod quota advice for 2027 is up 14%, haddock up 18, and yeah. For Market Operations, margin improved to 5.4% in third quarter, which is a good performance. Operational EBIT in H1 2026 is expected in line with or slightly higher than H2 2025. That's all we had, and thank you very much.