Grieg Annual Report 2020

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GRIEG MATURITAS

Annual Report 2020


GRIEG MATURITAS | ANNUAL REP ORT 2020


Content This is Grieg Reflections from our Chair

4

Our history

6

Our organization

8

Sustainability

16

Covid-19

20

Our companies Grieg Maritime Group

24

Grieg Shipbrokers

30

Grieg Logistics

32

Grieg Seafood

38

Grieg Investor

46

Grieg Kapital

50

Grieg Group Resources

52

From the Boardroom Directors Report & Group Result 2020

60

Annual Accounts

72

Notes

80

Auditors Report

116

2—3


Reflections from Chair These are not ordinary times. Women and men across the world have been struggling for over a year to save lives and keep the wheels turning through this time of turmoil. And so have all of us. For that, we are forever and sincerely grateful because none of us are genuinely safe unless we all are.

When writing this, we mark more than one year since the pandemic entered our lives and threatened the livelihood of millions across borders and industries. Navigating unknown waters, not knowing what to come next, is not an easy task. Every company within the Grieg Group must handle the challenges following Covid-19. Most of us has been working from home, crew members couldn't travel home to their loved ones, and disrupting and challenging markets reflected both shipping and seafood throughout the entire year of 2020. I think we can all agree that Covid-19 has been and still is a fundamental human and business challenge.

GRIEG MATURITAS | ANNUAL REPORT 2020


Worldwide vaccination plans and stabilizing markets

activities to grow core business at home. Grieg Logistics

give us hope for the future. Besides, EU regulations

is investing in new business, providing cutting-edge

and demands for the business community towards a

technology to ports across all of Scandinavia.

greener and more sustainable future give us speed in the right direction.

By looking at our activities during the past year, I am convinced that all Grieg Group companies are in good

GRIEG GROUP IN 2020

shape for the days to come.

Challenging and disrupted markets affected our overall financial performance in 2020, and our results are not

SUSTAINABLE DEVELOPMENT.

at all what we predicted. Covid-19 influenced all parts

For 138 years, the Grieg Group has lived by and with

of our organization, primarily as a result of market

the ocean. We believe that all industries need to be part

changeover in seafood, and disruption in the maritime

of the solution, reducing the world's Co2 emissions,

industry.

preventing plastics pollution, and contribute to a sustainable life below water.

Despite a challenging year, Grieg Maritime Group has indeed been able to find new and creative ways

Sustainable development is part of our core values.

of working. Conducting remote operations, keeping

Our sustainability effort allows us to actively seek

the wheels turning, and fighting for decent working

opportunities that will continue to create value for our

conditions for our crew members who had to be on

owners, our customers, and other key stakeholders, as

board our ships for an unacceptable long time. I am

well as society at large.

proud we have committed ourselves to the "Neptune Declaration", stating that crew members and seafarers

OPPORTUNITIES IN TIMES OF COVID-19

are critical workers.

We know that a crisis also presents opportunities. Especially for the maritime industry, Covid-19 has been

Covid-19 has had a significant impact on almost all of

a much-needed drive to speed up both digitalization

our maritime activities, but Grieg Green impressed us all

and the extension of partnerships across industries

by conducting remote IHM-operations in partnerships

and sectors to develop zero-emission solutions. There

with crewmembers and shipyards worldwide. Luckily,

is no doubt that the UN Sustainable Development

Grieg Green could almost do business as usual despite

Goal number 17 – partnership for the goals is the most

the pandemic.

important one.

With the establishment of Grieg Edge, we are indeed

It is part of our Grieg Group culture to adapt and use

moving forward into the green shift. The company was

challenging times to create value-driven change.

granted funding from the Norwegian funding scheme

And luckily, we draw from a vast pool of experience

Pilot-E in December and aims to build the world's first

and mobilize in joint efforts that can move both our

ammonia-fueled tanker in cooperation with Wärtsilä.

business and the global community forward.

I am proud of our commitment to creating successful new businesses built on the pillars of sustainability

OUTLOOK

and advanced technology.

Stabilizing markets in both shipping and seafood have provided us with a more favorable entry to 2021 than the

As a salmon farming pioneer, Grieg Seafood has

end of 2020. Aligned with the continuous development

taken several essential and necessary steps the

in our innovative projects and societies to re-open, I

past year. Managing disrupted and challenging

believe we are well on our way into the new normal.

markets, they demonstrate a long-term perspective

I genuinely believe that this new year brings with it

within the industry, establishing a new in-house

better opportunities and financial results than the last.

sales organization, focusing on partnership and sustainability, improving fish welfare, and reducing their impact on the environment. Grieg Investor celebrates the end of 2020, delivering their best result ever. Grieg Shipbrokers has a new interim management team and has sold their Asia-

Elisabeth Grieg C H A I R O F T H E B OA R D

4—5


Our history Grieg Group The Grieg Group derives from a long and proud maritime tradition.

In 1884, Joachim Grieg established a shipbroking firm

ment Goals in our business strategy and revised our

in Bergen, where the company continued to develope

business strategy to meet the future as more resilient,

during the two world wars. In 1960 Per Grieg sr. joined

more innovative and more sustainable. The ocean con-

the company and organized it into a specialized busi-

nects our businesses, our people, our future, and our

ness. Today the Group is owned and led by 4th and 5th

past. For more than 137 years, we have lived by and

generation Grieg and consists of several companies

with the ocean.

worldwide. Our people are our most valuable resource, and we The Grieg Group operates within seafood, shipping,

believe they are essential to building our success. Our

shipbroking, maritime innovation, logistics, and in-

1 710 employees operate in 8 countries, from Norway

vestments. Across all businesses, we shall create last-

(headquarter) to the rest of Europe, USA, Canada and

ing value through competence, experience and com-

Asia.

mon efforts. The Grieg family owns the Grieg Group through their Our mission is to restore our oceans, and we are com-

holding company, Grieg Maturitas (75%), and the Grieg

mitted to the UN Sustainable Development Goals. In

Foundation’s nonprofit organization (25%). Operating

2019 we incorporated the UN’s Sustainable Develop-

revenue in 2020 was MNOK 6 765.

1884

Joachim Grieg establishes ship broker business in Bergen.

1961

AS Star Shipping established.

1969

Grieg Logistics established as a separate business unit.

1984

1992

100 years! Restructured as the Grieg Group.

GRIEG MATURITAS | ANNUAL REPORT 2020

1998

Grieg Seafood established.

2002

Grieg Investor established.

1994

Grieg International established.

Grieg Foundation established.

1999

4th generation Grieg take over.


2008

Star Shipping becomes Grieg Star Shipping and joins the Grieg Group.

2007 Grieg Seafood gets listed on the Oslo Stock exchange.

2010 Grieg Green established.

2014

The Grieg Group celebrates 130 years anniversary!

2017

G2Ocean established, joint venture between Grieg Star and Gearbulk.

2020

2018 Grieg Kapital established.

Grieg Star Group reorganized into Grieg Maritime Group.

2019

Grieg Connect established.

6—7


Our organization

VISION

Create lasting value through competence, experience and our common efforts

O U R VA L U E S

Solid

Proud

Open

Commited

We contribute to a stable economic foundation and thus ensure business continuity.

We contribute to the welfare of our society, nationally and internationally.

We are honest, exchange ideas and seek to understand and learn from our colleagues.

We care about the job we do, work environment and the people around us.

OUR CORE BUSINESSES

Shipping

Aqua

GRIEG MATURITAS | ANNUAL REPORT 2020

Investment

Management


Key figures Group

1 710 Employees

6 765

-878*

2020 · MNOK

2020 · MNOK

Operating Revenue

31 .1 2 . 2020

Profit before tax

* Profit before tax is mainly effected by impairment in Grieg Maritime Group of MNOK 773. Profit before tax, ex write downs is – 105 MNOK.

O P E R AT I N G R E V E N U E 20 20 BUSINESS AREAS

T U R N OV E R B A S E D O N OW N E R S H I P 2020 BUSINESS AREAS

Grieg Maritime Group

Grieg Seafood

Grieg Maritime Group

Grieg Seafood

Grieg Shipbrokers

Grieg Investor

Grieg Shipbrokers

Grieg Investor

Grieg Logistics

Grieg Kapital

Grieg Logistics

Grieg Kapital

8—9


Board of Directors

Elisabeth Grieg

Per Grieg jr.

CHAIR

B OA R D M E M B E R

Long-term leadership experience from the private

MBA from INSEAD and a master’s degree in marine

sector and other organizations. Holds a degree from BI

technology from NTNU. Several years of experience

Norwegian Business School and the University of San

from the maritime sector and founded Grieg Seafood

Franscisco. Chair of the board at Norled, and member

ASA in 2002. Holds the position as Chair of the board at

of the board at Talent Norge, Grieg Foundation, G2

Grieg Seafood and Proximar Seafood. Board member of

Ocean and Grieg Maritime Group. First female presi-

Bergen Chamber of Commerce and Industry.

dent at the Norwegian Shipowner’s Association.

Camilla Grieg

Elna-Kathrine Grieg

B OA R D M E M B E R

B OA R D M E M B E R

MBA with a major in finance from the University of San

Degree from BI Norwegian Business School and has

Francisco and is a Certified Financial Analyst (CFA).

several years of experience from the maritime industry.

She is Chair of the board at Grieg Maritime Group and

Holds different board positions within the Grieg Group

has several years of experience from shipping and the

such as Chair of the board at Grieg Foundation and

maritime industry. Chair of the board at GC Rieber and

Grieg Logistics. Board member at Family Business

leader of the election committee at DnB.

Norway and Grieg Kapital.

GRIEG MATURITAS | ANNUAL REPORT 2020


Nicolai Hafeld Grieg

Nina Willumsen Grieg

B OA R D M E M B E R

B OA R D M E M B E R

Degree in International Business from the University

Holds a degree in Industrial Economy and Technology

of Edinburgh and the University of Hong Kong. Has several years of experience within shipping and logistics. He is head of Grieg Edge, part of Grieg Maritime Group, and board member at Grieg Foundation, Grieg Investor and Rem Nor AS.

Management from NTNU. Several years of experience from the maritime sector, specializing in seafood and shipping. She works in Grieg Seafood ASA, and holds the position as board member at Ystholmen Felles.

Knut Nesse

Rolv-Erik Spilling

B OA R D M E M B E R

B OA R D M E M B E R

MBA from Norwegian School of Economics and is

Holds a degree in Mathematics from NTNU, and is a

CEO at Akva Group. Has several years of experience

senior executive, venture investor, and serial entre-

from the maritime sector specializing in aquaculture.

preneur. Co-founder of the SW company Gture and

Joined the board of Grieg Maturitas in 2019. Holds

co-founder and Chair of the board at the early phase

several other board positions, and is Chair of the board

investment company Gvalueinvest. Joined the board

at Desert Control AS and Helgeland Plast AS.

of Grieg Maturitas in 2019.

10 — 11


The owner company Grieg Maturitas Grieg Maturitas is ensuring the owners’ short- and long-term interest in the Grieg Group.

I have without doubt been witnessing an organization who has been more resilient than we could have ever imagined. Even under exceptional circumstances we have managed to conduct business as usual, handling the challenges we have been facing across our companies. I would like to mention that I am duly impressed with how Grieg Maritime Group has dealt with the ongoing crew crisis, and how Grieg Investor made 2020 their best year ever. I would also like to cheer for Grieg Seafood and their technology-driven focus, working to improve fish welfare and communities in which they operate. S I R I N E FO D STA D C H I E F EX E C U T I V E O F F I C E R

2020 has been a challenging and disrupted year indeed. Amongst the most important learning outcomes from the pandemic is the willingness and ability to adapt to change in a creative and more efficient way.

Our on-going work with the UN SDGs has been constantly developing throughout 2020, which is an important priority for the Group and its owners. Moving forward we will continue our focus on ownership strategy, driving value through investments, communication, sustainability, and targeted projects. We are now witnessing stabilizing markets in both shipping and seafood, which is great for our business. This, alongside our continuous effort to make business more sustainable and future proof, makes me look forward to the days ahead.

GRIEG MATURITAS | ANNUAL REPORT 2020


Administration

Sirine Fodstad

Wenche Kjølås

C H I E F EX E C U T I V E O F F I C E R

CHIEF FINANCIAL OFFICER

24 years of working experience to design and imple-

MSC in Business Administration and Economics

ment changes to improve bottom line results. Holds a

from Norwegian School of Economics. Experienced

BBA and a BA in Business Administration, French and

CEO and CFO with a demonstrated history of working

Economics. Operational background from Asset Man-

with logistics, shipping, seafood and supply chain

agement, Oil&Gas and Airline industry with focus on

industry. Chair of the board at Keolis Norge AS and

human capital. Board member at Grieg Maritime Group

MagseisFairfiled ASA, and board member at Slettvoll

and Grieg Seafood.

AS and Grieg Logistics AS.

Gry Larsen

Marte Leirvåg

L EA D E R S U STA I N A B I L I T Y A N D P U B L I C A F FA I RS

C O M M U N I C AT I O N S M A N AG E R

Former Secretary General at CARE Norway. Several years

BA in Political Science from the University of Bergen and

of experience from Norwegian Politics, serving as both

NTNU. Specialized in foreign policy, organizational de-

president of the Norwegian Labour Youth, State Secretary

velopment and communications. Elected representative

in the Ministry of Foreign Affairs and Political Advisor to

in the City Council of Bergen and has years of experience

the Foreign Minister from 2005-2013. Board member at

working as a Communications Advisor with companies

Grieg Foundation..

across several industries.

12 — 13


A tradition of giving back Grieg Foundation Grieg Foundation is a celebration of our responsibility to create a more compassionate society.

For generations, the Grieg family has wanted to create strong meaningful change by giving back, by supporting humanitarian, social and cultural aspects of life, and by working in partnerships, encouraging and supporting innovative projects. We believe that local engagement sparks improvement in people’s lives. Our role is to empower visionaries, talents and individuals with ideas and a strong sense of purpose and commitment. OUR PRIORITY All our work is anchored in the UN's Sustainable Development Goals. I N G V I L D H E STA D, M A N AG I N G D I R E C TO R

We believe that local engagement sparks improvement in people’s lives. Our role is to empower visionaries, talents and individuals with ideas and a strong sense of purpose and commitment.

Access to quality education is our main priority. SDG 4, inclusive and equitable quality education, and SDG 5, gender equality is at the heart of our purpose. In addition to education projects in Madagascar, Zambia, Malawi, Rwanda, Eswatini and Brazil, Grieg Foundation prioritized support to several projects in Bergen that help young people with multicultural background as well as school dropouts to get education, find work and become active members of society. THE OCEAN The ocean connects our people, our businesses, our future and our past. In line with SDG 14 to sustainably manage and protect marine and coastal ecosystems

GRIEG MATURITAS | ANNUAL REPORT 2020


from pollution, Grieg Foundation started the project

on women´s health, cancer and cardiac disease. In

“Clean ports, clean oceans” with WWF. The three-year

2020, we played a crucial role in establishing Centre

project aims to reduce the flow of plastic waste in the

for Research on Cardiac Disease in Women at the

Philippines by improving waste management in ports.

University of Bergen and Haukeland University

The Grieg Group companies will contribute with their

Hospital.

cutting-edge expertise in this important project. We are a small foundation with big ambitions. The HEALTH

employees within the Grieg Group are our most

Grieg Foundation also partnered with the Norwegian

valuable resource. It is their hard work and daily efforts

Refugee Council to create a green shift in humanitarian

that make it possible for Grieg Foundation to make

aid. Grieg Foundation supports innovative medical

a difference. Together we create change. This is our

research that can have wide-reaching impact. We are

common accomplishment. We do not believe profit

aligned with SDG 3 to ensure healthy lives, and focus

builds success. People do.

14 — 15


Sustainability at Grieg We will restore our oceans The Grieg Group has a long tradition for creating shared value for both business and society. In March 2019, we launced a new strategy centered around our purpose: ‘We will restore our oceans’.

At Group level we have defined SDG 8, 16, and 17 as our license to operate, or “foundation”. These goals represent the groundwork for how we run our businesses, with a focus on employee health and wellbeing, inclusive economic growth, transparency and accountability, and partnering to achieve greater impact on the sustainability challenges facing the industries in which we operate. In addition to this foundation, we have set ourselves five impact goals, or “stretch” goals, relating to the areas in which we can really make a difference, and to help us focus our efforts in areas that are relevant for our business and our stakeholders. These goals relate G RY L A RS E N L E A D E R S U STA I N A B I L I T Y A N D P U B L I C A F FA I R S

specifically to SDG 4, 5, 9, 13, 14. We have set clear ambitions for all SDGs (see page 27-29). Each goal and ambition have objectives and KPIs at

Using the UN Sustainable Development Goals (SDGs)

Group level. Operationalizing is delegated largely

as our framework, we revised our business strategy to

to each individual company. The Grieg Group is a

meet the future as more resilient, more innovative and

member of the United Nations Global Compact and in

more sustainable.

December 2020 we reported our “Communication of progress” for the first time. We continue to support the

The 17 SDGs are interdependent and equally important.

Global Compact and it's ten principles. We are also a

However, some of the sustainability themes are more

signatory of the UN Global Compact’s Ocean Principles.

relevant to the businesses we operate within, and it has therefore been natural for us to choose SDGs where we

We have established a Grieg Group Sustainability

can have the greatest impact and where we also have

Advisory Committee (SAC) consisting of members from

the largest challenges at an industry level.

the top management team from each Grieg company to ensure internal transparency and accountability

GRIEG MATURITAS | ANNUAL REPORT 2020


Doing good is the obvious business opportunity Using the UN Sustainable Development Goals (SDG’s) as our framework, we have revised our business strategy to meet the future as a more resilient, innovative and collaborative group of companies.

for implementing strategic objectives. The Committee

sector we are now active participants

also addresses the main issues that are relevant for

cooperation between different participants in the

all companies. In the Grieg Group we strongly believe

maritime and offshore sectors, tasked with developing

that sharing and learning from each other is essential

an infrastructure to produce and transport ammonia

for success. The SAC met three times in 2020, and

as a non-greenhouse gas fuel for ships and off-grid

topics discussed included EU Green Deal/Taxonomy,

power. Our role is to design and ultimately build an

biodiversity,

climate-risks,

reporting,

in Zeeds, a

sustainable

ammonia tanker fuelled by ammonia: the MS Green

innovation and collaboration within and across

Ammonia. The project received governmental funding

companies. At our last meeting in December 2020, the

in 2020. The planned launch of the ship is 2024. In the

Minister of Local Government and Administration,

aquaculture sector, we joined forces with partners to

Nikolai Astrup, presented the Ministry’s work on the

support soy vendors to the salmon industry end trade

new national action plan for the sustainability goals.

of deforestation linked soy in Brazil. Furthermore,

The Grieg Group is committed to be part of local,

we continue our three- year partnership with WWF

national and international partnerships to reach

through Grieg Foundation, aimed at identifying ways

the SDGs. In March 2020 we also partnered with

to reduce plastic pollution globally. Initially, the project

Development Goals Forum (DGF) and their UN Theme

aims to reduce waste by 50% in three ports in the

week and facilitated a workshop with cases from Grieg

Philippines, identify ways of scaling efforts globally,

Group companies.

as well as identifying new business opportunities and partnerships.

Partnerships for the SDGs will continue to be a priority for the Grieg Group. In 2020 we have further developed

Although much has been done, both at group-level

many of our partnerships. For example, in the maritime

and in the companies since we adopted our new

16 — 17


strategy, we decided in September 2020 to strengthen

To further strengthen our work we have decided to

our Sustainability-work in the Group with Gry Larsen

revise our internal KPIs and objectives so that we can

as Leader Sustainability and Public Affairs. At the

take further steps in the realization of our ambitions.

Grieg Group we have huge ambitions for our work on

New KPIs and objectives will be introduced in 2021.

sustainability, both at Group-level and in the different

One important part of our work will be to continously

companies within the group. Having a sustainability-

innovate to meet the challenges of the SDGs, through

team in the Grieg Group reflects our ambitions, our

new partnerships and cross sector cooperation.

willingness to invest and allows us to more effectively seek opportunities that will continue to simultaneously

To become a positive driving force for sustainable

create value for our owners, our customers, and other

development we must think big and create a purpose-

key stakeholders, as well as society at large.

driven organisation with a culture of innovation. Innovation, both within and across our industries,

OUTLOOK: 2021 AND FORWARD

is critical to our future success, but this must be

We will continue our journey to make sure sustainability

sustainable; innovation that moves us in a direction that

is securely embedded at the core of our business,

is aligned with the sustainable development goals. We

across the Group. Our sustainability agenda has been a

continuously work to secure and expand partnerships

successful catalyst for collaboration internally between

to ensure that impact from our efforts across the Grieg

Grieg companies, enabling us to leverage different

Group are relevant for, and deliver maximum value to a

competencies we have within the group and to seek

range of stakeholders.

solutions to sector specific challenges.

Grieg Group Sustainbility Foundation Goals Be in the lead of the industries in which we operate by: • Fostering a great, inclusive working-environment, with sound economic growth • Creating an inviting, open-minded, transparent and inclusive business-spirit utilizing the strengths of our core business and competency, be an engaged and committed enabler of the SDG 8. Grieg Group´s shared value approach defines the compass by which we navigate when doing business across the world. By spreading these in the areas we work we will continue to enable inclusive, just and accountable business relations and advocate for strong societies and institutions.

We will strive to be innovative to meet the challenges of the SDGs, through new partnerships and cross sector cooperation. We will do this by being honest, exchange ideas and seek to understand and learn from our surroundings. We have an open-minded business approach and strive to create room for action and possibilities, which will enable strong partnerships with both public and private parts of society.

GRIEG MATURITAS | ANNUAL REPORT 2020


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Grieg Group Sustainbility Stretch Goals Employees shall be provided with learning opportunities that promote competence and are aligned with their personal career goals. Each employee should possess the skills and knowledge required to enable Grieg to be in the forefront of the industries in which we operate. Our strategy for competence development shall be aligned with company level business strategies and be based on market trends and customer expectations. We will strive to be in the forefront on diversity within the businesses we operate. We will work towards gender parity at all levels of the organizations in the Group, both for onshore and offshore operations. And we will also promote gender equality and diversity towards business and supply chain partners.

To become a positive driving force for sustainable development we must think big and bold and create a purpose-driven organization with a culture of innovation. To achieve this, we will promote collaboration within and across all companies in The Grieg Group, inspiring, challenging and learning from each other. We will also seek cooperation both among our competitors and our existing partners. We have a vision of zero net emissions operations in all industries in which we operate. We will also continue to be an advocate for zero emissions operations in all relevant industries and increase awareness internally and in dialogue with key stakeholders.

As with climate action, we will work towards a zero-effluent vision. All companies within the Group will work towards this target, but businesses in certain industries will be expected to take greater steps where the impact is greater. Our impact on marine resources will be carefully managed and we will be open and transparent about this impact, as well as the results from the efforts we make to reduce it.

18 — 19


Working together to fight Covid-19 At the beginning of the pandemic in early 2020, the Grieg Group successfully formed an Emergency Response Team with members from all the Grieg Group companies.

The team centralized our competence and skills to manage the pandemic and it's challenges. We have witnessed incredible courage and flexibility across the Group, who have all shown great willingness to adapt under exceedingly difficult circumstances. As a result, we have grown to become even more resilient. The cross-group crisis team was previously led by Grieg Maturitas CEO, Sirine Fodstad, and is now led by Cherin Myrdal Vervik, lawyer at Grieg Group Resources. Handling the pandemic together has truly shown the value of group affiliation. We are grateful to all who has contributed to manage the Response Team, sharing knowledge, and helping each other through these unprecedented times. The Emergency Response Team have met regularily during the pandemic and has provided leaders and CEOs within the Grieg Group with necessary communication and guidance.

GRIEG MATURITAS | ANNUAL REPORT 2020


Handling the pandemic together has truly shown the value of group affiliation. We are grateful to all who has contributed across companies to manage the Response Team, sharing knowledge and helping each other through these unprecedented times. C H E R I N M Y R DA L V E RV I K , L A W Y E R , G R I E G G R O U P R E S O U R C E S

The seafarer crisis One year after the Covid-19 pandemic started, many countries still deny seafarers entry or make it difficult for them to join or leave their vessel. Grieg Star has for a year fought for the world to recognise seafarers as key workers. Since the beginning of the pandemic, our teams in Manila and Bergen have worked hard to make crew changes possible. But those who have carried the brunt of the hardship are our colleagues at sea.

Maritime Forum's 2020 Virtual High-Level Meeting. The declaration is a joint global "call to action" to revitalise and underline the ongoing crewing crisis. It focuses on actions needed to ensure crew changes and safeguard global supply chains: •

Recognise seafarers as key workers and give them priority access to Covid-19 vaccines.

Establish and implement a gold standard health protocol based on existing best practice.

Increase collaboration between ship operators and charterers to facilitate crew changes.

Ensure airline connectivity between key marine hubs for seafarers.

We have and will continue to work all possible angles to ease the situation for our seafarers.

The present situation for seafarers worldwide clearly

AT L E S O M M E R H E A D O F G R I E G STA R

initiatives, and Grieg Star proudly supports all

shows that they have not yet received key workers status. We need to support both official and private objectives and deliverables within "The Neptune

This is about wellbeing and safety. But it is also about

Declaration."

compliance with flag state legislation, ILO and MLC requirements and Collective Bargain Agreements. "In fact, it is about basic human rights," says Head of Grieg Star, Atle Sommer. "It should not be necessary to fight for such basic rights and compliance, but, sadly, it is". OVERCOMING THE SEAFARER CRISIS Early 2021, we signed "The Neptune Declaration on Seafarer Wellbeing and Crew Change – overcoming the Seafarer Crisis". The Maritime Industry Crew Change Taskforce developed the declaration after the Global

20 — 21


Group structure

Grieg Maturitas AS

Grieg Maturitas II AS

Grieg Foundation

Grieg Kapital

Grieg Aqua

Grieg Group Resources

Grieg Investor Grieg Investor Holding AS Grieg Investor AS

Grieg Kapital AS

Grieg Aqua AS

Grieg Holding II AS Rensefiskgruppen AS Grieg Gaarden AS Grieghallen Parkering II AS

Grieg Seafood

Silves Odissey Lda AS Nestun Uldvarefabrik

Grieg Seafood ASA Grieg Seafood Rogaland AS Grieg Seafood Canada AS Grieg Seafood Finnmark AS Grieg Seafood Hjaltland UK Ltd Grieg Newfoundland AS Grieg Seafood Norway AS

GRIEG MATURITAS | ANNUAL REP ORT 2020


Grieg Shipbrokers Grieg Shipbrokers KS

Grieg Logistics Grieg Logistics AS

Grieg Maritime Group Grieg Maritime Group AS

Grieg Shipbrokers

Scandinavian Harbour

Grieg Edge AS

Valuation Services KS

Service AS

Grieg Green AS

Grieg Shipbrokers Ltd

Mosjøen Industriterminal AS

Grieg Shipholding AS

Grieg Shipbrokers Asia AS

Grieg Port Security AS

Grieg Shipowning AS

Grieg Strategic Services AS

Grieg Star AS

Grieg Connect AS

Grieg Star 2017 AS

AS Joachim Grieg & Co

Grieg Star Bulk AS Grieg Star Bulk Oh Pool AS GriegMaas AS G2Ocean Holdein AS1

1

G2Ocean Holding AS is owned 35% of the Grieg Group For more information see note 8 and 9

22 — 23


Grieg Maritime Group We started our Open Hatch shipping activities in the early 1960s, building, managing and operating a fleet of high-quality multipurpose vessels. Today we grown several different business units that cover ship owning, ship management, maritime sustainability services and maritime innovation.

It showed that robust and resilient foundations coupled with brilliant and talented teams are the best line of defence towards any unexpected black swan event. Our organisation's handling of the pandemic makes us confident that we can overcome any new challenges in the future. On the basis of this commitment, innovation, and professionalism of our organisation, we are now well set to take advantage of the improving markets in 2021. The Covid-19 pandemic has had an immense impact on society and individuals, and it’s lasting effects are still impossible to comprehend. But for some, the loss of loved ones, of their job or home, will forever mark this M AT T H E W D U K E C E O, G R I E G M A R I T I M E G R O U P

Last year was a challenging year for our business and the world as a whole. It brought on many challenges that we overcame thanks to our teams’ extraordinary efforts.

difficult period. These are unprecedented times, and we shall find a path through them - one step at a time. For the Grieg Maritime Group, the global lock-down meant significant obstacles in our usual way of doing business. We have been used to travel around the world to visit ships, attend dry dockings or IHM inspections, and meet teams from our global offices. Overnight, we had to find alternative ways of conducting business. The way our teams have handled this is nothing short of impressive. Still, we are grateful that our previous years’ strategy had been completed. Implementing new digital tools during the last months of 2019 provided our business exactly what we needed when the local lock-downs required us to work from home.

GRIEG MATURITAS | ANNUAL REPORT 2020


More so, we see that the pandemic has accelerated our

always with sustainability as a requirement. The team

digital transformation.

has developed several exciting projects throughout the year, despite the hindrances of the pandemic. And at

A larger problem is how many countries have treated

the end of the year, Grieg Edge received significant

seafarers during this pandemic. All the countries in

project funding from the Norwegian scheme, Pilot

the world are relying on getting food, medicines, and

E. They confirmed they would support a project to

equipment. Still, they have denied those who sail

develop an ammonia fuelled ammonia tanker, the MS

the ships carrying these goods to travel to and from

Green Ammonia.

their ship and denying them shore access for medical reasons. These are breaches of human rights. The

Financially, 2020 will end as an uncommon year.

result is seafarers stuck onboard for up to 13 months

Despite the pandemic, we almost maintain our

and others not being able to support their family

revenues from 2019. Both open hatch and conventional

because they are not allowed to work. This January, we

bulk have done better than we feared when the

signed the Neptune Declaration on Seafarer Wellbeing

pandemic started.

and Crew Change. We hope this initiative will move all countries worldwide to accept seafarers as essential

The value of our Open Hatch fleet has been a discussion

workers.

point internally for some years. We purchased parts of the fleet at a very high price point in the shipping

Due to the reduced economic activity following the

cycle. We have decided to normalise these values in

pandemic, we see a drop in GHG emissions worldwide.

our books. For our annual accounts, that means a

But we know this is not the new normal, and we still have

write-down of 83.3 million USD. We find it prudent

work to do to reach the UN Sustainable Development

to mention that this paper write down does not affect

Goals. As a signatory of the UN Global Compact since

our group liquidity, nor does it impact our financial

2008, we still stand by the principles. We base our

obligations. It should be noted that in the first months

strategy on the Sustainable Development Goals, and

of 2021 we are very pleased to see a significant market

we believe it is possible to do so and yet build thriving

improvement. The Grieg Maritime Group is living its

businesses. And as an example of that, 2020 saw us

values: Solid, Open, Proud and Committed.

establish a new subsidiary: Grieg Edge. Their goal is to identify and develop new business opportunities within shipping and related maritime segments – Our companies

24 — 25


Grieg Maritime Group: A new name for a new time Over the past two years, Grieg Star Group has undergone a series of minor and more significant changes; we brought on a new CEO and Chair of the board; we restructured the organisation; we founded Grieg Edge and we brought Grieg Green closer into the group.

All of these shifts and adjustments were essential steps in delivering on our strategy. For many years, Grieg Star has been the overlying brand for the group, even though Grieg Star AS is the ship management company. The group’s name has been “Grieg Star Group”. To avoid confusion regarding the group’s different areas, the group will now adopt a new name and proudly retain the Star-branding for our ship management company. The Grieg Maritime Group will consist of four building blocks: • Grieg Green: Sustainability services, green recycling, IHM • Grieg Edge: Maritime innovations with sustainability as a prerequisite • Grieg

Star:

Ship

management

and

owners

representative for ships in external management as well as ship manning through Grieg Philippines

GRIEG MATURITAS | ANNUAL REPORT 2020


• Our ship owning activities, including:

solving capabilities. So, we put together a group of

− Grieg Shipowning: ship ownership within the

people from all three companies to question our

open hatch and conventional bulk segments,

practices. The goal was to increase fuel efficiency and

including Grieg Maas, a joint venture with Maas

thereby reduce CO2 emissions and cut cost.

Capital − G2 Ocean: a joint venture with Gearbulk within open hatch and bulk shipping

"In the beginning, many of us found it difficult to challenge our routines. It is easy to start defending what you have been a part of. But through 2020, we got

ON THE PATH TO SUSTAINABLE INNOVATIONS

there," says Manager Portfolio, Strategy & Innovation

Grieg Maritime Group established Grieg Edge as its

in Grieg Maritime Group, Kjerstin Hernes. The team

innovation hub at the beginning of 2020. The company

consisted of people from different professions in all

aims to deliver innovative, sustainable solutions to

three companies, e.g., engineers, logistics professionals

the challenges of maritime business. The MS Green

and IT experts.

Ammonia project is it’s first big venture. The project results from a Nordic industrial collaboration group

NEW IT SOLUTIONS

initiated by Zeeds (Zero Emission Energy Distribution

At the start of the year, G2 Ocean set a goal of improving

at Sea). Friday the 18th of December, the Norwegian

its fuel performance by two per cent in 2020. Through

funding scheme Pilot-E confirmed they would support

the year, several initiatives have contributed to

the MS Green Ammonia project with 46,3 million NOK.

reaching that goal. In June, the team launched a Fuel

Grieg Edge and Wärtsilä Norway are jointly running

Calculator, making it easier to spot which vessels

the project to launch the GHG emission-free tanker in

performed good and which did not. "We are confident

2024. “We regard the funding from Pilot-E as a valuable

that the new method of measuring vessel performance

stamp of approval for our plans. Both Wärtsilä and we

and, consequently, establishing accurate speed and

feel confident that this project represents the future

consumption figures contribute to achieving our goal,"

for the maritime sector. To have the support from the

says Fuel Performance Analyst Lydia Helle in G2 Ocean.

Norwegian Research Council and Innovation Norway is a significant step towards completion,” Head of Grieg

The Red Team implemented new routines for hull

Edge, Nicolai Grieg says.

cleaning, based on performance instead of periodically cleanings. Also, they tested a new solution for in-transit

CROSS-COMPANY COLLABORATION

cleaning of the hull to reduce drag and proposed and

While we are waiting for carbon-free fuels, fuel

implemented other new systems to improve voyage

efficiency is the quickest way to lower greenhouse gas

management.

emissions. Together with Gearbulk and G2 Ocean, we established a red-team to speed up our fuel-efficiency.

CHALLENGE EVERYTHING "What we have done in 2020 gives us a good foundation

An essential part of our SDG base is goal number 17,

for further work. We have started 2021 by setting new

partnership for the goals. Hence, it was an obvious

initiatives in motion and will continue to look for new

choice to work together with our partners in G2 Ocean

ways of operating," says Kjerstin Hernes. It isn't easy to

and Gearbulk when we decided to challenge our fuel

calculate how much CO2 emissions we have cut due to

consumption.

the proposals from the Red Team. Some measures have a hidden effect, but we know it affects our emissions.

RED TEAM

And that is what matters. "The project also shows that

A red team is a group that helps organisations to

you can gain a lot by challenging the way you think. If

improve themselves by providing opposition to the

the companies hadn't set this up as a shared Red Team,

point of view of the organisation that they are helping.

we would never get where we are today,” says Hernes.

They are often effective in helping organisations overcome cultural bias and broaden their problem-

Our companies

26 — 27


People at Grieg Malin Gåsvær Haugen

Malin has always known that she wanted a maritime career. The 23-year-old from Bergen grew up with both grandfathers working as sailors and has always loved spending time at sea.

Malin is a final-year cadet student and a surveyor in Grieg Green. This summer, she starts her journey towards her big dream of becoming a captain.

DREAMS OF INTERNATIONAL WATERS “After high school, I did compulsory military service and was assigned to work on a Norwegian Frigate. Working in the navy opened my eyes to a workplace offshore – and I haven’t looked back since,” Malin says. This summer she finishes the undergraduate program in maritime studies at the University of South-Eastern Norway in Horten. Then she will be able to pursue her dream of becoming a captain – and sail in international waters.

GRIEG MATURITAS | ANNUAL REPORT 2020


“There are so many wonderful places to work offshore, and I want to experience all these places and all the different ports the world has to offer whilst working as a sailor,” she says. MAKES THE WORLD SAFER AND GREENER Alongside her studies, Malin has been working as an IHM surveyor for Grieg Green for almost two years. “I heard about the job through the university, and I applied immediately. Then I did several interview rounds before attending a course and finally, I got the job offer,” she says. As a surveyor Malin makes sure that shipowners recycle their ships in a way that meets environmental standards, so that hazardous waste doesn't end up in the ocean. “This is a huge development, as a lot of ship owners used to sell their ships to middlemen, with the ships ending up rusting on beaches, or scrapped at sub-optimal yards typically in the far southeast.” Grieg Greens’s surveyors also develop safe working routines for crew members and employees at shipyards around the world. “Working as a surveyor, you are definitely part of something big that contributes to a greener and safer world for all,” Malin says. REMOTE INSPECTIONS The combination of part-time job and studies have

About Malin Gåsvær Haugen

made Malin much more efficient and structured: “I

• 23 years old

would say that my work as a surveyor has made me

• Originally from Bergen. Spent her summers

a better student”, she says. Surveyors are normally required to travel to shipyards and carry out IHM inspections. Since the pandemic started, international authorities have granted surveyors the opportunity to conduct IHM inspections remotely.

and holidays at her family’s cabin, close to the sea . • Final-year student at Bakkenteigen, The University of South-Eastern Norway • Surveyor at Grieg Green

“We have been able to do this together with the crew on board the ships. This has been crucial for us as surveyors and has proven that we can carry out IHM inspections in China when working from Norway!”

Our companies

28 — 29


Grieg Shipbrokers Grieg Shipbrokers was established in 1884 and was the first company in the Grieg Group. We provide a full range of services within all markets, covering every aspect of chartering, contracting, sales and purchase, in addition to innovative research and analysis.

I am grateful to all who has contributed to keep wheels turning during this difficult and challenging year. As we look back at an unprecedented and challenging year, I am grateful and quite frankly impressed by the Grieg Shipbrokers team's efforts to see us through these uncharted waters safely. The Covid19 pandemic profoundly affected our employees, families, customers, and other stakeholders' daily lives. However, the team's collective efforts saw us navigate our most challenging year in modern times with impressive operational results. With the ongoing pandemic in Q1, the company M O RT E N M Ü L L E R I N T E R I M M A N AG E M E N T L E A D, GRIEG SHIPBROKERS

The Covid-19 outbreak has caused a huge impact on people’s lives, families, businesses and communities. I am deeply proud of what our organization has accomplished during the pandemic.

initiated several measures to ensure sound operations, considering all possible outcomes. Q3 saw the resignation of Finn Engelsen jr as Managing Director.

Ivar Sandvig Thorsen and myself were

appointed as the interim management. I would like to thank Finn for his contribution to Grieg Shipbrokers. Finn has been instrumental in broadening the range of services and markets we are serving. Moreover, I am confident that his continuous efforts to recruit young and talented individuals will pay off going forward. In 2020, Grieg Shipbrokers achieved our highest turnover ever with a comfortable operating margin. Unfortunately, this was somewhat overshadowed by

GRIEG MATURITAS | ANNUAL REPORT 2020


The Covid-19 pandemic affected our employees, families, customers and other stakeholders’ daily lives profoundly. However, the team’s collective efforts saw us navigate our most challenging year in modern times with convincing operational results. M O RT E N M Ü L L E R , I N T E R I M M A N AG E M E N T L E A D, G R I E G S H I P B R O K E R S

provisions associated with the restructuring of our

We are currently experiencing tailwinds in several

overseas subsidiaries. in Q4, we decided to exit our large

areas and are thus optimistic that the painful measures

dry bulk business in Asia as the venture failed to extract

we have implemented will ensure a bright future for

the internal synergies anticipated. The consequence is

Grieg Shipbrokers.

that we have had to incur significant write-downs, and hence the company will have negative equity of MNOK -36.5. Although the decision was not taken lightly, this will give us greater financial flexibility to grow in segments where we have a competitive advantage.

Our companies

30 — 31


Grieg Logistics Grieg Logistics is a international provider of ships services, advanced digital systems, and industrial terminal operations in Norway and other countries. They operate within oil and gas, shipping, maritime and general industries.

In 2018 we made some important strategical changes in our company, moving from a traditional supplier of logistical services, to an international supplier of advanced, digital technology and services. The opportunities in the maritime industry are tremendous, and I truly believe we can make a difference being a central part of the much-needed change within the maritime sector. This is good for both society and business. The foundation of our business strategy is embedded in the UN Sustainable Development Goals. In addition to the Grieg Groups' foundation and stretch goals, goal number 4 – quality education, 5 – gender equality, MICHELLE WILLIAMS C E O, G R I E G LO G I S T I C S

The most important learning outcome from the pandemic, must be that partnerships are unavoidable to resolve some of the world’s biggest challenges facing us across sectors and industries.

9 –industry, innovation, and infrastructure, and 11 - sustainable cities and communities, are the most important ones. If we should highlight one important learning outcome from the on-going pandemic, it would have to be that we can’t manage unknown and complex challenges like Covid-19, unless we cooperate and work together. We have been witnessing this in Grieg Logistics, within the Grieg Group, and we have seen how industries have come together to solve the biggest crisis in modern history. I am proud to be part of an organization, and part of an industry that actively seek partnership when problem-solving is on the agenda.

GRIEG MATURITAS | ANNUAL REPORT 2020


P O RT SYS T E M S

70

Clients supported

S H I P S E RV I C E S

I N D U ST R I A L T E R M I N A L S

1 500

1 080

Annual Port calls

Mill. tonn cargo handeled

During the special year of 2020 I have witnessed an

Norwegian Army and Inschape Shipping Services, the

organization working around the clock to keep wheels

latter being a prosperous partnership we look forward

turning and make the best out of a difficult situation. I

to develop further. At Mosjøen Industrial Terminal,

am truly grateful to all within Grieg Logistics for your

operations are carried out successfully, on time and

effort to make the best out of these unprecedented

on budget. I am duly impressed with all areas of our

times.

company.

Even though not everything worked out as planned

Moving forward, Grieg Logistics will take an even bigger

during the past year, Grieg Logistics can look back at an

part in the important digital shift we are witnessing in

eventful and successful 2020. We have signed several

the maritime industry, providing advanced technology

new partnerships, among them Senja Kommune and

to partners and customers across sectors and countries.

Port of Kaskinen in Finland, we are developing new

We are well on our way on our strategical timeline and

digital solutions to the maritime industry, focusing on

look forward to the future.

automatization and efficiency, and we are continuing our very important partnership with the Royal

Our companies

32 — 33


People at Grieg Kolfinna Magnusdottir

BETTER THAN EXPECTED When the Covid-pandemic started in March 2020, Kolfinna admits she was worried about how it would affect their activity at Grieg Logistics. Shortly after the initial

For Grieg Logistics CFO Kolfinna Magnusdottir, 2020 turned out to be a far less devastating year for business than she first feared.

shock, however, the company group renewed a contract with Alcoa in Mosjøen, a five-year agreement. “We are one of the few companies with whom they have chosen to renew their contract, instead of bringing in a new partner, which was very good. There was a challenging period where people worried about market development and activity, but 2020 was better than we thought it would be at the start of the pandemic. We have a lot of great and motivated people. Although they had to work from home and be away from each other, my colleagues have shown a great attitude towards getting the job done. I would even go as far as to say that it was a good year,” she says.

GRIEG MATURITAS | ANNUAL REPORT 2020


It is an exciting company, and I feel motivated to play a part in developing Grieg Logistics, and participating on such a high level while working on many different things to further develop the company KO L F I N N A M AG N U S D O T T I R C F O, G R I E G LO G I ST I C S

EXCITING WORKPLACE

In addition to making processes more efficient, X-ledg-

Kolfinna is from Iceland and has been working at Grieg

er have the possibility of being linked to other systems,

Logistics for eleven years. She has a background in eco-

including the port management systems we have de-

nomics and business administration, including a mas-

veloped. That means that you can take data from the

ter's degree from NHH Norwegian School of Econom-

port and invoice customers directly. With X-ledger,

ics. One of the things that attracted Kolfinna to Grieg

many aspects of the operation can become much more

Group was all the different areas of expertise in which

automatic.

they practice. LOOKING FORWARD Grieg have a prominent role as both shipping agents

Kolfinna anticipates that moving forward Grieg Group

and terminal agents in Mosjøen. We have subsidiaries

will be mostly “business as usual”. However, she is ex-

that develops software for ports in Norway and is cur-

cited about new developments happening withing the

rently the largest supplier in the sector, and through a

companies, for instance at Grieg Connect.

separate company, Grieg has a cooperation agreement with The Ministry of Defence.

“Grieg Connect, our IT-company developing modular port systems for sale outside of Norway, has gained

“It is an exciting company, and I feel motivated to play

customers in Sweden and Finland during the last year.

a part in developing Grieg Logistics, and participating

This year, I am sure, we will take it further”.

on such a high level while working on many different things to further develop the company,” Kolfinna says. WORKING ON XLEDGER During the past year, one of the main projects running through Grieg Group has been the implementation of X-ledger – a cloud-based financial management plat-

About Kolfinna Magnusdottir

form going into 60 companies under the supervision

• 57 years old

of Grieg. As CFO Kolfinna has been part of the project

• Originally from Reykjavik, Iceland. She now

group from the start. “We are not quite done with everything that needs to be put in place, but so far it looks good. Implementing systems like this is always challenging, but it will have significant ripple effects at the group level when we can

lives in Bergen with her family and works as Chief Financial Officer at Grieg Logistics. • She holds a Master in Business Administration from Norwegian School of Economics (NHH).

match all the companies in the Grieg Group with each other,” she says.

Our companies

34 — 35


People at Grieg Vidar Fagerheim

Digitalization has become somewhat of a buzzword. However, the use of big data and online communication tools in the maritime sector has enormous potential in simplifying the complex logistic chain in ports

From founder of a small company to managing director of Grieg Connect. Vidar is passionate about creating a seamless and low-carbon logistic chain in the maritime industry.

and terminals all over the world. “Whenever a sea vessel is entering or leaving a port, there is a lot of information that has to be exchanged, both for logistic and security reasons. Instead of having manual registrations that are poorly coordinated, we are offering a full-scale digital system using real time data,” Vidar says. A GROWING INDUSTRY With a degree in law and management, Vidar entered into the world of maritime software development after working for a business who specialized in offshore electronics.

GRIEG MATURITAS | ANNUAL REPORT 2020


We soon realized, with the amount of data available, that the potential of digitalization in the maritime industry is huge. Not only in regards to cargo ships, but also smaller boats, ferries and terminals. V I DA R FAG E R H E I M C F O, G R I E G C O N N E CT

A few years later Vidar and his friend started their own

of arrival for trucks and other goods coming into the

company called Shiplog AS, developing scalable sys-

terminal, we can create an even more seamless opera-

tem solutions based on the collection and processing

tion of loading and unloading a cargo ship at port.”

of Automatic Identification System data – a public database showing ship movements in real time.

BENEFITS OF AI-TECHNOLOGY Over the last few years Grieg Connect has increased

“We soon realized, with the amount of data available,

their product portfolio to include port managing, ter-

the potential of digitalization in the maritime indus-

minal operations, security, traffic management and

try. Not only in regard to cargo ships, but also smaller

data harvesting to predict actual time of arrival using

boats, ferries and terminals,” he says.

AI-based data.

In 2017 the company was bought by Grieg Logistics.

Taking advantage of machine-learning algorithms,

A year later Grieg Logistics merged another software

they analyze several years of vessel traffic to produce

company Seamless into Shiplog, and created Grieg

data that in conjunction with live vessel position,

Connect, where Vidar become managing director.

course and speed data automatically calculates Estimated Time of Arrival (ETA) for port calls.

DIGITAL PLATFORM During the last year Grieg Connect has been breaking

“It sounds complicated, but for our customers it helps

new ground in developing a digital platform for port

to simplify daily tasks, while enhancing efficiency, pre-

traffic, gathering information about port infrastruc-

dictability and performance.”, Vidar says.

ture and services. The interactive platform works as a user-friendly tool for port owners and others involved in docking a ship. So far it has been implemented in ports in Tromsø, Bodø and Oslo. “This is a big step towards making ports and terminals smarter and more sustainable. We believe that a shared and user-friendly digital platform, with real time information about the port area, will save time and money, increase security and allow for future innovation in the maritime industry”, Vidar says. During the last year Grieg Connect has had an 80 percent increase in customers. “Our goal is to create smart value chains expanding beyond ports and terminals. If we can estimate the time

Our companies

36 — 37


Grieg Seafood Rooted in nature – farming the ocean for a better future. Grieg Seafood was established in 1992 in Rogaland, Norway. Grieg Seafood ASA operates in Norway, UK, Canada and Shetland, farming Atlantic salmon to global markets. Grieg Seafood aims for an annual harvest of at least 130 000 tonnes by 2025.

Repeated lockdowns had a major impact on salmon prices during most of the year, which affected our 2020 result in all regions. Still, the pandemic has shown us how resilient our relatively young industry has become. We have been operational throughout the year, harvesting a record high volume, due to the skills, flexibility, and passion of our dedicated employees. Demand for salmon remained strong but shifted from restaurants to retail as consumers ate more dinners at home. Our global value chains have for the most part been open and operational. The high unemployment rates caused by the pandemic have also demonstrated how important secure jobs are A N D R E A S KVA M E C E O, G R I E G S E A F O O D

2020 was unlike what any of us expected. The Covid-19 pandemic surprised governments, businesses, and citizens alike across our production regions and in all our markets.

to our communities, and further highlighted the role that our industry can play to ensure continued value creation in the rural areas where we operate. COMPETITIVENESS FOR A POST-PANDEMIC WORLD Grieg Seafood did not deliver on the ambitious 2020 targets we set for ourselves. That was due not only to the pandemic, but also to extraordinary biological challenges in several regions. During the year, we implemented mitigating measures to set the stage for stronger profitability and increased competitiveness in a post-pandemic world. Going forward, we will invest in Norway and Canada as strong production regions, supplying the geographically close European and US markets respectively.

GRIEG MATURITAS | ANNUAL REPORT 2020


Increased survival and improved fish health and wel-

We established a new farming region in Newfound-

fare are at the heart of profitability in fish farming. Re-

land, Canada, where we have exclusive rights to farm

ducing the time that the fish spend in the sea is a key

fish in Placentia Bay. We are also investing in growth

measure to improve fish health and welfare, which is

opportunities in our Norwegian regions and British

precisely the aim of our post-smolt strategy.

Columbia, especially through increased access to postsmolt, which allows us to utilize our licenses better. We

A NEW MARKET APPROACH TO INCREASE

will consider all technologies that work in practice and

VALUE

that will help us grow sustainably.

During the next few years, we will evolve from purely being a supplier of farmed salmon and become an in-

DRIVING CHANGE TOWARDS A SUSTAINABLE

novation partner for selected customers. The aim is to

GLOBAL FOOD SYSTEM

improve synergies with our farming operations, reduce

The Covid-19 pandemic has only accelerated the global

price volatility, and increase the value created from our

sustainability agenda. Aquaculture can be an impor-

salmon downstream.

tant part of the solution in a sustainable global food system, but only if we continue to get better. Improv-

In 2020, we took significant steps on this journey. We

ing fish welfare, working more preventatively, and re-

dissolved our previous external sales arm, Ocean Qual-

ducing our environmental impact are at the heart of

ity, and established our own, fully integrated sales and

our production focus. Going forward, a more holistic

market organization, which will become fully opera-

approach to sustainability is needed to safeguard our

tional in all markets during the first half of 2021.

license to operate and to remain attractive for tomorrow’s consumer. Reducing our climate impact, protect-

When the hotel and restaurant segment recovers, we

ing human rights and nature, improving Indigenous

expect demand to increase significantly. With better

relationships, more sustainable feed ingredients, and

control over Covid-19 in sight, and long-term con-

producing more food from fewer resources are key

sumer trends boosting demand for healthy and cli-

challenges to solve.

mate-friendly products, it is the perfect time to intensify our focus on the market and grasp opportunities

2020 was tough for all of us, and we are still not out of

in this area.

the pandemic. But the light at the end of the tunnel is getting stronger every day. With the measures we have

SUSTAINABLE PRODUCTION GROWTH

implemented during 2020, we are prepared for and ex-

During 2020, we also moved towards our goal of har-

cited about the opportunities that lie ahead. Grieg Sea-

vesting 130 000 tonnes (excluding Shetland) in 2025.

food is in a good shape to meet the future.

Our companies

38 — 39


Commitment from Soy vendors in Brazil The Brazilian soy suppliers to the salmon industry, CJ Selecta, Caramuru, and Imcopa, will implement a 100 percent deforestation and conversion free soybean value chain with 2020 as their cut-off date. No soy grown on land deforested after this deadline will be traded

GRIEG MATURITAS | ANNUAL REPORT 2020

This bold and historic move sets a new benchmark for global sustainable supply chains. This is the very first time Brazilian soy suppliers make such a commitment. As a result of the move, the majority of the global farmed salmon industry, including the entire European salmon sector and all of Grieg Seafoods operations, will source soy from Brazilian suppliers whose soybean value chains are 100 percent deforestation and conversion free. The decision also marks the first time an animal protein industry has set such a voluntary and sector-wide benchmark. “Companies in the salmon industry work hard to reduce our impact on production and our supply chains, towards a more sustainable food system. Being the first sector to have deforestation-free Brazilian suppliers is


We greatly applaud this historic decision by CJ Selecta, Imcopa and Caramuru, and are encouraged to see much-needed action by these Brazilian soy suppliers. The move reduces risk to the entire Brazilian soy industry and we urge the rest of the Brazilian soy traders to follow their lead. K R I S T I N A F U R N E S C O M M U N I C AT I O N M A N AG E R , G R I E G S E A FO O D

a huge step forward! The entire salmon industry cele-

Maurício Voivodic, WWF Brazil Executive Director,

brates this fantastic achievement and the leadership

said:“We see this voluntary sector-wide commitment

shown by CJ Selecta, Imcopa, and Caramuru,” says Tor

as a benchmark to inspire other global animal protein

Erik Homme, Director of Feed and Nutrition in Grieg

sectors, as well as other markets linked to the soy sup-

Seafood.

ply chain. We celebrate together this relevant private sector-led process for the protection of the unique Bra-

“The move proves that sometimes it’s the small com-

zilian Cerrado.”

panies that take the boldest action. We hope the rest of the Brazilian soy industry will follow their example,”

Ida Breckan Claudi, Senior Adviser to the Rainforest

Homme says.

Foundation Norway, said:“The Brazilian soy suppliers and the Norwegian salmon industry show true

IMPACT BEYOND THE SALMON INDUSTRY

leadership and sets the new bar for sustainable supply

CJ Selecta, Caramuru, and Imcopa/Cervejaria Petrópo-

chains. This historic commitment by their Brazilian

lis have set August 2020 as the cut-off date for their de-

soy suppliers will be a game-changer for the sustain-

forestation and conversion free soybean supply chain.

ability standard for global supply chains. Global pork,

Together with the sustainability standard owner Pro-

poultry, and beef producers are lagging behind, by still

Terra and WWF Brazil, the soy suppliers have agreed

allowing deforestation in their supply chain. To stop

on robust Monitoring, Reporting, and Verification

being complicit in deforestation, the meat industry

(MRV) system to implement and enforce their commit-

must follow suit and require their suppliers to become

ment to zero deforestation.

fully deforestation-free.”

The Brazilian suppliers have delivered certified and

REDUCES RISK

deforestation-free soy to the European aquaculture in-

Kristina Furnes, Global Communications Manager

dustry for a number of years while delivering non-guar-

Grieg Seafood joins international retailers, processors

anteed products to other markets. This new commit-

and salmon farmers in applauding the decision:

ment extends their deforestation-free commitment to their entire soybean business, also outside the salmon

“As companies with Brazilian soy in our supply chains,

value chain. This means that soybeans produced on

we are deeply concerned about the ongoing deforest-

land converted after August 2020 cannot enter the sup-

ation rates in the country. We greatly applaud this

ply chain of any of these soy companies. The decision

historic decision by CJ Selecta, Imcopa and Caramu-

will have an immediate effect on all new contracts of

ru, and are encouraged to see much-needed action by

soy purchase.

these Brazilian soy suppliers. The move reduces risk to the entire Brazilian soy industry and we urge the rest of

Grieg Seafood applauds this bold and historic move by

the Brazilian soy traders to follow their lead.

CJ Selecta, Caramuru, and Imcopa, an important step towards ending soy related deforestation in Brazil.

As a result, Brazilian soy used to feed European farmed salmon is not only certified, it is also supplied by Bra-

SETS A NEW BENCHMARK

zilian vendors with 100 percent deforestation and

The move is celebrated by NGOs as setting a new

conversion free soybean value chains. This is one im-

benchmark for animal protein supply chains.

portant step towards a more sustainable global food system.”

Our companies

40 — 41


Promising outlook for post-smolt as solution Our experience so far with the transfer of post-smolt salmon to our sea farms indicates they are less vulnerable to disease and need fewer sea lice treatments. Reducing the time farmed salmon spend at sea is poised to strengthen ocean farming.

“First of all, we have proven that post-smolt works,” says Kjetil Ørnes. He is interim Regional Director at Grieg Seafood Rogaland, the region where the Grieg Seafood is piloting its post-smolt program. During the first stages of their life, salmon are raised in onshore freshwater facilities. In traditional salmon farming, fish are transferred to the sea once they have undergone the smoltification process, making them physiologically ready for life in saltwater. However, Grieg Seafood’s post-smolt strategy means that, after smoltification, the fish are grown for a longer period on land or in closed facilities in the sea, thereby shortening the time they spend in open sea-pens by several months. In 2014, the average weight of the salmon transferred

GRIEG MATURITAS | ANNUAL REPORT 2020


to sea farms in Grieg Seafood Rogaland was 90 grams.

50%,” says Kjetil.

In 2020, the average weight at the time of transfer was around 400 grams.

Pancreas disease (PD) has been one of the biggest biological challenges in Rogaland, and has had a negative

The change has happened step by step. Kjetil has been

impact on survival, fish welfare, growth, quality, and

in the salmon farming industry for more than 30 years,

costs.

and knows first-hand how delicate biology is. Biting off more than you can chew will always backfire.

“We found that PD often occurred at the end of the salmon’s production cycle, just before harvest. In 2017,

“In recent years, we have tested transferring groups of

we had PD at more than half of our farms, while in

fish of many different sizes from freshwater facilities to

2020 we had only one outbreak. Indications show that

our sea farms. We can conclude that fish of various siz-

a shorter time at sea has reduced the risk of PD.,” Kjetil

es at transfer thrive and grow well. When we launched

explains.

our post-smolt program some years ago, we believed it would work, but we did not know for sure,” Kjetil ex-

ADAPTING TO A NEW PRODUCTION CYCLE

plains.

Big data analyses further support our post-smolt strategy. Grieg Seafood has used data analytics to better

SUSTAINABILITY AND PROFITABILITY

understand outbreaks of winter ulcers, ISA, and PD in

Grieg Seafood strongly believes that post-smolt trans-

its Norwegian regions. The analyses all corroborate the

fer will improve both sustainability and profitability. A

benefits of reducing the time that the salmon spend at

shorter time at sea reduces exposure to sea lice, diseas-

sea. Avoiding the last few months in the ocean signifi-

es, low oxygen, harmful plankton, and other environ-

cantly reduces risks posed by these challenges.

mental issues. The aim is to achieve a reduced environ-

Still, more real-life experience is needed before a con-

mental impact, improved fish welfare, survival, quality

clusion can be drawn.

and biological control, and lower costs. In other words, shorter time at sea strengthens ocean-based salmon

“While it looks promising, we need to farm more gener-

production.

ations before we can say anything for sure. With a production cycle of 2–3 years for each salmon, it always

“While still early days, we see some promising indica-

takes time to conclude in salmon farming. Biology is

tions. In our experience so far, post-smolt salmon need

very complex,” Kjetil emphasizes.

fewer sea lice treatments. At the Teistholmen sea farm in 2020, where we raised one group of post-smolt and

For more information visit www.griegseafood.com

one group of regular smolt, we reduced the number of sea lice treatments applied to our post-smolt fish by

About Grieg Seafood’s post-smolt strategy • To reduce the time that the fish spends in open net pens in the sea is central to Grieg Seafood’s efforts to reduce our impact, improve fish welfare and increase biological control. • Grieg Seafood is piloting the post-smolt strategy in Rogaland with post-smolt production at the freshwater facility Trosnavåg and the post-smolt joint venture Tytlandsvik Aqua. • The company is also investing in post-smolt at the new freshwater facility under construction in Gold River in British Columbia, at the new freshwater facility in Newfoundland, and at the post-smolt joint venture Nordnorsk Smolt and the freshwater facility Adamselv in Finnmark.

Our companies

42 — 43


People at Grieg Roy Evan Strømskag

With the help of advanced technology and great computing power, the employees at the operational center in Grieg Seafood Rogaland fine-tune their professional competence in feeding. It began two years ago with

Today, seven million fish living on 12 farms are remotely fed from one land-based operational center in Rogaland. This is only the beginning of how digitalization, machine learning and AI may transform salmon farming.

a pilot project, where remote feeding started on two farms. Today, they are feeding 12 farms from the operational center in Judaberg in Stavanger. FEED WHEN THE FISH IS HUNGRY “During the pilot period, we have become better feeding experts. As a result, we see that the fish is growing better, without increasing the feed factor,” says manager of the operational center, Roy Evan Strømskag. Feed is a resource and a major input factor in salmon production. Better control of feeding means increased fish welfare and less feed waste, which in turn is impor-

GRIEG MATURITAS | ANNUAL REPORT 2020


During the pilot period, we have become better feeding experts. As a result, we see that the fish is growing better, without increasing the feed factor R OY EVA N S T R Ø M S K AGT O P E R AT I O N S M A N AG E R

tant for the environment and cost control.

real-time status from from various measuring instruments and data sources. Collecting this information

“Through cameras in the pens we can observe the

over time allows us to learn from the history the data

fish continuously from the screens at the operational

gives us. Collecting, interpreting and taking advantage

center. Now we can more easily feed when the fish are

of big data gives us more knowledge and decision sup-

hungry and during larger parts of the day. This is better

port in production planning and execution of all farm-

for the salmon, and it also frees more time for employ-

ing practices,” says Strømskag.

ees on the farms for other tasks,” says Roy Evan. “In practice, we become better at making the right DATA ANALYTICS AND ARTIFICIAL INTELLI-

choices and that gives us better opportunities to plan

GENCE

for what is ahead.”

The concept "Grieg Seafood Precision Farming" aims to improve sustainability and productivity. Environmental data collected in pens at the farms, such as weather, currents, oxygen saturation, temperatures, salinity, wave measurement and feed quantity, will over time be valuable when they are processed to provide better insight and control of the feeding and other farming operations. The data will provide decision support to farmers via data analytics and artificial intelligence. Grieg Seafood aims to utilize the data to work more preventatively, reduce the company’s environmental impact and improve fish welfare. Some of the questions asked by salmon farmers are: how big is the fish swimming around in this particular pen right now? How much feed does the fish need today? What is the correct feeding speed given environmental and weather conditions? Why does the fish in

A number of computer screens with images from the

one pen eat better than the fish in the neighboring pen

many pens provide a full overview both above and below

at the same farm?

water. - Remote feeding has made us better at feeding, says operations manager Roy Evan Strømskag at the op-

“We ask such questions every day, and today we get

Our companies

erational center.

44 — 45


Grieg Investor Grieg Investor is an independent investment advisor for Norwegian institutional clients. Preparation of investment strategies, the selection of good asset managers and the composition of these contribute to our customers’ good results.

Opportunities to think new and to solve tasks differently than before, precisely because we had to. And despite the most significant economic downturn since World War II, both the stock market, our customers and Grieg Investor saw positive results by the end of the year When the world turned upside down in March, we decided to focus exclusively on existing customers and their need for security and advice. New sales were deliberately less prioritized. The result was still that we got several new customers and that 2020 was the best year in history. Capital under advice in Grieg Investor is now 95 billion, and the 15 billion increase from last year consists of a mix of new sales and returns on existT I R I L J A KO B S E N C E O, G R I E G I N V E S TO R

2020 was the year no one could have imagined in advance or made plans for. The Covid-19 pandemic posed significant challenges for all of us, both professionally and personally. But it also provided opportunities.

ing customer funds. OUTLOOK: 2021 AND BEYOND Grieg Investor is in a position where we can really reap the benefits of our investments over time, both in data and digital technology such as Enigma, framework development, employees, and our focus on sustainability. Our "do no harm - make it happen" framework fits perfectly into the EU taxonomy of sustainable finance, which require that economic activity contributes to solutions and does not cause harm. I sincerely look forward to the future, contributing even more to value for our customers, owners, business partners, and especially our employees.

GRIEG MATURITAS | ANNUAL REPORT 2020


MOVING CAPITAL CAN CHANGE THE WORLD

Our companies

46 — 47


People at Grieg: Marte Løfman and Christian S. Akselsen Although Covid-19 generated immense challenges for businesses worldwide, 2020 turned out to be the best in Grieg Investor’s history. Thanks to our long-term strategical work, employees say.

When the world turned upside down in March last year,

"We have positioned ourselves very well, and we think

Grieg Investor decided to focus exclusively on existing

this is just the beginning. It has taken us many years to

customers and their need for security and advice. As

build up Grieg Investor to what it is today", says Chris-

a result of their commitment and trustworthiness, the

tian S. Akselsen, who has been in the company since

investment consultancy company reached an impres-

2003. Today he works as a Senior Advisor within the

sive amount of 25 new customers and a growth of 15

pension fund segment.

billion NOK, leading to an exceptional year. "I agree. We feel that the good results did not occur beMarte Løfman and Christian S. Akselsen are two of the

cause of what happened exclusively last year. We have

company's employees that made the new heights pos-

not made any shortcuts to increase sales. Instead, we

sible to reach.

have focused on building trust and reputation in the market over time", Marte Løfman adds.

GRIEG MATURITAS | ANNUAL REPORT 2020


MOVING CAPITAL CAN CHANGE THE WORLD

cially a digital one. For Grieg Enigma, 2020 became the

As a Senior Analyst, Løfman has been in charge of sus-

year where the system could prove its strengths.

tainable and impact investments within the analysis department since 2016. With a background in environ-

As the demands on the footprints of investments in-

mental risk and international political economy, she

crease, Grieg Investor’s digital solution, called “Enig-

is currently conducting sustainability assessments of

ma” has helped investors analyze their investment

various funds for their clients.

portfolios' sustainability to among others reduce carbon emissions.

"I have an untraditional background compared to many other people in finance, but I intentionally pursued a

"Becoming greener will be crucial if corporations want

career in the field because I believe that you have to

to thrive in Europe in the future, as sustainable finance

move capital if you want to change the world", she says.

is a focus area in the EU right now", Løfman says.

Today, sustainability has become a fundamental ele-

According to the EU's "The European Green Deal,"

ment in many strategy processes, increasingly also in

Europe's goal is to be the world's first climate-neutral

pension funds. "This is the intersection between Chris-

region by 2050. To make this happen, EUs taxonomy

tian and me", Løfman explains and adds that they are,

– a classification system establishing a list of environ-

sharing another vital connection: Their big passion for

mentally sustainable economic activities – is a critical

Grieg Investor.

enabler to scale up the sustainable investment.

PROUD TO WORK AT GRIEG INVESTOR

"If we are going to reach net zero emissions in 30 years,

"I saw that Grieg Investor was willing to invest in sus-

it means that we have to go through many changes. If

tainability early on through the development of among

you do not think about sustainability when you invest,

others Grieg Enigma, which I thought gave credibility

you will risk losing", Løfman states.

to the company. Today, everyone is talking about sustainability in finance, but that was not the case five

The same applies to the pension milieu – being some of

years ago. I admire the responsible and conscientious

Norway’s biggest investors, according to Akselsen.

people working here and the company’s focus on worklife balance", Løfman says.

"Therefore, I think Grieg Enigma is a great tool, as it gives full transparency in terms of what you have in-

Akselsen, who, previously worked in the insurance side

vested in, which I believe is truly important if we want

of pension schemes, decided to pursue a career in Grieg

to enable investors to invest sustainably", says Løfman

Investor after suggestions from some acquaintances. Although he could choose from various job offers, he

Ultimately, both of them highlight that having the sup-

wanted to work solely for Grieg Investor. Now he is as-

port and understanding of their business model from

sisting pension funds with strategic advice, educating

Grieg Group as their owner has helped their company

them how they can implement asset management. He

to thrive, not only during 2020.

also helps to locate funds. "We feel that we are being heard all the time. It is an "The company provides excellent social and academic

advantage to have such a firm owner that shares our

conditions, and several of my best friends are also col-

values", Akselsen declares.

leagues of mine. We have an outstanding reputation in the market which means a lot to us and me personally. I am proud to work here", Akselsen says. NEW DIGITAL SOLUTIONS Often, we need a push to enable a new change, espe-

Our companies

48 — 49


Grieg Kapital Grieg Kapital is a unifying investment and asset management company within the Grieg Group. The company’s mandate is to safeguard and develop its financial asset portfolio.

2020 has been a satisfying year for Grieg Kapital. In early 2020 we sold Grieg Newfoundland to Grieg Seafood, a company that was originally initiated by Grieg Kapital AS and Per Grieg Jr. in collaboration with their local partner Ocean Choice International Ltd. in 2014. We have had satisfied financial return on investments overall throughout the year. Stabilizing financial markets after the summer had a great impact on our results. A GLANCE AT THE NEWFOUNDLAND PROJECT In 2015, a memorandum of understanding (MOU) to produce Atlantic salmon on seawater grow-out sites across four areas of Placentia Bay was signed with the Province of Newfoundland. 11 licenses for sites are curG R I E G K A P I TA L I N V E ST M E N TS

Grieg Kapital is the Grieg Group’s investment company that owns Grieg Gaarden, Grieghallen Parkering, Grieg Holdings, Silves Odissey, Nestun Uldvarefabrik and Rensefiskgruppen.

GRIEG MATURITAS | ANNUAL REPORT 2020

rently approved or in different stages of application. The Newfoundland project received Environmental Impact Study (EIS) approval in August 2018 for Placentia Bay, which comprises a high-end Recirculating Aquaculture System (RAS) facility. Construction of the onshore smolt-facility commenced in April 2019. OUTLOOK We are monitoring the situation related to Covid-19 closely and will further continue to create value to our owners and contribute to an overall sustainable business.


DOING GOOD IS THE OBVIOUS BUSINESS OPPORUNITY

Our companies

50 — 51


Grieg Group Resources Grieg Group Resources AS is a shared service centre for the companies within the Grieg Group. They represent an important support function for the Grieg Group, delivering services such as ICT, HR and personnel, operations and procurement, finance, accounting and legal.

Witnessing an increased frequency of cyber-attacks, we had a special focus on cyber security during 2020. Many attacks worldwide were related to the Covid-19 pandemic, and our IT department has taken measures and will continue this important work throughout 2021 together with specialized partners in the field. In addition to focusing on cyber security, our finance department implemented a new, cloud-based accounting system in 2020. The system will result in a better overview and more efficient accounting processes and project management. We are grateful to all who has contributed their time and effort to make the implementation go smoothly. Together with the owner comW E N C H E KJ Ø L Å S CEO

Grieg Group Resources acts on behalf of the group and helps with coordination and fulfillment of joint measures and specific projects.

pany, Grieg Maturitas, Grieg Group Resources have organized and led the Emergency Response Team during the Covid-19 pandemic and contributed to social activities and training across the Group. The pandemic has been a true challenge to us all, and many of us in the Grieg Group have been working from home since the outbreak in March 2020. We were well positioned for digital meetings throughout the Grieg Group when Covid hit, due to our IT departments implementation of modern office tools for all employees. Hopefully we will be able to return to our offices soon, and in the meantime, we are happy to make the best out of this special and unprecedented situation, offering digital training sessions and online quizzes across the Group, to give our employees a break from work. In 2021 we will continue to provide Group companies with support and management, while looking forward to meeting our colleagues in person again.

GRIEG MATURITAS | ANNUAL REPORT 2020


Lighted hearts at Grieg Gaarden Grieg Gaarden represents the Grieg Groups headquar-

lot of businesses, construction sites, and public build-

ter, located in Bergen, Norway. In addition to Grieg

ings have done the same. In collaboration with Amas

Group Companies, the offices are also hired out to ex-

Lyd og Lys and Axnor we managed to build and put up

ternal companies. Grieg Gaarden is certified as an Eco

three lighted hearts at Grieg Gaarden early in Decem-

Lighthouse, and operated by Grieg Group Resources.

ber:

During the winter of 2020 we decorated the building

"Grieg Gaarden is a noticeable building in the heart of

with lighted hearts, contributing to brighten the chal-

Bergen, and by doing this we reached out to a lot of peo-

lenging times, together with other businesses and con-

ple. Our intention was to contribute to spreading some

structions sites across the city.

joy during the time before the holidays", says Camilla Grieg, co-owner at the Grieg Group and board member

Together with Amas and Axnor, Grieg Gaarden became

at Grieg Gaarden AS.

decorated with lighted hearts, contributing to a more joyful time before the holidays in December. It all started with an idea from Førde, a city in Vestland county, where Hans Martin Holsen decorated the new police station with a lighted heart in November. Since then, a

Our companies

52 — 53


People at Grieg Christian Sandqvist Smith Christian´s motivation comes from his fellow colleagues at Grieg. Over the last year, a large portion his time has been spent implementing a new financial management platform.

During Covid-19 he has been project manager of the

THE BENEFITS OF SKY-BASED REPORTING

implementation of Xledger – a cloud-based platform

Moving the financial management into a sky-based

for financial management. When a large company such

platform has saved valuable time for employees and

as Grieg Group changes its financial report system,

head of staff. Specific tasks have been reduced down

it involves a lot of people. All in all, 60 companies

from three days’ work, to 15 minutes, according to

have transitioned to Xledger under his supervision.

Christian.

“When choosing a supplier, we wanted someone who is involved in Grieg, and also understands that

“One of the main benefits of this system is that we

sustainability is becoming increasingly important

are able to present numbers in real time. This way,

for operational activities, societal commitment and

the board and management are not limited to make

financial impact”, says Christian.

decisions based on outdated financial data. Equipped with real time financial data, we are able to make

GRIEG MATURITAS | ANNUAL REPORT 2020


When choosing a supplier, we wanted someone who is involved in Grieg, and also understands that sustainability is becoming increasingly important for operational activities, societal commitment and financial impact. C H R I S T I A N S A N D Q U I S T S M I T H C H I E F AC C O U N TA N T, G R I E G G R O U P R E S O U R C E S

informed decisions faster, which may be a competitive

by Annicken Kildahl from Grieg Star Group, Kolfinna

advantage or a necessity in today’s market” he says.

from Grieg Logistics, and project manager Christian from Grieg Group Resources.

Christian explains by simplifying their financial operations, they have created a more streamlined

Christian is mostly grateful for everyone else in the

value chain which enhances the overall performance

company who has been at the center of the transition

of the group.

to a new system.

INVOLVING EVERYONE FROM DAY ONE

“I am amazed and impressed by the positive attitude

In the process of finding the right supplier, the project

in the organization, and the willingness to make this

group started up by examining the different needs and

new system work. Especially during Covid-19, when

important functionalities throughout the workplace

everyone has been working from home. For some it

and in the companies within the group.

have been a big change. Luckily, it has proven to be a well-suited system for our need”, he says.

“We completed interviews and had a thorough examination of the different needs in our companies. By including all levels of our value chain, we were able to define specific challenges, and make sure we chose a supplier that would resolve and improve our financial reporting process”, Christian says. The system has proven to be both flexible and scalable at the same time, making it easy to adjust to our different businesses . It is also well-suited for a complex group such as Grieg Group. They understand our needs and even have experts on the maritime industry. HATS OFF TO THE COLLEAGUES A large project group has been involved in ordering and implementing the system. In addition to Christian as project manager, the group consists of CFO in Grieg Logistics Kolfinna Magnusdottir, VP Business Controlling & Transformation Raymond Nordvik and Rolf Wangsholm from KPMG. Wenche Kjølås has been in charge of the steering committee, accompanied

Our companies

54 — 55


Highlights from 2020

JANUARY

MARCH

Grieg Edge was established as part of Grieg Star Group

The Covid-19 outbreak effected our work and personal

as its innovation hub at the beginning of 2020. The

life and did immediately affect our crewmembers

company aims to deliver innovative, sustainable

and seafarers. The Grieg Group established an

solutions to the challenges of maritime business.

Emergency Response Team with members from all

Nicolai Grieg was appointed Head of Grieg Edge.

the Group companies in order to manage the crisis and share knowledge and experience through these unprecedented times.

FEBRUARY Grieg Seafood takes the next step on their growth journey by acquiring Grieg Newfoundland in Eastern Canada. The Newfoundland project was initiated by Grieg Kapital AS and Per Grieg Jr. in collaboration with their local partner Ocean Choice International Ltd. in 2014. The purchase agreements from Grieg Kapital to Grieg Seafood was signed in February 2020.

APRIL The ZEEDs (Zero Emission Energy Distribution at Sea) initiative was awarded funding of NOK 1,5 million from Nordic Innovation. The ZEEDs initiative is a collaboration of five leading industry companies, Wärtsilä, Aker Solutions, Equinor, DFDS, Kværner and Grieg Star. The initiative aims to develop a zeroemissions solution for the shipping industry.

GRIEG MATURITAS | ANNUAL REPORT 2020


MAY

AUGUST

Grieg Foundation donates NOK 4 million to the

Grieg Seafood aligns targets with the Paris Climate

establishment of a new center dedicated to research

Agreement, aiming to become a net zero emissions

on women’s heart diseases at the University of Bergen

company in 2050 and to reduce carbon emissions with

and Haukeland University Hospital. The University of

35 % by 2030.

Bergen is at the forefront of international research on women´s hearts diseases, and the new center makes it possible to bring together leading researchers and doctors from the University and Hospital.

JUNE The Grieg Group strengthens the team and hires Marte Leirvåg as new Communications Manager in Grieg Maturitas. The newly created position will be responsible for strategic and operational communication at the group level.

SEPTEMBER New interim management team at Grieg Shipbrokers. Finn Engelsen Jr announced his resignation as Managing Director of Grieg Shipbrokers in the fall of 2020. Morten Müller was appointed as Head of Operations, who together with CFO Ivar Sandvig Thorsen will be the interim management of the company.

Our companies

56 — 57


OCTOBER Grieg Edge becomes part of groundbreaking arctic ammonia project. Local politicians in Svalbard, Northern Norway are looking into closing the local coal power plant, and replace it with greener solutions. One of the solutions is ammonia from a planned factory in Berlevåg. The Berlevåg factory is one of the plans which is part of the ZEEDs initative. The factory will use power from the wind turbine park at Raggovidda to produce ammonia. The project is based on the same ideas as the original ZEEDs plans, and the goal is to store the ammonia in underwater containers until it is transported to Svalbard by ships.

The Port of Kaskinen in Finland, is entering into

Grieg Seafood is granted five new farming licenses in

a partnership with the Norwegian company Grieg

Newfoundland, reaching eight licenses in the region,

Connect to build the port´s future digital management

corresponding to a total production capacity of up to

system. The partnership comprises a long-term

30 000 tonnes of annual harvest.

development

of

different

digital

solutions

and

applications, streamlining the port´s operations to cut costs and emissions and eventually connecting all the port´s clients to the system.

Gry Larsen, former Secretary General at CARE was hired as Leader Sustainability and Public Affairs in Grieg Maturitas. The hire of Gry Larsen wil further strengthen the Grieg Groups commitment to sustainability.

GRIEG MATURITAS | ANNUAL REPORT 2020


G2 Ocean G2 Ocean has been awarded the Gold medal by EcoVadis for its performance in Corporate Social Responsibility (CSR), with a score of 71/100.

NOVEMBER

DECEMBER

Port of Senja and Grieg Connect has entered into a

G2 Ocean among top sustainable companies. G2 Ocean

five-year agreement for the development of a port

has been awarded the Gold medal by EcoVadis for

management information system (PMIS). The port

its performance in Corporate Social Responsibility

system is designed to handle port calls, streamline

(CSR), with a score of 71/100. They improve six points

operations and simplify invoicing and statistics

in EcoVadis’ annual sustainability ranking and is

reporting.

placed among the top five per cent of companies for its sustainable business practices.

Grieg Seafood will sell their Canadian and Scottish salmon from their new, fully integrated sales- and market organization, replacing the previous sales joint venture Ocean Quality. The first sales of Norwegian fish are estimated to start at the end of the first quarter. Until then, the sales company Sjór, previously the Norwegian arm of Ocean Quality, will sell Grieg Seafood’s salmon from Finnmark and Rogaland.

Grieg Group introduces a new, cloud-based accounting system. Following a long tender process, Grieg Group chose XLedger as their new accounting system supplier.

Our companies

58 — 59


GRIEG MATURITAS | ANNUAL REPORT 2020


GRIEG MATURITAS

Directors’ Report & Group Result 2020 The Grieg Group is rooted in a long and proud maritime history. We have lived by and with the ocean for 138 years. Profitable growth throughout our history has made us capable of building sustainable businesses and give back to the societies in which we operate.

In 2019 we incorporated the UNs Sustainable Develop-

Seafood has established its own sales organisation.

ment Goals as part of our business strategy, because

These entities are classified as held for sale and discon-

doing good is the obvious business opportunity.

tinued operations, in the consolidated financial statement. The income and expenses from these operations

2020 was a challenging year for the Grieg Group over-

are presented as a net amount from discontinued op-

all. Disrupted and tough markets due to the Covid-19

erations in the consolidated profit and loss statement

pandemic affected almost all parts of the Grieg Groups

for both 2020 and the 2019 comparable figures. This

activities. Group turnover was MNOK 6 765, operat-

significantly impacts the operating revenue for the

ing profit (EBIT) MNOK -555, and the profit before tax

Grieg Group, as the excluded revenue from these enti-

MNOK – 878 vs. MNOK 1 025 in 2019.

ties amounts to MNOK 4 053 and MNOK 3 521 for 2020 and 2019 respectively. Turnover in Ocean Quality in

The negative results are mainly related to impairment

2020 was approx MNOK 3 084 and Shetland operations

in Grieg Maritime Group, disrupted markets due to the

MNOK 969. For further details we refer to note 25.

Covid-19 pandemic in Grieg Seafood and re-organizing in Grieg Shipbrokers. Grieg Investor made 2020 their

Grieg Seafood sales are below the estimated budget

best year ever, delivering a result of MNOK 28 before

due to severe shift in demand, and lower prices in the

tax. Grieg Logistics has continued developing and in-

core market. Following a period of biological and oper-

vesting in Grieg Connect, and made a zero-profit result

ational challenges, combined with the current market

overall. Although the Grieg Group has an overall satis-

uncertainty and reduced visibility due to the Covid-19

fied cash situation, challenging markets, especially in

pandemic, Grieg Seafood has performed a strategic

shipping and seafood affected us through all of 2020.

evaluation of current operations and postponed or

Grieg Seafood ASA’s profit before tax and discontinued

slowed down the pace of investment of some of their

operations is (NGAAP) MNOK - 22, down from MNOK

growth initiatives. Measures under these priorities in-

1 051 in 2019, and turnover is MNOK 4 408, down from

clude a continued focus on cost-improving initiatives,

MNOK 4 783 in 2019.

improved fish health, and welfare and smolt infrastructure developments.

Grieg Seafood aims to divest its Shetland operations during 2021 in order to focus on the Norwegian and

Grieg Seafood (GSF) has also considered alternative

Canadian regions. Furthermore, the joint sales organ-

models for funding smolt infrastructure expansion,

isation Ocean Quality has been sold in 2020 as Grieg

and in January 2021, they invested in the joint venture

From the Boardroom

60 — 61


1 710

6 765

-878*

31 .1 2 . 2020

2020 · MNOK

2020 · MNOK

Employees

Operating Revenue

Profit before tax

* Profit before tax is mainly effected by impairment in Grieg Maritime Group of MNOK 773. Profit before tax, ex write downs is – 105 MNOK.

Årdal Aqua with Vest Havbruk and Omfar. Årdal Aqua

of several L-class ships' impairment, whereas the esti-

will produce at least 3 000 tonnes of post-smolt annu-

mated value is no longer valid. Even though the pan-

ally and grow fish to harvest size in a new land-based

demic has been challenging for Grieg Maritime Group,

facility in Rogaland. Total harvest in 2020 was 86 847

they have managed to do operations remotely, creating

tonnes (71 142 tonnes ex Shetland), compared to 82 973

new and more sustainable ways of working. In Decem-

tonnes in 2019 (71 700 tonnes ex Shetland).

ber, Grieg Edge was granted funding from the Norwegian funding scheme Pilot-E, and is now collaborating

In April 2020 the Grieg Group, through the subsidiary

with Wärtsilä, aiming to build the world's first ammo-

Grieg Seafood ASA, acquired 60% of the shares in Grieg

nia tanker. And for the first time, Grieg Green has been

Newfoundland AS. The Grieg Group already held a 39%

conducting IHM-inspections from their home offices

share of the company through the subsidiary Grieg Ka-

in collaboration with shipyards and crewmembers

pital AS. Grieg Newfoundland controls licenses for fish

worldwide.

farming in the Placentia Bay area in Newfoundland, Canada and includes a Recirculating Aquaculture

Grieg Investor delivers the best results ever due to

System (RAS) facility under construction in the same

solid financial markets and good performance. They

region. The acquisition is accounted for as a business

increased their customer relations, with a specialized

combination and further described in note 24.

focus on technology and the EU green deal and EU taxonomy.

Grieg Maritime Group – the new name after reorganizing Grieg Star at year end – delivered a negative profit

Grieg Logistics had lower activity in 2020 than the year

before tax of MNOK 943, compared to negative MNOK

before, but has managed to improve Grieg Connect’s

64 in 2019 . Due to the challenging markets in shipping

performance, delivering port technology to several

industry, the decision was taken to make an impair-

new Scandinavian ports in 2020.

ment of approx MNOK 773 on the shipping fleet, while restructuring into Grieg Maritime Group. The compa-

Grieg Shipbroker was facing a challenging market

nys balance sheet now reflects the competitive values

globally and decided to sell all Asia activity in late 2020

of their assets. The negative result is also effected by a

to focus more on core business and re-organize their

combination of higher travel costs due to the Covid-19

company. During the fall, Managing Director Finn En-

pandemic and the ongoing crew-crisis. It is also a result

gelsen jr. stepped down. An interim management lead

GRIEG MATURITAS | ANNUAL REPORT 2020


is now running the company with the goal of recruiting a new Managing Director in 2021. The Group is well-positioned for the future. In 2020 we strengthened our team, hiring a Communications Manager and Leader Sustainability and Public Af-

Highlights 2020 Disrupted and challenging markets in shipping and seafood

fairs. Besides, we have taken several necessary steps to a more professionalized structure, working together across companies to achieve specific goals, especially following our commitment to the UN SDGs, which we implemented as part of our strategic framework in

Funding granted from Pilot-E to Grieg Edge, aiming to build the world’s first ammonia tanker together with Wärtsilä

2019. Even though the pandemic has been an actual human and business challenge, a crisis can also bring opportunities. To us, the crisis has resulted in demand for more digitalization in the maritime sector, and

Grieg Shipbrokers sells its Asia-activities to Affinity to grow core business at home

more effort to deliver zero-emission solutions to the maritime industry. We believe we must be part of the resolution, or else we will be left behind. Using the crisis as an opportunity is not new to us because it is part

Grieg Green conducts remote IHM-operations worldwide from their home offices

of our culture to seek new opportunities that can better impact society. The entire year of 2020 has been affected by the pan-

Grieg Logistics delivering cutting-edge technology to ports across Scandinavia

demic. And we enter 2021 with the same uncertainty related to when society can re-open, and businesses fully enter the new normal. The Covid-19 pandemic is still spreading globally, and no industry is unaffected,

Covid-19 crisis management across companies within the Grieg Group

handeling shifting and uncertain market situations. Our people are our most valuable resource. During the pandemic, we have been witnessing a tremendous effort from all of Grieg Groups' employees, and for that, we are truly grateful. We continue to monitor the situa-

Strengthening team within Grieg Maturitas administration hiring Communications Manager and Leader Sustainability and Public Affairs

tion closely, but the extent and duration of these effects are still uncertain, and we cannot predict its results

Building in-house sales- and market organi-

and impact at this time. However, we are optimistic,

sation within Grieg Seafood

soon wrapping up the first quarter of 2021 with a much better start than we had at the same time last year. GRIEG SEAFOOD ASA Covid-19 has disrupted the salmon market, with a significant shift in demand, away from Hotels, Restaurants, and Catering (HoReCa) and to a greater extent towards the retail segment. Sales to HoReCa has been at a low level since the pandemic entered our private and business life in March, impacted by restrictions and lock down in most markets, particularly in Europe.

From the Boardroom

62 — 63


Highlights 2020

Grieg Seafood sales have remained good, however with global supply growth and volumes to the market at a higher level than the first lockdown, but salmon pric-

Participating as speakers at the OCEAN-conference 2020

es have suffered, particularly in the European market throughout 2020. Average spot price for the period was NOK 53,70 pr kg,

Conducting Remote Dry-Docking operations within Grieg Star

compared to NOK 78,3 pr kg end 2019, and down by NOK 3,5 pr kg compared to average spot price in 2019. Total harvest volume was 71 142 ton (ex Shetland), 5% below target volume of 75 000 ton, and 1 % lower than

Grieg Star Group changes its name to Grieg Maritime Group

New interim management lead at Grieg Shipbrokers

2019 (ex Shetland). The negative effect of lower prices was somewhat offset by favourable fixed price contracts in Norway. The company´s earnings are primarily driven by performance in Norway, while the long-term initiatives to address biological challenges in British Columbia continued to yield positive results. In Shetland in particu-

Grieg Kapital sells Newfoundland to Grieg Seafood

lar, cost has remained at a high level for a long time, resulting in a decision to sell all activity at Isle of Skye during 2021. Besides this, Grieg Seafood has been settling for the future, building their own in-house sales-

Brazilian soy vendors to Grieg Seafood have committed to becoming 100 % deforestation free, halting scale of deforestation-related soy to all customers

and marketing organization, and as the first worldwide global salmon producer they have invested in a postsmolt land-based farming facility in Rogaland. Despite challenging times, Grieg Seafood continues to improve where they can, reducing their impact on the environment and local communities. In 2020 they successfully took part in contributing to end all use of deforestation soy to the salmon industry. This was the very first time Brazilian soy suppliers made such a commitment. Moving forward, Grieg Seafood scales its operations towards 2025 globally, through M&A activity, with costs at or below industry average, with an ambition to reach 150 000 tonnes by 2025. GRIEG MARITIME GROUP The pandemic has been a true challenge for the shipping industry, and many of Grieg Star’s crew members had to onboard our ships for too long due to national and international restrictions in relation to Covid-19. Grieg Maritime Group has been working continuously trying to solve this unprecedented situation, working

GRIEG MATURITAS | ANNUAL REPORT 2020


to fulfil our commitment to the Neptune Declaration stating that crew members worldwide are crucial work-

In addition to all activities the past year, Grieg Star

ers, and a demand to provide them with necessary vac-

Group changed its name to Grieg Maritime Group. Over

cines. In addition, Grieg Maritime Group established

the past two years, Grieg Star Group has undergone sev-

a fund to provide salary to crewmembers who were

eral minor and more significant changes. Restructur-

banned to travel onboard our ships due to local restric-

ing the organization, bringing Grieg Green closer into

tions.

the Group, and with the establishment of Grieg Edge it was about time we re-named the Group of companies

2020 started with the establishment of Grieg Edge, a

to avoid confusion regarding the Groups different areas

maritime innovation company. Grieg Edge joined the

of expertise.

ZEEDs initiative early in 2020 and is collaborating with companies such as Equinor, Statkraft, Aker Solutions,

GRIEG LOGISTICS

Wärtsilä, DFDS and Kvaerner in seeking sustainable,

Grieg Logistics Group has among all other companies

zero-emissions solution for the shipping industry.

been affected by the pandemic and the uncertain market situation. Throughout the year they have contin-

Grieg Green, another subsidiary of the Grieg Maritime

ued their investments in Grieg Connect, a company

Group is one of few companies providing sustainable

providing advanced technology to ports across Scandi-

ship and rig recycling. In total Grieg Green has com-

navia. In late 2020 they signed off a deal with Port of

pleted more than 120 recycling projects as well as 1500+

Kaskinen in Finland, and they were newly a winner of

IHM operations. The pandemic made it challenging

an agreement with Senja commune in Norway.

to travel worldwide conducting IHM-operations, but Grieg Green managed to establish a remote solution

Normally Grieg Strategic Services, a subsidiary com-

in collaboration with shipyards and crewmembers. In

pany within Grieg Logistics takes part in several army

2020 they have also been signed a contract together

rehearsals throughout the year, but because of the pan-

with Norscrap West Askøy to dismantle the Norwegian

demic there has been a lack in activities with the Royal

Frigate “KNM Helge Ingstad”. We expect the green re-

Norwegian Army.

cycling business to continue to grow, and with this so will Grieg Green.

At Mosjøen Industrial Terminal business continues

O P E R E AT I N G R EV E N U E MNOK 1200 1000 800 600 400 200 0 2013

From the Boardroom

2014

2015

2016

2017

2018

2019

2020

64 — 65


as usual, not very much affected by the pandemic, be-

GRIEG INVESTOR

sides shift in market demand. Grieg Logistics partner-

2020 was Grieg Investor’s best year throughout his-

ship with Alcoa has continued to develop during the

tory. For the first time they managed assets of MRD-

year, with both partners being satisfied with the cur-

NOK 100 for more than 100 clients including founda-

rent agreement.

tions, associations, family-owned companies, pension funds, insurance companies and municipalities. Their

Building on Grieg Logistics strategy they will contin-

continuous focus on digitalization and efficiency has

ue to develop their company towards a more digital

made Grieg Investor a leader in key areas. Investment

and technology-driven future, aiming to provide more

in responsible and sustainable investments continues

ports with advanced technology and solve obscure

and is a strong focus area both internally in our own

problems within the maritime and other industries.

organization, towards customers as well as towards

They are also developing NoX digital – a platform in

the market in general. Responsible and sustainable in-

which shipping and other offshore companies can

vestments will play an increasingly central role for the

track their NoX emissions, making reporting seamless.

company’s customers in the future. It is therefore stra-

Grieg Logistics focus is to build more scalable solutions

tegically important for Grieg Investor to take a clear

that can be both profitable, valuable, and sustainable.

position in this market and be perceived as a leading

In 2020 GL results before tax are 0, same as last year.

advisor with a high level of trust. With the entrance of EU Green deal and EU taxonomy, Grieg Investor are

GRIEG SHIPBROKERS

well set for the future, counting 28 employees in 2020.

Facing the same challenges as of the rest of the maritime industry, Grieg Shipbrokers witnessed a tremen-

GRIEG KAPITAL

dous shift in markets when the pandemic hit us in

Grieg Kapital is a combined investment and asset man-

March. During the summer these markets stabilized,

agement company in the Grieg Group. The company

and at-home business went almost back to normal. De-

will partly run liquidity management as a buffer for its

spite stabilizing markets Grieg Shipbrokers have been

core business, as well as new business areas. In addi-

witnessing unsatisfied results for their oversea activi-

tion, Grieg Kapital manage a portfolio of direct invest-

ties for a very long time, leading to the decision to sell

ments, including real estate and private equity.

all Asia-activities to Affinity in January 2021. During the fall of 2020, Grieg Shipbrokers long-time

A new strategy for the company´s liquidity portfolio

Managing Director, Finn Engelsen jr. stepped down.

was established towards the end of 2018, and the portfo-

Since his resignation, Morten Müller (COO) and Ivar

lio was invested according to strategy at the beginning

Sandvig Thorsen (CFO) have been leading interim

of 2019. As part of a new strategy, new guidelines for re-

management, providing the company with the neces-

sponsible investments were also implemented. These

sary stability. For that we are truly grateful.

guidelines are in line with the Grieg Group’s goals and ambitions in terms of sustainability and accountabil-

Grieg Shipbrokers marks its highest income ever in

ity. Grieg Kapital has also assisted Grieg Maturitas II

2020, celebrating a turnover of MNOK 100 million.

in creating an almost identical liquidity portfolio. It is

Still, the net balance will end up in minus MNOK -36,6

the sum of these two portfolios that will constitute the

million. The decision to sell Asia-activities, with a

Group’s total capital buffer.

much-needed reorganization of the company are key explanatory factors of the results, along with uncertain

Grieg Kapital has been facing overall good perfor-

markets due to the pandemic.

mance in the capital market in 2020, and they received good return the past year, with a profit before tax of

Focusing more on core business at home, along with more profitable business solutions we believe Grieg Shipbrokers are well on their way.

GRIEG MATURITAS | ANNUAL REPORT 2020

MNOK 122.


BALANCE SHEET, FINANCIAL SITUATION AND

ganizationally and financially in March 2020. Manag-

CASHFLOW

ing Covid-19 has been one of the true challenges in the

The Grieg Group has a strong financial position. Total

Grieg Groups history, and to all who has contributed

current assets amount to MNOK 4 458 (MNOK 5 863),

across companies – we are forever grateful. In March

of which MNOK 1 579 (MNOK 1 544) is made up of bank

we established an Emergency Response Team led by

deposits, market based financial investments and

our CEO, consisting of all Grieg Group companies. We

other financial investments. Current liabilities total

developed plans, discussed measures, and communi-

MNOK 1 136 (MNOK 2 192), which gives positive work-

cated throughout the entire organization. The Emer-

ing capital of MNOK 3 322 (MNOK 3 671). The Groups

gency Response Team has met regularly since then,

total fixed assets is MNOK 10 772 (MNOK 10 937), of

providing each other with expertise and knowledge.

which MNOK 7 552 (MNOK 6 078) is financed through

In addition, we supported our CEOs and leaders with

loans from financial institutions, financial leasing, and

necessary information to employees and offered digi-

other long-term debt.

tal training sessions and social gatherings. In addition,

Grieg Seafood sucessfully issued for first time a Green

Grieg Maritime Group has been managing the on-go-

Bond on Euronext of MNOK 1 500 in 2020. Grieg Mari-

ing crew crisis together with others in the maritime

time Group refinanced part of its debt in 2020, and has

industry, working to state seafarers and crewmembers

limited maturities going forward in the next two years.

as critical workers, and provide them with necessary vaccines. We are proud that we have committed our-

CASHFLOW

selves to the “Neptune Declaration of Seafarers Well-

In total, the Group had a positive cashflow of MNOK

being and Crew Change”. And we are proud of all who

389 (MNOK 1 460) from operations. Due to investments

has been working from home, not being able to travel

in fixed and intangible assets, sales and purchase of

to their loved ones, and those that have been working

shares, the net cashflow from investing activities is

hard to keep wheels turning during these special times.

negative at MNOK 1 265 (MNOK 395). The net cashflow from financing activities is positive at MNOK 802 (neg-

ORGANIZATION AND WORKING ENVIRONMENT

ative MNOK 740), mainly due to increased debt, but

Our people are our most valuable resource. Performing

also some repayment, changes in bank overdraft and

competitively in our business areas requires compe-

dividends paid. In total, the Group had a negative cash-

tent and empowered people working safely together

flow of MNOK 74 in 2020 (MNOK 325).

across the Grieg Group companies. Sustainability Development Goals (SDG) 4, Quality education, is one of

FINANCIAL RISK AND RISK MANAGEMENT

the Grieg Groups’ stretch goals.

When operating in a global market across different

The total number of employees in 2020 was 1 663.

business areas, the companies of the Grieg Group are

Their qualifications constitute a substantial part of

exposed to different types and degrees of risk, ranging

the business capital. Keeping a diverse workforce and

from market operations and financial risk to compli-

providing our employees with learning opportunities

ance and regulatory frameworks. Risk management

that promote competence aligned with their personal

is a continuous process, and an integrated part of the

career goals, will ensure that we always have the best

Group’s governing model. Thus, we are constantly fo-

hands and minds on board.

cusing on how to identify and monitor the risk areas in the Group companies, as well as developing strategies

DIVERSITY AND GENDER EQUALITY

to mitigate such risk. For further information concern-

We believe that a diverse and balanced working envi-

ing financial risk, see note 17 to the Group accounts.

ronment is crucial for success, and we strive to be in the forefront on diversity within the businesses we op-

RISK MANAGEMENT: COVID-19

erate. SDG 5 Gender Equality is also one of our stretch

Even though we are well prepared as a group for un-

goals in business. Grieg Group will work towards gen-

certain times; we had no chance to be prepare for the

der parity at all levels of the organization, both for on-

challenges following the pandemic that hit us both or-

shore and offshore operations. We will also promote

From the Boardroom

66 — 67


To become a driving force for sustainable development we must create a purpose-driven organization embedded in an innovative culture. gender equality and diversity towards business and

We focus on preventing sick-leave by creating a good

supply chain partners.

working environment and conduct close follow-ups with our employees, also during this year with people

We still have work to do in several Grieg Group compa-

working from home offices during the year. The Group

nies. In total, only 18 percent of our employees world-

also facilitates participation in physical activities and

wide are women. Counting only Norway, 25 percent of

are also a long-term supporter of Aktiv mot Kreft and

the employees in total are women. Moving to CEO lev-

“Aktivt Kontor”.

el, 50 percent of all CEOs within the main companies

*Norwegian employees at the Grieg Group companies

in the Grieg Group (only counting Norway) are women. In theese companies' 44 percent of all board members

INNOVATION

are women.

Innovation, our stretch goal SDG 9, is vital to becoming sustainable. The Grieg Group companies engage in sev-

The level of success in achieving our stretch goals as a

eral research initiatives especially in the shipping and

group, is defined by the work in the different compa-

seafood industries. In 2020, Grieg Maritime Group has

nies. All our companies measure gender balance and

continued its work with maritime innovation through

are committed to improve gender balance among all

the establishment of Grieg Edge, and the participation

employees. Besides, all companies have a written poli-

in the ZEEDs initiative. In December 2020, Grieg Edge

cy against workplace discrimination.

was granted funding through the Norwegian funding scheme PILOT-E together with Wärtsilä, aiming to

The Grieg Group companies uses the SHE Index as a

build the world’s first ammonia tanker. Grieg Seafood

reporting tool on these questions and topics.

is also lead in several innovation projects within the industry, focusing on technology to improve biology and

HEALTH AND SAFETY

fish welfare, reducing their impact and contribute to a

The Grieg Group companies continuously focus on

better society.

training and facilitating a safe working environment for all employees by identifying and evaluating poten-

The Grieg Group is constantly working to improve and

tial risks on an ongoing basis.

digitalize our tools and working methods. In 2020 the group implemented a new accounting and reporting

In Grieg Maritime Group we have no reported severe

system across companies in the Group, adding new

working injuries. In Grieg Seafood, absence rates are

ways to analyze and report on our work with both fi-

mainly related to long-term sickness and employees

nance and sustainability, to mention some.

taking time off while waiting to be tested for Covid-19. They conducted a global Great Place to Work survey

To become a driving force for sustainable development

in 2020, where all regions received the Great Place to

we must create a purpose-driven organization embed-

Work certification with a total satisfactory score of 84

ded in an innovative culture. Within the Grieg Group

%, improving from 79 % in 2019.

we strive to collaborate across all companies in, inspiring, challenging and learning from each other. In ad-

The sick leave percentage is still low overall in the Grieg

dition, we believe sustainable business development

Group. In 2020 the sick-leave percentage was at 2,46*.

only can derive from partnerships across sectors, com-

GRIEG MATURITAS | ANNUAL REPORT 2020


From the Boardroom

68 — 69


panies, and industries, and hence the SDG number 17 (partnership for the goals) is the most important one

CORPORATE GOVERNANCE

to us.

The Grieg Group always strive to do business in a fair and proper way. We apply the Norwegian Recommen-

CLIMATE AND ENVIRONMENT

dation on Corporate Governance to ensure that the

The ocean connects our people, our businesses, our

responsibility and roles between administration, the

future, and our past. Recognizing that nature must be

Board of Directors and the General Meeting is based on

managed on behalf of future generations, we were ear-

sound practice. Deviation may arise given the fact that

ly movers making sustainability part of our strategy.

the Group is privately owned.

Besides this, SDG 13, Climate Action, and SDG 14, Life Below Water, are our stretch goals. We have a vision of

Our SDG goals within corporate governance is SDG 8

zero net emissions operations in all industries in which

(Decent work and economic growth), SDG 16 (Peace,

we operate, and we will continue to be an advocate for

justice, and strong institution) and SDG 17 (Partner-

zero emissions operations in all relevant industries and

ships for the goals). In 2020 the Grieg Group has devel-

increase awareness internally and in dialogue with key

oped its partnership with UN Global Compact, and we

stakeholders.

comply with the UN Global Compact principles on the areas of human rights, labour, the environment, and

In 2020 we have continued our partnership with WWF

anti-corruption.

and Grieg Foundation to reduce plastics pollution in the Philippines. To solve one of the world’s biggest

We will strive to be innovative to meet the challenges of

threats on climate and human life we have to provide

the SDGs, through new partnerships and cross sector

solutions where the problem is at its largest. We have

cooperation. We do this by being honest, exchange ide-

set a clear ambition: 50 percent reduction of plastic

as and seek to understand and learn from our surround-

pollution in three Philippine port cities by 2023.

ings. We have an open-minded business approach and strive to create room for action and possibilities, which

In 2020 Grieg Seafood also marked a milestone in their

will enable strong partnerships from both public, and

work promoting deforestation-free soy distribution in

private parts of society.

Brazil. The Brazilian soy suppliers to the salmon industry, CJ Selecta, Caramuru, and Imcopa, have com-

Through Grieg’s more than 138 years history, it is our

mitted to implement a 100 percent deforestation and

capacity to manage the challenges of the times, and to

conversion free soybean value chain with 2020 as their

innovate and adapt, that has put us in the position to

cut-off date. No soy grown on land deforested after this

drive the changes we want to see in the world today.

deadline will be traded. This bold and historic move sets a new benchmark for global sustainable supply

GOING CONCERN

chains.

The Board of Directors confirm that the annual accounts have been prepared on a going concern basis,

This is the very first-time Brazilian soy suppliers make

and that this assumption is valid, based on the Group’s

such a commitment. As a result of the move, most of

solid financial position and expectations of future prof-

the global farmed salmon industry, including the en-

its. The Board believes that the submitted annual ac-

tire European salmon sector and all of Grieg Seafoods

counts give a correct picture of the result, cashflow and

operations, will source soy from Brazilian suppliers

economic situation. No events have taken place after

whose soybean value chains are 100 percent deforest-

the balance sheet date that could materially affect the

ation and conversion free. The decision also marks

accounts. COVID-19 may still influence the 2021 figures

the first time an animal protein industry has set such

going forward, see below.

a voluntary and sector-wide benchmark. Our main office building, Grieg-Gaarden is also certified as an

OUTLOOK

Eco-lighthouse office building.

The outbreak of the coronavirus has caused a change

GRIEG MATURITAS | ANNUAL REPORT 2020


and a reduction in activity levels in the Norwegian

purpose-driven organization with a culture of inno-

and international economy. Nobody knows what lies

vation. To achieve this, we will continue promoting

ahead or how long the impact of Covid-19 will last. The

collaboration within and across all companies in the

escalation of both spread and measurements taken, is

Grieg Group, inspiring, challenging and learning from

currently causing high uncertainties for most of our

each other. We will also seek cooperation both among

businesses but entering the new year we are witness-

our competitors and our existing partners, the ZEEDs

ing stabilizing and improving markets in both shipping

initiative being a good example.

and seafood. Markets can still be unstable, and we don’t know how Shipping rates are moving upwards and international

the pandemic will affect us moving forward. But our

trade are increasing, affecting our part of the industry

risk profile is balanced, and we are handling the portfo-

with more optimisme. Also seafood prices are increas-

lio in a secure manner.

ing, forecasts indicating levels where profit is reasonable and in addition consumptions and demand for

Going forward, we will continue focusing and adapting

salmon is growing despite we still have a “lock down”

to changing markets and pursue opportunities as they

in most countries in hotels and restaurants. But we see

arise, given the uncertainty in the global economy.

households buying more salmon, and this is expected

Securing our businesses, employees health and cash

to continue even when the world opens up again for

situation will be given highest priority. But we still

more traditional “dining out” in addition.

think supporting new business ideas and facilitating innovation initiatives within the Group is of even more

The shift in demand, and the reduction in global trade

importance in these new circumstances. We are still

we have seen in 2020 is although influencing our op-

using the UN Sustainable Development Goals (SDG) as

erations, along with the lockdowns across Europe, and

our framework for our strategy, and we strongly believe

in Norway. But necessary actions is taken and will be

that we will act as an inspiration to other companies,

taken, moving forward in all Grieg Group companies

organizations, partners, and the rest of the community

and at Group level, to secure employees, the financial

to join our pledge: We will restore our oceans.

situation, our customers, and our partners. Thinking in long term pays off. And in the Grieg Group we are in it

The Board of Directors would like to express our thanks

for the long run.

to all employees in all our companies for their solid dedication and contribution to the Grieg Group, espe-

To become a positive driving force for sustainable de-

cially during these unprecedented times.

velopment, we must think big and bold and create a

Bergen, 14th of April, 2021 The Board of Directors of Grieg Maturitas AS

Elna-Kathrine Grieg Board Member

Elisabeth Grieg Chair

Camilla Grieg Board Member

Nina W. Grieg Board Member

Nicolai H. Grieg Board Member

Knut Nesse Board Member

Rolv-Erik Spilling Board Member

Sirine Fodstad CEO

From the Boardroom

Per Grieg jr. Board Member

70 — 71


GRIEG MATURITAS | ANNUAL REPORT 2020


Annual Accounts Annual Accounts Profit and loss statement

74

Balance sheet

75

Cashflow statement

79

Notes 1

Accounting principles

81

2

Segment information

85

3

Other operating expenses

86

4

Payroll costs, number of employees, remuneration etc.

87

5

Pensions and pension commitments

88

6

Fixed tanglible assets

90

7

Fixed intangible assets

92

8

Investments in subsidiaries

93

9

Investments in associated companies and joint ventures

97

10

Financial items

98

11

Sharehildings and other investments

99

12

Inventories and biological assets

100

13

Recievables due in more than one year

100

14

Market based financial investments

101

15

Debt, payable after 5 years

101

16

Mortgages/Guarantee liability/restricted funds

102

17

Financial risk

104

18

Contingencies and subsequent events

105

19

Taxes

106

20

Equity

108

21

Share capital and share information

109

22

Related parties

110

23

Remuneration to auditor

111

24

Business Combinations

112

25

Assets held for sale and discontinued operations

116

72 — 73


PROFIT AND LOSS STATEMENT

Amounts in NOK 1 000

GRIEG MATURITAS AS 2019

2020

1 973

-

Note 2

Operating Revenue

GRIEG GROUP 2020

2019

6 764 636

7 088 395

Operating Costs -2 848 -

-892 377

- 869 863

-

6,7

4

Payroll and social security costs Depreciation

-707 441

- 592 898

-

6

Write-down

-789 612

-

-

-

3

Operating costs - shipping

-994 195

- 882 808

-

-

3

Cost of sales - fish farming

-1 724 466

-1 531 746

-782

-216

3,23

Other operating expenses

-2 211 126

- 2 010 812

-3 630

-216

Total operating expenses

-7 319 217

-5 888 128

-1 657

-216

2

Operating profit - EBIT

-554 581

1 200 267

90 000

90 000

8

Income from investments in subsidiaries

-

-

390

169

10

Other Financial income

71 437

112 125

-

-

14

Change in value of market based assets

62 422

47 790

-

-

9

Results of investments in associated companies

-2 932

4 327

Financial items

-1

-3

10

Other Financial expenses

-454 222

-339 637

90 389

90 166

2

Net financial items

-323 295

-175 395

88 731

89 950

2

Profit before tax

-877 876

1 024 872

-215

-478

19

Tax

-86 473

-265 157

20

Profit for the year from continued operations

-964 349

759 715

25

Net profit for the year from discontinued operations

-142 568

18 771

-1 106 917

778 487

To minority interests

-351 222

515 182

Majority proportion

-755 695

263 305

88 947

89 472

Net profit and loss for the year

GRIEG MATURITAS | ANNUAL REPORT 2020


BALANCE SHEET

Amounts in NOK 1 000

GRIEG MATURITAS AS 2019

2020

Note

GRIEG GROUP 2020

2019

525 893

9 340

-

-

1 559 423

1 162 036

3 558

22 555

Assets Fixed assets Intangible assets -

-

7

Goodwill

478

-

19

Deferred tax assets

-

-

7

Licenses

-

-

7

Contracts

7

Other intangible assets

15 416

18 419

Total intangible assets

2 104 290

1 212 350

1 523 420

1 013 714

5 083 895

6 254 010

-

-

478

-

-

-

6

Land and real estate

-

-

6

Vessels

-

-

6

Vehicles, machinery and equipment

1 790 200

2 103 092

-

-

6

Total tangible assets

8 397 515

9 370 816

Tangible assets

Long-term financial assets 4 021 796

8

Investments in subsidiaries

-

4 021 796

9

Investments in associated companies

-

13

-

11

-

13

-

-

128 307

174 072

Loans to associated companies

35 837

81 125

Shareholding and other investments

31 863

46 445

Other receivables

4 021 796

4 021 796

Total long-term financial assets

4 022 274

4 021 796

Total fixed assets

From the Boardroom

74 423

52 462

270 430

354 104

10 772 236

10 937 271

74 — 75


Amounts in NOK 1 000

GRIEG MATURITAS AS 2019

2020

Note

GRIEG GROUP 2020

2019

2 309 284

2 895 834

372 755

659 757

Current assets -

-

12

Inventory and biological assets Receivables

-

-

Accounts receivable

90 000

90 000

-

-

15

6

Other receivables

196 812

762 935

90 015

90 006

Total receivables

569 567

1 422 692

67 321

87 481

Receivables from subsidiaries

Financial Investments -

-

11

Shareholding and other investments

-

-

14

Market based financial investments

744 970

614 029

-

-

Total financial Investments

812 291

701 510

41 035

40 669

Cash and bank deposits

767 051

842 161

131 050

130 675

Total current assets

4 458 193

5 862 197

-

-

Assets held for sale

1 752 172

-

4 153 324

4 152 471

16 982 601

16 799 468

16

25

GRIEG MATURITAS | ANNUAL REPORT 2020

Total assets


BALANCE SHEET

Amounts in NOK 1 000

GRIEG MATURITAS AS 2019

2020

Note

GRIEG GROUP 2020

2019

1 124

1 124

Equity and liabilities Equity Paid-up equity 1 124

1 124

409 763

409 763

Share premium

409 763

409 763

410 887

410 887

Total Paid-up equity

410 887

410 887

21

Share capital

Retained earnings 3 652 109

3 651 581

Other equity

3 683 387

4 275 241

3 652 109

3 651 581

Total retained earnings

3 683 387

4 275 241

2 813 087

3 253 908

446 040

-

3 259 127

3 253 908

7 353 402

7 940 037

Minority interests Minority interest contingent consideration Total Minority interests

4 062 995

4 062 467

From the Boardroom

20

Total equity

76 — 7 7


Amounts in NOK 1 000

GRIEG MATURITAS AS 2019

2020

GRIEG GROUP

Note

2020

2019

57 209

55 091

607 266

524 607

Liabilities Provisions -

-

5

Pension liabilities

-

-

19

Deferred tax

-

-

Other provisions

1 074

9 137

-

-

Total provisions

665 549

588 836

6 603 767

5 044 251

1 693

17 069

Other long-term liabilities -

-

15,16

Liabilities to financial institutions

-

-

15

Other long-term liabilities

-

-

16

Lease liabilities

-

-

Total long-term liabilities

946 491

1 017 132

7 551 951

6 078 452

13 317

438 322

623 394

947 985

-

-

25 211

222 632

58 139

96 913

123 273

129 365

Current liabilities -

-

24

-

Accounts payable

56

4

Accounts payable group companies

-

-

31

-

90 000

90 000

219

-

Other current liabilities

292 634

356 926

90 329

90 004

Total current liabilities

1 135 968

2 192 143

-

-

275 731

-

90 329

90 004

9 629 199

8 859 431

4 153 324

4 152 471

16 982 601

16 799 468

16

19

Bank overdrafts

Taxes payable Public duties payable

20

25

Dividend

Liabilities associated with the assets held for sale Total liabilities Total equity and liabilities

Bergen, 14th of April, 2021 The Board of Directors of Grieg Maturitas AS

Elna-Kathrine Grieg Board Member

Elisabeth Grieg Chair

Camilla Grieg Board Member

Nina W. Grieg Board Member

Nicolai H. Grieg Board Member

Knut Nesse Board Member

Rolv-Erik Spilling Board Member

Sirine Fodstad CEO

GRIEG MATURITAS | ANNUAL REPORT 2020

Per Grieg jr. Board Member


CASHFLOW STATEMENT

GRIEG MATURITAS AS 2019

Amounts in NOK 1 000

2020

GRIEG GROUP 2020

2019

Profit before tax

-877 877

1 035 722

Taxes paid

-222 632

-140 456

Gain/loss from sale of fixed assets

-

-29 905

Dividends receivable taken to income

-

-

Ordinary depreciation

707 441

683 075

Write-down (reversal) of fixed assets

789 612

-

Unrealised gain/loss market based investments

-62 422

-47 790

Change in inventory

-67 824

-495 503

Cashflow from operations 88 731

-90 000

89 950

-90 000

1

-

-31

-76

-331

-241

Change in accounts receivable

172 956

481 365

Change in accounts payable

46 024

166 151

Change in accruals

-8 063

-435

Difference in expenses pensions and payment in/out

-5 073

2 513

Effect of change in exchange rate

12 044

-1 337

2 932

-4 327

-98 071

179 669

Gain/loss from sale of market based investments

-3 316

-9 247

Net cash flow from operating activites for discontinued operations

3 505

-

389 236

1 460 157

Share of profit from associated companies (equity method) Change in other provisions

-1 629

From the Boardroom

-367

Net cashflow from operations

78 — 79


GRIEG MATURITAS AS 2019

Amounts in NOK 1 000

2020

GRIEG GROUP 2020

2019

Cashflow from investing activities Sale of fixed assets Purchase of fixed assets/newbuilding contracts Purchase of intangible assets

90 000

-4 196

-70 935

-

30 628

-

Sale of subsidiary, deconsolidation of cash and cash equivalents

-84 754

-

45 289

-210 256

Payments from other group companies 151 627

295 956

-169 900

-210 079

-121 537

-

-1 265 279

-394 863

Net change in bank overdraft

-425 005

-217 535

Loan repayment (short/long-term)

-501 386

-1 200 129

Loan proceeds

1 977 750

1 048 220

Dividends paid

-129 365

-370 293

-120 161

-

801 833

-739 737

-74 211

325 558

842 161

516 603

Purchase of shares and securities Net cash flow from investing activites for discontinued operations 90 000

-164 233

Payments on business combinations

Sale of shares

90 000

708 681 -974 969

Accumulated cash acquired in business combinations

Loan to associate 90 000

781 -882 245

Net cashflow from investing activities Cashflow from financing activities

-90 000

-90 000

Net cash flow from financing activites for discontinued operations -90 000

-90 000

-1 661

-367

42 665

41 035

41 035

40 669

Net cashflow from financing activities Net cashflow for the period Opening balance of cash and cash equivalents Cash postition in assets held for sale Cash and equivalents 31.12

GRIEG MATURITAS | ANNUAL REPORT 2020

898

-

767 051

842 161


Note 1

Accounting principles

The Annual Accounts for Grieg Maturitas AS have been

OPERATING REVENUE

prepared in accordance with Norwegian Accounting

Operating revenues are entered as income at the time

Act and generally accepted accounting principles.

of delivery. The time of delivery is understood as the time of transfer of risk and control related to the de-

GROUP ACCOUNTS

livery. Freight revenues from voyages are recognised

The consolidated accounts include the subsidiar-

on the basis of the number of days the voyage lasts.

ies specified in note 8 and shows the accounts of the

Revenue is shown, net of value added tax, returns and

parent company and the subsidiaries as a single eco-

discounts.

nomic unit. Shareholdings and investments in subsidiaries are eliminated on the basis of the acquisition

CLASSIFICATION OF ASSETS AND LIABILITIES –

method. The cost of shareholdings and investments in

MAIN RULE

subsidiaries is eliminated against the book equity of

Assets intended for long-term ownership or use are

the shares/investments at the date of acquisition. Any

classified as fixed assets. Other assets are classified as

difference arising is posted to the identifiable assets.

current assets. Receivables due within one year are

Any surplus value that cannot be attributed to specif-

classified as current assets. The corresponding criteria

ic assets, or the company’s own intangible assets, is

are applied to classify liabilities. Certain items are stat-

described as goodwill and is depreciated over its esti-

ed on the basis of special valuation rules, in accordance

mated lifetime. Intra-group transactions and internal

with accounting legislation, as detailed below. Other

balances are eliminated.

assets and liabilities are classified as fixed assets and long-term liabilities, respectively.

Companies that are bought or sold during the year, is included in the group accounts from the time of con-

INVENTORIES

trol arises or ceases. Changed owner share in subsidi-

Inventories are recognised at the lower of cost and fair

aries, where the company after the transaction still is a

value. Goods in progress, and finished goods are recog-

subsidiary, is an equity transaction for the Group. The

nised at the lower of full cost and net sales value. The

income statements and balance sheets of the group en-

net sales value of finished goods is calculated as sales

tities that have a functional currency different from the

value less sales costs. The stock of bunkers consists of

presentation currency are translated into the presenta-

fuel and diesel and are recognised at cost on the basis

tion currency as follows:

of the FIFO method.

(i) assets and liabilities are converted at the closing rate

FOREIGN CURRENCY

on the date of the balance sheet,

Assets and liabilities denominated in foreign curren-

(ii) income and expense items in the income statement

cies are stated at the year-end exchange rate. Agio,

are converted at average exchange rates for the period

or disagio, on settlements or conversion of monetary

(unless this average is not a reasonable estimate of the

items in foreign currency on the day of balance is allo-

cumulative effect of the rates prevailing on the trans-

cated. Transactions in foreign currencies is recalculat-

action dates, in which case income and expenses are

ed to transaction rate.

translated on the dates of the transactions), (iii) translation differences are recorded against equity

Foreign exchange hedging derivatives purchased in or-

and specified separately.

der to reduce the currency risk for the sub-group Grieg Star and Grieg Shipbrokers are recognised as hedging

From the Boardroom

80 — 81


transactions. Gains/losses of foreign exchange con-

are provided for in the accounts of the subsidiary. If the

tracts are therefore recorded in the same period as the

dividend exceeds the profit after the acquisition, the

hedged transactions. Please refer to note 17. Unrealized

surplus amount represents repayment of the capital in-

gain/loss on the hedging contracts is not posted on the

vestment and the distributions are deducted from the

balance sheet.

amount of the investment in the balance sheet. INVESTMENTS IN LIMITED PARTNERSHIPS

FOREIGN EXCHANGE RATES (NOK) 01.01.2020

31.12.2020

Average 2020

Investments in limited partnerships are recorded on

CAD

6,7570

6,6976

7,0076

the basis of the cost method whereby the investment is

GBP

11,5936

11,6462

12,0514

EUR

9,8638

10.4703

10,7207

USD

8,7803

8,5326

9,4004

I INTEREST RATE HEDGING Interest rate hedging contracts are recognised and classified in the same way as the related mortgage loan. The interest received/paid under the contract is therefore recognised in the interest period in question and is included in interest cost/income for the period. Unrealized gain/loss on the hedging contracts is not posted on the balance sheet. ACCOUNTS RECEIVABLE Accounts receivable are stated at nominal value less provisions for expected losses. The loss provision is based on an individual assessment of each accounts receivable. INVESTMENTS IN SUBSIDIARIES A company is defined as a subsidiary if the Group has a decisive influence on its operations. This is normally the case where the Group holds more than 50% of the voting share capital. Subsidiaries are posted in the company accounts applying the cost method. The investment is stated at historical cost of the shares unless a write-down has been necessary. The investment is written down to fair value when the reduced value is due to causes which are not deemed to be temporary. Write-downs are reversed when the grounds for the write-down no longer exist. Dividends and other distributions are recognised in the year in which they

GRIEG MATURITAS | ANNUAL REPORT 2020

stated at cost in the balance sheet. The distribution of profits/contribution to cover losses from investments in limited partnerships is taken to income/charged against profits under financial items. Profits from investments in limited partnerships are taxable in the hands of the respective participants. INVESTMENTS IN PORTFOLIO AND PRIVATE EQUITY COMPANIES A portfolio of investments are recorded as a current asset, and is valued at the lower of cost price and estimated fair value for the portfolio as a whole when the intention behind the portfolio is to diversify the risk through a balanced portfolio with respect to time, branches and geography. For unlisted investments, with no observable price, the fair value is determined by recently third party-trades, or with a reference to the fair value of similar investments. Investments with significant and permanent impairment is removed from the portfolio. INVESTMENTS IN ASSOCIATED COMPANIES AND JOINT VENTURES An associated company is a company where the Group has significant influence, but not control. Significant influence is deemed to exist for investments where the Group has between 20% to 50% of voting capital. Investments in associated companies and joint ventures are recorded on the basis of the equity method in the consolidated accounts, unless the investment value is immaterial. Investments in 50/50% joint ventures are stated according to gross method. The share of the results in associated companies is posted separately


under financial items. The investments in associated

impairment whenever events or changes in circum-

companies are posted as a financial asset. The Group’s

stances indicate that the carrying amount may not be

share of a loss is not posted in the income statements if

recoverable. An impairment loss is recognised for the

this means that value of the investment in the balance

amount by which the asset’s carrying amount exceeds

sheet becomes negative. Provisions will be made if the

its recoverable amount. The recoverable amount is the

Group has undertaken an obligation on behalf of the

higher of an asset’s fair value less costs to sell and value

associate.

in use. For the purpose of assessing impairment, assets

FIXED ASSETS

arately identifiable cashflows (cash-generating units).

Fixed assets are valued at acquisition cost, but are

The Group’s open hatch vessels are sailing in a pool,

written down to fair market value where the decline

which are market and operated by G2 Ocean AS. Also

in value is not expected to be temporary. Fixed assets

for the bulk activities, consisting of cargo contracts,

with a limited economic lifetime are depreciated on a

owned and chartered vessels, G2 Ocean AS markets

straight-line basis over the expected lifetime of the as-

and operates the vessels in Grieg Star Bulk and Grieg-

set. Long-term liabilities are stated in the balance sheet

Maas in a dry bulk supramax/ultramax pool.

at the nominal amount on the establishment date. Cur-

Having the vessels sail in a pool means that the oper-

rent assets are valued at the lower of acquisition cost

ational use of the vessels, including optimization of

and fair market value. Current liabilities are stated in

routes, is combined for the fleet. Earnings of each in-

the balance sheet at the nominal amount on the estab-

dividual vessel is therefore affected by the earnings of

lishment date. Periodic classification and maintenance

other vessels in the pool. The open hatch fleet and the

costs are posted in the balance sheet and depreciated

bulk fleet are therefore considered to be the respective

on a straight-line basis until the next planned docking.

cash-earnings of other vessels in the pool. The open

The docking costs are included in the balance sheet

hatch fleet and the bulk fleet are therefore considered

along with the value of the ship. The depreciation of

to be the respective cash-generating units.

docking costs is included in operating costs.

Newbuilding contracts are included in the fleet impair-

are grouped at the lowest levels for which there are sep-

ment and unpaid installments are deducted. INTANGIBLE ASSETS

Non-financial assets other than goodwill which have

Goodwill is depreciated over its economic lifetime.

been impaired are reviewed for possible reversal of the

The surplus value attached to the fleet’s contracts of

impairment at each date.

employment and the company’s right to renominate Grieg Star tonnage is defined as “contracts” in the bal-

PENSION COMMITMENTS

ance sheet and is depreciated over 20 years. Licenses

Defined contribution plans

with unlimited economic lifespan is subject to an an-

The Group’s main pension scheme is a defined contri-

nual impairment test. Licenses with limited economic

bution plan, for which the companies pay contribu-

lifespan is depreciated annually. Expenses related to

tions to an insurance company. The companies have

the company’s own development are recorded in the

no further payment obligations once the contributions

balance sheet from the point when it is likely that the

have been paid. Contributions are recorded as payroll

development work will result in an identifiable intan-

expenses.

gible asset. Defined benefit plan ASSET IMPAIRMENTS

Some companies have defined benefit plans, including

Assets that are subject to depreciation are reviewed for

AFP. A defined benefit plan is a pension scheme that

From the Boardroom

82 — 83


defines the pension payment an employee will receive

lessee, the rights and obligations relating to the leas-

on reaching retirement age. The pension payment nor-

ing contracts are recognised in the balance sheet as

mally depends on one or more factors, such as age, pe-

assets and liabilities. The interest element in the lease

riod of service with the company and salary level. The

payment included in the interest costs and the capital

pension commitment under defined benefit schemes

amount of the lease payment is recorded as repayment

posted in the balance sheet is the present value of the

of debt. The lease liability is the remaining part of the

defined benefit schemes at year-end less the fair value

principal. For operational leases, the rental amount is

of the pension fund assets, adjusted for unposted de-

recorded as an operating cost.

viations from estimate. The pension commitment is calculated annually by an independent actuary based

TAXATION

on a linear accrual of pension entitlements. Changes in

The tax charge in the profit and loss account consists

benefits under the pension plan are posted in the prof-

of the tax payable and the change in net deferred tax.

it and loss account on an ongoing basis. The pension

Taxes are charged when they arise. Deferred tax in the

schemes are funded through payments to insurance

balance sheet is calculated on the basis of timing dif-

companies or financed through operations. Post-em-

ferences between values for taxation and accounting

ployment benefit obligations associated with the early

purposes. Taxable and tax-deductible timing differ-

retirement pension (AFP), under the LO/NHO arrange-

ences which are reversed or can be reversed within the

ment, are a multi-employer defined benefit plan, but

same period are netted against each other and entered

the plan is recorded as defined contribution, as it is not

net. Some of the companies of the Group are subject

measurable.

to shipping taxation under the Norwegian tonnage tax system pursuant to chapter 8 of the Taxation Act.

MARKET BASED FINANCIAL ASSETS Short-term investments in shares and mutual funds

CASHFLOW STATEMENT

are regarded as part of the trading portfolio and are

The statement of cashflows is prepared on the basis of

stated at fair value at year-end. Dividends received and

the indirect method. Accordingly, the cashflows from

other distributions are entered as income under other

investment and financing activities are reported gross,

financial income.

while the accounting result is reconciled against the net cashflow from operations. Cash and cash equiva-

ESTIMATES

lents include cash, bank deposits and other short-term

When preparing the annual accounts in accordance

liquid investments that can immediately and with no

with good accounting practice, the management make

major exchange rate risk be converted into a known

estimates and assumptions which affect the profit and

amount and maturing less than three months from the

loss account and the valuation of assets and liabilities

transaction date.

as well as information about contingent assets and liabilities at year-end. Contingent losses which are likely and quantifiable are charged against income on an ongoing basis. LEASING The companies differentiates between financial leasing and operational leasing based on an evaluation of the lease contract at the time of inception. A lease contract is classified as a financial lease when the terms of the lease transfer substantially all the risk and reward of ownership to the lessee. All other leases are classified as operational leases. When a lease contract is classified as a financial lease where the company is the

GRIEG MATURITAS | ANNUAL REPORT 2020


Note 2

Segment information

GRIEG GROUP

Amounts in NOK 1 000 Operating revenue 2020

2019

4 408 1 579

Grieg Logistics Grieg Investor

Grieg Seafood (NGAAP)

2

Grieg Maritime Group

Grieg Shipbrokers Grieg Kapital

3

Other 1 Sum Grieg Group 1

Operating profit

Net financial Items

2020

2019

2020

4 783

205

1 071

-227

1 499

-762

118

-181

482

464

0

-4

-0

103

90

28

22

119

134

-1

Profit before tax

2019

2020

2019

-20

-22

1 051

-182

-943

-64

-1

-0

-5

0

0

28

23

7

-11

-4

-12

2

127

169

-8

12

130

-

122

12

-53

-50

-17

-26

-33

32

-51

6

6 765

7 088

-555

1 200

-323

-175

-878

1 025

Other includes the Groups’s holding company, mangement service company and eliminations

2

For discontinued operations and held for sale assets, please refer to note 25 for information

3

The Grieg Kapital Segment includes gain on shares sold within the Group, and is eliminted in the “Other” segment

From the Boardroom

84 — 85


Note 3

Other operating expenses

GRIEG GROUP

Amounts in NOK 1 000

Operating costs - shipping Timecharter costs - shipping

2020

2019

356 788

287 670

Ship operating costs

637 407

595 138

Total operating costs - shipping

994 195

882 808

Cost of sales - fish farming

2020

2019

1 731 233

2 047 382

-6 767

-515 636

1 724 466

1 531 746

Other operating expenses

2020

2019

Freight and cost of services

339 760

339,009

Other operating expenses

1 871 365

1 671 812

Total other operating expenses

2 211 126

2 010 820

Cost of sales - fish farming Change in inventories Total cost of sales fish farming

The Group has the following long term operating lease agreements related to chartering of vessels, offices, plant and machinery.

2020 Long-term time charter Bare-boat hire Other lease amount charged in the year

Duration

Number of vessels

Annual operating lease expense

0 - 5 years

6

254 751

1-12 years

4

104 344

2-10 years

118 830 477 925

Total lease amount charged

2019

Duration

Number of vessels

Annual operating lease expense

Long-term time charter

0-5 years

6

189 231

Bare-boat hire

1-13 years

4

100 337

Other lease amount charged in the year

2-10 years

Total lease amount charged

GRIEG MATURITAS | ANNUAL REPORT 2020

174 952 464 520


Note 4

Payroll, employee and remuneration

PARENT COMPANY Payroll and social security costs

Amounts in NOK 1 000 2020

2019

Salaries and other benefits

-

2 390

Social security costs

-

351

Pension costs

-

91

Other benefits

-

15

Total

-

2 848

The company had no employees in 2020. The Managing Director has been employed in Grieg Maturitas II from 01.06.2019. There has been no remuneration to the Board of Directors in Grieg Maturitas. The remuneration to the Board of Directors is paid from Grieg Maturitas II. Total remuneration to Managing Director and Bord members from the Group is spesified below.

GRIEG GROUP Payroll and social security costs

2020

2019

7 00 100

680 812

Social security costs

60 786

69 134

Pension costs

49 203

46 319

Other benefits

82 288

73 598

892 377

869 863

1 052

1 010

658

720

1 710

1 730

Salaries

Total

Number of employees Number of sailing personnel1 Total

1

Amounts in NOK 1 000

Salary costs are recognised in the P&L as operating costs - shipping.

REMUNERATION TO EXECUTIVES In 2020 totalt payments to salary, pension premium og other remuneration to present Managing Director was NOK 3,1 mill. and to present Board Members NOK 17,4 mill. (NOK 3,9 mill. are Board remuneration and NOK 13,5 mill. are salaries from companies in the group). Remuneration to the Board members and Managing Director is paid from the companies where the Director is employed or a member of the Board. The Group CEO is entitled to 6 months severance pay after termination of the employment relationship by the company.

From the Boardroom

86 — 87


Note 5

Pensions and pension commitments

PARENT COMPANY

The company had no employees in 2020, and therefore no employees covered by pension schemes in 2020.

GRIEG GROUP

The Group companies in Norway have pension schemes which meet the requirements of the Act relating to compulsory occupational pension schemes. Most of existing employees in Group companies in Norway are now transferred from having a defined benefit based pension scheme to having a defined contribution based pension scheme. All new employees are offered a contribution based pension scheme. Most of the Group companies abroad have a defined contribution based pension scheme.

Amounts in NOK 1 000 Total pension costs distributed as follows

2020

2019

45 900

38 403

Defined benefit pension, incl. AFP

2 119

4 520

Pension costs - discontinued operations

1 183

3 396

49 203

46 319

Defined contribution pension

Total

DEFINED CONTRIBUTION BASED PENSION SCHEME The defined contribution based pension scheme covers full-time and part-time employees and amounts to between 2% and 20% of salary. The contribution charged in the accounts in 2020 amounted to NOK 45,9 million (excluding National Insurance Contributions). DEFINED BENEFIT BASED PENSION SCHEME Some companies in the Group have defined benefit pension scheme. The Group pension scheme is funded through the accumulation of pension fund assets in an insurance company or through operations. The scheme give an entitlement to defined future benefits. In 2020 a total of 77 persons (including pensioners and persons on early retirement) were covered by the benefits based scheme.

GRIEG MATURITAS | ANNUAL REPORT 2020


Net pension costs, including National Insurance Contribution Present value of pension entitlements Interest expenses on pension entitlements Return on pension fund assets Accounting effect of estimate divergences and plan changes This year’s change, provision for undercoverage CPA Administration expenses

2020

2019

1 077

4 648

2 409

2 916

-3 062

-3 696

790

-67

-

-

904

719

2 119

4 520

2020

2019

-143 757

-138 024

79 968

83 509

6 581

-576

Net pension fund assets/(liabilities)

-57 209

-55 091

Of which unfunded obligations

-30 896

-28 969

2020

2019

Norway

Norway

1,70 %

2.30%

Anticipated rise in salaries

2,25 %

2.25%

Anticipated return on pension fund assets

2,70 %

3.80%

Anticipated increase of pensions

2,00 %

2.00%

Anticipated rise in pensions, regulation of National Insurance Base rate

2,00 %

2.00%

Pension costs for the year Pension fund assets/liabilities Calculated pension commitments Pension fund assets (at market value) Unposted effect of estimate divergences

Financial assumptions: Discount rate

From the Boardroom

88 — 89


Note 6

Fixed tangible assets

GRIEG GROUP

Amounts in NOK 1 000 Land and real estate

Vehicles, machinery and equipment

Vessels

Total

1 372 960

4 245 189

11 166 699

16 784 848

-91 547

-342 983

-

-434 530

Acquisition of business

127 009

3 693

-

130 702

Currency translation differences

-36 540

2 502

-319 923

-353 960

Additions

551 690

307 207

104 456

963 353

Disposals

-701

-36 665

-48 312

-85 678

Purchase cost at 31.12

1 922 871

4 178 943

10 902 921

17 004 735

Depreciation accumulated

-394 234

-2 345 714

-5 077 902

-7 817 850

-5 216

-43 029

-741 125

-789 370

1 523 420

1 790 200

5 083 895

8 397 515

40 323

248 205

367 400

655 929

-

1 069

773 324

774 393

Economic lifetime

20-50 years

3-20 years

10 years

25-30 years

Depreciation plan

Linear

Linear

Linear

Linear

-

527 858

543 962

1 071 820

Purchase cost at 01.01 Assets classified as held for sale

Write-down accumulated Balance sheet value at 31.12 Depreciation Write-down (reversal)

Book value of financial lease agreements included in the table above

GRIEG MATURITAS | ANNUAL REPORT 2020


FIXED ASSETS Investments in 2020 relates primarily to Grieg Seafood ASA and the Grieg Newfoundland project and the RAS plant in BC, in addition to other growth- and maintenance-investments. The Newfoundland-project comprises licenses for fish farming, a high-end fresh and saltwater Recirculating Aquaculture System (RAS) facility currently under construction. The acquisition is accounted for as a business combination and further described in note 24, and assets acquired is shown as acquisition of business in the table above. In Grieg Maritime Group an impairment test of the fleet consisting of 31 open hatch vessels was carried out using the discounted cash flow method and resulted in write-down of the fleet's book value, including a write-down of goodwill, to achieve better harmonisation with the fleet's fair market value. The Group has also written down the book value of the 50% owned bulker. FINANCIAL LEASE AGREEMENTS Grieg Seafood has financial lease agreements on vehicles, machinery and other equipment , with a book value of NOK 496 million. The corresponding amount of lease liabilities recognized is NOK 433 million and the undiscounted amount of future lease payments is NOK478 million as of 31.12.2020. Rensefiskgruppen has financial lease agreements with a book value of NOK 31 million on vehicles, machinery and other equipment, and lease liabilites amounts to NOK 22 million as of year-end 2020.

From the Boardroom

90 — 91


Note 7

Intangible assets

GRIEG GROUP

Amounts in NOK 1 000 Goodwill

Contracts

Other intangible assets

Licenses

Total

177 663

163 387

31 750

1 233 780

1 606 580

-

-

-

-477 894

-477 894

604 419

-

-

806 215

1 410 634

Currency translation differences

-71 919

-4 453

-

-84 716

-161 088

Additions

10 019

-

2 206

165 727

177 951

Disposals

-

-

-

-397

-397

Purchase cost at 01.01 Assets classified as held for sale Acquisition of business

Purchase cost at 31.12

720 182

158 934

33 956

1 642 715

2 555 787

Accumulated depreciations

-99 519

-145 324

-18 540

-83 291

-346 674

Accumulated write-down

-94 770

-10 052

-

-

-104 822

525 893

3 558

15 416

1 559 423

2 104 290

24 210

10 200

5 209

11 894

51 513

5 167

10 052

-

-

15 220

3-20 years

10 years

3 -10 years

5-25 years/ unlimited

Linear

Linear

Linear

Linear/none

Balance sheet value at 31.12

Depreciation Write-down (reversal)

Economic lifetime Depreciation plan

Investments in 2020 relates primarily to Grieg Seafood ASA and the Grieg Newfoundland project and the RAS plant in BC, in addition to other growth- and maintenance-investments. The Newfoundland-project comprises licenses for fish farming, a high-end fresh and saltwater Recirculating Aquaculture System (RAS) facility currently under construction. The acquisition is accounted for as a business combination and further described in note 24, and assets acquired is shown as acquisition of business in the table above. Contracts represent excess values related to the vessels' contracts of affreightment through the participation in the G2 Ocean pool and purchased dividend rights in the Grieg Shipbrokers Group. At year-end 2020 the remaning goodwill and contract value in Grieg Maritime Group were written off as part of an impairment assessment of the Group's open hatch vessels. Other intangible assets relates to logistic systems in Grieg Logistics Group, digital software solutions in Grieg Investor AS and Grieg Green AS. Licenses relates mainly to fish-farming licenses in Grieg Seafood ASA and Rensefiskgruppen Group. Most licenses have an unlimited economic lifetime, but is subject to a yearly valueassessment to determine if write-downs are required. GRIEG MATURITAS | ANNUAL REPORT 2020


Note 8

Investments in subsidiaries

GRIEG GROUP

Subsidiary

Amounts in NOK 1 000 Registered office

Ownership

Proportion of voting shares

Book equity 100%

Book value

Dividend

Bergen

75%

100%

4 269 627

4 021 796

90 000

Grieg Maturitas II AS

Grieg Maturitas II AS, which is owned 75% by Grieg Maturitas AS and 25% by Grieg Foundation, is the common holding company of the Group.

GRIEG GROUP

The consolidated financial statements comprise the company Grieg Maturitas AS and Grieg Maturitas II AS with the following subsidiaries:

Grieg Maturitas II AS owns the following companies:

Registered office

Grieg Maritime Group AS

Directly ownership

Directly and indirectly ownership

Proportion of voting shares

Bergen

100%

100%

100%

Grieg Logistics AS

Bergen

100%

100%

100%

Grieg Kapital AS

Oslo

100%

100%

100%

Grieg Aqua AS

Bergen

100%

100%

100%

Grieg Shipbrokers KS

Bergen

45%

55%

55%

AS Joachim Grieg & Co

Bergen

100%

100%

100%

Grieg Investor Holding AS

Oslo

45%

45%

80%

Grieg Group Resources AS

Bergen

100%

100%

100%

From the Boardroom

92 — 93


Grieg Maritime Group AS 1 owns the following companies:

Registered office

Grieg Edge 2 Grieg Green AS Grieg Green Consulting and Advisory Company Limited Grieg Shipholding 4 Grieg Star AS Grieg Star Philippines inc. Grieg Shipowning AS

Ownership

Proportion of voting shares

Bergen

100%

100%

Oslo

100%

100%

China

100%

100%

Bergen

100%

100%

Bergen

100%

100%

Philippines

100%

100%

Bergen

100%

100%

Grieg Shipping II AS

Bergen

100%

100%

Grieg International II AS

Oslo

100%

100%

Grieg Shipping III AS Grieg Star Bulk AS

Bergen

100%

100%

Bergen

100%

100%

Grieg Star 2017 AS

Bergen

100%

100%

Grieg Star OH Pool AS

Bergen

100%

100%

Grieg Star Bulk Pool AS 3

Bergen

100%

100%

GriegMaas AS

Bergen

50%

50%

GriegMaas Supramax AS

Bergen

100%

100%

GriegMaas Ultramax AS

Bergen

100%

100%

The group changed its name from Grieg Star Group to Grieg Maritime Group and has reorganized its companies and established three new companies. Grieg Maritime Group is a new company and was established 30.12.2020.

1

2

Grieg Edge is a new company established 06.01.2020

3

Grieg Star Bulk Pool AS is a new company established 20.07.2020

4

Grieg Star Group changed name to Grieg Shipholding in December 2020

From 30.12.2020 the ownership in Grieg Green AS and Grieg Edge AS is transferred to Grieg Maritime Group AS from Grieg Shipholding AS (former Grieg Star Group AS).

Grieg Shipbrokers KS owns the following companies:

Registered office

Grieg Shipbrokers Valuation Services KS

Bergen

90%

90%

Grieg Shipbrokers Ltd.

UK

100%

100%

Grieg Shipbrokers Asia AS

Bergen

100%

100%

Grieg Shipbrokers Asia Pte. Ltd.

Singapore

100%

100%

Grieg Shipbrokers Asia Ltd.

Hong Kong

100%

100%

AS Joachim Grieg & Co. owns the following companies:

Registered office

Ownership

Proportion of voting shares

Grieg Shipbrokers KS

Bergen

10%

10%

Grieg Shipbrokers Valuation Services KS

Bergen

10%

10%

GRIEG MATURITAS | ANNUAL REPORT 2020

Ownership

Proportion of voting shares


Grieg Logistics AS owns the following companies:

Registered office

Scandinavian Harbour Service AS

Tønsberg

Proportion of voting shares

100%

100%

Mosjøen Industriterminal AS

Mosjøen

100%

100%

Grieg Connect AS

Kristiansund

100%

100%

Grieg Strategic Services AS

Bergen

100%

100%

Grieg Port Security AS

Bergen

100%

100%

Grieg Aqua owns the following companies:

Registered office

Ownership

Proportion of voting shares

Grieg Seafood ASA

Bergen

50,17%

50,17%

Bergen

100%

100%

Grieg Seafood Finnmark AS

Alta

100%

100%

Grieg Seafood Canada AS

Bergen

100%

100%

Canada

100%

100%

Canada

100%

100%

Canada

100%

100%

UK

100%

100%

UK

100%

100%

Bergen

100%

100%

UK

100%

100%

Canada

100%

100%

Bergen

99%

99%

Grieg Seafood Rogaland AS

Grieg Seafood BC Ltd. Grieg Seafood Sales North America Inc.

2

Grieg Seafood Premium Brands Inc. 6 Grieg Seafood Hjaltland UK Ltd. Grieg Seafood Shetland Ltd. Grieg Seafood Norway AS

1

Grieg Seafood Sales UK Ltd. 5 Grieg Seafood Sales USA Inc. Grieg Newfoundland AS

3

6

Canada

100%

100%

Grieg Newfoundland Seafarms Ltd.

Canada

100%

100%

Grieg Newfoundland Nurseries Ltd.

Canada

100%

100%

Grieg Newfoundland Development Ltd.

Canada

100%

100%

Grieg Seafood Newfoundland Ltd.

1

Ownership

4

New company established: Grieg Seafood Norway AS.

Name change: Ocean Quality North America Ltd = Grieg Seafood Sales North America Inc. 3 Ocean Quality USA = Grieg Seafood Sales USA Inc. 4 Grieg Newfoundland Salmon Ltd = Grieg Seafood Newfoundland Ltd 2

Name changes at the end of 2020, registered in 2021: Ocean Quality UK Ltd. = Grieg Seafood Sales UK Limited 6 Ocean Quality Premium Brands Inc = Grieg Seafood Premium Brands Inc. 5

6

Grieg Seafood ASA has an option to purchase the latest percentage in the company Grieg Newfoundland AS

From the Boardroom

94 — 95


Grieg Investor Holding AS owns the following companies:

Registered office

Grieg Investor AS

Oslo

Grieg Kapital AS owns the following companies:

Registered office

Grieg Holdings II AS

Ownership

Proportion of voting shares

100%

100%

Ownership

Proportion of voting shares

Bergen

100%

100%

Finnøy

80%

80%

Ryfylke Rensefisk AS

Finnøy

100%

100%

Finnmark Rensefisk AS

Alta

100%

100%

Marin Innovasjon AS

Finnøy

100%

100%

Finnøy

100%

100%

Talgje Rensefisk AS

Finnøy

100%

100%

Austevoll Rensefisk AS

Austevoll

Rensefiskgruppen AS

Ryfylke Berggylt AS

72%

72%

100%

100%

74%

90%

AS Nestun Uldvarefabrik

Bergen

Silves Odissey Inv. and Techn. Lda.

Portugal

Grieg Gaarden AS

Bergen

100%

100%

Grieghallen Parkering II AS

Bergen

47,52%

47,52%

Bergen

100%

100%

93,15%

93,15%

Grieghallen Parkering AS Maris Reinvest AS

GRIEG MATURITAS | ANNUAL REPORT 2020

Oslo


Note 9

Investments in associated companies and joint ventures

GRIEG GROUP

Amounts in NOK 1 000 Ownership %

Registered office

Book value 01.01.

Fram Marine AS 1

25,00%

Oslo

2 281

Tytlandsvik Aqua AS

33,33%

Hjelmeland

38 638

Nordnorsk Smolt AS

50,00%

Hasvik

42 433

Bergen

42 065

Grieg Newfoundland 2 G2 Ocean Holding AS

35,00%

Bergen

48 155

Rogaland Havbrukspark Eiendom AS

50,00%

Finnøy

500

Sum

1 2

174 072

Addition/ Disposals

Share of profit/loss for the year

Other changes

Book value 31.12

Excess value incl. in book value 31.12

2 281

219

4 520

43 158

-

-1 169

41 264

-

-

-

41 105

-

500

-

128 307

219

-42 065 -6 274

-42 065

-2 923

-776

-776

Booked according to the cost method. In 2020, Grieg Kapital AS sold their shares in Grieg Newfoundland AS to Grieg Seafood ASA. For more information, please see note 24.

From the Boardroom

96 — 97


Note 10

Financial items

Amounts in NOK 1 000 Parent company Other Financial Income

Grieg Group

2020

2019

2020

2019

169

390

17 442

30 789

Gain on sale of investments

-

-

30 055

33 739

Other financial income

-

-

23 941

47 596

Total financial income

169

390

71 437

112 124

Interest income

Parent company Other Financial Expenses

Group

2020

2019

2020

2019

Interest expenses

-

-

307 411

270 841

Write-down of financial fixed assets

-

-

180

40 044

Loss on sale of investments

-

-

-

9

Other financial expenses

3

1

146 631

28 744

Total financial expenses

3

1

454 222

339 638

GRIEG MATURITAS | ANNUAL REPORT 2020


Note 11

Shareholdings and other investments

GRIEG GROUP

Amounts in NOK 1 000

Shareholdings and other investments - classified as current assets Ownership

Purchase cost

7,62 %

27 225

Proximar Seafood AS

14,32%

10 218

Voxtra East Africa Agribusiness Fund

5,44 %

5 740

Blueye Robotics AS

3,81 %

5 250

25,00 %

5 008

Company Argentum Investment Partner IS

Fremre Asset 3 AS DNB Private Equity III ( IS)

1,41 %

4 262

F 14 Invest AS

3,81 %

980

Rem Nor AS

8,82 %

3 000

Union Real Estate Holding AS

0,74 %

2 427

Karihaugveien 22 Holding AS

6,70 %

1 456

Sahara Forest Project AS

2,10 %

1 150

Idekapital Fund 2 IS

Book value 31.12.

606 67 321

67 321

Ownership

Purchase cost

Book value 31.12.

Mercell Holding AS

3,52 %

17 003

17 003

UACC Ross Tanker DIS

3,00 %

1 569

1 569

Total - classified as current assets

1

Shareholdings and other investments - classified as fixed assets Company

Other investments Total - classified as fixed assets 2

66 542

13 291

85 114

31 863

Portfolio investments: the portfolio of investments on the list is valued at the lower of cost price and estimated fair value (market value). The investments are treated as a portfolio where gains and losses are off-set, and the cost price are measured against the estimated fair value on the total portfolio. The portfolio investments are classified as current assets. 2 Direct share investments: the shares are valued on the basis of the cost method at an individual basis, and written down if fair value is lower than the cost price. Writedowns are reversed when the grounds for the write-down no longer exist. The direct share investements are classified as fixed assets. 1

From the Boardroom

98 — 99


Note 12

Inventories and biological assets

GRIEG GROUP

Amounts in NOK 1 000

Raw materials - fish farming Goods in progress - fish farming Finished goods Bunkers and lube oil Total inventories and biological assets

Note 13

2020

2019

80 278

180 323

2 209 169

2 684 933

155

111

19 682

30 468

2 309 284

2 895 834

Receivables due in more than one year

GRIEG GROUP

Loan to associated companies Other receivables Total

Amounts in NOK 1 000 2020

2019

35 837

81 125

74 423

52 462

110 260

133 587

The reduction in loan to associated companies due in more than one year is mainly related to the consolidation of Grieg Newfoundland AS - which was an associated company in 2019.

GRIEG MATURITAS | ANNUAL REPORT 2020


Note 14

Market based financial investments

GRIEG GROUP

Amounts in NOK 1 000 Purchase cost

Market value

20 929

36 787

309 350

395 288

Bonds

173 890

188 885

Money market funds

120 733

124 010

624 902

744 970

Individual shareholdings Mutual funds

Total Unrealised gain this year of market based financial investments

Note 15

62 422

Debt payable after 5 years

GRIEG GROUP

Long-term debt - maturity more than 5 years

Long-term finance lease liabilities - maturity more than 5 years1

Amounts in NOK 1 000 2020

2019

100 879

81 487

2020

2019

453 517

522 222

The long-term finance lease liabilites relates to leases of barges, cage installations, plant, machinery and other equipment in the segment Grieg Seafood group and leases of vessels in the segment Grieg Maritime Group.

1

From the Boardroom

100 — 101


Note 16

Mortgages/guarantee liability/restricted

PARENT COMPANY

Restricted deposits related to employees’ tax deduction

GRIEG GROUP

Restricted deposits related to employees’ tax deduction Debt secured by mortgage (including overdraft facilities) Mortgaged debt - long term Factoring and short term debt Total mortgaged debt

Amounts in NOK 1 000 2020

2019

-

-

Amounts in NOK 1 000 2020

2019

42 158

30 237

2020

2019

6 035 633

6 048 139

9 654

437 775

6 045 287

6 485 915

Out of the total long-term mortgaged debt, NOK 946 million is long-term financial lease liabilities. For further details on leased assets see note 6. Group assets have been given as mortage security.

Balance sheet value of mortgaged assets

2020

2019

221 241

522 595

4 496 663

5 452 601

1 459 959

915 064

Other assets

1 122 081

2 018 858

Licences

809 947

1 133 630

2 280 270

2 865 255

1 107 076

-

11 497 237

12 908 004

Receivables Vessels and newbuildings Real estate

Inventories Assets held for sale Total

Pledges include shares in subsidiaries. The book value of these shares is 0 in the consolidated accounts.

Undrawn borrowing facilities

GRIEG MATURITAS | ANNUAL REPORT 2020

2020

2019

1 940 029

918 572


LOAN COVENANTS For Grieg Seafood the financial covenant of the syndicated loan agreements is equity-ratio of minimum 35%, measured on the book value of the consolidated Grieg Seafood Group (exclusive of Ocean Quality). In

30%, measured consistent with the Group’s equity-ratio financial covenants as defined in its syndicated loan agreement with secured lenders. Grieg Seafood ASA was in compliance with the financial covenants of the bond agreement at 31 December 2020.

addition, there is a rolling last-twelve months NIBD/

Grieg Maritime Group is per year end 2020 required

EBITDA leverage-ratio requirement. The leverage-ra-

to have a minimum of liquid funds of USD 25 mill. /

tio metric of NIBD/EBITDA is linked to their equi-

5% of total interest bearing debt. A common covenant

ty-ratio requirement: if equity-ratio is more than 40%,

for all mortgage loans in the Grieg Maritime Group is

maximum leverage-ratio is 5.0, and if equity-ratio is

that the Group must continue to be controlled by the

equal to or less then 40%, maximum leverage ratio is

Grieg family and have a booked equity ratio > 25%.

4.5. Grieg Seafood Group had 31 December 2020 an eq-

Grieg Maritime Group have been in compliance with

uity ratio (according to IFRS) of 41%, while the equity

the covenants throughout the year.

ratio of the Grieg Seafood Group according to financial covenants was 43%, compared to 51% at 31 December 2019.

In addition to the guarantees listen above, Grieg Shipowning AS is providing guarantees in the amount of USD 20,2 mill. per 31.12.2020 for Grieg International II

Grieg Seafood was in Q4 2020 granted an amendment

AS vessels, USD 60,7 mill. for the Grieg Shipping II AS

to the covenants through the third quarter of 2021. In

vessels, USD 8,8 mill. for the Grieg Shipping III AS ves-

this period which the temporary amended terms to

sel and USD 46,7 mill. for the GriegMaas Ultramax AS

the syndicated loan agreement apply, Grieg Seafood

vessels. Grieg Shipping II AS and Grieg International II

is required to have a minimum free liquidity of NOK

AS is providing guarantees in the amount of USD 198,4

200 million. In addition, there is a set requirement for

mill. for Grieg Shipowning AS. The companies have

the 12 month rolling EBITDA throughout the period.

been in compliance with the covenants throughout

NIBD/EBITDA will thus not be measured, according to

the year.

agreements with our creditors, through Q3 2021. At 31 December 2020, Grieg Seafood ASA was in compliance with these temporary amended terms. In 2020 Grieg Seafood issued a Green Bond listed on Euronext (Oslo Stock Exchange). The bonds financial covenant is an quity-ratio requirement of minimum

From the Boardroom

102 — 103


Note 17

Financial risk

The Group is exposed to a range of financial risks; mar-

CREDIT AND COUNTERPARTY RISK

ket risk (including currency risk, cashflow interest rate

The Group’s credit risk that counterparties do not

risk, fair value interest rate risk and price risk), credit

have financial ability to meet their obligations is

risk and liquidity risk. The Group make use of finan-

relatively low due to solid customers, and a diversified

cial derivatives to manage the financial risk.

portfolio. Historical losses on receivables have been

MARKET RISK Several of the Group’s companies hold significant financial investment portfolios, and changes in the value of international securities and interest rates directly affect the valuation of these. The portfolios are managed in accordance with long-term strategies and within defined mandates, also reflecting the Group’s business principles. FOREIGN EXCHANGE RISK A large proportion of the Group’s revenues, assets and liabilities are in foreign currencies, mainly USD and EUR. Changes in foreign exchange rates therefore affect the group accounts presented in NOK. The Group

minor amounts. The Group strive to mitigate the counterparty credit risk by making use of procedures and systems and developing these on an ongoing basis. In specific parts of the Group with a large customer portfolio, the risk is reduced by maintaining robust procedures for assessing counterparty risk and credit rating. LIQUIDITY RISK The Group constantly monitors liquidity reserves and needs. The Group’s liquidity risk has increased, but strong liquidity and a focus on cash management ensure that there is sufficient liquidity to meet the Group’s obligations when they mature.

companies have strategies and procedures in place to

INTEREST RATE RISK

reduce the exchange rate risk.

Interest rate risk arises in the short and long term

Grieg Maritime Group hedges expenditures in currencies other than USD through forward contracts. At 31.12.20 the company had entered into hedging agreements for the use of currency swaps for USD 4.8m. Total unrealized MTM value, not recognized in the balance sheet at 31.12.20, was USD 1.5m. Grieg Seafood apply hedge accounting to foreign currency contracts relating to non-current physical delivery contracts. The company do not utilize hedge accounting for its short-term foreign currency forward contracts. At 31 December 2020, no hedging contracts through comprehensive income at fair value is present for the Group, as the hedging arrangements have matured before the balance sheet date. Grieg Shipbrokers had 31.12.20 forward contracts to hedge a total of USD 17.6m, with an unrealized not recognised gain of NOK 1.1m.

as most parts of the Group’s debt are at a floating rate of interest. A change in interest rates will therefore impact the interest expense. The application of interest rate derivatives increases the predictability of the financing cost. A change in interest rates will also affect the returns on the investment portfolio and the rates on cash deposits. The Group’s strategy is to employ a certain level of hedging using interest rate swap agreements to ensure low volatility in the Group’s interest expenses. Grieg Maritime Group hedges part of its interest rate exposure. Gains and losses arising from valuation of interest rate swaps in Grieg Maritime Group are recognised in the same period as the related interest expense. At 31.12.20 the Grieg Maritime Group held interest rate swap agreements of USD 209.4m. Total unrealized MTM value, not recognized in the balance sheet, was USD 11m.

GRIEG MATURITAS | ANNUAL REPORT 2020


Gains and losses arising from interest rate swaps in

time used as a risk management instrument in order

Grieg Seafood are not subject to hedge accounting

to smooth out freight volatility. The FFA contracts

and are recognized at the lowest of cost and fair val-

are settled as an adjustment of operating income. At

ue. At 31.12.20 Grieg Seafood held interest rate swap

31.12.20, the Group had not entered into any Forward

agreements with a total of NOK 1 910m. Unrealized

Freight Agreements (FFA).

gains related to these agreements, not recognized in the balance sheet, amounts to NOK -6.55m. The interest rate swap agreements have a duration of four years. The Company constantly evaluates whether these periods should be rolled over.

PRICE RISK The Group is exposed to fluctuations in spot prices for salmon, which is mainly determined by global supply. Although the effect of changing prices is somewhat reduced through geographical diversification, long

FREIGHT RISK

production cycles make it challenging to respond

The Group’s ship earnings are to a large extent related

rapidly to change in marked prices. Salmon is primari-

to cargo transportation contracts as a considerable

ly traded at spot prices. The price risk is partly hedged

share of the shipping activities are of an industrial

through financial sales and purchase contracts. At

character. The open hatch fleet’s earnings are to a

31December 2020, the Group had financial salmon

large extent related to long term cargo contracts. This

contracts for 2020 with an unrealized gain of NOK 76

implies that revenues are less volatile than in the spot

million, of which all were sales contracts, and physical

market, and that change in market conditions gener-

delivery contracts recognized as liability, was zero.

ally have a delayed effect on the results. The Group’s

The unrealized gain is not recognized as an income or

dry bulk activity is on the other hand more exposed to

asset, as the contracts are recognized at the lower of

general spot market movements.

cost and market value.

Forward Freight Agreements (FFA) are from time to

Note 18

Contingencies and subsequent events

INSPECTION – EUROPEAN COMMISSION The European Commission DG (Director General) Competition performed an inspection at Grieg Seafood Shetland on the 19th of February 2019 to explore potential anti-competitive behavior in salmon industry. Grieg Seafood aims to be open, transparent and forthcoming and will provide all necessary information requested by the European Commission DG Competition on its investigation. There is no new information as of the Group annual accounts approval date. Furthermore, the amount of the contingent liability related to a negative outcome of this matter cannot be reasonably estimated, due to the lack of information. Consequently, no provision has been recognized in relation to both the EU and the US investigation, nor to

SALE AND ACQUISITION OF GRIEG NEWFOUNDLAND AS The sale and acquisition of Grieg Newfoundland AS was completed on 15 April 2020. Grieg Newfoundland AS was 39% owned by Grieg Kapital AS (consolidated subsidiary) and 39% by Kvasshøgdi AS (owned by Per Grieg jr). The remaining of the shares were owned by the local partner Ocean Choice International Ltd (19.5%) and Knut Skeidsvoll (2.5%). The transaction included a contingent consideration which involves that if certain production volumes are reached within the next ten years, additional payments are triggered. Please see note 9 for further details. Additional details regarding the transaction can also be obtained from Grieg Seafood

any of the civil lawsuits

ASA Annual Report 2020 on www.griegseafood.com

From the Boardroom

104 — 105


Note 19

Taxes

PARENT COMPANY Tax expense consists of:

Amounts in NOK 1 000 2020

2019

Ordinary result before tax

89 950

88 731

Permanent differences

-89 975

-89 712

12

15

-13

-965

13

-

-

-

2020

2019

-

-

Change in deferred tax

478

-216

Tax expense (-income)

478

-216

2020

2019

47

59

Change in temporary differences Basis of tax payable in profit and loss account Tax losses carried forward Basis for payable taxes in the income statement

Components of the income tax expense Payable tax on this year’s result

Deferred tax Taxable differences Tax-deductible differences

-

-

Tax credit carried forward

-2 246

-2 233

Basis for deferred tax

-

-2 174

Deferred tax assets in the balance sheet

-

478

GRIEG MATURITAS | ANNUAL REPORT 2020


GROUP Tax expense consists of:

Amounts in NOK 1 000 2020

2019

Profit before tax

-877 876

1 024 872

Profit before tax, companies subject to shipping tax

-899 756

-52 727

21 880

1 077 599

Profit before tax, companies not subject to shipping tax Permanent differences

-72 734

36 645

Change in temporary differences

-178 219

-242 693

Change in tax loss carried forward

335 767

91 272

Basis of tax payable, companies not subject to shipping tax

106 694

962 824

Tax payable, companies not subject to shipping tax

25 241

235 557

Tax payable

25 241

227 636

Increase / (decrease) in deferred tax

61 231

29 602

86 473

265 158

2020

2019

20 884

221 606

Tax charge for the year on ordinary result

Tax payable in balance sheet Tax payable, companies not subject to shipping tax Tonnage tax

3 277

3 486

Other adjustments (treasure trove)

1 051

-2 460

Total tax payable in balance sheet

25 212

222 632

2020

2019

3 039 481

2 582 712

-59 308

-64 433

Deferred tax Taxable timing differences Tax-deductible timing differences Tax loss to be carried forward Net timing differences Deferred tax on net timing differences Unposted deferred tax assets Net deferred tax in balance sheet

Loss carried forward Norway, companies not subject to shipping tax UK Canada USA

-967 493

-849 451

2 012 680

1 668 827

494 999

447 213

112 267

77 394

607 266

524 607

2020

2019

-579 792

-343 586

-

-152 846

-91 288

-

-17 345

-

Companies subject to shipping tax

-279 067

-353 019

Total

-967 493

-849 451

From the Boardroom

106 — 107


Note 20

Equity

PARENT COMPANY

Amounts in NOK 1 000 Share capital

Share premium

Other equity

Total

1 124

409 763

3 652 109

4 062 995

Profit of the year

-

-

89 472

89 472

Provision for dividend

-

-

-90 000

-90 000

1 124

409 763

3 651 581

4 062 467

Equity - Opening Balance

Equity - Closing Balance

GROUP

Amounts in NOK 1 000

Share capital

Share premium

Group reserves

Minority interests

Miority interests contingent consideration

Equity - Opening Balance

1 124

409 763

4 275 241

3 253 908

-

7 940 037

Profit for the year

-

-

-755 695

-351 222

-

-1 106 917

Provision for dividend at year end

-

-

-90 000

-33 273

-

-123 273

Dividend paid during the year

-

-

-

-21 888

-

-21 888

Capital increase - business combination 1

-

-

306 952

96 243

446 040

849 235

Currency translation differences 2

-

-

-15 848

-15 991

-

Equity transactions 3

-

-

-

-65 560

Other changes 4

-

-

-37 263

-49 131

-

-86 394

1 124

409 763

3 683 387

2 813 087

446 040

7 353 402

Equity - Closing Balance

1

Total

-31 839 -65 560

Relates to the acquistion of Grieg Newfoundland AS and includes:

Capital increase from consideration shares issued to minority in Grieg Seafood ASA Contingent asset classified as equity Fair value of investment already held less the book value of that investment For further details see note 24 Business combinations

2

Currency translation differences: this is primarily the effect of converting subsidiaries from local currencies into NOK

3

Equity transactions: Sale of the subsidiary Ocean Quality and derecognition of the non-controlling interests

Other changes: the total amount is similar to the OCI (other comrehencive income) from Grieg Seafood ASA in their IFRS financial statements, which is converted to NGAAP for consolidation purposes in Grieg Maturitas Group.

4

GRIEG MATURITAS | ANNUAL REPORT 2020


Note 21

Share capital and share information

In 2020 the general assembly of Grieg Maturitas AS has granted voting rights to the shares that previously did not have voting rights (B-shares). As of this date there is only one class of shares in the company, all with equal rights. THE SHARE CAPITAL CONSISTS OF THE FOLLOWING SHARE CL ASSES: Class Ordinary shares

The company’s shareholders are as follows:

Number of shares

Nominal

Book value

1 123 530

1,-

1 123 530

Ownership %

Ordinary shares

Kvasshøgdi AS

4,37 %

49 111

Thomas WG AS

4,50 %

50 559

Joachim WG AS

4,50 %

50 559

Benedicte WG AS

4,50 %

50 559

Nina WG. AS

4,50 %

50 559

Salthavn Invest AS

7,49 %

84 097

Klar Invest AS

4,96 %

55 750

Maneo Holding AS

4,96 %

55 750

Nyhavn Investment AS

4,96 %

55 750

GMC Invest AS

22,37 %

251 347

Suletind AS

22,37 %

251 347

Capelka AS

10,52 %

118 142

100 %

1 123 530

Total

Through the companies specified above, the Board members Elisabeth Grieg, Per Grieg, Camilla Marianne Grieg, Elna-Kathrine Grieg, Nicolai Hafeld Grieg and Nina Willumsen Grieg and their families have control of 100% of the shares in Grieg Maturitas AS.

From the Boardroom

108 — 109


Note 22

Related parties

PARENT

1

Amounts in NOK 1 000 Operating revenue

Operating cost

Financial income 1

Financial expenses

Accounts payable

Current receivables 1

0

0

90 000

0

4

90 000

Dividend from subsidiaries

GROUP

Amounts in NOK 1 000

Members of the board and managing director of the parent company, including their related parties, are with companies in the Group considered as closely related parties. Transactions and intercompany balances with Group companies are eliminated in the Group accounts, and is not mentioned below. Remuneration to directors and managing director, see Note 4.

Associated companies Other related parties Total

Operating revenue

Operating cost

Financial income

Financial expenses

Receivables

Liabilities

1 224 641

-

11 797

-

12 492

9 318

14 154

114 713

-

-

1 937

-

1 238 795

114 713

11 797

-

14 429

9 318

Transactions with related parties are governed by market terms and conditions in accordance with the arms length principle. ACQUISITION OF GRIEG NEWFOUNDLAND AS Grieg Seafood Group's acquisition of Grieg Newfoundland AS (99%) was completed on 15 April 2020. Grieg Newfoundland AS was 39% owned by Kvasshøgdi AS (owned by Per Grieg Jr and a shareholder in Grieg Maturitas). For further information on the transaction see note 24 - Business combinations

GRIEG MATURITAS | ANNUAL REPORT 2020


Note 23

Remuneration to auditor

Amounts in NOK 1 000 PARENT Specification of Group auditor’s fee 1

GROUP

2020

2019

2020

2019

38

71

6 507

7 350

13

7

2 005

1 789

Other assurance services

-

-

700

867

Other assistance

7

20

4 967

1 597

57

98

14 179

11 604

1 916

1 823

2020

2019

Total Group auditor

346

139

Total other auditors

624

1 245

Total fees discontinued operations (excluding VAT)

970

1 384

Statutory audit (incl. technical assistance annual accounts and notes) Taxation advice

Total (except VAT) The amount above includes remuneration to other auditors with:

1

Containing continued and discontinued operations

Group Auditor's fee related to discontinued operations included in the table above

From the Boardroom

110 — 111


Note 24

Business Combinations

The Group gained control over the entity Grieg Newfoundland AS in 2020. The entity, previously owned 39% and accounted for as an associate is therefore consolidated from 15 April 2020. On this date, Grieg Maturitas, the subsidiary Grieg Seafood ASA (GSF) completed the acquisition of Grieg Newfoundland AS (GNL). At the acquisition date, 99% of the shares were transferred, while the remaining 1% is subject to a put/call option accounted for as contingent consideration. GNL holds ownership in a fish farming business under development in Newfoundland, Canada. As the Grieg Maturitas Group already held 39% of the shares through subsidiary Grieg Kapital AS, the acquired shares for the Group is the remaining 60% acquired from entities outside the Group. ABOUT GRIEG NEWFOUNDLAND The Newfoundland-project comprises licenses for fish farming in the Placentia Bay area in Newfoundland. The project includes a high-end fresh and saltwater Recirculating Aquaculture System (RAS) facility in Marystown Marine Industrial Park, close to Placentia Bay. The facility currently under construction includes a hatchery, nursery and a smolt unit. Further information on the acquired entity can be found in the Annual Report of Grieg Seafood ASA (note 6 to the consolidated financial statements). TRANSACTION Grieg Newfoundland was a project initiated by the Grieg Group and Per Grieg Jr. in collaboration with their Canadian partner. Per Grieg Jr. is a member of the Board in Grieg Maturitas AS, and through related party Kvasshøgdi AS held 39% of the shares in GNL now acquired by the Group. The transaction has been approved by the General Assembly in Grieg Seafood ASA in line with the section 3-8 of the Public Limited Liability Companies Act. The consideration is split into three parts - the net cash payment, the completion shares and contingent consideration. Compensation to Kvasshøgdi AS for their 39 % stake in Grieg Newfoundland AS consist of a cash settlement of 62,9 MNOK, fair value of consideration shares in Grieg Seafood ASA of 53,8 MNOK and a contingent consideration estimated to have a fair value of 291,7 MNOK on the date of the transaction.

GRIEG MATURITAS | ANNUAL REPORT 2020


Amounts in NOK 1 000

Cost of business combination

15.04.2020

Cash payment for the shares adjusted for leakage cost

70 935

Completion shares in Grieg Seafood ASA

124 575

Adjusted to fair value the transaction day

-28 332

Consideration transferred at closing Contingent consideration

96 243 167 177 446 040

Consideration business combination

613 217

Fair value of the shares held by Grieg Maturitas Group prior to the acquisition

349 017

Total cost of business combination

962 235

Total cost

962 235

Book value of equity, excluding goodwill Excess value to be allocated

78 629 883 605

CONTINGENT CONSIDERATION If certain production volumes are reached within the next ten years, additional payments are triggered. The additional amount becomes unconditional when GNL has reached a planned annual harvest volume of 15 000 tonnes, and the amount increases with volume until an annual harvest volume of 33 000 tonnes. The amount due is NOK 43 per kg for volumes between 15 000-20 000 tonnes, and NOK 55 per kg for volumes between 20 00033 000 tonnes, with a 4% per annum inflation adjustment in the period 2023-2029. Fair value estimate of the additional amount has been arrived at by using the DCF-model based on four different scenarios of volume development and the timing of this development. Volumes exceeding 15 000 tonnes require further investments in additional post-smolt modules, biomass, and seafarm equipment. The high probability of such investments being made have been incorporated in the scenario analysis. The maximum nominal amount is estimated to NOK 930 million +4% annual increase in the period from 2023 to 2029. The additional amount is settled in shares in GSF and/or cash. The sellers may require a cash payment of maximum 33.34%. Further GSF has the discretion to increase the cash portion up to 100% cash. If settlement is made in shares, the number of settlement shares is calculated based on the last month’s volume weighted average listed price from time the conditions are met. CLASSIFICATION OF THE CONTINGENT CONSIDERATION It is within the Grieg Seafood Group's sole discretion to decide whether the expansion investments are to be carried out in line with the production plan. If stage two and three of the post-smolt facilities are not constructed within ten years, the additional milestone payments will not be triggered. On this basis the contingent consideration is classified as equity. Classification as equity reflects that the sellers continue to share the risk of the operations. Only if the first phase of the operation is successful, the seller will receive a payment when the next phase is entered into. Due to the materiality of the amount, the contingent consideration is presented as a separate component of equity.

From the Boardroom

112 — 113


Amounts in NOK 1 000

Allocation of the excess value (NOK 1 000)*

15.04.2020

Licences (incl. warranty licences)

748 017

Goodwill

604 419

Property, plant and equipment Indemnification assets Excess value assets Deferred tax Net excess value allocated Assets acquired and liabilities assumed Licences (incl. warranty licences)

-493 230 24 400 883 605 883 605 15.04.2020 762 171

Other intangible assets (incl. exclusivity agreement)

44 044

Property, plant and equipment

130 702

Indemnification assets

24 400

Other receivables Cash and cash equivalents Total assets acquired Deferred tax Long-term debt Current liabilities Total obligations assumed

12 779 30 628 1 004 723 584 639 62 269 646 908

Identified net assets

357 815

Goodwill

604 419

Net assets at acquisition

GRIEG MATURITAS | ANNUAL REPORT 2020

962 234


VALUATION OF LICENSES Aquaculture licenses are valued assuming an indefinite useful life. At the time of the transaction, GNL had been granted a long-term exclusive right to operate in Placentia Bay and received approval for 11 site holds in the area. An awarded site hold grants an exclusive right for the holder to the farming location in question, while the application process is in progress. When the application process is finalized and approved, the site hold is converted into a fish farming license. Without the granting of a farming license, the value of the site holds is deemed to be immaterial. At the time of the transaction, three of the site holds were approved and converted to fish farming licenses, in addition one freshwater license was approved. For site holds with a fish farming license granted at the transaction date, valuation is based on expected volumes using reasonable income and cost assumptions to the amount of NOK 213.5 million value added per license. For three additional site holds, the seller has granted a warranty as to the value of the license. If a farming license is not obtained for three additional sites within 31 December 2021, the seller is obliged to compensate for loss incurred by the non-receipt of the licenses in the period 2020-2021. However, if the licenses are granted within 31 December 2024, the compensation will be based on the calculated loss in the intermediate period up until the licenses are granted. The approval of the license is valid for five years until it must be renewed, but this is merely a formality if conditions in the licenses are adhered to. The exclusivity agreement states that GNL has the exclusive right to the area Placentia Bay for a period up to 20 years. We expect to be the sole or leading operator in the area, creating high barriers of entry to other operators. EXCLUSIVITY CONTRACT GNL has received a grant to operate in the production area in Placentia Bay, and an exclusivity agreement for 12 years plus an option of eight years. This means no one else can operate in this geographical area in this period, which is similar to a non-compete advantage. The book value of the cost for the work with the documentation and meetings required in the application process to receive the exclusivity agreement is NOK 38.7 million. The book value is considered a reasonable proxy for the fair value of the exclusivity. This exclusivity will be depreciated over the duration of the agreement. GOODWILL Intangible assets that do not meet the conditions for separate recognition are subsumed into goodwill. The project GNL has been going on for some years, where the sellers have developed the area for salmon farming and started construction of a high-end RAS facility, providing a going-concern value. The exclusive rights to be the sole salmon farmer in the Placentia Bay area long-term, reduces biological risk, with long distances and low interconnectivity between sites, thus providing synergies between the various components of the facilities. The sites and production areas are minimum 100-meter-deep, have good currents and optimal oxygen levels. Goodwill also covers the licenses pending approval. At year-end 2020, eight licenses are finally approved, while three are in different stages of application. Newfoundland is also close to the US market, which may create synergies with existing operations in British Columbia. Goodwill from the acquisition is depreciated on a linear basis over 20 years from transaction date. The nature of the goodwill, in particular relating to exclusive rights and pending licenses, represent long term values. The relatively long economic lifetime of the goodwill is based on achieving an appropriate matching of the depreciation charge and the economic benefits the goodwil represents. TAX For valuation purposes and calculation of deferred tax assets and liabilities, the value of deferred tax and deferred tax assets are set to zero. The basis for this is that the expected present value of taxation on net excess values is close to zero.

From the Boardroom

114 — 115


Note 25

Assets held for sale and discontinued operations

All note disclosures in these consolidated financial statements for 2020 of Grieg Maturitas have been prepared for the Group’s continuing operations if not otherwise explicitly stated in the specific note disclosure. This Note 25 of the consolidated financial statements has been prepared for the Group's assets classified as held for sale and discontinued operations only. THE EFFECT OF NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE AND DISCONTINUED OPERATIONS: In 2020, there are two disposal groups within the Group. Both of these are within the segment Grieg Seafood and has been classified as assets held for sale and presented as discontinued operations during the year. The activity within the Grieg Seafood Group have thus been separated into our continuing operations and our discontinued operations. The two disposal groups are “Ocean Quality” and “Grieg Seafood Shetland”, of which the assets in Ocean Quality has been divested within year-end 2020, while the assets associated with the GSF Shetland disposal group are classified as assets held for sale at the balance sheet date year-end 2020. The Group’s Income Statement and have been re-presented for the comparative figures of 2019 for the effects of the disposal group's GSF Shetland and Ocean Quality. The Statement of Financial Position has not been re-presented for the comparative 31 December 2019 figures. The consolidated statement of cash flow includes both the continued and discontinued operations. When preparing the financial information of the two disposal group’s, intercompany balances and -transactions between the entities within the disposal group's, as well with other Group Companies, have been eliminated in the consolidated financial statement. On 23 May 2020, we entered into an agreement with Bremnes Fryseri to dissolve the Ocean Quality sales partnership. At the same time, we announced that we would establish a fully owned sales organization to support our growth and downstream strategy. Our new global sales organization is operational in Q1 2021, and before year-end we have completed the transaction with Bremnes Fryseri to sell our shares (60%) in Ocean Quality AS. The discontinued operations were defined as the operations related to Ocean Quality's sale of fish produced by Bremnes Fryseri, as well as the trading activity within Ocean Quality (purchase and resale of fish not produced by Grieg Seafood nor Bremnes Fryseri). As the transaction with Bremnes Fryseri for the sale of all Grieg Seafood's shares in Ocean Quality AS was completed at 31 December 2020, the financial position of Ocean Quality AS is not consolidated at year end. All activity up until the sale 31 December 2020 is, however, reflected in the net profit for the year from discontinued operations and cash flow statement of the Group. Upon deconsolidation of Ocean Quality AS at year-end 2020, again of NOK 5.0 million was recognized. The gain is also classified as part of the net profit (loss) from discontinued operations in 2020. Grieg Seafood ASA has assumed ownership of Ocean Quality USA, however, the part of the Ocean Quality USA sale attributable to fish produced by Bremnes Fryseri has been defined as discontinued operations.

GRIEG MATURITAS | ANNUAL REPORT 2020


This means that the part of Ocean Quality that related to the sale of fish farmed by Grieg Seafood has not been defined as discontinued operations, as we will continue to farm and sell our Atlantic salmon through our new sales organization

PROFIT (LOSS) FROM DISCONTINUED OPERATIONS GREIG SE AFOOD SHETL AND*

Operating income Operating expenses Operating profit - EBIT

Estimated taxation

TOTAL

2019

2020

2019

2020

2019

968 729

816 430

3 084 108

2 704 578

4 052 837

3 521 008

-1 220 800

-832 637

-3 058 240

-2 678 534

-4 279 040

-3 511 171

-252 071

-16 207

25 868

26 044

-226 203

9 837

-5 560

-7 989

10 271

9 003

4 711

1 014

-257 631

-24 196

36 139

35 047

-221 492

10 851

82 368

16 166

-8 476

-8 245

73 892

7 921

26 802

-142 568

18 772

Gain on the sale of the subsidiary after income tax Profit for the period from discontinued operations

OCE AN QUALIT Y

2020

Net financial items Profit before tax from discontinued operations

Amounts in NOK 1 000

5 033 -175 264

-8 030

32 696

CLASSES OF ASSETS AND LIABILITIES OF THE DISPOSAL GROUP

Amounts in NOK 1 000

GREIG SE AFOOD SHETL AND

OCE AN QUALIT Y

TOTAL

31.12.2020

31.12.2020

31.12.2020

Deferred tax assets

157 869

-

157 869

Other intangible assets

477 796

-

477 796

Tangible assets

501 666

-

501 666

Inventory and biological assets

474 315

-

474 315

Trade receivables and other receivables

139 516

112

139 628

855

43

898

1 752 017

155

1 752 172

78 517

-152

78 365

Current liabilities

196 396

970

197 366

Liabilities directly associated with the disposal group

274 913

818

275 731

1 477 104

-663

1 476 441

Cash and cash equivalents Assets directly related with the disposal group Non-current liabilities

Net assets directly associated with the disposal group

From the Boardroom

116 — 117


Independent Auditor’s report

GRIEG MATURITAS | ANNUAL REPORT 2020


Independent Auditor’s report

From the Boardroom

118 — 119


Independent Auditor’s report

GRIEG MATURITAS | ANNUAL REPORT 2020


From the Boardroom

120 — 121


GRIEG MATURITAS | ANNUAL REPORT 2020


Annual report Design/production Marte Leirvåg Wenche Kjølås Hilde Farsund Ulsted Sveinung Tvedt Grieg Group companies Designed by Mission

Photos Photo: Grieg Green

1, 28, 29

Photo: Pixabay / Michelleraponi

2

Photo: Bilde av Elisabeth

4

Photo: Pixabay / Matt Hardy

7

Photo: AKVA Group ASA

11

Photo: GVI / Gture

11

Photo: Grieg Foundation

15

Mission har funnet dette

17

Photo: Grieg Maritime Group / Ivymourie

20

Photo: G2Ocean

25, 26, 58

Photo: Grieg Maritime Group / Reanmer Baldoza

31

Photo: Grieg Maritime Group / Kai Xuan

37

Photo: Mosjøen Industriterminal

33

Photo: Grieg Group Resources

36

Photo: Grieg Seafood

38, 39, 40, 42, 43, 44, 45, 50, 57, 60

Photo: VIEW Ledger

55

Photo: Pixabay / Sebastian Voortman

74

Photo: Grieg Group Photo: Ingvild Festervoll Melien

117 10, 11, 12, 13, 14, 16, 21, 24, 30, 32, 34, 46, 52, 53, 56, 57, 58

From the Boardroom

122 — 123


THE OCEAN CONNECTS OUR PEOPLE OUR BUSINESSES OUR FUTURE AND OUR PAST