Norwegian Aquaculture Suppliers

The final 2023 edition is now out. We put together some key highlights pulled from the report, listed below:

• In 2022, the Norwegian aquaculture supplier industry saw sales grow, reaching 75,7 billion NOK among the 189 companies covered in this report, marking an increase of around 11,0 billion NOK (16,9%) compared to 2021. However, despite this sales growth, margins took a hit. The weighted average EBITDA margin dropped to 6,8% in 2022 from 8,7% the previous year. Similarly, the sample achieved a weighted average EBIT margin of 4,4% down from 5,8% the year before.

• Over the span of 2018 to 2022, the sample maintained a weighted average EBIT margin of 5,86%. Likewise, the weighted average EBIT margin for the sample in the last five years was 5,94%. The industry-wide profitability in 2022 witnessed a decline compared to the previous four years, primarily due to the aftermath of the pandemic and the introduction of a new ground rent tax on salmon farming, both of which adversely affected the sector. Additionally, raw materials within the industry experienced significant inflation during this period, further impacting overall profitability.

• In 2022, the sample’s average return on total capital dropped to 7,4%, down from 8,6% in the preceding year, continuing the downward trend since 2019 (12,1%). Similarly, the return on equity decreased from 19% in 2021 to 15,9% in 2022, falling from its peak of 24,9% in 2019.

• Significant variations are evident among different segments within the industry. Sales growth ranged from a decrease of -11,2% in the “Certification” segment to a remarkable 35% surge in “Broodstock, breeding and genetics” segment. Despite being the largest segment in terms of sales, with a turnover of 37,8 billion NOK in 2022 (a 30,2% increase from 2021), the “Feed producers” segment did not reflect this growth in profitability. The EBIT margin for this segment plummeted to just 1,0% in 2022, down from 2,0% in 2021.

• Conversely, the “Well boat operators” segment boasted the highest EBIT margin, achieving 27% in 2022, although this was a decrease from the 33% recorded the preceding year. Meanwhile, the “Broodstock, breeding and genetics” segment exhibited consistent improvements since its low point in 2020 (2%), showcasing a weighted average EBIT margin rise from 14% in 2021 to 21% in 2022.

• The Norwegian aquaculture supplier industry exhibits greater fragmentation compared to the salmon farming industry. However, an ongoing trend towards consolidation persists driven by efforts from both suppliers and salmon farming companies. There have been several examples of this over the past years.

• In 2022, farming companies outperformed suppliers in terms of margins. The 2023 report on Salmon Farming Industry in Norway revealed that Norwegian salmonid farmers achieved a notably higher EBIT margin of 28,5% in 2022, surpassing the 20,8% recorded the previous year. This margin remained notably superior to the weighted average supplier margin of 4,4%.