14/12/2021 by Knut Henrik Rolland
Norwegian Aquaculture Suppliers 2021 Report
What were the noteworthy changes for Norwegian suppliers to the aquaculture industry in 2020? The key highlights from the newly released report Norwegian Aquaculture Suppliers 2021 is now available.
The yearly report Norwegian Aquaculture Suppliers is now available for purchase! The report is based on the financial statements of the Norwegian suppliers to the aquaculture industry. The report highlights trends in the supplier markets through analyses of key financial metrics to understand the position and financial development of the players within different segments, inter alia, broodstock breeding and genetics, shipyards, feed producers, fish health services and packaging.
Six Key Highlights
1. The Norwegian aquaculture supplier industry achieved strong sales growth in 2020, albeit margins decreased compared to the preceding year. The 196 companies covered in this report, recorded sales of 57,7 billion NOK in 2020, increasing by approximately 4,9 billion (9,2%) compared to 2019. Weighted average EBITDA margin was 9,2% in 2020, decreasing from 10,4% the preceding year. The sample achieved a weighted average EBIT margin of 6,1%, which is down from 7,2% the year before. The EBT margin in 2020 amounted to 6,2%, which was a decrease from 7,6% in 2019.
2. Long-term (2016-2020), the sample achieved a weighted average EBIT margin 6,8%, implying that the 2020 margin of 6,1% was below average. Weighted average EBT margin for the sample in the last five years was also 6,8%. For the industry as a whole, profitability in 2020 was lower than the preceding four years, with the pandemic having a negative affect.
3. As for return on total capital, the sample averaged 10,5% in 2020, decreasing from 12,0% the preceding year. Return on equity also decreased last year, from 25,1% in 2019 to 19,8% in 2020.
4. There was however huge variation within the different segments in 2020, with sales growth ranging from -5% in Shipyards to 35% in Sea lice treatment systems. Feed producers is by far the largest segment in terms of sales, with turnover of 26,1 billion NOK in 2020, increasing by 14% from 2019. Feed producers are experiencing tough competition, with EBIT margin at just 1,9% in 2020, down from 3,3% in 2019. Well boat operators is the segment enjoying the best EBIT margin, achieving 35,6% in 2020, increasing from 34,5% the preceding year. Broodstock, breeding and genetics experienced a tough year, with weighted average EBIT margin dropping from 18,9% to 2,1%. Land based and closed-containment technology suppliers was the only segment with a negative EBIT margin in 2020, coming in at -9,9%, weakening from -0,6% in 2019.
5. The Norwegian aquaculture supplier industry is more fragmented than the salmon farming industry, although there is clearly a trend towards consolidation - initiated by both suppliers and salmon farming companies. There are examples of this over the last years, with Åkerblå acquiring Marin Helse, Sølvtrans merging with DESS Aquaculture Shipping, Norsk Fisketransport and Frøy Rederi merging to Frøy Shipping, Krüger Kaldnes (now Pure Salmon Kaldnes) acquired by 8F Management and Hordafor acquired by Pelagia.
6. In 2020, the farming companies enjoyed superior margins to the suppliers. Even though The Salmon Farming Industry in Norway 2021 (publication from Kontali Analyse) revealed that Norwegian salmon and trout farmers achieved a lower EBIT margin of 17,7% in 2020, it was still considerably better than the weighted average supplier margin of 6,1%. Indeed, the salmon farmers were beaten only by Well boat operators (35,6%) and Medications, vaccinations and chemicals (23,7%) among suppliers.
Image: Shutterstock by Marius Dobilas