AUSS.OL — mttssn research

HOLD

Conviction: MEDIUM

A seafood holding company dominated by the ~52-53%-owned, fully-consolidated Lerøy Seafood (salmon/trout + whitefish + processing), plus pelagic operations. We normalise out the non-cash IAS 41 biomass fair-value swing to reach operational earnings. In the current salmon down-cycle adjusted ROIC ~5.5% sits below the 8.5% WACC (EP −NOK 1,026M) — but ~42% of group equity is Lerøy minority interest, and the rDCF/EP capitalise trough earnings. HOLD; value on mid-cycle, not the trough; base NOK 95.

Adj. ROIC

5.5%

WACC 8% → spread -3.0pp

Economic Profit

NOK -1,026M

−NOK 1,026M @ 8.5% WACC (trough; below cost of capital)

FCF Yield

11.9%

Cyclical with salmon prices + biomass build

Price / Target

NOK 93 → NOK 95

+2% base; HOLD

Revenue (LTM)

NOK 39.3B

LTM; Lerøy-dominated, pelagic complement

EBIT Margin

7.6%

Operational EBIT (biomass FV excluded)

EV / IC

0.77×

Enterprise value / invested capital

Net Debt

n/a

Licence-heavy IC; large Lerøy NCI in equity

Thesis

Austevoll is a seafood holding company whose value is dominated by Lerøy Seafood Group (LSG, ~52-53% owned and fully consolidated): salmon/trout farming, whitefish and value-added processing/distribution — LSG generated NOK 2,221M of the group's NOK 2,745M operational EBIT. Pelagic fishing/fishmeal/fish-oil (Austral in Peru, FoodCorp in Chile, the 50% equity-accounted Pelagia JV) is the cyclical complement. The defining accounting adjustment is the IAS 41 biomass fair-value swing — a large non-cash P&L item driven by salmon forward prices that the company itself excludes from operational EBIT, and so do we.

The investment reality is twofold. First, this is a salmon down-cycle: adjusted (operational) ROIC ~5.5% sits below the 8.5% WACC, so economic profit is negative (−NOK 1,026M) on a very large invested-capital base (licences alone NOK 8,992M, indefinite-lived and not amortised). At mid-cycle salmon prices these returns are materially higher — the rDCF and EP capitalise trough NOPAT and therefore understate through-cycle value. Second, the structure is complex: consolidated equity NOK 28,125M includes NOK 11,880M of non-controlling interest (~42% — the Lerøy minorities), so consolidated returns and per-share value require care (we keep NCI in IC to match consolidated NOPAT; equity-to-parent is NOK 16,245M).

Valuation · reverse-DCF & scenarios

The reverse-DCF and PEBV (~9.2) are trough-distorted — they capitalise depressed down-cycle NOPAT, so the stock screens 'expensive' on current earnings (negative EP) while the market correctly prices a salmon-price normalization (implied 5-year growth is at the −0.5 floor). Through-cycle, normalised farming margins lift ROIC well above the WACC.

Base NOK 95 (the market prices mid-cycle recovery); bull NOK 118 if salmon prices recover and Lerøy's farming margins normalise; bear NOK 72 on prolonged low salmon prices or biological/sea-lice setbacks that keep trough economics in place.

Market-implied growth

≥-50.0%

model ceiling — EV implies more than constant-ROIC sustains

No-growth value / share

NOK 58

62% of price; rest = priced-in growth

ROIC − WACC

-3.0 pp

ROIC 5.5% vs WACC 8.5% — positive = value creation

CAP (priced-in)

n/a

years of excess returns the price implies (fades to WACC)

At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~-50.0%, limited by ROIC 6% ≈ WACC 8%) it cannot reach the current EV. No-growth value is NOK 58/share (62% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.

Scenario	24m target	Impl. g	Upside	Prob.	Driver
Bull	NOK 118	≥-50%	+27%	30%	Salmon prices recover; Lerøy margins normalise
Base	NOK 95	≥-50%	+2%	40%	Market prices mid-cycle salmon normalization
Bear	NOK 72	≥-50%	-23%	30%	Prolonged low salmon prices or biological setbacks
Prob-weighted	NOK 95	—	+2%	100%	Scenario-weighted expected value

Sensitivity — fair value / share at WACC × growth

WACC \ g	0%	3%	5%	8%	10%	15%
7.00%	85	79	73	64	56	30
7.75%	69	61	55	43	33	3
8.50% (base)	58	48	41	27	17	-17
9.25%	49	38	30	15	4	-31
10.00%	41	30	22	6	-6	-43

Green = fair value above the current price of NOK 93.00. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.

Method & data. NOPAT NOK 1,922, invested capital and ROIC 5.5% are observed (adjustments.json); WACC 8.5% and terminal g 2.5% are assumptions. EV→equity uses net debt NOK 7,873. The model holds ROIC constant (no fade) over the explicit horizon; the CAP figure instead fades excess returns to WACC.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

Key drivers

1. Salmon-price cycle

The dominant driver — mid-cycle normalization lifts Lerøy farming margins and ROIC well above the WACC.

2. Lerøy quality asset

Vertically-integrated salmon/whitefish leader; licence concessions are a regulatory moat.

3. Pelagic + JV optionality

Austral/FoodCorp + the Pelagia JV add diversified (if cyclical) earnings.

4. Long-term family ownership

Møgster-family stewardship and a sound, licence-heavy balance sheet.

Key risks

Salmon-price down-cycleTrough ROIC ~5.5% < 8.5% WACC; EP negative until prices normalise.
Biological riskSea-lice, disease and mortality events compress farming volumes and margins.
NCI complexity~42% of consolidated equity/earnings is Lerøy minority interest — per-share value needs care.
Commodity price-takingSalmon is a global commodity; Austevoll has little pricing power.

Conclusion

Austevoll is a quality-asset seafood holding (Lerøy + pelagic) caught in a salmon down-cycle where trough ROIC (~5.5%) sits below the WACC and economic profit is negative — but the rDCF/EP capitalise trough earnings and a large NCI complicates per-share value. HOLD; value on mid-cycle, not the trough; base NOK 95.

Accumulate into salmon-price weakness for through-cycle holders; conviction is tempered by the commodity cyclicality and the holding/NCI structure.

Footnote evidence & sources

Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open

Adjustment / figure	Value	Source	Why mttssn treats it this way
Revenue (LTM Q1 2026)	39,328	Income statement 📄 p.18	Operating revenue & other income: FY2025 column 39,320 − Q1 2025 9,793 + Q1 2026 9,801 = 39,328. Annual-report income statement (p.103) shows Revenue 39,306 on a slightly different line definition; difference is rounding/other-income classification, immaterial.
Operational EBIT (LTM, before biomass FV)	2,669	Note 28 — Alternative performance measures 📄 p.170	Company APM 'EBIT before fair value adj. biomass': FY2025 = Operating profit 1,488 + reverse FV biomass 1,207 = 2,695 (Note 28 bridge). LTM built per-quarter as reported EBIT − biomass FV: FY 2,696 − Q1'25 1,374 + Q1'26 1,347 = 2,669. This is our adjusted EBIT, adopted verbatim from the company's operational-EBIT APM.
Reported IFRS EBIT (FY2025)	1,489	Income statement (line 'EBIT') 📄 p.103	Annual-report consolidated income statement: EBIT (after fair value adjustment biomass) = 1,488 (Q1 report FY column rounds to 1,489). LTM reported EBIT = 2,998.
Fair value adjustment biomass (FY2025)	-1,207	Income statement / Note 7 / Note 28 📄 p.103	IAS 41 'Fair value adjustment biomass' = -1,207 in FY2025 (vs +337 in 2024), the non-cash P&L swing normalized out. LTM net = +329 (FY -1,207 − Q1'25 -1,838 + Q1'26 -302).
Licences (aquaculture/whitefish/pelagic)	8,992	Statement of financial position / Note 10 📄 p.105	Licences 8,992 (mostly indefinite-lived farming/fishing rights). With Goodwill 2,334 + Brands 50, total intangibles = 11,376 (Q1 report shows 11,559 @31.12.2025 / 11,421 @31.03.2026 incl. minor reclassifications). Not amortised — no PPA add-back.
Non-controlling interests (equity)	11,880	Statement of financial position — equity 📄 p.20	NCI in equity @31.03.2026 = 11,880 (FY2025 @31.12 = 11,848/11,855). ~42% of total equity 28,125 — chiefly the ~47-48% minority in Leroy. Kept in IC; equity_to_parent = 16,245 for PEBV.
Interest-bearing debt @31.03.2026	13,236	Statement of financial position + Note 7 NIBD 📄 p.20	Borrowings 6,846(LT)+2,797(ST) + overdrafts 2,434 + other IB 8 + lease-to-credit-institutions 835+316 = 13,236. Matches the gross side of the company NIBD bridge (Note 7); 'other' leases 1,872 excluded from IC.
Cash & cash equivalents @31.03.2026	5,363	Statement of financial position 📄 p.20	Cash 5,363. operational_cash = 2%×revenue = 787; excess_cash 4,576 removed from IC. Company NIBD @31.03.2026 = 13,236 gross − 5,363 = 7,873.
Total equity @31.03.2026	28,125	Statement of financial position — equity 📄 p.20	Total equity 28,125 (incl NCI 11,880). Accumulated OCI = translation reserve 2,043 + cash-flow-hedge 74 = 2,117 (FY2025 changes-in-equity, p.106); equity_ex_oci = 26,008.
Tax (LTM) / normalized rate	-748	Note 26 — Tax 📄 p.166	LTM tax = FY -163 − Q1'25 +415 + Q1'26 -170 = -748 on PBT 2,275. Reported FY2025 weighted-average effective rate 19.2% is distorted by deferred resource-rent-tax movements and tax-free share gains; Norwegian salmon faces 47% blended (22% ordinary + 25% RRT), rest ~22%. We apply a normalized 28% blended cash-tax rate for NOPAT.

Analysis history

How the mttssn view has evolved — each prior dated note is preserved.

2026-06-08 · HOLD/MEDIUM · Streamlined — this version
2026-05-31 · Sell/low

Quality · Buffett tenets8 / 15

Understandable business●●○

Seafood holding company — dominated by the ~52-53%-owned, fully-consolidated Lerøy (salmon/whitefish/processing) plus pelagic (Austral/FoodCorp + the Pelagia JV); the holding/NCI structure adds complexity.

Durable moat●●○

Moderate: Norwegian aquaculture licences are a genuine regulatory moat (limited concessions), and Lerøy is a quality vertically-integrated asset — but salmon is a price-taking commodity.

Able & honest management●●○

Møgster-family long-term owners; the company itself excludes the non-cash biomass fair-value swing from its 'operational EBIT', consistent with our normalization.

Financial strength●○○

Trough ROIC ~5.5% sits BELOW the 8.5% WACC (EP −NOK 1,026M) in a salmon down-cycle; the large indefinite-lived licence asset base and balance sheet are sound, but returns are cyclically depressed.

Margin of safety●○○

On trough earnings the stock looks expensive (PEBV ~9.2, negative EP); the case rests on salmon-price normalization, not current returns — no margin of safety on trough numbers.