Grieg Seafood ASA (GSF) Earnings Call Transcript & Summary

Yes. Good morning, and welcome to Grieg Seafood's Capital Market Day here at this magic place, Flor & Fjære, which those of you that's here will see more of today. My name is Andreas Kvame, and I am the CEO of Grieg Seafood. Today's event is the third of -- in 4 years, where we invite investors, analysts, media and other stakeholders to give an in-depth review on our operation and a presentation of our ambition, our strategy and priorities going forward. Our overall vision remains the same. We are farming the ocean for a better future. In 2021, Grieg Seafood harvested 75,000 tonnes Atlantic salmon, and our target for this year is to harvest 90,000 tonnes. For the coming 4 or 5 years period, we have ambition to increase our harvest to some 120,000 to 135,000 tonnes. During today's session, we will provide you with insight in how we intend to grow our operation in a responsible way while creating value for stakeholders through expansion of our operation and increased operational integration across segments and regions. The agenda for today include a broad range, and hopefully interesting, topics presented by excellent employees. The program will kick off with an update on our strategy and priorities, followed by a presentation from our new in-house sales organization -- sales and market organization, and update our precision farming, Grieg Seafood's take when it comes to salmon farming operation. Follow after that will be a brief coffee break. Each farming region will give an update on activities and operational performance and provide some insight and priorities and ambition going forward. After lunch, our CEO, Atle Harald Sandtorv, will give an update on financials, including information about how our capital expenditure and funding related to our expansion. Finally, Kristina and Ragna Heggebø will give us a taste of some of our global initiatives within sustainability and R&D. After all presentations are done, there will be a 20 minutes session for questions. However, there will be additional opportunities for those that's here in one-to-one session with the local regions and also support the organization. Our overall strategy remains under priorities communicated at our Capital Market Day back in November 2020 are the same. We will grow our business in a sustainable and responsible way. We maintain a relentless focus on cost improvement, and we aim to reposition the company in the value chain. The last time we gave an update on our operation was in November 2020, and before looking ahead, I will take a step back and review what we said back then and how we have delivered on our priorities and promises. We said that we should improve profitability. What we have done is that we have reduced costs and improved biology and fish health in the whole organization. We said we should streamline and execute growth. Well, we have exited Shetland, and we now focus on farming in Norway and Canada. We also said that we should secure a financial capacity. We have sold assets like Shetland. We have issued a green bond, and we have refinanced our credit facilities. I will come back to this. Sustainability is core. We have continuous focus on sustainability. We are acknowledged by the FAIRR protein producer index, a second place, we are awarded. We are also awarded a place in the A-list of the CDP. We should create shareholder value, which we have done. The total shareholder return from November 2020 is approximately 75%. And we have turned the trend. That's proven by the development in the recent quarters. As you can see here on the graph, growth is picking up, cost has come down and earnings is strengthened significantly. The latter, of course, supported by high prices but also due to positive development in underlying operation. And we have created value for our shareholder, with a total shareholder return on 75% since November 2020, outperforming both the sector and the overall market. Alongside delivering on operational priorities from 2020, the company has been through a major restructuring, rigging the organization for increased value creation and responsible growth. Selling Shetland and buying Newfoundland is a part of our overall plan to concentrate farming operation to the 2 regions where we see the largest potential for profitable and sustainable growth, namely Canada and Norway. In parallel, we have established a new in-house sales and market organization with ambition to strengthen internal integration on our activities, reposition Grieg Seafood market approach from being a pure raw material supplier to a collaborative partner to clients, all initiatives to increase value on the group level. Following the extensive restructuring of Grieg Seafood, Grieg Seafood now has a strong footprint in 2 farming regions, each with proximity to major market, namely Europe and North America. We have sales offices in Norway and Vancouver, main sales offices. We have a sales office also in U.K. and in U.S., and the head office for the company maintained in Bergen. This is run by dedicated and competent employees. Some of them you will hear from the stage today, and others, you will meet during breaks and the mingling and question session afterwards. And tomorrow, for those that is going to participate in the tour in the fjords. I will start with sustainability. As already mentioned, sustainability is core to our operation. It is our license to operate, but it is also an important value creation opportunity. Sustainability is a prerequisite to salmon farming. Sustainability drivers are also a key success factor for farming operation, so that goes hand in hand, including achieving our growth and our cost ambitions. As such, meeting sustainability requirement is core to fulfilling our ambitions of responsible value creation, growth and reaching our long-term targets. Providing the world with sustainable produced food is also a major business opportunity for Grieg Seafood. Demand for healthy seafood is continuously increasing and with limited potential for growth within wild-catch aquaculture is an important part of the solution to meet the increased demand. In addition, this is an important part of the solution when it comes to sustainable production of food. Compared to other protein sources, salmon farming is very favorable both when it comes to feed conversation, yield and carbon footprint. But there's also challenges. Farms certainly has the potential to be a part of the future sustainable food system. However, there is many challenges that we, as an industry, not solve. Going forward, we must work hard to reduce our impact on the environment, particularly our co-existence with wild salmon and other species. Secondly, we are not satisfied with the status quo. Improving survival, fish health and welfare is on top of our agenda every day. We are conscious of the environmental and social risk related to feed ingredients, and we are committed to responsible sourcing. More must be done to reduce the impact from feed during the next decade. We also must do our part to achieve the Paris Agreement and mitigate climate changes. We must work towards developing circular economy and recycle more resources throughout production and our value chain. And we must work with our global supply chain to ensure that we mitigate negative impact on human rights. How do we work? Grieg Seafood work systematically to address these challenges, with the aim to reduce risk and position the company for capitalizing our future opportunities. Our approach to sustainability is based on 5 pillars that you can see here on the screen. Profit and innovation, healthy ocean, sustainable food, people and, of course, local communities. With that foundation, sustainability in place, how do we arrange our operation? In the following, I will provide input on the strategy and priorities for our continued development of our business. As mentioned, our overall strategy remains. We will grow our business in a responsible way, and we are working towards an ambition to reach an annual harvest of 120,000 to 135,000 tonnes by 2026. We will maintain our relentless focus on a brief operational efficiency, and our ambition is to be cost leaders in all the regions where we operate. And finally, we are striving to reposition Grieg Seafood in the value chain, developing from a supplier of raw material, becoming a strategic partner for selected customers. All, of course, based on the foundation of sustainability. So first, responsible growth. Growth will come from 3 areas, main areas: Improve utilization of current capacity, expansion opportunity and new concepts. To optimize utilization of existing capacity, that include improving the biosecurity, fish welfare and survival. Improve flexibility by adding new locations, digital precision farming capabilities and utilizing available MAB. Looking into expansion opportunities, our take is we should work more on the post-smolt, moving growth to land, new license opportunity in all regions, the Newfoundland expansion. And we will, of course, always consider M&A when arise. And new concept, we'll come back to that later in the presentation. Then let's talk about Newfoundland. It's an exciting area for fish farming. It's not many places in the world you can get fine virgin area, which you can start from greenfield. But the most exciting growth opportunity in the company is our new operation in Newfoundland. This is a greenfield project with exclusivity for salmon farming in the Placentia Bay Area in Atlantic Canada. The area has a favorable biological condition for salmon farming. Comparable, actually, to the condition we see in Finnmark, region in Northern Norway, an area that we have been present and operate for many, many years. We have a modern facility and equipment well suited for the area. Our freshwater operation in Newfoundland is performing well, and we have released the first fish to sea in May 2022. We are also awarded the right to develop the Bay West area with significant long-term growth potential at the best of Placentia Bay, but focus is first, Placentia Bay. We will come more back to that later today. Operation in Newfoundland will be an important part of what we regard as a very interesting opportunity for salmon farming in Canada. Canada has proximity to the U.S., one of the world's largest and fastest-growing market. Currently, only 1/3 or closer to 25% of demand is covered by fish produced in North America. Fish farming operation in BC and Newfoundland, Grieg Seafood can provide locally-sourced food to both U.S. East and West Coast markets. Canadian authorities has a strong focus on sustainability, both environmentally and socially, which provides opportunities for us. This includes implementation of the United Nation's declaration of the rights of indigenous people in Canadian society and law. Grieg Seafood strongly support this, and we strive to deliver on the Truth and Reconciliation Commission call for action for businesses, where the most important criteria is to obtain consent when we operate indigenous territory. In BC, our main farming areas are covered by agreement with 3 first nations. We deeply value this relationship, and it is an honor for us to learn from their traditional knowledge and experience. We also support the Canadian government's initiative to make a plan by 2025 to transition the salmon farming industry in BC away from traditional open [indiscernible] practices. We have started the transition -- this transition through our post-smolt strategy and by implementing barriers around our farms. Rocky, we'll come more back to that later today. All in all, we regard the regulatory development in Canada is good for sustainable salmon farming, and therefore, represent a good business opportunity in a market with increasing focus on sustainable food. Third, it's the new concepts. Offshore farming and closed containment are 2 of several initiatives, and Grieg Seafood is involved in both. Blue Farm is our offshore project in collaboration with a broad range of industry partners. FishGLOBE is a closed containment system, both for post-smolt production and grow-out production. My colleague, Nina, will provide more insight on this later today. The second pillar in our strategy is cost improvement. Cost reduction and improved operational efficiency has continuous focus in all parts of our organization, but I want to highlight 4 areas of priority. One is the post-smolt, second one, preventive farming practices, digitalization and integrated operations. One of our most important and cost effective initiative is a post-smolt strategy. By using larger smolt, we transfer more of those fish to the sea. By reducing the time spent in the sea, we reduce our biological risk, and we increase capacity by moving growth to land. It is also core to fulfill sustainability requirement and ambitions. We have planned capacity expansion in all region, and ongoing projects proved very good results will also be underlined later on. We have faced a broad range of risk factor impacting our operation. The various regions face different biological challenges. Historically, BC has been struggling with harmful plankton and low oxygen level. The Norwegian operation are challenged by sea lice and diseases. Implementing initiatives to mitigate these risk factors are important to achieve operational excellence. I can mention some examples of action taken, which include algae detection and mitigation system, barriers between the salmon farm and the environment, new locations, cleaner fish, ISA vaccine, optimizing when you put the smolt to sea, adjustment of sites to optimize environmental condition and more. Precision farming, a third area of priority for Grieg Seafood to optimize operational performance is digitalization. In short, this includes combining years of experience and new technology. This means combining utilization of sensor, big data, artificial intelligence and automation to traditional experience-based decision-making, moving towards a more data-driven decision support. Possible application area include to predict event, enabling preventive measures, optimize time for transferring smolt to sea, analysis of winter ulcers impacting our -- of measures. That you will hear more about later today. Feed types and appetite, lice treatment and evaluation around that, et cetera. Then when it comes to value chain reposition, the third strategic area for our business development is value chain reposition, and it is related to our market approach. The major focus is -- are related to value -- our sales organization, the value adding processing and the brand development. As mentioned earlier, Grieg Seafood has developed a new fully-integrated in-house sales and market organization aiming to move the company from being a raw material supplier to becoming a strategic partner to selected customers, reposition the company position in the market and taking a more active role further down the value chain. While we, up to now, have sold a product through a separate trading unit, we aim to increase integration between sales and farming to optimize distribution of products. In other words, we aim to maximize value creation on a group level rather than each unit maximizing profit individually. By increasing value-adding processing capacity, either in-house or through partnership, we'll increase our flexibility and utilization of input in addition to maximizing utilization of second-grade product. Entering long-term partnership also contribute to higher predictability and stability in company revenue and earnings. This concludes my presentation of the overall strategy review for Grieg Seafood. I will now leave to my excellent colleagues to provide additional details on how these strategic priorities are implemented and how they are executed in the various parts of the organization. The first one out is our Chief Commercial Officer, who will give you an in-depth presentation of the changes made and the way forward for our sales and market activity. Erik, the floor is yours.

Thank you. I'm very happy to be here today and present to you an update on the commercial strategy of Grieg Seafood. Our sales department in Norway, which now consists of more than 30 employees, was formed, trained and went operational during the strictest regime of the pandemic, hardly an ideal time to start the sales organization. We were not able to travel, we were not able to meet. But as a result of hard work, late nights and very motivated employees in Norway and Canada, we were able to build a solid organization that have delivered strong results. And I would like to take the opportunity to thank all the employees in Norway and Canada for their strong effort in this challenging period. We are now continuing to build both organizations with training, implementing systems and routines in order to execute the group 2026 strategy. On the value chain repositioning, we are mainly focusing on 3 main pillars, as Andreas has just presented. Integrated sales organization, their value-added processing and brand development. During the stages of recruiting employees, we had a high focus on bringing experience and knowledge that is required to establish and run a successfully integrated sales organization in order to capitalize on the opportunities that lies within the value chain and the market. We have implemented the Maritech's cloud-based DigitalSeafood system also that allows for standardized sales procedures, more accurate data and reporting, which is also very important. And as of the second quarter this year, we are on the same platform, both in -- platform and systems in both Norway and Canada. And Grieg Seafood is big enough to have an impact, but we also have a size that allows us to be agile and to take opportunities for the best of the group in order to maximize EBIT. Through high focus, we have a lot of experience both in farming and in sales despite being new, and we have short lines of communication. And this is the essence of our sales organization, not to run through traditional margin focus, but the maximized EBIT for the group, simply put, to achieve the highest price for every kilo of salmon sold from Grieg Seafood. We use margin, of course, as a benchmark for price achievement and cost, but not to drive strategic decisions. We have developed a strategy on value-added products. However, which has been informed in several quarterly presentations, it's difficult at the moment with the extraordinarily high prices. But this does not change our stance and our belief in the importance of value adding as a strategic pillar. Our focus at this point is to sell products through partnerships in Europe, U.S. and Canada, and this is an ongoing process on which we are on track towards our goals of 2026. We will also focus a lot on furthering develop our B2B brand strategy, which today consists of Skuna Bay in British Columbia. The strategy has just started, and we will see implementation being done over the following quarters. And we aim to differentiate our products together with our strategic customers and our B2B brand strategy will be an important part of this, both in Norway and Canada. And these 3 pillars will in turn lead to increased price achievement, but more importantly, to increase the performance between farming and sales, which in turn will lead to higher EBIT. Touching on the integrated sales organization. Close cooperation between farming and sales is a necessity to match the harvesting profile with the optimal market conditions. And we've seen in the last quarters, I would say, last year, how quickly the dynamics of the market changed, and our lean organization and short lines of communication tries for efficient decision-making. And I believe this is also a key success factor in being able to achieve the best possible results. And the graph shows a great improvement in increasing the price achievement. And what we have highlighted it here by 2 dimension, quality costs and harvesting profile. The harvesting profile is dependent on having good quality from farming and good average sizes, and we have had that. Then it's up to the sales department job to match that with the optimal timing to achieve the best price. We've seen a good development on that. On quality cost, there's also a positive development, partly through value adding more products, partly through increasing prices for spot also for the downgraded products, but also a very high focusing in sales on achieving the best price also for downgraded products. More value-added products from salmon is important strategy for Grieg business as a whole, and I will touch on some of the objectives to increase but also stabilize the price performance. Value added products is more stable than the fluctuating spot market, both through the pricing mechanisms and there's more contract base, so you will stabilize the price performance. Closer to the final customer is important when you value add products to get direct feedback from the market, but also it's a great opportunity for Grieg Seafood to showcase our products, our organization to the market. Risk management. We have seen when we have challenges with downgrades, being able to value add is a very important part because take an example with the winter [indiscernible], it's quite easy to upgrade it to a premium product. But also in period when you have excess supply to the market, where you have a volatile market, you also have pre-sold the fish with value-added products. So you know the price and that's also price establisher particularly in falling markets, but also volatile market in general. When it comes to sustainability, we need to transport less raw material, more fine products in order to reduce the carbon emissions, both from transport of trucks but also through air. There's limited growth in aquaculture and also wild-catch, and this will lead to periods forward with higher prices. And then we need to transport more net products not only from a sustainability perspective, but also from a cost perspective. And we aim to do between 20% and 30% of value-added products in Norway and Canada. And this will be done through a strategic partner in Norway, Europe and U.S. and not at this point through our internal factories. And the process with mapping strategic partners is ongoing, and we have positive experiences so far, and we are optimistic on the next steps. Coming to the market positioning strategy. Grieg Seafood is an old company with a rich history. But as an integrated company, sales company, selling the Grieg Seafood name, values and brand, it's actually less than 2 years old in its current form. We have started a project together with external consulting where we will develop the Grieg Seafood B2B strategy with selected customers and partners. We have been able to travel. We just came back from our Barcelona Seafood Exhibition. We've been to [indiscernible]. We've been traveling to a lot of customers, and the feedback we get back is very positive. For me, that's very encouraging and give me great enthusiasm for the work ahead. We've also developed our own DNA in sales in Grieg, where we have the customer firmly in the center. We want to be a customer-driven sales organization. And this will be the core not only for the B2B brand process, but also for the general communication with customers and market going forward. The Skuna Bay is an active brand as of today. We want to cultivate this and develop it further, and we see great potential in the American market to do more with Skuna Bay. And then we will -- as mentioned, we will develop also B2B brands from other regions. And we see a clear potential to differentiate our products and our organization together with strategic retail and food service customers, and we look forward to work with our market positioning strategy. And I would also like to point out that the current market where we see limited supply from all major production regions open up some new and exciting opportunities for Grieg Seafood. As mentioned, we are a new company in its form to the market. And when you have a situation with less supply, most of the customers want to differentiate themselves. And here, I believe we have a lot to offer. And we have, as mentioned, received very good feedback on this point. A little bit on the roadmap and the key milestones for 2022 and 2023 to 2026. We have established process partner in Norway and in Europe, and this process is ongoing and something that we will continue to work on in the coming years. And we have started to sell value-added products both from Norway and from Europe and the U.S. to selected customers and selected markets. As mentioned before, we are taking a cautious approach. We are still a very new organization and we were just able to travel, but we are on track. And this year, it will account to roughly between 5% and 10% of our harvested volume. And we want to capitalize on the Skuna Bay potential, and this is also ongoing. As well as this year to start to develop together with our B2B strategy, B2B brands in Norway to start that process. And the key milestones between 2023 and 2026 is to increase the share of value-added products sold between 20% and 30%. I think this is highly achievable. To have more direct relationships with retailers and selected food service customers. Again, we started to travel now. There are people traveling this week, and we get feedback. There's a lot of interest and it is an exciting market, though it's challenging, but there are many opportunities, and we have to be selective who to work with us, and it's particularly to have a strategic fit with Grieg Seafood's DNA and our strategy towards 2026. Launch of the B2B strategy on Norwegian and Canadian salmon. And the last point is launch of innovation project for increasing value-added performance but performance in general. There is a lot of interesting initiatives happening in Grieg Seafood in the business in general, whether that being super cooling, new packaging, new technologies, new ways of distribution. We want to be an innovation partner with customers, and this is something that I also really look forward working with. And so to sum it up, I'm very optimistic on the outlook, and I think we have in place a very solid organization and we have a lot of interesting projects, so I'm ready to go and so is the organization. So with that, I would also like to introduce the next speaker, which is the Chief Digital Officer, Trond Kathenes. Thank you.

Hello, everyone. I'm Trond Kathenes, I'm the proud leader of our IT and digital team, consisting of highly professional and motivated people and professionals. I will give you a glance on the status where we are within our digital journey. Our digital strategy, Grieg Seafood Precision Farming aims to facilitate the introduction of data-driven insight to experience-based salmon farming. And by combining the 2 dimensions, we have already realized the potential for further growth and sustainable operations moving forward. During the capital market update in 2018, we promoted our ambitions on utilizing smart sensors, automation, data insights and AI for data-driven decision support to our operations. As of today, we can tick off all these boxes as part of our digital foundation. This, realizing that digital transition is a journey with many destinations and with a not yet defined ending point. Our digital strategy is founded on our business strategy, supporting the whole value chain. Meaning that any capability we build is motivated and addressed in close dialogue with business owners as well as defined process owners. The strategy defined 6 focus area shown on the top of this slide behind me, so focus on the top, all relevant for a wide range of our domains and processes. Automation and optimization, to optimize our production support processes by emphasizing on automatic data acquisition, data flow and system integration both within the IT and OT dimensions. Analysis and decision support. By advanced data analysis, identify potential areas for process improvements. At the same time, develop prediction models and simulation tool to facilitate insight-based decisions on strategic, tactical and operational levels. As a partner of digital transformation, by close cooperation with the operation, R&D and HR taking identified potential improvements out in the organization, supporting the change management process in user reduction, enabling increased efficiency and value creation. Integrated control system, building integrated control system and a group standard integrated application portfolio, supporting the whole value chain. Sales and production support, facilitating tools for planning and cooperation between production and sales as well as external communication for sales and logistics. Sustainability and traceability. Focus on standardized data acquisition and analysis supporting the continuously work on improved sustainability. At the same time, facilitate nontangible data storage, for instance, blockchain technology for trustworthy documentation to future external data consumers. Since years, we have built our digital foundation, enabling us to acquire, analyze and visualize insight and knowledge to all levels in the organization. All the building blocks in the digital foundation must be in place and interconnected to facilitate data-driven efficiency and value creation. In the early stage, our efforts, infrastructure resource time gave limited effects, but as now we are realizing true value from our efforts. Going forward, we expect further increased value from our digital journey, implementing successful experiences from our different regional projects into the whole organization. Since we started, our colleagues have shown impressive motivation and growing digital maturity in adopting our digital programs. However, aware of the constant risk of change fatigue, we will continue keeping our colleagues included, informed and prepared for change when introduced. In basic, it is actually not necessarily so much what do you change, but more in how and when. Technology is actually, together with data, changing the way we operate. The large amount of historical data, combined with our ongoing collection of real-time data gives us the foundation of understanding the findings as well as accelerating our work with building models for data-driven decision support. Up to 2018, the industry was still manually oriented in the data collection and decision-making and still heavily dependent on the experience-based knowledge. The manually collected data had often poor quality, but the large quantum made us able to process them, identify trends and markers in the data set and to build our initial algorithms [ and analytics models ]. Reaching 2020, we have started a job of consolidating our processes and solutions, focusing to standardize and automate our data acquisitions. By getting higher data quality and utilize our methodology for analytic projects, we spend less time on data cleaning and more time to analyze the data. More efficient methods of data handling gives a higher throughput on building new common BI reports and dashboards to be implemented and adopted in the whole organization. Standardization and centralized master data management enable us to internal benchmarking between different domains in our areas and regions, increasing knowledge transfer across the organization. By hiring internal data scientists' capabilities, we have strengthened our ability to perform advanced data analysis as well as build prediction models and simulation tools. As of today, we have done numerous analysis covering elements in the whole lifecycle of the fish from egg to harvest. And moving forward, we will continue to work with the business on our analytic projects, implementing new technology for data acquisition and data processing, supporting the whole organization reaching their goals. Aligned with our strategy of pairing experience-based knowledge with data-driven insights, we have built our integrated operation center in Rogaland as well as a replica in Shetland, which unfortunately then from a technical perspective, it's not longer with us. Plans for implementing identical setup for Newfoundland and Finnmark are in the making. The basic cycle of decision-making is still valid as we observe, we interpret, we decide, and we take actions and we evaluate and then restart the cycle. By introducing smart sensors, prediction models, decision support and AI-supported actions, we are shortening the time of the decision cycle by identifying potential actions required much earlier. As we have centralized critical farming operations, we also benefit from co-location with domain experts within biology, technical infrastructure, fish health and others. This enables the experts to advise and guide in the decision process assessing the situation in real time. The concept of integrated operation center is still in an early stage, gradually building new capabilities for monitoring and control of our farming operations, the operational infrastructure and health and safety for our personnel at the sites. You are all then invited to our center at [ Uleberg ] tomorrow for further introductions on the picture that you see. And then also some examples from the numerous analysis we have done. By processing a large amount of internal and external data and scientific articles, all in search for insight that can bring new knowledge or confirm previous hypothesis to the operation. All projects are anchored in use cases defined by our domain experts. I will address one of the 2 examples on the slide, the rapid smolt growth. Both Berit and [indiscernible] will reflect on the winter ulcer later today. So the use case rapid smolt is an analyze we did in Rogaland and Finnmark. The hypothesis is that rapid growing smolt performed less than slow growing smolt and smolt should have a period of lower growth in freshwater to perform well in the sea. Findings and deliverables. Analysis of data from 386 harvested cages between prior to 2015 to December 2020 with data sets covering internal sensors, fish density and weight, vaccines, feed and feeding profiles, treatments, data from [indiscernible], et cetera, et cetera. And the finding tells that we cannot argue. The data cannot argue a strong correlation between temperature in freshwater and growth in sea. But it strongly argue that reduced number of days in sea reduce mortality, winter ulcers, treatments and risk for disease. So our input to operation is based on the findings, continue current freshwater production process with a sharpen eye to identify still potential causes of less performing. And based on the findings, continue with a large smolt strategy. And the last one, use prediction tools to identify optimize time to transfer to sea. So on the last slide, key initiatives moving forward. We will focus on integrated operation center. The centers will be introduced in Newfoundland and Finnmark built on our standard design, user interface and capabilities, then enabling sharing of experience and regional testing of new capabilities prior to implementing them as group standards. Together with sales, improved standard dashboards for near real-time data, enabling our sales organization to evaluate the same situation as one truth. Develop better decision support by integrating both internal and external market and sales analytics. We will further develop tools for integrating sales and logistic processes with production planning and harvest plans. Within analytics, we will continue close dialogue with the business, analyzing numerous use cases covering dimension throughout the value chain. At the same time, continuously training our prediction models and developing new algorithms as well as work closely with our industry partner on their methodologies within data-driven decision support. Within innovation, we will develop tools for more simplified data acquisitions in areas where automatic data acquisition is not available or feasible. We have taken a lead role within digitalization and a program low-emission aquaculture offshore -- in offshore salmon farming, [ grand ] platform in [ Norwegian ], designing the framework for control system for monitoring and operation of semi-autonomous offshore salmon farming. This also give us beneficial insight for operations in our existing or potential new near-coast and in coast weather exposed sea sites. So thank you for your attention. And before I leave the floor to my excellent colleague from Rogaland, Nina Grieg, there is a coffee break. And you need to be back here at 11:15 sharp. Thank you, guys. [Break]

This makes me very proud when we have students like this, then the future is bright in this region. So welcome to Rogaland. I'm the Regional Manager here since last year. I hope you will appreciate these 2 days with us. I look forward to show you what we do and not the least for you to meet some of our fantastic employees. I'll start by giving a brief of the region. Grieg Seafood is in control of the whole value chain from a roe to harvest in Rogaland. We produced broodstock and roe in collaboration with AquaGen. We have 2 fully owned smolt facilities and 1 land-based post-smolt plant, which is part owned. We operate 13 sea sites across the region, where 100% received a very good or good score on seabed tests in 2021. [indiscernible] is our harvest plant, not the most modern maybe, but very flexible. Last but not least, I'm lucky to work with 159 competent and experienced people. In Rogaland, we have 17,800 tonnes MAB at sea, including research and broodstock licenses. Because of our early investments in post-smolt, we have a capacity of 30,000 tonnes. Looking at the 2 main indicators on biology, they're both quite stable in this region with a slight improvement last year. The variations are mainly caused by single incidents. Rogaland as a region is biologically quite challenging, with temperature varying throughout the year from 3 to 17 degrees. Close proximity of sites across the region increases the risk of sea lice, PD and other welfare issues. On the other hand, infrastructure of well boats and suppliers is good and the competence and the experience in the region is strong. Sea lice is our biggest challenge, mainly because the treatment to keep the sea lice levels is damaging for fish welfare. PD also remains a challenge in Rogaland. But on the positive note, the vaccines and post-smolt seem to reduce mortality and severity. And it's a very different challenge today than it used to be. Average harvest weight has increased mainly because of effective production from post-smolt. Less treatment and biological issues has a positive effect. The harvest volume in Rogaland has grown strongly. As you can see from 2019, Tytlandsvik was completed, and 2 research licenses was introduced. The second phase of Tytlandsvik was completed in 2021, which increased harvest volume further. This year, we are on track to harvest our 30,000 tonnes. The main driver of cost is biology. So 2019 was a good year in Rogaland. While 2020 and first half of last year was challenging due to single mortality events. Biology improved significantly during the second half of last year, harvesting, among other, the first full site of post-smolt out at [indiscernible] and several groups without treatment. The main contributor from post-smolt will be more stable biology going forward. And this will also transfer into costs and hopefully offset some of the inflation we are seeing. Improving biology and reducing risk is our main priority. In Rogaland, we have 3 key initiatives to improve. It's post-smolt, it's integrated operation center and it's preventive sea lice measures. And I'm very proud of these initiatives, as I believe Grieg Seafood Rogaland has had success already on all 3. They have been implemented according to the plan initiated some years ago, and we are starting to see effects. Looking forward, we have an ambition to reach 35,000 to 40,000 tonnes in 2026. And these 3 initiatives are essential to reach that volume. Tomorrow, we will visit both Tytlandsvik to see and learn more about post-smolt and the operational center at our head office here in Rogaland in [ Finnoy ]. So post-smolt is a game changer. For those of you not very familiar with the term, post-smolt is in short about keeping the fish on land for a longer period of time to reduce the time at sea. By increasing the smolt size, the time at sea has reduced from 18 to less than 12 months. This improves biological control, fish welfare and survival, as I will illustrate later. Our production in sea is regulated by maximum standing biomass. And in Rogaland, we target various smolt sizes throughout the year to maximize the utilization, but also to adapt the different challenges at our sea sites. Rogaland has been an early mover in this area, and I'm happy that we have both current but also planned and optional expansion projects available, as you can see here. Altogether, we have planned expansions of [ 9,500 ] tonnes and optional expansions of additional 3,600 tonnes. Except from our internal smolt facility, Trosnavåg, we are building on strong partnerships to expand our capacity in this region. It's easy to get a little bit impatient in fish farming, and it takes some time from starting with post-smolt until harvest enough groups to make sensible conclusions. However, I'm proud to announce that we have harvested 18 groups with smolt bigger than 600 grams. And the results, we believe, are promising. First of all, we've proved that we can -- that we are able to have a stable production of up to 1 kilo fish on land. Of course, there's learning to be done. But the mortality has been low, and growth as expected. So -- and so far, we have had no big incidents. The most interesting, however, is the results at sea, and we have harvested some really strong groups of fish. Days in sea is the main contributor to better results. And the 18 groups have an average of 306 days reduced from 476 for the biggest -- for the smallest fish, less than 200 grams. This makes a huge difference in risk. And as the chart illustrates, mortality increases towards the end of the production, especially from 300 days and onwards. For smolt smaller than 600 grams, the mortality is 10% after 300 days in sea, but 18% in total for the generation. Note that the average for this production area too was close to 20% last year. For the bigger smolt to the right in the chart, however, the mortality never reaches more than 11% because the cycle is shorter. As noted earlier, feed conversion rate is mainly driven by survival. And the 18 groups harvested so far has a 6% better feed conversion rate than the average. Also smolt yield improved by 30% for these groups. This is due to lower mortality but also better growth. So while it's still a little bit too early to draw conclusions, we are very optimistic to the improved biology from post-smolt. We believe the harvested groups are representative of this potential. The maturity of post-smolt is produced on land, but we are also exploring new solutions at sea. And we have concluded 6 groups with post-smolt so far in FishGLOBE, a semi-closed containment system. Growth has been as expected with no technology or major mortality events. We've had zero lice treatments. However, wounds and gill disease are examples of issues that are not fully solved with closed containment. So currently, we operate 2 globes or units and 1 research license together with [ reef fish ]. This spring, we also established a joint venture with FishGLOBE to develop a bigger unit, 10x the size almost. And the project has been granted 2 development licenses. And the building decision will be taken during this year. We aim to keep sea lice levels low at all times. However, the handling process at sea is one of the main -- the handling process of sea lice treatment is one of the main threats to fish welfare. We therefore put a lot of effort into preventive measures. Our main effort is, again, post-smolt. During a traditional production cycle, the fish will be exposed to several periods of lice pressure and reducing the time at sea naturally reduces this. Our second main effort is cleaner fish. And in Rogaland, we have -- we see good effect from using both wrasse and lumpfish to avoid lice treatments. We are well aware of the welfare issues, and we recognize that we must improve in this area. Our efforts with preventive measures are paying off. Looking at the last generations of fish from 2016 here, we have reduced the number of handling treatments to 1.25 and 40% of the pens harvested in Rogaland last year never needed any lice treatments. We have an ambition of harvesting 35,000 to 40,000 tonnes in 2026. In Rogaland, we have limited options of growth in sea. We target full utilization in 2022. [ PO2 ] was colored yellow in this year's traffic light and areas left for new sites are limited. Post-smolt will be our main way of growth, and we have a minimum of 4,000 tonnes planned for 2026. Additional tonnes to 40,000 is achievable with available post-smolt investments and new technology. As the bottom chart illustrates, the post-smolt introduced in 2019 strongly increased harvest volume per MAB. While there will always be challenges to overcome, we strongly believe that post-smolt will improve biology, reduce risk and take us to our targeted volume for 2026. Thank you. And then I would like to introduce our next speaker, Berit Seljestokken from Finnmark. [Presentation]

Yes, I'm proud to show you such nice images from the great Alta River, our sites and colleagues in Finnmark. We always have to keep in mind how important the wild salmon is for the local communities. My name is Berit Seljestokken, and I'm a seawater production manager in Finnmark. I will start with a short introduction to the Finnmark region. We are located in the Northern Norway with a total of 27,200 tonnes maximum allowed biomass. We have got altogether 22 farming sites. On 7 of these, we run green licenses. And on one, we run a teaching license. And if I'm not wrong, we are actually hosting the world's northernmost fish farm site located quite close to the North Cape. It's just a little fun fact. We have got 2 smolt facilities, the main production in Adamselv and one smaller smolt facility for on-growing located in Hasvik, the last one is in ownership with Norway Royal Salmon. All fish are harvested in Alta at our processing facility. We employ 248 people and a total organic capacity of 39,000 tonnes. Focus areas in the region are winter ulcers, ISA and sea lice. Winter ulcers and ISA hit us quite hard the past couple of years. I will come back with more information about that. I will give you a status on biology. The past 8 years, we overall had a satisfying survival rate. Annual, about 95%, some years, even 96%. But as you can see, we had a drop back in 2020 caused by what have been our main issues lately, ISA and winter ulcers. The last year look better and the survival rate has again increased. When it comes to feed conversion rate, the story is somewhat the same. We had strong results until [ the wound ] and ISA issues made a negative impact on our performance in 2020 and '21. However, we slowly see a turn in trend the last quarters. And I believe good FCR comes together with healthy fish. We are targeting harvest weight of 4.5 kilos. And this graph pretty much tells us the same story as the last ones. Harvest weight has decreased due to early harvest of smaller fish. In the cases of ISA, we got orders from the authorities to immediate harvest the entire site. In cases with wound issues, one of the actions to take is the same, so it's early harvest. The trend for the last quarters is looking much better with an overall better fish health situation during this winter and spring. We are also very happy with the increased harvest volume the last years despite our challenges with fish health. The growth is mainly due to increased stockings from 2018 and improved site structure. Then some comments on the farming cost. You can see an upside in cost in 2020 and '21. The main source for the high cost is ISA, which are forcing early harvest and expensive harvest costs. Harvest of ISA-positive fish and all other fish docks nearby demand a fully closed transport and harvest. The cost level of 2019 shows our potential. The past 2 quarters shows that we are improving. So the last half year, we have succeeded very well with fish health. No new cases with ISA, fewer sea lice treatments, and we have seen less problems with winter ulcers. And as mentioned, this winter season went off pretty well, and I'm expecting this positive trend will continue. This slide is [ listing ] up the key priorities to achieve our goals for growth and improved fish health. It is continuously work to optimize our farming sites. Post-smolt is a key factor. Larger and more robust smolt is important. As long as sea lice problems are not solved, sea lice prevention is essential for further growth, taking care of our employees and further develop our organization is priority. And as mentioned already, we are aiming for 40,000 to 45,000 tonnes in 2026. Optimizing site structure is very important to improve license utilization and biosecurity. We have been producing in some of the areas for almost 30 years. And what was the best sites back then is maybe not what we consider the best today. Experience, knowledge and better technology allow us to improve. We have been working continuously on the site structures for years and are awarded with 5 new sites since 2016 as well as optimizing existing sites with adjustments and relocation and increased maximum allowed biomass on existing good sites. In the same period, harvest volume have increased with 56%. We have experienced the importance of higher flexibility in cases of diseases like ISA, where we are imposed to follow larger areas. So we are still searching for new sites. And at the time, we are working on another 3 new sites and reposition of 2 existing sites. We are focusing on northernmost areas, that's where we see the largest potential. So with all these measures, we aim to increase flexibility both to handle any new regulations and better biosecurity without negative impact on growth or our harvest volume. And also to mention, today, 100% of our sites are certified after the ASC standard. And of course, we want to keep it that way. The ASC standards comes with stricter demands on an environmental impact on the surroundings and the seabed. This is our smolt facility in Adamselv, producing about 10 million smolt per year. A new building is planned where you can see the circle. That's for a new growing of post-smolt. Capacity will increase from 2,000 tonnes to 5,000 tonnes a year. Construction starts at the end of this year. First smolt delivery are expected in 2024, and we will see effect on harvest the year after. The benefits of this are shorter production time in sea and higher flexibility as the smolt output window in the north is narrow. I will go a bit deeper in our systematic work to improve fish health. And I want you to keep in mind the numbers from the second slide. We got the overall high survival rate of annually 95%. So the issues with winter ulcers and ISA has not caused too much mortality, but other disadvantages, like higher cost, downgrading at harvest and reduced harvest weight. So -- and especially the winter ulcers are not consistent with good fish welfare. So this is our approach. We run a lot of very useful analysis of our production data from the last decade. It's on each and every site and year class. This is to find out what went wrong, why and where? And that's important when did we succeed and why? So we are aiming for repeating the best productions. So all these analysis have given us useful information, for instance, optimizing smolt input and harvest time. Improved vaccination program. Since last year, all the fish we put in sea is vaccinated against ISA. And so far, with very good results, no new cases are reported. We are these days running 2 different projects on new vaccines against winter ulcers. The results of this are not ready yet. We believe that improved diet and correct feed composition, especially in the winter and cold period can help us to prevent winter ulcers and improve skin health. Optimizing harvest timing. That means harvest of weaker fish ahead of winter months or ahead of ISA risk. Large smolt [ is an ] essential, of course, to reach recommended harvest weight. Sea lice prevention has been going on for a while already. Most important is the sea lice skirts, that's a closed barrier on the upper 10 meters of the pens to prevent sea lice larvae from getting attached to the fish. [ Cold ] temperatures and good oxygen level allows us to use these skirts all year around. Cleaner fish is also important, together with breeding program for sea lice resistance. Well-being and safety are always top priority when it comes to taking care of our staff. And of course, we are dependent on good and dedicated staff to reach our goals. The situation in market is somewhat special. Our farms are located in remote areas and all our staff working shift and lives at the sites for 1 week at a time. We run continuing education and development program in all levels of the organization. We are not the only fish farming company who are planning growth in Northern Norway. We believe, and we will be facing a shortage of employees available. So attract, develop and retain talent is getting more and more important. We are aiming for being the preferred employer in our local communities. Yes. Our ambition for growth are reaching 40,000 to 45,000 tonnes in 2026. We got the current capacity of 39,000 tonnes. We believe that 40,000 tonnes are within range by optimizing site structure. Adding 3,000 tonne post-smolt capacity in Adamselv. This will give us shorter production time and increased harvest. We want to add 3,000 tonnes capacity by growth investments and the traffic light system will allow growth in Finnmark as Finnmark county got the green light. We recently got a permission for viewing license. This will be put in action from 2024. And finally, additional smolt sourcing. So as I mentioned before, since 2016, Grieg Seafood Finnmark has increased harvest volume by 56%. Last year, we reached our farming goals and this year, so far, things goes as planned. So with all these initiatives described, I'm looking forward for the years to come. Next speaker is Managing Director, Rocky Boschman, presenting BC. Thank you. [Presentation]

Good day. It's nice to be here. I'm always excited to talk about Grieg Seafood BC. And you can see we have this really special unique opportunity in British Columbia to work closely with the indigenous peoples in whose territories we operate. And you can just see a little bit in this video how they speak about how their vision about what we do has been evolving over the years, how they see a path for themselves now in partnerships and ways that we can work together in their territories to bring a lot of benefits to their people and their plans for their communities and their self-determination and revitalization of the places where they've been for hundreds and thousands of years. So this is really exciting. I could talk a lot about that, but I'm going to, as the speakers before, share a few highlights of what goes on in Grieg Seafood BC. So we operate 22 farm licenses in 4 distinct production areas on both coasts of Vancouver Island. Our head office is in Campbell River. We have 1 Hatchery in Gold River, which is on the West Coast of Vancouver Island. And we produce about 900 tonnes of smolt there. We currently have 180 well-trained, very motivated employees. The annual harvest volume has been steadily growing since 2016. This growth has been due to a 5-year strategic plan to invest in feeding systems, aeration systems and new larger pen systems. 100% of our fish this year will be harvested with ASC certification. And we're very proud of all the hard work that went into achieving that. In 2021, we started our own internal brood program, which now supports all of our growth ambitions. Our primary processing is done in partnership in Campbell River. And the main biological challenges that we face in BC are frequent blooms of harmful plankton, seasonal low levels of oxygen and seasonal challenges in sea lice. Since the time we started growing our production in 2016, we have made a lot of change in investments that have resulted in improved biology. You can see on the graph on the left, that there's been a gradual improvement to survival. Environmental events were once the main driver of mortality in BC. We have made constant improvements to the aeration systems on every farm, and these are proven to improve survival during algae events. The use of AI helps us to understand the enormous volume of environmental data that we're collecting all the time. And this has really progressed our ability to meet the environmental challenges. Recently, the need for an increase in lice treatments has given us a new challenge to survival. However, dedicated treatment teams and the newest treatment technologies has given us a good control over this challenge as well. eFCR, which you see on the right side of the slide there, has been on the same path of positive development as survival. The main driver of this is the improvement in the reduction of the number of lost feeding days due to environmental challenges. Investments in feeding capacity and the improvements to our aeration systems allow us now to feed well during difficult conditions when previously we couldn't feed at all. And feeding during these difficult times would cause distress and even mortality with the stock. You can see on the left graph there that we've enjoyed a very stable average harvest weight of about 4.6 kilos since 2016. At that time, we implemented a grading program using grade [indiscernible] on every single harvest. So this program not only delivers a consistent harvest weight, but allows us to keep the smaller fish behind in the pen for longer to really maximize the growth on these farms. The graph on the right shows that we have grown our overall harvest volumes since 2016. Investments in farm infrastructure have allowed us to maximize production on each farm. Further growth will come from improvements in several areas. We continue to invest in farm infrastructure that maximizes production. This means larger pens and better feed systems. We continue to increase survival with improvements to our aeration systems and barrier systems, and I'll talk a little bit more about that in a few minutes. And organic growth will come with new farms currently in the application process. So how are we controlling costs? As you see in the previous slide, improvements to fish biology, including the reduced FCR and the increased survival have been really contributed to cost reductions. However, increased sea lice treatments and increases in feed costs have contributed to cost increases. The goal of implementing our barrier systems and lice skirts on some farms is to reduce sea lice infections and that cost of treatment as well as to further reduce mortalities caused by environmental events. Confidence in these systems will then allow us to increase stocking densities. We will see a further cost decrease due to the volume effect of increasing production in some areas and on some farms. As I mentioned, there are several key initiatives on this graph that have contributed to both the growth and good results in BC. We've put a lot of effort into developing technology and data analytics continue to improve our farming operations. For many years, we've been developing and implementing barrier systems, and we call this cool flow, that's our little name for that. And these provide a protected stable biological environment on the farm. Site development means a combination of improved feeding systems, AI enhancement and larger 200-meter circle pen systems. We have just completed the expansion to our Gold River Hatchery. And in 2021, as I mentioned, it was the first year of our new brood program, and we were able to collect more than 16 million eggs. And finally, these initiatives will contribute towards our ambition to reach 30,000 to 35,000 tonnes of harvesting in 2026. As Trond mentioned, we collect a lot of data every day. In fact, the 1.5 million data points that we collect every day in BC is really too much for our little brains. So we've developed reporting platforms in dashboards. And now the use of AI enables us to really dig in and understand all of that data and what it means in our challenging environment, and we better understand the fish behavior in the pens. And recently, we've now been able to forecast and even predict changes to the oceanographic environmental conditions around the farms. Looking at the 2 middle graphs, you see it's kind of a story of red in BC, and that means that much of the year, we face really very challenging environmental conditions. The chart on the bottom shows that for most weeks out of the year, many of our sites are in a dangerous level of either low dissolved oxygen or surrounded by harmful algae blooms. Since our last capital market update presentation, we have continued the ambitious process of collecting and analyzing data to help us better understand this environment, and we further improved and automated our aeration systems. The goal of maximizing growth during these challenging conditions has pushed us to continue to expand the capacity of our feed systems and to further automate. Many of our farms, we have -- many of our systems are now using AI to monitor and assist feeding. On 1 farm, we have completed a full-growth cycle with AI systems fully in control of the feeding. And this farm has achieved our best results for that year class. We use automated aeration systems in all of our pens on every farm. These systems stabilize the environment inside the pens that both reduces mortalities from environmental events and it allows normalized feeding even in very difficult conditions. Mortalities related to algae blooms have decreased from 3.4% to 0.4% since 2019. So we're really on the right track with a lot of this technology that we've been developing over the years. We've developed our harmful algae mitigation systems to now include retractable barriers that hang down right to the bottom of the pen. The system includes all the data sensors and aeration technology but also now implements oxygen-generation equipment. We now have grown 2 complete farms with this system and found extremely positive outcomes. First of all, we do protect the farm from harmful algae events. As you can see, we've reduced a lot of mortality. And then also we've allowed feeding to continue even when the farm is surrounded by this harmful algae. Therefore, we've seen better growth and improvement to FCR in these systems. We can oxygenate and economically contain the dissolved oxygen in the pen. One of our goals in BC is to reduce interaction between our salmon and wild salmon. During some seasons, large amounts of wild salmon migrate past our farms. And there's concern that sea lice is passing back and forth between the wild salmon and the farm salmon. So during our last trial with the barrier system, the farm did not even require 1 lice treatment, even though nearby farms required 3 lice treatments. Although we have been developing systems over several growth cycles, we are being very systematic in the way that we make further improvements and the way that we implement them going forward. All 3 farms in our Esperanza production area will all be in these systems by the end of the year. And so that represents almost half of our total harvest for next year. So this year, we've completed and stocked a 500-tonne expansion to our Gold River Hatchery. We call this RAS34. This expansion increases smolt production from 400 to 900 tonnes and really helps us meet all of our production ambitions. In addition, in 2021, as I mentioned, we implemented an internal brood stock program, and we now can supply 100% of our production needs. And this will mean lower egg cost for us, better quality and a lot more flexibility in our production planning. So what is site development? Over the past 6 years, we followed through on a plan to transition from older 30-meter steel cage farms to 200-meter circle farms. Currently, we have 3 200-meter circle farms in operation and 2 more going forward in the short term. In our challenging environment, we find larger pens spaced further apart enjoy better water flow, more stable oxygen levels and they create less benthic impact compared to a dense system of 10 or 12 pens that are essentially acting like 1 large pen. In addition, we have 1 new formulations approved and 2 more in process. So finally, the organic growth to farm capacities and better control over the environment with our barrier systems will allow us to push production factors on some farms. That means that where we are strictly limit densities to 15 kilograms per cubic meters, now we anticipate that we may find some farm support densities up to 18 kilograms per cubic meter. And this will incrementally contribute to our growth ambitions. And as I just mentioned, 1 new 4,400-tonne farm has been approved and 2 more applications are in process. And so now you can see that why we are so confident in our -- in achieving our ambitions for 2026. And now it's my job to introduce to you Knut Skeidsvoll, the Managing Director of our Newfoundland operations. Knut?

Hello. My name is Knut Skeidsvoll. I'm the Regional Director of Hendrik, Newfoundland. And after seeing -- getting a very nice visual introduction of our area, I'm very pleased to give you all an update of our activities in Newfoundland. Our project started in 2015. During 2016, we finished environmental assessment review and was approved the same year. We became the first company in Canada to receive the import permit from CFIA [indiscernible] to use sterile Atlantic salmon eggs from Europe for commercial marine production in open pens. We also received our land-based hatchery license during 2016. From 2017 into 2018, we went through an environmental impact statement, referred to as an EIS, which was approved in 2018. The EIS committee running this procedure consisted of 11 members from both provincial and federal departments. The EIS required a lot of resources from us, but it also gave us a solid baseline moving forward and identify and develop sites as well as creating details operation procedure focusing on environmental expects, fish health and sustainability, all of which benefited us when later on dealing with the various departments involved in our industry. From 2019 to 2022, we received 13 licenses, each with a permit to carry up to 2 million smolt. Furthermore, we also have 3 licenses in the Newfoundland application process. So why Placentia Bay? Overall, a favorable area both on land and sea with the great opportunities and strong local support for fish farming. We have been granted an exclusive right of use of Placentia Bay for fish farming, an area which is larger than [ Okanagan ]. The exclusiveness gives us a great advantage for controlling biosecurity and fish welfare without impact from neighboring fish farming operations. Three bay management areas equal production regions focus on semiannual production with no other interaction from other farming activities. The distance between sites is approximately between 5 and 10 kilometers. And between the BMAs, we have a distance of 10 to 14 kilometers. 13 license issued is giving us a total capacity of 30,000 tonnes of harvest fish. Option prepared for further expansion of possible capacity is in place. We are building up our production capacity carefully with consideration of biology and fish health with a target to reach 15,000 tonnes within 2026. Preliminary agreement for processing is in place. Environmental conditions in Placentia Bay is comparable to Finnmark. The main difference is slightly higher average temperature throughout the year and more daylight during fall and spring. The area is windy, but with less severe weather than experienced in Finnmark. No algae bloom of concern for fish health has been observed. Work sites are deep, 100 meters plus, with favorable current and optimal oxygen level throughout the water column. We do not expect high temperature -- extreme temperatures in the area. In the last 6 years of monitoring, the highest temperature observed was 17 degrees and only on the surface. We are using the newest technology on both land and sea with a focus on fish health, sustainability and energy-efficient system, lowering our carbon footprint. The RAS facility represents an innovative new system from AquaMaof, out of Israel. It is high energy and water efficient, no use of mechanical filters, limited use of pumps and partly moving the water by gravity. This significantly reduce energy consumption, lowers the CO2 footprint and reduce the noise level in the production and water treatment area dramatically compared to other systems. Our hybrid barge is the first of its kind in Canada, and it's moved away from the use of purely gas-driven generator as power source. It lowers CO2 footprint and at the same time, improves the working environment for the crew with regard to noise and fumes. We are using 160-meters pen with 40-meters deep nets. These are pens special designed for Placentia Bay based on environmental data collected. The pen system, combined with hybrid state-of-the-art feeding barge, brings farming salmon to a new level in Newfoundland. Through the federal grant program, supercluster, integrated operations center and real-time environmental monitoring of site is being implemented. This gives on a daily basis heightened control of both environmental condition and fish welfare. Remote system for daily removal of smolts instead of manual handling and use of diverse mitigate the risk of predators and disease. Our facility consisting of a hatchery, start feeding and smolt unit became operational in 2021. The facility has a capacity of 600 tonnes and with the expansion of post-smolt A, we increased the capacity to 2,000 tonnes (sic) [ 1,400 tonnes ]. This will enable the system to supply smolt for production exceeding 15,000 tonnes. It is worth mentioning that feeding capacity for smolt and PSA facility jointly will be 14,000 kilo per day. Design for PSA has been completed, and tender will be issued late for 2022. Preliminary design for post-smolt B has been prepared and awaiting a decision based on previous outcomes. When we have completed the post-smolt B, our total production capacity of harvest will be 30,000 tonnes gutted weight. The facility design and [ prinsip ] gives a unique use of gravity flow of water, no mechanical filter and 99.8% water reuse. The sludge treatment system, the DNS, reduced the amount of sludge to be removed, conserving most of the water mixed in the sludge and reduced the problem [ of smell ]. The potential of any buildup of H2S returning to the production area is eliminating during the treatment procedure for the use of the DNS. [ Restrained ] smolt window, time when you can move smolt from hatchery to sea is from May to August. This is mainly due to 2 factors: temperature in the spring preferable above 4 degrees and time for fish entering in the pool to adjust to environmental before winter. Our ambitions for Phase 1 is to reach 15,000 tonnes by 2026, and our first harvest takes place in 2023. We are building up 3 BMA production areas to meet the production goals, having a permit to hold 2 million fish on each site. Preparation for expansion will be ongoing, but further development depends on successful production through Phase 1. This depends both on biologically and economically result. As the first company in Newfoundland, we successfully moved fish in early May to a pipeline from hatchery directly to a [ well boat ]. Furthermore, we also successfully lowered the individual tank temperature to match the seawater temperature. This has not been done elsewhere in Newfoundland. A significant change of method used in Newfoundland and a significant reduction of stress of the fish resulting in a very high survival rate during and after transfer. In Atlantic Canada, there is a limited access to well-developed brood stock, and it is dominated by one strain of family known mainly by private companies. The risk of not getting sufficient or top quality egg from a one strain family made us decide to work with sterile eggs. It was decided to use the most robust family meeting the requirement for environment within Placentia Bay. We went -- we were the first to successfully receive an import permit to use of Europe -- European sterile, all female Atlantic salmon egg from marine open-pen operations. TransAtlantic regulation for live transfer require us to use sterile eggs. And for the time being, we are using triploid all-female Atlantic salmon eggs from Iceland. The benefit of all-female sterile salmon is a better growth, both on land and sea, no maturation issues and preventing genetic pollution in the event of escape. We are very pleased with the performance of these fish to date, both through the hatchery period as well as so far in the sea. We had a smolt-to-sea in May 2022 with extremely high survival post-transfer, more than 99%. We are using a special feed designed for triploid from start feeding all the way through to harvest. In addition to the feed, we are also using recommended and proven procedures with regard to temperature protocol for hatching, start feeding and grow out. Late October, we changed from our standard summer diet to special winter diet designed to mitigate typical health issues that may occur in the fish throughout the winter. The diet focused on building up the salmons reserve of minerals and vitamins with a special focus on skin health. Newfoundland has a tremendous potential for future growth, both for traditional as well as seasonal operations. The various areas are highly unexplored when it comes to assess potential new sites and farming areas. Placentia Bay areas can easily carry a production of 45,000 tonne gutted weight without increasing environmental footprint on the existing sites. Bay West, which is physically situated west of Placentia Bay, has also a great potential for the future as we successfully develop our operation. We estimate that we -- the harvest potential for Bay West is 20,000 tonne gutted weight. We are very confident that we will succeed with our expansion in Newfoundland, and we do have the right people and the right equipment to accomplish this. And this concludes the presentation from the regions. Thank you. And then a practical information, it's time for lunch. And we need to be back again at quarter past 1, sharp. [Break]

Hi, everyone, and welcome back after lunch. I am the lucky winner of the slot after lunch. So now I hope everyone is ready to dig and dive into the financials. Starting with -- looking a little bit at the EBIT per kilo. We are very happy with that development, positive in all regions with harvest and moving from close to 0 and up to a level around NOK 30 per kilo. The drivers behind this is, of course, a good market, but also a good operational improvement. The operational improvement has lowered the cost. As you can see in Q1, we had a volume-weighted farming cost in the group of NOK 43.5. And in Norway, we were very close to NOK 40 in the last quarters. So that's a good development. Then some comments on the inflation. We know that the feed prices are moving up. Energy prices is moving up. Boxes that we're using in the production or to the fish are getting more expensive. So that's the situation on the inflation side. And it's also like this that we are first taking this into the balance sheet when we are producing the fish. And then we are taking it out of the balance sheet into the P&L when we are harvesting the fish. And by that, there is a kind of delay on the cost inflation to the EBIT. We are constantly working in order to try to offset some of this inflation. But anyway, the sum of this is that it is very difficult to set a concrete cost target going ahead. So what we are saying right now is that our cost ambition is to be cost leader in our operating regions. But we will still guide on the next quarter, and we have already guided on Q2. So that will -- we will continue on. When it comes to financial priorities, it will always be a balance between returning value creation to the shareholders, investing in profitable growth and maintain sufficient financial capacity. So we have to balance these and I will come a little bit back to the different factors there. First, looking at the growth and our harvest ambitions. In 2021, we harvested 76,000 tonnes. That will increase to 90,000 tonnes in 2022, which is what we are guiding of right now. Then we are aiming to add another 35,000 tonnes towards 2026, then summing up to 125,000 tonnes. But we are guiding this in a range between 120,000 and 135,000 tonnes. And that range will depend where we are -- getting in that range will depend on the earnings potential, cash flow generation, capital allocation, the traffic light system, new technologies, post-smolt and access to sites. This is an overview of Newfoundland and investments planned in Newfoundland. When we moved into Newfoundland, we had an acquisition price of -- or we paid around NOK 800 million for that. Then we have been using NOK 700 million after that from takeover until Q1 2022. And then we are guiding of using another NOK 1.3 billion in order to finalize Phase 1. And Phase 1 is, as Knut was talking about, at 15,000 tonnes. Then the total investment in Phase 1 will be close to NOK 2.8 million. That's a CapEx per kilo of NOK 183. In addition to this, biomass building up will also come. Then we are aiming to add another 18,000 tonnes moving up to 33,000 tonnes in Phase 2. And in order to do that, we have to invest NOK 2 billion, NOK 930 million of that is related to what we define as milestones. That's what we are paying for the licenses. If we want to use this opportunity to grow, that's the decision of Grieg Seafood to make. And the decision of that will be based on success in Phase 1. So if we are succeeding in Phase 1, then we are moving to Phase 2. So we are only paying for the licenses if we are doing that. The paying is per kilo. So we are paying per kilo growth and the -- and we are paying only for planned growth. So if we are planning to grow 5,000 tonnes, then we are paying for 5,000 tonnes. And finally, the payment is due when we are ordering the smolt of what we have planned. So per kilo in Phase 2, it's NOK 113. Then we also have an opportunity to move to a Phase 3. In that phase, we are not paying anything for the licenses. So the most of the investment in that space will be in the seawater. Totally NOK 460 million, we have invested in that phase, but then we are adding 12,000 tonnes and the total will be 45,000 tonnes. In that phase, we are only investing NOK 38 per kilo. So that's a summary of Newfoundland. Then looking a little bit on the total investments. So if we are taking the growth plan that we have from 2023 to 2026, that will sum up to NOK 3 billion in investments, and that's the 35,000 tonnes that we are planning. And in that calculation, it lies that the organic growth, we will have an investment of NOK 40 per kilo. On the post-smolt side, we have estimated per kilo to 200. In Rogaland, that will be a little bit less. We are only using 18, but the reason for that is that we have partners in that region doing this together with, and we are doing this outside the balance sheet. So this is only the equity share going into our cash flow, so therefore 18. And finally, what we have defined as growth investments, that is kind of investments where we have to buy for licenses. The traffic light system could be one example of that. And in that case, we also have to invest some in new sites. But for that category, we had calculated that per kilo, it will be 165. So again, summing up all of this. We are NOK 3 billion in that phase. The maintenance CapEx will be NOK 2.5/kilo, and that's a little bit lower than a NOK 3 we have been talking about before, but the reason for having the opportunity to lie a little bit lower there is that we are growing and have a relatively much new equipment. And finally, in addition to this, also what we have guided of CapEx in 2022 will come and the remaining of that is NOK 660 million. Then we have made a simulation looking at different EBIT kilo scenarios. We have calculated the cash flow before investment and dividend. And we have also calculated how the net interest-bearing debt per kilo after we have done the investment, will develop. And that is before dividend. So if you are taking one example with 2020 in EBIT per kilo then we will generate a total cash flow that will be available for investments and dividend of close to NOK 10 billion. Using this NOK 20 in EBIT per kilo on the net interest-bearing debt, you will see that then we have a net interest-bearing debt per kilo of minus 10. And we have said our target is NOK 30 so the gap between those 2 is a picture of the dividend capacity that we then have. So the conclusion from this is that most of these scenarios shows that we have a good opportunity to do the growth plan that we have. And we will also have a good opportunity to pay dividend in addition to that. We have a solid financial foundation a green bond of NOK 1.5 billion, term loan of NOK 1.5 billion and revolving credit facility of NOK 1.5 billion and an overdraft facility of NOK 200 million. The financial covenants on the bank syndicate is the equity ratio of 31 percentage. So that's the only one that we have. And in end of Q1, the net interest-bearing debt was NOK 1.7 billion. Looking after the dividend, going back from 2017 to 2019, we paid NOK 4 per share. Then we had this period in 2020 and 2021, not paying dividend and a little bit more stressed period with COVID-19, but now we are back in 2022 and have a NOK 3 per share in dividend. The target is to pay between 30% and 40% of the net profit, but this, we always have to balance with our growth plans and the cash flow. Summing up with our financial targets, the harvest volume, 90,000 tonnes in 2022 and 120,000 to 135,000 tonnes in 2026. On the cost side, be a cost leader in all of our operating regions, the capital structure, as I said, the target of net interest-bearing debt per kilo is NOK 30, but we have earlier commented that in a growth phase, we can have that a little bit higher and an equity ratio of 31 percentage that's related to the bank governance. Profitability, we are using 12% on return on capital employed. And finally, the dividend, 30% to 40% of the group's net profit after taxes. So this sums up the financials. And then it's Kristina next, talking about sustainability. Thank you.

Thank you, Atle Harald. So what we see is that the bar on sustainability is increasing continuously around us. And we see that among our customers, the consumers, the investors at the local communities and the politicians. And for that reason, in Grieg Seafood, we are working on a number of environmental, social and governance initiatives throughout both our production and value chain. And we're doing that in order to reduce risk from the company, position the company to utilize future opportunities. And in the end, it's about creating value, long-term value for all of our stakeholders. And I just want to emphasize that when it comes to sustainability, I would say the most important topics have already been discussed today, and that's what we're doing in production in the different regions. It's about improving fish health and welfare and about reducing our impact on the environment and especially ensuring coexistence wild salmon and other species. And that has been thoroughly covered earlier today. However, we're also engaged in a number of projects to span both the supply chain and production. And I will give you just a small taste today of 3 such projects. So a little bit about what we do in climate, also biodiversity and a very, very small taste in this testing menu of what we do on sustainable feed. So first, climate risk and action. I think in terms of climate risk, physical risk, it's obvious that the biggest -- the most material risk is about how climate change can impact the ocean environment in the areas where we farm salmon. And we are engaged in many research projects to better understand what that will look like or how that will impact our business. But what we also see is that we can already now start preparing for this in 2 different ways. First of all, the different technologies and salmon farm practices that we are engaged with, such as post-smolt digitalization, barriers between the farm and the environment, close containment technologies, et cetera, et cetera. These types of new ways of farming salmon allow us to ensure biological control within the farm in different ocean context and different ocean environments. So that will give us flexibility also regardless of how exactly it will turn out when the ocean is changing. It's also the case that we are -- in Grieg Seafood, we are operating very different regions, all the way from BC to Finnmark and it's very different to farm as has been presented today, we're looking at tailor-making different types of farming practices to suit these different biological conditions. But it also means that we have knowledge, and we are gaining more and more experience on how to adapt to different types of contact. So that's also preparing us for the future. Now we are, of course, also looking at climate transitional risks, such as financial risk, market risk, reputation risk, et cetera. And we have set a climate goal for that, which is to reduce absolute emissions by 35% between 2018 and 2030 spanning the production and supply chain and then to reach net 0 by 2050. Well, you may look at this number and think that it's not super ambitious to start with, but do keep in mind that we have a significant growth profile just from 2018 until 2026 that we have talked about today and then beyond. And regardless of this growth profile, we will still reduce emissions by 35%. So what will that look like? Well, of course, like every other company, this is a field that there's a lot of things happening all the time, and we don't know exactly how it will look like, but we have done some estimates, and this is basically how -- based on what we know today, what we think it will look like. And of course, reducing emissions from feed is really super important. That's a huge focus area for reducing carbon emissions, but also reducing weight during transportation, especially through the value-added processing that Erik talked about, but also new technologies that, for example, can reduce the use of price. In close more sustainable transportation, we also see potential there, and we'll have a focus area there. But of course, the fact that we now have 2 -- or farming regions that are in close proximity to our 2 major markets is really helping in this regard. And actually, when it comes to our farming operation, the most important measure that we can do is to reduce the biological feed conversion ratio because so much of the emission is connected to the feed, as you saw earlier. And we will be working on that. However, bear in mind that this is a work in progress and a lot of the solutions that will be there in 2030 may not even exist today. So that's we need to work together with others for that. Second topic, tackling nature risk. And at least from our experience, we see that nature and biodiversity is really increasing on the agenda among our stakeholders. And for those of you that are less familiar with the term nature risk, this is really about 2 different things. It's so-called double materiality. And the first aspect is about how the ecosystem around our farms are providing what we call ecosystem services that we depend on in our business. For example, freshwater, good currents, good oxygen levels, et cetera, et cetera. And when there are changes in this ecosystem, how does that again impact our business? That is what this risk aspect is about. And the second aspect is about how are we as an industry or as a company, impacting the ecosystem around us. And that can again lead to regulatory, market reputation risks, et cetera. And as you see, like this really goes to the heart of our industry because we operate in nature. And I think that actually, if you look in Norway, -- the Norwegian some from the industry has not been perhaps able to grow how much we have wanted during the last years because of regulations that are again based on the impact. So that's actually a very good example of nature risk. And we have started to explore this sort of new way of thinking. But what we actually see is that a lot of the same mitigation areas that we have talked about earlier. So barriers, post-smolt digitalization, preventative farming practices, new technologies. That is also helping us mitigate nature risk because regardless of how the ecosystem change around our farms, we are -- we have here a toolbox of different elements we can apply to maintain biological control. And the same measures are also helping us reduce the impact on the environment. So it's just notable that the same measures we are doing to -- that we've talked about today to reduce other types of risks are also really key in reducing climate risk and nature risk. But this is new and it's, of course, a journey. So more work needs to be done in this area to develop it further. We are a member of the task force of nature-related financial disclosures to help set the framework for this on the global stage. So that's work in progress. And we've also made a case study on nature risk and salmon farming together with WWF, Storebrand, asset management and Norwegian Institute for Nature research. And that's available on our website for those of you that are interested in this topic. And then last but not least, feed. So just to start. From a business perspective, it is important to care about the sustainability of feed because we don't want to come in a situation a few years from now or even 10 years from now, where we have to remove certain feed ingredients from the basket because they have too high environmental or social or governance risk. We want to have as many feed ingredients in that basket as possible from a commercial perspective. And traditionally, in terms of feed, it's been -- a lot of the focus has been on a few high-risk ingredients. So sustainable fisheries and also the use of Brazilian soy. And that's important. Work has been done on that, especially in terms of certification and also to mention that last year, our Brazilian soy suppliers were the first globally to become 100% deforestration and conversion free. So work is being done there, and that's important. But we see that going forward with increased focus this has, that is not enough and we need to work more on this. And of course, novel feed ingredients, yes, that is an important part of the future solution. But equally important, and this is not getting enough attention. We do need to work on improving our existing feed ingredients and those supply chains. And to start a little bit on that, Grieg Seafood, we have engaged in a project together with WWF US, where the idea is to make a holistic ESG risk assessment for feed ingredients where we cover a lot more topics, biodiversity, freshwater use, climate, human rights, circularity, pollution governance, et cetera, et cetera. And again, the aim is really to make these feed ingredients more future-proof. Now we are in the beginning of this project. It's a long journey. I can just say that some of the takeaways so far is really that we need a lot more transparency and traceability in our feed supply chains in order to drive that change. So a lot of work has to be done there. And also the fact that there is a lot of potential to work pre-competitively of course, together with our own industry and our own supply chains and the feed companies but also actually together with other animal protein producers and the pet feed industry and other products that have these global commodities within them. Because in this picture, the salmon farming industry, we're a small fish in this big pond -- and we need to work together pretty competitively with everyone who shares the same supply chain to drive this change going forward. So in terms of this, the next step for us is to put it into the global salmon initiative because then we have more people to work on this more companies to work on this topic. And well, just stay tuned for more on this during the coming years. So we will keep on. And then Ragna will go through a few examples and continue the testing menu from some of our R&D projects.

Thank you, Kristina. Good afternoon, everyone. So I'm Ragna Heggebo, and I'm the Global R&D manager in the Grieg Seafood. R&D -- our R&D strategy is aligned with our business strategy and integrated in our operations and tap into different areas in our value chain. Corporate R&D is the kind of research that needs to be performed, as I said, need to know kind of work to bring improvements to our production continuously. And we have ongoing 60 to 70 R&D projects, and they are both running and in the pipeline, some of them. And we have a healthy distribution of -- when it comes to off the face for the project life cycle as well as functional area that they tap into [ EI ], fish health and welfare, nutrition and sustainable production. A high proportion of our projects are validation of concepts, novel equipment and tools as well as production methods. And we frequently carry them out in collaboration with companies that have products to be launched. In the R&D activity, we frequently team up with the regional competency centers, and we are well aware of the positive ripple effects this frequently causes. In Grieg Seafood, we are supportive -- we support open innovation initiatives and collaborate and team up with the best. And examples where we reach out or salmon aquaculture clusters, the [indiscernible] in Finnmark, and we have long-standing and fruitful collaboration with academic partners. And in the following, I would like to give you a flavor of our R&D activity through some examples of areas we focus on. And I would like to start with the winter lesions and how R&D are used to handle this issue in our company. We have completed an ongoing validation studies of mitigation strategies in the market or near to market. And to identify cautious variables and mapping out risk factors, we tested through our own data sets. And moreover, there are ongoing trials to validate novel efficacy trials in vaccines in Finnmark -- and there are -- we have recently performed validation trials of functional feed also in Finnmark. And last but not least, we have introduced bathing of fish in the product consisting of beneficial bacteria flora in Grieg Seafood, Rogaland. Now to results. No single factor stood out from the data analysis, leaving us with a multifactorial explanation picture. However, the same risk factors where we built in Rogaland as in Finnmark. This and other findings points in direction of reduced efficacy of vaccines. I would like to point out that the number of delousing procedures are reduced in the period facing increased issues with winter wounds and hence inversely correlated. Our teams are established in our company to avoid risk, and I could highlight a couple of them to you now. And we have established internal policies that represents or could be expressed like no handling of the louse or delousing at low temperatures and also very thorough risk evaluation of the time for transfer. We have also a very high focus on water quality and smolt and post-smolt facilities to produce a robust fish. I'd like to point out that this effort is of interdisciplinary character. And operations, fish health, personnel, R&D as well as quality and we all contribute from our own end to the efforts. And we have -- we joined forces and have future initiatives also in this area. And for instance, now we give input the research funding bodies to address or point out knowledge gaps and research needs and also participate on several research projects as reference group members. And this would do in order to make sure that the projects are relevant to the industry. Second topic is we focus again on Post-smolt. Post-smolt production is a novel way to farm salmon. And we are developing a knowledge and experience on how to optimize their rearing condition to best meet the biological needs of the salmon. There has been reports of uneven performance of large smolts in the sea phase, and this is an acknowledged challenge for the industry as a whole. Fortunately, salmon make up quite numerous cohorts and make them, therefore, quite suited for statistical analysis. Our in-house analyst tease to raw data sets in freshwater and post-smolt phase to identify explanatory factors for well-performing smolts and post-smolt at harvest stage. We examined parameters like [ light machines ], temperatures, salinity as well as gas levels in water and the air and also temperature deltas between the different phases of salmon's life, because this transitional period is really key to -- a key success factor to handle those properly. And continuously, we drill into findings from these exercises and are now registering all parameters in a systematic way to monitor what -- that we are all the time within the range that are preferable. An early intervention is key to put in place correcting measures as always. Experience-based knowledge, systematic collection of information and sharing -- for -- in the company, for instance, in Grieg Seafood global functional teams is a key factor for success, we believe. We colaborate -- we participate in research projects with external funding in this area like control aqua, where we address research questions and get access to results as they are coming through. Other projects where we are often on the reference group also here to ensure early pickup of research results in our organization to improve our production. Based on the information that we gather here, we aim to establish a recommendation for best practices in the company and focus on continuous improvements in production. I would like to pick up on what both Nina and Andreas addressed in their talks today. And my last flavor of R&D projects will then be on a project that we run in the area of exploring new production areas. And low emission value chain for offshore agriculture is part of the initiative that came from Norwegian Research Council, together with innovation in Norway. And the Grieg Seafood and [indiscernible] companies in the project. And we have teamed up in a very strong consortium with 17 other players, both industrial and academic partners. And this consortium all represent crossover competency and science-based information and novel and current production methods. And in this industrial project, we have divided the activity into sub projects to make sure that we have all addressed. And the overarching aim is to establish a full low emission value chain for aquaculture in offshore facilities. And the pickup is, of course, what Andreas talked about our involvement in Blue Farm. In the -- Grieg Seafood is the project lead of the digitalization project, subproject in this area together with Tore and myself. Other subprojects in this green platform project is electrification and post-smolt production and closed and semi-closed floating conditions as well as low emission logistics solutions, which would be a key success factor also -- together with, as always, surveillance and early detection of fish health-related issues. Okay. Thank you all. And with this, I conclude my speech. And I would like to give the word to CEO, Andreas again.

Ladies and gentlemen, I am so proud of these people. That has been on the stage today and everybody else working in Grieg Seafood for a bright future for the company. As we have heard from today's presentation, Grieg Seafood is in a very good place. Our products are increasingly in demand. We have a steady production, and we are in process of establishing an exciting growth platform. And not at least, our current setup, including the new growth platform in Newfoundland is built on a sound and sustainable foundation. Personally, I can hardly imagine a more purpose driven business. And the product of healthy and nutrition and seafood for an ever-growing market is to me deeply meaningful. I strongly believe that Grieg Seafood is very well prepared for the future. We have the experience. We have the expertise, and we have the best people in the industry. I'm really looking forward to the next years to come. This concludes the speeches for today. Now there will be a small Q&A session. And that [indiscernible] and we have also possibility to ask questions via the web for those that's following us there.

I think we should start with the web, Kristina. Any questions?

That's to you, Andreas.

So there is a question about the renewal of licenses in BC that are supposed to be renewed at the end of June. Is Grieg Seafood confident it will receive renewed licenses?

As I discussed earlier in my talk, it's -- in my speech, it's also -- we are prepared for what's coming. There is said that there should be a transition plan within 2025. We are working on our approach to that, that work we have gone through. We have seen our barrier system. We have seen the post-smolt that we move more of the time on land. Renewal of the licenses that should happen within June. So that is soon. I both hope and believe that the licenses where we have constant with the First Nation will be renewed.

Okay. From the audience?

[ Alex Socker ] from [ DNB ]. So a question regarding Newfoundland, particularly sort of phase 2. You say the next phases will be dependent on biosecurity and fish health and also project economics. What kind of hurdles are you looking at in order to move forward with phase 2?

I really believe that we can move forward with -- I'm so optimistic when it comes to Newfoundland and what we have seen and what we have experienced now in Newfoundland, but I think I will strongly believe that we will enter into phase number two. But we have said internal and external that we first want to see a successful phase 1 before we take the next steps. So -- but I'm very confident that we will be into phase 2 and more.

Does that mean it's the same mortality rates as you target in Norway, 93% survival?

Yes. Absolutely and may be higher.

And the same return on capital employed target of 12%?

That you will not get the first year, but the target is the same for the whole company.

Nils Thommesen, Fearnley. You choose not to guide on cost targets due to the difficulties estimating what the feed price will be in 1 year or so, but you do guide on CapEx. So how firm is the CapEx budgets in terms of what we're seeing now with inflation with the NOK 3 billion from 2023 to 2026?

They -- again, they are as solid as we can have it on this time. What will happen with the concrete prices, steel prices, it's too early to say, but we have taken into account some inflation in our calculation in our budget. But we have to revise that. And that was what Atle Harald also was saying that our growth will depend very much on the development, both in profitability for the company, but also when it comes to the CapEx and inflation.

Carl-Emil Johannessen from Pareto. You've been talking quite a lot about the post-smolt investments today and about the facts of post-smolt. Can you say something about the cost level in terms of the difference in NOK per kilo in the fish you harvested from post-smolt and traditional smolt in Rogaland. And also in terms of effects on post-smolt in Finnmark, how do you view them? Will that be similar in Finnmark or are there any, let's say, other specific reasons for doing the post-smolt investments in Finnmark?

The main reason for doing the post-smolt in -- of course, the same as in Rogaland. But the main reason in Finnmark is actually to avoid 2 winters in the sea. So if you put tomorrow a bigger fish in the sea, you can avoid 2 winters and shorten the production cycle also in Finnmark, which [indiscernible] also with the winter wounds, et cetera, longer time, you have the fish in the sea, the more exposed it will become for diseases. So that's the main reason in Finnmark. Of course, the cost of the smolt comes up, of course, as of this. But what we have seen now in the smolt production is that we are not 100% there, but we are gradually coming down to a cost level that is similar to the -- to see even in the freshwater. Another thing is that if you go back, we are putting more or less the same number of fish to see in Rogaland now as we did some years ago. Before we started as the post-smolt, we had roughly 18,000, 19,000 tonnes at the top. This year, with close to the same number of small [indiscernible], we will have a production volume or harvest volume of 30,000 tonnes. So there's a huge difference.

And then what should we say is the cost per kilo of -- 1 kilo smolt in -- when it's produced on land?

We haven't said that.

Martin Kaland, ABG. You have mentioned some of these new concepts -- farming concepts, offshore farming, the closed containment, semi-closed containment project, and we're doing a lot on land with Post-smolt. For full cycle grow out of salmon, which of these concepts could be most relevant for Grieg Seafood, perhaps long time in the future, but could you do some sort of ranking and why these different projects?

It depends, of course, on the cost side and also the CapEx side of going in. But I think there is -- all 3 of them that you mentioned is interesting. The post-smolt, we have a lot of experience now. And this is something that we try to utilize throughout the whole organization, all regions. When it comes to the Blue Farm, that's something that we are planning on now. It will take a couple of years more with the planning. And if we then decide to go into investment in that, it will take 2 years of construction before we are there. The closest one is most likely the -- other than the post-smolt is most likely the FishGLOBE, which has 2 licenses, and that's a closed containment, which I think that is important. That we can explore and maybe utilize sites that we are not able to use today with this new technology. And it's also very interesting to use in other regions than Norway, for instance, in British Columbia, as either a post-smolt production [indiscernible] production. But it has to be tested out, and it takes time. And -- but it's always -- if we -- some of us has been in this business for a long time, so we know how it looks like in the '90s, we know how it looks like 10 years ago and what it looks like today, what will happen until 2030. We believe that the land-based also will be a part, but not a significant contribution before at least 10 years from now.

[indiscernible] Markets. It's my impression that the NOK 3 billion in CapEx is related to the farming and the growth. But can you say something about the CapEx expectations for harvesting sales and processing in the upcoming years? And a follow-up question also is, could you say something about the timing of when we should expect the NOK 3 billion? Will it be like equally distributed or back-end loaded?

Atle can answer more.

When it comes to the timing of the NOK 3 billion, at the starting point, you can take that straight line from 2033 to 2026 -- 2023, yes. So yes, pretty equal.

Yes. And when it comes to harvest, that's something that we are in a process evaluating what we are doing in the primary processing, we take all it. Primary processing in my head is actually getting and making fillets. And that is something that we are evaluating for Norway for the time being because we know that in the longer run, we need -- and hopefully, we have grown. But it will not come any big investment in primary processing in this plan period, as we see it today, but it will come straighter after. But we have to plan now to be able to be there when we need to be there with new facilities. Okay. Absolutely, everything is clear then.

No more questions from the audience? Any from the web. Kristina? Okay, then I think we are closing down the web.

Yes. Thank you for following.

Thank you.