Annual report 2022
Extending the ocean potential 1
Extending the ocean potential
Annual Report 2022
Annual report 2022
Extending the ocean potential 2
Table of Contents
01 THIS IS SALMON EVOLUTION
Letter from CEO ……………………………………………………………………………… 6
Company description ………………………………………………………………………. 8
Markets ………………………………………………………………………………………… 10
Business Plan and Strategy ………………………………………………………………… 12
02 ESG IN SALMON EVOLUTION
Environment ...…………………………………………………………………………………. 17
Social ....………………………………………………………………………………………… 26
Governance .……………….…………………………………………………………………. 31
03 GROUP RESULTS
Board of Directors Report …………………………………………………………………… 33
Salmon Evolution ASA Consolidated Financial Statements ………………………….. 59
Salmon Evolution ASA Financial Statements …………………………………………….. 102
Statement of Responsibility ………………………………………………………………….. 123
Auditor’s Report ……………………………………………………………………………...... 124
Sustainability Indicators & GRI index ………………………………………………………. 128
Annual report 2022
Extending the ocean potential 3
This is Salmon Evolution
A Norwegian salmon farming company targeting a global leading position in sustainable
production of high-quality salmon from land-based facilities.
• Utilizing a hybrid flow-through (“HFS”) system with 30%-35% fresh seawater intake,
reducing complexity and biological risk and securing optimal growth at low cost
• 7,900 tonnes HOG Indre Harøy Phase 1 facility in operation – annual harvesting
capacity of 31,500 tonnes HOG fully developed
• Joint venture with Dongwon Industries for a 16,800 tonnes HOG production facility in
South Korea
• Launched North America expansion plan and established team of dedicated
resources
• Clear roadmap for 100,000 tonnes HOG by 2032
• Listed on Oslo Stock Exchange main list from July 2021
Annual report 2022
Extending the ocean potential 4
Key figures
Indre Harøy drone picture February 2023
_____________________________________________________________________________
1. Including NOK 1,550 green debt financing package announced March 2023
2. Including smolt release completed in February 2023
Annual report 2022
Extending the ocean potential 5
Roadmap to 100,000 tonnes in 2032
Salmon Evolution targets a leading position in
the production of sustainable high-quality
salmon from land-based facilities. In addition to
its 31,500 tonnes project Norway, the Company
is expanding internationally through a JV in
South Korea. Furthermore, the Company has
initiated an expansion plan into North America.
Through utilisation of technology, competence
and experience from domestic projects, Salmon
Evolution aims to develop projects in targeted
growth markets in collaboration with local
partners. The Company has a clear road map
towards 100,000 tonnes production capacity by
2032.
Roadmap towards +70kt HOG annual harvest
Indre Harøy Phase 1
Annual report 2022
Extending the ocean potential 6
Letter from the CEO
2022 was a highly eventful year for Salmon
Evolution where the Company transitioned from
being a large construction project into a fully
operational salmon farmer.
It has taken us almost 6 years to get to where we
are today which says a lot about the lead times
in the land-based salmon farming industry. At
the same time, this puts Salmon Evolution in a
unique position to accelerate growth in the
coming years simultaneously with amplifying our
global frontrunner position in developing this
industry.
Salmon Evolution has now been successfully
farming salmon on land for more than a year
and is already on the fifth generation. We have
fully harvested out our first batch with very strong
biological results, clearly demonstrating that it is
possible to produce salmon on land, in a very
short period of time, on an industrial scale and
with the end result being a premium quality
product with strong harvest weights.
Although we are very satisfied with the
operational development over the last year, we
are still in an early stage with much more to
learn. At the same time, we are now more
convinced than ever that our approach to land-
based salmon farming represents an ideal
balancing of output, risk and cost.
Over the last years we have spent a lot of
resources in building an organization ensuring
that we are well equipped for the tasks we have
taken on. As CEO I have to say that I am truly
impressed by the way our team has performed.
Taking into operation a facility of this scale is a
highly complex process, and in that context the
operational performance is even more
impressive. Furthermore, I am also very pleased
to see all the learning and accumulation of
competence and experiences that are taking
place on a daily basis, which long term should
only contribute to better and better operational
results as we finetune our systems.
Throughout 2023 we expect a significant ramp-
up in harvest volumes alongside with increasing
production. Given the strong salmon prices seen
so far this year we should be very well positioned
to capitalize on this.
We continue to have a positive view on the
long-term demand for salmon and think that the
need for resource efficient production of animal
proteins will only increase in the years to come.
This should ultimately benefit the salmon relative
to many other protein sources, given its low feed
conversion ratio, high nutrition content, short
production cycle and low environmental
footprint.
Additionally, there are significant challenges
growing the supply side using conventional
methods, from both a biological and regulatory
perspective. Thus, the opportunity to sustainably
produce salmon on land at an industrial scale is
greater than ever and Salmon Evolution aims to
be the driving force globally for this in the
coming years.
With phase 1 of our Indre Harøy project now
completed and with production steadily
Annual report 2022
Extending the ocean potential 7
increasing, its time to look ahead to phase 2 in
Norway and also our projects in South Korea
and North America. We have always had global
ambitions, but we remain humble about the
complexity of building and operating large
scale facilities in overseas markets where you
don’t have the same infrastructure and access
to competence as you have in Norway. Hence,
we are convinced that having a large
successful operation at Indre Harøy in Norway
will be our most important enabler to succeed
in overseas markets.
Similar to last year we are also proud to include
an integrated ESG section in our annual report.
This is an area which is highly important to us and
as we move forward and start getting more and
more operational data, we will continuously
work to improve and expand our ESG reporting.
Seeing our beautiful salmon thriving and
growing at our ground-breaking facility at Indre
Harøy make us truly grateful for all the support
demonstrated over the last years. We have
come a long way since our foundation back in
2017 and are convinced that this is only the
beginning. The industry has a fantastic potential
and we very much look forward to actively take
part in defining the future of salmon farming.
Trond Håkon Schaug-Pettersen
CEO, Salmon Evolution
Annual report 2022
Extending the ocean potential 8
Our Vision
Extending the ocean potential
Responsible, competent and innovative
Our vision is to become a globally leading
producer of land-based Atlantic salmon by
ensuring sustainability and extending the ocean
potential. We aim to encourage the inclusive
and prosperous development of the
aquaculture industry, within a stable and
resilient earth system.
Our concept is based on preserving and reusing
marine resources and minimising our
environmental footprint.
Farming fish on land, with each tank as a
defined and isolated biological zone, gives us
full control of water parameters and the
production environment in order to eliminate
lice and other parasites as well as minimising
infection risk.
A closed system also means that there is minimal
risk of escapes.
The use of clean and fresh seawater as the
primary water treatment element, combined
with reuse of water to facilitate stable and ideal
temperatures in a highly energy efficient
manner, reduce operating risk and maximise
output from the farm. That contributes to
competitive operating costs, even compared
with conventional farming.
Our energy plant has a very high output in
relation to the energy used. It ensures an optimal
and stable temperature which contributes to
better fish health and increased growth.
Treating wastewater and reusing fish sludge to
produce for example biogas and short-travelled
fertiliser are among our contributions to a
circular economy.
Annual report 2022
Extending the ocean potential 9
Our Technology
Salmon Evolution is founded on the belief that
good biology equals good economy. This belief
has been essential when developing the
production methods and technology that are to
be applied in the company’s land-based
salmon farming facilities.
Salmon Evolution’s chosen hybrid flow-through
system (HFS) technology ensures rich access of
fresh filtered seawater while at the same time
reducing energy consumption by reusing
around 65% of the water.
A reusage level of around 65% is in the
company’s view a “sweet spot” balancing cost
and operational risk. Higher reusage levels
require the introduction of more filtration and
water treatment and lead to an exponential
increase in risk. On the other hand, a lower level
of reusage will lead to significantly higher energy
costs in connection with pumping and heating
of water.
At Indre Harøy the seawater intake is based on
two intake pipes at 25 meters and 95 meters,
respectively, enabling the company to tap into
ideally tempered water and hence reducing
energy costs in connection with the heating of
seawater.
The water intake is further filtered and treated
with UV to eliminate parasites, sea lice, viruses,
and particles. This ensures a rich flow of fresh and
clean seawater into the fish tanks.
To ensure optimal biological and growth
conditions in the fish tanks, oxygen and CO2
levels are constantly monitored and adjusted.
Each of Salmon Evolution fish tanks represents
an individual biological zone, meaning that
water in one tank never mixes with water in other
tanks. This again serves as a significant risk
reducing measure in case of deceases etc.
where a potential outbreak in one tank never
can contaminate the fish swimming in the other
tanks.
As part of Salmon Evolution commitment to a
truly sustainable production and circular
economy, waste is filtered and collected,
before being transported to a recirculation
plant where it is converted into fertilizer, biogas
or similar.
Annual report 2022
Extending the ocean potential 10
Markets
Overall description
Salmon Evolution targets to play a significant
role in the global salmon industry, and to be a
driving force in the development of land-based
salmon farming. Global production of Atlantic
salmon reached about 2.9 million tonnes LW in
2022. This represents almost a doubling over the
last decade and a yearly growth of 5.9% since
2010.
The salmon industry has for many years
benefitted from several major global macro
trends that have led to a significant demand
growth, hereunder increased global population
and a growing middle class, increased focus on
eating healthy food, and resource efficient and
climate friendly food production.
Global supply of Atlantic salmon has seen an
impressive increase over the last decades, but in
recent years the growth has come significantly
down. The reason for this is that the industry has
reached a production level where biological
constraints put limit to further growth.
Looking ahead for the next decade, a 3–7%
yearly growth in salmon demand implies a total
demand of around 3.9-5.7 million tonnes by 2032
which represents an increase of around 1.0-2.8
million tonnes LW compared to current
production.
This strong demand outlook combined with the
challenges the conventional farming industry
has growing the supply side, have led to the
development of new production methods such
as land-based, offshore and ocean based
closed systems. Conventional farming will play a
key role in the salmon farming industry for many
years to come, but other production methods
such as land-based farming will likely be
necessary to serve the steadily increasing
demand for Atlantic salmon.
Source: Pareto Securities, Salmon Evolution
0
1 000
2 000
3 000
4 000
5 000
6 000
20102011201220132014201520162017201820192020202120222023202420252026202720282029203020312032
World production of Atlantic Salmon (LW, '000 tonnes)
Actual supply 3% growth p.a. 5% growth p.a. 7% growth p.a.
6% CAGR 2010-2022
Annual report 2022
Extending the ocean potential 11
Competitive landscape and market opportunities
Norway is by far the largest producer of Atlantic
salmon today with a market share of about 50%
followed by Chile at around 25%. Common for
both is that most of their production is exported,
with a significant portion of the volume being
sold fresh to overseas markets requiring
airfreight.
Transportation of salmon via airfreight is
expensive and the rise of land-based salmon
farming enables production in end-markets and
thereby eliminating the need for airfreight. This
creates a foundation for additional margins as
pricing for in-market produced fish will likely be
benchmarked with imported fish.
Salmon Evolution has significant international
ambitions and the joint venture with Dongwon
Industries is a strong demonstration of this.
Salmon Evolution acknowledges the challenges
of producing fish on land, which is reflected in
the company’s choice of technology,
hereunder our hybrid flow-through system (HFS).
Salmon Evolution also acknowledges that
building a land-based salmon farming facility is
a complex process which is why our first facility
is being built in Norway in the middle of the
aquaculture cluster to serve as a best practice
facility when expanding abroad. Finally, when
expanding internationally, Salmon Evolution is
confident that project execution can both be
fast-tracked and significantly de-risked by
teaming up with strong local partners.
Dongwon Industries processing plant in Busan, South Korea
Annual report 2022
Extending the ocean potential 12
Business plan and strategy
Goals and ambitions
Salmon Evolution’s goal is to become a globally
leading producer of land-based Atlantic
salmon. The company is focused on extending
the ocean’s potential by transferring the best
preconditions offered by the sea to farm fish on
land through its chosen hybrid flow-through
system (HFS) technology. This secures a truly
sustainable production process with controlled
and optimal growth conditions and limiting
operational and biological risk.
Strategic priorities and opportunities
The Group targets a production capacity of
100,000 tonnes (HOG) by 2032 and although this
is an ambitious target, Salmon Evolution already
has a tangible pipeline of projects, including
Indre Harøy in Norway, K Smart in South Korea
and our North America expansion plan.
While further growth is important, the company’s
core near term focus is to seek operational
excellence for our production ramp up at Indre
Harøy. This should again enable us to succeed
in overseas projects. Over the past years
significant resources have been devoted to
growing the organization, establishing quality
and control systems as well as establishing a
digital infrastructure. Salmon Evolution also has
strong ambitions as to the commercial aspect of
fish farming, hereunder sale and distribution. The
high degree of fresh seawater usage in our
production combined with optimal growth
conditions in our tanks are expected to result in
a healthy and tasty fish with a firm texture which
provides a solid foundation for establishing a
good reputation in the market, all of which have
been confirmed in connection with our first
harvest in 2022.
The environmental aspect of our production
with a closed system production method,
collection and recirculation of waste, no sea lice
and minimal risk of escapes also have some very
attractive attributes that warrants a price
premium in the market.
Capital strategy/priorities and funding
The company will in the coming years actively
seek to optimize its capital structure and have a
balanced mix of equity and debt. Although
land-based salmon farming to a large extent
have had to mainly rely on equity financing in
the past, the company sees increasing appetite
amongst banks for more traditional bank debt
financing structures.
Going forward and along with land-based
salmon farming facilities commencing
operations and obtaining proof of concept, the
company believes this positive trend will
continue and eventually also facilitate higher
loan to values which again will facilitate further
growth.
Salmon Evolution also sees interesting
opportunities for alternative financing structures,
for example through partnerships such as K
Smart. This and similar structures represent a
capital efficient way of growing production
while at the same time scaling and leveraging
the organization’s competence and knowhow.
Annual report 2022
Extending the ocean potential 13
Management
General comments on experience and competence
The company has a dedicated management team with extensive experience from the aquaculture
industry, and a well-developed organisation with the necessary competence and execution
capabilities.
Roles and CV’s
Trond Håkon Schaug-Pettersen, CEO & CFO
Trond Håkon Schaug-Pettersen took
over as our CEO in October 2022,
after being our CFO since 1 January
2021.
He brings extensive experience from
both the salmon industry and the
capital market. Prior to joining
Salmon Evolution he served over 4
years as Senior Vice President
Finance and Business Development
at Hofseth International.
Before joining Hofseth International, Schaug-Pettersen worked for nine years
as an investment banker at Swedbank/First Securities advising Norwegian and
international companies on IPOs,
equity and debt capital raisings, M&A,
strategy and restructurings.
Schaug-Pettersen has a BSc in
Economics and Business Administration
from the NHH Norwegian School of
Economics.
Schaug-Pettersen owns 400,000 shares
and holds 2,600,000 options in Salmon
Evolution (directly or indirectly through
Troha Invest AS).
Ingjarl Skarvøy, COO
Ingjarl Skarvøy is one of our founders
and served as our first CEO. He has
more than 30 years of experience
from the aquaculture sector,
including regional manager for
Salmar Farming, CEO of Salmar
Rauma and regional manager for Pan
Fish Norway.
Skarvøy owns 1,800,150 shares and
holds 750,000 share options in Salmon
Evolution (directly or indirectly through
Terra Mare AS).
Annual report 2022
Extending the ocean potential 14
Kamilla Mordal Holo, Chief Project Officer
Kamilla Mordal Holo has 16 years of
experience from the construction
sector, including the post of project
manager at the Norwegian Public
Roads Administration responsible for
the highway network in Møre og
Romsdal county. She has also been
project and construction manager at
engineering and consultancy
company 3S Project.
Mordal Holo has an MSc in civil and
environmental engineering from the
Norwegian University of Science and
Technology (NTNU).
Mordal Holo owns 160,060 shares and
holds 750,000 share options in Salmon
Evolution (directly or indirectly through
C10 Holding AS).
Odd Frode Roaldsnes, CCO & Head of Asia
Odd Frode Roaldsnes joined Salmon
Evolution in 2021 and brings extensive
experience from the salmon industry.
Prior to joining Salmon Evolution he
held the position as sales director and
partner at Ocean Supreme, a salmon
exporter based in Ålesund.
His background is within the areas of
management, business development
and downstream operations where he
has primarily been focusing on the
Asian markets the last 15 years.
Roaldsnes holds 750,000 share options
in Salmon Evolution.
Henriette Nordstrand, Technical Director
Henriette Nordstrand joined Salmon
Evolution in August 2022. She holds
valuable management experience
from the fish farming industry,
including planning for, construction
and running a new large-scale
hatchery plant.
Prior to joining Salmon Evolution she
served five years as Hatechery Plant
Manager in Hofseth Aqua AS.
Nordstrand has an MSc in
Aquamedisine from the University of
Bergen and holds the title Aqua
Medicine Biologist. She has also
studied recirculating aquaculture
systems (RAS) at the Norwegian
University of Science and Technology
(NTNU).
Annual report 2022
Extending the ocean potential 15
ESG IN SALMON EVOLUTION
Salmon Evolution is a salmon farming company
focused on transferring the best preconditions
offered by the sea to farm fish on land. Our
hybrid flow-through system (HFS) technology
secures a truly sustainable process with
controlled and optimal growth conditions while
limiting operational and biological risk.
We are committed to ensure that we are a
responsible business and that we are sustainable
in our operations and in everything we do. This is
enshrined in our vision:
“EXTENDING THE
OCEAN POTENTIAL”
We build sustainability and social responsibility
into the core of our business. Our commitment is
integrated into every part of Salmon Evolution’s
business model and implemented through our
ethical guidelines. It is our firm belief that
responsible and sustainable business behaviour
contributes to better environmental, social,
organisational, and financial results.
Salmon Evolution has a high potential to
produce what the market demands: a fresh,
healthy, and sustainable premium product. With
the use of the HFS technology, we farm our
salmon in a closed system with minimal impact
on the environment, whilst providing the best
conditions for optimal fish welfare.
We have created a truly sustainable approach
to producing the world’s best and healthiest
protein.
ESG Reporting
This is our third annual report published and the
second annual report with explicit
Environmental, Social, and Governance (ESG)
factors included. Our report is created with
reference to the Global Reporting Initiative (GRI)
Standards.
We have committed to establish plans for ESG
monitoring to allow for comprehensive ESG
reporting. We are consistently striving to gather
and transparently present our information at the
highest level of quality possible, with principles
of:
▪ Accuracy
▪ Balance
▪ Comprehension
▪ Timing
▪ Reliability
For our 2022 report, we are not able to include
any comparative information from previous
years or reporting periods due to our limited
operations.
Going forward, we will present our information in
a manner that is comparative on a year-by-year
basis for our operations, to track our progress
and ensure accountability to our goals.
Annual report 2022
Extending the ocean potential 16
Stakeholders and Material Topics
The Company started the process by
conducting a materiality assessment to map
and determine our sustainability priority areas.
We began by identifying our most important
stakeholders (see page 38) as well as their
primary areas of interest related to
environmental, social, and governance factors.
We then examined these areas to learn where
our potential impacts were. From this process,
we established benchmarks for how we should
identify and manage our sustainability risks and
opportunities. It also gave us clarity on how we
should provide our stakeholders with material
disclosures through our ESG reporting.
The materiality assessment was conducted
through discussions with internal employees who
are in regular contact with our key stakeholders.
It was carried out in accordance with GRI
Standards and the Guidelines to Issuers for ESG
Reporting by Oslo Stock Exchange (Euronext).
To ensure the necessary independence and
integrity of the process, this assessment was
conducted by a third-party organisation.
Our materiality assessment resulted in the
following material topics being defined as
priority areas:
ENVIRONMENT AND TECHNOLOGY
• Greenhouse gas (GHG) emissions
• Energy usage
• Circular economy
• Biodiversity and nature
FISH AND WATER
• Fish health and welfare
• Sustainable food production
• Product certification and traceability*
*addressed in the Governance chapter
PEOPLE AND SOCIETY
• Employee health and safety
• Local jobs, cooperation, and value creation
• Regulatory compliance
• Responsible supply chain
Annual report 2022
Extending the ocean potential 17
Governance and ESG
Corporate responsibility is an integrated part of
Salmon Evolution’s business practices. We
strongly believe that we have a responsibility for
the people, communities, and environment
affected by our business. This is woven into our
core values as a company, which are to be
responsible, competent, and innovative.
It is the duty of the CEO to ensure that Salmon
Evolution always operates according to these
core values. The CEO must also ensure
compliance with legislation and follow up on
Salmon Evolution’s governing documents.
OUR CORE VALUES: RESPONSIBLE, COMPETENT, INNOVATIVE
The Board of Directors shall ensure that Salmon
Evolution has sound internal control and systems
for risk management. They shall also supervise
Salmon Evolution’s management and general
activities. This includes ensuring compliance to
company core values, ethical guidelines, and
guidelines for corporate social responsibility.
Our governing codes, policies, and procedures
ensure that all our employees carry out their
activities in an ethical manner, in accordance
with current legislation and Salmon Evolution
standards.
An overview of ESG topics covered by our
governance system is presented here:
• Fish health and fish welfare policy
• Waste management policy*
• HSEQ policy
• Supplier code of conduct
• Code of conduct
• Corporate governance policy
• Corporate social responsibility policy
• Anti-corruption compliance procedure
*work in progress
Environment
There is a growing need for sustainably farmed
salmon. The Food and Agriculture Organization
(FAO) of the UN predicts that the world
population will reach 9.7 billion by 2050. The
demand for food is set to increase by 50% and
meeting this demand will require a significant
increase in protein production.
Seafood is quickly becoming an important
contributor to meeting this demand. However, a
growing demand for seafood will increase the
Protein
production facts
1
Carbon footprint
(kg CO
2
/40g
edible meat)
0.60
0.88
1.30
5.92
Feed conversion
ratio
1.2-1.5
1.7-2.0
2.7-5.0
6.0-10.0
Edible yield
68 %
46 %
52 %
No data
Water
consumption
(litres/kg)
2,000
4,300
6,000
15,400
Annual report 2022
Extending the ocean potential 18
pressure on already over-exploited wild fish
stocks and ocean resources. To alleviate this
pressure, aquaculture, including salmon
farming, is required to efficiently manage and
maintain both wild fish stocks and the ocean’s
natural biodiversity.
Salmon are amongst the most efficient protein
sources to produce. The feed conversion ratio
(FCR) for salmon, or the amount of feed an
animal needs to gain one kilogram of body
weight, is well below other common protein
sources.
Salmon has a high harvest yield in percentage
(after inedible parts are removed) compared to
other farmed animals. This is shown in Table 1. In
the future when more data is available, Salmon
Evolution intends to measure the efficiency on
the production and believe that land-based
salmon should be competitive.
The global increase in food demand, combined
with stronger preferences for healthy and
sustainably produced proteins, has led to a high
growth in demand for salmon over the last few
decades.
This increase has mainly been met by a
continuous expansion within conventional
aquaculture. However, numerous challenges
inhibit sustainable future growth for fish farming:
▪ CLIMATE CHANGE: DUE TO THE LONG-HAUL TRANSPORT AND DISTRIBUTION OF FISH, THE CO
2
FOOTPRINT FOR SEA-
BASED SALMON FARMING IS HIGH.
OUR RESPONSE: EXPANDING OPERATIONS CLOSER TO MARKETS, STARTING WITH OUR FACILITY IN SOUTH KOREA
▪ POLLUTION AND WASTE: THE NATURE OF CONVENTIONAL SALMON NET PENS CREATES ISSUES WITH THE DISCHARGE
OF UNTREATED WASTE AND POLLUTION, AS WELL AS DISEASES AND PARASITES INTO COASTAL WATERS.
OUR RESPONSE: MINIMIZING POLLUTION AND TREATING WATER AND WASTE
▪ BIODIVERSITY AND NATURE: ESCAPES IN SEA-BASED SALMON FARMING ARE EXPENSIVE AND POTENTIALLY
DAMAGING TO LOCAL WILDLIFE.
OUR RESPONSE: ELIMINATING THE RISK OF ESCAPE AND PROTECTING OCEAN BIODIVERSITY
▪ FISH HEALTH: DISEASES, PARASITES, AND SEA LICE ARE WIDESPREAD IN CONVENTIONAL SALMON
FARMING, CAUSING CONSIDERABLE DAMAGE COMMERCIALLY. IN ADDITION, MORTALITY AND LOSSES IN
PRODUCTION ARE A CHALLENGE FOR SEA-BASED SALMON FARMERS.
OUR RESPONSE: THROUGH OUR TECHNOLOGY, WATER INTAKE IS FILTERED AND UV-TREATED, AND SEPARATED
BIOLOGICAL ZONES REDUCE OPPORTUNITY FOR CROSS-CONTAMINATION
▪ FISH WELFARE: CLIMATE VARIABILITY AND INCREASING WATER TEMPERATURES CAN CAUSE STRESS AND REDUCE FISH
HEALTH AND WELFARE.
OUR RESPONSE: BY CONTROLLING WATER TEMPERATURE AND BY CONTINUOUS MONITORING, WE ENSURE GREATER
FISH WELFARE
New methods and technologies for addressing
biological and environmental challenges are
continually being developed, including a shift to
more land-based farming practices. Land-
based farming addresses a broad range of
these industry challenges and represents a
viable solution for sustainably expanding the
ocean’s essential resources.
Annual report 2022
Extending the ocean potential 19
Research and development are thus central to
our value chain and help create efficient
operations, drive innovation, and create
improvements that ensure future sustainability.
Our research is based on co-operation with
several research communities and promotes
knowledge transfer between internal and
external stakeholders.
Our Commitment
Our vision is to become a globally leading
producer of land-based Atlantic salmon by
ensuring sustainability and extending the ocean
potential. We aim to encourage the inclusive
and prosperous development of the
aquaculture industry, within a stable and
resilient earth system.
To achieve this, we commit to promoting a
culture where sustainability and profitability
reinforce each other. We build sustainability into
our core operations and through the use of the
HFS technology, we transfer the best
preconditions offered by the sea to the farming
of fish on land.
Through our business strategy, we are
committed to the external environment and to
setting a high standard for fish health and fish
welfare. Our objective is to monitor and reduce
the environmental impact of our business, to
ensure we produce a premium salmon product
with a low environmental footprint.
We therefore place an emphasis on three key
environmental areas:
1) climate change impacts
2) circular economy, pollution, and waste
3) biodiversity and nature
By reusing water, we optimise energy
consumption related to pumping and heating,
which reduces our CO
2
footprint. By filtering and
treating wastewater, we reuse more marine
resources. Fish sludge is also collected and
recycled, contributing to a circular economy. By
having a closed farming system, we also
minimize the risk of escapes and thus the
potential harm to local biodiversity and nature.
Photo: Salmon Evolution
Our environmental efforts should never
compromise the health of our fish or our product
quality. We therefore also focus on:
1) fish health and welfare
2) sustainable inputs and outputs
3) product certification and traceability*
*addressed in the Governance chapter
By using fresh seawater from the coast, we
create optimal farming and environmental
conditions for our fish, which result in better
growth and a shorter production time. This
enables a sustainable production process, with
controlled and optimal growth conditions while
limiting operational and biological risk.
Annual report 2022
Extending the ocean potential 20
Each of our choices is weighed against
alternatives to ensure that we carry out our
operations responsibly. Sustainability and fish
welfare are at the core of our vision as well as
our actions as a firm. They are essential to the
identity of Salmon Evolution and we commit to
carry this forward as our operations grow and as
we expand globally.
Environment and Technology
Climate Change Impact
Salmon Evolution’s hybrid flow-through system
(HFS) technology ensures rich access to fresh
filtered seawater. At Indre Harøy, the seawater
intake is based on two intake pipes at 25 meters
and 95 meters, respectively, enabling us to tap
into water at ideal temperatures.
By combining supplies of clean and fresh
seawater with reuse, we minimise overall energy
consumption for pumping and heating of
seawater in the facility.
Our energy plant has a very high output in
relation to the energy used.
Estimated data for Phase 1- full run rate:
• Electricity usage (mWh): 53,000
• Electricity usage (kWh/kg biomass (LW)): 5.8
• 100 % renewable energy
The HFS technology reuses ~65% of the water,
while the remaining ~35% is fresh seawater. This
ratio is our “sweet spot”, balancing cost and
operational risk while ensuring maximum
production output.
Higher reusage levels require more filtration and
water treatment which again implies higher
complexity and risk. On the other hand, a lower
level of reusage will lead to significantly higher
energy costs in connection with pumping and
heating of water.
In 2021, we entered into a 100% green power
supply agreement with Statkraft, Europe's
largest generator of renewable energy. Statkraft
is fully owned by the Norwegian government
and is Norway's largest supplier of electricity to
power-intensive industries.
The agreement ensures further reduction of
environmental impact. The CEO of Salmon
Evolution, Mr. Trond Håkon Schaug-Pettersen,
sees this as a very positive step forward:
“As our company now have started
commercial operations, our customers can be
100% certain that our salmon is produced with
the lowest possible environmental footprint,
setting a new benchmark for sustainably
produced salmon.”
Through the agreement with Statkraft, Salmon
Evolution will be guaranteed 100% renewable
energy for our land-based salmon farming
facility at Indre Harøy. It secures the vast majority
of our electricity needs through 2023 at an
attractive and fixed price. Furthermore, the
electricity will be sourced nearby, from
Statkraft's hydropower plant at Grytten in
Rauma Municipality, only ~60 km from Indre
Harøy.
Annual report 2022
Extending the ocean potential 21
In addition to this agreement, we have pursued
other partnerships (see page 32) and ventures.
In particular, we have begun a joint venture in
South Korea, called K-Smart Farming. This land-
based salmon farming facility places the HFS
technology and Salmon Evolution’s unique
competence closer to markets, serving as a
lower-CO
2
alternative to long-haul transport and
distribution.
Photo: Salmon Evolution
Key Points – Climate Change Impacts
▪ Salmon is already a lower environmental
impact protein, but through the HFS
technology, we further reduce our climate
impacts.
▪ We have a high performance and high
output in relation to our energy
consumption.
▪ Through our agreement with Statkraft,
Salmon Evolution will be guaranteed 100%
renewable energy through 2023.
▪ The South Korea land-based facility places
operations much closer to the market,
allowing us to reduce our CO
2
footprint for
long-haul transport and distribution.
The energy efficient system at Indre Harøy has
also secured Salmon Evolution a grant of up to
NOK 96.8 million from Enova. Enova is owned by
the Norwegian Ministry of Climate and
Environment and functions to promote the
environmentally friendly production and
consumption of energy. This grant will allow us to
use even more resources to reduce greenhouse
gas emissions, to develop energy-saving and
climate-friendly technology, and to strengthen
the security of the Norwegian food supply.
Circular Economy, Pollution, and Waste
The HFS technology is built to take in and reuse
large quantities of clean and fresh seawater
from the ocean. We are able to create an ideal
balance, where we use water with the same
high quality as traditional Norwegian cage-
based farming, but where we also have
sufficient space and access to the necessary
resources for large-scale production on land.
This provides us the opportunity to commit to a
truly sustainable production as well as to
promote a circular economy.
We plan to achieve this through collecting,
treating, and filtering feed residue and
wastewater. These are then transported to a
recirculation plant where they are converted
into short-travelled fertilizer, biogas, or similar.
Annual report 2022
Extending the ocean potential 22
In addition to the ~65% of water being reused
through the HFS technology, we also reuse the
fish sludge as input for biogas or natural fertilizers.
We are also conducting research for future
usage areas.
For the handling of waste from Phase 1 at Indre
Harøy, we are currently working with Blue
Ocean Technology. Through this partnership, we
aim to continue our efforts to make the reuse of
these resources into viable alternatives.
Key Points - Circular Economy, Pollution, & Waste
▪ ~65% of water is reused.
▪ Wastewater and feed residue are collected, treated, and filtered.
▪ We are continuing research and development to ensure the responsible reuse and recirculation of
wastewater, residues, and sludge.
By reusing and treating wastewater, and
reusing water and sludge, we minimise our
environmental footprint. Through our research,
we aim to contribute to a circular economy by
making these reuse solutions into feasible
practices in the future.
Biodiversity and Nature
Our core business is about preserving and
reusing marine resources and minimizing our
environmental impact. The HFS technology
operates in a land-based and enclosed system,
which means that through greater production
control, there is a close to zero risk of the salmon
escaping from the farm.
We are committed to minimize negative impact
to the local environment. In the coming year,
we therefore commit to developing a plan for
monitoring local biodiversity and nature to
ensure we achieve this important goal.
Key Points – Biodiversity & Nature
▪ Our closed system ensures minimal escape risk.
▪ Over the next year we will develop plans for monitoring local biodiversity and nature.
Annual report 2022
Extending the ocean potential 23
Fish and Water
Fish Health and Welfare
At Salmon Evolution, we believe that biology is
key to ensure responsible practices in the
aquaculture industry and ensuring fish health
and welfare. We understand fish welfare as:
▪ freedom from hunger, thirst, and malnutrition
▪ freedom from extreme cold and heat
▪ freedom from injuries and illnesses
▪ freedom from anxiety, stress, and fear
▪ freedom to practice normal behaviour
To ensure fish welfare, we focus on the following:
▪ access to fresh seawater and good nutrition
▪ access to optimal conditions, including
space for protection and rest
▪ preventing and/or quickly diagnosing and
treating injuries and illnesses
▪ providing sufficient area and excellent
facilities aimed at recreating a living space
for fish that is similar to their natural
environment
▪ ensuring good conditions and treatment so
that fish avoid mental or physical suffering
The HFS technology and the arrangement of our
facility enable us to define each tank as an
isolated biological zone. This means that water
in one tank never mixes with water in another
tank. Such an arrangement gives us full control
of water parameters and the production
environment and allows us to ensure biosecurity.
Any potential biological outbreaks in one tank
will never impact or contaminate the fish
swimming in another tank.
To ensure excellent biosecurity in our operations,
we have implemented a quality assurance
system with dedicated personnel responsible for
compliance and the training of staff. Our
training program includes promoting general
biosecurity knowledge and awareness,
including the development of skills and the use
of measures specifically relevant for Salmon
Evolution’s facility.
To ensure optimal biological and growth
conditions in the fish tanks, oxygen and CO
2
levels are constantly monitored and adjusted.
The HFS technology engages in CO
2
stripping
and oxygenation to guarantee ideal
environmental conditions for our fish.
Estimated data for Phase 1- full run rate:
• Mortality 3-5 %
• Density as measured in kg/m3:
o Minimum: 7 kg/m3
o Maximum: 85 kg/m3
• Oxygen consumption (kg / tonnes biomass
growth (LW)): 0.55
By drawing seawater from depths of 25 and 95
meters, the HFS water intake is further filtered
and treated with ultraviolet (UV) rays to
eliminate parasites, sea lice, viruses, infection,
and additional particles. Filtering and
disinfecting intake water creates an infection-
free environment, reducing the risk of illness, and
ensuring a rich flow of fresh and clean seawater
into the tanks.
By optimizing water quality parameters with
ideal and stable temperatures, we can reduce
the time to harvesting for each generation from
approximately 16 to 11 months. This increased
growth creates the basis for greater production
efficiency and optimal utilization of our licensed
volume.
Annual report 2022
Extending the ocean potential 24
Finally, our operations reduce the handling of
fish, which create better growth conditions. It
provides better opportunities for optimal
feeding and reduces loss and stress during the
production cycle.
Key Points – Fish Health & Welfare
▪ The HFS technology allows us to create a stable climate, which is less stressful for our fish.
▪ We ensure biosecurity through separate tanks and distinct biological zones.
▪ Filtered seawater further minimises the risk of bacterial and viral pathogens; minimises risk of parasites;
and limits threats of infection.
▪ We engage in minimal handling of our fish.
Photo: Salmon Evolution
By maintaining control over the production
environment and stable water parameters, we
generate conditions for increased growth and a
shorter time to harvest. Our approach ensures
better fish health and well-being, including
reduced mortality and losses in production.
Annual report 2022
Extending the ocean potential 25
Sustainable Inputs and Outputs
At full run rate in phase 1, we estimate a harvest
volume of approximately 7,900 tonnes (HOG, or
head on gutted), with a strong focus on
optimising our sustainable inputs while reducing
negative impacts for our outputs for this volume.
Our most dominating inputs consist of seawater,
power, feed, smolt, and oxygen.
In 2021, Salmon Evolution entered into a
strategic feed partnership with Cargill. Salmon
Evolution will serve as their global flagship
customer for land-based full grow out
production. Under the agreement, Cargill will
supply 100% of Salmon Evolution's feed volumes
for the Indre Harøy facility.
Cargill has further committed to allocate
significant resources and R&D capacity with the
ambition to develop sustainable feed solutions
tailored to our operational targets: securing high
biological performance and premium product
quality.
As part of the agreement Salmon Evolution
carried out a private placement towards Cargill
of USD 5 million.
When asked about the importance of the
partnership with Cargill, the CEO of Salmon
Evolution stated:
“Having the best possible feed is essential for every salmon farmer. Particularly, in our HFS system
where we create optimal and stable living conditions for the salmon, we see a strong and untapped
potential in tailoring a feed focused on maximizing biological performance and product quality.”
Estimated data for Phase 1- full run rate:
• 100 % local seawater intake
• 9,300 tonnes of feed, corresponding to
GHG emissions of 14,500 tons CO2 eq.
excluding land use change (GW_E_LUC)
and 18,100 tons CO
2
eq. including land use
change (GW_I_LUC).
Another important input is smolt. In August 2021,
Salmon Evolution acquired 100% of the shares in
Kraft Laks AS (now Salmon Evolution Dale AS), a
family-owned smolt producer located in
Dalsfjorden in Volda municipality, Norway. The
Company has a documented track record as a
high quality smolt producer and has been
producing smolt since 1995.
One of the major advantages with Salmon
Evolution Dale is its excellent freshwater supply.
Salmon Evolution Dale has access to clean
freshwater from the surrounding mountains and
is guaranteed a consistent supply of freshwater
from the local power station.
This freshwater access enables Salmon Evolution
Dale to utilize a similar production technology as
Salmon Evolution uses at its grow-out facility, a
hybrid flow-through system (HFS) with reuse of
water, CO
2
stripping and oxygenation- making it
a perfect fit for Salmon Evolution.
Having a fully inhouse smolt production gives
Salmon Evolution full operational control over a
critical part of the value chain. It secures that
Salmon Evolution is fully supplied with smolt for
Phase 1 at Indre Harøy.
In addition to feed and smolt, another essential
input is oxygen, which is supplied by Nippon
Gases. We share many of the same values,
making this an ideal partnership. During our
selection process, one of the most important
factors was the focus Nippon Gases has on
Annual report 2022
Extending the ocean potential 26
sustainability. Their efforts have led EcoVadis to
awarding them a Gold Medal, and they are
ranked in the top 5% for their sector.
By prioritizing responsible suppliers, we are able
to ensure that we use sustainable inputs, leading
us to create a truly healthy and sustainable final
product.
Social
Salmon Evolution is committed to responsible
business practices. We take seriously our duty to
promote human rights and ensure labour
standards, equality, and non-discrimination in
our workforce.
We are determined to be a safe and stimulating
place to work. We also aim to limit any negative
impacts our operations may have on society as
much as possible. Through our concentrated
investments, we have seen an important ripple
effect that has led to positive impacts in local
communities.
To ensure we track our efforts and impacts, and
act responsibly, we have several policies and
plans in place regarding health and safety,
working environment, stakeholder
engagement, and the respectful use of local
areas. As we move forward, we will continue to
monitor and improve these efforts in a holistic
way.
Employee Well-Being,
Health & Safety
Safe and Secure Workplaces
We strive for the highest levels of safety in
working conditions. Our suppliers and partners
must all operate according to responsible
labour standards. Going forward, we
encourage contractors and other partners with
operational activities to be certified according
to the ISO 45001, the standard for a safe and
healthy working environment.
In 2022, there were zero lost time injuries (LTI),
zero total recordable injuries (TRI), zero
accidents, and zero fatal accidents reported
amongst Salmon Evolution employees. In total,
there were zero cases of sick leave under 16
days, and two case over 16 days. Two male
employees took their entitled parental leave
and returned. In addition, one male and one
female started their entitled parental leave, and
have not returned by the end the year.
Amongst contract workers, there were 5 LTI, 9
TRI, and zero fatal accidents. There were zero
fatal accidents amongst third parties.
In 2022 the workload at the construction site at
Indre Harøy has been high, and naturally it has
been many workers at site. Along with high
activity and many workers, the complexity is also
at a level that requires a lot from both the
contractors and the workers. To ensure safe
working conditions and reduce the risk of
accidents, we have established a close
dialogue with contractors and workers, as well
as developed safety routines. We maintain a
strong focus on security and sense of
responsibility for our employees. We strive to
consistently provide a controlled and safe
project progression regardless of the complexity
or difficulty of the task.
To ensure this, we have a Health, Safety &
Environment (HSE) manager on site to train our
Annual report 2022
Extending the ocean potential 27
workers, conduct preventive HSE tasks, and to
investigate any instances of potential violations
or incidents. An introduction to HSE and training
are provided to everyone new to the workplace
and Salmon Evolution offers HSE and first aid
courses to all its employees.
In addition to the HSE manager, Salmon
Evolution has appointed a safety representative
and chief safety representative. All HSE work is
documented in our third-party system, Interaxo,
through the filing of non-conformance reports,
the documentation of investigations, and any
additional follow-ups necessary.
The quality manager prepares procedures for
work tasks that everyone is obliged to familiarize
themselves with. Procedures for operations are
assessed for risk and hazards prior to initiation.
Salmon Evolution has an Occupation Safety
Agreement with Medi3.
In 2021, we established a process for our
employees to receive regular performance and
career development reviews which have been
extended and improved throughout 2022.
We are in the process of taking the "pulse" of the
organisation through flexible surveys through
Simployer, our HRM system. These are user-
friendly surveys stored in Simployer which will be
used as a basis for strategic decisions in
connection with organisational change.
Salmon Evolution has high ambitions for
employee development in the company.
Target and development interviews are
conducted annually in Q1 and Q4, respectively.
We have invested in a separate module in the
HRM system, which simplifies the
implementation and follow-up of the interviews.
The module is implemented throughout 2022
and the first talks will be conducted in 2023.
Salmon Evolution aims to be an excellent and
stimulating place to work, where employees are
given the opportunity to use their skills and
abilities to contribute both to the company’s
and their own progress. Employees receive
systematic training focusing on developing skills
tailored to individual needs and capabilities.
We are also committed to the employee well-
being outside of working hours. That is why we
have established a corporate sports team for
promoting activities and health after hours. In
2023, we will look for new initiatives to promote
worker health and well-being both during and
after work hours.
Annual report 2022
Extending the ocean potential 28
Diversity and Equal Opportunity
Salmon Evolution shall be an inclusive working
environment. We have zero-tolerance for
harassment or discrimination, both of which are
addressed in our Code of Conduct and
Personnel Handbook.
Discrimination based on ethnic background,
nationality, language, gender, sexual identity, or
religious faith shall not occur. In 2022, there were
zero cases of discrimination or harassment
reported. We are committed to promoting
equal opportunities and fair treatment of all
employees.
We have a wage gender ratio of 89 % (99% in
2021), excluding management and
apprentices. The average base salary in 2022
was NOK 710,000 for our female employees
compared to NOK 799,900 for our male
employees.
The ratio for management was 62 % (89% in
2021) and the average base salary was NOK
1,735,800.
First harvest successfully completed (November 2022)
Photo: Salmon Evolution
Annual report 2022
Extending the ocean potential 29
Our Employees
At the end of 2022, Salmon Evolution had 60
employees, all 100% employed. We had a
turnover rate of 8%.
We support the principles of freedom of
association and collective bargaining
agreements. All employees at Salmon Evolution
may freely join any labour union of their choice
and we strive to sustain a good relationship with
employees and unions.
In 2022, all employees of Salmon Evolution were
Norwegian. We had 13 employees over 50
years old, 34 employees between the ages of
30-49, and 13 employees under 30 years old. There were 18 women and 42 men employed in 2022.
Our Executive Management group consisted of three men and two women.
We are continuously focusing on diversity and gender balance. The gender balance in Salmon
Evolution as of 31.12.2022 was better than the average in the Industry Sector in Norway, which in 2021
was 79% men and 21% women according to Directorate of Fisheries.
Responsible Supply Chain
Our suppliers are important contributors to the
success of our business. We believe that
transparent and frequent communication with
both our customers and suppliers is vital for our
success. We work closely with our suppliers and
customers to minimise negative impact from our
supply chain and we will continue to develop
partnerships focusing on sustainability.
Suppliers that are in breach of our basic
standards for ethics and corporate social
responsibilities can be disqualified for new
tenders. However, if they do not comply with our
standards, we first aim to work with the supplier
to bring about improvements. If the supplier still
does not comply, the supplier relationship can
be terminated.
Salmon Evolution suppliers shall have standards for ethics and corporate social responsibility that
follow the UN Global Compact principles. This shall apply to all suppliers as well as partnerships and
employees.
22 %
56 %
22 %
Age
Under 30
Between 30-50
Over 50:
30 %
70 %
Gender
Women Men
Annual report 2022
Extending the ocean potential 30
Stakeholder and Local Engagement
Local Value Creation
Given that our land-based facility is located on
Indre Harøy in Hustadvika municipality, Norway,
we decided in 2019 to move our head office
from Molde municipality to Elnesvågen,
Hustadvika. The physical relocation was done
during the first two months of 2022.
For the first phase of construction, our total
investment on Indre Harøy will be approx. NOK
1.6 billion. From this, we have seen a major ripple
effect for both the Møre og Romsdal region and
Hustadvika municipality, in the form of large
contracts to local suppliers. This has led to
comprehensive investments in their own
companies.
For example, food services are provided by
local companies, many of whom have seen
record growth, which has led to further
investments in the municipality. Other
investments our local suppliers have made
include office premises and associated
infrastructure, which have directly contributed
to further local contracts and increased
employment opportunities.
In total, Indre Harøy has employed around 200
workers daily through these contracts. Many of
the contractors are also temporarily housed at
local hotels while working at the construction
site. The communities we impact, from the
municipality to local inhabitants, have reacted
positively to these developments.
Stakeholder Engagement
Dialogue and engagement with our
stakeholders help us understand what is
expected of us, what is most important to our
stakeholders, how they are impacted by our
operations, and how we can work together in
solving common challenges.
In 2021, we reviewed our stakeholders and
identified seven groups that we have the
possibility to impact or be impacted by. These
are listed below:
Throughout 2022 we have been in regular
contact with our employees, the local
community and municipality, our customers,
and our suppliers and service providers as part
of our daily operations. Quarterly reports and
presentations, and the latest relevant news from
our company, are presented on our website.
Over the next year, we commit to have a
continued focus on creating arenas for
systematic and open dialogue with these
groups to understand our impacts. We are
committed to being a responsible business
through interacting with our stakeholders in both
an ethical and transparent manner.
Annual report 2022
Extending the ocean potential 31
Respectful Use of Land
The site of our land-based facility was originally
a disused quarry. After over 30 years of
operation, the quarry was emptied, and has
remained vacant since. Because the land was
left in this state, there was a very limited need for
intrusive activities in the nature to complete the
construction of our facility for farming salmon.
Converting the disused quarry has provided an
opportunity for us to engage in value-creating
activities in an area where there were limited
opportunities for this. We made great efforts to
create an optimal balance between
generating value for local people and
communities, while severely limiting land-
conversion and our impact on the environment.
Going Forward
Salmon Evolution will continue to prioritise local
suppliers for our contracts. We will develop good
relationships with local communities through
creating an open dialogue and expanding our
engagement efforts. We believe that our
operations should have as little negative impact
as possible, and as we grow, we will develop
new ways to monitor and assess our efforts.
Governance
At Salmon Evolution, we believe that the
foundation of good governance is built through
strong and transparent relationships with our
internal and external stakeholders. Our current
governing principles and procedures help
establish the basis of these relationships.
Our principles include rules of procedure for the
Board of Directors (the Board), instructions for
the chief executive officer, regulations on the
division of roles and responsibilities between the
Board and the CEO, our investor relations policy,
and manuals for the handling and disclosure of
insider information.
As a Norwegian public limited liability company
listed on Oslo Stock Exchange, Salmon Evolution
bases its corporate governance structure on
Norwegian legislation and recommended
guidelines.
Our Code of Conduct includes the main
principles for ethical business conduct at
Salmon Evolution, and detailed guidelines for
anti-corruption, conflicts of interests, and
whistleblowing routines. Our Code of Conduct
applies to all employees, contract workers,
Board members, and all other persons acting on
behalf of the company.
Our governance documents and practices are
subject to regular review by the Board to ensure
compliance and effectiveness.
Our approach to corporate governance places
a high priority on building and maintaining trust
and confidence in the company to ensure long-
term value creation in the best interest of both
our shareholders and stakeholders.
Annual report 2022
Extending the ocean potential 32
Organisation and Governing Systems
Organisation and Ownership
Salmon Evolution ASA is a Norwegian public
limited liability company and has four
subsidiaries.
Salmon Evolution Norway AS is the owner and
operator of our facility at Indre Harøy and where
most of our employees are employed. Salmon
Evolution International AS is the holding
company for our interests in North America and
our South Korean joint venture and K Smart
Farming is the joint venture between Salmon
Evolution and the South Korean seafood firm
Dongwon Industries. Salmon Evolution Dale AS is
producing smolt and will be the main supplier of
smolt to our facility at Indre Harøy. Salmon
Evolution Sales AS is our sales company.
Salmon
Evolution ASA
Salmon Evolution
Norway AS (100%)
Salmon Evolution
International AS (100%)
K Smart Farming
49%
Salmon Evolution North
America (100%)
Salmon Evolution Dale
AS (100%)
Salmon Evolution Sales
AS (100%)
Annual report 2022
Extending the ocean potential 33
Board of Directors report
Introduction/summary
The Board of Directors is responsible for the
overall management of Salmon Evolution and
may exercise all the powers on our behalf. In
accordance with Norwegian law (Norwegian
Public Limited Liability Act), the Board of
Directors is responsible for, among other things,
supervising the general and day-to-day
management of our business; ensuring proper
organisation, preparing plans and budgets for
our activities; ensuring that our activities,
accounts, and asset management are subject
to adequate controls. They also undertake
investigations necessary to ensure compliance
with these duties.
The Board of Directors may delegate such
matters to the Executive Management of
Salmon Evolution. The Executive Management is
responsible for ensuring that day-to-day
operations are in accordance with instructions
set out by the Board of Directors.
Among other responsibilities, our CEO is
responsible for keeping the accounts at Salmon
Evolution in accordance with existing
Norwegian legislation and regulations, and for
managing the Salmon Evolution’s assets in a
responsible manner.
At least once a month, our CEO must brief the
Board of Directors about Salmon Evolution’s
activities, financial position, and financial results.
This board of directors report outlines the main
framework regarding the Group’s corporate
social responsibility and corporate governance.
For further information please refer to the ESG
section of this report (page 15-32).
Board of directors – roles and CV’s
Regional and international entrenchment and industry-based expertise characterise our directors.
Their common denominator and driving force are a belief in farming salmon sustainably on land,
based on the board’s overall expertise and the choice of the right technology.
Tore Tønseth, Chairman of the board
Investment vice president at Ronja
Capital and has worked in the financial
market for more than 15 years. Earlier
appointments include share analyst in
both Sparebank 1 Markets and Pareto
Securities, with seafood, technology and
industry as special fields.
He was responsible for seafood analyses
at SpareBank 1 Markets
from 2013 to 2019. At the same time, he
was in frequent demand as a speaker in Norway on seafood, finance and
sustainability. Tønseth also has a
background from various technology
start-ups, where he has been both
product manager and system
developer.
Tønseth has an MSc in economics and
administration from the Norwegian
School of Economics (NHH),
specialising in finance and
econometrics. Ronja Capital is our
largest shareholder.
Annual report 2022
Extending the ocean potential 34
Peder Stette, Board Member
Peder Stette has been in the fishing and
aquaculture industry for the last 25 years.
From 1994 he developed Peter Stette AS
to be an important supplier of technical
solutions to the industry before merging
with Optimar in 2014. Optimar was later
sold to Haniel in 2017, and Peder had the
position as CTO and later CCO in
Optimar until 2021. He is now the CEO of
Stette Holding, a family investment
company.
Peder Stette holds the position as
director of Ably Medical, Invisible
Connections, Biaton, NSP Aid and
others. For the coming years he will use
his knowledge and experience to build
values in the companies the Stette
family is invested in.
Anne Breiby, Board Member
Anne Breiby holds a Cans scient degree in
fisheries biology from the University of
Tromsø and experience as aquaculture
coordinator for the director of fisheries in
Nordland county, organisation secretary for
the Norwegian Fish Farmers Association,
political adviser in the Ministry of Fisheries
and state secretary (junior minister) in the
Ministry of Trade and Industry.
Over the past 20 years, Breiby has
been self-employed with boardroom
work as her main activity.
She has board experience from inter
alia Ulstein Group ASA, Rem Offshore
ASA, Folketrygdfondet, Norges
Sjømatråd AS and Sparebanken Møre.
She is currently chair of Tafjord Kraft As
and Åkerblå.
Ingvild Vartdal, Board Member
Ingvild Vartdal has a law degree and long
experience as a corporate lawyer, and is
currently a lawyer and partner in Adviso
Advokatfirma AS. She specializes in
corporate and international tax and has
extensive experience from these areas in
industries like fishing, shipping and finance.
She has previously worked as a lawyer and
partner in Advokatfirmaet Schjødt AS, in
KPMG Law, and as a legal consultant
at Bærum tax office. Vartdal has also
been a member of the law committee
for tax law.
Vartdal holds several directorships and
has experience from business
management in both private and
listed companies.
Annual report 2022
Extending the ocean potential 35
Glen Allan Bradley, Board Member
Glen Bradley is chair of Rofisk AS, which
owns Rostein AS. The latter is one of the
world’s leading well boat owners and ranks
among our substantial shareholders.
He has the equivalent of a BSc in
economics, strategy and international
marketing, and more than 20 years of
experience in the salmon industry. He
is currently deputy CEO of Rostein AS.
As a director and shareholder, Bradley
wants to use his experience and big
commitment to the salmon industry to
help us become an important
company, both for the region and for
our owners.
Eunhong Min, Board Member
Eunhong Min is the CEO of Dongwon
Indutries, one of Korea’s leading seafood
companies. He is bringing a broad
international experience to the Board.
Prior to joining Dongwon, Mr. Min worked 27
years for Proctor & Gamble and held
various leading positions
within the fields of strategy,
business development and
sales.
Janne-Grethe Strand Aasnæs, Board Member
Janne-Grethe Strand Aasnæs is the CEO
and majority owner of Strand Havfiske AS,
an Ålesund based fishing vessel company
mainly engaged in whitefish and pelagic
business.
She has prior to that been engaged in the
financial industry as a financial
analyst/portfolio manager and manager of
client relations within asset
management. She holds an MBA and
is a Certified financial analyst (AFA).
Janne-Grethe holds several
directorships in both the private and
public sector and has a long
experience in managing and
developing companies.
Annual report 2022
Extending the ocean potential 36
Håkon Andre Berg, Board Member
Håkon André Berg has a solid
background in management of
strategy and business development.
He has a MSc in finance from the
Norwegian School of Economics and
served as CEO and CFO in Salmon
Evolution from 2019 till 2022.
Berg has 15 years of extensive
industrial and financial experience
from various private-equity-related
companies. Prior to Salmon Evolution
he held positions as partner in the
private equity companies Broodstock
Capital Partners and Midvestor
Management. He has also served as
associate at Argentum Private Equity
and analyst at Bridgehead Corporate
Finance.
Important events in 2022
Annual report 2022
Extending the ocean potential 37
Corporate social responsibility
Salmon Evolution is committed to responsible
business practices with respect to human rights,
labour standards, equality and non-
discrimination, social matters, the external
environment, and anti-corruption. The Group
shall comply with the UN Global Compact
principles and OECD guidelines for multinational
companies.
The Group has developed a Code of Conduct
including guidelines for ethical behaviour, anti-
corruption, integrity and conflicts of interest,
corporate responsibility and whistleblowing. The
Code of Conduct applies to all employees,
contract workers, board members and other
persons acting on behalf of the company. The
Code of Conduct is available from the
company’s website www.salmonevolution.no.
For further information about our corporate
social responsibility activities, please see the ESG
section of this report.
In addition, the Group will release a report
covering the requirements of the Transparency
act (Åpenhetsloven) by the end of June 2023.
The report will be made available on the
company web page.
Environment
Salmon Evolution’s ambition and aim are an
inclusive and prosperous development of the
aquaculture industry within a stable and resilient
earth system. The company’s business strategy
and objective are to be a leader in producing
and selling salmon with lower environmental
footprint.
Salmon Evolution strives to reduce the
environmental impact of its business. By having
a closed system, the company eliminates the risk
of escapes. Further, energy consumption
relating to pumping and heating of water is
reduced through reusage of water while at the
same time not compromising on fish welfare.
Also, the wastewater is filtered, sludge collected
and recycled and hence contributing to a
circular economy.
The company’s sustainability strategy is further
described in separate section under Company
description.
Working environment
Salmon Evolution aims to be a good, stimulating
place to work, where employees are given the
opportunity to use their skills and abilities to
contribute both the company’s and their own
progress. Employees shall receive systematic
training and Salmon Evolution can contribute to
develop skills on individual basis.
All employees in Salmon Evolution shall enjoy a
high level of safety in their work. Salmon
Evolution aim for all suppliers and partners to
operate to responsible labour standards, and
the company encourage contractors and other
partners with operational activities to be
certified according to the ISO standard for the
working environment and safety. The company
continuously collaborate with suppliers to make
improvements.
There were no injuries or accidents reported or
investigated amongst Salmon Evolution
employees in 2022.
Total sick leave for the company in 2022 was
0.8%.
Annual report 2022
Extending the ocean potential 38
Diversity and equal opportunity
Salmon Evolution shall have an inclusive working
environment. Discrimination or harassment
based on ethnic background, nationality,
language, gender, sexual identity or religious
faith shall not occur. No cases of discrimination
or harassment were reported or investigated in
2022.
The company shall promote equal opportunities
and fair treatment of all employees.
At the end of 2022, Salmon Evolution had 60
employees, of whom 18 women. This is better
than gender balance in The Industry Sector in
Norway, which in 2021 was 79% men and 21%
women according to the Directorate of
Fisheries. The executive management group
consists of 4 men and 2 women. The board
consists of 5 men and 3 women.
Employees of Salmon Evolution may freely join
any labour union of their choice. Salmon
Evolution shall work to sustain a good
relationship with employees and unions.
Anti-corruption and anti-bribery
Salmon Evolution’s anti-corruption policy and
anti-bribery policy are developed in
compliance with the U.S. Foreign Corrupt
Practices Act, the U.K Bribery Act and other
applicable anti-corruption laws, and states that
Salmon Evolution will not engage in, or otherwise
tolerate, any form of bribery or corruption in the
business dealings of any member of the Salmon
Evolution group. No corruption or bribery cases
were reported or investigated in 2022.
Whistleblowing
Salmon Evolution wishes to sustain open
communication about responsible and ethical
conduct at Salmon Evolution. We have set out
guidelines for giving notice of breaches of the
law, rules, ethical guidelines, and other
unacceptable circumstances. Employees are
encouraged to follow the procedures
contained in the whistle-blowing guidelines.
Product Certifications and Traceability
With stable growth conditions and high
biological input from roe to harvest-ready fish,
we meet the highest quality standards- as well
as the market’s requirements for high and
uniform harvest weight. We aim to always have
full control of the biomass. Modern monitoring
systems track the fish and their welfare indicators
at individual level, which allows us to sort and
register the fish effectively.
A land-based farm is protected from many of
the challenges faced in the sea. This is
combined with the best possible fish health,
optimal water quality, and high-quality
sustainable feed to give our customers first-class
salmon. To make sure we deliver on our
promises, we focus on two programs to be
certified within.
First, we are certified according to the Global
G.A.P. Aquaculture standard. The standard
covers the entire production chain from brood
stock, seedlings and feed suppliers to farming,
harvesting and processing. The program ensures
Good Agricultural Practices.
Second, the Company is now working to
towards the Aquaculture Stewardship Council
(ASC), an organisation that establishes strict
protocols for labelling farmed seafood through
sustainable aquaculture, to get the
certifications.
Our aim is to have;
A sustainable food chain with traceability from roe to plate
These programs set strict requirements for
responsible farming, which encourage seafood
producers to track and minimise the
environmental and social impacts of their
business. The standards addressed in these
schemes cover the production process from roe
stage to fish slaughter.
Through these two certifications, we commit
ourselves to transparency in our operations and
to safeguarding and documenting traceability
and food safety.
Corporate governance
Salmon Evolution depends upon good relations with its stakeholders to succeed. Good corporate
governance is important to build and maintain trust and confidence in the company and to ensure
long-term value creation in the best interest of the Company’s shareholders.
Corporate governance principles and practices
Current principles and procedures include rules
of procedure for the board of directors,
instruction for the chief executive officer,
regulating the division of roles and
responsibilities between the board and the CEO,
investor relations policy and manuals for
handling and disclosing insider information.
The Board has also adopted a Code of Conduct
including guidelines for anti-corruption, conflicts
of interests and whistleblowing routines,
stipulating the main principles for ethical
business conduct applying to all employees,
contract workers, board members and other
persons acting on behalf of the company.
The company’s governance documents and
practices will be subject to annual reviews and
discussions by the board of directors.
Risk management and internal control are given
high priority by the board of directors ensuring
that adequate systems for risk management
and internal control are in place. The control
system consists of independent areas which
include risk management, control environment,
control activities, information and
communication and monitoring. The board of
directors shall conduct an annual organisational
risk review in order to identify real and potential
risk that have and/or can occurred.
Shares and Negotiability, Equal Treatment of Shareholders, and Transactions with Close
Associates
Salmon Evolution has one class of shares,
carrying equal voting rights. There are no
restrictions on owning, trading, or voting for
shares in Salmon Evolution’s Articles of
Association.
In April 2022, Salmon Evolution made a private
placement where the pre-emptive rights of
Annual report 2022
Extending the ocean potential 40
shareholders were set aside. The reason for this
action was provided in the stock exchange
release in connection the placement.
Any transactions in own shares will be carried
out either through Oslo Stock Exchange or
otherwise at prevailing market prices. If there is
limited liquidity in our shares, we will consider
other ways to ensure equal treatment of all
shareholders.
For major transactions between Salmon
Evolution, our shareholders, subsidiaries,
members of the board, leading employees or
other close related parties, an evaluation will be
performed by an independent third party and
treated by the general meeting.
Transactions with Related Parties
During the ordinary course of business, the
Group engages in certain transactions with
related parties. The following is a summary of
related party transactions carried out in the
period:
The Company has a consultancy agreement
with Peder Stette (board member) and Frode
Kjølås (chair nomination committee) relating to
assistance in certain projects on an ad-hoc
basis.
The Group has during 2022 purchased legal
services from Adviso Advokatfirma AS in the
amount of NOK 206,000 in its ordinary course of
business. Board member Ingvild Vartdal is a
partner at Adviso Advokatfirma AS but has not
had any role in the services rendered to Salmon
Evolution.
In Addition, the Company have purchased well
boat services from Rostein AS in the amount of
NOK 1.7 million. Rofisk AS owns Rostein AS (100%),
and board member Glen Allan Bradley is the
chair of the Board in Rofisk AS.
There were no other material transactions with
related parties during 2022.
For information on transaction with close
associates, see Note 23 in the annual accounts.
Board of Directors, Nominations and Committee, and Board Authorisations
On 18 March 2021, Salmon Evolution held an
extraordinary general meeting (EGM). The
purpose was to approve the conversion into a
public limited liability company, appoint new
board members, establish a nomination
committee, and grant an authorization to the
Board of Directors to issue the shares in the 11
March 2021 private placement and the
issuance of shares in connection with a
subsequent offering.
In connection with these changes, new Articles
of Association were adopted. The Articles of
Association stipulate that the Board of Directors
shall include five to nine directors. The Board of
Directors and the chair are elected by the
general meeting pursuant to the general
meeting’s further decision. As of 31 December
2022, the following directors were represented
on the Board:
Name
Role
Elected
until
Independent of
management and
material business
associates?
(yes/no)
Independent
of major
shareholder?
(yes/no)
Board
meeting
attendance
2022
Comment
Tore Tønseth
Chair
2024
Yes
Yes
15/15
Associated
with Ronja
Capital II AS
Anne Breiby
Director
2023
Yes
Yes
15/15
Glen Allan
Bradley
Director
2023
Yes
Yes
15/15
Associated
with Rofisk AS,
Salmoserve AS
and Ocean
Industries AS
Peder Stette
Director
2023
Yes
Yes
14/15
Associated
with Stette
Invest AS
Håkon Andre
Berg*
Director
2024
Yes
Yes
1/1
Associated
with Carried
Away AS
Janne-Grethe
Strand Aasnæs
Director
2024
Yes
Yes
15/15
Associated
with Nikaro AS
Ingvild Vartal
Director
2024
Yes
Yes
15/15
Eunhong Min**
Director
2024
No
Yes
2/4
Associated
with Dongwon
Industries
*Elected from October 2022
**Elected from June 2022
The composition of the Board is based on
representation of Salmon Evolution’s
shareholders, as well as the company’s need for
competence, experience, capacity, and ability
to form balanced decisions.
It was further resolved at the EGM that Salmon
Evolution shall have a nomination committee.
The Nomination Committee will be responsible
for proposing candidates to the Board and the
Nomination Committee, and remuneration to
the members of these bodies.
The Nomination Committee was elected at the
ordinary general meeting in 2021. This was also
when the Instruction for the Nomination
Committee entered into force.
The Company has entered into a board of
directors and officers liability insurance policy.
The insurance covers defence costs, legal
representation expenses and losses arising from
claims for the company’s board of directors and
officers. The insurance policy has an aggregate
limit of liability of NOK 100 million.
Compensation approach
Salmon Evolution does not currently have a
remuneration committee as this is not
considered necessary in the light of the
composition of the Board of Directors.
Remuneration of the board is decided by
Salmon Evolution’s general meeting, and
reflects the board’s responsibility, expertise, time
commitment and the complexity of Salmon
Evolution’s activities. Note 9 of the financial
statement provides details of all elements of the
remuneration and benefits for each member of
the board. The remuneration is not linked to the
Company’s performance.
Annual report 2022
Extending the ocean potential 42
Remuneration of the Executive Management is
decided by the board in accordance with the
Norwegian Public Limited Liability Companies
Act. The board has the responsibility to ensure
convergence of the financial interest of the
Executive Management and the stakeholders.
The board aims to ensure that performance-
related remuneration of the Executive
Management in the form of share options,
annual bonus programs or the like, if used, are
linked to value creation for shareholders or
Salmon Evolution’s earnings performance over
time. Note 9 of the financial statement provide
details of all elements of the remuneration and
benefits for each member of the Executive
Management.
Compliance
As a Norwegian public limited liability company
listed on Oslo Stock exchange, Salmon Evolution
bases its corporate governance structure on
Norwegian legislation and recommended
guidelines.
The Company is subject to The Norwegian
Corporate Governance Board’s (NUES)
recommendation on corporate governance.
Salmon Evolution complies with the current
Code of Practice for Corporate Governance,
published 14 October 2021, with the following
exceptions:
General Meeting:
• The general meeting is chaired by the
chairman of the board of directors or an
individual appointed by the chairman of the
board of directors. Having the chairman of
the board of directors or a person appointed
by him chairing the general meetings
simplifies the preparations for the general
meetings significantly. In the Company’s
experience, its procedures for the
chairmanship and execution of general
meetings have proven satisfactory.
• The shareholders are invited to vote on the
composition of the board of directors
proposed by the nomination committee as a
group, and not on each board member
separately, as it is important to the Group that
the board of directors of the Company works
in the best possible manner as a team and
that the background and competence of
the board members complement each
other.
• The Company encourages shareholders to
attend the general meeting. It is also the
intention to have representatives of the
board of directors and the chairman of the
nomination committee to attend the general
meeting. The Company will, however,
normally not have the entire board attend
the meeting as this is considered
unnecessary. This represents a deviation from
the Code of Practice which states that
arrangements shall be made to ensure
participation by all directors.
The work of the Board of Directors:
• The Company does not currently have a
remuneration committee as this is not
considered necessary in the light of the
composition of the board of directors. The
Company will however consider establishing
a remuneration committee going forward.
Takeovers:
• The Company does not have separate
guidelines on how to respond in the event of
a takeover bid. The Norwegian Code of
Practice recommends the adoption of such
guidelines.
In addition, the Group has focus on risk management and internal control systems and have
implemented routines to track which risks the organization is exposed to and what consequences
this could have.
Investor Relations Policy
Salmon Evolution’s Investor Relations Policy sets
the basic principles for our communication and
dialogue with capital markets participants,
including guidelines for contact with
shareholders outside general meetings. We are
committed to providing our shareholders with
accurate, clear, relevant, and complete
information on our performance and market
position.
Communication with stakeholders shall be
based on the principles of equal treatment and
transparency, and we aim to continually ensure
trust and stakeholder confidence. The
responsibility for Salmon Evolution’s investor
relations activities lies with our CFO. Salmon
Evolution provides quarterly reports in line with
Oslo Stock Exchange’s recommendations.
Presentations are given in connection with the
disclosure of the interim results to provide an
overview of operational and financial
developments. The presentations are open to
the public and made available through a
webcast. All information is provided in English
and distributed to our shareholders through Oslo
Stock Exchange’s news channel
www.newsweb.no and our website at:
https://salmonevolution.no/investor/reports/.
Inside a fish tank during smolt release (December 2022)
Photo: Salmon Evolution
Annual report 2022
Extending the ocean potential 44
Shareholder Information
Salmon Evolution was successfully listed on
Merkur Market (now Euronext Growth) on 18
September 2020. Further, the Company was
listed on Oslo Stock Exchange (Oslo Børs) 9 July
2021, the last day of trading of the shares on
Euronext Growth (Oslo) was 8 July 2021.
As per 31 December 2022 Ronja Capital II AS
was the Company’s largest shareholder with
27,393,242 shares, corresponding to 7.9% of the
total number of shares outstanding. The 20
largest shareholders held 56.9% of the shares in
the Company.
The closing price for the Company’s share was
NOK 8.27 per share as per 31 December, which
corresponded to a market capitalization of NOK
~2.9 billion.
20 largest shareholders 31 December 2022
Source: VPS, Company
Operational development
The Company has now been operating the
Indre Harøy facility for more than a year,
stocked five batches of smolt and fully
harvested out batch 1 with very strong results,
the latter being a major milestone for the
Company.
Total batch 1 harvest volume ended at ~340
tonnes HOG with an average weight of ~3.75 kg
HOG (~4.5 kg LW). The harvest was spread over
~1 month in 3 rounds from early November to
early December which gave an effective
production cycle of around 7-8 months since
stocking. The harvest also showed a very
homogeneous weight profile across the batch
with a very tight spread in weights, despite
batch 1 not being graded on size since stocking.
This is a clear indication of good feed distribution
within the fish tanks.
Furthermore, the last harvesting round saw
strong harvest weights with around 80% being
above 4 kg HOG and less than 2% below 3 kg
HOG. Total mortality for batch 1 ended at 5.8%
and 4.0% if excluding customary first 30 days in
grow out facility.
The harvest also confirmed strong product
quality, demonstrated by an industry leading
superior share of 96%. This contributed to an
average realized price for batch 1 of NOK 75/kg
and NOK 78/kg for Superior 3+ kg HOG,
representing a NOK ~3/kg premium to
corresponding Nasdaq prices.
The first harvest was sold to a selected mix of
customers, both in Norway and abroad and
across different segments and channels. Our
salmon has proven to be well suited for both
conventional cooking, raw consumption and
smoked and the feedback from customers has
been very positive. Over the coming months the
Company will continue to build on these
experiences and relationships ahead of the
planned increase in harvest volumes for the
remainder of 2023.
During the fourth quarter another important
milestone was reached when batch 2 was split
in two and simultaneously graded on size using
our highly automated fish logistics and
distribution system. This operation went
according to plan with minimal registered
mortality. In Q1 2023 batch 2 has been split and
graded one more time and now consists of four
fish groups with an average weight of around
3.5 kg with the largest group being around 3.7
kg as per 31 March 2023.
During the fourth quarter the Company also
released its third and fourth batch of smolt at
Indre Harøy. Batch 3 was stocked in late
October and comprised 200,000 smolt with an
average weight of around 220 grams. As per 31
March 2023 the fish had reached ~1,385 grams.
Batch 4 was stocked in early December and
comprised 265,000 smolt with an average
weight of around 260 grams, marking the
Company first “full size” smolt release. As per 31
March 2023 the group had reached an average
weight of ~970 grams.
In February 2023 another “full size” smolt release
was completed marking the Company’s fifth
smolt release. Going forward the Company
plans to stock “full size” batches of smolt at Indre
Harøy every second month.
The Company continues to increase biomass
production and the positive trend has
continued into 2023. As per 31 March the Group
had a total standing biomass of 1,472 tonnes of
which 69 tonnes at our smolt facility. This
represents a doubling compared to 31
December 2022.
The Company continues to see low mortality
levels, even as the density levels are increasing.
For batch 2 the accumulated mortality stood at
2.2% per 31 March 2023, clearly outperforming
the levels seen for batch 1. Mortality levels also
remain low for both batch 3, 4 and 5,
demonstrating the benefits of having a
controlled environment with minimal manual
handling of the salmon.
The Company highlights that operations are still
in an early stage and there is a continuous focus
on tuning the systems to optimize the biological
performance while at the same time reducing
risk to a minimum. Such modification work will
from time to time require pauses in feeding
which also should be taken into consideration
when evaluating the biological performance.
Salmon from first harvest (November 2022)
Photo: Salmon Evolution
Indre Harøy phase 1
The first two fish tanks together with the
connecting technical room as well as the water
intake station and other linked parts of the
facility was taken over by Salmon Evolution in
March 2022 upon which the first smolt was
released into the facility in late March 2022.
Furthermore in 2022, the construction work has
progressed according to plan, with new tanks
being taken over and put into operations
throughout the year. The last two tanks and its
connecting technical rooms was taken over
medio April. Hence, Indre Harøy phase 1 is now
fully completed.
Being fully completed allows for streamlining of
the production process with two “production
lines”, each consisting of 6 tanks and where fish
groups are regularity split and transferred to the
next departments allowing for stocking of new
batches in emptied tanks.
Indre Harøy Phase 1 (December 2022)
Photo: Salmon Evolution
Indre Harøy phase 2
During 2022, and especially during the second
half of 2022, the preparatory activities for phase
2 have continued with focus on implementing
learning effects from phase 1, identifying savings
and scaling effects from phase 1, defining a
cooperation model designed at further
optimizing the project management and
develop a cost budget for phase 2.
Salmon Evolution is seeing clear signs of
normalization in the construction market,
evidenced by an increasing level of availability
amongst various types of suppliers relevant for
phase 2.
Salmon Evolution has made no contractual
commitments as to phase 2, although the plan
Annual report 2022
Extending the ocean potential 48
is to commence phase 2 in continuation to the
completion of phase 1.
The Company has also completed the blasting
works for the water intake station for both phase
2 and phase 3. The process went according to
plan and gave valuable experience as to
conducting heavy construction works while at
the same time operating the phase 1 facility. The
Company has also completed some blasting
and excavation works for the fish tanks for phase
2 to verify that this would not negatively affect
the ongoing farming operations. This also went
according to plan with no negative biological
effects observed.
Phase 2 preparatory activities are moderate
from a financial perspective. Upon a final
investment decision, the Company intends to
structure the projects in a similar way as for
phase 1, with financing reservations for the
various subcontractors. Finally, when phase 2 is
formally initiated, the first 6-9 months are
relatively capex light.
Indre Harøy phase 2 illustration
Illustration: Salmon Evolution
As part of the phase 2 project Salmon Evolution
is also developing an expansion plan for our
smolt facility so that the facility can serve the
smolt needs for phase 2. This project is ongoing
but as it is interlinked with our Indre Harøy phase
2 project, no investment decision will be taken
before we formally decide to initiate phase 2
construction at Indre Harøy.
Annual report 2022
Extending the ocean potential 49
Phase 2 preparations – blasting work has started
Photo: Salmon Evolution
K-Smart Farming
Introduction to K Smart
The Company has a joint venture with the South
Korean seafood giant Dongwon Industries
where the plan is to develop, construct and
operate a 16,800 tonnes HOG land-based
salmon farming facility in South Korea, using
Salmon Evolution’s technology approach and
competence.
The joint venture is named K Smart Farming (“K
Smart”). The project will be completed in two
phases, with each phase aiming to achieve an
annual capacity of 8,400 tonnes HOG, 16,800
tonnes combined.
Under the terms of the Joint Venture agreement,
Dongwon Industries will facilitate 75% debt
financing for K-Smart’s phase 1 project.
The parties have identified a production site in
Yangyang on the northeast coastline of South
Korea, with solid data points on water quality
and temperatures. In addition, K Smart has also
acquired an existing smolt facility in Jeongseon
which will be upgraded and used for supplying
smolt to the grow out facility in Yangyang. The
acquired smolt facility has been producing
freshwater trout for many years.
Project status
During the second half of 2022 focus continued
to be centred around design and engineering
activities in cooperation with Billund
Aquaculture as design partner.
Salmon Evolution now have 4 FTEs based in
Korea and K Smart has established an
organization located in the Dongwon head
office in Seoul.
Significant progress has been made on the
design for the smolt facility where 90% design
review was completed during Q1 2023.
Design work for the grow-out facility in
Yangyang was intensified during the fourth
quarter with focus on implementing learning
effects from Indre Harøy alongside
incorporating required site-specific changes.
This design work will continue over the coming
quarters.
K Smart is also working actively with the
permitting processes and significant resources
have been devoted to document the
environmental effect of the project. Contrary to
Yangyang on-growing site
Jeongseon smolt site
Norway, land-based salmon farming is a new
industry in South Korea and regulatory processes
takes time, but the company is continuing to
experience strong support from both local,
regional and national stakeholders and expect
clarification on several key permits over the
coming months, allowing for construction start
of grow-out facility during 2023.
Illustration grow-out facility Yangyang
Illustration: Salmon Evolution
Annual report 2022
Extending the ocean potential 51
North America
Salmon Evolution has initiated a process with the
aim of expanding its farming operations into
North America and at the same time raising its
production capacity target to 100,000 tonnes
HOG by 2032.
Salmon Evolution continues to evaluate
selected identified potential production sites in
North America, both on the US and Canadian
side of the border. As part of the site verification
processes which include fatal flaws analyses of
both water, biological, technical and regulatory
aspects, the Company is currently in dialogue
with various stakeholders, both public and
private. The Company expects to use the next
quarters for such site selection and initial site
verifications.
It is expected that site verification and relevant
regulatory approval processes will take around
three years, allowing for construction start in
2025 or 2026, upon which the plan is to build a
full scale 31.5 tonnes HOG “Indre Harøy” facility
drawing on the experiences learned in both
Norway and Korea.
To facilitate this expansion, the Company has
established a dedicated team of both in-house
and external resources. Additionally, the
Company has incorporated a US corporate
structure under its full ownership.
The Company’s strategy of pursuing accretive
partnerships in overseas markets remains
unchanged. As the project develops, Salmon
Evolution aims to engage in partnership
structures leveraging the human capital in our
Group and maximizing shareholder value.
Events after balance sheet date
Signed agreement for new NOK 1,550 million green debt financing package
The Company has entered into a binding loan
agreement with DNB and Nordea for a new
green debt financing package totalling NOK
1,550 million relating to phase 1 and 2 at Indre
Harøy.
The new debt financing package consists of the
following facilities:
- NOK 525 million non-amortizing Term Loan
Facility which will refinance the Company’s
existing NOK 525 million construction loan
relating to phase 1 (the “Term Loan”)
- NOK 250 million RCF Capex Facility available
for general corporate purposes including Indre
Harøy phase 2 capex (the “RCF Facility”)
- NOK 775 million Construction Facility available
for financing of capex relating to phase 2 at
Indre Harøy (the “Construction Facility”)
Annual report 2022
Extending the ocean potential 52
Financial performance
Going concern
The consolidated financial statement is prepared in accordance with International Financial
Reporting Standards (IFRS). The Board confirms that it is appropriate to prepare the Annual Report
based on a going concern assumption. The Group believes it is adequately funded and has access
to additional capital if required.
Income statement
Total revenues for 2022 accumulates to NOK
47.7 million for the Group. The revenues are
directly related to both the sale of smolt from
Salmon Evolution Dale to an external client and
sale of salmon from Indre Harøy.
Personnel expenses as per 31 December 2022
sums up to NOK 50.0 million. For 2022
approximately 32% of the total personnel
expenses are capitalized and allocated to the
building project at Indre Harøy.
Other operating expenses totalled NOK 65.5
million, which is NOK 39.6 million higher than for
the same period last year. The increase reflects
the higher activity level in the Company,
continued operating expenses at Indre Harøy
and South Korea, the establishment in North
America and other administration expenses.
For 2022 the Company has made fair value
adjustments of the biomass of NOK 11.7 million
leaving an operating profit for the full year at
NOK -62.9 million.
Total depreciations were NOK 6.2 million and net
financials was positive with NOK 30.2 million,
including unrealized changes in value of both
interest rate swaps and the power supply
contract, in total NOK 25.5 million.
Loss before tax was NOK 32.7 million as per 31
December 2022.
Assets under construction are not depreciated.
Cash flow
Consolidated net cash flow from operating
activities was NOK -76.1 million in 2022
compared to NOK -66.7 million for the same
period last year.
Net cash flow from investment activities was
NOK -796.1 million in 2022, which is approx. at the
same level as in 2021 (NOK -754.6 million).
Cash flow from financing activities in 2022 was
NOK 645.5 million, which mainly consist of a
successful private placement in April in addition
to several drawdowns on the Construction
facility and overdraft facilities.
Total net cash flow for 2022 was NOK -226.8
million. The liquidity position at the end of the
period was strong, with cash and cash
equivalents of NOK 278.8 million and total
available liquidity of NOK 400 million including
committed undrawn credit facilities.
Annual report 2022
Extending the ocean potential 53
Financial position
The carrying amount of Salmon Evolution’s total
fixed assets as of 31 December 2022 was NOK
1,851 million, compared to NOK 1,079 million 31
December 2021. Fixed assets are mainly related
to the construction work at Indre Harøy,
comprising capitalized costs related to both
personnel expenses and construction cost, land
acquisition and Dale smolt facility as well other
smaller items.
Total equity amounted to NOK 1,564 million. With
total assets of NOK 2,306 million, this corresponds
to an equity ratio of 68%. Consolidated interest-
bearing liabilities totalled NOK 582 million.
In October 2020, Salmon Evolution was granted
NOK 14 million in funding from the Norwegian
tax incentive scheme Skattefunn. The incentive
scheme will be distributed over a three-year
period and is designed to stimulate research
and development (R&D).
Furthermore, in November 2020 the Company
was granted NOK 96.8 million in a funding
commitment from ENOVA. The commitment is a
cash grant, and the funding will not require any
material additional investment needs from
Salmon Evolution. The proceeds from this grant
is expected paid out in tranches over the course
of Indre Harøy Phase 1 development.
Both grants are recognized in the financial
accounts as a reduction of fixed assets. As of Q4
2022 the Company has recognized NOK 14.3
million in Skattefunn grants and NOK 96.8 million
in Enova grants of which NOK 9.5 million and
NOK 77.1 million have been received by 31
December 2022, respectively.
As per 31 December 2022 the Company had
bank debt of NOK 556 million, mainly relating to
the Construction Facility for Indre Harøy.
Annual report 2022
Extending the ocean potential 54
Risk exposure and risk management
Interest Rate
The Group's interest rate risk relates primarily to
borrowings from financial institutions with
variable interest rates. Currently, the Group has
entered into hedging programs to reduce this
risk for only parts of its planned borrowings, thus
the Group is exposed to changes in the interest
rate. As of 31 December 2022, outstanding loans
from credit institutions amounted to NOK 556
million (excluding financial leasing). The
Construction Facility which represents the vast
majority of the Groups loan with financial
institutions has an interest rate of NIBOR 3M plus
an agreed margin of 3.75%. In order to reduce
exposure to fluctuations in the interest rate the
Group has entered interest rate swap contracts
with Nordea and Sparebanken Vest, of
respectively NOK 150 million and NOK 50 million.
For further information see note 20.
Foreign Currency
The Group's foreign currency risk relates to the
Group's operating, investing, and financing
activities denominated in a foreign currency.
This includes the Group's revenues, expenses,
and capital expenditures. As per 31 December
2022 the Group had some currency forward
contracts made to hedge the effect of
fluctuations in currency relating to outstanding
invoices from sales contracts. Value changes in
forward contracts affect profit and loss.
The Group's presentation currency is Norwegian
Kroner ("NOK").
Credit risk
With respect to credit risk arising from the
financial assets of the Group, which comprise
cash and cash equivalents, and other
receivables, the Group's exposure to credit risk
arises from default of the counterparty, with a
maximum exposure equal to the carrying
amount of these instruments. The Group has
procedures to ensure that products are only sold
to customers with satisfactory creditworthiness,
where credit insurance is used when deemed
necessary. This risk is, per 31.12.2022, not
considered to be material.
In 2022 all produced fish was sold to Salmon
Evolution Sales AS, which in turn sold it to external
customers. The sales company secures the bulk
of its sales through credit insurance.
Liquidity risk
A lack of liquidity will entail a risk that the Group
will not be able to pay its obligations on maturity.
Management monitors rolling forecasts of the
Group's liquidity reserve (comprising cash and
cash equivalents) on the basis of expected cash
flows. The Group's business plan and growth
strategy is capital intensive and the Group may
be dependent upon future equity issues and/or
debt financing in order to finance its current
long-term plans.
Annual report 2022
Extending the ocean potential 55
Summary and outlook
2022 was a highly eventful year for Salmon
Evolution, starting with the batch 1 smolt
release in March as per the original timeline
and rounded off by fully harvesting out our first
batch with excellent results. Through this great
achievement the Company has
demonstrated that it is possible to produce
salmon on land, all the way to full harvest
weight, at an industrial scale, with strong
biological performance and with the end
result being an excellent quality product.
The Company has over the last year been
gradually ramping up production and a total
of five batches have been stocked at Indre
Harøy of which both the batch stocked in
December last year and February this year
being “full size” batches. Going forward the
Company plans to release smolt every second
month ensuring that the regularity in harvest
volumes will gradually increase over the
coming quarters.
Batch 2 is planned harvested during the
second quarter and from late Q3 2023 the
Company expects to reach steady state
production levels, yielding an annualized
production of 7,900 tons HOG from Indre Harøy
phase 1.
The Company is very satisfied with the
biological results seen in 2022 and see the
achieved results as a clear proof of concept
to our approach to land-based salmon
farming. Although taking a facility like this into
operation is a huge task that involve a lot of
learning and tuning in the beginning, the
biological performance has exceeded
expectations. Furthermore, the Company is
satisfied to see that the mortality levels have
been very low, with batch 2 well on track to
outperform the already strong result seen for
the first batch.
Batch 1 was harvested in three rounds from
early November to early December, after only
7-8 months of production. The salmon was
distributed worldwide to selected customers
and partners in different segments and
channels. The Company has received strong
feedback as to the product quality which was
also confirmed by an industry leading superior
share of 96% for batch 1 as a whole.
Furthermore, the harvest demonstrated that
our salmon is well suited for both conventional
cooking, raw consumption and smoked
production. This creates a lot of flexibility for our
downstream operations as we gradually
increase harvest volumes over the coming
quarters.
Total Norwegian exports of salmon during 2022
was about 1.44 mill. tons compared to 1.48 mill.
tons in 2021, a decrease of ~2.5%. Average
Fishpool salmon price in 2022 was NOK 83.2/kg
compared to NOK 58.3/kg in 2021, an increase
of 43% year on year. Such significant price
increase clearly demonstrates the strong
underlying demand for salmon. Going into
2023 prices have remained record strong and
forward prices for 2023 point to high prices also
this year.
For 2023 most analysts expect low single digit
global supply growth which should support a
scenario with strong salmon prices. With
Salmon Evolution now in the process of
ramping up production and gradually
increasing harvest volumes, the Company
should be in a good position to benefit from
this over the course of 2023.
Looking further ahead, the Company
continues to see a significant demand growth
potential for salmon and the Company
remains firm in its belief that land-based
farming will need to play an important role
alongside conventional farming for the
Annual report 2022
Extending the ocean potential 56
industry to be able utilize the demand
potential.
After more than one year of successful farming
operations and with phase 1 at Indre Harøy
now completed, the Company is in a unique
position to execute on its growth plan and
solidifying its position as the global leader
within land-based salmon farming.
Photo: Salmon Evolution
Annual report 2022
Extending the ocean potential 57
The Board of Directors of Salmon Evolution ASA
Elnesvågen/Ålesund 17 April 2023
Tore Tønseth
Chair
Janne-Grethe Strand Aasnæs
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Eunhong Min
Director
Ingvild Vartdal
Director
Håkon André Berg
Director
Trond Håkon Schaug-Pettersen
CEO
Annual report 2022
Extending the ocean potential 58
Statement from the Board of Directors and the CEO
Today, the Board of Directors and the Chief Executive Officer reviewed and approved the Board of
Director’s report and the consolidated financial statements for Salmon Evolution ASA, for the year
ended 31 December 2022.
the EU and applicable additional disclosure requirements in the Norwegian Accounting Act.
To the best of our knowledge:
1. The annual financial statements for 2022 have been prepared in accordance with
applicable financial reporting standards
2. The annual financial statements give a true and fair view of the assets, liabilities, financial
position and profit as a whole as of 31 December 2022 for the Group
3. The Board of Directors’ report for the Group includes a fair review of:
a. the development and performance of the business and the position of the Group,
and
b. the principal risks and uncertainties the Group face
The Board of Directors of Salmon Evolution ASA
Elnesvågen/Ålesund 17 April 2023
Tore Tønseth
Chair
Janne-Grethe Strand Aasnæs
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Eunhong Min
Director
Ingvild Vartdal
Director
Håkon André Berg
Director
Trond Håkon Schaug-Pettersen
CEO
Annual report 2022
Extending the ocean potential 59
Group consolidated financial statements (IFRS)
Consolidated statement of income
(NOK thousands)
Note
2022
Consolidated
2021
Consolidated
Sales revenues
5,7
Other income
5,7
Total operating revenue
Change in inventory
6,8
Cost of materials
8
(34 706 )
(3 710 )
Personnel expenses
4,9
(49 996 )
(21 067 )
Other operating expenses
9,10
(65 538 )
(25 894 )
Operational EBITDA
(68 481 )
(35 613 )
Depreciations
4
(6 190 )
(2 229 )
Operational EBIT
(74 671 )
(37 841 )
Fair value adjustment of biomass
6
Operating Profit (EBIT)
(62 931 )
(37 841 )
Financial income
11
Financial expense
11
(4 170 )
(7 335 )
Share of net income from associated companies
12
(947 )
(634 )
Net financial
Profit/loss before tax
(32 726 )
(32 957 )
Income tax expense
13
Profit/loss for the period
(32 726 )
(26 445 )
Basic earnings per share (NOK)
14
(0,10 )
(0,09 )
Diluted earnings per share (NOK)
14
(0,10 )
(0,09 )
Consolidated statement of comprehensive income
NOK thousands
Note
2022
Consolidated
2021
Consolidated
Profit/loss for the period
(32 726 )
(26 445 )
Items that are or may be reclassified to profit or loss:
Currency translation differences
12
(560 )
Total comprehensive income for the period, net of tax
(31 362 )
(27 005 )
Annual report 2022
Extending the ocean potential 60
Consolidated statement of financial position
(NOK thousands)
Note
31 Dec 2022
Consolidated
31 Dec 2021
Consolidated
Assets
Intangible assets
4
Deferred tax asset
13
Assets under construction
4,9,15
Property, plant & equipment
4
Right-of-use assets
4,16
Investments in associated companies
12
Total non-current assets
Inventory
6
Biological assets
6
Trade receivables
3
Other current receivables
15,17
Financial derivatives
3,18
Cash and cash equivalents
3,11,19
Total current assets
Total assets
Equity and liabilities
Share capital
20
Share premium
20
Other reserves
9,21
Other equity
Uncovered losses
(88 774 )
(57 411 )
Total equity
Long-term interest-bearing debt
3,11
Lease liabilities - long term
3,11,16
Other long-term liabilities
Total non-current liabilities
Short-term interest-bearing debt
3
Trade payables
3,23,24
Social security and other taxes
23
Lease liabilities - short term
4,11,16
Other short-term liabilities
23
Total current liabilities
Total liabilities
Total equity and liabilities
Annual report 2022
Extending the ocean potential 61
The Board of Directors of Salmon Evolution ASA
Elnesvågen/Ålesund 17 April 2023
Tore Tønseth
Chair
Janne-Grethe Strand Aasnæs
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Eunhong Min
Director
Ingvild Vartdal
Director
Håkon André Berg
Director
Trond Håkon Schaug-Pettersen
CEO
Annual report 2022
Extending the ocean potential 62
Consolidated statement of cash flow
(NOK thousands)
Note
2022
Consolidated
2021
Consolidated
Cash flows from operating activities
Profit/loss for the period
(32 726 )
(26 445 )
Adjustments for:
Depreciation
4
Net financials
11
(30 205 )
(4 884 )
Share based payment expenses
21
Gain on lease modification
16
Changes in working capital:
Change in trade receivables
23
(22 698 )
(382 )
Change in other current receivables
17
(29 217 )
Change in inventory and biological assets
6
(45 817 )
(1 702 )
Change in trade payables
(684 )
Change in social security and other taxes
(4 387 )
Change in other current liabilities
(2 929 )
Net cash (outflow) from operating activities
(76 124 )
(66 710 )
Cash flow from investment activities
Payments for fixed assets net of government grants
4,15
(763 498 )
(797 959 )
Payments for intangible assets
4
(3 614 )
(881 )
Acquisitions
(27 249 )
Change in trade payables investments
23
(29 020 )
Investment in associated companies
12,24
(26 779 )
Net cash (outflow) from investment activities
(796 132 )
(754 553 )
Cash flow from financing activities
Proceeds from issue of equity, net of paid transaction costs
20
Proceeds from new borrowings
3,11
Repayment of borrowings
3,11
(13 337 )
(40 800 )
Net change in right of use assets and liabilities
16
Financial expenses paid
(15 079 )
(11 980 )
Financial income received
Net cash (outflow) from financing activities
Net change in cash and cash equivalents
(226 785 )
(142 261 )
Cash and cash equivalents at the beginning of the period
19
Cash and cash equivalents at the end of the period
19
Annual report 2022
Extending the ocean potential 63
Consolidated statement of changes in equity
(NOK thousands)
Share
capital
Share
premium
Other
reserves
Other
equity
Uncovered
losses
Total equity
Balance at 1 January 2021 10 987 804 368 2 974 520 (30 407 ) 788 442
Profit/loss for the period - - - - (26 445 ) (26 445 )
Currency translation differences - - - - (560 ) (560 )
Total comprehensive income - - - - (27 005 ) (27 005 )
Capital increase 18 March 2021 4 167 495 833 - - - 500 000
Capital increase 18 March 2021, transaction costs
Company registration expenses - (6 ) - - - (6 )
Private placement, 18 August 2021 110 16 490 - - - 16 600
Private placement, 22 October 2021 277 42 447 - - - 42 724
Share options issued - - 1 624 - - 1 624
Share options exercised - - 520 (520 ) - -
Transactions with owners 4 553 529 914 2 144 (520 ) - 536 092
Balance at 31 December 2021 20 15 540 1 334 283 5 118 - (57 411 ) 1 297 530
Profit/loss for the period - - - - (32 726 ) (32 726 )
Currency translation differences - - - - 1 363 1 363
Total comprehensive income - - - - (31 362 ) (31 362 )
Private placement, 5 April 2022 1 129 202 041 - - - 203 170
Private placement, 2 May 2022 538 96 293 - - - 96 831
Private placement, transaction cost - (13 267 ) - - - (13 267 )
Share options issued - - 3 201 - - 3 201
Share options exercised 81 7 724 - - - 7 805
Transactions with owners 20 1 748 292 790 3 201 - - 297 739
Balance at 31 December 2022 20 17 288 1 627 073 8 320 - (88 774 ) 1 563 906
Annual report 2022
Extending the ocean potential 64
Annual report 2022
Extending the ocean potential 65
Annual report 2022
Extending the ocean potential 66
Annual report 2022
Extending the ocean potential 67
Annual report 2022
Extending the ocean potential 68
Current and change in deferred tax for the year
Annual report 2022
Extending the ocean potential 69
Annual report 2022
Extending the ocean potential 70
Annual report 2022
Extending the ocean potential 71
Annual report 2022
Extending the ocean potential 72
Annual report 2022
Extending the ocean potential 73
Annual report 2022
Extending the ocean potential 74
Annual report 2022
Extending the ocean potential 75
Annual report 2022
Extending the ocean potential 76
Annual report 2022
Extending the ocean potential 77
Annual report 2022
Extending the ocean potential 78
Annual report 2022
Extending the ocean potential 79
Annual report 2022
Extending the ocean potential 80
Annual report 2022
Extending the ocean potential 81
Annual report 2022
Extending the ocean potential 82
Annual report 2022
Extending the ocean potential 83
Annual report 2022
Extending the ocean potential 84
Annual report 2022
Extending the ocean potential 85
Annual report 2022
Extending the ocean potential 86
Annual report 2022
Extending the ocean potential 87
Annual report 2022
Extending the ocean potential 88
Annual report 2022
Extending the ocean potential 89
Annual report 2022
Extending the ocean potential 90
Annual report 2022
Extending the ocean potential 91
Annual report 2022
Extending the ocean potential 92
Annual report 2022
Extending the ocean potential 93
Annual report 2022
Extending the ocean potential 94
Annual report 2022
Extending the ocean potential 95
Annual report 2022
Extending the ocean potential 96
Annual report 2022
Extending the ocean potential 97
Annual report 2022
Extending the ocean potential 98
Annual report 2022
Extending the ocean potential 99
Annual report 2022
Extending the ocean potential 100
Annual report 2022
Extending the ocean potential 101
Annual report 2022
Extending the ocean potential 102
Parent company Financial Statement
Income Statement
(NOK thousands)
Note
2022
2021
Other income
3
15 215
9 874
Total operating income
15 215
9 874
Personnel expenses
4,5
(21 973)
(14 551)
Depreciation
6,7
(1 938)
(13)
Other operating expenses
4,8
(27 603)
(10 878)
Operating profit (EBIT)
(36 300)
(15 568)
Financial income
3
58 436
19 135
Financial expenses
3,9
(4 332)
(624)
Net financials
54 104
18 511
Profit/loss before tax
17 804
2 943
Income tax expense
10
486
4 719
Profit/loss for the period
18 290
7 662
Statement of Comprehensive Income
(NOK thousands)
Note
2022
2021
Profit/loss for the period
18 290
7 662
Annual report 2022
Extending the ocean potential 103
Statement of Financial Position
(NOK thousands)
Note
31 Dec 2022
31 Dec 2021
Assets
Intangible assets
6
2 564
0
Deferred tax asset
10
5 205
4 719
Property, plant & equipment
6
1 091
0
Right-of-use assets
6,7
9 841
216
Group non-current receivables
3
1 057 808
649 976
Investment in subsidiaries
11
359 197
356 778
Total non-current assets
1 435 705
1 011 689
Other current receivables
3
43 711
2 381
Cash and cash equivalents
12
254 610
355 403
Total current assets
298 321
357 783
Total assets
1 734 026
1 369 472
Equity and liabilities
Share capital
13
17 288
15 540
Share premium
13
1 605 894
1 313 104
Other reserves
5
7 540
4 338
Other equity
0
0
Retained earnings
26 202
7 912
Total equity
1 656 923
1 340 894
Long-term interest-bearing debt
9
12 500
12 352
Lease liabilities - long term
7
7 602
144
Total non-current liabilities
20 102
12 496
Short-term interest-bearing debt
9
43 174
12 352
Trade payables
14
5 415
569
Current liabilities to Group Companies
3
37
0
Lease liabilities - short term
7
2 390
73
Other current liabilities
14
5 984
3 087
Total current liabilities
57 001
16 082
Total liabilities
77 103
28 578
Total equity and liabilities
1 734 026
1 369 472
Annual report 2022
Extending the ocean potential 104
The Board of Directors of Salmon Evolution ASA
Elnesvågen/Ålesund 17 April 2023
Tore Tønseth
Chair
Janne-Grethe Strand Aasnæs
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Eunhong Min
Director
Ingvild Vartdal
Director
Håkon André Berg
Director
Trond Håkon Schaug-Pettersen
CEO
Annual report 2022
Extending the ocean potential 105
Statement of Cash Flow
(NOK thousands)
Note
2022
2021
Cash flow from operations
Profit before income taxes
17 804
2 943
Adjustments for:
Depreciation
6
1 938
0
Net financials
3
(53 078)
(18 511)
Share based payment expenses
4
3 201
1 135
Gain on lease modification
7
0
1
Changes in working capital:
0
0
Change in trade receivables
(2 797)
(2 304)
Change in other current receivables
(38 533)
112
Change in trade payables
4 846
(30)
Change in current liabilities to Group companies (exl. Group contribution)
3
37
(1 930)
Change in other current liabilities
3 602
3 087
Cash generated from operations
(62 980)
(15 497)
Cash flow from investment activities
Investment in Group Companies
11
(2 419)
(35 949)
Payments for intangible assets
6
(2 564)
0
Payments for fixed assets and other capitalizations
6
(1 193)
0
Dividend income from group companies
12 000
0
Net cash flow from investment activities
5 823
(35 949)
Cash flow from financing activities
Proceeds from issue of equity, net of paid transaction costs
6
294 538
517 874
Change in intercompany borrowings
3
(409 968)
(637 874)
Proceeds from new borrowings
9
42 833
0
Repayment of borrowings
9
(12 841)
Net change in right of use assets and liabilities
(1 685)
0
Interest paid
(1 924)
(429)
Interest received
45 410
7 033
Net cash flow from financing activities
(41 888)
(120 001)
Net change in cash and cash equivalents
(100 792)
(164 842)
Cash and cash equivalents at the beginning of the period
355 403
520 245
Cash and cash equivalents at the end of the period
254 610
355 403
Annual report 2022
Extending the ocean potential 106
Statement of Changes in Equity
Balance at 1 January 2021 10 987 783 183 251 2 714 797 134
Profit/loss for the period 0 0 7 662 0 7 662
Other comprehensive income 0 0 0 0 0
Total comprehensive income 0 0 7 662 0 7 662
Capital increase 18 March 2021 4 167 495 833 0 0 500 000
Capital increase 18 March 2021, transaction costs 0 (24 850) 0 0 (24 850)
Private placement, 18 August 2021 110 16 490 0 0 16 600
Private placement, 22 October 2021 277 42 447 0 0 42 724
Share options issued 0 0 0 1 624 1 624
Transactions with owners 4 553 529 920 0 1 624 536 098
Balance at 31 December 2021 13 15 540 1 313 104 7 912 4 338 1 340 894
Profit/loss for the period 0 0 18 290 0 18 290
Other comprehensive income 0 0 0 0 0
Total comprehensive income 0 0 18 290 0 18 290
Share options exercised 81 7 724 0 0 7 805
Private placement 5. April 2022 1 129 202 041 0 0 203 169
Private placement, 2. May 2022 538 96 293 0 0 96 831
Private placements, transaction costs 0 (13 267) 0 0 (13 267)
Share options issued 0 0 0 3 201 3 201
Transactions with owners 13 1 748 292 790 0 3 201 297 740
Balance at 31 December 2022 13 17 288 1 605 894 26 202 7 540 1 656 923
Total equity
(NOK thousands)
Share
capital
Share
premium
Retained
Earnings
Other
Reserves
Note
Annual report 2022
Extending the ocean potential 107
Note 1 Summary of significant accounting policies
General information
and listed on the Oslo Børs with the ticker symbol "SALME". Salmon Evolution ASA owns the following
subsidiaries (collectivelly "the Group" or "SE");
- Salmon Evolution Norway AS, headquartered and located in Molde, Norway
- Salmon Evolution International AS,
- Salmon Evolution Dale AS
- Salmon Evolution Sales AS
SE is building a land-based salmon farming facility at Indre Harøy, with a planned annual production
of 31,500 tons HOG fully developed of which phase 1 has a planned annual production of 7,900 tons
HOG.
The build-out consists of three phases, with the first phase consisting of 12 large grow out tanks with
corresponding infrastructure. SE will operate a hybrid flow-through (HFS) system, utilizing fresh
seawater from the Norwegian coast. Construction start of phase 1 was in Q2 2020 and was
completed mid April 2023. The first smolt batch was released at Indre Harøy late March 2022 as per
original timeline, and the Group completed its first harvest in November 2022.
Basis of preparation and accounting principles
The financial statements of the Company have been prepared in accordance with the Norwegian
Accounting Act § 3-9 and Finance Ministry’s prescribed regulations from 21 January 2008 on simplified
IFRS. Principally this means that recognition and measurement comply with the International
Accounting Standards (IFRS) and presentation and note disclosures are in accordance with the
Norwegian Accounting Act and generally accepted accounting principles. Any exceptions from
measurement and recognition according to IFRS is disclosed below.
Accounting period
The company was incorporated on 3 July 2020. The accounting period for the financial statements
are 1 January 2021 - 31 December 2022.
Going concern
The Company has adopted the going concern basis in preparing its financial statements. When
assessing this assumption, management has assessed all available information about the future. This
comprises information about net cash flows from existing customer contracts and other service
contracts, debt service and obligations. After making such assessments, management has a
reasonable expectation that the Company has adequate resources to continue its operational
existence for the foreseeable future.
Basis of measurement
The financial statements have been prepared under the historical cost basis, except for the following
items:
- Financial derivatives – measured at fair value through profit or loss.
Annual report 2022
Extending the ocean potential 108
Investments in subsidiaries
Investments in subsidiaries are valued at cost in the company accounts. The investment is valued as
cost of acquiring shares, providing they are not impaired. An impairment loss is recognised for the
amount by which the carrying amount of the subsidiary exceeds its recoverable amount. The
recoverable amount is the higher of fair value less cost to sell and value in use. The recoverable
amount of an investment in a subsidiary would normally be based on the present value of the
subsidiary's future cash flow.
Dividends and group contributions
The Company has applied simplifications in regard to the Directives specified by the Norwegian
Ministry of Finance on 21. of January 2008, related to accounting treatment of dividends and group
contributions: Dividends and group contributions will be treated in accordance with the Norwegian
Accounting Act and deviates from IAS 10 no. 12 and 13.
Classification of current and non-current items
Assets are classified as current when it it expected to be realized or sold, or to be used in the
Company's normal operating cycle, or falls due or is expected to be realized within 12 months after
the end of the reporting date. Assets that do not fall under this definition is classified as non-current.
Liabilities are classified as current when they are expected to be settled in the normal operating
cycle of the Company or are expected to be settled within 12 months after the reporting date, or if
the Company does not have an unconditional right to postpone settlement for at least 12 months
after the reporting date. Liabilities that do not fall under this definition are classified as non-current.
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave that are expected to be settled wholly within 12 months after the end of the period in
which the employees render the related service are recognised in respect of employees’ services up
to the end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the
balance sheet.
Share based payments
Information relating to the Company's employee option scheme is set out in note 5. The fair value of
options granted under the scheme is recognised as an employee benefits expense with a
corresponding increase in equity. The total amount to be expensed is determined by reference to
the fair value of the options granted:
- including any market performance conditions (eg the entity’s share price)
- excluding the impact of any service and non-market performance vesting conditions (eg
profitability, sales growth targets and remaining an employee of the entity over a specified time
period), and
- including the impact of any non-vesting conditions (eg the requirement for employees to save or
holdings shares for a specific period of time).
The total expense is recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each period, the entity revises its
estimates of the number of options that are expected to vest based on the non-market vesting and
Annual report 2022
Extending the ocean potential 109
service conditions. It recognizes the impact of the revision to original estimates, if any, in profit or loss,
with a corresponding adjustment to equity.
Pensions
The Group offers a defined contribution plan to its employees and pays contributions to publicly or
privately administered pension insurance plans on a mandatory, contractual, or voluntary basis. The
Group has no further payment obligations once the contributions have been paid. Contributions are
recognized as employee benefit expense when they are due and are included as part of salary and
personnel costs in the statement of profit and loss. Prepaid contributions are recognized as an asset
to the extent in which a cash refund or a reduction in the future payments is available.
Current and change in deferred tax for the year
Income Tax
The tax expense represents the sum of the tax currently payable and change in deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit
as reported in the income statement because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or
deductible. The Company’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred
tax assets are recognized to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilized. Such assets and liabilities are not recognized
if the temporary difference arises from the initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognized for taxable
temporary differences arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the temporary difference and
it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated with such investments and interests
are only recognized to the extent that it is probable that there will be sufficient taxable profits against
which to utilize the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset is realized based on tax laws and rates
that have been enacted or substantively enacted at the balance sheet date. Deferred tax is
charged or credited in the income statement, except when it relates to items charged or credited
in other comprehensive income, in which case the deferred tax is also dealt with in other
comprehensive income. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax
assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
Annual report 2022
Extending the ocean potential 110
against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Current tax and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are
recognized in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognized in other comprehensive income or directly in equity respectively.
Leases
All leasing agreements with a duration exceeding 12 months are capitalized. The Group assesses
whether a legally enforceable contract is or contains a lease at the inception date of the contract.
The assessment includes several criteria to be determined based on judgment that includes whether
there is an identifiable asset in connection to the lease, whether the Group has the right to control
the use of the identifiable asset, and whether the Group can obtain substantially all economic
benefits from the identifiable asset.
The Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease
commencement date. The lease liability is calculated based on the present value of the contractual
minimum lease payments using the incremental interest rate of the lease. The contractual minimum
lease payments consist of fixed payments based on contractual amount at the time of conclusion
of the agreement. The lease liability is subsequently measured at amortized cost under the effective
interest rate during the lease term and may also be adjusted to management’s reassessment of
future lease payments based on options exercised, renegotiations, or changes of an index rate.
The ROU asset is calculated based on the lease liability, plus initial direct costs towards the lease, and
less any incentives granted by the lessor. The ROU asset is subsequently amortized under the straight-
line method under the shorter of the lease term or the useful life of the underlying asset and is included
as part of depreciation and amortization in the accompanying statements of other comprehensive
income.
Leases that fall under the IFRS 16 short-term exception are recognized on a straight-line basis over
the lease term.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes
cash on hand and deposits held at call with financial institutions.
Trade and Other Receivables
Trade receivables are initially recognized at amortized cost, less a provision for expected credit losses.
Credit loss provisions are based on individual customer assessments over each reporting period and
not on a 12-month period.
Trade and other payables
Trade and other payables represent unpaid liabilities for goods and services provided to the
Company prior to the end of the financial year and are presented as current liabilities unless payment
is not due within 12 months after the reporting period. Trade and other payables are recognized
initially at their fair value and are subsequently measured at amortized cost using the effective
interest method.
Statement of cash flows
The accompanying statements of cash flows are prepared in accordance with the indirect method.
Annual report 2022
Extending the ocean potential 111
Note 2 Financial risk and capital management
The Company's financial assets and liabilities include trade and other receivables, trade and other
payables, cash, and borrowings necessary for its operations. The Company's risk management is
carried out by the Company's finance department. The Company is exposed to market risk, interest
rate risk, foreign currency risk, credit risk, and liquidity risk.
Market risk
Market risk is linked to both Interest Rate- and Currency fluctuations.
Interest Rate
The Company's interest rate risk relates primarily to borrowings from financial institutions with variable
interest rates. As of 31 December 2022 Salmon Evolution Norway AS, a subsidiary of Salmon Evolution
ASA, has outstanding loans from credit institutions amounted to NOK 556 million (excluding financial
leasing). The Construction Facility which represents the vast majority of the Company’s loan with
financial institutions has an interest rate of NIBOR 3M plus an agreed margin of 3.75%. In order to
reduce exposure to fluctuations in the interest rate Salmon Evolution Norway AS has entered interest
rate swap contracts with Nordea and Sparebanken Vest, of respectively NOK 150 million and NOK
50 million. Salmon Evolution ASA is guarantor for the loan.
The Construction Facility and the Term Loan Facility are partly guaranteed by Eksfin.
Foreign Currency
The Company's foreign currency risk relates to the Company's operating, investing, and financing
activities denominated in a foreign currency. This includes the Company's revenues, expenses and
capital expenditures. As 31 December 2022 the Company had not made any contracts.
The Company's presentation currency is Norwegian Kroner ("NOK").
Credit risk
With respect to credit risk arising from the financial assets of the Company, which comprise cash and
cash equivalents, and other receivables, the Company's exposure to credit risk arises from default of
the counterparty, with a maximum exposure equal to the carrying amount of these instruments. This
risk is not considered to be material.
Liquidity risk
A lack of liquidity will entail a risk that the Company will not be able to pay its obligations on maturity.
Management monitors rolling forecasts of the Company's liquidity reserve (comprising cash and cash
equivalents) on the basis of expected cash flows. The Company's business plan and growth strategy
is capital intensive and the Company may be dependent upon future equity issues and/or debt
financing in order to finance its current long-term plans.
Annual report 2022
Extending the ocean potential 112
Note 3 Intercompany balances and intercompany transactions
Investments in Salmon Evolution Norway AS and Salmon Evolution International AS is partly financed
with loan from Salmon Evolution ASA. The interest rate on these loans is set at a market interest rate
of 4 %.
Intercompany receivables to Salmon Evolution Norway AS are unsecured. The bank loans have
security in all material assets of Salmon Evolution Norway AS, including but not limited to land and
plant and machinery. Salmon Evolution ASA as parent company of the Group has also fully
guaranteed the Group's bank loans.
Carrying value of the investment property pledged as security is NOK 1,771 million.
Salmon Evolution ASA received 12MNOK as dividend from Salmon Evolution Dale in 2022.
Salmon Evolution ASA also requires an administration fee from Salmon Evolution Norway AS. This fee
covers administration, advice and development of the company, and is invoiced based om time
spent by the employees of the parent company in the various areas. Total amount in 2022 was 13.8
MNOK.
There were no other transactions with group companies and related parties in 2022.
(NOK thousands)
Non-current
receivables
Current
receivables
Non-current
liabilities
Current
liabilities
Salmon Evolution Norway AS 1 026 851 34 567 - 37
Salmon Evolution International AS 29 957 - - -
Salmon Evolution Dale AS - - - -
Salmon Evolution Sales AS 1 000
K Smart Farming Co., Ltd - - - -
Total intercompany balances 1 057 808 34 567 - 37
Intercompany and related party transactions:
(NOK thousands)
Revenue Interest
Salmon Evolution Norway AS 13 800 33 228
Salmon Evolution International AS - 1 185
Salmon Evolution Dale AS - -
Salmon Evolution Sales AS
K Smart Farming Co., Ltd 1 415 -
Total intercompany balances 15 215 34 412
Annual report 2022
Extending the ocean potential 113
Note 4 Personnel expenses, remuneration to the board and auditor's fee
Norwegian entities are obligated to establish a mandatory company pension. This obligation is
fulfilled under the current pension plan. No loans or guarantees have been given to the members of
the board of directors or executive management.
Personnel expenses, remuneration to executives and accrued liabilities to be paid in 2023
(NOK thousands) 2022 2021
Salaries 12 880 7 807
Social security 2 184 1 425
Pensions 512 83
Other benefits 1 894 16
Share-based payments 1 782 1 535
Director's fee (both paid in 2022 and liabilities to be paid 2023) 2 721 3 685
Gross personnel expenses 21 973 14 551
Number of full-time employment equivalents 9 2
Remuneration and compensation to members of the board
(NOK thousands) 2022 2021
Tore Tønseth (Chairman of the Board) 500 500
Kristofer Reiten (Member of the Board) 250 250
Glen Bradley (Member of the Board and audut committee) 375 250
Peder Stette (Member of the Board) 250 250
Anne Breiby (Member of the Board) 250 250
Yun Ki Yun (Member of the board) 250 208
Janne-Grethe A. Strand (Member of the board and leader of audit committee)
500 42
Ingvild Vartdal (Member of the Board) 250 42
Frode Kjølås (Nomination committee) 75 208
Berit Rogne (Nomination committee) 50
Total board of Directors 2 750 2 000
Remuneration and compensation to executive management 2022
(NOK thousands)
Salary Bonus Options Pension Other Total
Trond Håkon Schaug-Pettersen (CFO/CEO/Chairman) 2 228 - 1 399 67 246 3 940
Håkon Andrè Berg (CEO/Chairman until nov.2022) 2 722 - 20 67 208 3 017
Total executive management 4 950 - 1 419 134 454 6 957
Auditor's remuneration expensed in 2022
(NOK thousands) 2022 2021
Statutory audit 440 255
Service inrelation to tax return 8 0
Tax advise 0 0
Interim audit 0 97
Other services 0 116
Total 448 468
Annual report 2022
Extending the ocean potential 114
Note 5 Share based payments
From 2020 The Company had granted 1,625,000 options to Group employees. These options have
been granted at different points in time during the year, and key assumptions listed below are as
such averages of the different grants. Each option gives the holder the right to subscribe or purchase
shares in Salmon Evolution ASA at an average agreed exercise price of NOK 5.25. The options were
granted on 25 August 2020 and 28 September 2020 and has a 18 month maturity. The options can
be exercised at earliest, 12 months after the grant date. To account for this, an adjusted Black &
Scholes option-pricing model is used by applying a weighted expected average life of 15 months.
In addition, the Board of the directors on 26 August 2021 established a share option program for
members of the Group's executive management where total of 6,900,000 share options (adjusted to
7,650,000 22 November) have been granted. The options will be issued on an annual basis with 1/3
each year, with issue dates being 31 August 2021, 1 June 2022 and 1 June 2023. Issued options vest
50% after year one and 50% after year two. A total of 2,300,000 (2,550,000) share options were
granted at a strike price of NOK 9.00 per share, and a total of 4,600,000 (5,100,000) options were
granted at a strike price equal to the closing price of the Company's shares on Oslo Børs on the last
trading day prior to the respective future issue dates + 15%.
The fair value of the options is set on the grant date and is expensed over its lifetime. The fair value
of the options has been calculated using the adjusted Black & Scholes option-pricing model, which
takes into account the exercise price, the term of the option, the share price at the grant date,
expected price volatility of the underlying share, expected dividend and risk-free rates. Given the
recent listing and lack of historical price and volatility data, the expected volatility is based on
historical volatility for a selection of comparable companies listed on Oslo Stock Exchange ("Oslo
Børs"). The risk-free interest rate is set to equal the interest on Norwegian government bonds with the
same maturity as the option. Average key assumptions are listed below.
Outstanding options (in thousands)
2022 2021
Outstanding options 1 January 9 275 1 625
Options granted 0 7 650
Options exercised 1 625 0
Options forfeited 2 500 0
Outstanding options at end of period 5 150 9 275
(NOK thousands)
2022 2021
Håkon André Berg (CEO until october 2022) 20 609
Trond Håkon Schaug-Pettersen (CEO from oktober 2022 & CFO) 1 399 526
Ingjarl Skarvøy (COO) 600 224
Kamilla Mordal Holo (Project Director) 567 212
Odd Frode Roaldsnes (CCO) 615 53
Total
3 201 1 624
Charges to income statement, Salmon Evolution ASA 1 782 1 135
Charges to the shares in Salmon Evolution Norway AS 1 419 489
Annual report 2022
Extending the ocean potential 115
Note 6 Property, plant and equipment
Straight-line depreciation is applied over the useful life of property, plant, and equipment based on
the asset’s historical cost and estimated residual value at disposal. Depreciation is charged to
expense when the property, plant or equipment is ready for use or placed in service.
Capitalized development costs are related to building strategy and purchase of rights for sale and
development of own branding.
Key assumptions
2022 2021
Average fair value (NOK) 1,47 1,36
Average exercise price (NOK) 10,35 10,35
Weighted expected average life (in years) 2,33 2,33
Estimated dividend per share (NOK) 0 0
Expected average volatility 29,2 % 29,2 %
Risk-free rate 0,86 % 0,86 %
Group management have the following holdings
Holding 01.01 Awarded Exercised Forfeitet
Holding
31.12
Håkon André Berg (CEO) 3 450 - 450 2 500 500
Trond Håkon Schaug-Pettersen (CFO) 2 775 - 375 - 2 400
Ingjarl Skarvøy (COO) 850 - 100 - 750
Kamilla Mordal Holo (Project Director) 850 - 100 - 750
Odd Frode Roaldsnes (CCO) 750 - - - 750
Total 8 675 - 1 025 2 500 5 150
*Numbers in thousand
(figures in NOK 1000)
Intangible
assets
Fixtures and
fittings
Right-of-use
assets
Total
Cost 1 January 2022 0 0 216 216
Additions 2 564 1 193 11 466 15 223
Disposals
Cost 31 December 2022 2 564 1 193 11 682 15 439
Accumulated depreciation 1 January 2022 0 0 5 5
Depreciation for the period 0 103 1 836 1 938
Net book value 31 December 2022 2 564 1 091 9 841 13 495
Annual report 2022
Extending the ocean potential 116
Note 7 Leases
The total cash outflow for leases in 2022 was NOK 2,059 thousand.
Assets and liabilities arising from a lease are initially measured on a present value basis. The lease
payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Company, the lessee’s incremental
borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Company:
• where possible, uses recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party financing was received
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases
held by the Company, which does not have recent third-party financing, and
• makes adjustments specific to the lease, eg term, country, currency and security.
The Company is exposed to potential future increases in variable lease payments based on an index
or rate, which are not included in the lease liability until they take effect. When adjustments to
lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted
against the right-of-use asset. Lease payments are allocated between principal and finance
cost. The
Amounts recognised in the balance sheet
(NOK thousands)
31 Dec 2022 31 Dec 2021
Right-of-use assets
Rent of premises 8 101 0
Car 427 216
Office supply 1 313 0
Total right-of-use assets 9 841 216
Lease liabilities
Current 2 390 73
Non-current 7 602 144
Total lease liabilities 9 993 217
Amounts recognised in the statement of profit or loss
(NOK thousands)
31 Dec 2022 31 Dec 2021
Depreciation right-of-use assets
Rent of premises (1 417) 0
Car (187) (13)
Office supply (231) 0
Gross depreciation (1 836) (13)
- Capitalized as assets under construction
Net depreciation (1 836) (13)
Interest expense lease liability 409 2
Annual report 2022
Extending the ocean potential 117
finance cost is charged to profit or loss over the lease period in order to produce a constant periodic
rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentive received
• any initial direct costs, and - restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease
term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the
right-of-use asset is
depreciated over the underlying asset’s useful life.
The Company has entered into several lease agreements that are considered to qualify as short-
term and/or low-value in accordance with IFRS 16. Payments associated with such short-term and
low-value leases are recognised on a straight-line basis as an expense in profit or loss. Short-term
leases are leases with a lease term of 12 months or less. Low-value assets comprise IT-equipment and
small items of office furniture.
Note 8 Other operating expenses
(NOK thousands) 2022 2021
Cost of premises (not defined as RoU) 568 63
Other operating and administrative expenses 7 723 973
Insurance 151 53
Consultancy fees 17 991 6 927
Other fees (Oslo Børs, VPS) 1 170 2 863
Total other operating expenses 27 603 10 878
Annual report 2022
Extending the ocean potential 118
Note 9 Interest bearing debt
The Group has entered into a senior secured NOK 625 million debt financing package relating to its
phase 1 build out at Indre Harøy with Nordea, Sparebanken Vest and Innovation Norway. This
package consists of a NOK 525 million senior secured credit facility that are to finance the
construction CAPEX at Indre Harøy (Construction Facility) as well as a NOK 100 million overdraft
facility. Per 31.12.22 the Group had made drawdowns of NOK 495 million under the Construction
Facility. The Construction Facility has no repayments during the construction period and will be
converted into a long-term debt facility at completion of Phase 1.
Financial covenants
The most important financial covenants for the long-term financing of the Group are, respectively, a
solvency requirement that the borrower’s (Salmon Evolution Norway AS) book equity ratio (including
intra-group loans) shall exceed 50%. Further, there is a profitability requirement linked to the
borrower’s EBITDA which shall be greater than NOK 100 million on a last 12-month basis from Q2 2024.
Quarterly EBITDA figures shall be measured from Q3 2023 with set minimum EBITDA levels reflecting
the company’s gradual ramp up of production volumes and profitability. Finally, there is a minimum
cash requirement that stipulates that the cash balance shall be greater than NOK 100 million during
construction, and greater than NOK 50 million after completion of the construction work.
Security
The Group’s bank debt facilities are fully guaranteed by Salmon Evolution ASA. The respective lenders
also have a pledge over 100% of the shares in the Group’s two operating subsidiaries, Salmon
Evolution Norway AS and Salmon Evolution Dale AS. Furthermore, the respective lenders have a
pledge over all material operating assets of the Group, hereunder inter alia, land, plant and
machinery, operating licenses, inventory and receivables.
Long-term interest bearing debt
(NOK thousand) 31.12.2022 31.12.2021
Debt to credit institutions 12 500 -
Other long-term interest bearing debt - 12 352
Leasing liabilities 7 602 144
Total long-term interest-bearing debt 20 102 12 496
Short-term interest bearing debt
(NOK thousand) 31.12.2022 31.12.2021
Debt to credit institutions 30 333 -
Other short-term interest bearing debt 12 841 12 352
Leasing liabilitites 2 390 73
Total short-term interest-bearing debt 45 565 12 425
Total interest-bearing debt 65 667 24 921
Cash & cash equivalents 254 610 355 403
Net interest-bearing debt -188 943 -330 482
Annual report 2022
Extending the ocean potential 119
Note 10 Taxes
Calculation of deffered tax/deferred tax benefit
(NOK thousands)
2022 2021
Fixed assets 206
Right-of-use assets 9 841 216
Lease liabilities -9 993 -217
Other current liabilities
Net temporary differences 54 -1
Tax losses carried forward 53 995 52 798
Basis for deferred tax 53 941 52 799
Deferred tax (22%) 11 867 11 616
Deferred tax benefit not recognised in the balance sheet* -6 662 -6 896
Deferred tax in the balance sheet 5 205 4 719
Basis for income tax expense, changes in deferred tax and tax payable
(NOK thousands)
2022 2021
Result before taxes 17 804 2 943
Permanent differences* -23 610 -23 646
Basis for the tax expense in the current year -5 806 -20 703
Change in temporary differences -55 -1
Basis for payable taxes in the income statement -5 861 -20 704
*Deferred tax benefit has not been recognised in the balance sheet as the Company is in its start-up phase and does
not have any historical results to refer to when assessing whether future taxable profits will be sufficient to utilize the
tax benefit. However, there is payable tax and deferred tax in the subsidiary Salmon Evolution Dale AS. The group
assumes to utilize tax losses carried forward against tax positions in Salmon Evolution Dale AS.
Components of the tax expense
(NOK thousands)
2022 2021
Payable tax on this year's result - -
Change in deferred tax -251 -4 554
Change in deferred tax not shown in the balance sheet -234 -165
Tax expence -486 -4 719
Reconciliation of the tax expense with the nominal tax rate
(NOK thousands)
2022 2021
Result before taxes 17 804 2 943
Calculated tax (22%) 3 917 647
Tax expence - -
Difference -3 917 -647
The difference consists of:
Tax on permanent differences -5 194 -5 201
Change in tax rate - -
Change in deferred tax 486 4 719
Change in deferred tax due to change in tax rate - -
Change in deferred tax not shown in the balance sheet -234 -165
Change due to group contribution from previous year (tax wise) 1 026
Sum explained differences -3 917 -647
Annual report 2022
Extending the ocean potential 120
Note 11 Investments in subsidiaries
Investments in subsidiaries are valued at cost in the company accounts. The investment is valued as
cost of acquiring shares, providing they are not impaired. An impairment loss is recognised for the
amount by which the carrying amount of the subsidiary exceeds its recoverable amount. The
recoverable amount is the higher of fair value less cost to sell and value in use. The recoverable
amount of an investment in a subsidiary would normally be based on the present value of the
subsidiary's future cash flow. As of 31.12.2022 no impairment indicators was assessed to be present
for the Company’s investments.
Note 12 Cash and restricted cash
Restricted cash are related to tax withholdings for employees (TNOK 1 655).
Note 13 Share capital
(NOK thousands)
Location and place of business
Ownership/
voting right
Equity 31.12.22
(100%)
Result 2022
(100%)
Balance sheet
value
Salmon Evolution Norway AS Molde, Norway 100 % 236 326 (7 474) 281 138
Salmon Evolution International AS Molde, Norway 100 % -1 770 (790) 1 000
Salmon Evolution Dale AS Folkestad, Norway 100 % 18 878 5 263 76 059
Salmon Evolution Sales AS Ålesund, Norway 100 % 1 000 122 1 000
K Smart Farming Co., Ltd* Gangwangnak-ro, South Korea 49 % 49 242 416 -
Balance sheet value as of 31 December 2022 359 197
*K Smart Farming Co., Ltd is owned through Salmon Evolution International AS
Movement in investment in subsidiaries during 2022 is analysed in the following way:
(NOK thousands)
Opening balance 01 January 2022 356 778
Share options issued (Salmon Evolution Norway) 1 419
Salmon Evolution Sales AS, established July 2022 1 000
Closing balance 31 December 2022 359 197
(NOK thousands) 31 Dec 2021 31 Dec 2021
Cash in bank 252 956 355 126
Restricted bank deposits 1 655 276
Total cash and cash equivalents 254 610 355 403
Nominal value 31 Dec 2022 31 Dec 2021
Ordinary shares 0,05 345 754 822 310 796 489
Average number of shares 0,05 337 015 239 291 291 107
(NOK thousands)
31 Dec 2022 31 Dec 2021
Share capital 17 288 15 540
Share premium 1 605 894 1 334 283
Total 1 623 182 1 349 823
Annual report 2022
Extending the ocean potential 121
The number of shares issued in the company at 31 December 2022 was 345,754,822 with a nominal
value of NOK 0.05 each. All shares carry equal voting rights.
As of 31 December 2022, shares directly held by members of the Board of Directors, Chief Executive
officer, and Executive Management consisted of the following:
20 largest shareholders as of 31.12.22 No of shares Percentage share
Ronja Capital II AS 27 393 242 7,9 %
The Bank of New York Mellon SA/NV 22 310 787 6,5 %
Farvatn Private Equity AS 17 649 433 5,1 %
Dongwon Industries Co. Ltd 16 044 572 4,6 %
Rofisk AS 14 537 897 4,2 %
Stette Invest AS 11 569 338 3,3 %
Kjølås Stansekniver AS 11 207 738 3,2 %
J.P. Morgan SE 8 141 141 2,4 %
Mevold Invest AS 7 994 252 2,3 %
Lyngheim Invest AS 7 810 734 2,3 %
Jakob Hatteland Holding AS 7 441 374 2,2 %
Ewos AS 7 418 309 2,1 %
Bortebakken AS 7 301 134 2,1 %
Verdipapirfondet Dnb Norge 5 717 376 1,7 %
Nordnet Livsforsikring AS 5 278 862 1,5 %
Verdipapirfondet DNB SMB 4 685 346 1,4 %
VPF DNB Norge Selektiv 4 518 643 1,3 %
Salmoserve AS 3 782 921 1,1 %
CACEIS Bank 3 033 333 0,9 %
Småge Eiendom AS 2 788 245 0,8 %
Total 20 largest shareholders 196 624 677 56,9 %
Other shareholders 149 130 145 43,1 %
Total number of shares 345 754 822 100,0 %
No of shares Percentage share
Peder Stette, Member of the board - Stette Invest AS 11 569 338 3,3 %
Glen Allan Bradley, Member of the Board * 5 364 032 1,6 %
Ingjarl Skarvøy, COO - Terra Mare AS and private 1 800 150 0,5 %
Janne-Grethe Stand Aasnæs, Member of the board - Nikaro AS 480 000 0,1 %
Håkon Andre Berg, Member of the board - Carried Away AS 450 000 0,1 %
Trond Håkon Schaug-Pettersen, CEO & CFO - Troha Invest AS 400 000 0,1 %
Kamilla Mordal Holo, Project Director - C10 Holding AS & private
160 060 0,0 %
Anne Breiby, Member of the board 104 000 0,0 %
Total 20 327 580 5,9 %
*1,500,000 shares owned through Ocean Industries AS and 70,000 shares owned privately. Also,
including 3,727,366 shares owned through Salmoserve AS where Glen Allan Bradley has an ownership of
25%.
Annual report 2022
Extending the ocean potential 122
The Company entered into an investment agreement with Dongwon Industries and completed a
NOK 50 million private placement towards Dongwon Industries in July 2020.
The Company raised NOK 500 million in a private placement in connection with its initial public
offering related to the admission on Merkur Market (now Euronext Growth) in September 2020.
Further, the Company also raised another NOK 500 million in a private placement in March 2021.
In August 2021 the Company acquired 100% of the shares in Kraft Laks AS (now Salmon Evolution
Dale AS). As part of the settlement the Company issued 2,190,694 new shares of NOK 7.5775 per
share, and thereby increased its equity by NOK 16.6 million. In October 2021 the Company carried
out a private placement of USD 5m (NOK ~43m) towards Cargill.
Further, in April 2022 the Company carried out a private placement raising gross proceeds of NOK
300 million at a subscription price of NOK 9.00 per share, bringing total raised equity to more than
NOK 1.7 billion.
Note 14 Trade and other current liabilities
Note 15 Events after the reporting date
Signed agreement for new NOK 1,550 million green debt financing package
Salmon Evolution Norway AS has entered into a binding loan agreement with DNB and Nordea for
a new green debt financing package totalling NOK 1,550 million relating to phase 1 and 2 at Indre
Harøy. Salmon Evolution ASA is guarantor for the loan.
The new debt financing package consists of the following facilities:
- NOK 525 million non-amortizing Term Loan Facility which will refinance the Company’s existing NOK
525 million construction loan relating to phase 1 (the “Term Loan”)
- NOK 250 million RCF Capex Facility available for general corporate purposes including Indre Harøy
phase 2 capex (the “RCF Facility”)
- NOK 775 million Construction Facility available for financing of capex relating to phase 2 at Indre
Harøy (the “Construction Facility”).
Capital History
(NOK thousands)
Opening balance 1 July 2020 5 375 159 0,05 107 503 182
Share options exercised 10 July 2020 30 000 5 405 159 0,05 3,33 600 000 108 103 182
Private placement 23 July 2020 581 395 5 986 554 0,05 4,30 11 627 906 119 731 088
Private placement
11 September 2020
5 000 000 10 986 554 0,05 5,00 100 000 000 219 731 088
Private placement 23 March 2021 4 166 667 15 153 221 0,05 6,00 83 333 333 303 064 421
Acquisition Kraft Laks 16 August 2021 109 535 15 262 756 0,05 7,58 2 190 694 305 255 115
Private placement
12 October 2021
277 068 15 539 824 0,05 7,71 5 541 374 310 796 489
Share options exercised 26 March 2022 81 250 15 621 074 0,05 4,80 1 625 000 312 421 489
Private placement 5 April 2022 1 666 667 17 287 741 0,05 9,00 33 333 333 345 754 822
Date
Capital
Increase
Share Capital
After Change
Par Value
Subscription
price
per share
New shares
Total no. of
outstanding
shares
(NOK thousands) 31 Dec 2022 31 Dec 2021
Trade payables 5 415 569
Total trade payables 5 415 569
(NOK thousands) 31 Dec 2022 31 Dec 2021
Payroll withholding tax, VAT and other taxes 1 655 109
Employer's national insurance contributions 980 605
Accrued salaries, holiday pay and bonus provisions 3 349 2 373
Total other current liabilities 5 984 3 087
Annual report 2022
Extending the ocean potential 123
Directors responsibility statement
Today, the Board of Directors and the Chief Executive Officer reviewed and approved the Board of
Director’s report and the consolidated financial statements for Salmon Evolution ASA, for the year
ended 31 December 2022.
The financial statements have been prepared in accordance with IFRSs and IFRICs as adopted by
the EU and applicable additional disclosure requirements in the Norwegian Accounting Act.
To the best of our knowledge:
– The annual financial statements for 2022 have been prepared in accordance with applicable
financial reporting standards
– The annual financial statements give a true and fair view of the assets, liabilities, financial position
and profit as a whole as of 31 December 2022 for the Company.
– The Board of Directors’ report for the Company includes a fair review of:
i) the development and performance of the business and the position of the Company, and
ii) the principal risks and uncertainties the Company face.
Elnesvågen/Ålesund 17 April 2023
Tore Tønseth
Chair
Janne-Grethe Strand Aasnæs
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Eunhong Min
Director
Ingvild Vartdal
Director
Håkon André Berg
Director
Trond Håkon Schaug-Pettersen
CEO
BDO AS
Nøisomhed
Serviceboks 15
6405 Molde
BDO AS, et norsk aksjeselskap, er deltaker i BDO International Limited, et engelsk selskap med begrenset ansvar, og er en del av
det internasjonale nettverket BDO, som består av uavhengige selskaper i de enkelte land. Foretaksregisteret: NO 993 606 650 MVA. side 1 av 4
Independent Auditor's Report
To the Annual Shareholders meeting of Salmon Evolution ASA
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Salmon Evolution ASA.
The financial statements comprise:
• The financial statements of the parent
company, which comprise the balance
sheet as at 31 December 2022, income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies, and
• The financial statements of the group,
which comprise the balance sheet as at
31 December 2022, and income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies.
In our opinion:
• The financial statements comply with
applicable statutory requirements.
• The accompanying financial statements
give a true and fair view of the
financial position of the company as at
31 December 2022, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
• The accompanying financial statements
give a true and fair view of the
financial position of the group as at 31
December 2022, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and
the Group as required by relevant laws and regulations in Norway and International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
During 2022 we provided services in connection with the preparation of the financial statements for
2021 for Salmon Evolution Dale AS and Salmon Evolution International AS, subsidiaries of Salmon
Evolution ASA, for a total fee of NOK 23 100. These services fall within the definition of prohibited
non-assurance services in the Audit Regulation (537/2014) Article 5.1. Having discussed the matter
BDO AS, et norsk aksjeselskap, er deltaker i BDO International Limited, et engelsk selskap med begrenset ansvar, og er en del av
det internasjonale nettverket BDO, som består av uavhengige selskaper i de enkelte land. Foretaksregisteret: NO 993 606 650 MVA. side 2 av 4
with the Audit Committee, we believe that these service deliveries have not compromised our
objectivity and independence. To the best of our knowledge and belief, no other prohibited non-
assurance services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. In
our opinion we are independent of Salmon Evolution ASA.
We have been the auditor of Salmon Evolution ASA for 3 years from the election by the general
meeting of the shareholders on 3 July 2020 for the accounting year 2020 (with at renewed election
on the 14 June 2022).
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Description of the key audit matter
How the key audit matter was addressed in
the audit
Capitalised expenditure on asset under
construction
Asset under construction makes up 74% of the
total assets of the group (1 713 MNOK). If we
exclude cash and cash equivalents, assets
under constructions makes up 85% of total
assets. A total cost of 742 MNOK has been
capitalized in 2022 (751 MNOK in 2021). Phase
1 of the construction was finalized and ready
for intended use medio April 2023.
A part of the additions is related to indirect
cost. Accumulated indirect cost to asset under
construction amounts to 89,3 MNOK, of which
30,6 MNOK is related to interest. The additions
in 2022 equals 34% of the total indirect cost in
the subsidiary Salmon Evolution Norway versus
67% in 2021. The percentage allocated to asset
under construction is based on time estimates
for relevant employees.
The accounting treatment of expenditure in
relation to asset under construction has been
identified as a key matter in connection with
the audit of the consolidated financial
statement due to its financial significance and
the various judgments involved.
We have agreed the opening balance with prior
year and tested the basis for additions on a
sample basis. The selected direct cost samples
were verified against supporting
documentation from suppliers to confirm that
the transactions had incurred, that the costs
qualified for capitalisation and that the
transactions were recorded in the proper
period. In addition, we have confirmed and
reconciled accounts payable for the main
supplier Artec Aqua AS.
In relation to indirect cost allocated to asset
under construction we have assessed the
policies applied for allocation and reviewed the
applied allocation percentages based on the
defined tasks for the relevant employees.
BDO AS, et norsk aksjeselskap, er deltaker i BDO International Limited, et engelsk selskap med begrenset ansvar, og er en del av
det internasjonale nettverket BDO, som består av uavhengige selskaper i de enkelte land. Foretaksregisteret: NO 993 606 650 MVA. side 3 av 4
Other information
The Board of Directors and the Managing Director (management) is responsible for the other
information. The other information comprises the Board of Directors’ report and other information
in the Annual Report, but does not include the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Opinion on the Board of Director’s report
Based on our knowledge obtained in the audit, in our opinion the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly for the statements on
Corporate Governance, Corporate Social Responsibility and for the report on payments to
governments.
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view
in accordance with International Financial Reporting Standards as adopted by the EU, and for such
internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
For further description of Auditor’s Responsibilities for the Audit of the Financial Statements
reference is made to:
https://revisorforeningen.no/revisjonsberetninger
BDO AS, et norsk aksjeselskap, er deltaker i BDO International Limited, et engelsk selskap med begrenset ansvar, og er en del av
det internasjonale nettverket BDO, som består av uavhengige selskaper i de enkelte land. Foretaksregisteret: NO 993 606 650 MVA. side 4 av 4
Report on compliance with Regulation on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Salmon Evolution ASA we have performed an
assurance engagement to obtain reasonable assurance about whether the financial statements
included in the annual report, with the file name “549300P2OB7L255PF765-2022-12-31-en.zip”,
have been prepared, in all material respects, in compliance with the requirements of the
Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF
Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which
includes requirements related to the preparation of the annual report in XHTML format and iXBRL
tagging of the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF Regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
Regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Molde, 17 April 2023
BDO AS
Roald Viken
State Authorised Public Accountant
Annual report 2022
Extending the ocean potential 128
Sustainability Indicators and GRI Index
Being transparent in our reporting and operation have been important factors for us from the start.
Therefore, we have chosen to report on our environmental, social, and governance factors in 2022.
Due to the fact that we are still growing and there is still a lot of uncertainty on actual impact, we
have chosen to report with reference to the Global Reporting Initiative (GRI) Standards (2021) in the
2022 reporting. We have ambitions for reporting in accordance with from next year and have plans
in place to extend and enhance our reporting process going forward.
GRI DISCLOSURE
LOCATION
GRI 2: General Disclosures 2021
2-1 Organizational details
p. 3-5, 8-14
2-2 Entities included in the organization’s sustainability reporting
Salmon Evolution ASA with subsidiaries,
p. 107
2-3 Reporting period, frequency and contact point
01.01.2022-31.12.2022
Annual reports from 2022
Contact point: CFO
2-4 Restatements of information
p. 15
2-5 External assurance
N/A – no external assurance of ESG
reporting for the 2022 report
2-6 Activities, value chain and other business relationships
p. 3-4, 24, 25
2-7 Employees
p. 26-29
2-8 Workers who are not employees
N/A – only employees or
subcontractors
2-9 Governance structure and composition
p. 32
2-10 Nomination and selection of the highest governance body
p. 40-41
2-11 Chair of the highest governance body
p. 41
2-12 Role of the highest governance body in overseeing the
management of impacts
p. 41
2-13 Delegation of responsibility for managing impacts
p. 30
2-15 Conflicts of interest
p. 29, 39
2-16 Communication of critical concerns
p. 39
2-17 Collective knowledge of the highest governance body
p. 33-36
2-19 Remuneration policies
p. 41-42
2-20 Process to determine remuneration
p. 41-42
2-22 Statement on sustainable development strategy
p. 19-20
Annual report 2022
Extending the ocean potential 129
2-23 Policy commitments
p. 30-31
2-24 Embedding policy commitments
p. 30-31
2-27 Compliance with laws and regulations
p. 31
2-28 Membership associations
p. 41
2-29 Approach to stakeholder engagement
p. 30
2-30 Collective bargaining agreements
p. 26-27
GRI 3: Material Topics
3-1 Process to determine material topics
p. 16
3-2 List of material topics
p. 16
3-3 Management of material topics
p. 16
GRI 201: Economic Performance
201-1 Direct economic value generated and distributed
See financial statements and notes p.
59-101
201-2 Financial implications and other risks and opportunities due to
climate change
p. 21, 54
201-3 Defined benefit plan obligations and other retirement plans
See financial statements and notes p.
59-101
201-4 Financial assistance received from government
See financial statements and notes p.
59-101
GRI 205: Anti-corruption
205-2 Communication and training about anti-corruption policies and
procedures
p. 38
205-3 Confirmed incidents of corruption and actions taken
Zero (0) incidents
GRI 301: Materials
301-1 Materials used by weight or volume
p. 25
301-2 Recycled input materials used
p. 20
GRI 302: Energy
302-1 Energy consumption within the organization
pp. 20, 23
302-2 Energy consumption outside of the organization
pp. 20, 23
GRI 303: Water and Effluents
303-1 Interactions with water as a shared resource
pp. 19-24
303-2 Management of water discharge-related impacts
pp. 19-24
Annual report 2022
Extending the ocean potential 130
303-3 Water withdrawal
pp. 19-24
303-4 Water discharge
pp. 19-24
303-5 Water consumption
pp. 19-24
GRI 304: Biodiversity
304-2 Significant impacts of activities, products and services on
biodiversity
p. 22
GRI 305: Emissions
305-1 Direct (Scope 1) GHG emissions
p. 25
305-2 Energy indirect (Scope 2) GHG emissions
p. 20 – 100% renewable energy
305-5 Reduction of GHG emissions
p. 25
GRI 306: Waste
306-1 Waste generation and significant waste-related impacts
pp. 21-22
GRI 401: Employment
401-1 New employee hires and employee turnover
p. 29
401-3 Parental leave
p. 26
GRI 403: Occupational Health and Safety
403-1 Occupational health and safety management system
pp. 26-27
403-2 Hazard identification, risk assessment, and incident investigation
pp. 26-27
403-3 Occupational health services
pp. 26-27
403-4 Worker participation, consultation, and communication on
occupational health and safety
pp. 26-27
403-5 Worker training on occupational health and safety
Health and safety training for all
employees
403-6 Promotion of worker health
pp. 26-27
403-9 Work-related injuries
pp. 26-27
403-10 Work-related ill health
Zero (0) incidents
GRI 404: Training and Education
404-1 Average hours of training per year per employee
p. 27
404-2 Programs for upgrading employee skills and transition assistance
programs
p. 27
404-3 Percentage of employees receiving regular performance and
career development reviews
p. 27
Annual report 2022
Extending the ocean potential 131
GRI 405: Diversity and Equal Opportunity
405-1 Diversity of governance bodies and employees
pp. 13-14, 28, 33-36 (BoD)
405-2 Ratio of basic salary and remuneration of women to men
p. 28
GRI 406: Non-discrimination
406-1 Incidents of discrimination and corrective actions taken
Zero (0) incidents reported
GRI 413: Local Communities
413-1 Operations with local community engagement, impact
assessments, and development programs
pp. 30
Annual report 2022
Extending the ocean potential 132
Important of abbreviations used in this report
LW: Live weight
HOG: Head on gutted
HFS: Hybrid flow-through system
ESG: Environmental, Social and Governance
CAGR: Compounded Annual Growth Rate
ABOUT SALMON EVOLUTION
The Company's first production facility is strategically located at Indre Harøy
on the Norwegian west coast with unlimited access to fresh seawater, renewable energy,
established infrastructure, and an educated and experienced work force. Phase 1 is already in
operation and will have an annual capacity of 7,900 tonnes HOG at steady state. Fully
developed, the Indre Harøy facility will have an annual capacity of 31,500 tonnes HOG.
The Company has also entered into a joint venture with Dongwon Industries where the parties
will develop, construct and operate a land-based salmon farming facility in South Korea with an
annual production capacity of 16,800 tonnes HOG, using Salmon Evolution's chosen HFS
technology.
Furthermore, Salmon Evolution has initiated a process with the aim of establishing a land-
based salmon farming operation in North America.
Salmon Evolution AS A is listed at Oslo Børs under the ticker SALME.
OFFICE ADDRESS
PRODUCTION SITE
Indre Harøyvegen 88 ,
6430 Bud, N or wa y
BUSINESS REGISTRATION NUMBER
NO 925 344 877 MVA
E-mail: post@salmone.no
Web: salmonevolution.no