Your Aquaculture Technology and Service Partner. Company presentation August 2016

Transcription

1 Company presentation August 2016

2 Important Information About this Company Presentation This Company Presentation has been prepared by AKVA group ASA ("AKVA group" or the "Company") for information purposes only, and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction to any person. Any recipient or reader of this Company Presentation contemplating to make an investment in the Company must rely on their own examination of the Issuer, including the merits and risks involved. Each recipient and reader of this Company Presentation should consult with its own legal, credit, business or tax adviser as to legal, credit, business and tax advice. By receiving or accessing this Company Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and are solely responsible for forming your own opinion of the potential future performance of the Company s business. The information contained in this Company Presentation has not been independently verified. No representation or warranty (express or implied) is made as to the accuracy or completeness of any information contained herein, or any oral information provided in connection therewith, and it should not be relied upon as such. The Company accepts no liability whatsoever arising directly or indirectly from the use of this Company Presentation. This Company Presentation is current as of 10 March Nothing herein shall create any implication that there has been no change in the affairs of AKVA group since such date. This Company Presentation contains forward-looking statements relating to the Company's business, the Company's prospects and other forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this Company Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development.

3 AKVA group highlights Undisputed #1 supplier of technology and services to the aquaculture sector Salmon farming is driven by high demand, high prices and increased technological sophistication New salmon farming growth to come from land-based and more exposed locations with higher technological requirements AKVA group is well positioned for continued growth and margin improvement active dividend policy

4 Agenda 1 Company 2 Market & trends 3 Financials

5 OPEX based revenue CAPEX based revenue AKVA group uniquely positioned for future growth Leading technology solutions and service partner to the global aquaculture industry Global presence - subsidiaries in 8 countries 1 Cage-based 2 Plastic and steel cages Feed systems, sensors and cameras Infrastructure Land-based Land-based facilities Land-based equipment 751 employees 3 Software Market cap of NOK ~1700m and net debt of NOK 172m 4 Technology and farming services

6 Presence in all main farming regions Map of activities Revenue per region YTD June 2016 Export 12 % Americas 9 % Nordic Americas Export Nordic 79 %

7 AKVA group serves all salmon farmers in the World Customer examples Revenue per customer 2016 Customer 1 Customer 2 Customer 3 Other

8 Strategic priority to increase the proportion of software and service-related revenue Revenue reoccurring vs technology YTD June 2016 OPEX based revenue; 24% CAPEX based revenue; 76 % Comments Introduction of rental business model in Norway. Already successfully introduced in UK and Canada Rental is an all inclusive service providing for instance light or picture for an agreed period of time (2 to 5 years duration) - reduced CAPEX and reducing operational work from the customer Acquisition of YesMaritime in 2014, a provider of diving, ROV and other services to the salmon farming sector (Farming services) Development of Farming Services still in an early stage opportunity for consolidation Aim of delivering more than 30% of revenue through software and services by developing software, farming services, technology services and rental further

9 Agenda 1 Company 2 Market & trends 3 Financials

10 Aquaculture is becoming increasingly technology-intensive Farming capex, NOK/kg harvested 1) Comparison of cage in 1980 to cage in x 4,0 1,6 Source: Notes: Salmon farmer annual reports 1) Based on reported farming capex and harvest volumes for Marine Harvest, Salmar, Cermaq, Lerøy, Grieg, NRS and Bakkafrost, 2015 figures are based on company guidance

11 Driving forces salmon industry LAND BASED FARMING EXPOSED SITES FARMING The exponential challenge of the coastal zone SALMON LICE CONCENTRATION OF STAKEHOLDER INTEREST WATER QUALITY AVAILABLE SPACE FOR EXPANSION ENVIRONMENTAL IMPACTS OF CONCENTRATED ACTIVITIES SHORELINE

12 M. Tons live weight (WFE) Production cost (NOK/kg) Industry entering into a stagnant phase with rapidly increasing costs CAGR ,1 % Sales volume Source: Deloitte, Directorate of fisheries

13 Industry phase development effects on technology demand Industry stagnant phase

14 Cage farming development SHELTERED EXPOSED OCEAN FARMING SHORELINE INCREMENTAL DEVELOPMENT: ENLARGEMENT AND INCREASED ROBUSTNESS INCREMENTAL DEVELOPMENT: BASED ON EXPERIENCES FROM AQUACULTURE AND OFFSHORE INDUSTRY

15 Development of land based and closed containment technologies LAND BASED TECHNOLOGY CLOSED CONTAINMENT TECHNOLOGY AT SEA SHORELINE

16 ATLANTIS SUBSEA FARMING AS Established in partnership with the companies Sinkaberg-Hansen AS and Egersund Net AS 33.3% of the shares each Purpose of developing submersible fish-farming facilities for salmon on an industrial scale Has applied for six development licences to enable large-scale development and testing of the new technology and operational concept Through its innovative development work, ATLANTIS aims both to contribute to better and more sustainable use of current farming sites as well as to enable use of more exposed sites than is currently possible. The goal is to achieve production gains and improve fish welfare by submerging the facilities, as they will be far less exposed to the environmental and physical conditions than in a surface position Although ATLANTIS represents a significant leap forward in terms of innovation, it is also an objective for the concept to keep costs at a level that helps strengthen the industry's competitive position. The aim is also that the technology and operating methods developed through ATLANTIS can be made available and adopted by the industry relatively quickly 16

17 The growing global movement to participate in sustainable aquaculture Middle East: Offshore Saudi, Oman, Iran (Caspian) Lakes/Dams Iran Land Based UAE, Saudi, Oman, Iran Asia: Offshore Indonesia, Malaysia, Japan, South Korea, India, Sri Lanka Lakes/Dams China, Vietnam Land Based China, Thailand, Malaysia, Indonesia, Vietnam The progressive regions: Salmon Sea Bass & Sea Bream Other Species emerging regions Sub-Sahara Africa: Offshore Mauritius, Mozambique Lakes/Dams Lesotho, Ghana, SE Africa Land Based SE Africa

18 Continued growth expected still in early stage of development Cycle development Growth drivers Cycle development Oil The salmon industry is still the frontier. Analysts expects limited volume growth in salmon farming in This implies high salmon prices which is the prime driver for growth in the technology and service industry Aqua Additional growth from increased regulation, adding complexity and adding need for compliance Additional growth from other species and regions Time Additional growth from maturation of the industry the players are getting more specialized

19 AKVA group is the undisputed #1 technology and service provider to the aquaculture sector Cages Aquaculture machinery Water engineering Software & IT Service & Revenue, Support NOKm AKVA group is the undisputed #1 supplier to the aquaculture industry Complete offering increasingly seen as positive by customers Scale provides technological advantage Holds the most wellknown brands in the industry Present in all main markets

20 Agenda 1 Company 2 Market & trends 3 Financials

21 AKVA group has seen operational revenue growth of 87% from 2012 to 2016 Software AKVA group revenue Land-based CAGR +17% Cage-based Comments Growth in cage-based driven both technology sales and reoccurring revenues Growth in land based due to high activity in the market. The acquisition of Plastsveis AS in April 2013 and Aquatec Solutions AS in September 2015 also contribute to growth Software with steady organic profitable growth Notes: ) LTM June 1) 2012 for software is excluding a one of gain of MNOK 29 related to the sale of the Norwegian Maritech business

22 Target of 10% near-term EBITDA margin further potential longer term 3% AKVA group EBITDA-margin across segments ) LTM June 20% 20% 20% 15% 14% 9% 9% 9% 10% 10% 8% 8% 6% 5% 4% 4% 0% Comments Mid-term target of 10% EBITDA margin is achieved Land-based margin continue to increase due to restructuring of business segment and recent acquisitions of new companies AKVA group margins set to increase with increasing portion of Software and Services -11% -3% Cage-based Land-based Software Group Notes: 1) 2012 FY for software is excluding a one of gain of MNOK 29 related to the sale of the Norwegian Maritech business

23 Operational leverage is a driver for increased margins AKVA group gross margin and SG&A 1) LTM Figures in '000 NOK June Revenue COGS Gross margin GM in % 26,8 % 26,5 % 25,5 % 26,9 % 26,8 % OPEX EBITDA EBITDA in % 3,6 % 5,1 % 8,3 % 9,5 % 10,0 % # FTE OPEX/Revenue 23,16 % 21,44 % 17,20 % 17,47 % 16,85 % Comments Relative cost base has improved over the last years Hands on in all operations constantly challenging cost development in all units The number of FTE s decreased in 2013 and 2015 due to cost focus and controlled reduction of exposure in Chile The number of FTE s has increased in 2014 and 2016 mostly due to the acquisition new companies Notes: 1) 2012 is excluding a one of gain of MNOK 29 related to the sale of the Norwegian Maritech business

24 Strong financial profile Equity, Working Capital and ROCE % Comments % Constant focus on balance sheet performance in all Group units ROCE % 20 % 15 % Strong balance sheet KPIs Focus on improving ROCE WC % % YTD Equity WC ROCE % 0 %

25 Strong financial profile Net debt (MNOK) and net debt/ebitda Comments ,0 Bank debt refinanced in January 2014 with improved terms and conditions , ,0 2,0 Low financial gearing Financially positioned for further growth, both organically and through M&As ,4 0,9 0,8 0,7 0,8 1,0 0,5 1,1 1,0-2 Q Q Q Q Q Q Q Q Q Net interest bearing debt NIBD/EBITDA(12months rolling)

26 Order backlog is all-time high AKVA group order backlog Comments NOKm Q Q Q Q All time high order backlog at the end of Q Increased order backlog over the last years Delivery time of backlog is 1 to 18 months with most of the delivery in the first six months Increased portion of land based gives a longer duration in the order backlog Some seasonal pattern of increasing backlog in Q4 and Q1 and decreasing backlog in Q2 and Q3, however with more land based and service activity we expect less seasonal variations in P&L and order inflow during the year

27 Current dividend policy in AKVA group ASA A two step policy: The dividend level shall reflect the present and expected future cash generating potential of AKVA group. AKVA group will target a net interest-bearing debt/equity ratio of less than 0.5x When the target debt vs. equity level is met, at least 60% of the annual free cash flow after operational and financial commitments is intended to be distributed as dividend Applicable statutory restrictions shall be observed The Company s main objective is to maximize the return on the investment made by its shareholders through both increased share prices and dividend payments A dynamic dividend policy was launched in Based on the financial performance and outlook the company aims to pay out dividend according to the two step policy twice every year, after the first half and the second half of the year. Dividend details (in NOK) Year Cash Dividend per Total cash dividend Payment date Q Q Q Q

28 More than 1100 shareholders from 21 countries June largest shareholders No of shares % Account name Type Citizenship ,1 % EGERSUND GROUP AS NOR ,1 % WHEATSHEAF INVESTMEN GBR ,8 % VERDIPAPIRFONDET ALF NOR ,9 % EIKA NORGE NOR ,9 % MP PENSJON PK NOR ,9 % STATOIL PENSJON NOR ,8 % SKANDINAVISKA ENSKIL Nominee LUX ,4 % VERDIPAPIRFONDET DNB NOR ,2 % MERTOUN CAPITAL AS NOR ,1 % NORDEA NORDIC SMALL GBR ,0 % VPF NORDEA KAPITAL NOR ,9 % OLE MOLAUG EIENDOM A NOR ,8 % VPF NORDEA AVKASTNIN NOR ,8 % DAHLE BJØRN NOR ,7 % ROGALAND SJØ AS NOR ,5 % VERDIPAPIRFONDET EIK NOR ,5 % ARCTIC FUNDS PLC BEL ,5 % J.P. MORGAN LUXEMBOU Nominee GBR ,5 % STATOIL FORSIKRING A NOR ,4 % MOLAUG OLE NOR ,6 % 20 largest shareholders ,4 % Other ,0 % Total number of shares as per Origin of shareholders, 5 largest countries No of shares % Origin No of shareholders ,9 % Norway ,4 % Great Britain ,2 % Luxembourg ,0 % USA ,8 % Switzerland ,7 % Other 88 Total number of shareholders: from 21 different countries Share development Last 12 months Share price jul. 15 aug. 15 sep. 15 okt. 15 nov. 15 des. 15 jan. 16 feb. 16 mar. 16 apr. 16 mai. 16 jun. 16 Last 5 years Share price Subscribe to Oslo Stock Exchange Releases from AKVA by on: Trading volume Trading volume

29 AKVA group highlights Undisputed #1 supplier of technology and services to the aquaculture sector Salmon farming is driven by high demand, high prices and increased technological sophistication New salmon farming growth to come from land-based and more exposed locations with higher technological requirements AKVA group is well positioned for continued growth and margin improvement active dividend policy