Q1 2015 Presentation Oslo - May 8 th, 2015 Trond Williksen, CEO Eirik Børve Monsen, CFO
Agenda 1 Highlights 2 Financial performance 3 Outlook 4 Q&A
Highlights Q1 2015 - by CEO Trond Williksen 3
On track - record high order backlog First quarter 2015 Highlights Overall good performance on track Benefitting from being a diversified Group both geographically and product vice Strong first quarter in Chile, Canada and UK A good start for Cage Based segment in Norway, but with a different product mix compared to Q1 2014, and some of the deliveries moving in to Q2 2015 Slow start for the Land Based segment and for export to emerging markets High market activity resulting in the best order backlog ever 547 MNOK 4
MNOK MNOK On track - record high order backlog Revenue +24% EBITDA +53% 310 325 32 27 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 5
MNOK MNOK On track - record high order backlog Order Inflow +51% Order Backlog +21% 243 367 520 452 547 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 6
AKVA group uniquely positioned for future growth The most recognized brand in aquaculture technology Leading technology solutions and service partner to the global aquaculture industry Global presence - subsidiaries in 8 countries 740 employees Market cap of NOK ~670m and net debt of NOK 82m 1 2 4 Cage-based Land-based Software 3 Plastic and steel cages Infrastructure Feed systems, sensors and cameras Land-based facilities Land-based equipment Software Technology and farming services
Presence in all main farming regions Map of activities Revenue per region, Q1 2015 Export 12 % Americas 21 % Nordic 67 % Nordic Americas Export
Strategic priority to increase the proportion of reoccurring revenue Technology sale vs reoccurring revenue, Q1 2015 Reoccurring 28 % Comments Introduction of rental business model in Norway in Q4 2014. Already successfully introduced in UK and Canada. First installations of rental equipment in Norway done in Q1 2015 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 for the customer Acquisition of YesMaritime in 2014, a provider of diving, ROV and other services to the salmon farming sector (Farming services) Technology 72 % Development of Farming Services still in an early stage opportunity for consolidation Aim of increasing relative share of reoccurring revenue through software and services by developing software, farming services, technology services and rental further
Revenue by product groups and species By product groups Q1 2015 By species Q1 2015 Land based 11 % Non Seafood 11 % Software 9 % Other Species 9 % Cage based 80 % Salmon 80 % Cage based technologies = Cages, barges, feed systems and other operational systems for cage based aquaculture Software = Software and software systems Land based technologies = Recirculation systems and technologies for land based aquaculture Salmon = Revenue from technology and services sold to production of salmon Other species = Revenue from technology and services sold to production of other species than salmon Non Seafood = Revenue from technology and services sold non seafood customers 10
Centralized operations and wireless communication in the hotspot Technology trend aimed at improving farming performance by enhancing overview, control and specialized feeding competence through centralized control centers AKVA group supports the trend through development of the new digital wireless communication system and AKVAconnect linking the operations in the farms to a centralized operation centers Trend supports a significant growth in sales for AKVA on sensors, cameras, control systems and solutions for automation as experienced in 2015 11
Contract on land based cleaner-fish facility new sealice prevention technology Contract of 23.5 MNOK signed with Namdal Rensefisk AS for technology to new cleaner-fish production facility owned and operated by Bjørøya Fiskeoppdrett AS, Aquagen AS, Midt Norsk Havbruk AS and Nova Sea AS Use of Cleaner-fish at the core of the strategy solving the sealice challenge facing the salmon industry Namdal Rensefisk AS is in the forefront of developing farming of cleaner fish as a sustainable way of handling sealice in the Norwegian salmon industry The land based facility holds new technologies enabling sustainable land based farming of cleaner fish 12
Financial performance Q1 2015 by CFO Eirik Børve Monsen 13
Q1 2015 - Financial highlights Revenue Good overall financial performance taking advantage of the diversified operations Rental business in Norway with a good start with P&L impact from next quarter MNOK 350 300 250 200 150 310325 301 330 305 2012 2013 2014 Strong balance sheet maintained 100 50 2015-1Q 2Q 3Q 4Q 14
Q1 2015 - Financial highlights, continued MNOK 40 35 30 25 20 15 10 5 - -5-10 EBITDA 1Q 2Q 3Q 4Q 2012 2013 2014 2015 MNOK 12% 10% 8% 6% 4% 2% 0% -2% -4% EBITDA % 1Q 2Q 3Q 4Q 2012 2013 2014 2015 Stabilizing on a historical higher EBITDA-level both in NOK and in % Medium term target of 10% EBITDA still valid 15
Cage Based Technologies 300 250 200 150 100 CBT (Revenue & EBITDA %) 259 241 39 62 64 24 10,9 % 155 156 8,9 % 17% 15% 13% 11% 9% Nordic Good start of the year, but with slightly different product mix YoY Americas Strong Q1 in Chile - the positive development in this market continues. However we continue to monitor the development closely Canada continues the good performance from 2014 with the best Q1 ever Export UK continues the good performance from 2014 with the best Q1 ever 50 7% Turkey have a profitable Q1 with good sales 0 2014 Q1 2015 Q1 5% Low activity in Export to emerging markets YoY Nordic Americas Export EBITDA % 16
Software 35 SW (Revenue & EBITDA %) 30 25 26 1 4 31 1 5 17% 15% AKVA group Software AS continues to deliver stable and high margins with improved revenue and margins YoY 20 15 10 22 11,4 % 25 14,0 % 13% 11% Wise lausnir ehf have a good start of the year with improved performance YoY Software continues to invest in new product modules, which is expected to strengthen the financial performance of the SW segment further 5 9% 0 2014 Q1 2015 Q1 7% Nordic Americas Export EBITDA % 17
Land Based Technologies LBT (Revenue & EBITDA %) 50 45 40 35 43 2 35 1 24% Overall a slow start for LBT segment in Q1 30 25 14% AKVA group Denmark have a good order backlog, however delayed start-up and progress in some projects explains the low margin in LBT in Q1 20 15 41 5,9 % 34 4% Plastsveis is on track with a profitable Q1 and a good order backlog 10 5-1,9 % 0 2014 Q1 2015 Q1 Nordic Americas EBITDA % -6% 18
Financials Detailed P & L P&L 2015 2014 2014 (MNOK) Q1 Q1 Total OPERATING REVENUES 325,0 310,4 1 246,1 Operating costs ex depreciations 298,4 278,7 1 142,7 EBITDA 26,6 31,7 103,4 Depreciation 10,5 8,3 35,7 EBIT 16,1 23,5 67,6 Net interest expense -1,3-1,5-4,8 Other financial items 1,5-1,4 0,0 Net financial items 0,2-2,9-4,7 EBT 16,3 20,5 62,9 Taxes 4,9 4,9 8,4 NET PROFIT 11,4 15,6 54,5 Low interest cost du to low net debt and low interest rate Mainly currency considered as acceptable level Minority shareholders (30%) in Plastsveis AS Net profit (loss) attributable to: Non-controlling interests 0,1 0,1-0,6 Equity holders of AKVA group ASA 11,3 15,5 55,1 Revenue growth 4,7 % 39,7 % 35,6 % EBITDA margin 8,2 % 10,2 % 8,3 % EPS (NOK) 0,44 0,60 2,13 19
MNOK Group financial profile - strong Available cash ROCE -6 MNOK +3.9 percentage points 15,2 % 14,1 % 12,3 % 153 144 183 144 147 8,4 % 8,3 % 63 86 68 96 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 MNOK MNOK Group financial profile strong, continued Working capital Equity 180 MNOK MNOK 160 140 20,0 % 0.7 percentage point improvement 25 % 20 % 420 400 +56 MNOK 52% 50% 120 100 80 60 40 20 0 162 11,5 % 116 10,1 % 126 10,8 % 137 15 % 10 % 5 % 0 % 380 360 340 320 300 44,4 % 44,3 % 42,8 % 338 342 342 339 347 365 375 389 403 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 48% 46% 44% 42% 40% 38% Total Equity Equity Ratio Overall low working capital level despite record high activity Due to strong capital discipline Increased activity in Chile gives WC-intensive growth Good nominal increase in equity YoY due to profitable operation Note: Dividend payment of 25.8 MNOK in Q4 2014 21
Net debt/ebitda of 0.8x 150 120 90 60 30 - Net debt (MNOK) and net debt/ebitda 122 4,3 108 94 3,2 92 89 82 75 70 2,4 1,6 44 1,3 1,0 0,9 0,8 0,4 Q1-2013 Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 5,0 4,0 3,0 2,0 1,0 - Change in net debt (TNOK) Net debt 31.12.2014 88 511 EBITDA -26 610 Income taxes paid -32 Net interest paid 1 309 Capex paid 10 994 Paid dividend - Sale of fixed assets -698 Currency effects -1 841 Other changes in working capital 10 784 Net change -6 095 Net debt 31.03.2015 82 416 Net interest bearing debt NIBD/EBITDA(12months rolling) No dividend disbursement in Q2. Next possible dividend pay-out will according to the new dividend policy be in Q4 based on the cash flow in Q2 and Q3 22
Balance sheet BALANCE SHEET 2015 2014 (MNOK) 31.03 31.03 ASSETS 942 782 Intangible non-current assets 274 245 Tangible non-current assets 76 56 Financial non-current assets 2 2 Inventory 183 151 Receivables 349 266 Cash and cash equivalents 57 62 LIABILITIES AND EQUITY 942 782 Equity 402 344 Minority interest 2 2 Long-term interest bearing debt 126 122 Short-term interest bearing debt 14 10 Non-interest bearing liabilities 398 303 23
CAPEX Capex (TNOK) and capex / sales (%) CAPEX breakdown Q1 2015 (TNOK) 20 000 18 633 20% 18 000 16 000 14 000 12 000 10 000 15 621 8 628 12 266 10 982 9 133 11 017 10 994 18% 16% 14% 12% 10% 8 898 2 096 8 000 6 000 4 000 6 138 3% 6% 5% 5% 4% 3% 3% 6% 3% 8% 6% 4% 2 000 2% 0 Q1-2013 Q2-2013 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 0% Ordinary CAPEX including rental Capitalized R&D expenses 24
Outlooks by CEO Trond Williksen 25
Order backlog and inflow Highest order backlog ever Order backlog Order inflow MNOK 600 500 400 300 200 100-547 520504 452 1Q 2Q 3Q 4Q 2012 2013 2014 2015 MNOK 500 450 400 350 300 250 200 150 100 50-467 460 367 243 1Q 2Q 3Q 4Q 2012 2013 2014 2015 Highest order backlog ever The good market activity continues 26
Maintaining positive outlook Strong overall short term outlook due to high market activity and order backlog. Our target is to outperform 2014 Strong demand in the Nordic market is expected to continue Positive operational development in the Chilean market is expected to continue in the next quarters due to a solid order backlog. However, our Chilean customer s struggle with low earnings brings some uncertainty to investments in the medium term. The Volcano eruption in Chile might have a small impact short term on CBT investments, but pose an opportunity for LBT. We are monitoring the Chilean market closely and will adjust our operation according to the development UK and Canada are expected to continue to perform well in the next quarters with a significant order backlog and a large portion of reoccurring business Land based is expected to have a positive development with a growing order backlog and prospect mass. Historically high market interest for LBT Exports to emerging markets will continue to fluctuate short term, but represents a large potential over time. New geographical regions continuously emerge as markets for our technology We continue our effort to build service and after sales as a key business element in all markets and segments 27
Q & A 28