Q4 2015 Presentation Oslo - February 19 th, 2016 Trond Williksen, CEO Eirik Børve Monsen, CFO
Agenda 1 Highlights 2 Financial performance 3 Outlook 4 Q&A
Highlights Q4 2015 - by CEO Trond Williksen 3
MNOK Best year ever - second year in a row Fourth Quarter 2015 and year end Highlights All business segments with good performance in Q4 best Q4 ever 2014 vs 2015 A broader mix of products and services contributing to revenues in 2015 compared to earlier years becoming a stronger and more diversified AKVA group 1 400 1 200 8,3 % 9,5 % 10,0 % 8,0 % Land based with best quarter ever becoming an important part of AKVA Profitable Chile operation in 2015 despite challenging market conditions Ending the year with the best order backlog ever 800 600 400 1 246 1 425 6,0 % 4,0 % 1 000 Dividend of NOK 1.00 per share paid in November 200 2,0 % Best year ever financially growth in revenues and margins 0 103 135 2014 2015 0,0 % Strong financial position Operating revenue EBITDA EBITDA % 4
MNOK MNOK Best Q4 ever more diversified - smoothing out some of the seasonality Revenue +13% EBITDA +103% 305 344 27 13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 5
MNOK MNOK Best order backlog ever higher degree of LBT and OPEX based revenue Order Inflow Order Backlog +152% +29% 505 460 350 504 649 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Good market activity and sales so far in the new year 6
MNOK MNOK Building a stronger AKVA - step by step Revenue +14% EBITDA +31% 743 1 246 1 425 103 135 2010 2011 2012 2013 2014 2015-10 2010 2011 2012 2013 2014 2015 7
AKVA group uniquely positioned for future growth Leading technology solutions and service partner to the global aquaculture industry Global presence - subsidiaries in 8 countries 670 employees Market cap of NOK ~1250m and net debt of NOK 134m
Presence in all main farming regions Map of activities Revenue per region, Q4 2015 Export 12 % Americas 15 % Nordic Americas Export Nordic 73 %
Strategic priority to increase the proportion of OPEX based revenue OPEX based vs CAPEX based revenue, Q4 2015 OPEX based revenue 26 % CAPEX based revenue 74 % Comments OPEX based revenue defined as our revenue booked as OPEX in our customers P&L Aim of increasing relative share of OPEX based revenue through software and services by developing software, farming services, technology services and rental further Introduction of rental business model in Norway in late 2014. 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) - reducing 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) Development of Farming Services still in an early stage opportunities for consolidation
Revenue by product groups and species By product groups Q4 2015 By species Q4 2015 Software 11 % Land based 25 % Cage based 64 % Non Seafood 10 % Other Species 12 % Salmon 78 % 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 to non seafood customers 11
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 12
Minor adjustment in dividend policy Change of timing for the half yearly dividend policy to be based on 1 st and 2 nd half of the year (instead of Q4 Q1 and Q2 Q3) Rationale: Gives a more intuitive division of the year with 2 nd half dividend being announced in connection with the Annual General Meeting Evens out more of the seasonality's in cash flow during the year Next possible dividend pay out will be after 1st half 2016, i.e. will be announced together with the 2016 Q2 financials 13
Financial performance Q4 2015 by CFO Eirik Børve Monsen 14
Q4 2015 - Financial highlights Revenue Good overall financial performance continues taking advantage of the diversified operations Land based on track after first quarter with Aquatec Solutions included Profitable operation in Chile in 2015 despite challenging market conditions due to higher level of service and tight cost control WiseDynamics in Canada divested in November 2015 marginal impact on Group financials Share buyback program finalized in November 2015 Shares awarded to employees in January 2016 according to the announced incentive scheme to employees Dividend NOK 1 per share paid in November 2015 MNOK 450 400 350 300 250 200 150 100 50-1Q 2Q 3Q 4Q 2012 2013 2014 2015 15
Q4 2015 - Financial highlights, continued EBITDA EBITDA % MNOK 45 40 35 30 25 20 15 10 5 - - 5-10 1Q 2Q 3Q 4Q 2012 2013 2014 2015 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% 1Q 2Q 3Q 4Q 2012 2013 2014 2015 Stabilizing on a historical higher EBITDA-level both in NOK and in % Getting close to the medium term target of 10% EBITDA on a annual basis 16
Cage Based Technologies 250 200 CBT (Revenue & EBITDA %) 4,4 % 4,6 % 223 220 33 40 5% 5% 4% Nordic Decent performance in Q4, which traditionally is a low season quarter in Nordic CBT Good performance continued with a slightly different product mix compared to 2014 - a wider range of products contribute to revenue and profit in 2015 vs 2014 150 50 44 4% 3% Americas Chile delivering one of the best years ever margin wise due to reduced cost base and higher level of service 100 3% 2% Canada with a great Q4 and ending the best year ever. Lean and efficient operation 50 141 136 2% 1% 1% Australia small but profitable operation best year ever Export UK also ended their best year ever with high level of OPEX based revenue 0 2014 Q4 2015 Q4 0% Turkey best year ever experiencing increased activity in the Sea Bass and Sea Bream industry Nordic Americas Export EBITDA % Export to emerging markets slow, but some activity - Iran 17
45 Software SW (Revenue & EBITDA %) 25% 40 35 30 25 30 0 5 14,1 % 38 1 3 22,4 % 20% 15% AKVA group Software AS continues to deliver stable and high margins with improved revenue and margins YoY Wise lausnir ehf with improved performance YoY 20 15 10 5 25 34 10% 5% WiseDynamnics in Canada, a subsidiary of Wise ehf was divested in November 2015. Marginal numbers for the group and gave a marginal gain of MNOK 1.5 in Q4 EBITDA Software continues to invest in new product modules, which is expected to strengthen the financial performance of the SW segment further 0 2014 Q4 2015 Q4 0% Nordic Americas Export EBITDA % 18
Land Based Technologies 100 90 80 LBT (Revenue & EBITDA %) 86 4 40% 30% 70 25% of total Group revenue in Q4 60 50 40 52 6 9,8 % 82 20% 10% 9.8% EBITDA in Q4 - significant improved performance YoY and QoQ Plastsveis AS on track with good performance in 2015 30 20 10 46-1,1 % 0% Aquatec Solutions A/S included in the Group P&L from Q4 and onwards. Good performance as expected AKVA group Denmark A/S with a decent Q4. Still potential for further improvements financially 0 2014 Q4 2015 Q4 Nordic Americas EBITDA % -10% 19
Financials Detailed P & L P&L 2015 2014 2015 2014 (MNOK) Q4 Q4 Total Total OPERATING REVENUES 344,1 305,0 1 425,3 1 246,1 Operating costs ex depreciations 316,9 291,7 1 290,2 1 142,7 EBITDA 27,1 13,4 135,2 103,4 Depreciation 14,0 9,5 47,5 35,7 EBIT 13,2 3,9 87,7 67,6 Net interest expense -1,7-0,7-5,4-4,8 Other financial items -4,6-0,9-4,3 0,0 Net financial items -6,3-1,6-9,6-4,7 EBT 6,9 2,3 78,1 62,9 Taxes -0,8-6,4 19,7 8,4 NET PROFIT 7,6 8,6 58,4 54,5 Increased depreciation mainly due to increased rental CAPEX and amortization Low interest cost due to low net debt and low interest rate. Increase explained by financial lease mostly related to rental Mostly currency and acquisition cost - considered as an acceptable level Minority shareholders (30%) in Plastsveis AS Net profit (loss) attributable to: Non-controlling interests 0,4-0,2 1,6-0,6 Equity holders of AKVA group ASA 7,3 8,9 56,8 55,1 Revenue growth 12,8 % 24,1 % 14,4 % 35,6 % EBITDA margin 7,9 % 4,4 % 9,5 % 8,3 % EPS (NOK) 0,28 0,34 2,20 2,13 20
4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 MNOK MNOK Group financial profile remains strong Available cash Working capital +16 MNOK 160 MNOK 14 % 96 153 144 183 144 147 157 226 160 MNOK 140 120 100 80 60 40 20 11,6 % 106 10,1 % 9,1 % 8,8 % 126 127 126 12 % 10 % 8 % 6 % 4 % 2 % 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 0 0 % Including a 90 MNOK credit facility in Danske Bank Cash in Q3 2015 includes the financing of the adjustment amount in the Aquatec Solution acquisition Continued strong working capital level despite record high activity Due to strong capital discipline
MNOK Group financial profile remains strong, continued ROCE Equity 15,2 % 14,1 % 12,3 % 15,2 % 13,9 % 15,0 % 500 450 400 46,9 % 43,1 % +39 MNOK 40,0 % 50% 45% 40% 350 35% 8,4 % 8,3 % 300 250 200 30% 25% 20% 150 15% 100 10% 3,3 % 50 0 339 347 365 375 389 403 417 443 428 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 5% 0% Q4-2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 Total Equity Equity % Good nominal increase in equity YoY due to profitable operation Dividend payments of 25.7 MNOK in Q4 2015 and 25.8 MNOK in Q4 2014 22
Net debt/ebitda of 1.0x Net debt (MNOK) and net debt/ebitda Change in net debt (TNOK) 150 120 90 60 30-136 1,6 1,3 98 92 89 1,0 82 75 76 1,0 70 0,9 0,8 0,8 44 0,7 0,4 Q4-2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 Net interest bearing debt NIBD/EBITDA(12months rolling) - 2,0 1,0 Net debt 30.09.2015 97 877 EBITDA -27 130 Income taxes paid 1 182 Net interest paid 1 736 Capex paid 32 853 Acquisitions / Divestments -5 500 Paid dividend 25 736 Buyback own shares 3 264 Sale of fixed assets -855 Currency effects -4 023 Other changes in working capital 10 976 Net change 38 240 Net debt 31.12.2015 136 117 23
Balance sheet BALANCE SHEET 2015 2014 (MNOK) 31.12 31.12 ASSETS 1 070 904 Intangible non-current assets 348 278 Tangible non-current assets 103 74 Financial non-current assets 8 2 Inventory 181 167 Receivables 320 329 Cash and cash equivalents 110 54 LIABILITIES AND EQUITY 1 070 904 Equity 425 388 Minority interest 3 2 Long-term interest bearing debt 188 129 Short-term interest bearing debt 57 14 Non-interest bearing liabilities 396 372 24
CAPEX Capex (TNOK) and capex / sales (%) CAPEX breakdown 2015 (TNOK) 35 000 32 853 20% 30 000 25 000 18% 16% 14% 29 700 20 000 18 633 16 037 15 871 10% 12% 10% 19 113 15 000 10 000 5 000 12 266 5% 10 982 4% 9 133 11 017 3% 3% 6% 10 994 3% 4% 4% 8% 6% 4% 2% 26 941 0 Q4-2013 Q1-2014 Q2-2014 Q3-2014 Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015 0% Ordinary Rental Intagible (R&D) MNOK 13 of Q4 2015 CAPEX is rental MNOK 46 of 2015 CAPEX is not rental i.e. in line with previous years 25
Largest shareholders 20 largest shareholders No of shares % Account name Type Citizenship 13 203 105 51,1 % EGERSUND GROUP AS NOR 3 900 000 15,1 % WHEATSHEAF INVESTMENT GBR 814 886 3,2 % VERDIPAPIRFONDET ALFRED NOR 539 300 2,1 % MP PENSJON PK NOR 518 000 2,0 % SKANDINAVISKA ENSKILDA LUX 489 417 1,9 % EIKA NORGE NOR 397 904 1,5 % STATOIL PENSJON NOR 390 000 1,5 % VERDIPAPIRFONDET DNB NOR 301 700 1,2 % VPF NORDEA KAPITAL NOR 300 000 1,2 % MERTOUN CAPITAL AS NOR 238 692 0,9 % OLE MOLAUG EIENDOM AS NOR 208 100 0,8 % VERDIPAPIRFONDET EIKA NOR 196 300 0,8 % DAHLE BJØRN NOR 180 000 0,7 % VPF NORDEA AVKASTNING NOR 173 550 0,7 % ROGALAND SJØ AS NOR 166 000 0,6 % HAVBRUKSCONSULT AS NOR 146 537 0,6 % UBS (LUXEMBOURG) S.A NOM LUX 130 000 0,5 % SIX SIS AG NOM CHE 123 000 0,5 % AKVA GROUP ASA NOR 114 752 0,4 % MOLAUG OLE NOR 22 531 243 87,2 % 20 largest shareholders 3 303 060 12,8 % Other 25 834 303 100,0 % Total number of shares as per 31.12.2015 Origin of shareholders, 5 largest countries No of shares % Origin No of shareholders 20 419 531 79,0 % Norway 800 4 013 502 15,5 % Great Britain 12 675 577 2,6 % Luxembourg 3 251 280 1,0 % USA 8 215 225 0,8 % Switzerland 5 259 188 1,0 % Other 41 Total number of shareholders: 869 - from 20 different countries Share development Last 12 months Share price 60 50 40 30 20 10 0 jan. 15 feb. 15 mar. 15 apr. 15 mai. 15 jun. 15 jul. 15 aug. 15 sep. 15 okt. 15 nov. 15 des. 15 Last 5 years Share price 60 40 20 0 2011 2012 2013 2014 2015 Subscribe to Oslo Stock Exchange Releases from AKVA by email on: http://ir.akvagroup.com/investor-relations/subscribe Trading 120 000 000 100 000 000 80 000 000 60 000 000 40 000 000 20 000 000 0 Trading volume 180 000 000 150 000 000 120 000 000 90 000 000 60 000 000 30 000 000 0 26
Outlooks by CEO Trond Williksen 27
Order backlog and inflow Order backlog Order inflow MNOK 700 MNOK 600 600 500 500 400 300 200 100 2012 2013 2014 2015 400 300 200 100 2012 2013 2014 2015-1Q 2Q 3Q 4Q - 1Q 2Q 3Q 4Q Highest order backlog ever Best second half order inflow ever - MNOK 854 in order inflow in 2H 2015 vs MNOK 661 in 2H 2014 The good market activity continues 28
Maintaining positive outlook Good mid term outlook due to high market activity and large order backlog, especially in the Nordic market segment Strong demand in the Nordic cage based segment continues into the new year, with shift towards sale of technology for more efficient production Land based segment with growing activity - is expected to continue - becoming a larger part of AKVA UK and Canada experience slightly less project sales so far compared to last year still expected to perform well Continued low expectations in Chile due to challenging situation for our Chilean customers. Our exposure in Chile is reduced over the last years Turkey and Australia are expected to continue to perform well in the next quarters with good order backlog Exports to emerging markets with a more optimistic start of the year. Activity still expected to fluctuate due to nature of business We continue our effort to build service and after sales as a key business element in all markets and segments 29
Q & A 30