Q1 218 Presentation Oslo May 16 th 218 Hallvard Muri, CEO Simon Nyquist Martinsen, CFO
Agenda Highlights Financial performance Outlook Q&A
Highlights Q1 218 by CEO Hallvard Muri
Continued growth in order intake Order intake Overall order intake up 8 % compared to Q1 217 Strong quarter for new orders in the Nordic region with Helgeland Plast and ASA Nordic as the main contributors Americas continues the strong development with order intake of 187 MNOK in Q1 218 (up from 117 MNOK in Q1 217) Slow quarter on new orders for the Land Based segment as some projects have been delayed Last twelve months order intake of 2,521 MNOK, compared to 2,471 MNOK in full year 217 533 31 25 252 2Q16 +8% 778 48 589 557 561 33 33 51 546 69 33 53 13 417 72 92 32 57 42 435 427 421 471 328 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 639 45 51 543 1Q18 SW LBT CBT
High activity across all regions 16% increase in revenue compared to Q1 217 Revenue Europe & Middle East more than doubled the revenue from Q1 217, with ASA Export and AKVA group Scotland as the main contributors. Several large deliveries to Russia in the quarter +16% As for Q4 217, another strong quarter in Americas with revenue more than doubled from Q1 217 Revenue for the Land Based segment is up 22% compared to Q1 217 as we continue to deliver on the order book 48 354 449 51 537 484 557 589 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
Operational leverage taking effect EBITDA up 1 % compared to Q1 217 EBITDA EBITDA margin of 1. %, down from 1.6 % in Q1 217, driven by changes in mix/revenue composition +1% Europe & Middle East ends a strong quarter with an EBITDA of 1 MNOK, up from 6.9 MNOK last year Land Based segment ends the quarter with an EBITDA of 9 MNOK compared to 7 MNOK in Q1 217 Americas (AKVA group Chile, North America and Australasia) ends the quarter with an EBITDA of 6 MNOK, more than four times the EBITDA in Q1 217 43 2Q16 65 54 61 6 59 38 24 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
Eleventh quarter in a row with growth in order backlog Order backlog First quarter 218 Highlights +33% Strong platform for further positive development 1 318 1 38 1 381 1 43 Order backlog end of March of 1.43 BNOK EBITDA of 59 MNOK in the quarter Dividend of.75 NOK paid out in March 218 822 437 385 886 417 468 998 1 77 62 629 412 43 586 647 698 751 537 844 479 951 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Land Based
Operational leverage and profitable growth Revenue +81% EBITDA +119% EPS +114% 325 393 51 589 27 4 54 59,44,45,77,94 215 216 217 218 215 216 217 218 215 216 217 218 Q1 Q1 Q1
Where do we deliver AKVA group s geographical regions Income distribution Q1 218 2%(12%) 18%(7%) 62%(81%) Nordic Americas Export AKVA group Agents and Distributors Nordic EME Americas
Development in OPEX based revenue 15 1 5 24,7% 3,6% 11 18 28,3% 127 23,4% 119 27,1% 29,% 26,1% 146 14 145 22,1% 13 35 3 25 2 15 1 5 The Marine Service business in Chile has started with plans to grow this segment going forward Continued good development for the rental business in Scotland in 218 Marketing and sales activity slowly starting to yield effect for Software segment MNOK 11 (9%) increase in revenue compared to Q1 217 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 % of total revenue OPEX Based revenue
Revenue by product group and species Software LBT S&AS LBT CBT S&AS CBT 48 32 95 68 212 By product groups Q1 218 By species Q1 218 1 354 33 1 76 589 557 537 47 537 51 1 51 41 46 28 1 484 3 484 449 41 18 1 38 449 54 52 37 84 112 124 4 48 38 46 83 82 Non seafood 57 354 44 77 78 14 99 Other species 39 4 12 87 51 427 456 75 367 41 351 37 Salmon 313 244 279 26 287 263 17 557 32 54 471 589 34 52 53 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Cage Based technologies = Cages, barges, feed systems and other operational systems for cage based aquaculture S&AS Cage Based = Service and after sales for cage based aquaculture Software = Software and software systems Land Based technologies = Recirculation systems and technologies for land based aquaculture S&AS Land Based = Service and after sales 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
Q1 Operational Highlights Development in Americas and Chile is still very positive Positive improvements in Russian market into 218 Pipeline of post smolt projects still strong in Norway and other markets, but decisions are slow Increased focus on the Mediterranean markets for Bass and Seabream is starting to yield results Good activity in Marine Service segment, although Q1 is a slower quarter Completed upgrade of manufacturing lines at Helgeland Plast, and are investing in Marine Services (vessels) Atlantis: Granted one license, starting to plan for execution of project Group strategy process see next slide
Group Strategy Focused growth and expansion Increased international focus Land based post smolt Expand services and OPEX based business Product portfolio add-ons Operational excellence Improvement programs within sourcing, logistics and manufacturing Streamline project execution and service delivery Optimize cost base Technology enabling a sustainable and efficient industry Production optimization, digitalization and automation Environmentally friendly, safe and quality solutions Exposed farming Flexible and efficient organization One group Global delivery models Reduce organizational complexity Leadership and competence
Risk management Underwater feeding 1. Atlantis Subsea Farming AS applied for 6 development licenses the 29th of January 216 2. The Norwegian Directorate of Fisheries have informed the company that the company s concept has progressed another step further in the process to get awarded development licenses. 3. The Directorate will go ahead with processing the application limited to 2 licenses, but have rejected the application in terms of the other 4 permits applied for. 4. On May 9th 217 the company appealed the decision of rejecting the 4 permits. 5. On June 16th 217 the Directorate forwarded the appeal to the Norwegian Ministry of Trade, Industry and Fisheries, for their final decision. 6. On December 18 th 217 The Ministry rejected the appeal. The decision is final and cannot be appealed. 7. On February 22 nd 218, The Directorate announced that the Company has been granted one license. Submerge and raise the cage safe and remote Fish health operations Daily operations (dead fish removal, surveillance, cleaning, etc) Air to the salmon Artificial air space
Financial performance Q1 218 by CFO Simon Nyquist Martinsen
Q1 218 Financial highlights 16% growth, a new quarter with strong contributions from Americas, Land Based and Europe & Middle East Last twelve months order intake and revenue now at 2,521 MNOK and 2,167 MNOK respectively 589 51 393 325 Revenue 557 537 484 449 42 48 355 354 344 The order book has grown to 1,43 MNOK at the end of Q1 218, which is 353 MNOK higher than at the end of Q1 217 Q1 Q2 Q3 Q4 215 216 217 218
Q1 218 Financial highlights Sperre is a strong contributor to EBITDA with a total of 8 MNOK in the quarter The entities in the Americas region had another strong quarter with an EBITDA of 6 MNOK, more than four times the EBITDA in Q1 217 8 6 4 2 27 EBITDA (MNOK) 65 59 61 6 54 4 41 43 41 38 27 24 Q1 Q2 Q3 Q4 215 216 217 218 The margins in the Land Based segment improved compared to Q1 17, with an EBITDA margin of 8,5% EBITDA % Software had a good quarter with an EBITDA of 1.5 MNOK, compared to 4.9 MNOK in Q1 217 15 1 5 1,1% 8,2% 1,6% 1,2% 1,% 1,4% 12,1% 1,8% 11,4% 12,6% 7,9% 5,3% 1,8% Q1 Q2 Q3 Q4
Cage Based Technologies Nordic Sperre is ending the quarter with an EBITDA of 8.2 MNOK, compared to 4.4 MNOK in Q1 217 ASA Nordic on same level as in 217 in terms of EBITDA Lower activity and implementation of new manufacturing lines in Helgeland Plast as well as different regional mix affected EBITDA AKVA Marine slightly below expectation due to weather conditions in Norway Americas Strong quarter for Chile with an EBITDA of 4 MNOK compared to 1.9 MNOK last year The operation in North America and Australasia is ending the quarter with an EBITDA of 2.3 MNOK, compared to -.6 MNOK last year EME Continued very good order book for the region Turkey, Greece, Spain and Middle East has started to win business and good positioned as these markets develops Major orders won in Qatar in the quarter. Export to emerging markets had a strong Q1 with an EBITDA of 3.6 MNOK 4 35 3 25 2 15 1 5 Revenue and EBITDA % 45 434 385 11,% 5 46 289 217 Q1 14 13 227 218 Q1 9,1% EBITDA % EME Americas Nordic 14 12 1 8 6 4 2
Land Based Technologies Low order intake in the quarter as decisions have been postponed Several good project opportunities both in Norway, Scotland and Chile for Q2/Q3 Revenue increases as projects in the order book are starting to be delivered 11 1 9 8 7 6 5 Revenue and EBITDA % 19 6 8,1% 8,5% 85 4 13 81 1 8 6 4 Margins are improving compared to Q1 217 4 3 2 Order backlog of 479 MNOK by the end of Q1 2 217 Q1 218 Q1 EBITDA % Americas Nordic
Software AKVA group Software ends the quarter with an EBITDA of 3.5 MNOK compared to 2.9 MNOK in Q1 217 Wise Ehf ends the quarter with an EBITDA of 5.8 MNOK compared to 1.9 MNOK in the same quarter in 217 A sale of small business in Wise ehf gave a gain of 1.9 MNOK We are currently carrying out a strategic evaluation of Wise Ehf in order to realize the potential of the business going forward, no conclusions made yet 6 55 5 45 4 35 3 25 2 15 1 5 Revenue and EBITDA % 41 12,% 1 3 37 217 Q1 22,2% 47 1 5 42 218 Q1 3 2 1-1 -2 EBITDA % EME Americas Nordic
Financials Detailed P&L (MNOK) 218 217 218 217 217 Q1 Q1 YTD YTD Total Order backlog 1 43 1 77 1 43 1 77 1 381 Order intake 639 589 639 589 2 471 P&L OPERATING REVENUES 589 51 589 51 2 88 Operating costs ex depreciations 53 456 53 456 1 848 EBITDA 59 54 59 54 24 Depreciation and amortization 22 2 22 2 83 EBIT 37 34 37 34 157 Net interest expense -3-3 -3-3 -11 Other financial items -4-4 -4-4 -1 Net financial items -7-6 -7-6 -22 EBT 3 28 3 28 136 Taxes 6 8 6 8 36 NET PROFIT 24 2 24 2 1 Of which Land Based is 479 MNOK Increased depreciation mainly due to increased rental CAPEX, investments in AKVA Marine Services and amortization.6 MNOK relates to investment in Atlantis Subsea Farming AS and 1 MNOK in investment in associated company Minority shareholders (49%) in Wise Blue AS Net profit (loss) attributable to: Non-controlling interests -,,1 -,,1,1 Equity holders of AKVA group ASA 24 2 24 2 1 Revenue growth 15,6 % 29,9 % 15,6 % 29,9 % 3,2 % EBITDA margin 1, % 1,6 % 1, % 1,6 % 11,5 % EPS (NOK),94,77,94,77 3,86
Group financial profile remains strong Available cash Working capital Average working capital 23 23 165 256 18 197 26 42 462 18 16 14 12 1 8 6 4 2 4,3% 64 7,5% 19 8,8% 131 36 2,2% 124 6,8% 6,7% 118 122 6,2% 175 8,4% 127 5,8% 9 8 7 6 5 4 3 2 1 15 1 5 7,7% 115 7,1% 7,2% 16 17 85 5,3% 98 5,7% 12 5,5% 1 5,% 135 137 6,5% 6,3% 8 7 6 5 4 3 2 1 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Including 83 MNOK of a 2 MNOK credit facility in Danske Bank, as of Q1 218 and a 2 MNOK revolving credit facility Refinancing of long term loans, increased credit facility and established a revolving credit was finalized in October 217 The graph shows absolute working capital and working capital relative to last twelve months revenue The graph shows 12 months average working capital and average working capital relative to last twelve months revenue
CAPEX (TNOK) CAPEX and CAPEX/Sales % CAPEX breakdown 218 9 8 7 11,2% 14,2% 15 Intangible 6 152 Rental 837 6 1 5 4 3 2 1 5,9% 23 114 1Q 216 4,2% 17 67 2Q 216 6,9% 24 47 3Q 216 5,5% 24 728 4Q 216 57 368 1Q 217 5,9% 31 666 4,% 19 495 78 936 2Q 217 3Q 217 4Q 217 4,3% 25 517 1Q 218 5 18 529 Ordinary CAPEX/Sales % CAPEX *Ordinary includes investment in new facilities in Helgeland Plast
Net interest bearing debt/ebitda of 1.3 Net interest bearing debt (MNOK) and net debt/ebitda Change in net interest bearing debt (TNOK) 4 3 2 1 1,4 1,5 213 212 172 1,1 71,5 1Q16 2Q16 3Q16 4Q16 NIBD/EBITDA (12 mth rolling) 2, 31 1Q17 NIBD 356 298 1,6 279 1,5 1,4 2Q17 3Q17 4Q17 39 1,3 1Q18 2,1 1,75 1,4 1,5,7,35 Net interest bearing debt 31.12.217 356 8 EBITDA -59 172 Income taxes paid 5 497 Net interest paid 2 926 Capex 25 517 Acquisitions / Divestments 1 983 Long-term financial assets -957 Paid dividend 19 355 Buyback own shares - Sale of fixed assets -2 728 Currency effects 6 416 Other changes in working capital -45 546 Net change -46 79 Net interest bearing debt 31.3.218 39 371
Group financial profile remains strong, continued Equity and Equity / Total Balance NIBD / Equity 52 5 48 46 44 42 4 38 36 34 32 3 38,9% 435 1Q16 38,9% 46 2Q16 37,1% 437 3Q16 435 31,6% 4Q16 446 31,3% 1Q17 473 29,4% 2Q17 476 31,4% 3Q17 5 3,1% 4Q17 491 28,% 1Q18 4 3 2 1,16 1Q16,37 2Q16,7,71,63,63,58,49,49 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18,8,7,6,5,4,3,2,1,
Group financial profile remains strong, continued ROCE ROACE 17,8% 14,% 12,4% 9,8% 9,6% 11,1% 13,4% 15,4% 16,5% 18,6% 15,1% 13,2% 11,4% 1,9% 12,7% 14,6% 16,5% 17,% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18
Cash flow statement CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW 218 217 218 217 217 (NOK 1 ) Q1 Q1 YTD YTD Total Net cash flow from operations 46 664 43 49 46 664 43 49 195 535 Net cash flow from change in w orking capital 45 546-74 738 45 546-74 738-122 851 Net cash flow from operational activities 92 211-31 689 92 211-31 689 72 684 Net cash flow from investment activities -23 36-22 831-23 36-22 831-12 672 Net cash flow from financial activities -56 13 19 761-56 13 19 761-22 346 Net change in cash and cash equivalents 12 892-34 759 12 892-34 759-52 334 Net foreign exchange differences -2 841 174-2 841 174 3 759 Cash and cash equivalents at the beginning of the period 116 969 165 543 116 969 165 543 165 543 Cash and cash equivalents at the end of the period 127 2 13 958 127 2 13 958 116 969
Balance sheet BALANCE SHEET 218 217 217 (MNOK) 31.3 31.3 31.12 ASSETS 1 755 1 425 1 663 Intangible non-current assets 589 573 596 Tangible non-current assets 251 189 246 Financial non-current assets 7 3 7 Inventory 247 24 238 Receivables 534 327 459 Cash and cash equivalents 127 131 117 LIABILITIES AND EQUITY 1 755 1 425 1 663 Equity 491 445 5 Minority interest 1 1 Long-term interest bearing debt 346 37 351 Short-term interest bearing debt 91 71 122 Non-interest bearing liabilities 827 539 689
Largest shareholders 2 largest shareholders No of shares % Account name Type Citizenship 13 23 15 51,1 % EGERSUND GROUP AS NOR 3 9 15,1 % WHEATSHEAF INVESTMENT GBR 1 199 372 4,6 % VERDIPAPIRFONDET ALF NOR 525 414 2, % VPF NORDEA KAPITAL NOR 47 246 1,8 % EIKA NORGE NOR 432 232 1,7 % STATOIL PENSJON NOR 422 623 1,6 % VPF NORDEA AVKASTNING NOR 381 3 1,5 % MP PENSJON PK NOR 31 188 1,2 % NORDEA 1 SICAV LUX 3 1,2 % NORDEA NORDIC SMALL FIN 274 3 1,1 % METZLER EURO SMALL + IRL 268 315 1, % VERDIPAPIRFONDET NOR NOR 22 611,8 % MERTOUN CAPITAL AS NOR 21 756,8 % SIX SIS AG Nominee CHE 187 729,7 % VERDIPAPIRFONDET DNB NOR 15,6 % DAHLE BJØRN NOR 146 5,6 % FORTE TRØNDER NOR 145 653,6 % ROGALAND SJØ AS NOR 124 16,5 % OLE MOLAUG EIENDOM AS NOR 17 871,4 % VERDIPAPIRFONDET EIK NOR 22 944 231 88,8 % 2 largest shareholders 2 89 72 11,2 % Other 25 834 33 1, % Total number of shares as per 31.3.218 Origin of shareholders, 5 largest countries No of shares % Origin No of shareholders 2 66 44 77,7 % Norway 115 3 94 461 15,3 % Great Britain 19 452 85 1,7 % Luxembourg 5 38 526 1,5 % Finland 6 343 352 1,3 % Ireland 4 651 475 2,5 % Other 11 Total number of shareholders: 1 159 - from 27 different countries Share development Last 12 months Share price 1 8 6 4 2 apr.17 mai.17 jun.17 jul.17 aug.17 sep.17 okt.17 nov.17 des.17 jan.18 feb.18 mar.18 Last 5 years Share price 1 8 6 4 2 214 215 216 217 218 Subscribe to Oslo Stock Exchange Releases from AKVA by email on: http://ir.akvagroup.com/investor-relations/subscribe Trading volume 5 4 3 2 1 Trading volume 18 15 12 9 6 3
Outlook by CEO Hallvard Muri
AKVA group in brief Leading technology and service partner Listed on Oslo stock exchange since 26 Deliveries in 65 countries over 4 years Companies in 11 countries. 998 employees
Solutions Cage Based Technology Land Based Technology Software
CAPEX Based Revenue OPEX Based Revenue
Order backlog and inflow, 215 through 218 Order backlog Order intake 43 697 547 93 283 1 77 479 647 454414 1 43 951 1 318 62 822 494437 118 698 376385 1 38 629 886 643417 286 751 357 468 998 537 412 649 1 381 264 844 586 385 639 589 51 13 441 368 11 36 486 588 332 34 778 34 533 348 25 8 475 268 283 546 561 557 54 92 72 33 417 214 57 35 63 29 36 454 489 525 287 215 216 217 218 215 216 217 218 215 216 217 218 215 216 217 218 Q1 Q2 Q3 Q4 215 216 217 218 215 216 217 218 215 216 217 218 215 216 217 Q1 Q2 Q3 Q4 218 Strong order backlog, 1,43 MNOK Order intake of 639 MNOK in Q1 218 Land Based Other 34% of total order backlog relates to Land Based Technology (LBT)
Outlook AKVA group Continuing positive outlook for most markets Land Based focus on post smolt, high quote bank Execution of improvement programs, manufacturing, sourcing and logistics Increasing focus and growth outside Nordic Markets Expanding services and OPEX based business, investing in Marine Services Product improvements and optimization
AKVA group has signed LOI to acquire Egersund Net The transaction is based on an enterprise value of 75 million NOK for all shares in Egersund Net AS The seller, Egersund Group, will receive 7 % in shares in AKVA group and the remaining based on cash/debt assumption In total, 7.5 million AKVA shares will be issued to Egersund Group, based on an AKVA price per share of NOK 7, which is NOK 2 above the last three months weighted average share price The transaction excludes properties currently held by Egersund Net The transaction is subject to due diligence, necessary government approvals and entering into of final transaction agreements The transaction is expected to be completed in Q3 218
Egersund Net complement AKVA group s product offering Strategic transaction to become a more complete and innovative supplier Further optimize the total system; cage, net and moorings Offer more complete and efficient services Optimize products life-cycle, including marine operations More efficient customer interactions and interfaces Synergies mainly within sales, both in Nordic and in export markets Transaction will strengthen AKVA group s share of opex based business
Egersund Net overview Products and Services Revenue and EBITDA Revenue composition Nets and mooring solutions for the fish farming industry In addition to traditional fish farming nets, Egersund offers top nets, tube nets and special products such as sweep nets, fish sorting and mort collector nets Revenue mnok 7 6 586 5 Adjusted EBITDA 1-15% 63 Products Services Full range services; wash/disinfection, repair and antifouling/coating 4 3 46% 54% 2 1 88 76 14-16 % 216 217 218 B * Pro forma * Egersund Net AS, 217
Egersund Net overview Transaction scope Locations Egersund Net AS 1 % 1 % 5 % 5 % UAB Egersund Net Egersund Trading AS NOFI AS Emel Balik 7 % 33 % ~1 % 12 % Grading Systems (UK) Ltd. Atlantis Subsea Farming AS Blue Planet AS Blue Farm AS