Akva Group Asa · OSL:AKVA
Akva Group Asa — Q4 2019 Earnings Presentation
43 slides from Akva Group Asa's earnings presentation, Feb 14, 2020
Slide 1: Q4 2019 Presentation
Q4 2019 Presentation Oslo – 14 February 2020 Knut Nesse, CEO
Slide 2: Agenda
Agenda Highlights Financial performance Outlook Q&A
Slide 3: Highlights Q4 2019
Highlights Q4 2019
Slide 4: Strong order intake
Strong order intake Order intake • Order intake of 1425 MNOK +43% 1 425 • 500 MNOK order with Nordic Aqua Partners for a land based 19 SW salmon farming facility in China 1 107 • 10,3 MEUR contract with Cooke Aquaculture for a smolt 997 44 778 facility in Chile. 46 33 815 LBT 639 300 760 218 38 50 •
Slide 5: Revenue development
Revenue development Revenue • The software business sold in 2019 was included with 29 MNOK in Q4 2018 -10% • Americas (Chile) and the Nordics have both significant 18 higher order books compared to last year, but less revenue in the quarter 852 • Land Based do also have significant higher order book
Slide 6: EBITDA development
EBITDA development EBITDA -171% 115 • EBITDA of minus 40 MNOK in the quarter, including 15 MNOK in effect of reclassification due to IFRS 16 (leases) 97 101 18 7 7 7 • The software business sold in 2019 was included with 5 MNOK in Q4 8 8 8 2018 71 60 59 57 • Americas has improved EBITDA margins comp
Slide 7: Exceptional items in Q4
Exceptional items in Q4 Profit warning sent January 20th as preliminary Q4 numbers was poor compared to expectations: Exceptional high guarantee costs within the Nordic Cage based segment Several projects within cage based with cost overruns Bad debt and claims within the Land Based segment
Slide 8: Review of Land Based activities
Review of Land Based activities What happened and why Late awareness of cost overruns in projects Incorrect financial recognition from project accounting Actions in progress Third party evaluation of project management competence Strengthening the organization with new positions Evalua
Slide 9: Record high order backlog
Record high order backlog • Fourth quarter 2019 – Highlights Order backlog – Order backlog at end of December of 2.3 BNOK +69% – Included orders in Q4 for a RAS facility in Chile with Cooke (10,3 2 294 MEUR) and a RAS facility (full grow out) in China with Nordic Aqua Partners for 500 MNOK 1 611 1 5
Slide 10: Key financial metrics
Key financial metrics Revenue EBITDA EPS +92% +89% 0,42 0,47 3 077 272 240 238 3,86 2 579 3,17 2 088 144 0,34 1 603 0,59 1,06 0,44 Q4 16 Q4 17 Q4 18 Q4 19 Q4 16 Q4 17 Q4 18 Q4 19 Q4 16 Q4 17 Q4 18 Q4 19 YTD YTD YTD Amortization from intangible assets related to acquisitions In August 2018, number of
Slide 11: Our presence
Our presence AKVA group Agents and distributors
Slide 12: Revenue in geographical regions
Revenue in geographical regions AKVA group’s geographical regions – absolute and relative 852 798 771 726 637 655 627 589 63% 66% 61% 65% 633 70% 74% 70% 76% 603 541 506 412 392 428 372 19% 22% 20% 22% 113 139 155 144 24% 20% 125 177 145 17% 17% 136 18% 14% 17% 13% 105 90 106 74 76 83 9% 7% 10% 42 5
Slide 13: Development in OPEX based revenue
Development in OPEX based revenue 300 33,8% 35 • Egersund Net contributing 82 MNOK in the quarter, with 32,3% 31,2% 30,1% increased margins this quarter compared to 4Q 2018 250 28,2% 27,5% 30 25 • Stable development for the rental business (Scotland and 200 22,1% 22,5% 112 94 90 104 Norway) in 2019
Slide 14: Revenue by product group and species
Revenue by product group and species By product groups – Q4 2019 By species – Q4 2019 852 852 798 56 798 771 1 44 771 726 0 39 726 23 66 118 0 28 13 68 95 655 627 637 1 44 92 655 627 637 74 35 1 16 20 Software 589 42 1 40 129 189 589 55 47 42 37 1 47 1 218 212 109 Non seafood 52 46 51 LBT S&AS 116 1
Slide 15: Q4 – Operational Highlights
Q4 – Operational Highlights • Challenging quarter with various exceptional items causing profit warning, and subsequently findings of irregularities within project accounting within Land Based • Solid order intake within Land Based and first large order for a full grow out salmon facility signed, wi
Slide 16: New management structure
New management structure CEO* CFO* Marketing & Communications CAGE BASED CAGE BASED CAGE BASED DIGITAL LAND BASED INTERNATIONAL NORDIC EGERSUND NET Supply Chain & Business Excellence COO* COO* COO* COO* COO* Research & Development Americas Nordic Egersund Net Software Denmark CTO* UK Nordic Services
Slide 17: Group Strategy process initiated – key themes
Group Strategy process initiated – key themes Land Based Digital On-growing Data Platform Post Smolt Computer vision / AI Innovation Learning & Development Prioritization People and competence Fish health concepts Project and contract management
Slide 18: Separate focus on full grow out RAS facilities
Separate focus on full grow out RAS facilities • AKVA as strategic partner in NAP • Potential equity stake to secure partnership and successful execution • Learning and developing by a close follow-up on all technical, operational and biological performance measures • Additional projects in pipeline
Slide 19: Financial performance Q4 2019
Financial performance Q4 2019
Slide 20: Q4 2019 – Financial highlights
Q4 2019 – Financial highlights Revenue • Last twelve months order intake and revenue now at 852 4,014 MNOK and 3,077 MNOK respectively 798 771 726 • The order book has increased to 2,294 MNOK at the end of 627 637 655 Q4 2019, an increase of 783 MNOK in Q4 589 537 557 510 484 • Strong growth in expo
Slide 21: Q4 2019 – Financial highlights
Q4 2019 – Financial highlights 150 EBITDA (MNOK) • Solid margins in Americas, although lower activity and absolute 115 contribution compared to Q4 2018. 97 101 100 54 59 65 52 61 71 60 57 50 40 43 38 24 • Nordic CBT segment improved from Q4 2018, with solid results from 0 net washing in sea and Sper
Slide 22: Cage Based Technology
Cage Based Technology Nordic Revenue and EBITDA % 800 8 • Compared to Q4 2018, improved results from the Norwegian CBT business (excluding Egersund Net) 700 6,2% 5,9% • Continued strong improvement in quarter from AKVA 600 553 6 Marine Services (net cleaning in sea), and Sperre 529 41 (ROV) 500 82 1
Slide 23: Cage Based Technology
Cage Based Technology Americas Revenue and EBITDA % • 4 barges in backlog, delivered from shipyard in Vietnam, 800 8 for delivery to customer in Q3/Q4 2020 700 • Solid and improved EBITDA margin in Chile in the Q4 2019 6,2% 5,9% compared to same quarter last year 600 553 6 529 41 EME 500 82 152 • De
Slide 24: Land Based Technology
Land Based Technology Revenue and EBITDA % 129 10,0% • A contract with Cooke in Chile for 10,3 MEUR 130 1 20 as well as a contract with Nordic Aqua Partners 120 18 110 10 were signed in Q4 2019 110 0 0 100 16 • Strong order backlog of 1,2 billion NOK at the -10 90 end of 2019 80 -20 70 -30 • Low act
Slide 25: Software
Software • Last year revenue and EBITDA included 29 MNOK Revenue and EBITDA % 45 44 70 and 5 MNOK respectively, from the divested 1 software business on Iceland 40 4 60 • New recurring business model is being 35 developed for control systems 50 30 25 40 • Renewal of Fishtalk creates more sales 33,6%
Slide 26: Financials – Detailed P&L
Financials – Detailed P&L (MNOK) 2019 2018 2019 2018 2018 Q4 Q4 YTD YTD Total Order backlog 2 294 1 356 2 294 1 356 1 356 Order intake 1 438 997 4 014 2 555 2 555 • Of which Land Based is 1,274 MNOK P&L OPERATING REVENUES 655 726 3 077 2 579 2 579 IFRS 16 OPEX* -15 - -59 - - • Investment in subsidia
Slide 27: Group financial profile – remains strong
Group financial profile – remains strong Available cash Working capital Average working capital 485 379 399 500 465 18 400 14 16,1% 12,6% 12,7% 450 356 14,8% 16 350 304 12 400 13,8% 10,7% 9,4% 14 10,2% 290 300 350 292 262 10 12 300 10,3% 274 250 8,9% 10 8 250 200 565 535 8 6 469 200 150 422 6 336 15
Slide 28: CAPEX
CAPEX (TNOK) CAPEX and CAPEX/Revenue % CAPEX breakdown 2019 90 000 14,2% 15 Rental 80 000 Intangible 20 518 70 000 44 309 60 000 10 8,4% 50 000 6,8% 5,8% 6,7% 40 000 78 936 30 000 4,3% 4,2% 64 893 5 4,0% 42 852 2,6% 42 225 3,0% 43 888 20 000 35 556 10 000 25 517 23 913 103 422 19 495 16 881 0 0 Ordi
Slide 29: Net interest bearing debt/EBITDA of 2,3
Net interest bearing debt/EBITDA of 2,3 Net interest bearing debt (MNOK) and net debt/EBITDA Change in net interest bearing debt (TNOK) 800 3,15 Net interest bearing debt 30.09.2019 661 805 726 EBITDA 40 250 700 662 2,80 632 2,6 2,5 632 Income taxes paid -6 928 605 600 2,2 2,45 531 Net interest paid
Slide 30: Group financial profile – remains strong, continued
Group financial profile – remains strong, continued Equity and Equity / Total Balance NIBD / Equity 1 063 1 068 1 096 1 100 1 055 50 0,8 1 017 991 0,74 1 000 0,71 0,68 0,7 39,3% 38,4% 39,8% 0,63 0,64 900 38,2% 37,8% 37,9% 40 0,62 0,60 800 0,57 0,6 700 30,1% 0,49 28,0% 30 0,5 26,8% 600 500 491 504 0,
Slide 31: Group financial profile, continued
Group financial profile, continued ROCE ROACE 15,4% 16,4% 16,9% 16,8% 13,7% 14,5% 11,9% 9,8% 9,1% 9,0% 10,1% 7,9% 7,9% 8,5% 8,6% 7,0% 3,6% 3,3% 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Exceptional items impacting Q4 ROCE ROACE is calculated with t
Slide 32: Cash flow statement
Cash flow statement CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW 2019 2018 2019 2018 2018 (NOK 1 000) Q4 Q4 YTD YTD Total Net cash flow from operations -49 576 48 978 180 368 204 735 204 735 Net cash flow from change in w orking capital 134 186 18 692 39 409 -50 821 -50 821 Net cash flow from opera
Slide 33: Balance sheet
Balance sheet BALANCE SHEET 2019 2018 (MNOK) 31.12 31.12 ASSETS 3 033 2 703 Intangible non-current assets 1 028 1 085 Tangible non-current assets 364 332 Financial non-current assets 75 73 IFRS 16 - RoU Asset 417 - Inventory 514 462 Receivables 475 571 Cash and cash equivalents 161 133 Assets held f
Slide 34: Dividend and dividend policy
Dividend and dividend policy Dividend Policy Cash Dividend • The company is aiming to give the shareholders a competitive return on investment by a combination of cash dividend and share price increase • The company’s dividend policy shall be stable and predictable • When deciding the dividend the B
Slide 35: Largest shareholders
Largest shareholders 20 largest shareholders Share development No of shares % Account name Type Citizenship 20 703 105 62,1 % EGERSUND GROUP AS NOR 3 900 000 11,7 % WHEATSHEAF INVESTMENTS LIMITED GBP 1 179 392 3,5 % SIX SIS AG Nomi nee CHE 866 930 2,6 % VERDIPAPIRFONDET NORDEA KAPITAL NOR 825 932 2,
Slide 36: Outlook – by CEO Knut Nesse
_ XD Outlook — by CEO Knut Nesse
Slide 37: AKVA group in brief
AKVA group in brief Leading Listed on Deliveries Companies technology Oslo stock in 65 in 11 and service exchange countries countries. partner since 2006 over 40 1 436 years employees
Slide 38: Solutions
Solutions Cage Based Technology Land Based Technology Software
Slide 39: CAPEX Based Revenue / OPEX Based Revenue
CAPEX Based Revenue OPEX Based Revenue
Slide 40: Order backlog and inflow, 2016 through 2019
Order backlog and inflow, 2016 through 2019 Order backlog Order intake 2 294 1 425 1 106 1 611 1 572 778 997 1 523 1 274 815 1 430 1 380 1 381 1 356 300 55 1 318 1 274 778 51 218 629 760 1 077 479 611 1 085 569 998 537 448 639 77 822 620 449 886 629 589 51 533 304 546 561 557 359 471 697 430 412 441
Slide 41: Outlook – AKVA group
Outlook – AKVA group • Strategy process to be revisited, on the basis of strong financial capacity and amongst other stronger focus on full grow out RAS facilities within the Land Based segment • New organizational structure established. Plans for further strengthening the organization under develop
Slide 42: Customer focus
CUSTOMER FOCUS AQUACULTURE X09 KNOWLEDGE RELIABILITY ENTHUSIASM!
Slide 43: AKVA group
AKVAcRovur