Akva Group Asa · OSL:AKVA
Akva Group Asa — Q3 2016 Earnings Presentation
34 slides from Akva Group Asa's earnings presentation, Nov 3, 2016
Slide 1: Q3 2016 Presentation
Q3 2016 Presentation Oslo - November 3rd, 2016 Trond Williksen, CEO Eirik Børve Monsen, CFO Your Aquaculture Technology and Service Partner
Slide 2: Agenda
Agenda 1 Highlights 2 Financial performance 3 Outlook 4 Q&A Your Aquaculture Technology and Service Partner
Slide 3: Highlights Q3 2016 - by CEO Trond Williksen
Highlights Q3 2016 - by CEO Trond Williksen Your Aquaculture Technology and Service Partner 3
Slide 4: High market activity – growth strategy continued
High market activity – growth strategy continued Third quarter 2016 – Highlights 1 200 13,0 % • Overall good financial performance - 10.8% EBITDA margin 1 000 12,0 % • 11,0 % P&L growth softened by Americas and restructuring of AKVA group Denmark 10,4 % 10,0 % 800 10,0 % • Growth strategy continues
Slide 5: Stable performance and growth continues
Stable performance and growth continues Revenue+21% EBITDA +33% MNOK MNOK 355 354 41 38 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Your Aquaculture Technology and Service Partner 5
Slide 6: Growth in order backlog continues
Growth in order backlog continues Order Inflow Order Backlog +38% +31% 886 820 697 LBT 187 LBT LBT 417 MNOK MNOK 437 283 417 643 318 468 414 385 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 - NOK 1.4 billion in order inflow YTD 2016 - In Q3 2015 the order
Slide 7: AKVA group – uniquely positioned for future growth
AKVA group – uniquely positioned for future growth Leading technology solutions and service partner to the global aquaculture industry Global presence - subsidiaries in 8 countries 768 employees Market cap of NOK ~2076m and net debt of NOK 213m Your Aquaculture Technology and Service Partner
Slide 8: Presence in all main farming regions
Presence in all main farming regions Map of activities & revenue per region, Q3 2016 77% 12% 11% Nordic Americas Export Your Aquaculture Technology and Service Partner
Slide 9: Strategic priority to increase the proportion of OPEX based revenue
Strategic priority to increase the proportion of OPEX based revenue OPEX based vs CAPEX based revenue, Q3 2016 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 developi
Slide 10: Revenue by product groups and species
Revenue by product groups and species By product groups – Q3 2016 By species – Q3 2016 Land based Non 22 % Seafood 14 % Other Species Software 11 % Cage 9% based Salmon 69 % 75 % Cage based technologies = Cages, barges, feed systems and other Salmon = Revenue from technology and services sold to
Slide 11: Acquisition of Sperre AS – the leading ROV producer
Acquisition of Sperre AS – the leading ROV producer • Sperre AS becomes the “center of excellence” in AKVA group in terms of ROV technologies as well as relevant subsea technologies • The intention and ambition is to develop undisputed industrial leadership in the ROV and subsea technology area with
Slide 12: Changes in operational structure – LBT carved out as a separate Group entity
Changes in operational structure – LBT carved out as a separate Group entity CEO Trond Williksen • retgrega CFO Eirik B Monsen Group Marketing • eter QA Coordinator IR , Treasury and Group Controling New group entity Group HR • Technology ujdyyt& SW Inge Forseth Nordic Per A Hjetland Americas Andrew
Slide 13: Helgeland Plast – expanding capacity
Helgeland Plast – expanding capacity • Investing in new factory facility - expanding capacity on cage, boat and pipe • More efficient boat production • HP will double the production capacity of Polarcirkel Boats during 2017 • Solved by streamlining and outsourcing parts of the production • Will redu
Slide 14: Expansion into the Mediterranean - new office in Spain
Expansion into the Mediterranean - new office in Spain • AKVA group is about to establish an office on the east coast of Spain • Due to positive signs in the Sea Bass and Sea Bream market in the Mediterranean • This office will strengthen our position in this region • We will have service resources
Slide 15: Deliveries into Iran
Deliveries into Iran • AKVA group has worked actively in Iran for 2-3 years • Second cage farm delivered (Bushehr Aramseyd Co. Reysali Delvari Dam) • Sales of both cage based and land based technology • Government strategy: Grow cage farming by 200.000 tons in 5 years (Barramundi, Sea Bream, Rainbow
Slide 16: ATLANTIS submersible fish-farming project
• ATLANTIS is in dialogue with the Directorate of Fisheries and we are waiting for a final decision regarding development licences The project • Established in partnership with the companies Sinkaberg-Hansen AS and Egersund Net AS – 33.3% of the shares each on February 1st, 2016 • Purpose of develop
Slide 17: Financial performance Q3 2016 – by CFO Eirik Børve Monsen
Financial performance Q3 2016 – by CFO Eirik Børve Monsen Your Aquaculture Technology and Service Partner 17
Slide 18: Q3 2016 - Financial highlights
Q3 2016 - Financial highlights • Stabilizing on a higher EBITDA margin - 10.8% in Q3 MNOK 450 • AKVA group’s diversified operations stabilize revenue and margins – makes 400 the Group more robust 350 300 2013 • On the negative side; 250 2014 • Americas with weaker performance YoY – due to challengin
Slide 19: Q3 2016 - Financial highlights, continued
Q3 2016 - Financial highlights, continued EBITDA EBITDA % MNOK 45 14% 40 12% 35 30 2013 10% 2013 25 2014 8% 2014 20 6% 2015 2015 15 2016 4% 2016 10 5 2% - 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Stabilizing on a historical higher EBITDA-level both in NOK and in % The medium term target of 10% EBITDA on a annual
Slide 20: Cage Based Technologies
Cage Based Technologies Nordic CBT (Revenue & EBITDA %) ● Good performance in Q3 300 12% 10,5 % ● A wide range of products continue to contribute financially – AKVAsmart 277 products, Barges, Polarcirkel cages, service and rental 10,4 % ● The Farming Services area with AKVA Marine Services is perfor
Slide 21: Software
Software SW (Revenue & EBITDA %) 35 32% 33 32 1 1 ● Another good quarter 30 3 7 26,1 % 27% ● AKVA group Software AS and Wise 25 lausnir ehf – with improved performance YoY 24,3 % 22% 20 ● YTD improved performance, both topline and margins, despite divesting 15 WiseDynamics in November 2015 29 17% 10
Slide 22: Land Based Technologies
Land Based Technologies LBT (Revenue & EBITDA %) 90 77 80 1 ● Good performance in Aquatec Solutions and Plastsveis 70 - and the high market activity continues 10% 60 ● Weak quarter for AKVA group Denmark A/S due to restructuring to make the unit more efficient (MNOK 50 46 4.9 in negative EBITDA in Q
Slide 23: Financials – Detailed P & L
Financials – Detailed P & L P&L 2016 2015 2016 2015 2015 • Increased depreciation mainly (MNOK) Q3 Q3 YTD YTD Total due to increased rental CAPEX OPERATING REVENUES 353,8 354,7 1 154,5 1 081,3 1 425,3 and amortization Operating costs ex depreciations 315,5 314,2 1 034,0 973,2 1 290,2 EBITDA 38,3 40,
Slide 24: Group financial profile – remains strong
Group financial profile – remains strong Available cash Working capital +46 MNOK MNOK160 12 % MNOK 140 9,1 % 8,8 % 10 % 120 8,4 % 7,5 % 8% 100 MNOK 80 6% MNOK 226 230 127 132 203 60 183 100 109 4% 157 160 165 144 147 40 2% 20 0 0% 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 3Q14 4Q14 1Q15 2Q15 3Q15
Slide 25: Group financial profile – remains strong, continued
Group financial profile – remains strong, continued ROCE Equity +43 MNOK 17,8 % 500 50% 450 44,8 % 45% 15,2 % 38,0 % 15,2 % 14,7 % 400 37,1 % 40% 14,1 % 14,0 % 13,9 % +5.6 percentage points 12,3 % 12,4 % 350 35% 300 30% MNOK 250 25% 200 20% 150 15% 100 10% 50 375 389 403 417 443 428 435 460 437 5% 0
Slide 26: Net debt/EBITDA of 1.4
Net debt/EBITDA of 1.4 Net debt (MNOK) and net debt/EBITDA Change in net debt (TNOK) 4,0 268 238 Net debt 30.06.2016 172 172 213 EBITDA -38 287 208 3,0 Income taxes paid -447 172 178 Net interest paid 985 148 136 Capex paid 24 407 2,0 Acquisitions / Divestments 884 118 98 1,4 Paid dividend 19 376 88
Slide 27: Balance sheet
Balance sheet BALANCE SHEET 2016 2015 (MNOK) 30.09 30.09 ASSETS 1 179 1 163 Intangible non-current assets 411 340 Tangible non-current assets 138 88 Financial non-current assets 5 8 Inventory 178 209 Receivables 321 382 Cash and cash equivalents 126 136 LIABILITIES AND EQUITY 1 179 1 163 Equity 427
Slide 28: CAPEX
CAPEX Capex (TNOK) and capex / sales (%) CAPEX breakdown 2016 YTD (TNOK) 35 000 32 853 20% 18% 11 638 30 000 16% 24 407 25 000 23 114 14% 12% 40 969 11 981 20 000 18 633 10% 17 067 16 037 15 871 10% 15 000 7% 8% 11 017 6% 10 994 6% 10 000 4% 6% 4% 4% 3% 3% 4% 5 000 2% Ordinary Rental Intangible (R&D
Slide 29: Largest shareholders
Largest shareholders 20 largest shareholders Share development No of shares % Account name Type Citizenship 13 203 105 51,1 % EGERSUND GROUP AS NOR Last 12 months Share price 3 900 000 15,1 % WHEATSHEAF INVESTMENTS LIMITED GBR Trading volume 969 049 3,8 % VERDIPAPIRFONDET ALFRED BERG GAMBA NOR SKAND
Slide 30: Outlook – by CEO Trond Williksen
Outlook – by CEO Trond Williksen Your Aquaculture Technology and Service Partner 30
Slide 31: Order backlog and inflow
Order backlog and inflow Order backlog Order inflow MNOK MNOK 1000 600 900 800 LBT 500 LBT 417 187 700 437 400 600 LBT 283 500 300 400 300 200 200 414 468 385 100 100 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Highest order backlog ever NOK 1.4 billion in order inflow YTD 2016 47% of total order backlog rela
Slide 32: Positive outlook maintained
Positive outlook maintained ● Good mid term outlook due to high market activity and large order backlog ● Good demand in the Nordic cage based segment continues ● Land based segment with growing activity - is expected to continue and is becoming a larger part of AKVA ● UK and Europe is expected to p
Slide 33: Q & A
Q&A Your Aquaculture Technology and Service Partner 33
Slide 34: Your Aquaculture Technology and Service Partner
Your Aquaculture Technology and Service Partner