Akva Group Asa · OSL:AKVA
Akva Group Asa — Q3 2021 Earnings Presentation
52 slides from Akva Group Asa's earnings presentation, Nov 5, 2021
Slide 1: Q3 2021 Presentation
Q3 2021 Presentation Klepp, 5 November 2021 Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 2: Technology for sustainable biology
Technology for sustainable biology
Slide 3: Agenda Q3 2021
Agenda|Q3 2021 Highlights and Financial Q&A Outlook Performance Session Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 4: Highlights Q3 2021
Highlights|Q3 2021 Operation Innovation and Digital • Awarded contract for the full grow-out RAS facility from AquaCon • Continued high focus on developing capabilities within Land AS (approx. MUSD 150) subject to financing Based technology and advisory services • Low activity level and profit from
Slide 5: Key figures Q3 2021
Key figures|Q3 2021 Revenue EBITDA EBIT 738 MNOK 79 MNOK 32 MNOK 115 806 105 66 771 738 58 637 79 71 44 484 61 41 32 Q3 17 Q3 18 Q3 19 Q3 20 Q3 21 Q3 17 Q3 18 Q3 19 Q3 20 Q3 21 Q3 17 Q3 18 Q3 19 Q3 20 Q3 21 5 Note: IFRS 16 was implemented January 2019. Comparable figures for the period 2017-2018 hav
Slide 6: Comments to the financial performance Q3
Comments to the financial performance Q3 • The profitability in Q3 is negative impacted by the low activity level in the Sea Based business segment and revenue was MNOK 91 lower in Q3 21 compared to Q3 20 • The reduced activity level is temporary and mainly related to low revenue from core AKVA prod
Slide 7: Key figures YTD Q3 2021
Key figures|YTD Q3 2021 Revenue EBITDA excluding cyber-attack costs* EBIT excluding cyber-attack costs* 2 289 MNOK 241 MNOK 101 MNOK 312 2 422 2 420 284 168 2 289 241 138 1 854 118 1 531 180 182 108 101 Q3 17 Q3 18 Q3 19 Q3 20 Q3 21 Q3 17 Q3 18 Q3 19 Q3 20 Q3 21 Q3 17 Q3 18 Q3 19 Q3 20 Q3 21 Notes:
Slide 8: Market development
Market development 8 Source: Pareto Seafood Price Update 14.10.2021 Technology for sustainable biology
Slide 9: Development order intake and order backlog
Development order intake and order backlog Order intake (MNOK) Order backlog (MNOK) 1 933 3 057 34 19 66 867 1 881 1 813 1 862 1 317 56 1 009 880 1 625 55 67 26 29 49 1 317 647 385 651 116 Digital 975 929 948 747 Digital 72 16 69 14 Land Based Land Based 735 AquaCon 559 599 569 563 828 850 829 848 A
Slide 10: COVID-19 Limited impact on operations
COVID-19|Limited impact on operations • Negative implications in H1 2021 were mainly related to travel restrictions and use of foreign workforce in ongoing operations • Overall negative EBIT effect of approx. MNOK 15 in H1 21 related to COVID- 19 restrictions • The impact from the restrictions were
Slide 11: Strategic Status
XO Strategic Status
Slide 12: Key highlights new strategic investor
Key highlights new strategic investor Private placement corresponding to 10% of outstanding shares (3,333,430) in AKVA at a subscription price of NOK 96,50 per share Total capital increase of MNOK 321.7 The transaction will accelerate AKVA’s strategic agenda in all business segments Share sa
Slide 13: Underlying demand growth implies 1–2 million ton volume increase by 2030
Underlying demand growth implies 1–2 million ton volume increase by 2030 Salmon demand has increased by 1.1 mill tons from 2009-2019. “Base case” assumes similar demand growth till 2030 Consumption of salmon WFE in mill. tons Key demand drivers 5.0 High demand growth (~5%)1 2019-2030: Base case pric
Slide 14: The paradigm shift of land-based farming will require major capex investments
The paradigm shift of land-based farming will require major capex investments until 2030 and beyond Mill. tons WFE +5.1% 4.5 • Restricted fresh supply requires market effort to 1.9 convert demand from fresh to frozen AKVA Group implications: Europe 2.6 Demand NAM 1.3 1.0 • Asian markets critical for
Slide 15: Three main segments within land based
Three main segments within land based Smolt: Post-smolt: Grow-out: 100 - 250 g 250 - 1000 g 5000 g 15 Technology for sustainable biology
Slide 16: AKVA believes land-based farming has a great potential
AKVA believes land-based farming has a great potential Mill. tons 2,000 10,000 15,000 40,000 10,000 15,000 10,000 5,000 10,000 Awarded delivery Basic Engineering and contracts Pre-projects (on- Design (ongoing and going and delivered) delivered) Early engagement 16
Slide 17: Strategy for Land Based Salmon Farming
Strategy for Land Based Salmon Farming Delivering complete scope of fish Market leading Zero Water Concept farming technology (e.g. feeding, fish 1 RAS enabling sustainable and cost- 2 tanks, fish handling, camera, lights, effective production sensors, control system) Data driven insight and intelli
Slide 18: Establishment of investment platform to accelerate growth ambitions
Establishment of investment platform to accelerate growth ambitions • AKVA and Israel Corp. has agreed to establish an investment platform • Investments in land-based projects worldwide using AKVA technology and solutions bearing in mind ESG considerations • Both parties will contribute with MUSD 10
Slide 19: Market for smolt / post smolt land-based facilities expected to be strong towards 2030
Market for smolt / post smolt land-based facilities expected to be strong towards 2030 Expected investments in Norwegian land-based farming facilities towards 2030 is BNOK 12-33 Low case: smolt reaches 200g avg by 2030 Base case: smolt reaches 300g avg by 2030 High case: smolt reaches 400g avg by 20
Slide 20: On track for ramping up of Land Based activity to a run-rate of 1 billion NOK
On track for ramping up of Land Based activity to a run-rate of 1 billion NOK ‘000 NOK 1 500 AquaCon 1 000 Nordic Aqua Partners Phase 2 Nordic Aqua Partners Phase 1 500 Current run-rate smolt/post-smolt 0 2020 2021 2022 2023 2024 * For illustration purposes only 20 Technology for sustainable biology
Slide 21: Precision Farming Sea based Solutions
Precision Farming Sea based Solutions Marine Precision Feeding Digital Lice Solution Infrastructure for optimizing feed to support precision to minimize number for secure containment conversion and growth farming with leading, of lice treatments and efficient operations open and modular (Farmer's "l
Slide 22: High focus to further develop deep-sea farming concepts
High focus to further develop deep-sea farming concepts Benefits from deep-sea farming AKVA’s current commercial solutions • Avoid or reduce unwanted surface influences like lice, algae, currents, high temperatures. ™ • Better fish health and reduced mortality • Improved fish welfare and reduced fre
Slide 23: Future of digitization in aquaculture
Future of digitization in aquaculture Remote operations Precision Fish Farming AKVAs current response Ecosystems 23 Technology for sustainable biology
Slide 24: Strategic guidance
Strategic guidance Organic topline Operational • Deliver min. 25% Min. 50% increase in 3 Digital platforms: growth excellence EBIT-increase Y-o-Y Innovation spending AKVAconnect, • Step by step improve to support new AKVA Observe and ROACE to min. 15% by Product development Fishtalk 2023. and Organi
Slide 25: Agenda Q3 2021
Agenda|Q3 2021 Introduction and Financial Q&A Highlights Performance Session Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 26: Q3 2021 – Income statement
Q3 2021 – Income statement 2021 2020 2021 2020 2020 NOK million • Revenue reduced by MNOK 68 compared to Q3 Revenue Q3 738 Q3 806 YTD 2 289 YTD 2 420 Total 3 177 20 EBITDA 79 105 192 284 338 EBITDA margin 10,7 % 13,1 % 8,4 % 11,8 % 10,6 % EBITDA ex. cyber-attack costs1 79 105 241 284 338 • EBITDA an
Slide 27: Revenue development
Revenue development • Last twelve months order intake and revenue of MNOK Revenue (MNOK) 4,478 and MNOK 3,046, respectively 832 806 757 • Revenue reduced by 8% compared to Q3 20 719 738 • Increased activity in Land Based and Digital business segments but reduced revenue in Sea Based segment compared
Slide 28: Revenue by Market and Segment
Revenue by Market and Segment Revenue by Market* (MNOK) Revenue by Segment (MNOK) 832 806 832 18 806 16 757 21 719 97 738 7 757 96 20 719 738 14 20 98 14 133 11 19 157 115 115 122 112 149 193 130 153 84 144 694 716 580 590 603 508 512 548 469 AustralAsia 427 Europe & Middle East Digital Americas Lan
Slide 29: EBITDA and EBIT development
EBITDA and EBIT development • EBITDA of MNOK 79 / 10,7% in Q3 21 EBITDA EBIT 120,0 13,1% 14,0 120,0 7,2% 7,5 • Reduced profit compared to Q3 20 is 110,0 13,0 110,0 7,0 mainly related to lower activity level and 100,0 11,5% 10,7% 12,0 100,0 6,5 6,0 product mix in Sea Based segment 90,0 9,5% 11,0 90,0
Slide 30: Cash flow and financial position
Cash flow and financial position Available cash Net Working capital Net debt / EBITDA* 600 600 13 1 800 4,1 4,20 562 12,1% 12,1% 3,9 525 12 3,85 1 600 500 469 500 10,3% 11 3,4 3,50 3,2 10 1 400 3,15 2,9 1 252 1 204 400 400 375 9 1 200 1 130 2,80 8,2% 368 1 081 8 1 021 322 311 316 8,2% 1 000 2,45 7 5
Slide 31: Development return on capital employed
Development return on capital employed ROACE* (%) • ROACE reduced from 6,6% in Q2 21 to 5,1% in Q3 15 21 • Target of minimum 15% in 2023 remains unchanged 10 15,0% 5 7,6% 7,4% 6,6% 5,1% 1,8% 0 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 2023 target ROACE is calculated with the average balance sheet items last f
Slide 32: Dividend
Dividend • A dividend of NOK 1,00 per share was paid on 14 April 2021 Cash dividend (NOK per share) • Due to the challenging first half year of 2021 the company has decided not to pay any dividend in the second half 1,75 1,50 1,25 1,00 1,00 0,75 2016 2017 2018 2019 2020 Q2 2021 32 Technology for sus
Slide 33: Business segments
XO Business segments
Slide 34: Sea Based Technology
Sea Based Technology • Revenue reduced by 13% in Q3 compared to Q3 20 while order Revenue (MNOK) and EBITDA-margin (%) intake was at the same level as last year 1 000 14,4% 15 Nordic 900 14 13 • Revenue reduced by 25% in Q3 compared to Q3 20 800 12 • Total order intake of MNOK 339 and 22% reduction
Slide 35: Development OPEX based revenue
Development OPEX based revenue • As expected, the share of recurring revenue increased in Revenue (MNOK) Q3 as the travel restrictions were lifted in June 300 39,5% 40 37,6% 34,6% 35 • Overall, the activity level at service stations in Norway 250 were high during Q3 32,9% 31,4% 30 200 25 150 20 240
Slide 36: Land Based Technology
Land Based Technology Revenue (MNOK) and EBITDA-margin (%) • Order intake of MNOK 1,349 in the quarter compared to MNOK 68 in Q3 2020 120 115 26 2 0 24 110 • Revenue increased by 20% in Q3 21 compared to Q3 20 and 22 further increase in activity level is expected in Q4 100 96 0 20 4 90 18 • EBITDA o
Slide 37: Digital
Digital Revenue (MNOK) and EBITDA-margin (%) • Revenue increased by 24% in Q3 21 compared to last year 40 35 • Reduced EBITDA margin related to ramp-up of organization 35 31,6% 30 30 25 25 20 20 20 1 16 15 EBITDA % 1 6 15 13,0% Europe&Middle East 5 Americas 10 10 Nordic 13 5 5 11 0 0 2020 Q3 2021 Q3
Slide 38: Outlook
XY Outlook
Slide 39: Outlook
Outlook • Order backlog is solid and forms a good foundation to execute our organic growth strategy • Long term fundamentals remains unchanged as presented in our Capital Markets Day in November 2020 • Private placement of MNOK 321,7 will accelerate our strategic agenda within all three business seg
Slide 40: Agenda Q3 2021
Agenda|Q3 2021 Introduction and Financial Q&A Highlights Performance Session Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 41: Disclaimer
Disclaimer • All opinions and statements in this notice are, regardless of source, given in good faith, and may only be valid as of the stated date of this notice and may be subject to change without notice. AKVA group has taken all reasonable steps to ensure that the information contained in this n
Slide 42: Appendix
Appendix
Slide 43: AKVA group in brief
AKVA group in brief Leading Listed on Deliveries Companies technology Oslo stock in 65 in 10 and service exchange countries countries. partner since 2006 over 40 1 437 years employees
Slide 44: Our presence
Our presence AKVA group 44 Technology for sustainable biology
Slide 45: Solutions
Solutions Sea Based Technology Land Based Technology Digital 45 Technology for sustainable biology
Slide 46: Revenue by species
Revenue by species Revenue by Species (MNOK) 832 806 23 41 757 41 719 65 738 24 43 20 49 36 64 741 725 690 664 625 Non seafood Other species Salmon Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 46 Technology for sustainable biology
Slide 47: Balance sheet
Balance sheet CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2021 2020 2020 (NOK 1 000) 30.9. 30.9. 31.12. Intangible fixed assets 936 882 1 055 369 1 043 350 Deferred tax assets 2 319 12 932 10 872 Fixed assets 625 070 725 511 749 124 Long-term financial assets 331 924 105 148 148 437 FIXED
Slide 48: Cash flow statement
Cash flow statement CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW 2021 2020 2021 2020 2020 (NOK 1 000) Q3 Q3 YTD YTD Total Cash flow from operating activities Profit before taxes 19 263 50 584 2 577 111 811 121 475 Taxes paid -13 278 -8 619 -25 936 -13 578 -27 509 Net interest cost 10 862 8 966 31 4
Slide 49: Largest shareholders
Largest shareholders 20 largest shareholders Share development Origin of shareholders, 5 largest countries Subscribe to Oslo Stock Exchange Releases from AKVA by email on: http://ir.akvagroup.com/investor-relations/subscribe 49 Technology for sustainable biology
Slide 50: Dividend policy
Dividend policy • 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 Board will take into consideration expected
Slide 51: Customer focus
CUSTOMER FOCUS AQUACULTURE X09 KNOWLEDGE RELIABILITY ENTHUSIASM!
Slide 52: AKVA group
AKVAcRovuP