Vow Asa · OSL:VOW
Vow Asa — Investor Presentation (September 2024)
42 slides from Vow Asa's investor presentation, September 2024
Slide 1: Company Presentation
COMPANY PRESENTATION September 2024
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by the management of Vow ASA using commercially reasonable efforts to provide estimates and information about the company and prospective new markets. The Presentation includes and is based, inter alia, on forward-looking information and statements rela
Slide 3: Company Overview
COMPANY OVERVIEW
Slide 4: Improving liquidity to benefit from strong backlog and anticipated growth
IMPROVING LIQUIDITY TO BENEFIT FROM STRONG BACKLOG AND ANTICIPATED GROWTH 1 2 3 Robust business - margins back on track Positioned to drive growth going forward Raising capital to strengthen liquidity Significant turnaround following last Substantial investments in technology, The planned share issu
Slide 5: Well-established technology provider with a proven delivery model
WELL-ESTABLISHED TECHNOLOGY PROVIDER WITH A PROVEN DELIVERY MODEL Operational segments Key financial and operational metrics Leading cruise industry expert in shipboard wastewater purification and Revenue LTM Backlog as of Installed waste processing Q2’24 Q2’24 systems Maritime Delivers systems
Slide 6: Corporate History
CORPORATE HISTORY 1993 2003 2020 2022 Company established with Deploying “Alaska Group parent Company renamed More than 80 years in industrial waste management Murkowski” AWP, with total Vow to better reflect landbased heating and pyrolysis, delivering offering in cruise clean ship solutions ambitio
Slide 7: Growth Story Since IPO
GROWTH STORY SINCE IPO Significant growth in 955 919 REVENUES in MNOK 783 381 365 CAGR +21% 304 460 454 381 97 108 Legacy business 19 380 330 376 Maritme & 359 Aftersales growth 247 200 172 230 236 309 294 ~4x 146 132 165 since 2014 89 107 179 194 100 126 120 69 83 82 54 52 39 2014 2015 2016 2017 20
Slide 8: Getting Back on the Right Track
GETTING BACK ON THE RIGHT TRACK Key financials by quarter 253 26.0 929 213 20.5 86 Industrial 82 111 78 11% 65 8% 3.6 5.6 316 Options 106 55 Aftersales 38 48 49 50 42 -15.5 1 226 1 061 Backlog Maritime 115 107 112 99 94 67 -37.5 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24
Slide 9: Increasing Margins in Maritime Backlog
INCREASING MARGINS IN MARITME BACKLOG Gross margin development Comments Margin development: 34% 32% • Margin development based on current backlog for Maritime Gross margin (cruise backlog) Segment, including NOK 120mill from expected new contract. 32% 29-30% 30% • The expected new contract also incl
Slide 10: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Cruise projects: Strong order backlog. Valued by key cruise operators I and yards. Steadily growing revenues, and margins are improving Aftersales: Highly recurring business with stable margins. II Addressable market increases for each new ship delivered Heat treatment: His
Slide 11: Cruise Projects
I CRUISE PROJECTS Strong order backlog. Valued by key cruise operators and yards. Steadily growing revenues, and margins are improving
Slide 12: Legislation: A New Era in Waste Treatment at Sea
I Cruise projects: Strong order backlog. Valued by key cruise operators and yards. Steadily growing revenues, and margins are improving II IIIIV V A NEW ERA IN WASTE TREATMENT AT SEA, DRIVEN BY SHIPOWNERS MOVING TO ACTION 2010 1999 First contracts for AWP 2024 First contract with a total with Alaska
Slide 13: Contracts Are Becoming Larger and More Integrated
I Cruise projects: Strong order backlog. Valued by key cruise operators and yards. Steadily growing revenues, and margins are improving II IIIIV V CONTRACTS ARE BECOMING LARGER AND MORE INTEGRATED Cruise newbuild contracts awarded in H1 2024 | Total value EUR 47.7 million Wastewater purification, Wa
Slide 14: Leveraging Technological Leadership Within Our Clean Ship Offering
I Cruise projects: Strong order backlog. Valued by key cruise operators and yards. Steadily growing revenues, and margins are improving II IIIIV V LEVERAGING TECHNOLOGICAL LEADERSHIP WITHIN OUR CLEAN SHIP OFFERING Cruise ship with 8,000 people Daily Input1 • Foodwaste: 8 tons • Wastewater: 2,200 m3
Slide 15: Riding Third Wave of Recovery in Cruise
I Cruise projects: Strong order backlog. Valued by key cruise operators and yards. Steadily growing revenues, and margins are improving II IIIIV V RIDING THIRD WAVE OF RECOVERY IN CRUISE Cruise market to be “fully recovered” this year and cruise ships ordering is picking up1 4000 50 Cruise contracti
Slide 16: Trusted Technology Provider and Supplier to Leading Cruise Operators
I Cruise projects: Strong order backlog. Valued by key cruise operators and yards. Steadily growing revenues, and margins are improving II IIIIV V TRUSTED TECHNOLOGY PROVIDER AND SUPPLIER TO LEADING CRUISE OPERATORS 9 ships commissioned and main system deliveries for 16 ships scheduled for 2024 Ship
Slide 17: Aftersales
II AFTERSALES Highly recurring business with stable margins. Addressable market increases with each new ship delivered
Slide 18: Highly Recurring Revenue from Aftersales
I II Aftersales: Highly recurring business with stable margins. Addressable market increases with each new ship delivered IIIIV V HIGHLY RECURRING Aftersales revenues REVENUE FROM AFTERSALES in NOK million 12-month rolling Aftersales (Life Cycle Services) Sales of spares, consumables and operational
Slide 19: Addressable Market Increases with Each New Ship Delivered
I II Aftersales: Highly recurring business with stable margins. Addressable market increases with each new ship delivered IIIIV V ADDRESSABLE MARKET INCREASES WITH EACH NEW SHIP DELIVERED Cruise ships with Scanship Cruise ships by shipowners equipment onboard (accumulated) equipped with Scanship tec
Slide 20: Heat Treatment
III HEAT TREATMENT Historically stable revenues and margins, now quickly growing as heat intensive industries turn electric
Slide 21: 80 Years of Legacy Business in Heat Treatment Markets
I II III Heat treatment: Historically stable revenues and margins, now quickly growing as heat intensive industries turn electric IV V 80 YEARS OF LEGACY BUSINESS IN HEAT TREATMENT MARKETS C.H. Evensen | Heat treatment solutions since 1937 Firm quotations in pipeline by type of project 7% Total NOK
Slide 22: High Project Activity
I II III Heat treatment: Historically stable revenues and margins, now quickly growing as heat intensive industries turn electric IV V HIGH PROJECT ACTIVITY Successful acquisition yielding multiple benefits Faced with high energy costs and cost of Revenues - full year Backlog - end of year emissions
Slide 23: Successful Scale-ups
IV SUCCESSFUL SCALE-UPS Two large projects underway demonstrating relevance of Vow solutions for landbased industry
Slide 24: Unique Circular Solutions Offering
I II IIIIV Successful scale-ups: Two large projects underway demonstrating relevance of Vow solutions for landbased industry V UNIQUE CIRCULAR SOLUTIONS OFFERING Pyrolysis plant with 1 Vow CHE 5 tons / hour reactor Sewage sludge Wood waste Annual Input1: Annual Input: 25,000 tons 40,000 tons Feedsto
Slide 25: Establishing Technological Dominance in a Growing Biocarbon Sector
I II IIIIV Successful scale-ups: Two large projects underway demonstrating relevance of Vow solutions for landbased industry V ESTABLISHING TECHNOLOGICAL DOMINANCE IN A GROWING BIOCARBON SECTOR Leading the Biocarbon Market Vow Green Metals aims to be the top Biocarbon provider for the Metallurgic in
Slide 26: Vow Expands U.S. Presence with Landmark Biochar Project
I II IIIIV Successful scale-ups: Two large projects underway demonstrating relevance of Vow solutions for landbased industry V VOW EXPANDS U.S. PRESENCE WITH LANDMARK BIOCHAR PROJECT Major Contract Win Vow secured a USD 27 million contract with Quonset Soil Solution in Rhode Island to produce biocha
Slide 27: Rich Pipeline
V RICH PIPELINE Rich pipeline of circular solution opportunities developed and ready, now only pending final project sanction and customers’ investment decision
Slide 28: Invested Significant Amounts - Awaiting Customers' FID
I II IIIIIIV Rich pipeline: Circular solution opportunities developed and ready, now only pending final project sanction and customers’ investment decision INVESTED SIGNIFICANT AMOUNTS - AWAITING CUSTOMERS’ FID Invested NOK 900+ million over five years… ...leveraging on the largest ever window of op
Slide 29: Favorable ELT Business Alongside Strong Clients
I II IIIIIIV Rich pipeline: Circular solution opportunities developed and ready, now only pending final project sanction and customers’ investment decision FAVORABLE ELT BUSINESS ALONGSIDE STRONG CLIENTS Vow and its client Murfitt Industries have finalized basic process engineering and confirmed the
Slide 30: Vow Technology with Key to Unlock PFAS
I II IIIIIIV Rich pipeline: Circular solution opportunities developed and ready, now only pending final project sanction and customers’ investment decision VOW TECHNOLOGY WITH “KEY” TO UNLOCK PFAS FEED contract confirms strong demand for solutions that can eliminate PFAS1 in sludge … and confirms re
Slide 31: Joining Forces for Carbon Recycling
I II IIIIIIV Rich pipeline: Circular solution opportunities developed and ready, now only pending final project sanction and customers’ investment decision JOINING FORCES FOR CARBON RECYCLING Vow has previously signed a long-term Multiple projects are under advanced cooperation agreement with Circon
Slide 32: Appendix: H1 2024 Financials
APPENDIX: H1 2024 FINANCIALS
Slide 33: Segment Information
SEGMENT INFORMATION NOK million 1H 24 1H 23 FY 23 INDUSTRIAL Share of total Revenues EBITDA before non-recurring 163.8 8.8 147.7 -0.5 364.5 -12.5 SOLUTIONS revenues 34% EBITDA margin (%) 5.4% -0.3% -3.4% Backlog 365 509 450 Revenues 219.1 214.1 375.5 MARITIME Share of total 45% EBITDA before non-rec
Slide 34: Income Statement
INCOME STATEMENT NOK million 1H 2024 1H 2023 FY 2023 Comments Revenue 485.0 448.7 918.5 Revenue increased by 8.1% compared with same period last Gross profit 149.9 172.8 232.1 year, mainly driven by increased revenues in Aftersales (+17.6%) and Gross margin % 30.9% 38.5% 25.3% Industrials (+10.9%).
Slide 35: Balance Sheet
BALANCE SHEET NOK million 30.06.24 31.12.23 Comments Intangible assets and goodwill 611.4 588.1 Increase in intangible assets relate to investments in new technology and currency effects Accounts receivable 202.2 241.0 Decrease in net working capital compared with year end Contracts in progress 305.
Slide 36: Cash Flow
CASH FLOW NOK million 1H 2024 1H 2023 FY 2023 Comments Cash and cash equivalents Working capital release during Q2 57.5 42.5 42.5 2024 at start of period Investments for the first half of Net cash flow from operating 2024 amounted to NOK 29.5m, 69.4 (15.2) (0.6) significantly reduced compared with a
Slide 37: Development in Available Liquidity
DEVELOPMENT IN AVAILABLE LIQUIDITY NOT INCLUDING NEW CONTRACTS FOR INDUSTRIALS AND CURRENT BID-PIPELINE OF 27 CRUISE CONTRACTS Available liquidity H2 2024 (NOKm) Available liquidity H1 2025 (NOKm) ~175-230 ~10-15 ~160-180 ~160-180 ~30-60 43 ~30-50 25 137 43 Cash Q2 2024 Share issue Debt repayment Ex
Slide 38: Increasing Financial Flexibility with Amended Covenant Structure
INCREASING FINANCIAL FLEXIBILITY WITH AMENDED COVENANT STRUCTURE Amended covenants Amended NIBD / EBITDA covenant The Company has entered into an agreement with amended covenants going forward for the NOK 575 million bank facilities 5.75x agreement with DNB Bank ASA. The amended agreement will 4.75x
Slide 39: Risk Factors (1/3)
RISK FACTORS (1/3) An investment in the shares (the "Shares") issued by VOW ASA (the "Company" and together with its subsidiaries the "Group") involves inherent risks. Prior to making any investment decision with respect to the Shares, an investor should carefully consider all public available infor
Slide 40: Risk Factors (2/3)
RISK FACTORS (2/3) 2.5 The Group is exposed to risks related to its IT systems The Group's ability to handle its operations in an effective and secure manner depends inter alia on the reliability, functionality, maintenance, operation and continued development of the Group's IT system. The Group's I
Slide 41: Risk Factors (3/3)
RISK FACTORS (3/3) 3.4 The Group has substantial amounts in accounts receivables, and its liquidity is dependent on receipt of timely payment from its customers The Group offers credit to its customers, and its trade receivables are non-interest bearing and generally granted on 30-60 day terms. Appr
Slide 42: Believing in a Future Where Industry Is Harmonized with Nature
BELIEVING IN A FUTURE WHERE INDUSTRY IS HARMONIZED WITH NATURE