Akva Group Asa · OSL:AKVA
Akva Group Asa — Q4 2016 Earnings Presentation
41 slides from Akva Group Asa's earnings presentation, Feb 22, 2017
Slide 1: Q4 2016 Presentation
Q4 2016 Presentation Oslo – February 22nd, 2017 Hallvard Muri, CEO Andreas Pierre Hatjoullis, CFO (acting) 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 Q4 2016 - by CEO Hallvard Muri
Highlights Q4 2016 - by CEO Hallvard Muri Your Aquaculture Technology and Service Partner 3
Slide 4: High order backlog – solid underlying performance
High order backlog – solid underlying performance Order Backlog Fourth quarter 2016 – Highlights +54% • Record high sales and order intake 886 998 822 • Order backlog end of year approximately 1.0 BNOK 697 412 417 437 • EBITDA in the quarter hampered by material clean-up and 283 restructuring cost o
Slide 5: Strong growth in order intake
Strong growth in order intake Order Intake - Total of 2.0 BNOK in order intake 2016 +60% 561 - Record high order intake Q4 533 505 31 69 SW - Cage Based segment 420 MNOK in Q4, up 66% YoY 441 72 LBT 417 - Driven in particular by Nordic and recovery in Chile 44 32 367 350 250 348 57 33 101 - Software
Slide 6: Record quarter on sales
Record quarter on sales Revenue • Operating revenue of 449 MNOK in Q4 2016 (+105 MNOK +30% from Q4 2015): • Main increase from Cage Based segment Nordic region, +97 MNOK compared to Q4 2015 449 • Positive development in Chile YoY (+13 MNOK), as 402 393 408 355 344 354 325 positive market sentiment s
Slide 7: Restructuring cost in Denmark w/material impact on Q4-16
Restructuring cost in Denmark w/material impact on Q4-16 EBITDA • Good quarter for Nordic region with solid contribution from all entities • Positive development in Chile and turn around from loss making situation last few quarters 41 41 43 40 38 • Aquatec Solutions (AQS) and Plastsveis very strong
Slide 8: Strong underlying performance
Strong underlying performance EBITDA 48 • Restructuring and clean-up in AKVA group Denmark 4 negative effect (one-off’s) of 19.9 MNOK 20 27 24 • Aquatec Solutions earn-out element reduced EBITDA by 4 MNOK Q415 Q416 AKVA DK Aquatec Q416* *Adjusted EBITDA MNOK Your Aquaculture Technology and Service P
Slide 9: Strong order intake – solid underlying performance
Strong order intake – solid underlying performance 2016 – Highlights Revenues EBITDA • Total order intake for the year close to 2 BNOK, 24 % up from 2015 • Year on year growth in revenue 12.5% • Total EBITDA 144 MNOK, up from 135 MNOK last year 1 603 135 144 1 425 1 246 103 • Balance sheet KPI’s rem
Slide 10: AKVA group in brief
AKVA group in brief • Leading technology and service partner to the global aquaculture industry • Global presence and subsidiary in 8 countries • Deliveries in over 65 countries during the last 40 years • Approx. 792 employees • 2016 revenues of 1 603 MNOK • Listed on Oslo Stock Exchange since 2006
Slide 11: Cage Based Technology
Cage Based Technology Your Aquaculture Technology and Service Partner
Slide 12: Land Based Technology
Land Based Technology Your Aquaculture Technology and Service Partner
Slide 13: CAPEX Based Revenue
CAPEX Based Revenue Your Aquaculture Technology and Service Partner
Slide 14: OPEX Based Revenue / CAPEX Based Revenue
OPEX Based Revenue CAPEX Based Revenue SOFTWARE Fishtalk AKVAconnect Support MARINE SERVICES & Rentals Marine Services After Sales Service AFTER SALES SERVICE Your Aquaculture Technology and Service Partner
Slide 15: Presence in all main farming regions
Presence in all main farming regions Revenues from regions: Q4 2015 Q4 2016 Nordic 73 % 76 % Export 15 % 14 % Americas 12 % 10 % Nordic Americas Export AKVA group Agents & Distributors Your Aquaculture Technology and Service Partner
Slide 16: 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, Q4 2016 Comments • Focus on increasing OPEX based revenue – by developing software sales, farming services, technology services and rental further • Introduction of rental business model in Norway
Slide 17: Revenue by product groups and species
Revenue by product groups and species By product groups – Q4 2016 By species – Q4 2016 S&AS Land Software Non Based 9% Seafood 0% 10 % Other Land Based Species tech 8% 17 % Cage Based tech 55 % S&AS Cage Salmon Based 82 % 19 % Cage based technologies = Cages, barges, feed systems and other Salmo
Slide 18: Q4 – Operational Highlights
Q4 – Operational Highlights • Closing of acquisition of Sperre AS • Atlantis – Update on development licenses Your Aquaculture Technology and Service Partner
Slide 19: 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 • AKVA group ASA acquired 66% of Sperre AS. Closing of the transaction took place on November 4th, 2016 • The enterpri
Slide 20: Atlantis development licenses concept
1. On November 26th Norwegian Directorate of Fisheries informed ASF that the concept fell within the general scope of the scheme for awarding development fish-farming licenses. 2. The Directorate will continue on to consider the concept further with an objective to award one or more licenses. 3. ASF
Slide 21: Financial performance Q4 2016 – by acting CFO
Financial performance Q4 2016 – by acting CFO Andreas Pierre Hatjoullis Your Aquaculture Technology and Service Partner 21
Slide 22: Q4 2016 - Financial highlights
Q4 2016 - Financial highlights Revenue 449 • Record high quarterly turnover 393 402 408 355 354 344 • The Group is more robust – underlying good performance 310 325 301 330 305 stabilizing higher margins 270 • but the quarter offset by restructuring costs in AKVA 222 246 group Denmark 180 • Strong o
Slide 23: Q4 2016 - Financial highlights, continued
Q4 2016 - Financial highlights, continued EBITDA (MNOK) EBITDA % MNOK MNOK 14% 50 45 12% 40 10% 35 30 8% 25 6% 20 15 4% 10 2% 5 0 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Underlying performance stabilizing on a historical higher EBITDA-level both in NOK and in % EBITDA offset by restructuring in AKVA group Denmar
Slide 24: Cage Based Technologies
Cage Based Technologies Nordic CBT (Revenue and EBITDA%) ● Revenue YoY up 72% (50% organic) in total for the region ● All entities contributing positively YoY with our wide range of 8,5% products – makes the Group more diversified 350 331 10 ● The Farming Services operations is increasing and streng
Slide 25: Land Based Technologies
Land Based Technologies LBT (Revenue and EBITDA%) 90 86 85 20 80 2 77 8 ● Aquatec Solutions coming in strong in Q4, but this 2 2 is partly offset by earn-out to former shareholders 9,8% 70 11,3% of Aquatec Solutions 10 60 ● Plastsveis delivering a strong quarter – increasing 50 EBITDA with MNOK 4.9
Slide 26: Software
Software SW (Revenue and EBITDA%) ● AKVA group Software AS with stable 40 performance YoY 40 38 1 30 1 3 35 3 ● Wise experienced lower margins due to 20 pressure on salary costs on Iceland 30 22,4% 17,2% 25 10 ● Ongoing investments in new product modules expected to strengthen the 20 financial perfo
Slide 27: Financials – Detailed P & L
Financials – Detailed P & L P&L 2016 2015 2016 2015 2015 (MNOK) Q4 Q4 YTD YTD Total • Increased depreciation mainly OPERATING REVENUES 448,6 344,1 1 603,1 1 425,3 1 425,3 due to increased rental CAPEX Operating costs ex depreciations 424,9 316,9 1 458,9 1 290,2 1 290,2 and amortization EBITDA 23,7 2
Slide 28: Group financial profile – remains strong
Group financial profile – remains strong Available cash Working capital 10,8% 150 145 11 137 131 10 126 127 126 8,8% 9 109 8 100 7 8,8% 6 256 64 226 230 5 203 4 160 165 50 144 147 157 36 3 2 2,2% 1 0 0 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Record
Slide 29: Group financial profile – remains strong, continued
Group financial profile – remains strong, continued ROCE Equity 500 45 443 460 452 450 428 435 437 403 417 40 398 400 35 42,8% 39,6% 350 34,6% 30 300 37,1% 25 250 17,8% 20 15,2% 14,7% 200 14,1% 13,9% 14,0% 15 12,3 12,4% 150 10,7% 100 10 50 5 0 0 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 4Q14 1Q15
Slide 30: Net debt/EBITDA of 1.5
Net debt/EBITDA of 1.5 Net debt (MNOK) and net debt/EBITDA Change in net debt (TNOK) Net debt 30.09.2016 213 491 250 1,75 EBITDA -23 678 213 212 Income taxes paid 9 007 200 172 1,5 1,40 Net interest paid 1 728 1,4 150 136 1,1 Capex paid 24 728 1,05 Acquisitions / Divestments 83 754 98 100 89 82 Paid
Slide 31: Cash flow statement
Cash flow statement CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW 2016 2015 2016 2015 (NOK 1 000) Q4 Q4 YTD YTD Net cash flow from operations 11 932 20 049 105 596 120 240 Net cash flow from change in w orking capital 95 646 -11 836 106 050 -24 500 Net cash flow from operational activities 107 578 8
Slide 32: Balance sheet
Balance sheet BALANCE SHEET 2016 2015 (MNOK) 31.12 31.12 ASSETS 1 307 1 083 Intangible non-current assets 506 361 Tangible non-current assets 151 103 Financial non-current assets 6 8 Inventory 186 181 Receivables 292 320 Cash and cash equivalents 166 110 LIABILITIES AND EQUITY 1 307 1 083 Equity 434
Slide 33: Dividend
Dividend Cash Dividend • The dividend level shall reflect the present and expected 1,2 future cash generating potential of AKVA group 1 1 1 1 0,8 0,75 • AKVA group ASA aims to pay out dividends twice 0,6 a year, after the 1st and the 2nd half of the year. 0,5 0,4 0,2 • Dividend in 2016 is allocated
Slide 34: CAPEX
CAPEX Capex (TNOK) and capex / sales (%) CAPEX breakdown 2016 YTD (TNOK) 35 000 20% 32 853 18% 30 000 22 002 16% 24 407 24 728 25 000 14% 23 114 12% 20 000 18 633 10% 17 067 16 037 15 871 10% 19 612 15 000 7% 8% 47 701 6% 10 994 6% 6% 10 000 6% 4% 4% 4% 3% 4% 5 000 2% 0 0% Ordinary Rental Intangible
Slide 35: 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 3 900 000 15,1 % WHEATSHEAF INVESTMENT GBR Share price Trading volume 1 000 621 3,9 % VERDIPAPIRFONDET ALFRED BERG NOR EIKA NORGE NOR 100
Slide 36: Outlook – by CEO Hallvard Muri
Outlook – by CEO Hallvard Muri Your Aquaculture Technology and Service Partner 36
Slide 37: Order backlog and inflow
Order backlog and inflow Order backlog Order intake MNOK MNOK 1200 600 1000 500 187 LBT 800 LBT 412 400 LBT 417 600 LBT 437 300 283 400 200 586 200 414 468 385 100 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Highest order backlog ever, 998 MNOK NOK 2.0 billion in order intake 2016 41% of total order backlog r
Slide 38: Outlook - Backdrop
Outlook - Backdrop ● Biological condition remains challenging for core customers and thus focus on productivity and efficiency ● New Chilean regulations ● Continued strong earnings and cash flow in the salmon industry Your Aquaculture Technology and Service Partner 38
Slide 39: Outlook – AKVA group
Outlook – AKVA group ● Continued good activity in Nordic cage based segment ● UK and Chile increased activity and recovered from 2016 ● Canada competitive market and moderate expectations ● In Export the Mediterranean represents upside potential and we will focus our resources in this region over th
Slide 40: Q & A
Q&A Your Aquaculture Technology and Service Partner 40
Slide 41: Your Aquaculture Technology and Service Partner
Your Aquaculture Technology and Service Partner