Akva Group Asa · OSL:AKVA
Akva Group Asa — Q2 2021 Earnings Presentation
53 slides from Akva Group Asa's earnings presentation, Aug 13, 2021
Slide 1: Q2 2021 Presentation
Q2 2021 Presentation Klepp, 13 August 2021 Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 2: Technology for sustainable biology
Technology for sustainable biology
Slide 3: Agenda Q2 2021
Agenda|Q2 2021 Highlights and Financial Q&A Outlook Performance Session Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 4: Highlights Q2 2021
Highlights|Q2 2021 Operation Innovation and Digital • Acceptable activity level and order intake in the quarter • Deep sea open farming concepts under development • Operations was still negative impacted by COVID-19 • Strengthening of the Digital organization completed restrictions related to import
Slide 5: Key figures Q2 2021
Key figures|Q2 2021 Revenue EBITDA EBIT 832 MNOK 79 MNOK 32 MNOK 101 862 93 53 832 798 79 44 42 628 65 537 32 52 27 Q2 17 Q2 18 Q2 19 Q2 20 Q2 21 Q2 17 Q2 18 Q2 19 Q2 20 Q2 21 Q2 17 Q2 18 Q2 19 Q2 20 Q2 21 5 Note: IFRS 16 was implemented January 2019. Comparable figures for the period 2016-2018 have
Slide 6: Comments to financial performance Q2 Land Based
Comments to financial performance Q2 Land Based • In Q2 21 MNOK 25 was charged to the P&L as costs related to old projects • Extensive customer meetings were conducted during Q2 • Several cases were identified where AKVA did not close old projects properly in accordance with customer expectations •
Slide 7: Key figures H1 2021
Key figures|H1 2021 Revenue EBITDA excluding cyber-attack costs* EBIT excluding cyber-attack costs* 1551 MNOK 162 MNOK 68 MNOK 198 1 650 1 614 179 102 1 551 162 78 80 1 216 1 047 119 68 111 64 H1 17 H1 18 H1 19 H1 20 H1 21 H1 17 H1 18 H1 19 H1 20 H1 21 H1 17 H1 18 H1 19 H1 20 H1 21 Notes: - IFRS 16
Slide 8: Market development
Market development 8 Source: Pareto Seafood Price Update 05.08.2021 Technology for sustainable biology
Slide 9: Development order intake and order backlog
Development order intake and order backlog Order intake (MNOK) Order backlog (MNOK) +4% 994 1 009 1 881 1 862 1 783 1 813 21 26 56 67 880 49 1 625 55 235 29 49 385 116 647 651 771 975 929 948 16 14 747 72 69 738 735 559 599 569 Digital solutions Digital solutions 963 850 848 828 829 Land Based Land
Slide 10: COVID-19 Still negative impact on operations
COVID-19|Still negative impact on operations • Negative implications are mainly related to travel restrictions and use of foreign workforce in ongoing operations • Cage Based – Service stations in Norway – Difficult to replace foreign labor with local labor which influences both topline and cost lev
Slide 11: Strategic Status
X© Strategic Status
Slide 12: 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 13: 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 14: 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 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: Expected investments in Norwegian land based farming facilities towards 2030
Expected investments in Norwegian land based farming facilities towards 2030 is NOK 12-33Bn, dependent on desired smolt size Low case: smolt reaches 200g avg by 2030 Base case: smolt reaches 300g avg by 2030 High case: smolt reaches 400g avg by 2030 2020-2025 2026-2030 21 Market is driven by biomass
Slide 17: Grow-out pipeline
Grow-out pipeline Mill. tons Eng. & Design contract signed (inc. pre- 2,000 10,000 project scope), but some uncertainty if project will move from pre-phase to eng. & design phase 40,000 15,000 10,000 15,000 10,000 5,000 10,000 Basic Engineering and Design (ongoing and Pre-projects (on- delivered) go
Slide 18: Ramp up of Land Based activity to a run-rate of 1 billion NOK
Ramp up of Land Based activity to a run-rate of 1 billion NOK Typical 5 years ‘000 NOK execution period, 1 billion NOK for 1 500 10,000 tonnes New On-growing 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 illustr
Slide 19: Cage based: A broad range of solutions offered
Cage based A broad range of solutions offered Plastic pens Steel pens Feed Barges Nets Feeding Systems Lights Work Boats ROV/Net cleaning Battery packs Digital Cameras Sensors 19 Technology for sustainable biology
Slide 20: Precision Farming Cage based Solutions
Precision Farming Cage 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 "
Slide 21: Innovative solutions to improve fish health farming economy
Farming in the deep: Innovative solutions to improve fish health farming economy Benefits from Deep sea farming: AKVA commercial solutions in operation • Avoid or reduce unwanted surface influences like lice, algae, currents, high temperatures. ™ • Better fish health and reduced mortality • Improved
Slide 22: Future of digitization in aquaculture
Future of digitization in aquaculture Remote operations Precision Fish Farming Ecosystems 22 Technology for sustainable biology
Slide 23: Current digital solutions
Current digital solutions 23 Technology for sustainable biology
Slide 24: Increased focus on operational excellence
Increased focus on operational excellence «The AKVA way» - our operational excellence program ✓ Strengthening of the performance culture ✓ Simplifying work methods and organizational set-up 1 ✓ Increase efficiency to reduce overall costs on projects and products while increasing customer satisfactio
Slide 25: 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 26: Agenda Q2 2021
Agenda|Q2 2021 Introduction and Financial Q&A Highlights Performance Session Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 27: Q2 2021 – Income statement
Q2 2021 – Income statement 2021 2020 2021 2020 2020 • Revenue reduced by MNOK 30 compared to Q2 NOK million Q2 Q2 YTD YTD Total Revenue 832 862 1 551 1 614 3 177 2020 EBITDA 79 93 113 179 338 EBITDA margin 9,5 % 10,8 % 7,3 % 11,1 % 10,6 % EBITDA ex. cyber-attack costs1 79 93 162 179 338 EBITDA margi
Slide 28: Revenue development
Revenue development • Last twelve months order intake and revenue of MNOK Revenue (MNOK) 3 189 and MNOK 3 114, respectively 862 832 806 • Revenue reduced by 3% compared to Q2 20 757 719 • Increased activity in Land Based and Digital business but reduced revenue in Cage Based segment compared to Q2 2
Slide 29: Revenue by Market and Segment
Revenue by Market and Segment Revenue by Market* (MNOK) Revenue by Segment (MNOK) 862 862 16 832 806 5 832 70 18 806 16 757 104 7 21 719 97 757 96 20 98 14 719 133 14 11 157 122 115 180 112 193 130 153 84 775 694 716 580 590 573 548 508 512 AustralAsia 469 Europe & Middle East Digital Solutions Amer
Slide 30: EBITDA and EBIT development
EBITDA and EBIT development • EBITDA of MNOK 79 / 9,5% in Q2 21 and EBITDA EBIT significantly impacted by 120,0 13,1% 14,0 120,0 7,2% 7,5 110,0 13,0 110,0 7,0 – Final commercial clean-up land-based 100,0 11,5% 12,0 6,5 10,8% 100,0 projects and increase guarantee 11,0 6,0 90,0 9,5% 90,0 provisions -
Slide 31: Cash flow and financial position
Cash flow and financial position Available cash Net Working capital Net debt / EBITDA* 600 562 3,15 600 12,1% 13 1 600 3,9 4,20 516 525 12 3,85 2,80 1 400 500 469 500 10,3% 11 3,4 1 252 3,50 1 080 3,2 2,45 10 1 200 3,0 1 130 3,15 2,9 1 081 400 2,10 400 9,0% 8,2% 8,2% 375 9 1 021 2,80 8 1 000 519 322
Slide 32: Development return on capital employed
Development return on capital employed ROACE* (%) • ROACE reduced from 7,4% in Q1 21 to 6,6% in Q2 15 21 • Target of minimum 15% in 2023 remains unchanged 10 15,0% 5 7,6% 7,4% 6,6% 2,2% 1,8% 0 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 2023 target ▪ ROACE is calculated with the average balance sheet items last f
Slide 33: 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 33 Technology for sus
Slide 34: Business segments
XO Business segments
Slide 35: Cage Based Technology
Cage Based Technology • Revenue reduced by 8% in Q2 compared to Q2 20 while order Revenue (MNOK) and EBITDA-margin (%) intake was at the same level as last year 1 000 14,3% 15 13,3% 14 Nordic 900 • Revenue reduced by 9% in Q2 compared to Q2 20 13 800 775 12 • Total order intake of MNOK 444 and 8% re
Slide 36: Development OPEX based revenue
Development OPEX based revenue • Reduced share of recurring revenue in 2021 is mainly Revenue (MNOK) related to lower activity at service stations due to COVID- 300 40 37,6% 19 restrictions 34,6% 32,9% 35 250 31,9% 31,4% • Strong closing of Q2 as the travel restrictions were lifted 30 early June 200
Slide 37: Land Based Technology
Land Based Technology Revenue (MNOK) and EBITDA-margin (%) • Order intake of MNOK 116 in the quarter compared to MNOK 235 in Q2 2020 100 97 14 2 0 12 10 • Revenue increased by 31% in Q2 21 compared to Q2 20 90 8 6 80 4 74 • EBITDA negative of MNOK 25 in Q2 21 due to 0 2 70 0 – Final commercial clean
Slide 38: Digital Solutions
Digital Solutions Revenue (MNOK) and EBITDA-margin (%) • Revenue increased by 12% in Q2 21 compared to last year 40 25 22,3% • Acceptable EBITDA margin of 22,3% 35 19,5% 20 30 25 15 20 18 16 1 EBITDA % 1 10 15 6 Europe&Middle East 5 Americas 10 Nordic 5 5 11 11 0 0 2020 Q2 2021 Q2 38 Technology for
Slide 39: Outlook
XY Outlook
Slide 40: Outlook
Outlook • Order backlog is sound and forms a good foundation to execute our organic growth strategy • The company expects limited impact from the COVID-19 restrictions in Q3 and onwards • Long term fundamentals remains unchanged as presented in our Capital Markets Day in November 2020 • Digital prod
Slide 41: Agenda Q1 2021
Agenda|Q1 2021 Introduction and Financial Q&A Highlights Performance Session Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 42: 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 43: Appendix
Appendix
Slide 44: 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 1 489 years employees
Slide 45: Our presence
Our presence AKVA group 45 Technology for sustainable biology
Slide 46: Solutions
Solutions Cage Based Technology Land Based Technology Digital Solutions 46 Technology for sustainable biology
Slide 47: Revenue by species
Revenue by species Revenue by Species (MNOK) 862 832 56 806 23 41 62 757 41 24 719 65 43 20 36 744 741 725 690 664 Non seafood Other species Salmon Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 47 Technology for sustainable biology
Slide 48: Balance sheet
Balance sheet CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (NOK 1 000) Intangible fixed assets 2021 30.6. 1 043 641 2020 30.6. 1 055 906 2020 31.12. 1 043 350 Deferred tax assets 2 352 12 164 10 872 Fixed assets 713 262 777 476 749 124 Long-term financial assets 179 535 96 897 148 437 FIXE
Slide 49: Cash flow statement
Cash flow statement CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW 2021 2020 2021 2020 2020 (NOK 1 000) Q2 Q2 YTD YTD Total Cash flow from operations ex. w orking capital items 58 718 78 724 48 953 155 208 283 227 Cash flow from change in w orking capital -117 488 166 400 -105 626 19 281 21 744 Net c
Slide 50: 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 Last 12 months 1 623 672 4,9 % PARETO AKSJE NORGE VERDIPAPIRFOND NOR Share price Trading volume 1 056 437 3,2 % VERDIPAPIRFONDET NORDEA KAPITAL NOR 120
Slide 51: 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 52: Customer focus
CUSTOMER FOCUS AQUACULTURE 3 KNOWLEDGE RELIABILITY ENTHUSIASM!
Slide 53: AKVA group
AKVAcRouP