Akva Group Asa · OSL:AKVA
Akva Group Asa — Q3 2022 Earnings Presentation
54 slides from Akva Group Asa's earnings presentation, Nov 4, 2022
Slide 1: Q3 2022 Presentation
Q3 2022 Presentation Klepp, 4 November 2022 Knut Nesse, CEO Ronny Meinkøhn, CFO
Slide 2: Pioneering a better future
Pioneering a better future AKVAcrour
Slide 3: Agenda | Q3 2022
Agenda|Q3 2022 Highlights and Financial Q&A Outlook Performance Session Knut Nesse, CEO Ronny Meinkøhn, CFO Pioneering a better future
Slide 4: Highlights | Q3 2022
Highlights|Q3 2022 Operation Innovation ▪ High activity with revenue of MNOK 840 in the quarter ▪ Despite cost related headwinds investments in the three innovation agendas continue as planned ▪ EBIT impacted by MNOK 98 in provisions for restructuring and cost saving programs ▪ Solid progression on
Slide 5: Key figures | Q3 2022
Key figures|Q3 2022 Revenue EBITDA EBIT 840 MNOK 25 MNOK -59 MNOK 115 66 840 105 58 806 771 44 738 32 637 79 71 25 -59 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 * Note: EBITDA of MNOK 25 in Q3 22 is impacted * Note: Negative EBIT of MNOK 59 in Q3 22 is
Slide 6: Key figures | Q3 2022 – ex. restructuring costs
Key figures|Q3 2022 – ex. restructuring costs Revenue EBITDA EBIT 840 MNOK 83* MNOK 39* MNOK 115 840 105 66 806 771 738 58 83 637 79 71 44 39 32 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 * Note: EBITDA of MNOK 83 in Q3 22 is adjusted * Note: EBIT of MN
Slide 7: Key figures | YTD Q3 2022
Key figures|YTD Q3 2022 Revenue EBITDA EBIT 2 596 MNOK 131 MNOK -42 MNOK 312 168 2 596 284 2 422 2 420 138 2 289 241 108 101 1 854 182 131 -42 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 * Note: EBITDA of MNOK 131 YTD Q3 22 is * Note: Negative EBIT of MN
Slide 8: Key figures | YTD Q3 2022 – ex. restructuring costs
Key figures|YTD Q3 2022 – ex. restructuring costs Revenue EBITDA EBIT 2 596 MNOK 189* MNOK 56* MNOK 312 2 596 284 168 2 422 2 420 2 289 241 138 1 854 182 189 108 101 56 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 * Note: EBITDA YTD Q3 22 is adjusted for
Slide 9: Cost saving programs and restructuring
Cost saving programs and restructuring Cost saving target Headcount reduction Cost provisions (EBIT effect) 100 MNOK 130* FTE’s 98 MNOK 62 100 86 130 87 98 5 33 42 2 11 0 Total Total Digital Digital Digital Sea Based Land Based Sea Based Land Based Sea Based Land Based Total * Note: 70 in Norway and
Slide 10: Restructuring of Land Based business
Restructuring of Land Based business ▪ The financial performance in Land Based is below expectations and not acceptable ▪ New blueprint organization established at headquarter Klepp and recruitment campaigns have been initiated ▪ Better access to talents in general, engineering resources and aquacul
Slide 11: Market development
Market development Source: Pareto Seafood price update October 20th 2022 Pioneering a better future
Slide 12: Development order intake and order backlog
Development order intake and order backlog Order intake (MNOK) Order backlog (MNOK) 1 048 1 849 35 1 740 1 769 1 650 85 66 87 1 579 254 827 72 95 742 28 96 829 779 616 21 27 650 867 726 32 812 34 19 167 695 759 704 563 Digital 935 902 Digital 450 808 852 Land Based 672 Land Based Sea Based Sea Based
Slide 13: AKVA considerations of new resource tax
AKVA considerations of new resource tax Pioneering a better future
Slide 14: Major implications for the supply industry to aquaculture in Norway
Major implications for the supply industry to aquaculture in Norway ▪ Very strong revenue growth for suppliers last 10 years ▪ A lot of new job creation ▪ The timeline related to the resource tax process leading to uncertainty ▪ Salmon farmers will only buy strictly needed products and services supp
Slide 15: Significant impact on new investments in Norway
Significant impact on new investments in Norway ▪ Salmon farmers have decided to freeze all new large infrastructure CAPEX ▪ Less funding for new investments is a concern ▪ Concerns on larger investment decisions in the short and medium term ▪ High uncertainty on how the new resource tax will work f
Slide 16: Different growth scenarios in Norway
Different growth scenarios in Norway ▪ Less innovation in general to be expected due to less available funding ▪ Post resource tax there will be a “new normal” and the volume potential linked to the Norwegian license system (including new growth) will be fully utilized ▪ Major difference between “re
Slide 17: AKVA implications of new resource tax
AKVA implications of new resource tax Activity level ▪ AKVA’s current products and services within Sea Based and Digital in Norway are supporting core activity and minor implications are expected on activity level ▪ AKVA does not expected new investment decisions within post smolt segment in Norway
Slide 18: Strategic and Operational Status
Strategic and Operational Status Pioneering a better future
Slide 19: 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: 4.6 +1.1-2.0 m
Slide 20: Innovation agenda for Land Based Salmon Farming
Innovation agenda 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 an
Slide 21: Tytlandsvik 4,500 tonnes post-smolt RAS facility
Tytlandsvik 4,500 tonnes post-smolt RAS facility Pioneering a better future
Slide 22: Precision Farming Sea Based Solutions
Precision Farming Sea Based Solutions Marine Precision Feeding Digital Deep farming 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 ▪ Barges digi
Slide 23: Current digital solutions
Current digital solutions Pioneering a better future
Slide 24: Medium term targets
Medium term targets Long term organic Operational Deliver min. 8% EBIT Innovation spending 3 Digital platforms: topline growth of excellence and in 2024 to support new AKVA Connect, min. 10% Y-o-Y cost saving Product development AKVA Observe and programs Step by step improve and Organic growth AKVA
Slide 25: Agenda | Q3 2022
Agenda|Q3 2022 Introduction and Financial Q&A Highlights Performance Session Pioneering a better future
Slide 26: Cost saving target and provisions
Cost saving target and provisions Type of cost savings Type of cost provisions 100 MNOK 98 MNOK 100 98 Labour costs Impairment right-of-use assets / other fixed assets Other operating expenses 87 Redundancy costs D&A (IFRS 16) Write down inventory Other 40 40 62 77 44 39 33 29 EBITDA effect MNOK 58
Slide 27: Q3 2022 – Income statement
Q3 2022 – Income statement NOK million 2022 2021 2022 2021 2021 Q3 Q3 YTD YTD Total ▪ High activity and revenues increased by Revenue 840 738 2 596 2 289 3 122 Cost of materials 523 425 1 633 1 333 1 873 MNOK 102 compared to Q3 21 Payroll expenses 226 193 657 615 797 Other operating expenses 66 40 1
Slide 28: Revenue development
Revenue development ▪ Last twelve months order intake and revenue was MNOK Revenue (MNOK) 3,267 and MNOK 3,429, respectively 840 806 771 ▪ Revenue increased by 14% compared to Q3 21 738 637 ▪ Increased activity in all three business segments in Q3 22 compared to Q3 21 Q3 18 Q3 19 Q3 20 Q3 21 Q3 22 P
Slide 29: Revenue by Market and Segment
Revenue by Market and Segment Revenue by Market* (MNOK) Revenue by Segment (MNOK) 907 907 849 26 840 833 849 53 840 21 21 25 833 145 64 52 738 61 116 151 134 738 20 161 19 102 135 151 115 149 100 198 156 193 144 736 650 676 681 603 584 541 AustralAsia 427 465 460 Europe & Middle East Digital America
Slide 30: EBITDA and EBIT development
EBITDA and EBIT development ▪ Profitability in Q3 22 impacted by EBITDA EBIT provisions for restructuring and cost saving 6,9% 120,0 13,0 programs 12,1% 120,0 7,0 110,0 12,0 6,0 – EBITDA ex. restructuring costs of MNOK 83 10,7% 11,0 100,0 4,4% 5,0 100,0 / 9,9% in Q3 22 10,0 80,0 4,0 90,0 – EBIT ex.
Slide 31: Cash flow and financial position
Cash flow and financial position Available cash Net Working capital Net debt / EBITDA* 793 13,6% 4,45 800 600 14 1 800 4,55 12,6% 4,10 12,1% 13 4,20 700 11,6% 1 600 637 500 12 3,85 603 454 11 1 400 600 561 3,50 409 10 1 204 400 1 200 3,09 3,02 3,15 368 362 9 1 093 2,71 500 2,80 8 1 000 934 971 460 8
Slide 32: Net interest-bearing debt development
30.06.2022 1 093 EBITDA 25 Net interest 13 Corporate taxes 15 Pioneering a better future Change WC 253 CAPEX 25 NIBD Q3 2022 MNOK New IFRS 16 liability 22 Other 35 30.09.2022 894 31.12.2021 934 EBITDA 131 Net interest 33 6 Corporate taxes Change WC 161 CAPEX 124 Dividend 37 Development Net interest-
Slide 33: Capital expenditure
Capital expenditure CAPEX (MNOK) ▪ Total CAPEX of MNOK 25 in Q3 22 and MNOK 124 YTD ▪ MNOK 17 of growth CAPEX in Q3 22 relates to investments in our three innovation agendas 53 46 14 12 25 7 39 34 18 Q1 22 Q2 22 Q3 22 Growth Maintenance Pioneering a better future
Slide 34: Development return on capital employed
Development return on capital employed ROACE* (%) ▪ ROACE decreased from 6,3% in Q3 21 to -1,3% in Q3 22 and negatively impacted by the MNOK 98 in restructuring costs ▪ Target of minimum 15% in 2024 15,0% 7,8% 6,3% 6,7% 3,7% -1,3% Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 2024 target ▪ ROACE is calculated with
Slide 35: Dividend
Dividend Cash dividend (NOK per share) ▪ A dividend of NOK 1 per share was paid in Q1 2022 ▪ Due to the slow financial performance in 2022 the company has decided not to pay any dividend in the second half of 2022 1,75 1,50 1,00 1,00 1,00 2018 2019 2020 2021 Q1 2022 Pioneering a better future
Slide 36: Business segments
Business segments Pioneering a better future
Slide 37: Sea Based Technology
Sea Based Technology • Total revenue increased by 13% Revenue (MNOK) and EBITDA-margin* (%) • Order intake reduced from MNOK 563 in Q3 21 to MNOK 450 in Q3 22 1 000 11,6% 11,5% 12 900 11 Nordic 10 • Revenue increased by 13% in Q3 22 compared to Q3 21 800 9 • Total order intake of MNOK 214 and 37% lo
Slide 38: Sea Based order intake and backlog development
Sea Based order intake and backlog development 12M Revenue & Order intake (MNOK) Order backlog & Order intake (MNOK) 2 900 2 800 2 700 935 852 902 2 600 808 672 2 500 695 759 704 2 400 563 450 2 300 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 12M Revenue 12M Order Intake Order Backlo
Slide 39: Development OPEX based revenue
Development OPEX based revenue ▪ Recurring revenue was MNOK 12 lower in Q3 22 Revenue (MNOK) compared to Q3 21 39,5% 300 40 • Adjusted for AKVA Marine Services which was disposed of at end of Q3 21 the recurring revenue increased by MNOK 13 33,1% 35 250 31,3% 30,0% 30 27,5% ▪ Activity level at Egers
Slide 40: Land Based Technology
Land Based Technology Revenue (MNOK) and EBITDA-margin (%) ▪ Order intake of MNOK 167 in the quarter compared to MNOK 34 in Q3 21 134 1 0 115 ▪ Revenue increased by 17% in Q3 22 compared to Q3 21 2 0 100 ▪ Progress according to plan on the full grow out project for Nordic 133 Aqua Partners in China
Slide 41: Land Based order intake and backlog development
Land Based order intake and backlog development 12M Revenue & Order intake (MNOK) Order backlog & Order intake (MNOK) 700 600 500 829 400 812 867 779 300 726 200 254 167 96 100 33 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 12M Revenue 12M Order Intake Order Backlog Order Intake P
Slide 42: Digital
Digital Revenue (MNOK) and EBITDA-margin (%) ▪ Revenue increased by 26% in Q3 22 compared to Q3 21 50 40 38,0% ▪ Increased EBITDA margin relates to increase in activity level and a 45 35 more robust base for recurring revenue 40 30 25 35 20 30 25 15 25 13,0% 1 20 10 20 1 9 5 15 6 0 EBITDA % 10 15 Eu
Slide 43: Digital order intake and backlog development
Digital order intake and backlog development 12M Revenue & Order intake (MNOK) Order backlog & Order intake (MNOK) 130 120 110 100 90 85 95 87 80 72 66 70 60 50 27 35 28 32 19 40 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 12M Revenue 12M Order Intake Order Backlog Order Intake Pione
Slide 44: Outlook
Outlook Pioneering a better future
Slide 45: Outlook
Outlook ▪ Order backlog is sound and forms a good foundation to execute our organic growth strategy ▪ Salmon prices expected to remain strong driven by reduced supply. On the other hand, uncertainty related to supply chain restrictions and cost inflations may still impact the profitability on short
Slide 46: 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 47: Appendix
Appendix Pioneering a better future
Slide 48: Overview slide
Overview slide Leading Listed on Deliveries in Companies in technology Oslo stock 65 countries 11 countries. and service exchange over 40 years 1 499 partner since 2006 employees Pioneering a better future
Slide 49: Our presence
Our presence AKVA group Pioneering a better future
Slide 50: Balance sheet
Balance sheet CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (NOK 1 000) 2022 30.9. 2021 30.9. 2021 31.12. Intangible fixed assets 972 404 936 882 934 157 Deferred tax assets 16 582 2 319 11 229 Tangible fixed assets 615 090 625 070 642 568 Long-term financial assets 310 492 331 924 342 196
Slide 51: Cash flow statement
Cash flow statement CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW 2022 2021 2022 2021 2021 (NOK 1 000) Q3 Q3 YTD YTD Total Cash flow from operating activities Profit before taxes -108 373 19 263 -115 210 2 577 2 549 Taxes paid 14 642 -13 278 -6 237 -25 936 -34 683 Share of profit(-)/loss(+) from ass
Slide 52: Largest shareholders
Largest shareholders 20 largest shareholders Share development No of shares % Account name Type Citizenship 18 703 105 51,0 % EGERSUND GROUP AS NOR 6 600 192 18,0 % Israel Corporation Ltd ISR 1 509 915 4,1 % PARETO AKSJE NORGE VERDIPAPIRFOND NOR 968 622 2,6 % SIX SIS AG Nominee CHE 892 579 2,4 % VER
Slide 53: Pioneering a better future
CUSTOMER FOCUS AQUACULTURE 3 KNOWLEDGE RELIABILITY ENTHUSIASM!
Slide 54: Pioneering a better future
Pioneering a better future AKVAcrRour