Company presentation Your Aquaculture Technology and Service Partner
Important Information About this Company Presentation This Company Presentation has been prepared by AKVA group ASA ("AKVA group" or the "Company") for information purposes only, and does not constitute investment advice or an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction to any person. Any recipient or reader of this Company Presentation contemplating to make an investment in the Company must rely on their own examination of the Issuer, including the merits and risks involved. Each recipient and reader of this Company Presentation should consult with its own legal, credit, business or tax adviser as to legal, credit, business and tax advice. By receiving or accessing this Company Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and are solely responsible for forming your own opinion of the potential future performance of the Company’s business. The information contained in this Company Presentation has not been independently verified. No representation or warranty (express or implied) is made as to the accuracy or completeness of any information contained herein, or any oral information provided in connection therewith, and it should not be relied upon as such. The Company accepts no liability whatsoever arising directly or indirectly from the use of this Company Presentation. This Company Presentation is current as of 10 March 2016. Nothing herein shall create any implication that there has been no change in the affairs of AKVA group since such date. This Company Presentation contains forward-looking statements relating to the Company's business, the Company's prospects and other forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this Company Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. Your Aquaculture Technology and Service Partner
AKVA group highlights Undisputed #1 supplier of technology and services to the • aquaculture sector Salmon farming is driven by high demand, high prices and • increased technological sophistication New salmon farming growth to come from land-based and • more exposed locations with higher technological requirements AKVA group is well positioned for continued growth and • margin improvement – active dividend policy Your Aquaculture Technology and Service Partner
Agenda 1 Company 2 Market & trends 3 Financials Your Aquaculture Technology and Service Partner
AKVA group – uniquely positioned for future growth 1 Cage-based 2 Leading technology Land-based CAPEX based revenue solutions and service partner to Feed the global systems, Land-based • sensors aquaculture industry facilities and Plastic • cameras and steel cages Global presence - Infra- Land-based subsidiaries in 8 structure equipment countries 3 Software OPEX based revenue 670 employees Market cap of NOK Technology 4 ~1250m and net and farming debt of NOK 134m services Your Aquaculture Technology and Service Partner
Presence in all main farming regions Map of activities Revenue per region 2015 Export 14 % Americas 18 % Nordic Nordic Americas Export 68 % Your Aquaculture Technology and Service Partner
AKVA group serves all salmon farmers in the World Customer examples Revenue per customer 2015 Customer 1 Customer 2 Customer 3 Other Your Aquaculture Technology and Service Partner
Strategic priority to increase the proportion of software and service-related revenue Revenue reoccurring vs technology 2015 Comments • Introduction of rental business model in Norway. Already successfully introduced in UK and Canada • Rental is an “all inclusive service” providing for instance light or picture for an agreed period of time (2 to 5 years duration) OPEX based - reduced CAPEX and reducing operational work from the revenue; customer 27% • Acquisition of YesMaritime in 2014, a provider of diving, ROV and other services to the salmon farming sector (Farming services) CAPEX based • Development of Farming Services still in an early stage – revenue; 73 % opportunity for consolidation • Aim of delivering more than 30% of revenue through software and services – by developing software, farming services, technology services and rental further Your Aquaculture Technology and Service Partner
Agenda 1 Company 2 Market & trends 3 Financials Your Aquaculture Technology and Service Partner
Strong demand for salmon - high and stable salmon prices expected going forward Annual harvest volumes of Atlantic salmon Salmon price history and forecast, NOK/kg Million tonnes 2.5 52 48 42 2.0 39 38 +9% 1.5 26 1.0 0.5 0.0 2016e 1) 2017e 1) 1995 2000 2005 2010 2017e Avg 1996- 2013 2014 2015 2012 Source: Fish Pool, broker research reports, Arctic Securities Notes: 1) Actual prices and Fish Pool forwards Your Aquaculture Technology and Service Partner
Aquaculture is becoming increasingly technology-intensive Farming capex, NOK/kg harvested 1) Comparison of cage in 1980 to cage in 2014 +2.5x 4,0 1,6 2006 2015 Source: Salmon farmer annual reports Notes: 1) Based on reported farming capex and harvest volumes for Marine Harvest, Salmar, Cermaq, Lerøy, Grieg, NRS and Bakkafrost, 2015 figures are based on company guidance Your Aquaculture Technology and Service Partner
Driving forces – salmon industry LAND BASED EXPOSED SITES FARMING FARMING The exponential challenge of the coastal zone SALMON LICE • CONCENTRATION OF STAKEHOLDER INTEREST • WATER QUALITY • AVAILABLE SPACE FOR EXPANSION • ENVIRONMENTAL IMPACTS OF CONCENTRATED ACTIVITIES • SHORELINE Your Aquaculture Technology and Service Partner
Industry entering into a stagnant phase – with rapidly increasing costs CAGR 12-15 50 +0,1 % 1 400 000 45 1 200 000 40 1 000 000 35 M. Tons live weight (WFE) Production cost (NOK/kg) 30 800 000 25 600 000 20 15 400 000 10 200 000 5 - 0 1992 2015 Sales volume Source: Deloitte, Directorate of fisheries Your Aquaculture Technology and Service Partner
Industry phase development effects on technology demand Industry stagnant phase Your Aquaculture Technology and Service Partner
Cage farming development SHELTERED EXPOSED OCEAN FARMING SHORELINE INCREMENTAL DEVELOPMENT: INCREMENTAL DEVELOPMENT: BASED ON EXPERIENCES FROM AQUACULTURE • ENLARGEMENT AND • AND OFFSHORE INDUSTRY INCREASED ROBUSTNESS Your Aquaculture Technology and Service Partner
Development of land based and closed containment technologies LAND BASED TECHNOLOGY CLOSED CONTAINMENT TECHNOLOGY AT SEA SHORELINE Your Aquaculture Technology and Service Partner
ATLANTIS SUBSEA FARMING AS • Established in partnership with the companies Sinkaberg-Hansen AS and Egersund Net AS – 33.3% of the shares each • Purpose of developing submersible fish-farming facilities for salmon on an industrial scale • Has applied for six development licences to enable large-scale development and testing of the new technology and operational concept • Through its innovative development work, ATLANTIS aims both to contribute to better and more sustainable use of current farming sites as well as to enable use of more exposed sites than is currently possible. The goal is to achieve production gains and improve fish welfare by submerging the facilities, as they will be far less exposed to the environmental and physical conditions than in a surface position • Although ATLANTIS represents a significant leap forward in terms of innovation, it is also an objective for the concept to keep costs at a level that helps strengthen the industry's competitive position. The aim is also that the technology and operating methods developed through ATLANTIS can be made available and adopted by the industry relatively quickly Your Aquaculture Technology and Service Partner 17
The growing global movement to participate in sustainable aquaculture Asia: Offshore – Indonesia, Malaysia, Japan, South Middle East: Korea, India, Sri Lanka Offshore – Saudi , Oman, Iran (Caspian) Lakes/Dams – China, Lakes/Dams – Iran Vietnam Land Based – UAE, Saudi, Oman, Iran Land Based – China, Thailand, Malaysia, Indonesia, Vietnam Sub-Sahara Africa: The progressive regions: Offshore – Mauritius, Mozambique Lakes/Dams – Lesotho, Ghana, SE Africa Salmon Land Based – SE Africa Sea Bass & Sea Bream Other Species – emerging regions Your Aquaculture Technology and Service Partner
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