Q4 2015 Presentation Oslo - February 19 th , 2016 Trond Williksen, - - PowerPoint PPT Presentation

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Q4 2015 Presentation Oslo - February 19 th , 2016 Trond Williksen, - - PowerPoint PPT Presentation

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Q4 2015 Presentation Oslo - February 19 th , 2016 Trond Williksen, CEO Eirik Brve Monsen, CFO Your Aquaculture Technology and Service Partner Agenda 1 Highlights 2 Financial performance 3 Outlook 4 Q&A Your Aquaculture Technology

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Your Aquaculture Technology and Service Partner

Q4 2015 Presentation

Oslo - February 19th, 2016 Trond Williksen, CEO Eirik Børve Monsen, CFO

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Your Aquaculture Technology and Service Partner

Agenda

Highlights Financial performance Outlook 1 2 3 Q&A 4

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Your Aquaculture Technology and Service Partner 3

Highlights Q4 2015 - by CEO Trond Williksen

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Your Aquaculture Technology and Service Partner

Best year ever - second year in a row

4

  • All business segments with good performance in Q4 – best Q4 ever
  • A broader mix of products and services contributing to revenues in 2015

compared to earlier years – becoming a stronger and more diversified AKVA group

  • Land based with best quarter ever – becoming an important part of AKVA
  • Profitable Chile operation in 2015 despite challenging market conditions
  • Ending the year with the best order backlog ever
  • Dividend of NOK 1.00 per share paid in November
  • Best year ever financially – growth in revenues and margins
  • Strong financial position

Fourth Quarter 2015 and year end – Highlights

1 246 1 425

103 135

8,3 % 9,5 %

0,0 % 2,0 % 4,0 % 6,0 % 8,0 % 10,0 % 200 400 600 800 1 000 1 200 1 400 2014 2015 MNOK

2014 vs 2015

Operating revenue EBITDA EBITDA %

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Your Aquaculture Technology and Service Partner

305 344 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 MNOK

Revenue

13 27 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 MNOK

EBITDA

Best Q4 ever – more diversified - smoothing out some of the seasonality

5

+103% +13%

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Your Aquaculture Technology and Service Partner

504 649 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 MNOK

Order Backlog

Best order backlog ever – higher degree of LBT and OPEX based revenue

6

+152% +29% 505

  • Good market activity and sales so far in the new year

460 350 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 MNOK

Order Inflow

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Your Aquaculture Technology and Service Partner

  • 10

103 135 2010 2011 2012 2013 2014 2015 MNOK

EBITDA

743 1 246 1 425 2010 2011 2012 2013 2014 2015 MNOK

Revenue

Building a stronger AKVA - step by step

7

+14% +31%

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Your Aquaculture Technology and Service Partner

AKVA group – uniquely positioned for future growth

Leading technology solutions and service partner to the global aquaculture industry Global presence - subsidiaries in 8 countries 670 employees Market cap of NOK ~1250m and net debt of NOK 134m

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Your Aquaculture Technology and Service Partner

Presence in all main farming regions

Map of activities Revenue per region, Q4 2015

Nordic Americas Export

Nordic 73 % Americas 15 % Export 12 %

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Your Aquaculture Technology and Service Partner

Strategic priority to increase the proportion of OPEX based revenue

OPEX based vs CAPEX based revenue, Q4 2015 Comments

  • OPEX based revenue defined as our revenue booked as OPEX in
  • ur customers P&L
  • Aim of increasing relative share of OPEX based revenue through

software and services – by developing software, farming services, technology services and rental further

  • Introduction of rental business model in Norway in late 2014.

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) - reducing CAPEX and reducing operational work for the customer

  • Acquisition of YesMaritime in 2014, a provider of diving, ROV and
  • ther services to the salmon farming sector (Farming services)
  • Development of Farming Services still in an early stage –
  • pportunities for consolidation

CAPEX based revenue 74 % OPEX based revenue 26 %

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Your Aquaculture Technology and Service Partner

Revenue by product groups and species

11

  • Cage based technologies = Cages, barges, feed systems and other
  • perational systems for cage based aquaculture
  • Software = Software and software systems
  • Land based technologies = Recirculation systems and technologies for

land based aquaculture

By product groups – Q4 2015 By species – Q4 2015

  • Salmon = Revenue from technology and services sold to production of salmon
  • Other species = Revenue from technology and services sold to production of
  • ther species than salmon
  • Non Seafood = Revenue from technology and services sold to non seafood

customers

Salmon 78 % Other Species 12 % Non Seafood 10 % Cage based 64 % Software 11 % Land based 25 %

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Your Aquaculture Technology and Service Partner

ATLANTIS SUBSEA FARMING AS

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  • 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

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Your Aquaculture Technology and Service Partner

Minor adjustment in dividend policy

13

  • Change of timing for the half yearly dividend policy to be

based on 1st and 2nd half of the year (instead of Q4 – Q1 and Q2 – Q3)

  • Rationale:

‐

Gives a more intuitive division of the year with 2nd half dividend being announced in connection with the Annual General Meeting

‐

Evens out more of the seasonality's in cash flow during the year

  • Next possible dividend pay out will be after 1st half 2016,

i.e. will be announced together with the 2016 Q2 financials

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Your Aquaculture Technology and Service Partner 14

Financial performance Q4 2015 – by CFO Eirik Børve Monsen

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Your Aquaculture Technology and Service Partner

Q4 2015 - Financial highlights

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  • Good overall financial performance continues – taking advantage of the diversified
  • perations
  • Land based on track after first quarter with Aquatec Solutions included
  • Profitable operation in Chile in 2015 despite challenging market conditions – due to

higher level of service and tight cost control

  • WiseDynamics in Canada divested in November 2015 – marginal impact on Group

financials

  • Share buyback program finalized in November 2015 – Shares awarded to employees in

January 2016 according to the announced incentive scheme to employees

  • Dividend – NOK 1 per share paid in November 2015

Revenue

  • 50

100 150 200 250 300 350 400 450 1Q 2Q 3Q 4Q 2012 2013 2014 2015

MNOK

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Your Aquaculture Technology and Service Partner

Q4 2015 - Financial highlights, continued

16 EBITDA EBITDA % Stabilizing on a historical higher EBITDA-level both in NOK and in % Getting close to the medium term target of 10% EBITDA on a annual basis

  • 10
  • 5
  • 5

10 15 20 25 30 35 40 45 1Q 2Q 3Q 4Q 2012 2013 2014 2015

MNOK

  • 4%
  • 2%

0% 2% 4% 6% 8% 10% 12% 14% 1Q 2Q 3Q 4Q 2012 2013 2014 2015

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Your Aquaculture Technology and Service Partner

Cage Based Technologies

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Nordic

  • Decent performance in Q4, which traditionally is a low season

quarter in Nordic CBT

  • Good performance continued with a slightly different product mix

compared to 2014 - a wider range of products contribute to revenue and profit in 2015 vs 2014 Americas

  • Chile delivering one of the best years ever margin wise due to

reduced cost base and higher level of service

  • Canada with a great Q4 and ending the best year ever. Lean and

efficient operation

  • Australia small but profitable operation – best year ever

Export

  • UK also ended their best year ever with high level of OPEX based

revenue

  • Turkey – best year ever – experiencing increased activity in the Sea

Bass and Sea Bream industry

  • Export to emerging markets – slow, but some activity - Iran

141 136 50 44 33 40 223 220 4,4 % 4,6 %

0% 1% 1% 2% 2% 3% 3% 4% 4% 5% 5% 50 100 150 200 250 2014 Q4 2015 Q4

CBT (Revenue & EBITDA %)

Nordic Americas Export EBITDA %

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Your Aquaculture Technology and Service Partner

Software

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  • AKVA group Software AS continues to deliver stable and

high margins – with improved revenue and margins YoY

  • Wise lausnir ehf – with improved performance YoY
  • WiseDynamnics in Canada, a subsidiary of Wise ehf was

divested in November 2015. Marginal numbers for the group and gave a marginal gain of MNOK 1.5 in Q4 EBITDA

  • Software continues to invest in new product modules,

which is expected to strengthen the financial performance

  • f the SW segment further

25 34 5 3 1 30 38 14,1 % 22,4 %

0% 5% 10% 15% 20% 25% 5 10 15 20 25 30 35 40 45 2014 Q4 2015 Q4

SW (Revenue & EBITDA %)

Nordic Americas Export EBITDA %

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Your Aquaculture Technology and Service Partner

Land Based Technologies

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  • 25% of total Group revenue in Q4
  • 9.8% EBITDA in Q4 - significant improved performance

YoY and QoQ

  • Plastsveis AS on track with good performance in 2015
  • Aquatec Solutions A/S – included in the Group P&L

from Q4 and onwards. Good performance as expected

  • AKVA group Denmark A/S with a decent Q4. Still

potential for further improvements financially

46 82 6 4 52 86

  • 1,1 %

9,8 %

  • 10%

0% 10% 20% 30% 40% 10 20 30 40 50 60 70 80 90 100 2014 Q4 2015 Q4

LBT (Revenue & EBITDA %)

Nordic Americas EBITDA %

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Your Aquaculture Technology and Service Partner

P&L 2015 2014 2015 2014

(MNOK)

Q4 Q4 Total Total OPERATING REVENUES 344,1 305,0 1 425,3 1 246,1 Operating costs ex depreciations 316,9 291,7 1 290,2 1 142,7 EBITDA 27,1 13,4 135,2 103,4 Depreciation 14,0 9,5 47,5 35,7 EBIT 13,2 3,9 87,7 67,6 Net interest expense

  • 1,7
  • 0,7
  • 5,4
  • 4,8

Other financial items

  • 4,6
  • 0,9
  • 4,3

0,0 Net financial items

  • 6,3
  • 1,6
  • 9,6
  • 4,7

EBT 6,9 2,3 78,1 62,9 Taxes

  • 0,8
  • 6,4

19,7 8,4 NET PROFIT 7,6 8,6 58,4 54,5 Net profit (loss) attributable to: Non-controlling interests 0,4

  • 0,2

1,6

  • 0,6

Equity holders of AKVA group ASA 7,3 8,9 56,8 55,1

Revenue growth 12,8 % 24,1 % 14,4 % 35,6 % EBITDA margin 7,9 % 4,4 % 9,5 % 8,3 % EPS (NOK)

0,28 0,34 2,20 2,13

Financials – Detailed P & L

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  • Increased depreciation mainly

due to increased rental CAPEX and amortization

  • Low interest cost due to low

net debt and low interest rate. Increase explained by financial lease mostly related to rental

  • Mostly currency and

acquisition cost - considered as an acceptable level

  • Minority shareholders (30%)

in Plastsveis AS

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Your Aquaculture Technology and Service Partner

106 126 127 126

11,6 % 10,1 % 9,1 % 8,8 %

0 % 2 % 4 % 6 % 8 % 10 % 12 % 14 % 20 40 60 80 100 120 140 160 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 MNOK

MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK MNOK

96 153 144 183 144 147 157 226 160 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 MNOK

Group financial profile – remains strong

Available cash Working capital

+16 MNOK

  • Continued strong working capital level – despite record high activity
  • Due to strong capital discipline
  • Including a 90 MNOK credit facility in Danske Bank
  • Cash in Q3 2015 includes the financing of the adjustment

amount in the Aquatec Solution acquisition

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Your Aquaculture Technology and Service Partner

339 347 365 375 389 403 417 443 428

46,9 % 43,1 % 40,0 %

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 50 100 150 200 250 300 350 400 450 500 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 MNOK Total Equity Equity %

Group financial profile – remains strong, continued

22

ROCE Equity

  • Good nominal increase in equity YoY due to profitable operation
  • Dividend payments of 25.7 MNOK in Q4 2015 and 25.8 MNOK in Q4 2014

+39 MNOK

3,3 % 8,4 % 8,3 % 15,2 % 14,1 % 12,3 % 15,2 % 13,9 % 15,0 % Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 Q4 - 2014 Q1 - 2015 Q2 - 2015 Q3 - 2015 Q4 - 2015

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Your Aquaculture Technology and Service Partner

Net debt/EBITDA of 1.0x

23

Change in net debt (TNOK) Net debt (MNOK) and net debt/EBITDA

75 70 92 44 89 82 76 98 136 1,6 1,0 1,3 0,4 0,9 0,8 0,7 0,8 1,0

  • 1,0

2,0

  • 30

60 90 120 150 Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 Q4 - 2014 Q1 - 2015 Q2 - 2015 Q3 - 2015 Q4 - 2015 Net interest bearing debt NIBD/EBITDA(12months rolling)

Net debt 30.09.2015 97 877 EBITDA

  • 27 130

Income taxes paid 1 182 Net interest paid 1 736 Capex paid 32 853 Acquisitions / Divestments

  • 5 500

Paid dividend 25 736 Buyback own shares 3 264 Sale of fixed assets

  • 855

Currency effects

  • 4 023

Other changes in working capital 10 976 Net change 38 240 Net debt 31.12.2015 136 117

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Your Aquaculture Technology and Service Partner

Balance sheet

24

BALANCE SHEET 2015 2014 (MNOK) 31.12 31.12

ASSETS 1 070 904 Intangible non-current assets 348 278 Tangible non-current assets 103 74 Financial non-current assets 8 2 Inventory 181 167 Receivables 320 329 Cash and cash equivalents 110 54 LIABILITIES AND EQUITY 1 070 904 Equity 425 388 Minority interest 3 2 Long-term interest bearing debt 188 129 Short-term interest bearing debt 57 14 Non-interest bearing liabilities 396 372

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Your Aquaculture Technology and Service Partner

CAPEX

25

Capex (TNOK) and capex / sales (%)

  • MNOK 13 of Q4 2015 CAPEX is rental
  • MNOK 46 of 2015 CAPEX is not rental – i.e. in line with previous years

26 941 29 700 19 113

CAPEX breakdown 2015 (TNOK)

Ordinary Rental Intagible (R&D)

12 266 10 982 9 133 11 017 18 633 10 994 16 037 15 871 32 853 5% 4% 3% 3% 6% 3% 4% 4% 10%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 5 000 10 000 15 000 20 000 25 000 30 000 35 000 Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 Q4 - 2014 Q1 - 2015 Q2 - 2015 Q3 - 2015 Q4 - 2015

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Your Aquaculture Technology and Service Partner

Largest shareholders

26

Subscribe to Oslo Stock Exchange Releases from AKVA by email on: http://ir.akvagroup.com/investor-relations/subscribe

Share development

No of shares % Account name Type Citizenship 13 203 105 51,1 % EGERSUND GROUP AS NOR 3 900 000 15,1 % WHEATSHEAF INVESTMENT GBR 814 886 3,2 % VERDIPAPIRFONDET ALFRED NOR 539 300 2,1 % MP PENSJON PK NOR 518 000 2,0 % SKANDINAVISKA ENSKILDA LUX 489 417 1,9 % EIKA NORGE NOR 397 904 1,5 % STATOIL PENSJON NOR 390 000 1,5 % VERDIPAPIRFONDET DNB NOR 301 700 1,2 % VPF NORDEA KAPITAL NOR 300 000 1,2 % MERTOUN CAPITAL AS NOR 238 692 0,9 % OLE MOLAUG EIENDOM AS NOR 208 100 0,8 % VERDIPAPIRFONDET EIKA NOR 196 300 0,8 % DAHLE BJØRN NOR 180 000 0,7 % VPF NORDEA AVKASTNING NOR 173 550 0,7 % ROGALAND SJØ AS NOR 166 000 0,6 % HAVBRUKSCONSULT AS NOR 146 537 0,6 % UBS (LUXEMBOURG) S.A NOM LUX 130 000 0,5 % SIX SIS AG NOM CHE 123 000 0,5 % AKVA GROUP ASA NOR 114 752 0,4 % MOLAUG OLE NOR 22 531 243 87,2 % 20 largest shareholders 3 303 060 12,8 % Other 25 834 303 100,0 % Total number of shares as per 31.12.2015 No of shares % Origin No of shareholders 20 419 531 79,0 % Norway 800 4 013 502 15,5 % Great Britain 12 675 577 2,6 % Luxembourg 3 251 280 1,0 % USA 8 215 225 0,8 % Switzerland 5 259 188 1,0 % Other 41 Total number of shareholders: 869 - from 20 different countries

20 000 000 40 000 000 60 000 000 80 000 000 100 000 000 120 000 000 10 20 30 40 50 60

  • jan. 15 feb. 15 mar. 15 apr. 15 mai. 15 jun. 15
  • jul. 15 aug. 15 sep. 15 okt. 15 nov. 15 des. 15

Last 12 months

Trading Share price

30 000 000 60 000 000 90 000 000 120 000 000 150 000 000 180 000 000 20 40 60 2011 2012 2013 2014 2015

Last 5 years

Trading volume Share price

Origin of shareholders, 5 largest countries 20 largest shareholders

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Your Aquaculture Technology and Service Partner 27

Outlooks – by CEO Trond Williksen

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Your Aquaculture Technology and Service Partner

Order backlog and inflow

28

Order backlog Order inflow

  • Highest order backlog ever
  • Best second half order inflow ever - MNOK 854 in order inflow in 2H 2015 vs MNOK 661 in 2H 2014
  • The good market activity continues
  • 100

200 300 400 500 600 700 1Q 2Q 3Q 4Q 2012 2013 2014 2015

MNOK

  • 100

200 300 400 500 600 1Q 2Q 3Q 4Q 2012 2013 2014 2015

MNOK

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Your Aquaculture Technology and Service Partner

Maintaining positive outlook

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  • Good mid term outlook due to high market activity and large order backlog, especially in the Nordic market

segment

  • Strong demand in the Nordic cage based segment continues into the new year, with shift towards sale of

technology for more efficient production

  • Land based segment with growing activity - is expected to continue - becoming a larger part of AKVA
  • UK and Canada experience slightly less project sales so far compared to last year – still expected to perform

well

  • Continued low expectations in Chile due to challenging situation for our Chilean customers. Our exposure in

Chile is reduced over the last years

  • Turkey and Australia are expected to continue to perform well in the next quarters with good order backlog
  • Exports to emerging markets with a more optimistic start of the year. Activity still expected to fluctuate due to

nature of business

  • We continue our effort to build service and after sales as a key business element in all markets and segments
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Your Aquaculture Technology and Service Partner 30

Q & A

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Your Aquaculture Technology and Service Partner