Q4 2016 Presentation - AKVA Group › investor relations... · Q4 2016 - Financial highlights 22...

Your Aquaculture Technology and Service Partner

Q4 2016 PresentationOslo – February 22nd, 2017

Hallvard Muri, CEOAndreas Pierre Hatjoullis, CFO (acting)


Agenda

Highlights

Financial performance

Outlook

1

2

3

Q&A4

Your Aquaculture Technology and Service Partner3

Highlights Q4 2016 - by CEO Hallvard Muri


High order backlog – solid underlying performance

4

Fourth quarter 2016 – Highlights

• Record high sales and order intake

• Order backlog end of year approximately 1.0 BNOK

• EBITDA in the quarter hampered by material clean-up and restructuring cost of 19.9 MNOK related to AKVA group Denmark

• Growth strategy continues with acquisition of Sperre – the leading ROV provider, increased capacity in Helgeland Plast

414 385468

586649643493547

412

417437

283

4Q16

998

+54%

2Q15

697

4Q15 1Q163Q15

822

2Q16

886

3Q161Q15

Land basedMNOK

Order Backlog


Strong growth in order intake

5

- Total of 2.0 BNOK in order intake 2016

- Record high order intake Q4

- Cage Based segment 420 MNOK in Q4, up 66% YoY- Driven in particular by Nordic and recovery in Chile

- Software segment 69 MNOK, almost double from same period last year

- Most of the increase comes from Wise Ehf

- Land Based segment 72 MNOK in Q4, up 14% YoY

33

44

31

32

69

420

329252

296254

63

72

57250

101

505

348367

CBT

LBT

561

+60%

SW

2Q15

533

417441

1Q164Q15

350

1Q15 3Q15 3Q16 4Q162Q16

MNOK

Order Intake


Record quarter on sales

6

• Operating revenue of 449 MNOK in Q4 2016 (+105 MNOK from Q4 2015):

• Main increase from Cage Based segment Nordic region, +97 MNOK compared to Q4 2015

• Positive development in Chile YoY (+13 MNOK), as positive market sentiment start giving effect

• Slight decrease in revenue from Land Based segment, all related to restructuring in AKVA group Denmark

449

354408393

344355402

325

1Q15 2Q15 1Q16 2Q164Q15 3Q163Q15

+30%

4Q16

MNOK

Revenue


Restructuring cost in Denmark w/material impact on Q4-16

7

• 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

• Aquatec Solutions (AQS) and Plastsveis very strong performance, but partly offset by earn-out to former shareholders of AQS

• Ongoing restructuring in AKVA group Denmark gave a negative effect of 19.9 MNOK in EBITDA

27

41 41

27

4043

38

24

4Q163Q161Q164Q153Q15 2Q161Q15 2Q15

EBITDA

MNOK


Strong underlying performance

8

• Restructuring and clean-up in AKVA group Denmark negative effect (one-off’s) of 19.9 MNOK

• Aquatec Solutions earn-out element reduced EBITDA by 4 MNOK

48

24

4

20

Q416*AquatecAKVA DKQ416

27

Q415

MNOK

EBITDA

*Adjusted EBITDA


Strong order intake – solid underlying performance

9

2016 – Highlights

• 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

• Balance sheet KPI’s remains strong

• Acquisition of AD Offshore AS in April and Sperre AS in November

1 2461 425

1 603

201620152014

EBITDA

MNOK

103

135 144

2015 20162014

Revenues


• 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

• Market cap of ~2 012 MNOK and net debt of 212 MNOK

AKVA group in brief


Cage Based Technology


Land Based Technology


CAPEX Based Revenue


CAPEX Based Revenue

SOFTWARE Fishtalk AKVAconnect Support

After Sales ServiceRentalsMarine ServicesMARINE SERVICES & AFTER SALES SERVICE

OP

EX B

ased

Rev

enu

e


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


CAPEX based

revenue72 %

OPEX based revenue

28 %

(74%)

(26%)

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 in late 2014. Successfully introduced in UK and Canada before the introduction in Norway

• Rental is an “all inclusive” service providing for instance light or picture for an agreed period of time (2 to 5 years duration) - reducing both CAPEX and operational work for the customer

• AKVA Marine Services, our provider of diving, ROV and other services to the salmon farming sector (Farming Services)

• Development of Farming Services still in an early stage – opportunities for consolidation

*(Figures in brackets shows Q4 2015)


Revenue by product groups and species

17

Cage based technologies = Cages, barges, feed systems and other operational systems for cage based aquaculture

S&AS Cage based = Service and after sales for cage based aquaculture

Software = Software and software systems

Land based technologies = Recirculation systems and technologies for land based aquaculture

S&AS Land based = Service and after sales for land based aquaculture

By product groups – Q4 2016 By species – Q4 2016

Salmon = Revenue from technology and services sold to production of salmon

Other species = Revenue from technology and services sold to production of other species than salmon

Non Seafood = Revenue from technology and services sold to non seafood customers

Salmon82 %

Other Species

8 %

Non Seafood

10 %

Cage Based tech55 %

S&AS Cage Based19 %

Land Based tech17 %

S&AS Land Based

0 %

Software9 %


Q4 – Operational Highlights

• Closing of acquisition of Sperre AS

• Atlantis – Update on development licenses


Acquisition of Sperre AS – the leading ROV producer

19

• 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 enterprise value on a 100% basis was 126.9 MNOK

• AKVA group ASA has an option to buy the remaining shares after three years

• The acquisition is paid in cash and was financed with a loan from Danske Bank


Underwater feeding

Fish health operations

Daily operations (dead fish removal, surveillance, cleaning, etc)

Risk management

Submerge and raise the cage – safe and remote

Air to the salmonArtificial air space

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 is currently in a process with the Directorate to provide additional information, including target financial criteria for the concept.

4. In parallel, the project team is planning and preparing for large scale testing


Financial performance Q4 2016 – by acting CFO Andreas Pierre Hatjoullis


Q4 2016 - Financial highlights

22

• Record high quarterly turnover

• The Group is more robust – underlying good performance stabilizing higher margins

• but the quarter offset by restructuring costs in AKVA group Denmark

• Strong operational cash flow

• Dividend of 0.50 NOK per share to be paid out in Q1 2017

Revenue

246

180

270

222

305330

301310

344355

402

325

449

354

408393

Q2Q1 Q4Q3

201620142013 2015

MNOK


0%

2%

4%

6%

8%

10%

12%

14%

1Q 2Q 3Q 4Q

MNOK

Q4 2016 - Financial highlights, continued

23

EBITDA (MNOK) EBITDA %

Underlying performance stabilizing on a historical higher EBITDA-level both in NOK and in %

EBITDA offset by restructuring in AKVA group Denmark and earn-out to former shareholders of Aquatec Solutions (marked in grey in graphs)

0

5

10

15

20

25

30

35

40

45

50

1Q 2Q 3Q 4Q

MNOK


Cage Based Technologies

24

Nordic● Revenue YoY up 72% (50% organic) in total for the region

● All entities contributing positively YoY with our wide range of products – makes the Group more diversified

● The Farming Services operations is increasing and strengthening the Group

Americas● Increased activity in Chile – delivering a positive EBITDA of 1.8

MNOK in the quarter

● Our operations in Chile is set to meet higher activity when the market conditions improves

● We experienced a slow quarter in Canada, but they are delivering positive margins

Export● UK delivering a decent quarter due to high level of OPEX based

revenues

● Turkey with another very good quarter - ending 2016 as their best year

● Continued increased activity in the Sea Bass and Sea Bream industry in the Mediterranean

● Export to emerging markets – mainly deliveries to Iran

136

233

56

42

40

0

50

100

150

200

250

300

350

0

2

4

6

8

10

220

2016 Q4

44

2015 Q4

4,6%

3318,5%

NordicAmericasEBITDA % Export

CBT (Revenue and EBITDA%)


Land Based Technologies

25

● Aquatec Solutions coming in strong in Q4, but this is partly offset by earn-out to former shareholders of Aquatec Solutions

● Plastsveis delivering a strong quarter – increasing EBITDA with MNOK 4.9 YoY

● The restructuring of AKVA group Denmark A/S, to strengthen the company moving forward, has contributed negatively in Q4 with MNOK 24 YoY

8475 75

8

0

10

20

30

40

50

60

70

80

90

-20

-10

0

10

2077

2016 Q4

2 2

-14,7%

2015 Q4

9,8%

85862

2016 Q4 revised

11,3%

NordicEBITDA % AmericasLBT Effects

LBT (Revenue and EBITDA%)


Software

26

● AKVA group Software AS with stable performance YoY

● Wise experienced lower margins due to pressure on salary costs on Iceland

● Ongoing investments in new product modules expected to strengthen the financial performance of the SW segment further

● Q4 2015 includes the gain on WiseDynamics in MNOK 1.5 explaining the deviation YoY

34 36

33

0

5

10

15

20

25

30

35

40

-20

-10

0

10

20

301

1

17,2%

38

2015 Q4

22,4%

2016 Q4

40

NordicAmericasExportEBITDA %

SW (Revenue and EBITDA%)


P&L 2016 2015 2016 2015 2015

(MNOK) Q4 Q4 YTD YTD Total

OPERATING REVENUES 448,6 344,1 1 603,1 1 425,3 1 425,3

Operating costs ex depreciations 424,9 316,9 1 458,9 1 290,2 1 290,2

EBITDA 23,7 27,1 144,2 135,2 135,2

Depreciation and amortization 20,3 13,9 69,2 47,5 47,5

EBIT 3,4 13,2 75,0 87,7 87,7

Net interest expense -1,7 -1,7 -6,6 -5,4 -5,4

Other financial items -4,8 -4,6 -19,8 -4,3 -4,3

Net financial items -6,5 -6,3 -26,4 -9,6 -9,6

EBT -3,2 6,9 48,6 78,1 78,1

Taxes 4,9 -0,8 21,0 19,7 19,7

NET PROFIT -8,1 7,6 27,6 58,4 58,4

Net profit (loss) attributable to:

Non-controlling interests 0,6 0,4 0,9 1,6 1,6

Equity holders of AKVA group ASA -8,7 7,3 26,7 56,8 56,8

Revenue growth 30,4 % 12,8 % 12,5 % 14,4 % 14,4 %

EBITDA margin 5,3 % 7,9 % 9,0 % 9,5 % 9,5 %

EPS (NOK) -0,34 0,28 1,03 2,20 2,20

Financials – Detailed P & L

27

• Increased depreciation mainly due to increased rental CAPEX and amortization

• Increased due to higher net debt

• Mostly currency and acquisition cost - higher than normal

• Minority shareholders from Q2 2016 and onwards (35%) in AKVA Marine Services AS, (49%) in Wise Blue AS and (34%) in Sperre AS


Group financial profile – remains strong

Available cash Working capital

Record low working capital level – despite record high activity

Continued strong capital discipline in the Group

Including a 90 MNOK credit facility in Danske Bank

144 147 157

226

160

230203

256

165

4Q163Q162Q161Q164Q152Q151Q15 3Q154Q14

131

109

64

126127

145

126

0

50

100

150

0

1

2

3

4

5

6

7

8

9

10

11

36

8,8%

10,8%

8,8%

4Q14 3Q15 4Q152Q151Q15 2Q161Q16 3Q16

2,2%

4Q16

137


Group financial profile – remains strong, continued

29

ROCE Equity

One dividend paid in Q3 2016 of total 19.8 MNOK Excluding effect in AKVA group Denmark, the ROCE would be 13.5%

12,3

1Q16

14,7%

2Q164Q152Q15

15,2% 14,0%12,4%

17,8%

3Q163Q15

13,9%

4Q14 1Q15 4Q16

10,7%

14,1%

452437460

435428443403398

0

50

100

150

200

250

300

350

400

450

500

0

5

10

15

20

25

30

35

40

45

37,1%

417

2Q15 4Q164Q14 4Q153Q15

42,8%

1Q15 1Q16 2Q16 3Q16

34,6%39,6%


Net debt/EBITDA of 1.5

30

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

212213

172

71

136

987682

1,51,41,1

1,0

0,80,9

0

50

100

150

200

250

0,35

0,70

1,05

1,40

1,75

0,70,5

0,8

3Q162Q161Q164Q15 4Q162Q15

89

1Q154Q14 3Q15

NIBDNIBD/EBITDA (12 mth rolling)

Net debt 30.09.2016 213 491

EBITDA -23 678

Income taxes paid 9 007

Net interest paid 1 728

Capex paid 24 728

Acquisitions / Divestments 83 754

Paid dividend -

Sale of fixed assets -

Currency effects -1 052

Other changes in working capital -95 646

Net change -1 159

Net debt 31.12.2016 212 332


Cash flow statement

31

Strong cash flow improvement from operating activities due to capital discipline in the Group

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 8 212 211 645 95 740

Net cash flow from investment activities -123 326 -6 379 -260 324 -116 557

Net cash flow from financial activities 52 070 -29 380 105 646 74 419

Net change in cash and cash equivalents 36 323 -27 546 56 967 53 602

Net foreign exchange differences 3 034 860 -941 1 980

Cash and cash equivalents at the beginning of the period 126 187 136 203 109 517 53 935

Cash and cash equivalents at the end of the period 165 543 109 517 165 543 109 517


Balance sheet

32

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 434 425

Minority interest 19 3

Long-term interest bearing debt 348 188

Short-term interest bearing debt 30 57

Non-interest bearing liabilities 477 409


Dividend

• The dividend level shall reflect the present and expected future cash generating potential of AKVA group

• AKVA group ASA aims to pay out dividends twice a year, after the 1st and the 2nd half of the year.

• Dividend in 2016 is allocated as follows:– 0.75 NOK was paid out per share in 3Q 2016 based on 1st half financials

– 0.50 NOK will be paid out in 1Q 2017 based on the 2nd half financials

1 1 1

0,75

0,5

0

0,2

0,4

0,6

0,8

1

1,2

2008 2014 2015 2016 YTD March 2017

Cash Dividend


CAPEX

34

Capex (TNOK) and capex / sales (%)

47 701

22 002

19 612

CAPEX breakdown 2016 YTD (TNOK)

Ordinary Rental Intangible (R&D)

18 633

10 994

16 037 15 871

32 853

23 114

17 067

24 407 24 728

6%

3%4%

4%

10%

6%

4%

7%

6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

Q4 - 2014 Q1 - 2015 Q2 - 2015 Q3 - 2015 Q4 - 2015 Q1 - 2016 Q2 - 2016 Q3 - 2016 Q4 - 2016


Largest shareholders

35

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Share development

Origin of shareholders, 5 largest countries

20 largest shareholdersNo of shares % Account name Type Citizenship

13 203 105 51,1 % EGERSUND GROUP AS NOR

3 900 000 15,1 % WHEATSHEAF INVESTMENT GBR

1 000 621 3,9 % VERDIPAPIRFONDET ALFRED BERG NOR

489 417 1,9 % EIKA NORGE NOR

461 396 1,8 % STATOIL PENSJON NOR

391 920 1,5 % VPF NORDEA KAPITAL NOR

356 300 1,4 % MP PENSJON PK NOR

346 000 1,3 % NORRON SICAV - TARGET LUX

330 067 1,3 % VERDIPAPIRFONDET DNB NOR

300 000 1,2 % MERTOUN CAPITAL AS NOR

265 352 1,0 % VPF NORDEA AVKASTNING NOR

246 598 1,0 % FORTE TRØNDER NOR

238 692 0,9 % OLE MOLAUG EIENDOM AS NOR

193 924 0,8 % ARCTIC FUNDS PLC BEL

166 880 0,6 % ROGALAND SJØ AS NOR

150 000 0,6 % DAHLE BJØRN NOR

132 595 0,5 % NORDEA 1 SICAV GBR

124 108 0,5 % NORRON SICAV - SELECT LUX

122 382 0,5 % STATOIL FORSIKRING AS NOR

118 985 0,5 % VERDIPAPIRFONDET NOR NOR

22 538 342 87,2 % 20 largest shareholders

3 295 961 12,8 % Other

25 834 303 100,0 % Total number of shares as per 31.12.2016

No of shares % Origin No of shareholders

20 236 547 78,3 % Norway 1082

4 168 449 16,1 % Great Bri ta in 24

551 345 2,1 % Luxembourg 5

243 967 0,9 % Belgium 7

211 674 0,8 % USA 9

422 321 1,6 % Other 76

Total number of shareholders: 1203 - from 21 different countries

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jan.16 feb.16 mar.16 apr.16 mai.16 jun.16 jul.16 aug.16 sep.16 okt.16 nov.16 des.16

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Outlook – by CEO Hallvard Muri


Order backlog and inflow

37

Order backlog Order intake

Highest order backlog ever, 998 MNOK

41% of total order backlog relates to Land based technology (LBT)

The strong market activity continues into Q1

NOK 2.0 billion in order intake 2016

In Q3 2015 the order backlog of Aquatec Solutions was included for the first time (with MNOK 187)

414 385468

586

LBT283

LBT437

LBT417

LBT412

0

200

400

600

800

1000

1200

1Q 2Q 3Q 4Q

MNOK

187

0

100

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400

500

600

1Q 2Q 3Q 4Q

MNOK


Outlook - Backdrop

38

● 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


Outlook – AKVA group

39

● 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 the next quarters

● Land Based segment – Very high activity level, key for AKVA group to be

selective and focus on project execution

● S&AS step up efforts in Nordic

● Improve current core – untapped potential

● Continue to evaluate opportunity for new products to fit in core business


Q & A

Q4 2016 Presentation - AKVA Group › investor relations... · Q4 2016 - Financial highlights 22...

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