Challenges and opportunities in aquaculture technology...

Your Aquaculture Technology and Service Partner

Challenges and opportunities in aquaculture technology export Hallvard Muri – CEO

Intrafish Seafood Investor Forum, New York, May 23rd, 2017


• Leading technology and service partner to the global aquaculture industry

• Global presence and subsidiary in 10 countries

• Deliveries to over 65 countries during the last 40 years

• 842 employees

• 2016 revenues of 1 603 MNOK

• Listed on Oslo Stock Exchange since 2006

• Market cap of ~1 787 MNOK

AKVA group in brief


Cage Based Technology

Plastic Cages

Steel Cages

Feed Barges

Feed Systems

Mooring Systems

Nets

Camera Systems

Underwater Lights

ROV Net Cleaner

Environmental Sensors

Mort Collector

Work Boats

AKVAconnectControl Software


Land Based Technology

Fish Tanks

RAS (Recirculation Aquaculture Systems)

Central Feed System

Biofilter Oxygen Cones

Nitrogen De-Gasser

Particle Filter


Software

Fishtalk

AKVAconnect

Support


Financial figuresOrder intake

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2 200

1 617

273

1 952

2016

182

196

1 574

2015

1 570

215

198

1 158

2017 Q1 LTM

2 100

210

Nordic ExportAmericas

10,7%

9,5%

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

0%

5%

10%

15%

20%

972

258

195 194

2017* Q1 LTM

1 721

1 603

186

181

170

1 341

1 251

2015

10,6%*

1 425

2016*

EBITDA %

Nordic

Americas

Export

*Excluding one off in 2016

Order backlog

0

100

200

300

400

500

600

700

800

900

1 000

1 100

1 200

649

97

27

525

2017 Q1 LTM

1 077

128

119

830

2016

998

97

52

848

2015

AmericasNordic Export

Revenues (MNOK) and EBITDA (%)


Where do we deliver?

Income distribution 2017 Q1 LTMAKVA group’s geographical regions

78%

11%

11%

Export

Nordic

Americas

Nordic

Americas

Export

AKVA group

Agents and Distributors


Export in AKVA group


Export in AKVA group Approx. 90% of sales to the salmon sector… ...however, salmon only accounts for 4% of the

global aquaculture production

10%

90% Salmon

Other species96%

4%

Salmon

Other species

….no question a potential but we are faced with several challenges in immature markets


Tilapia farm in Lake Victoria, Uganda


Tilapia juvenile pond farm in Uganda


Pangasius farming in ponds in Vietnam (Mekong Delta)


Fish farms in China – 40.000 cages in one area…


CHALLENGES



Challenges in immature export markets

Lack of fish farming competence

Lack of project completion capacity

Unpredictable and undeveloped markets

Political and legal risks

Corruption, reputation and corporate governance risks

Health, safety and environment (HSE)


Challenges in immature export markets


OPPORTUNITIES



Opportunities - key success factors

Key success factors

Persian Gulf, Iran

Focus on clusters, key customers and large projects

Legal contracts, trade and finance competence

What NOT to do

Offer experienced farm management

HSE, Code of Conduct and Anti-corruption program

Require site surveys


AKVA’s top prioritized clusters outside of salmon

AKVA group’s geographical regions

Nordic

Americas

Export

AKVA group

Agents and Distributors

PRIORITY area

MEDITERRANEAN(Subsidiaries in Turkey and Spain,

agents in Greece and North Africa)

PRIORITY area

IRAN(Establish subsidiary in 2017

as hub for Middle East market)


Priority area - Mediterranean

Mediterranean market Prioritised countries in the region

60% 40%

Sea BassSea Bream

MAIN SPECIES

Established a hub for western Mediterranean in

2017Expanding operations

Expanding operations

Following development in North Africa, Croatia and Italy

• Turkey is leading the development – Adopting the «salmon model»

– Bigger farms

– Scale of economy

– Better equipment

– Further offshore

• Mediterranean countries following Turkey


Priority area - Mediterranean

Sea Bass and Sea Bream (1000 tons of production)

Historical and future volumes

Sea Bass and Sea Bream prices in Greece (€/kg)

Average annual price development

116 113 110 101 112 118 125

104 100 90 110120

130140

0

50

100

150

200

250

300

2015

248265

2016E

200

2014 2019E2017E

211

2018E

232213220

2013

GreeceTurkeySource: FGM, FEAP, AKVA group

0

2

4

6

2010 2011 2012 2013 2014 2015 2016

Sea Bass

Sea Bream

Source: FMG, Kontali



Sea Bass and Sea Bream farm in Turkey



Sea Bass and Sea Bream farm in Croatia


• Developing industrial scale fish farming is top government priority

‒ Adopting the «salmon model»‒ Bigger farms‒ Scale of economy

‒ Better equipment‒ RAS Land Based juvenile farms

• AKVA group Middle East LLC will be established in Iran in 2017

Priority area - Iran

Iranian market

AKVA cage farm No. 3




AKVA land based farm No. 2

AKVA land based farm No. 1

Trout

Barramundi & Sea Bream

AKVA group Middle East LLC to be established


• Iranian coast of Persian Gulf has ideal farming conditions for Barramundi and Sea Bream‒ 20-35°C year round water temperatures‒ Good water quality, current and oxygen

• Iranian government targets 200,000 tons production in cages by 2020‒ Seems a bit optimistic short term, but direction is clear‒ Possibly 1500-2000 MNOK in AKVA sales of cage

technology alone

• Land based juvenile facilities based on RAS, work boats and other required equipment in addition

Iranian market

Priority area - Iran



3000t Barramundi and Sea Bream farm in Persian Gulf, Iran



Installing cages in Persian Gulf, IranBarramundi farm in hydro dam near Bushehr, Persian Gulf, Iran


AKVA’s way forward in the export market

Expand our business in established and growing clusters

Focus first on «closer to home» markets with proven concepts

Target customers with ability to invest in and operate large scale farms professionally

Challenges and opportunities in aquaculture technology...

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