Q1 2015 Presentation - AKVA Group relations/financial info/quarterly... · 13 2 - 2013 3 - 2013 4 -...

Your Aquaculture Technology and Service Partner

Q1 2015 PresentationOslo - May 8th, 2015 Trond Williksen, CEO

Eirik Børve Monsen, CFO


Agenda

Highlights

Financial performance

Outlook

1

2

3

Q&A4

Your Aquaculture Technology and Service Partner3

Highlights Q1 2015 - by CEO Trond Williksen


On track - record high order backlog

4

• Overall good performance – on track‐ Benefitting from being a diversified Group both geographically and product

vice

• Strong first quarter in Chile, Canada and UK

• A good start for Cage Based segment in Norway, but ‐ with a different product mix compared to Q1 2014, and‐ some of the deliveries moving in to Q2 2015

• Slow start for the Land Based segment and for export to emerging markets

• High market activity resulting in the best order backlog ever –547 MNOK

First quarter 2015 – Highlights



5

+24%

+53%

32 27

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

MN

OK

EBITDA

310 325

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

MN

OK

Revenue


243

367

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

MN

OK

Order Inflow


6

520 452

547

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

MN

OK

Order Backlog+51%

+21%


AKVA group – uniquely positioned for future growth

Cage-based Land-based Software

• The most recognized brand in aquaculture technology

• Leading technology solutions and service partner to the global aquaculture industry

• Global presence -subsidiaries in 8 countries

• 740 employees

• Market cap of NOK ~670m and net debt of NOK 82m

• Plastic and steel cages

Infra-structure

Feed systems, sensors

and cameras

Technology and

farming services

• Land-based facilities

Land-based equipment

Software

1 2 4

3


Presence in all main farming regions

Map of activities Revenue per region, Q1 2015

Nordic

Americas

Export

Nordic67 %

Americas21 %

Export12 %


Strategic priority to increase the proportion of reoccurring revenue

Technology sale vs reoccurring revenue, Q1 2015 Comments

• Introduction of rental business model in Norway in Q4 2014. Already successfully introduced in UK and Canada.

• First installations of rental equipment in Norway done in Q1 2015

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

• Acquisition of YesMaritime in 2014, a provider of diving, ROV and other services to the salmon farming sector (Farming services)

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

• Aim of increasing relative share of reoccurring revenue through software and services – by developing software, farming services, technology services and rental further

Technology72 %

Reoccurring28 %


Revenue by product groups and species

10

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

Software = Software and software systems

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

By product groups – Q1 2015 By species – Q1 2015

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 non seafood customers

Salmon80 %

Other Species

9 %

Non Seafood

11 %

Cage based80 %

Software9 %

Land based11 %


Centralized operations and wireless communication in the hotspot

11

• Technology trend aimed at improving farming performance by enhancing overview, control and specialized feeding competence through centralized control centers

• AKVA group supports the trend through development of the new digital wireless communication system and AKVAconnect linking the operations in the farms to a centralized operation centers

• Trend supports a significant growth in sales for AKVA on sensors, cameras, control systems and solutions for automation as experienced in 2015


Contract on land based cleaner-fish facility – new sealice prevention technology

12

• Contract of 23.5 MNOK signed with Namdal Rensefisk AS for technology to new cleaner-fish production facility – owned and operated by Bjørøya Fiskeoppdrett AS, Aquagen AS, Midt NorskHavbruk AS and Nova Sea AS

• Use of Cleaner-fish at the core of the strategy solving the sealicechallenge facing the salmon industry

• Namdal Rensefisk AS is in the forefront of developing farming of cleaner fish as a sustainable way of handling sealice in the Norwegian salmon industry

• The land based facility holds new technologies enabling sustainable land based farming of cleaner fish


Financial performance Q1 2015 – by CFO Eirik Børve Monsen


Q1 2015 - Financial highlights

14

• Good overall financial performance – taking advantage of the diversified operations

• Rental business in Norway with a good start – with P&L impact from next quarter

• Strong balance sheet maintained

Revenue

310 301 330

305 325

-

50

100

150

200

250

300

350

1Q 2Q 3Q 4Q

2012

2013

2014

2015

MNOK


-10

-5

-

5

10

15

20

25

30

35

40

1Q 2Q 3Q 4Q

2012

2013

2014

2015

MNOK

Q1 2015 - Financial highlights, continued

15

EBITDA

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

1Q 2Q 3Q 4Q

2012

2013

2014

2015

MNOKEBITDA %

• Stabilizing on a historical higher EBITDA-level both in NOK and in %

• Medium term target of 10% EBITDA still valid


Cage Based Technologies

16

Nordic

● Good start of the year, but with slightly different product mix YoY

Americas

● Strong Q1 in Chile - the positive development in this market continues. However we continue to monitor the development closely

● Canada continues the good performance from 2014 with the best Q1 ever

Export

● UK continues the good performance from 2014 with the best Q1 ever

● Turkey have a profitable Q1 with good sales

● Low activity in Export to emerging markets YoY

155 156

24

64

62

39241

259

10,9 %

8,9 %

5%

7%

9%

11%

13%

15%

17%

0

50

100

150

200

250

300

2014 Q1 2015 Q1

CBT (Revenue & EBITDA %)

Nordic Americas Export EBITDA %


Software

17

● AKVA group Software AS continues to deliver stable and high margins – with improved revenue and margins YoY

● Wise lausnir ehf have a good start of the year – with improved performance YoY

● Software continues to invest in new product modules, which is expected to strengthen the financial performance of the SW segment further

2225

4

51

1

26

31

11,4 %

14,0 %

7%

9%

11%

13%

15%

17%

0

5

10

15

20

25

30

35

2014 Q1 2015 Q1

SW (Revenue & EBITDA %)

Nordic Americas Export EBITDA %


Land Based Technologies

18

● Overall a slow start for LBT segment in Q1

● AKVA group Denmark have a good order backlog, however delayed start-up and progress in some projects explains the low margin in LBT in Q1

● Plastsveis is on track with a profitable Q1 and a good order backlog

41

34

2

1

43

35

5,9 %

-1,9 %

-6%

4%

14%

24%

0

5

10

15

20

25

30

35

40

45

50

2014 Q1 2015 Q1

LBT (Revenue & EBITDA %)

Nordic Americas EBITDA %


P&L 2015 2014 2014

(MNOK) Q1 Q1 Total

OPERATING REVENUES 325,0 310,4 1 246,1

Operating costs ex depreciations 298,4 278,7 1 142,7

EBITDA 26,6 31,7 103,4

Depreciation 10,5 8,3 35,7

EBIT 16,1 23,5 67,6

Net interest expense -1,3 -1,5 -4,8

Other financial items 1,5 -1,4 0,0

Net financial items 0,2 -2,9 -4,7

EBT 16,3 20,5 62,9

Taxes 4,9 4,9 8,4

NET PROFIT 11,4 15,6 54,5

Net profit (loss) attributable to:

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

Equity holders of AKVA group ASA 11,3 15,5 55,1

Revenue growth 4,7 % 39,7 % 35,6 %

EBITDA margin 8,2 % 10,2 % 8,3 %

EPS (NOK) 0,44 0,60 2,13

Financials – Detailed P & L

19

• Low interest cost du to low net debt and low interest rate

• Mainly currency – considered as acceptable level

• Minority shareholders (30%) in Plastsveis AS


63 86

68 96

153 144

183

144 147

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

MN

OK

Group financial profile - strongAvailable cash ROCE

-6 MNOK

8,4 %

8,3 %

15,2 %

14,1 %12,3 %

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

+3.9 percentage points


338 342 342 339 347 365 375 389 403

44,3 %

44,4 %

42,8 %

38%

40%

42%

44%

46%

48%

50%

52%

300

320

340

360

380

400

420

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

MN

OK

Total Equity Equity Ratio

Group financial profile – strong, continued

21

Working capital Equity

Good nominal increase in equity YoY due to profitable operation

Note: Dividend payment of 25.8 MNOK in Q4 2014

Overall low working capital level – despite record high activity

Due to strong capital discipline

Increased activity in Chile gives WC-intensive growth

+56 MNOK

162

116 126 137

20,0 %

11,5 %10,1 %

10,8 %

0 %

5 %

10 %

15 %

20 %

25 %

0

20

40

60

80

100

120

140

160

180

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

MN

OK

MNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOKMNOK

MNOK

0.7 percentage point improvement


122

94

108

75 70

92

44

89 82

4,3

2,4

3,2

1,6

1,0 1,3

0,4

0,9 0,8

-

1,0

2,0

3,0

4,0

5,0

-

30

60

90

120

150

Q1 - 2013 Q2 - 2013 Q3 - 2013 Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 Q4 - 2014 Q1 - 2015

Net interest bearing debt NIBD/EBITDA(12months rolling)

Net debt/EBITDA of 0.8x

22

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

• No dividend disbursement in Q2. Next possible dividend pay-out will according to the new dividend policy be in Q4 – based on the cash flow in Q2 and Q3

Net debt 31.12.2014 88 511

EBITDA -26 610

Income taxes paid -32

Net interest paid 1 309

Capex paid 10 994

Paid dividend -

Sale of fixed assets -698

Currency effects -1 841

Other changes in working capital 10 784

Net change -6 095

Net debt 31.03.2015 82 416


Balance sheet

23

BALANCE SHEET 2015 2014

(MNOK) 31.03 31.03

ASSETS 942 782

Intangible non-current assets 274 245

Tangible non-current assets 76 56

Financial non-current assets 2 2

Inventory 183 151

Receivables 349 266

Cash and cash equivalents 57 62

LIABILITIES AND EQUITY 942 782

Equity 402 344

Minority interest 2 2

Long-term interest bearing debt 126 122

Short-term interest bearing debt 14 10

Non-interest bearing liabilities 398 303


CAPEX

24

6 138

15 621

8 628

12 266 10 982

9 133

11 017

18 633

10 994

3%

6%5% 5%

4% 3% 3%

6%

3%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

20 000

Q1 - 2013 Q2 - 2013 Q3 - 2013 Q4 - 2013 Q1 - 2014 Q2 - 2014 Q3 - 2014 Q4 - 2014 Q1 - 2015

Capex (TNOK) and capex / sales (%)

8 898

2 096

CAPEX breakdown Q1 2015 (TNOK)

Ordinary CAPEX including rental Capitalized R&D expenses


Outlooks – by CEO Trond Williksen


520

452 504

547

-

100

200

300

400

500

600

1Q 2Q 3Q 4Q

2012

2013

2014

2015

MNOK

Order backlog and inflow – Highest order backlog ever

26

Order backlog Order inflow

467

243

460

367

-

50

100

150

200

250

300

350

400

450

500

1Q 2Q 3Q 4Q

2012

2013

2014

2015

MNOK

Highest order backlog ever

The good market activity continues


Maintaining positive outlook

27

● Strong overall short term outlook due to high market activity and order backlog. Our target is to outperform 2014

● Strong demand in the Nordic market is expected to continue

● Positive operational development in the Chilean market is expected to continue in the next quarters due to a solid order backlog. However, our Chilean customer’s struggle with low earnings brings some uncertainty to investments in the medium term. The Volcano eruption in Chile might have a small impact short term on CBT investments, but pose an opportunity for LBT. We are monitoring the Chilean market closely and will adjust our operation according to the development

● UK and Canada are expected to continue to perform well in the next quarters with a significant order backlog and a large portion of reoccurring business

● Land based is expected to have a positive development with a growing order backlog and prospect mass. Historically high market interest for LBT

● Exports to emerging markets will continue to fluctuate short term, but represents a large potential over time. New geographical regions continuously emerge as markets for our technology

● We continue our effort to build service and after sales as a key business element in all markets and segments


Q & A

Q1 2015 Presentation - AKVA Group relations/financial info/quarterly... · 13 2 - 2013 3 - 2013 4 -...

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