AKVA group October 4 th 2018 Hallvard Muri, CEO
Agenda Company overview Financials Market drivers and focus areas Outlook Iceland
Agenda Company overview Financials Market drivers and focus areas Outlook Iceland
AKVA group in brief Leading technology and service partner Listed on Oslo stock exchange since 2006 Order Intake of 2,5 BNOK in 2017 Deliveries in 65 countries over 40 years Companies in 11 countries. Approx. 1450 employees
Complete solutions Cage Based Technology Land Based Technology Software
Cage Based Technology Steel Cages AKVAconnect Control Software Plastic Cages Underwater Lights Camera Systems Feed Systems Feed Barges Nets ROV Net Cleaner Environmental Sensors Mooring Systems Work Boats Mort Collector
Salmon farm in Norway
Salmon farm in Chile
Land Based Technology Nitrogen De-Gasser Fish Tanks Biofilter Oxygen Cones Particle Filter Central Feed System RAS (Recirculation Aquaculture Systems)
Bakkafrost Strond, Faroe Island
Sisomar Hall G, Norway
Bedre bilder? Tytlandsvik Aqua, Norway
Marine Harvest, Nordheim Norway
Midt-Norsk Havbruk, Norway
Software Fishtalk AKVAconnect Support
Where do we deliver? AKVA group s geographical regions Order intake 2017 19 % (10 %) 45% (57 %) 15 % (9 %) Nordic Americas Export AKVA group Agents / Distributors 21 % (24 %) Nordic CBT&SW Nordic LBT EME Americas
Agenda Company overview Financials Market drivers and focus areas Outlook Iceland
Revenues, Order intake and EBITDA AKVA group AKVA group AKVA group Revenues (MNOK) Order intake (MNOK) EBITDA (MNOK) 2 200 2 000 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 919 575 1 246 881 194 205 +23% 1 425 972 1 251 258 170 1 545 337 149 160 195 181 206 2013 2014 2015 1 603 2 088 2016 2017 2 500 2 000 1 500 1 000 500 0 +22% 2 471 1 952 1 570 1 617 1 132 1 231 1 573 1 165 759 821 472 163 256 215 197 149 216 190 182 382 2013 2014 2015 2016 2017 240 220 200 180 160 140 120 100 80 60 40 20 0 +50% 240 169 135 196 103 85 147 76 47 35 30 26 15 8 3 6 12 20 16 18 2013 2014 2015 2016* 2017* Nordic Americas EME Nordic Americas EME Nordic Americas EME *Excluding one off in 2016
Revenue by product group and species By product groups Q4 2017 By species Q4 2017 0,1 % (0,1%) 8,3 % (8,8%) 22,3 % (17,2%) 51,6 % (54,5%) 5,7 % (8,4 %) 9,7 % (9,9%) 17,7 % (19,4%) 84,6 % (81,7%) Cage Based Tech S&AS Cage Based Land Based Tech S&AS Land Based Software Salmon Non seafood Other species
Agenda Company overview Financials Market drivers and focus areas Outlook Iceland
Driving forces salmon industry SHORELINE LAND BASED FARMING Challenge of nearshore farming SALMON LICE EXPOSED SITES FARMING OCEAN FARMING CONCENTRATION OF STAKEHOLDER INTEREST WATER QUALITY AVAILABLE SPACE FOR EXPANSION ENVIRONMENTAL IMPACTS OF CONCENTRATED ACTIVITIES
Submerge and raise the cage safe and remote Risk management Underwater feeding Fish health operations Daily operations (dead fish removal, surveillance, cleaning, etc) Air to the salmon Artificial air space
Paradigm shift in the salmon industry CLOSED CONTAINMENT LAND BASED OPEN CONTAINMENT CAGE BASED A The traditional production cycle: 0 100 g The post smolt production cycle: Open pen cage at sea 100 5000g B 0 100 g 100 1000 g Open pen cage at sea 1000 5000g The integrated production cycle: C 0 5000 g
The industry is pursuing big smolt More robust smolt Less exposure to environmental factors such as storms and parasites Faster production cycles Potential for reduced production cost (e.g. lower treatment costs) Potential for better capacity utilization within the maximum allowed biomass Potential larger production in sea
Land based is cost-effective for production of big smolt 2009/2010 Smolt 80 g 5,63 kr/stk 68,66 kr/kg 413 g 49,04 kr/kg 2014/2015 Smolt 419 g 419 g 19,95 kr/stk 47,61 kr/kg Source: Hiddenfjord, Faroe Islands
High land based activity in all salmon markets
Significant investment in land based expected Global full-cycle salmon production perspective Big smolt in Norway
Agenda Company overview Financials Market drivers and focus areas Outlook Iceland
Salmon production on Iceland is forecasted to reach close to 50,000 tonnes in 2020 Production ( 000 tonnes) 110 100 90 80 70 60 50 40 30 20 10 0 2015 2016 2017 2018E 2019E 2020E 2025 Licenses applied Source: Pareto Securities
Ambitious growth plans seems more likely than ever Strong Islandic economy and sufficient political support Favorable natural conditions, quite similar to Finnmark (low temperature strategy needed) Farming experience and involvement of Norwegian players Granting new licenses has taken time in the past Far from end-markets and immature logistic chains Financing capacity Few players that can collaborate to get it right Strengths Challenges
AKVA group is dedicated to play a vital role on Iceland Deliveries of complete facilities for flow through and RAS land based farming Proven solutions for arctic and harsh conditions Complete farming solutions and service offerings Local presence