q1 2020 presentation relations/financial info/quarterly... · q1 17. q1 18. q1 19. q1 20 +59%....
TRANSCRIPT
Q1 2020 PresentationWebcast – 8 May 2020Knut Nesse, CEOAndreas Pierre Hatjoullis, CFO
Highlights
Financial performance
Outlook
Q&A
Agenda
Highlights Q1 2020 – by CEO Knut Nesse
• Order intake of 709 MNOK
• 100 MNOK contract for delivery of Tube Net in Norway not included in order intake
• Strong quarter for Europe & Middle East, especially within export from Norway
• Contract with Cooke Aquaculture for RAS facility in Chile and Nordic Aqua Partners and China have been cancelled*
• Last twelve months order intake of 3,017 MNOK
Order intake
Order intake development
342 376
732 762644 695 591 68687
218300
50
215 10
38
3833
448
34
44
3Q18 1Q19
77
4Q 19
46
43
1 107
3Q 19
600
1913
2Q18 1Q 20
1 425
471
4Q18
997
760778
709
2Q19
-36%
Cancelled LBTCBTSWLBT
*Both customers are indicating that it is likely the projects can start up again at a later stage
Technology for sustainable biology
• Both Scotland and export from Norway have had a very good quarter
• Lower revenue in Caged Based in Nordic versus Q1 2019
• Low revenue in Land Based due to early phase of new generation of projects and delayed projects
• The software business, Wise, sold in Q3 2019 was included with 29 MNOK in Q1 2019
Revenue development
627 637726
823 798 771655
752
2Q193Q182Q18 4Q18 4Q191Q19 3Q19 1Q20
29-12%
Revenue
Wise revenue
Technology for sustainable biology
• EBITDA of 86 MNOK in the quarter
• Europe & Middle East have significantly improved EBITDA margins compared to last year – Scotland and export from Norway as the main contributors
• The Egersund Net companies have improved margins compared to same period last year
• The Land Based segment has delivered below both last year and expected margins due to postponement of projects and new generation of projects
• The software business, Wise, sold in Q3 2019 was included with 4 MNOK in Q1 2019
EBITDA development
5271
57
93 101115
-40
86
4Q192Q18 1Q204Q18
71
3Q18 1Q19 3Q192Q19
5257
97 1014
115
-40
86
-11%EBITDA
Wise EBITDA
Technology for sustainable biology
– Order backlog at end of March of 1.7 BNOK
– Strong momentum for Egersund Net
– Order backlog in Americas region remains high
– Tube Net sale in Norway in April valued at 100
MNOK, not yet included in backlog
High order backlog
825 726 908 982 961 955 1 020 1 045
449359
448629 611 569
674 605
1 650
3Q19
600
1 356
1 085
2Q18 3Q18 4Q18 1Q19 2Q19 4Q19 1Q20
1 5241 572
1 274
1 611
2 294+2%
Cancelled Land Based
Order backlog
Key financial metrics
54 59
9786
Q1 18 Q1 20Q1 17 Q1 19
+59%
EBITDA
510589
858752
Q1 20Q1 17 Q1 18 Q1 19
+47%
Revenue
0,60
0,94 0,87
0,59
0,11
0,100,15
0,15
Q1 20Q1 19Q1 17 Q1 18
+4%
EPS
In August 2018, number of shares increased from 25 834 303 to 33 334 303. When calculating the EPS the monthly average shares outstanding has been used.
Amortization from intangible assets related to acquisitions
YTD YTD YTD
AKVA group
Agents and distributors
Our presence
AKVA group’s geographical regions – absolute and relative
Revenue in geographical regions
90 106 74 59 76 83 132
125 139177 145 136 155 144
138
412 392506
633603 541
428483
637
Q3 18Q2 18 Q4 1942
Q4 18 Q1 19 Q3 19Q2 19
798
Q1 20
627
726
852
771
655
752
Nordic Americas EME
64%
22%
61%66%
20%
14%
Q2 18
17%
Q3 18
70%
24%
6%Q4 18
74%
17%
9%
Q1 19
76% 70%
17%
7%Q2 19 Q3 19
20%
13%
22%
10%
65%
Q4 19
18%
18%
Q1 20
• Egersund Net contributing 89 MNOK in the quarter
• Stable development for the rental business (Scotland and Norway) in 2020
• AKVA group Software with stable revenue compared to Q4 last year
• Due to weather conditions in Norway lower activity within service & after sales and the marine service business
• The Norwegian marine service business with solid order backlog
Development in OPEX based revenue
141 149 151 144 146 136 116 132
31
94 90112
104
8289
0
5
10
15
20
25
30
35
0
50
100
150
200
250
300
29,3%
4Q18
22,5%
33,8%
2Q18 2Q19
28,2%
3Q18
27,5%
1Q19
32,3% 31,2%
3Q19
30,1%
4Q19 1Q20
Egersund Net% of total revenue OPEX Based revenue
Revenue by product group and speciesBy product groups – Q1 2020 By species – Q1 2020
Cage Based Technology = Cages, barges, feed systems, nets and other operational systems for cage based aquacultureS&AS Cage Based = Service and after sales for cage based aquacultureSoftware = Software and software systems Land Based Technology = Recirculation systems and technologies for land based aquacultureS&AS Land Based = Service and after sales for land based aquaculture
Salmon = Revenue from technology and services sold to production of salmonOther 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
526 539610
774 719 669598
681
51
37 3268
2Q18 4Q193Q18
798
55Non seafood46
47
Salmon
2074
42
4Q18
627
852
23 6613
35
2Q19
56
3Q19
39
1Q20
Other species
637
726771
655 752
1Q19
370 334 352500 446 439
349453
98 140201
189218 212
180
204116 124129
118
42 40
44
4439 28
16
17
Software
0
1
1
1Q204Q18
1
1Q19
065595
3Q18
92
3Q19
1109
4Q19
1
1637 78
752
2Q18
LBT S&ASLBT
CBT S&AS
726
2Q19
CBT
852798 771
627
Technology for sustainable biology
• Next generation Tube Net solution ready for market, contract of 100 MNOK signed in April 2020
• High activity within the Net service business
• Cage based business in Chile continued on same high level as for 2019
• Export out of Norway with solid order intake and margins
• Land Based ending the quarter with some uncertainty caused by Covid-19 crisis, two large deliveries cancelled
• Completed acquisition of Newfoundland Aqua Service Ltd.
• Development of new camera system and AKVAconnect control system, progressing well
• Dividend of 1.00 NOK per share paid on 3 March 2020, before the main outbreak of Covid-19 in Norway
Q1 – Operational Highlights
Group Strategy process initiated – key themes
Land BasedOn-growingPost Smolt
DigitalData Platform
Computer vision / AI
InnovationPrioritization
Fish health concepts
Learning & DevelopmentPeople and competence
Project and contract management
Tube Net• A patented concept for improved fish welfare
• Proven to reduce lice infestation with 80%, with the potential to reducethe lice precence to almost 0 if the tube is deep enough
• Suitable for AGD treatment
• Reduced risk of escape: damages to the upper part of the net will not be a concern, as the fish is enclosed at the deeper part of the pen
• Reduced need for net cleaning
• Inner tube has been operated to 16 mtrs depth with great success
• Concept also includes subsea feeder and led lights to be operated for a full cycle
Separate focus on full grow out RAS facilities
• AKVA as strategic partner in NAP
• Potential equity stake to secure partnership and successful execution
• Learning and developing by a close follow-up on all technical, operational and biological performance measures
• Final financing is still pending
• Additional projects in pipeline
Covid-19 The Covid-19 virus together with a total collapse of the global oil price has had a massive impact around the globe.
So far AKVA group has been moderately impacted. The major impacts financially for AKVA group has been related to two newly awarded RAS contracts on Land Based being cancelled. AKVA group has taken action with the following focus areas:
The core of AKVA group is its employees, therefore AKVA group’s main focus is the safety and health of our employees
AKVA group has put in place a program to monitor and optimize the overall liquidity in the company
AKVA group has implemented actions to maintain the security of supply during this crisis
A steady order intake is paramount to ensure work for all AKVA employees and a prerequisite for the other focus areas
Financial performance Q1 2020 – by CFO Andreas Pierre Hatjoullis
• Last twelve months order intake and revenue now at 3,017 MNOK and 2,977 MNOK respectively
• Nordic and Chile with decline in revenue compared to last years Q1
• Strong growth in export out of Norway and Scotland in the quarter
• Egersund Net with lower revenue in Q1 2020 versus to Q1 2019
• The land based segment had a revenue of 79 MNOK in the period, down from 119 MNOK in Q1 2019
• Last year software revenues included 29 MNOK from Wise, an Icelandic business which was sold in Q3 2019
Revenue
Q1 2020 – Financial highlights
510537
484
557589
627 637
726
852798
771
655
752
Q1 Q4Q2 Q3
20172018
20192020
• Europe & Middle East with solid performance in Q1
• Margins in Americas are slightly down in the period
• AKVA group ASA Nordic delivering improved EBITDA %
• Egersund Net contributing with higher margins in the quarter compared to Q1 2019
• Low activity in the Land Based segment, amongst others due to one specific project being temporarily delayed
EBITDA (MNOK)
Q1 2020 – Financial highlights
54 65 61 6059 5271 57
97 101 115
-40
86
-50
0
50
100
150
Q1 Q2 Q3 Q42017 2018 2019 2020
-10
-5
0
5
10
15 10,6%
Q1
12,1%
Q2 Q3 Q4
10,0%11,4%
8,3%12,6% 12,6%
11,1% 14,9%10,8%
7,8%
-6,1%
11,4%
EBITDA %
Nordic
• Reduction in results in CBT Nordic mainly due to lower revenue in all entities in Q1 2020
• An increase in order backlog from Q4 2019 and stable compared to Q1 2019
• Egersund Net with a solid improvement in EBITDA from Q1 2019
• High activity in the net service business
• Lower activity in marine service business due to weather conditions
Cage Based Technology
493404
123
122
73131
0
2
4
6
8
10
12
14
0
100
200
300
400
500
600
700
80012,3%
11,1%689
2019 Q1 2020 Q1
657
EBITDA % AmericasEME Nordic
Revenue and EBITDA %
Americas
• Revenues almost on same level as 2019. A slight decrease in EBITDA compared to last year
• Stabilized EBITDA margin in Chile, Q1 2020 on same level as Q1 last year
• Newfoundland Aqua Service is included from 1 March 2020
EME
• The export from Norway was exceptionally high in Q1 2020 with high margins
• Scotland doubled its profit in Q1 2020 compared to same quarter in 2019
• Strong contribution from Europe & Middle East
Cage Based Technology
493404
123
122
73131
0
2
4
6
8
10
12
14
0
100
200
300
400
500
600
700
800
2020 Q12019 Q1
11,1% 65712,3%689
EBITDA % EME Americas Nordic
Revenue and EBITDA %
• Strong order backlog of 605 MNOK at the end of Q1 2020 despite cancellation of order for RAS in Chile from Cooke and deliveries to Nordic Aqua Partners in China
• Decrease in revenue and margins due to postponement in project delivery and cancellation of contract
• New company formed in January 2020, AKVA group Land Based Americas. Split out from AKVA group Chile
Land Based Technology
94
59
25
20
0
2
4
6
8
10
12
14
20
30
40
50
60
70
80
90
100
110
120
10,1%
3,7%
1190
2019 Q1
0
2020 Q1
79
AmericasEBITDA % EME Nordic
Revenue and EBITDA %
• Renewal of Fishtalk starting to materialize in increased sales
• Leads and pipeline for Precision feeding software (Observe) is increasing
• Last year revenue and EBITDA included 29 MNOK and 4 MNOK respectively, from the divested software business, Wise, on Iceland
Software
10 11
5 5
29
0
10
20
30
40
50
60
70
0
5
10
15
20
25
30
35
40
45
17
44
8%
11
2019 Q1
2%
2020 Q1
EBITDA %
AmericasWise
EME Nordic
Revenue and EBITDA %
Financials – Detailed P&L
• Investment in subsidiaries accounted for by equity method YTD Q1 classified as other operating revenues of 2.1 MNOK
• Minority shareholders (30%) in Grading Systems Ltd and Newfoundland Aqua Service (1,5%)
P&L 2020 2019 2019(MNOK) Q1 Q1 TotalOPERATING REVENUES 752 852 3 077 Operating costs ex depreciations 666 755 2 805 EBITDA 86 97 272 Depreciation 17 23 64 Depreciation lease assets 21 14 84 Amortization 10 12 62 EBIT 38 49 62 Net interest expense -6 -5 -22 Interest expense lease liabilities -5 -5 -20 Other financial items 5 -0 -7 Net financial items -6 -11 -49 EBT 32 38 13 Taxes 10 9 -3 NET PROFIT 21 29 17
Net profit (loss) attributable to:Non-controlling interests 0,3 0,4 2,0 Equity holders of AKVA group ASA 21 29 15
Number of shares 33 156 33 306 33 156 Revenue growth -11,7 % 44,6 % 19,3 %EBITDA margin 11,4 % 11,4 % 8,8 %EPS (NOK) 0,63 0,87 0,44
Group financial profile – remains strong
422469
535 565
409
050
100150200250300350400450500550600
1Q19 3Q192Q19 4Q19 1Q20
Available cash
Including 253 MNOK of a 300 MNOK credit facility in Danske Bank, as of Q1 2020
200 MNOK revolving credit facility fully utilized in Q1 2020
Working capital Average working capital
307
496465
287
447
0
2
4
6
8
10
12
14
16
18
0
50
100
150
200
250
300
350
400
450
500
10,8%
1Q19
16,5%
2Q19
14,8%
3Q19
9,3%
4Q19
15,0%
1Q20
The graph shows absolute working capital and working capital relative to last twelve months revenue
307
385 406389
424
0
5
10
15
0
50
100
150
200
250
300
350
400
450
1Q201Q19
10,8%
4Q19
12,8%
2Q19
12,9%
3Q19
12,6% 14,2%
The graph shows 12 months average working capital and average working capital relative to last twelve months revenue
CAPEX
0
5
10
15
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
90 000
6,8%
35 556
4Q 2017
14,2%
78 9364,3%
25 517
1Q 2018
42 852
2Q 2018
8,4%
2,6%
16 881
43 888
3Q 2018
(TNOK)
4Q 2018
5,8%
42 22530 325
4,2%
1Q 2019
3,0%
23 913
2Q 2019
64 893
3Q 2019
6,7%
4Q 2019 1Q 2020
4,0%
CAPEXCAPEX/Sales %
5 55917 906
Ordinary
Rental
6 860Intangible
CAPEX breakdown 2020CAPEX and CAPEX/Revenue %
Net interest bearing debt/EBITDA of 3,0
Net interest bearing debt (MNOK) and net debt/EBITDA
309
371
632
531
726662 632
780
2,6 2,5
1,9
2,2
1,82,3
3,0
0,35
0,70
1,05
1,40
1,75
2,10
2,45
2,80
3,15
0
100
200
300
400
500
600
700
800
1Q18
1,3
1,6
1Q19 2Q192Q18 3Q18 4Q18 3Q19 4Q19 1Q20
605
NIBD/EBITDA (12 mth rolling) NIBD
Change in net interest bearing debt (TNOK)
Excluding IFRS 16 liabilities
Net interest bearing debt 31.12.2019 631 567 EBITDA -86 000 Income taxes paid 3 389 Net interest paid 11 080 Capex 30 325 Acquisitions 15 458 Long-term financial assets 9 818 Paid dividend 34 955 Sale of fixed assets -129 Currency effects -18 071 Other changes in working capital 147 119 Net change 147 945
Net interest bearing debt 31.03.2020 779 513
Group financial profile – remains strong, continued
Equity and Equity / Total Balance NIBD / Equity
491 504
1 0171 063 1 055 1 068 1 096
9911 037
0
10
20
30
40
50
0100200300400500600700800900
1 0001 100
37,8%
3Q182Q181Q18
28,0% 26,8%
38,2% 39,3%
4Q18
38,4%
1Q19 2Q19 1Q20
39,8%
3Q19
37,9%
4Q19
37,3% 0,63
0,74
0,620,57
0,49
0,68
0,600,64
0,75
0,0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
4Q192Q191Q18 2Q18 3Q18 3Q194Q18 1Q19 1Q20
• Total effect of IFRS 16 on the balance sheet end of March 2020 is 423 MNOK, negatively affecting the equity ratio when comparing to quarters before 2019. Not included in graph above
• Equity ratio would be 31,2% including IFRS 16 liabilities
Group financial profile, continued
ROCE ROACE
1Q18 2Q18 4Q19
16,4%
3,6%
13,7%
1Q19
7,9%
3Q18
7,0%
4Q18 2Q19
7,9% 8,5% 9,8%
3Q19 1Q20
2,6%
11,9%
16,8%
3Q18 1Q202Q18
9,1%
1Q18
14,5%
4Q18
8,6%
1Q19
9,0%
2Q19
10,1%
3Q19
3,3%
4Q19
2,7%
Exceptional items impacting Q4 ROCE
ROCE is calculated ex balance sheet items of IFRS 16
ROACE is calculated with the average balance sheet items last four quarters
ROACE is calculated ex balance sheet items of IFRS 16
Cash flow statementCONDENSED CONSOLIDATED STATEMENT OF CASH FLOW 2020 2019 2019(NOK 1 000) Q1 Q1 Total
Net cash f low from operations 76 484 78 950 180 153 Net cash f low from change in w orking capital -147 119 57 145 30 616 Net cash f low from operational activities -70 635 136 095 210 769 Net cash f low from investment activities -55 474 -22 695 -140 099 Net cash f low from financial activities 108 270 -102 347 -65 868
Net change in cash and cash equivalents -17 839 11 053 4 801 Net foreign exchange differences 12 357 -3 329 -664 Cash and cash equivalents at the beginning of the period 160 999 156 862 156 862 Cash and cash equivalents at the end of the period 155 517 164 587 160 999
Balance sheetBALANCE SHEET 2020 2019 2019
(MNOK) 31.03 31.03 31.12
ASSETS 3 327 3 196 3 034 Intangible non-current assets 1 094 1 085 1 028 Tangible non-current assets 241 336 364 Financial non-current assets 85 74 75 IFRS 16 - RoU Asset 547 443 417 Inventory 573 455 514 Receivables 633 637 476 Cash and cash equivalents 156 165 161
LIABILITIES AND EQUITY 3 327 3 196 3 034 Equity 1 034 1 055 986 Minority interest 4 1 4 Long-term interest bearing debt 862 579 665 Short-term interest bearing debt 73 117 127 IFRS 16 - Lease Liability 423 446 425 Non-interest bearing liabilities 932 999 825
Dividend Policy
• The company is aiming to give the shareholders a competitive return on investment by a combination of cash dividend and share price increase
• The company’s dividend policy shall be stable and predictable
• When deciding the dividend the Board will take into consideration expected cash flow, capital expenditure plans, financing requirements/compliance, appropriate financial flexibility, and the level of net interest bearing debt
• The company needs to be in compliance with all legal requirements to pay dividend
• The company will target to pay dividend twice a year
----------------------------------------------------------------------
• A dividend of NOK 1.00 per share was paid on 3 March 2020, before the main outbreak of Covid-19 in Norway
Dividend and dividend policy
1,00 1,00 1,000,75
1,251,50
1,75
1,00
20182008 20162014 20172015 2019 2020 Q1 YTD
Cash Dividend
Largest shareholders20 largest shareholders
Origin of shareholders, 5 largest countries
Share development
Subscribe to Oslo Stock Exchange Releases from AKVA by email on:http://ir.akvagroup.com/investor-relations/subscribe
No of shares % Account name Type Citizenship20 703 105 62,1 % EGERSUND GROUP AS NOR
3 900 000 11,7 % WHEATSHEAF INVESTMENTS LIMITED GBP1 192 893 3,6 % SIX SIS AG Nominee CHE
899 058 2,7 % VERDIPAPIRFONDET NORDEA KAPITAL NOR825 932 2,5 % VERDIPAPIRFONDET ALFRED BERG GAMBA NOR659 231 2,0 % VERDIPAPIRFONDET NORDEA AVKASTNING NOR435 740 1,3 % VERDIPAPIRFONDET NORDEA NORGE PLUS NOR356 300 1,1 % MP PENSJON PK NOR344 883 1,0 % EQUINOR PENSJON NOR329 950 1,0 % J.P. Morgan Bank Luxembourg S.A. Nominee LUX300 000 0,9 % J.P. Morgan Bank Luxembourg S.A. Nominee FIN298 000 0,9 % Norron Sicav - Select LUX177 883 0,5 % AKVA GROUP ASA NOR150 000 0,4 % DAHLE NOR110 214 0,3 % VERDIPAPIRFONDET DNB SMB NOR100 000 0,3 % UBS Europe SE Nominee LUX100 000 0,3 % ASKVIG AS NOR100 000 0,3 % BERGEN KOMMUNALE PENSJONSKASSE NOR
81 912 0,2 % EQUINOR INSURANCE AS NOR81 401 0,2 % NORSK LANDBRUKSKJEMI AS NOR
31 146 502 93,4 % 20 largest shareholders2 187 801 6,6 % Other
33 334 303 100,0 % Total number of shares as per 31.03.2020
No of shares % Origin No of shareholders26 338 237 79,0 % Norway 823
3 915 920 11,7 % Great Bri ta in 171 281 470 3,8 % Switzerland 5
758 500 2,3 % Luxembourg 4362 463 1,1 % Finland 5677 713 2,0 % Other 68
Total number of shareholders: 968 - from 28 different countries
0
5 000 000
10 000 000
15 000 000
20 000 000
25 000 000
30 000 000
0
20
40
60
80
100
apr.19 mai.19 jun.19 jul.19 aug.19 sep.19 okt.19 nov.19 des.19 jan.20 feb.20 mar.20
Last 12 monthsTrading volumeShare price
0
30 000 000
60 000 000
90 000 000
120 000 000
0
20
40
60
80
100
2015 2016 2017 2018 2019 2020
Last 5 yearsTrading volumeShare price
Outlook – by CEO Knut Nesse
AKVA group in brief
Leading technology and service partner
Listed on Oslo stock exchange since 2006
Deliveries in 65 countries over 40 years
Companies in 10 countries. 1 444 employees
SolutionsCage Based Technology Land Based Technology Software
OPEX Based Revenue
CAPEX Based Revenue
Order backlog and inflow, 2017 through 2020
647951982
698825961751726
954 844908
430
479629605
620449611
629359
569537448
674
600
201920182017 2018 2019
1 045
1 085
2020 2020 2017 2018 2019 2020 2017 2018
1 3561 318
1 020
2019 2020
1 077
1 3811 2741 430
1 611 1 650 1 5721 380
1 523
2 294
2017
486 588806 699
475 384682
454 414672
525779
610
103
300
304
51 218
215
55
51
20182018 20192019 2017
709
589
600
2020 2019
87
2018
77
2017
92
2020
34
1 425
2017
778
2019 2020
33
2017 2018 2020
10639
1 106778
471
760
546448
557
997
Wise OtherLand BasedCancelled
Order backlog Order intake
Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4
Outlook – AKVA group• Order backlog remains high• Service station for nets to be built in northern Norway (with partner), plans for additional
station underway• New generation tube net (preventive sea lice solution) launched, strong interest in the
market and contract of 100 MNOK signed in April 2020• Presence in eastern Canada, completed the purchase of 70% of the shares in
Newfoundland Aqua Service Ltd in February• Cost savings program initiated• Maintained focus on full grow out RAS facilities within the Land Based segment, despite
setback on China project• Digitalization strategy making further progress with additional installations for Precision
feeding – pipeline is growing
Norway should strengthen and evolve our natural comparative advantages in the aftermath of Covid-19 by granting new innovation permits for coastal farming. This will:
• Advance Norway's natural advantages and affirm the position as the technological leader of fish farming
• Help promote focus on sustainable fish farming with new innovative ways to design, build and operate
• Create activity and incentives for supplier industry and start-ups
AKVA’s input to Norwegian authorities