Q1 2017 Presentation Oslo – May 11 th , 2017 Hallvard Muri, CEO Simon Nyquist Martinsen, CFO Your Aquaculture Technology and Service Partner
Agenda 1 Highlights 2 Financial performance 3 Outlook 4 Q&A Your Aquaculture Technology and Service Partner
Highlights Q1 2017 - by CEO Hallvard Muri Your Aquaculture Technology and Service Partner 3
Continued high market activity Order Intake - Order intake of 589 MNOK in Q1 2017 (441 MNOK in Q1 2016) +34% 589 - Record high order intake Q1 561 51 SW 533 504 69 31 - Cage Based segment 435 MNOK in Q1, up 47% YoY 34 103 LBT 441 72 417 44 32 - The high activity in the Nordic region resulted in an order intake 250 350 348 214 57 of 242 MNOK in Q1 2017 101 33 30 63 80 - Increased activity in Chile, resulting of an order intake of 80 435 CBT 420 MNOK in the quarter 328 296 256 254 252 238 - Software segment 51 MNOK, up 16 % YoY - Land Based segment 103 MNOK in Q1, up 2% YoY. Significant 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 increase in quoting activity MNOK Your Aquaculture Technology and Service Partner 4
Strong quarter on revenue Revenue • Operating revenue of 510 MNOK in Q1 2017 (+117 MNOK +30% from Q1 2016): Main increase from Cage Based segment Nordic region, • +79 MNOK compared to Q1 2016 • Positive development in Chile YoY (+23 MNOK), as 510 449 positive market sentiment start giving effect 408 402 393 355 354 344 • Increase of 5 MNOK in revenues in the Land Based segment YoY 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 MNOK Your Aquaculture Technology and Service Partner 5
Positive development in EBITDA margin EBITDA • EBITDA of 54 MNOK in Q1 2017 (+14 MNOK from Q1 2016): +35% • Nordic region represents 42 MNOK of the EBITDA in the quarter • AKVA group Chile delivers an increase of 2.6 MNOK in EBITDA YoY 54 43 41 41 40 38 Positive development in Export, in particular Scotland • 27 24 • The Land Based segment ends the quarter with an EBITDA of 6.9 MNOK 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 MNOK Your Aquaculture Technology and Service Partner 6
High order backlog – good underlying performance Order Backlog First quarter 2017 – Highlights +55% 1 077 • Strong sales and order intake 998 885 822 430 • Order backlog end of March of 1.1 BNOK 412 697 649 643 417 • 437 EBITDA of 54 MNOK in the quarter 283 494 264 286 118 • 647 Dividend of 0.50 NOK per share paid in March 586 468 414 385 385 376 357 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Land Based MNOK Your Aquaculture Technology and Service Partner 7
Where we deliver AKVA group’s geographical regions Income distribution Q1 2017 (16) 10% (9%) 10% (10%) 80% (81%) Nordic Americas Nordic Export Export AKVA group Americas Agents and Distributors Your Aquaculture Technology and Service Partner
Strategic priority to increase OPEX based revenue OPEX based vs CAPEX based revenue Comments Focus on increasing OPEX based revenue – by developing software sales, • 140 35,0 % farming services, technology services and rental sales 30,6 % 28,3 % 120 30,0 % 27,9 % • Rental is an “all inclusive” service providing for instance light or picture for 26,0 % 24,9 % 24,7 % an agreed period of time (2 to 5 years duration) - reducing both CAPEX and 23,3 % 23,4 % 100 25,0 % operational work for the customer 80 20,0 % AKVA Marine Services is growing and competitiveness is strengthening by • introducing own manufactured net washers from Sperre – both in Norway 127 60 15,0 % 119 108 and Chile 101 100 99 91 90 40 10,0 % • Very good development of the rental business in Scotland in 2016, continued in 2017 20 5,0 % Software is ready to capitalize on recent and current development of • 0,0 % product modules, by ramping up sales activities 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 OPEX Based revenue % of total revenue Your Aquaculture Technology and Service Partner
Revenue by product groups and species By product groups – Q1 2 0 1 7 By species – Q1 2 0 1 7 Software Non Seafood S&AS Land Based 10,3% 0,1% Other species (11,3%) (0%) 5,9% Land Based Tech 8,0% 16,5% (11,3) (9,3%) (20,3%) 60,1% 15,3% (56,7%) Cage Based Tech (13,7%) S&AS Cage Based 83,8% (77,4%) Salmon Cage Based technologies = Cages, barges, feed systems and other operational systems for cage based aquaculture Salm on = Revenue from technology and services sold to production of salmon S&AS Cage Based = Service and after sales for cage based aquaculture Other species = Revenue from technology and services sold to production of Softw are = Software and software systems other species than salmon Land Based technologies = Recirculation systems and technologies for land based Non Seafood = Revenue from technology and services sold to non seafood customers aquaculture S&AS Land Based = Service and after sales for land based aquaculture Your Aquaculture Technology and Service Partner 10
Q1 – Operational Highlights • Expanding and focusing in export markets (Cage Based and Land Based) • Atlantis – Update on development licenses Your Aquaculture Technology and Service Partner
New office in Iran Iranian market Trout AKVA cage farm No. 4 AKVA cage Developing industrial scale fish farming is top • farm No. 1 government priority AKVA cage farm No. 2 ‒ Adopting the «salmon model» AKVA land based AKVA cage farm No. 2 farm No. 3 ‒ Bigger farms ‒ Scale of economy ‒ Better equipment AKVA land based ‒ RAS Land Based juvenile farms farm No. 1 • AKVA group Middle East LLC is about to be established Barramundi & Sea Bream AKVA group Middle East LLC to be established Your Aquaculture Technology and Service Partner
1. Atlantis Subsea Famring AS applied for 6 development licenses the 29th of January 2016 2. The Norwegian Directorate of Fisheries have informed the company that the company’s concept has progressed another step further in the process to get awarded development licenses. 3. The Directorate will go ahead with processing the application limited to 2 licenses, but have rejected the application in terms of the other 4 permits applied for. Risk management 4. On May 9th 2017 the company appealed the decision of rejecting the 4 permits. Submerge and raise the cage – safe and remote Underwater feeding Fish health operations Daily operations (dead fish removal, surveillance, cleaning, etc) Air to the salmon Artificial air space Your Aquaculture Technology and Service Partner
Financial performance Q1 2017 – by CFO Simon Nyquist Martinsen Your Aquaculture Technology and Service Partner 14
Q1 2017 - Financial highlights Revenue 510 • Strong revenue in the first quarter on the back of a high 449 opening order book 408 402 393 355 354 • All regions in the Group with increased revenue in the 344 330 325 310 305 301 quarter YoY, largest impact from Cage Based Nordic • Last twelve months order intake and sales now at 2,100 MNOK and 1,721 MNOK respectively • Order book continue to grow YoY and compared to year end Q1 Q2 Q3 Q4 MNOK 2014 2015 2016 2017 Your Aquaculture Technology and Service Partner 15
Q1 2017 - Financial highlights , continued EBITDA (MNOK) 60 54 • Strong development in the Nordic region, good 43 41 41 40 38 40 34 32 contribution from AKVA Marine Services and Sperre 27 27 24 24 20 13 • Last twelve months EBITDA now at 159 MNOK up from 144 0 Q1 Q2 Q3 Q4 MNOK at year end – last twelve months margins at 9,2% up from 9% at year end 2016 EBITDA % 15 10,1% 11,4% 10,2% • Improved contribution from Land Based – restructuring and 10,8% 10,6% 10,4% 10,4% 8,2% 10,2% 10 8,0% 7,9% adjustments to cost base in Denmark last year 5,3% 4,4% 5 0 Q1 Q2 Q3 Q4 2014 2015 2016 2017 Your Aquaculture Technology and Service Partner 16
Cage Based Technologies Nordic ● CBT (Revenue and EBITDA%) Revenue YoY up 38% (24% organic) in total for the region ● 11,0% All entities contributing positively YoY with our wide range of products – makes the Group more diversified 385 400 12 10,9% ● The Farming Services operations is increasing and 50 350 strengthening the Group delivering an EBITDA of 4.6 MNOK 10 in the quarter 46 300 276 Americas ● 8 Increased activity in Chile – delivering a positive EBITDA of 37 250 1.9 MNOK in the quarter 31 ● 200 6 Our operations in Chile is ramped up to meet the higher activity level in the market 150 289 ● 4 Despite slow quarter in terms of revenue in Canada, the order intake was good 208 100 2 Export ● 50 UK ended a very good quarter with a total of 5.4 MNOK in EBITDA after a strong March 0 0 ● Turkey has started the year a bit slower than expected, 2016 Q1 2017 Q1 postponing deliveries into Q2 ● Export to emerging markets – with deliveries in Russia and Iran in Q1 – high quote activity EBITDA % Export Americas Nordic Your Aquaculture Technology and Service Partner 17
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