Q2 2019 Presentation Oslo – 14 August 2019 Hallvard Muri, CEO Simon Nyquist Martinsen, CFO
Agenda Highlights Financial performance Outlook Q&A
Highlights Q2 2019 – by CEO Hallvard Muri
Strong financial performance Order intake • Order intake of 760 MNOK +61% 1 107 • Strong contributions from all segment and regions in the quarter 44 997 46 300 • Significant land based tender won with Russian Sea of 11.9 MEUR, 218 expected signing in Q3/Q4, not yet included in order backlog 760 SW 639 38 45 77 546 • Barge Supply and Sales Contract signed with Grieg NL Seafarms Ltd LBT 557 33 448 51 in Q3 2018, not included in order backlog 53 471 38 33 92 43 34 87 • 762 Co-operation agreement signed with Cooke Aquaculture in August, 732 644 CBT with potential for delivery of several larger land based smolt 543 471 projects, which the first is expected to be signed in Q3 421 376 342 • Last twelve months order intake of 3,312 MNOK, compared to 2,555 MNOK full year 2018 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
High activity in all regions Revenue • 27% increase in revenue compared to Q2 2018 +27% • Egersund Net group of companies included from September 1 st 2018 • Americas another positive quarter with revenue of 136 MNOK, up from 125 MNOK in Q2 2018 852 798 726 • 637 Positive order intake development in Nordic CBT, driving 627 589 557 revenue, increase of 12 % compared to YTD last year 484 • Good development in both net sales and net service after integration of AKVA / Egersund net organizations 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
EBITDA development • EBITDA of 101 MNOK in the quarter, including 15 MNOK in effect EBITDA of reclassification due to IFRS 16 (leases) +94% • Americas continued positive development with an EBITDA of 12 101 97 MNOK compared to 10 MNOK in Q2 2018, driven first and foremost 7 7 8 by improved margins 8 • Nordic CBT segment 6 % increase in EBITDA YoY, with strong contributions by AKVA Marine Services and Sperre 86 82 • EBITDA in the Land Based segment on same level as in 2018 with 12 71 61 60 59 57 MNOK, on lower revenue 52 • The effect of IFRS 16 is 15 MNOK in the quarter, mainly related to property rental agreements. YTD effect of 29 MNOK 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 IFRS 16 - EN IFRS 16 - AKVA
Continued strong order backlog Order backlog • Second quarter 2019 – Highlights – Order backlog at end of June of 1.6 BNOK +23% 1 611 1 572 – Signed another barge to Russian Sea in June of 37 MNOK 1 430 1 380 1 381 1 356 – Awarded Land Based agreement with Russian Sea of 11.9 MEUR, 1 274 629 611 479 1 085 not in backlog yet 448 537 629 449 – 359 Acquisition of remaining shares in AKVA Marine Services – Integration of Egersund Net as planned and development in net 982 961 951 908 844 825 sales and service strong 751 726 – Termination of agreement to divest Wise lausnir ehf 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Land Based
Key financial metrics Revenue EBITDA EPS +80% +106% +140% 0,23 0,30 0,19 0,12 1 650 198 1,80 1,74 1,67 1 216 1 047 119 111 1,01 801 82 Q2 16 Q2 17 Q2 18 Q2 19 Q2 16 Q2 17 Q2 18 Q2 19 Q2 16 Q2 17 Q2 18 Q2 19 YTD YTD YTD Amortization from intangible assets related to acquisitions 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.
Our presence AKVA group Agents and distributors
Revenue in geographical regions AKVA group’s geographical regions – absolute and relative 852 798 726 637 627 589 557 61% 63% 66% 68% 69% 70% 633 74% 76% 484 603 506 392 412 372 379 334 22% 19% 20% 20% 139 23% 113 125 24% 17% 145 17% 177 136 128 98 18% 17% 14% 106 105 11% 90 74 9% 9% 7% 59 52 49 6% 42 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Nordic Americas EME
Development in OPEX based revenue • Egersund Net contributing 112 MNOK in the quarter 33,8% 300 35 32,3% 234 257 29,0% 28,2% 245 30 • 27,5% 250 Stable development for the rental business (Scotland and 26,1% Norway) in 2019 25 22,5% 22,1% 112 200 94 90 20 • 31 Service in ASA Nordic with higher revenue and margins compared 150 to Q2 2018 15 100 10 • Stable revenue from the Software business, 39 MNOK in Q2 151 149 145 146 144 140 141 130 50 2019, compared to 42 MNOK in Q2 2018 5 0 0 • Higher activity level in the Norwegian marine service business in 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Q2 2019 compared to Q2 2018, and with healthy order backlog. Well positioned for high season in Q3 % of total revenue OPEX Based revenue Egersund Net
Revenue by product group and species By product groups – Q2 2019 By species – Q2 2019 852 852 798 798 44 56 1 23 39 726 726 66 0 118 13 95 44 74 637 1 637 627 627 42 589 589 40 129 47 42 557 1 55 189 557 1 47 52 51 218 46 1 46 124 484 54 116 484 34 Software 0 108 32 Non seafood 38 46 201 0 124 LBT S&AS 98 37 83 140 Other species 82 774 719 LBT 99 102 610 CBT S&AS 539 526 500 503 471 446 Salmon 401 370 351 352 334 287 CBT 260 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Salmon = Revenue from technology and services sold to production of salmon Cage Based Technology = Cages, barges, feed systems and other operational systems for cage based aquaculture Other species = Revenue from technology and services sold to production of other species than salmon S&AS Cage Based = Service and after sales for cage based aquaculture Non Seafood = Revenue from technology and services sold to non seafood Software = Software and software systems customers Land Based Technology = Recirculation systems and technologies for land based aquaculture S&AS Land Based = Service and after sales for land based aquaculture
Q2 – Operational Highlights • Improved and stable operations at pipe manufacturing • Continued strong pipeline of land based projects, co-operation agreement signed with Cooke in August • Continued good demand in Chile and stable margins as a result of improvement programs • Strong performance in the acquired net and net service business, Egersund Net • Good progress made in renewal of Fishtalk and AKVAconnect software platforms, and AI (intelligent feeding program) co- operation with Observe starting to materialize in contracts • Initiated market research to investigate broadening product and service offering in Chile • Good progress made to establish foothold in New Foundland, Loi signed with local partner for joint venture • Continued strong competition in Norwegian barge business, operational improvement program initiated • First barges delivered out of new partner in Vietnam • New product/offerings made ready for presentation at AquaNor, including new cage concept and waterborne feeding
1. Atlantis Subsea Farming 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. 5. On June 16th 2017 the Directorate forwarded the appeal to the Norwegian Ministry of Trade, Industry and Fisheries, for their final decision. On December 18 th 2017 The Ministry rejected the appeal. The decision is final and 6. cannot be appealed. On February 22 nd 2018, The Directorate announced that the Company has been 7. granted one license. 8. Atlantis Subsea Farming AS is now in a technology testing phase with regards to Submerge and raise the cage – safe and remote execution of the project. Underwater feeding Fish health operations Daily operations (dead fish removal, surveillance, cleaning, etc) Air to the salmon Artificial air space
Financial performance Q2 2019 – by CFO Simon Nyquist Martinsen
Q2 2019 – Financial highlights Revenue • 852 Last twelve months order intake and revenue now at 798 3,312 MNOK and 3,013 MNOK respectively 726 637 627 • The order book has decreased to 1,572 MNOK at the end of 589 557 537 Q2 2019 510 484 449 408 393 • 354 Strong growth in the Nordic region, decline in EME and Land Based (due to phasing of orders) • Egersund Net integration process working as planned, and both new sales of nets and services is showing good sales growth (pro forma compared to last year) Q1 Q2 Q3 Q4 2016 2017 2018 2019
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