Q4 2019 Presentation Oslo 14 February 2020 Knut Nesse, CEO Agenda - PowerPoint PPT Presentation

Q4 2019 Presentation Oslo – 14 February 2020 Knut Nesse, CEO

Agenda Highlights Financial performance Outlook Q&A

Highlights Q4 2019

Strong order intake Order intake • Order intake of 1425 MNOK +43% 1 425 • 500 MNOK order with Nordic Aqua Partners for a land based 19 SW salmon farming facility in China 1 107 • 10,3 MEUR contract with Cooke Aquaculture for a smolt 44 997 778 facility in Chile. 815 LBT 46 33 760 300 639 218 50 • 38 Order signed for phase 3 of a smolt facility at Tytlandsvik 45 Aqua 51 77 448 471 38 • Strong quarter for Europe & ME, especially within export 43 34 87 762 732 695 644 591 CBT 543 • Last twelve months order intake of 4,014 MNOK, compared to 376 342 2,555 MNOK full year 2018 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q 19 4Q 19

Revenue development Revenue • The software business sold in 2019 was included with 29 MNOK in Q4 2018 -10% • Americas (Chile) and the Nordics have both significant 18 higher order books compared to last year, but less revenue in the quarter 852 • Land Based do also have significant higher order book, 798 753 726 655 though specifically due to one project being temporarily put 637 627 589 on hold, has less revenue compared to last year • Combined, export and Scotland have doubled their revenue in the period 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Gain sale Wise Technology for sustainable biology

EBITDA development EBITDA -171% 115 • EBITDA of minus 40 MNOK in the quarter, including 15 MNOK in effect of 101 18 reclassification due to IFRS 16 (leases) 97 7 7 7 • 8 The software business sold in 2019 was included with 5 MNOK in Q4 8 8 2018 71 60 59 • 57 Americas has improved EBITDA margins compared to last year, although 52 absolute contribution in the period is down. 86 82 82 • The Nordic CBT segment (excluding Egersund Net) is improved in the 71 60 59 57 52 quarter with good performance in Sperre and AMS 7 • The activity in Egersund Net has been low compared to LY, with effect on 8 absolute and relative EBITDA • The results in the quarter are impacted by certain exceptional items -55 which are further described on the next slides -40 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Gain sale Wise IFRS 16 - EN IFRS 16 - AKVA Technology for sustainable biology

Exceptional items in Q4 Profit warning sent January 20 th as preliminary Q4 numbers was poor compared to expectations:   Exceptional high guarantee costs within the Nordic Cage based segment  Several projects within cage based with cost overruns  Bad debt and claims within the Land Based segment  Write off of control system modules to be phased out  The above is estimated to around 55 MNOK – around 25% related to Land Based and the rest to Cage Based.  EBIT expectations for Q4 after this was negative with 25-30 MNOK  Year-end closing procedures uncovered significant losses in Land Based projects, new profit warning sent February 7 th  Losses not accounted for fully during the year – all projects in Danish subsidiaries revisited  Approximately 72 MNOK in additional losses  EBIT after this for Q4 negative with 106 MNOK

Review of Land Based activities  What happened and why  Late awareness of cost overruns in projects  Incorrect financial recognition from project accounting  Actions in progress  Third party evaluation of project management competence  Strengthening the organization with new positions  Evaluation of margin in order backlog  New generation of projects being started  Project execution capabilities will be strengthened  Improved engineering and known technology  Improved risk management  Pricing of all larger projects reviewed – normal margins expected MNOK

Record high order backlog Order backlog • Fourth quarter 2019 – Highlights – Order backlog at end of December of 2.3 BNOK +69% – Included orders in Q4 for a RAS facility in Chile with Cooke (10,3 2 294 MEUR) and a RAS facility (full grow out) in China with Nordic Aqua Partners for 500 MNOK 1 611 1 572 – 1 274 Solid growth in backlog also within export, Scotland and Spain 1 524 1 430 1 381 1 356 1 274 – Other larger orders in backlog includes 4 barges for Chile with a value 629 611 569 479 1 085 448 537 449 of 12,6 MUSD 359 – Won Land Based tender with Russian Sea of 11.9 MEUR in June, not 1 020 982 951 961 955 yet in backlog 908 844 825 726 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Land Based Technology for sustainable biology

Key financial metrics Revenue EBITDA EPS +92% +89% 0,42 0,47 3 077 272 3,86 240 238 2 579 3,17 2 088 0,34 144 1 603 0,59 1,06 0,44 Q4 16 Q4 17 Q4 18 Q4 19 Q4 16 Q4 17 Q4 18 Q4 19 Q4 16 Q4 17 Q4 18 Q4 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 852 798 771 726 655 637 627 589 61% 63% 65% 66% 70% 70% 633 74% 76% 541 603 506 392 428 412 372 22% 19% 20% 22% 139 20% 113 125 155 144 24% 17% 145 17% 177 136 18% 17% 14% 106 13% 105 90 83 10% 74 76 9% 7% 59 6% 42 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Nordic Americas EME

Development in OPEX based revenue • Egersund Net contributing 82 MNOK in the quarter, with 33,8% 300 35 32,3% increased margins this quarter compared to 4Q 2018 31,2% 30,1% 28,2% 30 27,5% 250 • Stable development for the rental business (Scotland and 25 22,5% 22,1% 112 200 Norway) in 2019 94 90 104 20 31 82 150 • AKVA group Software with revenue increase of 10 % compared to 15 Q4 last year 100 10 151 149 144 146 141 136 130 • 116 The high activity level in the Norwegian marine service business 50 5 continues, and with significant improved margins in fourth quarter 2019 compared to Q3 2018 0 0 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 • The Norwegian marine service business with solid order backlog % of total revenue OPEX Based revenue Egersund Net

Revenue by product group and species By product groups – Q4 2019 By species – Q4 2019 852 852 798 798 44 56 771 1 771 39 23 726 0 726 66 28 118 0 68 13 95 44 655 655 92 74 1 35 637 637 627 627 16 1 20 589 589 42 40 129 47 37 Software 42 1 189 55 1 109 Non seafood 47 51 218 52 212 46 1 124 LBT S&AS 116 34 Other species 108 201 LBT 180 98 140 82 774 CBT S&AS 719 669 610 598 539 526 500 Salmon 503 446 439 370 CBT 351 352 349 334 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Salmon = Revenue from technology and services sold to production of salmon Cage Based Technology = Cages, barges, feed systems, nets 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

Q4 – Operational Highlights • Challenging quarter with various exceptional items causing profit warning, and subsequently findings of irregularities within project accounting within Land Based • Solid order intake within Land Based and first large order for a full grow out salmon facility signed, with a value of 500 MNOK – new strategy for full grow out under development • The co-operation agreement for Land Based projects entered into with Cooke Aquaculture, resulted in an order for a RAS facility in Chile, with a value of 10,3 MEUR • Good progress made on establishing service business on New Foundland (agreement to acquire New Foundland Aqua Service Ltd signed in 2020) • New organizational structure established, see next slide. Plans for further strengthening the organization under development • AKVA Observe (precision feeding) offering in high demand, pipeline is growing • Strategy process initiated • Development of new camera system, next generation Tube Net and AKVAconnect control system, progressing well Technology for sustainable biology

New management structure CEO* CFO* CAGE BASED CAGE BASED CAGE BASED DIGITAL LAND BASED Marketing & Communications INTERNATIONAL NORDIC EGERSUND NET COO* COO* COO* COO* COO* Supply Chain & Business Excellence Research & Development Americas Nordic Egersund Net Software Denmark CTO* Norway Egersund Trading UK Nordic Services IT Operations Chile Australasia Export UAB Egersund Net New digital solutions HR & HSE Emel Balik (50%) Turkey Sperre Spain Helgeland Plast Grading Systems (70%) Quality Management Greece AKVA Marine Services * Part of Group Management Team Technology for sustainable biology