AKVA Group — Earnings Release 2016

Nov 3, 2016

AKVA group ASA : 3Q 2016 financial reporting

AKVA group ASA : 3Q 2016 financial reporting

High market activity - growth strategy continues

AKVA group completed third quarter with good overall performance. Revenue in the

third quarter of 2016 ended on 354 MNOK (355 MNOK) with an EBITDA of 38 MNOK (41

MNOK). Third quarter EBITDA margin was 10.8% (11.4%). The P&L growth in the

quarter was softened by slow operations in Americas and by restructuring of AKVA

group Denmark A/S.

The growth strategy in AKVA group continues with the acquisition of Sperre AS, a

leading ROV and subsea provider to the aquaculture industry, as well as

investments in increased capacity in Helgeland Plast AS and increased presence

in the Mediterranean.

AKVA group is ending the quarter with the highest order backlog ever of 886

MNOK.

"AKVA group continues to deliver stable high margins despite the challenges we

face in Americas and in AKVA group Denmark A/S this quarter. The recent year's

transformation of AKVA group to become a better performing and more diversified

Group is reflected in the Q3 results. Our growth strategy continues with the

recent acquisition of Sperre AS, investments in Helgeland Plast AS as well as

extension of our activities in the Mediterranean. Operationally and financially

AKVA group is well positioned for further growth. This is also underlined with

the highest order backlog ever at the end of a quarter", says CEO of AKVA group

ASA Trond Williksen.

Cage Based Technology (CBT)

Nordic CBT had a good performance in Q3. A wide range of products continues to

contribute to the financial performance. Helgeland Plast AS continues with good

performance this year and the Farming Services area with AKVA Marine Services AS

is also performing well.

We have experienced reduced activity in Americas this quarter compared to same

quarter last year resulting in a reduction in EBITDA year on year of 8.7 MNOK in

Q3. There has been low activity in Chile in Q3 due to reduced service and

technology sales in a  challenging market caused by uncertainty of future

direction and regulatory regime, now finally about to be resolved. We have over

the last years reduced our financial exposure in Chile significantly. The

Chilean operation is now leaner and well prepared for an upturn in the market

when this happens. Canada had another unusually slow quarter. Australia

continues to be a small, but profitable operation.

UK had a decent quarter and continues to have a high level of OPEX based

revenue. Turkey continues with another very good quarter. We are experiencing

increased activity in the Sea Bass and Sea Bream industry in the Mediterranean.

Export to emerging markets have a relative low, but profitable operation in Q3.

Emerging markets are dominated by a few but large contracts and this will

continue to give variations in the P&L quarter by quarter.

Software (SW)

Software has ended another good quarter. Both AKVA group Software AS and Wise

lausnir ehf experienced improved performance year on year in Q3. The software

segment also have improved performance year on year YTD, both on topline and in

margins. Software continues to invest in new product modules, which is expected

to strengthen the financial performance of the software segment further.

Land Based Technology (LBT)

There have been good financial performance in Aquatec Solutions A/S and

Plastsveis AS in Q3 and the high market activity continues. However, Q3 was a

weak quarter for AKVA group Denmark A/S. New management has initiated needed

efforts to make the unit more efficient. This restructuring have resulted in a

negative EBITDA of MNOK 4.9 in Q3. The work to improve and make this a more

streamlined entity continues into Q4. The land based segment ended the quarter

with a high order backlog which represents 47% of the total order backlog in the

Group at the end of Q3 2016. The land based segment increased its revenues year

on year with 85% and contributed 22% of total revenues in Q3 2016, hence land

based is becoming a significant part of AKVA group.

Order Backlog

We have experienced continued good market activity throughout the third quarter

of 2016. The order inflow in Q3 2016 was 417 MNOK (505 MNOK). Underlying

operational order inflow (adjusted for the one time intake of the order backlog

of Aquatec Solutions in Q3 2015) increased from 318 MNOK to 417 MNOK in the

quarter. The order backlog at the end of Q3 2016 was 886 MNOK (643 MNOK). This

is the highest order backlog ever for AKVA group.

Balance sheet

The balance remains strong. Working capital as a percentage of 12 months rolling

revenue is 8.8% (9.1%). We are able to maintain a very low working capital

despite record high activity. Cash and unused credit facilities amounted to 165

MNOK at the end of Q3 (226 MNOK).Total assets and total equity amounted to

1,179 MNOK (1,163 MNOK) and 438 MNOK (443 MNOK) respectively, resulting in an

equity ratio of 37% (38%) at the end of Q3.

Acquisition of Sperre AS - the leading ROV provider

Sperre AS will be the "center of excellence" in AKVA group in terms of ROV

technologies as well as relevant subsea technologies. The intention and ambition

is to develop an undisputed industrial leadership in the ROV and subsea

technology area within aquaculture. AKVA group ASA acquires 66% of the shares in

Sperre AS. The closing of the transaction will take place on November

4th, 2016. The enterprise value for all the shares in Sperre AS is NOK 126.9

million. In addition, AKVA will pay an adjustment amount based on the net debt

and working capital position at closing. AKVA group ASA have an option to buy

the remaining 34% of the shares after three years, where the pricing is based on

financial performance in the three year period. The acquisition will be paid in

cash and will be financed with a loan from Danske Bank.

Changes in operational structure

From August 2016 and onwards land based technologies was carved out as a new

Group entity. The entity is headed by Morten Nielsen who became a new member of

the Group management team, responsible for all land based operations in AKVA. In

addition, Morten Nielsen also holds the roles as General Manager in both Aquatec

Solutions and AKVA group Denmark.

Sperre AS will be included as a new unit in the Nordic cage based segment of

AKVA group.

Expansion into the Mediterranean - new office in Spain

We now see positive signs in the Sea Bass and Sea Bream market in the

Mediterranean. AKVA group is therefore about to establish a new office on the

east coast of Spain. We will have service resources on the ground to support our

customer base. This office will strengthen our presence and position in the

Mediterranean region.

Deliveries into Iran

AKVA group has worked actively in Iran for the last 2-3 years and we have now

delivered the second cage farm in this market to Bushehr Aramseyd Co. Reysali

Delvari Dam. We are doing sales of both cage based and land based technology

into Iran. These are equally big markets, i.e for cage based and land based

technology. The Iranian Government strategy is to grow cage farming by 200.000

tons in 5 years (Barramundi, Sea Bream, Rainbow Trout, Sturgeon, etc). The

Government is already issuing licenses, providing financing and setting

deadlines for starting-up production.

Atlantis Subsea Farming AS

In partnership with the companies Sinkaberg-Hansen AS and Egersund Net AS, AKVA

group ASA established the company Atlantis Subsea Farming AS on February

1st, 2016 with the purpose of developing submersible fish-farming facilities for

salmon on an industrial scale.  Atlantis Subsea Farming AS has applied for six

development licenses to enable large-scale development and testing of the new

technology and operational concept.

Atlantis Subsea Farming AS is in dialogue with the Directorate of Fisheries and

we are waiting for a final resolution on the issue of development licenses.

Outlook

We have a good mid-term outlook due to high market activity and the large order

backlog. The good demand in the Nordic cage based segment continues. The land

based activity in AKVA group is growing. This trend is expected to continue and

the land based segment is becoming a larger part of AKVA group. UK and Europe is

expected to perform well going forward with a growing order backlog.

Canada experienced less project sales so far compared to last year and we have

moderate expectations in this market going forward. We still have low

expectations in Chile, but there are now clear signs of improvement in this

market. Our exposure in Chile is reduced compared to prior years. Our Turkey and

Australian operations are expected to continue to perform well in the next

quarters with a good order backlog. Exports to emerging markets have a more

optimistic view compared to last year. However, the activity is still expected

to fluctuate due to the nature of the business. AKVA group continue to actively

seek strategic M&A opportunities within relevant segments. We continue our

effort to build service and after sales as a key business element in all our

markets and segments.

About AKVA group

AKVA group is a technology and service partner to the aquaculture industry

worldwide. The company has 768 employees, offices in 8 countries and a total

turnover of NOK 1.4 billion in 2015. We are a public listed company operating in

one of the world's fastest growing industries and supply everything from single

components to complete installations, both for cage farming and land based

aquaculture. AKVA group is recognized as a pioneer and technology leader through

more than 30 years. The Corporate Headquarter is in Bryne Norway.

Dated: 3 November 2016

AKVA group ASA

Web: www.akvagroup.com

CONTACTS:

Trond Williksen Chief Executive Officer

Phone: +47 51 77 85 00

Mobile: +47 91 63 01 73

E-mail: twilliksen@akvagroup.com

Eirik Børve Monsen Chief Financial Officer

Phone: +47 51 77 85 00

Mobile: +47 91 63 98 31

E-mail: emonsen@akvagroup.com

This information is subject of the disclosure requirements acc. to §5-12 vphl

(Norwegian Securities Trading Act)