AKVA Group — Investor Presentation 2021

Nov 5, 2021

Q3 2021 Presentation

Klepp, 5 November 2021

Knut Nesse, CEO Ronny Meinkøhn, CFO

Agenda|Q3 2021

Highlights and Outlook

Financial Performance

Knut Nesse, CEO Ronny Meinkøhn, CFO

Q&A Session

Highlights|Q3 2021

• Awarded contract for the full grow-out RAS facility from AquaCon AS (approx. MUSD 150) subject to financing
• Low activity level and profit from the Sea Based business segment
• Limited impact from the COVID-19 restrictions
• Private placement of MNOK 321.7 completed in October
• Completed agreement to combine AKVA Marine Services AS with Abyss Group AS as a contribution in kind. AKVA group will own 25,5% in the combined company

Operation Innovation and Digital

• Continued high focus on developing capabilities within Land Based technology and advisory services
• Further development of deep-sea open farming concepts is crucial for strengthening the Sea Based business segment
• Strategic review of Digital business segment completed with clear ambitions and expectations of strong organic growth

Key figures|Q3 2021

Note: IFRS 16 was implemented January 2019. Comparable figures for the period 2017-2018 have not been prepared

Comments to the financial performance Q3

• The profitability in Q3 is negative impacted by the low activity level in the Sea Based business segment and revenue was MNOK 91 lower in Q3 21 compared to Q3 20
• The reduced activity level is temporary and mainly related to low revenue from core AKVA products in the Norwegian market
• The activity level is expected to be back to normal levels by 2022 but the low activity will also impact revenues to some extent in Q4 21
• In addition to the lower activity level the profitability is also impacted by costs related to ramp-up of innovation and digital organization

6

Key figures|YTD Q3 2021

2 289 MNOK 241 MNOK 101 MNOK

Revenue EBITDA excluding cyber-attack costs* EBIT excluding cyber-attack costs*

Notes:

• IFRS 16 was implemented January 2019. Comparable figures for the period 2017-2018 have not been prepared - Costs of 49,7 MNOK related to cyber-attack in Q1 21 are excluded 7

Market development

Source: Pareto Seafood Price Update 14.10.2021

8

Development order intake and order backlog

867 56 55 67 66 1 881 1 813 1 862 3 057

*Notes:

• 1 317 MNOK in order backlog related to AquaCon is subject to financing
• Order backlog is reduced by MNOK 79 in Q3 related to the divestment of AKVA Marine Services AS

COVID-19|Limited impact on operations

• Negative implications in H1 2021 were mainly related to travel restrictions and use of foreign workforce in ongoing operations
• Overall negative EBIT effect of approx. MNOK 15 in H1 21 related to COVID-19 restrictions
• The impact from the restrictions were limited in Q3 and we expect close to normal operations going forward

10

Key highlights new strategic investor

• Private placement corresponding to 10% of outstanding shares (3,333,430) in AKVA at a subscription price of NOK 96,50 per share
  • Total capital increase of MNOK 321.7
  • The transaction will accelerate AKVA's strategic agenda in all business segments
• Share sale existing shareholders of 3,266,762 shares at a purchase price of NOK 96,50 per share
  • Total amount of MNOK 315.2
• Establishment of investment platform for investments in land-based projects worldwide
• Awarded RAS contract from AquaCon subject to financing
• Strategic partnership with Israel Corp.
• New shareholdings:
  • Egersund Group AS ~ 51%
  • Israel Corp. ~ 18%
  • Other ~ 31%

Underlying demand growth implies 1–2 million ton volume increase by 2030

Salmon demand has increased by 1.1 mill tons from 2009-2019. "Base case" assumes similar demand growth till 2030 Consumption of salmon WFE in mill. tons

Key demand drivers

Focus on environment and health increasing demand for more environmentally friendly and healthy sources of protein

Salmon among favored species for consumption in developed and emerging seafood markets

Distribution to new markets fueling demand, ~45% of total volume growth 2015-2019

Product developments (e.g. smoked, marinated, sushi) resulting in salmon gaining market share

Modified Atmosphere Packaging (MAP) has prolonged shelf life and enabled grocery retailer distribution

The paradigm shift of land-based farming will require major capex investments until 2030 and beyond

1. Estimated 200 NOK/kg capex investment for land-based and 20 NOK/kg for conventional production

Technology for sustainable biology

14

Three main segments within land based

15

AKVA believes land-based farming has a great potential

Strategy for Land Based Salmon Farming

Market leading Zero Water Concept RAS enabling sustainable and costeffective production

Delivering complete scope of fish farming technology (e.g. feeding, fish tanks, fish handling, camera, lights, sensors, control system)

3

1

Data driven insight and intelligent farming systems enabling consistent and optimized production - "Precision Farming"

4

2

Production Advisory Services – RAS production competence group helping customers maximizing output and reducing cost

Standard 5,000 tonnes modules

Build up LB organization in Norway

AKVA group Innovation agenda – Centre of Excellence

17

Establishment of investment platform to accelerate growth ambitions

• AKVA and Israel Corp. has agreed to establish an investment platform
• Investments in land-based projects worldwide using AKVA technology and solutions bearing in mind ESG considerations
• Both parties will contribute with MUSD 10 each and this can be in a pre-established project
• The goal is to raise further commitments from co-investors and partners up to MUSD 100
• The investment platform will target projects which are "closer to the consumer" (i.e. North America, Middle East and Asia)

Market for smolt / post smolt land-based facilities expected to be strong towards 2030

Source: McKinsey analysis

Technology for sustainable biology 1. Investments including facilities currently under construction

19

On track for ramping up of Land Based activity to a run-rate of 1 billion NOK

Precision Farming Sea based Solutions

Marine Infrastructure

for secure containment and efficient operations

• Plastic and Steel pens
• Nets
• Moorings
• Boats
• Net Cleaning services and FNC8s

Precision Feeding for optimizing feed

conversion and growth

• Barges
• Feed systems
• Camera systems
• AKVAconnect
• AKVA Observe
• Fishtalk

Digital

to support precision farming with leading, open and modular digital solutions

• AKVAconnect
• AKVA Observe
• Fishtalk

Lice Solution to minimize number of lice treatments (Farmer's "license to operate")

• Tubenet
• Plastic Cages
• Feed system - Sub surface feeding
• Camera systems
• Lights
• Digital

High focus to further develop deep-sea farming concepts

• Avoid or reduce unwanted surface influences like lice, algae, currents, high temperatures.
• Better fish health and reduced mortality
• Improved fish welfare and reduced frequency and cost of reactive lice treatments
• Facilitate salmon farming at more exposed sites
• Knowledge-based development in cooperation with Institute of Marine Research, SINTEF Ocean etc.
• Reduced lice infestations is needed to sustain production growth (Norwegian Traffic Light system)
• Help farmers sustain fish health, reduce risk and increase profits.

Benefits from deep-sea farming AKVA's current commercial solutions

™

22

Future of digitization in aquaculture

23

Strategic guidance

Organic topline growth

Operational excellence

• Deliver min. 25% EBIT-increase Y-o-Y
• Step by step improve ROACE to min. 15% by 2023.

3 Digital platforms: AKVAconnect, AKVA Observe and Fishtalk

24

Agenda|Q3 2021

Introduction and Highlights

Financial Performance

Knut Nesse, CEO Ronny Meinkøhn, CFO

Q&A Session

Q3 2021 – Income statement

• Revenue reduced by MNOK 68 compared to Q3 20
• EBITDA and EBIT was MNOK 26 lower in Q3 21 compared to Q3 20 and is related to lower activity level and product mix
• Higher financial costs Q3 21 compared to Q3 20 partly related to lower share price on the investment in Nordic Aqua Partners (MNOK 2,5) and partly due to currency effects

	2021	2020	2021	2020	2020
NOK million	Q3	Q3	YTD	YTD	Total
Revenue	738	806	2 289	2 420	3 177
EBITDA	79	105	192	284	338
EBITDA margin	10,7 %	13,1 %	8,4 %	11,8 %	10,6 %
EBITDA ex. cyber-attack costs1	79	105	241	284	338
EBITDA margin ex. cyber-attack costs1	10,7 %	13,1 %	10,5 %	11,8 %	10,6 %
Depreciation, amortization and impairment	47	48	141	147	191
EBIT	32	58	51	138	147
EBIT margin	4,4 %	7,2 %	2,2 %	5,7 %	4,6 %
EBIT ex. cyber-attack costs1	32	58	101	138	147
EBIT margin ex. cyber-attack costs1	4,4 %	7,2 %	4,4 %	5,7 %	4,6 %
Net Financial Items	-13	-7	-48	-26	-26
Income (loss) before tax	19	51	3	112	121
Income (loss) before tax ex. cyber-attack costs1	19	51	52	112	121
Income tax	5	15	-3	28	31
Net income (loss)	14	36	6	84	91
Net income (loss) ex. cyber-attack costs1	14	36	44	84	91
Earnings per share (NOK)	0,43	1,07	0,17	2,51	2,74
Earnings per share (NOK) ex. special items 1	0,43	1,07	1,35	2,51	2,74

1 Cyber-attack costs of 49,7 MNOK in Q1

26

Revenue development

• Last twelve months order intake and revenue of MNOK 4,478 and MNOK 3,046, respectively
• Revenue reduced by 8% compared to Q3 20
• Increased activity in Land Based and Digital business segments but reduced revenue in Sea Based segment compared to Q3 20

Revenue by Market and Segment

• Significant reduction of 22% in revenue in Nordic market
• Positive trend continues in Europe & Middle East
• Somewhat increased activity in Americas

• Sea Based represents 82% of total revenue in Q3 21

EBITDA and EBIT development

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

110,0

120,0

• EBITDA of MNOK 79 / 10,7% in Q3 21
• Reduced profit compared to Q3 20 is mainly related to lower activity level and product mix in Sea Based segment

0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 12,0 13,0 14,0

*Note: Costs of MNOK 49,7 related to cyber-attack in Q1 21 are excluded

Technology for sustainable biology

0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 5,5 6,0 6,5 7,0 7,5

29

Cash flow and financial position

562 525 469 322 311 0 100 200 300 400 500 600 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21

Including a MNOK 300 available credit facility in Danske Bank

8,2%

375 368

12,1%

12,1%

Q3 21

261 259

8,2%

Q1 21

Q4 20 Q2 21

Available cash Net Working capital Net debt / EBITDA*

*Note: NIBD/EBITDA ratio for the period Q1 20 to Q3 20 is adjusted for non-recurring items of MNOK 108 and in the period Q1 21 to Q3 21 for non-recurring cyber-attack costs of MNOK 49,7

316

Q3 20

10,3%

0

100

200

300

400

500

600

Development return on capital employed

• ROACE reduced from 6,6% in Q2 21 to 5,1% in Q3 21
• Target of minimum 15% in 2023 remains unchanged

ROACE is calculated with the average balance sheet items last four quarters

ROACE is calculated ex balance sheet items of IFRS 16

* Note: Costs of MNOK 49,7 related to cyber-attack in Q1 21 is excluded when calculating ROACE

Dividend

• A dividend of NOK 1,00 per share was paid on 14 April 2021
• Due to the challenging first half year of 2021 the company has decided not to pay any dividend in the second half

Business segments

Sea Based Technology

• Revenue reduced by 13% in Q3 compared to Q3 20 while order intake was at the same level as last year

Nordic

• Revenue reduced by 25% in Q3 compared to Q3 20
• Total order intake of MNOK 339 and 22% reduction compared to Q3 20

Americas

• 24% reduction in revenue in Q3 compared to Q3 20
• Increase in order intake of 140% in Q3 compared to Q3 20

Europe & Middle East

• Significant increase in revenue of 47% but a reduction in order intake of 25% compared to Q3 20

Development OPEX based revenue

• As expected, the share of recurring revenue increased in Q3 as the travel restrictions were lifted in June
• Overall, the activity level at service stations in Norway were high during Q3

Land Based Technology

• Order intake of MNOK 1,349 in the quarter compared to MNOK 68 in Q3 2020
• Revenue increased by 20% in Q3 21 compared to Q3 20 and further increase in activity level is expected in Q4
• EBITDA of MNOK 6,6 (5,7%) in the quarter

• Revenue increased by 24% in Q3 21 compared to last year
• Reduced EBITDA margin related to ramp-up of organization

Outlook

• Order backlog is solid and forms a good foundation to execute our organic growth strategy
• Long term fundamentals remains unchanged as presented in our Capital Markets Day in November 2020
• Private placement of MNOK 321,7 will accelerate our strategic agenda within all three business segments
• Establishment of investment platform to facilitate our organic growth ambition within the Land Based business segment
• Digital solutions is an important part of AKVA groups total product offering and the company will continue to invest and improve our solutions, both within Sea Based and Land Based Technology

Agenda|Q3 2021

Introduction and Highlights

Financial Performance

Knut Nesse, CEO Ronny Meinkøhn, CFO

Disclaimer

• All opinions and statements in this notice are, regardless of source, given in good faith, and may only be valid as of the stated date of this notice and may be subject to change without notice. AKVA group has taken all reasonable steps to ensure that the information contained in this notice is true and not misleading. Notwithstanding such efforts, we make no guarantee as to its accuracy or completeness.
• This notice includes forward-looking statements. Forward-looking statements are based on current plans, estimates and projections, and therefore investors should not place undue reliance on them. Words such as "expect", "anticipate", "believe", "intend", "estimate, "should" and other similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements speaks only as of the date they are made, and we undertake no obligation to update any forwardlooking statement in light of new information or future events.
• Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and generally beyond AKVA group's control. Although it is believed that the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements are reasonable, investors should bear in mind that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements, including assumptions relating to general economic conditions in Norway and worldwide. Numerous factors exist and may occur that could cause AKVA group's actual operations, result or performance to differ from the forward-looking statements.
• Any use of information contained in this notice is at your own individual risk. AKVA group assumes no liability for any losses caused by relaying on the information contained in this notice, including investment decision taken on the basis of this notice.
• This notice is not intended for, and must not be distributed to, individuals or entities in jurisdictions where such distribution is unlawful.

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. 1 437 employees

Technology for sustainable biology

44

Solutions

Sea Based Technology Land Based Technology Digital

45

Revenue by species

Balance sheet

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION	2021	2020	2020
(NOK 1 000)	30.9.	30.9.	31.12.
Intangible fixed assets	936 882	1 055 369	1 043 350
Deferred tax assets	2 319	12 932	10 872
Fixed assets	625 070	725 511	749 124
Long-term financial assets	331 924	105 148	148 437
FIXED ASSETS	1 896 196	1 898 958	1 951 784
Stock	550 860	491 970	474 930
Trade receivables	580 082	552 491	483 993
Other receivables	82 817	92 122	91 103
Cash and cash equivalents	87 925	262 097	224 884
CURRENT ASSETS	1 301 684	1 398 680	1 274 910
TOTAL ASSETS	3 197 880	3 297 639	3 226 694
Paid in capital	880 174	880 374	880 174
Retained equity	96 152	192 563	161 364
Equity attributable to equity holders of AKVA group ASA	976 327	1 072 937	1 041 538
Non-controlling interests	119	3 867	158
TOTAL EQUITY	976 447	1 076 803	1 041 696
Deferred tax	44 387	86 315	58 272
Other long term debt	38 771	31 225	32 361
Lease Liability - Long-term	395 484	352 765	444 920
Long-term interest bearing debt	754 187	845 867	766 239
LONG-TERM DEBT	1 232 827	1 316 173	1 301 792
Short-term interest bearing debt	77 889	32 166	844
Lease Liability - Short-term	64 083	51 923	93 821
Other current liabilities	846 633	820 574	788 542
SHORT-TERM DEBT	988 605	904 663	883 207
TOTAL EQUITY AND DEBT	3 197 880	3 297 639	3 226 694

Cash flow statement

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW	2021	2020	2021	2020	2020
(NOK 1 000)	Q3	Q3	YTD	YTD	Total
Cash flow from operating activities
Profit before taxes	19 263	50 584	2 577	111 811	121 475
Taxes paid	-13 278	-8 619	-25 936	-13 578	-27 509
Net interest cost	10 862	8 966	31 415	31 567	41 622
Gain/loss on disposal of fixed assets	-295	5 704	-1 005	5 693	5 705
Depreciation and amortization	46 950	47 538	140 827	146 478	190 928
Changes in stock, accounts receivable and trade payables	-113 126	-61 067	-168 052	-192 299	13 480
Changes in other receivables and payables	120 218	19 553	69 518	169 282	8 264
Net foreign exchange difference	-15 132	-4 776	-30 004	-3 980	-7 373
Cash generated from operating activities	55 463	57 884	19 341	254 973	346 591
Interest paid	-11 090	-9 745	-32 694	-35 261	-46 089
Interest received	228	779	1 279	3 694	4 467
Net cash flow from operating activities	44 601	48 918	-12 074	223 406	304 969
Cash flow from investment activities
Investments in fixed assets	-23 347	-20 753	-69 687	-86 293	-103 199
Proceeds from sale of fixed assets	287	37 197	1 979	37 644	43 925
Net payment of long-term receivables	0	-8 251	0	-30 363	0
Payment of shares and participations	0	0	-30 803	0	-38 585
Acquisition of shares and subsidiaries net of cash acquired	0	0	0	-90 525	-90 542
Net cash flow from investment activities	-23 060	8 193	-98 511	-169 536	-188 401
Cash flow from financing activities
Repayment of borrow ings	-72 871	-12 973	-67 948	-125 946	-203 076
Proceed from borrow ings	0	835	77 879	200 835	200 000
Dividend payment	0	0	-32 956	-33 157	-33 157
Dividents payment to NCI	0	0	0	-1 798	-1 798
Sale/(purchase) ow n shares	0	0	0	0	-14 662
Net cash flow from financing activities	-72 871	-12 138	-23 025	39 934	-52 692
Net change in cash and cash equivalents	-51 330	44 973	-133 610	93 804	63 876
Net foreign exchange differences	-3 319	1 333	-2 004	7 295	10
Cash and cash equivalents at beginning of period	143 920	215 792	224 884	160 999	160 999
Cash and cash equivalents divested entities	-1 347	0	-1 347	0	0
Cash and cash equivalents at end of period	87 925	262 097	87 925	262 097	224 884

Largest shareholders

20 largest shareholders

No of shares	% Account name	Type	Citizenshi
20 703 105	62,1 % EGERSUND GROUP AS		NOR
1623 672	4,9 % PARETO AKSJE NORGE VERDIPAPIRFOND		NOR
1 066 438	3,2 % VERDIPAPIRFONDET NORDEA KAPITAL		NOR
975 932	2,9 % VERDIPAPIRFONDET ALFRED BERG GAMBA		NOR
949 436	2,8 % SIX SIS AG	Nominee	CHE
898 952	2,7 % VERDIPAPIRFONDET NORDEA AVKASTNING		NOR
675 084	2,0 % VERDIPAPIRFONDET NORDEA NORGE PLUS		NOR
500 692	1.5 % FORSVARETS PERSONELLSERVICE		NOR
430 000	1,3 % VERDIPAPIRFONDET ALFRED BERG NORGE		NOR
382 950	1,1 % J.P. Morgan Bank Luxembourg S.A.	Nominee	LUX
361 300	1,1 % MP PENSJON PK		NOR
342 895	1,0 % AKVA GROUP ASA		NOR
300 000	0,9 % J.P. Morgan Bank Luxembourg S.A.	Nominee	FIN
263 562	0.8 % EQUINOR PENSJON		NOR
155 000	0,5 % PACTUM AS		NOR
150 000	0.4 % BJØRN DAHLE		NOR
131 400	0,4 % JAKOB HATTELAND HOLDING AS		NOR
124 412	0,4 % VERDIPAPIRFONDET ALFRED BERG AKTIV		NOR
100 000	0,3 % ASKVIG AS		NOR
97 200	0,3 % BKK PENSJONSKASSE		NOR
30 232 030	90,7 % 20 largest shareholders
3 102 273	9,3 % Other shareholders
33 334 303	100,0 % Total shares

Origin of shareholders, 5 largest countries

No of shares	% Origin	No of shareholders
31 050 802	93.1 % Norway	1427
1 015 165	3.0 % Switzerland
413 839	1.2 % Luxembourg	2
350 020	1.1 % Finland	3
126 976	0.4 % Denmark	24
75 187	0.2 % Austria
58 790	0.2 % Liechtenstein

Share development

Subscribe to Oslo Stock Exchange Releases from AKVA by email on: http://ir.akvagroup.com/investor-relations/subscribe 49

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

50