AKVA Group — Investor Presentation 2021

Aug 13, 2021

Q2 2021 Presentation

Klepp, 13 August 2021

Knut Nesse, CEO Ronny Meinkøhn, CFO

Agenda|Q2 2021

Highlights and Outlook

Financial Performance Knut Nesse, CEO Ronny Meinkøhn, CFO

Q&A Session

Highlights|Q2 2021

• Acceptable activity level and order intake in the quarter
• Operations was still negative impacted by COVID-19 restrictions related to import of foreign personnel to Norway
• Final commercial clean-up and provisions for old land-based projects of MNOK 25 reduce overall profitability

• Deep sea open farming concepts under development
• Strengthening of the Digital organization completed

Key figures|Q2 2021

Note: IFRS 16 was implemented January 2019. Comparable figures for the period 2016-2018 have not been prepared

Comments to financial performance Q2 Land Based

• In Q2 21 MNOK 25 was charged to the P&L as costs related to old projects
• Extensive customer meetings were conducted during Q2
• Several cases were identified where AKVA did not close old projects properly in accordance with customer expectations
• Commercial decision made in Q2 to "clean-up" and meet the expectations
• Status today is that we have a restored commercial relationship with our customers

Key figures|H1 2021 Revenue EBITDA excluding cyber-attack costs* EBIT excluding cyber-attack costs*

Notes:

Market development

Development order intake and order backlog

Order intake (MNOK) Order backlog (MNOK)

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COVID-19|Still negative impact on operations • Cage Based – Service stations in Norway – Difficult to replace foreign labor with local labor which influences both topline • Land Based – Projects in Norway – Cross-border travel is important to ensure progress in the projects – Travel restrictions make operations more costly

• Negative implications are mainly related to travel restrictions and use of foreign workforce in ongoing operations
• • and cost level
• -
  -
• Overall negative EBIT effect of approx. MNOK 5 in Q2 21 related to COVID-19 restrictions
• Expect limited impact from the restrictions in Q3 and onwards ¹⁰

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

Technology for sustainable biology

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

Technology for sustainable biology

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Strategy for Land Based Salmon Farming and optimized production - "Precision

Market leading Zero Water Concept RAS enabling sustainable and costeffective production 1

Delivering complete scope of fish farming technology (e.g. feeding, fish tanks, fish handling, camera, lights, sensors, control system) Production Advisory Services – RAS 2

Data driven insight and intelligent farming systems enabling consistent Farming" 3

production competence group helping customers maximizing output and reducing cost 4 AKVA group Innovation agenda – Centre of Excellence Standard 5,000 tonnes modules

Build up LB organization in Norway

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Three main segments within land based

Expected investments in Norwegian land based farming facilities towards 2030 is NOK 12-33Bn, dependent on desired smolt size

Market is driven by biomass volume and building costs

• Total smolt production is expected to grow with 55-160,000 tonnes in the next 10 years
• Smolt number is expected to continue to grow at 4% per year
• Smolt sizes in 2030 considered are:
  • Low case = 200 gram
  • Base case = 300 gram
  • High case = 400 gram
• Capex per 1000 tonnes
  • New facility: NOK ~220Mn
  • Expansion: NOK ~140Mn

Source: McKinsey analysis

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Grow-out pipeline

Ramp up of Land Based activity to a run-rate of 1 billion NOK

Cage based A broad range of solutions offered Plastic pens Steel pens Feed Barges Feeding Systems Lights

Nets

ROV/Net cleaning Cameras

Battery packs Digital Sensors

Technology for sustainable biology

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Precision Farming Cage 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") - Sub surface feeding

• Tubenet
• Plastic Cages
• Feed system
• Camera systems
• Lights
• Digital

Farming in the deep:

Innovative solutions to improve fish health farming economy

Benefits from Deep sea farming: AKVA commercial solutions in operation

• 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.

the other Deep sea farming concepts: Subfeeder and light; ™

AKVA group also offers several solution to reinforce TubenetTM and Waterborne feeding solutions, Camera, sensors and AI solutions for optimal feeding control; solutions to mix water & oxygen.

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Future of digitization in aquaculture

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Current digital solutions

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Increased focus on operational excellence

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Strategic guidance

Organic topline

Operational

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

Min. 50% increase in Innovation spending to support new Product development and Organic growth

3 Digital platforms: AKVAconnect, AKVA Observe and Fishtalk

Agenda|Q2 2021

Introduction and Highlights Knut Nesse, CEO Ronny Meinkøhn, CFO

Financial Performance

Q&A Session

Q2 2021 – Income statement

• Revenue reduced by MNOK 30 compared to Q2 2020
• EBITDA in Q2 21 is negative impacted by the final commercial clean-up and provisions for land-based projects, and to some extent COVID-19 restrictions Partners – MNOK 3
• High financial costs in period partly due to lower share price on the investment in Nordic Aqua

	2021	2020	2021	2020	2020
NOK million	Q2	Q2	YTD	YTD	Total
Revenue	832	862	1 551	1 614	3 177
EBITDA	79	93	113	179	338
EBITDA margin	9,5 %	10,8 %	7,3 %	11,1 %	10,6 %
EBITDA ex. cyber-attack costs1	79	93	162	179	338
EBITDA margin ex. cyber-attack costs1	9,5 %	10,8 %	10,5 %	11,1 %	10,6 %
Depreciation, amortization and impairment	47	51	94	99	191
EBIT	32	42	19	80	147
EBIT margin	3,9 %	4,9 %	1,2 %	5,0 %	4,6 %
EBIT ex. cyber-attack costs1	32	42	68	80	147
EBIT margin ex. cyber-attack costs1	3,9 %	4,9 %	4,4 %	5,0 %	4,6 %
Net Financial Items	-18	-13	-35	-19	-26
Income (loss) before tax	14	30	-17	61	121
Income (loss) before tax ex. cyber-attack costs1	14	30	33	61	121
Income tax	-2	3	-8	13	31
Net income (loss) Net income (loss) ex. cyber-attack costs1	16	26	-9	48	91
	16	26	30	48	91
Earnings per share (NOK)	0,48	0,79	-0,26	1,43	2,74
Earnings per share (NOK) ex. special items 1	0,48	0,79	0,92	1,43	2,74
1 Cyber-attack costs of 49,7 MNOK in Q1

Revenue development

• Last twelve months order intake and revenue of MNOK 3 189 and MNOK 3 114, respectively
• Revenue reduced by 3% compared to Q2 20
• Increased activity in Land Based and Digital business but reduced revenue in Cage Based segment compared to Q2 20

Revenue by Market and Segment

• Relatively stable activity level in Nordic and increased revenue in Europe & Middle East
• Still low activity in Americas

• Cage Based revenue represents 86% of total revenue in Q2 2021 compared to 90% in Q2 20

EBITDA and EBIT development

• EBITDA of MNOK 79 / 9,5% in Q2 21 and significantly impacted by

  - Final commercial clean-up land-based projects and increase guarantee

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

Technology for sustainable biology

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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

Cash flow and financial position

*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 Q2 21 for non-recurring cyber-attack costs of MNOK 49,7

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Development return on capital employed

• ROACE reduced from 7,4% in Q1 21 to 6,6% in Q2 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

- 2021

Cage Based Technology

• Revenue reduced by 8% in Q2 compared to Q2 20 while order intake was at the same level as last year

Nordic

• Revenue reduced by 9% in Q2 compared to Q2 20
• Total order intake of MNOK 444 and 8% reduction compared to Q2 20

Americas

• 26% reduction in revenue in Q2 compared to Q2 20
• Decrease in order intake of 7% in Q2 compared to Q2 20

Europe & Middle East

• 44% increase in revenue and a significant increase in order intake of 62% compared to Q2 20

Development OPEX based revenue

• Reduced share of recurring revenue in 2021 is mainly related to lower activity at service stations due to COVID-19 restrictions
• Strong closing of Q2 as the travel restrictions were lifted early June

Technology for sustainable biology

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Land Based Technology

• Order intake of MNOK 116 in the quarter compared to MNOK 235 in Q2 2020
• Revenue increased by 31% in Q2 21 compared to Q2 20
• EBITDA negative of MNOK 25 in Q2 21 due to
  -
  -

Digital Solutions

• Revenue increased by 12% in Q2 21 compared to last year
• Acceptable EBITDA margin of 22,3%

Outlook

• Order backlog is sound and forms a good foundation to execute our organic growth strategy
• The company expects limited impact from the COVID-19 restrictions in Q3 and onwards
• Long term fundamentals remains unchanged as presented in our Capital Markets Day in November 2020
• Digital products is an important part of AKVA groups total product offering and the company will continue to invest and improve our solutions, both within Cage Based and Land Based Technology

Agenda|Q1 2021

Introduction and Highlights Knut Nesse, CEO Ronny Meinkøhn, CFO

Financial Performance

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.

Leading technology and service partner Listed on Oslo stock exchange since 2006 Deliveries in 65 countries over 40 years Companies in 10 countries. 1 489 employees

AKVA group in brief

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Solutions

Cage Based Technology Land Based Technology Digital Solutions

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Revenue by species

Balance sheet

Cash flow statement

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (NOK 1 000)	2021 Q2	2020 Q2	2021 YTD	2020 YTD	2020 Total
Cash flow from operations ex. w orking capital items Cash flow from change in w orking capital	58 718 -117 488	78 724 166 400	48 953 -105 626	155 208 19 281	283 227 21 744
Net cash flow from operational activities	-58 770	245 124	-56 673	174 489	304 970
Net cash flow from investment activities	-35 552	-122 256	-75 451	-177 729	-188 401
Net cash flow from financial activities	68 351	-56 198	49 846	52 072	-52 692
Net change in cash and cash equivalents	-25 971	66 670	-82 278	48 831	63 877
Net foreign exchange differences Cash and cash equivalents at the beginning of the period	1 315 168 575	-6 395 155 516	1 315 224 884	5 962 160 999	10 160 999

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Largest shareholders

20 largest shareholders

	20 largest shareholders
No of shares 20 703 105 1 623 672 1 056 437 975 932 949 436 889 671 672 840 495 100 430 000 382 950 361 300 342 895 300 000 263 562 155 000 150 000 131 400 124 412 100 000 97 200 30 204 912 3 129 391 33 334 303	% Account name 62,1 % EGERSUND GROUP AS 4,9 % PARETO AKSJE NORGE VERDIPAPIRFOND 3,2 % VERDIPAPIRFONDET NORDEA KAPITAL 2,9 % VERDIPAPIRFONDET ALFRED BERG GAMBA 2,8 % SIX SIS AG 2,7 % VERDIPAPIRFONDET NORDEA AVKASTNING 2,0 % VERDIPAPIRFONDET NORDEA NORGE PLUS 1,5 % FORSVARETS PERSONELLSERVICE 1,3 % VERDIPAPIRFONDET ALFRED BERG NORGE 1,1 % J.P. Morgan Bank Luxembourg S.A. 1,1 % MP PENSJON PK 1,0 % AKVA GROUP ASA 0,9 % J.P. Morgan Bank Luxembourg S.A. 0,8 % EQUINOR PENSJON 0,5 % PACTUM AS 0,4 % BJØRN DAHLE 0,4 % JAKOB HATTELAND HOLDING AS 0,4 % VERDIPAPIRFONDET ALFRED BERG AKTIV 0,3 % ASKVIG AS 0,3 % BKK PENSJONSKASSE 90,6 % 20 largest shareholders 9,4 % Other shareholders 100,0 % Total shares	Type Nominee Nominee Nominee	Citizenship NOR NOR NOR NOR CHE NOR NOR NOR NOR LUX NOR NOR FIN NOR NOR NOR NOR NOR NOR NOR
No of shares	Origin of shareholders, 5 largest countries % Origin		No of shareholders
30 991 553 1 020 172 414 213 350 020 138 636 22 942 17 245	93,0 % Norway 3,1 % Switzerland 1,2 % Luxembourg 1,1 % Finland 0,4 % Denmark 0,1 % United Kingdom 0,1 % France		1404 7 2 3 22 17 6

Origin of shareholders, 5 largest countries

30 991 553	93,0 % Norway	1404
1 020 172	3,1 % Switzerland	7
414 213	1,2 % Luxembourg	2
350 020	1,1 % Finland	3
138 636	0,4 % Denmark	22
22 942	0,1 % United Kingdom	17
17 245	0,1 % France	6

Share development

Subscribe to Oslo Stock Exchange Releases from AKVA by email on: http://ir.akvagroup.com/investor-relations/subscribe Total number of shareholders: 1569 - from 33 different countries 50

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