AKVA Group — Investor Presentation 2024

Feb 16, 2024

Q4 2023 Presentation

Oslo, 16 February 2024

Pioneering a better future

Knut Nesse, CEO Ronny Meinkøhn, CFO

Agenda|Q4 2023

Introduction and Highlights

Financial Performance

Knut Nesse, CEO Ronny Meinkøhn, CFO

Q&A Session

Highlights|Q4 2023

• Revenue of MNOK 800 and EBIT of MNOK 0 adjusted for MNOK 10 in costs related to rightsizing process
• Rightsizing process with estimated MNOK 45 in annual costs savings completed in Q4
• Acceptable order intake in Sea Based but still slow market in Land Based
• AKVA has revised the medium-term financial targets and is aiming for revenue of minimum BNOK 3.6 and EBIT of 4%-5% in 2024
• Strong focus to further develop and improve deep farming concepts after the successful commercial breakthrough during 2023

Key figures|Q4 2023

Revenue 800 MNOK 655 757 833 ^{779 800} Q4 19 Q4 20 Q4 21 Q4 22 Q4 23 -40

Key figures|Full year 2023

Revenue

3 431 MNOK

263 MNOK 272 337 302 158 263

EBITDA

* Note: EBITDA of MNOK 158 in 22 is impacted by MNOK 58 in costs related to restructuring and cost saving programs

2019 2020 2021 2022 2023

EBIT

* Note: Negative EBIT of MNOK 56 in 22 is impacted by MNOK 98 in costs related to restructuring and cost saving programs

Development order intake and order backlog

Note: Order backlog includes currency effects on existing contracts

Strategic and Operational Status

Underlying demand growth implies 0.7-1.3 million ton volume increase by 2030

1) +1.5 percentage point increased price-neutral volume growth compared to base case Source: Kontali, Cardo Partners analysis Extrapolation of underlying demand growth for salmon 2012-2030 Consumption of Atlantic salmon WFE in mill. tons Base case price-neutral volume growth (~3%) High demand growth (~4.5%)¹ Historic development Supply drivers Demand drivers Main supply and demand drivers 2022-2030: +0.7-1.3 mill. tons Supply potential Global health and wellness megatrend drives adoption of salmon as a sustainable and healthy source of protein Technological advances for improved utilization of existing licenses Inflationary pressures may shift consumption towards cheaper protein sources Slow scale-up of new farming technologies (landbased and offshore) Uncertainty regarding future regulations in several farming regions impacting future supply growth Growth in demand driven by emerging salmon markets and product development in existing markets Norwegian resource tax reducing investments in new technology for future license utilization 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 1.5 4.5 1.0 2.5 2.0 3.0 3.5 4.0 5.0 2.9 4.2 3.6

Precision Farming - Sea Based Solutions

• From advanced, tailored marine infrastructure to single components and products

Marine Infrastructure

- quality equipment for better operations

• Plastic and Steel pens
• Nets
• Anchoring & Mooring
• Net Cleaning
• ROV systems
• Boats
• Marine engineering
• Lab services

Precision Feeding

- for optimizing fish

and growth

▪ Feed systems

▪ Camera & sensors

• AKVA observe - AKVA fishtalk

▪ Digital support: ▪ - AKVA connect

▪ Barges

▪ Lights

performance, feed conversion

Deep farming & Lice control

- reducing lice problems

▪ Nautilus

• Tubenet
• OptiCage
• Plastic pens
• Feed system
• Sub surface feeding
• Camera systems
• Lights
• Digital support

Deep farming concept - Nautilus

• Can solve one of the biggest sustainability challenges in aquaculture: salmon lice

Current digital solutions

• 104 sites worldwide on recurring revenue model
• 25 new sites in 2022
• 64 new sites in 2023

▪ Global market share of 60% ▪ 353 sites worldwide on

• recurring revenue model
• 125 new sites in 2022
• 178 new sites in 2023

▪ 17 sites worldwide on recurring revenue model

Innovation agenda for Land Based Salmon Farming

Market leading RAS technology enabling sustainable and cost-effective production

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

1

Data driven insight and intelligent farming systems enabling consistent and optimized production - "Precision Farming" 3 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

Post-smolt RAS concept is validated

There are significant benefits from a post smolt strategy:

• Reduced time in the sea means less lice treatment and improved fish health
• Better utilization of licenses provides improved volume with 30% or higher dependent on the size of the post smolt

Outlook – post smolt market in Norway:

• Our customers want to know all the implications from the new resource tax and this takes some time
• AKVA does not expect to sign any major new RAS contracts in Norway before second half 2024
• Pipeline of prospects is solid

NOAP phase I will be finished in Q1-2024

• Construction of NOAP phase I will be completed in Q1 2024. Annual capacity of 4,000t
• NOAP phase II is initiated with additional annual capacity of 4,000t
• Phase II to be executed towards end of 2024 and during 2025
• AKVA has signed RAS contract for phase III (not included in order backlog) with additional annual capacity of 12,000t. Start-up of project to be authorized by NOAP in the future

Expected activity level for Land Based

• Total order backlog of BNOK 1,5
• During 2023 AKVA has signed the following contracts:
• NOAP phase II MEUR 40 (full grow out): Project is started and will be executed next 2-3 years
• Cermaq Finnmark MEUR 60 (post smolt): Project is started and will be executed next 2-3 years
• Two RAS contracts outside Norway at approx. MEUR 16 to be executed next 1-2 years
• With main basis in these contracts the expected activity level for 2024 will be minimum MNOK 600
• Soft activity level in first half of 2024 due to closing of "old" projects during Q1 and slow start up of new projects
• Project margins expected to improve
• OPEX will be reduced due rightsizing process completed in Q4 2023

Revised medium term financial targets

Revenue growth

• ➢ 2024: Min. 5% growth (BNOK 3,6) but no growth in Land Based
• ➢ Long term: Organic topline growth of min. 10% Y-oY
• Sea Based: 5%
• Land Based: Min. 30% as of 2025 and onwards
• Digital 30%

Profitability

• ➢ 2024: 4-5% EBIT
• ➢ 2025: min. 6% EBIT
• ➢ Improve ROACE to 10-15% by 2025

EBIT enablers

• ➢ Operational excellence
• ➢ Cost reduction program implemented 2023
• ➢ Scaling of Digital and Land Based business
• ➢ New contract management Land Based

Revenue and EBIT development

Agenda|Q4 2023

Introduction and Highlights

Financial Performance

Knut Nesse, CEO Ronny Meinkøhn, CFO

Q&A Session

Q4 2023 – Income statement

• Revenues increased by MNOK 21 compared to Q4 22
• EBIT increased by MNOK 4 from MNOK -14 in Q4 22 to MNOK -10 in Q4 23
• Adjusted for costs of MNOK 10 related to rightsizing process EBIT was MNOK 0 in Q4 23
• Net finance costs in Q4 23 is negative impacted by increased interest rates and currency effects

million NOK	2023	2022	2023	2022
	Q4	Q4	YTD	YTD
Revenue	800	779	3 431	3 376
of materials Cost	435	474	1 996	2 107
Payroll expenses	270	224	954	881
Other operating expenses	54	54	217	230
EBITDA	41	27	263	158
EBITDA margin	5,1 %	3,5 %	7,7 %	4,7 %
Depreciation, amortization and impairment	51	42	196	215
EBIT	-10	-14	68	-56
EBIT margin	-1,2 %	-1,9 %	2,0 %	-1,7 %
Financial Net Items	-43	-22	-97	-95
(loss) before Income tax	-53	-37	-29	-152
tax1 Income	-13	1	-6	-21
(loss) income Net	-41	-37	-23	-131
per share (NOK) Earnings	-1,10	-1,03	-0,61	-3,61

¹Income tax Q4 and YTD 23 based on best estimate

Revenue development

• Last twelve months order intake and revenue was MNOK 4,328 and MNOK 3,431, respectively
• Revenue increased by 3% compared to Q4 22
• Increased revenue in both Sea Based and Digital but reduction of 13% in Land Based compared to Q4 22

Revenue by Market and Segment

• Strong increase of 18% in the Nordic market compared to Q4 22

• Reduced revenue in other markets

• Sea Based represents 77% of total revenue in Q4 23

• Increase in revenue compared to Q4 22 is related to increased activity in Sea Based (+4%) and Digital (+66%)

* Note: Market definition is location of customer

EBITDA and EBIT development

• EBITDA margin increased from 3,5% in Q4 22 to 5,1% in Q4 23
• Adjusted for costs of MNOK 10 related to rightsizing process EBITDA margin was 6,3% in Q4 23
• EBITDA margin of 8,8% in Sea Based
• Still challenging profitability in Land Based due to high cost base, low activity level and low profit margins on part of project portfolio
• Rightsizing process completed in Q4 with estimated annual cost savings of MNOK 45

Cash flow and financial position

▪ Numbers includes MNOK 300 credit facility in DNB

Available cash (MNOK) Net Working capital Net debt / EBITDA*

NIBD/EBITDA covenant threshold of 4,50

* NIBD/EBITDA ratio for the periods Q4 22 to Q1 23, Q2 23 and Q4 24 is adjusted for nonrecurring costs of MNOK 138, MNOK 73 and MNOK 40, respectively, in agreement with DNB

Development Net interest-bearing debt

NIBD Q4 2023 (MNOK) NIBD YTD 2023 (MNOK)

Capital expenditure

• Total CAPEX of MNOK 35 in Q4 23, where MNOK 16 applies to our three innovation agendas
• Total CAPEX in 2023 of MNOK 175

CAPEX (MNOK)

Dividend

▪ The company has decided not to pay any dividend for the first half of 2024

Cash dividend (NOK per share)

Business segments

Sea Based Technology

Overall

• Revenue increased by MNOK 26 while EBITDA margin increased from 8,4% in Q4 22 to 8,8% in Q4 23
• Order intake decreased from MNOK 823 in Q4 22 to MNOK 679 in Q4 23

Nordic

• Revenue increased by 18% in Q4 23 compared to Q4 22
• 21% decrease in order intake Q4 23 compared to last year

Americas

• Revenue decreased by 16% in Q4 23 compared to Q4 22 while order intake was 12% higher in the same period

Europe & Middle East

• Revenue at the same level as in Q4 22 but order intake was reduced by 37% in Q4 23 compared to Q4 22

Revenue (MNOK) and EBITDA-margin (%)

Sea Based order intake and backlog development

Order backlog & Order intake(MNOK)

Development OPEX based revenue

• Positive trend continues and OPEX based revenue was MNOK 31 higher in Q4 23 compared to Q4 22
• Full year OPEX based revenue amounts to MNOK 1,017 and is 18% higher compared to 2022

Land Based Technology

• Revenue decreased by 13% in Q4 23 compared to Q4 22
• Profit margins are still negative impacted by high cost base, low activity level and low project margins on parts of the project portfolio
• Rightsizing of organization completed in Q4 23 with annual estimated cost savings of MNOK 20 ¹⁶¹

Land Based order intake and backlog development

Revenue (MNOK) and EBITDA-margin (%)

• Order intake of MNOK 40 is MNOK 7 higher than the same quarter last year
• Strong increase of 66% in recurring revenue compared to Q4 22
• Temporary setback on profitability as EBITDA margin decreased from 20% in Q4 22 to 4% in Q4 23

Digital order intake and backlog development

Order backlog & Order intake(MNOK)

Outlook

• Salmon prices expected to remain strong driven by reduced supply
• AKVA expects to see normalization of the post smolt market in Norway during the second half of 2024
• Rightsizing of organization completed in Q4 23 with estimated annual cost savings of MNOK 45
• AKVA has revised the medium-term financial targets and is aiming for revenue of minimum BNOK 3.6 and EBIT of 4-5% in 2024
• AKVA will continue to invest and improve our solutions, both within Sea Based, Digital and Land Based Technology

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.

Agenda|Q4 2023

Introduction and Highlights

Financial Performance

Knut Nesse, CEO Ronny Meinkøhn, CFO

AKVA group in a brief

AKVA group is the leading technology and service partner to the aquaculture industry worldwide.

Our presence

Present in all markets with offices in:

• Norway
• Denmark
• Scotland
• Lithuania
• Spain
• Greece
• Turkey
• Chile
• Canada
• China
• Australia

Balance sheet

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Note	2023	2022
(NOK 1 000)	31.12.	31.12.
Intangible fixed assets 1,3	1 157 266	989 063
Deferred tax assets	77 283	44 902
Tangible fixed assets	671 833	635 245
Long-term financial assets	312 778	314 337
FIXED ASSETS	2 219 160	1 983 547
Stock	628 614	600 394
Trade receivables	468 193	592 838
Other receivables	113 002	125 679
Cash and cash equivalents	219 390	277 988
CURRENT ASSETS	1 429 199	1 596 899
TOTAL ASSETS	3 648 359	3 580 446
Equity attributable to equity holders of AKVA group ASA	1 137 932	1 144 000
Non-controlling interests 1,3	10 225	336
TOTAL EQUITY	1 148 157	1 144 337
Deferred tax	46 814	18 242
Other long term debt	59 777	36 637
Lease Liability - Long-term	405 231	403 340
Long-term interest bearing debt 1	862 317	702 481
LONG-TERM DEBT	1 374 139	1 160 700
Short-term interest bearing debt 4	37 500	80 625
Lease Liability - Short-term	90 795	79 095
Trade payables	328 421	310 629
Public duties payable	133 036	81 277
Contract liabilities	293 599	468 729
Other current liabilities	242 712	255 057
SHORT-TERM DEBT	1 126 063	1 275 410
TOTAL EQUITY AND DEBT	3 648 359	3 580 446

Cash flow statement

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW	2023	2022	2023	2022
(NOK 1 000)	Q4	Q4	YTD	YTD
Cash flow from operating activities
Profit before taxes	-53 166	-36 654	-29 311	-151 864
Taxes paid	-425	-5 133	-12 184	-11 370
Share of profit(-)/loss(+) from associates	-2 106	-1 102	-10 256	-7 087
Net interest cost	24 382	17 372	85 899	50 606
Gain(-)/loss(+) on disposal of fixed assets	-583	-318	-1 339	-766
Gain(-)/loss(+) on financial fixed assets	-5 641	4 551	-10 953	-5 504
Depreciation, amortization and impairment	50 536	41 548	195 805	214 762
Changes in stock, accounts receivable and trade payables	202 948	-108 630	114 218	-51 344
Changes in other receivables and payables	-122 107	80 908	-123 038	205 137
Net foreign exchange difference	-2 671	-10 016	-16 442	-21 216
Cash generated from operating activities	91 167	-17 475	192 399	221 353
Cash flow from investment activities
Investments in fixed assets	-35 418	-43 910	-175 160	-167 859
Proceeds from sale of fixed assets	660	369	2 218	6 969
Acquisition of subsidiary net of cash acquired	-35 320	0	-35 648	0
Proceeds from sale of associates	0	0	0	40 000
Net cash flow from investment activities	-70 078	-43 541	-208 590	-120 890
Cash flow from financing activities
Repayment of borrow ings	-11 288	-14 700	-160 393	-81 622
Proceed from borrow ings	0	43 125	195 833	43 125
IFRS 16 interest	-5 902	-5 511	-22 741	-19 576
Net other interest	-18 480	-12 008	-63 158	-31 177
Dividend payment	0	0	0	-36 668
Dividents payment from NCI	8 052	0	8 052	0
Net cash flow from financing activities	-27 618	10 906	-42 407	-125 918
Cash and cash equivalents at beginning of period	225 918	328 098	277 988	303 442
Net change in cash and cash equivalents	-6 528	-50 110	-58 598	-25 454
Cash and cash equivalents at end of period	219 390	277 988	219 390	277 988

Largest shareholders

20 largest shareholders

No of shares	%	Account name	Type	Citizenship
18 703 105	51,0 %	EGERSUND GROUP AS		NOR
6 600 192	18,0 %	Israel Corporation Ltd		ISR
1 901 267	5,2 %	PARETO AKSJE NORGE VERDIPAPIRFOND		NOR
1 095 436	3,0 %	VERDIPAPIRFONDET NORDEA AVKASTNING		NOR
964 745	2,6 %	SIX SIS AG	Nominee	CHE
791 167	2,2 %	VERDIPAPIRFONDET ALFRED BERG GAMBA		NOR
621 997	1,7 %	VERDIPAPIRFONDET NORDEA KAPITAL		NOR
602 614	1,6 %	VERDIPAPIRFONDET NORDEA NORGE PLUS		NOR
543 332	1,5 %	FORSVARETS PERSONELLSERVICE		NOR
316 155	0,9 %	SE J.P. Morgan	Nominee	LUX
302 998	0,8 %	MP PENSJON PK		NOR
256 590	0,7 %	SE J.P. Morgan	Nominee	FIN
237 430	0,6 %	VERDIPAPIRFONDET EQUINOR AKSJER NO		NOR
230 663	0,6 %	AKVA GROUP ASA		NOR
221 502	0,6 %	VERDIPAPIRFONDET BERG NORGE ALFRED		NOR
130 000	0,4 %	NESSE & CO AS		NOR
129 988	0,4 %	PACTUM AS		NOR
128 000	0,3 %	VERDIPAPIRFONDET ALFRED BERG NORGE		NOR
125 795	0,3 %	DAHLE		NOR
100 800	0,3 %	JAKOB HOLDING AS HATTELAND		NOR
34 003 776	92,7 %	20 largest shareholders
2 663 957	7,3 %	Other shareholders
36 667 733	100,0 %	Total shares

Origin of shareholders, 5 largest countries

No of shares		% Origin	No of shareholders
28 143 106	Norway	76,75 %	1265
3 300 192	Israel	9,00 %	1
4 284 800	Switzerland	11,69 %	7
357 873	Luxembourg	0,98 %	3
302 576	Finland	0,83 %	3
81 365	Denmark	0,22 %	20
37 904	Ireland	0,10 %	14

Share development

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Total number of shareholders: 1408 - from 28 different countries

Our Values

• We CARE for our industry and the communities we are localized

Customer focus Aquaculture knowledge Reliability Enthusiasm