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The global leader in aquaculture technology
4Q 2009 presentation18 February 2010
Knut Molaug, CEO
Morten Nærland, CFO
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Agenda
4Q 2009 Financial review
Background & highlights
Q & A
Outlook
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AKVA group in brief
Cage systems
Feed systems
AKVA group facts
Feed bargesOperational systems
& sensors
Software systems and services
Recirc. systems
• The leading aquaculture technology supplier
• Strong market position with all main products
• The only player with global presence• Strong and experienced management • Leading supplier to a global growth
industry
AKVA’s main product brands:
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One-stop-shop in aquaculture technology
Land based farms Cage based farms
Value chain planning and optimising software
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4Q highlights
● 2009 a challenging year for AKVA group
● Revenue was affected by restrictive investment policies in the salmon industry in general during 2009
●Operating revenue in 4Q was 143 MNOK which is 25 % lower than the same period last year
● The period’s EBITDA showed a loss of 16.1 MNOK
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4Q highlights
● EBITDA in 4Q hit by several items related to projects and accounting adjustments.
●Operating revenue for 2009 was 599 MNOK a reduction of 31% compared to 2008.
● The EBITDA for 2009 showed a loss of 11.5 MNOK.
● Sound order inflow in December and so far in 2010.
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4Q highlights
● Changes to the organisation made in January 2010
New temporary CFO appointed: Mr. Morten Nærland
New GM for AKVA group North America appointed: Mr. Wade Kaskiw
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Agenda
4Q 2009 Financial review
Background & highlights
Q & A
Outlook
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4Q Financials – P&LP&L 2009 4Q 4Q Year Year
(MNOK) 2009 2008 2009 2008
Operating revenues 142.9 191.8 599.3 866.5
Operating costs excl. depreciation 158.9 201.5 610.9 -813.8
EBITDA -16.1 -9.7 -11.5 52.7
Depreciation & Amortisation 7.2 9.3 30.9 -29.5
EBIT -23.2 -19.0 -42.4 23.3
Net financial items -2.1 -3.6 -9.6 -12.5
EBT -25.2 -22.7 -52.0 10.8
Taxes -3.8 -4.8 -12.9 -5.2
Net profit -21.6 -17.9 -39.1 5.5
Revenue growth -25.5% -30.8% -7.0%
EBITDA margin -11.2% -5.1% -1.9% 6.1%
EBIT margin -16.3% -9.9% -7.1% 2.7%
EPS (NOK) -1.25 -1.04 -2.27 0.32
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4Q Financials – P&L comments
● Operating revenue in 4Q09 was 143 MNOK. Quarterly revenue reduced by 25% compared to 2008
Continued low revenues due to restrictive investmentprograms by the customers
● The EBITDA result was -16.1 MNOK EBITDA in 4Q hit by several items related to projects
and accounting adjustments.
•The total effect is about 18 MNOK,•Whereof about 9 MNOK is related to accounting
adjustments
•Re-evaluation of ongoing projects and someone-off items amount to about 9 MNOK
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Business areas - OPTECH
OPTECH (MNOK)
● EBITDA in 4Q affected by the majority of items related to projectsand accounting adjustments.
98109 107 101
93
105 104 97
7382 80
93
0
25
50
75
100
125
1Q 2Q 3Q 4Q
9 9,410,7 10,3
5,8
16,4
8,5
-5,7-4,4-2,4
10,4
-9,7-10
-5
0
5
10
15
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Revenues
EBITDA
1Q 2Q 3Q 4Q2007
2008
2009
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Business areas - INTECH
INTECH (MNOK)
118135 130 135
115
154
103 9580 83
60 49
0
50
100
150
1Q 2Q 3Q 4Q
11,7 10,6 11,3
17,6
10,5 11,5 9,6
-4,01,1 3,0
-3,0-6,4-10
0
10
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Revenues
EBITDA
1Q 2Q 3Q 4Q 20072008
2009
● Earnings affected by low volumes in 4Q.● Some effects from special cost items.
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Market segments
Norway52 %
Chile9 %
N. America
10 %
UK8 %
Medit.2 %
Other14 %
Iceland5 %
Geographic segments (YTD)
•Norway dominating segment
•Other markets showing a positive development
0
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008 2009
AKVA group revenues within other species
CAGR 2003-2009 ~64%
MN
OK
.
• The ”full stop” in the cod industry explains reduction (cod volume reduced by 45 MNOK)
•Growth in a number of regions continued.
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Balance sheetBalance sheet (legal) Year Year
(MNOK) 2009 2008
Intangible fixed assets 243.9 251.7
Tangible fixed assetsLong term financial assets
39.11.1
41.52.5
Fixed assets 284.1 295.7
Stock 114.7 142.4
Receivables 161.3 171.1
Cash and bank deposits 56.5 47.9
Current assets 332.5 380.5
Total assets 616.5 676.2
Shareholders’ equity 256.6 309.6
Long term debt 156.2 129.1
Short term debt 203.7 237.5
Total liabilities 359.9 366.6
Total shareholders’ equity and liabilities 616.5 676.2
Equity ratio 41.6% 45.8%
Net interest bearing debt 141.9 149.6
Net working capital 120.0 171.7
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Balance sheet items
109
138162
199
172 168
141128 121
020406080
100120140160180200220
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
Working Capital (MNOK) ●Working Capital: Improvement seen in
4Q
Continued focus on working capital
● Net interest bearing debt (NIBD):
A waiver extending through 2Q 2010 relating to the financial covenants was agreed with the company’s main bank in 4Q
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52
121
146150
159
143130
142
-10
10
30
50
70
90
110
130
150
170
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
NIBD (MNOK)
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Financial position
● Equity: Sound equity position
● Cash Position: Available cash 76
MNOK
49 %50 %
47 %46 % 46 %
45 % 45 %46 %
42 %
30 %
35 %
40 %
45 %
50 %
55 %
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
Equity (%)
98103
6357
4840
51 5256
0
25
50
75
100
125
150
4Q071Q082Q083Q084Q081Q092Q093Q094Q09
Cash balance (MNOK)
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Cash flow statementCash flow statement 2009 2008 2009 2008
(KNOK) 4Q 4Q Total Total
Net cash flow from operational activities -2 830 8 530 32 656 - 15 504
Net cash flow from investment activities -6 407 -12 597 -24 095 -90 936
Net cash flow from financial activities 14 119 -4 982 7 56 279
Net cash flow 4 882 -9 050 8 567 -50 161
Cash and cash equivalents beginning of period 51 569 56 934 47 883 98 044
Cash and cash equivalents end of period 56 451 47 883 56 451 47 883
● A new 30 MNOK loan agreement with Innovation Norway wasestablished in the 4Q.
The agreement includes also an 18-month period withoutinstalments on all existing long-term loans
The reduction in instalments in the period will be about 30 MNOK.
● Net investments for 2009 amounted to 24.1 whereof 10.4MNOK is capitalized R&D expenses in accordance with IFRS.
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Order backlog and inflow
382 373
305253 263
200 183 204205
281
198 189155
202
90
147 161 144
0
100
200
300
400
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
● Order backlog is reduced by 49 MNOK compared to the sametime last year. Compared to 3Q this year the order backlogincreased was approximately the same.
● A shift in order inflow was seen in December and so far in2010.
Order backlog and inflow per quarter (MNOK)
Order backlog
Order inflow
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Agenda
3Q 2009 Financial review
Background & highlights
Q & A
Outlook
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Outlook● Investment climate The market fundamentals of the aquaculture industry
remain favourable.
AKVA’s main customers experienced healthy earnings in 2009.
Still the company experienced significant negative impact in the market in 2009 based on the global financial and economic crisis.
● Future expectations Although negative impact from the financial crisis and a
weak global economy during 2008 and 2009, the underlying prospects for the aquaculture industry remain favourable.
The balance between supply and demand for Atlantic salmon, the product of AKVA group’s main customers, is expected to be favourable through 2010 and 2011. This indicating healthy prices.
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Outlook
● Market development A positive shift in order inflow was seen in December
and so far in 2010.
The market fundamentals are developing well
● High underlying demand in Norwegian salmon market
The Norwegian salmon industry is showing good profits at present and are positive for the outlook for the coming years.
The prospect mass towards the Norwegian industry is at the moment at the highest level recorded.
The prospect development is positive within all main product groups.
Most of the sales prospects are for planned deliveries in 2010.
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Outlook
● Other species / markets The growth towards other species than salmon
continue to expand according to strategic objectives.
The prospect mass for deliveries to other species than salmon continue increasing
The global financial has added uncertainty also to these markets, but there are signs that the uncertainty is now easing of.
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Future changes to reporting
● The announced restructuring plan is advancing according to plan, aiming at reduced operating expenses and improved cost flexibility.
● As a result of the restructuring implemented during 4Q 2009 the financial reporting will be adapted to the new organisation in future reporting.
● This implies that the division into the business areas INTECH and OPTECH will be ended. Further details of the new reporting format will be described in the 1Q 2010 report.
Awarenes to market cycles
Happy customers
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Agenda
3Q 2009 Financial review
Background & highlights
Q & A
Outlook
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AKVA group – global presence
All major industry players as customers
Norway
Iceland
Scotland Denmark
Turkey
Canada
Canada
Chile
Vietnam
AKVA office
AKVA representation Thailand
Malaysia
China
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AKVA group – brief historic summary
1980 1990 200019951985 2005
1974: World’s fist plastic cages (Polarcirkel) – today more than 40.000 units delivered1978: First Seafood industry software solution
1980: World’s first automatic feed systems 1984: Maritech: first seafood industry PC based ERP software system
1985: First Wavemaster steel cages1992: World’s first software system for fish farm planning
1995: First fish pellet sensing system1997: First Steel barges
2000: Polarcirkel – large cage designs introduced2001: Introduction of AkvaMaster feed barges
2002: Akvasmart – integrated control system (CCS)2004: Fishtalk–fist aquaculture integrated software system
2005: Wavemaster – introduction of 40 x40 steel cages2006: Akvasmart – integrated sensor system
2007: 10 new products launched at Aquanor show2008: UNI recirculation–“all in all out” concept
1980: First AKVA deliveries 1982: AKVA incorporated as company
1990s: International expansion through distributors and agents1995: First International investment (Canada)
1998: Open subsidiaries in Chile and Scotland2001: Aquasmart International AS (No)2001: Superior Systems AS (No)
2002: Vicass (Ca)2003: Feeding Systems AS (No,Ch)
2004: Cameratech AS (No)2006: Akva kompetanse AS (No)
2006: Wavemaster Group (UK, Ca, Ch) 2006: Helgeland Plast (No, Ch)
2006: IPO – company listed at Oslo Stock Exchange2007: Maritech International AS (No, Is, US, Ca, Ch)2007: UNI Aqua AS (Dk)
2008: Danaq Amba (Dk)2008: Open office in South East Asia (Thai)
2008: Idema Aqua AS (No, UK, Ch)
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