AKVA : 14 MB

Annual Report 2023

- Pioneering a better future

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AKVA group in brief

AKVA group is the leading technology and service partner to the aquaculture industry worldwide. The company has 1 425 employees, offices in 11 countries and a total turnover of NOK 3.4 billion in 2023.

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 sea based farming and land based aquaculture. AKVA group is recognized as a pioneer and technology leader through more than 40 years.

Highlights 2023

• EBIT of 68 MNOK in 2023 is up from MNOK -56 in 2022*
• Strong order intake of MNOK 4,328 in 2023, increase from MNOK 3,414 in 2022
• Revenue in 2023 of MNOK 3,432 - a 2% increase compared to revenue in 2022
• Net profit in 2023 of MNOK -19 - a increase from MNOK -131 in net profit in 2022
• Order backlog of MNOK 2,396, 42% increase compared to end of Q4 2022
• Commercial breakthrough for deep sea farming concepts
• Award of new RAS contract with NOAP for next 4,000 tonnes (phase 2) and new post smolt contract with Cermaq Norway. Contract values estimated at MEUR 40 and MEUR 60, respectively
• Acquisition of 51% of the shares in Submerged AS was completed in Q3 with the option to increase the ownership to 100% in 2028 based on certain conditions

*EBIT in 2022 was impacted by restructuring costs of MNOK 98

CEO's report

Group management
Board of directors' report
Board of directors	Financial key figures

Consolidated financial statements and notes - AKVA group

Financial statements and notes - AKVA group ASA

Auditor's report

Responsibility statement

Alternative performance measures - non ifrs financial measures

Environmental, social & governance (ESG)

EU Taxonomy

Corporate governance in AKVA group ASA

GRI context index

(in NOK 1 000)	2023	2022	2021	2020	2019
PROFITABILITY
Revenues	3 432 262	3 376 320	3 121 737	3 176 852	3 076 740
EBITDA	263 407	158 270	252 467	338 091	271 910
EBIT	67 603	-56 493	69 805	147 163	62 316
Profit before tax	-29 309	-151 864	2 549	121 475	13 476
Net profit	-18 527	-131 075	11 458	90 698	16 604
NET PROFIT (LOSS) ATTRIBUTABLE TO:
Non-Controlling interests	-692	134	-18	25	1 971
Equity holders of AKVA group ASA	-17 835	-131 209	11 476	90 673	14 633
Cash flow from operations	193 397	218 163	60 751	346 592	210 768
EBITDA margin	7,7 %	4,7 %	8,1 %	10,6 %	8,8 %
EBIT margin	2,0 %	-1,7 %	2,2 %	4,6 %	2,0 %
Return on capital employed	2,1 %	-2,0 %	2,6 %	6,9 %	2,9 %
Return on equity	-1,6 %	-11,5 %	0,9 %	8,7 %	1,7 %
FINANCIAL POSITION
Non-current assets	2 214 341	1 983 547	1 930 149	1 951 784	1 883 496
Current assets	1 469 591	1 596 899	1 515 397	1 274 910	1 150 138
Total assets	3 683 933	3 580 446	3 445 546	3 226 694	3 033 634
Equity attributable to equity holders of AKVA group ASA	1 142 451	1 144 000	1 296 885	1 041 538	986 340
Non-controlling interests	10 225	336	140	158	4 165
Total equity	1 152 676	1 144 337	1 297 025	1 041 696	990 505
Long-term debt	1 358 554	1 160 700	918 981	1 301 792	1 163 545
Short-term debt	1 172 701	1 275 410	1 229 541	883 207	879 584
Total equity and liabilities	3 683 933	3 580 446	3 445 546	3 226 694	3 033 634
Gross interest-bearing debt	1 395 843	1 265 540	1 232 874	1 332 100	1 217 447
Cash and cash equivalents	219 394	277 988	303 442	224 884	160 999
Net interest-bearing debt	1 176 449	987 552	929 432	1 107 215	1 056 448
Working capital	205 556	203 221	361 478	261 484	286 691
Equity ratio	31,3 %	32,0 %	37,6 %	32,3 %	32,7 %
Debt to equity ratio	121,1 %	110,6 %	97,9 %	127,9 %	122,9 %
	121,1 %	110,6 %	97,9 %	127,9 %	122,9 %
(in NOK)	2023	2022	2021	2020	2019
SHARE DATA
Earnings per share	-0,49	-3,61	0,34	2,74	0,44
Diluted earnings per share	-0,49	-3,61	0,34	2,74	0,44
Cash flow per share	-1,60	-0,78	6,03	1,92	0,12
Dividend per share	-	1,00	1,00	1,00	1,75
Shareholders´equity per share at year-end	31,16	31,20	35,37	31,25	29,59
Share price at year-end	58,00	57,00	88,20	105,00	74,00
Market capitalization at year-end	2 126 729	2 090 061	3 234 094	3 500 102	2 466 738
Number of shares outstanding at year-end	36 667 733	36 667 733	36 667 733	33 334 303	33 334 303
Weighted average number of ordinary shares	36 415 864	36 369 400	33 813 103	33 116 506	33 204 736	5

CEO's report

Group management

Board of directors' report

Board of directors

Consolidated financial statements and notes - AKVA group

Financial statements and notes - AKVA group ASA

Auditor's report

Responsibility statement

Alternative performance measures - non ifrs financial measures

Environmental, social & governance (ESG)

EU Taxonomy

Corporate governance in AKVA group ASA

GRI context index

Share Price Development

120
110
100
90
80
70
60
50
40
30
20
10
0	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
	01-2002-2003-2004-2005-2006-2007-20	08-2009-2010-2011-2012-2001-2102-2103-2104-2105-2106-2107-2108-2109-2110-2111-2112-2101-2202-2203-2204-2205-2206-2207-2208-2209-2210-2211-2212-2201-2302-2303-2304-2305-2306-2307-2308-2309-2310-2311-2312-23
	Revenue	Geographic segents*

	Land Based 18 %	Australas 7 %
Digital 4 %		Americas 19 %
		Nordic 60 %

Sea Based 78 %

Europe &

Middle East 14 %

*Based on customer location

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CEO's report

Group management

Board of directors' report

Board of directors

Consolidated financial statements and notes - AKVA group

Financial statements and notes - AKVA group ASA

Auditor's report

Responsibility statement

Alternative performance measures - non ifrs financial measures

Environmental, social & governance (ESG)

EU Taxonomy

Corporate governance in AKVA group ASA

GRI context index

Revenues				EBITDA
3 500					275
					250
					225
3 000					200
				175
					150
2 500					125
				100
2020	2021	2022	2023	2020	2021	2022	2023

Earnings per share			OPEX based revenue
3,5					1 000
3,0					900
2,5
				800
2,0
1,5					700
1,0
				600
0,5
0					500
- 0,5
				400
- 1,0
- 1,5					300
- 2,0
				200
- 2,5
- 3,0					100
- 3,5
				0
- 4,0
2020	2021	2022	2023	2020	2021	2022	2023

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• CEO's report
• Group Management
• Board of Directors' report
• Board of Directors

CEO's report

Group management

Board of directors' report

Board of directors

Consolidated financial statements and notes - AKVA group

Financial statements and notes - AKVA group ASA

Auditor's report

Responsibility statement

Alternative performance measures - non ifrs financial measures

Environmental, social & governance (ESG)

EU Taxonomy

Corporate governance in AKVA group ASA

GRI context index

CEO's report

DEAR STAKEHOLDERS AND SHAREHOLDERS

AKVA group entered 2023 with an excited pipeline of new projects, expectations of growth in activity level and improved profitability.

However, the activity level in 2023 was at the same level as in 2022. Overall, the order intake was sound with the award of the post smolt contract for Cermaq Nor- way (MEUR 60) and the RAS contract for Nordic Aqua Partners (MEUR 40) as the largest contracts. But the introduction of the resource tax had a negative impact on the activity level both for Land Based and parts of our Sea Based business as our customers postponed their investment plans. The market for post smolt in Norway is still challenging and uncertain, but we expect the market to normalize during the second half of 2024.

Due to change in market conditions AKVA announced a new cost saving program in Q3 2023 to adapt the organization to the current and expected activity level. The cost saving program was completed in Q4 2023 with estimated MNOK 45 in annual cost savings.

The profitability improved in 2023 compared to 2022 but is still below expectations. The profitability in Sea Based was acceptable supported by a healthy product mix, while the profitability in Land Based was low due to high cost base compared to current activity level, and due to low profitability on parts of the project portfolio.

• Revenue increased by 2% to MNOK 3,431 in 2023.
• EBIT increased from negative MNOK 56 in 2022 to MNOK 68 in 2023.
• Net profit negative MNOK 19, up from negative MNOK 131 in 2022.

MARKET

AKVA group is the global market leader of solutions and services to the fish farming industry, whereof approx. 90% of our deliveries are to the salmon industry. Salmon prices have over the past years been high due to high demand and constraints on supply. AKVA believes salmon prices to remain strong the coming years.

The resource tax had a negative impact on the market activity in Norway in 2023. We expect that the market for post smolt in Norway to gradually normalize during 2024.

During 2023 AKVA group had a commercial breakthrough of the deep farming concept Nautilus with awards of several contracts. The Nautilus solution has a documented positive impact on fish health and reduced sea lice pressure. We expect the Nautilus solution and other deep farming concepts to be highly relevant for the market in the years to come.

Market intelligence implies a significant demand growth for salmon by 2030 driven by increased focus on environment and health, and distribution of salmon to new markets. This increase in demand will be partly covered by technological advances for improved utilization of existing licenses but there is a common understanding in the market that the increased demand will not be covered through conventional farming alone. A significant part of the demand will come from unconventional supply sources and AKVA group believes that full grow out facilities on land will play an important role in the future.

Our focus is to make sure that AKVA group strengthens the position as an attractive global supplier so that the salmon industry can meet the expected demand growth worldwide.

INNOVATION AND DIGITALIZATION

To sharpen the innovation focus, we have divided our Centre of Excellence into three separate innovations agendas for Sea Based, Land Based and Digital. We have increased the innovation spending significantly the past years to support our organic growth ambitions and to strengthen our position as the global market leader.

Within Sea Based we have made good progress in 2023, especially within our deep farming concepts and new products were commercialized during 2023. We believe the deep farming concepts to be important for improving utilization of existing farming licenses and reduce the production costs to the farmers, and we will continue to improve our solutions.

The focus in Land Based is to further improve and document our technology. Our RAS concept is validated and well perceived in the marketplace. An important milestone in 2024 is to complete the first phase of the full grow out project for Nordic Aqua Partners in China.

We have achieved great progress in further developing and improving our Digital products: AKVAconnect, AKVA Observe and Fishtalk. We achieved important milestones in 2023 with regards to new sales and continued with a strong revenue growth of approx. 30%. In Q3 2023 we also acquired a controlling interest in Submerged AS which has developed a camera solution which can be used

for sea lice counting and biomass estimation. We will continue to invest in our digital capabilities to support the future growth of the Digital business segment.

SUSTAINABILITY

In 2023 we developed the world's first recycled pen based on discarded pens from fish farming. We established an innovation project with the aim of developing circular

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CEO's report

Group management

Board of directors' report

Board of directors

Consolidated financial statements and notes - AKVA group

Financial statements and notes - AKVA group ASA

Auditor's report

Responsibility statement

Alternative performance measures - non ifrs financial measures

Environmental, social & governance (ESG)

EU Taxonomy

Corporate governance in AKVA group ASA

GRI context index

farming nets using recycled nylon and ropes from discarded nets from fish farmers.

In 2023 AKVA group succeeded in commercializing the deep farming solution Nautilus for lower lice pressure and better fish health. We have further developed our waterborne feeding systems with effective energy systems for new and existing feed barges. An important priority for AKVA group has also been to strengthen our digital agenda for more sustainable solutions and developing the first phase of a land based full grow-out facility in China based on RAS and our Zero Water Concept.

OPERATIONAL EXCELLENCE

We have a strong focus to improve the performance culture in AKVA group. During 2023 several initiatives and training sessions have been executed to further develop the commercial awareness in the entire AKVA organiza- tion.

An important part to improve our project execution capabilities and increase customer satisfaction is to implement a new global ERP system supporting standardization of business processes and increase visibility. We have entered a partnership with a global and strong ERP supplier and will go live with the ERP system in some of our legal entities during first half of 2024.

supply constraints. The high demand for salmon will push for new technological advances to improve utilization of existing licenses in the sea but will also require scale-up of new farming technologies.

During Q4 2023 we revised our medium-term financial targets, and we are aiming a revenue of minimum BNOK 3,6 in 2024 and an EBIT margin of 4-5%.

My role is to make sure we make the right priorities and execute our innovation agendas to the best for AKVA, our customers, shareholders, and stakeholders.

An important part of everything we do is ensuring our values - Customer focus, Aquaculture knowledge, Reliability, Enthusiasm - remains crucial in the further development of AKVA group.

THE FUTURE

AKVA group is well positioned for future profitable growth.	Klepp, Norway
We have an acceptable order backlog and a solid pipeline
of potential new projects which forms a good foundation to	14 March 2024
execute our organic growth strategy.	Knut Nesse
Salmon prices are expected to remain strong driven by	Chief Executive Officer

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