Accelerated organic growth expected for aquaculture equipment company.
In an Oslo Stock Exchange statement ahead of its capital markets day on Tuesday, AKVA group writes that an expected 1-2 million tonne increase in the global consumption of Atlantic salmon by 2030 will drive the company’s growth expectations.
“The expected demand growth is in line with the increase in salmon consumption over the last 10 years, and the outlook is strongly supported by global megatrends where consumers focus on healthy and sustainable food produced close to where they live,” wrote AKVA group.
It wrote that on the supply side, a major part of the increased volume is likely to come from conventional cage based farming, supported by improved fish health and technology innovations.
The remaining part is expected to be supplied from land-based farming and other unconventional technologies.
“Farming salmon closer to consumers in Asia and US would eliminate the environmental footprint of air transport and is expected to be cost-competitive. AKVA is already involved in several such projects as reported lately,” it added.
Last week AKVA group’s EUR 50 million China contract with Nordic Aqua Partners was secured.
“For AKVA group, as a leading global supplier of technology to the salmon industry, the expected increase in both cage-based and land-based salmon farming will represent two growth engines for our business”, said CEO Knut Nesse states.
The market outlook reflected above forms the basis for the group’s strategy for the period 2021-2023 as supported by the Board of directors earlier this month.
“I am pleased that we all concurred on the ambition to deliver minimum 25 per-cent annual EBIT-increase”, said CFO Ronny Meinkøhn. “We are also confident that AKVA group already has the financial capacity to realize our organic growth strategy, and at the same time pay an attractive and gradually increasing dividend to our shareholders”, he added.
To summarize, the AKVA strategy includes the following key elements:
* Topline growth is primarily expected to be organic. Strong focus on operational excellence.
* Deliver minimum 25 per-cent EBIT-increase year-on-year.
* Step by step improve return on average capital employed (ROACE) to a minimum 15 per-cent by 2023.
* At least 50 per-cent increase in innovation spending to support new product development and organic growth.
* Ramp up the spending on our 3 digital platforms AKVA connect, AKVA observe and Fishtalk.