Elmera Group Asa · OSL:ELMRA
Elmera Group Asa — Investor Day (June 2024)
65 slides from Elmera Group Asa's investor day presentation, Jun 5, 2024
Slide 1: Capital Markets Day
Capital Markets Day 5 JUNE 2024
Slide 2: Today's agenda and presenters
Today’s agenda and presenters Subject Presenter State of the union Rolf Barmen (CEO) Consumer segment Magnar Øyhovden (CEO Fjordkraft AS) Business segment Roger Finnanger (EVP Head of Business) Nordic segment Per Heiberg-Andersen (EVP Nordic) Break (10 min) Power trading Solfrid F. Andersen (EVP Hea
Slide 3: State of the union
State of the union ROLF BARMEN (CEO)
Slide 4: What we do / Our purpose
What we do: Elmera Group provides consumers, businesses and the wholesale market with electricity, billing & rating services and electricity related technology solutions. Our purpose: To create the most attractive electricity retailers in the Nordics. Capital Markets Day 2024 4
Slide 5: Measures taken have strengthened our core business
Several important measures taken over the last years have significantly strengthened our core business PRODUCT PORTFOLIO BRAND POSITION TRANSPARENCY AND COMPLIANCE Phase-out of variable contracts Strengthened brand position Increased focus on compliance and legacy fixed-price and customer satisfacti
Slide 6: Innovative products underpin retailers' importance in the value chain
Introduction of innovative technological products and services underpin the retailers’ importance in the value chain • Elmera Group has been a front-runner within regulatory issues the last ten years. • The role of the electricity retailers has been strengthened over the last years, driven by increa
Slide 7: Key enablers for growth in the Nordic segment are now in place
Key enablers for growth in the Nordic segment are now in place • A new brand strategy has been implemented, with Nordic Green Energy serving as the group's brand in the B2C segment and Fjordkraft as the pan-Nordic brand in the B2B segment. • Organisational changes have been implemented, featuring a
Slide 8: Subsidiaries, joint ventures and associates represent growth opportunities
The group’s subsidiaries, joint ventures and associates represent exciting growth opportunities 61%1 40%1 Mobile service offering to The largest supplier of cloud- Among the largest suppliers of support core business through based billing and rating billing and rating services to reduced customer ch
Slide 9: Capitalising on increased insourcing of power trading
Capitalising on increased insourcing of the power trading function • To capitalise on Elmera Group’s position as the largest electricity purchaser in Norway will be a key focus area over the next years. • The new power purchase agreement with Statkraft, effective from 1 May 2025, enables us to insou
Slide 10: What we do / Our purpose
What we do: Elmera Group provides consumers, businesses and the wholesale market with electricity, billing & rating services and electricity related technology solutions. Our purpose: To create the most attractive electricity retailers in the Nordics. Capital Markets Day 2024 10
Slide 11: Consumer segment
Consumer segment MAGNAR ØYHOVDEN CEO FJORDKRAFT Capital Markets Day 2024 11
Slide 12: Leading player in the Norwegian Consumer segment with three brands
Elmera Group is the leading player in the Norwegian Consumer segment with three strong and diverse brands Consumer segment in brief A leading market position #1 Fjordkraft - the largest and most well-known electricity retail brand in the consumer segment1 The Consumer segment comprises energy sales
Slide 13: Market leading distribution power and product management
Market leading distribution power and product management - key elements in an impressive growth over the years numbers of deliveries at end of period 000 000 00 00 52 • Market leading distribution power throughout shifting environments. 00 200 • Streamlined our electricity products and reduced marke
Slide 14: Improved customer satisfaction
Improved customer satisfaction – a key in future growth and extended profitability • Industry reputation is still highly dependent on price level. ,2 • Improving customer satisfaction is a key element in our strategy for future growth and profitability – we see a 5,0 positive change among both custo
Slide 15: Historically low market churn
Historically low market churn – an advantage for our brands • The monthly supplier changes in Norway have been at a historically low level the last year. • Our own brands have reduced churn significantly more than the market from 2018 until 2023. • Low market churn is an advantage for Fjordkraft wit
Slide 16: Cost leadership in Consumer
Cost leadership in Consumer – a key element in extended profitability • Discontinued elements in the loyalty program that the customers did not find relevant. 0 • Successful cost program in Consumer 0 • F ordkraft’s customer service division has been 20 through significant cost reductions and left 2
Slide 17: Digital leadership
Digital leadership – prepared for future customer expectations • Our digital focus pays off: Significant improvement in App ratings and customer feedback on our digital services the last two years • The Fjordkraft app was in May 2024 rated 3rd place in Europe1 in LCP Deltas leaderboard of energy sup
Slide 18: Digital services that make a difference
Digital services that make a difference – empowering customers to energy smartness • Focus on transparency and trust across all dimensions • Building a strong culture that supports an increased engagement to be the best electricity advisors Capital Markets Day 2024 18
Slide 19: Electricity advisory in practice
Electricity advisory in practice – win-win solutions • In all brands we focus on helping the customer to use electricity in a smarter and more cost-efficient way, for example through StrømSmart and StrømSmart+ launched in May 2024 in Fjordkraft. • The services represent a key element in focusing on
Slide 20: Capital Markets Day 2024
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Slide 21: Capital Markets Day 2024
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Slide 22: Fjordkraft Mobil - significant improvement in financial results
Fjordkraft Mobil - significant improvement in financial results • Fjordkraft obil’s results are reported in the group’s New growth initiatives. • Operates as a small organisation (3 FTEs) with sales, marketing and customer service successfully integrated in Fjordkraft Consumer. • Migration of custom
Slide 23: Fjordkraft Mobil - ready for further growth
Fjordkraft Mobil - ready for further growth • We now experience growth in the customer base and see large potential for further growth going forward. • Customer satisfaction is higher among customers who have established relationships in both mobile and electricity services. numbers of subscribers a
Slide 24: Summary – Consumer
Summary – Consumer 1 Proven track record for customer growth and value creation through complex market environments. 2 Norway’s leading player in the Consumer segment with three strong and diverse brands. 3 A robust product portfolio with low market risk and unparallelled menu of value adding servic
Slide 25: Business segment
Business segment ROGER FINNANGER EVP BUSINESS Capital Markets Day 2024 25
Slide 26: A brief look at the business segment
A Brief look at the business segment A leading market position #1 A leading market position with > 127` deliveries and >48` business customers #1 A leading brand position with 92 % brand awareness 1 #1 Offering the industry`s most attractive product range #1 Leading supplier in the Business segment
Slide 27: Successful history of growth
Successful history of growth Our performance A tailored approach to each of the segments Competitive advantages Closing balance 000 200 5 SOHO and SME Large Customer & Public entities • 92 % brand awareness. 50 Size: From 0 – 5 GWh Size: < 5 GWh 2 Sales capacity: Sales capacity: • Large distribution
Slide 28: Predictable business model handles unpredictable market conditions
Predictable business model handles unpredictable market conditions Robust business model Net revenue ad . N N N h 00 500 00 25 00 000 00 5 00 • Stable results despite challenging market 2 500 conditions. 00 200 • Strong focus on credit management has mitigated increased counterparty risk 20 202 20 2
Slide 29: Product range addressing customers' needs
Product range addressing customers' needs in a market with increasing volatility Customer Cost Control Consumption Control New Energy Solutions needs Solutions for all B2B customers Large customers & public entities Solutions offering a complete overview and allows customers to act on time of use to
Slide 30: Digital ecosystem
Digital ecosystem – electrification opens new business opportunities, EPC** + Partner X attracts partners and expand the customer base Heat pumps* Storage* • More than 50.000 subscriptions in “Min Bedrift” Economic Chat reporting • Positioned for growth with Nordic expansion and a large customer bas
Slide 31: The Nordic Expansion
The Nordic Expansion • Risk exposure reduced significantly • Cost efficient matrix organisation • Migration to the Elmera platform: • Sweden in Q1 2025 • Finland in Q2 2025 • Building competitive advantages: • Brand awareness “one brand – one voice” • Strong distribution • Nordic product range inclu
Slide 32: Summary – Business
Summary – Business: Strong growth history, robust business model and ready for Nordic expansion 1 Elmera Group operates a profitable and robust business model in the B2B market. The Nordic Expansion opens a market three times the size of the Norwegian Business market. Sales capacity to be strengthen
Slide 33: Nordic segment
Nordic segment PER HEIBERG-ANDERSEN EVP NORDIC Capital Markets Day 2024 33
Slide 34: Content
Content • Nordic segment overview • Market turmoil ‘2 ’22 • Fundamental changes • Organic growth model • M&A • Summary Capital Markets Day 2024 34
Slide 35: Nordic segment overview
Nordic segment overview Market position in the Nordic segment Switch Nordic Green AB was • Nordic Green is a challenger and a fighting brand. acquired by Elmera Group Q4 2020 • Positioned as a retailer of renewable energy. and is a Swedish-Finnish retailer with • Operations consolidated in the Vaasa
Slide 36: Market turmoil Q4'21 and 2H'22
arket turmoil Q ’2 and 2H‘22 • The combination of a dip in Nordic nuclear capacity, weak hydrology and increasing gas prices caused very high electricity spot prices in Q 202 . This was then further fuelled by Russia’s invasion of Ukraine, leading to the extreme volatility 2H 2022. • The high price
Slide 37: Fundamental changes in NGE '22 – '23
Fundamental changes in NGE ‘22 – ‘2 • Decision to stop all new sales of fixed price January ’22 starting a two-year transition from fixed price based to spot based. • New CE Q ’22 followed by additional ad ustments to organisation and strengthening of management. • Starting B2B matrix implementation
Slide 38: Positive press following repositioning strategy
Positive press following repositioning strategy #3 EPSI Finland 2023 CapitalMarkets Capital MarketsDay Day2024 2024 38
Slide 39: Organic growth model
Organic growth model • Clear positive brand development. • Comparative advantage in products, technology offerings and customer interface (app). • Elmera Group IT-platform migration H’25 enabling both new product offerings as well as improved organisational efficiency. • Organisation strengthened an
Slide 40: M&A
M&A • M&A agenda paused during turmoil. • Refocus on launching Elmera Group app as well as preparing for migration to Elmera IT platform. • Few transactions in the Swedish and Finnish markets last two years. • Elmera Group again interested in acquisition opportunities. • Key is synergy realisation a
Slide 41: Summary – Nordic
Summary – Nordic 1 Positive turnaround of Nordic Green ’22 – ’2 with regained profitability and positioned for new market dynamics. 2 The Elmera Group app in both Finland and Sweden for the B2C market. Nordic B2B matrix and Fjordkraft brand. 3 Consolidation on Elmera Group platform enables new servi
Slide 42: 10-minute break
10-minute break
Slide 43: Power Trading
Power Trading SOLFRID FLUGE ANDERSEN EVP HEAD OF POWER TRADING AND ENERGY SUPPLY
Slide 44: Key objectives for the group's power trading function
KEY RESPONSIBILITIES Key objectives for the group’s power trading function Navigation Power Trading Market Risk Optimise power trading Individual and portfolio Risk Management Energy Market Reduce the group’s cost of goods sold through Provide consumers and businesses with tailored optimising timing
Slide 45: Market risk – type of risk and trend
DECLINE IN GROUP MARKET RISK Market risk – type of risk and trend Navigation Power Trading Price risk Profile risk Volume risk Definition Unhedged difference Consumption profile may Consumption differs from between purchase and differ from hedged hedged volume. Market Risk selling price. profile. Gr
Slide 46: Production mix and consumption
ELECTRIFICATION AND UNREGULATED PRODUCTION Production mix and consumption Navigation Nordic Production mix (TWh) Nordic Production, Consumption and Net 800 exports (TWh) 800 Power Trading 600 600 400 400 Market Risk 200 200 Energy Market 0 0 -200 Hydro- Nuclear Wind onshore Wind offshore Sourcing mo
Slide 47: Price and volatility EUR/MWh
PRICE PROGNOSIS – STABILISING MARKET Price and volatility 140 Navigation 120 Power Trading 100 EUR/MWh 80 Market Risk 60 40 Energy Market 20 0 Sourcing model Cal-10 Cal-11 Cal-12 Cal-13 Cal-14 Cal-15 Cal-16 Cal-17 Cal-18 Cal-19 Cal-20 Cal-21 Cal-22 Cal-23 Cal-24 Cal-25 Cal-26 Cal-27 Cal-28 Volue SKM
Slide 48: Nordic Balancing Model
E ERGY SYSTE ’S RESPO SE TO HA GE I PRODU TIO IX Nordic Balancing Model Navigation From hourly metering and pricing to 15-minute intervals – to release strain Power Trading on grid balancing Market Risk Effects on Elmera 3 new intraday auctions – efficient • Increased opportunity to trade into balan
Slide 49: Changes in the group's sourcing model
PARTNER MODEL IN TRANSITION Changes in the group’s sourcing model Navigation • As from ay 2025, Elmera Group will insource core activities related to the group’s Power Trading power purchase function, currently performed by Statkraft. • Functions to be insourced include consumption forecasting, day-
Slide 50: Power Trading - Balancing cost
POWER TRADING - PHYSICAL Power Trading - Balancing cost Scheduled to be part of our Navigation set up from 1 May 2025 Intraday market Balancing Power Trading Day-ahead 3 new auctions and market 12:00 for next day&night continuous trading At delivery Market Risk Energy Market Sourcing model • Elmera
Slide 51: Power trading - Financial and Green Markets
LOW LIQUIDITY AND SPREAD TRIGGERS MORE POTENTIAL EFFECT ON OPTIMISING PURCHASE Power trading - Financial and Green Markets Navigation Power Trading • Nasdaq as price • Some products have reference for trade – next to no liquidity – spread still no functioning substantial. reference price. Market Ris
Slide 52: Summary – Power Trading
Summary – Power Trading 1 An energy market in transition with increasing share of renewable production and price volatility. 2 Market risk has been reduced over the last years. Back-to-back is the group’s primary hedging strategy. 3 As from 1 May 2025, the group will insource important power purchas
Slide 53: Financial outlook
Financial outlook HENNING NORDGULEN EVP - GROUP CFO
Slide 54: Strong historical track record – positioned for profitable growth
Strong historical track record – positioned for profitable growth Strong historical net revenue and EBIT development… … b our key development initiatives Net revenue adj.1 in NOKm 1724 1711 1733 1543 1284 1088 2018 2019 2020 2021 2022 2023 EBIT adj.1 608 610 in NOKm 490 513 460 390 2018 2019 2020 20
Slide 55: Significant turnover with high cash conversion
Significant turnover with high cash conversion Total assets Gross revenue Net revenue adj. EBIT adj. DPS 2022 8,361 NOKm 18,921 NOKm 1,733 NOKm 513 NOKm 2.30 NOK Distribution of EBIT adj. in 2023 35 % 52 % 6% 7% Consumer Business Nordic New Growth Initiatives Volume sold 8.1 TWh 7.6 TWh 2.2 TWh 3.6
Slide 56: Targeting broad net revenue growth
Targeting broad net revenue growth Key drivers for net revenue growth: • Market volume growth of ~2% annually. • Ambition to take our relative share of the market growth in the Norwegian B2C market. • Targeting growth in market share in the Norwegian B2B segment, with positive impact from increased
Slide 57: Stable operating expenses and increased scalability
Stable operating expenses and increased scalability Consumer price index1 (%) • Targeting stable nominal opex adj., in line with 2023, in 2024 (adjusted for tax and excl. energy products) 8 and 2025. • Inflationary pressures expected to abate in coming years. 6 • Key cost control areas in order to m
Slide 58: Reducing EPS impact from P&L-adjustments
Reducing EPS impact from P&L-adjustments Adjustments to EBIT (NOKm) 47 • M&A depreciation tapers off significantly, down to 8 -7 -5 ~30 MNOK in 2026 if no new M&A. -9 -2 • Significant reduction of legacy variable portfolio in - 37 NO and fixed price portfolio in SE/FI leading to - 42 - 53 reduced ne
Slide 59: Financing to reflect future power sourcing model
Financing to reflect future power sourcing model Norges Bank’s policy rate1 (%) • Revised sourcing model to optimise COGS affects financing. 5 • With reduced dependency on Statkraft from May 2025, part of 4 the current supplier credit will be replaced by increased bank syndicate financing. 3 • The r
Slide 60: Financial targets 2024-2025
Financial targets 2024-2025 ▪ Net revenue growth in all segments in 2024 and 2025. ▪ Stable nominal opex adj., in line with 2023, for 2024 and 2025. P&L ▪ EBIT adj. in the area of NOK 550-600m for 2024 and 2025 with a positive development throughout the period. ▪ Target pay-out ratio of at least 80%
Slide 61: Key investment highlights
Key investment highlights ROLF BARMEN (CEO)
Slide 62: Key investment highlights
Key investment highlights 1 Operating in the attractive Nordic electricity retailing market with a stable demand profile and growth opportunities from increased electrification. A comprehensive product offering, including risk mitigation products and other value-added services, empowering customers
Slide 63: Q&A
Q&A Capital Markets Day 2024 63
Slide 64: Forward-looking statements
Forward-looking statements This presentation contains, or may be deemed to contain, statements that are not historical facts but forward-looking statements with respect to Elmera Group’s expectations and plans, strategy, management’s ob ectives, future performance, costs, revenue, earnings and other
Slide 65: Elmera Group
Elmera Group