Elmera Group Asa · OSL:ELMRA
Elmera Group Asa — Investor Day (April 2022)
49 slides from Elmera Group Asa's investor day presentation, Apr 6, 2022
Slide 1: Capital markets day 2022
Capital markets day 2022 CEO – Rolf Barmen OSLO 6 APRIL 2022
Slide 2: A highly successful strategy execution has resulted in an impressive profitability shift
A highly successful strategy execution has resulted in an impressive profitability shift and net revenue growth Impressive net revenue and EBIT development… …enabled through optimisation & focused investment Net revenue adj.1 1700 in NOKm 1543 New management and 1284 strategy in place Today Fjordkra
Slide 3: Key focus areas and milestones in our historical strategy plans
Key focus areas and milestones in our historical strategy plans 1st strategy plan: 2nd strategy plan: 3rd strategy plan: • Growth of value-added services • Launch of Mobile service • Established AllRate and in the Consumer segment provider offering Metzum, offering billing and rating and software so
Slide 4: Key focus areas going forward
Key focus areas going forward 1 Consider sales channels mix in a new context, post-covid and in a high-price sentiment 2 Further develop product offering within risk mitigating products 3 Improve availability and transparency and ensure high quality customer service. Support Trygg Strømhandel compli
Slide 5: A wide range of brands and business units in the Group's portfolio
A wide range of brands and business units in the Group’s portfolio Electricity retail Electricity related service companies Mobile service provider Capital Markets Day 2022 5
Slide 6: Fjordkraft AS will be headed by former S-banken CEO - Magnar Øyhovden
Fjordkraft AS will be headed by former S-banken CEO - Magnar Øyhovden Electricity retail Mobile service provider Capital Markets Day 2022 6
Slide 7: Roger Finnanger will be leading the Group's B2B activities across all brands
Roger Finnanger will be leading the Group’s B2B activities across all brands Electricity retail Solar & Charging Capital Markets Day 2022 7
Slide 8: Elmera Group ASA to be suggested as new name of Fjordkraft Holding ASA
“Elmera Group ASA” to be suggested as new name of Fjordkraft Holding ASA on the AGM, to better reflect the width of the Group’s brands and value creation Electricity retail Electricity related service companies Mobile service provider Capital Markets Day 2022 8
Slide 9: Key investment highlights
Key investment highlights 1 Operating in the attractive and well-regulated Nordic electricity retailing market with a stable demand profile and growth opportunities from electrification- related products and services 2 Largest player in Norway and with the necessary footprint to scale and replicate
Slide 10: Trading update Q1'22 and Financial outlook
Trading update Q1’22 and Financial outlook CFO – Birte Strander OSLO 6 APRIL 2022
Slide 11: Trading update Q1 2022
Trading update Q1 2022 • Customer figures quarter-end (QoQ change): • Consumer: 663’ (-29’) • Business: 115’ (+4’) • Nordic: 177’ (+5’) • New Growth Initiatives: • Mobile: 154’ (-6’) • Extended Alliance: 87’ (0’) • Group EBIT adj. expected in the area of NOK 160-170m for Q1 2022 • All time high fina
Slide 12: Financial outlook
Financial outlook
Slide 13: Organic financial targets 2022-2023
Organic financial targets 2022-2023 Targeting a net revenue in the area of NOK 1,600-1,650m for 2022 and 2023 Group EBIT adj. in the area of NOK 500-550m for 2022 and 2023. 2022 expected in the lower end of the interval (EBIT adj. margin in the area of 30-34%) Cap.ex Targeted to be in the area
Slide 14: Key drivers and expectations for the segments
Key drivers and expectations for the segments Competition expected to continue at a high level. Consumer demand likely to turn towards more risk mitigating products Consumer Expecting a decline in average consumption per delivery due to high electricity prices and increased customer awareness
Slide 15: Capital allocation targets
Capital allocation targets Dividend Target pay-out ratio of at least 80% of net income, adjusted for certain cash and non-cash items Targeting a leverage of 2-2.5x NIBD/EBITDA with variations intra-year due to seasonality in net working capital Leverage Current balance sheet enabling substanti
Slide 16: Power Trading
Power Trading COO – Solfrid F. Andersen OSLO 6 APRIL 2022
Slide 17: An introduction to the Group's power trading function
An introduction to the Group’s power trading function Key responsibilities: Navigation Power Trading Energy Market Power purchasing, both in the Handling of electricity physical and financial market certificates and green products Demand Supply Price Serve the business units Individual and portfolio
Slide 18: The production mix in the Nordics
The production mix in the Nordics Navigation Power Trading Energy Market Demand Supply Price Market Risk Capital Markets Day 2022 18
Slide 19: Europe is transitioning from fossil production to renewables
Europe is transitioning from fossil production to renewables Navigation Power Trading Energy Market Demand Supply Price Market Risk Capital Markets Day 2022 19
Slide 20: A high and stable demand for electricity in the Nordic countries
A high and stable demand for electricity in the Nordic countries Navigation Power Trading Energy Market Demand Supply Price Market Risk Capital Markets Day 2022 20
Slide 21: The demand for power is doubling
The demand for power is doubling – the majority of new capacity coming from renewables and low emissions Navigation Power demand is doubling 2/3 from solar and wind 83% from emission free Power Trading Energy Market Demand Supply Price Market Risk Today 2050 Today 2050 Today 2050 Source: Statkraft L
Slide 22: Determination of the electricity price
Determination of the electricity price Navigation Power Trading Marginal production cost Example demand curve Gas turbines Energy Market The system reference • The price is set with an price serves as a basis Clearing point unconstrained market clearing for financial trading and between supply Oil D
Slide 23: Prices can differ greatly between areas due to limited transfer capacity
Prices can differ greatly between areas due to limited transfer capacity Navigation 350 Power Trading 300 Energy Market 250 200 Demand 150 Supply 100 Price 50 0 01.08.2021 01.10.2021 01.12.2021 01.02.2022 01.04.2022 Market Risk System price (€/MWh) NO4 NO1 Capital Markets Day 2022 23
Slide 24: Market risk description and mitigation
Market risk description and mitigation Navigation Risk Power Trading category Price risk Profile risk Volume risk When the purchase When the consumption When consumption Energy Market price and selling price pattern differs from differs from hedged When does differs, i.a. due to time hedged volume p
Slide 25: Consumer segment
Consumer segment EVP Consumer – Christian Kalvenes OSLO 6 APRIL 2022
Slide 26: Fjordkraft is the largest player in the Norwegian consumer market
Fjordkraft is the largest player in the Norwegian consumer market, supplemented by both a strong fighting brand and a regional brand Consumer segment in brief A leading market position Fjordkraft - the largest and most well-known The Consumer segment #1 electricity retail brand in the consumer segme
Slide 27: Improving customer satisfaction, a must-win battle for future growth
Improving customer satisfaction, a must-win battle for future growth and extended profitability Development in the reputation of the Norwegian power industry (2002-2021) 62 • Industry reputation is highly dependent on price level • The high elspot price level in 2021 45 and 2022 has affected the ent
Slide 28: Through increased insight and transparency, and further product innovation
Through increased insight and transparency, and further product innovation, we enable energy savings and cost reductions Consumption insight Providing customers with insight Smart EV charging and value propositions, resulting in energy savings and cost reductions Mobile service offering Untapped pot
Slide 29: Partners accelerate innovation and cutting down time to market
Partners accelerate innovation and cutting down time to market Partners Hardware-software ecosystem Customer interface Capital Markets Day 2022 29
Slide 30: A highly competent power trading division has resulted in significant savings for customers
A highly competent power trading division combined with product innovation has resulted in significant savings for the customers Month Customer price vs elspot price Mar-21 -18,70 øre/kWh Apr-21 -7,27 øre/kWh Spot with management May-21 -9,54 øre/kWh Power trading team aim to minimize market Jun-21
Slide 31: Distribution opportunities in a high-price sentiment
Distribution opportunities in a high-price sentiment • New customer demands offer new opportunities to move a larger share of our distribution to low-cost pull channels within our digital ecosystem • We are certified by DNV, assuring quality and transparency • The demand for the products and service
Slide 32: Summary
Summary 1 Improving customer satisfaction is a must-win battle for future growth and extended profitability 2 Through increased insight and transparency, and further product innovation, we enable energy savings and cost reductions 3 We see untapped potential within products and services related to c
Slide 33: B2B & new energy solutions
B2B & new energy solutions EVP Business – Roger Finnanger OSLO 6 APRIL 2022
Slide 34: Profitable growth made possible by focusing on product management and distribution
Business segment Profitable growth made possible by focusing on product management and distribution Our growth story Customer base: Profitability: TWh 800 80% 180 10 8 +32% 60% +48,5 7 +5% 53% 54% 55% 6 49% 111 6 6 6 5 5 461 107 6 5 4 4 400 377 40% 90 78 5 4 336 76 291 63 241 2 0 0 - - 0% 2017 2018
Slide 35: A Brief look at the business segment
Business segment A Brief look at the business segment A leading market position # of electricity deliveries3 Volume (GWh)4 Market Share5 A leading market position with > 111` #1 deliveries and >45` business customers ~ 115k ~7 TWh ~20% A leading brand position with 97 % brand #1 awareness 1 A tailor
Slide 36: Product range addressing customers needs in a market with high price and volatility
Business segment Product range addressing customers needs in a market with high price and increasing volatility attract an even larger customer base Customer Cost Control Consumption Control New Energy Solutions needs Electrification opens up new business opportunities and expands the prospect base
Slide 37: Offering an unique range of services to handle all risk associated with power purchasing
Business & Nordic Cost control: Offering an unique range of services to handle all risk associated with power purchasing Our customers have saved Risk mitigating services Minimizing price fluctuation more than 900 NOKm from risk mitigating Businesses seeking to manage their products in 2021 electric
Slide 38: Strengthening our digital services with new digital ecosystem
Business & Nordic Consumption control: Strengthening our digital services and reaching out to all our brands with new digital ecosystem Large customers & public entities Complete overview on all energy sources allows large customers to plan their activities on multiple sites and optimize their energ
Slide 39: Ramping up our sales systems and sales capacity
New Growth Initiatives New energy solutions: Ramping up our sales systems and sales capacity to meet extreme increase in customer attraction Value propositions Solar energy solutions EV charging Pre - installation: • Advisory services • Advisory services • Home charging with financing solutions • Fr
Slide 40: Strong growth history and organized for further growth
Strong growth history and organized for further growth with multiple brands and markets Our growth history Continuous growth Customer base: • Continue to grow sales capacity • Gudbrandsdal Energy is ramping up capacity in August • Utilize our product management experience and launch attractive produ
Slide 41: The Nordic segment
The Nordic segment Per Heiberg-Andersen OSLO 6 APRIL 2022
Slide 42: Content
Content 1. Nordic segment overview 2. The fixed price portfolio and an extreme Q4’21 3. Energy market normalization and new potential 4. M&A status 5. Summary Capital Markets Day 2022 42
Slide 43: 1. Nordic segment overview
1. Nordic segment overview • A challenger and a Nordic Green Energy (Switch Nordic fighting brand Green AB) was acquired by Fjordkraft Q4 • Positioned as a retailer of 2020 and is a Swedish-Finnish retailer renewable energy with offices in Stockholm and Vaasa • 177k customers in Sweden and Finland V
Slide 44: 2. The fixed price portfolio and an extreme Q4'21
2. The fixed price portfolio and an extreme Q4’21 • Spot prices four times higher than normal due to dip in Nordic nuclear capacity, very weak hydrology and extreme gas prices • Very low temperatures resulted in under hedging in late December (5°C colder than normal in Finland) • Extreme volatility
Slide 45: 3. Energy market normalization and new potential
3. Energy market normalization and new potential A normalizing energy market Forward Nord Pool System price, EUR/MWh EPAD 2022-2026 , EUR/MWh Source: Nord Pool data Positive developments in Sweden and Finland • Public awareness and new focus on electricity and energy balance • EV/PHEVs 1/3 of new sa
Slide 46: 4. M&A status
4. M&A status • 20+ meetings held • Most contacts in Finland. Some contacts in Sweden, though limited by elections September ‘22 • Very positive feedback on the Group’s IT platform and services • Mutual interest and continued dialogue in several of relations • Growing awareness of risk in the fixed
Slide 47: 5. Summary
5. Summary 1 Nordic expansion will create value to the Group. An indispensable part of strategy to become a cross Nordic player 2 Replicate group IT platform and enable new digital services. Close cooperation in product management across the Nordics 3 M&A dynamics may pick up 2H’22. Focusing on port
Slide 48: Q&A
O&A ae Fjordkraft Holding
Slide 49: 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 Fjordkraft’s expectations and plans, strategy, management’s objectives, future performance, costs, revenue, earnings and other t