Elmera Group Asa · OSL:ELMRA
Elmera Group Asa — Fjordkraft — Q2 2018 Earnings Presentation
29 slides from Elmera Group Asa's earnings presentation, Aug 30, 2018
Slide 1: Q2 2018 Presentation
Q2 2018 PRESENTATION Rolf Barmen (CEO) Birte Strander (CFO) Oslo, 30th August
Slide 2: Q2 2018 Highlights
Q2 2018 HIGHLIGHTS Rolf Barmen (CEO)
Slide 3: Highlights second quarter 2018
Highlights second quarter 2018 A solid performance in a warm and volatile quarter Key Highlights • Adjusted net revenue was NOK 242.0m, +18% YoY 2 - Growth ~60/40 split between improved margins and increased # of deliveries (end of period) Net change in # of deliveries volume sold 595 627 63 432 • S
Slide 4: Trondheim Kraft and TrønderEnergi Marked merging into TrøndelagKraft
Trondheim Kraft and TrønderEnergi Marked merging into TrøndelagKraft • Becoming the largest player in the Trøndelag area, comprising ~100k deliveries • Local brand, sponsoring e.g. Ranheim Fotball and Olavsfestdagene • Expected one-off integration costs of NOK 10m, as previously communicated. ~5 mil
Slide 5: Agreement to acquire the customer portfolio of Oppdal Everk
Agreement to acquire the customer portfolio of Oppdal Everk Transaction highlights Customer portfolio (‘000) • Agreement to acquire Oppdal Everk’s customer portfolio 6 000 5 473 5 306 5 263 • The customer portfolio comprise approx. 5 200 electricity 5 204 deliveries, primarily consumer customers (~9
Slide 6: Business Review
BUSINESS REVIEW Rolf Barmen (CEO)
Slide 7: Market development
Market development Key highlights in Q2 2018 Monthly elspot prices (NOK/kWh)1 • Elspot prices have been volatile in the second 0,60 quarter of 2018 0,50 - Price drop in second half of April and first half of May, 0,40 followed by a sharp increase through the last half of May and into June 0,30 0,20
Slide 8: Segment development - Consumer
Segment development - Consumer Key highlights in Q2 2018 # of electricity deliveries2 (‘000) • Continued organic growth accompanied by 600 substantial M&A growth from TEM acquisition 500 - Net additions in Q2 2018 were 51,360, of which 1,902 400 organic 300 519,9 • Volume growth of 5% YoY driven by
Slide 9: Segment development - Business
Segment development - Business Key highlights in Q2 2018 # of electricity deliveries2 (‘000) • Continued organic growth accompanied by 80 substantial M&A growth from TEM acquisition 70 - Net additions in Q2 2018 were 12,072, of which 651 60 organic 50 40 75,8 • Volume growth of 12% YoY driven by gro
Slide 10: New Growth Initiatives
New Growth Initiatives Key highlights in Q2 2018 # of Mobile subscribers2 (‘000) • The organic growth in mobile subscribers continues 60 according to plan – targeting 125k subscribers at the end of 2020 50 - +7,567 subscribers in Q2 2018 40 Launch 30 of mobile 56,9 • A new range of products launched
Slide 11: Financial Review
FINANCIAL REVIEW Birte Strander (CFO)
Slide 12: Strong improvement in adj. net revenue YoY
Strong improvement in adj. net revenue YoY Change in adj. net revenue (NOKm) Adj. net revenue LTM (NOKm) +17% 300 +18% 1 000 250 1 800 8 29 200 600 150 968 1 005 856 891 924 242 400 100 204 200 50 0 0 Q2 17 Consumer Business NGI Q2 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 • Increase in adj. net revenue acro
Slide 13: Consistent adj. EBIT performance
Consistent adj. EBIT performance Change in adj. EBIT (NOKm) Adj. EBIT LTM (NOKm) +4% 0% 90 400 45% 80 3 (3) 3 350 40% 70 42% 41% 300 38% 35% 60 37% 36% 30% 50 250 25% 40 200 75 78 363 364 356 361 363 20% 30 150 15% 20 Adj. EBIT Adj. EBIT 100 10% margin: 37% margin: 32% 50 10 5% 0 0 0% Q2 17 Consumer
Slide 14: Adj. net revenue and adj. EBIT by segment – quarterly
Adj. net revenue and adj. EBIT by segment – quarterly Consumer segment Business segment New Growth Initiatives Adj. net revenue (NOKm) Adj. net revenue (NOKm) Adj. net revenue (NOKm) 250 +20% 250 250 200 200 200 150 150 150 +15% 223 +30% 100 185 100 100 174 146 130 50 50 82 50 54 52 70 62 4,3 2,7 9,
Slide 15: Drop in net working capital from last quarter
Drop in net working capital from last quarter Net working capital (NOKm) • Net working capital (NWC) significantly lower than last 1 200 quarter, as volume seasonally decreases • Effects from last quarter normalise (quarter-end during Easter public holidays and disposal of 1 000 2017 el-certificates
Slide 16: NIBD - from net debt to net cash
NIBD - from net debt to net cash Change in net debt Q-o-Q (NOKm) 400 300 OpFCF1 after tax, before change in NWC: NOK 43m 200 331 100 (574) - (11) (43) (112) 35 (100) 6 28 254 (200) (300) Net debt Change in Net cash Other 2 EBITDA adj. CAPEX ex. Payments to Tax Net debt 31.03.18 NWC outflow M&A obtai
Slide 17: Outlook
Qn OUTLOOK Rolf Barmen ((e=e)) Fjordkraft Mer for pengene
Slide 18: Outlook
Outlook • Market development: Elspot prices are expected to remain at a high level throughout the year1, as the hydrology is well below normal2 • Gross revenue expected at a higher than normal level • High elspot prices are a trigger for churn, which in turn fuels consolidation • Increased awareness
Slide 19: Fjordkraft
Fjordkraft Mer for pengene
Slide 20: Appendix
Appendix — ler for pengene
Slide 21: Depreciation profile of the TrønderEnergi Marked acquisition
Depreciation profile of the TrønderEnergi Marked acquisition NOK in millions 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Annual depreciation 30,8 32,8 20,7 12,0 7,3 4,9 3,4 2,3 1,6 1,1 0,7 0,5 0,3 0,2 0,2 0,1 0,1 0,1 0,0 0,0 0,0 Accumulate
Slide 22: Profit and loss account
PROFIT AND LOSS ACCOUNT Summary reported financials NOK million Q2 2018 Q2 2017 ∆ YoY Operating income 1 297,3 892,4 404,9 Cost of sales -1 048,6 -688,2 -360,5 Net revenues 248,7 204,3 44,4 Personnel expenses -40,7 -31,1 -9,6 Other operating expenses -95,4 -88,2 -7,2 Operating expenses -136,1 -119,2
Slide 23: EBIT adjustments
EBIT adjustments The following adjustments are made to the reported EBIT, in order to give a better representation of underlying performance: 1) Estimate deviations from previous years: A large proportion of the Group's final settlement of sales and distribution of electricity is made after the Grou
Slide 24: Adjusted EBIT reconciliation
ADJUSTED EBIT reconciliation NOK in thousands Q2 2018 Q2 2017 Adjusted operating profit (before unallocated and estimate deviations) 78 042 75 119 Adjustment: (Positive)/negative estimate deviations previous year 1) 2 592 - Other gains & losses 2) 2 011 -2 061 Non-recurring 3) -1 629 -14 826 Depreci
Slide 25: Balance sheet
BALANCE SHEET Summary reported financials NOK million Q2 18 Q2 17 Q4 17 Intangible assets 198,8 73,9 82,1 PP&E 4,2 3,7 3,6 Goodwill 150,9 - - Financial assets 17,2 14,6 14,2 Other non-current assets 154,0 120,1 137,5 Total non-current assets 525,2 212,2 237,4 Trade receivables 1 054,7 970,3 1 364,5
Slide 26: Cash flow
CASH FLOW Summary reported financials NOK million Q2 2018 Q2 2017 ∆ YoY EBITDA 114,6 83,0 31,7 - Other non-cash adjustments -8,1 -8,1 -0,0 Change in fair value of financial instruments -2,0 2,1 -4,1 Changes in working capital, etc. 598,0 16,4 581,6 Cash from operating activities 702,5 93,4 609,2 - I
Slide 27: Financial targets
Financial targets1 ▪ Targeting mid-single digit net revenue growth over the coming years on an organic basis Group ▪ Ambition to act as a consolidator in a fragmented market ▪ Focus on building on Fjordkraft’s strong brand and customer relationships to develop adjacent services and businesses ▪ Toug
Slide 28: 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
Slide 29: Fjordkraft's Investor Relations
For more information: Fjordkraft’s Investor Relations Morten A. W. Opdal +47 970 62 526 morten.opdal@fjordkraft.no