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Voltalia SA
Voltalia SA: record 2018 results and future growth secured
18-March-2019 / 20:22 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
· Record set of results leading to Group net profit multiplied by 15 at
EUR8.5 million, validating two strategic pillars:
· synergies and profitability generated by Services, which achieve
positive EBITDA
· focus on non-subsidized markets brings additional value creation again
in 2018
· 1 GW target by 2020 secured: over EUR4 billion of future revenues
secured by those long-term power sale contracts
· Post-2020 growth prospects supported by a hefty (6.2 GW) and
fast-growing (+81% vs. 2017), pipeline of future projects, with further
acceleration in solar and in new geographies
Voltalia (Euronext Paris, ISIN code: FR0011995588), an international player
in renewable energies, announces today its results for the 2018 fiscal year.
"In 2018, we enjoyed a record financial performance, validating two of our
key strategic differentiating factors. First, our relaunch efforts in
Services enable profitability gain s, proving they are synergetic with our
power production activity. Second, being mostly active in non-subsidized
markets, we were able again to seize value-enhancing opportunities,
translating into materially higher selling prices in Brazil. Another major
achievement in 2018 was to secure our 1 GW objective and we have already 387
MW currently under construction. Finally, our investment in project
development is paying off: our pipeline of future projects reaches 6.2 GW
(+81% in 2018) and is a reservoir for growth of both our Energy Sales and
Services activities", declares Sébastien Clerc, Chief Executive Officer of
Voltalia.
Record financial performance in 2018
Change
In EUR million FY 2018 FY 2017 at actual at constant
rates FX rates
Revenues 180.7 181.2[1] -0% +13%
EBITDA 76.2 71.6 +6% +29%
EBITDA margin 42% 40% +2.7pts +5.5pts
Net profit (Group share) 8.5 0.6 x15 x23
In 2018, revenues are in line with 2017's performance, as solid growth in
operational business activity fully offsets the 16% drop in the Brazilian
real against the euro. 2018 EBITDA is up by 29% at constant exchange rates,
thanks to a good contribution of Services, high Energy Sales pricing and
good cost control overall. Increased EBITDA and EBITDA margin (+ 5.5 points)
contributed to a sharp rebound in Group net profit, reaching an all-time
high of EUR8.5 million.
Business review
Energy sales: improved EBITDA margin
Change
In EUR million FY 2018 FY 2017 at actual at constant
before rates FX rates
eliminations
of services
provided
internally
Revenues 131.7 145.6 -10% +5%
EBITDA 87.9 94.2 -7% +8%
EBITDA margin 67% 65% +2.0pts +2.1pts
Production (in 2 081 2 123 -2% -2%
GWh)
Installed 524 508 +3% +3%
capacity at
the end of the
period (in MW)
2018 revenues increase by 5% at constant exchange rates and EBITDA grows by
8% compared with 2017, as high pricing over the year and good cost control
more than offset a 2% decline in production:
· In Brazil, the renewal of the contract suspension strategy initiated in
2017 results in another year of excellent pricing, more than offsetting
lower production (- 3%) due to lower wind and despite higher availability
rates.
· Growth in other countries is mainly attributable to higher production
(+15%) driven by France and the commissioning of new solar plants.
Good cost control and lower fees associated with contract suspensions have a
positive impact on the EBITDA margin, increasing by 2.1 points at constant
exchange rates.
Services: doubling of revenues and achieving for the first time positive
EBITDA (6% margin)
Change
In EUR million FY 2018 FY 2017 at actual at constant
before eliminations of rates FX rates
services provided
internally
Revenues 117.2 59.2 x2.0 x2.1
EBITDA 6.7 (9.8) n/a n/a
EBITDA margin 6% (17)% n/a n/a
Services revenues are multiplied by 2 compared with 2017, driving a sharp
rebound in profitability.
· Development, Construction & Procurement revenues and EBITDA record a
major improvement, driven by i) the sale of ready-to-build projects to
Actis, more than compensating higher prospection spending linked to
increased development effort and ii) a return to profitability of the
Construction & Procurement business, in line with intense activity for
Voltalia's own plants.
· Operation & Maintenance revenues decrease, reflecting the end of
contracts, partly mitigated at EBITDA level by extra services provided to
existing third-party clients.
Sustained efforts in the relaunch of the commercial activity in Services are
beginning to pay off, with a positive EBITDA margin of 6%.
Two differentiating factors creating value
A power producer and a service provider
Since 2016 and its accelerated development in Services, Voltalia operates a
differentiating business model combining Power production and Services
provision.
Development is the cornerstone of that strategy, with material investments
in prospection and development in 2017 and 2018, fuelling its pipeline of
projects in development. It reaches 6.2 GW at the end of 2018: x3.4 since
the launch of the new strategy in Services with the acquisition of Martifer
Solar in 2016. By developing -at a low marginal cost- more projects,
Voltalia is able to be selective, keeping projects that best fit its
strategy and selling others to third-party clients together with bundled
Procurement / Construction / Operation & Maintenance services. In 2018 the
Group successfully sold 252 MW of ready-to-build projects to Actis within
Voltalia's Serra Branca cluster, as part of a partnership for up to 500 MW
in total.
Construction, Operation & Maintenance and the associated expertise in 5
technologies (wind, solar, hydro, biomass and storage facilities) are key to
Voltalia's value proposition in its Power production business. Economies of
scale are unlocked by the dual source of activity: internal projects and
third-party projects. In 2018, working on larger construction volumes
enabled to secure a competitive framework agreement with a leading
photovoltaic panel manufacturer. Working for third-party clients is also a
way to explore new countries and technologies: construction contracts were
signed in various new African and European countries and a battery storage
unit was built in the UK, all strengthening Voltalia's geographical and
technological expertise.
Green power producer generating electricity at a competitive price
Voltalia has a unique profile with 85% of its installed based producing
electricity at a competitive price. With this differentiating strategic
focus on non-subsidized markets, Voltalia can seize many value-enhancing
opportunities.
They arise at all stages of the lifecycle of a plant:
· Before the long-term power sale agreement starts, Voltalia can
anticipate construction of plants and sell electricity at attractive
prices through private contracts on the free market. This anticipation is
beneficial, for example, to the VSM 1 and 2 power plants, which will be
commissioned before end 2020 while their long-term power sale contracts
will start in 2021 (64MW+64 MW), 2023 (99MW) and 2024 (64MW).
· During the long-term power sale agreement, opportunities can arise in
non-subsidized markets. For instance, the successful renewal in 2018 of
the contract suspension strategy initiated in 2017 in Brazil enabled to
sell electricity at a higher price through private short-term contracts on
the free market.
· After the end of the long-term power sale agreement, being the cheapest
source of electricity on a market will position Voltalia's plants well,
while subsidized plants may suffer from a steep drop in revenues.
Today, in the renewable energy sector, almost all long-term power sale
contracts are with utilities. In markets where renewables are competitive
compared to fossil fuels, new opportunities arise with new clients:
corporations just looking for a cheap source of electricity. In 2018,
Voltalia signed its first long-term contract with a corporate: BRF, one of
the world's largest agribusiness companies. Thanks to more than 10 years of
experience accumulated on the free market through its activity in Brazil,
Voltalia is able to offer attractive opportunities to corporate clients
across Europe, Africa and Latin America.
Other items from the P&L: record-high net profit
Change
In EUR million FY 2018 FY 2017 at actual at constant
rates FX rates
EBITDA before eliminations 94.6 84.5 +12% +31%
and corporate
EBITDA impact of (18.3) (12.9) +42% +43%
eliminations and corporate
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