DJ Waga Energy: Strong business growth in 2022 and positive outlook for 2023
Waga Energy Waga Energy: Strong business growth in 2022 and positive outlook for 2023 26-Apr-2023 / 21:45 CET/CEST Dissemination of a French Regulatory News, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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2022 full-year results
Strong business growth in 2022
Waga Energy achieved a strong performance in 2022 amid a volatile geopolitical and economic environment. The year was marked by upsizing, the adaptation of proprietary technology to international markets, team structuring to drive development, and operational excellence.
-- Consolidated revenue up sharply (56%) to EUR19.2m
-- 216 GWh of Renewable Natural Gas (RNG) injected into the grid (up 49%)
-- 35,700 tons of CO2 equivalent avoided[1]
-- Seven new contracts signed, bringing to 29 the number of WAGABOX® projects undertaken at the end of 2022,representing a total installed capacity of over 1 TWh/year
-- EUR91.7m in cash and cash equivalents versus financial debt of EUR52.6m
Positive outlook for 2023
Waga Energy is driven by the sharp acceleration in global demand for Renewable Natural Gas (RNG) and by the key challenge of reducing methane emissions. Underpinned by proven technology and recognized know-how, the Group is establishing itself as a key player in the production of RNG at landfills.
-- 123 projects under development, mainly abroad
-- Over 1.5 TWh of installed capacity under exclusive negotiations in North America
-- First upward revisions (up 60%) of the selling price of RNG produced by WAGABOX® units in operation orunder construction
-- Eight commissionings planned for 2023 with an installed capacity of 800 GWh/year by the end of the year
Waga Energy CEO Mathieu Lefebvre said:
"The substantial and lasting increase in the commercial value of Renewable Natural Gas in the wake of the 2022 energy crisis provides Waga Energy with an opportunity to accelerate the rollout of its solution in support of the energy transition. Thanks to the structuring and organizational work carried out by our teams in recent months, the Group is now ideally placed to become a world leader in landfill gas upgrading into Renewable Natural Gas. 2023 will be marked by the commissioning of the first international units. The current climate emergency has strengthened our determination to make a robust and rapid contribution to reducing greenhouse gas emissions."
Waga Energy (Euronext Paris: FR0012532810, EPA: WAGA), a specialist in the production of Renewable Natural Gas (RNG) from landfill gas, today reports its results for the fiscal year ended December 31, 2022, as approved by the company's Board of Directors on April 25, 2023.
Waga Energy posted consolidated revenue of EUR19.2 million in 2022, up 56% versus 2021. During the year, the Group actively pursued the implementation of the roadmap presented at the time of the October 2021 IPO: structuring of the organization, geographic expansion, and shift towards larger-capacity WAGABOX® projects. The resources deployed to support growth had an impact on consolidated net income (-EUR9.7 million), without however affecting the financial capacities of the Group, which closed the year with EUR91.7 million in cash and cash equivalents.
Consolidated financial statement
EURm 2022 2021 % change Revenue 19.2 12.3 +56% Operating expenses (22.4) (12.1) +85% (excl. depr./amort./prov. & IFRS 2 expenses) EBITDA* (3.2) 0.2 IFRS 2 expenses (share-based payment) (2.2) (1.4) +64% Depreciation, amortization and provisions (2.7) (1.8) +50% Recurring operating income (loss) (8.2) (3.0) Non-recurring operating income and expenses 0.0 (1.3) -103% Operating income (loss) (8.1) (4.2) Cost of financial debt (1.2) (3.2) Consolidated net income (loss) (9.7) (7.7) Net income (loss) (Group share) (10.1) (8.1) Capex (40.9) (13.1) +213% Cash and cash equivalents (Dec. 31) 91.7 122.9 -25% * EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) is an indicator of operating performance, defined as operating income before non-recurring items restated for net depreciation and amortization on property, plant and equipment, intangible assets, and provisions, as well as expenses related to share-based payments (IFRS 2). Since the fiscal year ended December 31, 2022, the Group has changed the definition of this indicator by restating it for share-based payment expenses, which do not reflect the Group's recurring operating performance and have no direct cash impact.
Strong growth in Renewable Natural Gas (RNG) production and revenue
Out of consolidated revenue of EUR19.2 million, 79% was generated from sales of RNG and purification services invoiced to landfill operators. The 14 WAGABOX® units in operation as of December 31, 2022 injected 216 GWh of RNG into gas grids (up 49%), thanks to average uptime of over 95%[2] and the successful commissioning of four new units, including one large-capacity unit producing five times more than the previous ones, a major asset in addressing international markets.
Revenue also includes percentage-of-completion revenue recognized on the sale of two cryogenic distillation modules to Air Liquide in the United States, and a WAGABOX® unit to the Capital Regional District to equip the Hartland landfill in Vancouver (Canada). The Canada sale represents a total amount of CAD 30 million, which will be recognized as revenue on a percentage of completion basis in line with progress on construction of the unit, due to be commissioned in the second half of 2024.
The Group currently estimates annual contractual and recurring revenue based on signed projects and projects in operation at around EUR46 million, compared to EUR40 million a year ago.[3]
As of December 31, 2022, the Group operated 14 WAGABOX® units in France, offering an installed capacity of 415 GWh per year, while 15 more units are under construction, representing an additional installed capacity of 650 GWh per year. Once operational, the 29 units will offer a total installed capacity of over 1 TWh per year.
2022 2021
Units in operation 14 10
Installed capacity (GWh/year) 415 220
Units under construction 15 12
Installed capacity (GWh/year) 650 590
Total installed capacity (GWh/year) 1,065 810
EBITDA impacted by Group structuring
In 2022 in line with its strategic plan, Waga Energy worked on structuring its organization in order to accelerate growth in France and abroad. As a result, EBITDA fell from +EUR0.2 million in 2021 to
-EUR3.2 million, mainly reflecting business development initiatives in the United States.
Tripling of capital expenditure
Capital expenditure (capex) tripled to EUR41 million, driven by the Group's international expansion and the rollout of larger units. Nearly half of Group capex was assigned to the construction of three units in Spain, Canada and the United States, which will provide a combined installed capacity of 260 GWh per year.
The Group has also invested in a new headquarters, which is set to become an international center of expertise in the fields of RNG, cryogenics and renewable gases.
Robust financial capacity, with EUR91.7 million in cash and cash equivalents
In 2022, the Group continued to finance its business under favorable conditions, enabling it to secure long-term debt while reducing the average cost of debt. The Group drew EUR3 million and EUR4.9 million respectively under loans granted by Bpifrance and Canadian bank Caisse Desjardins, concluded non-recourse financing in the amount of EUR23 million with CIC and Crédit Mutuel Arkea, and obtained an EUR8 million loan from its longstanding bank partners to finance the purchase of the new head office and related works.
Taking into account cash flows related to investments (EUR37 million outflow net of subsidies), operations (EUR7 million outflow) and debt (EUR13 million inflow), the net change in cash was a EUR31 million outflow.
As of December 31, 2022, the Group posted equity of EUR112 million, cash and cash equivalents of EUR91.7 million and financial debt of EUR52.6 million. This puts the Group in a strong position to continue financing its growth.
Confirmation of 2026 targets
The Group benefited from the dramatic rise in the commercial value of RNG on all markets, as evidenced by a 60% increase in the production sale price for its first Spanish unit. Other RNG sale agreements are currently under renegotiation.
At time of release, Waga Energy has entered into exclusive negotiations on several projects in North America, representing a total installed capacity of over 1.5 TWh per year.
In this propitious environment, Waga Energy forecasts another year of strong growth in 2023 and confirms its 2026 targets.
Increase in amount allocated to liquidity contract
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