Soltech Energy Sweden AB (publ) quarterly report for the period July-September 2024

CEO comment:

In Sweden, we see how the challenges of an undersized electricity grid are becoming increasingly apparent, with effect problems and higher grid tariffs as a result. This is something that contributes to strengthen our offering in energy storage. In these deals, our width and expertise are crucial, and I am proud of our ability to both deliver technically advanced overall solutions and carry out large-scale projects.

It is gratifying that in the quarter, despite challenging market conditions, we see a positive development in the demand in the solar business segment in Sweden compared to the second quarter of the year.

Through a continued strong focus on energy solutions, renovation and repair work, maintenance and service, we have, despite a weak construction industry, maintained relatively stable volumes in the quarter.

Despite the market challenges, I am positive about the future, where solar energy and Soltech's solutions to the energy transition create great opportunities over time. Upcoming EU requirements for solar and increased charging infrastructure are also expected to have a long-term positive impact on the solar industry. At the beginning of the third quarter, the Swedish Tax Agency also changed its previous interpretation and now approves subsidies for home batteries, which support both households' energy needs and the power grid.

During the third quarter, uncertainty remained about the changed conditions for solar energy in the Dutch market, which means, among other things, that an additional fee is charged by some network owners for solar energy fed into the electricity grid. In Spain, lengthy permit processes have meant that projects during the period have been delayed.

The work of continuously sharpening our processes and streamlining our organization and offering continues, while we have a strong focus on costs. During the quarter, we adapted both the organization and the offering to current market conditions, and we have both merged operations and implemented organizational downsizing. However, our cost savings have not yet had full effect in the quarter. We are continuously working to streamline operations and processes through, among other things, increased collaboration and knowledge transfer between the companies in order to better benefit from our breadth.

With a focus on quality and technology, we sharpen our overall offerings and our technologically advanced solutions contribute to improved profitability both for ourselves and for our customers. We also see that our customers are increasingly demanding a long-term partner that offers just that. With our breadth, expertise and focus on offering complete solutions, we are in a strong position to meet that demand.

An example of this is the development of our concept for the consumer market, Soltech Home, which was launched at the beginning of the fourth quarter. The solution for Soltech Home offers a complete solution that combines solar, electric car charging and energy storage in combination with support services, power optimization, electricity subscriptions, etc. All gathered in a common platform (Soltech Home App) that is optimized with the support of AI. This enables the customer to get maximum value from their investment and the solution via Soltech Home.

In terms of large-scale projects, the development of the project portfolio consisting of large-scale solar parks and battery projects has progressed. During the quarter, the Ramsjöholm solar park, of 11 MW, was commissioned and in line with the strategy, the solar park was divested at the beginning of November.

During the autumn, I have visited many of our companies and a number of successful customer projects. I feel very proud of how our entrepreneurs and employees solve our customers' challenges on a daily basis in all our technical areas: roofing, electrical engineering, façade and solar. Our broad business base in several industries and customer segments creates both new business opportunities and stability. Our decentralized operations also allow us to adapt to regional market conditions, and make quick business decisions close to our customers.

In the short term, the market remains challenging. We are a long-term full-service supplier with market-leading expertise and a stable and well-diversified business base. This platform will be valuable when the green transition is gaining momentum again.

Patrik Hahne, CEO

QUARTER 3: 1 JULY – 30 SEPTEMBER

• Net sales amounted to SEK 608.3 (741.0) million
• The Group's organic growth amounted to -18% (38%)
• EBITDA amounted to SEK 86.1 (32.8) million. EBITDA margin was 14.2% (4.4%)
• EBITA amounted to SEK 70.4 (18.9) million. EBITA margin amounted to 11.6% (2.6%)
• Profit after tax for the period in the quarter amounted to SEK -34.6 (-1.3) million
• Cash flow from operating activities amounted to SEK -73.1 (-100.5) million. Cash flow for the period in the quarter amounted to SEK -81.9 (-114.3) million
• Earnings per share before and after dilution amounted to SEK -0.26 (-0.01)

INTERIM PERIOD: 1 JANUARY – 30 SEPTEMBER

• Net sales amounted to SEK 1,741.6 (2,163.8) million
• The Group's organic growth amounted to -20% (41%)
• EBITDA amounted to SEK 135.6 (71.8) million. EBITDA margin was 7.8% (3.3%)
• EBITA amounted to SEK 89.6 (34.1) million. EBITA margin was 5.1% (1.6%)
• Profit after tax for the period amounted to SEK -60.6 (-45.6) million
• Cash flow from operating activities amounted to SEK -9.1 (-100.2) million. Cash flow for the period amounted to SEK -105.0 (-113.3) million
• Earnings per share before and after dilution amounted to SEK -0.46 (-0.34)

SIGNIFICANT EVENTS DURING THE QUARTER

• Soltech commissioned Solpark Ramsjöholm of about 140,000 sqm. The installed capacity is 11 MW and the solar panels are expected to produce 11 GWh of electricity annually, which corresponds to the annual household electricity consumption of approximately 2,200 houses

SIGNIFICANT EVENTS AFTER THE PERIOD

• Soltech Energy launched the Soltech Home concept, solar energy solutions that enable optimization of energy production, energy use and reduced energy costs for private individuals and farmers

• The Soltech company E-Mobility has developed and installed Stockholm's first mobile fast charger for electric boats. The charger has an output of 200 kW

• Soltech has divested Solpark Ramsjöholm of 11 MW to Alight. Operation and maintenance will be managed by Soltech in the future through an operation and maintenance agreement

The interim report and other financial reports are available at: https://soltechenergy.com/en/investors/financial-reports-calendar/