Earnings call transcript: Orron Energy sees revenue growth despite market challenges in Q4 2024

Orron Energy reported a strong financial performance in Q4 2024, achieving record power generation and increased revenue despite a challenging energy market environment. The company’s stock, however, saw a decline of 5.22% following the earnings call, reflecting investor concerns over market conditions and future guidance. According to InvestingPro data, the stock is trading near its 52-week low of $0.54, with a high beta of 1.63 indicating significant market sensitivity.

Key Takeaways

• Orron Energy achieved record power generation of 287 gigawatt hours in Q4 2024.
• Full-year 2024 revenues exceeded €30 million, with Q4 EBITDA reaching €1 million.
• The company is expanding its greenfield project pipeline and ancillary services.
• Orron Energy’s stock fell 5.22% post-earnings, reflecting market uncertainties.

Company Performance

Orron Energy demonstrated resilience in Q4 2024, with record power generation and a significant increase in price per megawatt hour compared to Q3. The company generated 900 gigawatt hours of power throughout 2024 and expects this to rise to between 950 and 1,050 gigawatt hours in 2025. Despite market challenges, Orron’s diversified portfolio and strategic expansions have positioned it well for future growth.

Financial Highlights

• Revenue: Over €30 million for the full year 2024.
• EBITDA: €1 million in Q4 2024, excluding non-cash items.
• Net Debt: €65 million at year-end 2024.
• Tax Balances: Over €500 million available to offset future tax payments.

Outlook & Guidance

Orron Energy has provided a revenue guidance of €29-49 million for 2025, with EBITDA expected to range between €10-30 million. The company plans to invest around €50 million in capital expenditures and anticipates project sales in the UK and Germany. Orron is also exploring potential expansion into new geographies and technologies, aiming to capitalize on market opportunities despite current uncertainties.

Executive Commentary

CEO Daniel Fitzgerald highlighted the company’s robust project pipeline and evolving market dynamics: "We have a 40 gigawatt pipeline of greenfield projects," he stated, emphasizing Orron’s strategic focus on low-cost energy technologies such as solar and onshore wind. Fitzgerald also noted the long-term potential of Orron’s assets, saying, "Our assets have long life cash flows. They have long technical life."

Risks and Challenges

• Market Conditions: The energy market faced low and negative pricing in 2024, with ongoing uncertainties in the Nordic region.
• Regulatory Changes: Grid reforms in the UK are causing short-term uncertainty.
• Competitive Pressures: The need to maintain a low-cost base while investing in growth initiatives.
• Legal Risks: The outcome of a legal case in Sudan, expected to conclude in 2025, could impact financial results.

Orron Energy’s Q4 2024 earnings call highlighted both the company’s achievements and the challenges it faces in a rapidly evolving energy market. While the stock’s decline reflects investor caution, Orron’s strategic initiatives and strong financial position offer a foundation for future growth.

Full transcript - Orron Energy AB (ORRON) Q4 2024:

Jenny, Event Moderator, Auron Energy: And giving a strategic outlook update for the company. There will be a Q and A session at the end of the presentation. So if you’re joining us online, you have a Q and A function on the bottom of your screen. So please type your questions as we go along. We will collect them and go through them at the end.

And with that, I would like to hand over to our CEO, Daniel Fitzgerald, to kick off this Capital Markets Day.

Daniel Fitzgerald, CEO, Auron Energy: Thank you, Jenny. And good afternoon, and welcome to Auron Energy’s Capital Markets Day for 2025. I’ll be joined today by some of my colleagues. So we’ll have Jonas giving us an overview of the Nordic business. We’ll have Axel, who will run through the greenfield development projects, which I’m sure there’s a lot of interesting questions about today.

And then Espen will run us a little bit more through the financials. And we’ll spend a little bit more time today going through our Q4 results, but also looking ahead at the next year and what that looks like for us as a company as we step into 2025 and then also step beyond that into 2026 and the future. And we see a range of triggers in the company that are coming over the next twelve and twenty four months, which are really important to focus on, and we’ll explore those as we go through today. So Auron Energy, we are a renewable company. We have producing assets, development projects, repowering life extension.

We’re stepping into ancillary services, into batteries and into trading some of the volumes we produce. We’re active across the whole lifecycle of the renewable sector from the inception of projects all the way through to repowering life extension and growing them again. We have three eighty megawatts of producing assets, which is wind spread across Sweden and Finland. And that delivers long term cash flow for the company and is a key pillar of our business. Last year, we generated around 30 north of million worth of revenue from these assets.

We have a low cost base, and that really forms a foundation of our ability to grow the company and invest in greenfield projects and other opportunities with higher rates of return. We’re continuing to grow the business in the producing asset domain, and we increased production by around 5% last year through M and A. And Jonas will touch on the assets and what we’ve done over the last year. We expect to continue that as we go forward as well and continually add to the business being really selective about the assets we step into to ensure that each deal we do is accretive for our shareholders. We have a 40 gigawatt pipeline of greenfield projects.

These are early stage projects, and I’m pleased to say that the first project has reached ready to permit in The U. K. We have a range of projects in Germany that are very close to reaching ready to permit. And behind that, we have another portfolio of projects that’s coming. We’ve started our first sales process for our first project in The UK.

And so we expect this platform we’ve invested for two years into. We expect the next twelve months to start to see some of the returns coming out of that and continuing well into the future as we continue to build that pipeline. Organic growth in our view is one of the key pillars to create value long term. And we have organic growth spread across all of our countries of operation from the greenfield through to the development projects into the producing assets. And we’re always looking at ways to squeeze more value out of the assets.

We’re seeing in challenging markets like we saw last year that we’re bringing ancillary services, we’re bringing price dependent bidding and curtailment into the discussion to increase the value of the assets and increase the revenues we get out of them. When we get into life extension and later life assets, being able to extend that lifespan, repower assets, increase production, there’s a huge value in being able to do that across a broad portfolio, and Jonas will touch on that a little bit more as we go through the presentation. And finally, none of this is possible if we don’t have a strong balance sheet. If we need to touch the equity side of the business at any point in tough markets, I think that’s one of the challenges for shareholders as we step into difficult times. But Auron Energy has maintained a strong balance sheet throughout many decades of companies within the Lending Group, but also within since inception as Auron Energy.

Today, we have over million of liquidity headroom. We’re fully financed. And as we step into markets like we saw last year, the ability to move into M and A is really important for us going forwards and having the firepower to do so is a key part of the strength of this company. If we step a little bit back into 2024, looking at the highlights, we delivered power generation of just over 900 gigawatt hours last year, Remembering that we have a portfolio that should deliver around 1,000, we saw a low production due to weather impacts. And we’ve also seen some volatility in the markets and increasing levels of negative pricing, which has forced us to curtail production slightly.

So we delivered last year, notwithstanding both of those, we delivered 900 gigawatt hours and had the highest production ever as a company in Q4 of last year. That led to revenues of over million from the producing assets and an additional million from the sale of our Leichanger asset last year. So proportionate revenues million as a company. And in tough markets like last year, there’s still a lot of cash generation from the underlying business that we can use to invest and grow. That led to EBITDA of million excluding the non cash items.

We delivered in line with expenditure guidance. So we’re at the low end of our OpEx range. We delivered in line with G and A spend in terms of Sudan spend. And we had around million savings on our CapEx program due to a small amount of phasing and savings on our greenfield projects. So we are really focused on that cost base to ensure that the balance sheet remains strong and the cash generation remains strong.

The Greenfield platform is in a really exciting stage this year. We’re starting to see the first projects coming to market. End of last year, the first one point four gigawatt solar and 500 megawatt battery project in The UK reached ready to permit. We are in the midst of a sales process and we’ll see that evolve over the coming months. Germany very, very close behind.

Jonas in The Nordics added around 50 gigawatt hours worth of long term power generation, very, very accretive transactions and especially in the market conditions like we saw last year. And if we look at that investment compared to Laikanger, we sold Laikanger, which was around 100 gigawatt hours for million or just north of million. We’ve invested million to acquire half of the production of Laikanger. So the recycling of capital from Laikanger not only has it improved our balance sheet, we’re able to deploy that capital at more than double the rate of return that we sold Laikanger for. And we expect to continue to do that as we’re going forward.

Our net debt position at the end of last year was million. We have a facility of million revolving credit facility at the corporate level, which which means we have north of million of liquidity headroom. And I think that’s really important as we step into 2025 as we’re starting to look more broadly at M and A and other opportunities to continue to grow the business. Our production story has been a fantastic story since inception of the company. If you roll back your minds to the summer of twenty twenty two when we launched Azaron Energy, we had three assets and two of those were in production.

Karskroove was in the project phase still to be completed. We delivered two fifty gigawatt hours. As we look to this coming year, we expect to produce between nine hundred and ten fifty gigawatt hours of production. So a significant increase that’s through the Sleektivind acquisition, the acquisition of Cyral, many of the other brownfield M and A that we’ve completed. We have also completed the Kask Groove project at the end of twenty twenty three, and that underpins the growth of production over that period, remembering also that we’ve taken 100 gigawatt hours of Leichanger out of this business.

So as we look forward, so I think you should expect us to continue to grow in terms of producing assets M and A and you should also expect us to focus on other opportunities, slightly different geographies and slightly different opportunities to where we sit today. The Greenfield pipeline is a really exciting trigger this year for the company. We’ve been investing in this business since early twenty twenty three, so two years of investment where we had a vision at the start to create a large scale pipeline and take that all the way through to projects that have land and grid secured and look to test the market at that point in time. The pipeline is really large scale, 40 gigawatts spread mostly between Germany and The UK, with a small amount in Germany and France. Our first projects in the market, Germany very soon to follow.

And if we look beyond that over the next two years, we expect to see around four gigawatts worth of projects reaching that ready to permit milestone. And so that gives us a really nice platform of future opportunity to continue to grow the business, to continue to see additional revenue streams coming in. I think The U. K, important to note in The U. K.

That we are in the midst of a grid reform process. I think the grid in The U. K. Is heavily subscribed for new projects today. So we are in the midst of a reform both on the grid connections and also from Clean Power 02/1930.

The U. K. Government has a really strong ambition to grow the renewable end of the power generation system and reach net zero. So those two key reforms are in a consultation phase as it stands at the moment. I think investors are having to spend some time to understand what that means for projects, and we’re right in the midst of that now.

And that will impact the sales process that we have ongoing at the moment, where investors need to consider how these reforms play out through the course of the coming months. In terms of certainty, we expect that the programs that are in consultation today, we will have absolute certainty in around May of this year, at which point we can move forward with the remainder of the process to secure our connections. So Axel will touch a little bit more on the overall landscape in The U. K. But what we see with these two key reforms is it’s a short period as we go through it.

The ambition is to simplify the connections process and really reward mature projects with earlier dates. So we see opportunity in this to potentially accelerate some of the projects in The U. K. In Germany, we don’t see the same constraints around grid, and we see a much more favorable opportunity set. So this broad platform over multiple countries should generate value well into the future.

In terms of what value looks like for these assets, I think the key things that always jump out in challenging markets is the economics will always rule in the long run. The cheapest technologies, the most economic technologies, those with the highest return will always win. When we look on the left hand side of this chart, you can see the levelized cost of energy and how that has evolved from 2022 to today and then how we expect that to evolve in the future. And it’s really clear to see that solar and onshore wind and including co located solar and battery are by far the cheapest technologies we have to generate energy today. So irrespective of where the markets sit, what tariffs and support mechanisms are there, I think it’s hard to fight against the economics of the lowest cost technologies.

If we then apply the futures price or the subsidy price or feed in tariff price in The UK and Germany against the LCOE of these technologies, you can see that there’s a gap between what it costs to build and what you receive on the other side in terms of the revenues for your power generation. So The U. K. And Germany are really strong markets. They have some of the highest pricing across Europe.

And the technologies we’re focused on both in The Nordics for onshore wind, batteries and solar and then in The U. K. And Germany for solar and battery co located, they are by far the best place to be in terms of economic returns. The balance sheet is a really important part of the company. So when we look at our assets, the cash generation of our assets and the liquidity headroom as a company, you start on the left hand side of this chart looking at the free cash flow breakeven of our assets.

So if you add in all of our operating costs, G and A costs, interest costs getting down to free cash flow, our core assets will deliver free cash flow down to a megawatt hour. If we add on all of the growth in G and A and the debt levels, even at a megawatt hour, we’re generating free cash flow. We achieved in the tough markets of the last two years, we’ve achieved north of a megawatt hour on our business. So the underlying assets are strong. When we look at the cash generation and EBITDA of that, excluding, of course, The Sudan costs, we see there that revenues are quite simply 1,000 gigawatt hours times our achieved price.

So at a megawatt hour, million a year of revenues, same for 50, same for 70. Percent. So we expect free cash flow to be quite strong for the business as we go forward at reasonable prices. This excludes, of course, any growth from the greenfield projects or sales from the greenfield projects or any future M and A. And as Espen will touch on later, we have over million of liquidity headroom.

So although markets are challenging today, our assets are such long dated assets with in the order of thirty years lifespan. The underlying cash generation is strong and we have a balance sheet to support the company. We couldn’t be in a better position today, both from a market perspective and also from an opportunity set going forward. Sustainable business is really important for us and for all of the Lundin Group companies if you cast your minds back to some of the key principles across the Lundin Group. We are a renewable company, but that’s not enough in today’s day and age in terms of sustainability.

We want to be industry leading. We’ve delivered over two terawatt hours of clean carbon neutral power generation to the grid. We have 40 gigawatts of opportunities. That represents around billion of investment into clean power. We’ve had zero material incidents, zero impact on the environment in our operations.

And in our projects, we’re looking at increasing the net biodiversity as we install new projects into the system. We have strong governance. We have a very experienced board. We have a very experienced management team. And that governance framework has a strong focus on how we operate our business and the standards at which we hold ourselves to.

So sustainability really is at the core of our business. I think a few comments on the market. Markets, energy markets and especially electricity markets, these are evolving day by day and especially as we transform the energy sector. We’re seeing more renewable technology coming in. We’re seeing governments changing the power mix, whether it’s shutting down nuclear, shutting down coal, increasing solar, increasing wind.

The whole energy sector is in a very fast pace of evolution. And we’re seeing that transformation as we sell our power to grid and how we think about selling power to grid. We saw low pricing in Q3 and Q4 last year. I think a mix of high hydro balances in Sweden mixed with relatively low demand means that hydro has been producing quite hard at points when prices have been negative. We’ve seen that low demand more broadly across Europe has been impacting some of the energy systems in The Nordics.

It’s nice to see in Q1 that we’re seeing the spot pricing increasing, seeing strong pricing in The U. K. And Germany. And certainly in The Nordics, the rate of change is quite fast. As we step into ancillary services price dependent bidding, the last two years, we’ve seen more negatively priced hours in the energy markets than we have historically.

We’re reacting to that. We’re agile. So we’re now we’re one of the first companies to step into price dependent bidding, where depending on the day ahead price, we’ll choose how to bid our volumes. We’ll choose whether we want to slow down production, speed up production, whether we want to put volumes into the ancillary services markets and grid stabilization, and we’re doing that with a range of counterparties across a range of turbines. So there are so many opportunities to create value in this space, but we need to be agile as markets evolve and

Axel, Greenfield Development Lead, Auron Energy: as the sector transforms. If we look longer term,

Daniel Fitzgerald, CEO, Auron Energy: though, I think lowest levelized cost of energy is solar and wind at around $30.35 euros a megawatt hour. We’re not achieving prices last year. We achieved prices of €34 a megawatt hour as a company. We do not have pricing at that level. If that stays long term, we do not have the ability to invest in any new power generation in The Nordics.

If GDP growth and energy use increases and that link is very, very strong, as we see GDP continuing, we see energy use increasing. If we are unable to see higher pricing, we will see no new supply coming in. And we know what that means in cyclical markets. We’ve made very few investment decisions in wind in The Nordics. We’ve shut down a lot of offshore wind.

We’ve shut down a lot of the large supply through either economics or government intervention. So our view longer term is we have to see pricing pick up to a more reasonable level in the fullness of time. And looking forward then to 2025, before I pass over to Jonas to speak about The Nordics, I’d say 2025 looks largely the same as 2024 in terms of our guidance. We expect production of between nine hundred and ten fifty gigawatt hours, and that takes into account the variance in weather conditions and also takes a provision for some of the negatively priced hours that we saw in 2024. It also takes into account our recent acquisitions.

So we expect to be in that range based on the seasonality and variability of production. Our operating costs slightly higher than 2024, and that includes the impact of the acquisitions that we’ve made throughout the year. G and A and Sudan legal costs very much in line with 2024. So on the cost side, we’re very, very close to expect to be in 2025 is very close to 2024. On the Sudan case, this is our last year of very high costs.

So million, this will decrease significantly next year as we enter the final stages of the case. I think with every day and every phase of the case that continues, our view on the outcome gets even stronger. There is absolutely nothing in this case that has been put forward that suggests that the two individuals who have been accused of the crimes, there’s no evidence that supports the prosecutors view that there will be a conviction in this case. And the acquittal of those two individuals means the end of the Sudan case in our minds. So we expect next year is around half the cost of this year and then decreasing going forward.

So really important to see the end of that case, both for ourselves, for the individuals and our shareholders and stakeholders. Our capital program for next year focuses mainly on the greenfield pipeline. So we expect to spend around million of CapEx, of which a large portion is focused towards the Greenfield Europe spend. None of this accounts for any revenues that come in from the sales processes. So this guidance assumes that we don’t sell anything from the platform and we expect to sell both in The U.

K. And Germany. We expect to see revenues coming in this year from those two sides of the business, which then reduces the need for capital into the program going forward. And so I’ll pass over to Jonas to give us a bit more flavor on the Nordics, and then I’ll pick up at the end. Thank you.

Thank you.

Jonas, Nordic Business Lead, Auron Energy: I will start with a bit of a personal reflection. I joined the renewable industry at the age of 23, which is that was back in 1996. And this year 2024 is one of the more or most challenging years I’ve seen or experienced in terms of market conditions. Having said that, on the other hand, it is potentially also the year with the best organizational performance I have experienced. So I’m quite happy with what we have actually done during 2024.

We have delivered on operations and asset optimization. We have delivered on M and A and consolidation. And we have matured the greenfield portfolio to enable future investments in production growth. The operational assets, cash generating, that’s the foundation of the business. The cash we generate from operational assets, we reinvest in M and A and greenfield development.

M and A, brownfield M and A gives us more assets, generates more cash flow. And the greenfield what we invest in the greenfield pipeline, we in return, we get investment opportunities for future growth. We also get as an alternative or combined divestment opportunities. And in 2024, we have optimized operations. We have added another 50 gigawatt hours through brownfield M and A and we have developed the greenfield portfolio.

The greenfield portfolio, named as the cherry on top internally. Our assets are high quality assets, top tier suppliers. The well I mean, the well diversified portfolio reduces technical risk, it reduces risk with variations in weather and price variations in between the various price regions. And in ’twenty, I mean, we have a long term annual production capacity of 1,000 gigawatt hours. We delivered reasonable or good 97% availability in 2024.

We have an average asset life of eight years. The diversified portfolio includes 100% owned projects, but also partially owned where we have external owners. And the beauty of that is actually that that adds additional investment opportunities in terms of potential consolidation going forward. We tend to be more long term than the majority of the part owners we see in our wind farms. Karskru is 100% owned.

So where we see the largest consolidation potential is the Neasuden hub on Gotland and the rest of Sweden projects, where it is, of course, that adds up to a quite large number of projects in the rest of Sweden box. And during 2024, we have mainly consolidated some 25 gigawatt hours out of the Neassoden hub. In total, we have more than 500 gigawatt hours of consolidation portfolio in the Neasuden hub and rest of Sweden. On top of that, MLK is a we own MLK fifty percent together with another partner. Daniel touched upon power generation.

We have a steady production growth since inception. The ’24 outcome equals 1,000 gigawatt hours if we take into account the weather impact and voluntary price curtailment. We also see the 25 estimate including it gives room for variations in weather and price curtailment. With an eternal perspective on assets, we aim to operate them forever. It means that we actively have to prolong land leases, renew permits and that’s a daily time consuming work that we focus on every day to make sure that we actually can operate them as long as possible, if not forever.

We have been an early mover when it comes to implementation of ancillary services and voluntary curtailment. Ancillary services is actually supporting the TSO to keep frequency in the grid in the net network. And voluntary curtailment, as Dan mentioned, is to avoid producing when the hours when the electricity price is profitable. To combine those two things is quite complex and that is also something we have been an early mover on the separate ancillary services and voluntary curtailment, but especially to combine them is quite complex. When it comes to price dependent bidding and voluntary curtailment, we have it today on assets with various makes and a, I would say, 10 different models as well.

So we have the ability to, if we acquire things, we also have the ability to potentially increase value through implementation of these services. Operational excellence, life extension and repowering, these are focus areas for us. When we then come to acquisitions, we evaluate potential investment opportunities and judge if we can increase operational efficiency, if we can do apply life extensions, if we can repower. So that gives us more, I would say, more opportunities when it comes to invest brownfield investment and M and A. And as mentioned, 25 gigawatt hours out of the 50 that we have added for 2024 is from consolidation.

And we have invested in other, Daniel mentioned, Ceral, which was a company we acquired in 2022. And we have done Ceral like investments in a company called Sletonswind. And Sletons is also an example on where we add a further growth potential. We buy a stake and it gives us the opportunity to stepwise continue to grow. I mean, compared to the European greenfield business that Axel will present soon, The Nordic business is more focused on actually creating future investment opportunities for future growth and or divestment.

And we have a pipeline of one gigawatt, mature during the year in terms of, I mean, land grid and permitting work and also preparations for the first wind measurement campaign actually to measure wind. And as you can see, the technology breakdown is quite even between wind, PV solar and batteries, BESS. The greenfield portfolio also quite diversified in terms of projects, geography, price areas, technologies, also that we have stand alone projects and co located projects. So this is Nordic greenfield development at a glance from early stage projects ready to to ready to build projects. So we have shovel ready best projects just awaiting acceptable market conditions through to early stage ones.

And in house development enables low CapEx when it comes to investments. We if we invest ourselves, we don’t have to pay development premiums. Of course, if the market is strong, we could as well divest projects out of this portfolio, also from the Nordic portfolio. This selection of projects, of Nordic projects, would allow for a for us to actually double the power production. This example project could generate potentially another 1,000 gigawatt hours, a bit more long term, of course.

And on top of that, we have another 500 megawatts in the portfolio for further investments or divestments. Excellent.

Axel, Greenfield Development Lead, Auron Energy: Thank you, Jonas. We established our European greenfield development platform platform back in 2023. At that point in time, we had a clear vision on what we wanted to achieve, and we had a plan on how to get there. Fast forward to 2025, we see that we’re beginning to turn that vision into reality. As part of that, we have successfully established a large scale pipeline that we touched upon earlier during this presentation.

And we have 10 projects that are currently being matured towards RTP. As part of that, we’ve also secured over 5,000 acres of land, and we have achieved RTP for our first large scale U. K. Solar and battery project. In addition to that, we have 150 megawatts in Germany, where we’re waiting for the municipality approval to reach RTP.

Moving on to The UK. We’ve initiated the sales process for our East Midlands project. It is a large scale project with solar capacity of 1.4 gigawatt peak and 500 megawatt of battery capacity. We have a grid connection for this project of one gigawatt of export capacity and 500 megawatt of import capacity. We’ve secured binding land agreements of 3,200 acres.

And thanks to the vast amount of land we’ve secured, we’ve been able to achieve a project that is larger than our initial grid connection capacity. Dan mentioned the ongoing reforms, the grid connection reform and the Clean Power 2,030 Action (WA:ACT) Plan. Together, we see that they’ve introduced some short term uncertainty. However, we see that the U. K.

Government is committed to renewables build out. And as such, we see that we have a strong outlook for our projects going forward. Looking at some of the development highlights. We have three main categories. We have an attractive location, an optimized layout and reduced development and the construction costs.

Starting with the location. The project is located in an area where we have a flat topography. We have good grid infrastructure and sparse population. And this is exactly what you want for a large scale project, both during the development stage, the construction stage and beyond. On the layout side, I mentioned the large amount of land that we’ve secured.

And thanks to that, we haven’t had to optimize for capacity per acre. Instead, we’ve been able to choose the lowest cost traditional fixed tilt solar technology. And finally, on the reduced development and construction costs, we’ve had a very successful land campaign on this project. It’s not uncommon for projects of this size that you will see the project spread over a handful or even more parcels. That means that you then need to connect these various parcels either to each other or you do separate grid connection points from the various parcels to the grid connection points.

For us, we have these two large adjacent areas, meaning that we only need one interconnection point, and we can then connect the full project through one grid connection point. Looking at the key deliverables for this project, you will notice a lot of green ticks on this slide, and that’s because we have finalized the land, the grid and the pre permit work stream to achieve RTP. On the land side, the key deliverable is to sign the binding land agreements. But before we do so, there’s a range of actions. Most importantly, I would say, is the initial constraints mapping where we look to ensure that the land we will later secure can be successfully developed.

Moving on to the grid side. As most of you know, we started our U. K. Business by first securing grid. But even before we did that, we looked at hundreds of grid connection locations, ranking the various locations based on a range of criteria, including irradiation, land availability and the grid constraints.

And then the East Midlands project was one of the higher ranking locations where we ended up submitting a grid connection application. With land and grid secured, we’ll start the permit work stream or the pre permit work stream. So as I mentioned on the land side, we’ve already done some of the constraints mapping and looked at or ensured that the land we secure can actually be successfully developed. But now we go into a bit more detail, and we prepare a planning and site appraisal report. The outcome of that report was positive showing that the project is well positioned to obtain a permit.

As part of that, we also completed an agricultural land classification study. So in The U. K, all agricultural land is classified depending on the grade of the soil. Higher grade soil is typically then reserved for agricultural activities. So we have taken on-site soil samples across our land area and analyze those.

And the result of that study was that the soil quality generally is of lower grade, again, positive from a permitting perspective. Finally, we have completed the grid route feasibility study to look at both the ability to connect the project to the grid, but also the cost of doing so. That study showed that we can connect the project at a very reasonable cost. So quickly touching up on next steps for this project. We’ve been talking about this ongoing grid reform in The U.

K. And as part of that reform, we need to apply for a revised connection offer. That application window is expected to open during the second quarter of twenty twenty five, and we are ready to submit that application once the window opens. We then expect feedback during the second half of twenty twenty five. And here we see again that our grid first strategy is beneficial, where two projects are at the same development stage, for example, two projects at RTP, priority will be given to the project that first applied for grid.

On the permit side, the next step is to prepare and submit the actual permit application, and that will then take the project from RTP towards RTP. Moving on to Germany. We’re active across multiple technologies with three core pillars. We have agricultural solar projects where farming activities can continue in parallel with our solar projects. This has numerous benefits.

It makes previously unavailable land available for development. So I spoke about the high grade land under The U. K. Section before, and it’s similar in Germany where certain land is protected unless you keep the farming activities going. We also see that the dual use of land increases local acceptability because you’re not replacing farmland with a solar farm.

You’re retaining the farming business. The second pillar, traditional solar, I don’t think I need to spend any time on. And finally, we have battery energy storage systems, which is currently a very hot market in Germany in part due to the high renewable penetration. Across these three pillars, we expect five projects to reach RTP during 2025 and 2026. Our first two German projects are awaiting final municipality approval.

So in Germany, you need an approval to reach the RTP milestone or auf Stellungsperchloss, which is the first decision of the municipality. On the back of this, we also have potential battery opportunities where we have secured the land and applied for grid and we’re awaiting grid feedback. Generally speaking, we don’t see the same grid constraints in Germany as we’ve seen in The U. K. But when it comes to battery connections, the situation is at least more comparable with longer lead times to connect to the grid.

Looking a bit more in detail at our first two projects, we have finalized all the development work on these two projects. For our first project, we have received the go ahead from the municipality to submit the actual RTP application, and we’re expecting that project to reach RTP during the first half of this year. Both these projects are agricultural solar projects, so the first category we looked at at the previous slide. And we have 100% of land secured for both these sites. Each of the projects is on a single integrated site.

We’ve touched upon the benefits of that during this Midland project. And we’ve done a range of permitting and environmental studies with favorable results. And that combined with the limited visual impact, as you will see from the renderings on the right hand side, gives us high project acceptability. Finally, on the grid side, we have positive grid feedback received for both projects. And in Germany, you can’t secure the grid until you reach the ready to permit application stage.

So I spent most of this presentation on 2025, and we see that we now have a maturing development platform that will start delivering value to us and more importantly to our shareholders. As part of this, we have the first project successfully having reached RTP. We have initiated the first sales process, and we will have more sales processes following this initial process. And then we expect a range of projects to reach RTP during this year and next year. Looking ahead towards 2026 and beyond, we see that we are able to build on this strong foundation and transition towards long term value creation.

We will achieve that through progressing and increasing number of projects towards key development milestones. We will scale up the business for future success, and we will keep our opportunistic approach to value creation to explore any opportunity to maximize the value in this business. With that, I’ll hand over to Espen for a financial update. Thank you.

Espen, CFO, Auron Energy: Thanks, Aksel. Good afternoon, everyone. We’ll go through the we’ll take a closer look at our Q4 results, but we’ll also look at how our planned 2025 activity will translate into financial outlook, both for results and liquidity. Before we start, I just would like to say that I hope going through the slides that you will see so trying to communicate that the company is in great shape financially. As you know, we have a very ideal combination of long term cash flow generation from high quality assets that will produce cash flow for decades to come, coupled with very material upside from our greenfield portfolio and all this being backed by a strong balance sheet.

So just starting off with some details on our Q4 results. Before we go more into the outlook later on. We did achieve record high power generation in Q4, ’2 ’80 ’7 gigawatt hours, despite voluntary curtailments as a response to periods of low and negative prices as Dan touched upon earlier. Our achieved price for the quarter was per megawatt hour. That was a significant improvement relative to Q3 where we only had per megawatt hour, but still low price in a historical context.

But we really appreciate the recent improvement in prices and we also see that continuing into Q1 so far this year. So that those volumes and pricing translates then into revenues of million for the quarter and an EBITDA excluding certain non cash G and A items of million for Q4. I think it’s important to keep in mind that that reported EBITDA excluding a noncash items of EUR 1,000,000 that includes EUR 2,000,000 of Sudan legal costs. As Dan said earlier, this year 2025 will be the peak year in terms of legal costs. We expect them to be significantly lower next year and then going away altogether as the case is expected to end during first half next year.

Already mentioned a strong balance sheet and we do have ample liquidity available, which provides us with a lot of resilience and optionality. You can see that demonstrated here on the slide. Year end ’24 net debt on a proportionate basis of million compared to a revolving credit facility of million, which provides us with more than million of available liquidity. If we then go into some of the key financial metrics on a quarterly basis a bit more in detail, and comparing to the preceding quarters going back to the fourth quarter of ’twenty three. Starting with revenues on the left hand side, you can see that our Q4 revenues were significantly improved compared to Q2 and Q3 in ’twenty three.

The improvement compared to Q2 was driven by volumes as prices were quite similar. But relative to Q3, we saw a big uptick both in volumes and pricing. And you can also see that Q4 in ’twenty four came in very close to what we achieved in Q3 ’twenty three with the lower achieved price being almost fully offset by higher volumes, which is driven by Kalskyroof coming in line late twenty twenty three. And you see the same pattern when we move to EBITDA and also CFFO prior to working capital with Q4 this year or Q4 ’twenty four showing a strong improvement compared to Q2 and Q3 and coming in quite close to the fourth quarter of ’twenty three. I think going forward, given the nature of onshore wind business, you should also expect the same pattern of seasonality on a quarterly basis with Q4 and Q1 being the quarters where we typically generate most revenues where because we have both higher volumes and typically stronger prices during the winter months as opposed to the summer quarters of the year.

Moving then to our achieved price for the fourth quarter of twenty twenty four. The average system price in Q4 was per megawatt hour, whereas the average spot price for our portfolio was per megawatt hour during the same period. And this just shows you the very favorable geographical location of our assets, which typically translates into higher prices as when you compare it to the Nordic average system price. For 2024, we have seen our portfolio achieving higher spot prices for every single quarter with an average premium exceeding 20% for the full year. Guarantees of origin and some hedging impact had a positive impact of per megawatt hour for Q4 before you then deduct the capture price discount to arrive at our all in achieved price for the quarter of per megawatt hour in Q4.

When it comes to the capture price discount, we did see sequential improvement in Q4 compared to Q3 in 2024, so lower capture price discount at the end of the year as compared to Q3. So Q4 being closer to the first half level, albeit for the full year 2024, the capture price discount did increase compared to 2023 as you can see on the slide here. When it comes to how we look at this going forward, And this is obviously driven by many moving parts and inherently challenging to forecast. But we do expect and based on the data that we are looking at on a daily basis, we do expect capture price discount in ’twenty five to stay quite close to what we realized in ’twenty four. But we also note that there are several energy market research consultants that do expect the capture price discount to improve or decrease significantly already from 20% to 25% compared to what we have actually seen over the last twelve months.

If you take a look at how our proportionate net debt evolved over the quarter, we entered Q4 ’twenty four with a proportionate net debt of million. Then we had a CFFO excluding working capital of minus 1,600,000.0 as I showed on the previous slide. We had a negative cash impact from changes in working capital of minus 1,100,000.0 during the quarter. And then our cash flow from investing activities consists of acquisitions and CapEx, CapEx being mainly investments into our greenfield portfolio. That was €1,600,000 in Q4.

And as we have shown before and reported in our year end report today, we did deliver in line with all our guidance or actually below on our CapEx guidance. But our CapEx for a full year end of million, whereas was in Q4. And then the acquisitions that we have reported today, part of that part of those were closed in Q4. So a cash impact on our Q4 cash flow of million during the quarter. So a total cash flow from investing activities of minus €6,900,000 and then we have some other small impacts including FX resulting in an ending proportion net debt of €65,000,000 as of the end of twenty twenty four.

If we then shift the focus to the chart on the right hand side, you can see the material amount of available liquidity that we have with current cash and the undrawn portion of our revolving credit facility totaling million. And as I said earlier in this presentation, that leads to resilience and very valuable optionality for the company and especially in the current market environment. As a result of previous years’ investments and expenditures, we have the company has accumulated significant tax balances that we can utilize to offset future payable tax. As you can see from the slide here, it totals around €500,000,000 split between Sweden and Finland, corresponding quite well to also how our power generation and cash flow is split between the two countries. And that this results in a potential future reduction in payable tax of million for the company.

This is a very material amount and definitely something we therefore, we are highlighting it. And it is we argue that this is important to take into account when you are estimating future cash flow generation for the company and obviously will lead to strong cash flow conversion for many years to come. If we then sum up into our cash flow outlook for 2025 And all the figures you see on this slide reflects our outlook and guidance for this year. So here we are assuming power generation volume of nine seventy five gigawatt hours. Just want to reiterate, as Daniel also said earlier, I mean, our long term power generation capacity is indeed 1,000 gigawatt hours.

But for 2025, we have chosen to reflect potential impact from voluntary curtailment into our outlook. So here we are assuming nine seventy five gigawatt hours based on then three different scenarios for achieved price ranging from 30 to €50 per megawatt hour of achieved price. Keep in mind that for 2024, which I guess we can only argue was quite weak from a pricing perspective, we had an achieved price of €34 for the full year. So we think these are very reasonable price ranges for ’25. So based on those price scenarios and the volumes as mentioned, we expect revenues to end up between €29,000,000 and €49,000,000 for the year with a corresponding EBITDA excluding Sudan legal costs ranging from million to million and an EBITDA breakeven of per megawatt hour excluding Sudan legal costs.

We have mentioned this before. We’d just like to repeat why we think it’s very relevant and important to focus on the cash flow potential for the company excluding the Sudan legal costs. And this is obviously due to the very temporary nature of The Sudan legal costs. As I said, this year will be the peak year, significantly lower next year before going away. And then you compare that to our assets with more than twenty years of remaining technical lifetime on average before taking into account any potential from life extension or repowering, meaning that we expect these assets to generate cash flow for decades to come.

Moving then to free cash flow pre CapEx. We estimate that to range from minus million to plus million for million based on the mentioned price scenarios. And when rolling also in The Sudan legal costs, we estimate this to end up between minus million and plus million. And if you then add our 2025 CapEx guidance of million to these figures, I think it’s very clear to see that even in a low price scenario, we do have ample room in our debt facility to pursue all planned activity and still maintain very significant capacity for other potential opportunities and accretive growth opportunities that may arise. And lastly, it is important to note that these forecasts fully exclude any potential impact, cash flow impact or revenues from greenfield project sales, which we do occur which we do expect to occur both this year and also going forward and obviously can have a quite material impact on our earnings.

So with that, I’ll hand over to Dan for some concluding remarks.

Daniel Fitzgerald, CEO, Auron Energy: Thanks, Espen. And I think to sum up, our strategy has remained largely unchanged since we started this company. We’ve focused on the lowest cost lowest levelized cost of energy technologies, low breakeven costs, some of the cheapest power to produce. We want to maintain a strong balance sheet, and we want to continue to grow through M and A. And we want exposure to the upside from the Greenfield platform.

Our assets have long life cash flows. They have long technical life, and we extend to increase that over time. And greenfield project sales really is an upside that we expect to see in the coming twelve to twenty four months. Strong balance sheet, organic growth in full flow across all of our countries of operation. And I think that early monetization event, I know a lot of investors and analysts have been asking about it, it really is something that we’re going to start seeing in 2025.

I think it’s important to note on days like today where we see the market cap of the company. Today, we’re around million market cap as a company. If we just take kaskegrove and MLK, we have around 150 megawatts of installed capacity. Just to rebuild them, looking at the capital cost today, is million. They account for around half of our production.

We have another big portion of production in the assets that Jonas looks after across The Nordics. So we have another double of that on top. We have greenfield on top of that, and we have a relatively low net debt position. So at this point in the market, it really feels like our valuation is disconnected from the underlying value of our assets. If we just reflect a little bit on some of the public to private transactions we’ve seen through the course of the last twelve months, the OX2 transaction, the Encavis transaction, the Helios solar transaction, we’ve seen significantly higher multiples being placed on public companies by private players than what we’re seeing in public markets.

So my sense today is it feels like we are close to the bottom in terms of valuation for renewable companies. And the break apart or the value of our underlying assets is significantly higher than where the market cap sits today. And I think that’s important to consider as we move forward with the company. And so with that, I’ll invite my colleagues to come and join us back up on stage and Jenny as well, and we’ll move into Q and A.

Jenny, Event Moderator, Auron Energy: Yes. We have received a lot of good questions online. So if you still haven’t sent across your question and you’re joining us online, please send it across and we will go through it. I thought that we should start with questions in the room. Yes, Caleb.

Caleb, Analyst: Thank you. If I start out with you touched on this earlier, but you’ve acquired 50 gigawatt hours of production this year. I imagine at a price above where your own assets are trading. So why not buy back assets instead? I mean, you touched on it earlier, but given that you’re trading 60 plus percent below your asset value, is there some reason we’re kind of missing here as to why you haven’t done it yet?

Daniel Fitzgerald, CEO, Auron Energy: No. I think the acquisitions we’re seeing, accretive acquisitions that we’re stepping into. So I think we’ll continue down that pathway. But as you quite rightly note, we have ample liquidity headroom in our balance sheet. We also have approval at the AGM to move into buybacks, and I think you should expect that discussion to be alive certainly within the company and management.

We can’t leave it alone forever. We do see the undervaluation of the company and very much that discussion is alive.

Caleb, Analyst: Thank you. And on the 1.9 gigawatt solar and battery project you have under ongoing sales right now, what’s a reasonable price expectation per megawatt for Reddit permit projects in The UK region?

Daniel Fitzgerald, CEO, Auron Energy: So very difficult to say as the market evolves so rapidly. I think, we’ve spent not a great deal on that project. I think the multiples on our invested capital are quite large. But there’s a range of buyers of these kind of projects. Some of the buyers are developers who will take the project 100% today with no future contingency.

Other buyers would like us to carry the project through to ready to build and take it on to the next milestones. And so depending on the structure of the bid, it’s very difficult to put an answer on that question that gives you an exact multiple that you can apply to value our greenfield business. But I think you should rest assured that it’s multiples on the invested capital. And as soon as we have the results of this process, I think we’ll share that directly to the market.

Caleb, Analyst: Okay. And just a last one. You said you expected to diversify projects during 2025 and 2026. How many megawatts are we kind of talking on average for each respective project?

Daniel Fitzgerald, CEO, Auron Energy: So it depends on whether you’re Germany and UK and jump in axle at any point if I miss it. But we’re expecting around four gigawatts worth of projects, so five German solar and a range in The U. K. And so if you take megawatts of that size, we have really large scale projects in The U. K.

And much smaller in Germany. So I think we’re north of five projects when you add it all together and around four gigawatts over the next two years we expect to come to market.

Caleb, Analyst: Okay. Thank you.

Jenny, Event Moderator, Auron Energy: Excellent. Thank you so much. Any further questions from the room?

Matthias Arenboy, Analyst, Redeye: Yes. Thank you. My name is Matthias Arenboy from Redeye. I have a question mainly regarding to the current market environment. Maybe it’s directed towards you, Jonas.

But as you mentioned in the beginning, you’ve been active in the business since the late ’90s. And you said that 2024 has been maybe one of the most challenging years. Could you add some color to that? What has been the main challenges and what you see ahead? Because it’s easy to get a picture from different media outlets and so on, but that discussion is maybe a bit different from what you see on a daily basis.

Jonas, Nordic Business Lead, Auron Energy: I mean, it’s low prices, of course, high volatility. But I mean, we have seen that’s also saying that we have seen it before and it tends to change. So we expect them to recover. I mean, we have seen lower quarterly market prices I mean, in system prices, but achieved price from renewables taking into account capture at discount. That’s where we have seen record low prices in some price areas.

But I mean, with I mean, we have I think we have been in a position where we have built out new capacity beforehand and betting on consumption to come. And now we see that no new investments decisions are taken. So I mean, we haven’t seen any Q2, Q3 in Sweden. I don’t expect any in Q4. So I mean, no investment decisions.

Okay. Potentially that building out, I mean, the transformation of industry into the electrification of larger Swedish industries will take a few more years potentially, but it will happen. So I think that it’s just the difference from building beforehand production capacity. And now what will happen is that we will see that we’ll the outbuild might be paused a bit and we will step by step see consumption ticking up and then we will be in a different situation quite good for us, I mean, when we potentially see a lower supply and a higher demand. So I think it’s normal in a if you see in a larger context, but the major difference would be capture rate discounts compared to, I mean, ten years ago when we also had periods with low prices.

But I think it’s the third or fourth time through the cycle where we see very low prices, meaning that we have also had three, four better periods. So better periods are to come.

Matthias Arenboy, Analyst, Redeye: And if I may, another question regarding the massive product we have, say, in The UK. Typically, when you see products of these sizes, they’re typically located in deserts in Arizona and that was in the East Midlands, maybe not the most sunniest part of the world. Could you elaborate a bit on why is this an attractive product?

Axel, Greenfield Development Lead, Auron Energy: Yes. I think if we look at irradiation across Europe, and it surprised me as well in the beginning actually, but when you look at The U. K, it’s higher than you would think. And that gives us good economics of a project in that site. And then I think you also referred to a bit the location in terms of actually realizing the project.

And that area of England is not densely populated. We see that it’s one of the actually hottest areas in The U. K. To develop new solar projects. The government the U.

K. Government has recently approved some projects in that area that are also large scale, several hundred megawatts of capacity. So it is a very attractive site for solar development.

Daniel Fitzgerald, CEO, Auron Energy: I think we’ve got around four landowners for that entire parcel of solar. So it’s not like we’re chasing if we were to do a solar project of that size in Sweden, you can imagine how many landowners we need to get 3,000 plus acres away. So I think there’s a range of things. The size of our project helps. The revenue stream for landowners really helps to get some of the really big landowners engaged.

It’s really condensed parcel, so it’s two blocks of solar with around half on each. So I think it’s it’ll be interesting to see the outcome of the process. We’re waiting with bated breath as is the market on what this means for us.

Matthias Arenboy, Analyst, Redeye: Thank you.

Unnamed Analyst, Analyst: I have a question directed to Jonas. You spoke about brownfield opportunities within Slaten Spind. Will you be able to pursue those opportunities without taking full control over the company?

Jonas, Nordic Business Lead, Auron Energy: I guess we have two options. One is to try to pursue them without taking control of the company or to try to take control of the company. So in one way or the other, we will succeed, yes.

Unnamed Analyst, Analyst: How do you view the shareholding in Liedghe Wind through Sletons?

Jonas, Nordic Business Lead, Auron Energy: I mean, Liedgoye Sletons, there are it’s a number of I mean, our background is actually from it started with cooperatives and sooner to be when the first turbines were in Sweden, where normally I would say bought and the projects were realized by cooperatives and later next step was smaller ABs and so forth. So I mean, it’s the same type of company with diversified assets that we have that we are interested in, but nothing specifically apart from that to say about Laidway. But generally speaking, that’s the brownfield, more small scaled niche acquisitions we are seeking.

Unnamed Analyst, Analyst: How has the dialogue been with Sleddas? Have they been interested in your propositions?

Jonas, Nordic Business Lead, Auron Energy: I mean, we are the largest owner in Sletons Wind and we have a very good relationship with the Chairman of the Board and other shareholders. So I think it’s I think they view it as positive. We have a market knowledge, we cannot change and so forth. So I mean, and we have ownership in, they have ownership in turbine and wind power sites where we are not represented. So it’s a good combination actually.

Unnamed Analyst, Analyst: Thank you.

Caleb, Analyst: Thank you. Just one more question. You mentioned earlier the average asset life is about eight years, which kind of implies some of the slitted assets, I guess, have very few years left. So maybe this is more to you, Jonas. Which assets are those?

And what kind of short term possibilities do you have to extend the asset life and at what cost?

Jonas, Nordic Business Lead, Auron Energy: We have, I mean, 50% of the portfolio, MLK, Karstgru. So half of the production is from two assets and the other 50% is actually plus 45 assets. So it varies a lot. But I mean, we can do it’s very little we can’t do, if you see what I mean. We can, of course, to replace older turbines, smaller older turbine with new large turbines that’s repowering, that’s very beneficial, but could also in this CapEx environment be quite expensive.

So it’s good to have the option to just extend lifetime, I mean, replacing main components to keep the towers and foundations and operate them for another ten, fifteen years. So I think we have all options and it’s very site specific from a technical point of view and from a permitting point of view as well. So it is actually to let them let the assets generate cash and in parallel just find the best long term solution. So repowering life extension, it’s very seldom that we just take them down after thirty years. That will happen, but not often.

Daniel Fitzgerald, CEO, Auron Energy: I think it’s quite a sliding scale between decommissioning all the way through to life extension. So you can end up with like we’ve done this last year, we’ve done a big blade campaign to extend the lifespan of a range of assets. On some turbines, it may not be economic. On other turbines, with very small changes, we can get another five or ten years out. So I think you should expect us to look at that portfolio.

And as we reach the end of life, we’re going to make the investment decisions that make sense from full scale repowering just to small changes which extend the lifespans.

Jonas, Nordic Business Lead, Auron Energy: And I think that in the end of the day, if nothing else if we don’t succeed with anything else, we can always use the grid connection to replace an old turbine with the best project, battery project. So it’s a lot of options we can choose to operate the asset or to use the site for a very, very long period of time. Thank you.

Unnamed Analyst, Analyst: Dan, you mentioned something about different geographies. How do you view the prospects for going into other countries? I think in particular, you’re exposed to Germany, we might have a new government feed in tariffs are high, but weren’t sure that that’s going to last. How do you view the capital allocation going forward relative, in particular, The Nordics and Germany?

Daniel Fitzgerald, CEO, Auron Energy: So I think we’ve got a good program both in The Nordics, Germany, U. K, and I think the capital program, we’re still funding the greenfield business. So that should continue. In The Nordics, the smaller scale M and A, the growth in greenfield projects, you should expect that to continue. And that’s to a large extent, that’s roughly balanced to our cash generation.

So as the greenfield projects start to deliver cash generation, that will be less capital that we need to spend, and Jonas is largely redeploying cash generation. So Espen’s war chest of million should be used at the right point to step into a third leg for the company, and that’s somewhere where we’re going to be spending a little bit more time as markets are weak to have a look at opportunities more broadly across Europe for growth in terms of the company. We get asked a little bit about technologies and opportunities. I think the playbook is open from greenfield projects all the way through to operating assets. But one area that we see more and more that we need to be exposed to is around the difference between a producer and consumer and how energy is traded in the middle.

I think there’s as we see more and more of our turbines going into ancillary services, battery revenues, storage, etcetera, ancillary markets, that trading is so critical when it comes to the way power markets are evolving. So we’re spending a little bit of time to understand that a bit more as well.

Unnamed Analyst, Analyst: And coming back to your question on consumption, do you see any activities in e. G. Data center generation two? Or what is your view on consumption of large consumers currently, apparently, in particular, in The Nordics?

Daniel Fitzgerald, CEO, Auron Energy: Yes. So I think we have, as Jonas touched on, we have seen this big wave of green projects coming, H2 green steel, the North Fault and others up in the northern areas, and I think that’s slowing down a little bit. But we will still see electrification coming. So I do see consumption over time will follow GDP and will increase. But the dynamics between how we supply energy and consume energy will change.

You’re starting to see us change already one of the first where we’re restricting supply as prices come down. We need to see the demand side response. The consumption should increase heavily when prices are so low. And so we expect, again, it’s going to take some time, but we expect both the supply and demand side to come more into balance to provide a flawed, somewhat a floor and a ceiling on price a little bit more. So as we touched on, I think the markets are in a very volatile phase where we’re evolving on every aspect of the grid and of the market.

We’re seeing investments in different areas. So we need to stay agile and keep some of the war chest available as we see nice opportunities to continue to grow.

Unnamed Analyst, Analyst: Would replacing turbines at end of life make sense at current electricity prices?

Daniel Fitzgerald, CEO, Auron Energy: I’ll let you jump in, Jonas, but it’s there’s been no wind investment decisions made in the last probably six to nine months in The Nordics. So I think that tells you something around where prices are sitting today and where the replacement cost of new turbines are. I think that needs to evolve over time. We need to see pricing pick up. But the repowering opportunities, we can extend lifespans for long enough until we get to pricing where we see it attractive enough to step into it.

So in my mind, in the fullness of time, we will see pricing where it absolutely makes sense, and we have to keep investing to have that opportunity. But today, it’s quite challenging.

Jonas, Nordic Business Lead, Auron Energy: And it takes a few years to get the permitting in place and all of that. And yet again, referring to a long, long period in the industry, we have really seen that before as well, where you actually work with greenfield development without actually being if you were to invest today, it might not happen. But we know that the opportunity will occur when prices have recovered. But actually to a more detailed answer to the question is that right now, I would say that it’s more likely if we have to replace a turbine, it’s more likely that we were to buy still a if it’s an old turbine, we can still buy a larger secondhand turbine. So you could buy brand new, that could be challenging with today’s pricing.

But there are a lot of other opportunities to buy secondhand as well with another fifteen, twenty years. Maybe you don’t have thirty from such an investment, but it’s 25% of the price or 30% of the price. So we have options. We can do it. I’m not saying that everyone can, but we can.

Daniel Fitzgerald, CEO, Auron Energy: And that’s the Nordics. I think the greenfield business, there’s still strong economics for solar across the rest of U. K, Germany and the rest of our markets. Thank

Jenny, Event Moderator, Auron Energy: you. Do we have any more questions from the room? If not, I will take a few questions from our online function. So what is your view on 2025 power prices across your key markets?

Espen, CFO, Auron Energy: Well, I think we as you showed in our cash flow outlook, they represented achieved price scenarios ranging from 30 to 50. I think you also said ’24 was quite, like all agree, a challenging year in terms of achieved price. We still achieved 34 on average for the full year. So hence, why we have come forward with a 30 to 50 range. We think that’s a reasonable range in the current market.

And especially that’s caused for The Nordics where we have our power generation. And for our greenfield markets, we still see a lot of strength and the very strong prices keeping up that’s also reflected in futures pricing.

Jenny, Event Moderator, Auron Energy: Good. Should we expect any more asset sales in 2025?

Daniel Fitzgerald, CEO, Auron Energy: I think everything’s for sale at the right price. So we constantly keep a track on what our assets are worth. We’re constantly in the market for acquisitions and divestments. So although we’re not planning a sales process for anything at this stage, like the LeichHanger asset last year approved, I think if the right bids and offers are on the table, then we will act on those.

Jenny, Event Moderator, Auron Energy: And speaking of some growth opportunities with investments in ancillary services and batteries, what is your strategy to create value from these investments? How do you see the value creation from this?

Daniel Fitzgerald, CEO, Auron Energy: Yes. I think batteries are going to be forming a larger part of the infrastructure of the grid over time. As we see the renewable generation being more intermittent, we need some means of storing and dispatching that energy at the right point in time. So I think we like we do on our acquisitions, I think we look at the economics of every single investment. Battery stand alone in The Nordics, I think economics are challenging at low pricing like they are today, but there’s some opportunities for some of the larger scale batteries there.

I’d say ancillary services, certainly, along our wind farms, it costs us almost nothing to put them in place. So to have that option, is very, very low cost. And as we see this volatility in the market, we’re generating some decent revenues out of certainly out of MLK. We’re going to see Karstgroove coming online and potentially some more assets through 2025. So where we have the technical ability to provide those services out of wind, we should be providing them.

Jenny, Event Moderator, Auron Energy: Great. I think maybe this is for Axel to respond to. It’s about the greenfield business. The sale process of the East Midland project, is it at risk of being delayed due to the grid reform? Or is there any change in timing from our side on this?

Axel, Greenfield Development Lead, Auron Energy: Yes. So I think since the start of this European greenfield business, we’ve said that we will focus on the development side and get the projects to key development milestones. And then when we reach the RTP stage, we will go out and approach the market to assess divestment options at that point in time. We’re at that stage of this Midland project, and we’ll see what feedback we get. There is some uncertainty introduced due to this grid reform, but it’s hard to comment more when we have an ongoing process.

Jenny, Event Moderator, Auron Energy: And on that note, are we aiming to specifically sell at R2B? Or are you also open to sell at R2B, ready to build?

Axel, Greenfield Development Lead, Auron Energy: Yes. So again, I think our plan has always been we take the projects to key development milestones. The first such milestone is R2B, and then we approach the market. But we’re also keeping our optimistic approach to value creation. So we will definitely explore market opportunities at the RTP milestone.

Jenny, Event Moderator, Auron Energy: Great. And then this is for Jonas, maybe. Are you looking are you open to wind turbines from China to invest?

Jonas, Nordic Business Lead, Auron Energy: I don’t think it’s likely that we do that large scale. I don’t think so. I mean, not at this point in time. But I think that what can happen, I mean, generally speaking, if we there are sites with you could have a five turbine, 10 turbine site with turbines both from Europe and China. And if you were to have a Chinese turbine in such a group, it could happen.

It’s not something we are chasing, no?

Daniel Fitzgerald, CEO, Auron Energy: I think it’s a discussion we don’t have in solar. So all of the solar panels and most of the battery cells are ex China, and that is by far the cheapest provision of that technology. It’s really hard to ignore. I agree with Jonas. There’s the penetration of Chinese turbines into Europe isn’t there today.

But with CapEx around 50% of where the Western suppliers are providing turbines, I think it’s something that’s going to be coming more and more into the industry as we go forward, especially if we see lower pricing.

Jenny, Event Moderator, Auron Energy: Perfect. And looking at the smaller transactions that you’ve done in The Nordics, You had a strategy where you’re building small, small transactions. And what is the overall rationale strategy for doing this? Where do you create value from these small transactions?

Jonas, Nordic Business Lead, Auron Energy: We buy much cheaper than if we were to normally, I mean, a larger sized project, 40 megawatts, 50 megawatts, attracts also financial institutions and investors. And then it’s hard for us to compete because we are chasing higher returns. So it’s a bit more work with stepwise smaller transactions, but we find that we get more value for money. And then for sure, as we work with every day, I mean, we can buy a stake, then we want to reach majority. And in the end of the day, we prefer to own assets 100%, which can reduce OpEx.

And it’s so I think we see and on top of that, it is actually the growth potential that comes with these minority stakes. So we see a lot of strategic rationale in doing that.

Jenny, Event Moderator, Auron Energy: And there seems to be a little bit of a confusion, so maybe you can clear the waters a bit. Regarding the average asset life of our operational portfolio, could you give us some more flavor on this?

Jonas, Nordic Business Lead, Auron Energy: I mean, we have eight years average asset age so far. And I mean, that, of course, includes older turbines and newer turbines like MLK Karskru. So that’s the average. And I mean, potentially thirty year is a normal when we see that we want to technical life is normal, I would say, thirty years on a turbine. But what we are saying is that you can extend that, reusing foundations, roads, electrical equipment and tower beyond thirty years as well.

But I mean and to operate a site, you will never operate a turbine forever. That’s not likely, but you can use a site forever or at least for a very, very long time.

Jenny, Event Moderator, Auron Energy: Good. Speaking about the technology and branching out to new technologies, are we looking at nuclear as part of branching out into new areas?

Daniel Fitzgerald, CEO, Auron Energy: I think certainly traditional nuclear is too big for us. It’s not something we’re looking at. I think SMRs and the modular reactors, they are coming to market, but we’re not seeing that much penetration yet. I think it’s still in the hype phase. It’s not for us today.

Jenny, Event Moderator, Auron Energy: Okay. So assuming that other Nordic power producers struggle with cash flows in ’twenty four? Does this open up new M and A possibilities for the company? Or how do you see this landscape?

Daniel Fitzgerald, CEO, Auron Energy: Absolutely. I think our favorite type of seller is a motivated seller. So we have the balance sheet to be able to step into opportunities. I think with some of the smaller scale deals that Jonas has been able to put together, we’re seeing north of 20 IRR on a reasonable long term price and accounting for some of the short term lows that we’re seeing. So I think having a strong balance sheet in tough markets is absolutely a strong place to be.

Jenny, Event Moderator, Auron Energy: Do you have a comment to the share price? I guess assuming the share price reaction today is what is being

Daniel Fitzgerald, CEO, Auron Energy: Yes. I think I made it during the presentation. I must admit, we’re not happy with where the share price is today. We will be working to try and rectify. And I think the valuation of the company at around €150,000,000 today just doesn’t even account for some of our largest producing assets, let alone the rest of the producing asset stock, the organic growth we have, the greenfield sales.

So in the fullness of time, I think we will see the share price more reflective of where the value of the company is. But I don’t think we can ignore where the renewable unfortunately, with the investment sentiment around renewables, we are not immune to that investor sentiment.

Jenny, Event Moderator, Auron Energy: And what do you think is the focus area for the company within the coming two, three years? Where do you see the company will be?

Daniel Fitzgerald, CEO, Auron Energy: Yes. I think the next two, three outlook is really quite simple. I think keep delivering in the Nordic business, see the cash generation out of the assets. We should keep continuing to look for accretive M and A and growing that business both organically through greenfield and through the M and A side. We need to sell some projects in the greenfield business.

We’re going to see the fruits of that in the next twelve to twenty four months as the first U. K. And German projects come through. Two year time frame, we’re going to see the end of the Sudan case. So that seeing that in the rearview mirror is going to open up the door for a lot of other investors today that are precluded from owning the stock.

And then I think stepping into broader M and A and another growth leg for the company is really important. So it feels like this year is a year where we’re going to see a lot of these things really starting to come to fruition, and the work we’ve done over the last one or two years is going to start paying off.

Jenny, Event Moderator, Auron Energy: Thank you. We have no further questions from the audience online. Do we have anyone in the room who wish to the final question? No? Thank you so much everyone for joining both in person and online.

And thank you all our presenters today for a great presentation. You know where to find us and send us an email in case you have any further follow-up questions. And thank you for today.

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