CEO Speaks

Quarter 3 delivered strong earnings - an increase of 380 percent compared to Q3 2018

SolTech Energy Sweden AB (publ) (Soltech) delivers a strong quarter at Group level with operating income of SEK 87.3 (18.2) and a profit (EBIT) of SEK 15.9 (5.6) and with an EBITDA of 30 (9.3) MSEK. Revenue is 380 percent higher than quarter 3, 2018, which is largely due to our three acquisitions quarter 1, 2019 and increased business volume in our Chinese operations. In the Group, during the first three quarters of 2019, we reached revenues of SEK 236 M (51), with a profit of (EBIT) of SEK 38.2 M (1.8). Revenue for these three quarters is as much as 360 percent higher than the first three quarters in 2018. Our communicated goal of reaching over SEK 300 million in operating income appears to be achieved for the 2019 fiscal year.

Nyedal Solenergi becomes Soltech Sales & Support AB

On August 26, we announced that the remaining 49 percent of Nyedal Solenergi was acquired and that Nyedal changed its name to Soltech Sales & Support AB. The strategy behind this acquisition and name change is to create a purely sales company that takes over product development, sales and support from the parent company SolTech. In this way, we streamline the business so that the parent company can focus on financial issues, acquisitions and marketing. A handful of experts move from SolTech to Soltech Sales & Support and strengthen the former Nyedal Solenergi’s competent team to best manage sales and product development towards our customers, subsidiaries and retailers. I am sure that this reorganization is the best for the Group. Both the parent company and our wholly owned subsidiary can now focus on what we are best at.

Our acquisition strategy is the focus

Our acquisition strategy, which began in the first quarter of 2019 with the acquisition of Nyedal Solenergi, the NP Group and Swede Energy Power Solutions, remains a major focus for us. During quarter two, we secured funding through our successful rights issue. During the summer and autumn, we have been in contact with a wide range of companies in solar energy as well as the roofing, facade and electricity industries. We have high demands on the companies we will acquire and carry out thorough analyzes. We have left the negotiating table on several occasions but have good hopes of completing several acquisitions in the coming months.

Advanced Soltech “ASAB” appoints Carnegie Investment Bank and DNB Markets as advisors in the planned listing of ASAB’s shares

On September 10, SolTech Energy announced that Carnegie Investment Bank and DNB Markets had been appointed as advisors in the planned listing of ASAB’s shares on Nasdaq First North Growth Market. The work with the listing of ASAB continues with the objective of implementing it during the first part of 2020 instead of as previously announced during the fourth quarter of 2019. The decision has been made in consultation with ASAB’s advisors. The reason for the shift in the timetable is strategic as the interest from investors is judged to be greater than before the Christmas and New Year holidays and thus the conditions for a successful outcome are optimized. After the listing, SolTech and ASAB’s Chinese partner, ASP, will remain as owners with the same mutual ownership relationship. The capital that will be included in the planned new issue of ASAB in connection with the listing goes to expansion of operations in China. Neither SolTech nor ASP will sell any shares in connection with the listing, but will be diluted by the new shares that will be added in connection with the planned new share issue prior to the listing. However, SolTech and ASP will continue to jointly own the majority in ASAB. SolTech’s shareholders will, of course, be offered the opportunity to participate in the planned new share issue in ASAB and will receive detailed information on the listing by post in good time.

New growth plan for a gigawatt (GW) in China

As part of the continued expansion in China, ASAB, which now owns 100% of the shares in the Chinese operations, has devised a plan for continued growth. The easiest way to measure growth in China is how much installed capacity ASAB owns there. The new and updated goal is for ASAB to reach an installed solar capacity equivalent to 1 GW (1000 MW) during 2023, which is fully connected to the electricity grid in 2024. This corresponds roughly to the effect of a nuclear reactor in Forsmark

Exciting autumn and winter

The solar energy industry is constantly evolving throughout the world, and not least in Sweden. But in Sweden, solar energy accounts for only about 0.3% of our energy mix. In comparison, the percentage is as much as 8% in Germany, 27 times more than in Sweden. We are without doubt facing the big breakthrough. At the same time, we believe in consolidating the industry in Sweden where many companies will disappear or be acquired. At SolTech we are moving forward our positions and believe that we will be one of the winners in this race. Every day we contribute to a better environment by installing more and more solar energy, while working dedicated to giving our current owners and good value growth.

Sincerely,

Stefan Ölander, CEO