Strong growth during the first quarter
Despite the Corona pandemic affecting society to a greater extent in the first quarter of this year compared with 2020, Soltech succeeds in delivering very strong growth. The Group’s revenues increase by as much as 175% to SEK 145.2 million and the Swedish operations increase by as much as 212% to SEK 118.1 million.
CEO comment:
– Our focus is growth and I am very pleased with our performance during the first quarter, which in terms of revenue is the toughest quarter of the year in our industries.
First quarter in brief
• The Group’s revenues in the quarter amounted to SEK 145.2 (52.8) million. An increase of 175%
• Revenues in the Swedish operations grew to SEK 118.1 (37.8) million, an increase of 212%
• Revenues in the Chinese operations grew to SEK 27.11 (15) million, an increase of 81%
• The Group’s profit before depreciation (EBITDA) amounted to SEK -8.3 (-1.3) million. EBITDA was negatively affected by non-cash affecting effects of SEK -11.7 million as a result of increased targets and forecasts, which led to an increase in provisions for additional earn out costs
• The Group’s operating profit (EBIT) amounted to SEK -28.4 (-14.7) million. EBIT has been negatively affected by non-cash affecting effects of SEK -11.7 million as above
• Profit after tax for the period amounted to SEK -18.2, (-5.5) million. The result was affected by unrealized exchange rate differences in the Chinese operations by SEK 40.1 (34.8) million and by non-cash affecting effects of SEK -11.7 million as above
• Cash flow for the period from operating activities amounted to -4.7 (-17.3)
• The period’s cash flow for the Group amounted to SEK -101.7 (-61.4) million
• Earnings per share amounted to -0.33 (-0.05)
• Covid-19 affected the Swedish operations in the first quarter, mainly in the form of postponed projects. However, order intake remains good
Significant events during the first quarter
Sweden
• Soltech acquired 76% of the shares in Annelunds Tak AB and 52% of the shares in Ljungs Sedum Entreprenad AB
• Soltech acquired the remaining 40% of the shares in the subsidiaries Swede Energy and Merasol to create the best conditions to become an even larger player in the solar energy market. Soltech now owns 100% of both companies, which strengthens the offer in the corporate and real estate market in solar energy
• Soltech acquired 100% of the electrical engineering company Provektor Sweden and its subsidiaries
• Six of Soltech's subsidiaries have together received the order to build the Nordic region's largest solar façade project with an order value of SEK 12 million
• New solar collaboration has begun between Soltech's subsidiaries Soldags and LRF, which will make it easier for more farmers to become micro-producers of solar energy.
• Soltech's Chairman of the Board Anna Kinberg Batra was elected new Chairman of the Board of Swedish Solar Energy
• Soltech sponsors the Architecture Gala
China
• Soltech's subsidiary in China, ASRE, signed seven orders during the quarter, which in total are expected to generate annual revenues of SEK 11.1 million, or approximately SEK 221.6 million during the agreements' 20-year maturities
• The Soltech Group is awarded a prize in China as “The most influential solar investment company 2020”
• During the quarter, Soltech's subsidiaries in China connected a total of 5.8 MW of roof-based solar power plants and had a total of 182.4 MW in producing plants at the end of the quarter.
Significant events after the reporting period
• Soltech acquired 100% of the shares in Rams El.
• Soltech's subsidiaries Swede Energy and Castellum win the Solar Energy Award 2021 in the category “Plant of the Year”. The winning facility is Hisingen Logistics Park with a roof-mounted solar cell facility of 30,000 m2
• Soltech's subsidiary Swede Energy is building a 3,000 m2 solar cell plant at the e-retailer Matsmart's central warehouse in Örebro
• Soltech's subsidiary in China, ASRE, has signed three orders that are estimated to generate annual revenues of SEK 1.2 million, or approximately SEK 31.4 million during the agreements' 20-year maturities
Advanced Soltech's subsidiary in China, has signed an order with Anhui QianHong Household Products Co. Ltd. The order concerns the installation of a solar energy plant of 0.46 megawatts (MW) and is estimated to generate annual revenues of approximately SEK 0.39 million, or approximately SEK 7.8 million during the 20-year term of the agreements. The investment in the facility, which will be owned by Advanced Soltech's wholly owned subsidiary in China, is approx. SEK 2.57 million and construction is planned to start in the second quarter of 2021. This is a follow-up order for an existing customer. The customer is very satisfied with the 600 KW plant they already have and therefore places this augmentary order. The project is in WuHu, Anhui Province.
Advanced Soltechs VD Max Metelius kommenterar:
-This order is particularly appreciated because it is an existing customer who is expanding their partnership with us, since they are very satisfied with our cooperation.
Anhui QianHong Household Products Senior Manager Mr. ChangHao Ding kommenterar:
-Advanced Soltech is an esteemed partner that helps us develop our environmental work and contribute to cleaner air.
E-retailer Matsmarts new central warehouse outside Örebro will get a 3 000 m2 solar cell plant installed on the roof. Soltech's subsidiary Swede Energy has signed the contract with Infrahubs AB and Swede will construct and build the solar cell plant on the property's roof of a total of 3,000 m2. The new green energy roof will be completed in the spring of 2022.
Swede Energy has a vast experience of building large and complex solar energy solutions and has been commissioned by Infrahubs AB to build a solar cell plant on the roof of what will be e-retailer Matsmart's new central warehouse in Örebro.
– It is a great opportunity and a interesting project for us. Matsmart is a company in the forefront of the green economy and realizes the value of putting sustainability first also when it comes to building their new central warehouse. It will be a really cool property and Swede Energy is proud to have won the deal that will supply Matsmart´s daily operation with green energy directly from the sun, says Christoffer Caesar, CEO at Swede Energy.
Solar energy was an obvious choise for Matsmart
The logistics property developer Infrahubs AB is building and managing the new e-commerce warehouse for Matsmart, whose ambition is to operate in a sustainable and modern warehouse built for the future. Matsmart concluded that solar panels on the roof is the obvious choise and a direct link to their core business.
– It is important for Matsmart to be sustainable at all levels, therefore solar power was an easy choice as energy source for the new warehouse, says Conrad Edgren, Chief Logistics Officer at Matsmart.
Now Karlskrona Solpark will grow further and become twice as big. It is Soltech's subsidiary, Swede Energy, that has started the construction of stages 3 and 4, where the company is the general contractor. Both stages have already been sold out with Skanska as the recipient of the entire stage 4 and the design work has now begun.
Swede Energy is the general contractor of Karlskrona Solpark and has previously built the park's first stages together with the municipal company Affärsverken. Now the park will double its size, which means that the park will have a total capacity of 2,400 kW, which corresponds to about 400 households' year-round consumption of electricity.
– We are both proud and happy to now start the construction to double Karlskrona Solpark's size and capacity. The solar park is located on a landfill, which has meant that we have had to use our unique installation system so as not to penetrate the ground under the facility in any way. As the landfill would not have been able to house either homes or other properties, it therefore feels extra good to let this area produce energy that is beneficial to the municipality and its inhabitants. We want to thank Affärsverken for its future thinking and good cooperation throughout the process, says Christoffer Caesar, CEO of Swede Energy.
Both stages 3 and 4 sold out
Karlskrona Solpark is a cooperative park where both private individuals and companies can buy in and take part in the green energy that the park produces. The interest in becoming a unit owner in stages 3 and 4 of Karlskrona Solpark has been great. It is now also clear that the construction group Skanska will be the sole owner of all shares in stage 4.
– That we are now continuing our investment in Karlskrona Solpark is very good. The interest has been high and the fact that a major national player such as Skanska has booked up for the entire stage 4 is proof that the solar park is attractive. It is clear that many have realized that Karlskrona has good conditions for solar energy and we look forward to now doubling the size of the solar park together with Swede Energy, says Robbert Prinselaar, product manager for solar energy at Affärsverken.
Advanced Soltech's subsidiary in China, has signed two orders with WuHu ChiLan Intelligent Technology Co. Ltd. and Hu Xinlei Plastic Technology Co. Ltd. The orders is for the installation of two solar energy plants of 0.8 megawatts (MW) and 0.75 megawatts (MW) and are estimated to generate annual revenues of approximately SEK 1.18 million, or approximately SEK 23.6 million during the agreement's 20-year term. The investment in the facilities, which will be owned by our wholly owned subsidiary, amounts to approximately SEK 8.65 million and construction is planned to start in the second quarter of 2021.
Advanced Soltechs CEO Max Metelius comments:
-We see strong demand for renewable energy in general and our offering in particular.
On April 20, Soltech Energy Sweden AB (publ) acquired 100 percent of the shares in Rams El AB with access on May 3, 2021. The company has sales of approximately SEK 70 million and 30 employees based in Angered. The plan now, together with Soltech, is to integrate solar energy into the product range and increase both sales and earnings. The acquisition means that the Soltech Group further strengthens its offering in electrical engineering and installation linked to solar energy, charging and storage. The acquisition of Rams El is financed entirely from its own cash and with newly issued Soltech shares. Rams El is expected to contribute approximately SEK 46 million in sales during 2021 (8 months) with a positive result.
Soltech has an offensive growth strategy with acquisitions in the solar, roof, facade and electrical engineering industries. Together, these companies will create synergy effects and build a strong group with cross-border expertise. As part of the growth strategy, Soltech has now acquired its second company in the electrical engineering industry, which will strengthen Soltech's positioning as a partner in electrification, solar energy and charging and storage infrastructure.
– We are very pleased to welcome Rams El to Soltech, which will be our second acquisition in the electrical engineering industry. It is a well-known company in a growing region whose corporate culture is permeated by long-termism and professionalism, something that is completely in line with our values. This means that we are even more equipped for an electrified future and to offer our customers a powerful solar energy group with the capacity to take responsibility for the entire value chain, says Stefan Ölander, CEO of Soltech Energy.
Established player in the Gothenburg area
Rams El was founded in 1993 and has since had a successful history and specializes in, among other things, electrical engineering, telecommunications and network installations and service work. The company's customers are found in both the public and private sectors, where the projects often consist of hospitals, industries, schools and commercial properties. Now the company is adding solar energy to its competencies when joining the Soltech Group.
– That we now become part of Soltech is something we look forward to. Soltech is the ultimate owner as the demand for expertise in solar technology grows daily. The fact that we can now add solar energy to our core business will create positive rings on the water, for both customers and employees but also in the industry. We are ready to take the step from being more of a traditional electrical engineering company to now also becoming a solar technology company and it is a very exciting journey that starts today, says Johan Adelbjer, CEO of Rams El.
Six of the Group's companies have together offered a project with a comprehensive guarantee that will be the Nordic region's largest façade-integrated solar energy plant of 3,500 m2. Lustgården Ädelmetallen AB in Jönköping ordered the facility with a total order value of SEK 12 million.
Soltech Energy's CEO Stefan Ölander comments:
– I am very proud of this deal as it demonstrates unique synergy effects between six of our companies and also the strength of the group. I am sure that more and more construction companies and property owners will want to minimize the number of contractors and get a complete guarantee by doing as Lustgården Ädelmetallen AB does now.
Facts about the project in Jönköping
The property is over 200 meters long and in total over 3500 m2 of facade will be covered by solar cells. Approximately 5,000 of Soltech's type-approved facade solar cells will transform the old industrial building, now clad in turquoise sheet metal, into a landmark in southern Sweden. The panels are complemented with "dummie glass" in the same color, which will make the property a magnificent glass cube. Construction will start during the second quarter with completion during the fourth quarter of 2021.
The following Soltech companies contribute with their expert competence:
Soltech Sales & Support and Swede Energy – The solar cell façade
Fasadsystem in Stenkullen – Support for the facade
Takrekond – New roof of 21,000 m2
Provector – Electrical installations
NP Gruppen – Sheet metal job
The competence that we possess together is unique, there is no other supplier on the market that in a contract can deliver a complete solution to the customer with one and the same interface. Not least from a guarantee perspective, is this interesting for customers, says Stefan Ölander.
Lustgården Ädelmetallen AB´'s CEO and owner Niclas Järvhammar, comments:
– It feels good to strengthen our environmental profile by working with sustainable and innovative solutions. Soltech's stylish and solar cell integrated glass facade will make our property unique and talked about. In addition, getting six different suppliers together under one quote is great and something we look at very positively.
Advanced Soltech's subsidiary in China has signed orders with ZhangZhou LaiFu Furniture Co. Ltd. and ZhangZhou YueYuan Food Co. Ltd. These apply to the installation of two solar energy plants of 0.8 and 0.43 megawatts (MW), respectively, and are estimated to generate annual revenues of approximately SEK 0.93 million, or approximately SEK 18.6 million during the agreements' 20-year term. The investments in the facilities, which will be owned by ASAB's subsidiaries, amount to approximately SEK 6.85 million. No subsidies are paid for these projects and construction is scheduled to start in the second quarter of 2021.
Advanced Soltech's CEO Max Metelius comments:
– We see a strong demand for green electricity in China and continue to bring in new customers of good quality. Today we are achieving good profitability in our projects without subsidies and our assessment is that the development for solar energy in China will be very strong for a long time to come.
In the motivation for the award in the eighth edition of the "Solar Energy Cup" it is mentioned, among other things, "The innovative business model that does not take up valuable land resources and the high reliability and quality that Advanced Soltech delivers in its installations" "Solar Energy Cup" was launched as early as 2012 and is an authority in the Chinese solar industry.
Advanced Soltechs CEO Max Metelius comments:
- Advanced Soltech is proud to contribute to the restructuring of China's energy supply in a green direction by using technologically advanced and secure solar energy installations.
Clarification regarding tissue settlement
• The acquisition payment for 100% of the shares amounts to SEK 53 million
• The acquisition is paid for with an initial cash portion of SEK 20 million and with newly issued Soltech shares to a value of SEK 25 million. In addition, a cash portion of SEK 8 million maturing during Q2 2021
• A total of 716,332 shares are issued at an average price of SEK 34.9 / share
• After 12, 24 and 36 months, a total of approximately SEK 6.7 million / year can be paid out in a variable additional purchase consideration if the set sales and profitability targets are achieved which would give a total acquisition payment of SEK 65.1 million