In 2024, about 65,000 new solar installations are expected in Sweden, according to a new forecast from the Swedish Solar Energy Association. Despite a lower growth rate in the market, Soltech aims to further strengthen its position.

– The solar energy forecast from Svensk Solenergi shows more healthy market levels, and our strength with a well-diversified business is now increasingly evident. By growing in solar and tech and at the same time nurturing our subsidiaries’ original core competencies, we are well positioned and strongly equipped for the future, says Stefan Ölander, CEO of Soltech Energy.

SEK 8 billion with 10 percent profitability
Despite the challenging macroeconomic situation, the Group has a positive outlook for 2024 and the coming years. The transformation of traditional companies into solar companies continues and a strategic review of the ownership in Gigasun (formerly Advanded Soltech) is being conducted. As a market leader in large-scale battery parks and with more than 2,000 MWp in the solar park portfolio, Soltech continues to deliver on the stated strategy with a focus on profitability and organic growth.

– Soltech’s management’s main priority now and in the future is quality, profitability and growth. Both by continuing to develop our 22 companies, but also by continuously evaluating all measures that can increase shareholder value. We will continue to deliver on our long-term strategy with the aim that the Soltech Group has a turnover of SEK 8 billion with a profitability of 10 percent in five years, Stefan Ölander concludes.

Soltech Energy in brief:

• 22 operating companies in solar energy, charging and storage, electrical engineering, façade and roofing
• Approximately 1,000 employees in Sweden, Spain and the Netherlands
• Strong growth of 50 percent in the past year, from SEK 1.9 billion in 2022 to SEK 2.9 billion in 2023
• In 2023, Soltech had sales of SEK 2,904 million with an EBITDA of SEK 128.5 million
• Listed on Nasdaq First North with approximately 75,000 shareholders

Over the past three years, Soltech Energy Solutions has established a business area with a focus on the development of solar park projects, which in most cases also include batteries. The project portfolio includes building rights and land agreements, with the majority of the projects in the development phase being located in the SE4 electricity grid area.

Soltech’s focus when it comes to solar and battery parks is to develop projects, build and manage operation and maintenance. Not in owning the operational parks, with the exception of Soltech’s own battery park in Falkenklev and the solar park in Öringe, which are currently being built and which will contribute with stable revenue streams for Soltech for a long time to come. Therefore, in July 2023, the process was initiated to find an investor with the ambition to become a long-term owner of the rest of the solar park portfolio, and together with Soltech, further develop the portfolio through exploration and, above all, construction.

The development of the portfolio has, of course, continued during the autumn of 2023, and not least the planning and qualification of new projects has been very efficient during the period. As a result, the portfolio now amounts to more than 2,000 MWp, of which approximately 750 MWp is under permitting approval. This means that a significant part of the portfolio’s value is tied to future development, for which Soltech is not in direct need of increased financing. This also means that the mature projects that are in the phase close to construction, and which are best suited for divestment to external investors, now only constitute a small part of the portfolio.

In light of the development that took place during the autumn of 2023, Soltech no longer assesses that a divestment of a majority of the project portfolio, in a single transaction with one and the same investor, is the right way to maximize the value of the assets. Instead, the plan is to divest individual projects such as the solar park in Ramsjöholm that is already under construction, or smaller clusters of other projects, as they reach the right level of maturity. This gives Soltech the opportunity to retain future value potential through continued refinement of the early projects, while selective divestment of mature projects creates long and stable revenues over time from construction, operation, maintenance and support services such as large energy storage solutions.

– Soltech Energy Solutions has quickly built up a business area for solar parks that has a great financial value for the Group and which we now look forward to further developing over time together with several investors with different focuses in terms of degree of maturity and size of solar park projects. Our aim is that this will accelerate the green energy transition as well as Soltech’s growth and profitability in both short and long term, says Stefan Ölander, CEO of Soltech Energy.

CEO’s comments
In the fourth quarter of 2023, despite strenuous market conditions, Soltech reaches net sales of SEK 740.6 million and an EBITDA of SEK 58.1 million. Our cash flow is positive and our liquidity is strengthening. For the full year of 2023, we reach net sales of SEK 2,904 million, which is an increase of 50 percent, and EBITDA is improved to SEK 128.5 million from SEK -19.8 million, compared to 2022.

Our operational business is profitable
We are pleased to be able to maintain high sales and operational profitability for the fourth quarter of 2023, compared with a strong fourth quarter of 2022. Growth is not as aggressive as last year since we have focused on profitability for 18 months and no major acquisitions have been carried out since October 2022.

2024 will be a challenging year, but with the hope of future interest rate decrease and clear rules of the game in the solar market, the underlying need and demand for a green transition and hopefully a more stable global climate , I see upon the future with confidence.

Stefan Ölander
CEO

FOURTH QUARTER HIGHLIGHTS

• Net sales increased by 1% to SEK 740.6m (732.4)

• The Group’s organic growth was -3% (81)

• Adjusted EBITDA amounted to SEK 58.1 (52*) million. The adjusted EBITDA margin was 7.8% (7.1*%). EBITDA of SEK 58.1m (101.4)

• Adjusted EBITA amounted to SEK 41.5 (46.1*) million. The adjusted EBITA margin was 5.6% (6.3*)

• Earnings after tax for the quarter amounted to SEK -120.2 (-59.7) million. Earnings were affected by non-cash effects of write-downs and profit from participations in the associated company Gigasun of SEK 131.9 M (121.3)
• Cash flow from operating activities amounted to SEK 102.4 (-4.9) million. Cash flow for the quarter was MSEK 50.8 (26.7).
• Earnings per share before and after dilution amounted to SEK -0.91 (-0.46)

JANUARY – DECEMBER IN BRIEF

• Net sales increased by 50% to SEK 2,904.4m (1,931.4)
• The Group’s organic growth was 26% (57%)
• Adjusted EBITDA amounted to SEK 128.5 (-8.8*) million. Adjusted EBITDA margin was 4.4% (-0.5*). EBITDA amounted to MSEK 128.5 (-19.8)
• Adjusted EBITA amounted to SEK 75.4 (-41.5*) million. The adjusted EBITA margin was 2.6% (-2.1*%). EBITA of SEK 75.4m (-52.5)
• Earnings after tax for the period were SEK -165.9 (-224.2) million. Earnings were affected by non-cash effects of write-downs and profit from participations in the associated company Gigasun of SEK 156.2 M (114.1)
• Cash flow from operating activities amounted to MSEK 2.3 (-191.3).
• Cash flow for the period was MSEK -62.5 (-60.8)
  
• Earnings per share before and after dilution amounted to SEK -1.25 (-1.73)

Soltech has agreed on a new supplier of quarterly report analyses and will continue to collaborate with Inderes Oyj, which is currently conducting an initiation analysis of Soltech with completion in March. Thus, no report analysis performed by an external analysis house follows Soltech’s year-end report 2023.

Going forward, Inderes will conduct and publish quarterly analysis reports on Soltech.

The quarterly report and other financial reports are available at: https://soltechenergy.com/investerare/finansiella-rapporter-kalender/

Most recently, Camilla Weiner worked at the communications agency Hallvarsson & Halvarsson, as a senior advisor. Camilla has more than 25 years of experience in implementing change, leading and developing communication, investor relations, sustainability and branding in growth companies and listed multinational companies.

CEO Stefan Ölander comments:

– Soltech has grown significantly over the past five years and we have a need to strengthen the company’s communication and take a clearer grip on our IR efforts in particular. Camilla has a broad experience of communication and brand work in listed companies and I am very pleased to in March welcome Camilla to lead the continued development.

The shell of a building no longer only has to have an insulating effect. With integrated solar cells in the façade, the property takes advantage of more of the sunrays, while at the same time being given an aesthetically pleasing exterior.

A photovoltaic façade is also a suitable complement to a rooftop photovoltaic system. An example of the combination of roof-mounted solar panels and architect-designed solar cell façade can now be found at Fastpartner’s office property in central Frösunda in Solna.

– We are proud to have designed and installed this beautiful solar façade for Fastpartner. The façade gives the property a building envelope that is not only aesthetically pleasing but also generates renewable solar electricity. It also feels great that several Soltech companies have helped to create an energy-producing property, says Tommie Standerth, CEO of Fasadsystem.

The design of the solar façade is specially adapted to turn the solar panels into the best possible position, but also to ensure that the solar panels are adapted to the rest of the building in terms of design. In the future, the property’s operations will receive solar electricity from both the solar façade and the roof-mounted solar system that Soltech Energy Solutions previously installed.

–This property has now become a forerunner that other property owners and community developers should take a look at. If the aim is to create a cityscape at the intersection of design, sustainability and functionality, solar facades should be a matter of course for every major building project in the future, concludes Tommie Standerth.

Photo: Roger Spetz, Gatun Arkitekter

Over the past five years, Soltech has increased revenues from approximately SEK 50 million to almost SEK 3 billion (the period Q4 2022 to Q3 2023) and is today a Group with 1,000 employees in three countries. The Group's rapid and planned expansion, which has taken place through acquisitions of companies and high organic growth, has entailed major investments and Soltech has according to plan shown red figures during the period. Over the past four quarters, however, profitability has been in focus and has gradually improved.

In November 2019, Soltech communicated a five-year goal of reaching revenues of SEK 4.7 billion in 2024. Given that rapid growth through acquisitions is no longer the main focus, Soltech makes the assessment that the previous revenue target will not be reached in 2024. Soltech's new financial goal is to reach SEK 8 billion by 2028 with an increased profitability target from 8-10 percent to 10 percent (EBITA). During the five-year period, strategic acquisitions will be made when the right opportunity arises.

CEO Stefan Ölander comments on the market outlook and the new financial target:

– Solar energy and all its surrounding products and solutions, such as charging, storage and balancing services, are an obvious industry of the future, according to both national and international analyses. The Soltech Group's comprehensive offering with all these areas and our expertise in roofing, façade and electrical engineering has resulted in a strong position in our three markets. A position we look forward to strengthen to reach our new target of SEK 8 billion in revenues with 10 percent EBITA in 2028.

The energy of the future
Solar energy has taken on an increasingly growing role in the energy market and will continue to be part of the green transition and an important part of the solution to meet the global energy challenges. Solar has the potential to cover 25 percent of Sweden's energy needs in the long term, but today solar only accounts for 1-2 percent.

The market has great potential and will therefore grow strongly. A market where Soltech have a leading part and will continue to keep that position in the future.

The Dutch solar energy company 365zon has once again won a solar energy order for the largest homeowners' association in the Netherlands. The association organizes solar energy auctions to offer its members opportunities to obtain market-leading solar consulting and installation services.

The new contract means that 365zon expects to install solar panels on hundreds of houses during Q1 and Q2 of this year.

– It feels great that we have started 2024 with a good auction win. We are pleased to once again have been given the trust to assist our customers in their sustainability efforts, says Lars Buuts, CEO of 365zon.

– I want to express my congratulations to Lars Buuts and his team who have started this year with an impressive accomplishment. To get renewed confidence from a homeowners association proves that 365zon is considered as a very trustworthy company to cooperate with, says Stefan Ölander, CEO of Soltech Energy.

Soltech Energy had an eventful 2023. The Group has grown to consist of more than 1,000 employees in Sweden, Spain and the Netherlands, and a total of five bolt on-acquisitions were made to strengthen existing companies. An acquisition of an electrical engineering company in the Stockholm area was also carried out.

In terms of operations, a number of major projects were initiated in the Group in which large-scale tech solutions will be delivered to energy companies, property owners and other community builders. In the solar park area, Soltech has a growing portfolio with a potential exceeding 1,000 MWp. This portfolio has been built up in recent years and will be sold off on an ongoing basis, as communicated in July 2023.

Another sign of strength during the year was organic growth. During the interim period January-September, it amounted to a full 41 percent, which testifies to the fact that the subsidiaries are developing in the Group. Together, net sales of more than SEK 2 billion were also delivered in the first three quarters of 2023 with significantly improved profitability.

– Regarding our focus areas of quality, profitability and growth, I look back on 2023 with pride. The fact that organic growth remains high is proof that our companies offer quality and enjoy being part of Soltech. In addition, it contributes to us having four consecutive quarters of improved profitability, which together with our growth creates even better conditions for us in the future, says Stefan Ölander, CEO of Soltech Energy.

Solar energy 2024
Solar energy development continues to make strong progress globally and is predicted to increase even more in 2024. Not least after new EU directives on solar cells on properties and after the conclusions of the UN climate summit COP 28 in Dubai. A historic summit that stated, among other things, that a tripling of renewable energy capacity by 2030 is needed.

In Sweden, solar energy and green technology solutions also progressed. The development of larger solar parks, rooftop installations, charging stations and larger battery storage facilities was strong in 2023 and is expected to grow further in 2024. Regarding the private market, however, the Swedish solar energy industry had a lower growth compared to 2022. This was mainly due to high interest rates and lower electricity prices. Despite this, the number of private installations still increased by almost 100 percent in 2023.

– Many factors indicates that solar will increase sharply, both in Sweden and globally. Not least after COP 28 pointed out the importance of increased investments in renewable energy sources and that we hopefully see falling interest rates in the coming years. As a Group, we are well positioned for the green transition that is now accelerating. We look forward to further consolidating our position as a leading player in the solar energy market during the year, concludes Stefan Ölander.

Three highlights from Soltech Energy 2023

• Entrepreneurs and employees
  In challenging times, we are growing to over 1,000 employees, which is a sign of strength
• The transition to profitability yielded results
  Ahead of 2023, the focus on profitability gradually increased. This resulted in four consecutive quarters of improved profitability
• More large-scale projects and agreements
  In 2023, the Group increased the number of large-scale projects. These include a project development agreement with Norwegian Solgrid with the aim of 300 MW of ground-mounted solar energy, its own 70,000 sqm solar park and several major battery agreements

Three predictions for the solar energy industry in 2024

• The private market is predicted to peak again
  Interest rate cuts are underway in 2024 and 2025. This will have a positive impact on Swedish homeowners' willingness to invest in green energy

• The increase of hybrid solutions
  One of the trends in 2024 is expected to be an increased focus on hybrid solutions that include both solar energy and tech solutions such as large-scale energy storage. The development took off already in 2023 but will now increase further. Through hybrid solutions, larger properties can become their own electricity producers and at the same time support an already strained electricity grid

• Solar panels on large properties can no longer be deprioritized
  Many properties already have solar panels, but even more are still lacking solar panels. To have a chance of meeting the solar energy targets in the EU's Energy Performance of Buildings Directive (EPBD), the pace of solar cell installations must increase significantly. More areas on properties must be used for solar energy solutions and therefore solar facades will become an increasingly important complement

Photo: Soltech Energy/Gustaf Kumlin

The new assignments will be carried out at Catena's properties, where Netonnet, PostNord and Survitec currently operate. All properties will have energy storage of 0.5 MW. Survitec and PostNord will also have roof-mounted solar energy installations installed.

– We are very pleased with the increased confidence we have received from Catena. In November, we agreed on a solution including solar energy, energy storage and roofing contract at one of their logistics properties in Borås. Now we look forward to helping them in the development of three properties in Gothenburg, says Pierre Sahlin, Head of the Solar Energy Department at Takorama Elteknik.

– We are now agreeing on additional solar, re-roofing and energy storage projects with Takorama Elteknik. As a property owner, it is our task to offer long-term sustainable logistics properties and this agreement is an important part of that work, says Jonas Arvidsson, Regional Manager at Catena.

The solar energy company Sud Renovables became part of the Soltech Group in 2022. The company, with approximately 150 employees, is active in solar energy and storage solutions. The projects often consist of large-scale solar cell facades, roof-mounted photovoltaic systems, floating installations but also solar- and energy storage solutions for private individuals and companies. The company is broadening its operations geographically as a result of high demand for its innovative and profitable installations.

Sud Renovables has now opened up its operations in Palma, Mallorca, but will also offer solar installations to private individuals and companies on the other major islands in the Balearic archipelago.
 
– We are pleased to strategically strengthen our presence in the Balearic Islands. With fantastic solar radiation and a high level of sustainability awareness, not least among the islands' Nordic residents and businesses. It is a place where solar energy is on the rise. It therefore feels very good that Sud Renovables and Soltech now operates in the area under the leadership of Josep Maria Rigo, says Alfred Puig, CEO and co-founder of Sud Renovables.
 
– I would like to warmly congratulate to the opening of the new branch. Sud Renovables is a very well-managed and profitable company that is in the forefront of renewable solutions and is now broadening its operations geographically, which we believe will create great value. Both for the Group but foremost for the continued climate transition in Spain, says Stefan Ölander, CEO of Soltech Energy.