Falck Renewables S p A : Board of Directors approves interim financial statements at 31 March 2021

PRESS RELEASE

Board of Directors approves

interim financial statements at 31 March 2021

Revenues up despite poor wind conditions,

financial stability confirmed

Significant pipeline growth: 3.5 GW reached (+25%)

2021 guidance reaffirmed

ECONOMIC AND FINANCIAL RESULTS

• Revenues reached €128.7 million, compared to €121.0 million in Q1 2020;
• Ebitda1 at €62.8 million compared to €72.5 million in Q1 2020;
• Profit before tax at €31.4 million compared to €39.0 million in Q1 2020;
• Net financial debt, including fair value of derivatives, dropped to €699.7 million from €705.5 million as at 31 December 2020;
• Capex of €13.7 million compared to €37.6 million in Q1 2020.

MAIN INDUSTRIAL RESULTS

• Lower than expected wind and solar production (-5.3% in Q1 2021, compared to +14% in Q1 2020), resulting in lower production volumes than in Q1 2020 for a total of 821 GWh (-10%). Installed capacity increased in the United States by +62 MW (producing 37 GWh in Q1 2021);
• Increase in energy prices in Italy (+11% year-on-year), Spain (+18%), Sweden and Norway (+21%);
• Business Development: project pipeline reached a volume of 3.5 GW (+25% compared to end-December 2020), of which 1.1 GW has permitting underway. Projects in phase II + III of development: +150 MW compared to end of December 2020;
• First authorisation obtained for an agri-voltaic plant in Sicily (10 MW) for with development started only 18 months ago;

• Ebitda is defined by the Group as profit for the period before investment income and expenses, financial income and expenses, depreciation, amortisation, impairment losses, provisions for risks and income taxes.

Falck Renewables SpA

Via Alberto Falck, 4-16 (corner of Viale Italia), 20099 Sesto S. Giovanni (MI) - P [phone] - W www.falckrenewables.eu Share Capital € 291,413,891.00 fully paid in Direction and coordination by Falck SpA

Registered offices: Corso Venezia, 16, 20121 Milan - Trade Register, Tax Code and VAT no. 03457730962 - Economic and Administrative Index no. MI - 1675378

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• Energy Management: significant growth with 512 GWh dispatched in Italy and the UK (+34% year-on-year), of which 333 GWh derived from our own assets and 179 GWh from third-party assets.

Milan, 12 May 2021 - The Board of Directors of Falck Renewables SpA has reviewed and approved the interim financial report as at 31 March 2021.

CEO Toni Volpe commented:

"We continue to successfully implement our growth strategy, developing new projects and further strengthening our industrial expertise in asset and energy management. For 2021, despite the poor wind conditions in the first quarter, we are confident that we will meet our targets."

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Consolidated financial results at 31 March 2021 and 2020 (€ thousands)

	31.3.2021	31.3.2020
ARevenues	128,719	121,034
Direct costs	(69,803)	(54,590)
Personnel costs	(12,887)	(11,554)
Other income	2,492	5,118
Administrative expenses	(7,402)	(11,023)
Net margin from trading activities	(180)	83
B Operating profit/(loss)	40,939	49,068
Financial income/(expenses)	(9,418)	(10,785)
Investment income/(expenses)		(31)
Share of profit of investments accounted for using the equity	(109)	710
method
C Profit/(loss) before tax	31,412	38,962
Ebitda *	62,840	72,516

1. Ebitda is measured by the Falck Renewables Group as profit for the period before investment income and expenses, net financial income/expenses, amortisation and depreciation, impairment losses, allocations to risk provisions and the income tax expense.

In the first quarter of 2021, the Falck Renewables Group recorded consolidated revenues of €128.7 million, up 6.3% compared to €121.0 million in the first quarter of 2020.

The increase in revenues reflects several opposing dynamics, which can be summarised as follows:

1. approximately €2.1 million for the change in the scope of consolidation due to the acquisition of the plants of Building Energy Holding US LLC, carried out at the end of November 2020, with an installed capacity of 61.6 MW;
2. approximately €11.7 million due to the higher volume of energy sold by Falck Next Energy Srl;

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1. approximately €2.1 million for higher revenues from consortia managing the interruptibility service in the Italian energy market;
2. approximately €2.9 million for the increase in electricity prices, mainly in Italy, Spain and Scandinavian countries (Sweden and Norway);
3. approximately €14.1 million of lower revenues due to lower wind production in UK, Italy, France and Scandinavian countries (Sweden and Norway), partially offset by higher production in Spain;
4. approximately €2.9 million for higher energy production at the biomass plant which, in Q1 2020 was temporarily shut down for scheduled maintenance, and the increase in quantities relating to the waste disposal and treatment service for the WtE plant in Trezzo sull'Adda;
5. approximately €0.7 million for negative exchange rate effects mainly related to the British pound and the US dollar;
6. €0.4 million for higher revenues in the services segment.

GWh produced globally by all of the Group's technologies amounted to 821 compared to 912 in the first quarter of 2020 (-10%).

Moreover, the average depreciation of the British pound against the euro and the US dollar against the euro, compared to the previous period, amounted to 1.3% and 8.5% respectively.

The following are the main changes in consolidated revenue by segment:

Wind power: the segment reported revenues of €82.1 million, down 7.7% from €88.9 million in the first quarter of 2020, mainly due to lower wind production in the UK, Italy, France and Scandinavian countries (Sweden and Norway), partially offset by higher production in Spain, which reduced revenues by approximately €14.1 million. This negative performance was partially mitigated by the increase in electricity prices in Italy, Spain, Scandinavian countries (Sweden and Norway) and the UK for about €6.1 million, as well as by the above-mentioned change in the scope of consolidation, due to the acquisition of Building Energy Holding US, LLC, which increased the installed capacity by 30 MW.

The GWh generated in the wind sector in the first quarter of 2021 amounted to 724 compared to 832 recorded in Q1 2020 (-13%).

Solar, biomass and WtE: the segment posted revenues of €17.7 million, up 29% compared to €13.8 million in the first quarter of 2020, mainly due to the restart of the biomass plant that was temporarily shut down for scheduled maintenance in the first quarter of 2020 and the increase in the quantities relating to the waste disposal and treatment service for the WtE plant in Trezzo sull'Adda, as well as the above-mentioned change in the scope of consolidation due to the acquisition of Building Energy Holding US LLC, which increased the installed capacity by approximately 31.6 MW.

Services: the segment posted revenues of €13.2 million, up 30.6% from €10.1 million in the first quarter of 2020, mainly due to higher revenues of approximately €2.1 million from consortia managing the interruptibility service in the Italian energy market and additional services provided by the Vector Renewables España group.

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Other businesses: revenues of €43.8 million increased significantly (+108%) compared to €21.0 million in the first quarter of 2020 as a result of Falck Next Energy Srl's energy sales activities for the plants of the Group.

The breakdown of revenues by category of activity is as follows:

		(€ thousands)
	Q1 2021	Q1 2020
Sale of energy from electricity and heat and other goods	112,980	107,824
Waste disposal and treatment	5,675	5,025
Plant maintenance	9,740	7,516
Other operating income	324	669
Total	128,719	121,034

Other income decreased to €2.5 million from €5.1 million in the first quarter of 2020, which was positively impacted by the €4.0 million gain realised on the Group's sale of its 50% interest in Novis Renewables LLC. This difference was partially recovered in the first quarter of 2021 by higher service revenues of €820 thousand and higher operating and capital grants of €574 thousand compared to the previous period.

Ebitda for the first quarter of 2021 amounted to €62.8 million (€72.5 million in the first quarter of 2020), down as a result of the aforementioned revenue trends and higher costs mainly related to the increase in operating capacity, the consolidation of Building Energy Holding US LLC and the strengthening of the structure, necessary to cope with the development of the new initiatives envisaged in the Industrial Plan. Ebitda as a percentage of revenues was 48.8% (59.9% in the first quarter of 2020).

Operating profit amounted to €40.9 million (€49.1 million in the first quarter of 2020) and as a percentage of revenue was 31.8% (40.5% in the first quarter of 2020).

Net financial expenses fell by €1.4 million compared to the first quarter of 2020. This reduction was due to lower exchange rate losses and to the management's actions aimed at improving the efficiency of financial costs through debt renegotiations, offset by the effect of imputed charges on the convertible bond, valued at amortised cost, amounting to €1.2 million (special item).

In the first quarter of 2021, the Falck Renewables Group recorded a profit before tax and minority interests of €31.4 million (€39.0 million in the first quarter of 2020).

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