Voltalia : After a strong growth in the first half of 2020, Voltalia confirms its medium-term trajectory

PRESS RELEASE

September 24, 2020

After a strong growth in the first half of 2020, Voltalia confirms its medium-term trajectory

Very strong growth in H1 2020

• In H1, growth1 in revenues (+73%), EBITDA (+111%) and seasonal net loss (+77%) despite low wind resource in Brazil: new power plants and expansion of external services

Growth confirmed, despite temporary activity delays and currency effects impacting 2020 EBITDA

• Strong H2 improvement expected due to the seasonality of wind resource in Brazil and commissioning of new plants: H2 EBITDA expected to be 4.2 times H1 EBITDA, at constant exchange rates
• However, in H2, the Covid-19 crisis is strongly impacting the Brazilian real and slows down temporarily construction schedules of Voltalia plants and orders from third-party clients (Services)
• Rebasing 2020-2023 sequence of EBITDA ambitions accordingly (with EUR/BRL assumed at 6.3): around €100 million in 2020 (vs €160-€180 million), around €170 million in 2021 and €275-€300 million in 2023 (confirmed)
• Capacity ambitions are confirmed: 1 GW in operation by end 2020 and 2.6 GW in operation and construction with increased proportion of solar and a greater geographic diversification

Outstanding development and commercial activity since the beginning of the year

• Record level of new power sale contracts, reaching 867 MW since January (x2.2 compared with full year 2019)

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Voltalia (Euronext Paris ISIN code: FR0011995588), international player in renewable energies, announces today its H1 2020 results2.

Voltalia will comment on its H1 2020 results and short to mid-term perspectives during a live webcast starting at 8.30 AM Paris time on Thursday 24, 2020. All connection details are available on our website: https://www.voltalia.com/uk/investors.

"Voltalia recorded very strong growth in the first half of 2020. The contribution of new power plants, our expansion in Europe and Africa, the rebalancing towards solar and our strategy to develop Services to third-party clients supported this achievement. Voltalia's performance would have been even better without poor wind conditions in Brazil and currency variations. We adjust the 2020 EBITDA ambition to take into account a Brazilian real now weak and the effects of the covid- 19 crisis on our construction sites and on our clients' activity but we confirm our year-end ambition of 1 GW of installed capacity. Looking beyond 2020, the momentum remains very strong. The record-high level of new contracts won since the beginning of the year (867 MW) supports our long-term capacity and results growth." comments Sébastien Clerc, CEO of Voltalia.

1 At constant exchange rates

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Key figures

						Change
In € millions		H1 2020		H1 2019		At actual rates		At constant rates
Revenues		88.4		56.9		+55%		+73%
EBITDA		23.8		13.9		+71%		+111%
EBITDA margin		27%	24%		+2.4 pts		+5.3 pts
Net profit (Group share)		(15.8)		(8.7)		+81%		+77%

H1 2020 total consolidated revenues stands at €88.4 million, up by 73% at constant currency, and H1 2020 total consolidated EBITDA stands at €23.8 million, up by 111% at constant currency. The EBITDA margin, at 27%, improves by

5.3 points at constant currency, notably thanks to a better mix of activity in Services which is more than offsetting poor wind conditions in Brazil. Net profit (Group share), which is, as in the past, negative due to the seasonal nature of the wind resources of the power plants owned by Voltalia, also records a growth in volume with a net loss (Group share) increasing by 77% at constant exchange rates.

Business review

Energy sales: revenues and EBITDA growth thanks to portfolio growth and despite lower wind resource

						Change
In € millions	H1 2020		H1 2019		At actual	At constant
Before eliminations of services provided internally				Rates	rates
Revenues		62.1		45.5		+36%			+54%
EBITDA		32.9		27.4		+20%			+36%
EBITDA margin		53%		60%		-7.2 pts			-7.1 pts
Production (in GWh)		915		757		+21%
Installed capacity (in MW, end of period)		820		534		+54%

H1 2020 revenues are €62.1 million, up by 54% at constant currency, and EBITDA is €32.9 million, up by 36% at constant currency, driven by the increase in installed capacity in operation across geographies, reaching 820 MW at the end of June 2020. The EBITDA margin is down by 7.1 points, impacted by lower wind resource in Brazil and the consolidation of Helexia.

• In Brazil, 54% of energy sales (vs. 73% in H1 2019), typical business seasonality is amplified by particularly unfavourable weather conditions with an EBITDA impact of -€2.5 million compared with last year and -€7.5 million for an average wind resource. In addition, the sanitary and economic crisis sees a strengthening of the euro, especially against emerging currencies. The average EUR/BRL rate is 5.4 in H1 2020 compared with 4.3 in H1 2019, resulting in a translation impact of -€4.5 million on the EBITDA. On the other hand, new wind projects generate €6.3 million of EBITDA in H1 2020.
• In France, 29% of energy sales (vs. 23% in H1 2019), the deconsolidation of the Coco-Banane solar plant's EBITDA is offset by the positive contribution of new hydroelectric and solar (including Helexia's rooftops) power plants and the good performance of other existing power plants.
• In other countries (United Kingdom, Belgium, Portugal, Spain, Italy, Greece and Egypt), 17% of energy sales (vs. 4% in H1 2019), EBITDA is materially higher, mostly driven by the excellent performance of the Râ Solar plant in Egypt, above expectations, and Helexia's integration.

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Recently acquired Helexia, a solar rooftop and energy efficiency specialist consolidated since July 2019, represented 18% of H1 2020 energy sales. Helexia's revenues were 24% higher when compared with H1 2019 for an EBITDA margin of 35%, reflecting a less capital-intensive model than Voltalia's historical Energy sales business.

Services: lower internal EBITDA more than offset by higher external EBITDA to third-party clients

						Change
In € millions	H1 2020		H1 2019		At actual	At constant
Before eliminations of services provided internally				rates	rates
Revenues		49.9		73.9		-32%			-29%
EBITDA		-1.9		1.2		NA			NA
EBITDA margin		-4%		2%		NA			NA

H1 2020 Services revenues were down 29% at constant exchange rates on H1 2019, with negative EBITDA reflecting lower internal sales which are eliminated in the consolidated accounts.

• Development, Equipment Procurement and Construction (78% of H1 2020 Services sales) recorded lower sales and EBITDA. This is due to (i) increased early-stagedevelopment costs to support geographic diversification, and (ii) less internal billing compared with H1 2019 which enjoyed significant contribution from the Cacao project in French Guiana and the Râ Solar project in Egypt. In parallel, external sales accelerated thanks to Construction contracts in progress, particularly in Africa and in Europe (mainly Portugal), and to the sale of two Brazilian ready-to-buildwind projects for a total of 94 MW to Total-Eren3 and Toda4.
• Operation & Maintenance (22% of H1 2020 Sales) recorded higher sales, including the contribution of Greensolver, but remained below breakeven, pending higher volume of activity to be derived from new business secured and from
  Voltalia's growing portfolio of plants.

Overall, the increased share of external sales to third-party clients in the activity mix resulted in much lower eliminations, with Eliminations and corporate costs at €7.2 million, down from €14.7 million in H1 2019. This better mix contributed to the improvement of the total EBITDA in absolute terms and relatively to revenues, while illustrating once again Voltalia's integrated strategy combining Energy sales and Services.

1. See Q4 2019 press release dated January 22, 2020
2. See press release dated August 25, 2020

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Net result of -€16 million reflecting usual seasonality

						Change
In € millions	H1 2020		H1 2019		At actual		At constant
		rates		rates
EBITDA before eliminations and corporate		31.0		28.6		+8.2%		+27.0%
Eliminations and corporate		(7.2)		(14.7)		-51.1%		-52.0%
EBITDA		23.8		13.9		+71%		+111%
EBITDA margin		27%		24%		+2.4 pts		+5.3 pts
Depreciation/Amortisation/Provisions (DAP)		(22.8)		(9.6)		x2.4		x2.6
Operating revenue (EBIT)		1.2		4.3		-73.0%		+2.8%
Financial result		(14.9)		(15.3)		-2.5%		+14.8%
Taxes and net income of equity affiliates		(4.3)		(0.9)		x4.8		x5.6
Minority interests		2.3		3.2		-27.3%		-11.4%
Net profit (Group share)		(15.8)		(8.7)		+80.6%		+76.8%

Consolidated EBITDA stands at €23.8 million, up by €9.9 million (+111% compared with 2019 at constant currency) driven by the positive development in the business, and despite low wind resource and the weakening of the Brazilian currency (together -€13 million EBITDA impact).

EBITDA margin gains 5.3 points at constant currency, reaching 27% of revenues, also supported by the better mix of activity in Services.

Consolidated EBIT drops at €1.2 million. Depreciation and Amortisation increase by €4.1 million due to new plants commissioning and the consolidation of Helexia. The 2019 figures included EPC-related reversal of Provisions for €6.2 million5.

Financial result improves slightly (by €0.4 million) due to the combined effects of lower interest rates for plants in Brazil and lower EUR/BRL exchange rate, with a total impact of €4.4 million, partly offset by increased project debt and the consolidation of Helexia's debt.

Taxes are up by €3.4 million, mostly driven by the mix of activity with higher Services sales to third-party clients, and the integration of Helexia.

Minority interests record a loss of €2.3 million. Plants co-owned with minority partners have a slower profitability ramp- up profile than fully-owned plants.

In H1 2020, Voltalia reports a €15.8 million Net loss (Group share), up by €7.1 million compared with H1 2019, consistent with the growth in activity. Voltalia's first semesters are characterized by seasonality with high wind regimes in Brazil skewed towards H2 (H2 production 70% higher on average than H1 for the last two years) and with H1 2020 not yet benefitting from the full contribution of new plants.

Simplified consolidated balance sheet

Voltalia's assets are mainly power plants in operation (78% of Property, plant and equipment), and in construction or in development. With 73% of its installed base in Brazil, Voltalia records a translation impact in H1 2020 related to the strengthening of the EUR against the BRL, which also reduces its debt in Brazilian real.

5 See H1 2019 press release dated September 25, 2019

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