| Source: Savosolar Oyj

multilang-release

Savosolar Plc
Company Announcement       22 February 2019 at 12:45 p.m. (CET)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN PART, DIRECTLY OR INDIRECTLY, IN THE USA, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SINGAPORE OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL.

Savosolar publishes prospectus for EUR 5.3 million rights issue and discloses new information

Following the company announcement on 19 December 2018, the Board of Directors of Savosolar Plc ("Savosolar" or the "Company") has today decided to arrange a rights issue totalling approximately EUR 5.3 million (the "Offering") with additional warrants enabling the Company to raise up to a maximum of approximately 3.5 MEUR (the "Warrants"). The Company also releases new information regarding the fact that the Company expects to receive an audit report for the financial year ended 31 December 2018 which will deviate from the standard design.

  • The Company expects to receive an audit report which will deviate from the standard design regarding the Company's financial statements for the financial year ended 31 December 2018. The Company expects a comment in the audit report regarding a material uncertainty related to going concern. The Company expects the audit report to be issued on 14 March 2019.
  • Approximately EUR 5.3 million before transaction costs is expected to be raised in the Offering if fully subscribed. The contribution from full subscription and utilisation of all issued Warrants will amount to at least EUR 1.7 million and at most EUR 3.5 million.
  • The Offering is secured to 80 per cent by subscription commitments and external underwriters. All members of the Company's Board of Directors and the Company's CEO have entered into subscription commitments in the Offering.
  • Savosolar will give all its shareholders registered in Savosolar's shareholder register maintained by Euroclear Finland Ltd ("Euroclear Finland") or Euroclear Sweden AB ("Euroclear Sweden") one (1) book-entry subscription right (the "Subscription Right") for every one (1) share held on the Offering record date. One (1) Subscription Right entitles the holder to subscribe for three (3) offer shares. In addition, Savosolar offers each subscriber of the offer shares one (1) Warrant free of charge for every three (3) offer shares subscribed and paid for in the Offering.
  • The record date for the Offering is to be 26 February 2019 with the last day of trading including the Subscription Rights on 22 February 2019 and the first day of trading excluding the Subscription Rights on 25 February 2019.
  • The subscription price is 0.005 EUR or 0.05 SEK per offer share.
  • The subscription price for the shares that can be subscribed based on the Warrants will be defined based on the 10 days volume weighted average price of the Company's shares on First North Finland during the period 11 November 22 November 2019 with a 30 per cent discount. However, the subscription price shall not be less than 0.005 EUR per share nor higher than 0.010 EUR per share.  Each Warrant is expected to give the right to subscribe for one (1) new share during the period 25 November - 9 December 2019.


Reasons for the Offering and use of proceeds

After increased market activity in 2017, the positive development continued in 2018. Solar heating is, during 2018, for the first time expected to produce more than 1 TWh worldwide (= 1 billion kilowatt hours) and according to market forecasts solar photovoltaic capacity is expected to rise to 240 TWh by 2050. This is due to the fact that solar heating is, in suitable applications, a very competitive form of clean energy production. In addition, international institutions and states continue to encourage companies' environmentally friendly energy solutions through support programs, taxes and subsidies, resulting in interest from many different customer groups.

Savosolar, in turn, has experienced strong sales growth with a turnover of EUR 5.6 million in 2018, which is 578 per cent higher than in 2017. Although Savosolar is well positioned with respect to production capacity, new orders and generally growing demand, the Company needs additional working capital and financial capacity due to projects that will be implemented in 2019 and, therefore, the Company arranges the Offering.

In order to carry out the ongoing and future projects in 2019 and to be able to effectively manage the future workload variations in projects, the Company needs additional working capital. The Company aims to raise approximately EUR 5.3 million through the Offering. If the Offering is fully subscribed, the Company expects to receive approximately EUR 4.3 million in net proceeds after transaction costs amounting to approximately EUR 0.9 million. In connection with the Offering, the Company also issues Warrants free of charge to investors who have subscribed for Offer Shares in the Offering. The Company may therefore additionally raise up to a maximum of approximately EUR 3.5 million in net proceeds, after deducting the estimated expenses for the subscriptions with Warrants payable by the Company, totaling approximately EUR 0.2 million.

The proceeds from the Offering and the Warrants will be used to amortise EUR 0.8 million of capital loans and secure the Company's working capital need of approximately EUR 4.9 million (including the repayment of capital and interest of the bridge loan financing of approximately EUR 0.8 million) so that the Company can deliver signed and potential upcoming orders in 2019 and to pursue a systematic streamlining of operations, achieve profitability targets and be able to respond to increased demand.

The Offering

The Company is offering up to of 1,057,615,242 new shares in the Company for subscription primarily in accordance with the shareholders' preferential subscription right. The Offering is secured to 80 per cent.

Subscription locations of the Offering

The following function as subscription locations:

  1. In Finland, custodians and account operators and
  2. In Sweden, Mangold Fondkommission AB's website at www.,mangold.se and Mangold Fondkommission AB's premises at Engelbrektsplan 2, 11 4 34 Stockholm, Sweden (This email address is being protected from spambots. You need JavaScript enabled to view it., tel. +46 8-503 01 580).

Subscriptions in Sweden are also received by custodians and account operators who have an agreement with Mangold Fondkommission AB regarding the reception of subscriptions.

Prospectus

Savosolar has prepared a prospectus relating to the Offering approved by the Finnish Financial Supervisory Authority on 22 February 2019. The official Finnish language version of the prospectus as well as its unofficial English language translation, including a Swedish summary, is available on Savosolar's website (http://www.savosolar.com) and Mangold Fondkommission AB's website (www.mangold.se) approximately as per 22 February 2019.

Planned time table for the Offering

25 February 2019 First day of trading excluding the right to receive subscription rights
26 February 2019 Record date for the rights issue
1 March - 13 March 2019 Trading period for subscription rights
1 March - 15 March 2019 The subscription period for the rights issue in Sweden
1 March - 19 March 2019 The subscription period for the rights issue in Finland
15 March 2019 Trading starts in intermediary shares (BTA)
21 March 2019 Announcement of the outcome of the rights issue
2 April 2019 Last day of trading in the intermediary shares on First North Finland
4 April 2019 Last day of trading in the intermediary shares on First North Sweden
Week 15, 2019 First day of trading with the Warrants on First North Finland and Sweden (estimate)

Investor Meeting

Investor meeting with Savosolar is to be arranged on 7 March 2019 at Mangold Fondkommission AB's Stockholm Office, Engelbrektsplan 2, 114 34 Stockholm. For more information visit Mangold Fondkommission AB's website, www.mangold.se.

Please confirm your attendance by e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Advisers

Mangold Fondkommission AB is acting as financial advisor to the Company in the Offering. Smartius Oy is acting as the legal adviser to the Company on aspects of the Offering related to the Finnish law.

SAVOSOLAR PLC

For more information:

Savosolar Plc
Managing Director Jari Varjotie
Phone: +358 400 419 734
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Savosolar Plc discloses the information provided herein pursuant to the Market Abuse Regulation ((EU) No 596/2014, "MAR"). The information was submitted for publication by the aforementioned person on 22 February 2019 at 12:45 p.m. (CET).

About Savosolar

Savosolar with its highly efficient collectors and large-scale solar thermal systems has taken solar thermal technology to the next level. The company's collectors are equipped with the patented nano-coated direct flow absorbers, and with this leading technology, Savosolar helps its customers to produce competitive clean energy. Savosolar's vision is to be the first-choice supplier to high performance solar installations on a global scale. Focus is on large-scale applications like district heating, industrial process heating and real estate systems - market segments with a big potential for rapid growth. The company primarily delivers complete systems from design to installation, using the best local partners. Savosolar is known as the most innovative company in the business and aims to stay as such. The company has sold and delivered its products to 17 countries on four continents. Savosolar's shares are listed on Nasdaq First North Sweden with the ticker SAVOS and on Nasdaq First North Finland with the ticker SAVOH. www.savosolar.com.

The company's Certified Adviser is Augment Partners AB, This email address is being protected from spambots. You need JavaScript enabled to view it., phone: +46 8-505 65 172.

IMPORTANT NOTICE

This release or the information contained therein shall not be distributed, directly or indirectly, in Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, South Africa or the United States. The information contained in this release do not constitute an offer of, or invitation to purchase any securities in any area, where offering, procurement of or selling such securities would be unlawful prior to registration or exemption from registration or any other approval required by the securities regulation in such area. This release is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations issued by virtue of it. Savosolar has not registered, and does not intend to register, any offering of securities in the United States. No actions have been taken to register the shares or the offering anywhere else than in Finland and Sweden.

The information contained herein shall not constitute an offer of, or invitation to purchase any securities in any jurisdiction. This release is not a prospectus and does not constitute any offer, invitation or investment advice to subscribe for or purchase securities. Investors should not subscribe for or purchase any securities or make any investment decisions referred to herein except on the basis of information contained in a prospectus issued by Savosolar.

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Details

Author: Zhang,Chunlin ; 
Document Date: 2019/02/09 09:24:02
Document Type: Working Paper
Report Number: 134778
Volume No: 1
 

Abstract

State owned enterprise (SOE) reform has been critical to China’s successful economic reform in the past four decades, which resulted in 850 million people being pulled out of poverty (World Bank, 2017). This is because at the outset of the economic reform, China’s non-agriculture sector, accounting for 60-65 percent of GDP and 30 percent of employment (World Bank, 1985, pp. 40, 42), were dominated by state ownership and central planning. Even today, a large SOE sector remains a hallmark of the Chinese economy. There were over 170,000 SOEs operating in the non-financial sectors in 2017 with a total of RMB 50 trillion (around USD 7 trillion) state equity capital, and the financial sector is dominated by state-owned financial institution in which the state has invested RMB 16 trillion (over USD 2 trillion) equity capital. Recent information released by senior leaders of the government suggests that SOEs generate around 30 percent of China’s GDP3. China’s unprecedented development success would have been unconceivable without its efforts in reforming the SOE sector. Starting from the 1980s, SOE reform has been an important component of the partnership between the World Bank and China. Over a period of more than three decades, the Bank worked closely with its Chinese partners to provide a stream of analytical and advisory services. This note is intended to be a brief review of the Bank’s engagement in this area in the overall context of China’s SOE reform.
 
 
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Details

Author: Zhang,Chunlin ; 
Document Date: 2019/02/09 09:27:01
Document Type: Working Paper
Report Number: 134778
Volume No: 1
 

Abstract

State owned enterprise (SOE) reform has been critical to China’s successful economic reform in the past four decades, which resulted in 850 million people being pulled out of poverty (World Bank, 2017). This is because at the outset of the economic reform, China’s non-agriculture sector, accounting for 60-65 percent of GDP and 30 percent of employment (World Bank, 1985, pp. 40, 42), were dominated by state ownership and central planning. Even today, a large SOE sector remains a hallmark of the Chinese economy. There were over 170,000 SOEs operating in the non-financial sectors in 2017 with a total of RMB 50 trillion (around USD 7 trillion) state equity capital, and the financial sector is dominated by state-owned financial institution in which the state has invested RMB 16 trillion (over USD 2 trillion) equity capital. Recent information released by senior leaders of the government suggests that SOEs generate around 30 percent of China’s GDP3. China’s unprecedented development success would have been unconceivable without its efforts in reforming the SOE sector. Starting from the 1980s, SOE reform has been an important component of the partnership between the World Bank and China. Over a period of more than three decades, the Bank worked closely with its Chinese partners to provide a stream of analytical and advisory services. This note is intended to be a brief review of the Bank’s engagement in this area in the overall context of China’s SOE reform.
 
 
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| Source: Savosolar Oyj

multilang-release

Savosolar Plc                                     
Financial Statement Release 20 February 2019 at 3:00 p.m. (CET)

Savosolar Plc's financial statement release for 2018: Revenue increased significantly, operating result still negative

Key figures in January-December 2018

  • Savosolar's revenue increased year-on-year, amounting to EUR 5.6 million (2017: EUR 0.8 million).
  • Operating result (EBIT) amounted to EUR -5.4 million (EUR -4.9 million).
  • Net result for the year amounted to EUR -6.4 million (EUR -5.7 million).
  • Earnings per share were EUR -0.02 (EUR -0.07)
  • The value of the projects in the sales pipeline was EUR 125 million at the end of the reporting period, of which the value of the projects in the bidding and planning phase totalled approximately EUR 54 million.

Key figures in July-December 2018

  • Revenue for the second half of the year amounted to EUR 4.3 million (7-12/2017: EUR 0.2 million).
  • Operating result (EBIT) amounted to EUR -2.9 million (EUR -2.6 million).

CEO JARI VARJOTIE:

"In 2018, Savosolar's revenue increased significantly compared to the previous year particularly thanks to the large project deliveries in Denmark and France. When comparing to 2017 there were only a few small project deliveries, while the large projects in Denmark were waiting for the government decisions for the subsidies, and the other markets were still waiting to take off. The contract signed with the Danish Grenaa Varmevark A.m.b.a in May 2018 is Savosolar's largest delivery for a solar thermal system so far. The majority of work related to this project was accomplished during the review period, and the hand-over is scheduled to take place in March 2019. Further, the solar thermal system delivered for newHeat SAS in Condat-sur-Vézère, France in January 2019, is the largest solar thermal collector field in France, and at the same time, it is the world's largest solar thermal field installed on a one-axis tracking system.

Operating result did not meet the expectations and remained negative. The main reasons behind the operating loss were the liabilities paid in 2018 relating to certain quality issues in solar collectors manufactured in the early stage of the company, and the higher than estimated project costs in our Danish projects. The quality issues with the early-stage collectors were due to some faults in manufacturing processes, and these have been fixed in the current processes.

Operating result was also affected by the fact that deliveries and project work were not split evenly during the year. The large projects in the second part of the year were not enough to compensate for the quiet first year-half. The investments made in sales and system design of customer projects can also be seen in the figures.

However, the significant customer contracts signed during 2018 show that the earlier production equipment investments and the strong focus on sales have taken us to the right direction.

The rights issue arranged in June-July 2018 to finance our growth succeeded well. However, the subscription of shares based on warrant program, which was planned to take place in December, did not unfortunately materialize. In order to deliver the on-going as well as possible new projects, to continue on the growth track and to execute the savings program in production costs, we decided to initiate a new rights issue after the end of financial year 2018.

Interest in and demand for the large solar thermal systems is growing in many places around the world. The number of our projects in the quotation and design phase has remained at a high level, and there are projects pending in many countries. One indication of the development of the whole industry is that project developers, who are ready to invest in clean heating, are entering the market.

Savosolar's strengths are our advanced technology, strong references and competent partners. Together with our partners our goal is to find the best possible solutions for the customers. Our satisfied customers are one of the most important success criteria for us. An excellent example of this is the extension ordered by Jelling Vaermevark in its existing solar thermal field we delivered few years ago. This field also holds the Danish record of the highest daily solar thermal energy production. We also thrive to develop new kinds of solutions when we see they add value to customers. A great example of this is the solar thermal system delivered in France, in which the sun-tracking system helps collectors produce more energy from a limited land area. I believe there is demand for these kinds of solutions also elsewhere. Savosolar is known as an innovative player in the industry, and we plan to remain as such also in the future."

SAVOSOLAR AS A COMPANY

Savosolar Plc is a Finnish public limited liability company that manufactures internationally award-winning solar thermal absorbers, collectors as well as energy production systems built on these. According to the knowledge of the company's management the solar thermal collectors with MPE absorbers manufactured by Savosolar are the most efficient in the world.

Savosolar focuses primarily on large solar thermal collectors and industrial-size heating systems. The company's vision is to be the global first-choice supplier of high-performance solar installations. Savosolar has delivered its products to almost 20 countries on four continents.

Savosolar's domicile and production plant is located in Mikkeli, Finland. Savosolar also has office premises in Vantaa, Finland as well as fully-owned subsidiaries in Denmark and Germany, and sales cooperation partners in Australia and Mexico.

The accounting principles for the financial statement release

This financial statement release is unaudited. The report has been prepared in accordance with the Finnish Accounting Standards (FAS) using the same principles as in the 2017 financial statements. Savosolar applies the Percentage for Completion method in its projects. The percentage of completion method is an accounting method in which the revenues and expenses of long-term contracts are recognized as a percentage of the work completed during the period. The PoC -method is applied when the project's contract price exceeds EUR 200,000. The PoC method requires that the final outcome of a project, project margin, can be estimated reliably throughout the project's life cycle.

Unless otherwise stated, the comparison figures refer to the same period of previous year 2017.

BUSINESS DEVELOPMENT IN 2018

Revenue

Revenue for the full-year 2018 amounted to EUR 5.6 million (1-12/2017: EUR 0.8 million). The main reasons for the increase in revenue are the company's large delivery projects to Denmark and France during the second half of 2018. In 2017 the company had only a few small delivery projects due to the postponement of decisions on state support, which caused a stand-still of the market in Denmark, the Europe's biggest market.

Revenue for the latter half of the year amounted to EUR 4.3 million (7-12/2017: EUR 0.2 million). Revenue came mainly from delivery projects to Denmark and France.

Significant orders

Savosolar and Danish Grenaa Varmevaerk A.m.b.a. signed a contract in May on delivery of the largest solar thermal system in Savosolar's history so far. The value of the contract is approximately EUR 3.5 million.  The project has proceeded in schedule, and hand-over will take place in March 2019.

Another significant contract was signed in March with newHeat SAS to deliver a solar thermal system to Condat-sur-Vézère France. The solar thermal plant is the largest in France and the value of the contract was over EUR 2.0 million. Additionally, Savosolar has been awarded the operation & maintenance contract. The delivery was started during the first half of the year and completed in January 2019.

In July Savosolar agreed with Jelling Varmevaerk in Denmark for an extension of the existing solar thermal collector field, delivered in 2016. The value of the agreement is approximately EUR 0.7 million.

In France Savosolar also delivered solar thermal system to Véolia ECHM, in the city of Voreppe. Market for solar thermal solutions in France is growing fast and the region Rhône-Alpes, where Voreppe is located, is actively promoting the development of solar thermal heating.

Other smaller deliveries were a solar thermal system to Oulun Seudun Sähkö and to Energi-Center Nordic in Stockholm. The system in Oulu is the biggest solar collector field in Finland.

Savosolar announced in November that it has signed a Memorandum of Understanding (MOU) with Guangzhou Power Supply Co., Ltd. which is a wholly-owned subsidiary of China Southern Power Grid Co., Ltd. China Southern Power Grid latest fiscal year revenue was approximately USD 73 billion. The MOU concerns co-operation in building a demonstration project of micro-energy network complementary with renewable energy in Nansha, Guangzhou.

At the end of the period, value of the projects in the company's sales pipeline was approximately EUR 125 million. Of this, the total value of projects in bidding and planning phase amounted to approximately EUR 54 million and order backlog approximately 1,2 million euro. The sales pipeline includes all active projects of the company's sales management system.

Costs and earnings

The costs relating to materials and services in 2018 totalled EUR 5.8 (0.8) million. The increase in costs was a consequence of the increased number of projects in the delivery phase. Thanks to the development projects it was possible to reduce the production costs both in terms of working hours and material use.

Personnel costs amounted to EUR 1.9 (1.8) million. Other operating expenses amounted to EUR 2.6 (2.3) million. Out of total costs, the biggest items were the expenses of the rights issue.  

The operating result (EBIT) for 2018 amounted to EUR -5.4 (-4.9) million. The main reasons for increase in operating loss were the liabilities incurred during 2018 relating to quality problems of the collector models manufactured by the company between 2013 and 2015 which have been fixed since, and higher than expected project execution costs in the projects in Denmark.

Net financial income and expenses amounted to EUR -1.0 (0.8) million. The majority the financing costs were related to share issues.

The result for the report period stood at EUR -6.4 (-5.7) million. Earnings per share were EUR -0.02 (EUR -0.07). 

COMPARISON BY REPORT PERIOD

(EUR '000) 1-12/2018 1-12/2017 7-12/2018 7-12/2017 1-6/2018 1-6/2017
Revenue 5 633 831 4 304 219 1 329 612
Operating profit/loss (EBIT) -5 374 -4 817 -2 938 -2 655 -2 436 -2 198
Profit/loss for the period -6 423 -5 664 -3 778 -3 118 -2 645 -2 545
Earnings per share, EUR -0.02 -0.07 -0.01 -0.03 -0.02 -0.07

Financing

Total assets of the company on 31 December 2018 stood at EUR 6.4 (6.5) million. The inventories remained at the level of EUR 1.0 million (EUR 1.0 million). Cash and cash equivalents decreased by EUR 1.5 million. Current receivables increased from EUR 0.1 million to EUR 1.8 million.

Shareholders' equity decreased from EUR 3.6 million to EUR 1.6 million. The equity including capital loans amounted to EUR 3.0 million at the end of report period. Savosolar's equity ratio at the end of report period was 24.7 (56.4)%.

Liabilities amounted to EUR 4.4 (2.7) million, of which EUR 0.3 (0.3) million were long-term and EUR 4.2 (2.3) million short-term liabilities. Out of long-term liabilities the amount of loans from financing companies was at EUR 0.3 million. Out of short-term liabilities EUR 1.4 million were capital loans and EUR 0.8 million (EUR 0.2 million) were loans from financing companies, of which the proportion of Finnvera was 40 thousand and the proportion of Formue Nord Markedsneutral A/S was EUR 778.7 thousand. Out of short-term liabilities EUR 1.5 million (0.3) were account payables. 

On May 21, 2018 Savosolar made an agreement on 12-month extension for maturity date of capital loans with Bank Suur-Savon Osuuspankki and Finnvera Oyj, according to which a total of EUR 1.4 million loans will mature on December 31, 2019. The maturity of the afore-mentioned capital loans with Suur-Savon Osuuspankki,  EUR 1.2 million, has been renegotiated on February 20, 2019 so that the loans will be paid back in monthly instalments during 24 months beginning on April 2019.

In November 2019, Suur-Savon Osuuspankki also extended the validity period of its bank guarantee limit granted to Savosolar Plc by 12 months, up and until 30.11.2019. The limit amounts to EUR 2 million and the Company uses it in large projects for guarantees needed during deliveries and the warrant period, among others.

The financing position of Savosolar improved substantially after the rights issue and directed share issue arranged in the summer 2018. The company raised net proceeds of EUR 3.7 million after the transaction costs. However, the subscription of shares based on related warrants in December did not realize and the company decided in December to arrange a rights issue, totalling approximately EUR 5.3 million, after the reporting period.

Cash flow from operations was EUR -6.1 (-5.8) million and cash flow from investments EUR -0.2 (-0.2) million. Cash flow from financing was EUR 4.8 (5.7) million, out of which the share issues amounted to EUR 4.4 (5.8) million. On 31 December 2018, Savosolar's cash and cash equivalents totalled to EUR 0.7 (2.2) million.

Aspects related to the Savosolar's financing and liquidity are also described in the section "General risks and factors of uncertainty concerning operations".

Investments and product development

Investments were EUR 0.2 (0.2) million and most of them were related to ordinary production maintenance. The company has no need for significant investments during the next few years because the production capacity has been increased to a level allowing the revenue of EUR 20-30 million.

Savosolar's project on the development of a new type of solar thermal collector is part of the Government's spearhead projects in cleantech industry. Business Finland (formerly Tekes), the Finnish Funding Agency for Innovation has granted support for the project by a loan amounting to a maximum of EUR 494 thousand, with the interest rate today being 1%. The project is focusing on the development of energy-efficient collectors, which are suited for large solar thermal fields and can be manufactured in mass production. The target is to lower the costs for logistics and installation as well as to improve the flexibility of installation. The project will last until the end of 2019 and its total budget amounts to EUR 0.7 million.

Personnel and management

At the end of the report period, Savosolar had 37 (36) employees. The average number of personnel was 35 (37).

On 31 December 2019 the company's management team consisted of the following persons: Jari Varjotie, CEO; Raul Ikonen, CFO; Torben Frederiksen, Chief Technology Officer; Morten Hofmeister, Head of Projects and System Design; Aku Järvisalo, Production Manager; Pekka Karjalainen, Quality Manager; Kaj Pischow, Senior Advisor, and as a temporary member Martti Jalava, Director, Supply Chain.

Nalle Stenman, Chief Financial Officer left Savosolar by the end of October, and Raul Ikonen was appointed CFO as of 1 November. Torben Frederiksen was appointed as CTO in August. Patrick Jansson, Vice President of Sales left the company in April, and the sales organization has since reported directly to managing director Jari Varjotie.

Business development

Savosolar has continued building its international cooperation partner network. In addition to the already announced agreements in Australia and Latin America there were three new cooperation agreements signed in the review period. Also, the organization has been strengthened so that partners can be supported more thoroughly in the technology know-how during the sales process.

Savosolar signed a cooperation agreement with Geoflow Australia Pty Ltd concerning the sales and marketing of solar thermal fields and turn-key solutions for utilizing solar thermal energy in the region Australia and New Zealand.  According to the cooperation agreement, the companies are focusing on large-scale solar thermal installations and their marketing is done under the brand Savosolar Australia. Geoflow acts as the local partner for Savosolar and is in charge of turn-key system deliveries to customers in the region. Savosolar is supplying the equipment and participates also in projects when necessary. Business development continues also in Latin America with the local partner Flemming Jorgensen.

As part of sales and marketing development also system design for customer projects has been further improved. In addition to this, there has been an increased focus on supply chain development including both the materials used in the factory as well as project related purchasing.

RESOLUTIONS OF SAVOSOLAR PLC's GENERAL MEETINGS

The Annual General Meeting 27 March 2018

The Annual General Meeting of Savosolar Plc was held on 27 March 2018 in Helsinki. The Annual General Meeting approved the Annual accounts for 2017 and resolved that the net loss of EUR -5,663,528.48 was transferred to retained earnings / loss account and that no dividend was paid.

The Annual General Meeting resolved that the members of the Board of Directors are paid the following remuneration for the term that begins at the end of the Annual General Meeting and ends at the end of the next Annual General Meeting: EUR 21,600 for the Chairman of the Board and EUR 10,800 for each of the other members of the Board. Approximately 40 per cent of the remuneration will be paid to the members of the Board of Directors by giving to the Board members company's new shares based on the authorization granted to the Board of Directors and approximately 60 per cent in cash.

The Annual General Meeting re-elected Feodor Aminoff, Christof Gey, Håkan Knutsson and Sami Tuhkanen as members of the Board. All elected members of the Board are independent from the company while the Board members Aminoff, Gey and Knutsson are independent from the company's major shareholders.

The Annual General Meeting resolved that the auditor's fees are paid according to the auditor's reasonable invoice approved by the company. PricewaterhouseCoopers Oy, Authorised Public Accountants was re-elected as the company's auditor. PricewaterhouseCoopers Oy has informed that the principal auditor will be Petter Lindeman, Authorised Public Accountant.

The Annual General Meeting authorised the Board of Directors to decide on the issuance of shares and the issuance of options and other special rights entitling to shares referred to in Chapter 10 Section 1 of the Companies Act as follows: The number of shares to be issued based on the authorisation may in total amount to a maximum of 200,000,000 shares, representing approximately 152.96 per cent of the company's shares on the date of this notice. The issuance of shares and of options and other special rights entitling to shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue), if there is a weighty financial reason for the company. Shares may be conveyed either against payment or free of charge in the company's share issues. A directed share issue may be a share issue without payment only if there is an especially weighty reason for the same both for the company and in regard to the interests of all shareholders in the company.

The Annual General Meeting resolved that the company's trade name is changed to Savosolar Oyj and that paragraph 1 of the Articles of Association was amended accordingly.

The Extraordinary General Meetings 12 June 2018 and 21 August 2018

The Extraordinary General Meeting of Savosolar Plc held on 12 June 2018 resolved in accordance with the proposal of the Board of Directors to authorize the Board of Directors to decide, in one or more transactions, on the issuance of shares and the issuance of options and other special rights entitling to shares referred to in Chapter 10 Section 1 of the Companies Act as follows: The number of shares to be issued based on the authorization may in total amount to a maximum of 400,000,000 shares, representing approximately 305.93 per cent of the company's shares on the date of the notice and on the date of the meeting. The issuance of shares and of options and other special rights entitling to shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue), if there is a weighty financial reason for the company. Shares may be conveyed either against payment or free of charge in the company's share issues. A directed share issue may be a share issue without payment only if there is an especially weighty reason for the same both for the company and in regard to the interests of all shareholders in the company. The authorization replaces the authorization granted by the Annual General Meeting on 27 March 2018 and shall be valid until 11 June 2023.

The Extraordinary General Meeting of Savosolar Plc held on 21 August 2018 decided according to the proposal of the Board that Feodor Aminoff continues as existing member of the Board and Eero Auranne, Mikael Lemström and Ari Virtanen were elected as new members of the Board for the term of office expiring at the end of the next Annual General Meeting. The Board elected Feodor Aminoff as Chairman of the Board.

Board of Directors and auditor

At the end of the period the Board of Directors was as follows: Feodor Aminoff (Chairman), Eero Auranne, Mikael Lemström and Ari Virtanen. All members are independent from the company and major shareholders.

PricewaterhouseCoopers Oy, Authorised Public Accountants was the company's auditor, and principal auditor Petter Lindeman, Authorised Public Accountant.

RELATED-PARTY TRANSACTIONS

The company has a contract with its subsidiary Savosolar ApS on services in sales, marketing, purchases and product development. Based on the contract the company has paid to Savosolar ApS in 2018 approximately EUR 589.5 thousand (521 thousand).

Similar service contract has been signed with Savosolar GmbH. Based on the contract the company has paid to Savosolar GmbH approximately EUR 179.2 thousand (143 thousand) during the financial period.

RIGHTS ISSUE AND RELATED DIRECTED SHARE ISSUE

Savosolar Plc announced on 14 June 2018 that it will carry out a rights issue of approximately EUR 3.5 million (the "Offering"), with additional warrants enabling the company to raise up to a maximum of approximately EUR 3.3 million. The company also announced it might carry out a directed share issue of approximately EUR 0.9 million. The subscription period of the Offering was 21 June-10 July 2018 and it was subscribed to 126%.

In the Offering Savosolar's shareholders were given one subscription right per each share held on the Offering record date (18 June 2018). Three subscription rights entitled the holder to subscribe for four offer shares. The subscription price was EUR 0.02 or SEK 0.20 per offer share. The offer shares represented approximately 57.1 per cent of the total number of the company's shares outstanding after the Offering. Persons who subscribed for the offer shares were given free of charge one warrant per each two subscribed offer shares.

The Board of Directors of Savosolar resolved on 13 July 2018 to approve the subscriptions received in the Offering. Investors with the subscription rights were allocated 77 % and investors without the subscription rights 23 % of the offered shares. The number of shares in Savosolar increased by 174,332,080 shares.

In connection to the resolving on approval of the subscriptions received in the Offering, the Board of Directors decided on a directed share issue. The directed share increased the number of shares in Savosolar by 43,583,020 shares. After the Offering and the directed share issue the total number of shares amounts to 348,664,162. The number of warrants subscribed for in the Offering and the directed issue amounts to 108,957,539.

Savosolar received approximately EUR 3.7 million in issue proceeds (after transaction costs associated with the Offering and the directed issue) which was used to secure company's working capital.

The shares subscribed for in the Offering and the directed issue were registered with the Finnish Trade Register on 23 July 2018. Trading was commenced on 24 July 2018 on First North Finland and on 27 July 2018 on First North Sweden.

Due to the Offering the Board of Directors also decided to amend the terms of the company's stock option plan 2-2017. The new subscription price per share for stock option plan 2-2017 is EUR 0.03, and each stock option gives the right to subscribe for two shares.

SHARE

Savosolar has one series of shares and their total number on 31 December 2018 was 352.538.414 (31.12.2017: 130.749.064). Each share entitles its holder to one vote at the General Meeting. The number of shares increased due the Offering, the directed share issue and the warrants used by altogether 221.789.350 shares in total. The company does not hold any of its own shares.  The average number of outstanding shares during the financial year was 260.016.950 (74.061.376).

The shares of Savosolar are traded on First North Sweden marketplace maintained by Nasdaq Stockholm AB as from 2 April 2015 with a short code SAVOS.  Secondary listing of the shares on First North Finland marketplace maintained by Nasdaq Helsinki Oy started on 24 April 2015 with a short code SAVOH.

Stock option programs

Stock option program for personnel (2-2017)

In the stock option program 2-2017, a maximum of 2,000,000 option rights can be distributed, entitling to subscribe a maximum of 2,000,000 new shares of the company. Of the stock options, 500,000 are marked with the symbol 2/2017A, 500,000 with the symbol 2/2017B, 500,000 with the symbol 2/2017C and 500,000 with the symbol 2/2017D.

The share subscription periods are as follows: for stock option 2/2017A 1 January 2018 -31 December 2019, for stock option 2/2017B 1 July 2018 -31 December 2019, for stock option 2/2017C 1 January 2019 -31 December 2019, for stock option 2/2017D 1 July 2019 -31 December 2019. On 31 December 2018, a total of 1,670,000 stock options from the stock option program were in possession of the management and other personnel of the company.

As a result of the Offering in summer 2018, the Board of Directors of the company decided to amend the terms of the stock option plan 2-2017.  The new subscription price per share for stock option plan 2-2017 is EUR 0.03, and each stock option gives the right to subscribe for two shares.

Investor warrants (1-2018)

Based on the authorization granted by the Extraordinary General Meeting on 12 June 2018, the company's Board of Directors resolved to issue warrants to the investors who subscribed for the offer shares in the Offering resolved on 14 June 2018 and/or in the directed share issue.

The number of warrants issued was 108,957,539 and they entitle their holders to subscribe for a maximum of 108,957,539 new shares in the company during 26 November - 10 December 2018. The share subscription price was determined by the volume weighted average price of the company's share on First North Finland between 12 November 2018 and 23 November 2018, with an applied discount of 25 per cent. The Swedish krona-denominated subscription price was determined using the EUR/SEK forward rate on 23 November 2018. Based on the warrants, 3,303,950 new shares were subscribed.

Existing authorizations of the Board of Directors at the end of the financial period

The Extraordinary General Meeting 12 June 2018 resolved the Board of Directors to decide, in one or more transactions, on the issuance of shares and the issuance of options and other special rights entitling to shares referred to in Chapter 10 Section 1 of the Companies Act. The number of shares to be issued based on the authorization may in total amount to a maximum of 400,000,000 shares, representing approximately 305.93 per cent of the company's shares on the date of the meeting.

Shares may be conveyed either against payment or free of charge in the company's share issues. A directed share issue may be a share issue without payment only if there is an especially weighty reason for the same both for the company and in regard to the interests of all shareholders in the company. The authorization shall be valid until 11 June 2023.

Of the authorization 328,872,639 shares were used as a result of the Offering, the related directed share issue and subscription of shares based on the warrants 1-2018, remuneration share issue of the Board of Directors as well as amendment of the subscription ration of stock option program 2-2017. In addition to that, 221,789,350 shares were used as a result of the warrants. Of the authorization 178,210,650 shares were left unused at the end of the financial period. 

GENERAL RISKS AND FACTORS OF UNCERTAINTY CONCERNING OPERATIONS

The most significant risks of Savosolar are the sufficiency of working capital and the ability to gain new projects and to increase the efficiency of operations, thereby turning the operations profitable.

The company's Board of Directors actively monitors the company's finances, and together with the company's management, seeks alternative funding solutions and additional means to reduce the costs associated with the company's operations. The Board of Directors continuously considers the sufficiency of financing as an important part of the company's growth strategy. At the date of this release, because of  the current estimated running costs of the company, the company's maturing loans and the revenue estimation, Savosolar cannot anticipate to have sufficient working capital for the next 12 months.  The company has previously succeeded in collecting the needed financing and the Board of Directors of Savosolar is confident that the sufficient financing will be obtained also this time. On December 19, 2018 the company has announced its plan to arrange a rights issue of approximately EUR 5.3 million, which is secured to 80 per cent by subscription commitments and external underwriters, with additional warrants enabling the company to raise up to a maximum of approximately EUR 3.5 million. However, it cannot be guaranteed that the company can gain enough supplementary finance just on time and to terms and conditions, which are favourable for the present shareholders. In case the company does not succeed in collecting additional financing in accordance with its needs, the company may be forced to postpone, cut back or terminate operations.

Like most early stage technology companies, Savosolar has invested in development of its products, offering and production as well as expansion of its operations into new markets during the first operational years, and has not yet reached sales volumes and margins that would cover the operational costs. The product development phase of the company has taken place from the year of establishment in 2010 until 2014, and only after that the company has been able to build up its sales and efficient production. Thus, the company has incurred significant operating losses. These losses have resulted principally from costs incurred in research and development of products and production processes as well as from general and administrative costs associated with the company's operations. The unprofitability of operations and challenges of supplementary financing led to the fact that the company has applied for restructuring proceedings in accordance with the Restructuring of Enterprises Act in 2013, and the restructuring program ended in schedule at the end of 2018.

Savosolar takes active measures to protect its intellectual property by obtaining patents and undertaking monitoring activities in its major markets. The company uses for this a well-known IPR service provider Berggren Oy.

DISPUTES

Sunti SAS, France has issued a summons to Savosolar Plc to attend the commercial court of justice in Montpellier due to an alleged breach of contract by Savosolar Plc. In the summons Sunti claims that Savosolar has acted against the exclusive rights clause in the contract between the two companies, which is related to an open tender for a solar collector field project in France. In its summons Sunti is claiming for a total compensation of approximately EUR 2.0 million based on the alleged breach of contract.

So far, Sunti and Savosolar have delivered their written statements to the commercial court of justice, which has postponed the timing for the first hearing to take place earliest at the end of spring 2019. The parties may appeal on the verdict to the higher court. Savosolar considers Sunti's claim for compensation to be without just cause.

STRATEGY AND LONG-TERM GOALS

Savosolar's mission is to accelerate the solar economy through the leading technology for competitive energy and the company's vision is to be the first-choice supplier to high performance solar installations on a global scale.

The company's strategy is to maintain the position as the supplier of the world's most efficient solar thermal collectors with MPE-absorbers for customers and applications where efficiency matters the most. These are large-scale industrial or real estate installations like solar thermal district heating, industrial process heat and large real estate heating renovations.

Savosolar has in different market areas partners, who sell the company's products and with whom the company delivers energy systems as turnkey deliveries. The partners can be either global suppliers of components or solutions, or local integrators or assembly companies. Savosolar is changing its focus to be a supplier of system deliveries even more strongly than it is today. 

The company's goal is to continue to be the innovative technology leader in the field and for that the plan is to invest 3-5% of the revenue for product development. During the years 2017-2018 the investments in product development are estimated to be approximately EUR 0.2 million annually, i.e. 2-5% of the revenue.

The geographical focus of operations is today in Europe, but the company has started active recruitment of partners and marketing in outside Europe and intends to expand strongly also outside Europe during the next few years.

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

The Extraordinary General Meeting of Savosolar held on 22 January 2019 authorized the Board of Directors to decide, in one or more transactions, on the issuance of shares and the issuance of options and other special rights entitling to shares referred to in Chapter 10 Section 1 of the Companies Act as follows: The number of shares to be issued based on the authorization may in total amount to a maximum of 2,000,000,000 shares, representing approximately 572.68 per cent of the company's shares. The Board of Directors decides on all the terms and conditions of the issuances of shares and of options and other special rights entitling to shares. The issuance of shares and of options and other special rights entitling to shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue), if there is a weighty financial reason for the company. Shares may be conveyed either against payment or free of charge in the company's share issues. A directed share issue may be a share issue without payment only if there is an especially weighty reason for the same both for the company and in regard to the interests of all shareholders in the company. The authorization replaces the authorization granted by the Extraordinary General Meeting on 12 June 2018 to the Board of Directors to resolve on the issuance of shares and the issuance of options and other special rights entitling to shares referred to in Chapter 10 Section 1 of the Companies Act. The authorization shall be valid until 22 January 2024.

On 20 February 2019 Savosolar agreed new repayment schedule for its capital loans of EUR 1.2 million with Suur-Savon Osuuspankki. The capital loans which had maturity date of 31 December 2019 before the amendment, will be paid back in monthly instalments during 24 months beginning on April 2019.
BOARD OF DIRECTORS' PROPOSAL TO THE ANNUAL GENERAL MEETING ON THE USE OF LOSS AND THE DISTRIBUTION OF DIVIDENDS

The Annual General Meeting of Savosolar Plc is planned to be held on 28 March 2019. The notice to convene the Annual General Meeting will be published on 4 March 2019. The Board of Directors proposes to the Annual General Meeting that the loss for the financial year (EUR -6,423,274.98 million) be transferred to the profit/loss account of previous periods and no dividend be distributed.

MARKETS

The economic and environmental benefits associated with the solar thermal have increased interest especially in Europe. Between 2013 and 2016, the only significant market was in practice Denmark, where there is strong local competition. In 2018 and 2019 the Danish market, after a year's downturn in 2017, has been very active. This market is expected to slow down for a couple of years, however, the significance of the other markets in Europe and elsewhere are expected to grow relatively fast.

It has been estimated that solar district heating generated over 1 TWh (= 1 billion kilowatt-hours) of district heating in Europe for the first time in 2017. Solar district heating capacity is expected to increase to 240 terawatt hours by 2050 and this would mean 15 per cent of Europe's district heating needs. The solar district heating market has grown by an average of 35 per cent per year over the past five years and the growth seems to continue. The global market potential for district heating is over one billion square metres, which means a market potential of several hundred billion euros.  (Sources: Werner Lutsch, Solar Dirstrict Heating -conference, April 2018, and presentations in Euroheat & Power and SDH conferences 2017 and 2018.

In the markets for large installation solar thermal systems, Savosolar sees most growth potential particularly in Denmark, Germany, France, Finland, Sweden and countries in Eastern Europe as well as eg. China. The most promising market in industrial process heating from Savosolar's point of view are in Latin America, Australia and Africa, in addition to Europe.

FINANCIAL REPORTING OF THE COMPANY IN 2019

Savosolar's financial accounts for 2018 will be published on the company's website on 14 March 2019.

The company's half-year report for January-June 2019 will be published on 30 August 2019. The financial reports will be published in Finnish and in English.

SAVOSOLAR PLC
Board of Directors

For more information:

Managing Director Jari Varjotie
Phone: +358 400 419 734
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Savosolar Plc discloses the information provided herein pursuant to the Market Abuse Regulation ((EU) No 596/2014, "MAR"). The information was submitted for publication by the aforementioned person on 20 February 2019 at 3:00 p.m. (CET).

ANNEXES

1 Income Statement
2 Balance Sheet
3 Cash Flow Statement
4 Calculation of Changes in Equity            
5 Financial Ratios and Calculation of Key Figures


About Savosolar

Savosolar with its highly efficient collectors and large-scale solar thermal systems has taken solar thermal technology to the next level. The company's collectors are equipped with the patented nano-coated direct flow absorbers, and with this leading technology, Savosolar helps its customers to produce competitive clean energy. Savosolar's vision is to be the first-choice supplier to high performance solar installations on a global scale. Focus is on large-scale applications like district heating, industrial process heating and real estate systems - market segments with a big potential for rapid growth. The company primarily delivers complete systems from design to installation, using the best local partners. Savosolar is known as the most innovative company in the business and aims to stay as such. The company has sold and delivered its products to 17 countries on four continents. Savosolar's shares are listed on Nasdaq First North Sweden with the ticker SAVOS and on Nasdaq First North Finland with the ticker SAVOH. www.savosolar.com.

The company's Certified Adviser is Augment Partners AB, This email address is being protected from spambots. You need JavaScript enabled to view it., phone: +46 8-505 65 172.

ANNEX 1
INCOME STATEMENT (FAS, unaudited)

(1 000 euroa) Jul-Dec
2018
Jul-Dec
2017
Jan-Dec
2018
Jan-Dec
2017
         
Revenue 4 304 219 5 633 831
Other operating income 0 -66 9 24
Materials and services -4 523 -428 -5 788 -752
Personnel costs -960 -760 -1 932 -1 829
Depreciations and write-downs -383 -380 -719 -762
Other operating expenses -1 376 -1 240 -2 578 -2 329
Operating profit/loss -2 938 -2 655 -5 374 -4 817
Financial income 23 14 23 14
Financial expenses -863 -477 -1 072 -824
Extraordinary items 0 0 0 0
Profit/loss before appropriations and taxes -3 778 -3 118 -6 423 -5 664
Net profit/loss for the reporting period/financial year -3 778 -3 118 -6 423 -5 664
 
  Jul-Dec
2018
Jul-Dec
2017
Jan-Dec
2018
Jan-Dec
2017
Earnings per share, undiluted, EUR -0.01 -0.02 -0.02 -0.07
Earnings per share, diluted, EUR -0.01 -0.02 -0.02 -0.07
         
Number of outstanding shares at the close of period 352 538 414 130 749 062 352 538 414 130 749 062
Average number of outstanding shares by month, adjusted by share issue 154 972 475 112 653 420 260 016 950 74 061 376
Number of outstanding shares, adjusted by dilutive effect 356 538 414 130 934 262 356 538 414 130 934 062
 

ANNEX 2
BALANCE SHEET (FAS, unaudited)

(EUR '000) 31 December
2018
31 December 2017
       
Assets      
Fixed assets      
Intangible assets   1 348 1 628
Tangible assets   854 1 130
Shares in group companies 162 162
Fixed assets in total 2 364 2 920
       
Current assets      
Accounts payable   982 996
Inventories   504 222
Long-term receivables   63 49
Accounts receivable   1 0
Other receivables   460 43
Prepayments and accrued income 1 274 35
Cash and cash equivalents 747 2 212
Current assets in total   4 031 3 557
       
Assets in total   6 395 6 478
       
  31 December
2018
31 December 2017
Equity and liabilities    
Equity    
Share capital 470 470
Unrestricted equity fund 29 273 24 919
Retained earnings -21 736 -16 072
Net profit/loss for reporting period/financial year -6 423 -5 664
Shareholder's equity in total 1 585 3 653
     
Obligationary provisions    
Other obligationary provisions 319 172
Long-term liabilities    
Capital loans 0 0
Loans from financial institutions 314 312
Other liabilities 0 0
Long-term liabilities in total 314 312
     
Short-term liabilities    
Capital loans 1 431 1 431
Loans from financial institutions 819 224
Advances received 1 501 315
Trade payables 58 56
Other liabilities 35 37
Accrued liabilities 334 277
Short-term liabilities in total 4 178 2 340
     
Liabilities in total 4 492 2 652
     
Total equity and liabilities 6 395 6 478

ANNEX 3
CASH FLOW STATEMENT (FAS, unaudited)
   

(EUR '000) Jul-Dec
2018
Jul-Dec
2017
Jan-Dec 2018 Jan-Dec  2017
         
Cash flow from operating activities        
Profit/loss for the financial period -3 778 -3 118 -6 423 -5 664
Adjustments 621 880 1 915 1 608
Increase/decrease in current receivables -728 192 -1 953 199
Increase/decrease in inventories 194 -121 14 -505
Increase/decrease in current interest-free payables 808 -325 1 369 -534
Interests from operating activities -840 -463 -1 049 -810
Cash flow from operations -3 723 -2 955 -6 127 -5 706
         
Cash flow from investing activities        
Investments -163 -8 -162 -181
Loans granted 0 0 0 0
Investments in subsidiaries 0 0 0 -28
Cash flow from investment activities -163 -8 -162 -209
         
Cash flow from financing activities        
Share issue 4 140 5 770 4 354 5 770
Advance payments -709 0 0 0
Proceeds from short-term loans 0 0 112 201
Repayment of long-term loans -137 -380 -203 0
Proceeds from short-term loans 778 366 779 0
Repayment of short-term loans -68 -702 -218 -284
Cash flow from financing activities 4 004 5 054 4 824 5 687
         
Change in cash and cash equivalents 118 2 091 -1 465 -228
Cash and cash equivalents at beginning of period 629 121 2 212 2 440
Cash and cash equivalents at end of period 747 2 212 747 2 212

ANNEX 4
CALCULATION OF CHANGES IN EQUITY (FAS, unaudited)

(EUR '000) Share capital Unrestricted
equity fund
Retained earnings Result for
financial year
Total
       
Equity 1 Jan 2018 470 24 919 -21 736 0 3 653
Share issue 0 4 354 0 0 4 354
Result for financial year 0 0 0 -6 423 -6 423
Equity 31 Dec 2018 470 29 273 -21 736 -6 423 1 584
           
           
Equity 1 Jan 2017 470 19 149 -16 072 0 3 547
Share issue 0 5 770 0 0 5 770
Result for financial year 0 0 0 -5 664 -5 664
Equity 31 Dec 2017 470 24 919 -16 072 -5 664 3 653
           

ANNEX 5
FINANCIAL RATIOS AND CALCULATION OF KEY FIGURES (FAS, unaudited)

(EUR '000)     Jan-Dec 2018 Jan-Dec 2017    
             
Revenue     5 633 831    
Result for reporting period/financial year   -6 423 -5 664    
Cash and cash equivalents   747 2 212    
Equity     1 585 3 653    
Equity Ratio, %     24.7 56.4    
           
           
           
Calculation of key figures    
           
Equity ratio, %   Shareholders' equity in Balance Sheet at the end of the period x 100 / Assets in total  
Amount of shares, pcs   Amount of shares at the end of the period  
Amount of shares on average, pcs   Weighted average number of shares during the period, adjusted by share issue  
Earning per share, EUR   Result for financial year / Adjusted weighted average number of shares during the period  
           
Read more: Savosolar Plc's financial statement release for...


Abstract

This paper presents the details of three scenarios -- leapfrog, lock-in, and lopsided -- that describe an illustrative set of technological states. Based largely on expert interviews, the paper argues that the technology outcomes are heavily attributable to the actions (or in some cases, inaction) of policy makers and incumbents. For each scenario, the paper presents descriptive levels of technology achievement and market outcomes for the energy, transport, and water sectors. One of the central differentiating features of the three scenarios is the extent to which governments perform their roles as enabling, that is, whether the policies are designed to help or hinder innovations that improve service levels, and distributive, that is, whether the policies are designed to ensure that multiple segments of society reap the rewards of innovation. A question raised as part of that theme is how countries can avoid lock-in, or how they might become derailed into a lopsided scenario. Some institutional behavioral markers of the scenarios were identified in these discussions and are noted in the paper. It is important to recognize that multiple combinations of these behaviors can lead to a lock-in or lopsided scenario. In addition to describing the scenarios in detail, the paper discusses the rationale for their creation, along with a brief discussion on the nature of uncertainty. The paper also describes the methodology employed in the creation of the scenarios, including expert interview methods and a day-long workshop.
Show More
 
 
Read more: Scenarios Leapfrog, Lock-in, and Lopsided

| Source: Savosolar Oyj

multilang-release

Savosolar Plc
Company Announcement                   19 February 2019 at 3:20 p.m. (CET)

Updated time schedule for the rights issue

Savosolar Oyj ("Savosolar" or the "Company") has decided to update the time schedule for the planned rights issue by postponing it by two days according to below.

Indicative time schedule

20 February 2019 Year-End Report is published
22 February 2019 Resolution regarding the rights issue by the Board of Directors
22 February 2019 The prospectus is published
22 February 2019 Last day of trading including the right to receive subscription rights
25 February 2019 First day of trading excluding the right to receive subscription rights
26 February 2019 Record date for the rights issue
1 March - 13 March 2019 Trading period for subscription rights
1 March - 15 March 2019 The subscription period for the rights issue in Sweden
1 March - 19 March 2019 The subscription period for the rights issue in Finland
15 March 2019 Trading starts in intermediary shares (BTA)
21 March 2019 Announcement of the outcome of the rights issue
2 April 2019 Last day of trading in the intermediary shares on First North Finland
4 April 2019 Last day of trading in the intermediary shares on First North Sweden

SAVOSOLAR PLC

For more information:

Savosolar Plc
Managing Director Jari Varjotie
Phone: +358 400 419 734
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Savosolar Plc discloses the information provided herein pursuant to the Market Abuse Regulation ((EU) No 596/2014, "MAR"). The information was submitted for publication by the aforementioned person on 19 February 2019 at 3:20 p.m. (CET).

About Savosolar

Savosolar with its highly efficient collectors and large-scale solar thermal systems has taken solar thermal technology to the next level. The company's collectors are equipped with the patented nano-coated direct flow absorbers, and with this leading technology, Savosolar helps its customers to produce competitive clean energy. Savosolar's vision is to be the first-choice supplier to high performance solar installations on a global scale. Focus is on large-scale applications like district heating, industrial process heating and real estate systems - market segments with a big potential for rapid growth. The company primarily delivers complete systems from design to installation, using the best local partners. Savosolar is known as the most innovative company in the business and aims to stay as such. The company has sold and delivered its products to 17 countries on four continents. Savosolar's shares are listed on Nasdaq First North Sweden with the ticker SAVOS and on Nasdaq First North Finland with the ticker SAVOH. www.savosolar.com.

The company's Certified Adviser is Augment Partners AB, This email address is being protected from spambots. You need JavaScript enabled to view it., phone: +46 8 505 65 172.

Read more: Savosolar Plc: Updated time schedule for the...

| Source: Savosolar Oyj

multilang-release

Savosolar Plc
Company Announcement            20 February 2019 at 2:10 p.m. (CET)

Savosolar has agreed on amendments to the terms and conditions of its capital loans

Savosolar Plc has agreed on amendments to the terms and conditions of its capital loans of approximately EUR 1.2 million with Suur-Savon Osuuspankki. Repayment schedule of the capital loans was amended so that the loans will be paid back in monthly instalments during 24 months beginning on April 2019. Before the amendment, maturity date of the capital loans was 31 December 2019. As a result of the amendment to repayment schedule, fixed annual interest of the capital loans increased form three (3) percent to four (4) percent.

SAVOSOLAR PLC

For more information:

Savosolar Plc
Managing Director Jari Varjotie
Phone: +358 400 419 734
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Savosolar Plc discloses the information provided herein pursuant to the Market Abuse Regulation ((EU) No 596/2014, "MAR"). The information was submitted for publication by the aforementioned person on 20 February 2019 at 2:10 p.m. (CET).

About Savosolar

Savosolar with its highly efficient collectors and large-scale solar thermal systems has taken solar thermal technology to the next level. The company's collectors are equipped with the patented nano-coated direct flow absorbers, and with this leading technology, Savosolar helps its customers to produce competitive clean energy. Savosolar's vision is to be the first-choice supplier to high performance solar installations on a global scale. Focus is on large-scale applications like district heating, industrial process heating and real estate systems - market segments with a big potential for rapid growth. The company primarily delivers complete systems from design to installation, using the best local partners. Savosolar is known as the most innovative company in the business and aims to stay as such. The company has sold and delivered its products to 17 countries on four continents. Savosolar's shares are listed on Nasdaq First North Sweden with the ticker SAVOS and on Nasdaq First North Finland with the ticker SAVOH. www.savosolar.com.

The company's Certified Adviser is Augment Partners AB, This email address is being protected from spambots. You need JavaScript enabled to view it., phone: +46 8-505 65 172.

Read more: Savosolar has agreed on amendments to the terms...


Abstract

This paper proposes a framework that examines three levels of access to infrastructure -- nominal, effective, and quality-adjusted access. Most conventional indicators measure nominal access --whether a household has physical access to a service in or near the house. By contrast, effective access incorporates functionality and use of service, and quality-adjusted access raises the bar by incorporating quality metrics. The paper illustrates the analytical utility of this conceptual framework by deploying data from a survey of 14,200 households in 15 Kenyan cities in 2012-13. First, the analysis finds that these cities fall far short of delivering universal access to basic infrastructure. Second, for most services there a large gap -- 3 to 41 percentage points—between nominal and effective access. When the bar is raised to include quality of service, the drop-off in the proportion of those with access is even more dramatic. These findings suggest that conventional nominal measures overreport the level of service in urban communities, and that current approaches to infrastructure delivery might be enhancing availability of a service without ensuring that the service is usable -- that is, functional, reliable and affordable. Third, there is an infrastructure access gap between nonpoor and poor households, as well as formal and informal settlements. Fourth, hedonic regression analysis reveals that four services -- electricity, water, toilets, and garbage collection—are associated with higher rents. The analysis has broader implications for understanding and measuring service access. It raises important questions as global discussions turn to indicators for the Sustainable Development Goals.
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Read more: Are They Really Being Served...

| Source: EDF

multilang-release

        PRESS RELEASE
15 February 2019
 
 
 

2018 annual results 
Rebound confirmation: double-digit growth in EBITDA
Cash Flow ([1]) largely positive
Excellent execution of the performance plan

  2018 key figures   Deployment of CAP 2030  
  EBITDA €15.3bn
+11.3% org.([2])
  Customers and services

Commercial innovations in France: "Vert Electrique" - strong acceleration with 210,000 customers launch of "Digiwatt", a fully digital offer launch of "Mon Chauffage durable"  Services launch of the "IZI by EDF" private and professional services platform targeted acquisitions: Aegis (United States) and Zephyro (Italy) Plan lumières 4.0: smart lighting contract on major roads in Wallonia, Belgium, managed by Citelum In Europe  consolidation of the customer portfolio in Italy, good resilience in Belgium, difficult context in the United Kingdom Renewables

Growth of 14% of the Group's renewable output ([3]) (17.2TWh) 1.6GW gross commissioned by EDF Renewables, of which 0.9GW solar power New major developments in offshore wind power: commissioning of the Blyth Park in the United Kingdom (41.5MW) acquisition of the NNG project (450MW) in Scotland acquisition of rights for projects in the United States (potential 2.5GW in New Jersey and New York) Solar Plan : entering into exclusive negociations for the acquisition of Luxel group (~1GWc gross capacity) Launch of the Storage Plan: 10GW target by 2035 Nuclear

Commissioning of the first EPR at Taishan, in China Continuation of the HPC project and freeze of the final design Flamanville 3: continuation of the action plan on the welding of the main secondary circuit Successful integration of Framatome International development

Completion of the construction of the Sinop dam in Brazil (400MW) Launch of the Nachtigal Dam Project in Cameroon (420MW) Extension of the off-grid offer in Africa: Ghana, Togo, Kenya  

 
  Net income excluding non-recurring items ([4]) €2.5bn
-13.1% ([5])
 
  Net income - Group share  €1.2bn
-62.9%
 
  Dividend 2018 €0.31/share  
  Electricity Output
Nuclear France  393.2TWh
Nuclear United Kingdom  59.1TWh
Hydropower France  46.5TWh
EDF Renewables   15.2TWh
+3.7%
-7.5%
+25.4%
+15.0% ([6])
 
  CO2 emissions at their lowest historic level

Group  57gCO2/kWh  -30.5%
EDF SA   17gCO2/kWh  -32.0%

 
  Rebound Confirmation

Double-digit growth in EBITDA (2) in line with targets Nuclear output in France and renewable output up sharply Continuation of the reduction of operating expenses ([7]) : €962m at end 2018 vs. 2015 Cash flow target (1) exceeded Strengthened balance sheet

Finalisation of the disposal plan two years in advance Refinancing of hybrid bonds and senior bond offering Control of net financial debt

€33.4 billion, representing a net financial debt/EBITDA ratio of 2.2x  

 
2019 targets([8])

 

EBITDA ([9]):    €15.3 - 16.0bn Decrease in Opex(7):  ~€1.1bn vs. 2015 Cash flow excluding HPC and Linky:  >0  
2019-20 Ambitions(8) Total net investments ([10]) excluding acquisitions and "2019-2020 Group disposals":    ~€15bn/year 2019-2020 Group disposals:  €2bn to €3bn Net financial debt/EBITDA (9):  < = 2.5x Dividend: Payout ratio based on Net income excluding non-recurring items ([11]):  45 - 50% French State committed to scrip for the balance of the 2018 dividend and dividends relating to FY2019 and FY2020  

EDF's Board of Directors meeting on 14 February 2019, under the chairmanship of Jean-Bernard Lévy, approved the consolidated financial statements at 31 December 2018.
Jean-Bernard Lévy, EDF's Chairman and CEO, stated: "The rebound in our results in 2018 has occurred and is in line with our forecasts. We have achieved all our financial objectives and are exceeding all the targets of our performance plan. We have stabilised our net financial debt, strengthened our balance sheet, reached a record for generation in renewable energies, succeeded in overhauling the French nuclear sector and strengthened our supply business through several significant innovations. Our performance will not only continue but will be amplified in 2019. This is the result of the daily commitment of the Group's employees, mobilised in the deployment of the CAP 2030 strategy.  With its dynamism, EDF will play a leading role in the implementation of the Multi-Year Energy Plan, which provides the Group with a clear framework and growth opportunities for the coming years. "
Change in EDF group's results

(in millions of Euros) 2017 ([12]) 2018 (5) Change
(%)
Organic change (%)
Sales 64,892 68,976 + 6.3 + 4.0
EBITDA 13,742 15,265 + 11.1 + 11.3
EBIT 5,637 5,282 - 6.3  
Net income - Group share 3,173 1,177 - 62.9  
Net income excluding non-recurring items (4) 2,820 2,452 - 13.1  

Change in EDF group's EBITDA

(in millions of Euros) 2017 (12) 2018 Organic change (%)
France - Generation and supply activities 4,896 6,327 + 29.2
France - Regulated activities 4,898 4,916 + 0.4
EDF Renewables 751 856 + 4.1
Dalkia 259 292 + 12.0
Framatome - 202 -
United Kingdom 1,035 783 - 15.4
Italy 910 791 - 12.7
Other international 457 240 -3.1
Other activities 536 858 + 62.1
Total Group 13,742 15,265 + 11.3

The 2018 results confirm the expected rebound, mainly driven by the good performance of nuclear and hydropower output in France, the growth of EDF Renewables and EDF Trading's very strong results.

Marked rebound of the operating performance

Nuclear output in France amounted to 393.2TWh, an increase of 14.1TWh over 2017. This improvement can be explained by the fact that 2017 was heavily penalised by several reactor outages linked in particular to the manufacturing records of the Creusot plant, the "carbon segregation" issue, and the temporary shutdown of the four generation units of the Tricastin power plant.

Hydropower output in France amounted to 46.5TWh ([1]), an increase of 25.4% (+9.4TWh) over 2017. After a very dry year in 2017, 2018 benefited from good hydropower conditions and an optimised availability of hydropower assets.

In the United Kingdom, nuclear output amounted to 59.1TWh, down 4.8TWh compared to 2017. This decrease can be explained in particular by the Hunterston B inspection and the extension of the Dungeness B outage.

EDF Renewables' production amounted to 15.2TWh, an organic increase of 15% compared to 2017 thanks to commissionings at the end of 2017.

In addition, EDF Trading achieved solid results by taking advantage of a context of favourable volatility in the commodities market.

Net income

The financial result corresponds to a financial expense of €4.8 billion, €2.6 billion more than in 2017. This evolution is primarily due to the change in the fair value of debt and equity on dedicated assets, which weighs on the financial result (application of IFRS 9 ([2])) because of unfavourable market conditions, especially at the end of the year. Conversely, in 2017 the Group realised significant capital gains within its dedicated asset portfolio. Moreover, the unwinding cost recorded in 2018 is greater than in 2017 due to a more pronounced decrease in the discount rate for nuclear provisions (20 basis points in 2018 compared to 10 in 2017).

Net current income excluding non-recurring items amounted to €2.5 billion in 2018, down 13.1% compared to 2017 due to the change in the financial result (excluding the fair value adjustment of financial assets).

Net income Group share amount to €1.2 billion in 2018, down 62.9%. In addition to the variation in the financial result, this decrease is explained by the positive effect of the capital gain recorded in 2017 for the sale of 49.9% of the Group's shareholdings in CTE ([3]), without equivalent in 2018.

Excellent execution of the performance plan

The good execution of the performance plan was confirmed in 2018 with the surpassing of all targets:

  • Operating expenses ([4]) were reduced by €256 million in 2018 compared to 2017, representing a cumulative reduction of €962 million between 2015 and 2018, exceeding the target of €800 million by the end of 2018 and positioning the Group on the right path to meet the €1.1 billion over 2015-2019 period.
  • The Group's plans to optimise the working-capital requirement delivered a cumulated optimisation of €2.1 billion over the period 2015-2018, which allowed to exceed the €1.8 billion target.
  • The €10 billion disposal plan was completed at the end of 2018, two years ahead of schedule.

Together with the capital increase carried out in 2017, the performance plan significantly strengthened the Group's balance sheet and contributed significantly to the success of Cap 2030 by allocating the necessary resources to the strategy.

Proposed dividend for 2018: €0.31 per share, corresponding to a payout ratio of 50%, with option of payment of the dividend balance in new shares

At its meeting on 14 February 2019, EDF's Board of Directors decided to propose to the Ordinary Shareholders' Meeting, which will be convened to approve the financial statements for the fiscal year closing 31 December 2018 and which will take place on 16 May 2019, the payment of a dividend of €0.31 per share for 2018, corresponding to a payout ratio of 50% of net income excluding non-recurring items ([5]).

When subtracting the interim dividend of €0.15 per share paid out in December 2018, the balance of the dividend to be paid out on the 2018 financial year comes to €0.16 per share for shares receiving the ordinary dividend and €0.191 per share for shares receiving the loyalty dividend.

Subject to approval at the Shareholders' Meeting, in accordance with Article L. 232-18 of the French Commercial Code and Article 25 of the Company's articles of association, EDF's Board of Directors decided on 14 February 2019 to offer each shareholder the option of being paid in new EDF stocks on the remaining dividend to be paid for the year ended 31 December 2018. In case the option is exercised, the new shares will be set at a price equal to 90% of the average of opening prices of the EDF share on the Euronext Paris regulated market over the twenty trading days preceding the day of the Shareholders' Meeting, reduced by the amount of the balance of the dividend to be paid for the 2018 financial year, rounded up to the nearest cent.

On 14 February 2019, EDF's Board of Directors set the terms of payment of the balance of the dividend for the 2018 financial year which will be submitted for approval during the Shareholders' Meeting:

  • ordinary and loyalty dividend ex-date on 22 May 2019;
  • exercise period for payment in new shares from 24 May to 10 June 2019;
  • payment date of the balance of the dividend and settlement/delivery of the shares on 18 June 2019.

If the shareholder does not exercise the option of payment in new shares between 24 May and 10 June, he or she will receive the balance of the dividend in cash on the date of its payment, i.e. 18 June 2019.

Cash flow and net financial debt

The positive cash flow target ([6]) for 2018 was largely achieved and amounted to €1,125 million. This performance reflects the rebound in activity, the control of investments and the positive contribution of the working-capital requirement.

Net investments, excluding Linky ([7]), new developments ([8]) and excluding the Group assets disposal plan, amounted to €10,935 million, in line with expectations.

2018 also marks an acceleration of investments in the Linky program (3) and the Hinkley Point C project. Total net investments excluding the assets disposal plan amounted to €14 billion, down €2 billion from 2017, in line with the Framatome acquisition in 2017.

The disposals carried out in 2018 were lower than in 2017 (€1,937 million in 2018, compared with €6,193 million in 2017).

Cash flow after net investments and changes in working-capital requirement amounted to €1,299 million, a decrease of €554 million, mainly due to the lower level of disposals in 2018 compared to 2017, and, to a lesser extent, to the smaller contribution of the change in the working-capital requirement. Group cash flow ([9])  amounted to -€480 million, down €271 million.

  31/12/2017 31/12/2018
Net financial debt ([10]) (in billions of euros) 33.0 33.4
Net financial debt/EBITDA 2.4x 2.2x

The Group's net financial debt reached €33.4 billion at the end of 2018, almost unchanged over one year. The ratio of net financial debt/EBITDA improves; it stood at 2.2x at 31 December 2018.

Main Group results by segment
France - Generation and supply activities 

 

(in millions of Euros)

2017 2018 Organic change (%)
Sales ([11]) 25,084 26,096 +4.0
EBITDA 4,896 6,327 +29.2

Sales in France - Generation and supply activities in 2018 amounted to €26,096 million, up +4.0% in organic terms compared to 2017.

EBITDA recorded an organic increase of 29.2% compared to 2017 to reach €6,327 million.

The increase in hydropower and nuclear power output had a very favourable impact on EBITDA estimated at +€1,079 million. Better conditions on the wholesale markets also contributed an estimated +€413 million improvement in EBITDA.

Conditions on the downstream market ([12]) had a positive impact of +€150 million compared to 2017, as favourable price developments on new market-price offers made up for the erosion of market shares (-13.1TWh).

Price developments and the end of the tariff adjustment component on regulated sales tariff level, excluding the Energy Savings Certificate component, led to an estimated -€152 million decrease compared to 2017.

Under the EDF group's performance plan, operating expenses ([13]) were reduced by €313 million (-3.5%) through the control of purchases and payroll costs. These measures are in application across all entities, notably in support functions and in the supply business, and reducing operating costs for the nuclear, hydropower and thermal power plant fleet.

A number of factors had a total effect of -€372 million on EBITDA: principally the increase in value-added tax  (CVAE), movements in provisions, and positive items that were recorded in 2017 and had no equivalent in 2018.

France - Regulated activities ([14])

 

(in millions of Euros)

2017 2018 Organic change (%)
Sales ([15]) 15,836 16,048 +1.3
EBITDA 4,898 4,916 +0.4

Sales in France - Regulated activities in 2018 amounted to €16,048 million, up +1.3% in organic terms compared to 2017.

EBITDA amounted to €4,916 million, up 0.4% in organic terms compared to 2017, driven by:

  • The positive impact of the TURPE 5 ([16]) indexation for an estimated total of €68 million
  • Growth of the grid connection services activity (+€37 million)
  • The reduction in operating expenses (+€38 million) ([17])
  • Going in the opposite direction, the unfavourable weather effect, the negative price effect on grid losses purchases, and making provision for the risk of changes in Enedis' and Electricité de Strasbourg's contributions to the Electricity Equalisation Fund for the period 2012-2018, had the combined effect of a
    -€125 million decrease in EBITDA.

Renewable energies

EDF Renewables

(in millions of Euros) 2017 2018 Organic change (%)
Sales ([18]) 1,280 1,505 +8.4
EBITDA 751 856 ([19]) +4.1
of which EBITDA generation 741 903 +15.0

Sales in EDF Renewables in 2018 amounted to €1,505 million, up 8.4% in organic terms compared to 2017.

EBITDA amounted to €856 million, up 4.1% in organic terms compared to 2017.

EBITDA from generation recorded an organic increase of 15% to €903 million, underpinned by energy production levels of 15.2TWh in 2018. This was particularly attributable to facilities commissioned in late 2017, as sales of facilities (with change of control) took place in late 2018.

Development and Sales of Structured Assets made a lower contribution to EBITDA in 2018 than in 2017. Development and support function costs increased, in order to support business growth.

The gross capacities brought into operation by EDF Renewables during 2018 totalled 1.6GW, including 0.9GW for solar power. The net installed capacities at 31 December 2018 showed a year-on-year increase of 0.5GW to 8.3GW (12.9GW gross). The gross portfolio of projects under construction at 31 December 2018 amounted to 2.4GW, consisting of 1.2GW for wind power and 1.2GW for solar power.

Group Renewables (2),([20])

(in millions of Euros) 2017 2018 Change (%) Organic change (%)
Sales (1) 3,687 4,422 +20 +19
EBITDA 1,587 2,133 +34 +35
Net investments (1,458) (1,220) -16  

EBITDA for all of Group Renewables amounted to €2,133 million in 2018, up 35% in organic growth thanks to a strong increase in hydropower output in France and the commissionings in 2017 in wind and solar. In terms of investments for 2018, notable acquisitions were made in offshore wind power (450MW offshore wind farm project in Scotland, acquisition of development rights in the United States) financed by the sale of a 49% minority interest in the Group's portfolio in the United Kingdom. In 2017, tne acquisition of Futuren amounted €281 million.

Energy services

Dalkia

(in millions of Euros) 2017 2018 Organic change (%)
Sales ([21]) 3,751 4,189 +8.5
EBITDA 259 292 +12.0

Sales in Dalkia in 2018 amounted to €4,189 million, up 8.5% in organic terms compared to 2017.

Dalkia's contribution to Group EBITDA for 2018 amounted to €292 million, reflecting organic growth of 12.0%. This increase takes into account difficulties encountered on a contract by one Dalkia subsidiary in 2017, which had no equivalent in 2018. Corrected for that factor, the organic growth in EBITDA is +1.3% driven by competitivity improvements resulting from the operating performance plan, and good control of overheads. Signatures and renewals of commercial contracts had a favourable effect on EBITDA, especially in the fields of energy efficiency and heat networks. However, Dalkia's EBITDA was adversely affected by maintenance operations at several important plants, poor weather, and unfavorable movements in prices.

Group Energy Services ([22])

(in millions of Euros) 2017 2018 Change (%) Organic change (%)
Sales (1) 4,872 5,569 +14 +8
EBITDA 315 355 +13 +10
Net investments (576) (514) -11  

EBITDA for Group Energy Services amounted to €355 million in 2018, up 10% in organic growth. This performance was mainly driven by Dalkia and to a lesser extent by the development of energy services in Italy, Belgium and the United Kingdom. The change in net investments reflects in particular the acquisition of Imtech in the United Kingdom in 2017.

Framatome

(in millions of Euros) 2017 ([23]) 2018
Sales ([24]) - 3,313
EBITDA ([25]) - 465
EBITDA EDF group contribution   202

Sales in Framatome in 2018 amounted to €3,313 million. A significant share of sales was realised with other entities of the Group.

Framatome's EBITDA was €465 million, including the margin realised with other EDF group entities. Framatome's contribution to Group EBITDA for 2018 stood at €202 million.

Framatome's EBITDA is supported by the implementation of the operating and structure costs reduction plan, in line with expectations. In 2018 it includes a non-recurring €42 million expense related to the revaluation of inventories undertaken in the context of Framatome's purchase price allocation.

Order intake stood at €3 billion (more than 60% from non-Group entities).

Framatome registered a good level of activity in the "Fuel business", with notable achievements in 2018 such as the delivery of the first batch of fuel cladding tubes for the Hualong-1 reactor at the Fuqing nuclear power plant. Framatome also won new contracts with Vattenfall for the delivery of fuel assembly reloads.

Thanks to the purchase of Schneider Electric's nuclear instrumentation and control (I&C) offering in North America in February 2018, Framatome is expanding its engineering expertise and broadening its portfolio of I&C solutions. It supplied a complete I&C system for unit 3 of the Tianwan nuclear power plant (a VVER type pressurized water reactor with a net installed capacity of 1,000MW). In Sweden, Framatome completed the successful commissioning of a safety I&C system upgrade for unit 3 of the Forsmark nuclear power plant

On the other hand, the "Installed Base business" has experienced a slight slowdown, in particular in the United States, in a highly competitive environment.

United Kingdom 

(in millions of Euros) 2017 2018 Organic change (%)
Sales ([26]) 8,688 8,970 +3.9
EBITDA 1,035 783 -15.4

In the United Kingdom, sales amounted to €8,970 million in 2018, up 3.9% in organic terms.

EBITDA amounted to €783 million, down 15.4% in organic terms compared to 2017.

EBITDA in the United Kingdom was impacted by the downturn in nuclear power generation and the lower realised net prices for nuclear power, partly driven by buybacks in a context of higher wholesale power prices. Nuclear output for 2018 totalled 59.1TWh, down by 4.8TWh from 2017.

The supply activities benefited from increases in residential tariffs, although the residential customer portfolio showed a year-on-year decrease of -4.2% in a highly competitive environment.

Italy 

(in millions of Euros) 2017 2018 Organic change (%)
Sales (1) 7,722 8,507 +6.2
EBITDA 910 791 -12.7

In Italy, sales in 2018 reached €8,507 million, up 6.2% in organic terms from 2017. EBITDA recorded an organic decrease of 12.7% to €791 million.

In 2017, Italy's EBITDA benefited from the gain of around €100 million on the sale of Edison's Milan headquarters. After elimination of this non-recurring item, EBITDA was practically stable.

EBITDA for the electricity activities was up, essentially due to a good performance in hydropower generation and ancillary services. However, wind power generation was lower, in line with a negative price effect. The supply activity, which mainly concerns business customers, progressed despite lower margins in a more competitive market.

EBITDA for the gas activities was down, principally as a result of unfavourable prive effect that affected the margin on long-term contracts.

The exploration-production activity benefited from positive price and volume effects thanks to the rise in Brent oil prices and the commissioning of a new field in Algeria.

Other international 

(in millions of Euros) 2017 2018 Organic change (%)
Sales ([27]) 3,166 2,411 +3.4
EBITDA 457 ([28]) 240 -3.1

Sales in the Other international segment amounted to €2,411 million, up 3.4% in organic terms compared to 2017. EBITDA recorded an organic decrease of 3.1% to €240 million.

In Belgium, EBITDA showed an organic decrease of -€8 million (-5.5%). The extended outages of 4 nuclear reactors partly owned by EDF Luminus and operated by Engie group penalised EBITDA by an estimated €76 million in 2018. Thermal generation partly counterbalanced this effect, and generation of renewable energy benefited from the increase in installed wind power capacities, which totalled 440MW at 31 December 2018 (up by +17% compared to 2017). Supply activities were still marked by the strongly competitive environment, but were benefiting from growth in service activities.

EBITDA in Brazil also showed an organic reduction (-€46 million), principally due to the gas supply interruption lincked to transport capacity work, and scheduled outages in 2018 for major inspections at the EDF Norte Fluminense plant. These events made necessary significant purchases on the energy markets to cover the Power Purchase Agreement (PPA) at a time of rising market prices.

Other activities

(in millions of Euros) 2017 2018 Organic change (%)
Sales (1) 2,475 2,601 +5.3
EBITDA 536 858 +62.1

Sales in Other activities amounted to €2,601 million, up 5.3% in organic terms over 2017. EBITDA recorded an organic increase of 62.1% to reach €858 million.

EBITDA at EDF Trading amounted to €633 million in 2018, an organic increase of 73.5% compared to 2017. This growth reflects the volatility in commodity markets which EDF Trading turned to its advantage, a positive weather effect, and occasional favourable tensions in the supply-demand balance in Europe and the United States. Activities related to LNG (Liquefied Natural Gas) also contributed to this performance, thanks to rising demand in Asia and upward oil price trend until late September 2018.

EBITDA for the Other activities segment also benefited from a substantial capital gain on the final operation of the real estate sale programme initiated in 2015.

Main events ([29])
since the 2018 third quarter press release

Major Events

Group Renewables

EDF Renewables ([30])

  • EDF Renewables entered into exclusive talks with a view to acquire the Luxel group, a French solar energy specialist (see press release of 14 February 2019).
  • EDF Renewables and SITAC Group signed power purchase agreement covering 300MW of wind project in India (see press release of 4 February 2019).
  • EDF Renewables acquired Nebraska wind project (300MW) (see press release of 17 January 2019).
  • The EDF Renewables-Masdar consortium was awarded a 400MW wind project in Saudi Arabia (see press release of 11 January 2019).
  • EDF Renewables and Shell invested in New Jersey Offshore Wind (2,500MW) (see press release of 19 December 2018).
  • EDF Renewables signed a Power Purchase Agreement for an over 200 MW wind project in Canada (see press release of 18 December 2018).
  • Repowering: EDF Renewables commissioned a fully renewed wind farm in Germany (see press release of 11 December 2018).
  • EDF Renewables enters into an agreement with Shell Energy North America to supply 132MWp of solar power in California (see press release of 15 November 2018).

Hydropower

  • EDF, IFC and the Republic of Cameroon signed final and binding agreements for the construction of the Nachtigal hydroelectric dam in Cameroon (see press release of 8 November 2018). The financial closing  occured on 24 December 2018. On this occasion, share ownership changed with the entry of Africa50 (15%) and STOA (10%). IFC now holds 20%, the Republic of Cameroon 15% and EDF continues to hold 40%.

Group Energy Services

  • EDF launched IZI by EDF, a new range of services to make EDF the partner of choice for peace of mind in French homes or small businesses (see press release of 7 February 2019).
  • The city of Nice (Côte d'Azur) selected two EDF group subsidiaries to expand its network of charging stations for electric vehicles (see press release of 21 November 2018).
  • Sowee & housing leaders are revolutionizing comfort and energy savings with an innovative and accessible connected solution (see press release of 21 November 2018).

Nuclear industry

  • Flamanville 3 EPR project:
    • ASN will issue a statement in May concerning the validation programme on the welds in the main secondary system. A specific update on the progress of the work on the Flamanville EPR, in particular on its schedule and its construction cost, will be carried out after the publication of the the ASN's opinion.  (see press release of 31 January 2019);
    • the "hot tests" are now scheduled to commence during the second half of February 2019 (see press release of 21 January 2019).
  • The first of two EPR reactors at China's Taishan nuclear power plant entered into commercial operation
    (see press release of 14 December 2018).
  • EDF and Nawah Energy Company signed an operations and maintenance assistance agreement for Barakah Nuclear Energy Plant, United Arab Emirates (see press release of 22 November 2018).

Disposal plan

  • EDF sold a portfolio of more than 200 real estate and business assets to Colony Capital (see press release of 28 November 2018).

Financial structure

Other significant events

  • Philippe Sasseigne appointed Senior Executive in charge of Nuclear and Thermal. Etienne Dutheil appointed Director of Nuclear Production (see press release 8 February 2019).
  • EDF achieved a major milestone in the industrial implementation of ECOCOMBUST (see press release 28 January 2019).
  • EDF launched Mon chauffage durable ("My sustainable heating"), a complete offer for the replacement of oil, gas or coal boilers with heat pumps, in order to reduce French energy bills and CO2 emissions (see press release of 24 January 2019).
  • Europe's major Green Bond Issuers launched the Corporate Forum on Sustainable Finance (see press release 15 January 2019).
  • EDF launched an exceptional offer to help French people replace their oil-fired boilers with heat pumps (see press release of 6 December 2018).
  • EDF announced the successful syndication of an innovative ESG-Indexed Revolving Credit Facility (see press release 27 November 2018).

APPENDICES :
Consolidated income statement

   

(in millions of euros)

  2018 2017 restated ([31])  
Sales   68,976 64,892
Fuel and energy purchases   (33,012) (32,901)
Other external expenses   (9,364) (8,739)
Personnel expenses   (13,690) (12,456)
Taxes other than income taxes   (3,697) (3,541)
Other operating income and expenses   6,052 6,487
Operating profit before depreciation and amortisation   15,265 13,742
Net changes in fair value on Energy and Commodity derivatives, excluding trading activities   (224) (355)
Net depreciation and amortisation   (9,006) (8,537)
Net increases in provisions for renewal of property, plant and equipment operated under concessions   (50) (58)
(Impairment)/reversals   (598) (518)
Other income and expenses   (105) 1,363
Operating profit   5,282 5,637
Cost of gross financial indebtedness   (1,716) (1,778)
Discount effect   (3,486) (2,959)
Other financial income and expenses   393 2,501
Financial result   (4,809) (2,236)
Income before taxes of consolidated companies   473 3,401
Income taxes   149 (147)
Share in net income of associates and joint ventures   569 35
CONSOLIDATED NET INCOME   1,191 3,289
EDF net income   1,177 3,173
Net income attributable to non-controlling interests   14 116
       
Earnings per share (EDF share) in euros:      
Earnings per share   0.20 0.98
Diluted earnings per share   0.20 0.98

Consolidated balance sheet

 

ASSETS
(in millions of euros)

  31/12/2018 31/12/17
restated ([32])
Goodwill   10,195 10,036
Other intangible assets   9,918 8,896
Property, plant and equipment operated under French public electricity distribution concessions   56,515 54,739
Property, plant and equipment operated under concessions for other activities   7,339 7,607
Property, plant and equipment used in generation and other tangible assets owned by the Group   78,252 75,622
Investments in associates and joint ventures   8,287 7,249
Non-current financial assets   37,104 36,787
Other non-current receivables   1,796 2,168
Deferred tax assets   978 1,220
Non-current assets   210,384 204,324
Inventories   14,227 14,138
Trade receivables   15,910 16,843
Current financial assets   31,143 24,953
Current tax assets   869 673
Other current receivables   7,346 7,219
Cash and cash equivalents   3,290 3,692
Current assets   72,785 67,518
Assets classified as held for sale   - -
TOTAL ASSETS   283,169 271,842
EQUITY AND LIABILITIES
(in millions of euros)
  31/12/2018 31/12/17
restated ([33])
Capital   1,505 1,464
EDF net income and consolidated reserves   42,964 39,893
Equity (EDF share)   44,469 41,357
Equity (non-controlling interests)   8,177 7,341
Total equity   52,646 48,698
Provisions related to nuclear generation - back-end of the nuclear cycle, plant decommissioning and last cores   49,204 46,410
Other provisions for decommissioning   2,033 1,977
Provisions for employee benefits   17,627 20,630
Other provisions   2,908 2,356
Non-current provisions   71,772 71,373
Special French public electricity distribution concession liabilities   46,924 46,323
Non-current financial liabilities   52,129 51,365
Other non-current liabilities   4,896 4,864
Deferred tax liabilities   1,987 2,362
Non-current liabilities   177,708 176,287
Current provisions   6,010 5,484
Trade payables   13,421 13,994
Current financial liabilities   17,167 11,142
Current tax liabilities   205 187
Other current liabilities   16,012 16,050
Current liabilities   52,815 46,857
Liabilities related to assets classified as held for sale   - -
TOTAL EQUITY AND LIABILITIES   283,169 271,842

Consolidated cash flow statement

(in millions of euros)   2018 2017
Operating activities:      
Income before taxes of consolidated companies   473 3,401
Impairment/(reversals)   598 518
Accumulated depreciation and amortisation, provisions and changes in fair value   13,180 9,980
Financial income and expenses   729 764
Dividends received from associates and joint ventures   387 243
Capital gains/losses   (1,014) (2,739)
Change in working capital   462 1,476
Net cash flow from operations   14,815 13,643
Net financial expenses disbursed   (1,062) (1,209)
Income taxes paid   (389) (771)
Net cash flow from operating activities   13,364 11,663
 

Investing activities:

     
Acquisitions of equity investments, net of cash acquired   (484) (2,463)
Disposals of equity investments, net of cash transferred ([34])   1,261 2,472
Investments in intangible assets and property, plant and equipment   (16,186) (14,747)
Net proceeds from sale of intangible assets and property, plant and equipment   611 1,140
Changes in financial assets   (2,367) 1,885
Net cash flow used in investing activities   (17,165) (11,713)
 

Financing activities:

     
EDF capital increase   - 4,005
Transactions with non-controlling interests ([35])   1,548 481
Dividends paid by parent company   (511) (109)
Dividends paid to non-controlling interests   (183) (183)
Purchases/sales of treasury shares   (3) (6)
Cash flows with shareholders   851 4,188
Issuance of borrowings   5,711 2,901
Repayment of borrowings   (2,844) (6,304)
Issuance of perpetual subordinated bonds   1,243 -
Redemptions of perpetual subordinated bonds   (1,329) -
Payments to bearers of perpetual subordinated bonds   (584) (565)
Funding contributions received for assets operated under concessions   131 144
Investment subsidies   351 348
Other cash flows from financing activities   2,679 (3,476)
Net cash flow from financing activities   3,530 712
Net increase/(decrease) in cash and cash equivalents   (271) 662
CASH AND CASH EQUIVALENTS - OPENING BALANCE   3,692 2,893
Net increase/(decrease) in cash and cash equivalents   (271) 662
Effect of currency fluctuations   (95) (13)
Financial income on cash and cash equivalents   13 21
Effect of reclassifications   (49) 129
CASH AND CASH EQUIVALENTS - CLOSING BALANCE   3,290 3,692

A key player in energy transition, the EDF Group is an integrated electricity company, active in all areas of the business: generation, transmission, distribution, energy supply and trading, energy services. A global leader in low-carbon energies, the Group has developed adiversified generation mix based on nuclear power, hydropower, new renewable energies and thermal energy. The Group is involved in supplying energy and services to approximately 39.8 million customers (1), 29.7 million of which are in France. It generated consolidated sales of €70 billion in 2017. EDF is listed on the Paris Stock Exchange.

  1. The customers were counted at the end of 2018 per delivery site; a customer can have two delivery points: one for electricity and another for gas.

Disclaimer

This presentation does not constitute an offer to sell securities in the United States or any other jurisdiction.
No reliance should be placed on the accuracy, completeness or correctness of the information or opinions contained in this presentation, and none of EDF representatives shall bear any liability for any loss arising from any use of this presentation or its contents. 
The present document may contain forward-looking statements and targets concerning the Group's strategy, financial position or results. EDF considers that these forward-looking statements and targets are based on reasonable assumptions as of the present document publication, which can be however inaccurate and are subject to numerous risks and uncertainties. There is no assurance that expected events will occur and that expected results will actually be achieved. Important factors that could cause actual results, performance or achievements of the Group to differ materially from those contemplated in this document include in particular the successful implementation of EDF strategic, financial and operational initiatives based on its current business model as an integrated operator, changes in the competitive and regulatory framework of the energy markets, as well as risk and uncertainties relating to the Group's activities, its international scope, the climatic environment, the volatility of raw materials prices and currency exchange rates, technological changes, and changes in the economy.
Detailed information regarding these uncertainties and potential risks are available in the reference document (Document de référence) of EDF filed with the Autorité des marchés financiers on 15 March 2018, which is available on the AMF's website at www.amf-france.org and on EDF's website at www.edf.fr.
EDF does not undertake nor does it have any obligation to update forward-looking information contained in this presentation to reflect any unexpected events or circumstances arising after the date of this presentation.

This press release is certified. You can check that it's genuine at medias.edf.com

 
Only print what you need.

EDF SA
22-30, avenue de Wagram
75382 Paris cedex 08
Capital de 1 505 133 838 euros
552 081 317 R.C.S. Paris

www.edf.fr

   

CONTACTS

 

Press: +33(0) 1 40 42 46 37

 

Analysts and investors: +33(0) 1 40 42 40 38

([1]) After deduction of pumped-storage hydropower volumes, hydropower production stood at 39.2TWh for 2018 (30.0TWh for 2017).

([2]) As of 1 January 2018, IFRS 9 is applied without restatement of the previous year.

([3]) Capital gain before taxes; CTE, which holds 100% of RTE shares.

([4]) Sum of personnel expenses and other external expenses. At comparable consolidation scope and exchange rates. At constant pension discount rates. Excluding change in operating expenses of the service activities.

([5]) Adjusted for interest payments on hybrid issues booked in equity.

([6]) Before Linky, new developments and disposal plan.

([7]) Linky is a project led by Enedis, an independent EDF subsidiary as defined in the French Energy Code.

([8]) New developments: in particular the UK NNB projects, offshore wind power in France.

([9]) Cash flow after dividends without taking into consideration the capital increase.

([10]) Net financial debt is not defined by accounting standards and is not directly visible in the Group's consolidated income statement. It comprises total loans and financial liabilities, less cash and cash equivalents and liquid assets. Liquid assets are financial assets consisting of funds or securities with initial maturity of over three months that are readily convertible into cash and are managed according to a liquidity-oriented policy.

([11]) Breakdown of sales across the segments, before inter-segment eliminations.

([12]) Excluding the Energy Savings Certificate component of market-price offers.

([13]) Sum of personnel expenses and other external expenses. Based on comparable scope and exchange rates and constant discount rates for pensions. Excluding changes in operating expenses of the service activities.

([14]) Regulated activities include Enedis, éS and island activities.

([15]) Breakdown of sales across the segments, before inter-segment eliminations

([16]) Indexed adjustment of the TURPE 5 distribution tariff: + 2.71% at 1 August 2017 and -0.21% at 1 August 2018; indexed adjustment of the TURPE 5 transmission tariff: +6.76% at 1 August 2017 and +3.0% at 1 August 2018.

([17]) Sum of personnel expenses and other external expenses. Based on comparable scope and exchange rates and constant discount rates for pensions. Excluding changes in operating expenses of the service activities.

([18]) Breakdown of sales across the segments, before inter-segment eliminations.

([19]) In 2018, significate sale of 49% minority stake in twenty-four of its UK wind farms. This operation has no impact on EBITDA as EDF Renewables retains control of the operations concerned.

([20]) For the renewable energy generation optimized within a larger portfolio of generation assets, in particular relating to the French hydro fleet after deduction of pumped volumes, sales and EBITDA are estimated, by convention, as the valuation of the output generated at spot market prices (or at purchase obligation tariff) without taking into account hedging effects, and include the valuation of the capacity, if applicable.

([21]) Breakdown of sales across the segments, before inter-segment eliminations.

([22]) Group Energy Services include Dalkia; Citelum, CHAM and service activities of EDF Energy, Edison, EDF Luminus and EDF SA. They consist in particular of street lighting, heating networks, decentralised low-carbon generation based on local resources, energy consumption management and electric mobility.

([23]) Framatome has been included in the consolidation since 31 December 2017.

([24]) Breakdown of sales across the segments, before inter-segment eliminations.

([25]) Breakdown of EBITDA across the segments, before inter-segment eliminations.

([26]) Breakdown of sales across the segments, before inter-segment eliminations.

([27]) Breakdown of sales across the segments, before inter-segment eliminations.

([28]) 2017 data, including EDF Polska's sales in Poland for an EBITDA of €133 million, sold on 13 November 2017.

([29]) A full list of press releases is available on EDF's website www.edf.fr

([30]) A full list of EDF Renewables' press releases is available on the website www.edf-renouvelables.com

 ([31]) The comparative figures at 31 December 2017 have been restated according to IFRS 15. For IFRS 9, applicable from 1 January 2018, the comparative figures have not been restated, as allowed by the standard's transition measures.

([32]) The comparative figures at 31 December 2017 have been restated according to IFRS 15.

([33]) The comparative figures at 31 December 2017 have been restated according to IFRS 15.

([34]) In 2018, this item includes an amount of €966 million relating to the sale of Dunkerque LNG. In 2017, this item includes an amount of €1,282 million relating to the partial sale of the CTE.

([35]) Contributions via capital increases or capital reductions and acquisitions of additional interests or disposals of interests in controlled companies. In 2018, this item includes an amount of €797 million relating to the sale of 49% of EDF Renewables' wind farms, and an amount of €743 million relating to CGN's payment for the NNB Holding Ltd. and Sizewell C Holding Co capital increases (€501 million at 31 December 2017).

Footnotes to the first and second pages
([1]) Excluding Linky, new developments and disposal plan.

([2]) Organic change at comparable scope and exchange rates.

([3]) Excluding hydropower output.

([4]) Net income excluding non-recurring items is not defined by IFRS, and is not directly visible in the consolidated income statement. It corresponds to the Group net income excluding non-recurring items and net changes in fair value on Energy and Commodity derivatives, excluding trading activities and excluding net changes in fair value and equity, net of tax.

([5]) IFRS 9 "Financial Instruments" is effective starting on 1 January 2018, with no retrospective application in 2017.

([6]) Organic change.

([7]) Sum of personnel expenses and other external expenses. At comparable consolidation scope and exchange rates. At constant pension discount rates. Excluding change in operating expenses of the service activities.

([8]) Before IFRS 16 application. At constant legal and regulatory framework in France.

([9]) On the basis of the scope and exchange rates at 01/01/2019 and of an assumption of a 395TWh France nuclear output. At prevailing price conditions beginning of February 2019 (around €50/MWh) for the unhedged 2020 France volumes.

([10]) In accordance with the Group's anticipations regarding the Flamanville 3 project completion costs and schedule.

([11]) Adjusted for the remuneration of hybrid bons accounted for in equity.

([12]) The data published on 31 December 2017 has been restated for the impact of the application of the IFRS 15 standard on revenue (without impact on EBITDA) and the change in segmental reporting (IFRS 8).

Read more: EDF :2018 annual results Rebound confirmation:...

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