2022. A year with a "+" sign for Audax Renovables

March 2023. Strengthened by the vertical integration between renewable 100% energy generation and electricity and gas supply, the Audax Group has been able to successfully manage the high volatility of energy markets globally, marked – as is known – by the conflict in Eastern Europe and the increase in the price of raw materials.

The business optimization measures implemented during the year, the market diversification policy and the 9% increase in new installed power (which reached 245 MW) translated into a growth of 17% of gross margin (144 million euros) and of 16% of EBITDA (54 million euros). The Net income reached i 7.8 million of euros, a return to the positive sign after the loss of 3.3 million in 2021.

 

Audax increased the weight of the generation in its contribution to EBITDA, going from 27% in 2021 to 42% in 2022; this is a result resulting from the commitment to a vertically integrated business that bets on the generation of renewable energy at 100%. EBITDA in generation increased significantly compared to the end of 2021 as a result of the greater installed capacity and the higher sales price.

This generation EBITDA comes from a portfolio valued - at the end of last year - at 129 million euros by an independent entity; 130 million euros of assets remain in the portfolio which do not generate EBITDA because the operational phase has not yet started. A figure that highlights the great potential of the Group's generation activity.

 

For what concern gross financial debt, the company managed to reduce its debt level by 130 million euros, placing it at 642 million euros and consolidating its financial position in order to continue its Road map to develop projects and meet short-term deadlines. As a result of liquidity management and capital management policies, the company generated 152 million in operating cash flow, allocating a total of 45 million for new investments and 146 million to reduce debt.

On a pro forma balance sheet, if the recent Market Access transaction with Shell Energy Europe Limited in Spain had an impact on the full 2022 financial year, Audax would have generated approximately €50 million additional cash flow.

 

Audax continues to make progress in its organic and inorganic growth policy, which has allowed it to increase 14% supply points over the last four years, reaching 387,000 today and having provided a total of 13 TWh of energy. Over the last year, due to the evolution of the markets and the risks deriving from volatility, the company has focused its efforts on strengthening profitability, implementing measures aimed at portfolio diversification and risk mitigation in all countries in which it operates. In this sense, it reduced the supply points by 25% and the volume of energy supplied by 15% compared to the previous year, which translated into a positive evolution of both its gross margin and EBITDA. Today, electricity supply points represent 80% of the total and gas points the remaining 20%.

The markets where vertical integration is most implemented (mainly in Southern Europe), they are the ones who have had the best performance during this exercise. Looking by country, Hungary has the greatest weight in electricity, accounting for 45% of the total energy supplied by the group, while for gas, the Netherlands leads with 52% of the total. The area of the Iberian Peninsula, on the other hand, represents practically a third of the total, in both raw materials.

The main target remains industry, which represents 93% of its total portfolio. The domestic customer during fiscal 2022 reduced its weight from 11% to 7%, a result of efforts made to advance in the company's historic target segment, namely SMEs.

Globally, the Audax production during 2022 it was 258 GWh (if Panama is considered), for an increase of 29% compared to the previous year. Production on the Spanish market grew significantly (70%) as a result of the contribution of new photovoltaic systems, which added 90 GWh.

Regarding the evolution of the projects and following compliance with the objectives contained in RDL 23/2020 in Spain, the Audax Group's portfolio stands - at the date of publication of this note - at 1.4 GW. The company continues to advance its planned development and construction operations, commencing work on 26 MW and commissioning 19 MW of PV.

The Group has projects for 141 MWp at a very advanced stage with a favorable environmental impact statement (DIA) and for another 323 MWp in a state very close to the so-called "Ready to Build". To these, 26 MWp under construction and 245 MW already in operation must be added.

During 2022, the company strengthened its strategic direction and sustainability management with the aim of continuing to do progress on ESG. The Board of Directors approved the new sustainability policy and introduced a professional figure into the company who will be responsible for development and execution.

The strategy is structured around the three ESG pillars, namely environmental, social and governance sustainability. On this basis, actions and initiatives capable of leading to concrete improvements in performance have been defined and, over time, will continue to be defined.

 

For José Elias, president of Audax Renovables, "we were once again able to successfully navigate a year in which the market put us to the test. Our solid strategy for renewable energy generation and customer portfolio optimization, combined with reaching important strategic agreements with high-level partners will allow us to further increase Audax's competitiveness".