Neoen reports first-quarter revenue in line with its expectations and confirms its 2024 adjusted EBITDA target

Paris, May 2, 2024

FIRST-QUARTER 2024 REVENUE

Neoen reports first-quarter revenue in line with its expectations and confirms its 2024 adjusted EBITDA target

▪  Electricity generation totaled 2.2 TWh in the first quarter of 2024, up 11% year-on-year

▪  First-quarter 2024 revenue totaled €141.4 million, down 8% at current exchange rates and down 6% at constant exchange rates compared to the first quarter of 2023 

▪  This performance reflects the mechanical effect of the gradual entry into force as from April 2023 of several power plants PPAs, which benefitted from significant early generation revenue in the first quarter of 2023

▪  The secured portfolio^[1] stood at almost 9.1 GW at March 31, 2024, with 8.0 GW in operation or under construction

▪  The Group is reiterating its 2024 adjusted EBITDA ^[2] target of between €530 million and €560 million, with an adjusted EBITDA margin² above 85%

▪  Lastly, the Group is also restating its adjusted EBITDA² target of over €700 million in 2025 and its target of reaching 10 GW in capacity in operation or under construction in the course of 2025

Neoen (ISIN: FR0011675362, Ticker: NEOEN), one of the world’s leading independent producers of exclusively renewable energy, is reporting unaudited revenue of €141.4 million in the first quarter of 2024, down 8% compared to the first quarter of 2023. At constant exchange rates, revenue declined 6%.

Xavier Barbaro, Neoen’s Chairman and Chief Executive Officer, commented: “We have made a good start to the year, winning some impressive projects and posting revenue in line with our expectations. We expect our revenue to return to growth over the next few quarters as the 3 GW in assets currently under construction gradually come into service. These assets include several long-duration batteries, in line with the ambitions we set out just over a year ago. The new 300 MW/4-hour storage capacity contract awarded in Western Australia is a testament to the value of the solutions we can provide to enhance grid reliability. With a portfolio of batteries in operation or under construction now at 1.9 GW/4.5 GWh, Neoen is increasingly establishing itself as a world leader in storage.”

Operational highlights

(1)   Gross capacity including projects in which Neoen is a minority shareholder: Cestas (300.0 MWp, 36% owned by Neoen), Seixal (8.8 MWp, 50% owned by Neoen), as well as Les Beaux Monts (24.2 MW), Le Berger (22.6 MW), and Saint-Sauvant (20.6 MW), three wind assets in which Neoen sold 95% of its shareholding in 2022.

(2)   Includes a +2 MW net adjustment of capacity.

Following the commissioning of the Storbrännkullen (57 MW) wind farm in Sweden and the Bessines (22 MWp) and Lirac (5 MWp) solar power plants in France, capacity in operation totaled 5,070 MW at March 31, 2024, up from 4,983 MW at December 31, 2023.

Electricity generation totaled over 2.2 TWh in the first quarter of 2024, up 11% compared to the same period of 2023.

The average availability rate of the wind assets stood at 95.4% in the first quarter of 2024, compared to 89.0% in the first quarter of 2023. This increase is chiefly attributable to the improved availability of the Mutkalampi power plant in Finland, which was affected by a cable failure in the first quarter of 2023.

The average load factor of the wind assets was 30.9% in the first quarter of 2024, versus 31.2% in the corresponding quarter of 2023. This reflects the less favorable wind conditions in France, partially offset by the higher availability rate and better wind conditions in Australia.

The average availability rate of the solar assets stood at 96.3% in the first quarter of 2024, compared to 93.2% in the first quarter of 2023. This increase mainly reflects the higher availability level of the El Llano power plant in Mexico. The replacement of its transformer was finalized in late 2023.

The average load factor of the solar assets was 22.7% in the first quarter of 2024 compared to 22.3% in the first quarter of 2023. This reflects the higher availability rate and more favorable irradiation conditions in Australia, which were partially offset by reduced solar resources for European power plants.

First-quarter 2024 revenue down 8% at current exchange rates and down 6% at constant exchange rates

(1) Unaudited financial data.

(2) Corresponds to the Development and investment segment.

(3) During the first quarter of 2024, merchant solar and wind energy revenue totaled €16.8 million, down from €24.9 million in the first quarter of 2023.

(4) Other revenue chiefly derives from the capacity payments earned by certain batteries and the Kaban wind farm (since January 1, 2024), from the development business, and from services to third parties.

Neoen’s first-quarter 2024 consolidated revenue totaled €141.4 million, a decrease of 8% compared to the first quarter of 2023. At constant exchange rates³, it declined 6%. This change is chiefly attributable to the mechanical effect of the lower contribution from several assets in Finland and Australia of which longterm PPAs entered into force progressively from the second quarter of 2023. The Mutkalampi power plant in Finland earned significant early generation revenue during the first quarter of 2023 ahead of the entry into force of its various PPAs, mainly during the second and third quarters of 2023. The Western Downs solar power plant in Australia also earned substantial early generation revenue in the first quarter of 2023, ahead of the entry into force of its long-term PPA price at the beginning of the second quarter of 2023. Conversely, revenue was boosted by the contribution from assets that started injecting in 2023 and the first quarter of 2024, including in France, Finland, Sweden and Canada. It was also lifted by a positive volume effect linked to several assets that had already started injecting at January 1, 2023 in Australia and Finland. Lastly, revenue was impacted by the asset disposals completed in 2023 as part of farm-down transactions and an unfavorable currency effect, mainly due to the Australian dollar change against euro.

Wind revenue declined 7% compared to the first quarter of 2023 (down 5% at constant exchange rates).  This is mainly due to the expected contraction in revenue from the Mutkalampi wind farm following the entry into force of its long-term PPAs. Conversely, revenue was boosted by the contribution from assets that started injecting in 2023 and the first quarter of 2024, notably in France, Sweden and Finland, and by a larger contribution from the Kaban power plant in Australia: while Kaban’s generation was ramping up during the first quarter of 2023, its long-term capacity contract entered into force on January 1, 2024. Lastly, the better wind conditions in Australia had a positive impact, while reduced wind levels in France had a negative effect. Wind contributed 49% of Neoen’s consolidated first-quarter 2024 revenue, compared to 48% in the first quarter of 2023.

Solar revenue declined 13% compared to the first quarter of 2023 (down 11% at constant exchange rates).

The decrease chiefly results from the lower contribution from the Western Downs power plant in Australia

following the entry into force of its long-term PPA price at the beginning of the second quarter of 2023. Conversely, revenue was boosted by the contribution from assets that started injecting in 2023 and the first quarter of 2024, mainly in France, and by a positive price effect in France and the Americas. Solar contributed 39% of Neoen’s consolidated first-quarter 2024 revenue, compared to 41% in the first quarter of 2023.

Storage revenue rose 1% on its first-quarter 2023 level (up 5% at constant exchange rates). This increase reflects a larger contribution from the Victorian Big Battery in Australia, which benefited from unforeseen grid-related events, and the Yllikkälä Power Reserve One battery in Finland. These positive effects were partially offset by the lower performance of the Hornsdale Power Reserve in Australia, which recorded a decline in its frequency regulation revenue (FCAS). Storage revenue accounted for 12% of consolidated revenue in the first quarter of 2024, up from 11% in the first quarter of 2023.

In the first quarter of 2024, merchant energy solar and wind energy revenue declined 32% from its level in the first quarter of 2023. As expected, it reflects the mechanical effect of the decrease in unhedged early generation revenue, especially from the Mutkalampi and Kaban power plants. It was also attributable to i) the lower sales of green certificates by the Western Downs power plant, and ii) the introduction of shortterm hedging contracts backed by early generation revenue of several assets in France, which have the option of selling their production on the spot market for an 18-month period prior to the entry into force of their governmental PPAs. All in all, the share of merchant energy sales within the solar and wind revenue dropped from 18% in the first quarter of 2023 to 14% in the first quarter of 2024. 

Portfolio at March 31, 2024: 27.8 GW, including a secured portfolio of 9.1 GW

(1) Net of the sale of the La Machine (5 MWp), Soumont St-Quentin (5 MWp), Soumont (4 MWp) and Saint-Priest-laPrugne (3 MWp) solar power plants and the abandonment of two projects in France totaling 21 MWp.

Capacity in operation or under construction was 8.0 GW at March 31, 2024, stable compared to December 31, 2023. This figure includes 5.1 GW in operation and 2.9 GW under construction. During the first quarter of 2024, Neoen brought into operation the Storbrännkullen wind farm (57 MW) in Sweden and the Bessines (22 MWp) and Lirac (5 MWp) solar power plants in France. It also launched the construction of the Morhange 2 solar power plant (26 MWp) in France.

The secured portfolio (assets in operation, under construction and awarded projects) totaled 9.1 GW at March 31, 2024, compared to 9.0 GW at December 31, 2023. During the first quarter, awarded projects benefited from the net gain of 94 MW in France (after two solar projects totaling 21 MWp were abandoned) whereas the construction start of 26 MW and the sale of four solar projects in France (with 17 MWp in combined capacity) lowered this figure.

The portfolio’s total capacity (excluding early-stage projects) was over 27.8 GW at March 31, 2024, compared to 27.6 GW at December 31, 2023.

Outlook 

Neoen is reiterating its 2024 adjusted EBITDA target of between €530 million and €560 million^[4], with an adjusted EBITDA margin above 85%. 

The Group is also restating its adjusted EBITDA target of over €700 million in 2025 and its target of reaching 10 GW in capacity in operation or under construction in the course of 2025.

All the Group’s targets include the best estimate to date of the likely commissionning dates of its projects and its current view of likely spot prices.

First-quarter 2024 highlights

Joint financing of the second tranche of Goyder South wind farm and Blyth Battery in Australia 

On February 5, 2024, Neoen reached financial close on the 203 MW second tranche of its Goyder South Stage 1 wind farm and its 238.5 MW / 477 MWh Blyth Battery. Both assets are entirely owned by Neoen with debt financing provided by a group of five lenders. Construction of the second tranche of Goyder South Stage 1 and Blyth Battery are underway, and both are expected to be operational by mid-2025.

Refinancing of Neoen SA’s syndicated credit facility

On February 8, 2024, Neoen completed the refinancing of the syndicated credit facility arranged in March 2020. Its size was increased from €250 million to €500 million, and its maturity extended from 2026 to 2029. This new credit facility includes a €300 million term loan and a €200 million revolving credit facility. Financial conditions are indexed to Environmental, Social and Governance (ESG) criteria. The original syndicated loan remained unused at December 31, 2023, as well as the new credit facility as of today. This refinancing significantly enhances the liquidity position of the Group, which is fully focused on achieving its target of 10 GW in capacity in operation or under construction in the course of 2025.   

Neoen reaches 1 GW of renewable energy capacity in the Nordics and signs two more PPAs 

On February 20, 2024, Neoen passed the milestone of 1 GW of renewable energy in operation or under construction in the Nordics, five years after launching the construction of its first wind farm in Finland. The Group currently operates Finland’s largest wind farm (Mutkalampi, 404 MW), launched the construction of the Swedish largest solar plant (Hultsfred, 100 MWp) and is also a leader in storage, with 232 MW/289 MWh of batteries in operation or under construction in the Nordics. In addition, the Group signed two additional

corporate power purchase agreements of c.14 MW each, with Equinix for Storbrännkullen wind farm in Sweden and with Mölnlycke Health Care for Mutkalampi wind farm in Finland.

Neoen completes a landmark renewable energy portfolio financing in Australia

On February 23, 2024, Neoen completed the debt financing of a portfolio which includes 7 wind and solar operating assets in Australia, as well as Collie Battery Stage 1 (219 MW/877 MWh), currently under construction. Neoen raised over AUD1.1 billion of debt with maturity of 5 years and 7 years, refinancing approximately AUD700 million of single asset-level debt. This new financing is being provided by a group of 11 major Australian and international lenders.

Appointment of Yves-Eric François as Chief Financial Officer

On February 28, 2024, Neoen announced the appointment of Yves-Eric François as Chief Financial Officer, previously Chief Financial Officer of Neoen Australia. Yves-Eric François brings its financial expertise as well as its operational experience gained in Australia, one of Neoen’s main and most dynamic countries. This appointment took effect on 1 April 2024, when he succeeded Louis-Mathieu Perrin, who, after supporting Neoen’s strong growth since 2019, left the company to assume new responsibilities in another company.

Neoen wins 119 MWc in solar projects in France

On March 7, 2024, Neoen was awarded ground-mounted solar projects amounting to 119 MWp in the latest call for tenders issued by the French government’s Energy Regulation Commission (CRE). Neoen won seven projects ranging from 5 to 30 MWp and ranked second in terms of capacity awarded in this session. With a total of 479 MWp won over the past two years, Neoen remains the top awardee for the whole PPE2 call of tenders.

Recent event

Neoen to build Stage 2 of Collie Battery after winning its second 4-hour storage contract in Australia

On April 29, 2024, the Australian Energy Market Operator (AEMO) has awarded Neoen a second capacity services contract for Western Australia’s South-West Interconnected System (SWIS). The 300 MW / 4-hour storage contract will be delivered by Stage 2 of Collie Battery sized at 341 MW / 1,363 MWh. Including Collie Battery Stage 1 (219 MW / 877 MWh) which is already under construction, Collie Battery will have the ability to charge and discharge 20% of the average demand in the SWIS. This takes Neoen’s Australian portfolio to 4 GW of capacity in operation or under construction, cementing its position as the country’s largest renewable company.

This presentation contains forward-looking statements regarding the prospects and growth strategies of Neoen and its subsidiaries (the “Group”). These statements include statements relating to the Group’s intentions, strategies, growth prospects, and trends in its results of operations, financial situation and liquidity. Although such statements are based on data, assumptions and estimates that the Company considers reasonable, they are subject to numerous risks and uncertainties and actual results could differ from those anticipated in such statements due to a variety of factors, including those discussed in the Group’s filings with the French Autorité des marchés financiers (AMF) which are available on the website of Neoen (www.neoen.com). Prospective information contained in this presentation is given only as of the date hereof. Other than as required by law, the Group expressly disclaims any obligation to update its forward looking statements in light of new information or future developments.

Webcast

Neoen will comment on its Q1 2024 revenue in a live webcast at 10:00 a.m. CET on Thursday, May 2, 2024.

To join the webcast live or hear a playback, please copy and paste the following URL into your browser: https://channel.royalcast.com/landingpage/neoen/20240502_1/

Next financial reports

First-half 2024 results: July 25, 2024 Nine-month 2024 revenue and operational highlights: November 5, 2024

The Annual General Meeting will be held on May 14, 2024.

About Neoen

Founded in 2008, Neoen is one of the world’s leading independent producers of exclusively renewable energy. With proven expertise in solar power, wind power and storage, the company plays an active role in the energy transition by producing and supplying competitive, green, local energy on four continents. After a six-fold increase in the last six years, its capacity in operation and under construction stands at 8.3 GW.

Neoen’s flagship operations are France’s most powerful solar farm (300 MWp) in Cestas, Finland’s largest wind farm (404 MW) in Mutkalampi, one of the world’s most competitive solar plants in Mexico (El Llano, 375 MWp) and two of the world’s most powerful large-scale storage plants, both in Australia: Hornsdale Power Reserve (150 MW/193.5 MWh storage capacity) and the Victorian Big Battery (300 MW/450 MWh). 

A high-growth company, Neoen is targeting 10 GW in operation or under construction in the course of 2025. Neoen is listed in Compartment A of Euronext’s market in Paris (ISIN code: FR0011675362, Ticker: NEOEN) on the SBF 120 and CAC Mid 60 indexes.

For more information: neoen.com

Investors                                                            Press

Neoen                                                   OPRG Financial

ir@neoen.com                                                    Isabelle Laurent                                  Fabrice Baron

                                                                            +33 6 42 37 54 17                               +33 6 14 08 29 81                                                                                              isabelle.laurent@oprgfinancial.fr   fabrice.baron@oprgfinancial.fr