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

March 2023. Thanks to its vertical integration between renewable energy generation and electricity and gas supply, the Audax Group has been able to successfully manage the high volatility of global energy markets, marked – as is known – by the conflict in Eastern Europe and the increase in raw material prices.

The business optimization measures implemented during the year, the market diversification policy and the 9% increase in new installed capacity (which reached 245 MW) resulted in growth of 17% of gross margin (144 million euros) and of the 16% of EBITDA (54 million euros). The net result has reached the 7.8 million of euros, a return to positive territory after the loss of 3.3 million in 2021.

 

Audax has increased the weight of 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 renewable energy generation at 100%. EBITDA in generation increased significantly compared to the end of 2021 as a result of the higher 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; the portfolio still has 130 million euros of assets that 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.

 

As for the gross financial debt, the company has managed to reduce its debt level by 130 million euros, bringing it to 642 million euros and consolidating its financial position in order to continue in the roadmap of project development and addressing short-term maturities. As a result of its liquidity 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 basis, if the recent Market Access transaction with Shell Energy Europe Limited in Spain had had an impact on the full 2022 financial year, Audax would have generated approximately €50 million of additional free cash flow.

 

Audax continues to make progress in its organic and inorganic growth policy, which has allowed it to increase its 14% supply points over the last four years, reaching 387,000 today and having provided a total of 13 TWh of energy. Over the past year, due to the evolution of the markets and the risks arising from volatility, the company has focused its efforts on strengthening profitability, implementing measures aimed at diversifying the portfolio and mitigating risk in all the countries in which it operates. In this sense, it has reduced its supply points by 25% and the volume of energy supplied by 15% compared to the previous year, which has 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 more implemented (mainly in Southern Europe), are the ones that have had the best performances during this exercise. Looking at the country, Hungary has the greatest weight in electricity, representing 45% of the total energy supplied by the group, while for gas, the Netherlands leads with 52% of the total. The Iberian Peninsula area, on the other hand, represents practically a third of the total, in both raw materials.

The main target remains the industrial, which represents 93% of its total portfolio. The domestic customer during the 2022 financial year reduced its weight from 11% to 7%, a result of the efforts made to advance in the company's historical 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 plants, which added 90 GWh.

In terms of the evolution of the projects and following the 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 in its planned development and construction operations, starting work on 26 MW and putting 19 MW of photovoltaic plants into operation.

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 must be added under construction and 245 MW already in operation.

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

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

 

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