Orrön Energy AB (publ)

Good afternoon and welcome to our own energy is kept on Marcus Day. Today we will be joined by our CEO Daniel Fitzgerald, CFO Espen Henne and commercial director Axel Wikner, who will present the 2025 results and the latest strategy of our own energy. We will finish the presentation with a Q&A session. So please feel free to send across questions as you go along and we will collect and go through them at the end. And with that, I would like to hand over to Daniel Fitzgerald to this presentation.

Thank you, Jenny. And welcome to all of those joining here and online for our Capital Markets Update and Q4 results. This is now our fourth time we're doing this for the Capital Markets Update, and we'll be able to share our results in Q4 and for the full year 2025, and then a little bit more insight into the business as we move forward into 2026. I'll be joined today by Axel Wigner, who'll run through the greenfield development, which is a growing part of our business and an exciting part this year as we look into seeing some more recurring revenues from the project development side in Germany and the UK. And I'll also be joined by Espen, who'll cover the financials for today. In terms of looking at our overall business, I think from a high level perspective, it is quite a simple business and strategy to understand. We have 380 megawatts of producing assets in the Nordics. We have a large scale development pipeline and we're fully funded for growth. When I look deeper than that, it gets a little bit more complex as to how we're operating in a really evolving energy landscape. As we move more and more into renewable penetration in each market in which we operate, we have to evolve. We have to change the ways we operate. We trade power, sell power and balance our energy systems. And that's something that I'm really proud of the team in 2025 for building that flexibility into our operating domain. And we'll touch on that a little bit in the presentation. That part of our business is the core part that's the cash generating arm today. It's delivering long-term steady revenues into the business and underpins the finance facility that we use to fund some more of our equity and growth capital across our business. So that really is an important part. excited to say that 2026 is already looking a little bit more positive than what we've seen over the last one or two years with strong pricing in the nordics unfortunately some cold weather as some of you have mentioned today but on the the business side it gives us a lot of revenues already year to date compared to what we've seen in the last one or two years When I move into the large scale development pipeline, we started this business in 2023 and signed our first projects and opportunities. And the second half of last year, we started delivering revenues out of that from Germany. Really happy with what the teams have built. And this is going to be a core part of our business that starts to emerge with recurring cash flows and will start to build a bit more scale across that. over the coming years so axel will go into a bit more detail on that pipeline but i'm really proud of what the teams have been able to achieve and and the start of what is going to be a recurring set of revenues and real value creation coming out of that part of the business And then Espen's role is to ensure we remain fully funded to make sure that we have opportunities to grow. And although we have seen a slower period in 2024 and 2025 in terms of M&A, pleased to see that we're seeing a lot more transactions coming to market this year. I think buyers and sellers are coming closer together in terms of expectations and we're starting to see more M&A coming forwards. So really important that we have that funding line behind us to go and grow this business. i don't believe we we should exist in the same size and scale if we look forward two or three years we need to be much bigger we need a stronger level of recurring cash flows and some more legs to stand on in terms of value creation and that funding set allows us to do that from within our own means If we take a step back into 2025 and look at the highlights for the year, there's no doubt that 2025 was a challenging year for all renewable entities in the Nordics. We saw continued low and volatile pricing. We've seen higher balancing costs coming through the year, and that's changing the way in which we operate our business. We've seen relatively weak pricing through 2025 below the LCOE of new wind coming on stream, and that's impacting the investment decisions across the sector. For us, we delivered 839 gigawatt hours of production in the year, impacted by weather on one hand and some of the price curtailment on the other. Our revenues, we achieved 34 million euros of revenues at 36 euros per megawatt hour achieved price, which is lower than where any of the price forecasters are putting forward their views on the market long term and significantly lower than where we see futures pricing already in 2026. That led to a slightly negative EBITDA of 2 million, noting that we had 7 million still of ongoing costs linked to the Sudan case. And that's down to almost half of that level at 4 million this year. And we expect to see the conclusion of that case towards the end of this year, which will significantly lift the revenues of the company if nothing else changes from 2025. net debt of 89 million euros and importantly at the end of last year we realized our first sales from our greenfield platform we'll touch on that as we go through the presentation but that really is the start of what we see as a recurring revenue stream we realized four million of that at the end of last year and we have 14 of that still to come over this year and next of which some has already been received early in this year So as we look then forward to 2026, I see a much stronger start to the year. Year to date already, we've seen system price in January of around 100 euros a megawatt hour. Achieved price for us around 80 euros a megawatt hour of that. So significantly north of where we saw the entire year last year. We have hedged a portion of volumes as the futures price has increased and that gives us protection to the downside. But if we just forecast that flat futures price into our long-term cash flows, we have a significantly different business to where we're trading today on the share price. And as I touched on with Sudan, it is really a pivotal year for the company with Sudan. We're going to see the end of the trial in May, and then we're going to see a verdict most likely late Q3 or Q4. We'll know more once the trial concludes in the district court. We'll know exactly when that verdict is going to be published. What that means for us is our ongoing cost linked to Sudana down to €4 million for this year. And as of the middle of this year, we will see that dropping to very, very little cost. My view on the verdict has remained unchanged for many years. And now that we've heard all of the evidence in the case, I don't expect anything to come that would change that view. We will reach a full acquittal at the end of the year. And importantly for us, I think the trading in the share today is mostly through the retail arm of the market. And we have some institutions still in there, but there's a range of institutions who are waiting until we see the end of this case. And as we go into the latter part of the year, I think for us anyway, delivering on the production volumes, delivering on a stronger Nordic price, seeing the recurring revenues coming out of the Greenfield business and the end of the Sudan trial, it really opens up a new phase for the company as we exit the year. new institutional owners in the share. The equity comes back on the table as an option to use to grow this company accretively. And there's so many more tools with a much stronger platform behind us. So I really see 2026 as an important formative year for the company where we put some of the old legacy issues behind us and then really see the recurring revenues coming out of the greenfield business and operating business. A very short recap on our Nordic operations and overview. We have 1,000 gigawatt hours of production spread primarily across SE3, SE4, and Finland in some of the higher priced regions. And we tend to take a premium to the system price because of that location. We have a range of assets that have grid connections secured today, that have land positions secured. And in our view, that asset base should be perpetual in its lifetime. We should be able to repower, extend lives. We should be able to add combined batteries and operational sites on the same grid connection. And so that work is ongoing day to day in the Nordics. That's coupled with a greenfield portfolio of around one gigawatt. And today we're seeing a lot of value in the flexibility space. As I look at this asset base and renewables, we should be producing renewables as close to a baseload generator as we possibly can. We need to add storage. We need to add flexibility. And I'm proud of what the operating teams in the Nordics have been able to do through the course of 24 and 25 in expanding that flexibility across our business. Today, there's limited value in some of the new build solar and wind across the Nordics, but that's going to change over time. We see with the increase in flexibility, we're going to see value coming back into that part of the sector. And so we really need to build, continue to build that foundation for the future. The last pillar in the Nordics is on the M&A side, and we have acquired 500 gigawatt hours since the inception of the company. A little bit quieter in 2025, but I see deals coming back into the market at accretive levels this year. Consolidation is really important across the sector now. There's a number of players of our size and scale where it makes sense to combine. We're seeing that with Aneo, who have stepped into a range of transactions. We've seen some of our public peers stepping off the market and so it is getting to a smaller space but there is consolidation still to do on the operating side and with the financing behind us I see us moving more and more in that space this year. Stepping into the power generation side of the business, which really is the core cash generating arm of the company, we delivered 839 gigawatt hours of production. And you can see the seasonality on the left hand side of the graph here, where we produce more in the winter months, in stronger pricing, and a little bit less in the summer months. Importantly, as we look over to the right hand side, we've seen two years of quite difficult conditions in the Nordics. If I look at 2025 alone, we curtailed around 200 and 240 gigawatt hours worth of production, either through poorer weather than average or through price curtailments. So that weak pricing, especially through the summer of last year, has led us to shut down production when prices have been below our variable cost of production. And when we look at our asset base on a long-term average, we should be producing around 1,000 gigawatt hours is where the technical potential of this asset base is. We've given guidance this year or a forecast this year of between 800 and 950 gigawatt hours. And that assumes we have 130 gigawatt hours worth of curtailment with some spread because of weather conditions. If I look at what's happened already year to date, we've had very little if not no price curtailment with the futures price as it is. That's going to impact this production guidance and we'll be able to share more as we go through the year based on how the weather conditions evolve and where we see the market pricing. But centering around that thousand, if we look at the long-term potential of the company, we should be forecasting around that thousand level and then moving year to year depending on the market conditions. Within our operating business, I touched on this a little bit before around how we should operate and how we should think about the power generation from our business. And more and more today, we need to be flexible in how we produce our power and sell our power. When it comes to pricing, we need to be price dependent bidding. So as prices are low or below our variable costs, we need to manage our production levels. on the other side we we saw spiking balancing costs through 2025 and that's impacted our ability to earn strong revenues in those months on some of our assets we've put we've implemented the ability to steer the output of our turbines and reduce our impact on balancing and that also allows us to earn revenues from the ancillary markets on on fcrd up and down on mfr and some of the balancing side So when I look at a renewable asset in the future, we should have the ability to participate not only in the sale of energy, we should be participating in ancillary services, providing balancing services and steering our output to manage our economics from that asset. The addition of batteries into that sector is really important, I think, as we move forwards, where we can take control of the revenue side of the equation and the cost side of the equation. And again, I'm proud of what the teams have been able to do across our Nordic business in implementing the solutions we need and then operating and trading the power in the right way to maximize revenues. And that's going to make us more resilient as we move forward through the future. we've also focused on opex where we've seen some increase in in the underlying opex costs we've also pulled costs out of the business through some of this so when i look at how we're touching and operating our asset base that has evolved over the course of the last two years and now that we see stronger pricing this year our ability to really squeeze more from the assets is going to be important going forwards and it gives us another edge in the m a discussion to be able to add more flexibility into assets where they don't have that today So I see this as its core business for us. It's really important to maintain this and even more important when we look at how renewables should behave in the market in the future. I won't steal all of Axel's thunder on the greenfield development side, but it has been another fantastic year for greenfield development. Germany is really leading in this regard. We sold at the end of last year, we sold 300 megawatts of projects at an average price of around €55,000 per megawatt installed. We'll receive those proceeds in milestone payments between now and ready to build. And that total package is worth around €18 million. So in essence, if I multiply that through into the right-hand side of this slide, where we have around 6 gigawatts of projects in Germany, a mix of solar and batteries, we have a fantastic pipeline that's now starting to come more often to market. As of the start of this year, we have just shy of 300 megawatts that's ready to move into the sales process. We have an ongoing sales process now, which we should see more results from in either late Q1 or into Q2. And then I expect the rest of that 300 to hit the market. Behind that, we have another gigawatt that's going through the late stage municipal discussions now and becomes the feeder funnel for what's coming in this greenfield pipeline. So if I look across Germany and we get pushed a lot from investors and analysts to give them a number in terms of what we're going to sell and when, I'm sure there'll be a few questions today. But if we look at what we did in 2025 for Germany, I think that's the minimum of what we should expect going forwards. The ability to sell around 300 megawatts a year is easily supportable by the pipeline and by what we have in quite late stages at similar multiples to what we've put forward. The 18 million we expect to achieve between over 26 and 27, obviously subject to hitting milestones, but that sort of magnitude then becomes an important recurring cash flow for our business. When I look at the UK, we've secured gate to grid applications for around three gigawatts of projects split between data centers and solar. When I look at the potential magnitude of the revenues from that, it becomes a game changer for the company and material in terms of the market cap. And Axel will touch on that a little bit more in his slides. And we should start to see some revenues from the UK later this year. Putting all of that business together with a view on the overall cash flow of the business, on the left-hand side, you see the operating core of the business clean of any greenfield proceeds. So between 40 and 60 euros per megawatt hour, we earn between 40 and 60 million euros of revenues from that part of the business on our long-term forecasts. In terms of converting into free cash flow, we see somewhere between 10 and 30 million of free cash flow out of that part of the business long-term. If we look at a futures price this year of around €60 a MWh, we sit somewhere in the base case for this at around €50 per MWh achieved. So we're centering around that as of this year. if i look forwards at any of the price forecasters um price decks that we use to to gauge the longer term of the business and investors and banks use the same third-party ones we're sitting at around that 60 euro per megawatt hour system price across the across the board so it really is a strong long-term recurring flat cash flow out of our producing assets And if I take just what we divested last year and assume that we're able to do that year on year, we're adding a very high EBITDA conversion on that business and a lot of recurring cash flow coming out that could double what we've put forward on this. And when I look at the market cap of the business today, it really is a fraction of where our value is. And we can earn our market cap in a very short space of time before we even touch any of the upsides in the the UK business, the data center business, or the flexible battery side of the business in Germany. So it really is a strong platform. We've had two years of lower performance than we'd like in 24 and 25, and 2026 is starting in the right way. And it needs no mention, but this is a sustainable business. If I look at our ESG performance and our ESG rankings, we rank up there at the top of the industry in terms of sustainability, validated by Sustainalytics and ISS. We had no material incidents in 2025. We were carbon neutral across our scope one and two emissions. And even of the scope one emissions, we've seen a large reduction in performance based on 2025's numbers. We are releasing for the first time some more detail around taxonomy alignment and pleased to say that we rank very, very highly in terms of our investments on the taxonomy side and the taxonomy alignment. So this really is a sustainable platform as we look at how we produce and how we operate our business. And then stepping forward into 2026 and what we expect from this year, we expect between 800 and 950 gigawatt hours of production. And that range, we've delivered within that range for the last two years. And if anything, based on year-to-date performance, it's probably a little bit conservative when we look at the potential of the assets, given the pricing we've seen. In that range, we also have production curtailment based on low pricing to the same level as what we saw last year. so we will see and guide the market as we go through the year on how the evolution of weather conditions and curtailment looks in terms of our cost base very similar in a large regard to last year so we expect around 19 million euros of opex in line with what we delivered last year and gna expenditure of 8 million we saved around a million of gna costs through the course of last year and we're sustaining those savings as we go forwards which has been really important in the low-priced environments that we have seen. Really importantly, the Sudan legal cost is dropping by $3 million down to $4 million, and as of end of this year, we forecast no ongoing Sudan legal costs based on the positive outcome from the district courts. Our capital expenditure is 11 million euros, so a million less than last year, but I expect this capital expenditure to be fully funded out of revenues from Greenfield, and those we haven't forecast in any of our cash flows for this year, and Espen will share a little bit more detail on the underlying cash generation of the business. And so with that, I'll pass over to Axel for a review of the Greenfield development, and then I'll come back at the end for a few concluding remarks.

Thank you. 2025 marked a step change in maturity, scale and opportunity for our greenfield development business. Our multi gigawatt platform across UK, Germany and France delivered its first divestments of 310 megawatts during the year. This strong track record is the result of the outstanding development teams we've established throughout these three countries. We have all the competences we need to be successful in the short, medium and long term. And we cover everything from GIS, land acquisition, permitting, and even into construction competences. On the back of this strong performance, we've been able to move from originating opportunity into capitalizing on that opportunity. Starting with a look at 2025 and the performance from Germany in that year, we divested a total of 310 megawatts for up to 18 million euros in total consideration. These divestments were split between two transactions. The first transaction was a single asset Agri-PV project signed in July. Total consideration of 4 million euros of which 2 million were paid at closing also in July and 2 million contingent on approval of the zoning plan and solar package one or equivalent legislation in Germany. The second transaction was a portfolio transaction signed in December for three AgriPV projects. Total consideration for that second transaction was up to 14 million euros. And under the milestone structure, we will have received 40% of the total consideration as the projects reach Ready to Permit or RTP. And we will receive 60% of the total consideration as these projects reach Ready to Build or RTB. We expect all three projects to reach RTP this year and RTP next year, subject to favorable municipal approvals and grid reservations. Year to date we have already received 1.6 million euros for the first project of 93 megawatts. These divestments are of course important from a revenue and cash flow perspective. but they're also an important validation of our business model and they show that there's a deep and competitive buyer universe for our projects. You can also use these transactions as a proxy to estimate the value of our broader pipeline which comes after these first divestments. We have seen a bit of a shift in the market from single project divestments into more portfolio type transactions and we will continue to stay close to the pulse on that and remain flexible in our approach to capitalize value. Looking ahead at 2026, we now have an advanced pipeline which enables this recurring revenue element. This is the first time since inception for this business where we have the combination of scale and maturity. And it offers us very interesting opportunities to crystallize value. We have a total pipeline of six gigawatts. It's spread roughly one third on solar and two thirds on battery projects. Out of the solar portion, we have 1.3 gigawatts of AgroPV projects with at least land reserved. and indication of grid availability. Out of those 1.3 gigawatts, we have 280 megawatts where we have already received the municipal approvals. And in that category of projects, we also have the 90 megawatts which have reached RTP and where we have an ongoing sales process. I'm very conscious there's a lot of numbers here, but I still want to stick with this 280 number for a little bit longer. And if we go back just one year from today at the Capital Markets Day last year, the megawatts in that category was zero. And I think that gives a good indication of the scale and maturity we have today compared to just one year back. And it's also a good way of looking ahead what you can expect from 2026 and beyond. So the combination of scale and maturity supports this view that we will now get recurring revenues from this part of the business. In addition to the solar projects we have a multi-gigawatt battery pipeline where 900 megawatts have also secured the municipal approvals. These are large-scale transmission connected projects and we're in close contact with the transmission system operator And we expect grid offers for these projects late this year or early next year. Once we have the grid offers, we're ready to go to market with these projects. So to conclude, Germany remains a core value, a core engine of value creation for us, both in the near and medium term. The combination of scale and maturity and our flexible approach to value creation means that we're well positioned for a strong 2026. Moving to the UK, we've been able to secure a successful outcome of the UK grid reform. We have a total capacity of 2.9 gigawatt of projects now at RTP with both land and grid secured. We expect to receive the final connection details in the second half of 2026. We have started exploring divestment options, in particular on the solar side, But we're also recognizing the fact that we may want to wait until triggering those divestments until we have the final connection details to maximize the value out of those projects. So looking at the solar side, it's a total capacity of 1.8 gigawatts. You will see the capacity split per the three projects listed in the presentation. So one project in Devon, two projects just north of London. We have completed the pre-permit work for all these projects and we're ready to either divest or run into permitting. On the data center side, we've secured 1.1 gigawatts of capacity. And we've done so as data center projects have moved from being IT projects into power projects. And that's a change that has been triggered by the radical increase in power consumption of these data centers. Just a few years back, a big data center would be 5 or maybe 10 megawatts. Today, you can easily see several hundred megawatts of capacity on these data centers, or even gigawatt scale. And that means that the power side, where we are very, very confident and well-placed to deliver, becomes more and more important. Same thing here, two data centers are just north of London, and one is in the East Midlands. We also have the optionality to offer the Altmet data center operator private wire options for solar and battery projects as a value add. But we're not looking to operate this project, so it's the similar or the same strategy as we have with our wider development platform where we're looking to divest before large capital commitments. In addition to these six projects, three solar projects, three data center projects, we have a multi gigawatt pipeline of additional solar and battery projects with land secured and well positioned for future grid application windows as and when the capacity limits change. So overall, we're in a good position in the UK with a strong portfolio coming out of the grid reform. And we do expect some value recognition from the fact that grid connections, in particular for solar, are now scarce following the capacity limitations imposed by the UK regulator. So to conclude, we see that our model works, it's repeatable and it's scalable as we've been moving from first sales to recurring revenues. Our initial divestments of 310 megawatts validate our business model and we have 90 megawatts in addition in an ongoing sales process. After that, we have a large pipeline of three gigawatts of near-term solar opportunities across Germany and the UK, which we will take to market in the coming period. And as I've touched upon, these divestments are important from a monetary perspective, but they also validate the quality of the projects. We see that we've, through external validation as part of the first project sales, have developed these projects best in class. Looking ahead to 2026 and beyond, we now have up to 14 million euros in contracted revenues from prior divestments. And our development teams are now focused on delivering to unlock those revenues. We expect multiple additional project divestments annually going forward. And the combination of our large-scale pipeline, as well as track record from divestments signed to date, makes us confident that we can deliver a strong return on capital in this part of the business. So to conclude, we have moved from investment mode to value realization mode. And with the business being validated with scale and maturity, we're now well positioned to crystallize value near term and achieve annual recurring revenues going forward. With that, I'll hand over to Espen. Thank you.