THEOLIA : Strong growth in both operational capacity and EBITDA - Strengthening of its activity for own account
661 MW total installed capacity, an increase of 411 MW in one year
More than 20% growth in consolidated sales
409% growth in sales of electricity for own account
Increase of €12 million in consolidated EBITDA
Confirmation of target of 2,000 MW in operation by the end of 2011
Strengthening of its executive team
Jean-Marie Santander, Chairman and Chief Executive Officer of THEOLIA: "2008 marks an important step for the Group THEOLIA: production of electricity for own account has a strong impact on our accounts; the Group has decided to keep a maximum number of wind farms and to decrease sales to third parties, especially in Germany. We expect to have a minimum capacity of 1,135 MW by the end of 2009, without considering additional wind farms which will be acquired in the remaining 18 months. In addition, the Group has secured the supply of more than 1,000 MW of wind turbines. Thus the target of 2,000 MW by the end of 2011 is solid. Taking into consideration the new dimension of the Group and following my proposal, THEOLIA has decided to disassociate the roles of Chairman and CEO, and to recruit two General Managers."
Installed capacity in operation
The installed capacity of wind farms in operation for own account increased by 277 MW, going from 73 MW on June 30, 2007 to 350 MW on June 30, 2008.
The installed capacity of wind farms in operation for third parties increased by 134 MW, going from 177 MW on June 30, 2007 to 311 MW on June 30, 2008.
Overall, the installed capacity of wind farms operated by the Group THEOLIA amounted to 661 MW on June 30, 2008.
On June 30, 2008, the pipeline of THEOLIA totaled 2,796 MW, broken down as follows:
on June 30, 2008
|Western Europe||Emerging countries||TOTAL|
The Group expects to commission by the end of 2009 a capacity of 474 MW out of the 1,875 MW of projects in Western Europe. With 661 MW already in operation and including this additional expected capacity, the Group anticipates an installed capacity of at least 1,135 MW in operation by the end of 2009.
By the end of 2011, this growth will be augmented by organic development in Western Europe and in emerging countries over 2010 and 2011, as well as potential acquisitions.
The Group is confident in the confirmation of its target of 2,000 MW in operation by the end of 2011.
Supply of wind turbines
In order to assure the construction of its wind farms, the Group pursues an active policy of securing the supply of turbines.
The Group has secured the supply of turbines from six suppliers for its wind farms that will be commissioned from now until the end of 2009.
Moreover, THEOLIA has signed two memoranda of understanding with Siemens:
the first refers to the delivery of turbines representing an installed capacity of 300 MW by the end of 2012,the second, in the context of the international bid tender launched by ONE (the Moroccan state electricity company) in Morocco for a 300 MW wind farm, refers to the delivery of turbines representing an installed capacity of 300 MW (not included at this stage in the pipeline). This MOU contains a clause stating that this capacity could be transferred in a framework agreement if THEOLIA is not selected.
As such, the Group THEOLIA has secured the supply of more than 1,000 MW of wind turbines.
The consolidated sales for the Group THEOLIA reached €61.9 million in the first half 2008, an increase of more than 20% over the first half 2007.
Electricity sales from wing energy grew from €22.2 million as of June 30, 2007, to €53.2 million as of June 30, 2008, an increase of 139%.
The Group decided not to realize any sales of wind farms to third parties during the first half of 2008, whereas the first half 2007 recorded sales of €16.1 million.
Sales from the non-wind activities for the period amounted to €8.7 million. Within a constant scope of consolidation (the Group consolidates Thenergo using the equity method since July 2007), this activity grew by 44% compared with the first half 2007.
The consolidated EBITDA of the Group THEOLIA increased by €12 million compared to the first half 2007. This growth is the direct result of the strong increase in the EBITDA from electricity sales for own account.
The financial statement of the Group THEOLIA is as follows:
|(in € million)||June 30, 2008||June 30, 2007|
|Current operating income||(17.1)||(16.4)(1)|
|Net profit/loss (Group share)||(25.3)||6.2|
(1) Reclassification of €5.3 million from the item « Other non-current operating income and expenses » to the item « Other current operating income and expenses », in order to improve the comparison between the current operating income with that of 2008. The current operating income published on June 30, 2007 was €(11.1) million.
Current operating income
The scale of investments led to the accounting of depreciations and provisions which had a significant impact on the current operating income, amounting to €(17,1) million as of June 30, 2008.
Consolidated net profit
The difference between the recorded net profits as of June 30, 2007 and June 30, 2008 can be explained by two major items:
In the first half of 2007, THEOLIA recorded an exceptional dilution profit of €20 million from its shares in Thenergo, whereas during the first half of 2008, the Group registered a dilution profit of only €0.6million.
The cost of net financial debt increased by €11.4 million between the first half of 2007 and the first half of 2008, mainly due to the accounting interest charges on the convertible bond (OCEANES) as well as the increase in interest charges related to acquisitions of wind farms in 2007.
Performance by business segment
|(in € million)||Sales of electricity from wind energy||Development, construction and sales of wind farms||Non-wind activity||Holding||Total|
|Of which own account||30.2|
(1) EBITDA = current operating income + depreciation/provision, before non cash compensation costs (allocation of stock grants and warrants)
(2) Non significant
The performance of the first half illustrates the rapid increase in production of electricity for own account, THEOLIA's core business:
the installed capacity of the wind farms owned by the Group grew from 73 MW on June 30, 2007 to 350 MW on June 30, 2008 (+380%),
corresponding sales grew from €5.9 million to €30.2 million (+409%),
corresponding EBITDA grew from €3.9 million to €22.3 million (+472%).
Evolution of net debt and cash position
|(in € million)||June 30, 2008||December 31, 2007|
|Non current financial debt(1)||247.4||256.7(2)|
|Current financial debt||109.9||90|
|Holding debt (OCEANES)||202||195.9|
|Total financial debt||559.3||542.6|
|Cash and cash equivalents||(161.5)||(326.2)|
(1) 100% non recourse project financing - fixed interest rates
(2) See detail of the reclassifications compared to the published accounts on December 31, 2007 in the Notes to the financial statements on June 30, 2008 (Note 2)
Net debt moved from €216,2 million on December 31, 2007 to €397.8 million on June 30, 2008 encompassing the reduction in cash and cash equivalents, which decreased from €326 million on December 31, 2007 to €161.5 million on June 30, 2008. This change in cash position is illustrated as follows:[Please download the PDF attachment for the graphics]
The €10.4 million gross cash flow from operations generated during the first six months was absorbed by the strong increase in working capital requirement of €75.9 million.
Change in working capital requirement includes payments for nearly €70 million related to the supply of wind turbines mainly for Germany, Italy and Spain.
Concerning investments, acquisitions have been made for an amount of €53 million, including the Compagnie Eolienne du Détroit, as well as two wind farms in France. The remaining is linked to additional payments for acquisitions completed over previous periods.
Strengthening of own account business
In order to maximize value creation for shareholders, the Chairman and CEO of THEOLIA proposed to the Board of Directors to favor the development of its own account business. This strategic change received full support from THEOLIA's Board of Directors, which includes executive members, independent members and members from GE.
As "pure player" in the wind business, THEOLIA has decided to focus on the production of electricity while keeping a maximum number of wind farms for its own account.
Supported by a favorable regulatory environment, with attractive feed-in tariffs in Western Europe, this activity benefits from THEOLIA's expertise.
Electricity sales for own account generate a recurring and predictable stream of revenues, as well as a high EBITDA margin, over a period of 15 to 20 years.
The strategy applied in its main market, Germany, will from now on be in line with that pursued in the other European countries where THEOLIA operates.
Disassociation of the roles of Chairman and CEO
Upon the proposal of Mr. Jean-Marie Santander, Chairman and CEO, the Board of Directors has decided by the majority of its Board members present or represented to disassociate the roles of Chairman and CEO, in order to efficiently contribute to the quality of the Board's duties and to implement a corporate governance for THEOLIA in line with best practices.
In this context, Mr. Jean-Marie Santander, whose current mandate as Chairman and CEO will come to an end in June 2009, will remain Chairman of the Group. The executive search for a CEO, in charge of the implementation of the Group's strategy decided by the Board of Directors, is currently ongoing.
Strengthening of the executive team
To accompany its future growth, THEOLIA has also decided to reinforce its executive team with two majors recruits: Thierry Gagnard(1) as General Manager - Finance and Serge Gracia(2) as General Manager- Operations.
(1) Thierry Gagnard, ESC Bordeaux (1980) - MBA (CPA, Groupe Lagardère 1997-1998), 49 years old, with more than 25 years of experience in industrial and hightech companies, including Lagardère, Nortel, Eaton Electrical. He has an international and multi-discipline experience in finance and a dynamic practice, both derived from audit, consulting and operational management.
(2) Serge Gracia, Engineer ENSI-ETA(1985)- « DESS » in Management of export companies (1991), 48 years old, with more than 23 years in industial or renewable energy companies. He brings an experience in internation and industrial project management, notably the commissioning of large capacity wind farms, as well as une large experience in operational management of multi-discipline teams.
As of June 30, 2008, the Group had 661 MW in operation and 474 MW of projects to be commissioned by the end of 2009, not including future acquisitions and organic development through THEOLIA Emerging Markets.
The Group confirms its target of 2,000 MW in operation by the end of 2011, mainly held for own account.
The Group had announced an EBITDA target between € 55 and 65 million for 2008, on the basis of selling 170 MW to third parties during the year. This target would have been maintained if the activity of selling wind farms to third parties were continued.
Taking into account the announced strengthening of its own account activity, 2008 will be a year of transition:
keeping a maximum number of wind farms for own account,
connecting wind farms in Germany to the grid in 2008 and 2009 to optimize the benefits of the recent tariff changes,
a minimum EBITDA of €20 million.
THEOLIA focuses on a unique model of development that offers the strongest growth potential and profitability over the mid and long term.
The Group's half year financial report is available on the company's website : www.theolia.com.
Next financial publication:
November 14, 2008 : 3rd quarter 2008 sales.
THEOLIA is a European leader in producing electricity from renewable energy. THEOLIA is present in France, Germany, Spain, Greece, Italy and in certain emerging countries through its subsidiary THEOLIA Emerging Markets: India, South America, certain Eastern European countries and Morocco.
For more information
Edward F. McDonnell
Director of Investor
Tel: +33 (0)4 42 906 594
Director of Communications
Tel: +33 (0)4 42 904 904
Director of Financial Communications
Tel: +33 (0)4 42 906 596
French société anonyme (public limited liability company with board of directors)
with share capital of €38,900,079
Registered office: 75 rue Denis Papin BP 80199 - 13795 Aix-en-Provence cedex 3 - France
Tel: +33 (0)4 42 904 904 - Fax: +33 (0)4 42 904 905 - www.theolia.comInformation réglementée
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