Interim Report 2019

Rabbalshede Kraft AB (publ) Interim Report January to September 2019

Press releases and financial reports can be subscribed to and downloaded on Rabbalshede Kraft’s website www.rabbalshedekraft.se. RABBALSHEDE KRAFT INTERIM REPORT JULY-SEPTEMBER 2019

The major trend in the coming years, globally and in , is that solar and wind power will be expanded at such a rate that it will dominate the build-out and define the entire electricity generation during the coming decades. This CEO’S results in increased demands from and for consumers, electricity networks, producers and developers. Technology development is moving fast, as higher, larger and more efficient STATEMENT wind turbines make it possible to establish wind farms with profitability at ever lower electricity prices. Solar cells are becoming cheaper, more efficient and more flexible. By using the latest technology and thinking in an innovative and sustainable way, Rabbalshede Kraft ensures the work of securing long-term growth, in an otherwise politically windy position and an electricity market with TECHNOLOGY DEVELOPMENT falling electricity certificate prices. IS MOVING FAST, AS HIGHER, The wind resource during the first three quarters of the year remained at a normal level as a whole, however we have seen a greater variation of individual LARGER AND MORE EFFICIENT months relative to average winds compared to recent years. Production has been 2.6% above the expected level during the period and we have continued to WIND TURBINES MAKE IT maintain a very high efficiency in the parks, with an energy-based availability of POSSIBLE TO ESTABLISH WIND over 98.3%. FARMS WITH PROFITABILITY AT EVENTS DURING THE THIRD QUARTER EVER LOWER ELECTRICITY PRICES. At an Extraordinary General Meeting on August 20, the Company resolved to issue new shares and the issuance was directed to all current shareholders. The signing period has ended and the new shares were oversubscribed, thus Rabbalshede Kraft will be allocated SEK 197.7 million. The proceeds will be used to finance the expansion of ongoing wind power projects. The technical and financial management business area continues to focus on increased sales of management services. New contracts have been signed and we note that our opportunities for cooperation in this area are constantly increasing. Renegotiation of the service contract for the Dingle-Skogen (32 MW) wind park was signed in October. During the period, the development department continued to develop our project portfolio, which today contains projects totalling an installed capacity of some 250 MW of projects in various phases near final consent. In line with the company’s business strategy, there has been continued focus on ongoing projects to allow investment decisions to mature at a steady pace during the coming years. The Final Investment Decision for Sköllunga/Högen in municipality and municipality, in Västra Götaland County, comprising 6 turbines totaling 21 MW was taken in August. We also started construction work for the projects at Sköllunga/Högen during the quarter and the work is planned to be completed by March 2021. Construction work on project Gärdshyttan has been Peter Wesslau, CEO completed and the installation of turbines will begin in October/November. Work has begun on evaluating different solar panel systems. Solar panels have great development potential and by innovatively using existing infrastructure, we see great opportunities for Rabbalshede Kraft to expand within solar energy. The first solar cells were ordered in October. Through a sponsorship with Women’s Match, Rabbalshede Kraft has taken a step towards greater brand recognition. The marketing activity on site in Lysekil in August during the Women’s Match Championship created a good foundation for social media and a local brand awareness in the region. EVENTS AFTER THE THIRD QUARTER • We welcome Anders Olsson as CFO at the end of October. • The share issue is completed and registered with the Swedish Companies Registration Office. • Rabbalshede Kraft has signed a Letter of Intent for ten modular wooden towers from Modvion for an upcoming wind farm in Fägremo, Töreboda municipality.

Peter Wesslau CEO

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QUARTER 3, 2019

Production during Q3 just above budget. The average wind for the period was 5.9 m/s, PRODUCTION DURING which is close to normal wind. Availability 98.3%. THE PERIOD

Service agreements for Vindpark Dingleskogen have been negotiated and a new service SERVICE OPERATIONS supplier will take over during November.

The Gärdshyttan wind farm project (5 Turbines) in total 20 MW is under construction and BUSINESS DEVELOPMENT roads and surfaces have been completed. Towers and turbines will begin to be erected during Q4 2019. Investment decisions have been made for the Sköllunga and Högen Wind power Projects (3 +3 turbines) in total 21 MW. Roads and production sites are starting to take shape.

There is continued focus and work on ongoing projects to make investment decisions aligned with the Company’s strategy. We are also continuously working to find good opportunities ot be able to acquire existing turbines to increase the number of turbines under our own control.

During the spring, the Company entered into a collaboration with Modvion in a Development Project in which Rabbalshede Kraft will contribute with experience of construction and logistics issues during turbine erection. Modvion is a Swedish Engineering and Industrial Design company developing modular towers made of laminated wood. The work will be started as soon as a decision has been made by the energy authority.

PRODUCTION JANUARY-SEPTEMBER 2019 (GWH)

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en RABBALSHEDE KRAFT INTERIM REPORT JULY-SEPTEMBER 2019

FINANCIAL OVERVIEW

Consolidated income statement

Q3 Q3 Q1-Q3 Q1-Q3 In summary, SEK thousand 2019 2018 2019 2018

OPERATING INCOME

Net sales 52,296 61,506 180,844 172,714 Capitalised work for own account 1,451 1,188 4,476 4,027 Other operating income 3,928 3,719 16,442 15,065 Total operating income 57,675 66,413 201,763 191,806

OPERATING EXPENSES Employee benefit expenses -6,473 -6,442 -25,404 -19,620 Other operating expenses -22,372 -22,831 -77,628 -80,056 Total operating expenses -28,845 -29,273 -103,032 -99,676 Operating profit -761 7,994 9,931 5,679 Profit before tax -8,440 -2,264 -16,592 -25,733

Profit/loss for the period -8,440 -2,264 -16,592 -25,733

Consolidated balance sheet

30 September 30 September 31 December In summary, SEK thousand 2019 2018 2018

ASSETS Non-current assets 1,962,313 2,022,776 1,972,747 Current assets 475,879 228,048 336,301 Total assets 2,438,192 2,250,824 2,309,048

EQUITY 1,499,425 1,274,915 1,320,669 LIABILITIES Non-current liabilities 802,678 843,281 832,972 Current liabilities 136,089 132,628 155,407 Total liabilities 938,767 975,909 988,379

Total equity and liabilities 2,438,192 2,250,824 2,309,048

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Key ratios

Q3 Q3 Q1-Q3 Q1-Q3 FULL YEAR

SEK thousand 2019 2018 2019 2018 2018

Electricity production MWh* 107,834 113,149 379,992 325,951 465,044 Net sales (electricity sales) 52,296 61,506 180,844 172,714 243,411 Total operating income 56,675 66,413 201,763 191,806 331,236 Operating profit -761 7,994 9,931 5,679 75,250 Profit before tax -8,440 -2,264 -16,592 -25,733 32,882

Profit/loss for the period -8,440 -2,264 -16,592 -25,733 19,503

Cash flow from operating activities 20,472 5,757 72,613 37,244 80,975

Average number of shares 160,109 160,109 160,109 160,109 160,109

Earnings per share -0.10 -0.01 -0.05 -0.16 0.12

30 September 30 September 31 December SEK thousand 2019 2018 2018

Debt/equity ratio ** 0.56 0.70 0.67

Equity 1,499,425 1,274,915 1,320,669 Balance sheet total 2,438,192 2,250,824 2,309,048

* Excluding co-owned farms ** Debt/equity ratio is calculated as interest-bearing liabilities/equity.

Investments, including advance payments made, were SEK 79 (52) million during the period INVESTMENTS January to September. Investments include ongoing project planning and acquisitions of operating turbines.

Total bank loans as at 30 September 2019 were SEK 602 (604) million. During this period, the FINANCING Group’s average loan rate for bank loans was 5.55 (4.51) %. The equity/assets ratio was 61 (57) % as at 30 September 2019.

Rabbalshede Kraft applies hedge accounting of financial instruments in accordance with Chapter HEDGING INSTRUMENTS 12 (Financial instruments measured in accordance with Chapter 4, Sections 14A-14e, of the Swedish Annual Accounts Act) of BFNAR 2012:1. This means in part that changes in value of various derivatives acquired to hedge cash flow risks are recognised in equity. The market value of outstanding interest rate contracts as at 30 September 2019 was SEK -23 (-24) million. The interest rate is hedged on 70% of the company’s outstanding loans.

Rabbalshede Kraft is exposed to risks in its operations. The company depends on both the RISKS AND UNCERTAINTIES general economic and political situation in the world at large. For a more detailed description of risks, please see the directors’ report in the annual report for the 2018 financial year.

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Consolidated cash flow

Q3 Q3 Q1-Q3 Q1-Q3 In summary, SEK thousand 2019 2018 2019 2018

Cash flow from changes in working capital Cash flow from operations before changes to working capital 20,472 26,824 72,613 60,541 Cash flow from changes in working capital -25,078 -21,067 -21,994 -23,297 Cash flow from operating activities -4,606 5,757 50,619 37,244

Investing activities Acquisition of intangible assets incl. advance payments -358 - -1,640 - Acquisition of property, plant and equipment incl. advance payments -35,591 -5,181 -76,828 -52,159 Sale of property, plant and equipment - - 141,945 - Cash flow from investing activities -39,949 -5,181 63,477 -52,159

Financing activities Ongoing new share issue 196,671 - 196,671 - Issue costs -482 - -482 - Change in shareholder loans -43,510 74,395 -57,623 81,709 Loans raised 53,901 - 53,901 27,704 Amortisation of loans -369 -200 -39,519 -34,864 Change in blocked funds -3,885 - -6 885 - Cash flow from financing activities 202,326 74,195 146,063 74,549

Cash flow for the period 157,771 74,195 260,159 59,634 Cash and cash equivalents at beginning of period 163,680 12,650 61,292 27,787 Cash and cash equivalents at end of period 321,451 87,421 321,451 87,421 Blocked funds 47,730 40,272 47,760 40,272 Total cash and cash equivalents and blocked funds 369,181 127,976 369,211 127,976

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Year-end report for 2019, 27 February, 2020 FINANCIAL Interim Report January-March, 19 May, 2020 Interim Report April-June, 19 August, 2020 CALENDAR Interim Report July-September, 19 November, 2020

Further information PRESS RELEASES AND FINANCIAL For further information, contact: REPORTS CAN BE SUBSCRIBED TO Fredrik Samuelsson AND DOWNLOADED ON Tel. +46 (0) 525-197 00 RABBALSHEDE KRAFT’S WEBSITE AT [email protected] WWW.RABBALSHEDEKRAFT.SE

Audit This report has not been audited by the company’s auditors.

SUBMISSION OF THE REPORT

RABBALSHEDE, 21 NOVEMBER 2019

Stine Rolstad Brenna Chair of the Board of Directors

Annika Ahl Åkesson Jeffrey Mouland Frederic de Stexhe Nicolò Napolitano Director Director Director Director

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Peter Wesslau CEO

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