Rabbalshede Kraft Annual Report 2017 WE ALWAYS FIND POWER IN THE WIND CONTENTS About Rabbalshede Kraft 3 Vision, business concept, target 3 2017 in brief 4 Performance during the year 5 CEO’s statement 6 Operations in 2017 8 Focus growth and sales 9 History 10 Wind farms under operation and development 12 Four questions to our main sharholders 14 Establishing wind farms 16 The Market 18 Wind Power 18 The electricity market 20 Electricity certificates 23 Rabbalshede Kraft's share 24 Board of Directors 26 Senior executives 27 Administration report and financial statements Multi-year review 30 Administration report 31 Consolidated income statement 36 Consolidated statement of comprehensive income 36 Consolidated balance sheet 37 Consolidated statement of changes in shareholders’ equity 38 Consolidated cash-flow statement 39 Parent Company income statement 40 Parent Company’s statement of comprehensive income 40 Parent Company balance sheet 41 Changes in Parent Company’s shareholders’ equity 43 Parent Company cash-flow statement 44 Notes to the financial statements 45 Auditors’ Report 74 2 ABOUT RABBALSHEDE KRAFT RABBALSHEDE KRAFT ANNUAL REPORT 2017 Rabbalshede Kraft in brief Rabbalshede Kraft makes a difference. ments in addition to the obvious aspect of In the move toward sustainable development, producing electricity. it is important that society increases the per- centage of electricity derived from renewable Rabbalshede Kraft offers investors and energy sources, one such energy source is wind power owners a comprehensive wind. Rabbalshede Kraft is a leading compa- operational management solution. ny in wind power in Sweden. From the com- A professional service organisation, in close pany’s founding in 2005 up until December cooperation with the suppliers of the 2017, Rabbalshede Kraft has invested nearly turbines, contributes to high operational SEK 2.6 billion in wind power. The company’s reliability. What Rabbalshede Kraft offers strength lies in developing and operating is the opportunity to own wind turbines Manages wind farms wind farms. Rabbalshede Kraft ensures without having to build a proprietary orga- with production of sound control of the entire value chain, from nization. This provides investors with long- planning and establishing wind farms to pro- term, secure profitability and a low duction and sales of electricity. operating risk. Rabbalshede Kraft has 1200 GWh of management assignments of nearly 1200 which Production and sales of renewable GWh, of which 750 GWh are proprietarily or electricity from its own wind farms represent jointly owned. Rabbalshede Kraft’s largest source of reve- 750 GWh nue, and is an area that is growing further in The owners of Rabbalshede Kraft include own or co-owned pace with the company’s investments in new the family owned investment firm Manor wind farms. Electricity is sold on the Nord Group, which is the largest shareholder; the Pool open electricity market and through Canadian asset management firm Greystone power purchase agreements. Investments Infrastructure; the property company Ernst are made in the company’s project portfolio Rosén; the Chalmers University of Technolo- to deliver profitable turnkey wind-power proj- gy Foundation; Nordea Investment Funds ects for sale to partners or for commissioning and approximately 1,100 additional compa- by the company itself. nies and private shareholders. Rabbalshede Kraft offers asset management Rabbalshede Kraft is certified in accordance services in operational management. Operat- with ISO 9001 and ISO 14001. ing wind farms entails a long list of commit- VISION, BUSINESS CONCEPT AND TARGET Vision Target To be the Nordic region’s leading independent Rabbalshede Kraft will own and operate its own plat- developer and operator of renewable energy by form of wind farms. 2025. • Develop the platform to grow 2-3 times Business concept To plan and establish land-based wind farms, both for Rabbalshede Kraft will commission new wind farms sales of electricity and for sales of entire wind farms or indi- with the best technology and production in the market vidual wind turbines. • We will commission new farms every year To offer asset management services, as well as to procure • Our service operations will grow 10 times and to manage the construction of wind farms. • We must increase the value in all the To evaluate other opportunities in renewable energy in the farms we manage by optimizing production Nordic region. and being the best choice for cost per turbine 3 PERFORMANCE DURING THE YEAR RABBALSHEDE KRAFT ANNUAL REPORT 2017 2017 IN BRIEF First quarter On January 31, 2017, Rabbalshede Kraft held an extraordinary general meet- ing where, among other items, a decision was taken on a direct issue of shares to Sweden Holdco RK AB (“Greystone”). The placement of SEK 283 M was carried out on February 1, 2017. Following the investment, Greystone is, after Manor Group, the company’s second largest shareholder. After many years as an employee and as CEO of Rabbalshede Kraft AB, the Board announced in February, following a joint decision, that Thomas Linnard had chosen to leave his position. Second quarter Mads Miltersen took over as the company’s new CEO on June 1. Mads joined the company from EnergiMidt in Den- mark’s Jutland region, where he held several positions includ- ing CFO and CEO. Prior to EnergiMidt, Mads served as Finance Manager at Ericsson Diax and as an auditor at BDO. During the quarter Vindpark Åndberg in Härjedalen Munici- pality gained legal force for 57 wind turbines. Third quarter In August, the company entered into a three-year manage- ment agreement with Vindpark Vänern. Under the agreement, Rabbalshede is responsible for the management, monitoring, service and maintenance for seven of Vindpark Vänerns tur- bines. The agreement is for three years, with an option to extend for an additional two years. On August 31, Rabbalshede Kraft finalized a refinancing of the company together with Swedbank, this means that the company now has a new loan structure in place that creates a stable base for the company for the foreseeable future. As a result of the refinancing, the company has concluded a peri- od of focus on internal consolidation, and is now ready for growth. Fourth quarter On October 1, Vindpark Lyrestad was inaugurated. Nearly 400 visitors came to meet with Rabbalshede Kraft and Ardian and to listen to Lise Nordin, member of the Riksdag and energy policy spokesperson for the Green Party, and Lars Fröding, Director of External Affairs for Västra Götaland County Administrative Board, who spoke during the inaugu- ration. On December 22, construction and trial operation were com- pleted and Lyrestad Vind AB took over legal responsibility. 4 PERFORMANCE DURING THE YEAR RABBALSHEDE KRAFT ANNUAL REPORT 2017 PERFORMANCE DURING THE YEAR 510 234 133 59 GWh MSEK MSEK EBITDA % Production in net sales equity/assets 2017 ratio Key figures Fully owned wind farms excluding Lyrestad Year 2017 Year 2016 Year 2015 Year 2014 Year 2013 Installed capacity at the close of the period, MW 190 190 190 190 89 Electricity production, MWh 509,535 500,628 576,412 314,665 189,431 Net sales, KSEK 234,163 235,628 264,204 146,161 104,694 EBITDA, KSEK 132,618 143,299 169,655 81,270 77,821 EBIT, KSEK 3,081 44,263 -110,669 14,325 38,027 Equity/assets ratio, % 59 46 45 37 58 Cash flow for the period, KSEK -16,146 -182,811 105,738 -14,134 46,218 Installerad effekt, MW Installerad effekt, MW 300Installerad effekt, MW 300 300 InstalledInstallerad Capacitym, effekt, MW MW 250 PRODUCTION FOR 2017 300 250 250 200 250 IN GRAPHS 200 200 150 200 The graphs for Production and Installed Capacity show 150 150 100 the development from the start in 2008, when Rab- 150 100 100 50 balshede Kraft’s first wind farm – Hud in Tanum Munici- 100 50 50 - pality – was commissioned, up through 2017 when 50 - - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Vindpark Lyrestad in Mariestad and Törboda Municipality 20082008 20092009 20102010 20112011 20122012 20132013 20142014 20152015 20162016 20172017 - was commissioned. 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Produktion GWh (egen+samägd) Since 2008, the company has installed 93 wind turbines, 700Production,ProduktionProduktion GWh GWh GWh (own (egen+samägd) (egen+samägd) or co-owned) 700700 Produktion GWh (egen+samägd) which are either own or co-owned. The total capacity, 266 600 700 600600 megawatts (MW), is a measure of the capacity of the 500 600 500500 company’s wind turbines. Together, they can produce just 400 500 400400 over 0.75 terawatt hour (TWh) electricity over a normal 300 400 300300 wind year. 200 300 200200 100 200 100100 In 2017, Rabbalshede Kraft’s own and co-owned wind 0 100 farms produced 571.7 GWh. This is equivalent to the total 00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20082008 20092009 20102010 20112011 20122012 20132013 20142014 20152015 20162016 20172017 0 electricity consumption for nearly 30,000 normal-sized 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 houses, with electric heating, per year. ProduktionsbaseradProduction based Accessibility tillgänglighet % % 101%ProduktionsbaseradProduktionsbaserad tillgänglighet tillgänglighet % % Accessibility shows how the company’s wind turbines 101%100%101%Produktionsbaserad tillgänglighet % 100%100%99%101% produce when conditions for production exist. 99%98%99%100% 98%97%98%99% 97%96%97%98% 96%95%96%97% 95%94%95%96% 94%93%94%95% 93%92%93%94% 92%92%93% 92% 5 CEO’S STATEMENT RABBALSHEDE KRAFT ANNUAL REPORT 2017 CEO’s statement 2017 has been a year of transition. It began with turmoil and falling cer- tificate prices, and finished with a strong faith in the future. During the autumn, we improved our strategy with an exciting, ambitious plan for growth. We have also strengthened the company with several new recruitments, including expansions to the management group with Wenche Gullaksen and Martin Pettersen, responsible for sales and busi- ness development, respectively.