NEOEN SA (EPA:NEOEN) - Neoen reports strong revenue growth in the first half of 2019

Transparency directive : regulatory news

31/07/2019 17:47

MEDIA RELEASE

Paris, July 31, 2019

Neoen reports strong revenue growth in the first half of 2019

* Revenue came to EUR118.1 million excluding the discontinued biomass
  business, representing growth of 30% on a comparable basis(1)
* Neoen has initiated the divestment process for its one and only biomass
  unit, inherited from the acquisition of Poweo EnR in 2012
* The project portfolio now stands at close to 9 GW (+1.3 GW during the first
  half), reflecting Neoen's continued momentum
* Given the ongoing divestment process, Neoen has mechanically adjusted its
  financial targets for 2019 accordingly, aiming for an EBITDA (2) of between
  EUR12 million and EUR27 million and an EBITDA margin(3) close to 80%

Neoen (ISIN: FR0011675362, Ticker: NEOEN), one of the world's leading and
fastest growing independent producers of exclusively renewable energy, is
reporting unaudited half year revenue of EUR118.1 million excluding the
biomass business, which is being held for sale. This represents an increase
of 30% on a comparable basis(1) compared to the first half of 2018.

Neoen's Board of Directors has decided to sell the Commentry cogeneration
unit, inherited from Poweo EnR's project portfolio acquired in 2012, and thus
to withdraw from the biomass business. This strategic decision will sharpen
Neoen's focus on the solar, wind and storage segments. In 2018, the biomass
business accounted for 9.1% of the Group's total revenue, and its EBITDA
margin stood at 34%.(4)

Xavier Barbaro, Neoen's Chairman and Chief Executive Officer, commented:
"With a very strong increase in our revenue in the first half of 2019, Neoen
confirms the strength of its growth. We have also continued to strongly expand
and diversify our project portfolio, which underpins our future growth in all
our geographical and business areas. We closed the financing and launched the
construction for the Hedet wind farm in Finland, as well as for the solar
farms of Altiplano 200 in Argentina and El Llano in Mexico. In addition, we
commissioned the Bangweulu solar farm in Zambia, the Corbas photovoltaic
shades facility in France and, during July 2019, the Numurkah solar farm in
Australia. Lastly, our decision to divest the biomass business shows our
resolve to focus on our core business: solar, wind and storage."

(1) Given the divestment in progress of the biomass business, the Group is
    presenting a restated H1 2018 revenue figure excluding the contribution
    from this business, alongside the reported revenue figure
(2) The EBITDA reported by the Group is based on operating profit restated
    for depreciation, amortization and additions to provisions
for operating items. It does not include the discontinued operations.
(3) Ratio of EBITDA to revenue
(4) Income and expenses related to the Biomass business are now shown under
    net income from discontinued operations in the Group's financial
    statements

Operational highlights                  H1 2019   H1 2018     Chg.    FY 2018

                                                 restated            reported
                                        (1) (2)   (1) (2)               (1)

Capacity in operation (MW)               1,579     1,477    +102       1,492
Capacity in operation or under
construction (MW)                        2,839     2,241    +598       2,256

(1) Gross capacity including stakes in projects in which Neoen is minority
shareholder: Cestas (228 MWp) and Seixal (8.8 MWp),
(2) Capacity excluding the discontinued biomass business

                                   H1 2019   H1 2018     Chg.    FY 2018
                                            restated            reported
                                      (3)      (3)

Electricity generated (GWh)         1,330       932      +43%     980

(3) Electricity generation excluding the discontinued biomass business

Neoen has again reported an upbeat level of growth owing principally to the
contribution during the first half of assets commissioned during FY 2018 and,
to a lesser extent, of new facilities commissioned in the first half of 2019.
At June 30, 2019, Neoen had 1,579 MW capacity in operation, representing an
increase of 102 MW relative to the end of December 2018. This rise reflects
the
commissioning of the Bangweulu solar farm in Zambia, the Corbas photovoltaic
shades facility, the Azur Est solar farm and the Auxois Sud II wind farm in
France.

Compared to the first half of 2018, electricity production grew by 43% to
1,330 GWh, with the Australia and Europe-Africa regions leading the increase.
Average availability rates in excess of 99% for both solar and wind energy
(compared to 97.5% and 96.1% in the first half of 2018 respectively)
illustrate Neoen's ability to optimize use of its production assets and
demonstrate Neoen's industrial excellence. Solar and wind energy load factors
stood at close to 18% and 34% respectively (vs. 16% and 33% respectively in
the first half of 2018).
The key contributors were healthy irradiation levels in Europe, especially
during the first quarter of 2019, and the improved uptime of wind energy
assets, offsetting the impact of weaker wind resources.

First-half 2019 revenue

                                    H1 2019   H1 2018  % chg.   FY 2018
                                            restated            reported
                                      (4)      (4)

Revenue (EUR million)

Solar                                54.9       30.1    +82%      30.1
Wind                                 52.7       52.2     +1%      52.2
Biomass                               -          -       n/a      10.8
Storage                               8.4        8.1     +4%       8.1
Development and investment           2.20        0.6     n/a       0.6
Consolidated revenue                118.1       90.9     +30    %101.8
o/w contracted revenue              100.1       81.5     +23     %92.3
o/w merchant revenue                 14.3        6.9    +106      %6.9
o/w other revenue (6)                 3.8        2.5     +51      %2,5

(4) Revenue excluding the discontinued biomass business
(5) Unaudited financial data
(6) Other revenue chiefly comprises the development business and services to
third parties

In the first half of the year, the Group's revenue growth reached 30% on a
comparable basis. It was largely driven by the very strong increase in solar
energy sales (up 82% compared to the first half of 2018). The large number of
new facilities commissioned in FY 2018, particularly in Australia where the
Dubbo, Parkes, Griffith and Coleambally projects all entered service, was a
crucial factor. The solar segment became the leading contributor to Neoen's
consolidated revenue (46% vs. 33% in the first half of 2018).

The wind energy segment contributed 45% of revenue (compared to 57% in the
first half of 2018). The contribution from facilities commissioned in France
since January 1, 2018 (Chassepain, Pays Chaumontais, Champs d'Amour, Auxois
Sud) was partially offset by a decrease, as the Group had anticipated, in the
weighted average price earned by certain wind energy assets in Australia.
This is essentially due to the transition from early generation revenues
(short-term energy sales prior to the entry into force of a long-term contract)
to PPAs (Power Purchase Agreements), which, by definition, offer a more
competitive tariff. That confirms the Group's ability to develop and operate
intrinsically competitive assets (i.e., "at grid parity") and to deliver the
benefits to its long-term customers, while harnessing additional revenue
during these assets' first few months in operation as and when opportunities
arise.

Lastly, the storage segment posted revenue of close to EUR8.4 million. This
represents a small increase of 4% which was powered by still favorable
conditions for the sale of network services (FCAS) as well as for arbitrage
activities. The slower pace of growth compared to the 21% increase recorded
during the first quarter of 2019 (vs. Q1 2018) was primarily attributable to
the high base effect related to specific market conditions observed in the
second quarter of 2018 in Australia, which were highly propitious for the
sale of network services.

Merchant revenue during the first half of 2019 accounted for 12% of
consolidated revenue.

Contributions from Neoen's regional units varied only very slightly, with
Australia and Europe-Africa contributing 52% and 41% respectively of its
revenue (vs. 53% and 38% respectively in the first half of 2018). The
relative share of the Americas region declined slightly, contributing 7% of
the Group's revenue compared to 9% in the first half of 2018, pending the
commissioning of new farms being currently built in this region.

Currency fluctuations had a non-material impact on first-half revenue.

First-half 2019 highlights

- Rapid portfolio expansion: Neoen is actively pushing ahead with its
  development. At June 30, 2019, the project portfolio stood at close to 9 GW,
  representing an increase of over 1.3 GW during the period.

- Continuing ramp-up in the Americas region: Following the launch of
  construction on its first solar project in Mexico (El Llano 375 MWp) in March
  2019, Neoen also started construction in April of its 208 MWp Altiplano 200
  project in Argentina, which is due to enter service in the first quarter of
  2020. Neoen is building up its presence in the region, with capacity in
  operation or under construction totaling 875 MWp at June 30, 2019, up 723 MWp
  compared to June 30, 2018.

Subsequent event

In July 2019, the Group commissioned the Numurkah solar photovoltaic power
plant in Australia. With this latest 128 MWp project, Neoen is cementing its
status as Australia's number one independent producer of renewable energy.

Portfolio at June 30, 2019

In MW                        June 30, 2019   Dec. 31, 2018    Chg.

Assets in operation (1)          1,579          1,477        +102
Assets under construction (2)    1,260            764        +496
Projects awarded                   397            899        -502
Total MW - secured portfolio     3,236          3,141         +96
Tender-ready projects            1,587          1,203        +384
Advanced development projects    4,163          3,321        +842
Total MW - advanced pipeline     5,750          4,525      +1,226
Total portfolio                  8,987          7,665      +1,321
Early-stage projects            > 4 GW         > 4 GW

(1) Capacity restated for the discontinued biomass business
(2) The Numurkah solar photovoltaic power plant was commissioned in July 2019
and still counted as an "Asset under construction" at June 30, 2019

Growth prospects reiterated

The Group's accomplishments during the first six months of 2019 have
underpinned its growth outlook. Given the ongoing divestment process of the
biomass business, which is now accounted for in the Group's financial
statements as a discontinued operation, and, as such, does not contribute to
revenue or EBITDA, the Group is mechanically adjusting its prospects for FY
2019 accordingly, with a forecasted EBITDA of between EUR12 million and EUR27
million and an EBITDA margin close to 80% at constant exchange rates compared
to FY 2018.

Neoen is also reiterating its objective of capacity of over 5 GW in operation
or under construction by year- end 2021-all of which is to be in operation by
year-end 2022-and EBITDA of approximately EUR400 million in 2021.

Next financial report:
Interim 2019 results, September 25, 2019 after the market close

About Neoen

Neoen is one of the world's leading and fastest growing independent producers
(IPP) of exclusively renewable energy. With a capacity close to 3 GW in
operation or under construction, Neoen is a high-growth company. Neoen is
notably active in France, Australia, Mexico, El Salvador, Argentina, Finland,
Zambia, Jamaica and Portugal. In particular, Neoen operates Europe's most
powerful solar PV farm (300 MWp) in Cestas, France, and the world's largest
lithium-ion power reserve (100 MW/129 MWh storage capacity) in Hornsdale,
Australia. Neoen is targeting more than 5 GW capacity in operation or under
construction by 2021. Neoen (ISIN Code: FR0011675362, ticker: NEOEN) is
listed on the Compartment A of the regulated market of Euronext Paris.

For more information: www.neoen.com

Revenue (EUR million) (2)

Operational highlights       Q1 2019   Q1 2018   % Chg. Q1 2019   Q1 2018
                                     restated          reported reported
                              (1)      (1)

Solar                         26.1    11.8      +122%     26.1     11.8
Wind                          28.9    28.5        +1%     28.9     28.5
Biomass                        -        -         n/a      5.8      5.5
Storage                        4.2     3.5       +21%      4.2      3.5
Development and investment     0.3     0.0        n/a      0.3      0.0
Consolidated revenue          59.4    43.8       +36%     65.2     49.3
o/w contracted revenue        50.3                        56.1
                                                           7.8
o/w merchant revenue           7.8    42.8        n/a              48.3
o/w other revenue (3)          1.3     1.0       +38%      1.3      1.0

Revenue (EUR million) (2)

Operational highlights       Q2 2019   Q2 2018   % Chg.    Q2 2018
                                     restated             reported
                              (1)      (1)

Revenue (EUR million) (2)
Solar                         28.8       18.3          +57%       18.3
Wind                          23.8       23.6           +0%       23.7
Biomass                         -         -             n/a        5.3
Storage                        4.2        4.6           -9%        4.6
Development and investment     2.0        0.6         +262%        0.6

(1) Revenue excluding the discontinued biomass business
(2) Unaudited financial data
(3) Other revenue chiefly comprises the development business and services to
    third parties

Investors
Neoen

communication@neoen.com

Press
OPRG Financial

Isabelle Laurent
+33 (0)1 53 32 61 51
isabelle.laurent@oprgfinancial.fr

Fabrice Baron
+33 (0)1 53 32 61 27
fabrice.baron@oprgfinancial.fr

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