Unaudited Results for the Financial Year Ended 31 March 2020

Robust financial performance, with record profits achieved

Strong balance sheet and market dynamics underpin confidence in medium-term outlook

Solarcentury, the global integrated solar power company with operations across Europe, Latin America and Africa, today announces its unaudited financial results for the year ended 31 March 2020.

Highlights

• Another strong year of trading performance, delivering record profits:
  • Revenues increased by 87% to £187m (2019: £100m)
  • Record EBITDA achieved, with underlying EBITDA growth to be in excess of 50% year on year (2019: £14m)
  • The only renewables company named in the Sunday Times’ 2020 Profit Track, which recognises the UK’s fastest growing private companies
• Continued growth of utility-scale solar development business, with a 6GWp pipeline in development
• Construction underway on three projects totalling 610MWp, following completion of development phase:
  • 300MWp Talayuela solar project in Cáceres, Spain – in partnership with solar and wind operator Encavis AG; reached financial close in November 2019 having signed an innovative PPA which hedges the off-take price for approximately 75% of the volume of production
  • 200MWp Cabrera solar project in Alcalá de Guadaira, Spain – following the sale of majority stake in April 2019 to Encavis AG; Solarcentury continues to part own, construct, operate and manage the plant
  • 110MWp Vlagtwedde solar farm in Westerwolde, Netherlands – agreement signed with specialist asset manager Impax in September 2019 to commence construction and maintenance
• Expansion of operations into Italy in May 2019 and a return to development in the UK with the announcement of plans for Elwy Solar in Wales
• Residential solar business acquired by SVEA Solar in March 2020.

Current trading and outlook

• COVID-19
  • Health and wellbeing of workforce prioritised in face of pandemic, with construction continuing while ensuring social distancing and high levels of hygiene
  • The Group’s integrated business model, with five separate revenue streams, provides a hedge against any short-term slowdown in development activity caused by lockdowns in certain territories
  • Short-term demand shock across power sector expected to accelerate renewable energy development in the medium term given solar’s competitive pricing
• Strong balance sheet to manage period of uncertainty and continue development activity
  • £40m net cash on balance sheet at year end (2019: £20m)
  • €54.8m banking facility with NatWest and HSBC UK secured in January 2020 to construct Talayuela and Cabrera projects; with both sources of funding guaranteed by UK Export Finance, the UK’s export credit agency, in support of our international expansion.

Commenting on the results, Frans van den Heuvel, Chief Executive of Solarcentury, said:

“The past 12 months have been another landmark year for Solarcentury, in which we have been recognised as one of the UK’s fastest growing private companies. For the second year in a row, we delivered a robust financial performance by continuing to expand our core business of developing, building, owning and operating utility-scale solar internationally.

With a significantly strengthened balance sheet, we are well positioned to navigate the short-term challenges presented by COVID-19, with sufficient liquidity to deliver our existing 6GWp pipeline across Europe, Latin America and Africa.

“We have acted decisively to protect our people since the outbreak of COVID-19 and I would like to thank them personally for their ongoing resolve in these unprecedented circumstances. Their commitment and spirit give me great confidence that we will continue to thrive on the other side of the pandemic, as we fight what remains the biggest crisis facing our generation; climate chaos.”

Financial results

Over the past 12 months, Solarcentury has delivered another record year of growth, with revenues rising 87% to £187m (2019: £100 m) and profits increasing significantly to over £20m; their highest level since the business was founded 22 years ago.

During the year, revenue from international project business doubled to £183m (2019: £91m), driven primarily by significant growth in revenue from the Group’s EPC operations (2020: £141m).

With a strong balance sheet including £40m of cash, Solarcentury continues to be financially robust thanks to its experienced management team and the integrated model that it operates, which allows the Group to benefit from revenue across the entire value chain from development to asset management.

Operational progress

Over recent years, the Group’s strategy has evolved in response to changing local market conditions, such that today it is truly global, focused on developing, building, operating and owning solar and storage projects across Europe, Latin America and Africa. This has enabled Solarcentury to continue to build a leading solar platform of scale, with a substantial 6GWp high quality pipeline across 10 international markets.

The Netherlands

Having completed the development phase in September 2019, Solarcentury signed a construction and maintenance agreement with Impax, the specialist asset manager, for what will become the largest solar project in the Netherlands; the Vlagtwedde solar farm, in Westerwolde. Construction of the 110MWp solar farm is underway and the project is planned to be operational in late 2020, generating an expected annual yield of 104,000 MWh; enough to power approximately 30,000 households.

Spain

In December 2019, the Group secured a new €54.8m banking facility with NatWest and HSBC UK, supported by UK Export Finance, the UK’s export credit agency, to facilitate the construction of two of the largest private subsidy-free solar developments in Spain to date:

Talayuela Solar (Cáceres, Extremadura)

• The 300MWp project reached financial close in November 2019 with lenders Deutsche Bank and the European Investment Bank (EIB)
• This followed the signing of an innovative financial Power Purchase Agreement (PPA) in September 2019, which hedged the off-take price for approximately 75% of the volume of production, ensuring secured and stable income for the first 10 years of operation
• When it is fully operational, this will be one of the largest solar projects in Europe, capable of producing enough energy to power 150,000 homes every year.

Cabrera Solar (Alcalá de Guadaira, Sevilla)

• The 200MWp project comprises four 50MWp plants, which are expected to be completed and connected to the grid during the second half of 2020
• Once completed, this project should produce enough electricity to cover demand from 105,000 households in the region.

Residential (the Netherlands, Belgium and Germany)

On 31 March 2020, the Group announced the sale of its residential business to SVEA Solar, the leading installer of residential solar systems in Sweden, including Solarcentury’s residential teams in the Netherlands, Belgium and Germany. The residential business accounted for less than 10% of Solarcentury’s global revenues in its last financial year and the sale will allow the Group to focus on expanding its core international operations.

Social Impact

Solarcentury is changing the world of energy – environmentally, socially and economically – by helping people and businesses across the globe access and produce solar power. A key element of Solarcentury’s approach is demonstrating how solar energy can contribute to a 100% renewable future without the need for government subsidies, at the same time as creating jobs, improving biodiversity and making a real difference in the fight against climate chaos. Key achievements during the period include:

• Engaging the community for our Budel solar project with an innovative crowd-funding campaign.
• Creating jobs in Talayuela, with the project is expected to deliver direct employment in the region of up to 400 people at its peak.
• Promoting biodiversity on our solar farms, with plans announced for a 100 hectare space to plant 1600 holm oaks at Talayuela Solar.
• Creating ancillary employment and business opportunities with the development of a 24 hectare blueberry farm adjacent to our Vlagtwedde solar farm.
• Giving back by supporting SolarAid’s mission in Africa with a donation of £529,000 in 2019.

People

During the period, the Board was pleased to announce a series of promotions from within the business, to further strengthen its senior management team:

• Barbara Flesche was promoted to Deputy Chief Executive Officer, reporting to Frans van den Heuvel, Chief Executive;
• Evert Vlaswinkel, who joined the Group in 2018, was promoted to Managing Director of EMEA; and
• Enrico Ambrosini was promoted to Global Head of Assets and Origination, after joining the Group in 2019 to lead the development of energy management and power offtake agreements.

Current trading and COVID-19 update

In the midst of the current COVID-19 pandemic, our top priority remains the health, safety and wellbeing of our colleagues, our partners and the communities we serve. We are committed to playing our part in acting responsibly during the current pandemic. We have seen a short-term impact on our day-to-day operations but are pleased and grateful to our staff who have adapted extremely well to the situation, enabling the Group to continue moving in the right direction.

Our operation and maintenance teams are regarded as key workers and therefore remain active in maintaining solar sites across our international portfolio. Despite the ongoing global lockdown, development continues on our global development pipeline, while our teams remain on site constructing more than 600MWp of solar capacity in Spain and the Netherlands.

Further details on the measures we have taken to manage the business through these unprecedented times are provided on the Group website via the following link:  develop.solarcentury-refresh.greenlightdigital.com/covid-19-how-solar-is-adapting ‎

Outlook

While the full impact of COVID-19 on the solar industry is yet to be seen and will depend on how long it takes for development activity to ramp back up to full steam, what we know for certain is that the solar industry is resilient, agile and ambitious. Our business is in good health and we will survive and thrive on the other side of this pandemic, with a strong balance sheet and sufficient liquidity to deliver our existing 6GWp global development pipeline.

We remain confident in the future of the solar industry and our role within it, and as we emerge from this crisis, we continue to be entirely focused on our company’s core mission: to make a meaningful difference in the fight against climate chaos.