Value out of Volatility
Capital Markets Day, 21 September 2022
Disclaimer
Agenda
09:00 Welcome
09:05 Value out of Volatility
09:25 Insight: Stay ahead of the curve, now and in the future
09:40 Power optimisation & trading: Supporting energy producers in increasingly volatile markets
10:10 Power Grid: Helping utilities through the green transition
09:55 Spark: Matchmaker in the neighborhood energy system
10:25 Break
10:55 ESG: Technology for a sustainable tomorrow
11:10 Finance: SaaS transformation laying foundation for margin expansion
11:30 Summary and Q&A
Value out of Volatility
Trond Straume, CEO
Volue in brief
One of the largest software companies in Norway
Working across three major industry segments
Energy
Power Grid
Infrastructure
Large and growing markets for Volue's software
Energy
Power Grid
Infrastructure
Supply = Demand
Increased volatility creating business opportunities across the group
Climate change and decarbonisation
Major changes and business opportunities
1: Wind and solar energy
Opportunities
2: Balancing the grid and security of supply
Trends
Leads to
Opportunities
Main growth elements
Organic growth of existing portfolio
New software and services
Enter new market segments
Enter new geographies
01
02
04
05
Add to growth with M&A
SaaS transformation laying foundation for margin expansion
Ongoing transition to recurring revenues and Software-as-a-Service
Highly sticky customer base: Churn below 2%
Recurring revenue SaaS revenue
2025 ambitions maintained
M&A:
Highly fragmented market. Volue aims to pursue consolidation. Europe primary focus.
2030 Strategy to quadruple addressable market
Concentrating efforts on Energy and Power Grid
Energy and Power Grid
- Expand in Europe, APAC and eventually North America
- New positions: Flex, reserve markets, renewables
Industrial IoT
- Focus on profitability and organic growth in Norway and Sweden, with expansion across the Nordic region
- Growth opportunities across industry sectors
Infrastructure
- Focus on profitability and organic growth
- New offerings for upsell and new customers
- Expansion to key selected markets
Key messages
Volue supports the green transition
Increased volatility equals demand for our services
Maintains the 2025 ambitions
#1 in Europe with global reach towards 2030
Insight Stay ahead of the curve, now and in the future
Anamaria Toebe, Head of Short-Term Analysis
Data and analysis to make profitable decisions in the complex energy markets
Gas price rally
Historical and future power prices
To reduce risk and increase profit, Volue provides:
A pan European service providing
up-to-date price and fundamental
data forecasts for all time |
Balancing market |
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| horizons. |
Intraday market |
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Unrivaled analysis and research
provided by in-house market
experts delivered through an
intuitive web-interface. |
Day ahead market |
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Easy-access data through best-in
class data API and offers all |
Derivatives market |
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relevant curves to support and
facilitate all daily operations. |
Investment |
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- Intraday market
- Day ahead market
- Derivatives market
- Investment
Platform APIs accessed Used by more than Over
95% recurring revenues
Products
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Short term |
Medium term |
Long term |
| Offerings |
Imbalance |
Forward |
LTP Reports |
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Intraday |
Fuel scenarios |
PPA and capture costs |
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Spot |
Technical analysis |
Fuels and weather
scenarios |
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Fundamentals, Hydrology, UMMs |
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Fuels: Coal, Gas, CO2 |
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| Areas |
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Europe, Japan* |
* Short-Term Products since 2022 |
Over 25 years market experience
Data access
Various access tools:
- Insight platform
- API with built-in visualisation tool
- Python
- Excel Plug-In
Japan market expansion
Japan market
Energy policy and market transition in Japan
Japan energy mix 2021 vs. 2030
Volue offerings for Japan
Current offerings
Upcoming
Key messages
Global presence readiness
Easy access for new and existing customers
Quality recognition from the market
Flexible and scalable solution
Power optimisation and trading Supporting energy producers in increasingly volatile markets
Camilla Thorrud Larsen, SVP Energy Solutions
Helping customers monetize power production in
increasingly volatile and complex markets
Energy transition challenges Europe
Generation capacity (GW) in Europe from 2020 to 2050
27 564 Power plants
Reduce risk and increase profit
Reduce risk and increase profit
Optimise use of assets to maximise profits
- Detailed mathematical representation of the physical system
- Account for physical and regulatory restrictions
- Large and complex problem with coupling in time and space
- Multi-asset coordinated optimisation
Reduce risk and increase profit
Select and use the markets which maximise profits
- Bidding support and market access
- Compliance with applicable market rules and regulations
- Optimal trading strategies
- Multi-market considerations
The world's second largest power producer
Enel Italy relies on Volue's solution to optimize their production planning, bidding and trading processes
- Multi-asset portfolio
- Wind, solar, geothermal, hydroelectric, biomass and thermoelectric
- More than 550 power plants in total
90 GW Installed capacity 232 TWh Annual generation
Key messages
Changing energy mix
Volatile energy markets
Reduce risk and increase profit
Strong market position
Spark:
Matchmaker in the Neighbourhood Energy System
Kjetil Storset, Spark Lead
Spark serving Neighbourhood Energy Systems
Market opportunity
REGION
Market instruments is used to coordinate demand and supply 24/7
NEIGHBOURHOOD
No instruments to coordinate demand and supply on a day-to-day basis
BUILDING
No grid-aware charging
Market position
Spark services
Energy resource Local grid operators Regional power markets
Smart charging
Example: Public parking
Today
Example: Local grid operators
Today No instruments to coordinate demand and supply on a day to day basis
Grid-aware charging
Roadmap
Smart charging for EV owners/operators for local grid operators
Key messages
Massive rollout of solar panels on rooftops and electric vehicles
Stand alone, both solar panels and high penetration of EVs will be highly problematic for the local power system
Spark will serve as a matchmaker, balancing the Neighbourhood Energy System
Highly scalable business model
Power Grid Helping utilities through the green transition
Stein P. Agersborg, SVP
Power Grid serving the distribution utilities
Helping grid operators focus and deliver on their main objectives
Security of supply
Cost efficiency
HSE
Optimise decisions
Our history started with a digital twin…
…and we grew our offering from there
Nordic market numbers
Norway 80% customer share
Sweden 10% customer share
Denmark 90% customer share
Home market in transition, in line with European needs
NOK 11.4bn ARR
Addressable market in Europe
Example of problem we solve: European grid operators' pains
NOK 1bn ARR
Addressable market Europe
The solution A complete SaaS solution for customer registration of new or changed grid connections
| Grid connection |
Request for |
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| Electric car charger |
Electric car charger |
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| Residential production |
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| Grid connection change |
Choose your installation |
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Berger Str. 81, 72360 Düsseldorf |
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| New grid connection |
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| Remove grid connection |
Choose desired capacity
MOST HYBRID CARS AND OLDER ELECTRICAL CARS |
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| Temporary power |
$1 \times 16A - 3,7 kW$
No grid changes |
0 EUR |
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$1 \times 20$ A - 4,6 kW
O
No grid changes |
0 EUR |
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MOST NEWER CARS |
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1 x 32 A - 7,4 kW
C
Main fuse required |
500 EUR |
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3 x 16 A 400 V - 11 kW
◠
Main fuse and connection cable required |
1.600 EUR |
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3 x 32 A 400 V - 22 kW
∩
Main fuse and connection cable required |
3,000 EUR |
| My requests |
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Key messages
Market with distinct characteristics
Opportunities in changing market
Growth from solid Nordic base
Delivery model changing
Short break
The presentation will resume at 10:40
Infrastructure Build and operate the backbone of society
Frode Solem, EVP
Global trends and challenges
Climate change Ageing infrastructure and urbanisation
Digitalisation and standardisation
Nordic position
- 1 200 customers
- More than 15 000 SaaS users
- Shift towards SaaS and ARR, including new business models
LAST 12 MONTHS
Infrastructure
Customers and value proposition
Heavy Construction
Water & Community
•
Stavanger City
Digital work processes through Volue's software to document and manage water infrastructure
Water and wastewater distribution network
Oslo City
Digital work processes through Volue's software for construction of water infrastructure
Construction of new main water supply
Stockholm City
Urbanisation requires investment in infrastructure
Construction of new metro line in Stockholm
Twin Peaks wind farm
Supporting the green transition
Construction of wind farm in Sollefteå community in Sweden
Key messages
Software for a sustainable tomorrow Volue supports the operation of water and wastewater networks to take care of scarce resources and build the infrastructure of the future.
Growing market opportunities
Ageing infrastructure needs modernisation, digitalisation is increasing due to market trends and regulations, and a shift to Software-as-a-Service fits with Volue's strategy.
Nordic #1
Based on leading position in Norway, Volue aims to be number one in the large and growing Nordic market for Construction and Water & Community software.
ESG Technology for a sustainable tomorrow
Ingeborg Gjærum, COO
Our vision:
To develop technology for a sustainable tomorrow
Our sustainability approach: Four focus areas to realise our mission
Trustworthy explorers working together for a sustainable tomorrow
- 750 dedicated explorers
- Combining domain insight with state-of-the-art technology competence
- Growing share outside the Nordics
Environmental challenges = Opportunities
The EU taxonomy brings focus on environmental value created
Our reporting journey
Next steps for our focus areas
Environment
Secure products and operations
•
Ethical business conduct
•
Key messages
Environmental challenges = opportunities
The green transition as focal point for investments
It is people who will make it happen
Our customers are critical to society
Finance SaaS transformation laying foundation for margin expansion
Arnstein Kjesbu, CFO
Financial highlights
Growth in all segments, with Energy in pole position
Operating revenues
- Energy segment has been main growth driver
- Energy transition
- Expanding European footprint
- Cross sales and synergies across group
- Power Grid has been focused on Nordic home market, but with investments laying foundation for European growth
- Infrastructure has focused on SaaS transformation, and SaaS revenues have grown significantly
- Industrial IoT sub-segment included in Energy
SaaS and recurring revenue growing across all segments
- Growth in recurring from upselling and new logos
- Shift in business models gives strong SaaS growth in all segments
- Energy segment with strongest growth due to more cross-selling and European expansions
- Power Grid segment with lower growth rates due to re-positioning in the Nordic and laying foundation for growth outside Nordics
- Strong uplift in SaaS revenues for Infrastructure
Energy segment
Growth
Power Grid
Growth
Infrastructure
Growth
Path to 2025 margin ambition
% Adjusted EBITDA Path
M&A Strategy
Strategy and priorities
Opportunities
Disciplined capital allocation • Solid cash flow from operations
01
Investments in future growth
Capital allocation towards future growth, with expected increase in capex level from 10% of revenue towards 12-13%
Cash for M&A transactions
Balance sheet
Committed to a prudent financial policy and strong balance sheet
- Currently no interest-bearing debt
- NOK 500 million raised at IPO in 2020
- Major acquisitions
- Likron (2020)
- ProCom (2021)
Key messages
Strong growth in favourable market segments
SaaS transformation ongoing
Uptick in margins
M&A strategy
Summary
Trond Straume, CEO
Value out of Volatility = Volue
Increased volatility in energy markets
Exciting market opportunities
Platform for profitable growth
2025 ambition maintained, looking towards 2030
Q&A
Save the date: Volue Q3 11 November 2022