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OX2

Quarterly Report Oct 27, 2022

2953_10-q_2022-10-27_ef1088b0-c449-4db3-8ded-62c2789a3bd6.pdf

Quarterly Report

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Interim report July-September 2022

Net sales LTM 7,831 SEK m $(4, 307)$

Operating margin LTM 10.4% $(5.0)$

Return on capital employed (ROCE) LTM 33.0 $(14.9)$

Project development portfolio 32,132 MW $(17,589)$

Construction portfolio 1.086 MW $(1,006)$

Comparative figures relate to the same period last year

TCM* portfolio 3.603 M $(2,506)$

  • Net sales growth of 82% last twelve months (LTM), driven by higher new project sales as well as net sales from construction portfolio
  • Strong margins from new projects sold as well as good cost control in projects under construction (1,086 MW) resulted in a 10.4% operating margin over the last twelve months (LTM)
  • ROCE of 33.0% during the last twelve months, achieved by high asset turnover from acquired projects as well as strong operating income
  • The project development portfolio grew by 8,268 MW to 32,132 MW in the quarter, mainly through new greenfield offshore projects in Åland and project acquisitions
  • Contracts for technical and commercial management (TCM*) continued to grow in the quarter totaling 3,603 MW

Growing development portfolio and good operational performance

July-September 2022

  • Net sales amounted to SEK 2,311 million (600)
  • Operating income amounted to SEK 30 million (24)
  • · The operating margin amounted to 1.3% (4.1)
  • Profit for the period totaled SEK 44 million (15)
  • Earnings per share before and after dilution amounted to SEK 0.16 (0.06)
  • Cash flow from operating activities amounted to SEK-129 million (143)

January-September 2022

  • · Net sales amounted to SEK 5,401 million (2,553)
  • Operating income amounted to SEK 498 million (97)
  • The operating margin amounted to 9.2% (3.8)
  • Profit for the period totaled SEK 459 million (97) $\ddot{\phantom{1}}$
  • Earnings per share before and after dilution amounted to SEK 1.68 (0.38)
  • Cash flow from operating activities amounted to SEK 765 million (231)

Significant events after the end of the

reporting period

  • · The previously announced divestment of 49% of three Swedish offshore projects to Ingka Investments is pending merger approval and is expected to close in Q4 2022.
  • In October, OX2 signed an agreement to sell a wind farm in Sweden with total installed capacity of 70 MW.

The Group's key performance indicators

Q3 Jan-Sep LTM Full year
2022 2021 2022 2021 Oct-Sep 2021
Net sales, SEK m 2,311 600 5,401 2,553 7,831 4,983
Operating income, SEK m 30 24 498 97 815 414
Operating income adjusted for development costs, SEK m 134 82 733 239 1,128 634
Operating margin, % 1.3% 4.1% 9.2% 3.8% 10.4% 8.3%
Operating margin adjusted for development costs, % 5.8% 13.7% 13.6% 9.4% 14.4% 12.7%
Profit for the period, SEK m 44 15 459 97 695 334
Cash flow from operating activites, SEK m $-129$ 143 765 231 402 $-132$
Investments in the project development portfolio, SEK m 111 34 351 197 577 424
Earnings per share before and after dilution, SEK 0.16 0.06 1.68 0.38 2.60 1.28
Project acquisitions, MW 798 614 2,156 2,871 2,731 3,446
Project development portfolio, MW 32,132 17,589 32,132 17,589 32,132 17,371
Sold projects, MW $\mathbf 0$ 17 268 237 750 719
Projects under construction, MW 1,086 1,006 1,086 1,006 1,086 1,329
Projects handed over, MW $\mathbf 0$ $\Omega$ 482 48 641 207
Contracts under management (TCM), MW 3,603 2,506 3,603 2,506 3,603 2,986
Number of employees 352 256 352 256 352 277

For definitions of alternative performance measures and key performance indicators, see pages 24 and 29.

About OX2

OX2 develops and sells wind, solar farms and energy storage solutions. OX2 was founded in 2004 to be at the forefront of the transition to renewable energy, contributing to a sustainable future for people and the planet.

OX2's project development portfolio

CEO statement

Net sales rose during the quarter, driven by good progress in the construction portfolio. We signed our first agreement for the sale of offshore wind projects while our development portfolio grew significantly as our offshore projects outside Åland were included in the portfolio. In addition, we completed our first acquisition in Spain through the investment of a solar project.

Our first sale of offshore wind projects

During the third quarter, an agreement with Ingka Investments was signed for the sale of 49 percent of three offshore wind projects outside southern Sweden with a potential installed capacity of 9,000 MW. The deal, which is expected to be completed during the fourth quarter 2022, means that we will receive an initial payment of more than SEK 600 million and an additional payment after exclusive permits have been obtained.

We see great interest for our ambition in large-scale offshore wind projects and we continue to expand our organization. Our offshore business is expected to contribute positively to our results over the 2023-2024 period and onwards. We believe OX2's offshore wind projects in the Baltic Sea and Kattegat will be a powerful contributor to meet the growing energy demand.

Strong growth in the development portfolio

Focus on growing our project development portfolio continues and we have almost doubled it in size during the year.

In August, we received permission from the Government of Åland to start conducting surveys for two offshore projects outside Åland, Noatun South and Noatun North, which we are developing in collaboration with Ålandsbanken Fondbolag. OX2's share of the projects, which is estimated to amount to 5,200 MW, has therefore been included in our development portfolio as earlystage projects during the quarter.

Paul Stormoen, CEO

During the quarter, 0X2 made its first project investment in the Spanish market through the acquisition of a solar project totaling 55 MW. We also have promising activities within energy storage, where our portfolio now has grown to 500 MW mainly driven by an acquisition of early-stage projects in Poland.

Our portfolio now consists of projects in nine European markets, and we see good opportunities for continued geographical expansion, both in and outside Europe.

Stable results from the construction business

Our construction business generates stable results and we aim to hand over three projects to customers before year-end. OX2's technical and commercial management business has continued to grow with good profitability thanks to newly won management contracts.

Projects sold, MW

Relates to the Jan-Sep 2022 period

Growth in project development portfolio, MW

Relates to the Jan-Sep 2022 period

Total project development portfolio, MW

As of 30 September, 2022

Market and outlook

We see great interest in our projects that are under realization and we reiterate our target of reaching an operating income of slightly above SEK 1,000 million for the full year 2022.

There are good opportunities in our existing markets and we continue to evaluate new geographies and technologies to accelerate growth. OX2 continues to strengthen the organization to reach our mid-term financial targets.

The electricity demand is expected to increase over the coming years. Renewable energy remains the fastest and most cost-efficient way to generate significant amounts of new electricity without the need of subsidies. We welcome the new Swedish Government's ambition to work towards more efficient decision-making processes for new energy production.

With a proven and successful business model, combined with a strong project development portfolio and a solid financial position, OX2 is very well equipped to continue to drive the transition towards a sustainable future.

Paul Stormoen

Expand and develop

It is OX2's project development portfolio that creates long-term value and determines the company's ability to accelerate the access to renewable energy. The portfolio consists of greenfield projects (projects developed by 0X2 from start) as well as acquired wind and solar projects and energy storage solutions in various phases of development and within different markets. Development and optimization of these projects take place over a long period and not all projects that have been started will be realized. The probability of a project being realized increases the further on in the development phase the project is.

At the end of the third quarter, the portfolio amounted to 32.1 GW (17.6) GW) split by offshore wind of 18.3 GW (8.3 GW), onshore wind of 10.0 GW (8.1 GW), solar of 3.4 GW (1.2 GW) and energy storage of 0.5 GW (0 GW). Energy storage is a new technology for OX2 with strong potential across the markets - the focus is both on stand-alone projects as well as coupled together with onshore wind and solar projects.

During the third quarter, OX2's project development portfolio increased by 8,268 MW compared to the previous quarter, mainly driven by new greenfield additions of 6,456 MW in total split by offshore wind of 5,200 MW, onshore wind of 556 MW, solar of 521 MW, and storage of 179 MW. The new offshore projects added to the portfolio are located outside Åland and are developed in collaboration with Ålandsbanken Fondbolag - OX2's share of the projects is estimated to 5,200 MW. Acquisitions of 798 MW were also completed in onshore, solar, and energy storage across Poland, Greece, Italy, France, Romania, and Spain. 0X2 completed its first project acquisition in Spain of 55 MW in solar. Spain is a significant market for renewables with one of Europe's largest electricity markets, strong onshore and solar conditions, and ambitious renewable targets.

Overall, there was continued good progress in the development portfolio. The offshore project Aurora in Sweden moved into mid-stage and the first onshore project in Romania moved into late stage. Further there were a net revision upwards of 1,015 MW on existing projects during the quarter mainly driven by the Swedish offshore projects of 700 MW, 4,410 MW of the reported offshore portfolio in Sweden will be excluded from the portfolio subject to the completion of the sales transaction with Ingka Investments which is awaiting merger filing clearance.

Project development portfolio as of 30 September, 2022

Market (MW) Onshore
wind
Offshore
wind
Solar Storage Total
Sweden 3.441 9,000 752 64 13,256
Finland 4,832 4,100 0 15 8,947
Åland 0 5,200 0 $\mathbf 0$ 5,200
Poland 812 0 1,267 415 2,494
France 10 0 306 0 316
Other markets 902 0 1,011 6 1,918
Total: 9.996 18.300 3,336 500 32,132

Project development portfolio, MW

Project acquisition, MW

Project development portfolio/ development phase, MW

Projects sold

Deliver

Projects under construction as of 30 September, 2022

Constr. Operat.
Projects Country Technology start start MW
Projects to be handed over to customers in 2022 171
Merkkikallio Finland Onshore wind 2021 2022 83
Puutikankangas Finland Onshore wind 2020 2022 44
Rustari Finland Onshore wind 2020 2022 44
Projects to be handed over to customers in 2023 374
Grajewo Poland Onshore wind 2020 2023 40
Huszlew Poland Onshore wind 2021 2023 48
Karskruv Sweden Onshore wind 2021 2023 86
Klevberget Sweden Onshore wind 2022 2023 145
Marhult Sweden Onshore wind 2022 2023 32
Sulmierzyce Poland Onshore wind 2021 2023 23
Projects to be handed over to customers in 2024 87
Krasnik Poland Onshore wind 2021 2024 24
Wysoka Poland Onshore wind 2022 2024 63
Projects to be handed over to customers in 2025 455
Lestijärvi Finland Onshore wind 2021 2025 455
Total MW under construction at period end 1,086

OX2's technical and commercial management business continues to grow both with internally and externally developed assets. In the quarter, the company signed a new 93 MW management agreement for an externally developed wind farm in Finland. At the end of the third quarter, agreements for technical and commercial management amounted to 3,603 MW (2,506).

Financial highlights

Performance and financial position

Q3 Jan-Sep LTM Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Net sales 2,311 600 5,401 2,553 7,831 4,983
Cost of goods sold* $-2,048$ $-429$ $-4,243$ $-2,022$ $-6,145$ $-3,924$
Gross profit* 262 171 1,158 531 1,686 1,060
Project development costs* $-104$ $-58$ $-235$ $-142$ $-313$ $-220$
Other external costs $-38$ $-21$ $-110$ $-91$ $-145$ $-125$
Personnel costs $-88$ -63 $-305$ $-190$ $-399$ $-283$
Depreciation and amortization of
tangible and intangible assets
$-2$ -5 -9 $-11$ $-15$ $-17$
Operating income 30 24 498 97 815 414
Operating income adjusted for
project development costs
Gross margin, %
134
11.3%
82
28.5%
733
21.4%
239
20.8%
1,128
21.5%
634
21.3%
Operating margin, %
Operating margin adjusted for
project development costs, %
1.3%
5.8%
4.1%
13.7%
9.2%
13.6%
3.8%
9.4%
10.4%
14.4%
8.3%
12.7%

*For definitions of alternative performance measures, see page 24.

Net sales

Net sales in the third quarter amounted to SEK 2,311 million (600) and SEK 5,401 million (2,553) year to date.

The growth in net sales in the quarter was driven by higher net sales from construction milestones compared to the same period last year. Projects in Finland contributed with 54 percent (69) of net sales, followed by Sweden 25 percent (6), Poland 21 percent (14) and Norway 0 percent (11).

During the third quarter in 2022 and 2021, no projects were completed and handed over to customers. There were no new sales of projects in the quarter, whereas 17 MW of onshore wind was sold in the corresponding quarter last year.

The Net sales growth year to date is coming from higher new sales from wind and solar projects as well as a larger portfolio in construction phase, with higher net sales from construction milestones having been reached. Year to date projects in Finland contributed with 37 percent (54) of net sales, followed by Sweden 36 percent (28), Poland 27 percent (9) and Norway 0 percent (9).

Technical and commercial management agreements, MW

$3,603$
$(2,506)$

Net sales LTM, SEK million

Costs

In the third quarter cost of goods sold (COGS) amounted to SEK-2,048 million (-429) and SEK -4,243 million (-2,022) year to date. The increase of cost of goods sold in the quarter was due to higher net sales. COGS in relation to net sales was 89 percent (72) during the quarter and 79 percent (79) year to date. The higher COGS percentage was due to higher share of net sales from ongoing construction deliveries. The margin is normally higher in project sales compared to sales from ongoing construction delivery. Year to date, COGS as a percentage of net sales is at the same level as last year.

Project development costs amounted to SEK-104 million (-58) in the third quarter and SEK-235 million (-142) year to date. The development cost in the third quarter increased by 79 percent compared to the same quarter last year, due to a significantly larger project development portfolio, where costs for offshore development activities have seen the highest growth. The increase year to date was 65 percent. Project development costs, as a percentage of net sales, on a rolling twelve-month basis amounted to 4.0 percent, compared with 4.7 percent for the same period previous year.

Other external costs amounted to SEK-38 million (-21) in the third quarter and SEK-110 million (-91) year to date. The increase in the third quarter is related to the expansion of business compared to last year. There has been increased costs for consultants and IT as well as establishment in new markets, but also higher costs related to increased business activity, for example travel costs, compared to 2021 when Covid-19 still impacted many markets.

Personnel costs amounted to SEK-88 million (-63) in the third quarter and SEK-305 million (-190) year to date. The increase in personnel costs was due to an increase in headcount (96 employees) compared to the same period previous year, which is in line with the company's expansion plan.

Profit

Operating income for the third quarter of 2022 amounted to SEK 30 million (24) and SEK 498 million (97) year to date. The profit development in individual quarters is mainly impacted by the pace of completion of projects under construction and sale of new projects. The gross margin was 11.3 percent (28.5) for the quarter and 21.5 percent (18.6) on a rolling 12-months basis. The lower margin in the quarter is due to the mix between projects sold and progress in construction projects. The increase in gross margin on a rolling 12-month basis is derived from higher margins from new projects sold as well as good performance in the construction portfolio.

Results from financial items amounted to SEK 23 million (-5) in the third quarter and SEK 41 million (3) year to date. The positive result from financial items was due to the revaluation of balance sheet items in foreign currency. OX2's currency exposure is primarily in EUR and the company uses currency derivatives for hedging.

Project development costs LTM, SEK million

Operating income LTM, SEK million

The effective tax rate was 17.1 percent (21.0) for the quarter and 15.0 percent (2.8) year to date. The effective tax rate year to date was positively impacted by non-taxable net sales from the sale of project companies.

Profit for the third quarter amounted to SEK 44 million (15) and SEK 459 million (97) year to date.

Earnings per share before and after dilution amounted to SEK 0.16 (0.06) for the third quarter and SEK 1.68 (0.38) year to date.

OX2 applies hedge accounting and changes in fair value relating to currency derivatives are recognised in other comprehensive income.

Financial position and liquidity

Current assets amounted to SEK 4,842 million (3,715) at the end of the period, an increase of SEK 1,127 million compared to the end of December 2021. The change was related to increase in the project development portfolio and cash due to an increase in advances from customers and accrued cost.

The value of the project development portfolio and work in progress amounted to SEK 868 million (502). The increase was mainly due to acquisitions of project rights. Account receivables totaled SEK 259 million (297). Other receivables totaled SEK 74 million (33). Prepaid expenses and accrued income totaled SEK 495 million (496). Prepaid expenses and accrued income consisted mainly of items related to construction. Cash and cash equivalents amounted to SEK 3,147 million (2,374).

Total current liabilities were SEK 1,981 million (1,310), an increase of SEK 671 million compared to the end of December 2021.

Customer prepayments amounted to SEK 844 million (601), an increase of SEK 243 million during the year. 48 percent of the prepayments were related to projects under construction in the Polish market, followed by 29 percent in Swedish projects and 23 percent in Finnish projects. Account payables amounted to SEK 242 million (309). Other liabilities amount to SEK 254 million (211) and tax liabilities to 40 million (0). Accrued expenses and deferred income amounted to SEK 585 million (175). Accrued expenses consisted of accrued construction- and project costs and accrued personnel costs.

Cash flow

During the quarter cash flow from operating activities amounted to SEK -129 million (143) and SEK 765 million (231) year to date. Cash flow from operating activities before changes in working capital amounted to SEK 40 million (12) in the quarter and cash flow from changes in working capital totaled SEK -57 million (164). Year to date the cash flow from operating activities before changes in working capital amounted to SEK 516 million (68) and cash flow from changes in working capital totaled SEK 600 million (360). The cashflow from working capital was mainly related to increases in advances from customers and accrued costs.

Investments in the project development portfolio totaled SEK -111 million (-34) in the quarter and SEK-351 million (-197) year to date.

Net debt or -net cash, SEK million

$-3,105$ $(-2, 712)$

Investments in the project development portfolio LTM, SEK million

During the quarter, cash flow from investment activities amounted to SEK -1 million (4) and SEK -1 million (-1) year to date. Cash flow from financing activities totaled SEK -4 million (-1) during the quarter and SEK -9 million (1,269) year to date. The main difference year to date compared with last year was the share issue in the second quarter of 2021. Total cash flow for the third quarter of 2022 amounted to SEK-134 million (146) and SEK 755 million (1,499) for the year to date.

Parent company

The parent company's (OX2 AB) employees work with project development, financing, project sales and project implementation. Group management and group functions are also based within the parent company. Total net sales during the quarter amounted to SEK 93 million (78) and SEK 827 million (286) year to date. The net sales year to date consist of the sale of wind and solar farms, as well as internal invoicing of service and management fees. Income from sale of wind and solar farms varies between quarters and is also affected by the transaction structure of the projects sold.

The cost of goods and project development in the quarter amounted to SEK-131 million (-66) and SEK-478 million (-168) year to date. Increase in development cost is related to the larger project portfolio. Other external costs for the quarter amounted to SEK-33 million (-20) and SEK-97 million (-88) year to date. The increase was related to the business expansion. Year to date the increase compared to last year is partly offset by the listing costs previous year.

Personnel costs for the quarter totaled SEK-64 million (-46) and SEK-224 million (-139) year to date. The increase in costs was due to a higher number of employees compared to the same quarter last year as well as year to date.

Operating income for the quarter amounted to SEK-135 million (-55) and SEK 25 million

(-111) year to date. Operating income in quarter was negatively impacted by the higher cost while the increase year to date was related to higher sales from wind- and solar projects. Profit after financial items amounted to SEK-138 million (-56) during the quarter and SEK 211 million (-110) year to date. The increase in financial items year to date was related to net income from participations in group companies. Profit for the period totaled SEK -111 million (-44) and SEK 206 million (-87).

The current assets amounted to SEK 3,817 million (2,556) at the end of September 2022. The change was due to an increase in cash, accrued income from group companies related to sold projects and project development portfolio.

Liabilities to associate companies amounted to SEK 1,923 million (1,164) as of 30 September 2022.

The parent company's equity amounted to SEK 2,129 million (1,919) as of 30 September 2022.

Financial targets

OX2 has set the following financial targets:

Growth

  • · >500 MW sold per year on average over the 2021-22 period
  • · >1,500 MW sold per year on average over the 2023-24 period
  • · > 2,000 MW sold per year in the medium-term

Profitability

  • · Operating margin of 10 percent in the medium-term
  • · Operating income of SEK 2.5 billion in the medium-term

Dividend

· The company sees significant opportunities to reinvest cash flow from operations in value-creating growth. No dividend is expected to be paid in the short term.

Shareholder information

Employees

Total number of employees 9/30/2022 9/30/2021
Sweden 191 161
Finland 68 49
Poland 44 28
France 16 13
Other markets 33 5
Total OX2 Group 352 256

At the end of September 2022, 42 (45) percent were women and 58 (55) men.

Number of employees as of 30 September 2022, %

Risks and uncertainties

Sustainability

Future prospects

Planning conditions

Significant events after the end of the reporting period

Estimates and judgements for accounting purposes

Annual report and Annual General Meeting

Declaration

OX2 AB (publ)
Johan Ihrfelt Paul Stormoen Anna-Karin Celsing
Chairperson CEO Board member
Ann Grevelius Jan Frykhammar Malin Persson
Board member Board member Board member
Niklas Midby Petter Samlin Thomas von Otter
Board member Board member Board member

The auditor's review report on interim financial information

To the Board of Directors of OX2 AB (publ), corporate registration number 556675-7497

Introduction

We have reviewed the interim financial information for OX2 AB for the period 1 January - 30 September 2022. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with ISA and other Generally Accepted Auditing Practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim financial information is not, in all material respects, prepared in accordance with IAS 34 and the Swedish Annual Accounts Act.

Stockholm 26 October 2022 Deloitte AB

Signature on Swedish original

Jonas Ståhlberg

Authorized Public Accountant

Q3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 2021
Net sales 2,311 600 5,401 2,553 4,983
Total revenue 2,311 600 5,401 2,553 4,983
Cost for goods and project development -2,152 -487 -4,478 -2,164 -4,143
Other external costs -38 -21 -110 -91 -125
Personnel costs -88 -63 -305 -190 -283
Depreciation and amortization of tangible and intangible assets -2 -5 -9 -11 -17
Total operating expenses -2,280 -575 -4,903 -2,456 -4,569
Operating income 30 24 498 97 414
Financial income 83 9 176 33 118
Financial costs -61 -14 -135 -31 -126
Profit after financial items 53 19 539 100 407
Income tax -9 -4 -81 -3 -73
PROFIT FOR THE PERIOD 44 15 459 97 334
Profit for the period attributable to:
Owners of the parent company 44 15 459 97 334
Non-controlling interests -0 - -0 - 0
Average number of share before dilution 272,517,586 272,517,586 272,517,586 258,165,718 261,783,175
Average number of share after dilution 272,693,336 272,517,586 272,572,046 258,165,718 261,783,175
Earnings per share before and after dilution, SEK 0.16 0.06 1.68 0.38 1.28
Q3 Jan-Sep Full year
Q3 Jan-Sep
SEK m 2022 2021 2022 2021 2021
Profit for the period 44 15 459 97 334
Other comprehensive income:
Items that may reclassified subsequently to profit or loss
Foreign exchange differences on translation of foreign subsidiaries 7 1 19 3 7
Cash flow hedges
Changes in fair value -32 -2 -119 -20 -39
Income tax attributable to cash flow hedges 7 2 23 6 10
Total other comprehensive income after tax 25 17 381 86 312
Total comprehensive income for the period attributable to:
Owners of the parent company 25 17 381 86 312

Consolidated statement of financial position

SEK m 2022/09/30 2021/12/31 2021/09/30
ASSETS
Non-current assets
Other intangible assets 3 4 4
Fixtures, tools and installations $\overline{4}$ 3 3
Right-of-use assets 41 20 19
Other financial assets 1 1 6
Total Non-current assets 48 29 33
Current assets
Project development portfolio and construction in progress 868 502 433
Accounts receivable 259 297 11
Tax receivables 7 7
Other receivables 74 33 56
Prepaid expenses and accrued income 495 496 361
Derivative financial instruments $\mathbf{0}$ 6 $\overline{7}$
Cash and cash equivalents 3,147 2,374 2,737
Total Current assets 4,842 3,715 3,613
TOTAL ASSETS 4,891 3,743 3,646
EQUITY AND LIABILITIES
Equity attributable to the shareholders of the parent company
Share capital 1 1 1
Retained earnings including profit for the period 2,739 2,355 2,129
Total equity attributable to the shareholders of the parent company 2,739 2,355 2,130
Non-current liabilities
Long-term interest-bearing liabilities 25 15 12
Derivative financial instruments 123 17
Deferred tax liabilities 22 46 39
Total Long-term liabilities 170 78 51
Current liabilities
Advance payments from customers 844 601 1,068
Accounts payable 242 309 123
Tax liabilities 40
Other Current liabilities 254 211 75
Current interest-bearing liabilities 17 14 13
Accrued expenses and deferred income 585 175 186
Total Current liabilities 1,981 1,310 1,465
TOTAL EQUITY AND LIABILITIES 4,891 3,743 3,646

Consolidated statement of changes in equity

SEK m 2022/09/30 2021/12/31 2021/09/30
Opening balance 2,355 766 766
Total comprehensive income for the period 381 312 86
New issue 612 612
Bonus issue 0 $\mathbf 0$
Issue for non-cash consideration 739 739
Change in minority interest 0 $\Omega$
Issue costs referring to new share issue adjusted for tax $-73$ $-73$
Dividend
Share-based payments
Shareholder contribution 2
Closing balance 2,739 2,355 2,130
Attributable to:
Owners of the parent company 2,740 2,355 2,130
Non-controlling interest 0 0 0
Total equity 2,739 2,355 2,130

Condensed consolidated statement of cash flows

Q 3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 2021
Profit after financial items 53 19 539 100 407
Adjustments for items not included in cash flow, etc. 3 5 11 22 31
Income taxes paid $-16$ $-12$ $-34$ $-54$ -81
Cash flow from operating activities before changes in working
capital
40 12 516 68 356
Cash flow from changes in working capital $-57$ 164 600 360 $-64$
Investments in project development portfolio $-111$ $-34$ $-351$ $-197$ $-424$
Cash flow from operating activities $-129$ 143 765 231 $-132$
Acquisition/sale of fixed assets $-1$ 4 $-1$ $-1$ $-1$
Cash flow from investment activities -1 4 $-1$ $-1$ $-1$
New issue 612 612
Issue for non-cash consideration 739 739
Issue costs referring to new share issue 6 $-73$ $-73$
Shareholder contribution $\overline{2}$
Repayments of lease liabilities $-4$ $-7$ $-11$ -8 $-12$
Short-term loans parent company
Cash flow from financing activities $-4$ -1 -9 1,269 1,266
Cash flow for the period $-134$ 146 755 1,499 1,133
Translation difference in cash and cash equivalents $\overline{7}$ 18 3 7
Cash and cash equivalents at beginning of the period 3,273 2,590 2,374 1,235 1,235
Cash and cash equivalents at period end 3,147 2,737 3,147 2,737 2,374

Condensed parent company income statement

Q 3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 2021
Net sales 93 78 827 286 681
Other operating revenue $\mathbf 0$ 0 $\Omega$ 0 4
Total revenue 93 78 827 286 685
Cost of goods and project development $-131$ $-66$ $-478$ $-168$ $-296$
Other external costs $-33$ $-20$ $-97$ $-88$ $-118$
Personnel costs $-64$ -46 $-224$ $-139$ $-201$
Depreciation and amortization of tangible and intangible assets $-1$ $-1$ $-2$ $-2$ $-2$
Total operating expenses $-228$ $-132$ $-801$ $-397$ $-617$
Operating income $-135$ $-55$ 25 $-111$ 69
Financial income 7 209 6 111
Financial costs $-10$ $-2$ $-23$ -6 $-10$
Profit after financial items $-138$ -56 211 $-110$ 170
Year-end appropriations 46
Tax 28 12 $-5$ 23 $-24$
Profit for the period $-111$ $-44$ 206 $-87$ 192

Parent company statement of comprehensive income

Q3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 2021
Profit for the period $-111$ -44 206 -87 192
Total other comprehensive income after tax $-111$ -44 206 -87 192

Condensed parent company balance sheet

SEK m 2022/09/30 2021/12/31 2021/09/30
ASSETS
Non-current assets
Other intangible assets 3 4 4
Fixtures, tools and installations 3 3 3
Participations in Group companies 623 801 1,452
Other non-current assets $\mathbf{1}$ $\overline{\phantom{a}}$
Total Non-current assets 630 808 1,460
Current assets
Project development portfolio and construction in progress 231 77 40
Accounts receivable $\mathbf{1}$ $\mathbf 0$ 3
Tax receivable 28 24 64
Other receivables 32 10 16
Receivables from group companies 748 160 116
Prepaid expenses and accrued income 17 13 5
Cash and cash equivalents 2,760 2,272 2,606
Total Current assets 3,817 2,556 2,851
TOTAL ASSETS 4,447 3,364 4,310
EQUITY AND LIABILITIES
Equity 2,129 1,919 1,639
Untaxed reserves 94 94 94
Current liabilities
Accounts payable 40 53 31
Current tax liabilities
Other Current liabilities 119 59 14
Liabilities to group companies 1,923 1,164 2,465
Accrued expenses and deferred income 143 75 67
Total Current liabilities 2,225 1,352 2,577
TOTAL EQUITY AND LIABILITIES 4,447 3,364 4,310

Key performance indicators, Group

Q 3 Jan-Sep LTM Full year
2022 2021 2022 2021 Oct-Sep 2021
Profitability
Net sales, SEK m 2,311 600 5,401 2,553 7,831 4,983
Net sales growth, % 285.2% $-70.7%$ 111.5% $-25.9%$ 81.8% $-4.2%$
Operating income, SEK m 30 24 498 97 815 414
Operating income adjusted for development costs, SEK m 134 82 733 239 1,128 634
Operating margin, % 1.3% 4.1% 9.2% 3.8% 10.4% 8.3%
Operating margin adjusted for development costs, % 5.8% 13.7% 13.6% 9.4% 14.4% 12.7%
Profit for the period, SEK m 44 15 459 97 695 334
Earnings per share before and after dilution, SEK 0.16 0.06 1.68 0.38 2.60 1.28
Financial position
Net debt or -net cash, SEK m $-3,105$ $-2,712$ $-3,105$ $-2,712$ $-3,105$ $-2,346$
Equity ratio, % 56.0% 58.4% 56.0% 58.4% 56.0% 62.9%
Effective tax rate, % 17.1% 21.0% 15.0% 2.8% 17.8% 17.9%
Operating cash flow, SEK m $-137$ 164 755 270 427 $-58$
Cash conversion, % $-419%$ 568% 149% 249% 51% $-13%$
Construction related working capital, SEK m $-1,075$ $-1,023$ $-1,075$ $-1,023$ $-1,075$ $-470$
Net working capital, SEK m $-229$ $-590$ $-229$ $-590$ $-229$ 31
Equity per share, SEK 10 8 10 8 10 9
Return on equity, % 1.6% 0.7% 18.0% 6.7% 28.5% 21.4%
Return on capital employed, % 1.1% 1.1% 19.3% 6.6% 33.0% 26.1%
Investments in the project development portfolio, SEK m $-111$ $-34$ $-351$ $-197$ $-577$ $-424$
Operational key figures
Project acquisitions, MW 798 614 2,156 2,871 2,731 3,446
Project development portfolio, MW 32,132 17,589 32,132 17,589 32,132 17,371
Sold projects, MW $\mathbf{0}$ 17 268 237 750 719
Projects under construction, MW 1,086 1,006 1,086 1,006 1,086 1,329
Projects handed over, MW $\mathbf{0}$ 0 482 48 641 207
Contracts under management, MW 3,603 2,506 3,603 2,506 3,603 2,986
Number of employees 352 256 352 256 352 277

For definitions of alternative performance measures and key performance indicators, see pages 24 and 29.

Notes

Note 1 Accounting policies

The consolidated accounts for OX2 have been prepared in accordance with the International Financial Reporting standards (IFRS) adopted by the EU. The interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act.

The parent company OX2 AB applies the Annual Accounts Act and RFR 2 Accounting for Legal Entities.

Items have been valued in the consolidated financial statements at cost, except in the case of certain financial instruments that are valued at fair value and at amortised cost. There have been no changes in accounting policies since the latest annual report.

Note 2 Income

The Group has one segment.

The Group's net sales mainly comprise sales of wind and solar projects and commissioned wind farms. The Group normally recognises net sales over time and, in certain cases, at a specific time.

For a description of segment reporting, see the 2021 Annual Report, Note 2, 'Accounting policies'.

Q 3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 2021
Net sales per category
Sales of wind and solar projects and wind farms 2,311 600 5,401 2,553 4,983
Total 2,311 600 5,401 2,553 4,983
Income divided by country*
Sweden 584 36 1,959 717 1,263
Finland 1,246 415 2,007 1,389 2,883
Norway 67 215 227
Poland 480 82 1,435 232 610
Total 2,311 600 5,401 2,553 4,983
*The income divided by country is based on where projects are localised
Q 3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 2021
Time of revenue recognition
At a certain time 7 85
Over time 2,304 600 5,315 2,553 4,983
Total 2,311 600 5,401 2,553 4,983
SEK m 2022 2021 2022 2021 2021
Contract assets
Ongoing work in progress on behalf of others 22 0 22 0 0
Accrued income 206 69 206 69 86
Total 228 69 228 69 86
Of which Long-term assets - - - - -
Of which Current assets 228 69 228 69 86
Total 228 69 228 69 86
Q3 Jan-Sep
SEK m 2022 2021 2022 2021 2021
Contract assets
Ongoing work in progress on behalf of others 22 0 22 0 0
Accrued income 206 69 206 69 86
Total 228 69 228 69 86
Of which Long-term assets - - - - -
Of which Current assets 228 69 228 69 86
Total 228 69 228 69 86
Q3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 2021
Contract liabilities
Advance payments from customers 844 308 844 1,068 601
Prepaid income 49 7 49 7 3
Total 893 315 893 1,075 604
Of which Long-term liabilities - - - - -
Of which Current liabilities 893 315 893 1,075 604
Total 893 315 893 1,075 604
SEK m 2022/09/30 2021/12/31 2021/09/30
Financial assets at fair value
Derivative instruments 0 6 7
Financial assets measured at amortized cost
Accounts receivables 259 297 11
Receivables from Group companies - - 0
Other current receivables 74 33 56
Cash and cash equivalents 3,147 2,374 2,737
Total financial assets 3,480 2,710 2,811
Financial liabilities at fair value
Derivative instruments 123 17 -
Financial liabilities measured at amortized cost
Other Long-term liabilities 25 15 12
Accounts payable 242 309 123
Liabilities to Group companies - - 0
Other Current liabilities 254 211 75
Current interest-bearing liabilities 17 14 13
Total financial liabilities 661 565 223

Note 4 Related party transactions

Note 5 Incentive programme

Note 6 Pledged assets and contingent liabilities

Alternative performance measures

Alternative performance measure definitions

Return on equity, % Net profit/loss in relation to average shareholders' equity.
Return on capital employed, % Operating income/loss in relation to average capital employed.
Gross profit Net sales for the period less the total cost of goods sold and transaction costs
relating to sales of projects.
Gross margin, % Gross profit as a percentage of net sales.
Construction related working
capital
Current assets less the project development portfolio, derivative financial
instruments and cash and cash equivalents less current liabilities adjusted for
receivables and liabilities against Group companies and tax liability adjusted for
interest-bearing current liabilities.
Equity per share Shareholders' equity divided by the average number of shares.
Cash conversion, % Operating cash flow as a percentage of the company's EBITDA for the period.
Cost of goods sold Total cost of goods sold and transaction costs in connection with the sale of
projects.
Net sales growth, % Change in net sales compared with the same period the previous year.
Net working capital Current assets less derivative financial instruments and cash and cash
equivalents less non-interest-bearing current liabilities adjusted for receivables
from and liabilities to group companies and tax liability.
Net debt or -net cash Interest-bearing non-current and current liabilities less cash and cash
equivalents, current investments and interest-bearing current and non-current
receivables.
Operating cash flow EBITDA less changes in net working capital less investments in project
development portfolio, as well as cash flows from investing activities.
Project development costs External development costs related to the enhancement of the project
development portfolio, and expenses incurred in connection with the acquisition
of project rights.
EBITDA Operating income before depreciation and impairment of tangible and intangible
assets.
Operating margin, % Operating income as a percentage of net sales.
Operating margin adjusted for
development costs, %
Operating income adjusted for
development costs
Equity ratio %
Capital employed
LTM

Reconciliation of alternative performance measures

Reconciliation of return on equity

Q3 Jan-Sep LTM Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Shareholders' equity, beginning of period 2,714 2.107 2,355 766 2.130 766
Shareholders' equity, end of period 2,739 2,130 2,739 2,130 2.739 2,355
Average equity 2,727 2.119 2,547 1.448 2.435 1,561
Profit for the period 44 15 459 97 695 334
Average equity 2,727 2,119 2,547 1,448 2.435 1,561
Return on equity 1.6% 0.7% 18.0% 6.7% 28.5% 21.4%

Reconciliation of return on capital employed

Q 3
Jan-Sep
LTM Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Equity 2,739 2,130 2,739 2,130 2,739 2,355
Interest-bearing liabilities (long-term and short-term) 42 25 42 25 42 28
Capital employed 2,782 2,155 2,782 2,155 2,782 2,383
Average capital employed
Capital employed, beginning of period 2,748 2,129 2,383 789 2,155 789
Capital employed, end of period 2,782 2,155 2,782 2,155 2,782 2,383
Average capital employed 2,765 2,142 2,583 1,472 2,468 1,586
Operating income 30 24 498 97 815 414
Average capital employed 2,765 2,142 2,583 1,472 2,468 1,586
Return on capital employed 1.1% 1.1% 19.3% 6.6% 33.0% 26.1%

Reconciliation of cost of goods sold

Q 3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Cost for goods and project development $-2.152$ $-487$ $-4.478$ $-2.164$ $-6.457$ -4.143
Of which cost of goods sold $-2.048$ $-429$ $-4.243$ $-2.022$ $-6.145$ $-3.924$
Of which project development costs $-104$ $-58$ $-235$ $-142$ $-313$ $-220$

Reconciliation of gross profit and gross margin

Q3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Net sales 2,311 600 5.401 2,553 7,831 4,983
Cost of goods sold $-2.048$ $-429$ $-4.243$ $-2.022$ $-6.145$ $-3,924$
Gross profit 262 171 1,158 531 1.686 1,060
Gross margin, % 11.3% 28.5% 21.4% 20.8% 21.5% 21.3%

Reconciliation of operating income, operating income adjusted for project development costs, and margins for all of the above

Q3 Jan-Sep Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Net sales 2,311 600 5,401 2,553 7,831 4,983
Operating income 30 24 498 97 815 414
Operating margin, % 1.3% 4.1% 9.2% 3.8% 10.4% 8.3%
Depreciation and amortization of tangible and intangible assets $\overline{2}$ 5 9 11 15 17
EBITDA 33 29 507 108 830 431
Operating income 30 24 498 97 815 414
Project development costs 104 58 235 142 313 220
Operating income adjusted for development costs 134 82 733 239 1,128 634
Operating margin adjusted for development costs, % 5.8% 13.7% 13.6% 9.4% 14.4% 12.7%

Reconciliation of equity per share

Q3 Jan-Sep LTM Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Equity 2.739 2.130 2.739 2.130 2.739 2,355
Average number of shares before dilution 272.517.586 272.517.586 272,517,586 258.165.718 272.517.586 261,783,175
Average number of shares after dilution 272,693,336 272.517.586 272.572.046 258.165.718 272.562.795 261,783,175
Equity per share before and after dilution (SEK) 10 8 10 10 9

Reconciliation of net sales growth

Q3 Jan-Sep LTM Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Net sales for the previous period 600 2.050 2,553 3.447 4.307 5,201
Net sales for the current period 2.311 600 5.401 2.553 7.831 4,983
Net sales growth, % 285.2% $-70.7%$ 111.5% $-25.9%$ 81.8% $-4.2\%$

Reconciliation of net debt or -net cash

Q3 Jan-Sep LTM Full vear
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Interest-bearing liabilities (long-term and short-term) 42 25 42 25 42 28
Interest-bearing receivables (long-term and short-
term)
$-0$ $-0$
Cash and cash equivalents $-3.147$ $-2.737$ $-3.147$ $-2.737$ $-3.147$ $-2,374$
Net debt or -net cash $-3,105$ $-2.712$ $-3,105$ $-2.712$ $-3.105$ $-2,346$

Reconciliation of equity ratio

Q3 Jan-Sep LTM Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Equity 2,739 2,130 2,739 2,130 2,739 2,355
Balance sheet total 4,891 3.646 4,891 3,646 4.891 3,743
Equity ratio % 56.0% 58.4% 56.0% 58.4% 56.0% 62.9%

Reconciliation of effective tax rate, %

Q3 Jan-Sep Full vear
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Income tax -9 -4 $-81$ -3 $-151$ -73
Profit after financial items 53 19 539 100 846 407
Effective tax rate, % 17.1% 21.0% 15.0% 2.8% 17.8% 17.9%

Reconciliation of cash conversion, %

Q3 Jan-Sep LTM Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
EBITDA 33 29 507 108 830 431
Changes in net working capital $-57$ 164 600 360 175 -64
Investments in project development portfolio $-111$ $-34$ $-351$ $-197$ $-577$ $-424$
Cash flow from investment activities $-1$ 4 $-1$ -1 -1 $-1$
Operating cash flow $-137$ 164 755 270 427 -58
Cash conversion, % $-419.3%$ 567.5% 148.9% 249.2% 51.4% $-13.4%$

Reconciliation of construction-related working capital and net working capital

Q 3 Jan-Sep LTM Full year
SEK m 2022 2021 2022 2021 Oct-Sep 2021
Construction in progress 22 $\Omega$ 22 $\Omega$ 22 $\Omega$
Accounts receivable 259 11 259 11 259 297
Other receivables 74 56 74 56 74 33
Prepaid expenses and accrued income 495 361 495 361 495 496
Construction working capital assets 849 428 849 428 849 826
Advance payments from customers $-844$ $-1,068$ $-844$ $-1,068$ $-844$ $-601$
Accounts payable $-242$ $-123$ $-242$ $-123$ $-242$ $-309$
Other Current liabilities $-254$ $-75$ $-254$ $-75$ $-254$ $-211$
Accrued expenses and deferred income $-585$ $-186$ $-585$ $-186$ $-585$ $-175$
Construction working capital liabilities $-1,925$ $-1,452$ $-1,925$ $-1,452$ $-1,925$ $-1,296$
Construction working capital $-1,075$ $-1,023$ $-1,075$ $-1,023$ $-1,075$ -470
Project development portfolio 846 433 846 433 846 502
Net working capital $-229$ -590 $-229$ $-590$ $-229$ 31
As % of LTM net sales
LTM net sales 7,831 4,307 7,831 4,307 7,831 4,983
Construction related working capital assets 10.8% 9.9% 10.8% 9.9% 10.8% 16.6%
Construction related working capital liabilities $-24.6%$ $-33.7%$ $-24.6%$ $-33.7%$ $-24.6%$ $-26.0%$
Construction related working capital $-13.7%$ $-23.8%$ $-13.7%$ $-23.8%$ $-13.7%$ $-9.4%$
Net working capital % $-2.9%$ $-13.7%$ $-2.9%$ $-13.7%$ $-2.9%$ 0.6%

Key performance indicator definitions

Number of employees The number of employees in the Group at end of period.
Balance sheet total Total assets.
Management agreements, MW Technical and commercial management agreements.
Investment in project
development portfolio
investments. Payment for acquired project rights and additional project related
Project acquisitions, MW Acquired rights to power plant projects.
Project development portfolio,
MW
OX2's power plant project development.
Projects under construction,
MW
Power plant projects under construction.
Projects handed over to
customers, MW
Completed power plants handed over to customers.
Earnings per share Profit divided by the average number of shares.
Projects sold, MW Power plant projects sold.
Development phase OX2 divides its project development portfolio into three phases based on
how far a project has come in the development process. Projects that are
shelved or, where no active development work is in progress, are not
included in the OX2 project development portfolio. The time required for
project development and realisation depends on several factors such as
technology and geography.
Early Projects with expected realisation within 3-7 years
Medium Projects with expected realisation within 2-5 years
Late Projects with expected realisation within < 3 years

Financial calendar

Interim Report Oct-Dec 2022: 22 February 2023 Interim Report Jan-Mar 2023: 29 April 2023 Annual General Meeting: 16 May 2023

Contact details

Paul Stormoen, CEO Email: [email protected]

Johan Rydmark, CFO Email: [email protected]

Henrik Vikström, IR Email: [email protected]

OX2

THE R. P. P. LEWIS

Lilla Nygatan 1 Box 2299 SE-10317 Stockholm Sweden

Tel. +46 8 559 310 00 [email protected] www.ox2.com Reg.no 556675-7497

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