Otovo ASA — Earnings Release 2021

Apr 28, 2021

Results for Q1 2021

Results for Q1 2021

Highlights

Otovo returns to growth in the first quarter of the year while delivering a significant increase in the project pipeline. Re-iterating guidance for FY 2021 at EUR 29m (NOK ~290m).

• Revenue up 7% YoY to NOK 38m

• Net sold projects up 49% YoY to 815

• Pipeline value up 29% YoY to NOK 66m

• Installers on the platform up 47% YoY to 340

• EBITDA at NOK -37m (-22m), with listing-related / non-recurring cost items amounting to NOK 8m

• Funding and listing provide a clear runway for future growth

• Solid NOK 284m cash position per Q1 21

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First quarterly review

Entry into new markets and increasing activity in existing markets has secured growth in both revenues and pipeline compared with Q1 20. The launch of leasing and new products, combined with presence in attractive markets, sets a good foundation for future growth.

-- While the pandemic still influences markets, the improvements Otovo has made outweigh the negatives. We are confident that we will continue to deliver growing sales and installation numbers in the remaining three quarters of the year, says Otovo CEO, Andreas Thorsheim.

-- With six countries that are all growing as we enter the second quarter and batteries on their way into the product offering, starting in Italy, we feel confident that we are making meaningful strides towards our ambition of being number one in Europe in residential solar, he adds.

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Income statement

Total revenues were up from NOK 35.1m in Q1 20 to NOK 37.6 in Q1 21, primarily explained by increasing activity in France and Spain. Spain had its first installations in Q1 20, while France up until Q4 20 was on a commission-based model, first fully integrated on the Otovo business model in Q1 21. Additionally, Otovo has entered Poland and Italy and completed the first projects in these markets during Q4 20 and Q1 21. The increase in revenues from these markets is partly netted by reduced revenues in Scandinavia, explained by fewer sales in Q4 20 than in Q4 19. The reduction in sales from Q4 19 to Q4 20 is primarily due to uncertainty about subsidies in Sweden and grid tariffs in Norway, both clarified in December.

Gross profit is in line with Q1 20, while gross margin is down from 16.4% to 15.1%. This is explained by increasing activity in new markets with lower margins, discounts to boost sales, and France going from a commission-based model to being fully integrated on the Otovo business model.

Payroll and related costs increased from NOK 16.1m in Q1 20 to NOK 27.2m in Q1 21, with approximately NOK 8.0m of the cost current year and NOK 4.4m last year relating to Otovo’s employee share purchase and option program. The number for Q1 21 includes non-recurring expenses of approximately NOK 4m related to acceleration of cost due to the listing on Euronext Growth, as well as NOK 2m relating to increased social security accrual due to share price increase. Q1 20 includes a non-recurring expense of NOK 3.3m for the share option program belonging to 2019, first accrued in 2020. Further to this, the increase in payroll and related costs is explained by new hires due to increasing activity in existing markets and entry into new markets. Increasing activity and entry into new markets are also explaining the increase in other operating expenses from NOK 11.8m in Q1 20 to NOK 15.9m in Q1 21.

Net financial items are up from a loss of NOK 8.4m in Q1 20 to a gain of NOK 0.7m in Q1 21. The results in both quarters are primarily related to currency exchange fluctuations.

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Balance sheet

Total non-current assets as of Q1 21 are in line with Q4 20. The change is mainly explained by capitalization of expenses relating to development of Otovo Cloud netted by reduction in goodwill due to amortization and currency effects.

Total current assets have increased from NOK 95.7m in Q4 20 to NOK 314.3m in Q1 21. Capital increase of NOK 250m in Q1 21, net of transaction cost of NOK 13.4m, is together with an increase in activity and resulting increase in accounts and other receivables explaining the change.

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Cash flow

Net cash flow from operating activities was -NOK 31.6m in Q1 21. The main driver is negative operating profits due to start-up expenses in new markets and scaling the organization for growth. Cash flow from investing activities was -NOK 8.8m driven by the continued development of Otovo Cloud. Cash flow from financing activities was NOK 249.2m, driven mainly by net proceeds from the private placement in conjunction with the IPO.

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Outlook

Strong growth in 2021 - reiterate FY 2021 revenue of EUR 29m

• Scandinavia remains challenging but will improve YoY in the next three quarters as Otovo responds to more positive market conditions

• Poland ahead of internal estimates and on track to be a repeat of our entry to Spain in 2020, but with a faster effect on the P&L

• France, Italy, and Spain progress as anticipated and will grow during all of 2021

Gross margin target above 18% gross margins by end of FY 2021

• Will be diluted by growth in new markets in the near term

• Expected to pick up throughout Q3, coming out of Q4 above 18%, and further increase from there and into 2022

In total, we believe this sets us up for a strong 2021 and high pace of entry into 2022.

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Please find attached the quarterly report, alongside the quarterly presentation that Andreas Thorsheim, CEO and Lars Ekeland, General Counsel and Acting CFO, will give at the webcast hosted by Arctic Securities at 09:00 28 April on the following link:

https://teams.microsoft.com/dl/launcher/launcher.html?url=%2F_%23%2Fl%2Fmeetup-join%2F19%3Ameeting_NGYwMTg4MTYtMjBiNy00NDAwLWIzMWQtZTViMDJmZTczODEz%40thread.v2%2F0%3Fcontext%3D%257b%2522Tid%2522%253a%2522d02701f9-3b23-4b3f-8fce-29ed54632bf8%2522%252c%2522Oid%2522%253a%252246322cd0-1ab9-4a7e-a332-d7d82cfa7c38%2522%252c%2522IsBroadcastMeeting%2522%253atrue%257d%26anon%3Dtrue&type=meetup-join&deeplinkId=4fbcffb2-0687-4701-ab78-8c69899457c7&directDl=true&msLaunch=true&enableMobilePage=true&suppressPrompt=true

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Disclosure Regulation

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

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About Otovo: For homeowners, Otovo is the easiest way to get solar panels on the roof. Otovo is a marketplace that organizes hundreds of local, high-quality, and qualified energy installers. The company uses its proprietary technology to analyze the potential of any home and finds the best price and installer for customers based on an automatic bidding process between available installers.

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