• Group gross margin at 30.5% compared with 35.3% in H1 2022, purely driven by a shift in the business line mix towards Energy Storage Systems.
• Adjusted EBITDA of €21.1m (9.4% of revenue) vs. H1 2022 €37.3m (18.1% of revenue).
• Alfen maintains significant head room in its bank overdraft facility.
• Alfen updates its 2023 full-year revenue outlook from €540-600m to €490-520m driven by a lower EV charging revenue outlook due to destocking and challenging market conditions.
• Alfen reconfirms its mid-term financial objectives. In addition, Alfen quantifies its mid-term objective on its asset light business model: to keep its CAPEX below 5% of revenue.
ALMERE, THE NETHERLANDS - Alfen N.V. (AEX: ALFEN), a specialist in energy solutions for the future, to-day reports its condensed interim consolidated financial statements for the first half-year of 2023.
Marco Roeleveld, CEO of Alfen:
"Alfen has a robust business model at the heart of the energy transition that is uniquely diversified across business lines, countries and product segments. In 2023, we see Energy Storage Systems growing tremendously with Smart Grid Solutions starting to see a step change in growth. In a year with challenging market conditions for EV charging, our diversified portfolio of solutions is clearly paying off. Alfen's financial position continues to be strong and healthy at a time when other players in the EV Charging market are declaring insolvency or forced to raise capital. To illustrate this further, our cash (including bank overdraft) amounts to €35.2m (credit) at 30 June 2023. Given the current account overdraft facility of €101.5m, our total cash availability amounts to € 66.3m.
2023 is really the breakthrough year for energy storage for Alfen. Our first half year revenue grew more than sixfold compared to H1 2022, and our current backlog is over €170m of which more than half is expected to be executed in the second half of 2023. With our stationary and mobile battery solutions, we are well positioned for continued strong growth, underpinning our confidence that we can outperform the European market in 2023.
In Smart Grid Solutions, we see continued momentum with the grid operators and private networks businesses, resulting in 20% revenue growth. Grid operators announced substantially higher ambitions in their 2022 annual reports to roll-out substations until 2030. We expect a step change in growth in this business line into 2024. We are well prepared for this growth. We invested upfront in additional capacity to ensure we are not hampered by production capacity. The construction of our additional production & warehouse facility in Almere is advancing as planned (see photo below) and is on track to be operational Q1 2024.
In EV Charging, the destocking challenge continued through the first half, and we saw market challenges in the home segment in certain geographies, including countries such as the United Kingdom and Germany. Key drivers include the ending of the OZEV grant and KfW440 subsidy respectively. To stay ahead of these challenges, we have a clear operational focus on partnering with and managing our customers both at the country and customer level to drive growth. We have weekly meetings with customers to manage our joint plans and clarify where to invest and when in joint channel marketing efforts.
We are building on recent innovations such as solar charging, DC destination charging and Plug & Charge (ISO 15118) and continue to prioritise innovation as a way to add value for our customers. Despite these challenges we are seeing the first positive signs from destocking, with some customers beginning to order again after moving through their inventory. We are also seeing ongoing orders in the business and public segment, as you can witness in our new commercial wins. We observe continued strong growth in battery EVs registered in Europe in H1 2023 (+45%) that logically translates into charge point demand in the second half of 2023. We still expect the destocking to be over after the summer months and then turn into increased order intake. However, 2023 will be a transition year for EV Charging and even with an improvement in order intake after destocking, emerging market challenges will be present. We expect Q3 revenues to be in line with Q2 revenues. From Q4 and onwards we expect sequential increases in revenues compared to the preceding quarter.
The temporary lower volume in EV Charging also impacted our adjusted EBITDA margin: it decreased from 18.1% in H1 2022 to 9.4% in H1 2023. We reiterate that operational leverage is not developing as a linear line. Due to lower volumes, deleverage is also possible as we intentionally do not decrease the fixed cost base proportionally to revenue. In H1 2023, we continued to focus on the long-term, investing in our production, innovation and organisation capabilities to equip us for the step change in growth in our markets. Also, a lower gross margin than in H1 2022, purely driven by a different business line mix, contributed to a lower adjusted EBITDA margin percentage.
Based on our first half year performance and current revenue visibility, Alfen updates its 2023 full-year revenue outlook from €540-600m to €490-520m driven by lower EV charging revenue outlook due to destocking and challenging market conditions. Long-term, Alfen continues to anticipate positive market developments for all of its business lines, and we are confident about our strong market position. Therefore, Alfen reconfirms its mid-term financial objectives.
Diving deeper into one of these objectives; at our Capital Markets Day, we set the qualitative objective to maintain our asset-light business model. With this half-year update, we would like to provide further clarity by translating it into a quantitative objective: to keep CAPEX as % of revenue below 5%. This objective will be maintained in the mid-term (until 2025-2027)."
About Alfen
Netherlands-based Alfen is operating internationally in the heart of the energy transition, as a specialist in energy solutions for the future. With 85+ years history, Alfen has a unique combination of activities. Alfen designs, develops and produces smart grids, energy storage systems, and electric vehicle charging equipment and combines these in integrated solutions to address the electricity challenges of its clients. Alfen has a market leading position in the Netherlands and experiences fast international growth benefitting from its first mover advantage. For further information see Alfen's website at: www.alfen.com.
For enquiries, please contact:
Investor relations:
Mr. Dico van Dissel, Director IR Alfen, phone +31 (0) 36 549 34 00, email ir@alfen.com.
Hefbrugweg 28
1332 AP Almere, The Netherlands
Phone: +31 (0) 36 549 34 00
info@alfen.com / www.alfen.com
Notes to the press release
This is a public announcement by Alfen N.V. pursuant to section 17 of the European Market Abuse Regulation (596/2014). This public announcement does not constitute an offer, or any solicitation of any offer, to buy or subscribe for any securities in Alfen N.V. The reported data in this press release have not been audited.
Forward looking statements
This press release may include forward-looking statements. All statements other than statements of historical facts may be forward-looking statements. These forward-looking statements may be identified by the use of forward-looking terminology, including the terms such as guidance, expected, step up, announced, continued, incremental, on track, accelerating, ongoing, innovation, drives, growth, optimising, new, to develop, further, strengthening, implementing, well positioned, roll-out, expanding, improvements, promising, to offer, more, to be or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect Alfen's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to Alfen's business, results of operations, financial position, liquidity, prospects, growth or strategies. Forward-looking statements reflect the current views of Alfen and assumptions based on information currently available to Alfen. Forward-looking statements speak only as of the date they are made, and Alfen does not assume any obligation to update such statements, except as required by law.
Alfen's revenue outlook estimates are management estimates resulting from Alfen's pursuit of its strategy. Alfen can provide no assurances that the estimated future revenue will be realised and the actual revenue for 2023 could differ materially. The expected revenue has also been determined based on assumptions and estimates that Alfen considered reasonable at the date these were made. These estimates and assumptions are inherently uncertain and reflect management's views which are also based on its historic success of being assigned projects, which may materially differ from the success rates for any future projects. These estimates and assumptions may change as a result of uncertainties related to the economic, financial or competitive environment and as a result of future business decisions of Alfen or its clients, such as cancellations or delays, as well as the occurrence of certain other events.
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