DJ Waga Energy: Strategy update
Waga Energy Waga Energy: Strategy update 08-Feb-2024 / 07:15 CET/CEST Dissemination of a French Regulatory News, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. =---------------------------------------------------------------------------------------------------------------------- Strategy update -- Commercial successes and international acceleration in a context of strong global demand for Renewable Natural Gas (RNG) - Guidance for 2026 confirmed and profitability targeted in fiscal 2025 Strategic priorities for 2024-2026: -- Step up the Group's development in Europe and North America -- Kick-start selective deployment in other regions with strong potential -- Increase the industrial production capacity of WAGABOX® units -- Maintain the high level of operational excellence and profitability of operating units -- Accelerate the pace of assembly and installation for WAGABOX® units under construction -- Consolidate the Group's technological edge Financial outlook for 2024-2026: -- Backed by a substantial pipeline and nearly EUR100 million in annual contractual and recurring revenue[1], Waga Energy confirms its guidance for 2026: - Revenue of EUR200 million - Installed capacity of 4 TWh per year (13,648,000 MMBtu)[2] - Annual contractual and recurring revenue in excess of EUR400 million - Installed capacity to avoid emissions of 660,000 tons of eqCO2 per year -- Investment plan bolstered to help accelerate worldwide expansion -- Group break-even point (EBITDA) achieved in fiscal 2025 with growth momentum maintained. Waga Energy (EPA: WAGA), a global expert in the production of Renewable Natural Gas (RNG) from landfills, today holds a Capital Markets Day with the management team presenting the Group's strategic ambitions out to 2024-2026. This event will serve as an opportunity to review the Group's recent progress in business and operations as well as specifying the resources deployed to achieve its guidance for 2026 and support its future development. Mathieu Lefebvre, Guénaël Prince and Nicolas Paget, co-founders of Waga Energy, commented: "Since its founding, Waga Energy has committed to the fight against climate change, developing and providing its partners with innovative industrial solutions that focus on the recovery and upgrading of landfill gas. Landfills are a major source of methane emissions, a fast-growing and powerful greenhouse gases, accounting for 40% of global warming[3]. Converting these emissions into Renewable Natural Gas is one of the most effective ways to mitigate short-term climate change, while producing a renewable, local energy that can substitute fossil fuels. We achieved some major milestones, just over two years after our IPO: we doubled the number of operational WAGABOX® units and tripled our annual revenue, while also tripling annual contractual and recurring revenue and CO2 emissions avoided. Building on the trust of our partners, customers and shareholders, the Group has transformed into a leading player in the production of RNG from landfills. Waga Energy is now stepping up its international industrial, commercial and operational development on a global scale. All our teams have a clearly defined ambition for 2026: to cement the Group's position in France and accelerate growth across Europe and North America, where we have already secured major contracts. We are also ready to grasp new opportunities in regions with high demand for RNG, while securing our capabilities to deploy WAGABOX® units, ensuring their continued operation, and enhancing our technology solutions. Thanks to a growing project portfolio and expanding pipeline, we are thrilled to present our strategic ambitions to our shareholders and stakeholders today." Our ambitions for 2026 reflect the Group's determination to elevate its global presence while contributing to shaping a circular, resilient and sustainable economy for local communities. It will be based on several strategic drivers: -- A strong and sustainable footprint in North America Established in Canada since 2021, the Group is now stepping up its presence in the United States, where 2,700 landfills represent a huge source of methane emissions with energy recovery potential of more than 100 TWh per year (341,215,000 MMBtu)[4]. Multiple commercial successes were achieved with 7 signed projects: - in 2022 with Steuben County (New York State, US); - in 2023 with Casella Waste Systems (US) for three projects, with Scott County (Davenport, Iowa, US), Chester County (Narvon, Pennsylvania, US), and with Decatur Hills Landfill (Greensburg, Indiana, US). Waga Energy has also entered exclusive negotiations for additional projects with potential installed capacity in excess of 1 TWh per year (3,412,000 MMBtu). In addition, Waga Energy continues to execute its plan in Canada, where two of the four secured projects were commissioned in recent months: - in May 2023 with Enercycle and Énergir (Saint-Étienne-des-Grés, Québec Province, Canada); - in December 2023 with Matrec-GFL, a division of GFL Environmental Inc (Chicoutimi, Québec Province, Canada). -- Continued expansion in Europe, second priority region In addition to its strengthened portfolio in France, with 23 projects in operation or under construction, Waga Energy is ramping up its development in the Iberian Peninsula, where the Group already operates one production unit, and in the United Kingdom and Italy which are the other priority markets. -- Going forward, targeted expansion in high-demand countries The Group is also considering other markets with high demand for landfill gas recovery solutions, and favorable regulatory and/or economic conditions. Negotiations are ongoing with landfill operators in Brazil and Mexico, and some projects have already entered an exclusive negotiation stage. São Paulo alone has 32 landfills with energy potential of 2 to 3 TWh per year (6,824,000 to 10,236,000 MMBtu). -- Increasing production capacity for WAGABOX® units Waga Energy has developed a complete range of units that can be deployed in most landfills in a standardized, modular way. To support business momentum, the Group has forged closer relationships with some long-standing suppliers, all the while diversifying its overall supply. Operational efficiency is driven by streamlined procedures, quality management, and anticipating critical component supply, and supplemented by continuous cost control. The Group aims to double its production capacity to be able to commission 24 WAGABOX® units a year by 2026. -- Continuing a portfolio of high-value projects Waga Energy boasts a portfolio of high-quality projects, delivering a high-value asset due to their characteristics: best-in-class operator partners and customers, attractive and fully secure Internal Rate of Return (IRR), reusable WAGABOX® units long-term endorsed by 10-25-year gas rights purchase contracts and 10-20-year offtake RNG sales contracts which are recognized for their quality and can be financed with high debt leverage. The indicators below demonstrate the portfolio's high value: - At end-2023, annual contractual and recurring revenue totaled approximately EUR100 million; - Estimated total annual capacity for projects in phase 3 of the pipeline[5] is around 2.7 TWh per year (9,213,000 MMBtu); - Estimated total annual capacity for projects in phase 2 of the pipeline[6] is around 4.3 TWh per year (14,672,000 MMBtu); - 11 of the 14 units in operation for over 12 months have a project EBITDA margin[7] between 30% and 65% (versus a guidance range of 30% to 50% at the time of the IPO); - average debt leverage for projects with finalized long-term financing is approximately 80%; - the average residual term of RNG sales contracts for units in operation is 12.2 years[8]; - the average residual term of biogas purchase contracts for units in operation or under construction is 17.2 years[9]. -- Constantly innovating to sustain a technological edge On top of securing international supplies and logistics flows, the Group actively conducts R&D. On the one hand, this involves upgrading the current range of WAGABOX® units with optimizations and innovative new technology add-ons, and on the other, preparing future units for the special features of the Group's target markets. CO2 recovery, RNG purification and liquefaction are some of the R&D department priorities. Tapping into its many talents, the Group seeks to stay at the forefront of innovation for the benefit of its customers, while reducing the environmental footprint of its facilities. -- Championing global training and local hires Considering the Group's globalized vision and buoyant growth, from day one, Waga Energy based its HR policy on four pillars: -- a local foothold to ensure customer proximity and in-depth understanding of grassroots needs; -- a global organization to share best practice and promote the Group's mindset; -- first-class specialization and expertise among employees; -- a culture of loyal teams. Drawing on its strong appeal to recruit the talents needed for growth, Waga Energy has reorganized to share know-how with new hires. -- Actively coordinating Waga Energy's CSR approach Waga Energy's corporate culture is founded on strong principles of responsibility, inspired by best practice in Environmental, Social and Governance (ESG). In 2023, the Group published a ESG & Sustainability Report, established a CSR Committee reporting directly to the Executive Committee, and conducted its first-ever carbon assessment (scopes 1 & 2). In January 2024, the EthiFinance rating agency awarded Waga Energy a score of 81/100 for its "advanced" non-financial performance, up 16 points from 2023 and 31 points above average for companies in its sector[10].
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February 08, 2024 01:15 ET (06:15 GMT)
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