Financial|Press

|Sep 24, 2020

First Half Results as of 30 june 2020

  • Revenues and Other Income up 89%
  • Pipeline up 130% with more than $130 million of contracts secured
  • Launch of the largest V2G pilot project in the world up to 25MW and 700 EVs together with FCA and Terna
  • The distribution of the easyWallbox started in 19 European countries for Jeep 4xe and Fiat 500e, and production is ramping up towards the target of 50,000 units per year
  • ENGIE EPS acknowledges the decision of the ENGIE Group to assess strategic options for ENGIE EPS, including the possible divestment of its stake in the Company. The three major energy storage projects in the USA, Guam (300MWh), Hawaii (240MWh) and New England (50MWh), will continue to be developed jointly by both companies. Should ENGIE decide to divest its stake following its strategic review, ENGIE has reaffirmed its continuous financial support until a potential transaction is closed. For the future, both companies will continue jointly developing projects which are deemed mutually beneficial.

2020 FIRST HALF KEY FIGURES

Revenues and Other Income amount to €5.0 million as of 30 June 2020, up 89% compared to 2019 First Half. This quasi 2x growth is mainly due to the successful developments within the Giga Storage (utility-scale storage and solar-plus-storage projects) and Industrial Solutions (microgrids and storage systems) Product Lines. Worth highlighting are, respectively, the progress in the construction of the Sol De Insurgentes solar-plus-storage project in Mexico, with commissioning expected in early 2021, the storage solution for the Leini power plant and the microgrids in California and Comoros, all three projects with expected commissioning by year-end. Construction schedules were partly affected by Covid-19 related logistic restrictions.

On the other hand, the Project Backlog as of today amounts to €23.8 million, down 30% compared to the Project Backlog communicated on 30 September 2019, due to progress in project execution. The timing of conversion into Backlog of the most mature portion of the Pipeline (with over $130 million of contracts secured but not yet executed due to customary permitting procedures and conditions precedent, as well as in the case of Guam the ongoing appeal) was partly affected by the situation relating to Covid-19.

Pipeline is up 130% over the same period, reaching €806 million. This Pipeline includes the project in Guam where ENGIE has been selected as successful bidder*i for the construction of two Solar- plus-300MWh Storage projects under a 20-year power purchase agreement by the Power Authority of Guam (GPA) and where ENGIE EPS is the exclusive storage solution provider. It also includes the 240MWh project in Hawaii where ENGIE has been selected in the final award list for the construction of one solar-plus-storage project under a 25-year power purchase agreement by Hawaii Electric Co. Furthermore, it includes a newly secured 50MWh project in New England.

* Under Challenge

Gross margin stands at 27% compared to 40% in 2019, mainly due to the higher commodity content of the iconic project in Mexico brought by ENGIE, which accounts for more than 51% of the First Half 2020 revenues.

Personnel costs increased by 19% reaching €3.7 million compared to €3.1 million in First Half 2019. Today ENGIE EPS has 110 employees, from 15 nationalities, 1/4 of which with a PhD or other post-graduate degree. The strengthening of the workforce is in line with its roadmap and mainly devoted to the execution of the projects in the USA.

R&D investments amounted to €1.9 million compared to €1.2 million in First Half 2019 and represent 38% of the consolidated revenues and other income, confirming the strong commitment towards R&D and innovation which is progressively addressed also towards the eMobility Product Line.

Other Operating Expenses increased by 36% amounting to €1.4 million, compared to €1 million in the first semester 2019, mainly because of time-phasing budget and extraordinary Covid-19 expenses.

EBITDA represents €4.4 million loss in the first semester 2020 compared to a €3.4 million loss in the first semester 2019, due to lower gross margins in Giga Storage Product Line, the increase in operating expenses and the extraordinary costs due to Covid-19, which more than offset the increase in revenues.

EBIT and Net Result as at 30 June 2020 stands, respectively, at €-6.5 million and €-6.5 million compared with €-6.7 million and €-6.2 for the previous year.

Net Financial Position at the end of the first semester 2020 decreased to €-17.8 million compared to €-8.1 million on 31 December 2019.

BACKLOG AND PIPELINE UPDATE
As update of the Pipeline and the Project Backlog, it is worth highlighting in the:

  • Giga Storage Product Line, with the ENGIE project award in Hawaii and Guam, as well as a new contract secured in New England, ENGIE EPS secured contracts for more than $130 million and over 500MWh to be online by 2023. With specific reference to the flagship project the island of Guam, the Guam’s Public Auditor is expected to issue within days its decision on the challenge brought by a competing bidder against the award to ENGIE of the Phase III Renewable Energy Project. ENGIE EPS is confident in a favorable decision, clearing the path for the project to approach execution. In Hawaii, following the selection of ENGIE in the final award group for the Stage 2 Variable Renewable Dispatchable Generation and Energy Storage projects, customary procedures are ongoing with respect to the finalization and approval of project documentation, in line with the announced timetable.
  • Industrial Solutions Product Line, ENGIE EPS is completing its first microgrid in California and is well positioned to address the increased grid reliability challenges in the region.
  • eMobility Product Line, ENGIE EPS kicked off delivery of the easyWallbox, setting the production capacity up to 50,000 units in the next 18 months, to cover 19 countries in Europe; the largest V2G pilot project in the world finally came to light on 14 September 2020, in partnership with FCA and Terna and in the presence of the EU Commissioner for Energy and the Italian Minister for Economic Development to highlight the importance of the project and the V2G technology in the European technology landscape.

Concerning the decision of the ENGIE Group to assess strategic options for ENGIE EPS, including the possible divestment of its stake in the Company, ENGIE has reaffirmed that the three major energy storage projects in the USA, representing more than $130 million in revenues in the coming years, will continue to be developed jointly by both companies. For the future, both companies will continue jointly developing projects which are deemed mutually beneficial.

Should ENGIE decide to divest its stake following its strategic review, ENGIE has reaffirmed its continuous financial support until a potential transaction is closed.

ENGIE EPS will continue to build on its know-how and commercial successes achieved over the last few years outside and within the ENGIE Group, and to continue to be a leading player in the Energy Storage and Electric Mobility markets.

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The investor conference call is scheduled on 25 September 2020 at 8:00am, dial-in and the
presentation will be available in the Investors Section of the corporate website.

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* Under Challenge

Attachments

First Half Results as of 30 june 2020

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