NHOA Masterplan10x and Strategic Ambitions €230 million new financial resources contemplated
| Jul 23, 2021
| Jul 23, 2021
Coupling the Storage and eMobility technology play with the ambition to own and operate the preferred EV Fast Charging network of Stellantis
Paris, 23 July 2021 – NHOA's Chief Executive Officer, Carlalberto Guglielminotti, presented to the Board of Directors the outcome of a comprehensive strategic review of NHOA, started by the management after the signing of the agreement between the new majority shareholder TCC (TWSE: 1101) and ENGIE, aimed at updating short and long-term objectives and setting a layout to guide future growth and development in the context of the new horizons ahead with TCC.
NHOA's chairman, Mr. Nelson Chang stated that "The recent natural catastrophes of massive floods in Western Europe and central China and the scorching wildfires in Northern America clearly demonstrate that global warming is a real threat to humanity's survival. NHOA sees the urgency and will be fully engaged in helping our world decarbonise to reduce such threat of climate change."
The outcome of such strategic review resulted in new short-term targets and long-term outlook, namely " Masterplan10x" and new strategic ambitions of NHOA (" Strategic Ambitions") prepared by the Executive Committee of NHOA and unanimously approved by the Board of Directors.
In this context, NHOA has already presented in April 2021 the new simplified operating model, structured around two Global Business Lines (" GBL"):
Mr. Guglielminotti presented the Masterplan 10x and the Strategic Ambitions as a way to enhance the growth of the company by 10x by 2025.
More specifically, the Masterplan 10x has the ambition to:
In addition, NHOA announces, following the signature of a Memorandum of Understanding with Free2Move eSolutions and Stellantis, the creation of a new Global Business Line named " Atlante". The Atlante Project is timely in the context of the adoption by the European Commission, on July 14 2021, of the Fit for 55 package whose aims are, among others, having 100% zero-emission cars registered as of 2035 and installing charging and fueling points at regular intervals on major highways: every 60 kilometres for electric charging and every 150 kilometres for hydrogen refueling.Through the Atlante GBL, NHOA has the Strategic Ambitions to own and operate a fastcharging network for electric vehicles in Southern Europe, that, as announced during the Stellantis EV Day 2021 on July 8, 2021, will become the preferred fastcharging network of Stellantis and its customers. Furthermore, in due course when the opportunity avails, GBL Atlante plans to deploy its fastcharging network also in Taiwan and other selected Asian countries, and along with GBL eMobility it has the ambition, as announced during the Stellantis EV Day 2021 on July 8, 2021, to mimic its business model in the North American market.
NHOA's management expects that the strengthening of the capital structure of the company in the context of the Masterplan 10x and the initial financing of the Strategic Ambitions will entail over 230 million euro of new financial resources.
As of today, thanks to the support TCC, NHOA has approved and secured 50 million dollar credit lines and is further negotiating with multiple financial institutions to secure up to additional 60 million euro facilities, totaling over 100 million euro new credit lines (the " New Financing").
In addition, c.130 million euro rights issue is expected be launched after the completion of the simplified tender offer expected to take place in September (the " Potential Capital Increase"). TCC will, as majority shareholder and subject to internal and regulatory approvals, subscribe for its proportion of its entitlement and, if necessary, such amount to achieve a successful Potential Capital Increase.
Masterplan10x Short-Term Financial Targets and Long Term Outlook
|REVENUES TARGET AND LONG-TERM OUTLOOK||TARGET EBITDA MARGIN|
|2021||€ 26 to €40 million , depending on eMobility ramp-up and storage supply chain delivery schedules||N.A.|
|2022||€ 100 (10x 2020 revenues) to €150 million , depending on eMobility ramp-up and storage projects execution schedule||EBITDA Breakeven|
|2025||over €600 million ,representing 150% of the 2025 management ambition announced in 2019||Low-double digit (over 10%)|
|2030||over 15x NHOA's 2022 revenues||Mid-double digit (c.15%)|
Strategic Ambitions: preliminary assumptions and potential impact on Masterplan 10x
|2021-2030||Additional capital expenditures over the 2021-2030 period ranging between 100 and 140 thousands euros per VGI fastcharger integrated with storage and solar||Assuming NHOA maintains control over AtlanteCo and consolidates its financial statements on a line by line (as defined below)|
|Installed Base Strategic Ambitions||Masterplan 10x potential impact|
|2022||c. 100 fastchargers installed in 50 different locations, expected to be secured with the support of Stellantis and its partners, plus 500+ fastcharging points at the Mirafiori Plant Vehicle-to-Grid project|
|2025||c. 5,000 fastchargers installedin over 1,500 different locations , of which c. 300 in microgrid configuration (coupled with solar panels, storage systems, and additional space for 10MW storage system)||- over €100m additional revenues potential|
|2030||Over 35,000 fastchargers installed in c. 9,000 locations , representing 15% market share in Southern Europe||- 2x 2030 revenues targeted by the Masterplan 10x|
Masterplan10x: multiplying by 10 key performance indicators and industrial results
Masterplan10x is a plan that NHOA's management has put together with a view to enhance NHOA's growth by 10 by 2025. To realize this plan, there are key performance indicators and industrial results NHOA will need to multiply by 10:
Strategic Ambitions: ATLANTE as cornerstone
Atlante is at the center stage of NHOA's Strategic Ambitions: which represent the structural transformation of Engie EPS from a pure technology player to NHOA, an infrastructure developer, owner and operator that fully leverages on a complete product portfolio and vertically integrated technology in both storage and eMobility.
The Southern European public fastcharging market, namely Italy, France, Spain and Portugal, is still nascent with rapid growth expected towards 2030. Around 90% of 2030 Southern European on-the-go fastcharging network is yet to be built and developed and this constitutes a great potential business opportunity.
In particular, according to the analysis carried out by the GBL eMobility with the support of McKinsey & Co: (i) the battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) penetration in Southern Europe is expected to grow 26 times to 13 million BEVs by 2030, reaching 3 million by 2025, and (ii) the on-the-go fast charging demand is expected to grow 46 times to 9 TWh by 2030, and up to 1.9 TWh by 2025. Charging System Operators and Charging Point Operators will take center stage in this market, and the role of owner and operator would represent the most attractive long-term opportunity in public fast charging market.
Given the potential size of this market, GBL Atlante has the ambition of creating, over the next 10 years, one of the largest Southern European vehicle-grid-integrated (" VGI") fastcharging network, to cater for the demands of the varied customers of Stellantis (the " Atlante Network"), with the ambition to develop, in line with what was announced by Stellantis at the EV Day 2021 held on July 8, 2021:
All details about the Atlante Network perimeter and the Strategic Ambitions developed with the support of McKinsey & Co, are described in the dedicated Press Release issued on the date hereof ( LINK ).
In addition, NHOA will leverage on the 1,500 sites to be developed in Phase 1 to target, by 2025, 10 times the whole microgrid installed-base commissioned between 2015 and 2021, i.e. 30 microgrids. Therefore, by 2025 approx. 300 microgrids, representing 20% of the 1,500 locations in which fastchargers will be installed, will be equipped with solar power and storage. This technical configuration will constitute real microgrids delivering not only Vehicle-to-Grid services, but also behind-the-meter and business continuity services to Commercial & Industrial customers. In addition, NHOA is planning to secure the installation of up to 10MW of storage power for each of such microgrids, embedding the 300 microgrids with the potential of up to 3GW of storage services, that will constitute one of the largest Virtual-Power Plant ever developed thanks to the NHOA innovative PROPHET Energy Management System (" Microgrid Setup").
The strengthening of the capital structure of NHOA in the context of the Masterplan 10x and the initial financing of the Strategic Ambitions will require approx. €130 million that are expected to be funded with the Potential Capital Increase in context of which TCC will, as majority shareholder and subject to internal and regulatory approvals, subscribe for its proportion of its entitlement and, if necessary, such amount to achieve a successful Potential Capital Increase.
In this respect, following completion of the tender offer, NHOA is planning to convene an Extraordinary General Meeting to consider, resolve, and approve the Potential Capital Increase. NHOA intends to appoint Société Générale to act as Sole Global Coordinator for the Potential Capital Increase.
Use of proceeds of the Potential Capital Increase will serve (i) the re-capitalization of NHOA, plus (ii) funding the first phase of GBL Atlante's capital expenditures and the related Strategic Ambitions. The progress of the Strategic Ambitions will depend on the successful execution of the Potential Capital Increase.
Indeed, the development of the Atlante Network would require significant additional resources for NHOA, and the deployment of material capital expenditures. In this respect, NHOA's Board of Directors requested the management to prepare a detailed business and funding plan for GBL Atlante before the Potential Capital Increase.
At this stage, current analysis and preliminary assumptions of NHOA's management are as follows:
Execution strictly monitored with quarterly Trading and Operational Updates
The new strategy implies a high level of execution risk. For this reason, NHOA is planning to release regularly a "Trading and Operational Update" containing a series of performance indicators that will transparently outline the level of execution of the Masterplan10x and Strategic Ambitions.
The first Trading and Operational Update will be released before the Potential Capital Increase, and then regularly on quarterly basis.
Quarterly performance indicators (unaudited) will be set for:
NHOA Masterplan10x and Strategic Ambitions €230 million new financial resources contemplated