Welcome to the Arise Q3 Report 2024. For the first part of the conference call, the participants will be in listen-only mode. During the question-and-answer session, participants are able to ask questions by dialing key five on their telephone keypad. Now, I will hand the conference over to the speakers: CEO Per-Erik Eriksson and CFO Markus Larsson. Please go ahead. Thank you very much. I will start with a brief intro on Arise. We were founded in 2007 and listed on Nasdaq in 2010. We are just about 70 employees located in five different countries. We have three different business segments, starting with production, our IPP business. We have today 172 MW installed, with an annual production budgeted to 430 GWh per year, located in SE3 and SE4 premium price areas, you could say. Our development business today is 8,100 MW. Since inception, we have divested some 1,500 MW. During the first nine months, we have grown the portfolio with some 1,200 MW during the year. Our services business solutions today, we have under management 2,000 MW, and under construction 380 MW. With that, I hand over to Markus. Thank you, Per-Erik, and hi everyone. The third quarter saw net sales increase to SEK 105 million, compared to SEK 96 million the same quarter last year. In the quarter, we had a positive impact from revenue recognition in Kölvallen of EUR 3 million, which we will get back to shortly. This obviously also trickles down to EBITDA and EBIT, which came in at SEK 55 million and SEK 33 million, respectively. Profit after tax totaled SEK 63 million, compared to SEK 35 million Q3 last year, and that represented SEK 1.55 per share. And that includes a positive impact from a recognition of deferred taxes, but still a very solid number. Operating cash flow was SEK 43 million, compared to a -SEK 47 million, and cash flow after investments amounted to - SEK 8 million, compared to -SEK 231. Our own production generated 66 GWh, with an average income of SEK 469 per megawatt-hour, which I will comment shortly. Looking into our segments, development posted a very strong EBITDA of SEK 43 million. As I mentioned, mostly impacted by this additional revenue recognition in Kölvallen due to the effect from the Pajkölen transaction on the CapEx in Kölvallen. The portfolio grew by 200 MW in total, and 155 MW were added to late-stage. Our own production delivered SEK 16 million in EBITDA. We saw slightly higher production with the inclusion of Lebo for the full quarter, but however, it was still very low wind speeds and significantly lower market prices than the same period last year, and as I said, SEK 469 realized price compared to SEK 718 the same quarter last year. Within solutions, we saw yet another quarter in line with the previous ones, with an EBITDA contribution of about SEK 3 million. Back to the production and the pricing, the left-hand side illustrates these very low market prices during the quarter. On average, that was around SEK 320 per megawatt-hour. This also illustrates the contribution from our hedges as our realized price significantly exceeds the average market price. On the right-hand side, these low market prices obviously also impact our LTM EBITDA, but nevertheless, it's still the 11th consecutive quarter where we are around or higher than the SEK 150 million mark on EBITDA. On the hedging side, we have actively decided not to hedge at these lower price levels. So far, our firm view is that the 2025 contracts have more potential on the upside than on the downside, and we will monitor this closely now when we enter into the winter season. Our development portfolio saw positive development in all markets, actually. We had continued very good progress in Finland with a number of projects entering into permitting phase. This also includes a few BESS projects in late stage. In total, the portfolio grew by 200 MW, up to 8.1 GW in total. The diversification also continues, which we're very pleased to see. With that, Per-Erik, I'll let you speak a bit about Pajkölen. Thank you, Markus. Some brief info on our recent transaction: Pajkölen project, a battery energy storage system project of 40 MW that we sold to Flower Infrastructure Technologies. We had closing actually this week where we received SEK 50 million, and we have the remainder of the total SEK 30 million to be paid when we have completed grid connection. On top of that, we have an earn-out of some SEK 15 million, which is linked to the prices for ancillary services during the first three years of the commissioning. So all in all, SEK 30 million plus an earn-out of SEK 15 million. On top of this, Pajkölen connects to the same substation as Kölvallen, which means that we will decrease CapEx for Kölvallen corresponding to approximately EUR 3 million, which in the end of the day will mean that we improve our earn-out to the same amount. So that's a very positive indirect consequence from this transaction as well. Looking at this, I think we show evidence on our capability as a company to use our platform and our local market know-how, and also to be quick to realize values. So we are really happy and proud about this transaction. Looking at our project portfolio for BESS, we today have some 650 MW in the pipeline, standalone and co-located with projects, wind projects that we developed and developed by Arise. Located in Sweden, Finland, and the U.K., I would say roughly 1/3 for each country. And here, of course, we see some opportunities that we can do further similar transactions in the future. With that, we take the next page. Looking at the markets during the quarter, as Markus said, we are in a low-price environment. You can see on the graphs to the upper left the spot prices. The orange line is SE4, and the blue one is the system price. And you can see that we have been trading around some EUR 25-EUR 30 during the quarter. So quite low prices on spot. And also we have a number of occasions during this period when we had negative prices as well. Looking on the forward graph to the bottom left, you can see that we have a bit more stable prices during the year. We are trading for SE4 and the system price around EUR 40-EUR 50 at the moment, or during the quarter, I could say. Some comments to spot prices very much impacted by the pressure from solar power imports during the third quarter. We also had quite wet weather in the Nordics and also in Western Europe, building up some surplus in the hydrological balance. Quite low demand, but on the other hand, we've also seen improving capture rates during the quarter entering into the winter season. Looking at the forward markets, they've been fairly stable. We had a quite strong supply versus demand situation. Quite strong hydrological situation in the Nordics. I think we are at the moment around + 10 TWh in the hydrological balance. Fuel prices have stayed quite elevated. With that said, moving over to continental prices, which are decisively higher than the Nordic levels. If we compare, for instance, German 25 prices to what we see on Nord Pool, we are some EUR 40-EUR 50 per megawatt-hour higher prices in Germany. We are trading around EUR 90 for 25 prices in Germany, very much driven by the elevated gas prices, and the market is still very sensitive for potential supply disruptions. And looking at the continental market, we can see that we have a clear upside in the Nordics, especially if we see some colder winter weather now moving into the winter period, and also there are some potential, as we see it also, that the energy consumption will move upwards in continental Europe, which also would set some pressure on the upside for power prices. With that said, we move to the next slide. When we entered into 2024, we set an agenda target to accelerate projects to ready-to-build stage. We said that we should do at least one project sale in 2024 and have a big focus to continue to advancing early-stage projects to late-stage to come closer to transaction. We have a target to grow our pipeline in selected geographies, both through greenfield development, but also through acquisitions, and obviously to integrate and support acquired companies from the transactions we did in 2023. As always, given our history, we have a great focus on capital discipline. Looking at the nine months that passed, we have delivered, we think, on delivering project sale since we did Pajkölen recently. We have been able to advance some 330 MW during the first months from early to late-stage development. The pipeline, all in all, has increased by 1,200 MW, as said earlier. When it comes to integration to support the acquired companies, that is an ongoing work. We are focusing to be more efficient and make sure that we don't have silos in the organization when it comes to project development. So that's an area we are focusing on to improve. As one example, when it comes to capital discipline, we are remaining strong. I will come back to that later. We have a very strong financial position. And one thing to mention is that, for instance, we have an equity ratio around 56%, which is a fairly high level. So with that, we can move to the last slide, I think. Short-term outlook. We see some potential for improvements when it comes to project valuations, very much supported by the fact that we see now falling interest rates. And on top of that, in some markets, we also had a quite weak supply of projects, which together should improve the valuations of projects that we can deliver to the market. On top of this, we had some government decision the last week to decline a number of offshore projects, which means less new production versus what is expected by the market. And that will, as we believe, we will see an impact on forward prices. And definitely, this will have an impact on long-term price forecasts by different companies that analyze firms. And that as well, we believe, will have a positive impact on valuations of projects that actually can be taken to the market for sales, for instance, onshore wind. When it comes to power markets, we are now entering into the winter season, meaning high demand of power, which we believe will have a positive support for power prices to increase short-term. Demand is one thing, but also if we have colder weather now, and it's a very sensitive situation, and price gap is quite massive to continental Europe. We believe that if we see colder weather now, that we will come closer to German prices, which are, as said, on a much higher level. We have a bit of a bullish view on the short-term power prices. Looking at the near future, we think that we have a quite good business model being diversified. I think that it's proven to work well, especially when we had a quite challenging quarter. We still deliver a quite good positive result. We have a very strong financial position. We are neither a foreseller nor a buyer, and the fact that we have complementary revenue streams, we have the optionality to optimize value when it comes, for instance, to project sales, if we want to do it now or if we want to do it later on when we believe that the market looks better, so all in all, I think we are in a quite good position, and we have the means to continue our growth strategy. With that, I say thank you and leave the floor open for questions. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. Hanna Grimborg, [audio distortion]. Yeah, okay, thank you. So I have two questions. So first, I wondered if we could get more details on the outlook when it comes to early-stage projects going into late stage. So how much of your early-stage projects could potentially become late- stage during the next 12 months? And the other question is regarding hedging. So what price levels would you need to see for hedging to look more attractive? Yeah, I can start with the easiest one, which is the hedging part. We think that around we have production, as said, in SE3 and SE4. And we have a bit of target prices for SE4 around EUR 60 and SE3 around EUR 50, to give you some idea on which levels we are talking about. So we are not a massive distance from where we are right now, but that would mean that we would start doing price hedges. We wouldn't do everything in one step. But normally, we try to be around 30% when it comes to if we see decent pricing. Okay, so if we see those levels during the winter, you would probably enter hedges for 20? Yeah, we would start up to do it stepwise. We will not do everything at one time, but at least we would start to do some hedges, and I think it's realistic to see that we see these levels during the winter. Maybe on the early to late stage. I mean, that's hi, Hanna, by the way. That's obviously a tricky one, but I think it's fair to assume that we would kind of keep the pace that we've had this year so far in terms of advancing from early stage to late stage or potentially even at a higher rate. But it's difficult to give you any megawatt numbers. All right. Yeah, all right then. Thank you. Thanks. The next question comes from Örjan Rödén from Carnegie Investment Bank. Please go ahead. And congratulations on a good report. The first question relates to the battery storage. Do you foresee this to take place in your own parks or in other parks? And could you say anything about the timing between how you see 2025 versus 2026, for example, when it comes to the total portfolio of battery storage? Yeah. Yeah, when it comes to BESS projects, we are, of course, looking into our own wind farms as well as wind farms that we develop for others. And since we are active in the market, we have quite good knowledge on where there is capacity and where there are physical possibilities to install BESS. So we are basically all over the place looking into this as well. So when it comes to timing, we are at the moment, I can say, we are working with a few projects in parallel. And if things turn out well, it might very well be that we do more transactions in the short- term. But definitely, we expect to have in the coming two years, we expect to have a few more transactions on BESS. That's clear. And it has a quite big advantage when it comes to permitting process, for instance. If you take Pajkölen Kölvallen as an example, from start of project until transaction, that was just a bit more than one year. So that's quite a quick process. And during that process, we are securing grid connection. We are securing land and having all the permits in place. So quite interesting projects in terms of timing, but also I think it's a decent valuation of project as well. So we have a quite big hope that the 650 MW we have that will grow, but also that we will realize projects in the near future. Did I answer your question? Yeah. Can you also say anything about the timing for the projects you have named that is very close to be sold? I think about Finnåberget and Tormsdalen. Yes. Yeah, Tormsdalen, we'll start with Tormsdalen. We are in permitting process. You could say it's an appeal process ongoing. We expect to have that project finalized to permit during autumn 2025. With that said, we will basically have that project ready to build by end of 2025. If we manage to do a sales transaction or not, we'll see. We hope to have that transacted during 2025, and we believe that is realistic as well. Looking at Finnåberget, a bit similar situation, you could say, with the difference that the permit is in place, but we have a line concession ongoing. As we see it, we will have the line concession. It's just a matter of timing, and unfortunately, authorities are quite slow in handling these issues, but we expect to have that permitted in order line concession and legal force, basically the same timing as Tormsdalen. So we are preparing for transaction of Finnåberget as well for 2025. And then a couple of detailed questions from Markus. I believe the investments were a little bit higher than I expected in the quarter. Can you drill down a little bit what that was and if there is any impact of this going forward? Yeah. Sure, hi, Örjan. Yeah, the investments optically somewhat higher, obviously than you expected. And that's mostly driven by the grid CapEx for Pajkölen. And that's been booked in the quarter. It's been paid in October and then repaid at closing in November. So it's a kind of zero-sum game, but it makes the investment spike a bit in the quarter. Underlying kind of CapEx, sort of project DevEx is more like SEK 15 million-SEK 20 million. I also saw that your short-term debt increased and your long-term debt decreased. Can you explain a little bit what is behind this movement in your balance sheet? Sure. Yeah, that's just a consequence of the fact that the loans that we have connected to our production assets mature in July 2025. So just by that, it's by definition, it's less than 12 months to maturity. And that's why they are reclassified as short-term liabilities. But we are in discussions to prolong the duration of that. And as I think we mentioned in the report, we expect that to be in place in the next one or two quarters. [audio distortion] from my side today. Thank you, Örjan. The next question comes from Mattias Ehrenborg from Redeye. Please go ahead. Thank you. Hello, Per-Erik and Markus. Mattias here from Redeye. I was just wondering if you could shed some light on the revenue breakdown for the development segment apart from the EUR 3 million that you mentioned earlier related to the Kölvallen earn-out. Are there any effects coming into play here, or what does it look like? Sure, hi, Mattias. I kind of see what you're trying to reconcile. It's EUR 3 million from the kind of additional Kölvallen. Then you have the sort of monthly traditional, which I'm sure you're having at around EUR 500,000 for Kölvallen per month, 100-200 from Fasikan. And then we also have related to the Fasikan project. So we're actually responsible for kind of constructing the connection line to the project Fasikan, which is just a pass-through to the project company. So there is another SEK 9 million, I believe, on the top line, but also mirrored in the OpEx with no EBITDA effect, just a few pass-throughs to the customer. Okay, okay. That's very clear. Thank you for that. And also you mentioned in the report that Germany is an attractive market and that you're looking at various greenfield projects and also project rights. Are you looking to build an organization in the country, or what does sort of potential roadmap for you look like in Germany? Yeah, we are doing a network now to evaluate what to do if we are going to do something in Germany and how we will do it in such case. We have a guy working for us now to develop a business plan for Germany, and then we will see if we go for that or not. So we are still in evaluation mode, but quite soon, I think we will have a decision if we will go for Germany or not. And obviously, it's a quite interesting market. It's one of the most mature markets in Europe, but in Germany, they also have very strong commitments to add a lot of new renewable power production capacity. So they also have feed-in tariffs, which is quite secure. You have a bit secure the revenues in Germany, which is a bit different from the Nordic markets. So Germany is definitely interesting. And also culture-wise, it's quite close to the Nordics as well. So interesting market. I think beginning next year, we will have a decision what to do. Okay. Sounds interesting. Could you also just share some thoughts? I mean, what's your view of the market's attractiveness or something like that if you compare today to five years ago or three years ago? Which markets? Germany, you mean? Germany. Yeah, Germany. Okay, okay. Yeah, I mean, if you look back, they had a massive. I remember from 10 years ago when it happened in Germany. It was a massive build-out of both, especially solar PV. It happened quite rapidly in Germany and also on wind. So the market is a bit different in terms of, for instance, when it comes to wind power, it's more diversified in terms of smaller scale wind farms if you compare to Sweden. And the supply market is also a bit different in Germany. But there is really a strong push and strong political commitment to increase renewables in Germany from a quite high level. So we believe it will happen. And of course, you never know what happens in politics, but that will be part of the decision-making if we believe this will be the reality for a long time or if it's a big risk that there will be changes. But so far, it looks really interesting, I would say. Okay, thank you for that. Yeah, I could add also, Mattias, that looking at power prices, if you compare German prices and also U.K. prices, the Nordic prices, we are on a quite much higher level as well as a starting point. I mean, expanding on that, obviously, you haven't deployed your first project there yet, but from a profit level perspective from our eyes, is there anything you could say there comparing it to the Nordic market, perhaps? It's too early to say. Obviously, if you put in German prices in the financial models, the outcome will be a quite high valuation. But on the other hand, there is a busy market as well and a lot of competition. So it's too early to say that will be part of the analysis we are doing or what we could earn. And I think if we go for this, then we will present to the market as well what we are doing and what we expect as well. So that is to come if we go for this. Understood. Thank you very much. Thank you, Mattias. The next question comes from Kaleb Solomon from SEB. Please go ahead. Hi guys. Kaleb Solomon here from SEB. Congratulations on a good quarter. Just a few questions for me. First off, given that the time was very short from the point Pajkölen entered the late-stage portfolio until it was divested, can you tell us something about what to expect for the remaining battery projects in the late-stage portfolio? I mean, is it fair to assume it shouldn't take more than a couple of quarters, or will it be kind of more in line with historical averages? Yeah, as said, we are looking into a few opportunities in parallel now. So it might be that we succeed to do another transaction in the shorter term. But also, as said, that we are trying to optimize value as well. So it's a bit depending on what values we see in the market. And when it comes to battery storages, I would say that the market is a bit immature still when it comes to valuations. We have a strong belief that this market will grow, especially when we see not only ancillary services in the business model. There are other revenue streams in this as well, like trading, but also there are intraday trading. And when we see that, I believe that will be the business case in the future. And we will see a quite big development, a lot of development on technology as well. But answering your questions, I believe that we will see at least some transactions during next year. That's my best guess. If you're lucky, something can happen already this year. But I think a realistic approach is next year. Okay, thank you. And just another question on hedging. You said you think there's more risk on the upside than downside for 2025 contracts. But can you tell us anything about what's kind of been happening on that side in the past month? How far are you from the targeted levels, and are you expecting to sign new hedges in Q4? Yeah, I think one good thing now is that we have the flexibility to decide by ourselves what we think adds value and also do some analysis on risk and reward. But as said, we have some target levels around EUR 50 on SE3 and EUR 60 on SE4 to place the first hedges if that happens. With that said, we will monitor and analyze the market at that time as well. So it's not given that we do that if we have a strong belief that markets will peak during 2025. I think looking on fundamentals, I don't think we will have a super strong market in 2025. But I think we will have a better market in 2025 versus what we have seen recently because now we have been in a really low-price environment. So compared to 2024, we have expectations that 2025 will be better. Will it be fantastic? Probably not, but looking at that, that could also change rapidly if we see a very cold and dry winter, and then we have a totally different ballgame, and also, if you see that the industry will pick up consumption, especially in continental Europe, where it's quite low at the moment. Thank you, and just. Yeah. [audio distortion] Yes, you did. Thank you. And just a question on the impairment test you carried out during the quarter. It showed an excess value of EUR 70 million compared to the book value, and that's EUR 10 million higher than it was last year. Can you just split how much of that increase is kind of due to Lebo being included this year, and how much is a positive or negative revaluation of the remaining assets? Yeah, hi, Kaleb. I can't give a kind of exact split of the impairment test, but I think it's fair to say that most, vast majority of the increase is from Lebo. And then the other two parameters that impact is the lower discount rate, which is kind of somewhat offset by the price forecasts coming down a bit on the rest of the parts. Okay, thank you. And just the last question. The government said no to about 13 offshore wind projects, which roughly translates to 135 TWh. Can you tell us anything about your view on what that kind of does to long-term pricing curves and what, if any, impact you think it will have? I'd say it's very difficult to quantify the impact, but obviously, it will have a quite big impact on all the price forecasts prepared by different analysts. So I think this will push valuations up quite much, especially on what's available in the market that is basically onshore wind and solar in the Nordics, especially Sweden and Finland. So I think it's difficult to say how much, but it will be a material uplift, I think. Okay, that's all from me. Thank you for answering my questions. Thank you, Kaleb. There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments. Yeah, question from Roald at Clarksons. Can you give some color on timing of Pajkölen Kölvallen revenue recognition? And broadly speaking, I think you could expect that to follow the same kind of pattern as for solar wind farms where of the SEK 15 million that's expected when the grid connection is in place, maybe we take off some contingency buffer. Typically, historically, that's been around 30%, and then we will recognize the earn-out as revenue for the months up till the connection date. So maybe we would expect SEK 1 million-SEK 2 million per month as long as it goes according to plan. Second question from Roald. I think we've answered that. With the Swedish government denying a significant number of Baltic Sea offshore wind developments, do you think this can spark greater interest onshore wind to cover some of the shortfall? I think that's a pretty firm yes on that. Yeah. From Erik, DNB Markets, question on the preferred refinancing option for our operational assets and whether the debt related to Lebo also is short-term and likely refinanced together with the other debt tied to operational assets. Without commenting in detail on the refinancing process, first of all, yes, Lebo is included in that package. Our expectation is to prolong the duration and maturity for that. That's about it in terms of comments on the refinance. With that, Erik, I think we've gone through all the questions. Maybe some closing remarks from you? Yeah, I can just conclude that we are happy to have been able to deliver another quite solid quarter, and we look forward to finalize the last quarter of 2024. We hope and believe that 2024 will be another good year for the company. So we are pleased for that. So thank you all for listening. See you next quarter. Thank you.