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Edited Transcript of GES.CO earnings conference call or presentation 30-Mar-20 1:00pm GMT

Full Year 2019 Athena Investments A/S Earnings Call

Copenhagen Apr 2, 2020 (Thomson StreetEvents) — Edited Transcript of Athena Investments A/S earnings conference call or presentation Monday, March 30, 2020 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Alessandro Reitelli

Athena Investments A/S – CEO & Member of Management Board

* Francesco Vittori

Athena Investments A/S – CFO & Member of Management Board

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Presentation

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Operator [1]

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Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Athena Investments Full Year 2019 Results Conference Call. (Operator Instructions) At this time, I would like to turn the conference over to Mr. Alessandro Reitelli, Chief Executive Officer of Athena Investments. Please go ahead, sir.

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Alessandro Reitelli, Athena Investments A/S – CEO & Member of Management Board [2]

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Thank you very much. Good afternoon, everybody. Thanks for joining this call, especially considering the extraordinary situation that we are facing, all of us. I do hope that you, your staff, your team and your beloved ones are safe during this very strange period.

So thank you for joining. I — as usual, during this call, we present the annual results for 2019 for the year — to the previous year. So we made available a presentation, and I will use this presentation to walk you through the main items, the main topics as a broad introduction to this call. I will just say that ’19 was a year where as management and also with our guidance from the Board of Directors, we pursued the strategy that we have highlighted since 2000 — end of 2017, meaning the reshaping of the portfolio of assets that Athena owns. And we did quite a large transaction, as you have noticed from the various company announcement, and we sold in mid-summer of ’19 to Ardian and Glennmont about 70% of the portfolio of assets, both PV and wind that we owned. And after that, let’s say, we started quite a significant reorganization of our teams, which led to the layoffs of 19 people, end of ’19, beginning of 2020 formally.

So this is a new shape of Athena, and we are continuing in this direction. We have prepared the remaining assets, we are — we currently own for the disposal during this year, 2020, and these are the main items that impact the financial statements of 2019. And you will see — also thanks to our — Francesco, our CFO, who is coming back — who is coming later on explaining the all interesting details. We see if you take the Page 7 of the presentation, the PowerPoint presentation that we made available to you, you see the impacts summarizing this — in this slide, which basically discloses the guidance that I mentioned in accordance with the accounting rules and especially the IFRS 5 guidance to help you in comparing and maintaining the performance during ’19 with the year ’18, the previous year. We proposed this presentation of the P&L. I reminded that the pro forma 2019 is, of course, a pro rata pro forma, meaning that we own the assets until end of July ’19. The assets that, lets say, driving in the end months. And so this — the year ’19 in terms of what pro forma is a — it provides that year of — as you can see compared to ’19, ’18, you can compare the revenue and EBITDA. In the calendar of ’19, you also see the special items, which is what I mentioned before, the reorganization of our teams. So the costs of the restructuring of EUR 2.2 million. And then you see the impact of the sale of the asset, the preparation of the remaining assets to the sale, both in the lines and in the amount loss and impairment. So everything due to IFRS 5 becomes discontinued operations. And so then you have to bridge towards the fiscal year 2019 as you can read it in the financial statements published early today.

So these are the main items that I wanted to comment on. So the sales too, as in the end months, the restructuring and the preparation for the sale of the remaining assets. Regarding the future, I would only say that for the moment, of course, we are always considering new ventures. We have analyzed new opportunities, but considering also that the current situation and the huge uncertainty that was already the case last year, as I mentioned, especially in terms of private debt evolution, which was quite scary from our point of view. But with the COVID-19 today, the — nothing can be really forecasted. And of course, all potential M&A activities in terms of the acquisition, minority and majority states are completely free. And the process that we had entered into in terms of disposal of the remaining assets has been delayed. So I cannot really comment on much more than what I’m doing now, and you will have further information in the coming months once the situation will be a little bit more stabilized. But I cannot comment further for the moment.

I also wanted to remind you that ’19 was quite an extraordinary year in terms of dividends, since we distributed not only the ordinary dividend for 2018, but also an additional extraordinary dividend of EUR 50 million, which was distributed early December in ’19, which brings us to EUR 92 million dividend paid to our shareholders, which is quite a huge performance and quite a big discontinuity compared to the history, the whole history of our company.

Well, now after this introduction and after this highlight of the main topics, I’d like to, Francesco Vittori, our CFO, to comment further on the figures of our financial statements and briefly through the bridges that we presented in this presentation for you to better understand the different components of the results of 2019. So thank you, Francesco. Please, take the floor.

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Francesco Vittori, Athena Investments A/S – CFO & Member of Management Board [3]

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Thanks, Alessandro. Yes, we’ve included in the presentation some additional slides there, just to simplify the understanding of the financial statement for 2019, which was impacted by the reversification based on the IFRS 5. Particular, Slide 9 of the presentation, where the bridge from — for the net result of 2018 to the net result of 2019 for the group. You see that in 2018, we had basically a net profit of EUR 4.9 million, which decreased in a loss of EUR 46.8 million in 2019. The decrease in net result at consolidated level is mainly for — from one side, the continuing operation, which were affected basically from mainly the special items. So basically, the cost for the restructuring mentioned at the — by the summary before. But in particular, by the performance of the discontinued operations.

So Slide 10 is a focus on the net result from discontinued operations. 2018, the — our wind and solar portfolio contributed positively to our results for EUR 11.5 million, starting from the results of 2018. During 2019, we have a lower operating result, mainly due to the change in perimeter occurred in July. So basically, the operating result decreased due to the deconsolidation of the 70% of our portfolio in the last 5 months of the term. Additionally, we have the capital loss of EUR 33.5 million accounted in July. And the last 2 item of the bridge is basically the impairment test and the application of the IFRS 5 on the remaining portfolio to align the value of the solar and wind. So our wind farm has wholesale up — below where — a little less between the book value and the price.

Regarding the Athena’s acquisition, Slide 11. It’s very, I think, easy to understand that the increase in the net financial position, increase and in depth in the net financial position is to be positive for EUR 44 million compared to a net financial position negative in 2018 of EUR 71.3 million is totally because of the consolidation of the wind and solar assets. At the same time, we have decrease in the cash basically because of the net between the [cash in] of the proceeds from Ardian and Glennmont of approximately EUR 70 million. And the dividend, this is a bit — while our shareholders in 2019 for EUR 92 million. Additionally, we have EUR 11 million of escrow account positive in net financial position, which is the remaining part of the price collected by — from Ardian and Glennmont, deposited in an escrow as a guarantee for the obligation based on the FDA signed on July 2019.

So I have no additional comments on the actual 2019. Regarding the outlook, as Alessandro said before, so Page 13 of our presentation. Today, we present an outlook, let me say, it’s steady state outlook. So without additional business or new business in — for 2020. So basically, the EBITDA as a net result, which is negative for — in a range of EUR 3 million and EUR 4 million is the level — the new level of these G&A costs of Athena after the restructuring progress approved in 2019. So the — and the decrease is due to the cost saving after the restructuring costs.

And for the net financial position, the improved — the improvement of the net financial position is mainly due to the potential closing of the transaction still in progress on the remaining portfolio.

So that’s all for — from my side. So I take the floor to Alessandro just for the final comments.

Thank you.

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Alessandro Reitelli, Athena Investments A/S – CEO & Member of Management Board [4]

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Thank you, Francesco. I don’t have much to comment on in addition to what you’ve said. And yes, you also — you and I did potential cost saving during the next year of 2020 and further on. In terms of G&A, today, the team is really very, very small. And so you can expect that we will save compared to ’19 and previous years at least EUR 2 million per year in terms of G&A spend. So that’s the last point worth mentioning.

At the end of the presentation, you see the composition of the existing portfolio with our new projects in Sardinia, accounting for 45 megawatts, fully-owned, and the dozen of small PV projects accounted for 12 megawatts approximately in the south of Italy, which are both, this — we will see portfolio technologies, let’s say, both in a M&A process with identified counterparts, and that’s why we foresee the completion of this — of the potential transactions during 2020.

I’m finished with the presentation, and I’m now at your disposal for any clarification or questions you might have. Thank you.

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Operator [5]

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(Operator Instructions) Mr. Reitelli, Mr. Vittori, at this time, there are no questions registered, gentlemen.

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Alessandro Reitelli, Athena Investments A/S – CEO & Member of Management Board [6]

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All right, and thank you. I believe the presentation was quite self-explanatory and everything is pretty clear for our attendees. So thank you, again, for joining, and I look forward to new communication on the new ventures of Athena and I do wish you all the best for the months that are ahead and stay safe. Thank you very much.

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Francesco Vittori, Athena Investments A/S – CFO & Member of Management Board [7]

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Thank you.

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Operator [8]

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Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephone.

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