Neoen S.A.

Revenue was €503 million in 2022, up 51% year over year; adjusted EBITDA was €414 million, up 38%; adjusted net income was €48 million, up 19%; and electricity generation was close to 6 TWh, up 21%. In Q4, revenue grew 63% year over year. Capacity in operation or under construction reached 6.6 GW, up 21% versus end-2021, and secured portfolio capacity was 7.4 GW. Cash flow from operations was €457 million, investing cash flow was slightly more than €1 billion (€1.1 billion), cash balance ended at €623 million, gross debt was €3.5 billion, and net debt excluding positive non-recurring items was €2.9 billion. For 2023, management said the cash position is robust and there is no urgency around the planned capital increase, which still remains planned for 2023. They also said the 2025 roadmap remains intact at 10 GW in operation or under construction, with an additional €600 million of equity needed to complete the original plan and an additional €150 million tied to extra storage capacity on top of that.

Xavier Barbaro struck an upbeat but disciplined tone, saying Neoen has “grown up,” is on track for its 2025 targets, and is benefiting from a renewables market that is strong for environmental, economic, and strategic reasons. He emphasized that Neoen’s edge comes from combining solar, wind, storage, and energy management, while keeping strict operational, financial, and ESG discipline. On strategy, he repeatedly framed storage as a key differentiator and said Europe, Australia, and selected other markets offer strong growth opportunities.

Louis-Mathieu Perrin focused on the mechanics behind the year’s performance and the balance sheet. He said revenue growth was driven by new commissioned assets, early-generation revenue in Finland, strong storage results, and favorable pricing, while adjusted EBITDA of €414 million reflected the same factors plus lower farm-down gains versus 2021. He also noted the non-cash fair value adjustment of energy derivatives was €2.8 million positive in 2022 and explained why Neoen reports adjusted EBITDA; cash from operations was €457 million, investing cash flow was €1.1 billion, cash was €623 million, gross debt was €3.5 billion, and the average cost of project finance debt for assets in operation rose to 4% from 3.7%.

Analysts pressed management on 2023 merchant exposure, the gap between the company’s 2025 outlook and consensus, the timing of the planned equity raise, storage economics, and the rising dividend alongside higher CapEx. Management said merchant exposure is capped at 20% of solar and wind capacity excluding storage, that lower forward prices versus late 2022 are already reflected in guidance, and that French assets will benefit from 18 months of merchant pricing without a cap only for projects entering operation after early September 2022. On the capital plan, Xavier said the company still expects a second capital increase in 2023 but has no urgency because cash is strong; he also said storage can earn returns at least at the same target levels as renewables, while actual economics have often been better in Australia. For the dividend, he said the payout was consistent with prior commitments and has only a small cash impact because most of it was paid in shares.