Elmera Group ASA (ELMRA) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Elmera Group's Capital Markets Day in 2024. My name is Morten Opdal, Head of Investor Relations at Elmera Group and before we begin the presentations, I will give you a brief introduction to today's agenda and the presenters. First off, our CEO, Rolf Barmen, will give you an update on the state of the union before we move on to a section on each of our 3 core segments. Starting off with the Consumer segment, followed by the Business segment and then the Nordic segment before we have a short 10-minute break. After that, we will move on to a section of the group's Power Trading activities before our group CFO will present our financial outlook. Finally, we will wrap it up with a Q&A session. And for those of you following the event online, we encourage you to submit your questions during the presentation as there is some delay on the broadcast. We expect that the event will run for about 2 hours' time. And with that short introduction, I'd like to leave the floor to the group CEO, Rolf Barmen for his State of the Union presentation. Thank you.

Thank you very much, Morten. Good morning, everyone. It is a great pleasure to welcome you all here and also out in the cyber space, 2 years since our last Capital Market Day. And it is really a great pleasure to see how we have been able to develop the group's business area since then. The group now consists of 4 electricity retailers and a number of fully owned subsidiaries and a capital joint venture all supporting the group's purpose to create the most attractive electricity retailers in the Nordics. During the past 2 years, we have worked hard on developing our core business, our electricity retail companies, both in the consumer and in the business segment. The business models across the brands are now significantly more robust than before as we have succeeded in taking off risk connected to fixed price products in Sweden and Finland and to variable contracts here in Norway. The way product management resources across the group have changed our value propositions to be fit for a more volatile elspot price environment has been really impressive and so has the sales management ability to execute on sales of new products and services accordingly. I'd also like to honor the group's retailers for their successful work on their respective brand positioning, which is acknowledged in service, both in Norway and abroad. There is no doubt that volatile prices have set focus on electricity retailers in a way never before seen in Norway the last 2 years. So we have put a lot of efforts into work on compliance and transparency. Working on compliance and transparency embeds good cooperation between regulator, politicians, consumer authorities, our business units, our legal staff and our team working on regulatory and political issues. And I think that it is important that you all know that for more than 10 years, we have been a frontrunner when it comes to addressing regulatory issues. In the last couple of years, we have also been a frontrunner when it comes to discussing proactively solutions for the retail market, with the politicians and consumer authorities in Norway and in EU. On the back of this, we have introduced technology both to the Consumer segment and to the Business segment that enables customers to monitor and preparing for what we call lowest price energy consumption and this obviously enhance the retailers value propositions. There is no doubt that the role of the retailers and the retailers' position as owners of the customer relationship has strengthened during the past 2 years. In addition to serving the market with necessary functions like estimate consumption volume, do all the power purchasing, including financing of the daily power purchases of price hedging, do all the rating and billing stuff, collect payment and maintain daily customer dialogue and communication, the retailers now also have the role of accelerating what we call the green shift by offering appropriate tech solutions. And from a compliance perspective, we have improved transparency when it comes to invoicing, and we have also conducted sales procedures that not only comply with new legislation but also exceed these requirements. All these efforts play important roles to support that Fjordkraft has maintained the position as the largest player in Norway and also proves Norway positive trend with regard to the brand's reputation while Gudbrandsdal Energi upholds their long, long-term position as the retailer with the most satisfied customers in Norway. And not to forget that Nordic Green Energy has taken joint leaps when it comes to both customer satisfaction and brand recognition. And on that note, Nordic Green Energy is, as you know, the group's brand in Sweden and Finland. Going further, we will continue serving the consumer segment under this brand but we are now about to introducing Fjordkraft as a pan-Nordic brand in the business market, which then will be introduced to Finland and Sweden in addition to Norway. And this following the success with the cross-border product management that we have experienced the last couple of years. I have great expectations to further growth in all of our countries going forward, but particularly in Sweden and Finland where we besides introducing Fjordkraft as the B2B brand, both strengthen our sales resources, our sales capacity by increasing our number of sales representatives and also by improving our support systems by migrating all the employees and all the customers to the Elmera IT platform the coming year. You will learn more about the business units of their business models when Magnar, Roger and Per arrives on the stage after me. Our statement, the group's purpose, so to say, is to create the most attractive electricity retailers in the Nordics. And this purpose has followed us for many years now. Before we went abroad, it was in Norway. But no, it is Nordic, and we launched this purpose back in 2019. Along this, we have put in place several measures to support this mission also when it comes to establishing new companies and new business units in the group. It all started when we established Fjordkraft Mobil to improve the Fjordkraft brand's attractiveness, reducing churn. We did not only succeed in reducing churn, but we also showed that we were able to establish a profitable mobile service provider and the transaction with Telia proved the value of the asset in terms of market capitalization. Later on, we established Metzum as a joint venture with Rieber & Søn in Bergen, Metzum now being the largest supplier of cloud-based billing and rating software system to electricity retailers in Norway, with an annual recurring revenue of approximately NOK 50 million. And with the pipeline of new customers outside the Elmera Group, the next 12 months that is really promising. AllRate is now among, if not the largest supplier of billing and rating services to electricity retailers in Norway. And we have continuously developed our alliance concept, Kraftalliansen alone comprising a 27 small- and medium-sized electricity retailers, mainly parts of municipality-owned vertically integrated energy companies. The services now include power purchase management, app services and other related services. In total, these -- in total, the retailers in Kraftalliansen serve around 200,000 customers. And the power management in terms of consumption, production and licensing power comprise around 4 terawatt hour a year. Together, these 2 business units, AllRate and Kraftalliansen covers a highly interesting market, consisting of small- and medium-sized vertically integrated energy companies that are in demand of services related to power management, billing and rating services relate both within the retail part of the value chain and the grid part of the value chain, particularly then when it comes to billing rating. Furthermore, we have established Steddi Payments, which is a company serving Fjordkraft with payment solutions that offer customers to level out their electricity bill in even amounts throughout the year. The number of customers on this service is minute for time being around 11,000, but we expect this to grow in the coming quarters. And we also expect this company to serve other retailers than Fjordkraft going forward. SunPool is a new company in our portfolio. A joint venture with Solcellespesialisten Norway's #1 when it comes to sale and installation of solar panels. We want to be prepared for meeting and increasing demand for local solar production when the government put adequate subsidies in place. And we are pretty they will do so. We will continue to develop all of these companies to further enhance our ability to deliver on the group's purpose, creating the most attractive electricity retailers in the Nordics but we also look upon these companies in an asset management perspective as we did with Fjordkraft Mobil. The energy transformation from fossil to renewable has been a game changer when it comes to volatility of the elspot prices and we have prepared for a while to take advantage of this volatility when it comes to power purchase management, particularly the way we estimate consumption day ahead and how we handle real-time consumption data during the same day. We are now laying the table for being able to leverage from being #1 when it comes to power purchasing in Norway with more than 21 terawatt hour a year and a management in the physical markets. The way we do this is to enter a new supply agreement with Statkraft as from the 1st of May 2025, which really allow us to be balancing responsible ourselves and to a significant larger extent now to be able to optimize our power purchasing price in the physical marketplace without being more risk exposed. To serve this purpose, we established a fully owned subsidiary, Elmera Energy, with around 25 highly skilled and experienced people. This implies that we will be a direct player on Nord Pool in addition to having bilateral purchasing agreements with Statkraft and other producers. Solfrid Fluge Andersen, will come back to this matter in her presentation. Aggregating the largest consumption volume in Norway puts us also in a pole position when it comes to being able to steer power consumption, particularly when it comes to smart charging, which is now fully operational. We have developed technologies also to manage consumption in terms of optimizing the grid rent. And we certainly believe that we can in the next 12 months, see multiple kind of value propositions, particularly in Consumer segment that reflect the need of balancing consumption to grid capacity. Speaking of technology, our IT department is crucial to the group's success both commercially, operationally and with respect to future proof cost efficiency. In total, we have, in fact, more than 75 full-time employees working on technology in the company to continuously improve our digital solutions and to comfort our daily business. To sum up my part of the presentation. All of our retailers have done a tremendous job when it comes to adapt the product portfolio to a more volatile environment, both commercially and financially. They are now well prepared for further growth. Sweden and Finland have in particular, succeeded in making the business profitable through the cross-border management in the business segment. And to further capitalize on this, we will launch Fjordkraft as the Pan-Nordic brand addressing the business in both Sweden, Finland and Norway. We have exported our application to the Consumer segment in Finland and Sweden by this, we have increased customer satisfaction significantly, and we have started the migration process for employees and customers to the Elmera IT platform finalized within 12 months. All of our service companies have developed well. They serve our group's purpose and are set for further growth. The energy transformation employs volatility and as the largest purchaser of electricity in Norway, we are in pole position to leverage from this when it comes to power trading in the physical marketplace. We have, therefore, established Elmera Energy to serve as our power management unit, serving all of our retailers with power purchase services. As the largest aggregator of consumer in Norway, we are in a pole position to steer consumption. And by that, optimize grid rent for the consumers and secure capacity for the grid owners. And smart charging is fully operational and new services are being launched continuously. Complexity increases, the focus on IT systems and digital competence has been prevailing in the group for the last 10 years, resulting in the fact that we now have a very robust IT structure, both in terms of systems and human resources. And by this, we are well prepared for further growth both in Norway, Sweden and Finland, the next couple of years. So now, it is a pleasure for me to invite Magnar, Roger and Per to give you more insight into our most important business units before Solfrid will introduce you to how we will operate in the power market going forward. After this short break that Morten mentioned, Henning will give you our financial perspectives. I think Solfrid will come after the break, yes, she will. So Solfrid and Henning will come after the break. And I will come back on the stage and give you a sum up, among others, I will talk a little bit about our key investment highlights. And then Morten will conduct the Q&A session. Thank you for now, and a warm welcome to Magnar.

Good morning. I'll give you an insight in how we now are developing our core business to take an even stronger position in the consumer markets. And I will give you a short update on Fjordkraft Mobil. The strong position with a market share of 24% gives us a position to take lead. Fjordkraft is the largest player in the Norwegian consumer markets and is supported by a strong national fighting brand, Gudbrandsdal Energi and the regional brand, TrøndelagKraft. So some highlights to start with. Fjordkraft, the largest and most well-known electricity retail brand, award-winning customer service in all consumer brands. Fjordkraft app rated 3rd in Europe. And we have a broad product range with value-added services and a leading loyalty program. The fighting brand, Gudbrandsdal Energi upholds a long-term position as the retailer with the most satisfied customers in Norway. And all the Consumer brands are certified Trygg strømhandel by DNV. And to go on, Gudbrandsdal Energi is the most awarded electricity retailer in Norway, having won the EPSI rating 5 times and the NKB, Norsk kundebarometer, 11 times including 2023, and that's based on customer satisfaction. And in Fjordkraft, we are voted Norway's best in the customer service and best in test in the energy category. Some key elements that have supported the growth. We continuously adapt our leading distribution power throughout the shifting environments. We have streamlined our electricity products and reduced market risk in core products, thus lower margin volatility. We have reduced number of products that simplifies the customer decision-making and increases sales. We have a strong focus on value propositions and services that are more uncorrelated with electricity consumption and involve robustness in net revenue and a continuous investment in improved app services puts us in a great position to develop and launch more attractive products and services as the customer demands evolve. The industry reputation is still very dependent on the price level. Gudbrandsdal Energi have had a top score position over years. And with the changes we have made in Fjordkraft over the last few years, we are seeing that we are changing our reputation faster than the industry and improving customer satisfaction is a key element in our strategy for future growth and profitability. And with a quarterly customer satisfaction day involving all business all across the group, we have managed to set focus on the customer pains that matters the most. And the results you can see on the slide here. Fjordkraft's NKB score has significantly higher positive change from 2022 to 2024 than the industry. And during 2023, we have also launched a wide range of new app services that have increased customer engagements and satisfaction, and we have an exciting road map going forward. We also are proud of the fact that we have award-winning customer services in all brands. So churn, market churn. How is that an advantage for our brands? The monthly supplier changes in Norway is at a historically low level in the last year. But our brands have reduced churn significantly more than the market from 2018 until 2023. And low churn is, of course, an advantage for Fjordkraft with a leading position as the most recognized brand in the business. In the Fjordkraft brand, we have also placed a greater focus on cash points. And we'll continue to work towards the most appealing customer loyalty program in the industry. And of course, a lower churn in combination with improved digital sales leads to lower sales commission cash spend. Cost leadership. That's a key element to extended profitability. Some of the actions that have been taken, we have removed services that consumers did not find relevant in the Fjordkraft loyalty program that saved costs and the successful cost program keeps us fit. An example is Fjordkraft customer service that have been a significant cost -- have been truly a significant cost reduction program and left 2023 with 26% fewer FTEs than the start of the year. This is supported by reduced complexity, improved -- and improved digital communication and better self-service solutions. At the same time, we have maintained the customer satisfaction towards our service centers. We also reduced traditional sales channels in favor of new and more cost-efficient sales channels. And of course, if we are focusing on the streamlining of the operation, we have or will introduce generative AI in the customer service, and that's planned to be -- to go live in 2024, and there are more areas to follow to increase operational efficiency and to support sales and communication. And we will optimize the digital sale processes, so we can also have an even higher conversion rate. So that will, of course, put us in a position to lower the sales commission. Digital leadership. We are prepared for future customer expectations. Our digital focus pays off, we see a significant improvement in our app ratings. [indiscernible] or the [indiscernible] Energy app has been a pioneer in developing new services over the last few years and analysis shows that active users reduced their consumption with 5 percentage points more than nonusers. And as I told you, the Fjordkraft app and we are quite proud of that, was in May, rated third in Europe. So we really try to develop the digital services that make a difference and empowering our customers to energy smartness. We change and develop our solution in tight cooperation with our customers. So we do a lot of testing. And that's what we call a win-win situation. In all brands, we are helping the customers to use electricity smarter and more -- in a more cost-efficient way. For example, through StrømSmart or StrømSmart+ launched in May last month in Fjordkraft and will be launched in TrøndelagKraft after summer. The Services represent a key element on focusing on reducing the total costs of the monthly invoice instead of the marginal markup per kilowatt hour. So that's what we call a win-win situation. We encourage the customers to save money and that enable us to increase robustness in net revenue. I also brought some examples that you can see. For those of you that are not yet customers, at the left, you can see the new personal analysis where you can compare to similar households in your area. And you can compare the average watt price based on your consumption pattern and also monitor the grid rent costs to avoid the next threshold price level. And this is just the beginning. Going forward, we will continue to expand and improve our personal users interface and consumption analysis. Then a brief insight on the business Fjordkraft Mobil. In the daily business, that is a natural part of Fjordkraft consumer, but it's reported in new growth initiatives. Fjordkraft Mobil have shown a significant improvement in the financial results. We operated as a small organization with only 3 FTEs and with sales, marketing and customer service fully and successfully integrated in Fjordkraft consumer and migration of the consumer base, as Rolf said, from Telenor to Telia network in 2023 has given us a significant improvement in the financial results. And we are definitely ready now for further growth. We see a positive growth in the customer base and a large potential for further growth. And we can already see that we have a higher satisfaction among customers that combines both mobile and electricity supply. So to sum it up, the consumer. Part of this, we have a proven track record for consumer growth and value creation through complex market environments. We are Norway's leading player in the Consumer segment with 3 strong and diverse brands. We have a robust portfolio with low market risk and unparalleled menu of value-added services. We have a successful execution of the cost program. And that will ensure us the competitiveness and improve our profitability going forward. And the digital solutions, we are definitely proud of, and that empower us to make smarter -- to help the customers to make smarter energy choices and enhancing customer satisfaction and definitely driving revenue growth. So that was my update. I'm looking forward to continue. And these positive developments together with my colleagues in Bergen in the other locations. So Roger, you're next.

Good morning, everyone. My name is Roger. I'm Head of Business, and I've been responsible for developing the business segment in Elmera Group for several years. As presented earlier, business are organized in a matrix. Results from B2B in Norway is reported in the business segment. B2B in Nordic Green Energy is reported in the Nordic segment. During my presentation, I will give you a closer look at the business segment, a status on B2B Nordic and how we will continue to expand our activities in B2B in the 3 Nordic countries. First, a brief look at the Business segment. Elmera has a strong position in B2B and our Norwegian brands holds about 22% market share. We handle more than 48,000 business customers and 127,000 deliveries. Fjordkraft have a leading brand position with 92% awareness and we are measured to offer the most attractive product range in the Business segment. The business customers have higher consumption and more complex products than B2C customers including risk management services, reporting services and GOOs. Our portfolio is highly diversified and more than 70% of our customers purchase several services from us. Therefore, we have a higher net revenue per delivery compared to the Consumer segment. The segment has developed positively for several years both in number of deliveries and profitability, growth made possible by focusing on sales capacity. With our brands, we operate the entire Business segment nationally and dedicated sales resources are targeting specific segments of the market, including SOHO, SMEs, large customers and public entities. We are targeting specific segments of the market with a wide range of products designed to meet their needs. We have sales offices at several locations in Norway, and we combine telemarketing, digital meetings and meetings at customer sites. Our brand position and product range, combined with our large distribution are our biggest competitive advantage. Going forward, we will continue to grow our distribution power, and we will make our product range even more attractive. The last 2 years have been challenging due to historically high spot prices in the winter 2022 followed by a falling market during 2023. Stable results during the last years show that our business model is robust and we have succeeded in increasing our core margin to mitigate effects from lower elspot prices. Counterparty risk has increased during this period and our strong focus on credit management has been important to minimize loss on receivables. The construction industry has dramatically reduced its activities. We mitigate the loss of deliveries in this part of the market and maintain our position until the market picks up again. We are satisfied that we have maintained our market share during challenging market conditions, where adjustment of terms and conditions, renegotiations and termination of customers with declining credit score have been necessary. In 2023, we did some organizational and operational changes in line with the group's cost program. A market with high prices and volatility demands a flexible operating model in customer service. To handle a high number of incoming calls to customer service, we implemented a new operating model with an external partner handling the first line. This gives the customers a fast response, and it gives us flexibility to operate periods with a high number of customer calls and maintain our service level at a lower cost. We have adopted robotization to handle written inquiries. This has reduced workload related to written increase with about 35% in customer service. We experienced that the purchase process has changed after COVID-19. Medium and large customers in a larger degree handle the purchase process through telephone and online meetings. We have reorganized the sales organization and strengthened sales through telemarketing and digital meetings. This provides a more efficient sales process and reduces acquisition costs in sales. The Nordic expansion opens a market potential 3x the size of the Norwegian B2B market. Cost leadership will be important to succeed and we now focus on optimizing the B2B activities in Norway. Several years with customer growth puts us in a good position to renegotiate unprofitable agreements and to reduce complexity related to nonstandardized customer requirements. In order to build a profitable and scalable Nordic expansion, we will standardize our services and avoid tailor-made solutions suitable for a small number of customers. We are optimizing our B2B activities in Norway and preparing Nordic expansion and net revenue growth. High prices and increasing volatility increase the customer -- the business customers' needs related to predictable power costs and solutions, helping them optimize their energy usage. In B2B, we offer services that allows customers to take control of their energy costs, energy consumption and to utilize new energy solutions. The most important tools for business customers to take control of their electricity costs is to take advantage of our risk-mitigating services. More than 78% of our volume is delivered with risk management services. We have the opportunity to combine several tools to meet every customer's need to handle the risk associated with purchasing electricity. Tools that moderate price fluctuations and help customers manage their cost budgets are the most common choices. The small- and medium-sized customers, we offer several standardized products designed to meet the customers' different needs. Large customers and public entities are offered tailored solutions designed to meet their unique needs. Fjordkraft has very low market risk associated with risk management products because the customers fully own their positions. Customers that have electricity plans that include risk management show higher satisfaction and loyalty. Focusing on such products is important to increase both customer satisfaction and our profitability. In the Fjordkraft brand, we also have offered our online customer portal, Min Bedrift for several years. With Min Bedrift, the customer gets reports on consumption, comparison of consumption with temperature, cost reports, price forecast and risk management reports. During 2024, we will increase penetration on live data monitoring, including relevant alarms and notifications. This allows business customers to plan their activities and to reduce costs, both from grid and electricity. We also will launch solar monitoring in the end of 2024. In the next slide, I will talk more about how we are going to enable a multisided platform with relevant services that helps the business customers to reduce cost, reduce consumption and to utilize new energy solutions. The electrification opens new business opportunities for the Elmera Group. With a large customer base within the group and more than 50,000 subscriptions in Min Bedrift, we believe we are well positioned to take the next step within digital services. The electrification related to the green shift increases the customer's need to use new energy solutions and to optimize their usage. We observed many new actors in the market with services related to solar, storage, heat pumps, flexibility, steering, charging, climate reporting and many, many more. We believe we are an attractive partner for many of these companies. They often have well developed solutions but lack the setup to operate an initial number of customers, sales capacity and customer base. We have the distribution power. We have the Elmera IT platform, and we have a large customer base. We increased our investments related to our digital services, and we will attract partners, which offers energy-related services to our digital ecosystem and cost efficient, expand our product range and profitability. Solutions that reduce and optimize our customers' consumption puts us on the customer side and we experienced improved loyalty from those of our customers who take advantage of our energy consulting and energy efficiency services. A digital ecosystem, gathering several services will make it easy for the customers to manage their energy consumption, and these services strengthened both our profitability and our business model robustness. Later, Per will tell you about how we have transformed the Nordic portfolio and reduced risk by implementing products in the B2B market Nordic B2B market with the same risk profile as our products in the Norwegian business segment. Activities within B2B and Elmera Group are organized in a matrix. This gives us cost synergies across brands and countries within product management, IT and marketing. In the first half of 2025, we are migrating all Nordic customers to the Elmera IT platform. This gives us the opportunity to target Nordic business customers with the same brand, and we are launching the Fjordkraft brand in the Swedish and Finnish B2B markets. We will launch a common Nordic product portfolio and our digital services in all 3 countries. We have a great opportunity to expand our activities in the Nordic business market based on the Nordic customer base and our Nordic organization. Based on the Norwegian business model, we will expand our activities in the Nordics and focus on our competitive advantages, brand awareness, strong distribution and product management. We will build brand awareness with one brand and one voice in Norway, Sweden and Finland. We will create strong distribution power and sell Nordic business customers the same attractive product range, products that enable costs control, control on consumption and an ecosystem that brings together new energy solutions. The Nordic expansion opens a market potential 3x the size of the Norwegian business market and we believe in growth in the Nordic business market. To summarize my presentation, we are operating a proven, robust business model in the B2B market. The Nordic expansion opens a market 3x the size of the Norwegian business market, and we will continue to grow our sales capacity in all markets. We are strengthening our digital services, and we will continue to expand our product range. In 2025, we are unifying our activities in the B2B market within one brand, one Nordic product range and all customers handled by the Elmera IT platform. We are well positioned to further growth in the B2B market. Thank you for your attention, and please welcome, Per.

Thank you, Roger. Yes. My name is Per Heiberg-Andersen and I'm heading up the Nordic segment. Yes. Today, I'll start by giving you a quick overview of the Nordic segment. Then I'll have to quickly recap the market turmoil that we had in 2021 and '22. That's necessary to explain all the changes that we've done to the segment strategy and to the Nordic Green company over the last couple of years. I'll explain the organic growth model that we have now, say a few words on M&A before I give you a sum up. Okay. The Nordic segment consists of Switch Nordic Green AB, which was acquired by the Elmera Group in the fourth quarter of 2020. It's a Swedish Finnish retailer with offices in Stockholm and Vaasa, Finland. It's a -- Nordic Green is a challenger and fighting brand, and it's positioned as a retailer of renewable and eco-friendly energy. And that's relevant because of the different energy mix that we have in Sweden and Finland as you might know. Operations is consolidated in the Vaasa office. And as you heard, Nordic Green Energy has been the brand now to serve both the Consumer and the B2B segment in both countries for a while now and it will be -- and will continue to do so for the B2C segment in Sweden and Finland. And as Roger just told you coming spring, we will launch the Fjordkraft brand in Sweden and Finland. Looking forward to that. As some of you probably remember, we had some serious turmoil in the fourth quarter of 2021 and in the second half of '22. We had a combination of a dip in nuclear capacity, weak hydrology, increasing gas prices that gave us, of course, the very high electricity spot prices that we saw in the fourth quarter in '21. And then this was further fueled by the Russian invasion of Ukraine leading to the extreme volatility that we saw in the second half of '22. And the high price levels exposed Finnish and Swedish retailers with fixed price portfolios to unprecedented volume risk and the high volatility with a high peak/off peak spread led to the unforeseen profile costs. So in these quarters, all electricity retailers in Finland and Sweden experienced huge losses from their fixed price portfolios, especially in Finland, where fixed price was the all-dominant product offered to the market by all retailers. Yes. And in the bottom graphs to the left, you see the last 10 years with the spot price development. To the right, you see the peak/off-peak spread and for many, many years, it was relatively low price, relatively calm market. The fixed price product was -- seemed like a sensible business, a good profitable business. And then the turmoil came, caught the retailers by surprise and exposed the big risk in these products. So what did we do? Already in January 2022, we decided to stop all new sales of fixed price products in Nordic Green in both countries. And that was the start of a 2-year transition from spot -- fixed price-based business to spot price-based business. We had a new CEO coming in, in the fourth quarter of '22 and have had additional adjustment to the organization and strengthening of the management. We are very, very pleased with the management that we have. Now I have to say that. Then as Roger told you, we have started the implementation of the B2B metrics. We have a very good cooperation around that as well as we've launched the Elmera Group app both in Finland and in Sweden for the B2C segment. Finland early last year, Sweden just now recently. And we have been a lot more -- during the last year, we have been a lot more proactive in the PR and communications as well as we have had a transition to a more digital and internal marketing sales channels for the B2C, bringing the cost of sales down aligning it to the new business model. And the results you can see on the bottom here, the share of fixed price in Nordic Green starting '22, we had 75%. It's been now for a while, below 20%, which we think is an acceptable risk exposure at the same -- in the same period from the start of '22. We have grown the spot-based business by more -- well more than 100%. And although there's been a reduction in the number of customer due to churning out the broker portfolio and the fixed price portfolios. We have, in the same period increased the net revenue with more than 100% illustrated by the graph to the right. So then I'd just dwell a little bit about the positive brand development. There's been a lot of positive coverage on Nordic Green, both in Finland and Sweden. In Finland, it's about 2 themes. One theme is the launching of the Elmera Group app, which gives the insight and control of your energy consumption opportunity for smart charging, the spot forecast, et cetera. We see a lot of coverage. I think it's fair to say that we are the tech leader in Finland. And the second theme has been the trend towards spot-based business. And we were the first one doing this change, but no many, many follow. And this is a significant trend, and it's received a lot of coverage. And of course, we are one of the main drivers behind this trend. And then, yes, in Finland, I think the industry and ourselves were caught by a big surprise when we landed the #3 position in the EPSI rating last fall. Of course, we are very, very happy with that. Also in Sweden, we have had good coverage here more on the B2B segment. Also very happy with that development. So what happens now? We have a clear positive brand development. We have a comparative advantage in products, technology offerings and customer interface. And we will migrate on to the Elmera Group platform coming spring, giving us new product offerings as well as improved efficiency which is also very important. And we have strengthened the organization and streamlined it to meet new requirements. So the essence of our strategy right now is to ride on the EV growth trend, which is quite visible now in both these countries. And on the second trend, the trend towards spot-based products. There's a big shift going and for both, we are, of course, perfectly positioned, and we'll keep the environmental heritage that we have had for many, many years now, which is also important. We'll continue the transition to a more pull-based strategy for B2C with PR and digital communication and marketing, already 95% of new sales in the B2C market in Nordic Green is on these internal and digital channels, bringing the cost of sales way down. And then for B2B, as Roger told you, we will strengthen the sales capacity, develop the matrix further and launch Fjordkraft brand in the coming spring. That will be great. And then we'll launch new Pan-Nordic Elmera Group products and functionalities as they come along. Okay. A few words on M&A. We did have some processes going, of course. But these were -- we terminated these due to the turmoil and during the turmoil. And as we have explained, been refocusing on launching the app in both countries preparing for the platform migration and so forth. And yes, there's been just a few transactions in these 2 countries, not a whole lot of movement. Both markets are almost as fragmented now as they were 2 years ago. So now Elmera Group is again interested in acquisition opportunities. And of course, the key is now the synergy realization and scaling on the new platform. So to sum up, so we've had a very positive turnaround of Nordic Green Energy and regained profitability, and we're positioned for the new market dynamic. The Elmera Group app is launched in both countries successfully, and we're building the B2B matrix, and we'll launch the Fjordkraft app coming spring. And also, we will consolidate on the Elmera Group platform, giving new services and improved efficiency. So going forward, profitable organic growth will be a proof of concept. But still M&A initiatives will be restarted. Thank you. Yes. And then there will be a 10-minute break. Thank you. [Break]

Hello. My name is Solfrid, and I'm Head of Power Trading and Energy Supply in Elmera Group. It has been some exciting years in my end of our business. And today, I would like to share some thoughts and reflections about the changes we are facing both in the market and also in the way we operate. As Rolf said, we are preparing to take advantage of being the largest purchaser of electricity in the physical market in Norway. We find the effects on the markets arising from increased volatility, an interesting opportunity for us to take advantage of without increasing the group's risk exposure. I will come back to that later. But first, what is Power Trading in Elmera Group? The key objectives for the group's power trading function is to reduce cost of goods sold and to support the business units with products and services that enhance our retailers' value proposition to the end users. Optimizing power trading within both physical and financial markets is done by a sound sourcing strategy in the different energy markets. The Power Trading department in Elmera Group offers individual and portfolio risk management to our customer portfolio. And we have some highly qualified members of the group function that gives both customers and business unit market insight. And it is also the foundation for selling risk mitigating strategies. Okay. Moving on to market risk in the group. We can report a considerable decline in the market risk last 12 months especially due to stop in sales and phaseout of variable products in Norway and fixed priced products in Nordics, as Per mentioned. I would like to walk you through the different types of market risks the group [ Per spoke of ]. First, price risk, defined as the possible differences in purchase price and selling price. This risk is present in both variable contracts, which now represents a small part of our volume. Profile risk, which also Per mentioned, is -- this defined as the risk of consumption profile being different than the hedging profile. This risk is present in both fixed price contracts in the Nordics and in variable contracts in Norway. Volume risk is the risk of final consumption being different than the hedged volume and is present in fixed-price contracts in the Nordics. The risk management products and sale in the group today follows a back-to-back strategy and represents no market risk. So in general, our approach is to minimize the market risk associated with our products. And just to be clear, we do not enter into any trading positions on our own books. Okay. Let's turn to production. The Nordic production forecast for the next 25 years is shown to the left on this slide. So let's start at the bottom where the regulated production capacity, hydropower and nuclear is shown by duck blue and green areas. This production works as a baseload production in the Nordic energy system. Above the green area, you can see how wind, both onshore and offshore and solar represent an increase in production, all delivering unregulated power into the energy system. And no surprise in the fact that this production is the growth going forward in production. So turning to right on the slide shows the Nordic consumption and production. And as you can see, the new production capacity is expected to be absorbed by increase in consumption, leaving a slight increase in net export going forward. We have put some challenging years price-wise behind us and are now expecting a more normalized price range. In this graph, you can see different analysis expectations with an average illustrated with the green dots going forward. And as you probably know from financial analysis, variation tends to be an outcome of differences in both models and in input. And in this case, especially forecast on how the continental price will be and timing of new energy production and actually also how much increase in consumption, we actually will have result in relative differences. But nevertheless, the price level seems to head towards a normalized and stable level. But we do expect volatility to remain high due to increase in unregulated production so we believe that risk management services will still be highly relevant to our customers, as Roger mentioned in his presentation. So as a response to this unregulated element in the production mix, the balancing mechanism in the energy system is going through a major transformation as we speak. So I would like to use some of my time to give you a short introduction to the changes the industry is going through at the moment. So the balancing system. Balancing the more system frequent, more frequent and efficient is the main purpose for the changes in the Nordic balancing model. Reducing the time frame for trade from hourly to 15 minutes, is ongoing and will be finalized start of 2025. Introducing 3 new auctions in the intraday market will stimulate the participants to balance more continuously. This change is happening next week actually. And finally, there are new capacity and reserve markets opening up in order to increase sufficient volume to balance supply and demand. Elmera Group only participate in day ahead market under the agreement we currently have with Statkraft but we certainly do recognize the opportunity that changes give us within balancing and also a value proposition to our customers. So therefore, the partner model in trade is in transition. Last Capital Market Day in 2022, we showed you our setup for partner model, how do we do our trading. In this setup, Statkraft has been our partner for many years, delivering services within both physical and financial trading. Elmera Group is currently not a client at either Nord Pool or NASDAQ so we are doing nearly all our trade through Statkraft. As of 1st of May 2025, we will in-source core activities related to group's power function. We have entered into a new bilateral agreement with Statkraft just recently, running from 1st of May 2025. This agreement includes possibility to do financial trading still and some physical volumes, but no services. So we believe that we can utilize our position as being the largest purchaser in Norway by having multiple bilateral agreements being a client at Nord Pool, but also when it comes to the role as balancing and responsible, we can optimize our sourcing and power trading strategy. To serve the group's need for power management, we have established Elmera Energy, as Rolf mentioned, and Elmera Energy will be the new partner for the group's trading function. The new sourcing model and setup for trading activity does represent an opportunity to reduce cost of goods sold. Because by balancing more frequent, we will reduce balancing costs and trading with several parties will utilize on bid-ask spreads. I would like to elaborate these opportunities on the next 2 slides. As mentioned, we only operate in the day ahead market today and we are passively affected by the balanced market. So before noon today, we will place volume in the day ahead auction, asking for volume, we forecast to sell tomorrow, 6th of June. So if it, for example, gets colder, we are likely in the need to purchase more volume. And if it gets milder, we need to sell off volume. So today, our balancing volume transactions are only done passively in the balancing market. And mind you, in the balancing market, the price formation is different than in the day-ahead market. The price formation from the day-ahead market function as a reference price and is a well-known spot price. The customer actually will be charged. But when the purchase price of balancing volume may differ from our selling price and extra cost or income may occur. And the last years, Elmera Group has experienced increased net balancing costs as the price has become more volatile and different from the spot price. And that cost has, over the last year has been in the range of NOK 50 million to NOK 55 million per year for Norway alone. So when entering into a new market in the intraday, we expect that we will be able to balance in a more frequent and efficient, cost-efficient way. Now turning to financial and green products of the power trading. Over the last years, the liquidity in the financial marketplace has dropped due to less trading activity. And even though there is more trade now than a year ago, the activity is still low. And as a result of low liquidity and still on certain market, there can be quite a spread at NASDAQ. This is shown on the left. As you can see, the spread on some products are quite substantial. And NASDAQ function as a price formation with reference price. So we believe that we can optimize purchase price when trading with several parties and several markets. To the right, you can see the lack of price formation. This is on a product called EPAD, electricity price area differentials. And it has become a popular product as we have experienced more area differentials. And as you see, there is not a well-functioning marketplace and hence, no price reference. So almost all transactions are being traded bilaterally. And with no objective reference price comparing price is more crucial than before and requires more than one agreement. So trying to sum up, as mentioned, we are in the middle of major changes, both in the market and in the way we operate. And the green shift from fossil to renewable power production brings volatility into the energy market, that we have only seen the beginning of. Despite increased volatility, the market risk in the group has declined due to stop in sales and phase out of products. As of 1st of May 2025, we will in-source the power trading function as the market changes open up new possibilities for us being the largest purchaser of power in the Norwegian market. And we do this to leverage from our size especially in Norway. And we find the opportunities ahead of us quite thrilling to be honest. We strongly believe that both trading with several parties, manage the balancing market in a more active way and being able to trade in the spread in the financial markets will give us possibility to optimize purchase price and cost of goods sold. Thank you. Welcome, Henning.

Thank you, Solfrid, and good morning to you all. In this section, I will connect the strategic background from Rolf and the ambitions and actions from the business units and power trading into a financial context. I will go through key drivers and developments in our P&L, and I will introduce our financial targets for 2024 and 2025. But let's start with a recap of our historical track record. The company was established in 2001. Growth and profitability picked up with new executive management, a new strategy from 2013. The company was listed in 2018 and the strong growth continued showing in the trend here to the left on this slide. We achieved this with a focused strategy and execution based on the 3 pillars on the right-hand side and concrete supporting action areas. The 6 you can see here are the ones we've been following for the last year plus. The development was also boosted by 2 acquisitions in 2020. During 2021 and into 2022, we started to see a shift in consumer product mix from higher-margin variable products to lower-margin spot-based products. We also saw the signs of risk in the acquired Nordic portfolio, which materialized with a loss related to volume and profile risk in Q4 of 2021. Results in 2022 were actually quite robust in the first 3 quarters. But as you may remember, we had a challenging fourth quarter, we had migration and hedging effects in the Norwegian consumer portfolio and losses in the legacy fixed price portfolio in the Nordic segment. From then on, we believe that we have handled the challenges well. We have turnaround, adapted, reduced risks and strengthened our business model in all material aspects, which you heard from my colleague during their presentation today. We ended 2023 with an EBIT adjusted of NOK 513 million and NOK 230 million in the first quarter of 2024 which is the second best EBIT adjusted in any quarter in our history. And we also had the strongest cash generation in any quarter in our history in the first quarter of this year. So we are back on track for growth and for growing profitably. Let me also recap some key financial metrics and remind about Elmera Group's business model. We handle significant volumes of Norway's electricity, electrical energy consumption and so far a small part of the volume in Sweden and Finland. With over 21 terawatt hours flowing contractually to our customers through our systems, we certainly have a potential for optimization. We have no capital tied up in production assets or logistics. We have no risk related to production or transmission, no stock that can devalue. We are a high cash conversion business, and this gives us a strong dividend capacity. As you can see, all segments had a positive contribution in 2023 and the trend has continued into 2024, as you have also seen from our Q1 report. Also in 2024, the Consumer and Business segments stand for most of the group's delivered volume and net revenue and EBIT but we are convinced that our opportunity for expanding in the Nordic segment as well as mobile, power trading and new products and service to come in the future. So let's walk through the P&L and start by looking at the top line. Going forward, we are targeting organic net revenue growth in all of the 4 segments. The underlying market growth in Norway is about 2%, and we are the market leaders, both in the B2C and B2B markets. In the Norwegian B2C markets, we aim to take at least our share of market growth. In the Norwegian B2B market, we aim to take some market share above the underlying market growth, and we target growth in all the B2B subsegments. In Sweden, Finland, we find the growth opportunity very attractive. And as you've heard today, we are now ready to address a market which is threefold that of our home market in Norway. The turnaround in Nordic is complete, management is in place, also a new CFO, I might add. And we will be on the same IT platform during the first half of '25, as you have heard. We are, therefore, targeting to take market share in both the B2C and B2 market in the Nordic segment from 2025, and we also believe this can be achieved with attractive margins. The fact that we will take over the handling of a significant volume will also give opportunities to optimize, as you heard from Solfrid's presentation and thereby also support margin development across all of our customer segments. And that covers the top line. What about cost? Well, firstly, we are very pleased with the execution of our NOK 100 million cost savings program. This was largely completed in 2023, but the effects and principal implemented have carried on into 2024. As you know, we have targeted stable nominal cost development in 2024 and 2025 as compared to 2023. Specifically, this means a nominal OpEx adjusted level of about NOK 1.2 billion. This is a relatively ambitious target but achievable but we have to fight inflation of around 4% in Norway, wage increases around 5% in Norway. And the key action to mitigate these increases is really to continue our well-established cost control measures and see continuous improvement going forward. Based on prognosis from the Central Bank, Central Statistics Norway and many analyst houses, we expect that inflation in Norway will follow the trend of our trading partners and start reducing towards the Central Bank's target of 2%. In Sweden and Finland, inflation is already significantly below Norway, tracking towards a level of 1% to 2%. In recent year, we have invested relatively heavily in front end user systems and you've seen how successful these initiatives have been in the presentations earlier today, both in the B2C and B2B markets. Now the time has come also focused more on efficiency and scalability. And we firmly believe that ongoing process and actions that we are undertaking to consolidate systems, reducing complexity, go fully cloud-based in-source developers and so forth will make our IT platform one of the most effective and scalable in the Nordics. This means that both organic growth, future M&A will become increasingly profitable. Having said this, it is cost relative to income that we are considering most important. That is if we identify organic growth opportunities or accretive M&A cases, we will allow nominal cost growth in order to expand our business and increase revenues. To elaborate a bit on OpEx on more than we normally do in our quarterly releases. We do adjust certain cost items from EBIT in our quarterly reports and in recent years, these figures have been both quite significant, and they have fluctuated. Starting from the bottom in the chart, M&A depreciation stem from acquired customer portfolios which are depreciated over the expected lifetime. The amortization peaked at NOK 189 million in 2021 will come down to around NOK 110 million in this year. In 2026, if we don't make any new acquisitions, that is, this will drop to only NOK 30 million. That is from around NOK 1.3 to NOK 0.2 per share after tax, so quite a significant development. Net derivative effects have also been quite significant, but with more balanced portfolios, reduced risk. This indicates that the net effect will be closer to 0 over time going forward. Estimate deviations occur as a proportion of the final settlement of sales and distribution of electricity is made after we finalize our quarterly financial statements. Improved estimation models have contributed to realizing only minor deviations in the last 2 years as compared to over NOK 50 million in 2021, and it will become even more robust when we have all volume on one platform next year. And finally, many of you know that we have a significant tax loss carry forward from the acquisition of Nordic Green Energy in 2020. Profitability growth in the Nordic segment is consequently very attractive. In our Q1 presentation, we gave new disclosure on the breakdown of interest expense components, primarily term loan, overdraft, the Statkraft supply agreement and guarantees. Now referring back to the previous on power trading. The change in the Statkraft supply agreements gives us very interesting opportunities for improving net revenue but at the same time, the supply credit limit will be reduced in the new Statkraft agreement from May 2025. We will still have a significant credit relative to Statkraft supply of physical and financial volume but it will be necessary to increase our own credit and guarantee lines provided by banks. This will primarily not be required in the daily course of business and in summer months, but now we need to have backup facilities in high price scenarios, especially in winter months. Over time, we also expect to become less dependent on Nord Pool and Statkraft by way of new bilateral sourcing agreements, which would also include supplier credit lines. The refinancing process has run in parallel with the negotiations with Statkraft and we are on track to secure commitment from a bank syndicate so that we can update the market on our long-term financing in our Q2 report in August. The changes in financing will have some balance effect and some P&L effects, which we'll, of course, disclose in due course. But particularly in winter quarters, there will be a certain shift from interest-bearing supply credit reported in net working capital to interest-bearing debt. However, importantly, this will not change the underlying leverage. Financing spreads have widened somewhat since we entered into our current furnishing arrangement in 2020. Without giving our friends in the bank's annual fee renegotiation points, we do expect a moderate increase in financing costs. However, we believe that this will be mitigated by the improvement in net revenue by taking on responsibility for Power Trading. With the latest outlook from the Central Bank, the key policy rate and consequently, the market interest rates are expected to decrease. Analysts vary in their opinion, some believe that we'll see 2 cuts this year and 4 cuts next year. That will certainly be a great value to us. Price forecast indicates an elspot price level of around EUR 50 per megawatt hour with some analysts predicting EUR 60 to EUR 70 in '26, '27. The moderate price levels will also contribute to stabilizing in expenses in the years to come. Then finally, our financial targets for 2024 and 2025. We stopped guiding in Q4 2022 as we consider market conditions too unpredictable to be able to make relevant guiding to the market. We now consider the basis for sharing financial targets to have be reestablished, and we plan to release targets on an annual basis going forward. Our financial targets are the following: to achieve net revenue growth in all segments in 2024 and 2025, to maintain a stable nominal operating expense in line with 2023 for '24, '25. That is around NOK 1.2 billion. And consequently, to deliver EBIT adjusted in the area of NOK 550 million to NOK 600 million for '24 and '25 and with a positive trend throughout the period. We maintain our current dividend payout ratio of 80%. We also aim to maintain leverage around the current levels. And that concludes the section, and I'll give the word back to Rolf.

Thank you very much, Henning and thank you very much to the management that -- to the member of the management that has presented today in great presentations. I also want to say thank you to all the other members of our group management that surely have contributed. It is Jeanne Tjomsland. She is here today with us and ready for questions afterwards for those who are -- who is present here. She is Head of Communication and HR. It is Kari Marvik not present here today, our CIO, Head of IT. It is Solfrid Kongshaug. So we have 2 Solfrids in our group management. That is very difficult to understand. So we name Solfrid here as Fluge and she is Solfrid, the other Solfrid is heading up Kraftalliansen all right. And not to forget present today also is Arnstein Flaskerud, Head of our Strategy Process, Head of M&A, Sustainability, Regulatory Issues and a lot of more stuff. So you can -- yes. He's here later for questions. So thank you all. It's been a great process for us to prepare this session. And I really enjoyed listening to you guys, it was very nice. Usually, it's only me and Henning and Morten that is in spotlight. I know it's great to see you as well. I think all these presentations sum up to our key investment highlights. And I would like to run through those for you. It shouldn't be any doubt that we operate in really attractive Nordic electricity retail market with stable demand profile and definitely growth opportunities from the increased electrification. Of course, we are motivated to reduce our consumption of electricity, but there are so many other parts of our daily life that require us electricity. So in sum, this will definitely increase the total consumption, and we support this, of course, as a society we're focusing on new production methods. These are volatile, and we surely believe that we can leverage from the volatility as Fluge introduced you to. We have a comprehensive product offering, unparalleled offering, I would say including risk mitigating products and other value-added services. There's never been any participant in this market that over years has offered so many value-added services as Fjordkraft has. So we are really familiar with adding app services to our consumers. We are also the largest player in Norway particularly, and that is -- that's a good position to be in when we explore things to Sweden and Finland, obviously, we have a leading IT platform. As I said, we have been focusing on our IT platform for more than 10 years now. We have a robust structure, both when it comes to systems and when it comes to human resources. And of course taking this out in Nordics segment will be beneficial for the entire group. When it comes to power purchasing, I think Solfrid disclosed what we are going to do quite well. We have significant potential when it comes to optimized COGS, particularly taking the role in the balancing market. We surely believe and everyone else also believe that volatility will be the prevailing trend in the electricity market. So we do believe that we can take -- we can benefit from that. The Pan-Nordic IT platform will be a good basis for further growth also when it comes to or M&A activity in Sweden and Finland from next year. Now we are truly set up for bolt-on acquisitions. So it is up to Arnstein and Per to find the good subjects, the good prospects, I would say at the right price, of course. And last but not least, key investment highlight is, of course, that there's no doubt that we have an attractive financial profile with high cash conversion and our capital expenditures are limited. So we have a very nice dividend capacity. So I think that is all for me. Now I leave the floor to Morten to conduct the Q&A session. And I believe you also have some question from the audience in the service space. Is that correct?

That is correct, Rolf. So if we can get all of the management up in front of the screen, and then I can begin with a couple of questions from the online viewers before we move on to the physical participants. All right. The first question maybe to you, Rolf, it's from [ Johan Cornelissen ] it goes like this. Some of your competitors have very low margins. Do you expect bankruptcies and consolidation in the industry? If yes, will you capitalize with M&A or via passive diffusion of customers?

That's a tricky one. We have to look into the portfolio out there. Obviously, as you probably saw, Volta has been in the game now, the electricity retail and the business market that was set up by [ Energi ] and Hafslund. And that was not very interesting to us due to the fact that the customers wasn't profitable actually. So it's impossible to give a clear answer on that actually.

Okay. The next one is on the capital structure. How do you assess the desirability of the different ways of capital distribution, namely dividends, share buybacks, M&A, repaying debt or investing in the business?

That's also a very good question and not an easy one to wrap up with a few sentences. Our dividend policy stands. So we intend to continue to distribute 80% of our dividends. We have, in the last few years, actually gone a bit above the 80% as we have also had M&A transaction with the selling part of our mobile business, which has flown back to our owners. We certainly think that we can increase shareholder value by investing in the business. Hopefully, we should be able to build attractive returns that will become evident also in the share price in addition to our dividends, giving a total shareholder return, which is attractive. We have no plans for further buybacks. We did have quite significant buybacks. We are sitting on treasury shares, which we use for incentive structures, et cetera. So of course, I wouldn't rule this out. We have the authority from the Annual General Meeting to flexibility and all sorts of capital actions. Debt structure. Well, first of all, we need to establish the future debt structure, which we are very confident in. Of course, as we see how this can play out with more bilateral sourcing, that might give us opportunity to tune our capital structure in the future, but not in the first, say, 12 months, I would say.

Thank you. I think we will move over to the attendees here physically today. So if you have any questions, please raise your hand, and I'll pass you the microphone.

[ Peter from ABG ]. A couple of questions from me. Starting with the consumer to Magnar or Henning probably. You talked about growth seems like it's driven by volume. But if you look at the couple of last years, the number of customers has been fairly stable, around [ 670 to 1,000 ]. Are we able to turn this trend and that we can see a small growth in the number of customers within the Consumer segment?

Yes, I think so. I think we can see that -- but we are in a position where we are looking into the profitable growth. So -- and when we see the churn that we have, we see that those who are leaving us or actually those are price hunters. And with the value acquisition that we have today, I think we will have more -- the customers that come in, will more appreciate the services that we have. And we can see also now how they appreciate the new services, and they -- we have more, could you say, ambassadors out there. So I really believe that the new services will give us a healthy growth going forward.

Perfect. And then on the Nordic segment, any reason why you need to have a head office in Vaasa, is it and Stockholm and not move all operations to Bergen and scale in your platform even further?

Historically, this is a separate operation, of course. And we have taken out a lot of synergies moving all operations to the Vaasa office. The products will have their own variance of the Elmera Group, of course, and there are different legislation in both these 2 markets when it comes to customer -- yes, terms and conditions, et cetera. And of course, you have the language. So I don't see in the near future that we will not have operations in Vaasa, although I can disclose that it has been coming down in FTEs over the last months. So we are taking that down, and we are streamlining and we do synergies across these 2 countries. And we do synergies now we know, especially in the B2B part, where we have a common product management. And also we have more and more cooperation in the product development in B2C as well, and we have the common up. So I think you can expect us to see and follow and take out more synergies in the years to come. But in the short term, it's beneficial. And I think for the -- yes, for still many years, we'll have an operation in Vaasa. Perhaps more coordinated with what we have in Norway. But we will have an operations in Vaasa, yes.

One more for me, if I may. And that goes to the change in the sourcing model. Does this increase the risk of the overall profile for the company? That's the first question. And second, is this initiated by you? Or was it that Statkraft wanted to exit the agreement?

I can take the first. The second one, I can take. [indiscernible] for several years, 3 years, 4 years. We have looked into the potential when it comes to the sourcing model. So -- and when volatility seem to be the prevailing trend going forward. We need to leverage more from our purchasing volume. So I would say that we initiated a process where we wanted to have some more of all the goodies that is in the purchasing process. And then we have to let go on some other things, and that's among others financing. . So I think that will sum up the answer. And we are still good friends with Statkraft. They have been tremendous to us for many years. They were for a long time our main owner. We are consolidated in the Statkraft company for many years until we were listed. So I think, no, it is the time that we are more on feet and do these kind of things. This is core business. We want to do this ourselves. As we did with BKK when we took over all the IT systems from them 3 or 4 years ago. So I think this is a very natural development of our business. So that was the answer to your second question. And then you can reflect a little bit on the risk.

Definitely. First, I would say, no. But yes, we recognize risk, but no because first of all, the date is 1st of May. It's not a random date. It's an agreement that we do transform the partners on a date that it's good for us. It's a low level. We're going into the summer. And secondly, we are closer to the customer. We have much more data on the customer. So we should be -- we are in a position to do much better forecasting. So we will start forecasting models much earlier than 1st of May. So we will sort of run a parallel prognosis because the risk is the prognosis to be honest, how well do we actually do the bid for tomorrow or the ask both in production and consumption. . So no, but we recognize the risk and the most important thing for us is to run parallel, establish a good prognosis model and utilize on the closeness to the customer data. And when it comes to risk from balancing markets to intraday market, there will be increased liquidity in the intraday market, but it sort of shifts from the balancing market to the intraday. So the setup today is sort of I would say, is the most expensive for us because we do passive balancing. So being able to balance more actively, must be sort of an upside, yes. Does that answer your question?

Ole Martin Westgaard, DNB Markets. Continuing on this new sourcing platform, I think I captured 25 FTEs somewhere in the presentation. Is that the setup of the team that will make up this division or...?

Yes.

Yes. And these people, are they only internally recruited or what is the cost associated with setting up this platform? And what will the run rate cost on this platform be?

Yes, we are paying Statkraft, of course, for the services today. And we will continue with the same cost. So it's all been sort of budget before, and we are now almost 14, I think, 15 now. So we are sort of ramping up as we go along during the year now both from internally but also from other like venue, we have 2 new FTEs from, so.

And the cost associated with the balancing was that NOK 50 million to NOK 55 million. So that can be reduced, but it's not going to be 0, right? It's going to be some NOK 20 million, NOK 25 million or something, right?

It's quite difficult to say. But some years ago, we are very dissatisfied if it exceeded NOK 7 million.

And then just to understand the magnitude of this. So you have today a significant purchase of Statkraft. Is that going down to 0? Or how should we think about this? What's the level of your ambition here?

Yes. It's a little bit difficult because we have signed an agreement that we -- it's a commercial agreement, and we are not allowed to disclose the details around it. But -- it is a framework that sort of relates to the physical agreement and the financial agreement. So it's sort of -- yes, it's an opportunity that comes along with financial trade at some degree.

And then going back to your cost level, which you are guiding flat for 2 years. It's obviously a high underlying inflation. It looks like listening to the presentation, there is significant initiatives, both on product development and also commercialization of these initiatives. Isn't it very ambitious to be able to keep costs flat in that development. And when you look at your overall cost level and benchmark that compared to your competitors, where do you see yourselves?

It is ambitious to guide or set a target of flat normal cost level maybe particularly in 2024 since inflation is still -- and wage increases will still be relatively high in Norway. Of course, signs are it's tapering off and going in the right direction. Of course, we base ourselves on consensus estimates where we take inflation expectations into our modeling. But yes, it is correct that we will need to keep up with all the initiatives that we have been working on. When it comes to product and service development, it's in our cost base. It's not necessarily something we outsource. We don't go out and buy huge external consultancy projects. When it comes to IT, our game here has actually been to in-source as all business probably due to the in-source very expensive consultants. So that's ongoing with the IT department. So I wouldn't say that those are particularly cost driving. Keep in mind that we have had quite substantial investments, all the CapEx has come down from historical levels, it was probably more in the NOK 70 million to NOK 80 million range to now about NOK 50 million quite level. So the -- not talking CPOs, but investments in capability systems, et cetera. So no, I wouldn't say that those cost drivers are particularly worrying. There will be a phase with some duplication costs which we have looked carefully into and we set that target because we are building up some organization. We are taking down some external costs primarily from next year. So -- our conclusion is that this is ambitious, but it's feasible. We have had established very tight controls over cost, and then we -- of course, we have to deliver each quarter on that promise.

And on that cost level and with the scalable platform, how much growth can your model handle?

When we have migrated all customers, our main supplier, Metzum, which also is our 40% owner and it's completely cloud-based. So it's extremely scalable. Obviously, scalability may or may not come at a cost. We think, obviously, that we can have huge efficiencies of scale by consolidating all customers. And it's actually, to your first question, it's not easy to make fair comparison. We are an incumbent. We have a wide product range. We are a full-service company, both for the Consumer and the Business markets. We are Pan-Nordic. So you could argue that we have complexity, which a small -- a small challenger wouldn't have what we still think -- and actually, simplicity is one of our core values. So decomplicating our business is core. We have already as Magnar said, reduced the number of products or variations that we have. We think we can still work on that when we consolidate for the Pan-Nordic so opportunities that we can decomplicate and work more on scalability. So yes, we think definitely that we will be able to show that we are more scalable in 3, 6, 9, 12 months.

Gard Aarvik, Pareto Securities. Sticking on the sourcing, you mentioned having that we will have -- we will see some increase in the working capital and hence, in net debt. So through this, so we'd not expect any large cash positive cash impacts from this new sourcing agreement?

Well, the underlying leverage will be consistent. We just moved from balance sheet line A to B on net working capital to net debt. One could also argue that pure working capital financing is very close to working capital. The interest -- the Statkraft supplier agreement that we have today is interest carrying, but defined as working capital. We will change part of that with external bank financing, particularly, that will be evident in winter months with higher volumes but it's essentially a part of our cycle. So from that perspective, that change will be cash neutral.

Okay. And some questions on the business side. So you mentioned that some 70% buy more than one service from you. Do you see the growth going forward more on the number of delivery side? Or is there more potential on the upsell side? Of course, you're coming from a period where the high spot prices meant higher revenues in some of the products where you have larger gains or markups when the prices are high now we're at a much lower level. So how do you fight that? And how do you see growth developing in those type of products?

Well, since the last Capital Markets Day, we have had positive growth in selling risk mitigating services. I believe the volatility in the market will continue to make those products attractive. I have -- I really believe these products will be attractive in Sweden and Finland. And I believe in the digital solutions, we have great potential, both in Norway and in the Nordics. So I'm quite confident.

So yes, I mean, so it will be a deliveries and volume game than not necessarily that much around new type of products or upsell within your existing portfolio?

Both, I think. In Norway, upsells through the digital ecosystem, adding new partners and new services. And first launched our electricity products in Sweden and Finland first half next year and also the digital ecosystem. But probably, we need different partners in Sweden and Finland than in Norway. So the ecosystem will really be important to succeed with in Norway in the first run.

And then the last question from me on the Metzum and AllRate. You've touched upon previously that you've also delivered these models or at least looked at delivering these models to other markets as well. So could you maybe say something about that inclusion in the NOK 50 million to NOK 55 million ARR level that you have? And what other markets and growth opportunities you have from that?

Included in the NOK 50 million annual recurring revenues in Metzum, is also a smaller portion from customers outside Elmera Group, of course, and Metzum has gained contracts with Lyse, with [ Volta ] and other retail large groups, retailers. So they are not coming in for the next year. So I definitely think that you will see that the year-on-year recurring revenue in Metzum will increase quite substantially 12 months from now and that is outside the Elmera Group. When it comes to AllRate, AllRate also sales products within broadband, bidding and rating, broadband structures and some other segments. So I think the growth in AllRate will consist of being on their front foot when it comes to grid companies and also the upsell to the retailers, the electricity retailers, their sister companies in the vertical-owned -- vertically energy companies owned by municipalities. So it is more possibilities for upsell also in the AllRate ecosystem. But the most important now for us when it comes to AllRate is that we have this pilot with a grid company. And we have now set a fixed agreement put in place from the 1st of September. So that is very exciting for us.

Just a short follow-up question on the sourcing [indiscernible]. I understand the reclassification on the balance sheet going from working capital to the interest-bearing debt but on the P&L side, you -- the Statkraft interest cost has already been included in the net finance right, because you did that recast a couple of years ago.

That's correct.

Okay. And then the net effect on this new agreement is that you expect slightly higher net revenue and slightly higher net finance cost a net effect there is that going to be neutral or slightly positive for you guys?

It's a very good question and a difficult one. I think it depends on the time frame. So the new set of starts from the 1st of May and then we are ramping up for that data, and we will be ready to capitalize on those opportunities. Obviously, those will have to be work in and come over time from. And we also won't have particular high financing costs in December of 2025 on the other side but definitely with finance, it's as simple as we are refinancing in the market with ex higher finance expense than we had both in our own financing agreements and with the Statkraft agreement. So that will have some effect. I think what we can say today is that we think they will be mitigated. So exactly at what level, at what point, it's difficult to say the potential going forward as also interest rates drop is -- I think it's very positive. If you take -- let's say, you take a 2-, 3-year horizon on this, I dare say it should be a positive contribution.

Okay. Any other questions?

We will stay on here. The management group -- management will stay on here. So if you would like to have some one-to-one, you can have it afterwards.

Okay. So that concludes today's event. I would like to thank you all for your attention, and wish you all a nice day.