Orrön Energy AB (publ) (ORRON) Earnings Call Transcript & Summary

Good afternoon. And welcome, everyone, to the 2023 Orrön Energy Capital Markets Day. Very excited to be able to host this first in-person Capital Markets Day here in Stockholm. We have a venue with a lot of people, but we also have a lot of you joining online, which is fantastic to see. I think we have a very interesting program today. And as you know, we came out with our year-end financials and fourth quarter report earlier today. It's now 2:00. We see that this should be concluded before 4:00, I believe, but we have a number of slides to go through and a number of presenters. We will do this without any break, so we'll go on until the end of it. We will have a Q&A session at the end, and that's a very important time, I think. Normally, we get very good discussions going, which we really like, but good to gather up your questions for the end of the presentation. And then all 4 speakers will be up here and able to answer those questions. And for the ones of you joining online today, you have -- you see the slides on the screen, you will see a video of the presenter. And under that, you will have a box where you can type in your questions. And I will get them on an iPad with that I can then post the questions to the speakers. I think that's it for the practicalities. Again, very happy to have you here. And if you have a look at the program, we will start with our CEO, Daniel Fitzgerald, who will speak about strategy, market outlook, 2022 results and the outlook for this year. And we will then move over to a panel discussion with Carl Sixtensson, who's our Technical Director; and Jonas Dahlström, who's our Managing Director for the Swedish business. And we will follow that with a discussion on how we are fully funded for growth. And financial side of it with our CFO, Espen Hennie. My name is Robert Eriksson. I'm the Director of Corporate Affairs and Investor Relations for Orrön Energy and met a lot of you here in the room before, and very happy that we have so many individual shareholders that take a great interest in the company. That's amazing to see. I think we're close to 80,000 shareholders as today, and that's a very respective number. So from my horizon, I would like to start with saying thank you to all of our shareholders and prospective shareholders. And with that, I would like to hand over the floor to you, Daniel for starting the presentation. Thank you.

Thank you, Robert, and it's great to be here today in-person to some extent, and welcoming a lot of our fellow shareholders and investors online. It's a great time to be here with Orrön as well, I think we've had a fantastic start to the company. We've only been live for 6 months as a pure-play renewable vehicle, but we've achieved a hell of a lot in that time. And I think when you look back and reflect on -- not only what we've done in the last 6 months, the growth of our business, our ambitions, and we're going to explore that a little bit more today. But you also reflect on the market and where the market has been over the last 12 or 24 months, electricity prices are hugely volatile, moving with any slight move in the supply/demand balance. We're seeing huge spikes in electricity price, both up and down. Europe is on a pathway to decarbonizing its energy systems and removing fossil fuel and CO2 from energy systems. And that industry is really nascent today, and it's exploding in every single part of Europe with different technologies, different opportunities, different growth ambitions, different political landscapes. And that provides a fantastic platform for Orrön. And hopefully, as we go through the presentation today, you'll get a bit more of a feel for where we think we can create value in this landscape and where those opportunities exist for us. And I'll be joined today, as Robert said, by some of my colleagues in Orrön. I think we've got a fantastic team, and you'll hopefully hear a little bit more than just what you hear from Espen and I in the quarterly results. You'll hear a little bit more on the technical side from the teams that are actually building the core of the business. So it'd be nice to explore that a little bit more as we go through. And so with that backdrop, let's jump straight into our strategy and where we think -- where we think we can create value. And I'm going to start a little bit with Orrön -- on Orrön strategy before I dive into the market, and our results because as a relatively new company, I think it's important to shape exactly where we're going to focus and why. We are a pure-play European renewable company, and we've changed from a Nordic to a European company in the first quarter of this year. It's clear that from July, we were already looking to expand our horizon beyond the Nordics. But those first few steps we knew to get the pace and the scale that we needed. We needed to be in the Nordics because we understood that market. And as we've been growing in the Nordics, and I think Jonas and Carl will touch on it, as we've been growing there, there's parts of the team that have been looking at other opportunities to grow more broadly across Europe. And so we will be entering Finland in a bigger way. We're already there today with our MLK asset, and some of the assets we acquired through the second half of last year, but we're now doubling down on our expansion plans in Finland, and you'll hear a little bit more about how we think we can grow in that market. We're also stepping into France and Germany, where we'll start to look at the greenfield side of the business, and really grow in an area where we haven't been able to grow yet because we've been focusing on the brownfield M&A. And so that brings together a full-cycle renewable company. Cash generating assets with spot market exposure has been a core theme for us from day 1. I think the core of what we do will be that cash generation and hard assets that are generating power into spot markets, and we'll touch on that a little bit over the next few slides. When we started the business, we had some producing assets, some development assets. And as I touched on, we'll be moving more heavily into greenfield, and that gives us the opportunity to see value all the way through the renewable life cycle from project origination, all the way through to development projects, operations, late life, life extension, repowering and taking sites that have finished their usable life and taking them back into greenfield projects again. And I think exposure to that whole life cycle is really key for us. I'll touch a little bit on the finances, and Espen will also deepen that discussion around our financing, and the capital plans that we have and the net debt and firepower that we have for future M&A. Organic growth, I'm not going to steal the thunder of the 2 gents that will join us soon, but organic growth is something that's been core for the Lundin Group of Companies for many decades, and we'll explore that a little bit more today because that's a core thesis of how we think we can grow. And then the final one on this slide is an entrepreneurial team backed by the Lundin family, and I think we'll touch on some of the value creation in Lundin Energy and some of our predecessor companies. But it's clear that the Lundin family have had a huge hand in creating value for not only many of the Swedish retail, following that have been here for the decades, following the family, but also their ethos in the companies, and that shapes who we are and where we come from. And so we're going to dive into each of these a little bit more over the next handful of slides. As of the end of this year, we'll be generating 1.1 terawatt hours of production. We started life in July at 300 gigawatt hours. We added 500 gigawatt hours through the second half of last year through M&A. And with our Karskruv project coming online, we pushed that up to 1,100 gigawatt hours at the end of this year. And so that's a fantastic platform, and that's the core of our business that generates cash flow, generates opportunity through that asset base and allows us to take other steps in other areas, while not having to constantly go into fundraising or raising of capital to fund our growth. We started off in July last year with an acquisition-led strategy to create scale, and it's clear that we've been ambitious and hungry to add opportunities into our asset base, and that's not slowing down at all. In my mind, that now has Finland, Germany, France and some other countries to expand that strategy, which we've been successful so far in Sweden with. We're stepping into Finland, France, as I touched on, through greenfield, and we'll spend a little bit of time on that later. And then organic growth is a core theme of what you'll see today as well. So what I see in our business is Sweden has been the core. You see full cycle in Sweden now, where we're starting greenfield projects, projects within existing assets, brownfield opportunities and looking to repowering and recycling some of the assets back to the start again. But we don't have that built across every single country we're in. So we will move into Finland, France and Germany with that same model, but it will take time to build that. And what you see on here is you see Sweden with everything from the power generation, development and greenfield. And then as we move into the other countries, we'll start with a seed somewhere, whether it's brownfield M&A, whether it's greenfield projects. We'll start with something and around that core team, then we'll build the rest of the business. And we're not finished with just these countries either. So we're screening a range of other entry points into other jurisdictions across Europe at the same time. Our assets are largely cash-generating, and that's been something that's been really key for us and really important. There's so many renewable companies or energy transition companies that have a promise of cash generation in 20 years' time or 15 years' time with a huge hole of CapEx to get there and not a clear way to fund it. Our ethos all the way through has been we need to be generating cash flow because that allows us the ability to go and reinvest some of that cash flow into other opportunities and assets. And that really sits at the core of what we do. When we look at our asset base, 390 megawatts of installed capacity, we've got 70% of that in Sweden, which is great. But it's a little bit heavy in the Swedish context, and we need to expand that footprint to diversify geographically and diversify across technology. Skipping one, we go to 90% wind, which is the same theme. We've started on wind power because that's where we found out one of our first transformational acquisitions last year, and we've deepened in wind. But strategically, that's because that's where the opportunities have sat. When we look more broadly at what we're trying to do, we're stepping more into solar and batteries amongst the existing wind portfolio in Sweden. And when we step into Germany and France, we're stepping into a solar platform, where we're looking to develop solar projects. So we're starting to spread out the technology diversification, which is really important for us as we continue to grow. 85% of our power, as of the end of this year will be in high-priced or historically high-priced regions in Sweden and in Norway and Finland. And we're seeing -- when we aggregate our assets together, we're seeing a premium to system price when we look at the percentage of our portfolio that's in some of the higher-priced regions across the Nordics. And then through the second half of last year, we achieved a price of just shy of EUR 120 a megawatt hour. And that's a number we would never have forecast when we put this business together back in 2021, at the end of 2021 and early 2022. I think we've seen some really strong pricing in 2022, but it feels a little bit disconnected some of the exceptional pricing we've seen compared to where we see market fundamentals today. When we look longer term, our view hasn't changed, and we'll touch on it a little bit in the market update, but our view on power pricing is that we don't sit at EUR 30 or EUR 40 a megawatt hour. We've seen power pricing in the historical long-term. We also don't sit at EUR 200 or EUR 300, which has been abnormal for last year, but somewhere in between the 2 is our view on power pricing long-term, to allow this energy transition to really get the momentum and investment that it needs to complete. We're present in all stages of the renewable life cycle. So 1.1 terawatt hours in terms of production at the end of this year. We've been active in the brownfield and producing asset M&A. We've completed 10 transactions since we started in July last year, 7 last year, mostly in that brownfield M&A space. We're moving as we go forward, and Jonas and Carl will touch a little bit on the optimization of our revenues, stepping more into power trading, frequency markets, et cetera, which gives us a little bit more of a revenue stream beyond just generating power into the grids. In the development world, we have our Karskruv project. We've also started off last year a range of smaller projects in and amongst our existing assets, and Carl and Jonas will dive into that, and the repowering and life extension in a little while. And greenfield is something that we've focused on last year in Sweden and Finland. And now early this year, we're spreading our wings a little bit more in the greenfield space, and we will chase early-stage projects in all of our countries of operation. We're seeing a strong connection to landowners and existing owners of assets, where that door is being opened already for us to come and build greenfield projects on existing sites, existing assets, but also new land positions, where some of the people through our network are starting to open the door for a new greenfield. And so we'll see that expand not only in Sweden, Finland. We'll see us expanding into that in France, Germany and broader in terms of technology as well. And Espen will dive into the financials a little bit more, but when we look at our business, if I look forward at the 3 key things on the financial side that I think differentiates us somewhat from the rest of the renewable space, strong cash flow generation. Yes, some of our peers have strong cash flow generation. Some of our peers do not. Some of our peers have technology opportunities and investment opportunities that mean that cash generation is burdened in the coming 5 or 10 years. Next year, we'll be generating between EUR 25 million and EUR 70 million of EBITDA, and that depends on power price. Our company is exposed to the underlying power prices. And as we see prices rise, we'll be generating more revenues. As they drop, we'll generate slightly less. So we expect to generate somewhere between EUR 25 million and EUR 70 million. And on top of that, when we move into 2024, our production will increase by 40% as we move into 2024 with Karskruv coming online. And at the same prices, we'll see a big bump in our revenues in 2024. We have very low leverage. So we ended last year at $13 million of net debt, and we've got around $250 million of capacity on the financial side. So for all of the investments in growth that we plan to do, we can do that under our own asset base and under our own financing, which gives us a lot of capacity, not only for M&A, but also for the growth projects that we're looking at. And CapEx commitments, we have the Karskruv project this year, which will consume somewhere just shy of -- sorry, just over $70 million, and we've got some other costs that are coming in on the CapEx side this coming year. But after this year, we have no fixed CapEx commitments. So every dollar we will spend after that will be on accretive projects that add value to our asset base and add value to our stock. So we can be very, very, very careful about exactly what we choose to invest in or not choose to invest in. We've got the financial firepower on the debt side to go and grow the business. We've got cash-generating assets and we don't have a pipeline of committed capital beyond this year. So it gives us -- as we say at the bottom of this slide, it gives us a fantastic balance sheet to go and grow this business. And we'll spend a bit of time with Carl and Jonas later today talking about how we actually go and build an organic growth pipeline and what that means. And the 3 key themes that we've kind of looked at is people, assets and capital. And I think on the people side, we're very, very lucky with the teams that we have, whether it's the Lundin family and decades of investment in the energy and commodity space, whether it's from the Board. And we've got Jakob Thomasen joining us today from the Board of Directors, and the Board that we have has had, again, decades running companies building businesses and governing businesses to do exactly what we're trying to do. And that combination of having a shareholder with 1/3 of the stock, that holds a very long-term view of value creation and a Board, who are able to see through some of the short-term challenges to build a fantastic business long-term is just one of the people's strengths. You step into the team that we bring from Lundin Energy into our own energy. We've got people who have done multibillion dollar deals, who have raised multibillion dollar bonds and finances, who have structured M&A transactions and run and operated businesses, all the way down to the teams and Jonas and Carl will touch on it, the teams that day-to-day operating and maintaining our turbines and optimizing our production and growing our business. And that skill set is really, really deep on the people side. On the asset side, we've got a fantastic group of assets that have opportunity to grow and. And then on the capital side, we are fully funded. We don't need to go and tap equity markets to go and do deals. We don't need to go and look outside of our internal means to go and grow the business. So when I put those together, it gives us a fantastic platform for growth, and I think we'll dive into that in a little bit. And on the sustainable side, we bring some of the heritage from Lundin Energy, where we were industry-leading in the sustainable space, would have been 1 of the first companies to be carbon neutral on Scope 1 and 2 emissions in the oil and gas space. And now we step into the renewable space with a completely different platform, completely different assets. But our mindset hasn't changed on sustainability, and we will grow over time to build that same reputation, that same ethos from Lundin Energy in the sustainable space. All of our business is driving decarbonization of power systems. We're increasing the share of renewable energy in society, and we're actively aiming to mitigate the effects of climate change by removing carbon from our power systems. And that's core in what we do, and that's not enough though. So we will be building through the course of this year and next year, we'll be building more on the sustainability side. We're already well connected with communities and stepping into helping local communities benefit from what we do in their regions. We're looking at habitats. We're looking at wildlife. We're looking at projects to enhance our position in the areas in which we operate. Safe operations are a key part of what we do as well, and we put all of that together. We'll be spending a little bit more time on carbon emissions on EU taxonomy, alignment, et cetera. Some of the projects that take a little bit longer to build, we're focusing now on those to build our position in that frame -- in that scene. And the robust governance framework is a final piece on sustainability that's really key. Lundin family, Lundin Group are all publicly listed companies that have been doing this for decades. We stepped down with exactly the same control framework from Lundin Energy, a multibillion-dollar company into Orrön Energy with exactly the same standards on governance, and that's really key and core to what we do as a business. And one quick slide on value creation before we move into the market and our results and forecast. And I've shown a little bit here of our history from Lundin Energy, and I think it's a good example of how the Lundin family and Lundin Group have created value over many decades. Lundin Energy started back in 2001 with a single equity raise. So that got the company started. There are a handful of assets in the -- and that company has grown over the time to deliver $17 billion back to shareholders. And whether that's through the ultimate sale of Lundin Energy to Aker BP, cash dividends along the way at the end and progressive dividends along the way, the spin-out of IPC, the spin out of Etrion and EnQuest. We're always looking at the portfolio to look where maximum value exists. And for shareholders, hopefully, some of you here today have been part of this journey over 20 years, but this is a 350x multiple on that initial equity raise, which is fantastic, if you've been a participant in that. For those shareholders who have been with us, we've only been alive a very short while. But for those that were able to get in at the early part of this journey, it's been a fantastic journey so far. And even today, when I have a look at what this business could be over the next 2, 3, 5 years, there's a fantastic road map of value creation that's coming for this company as well. And so to participate in that journey, with the backing of the Lundin family, the Board and the competence and opportunities we have is a fantastic place to be in my mind. Hopefully, our investment community agrees and follows us on that journey. And it's not just Lundin Energy and the Lundin Group. You can see on the right here, there's $15 billion worth of companies that have similar thoughts, similar backing from the Lundin family, long-term shareholders who are not looking cyclically at when is the best time to sell assets and step out of a market. They're looking with a 20- or 30-year horizon and investing cyclically as opposed to stepping out as a shareholder, and that creates a fantastic opportunity to invest. When others are leaving markets, we can double down and invest in markets, and we can create what is hopefully a road map for shareholders over a much longer horizon to generate value. And so we'll change pace a little bit. I'll spend 1 or 2 minutes on my view on the market outlook, before we dive into our second half results, 2023 guidance, and then I'll pass the floor to Carl and Espen for a little bit. I wanted to touch on the renewable journey and ambition for Europe. And I think there's a multitude of slides and data we can put up here, whether it's growth in the Nordics, growth in Sweden, by technology if it's across Europe. And we've chosen just to land on the EU because I think it's a fairly simple story that sums up exactly where we're going in this space. And it's clear that every single country in Europe and the EU needs to decarbonize its power system. And just looking at this year, 2022 today, 400. If I just look at wind and solar is 2 technologies, over 400 gigawatts installed today. Over the next 8 years, we've got to install another 600 to meet the growth ambition. And so what we have today is only a fraction of what we need in 2030, and only a fraction of what we need in 2050 for us to meet what the EU wants to do in terms of decarbonizing power systems, getting to climate neutral or net 0 by 2050, and investing in the renewable technologies that are going to drive that transition. Everywhere we look, every single country has a huge ambition. Every single company has its own ambition. Every single fund and investor needs to be on this journey. So in my mind, this train has left the station. We are going to decarbonize our power systems, but the reality is we're at the very early stage of that. And the opportunities and landscape is still very new. It's very open, and we don't have today all of the commercial technologies we need to finish the energy transition, whether it's renewable generation, energy storage, grid expansions. Every single country has grid challenges today. So for me, coming in at the very early part of an industry like this that's going to be going for 30, 40, 50 years until we're even halfway built, and then continuing for decades and centuries thereafter. Being at the very early part of that with the competence, capital and assets we need to really start growing in this space is a fantastic place to be. One of the biggest challenges we face or the industry faces, I think, is around our ability to actually get projects built, and I think everybody would love to be in a world where we have just pure renewable energy driving our entire system. But if I look in Sweden today, it takes a hell of a long time to get a permit for a new wind farm or a new renewable asset that exists across Europe. When I look at grid connections with a decade or 15 years some of the times before we can get a grid connection for a new project, we have to overcome these challenges. And as governments and societies start to open those doors, there will be more and more projects coming to fruition, and I think we'll be very well placed to take advantage of those changes as they come into the market. And my view on power pricing, I think this is all looking backwards, I'm not going to put anything out there that looks forward on what power pricing should do or will do or may do. And I think my biggest reflection on power pricing over the last little while is, we're in a hugely volatile world. Any -- small change in either supply or demand is having a massive effect on power pricing. If we look at futures pricing from November, it was north of EUR 200 for the year ahead -- sorry, yes, in November, it was EUR 120 for the year ahead. December, it was over EUR 200. End of December, it was back to EUR 100. January was EUR 70. This thing is moving so quickly in the market. And I have no idea where power pricing is going to be in the future. What I do know, though, is if I look at the historical long-term average and you see it on here from '18, we can go back to 2012, 2015, anywhere along that journey. For the last decade or so, we've been at around EUR 30 or EUR 40 a megawatt hour. When I look forward at all of the challenges that are coming on the -- in the renewable domain to really build out the technology we need, this technology doesn't break even at EUR 30 a megawatt hour. If our long-term price is down at that level, then the energy transition isn't going to have the pace that it needs to really decarbonize our energy systems. And so my view on long-term prices, it's not EUR 30 or EUR 40, it's north of that. Now what that number is, whether it's EUR 60, EUR 70, EUR 100, EUR 200, I have no idea. I have no idea where we're going to go, but I do know that the fundamentals when we look at power pricing suggests that the long-term averages are still too low to actually allow the energy transition to happen. And that feeds back into our view on power pricing, where we need to be spot market exposed because I don't believe that the long-term PPA market is really pricing in the challenges we've got in the energy systems. And so my view is that we will see stronger electricity pricing for a much longer period into the future. Maybe not at these levels. I think this is a little bit unsustainable at the north of EUR 200 level at huge issues for the economy, huge issues for society. And we're seeing a lot of the politicals, we're trying to grapple with that with high-priced taxes and levies, and Espen will touch a little bit on what that means for our business. But my view on power pricing fundamentally is that we will be in a place where it is strong for the long-term. And volatility is a key thing that is going to be a factor in our world. We're going to see hugely volatile prices minute-to-minute, hour-to-hour. What we can do on that side being spot market exposed is we have the flexibility to sell power. We can sell frequency services. We can store power. We can blend technologies, and that gives us a lot of levers to play with that, don't exist in a pure-play infrastructure renewable asset with a PPA and some of the locked-up return framework. And so looking at our 2022 second half results and our 2023 guidance. Last year second half, we generated 250 gigawatt hours of production. And that takes into account, the assets we had in July, the acquisitions we completed through the second half of last year. And when we look forward, we're going to see a much higher number than that for this year. Strong cash flow generation. So we generated $21 million of EBITDA last -- second half last year, and all of the numbers I'm going to talk about here are proportionate numbers, and Espen will touch a little bit between our consolidated financial statements and proportionate numbers. And I think the consolidated numbers don't accurately reflect what our business is doing on a net basis because of some of the ownership interest between our different assets. And so on a proportionate basis, you can get a real sense of the underlying cash generation of our assets, the underlying net production of our assets, which will be different to some of the consolidated numbers. So $21 million of EBITDA in the second half, $13 million of net debt at the end of last year. So strong cash generation, low net debt, ample capacity on the debt side for our growth ambition. And between Q3 and Q4, we doubled our production as well, so 168 in Q4, and we were half of that in Q3. So fantastic growth on production. That will continue through this year. We closed 7 transactions last year. We've done another 3 this year, so we've been very, very active on the M&A side and added a significant amount of production into our asset base. We've touched on Sweden and how we've consolidated that position and really grown in Sweden, and now we're starting to spread our wings a little bit more to continue that growth trajectory in a few more countries. And you see that by us entering Finland in a much bigger way, Germany, France, stepping into solar, stepping into batteries a little bit more, and then keeping the core of the power generation assets as what we do. It feels like a lifetime ago, but we did successfully complete a $2.5 billion deal in the summer. We've got some of the same team who did that in Lundin Energy and put that whole transaction together, who have joined us with Orrön, and we transitioned the company completely to renewables, while still maintaining all of the same financial governments, the same listing, the same reporting framework and the same standards we had as a much bigger company. So we've really shrunk down the size of the business to a handful of people, and then we've grown again through our M&A phase or while maintaining that standard in terms of how we look and feel towards the external market. So some fantastic achievements last year that seemed like a lifetime ago, when we're sitting here talking about entering new countries as a renewable player today. And when we look forward at this year, so power generation second half last year, 251 gigawatt hours. This year, we're going to deliver around 800, assuming we have average weather conditions through the year. Karskruv, then comes online at the end of this year, which adds just shy of 300 gigawatt hours pushing our production up to 1.1 terawatt hours from the end of the year. And we expect to generate EBITDA, again, proportionate basis, between $25 million and $70 million. And it really depends on what power prices are as to where we sit in that range for next year. And 3 quick areas we're going to focus, and I think I've spoken about them a little bit. Organic growth because that's by far where we see the most value creation. And I think when we look at deals in the market, we're seeing large-scale greenfield transactions are trading at mid-single-digit IRRs, so very low rates of return. I think it's been a long time, since we've done a single-digit IRR transaction. And so most of the transactions we do on a reasonable long-term price are sitting in double-digit rates of return. And that's because we're stepping into things that don't necessarily hit the market. They don't go through a banking process. They're not of the scale and greenfield opportunity set that everybody is chasing in this market. We can go and find opportunities that don't exist on bank radars because they're either too small or they're not hitting that domain. We can look opportunistically at how to create value beyond just the production of an asset. And I think when we put all that together, that's why organic growth is so key for us. Further M&A for sure. Greenfield opportunities for sure. So I think on that note, I'm going to pass probably to Carl and Jonas in a second, and they're going to talk us through a little bit more around that organic growth and platform for growth that we've established, and dive in a little bit more into the people assets and opportunities that are going to make us tick. We've touched on most of this before already in terms of the production growth, and you can see there by quarter how much we're planning to do in each quarter. And so with that, I'll introduce Carl and Jonas, who are going to come and join us for a bit of a discussion. I think between them, we agreed this morning, there's around 40 years of renewable experience between the 2 of them. Carl from an engineering and technical side, having worked in the industry for 15 years. He's touched around 200 transactions, I think, across the Nordics, primarily in wind, but in a range of other technologies. And Jonas, although he looks young and sprightly today, he's got a few more years' experience in the industry and has been 25 years with primarily wind power around Gotland. And some of the early developments of wind power in Sweden were handled by Jonas, whether it's greenfield projects, whether it's development opportunities. You go to some of the sites that we have in -- now sitting down on the southern tip of Gotland and you see the evolution of wind over 20 or 30 years from old single blade. I don't think we've got a single blade, but 2-bladed turbines up to the modern technology. And I think Jonas brings that depth of competence from the industry in Sweden. And that, coupled with Carl's background from the engineering side, is a fantastic platform for us to grow. So I'll leave it to the 2 gents to continue.

Thanks, Dan. Thank you. We're happy to be here in front of you, and I feel a little bit humble. The 200 projects that Dan mentioned that I've touched all of them, of course, Jonas have already looked at in his career. So very nice to be here with Jonas. And as Dan has talked about, we will focus on the organic growth side and why we think, or we know or any sort of in a very good place to leverage our assets and resources we have in the organic growth side. I think on -- we need the clicker, Jonas, you have that. We will do this in the form of a panel discussion. So it's not that we have a lot of slides to show you, but we will talk you through our view on this organic growth. And as Dan touched upon in his intro, we see 3 main pillars here, the people's asset and capital and what struck -- has stricken made through the tenure, I've been with Orrön [ SD ]. When I started, we had some of these elements in our company, we like Dan touched upon and Espen will expand, and we have a strong capital base. We had assets we come in with and certainly people with certain experience with industrial background from building companies. And then we met Jonas and his team over the summer.

Yes. And I mean we will focus very much on what we do in Sweden, and the platform that has been established actually via emerging. I mean we're talking about the 2 companies. But my background is with since 2015 with the Slitevind, and Slitevind acquired by Orrön. We merged in September. And the beauty of this is what we think that the 2 organizations can do together. And we will -- I think we will try to -- we have people, we have assets, and we have capital. And if we use that in the right way, we can achieve quite a lot. And we will try to talking organic growth and organic growth potential, we see what we can do with existing assets and we see what we can do with new projects. And if we are lucky then, we can -- if we can create more values with bases in the people we have, the assets we have and the capital we can use, if we can do that in Sweden, it's possible that, that can be done in other countries as well. And existing assets, we see -- what we will try to explain as the -- to consolidate -- we see a competing with the financial investors, accepting lower IRRs than we do. We try to avoid that via acting in the niche of small, midsized projects. And if we invest in existing turbines, typically operational for 5 years, 5, 6 years. We like to buy -- we love to buy 100%, but we also like to buy 40% out of, say, 10 turbines.

And I think that's the beauty of this model that you have been running in Slitevind. And we have since continued on is that, okay, every single deal, every single producing asset that we have acquired makes sense in itself as a producing asset, but it's really leveraging those. I mean we see when we buy 40% of an asset, we see the opportunities to add our ownership in kind of the consolidating part. We see that we can -- it's not only an asset in terms of producing capacity, it's an asset in terms of a grid connection. It's an asset in terms of connection to landowners, land leases that we can build on to leverage that those producing assets into something beyond the gigawatt hours or megawatt hours each single asset produce.

Yes, buying a 40% stake, normally, we have -- it's -- the normal case is that we have 5, 6 owners. On the other side, it's not that we have 40%, and then there is a majority owner at 60%. So we buy 40%, and we become the largest owner in that wind farm. Normally, we operate the full wind farm, and it gives us opportunity to consolidate within that asset. We buy it on the IRR. We think that we can reach on the 40%. We add management and operations, and then it increases our opportunities of what to consolidate within that existing asset.

And I think we -- correct me if I'm wrong, Jonas, but Espen will dig into the capital side and which Dan touched upon. But you did this very successfully in Slitevind, of course, but I think one thing that we really demonstrated now over the fall and over the winter with the 10 transactions mentioned is the -- kind of that -- combining that with the skills you had and now the assets, we have been able to really leverage and make quick returns or quick returns -- quick investments. And yes, 10 deals in roughly half year is quite something, I think.

Yes. And to buy existing assets, to consolidate then via increasing ownership over time, is something we have worked with since 2015. But together with Orrön, and I think that the opportunity of really also what we call extension projects, we haven't really seen that. We have had our hands full via buying more into more projects and then increasing ownership. But to really -- what I feel that with Orrön's perspective, see the opportunities in doing more in existing grid connection, adding solar, adding batteries to create more values. That is really the perspective, I think, you have brought.

And on the brownfield side, I think maybe that's not typically seen as a organic growth because, okay, it's acquiring new assets for us. But we see it as organic growth as we could not really have done that without the likes of -- you onboard with your network because like Dan also commented on, we get access to, I mean, co-owners in the project or neighboring projects on Gotland or in Sweden. And we -- through this network, we were able to pick up this kind of off-the-market project that typically they may not have been considering selling them, but we call them up and ask for a coffee. And all of a sudden, we have a gigawatt hour more.

It's definitely a different way of growing compared to competing in the larger auctions in the larger M&A processes.

And then, of course, we will come into that on -- when we talk a little bit more about the people. But I think also -- we have these 3 pillars with the consolidation and the brownfield and the expansion project. But can the fourth cornerstone, if you will, I mean you've been part of wind company since the mid-'90s, which develop greenfield projects and seeing that we have that competence in-house. And okay, it's not the near -- very near-term generation. We will see coming from greenfield, but it definitely makes sense to do it to add the mid- to long-term generation, I think.

And for us, it has been really the lack of resources. I mean we have seen the 4 pillars to add -- to increase ownership in existing assets, to expand by adding solar batteries. What more can we do?

Frequency.

And of course, to then enter into new, we still view it as organic growth, buying into smaller, medium-sized projects and greenfield. We have a greenfield in our DNA. But I would say that it's after the -- when we joined forces that we really see the opportunities of using these opportunities and converting them into actually projects that we then in the next step can invest in.

I think one beautiful example on how all of this is also tied together is one of the acquisitions we made in winter, where you could then see it as a consolidation project. You could see it as a brownfield opportunity. We bought the company, which had some 45 gigawatt hours of producing assets. Some of it was part of projects we already have the ownership in. So we had consolidation in that. But that also brought us completely new projects into our portfolio. And we can build, of course, on that with -- its new network coming with that, its new grid connections that we can utilize through expansion projects and basically new competence in the company. Yes. And I think that constantly growing that network is very important in order to succeed on this organic growth. And it's not only -- I mean it's a very vital part here in Orrön -- in Sweden with the organization, but I think it's also fantastic to see all we're being through the Lundin legacy and the Lundin Group of Companies. We have so many -- I mean Robert mentioned, we have a large shareholder base, so we're being called or getting e-mail from shareholders telling us that they have land that they could offer to -- for us to build wind or [ PV ] on or if it makes sense from the finance point of view. But also Canada, we have this international outreach, which gives us -- brings us opportunities, I think, in that field.

Yes. And we can approach a project from a brownfield. I mean buying a new project, we can approach it from adding a new technique to existing grid connection because the thing is that we know that solar and wind work very well together. Or we can -- via existing, as you said, existing network. Then the neighboring project is -- we find land not used, and then we can start a development project from scratch.

And I think we saw this -- I mean you and I met quite early before we joined forces, and I realize quite soon that although I'm not a long tenure with Orrön per se, but I saw the same sort of entrepreneurial match in a sense in the -- you have created companies. We have bought companies or other, made other investments with also people that have built companies from scratch. And I think that ties very well into the kind of history of the Lundin Energy's history.

I think that in future slides, we will show how to combine the different pillars to create growth. But yes, we have in Slitevind from 2015 until 2022 when we actually merged with Orrön -- when Orrön bought Slitevind in September. We started off with 75 gigawatt hours in production capacity, and then we reached some 450, which is actually 8 years, we averaged a 25% growth, which is with only actually using 2 out of the, so to speak, 4 opportunities. And through that process, we had other companies approaching us, and we weren't that interested in the company. We weren't really for sale. And when Orrön came into the picture, we quite soon felt that the -- it's a good match in terms of the entrepreneurial approach. And then it was fairly easy to -- it has been easy to become a part of the Orrön Group [indiscernible] Energy.

On both sides, also it's almost like a childish drive to kind of do something fun and do something great and I think...

Do more.

And do more everything, like my kids more all the time. But I think it's fun to see that okay, we can do the M&As within now -- we have great connections in the -- to get financing. But we also have the technicians right down to the nuts and bolts and the kind of some of their assets of their baby -- the assets, they manage is their babies that they want to take care of and be kind of brag to the other guys my asset is producing a set of yours.

[indiscernible] is needed being able to do many small-scale deals. We need to be very efficient in due diligence. We need to be quick. Otherwise, we would have to change too much money to that specific investments, if we were to use external consultants. So the setup we have, we need that setup being able to do a lot of smaller deals. I mean because these are the ones we are talking about. Then, of course, there can be more large-scale M&A as well, but this is really focused on the growth in more small-scale -- the small-scale opportunities.

I think if we look at the, let's say, next pillar then and as we talked about, as Dan then explained today, we have 90% of our generation capacity comes from wind. And I'm quite certain that the future won't look like that, and this is also where we're tying back to this kind of leveraging our assets not being only a generation capacity, but actually being a grid connection or a land lease or land leases and connection. And I think we have no certain, let's say, mandate or clear boundaries where we won't go. But I'm fairly sure that our focus in the in the near-term, at least, is still driven by kind of where do we find the lowest cost of energy probably. Although we want to -- we are happy to take, let's say, adopt technology early in the process. We would look at probably more commercialized technology than taking too much of the technology bets, but I think it will be interesting to see how our asset base will evolve over in the next years.

Yes. And I think that because we see so many opportunities where we are we have, we can do more wind. There are more investments to be done in our niche. We can add solar within existing connections. And we can invest, of course, in stand-alone solar projects that we develop or that we or someone else develop. And then if we do that, add storage, and we would love to. And then we just want to -- from our perspective, we just want to get the first solar plant connected within an existing grid connection. And we have a very good lead on Sudan, where we have a lot of wind turbines and where it's sunny. And then we also want to do -- to make all our -- a large part of our production fleet available to the frequency market.

And what's fun fine with the frequency market at least, I mean it's a way where we can add revenue streams to our current portfolio to with almost no to little investment, where we can use, for instance, our soon to be [indiscernible] turbines or MLK turbines into the frequency market already now because they are equipped to deliver balancing services to the grid. And -- but it doesn't stop with those 2 projects. I mean we are in dialogue with both turbine -- our turbine suppliers, our turbine manufacturers and the grid companies and so forth on, and see, okay, can we use this asset for frequency? Can we use this for frequency? And some are easier than others, but definitely doesn't stop with only [indiscernible] MLK.

No. And also, I think adding more generation, that is, of course, our core, we want to produce a lot of energy investing in storage batteries. It could be other sources as well and entering the frequency market. But then in parallel, of course, we always want to optimize revenues. But it also -- scale is also fairly important in that sense because we are talking about a lot of units at a normally smaller -- I mean not huge average price. So I mean we need a lot of units and then to finetune and to optimize revenues. It could be -- as you said, it's to participate in the frequency market, but it's also things like being more active when it comes to GoO's. I mean GoO's, Guarantees of Origin and things like that. And then scale important.

And I think all of these generation, the storage frequency, power -- revenue optimization, power trading is a little bit interlinked because we see -- if we look at some of our assets, we will not be able to do a full-on repowering with a larger turbine because they may be in very populated areas or sensitive areas for other reasons. And let's say, when in due time or when time comes, we -- it may be that we replace an old turbine, old megawatt turbine with one single battery. And that battery would then, let's say, prolong the lifetime of that asset, being the grid connection and the land, but kind of enable us to tap into a different revenue stream in that project.

Yes. And to use our grid connections in for eternity, so to speak. We can -- we will always produce in one way or the other. We will always use the asset in one way or the other.

And I guess that's maybe a good transition here because I think that's a very important thing to remember. Like when we look back at maybe some Lundin Energy’s production forecast, we have a depleting resource in oil and gas. We have a reservoir where sometimes it ends, but we -- on our assets, we have a never-ending resource, we have an internal resource and our duties to kind of make sure that we can harvest, utilize that if not eternal, but as long as possible. And so we should never -- I mean we should never see -- although technologies will kind of degrade over time, we need to replace those. We need to optimize the assets, and we should never see a decline in kind of forecast on our generation side, I would say.

And organic growth from our perspective, we buy a project. So that is a brownfield acquisition. If it's not 100% owned, it adds a consolidation opportunity that we can then over time exercise. For every new project, I mean the background with Orrön, 2 -- I would say, 2 assets, it's maybe 6; 2 assets, 4 opportunities. If we have a small scale then we have more assets than its 30 assets, its 60 opportunities, assuming that we could add battery or we could add solar. So it is a large number of assets gives us more opportunities.

We're soon going to round up. But I think one thing to mention is that the brownfield and the consolidation that is happening and has been happening all throughout since we met you guys basically since we joined forces. And we are maturing projects on the expansion side, like you mentioned, the Sudan co-location projects. And the greenfield, we're also starting and looking at some real firm opportunities on that. But of course, seeing that generation capacity, adding to our EBITDA in the end, that will be a little bit a few years ahead depending on which project you look at batteries, may have a permitting process of less than a year in Sweden. But wind, 10 years or 8, 9 years. And of course, policies can influence that hopefully to the better.

And just short referring back to my background with Slitevind than the 8 years and 25% average growth, that was only really exploring brownfield acquisitions and the consolidation opportunities. Then, of course, 25% is a very high number. So that's not what we're seeing, but we will add more tools with the opportunities of expanding within existing projects and also the greenfield opportunities.

And maybe just then to round out our chat here. Dan talked about we're entering Finland in more heavy fashion and France and Germany, and we see no real reason for when doing. So we will make new -- we will build a new network of contacts. We will have new assets through this. And although maybe a different starting point with greenfield in France and Germany, that -- through that network, we will be able to hopefully adopt the same sort of growth platform, growth strategy on the organic side even in new markets, I would say.

Yes. And we think that the setup that we have talked about now is actually the setup we have for Sweden. We have the people. We have the assets. We do have the capital. But if we are to explore these opportunities and trying to do the same thing in other countries, then actually, I think it's time then to dig deeper into the pockets and see what we can do in terms of capital because then we need even more capital.

And that's maybe the transition to you, Espen, who's going to talk to the capital side of this. Thank you so much.

Thank you, Carl and Jonas. And yes, although we need a lot of capital for the growth, and we are indeed fully funded for all our growth plans, our business plans, so we will dive a bit more into that through this session. We'll look into our '22 financials, the actuals versus guidance and also spend, of course, more time on the outlook, guides for '23 and onwards. And I'm sure you will see as we go through these slides that the company is in a very, very robust financial situation and provides us with a lot of flexibility and opportunity that we can act on going forward. So just a few highlights describing our portfolio, our company at the moment. We have a portfolio consisting of long-life assets, where the majority of these assets are positioned in regions where historically, we have achieved the premium pricing compared to the average system price in the Nordics. And of course, that will increase even further as we get [ closely ] onstream at the end of this year. As Daniel mentioned, we have full discretion when it comes to capital spend from the end of this year. So the only firm capital commitment that we have left now is related to the Karskruv development, where we'll have the remaining CapEx throughout this year to get that project onstream late 2023. And beyond that, we have full discretion. So no firm capital commitments, and we have full flexibility to adjust our spend according to prevailing market conditions, according to the opportunity set that we have. And obviously, the capital that we will spend on greenfield and new initiatives that we have announced today, it will be -- we will only invest in projects and initiatives that we are convinced will create a significant shareholder value. But it will also be, at least for the first few years, very different scale compared to the CapEx that we have for the Karskruv in 2023. So the sum of this, I mean long-life assets, premium price regions, full flexibility on capital commitments, no firm capital commitments from '24 onwards, means that we will have -- we are very well positioned to have a very strong long-term cash flow generation. And this is further improved by tax balances, which we'll touch upon later in the presentation. We have big tax balances, especially in Sweden, where most of our revenues are coming from, meaning that sort of the after-tax cash flow, the amount of EBITDA that we are converting into free cash flow for further growth and shareholder value will be very high going forward. And we are not expecting to be in a taxpaying position for quite a few years, especially in Sweden. And then of course, all this then -- when you add all this together, we have a very significant debt capacity to fund the growth, which provides the flexibility we need, to follow up on initiatives that we think will create shareholder value long-term. And currently, based on our current portfolio, based on our current assets, we see a debt capacity north of $250 million. And obviously, as we go along and do acquisitions and acquire cash flow-generating assets, that debt capacity will increase over time. Just a few -- just wrapping up on the fourth quarter '22 and second half, a few financial highlights. I mentioned it already, Dan mentioned it, we had a power generation of 168 gigawatt hours during the fourth quarter. Also a significant increase compared to Q3, so a doubling versus Q3 driven by the fact that Q4 had 3 months of contribution from our acquisition, so sort of full quarter, which is representative for our portfolio going forward. 168 gigawatt hours at a realized electricity price of EUR 88. Very strong price realization in a historical context. But we also observed quite high sort of cannibalization and price volatility during the quarter, which we'll also touched upon a bit more in detail. But all in, very high and strong price realizations during the fourth quarter and second half. We had CapEx of $7 million and operating expenses of $3 million for the fourth quarter, both coming in, in line with guidance or below for the second half and we also -- for the second half of '22, so I'll tell you looking at the period when we pivoted into being a renewables company from end June. We've seen strong cash generation with our CFFO or cash flow from operating activities on a consolidated basis of $19 million, and a proportionate EBITDA, so the EBITDA generated from our net ownership in our assets of $21 million for the second half. All this then resulted in us ending the year with a very low net debt. So ending the year with very low leverage, $13 million of net debt on a proportionate basis. And as mentioned, we see our debt capacity of north of $250 million, providing the flexibility we need to follow-up on further organic and inorganic growth as we see the opportunities arise. Just quickly on our '22 outcome versus guidance and also how we -- how is our outlook is for '23, and just starting with the conclusion. We delivered ahead of guidance for '22 on all items, had operating cost below what we initially expected for the second half. G&A was in line. And then we also spent less on the Sudan legal cost than what we're guiding for the second half of '22. And then also CapEx, as mentioned, $7 million below what we were expecting, mainly impacted by some phasing and currency impacts. And the corresponding outlook then for '23 is guidance. Operating cost of EUR 12 million to EUR 14 million. We'll touch upon that in a bit more detail later in the presentation. We see G&A of EUR 10 million, excluding noncash items. Sudan legal cost of EUR 8 million and a CapEx of EUR 80 million, which will also discuss more in a separate slide. But with the lion's share of those EUR 80 million being related to the Karskruv development, as I said, which is the final year of sort of Karskruv CapEx this year before it comes onstream later this year. Here, we're showing some key financial metrics, revenue and EBITDA on a proportionate basis and then the CFFO consolidated or as we report in our financial statements. Firstly, on revenue from electricity generation. As we mentioned, we had a doubling of power generation from Q3 to Q4. We also had a -- we also saw a lower realized price of half of what we had in the preceding quarter. So all in, sort of flat development in revenue from electricity generation from the third quarter into the fourth quarter, $15.3 million for the fourth quarter leading to an EBITDA of $9.7 million. Slightly lower EBITDA in Q4 versus Q3 because we had some higher costs also linked to the higher volumes, but everything was according to plan and guidance, as we saw in the previous slide. And very strong cash flow generation. We had cash from operating activities of $13.7 million for Q4, significant up from Q3, which is due to the fact that Q4, as I said, first quarter with full contribution from the acquisitions that we did since end June '22. And also, we had -- it was also positively impacted by working capital impact. Bit more details on our price realization for the fourth quarter of '22. You see the first bar to the left, that's the average system price in the Nordics for Q4. That was EUR 135 per megawatt hour. The fact, as I mentioned, that our assets are located in regions where we enjoy premium to the system price, lifted our spot price for our assets by EUR 10 per megawatt hour to EUR 145, before we have those items affecting our price and leads to the all-in realized price. And the first one being hedging. The EUR 14 per megawatt hour of negative impact from hedging during the fourth quarter, these are hedged contracts that are linked to acquisitions. And then important to note that for 2023, these hedges, they represent less than 5% of our production volume. And we don't have any hedge contracts maturing after '23. So we see this as a very sort of temporary and low impact for '23. And as Daniel mentioned, our current strategy and policy is to stay for the merchant, and that's what we'll continue to do going forward. But we'll have this hedging impact, albeit smaller than what we see in Q4 rolling -- continuing into '23, but rolling off as we go towards the end of the year. There was a high-price levy introduced in Norway in the late September last year, impacting our Leikanger Hydropower assets and reducing our all-in realized price by EUR 1. And then we have a capture price discount of 42%, which was sort of historically high actually in Q4, last year driven by very high underlying prices and also high volatility. And this is just -- the capture price discount is -- ease to explain is just the timing impact. It's the fact that the majority of our electricity in some periods are generated when the realized prices or the prices are lower than the period's average. So sort of the pure timing of what the price -- the impact of what the prices are when we produce compared to the average for the period. And in Q4, as I said, abnormally high impact of EUR 42. But again, that is driven by the high underlying prices, so the all-in realized price. And that's what matters at the end of the day, still were the strong at EUR 88 per megawatt hour for fourth quarter. Just another additional sort of level of detail when it comes to the capture price discount, as I mentioned. Here, we have looked into the history of how that has evolved in the past. So that Swedish average capture price discount for onshore wind is marked by the red circles in the chart. And you can see that, especially for '22, it has been sort of unprecedented compared to previous years. But please then keep in mind that how the prevailing price environment is. So the yellow line is the system price for the same periods, before the capture price discount, and the green bars is then the realized system price, if you deduct the capture price discount. So yes, we have had high capture price discount during '22 and especially then the second half. But as I said before, it's also driven by the very, very high underlying prices and high volatilities. So all in, also realizing very strong pricing. As I said, that's what's driving our cash flow and our revenues at the end of the day, as we are fully merchant. And this slide shows our underlying cash flow generation for the fourth quarter due to the fact that we have a couple of assets where we are in joint ventures. We think this is the sort of most -- best proxy for cash flow potential that our assets can generate during any period of time. Start off with the revenue. We had $17.3 million of revenues for the fourth quarter, including other income. Then we had operating costs, so G&A, as previously explained or mentioned as we were. It was as planned or actually below guidance for the operating cost, leading then to an EBITDA of $10.5 million for Q4 when we exclude noncash items. Q4, we had a current tax of $0.6 million, which was significantly lower than the preceding quarter. We had a quite high current tax in Q3. This is driven by the fact that we are only in cash paying position for our Leikanger asset in Norway. And that being a run-of-river hydropower plant, they have high seasonality and the output typically significantly higher production in Q2 and Q3. So our Q4 current tax was very low. Leading then to an operating cash flow, just shy of $10 million for Q4. So that's the underlying cash flow generated to us from all the assets where we have ownership in. And then our costs that's funding is the net -- we had net interest expense. We had the CapEx, meaning an all-in operating cash flow after all our costs are paid for and also after the CapEx that went into our Karskruv, our river future production was positive for a quarter at $3 million. So underlying positives out of free cash flow after also investments into new generation. So a very good outcome for the fourth quarter. Let me have a look at how that sort of then transforms into our cash position and liquidity. We'll look into that on this slide and the following. And Q3, we had a cash position of $62 million. Then we had a cash flow from operating activities, as I mentioned, of $14 million during Q4, of which $5 million is related to positive working capital changes. We had investments into new generations of the Karskruv development, $7 million for Q4, and we made acquisitions of $29 million. Those are acquisitions that we announced in conjunction with the Q3 release in November last year, mainly the Siral and Lilla Årås and then Sudan totaling $29 million. These are acquisitions that are increasing our power generation capacity significantly, and will contribute in a very good manner to our cash flow in the coming years. All being in our view, very, very good and value creative transactions. Then we had -- still having some sort of impacts from the E&P transaction that Daniel mentioned that were closed in June last year. This is sort of the last bit; it will be very limited from Q1 and onwards. But the $16 million of CFFO from our discontinued operations is related to sort of an ordinary settlement related to that transaction, which I said closed back in June, and we don't expect any large impacts going forward. Had an increase in debt of $4 million and some small other impacts leading then to a year-end net cash position of $29 million, when we ended 2022. And how does that translate into net debt? We had then, as I mentioned, the cash position year-end of $29 million. We have a debt position of $60 million. And then we have $18 million of cash in our joint ventures, which then leads to a very low total net debt position of $13 million, which -- and then compared to, as I said, the debt capacity of $250 million provides us with a lot of headroom, a lot of availability and flexibility when it comes to liquidity. We currently -- as you can see there on the chart, we have currently a total liquidity of more than $100 million. But we are working -- we are in the midst of refinancing our external debt due to the fact that they will put in place for the acquisitions initially. And we're now working to replace that with a facility of larger size and also a longer maturity, which we will conclude before summer. I mentioned tax balances earlier. This shows what they total in each country or in each jurisdiction where we have operations. We have tax balances related to the CapEx that we had in each country related to the development of the assets. We also have -- for Sweden, we have the future CapEx, which will -- the CapEx we will invest in 2023 for Karskruv. And we also have a loss carryforward position in Sweden related to previous year's costs, which we can utilize for tax purposes going forward. And this means that for Finland and in particular for Sweden, we don't expect to be in a taxpaying position for quite a few years, which means that we will have -- I mean this is a significant boost to our cash flow. As I said, a very large portion of our EBITDA generation is then converted into after-tax cash flow, as we sort of have these massive tax savings year-by-year. In Norway, we are actually in a taxpaying position. That's more a technicality since there's a very -- your tax balances are depreciated over many years, over a very long period of time. But that is the only region, only asset where we will be paying tax sort of short to medium term. On the CapEx side, I mentioned that we have a guidance for next year of EUR 80 million. The majority of that is related to the Karskruv developments. As I said, this is the last year of costs related to Karskruv, and we don't have any commitments than any firm commitments from '24 onwards, and full flexibility in terms of what we are investing in from next year and in the future. We expect a slight overweight for the first half of '23, when it comes to CapEx. But eventually, this is sort of driven by the -- by how the development projects or proceeds, but this is how we forecast it. So quite evenly distributed, but a small -- slight overweight on first half, and then EUR 80 million in total, where we also allocated a portion to greenfield investments, the initiatives that we announced in the report today. Daniel mentioned sort of the initiatives from governments across Europe. We have seen higher -- we have seen increased taxes. We've seen surtaxes. We've seen some high price levies being introduced on the back of the historical high electricity prices; we've had over the last 18 months. And we have shown you -- we are sharing the details here and also then on the same slide showing how a large portion of our '23 power generation that relates to each of the 3 countries, where these tax changes actually have an impact on our cash flow. But I think the key takeaways here is that all these measures that have been introduced, they are temporary. Like for Sweden, it's -- it will last from March to June in this year at the longest, it might be shorter. For Finland, it's '23. And in Norway, the high price levy is expected to removed before 2025. So temporary measures compared to very long-life asset base of decades of production. Secondly, most of our power generation and cash flow comes from Sweden, and it's definitely Sweden, which has sort of less -- the least impact on our cash flow if you look at these tax changes, since it's a very high price cap of EUR 180, and it only last from March to June. And then thirdly, I mean the price caps, the limits where the surtaxes and the levies are actually kicking in, are at very, very high levels when compared to historical prices and very high levels compared to sort of our -- the prices we require to achieve significant returns on our investments and projects. So all in all, we think this is -- we see this as having minimal impact on our overall value and cash flow generation based on the -- due to, as I said, the composition of our revenue and how these proposals are for the 3 different countries. Our operating cost guidance for '23 is EUR 12 million to EUR 14 million, and the reason that we are providing a range is due to the fact that a portion of our operating cost base is linked to prices or volumes. As you can see in the pie chart on the right-hand side marked in red, the components of our cost base, which have a link to price and/or volumes. So if we're assuming a price range and an achieved price between EUR 70 to EUR 125 per megawatt hour for '23, we expect to be in the EUR 12 million to EUR 14 million range on operating costs. And in addition to the price link, there's also sensitivity related to volume. So higher volumes will typically increase our operating costs. And there, we see that plus/minus 10% in volumes is expected to have a EUR 1 million corresponding impact on operating costs for '23. So if you take all of this together, all sort of the components of the guidance and the outlook, and bring it together into a cash flow outlook for '23. We are expecting at achieved prices from EUR 70 to EUR 125 per megawatt hour to generate an EBITDA of between EUR 25 million and EUR 70 million for '23, as mentioned. And then to bridge from EBITDA to the free cash flow, you need to deduct what we expect to have a payable tax in '23, which is EUR 9 million, and that's related to the '22 results from [ Leikanger ]. So we are paying -- we will pay tax in '23 based on the '22 results and similar for '24 going forward. But -- so EUR 9 million is what we expect for '23 cash outflow. And then we also expect to have a net finance expense in the order of EUR 6 million, including costs related to refinancing. So that's taken into account there. So if you then bridge from EBITDA to the free cash flow, we expect that the same price range to achieve a free cash flow of between EUR 10 million and EUR 55 million, depending on whether we realize a price of EUR 70 million or EUR 125 million for the full year on average. And then I think it's very important to note that from '24, we will have a 40% increase in production. And we know that, that production will come from Karskruv, which is in SE4, the sort of the southern price region in Sweden with premium pricing, and also lower operating costs than the rest of the portfolio. And as we have mentioned a few times, full discretionary capital spend from '24 onwards, meaning that we have full flexibility. And we will adjust according to market conditions and opportunity set, and obviously only invest into projects, which where we are convinced it will create value for our shareholders. So -- and combining also with the tax balances as we touched upon, I mean we have a very strong outlook in terms of long-term cash flow for decades to come. And we think we have a very, very strong basis to create a lot of shareholder value. And also, this also gives us significant flexibility in terms of pursuing our growth strategy, both organic and inorganic. So with that, I'll leave the word to Daniel for some concluding remarks.

Thanks, Espen, and I think we'll move very quickly into Q&A and wrap up the session. But Orrön's had a fantastic start as a company, I think, rolling back to only 6 or 7 months ago when we first started as a renewable company. We've established a platform in Sweden. We've grown production from 300 to 800 gigawatt hours. We'll continue that growth of 1.1 terawatt hours, and we've got a fantastic outlook in terms of cash generation and debt position to be able to grow. Today, we've planted a few more seeds in terms of that growth platform. So we continue doing what we're doing in Sweden. We take that model and spread it out to a few more jurisdictions, and we keep spreading our footprint across Europe. So it gives us a fantastic platform for moving forward. We're delivering on everything we set out to achieve in the summer of last year, whether that's mergers and acquisitions, whether it's consolidation opportunities, new projects, greenfield opportunities. And finally, we are fully funded. We don't need to step into equity markets or raise financing to meet our ambition level. And I think a testament to us being a unique investment opportunity, the market opened today, and we traded 3 million or 4 million shares within the first hour of opening. We were 20 million shares traded today; I think. Although I haven't checked recently, but I think we're one of the most traded stocks on the NASDAQ today. And so it gives investors and shareholders the ability to step in and out of the stock. It gives you fantastic liquidity, which, for the size of company we are, we don't see elsewhere in the market. And when you couple that with the backing from the Lundin family, the growth outlook that we have and the capital flexibility we have. I think you do have a unique energy transition investment, where you can play power prices, you can look at growth and upside, you can look at this entrepreneurial vision stepping into the industry in a different way, where we hope to create value for shareholders in the years to come. And so with that, I think I'll pass back to Robert and invite the rest of the presenters up, and we'll move into Q&A.

Yes. Thank you very much. And as Daniel said, all of our presenters come up here, Espen as well. Fantastic. Thank you for listening to that presentation. Now we get into the interesting part here with Q&A. So I hope we'll have a lot of good questions, certainly some coming in from the webcast attendance, and we have a microphone that will be passing through the room. So wait for the microphone to arrive, so everyone can hear the question, also the ones participating online. And I think it's nice if you can state your name and the institution, or if you're a private investor, so we'll know who's asking the question from the room at least. So with that, hands up. Any questions? Yes. I think we start with Nash in front here, and there's a microphone coming.

Can you hear me?

Yes.

Yes. Nash Cui from Barclays. I'm equity research analyst. Thank you, Dan and Tim for the detailed presentation. I have a long list of questions, but let me start with 3, if that's okay. The first one is on your organic growth strategy. So I just want to understand, what triggered that because there are some very big players with stronger balance sheet, with large economy of skills. There are some local players with decades of experience. I just want to understand what's your comparative advantage there. Then the second question is around your pricing strategy. Because your net debt will grow with capacity growth, but you don't know the power price in 2 to 3 years. Will you consider PPA price? That's Part 1. The Part B is just going to Slide 8 of your presentation, your EBITDA guidance for 2023 for that EUR 25 million to EUR 70 million guidance there, you assume a power price of EUR 70 to EUR 125 per megawatt hour achieved. And I look at the power price spot is around 80, forward curve around 60. So I just wonder, how you feel about that? What's your discount rate you applied over there? So that's second question. The third question, I just wonder, if you can get an update on the Sudan legal case?

No problem. I'll start with some of those. I've had to jot them down, Nash, because there's a few questions in there. No problem. I think organic growth for kind of this model has been worked for decades in the lending group is to step into assets where you potentially see more value than other players in the market. And if I step into some of the assets, we bought Lundin Energy, for instance. We stepped into 5 or 6 people who have an exploration portfolio and turned it into a multibillion-dollar company. Well, why can't Shell do that? Why can't Exxon do that? Why can't others do that? They absolutely can, and there's other players in the market who can follow that same journey. But I think we're bringing a team, and you saw a bit of the competence we have in the team today from operating the assets all the way through to financing and doing deals and looking at these assets critically to find avenues where we can put more value through them. If I look at a grid connection, why are we not using that grid connection to its maximum capacity? Why are we not adding new technologies there? When I look at developers, developers can't easily own a producing asset. Financial players can't own assets that don't necessarily have PPA and full structured finance behind them. Yet we can step into all of those things. Distressed assets, sometimes they don't fit within the balance sheet of a major financial player. So I think our advantage is we come in with a different mindset into this industry with a very entrepreneurial view to go and create value where others potentially don't see value. And I think there's been decades of doing that within the Lundin Group, which adds to our competitive advantage, I think, in that domain. I think I'll deal with PPA, and then I'll pass to Espen for debt and pricing. But my view on PPAs, I don't think we will step into PPAs today. We don't see -- if I look at the long-term or our long-term outlook for power pricing, I still don't necessarily see PPAs trading at where we see the fundamentals on power price. When that gets to the same level, maybe we will step into PPAs. If you look at some of the major transactions we look at, if we put our balance sheet under stress than we potentially need from a risk-reducing measure, we need to lock up some of the pricing to ensure the company stays healthy and sound throughout that. But we're not in that place today. And actually, what you've seen on the slides today is we're not -- although we're looking at large-scale M&A, actually, what we're doing is value creation from its grassroots level, where we're building portfolios, we're building opportunities with smaller bites, which means at this stage, we don't have a balance sheet that's under stress, which means we don't need the hedging to go and lock up the power price. And if we look back through the last 2 years, have we placed a hedge in place at the end of 2020, we'd be out of the money hugely in 2021. Had we done it on the record pricing that was there at the end of 2021, we'd be an out of the money in 2022. And I have no idea where power price is going to go in the future. And from a risk perspective, we need to manage our balance sheet at the right level to make sure we don't put the company under stress. Debt levels, pricing discount rates?

Yes. No. So when it comes to debt, and you're right, Nash, I mean, we expect our net debt to increase in '23, obviously, because of the Karskruv CapEx. But still, we are -- then we have a CapEx guidance as you've seen of $80 million -- sorry, EUR 80 million, sorry. And comparing that to the cash flow generation that our portfolio has a potential to produce and especially taking into account that they're increasing from 800 gigawatt hours to 1.1 terawatt hours at the end of this year. I mean we will also delever very, very quickly. So the CapEx -- the Karskruv CapEx in itself is a very, very small component compared to our debt capacity our portfolio has today. But of course, when it comes to debt levels, I mean a bit related to Dan's comment, we are managing that we need and we will manage our balance sheet in a conservative way because we are -- we have also a strategy and policy of being fully merchant, which also means that we need to withstand parents and lower prices as well to be able to capture the parents of super profits when the prices are high. And yes, when it comes to price assumptions, I mean, yes, we're fully aware. I mean there's been extreme volatility lately. And of course, the future recurs are moving, can move 20%, 30%, 40% within a day or 2 or a week. That's also why we are providing a range, so it's easier for you to sort of see how the sensitivity plays. Of course, we monitor this very closely, and we look at all scenarios, when we do our internal financial planning to ensure that we have the liquidity headroom that we need and which we are very comfortable with.

Looking at pricing, SE4 pricing today, for instance, was EUR 100 a megawatt hour for the full year going forward. So I have no idea where we're going to land through the course of the year. We'll be higher likely in the winter than some of the summer. But we're still seeing strong pricing on the futures market today.

What's your assumption on the capture price discount for 2023?

Well, when we refer to the EUR 70 million to EUR 125 million, that's an achieved price all in achieve. So in there, you have blend then you have the regional differentials, and you have the capture price discount already. So it's sort of irrelevant for the cash flow range that we are providing since everything is already reflected in there. But we are -- as I said, we expect sort of periods of very high capture price discount. We also expect to go partly hand-in-hand with very high underlying prices. And we're already seeing throughout January lower capture price discount compared to the extremes of Q4. So -- but for the guidance that we have provided today, the spread of cash flow outlook for '23, the capture price is going to be sort of irrelevant because it's an all-in achieved price.

Thank you. And then I think, Dan, there was also a question on an update for the Sudan legal case?

Yes. So the Sudan legal case, I think the first thing to note on the Sudan case is that, in our view, the -- and our legal team's view is that once we get the case into a court in front of a reasonable set of judges, I think we will prevail in that. The individuals that have been accused have done nothing wrong. We've gone through all of the 70,000-odd pages of evidence with a range of legal teams. And so our strong position is that in the fullness of time in front of a reasonable set of judges, we will prevail. Notwithstanding that, we will end up in trial in September of this year, 5th of September, in the district courts, and we need to let this process happen within the Swedish court system. The guidance we've shown here takes into account that. And ultimately, once we finish in the district court, assuming we're successful in the case stops, then our exposure to the legal case will disappear. Important to note that the company is defending the individuals. The company is not actually on trial. And so once the individuals are acquitted, the entire case will disappear for company and individuals.

Thank you. I think we continue with more questions here. So I saw some hands up. Niclas is next up, I believe.

Niclas Wahlström, Pareto Securities covering over here. Just to start off, I want to talk a bit, being specifically Daniel, about your shift towards looking at greenfield projects. When you started Orrön, there was a lot of focus on looking at brownfield investments and the potential gain in the returns from looking at that. Could you maybe talk a bit about why specifically you were focusing more now in the near-term on the greenfield?

Yes. I think when we started, you're absolutely right, we looked at brownfield M&A to increase the scale of power generation, which is the core of what we want to do. It became very relevant very quickly. And I think Jonas and Carl touched on it that every single owner we were speaking to then wanted to open the door for additional land, additional turbines, additional opportunities. We've got connections through the Lundin Group to landowners in the Nordics as well that have opened the door for greenfield projects. So naturally, not even changing our view on greenfield. We're already seeing greenfield opportunities coming into the mix at the end of last year. And so we're starting to explore that because there's a -- if I look at some of the value created in the developer space, OX2 being a fantastic example, there's a lot of value to be created in that space through following some certain strategies in the greenfield domain. So we spent a lot of time last year. We looked at a whole range of things on M&A last year, brownfield, greenfield portfolios, smaller opportunities. And we found that the value expectation for some of the greenfield developers with a platform was significantly higher than we were willing to pay given the return frame, the all-in return framework. But when I look at the multiples that they've made on the invested capital versus where they've got to over a very short period of time, it's clear that we have the skills and ability through the teams that we have to go and explore that part of the market. And so through that phase end of last year, we've managed to sign a few deals with small development teams to help us go and grow that business. And whether it was greenfield, brownfield, our view is our business model has to be everything from project origination all the way through to repowering life extension. And there's value to be created all the way along that framework. So as we move into France and Germany, the initial step is greenfield because that's the opportunity that we've found to start. But very quickly, we'll bolt-on like Jonas and the team have been doing in Sweden, we'll bolt on the rest of the organic growth model into that seed that we've planted.

Okay. Great. Excellent. As a follow-up question on these greenfield opportunities, you talked a bit about permitting and tying in different types of operations. How does it look like for the lead times in permitting, for example, adding on a solar park or adding on a battery storage for an existing wind park? Could you maybe talk a bit more about that?

Shorter. We do see much shorter lead times on solar, especially if we are -- I mean one thing is the grid connection and the grid connection we already have. And then it's the permitting left, so to speak. So depending on if we start off from scratch, then -- so where I would say, more 12 to 24 months when it comes to processes like that, and then wind is -- it's longer. Now it's the Swedish perspective primarily.

And I guess it's also a point on looking at adding solar to already our existing assets, where the region or the area is already kind of industrialized through the wind turbines, obviously, it's a lower threshold for those sort of expansion projects and a completely new greenfield in a high-value landscape, agricultural landscape. And looking at kind of -- we look at some opportunities that are completely greenfield, but in already industrialized areas. And there, the willingness from the authorities is much, let's say, higher or they're more keen to develop those sorts of projects than going into more high-value agricultural land, for instance. So it depends. And also with the jurisdictions, like we talked about in wind, for instance, you're seeing Finland compared to Sweden, it's almost half the time in Finland on greenfield, so.

And as a follow-up question on that, how much you potentially reduce upfront investments for one of these projects compared to as if you had to build it from scratch without an existing grid, without an existing infrastructure in place already? How much value is to be gained? Something you can maybe give some flavor on trying to understand that.

I guess we have to look at that from many different perspectives. There are -- when we do the expansion projects, we have a certain gain, of course, in that we have infrastructure already established and like grid connection transforming stations already built. We may need to expand it. But certainly lower, let's say, upfront investments. But I mean, in short, the development expenditures on especially solar and battery is much less than wind. And even in wind, the development expenditures is quite limited. Okay? We need to do a wind resource campaign if we're diligent on the wind side. But on solar, it's not that complicated. And on battery, we see that you can go from origination of a project to permit in less than 12 months, basically. And obviously, that influences it directly. It's quite low capital in -- kind of capital commitments in the development phase until you reach a certain step. And then we only proceed if it makes sense from a...

We also see some benefit regarding OpEx as well. I mean, yes, lower dev ex. And then if we have the grid connection, it's a substantial -- if you can use an existing grid connection, it is a substantial part of the CapEx. And then we see some upside also on the OpEx side to use -- to combine solar and wind or batteries and wind.

Okay. Great. I have a barrage of questions. I can keep on going. So if anyone wants to interrupt me, please raise your hand. Otherwise, I'll maybe take a couple of key questions and maybe hand it over to someone else. I just am really excited about the idea of repowering. Maybe just focus on that question first. What opportunities exactly are you seeing with repowering on your existing assets? And how do you see that playing out?

I mean it's also there a wide range of opportunities. Like I said, we have some assets today in more close vicinity to where people live, where it will be certainly more difficult if we want to pursue the avenue of replacing it with 1-megawatt turbine or 0.5-megawatt turbine with the likes of the one -- okay, the full scale size of the ones we have on the table. And there, it may be more interesting for us to go with battery or solar, where it may be a higher acceptance for that. But certainly -- I mean Näsudden is a perfect example of the Sweden's largest repowering project to date. And for those of you who join the site visit tomorrow, you'll learn more about it then. But that's a really beautiful example, where it's a project which was developed in the '70s, '80s. Basically, I can't remember how many turbines it was, but I think it was close to 60. That has turned to roughly 30 turbines and power generation from half as many turbines. It's 4x the original amount. So -- I mean in areas where it makes sense to change old small turbines with larger, we see a great leverage in that if we are able to replace them with something bigger. But if we're not, we can find battery applications, storage arbitrage, we can find PV applications or other storage solutions.

We will do a lot of repowering. But I think the main thing is that we present a toolbox actually, which means that we can create a lot of value, and we can use the site for a very long period of time. Then if that is via life extension, via more large-scale repowering or via adding other technologies, that is a different thing, I think. But it also has to do with timing. I mean repowering is great, but the gear should be worn out before you actually conduct the repowering so that we use the -- each asset as long as we can. And also in terms of permitting that, it's also a timing question. So yes, we can do some -- we have some potential in repowering and we have more tools to create value.

And maybe a short on that life extension because let's differentiate between life extension and repowering. But we also do initiatives where in order to prolong the lifetime of an asset, you can do a rotor change. You don't change the characteristics of the turbine, so it won't necessarily produce more, but you can run it for a longer period. You can -- we can take -- since we have some -- we have 175 turbines or something in our portfolio. We can take components from a worn-out turbine, replace it in a new one. And that competence, we also possess in the company to do that.

And so when you look at brownfield M&A, we're buying the lifetime of the asset, and all of this comes for free on the back. And some of the best returns are going to be extending the lifetime of an asset, which you haven't paid for, or extending the power generation out of an existing turbine by putting bigger blades on the existing turbine and not touching the environmental permit or pulling the whole site down and repowering with either the same technology or others.

Just a final follow-up question before other people speak as well. How do upfront investments compare between extending lifetime and between upgrading, for example, for a higher megawatt rating for a turbine? Well, how do those 2 compare?

Permitting is one thing. I mean its lifetime extension is -- could be easier if you don't have to upgrade it. As soon as you want a bigger rotor or a higher tower, you have -- you need more time to apply for new permits. So -- but otherwise, I mean, it's -- we add all the conditions and then we decide. It could also be, I mean -- a very realistic scenario is that we start with a lifetime extension. And then we -- 10 years later, it's time for repowering. So it's a long-term view on each asset.

And different conditions on each one. So you don't know exactly where you're going to go on permits on extension. I think economics -- simply on our spreadsheet, the best economics are probably to repower the things. So to step out of all of the turbines, put large-scale brand new turbines up there. But we may have constraints on either wind conditions or permitting or other things, which may mean that, that site is better suited, like Jonas said, to a different technology. So it depends on every single site. I think you can rest assured that we'll pick the most economic option that's possible within the constraints we have.

Yes. And the key is that we have the competence and knowledge to choose. I think that is key.

Thank you, Niclas, for a very thorough set of questions. Appreciate that. And I think we have a question here. Okay, here we have, yes. Thank you.

Just a short -- [ Thomas ] here from Sparebank 1 Markets. Talking about greenfield projects. Do you see any relief on the CapEx side moving forward?

Hard to say. If I look at the political landscape that's changed over the last 12 months, price caps coming in, IRA coming in, in the U.S., the EU trying to match that same position, I have no idea where we're going to go in terms of the political landscape and reliefs on CapEx, et cetera. I think it's clear to see inflation on CapEx is coming. That's for sure. We've seen that. Maybe we're tailing off a little bit now in terms of inflation interest rates, so we won't see the costs going through the roof beyond here. But the ambition of the EU -- U.S. globally to build out this renewable framework means there's going to be support to ensure that this moves forward. But in terms of reliefs on CapEx, I have no idea where this is going to go. I think we just -- we will test every investment when we get to that point to see what makes sense. And if it makes sense, depending on the framework in front of us, we'll invest.

Would you consider Chinese turbines?

We have looked at some brownfield Chinese turbines. We've looked at other opportunities. I think you've got to balance -- in any procurement decision around this, you've got to balance the cost, quality and guarantees versus the economic returns. So I think there's opportunity to look at it all. Where we've tended to focus is probably on the Tier 1 suppliers. There's not so many of those around.

[indiscernible] in Lundin, there are probably coming more of them. And will you consider farm downs as an option if the price is good enough? I mean we see some pretty high multiple transactions lately.

Yes, absolutely. [indiscernible] stepped into a portfolio on Friday last week at multiples twice what we're picking up some things for because it was a large enough scale. You look at MLK and Karskruv are some of the biggest assets. In Finland, MLK being the third largest asset -- wind asset in Finland. So absolutely, farm downs are an option, and everything is for sale at the right price. So I think we have to look at the portfolio. We have to look at our appetite for investment and how we raise capital to fund that. But stepping into farm downs on assets, starting greenfield opportunities where we potentially farm down 50% or a portion of that, absolutely, all those options are on the table.

Thank you. I think we have the next question from Shane here. You have a question.

Shane Chaplin from Swedbank Robur. I'm sustainability analyst there. Just wondering about when you get into renewable energy space, you're essentially in a business which has to do with the weather, and that's super exciting. And there, we start to talk about climate scenarios and a changing climate. And I'm just wondering where sort of that knowledge sits in the company and how you sort of plan in the future to take account of those sorts of risks? Too much wind, too little wind, ice storms, too much heat, fires, so on and so forth. There's a whole range of different things now, which are going to be different in the future, and companies need to stay on top of this. Have you had discussions about that? And how are you thinking there?

Yes. Maybe we take it in 2 parts. Maybe I take the risk piece, and then I'll pass to Carl for the weather forecast or at least the weather management side of things. I think absolutely, we're looking at this. When we put together a production guidance, for instance, in other industries, you can get a feel for what your production guidance should be. All we can do is set what the capacity is of the turbines, for instance, if we focus on wind and look at historical averages to forecast what the future should be. But from quarter-to-quarter, we're going to see the weather changing massively. Who knows exactly what's going to change? If the Gulf Stream changes direction, then we may see completely different conditions across Europe. Our view in terms of the risk profile is we need to be spread geographically and we need to be spread technology-wise. So if I look at wind, solar, batteries as 3 key technologies across a range of jurisdictions, then we should be out of a local weather impact. But if globally across Europe the wind speed drops by 10% or 15%, well, that's going to impact our business. The same, if the sun irradiation drops by a significant percent, that's going to impact our business. I think from a business risk perspective, we're overweight in wind, and we're overweight in Sweden today in terms of the portfolio, which is why you see us spreading out a little bit more in both technology and geography. Maybe weather, looking at weather...

There are so many elements to this. You can look from different perspectives. But of course, turbines, I mean, we have 90% wind turbines and 10% hydropower turbines at the moment. The wind turbines are, of course, designed and certified according to IEC rules, according to extreme and ultimate loads. Of course, over time with -- if climate change -- or if not -- climate -- depending on how climate is changing, that kind of the thresholds for what the turbines have been certified for. Maybe those occurrences will occur more frequently, of course. And that's something that it takes time to fully understand the impact of this, of course. But I think what's clear is that we see this bigger extremes year-to-year on this. And kind of what we can do to try to save, keep what we have, of course, is to operate them as -- make sure we assess the technical integrity of the turbine as good as possible. If you look at from a flip side, should the wind -- average wind over time reduce with 10%. And it's like your car, it will run 10% less mileage, right, and you can actually operate them for longer. So there are so many elements on this that you can simplify it, of course, but there are absolutely safety element to keeping the turbines technically sound and safe. Luckily, they are not [ manned ] turbines except for when we do turbine service and maintenance. But of course, it's something to consider when developing new projects and managing our current assets.

We need to monitor so that we can adjust because -- I mean different makes shutdown at 25 meters per second and other 23, and we have some 27 meters per second. So that can be adjusted if we have more extreme winds. So we need to monitor, and then we can adjust. And it's also important to take into account when we're talking about lifetime extensions because if the turbine is designed for some extreme parameters, and then the 25 -- 20 years later, we see that they have had -- the outcome is different compared to the design, then of course, we -- that will make an impact on what we have to do when it comes to life extension as well.

I have a couple more if that's okay. In terms of other constraints like electricity grid build-out, for example, there's so much talk about that in Sweden at the moment, and other countries are in -- can be in similar positions as well. So it's one thing to be able to put up the -- generating infrastructure, but it has to get connected. And this is coming in now, this whole sort of critical minerals sort of debate and copper availability and so on. Cabling and so on is required, also other material supply constraints. And so the winners in this sort of game tend to be the ones that can secure those supply chains in the best possible way. Do you have any comments on those aspects?

Yes, if we start with copper, it's lucky that the Lundin family and Lundin Group have got some of the best copper deposits in the world in the group. So they are invested for the long term in the transition. I think grid is a fantastic question because that's one of the biggest challenges beyond permitting that we see today. So when we apply for a grid connection date for a large-scale project in some countries, it could be 5 or 10 years before we even see the ability to connect a new project. So it's absolutely that, and permitting is absolutely something that's putting huge constraint on our ability to build out this renewable journey. So I think the grid operators are under huge pressure to put that infrastructure in place to allow the energy transition to continue. We focused initially on the brownfield acquisition because they already have grid connections. They're already feeding in. And you're feeding into a market where it's not today oversaturated with renewable energy. So that's why we started where we started. And we've taken a slightly different view to say if I've got a grid connection, how do I use it to its maximum potential, which is why Näsudden, we're hopefully sanctioning soon a solar project where if I look at the wind, and Carl and Jonas touched on it, if I look at the wind profile, less windy during the day and less windy during the summer, which is the exact opposite for solar. Putting small-scale solar against some of our existing wind means I don't need new grid, I don't need new capacity. I'm just using the existing at its potential. So we're looking at that across our portfolio. But as we step into greenfield, absolutely, some of the constraints we're going to find on permitting and grid will mean that, that piece of work for us to build a greenfield project pipeline may take longer than what we see in the market today.

And on the grid side, also, I mean, we see definitely that constraint, but we see also innovation coming into that sector with better monitoring tools for the grid owners to understand, at any given moment, how much the grid is utilized if they can, let's say, push the limits further. And that will over -- kind of -- when -- with the help of those technologies, it would be even bigger opportunity to be able to utilize our existing grid assets, which -- that has -- like we talked about, it has become evident that, that's a clear asset in itself, that grid connection, that grid capacity we have reserved in our assets basically.

And supply chain, for sure, is an issue. If I roll back the last 2 years, just focusing on wind again, Vestas, Siemens, all of the major players have had either profit warnings, provisions for either some of the warranty claims or delays to installation. And that, coupled with CapEx increases, means the supply chain, I think, for renewable assets is under pressure. I think we have to remember, with Orrön, we're not a massive offshore wind -- putting multi-gigawatts of offshore wind to bear like some of the major players. So a lot of what we see in the news is around the large-scale kind of renewable projects, and then, absolutely supply chain issues are there. For us, we're just shy of 400 megawatts installed capacity. So 1 gigawatt already more than doubles the size of the company. And so we don't need a lot of projects to double or triple the size of the company today. As we get bigger and bigger, I think scale is an issue, where you start to face up against some of these challenges. And that's why I think we need to spread our footprint not only in just power generation and brand new projects, but into acquiring and developing brownfield and repowering, but also stepping into storage and frequency services where you step into another part of the market, which is going to evolve over the next 5 or 10 years. So from a pure Orrön perspective, I think we're relatively small compared to where the large scale and supply chain issues are. And if we can spread our footprint a little bit more, then we diversify against some of those risks.

Okay. Last one, and then I'll hand the mic over. And I'll attempt as a sustainability analyst here to ask a finance [indiscernible] question. So it should be an easy one for you to answer. What's -- and you can tell I'm an old risk consultant here as well. But what's the risk of power price decoupling from gas prices? Because that's currently what's keeping power prices high in Europe and you can even argue in the world. And there's been some discussion in governments and certainly a push from consumers to say, well, look, renewable energy isn't sort of -- got this high cost of generation or raw material costs like gas house, for example. Why should these prices be coupled and what we do to decouple them to sort of give some relief to consumers? Is that a risk in your space? And how do you see that playing out over time?

Yes. And I think whether it's the decoupling or the structural changes in power markets, for sure, it's a risk for every renewable player that's merchant-exposed. I think that's a risk. I think every government has struggled with that in 2022 when we've seen the ballooning prices. Every government has tried to do something to deal with that. And if I take some confidence from where the EU set the power price cap for inframarginal generators, they set it at a level of EUR 180 per megawatt-hour. So you're still at a level where there's decent returns to be made. And at that level, you can still invest in offshore wind, you can still invest in some of the kind of new storage technologies. So batteries work at that level. Hydrogen maybe -- hydrogen ammonia and some of the alternate fuels maybe get closer to breakeven at that level. But if the EU is only setting inframarginal at EUR 180, it still has a lot of headroom compared to where we're seeing the breakeven of our assets today. So in my mind, I don't ever see the EU or the decoupling forcing pricing down to EUR 20 or EUR 30 a megawatt hour. It probably still need some gap to allow the capital to flow into the market and develop the technology that we need.

Thank you, Shane. And I think we have a question up in front here from [ Rutger ].

[ Rutger Smith ], I'm a private investor. Now Lundin family in Norway has been a good match in history. But from what I understand, there has been effectively a sort of moratorium on wind power in Norway. Is that going to end anytime soon?

Again, I don't know. I might let my Norwegian colleague talk about the political and societal landscape in Norway, but it's clear today that Norway is relatively shut to onshore wind. I think they're looking at offshore wind in a much bigger way, and that's a lot more acceptable. But the space to go and invest in an onshore wind from a permitting perspective is very, very difficult. And then secondly, with some of the tax rates in Norway, if we look at pricing above EUR 70 a megawatt-hour, we're actually taxed more in the renewable domain with a marginal tax rate of 90% compared to the oil and gas domain, which is lower. So for me, the landscape in Norway isn't really that favorable for renewable investment today in what we're trying to do.

Yes, I think that -- I mean that's a good summary. I think you're right. It was the fact there are moratorium for a few years. I think it started accelerating and moving again in '22. And then these tax changes that were proposed in the fall of '22 was a major setback. So I think sort of, yes, taking a few steps back. But there could be opportunities. I mean there's no period of sort of a pause and sort of a period of repricing, taking into account the new policy, the new tax environment and the market opportunities going forward.

I think we're positioned to move in Norway, but I think our focus is more towards Finland and some of the southern states at this stage because the opportunity is much greater there.

There were some positive signs, so to speak, coming quite recently from the Energy Commission, I think it was called, and talking a little bit about the opportunity to develop wind energy then in more industrialized or already used areas, roadside wind energy, more small scale, which may be perhaps a way forward to unlock some of -- some new onshore wind development in Norway.

I think we have a follow-up question from Nash.

Yes. I have 2 follow-up questions if that's okay. I just wonder if you can talk about your 2023 acquisition target. Do you have a capacity target you want to do? Or how much money you want to spend on acquisition?

No.

Correct. Number two, probably for Espen, EBITDA margin. So I did the calculation. I think EBITDA margin is around 65%, even excluding the Sudan legal case. I appreciate that there's a lot of M&A transactions going on. So probably EBITDA margin is a bit lower. So what do you see is a long-term EBITDA margin? Or what do you want to achieve?

Maybe I'll elaborate a bit more on the M&A piece and the targets for growth. I think from inception, we've purposely not established a target for growth and instead set a target based on shareholder return. So I think we have to invest in projects where we see a strong return framework. And that means we need to be a bit more agile and opportunistic around which sectors of the market we step into and which sizes and what pace we invest at, because you can easily blow all of our financial firepower at 4% or 5% or 6% rate of return and get some fantastic scale, but make no money for shareholders in the meantime. So we should be judged on the rates of return on the individual projects we invest in. Sometimes that's going to move really quickly because there's a lot of opportunity, and sometimes it's going to be a bit slower. So for me, there is no growth target. We have to get bigger. We have to broaden our footprint geographically, technology-wise, scale-wise, but it's going to be different in each market depending on returns.

Yes. No, thanks Nash, and good question on the EBITDA margin. I think if you exclude the Sudan legal cost and all else equal, our EBITDA margin should improve in 2024, as Karskruv comes on stream. And as I mentioned, that has lower OpEx than the rest of the portfolio and also adds even more capacity in the high-price region. Secondly, over time with our organic and inorganic growth strategy, our growth will outpace our growth in G&A. So those 2 elements should bode for increasing EBITDA margins going forward at a certain electricity price.

And I realize that I made a promise here in the beginning that I won't be able to hold that we could conclude this in under 2 hours, but it's thanks to all the great questions that keep coming in. So I think we keep going, and we have some more questions in the room, and we have some questions from the audience online as well. So did we have another question here? Niclas, follow-up?

Yes, it's a little bit of a near-term focus and specifically invest into greenfield. How far away are potential projects you're looking at? Do you put like a cap on the time line when it comes to greenfield? And for next year, you said there was no CapEx allocated towards greenfield specifically, if I remember correctly. What's the sort of time line we can expect for both 2023 in terms of brownfielding and also in terms of greenfield? And how long -- far away in the future those projects are?

Yes. I'll maybe touch the greenfield strategy, you can touch on the CapEx. And then maybe brownfield with our experts over here. I think greenfield, we have to be patient on the greenfield side projects. We can't just suddenly go and say, in 6 months' time, we're going to start a large-scale greenfield project and get it online. When I look at the greenfield pipeline, we have the ability to sell projects when we have land and grid, we can monetize a project. We can take it all the way from that stage to ready-to-build where we've got land, we've got grid, we've got permits, we've got design, et cetera, get to ready to build. We can take it all the way through to FID. We can take it all the way through to production. There's different value to be created along that entire pathway. Maybe we monetize some projects early and see a very quick return on our capital invested. Other projects, we'll take all the way through to development and online, which is going to take a much longer period. So I think we should be a little bit patient with the greenfield side. That said, the mix of projects we have when we look at greenfield within existing assets, some of those we're hoping to be online already next year. Some of the greenfield that we're looking on industrial sites and through other connections, the permitting landscape shouldn't be kind of 5 years or so that we see in onshore wind. It should be much shorter because we've already used some of that land industrially. So our view on the greenfield is to have a spread of activities where we have both small scale and large scale and we have a spread of timing such that some projects are coming on sooner, some are coming on later. But for a pure greenfield strategy, I think we have to be a little bit patient to see that return coming through. CapEx?

Yes. So in our '23 guidance of EUR 80 million, we have allocated a portion to greenfield a small portion, single digit. And I guess that's also a bit of the beauty with the greenfield that we have a lot of optionality, can scale it up and down according to sort of market environment and opportunities that we have. But it is -- we expect to be sort of in the EUR 5 million to EUR 7 million range for '23.

And is that maybe potentially looking at smaller sort of solar park addition to your portfolio? Or is it -- what kind of investment in greenfield is specifically do you think you could get a good return from a smaller investment?

It depends. So we're looking at some smaller investments, which have strong economics, much lower CapEx all the way through to gigawatt projects. So when we're talking very early-stage gigawatt projects, you're talking about man-hour rates for a period of time. It's mostly G&A cost with a small amount on solar, with a small amount of technical costs, whether it's feasibility or grid studies or whatever else. So there's a mix of things in that $5 million to $7 million (sic) [ EUR 5 million to EUR 7 million ] range from the small-scale projects we're looking at in Sweden, all the way through to large-scale gigawatt projects. So a mixed range of things.

Okay. Great. Just a final clarifying question. When it comes to the OpEx that you sort of allocated in the guidance for 2023, is there any of Karskruv that's included into that? You expect Karskruv should reflect anything in 2023 at this stage?

No. In our operating guidance and also in our production guidance, there's no contribution from Karskruv. That starts January '24.

We're ahead at the moment on Karskruv. There's a potential that it comes into 2023, but that will be upside compared to the guidance we put forward here.

That's relating back to the supply chain issue. Actually, we will see turbines being delivered to Karskruv already in April. They start to roll in and start to erect in May. So we don't...

Significantly ahead of schedule.

Yes. So we don't expect any supply chain crunch on Karskruv, which is very satisfying, given today's environment.

Thank you, Niclas. And if no further questions from the audience here, we have one question a little bit back here. Microphone is coming. Mattias?

Mattias Ehrenborg from Redeye. And I'm curious, I think that Daniel ended up saying that Jonas have nearly 25 years of experience from wind power here in Sweden and also from...

Did he say that?

Around the figure. Maybe it was 15. I don't remember.

No, no, it's actually 25 plus. So yes, he's correct.

And that includes Slitevind where you acquired wind assets, producing electricity and selling it. And prior to that, if I'm not completely mistaken, I think you used to develop projects as well from greenfield.

Yes.

And with Gotland being one of the windy sites in Sweden, I think it's fair to say you have some good market insights. Having all this background, what opportunities are you most excited about going forward?

It is the combination of what I have -- it's a different environment for me. So it is the mixture that we have presented people, assets and capital. It is actually to continue where we are to optimize existing assets and to do more greenfield. And then I think that -- I mean we are in it for the long run. So as long as -- today to -- when we're talking greenfield to add solar and batteries with shorter lead times, that is exciting. And then one could hope that the processes for wind can ease up over time so that we don't need to spend 7 to 10 years when it comes to greenfield development on wind. But actually, the -- this is actually what we talked about creating values out from the assets we have a 1 terawatt-hour. I mean with the Slitevind perspective, it's like 0.5 gigawatt-hour -- sorry, 0.5 terawatt-hour that we have acquired over time, and that is our platform. But then things can be done also with the Karskruv and MLK assets. So it's a really exciting platform we have for future growth.

And also, what were the main reasons that you decided to come along on this journey with Orrön? I suppose you could have just stopped working for Slite and not -- and [indiscernible] journey because I suppose it's -- I mean the pace that Orrön is moving is quite high, maybe not as high as Slite. But you seem really energetic and excited about this opportunity.

Yes, yes. No, I'm really excited. It's -- the reason is that these are nice people to work with.

And I think it was so fun when we met -- I mean Jonas is a dealmaker, while we were driving around, 2 deals were being made with local people in Gotland.

We were doing due diligence. We went to the sites for due diligence, and he's speaking to farmers and plumbers to buy assets.

Yes. And that is actually one of the -- yes, that's true. That's true. I can confirm that.

We closed the deal. We take away some of the constraints you had. So to do a deal, you have to raise capital, you have to raise equity, and then you have to go and convince the deal to happen and then go and operate it and finance it. And now you can just do deals. Espen does the financing. The legal work...

Yes, actually, I don't have time to be here. I would like to...

Thank you very much. And one question here from [ Michail ] in the back of the room. Microphone is coming. So hold on.

Very good presentation. Thank you very much. So Daniel, you said 10 acquisitions. I know about 7. Tell me.

So Långås was the eighth -- so 8 asset transactions. So starting our asset and portfolio company transactions. So the 7 you know about last year. The report today, Långås was the eighth, which was done a number of weeks ago, but in Q1. And then we've signed 2 agreements with 1 to enter into Finland with an experienced individual who's going to work with us to build the portfolio in Finland alongside Jonas and the team. And another one with the greenfield development teams that are going to be running in France and Germany. And so they are the additional 2 deals that we signed is to bring that portfolio together outside of Sweden to go and look at some additional competence, some additional strong teams who can help us build the business outside of the Swedish business that we've built. So 8 inside Jonas' regime and Swedish empire; and then within Finland, France and Germany, 2 more.

Thank you, [ Michail ]. And I think with that, we should take some questions from our webcast attendance as well. Fortunately, a lot of them have already been answered, so that's good. But let's kick off with a question that comes from Eivind Garvik at Carnegie. And he would like you to talk a little bit about the new investigation from the Swedish government into onshore wind and that could lead to an increased cost for asset owners, which basically deals with increased contribution to local communities.

Yes, and maybe it's 2 parts. So maybe I'll pass to Jonas for the local piece. But I think anything that gets the community more engaged with the renewable assets is a good thing. So when we look at the constraints we have on permitting and the vetoes that come from the local municipalities because of a lack of benefit or engagement in -- from the community side into the renewable generators that are being put in, I think I welcome some of those changes. And the landscape probably needs to shift a little bit. Cost base, again, I don't know where power prices are going to go and cost bases are going to go, but the debate from Sweden does put a little bit more cost and land lease or kind of benefit to society on the back of the producer. But that needs to be taken into account in the economics of the decision at the time.

In terms of local contribution, that is in our DNA. So that's the way we've been operating from the beginning. So we do offset -- it's not a huge amount. But over time, it becomes substantial amounts. And actually, Sudan is a good example because we have -- on top of the land lease, we do offset money to the local community. And after 10 years, the local community use the funds to invest in wind power. So they are -- the local community is actually a part owner in 2 of the wind farms at Sudan besides us. So we work on those basis already.

Thank you, Jonas. Yes, I think as a general comment, we welcome a common framework for contribution to the local society. So that's something that we see as very positive. Then the next question also comes from Eivind Garvik at Carnegie. How can you achieve double-digit IRR on renewable investments? I assume that this only takes into account in-house greenfield development. What kind of long-term power prices do you use when calculating your IRRs?

Yes. I think double digits, we're seeing that in some of the brownfield investments we're making. Certainly, greenfield, if we start from scratch, we can probably see double-digit unlevered IRRs all the way through. Pricing-wise, we use a range of long-term pricing between, say, EUR 40 and EUR 80 a megawatt-hour, long term average around EUR 60. And so in that range, we can still see fantastic double-digit returns from brownfield acquisitions.

And I think just to add to that, then we're not talking double-digit IRR, taking into account the additionality of consolidation or expanding the projects or any of the organic growth we are talking about, that stand-alone on the acquisitions we make.

But large scale, I think the question probably comes from large-scale greenfield, you're never going to see double-digit IRRs in this market. So we haven't done any of those type of transactions because we can't see the value creation. So we're focusing on the parts of the industry where we think we can create value.

Thank you. And we have a couple of questions on dividends. Will Orrön pay a dividend, and when will we pay a dividend?

I'd love to pay a dividend. But I think we've got too many opportunities in front of us to create more value. And so I think the dividend question is something for the future, not for today. I don't see a mandate in the short term to start paying dividends from this vehicle.

Thank you. We also have quite a few questions on the capture price discount. Do you see that increasing over time? I mean we have dealt with it, but maybe worth saying a few more words on capture price discount and the way we see the development going forward.

Yes. No, it's a complex matter, of course, and we have several sort of variables impacting it. But I think the very high -- the extremely high, the unprecedented capture price discount that we saw during Q4 and Q3 of 2022 also needs to be looked upon in the context of record high prices, record high underlying prices and volatility, which clearly drives the capture price discount as well. And also then on the flip side leads to higher realized prices for us. But of course -- I mean, the capture price discount, there will always be a capture price discount as long as we have intermittent supply in the energy mix. So that's here to stay. But we think the sort of the unprecedented levels of the second half of last year was mostly driven by the high prices and high volatility. And we said, we've seen it easing into January already.

And it's something we take into account in all of our forecasts. So we'll look at where the market is, where pricing is and the numbers that we present, both short term and long term. We'll take a view on capture price discount into the mix.

And also the diversification of our asset base, I think, will help with that with adding solar to the wind base. We see our hydro power plant had a positive profile cost in a given month, right? So it illustrates a little bit the different characteristics in a certain scenario, right? So the more diversified portfolio we have, the better hopefully we can optimize.

Definitely, definitely.

Thank you. And we've also had a few questions on financing. We've spoken about financing, but there are specific questions if we see any reasons why we would do a rights issue in the near or midterm future. So I think Espen is well placed to answer that.

Yes. No, I guess, the very short question (sic) [ answer ] is no. I mean we don't have any plans, we don't have any need to tap into equity at all. I mean as we mentioned, we have -- we don't see access to capital -- and then when I say access to capital, I mean debt capital. We don't see that as a limiting factor for our growth plans going forward. So no is the answer. Yes.

And we have a few questions around the guided price, the prices for our assumption of EUR 70 to EUR 125 per megawatt-hour. The spot price is now in the lower end of that. So we have spoken about that, but maybe worth talking a few words, more about this since we get quite a few questions on it.

Yes, maybe I'll touch market, and then you can touch on the guidance. I think if we roll back to December last year, that same forecast was over EUR 200 a megawatt-hour for the coming year. We've seen it come off a little bit in January. So we're seeing Nordic system price maybe around that EUR 70 to EUR 80 level. If we look at SE4, for instance, we're up over EUR 100 today for the next year. So what we've tried to do is give an indication of a range of outcomes with a range of pricing. And I don't know where we're going to land, but that range should give investors and shareholders a view on where we're going to generate cash at different pricing.

Yes. And just a follow-up, I mean, I guess, we have been quite transparent around sort of the variables impacting 2023 cash flow. And given the range and how that sensitivity or how that range impacts the low and the high case on our cash flows, I think you can sort of extrapolate that in case of other assumptions. But other -- as I mentioned also in my presentation, you also need to keep in mind that the majority of our production is in high-priced regions, which of course also plays positively into our realized prices.

Thank you, Espen. One more question here from the webcast audience, and then I see we have one more in the room. But when -- this is -- you need to look into your crystal ball now. But when could Orrön Energy achieve an EBITDA of EUR 100 million on a full year basis?

Over to you, the power price.

Yes. So no. I mean -- well, our strategy is growth, both inorganically and organic. And -- I mean we are adding -- we will keep on adding production capacity, high-margin assets. And of course, I mean it's definitely within reach shortly, given an also strong pricing, of course. But just on the growth piece, I mean, our parameter, what we are chasing when we are talking about growth is, of course, value. I mean that's what we are. Value is sort of the #1 criteria and that sort of gigawatt-hour growth in itself.

Thank you. And I think we have one final question here that comes from the room in Stockholm, and it's from [ Rutger ]. So he's -- the microphone is on the other side here.

[ Rutger Smith ]. The word has not been mentioned, but I take it hedges are not on the horizon. Is that it?

At the moment, no, but we're always looking. We're always looking each month, each week at where pricing settles. If we see the opportunity to hedge long term significantly higher than where we see the market, we may step into it. But at this stage, there's absolutely no need, and we don't know exactly where the market is going to be. So while those conditions exist and our balance sheet and debt levels remain strong, then there's no kind of intention to hedge for the company just now.

Thank you, [ Rutger ]. I don't think we have any more questions now. But as you know, we're always available. It's not just this Q&A. So don't hesitate to reach out to myself or to my colleagues, and we will try to answer any questions you have. I think this has been very useful. Sorry for running over time a little bit. We'll do better next year maybe. So we will certainly come back and meet you again, plenty of opportunities during the year and the new Capital Markets Day in 2024. So thank you very much.

Thank you.

Thank you.