Stock Exchange Release|20.12.2021

Enersense to become a producer of green energy and a key green energy company – its long-term targets will be reassessed in connection with corporate transactions

Enersense International Plc
Stock exchange release,20 December 2021 at 8:45 a.m.

Enersense International Plc (“Enersense”), a provider of zero-emission energy solutions, announced on 20December 2021, that it had signed an agreement on purchasing Megatuuli Oy (“Megatuuli”), an onshore wind farm developer, and on 8 December 2021 on an investment in and primary partnership with P2X Solutions Oy (“P2X”), Finland’s first green hydrogen production company (collectively “Corporate Transactions”).

Subject to the completion of the Corporate Transactions, Enersense will proceed to the second phase of its strategy, expanding its role in the value chain. In addition to being a provider of project design, project implementation, maintenance and management services, Enersense will become a key zero-emission energy producer, owner and project developer.

“Enersense, a broad-based service company in the energy sector, will also become a producer of clean energy and a key green energy company if the corporate transactions are completed. Our business model will change as a result of the ownership, as we will also receive revenues from the energy produced. Enersense will continue to serve as a strong partner in enabling the energy transition in all project phases, both in Finland and internationally,” says Jussi Holopainen, CEO of Enersense.

Key benefits of the Corporate Transactions to Enersense if completed – onshore wind power, hydrogen and offshore wind power (stock exchange releases dated 20December 2021, 8 December 2021 and 4 October 2021)

Great potential: The total capacity of Megatuuli’s wind power projects in progress or in the feasibility study phase is around 3,000 MW, which corresponds to approximately 20 per cent of the amount of wind power capacity in Finland in 2030 as estimated by Fingrid. Hydrogen is playing a significant role in creating a climate-neutral energy system by 2050.

Energy producer: Enersense will begin developing wind farms, take part in their construction and in the future our goal is to also remain as an owner of the farms and produce zero-emission energy.

Complements and supports Enersense's strong portfolio of services: Enersense to become a more extensive implementation partner of zero-emission energy solutions than before.

Preferred supplier status: Enersense will have the status of the preferred supplier in the work to be carried out during the construction phase of the green hydrogen production plant, which P2X will build in Harjavalta, as well as in maintenance and operation of the plant. The preferred supplier status will also concern the other future projects of P2X, for which an agreement on partnership has been signed for three years.

Synergy gain: Wind power and the production of green hydrogen are strongly linked together and Enersense has strong know-how throughout the value chain. Hydrogen can not only replace fossil fuels, but it also allows longer term storage of clean energy such as cyclic wind power. Due to the acquisition, new business opportunities will open up for Enersense Offshore Oy also in hydrogen projects, among others. If completed, the share transaction will enable utilisation of Megatuuli’s expertise on project development also on offshore wind power projects with Enersense Offshore.

The two Corporate Transactions and their completion are separate from each other. The key terms and expected completion schedules for both Corporate Transactions are described in separate stock exchange releases.

The completion of Megatuuli’s share transaction is estimated to have an EUR 20-40 million impact on Enersense’ EBIT by the year 2025.

The completion of the Corporate Transactions will also have an impact on Enersense’s long-term numerical targets, which the company will update accordingly during the first quarter of 2022, provided that the Corporate Transactions are completed. In line with its strategy, the company is aiming to achieve EUR 300 million in turnover organically and a profitability (EBITDA) of 10% by 2025 (company releases dated 30 September 2020 and 25 February 2021). The company is also aiming to increase the proportion of low-emission and zero-emission energy projects from 50% to 75% of its turnover by 2025.

Enersense’s strategy:

Enersense’s core strategy is to be a provider of zero-emission energy solutions and an enabler of a zero-emission society through profitable business operations. Enersense’s strategy supports the ongoing energy transition in society, whereby energy production will increasingly be based on renewable energy sources, with end users being more aware of the impacts of energy production on the environment and society.

The company is committed to implementing its growth strategy, with a focus on profitability. In addition to organic growth, the company is seeking growth through acquisitions. The main criteria for potential acquisitions include acquiring new technologies or special expertise and further strengthening strategic priorities. Enersense will also consider inorganic international growth to strengthen its market position in certain target countries or expand into new geographical areas.

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