Eolus Vind - Reallocation of projects in late dev. phases

Q1 EBIT of SEK -29m; neg. impact from project segment Reallocation of projects in late dev. and sales phases Reiterate our fair value range of SEK 190-250/share Q1: lower than expected profit recognition Eolus delivered a Q1 report below our expectations, primarily due to lower profits from the project segment. Group sales were SEK 242m (-27% vs.

ABGSCe at SEK 333m), of which there was a 97% contribution from the project development operations (-27% vs. ABGSCe) and 3% from the asset management operations (-37% vs. ABGSCe).

The larger Q1 sales deviation stemmed from lower than expected revenue recognition (2% vs. ABGSCe at 5%) from the large Öyfjellet project, as seasonal weather conditions affected its development. EBIT came in at SEK -29m (vs.

ABGSCe at SEK 25m), held back by a contribution of SEK -32m from the project development segment, which was affected by the lower Öyfjellet profit recognition and lower margins in the Wind Wall project, as project delays hurt project margins. Finally, given management’s indications regarding potential delays to upcoming deliveries of grid connections and drawn-out permitting processes, we think the likelihood of bottlenecks in Sweden and in Eolus’ other markets, regarding wind development, will increase over the next few years. Reallocation of project profits in ’22e-’24e We lower our ‘21e sales by 6% and EBIT by 9% primarily due to small project adjustments and lower Wind Wall profit margins.

However, due to the potential upcoming problems with grid connections and permitting, Eolus has reallocated the commercial operation date (COD) for several of its projects in the late development phase, which affects the timing of our profit recognition assumptions for ’22e-’24e (see profit recognition details on p. 4). However, if everything goes as expected, we should see significant project profits from project construction in ’23e-’24e.

Solid and diversified portfolio – ready to be executed on We believe that.