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Administration Report

The Board of Directors and the CEO of Azelio AB (publ.), corporate identity number 556714-7607, hereby present the Annual Report and consolidated financial statements for the financial year 1 January 2020 to 31 December 2020.

As of 31 December 2020, the Group consisted of the parent company Azelio AB, domiciled in Gothenburg, and two subsidiaries; see also Note 38. 


Azelio AB offers a system for thermal storage of renewable energy with delivery of sustainable electricity and heat on demand, 24 hours a day, at a low cost.

The company owns all of the unique product design for its system and performs the final assembly of the Stirling engine in its own plant, while subcontractors produce the system’s components and subsystems, such as storage tanks. Research and development, as well as sales and marketing, are managed internally and in cooperation with strategic business partners.

Azelio has the capacity to apply two distinct different business models, depending on the commercial conditions and requirements specific to each individual project. Initially Azelio may pursue jointly owned projects in cooperation with third parties to establish the technology in the market. In the longer term – once Azelio’s system and technology have been established and proven – Azelio will act as technology provider, sell the technology and provide training in how to build a successful commercially viable project.

In smaller installations, Azelio sells the system directly to the end customer and, in mid-size and large-scale installations, to EPC (Engineering, Procurement and Construction) suppliers. who then account for the installation. Initially, Azelio will participate in the start-up phase of new installations to train EPC contractors in successful system installation and maintenance. In addition to system sales, Azelio also offers monitoring, maintenance, upgrades and servicing of the system.


Azelio’s systems are offered to customers in a global market, initially to customers that build projects in the MENA region – India, Sub-Saharan Africa, South America, Australia and central and western parts of the United States – with installations of between 500 kW and 20 MW.

In the longer term, Azelio intends to develop its offering and offer systems for projects ranging from 0.1 MW up to 100 MW and to offer systems to customers in countries requiring dispatchable electricity production.

Significant events during the financial year

Azelio secured its first order for TES.POD®

Azelio secured its first commercial order for its TES.POD® energy storage unit from the Dubai-based project development company ALEC Energy, thereby achieving a major milestone in the industrialisation of its technology. The storage unit will be part of a mini-grid system designed for a visitor centre in the fourth phase at one of the world’s largest solar parks, the Mohammed Bin Rashid Al Maktoum Solar Complex in Dubai. Installation commenced in December 2020.

Memorandums of Understanding signed for a total of 259 MW or 3 GWh

Azelio signed six Memorandums of Understanding (MoUs) to deliver energy storage systems with a capacity of a total of 259 MW or storage capacity of just over 3 GWh, which more than doubled the total volume encompassed by the company’s MoUs. These were signed with partners in the Middle East and North Africa, North and South America and India. All were signed with companies that can continue to develop local markets for Azelio’s technology. The agreements are strategically important since they pave the way for commercial orders and a rapid roll-out of technology.

Raising capital secured important milestones

At the start of 2020, Azelio received approximately SEK 350 million before issue expenses under a new share issue, which added several new private and institutional shareholders to the company. At the end of 2020, more capital was raised, this time through a directed share issue of approximately SEK 270 million before transaction costs.

Pandemic postpones the timetable by a quarter

Restrictions related to COVID-19, for example in relation to travel, meant that Azelio could not work at its full pace or from the planned sites. Project plans were adapted to optimise resources based on the best assessment of the situation, which resulted in the company’s overall timetable being postponed by a quarter.

Fredrik Wäppling new CFO

Fredrik Wäppling was appointed new CFO He has held senior roles at several industrial companies, including Allgon Group, Mycronic, Bravida and Preem as well as iZettle. He is a member of Azelio’s Executive Team together with CEO Jonas Eklind and Executive Vice President Jonas Wallmander.

System performance verified

Azelio successfully generated data to enable establishing the performance of the company’s energy storage system in accordance with the specification of 13 kW output power with a storage capacity corresponding to 13 hours of electricity production.

Systems have been installed in Sweden, Morocco and Abu Dhabi in order to also verify technology over a longer period. This formal verification of the system started in Sweden with DNV-GL, a world leader in industrial certifications. This creates a basis that enables customers to finance projects involving Azelio’s technology. The installation in Abu Dhabi shall verify the system to enable Azelio’s strategic partner, Masdar, to include the technology it in its product portfolio.

Azelio’s technology more sustainable than lithium-ion batteries

A Life Cycle Assessment carried out by the Swedish research institute RISE showed that the climate impact of Azelio’s energy storage system (TES.POD®), measured as CO2 equivalents, is significantly less, more specifically 29%, than that of lithium-ion battery storage and dramatically less than that of diesel generators.

Azelio chose UL as certification body in North America

Azelio chose the global certification body UL to evaluate and certify TES.POD® for the North American market, starting at a specific project in California in 2021.

Azelio joins CALSSA

Azelio strengthened its presence in California by joining the California Solar & Storage Association, CALSSA, the state’s largest clean energy business association with over 550 member companies. California is one of the largest and most successful solar markets in the world, and a region where Azelio’s energy storage solution is experiencing strong interest.

Four new patents granted

Azelio was granted four new patents regarding innovations to efficiently store energy and generate electricity from heat, which is central to being able to store renewable energy and make it available around the clock in an efficient way. Through this, the company has 13 approved patents and an additional 15 patents pending.

Grants received from Swedish Energy Agency and Region Västra Götaland

Azelio was awarded a grant of SEK 2 million by the Swedish Energy Agency to demonstrate the impact of long-duration storage on energy resiliency as well as to show the benefits of the heat that the system delivers. Additionally, the company was granted SEK 0.5 million by Region Västra Götaland for a research project on product enhancements with Sweden’s independent research institute RISE.

Long-term incentive program for management

An Extraordinary General Meeting decided in June to adopt a long-term incentive program aimed at the CEO and some of the other members of the management team in Azelio, a total of eight people. The incentive program includes the issue of a maximum of 2,200,000 warrants.

Significant events after the closing date

MoU with Svea Solar

Azelio and Svea Solar signed an MoU to jointly develop projects in Sweden using Azelio’s energy storage unit TES.POD®, related to PV systems. The MoU spans over at least three projects in 2021, five projects in 2022, and ten projects in 2023, making a total of 8 MW of installed power and more than 100 MWh in equivalent storage capacity.

Private placement of approximately SEK 596 million

Azelio carried out a directed issue of 10,638,225 new shares, corresponding to approximately 10 percent of the total number of outstanding shares, at a subscription price of SEK 56 per share. Through the new share issue, the company received approximately SEK 596 million before transaction costs. The funds will be used to finance the continued industrialization of Azelio’s technology for thermal energy storage (TES) and Stirling-based electricity production, with the aim of starting series production during the third quarter of 2021, as well as to be able to finance further development projects and other general business purposes.

The new share issue entails a dilution effect of approximately 9.2 percent of the share capital in relation to the number of shares in Azelio after the issue, through an increase in the number of outstanding shares by 10,638,225, from 104,380,296 to 115,018,521, and an increase in the share capital by SEK 5,319,113, from SEK 52,190,150 to SEK 57,509,262.

Azelio receives an order for two TES.POD®

Azelio received an order for two units of its energy storage TES.POD® from the Swedish company Industrisupport i Åmål AB. The units will store surplus energy from a solar cell plant of 446 kW and make this energy available around the clock as electricity and heat. The installation will increase the Swedish company’s use of renewable energy by 24 percent and thereby reduce emissions from energy use by 168 tonnes of carbon dioxide per year.

Development of the company's operations, results and position

Group (kSEK)Calculation according to IFRSCalculation according to K3
Net sales1,0741,6701,9422,921
Operating profit/loss-192,572-160,897-92,004-97,443
Total assets922,162865,580658,249286,794
Equity/assets ratio, %84%82%85%83%

Parent company (kSEK)Calculation according to IFRSCalculation according to K3
Net sales1,0741,6701,9422,921
Operating profit/loss-198,483-161,932-96,093-94,230
Total assets897,660848,908644,294289,824
Equity/assets ratio, %86%84%88%85%
Definitions: see note 56

Revenue, expenses and profit/loss

Net sales amounted to kSEK 1,074 (1,670) The decrease is due to lower sales of spare parts. Own work capitalised amounted to kSEK 126,730 (130,891) for the period.

Expenses amounted to kSEK -327,560 (-293,751). The increase is largely attributable to higher prototype costs, employee benefit expenses and consulting costs. The company’s total costs are largely attributable to development. The value of certain capitalized project costs that have been deprioritized or wound up during the period has been depreciated with kSEK 0 (13,331).

Operating profit/loss amounted to kSEK -191,939 (-160,510) Profit from financial items was kSEK -633 (-386) and consisted mainly of interest income, interest expenses and similar profit/loss items.

Earnings amounted to kSEK -192,572 (-160,897). Earnings per share before and after dilution amounted to SEK -2.03 (-3.80).

Cash flow and investments

Cash flow from operating activities amounted to kSEK -150,220 (-129,853). Cash flow from financing activities amounted to kSEK 555,886 (-6,352). Investments affecting cash flow during the period amounted to kSEK -128,762 (-139,256), mainly in the form of capitalised development.

Parent company

Net sales for the parent company amounted to kSEK 1,074 (1,670). The operating result amounted to kSEK -188,660 (-156,441) and the annual result was kSEK -198,483 (-161, 932).

Equity at the end of the period amounted to kSEK 771,676 (715,200).

Seasonal variations

The Group is currently being built up, with preparations for volume production and commercialisation of the system, and in this stage there are no seasonal variations noted over the year.

The share and share capital

The share has been listed on Nasdaq First North Growth Market in Stockholm since 10 December 2018. During 2020, the share price rose 335 per cent and closed at SEK 52.20.

On 31 December 2020, share capital amounted to kSEK 52,051, represented by 104,102,400 shares. Share capital increased by a total of kSEK 30,877 during the year. The increases occurred on three occasions; through a rights issue of 49,405,405 shares in the first quarter, a directed issue of 12,300,000 shares in the third quarter and the exercise of warrants through the issuance of 49,500 shares in the fourth quarter.

At the end of the period, there were 41,326,667 warrants, issued in seven different series with exercise prices of between SEK 13 and SEK 36. Full conversion of these warrants would increase the number of shares by 7,401,352 shares.

Related party transactions

During 2020, an amount of kSEK 3,333 (kSEK 12,740) was expensed relating to services delivered in conjunction with the company’s demonstration facility in Ouarzazate, Morocco. The counterparty is the state-controlled Masen. Masen holds 16,666,667 warrants in the company and has a representative on the Board of the company. Accrued expenses totalled kSEK 17,426 (14,093). These services are performed on market terms.

Responsible business


The Group does not conduct any operations that require permits or reporting under the Swedish Environmental Code.

The purpose of the operations is to sell energy storage units that enable an increased use of renewable energy and thus reduce emissions of greenhouse gases.

During the year, Azelio commissioned the independent research institute RISE Institute to perform a Life Cycle Assessment (LCA) to calculate emissions of greenhouse gases from the company’s product TES.POD. The institution’s report showed that the climate impact of Azelio’s system is 23 g CO2/kWh, which is significantly below that of lithium-ion battery storage and dramatically less than that of diesel generators, both of which are competing technologies. In the study, it was assumed that the solutions would deliver electricity for a period of 13 hours per day for 25 years, and it disregarded the environmental impact of generating the electricity required to charge the system. In addition, the study disregarded the fact that Azelio’s system also delivers a considerable amount of heat that can be used as energy in a variety of applications, and thereby contribute to further strengthening the product’s climate profile.

Significant risks and uncertainties

The current valuation of the company’s assets in the form of capitalised development costs and inventory is based on adherence to the prepared business plan. The Board expects the future sales volumes to be so extensive that the discounted cash flows generated will justify the current valuation with a good margin. The Board believes there is good potential to implement the business plan and that capitalised development costs are likely to lead to future economic benefits. The company’s capitalised development costs related to various technologies. All of them are, however, linked to the Stirling engine and the energy storage solution, the technologies upon which the company has built its business. The Board believes that, due to technical synergies, the current use of the Stirling engine was made possible by the company’s previous development of the gas engine. Due to the close relationship between these technical solutions, the machines are not assigned to separate cash-generating units. The Stirling engine is a further development of earlier technology and thus no impairment losses have been reported on development costs for earlier versions. On the other hand, inventory disposals and provisions have been made on an ongoing basis for components that were unique to previous versions of the product.

It follows from the going-concern accounting policy according to the Swedish Annual Accounts Act, that this is a fundamental assumption for, inter alia, the valuation of a company’s assets. In respect of capitalised development, there are also assumptions concerning necessary financing of the continued development that is required, as well as commercial realisation. Accordingly, it is natural that a valuation performed without these assumptions would have resulted in a different measurement of the company’s assets.

The Board agrees with the aforementioned assumptions and is of the opinion that the requisite conditions are in place. The Board is aware that there are uncertainties in respect of estimating the time and cost required for implementing full-scale commercialisation and industrialisation of the company’s product. This has been taken into account in the company’s planning and forecasts by the Board working actively on the basis of alternative scenarios and it also has preparedness for managing these types of challenges. This encompasses various current and long-term financing solutions and a flexibility in the development plans. Accordingly, the company’s viability is not considered to be threatened in 2021. To meet demand for an industrially manufactured product, Azelio is preparing to start series production in the third quarter of 2021. The expected growing business volume will tie up working capital, particularly at the start of series production and in the early stages of commercialisation of the product. At this stage, working capital is also particularly sensitive to shifts in cash flows. This risk is amplified by the uncertainty related to the pandemic’s development and consequences, for example, with restrictions on movement that could affect the start and completion of projects. Accordingly, the Board has made the decision that the company’s working capital need has increased, which has been addressed by a directed share issue in March 2021, as described under Significant events after period end and Note 31.

Azelio is in a build-up period that will enable industrialisation and broad commercialisation of the company’s energy storage system. The company has forged relationships with several well-established partners for sales and installation, who are gradually expected to play an increasingly significant role in the commercialisation of the product. Although the company concluded several MoUs with potential customers in 2020 and also received its first commercial order for its energy storage system, the technology has not yet achieved broad commercial success and the use of the technology is very limited. There is a risk that Azelio will not receive the orders that the company has anticipated or at the pace that the company expected, which in turn may lead to a shift in the commercialization of the company’s products and technology.

Azelio’s system, although based on established technology, is new on the market and the company has therefore not been able to collect complete and necessary data, for example regarding the system’s and its components’ life, any typical faults or deficiencies and service needs and associated costs, which may have negative market and cost impact.

Azelio relies on a combination of patent and trademark laws, trade secrets, confidentiality procedures and contractual provisions to protect the company’s intellectual property rights. Azelio has 13 granted patents and 15 pending patents pending. There is a risk that the company will not be able to obtain or maintain patent protection for important parts of its technology or that the company will not maintain patents in, for the company, important markets. The company may be involved in processes or other proceedings for alleged infringement of rights, which could be costly and time consuming, regardless of whether or not the claim is justified, and even if the outcome is favourable for the company.

Azelio’s products are intended to be sold globally in the geographies where the company’s system is most suitable, for example countries with good solar conditions. It follows that the company will operate in different countries which in some cases require regulatory approvals, certifications, approvals or requirements from government agencies or other administrative bodies. These may also have different local standards or specific deviations, which is common in the energy industry. There is a risk that the company will not receive permits, certifications or other approvals in due time.

Azelio’s profitability from product sales will depend on, among other things, the price development for aluminum, steel and energy (especially diesel), which is affected by a number of factors beyond the company’s control. Regulatory requirements, taxes, duties and other barriers to trade, price and currency regulations or other government measures may restrict operations There is a risk that competitors, both known and unknown, will develop more efficient systems and technology for products similar to those that the company develops and offers.

For financial risks, refer to Note 4.


On 31 December 2020, the number of employees was 153 (117), of whom 122 (94) were men and 31 (23) were women. The average number of employees in the organisation in 2020 was 135 (105).

Azelio as an employer

Systematic work environment efforts are to be a natural feature of Azelio’s operations in order to achieve efficiency and quality. The company is working actively to minimise the risks of work-related injuries, accidents and incidents and is working on activities that promote the employees’ health, job satisfaction and efficiency.

One aspect of this is continuous work on our processes, with the aim of promoting the employees’ everyday work so that they can focus on the right tasks. All managers with HR responsibilities undergo training in the Work Environment and Psychosocial Work Environment (AFS 2015:4). The need for work environment training is reviewed continuously.

Legislation and party agreements are minimum requirements. It is in Azelio’s interest to maintain a higher standard than this. The company regards this as a profitable investment for the future, whereby high work motivation and low sickness absence are the direct gains. Azelio has signed health insurance for employees, providing them with access to rapid support and specialist care. The company is a member of the Association of Swedish Engineering Industries and has collective agreements with Unionen, Ledarna, the Swedish Association of Graduate Engineers and IF Metall.

Azelio aims to be an attractive and developmental workplace for both women and men and works to ensure that all work teams comprise both women and men. A salary survey conducted in 2020, in respect of comparisons of jobs that are considered to be equal or equivalent, did not show any unreasonable salary differentials between women and men As an employer, the company aims to conduct targeted efforts to promote gender equality and diversity. This means preventing and counteracting discrimination, utilising everyone’s competencies and respecting differences regardless of gender, age, ethnic or cultural background, religion or other belief, functional impairment, transgender identity or sexual preference. All suppliers are evaluated according to Azelio Ethics standard.

The company intends to comply with the UN guidelines on sustainable enterprise and to measure compliance according to the UN standard, Global Reporting Initiatives (GRI).


The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the 2020 financial year.

Proposed appropriation of profit/loss

Amounts at the disposal of the Annual General Meeting (kSEK):

  • Share premium reserve 1,821,219
  • Loss brought forward -1,375,981
  • Loss for the year -198,483
  • Total 246,755

The Board of Directors proposes that non-restricted equity of 246,755 be carried forward.