February 24th 2023
Group financial development
Quarter 4: October – December 2022
Full-year 2022
Significant events
Quarter 4: October – December 2022
After the end of the period
Other events
Quarter 4: October – December 2022
Comments from the CEO
Azelio's offer
Azelio’s direction remains clear. The global need for energy storage solutions continues to grow, which will be crucial in the transition to renewable energy sources. There is especially a need for solutions which can deliver stored energy over time intervals that make it possible, together with renewable energy sources, to cover base load around the clock An example of the state authorities' willingness to support this need is the Inflation Reduction Act (IRA) in the US, which was passed last autumn and focuses, among other things, on significant investments in the energy, energy storage and climate areas. Another example is the EU Green Deal Industrial Plan and Net-Zero Industry Act announced recently by the President of the European Commission at the World Economic Forum in Davos. It is reasonable to expect similar investment efforts elsewhere in the world as well.
We have a clear position in the market with our combination of 13+ hours supply of stored energy, and scalability that makes the system adaptable for efficient distributed use. The fact that Azelio's system can also deliver both electricity and heat, and is already installed commercially on the market, gives us a unique position among alternative energy storage solutions in the market.
Time is money
Despite this, the time to convert ongoing business discussions into signed customer agreements has taken significantly longer than anticipated, which in turn will lead to a liquidity shortage for the Company already at the end of the second quarter of this year. Many different activities to secure this necessary funding have been underway since the beginning of the year, including explorations for a new rights issue. In parallel additional cost-cutting initiatives are being planned. To secure 12 months of continued operation, the Company needs between SEK 150 and 300 million, depending on how large new cost reductions can be implemented.
We are still optimistic about getting new orders during the year and continue to prepare to deliver on these.
Our prioritized markets
We continue our long-term work to establish ourselves in the prioritized markets MENA, southern Africa, Australia and the USA. Through a few selected projects where we initially take a stake in the project and sell the energy to the end customer (EaaS, Energy as a Service), we will secure the reference project that will generate additional business.
We are also working together with partners to create solutions that will make it easier for our customers to secure project financing, removing a roadblock that has resulted in some delayed orders.
In the near future, we are focusing on creating more business in southern Africa and MENA. Here, the development has come the furthest, and I see that we will be able to switch to direct sales first in these markets. In parallel, we are intensifying the strategic work towards the US – the market that I expect will be the largest medium and long term. Work on adapting and certifying the product for the US market is underway and is expected to be completed next year.
The future
All signs indicate that the potential and opportunities for energy storage systems continue to increase – and we have a solution that is a unique and important building block in renewable energy systems going forward.
In recent months, I have travelled a lot in Egypt, the United Arab Emirates, South Africa and the US among other places, and have been strengthened in my conviction that our energy storage system is what customers need and want – and that we are early compared to other technologies, which is a strength but also poses challenges.
The path towards success for a new technology in a new market is not easy, straightforward, nor trouble-free – and the immediate future of Azelio is no exception. All our energy is put into securing new TES.POD orders as well as new financing.
Jonas Wallmander, CEO
The full report is available as an attachment to this release and can also be found on the company website at the following link: https://www.azelio.com/investors/financial-reports-presentations/
Azelio is a Swedish cleantech company. We have developed an ingenious long duration energy storage technology, providing dispatchable electricity and usable heat for all hours of the day – with zero emissions and at a very competitive cost.
Azelio
Lindholmsplatsen 1
417 56 Gothenburg
Sweden
Email: info@azelio.com
© Azelio 2023