Otovo launches program reducing cost by NOK 200-225m annually

10 Sep 2024 08:00 CEST

The Board of Directors of Otovo ASA has approved a new cost program that is
estimated to reduce costs by NOK 200-225m per year. As part of the program, the
number of employees will be reduced to around 200, from a total of 366 at the
beginning of this quarter (down ~46%).

The cost reduction measures will encompass all countries and functions. This
will bring costs down to a suitable level for current installation volumes, as
communicated on 20 August (Q2 earnings release).

The selection of affected employees will happen in September, with a majority of
departures occurring in the coming weeks, and with severance payments expected
during the third quarter. The bulk of cash improvements from the program are
anticipated to have taken effect by end of year 2024.

Approximately NOK 150m of the 200-225m annual savings will result from
reductions in employee count, affecting payroll and capitalized R&D. An
additional NOK 50-75m will be saved in general & administrative costs and
marketing.

For comparison; in Q2 personnel cost (payroll and capitalized R&D) was NOK 80m
(approx. 320m annualized), while marketing and general and administrative costs
amounted to NOK 55m (approx. 220m annualized), meaning that the personnel costs
are to be reduced by 47% and other costs reduced 22-34%.

Increasingly, Otovo’s projects across Europe are managed from the Shared Service
Center in Madrid. By concentrating our teams, we are able to efficiently
allocate resources to the markets where capacity is required. We are able to
maintain local insights, and also gain efficiencies in execution across all of
our markets. Our technology platform, which is the same in all of the countries
where Otovo is present, enables us to focus on our essential functions, and
reduce idle capacity, even as the solar demand varies locally.

These reductions affect more than half of current employees through downsizing
and changes in job location. This is not unlikely to impact sales and
installation times in a transitionary period.

Andreas Thorsheim, CEO of Otovo, remarks:
– These are necessary reductions in cost levels to bring the company to
profitability in the current market environment. Combining the ongoing portfolio
sale and the improvements we have done in partnerships, hardware offerings and
sales method over the last year improve our robustness for 2025, says Andreas
Thorsheim, CEO.

Several European solar markets have seen a dip in 2023-24, after the expansion
of demand in the wake of the energy crisis of 2021-22. Solar installation costs
have reduced significantly in this period, helping profitability even as some
markets see tougher financial conditions for homeowners and lower electricity
prices.

– The importance of residential solar for the energy transition in Europe is
indisputable. Otovo's unique platform has shown to be the most efficient way to
purchase and install solar, batteries, energy management systems and EV
chargers, Thorsheim adds.

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Disclosure Regulation

This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Metrics used in this notice are defined in the attached financial report.

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About Otovo: For homeowners, Otovo is the easiest way to get solar panels on the
roof, and batteries in the home. Otovo is a marketplace that organizes hundreds
of local, high quality and qualified energy installers. The company uses its
proprietary technology to analyze the potential of any home and finds the best
price and installer for customers based on an automatic bidding process between
available installers.

Follow us on investor.otovo.com for reports, financial calendar, contact details
and more.

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