Good morning and welcome to our first quarter 2025 presentation. My name is Rolf Barmen, Head of the Elmera Group. Our CFO, Henning Nordgulen, is, as usual, with me and will take us through the financials. Morten Opdal, our Head of Investor Relations, is also with us and will take questions during the presentation and address them to Henning and myself in our Q&A session. The first quarter of 2025 was characterized by mild weather. The temperatures were above seasonal norms and approximately two degrees Celsius higher than in the first quarter last year. As most of you know, electricity consumption is negatively correlated with temperature, as a significant part of the energy consumption in the Nordic countries is related to heating of homes and commercial buildings.
Therefore, average consumption decreased across all the goods reporting segments, leading to a 9% decrease in volume sold from last year, which again was the driver for the 9% increase in net revenue year-over-year. Certain factors like the temperatures and climate are out of our control, and we adapt to these factors as best as we can. However, something that is in our control is our operational performance, and customer growth is an important measure to mitigate the effects of milder weather. Therefore, we are very proud of the strong development in our customer base this quarter. We experienced solid growth both for the consumer and the business segment, with an accelerating trend throughout the quarter, and the trend has continued into April.
Further, we are excited about our B2B initiatives in the Nordic segment to further fuel this development, which I will come back to in the Outlook section. The dividend for 2024 was distributed yesterday at NOK 3.40 per share. It represents an attractive dividend yield for our shareholders underpinning our capital-light business model and dividend capacity. Moving on to the segments where reduced consumption due to mild weather played a significant part of all the reporting segments' net revenue development. Henning will provide you more details on his part of the presentation later on, but I will say a few words also. The consumer segment grew by 2,000 deliveries in the quarter, with positive contributions from both the Fjordkraft and the Gudbrandsdal Energi brands.
This demonstrates the robustness of the group's diversified branding strategy, and in the context of increased markups over the last years, which has been necessary to compensate for both increased financing costs and increased system and balancing costs in the Nordic power market, we are particularly satisfied with this development. Meanwhile, the business segment has passed the milestone of 130,000 deliveries and has recorded consecutive growth over the past four quarters, underscoring the stability and consistency of the segment. While average consumption decreased year-over-year due to the weather, we were able to partly compensate for this through increased average net revenue margin per kilowatt hour year-over-year. Within the group's new growth initiatives, the mobile business experienced a trend reversal in number of subscribers this quarter, where the growth was approximately 2,000 subscribers.
Further, the pipeline for new partners in the group's alliance concept and the Allbright brand is strong in the second half of 2025. In the group's Nordic operations, growth was moderated by seasonally low demand for spot-based products. However, the trend for the quarter was positive also here. In all, it has been an operationally strong quarter, and I will come back later to present our revised outlook. First, Henning will take you through the financials. Henning, the floor is yours. Welcome.
Thank you and good morning.
As Rolf mentioned, this quarter's financials were notably affected by the temperatures, which on average were approximately two degrees Celsius above last year. Volume sold was down 9% year-over-year, which corresponded to the 9% reduction in net revenue compared to Q1 2024. Net revenue adjusted ended at NOK 502 million compared to NOK 550 million in the first quarter of 2024. EBIT adjusted was NOK 174 million compared to NOK 230 million in Q1 last year, and the last 12 months' revenue was NOK 1.744 billion, in line with the comparative level per Q1 2024, while the last 12 months' EBIT adjusted was NOK 513 million, a decrease from NOK 545 million per Q1 2024. Operating expenses at group level were NOK 327 million compared to NOK 320 million in the first quarter of 2024. We confirm the stable nominal OpEx drives for 2025, and in fact, we already now commit to stable nominal OpEx also in 2026.
Rolf will come back to this later in his presentation. The group's net financial cost in the quarter was NOK 49 million, a decrease from NOK 54 million in Q1 2024, driven by a lower average elspot price level and reduction in volume sold. Payments to obtain new contracts also decreased year-over-year and amounted to NOK 32 million this quarter compared to NOK 40 million in Q1 2024. Over the last 12 months, the aggregate cash bill was NOK 135 million. Over to the market development, starting with the elspot price levels on the left-hand side. As you can tell from the chart, prices have been volatile, but on average, the elspot prices were lower this quarter compared to the first quarter of 2024. This led to a reduction in the net financial cost, but also a reduction in the credit compensation invoiced to business and alliance customers.
To the right, you can see that monthly supply changes in Norway continue to be more or less on track with the trend from 2024 and remain at a historical low level. This is partly the enabler for realizing growth while reducing the cash spent on customer acquisition. Over to the segments and starting with the consumer segment. We are very satisfied with the customer growth of 2,000 deliveries this quarter, and the growth was distributed across both the Fjordkraft and Gudbrandsdal Energi brands. The net revenue development was impacted by the higher normal temperatures, which drove the NOK 25 million increase year-over-year. This was also the basis for the decrease in EBIT adjusted year-over-year, as the operating expenses in the segment were fairly stable. The variable contracts continued slow run-off and represented approximately 4% of the segment's deliveries at quarter-end.
The business segment maintained its strong growth momentum, however, the increased temperatures led to reduced consumption volumes year-over-year, which in turn had an impact on the net revenues. The number of deliveries ended at 131,000 at quarter-end, realizing the 130,000 deliveries milestone. Volume sold decreased by 9% year-over-year due to the milder weather, although this was partly offset by an increase in the net revenue margin compared to Q1 2024. Adjusted for the effects of the mild weather, the underlying financial performance remained solid. Operating expenses decreased by NOK 1 million, resulting in an EBIT adjusted of NOK 86 million in the quarter. In the Nordic segment, the continued phase-out of legacy fixed price products and the mild weather led to a volume reduction of 13% year-over-year.
As communicated in the Q4 presentation, the demand for spot-based contracts during the winter is seasonally softer, and this affected customer intake in the quarter. That said, we experienced a positive trend throughout the quarter, and we look forward to capitalizing on increased internal sales capacity over the next quarters. In the short-term perspective, the increased sales capacity also contributes to an increase in the operating expenses, and while there has been a corresponding significant reduction in external sales commission, this has also not been fully reflected in the P&L statement, as Capitalis CPO amortizes over time. EBIT adjusted ended at NOK 4 million in the quarter, which was a decrease of NOK 11 million from last year. Within the new growth initiatives, the volume sold in the alliance concept also decreased as a result of the milder weather compared to Q1 2024, although not as much as in the four segments.
We were pleased to also achieve a trend reversal with mobile, realising a growth of 2,000 subscribers in the quarter, and at quarter-end, the portfolio amounted to 113,000 subscribers. Apart from the reduction in volume sold in the alliance concept, net revenue was also impacted by reduced credit compensation due to the lower eligible prices compared to Q1 2024. EBIT adjusted was NOK 4 million in the quarter, and the reduction year-over-year was distributed across the various initiatives in the segment. The net working capital at quarter-end was NOK 451 million, a decrease year-over-year, driven by low volumes and reduced eligible prices. On the right-hand side, net interest-bearing debt ended at NOK 754 million. The cash generation in the quarter was NOK 187 million, driving the reduction in net debt quarter over quarter, despite the increase in net working capital.
I'll give the floor back to Rolf.
Thank you very much, Henning. Let me begin with a brief comment on Norges Pris, which you probably have heard a lot of recently. This is the proposed addition to Norway's electricity support scheme. The proposal has not been adopted by the Norwegian government yet, as the consultation period closed on April 21. We observe that there is still somewhat uncertainty around the final structure. That said, one key aspect remains clear: the role of electricity retailers will not change. Customers will still need to maintain a relationship with the retailer. We still believe that the government will take a decision on whether to implement or not in June. Industry experts anticipate that if implemented, Norges Pris could lead to an increase in energy consumption, potentially by up to 10%. This would likely result in a positive impact on the group's net revenue.
For that reason, we view the potential introduction of Norges Pris as a net positive development. Next, we are pleased to report that the power trading function has been successfully insourced and has now been fully operational for approximately two weeks. As outlined during our capital markets day, this move enhances our ability to improve consumption forecasting accuracy, directly impacting the group's electricity costs. Additionally, it enables us to engage in intraday trading, which is a key measure in managing the rising system and balancing costs currently, affecting all participants in the Nordic power markets. We are also approaching the highly anticipated launch of Fuelcraft Eurotrac, our brand's official entry into the Swedish B2B market. We already secured a distribution partner with strong market presence and extensive reach, positioning us well for growth.
Building on the success of the Norwegian business segment, which over the last decade or so has transformed from a break-even business to a key contributor to the group's results, we are confident in the potential for growth both in Sweden and Finland, but starting off now in Sweden. Lastly, we are actively pursuing acquisitions, where we observe that the activity has taken up and we see increased market opportunities. Okay, let's talk a bit on our financial targets. We have previously disclosed our targets for 2025. However, given the very mild start of the year, with four out of four months with warmer weather than last year and correspondingly low volumes, we expect that our net revenue and EBIT adjusted will likely be below targeted levels for 2025, unless the second half of 2025 ends up significantly colder than normal.
Our OpEx target is reiterated for 2025, and we also extend our guidance to apply for 2026, meaning that we expect net revenue growth from 2025 to 2026, and actually also from 2024 to 2026. We expect that OpEx adjusted will continue a nominally stable trajectory and that EBIT adjusted will be in the targeted interval of NOK 550 million-NOK 600 million and likely for 2026 in the higher end of this interval. Our dividend policy remains unchanged. Let's start the Q&A session. Morten, do you have any incoming questions for us? Please, Henning, join me.
Thank you, Rolf. We have a question on volume development, and it goes like this: The volume in the business segment seems low compared to the Elmera data. Can you comment on this?
Yeah, it is correct that the Elmera data for the non-household segment is fairly flattish, though it does not break down average consumption and customer growth. Our experience is that our customer base is relatively sensitive to temperature changes also in the business segment, and this differs from the aggregated Elmera data. Additionally, we have decreased our exposure towards the large tender customers, which will affect average consumption slightly without having any significant impact on earnings, actually. Finally, I would like to end up on what I stated, that we have strengthened the margin during the quarter, and this strengthened margin partly offsets the volume reduction caused by the temperature for the business segments.
Okay, we have the next question. You mentioned in the Outlook section that you see increased opportunities for M&A. Can you elaborate a bit on this?
Yes, we see that more and more retailers now find it quite difficult to be both smaller parts and constellations in this market, and we see good opportunity now the next 12 months to acquire interesting prospects, actually. The activity in this market has definitely increased, and this is actually the situation for the entire Nordics. Whether it will be in Finland, Sweden, or Norway, we don't know yet, but the activity across all these countries is taking up.
Okay, we have a question on the power trading insourcing. What is the status of your new trading or power purchase division?
The status is that we are now complete when it comes to manning. We have approximately 20 people now working continuously with our power trading. We have manned it up 24/7, 365 days a year, and we are fully functional. We were fully functional by the 28th of April. Now we are the balancing responsible party for 46 parties, where six of these parties are our own companies. This is quite exciting, actually. The sign so far is that we are quite accurate in our forecasting. We look forward to reporting more on this topic, of course, when we come to our second quarter presentation in August.
Thank you. The next one is: How do you expect Norges Pris to impact the margin in the consumer segment? Do you expect increased competition in 2025?
It is, we haven't seen signals this yet, actually, and the switching rate is still on a very low level. We are prepared, and we are prepared to spend some more money to win such a competition, of course. It might seem that the introduction of Norges Pris also has a beneficial impact on the M&A agenda, actually. It is quite difficult to say how this will turn out in the end, but we are prepared, and we are looking forward to a decision whether it goes in the direction of implementation or maybe it will be postponed, but we don't know for sure yet.
Okay, this one is probably for the CFO. How should we think about depreciation of acquisitions for 2025 and 2026?
The depreciation has been reducing over time. This year, it will amount to approximately NOK 85 million because it's quite predictable with the historical transactions that have been executed. For next year, the level will come down to about NOK 35 million.
Thank you. A question on guidance here. You state that you expect 2025 EBIT below the guidance. Is this only due to the Q1 miss, or do you expect the coming quarters to also be below your initial expectations? If so, why?
Temperature is not easy to predict, actually. Obviously, we had hope that April was a bit colder than it was. April has been a lot warmer than we hoped for. Also, the start of May has been terrific when it comes to weather, but not that terrific when it comes to volume consumed. It is all about temperature, actually. It is extremely hard for us to mitigate a high-volume quarter that first quarter normally is with the second and third and fourth quarter. If it turns out that we will have a very cold period from August to December, then obviously we can mitigate some of the losses in the first quarter.
Thank you. A question on the consumer margin. The consumer margin was slightly down year-over-year despite price increases and also increased contribution from margins on variable contracts. Can you explain a bit on this?
Yeah, over time, the composition in the consumer segment has changed, as the question indicates. The variable contracts continue to take off. This has an effect. As you have observed, we have successfully repriced our corporate products, and essentially apart from the 4% now variable, it is variations of the spot pricing. This is just, we see it as a marginal difference. We have been quite successful, in our opinion, in compensating for the reduced variable portfolio and also in fees in the consumer business, invoicing fees, etc., with an increase of both the margin and the monthly fixed price.
I would also add that the margin consumer segment are quite strong. We are very satisfied with the margin development. As you said, we had to mitigate also the invoicing fees and the reduction of the invoicing fees. What is more, the system costs, as I stated earlier, all the system costs have increased. There is a lot to mitigate, and we have done this in a very good manner, I would say. The margin in the consumer segment is strong also for the first quarter.
Thank you. The next question. It seems like the market is relatively stable given low market share on supply changes. We've also seen you and some competitors lift markups or prices. Can you share some insight on the competitive situation also between your segments?
It is fairly stable. The competition from the active partners are at the same level as they've been the last 12-18 months. I think that most of the players now, they see that they have had to increase their margins because the costs are increasing. I don't think we will see a worsened competition situation the next six-12 months. I think that the competition, the competitive situation will be as it is today and as it has been the last 10 or 12 months.
Okay, the last question. You have lifted your fixed charge for a large share of your existing customers from NOK 49 to NOK 69 per month. When will this have full effect on earnings?
I assume this is related to the consumer segment in Norway, which there has been a change recently that will have a part effect in the second quarter and full quarter effect in the third quarter.
Okay, that concludes the Q&A session. We would like to thank you all for your attention and wish you all a good day.
Have a good day. Bye-bye.