Good morning and welcome to Otovo's first quarter presentation. My name is Petter Ulset and I am Chief Financial Officer of Otovo. Today's presenters are Andreas Thorsheim, Founder and CEO, Rikard Eide, Engineering Manager and employee number four in Otovo, and myself, Petter Ulset, Chief Financial Officer. Today's agenda is that Andreas will start with an business update. I will take you through the financial results before Andreas will host a strategy update while Rikard will do a demo session. We will end with a summary and outlook, and the customary Q&A. Over to you, Andreas, for the business update.
Thank you. Ladies and gentlemen, we're very excited to present this quarter's numbers. Looking back to June and July last year, I think I'd be willing to give up a limb or two back then if I was certain to have the installation pace and capacity that we've had this winter and spring. This quarter is a record quarter for us in terms of installations. We did more than 2,800 installations in the quarter, a quarter that is marked by wintery weather in many of our countries. Despite that, we were up sequentially by more than 600 projects from Q4 of last year and grew about 100% from the same period last year.
In this company, we recognize revenue as installations get completed. As a consequence, this is also a record quarter in terms of revenues. Our revenues generated came in above NOK 400 million, a handsome increase from Q4 last year and a growth of more than 200% from the same quarter last year. That growth was felt both in the direct revenue and in contracted subscription revenue. We're also happy to say that the margins have expanded and are set to continue their climb, both measured on IFRS and on the subscription profit. We see an expansion of about one percentage point, which means that the blend is also up one percentage point. With regards to sales, we're sequentially up 7% from the Q4 slump, and we're seeing increased momentum in several key markets. I'll get more back to this later in the presentation.
It's also worth noting that this quarter is one where Italy, our strongest market in Q4, was out for several months due to the regulatory uncertainty that that country experienced. That in part explains the sales numbers in comparison to the same quarter of 2022. With regards to our pipeline, that was worryingly long at the end of Q3 at 7.7 months waiting time.
It came down to 6.3 months waiting time at the end of last year and is now at a much more comfortable four months, and that's where we want it to be. The supply chain has overcome the bottlenecks of 2022, of course, we now can have an accelerated pace of installations. This is beneficial for consumers who see waiting times come down, that's a positive in terms of meeting the consumer's expectations. It's also worth noting that a faster conversion from a signed contract to an installed project leads to faster conversion from marketing spend to gross margin earned. Now to our subscription portfolio, this has been a very strong quarter once again for the subscription portfolio. The share of sales in the subscription or the subscription share of the business is up to 39% as measured by the number of contracts sold in the quarter.
The accumulated contracted subscription revenue is up to NOK 473 million. It's both the strongest increase ever recorded and a growth of almost 300% annualized from last year. The ARR is also up to NOK 27 million, up 238% from the same quarter last year. That means that this portfolio is now beginning to generate really handsome income. Now let's turn to the business health metrics. Here too, it's a pretty good story this quarter around.
The trend is up and to the right for all the metrics. The battery attachment rate as measured at the time of installation is at 24%. It's our second highest number ever. The ticket size as measured in kroner is at NOK 134,000, up NOK 14,000 from the Q4 of last year. Here it's worth having a little caveat that the weak kroner helps lift this number on top of the underlying growth that we've seen. In terms of the subscription share installed, it's at 30%.
That too is a record, the gross profit generated bouncing back to 21% from a low point of 20% in Q4 of 2022 and looking to rise going forward. In terms of the profitability of individual markets, this is going to be an important slide to follow in quarterly presentations ahead. We're happy to say that Sweden is profitable for Q1. Second quarter of profitability for Sweden historically. We'll move towards the right in terms of checking off green boxes on this slide. We also see that the all new markets are now having positive unit economics as planned and expected. As they increase volume, they too will move towards the right here.
Of course, us as management, we're looking to have all markets profitable first on the generated basis that blends both direct income and the value creation from subscriptions, and then eventually on IFRS. We're happy about this and optimistic about the outlook for Q2 and Q3 when it relates to this. Now over to Petter for the financial results.
I will now take you through our financial results. Looking on our reported financials, we ended the quarter with NOK 281 million in total operating income. That is up 2.5x from NOK 112 million in the first quarter of last year. OpEx expanded relatively less, bringing EBITDA to negative NOK 79 million, which is a 21 % point improvement for the first quarter of last year. Please keep in mind that we have had the weakening NOK in the first quarter, meaning that the impact on revenues is NOK 25 million, while the impact on OpEx is NOK 7 million.
The impact on EBITDA would then be that the EBITDA, underlying EBITDA, is slightly better than what is shown on this slide. Looking on our consolidated balance sheet, we ended the quarter with NOK 580 million in non-current assets. The increase here is largely due to investments that we have done in our subscription SPV. We had inventory of NOK 8.9 million, which is slightly lower than in the fourth quarter of last year. We ended the quarter with NOK 347 million of cash. I will get back to that number. Otovo generates shareholder value through our marketplaces. In our marketplaces, we sell solar systems and batteries to consumers across Europe. Value drivers in the marketplaces are our ability to increase gross profit and to maintain a high capital efficiency by having a negative working capital and also keep growing installation volumes. We also build shareholder value in our contracts.
Value drivers here is our ability to deploy capital and the return that we earn on that capital. Our focus here is to ensure that we originate assets with a good underwriting framework, and that we keep following up these customers over time and ensure that they pay according to the contracts we have entered into with them. We are able to build shareholder value in our marketplace and our subscription portfolio by making investments in OpEx. Here, we generally make investments ahead of revenues as we have a company that is growing quite rapidly.
Value drivers here is that we over time are able to maintain the operational leverage and also that we can decrease unit costs for that labor. Our current focus here is to ensure that new markets are set up as all markets with a high operational leverage, and also that we're able to leverage our Pan-European model, where we have varying labor costs across our 13 European markets. Last but not least, we need to continue to work with our balance sheet. Here, we are continuing to work with our debt position to ensure that that scales according to the same degree as the subscription portfolio.
We will also work to prove that we can monetize part of the subscription portfolio. Otovo's customers can choose to either buy a system directly from Otovo. This would for us and our marketplaces be recorded as a direct purchase revenue. Alternatively, the customer could choose to enter into a 20-year agreement with our subscription SPV.
That system would also be sold from the Otovo marketplace to the Otovo subscription SPV on the same price as we would sell to a direct purchase customer. That sale is of course eliminated when we look on our consolidated financials. The subscription SPV would finance the acquisition from the marketplace with a proportion of debt and a proportion of equity. When we then zoom in on our marketplaces, we have here shown what we believe is the underlying financials of the marketplace. Here on the left-hand side, we show the total revenues, which then includes NOK 270 million of direct purchases revenue and then NOK 96 million in subscription SPV CapEx, which is what the subscription SPV paid to the marketplace.
Towards those NOK 370 million, we have NOK 310 million of COGS, bringing us to a gross profit of NOK 60 million. In the first quarter, we also had NOK 97 million of local OpEx. That is OpEx that is accounted for in our local marketplaces and does not include group costs. That means that the marketplace EBITA would be negative NOK 37 million, which is an 8 % point improvement over the first quarter last year. Please keep in mind that in the NOK 97 million of OpEx, roughly one-third is towards new markets, which has contributed relatively less with installations and revenue in the first quarter. Turning over to our subscription portfolio. As mentioned, a key value drivers for the subscription portfolio is our ability to deploy capital.
In the first quarter, we deployed NOK 96 million of capital, which is up from NOK 19 million in the first quarter of last year. Please keep in mind that in the 96, there will be a slight currency effect. On that capital that we deployed in the first quarter, we earned a 10.5% IRR according to the contracts. Turning over to the right-hand side, we have on the top the contracted subscription revenue, which is the value of the contracts that we originated in Q1. We show that value for different assumptions on inflation and discount rate. The center, NOK 133, is what Andreas talked about in his sections as contracted subscription revenue. Please note that if you move across the diagonal here with increasing inflation and discount rates, the value of those contracts is roughly unchanged.
Looking at the bottom, we have accumulated contracted subscription revenue. That is the value of the portfolio. Also here shown for different inflation and discount rate assumptions. The center here is NOK 473 million, which is the accumulated contracted subscription revenue that Andreas talked about in the first section. Please also keep in mind that there will also be some currency impact on those two metrics. Zooming in on inflation. As we have mentioned, we have the ability to adjust customer payments on an annual basis with the development in inflation in the preceding year. In the first quarter, the average change across our markets was 7.2%, meaning that the payment for the 13th month of a customer contract would, in on average, be increased with 7.2%.
Looking on the right-hand side, we see how that impacts cash flow over the lifetime of the customer. Here we have shown that the NOK 19 million that was invested in the subscription segment in the first quarter of last year was permanently lifted up, and that you will also have a compounding effect on that as we move towards the end of the customer lifetime. So for the NOK 19 million that was invested last year, we have roughly kind of the lifetime value of cash flows with, around NOK 2 million . This effect is of course something that we have seen over the last year and that we also expect to see over the coming quarters as inflation is expected to be elevated for quite some time.
Looking into how we invest in OpEx in building up our 13 European markets. To the left, you see the split between local and group OpEx. In the first quarter of 2022, we have NOK 75 million of OpEx, where roughly NOK 32 million was group, NOK 44 million was local. That expanded in Q1 of 2023 to NOK 136 million, where roughly NOK 39 million was group and NOK 97 million was local OpEx. That means that we have expanded the group OpEx with NOK 7 million, while the majority of the OpEx growth is in our local markets. If we also split out the local OpEx, you will see that roughly NOK 53 million is related to payroll, while the balance of NOK 44 million is other OpEx.
If you zoom in on the payroll piece, you will see that 70% of the payroll is towards mature markets, while 30% is towards new markets, which in the first quarter, accounted for a significantly lower share of installations. That means that we have made significant investments over the preceding quarters in order to build up the new markets. We will continue to see that effect in Q2, but as new markets, also deliver more and more installations, we will see that operational leverage start to work more favorably for new markets and for Otovo. Looking over cash and balance sheet side, we have discussed our cash performance, where we saw that operational leverage improved, reported IRRs improved 21% year-over-year. We have also shown that we can maintain capital discipline.
We have divested our stake in Holu. We make relatively disciplined software investments and working capital remains negative. We also shown our ability to work on our balance sheet, where we put in place a new debt facility in the first quarter. We drew on that facility now in the second quarter. It will be key priority for us is to also unlock the accordion piece of the debt facility. We have also, as stated on our fourth quarter presentation, initiated a process to sell off the NOK/SEK portfolio. That will of course generate proceeds that we can invest in both our marketplaces, but also in our SPV to grow additional portfolios.
As mentioned, in our subscription portfolio, we build portfolios of high quality customer contracts with attractive yields, with low credit risk that is certified green by CICERO. A key part of our business model is that eventually we will sell these portfolio off to third parties, to show the underlying value in these subscription portfolios. As stated in the fourth quarter, we have initiated a process of selling parts of the portfolio. We will start with the NOK/SEK denominated assets while we continue to build euro assets to a bigger size. Going forward, we will monetize portfolios more regularly as we now originate a much higher volume each quarter than we have done historically.
Turning over to our debt facility, we announced in the first quarter that we have entered into a new agreement with the DNB and SR Bank. In that agreement, we have a EUR 100 million credit facility, and the structure of the credit facility is that we have a EUR 50 million RCF that we have started to draw on. We are now in discussions with the bank on putting in place the last EUR 50 million, which is an accordion option. In that process, our key discussion point with the banks is of course to continue to increase the leverage size towards the 75% that we have for Norway, Sweden and Germany. Ending off with our cash position. We started the quarter with EUR 194 million of cash.
We did a private placement that contributed with NOK 244 million. Operational cash flow for the quarter was NOK -70 million. Investments in the SPV was NOK -34 million, and other items was positive NOK +13 million. We ended then the first quarter with a cash flow of cash position of NOK 347 million.
It really is an exceptional time for the solar industry, and we thought it would be worthwhile to take a step back to look at what's going on and how Otovo is positioning itself. As 2022 came to a close, we closed the door on an exceptional year in energy, and we now believe that solar energy can return to normal, and that's a good thing. All net zero scenarios contain large amounts of solar energy, and a lot of that is residential.
That trend was strengthened as we experienced an electricity shock and an energy shock last year in the wake of Russia's invasion of Ukraine. That increased demand put supply chains of equipment under pressure and led to a rare increase in the price of solar modules.
Now we see that trend, or rather we see that phenomenon reversing and the return to the declining cost trend that we've become accustomed to in solar and that drives this industry's competitiveness. On the hardware side, the prices were coming up in the beginning of 2022 before plateauing and then starting a downward trend at the end of last year that we've seen accelerate now in 2023. This is driven by increased manufacturing capacity coming online at the end of last year, a reduced freight cost from Asia, and also reduced cost of raw materials, most importantly polysilicon. On the labor side, the increased demand gobbled up all supply of available hands in the solar industry at the beginning of 2022.
Throughout the year, an influx of adjacent craftsmen from roofers, carpenters, and electricians came to the rescue, and we saw an increase in capacity at the end of last year. Now this capacity is at risk of idling during this spring and summer. We're seeing the prices on the platform coming down as installers compete to fill up their pipelines. It will be interesting to follow this going forward because if you combine a reduction in the hardware price with a declining trend on the labor cost of solar, we could really see an interesting drop in the cost of solar installations.
We expect that that can be a driver for demand going forward as we transition from a situation of exceptionally high demand with exceptionally high prices, that was the story of 2022, to the situation we saw in Q4 and Q1 with medium demand and high prices for solar into a situation where we have medium demand but much lower cost for solar, increasing solar's attractiveness throughout this year. Because solar will do well both in 2023 and years to come as we approach 2030. This slide, we've borrowed the contents from our friends at LCP Delta, who have made a really good report about the outlook for residential solar in Europe now in April.
The main story is that across the board, we see a lot of growth in Europe. Otovo is glad to see that we're positioned in all of the major growth markets from Germany, U.K., Italy, and Spain at the one end, but also the rest of Europe, where countries like Norway, Austria, Switzerland are expected to grow quite substantially in the years going into 2030. Europe is really having good tailwinds for solar. This year is of course a bit more of a mixed bag and mixed market than what we saw in 2022 when the rising tide lifted all boats. Electricity prices last year were rising and came to all-time highs with records set almost daily.
This year they're somewhat down, but remain high compared to historic figures, and that means that also payback times remain really robust across Europe and could strengthen further as the cost of solar comes down. Consumer sentiment last year was almost desperate to get alternatives to expensive gas and electricity. This year, that picture is a bit more varied between countries, and it's clear that in some markets in Europe, subsidies for regular electricity or fear of inflation, higher mortgage costs are competing for attention with this energy crisis that we're experiencing. On the equipment side, as I said, last year, enormous hikes in equipment cost.
This year we're returning to the declining trend. When it comes to regulatory support, last year was a story of market-created demand. For all the talk, there wasn't a lot of policy action, and we can say that all the talk from EU and national governments, it pretty much is still in reserve. We believe there's a reserve of stimulus that will be unlocked in 2023 and years to come. Overall, a very sunny picture last year. This year, a little bit more clouds, but that should benefit a player like Otovo that is present in many regulations and meeting many types of consumers across Europe. We are a company that's been doing well under changing conditions. Otovo is a seven-year-old company.
For our first five years, we found ourselves in the type of environment that we're experiencing now with declining hardware and labor cost. In this period, we expanded to seven countries, and we grew our installation capacity substantially. We went into the period in yellow color here with increasing hardware and labor cost, a very different situation, but we kept growing nevertheless. Now this winter, we've returned to normal, a situation that suits us well, in which the constraints are not on the equipment side, not on the labor side, but it's about creating a demand, and that's what this platform has been built for.
This resilience and ability to grow in different conditions is in large part driven by our software platform. It's a software platform that enables us to help consumers make good decisions online, get good prices online without having a home visit. It's this platform that allows us to monitor the progress of consumers as they come to our website from partners or online sources, get nurtured into a signed contract, and then become a project that we need to get installed through our installer network, and we can monitor this in our software.
And for the installers, it's a way to create business, to get feedback on their prices and competitiveness, and to get the project out the door in a compliant and well-documented manner. Enough talk and tedium. Let me invite on stage my friend and colleague, Rikard Eide, who's been central in developing this platform, to do a bit of a demo. Rikard, please come on stage.
Thanks for having me. Today I'm gonna go through the entire journey, from the installer reviewing the pricing on the marketplace until the customer is producing clean and cheap electricity on the roof. After signing up, installers in all our 13 markets sign into the Otovo platform. They're greeted with a simple and intuitive interface where they can quickly figure out how well they're doing on the marketplace. This allows them to stay competitive and offer the best value to our customers. The installer covers a specific area, and based on our marketplace data, we provide them with insights as to where it might be smart to expand.
The installer can at any time revise and update their pricing. They do this by adjusting costs across all different areas of the installation. In this case, the installer is lowering their price, which should give them more projects in the future.
Great. Now let's perhaps have a look at the consumer experience as they become clients of Otovo.
Yeah, sure. Our customers can come from different places, some through Facebook and Google. But in this case, we're gonna look at how a customer visiting Castorama, our partner Castorama site, will get the solar panels from Otovo. The customer visits Castorama website, where they choose to learn more about solar panels for their home. After entering their home address, the customer proceeds to verify the exact roof they want panels on. Our advanced algorithms then assess the roof's solar potential, providing an estimate of the electricity produced and the savings it will generate.
The customer can then choose to be called by one of our sales agents or proceed to configure their own offer. They can review and sign it online, all within a few minutes. We're also proud to announce a new feature where customers can decide exactly where they want their panels to be placed. The customers simply indicate where on the roof they want panels, then our artificial intelligence will pick up any obstacles on the roof, like windows or chimneys, to assist the customer. To the best of my knowledge, this is a world's first. We now let customers buy PV online and fully self-serve. What happens next is when the customer is happy, they proceed to review all the details of the offer. If everything is okay, they can go ahead and sign it online.
Great. Well, I guess that's quite convenient for the consumer, but how does this look for the installer who's gonna do the work?
Once we receive the project from the customer, the installer is notified through the Otovo platform. Here we see a new project that just came in. We worked hard lately to improve and streamline our capacity algorithms. We're now able to automatically assign the project to the installer immediately after the deal was signed. The installer proceeds to review the project details, such as the uploaded pictures and layout, so that they can start planning the installation.
All right. That's the mode that the installer uses as he's in his office or warehouse, but that's not so convenient to bring on site and up on the roof. Perhaps you can take us through how the installer interacts with Otovo once he's on site.
Yes. On site, the installer will use our brand-new installer app. This app is typically used by installers on site. At Otovo, we have strict requirements for quality and safety. The installer uses the app to review the project details and to indicate that the work has begun. While they work, they must upload a set of images to prove that the work is up to Otovo's high standards. With the app, this is super easy. They take photos of the installation, which are then uploaded to the platform for review. This saves time and money for the installer, Otovo, and the customer by streamlining communication and documentation. The installer also uses the app for editing team details, inputting serial numbers, and uploading regulatory documentation.
All right, now we've followed this solar project from its beginnings when the installer inputs his prices in order to compete for work on the platform. We've seen a consumer make his choices and sign a contract online that has turned into a project that the installer plans from his office and then uses the Otovo Installer app on site and on the roof in order to complete the installation. I guess we're almost done. What's next for the consumer now?
This is where the fun begins for a consumer. This is the place where customers can easily monitor the performance of their solar panels in real time. They can view the energy production during the day and see the environmental impact they're having. They can go back to any given day in the past and compare. Here, for instance, I think we had some midday clouds. They can also see production across weeks, months, and even years. That's great if you want to compare production with previous times. With the Otovo app, our customers are always on top of statistics.
Great. Thank you so much, Rikard, for taking time to walk us through the product. I guess we have a Q&A, but you have more important work to do. I'll let you get back to it, and we'll now turn to the summary and outlook. As we look into the year ahead, we've set ourselves a few priorities that are all about capturing the market rebound that we expect and increase the operational efficiency and profitability of this company. First, together with our installers, we will work to reduce the project cost on the marketplace. That means cheaper projects for consumers, and we believe that will be helpful in stimulating sales growth during this year. Second, as you've seen, we've been working on our software continuously for seven years.
This year a lot of focus is on software automation in order to improve sales performance, in order to improve our gross margin, but also to reduce the operational expenditure per project. That is something we'll also work on outside of the software to show increased operational leverage in this business as we grow both in existing and in new markets. For the portfolio of subscription assets, it's clear that we have two objectives. One is to increase the leverage ratio on the debt facility. That is important in order to keep growing the subscription business. We've done that handsomely over the last few quarters, and we plan to do that in quarters ahead. We want to do that with a minimal injection of equity as we grow.
Of course, we want to prove the value of our subscription portfolio by monetizing a first subscription portfolio sale in order to release cash back to Otovo. This quarter is one where we can say that with regards to OpEx, the hardest part is behind us. The operational expenditure grew by 77%. That's significantly less than the size of the business and the growth in it. A lot of that has been driven by new market expansion. These investments in new markets happen ahead of their profitability, that effect is of course at its peak this winter and spring in Q1 and Q2.
With regards to our spending, we plan to be disciplined in the marketing spend by having a larger portion of the budgets allocated centrally so we can move our EUR to the locations that have the best ROI for every marketing EUR spent. Of course, we will keep discipline on cash with the flexibility and planning that has been laid forward in the financial framework by Petter earlier today. With regards to the outlook for the first half of 2023, we see that the revenues generated came in at 408 million NOK.
That's comfortably ahead of guidance for the year given previously, where we said we would grow at at least 100%, and this represents about 150% growth as we are at the halfway mark of the first half. It's natural that we would also revise the estimates for this first half upwards. We're adjusting the first half targets upwards by nearly 30%, representing 150% growth compared to last year, to NOK 850 million in revenue generated for the first half. Before we enter the Q&A, let's sum up this quarter. It is our strongest quarter ever in terms of installations and revenue.
We're revising the outlook upward, and we will maintain discipline on marketing and cash. It's been an all-time high quarter. We had profitable installations in 13 European countries. We did 2,832 installations in the quarter. That's almost a doubling from the same period last year. On unit sales, we're rebounding from the Q4 slump, doing 1,962. That is down compared to Q1 last year, but without Italy at full pace.
Revenues come with installation, so the revenue as measured by IFRS is up 2.5x to NOK 281 million, and revenues as measured by revenue generated, NOK 408 million up 3x, indicating strength of the subscription portfolio. All business health metrics are on the right track. Ticket size, subscription share, battery share, and gross margin all on a positive trend in this quarter and all up from Q1 2022. The subscription portfolio is scaled and growing. We deployed NOK 96 million in subscription SPV CapEx versus NOK 19 million same quarter last year. That's 5x up from that period. And we're doing that while maintaining a stable internal rate of return.
That is at 10.5% this quarter in the band of 10%-11% where we've been previously and up from 10% in the same quarter last year. With a bit of pride and a lot of anticipation for the year ahead, I will now open up for questions and welcome also Petter back on stage with me. We'll leave you a couple of minutes to input questions. I see we've had a lot this time around, I think we'll just get to it.
First one is, "Your margins improved somewhat from Q4. Are you done with installing the, quote, 'bad projects' now? What would we expect for gross margins in Q2 and Q3? I think I'll pass that one to you, Petter. Thanks.
I think we start with a zoom out and look on the overall direction of travel. We are bringing new markets now increasingly up to speed. They are of course starting with lower gross margins Which, of course will have an effect as the projects that have been sold in the first quarter will get installed in the second and third quarter. That effect will of course then, be, a negative effect on margins. On the positive side, the bad projects that we saw was the result of projects sold in the first half of last year, to a large degree has now been installed and that effect should be now behind us.
All right. What would your sales numbers be in Q1 if it weren't for the drop in Italy? Now that's a bit of a hypothetical, of course. We can say that, you know, Italy represented about a quarter of the business in Q4, and obviously significantly less in Q1 as Italian consumers were awaiting regulatory certainty. Next question. Your pipeline is now down to four months. In January, you said that four-six months was the range you were going for. Are you worried about running out of projects? First of all, we're comfortable with the pipeline the way it is now. Four months is a good conversion time on average for this portfolio. It means consumers get results quickly.
We convert marketing cash to gross margin cash faster. That's a good thing. In general is helpful for sales and the consumer experience, which is, you know, key, of course. Once we're at four months, it doesn't help to get a lot lower and we want to be fast, but we also want to grow the business. Of course, in quarters ahead, the sales numbers ought to be higher than the installation numbers because it's predictive of where you'll be the quarter after. We of course, need to grow sales if we wanna grow installations, and that's obvious. What discount rate do you think you could reasonably expect to sell the portfolio on if it were to sell today?
I won't speculate too much on that, but I think, in Petter's presentation, there was a sensitivity table that showed how an increase in the discount rate, if accompanied with an inflation increase, which is logical and what is also the environment that we're looking at, means that you're moving across the diagonal in that table and the portfolio value remains the same pretty much. Of course, if you have 100 basis points increase in the discount rate without any inflationary recognition, then you reduce the value of the portfolio by, I guess, you know, a quarter or something like that. But it's not a wipe out. Yeah. You wanna add something to that, Petter?
No, I think it's important that you take into account that the contracts that we have originated have an inflation adjustment and that should also weigh in when we then eventually sell off portfolios.
All right. Is the increasing leasing share of sales in Q1 related to weak sales in Italy, or do you see an increase in the leasing share across your other markets? I think it's both. Italy is a substantial or was in 2022 a substantial market for us. And it's a no leasing market, so when they're less present, that lifts the average. I think the overall direction of travel that you've seen through last year is that leasing is more popular. It's a concept that's winning ground in the U.S., it's winning ground in Europe, and it's also a product that is well suited for the type of economic environment that consumers are facing. We're kind of happy about that.
Can you give some color on the sales development through the quarter? What does the profile look like per month? Is the March run rate higher or lower than the first quarter in total? It sounds like someone wants to log into our business intelligence platform there. I think we can say that 2022 was one type of market until September and then another one after September. For the first part of 2022, this was a market that was in energy shock. Consumer electricity prices were sky high, but so were also the solar cost. In Q4, solar cost remained high, but the consumer electricity price came down somewhat. I think that's behind the slump in sales that was seen from October onwards.
When we now are more upbeat and are more recognizing the type of trend that has been driving solar over the last decade and will continue to do that in the decade ahead, is because, you know, we believe there's a change in gears here that's back to a good normal, I'd say. March is I think obviously stronger than the Q1 average. The question is what can you read into that? I think we were also saying that there is gonna be patchiness and uncertainty and we want to be positioned when this market rebounds. All right. When can we expect to see a sale of the NOK/SEK portfolio, and how large do you expect the NOK/SEK portfolio to be when sold?
I'll leave that to you, Mr. CFO.
I think what we have said is that we have initiated the process as we communicated in Q4. I don't think it's the right time to go into details around the size, or when they expect it to be sold.
For which markets do you see the highest possibility to increase your lifetime value towards, No, that's a loan-to-value, of course.
Loan-to-value.
Of course, I was being a tech guy and not a finance guy there for a little while. Sorry. Loan-to-value towards 75%. I'll leave that to you.
No. We are in discussion with our banks about putting the accordion into action. In that discussion for us, of course, leverage ratio is an important discussion point. Today, we have 75% in Norway, Sweden, and Germany. Of course, it would be sensible that the markets that look similar to Germany would then have the same leverage ratio as Norway, Sweden, and Germany. Overall, it's also important to take into account that the business case for solar consumers get stronger the longer south you get. There should not be an underlying difference between a Spanish and a Norwegian customer in our point of view.
Do you see sales picking up pace going forward? I think I've largely answered that question. We are very confident about the trends in this market. So the question is, how do you capture them? How fast and to what extent do all markets, you know, fire at the same time? That's the question going forward. What share of your subscription portfolio is composed of customers from Norway and Sweden? Do you want to have a go at that one, Petter?
I think we have not communicated how large the share is. If you look in our previous communication, you will get some indication by volume sold per quarter.
One operational question here: How do you work to attract high-quality installers compared to other players, and how do you work to improve your installation waiting time? First, the installation onboarding process starts with taking as raw material the quality installers that are typically licensed electricians or solar installer license holders in a country. That's a good raw list. It means that you're not dealing with amateurs. We start nurturing that list with emails and phone calls. We attend trade fairs, et cetera. You bring these people in as you would on a B2B sale, you tell them how they can benefit from being on a platform in which we increase the utilization of their teams, where they can get business without having to do sales and marketing.
Of course, their cost then needs to adjust to that, and they get feedback from the platform, and that's attractive for these guys. We've been able to increase in the installer count even in a market that was quite constrained by labor in 2022. An influx of more companies from electricians, roofers, carpenters into the industry, coupled with these companies growing their workforces, has meant that the capacity has grown both for the industry as a whole and for us. I think a proof in our ability to build capacity is the downward trend on labor costs that we're seeing in the beginning of the year, which is indicative of capacity and room for growth in the installer network that we're happy about.
Once we have these new teams on board, we want them to be able to grow a business on the platform like restaurants with on Delivery Hero or a driver with on Uber. You want these guys to make a good living and to put a lot of their time and effort into this. Their quality, at the end of the day, is our product quality. Our account management teams work constantly with these guys. With regards to improving our installation waiting time, as we demoed today, you can see the installers get software assistance as projects flow into their interface. They can see this guy called Petter that's bought some solar panels for his house outside of Oslo.
You now need to input your installation date and which teams are gonna work on it, and they have progress reporting and to-do lists that appear in the software so that they get herded towards completing installations. That's important and it's something that, you know, the software allows us to keep control over this quite large and dispersed group of companies across Europe. Your current sales run rate is at 8,000 versus your previously communicated ambition of 20,000 units a year. What steps are needed to reach that? Well, we've expanded to six new markets compared to the seven we were in for most of last year.
So that allows us to be exposed to more consumers, more different combinations of how markets are settling into their 2020s growth paths. Of course, we're set up to grow in every single market. Our operation is really built to be able to grow at multiple locations at the same time without busting at the seams. I think the installation pace we've had in this quarter shows that we're ready to grow, we're able to grow. It's really about the consumers wanting solar, us finding them online, us working with good partners like Castorama that was demoed today, and several other good partners that we have across Europe.
Converting these people through a convincing way of saying, "It's affordable, it's easy to use, and it's not gonna be a big hassle for you. You'll get lower electricity bills in a short while." All right. I think we have three questions left here, we'll close off with these ones. Is EUR NOK at 12 and USD NOK at 11 a long-term problem? Petter, you can have that one.
Of course, Otovo is increasingly a business that is more. If you look at our markets, they increasingly consists of euro-denominated countries, and they weigh a larger and larger share of the portfolio. Of course, a euro NOK of 12 will put some pressure on kind of sales volumes in the Norwegian market as that would lead to higher prices in Norway. We also have a large share of our costs in NOK that would, of course, weigh relatively less. I think, I know, for us this is more of a sales pace in Norway type problem more than a structural problem.
I think we're setting ourselves up operationally so as to be able to move resources around both marketing and personnel, in a way that can even out fluctuations in individual markets and currencies. Why did Spain lose its EBITDA positive mark in Q1, ref slide 10? Do you still expect six markets to be EBITDA positive by first half 2023?
I think this refers to Spain not being profitable on IFRS. Of course, what we see is that for Spain, subscriptions is a important value driver. And that, of course then has an impact on being profitable from a kind of EBITDA-generated point of view more than a IFRS point of view.
It's worthwhile saying that Spain didn't lose any status here. They were EBITDA positive on EBITDA-generated level. That means recognizing the value creation from subscriptions in Q4. They were also that status in Q1, so not losing ground there in Q1. Do you still expect six markets to be EBITDA positive by the end of the first half? To us, I think we would have said so if we believed that we needed to adjust that. All right. The question, how many subscribers do you have per Q1? I think the number there is about 3,500. Yeah.
Which is a healthy growth from the roughly 2,007 that we had in the Q4.
Right. Thank you for, listening in, tuning in, and looking forward to meeting some of you in the one-on-ones, later today and tomorrow. Thank you. Bye-bye.