Good morning. Welcome, and thank you for tuning in to Otovo's Third Quarter Results. My name is Andreas Thorsheim, and I'm Founder and CEO of the company. I'll be taking you through the business update, the latest company development, before my colleague, CFO Petter Ulset, comes on stage to take us through the recent portfolio monetization and our financial results. After that, I'll return for the summary and outlook, and then we'll do a Q&A session, and you're all encouraged to input your questions, and we'll do a selection of those in the Q&A session at the end. Okay, so let's have a look at this quarter. It's the quarter in which we have the highest margins in Otovo history. We're lifting our EBITDA generated by 13 percentage points year-over-year.
In terms of installations, we did 2,629. That's up 33%, from the same period last year. In terms of the revenue generated from those projects, it's up 67%, coming in at NOK 392 million. The gross profit generated is record high at NOK 103 million, or 26%. That's up sequentially, obviously, but also up four percentage point from 22% in the same period last year, which allowed us to cut our losses in half, as measured by EBITDA generated. Now to the sales numbers. Solar is on a growing trend, thanks to its improving business case, and we've seen that over a long, long time.
In 2021 and 2022, that trend line got lifted upwards by an energy crisis that put a lot more of urgency into consumers' minds about making the shift to clean and affordable energy. But that led to a certain overheating that sucked demand out of 2023 and into 2022, and that means we are having a bit of a hangover this year that we're aching to end. What can move that hangover out and better times in? Well, let's have a look at that. First of all, Otovo is built for more than we're doing right now.
We've entered six new markets in the last 12 months, and they are, of course, setting records on the regular, and we're taking market share in Europe by having entered these markets, and as they are coming into their second year, we expect them to keep growing. So that's pushing us from one side. And then we have the older markets, Scandinavian markets exposed to lower power prices, Southern European markets, lower gas prices, and that's where we're experiencing a slowdown compared to the same period last year. But we think very small changes in markets can trigger a good bounce back, and we have a machine that can do a lot more than we're doing right now.
If all markets were at their best quarter, we'd be selling 4,000 systems per quarter, and I think that illustrates that these aren't fantasy numbers for us. We can, we can get there, and we only need a little bit of help to bounce back strongly. What can drive that type of bounce back? Well, solar markets are influenced by three factors: the electricity and energy price, the subsidy levels, and the cost of solar. Now, if we start by looking at the electricity or energy price, that represents the alternative to solar energy, and that's getting more expensive when we look into next year. This summer, power prices were negative in Scandinavia.
This summer, gas prices for consumers were at record lows in Southern Europe, but that trend is now shifting, and as late as last week, the Energy Agency of Norway gave their long-term outlook, pointing towards increases in the energy prices in the Nordics over the next few years. Also, the French government has adjusted its price levels up by 10% in August and is indicating similar increases in February of last of next year. And then some governments are adding subsidies, the German government, notably adding a subsidy scheme that rewards people who get at once EV chargers, batteries, and solar panels. And the Austrian government last week removed value-added tax on solar goods, which should also stimulate that market as we go into next, next year.
So on the market side, the job is being done. What about the cost side? Well, I can say that the solar industry is also doing its part on getting us back on trend. On the hardware side, costs have been coming down, and the Otovo platform is exceptionally good at teasing out these cost improvements and putting on display the lower cost of panels and inverters that we're seeing across Europe. We're now at nominally lower levels than when the energy crisis started, and we think hardware costs will keep coming down in the quarter and into next year. The same is valid for the installer cost. Installers charged high prices during the crisis of last year, but those margins and labor costs are coming down, and I think we will also see record low prices there during this winter.
And what that means is that consumers who get solar panels this autumn and winter will get the cheapest panels ever put up in, in Europe. Solar is doing its job to get the cost down, and so to me, I haven't lost faith in solar. It's really about when this market bounces back, not weather. And I think all the elements are now coming together for a solid bounce-back in European markets. Now, let's turn to the quality metrics of Otovo. On the battery attachment rate, we're rather stable at 25%. That may increase thanks to a beneficial country mix next year, and also by an improving trend on batteries.
The ticket size is somewhat down, driven by currency and the drop in solar cost. We will be fighting that by adding more equipment and selling more to the consumers as we benefit from a lower price per panel and lower installation side prices. The subscription share is rather flat on installed levels. I'll get back to the sold levels in a slide or two. And then the gross margin generated a record high coming in at 26%. That's up six percentage points from a trough in Q4 2022. So proud about that, and also confident in our ability to keep expanding the gross margin in quarters ahead as Otovo benefits from this deflationary trend on the cost side.
This is an environment that suits our gross margins well. We're also having less of a watering down effect from new markets that should allow us to boost this number further, going into 2024. Let's look at the subscription portfolio. These are the numbers as they stood on the thirtieth of September. That's days before we announced the sale of the Norwegian and Swedish-denominated portfolio to Swiss Life. Now, if we look at how we've been adding contracts to the portfolio, it's down from 38% in Q2 2023 to 27% this quarter.
Most of that drop can be explained by the fact that Portugal and Polish customers made up less of the mix as the subsidy schemes in those countries for this quarter did not include subscriptions, and that watered down the total numbers. Does that mean that we will remain at this number going forward? No, I don't think so. We are confident in our ability to keep expanding the subscription percentage. Why? Because this is a product that is trending upwards in this type of high-cost, high-interest rate environment. We see that this is a product that is going to be cyclically in demand, and we're able to expand our subscription share in markets over time.
So we're confident in having our 50% target for the end of next year and crossing the 40% line by Q1 of 2024. With regards to the portfolio size, it came in at NOK 824 million, as measured by accumulated contracted subscription revenue, and that's up 260% from the same period last year. We can also look at the annual recurring revenue that is up by similar percentage points to NOK 56 million. Now, let's turn to profitability. We have the same colors and the same countries in the green this quarter as we did in Q2. Mature markets have sufficient volumes and standing time in the markets to turn to profitability.
Customer acquisition cost is lower and volumes are higher, and so we get these markets to profitability. That's the case for Norway, Sweden, Spain, Poland, and Italy this quarter. For France and newer markets, we still need more volumes in order to reach profitability. The break-even points are at different places for these different markets, depending on the ticket size, mostly. We keep improving gross margins and volumes in these markets in order to push them towards the green. Now, we also believe we can improve cost on the group level. We've taken several measures already to streamline the cost base and boost operational efficiency. We've identified significant potential for further cost adjustments, like we did in Q2, and we will be keep.
We will keep working on this during Q4 and into next year, so we can have lower break-even points for all markets. We can now dive into the latest company development. In Q1, we communicated several operational priorities for this group was a task list for me and Petter, the CFO. I'm proud to say that in terms of execution, all priorities are progressing according to plan. We said we would reduce the project cost on the marketplace, meaning that we would be teasing out lower cost per watt from the installer base. We're getting help from lower hardware prices, and we're getting the installers to adjust their bids on the platform down.
Month by month, week by week, day by day, the cost per watt is at an all-time low, and I think I can be confident in saying it will keep coming down in Q4 and into next year. We said we'd be doing more software automation. We've been automating our installer process to reduce discrepancies in margins. We've done that. We're working on the consumer's interface so that they can do more of the sizing, adapting, selection of systems themselves. That allows us to use less resources in the sales process. We said we would increase operational leverage. Now, one in five employees is in the Madrid shared service hub, where we have our accounting, our marketing, and our operation centers. And then we said we'd be adding hardware.
We've launched EV chargers in Germany, and we're starting to pilot heat pumps in Italy, so we can also put a check mark on adding hardware that allows us to boost the ticket size and the absolute value per customer. On the portfolio side, we said we would increase leverage and size up the debt facility. We've expanded the debt facility in Q3, and the debt ratio has been taken up in the quarter. We said we would sell our subscription portfolio, that came in on October 6th. The Norwegian and Swedish-denominated currencies were sold to Swiss Life Asset Managers, proving the value creation from assets put into the subscription SPVs. So I'm proud of the Otovo team.
This has been a year in which we've executed really, really well, and there's still three months more to go to improve the score on all these matters. Let's zoom in on the shared service center in Madrid, where the cost of employment is much lower than the average for Otovo. That's not unnatural when you think of cities like Zurich, London, Amsterdam, Oslo, Stockholm, where costs are significantly higher. But we also see that we're getting benefits from pooling teams together, creating resource efficiencies. As we have bigger teams that can cover for each other, we can get efficiencies out from having more people in the same place.
So in order to build a shared service center in Madrid, we cut 50 full-time equivalents in established markets and avoided roughly 50 hires in newer markets. Madrid is a good place for us. It's an international talent hub, where we have various speakers of most European languages and also experts needed for the various expert tasks that we require in this group. And putting these things together, we've created a cheaper, more pooled, and flexible cost structure that allows us to move the marketing budget between markets to where we have the best ROI, and then have the operational structure follow that. I think this is the best way to be robust in the face of the solar coaster that this business is.
We've also been expanding the product offering, and this is a big choice for us. It's something where we see that we can leverage the installer ecosystem that we have from the north of Norway to the south of Spain, where we have installers that are outputting the equipment that people need in order to make their homes greener, and to cut their electricity bills. We started with EV charger sales in Germany, just in time to allow our customers to benefit from the new subsidy over there, where you can get up to EUR 10,200 if you get solar panels, batteries, and EV chargers at once, and that package is now available on Otovo.de.
We expect that category to be growing and the German government to be inspiring similar subsidy programs across Europe. In Italy, we launched a heat pump pilot. Been working on that during the summer, and we're now in the second phase of that pilot in order to gain learnings from how our installer ecosystem adapts to having two different types of hardware that they can install on the platform, be bidding for jobs, et cetera. Now, this excites me quite a lot because these technologies are only in the beginning. Both EV chargers and heat pumps are expected to deliver high growth, and they represent a vast potential across European markets.
Different markets have different penetrations of these technologies, but put together, the European heat pump market is expected to go 6x by 2030. The EV charger market 85x by 2030. So it's really only the beginning. Different technologies have different penetrations across markets. The Netherlands are ahead in solar. The Nordics are ahead in heat pumps and electric vehicles. No one is ahead in batteries. It's still early days. These technologies are kind of four horsemen of the fossil apocalypse. These are the hardware expansions that are expected to change people's homes. The battery stores energy, the solar panels make energy, the EV charger allows you to move your fossil car to electric, and the heat pump saves electricity.
Those four companion products go together, and they will drive our ticket size positively in years ahead. Experience from our Italy heat pump shows that we can do 70% more revenue by adding a battery and 180% more revenue by adding a battery and heat pumps. Germany's entry into the EV chargers means that we go 60% up by adding a battery and 90% up by adding battery and EV charger, so this is very promising. I'll now leave the floor to Petter Ulset to talk about the proud moment in our recent history, and that's the monetization of our leasing portfolio together with Swiss Life.
Thank you, Andreas. In October, we announced our transaction with Swiss Life, where we sold all our subscription assets in Norway and Sweden from 2020 to 2024. As we see it, Swiss Life is a very reputable buyer. We have done a thorough diligence process on Otovo and our subscription process. This improves our cash position and our cash-generating profile going forward, and it also proves and validates our business model. The transaction is split in two parts. We have our first transaction that is closing in Q4. Here we will sell the portfolios that have been generated between 2020 and August 2023. That's roughly 1,600 contracts. Then we will also have a Continuous Sale Agreement, which will be from the period from September to the period of December 2024.
This will be all new contracts originated by Otovo in this timeframe, and we expect to end at roughly 3,000-3,500 units. The transaction, if we account for Otovo's APM of 2% inflation, gives a post-tax discount rate of 5.1% and a pre-tax discount rate of 6.4%. This is a NOK 700 million transaction. As I mentioned, there is a first close with all assets up till August, and then a continuous sales agreement for additional assets, reaching our total target ticket size of NOK 600 million. The purchase price for the first batch is NOK 230 million, and there is an additional NOK 470 million from the continuous sale agreement, in total, a NOK 700 million transaction.
As part of the transaction, we will repay roughly NOK 153 million Norwegian kroner, which results in a cash release at NOK 77 million at the time of the agreement. We have estimated that the accounting gain from the transaction will be around NOK 60 million-NOK 70 million at the time of the agreement. When we announce the transaction initially, we also stated that funds would be withheld of NOK 13.6 million, related to the financial license requirement for EDEA AS. At the same day as we announced the transaction, the Norwegian FSA concluded that our business, subscription business in Norway does not require a financial license, and as such, there will be no funds withheld as part of the transaction. However, NOK 7.3 million will be put into an escrow account related to certain indemnities in the SPA.
We will continue to operate the assets on behalf of Swiss Life Asset Managers through a service and maintenance agreement and also a customer service agreement. So the end customers in Norway and Sweden will not in any way notice this change of ownership. As we see it, this transaction is a natural part of what we've been doing over the last couple of years. In 2020, we put in place a debt facility with Nordea at a 50% leverage ratio. In 2021, we increased that facility to NOK 300 million. In January 2023, we announced a new debt facility of EUR 50 million with DNB and SR Bank at 67% leverage. In August 2023, we increased the facility to EUR 100 million, and we also increased the leverage to 70%.
Then in October, we have done the first portfolio sale, releasing a significant amount of cash, which is sufficient to finance additional years of CapEx. Then in 2024, we also have the Continuous Sale Agreement with Swiss Life, and we will also explore a sale of the euro-denominated assets. So for us, this really proves the business model. We have demonstrated the ability to both structure, originate, finance, and monetize subscription assets. We are the only company with a Pan-European franchise who can do the same with solar subscriptions as have been done in the U.S. And our setup is validated by a very reputable counterparty, following what I would say is a very thorough transaction and diligence process. Then going forward, we will continue to sell NOK and SEK-denominated assets to Swiss Life as they originated, and as, like, agreed terms.
That will improve the cash flow profile of the business. Then secondly, we will keep building the euro-denominated assets until they reach a sufficient size for an optimal monetization. In this, we also have strategic flexibility. I think this proves that we can do additional M&A to add on additional portfolios, and we also have the potential to add additional hardware types. We today talk about our pilot with heat pumps in Italy, where we have, of course, seen other companies financing heat pumps on subscription models in Europe. Then, as I mentioned, we are the only company with the infrastructure in place to monetize subscription portfolios across Europe. We have built the scale and the business model required. We have presence in all large European markets. We have thousands of completed installations.
We have the operational setup that is required to handle growth, and we have a very scalable and efficient model, which is also now further scalable through our shared service center in Madrid. We have put the legal and administrative infrastructure in place. We have compliant customer contracts. We have the payment infrastructure in place across markets. We can do the credit checking. We have a sound underwriting framework, and we also have a validated dunning and default handling process. We have also proven that we have the financial capabilities. We have been able to finance this on increasingly better debt terms. We have strong unit economics and IRRs, and we have access to capital to finance further growth. Then we also have the track record.
We have now shown that we can sell a subscription portfolio, and we've passed due diligence and scrutiny of what I believe is a very reputable asset manager. If you were to start it from scratch, it would be a long journey, and I would say it would take you at least two years if you had the established footprint, and even longer if you were to start from scratch. As I mentioned, we have optionality in terms of the European portfolio that would release additional capital back to Otovo. We've done the groundwork. We have a current portfolio of around 4,000 active solar PV projects. We have reduced risk of those due to the diversification across seven European markets. If you compare it to the Scandinavian portfolios, these projects are, of course, further to the south.
That means better solar conditions in, in central and southern Europe. That means a better business case for the consumer, higher implied yields, and I would also claim lower default risk. We have received inbound interest for this portfolio from, from several parties. It's also part of the transaction that we did with Swiss Life, where they have expressed interest for this portfolio. I would expect lower discount rates from the sale of the euro-denominated assets, as that is a more sought-after currency than NOK and SEK. We, of course, have built up learning, both in terms of how to run a process, but also how to set up the portfolio as part of the transaction we have done with Swiss Life, and we will, of course, leverage that learning, when we now kind of further optimize the euro-denominated assets.
We announced in our Q1 results that we would initiate a sale process. We announced in October that we had signed an agreement with Swiss Life. Of course, the timeline was a bit stretched out due to the FSA process in Norway. So I would say it's a process that would likely take one to two quarters from the time that it will be initiated. Turning over to our financial results. I will start with our reported financials. If you look at our reported financials, we had total operating income of NOK 248 million in the third quarter. That is an increase of roughly NOK 70 million from the third quarter of last year.
We had COGS of NOK 186 million, which is a slightly lower increase on relative terms, leading to an improved gross margin, which was reported at 21%. We also have OpEx net of D&A, which is NOK 34.3 million, up year-over-year, but reduced NOK 12 million quarter-over-quarter, leading to an improvement in EBITDA of seven percentage points on reported numbers. If you go below the EBITDA, you will see that there is a significant negative currency effect in Q3 of NOK 17 million. This is due to investments that we have in our subsidiaries. That is partly done through internal loans that are denominated in euros. Most subsidiaries have euros as the functional currency, while the parent company in Norway has NOK as functional currency and has to revalue these internal loans.
As a consequence of the revaluation in the parent co, we will have a fluctuation in profit before tax with changes in the prevailing exchange rate. Currency fluctuations have, as we all have noticed, been notably larger in 2023 than in 2022. While the net effect, if you look over Q1 to Q3, is positive, we will consider whether to convert part of these internal loans to equity in order to reduce these fluctuations in the net profit results. Turning over to the balance sheet, we saw that inventory has been reduced to NOK 1.3 million over our total asset base of more than NOK 1 billion. I would say that that protects us quite well through the decline that we have seen in the cost of solar equipment over this year.
So that is a strength that we have in the business model that we don't carry inventory. We see that other current assets have been reduced by NOK 14 million. That is primarily due to the balance of Italian tax credits being reduced in the quarter. That is partly netted by an increase in VAT in select markets. And we have not sold the entire portfolio of tax credits. There will be part of the portfolio that will be sold in Q4. The delay in selling tax credits is due to documentation requirements from customers. I would also note your attention to the assets held for sale, which was NOK 222.5 million net.
That includes the consideration from the EDEA acquisition, the VAT receivable for EDEA AB and EDEA AS, internal profits and CapEx for the month of November. The estimated gain from the transaction is, as I mentioned earlier, NOK 60 million-NOK 70 million at the agreement date. We also ended the quarter with a cash position of NOK 237 million, which is a reduction of NOK 76 million from the previous quarter, and I will get back to that later. As we have communicated earlier, as we see it, Otovo generates shareholder value in two ways. One, we have a marketplace. That marketplace is active in 13 European markets. It sells solar batteries, now heat pumps and EV chargers, and we charge a markup on the installer COGS.
The value drivers is gross profit and our ability to maintain a high capital efficiency. Our current focus is to bring the new markets to profitability, to continue to improve unit economics, and growing installation volumes to show the operational leverage that we see in the marketplace business. Then we also have a subscription portfolio. Here we build cash flow generating customer contracts that are great financial assets. Value drivers is the subscription SPV CapEx, and the return we have on that capital. The current focus after we have kind of proven that we can sell the NOK assets to SLAM is to keep building the euro-denominated portfolio, and of course, to implement the learnings that we have from the transaction process.
We get to these kind of two sources of value creation by investing in OpEx. Here, we make investments over the P&L to enable the company to scale. Value drivers are, of course, operational leverage and unit costs. As we have shown, we have been able to decrease that by leveraging our Pan-European model and putting more resources into our shared service center in Madrid. That both provides a lower unit cost, but also a greater operational efficiency. We also make investments in our balance sheet. Here, we continue to optimize the cash and portfolio value.
We have shown that we could sell the portfolio at an attractive cost of capital, and we will keep developing the balance sheet, and we'd expect that the de-risking that we saw of the subscription assets should help us improve debt and leverage terms over time. Zooming in on the marketplace, the marketplace has essentially two customers, two sets of customers. One is our external customers, where we sell projects directly. That is recorded for the marketplace as direct purchase revenue. Then we also sell projects to our subscription SPV that is recorded as SPV CapEx. And for the marketplace, these are two, both of them, sources of value creation.
If you then look at the marketplace financials, we had total revenues of NOK 330 million, which is NOK 235 million from the external customers, and then NOK 94 million from the subscription SPV. Towards those NOK 330 million in revenues, we have NOK 279 million in cost of goods sold, leading us to a gross profit of NOK 51 million, where we have local OpEx of NOK 103 million, which brings us to a negative marketplace EBITDA of NOK 51 million. Please keep in mind that we're currently selling to the subscription SPV at a discount. If we were to eliminate that discount, the marketplace would be close to profitability. Then if you turn over to the subscription portfolio, we deployed NOK 94 million of CapEx in the third quarter.
Towards that CapEx, we had an IRR of 13.5%. That is all-time high for the company. And if you turn over to the right-hand side of the page, we see that on different discount rates and on different inflation assumptions, if you move along the diagonal, the value of the contracted subscription revenue and the total accumulated contracted subscription revenues are protected. Across our market, the average inflation adjustment in the third quarter was 7.5%. As we have discussed before, the cash flows from for consumers would then be lifted with this 7.5% on average, and we would have that increase for the remaining part of the customer lifetime.
We see this inflation protection to be a valuable component of the subscription business. Please keep in mind that this adjustment can only be done upward and not downward. When we zoom in on our OpEx, we had OpEx in the third quarter of NOK 139 million. That is split with NOK 103 million for our local markets, and then NOK 36 million for the group. Both components are down, most notably in the local OpEx segment. If you look at the right-hand side, you see that we now have more of our employees in the shared service center.
And we also see that, like, the total impact of the shared service center is then a reduction in payroll, as measured with pay per average FTE, and as Andreas mentioned earlier, also is noticeable as a lower FTE per project number. To recap our financial framework to maximize shareholder value, we have, in the third quarter, improved our IFRS EBITDA with seven percentage points year-over-year. We are continuing to maintain a quite targeted capital discipline, where we're making disciplined software investments and VC remains negative. We continue to optimize the balance sheet, where we have increased the leverage on our facility, and we have also increased the size of the available facility from NOK 50 million-NOK 100 million.
We have also done a portfolio sale, where we have sold NOK and SEK to Swiss Life Asset Managers. That will allow us to then reinvest and to further, improve shareholder value. Then ending with the cash position of for the third quarter. We started the quarter with NOK 313 million of cash. Then operational cash flow, excluding financing, was negative NOK 61 million, which was impacted by the sale of the tax credit with a positive NOK 36 million. Working capital was contributing with a negative NOK 50 million due to lower installation volumes, and non-trade working capital contributed with NOK 4 million.
Then investments in the SPV, less new debt and interest, was a negative NOK 15 million, where we invested NOK 94 million in subscription assets while drawing on NOK 77 million in new debt, and financing net of interest paid in the quarter. Then other items was flat, leading to a cash position at the end of the quarter of NOK 237 million. Then I turn over to Andreas for the summary and outlook.
Thank you, Petter. It's time to start wrapping things up here. Here at Otovo, we're working towards profitability, and we believe that's achievable not too far into the future. Through a combination of several levers that we are working on. Obviously, sales volume growth, operational cost improvements, and the monetization of our euro-denominated assets, the way we did with the Norwegian and Swedish assets earlier, this autumn. To fund this expected growth, we have retained a set of advisors to help assist us on considering a potential share issue to raise capital. As usual, the company's largest shareholders have expressed strong interest in supporting a potential share issue. So where does that leave us?
This is a quarter where we have our highest margin on record, and we can assess that we have built a company that is ready for a market bounce back. This quarter shows strong annual growth in terms of installations, coming in at 2,629, up 33% from the same period last year. Unit sales is at 2,073. That's down 24%. IFRS revenue, IFRS reported margin, and the gross margin generated are all up versus last year, and the gross margin generated is, as said, record high, up four percentage points versus last year. This autumn, we're proving that portfolios can turn to cash. We've completed the first of its kind solar portfolio sale in Europe with Swiss Life Asset Managers as our counterparty.
We keep building new portfolios and have deployed roughly NOK 100 million in subscription SPV CapEx, and that's double what we did last year. We also see a significant increase in IRR coming in at record levels. We're working on operational measures, and that can be seen in the increased share of projects that gets handled from our operation center in Madrid. This quarter, roughly one in four projects was installed through the operation center in Madrid, and that share will keep growing throughout the late autumn and into the winter. One in five employees in Otovo are now situated in the shared service center in Madrid.
We're also working on ways to expand the value per customer, and this quarter, we're adding new hardware that will boost the ticket sales. Case in point, in Germany, we've added EV chargers for our customers to be able to benefit from the generous subsidy that was just launched in the German market. And we're piloting heat pump sales that will boost ticket size in Italy, and hopefully start rolling that out quite soon in other European markets. We're progressing towards profitability, and Otovo will consider a potential share issue to finance that growth. And with that wrap-up, we turn to the Q&A session, and I believe we've already started receiving questions here.
Okay, first question: Can you give more color on which markets are slow and which are performing well on sales? Okay, so I think there's three things to be said. First, relating to the prices of electricity and energy more generally, and in Q2 and Q3, we saw very low electricity prices across Europe, but particularly in Northern Europe. We saw headlines in Scandinavia with negative power prices, and it's not exactly the type of news that pushes consumers towards making a decision on getting insulation, heat pumps or solar panels. Also in Southern Europe, that relies more on the gas market. Gas prices were very low between May and August, and that obviously influences the bills in the third quarter. So, a bit the same picture there.
Now, both those trends are turning now, and we see energy markets coming up. But during Q3, this has probably influenced the sales in most of the markets. Second, element is subsidies, and the announcement of a subsidy that isn't valid yet, usually depresses sales. So in September, early September, the German government announced a generous subsidy to be launched in the final days of the quarter, and that takes out volumes for September that we expect will be pushed into Q4 and Q1. But it illustrates that, you know, good news sometimes takes out a bit of demand in the short term before people can benefit from better numbers and better support schemes.
And then it's a third story, and that is places where things are going well. Portugal has been a success story for us. It's first in line among the new markets in its likelihood of achieving profitability, I do believe, but the others are not that far behind. We also see the French market that didn't have the same overheating and positive situation in 2022, with their politically set prices, now following up with price adjustments done both in February and recently, August 1st, where the prices to French consumers were adjusted upward by 10% on August 1st, and we believe they have one more of those in store, as I said.
So that's also turning into be a rather market with some momentum. And then finally, I'd like to say Italy. Italy got knocked on the head with subsidy changes in February, and as expected, that froze the Italian consumer. They waited their decisions out a bit while gauging what type of a subsidy scheme would come out as tax credits changed. And that has cooled that market down for about six months, but we're seeing a pickup now towards the end of Q3, and that is a positive sign.
It means that the old rule of thumb, that subsidy changes usually take six months to be absorbed, and then we get back to the trend line, seems to be valid also in Italy. So to me, that's a positive point. So hope that gave some color on which markets are hot and not. Second question: You said that the largest shareholders are supportive. Does this include Axel Johnson? I can say that Axel Johnson has been supportive in the past. We experienced strong support from them also now. So it's a yes on that. And there are also strong supporters in the rest of the cap table, as we've been used to.
So that's a big positive for us as we move forward. Why do you choose to raise now? Okay. I think the way to look at that is that we have several levers at our disposal in order to reach profitability. First, and most attractive, is obviously sales volume growth. This business has been built to do more sales than we're doing now. We can scale up very fast as we get only small signals from the market, so sales volume growth is number one. Number two is operational improvements. We've been slicing costs and moving our operational cost base to lower cost locations over the last year. We still have work to do there, and we'll keep doing that. That helps. Then there's portfolio sales.
We've sold the Norwegian, Swedish-denominated assets, and that cash will come in in Q4. We believe we can also move the European assets. So that's a fourth, sorry, a third lever. And then we have the cash that we already have, preserving that, working on working capital. And then today, we introduced the possibility of a fifth lever in raising capital. We want to have that at our disposal so as to to make the right decisions going forward. Next question: Why not just sell the euro portfolio to raise cash? I think I'll pass that one to you, Petter.
Thanks. We showed in Q3 that we can sell portfolios through the sale to Swiss Life. What we also said is that we have high belief in our Euro portfolio. We will continue to grow it, optimize it, and then we'll launch a sales process at the right point of time. We believe that the sales process will take roughly one to two quarters.
An analyst report from DNB says you need to raise NOK 1.5 billion. How much do you intend to raise? Not, not 1.5. I'll let you answer that one, Petter.
I think that summarized the burn until 2030, and we believe in a growing solar market until 2030, so that's the first lever. Then I think Andreas has pointed to several other levers that we can take to optimize our cash flow, including future sale of portfolios. If you include those in the estimates, you should shave off more than NOK 1 billion.
Okay. Next question: In the P&L, you have NOK 76 million in payroll expenses. Are all of these related to overhead and not sales? Can we assume that your, your run rate overhead costs are now at NOK 300 million per year?
It's correct that we have NOK 76 million in payroll in the P&L. However, we also stated that our local OpEx for salaries is roughly NOK 50 million. That leaves roughly NOK 25 million for overhead salaries. So I would say it's closer to NOK 100 million on a run rate basis. We're quite lean. We fly coach, and we eat stale bread.
Good. Do you expect the investment in nuclear energy in Europe to affect the solar value proposition? I think a short answer is no. What matters to the European consumer is the consumer electricity price. That is a function of the grid cost that's increasing in most of Europe, giving a groundswell to the business case, to electricity taxation, that's also trending upwards in most of Europe, and then the wholesale electricity price, to which consumers are exposed with sort of varying volatility in Europe. But in general, that's a, you know, that's the only part that gets influenced by the build-out of nuclear, if it happens, and I'm not sure the speed of nuclear rollout is relevant to our business case for the next three, four years.
So I think the consumer is exposed to a whole lot of other things, and that the movement there is in our favor, as has been supported by the outlooks from several of the energy agencies of Europe looking at the 2024, 2025, 2026 markets, where they're seeing a rise in electricity costs going forward. So that helps on the one side of the business case for the consumers. The other is that solar is getting super cheap. We're helped by capacity build-outs on the inverter market, on the module/panel manufacturing market.
And the equipment is dirt cheap, and that's the case we built this company on, the fact that equipment prices keep coming down, down, down, down, and the remaining cost is a last-mile cost that is well addressed by an online marketplace. And we're good at teasing out these cost reductions and efficiencies ahead of everyone else. So that's the long answer. We think solar is going to be very robust, and I think Otovo is the leading model in order to take market share in the European residential market. With that, it seems that we are out of questions, so I'd say no further questions. Thank you for attending.