Good morning, everyone, and thanks for joining this presentation of the first half results of 2020 for Otovo. We are here at the Arctic Securities office in Oslo, and I'm going to be joined by Chief Financial Officer, Cecilie Weltz, and our General Manager for Spain, Íñigo Amoribieta. Myself, Andreas Thorsheim, will do the first part of the presentation. With regards to questions, you may input them in the chat, and we'll answer at the end of the call. We'll do the entire presentation without questions on the slides. We do that at the end. We're welcoming your questions and looking forward to it. Yes. The presenters are myself, Cecilie, and Íñigo. We will today talk about Otovo, and for those who are not entirely familiar with us, we are a marketplace for energy installations, and our aim is to build the European number one in residential solar energy.
Today, we will give you a business update, the financial results for the first half of the year, an update on the leasing launch in Spain, and then we'll summarize at the end and open for questions. As every business in the world, I guess, we've been impacted by the COVID pandemic, which has resulted in a short-term drop in business. In the long term, we see a very positive outlook for solar energy, photovoltaics, and batteries. I'll give you a bit of a zoom in on how COVID pandemic has impacted us. In the first quarter, we saw the first signs of disruption with China being hit by the virus, local lockdowns in China that echoed through the value chains internationally and created a shortage of panels in Europe.
At the same time, currency depreciated in Scandinavia, and those things conflated to bring about an increase in the price of panels. That situation has since returned to normal, and the slack is being worked on, and prices are back down on their downward trend of about 10% decrease in hardware cost per year. That has been the trend the last 30 years, 40 years. In Q2, European economies entered a lockdown, and it resulted in a drop in sales as consumers reduced their CapEx and discretionary spending on financially heavy items. That has also returned to normal. We're seeing sales numbers in all countries returning to pre-COVID levels or above.
The situation where people are maybe a bit more concerned about job security and their financial position, we think also strengthens the leasing product that takes down the entry-level barriers for solar, and we'll get back to the details on that when Íñigo presents the launch in Spain. Into Q3, installations will slow down. Installations typically take three months from interest to installation, and that means that in Q3, we will be installing sales done in Q2. We're expecting also Q3 to be on the weak side as the drop in sales in Q2 translate to a drop in installations in Q3. That also means that once we're at the end of Q3, we will have worked through the lockdown impact, and we'll be back to normal in Q4.
If we're looking into 2021, which I think is the most interesting part, we're seeing green stimulus in Europe. Several countries in Europe stepping on the accelerator in order to stimulate the economy, and a lot of that stimulus has a green tint to it. European Union overall responding to the crisis with a European Green Deal, and we're also seeing increased capital inflows to ESGs and energy efficiency, and improved regulatory and subsidy environment. We're thinking this will translate into continuous improvement on prices on batteries and solar PV, and we're thinking that the 2020s overall are looking very promising for price competitiveness on distributed energy compared to traditional sources of energy in all countries in Europe. Overall, on the business side, the first half we're booking revenue, which is down 10% compared to 2019, and the number of units sold is down 6%. Norway taking the biggest hit.
I think it's a mix of both coronavirus and extremely low energy prices that have been getting a lot of attention, and consumers haven't escaped the fact that we're having the lowest electricity prices in the Nordics in 20 years. Sweden, flattish. We have seen a bit of a weakening on sales on our end. I think it's mostly due to us taking down activity in the face of COVID. I'll get a bit back to that. France will, in this first half compared to only a quarter in 2019 as we merged with In Sun We Trust in April 2019. They're only reporting their commissions and not the entire sale value, because they're on a different business model and a different technology stack from the rest of the Otovo family.
That will change in the second half of 2020, and we'll see numbers come up in France, both in terms of revenue and the extractable margins on each product. Spain launched at the end of 2019 and has booked its first EUR 100,000 in revenue. That is going to grow fast throughout the end of the year. Overall, group revenue is NOK 77 million, down from NOK 86 million last year, a drop of about 10%. On the right-hand side of the slide, you can see sales numbers in the amount of units so far this year. You clearly see the flattening of the curve as the coronavirus lockdowns hit Europe in March and April.
As we launch leasing and the economies return to a more normal situation, the curve is ticking back up and I think we'll have a good chance of beating 2019 numbers as the year progresses and coming out of 2020 with really high speed and everything set for a high-growth 2021. With regards to market share, we're down in Norway. Norway's mainly Q1 that was poor on the market share. We're coming out of Q2 with more than 50%, which is our normal levels. I think we'll just attribute this to a bit of a fluctuation in when the different companies book their sales during winter and a bit lower volumes than the year before. It's a bit more volatile. I think our levels of about 50% market share are sustainable in Norway this year. Sweden, down from double-digit market share to 6%.
We stood on the brakes in March and April as we faced the coronavirus. That was clearly not the case for our competitors. We focused on doing only profitable sales and being conservative on the marketing front in Q2, and that probably lost us some sales, but Sweden is also back now. We think we can defend and increase the market share towards the end of the year. France. It's a lot more positive story. At this point, the French authorities have only reported Q1 numbers, but we're up from 1.3% last year to 2.3%, and we see that growing throughout the year. When the France team gets on the Otovo technology at the end of this year, we can see that accelerate even further. In Spain, they don't report national numbers of installations.
We have anecdotal evidence of what the biggest players like Iberdrola and Holaluz are doing, and we're quite confident that we're in the top spots in Spain and as we're grabbing market share aggressively. With regards to installers, we've recruited 61 installer companies net during this quarter, this half year. That means we've added quite a lot more because we've also off-boarded some installers that aren't up to standards or aren't performing. We're seeing the year ending at above 300 installer companies on the platform as we enter 2021. This installer recruitment and working on those installers is super important, and this is a slide that I'm extremely proud of because this is not easy to replicate for other companies and is in a way the secret juice of the Otovo recipe.
What you're seeing here is that the three countries that are on the Otovo bidding platform are able to decrease their cost levels extremely aggressively. Saying it a bit jokingly, we're better at reducing costs on the installer side in Europe than the Chinese manufacturers are, I think, decreasing the cost of panels in their factories. Norway, which is an older market, is down 15% in the last 12 months. Sweden down 18% on the average system sold. Spain, which is added only for six months, is down 38% year to date. We are very confident in our ability to reduce cost. We will not be giving out the cost levels in EUR for competitive reasons, but I can say that we compare extremely favorably with the large players in the U.S., for instance.
We're seeing this as a competitive advantage where we can go into markets and get the cost advantage really fast. In Spain, for instance, we're seeing that we're a clear cost leader, and we're bumping up margins in order to not incentivize our competitors to do loss-making sales and erode the basis for business going forward. Okay, I'll leave it to Cecilie to do the second part here and the financial update for the first half.
Revenue came in at NOK 77.4 million for the first half of 2020, which is a reduction compared to same period 2019 of about 10%. This is a result of both demand and supply chain impact from the ongoing COVID-19 pandemic. The number of projects sold in the period was reduced by approximately 6%, but revenue impact is higher, and this is due to a lower average basket size. As the share of projects outside Scandinavia is increasing. NOK 12.7 million in gross profits, which is a margin of 16.4%, and that's up 3 percentage points from the same period last year. Otovo continues to expand project margins on the back of installer platform dynamics, reducing cost of goods sold, despite unfavorable currency development for a large part of the period. Otovo has implemented cost reduction measures to mitigate the margin impact from COVID-19.
Total operating costs still increased with 6%, which is driven by market entry in Spain and the full six-month operation in France. Note that only three months were included in the first half of 2019 for France. The increase in depreciation is driven by goodwill depreciation, which is related to In Sun We Trust, which is being depreciated under Norwegian Generally Accepted Accounting Principles. The increase in finance cost relates to changes in the earn out liability for In Sun We Trust as a result of weakening of the NOK versus the EUR, and this is a non-cash effect for the period, and the overall earn out is settled with 90% Otovo shares and 10% cash. Overall, we still see substantial uncertainty in revenue outcome for the year, and we expect to see gross margin continue to improve and year-end EBITDA in line with 2019.
Otovo exits the first six months with a solid cash position of NOK 153 million. Intangible assets that consist of goodwill of NOK 91 million depreciated over 10 years and Otovo developed technology. Trade receivables and trade payables are reduced from lower activity in June 2020 compared to year-end 2019. Also the VAT treatment in Sweden has been changed, which affected other receivables and payables as of year-end 2019.
There is an increase in the earn out liability due to the weakening of NOK versus EUR, so that's on the non-interest-bearing debt. We've used the average last 12 months currency to settle, so the impact on the first earn out payment was smaller than the actual currency swing. Target cash position for year-end 2020, roughly NOK 65 million- NOK 75 million. This also then includes equity funding of the leasing projects, which I'll comment more on later on in the presentation.
The earn out and sellers loan related to In Sun We Trust. The acquisition will be settled in July 2020 by issuing roughly 240,000 shares. That settles the EUR 2 million liability at a share price of NOK 101 per share and a cash payment of EUR 226,000. The second earn out payment is expected to amount to EUR 3.1 million. That's settled in 90% shares and 10% equity during the second quarter of 2021 and the first quarter of 2022. I'll hand over to Íñigo, to take us through the leasing launch in Spain.
Thank you, Cecilie. Sorry that I'm in remote. I hope everybody can hear me okay. As Andreas mentioned, we launched a leasing in Spain barely about six weeks ago, and it has been extremely successful. What we're able to do with this new product is address a whole market segment that before was not considering solar. Just to give you a sense of numbers, in Spain, up until today, pretty much we have 10,000 homes with a solar system on their roof, yet the market has a potential of four million homes. When we started looking at the country to start operations here, we saw that three out of those four million homes really didn't have access to solar because of financing issues. People that didn't really have the money or the ability to address this opportunity.
What leasing has proven is that we're now addressing these people, as we call them, the share, and the slide, sorry, the normal personal economy folks, right? The people that would love to do it, but they didn't have. In Spain, the average installation could be somewhere between EUR 5,000-EUR 6,000. They didn't have that money easily accessible. Yet with leasing, they're able to consider it, and also an important thing in Spain is that these systems, the way we are selling it, they're cash flow positive to the client from day one. This means that the cost of the lease of that monthly quote is lower than what they're saving on their invoice. Thus, they're not having to invest any money up front, and they derive savings from the first day.
On top of that, the way subsidies are structured in Spain, the subsidies go to the homeowner, not necessarily to the solar system owner. Thus, our customers, even though they're leasing, they're still able to get money for improving their homes, even though that hardware is not theirs. Great opportunity. Even though COVID hit hard here and the country was shut down for quite a few weeks and months, we were able to develop this product, launch it in early June, and we're already seeing that it is deriving a very relevant share of our business. That's what we thought it would be, and this is being confirmed by the first few weeks of operations. On the next slide, if we look at the. Sorry, one second. If we look at what we did on the PR launch, it got great press.
First of all, because it is a first-of-its-kind product in Spain. There are some alternatives that large utility players are putting on the market. They require very large roofs that, for example, 98% of our customers, they don't have a roof big enough for what these utilities would claim or would help them put, let's say, an investment-free product on their roof. Secondly, the way these other alternatives are structured, they require you to sell the energy to whoever puts this system on your roof. In our case, the energy is 100% the customers', and they can do whatever they choose. They can self-consume it, or they can revert it back to the grid. It makes it a very unique proposition, and as I said, it is cash flow positive for the customer from day one. It got great reception all across the board.
We got into the major newspapers, we got into the specialized press. One of the major headlines was, get solar for free, right? No money down on your roof, which is essentially, if you look at it from a cash flow perspective, that's what it looks like. There's a couple of other things that have been validated over these first few months by Otovo here in Spain. Number one is that operating under a Norwegian/Nordic flag in Southern Spain is very positive. People view this as a professional and a sustainable brand, serious folks. It's an advantage when competing with the utilities. We think that this will help another, as Otovo looks at Pan-European expansion, this is a very strong brand to build on.
Despite the growth in Spain, which has been very fast, and we hope that in future quarters and halves we can show you some more detailed numbers, reception has been extremely warm. We've just put here a number of quotes of customers that you can freely look on Google, Trustpilot or Habitissimo, which is a local handyman's portal, on how happy customers are. We take care of all the administrative processes in Spain, which are sometimes cumbersome for the customer. Customers, we typically receive ratings between four stars- five stars. Very happy. It's working, and it's scaling as we're going with sales. We think that this is very sustainable. All this in an environment, as I talked before, that the country was shut down. Even through the confinement, we were still able to sell.
Every single week, sales were coming in. As you can see here, customer reception has been very good, and it seems to be scaling. Despite the confinement measures in Spain, like I said, we were able to sell. For the only two to three weeks that actual installations were prohibited, we were still able to, with new security and improved quality controls and health measures, to continue installing. Even in autumn or fall that might look at more confinements, we think we're able to operate. The other thing is, Otovo was the only company in the market that was able to work remotely from day one.
All our leads were able to get their quotes, we were able to have sales conversations. Of course, that adaptation that our competitors are now having to go through, we were able to do it from day one. Overall, and just to finish on the leasing, we think that we have a very successful product on our hands. It's contributed, and it's contributing a significant share of our sales, and it has other benefits. We think that it's pushing us into the virtuous cycle of giving us a much bigger market, by which more people will see panels on the roofs, and thus more people will start asking about this. Granted, we're only five weeks since the launch, but we're already seeing friends and families together that are purchasing or are renting, they're leasing the systems from us.
The other thing that we're also seeing is much cheaper marketing, and ability to convert these sales. We're addressing a much wider market, we're in less competition with other players, and we're targeting a much bigger set of possible customers. These are all benefits that over the coming months, we think will make leasing a significant share of our business here in Spain. That's a bit what I had. Cecilie, I think back to you on the setup of the company.
Thank you, Íñigo. Continuing on the leasing side, we are very excited. We've worked hard for a long time to get this project up and running, and we're excited to announce that now we have established the asset company to own the solar systems, namely European Distributed Energy Assets or EDEA. EDEA will purchase the solar systems from Otovo and receive fixed monthly payments from the leasing customers. Otovo will handle customer interaction, including marketing, sales support, and replacement of spare parts, and receive payments for this service from EDEA. We estimate that we will be able to deploy north of NOK 1 billion within the next three years. We've secured an attractive debt facility and will give existing Otovo shareholders the opportunity to participate in that NOK 30 million rounds in EDEA during August, September this year.
There are four key elements that makes this an attractive investment case from our point of view. This is an opportunity for capital deployment on a large scale. As Íñigo just pointed out, we're seeing high demand for this product. As we build a larger portfolio, we believe EDEA will appeal to several investor categories, including those looking to deploy sizable equity tickets. As we've also been able to secure an approved term sheet with a large Nordic bank, with 50/50 debt equity, we foresee equity returns here to be fairly good, given the risk/return profile of the projects. EDEA receives stable CPI-adjusted cash flows on 20-year contracts. There's no volume or price risk for the investor as the monthly leasing payment is fixed. The portfolio will be highly diversified, consisting of thousands of contracts towards homeowners in Western Europe, and this mitigates the counterparty risk.
The fourth point is also that once EDEA has a sizable portfolio with a demonstrated track record, there is a potential for yield compression through an exit to an investor with lower return requirements. For example, an infrastructure fund. As I already mentioned, we will be giving existing shareholders an opportunity to participate in a private placement in the fall, and terms to that regard will be disclosed in August.
Thank you, Íñigo and Cecilie. To us, this half year has been a real positive with regards to our biggest project, which was the launch of the leasing concept in Norway and Spain, and really sets us up for a nice follow-up with a leasing launch in France and Sweden this autumn. To sum up the first half of 2020, it is a period that has been impacted by COVID. We are expecting a pretty much no growth year, but the entry speed into 2021 will be high, and it really encourages us. We are continuously expanding the profitability per project, and we are seeing more of our growth happening outside Scandinavia. The leasing offer has started, and as you heard from Íñigo, it has been a successful launch and has really promising early numbers.
The PR and public reception was positive, and it is improving our metrics both on the customer acquisition cost, the margin per project, and our ability to close sales with attractive conversion rates. We feel that this is transforming our company and really sets us up for high growth and success in 2021. We will spin out EDEA now, and we are executing on creating this company, an asset-owning company which will hold the leasing assets on its balance sheet. Otovo and Otovo shareholders will take the first leg, and then a Nordic bank debt facility has been secured, which allows us to go at full speed this autumn. It also sets us up to be able to deploy pretty large sums of money in the medium term, aiming for NOK 1 billion in the 2020-2023 timeframe.
I think that pretty much concludes the prepared slides and material from our side. Well, in that case, thank you for attending, and the presentation will be put on notc.no for further reference. Thank you to Cecilie and Íñigo for presenting, and looking forward to talking to you all in the fall. Thank you very much.