In conversation with our CEO
In the 2021 Annual Report, Michiel Langezaal looks back on the past year and our plans for the future.
Fastned started 2021 with a bang by raising 150 million euro in growth capital. This set the stage for acceleration on all fronts. The organisation doubled in size putting the capability in place for an accelerated pace of station openings in the future. In 2021 Fastned more than doubled the pace of station construction and opened its first stations in France, the sixth country of operation. At the same time tender applications were submitted for more than 100 new locations, to accelerate the development of a strong pipeline of future stations. All this happened in a year in which demand for charging was still impacted by the coronavirus. In this conversation we look back on last year's activities and results, our strategy and how this contributes to our mission.
Michiel, let’s start with the capital raise of the first quarter. How important was this for Fastned?
This capital increase was very important for Fastned as it allowed us to accelerate the growth of our company. Over the past decade Fastned played a pivotal role leading the Netherlands out of the chicken and egg situation of creating charging infrastructure versus electric car adoption. Now, we will be able to play a major role in the roll out of charging infrastructure in Europe. This big step up in our funding set the tone for many of our actions in 2021.
In November we signed an important partnership with Banque des Territoires, the territorial investment division of the French public institution Caisse des Dépôts, that supports the roll-out of our charging stations in France with up to 50 million euro.
So 2021 really proved to be a year in which both debt and equity capital markets showed a very positive stance towards Fastned, financing its growth ambitions and more generally the battery electric vehicle transition. I am very happy to see this, as investor confidence is an important element in enabling the energy transition and our mission in particular.
And how have you been putting the capital raised into action?
Again, coming back to our mission, we want to accelerate the transition to electric mobility and give freedom to electric drivers. The next generations should be free to go wherever they want when driving an electric car. This capital will enable us to realise our mission faster. Our growth plan focuses on three things.
First of all, the capital is used to fund the construction of stations at the roughly 150 locations we had in our pipeline at the time. In 2021 we have made a big step in construction pace and delivered a record number of 57 new stations with many more to come in 2022 and beyond.
Secondly, to ultimately reach our goal of a thousand stations, we have to keep our pipeline filled with new locations. We expanded the teams involved in this to grow the pace of acquisition and as an example of last year's successes; these people made the filing of more than a hundred tender applications for prospective A+ motorway locations happen.
But just as important are our investments in the tech side of our business. We develop, own and operate our own software back-end because we believe it’s crucial for delivering a great charging experience. Some might think that a charging station is nothing more than a wall socket for electric cars. But it's not that simple. There is no communication between, for example, a hair dryer and its wall socket. But between chargers and electric cars there’s communication both ways and getting communication right is not a given, as we know from our interactions with others. This is why in 2021 we continued to invest heavily in the software and systems that drive and support this communication to be as flawless as possible.
How do you look back at the market developments and your results in 2021?
First of all, we more than doubled the revenue related to charging in comparison to 2020. In the fourth quarter we delivered 4.9 million euro in revenue, putting our yearly run-rate revenue at almost 20 million euro. These figures show the exponential growth we are realising. The fact that the pace of our revenue growth is higher than the growth of the battery electric vehicle market as a whole shows the relevance of fast charging and our offering. Even more so, the majority of electric vehicles sold in the last year are long range cars with big batteries, and contrary to the expectations of some people, we see that drivers of these cars have the same or maybe even greater desire to fast charge at our stations.
The main driver for our revenue growth is the battery electric vehicle market development that, quarter by quarter, month by month, continues to register new all-time highs. Countries like Germany and the UK are consistently realising almost triple digit year-on-year growth rates every quarter. And the Netherlands, being one step ahead in the growth curve, writes solid mid-double digit growth figures.
All those new electric drivers lead to an increase of the utilisation of our overall network, from 9.9% at the end of 2019 to 10.4% at the end of last year. Utilisation is driven upward by higher kWh deliveries and downward by building new stations and upgrading existing stations, resulting in significantly more capacity. We increase capacity to prepare for the millions of electric vehicles we expect to see on the roads in the coming years.
You don’t mention the corona pandemic. Did that not have an impact on Fastned?
Working from home does lead to people driving less and as a consequence demand for charging has been lower as well. In the first lockdown in March 2020 we saw a strong reduction of kWh deliveries of 70%. Although subsequent lockdowns had a less severe impact on traffic in general, the demand for charging per vehicle on the road in 2021 was still considerably lower than before corona. We think this is because large companies with relatively large EV fleets continued to adhere more strictly to working-from-home policies than many others. The lifting of those working-from-home restrictions should therefore have a positive effect on kWh deliveries in the coming period.
That all sounds very promising, but when will it lead to profitability?
The existing network of stations is already profitable on an operational EBITDA level. But now is the time to grow the network and invest in future growth. The decision to invest heavily in an accelerated growth path pushes the point of profitability on a company level further into the future. This is a deliberate choice that also resonated with the investor community when we did our capital raise in February.
Looking ahead, it is the speed of construction and the number of tenders and location deals we commit to that will largely determine the speed with which we allocate the funds we raised last year. So if we are successful and win more deals and grow faster than expected we might return to the market for more capital earlier. In that case profitability will be pushed out even further in return for greater value creation.
But as I said, our existing stations, especially in regions with already decent electric vehicle adoption, are profitable and are starting to create significant cash flows. That convinces us that we are on the right track and that the stations we are developing will soon start contributing to our result as well.
We think our stations will be able to generate revenues of more than 1 million euro per year by 2030. This follows from our station metrics. In the fourth quarter of last year an average Fastned station made more than 100 thousand euro of revenues on an annualised basis. While only 2.2% of the vehicles in the countries we operate in were fully electric. By 2030, this should be around ten times higher, based on an adoption target of more than 20% in for instance Germany and the Netherlands. This tenfold increase in electric vehicle adoption should result in similar growth rates of traffic and therefore of station revenues.
Wholesale electricity prices have seen an unprecedented rise across Europe in 2021, how did you deal with this situation?
Market prices have been rising from around 4 cent per kWh over the past years, to over 30 cent per kWh on certain days in December of 2021. To maintain a healthy margin, we decided to partly follow this trend by raising our prices in most countries for the first time in five years, starting 11 November. The increase of 10 cent to 69 cent per kWh did not have a noticeable effect on charging demand. The full effect on revenues and margin will be visible in the first quarter of 2022.
Talking about external factors: do you experience delays or delivery issues in your supply chains?
As our pipeline grows and we accelerate the roll-out of our network, it’s essential to have a strong and reliable supply chain in place in each of the countries we operate in. Our own architects design our stations and we’re deeply involved in building them together with our suppliers. This is also something that sets us apart from other charging companies.
We know practically every “nut and bolt” of our stations. This is why Fastned is a leader in terms of CAPEX efficiency, which allows us to build more stations for the same amount of money. It consequently improves our business case because lower CAPEX, generating the same or more revenues, improves return on investment.
Long-standing relationships with our suppliers also support us in times when suppliers are under pressure. Additionally, we pursue a resilient supply chain so we can rely on more than one partner. As a consequence, we have so far been able to mitigate and manage the challenges in our supply chains.
Unlike most suppliers, grid companies are heavily regulated, which makes them less flexible. We see that they are in general less prepared for the impact of the energy transition than other partners that can more easily invest in future growth. That’s why grid companies often find themselves under pressure to deliver in time.
We manage this by keeping closely connected to the local authorities and submitting applications for grid connections earlier on in the process to make sure our new stations can start delivering energy from sun and wind shortly after they’re finished.
Big players like oil companies, car manufacturers and utilities are joining the game. Is Fastned strong enough to hold its ground?
Our mission is to accelerate the transition to electric mobility and we do this by building a network of a thousand fast charging stations. So holding ground is not our goal. Our goal is to grow and that’s what we’ve been doing for the last decade. It has become part of our culture, even part of our DNA and it’s also what sets us apart from others joining the game.
We saw the transition coming and we've been preparing ourselves for millions of electric cars on the road. We have put in place what we believe are the fundamentals for a thriving fast charging company: uptime levels that are leading in the industry; a very capable and efficient supply chain to build great stations at very competitive cost levels; a strong brand, and a leading customer experience. All these elements together make up a very strong business model that is not that easy to copy and that gives us a lead over others for years to come.
This strong concept is also recognised when we apply for competitive tenders. We win a significant number of these tenders based on these credentials. This already led to the development of a large pipeline of high traffic locations, and the recent funding allows us to accelerate our network growth towards our goal of a thousand stations. And the timing is right as more and more governments across Europe are now also seeing the need for competitive tenders to accelerate the roll out of a charging infrastructure in their countries.
Even with more new entrants joining the game, and the charging industry growing, it will be difficult to meet the accelerating demand for charging services. We are only at Day One of an industry that is expected to grow exponentially for several decades. So we welcome all these new initiatives. They will ultimately help us in our mission to give freedom to electric drivers and accelerate the transition to sustainable mobility.
So you’re looking forward to the next ten years?
We believe that that by 2025 the idea of buying a car with an internal combustion engine will not only sound stupid and old fashioned, but it will also be seen as a bad business decision, harmful for the environment. We will contribute in every way we can to make this idea a reality. Our independence - having no links to fossil fuels or thermal power plants - gives us a unique position to do so.
Over the past decade Fastned played a pivotal role leading the Netherlands out of the chicken and egg situation of creating charging infrastructure versus electric car adoption.
The next ten years will be all about giving that electric freedom to drivers by further extending this network into the rest of Europe, including reaching our goal of a thousand Fastned stations. We will make them not only the best place to charge but also the best place for a quick stop with clean toilets, great coffee and sandwiches. For most people a weekly 15 minute stop-over at Fastned will be enough to power their weekly driving habits.
CEO of Fastned
For the full Annual Report, click here.
Fastned has been developing fast charging infrastructure for electric vehicles across Europe since 2012. Fastned’s mission is to accelerate the transition to sustainable mobility by giving freedom to electric drivers. Based in Amsterdam, the company has built 197 fast charging stations in the Netherlands, Germany, the United Kingdom, Belgium, France and Switzerland. The company specialises in developing and operating fast charging infrastructure where drivers can charge their electric vehicle with up to 300 km of range in 15 minutes before continuing their journey. Fastned is listed on Euronext Amsterdam (ticker AMS: FAST).