Obton Group Holding A/S

The Group's principal activities The group's main activities comprise - developing, purchasing and financing solar PV parks and battery storage and making them available to private and corporate investors via solar funds. In addition, Obton also sells solar energy projects to international institutional investors. - to facilitate investment in properties through real estate funds. Development in activities and the financial situation The group's Income Statement of the financial year 1 January 2023 - 31 December 2023 shows a result of DKK -48.367.274 and the Balance Sheet of the Group at 31 December 2023 a balance sheet total of DKK 2.897.074.928 and an equity of DKK 990.950.041. Post financial year events After the event of the financial year, no events have occurred which may change the financial position on the group substantially. Expectations for the future The challenging market conditions will also dominate 2024, but backed by a strong pipeline the group maintains ambitious expectations for 2024 with a budgeted operating profit in the range of DKK 300 million to DKK 400 million. Knowledge resources The Obton group continuously devotes significant resources to the further development of the group's employees. Attracting and retaining competent employees is essential to the group's continued growth. Risks The group's business risks are associated with the ability to continue developing and expanding its strong position in the alternative investment market. The group does not have any specific risks other than those generally encountered in the industry. Net profit/loss for the year compared with expected developments in the most recently published annual report After several years with robust growth, 2023 left the group with a significantly lower profit before tax of DKK -67 million compared to DKK 248 million in 2022 and a budget for 2023 of DKK 320 million. In a lot of ways 2023 was the perfect storm with rising inflation, disruptions in the value chain, higher interest rates and increased liquidity constraints. This affected many aspects within investment and financing. Especially, the revamping and project optimization activities in Italy and Japan were hit by difficulties causing both delays and cost increases leading to fee adjustments and a significant write down of DKK 188 million related to projects in Italy. Financial risks and strengthening of the capital base In continuation of the many strategic challenges and the increased pressure on the investment markets as a result of the rising interest rate level, in the financial year the owners have supported the cash position in the group through injection of cash and conversion of debt on Rhea Topco ApS level. As a result, equity in the owner company Rhea Topco ApS has increased by DKK 727 million. As part of the group's risk management, management has increased focus on optimizing the group's cash management, optimization of working capital and agreements with credit institutions. Charting the course for ESG work through our strategy At Obton Group, a primary and unwavering commitment is placed on caring for people, nature, and biodiversity while concurrently operating as a responsible business. This commitment is encapsulated in our ambition to prioritize Environment, Social, and Governance (ESG) considerations. Across the entire organization, we are dedicated to integrating ESG as an intrinsic element of all our processes, believing that this approach not only aligns with our values but can also generate commercial value. To effectively monitor and guide our ESG initiatives, we have implemented a comprehensive ESG strategy that highlights five key focus areas spanning the realms of the environment, society, and governance: Environment 1) Mitigate climate change 2) Preserve the environment and natural resources Society 3) Foster an attractive and dynamic workplace Governance 4) Uphold ethical and transparent business conduct 5) Implement responsible investment practices For each of these focus areas, we have defined both long-term objectives and annual goals, providing a structured framework for working towards our stated KPIs. This strategic approach underscores our commitment to balancing business objectives with a profound sense of responsibility towards the environment, society, and ethical governance. Environment Statement of the companies' impact on climate and nature, including consumption of raw materials, water and energy as well as CO2 emissions. Social Covers social conditions, human resources, the working environment, responsibility for the adjacent society and human rights, as well as investor, supplier and partner relations. Governance Addresses both transparency and openness in the reporting by company management, but also actual behaviour with regard to corruption, bribery, etc. At Obton Group, we take great pride in our role as contributors to the green transition by facilitating the production of renewable energy. This has the potential to significantly decrease the reliance on fossil fuels, such as gas. The promotion of renewable energy sources, particularly solar power, can effectively reduce the emissions of CO2-equivalents (CO2e) by decreasing the consumption of fossil fuels. This aligns with global objectives to limit global warming to 1.5°C compared to pre-industrial levels and address the urgent need to mitigate climate change. Our commitment to this cause is evident as it serves as the primary focus in Obton Group's ESG strategy. By actively participating in the generation of renewable energy, we aim to contribute to a sustainable future, supporting international efforts to combat climate change and achieve environmental goals. Environment Climate change mitigation Become carbon neutral and continue to contribute to reducing CO2 emissions through solar energy production. Environment and natural resource preservation Improve resource conservation through circularity and increase initiatives that support biodiversity. Social Attractive and dynamic workplace Work towards an inclusive work environment, with room for everyone, and report on HSE (Health, Safety and Environment) areas to drive HSE practices. Governance Ethical and transparent business conduct Ensure an ethical supply chain and address ESG issues through active ownership. Responsible investment Continue to integrate ESG factors into all aspects of the business. Mitigating climate change Mitigating climate change is a paramount goal for Obton, and we are actively working to reduce our own emissions of CO2 equivalents (CO2e). In 2022, we initiated the reporting of our core activities through an online platform dedicated to calculating Obton CO2e emissions. This effort continued in 2023, with an expansion of data sources and refinement of reporting methods. Our commitment to reporting relevant activities is an ongoing effort, and we will persist in this endeavor throughout 2024. Our objective in reporting and calculating CO2e is to establish science-based targets for reducing Obtons emissions. The 2023 CO2e emissions serve as the baseline, providing the starting point for setting reduction targets. This marks our second year reporting on greenhouse gas (GHG) emissions, and we are continually learning to enhance our reporting and set new reduction targets. This involves understanding and measuring the appropriate scope of different emission categories, focusing on those most relevant to Obton. In 2023, our total emissions measured reached 418.6 tCO2e, reflecting an increase of 35.5 tCO2e compared to the previous year. This increase can be attributed to the widened scope of emissions reporting, encompassing new offices and categories, as well as a general expansion of activities. As part of our commitment to combating climate change, we manage a growing number of solar PV plants, exceeding 1,550 in 2023. These plants generated 1,294 GWh of solar energy, a 4% increase from 2022, equivalent to the energy consumption of approximately 285,000 Danish households. While our portfolio's total capacity in 2023 showed a slight increase compared to the previous year, it did not meet the 10% target increase in power generation. Our ongoing goal is to develop a robust portfolio of renewable energy assets, with the aim of generating 10% more solar energy in 2024 compared to 2023. Recognizing the importance of climate change risk, we actively assess potential climate-related risks, such as extreme weather events, in our projects. This includes implementing processes aimed at mitigating the negative impacts that climate risks may pose to solar PV and battery storage plants. Obton remains committed to sustainable practices and contributing to the reduction of CO2e emissions both within our operations and through the generation of renewable energy. Preservation of the environment The circular economy has emerged as a central focus area, offering a range of benefits, including the conservation of finite resources and the reduction of CO2 equivalent emissions by avoiding the extraction of raw materials and manufacturing new products from scratch. Within Obton, our commitment to the circular economy is evident as we actively explore opportunities for recycling and reusing solar PV modules. To align with circular economy principles, the majority of our retired solar PV modules are resold to other projects. For those modules that are not resold, we adhere to the guidelines outlined in the Waste of Electric and Electronic Equipment (WEEE) Directive. The focus on reuse extends beyond modules to inverters, where our goal is to maximize the utilization of repairable inverters rather than resorting to replacements. This approach not only minimizes waste but also contributes to the sustainability of our operations. While Obton is relatively new to the area of battery technology, we recognize the importance of reuse in materials and batteries. As this area continues to evolve, our commitment to responsible practices guides our approach to handling and repurposing batteries when the need arises. Acknowledging the global biodiversity crisis, Obton is committed to integrating biodiversity considerations into our work, especially in the installation of solar PV plants. This involves a thorough examination of how our projects impact the local area, the implementation of measures to support biodiversity, and ongoing efforts to maintain the plant in an environmentally friendly manner. We prioritize sustainability by avoiding the use of herbicides to control vegetation, and our solar PV panels are designed without components that pose risks to groundwater pollution or hazardous waste leakage. Remaining current with legislation and meeting local requirements is a top priority for Obton. In the context of Danish projects, we have proactively decided to conduct Environmental Impact Assessments for all greenfield projects in 2023, regardless of whether they are legally mandated. This proactive approach demonstrates our commitment to environmental responsibility and sustainable business practices. Social At Obton Group, we recognize the pivotal role our employees play as essential knowledge resources, and we are dedicated to fostering an environment that encourages our skilled staff to thrive and stay with us. Our ongoing efforts focus on enhancing the working environment by fostering trust, promoting good working conditions, and building strong relationships, ultimately fostering a sense of cohesion among our team members. The commitment to ensuring a safe, healthy, diverse, and inclusive workplace is paramount for Obton Group. We firmly believe that such an environment not only cultivates innovative solutions but also strengthens our business and facilitates continuous development for our staff. Attractive and dynamic workplace Employee well-being is a central focus for us, both in work-related and social contexts. Obton Group maintains a zero-tolerance policy for offensive behavior, including discrimination, threats, and any form of physical or psychological harassment. To gauge employee satisfaction, we utilize an Employee Net Promoter Score (eNPS) as a metric. This score reflects the likelihood of employees recommending Obton Group as a good place to work. We aim to maintain a high eNPS, recognizing that our staff serves as the best ambassadors for promoting Obton Group as an exemplary workplace. In 2023, we introduced the Talent Program, inviting a select number of young talents to participate. This initiative is designed to provide talent-boosting opportunities for our employees. Obton Group actively promotes diversity in its workforce, encouraging individuals of all ages, genders, sexual orientations, and backgrounds to apply for positions within the company. In the preceding year, Obton Group pledged its commitment to "The Gender Diversity Pledge" established by the Confederation of Danish Industry (DI). This pledge outlines 16 principles aimed at advancing gender diversity and includes an obligation to work towards achieving a general gender distribution of 40/60% among management teams and Board of Directors in the labor market by 2030. Obton Group has adopted these principles, setting its own specific goals for the management team and Board of Directors. The group will actively pursue a gender distribution of 40/60% in the coming years. Obton places a high priority on employee health and safety, demonstrating an ongoing commitment to maintaining a robust Health, Safety, and Environment (HSE) program. This initiative involves identifying potential workplace hazards, preventing accidents, and minimizing the company's environmental impact. To facilitate this effort, Obton has appointed HSE managers at its largest locations and for employees working on-site at solar PV plants. These HSE managers serve as ambassadors for HSE work, overseeing the implementation and acting as points of contact for employees. In 2023, a first aid course was conducted for all employees at both the headquarters and international offices. Looking ahead to 2024, Obton Group plans to conduct a workplace assessment (APV) in its new headquarters, further reinforcing its commitment to employee health and safety. Belonging Ensure the full potential of employees, where innovation thrives and views, beliefs and values are integrated throughout the business. Equity Fair treatment and equal opportunities for all employees, ensuring good cooperation and employee development. Inclusion All employees are involved, and perspectives are included in an equal and trusting working environment. Diversity A diverse workforce where diversity is accepted and valued. Governance Obton Group is dedicated to conducting an ethical, transparent, and responsible business, ensuring compliance with relevant legislation and regulations. The company is committed to creating a more transparent value chain by sharing information about goals, results, and processes and seeking information from operators within the value chain. These commitments are outlined in Obton Group's policies and code of conduct, which all employees are obligated to follow. Ethical and transparent business conduct In the pursuit of ethical and transparent business conduct, Obton has adopted a policy for ESG due diligence and established a code of conduct for partners and suppliers to enhance transparency in the value chain. A minimum of 70% of direct suppliers of solar PV modules, inverters, and battery modules are expected to sign this code of conduct or adhere to corresponding standards. Non-compliance with Obton's standards and expectations may result in discontinuation of collaboration with the respective supplier. To prevent greenwashing in its marketing, Obton has developed guidelines for its marketing department, aligning with recommendations from the Danish Consumer Ombudsman. The company is actively engaged in the solar energy industry through its memberships in sector organizations such as SolarPower Europe, Green Power Denmark, and the Swedish Solar Energy Association. These memberships provide opportunities to stay updated on industry developments, trends, and ESG challenges specific to the sector. Obton Group conducts annual compliance reviews to examine processes within agreed-upon areas, confirming practical compliance and evaluating the sufficiency and currency of the risk assessment mechanism. The company is committed to responsible investing, with policies for ESG due diligence and the integration of ESG risks guiding the investment process. Efforts to prioritize and implement these methods in investment processes are underway in the coming years. During the purchasing process, Obton Group emphasizes the identification of projects and partners by considering potential climate change impacts, environmental factors, and promoting decent working conditions. The company remains focused on these aspects, with the whistleblower scheme available for reporting various matters within the organization. Environmental Conditions The core activities of Obton involve the development, acquisition, and financing of energy projects, which are subsequently sold to investor-owned solar and battery storage funds under management by Obton Forvaltning A/S. These funds then engage Obton A/S' for various services such as asset management, technical support, financial controlling. Additionally, Obton develops and sells energy projects to international institutional investors, contributing to the growth of renewable energy in the grid. The storage of surplus energy in batteries enhances the utilization of such energy. Potential negative impacts on the environment arise from the establishment of solar PV and battery storage plants on valuable farming land or areas with significant amenity value, as well as potential disruptions to local wildlife and surroundings. Project-specific risk assessments are conducted, and measures to mitigate these risks are incorporated into project plans. Obton has implemented policies and procedures to ensure thorough examination of potential negative impacts on the environment, nature, and biodiversity. Consideration for the surroundings is balanced with the goal of generating robust returns for investor-owned funds under management by Obton Forvaltning A/S. In 2022, Obton initiated several initiatives for ESG Due Diligence processes, expanding on them in 2023. The focus is on identifying significant risks for each project and assessing potential ESG factors that projects may impact. Obton anticipates the continued growth of the solar and storage industries and will intensify efforts to implement sustainability risk assessments across all stages of the investment process. Social and HR conditions In terms of social and HR conditions, Obton Group places emphasis on enhancing HR conditions to attract and retain skilled staff. The company operates based on a strong set of values reflected in a comprehensive employee manual and a code of conduct that all employees must adhere to. Regular conversations with managers, quarterly appraisals, and employee satisfaction surveys are part of the ongoing efforts to ensure employee well-being. Additionally, a range of courses is offered to support professional and personal development. Positive Impacts Implementing measures that positively impact both people and nature in the immediate vicinity of energy plants is a commendable goal. Obton focuses on utilizing areas that may not be suitable for other purposes, such as disused gravel pits, recycling centers, spaces alongside highways and industrial areas, as well as roofs on factories and warehouse buildings. In these areas, the implements practices to enhance local biodiversity and sustainability: 1. Greenery and insect hotels Incorporating greenery and insect hotels to promote and support local biodiversity. 2. No use of fertilizers or pesticides Adopting a chemical-free approach by avoiding the use of fertilizers, pesticides, etc., which benefits groundwater quality. 3. Natural management with grazing sheep Employing natural land management methods, such as using grazing sheep, to maintain greenery and manage vegetation. 4. Local labor engagement Utilizing local labor for the establishment and ongoing operation of projects, contributing to the local community and economy. 5. Community involvement Engaging residents in the local area through initiatives such as guided tours, information boards, and hiking paths through the farm. 6. Ownership opportunities for residents Offering residents the opportunity to become "co-owners" of a plant, fostering a sense of community involvement and ownership. 7. Greenery to counteract glare Implementing greenery around the farm to counteract reflected glare and mitigate any inadvertent line of sight to neighboring areas. These initiatives showcase Obton's commitment to sustainable practices, community engagement, and responsible land use. The focus on biodiversity, natural land management, and involving local communities reflects a holistic approach to environmental stewardship. Human rights The Obton value chain features a number of known risks in relation to human rights. Obton is a member of several international stakeholder organisations working actively to make value chains more transparent. We are also working to promote transparency, and we support this work through our code of conduct for suppliers and partners, which we implemented in our Operations & Maintenance (O&M) contracts in 2022. Obton requires suppliers and partners to comply with this code or corresponding standards. In this way, Obton is supporting the international human rights conventions which apply to Denmark as a part of the UN. We have in 2023 expanded the scope of our code of conduct, to now also include Solar PV, inverters and battery suppliers. So far, a total of 6 direct suppliers have signed the code of conduct. Our target is to have 70% of direct solar, battery module and inverter suppliers sign the code of conduct. Human rights challenges in the supply chain within renewables has historically affected the sector and continues to do so, with a majority of suppliers originating in China. This increases risk in relation to violations of human rights, and reduces both the transparency and influence of a company like Obton. Our supplier code of conduct helps mitigate this risk, by ensuring that UN and ILO conventions, or equivalent standards, within human rights and other areas are not violated by the supplier. Anti-corruption and bribery Corruption and bribery risks exist within the Obton value chain. To mitigate these risks, Obton has established internal guidelines and policies aimed at preventing bribery and corruption. Our commitment extends to compliance with both national and international regulations, standards, and principles dedicated to eradicating such practices. As part of our proactive approach, we have instituted a whistleblower scheme, enabling employees to anonymously report any unlawful or unacceptable conditions. Notably, there were no reports submitted in 2023. Obton remains steadfast in its dedication to addressing and focusing on this critical area. Target figures and policies concerning the under-represented gender As of December 31 2023, the gender distribution within Obton staff stood at 63% men and 37% women. Obton remains committed to fostering a diverse workforce and actively focuses on achieving a balanced representation. The table on the left provides an overview of the gender composition at various organizational levels, including the senior management body (Board of management and employees that are organizationally at the same management level as the Board of management), other levels of management (employees with direct reporting responsibilities to the senior management body), under-represented gender percentages, target figures, and the projected year for attaining these targets. Having signed The Gender Diversity Pledge in 2022, Obton adheres to the framework tools outlined therein. The company recognizes the importance of diversity in its recruitment efforts, especially for managerial positions. Initiatives such as offering management training, emphasizing diversity in succession planning for executive roles, providing flexible working hours, remote work options, and career coaching for managers underscore Obton's commitment to fostering diversity. In 2023, these various measures were consolidated into a unified policy. To align with realistic expectations, the target year for meeting diversity goals was adjusted in 2022 based on the Danish Business Authority's recommendation to consider the company's specific circumstances. In 2023, the gender diversity target was raised from 33% to 40%, as specified in the diversity policy for the first and second management levels. Obton supports the achievement of these targets by organizing leadership programs and courses to enhance employees' competencies. Additionally, employees are encouraged to participate in appraisal interviews, where discussion includes assessing their skills and aspirations for managerial roles. The senior management body changed from a total of 3 in 2022 to 6 in 2023. This however, did not change the composition of genders, and the under-represented gender therefore still constitutes 0% of the senior management body. The changes in Top Management in 2023 have taken place through promotions of existing middle managers from a business strategic perspective. Internally, it has not been possible to find suitable female candidates. All external recruitments in 2023 (all levels) are anonymized in the initial phase so that gender is not taken into account, but is exclusively screened for competences. On the other levels of management, the composition did change, where the total number of members changed to 28, and the share of the under-represented gender increased from 24% to 29%. Data ethics At Obton Group, our commitment to ethical practices is outlined in our Data Ethics policy, which delineates the responsible use of data and new technologies. This policy not only defines ethical guidelines but also emphasizes key focus areas related to data-ethical behavior, aligning with Obton Group's business model, values, strategic priorities, and visions. Transparency is a cornerstone of our approach, and Obton Group ensures that all investors are informed about the types of data the company collects and processes, along with the intended purposes. Data processing is carried out only when necessary or mandated by law. In collaboration with public authorities, Obton Group actively engages in addressing potential data breaches and preventing money laundering and terror financing. We uphold the principles of responsible, confidential, and secure data processing, applying effective control and supervision mechanisms. In addition to the statutory statement above the Data Ethichs Policy is publicly accessible on our website at www.obton.com, reaffirming our commitment to openness and ethical conduct in handling data.

Development in activities and the financial situation The group's Income Statement of the financial year 1 January 2023 - 31 December 2023 shows a result of DKK -48.367.274 and the Balance Sheet of the Group at 31 December 2023 a balance sheet total of DKK 2.897.074.928 and an equity of DKK 990.950.041. , Development in activities and the financial situation The group's Income Statement of the financial year 1 January 2023 - 31 December 2023 shows a result of DKK -48.367.274 and the Balance Sheet of the Group at 31 December 2023 a balance sheet total of DKK 2.897.074.928 and an equity of DKK 990.950.041.