Fastned Leaves Corona Dip Behind — Profitability in Sight

On January 11, 2022, Fastned published its Q4-2021 shareholder update letter and held its quarterly conference call. Unlike US companies that publish financial reports quarterly, in the Netherlands, the financial report is annual with a summary interim report after the first half of the year. The quarterly update letters are sparse with financial details. For the consolidated income, expenses, profits, cash and balances, we have to wait until the annual report is published on March 29th.

Financial speculation

We can compare this fourth quarter with the corona-printed fourth quarter of 2020. We can also compare it with the previous quarter, the first quarter with real recovery after the stagnation of coronavirus.

Year-on-year comparison with Q4-2020 shows a 158% increase in charging revenue, a 128% increase in GWh sold and a 109% increase in customers. This was realized with an increase of 44% of charging stations from 131 to 188. In the last quarter, 35 of these 57 new stations were opened, showing the acceleration Fastned has realized to recover over the corona period. To find the new locations, cut through the bureaucracy and eventually build the stations, Fastned expanded its workforce with 47 new hires, bringing their total to 109 people.

In the quarter-to-quarter comparison, we see that revenue per station in the first quarter of 2021 reached the same level as in the last quarter before corona, Q4-2019. In the next three quarters, growth was 11%, 26% and 25%, while 9, 10 and 35 new stations were opened in these quarters, respectively. The total charging income per. quarter grew by 19%, 35% and 53% during that period.

Based on the H1-2021 summary financial report, it was possible to calculate at what level of revenue per. station Fastned’s retail activities would be profitable. That level is around € 38,000 per. quarter. With the return of growth, it is likely that Q3-2022 may reach break-even territory and Q4-2022 may show a real profit from charging activities.

The more expensive part of the business, which in previous articles is called “Fastned projects”, where most of the employees work, can get a significant cash flow from the retail activities. This cash flow lowers the need for external financing and enables a further acceleration of the construction of new stations.

Fastned is still a startup. And like any startup, it burns money before it becomes profitable. The next table shows the relationship between turnover and combustion rate. It also illustrates the effect of coronavirus-related stagnation on the road to profitability.

Year Income Combustion rate as a revenue factor
2017 € 530,667 10
2018 € 1,638,000 4
2019 € 6,398,000 1.9
2020 € 6,890,000 1.8
2021 € 12,400,000 1.5

With a turnover of half a million euros and a combustion factor of 10, the loss will be five million. The years with a turnover of over € 6 million also saw a loss of over € 12 million. The result for 2021 has not been announced yet, the combustion rate of 1.5 is an estimate. A combustion rate of 0 implies break-even, which is expected to be reached by the end of this year. Combustion rate is partly a management decision. Faster growth results in a higher combustion rate. Limiting growth to the money generated by charging activities, just as it is possible after 2022, can lower the combustion rate to zero. For the sake of transition, the combustion rate should not reach zero for several more years.

Station development

After all these financial deductions and speculations based on a non-financial quarterly shareholder update letter, let’s see what Fastned had to tell us about the company’s activities, expectations and forecasts.

The year 2022 will be the year of tenders in France and Germany. In France, there will be tenders from private toll road companies in their 360 motorway service areas. Fastned must gain a fair share to create highway coverage. Next to the toll roads, large parts of France are served by public roads. Along these roads, which often affect city limits, if not city centers, Fastned can find many more first-class places for charging stations.

The French Fastned organization has proven to be really good at getting stations built. From acquisition of location to opening, two years is a normal period. In early 2021, Fastned won a tender at 9 locations in eastern France. Nine months later, six of these sites are operational. The team had to start building the infrastructure to cut back on bureaucracy, find suppliers and hire contractors. This is a team that can open all over France for electric car drivers using Fastned stations.

The German federal government is writing tenders for 1,100 locations. Two hundred of these are dedicated motorway sites, the other nine hundred are search areas where the tender winner must find a location for a highly subsidized charging station. These 1,100 locations are offered in many different sizes. There are 6 highway lots and over twenty lands.

€ 2 billion is available for the operation and investment of these new stations in the first years of operation. The government dictates strict pricing schemes in return for these subsidies. Fastned will try to win a number of these tenders. This does not stop Fastned from looking for prime locations. Location can trump grants, as we see with revenue and leverage of Ionity compared to Fastned.

The Flemish part of Belgium is “in your pocket.” With the current seats won, one can travel along the Flemish motorways from Fastned station to Fastned station. More support in urban and rural areas is the next task for Fastned Belgium. The French-speaking southeastern part of Belgium is still a white area on all charge cards. It has a very green environment and transport minister, but somehow he is not aware that chargers are essential for clean transport.

For Denmark, Poland, the Czech Republic, Austria, Italy, Spain and Portugal there is no news. In the comments, you can tell what is likely, or should be, the seventh country where Fastned opens stations.

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