Fastned, Grow As Fast As You Can — Avoid Making Profits As Long As You Can
Fastned did well in 2022. It was a strong recovery from the market distortions caused by Covid-19 and the Ukraine War. If the company is doing this well in the face of such adversity, what would a more normal year look like?
Just as was the case with Amazon and Tesla, fast growers should postpone profitability as long as possible. Not profitability, but growth, is the metric to measure these kind of companies. The first milestone is the revenue covering operational activities. It is not that Fastned would be profitable without growth, but autonomous growth would make it profitable in a few quarters.
The second indicator is when the operational activities are break-even. When not only COGS and OPEX, but also D&A and operational financing costs can be covered by revenue. This is when a normal company has to start paying taxes. This might happen later this year. Back to the annual report and the numbers that made the light at the end of the tunnel become so much brighter. With energy prices being all over the map, increase in revenue is not really very interesting. Suffice it to say the margin per kWh sold was more or less constant. What is of interest is the growth in kWh sold. An increase in sales of 148% is impressive.As you can see, both the revenue and the costs grew in 2022. Revenue nearly tripled and costs doubled.
This guessing game hints at revenues of €60 million in 2023 and >€100 million in 2024. That is in line with previous growth and therefore no big surprise. But what about profits? In 2022, there was €12 million in network expansion costs. With more stations and more teams in more countries, I will not be surprised if this grows to €24 million in 2024. Profit in 2024 is possible, but with faster growth, it would become more likely. But the bottleneck is the acquisition of prime locations.
The next goal is to add six more countries to the network. Luxembourg, Ireland, and Denmark are perhaps not very impressive, but Spain, Italy, and Poland are three large, impressive countries in which to build charging infrastructure. Each country needs its own new team. Five new teams without local revenue is the foreseeable future.
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