Greencoat Renewables Plc · EURONEXT:GRP
Greencoat Renewables — FY2018 Earnings Presentation
34 slides from Greencoat Renewables's earnings presentation, March 2019
Slide 1: Greencoat Renewables PLC 2018 Full Year Results and Placing
Greencoat Renewables PLC 2018 Full Year Results and Placing STRICTLY CONFIDENTIAL
Slide 2: Disclaimer
Disclaimer This information presentation document (“this document”) has been prepared and issued by Greencoat Renewables PLC ("GRP") for information purposes only in relation to the proposed placing of securities in the capital of GRP (the “Placing”) and admission to such shares to AIM, a market ope
Slide 3: Investment manager – Key Personnel
Investment manager – Key Personnel Bertrand Paul Gautier O’Donnell • 26+ years operational, investment and • 16+ years investment experience, finance experience, of which of which 12+ in renewables 9 exclusively renewables • 10 years in the Irish energy sector • Member of Greencoat Capital Investmen
Slide 4: Investment summary
Investment summary KEY CHARACTERISTICS 6c REFIT 384MW PIPELINE TRACK Euro denominated, Strong Irish Strong Irish RECORD Seed portfolio of target 6c regulatory regime pipeline, Greencoat Capital 137MW and progressive guaranteeing underlined by has a demonstrated 247MW of dividend policy, index linked
Slide 5: FY 2018 Results summary and subsequent events
FY 2018 Results summary and subsequent events • Power generation of 440.5 GWh; 9% below budget primarily due to low wind speeds • Net cash generation of €23.1m1 • Paid dividends of 6c; Dividend cover for period was 1.3x1; 2019 Target dividend of 6.03c • Net Asset Value at 31 December 2018 of €392.8
Slide 6: Financial and Operational Performance
SECTION 1 Financial and Operational Performance STRICTLY CONFIDENTIAL
Slide 7: Greencoat Renewables – simple and robust business model
Greencoat Renewables – simple and robust business model Greencoat Renewables Model 2018 Convert wind/solar to energy 12 wind farms 384MW Total 2018 investment €111m Equity Electricity sold to grid 440.5 GWh €491m(3) Group net FCF Debt €23.1m (1) Cash €5.2m Reinvestment to grow NAV €17.9m (2) Dividen
Slide 8: Portfolio overview
Portfolio overview Diversified portfolio underpinned by 11+ years’ REFIT and strong operating performance Assets by MW Key Wind Farm Turbines REFIT end % Interest GRP Net MW capacity 1 Knockacummer Nordex Dec 2027 100% 100.0 2 Killhills Enercon Mar 2030 100% 36.8 2 5 3 Glanaruddery Vestas Dec 2032 1
Slide 9: Operational performance
Operational performance Wind Farm Period 2018 2018 Variance Key Comments Budget Actual (GWh) (GWh) Ballybane Nov - Dec 24.7 27.0 9% • Acquisitions made in Q1/ Q2 (Lisdowney, Glanaruddery, Glanaruddery May - Dec 67.9 56.2 -17% Tullynamoyle 11) particularly impacted by seasonality of below Lisdowney M
Slide 10: Financial performance (1/2)
Financial performance (1/2) For the year ended Group and wind farm SPV cashflows 31 December 2018 €’000 Net cash generation (1) 23,142 Dividends paid (20,847) PSO working capital and other movements (2) (31) Acquisitions (3) (381,556) Acquisition costs (1,933) Equity issuance 111,100 Equity issuance
Slide 11: Financial performance (2/2)
Financial performance (2/2) For the year ended Net Cash Generation – Breakdown 31 December 2018 €’000 Revenue (1) 38,956 Operating expenses (8,902) VAT and Tax (647) Wind farm cashflow 29,407 Management Fee (2,766) Operating expenses (1,095) Ongoing finance costs (2,887) VAT 484 Other (1) Group cash
Slide 12: Net asset value
Net asset value Operating Acquired Movement in Movement in other Movement in Considerations Investments in Movement in cash Closing NAV NAV project level DCF (Group and wind relevant aggregate new assets assets/liabilities 31 Dec 2018 31 DEC 2017 debt valuations farm SPVs) Group debt €260.8m €389.2m
Slide 13: 2018 Acquisitions
SECTION 2 2018 Acquisitions STRICTLY CONFIDENTIAL
Slide 14: Secondary market overview and acquisitions
Secondary market overview and acquisitions Secondary Market 41 individual assets priced since IPO • Highly active Irish secondary onshore 10 acquired assets wind market since summer 2017 • High quality of assets brought to market Coillte Local Developers • Greencoat Renewables has been successful 24
Slide 15: Coillte portfolio – a landmark transaction closed in Dec 2018
7 Coillte portfolio – a landmark transaction closed in Dec 2018 A Raheenleagh wind farm – 35.2MW (50%) • County Wicklow – 11 Siemens 3.2MW turbines • Co-owned with ESB • Project operational since November 2016 C B B Cloosh Valley wind farm – 108MW (50%) • County Galway – 36 Siemens 3.0MW turbines A
Slide 16: Outlook & Pipeline
SECTION 3 Outlook & Pipeline STRICTLY CONFIDENTIAL
Slide 17: Continued renewables build out in Ireland
Continued renewables build out in Ireland Irish wind generation remains a large market and continues to see strong growth Republic of Ireland Cumulative Installed Wind Power 2014-2019 (MW) 1.3GW installed between 400/500MW additional capacity 4,500 2014 and 2018 anticipated in 2019 • Substantial gro
Slide 18: Robust and executable pipeline in Ireland
7 Robust and executable pipeline in Ireland Under • Exclusivity agreed to acquire operating wind farm (12 years + REFIT) Exclusivity • Headline Enterprise Value of €76m • Transaction expected to close end of March 2019 in Ireland • Continued high level of M&A activity Active Pipeline • Currently inv
Slide 19: Capital Structure
SECTION 4 Capital Structure STRICTLY CONFIDENTIAL
Slide 20: Capital structure
Capital structure 1000 €883m Equity 800 Group level debt GAV (€m approximate) Long term, fixed rate Project Finance debt 600 400 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2018 2019 Lisdowney Tullynamoyle II Glanaruddery €111m Knocknalour Ballybane Coillte Transaction acquisition acquis
Slide 21: Conclusion
SECTION 5 Conclusion STRICTLY CONFIDENTIAL
Slide 22: Delivering on strategy – milestones since IPO
Delivering on strategy – milestones since IPO IPO ATTRACTIVE DIVIDEND: • • Total annual dividend of 6c paid for 2018 financial year Robust dividend cover of 1.3x in low wind year, demonstrating resilient business model ACQUISITION OF VALUE-ACCRETIVE ASSETS: Assets: 2 wind farms Capacity 137MW • •
Slide 23: Summary and Placing
Summary and Placing KEY CHARACTERISTICS 6c REFIT 384MW PIPELINE TRACK RECORD Euro denominated, target Strong Irish regulatory Seed portfolio of Strong Irish pipeline, Greencoat Capital has a 6c progressive dividend regime guaranteeing 137MW and 247MW of underlined by REFIT2 demonstrated track record
Slide 24: Appendix
Appendix STRICTLY CONFIDENTIAL
Slide 25: Irish renewable energy policy underpinning FCFs
Irish renewable energy policy underpinning FCFs REFIT protects Greencoat Renewables from wholesale power price volatility 90 80 70 €/MWh 60 50 40 c.100% REFIT NO EFFECT ON NAV REFIT/MERCHANT MIX PARTIAL EFFECT MERCHANT PERIOD CASHFLOW INSULATED FROM POWER 30 2019 2020 2021 2022 2023 2024 2025 2026 2
Slide 26: Greencoat Renewables – uncorrelated returns
Greencoat Renewables – uncorrelated returns 2.61c 1.50c 1.50c 1.50c 1.50c March May August Nov Feb Dividend Dividend Dividend Dividend Dividend • TSR of 18.2% (1.09 share price) 120 since IPO 115 (11.5% annualised) 110 • Share price broadly in the 105 106c – 109c range • Dividends Paid 100 of 8.61c
Slide 27: Robust dividend cover (illustrative)
Robust dividend cover (illustrative) Price sensitivity Wind sensitivity GUARANTEED 1/50 YEAR MINIMUM PRICE LOW WIND Dividend cover / (-20%) reinvestment c. €80 per MWh 20% fall in revenue 1/50 low wind year Revenue 64 No impact on revenue Operating Expenditure (20) for REFIT period Free Cashflow 44
Slide 28: NAV Underpinned By REFIT FCFs
NAV Underpinned By REFIT FCFs Windfarm valuation approach REFIT Merchant ▪ NAV calculated by discounting projected cashflows to (up to 15 years) (15 - 30 yrs) establish a present value ▪ Post REFIT methodology – Post REFIT power price is determined using input from independent economic consultant Di
Slide 29: Ireland wind vehicle economics (illustrative)
Ireland wind vehicle economics (illustrative) Single Wind farm Wind Vehicle Dividend cover Re-investment Dividend cover Re-investment Cash Yield Dividend NAV NAV Dividend cover protects against low-wind. Reinvestment grows NAV Source: Greencoat Capital LLP – illustrative for a new wind farm asset 29
Slide 30: Datacentre growth in Ireland – corporate PPA opportunity
Datacentre growth in Ireland – corporate PPA opportunity Strong power demand growth driven by a robust pipeline of new datacentre loads Datacentre connections in Ireland • 31% of electricity use in Ireland expected to come from data centers by 2027 • Many datacenters are owned by multinational techn
Slide 31: RESS – Renewable Energy Support Scheme (REFIT successor)
RESS – Renewable Energy Support Scheme (REFIT successor) RESS provides strong growth opportunity for Irish renewable market for next 7+ years Structure • Two way “CfD” type structure Auction Auction Delivery Single Capacity Year Year Technology • Expectation for 15 year contract (GW/hrs) Technology
Slide 32: I-SEM goes live
I-SEM goes live Irish REFIT scheme I-SEM Background • I-SEM is the new market structure that was 100% introduced in October 2018 REFIT 2: Fixed REFIT 1: 15% of REFIT Balancing • Fixed price REFIT Payment • Allows Irish market to be integrated within regime 15 years: EUR 9.90 – 10.53 90% a pan-Europe
Slide 33: European renewable potential opportunities
European renewable potential opportunities • Consider enter European market • Market entry to capitalise on: • Leveraging existing Finland Netherlands Greenocat’s relationships Onshore Wind 3 GW Onshore Wind 2 GW Offshore Wind 1 GW Solar 3 GW France • Strategic approach to M&A, Onshore Wind 13 GW So
Slide 34: Investment Manager – Greencoat Capital
Investment Manager – Greencoat Capital With c. €4bn AUM and multiple fund strategies (listed wind, unlisted solar) Acquisition Operational Irish presence expertise experience • 45 wind farms and >1.2GW • 1.2GW capacity and 6 years • Dublin office since 2009 capacity acquired experience in wind • Man