Renewables Infrastructure Group Limited GBP Red.Shs · LSE:TRIG
Renewables Infrastructure Group Limited GBP Red.Shs — The Renewables Infrastructure Group — H1 2020 Earnings Presentation
42 slides from Renewables Infrastructure Group Limited GBP Red.Shs's earnings presentation, August 2020
Slide 1: Interim Results Presentation: Six Months to 30 June 2020
The Renewables Infrastructure Group Interim Results Presentation: Six Months to 30 June 2020 Generating Sustainable Value. Hill of Towie, Scotland trig-ltd.com
Slide 2: Important Information
Important Information This document has been issued by and is the sole responsibility of The Renewables Infrastructure Group Limited ("TRIG"). This document has not been approved by a person authorised under the Financial Services & Markets Act 2000 ("FSMA") for the purposes of section 21 of FSMA. T
Slide 3: Generating Sustainable Value. Overview
Generating Sustainable Value. Overview Purpose: To generate sustainable returns from a diversified portfolio of renewables infrastructure that contribute towards a zero-carbon future ▲ Diverse independent Board Portfolio construction1 to ▲ Sets and monitors adherence to the enhance resilience & stra
Slide 4: Strong track record over seven years
Strong track record over seven years Sustainable dividend growth, continued financial outperformance, scaling portfolio Dividend increased by 13% over 7 years NAV per share increased by 15% over 7 years 2020 target1 reaffirmed 160p NAV total return since IPO 8%1 6.76p per share 140p 120p 100p 80p 60
Slide 5: Contents
Contents Section Slide Introduction and Highlights 6 Financial Highlights & Valuation 9 Operations & Sustainability 15 Portfolio & Market 20 Concluding remarks 24 Appendices 26 Contacts / Important Information 41 5 trig-ltd.com
Slide 6: TRIG in H1 2020
Generating Sustainable Value. TRIG in H1 2020 ▲ Resilient financial and strong operational performance, in a challenging environment Powering 1 million homes with clean energy2 impacted by Covid-19, benefitting from portfolio diversification 1.1 million tonnes of CO2 avoided p.a.2 ▲ Target 2020 Divi
Slide 7: Highlights H1 2020
Highlights H1 2020 Robust performance amidst the pandemic Strong generation ▲ Production nearly 10% above budget ▲ Lock-downs have had limited impact on asset availability and construction program due to robust contingency planning ▲ Grid curtailments mitigated through participation in the UK’s bala
Slide 8: Highlights H1 2020 (continued)
Highlights H1 2020 (continued) Robust performance amidst the pandemic 113.0p 1.0p NAV per share; -2.0p Earnings per share (Dec 2019: 115.0p) (H1 2019: 9.3p) £281m £120m Investments made Equity raised (H1 2019: £347m) (H1 2019: £302m) 1. Altahulion, Northern Ireland Past performance is not a reliable
Slide 9: Financial highlights & valuation
Financial highlights & valuation Penare Farm, England trig-ltd.com
Slide 10: Portfolio valuation bridge
Portfolio valuation bridge Valuation movement in the six months to 30 June 2020 £2,250m 281.3 98.9 £2,000m 56.0 (78.2) 29.2 £1,750m (123.1) £1,500m £1,250m £1,000m 1,745.2 1,948.3 2,009.3 £750m £500m £250m £m 31-Dec-19 New Cash Rebased Change in Movement in Foreign Balance 30-Jun-20 Valuation Invest
Slide 11: Valuation I – power prices
Valuation I – power prices Power prices (-£123.1m) TRIG blended power curve1 70 ▲ Power price forecasts down – most significantly in the 60 Real 2019 GBP/MWh near term, driven by Covid-19 impact on power 50 demand 40 ▲ Longer-term reduction reflects lower future gas and 30 other commodity price fore
Slide 12: Valuation II – other key items
Valuation II – other key items Valuation discount rates (+£29.2m) ▲ Reduced by 0.2% reflecting observations of movements in market discount rates Mainstreaming of the asset class ▲ Blended rate now 7.0% (31 Dec 2019 7.25%) 10% 9% 8% Foreign exchange movement (net +£22.4m) 7% 6% ▲ FX gain £56.0m, off
Slide 13: Financial highlights
Financial highlights For the six months ended 30 June 2020 £2,009m 6.76p 0.96% Portfolio Value, +15% FY 2020 Dividend per share Ongoing charges target2 reconfirmed, +1.8% percentage (Dec 2019: £1,745m) (2019: 6.64p) (H1 2019: 0.98%) 1.25x £50m 2.2x Project finance debt Cash dividend cover Dividend c
Slide 14: Investment commitments
Investment commitments Equity funding and investment activity ▲ Investments made in H1 2020 – £281m across Merkur, Blary Hill, Fujin incremental investment & Solwaybank construction funding ▲ Share issuance – 100m shares issued under tap authority raising £120m. Strongly oversubscribed ▲ Outstanding
Slide 15: Operations & sustainability
Operations & sustainability First turbine being erected at Solwaybank, Scotland trig-ltd.com
Slide 16: Production
Production Geographic diversification continues to benefit the portfolio 2020 Jan-Jun generation: 2,141GWh1 ▲ 50% increase over H1 2019 ▲ Total generation 9.3% above budget ▲ GB wind, Scandinavian wind and UK solar performing well above budget 2020 Jan-Jun generation by region Electricity Performanc
Slide 17: Weather
Weather Geographic diversification continues to benefit Wind and solar variation to long-term average 80% 60% 40% 20% 0% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 -20% -40% -60% -80% GB Wind Ireland Wind France Wind Scandinavia Offshore Solar & Storage Portfolio Total generation 9.3% above budget Mo
Slide 18: Value enhancements
Value enhancements Proactive management continues to preserve and enhance value Value preservation Condition monitoring to ensure timely maintenance. Proactive main component management key for maintaining availability during pandemic Commercial enhancements Early participation in National Grid’
Slide 19: Sustainability
Sustainability Continued progress towards TRIG’s Four Sustainability Goals To mitigate climate ▪ 640k tonnes of CO2 emissions avoided in change H1 2020 To positively impact the ▪ Additional Covid-19 recovery support communities we work in brings 2020 community support to £1.4m To preserve the natura
Slide 20: Portfolio & market
Portfolio & market Roussas Claves, France trig-ltd.com
Slide 21: Diversified portfolio
Diversified portfolio 1.5GW net capacity / 73 projects By Jurisdiction / Power Market1,2 Ten largest assets1 Jun 20 24% 28% 4% 4% 13% 10% 17% Dec 19 24% 26% 4%4% 11% 18% 15% Jadraas 10% Dec 18 29% 39% 4% 5% 11% 12% Merkur England & Wales Scotland Norther Ireland Republic of Ireland 9% France Sweden
Slide 22: Policy drivers remain strong
Policy drivers remain strong The Green recovery opportunity European Union – energy transition ▲ European Green Deal and Next Generation EU recovery fund contributing to the energy transition ▲ Range of energy transition funding including €25bn into renewables between 2021 and 2027 ▲ EU Hydrogen str
Slide 23: Forecast new capacity of 90GW by 2030
Forecast new capacity of 90GW by 2030 New capacity from a broad range of revenue and market types Revenue type Largely subsidised markets Largely unsubsisdised markets Key Offshore & technology Onshore Wind Offshore Wind Onshore Wind Solar focus Onshore Wind1 25 40 35 32 Estimated 18 30 26 28 capaci
Slide 24: Concluding remarks
Concluding remarks Hill of Towie, Scotland trig-ltd.com
Slide 25: TRIG: Generating Sustainable Value.
TRIG: Generating Sustainable Value. Resilient performance despite economic uncertainties Solid performance ▲ Resilient financial performance in a challenging environment, benefitting from diversification ▲ Strong generation performance with good availability ▲ Low power prices tempered by subsidies
Slide 26: Appendices
Appendices Inside the nacelle at Jadraas, Sweden trig-ltd.com
Slide 27: Summary June 2020 Financial Statements
Summary June 2020 Financial Statements Resilient Results - NAV per share down 2.0p driven by impact of Covid-19 Income Statement Balance Sheet Cash Flow Statement Six months to Six months to Six months to Six months to 30 June 2019 30 June 31 December 30 June 2019 30 June 2020 30 June 2020 2020 2019
Slide 28: Stakeholder engagement: Blary Hill case study
Stakeholder engagement: Blary Hill case study Active engagement with local supply chain In the period and during lockdown, the Blary Hill project held its first virtual Meet-the-Buyer event Opportunity to connect with local businesses capable of working on the project Strong business interest
Slide 29: Valuation – Key assumptions
Valuation – Key assumptions Power price reductions partly offset by reduced discount rates As at 30 June 2020 As at 31 December 2019 Discount Rate Portfolio return 7.00% 7.25% Power Prices Weighted by market Based on third-party forecasts Based on third-party forecasts UK 2.75% 2.75% Long-term Infla
Slide 30: NAV sensitivities
NAV sensitivities Based on portfolio at 30 June 2020 -30000.0% -20000.0% -10000.0% 0.0% 10000.0% 20000.0% 30000.0% Discount rate +/- 0.5% -3.6% 3.9% Output P90 / P10 (10 year) -11.4% 10.2% Power price -/+ 10% -6.6% 6.8% Inflation -/+ 0.5% -4.1% 4.4% Operating costs +/- 10% -4.6% 4.5% Exchange rate -
Slide 31: Portfolio (1) – Constructing a balanced portfolio
Portfolio (1) – Constructing a balanced portfolio Understanding the range of revenue types available ▲ FiT & CFD contracts (France, Ireland, Germany and UK) typically have subsidy revenues of 15-20 years then market revenues for the balance of a project’s life o Least revenue risk (early on), scope
Slide 32: Portfolio (2) – Revenue profile
Portfolio (2) – Revenue profile Medium-term project-level revenues mainly fixed and indexed Project revenue by type PPA Market Revenue 15% Indexed Fixed PPAs & FiTs PPA Market Revenue 52% at Floor 5% ROC Recycle and Other 3% Next 12 Months1 Indexed ROC Buyout 25% 1. Project revenue expected for 12 m
Slide 33: Renewables deployment
Renewables deployment Renewables continuing to increase as a percentage of overall generation Forecast wind and solar generation proportion Forecast low-carbon generation proportion GB 27% 52% 54% GB 62% 75% 80% RoI & NI 35% 57% 68% RoI & NI 42% 65% 74% France* 10% 22% 39% France 91% 96% 96% Germany
Slide 34: Risks relating to the outcome of UK negotiations with the EU
Risks relating to the outcome of UK negotiations with the EU Outcome of negotiations with EU on a trade deal expected to have low impact Key EU trade deal risks Key Mitigants • Managers well resourced Workforce skills shortage • Wide range of subcontractors in place mitigates individual asset risks
Slide 35: The Team
The Team Experienced Management Independent Board Helen Mahy CBE (Chair) Investment Manager Operations Manager Key roles: Key roles: Shelagh Mason Overall responsibility for day-to-day Providing operational management (SID) management services for the portfolio Sourcing and approving new inves
Slide 36: InfraRed Capital Partners – Investment Manager
InfraRed Capital Partners – Investment Manager Over 25 years’ pedigree in infrastructure Key statistics across infrastructure and real estate London 25 year $12bn 17 (Infrastructure & track record equity funds Real Estate) Seoul managed raised New York (Investors) (Infrastructure) Hong Kong Mexico (
Slide 37: RES – Operations Manager
RES – Operations Manager 38+ years experience in renewables 38 years 270+ track record projects delivered worldwide 2500+ 18GW employees developed and/or constructed 6GW 300MW Operational assets energy storage projects supported World’s largest independent renewable energy company Operating acro
Slide 38: Approach to gearing
Approach to gearing Disciplined approach Term Project Debt Gearing1 TRIG’s portfolio at 30 June 2020 ▲ Limited to 50% of portfolio enterprise value Project Category typically (Younger = <10yrs) Average % of # of ▲ Fully amortising within the subsidy period available gearing1 portfolio projects2 ▲ Li
Slide 39: Portfolio construction: power price sensitivity maintained
Portfolio construction: power price sensitivity maintained Incorporating subsidy free projects without increasing portfolio sensitivity ▲ Projects comprise a range of Fit, CfD and unsubsidised projects, Impact on equity return of change in power price1 with different gearing levels, across the UK, S
Slide 40: Short-run marginal cost supply curve (merit order)
Short-run marginal cost supply curve (merit order) Key elements of the power price: natural gas and Gas-fired power tends to set the marginal price carbon prices £/MWh £/MWh Min. Average Max. 100 Demand Demand Demand 70 60 Peaking 80 plant 50 Power price 60 40 Gas Coal 30 40 Biomass & 20 Interconnec
Slide 41: Key facts
Key facts Fund Structure ▲ Guernsey-domiciled closed-end investment company Performance ▲ Dividends to date paid as targeted for each period ▲ NAV per share at 30 June 2020 of 113.0p Issue / Listing ▲ Premium listing of ordinary shares on the Main Market of ▲ Market Capitalisation c. £2.2bn at 30 Ju
Slide 42: Contacts
Contacts Investment Manager Other Advisers InfraRed Capital Partners Limited Administrator / Company Secretary Registrar Level 7, One Bartholomew Close, Barts Square, Aztec Financial Services (Guernsey) Ltd Link Asset Services (Guernsey) Ltd London, EC1A 7BL East Wing Mont Crevelt House Trafalgar Co
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