NextEnergy Solar Fund Ltd · LSE:NESF
NextEnergy Solar Fund — FY2019 Earnings Presentation
33 slides from NextEnergy Solar Fund's earnings presentation, Jun 18, 2019
Slide 1: NextEnergy Solar Fund Limited – Results for the period ended 31 March 2019
NextEnergy Solar Fund Limited Results for the period ended 31 March 2019 Analyst Presentation – 18 June 2019
Slide 2: Agenda – Presented by NextEnergy Capital, Investment Adviser
Results for the Financial year ended 31 March 2019 Agenda – Presented by NextEnergy Capital, Investment Adviser MICHAEL BONTE-FRIEDHEIM • Investment Update – Michael Bonte-Friedheim NEC Founding Partner & CEO ALDO BEOLCHINI NEC Managing Partner & CIO • Financial Results – Aldo Beolchini • Q&A - Appe
Slide 3: Investment Update
Investment Update
Slide 4: Investment Highlights
Results for the Financial year ended 31 March 2019 Investment Highlights 31 March 2019 ◼ Investment portfolio of 87 solar PV assets amounting to 691MWp capacity installed NAV – £645m NAV/share – 110.9p ◼ Acquired 24 new UK solar assets during the last twelve months GAV – £1,014m ◼ Fully deploy
Slide 5: Continuous Operating Outperformance
Results for the Financial year ended 31 March 2019 Continuous Operating Outperformance ◼ NESF’s portfolio consistently generates more Asset Assets Irradiation Generation electricity than its Period Management acquisition budget (+5.0% monitored (delta vs. budget) (delta vs. budget) Alpha(1) since IP
Slide 6: Portfolio Assets
Results for the Financial year ended 31 March 2019 Portfolio Assets ◼ NESF’s 87 PV assets represent 691MW of installed capacity and £896m of invested capital ◼ NESF acquired project rights for subsidy free projects representing 172MW Project rights: In construction: 6
Slide 7: Current UK Pipeline
Results for the Financial year ended 31 March 2019 Current UK Pipeline ◼ NEC is negotiating Tier 1: Letters of Intent multiple UK projects for NESF Power plants location Incentive regime Plant capacity Status ◼ Advanced negotiation pipeline amounts to Multiple sites No Subsidies 584MWp Planning 584M
Slide 8: UK Energy Market Prices
Results for the Financial year ended 31 March 2019 UK Energy Market Prices ◼ Current UK long-term Forecast UK Power Price (Real 2019 - £/MWh) (1) power price forecast implies an average growth rate of c.(0.3)% in real terms between 2019 and 2039 ◼ As at March 2019, c.69% of NESF revenues are contrac
Slide 9: Italy Energy Market Prices
Results for the Financial year ended 31 March 2019 Italy Energy Market Prices ◼ Current Italian long-term Forecast Italy Power Price (Real 2019 - €/MWh) (1) power price forecast implies an average growth rate of c.0.3% in real terms between 2019 and 2039 Notes: (1) Source: Independent Energy Market
Slide 10: Portfolio’s Secured Power Prices
Results for the Financial year ended 31 March 2019 Portfolio’s Secured Power Prices ◼ NEC continues to Apollo - ROC Assets (226 MW) Radius and NIBC assets (112 MW) Output Locked Locked Price (£/MWh) Output Locked Locked Price (£/MWh) secure higher power Summer 2019 88.9% 56.0 88.9% 56.0 prices throu
Slide 11: Strategic Focus 2019/20
Results for the Financial year ended 31 March 2019 Strategic Focus 2019/20 ◼ Optimisation of revenues and reduction of operating expenses of current portfolio of assets ◼ On-boarding and integration of acquired portfolios ◼ Construction of subsidy free assets in the UK ◼ Opportunistic acquisition of
Slide 12: Financial Results
Financial Results
Slide 13: Financial Highlights
Results for the Financial year ended 31 March 2019 Financial Highlights ◼ Net Asset Value grew from £605m to £645m. NAV per share increased to 110.9p ◼ First Issuance of Preference Shares for £100m on 13 November 2018 following shareholder approval on 8 November 2018 Proceeds applied to repayment
Slide 14: Track Record since IPO
Results for the Financial year ended 31 March 2019 Track Record since IPO 14
Slide 15: Solis Portfolio
Results for the Financial year ended 31 March 2019 Solis Portfolio ◼ High risk-adjusted returns Business Case: Solis Acquisition and performance (9.4% at acquisition) ◼ Acquisition of eight solar plants in Italy in December 2017 for a total installed capacity of 34.5MWp and total value of €132m ◼ Po
Slide 16: Portfolio Valuation
Results for the Financial year ended 31 March 2019 Portfolio Valuation Discount rates ◼ 6.5% unlevered discount rate for UK operating solar assets (2018: 6.75%) ◼ Up to 1.0% risk premium for the levered assets/portfolios Resulting levered discount rates of up to 7.50% for levered assets ◼ Discount
Slide 17: NAV and Portfolio Valuation Bridges
Results for the Financial year ended 31 March 2019 NAV and Portfolio Valuation Bridges 17
Slide 18: Debt Financing Strategy
Results for the Financial year ended 31 March 2019 Debt Financing Strategy ◼ NESF has total debt facilities outstanding of £269m which represent ◼ Fully amortising facility (£149m outstanding) expiring in 2035 36% of GAV, of which with unique NAV-enhancing features (grace period, DSRF, £70m is Santa
Slide 19: Robust Dividend Cover
Results for the Financial year ended 31 March 2019 Robust Dividend Cover ◼ During the period the Company generated cash income of £57.1m, had net operating costs of £6.7m and paid a preference shares dividend of £1.8m ◼ Issuance of preference shares has improved cashflows by £4.5m in the period ◼ Fo
Slide 20: Summary Income Statement
Results for the Financial year ended 31 March 2019 Summary Income Statement 1 April 2018 to 1 April 2017 to 31 March 2019 31 March 2018 £m £m Income 55.6 41.1 Movement in Investment Portfolio value 24.5 (2.9) Net Income 80.1 38.2 Total expenses (8.6) (6.3) Finance income 0.0 0.3 Profit and comprehen
Slide 21: Summary Balance Sheet and Cash Flows
Results for the Financial year ended 31 March 2019 Summary Balance Sheet and Cash Flows During the period 31 March 2019 31 March 2018 Balance Sheet £m £m ◼ NAV attributable to ordinary shareholders Investment Portfolio 616.4 481.4 increased by £40m Residual net assets of Holding Companies 106.4 44.8
Slide 22: Q&A – Appendix
Q&A – Appendix Leading Solar Asset Manager
Slide 23: NESF Overview
Results for the Financial year ended 31 March 2019 NESF Overview NextEnergy Solar Fund ❑ Attractive acquisition values sourced by NextEnergy Capital ❑ Operational outperformance supported by WiseEnergy ensuring optimal asset management ❑ Targeting a quarterly dividends linked to UK RPI (6.65p/share
Slide 24: ESG KPIs
Results for the Financial year ended 31 March 2019 ESG KPIs 31 March 2019 ◼ The mission of the NEC Group is to generate a more sustainable future by leading the transition to clean 184,000 UK homes energy powered for one year (equivalent to Northampton and ◼ Following an acquisition, WiseEnergy mo
Slide 25: Capital Raise and Deployment
Results for the Financial year ended 31 March 2019 Capital Raise and Deployment ◼ During the period NESF has fully deployed all the capital raised through equity raising and debt financing ◼ During the period NESF issued an additional 6.0m new shares totalling £6.6m in the form of scrip dividends ◼
Slide 26: Investment Portfolio Diversification
Results for the Financial year ended 31 March 2019 Investment Portfolio Diversification 26
Slide 27: UK Energy Market
Results for the Financial year ended 31 March 2019 UK Energy Market Power Prices ◼ During the year, the wholesale day ahead power market in the UK experienced a downward movement from £57/MWh in March 2018 to £44/MWh in March 2019 ◼ The Company’s flexible PPA framework allowed NESF to lock in higher
Slide 28: Italy Energy Market
Results for the Financial year ended 31 March 2019 Italy Energy Market Power Prices ◼ During the year, the wholesale day ahead power market in Italy experienced an downward movement from €57/MWh in March 2018 to €53/MWh in March 2019 Historical Italy Power Prices (€/MWh) (1) (1) Source: Gestore del
Slide 29: NAV Sensitivities
Results for the Financial year ended 31 March 2019 NAV Sensitivities ◼ The long-term sensitivity analysis highlights the % change in the investment portfolio value (£616m) as well as the subsequent impact on NAV per share ◼ As of 31 March 2019, the remaining weighted average lease life of the Compan
Slide 30: Share Price vs NAV per Share
Results for the Financial year ended 31 March 2019 Share Price vs NAV per Share ◼ NESF share price outperformed the FTSE All-Share by 13.8% since IPO ◼ Shareholder total return was 11.8% for the year ended 31 March 2019 (9.5% annualised since IPO) 30
Slide 31: Preference Shares
Results for the Financial year ended 31 March 2019 Preference Shares ◼ An issuance of £200m is ◼ On 8 November 2018, the Shareholders approved the issuance of £200m of Preference Shares. The expected to increase Company issued the first tranche of £100m and is expecting a subsequent issue by the end
Slide 32: Summary of Debt Financing Terms
Results for the Financial year ended 31 March 2019 Summary of Debt Financing Terms ◼ Total debt outstanding at period end was £269m which represents a gearing of 27% (36% when including preference shares) ◼ Average Cost of Debt is 3.2% ◼ NESH V entered into a 15 year FX hedging arrangement with Inte
Slide 33: Important Notice
Important Notice This document is issued by Next Energy Capital Limited (“NEC”), which is authorised and regulated by the UK Financial Conduct Authority (“FCA”) with registered number 471192. The contents of this document are strictly private and confidential and accordingly may not be published, re