Audax Renovables Sa · BME:ADX
Audax Renovables Sa — Investor Day (May 2019)
53 slides from Audax Renovables Sa's investor day presentation, May 28, 2019
Slide 1: Introducing you to Audax Renovables
Introducing you to Audax Renovables 28th May 2019
Slide 2: Today's agenda
Today’s agenda 1 Audax Renovables: our growth story 2 Market opportunity 3 What makes us special? 4 Our strategic roadmap for 2022 5 Q1 2019 results 6 Conclusions and Q&A 2
Slide 3: Today's presenters
Today’s presenters José Elías – Founder, Chairman & Majority Shareholder Eduard Romeu – Deputy Chairman & CFO Anabel López – General Manager 3
Slide 4: Audax Renovables in a nutshell
Audax Renovables in a nutshell #1 energy supplier, uniquely positioned to lead the energy transition in Europe ✔ Leading ✔ Privileged ✔ Sound ✔ Poised to deliver independent access to the financial throughout supplier most efficient foundations international in Iberia source of energy footprint Supp
Slide 5: Vision, mission and responsibilities
To be a leader entails taking on certain responsibilities, complying with regulatory requirements and preserving key values Our vision… Honest relationship with Independent listed power supplier with a our stakeholders disruptive business model opting for innovation and transparency Our mission… Soc
Slide 6: Audax Renovables: our growth story
1 Audax Renovables: our growth story
Slide 7: Audax Renovables today
Audax Renovables today A successful and disruptive alternative energy supplier Phase I Phase II Organic growth Internationalisation and inorganic growth Buys 70.86% stake Unieléctrica integration ~€1.0bn in Fersa Energías Renovables S.A. Signs the largest solar Market cap.(1) PV contract (PPA) in (c
Slide 8: Two key milestones which defined what Audax is today
Two key milestones which defined what Audax is today How we sell electricity The source of the electricity we sell 2013 2016 Spanish unemployment Spanish Risk premium (b.p.) Wind and Solar PV LCOE 26.1% (29%) (60%) 431 24.8% 280 21.4% 151 293 19.9% 2010 2011 2012 2013 2010 2011 2012 2013 2013 2018 2
Slide 9: Unique positioning within the supply business
Unique positioning within the supply business Independent mid-sized players have been gaining market share from incumbents GOLDILOCKS POSITIONING: FUTURE WINNER OF THE ENERGY TRANSITION Traditional players Small players ✔ Customised solutions ✔ Strategy: defined focus on the most profitable customer
Slide 10: One of the most competitive energy suppliers in Spain
One of the most competitive energy supplier in Spain Audax will capitalise on the disruptive PV technology to source its electricity at a materially lower cost than its direct competitors Spanish electricity generation mix (2018)(1) Merit order to set pool price Price (€/MWh) Traditional Demand ~10
Slide 11: Historical and forecast pool price
Historical and forecast pool price indicate that on average pool price should remain above 45-50€/MWh, while Audax retains the most conservative approach in its estimates Historical and forecast pool price in Spain (€/MWh, actual 2018) Hist. Avg. of ~49€/MWh 2000 2002 2004 2006 2008 2010 2012 2014 2
Slide 12: A sustainable competitive advantage
A sustainable competitive advantage A flexible sourcing strategy in line with the technology and generation mix changes to secure a long-term competitive advantage Estimated pool price vs. Audax’s sourcing strategy Decreasing Pool price mitigants within Audax’s Pool Price 2018: strategy: €64/MWh 1.
Slide 13: Key strategic advantage having anticipated the energy market transition
Key strategic advantage having anticipated the energy market transition Price Sound margin expansion through PPA contracts (€/MWh) First mover Future PPA agreements are advantage in expected to further decrease our average PPA price the Spanish contributing to the sustainability of our margin PPA ma
Slide 14: Market opportunity
[ 2 ) Market opportunity
Slide 15: Independent supply companies are quickly taking market share
Independent supply companies are quickly taking market share from traditional players Traditional players Antitrust restrictions on market concentration which cap traditional ✔ position(1) players’ activity Added value for Customised offers supported by leaner and more agile corporate ✔ customers st
Slide 16: Growing deregulated supply market with SMEs most attractive
A growing deregulated supply market soon to be fully liberalised, with SMEs representing the most attractive segment Spanish deregulated supply market overview Audax’s strategy 2017 supplied energy breakdown by type of customer Supply gross margin by segment 2017 (€/MWh) in the deregulated market In
Slide 17: Spain on track to reach EU renewable targets
Spain is on track to reach EU renewable energy generation targets… Carbon footprint Target to increase energy generation from renewable sources to 74% in 2030 reduction targets and from ~40% in 2018 in Spain increasing costs of Renewable energy generation (% of total) traditional technologies expl
Slide 18: Sharp decrease in renewable technology costs
… supported by a sharp decrease in renewable technology costs vs. other technologies… Solar PV & wind LCOE Solar PV and wind (Levelised Cost Of Energy) Solar PV technology is installations no longer need already well below expected to benefit from government subsidies in order traditional technologi
Slide 19: Solar PV is currently the cheapest source of energy
… where solar PV is currently the cheapest source of energy available Substantial reduction in global capex per MW LCOE has significantly decreased in recent years for Solar Tracking PV(1) thanks to: (€/MW) 2.4 Standardisation and lower installation costs, mainly driven by module components More fav
Slide 20: Global PPA market experiencing unparalleled growth
The global PPA market is experiencing unparalleled growth, and Spain is gaining momentum PPAs taking over PPA agreements trigger favourable financing Improved technology the role of Cost reduction structures + large corporations preference for efficiency regulatory 100% renewable energy through PPAs
Slide 21: What makes us special?
[ 3 ) What makes us special? les
Slide 22: Our key achievements
Our key achievements 1 Leading Spanish independent supplier for SMEs Seasoned management 5 team with deep industry 2 First-mover advantage in the PPA market with a knowledge and strong unique positioning to commitment to the consolidate the market company Extensive experience in 4 wind and solar PV
Slide 23: SMEs customer approach through value-added offers
1 SMEs customer approach through value-added offers increasing profitability and loyalty Audax is focused on SME customers… … and indexed tariff segment Price remains fixed over the contract’s Higher profitability of SMEs vs. other customers Fixed duration tariff Pool price risk hedged through P
Slide 24: First-mover advantage as an off-taker
2 First-mover advantage as an off-taker in the irreversible energy transition By 2022 two thirds of supplied energy will be covered by owned-asset or external-asset PPAs PPA contracted capacity (MWh) 2/3 Ideal partner for independent generators: Target supplied energy • Investment-grade rating with
Slide 25: Internationally scalable business model
3 Internationally scalable business model Domestic supply business International supply business (1) TOTAL Start activity 2009 2013 2014 2015 2016 2017 Revenue 2018 €723m €225m €949m TWh sold 2018 5.4 4.6 10.1 Rationale behind international investments Largest European market Strategy based on inorg
Slide 26: Experience in renewable generation business
4 Extensive experience in the renewable generation business with a reliable track record Audax Renovables Domestic business International business TOTAL Location & Technology Country Spain Panama France Poland Installed capacity 139 MW 66 MW 12 MW 34 MW 251 MW COD 2006 - 2010 2020e 2007 2015 Gross o
Slide 27: Our solar PV pipeline secures a cost-efficient source of energy
4 Our solar PV pipeline secures a cost-efficient source of energy Further vertical integration to ensure an efficient PPA sourcing strategy Km to Installed 59MW RTB + 221MW with grid connection Plant Location Status conn. point cap. (MW) 1 AND-CAL-I Calañas RTB 1.6 4 2 CLM-ZAR-I Escalonilla RTB 7.1
Slide 28: Integrated capabilities through EPC agreement with Audax PV
4 Highly competitive integrated capabilities through EPC agreement with Audax PV Audax group Other EPC Audax PV providers Allow Audax Renovables Key terms: management to focus on Clear price structure Framework agreement 320 MW PV In line with market with Audax PV that will core business stand
Slide 29: Solar PV: complementary business at the core of growth strategy
4 Solar PV: a fully complementary business at the core of Audax’s growth strategy to reduce sourcing costs PV installations MW installed +800 800 Framework agreement to develop up to 1.2 EPC contracts ruling the relationship additional GW of solar with PVAquila PV Tier I suppliers already identified
Slide 30: Solar PV development backed by controlled capex and financing
4 Audax’s solar PV development programme is backed by controlled capex costs and secured access to financing Unit installation costs Financing policy 1% 2% €795k/MW 790 17% 40% €795k/MW 60% 80% Debt Equity EPC contract Development package Solid rating at group level Transaction expenses Other cost
Slide 31: Multidisciplinary team with deep industry know-how
5 Multidisciplinary team with deep industry know-how Chairman & Founder José Elías Executive Vice Chairman Eduard Romeu Generation & Supply Technical Area Electricity Area Financial Area Anabel López Eladio Pascual Eduard Romeu Gas Area Rosa González Albert Joher Investor Relations Commercial Area R
Slide 32: Our strategic roadmap for 2022
4 Our strategic roadmap for 2022
Slide 33: Audax's M&A track record
Audax’s M&A track record proves our implementation of prudential principles coupled with rigorous risk management Connection Target Acquisition Date points (‘000) GWh Sourcing 2016 (Take-over of a listed n.m. (1) 312 (2) strategy generation company) & Market consolidation 2018 65 1,837 Big Energía 2
Slide 34: Key growth targets for 2022
Key growth targets for 2022 2014 Growth 2018 Growth 2022 Customers 49k 6.8x 306k 1.7x 500k Supplied TWh 3 TWh 3.6x 10 TWh 1.5x 15 TWh Energy sold covered by PPA - +1 p.p. 1% +2/3 2/3 EBITDA €18m +2.9x €53m >€100m ~3x EBITDA +0.1 Double-digit margin (%) 5.3% 5.4% c.2x p.p. margin Source: Company 34
Slide 35: Growth strategy based on three key pillars
Audax’s growth strategy is based on three key pillars A PPA sourcing strategy B Spanish market consolidation C Scalable strategy Two-prong sourcing strategy: Both organic and inorganic growth Replicate Audax’s strategy in new markets, thanks to a scalable and 1. Construction of Solar PV assets
Slide 36: Targeted procurement mix
Audax’s targeted procurement mix ensures an optimised balance between flexibility and cheap energy Price Price (€) (€/MWh) 1/3 55 Pool price 50 2/3 Full flexibility makes business optimisation possible 45 Third party-asset PPAs 40 Mix between cheap energy and flexibility (maturity shorter than asset
Slide 37: 70% of 2022 targeted EBITDA already secured
70% of 2022 targeted EBITDA is already secured with the PPAs already signed 2018-2022 target EBITDA Energy procurement mix margin (€/MWh) ~15TWh 2018-2022 target growth: c.2.0x Double 10.1digit Significant From both upside from owned- c.30% additional PPA ~10TWh asset and initiatives external- asset
Slide 38: Asset rotation strategy
Asset rotation strategy maintaining long-term PPA contracts securing a cost-efficient energy source 1 2 Development of Sign new PPA assets until COD contracts 4 3 Proceeds will be Asset disposal, used for new with a PPA developments contract attached 38
Slide 39: #1 independent supplier in Spanish SME segment
# 1 established independent supplier in the profitable Spanish SME segment Market share(1) by supplied energy in the Huge potential for further inorganic growth SME(2) segment in Spain (2018) # supply companies in the SMEs segment 13% >300 connection points 65% of the SME 35% suppliers in 1 Independ
Slide 40: Replicating the Iberian business model worldwide
Well-positioned to replicate the Iberian business model worldwide Foundations already laid to achieve critical mass quickly Further Country Audax’s positioning Opportunity profitability Audax’s revenue (€m) potential 78 Inorganic growth via Big Expected to become the most 65 Energia (2014) and 2
Slide 41: Italy: strong market potential after liberalisation
Italy: strong market potential once full liberalisation takes place Key highlights 2018 Growth 2022 20 MW signed 300 MW PPA PPA under negotiation Customers 46k +2.0x ~105k Strong Generation growth in indexed opportunities tariff (75%) being considered Supplied TWh 0.7 +2.0x ~1.5 Rationale behind our
Slide 42: Technology-focused company optimising processes
A technology-focused company which ensures customer satisfaction and increases processes’ optimisation Customer first Process optimisation Audax has a key focus on its customers to Reduce cost structures while making more ensure long-term success: it is therefore efficient use of the available infor
Slide 43: Q1 2019 results
[ 5 } 012019 results
Slide 44: Q1 2019 financial results
Q1 2019 financial results Revenues (€m): strong organic and Gross margin (€m) / (% sales) inorganic growth 289.2 11.3 29.1 187.0 20.8 76.1 11.3 9.3 9.3 5.7 177.7 201.7 11.4 12.1 1Q 2018 1Q 2019 1Q 2018 1Q 2019 Supply Supply (Unieléctrica) Generation Supply Supply (Unieléctrica) Generation EBITDA (€m
Slide 45: Q1 2019 operating results
Q1 2019 operating results Customers Supplied energy (GWh) Generation (GWh) 308,300 2,972 2,755 21% 216,319 45% 52% 29% 125.7 114.2 79% 71% 48% 55% 1Q 2018 1Q 2019 1Q 2018 1Q 2019 1Q 2018 1Q 2019 Electricity Gas Electricity Gas Rest of Rest of Europe 6% Europe 8% Poland 23% Italy 7% Spain 40% Spain 7
Slide 46: Conclusions and Q&A
[ 6 ) Conclusions and O&A
Slide 47: Combined business model sustains long-term growth
Audax's combined business model enables the group to sustain long-term growth ~€1.5bn Revenue growth(1) €1.0bn Dividend policy targeted from 2020 onwards 2018a 2022e High visibility on 70% of >€100m €130m-€150m the targeted 2022 EBITDA. EBITDA growth(1)(2) €53m Further upside backed by owned-asset a
Slide 48: Takeaways
Takeaways Audax 2022 1 Leading Achieving the most Replicating independent cost-efficient growth success in supplier in the energy sources the international Spanish SME through LT – PPA business contracts and segment asset rotation of PV portfolio 2/3 supplied Strong revenue Sustainable growth in ene
Slide 49: Q&A
Q&A 49
Slide 50: Appendix
Appendix
Slide 51: Glossary
Glossary AMER: America APAC: Asia Pacific BoP: Balance of Plant CAGR: Compound Annual Growth Rate CCGT: Combined Cycle Gas Turbines CNMC: Comisión Nacional de Mercados y Competencia COD: Commercial Operations Date EMEA: Europe, Middle East, Africa EPC: Engineering, Procurement and Construction LCOE:
Slide 52: Disclaimer
Disclaimer Any data, estimate, valuation and projection, as well as the rest of the content of this presentation does not purport to be comprehensive and serves informational purposes only. Neither Audax Renovables, S.A. nor any of its directors, managers or employees are implicitly or explicitly ob
Slide 53: www.audaxrenovables.com
rt audax renovables www.audaxrenovables.com