Northland Power Inc. · TSX:NPI
Northland Power — Investor Presentation (August 2023)
35 slides from Northland Power's investor presentation, August 2023
Slide 1: Investor Presentation August 2023
Investor Presentation August 2023 1
Slide 2: Corporate Overview
Corporate Overview 2
Slide 3: Northland Overview
Northland Overview • Northland is a leading global power producer at the forefront of the global energy transition • Over 36 years of success developing, constructing and operating power projects across a range of technologies • Well-diversified portfolio of high-quality power infrastructure assets:
Slide 4: Northland Growth Drivers – Market Selection
Northland Growth Drivers – Market Selection High Growth Onshore Top Offshore Wind Markets Renewables Markets Multiple Tailwinds Support Our Business • Increased government support Mature Emerging Previously Current Emerging • US – Inflation Reduction Act • Netherlands • Poland • Ontario • New York •
Slide 5: Realigning our business operations
Realigning our business operations Offshore Wind Onshore Renewables • Northland has evolved to a technology-focused business unit (BU) operating model to support scalability globally. • TOP 10 Incumbent in Global Offshore • Growth in near-term cash flow Wind • M&A will continue to play a role to • F
Slide 6: Pathway to Net Zero
Pathway to Net Zero Committed to reducing our GHG emissions intensity from Scope 1 ESG & 2 by 65% ( from a 2019 baseline) by 2030 and reaching a science- aligned net zero over all emissions scopes (Scope 1,2 &3) by 2040. 33% 50% Board of Executive Directors Office Making a commitment to Joining UN G
Slide 7: Portfolio Overview
Portfolio Overview 7
Slide 8: Diversified Asset Portfolio
Diversified Asset Portfolio Europe (Offshore Wind): Canada: Operated: 1,184 MW Scotland: Development: 1,140 MW Operated: 1,267 MW Development: 2,340 MW Development : 1,870 MW U.S.: Development: 220 MW South Korea: Spain: Development: 3,686 MW Japan: Operated: 559 MW Development: 600 MW Mexico: Taiwa
Slide 9: Sustainable Growth
Total Pipeline Sustainable Hydrogen (3%) Onshore wind (7%) Growth Battery Energy Storage System (BESS) (16%) Strong Growth Portfolio Across Multiple Technology Solar (17%) Technologies Offshore wind (60%) 16GW Continue to target Europe and Asia as key markets for offshore wind development Expand ons
Slide 10: Offshore Wind: Catalyst for Long-Term Growth
Offshore Wind Catalyst for Long-Term Growth • Countries expected to boost wind development to reduce soaring power prices and ensure national security and decarbonization • Offshore wind deployment targets have increased • Governments are also taking steps to speed up development timelines and reduc
Slide 11: Europe Offshore Wind
Europe Offshore Wind Established offshore wind platform in North Sea with nearly 1.2GW1 of operating capacity 3 Deutsche Bucht Nordsee One 2 Netherlands | 600MW 1 Gemini Gemini COD: 2017 Capacity: 600 MW Poland Ownership: 60% PPA Expiry: 2031 Netherlands Germany Germany | 584MW Nordsee One Deutsche
Slide 12: Europe Offshore Wind Development: Baltic Power
Europe Offshore Wind Development Baltic Power Poland | Baltic Power 1.1 GW • Signed supplier agreements with Vestas 15MW wind turbines, export cables and onshore and offshore substations • Agreements for the transport and installation of the turbines and for the foundations of all substation element
Slide 13: Europe Offshore Wind Development: ScotWind
Europe Offshore Wind Development N3 N2 N1 Scotland | Scotwind 2.3 GW • Successfully awarded two leases in 2022 Crown Estate Scotland offshore wind process • Lease N4 – 840 MW fixed bottom foundation • Lease N2 – 1,500 MW floating foundation • Continuation of Northland’s offshore strategy of being ea
Slide 14: Asia Offshore Wind Development: Hai Long
Asia Offshore Wind Development Taiwan | Hai Long 1.0 GW • Executed majority of the key contracts for the project • Signed 15-year Turbine O&M with OEM (Siemens Gamesa) HL3 HL2 • Will deploy Siemens 14 MW Turbine (recently certified) • Major construction programs running as planned • Commenced early
Slide 15: South Korea Offshore Wind Development
South Korea Offshore Wind Development Dado, 1.3 GW • 2022 key milestones achieved: • Secured electricity business licenses (EBLs) for 1,270 MW, which grant priority development rights to Northland South Korea • First major permit on route to financial close. Gives Northland development exclusivity o
Slide 16: Onshore Renewables
Onshore Renewables ● The industry is expected to grow at upwards of 10% per annum over the next decade ● Favourable government policies ● We continue to build local capabilities in development to ensure that sufficient resources are available in supporting functions ● Growth in near-term cash flow ●
Slide 17: Europe Onshore Renewables
Europe Onshore Renewables Spain | Wind/Solar 560MW • Diversified portfolio of 551 MW (net) of onshore renewables with a regulated tariff • Delivers near-term cash flow to help fund the development of Northland’s large offshore wind projects Spain • Creation of a European onshore renewables asset man
Slide 18: North America Onshore Renewables Development: New York
North America Onshore Renewables Development Ball Hill 108 MW United States | New York State 220MW Bluestone 112 MW • Achieved financial close on 220 MW Ball Hill and Bluestone projects in Q2 2021 • Secured 20-year indexed REC contract (CfD all-in PPA) with the New York State Energy Research and Dev
Slide 19: North America Onshore Renewables Development: Alberta
North America Onshore 1 Jurassic Solar – Late Stage Renewables Development 2 Mid-stage Solar 3 Early-Stage Solar Canada | Alberta development portfolio 1.6 GW • Established presence with scale in highly sought after power market in North America Alberta • Large scale solar portfolio with near-term v
Slide 20: North America Onshore Renewables Development: Oneida Battery Storage
North America Onshore Renewables Development Canada | Oneida Battery Storage 250 MW • Largest battery storage project in Canada and one of the largest on the continent • Development in partnership with NRStor Inc. and the Six Nations of the Grand River Development Corporation • 20-year fixed price c
Slide 21: Colombia Onshore Renewables
Colombia Onshore Renewables EBSA EBSA Utility Helios • EBSA is a sole distributor to a population of over 1.3 million; proven management team with local expertise • Operates under regulatory framework with an average approved WACC of ~12.09% • RAB is expected to grow at a rate in excess of inflation
Slide 22: Growth Strategy: Energy Storage
Growth Market Trends Strategy • Demand for energy storage driven by capacity needs of a 100% carbon-free electricity grid • Strong policy support for energy storage in existing markets for Northland, e.g., 7 GW Energy Storage – Energy of storage needed in Ontario through 2030 Storage Industry Overvi
Slide 23: Growth Strategy: Green Fuels – Hydrogen and P2X
Growth Market Trends Strategy • Decarbonizing hard-to-abate sectors such as transportation, industry and power generation Green Fuels – Hydrogen and • Diversification of supply key priority in Europe P2X Industry Overview • New policies and higher carbon prices supporting transition to renewable gre
Slide 24: Financial Overview
Financial Overview 24
Slide 25: Long-Term Financial Objectives
Cash Flow Resiliency Long-Term Financial ● Source long-term contracts and hedge variable costs and cash flow streams Objectives Long-term financial strategy remains unchanged Strong Investment Grade Balance Sheet ● Maintain investment grade balance sheet to Maintaining flexibility, adding corporate
Slide 26: Prudent Financial Leverage
Prudent Financial Leverage Funding Model Reduces Equity Risk Project finance continues to be pillar of our funding philosophy and risk management. Corporate Card Rating The majority of Northland's debt is fixed rate debt and the only variable debt is corporate credit facilities and revolving facilit
Slide 27: Financial Strategy
Financial Strategy Disciplined and flexible approach to project funding • Manages capital strategy with a high degree of selectivity in funding its capitalized growth projects • Focused on maintaining an investment grade rating • Credit facilities support short-term funding needs with borrowings rep
Slide 28: Our Sell-down Partnership Strategy
Our Sell-down Partnership Strategy The partnership model is a flexible and proven funding source and will form part of our long-term funding plans to help position the company for long-term growth. • Enhance project returns and accelerate value creation – expected to crystalize at FC • Enterprise ri
Slide 29: Development Asset Partial Sell-downs
Development Asset Focus by region & technology Partial Sell-downs Enhances Funding Flexibility, Diversification and Project Returns Our partnering strategy • Align low cost of capital with high quality long-term contracted cash flows Northland is targeting to generate incremental 200 to 400 bps of v
Slide 30: 2023 Financial Guidance
2023 Financial Guidance Adjusted EBITDA $1.2 to $1.3 Billion Adjusted EBITDA and Adjusted Free Cash Flow Utilities Offshore Wind Adjusted Free Cash Flow (excl. growth expenditures) $1.70 to $1.90 Per Efficient Natural Gas Share 2023 Adjusted Free Cash Flow EBITDA (incl. growth expenditures) Onshore
Slide 31: Appendix
APPENDIX 31
Slide 32: Market Summary
Market Summary Key Metrics1 Recent Share Price (TSX: NPI) $25.94 Shares Outstanding (Common)2 252 million Annual Dividend $1.20 2023 EBITDA Guidance $1.2 - $1.3 billion 2023 FCF/sh Guidance $1.30 - $1.50 2023 Adjusted FCF/sh Guidance $1.70 - $1.90 Total Debt, Net of Cash2 $6.2 billion Preferred Shar
Slide 33: Forward looking statement
Forward looking statement This written and accompanying oral presentation contains certain forward-looking statements which are provided for the purpose of presenting information about management’s current expectations and plans. Readers are cautioned that such statements may not be appropriate for
Slide 34: Reporting of Non-IFRS Financial Measures
Reporting of Non-IFRS Financial Measures This investor presentation includes references to Northland’s adjusted EBITDA and free cash flow, measures not prescribed by International Financial Reporting Standards (IFRS). Adjusted EBITDA and free cash flow, as presented, may not be comparable to other s
Slide 35: Northland Power investor relations contact
Northland Power Adam Beaumont Email: investorrelations@northlandpower.com 30 St. Clair Avenue West, VP Finance, Head of Capital Markets 12th Floor 647.288.1929 Website: northlandpower.com Toronto, ON Canada M4V 3A1
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