NextEnergy Solar Fund Ltd · LSE:NESF
NextEnergy Solar Fund — FY2017 Earnings Presentation
30 slides from NextEnergy Solar Fund's earnings presentation, Jun 28, 2017
Slide 1: NextEnergy Solar Fund Limited Results for the year ended 31 March 2017
NextEnergy Solar Fund Limited Results for the year ended 31 March 2017 Analyst Presentation – 28 June 2017
Slide 2: Agenda – Presented by the Investment Adviser
Results for the Financial Year Ended 31 March 2017 2 Agenda – Presented by the Investment Adviser MICHAEL BONTE-FRIEDHEIM NEC Founding Partner & CEO • Investment Update – Michael Bonte-Friedheim ALDO BEOLCHINI NEC Managing Partner & CFO • Financial Results – Aldo Beolchini • Q&A
Slide 3: Investment Update
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Slide 4: Overview
Results for the Financial Year Ended 31 March 2017 4 Overview NextEnergy Solar Fund (‘NESF’) Largest investment company listed on LSE focused on solar investments Attractive acquisition values sourced by NextEnergy Capital Operational outperformance supported by WiseEnergy ensuring optimal ass
Slide 5: Investment Highlights
Results for the Financial Year Ended 31 March 2017 5 Investment Highlights Investment portfolio of 41 solar photovoltaic plants at year end for c.454MW, subsequently expanded to 48 plants for c.483MW. Total investment value of c.£554m. Funds invested at attractive valuations vs. peers. Acquisi
Slide 6: Continuous Operating Outperformance
Results for the Financial Year Ended 31 March 2017 6 Continuous Operating Outperformance NESF’s portfolio consistently generates Asset Assets Solar Irradiation Power Generation more electricity than its Period Management Monitored (delta vs. budget) (delta vs. budget) acquisition budget Alpha(1) e
Slide 7: NESF Investment Portfolio
Results for the Financial Year Ended 31 March 2017 7 NESF Investment Portfolio NESF’s investment portfolio of 48 PV plants representing c.483MW of installed capacity and c.£554m of investment value In June, NESF announced the acquisition of project rights to build four solar sites for a total of
Slide 8: UK Solar Outlook 2017
Results for the Financial Year Ended 31 March 2017 8 UK Solar Outlook 2017 The UK solar market has Market expected to reached 12GW installed continue growing this March (three years to 20-40GW ahead of the government by 2030 target for 2020) The UK’s Fifth Carbon Budget considers scenarios in wh
Slide 9: Current UK Pipeline
Results for the Financial Year Ended 31 March 2017 9 Current UK Pipeline NEC is negotiating Tier 1: Letters of Intent multiple projects for NESF Power plants location Incentive regime Plant capacity Status Advanced negotiations pipeline Multiple sites 1.2 ROCs c.98.5MWp In operation amounts to –
Slide 10: The International Solar Investment Opportunity
Results for the Financial Year Ended 31 March 2017 10 The International Solar Investment Opportunity Total global solar PV North America Europe installed capacity in Current installed Current installed 2016 of 305GW capacity 28.5GW capacity 97.1GW Global forecasts for Forecast installed Forecast
Slide 11: Financial Results
© Financial Results
Slide 12: Financial Highlights
Results for the Financial Year Ended 31 March 2017 12 Financial Highlights Net Asset Value grew from £273.8 million to £478.6 million. NAV per share grew from 98.5p to 104.9p Launch of a 350m shares placing programme and completion of equity issuances for £310.8m (April 2016 to June 2017) out of
Slide 13: Portfolio Valuation
Results for the Financial Year Ended 31 March 2017 13 Portfolio Valuation Discount Rates Equity discount rate decreased to 7.25% for unlevered assets Levered discount rates up to 8.25% for levered assets to reflect greater risk to equity cash flows Weighted average discount rate increased at 7
Slide 14: NAV Movement
Results for the Financial Year Ended 31 March 2017 14 NAV Movement
Slide 15: UK Energy Market Dynamics
Results for the Financial Year Ended 31 March 2017 15 UK Energy Market Dynamics Current long-term Electricity Wholesale Forecast (£/MWh) (1) power price forecast implies a CAGR of c.1.6% in real terms between 2017 and 2037 This power curve is on average higher by 3.6% compared to the one assumed
Slide 16: Capital Raise and Deployment
Results for the Financial Year Ended 31 March 2017 16 Capital Raise and Deployment During the year NESF announced a 350m new shares issuance programme Subsequent to year end NESF completed a capital raise issuing 115m shares for total £126.5m Pro-forma NAV post capital increase and Capital Dep
Slide 17: Debt Financing Strategy
Results for the Financial Year Ended 31 March 2017 17 Debt Financing Strategy NESF has debt facilities available of £269.8m Arranged £150.0m fully amortising facility expiring in 2035 which represents c.36% with unique NAV-enhancing features: of GAV (c.31% post June capital increase) Bespoke f
Slide 18: Robust Dividend Cover
Results for the Financial Year Ended 31 March 2017 18 Robust Dividend Cover During the Year the Company generated investment cash income of £32.1m and had net operating costs of £5.0m
Slide 19: Sensitivity Analysis on Dividend Cover
Results for the Financial Year Ended 31 March 2017 19 Sensitivity Analysis on Dividend Cover Power Prices The Company expects to meet its long-term Case A – 24% downwards shift – the company would still be able to meet a 1.0x dividend cover RPI-linked dividend Case B – Flat Power Curve – the c
Slide 20: Summary Income Statement
Results for the Financial Year Ended 31 March 2017 20 Summary Income Statement Income Statement 2017 2016 For the year ended 31 March (GBPm) (GBPm) Investment Income 35.3 24.0 Movement in Investment Portfolio Value 19.6 (18.5) Net Income 54.9 5.5 Total Expenses (5.1) (3.6) Finance Income 0.0 0.1 Pro
Slide 21: Summary Balance Sheet and Cash Flow
Results for the Financial Year Ended 31 March 2017 21 Summary Balance Sheet and Cash Flow Balance Sheet 2017 2016 As at 31 March (GBPm) (GBPm) Investment Portfolio 333.9 382.3 Residual net assets of Holding Companies 82.0 (66.9) Current assets 71.0 6.0 Current Liabilities (8.3) (47.6) Net Asset Valu
Slide 22: Cashflow Generation Model (average per MW)
Results for the Financial Year Ended 31 March 2017 22 Cashflow Generation Model (average per MW) During the year, NESF portfolio performed above budget in terms of generation despite lower solar irradiation The competitive terms obtained on PPAs in place offset lower revenues from ROC recycle an
Slide 23: Q&A – Appendix
Q&A – Appendix Leading Solar Asset Manager
Slide 24: Portfolio Overview – Risk Diversification
Results for the Financial Year Ended 31 March 2017 24 Portfolio Overview – Risk Diversification By County By EPC Contractor
Slide 25: Portfolio Overview – Risk Diversification
Results for the Financial Year Ended 31 March 2017 25 Portfolio Overview – Risk Diversification By Inverter Manufacturer By Solar Module Manufacturer
Slide 26: UK Energy Market Dynamics – FYE March 2017
Results for the Financial Year Ended 31 March 2017 26 UK Energy Market Dynamics – FYE March 2017 Power Prices During the year, both the wholesale power market in the UK and the long term estimates experienced an upward movement following the sterling depreciation and the increase in energy prices
Slide 27: NAV Sensitivities
Results for the Financial Year Ended 31 March 2017 27 NAV Sensitivities The long-term sensitivity analysis highlights the % change in the investment portfolio value (£333.9m) as well as the subsequent impact on NESF’s NAV per share As of 31 March 2017, the remaining weighted average lease durati
Slide 28: Share Price vs NAV per Share
Results for the Financial Year Ended 31 March 2017 28 Share Price vs NAV per Share Without taking into account dividends paid, NESF shares outperformed its FTSE All-Share benchmark by 1.8% since IPO Total Shareholder Return was 21.1% for the year ended 31 March 2017 and 9.1% annualised since IPO
Slide 29: Summary of Debt Financing Terms
Results for the Financial Year Ended 31 March 2017 29 Summary of Debt Financing Terms
Slide 30: Important Notice
30 Important Notice This document is issued by Next Energy Capital Limited (“NECL”), 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