Aquila European Renewables Plc Registered · LSE:AERI
Aquila European Renewables Plc Registered — Aquila European Renewables Income Fund — FY2021 Earnings Presentation
58 slides from Aquila European Renewables Plc Registered's earnings presentation, 2022
Slide 1: Aquila European Renewables Income Fund Plc 2021 Results
Aquila European Renewables Income Fund Plc 2021 Results Desfina (Greece) © 2022 AQUILA CAPITAL Generating Essential Investments 1
Slide 2: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix © 2022 AQUILA CAPITAL 2
Slide 3: AERIF Overview
Aquila European Renewables Income Fund Plc (“AERIF”) Overview Technology1 Geography1 Contracted Revenues Contracted revenues2 50% ~69% Diversified contracted revenue Target: 30-50% Target: 30-50% structure across a range of counterparties PPA, FiP, FiT, CfD Target: 15-25% – Conservative strategy tar
Slide 4: 2021 Highlights
2021 Highlights Highlights KPIs Total NAV per ordinary share return of Established EUR 40.0 million revolving Metric 2021 2020 7.6% (2020: 0.7%) credit facility (undrawn as at 31 December 2021) Dividend per ordinary share 5.0 4.0 2021 dividend target achieved and covered (EUR cents) cents cent
Slide 5: AERIF Track Record Since IPO
AERIF Track Record Since IPO Generation Capacity Capital Deployment Dividends Ongoing Charges (MW)1 (EUR m)2 (Cents per Ordinary Share)3 (% of NAV)4 332 284 1.7% 301 5.0 1.4% 223 4.0 1.1% 132 109 1.5 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 Excludes recently announced acquisition
Slide 6: 2022 Dividend Guidance
2022 Dividend Guidance Holmen II (Denmark) Dividend Policy (Prospectus) Dividend Track Record 2022 Dividend Guidance2 (EUR cents per Ordinary Share) Dividends paid subject to having +5% Targeting a dividend of not less than sufficient reserves to do so (2021 IPO Targets 5.25 cents per ordinary s
Slide 7: AERIF Key Milestones
AERIF Key Milestones IPO on 5th June Equity issuance AERIF secures AERIF increases The Rock bond (EUR 154m) (EUR 40m) EUR 40m revolving its commitment refinancing credit facility to The Rock Recognized with Green Equity issuance Adviser fee is paid Equity AERIF receives a 4 Econo
Slide 8: Aquila Capital Overview
Aquila Capital Overview Aquila Capital is an investment and asset development company focused on generating and managing essential assets on behalf its clients. Aquila Capital Employees Owner-managed, founded in 2001 More than 600 employees in Hamburg. Own fully BaFin 16 locations in regulated KVG 1
Slide 9: Aquila Capital Overview (cont’d)
Aquila Capital Overview (cont’d) AERIF investment mandate Origination Aquila Capital development portfolio 103 professionals Deal sourcing, project development, portfolio Aquila Capital office management – 13 nationalities, network of deep relationships with across Europe – Includes 50 FTE dedicated
Slide 10: Aquila Capital: Latest Activities
Aquila Capital: Latest Activities March 2021: Aquila Capital renewable Key strategic joint venture to further expand into portfolio the South Korean and Asian markets – pipeline of reaches 430 MW solar PV and 1 GW of wind power April 2022: 10 GW August 2021: Joint New PPAs Active hedging approac
Slide 11: Aquila Capital Contribution to the Energy Transition
Aquila Capital Contribution to the Energy Transition TARGET-TRACKER: AVOIDANCE OF CO2 BY AQUILA CAPITAL Aquila Capital’s goal is to avoid 1.5 billion tons of CO2 emissions AS OF 17 FEBRUARY 2022 over the lifetime of the portfolio by 2030 and thereby contribute to the global energy transition and sec
Slide 12: AERIF ESG Highlights
AERIF ESG Highlights AERIF Contribution to the Energy Transition1 AERIF is currently classified under article 8 SFDR and subject to More than More than evaluation for a classification to article 9 SFDR 223,300 236,500 Inaugural Green Bond issued in relation to The Rock. Rating of “Dark Green” fo
Slide 13: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix © 2022 AQUILA CAPITAL 13
Slide 14: Portfolio Evolution – On Track Towards 500 MW in Capacity
Portfolio Evolution – On Track Towards 500 MW in Capacity Total Generating Capacity – AERIF Share (MW) 500 +332 MW of portfolio growth since IPO 400 100 300 50 Existing commitment, 55 pending completion 432 200 Existing construction assets 332 228 100 197 132 0 - IPO 2019 2020 2021 The Rock Albeniz
Slide 15: AERIF Portfolio Snapshot
AERIF Portfolio Snapshot Key Statistics – 31 December 20211 The Rock 10 32 Olhava Investments Operating assets2 Wind energy Solar PV Hydropower 2 6 Tesla Projects under Countries construction Holmen II 332.3 MW ~23 Operating capacity Remaining asset life Svindbaek I+II (years)3 68.5% 25.7% Contracte
Slide 16: Portfolio Summary
Portfolio Summary Project Technology Country Capacity1 Status COD2 Asset Life Equipment Energy Offtaker Ownership Leverage4 Acquisition from COD Manufacturer Offtaker3 in Asset Date Tesla Wind energy Norway 150.0 MW Operational 2013, 2018 25y Nordex PPA Statkraft 25.9%6 23.8% July 2019 Sagres Hydrop
Slide 17: Targeting Assets in Locations with a Strong Underlying Resource
Targeting Assets in Locations with a Strong Underlying Resource Wind power density1 Average annual Solar power irradiation3 precipitation2 AERIF asset location 1Mean wind power density. 2Average annual precipitation in the EEA area (1940-2012). 3Global horizontal irradiation. Source: Global Wind Atl
Slide 18: Portfolio Allocation (31 December 2021, Excludes Commitments)
Portfolio Allocation (31 December 2021, Excludes Commitments)1 Technology Geography Asset Status Asset Age 5.0% 5.0% 12.9% 19.5% 29.0% 28.7% 18.5% 14.5% 8.6% 66.0% 24.0% 76.5% 20.5% 71.3% Portugal Norway Denmark Hydro Solar PV Wind Finland Spain Greece Operating Under construction < 5 years 5 - 10 y
Slide 19: Attractive Contracted Revenue Base
Attractive Contracted Revenue Base Present Value of Contracted vs. Non- Revenue Mix – Existing Contracts Only (including The Rock / Albeniz) Contracted Revenue (5 Years)1 100.0% 90.0% Aquila will proactively seek to replace expired PPA / tariff contracts over time 27.5% 80.0% in order to maintain a
Slide 20: Active Hedging in Iberia
Active Hedging in Iberia PPA Price Achieved vs. Analyst Curve Mix and Forward Prices1 200.0 180.0 160.0 140.0 EUR MW/h 120.0 100.0 80.0 60.0 40.0 20.0 - 2022 2023 2024 2025 2026 2027 2028 2029 2030 Blended Average Analyst price curve New PPA I New PPA II Iberia forward price curve New Long-Term PPAs
Slide 21: Construction Progress
Construction Progress1 The Rock Albeniz Construction completed in December 2021 80% of overall construction has been completed All 72 turbines have been completed, with 43 turbines completed first Work focused on engineering and grid connection production and 23 successfully commissioned M
Slide 22: The Rock – An Illustration of Scale
The Rock – An Illustration of Scale Total area The Rock, 50km2 Norway’s largest Of the area used for infrastructure windpark 2% infrastructure Roads built stretches 70km across London's entire Above sea level metropolitan 800m area Cable laid 438km Source: Aquila Capital Investmentgesellschaft mbH ©
Slide 23: Diversified Revenue Structure with Potential for Upside
Diversified Revenue Structure with Potential for Upside Offtake Asset(s) Overview Inflation Merchant price % of revenue2 exposure PPA Tesla, Albeniz, Benfica III, Fixed price. Baseload / Pay-as- n/a n/a1 23%3 The Rock, Holmen II, Produced Svindbaek FiT Sagres Fixed price n/a n/a 7% FiP Desfina Contr
Slide 24: Portfolio Well Positioned in an Inflationary Environment
Portfolio Well Positioned in an Inflationary Environment Revenue Composition1 EU Electricity Prices vs. EU CPI From 20012 Fixed price PPA 27.5% Market 2001-2019 3.4% 31.5% EU Electricity Index 2001-2021 3.9% 2001-2019 1.8% EU CPI 40.9% 2001-2021 1.9% Government regulated tariff – Portfolio well posi
Slide 25: Capital Deployment and Forward Commitments
Capital Deployment and Forward Commitments 2021 Capital Deployment Forward Commitments EUR m 100 90 96 90 80 70 26 61 60 50 40 8 30 28 Existing construction assets 20 10 6 0 Ourique The Rock Albeniz Total Albeniz 1 Greco 2 Total Commitments – EUR 61 million deployed in 2021 in relation to the acquis
Slide 26: AERIF’s Latest Acquisition – Greco
AERIF’s Latest Acquisition – Greco AERIF pro forma portfolio allocation by technology (incl. Greco)2 Hydropower 4% 47% Solar PV Capacity1 Wind 49% 100 MWp energy Status Under construction – AERIF’s largest acquisition to date Project ownership – EUR 90 million plus earn-out consideration due at proj
Slide 27: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix © 2022 AQUILA CAPITAL 27
Slide 28: Asset Performance
Asset Performance 2021 Monthly Production Performance vs. Budget Production by Technology (AERIF Share) (AERIF Share, GWh) 70.0 Technology Region1 Electricity Production (GWh)1 Variance (%) 60.0 20212 2020 50.0 Denmark, Finland, 40.0 Wind 395.0 382.6 3.2% Norway, Greece 30.0 Hydropower Portugal 48.4
Slide 29: Asset Performance (cont’d)
Asset Performance (cont’d) 2021 Daily Average Power Price1 EUR / MWh 400 350 300 250 200 150 100 50 0 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Nordpool Iberia Greece Bullish trend in power price levels across all markets, particularly in Q3 Futures as at
Slide 30: Underlying Financial Performance
Underlying Financial Performance Asset Underlying Financial Performance (AERIF Share)1,2,3 EUR m 2021 2020 Variance (%) Investment income was 10.2% above budget driven by: Production (GWh) 522.3 459.9 13.6 Higher than expected electricity prices during the 2021 Average Revenue per MWh 80.8 54.6
Slide 31: Summary Income Statement
Summary Income Statement FY21 FY20 Revenue Capital Total Revenue Capital Total EUR k (Loss)/gain on investments - 19,236 19,236 - (3,959) (3,959) Net foreign exchange losses - (7) (7) - (12) (12) Interest income 11,783 - 11,783 6,194 - 6,194 Investment advisory fees (2,682) - (2,682) (1,671) - (1,67
Slide 32: Summary Balance Sheet
Summary Balance Sheet EUR k FY21 FY20 Assets Cash 94,275 121,014 Trade and other receivables 9,298 5,763 Portfolio value 316,953 229,982 Liabilities Creditors (3,083) (39,856) Net assets 417,443 316,903 Net assets per Ordinary Share (cents) 102.58c 99.96c © 2022 AQUILA CAPITAL 32
Slide 33: Summary Cash Flow
Summary Cash Flow EUR k FY21 FY20 Operating activities Profit on ordinary activities before taxation 26,924 (788) Adjustment for unrealized losses / (gains) on investments (19,236) 3,959 Working capital adjustments (2,422) (2,398) Net cash flow from / (used) in operating activities 5,285 773 Purchas
Slide 34: Gearing and Liquidity Summary (31 December 2021)
Gearing and Liquidity Summary (31 December 2021) Key Debt Metrics (EUR m)1 Liquidity and Project Commitments (EUR m) Company level debt 0.0 Cash balance (excl. asset-level cash holdings) Asset level debt 144.3 AERIF Plc 94.3 Total debt 144.3 Tesseract Holdings Limited 7.9 NAV 417.4 Total 102.2 GAV 5
Slide 35: Debt Summary (31 December 2021)
Debt Summary (31 December 2021) Drawn Debt Bullet / Project AERIF Share Currency Maturity Hedged % Type (EUR million)1 Amortisation Tesla 25.9% 9.8 EUR Partly amortising Mar 2029 100.0% Bank Debt Dec 2028 / Sagres 18.0% 11.5 EUR Fully amortising 70.0% Bank Debt Jun 2030 Dec 2030 / Olhava 100.0% 23.5
Slide 36: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix © 2022 AQUILA CAPITAL 36
Slide 37: Net Asset Valuation
Net Asset Valuation Net Asset Value Bridge (EUR m) 24.8 7.4 0.9 417.4 90.0 (5.6) (17.0) (Loss)/gain on investments – EUR 19.2 (refer to Appendix) 316.9 (Loss)/profit on ordinary activities after taxation – EUR 26.6 (refer to Appendix) 1 FY20 Raised capital Movement in Net profit / (loss) Net profit
Slide 38: Portfolio Valuation
Portfolio Valuation Portfolio Valuation Bridge (EUR m)1 Portfolio Valuation (EUR m) FY21 FY20 3.1 3.0 317.6 Tesla 31.4 25.4 4.5 0.0 0.6 2.9 2.0 3.6 6.0 Sagres 15.8 15.2 (0.9) 64.2 Holmen II 24.5 21.5 Olhava 27.3 25.3 Svindbaek 40.6 37.0 The Rock 45.0 32.2 228.5 Benfica III 16.7 16.7 Albeniz 46.0 17.
Slide 39: Key Assumptions
Key Assumptions Metric FY21 FY20 Discount rate Weighted average 6.5% 6.6% Long-term inflation Weighted average 2.0% 2.0% Wind 23 years 24 years Remaining asset life Hydropower 11 years 12 years (Weighted Average)1 Solar 27 years 27 years Wind 26 years 26 years Operating life Hydropower n.a n.a (Weig
Slide 40: Conservative Valuation Assumptions
Conservative Valuation Assumptions Asset life – Wind energy1 Asset life – Solar PV1 Long-term inflation1,2 Discount rate3 35 40 3.0% 8.0% 30 35 7.0% 2.5% 30 6.0% 25 2.0% 25 5.0% 20 20 1.5% 4.0% 15 15 3.0% 1.0% 10 2.0% 10 0.5% 5 5 1.0% 0 0 0.0% 0.0% AERIF AERIF Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer
Slide 41: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix © 2022 AQUILA CAPITAL 41
Slide 42: Existing Footprint and Pipeline – Substantial Opportunities for Future Expansion
Existing Footprint and Pipeline – Substantial Opportunities for Future Expansion Existing Aquila Capital AERIF investment mandate AERIF Development Aquila Capital development pipeline Area Portfolio Portfolio1 Aquila Capital office Nordics 178.2 MW 0.7 GW Iberia 118.6 MW 3.4 GW Greece 35.6 MW 1.2 GW
Slide 43: Ourique – Co-Location Storage Assessment
Ourique – Co-Location Storage Assessment • Existing infrastructure • New infrastructure Solar PV size 62 MWp, 45 MVA Potential battery size 10-25 MW, 2-4 hours Potential Ready to Build Q2 2023 Capex ~EUR 15 million for 20 MW 2-hour Project status – Co-location opportunity currently being evaluated b
Slide 44: Key Priorities – 2022
Key Priorities – 2022 Desfina (Greece) – Capital deployment into opportunities which meet AERIF investment criteria – Completion of The Rock, Albeniz & Greco – Ongoing review of potential refinancing opportunities – Annual GRESB ESG assessment to commence in Q2/Q3 2022 with results due later in 2022
Slide 45: Summary
Summary – Conservative strategy targeting portfolio diversification and high contracted revenues 2022 Dividend Guidance3 – Investment adviser manages over 12 GW of renewable energy assets, one of the largest clean energy portfolios in Europe 5.25 cents per ordinary share – Growth supported by access
Slide 46: Outlook
Outlook Ongoing positive momentum behind the EU green energy transition, with energy security emerging as a key theme post the Russia-Ukraine war Bullish trend in power price continues during the first quarter of 2022 across all markets Potential for government intervention in response to high
Slide 47: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix © 2022 AQUILA CAPITAL 47
Slide 48: Reconciliation – Income Statement
Reconciliation – Income Statement Aquila European Renewables Income Fund (AERIF Plc) Income Statement (EUR k) FY21 FY20 AERIF Plc 3 (Loss)/gain on investments 19,236 (3,959) Shareholder 1 2 Net foreign exchange losses (7) (12) Dividends Loans 1 Interest income 11,783 6,194 100% Tesseract Holdings 3
Slide 49: Reconciliation – Balance Sheet
Reconciliation – Balance Sheet Aquila European Renewables Income Fund (AERIF Plc) Balance Sheet (EUR k) FY21 FY20 AERIF Plc Assets Shareholder 1 Cash 94,275 121,014 Equity 2 Loans Trade and other receivables 9,298 5,763 100% 3 Portfolio value 316,953 229,982 Tesseract Holdings 3 Limited Liabilities
Slide 50: Reconciliation – Portfolio Value and NAV
Reconciliation – Portfolio Value and NAV EUR k FY21 FY20 Operating assets 225,873 181,211 Construction assets 91,081 48,771 Fair value of investments 316,953 229,982 Cash 94,275 121,014 Total assets 411,229 350,996 Other assets and liabilities 6,215 (34,093) Net Asset Value 417,443 316,903 Ordinary
Slide 51: Asset Acquisition and Economic Transfer Dates
Asset Acquisition and Economic Transfer Dates Asset Acquisition Date Economic Transfer Date Tesla Jul 2019 Jan 2019 Sagres Jul 2019 Jan 2018 Holmen II Jul 2019 Jan 2019 Olhava Sep 2019 Aug 2019 Svindbaek I Dec 2019 Jan 2020 Svindbaek II Mar 2020 Jan 2020 The Rock Jun 2020 Jun 2020 Benfica III Oct 20
Slide 52: Net Asset Value Sensitivity
Net Asset Value Sensitivity Impact on NAV per Ordinary Share (31 December 2021) Power Prices (+/- 10%) Energy Yield (p10/p90 10 years) Inflation (+/-0.5%) Discount Rate (+/- 0.5%) OpEx (+/- 10%) Asset Life (+/- 1 year) -10c -8c -6c -4c -2c 0c 2c 4c 6c 8c 10c cents per share © 2022 AQUILA CAPITAL 52
Slide 53: Valuation Assumptions
Valuation Assumptions Item Description Discount Rates • Typical components of the discount rate are risk free rates, country-specific and asset-specific risk premia • Asset-specific premia take into account other risk factors, such as construction Power Prices • Wind/Solar PV: average of two power p
Slide 54: Terms of the Fund
Terms of the Fund Aquila European Renewables Income Fund Plc Fund structure UK-domiciled closed-end investment company Listing Premium Segment of the London Stock Exchange Ticker / ISIN in EUR / SEDOL AERI / GB00BK6RLF66 / BK6RLF6 Ticker / ISIN in GBP / SEDOL AERS / GB00BK6RLF66 / BJMXQK1 Currency F
Slide 55: Contact Details
Contact Details EMEA Asia APAC Hamburg (HQ) Senningerberg Zurich London Singapore Valentinskamp 70 Airport Center Luxembourg AQ Investment AG 20th Floor, Leaf B 138 Market Street 20355 Hamburg 5, Heienhaff Poststrasse 3 Tower 42 #15-03 Capita Green Tel.: +49 (0) 40 87 50 50-100 1736 Senningerberg 80
Slide 56: Important Notice
Important Notice FOR INSTITUTIONAL/PROFESSIONAL INVESTORS ONLY. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA, OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE
Slide 57: Important Notice (cont’d)
Important Notice (cont’d) The information contained in this document is given at the date of its publication (unless otherwise marked) and may be incomplete and subject to change. In particular certain figures contained in this presentation, including financial information, are unaudited and may be
Slide 58: Important Notice (cont’d)
Important Notice (cont’d) The Fund is incorporated and registered in England and Wales as a public company limited by shares under the Companies Act 2006 (as amended). A prospectus has been issued for the Fund, which is, together with further documents and information available free of charge via we
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