Azure Power Global Limited · OTC:AZREF
Azure Power Global — Investor Presentation (September 2019)
35 slides from Azure Power Global's investor presentation, September 2019
Slide 1: Investor Presentation
Investor Presentation Azure Power
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This information contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating guidance, op
Slide 3: Executive Summary
Executive Summary 2
Slide 4: Entrepreneurship | Excellence | Honesty | Socially Responsible
CF Entrepreneurship | Excellence | Honesty | _ Socially Responsible Azure Power
Slide 5: New Management Commitment to Capital Discipline
New Management Commitment to Capital Discipline Financial discipline is the foundation of our success 1 Delivery of current pipeline on time and on budget 2 Enhance returns on invested capital with efficiency gains and cost optimisation 3 Optimize capital structure to lower risk and cost of capital
Slide 6: Azure Power Overview (AZRE: NYSE)
Azure Power Overview (AZRE: NYSE) A Leading Pan Indian Solar Power Developer Portfolio of 3,351 MWs(1): 1,789 MWs Operational(1), 1,562 MW Contracted Pipeline(2) 3,148 MWs 203MWs Utility-Scale Projects Azure Roof Power •• Founded in 2008, built India’s first private utility-scale solar project in 20
Slide 7: Total 3,351 MW Portfolio Capacity, With 83% in High Irradiation Zone
Total 3,351 MW Portfolio Capacity(1), With 83% Portfolio in High Irradiation Zone ~83% in High Irradiation Zone(2) ~14%(2) in Mid Irradiation Zone Focus is on Strong Counterparty Credit Punjab 214 MW BBB- to BBB+ Rajasthan A to AAA 3% Uttar Pradesh 475 MW 77% 80% of the portfolio is 100 MW 1,200 MW
Slide 8: Azure's Integrated Approach Lowers Risk and Enhances Project Returns
Azure’s Integrated Approach Lowers Risk and Enhances Project Returns • Attractive And Sustainably High IRRs(1) with ~1.8 GW(2) Operational Portfolio spread across 24 states • One of the Largest Solar Portfolio with Tariffs Higher than Lowest Bids in the Market Returns Development Construction Operat
Slide 9: Superior Technology – Continue To Lower Costs While Retaining High Quality Assets
Superior Technology – Continue To Lower Costs While Retaining High Quality Assets World Class Technology Partners Strong supplier relationships > $1.0 Bn in supplier purchases Achieved an 83% cost decline since inception due to value engineering, design and procurement efforts $US/Watt kW 4.00 12,50
Slide 10: EBITDA Expansion & Economies of Scale Driving Profit Growth
EBITDA Expansion & Economies of Scale Driving Profit Growth Growing Portfolio with Strong Contracts in Place Substantial, Contracted Revenue Growth to Portfolio Run-Rate(1),(2) 3,900 $376(4) 500 3,351 Revenues (US $ Million) 1,020 Contracted 2,600 180 42 Under Construction $158 MWs 1,609 $144 1,300
Slide 11: Strong Governance and Disclosure Standards
Strong Governance and Disclosure Standards Only Indian Solar Independent Power Producer listed on NYSE Standards reinforced by listing requirements Strong Corporate Governance Home country SGX-ST SEC & NYSE requirements regulatory requirements that also requiring periodic requirements require regula
Slide 12: Experienced Board Backed by Long Term Marquee Shareholders
Experienced Board Backed by Long Term Marquee Shareholders IFC Global Infrastructure Fund Increased stake in Azure Power to c.41.4% through multiple rounds & Made its first investment in company in 2010 and increased stake open market purchase through multiple rounds with current holding of c.28
Slide 13: Stringent Bidding Standards
Stringent Bidding Standards A Pre-bidding B Project approval process C Project Planning & Development BD department presents the bids and After the bid is won - project initiation e-mails recommendations to Bid Committee where are sent to respective departments for project Prudent project sele
Slide 14: World Class ESG Standards Are Core To Our Business
World Class ESG Standards Are Core To Our Business Environment Social Governance 4.9 million tons of CO2 emission avoided Provided clean water for 66,000+ to date = 3.4 million tons of coal burning people (2) ISO 9001 certification Created 4,650 local jobs (2) NYSE / SGX governance complia
Slide 15: Industry Overview
Industry Overview 14
Slide 16: Industry and Regulatory Update
Industry and Regulatory Update Solar PPA contracts have repeatedly been Industry Update upheld in the highest courts of India Payment security mechanism – Ministry of Power has mandated Curtailment or PPA cancellation would be in direct conflict with GoI’s Discoms to open and maintain adequate Lette
Slide 17: The Solar Advantage in India
The Solar Advantage in India Electricity Usage per Capita (MWh) 12.8 US: ~14x > India Azure’s solar plants have high ~100 mn people without direct availability power source Seasonal Energy Curve Summer Monsoon China: ~5x > India 4.3 India-Demand Peak Low 0.9 Solar-Generation Peak Low USA China India
Slide 18: Federal Government's Capacity Addition Plan & Strong Regulatory Support
Federal Government’s Capacity Addition Plan & Strong Regulatory Support Visibility of 39 GWs of Solar Tenders (1) Solar addition up by 330% in last 2 years (2) States +330% -23% -90% Federal Solar Wind Coal FY14-16 FY17-20 Tariffs(4) are Stable Whilst Module Costs (5) Down 35%+ Installed solar capac
Slide 19: Azure Power Global Operating and Financial Metrics
Azure Power Global Operating and Financial Metrics 18
Slide 20: Continued Growth in Fiscal Q1 FY'20
Continued Growth in Fiscal Q1 FY’20 1,609 MW Operating 3,351 MW Operating & Committed US$ 49.2 mn(4) Revenue 59% increase(1 ) 57% increase(1) 40% increase(1) 700.1 mn kWh Generation US$ 0.58 mn(4) Project Cost/MW (DC) US$ 376.4mn(4) Portfolio Revenue Run Rate(2) 75 % increase(1) 9% reduction(1)(3) 4
Slide 21: Azure Power Delivered 40% Revenue Growth in Q1 FY'20
Azure Power Delivered 40% Revenue Growth in Q1 FY’20 Quarter Ended June 30, % Change (in thousands) Q1 FY’20 vs Q1 FY’19 2018 2019 2019 INR INR US$ Operating Revenue 2,422,539 3,389,313 49,177 40% Cost of Operations 218,230 296,949 4,309 36% # General & Administrative Expenses 248,650 644,658 9,354
Slide 22: A Growing Balance Sheet
A Growing Balance Sheet March 31, 2019 June 30, 2019 (in thousands) (in thousands) INR INR US$ Cash, Cash Equivalents and Current Investments* 10,544,989 11,470,689 166,435 Property, Plant & Equipment, Net 83,444,529 86,705,503 1,258,060 Net Debt# 59,006,817 68,741,690 997,414 ______________________
Slide 23: Reiterating FY'20 Guidance
Reiterating FY’20 Guidance 1,800 – 1,900 MWs Operating INR 12,770 – 13,350 million(1) by March 31, 2020 of Revenue for FY’20 _________________________ 1) US$ 185-194 Mn (at June 28, 2019 exchange rate- INR68.92 to US$1)
Slide 24: Restricted Groups
Restricted Groups 23
Slide 25: Restricted Groups Overview
Restricted Groups Overview Restricted Group I Restricted Group II Highlights Highlights 621 MWs included in the Bond offering 648 MWs included in the Bond offering US$500mn Bond is non amortizing US$350mn non amortizing Bond with cash trap 5.50% Coupon 5.65% Coupon Maturity in 2022 Maturity in 2024
Slide 26: Restricted Groups Have High Offtake Credit and Diversification
Restricted Groups Have High Offtake Credit and Diversification 1 2 Projects in RGs represent Important … With All Projects Operational … Part of Azure’s Operating Assets… Outside RG I 621 MW 520 MW RGs 648 MW RG II 3 Large Offtake to Highest Rated Counterparties and … And Well Positioned to Diversif
Slide 27: Restricted Groups – Financial Overview
Restricted Groups – Financial Overview Restricted Group I Restricted Group II RG I Revenue RG I EBITDA (USD mn) (USD mn) 90 88 78 72 RG II Revenue RG II EBITDA (USD mn) (1) (USD mn) (1) 69 57 63 51 FY'18 FY'19 FY'18 FY'19 Debt to EBITDA (X) FFO/Debt (X) EBITDA/Interest (X) FY'20 FY'21 FY'20 FY'21 6.
Slide 28: Appendix- Industry & Projects Overview
Appendix- Industry & Projects Overview 27
Slide 29: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Adjusted EBITDA is a non-GAAP financial measure. The Company presents Adjusted EBITDA as a supplemental measure of its performance. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance
Slide 30: Reconciliation of Non-GAAP Measures to Comparable GAAP Measures
Reconciliation of Non-GAAP Measures to Comparable GAAP Measures Quarter Ended June 30, (in thousands) 2018 2019 2019 INR INR US$ Net income 29,803 90,157 1,307 Income tax expense 94,581 123,749 1,796 Interest expense, net 1,073,440 1,560,094 22,636 Depreciation and amortization 553,609 623,448 9,046
Slide 31: Projects Commissioned - Utility
Projects Commissioned - Utility As of June 30, 2019 Commercial Duration PPA Capacity DC Capacity Tariff Project Names Operation Off taker of PPA in (MW) (MW) (INR/kWh) Date(1) Years Operational - Utility Punjab 1 (3) Q4 2009 2 2 17.91 NTPC Vidyut Vyapar Nigam Limited 25 Punjab 2.1 (3) Q3 2014 15 15
Slide 32: Projects Commissioned– Utility and C&I
Projects Commissioned– Utility and C&I As of June 30, 2019 Commercial Duration PPA Capacity DC Capacity Tariff Project Names Operation Off taker of PPA in (MW) (MW) (INR/kWh) Date(1) Years Operational – Utility Bihar 1 (4) Q3 2016 10 11 8.39 North & South Bihar Power Distribution Company Ltd 25 Punj
Slide 33: Under Construction and Committed Projects –Utility and C&I
Under Construction and Committed Projects –Utility and C&I As of June 30, 2019 Expected Commercial PPA Capacity Tariff Duration of PPA in Project Names Off taker Operation Date(1) (MW) (INR/kWh) Years(3) Under Construction Rajasthan 5(2, 4) Q3 2019 50 2.48 Solar Energy Corporation of India 25 Mahara
Slide 34: Glossary of Select Terms
Glossary of Select Terms Accelerated Depreciation – Accelerated depreciation can be elected at the project level, such that projects that reach COD in the first half of the year can expense 100% of eligible project costs in year 1, and otherwise can expense 50% of project costs in year 1 and the rem
Slide 35: Thank You
Thank You 34
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