SDCL Efficiency Income Trust PLC · LSE:SEIT
SDCL Efficiency Income Trust — SDCL Energy Efficiency Income Trust — H1 FY2024 Earnings Presentation
34 slides from SDCL Efficiency Income Trust's earnings presentation, Dec 4, 2023
Slide 1: Interim Results Presentation: 6 Months to 30 September 2023
SDCL Energy Efficiency Income Trust plc Interim Results Presentation: 6 Months to 30 September 2023 4 December 2023
Slide 2: Contents and Investment Manager Presentation Team
SDCL Energy Efficiency Income Trust plc Contents 1. Overview and Highlights Investment Manager Presentation Team 2. Financial Results 3. Portfolio Update Jonathan Maxwell, CEO Purvi Sapre, Fund Manager 4. Summary Remarks 5. Appendices Established SDCL in 2007 Fund Manager of SEEIT a. SEEIT Key M
Slide 3: 1. Overview and Highlights
SDCL Energy Efficiency Income Trust plc 1. Overview and Highlights 3
Slide 4: Highlights for the Period Ended 30 September 2023
SDCL Energy Efficiency Income Trust plc Highlights for the Period Ended 30 September 2023 Challenging financial market conditions leading to a decline in NAV Net Asset Value (“NAV”) Portfolio valuation Investment cash inflow Total Gearing 44% (of NAV) per share of 90.6p of £1,066 million from the po
Slide 5: Addressing the share price discount
SDCL Energy Efficiency Income Trust plc Addressing the share price discount Board and manager focused on improving the attractiveness of SEEIT SHARE PRICE DISCOUNT 1 ▲ NAV per share is ~45% higher than the current share price ▲ The current share price offers a 10% dividend yield ACTIONS TO CLOSE THE
Slide 6: 2. Financial Results
SDCL Energy Efficiency Income Trust plc 2. Financial Results 6
Slide 7: NAV Per Share Bridge
SDCL Energy Efficiency Income Trust plc NAV Per Share Bridge Analysis of change in NAV during the period ended 30 September 2023 3.3 Discount rate increase of 1.0%, mainly Portfolio performance of 3.3p is lower driven by rising interest rates, reducing than expected owing to a more cautious NAV by 1
Slide 8: Unlevered weighted average discount rate movements
SDCL Energy Efficiency Income Trust plc Unlevered weighted average discount rate movements Discount rate increases were the primary factor reducing valuation Whole portfolio Risk premium movements reflect the net of: Change De-risking of a project’s outlook such as through bringing into operations
Slide 9: SEEIT: Key NAV Sensitivities
SDCL Energy Efficiency Income Trust plc SEEIT: Key NAV Sensitivities Based on investment portfolio at 30 September 2023 2 Key Portfolio Sensitivities (pence per share) +/- 100bps Inflation Sensitivity (pence per share) Discount Rates + / - 50 bps 1 -3.6p +3.9p -4.1p +4.7p Portfolio (September 23) 2
Slide 10: Consolidated Debt
SDCL Energy Efficiency Income Trust plc Consolidated Debt The Company has a prudent approach to gearing Net Asset Value Gearing ratio includes portfolio-level debt with no recourse to SEEIT Company level gearing (RCF)1 10% Prudent gearing levels enable SEEIT’s portfolio to borrow where Portfolio
Slide 11: 3. Portfolio Update
SDCL Energy Efficiency Income Trust plc 3. Portfolio Update 11
Slide 12: Portfolio Characteristics
SDCL Energy Efficiency Income Trust plc Portfolio Characteristics SEEIT’s diversified portfolio of cost effective, lower carbon and reliable energy solutions can be split into 3 categories, illustrated by the below examples Cleaner and More Efficient Supply Cleaner and More Efficient Supply Bringing
Slide 13: Portfolio Performance
SDCL Energy Efficiency Income Trust plc Portfolio Performance Trading and events during the period and focus looking forward Project Key Updates Asset Management Focus ↓ Unusual weather and changes in large customer activity levels result in lower projected volumes and EBITDA for the full Securing
Slide 14: Portfolio Performance
SDCL Energy Efficiency Income Trust plc Portfolio Performance Trading and events during the period and focus looking forward Project Key Updates Asset Management Focus ↑ Regulatory updates in period more favourable than anticipated Continued optimisation of gas procurement activities to ↑ Expected
Slide 15: SEEIT Portfolio as at 30 September 2023
SDCL Energy Efficiency Income Trust plc SEEIT Portfolio as at 30 September 2023 Diversification by investment, technology, geography and lifecycle stage Investment Diversification1 Solar & Storage Technology exposure1 District Energy Red Rochester 3% CHP (Waste gases / other) 5% 3% UU Solar 16% CHP
Slide 16: 4. Summary Remarks
SDCL Energy Efficiency Income Trust plc 4. Summary Remarks 16
Slide 17: Summary Remarks
SDCL Energy Efficiency Income Trust plc Summary Remarks Challenges Impact of a ‘higher for longer’ rates environment lowering valuations, FTSE 250 company with a together with more cautious approach to valuation of future projected cash flows portfolio valued at over £1bn Opportunities Significant v
Slide 18: 5. Appendices
SDCL Energy Efficiency Income Trust plc 5. Appendices 18
Slide 19: a. SEEIT Key Metrics
SDCL Energy Efficiency Income Trust plc a. SEEIT Key Metrics 19
Slide 20: Market Drivers of Energy Efficiency
SDCL Energy Efficiency Income Trust plc Market Drivers of Energy Efficiency The macroeconomic landscape is driving demand for energy efficiency solutions High Energy Costs and Concerns over Energy Focus on Mitigating Policy Support for Market Volatility Security Climate Change Energy Infrastructure
Slide 21: Analysis of Change in Portfolio Valuation - Bridge
SDCL Energy Efficiency Income Trust plc Analysis of Change in Portfolio Valuation - Bridge Portfolio valuation change for the six months to 30 September 2023 Portfolio Valuation of £1,066m forms key part of balance sheet – reconciles to NAV of £983m through cash and working capital of SEEIT Holdco
Slide 22: Analysis of Change in Portfolio Valuation – Key Items
SDCL Energy Efficiency Income Trust plc Analysis of Change in Portfolio Valuation – Key Items Discount rates Investment Commentary Valuation 100bps increase in weighted average impact discount rates since March 2022 RED In-depth review of actual results and how certain long- (£26m) Rochester term
Slide 23: SEEIT Targets Progressive Dividends
SDCL Energy Efficiency Income Trust plc SEEIT Targets Progressive Dividends Dividends per share have grown year-on-year since IPO Key Comments Dividends per Share since IPO Dividends have progressively increased each year, in line with guidance provided at IPO 6.24p Dividend target for year 6.00
Slide 24: Large and Diversified Portfolio
SDCL Energy Efficiency Income Trust plc Large and Diversified Portfolio FTSE 250 company which has achieved substantial scale since its IPO in December 2018 Mar-192 Mar-20 Mar-21 Mar-22 Mar-23 Sep-23 NAV (£ millions) 98 324 694 1,073 1,125 983 NAV (p per share) 98.4 101.0 102.5 108.4 101.5 90.6 NAV
Slide 25: SEEIT: Foreign Exchange Hedging
SDCL Energy Efficiency Income Trust plc SEEIT: Foreign Exchange Hedging Key objective of managing FX risk is to minimise volatility in NAV from movements in FX rates SEEIT’s hedging strategy has been successful in protecting the NAV from material movements in foreign exchange rates, and providing st
Slide 26: Summary Financials
SDCL Energy Efficiency Income Trust plc Summary Financials1 Income Statement Six months to 30 Sep 2023 (£m) Six months to 30 Sep 2022 (£m) Total income 2 (79.5) (6.0) Fund expenses & finance costs (9.6) (7.5) Loss before tax (89.1) (1.5) Loss per share (p) 3 (8.1) (0.2) Ongoing charges 4 1.07% 0.93%
Slide 27: Summary Financials (cont'd)
SDCL Energy Efficiency Income Trust plc Summary Financials (cont’d)1 Cashflow Statement Six months to 30 September 2023 (£’m) Six months to 30 September 2022 (£’m) Cash from investments2 47.5 43.3 Operating and finance costs (10.4) (7.4) Cash from operations 37.1 35.9 Equity issuance (net of costs)
Slide 28: b. SEEIT Portfolio, New Investments and Overview
SDCL Energy Efficiency Income Trust plc b. SEEIT Portfolio, New Investments and Overview 28
Slide 29: Existing Portfolio Overview
SDCL Energy Efficiency Income Trust plc Existing Portfolio Overview Scale and diversification achieved through new portfolio additions in line with policy Key Supply Demand Distribution IPO: Dec-18 Mar-19 Jun-19 Sep-19 Nov-19 Apr-21 Dec-201 Oct-20 Sep-20 Aug-20 Feb-20 2 CapShare May-21 Sep-21 Jul-21
Slide 30: c. Investments made during the period
c. Investments made during the period 30
Slide 31: Portfolio Development since 31 March 2023
SDCL Energy Efficiency Income Trust plc Portfolio Development since 31 March 2023 c.£93m of investment commitments during the 6 month period to 30 September 2023 Project Investment/Commitment Date Type Location Investment/Commitment Amount Investment activity during the year CPP June 2023 Inorganic
Slide 32: New investment: Rondo Energy
SDCL Energy Efficiency Income Trust plc New investment: Rondo Energy Investment in a thermal energy storage solution developer in California High level overview Location: California, USA Technology: Thermal energy storage Stage: Corporate Investment Capacity: n/a Investment size: $3 million in Rondo
Slide 33: Important notice
SDCL Energy Efficiency Income Trust plc Important notice THIS PRESENTATION IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. THIS PRESENTATION IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFR
Slide 34: Important notice
SDCL Energy Efficiency Income Trust plc Important notice This presentation does not constitute or form part of any offer for sale or subscription or any solicitation of any offer to buy or subscribe for any securities and neither this document nor any part of it forms the basis of or may be relied o
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