SDCL Efficiency Income Trust PLC · LSE:SEIT
SDCL Efficiency Income Trust — SDCL Energy Efficiency Income Trust — H1 FY2022 Earnings Presentation
50 slides from SDCL Efficiency Income Trust's earnings presentation, Dec 10, 2021
Slide 1: Interim Results Presentation: Six Months to 30 September 2021
SDCL Energy Efficiency Income Trust plc Interim Results Presentation: Six Months to 30 September 2021 10 December 2021
Slide 2: Contents
Contents 1. Overview and Highlights Investment Manager Presentation Team 2. Portfolio Update 3. Financial Results Jonathan Maxwell, CEO 4. Summary Remarks Established SDCL in 2007 5. Appendices a. Valuation, Sensitivities, FX, 25 years’ experience in international Debt and ESG financial markets,
Slide 3: Overview and Highlights
Overview and Highlights 3
Slide 4: The Role of Energy Efficiency – COP26 Takeaways
SDCL Energy Efficiency Income Trust plc The Role of Energy Efficiency – COP261 Takeaways Glasgow Climate Pact called for energy efficiency alongside clean power generation The world wastes some 2/3rds to 3/4s of energy through inefficiencies on the supply and demand side Energy efficiency may make u
Slide 5: Highlights for Six Months Ended 30 September 2021
SDCL Energy Efficiency Income Trust plc Highlights for Six Months Ended 30 September 2021 Continued growth and diversification NAV per share up 2.0% to 104.5p with Total NAV Return1 of 4.7% in the period and 7.1% p.a. since IPO Performance Dividends: covered by earnings and cash: 2.81p declared
Slide 6: Evolution of the Share Price
SDCL Energy Efficiency Income Trust plc Evolution of the Share Price Robust share price performance in a challenging global market environment NAV/s NAV/s NAV/s NAV/s NAV/s NAV/s NAV/s 98.0p 98.4p 99.0p 101.0p 102.0p 102.5p 104.5p 5 Mar 2021 16 Jul 2021 1 Oct 2020 16 Oct 2020 c.£10m BasePower $31m i
Slide 7: Portfolio Update
Portfolio Update 7
Slide 8: Examples of investments since March 2021
SDCL Energy Efficiency Income Trust plc Examples of investments since March 2021 Contributing to diversification and supporting investment objectives Green Energy Distribution Cleaner and More Efficient Supply Conversion of agricultural waste and food waste, which would otherwise be disposed of, int
Slide 9: Portfolio Development since 31 March 2021
SDCL Energy Efficiency Income Trust plc Portfolio Development since 31 March 2021 Approx. £250 million of investments since 31 March 2021 Investments and Commitments Project Investment/Commitment date Type Location Approx. £m During the six months ended 30 September 2021 SOGA April 2021 New Vietnam1
Slide 10: Key Portfolio Updates
SDCL Energy Efficiency Income Trust plc Key Portfolio Updates SEEIT’s portfolio has continued to perform through the period and has been supported by initiatives from the Investment Manager’s asset management team Project Portfolio Developments During the Period and Asset Management Activities In
Slide 11: Risks and Mitigants
SDCL Energy Efficiency Income Trust plc Risks and Mitigants Due diligence, monitoring and active management of risk Key Risk Description Mitigant Thorough counterparty due diligence at the time of investment, including qualitative and Risks relating to default by quantitative credit assessment1 Cr
Slide 12: SEEIT: Portfolio Composition – September 2021
SDCL Energy Efficiency Income Trust plc SEEIT: Portfolio Composition – September 2021 Diversification by project and technology September 2021 Project exposure 15% 10% 10% 10% 4% 3% 3% 3% 2%2% 20% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Red Rochester Värtan Gas Primary - Cokenergy Onyx 2021
Slide 13: SEEIT: Portfolio Composition – September 2021
SDCL Energy Efficiency Income Trust plc SEEIT: Portfolio Composition – September 2021 Diversification by country and lifecycle stage September 2021 Country exposure 1% 52% 23% 7% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% US Europe UK Asia Pacific Cash Lifecycle stage 70% 7% 5% 18% 0% 10% 20% 3
Slide 14: Illustration of Projected Cash Flows
SDCL Energy Efficiency Income Trust plc Illustration of Projected Cash Flows The long-term, contractual characteristics of projects visibility of long-term cash flows Illustration of projected cash flows assuming an initial portfolio value of c.£950m 150,000 1,200,000 1,100,000 100,000 1,000,000 £00
Slide 15: Financial Results
Financial Results 15
Slide 16: Financial Highlights for Six Months Ended 30 September 2021
SDCL Energy Efficiency Income Trust plc Financial Highlights for Six Months Ended 30 September 2021 2.81p1 Aggregate Dividends 3.3p Earnings per share for 1.2x Dividend Cash Cover Declared for the six months the six months ended 30 for the six months ended 30 ended 30 September 2021 September 2021 S
Slide 17: 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 6 months to 30 September 2021 £000’s 17
Slide 18: Analysis of Change in Portfolio Valuation – Key Items
SDCL Energy Efficiency Income Trust plc Analysis of Change in Portfolio Valuation – Key Items Investments Investments of c.£208 million during the six-month period since March 2021 As per prior periods, to date no material impact on valuation. Minor impacts: o Slower than expected build out of s
Slide 19: Summary Financials
SDCL Energy Efficiency Income Trust plc Summary Financials1 Income Statement Six Months to 30 September 2021 Six Months to 30 September 2020 Total income £28,673k £20,413k Fund expenses & finance costs (£5,624k) (£3,242k) Profit before tax £23,049k £17,171k Earnings per share (pence) 2 3.3p 4.6p Ong
Slide 20: Summary Financials (Continued)
SDCL Energy Efficiency Income Trust plc Summary Financials (Continued)1 Cash Flow Statement Six Months to 30 September 2021 Six Months to 30 September 2020 Cash from investments £27,167k £22,729k Operating and finance costs (£4,899k) (£2,753k) Cash from operations £22,268k £19,977k Equity issuance (
Slide 21: Summary Remarks
Summary Remarks 21
Slide 22: Summary Remarks
SDCL Energy Efficiency Income Trust plc Summary Remarks Active period with asset management initiatives, new investments made and a strong pipeline of new opportunities being evaluated Net asset value (“NAV”) growth of 2.0p per share to 104.5p at 30 September 2021 Interim dividends paid to share
Slide 23: Appendices
Appendices 23
Slide 24: a. Valuation, Sensitivities, FX, Debt and ESG
SDCL Energy Efficiency Income Trust plc / A unique investment opportunity a. Valuation, Sensitivities, FX, Debt and ESG 24
Slide 25: Summary of Valuation Methodology
SDCL Energy Efficiency Income Trust plc Summary of Valuation Methodology Discounted Cash Flow (“DCF”) methodology applied to portfolio cash flows, with fair value of the Company’s investments in Energy Efficiency Projects calculated in accordance with IPEV1 guidelines where appropriate to comply w
Slide 26: Breakdown of Debt Outstanding – September 2021
SDCL Energy Efficiency Income Trust plc Breakdown of Debt Outstanding – September 2021 Relatively low gearing limits and levels compared to other infrastructure investment companies GBPm2 Current Borrowing Limits Target medium term borrowing of up to 35% of NAV Project Debt Borrowing of up to 65
Slide 27: SEEIT: Key NAV Sensitivities
SDCL Energy Efficiency Income Trust plc SEEIT: Key NAV Sensitivities Based on portfolio position at 30 September 2021 Discount Rates + / - 50 bps Negative change to assumption Corporate Tax + / - 500 bps Inflation - / + 50 bps Positive change to assumption FX + / - 10% (5.0p) (4.0p) (3.0p) (2.0p) (1
Slide 28: SEEIT: Foreign Exchange Hedging
SDCL Energy Efficiency Income Trust plc SEEIT: Foreign Exchange Hedging The key objective of managing FX risk is to minimise volatility in the NAV from movements in foreign exchange rates SEEIT’s hedging strategy seeks to protect both the income and capital elements of the portfolio from movements i
Slide 29: Environmental, Social and Governance
SDCL Energy Efficiency Income Trust plc Environmental, Social and Governance SEEIT released its second ESG Report in November 2021 SEEIT ESG Principles Association, Accreditation & Alliance SDCL Membership Aiding the transition to a low carbon economy Minimising environmental footprint of operations
Slide 30: Responsible Investing and Sustainability in Practice
SDCL Energy Efficiency Income Trust plc Responsible Investing and Sustainability in Practice Sustainability at the heart of SEEIT’s investment strategy SEEIT’S KEY SDGs The United Nations’ Sustainable Development Goals (“SDGs”) Every project within SEEIT’s portfolio aim to address the world’s most
Slide 31: b. Portfolio and New Investments in the Period
SDCL Energy Efficiency Income Trust plc / A unique investment opportunity b. Portfolio and New Investments in the Period 31
Slide 32: Portfolio Characteristics
SDCL Energy Efficiency Income Trust plc Portfolio Characteristics Examples of SEEIT’s diversified portfolio of cost effective, lower carbon and reliable energy solutions Cleaner and More Efficient Supply 5 cogeneration projects for Over 200 on-site solar and steel industry in the US 9 cogeneration p
Slide 33: Portfolio Characteristics
SDCL Energy Efficiency Income Trust plc Portfolio Characteristics Categorising SEEIT portfolio projects Bringing the energy generation close to or at the Cleaner and more efficient supply point of use and as a result, reducing associated generation, transmission and distribution losses Connecting su
Slide 34: Existing Portfolio Overview – December 2021
SDCL Energy Efficiency Income Trust plc Existing Portfolio Overview – December 2021 Scale and diversification achieved through new portfolio additions in line with policy No. of Portfolio No. of Portfolio Investment Acquired Investment Acquired Projects Characteristics Projects Characteristics Distr
Slide 35: Geographical Diversification
SDCL Energy Efficiency Income Trust plc Geographical Diversification Portfolio of projects spanning most U.S. states, the UK, Europe and Asia UK Wide geographical project coverage across the UK: Huntsman Energy Centre Santander UK Lighting – c.530 locations nationwide Moy Park Biomass – 86 boi
Slide 36: Investment: RED Rochester
SDCL Energy Efficiency Income Trust plc Investment: RED Rochester Acquisition of an established district energy system providing essential and efficient utility services to a diversified customer base on one of the largest business parks in the US High level overview Location: Rochester, NY, USA Tec
Slide 37: Investment: Bio Town
SDCL Energy Efficiency Income Trust plc Investment: Bio Town Investment in the form of senior and mezzanine debt in a large-scale green gas-to-grid project in Indiana, US High level overview Location: Reynolds, IN, USA Technology: Highly efficient gas engines & anaerobic digestion technology Stage:
Slide 38: Investment: FES
SDCL Energy Efficiency Income Trust plc Investment: FES Investment in an operational portfolio of LED lighting projects across 42 states in the United States, together with a 50% interest the business that developed the projects High level overview Location: United States Technology: LED Lighting St
Slide 39: Investment: Tallaght Hospital
SDCL Energy Efficiency Income Trust plc Investment: Tallaght Hospital Energy efficiency retrofit at one of Ireland’s largest public sector hospitals to be delivered under an Energy Performance Contract High level overview Location: Dublin, Ireland Multiple Energy Efficiency Measures incl. CHP, LED L
Slide 40: Investment: The LYCRA Company
SDCL Energy Efficiency Income Trust plc Investment: The LYCRA Company Investment in the replacement of the energy efficient chiller system at The LYCRA’s Company’s Singapore facility High level overview Location: Singapore Technology: Industrial Cooling Stage: Construction Commission Date: Q1 2023 D
Slide 41: Investment: SLI
SDCL Energy Efficiency Income Trust plc Investment: SLI Debt investment alongside other investment partners to fund the energy efficiency measures in the 303 Battery Street building in Seattle, Washington, US. High level overview Location: Seattle, WA, USA Technology: Energy efficiency, solar, contr
Slide 42: Investment: SOGA
SDCL Energy Efficiency Income Trust plc Investment: SOGA 4.5MWp portfolio of operational commercial and industrial rooftop solar systems at multiple sites in Vietnam High level overview Location: Vietnam (via Singapore investment vehicle) Technology: Rooftop Solar PV Stage: Operational and late deve
Slide 43: c. Board and Investment Manager Overview
SDCL Energy Efficiency Income Trust plc / A unique investment opportunity c. Board and Investment Manager Overview 43
Slide 44: Highly Experienced Independent Board of Directors
SDCL Energy Efficiency Income Trust plc Highly Experienced Independent Board of Directors The Board has commenced recruitment for a fifth Director to join in early 2022 Tony Roper Helen Clarkson Christopher Knowles Emma Griffin Non-Executive Chair Chair of Audit Committee, Senior Independent Directo
Slide 45: SDCL Overview
Sustainable Development Capital LLP SDCL Overview SDCL is a London based investment firm with a proven track record of investment in energy efficiency and decentralized energy generation projects in the UK & Europe, North America and Asia SDCL Background Established in 2007, SDCL is an investment
Slide 46: SDCL: Overview of Investment Manager Team
SDCL Energy Efficiency Income Trust plc SDCL: Overview of Investment Manager Team Investment Committee Jonathan Maxwell Purvi Sapre Eugene Kinghorn Joseph Muthu Neil Sweeney CEO & IC Chair Fund Manager CFO COO Risk & Compliance Asset Management & ESG Members of Investment Team International Manageme
Slide 47: Asset and Operational Management
SDCL Energy Efficiency Income Trust plc Asset and Operational Management Active asset management conducted by the Investment Manager, supported by operational management at the project level Investment Manager Level Asset Management led by four dedicated senior staff with support from the investme
Slide 48: How SDCL Sources and Diligences Investments
SDCL Energy Efficiency Income Trust plc How SDCL Sources and Diligences Investments SDCL has a proven track record of identifying attractive energy efficiency assets and executing a detailed due diligence process ahead of acquisition Sourcing and Analysis Diligence Evaluation & Approval Investment P
Slide 49: 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 50: Important notice
SDCL Energy Efficiency Income Trust plc Important notice This presentation is only addressed to and directed at: (a) persons in member states of the European Economic Area ("Member States") who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation, provided that t
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