Etrion Corp. · OTC:ETRXF
Etrion — Investor Presentation (April 2015)
37 slides from Etrion's investor presentation, April 2015
Slide 1: Corporate Presentation
Corporate Presentation April 2015 1
Slide 2: Disclaimer
DISCLAIMER These materials and the information contained herein are being presented by Etrion Corporation (the “Company”). By attending a meeting where these materials are presented, or by reading them, you agree to be bound by the following limitations and notifications. These materials are strictl
Slide 3: Corporate Overview
CORPORATE OVERVIEW 3
Slide 4: The Lundin Group
THE LUNDIN GROUP Etrion is part of the Lundin Group of Companies, 10 publicly-traded companies in the mining and energy sectors The companies range from exploration stage to advanced development and production, operating in over 30 countries worldwide with a combined market capitalization of ove
Slide 5: Etrion Corporation
ETRION CORPORATION Company Overview Financial Summary • Independent power producer (IPP) that develops, builds, owns and operates ground-based solar photovoltaic (PV) power generation plants Recent Share Price (TSX/OMX: ETX) C$0.43 / SEK 3.04 in three key markets (Italy, Chile and Japan) Shares Outs
Slide 6: Etrion at a Glance
ETRION AT A GLANCE Operational • 60 MW of installed capacity in Italy operational since 2011; 70 MW in Chile operational since 2014 Excellence • 17 solar power plants in Italy consistently perform above plan with 99.7% availability in 2014 • Utility-scale solar projects built using top-tier module p
Slide 7: Utility-Scale Solar Power Generation
UTILITY-SCALE SOLAR POWER GENERATION Goal: Build, own and operate solar electricity plants at lowest cost per kWh Borgo Piave, Lazio, Italy – 3.5 MW Etrion Lazio Atacama, Chile – 70 MW Salvador Montalto, Lazio, Italy – 24 MW Cassiopea and 8.8 MW Centauro Competitive Advantages of Solar Power Easy to
Slide 8: Downstream Player in the Solar Energy Market
DOWNSTREAM PLAYER IN THE SOLAR ENERGY MARKET PARTS SERVICES RAW PROJECT ASSET (MODULES, (ENGINEERING, DEVELOPMENT MATERIALS FINANCE MANAGEMENT INVERTERS) CONSTRUCTION) • Solar facilities are developed in new markets Raw materials (e.g., Solar cells are then Third parties polysilicon) assembled
Slide 9: Business Model – Key Drivers
BUSINESS MODEL – KEY DRIVERS Key drivers Rationale STABLE REVENUES 1. Long-term contracts Premium price for solar electricity generation under long-term contracts (i.e., FiT or PPA) REVENUE 2. Solar irradiation Annual solar irradiation varies less than 10% per year Economic growth increasing p
Slide 10: Solar Project Cash Flow Creation
SOLAR PROJECT CASH FLOW CREATION Example of Solar Project Cash Flow Creation 100% 15% 33% 17% 10% 25% Revenues Operating cost Interest payment Debt repayment State and local Free Cash Flow taxes to Equity High solar irradiation Minimal variable Up to 85% of total Up to 85% of total Tax exp
Slide 11: Solar Project Value Creation
SOLAR PROJECT VALUE CREATION Example of Leveraged Solar Project Value Creation Non-Recourse Project Debt Equity Total Investment Development Distributions Asset Management Residual Value Total Value Premium Notes: (1) Total investment assumes illustrative project in Etrion’s pipeline with 75% levera
Slide 12: Strong Management Team
STRONG MANAGEMENT TEAM Marco A. Northland (Chief Executive Officer and Director) - has extensive experience leading growth companies. Prior to co-founding Etrion in 2008, he was responsible for establishing and overseeing European operations for SunPower Corporation, a leading U.S. solar energy comp
Slide 13: Experienced Non-Executive Board Members
EXPERIENCED NON-EXECUTIVE BOARD MEMBERS Ian H. Lundin (Chairman) - co-leads the investment initiatives of the Lundin Group and serves on the board of several Lundin companies, specifically, Chairman of Lundin Petroleum AB. In 1984, he joined the Lundin Group as drilling manager for International Pet
Slide 14: Industry Overview
INDUSTRY OVERVIEW 14
Slide 15: Global Solar Installed Capacity (2014)
GLOBAL SOLAR INSTALLED CAPACITY (2014) Total global solar installed capacity of 195 gigawatts (GW) in 2014 Solar represents less than 4% of global installed power generation capacity Annual solar installation growth projected at close to 60 GW in 2015 Source: Bloomberg New Energy Finance. Note
Slide 16: Strong Outlook for Solar PV Industry
STRONG OUTLOOK FOR SOLAR PV INDUSTRY Cumulative Solar PV Installed Capacity (GW) Solar PV has experienced significant growth over the past decade and is on the way to becoming a 370 mature and mainstream source of electricity 320 European countries have historically dominated the solar PV market
Slide 17: Accelerated Decrease in Required Capex
ACCELERATED DECREASE IN REQUIRED CAPEX Evolution of Utility-Scale Solar PV Capex (US$ / W) $5.85 As all-in solar installation costs have fallen significantly in recent years, solar PV is perfectly positioned to capitalize on the significant advantages inherent in the technology 1.80 Solar is now
Slide 18: Asset Overview
ASSET OVERVIEW 18
Slide 19: Etrion's Global Platform
ETRION’S GLOBAL PLATFORM Geographic diversification across Italy, Chile and Japan Revenue diversification across FiT, PPAs and spot (merchant) pricing Etrion is constantly evaluating new opportunities in high-growth regions 19
Slide 20: Country Snapshot
COUNTRY SNAPSHOT ITALY CHILE JAPAN S&P: BBB- S&P: AA- S&P: AA- Sovereign Credit Rating Moody’s: Baa2 Moody’s: Aa3 Moody’s: A1 Fitch: BBB+ Fitch: A+ Fitch: A+ 10-Year Bond Yield 1.17% 4.34% 0.41% Inter-annual CPI (Dec-2014) 0.0% 4.6% 2.4% Corporate Income Tax Rate 31.4% 20.0% 35.6% (previous 20-year
Slide 21: Italy: Operating Assets
ITALY: OPERATING ASSETS 21
Slide 22: Italian Power Market
ITALIAN POWER MARKET Overview Italy is a leading producer of electricity from renewable energy sources, and it is one of the largest producers of solar energy in the world The solar PV sector has historically been the dominant renewable energy technology due to the Italian solar Feed-in-Tariff (
Slide 23: Italian Operating Assets
ITALIAN OPERATING ASSETS Project Sites Capacity Technology EPC/O&M Modules Inverters (MW)(2) Contractor Cassiopea 1 24.0 Single axis SunPower SunPower SMA Helios ITA-3 2 10.0 Single axis ABB Yingli Bonfiglioli Centauro 1 8.8 Single axis SunPower SunPower SMA Helios ITA 7 6.4 Single axis Solon/ABB So
Slide 24: Chile: Operating Asset and Pipeline
CHILE: OPERATING ASSET AND PIPELINE 24
Slide 25: Chilean Power Market
CHILEAN POWER MARKET Overview Chile – Installed Capacity by Source 2013 In 2013, Chile had 18 GW of total installed power capacity, of 17% Wind 21% 2% which large hydro and natural gas made up more than 50% Biomass & Waste Renewables accounted for approximately 8% of installed capacity, 2% 8% wi
Slide 26: Chilean Operating Asset
CHILEAN OPERATING ASSET SALVADOR (70 MW) Project Details Sites 1 Region Atacama Capacity 70 MW Ownership 70%(1) Technology Single axis Module SunPower EPC SunPower O&M SunPower Irradiation Yield 2,916 kWh/kWp Atacama, Chile – 70 MW Salvador Merchant project in the SIC (15-year PPA Revenue Stream for
Slide 27: Chilean Solar Pipeline
CHILEAN SOLAR PIPELINE CONTRACT # COUNTRY REGION PROJECT NAME SITES MW STATUS OWNERSHIP SHOVEL-READY REGIME - Land concession assigned; decree expected in four months. SING Aguas Blancas Merchant + - Environmental impact assessment received. 1 Chile 1 32 100% Q1-2015 (Northern) 2A PPA - Interconnect
Slide 28: Japan: Assets Under Construction and Development
JAPAN: ASSETS UNDER CONSTRUCTION AND DEVELOPMENT 28
Slide 29: Japanese Power Market
JAPANESE POWER MARKET Overview Japan – Installed Capacity by Source 2013 1% 7% Japan is one of the largest solar PV markets in the world today with 21% 25.9 GW of installed capacity in 2014 10% Relatively low-risk jurisdiction with an attractive solar FiT 2% 1% program (¥40 / US$0.40, ¥36 / US$0
Slide 30: Hitachi High-Tech/Etrion Partnership
HITACHI HIGH-TECH/ETRION PARTNERSHIP SHIZUKUISHI MITO Sites 1 5 Region North (Iwate) Central (Ibaraki) Capacity 24.7 MW 9.3 MW Ownership 87%(1) 87%(1) Technology Fixed-tilt Fixed-tilt SHIZUKUISHI, 24.7MW Module Canadian Solar Canadian Solar EPC Hitachi High-Tech Hitachi High-Tech O&M Hitachi High-Te
Slide 31: Japanese Solar Pipeline
JAPANESE SOLAR PIPELINE CONTRACT # COUNTRY REGION PROJECT NAME SITES MW STATUS OWNERSHIP SHOVEL-READY REGIME - FiT secured. Greenfield 1 Japan South ¥36 FiT 1 25 - Land contract secured. 85% Q1-2016 Project 1 - Grid impact studies in progress. - FiT secured. Greenfield 2 Japan Central ¥32 FiT 1 14 -
Slide 32: Summary
SUMMARY ( etrion
Slide 33: Overall Project Portfolio – Potential Growth
OVERALL PROJECT PORTFOLIO – POTENTIAL GROWTH MW Net Installed Capacity Evolution (3) 119 (2) 357 350 More than 5x growth in installed capacity 300 250 27 72 200 24 Aguas Blancas 2B (2) 48 Aguas Blancas 2A&C 150 22 (1) (2) 49 8 100 60 50 0 Italy Chile Japan Japan Chile Chile Japan Total Salvador Mito
Slide 34: Conclusion
CONCLUSION Attractive returns in downstream solar power generation sector Global Platform Well positioned to expand within Europe, Asia and the Americas Systems in place to effectively manage operations across multiple jurisdictions Proven ability to secure high-return projects and attract s
Slide 35: Appendix
APPENDIX 35
Slide 36: Etrion Equity Research Coverage
ETRION EQUITY RESEARCH COVERAGE Target Target Broker Location Date of Last Report Price Price Recommendation (CAD) (SEK) 1 ABG Sundal Collier Stockholm March 23, 2015 $0.44 3.0 Hold 2 Cormark Securities Toronto March 20, 2015 $0.80 5.5 Buy 3 Jacob Securities Toronto March 20, 2015 $0.50 3.4 Hold 4 N
Slide 37: Contact Details
Contact Details Etrion Corporation Rue de la Rôtisserie 1 1204 Geneva Switzerland Phone: +41 22 715 20 90 Email: info@etrion.com Website: www.etrion.com 37