Greencoat UK Wind Plc · LSE:UKW
Greencoat UK Wind — H1 2024 Earnings Presentation
29 slides from Greencoat UK Wind's earnings presentation, July 2024
Slide 1: Half Year Results
Half Year Results July 2024 For Professional Investors Only
Slide 2: H1 2024 Highlights
H1 2024 Highlights £165.4m / 1.5x(1) Cash generation resilient despite below budget output Net cash generation / dividend cover Financials NAV slightly down, reflecting fall in forecast power prices £3,633.2m / 159.3p 39% gross debt to GAV Debt of £2,329m, £600m RCF is partially drawn (£400m) In adv
Slide 3: UKW – Addressing a Convergence of Needs
UKW – Addressing a Convergence of Needs Designed to deliver RPI linked Addressing the growing need for dividend and real NAV growth asset recycling as market scaled Providing long term growth and Investors Industry Allowing utilities to free-up inflation protection capital to build new proje
Slide 4: UK Wind Market Developments
UK Wind Market Developments Labour target a 4x expansion in offshore wind to ~60GW 70 Labour ambition to deliver a net zero economy by GW 60 2050 and zero-carbon electricity grid by 2030. Aim to 50 double onshore wind, triple solar and quadruple 27.0 40 offshore wind by 2030 30 5.0 60.0 Signific
Slide 5: Simple Business Model
Simple Business Model 6-49 wind Generating capacity UKW generates a net 10% return farms increased from 127 to to investors at NAV 2,007MW since IPO Total reinvestment Dividend increases with RPI Equity 11 consecutive annual Total renewable increases of RPI or better 26.1TWh electricity produced
Slide 6: Track Record of Consistent Delivery
Track Record of Consistent Delivery Period Net Cash Generation Cash Dividend Reinvestment Dividend Cover 2013(1) £21.6m £3.9m £17.7m 2014 £32.4m £20.8m £11.6m 1.6x 2015 £48.3m £35.9m £12.4m 1.7x(2) 2016 £49.0m £35.1m £13.9m 1.4x 2017 £80.1m £52.3m £27.8m 1.5x 2018 £117.3m £72.3m £45.0m 1.6x 2019 £12
Slide 7: Investment Portfolio
Investment Portfolio Generating sufficient electricity to power 2.3(1) million homes Note: (1) homes powered based on average annual household energy consumption (2.7MWh p.a. (Ofgem)), and reflects the portfolio’s annual electricity generation 7
Slide 8: Portfolio Overview
Portfolio Overview Assets Hornsea 1 (16%) Humber Gateway (9%) London Array (8%) Clyde (7%) Walney (7%) South Kyle (6%) Stronelairg (5%) Corriegarth (4%) Burbo Bank Extension (3%) Brockaghboy (3%) Other (32%) Well diversified generating portfolio of 2,007MW – 7% market share Note: breakdown by value
Slide 9: Financial Performance
: — Financial Performance
Slide 10: Net Asset Value
Net Asset Value Dividend payments of £136.4m include £28.6m top-up element for Q4 2023 dividend 1.5x dividend cover(1) 2024 full year dividend cover expected to be at a similar level Power price movements Short term power prices largely unchanged (down in Q1, up in Q2) Slight reduction i
Slide 11: Cash Flow
Cash Flow Resilient dividend cover of 1.5x(1) Note: (1) adjusted by £28.6m for additional dividends paid to bring the 2023 total dividend to 10p per share 11
Slide 12: Key Themes
Key Themes
Slide 13: Power Prices
Power Prices Modelled power price The portfolio captured an average price of £56.84/MWh in H1, an 11% discount to average N2EX index price of £63.77/MWh Regular update of biannual long term power price curve from advisors incorporated in Q2 Short term power prices largely unchanged over H1 S
Slide 14: Portfolio Generation
Portfolio Generation H1 2024 portfolio generation was 2,654GWh, 15% below budget Principally as a result of low wind resource and availability OFTO outage at Hornsea 1 represented about 0.2x reduction dividend cover for H1 2024 Hornsea 1 OFTO outage Cable fault in mid January impacted one
Slide 15: Overview of Debt
Overview of Debt Total debt of £2.33bn Weighted average Total debt £2.33bn cost of debt 4.6% £1,390m term debt £400m RCF (£600m facility) £539m Hornsea 1 amortising debt; Amortising debt £539m Annual amortising ~£50m repayment of £41m during H1 payments Gearing unchanged at 39% Average c
Slide 16: Portfolio Returns
Portfolio Returns UKW levered portfolio IRR unchanged 12.0% Levered portfolio IRR increased 2% in last two years and is 1% 10.0% above IPO levels 10% net return to investors at NAV 8.0% TO UPDATE RPI inflation linked Almost 6% above the 10-year gilt 6.0% at 4.1%(1) The 10% net total retu
Slide 17: Capital Allocation
Capital Allocation Over £1bn of potential excess cashflow in next 5 years Acquisitions, Dividends Share buybacks investments and Repay debt disposals Increased 2024 UKW buyback Acquisitions graded Paying down debt from dividend target to 10p, programme of up to against accretion excess cashflows a 1
Slide 18: ESG Report
ESG Report Greencoat UKW 2023 ESG Highlights from 2023 ESG report Report published May 2024 Reaffirms UKW’s commitment to being a catalyst for positive change in the global fight against climate change Environment • Consideration of environmental sustainability is at the core of the UKW portfoli
Slide 19: Summary
Summary
Slide 20: H1 2024 Highlights
H1 2024 Highlights £165.4m / 1.5x(1) Cash generation resilient despite below budget output Net cash generation / dividend cover Financials NAV slightly down, reflecting fall in forecast power prices £3,633.2m / 159.3p 39% gross debt to GAV Debt of £2,329m, £600m RCF is partially drawn (£400m) In adv
Slide 21: Appendix
Appendix
Slide 22: Independent UK Board
Independent UK Board Lucinda Riches – Chairman Ex-Head of Equity Capital Markets at UBS ECM and financial markets experience Independent board approves all material Nick Winser – Senior Independent Director corporate activity Ex-CEO of National Grid UK Policy and network operations experience UK
Slide 23: Highly Experienced Greencoat UK Wind Team
Highly Experienced Greencoat UK Wind Team Investment Managers Stephen Lilley – nearly 30 years of investment Matt Ridley – 22 years of investment management experience in the infrastructure, utility and experience, including 16 years focused on UK wind renewables sectors in addition to 6 years in th
Slide 24: June 2024 Debt Structure
June 2024 Debt Structure Prudent use of leverage, refinancing discussions at advanced stage 24
Slide 25: Investment Performance (1)
Investment Performance (1) NAV vs RPI 60% growth(1) since listing vs RPI growth of 56% Annual dividend increasing at least with RPI and real NAV preservation Note: (1) per share and adjusted for accrued dividends 25
Slide 26: Investment Performance (2)
Investment Performance (2) Significantly outperformed the FTSE 250 since listing Note: total return from IPO to 31 December 2023 26
Slide 27: ESG Commitments and Reporting
ESG Commitments and Reporting GHG emissions reporting TCFD TCFD related climate disclosures reported for the third time FCA TCFD product level report published ahead of 30th June SDR Work in progress to meet SDR requirements by December 2024 Article 9 fund SFDR Annexes 1 and 5 published
Slide 28: Disclaimer (1)
Disclaimer (1) Important Information This presentation and its contents are confidential. Past Performance is not a guide to future performance and may not be repeated. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES (OR TO ANY US PERSON), AUSTRALI
Slide 29: Disclaimer (2)
Disclaimer (2) Any subsequent offer may only be made in Jersey where the offer is valid in the United Kingdom or Guernsey and is circulated in Jersey only to persons similar to those to whom, and in a manner similar to that in which, it is for the time being circulated in the United Kingdom or Guern