SDCL Efficiency Income Trust PLC · LSE:SEIT
SDCL Efficiency Income Trust — SDCL Energy Efficiency Income Trust — FY2022 Earnings Presentation
48 slides from SDCL Efficiency Income Trust's earnings presentation, Jun 30, 2022
Slide 1: Results Presentation: Financial Year to 31 March 2022
SDCL Energy Efficiency Income Trust plc Results Presentation: Financial Year to 31 March 2022 30 June 2022
Slide 2: Contents
SDCL Energy Efficiency Income Trust plc Contents 1. Overview and Highlights Investment Manager Presentation Team 2. Portfolio Update 3. Financial Results Jonathan Maxwell, CEO Purvi Sapre, Fund Manager 4. Summary Remarks 5. Appendices Established SDCL in 2007 Responsibility for fund management a
Slide 3: 1. Overview and Highlights
SDCL Energy Efficiency Income Trust plc 1. Overview and Highlights 3
Slide 4: Energy efficiency, reducing waste and carbon - a top priority
SDCL Energy Efficiency Income Trust plc Energy efficiency, reducing waste and carbon - a top priority One of the most cost and time effective sources of emission reductions, savings and resilience Market Backdrop during Year Ended 31 March 2022 Russia invades Ukraine; Europe faces energy price & sec
Slide 5: Highlights for Year Ended 31 March 2022
SDCL Energy Efficiency Income Trust plc Highlights for Year Ended 31 March 2022 SEEIT’s portfolio has remained resilient, exceeding £1 billion in value during the year Total NAV Return of 11.2% in the year1 NAV increased to c.£1.1 billion as at 31 March 2022, from c.£700 million as at 31 March 2
Slide 6: Financial Highlights for Year Ended 31 March 2022
SDCL Energy Efficiency Income Trust plc Financial Highlights for Year Ended 31 March 2022 5.62p1 Aggregate Dividends 10.0p Earnings Per Share 1.2x Dividend Cash Cover declared for the year ended for the year ended 31 March for the year ended 31 March 31 March 2022 2022 2022 Up from 5.5p1 for the yea
Slide 7: 2. Portfolio Update
SDCL Energy Efficiency Income Trust plc 2. Portfolio Update 7
Slide 8: 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 9: Examples of New Investments
SDCL Energy Efficiency Income Trust plc Examples of New Investments Further diversification into new solutions and geographies Green Energy Distribution Point of Use / Demand Reduction Cleaner and More Efficient Supply Expansion Opportunities: Anaerobic digestion facility in operation since 2012, ac
Slide 10: Portfolio Updates for Major Investments
SDCL Energy Efficiency Income Trust plc Portfolio Updates for Major Investments Managing risks and identifying opportunities Specific Investments Portfolio Updates During the Year In September 2021, SEEIT acquired the remaining 35% of Primary Energy – provided NAV uplift Expectations for client’
Slide 11: Risks and Mitigants
SDCL Energy Efficiency Income Trust plc Risks and Mitigants Due diligence, monitoring and active management of risk Key Risks Mitigants Portfolio Activity Counterparty due diligence, Onyx: A detailed credit analysis run prior to acquisition showed that the portfolio of including qualitative and
Slide 12: SEEIT: Portfolio Comparison March 2021 – March 2022
SDCL Energy Efficiency Income Trust plc SEEIT: Portfolio Comparison March 2021 – March 2022 Diversification by investments and technology March 20211,3 March 20222,3 Investments exposure Investments exposure 3% 2% 15% 11% 10% 4% 4%3%3%3%3%3% 22% 21% 18% 10% 8% 8% 4% 3% 3% 2% 22% 16% 0% 20% 40% 60% 8
Slide 13: SEEIT: Portfolio Comparison March 2021 – March 2022
SDCL Energy Efficiency Income Trust plc SEEIT: Portfolio Comparison March 2021 – March 2022 Diversification by country and investment stage March 20211,4 March 20222,4 Country exposure Country exposure 0.3% 1% 39% 32% 8% 21% 55% 22% 6% 16% 0% 20% 40% 60% 80% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 9
Slide 14: Geographical Diversification
SDCL Energy Efficiency Income Trust plc Geographical Diversification Portfolio of investments 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
Slide 15: SEEIT: Portfolio as at 31 March 2022 (cont'd)
SDCL Energy Efficiency Income Trust plc SEEIT: Portfolio as at 31 March 2022 (cont’d) Diversification by counterparty, O&M providers and breakdown of contracted revenue Counterparties1 Counterparty exposure Portfolio consists of counterparty exposures that are individually small and diversified, inc
Slide 16: Environmental, Social and Governance (ESG) Overview
SDCL Energy Efficiency Income Trust plc Environmental, Social and Governance (ESG) Overview SEEIT’s ESG focus areas provide the foundation for its Responsible Investment Policy SEEIT’s ESG Focus Areas Aiding the transition to a 2,455,303 MWh of 1,060,617 tCO2 Minimising its low-carbon economy electr
Slide 17: Responsible Investing and Sustainability in Practice
SDCL Energy Efficiency Income Trust plc Responsible Investing and Sustainability in Practice ESG considerations have been increasingly incorporated into the Company’s operations through its ESG Management Process, reporting standards, and new memberships Due Diligence Asset Management Initial Gatewa
Slide 18: 3. Financial Results
SDCL Energy Efficiency Income Trust plc 3. Financial Results 18
Slide 19: Analysis of Change in Portfolio Valuation - Bridge
SDCL Energy Efficiency Income Trust plc Analysis of Change in Portfolio Valuation - Bridge Portfolio valuation change for financial year to 31 March 2022 Portfolio Valuation increased by 65% during the year to 31 March 2022 19
Slide 20: Analysis of Change in Portfolio Valuation – Key Items
SDCL Energy Efficiency Income Trust plc Analysis of Change in Portfolio Valuation – Key Items Increased valuation by £13m Macroeconomic: Inflation Introduction of near term (3 year) inflation profile, thereafter reverting to long term assumptions Increased valuation by £33m Portfolio blended
Slide 21: SEEIT: Key NAV Sensitivities
SDCL Energy Efficiency Income Trust plc SEEIT: Key NAV Sensitivities Based on investment portfolio at 31 March 2022 Discount Rates + / - 50 bps Corporate Tax + / - 500 bps Inflation - / + 50 bps FX + / - 10% (5.0p) (4.0p) (3.0p) (2.0p) (1.0p) 0p 1.0p 2.0p 3.0p 4.0p 5.0p Negative change to • In line
Slide 22: NAV Per Share Bridge
SDCL Energy Efficiency Income Trust plc NAV Per Share Bridge Analysis of change in NAV during financial year ended March 2022 115 6.1 (5.6) Increase Decrease 110 108.4 Total 1.3 (0.7) 1.5 3.3 105 pence 102.5 100 95 90 NAV per share Change in Change in Foreign Accretive share Performance Dividends pa
Slide 23: Progressive Dividends and NAV
SDCL Energy Efficiency Income Trust plc Progressive Dividends and NAV Dividends and NAV 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 6.00p guidance provided at IPO 5.50p 5.62p 5.00p Dividend
Slide 24: 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.£1bn Key Assumptions Projections Portfolio value of c
Slide 25: 4. Summary Remarks
SDCL Energy Efficiency Income Trust plc 4. Summary Remarks 25
Slide 26: Summary Remarks
SDCL Energy Efficiency Income Trust plc Summary Remarks SEEIT has continued to demonstrate resilience and growth amidst uncertain markets Net asset value (NAV) growth of 5.9p per share to 108.4p at 31 March 2022 Earnings per share of 10.0p, covering dividends declared of 5.62p Financial Total
Slide 27: 5. Appendices
SDCL Energy Efficiency Income Trust plc 5. Appendices 27
Slide 28: a. SEEIT Key Metrics
SDCL Energy Efficiency Income Trust plc a. SEEIT Key Metrics 28
Slide 29: Company Update
SDCL Energy Efficiency Income Trust plc Company Update Robust share price performance in a challenging global market environment NAV/s 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 108.4p 28 June 2022 £3m investment in Iceotope, £1.30 16 Jul 2021 providing e
Slide 30: Summary Financials
SDCL Energy Efficiency Income Trust plc Summary Financials1 Income Statement Year to 31 March 2022 (£m) Year to 31 March 2021 (£m) Total income 92.5 41.1 Fund expenses & finance costs (12.7) (8.7) Profit before tax 79.8 32.4 Earnings per share (pence) 2 10.0p 7.0p Ongoing charges 3 1.00% 1.13% Balan
Slide 31: Summary Financials (cont'd)
SDCL Energy Efficiency Income Trust plc Summary Financials (cont’d)1 Cashflow Statement Year to 31 March 2022 (£’m) Year to 31 March 2021 (£’m) Cash from investments2 64.7 42.1 Operating and finance costs (11.8) (6.4) Cash from operations 52.9 35.7 Equity issuance (net of costs) 343.9 368.0 New inve
Slide 32: Key Performance Indicators ("KPIs")
SDCL Energy Efficiency Income Trust plc Key Performance Indicators (“KPIs”) 31 31 KPI Definition March March Commentary 2022 2021 Financial NAV per share (pence) NAV divided by no. of shares outstanding as at 31 March 108.4p 102.5p NAV has increased compared with the prior year due to earnings per s
Slide 33: Summary of Valuation Methodology
SDCL Energy Efficiency Income Trust plc Summary of Valuation Methodology Discounted Cash Flow (“DCF”) methodology (predominantly) applied to investment portfolio cashflows, with fair value of the Company’s investments calculated in accordance with International Private Equity and Venture Capital g
Slide 34: Breakdown of Debt Outstanding – 31 March 2022
SDCL Energy Efficiency Income Trust plc Breakdown of Debt Outstanding – 31 March 2022 Relatively low gearing limits and levels Current Borrowing Limits Target medium term borrowing of up to 35% of NAV Investment Level Debt GBP 369m o Equivalent to c.25% LTV1 Borrowing of up to 65% at point of ac
Slide 35: 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 the NAV from material movements in foreign exchange rates, and to prov
Slide 36: Responsible Investing and Sustainability in Practice
SDCL Energy Efficiency Income Trust plc Responsible Investing and Sustainability in Practice ESG considerations have been increasingly incorporated into the Company’s operations 2020 ESG Achievements 2021 ESG Achievements 2022 Targets The Company published its first ESG Report The Company’s repo
Slide 37: 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 investment level Investment Manager Level Asset Management led by a dedicated team with support from the wider investment
Slide 38: Approach to Investment and Portfolio Construction
SDCL Energy Efficiency Income Trust plc Approach to Investment and Portfolio Construction Investment Characteristics Achieved/Mitigated Through Long-term, established contracts in place with track record of low cashflow volatility Counterparty creditworthiness Qualitative and quantitative credit
Slide 39: b. Portfolio and New Investments in the Period
SDCL Energy Efficiency Income Trust plc b. Portfolio and New Investments in the Period 39
Slide 40: Existing Portfolio Overview
SDCL Energy Efficiency Income Trust plc Existing Portfolio Overview Scale and diversification achieved through new portfolio additions in line with policy Portfolio Characteristics Key Supply Demand Distribution IPO: Dec-18 Mar-19 Jun-19 Sep-19 Nov-19 Apr-21 Dec-20 Oct-20 Sep-20 Aug-20 Feb-20 CapSha
Slide 41: Portfolio Development since 31 March 2021
SDCL Energy Efficiency Income Trust plc Portfolio Development since 31 March 2021 Over £370 million of investment commitments since 31 March 2021 Project Investment/Commitment date Type Location Approx. size During the year ended 31 March 2022 SOGA April 2021 New Vietnam £2m RED April 2021 (completi
Slide 42: c. Board and Investment Manager Overview
SDCL Energy Efficiency Income Trust plc c. Board and Investment Manager Overview 42
Slide 43: Highly Experienced Independent Board of Directors
SDCL Energy Efficiency Income Trust plc Highly Experienced Independent Board of Directors Tony Roper, Non-Executive Chair Over 26 years’ experience of making and managing infrastructure equity investments in the UK, Europe, North America and Australia From 2011 to June 2018 Tony was a Managing Partn
Slide 44: Overview
SDCL Energy Efficiency Income Trust plc SDCL Overview SDCL is a London based investment firm with proven track record of investment in energy efficiency and decentralised generation projects in the UK & Europe, North America and Asia >$2bn 47 20 4 SDCL AUM Green energy solution Realised greenfield O
Slide 45: SDCL: Investment Manager Team
SDCL Energy Efficiency Income Trust plc SDCL: Investment Manager Team Senior Management Jonathan Maxwell Eugene Kinghorn Purvi Sapre Joseph Muthu Ben Story David Maxwell David Hourihane CEO & IC Chair CFO Fund Manager Group Board Director COO Managing Director Managing Director Global Asset Manageme
Slide 46: 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 47: 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 48: 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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