Northland Power Inc. · TSX:NPI
Northland Power — Investor Presentation (April 2023)
45 slides from Northland Power's investor presentation, April 2023
Slide 1: Investor Presentation April 2023
Investor Presentation April 2023 1
Slide 2: Corporate Overview
Corporate Overview 2
Slide 3: Northland Overview
Northland Overview • Northland is a leading global power producer at the forefront of the global energy transition • Over 35 years of success developing, constructing and operating power projects across a range of technologies • Well-diversified portfolio of high-quality power infrastructure assets:
Slide 4: Northland Growth Drivers – Market Selection
Northland Growth Drivers – Market Selection High Growth Onshore Top Offshore Wind Markets Renewables Markets Tailwinds • Increased government support • US – Inflation Reduction Act • Canada – Proposed investment tax credits for Mature Emerging Previously Current Emerging renewables • Netherlands • P
Slide 5: Realigning our business operations
Realigning our business operations • Northland has evolved to a technology-focused Offshore Wind Onshore Renewables business unit (BU) operating model to support scalability globally. • TOP 10 Incumbent in Global Offshore • Growth in near-term cash flow • BUs are organized by our generating technolo
Slide 6: Pathway to Net Zero
Pathway to Net Zero Committed to reducing our GHG emissions intensity from Scope 1 ESG & 2 by 65% ( from a 2019 baseline) by 2030 and reaching a science- aligned net zero over all emissions scopes (Scope 1,2 &3) by 2040. 33% 50% Board of Executive Directors Office Making a commitment to Joining UN G
Slide 7: Portfolio Overview
Portfolio Overview 7
Slide 8: Diversified Asset Portfolio
Diversified Asset Portfolio Europe (Offshore Wind): Canada: Operated: 1,184 MW United Kingdom/Scotland: Development: 2,758 MW Operated: 1,267 MW Development: 2,340 MW Development : 1,850 MW U.S.: Development: 220 MW South Korea: Spain: Development: up to 3,400 MW Japan: Operated: 559 MW Development:
Slide 9: Sustainable Growth
Total Pipeline Sustainable Growth Other (10%) Solar (25%) Strong Growth Portfolio Across Multiple Technology Offshore wind Onshore Technologies (60%) 20GW wind (5%) Continue to target Europe and Asia as key markets for offshore wind development Expand onshore footprint in North America, Colombia as
Slide 10: Offshore Wind: Catalyst for Long-Term Growth
Offshore Wind Catalyst for Long-Term Growth • Countries expected to boost wind development to reduce soaring power prices and ensure national security and decarbonization • Offshore wind deployment targets have increased • Governments are also taking steps to speed up development timelines and reduc
Slide 11: Europe Offshore Wind
Europe Offshore Wind Established offshore wind platform in North Sea with nearly 1.2GW1 of operating capacity 3 Deutsche Bucht Nordsee One 2 Netherlands | 600MW 1 Gemini Gemini COD: 2017 Capacity: 600 MW Poland Ownership: 60% PPA Expiry: 2031 Netherlands Germany Germany | 584MW Nordsee One Deutsche
Slide 12: Europe Offshore Wind Development: Baltic Power
Europe Offshore Wind Development Baltic Power Poland | Baltic Power 1.2 GW • Project moving forward towards 2023 financial close • Preferred supplier agreements signed for wind turbines, export cables and onshore and offshore substations • Selected Vestas 15 MW turbines in Poland is an attractive ne
Slide 13: Europe Offshore Wind Development: Nordsee Cluster
Europe Offshore Wind Nordsee Delta Nordsee Two 480 MW 433 MW Development Godewind 225 MW Nordsee Three Nordsee One 420 MW Germany | Nordsee Cluster 1.6 GW • Nordsee Two and Godewind sites secured through exercise of step-in rights • NSC-A: Nordsee Two and Godewind (658 MW) • NSC-B: Nordsee Three and
Slide 14: Europe Offshore Wind Development: Scotwind
Europe Offshore Wind Development N3 N2 N1 N4 Scotland | Scotwind 2.3 GW • Successfully awarded two leases in 2022 Crown Estate Scotland offshore wind process • Lease N4 – 840 MW fixed bottom foundation • Lease N2 – 1,500 MW floating foundation • Continuation of Northland’s offshore strategy of being
Slide 15: Asia Offshore Wind Development: Hai Long
Asia Offshore Wind Development Taiwan | Hai Long 1.0 GW • Progressing to 2023 financial close • Contracts signed for all components of the project HL3 HL2 • Commenced early construction work/fabrication of key components • Process to secure non-recourse financing ongoing • Signed strategic sell-down
Slide 16: South Korea Offshore Wind Development
South Korea Offshore Wind Development Dado, 1.0 GW • 2022 key milestones achieved: • Secured electricity business licenses (EBLs) for 900 MW out of 1,000 MW, which grant priority development rights to Northland South Korea • First major permit on route to financial close. Gives Northland development
Slide 17: Onshore Renewables
Onshore Renewables ● The industry is expected to grow at upwards of 10% per annum over the next decade ● Favourable government policies ● We continue to build local capabilities in development to ensure that sufficient resources are available in supporting functions ● Growth in near-term cash flow ●
Slide 18: Europe Onshore Renewables
Europe Onshore Renewables Spain | Wind/Solar 560MW • Diversified portfolio of 551 MW (net) of onshore renewables with a regulated tariff • Delivers near-term cash flow to help fund the development of Northland’s large offshore wind projects Spain • Creation of a European onshore renewables asset man
Slide 19: North America Onshore Renewables Development: New York
North America Onshore Renewables Development Ball Hill 108 MW United States | New York State 220MW Bluestone 112 MW • Achieved financial close on 220 MW Ball Hill and Bluestone projects in Q2 2021 • Secured 20-year indexed REC contract (CfD all-in PPA) with the New York State Energy Research and Dev
Slide 20: North America Onshore Renewables Development: Alberta
North America Onshore 1 Jurassic Solar – Late Stage Renewables Development 2 Mid-stage Solar 3 Early-Stage Solar Canada | Alberta development portfolio 1.6 GW • Established presence with scale in highly sought after power market in North America Alberta • Large scale solar portfolio with near-term v
Slide 21: North America Onshore Renewables Development: Oneida Battery Storage
North America Onshore Renewables Development Canada | Oneida Battery Storage 250 MW • Largest battery storage project in Canada and one of the largest on the continent • Development in partnership with NRStor Inc. (NRStor) and the Six Nations of the Grand River Development Corporation (SNGRDC) • 20-
Slide 22: Colombia Onshore Renewables
Colombia Onshore Renewables EBSA EBSA Utility Helios • EBSA is a sole distributor to a population of over 1.3 million; proven management team with local expertise • Operates under regulatory framework with an average approved WACC of ~11.5% • RAB is expected to grow at a rate in excess of inflation
Slide 23: Colombia Onshore Renewables Development
Colombia Onshore Renewables Development EBSA Colombia | Suba Solar Project 130 MW • Secured two solar projects in Colombian renewables auction with a combined capacity of Suba 130 MW • Developing in partnership with EDF Renewables through 50/50 joint venture • Projects underpinned by 15-year Power P
Slide 24: Growth Strategy: Energy Storage
Growth Market Trends Strategy • Demand for energy storage driven by capacity needs of a 100% carbon-free electricity grid • Strong policy support for energy storage in existing markets for Northland, e.g., 7 GW Energy Storage – Energy of storage needed in Ontario through 2030 Storage Industry Overvi
Slide 25: Growth Strategy: Green Fuels – Hydrogen and P2X
Growth Strategy Market Trends • Decarbonizing hard-to-abate sectors such as transportation, industry and power generation Green Fuels – Hydrogen and P2X Industry Overview • Diversification of supply key priority in Europe • New policies and higher carbon prices supporting transition to renewable gre
Slide 26: Northland Growth Pipeline
Northland Growth Pipeline Northland’s identified development projects to deliver substantial growth. Total Pipeline Healthy demand for renewables and a strong pipeline allows us to Identified Devt choose projects meeting stringent investment parameters. Projects3 20+ 12.0+ GW GW Capitalized Devt Pro
Slide 27: Financial Overview
Financial Overview 27
Slide 28: Long-Term Financial Objectives
Cash Flow Resiliency Long-Term Financial ● Source long-term contracts and hedge variable costs and cash flow streams Objectives Long-term financial strategy remains unchanged Strong Investment Grade Balance Sheet ● Maintain investment grade balance sheet to Maintaining flexibility, adding corporate
Slide 29: Prudent Financial Leverage
Prudent Financial Leverage Funding Model Reduces Equity Risk Project finance continues to be pillar of our funding philosophy and risk management. Corporate Card Rating The majority of Northland's debt is fixed rate debt and the only variable debt is corporate credit facilities and currently undrawn
Slide 30: Financial Strategy
Financial Strategy Disciplined and flexible approach to project funding • Manages capital strategy with a high degree of selectivity in funding its capitalized growth projects • Focused on maintaining an investment grade rating • Credit facilities support short-term funding needs with borrowings rep
Slide 31: Growth Investments Funding C$16-19B
Growth Investments Funding Illustrative Capital Funding Plan of Capitalized Growth projects Over Next Five Years Already Raised $1.7B via 2022 ATM and announced Hai Long ~$2.5B sell-down NORTHLAND EQUITY2 + SELL-DOWNS ~15% Illustrative Funding Plan ~$0.5B GREEN CORPORATE DEBT (REVOLVER / HYBRIDS) fo
Slide 32: Growth Investment Funding
Growth Investment Funding Uses Sources 2023 Funds to Raise (Corp Hybrids, other • Funding plan is consistent with maintaining partnerships/ Sell-downs, Corp access to various sources of capital, Revolver, ATM, asset preserving low cost of capital and investment refinancings, ) grade balance sheet Ha
Slide 33: Our Sell-down Partnership Strategy
Our Sell-down Partnership Strategy The partnership model is a flexible and proven funding source and will form part of our long-term funding plans to help position the company for long-term growth. • Enhance project returns and accelerate value creation – expected to crystalize at FC • Enterprise ri
Slide 34: Development Asset Partial Sell-downs
Development Asset Focus by region & technology Partial Sell-downs Enhances Funding Flexibility, Diversification and Project Returns Our partnering strategy • Align low cost of capital with high quality long-term contracted cash flows Northland is targeting to generate incremental 200 to 400 bps of v
Slide 35: 2023 Financial Guidance
2023 Financial Guidance Adjusted EBITDA $1.2 to $1.3 Billion Adjusted EBITDA and Adjusted Free Cash Flow Offshore Wind Adjusted Free Cash Flow (excl. Utilities (7%) (48%) growth expenditures) Efficient Natural $1.70 to $1.90 Per Gas (13%) Share 2023 Adjusted Free Cash Flow Onshore Renewables EBITDA
Slide 36: Significant & Sustainable Adjusted EBITDA Growth
Significant & Sustainable Adjusted EBITDA Growth Capitalized Growth Projects will increase Adjusted EBITDA and provide high visibility on future earnings through long- term contracted revenues/offtake Over $3B 2 EBITDA Growth 3x $1.7-1.9B 1 ~ $1.2-1.3B 7-10% Capitalized Other By 2030 CAGR + Publicly
Slide 37: Appendix
APPENDIX 37
Slide 38: Market Summary
Market Summary Key Metrics1 Recent Share Price (TSX: NPI) $33.24 Shares Outstanding (Common)2 250 million Annual Dividend $1.20 2023 EBITDA Guidance $1.2 - $1.3 billion 2023 FCF/sh Guidance $1.30 - $1.50 2023 Adjusted FCF/sh Guidance $1.70 - $1.90 Total Debt, Net of Cash2 $5.5 billion Preferred Shar
Slide 39: Shareholder Returns
Shareholder Returns An investor who invested in the IPO in 1987 would have realized a total return of over 2,100 %1 Annual Dividends (Distributions) per share Total Annualized Shareholder Returns Peer Group $1.20 S&P/TSX Capped Utilities Index Northland Power $0.89 12% 11% 5-Year TSR 10-Year TSR 199
Slide 40: European Offshore Wind | Facility Details
European Offshore Wind | Facility Details Gemini Nordsee One Deutsche Bucht Capacity 600 MW 332 MW 252 MW Distance to Shore 85km 40km 95km Wind Turbines 150 x Siemens 4 MW 54 Senvion x 6.15 MW 31 x MHI Vestas 8MW Turbine Foundation Monopile Monopile Monopile Water Depth 28m to 36m 26m to 29m 39m to
Slide 41: Northland's Operating Assets
Northland’s Operating Assets On-time and on-schedule project execution Construction Expiry PPA (On-time/on- Project Technology Location Gross Capacity Ownership Term budget) Gemini Offshore Wind Netherlands 600 MW 60% 2032 Nordsee One Offshore Wind Germany 332 MW 85% 2027 Deutsche Bucht Offshore
Slide 42: Project Pipeline
Project Pipeline Northland Current Project Location Technology Size Status Contract Type Est. COD Ownership Capitalized Growth Projects Hai Long Taiwan Offshore Wind 1,044MW 60% Late-Stage Development 20-yr PPA 2026/2027 Baltic Power Poland Offshore Wind 1,200MW 49% Late-Stage development 25-yr CfD
Slide 43: Forward looking statement
Forward looking statement This written and accompanying oral presentation contains certain forward-looking statements which are provided for the purpose of presenting information about management’s current expectations and plans. Readers are cautioned that such statements may not be appropriate for
Slide 44: Reporting of Non-IFRS Financial Measures
Reporting of Non-IFRS Financial Measures This investor presentation includes references to Northland’s adjusted EBITDA and free cash flow, measures not prescribed by International Financial Reporting Standards (IFRS). Adjusted EBITDA and free cash flow, as presented, may not be comparable to other s
Slide 45: Northland Power Investor Relations contact
Northland Power Wassem Khalil Email: investorrelations@northlandpower.com 30 St. Clair Avenue West, Senior Director Investor Relations & Strategy 12th Floor 647.288.1019 Website: northlandpower.com Toronto, ON Canada M4V 3A1