Ecofin Global Utilities and Infrastructure Trust Plc · LSE:EGL
Ecofin Global Utilities and Infrastructure Trust — Shareholder Meeting (March 2024)
23 slides from Ecofin Global Utilities and Infrastructure Trust's shareholder meeting presentation, Mar 6, 2024
Slide 1: Ecofin Global Utilities and Infrastructure Trust plc AGM
Ecofin Global Utilities and Infrastructure Trust plc AGM 6 March 2024
Slide 2: Portfolio manager
Portfolio manager Jean-Hugues de Lamaze Managing Director and Portfolio Manager Portfolio Manager, Ecofin Global Utilities and Infrastructure Trust plc, Ecofin Sustainable Listed Infrastructure UCITS Fund, SLI SMAs. Joined Ecofin as Portfolio Manager in 2008. 34 years of experience in equities and u
Slide 3: Performance (total returns in £)
Performance (total returns in £) 15 10.1 10 8.1 Financial year to 30 September 2023 5 0 -5 -10 -8.6 -15 -20 -25 -21.9 1 Year Since Admission % p.a. EGL NAV EGL Share Price Since Periods to 29 February 2024 1M% 3M% 1Y% 5Y% Admission1 % per annum EGL NAV 0.6 -1.0 -8.2 52.8 8.0 EGL Share Price -5.0 -8.
Slide 4: Performance: Calendar 2023 focus (total returns in £)
Performance: Calendar 2023 focus (total returns in £) Q1 - Q3 % Q4 % 2023 % EGL NAV -13.2 6.6 -7.4 2023 factors: • Macro: Rising bond yields impacted the S&P Global Infrastructure Index -5.8 6.0 -0.2 valuations of listed infra and utilities, especially MSCI World Utilities Index -10.1 5.7 -4.9 renew
Slide 5: Strategy overview
Strategy overview An alternative income strategy featuring capital preservation and exposure to global growth Global Income Growth Diversified across geographies, Growth-oriented infrastructure Invested in securities with attractive sub-sectors and investment themes yields and inflation protection b
Slide 6: Characteristics of the investment universe
Characteristics of the investment universe We believe economic infrastructure offers unique characteristics that make it an attractive asset class for investors Essential assets Defensive profile Low volatility High barriers to entry Limited competition Secure earnings Asset-backed services Inflatio
Slide 7: The opportunity: inflation hedge
The opportunity: inflation hedge Infrastructure as a source of inflation protection As owners of essential assets, we believe listed infrastructure companies provide an attractive risk profile in times of rising inflation, often combining inflation indexing with strong pricing power and cyclical exp
Slide 8: The opportunity: de-risking of business models
The opportunity: de-risking of business models Evolving business mixes drive value creation in the long run We believe that utilities are rapidly adapting business models to a world which increasingly prioritises decarbonisation… EBITDA split by activity for European Utilities • Stronger growth • C.
Slide 9: Sustained growth
Sustained growth Infrastructure capex requirements continue to escalate; solid tailwinds for company earnings Structural growth drivers: • Infrastructure globally requires major investment to keep pace with GDP growth, the transition to renewable energies, and to meet sustainable development goals $
Slide 10: AI, data centres, EVs are boosters to industry growth profile
AI, data centres, EVs are boosters to industry growth profile Highlights the increasing value of baseload capacity US electricity demand growth to accelerate through 2030 US power demand (TWh) • EVs • Data centres • Re-shoring GenAI will boost power demand in data centres Constellation and Vistra ar
Slide 11: Sustained returns
Sustained returns Higher PPA prices in the US and in Europe (31 December 2023) US PPA prices ($/MWh) European PPA prices (€/MWh) • PPA pricing continues to improve in the US and remains solid in Europe despite recent declines in power and carbon prices • With cost inflation moderating, this represen
Slide 12: Fundamentals remain solid…
Fundamentals remain solid… but they are not always reflected in share price action Utilities earnings revisions (indexed to 100 on 28/02/2023) S&P 500 Utilities EPS growth China Longyuan price performance (indexed to 100 on 21/02/2023) • Earnings outlook has improved while utilities and infrastructu
Slide 13: Valuations
Valuations EGL’s portfolio valuation metrics 16.9 15.2 4.9% 13.7 11.7 4.1% 4.1% 11.2 9.3 9.4 8.5 2.3% 1-year forward EV/EBITDA 1-year forward P/E Dividend yield 13 Source: Bloomberg
Slide 14: The valuation gap
The valuation gap Listeds vs. Privates: The case for listed infrastructure We believe listed infrastructure offers a valuation buffer as it continues to trade at a deep discount to private infrastructure, despite offering similar long-term return characteristics. Record levels of private equity ‘dry
Slide 15: Portfolio (29 February 2024)
Portfolio (29 February 2024) Current positioning: % of Largest holdings Country Sub-sector portfolio • Focus on transmission & distribution / grids, nuclear, Renewables & transportation infrastructure, environmental services; NextEra Energy US 5.5 nuclear limiting earnings exposure to power prices •
Slide 16: Summary
Summary • Ecofin has a long and successful track record investing in global sustainable listed infrastructure • We seek to identify strong risk/reward opportunities as specialists, with a focus on identifying utilities in transition • We approach our investments with a total return mindset, striking
Slide 17: Appendices
ecofin Appendices 17
Slide 18: Governments are joining forces to attract incremental capital into clean energy
Governments are joining forces to attract incremental capital into clean energy IRA represents unprecedented US commitment on Long term growth supported by RePowerEU and climate, aiming to reduce carbon emissions by more new NZIA than 40% by 2030 • Expansion and extension of PTCs and ITCs REPowerEU
Slide 19: Normalisation of power prices
Normalisation of power prices Germany 1-year forward power price 79.80/MWH Texas 1-year forward power price 48.4/MWH 19 Source: Bloomberg
Slide 20: Carbon performance
Carbon performance Emissions performance (by Ecofin Advisors Limited with CarbonAnalytics) • Electricity generators in EGL’s portfolio generally have CO2 emissions which are below the average emissions of their relevant electricity grid and the companies sitting in the global utilities index • We do
Slide 21: Investment team
Investment team STRATEGY INVESTMENTTEAM RISK Jean-Hugues de Lamaze Mathieu Pidoux Gilles Schlutig, CFA Managing Director, Senior Portfolio Manager Investment Analyst Head of risk – Listed Ecofin 34 years experience 5 years of investment experience strategies Joined Ecofin 2008 Joined Ecofin 2022 21
Slide 22: Contact details
Contact details Ecofin Advisors Limited Burdett House 15 Buckingham Street London WC2N 6DU United Kingdom Tel: +44 20 7451 2929 Michael Hart Director – UK +44 20 7451 3023 mhart@ecofininvest.com 22
Slide 23: Disclaimer
Disclaimer This document is being issued in relation to Ecofin Global Utilities and Infrastructure Trust plc (“Ecofin Global”) by Ecofin Advisors Limited (the “Investment Manager”) which is authorised and regulated by the Financial Conduct Authority. This document does not constitute or form part of
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