Scatec Asa · OSL:SCATC
Scatec Asa — Q4 2020 Earnings Presentation
31 slides from Scatec Asa's earnings presentation, February 2021
Slide 1: Building a global renewable company
Fourth quarter 2020 Building a global renewable company
Slide 2: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not rely, act or make assessment on the basis of this presentation or anything inc
Slide 3: Agenda
Agenda • Highlights and project update Raymond Carlsen, CEO • Financial review Mikkel Tørud, CFO • Market & outlook Raymond Carlsen, CEO 3
Slide 4: Building a global renewable company
Q4’20 Building a global renewable company Power production (GWh) • Acquired SN Power, adding solid hydropower assets +37% and an attractive project pipeline 407 Rwanda • EBITDA* of NOK 223 million in the quarter and Czech NOK 1,306 million for FY 2020 Mozambique 298 Jordan • Started commercial opera
Slide 5: 2020: A transformational year
2020: A transformational year Power Production EBITDA (Proportionate, NOK million) +44% 1,404 976 Broadened growth Grid connected: Strong ESG performance: strategy and 391 MW Top ratings from acquistion of SN Power Power leading agencies production: 2019 2020 1,602 GWh 5
Slide 6: A frontrunner in renewable energy
Acquisition of SN Power completed A frontrunner in renewable energy Key figures 4.1 Power production TWh2 1.9 GW 1.4 GW Solar¹ Hydro 485 Employees 4,406 2020 revenues MNOK 39 MW Wind 2,398 2020 EBITDA MNOK (1) In operation or under construction. Gross capacity (2) Median production when all plants a
Slide 7: First wind farms added to portfolio
Nytt bilde First wind farms added to portfolio • Acquisition of the 39 MW Dam Nai wind project in Vietnam closed last week • The two wind farms started operations in October 2017 & December 2018 • Average annual generation of 123 GWh - expected annual revenues of USD 10.5 million under the 20-year F
Slide 8: 150 MW Sukkur project in Pakistan
150 MW Sukkur project in Pakistan • Key project information: • Capex est. USD 100 million • Annual production: 300 GWh • Annual revenues: USD 11 million • Ownership: Scatec 75%, Nizam Energy 25% • Scatec to provide EPC, O&M and Asset Management Services to the project • 75% project finance from FMO
Slide 9: Conducting business during COVID-19
Conducting business during COVID-19 Key reflections 2020 • Essential infrastructure - all plants in full operation • Continued to pursue new business opportunities • COVID-19 monitoring task force • Strong local presence - committed to play an important role also in challenging times • Relief effort
Slide 10: Climate reporting
Climate reporting Carbon Disclosure Project: 1 Score in 2020: A 2 Climate target and ambitions Established closer dialogue 3 with key suppliers 10
Slide 11: Financial review
Financial review Mikkel Tørud, CFO 11
Slide 12: Increased power production – project pipeline and backlog maturing
Increased power production – project pipeline and backlog maturing Fourth quarter 2020 Proportionate financials • Year on year increase in Power Quarterly (NOK million) Last 12 months (NOK million) Production revenues and EBITDA • Continued strong focus on project EBITDA Revenues 6,341 development -
Slide 13: Steadily increasing power production
Power Production Steadily increasing power production Quarterly (NOK million) Last 12 months (NOK million) EBITDA Revenues 1,708 1,404 1,163 976 402 365 320 304 Q4 19 Q4 20 2019 2020 EBITDA margin 83% 80% 84% 82% Year on year increase in production mainly from South Africa, Ukraine and Malaysia. 13
Slide 14: Financials impacted by seasonal variations
Services Financials impacted by seasonal variations Quarterly (NOK million) Last 12 months (NOK million) EBITDA Revenues 232 168 82 48 45 64 16 10 Q4 19 Q4 20 2019 2020 EBITDA margin 33% 22% 38% 35% 14
Slide 15: Project pipeline & backlog maturing
Development & Construction Project pipeline & backlog maturing Quarterly (NOK million) Last 12 months (NOK million) EBITDA Revenues 4,980 1,222 873 589 132 46 -38 -28 Q4 19 Q4 20 2019 2020 Gross margin 14% 12% 14% 12% EBITDA margin 11% -83% 12% -3% 15
Slide 16: A solid financial position
A solid financial position Consolidated financial position (NOK million) • Group free cash of NOK 5,949 million As of 31.12.2019 As of 31.12.2020 • Raised equity of gross NOK 4,750 million to fund the SN 26,663 26,663 Power acquisition and further growth 21,578 21,578 • Group* book equity of NOK 11,
Slide 17: Q4'20 movement of the Group's free cash
Q4’20 movement of the Group’s free cash NOK million -483 4,622 8 -55 114 -27 -31 -83 5,949 1,885 End Q3 20 Distributions Cash flow to Cash flow to Cash flow Project equity Project Share capital Working End Q4 20 from operating equity D&C equity Services to equity Development increase Capital/other p
Slide 18: 2020 Dividend proposal
2020 Dividend proposal Dividend Policy • The Group’s objective is to pay shareholders consistent and growing cash dividends • Scatec pays dividends representing 50% of free cash distributed from producing power plants Proposed dividend for 2020 • Scatec received distributions from operating power pl
Slide 19: Short term guidance
Short term guidance • No material D&C revenues expected until projects currently in backlog move into construction • Power production from plants in operation end of Q4 2020 (excluding SN Power): GWh Q4’20 Q1’21e 2021e Proportionate 407 425-445 1,750-1,790 100% basis 756 770-800 3,120-3,220 • Servic
Slide 20: SN Power Acquisition closing & financing
SN Power Acquisition closing & financing SN Power financing – USD million: • Scatec closed the USD 1,166 million acquisition of SN Power from Norfund on 29 January 2021 1,166 • The transaction is financed cash and debt facilities: 200 • USD 200 million vendor note: Interest step up after 7 years, 15
Slide 21: Financial performance impacted by hydrology and COVID
SN Power 2020 results: Financial performance impacted by hydrology and COVID SN Power proportionate financials Comments NOK million* • Low operational gearing and high cash conversion Revenues EBITDA Cash flow to equity • A mix of contract types are stabilising cash generation 1,766 • Well maintaine
Slide 22: Market & outlook
Market & outlook Raymond Carlsen, CEO 22
Slide 23: The world can be powered by renewables in 2050
The world can be powered by renewables in 2050 60% 75% Fossil from 64% Solar, wind hydro & storage share of 91% increase in global demand covered by to 20% market energy mix from Consumption growth electricity demand renewables share 36% to 73% non- OECD-countries Source: Bloomberg New Energy Outloo
Slide 24: Increasing project pipeline to 10 GW – including 2.5 GW from SN Power
Increasing project pipeline to 10 GW – including 2.5 GW from SN Power Europe & Central Asia 1,280 MW Africa & Rest of Asia Middle East Backlog & pipeline 3,548 MW 10,460 MW Latin America 3,862 MW 1,100 MW All figures are as of Q4 2020 reporting date. Numbers representing project pipeline after closi
Slide 25: Combining floating solar and hydropower to achieve lowest cost RE-baseload
Combining floating solar and hydropower to achieve lowest cost RE-baseload Floating solar becoming mainstream technology Particularly attractive on hydropower reservoirs • Attractive cost roadmap • Shared infrastructure, interconnection and operations • Limited land use • Optimising production of hy
Slide 26: Significant project opportunities in key pipeline markets
Significant project opportunities in key pipeline markets Brazil India South Africa Vietnam Development status Development status Development status Development status • Large PV project in mature stage • Negotiating participation in • Large ready to bid portfolio • Broad set of projects pursued • P
Slide 27: Dispatchable Energy in South Africa
Dispatchable Energy in South Africa RMIPP: Dispatchable power requirement • South Africa continues to struggle with a constrained power supply Dispatch • A technology neutral tender was launched in 2020, aiming 120 to add 2 GW of dispatchable power to the grid (RMIPP) 100 • Dispatch of Contracted Ca
Slide 28: Scatec has offered a large scale PV + battery solution
Scatec has offered a large scale PV + battery solution RMIPP: Scatec PV + battery solution • Scatec submitted three renewable energy bids totalling 150 MW of dispatchable capacity • BESS will supply early morning and late afternoon and address the technical requirements by the customer • Oversizing
Slide 29: Building a global leader in renewable energy
Building a global leader in renewable energy Where we come from Where we are now Where we are going Regional solar developer/IPP Global top-tier A global multi-technology developer/IPP renewables developer/IPP Solar Solar Solar Hydro Hydro Wind Wind Storage Storage 29
Slide 30: Building a global renewable company
Kine: Oppdatere bilde, gjerne people Building a global renewable company • SN Power transaction closed – adding solid hydropower assets and attractive project pipeline • Solid financial position - available liquidity of NOK 3.9 billion post transaction • Project backlog & pipeline increased to 10.5
Slide 31: Scatec – improving our future
Scate improving our future