Renewables Infrastructure Group Limited GBP Red.Shs · LSE:TRIG
Renewables Infrastructure Group Limited GBP Red.Shs — The Renewables Infrastructure Group — H1 2019 Earnings Presentation
46 slides from Renewables Infrastructure Group Limited GBP Red.Shs's earnings presentation, Aug 7, 2019
Slide 1: Interim results for six months to 30 June 2019
The Renewables Infrastructure Group Interim results for six months to 30 June 2019 7 August 2019 Generating Sustainable Value. Rosières, France trig-ltd.com
Slide 2: Contents
Contents Section Slide Introduction 4 Strategy and Acquisitions 7 Portfolio and Operations 15 Financials 21 Concluding Remarks 28 Appendices 30 Contacts / Important Information 45 2 trig-ltd.com
Slide 3: Speakers
Speakers Helen Mahy CBE Richard Crawford Phil George TRIG InfraRed Capital Partners InfraRed Capital Partners Chairman Director, Infrastructure Director, Infrastructure Jaz Bains Steven Hughes Renewable Energy Systems Renewable Energy Systems Group Risk and Investment Director Global Support Service
Slide 4: Introduction
Introduction A leading London-listed renewables investment company Purpose: To generate sustainable returns from a diversified portfolio of renewables infrastructure that contribute towards a zero-carbon future TRIG is invested in 71 wind, solar and battery projects in the UK & Europe, with 1.5G
Slide 5: Financial Highlights
Financial Highlights Six months to 30 June 2019 Ongoing Strong Performance ▲ NAV per share: 115.0p (Dec 2018: 108.9p) ▲ Earnings per share: 9.3p (H1 2018: 4.8p) ▲ £302m of equity raised as part of Share Issuance Programme ▲ Annualised TSR1 10.4% since IPO Dividends ▲ On track for 2019 target dividen
Slide 6: Sustainability and Responsible Investment
Sustainability and Responsible Investment TRIG’s ESG achievements Powering 1 million homes with clean energy Local contractors at Solwaybank, Scotland 1 million tonnes of CO2 avoided p.a. £750k spent on community projects p.a. £10m spent with local contractors Bee meadow at Midi, France Track record
Slide 7: Strategy and Acquisitions
Strategy and Acquisitions Pallas, Republic of Ireland trig-ltd.com
Slide 8: Cumulative Total Return
Strong track record over six years Dividend growth, financial outperformance, scaling portfolio Progressive dividend (pence per share) Share price outperformance and low Beta3 6.80p Target2 170p 2.5 Cumulative Total Return 6.60p 160p 6.40p 2 150p 6.20p 140p 1.5 6.00p Beta 130p 5.80p 120p 1 5.60p 5.4
Slide 9: Growth and Equity Funding
Growth and Equity Funding Portfolio additions balancing revenue risks, enhancing diversification Additions to the Portfolio ▲ Investment commitments in H1 2019 of £417m across 5 projects Date of commitment Project Location Equity share Net Capacity (MW) Revenue Type1 March 2019 Jädraås onshore wind
Slide 10: Jädraås, Sweden (10% of the portfolio)
Jädraås, Sweden (10% of the portfolio1) TRIG’s largest investment to date acquired February 2019 ▲ Acquisition of 100% interest in a 213MW wind farm, TRIG’s largest investment to date (€207m) ▲ Majority of revenues from power sales: hedging Ersträsk agreements in place for 5 years covering c.70% of
Slide 11: Gode Wind 1, Germany (8% of the portfolio)
Gode Wind 1, Germany (8% of the portfolio1) TRIG’s first asset in Germany, an important market for offshore wind ▲ Acquisition of 25% interest in a 330MW offshore wind farm in the German North Sea ▲ Siemens Gamesa 6MW turbines ▲ Developed by Ørsted, who provide a 20 year O&M contract. ▲ Two year ope
Slide 12: Expected renewables growth in Europe
Expected renewables growth in Europe UK, France, Germany and Scandinavia are core growth markets ▲ UK significant growth in offshore wind, core market for TRIG. New unsubsidised onshore renewables limited by economics ▲ Germany growing in all sectors, with offshore wind of interest for TRIG (high pr
Slide 13: UK Renewables Policy Outlook
UK Renewables Policy Outlook Cross-party support for renewables despite economic and political uncertainty Party Discernible position on Renewables • Committed to net-zero emissions by 2050 Conservatives • Committed to offshore wind, very limited support for onshore development • New Prime-Minister
Slide 14: Brexit Preparedness
Brexit Preparedness Brexit expected to have low impact Key Brexit Risks Key Mitigants • Managers well resourced Workforce skills shortage • Wide range of subcontractors in place mitigates individual asset risks • All key suppliers reviewed for approach to anticipated challenges and uncertainties Sup
Slide 15: Portfolio and Operations
Portfolio and Operations trig-ltd.com
Slide 16: Portfolio (1) – Increased Diversification
Portfolio (1) – Increased Diversification 1,509MW net capacity / 71 projects (30 June 2019, including commitments) By Jurisdiction / Power Market1 2 Portfolio Overview Solar Onshore wind Offshore wind Battery storage Total Jun-19 23% 28% 4% 5% 13% 19% 8% Projects 28 40 2 1 71 Net Capacity (MW) 156 1
Slide 17: Portfolio (2) – Revenue Profile
Portfolio (2) – Revenue Profile Medium-term project-level revenues mainly fixed and indexed Project Revenue by Type PPA Market Indexed Fixed Revenue PPAs & FiTs 20% 43% PPA Market Revenue at Next 12 Floor 6% Months1 ROC Recycle and Other 4% Indexed ROC Buyout 27% Split of Project Revenues by Contrac
Slide 18: Portfolio (3) – Constructing a Balanced Portfolio
Portfolio (3) – Constructing a Balanced Portfolio Understanding the range of revenue types available Range of revenue options within a balanced portfolio ▲ FiT & CFD contracts (France, Ireland, Germany and UK) typically have subsidy revenues of 15 years then FiT/CfD UK ROC Unsubsidised market revenu
Slide 19: Operational Performance (1)
Operational Performance (1) Benefits from increased geographic diversification Wind and solar variation H1 2019 versus long-term average ▲ H1 generation: 1,429GWh Electricity production Technology Region Performance vs P50 (GWh) ▪ 42% increase over H1 2018 due to increased Wind UK & Ireland 799 -7.5
Slide 20: Operational Performance (2)
Operational Performance (2) Enhancements continue to deliver value Commercial ▪ O&M tenders achieved significant cost reductions ▪ Improved PPA contracts Technical ▪ Pro-active yaw ring replacement at Forss Maintenance at Churchtown1 ▪ Engagement with grid operator led to significantly reduced upgra
Slide 21: Financials
Financials Garreg Lwyd, Wales trig-ltd.com
Slide 22: Portfolio Valuation Bridge
Portfolio Valuation Bridge Valuation movement in the six months to 30 June 2019 1,620.9 £1,600m (63.2) 1,487.6 90.9 (64.6) 29.1 37.4 £1,400m (30.9) 6.8 1,268.7 346.7 £1,200m £1,000m £800m 1,552.1 1,487.6 1,530.0 1,456.7 1,456.7 1,463.5 712.3 £600m £400m £200m £m 31-Dec-18 Cash Cash Refinance Rebased
Slide 23: Valuation – Key Assumptions
Valuation – Key Assumptions Discount rates remain firm, longer asset lives, slight power price reduction As at 30 June 2019 As at 31 December 2018 Discount Rate Weighted average 7.5% 7.6% Power Prices Weighted by market Based on third party forecasts Based on third party forecasts UK 2.75% 2.75% Lon
Slide 24: Summary Income Statement
Summary Income Statement Valuation gains Six months to Six months to 30 June 2019 30 June 2018 £m £m Statutory Basis Adjustments1 Expanded Basis Expanded Basis Total operating income 129.0 4.4 133.4 56.3 Acquisition costs - (0.4) (0.4) (0.9) Net operating income 129.0 4.0 133.0 55.4 Fund expenses (0
Slide 25: Summary Balance Sheet
Summary Balance Sheet NAV growth As at 30 June 2019 As at 31 December 2018 £m £m Statutory Basis Adjustments Expanded Basis Expanded Basis Portfolio value 1,618.5 2.4 1,620.9 1,268.7 Working capital (7.1) (2.6) (9.7) (1.7) Debt - - - - Cash 52.4 0.2 52.6 16.9 Net assets 1,663.8 - 1,663.8 1,283.9 NAV
Slide 26: Summary Cash Flow
Summary Cash Flow Good cash generation resulting in robust dividend cover Six months to Six months to 30 June 2019 £m 30 June 2018 £m Statutory Basis Adjustments Expanded Basis Expanded Basis Cash from investments 28.8 34.4 63.2 49.0 Operating and finance costs (0.4) (6.7) (7.1) (7.2) Cash flow from
Slide 27: Acquisitions: Reconciliation of Investment Commitments and Invested Cash
Acquisitions Reconciliation of Investment Commitments and Invested Cash Investment Commitments entered into in H1 2019 - £417.2m (see page 9) Cash invested in H1 2019 - £346.7m (£347.3m including costs, see page 26) (£m) Outstanding Cash invested Outstanding Commitments Timing Date of investment com
Slide 28: Concluding Remarks
Concluding Remarks Garreg Lywd, Wales trig-ltd.com
Slide 29: TRIG: Generating Sustainable Value
TRIG: Generating Sustainable Value Continued strong NAV and earnings growth Excellent financial performance ▲ Strong operating performance despite poor UK wind resource, showing benefits of diversification and focussed O&M enhancements ▲ Valuation gains from active portfolio management also contribu
Slide 30: Appendices
ost _ Appendices: Sheringham Shoal, Engiand trig-Itd.com
Slide 31: The Team
The Team Experienced Management Independent Board Investment Manager Operations Manager Key roles: Key Roles: Helen Mahy CBE (Chair) Sourcing and approving new investments Providing operational management services for the portfolio Advising the Board on investment strategy and dividend policy
Slide 32: InfraRed Capital Partners – Investment Manager
InfraRed Capital Partners – Investment Manager Over 20 years’ pedigree in infrastructure London (Infrastructure and Real Estate) Seoul New York (Representative) Real asset expertise across infrastructure & real estate (Infrastructure) Hong Kong 25 years $12bn 17 (Real Estate) track record equity man
Slide 33: RES – Operations Manager
RES – Operations Manager 37+ years experience in renewables A world leader in renewables 37 years 270+ track record projects delivered worldwide 2000+ 16GW employees developed and/or constructed 5GW 300MW Operational assets energy storage projects supported World’s largest independent renewable en
Slide 34: Board and Senior Management Team
Board and Senior Management Team Over 100 years of relevant experience on the TRIG Advisory Committee TRIG Independent Board Helen Jonathan Klaus Shelagh (Non-Executive) Mahy CBE Bridel Hammer Mason (Chairman) TRIG Investment Werner Chris Tony Jon Committee von Richard Richard Harry Gill Roper Entra
Slide 35: Renewables continue to see strong policy support
Renewables continue to see strong policy support The “following wind” of the imperative to decarbonise positively influences regulations ▲ Policy support is strong: ▪ EU renewables 2030 target increased to 32% ▪ Paris 2015 commitments “ratcheting” ▪ UK support for clean energy; supported by labour a
Slide 36: Scale of the Global Market for Renewables
Scale of the Global Market for Renewables Renewables is now mainstream Renewables as % of global power capacity1 Global energy related CO2 emissions (Gt)2 80% 76% Renewable 70% 35 share of global capacity 60% 61% 30 additions 50% 25 49% 47% 49% Renewable 43% power % of all 20 40% 37% capacity 15 30%
Slide 37: Market Developments: Costs Declining
Market Developments: Costs Declining Grid parity altering the shape of the European renewables market Maintaining technological diversification ▲ Falling costs mean that solar (as well as wind) can be viable without subsidies in the best locations – moving the investment focus from subsidies to unde
Slide 38: Portfolio construction: power price sensitivity maintained
Portfolio construction: power price sensitivity maintained Incorporating subsidy free projects without increasing portfolio sensitivity Impact on equity return of change in power price1 ▲ Acquisitions comprise a range of Fit, CfD and unsubsidised -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% projects, with
Slide 39: TRIG's Currency Exposure
TRIG’s Currency Exposure Hedges dampen currency exposure TRIG’s increasingly diversified portfolio mitigates risks. Currency exposures arise on both the UK and Non-UK investments. UK investments: Variables £↗ €↗ ▲ An indirect exposure arises due to power prices being UK investments influenced by the
Slide 40: Portfolio Map
Portfolio Map Geographically diversified By Jurisdiction / Power Market1 2 Jun-19 23% 28% 4% 5% 13% 19% 8% Dec-18 29% 39% 4% 5% 11% 12% England & Wales Scotland Northern Ireland Republic of Ireland France Sweden Germany Portfolio Overview Solar Onshore wind Offshore wind Battery storage Total Projec
Slide 41: Diversified shareholder base
Diversified shareholder base TRIG has a high quality institutional shareholder base as well as retail investors Shareholders by Type, as % of Register1 ▲ Top five holders account for 32% of TRIG’s issued share capital ▲ Top 10 holders account for 48% of TRIG’s issued share capital 6% ▲ Nearly 800 re
Slide 42: NAV sensitivities
NAV sensitivities Based on portfolio at 30 June 2019 -300.0p -200.0p -100.0p 0.0p 100.0p 200.0p 300.0p Discount rate +/- 0.5% -4.3p 4.6p Output P90 / P10 (10 year) -13.6p 12.9p Power price -/+ 10% -9.0p 9.0p Inflation -/+ 0.5% -4.5p 4.9p Reduction in assumption Operating costs +/- 10% -4.5p 4.5p 1 I
Slide 43: Approach to Gearing
Approach to Gearing Disciplined approach Term Project Debt Gearing1 TRIG’s portfolio at 30 June 2019 Project Category ▲ Limited to 50% of portfolio enterprise value typically (Younger = <10yrs) Average % of # of available gearing1 portfolio projects2 ▲ Fully amortising within the subsidy period Youn
Slide 44: Key Facts
Key Facts Fund Structure ▲ Guernsey-domiciled closed-end investment company Performance ▲ Dividends to date paid as targeted for each period ▲ NAV per share 30 June 2019 of 115.0p Issue / Listing ▲ Premium listing of ordinary shares on the Main Market of ▲ Market Capitalisation c. £1.9bn (30 June 20
Slide 45: Contacts
Contacts Investment Manager Other Advisers InfraRed Capital Partners Limited Administrator / Company Secretary Registrar 12 Charles II Street London SW1Y 4QU Aztec Financial Services (Guernsey) Ltd Link Asset Services (Guernsey) Ltd East Wing Mont Crevelt House Trafalgar Court Bulwer Avenue +44 (0)2
Slide 46: Important Information
Important Information By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: This document is an advertisement and is not a prospectus. Any decision to purchase shares in The Renewables Infrastructure Compa
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