Greencoat Renewables Plc · EURONEXT:GRP
Greencoat Renewables — H1 2023 Earnings Presentation
32 slides from Greencoat Renewables's earnings presentation, 2023
Slide 1: Greencoat Renewables PLC 2023 Half Year Results Presentation
GREENCOAT RENEWABLES PLC 2023 Half Year Results Presentation
Slide 2: Disclaimer
Disclaimer This Presentation (the 'Presentation') has been prepared and issued by Greencoat Renewables PLC (the 'Company' or 'Greencoat Renewables'). While this Presentation has been prepared in good faith, the information contained in it has not been independently verified and does not purport to b
Slide 3: Overview
OVERVIEW
Slide 4: Greencoat Renewables H1 2023 Highlights
Greencoat Renewables H1 2023 Highlights Strong cash generation, 36% YoY growth €125.5m¹ Cash generated 3.5x¹ €35.9m of dividends paid in H1 H1 Divided Cover (c3.0x expected for FY) Implied levered discount rate of 9.0%2 €2.4bn GAV €1.3bn NAV NAV growth of 0.8c per share, with dividends paid of 113.2
Slide 5: Track Record of Consistent Delivery
Track Record of Consistent Delivery Long term dividend growth and continued reinvestment PF Debt Gross Dividend Period Cash Generation Cash Dividend Reinvestment3 Strategic Growth Since IPO Repayment Cover GRP benefitting from increased scale 2017 1 €11.8m - - €11.8m - following execution of its pan
Slide 6: Operational Considerations
OPERATIONAL CONSIDERATIONS
Slide 7: Portfolio Revenue Structure and Contracting Strategy
Portfolio Revenue Structure and Contracting Strategy Balanced approach to pricing €/MWh 1 Highly Contracted Revenue Streams (Real) Revenue Mix H1 2023 ● 66% of GRP’s revenues are set to come 100% 80 from contracted sources % of contracted revenue to 2032 90% ● GRP continues to secure long term % of
Slide 8: Operational Excellence Supporting NAV Growth
Operational Excellence Supporting NAV Growth Successful implementation of Continuous Improvement Plan and strong pipeline for further optimisation Performance to date Project pipeline Long term potential Operations optimisation Further planned developments Significant opportunities Performance to da
Slide 9: Knockacummer - Case Study
Knockacummer - Case Study Revenue growth through active asset management 2017 Estimated Annualised Initiative Incremental Revenue 2018 DS3 system services €625k 2019 Forestry and wake sector management €95k 2020 Grid outage management €20k 2021 PPA and Balancing cost re-negotiation €295k ‘Xtended’ p
Slide 10: Financial Performance and Capital Structure
FINANCIAL PERFORMANCE AND CAPITAL STRUCTURE
Slide 11: Financial Performance Overview
Financial Performance Overview Consolidated Cash P&L (€’000) HY 20192 HY 20202 HY 20212 HY 20222 HY 2023 Revenue 47,622 66,279 72,984 143,435 218,395 Operating Expenses (12,770) (17,892) (23,317) (33,017) (61,049) Key Considerations Tax/VAT 168 481 (514) (1,848) (8,593) ● Strong revenue growth year
Slide 12: Benefits of Strong Organic Cash Flows
Benefits of Strong Organic Cash Flows Supporting dividend growth and accretive reinvestment Resilience, Flexibility & Opportunity ILLUSTRATIVE ONLY H2 2023 2024 2025 2026 2027 2028 ● Cash flows benefit from substantial inflation protection that underpins DPS Increase1 4% 3% 1% 1% 1% 1% dividend cove
Slide 13: Net Asset Value
Net Asset Value €cents 112.4c (6.1c) (3.2c) 10.5c (0.3c) (0.1c) 113.2c Key Considerations 120.0 ● During the period, the 0.8 cent per share NAV increase is attributable to: – Depreciation of the portfolio (and 110.0 other movement) of -6.1 cent – Cash generated over the period (minus dividend paid)
Slide 14: Capital Structure & Debt Profile
Capital Structure & Debt Profile Robust balance sheet enabling continued growth GAV (€m) Capital Structure (€m) Debt Maturity Profile 3,000 Key Considerations 300 2,500 ● €2.4bn GAV funded by combination of 6% 250 4% long term debt, RCF and equity 2,000 38% 34% 200 ● €1.1bn total debt equivalent to
Slide 15: Portfolio and Acquisitions
PORTFOLIO AND ACQUISITIONS
Slide 16: The European Energy Transition
The European Energy Transition Demand for electricity is expected to grow …while Europe is urgently transitioning to net zero European demand forecast (TWh) 1 Key pillars EU energy strategy 5000 Growth vs 2022 +41% +55% +65% Phase out dependency on fossil fuels By 2030 European wind & 4000 +28% 3000
Slide 17: Established Positions in Large European Renewables Markets
Established Positions in Large European Renewables Markets Market entry in 6 European countries via onshore wind, offshore wind and solar assets Leading Position Key Considerations Existing Assets • Partnership with key developers and Offices Finland utilities including Ørsted, SSE, Statkraft and Po
Slide 18: H1 2023 Acquisition Activity
H1 2023 Acquisition Activity 3 acquisitions completed in H1 Cloghan Wind Farm ● 37.8 MW asset located in County Offaly, Ireland. Received a fixed RESS tariff until 2038. Completed Butendiek Offshore Wind Farm ● 288 MW asset located in North Germany (22.5% stake). In operation since August 2015 and r
Slide 19: Forward Sale Model – Construction Update
Forward Sale Model – Construction Update Investment Manager expertise resulting in enlarged value chain opportunity Construction Construction Expected Capacity Partner Progress Completion 32 Enercon E138 ● All deliveries completed Erstrask North, ● 29/ 32 WTG’s installed Q4 134.4 EP3 4.2 MW Enercon
Slide 20: GRP - Strategic Framework Agreement
GRP - Strategic Framework Agreement1 Key partnership with FuturEnergy Framework Highlights ● FuturEnergy Ireland is a JV established between ESB and Coillte in 2021 to develop renewable energy capacity ● Development pipeline comprises over 15 projects totaling in excess of 1.5 GW ● Majority of the e
Slide 21: Summary
SUMMARY
Slide 22: Capital Allocation Discipline Capitalizing on Organic Cash Generation
Capital Allocation Discipline Capitalizing on Organic Cash Generation Committed Sale Forward fully funded Capital Allocation Flexibility €m Q3 2023 Q4 2023 Q1 2024 ● Sale forward commitments (€259m) fully funded Equity Acquisitions - 167 92 ● Gearing carefully managed capitalizing on organic cash ge
Slide 23: Conclusion
Conclusion Strong performance, increased resilience & capital allocation flexibility €149m proxy EBITDA in H1 Record trading in H1 with balanced approach to power price risk 3.5x gross dividend cover >€500m post dividend cash flow to 2028 Increased cash generation driving earnings and NAV growth Cur
Slide 24: Appendix
APPENDIX
Slide 25: Greencoat Renewables Overview
Greencoat Renewables Overview Building a leading European renewable infrastructure company Key Strengths Simple business model Discount rate reflecting increasing market returns Equity Unlevered asset discount rate sitting at 6.9% underpinning 38 assets €2,446m Convert wind to energy gross asset val
Slide 26: High-Quality Existing Portfolio
High-Quality Existing Portfolio Diversified portfolio of 38 renewable energy assets with robust cashflow profiles Assets Geography Commentary Borkum Riffgrund 1 (14%) Ireland (59%) • 38 operational assets representing a net Cloosh Valley (9%) Germany (22%) capacity of 1.3GW and a fair market Butendi
Slide 27: Comprehensive ESG Strategy Underlying Renewables Pure-Play
Comprehensive ESG Strategy Underlying Renewables Pure-Play 100% renewable electricity generation Operational ESG performance Disclosure and progress Independent Board with five non-executive directors providing Article Sustainable Finance Disclosure Regulations (SFDR) – strong governance and oversig
Slide 28: H1 2023 Financial Performance (1/2)
H1 2023 Financial Performance (1/2) For the six months ended 30 June 2023 Group and wind farm SPV cash flows Net1 Gross1 €’000 €’000 Cash generation 121,943 125,466 Dividends paid (35,949) (35,949) SPV level Capex & PSO Cashflow2 (3,385) (3,385) SPV level debt repayment – (3,523) Acquisitions3 (276,
Slide 29: H1 2023 Financial Performance (2/2)
H1 2023 Financial Performance (2/2) For the six months ended 30 June 2023 Net Cash Generation – Reconciliation to For the six months ended 30 June 2023 Net Cash Generation – Breakdown Net €’000 Gross €’000 Net Cash Flows from Operating Activities Net €’000 Gross €’000 Revenue 218,395 218,395 Net cas
Slide 30: NAV Sensitivities
NAV Sensitivities Impact on NAV Valuation Factors ● The base case asset life depends on Discount rate (+/- 0.25%) the technology as those are underpinned by different design life: – On-shore wind assets’ lifetime is Inflation rate (-/+ 0.5%) typically 30 years – Off-shore wind assets’ lifetime is ba
Slide 31: Diversifying Further into Europe in 2023
Diversifying Further into Europe in 2023 Acquisition of Stake in Butendiek Investment Fundamentals Asset Highlights ● Acquisition of a 22.5% stake for c.€190m which was signed in Q4 2022 and ● 288 MW offshore wind farm, located in Germany’s exclusive economic zone completed in February 2023 in the N
Slide 32: List of Abbreviations
List of Abbreviations CAGR Compound Annual Growth Rate MWh Megawatt Hour Capex Capital Expenditure NAV Net Asset Value CCGT Combined Cycle Gas Turbine O&M Operations and Maintenance CfD Contract for Difference P&L Profit and Loss COD Commercial Operations Date PF Project Finance DS3 Delivering a Sec