NextEnergy Solar Fund Ltd · LSE:NESF
NextEnergy Solar Fund — H1 2017/18 Earnings Presentation
28 slides from NextEnergy Solar Fund's earnings presentation, Nov 17, 2017
Slide 1: NextEnergy Solar Fund Limited Results for the period ended 30 September 2017
NextEnergy Solar Fund Limited Results for the period ended 30 September 2017 Analyst Presentation – 17 November 2017
Slide 2: Agenda – Presented by the Investment Adviser
Interim Results for the period ended 30 September 2017 Agenda – Presented by the Investment Adviser MICHAEL BONTE-FRIEDHEIM NEC Founding Partner & CEO • Investment Update ALDO BEOLCHINI NEC Managing Partner & CFO • Financial Results • Q&A 2
Slide 3: Investment Update
——————— K — ~ oe SS EP Ee eee: Perry eee PELE
Slide 4: Overview
Interim Results for the period ended 30 September 2017 Overview NextEnergy Solar Fund (‘NESF”) Largest solar investment company listed on the LSE Attractive acquisitions sourced by NextEnergy Capital IM Limited Operational outperformance achieved by WiseEnergy ensuring optimal asset management
Slide 5: Investment Highlights
Interim Results for the period ended 30 September 2017 Investment Highlights Investment portfolio of 58 solar photovoltaic plants for c.539MW at the date of distribution of the Interim Report Acquired 12 new UK solar assets over the last six months and focused on completion of previous acquisiti
Slide 6: Continuous Operating Outperformance
Interim Results for the period ended 30 September 2017 Continuous Operating Outperformance NESF’s portfolio consistently generates Asset Assets Solar irradiation Power generation more electricity than its Period management monitored (delta vs. budget) (delta vs. budget) acquisition budget alpha(1)
Slide 7: First Investment Overseas – Solis Portfolio
Interim Results for the period ended 30 September 2017 First Investment Overseas – Solis Portfolio Portfolio of eight operating solar plants totalling 34.5MWp located in Acquisition Italy for a total value (equity and debt) of €131.9m (equivalent to c.£116.2m) All eight plants operational since
Slide 8: NESF Investment Portfolio
Interim Results for the period ended 30 September 2017 NESF Investment Portfolio Investment Portfolio as at 30 September 2017 1 Higher Hatherleigh 28 Tower Hill NESF’s investment 2 Shacks Barn 29 Branston portfolio of 50 PV plants 3 Gover Farm 30 Great Wilbraham representing 505MW of 4 Bilsham 31
Slide 9: Current UK Pipeline
Interim Results for the period ended 30 September 2017 Current UK Pipeline Tier 1: ROC Projects Under Exclusivity (Letters of Intent) NEC is negotiating Power plants location Regulatory regime Plant capacity Status multiple projects for NESF Multiple sites – ground based 1.2/1.3/1.6 ROCs c.193.1MW
Slide 10: NESF Focus 2017 / 2018
Interim Results for the period ended 30 September 2017 NESF Focus 2017 / 2018 Selective asset acquisition strategy Investment Portfolio acquisitions Activity Evaluation of subsidy-free projects Operating costs reduction Portfolio optimisation Operations Asset on-boarding Preparation fo
Slide 11: Financial Results
© Financial Results
Slide 12: Financial Highlights
Interim Results for the period ended 30 September 2017 Financial Highlights Net Asset Value grew from £478.6m to £602.5m. NAV per share grew from 104.9p to 105.1p Completion of equity raise for £126.5m (June 2017) Final draw down of the last tranches of the £150m long-term debt financing Fol
Slide 13: Portfolio Valuation
Interim Results for the period ended 30 September 2017 Portfolio Valuation Discount Rates Equity discount rate decreased to 7.0% for unlevered assets Levered discount rates up to 8.0% for levered assets to reflect greater risk to equity cash flows Weighted average discount rate decreased to 7.
Slide 14: NAV Movement
Interim Results for the period ended 30 September 2017 NAV Movement NESF NAV Bridge – 31 March 2017 to 30 September 2017 NAV (£m) 700.0 + 126.5 + 16.4 + 0.5 602.5 600.0 ( 2.1 ) ( 2.9 ) 478.6 ( 14.5 ) 500.0 400.0 300.0 200.0 100.0 0.0 Opening NAV Futher Capital Capital Raisings Cash Dividend Income f
Slide 15: UK Energy Market Dynamics
Interim Results for the period ended 30 September 2017 UK Energy Market Dynamics Forecast UK Power Price (Real 2017)(1) Current long-term power price forecast (£/MWh) implies a 20yr CAGR of 70.0 c.1.5% in real terms 65.0 Forecasted power curve 60.0 is on average lower by 55.0 5.2% compared to th
Slide 16: Capital Raise and Deployment
Interim Results for the period ended 30 September 2017 Capital Raise and Deployment During the period NESF completed a capital raise issuing 115m shares for total £126.5m proceeds Exhausted the Nov 2016 placing programme (issued 225m out of 300m shares) NESF Capital Deployment Timeline NESF ha
Slide 17: Debt Financing Strategy
Interim Results for the period ended 30 September 2017 Debt Financing Strategy At 30 September 2017, NESF had total debt Arranged £150m fully amortising facility expiring in 2035 with facilities for £268.5m unique NAV-enhancing features: (c.31% of GAV) Bespoke five-year grace period Proforma
Slide 18: Robust Dividend Cover
Interim Results for the period ended 30 September 2017 Robust Dividend Cover During the period the Company generated investment cash income of £19.4m and had net operating costs of £2.9m Notes: 1 The scrip dividend option came into effect on 25 August 2016. During the period, a scrip dividend paym
Slide 19: Summary Income Statement
Interim Results for the period ended 30 September 2017 Summary Income Statement Income Statement 2017 2016 For the period ended 30 September (GBPm) (GBPm) Investment Income 16.4 17.0 Movement in Investment Portfolio Value 0.5 10.3 Net Income 16.9 27.3 Total Expenses (3.0) (2.0) Finance Income 0.1 0.
Slide 20: Summary Balance Sheet and Cash Flow
Interim Results for the period ended 30 September 2017 Summary Balance Sheet and Cash Flow Balance Sheet 2017 2016 As at 30 September (GBPm) (GBPm) Investments 377.6 348.3 Current assets 239.9 1.9 Current Liabilities (15.0) (0.1) Net Asset Value 602.5 350.1 Net Asset Value per Share 105.1p 102.0p Ca
Slide 21: Q&A – Appendix
Q&A – Appendix Leading Solar Asset Manager
Slide 22: Portfolio Overview – Risk Diversification
Interim Results for the period ended 30 September 2017 Portfolio Overview – Risk Diversification By County By EPC Manufacturer 22
Slide 23: Portfolio Overview – Risk Diversification
Interim Results for the period ended 30 September 2017 Portfolio Overview – Risk Diversification By Solar Module Manufacturer By Inverter Manufacturer 23
Slide 24: NAV Sensitivities
Interim Results for the period ended 30 September 2017 NAV Sensitivities The long-term sensitivity NAV per Share analysis highlights the % change in the investment portfolio value (£390.4m) as well as the subsequent Discount rate (+/- 0.5%) (2.6)p (3.9%) 4.2% 2.8p impact on NESF’s NAV per share Po
Slide 25: Share Price Movement
Interim Results for the period ended 30 September 2017 Share Price Movement Without taking into Share Price vs NAV per share since IPO in 2014 account dividends paid, NESF shares outperformed its FTSE All-Share benchmark by 3.4% since IPO Total Shareholder Return was 4.7% for the period ended 30
Slide 26: Summary of Debt Financing Terms
Interim Results for the period ended 30 September 2017 Summary of Debt Financing Terms At 30 September 2017, NESF had total debt outstanding of £268.5m (c.31% of GAV) Proforma for repayment of Bayern LB facility, total debt was £225.2m, 27.5% of GAV) Average all-in cost of debt of 3.6% (profor
Slide 27: FX Hedging Strategy for the Italian Portfolio (Solis)
Interim Results for the period ended 30 September 2017 FX Hedging Strategy for the Italian Portfolio (Solis) FX hedging transaction securing the forward rate NextEnergy Solar Fund Ltd of conversion of (Guernsey) Dividends (GBP) expected EUR cashflows in GBP Tenor of up to 15 NextEnergy Solar GBP
Slide 28: Important Notice
28 Important Notice This document is issued by Next Energy Capital Limited (“NECL”), which is authorised and regulated by the UK Financial Conduct Authority (“FCA”) with registered number 471192. The contents of this document are strictly private and confidential and accordingly may not be published
NextEnergy Solar Fund — H1 2017/18 Earnings Presentation on 6ix