Greencoat UK Wind Plc · LSE:UKW
Greencoat UK Wind — FY2021 Earnings Presentation
45 slides from Greencoat UK Wind's earnings presentation, February 2022
Slide 1: Annual Results
Annual Results February 2022 For Professional Investors Only
Slide 2: 2021 Highlights
2021 Highlights 2,933GWh Power generation 20% below budget Power generation £256.8m / 1.9x High power prices, strong cash generation and high dividend cover Net cash generation / dividend cover £148.0m / 7.18p per share Stable inflation linked revenue stream and RPI linked dividend Dividends declare
Slide 3: Simple Model
Simple Model 6-43 wind Generating capacity increased farms from 127 to 1,422MW since IPO Total reinvestment Equity 14.4TWh Total power produced Debt £878.4m Total cash generated £271.9m £606.5m Total dividends paid or declared “6p dividend, increasing with RPI inflation and real NAV preservation’’ N
Slide 4: Wind Resource and Generation
Wind Resource and Generation UK average wind speed (m/s)(1) Annual average 10 year average 7 6 5 4 3 2 1 0 2013(2) 2014 2015 2016 2017 2018 2019 2020 2021 Wind Speed: + 3% - 2% + 5% - 6% - 1% - 4% - 8% + 2% - 12% Production: + 8% - 3% + 8% - 6% 0% - 6% - 11% - 3% - 20% 4 Notes: (1) source: www.gov.u
Slide 5: Track Record of Consistent Delivery
Track Record of Consistent Delivery Period Production Cash Generation Dividend(1) Dividend Cover(2) RPI NAV Growth 2013(3) 292GWh £21.6m £14.2m (4.50p) 1.8x 1.9% 2.5% 2014 565GWh £32.4m £24.8m (6.16p) 1.6x 1.6% 2.5% 2015 799GWh £48.3m £29.6m (6.26p) 1.7x 1.2% 0.5% 2016 978GWh £49.0m £38.8m (6.34p) 1
Slide 6: Operational and Financial Performance
Operational and Financial Performance
Slide 7: Operational Performance
Operational Performance Notable issues affecting portfolio availability were: ▪ Brockaghboy – scheduled grid outage to connect a nearby substation ▪ North Hoyle – scheduled grid outage, planned downtime for insulator exchanges and export cable ▪ Corriegarth and Kildrummy – unplanned outages coincidi
Slide 8: Power Price
Power Price Demand Supply Energy efficiency Demand in China and India Gas 200p/th = £140/MWh Electric vehicles Cost of extraction Electrification of heat Carbon Focus on climate change £100/t = £40/MWh Absolute level of demand not important in the long term Generation mix will be the same Network ch
Slide 9: Financial Performance (1)
For the year ended 31 December 2021 Group and wind farm SPV cash flows £000 Net cash generation" 256,764 Dividends paid (138,786) Acquisitions® (569,783) Acquisition costs®) (6,263) Equity issuance 647,618 Equity issuance costs (9,715) Net repayment under debt facilities (150,000) Upfront finance co
Slide 10: Financial Performance (2)
Financial Performance (2) 10
Slide 11: Net Asset Value
Net Asset Value Increase in portfolio valuation of £116.6m (5p per share): +14p increase in forecast power prices +2p increase in inflation assumptions -5p increase in corporate tax from 2023 onwards -6p depreciation and other assumption changes 11
Slide 12: Net Asset Value Since IPO
Net Asset Value Since IPO 34.4% growth(1) since IPO vs RPI growth of 27.7% “6p dividend, increasing with RPI inflation and real NAV preservation’’ 12 Note: (1) per share and adjusted for accrued dividends
Slide 13: Investment Performance
Investment Performance TSR since IPO of 125.6%(1) and 10.7% in 2021 Strong, consistent return with correlation to inflation 13 Note: (1) from IPO to 31 December 2021
Slide 14: Portfolio and Acquisitions
GREENCOAT UK WIND Portfolio and Acquisitions
Slide 15: Portfolio Overview
Portfolio Overview Generating sufficient electricity to power 1.5 million homes 15
Slide 16: Portfolio Overview
Portfolio Overview Well-diversified generating portfolio of 1,422MW – 5% market share Note: breakdown by value as at 31 December 2021 16
Slide 17: Acquisitions Overview
Acquisitions Overview Acquisition strategy delivers only high quality assets for investors When these are not available or are over-priced, we don’t buy assets ▪ UKW not linked to a specific developer so can buy from the whole market ▪ Transacted with 19(1) sellers to date Independence ▪ UKW is not
Slide 18: Selecting the Best Value Investments
Selecting the Best Value Investments £80bn Market Asset Identification and Target Selection 2013 2014 2015 2016 2017 2018 2019 2020 2021 Age, capacity, load factor, seller price expectation Initial Diligence and Pricing(1) 47 37 48 40 41 63 40 20 20 UKW structural advantages, negotiation Detailed Du
Slide 19: Investments in 2021
Investments in 2021 Month of Wind Farm Seller Net MW Investment Comment Acquisition Bilateral purchase of Braes of Doune Mar 2021 Hermes 36.0 £48.1m remaining 50% Andershaw Sep 2021 Statkraft 35.0 £121.2m First project from Statkraft Completion Douglas West Blue Energy 45.0 £25.3m(1) First subsidy f
Slide 20: Braes of Doune
Braes of Doune Seller ▪ Hermes Capacity ▪ 72MW Turbines ▪ 36 x Vestas V80 2MW Commercial Operations Date ▪ June 2007 PPA ▪ Centrica Turbine O&M ▪ Vestas O&M Management ▪ DNV-GL ▪ Part of IPO seed portfolio ▪ Restricted from purchasing Centrica’s 50% due to single investment limits at the time ▪ Herm
Slide 21: Andershaw
Andershaw Seller ▪ Statkraft Capacity ▪ 35MW Turbines ▪ 11 x Vestas V117 3.3MW Commercial Operations Date ▪ February 2017 PPA ▪ Statkraft Turbine O&M ▪ Statkraft O&M Management ▪ Statkraft ▪ 100% of Andershaw acquired ▪ 2 miles south of Douglas in South Lanarkshire ▪ Onshore project with 0.9 ROCs /
Slide 22: Douglas West
Douglas West Seller ▪ Blue Energy Capacity ▪ 45MW Turbines ▪ 13 x Vestas V136 3.6MW Commercial Operations Date ▪ September 2021 PPA ▪ Erova Turbine O&M ▪ Vestas O&M Management ▪ Natural Power ▪ Bilateral transaction for 100% ownership ▪ First power exported in July 2021 ▪ Final commissioning complet
Slide 23: Burbo Bank Extension
Burbo Bank Extension Seller ▪ AIP Capacity ▪ 258MW Turbines ▪ 32 x Vestas V164 8.13MW Commercial Operations Date ▪ July 2017 PPA ▪ CFD Turbine O&M ▪ Orsted O&M Management ▪ Orsted ▪ Located 4 miles north of the Wirral in North West England, close to Rhyl Flats and North Hoyle ▪ Owned by Orsted 50% +
Slide 24: Windy Rig
Windy Rig Seller ▪ Statkraft Capacity ▪ 43.2MW Turbines ▪ 12 x Vestas V112 3.6MW Commercial Operations Date ▪ December 2021 PPA ▪ Statkraft Turbine O&M ▪ Vestas O&M Management ▪ Statkraft ▪ Bilateral transaction for 100% ownership ▪ Near Castle Douglas in south west Scotland ▪ Acquisition completed
Slide 25: Glen Kyllachy
Glen Kyllachy Seller ▪ RWE Capacity ▪ 48.5MW (de-rated from 50W) Turbines ▪ 20 x Nordex N90 2.5MW Commercial Operations Date ▪ December 2021 PPA ▪ Tesco Turbine O&M ▪ Nordex O&M Management ▪ Natural Power ▪ Bilateral transaction for 100% ownership for £57.5m ▪ Location south of Inverness and connect
Slide 26: Kype Muir Extension
Kype Muir Extension Location Seller ▪ Banks Renewables Capacity ▪ 67.2MW ▪ 11 x Nordex N133 4.8MW Turbines + 4 x Nordex N117 3.6MW Commercial Operations Date ▪ Expected Q4 2022 PPA ▪ Fixed PPA with utility Turbine O&M ▪ Nordex O&M Management ▪ Banks Renewables ▪ Bilateral transaction for 49.9% owner
Slide 27: Commitments
Commitments Wind Farm Month of Acquisition Seller Net MW Commitment Comment Twentyshilling Expected Mar 2022 Statkraft 37.8 £51.4m Commissioning shortly Kype Muir Extension Q4 2022 Banks Renewables 33.5 £51.4m(1) Using balance sheet to secure transaction South Kyle Q1 2023 Vattenfall 235.0 £320.0m L
Slide 28: Strategy and Ongoing Market Development
Strategy and Ongoing Market Development ROC Subsidy free UKW cashflows projects and CFD projects ▪ UKW expects to continue to make a significant Wholesale power number of ROC investments Wholesale price Wholesale cashflow power ▪ There may be further opportunities to invest in power price price Whol
Slide 29: Secondary Market - Continued Opportunities to Grow
Secondary Market - Continued Opportunities to Grow UKW net generating capacity (MW) 1,422MW 1400 1200 1000 800 600 400 200 127MW 0 2014 2015 2016 2017 2018 2019 2020 2021 30000 £80bn market 25000 20000 15000 UK offshore capacity (MW) £20bn market 10000 5000 UK onshore capacity (MW) 0 2014 2015 2016
Slide 30: ESG
GREENCOAT UK WIND ESG
Slide 31: Environment, Social, Governance and Health & Safety
Environment, Social, Governance and Health & Safety ▪ UKW has sustainable investment objectives for purposes of article 9 SFDR ▪ Portfolio produces enough renewable electricity to power 1.5m homes ▪ Recycling of capital enabling more renewable generation capacity to be built out Environmental ▪ 1.7m
Slide 32: ESG Case Study – Peat Restoration
ESG Case Study – Peat Restoration ▪ Peat is the largest natural terrestrial carbon sink ▪ Dunmaglass – restoring 20 hectares of blanket bog following construction through ditch blockings ▪ Tappaghan – transplanted small peat plugs from vegetated surfaces to peat that had failed to revegetate followi
Slide 33: ESG Case Study – Wiston Lodge
ESG Case Study – Wiston Lodge ▪ Wiston Lodge delivers nature based learning programmes to children, young people and vulnerable adults through ▪ Adventure activities ▪ Nature connections (bushcraft, conservation, gardening) ▪ Music and art ▪ Renewable energy education ▪ Clyde wind farm gave £63k in
Slide 34: ESG Developments and Reporting
ESG Developments and Reporting ▪ Scope 1-3 reporting (35, 74 and 87,908 tonnes CO2) TCFD ▪ Scenario analysis reporting for the first time ▪ Greencoat Capital signatory since 2016 UN PRI ▪ A score in Strategy and Governance and A+ in Infrastructure in 2020 Net Zero ▪ Greencoat Capital is one of 220 s
Slide 35: Summary
GREENCOAT UK WIND Summary
Slide 36: 2021 Highlights
2021 Highlights 2,933GWh Power generation 20% below budget Power generation £256.8m / 1.9x High power prices, strong cash generation and high dividend cover Net cash generation / dividend cover £148.0m / 7.18p per share Stable inflation linked revenue stream and RPI linked dividend Dividends declare
Slide 37: Appendix
GREENCOAT UK WIND Appendix
Slide 38: Greencoat UK Wind
Greencoat UK Wind ▪ Greencoat UK Wind acquires and operates UK wind farms. The cash generated by these assets is used primarily to pay a robust, premium dividend to shareholders. The Simple remainder is reinvested to ensure capital is preserved in real terms. ▪ Simple structure, UK domiciled with a
Slide 39: Diversified Asset Portfolio (1)
Diversified Asset Portfolio (1) Group Acquisition Total Commercial ROCs / Forecast Net Load Wind Farm Country Turbines PPA Ownership Net MW(1) MW Operations Date Date MWh Factor(2) Stake Andershaw Scotland Vestas Statkraft 35.0 100% 35.0 Feb-17 Sep-21 0.9 34.4% Bicker Fen England Senvion EDF 26.7 80
Slide 40: Diversified Asset Portfolio (2)
Diversified Asset Portfolio (2) Group Acquisition Total Commercial ROCs / Forecast Net Load Wind Farm Country Turbines PPA Ownership Net MW(1) MW Operations Date Date MWh Factor(2) Stake Cotton Farm England Senvion Sainsbury’s 16.4 100% 16.4 Mar-13 Oct-13 1.0 35.5% Crighshane N Ireland Enercon Energ
Slide 41: Diversified Asset Portfolio (3)
Diversified Asset Portfolio (3) Group Acquisition Total Commercial ROCs / Forecast Net Load Wind Farm Country Turbines PPA Ownership Net MW(1) MW Operations Date Date MWh Factor(2) Stake Langhope Rig Scotland GE Centrica 16.0 100% 16.0 Dec-15 Mar-17 0.9 33.3% Lindhurst England Vestas RWE 9.0 49% 4.4
Slide 42: Diversified Asset Portfolio (4)
Diversified Asset Portfolio (4) Group Acquisition Total Commercial ROCs / Forecast Net Load Wind Farm Country Turbines PPA Ownership Net MW(1) MW Operations Date Date MWh Factor(2) Stake Sixpenny Wood England Senvion Statkraft 20.5 51.6% 10.6 Jul-13 Aug-14 1.0 30.8% Slieve Divena N Ireland Nordex SS
Slide 43: NAV Sensitivities
Impact on NAV Discount rate (+/- 0.5%) a Inflation rate (-/+ 0.5%) Fe Energy yield (10 year P90/P10) Po Power price (-/+ 10%) Pt | Asset life (-/+ 5 years) -20p -15p -10p = -5p Op 5p 10p 15p 20p pence per share 43
Slide 44: Disclaimer (1)
Disclaimer (1) Important Information This presentation and its contents are confidential. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES (OR TO ANY US PERSON), AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, CANADA, JAPAN, ANY MEMBER STATE O
Slide 45: Disclaimer (2)
Disclaimer (2) Any offer may only be made in Jersey where the offer is valid in the United Kingdom or Guernsey and is circulated in Jersey only to persons similar to those to whom, and in a manner similar to that in which, it is for the time being circulated in the United Kingdom or Guernsey as the