Renewables Infrastructure Group Limited GBP Red.Shs · LSE:TRIG
Renewables Infrastructure Group Limited GBP Red.Shs — The Renewables Infrastructure Group — FY2016 Earnings Presentation
39 slides from Renewables Infrastructure Group Limited GBP Red.Shs's earnings presentation, Feb 21, 2017
Slide 1: Annual Results Presentation: Year to 31 December 2016
The Renewables Infrastructure Group Annual Results Presentation: Year to 31 December 2016 21 February 2017 trig-ltd.com
Slide 2: Contents
Contents Section Slide Introduction / The Team 3 Overview of Annual Results 5 Portfolio and Operations 11 Financials 16 Outlook 24 Appendices 27 Contacts / Important information 38 2 trig-ltd.com
Slide 3: Introduction
Introduction The leading London-listed renewables investment company1 TRIG is invested in 53 onshore wind & solar projects in the UK, France and Ireland London-listed investment company (IPO in 2013) established in Guernsey with an independent board of non-executive directors Advised by InfraR
Slide 4: The Team
The Team Access to Experienced Management Independent Board Investment Manager Operations Manager Helen Mahy CBE (Chair) Strong, 18+ year track record in The world’s largest independent renewable infrastructure and real estate funds energy developer Jonathan Bridel Over US$9 billion of equity
Slide 5: Overview of Annual Results
Overview of Annual Results Chemin Canal, La Réunion trig-ltd.com
Slide 6: Financial Highlights – 2016
Financial Highlights – 2016 Resilient performance in challenging market conditions Results ▲ NAV per share: 100.1p (Dec 2015: 99.0p): 2.7% uplift, taking into account accelerated dividend payment 1 ▲ Earnings per share: 8.8p (2015: 3.0p): Portfolio uplift from discount rates outweighing lower power
Slide 7: Investment Activity
Investment Activity Scale, diversification, strategic partnerships Investments Portfolio Evolution ▲ January 2016: £44m in a French solar portfolio (net 21MW) December December IPO 2016 2015 July 2013 alongside Akuo Energy Projects 53 36 18 ▲ July 2016: £9m in a French solar park (net 6MW), Midi Net
Slide 8: Case Study: Freasdail Wind Farm (1)
Case Study: Freasdail Wind Farm (1) TRIG’s second construction asset, proceeding well ▲ In November 2016, TRIG acquired a 100% interest in Freasdail from RES for £18.5m ▲ 11 turbines, 22.6MW project on the Kintyre Peninsula, Scotland ▲ Over 85 people employed on-site at peak, construction risk manag
Slide 9: Case Study: Freasdail Wind Farm (2)
Case Study: Freasdail Wind Farm (2) Managers’ experience in construction: investment + implementation Offloading turbine components Transporting turbine components Constructing the turbine base at Cambeltown Harbour, Kintyre The first turbine installed Heavy lifting in progress View west from turbin
Slide 10: Market Dynamics
Market Dynamics Strong interest in asset class Power Price Forecasts Discount Rates ▲ Further reductions in power price forecasts over 2016, ▲ Reduced by 30 bps in H2, 50bps for the year down c.5% ▲ Appetite for investment in the sector undiminished by Brexit However: ▲ New entrants ▲ Mitigation in
Slide 11: Portfolio and Operations
Portfolio and Operations Roussas Claves, France trig-ltd.com
Slide 12: Portfolio (1) – Diversification
Portfolio (1) – Diversification At 31 December 2016: 710MW net capacity / 53 projects By Jurisdiction / Power Market1 2 France 13% Republic of Ireland (SEM) 2% England (GB) 28% Northern Ireland (SEM) 7% Scotland (GB) 50% By Technology/ Weather System2 3 Solar PV 30% Wind (Atlantic) 65% Wind (Med) 5%
Slide 13: Portfolio (2) – Revenue Profile
Portfolio (2) – Revenue Profile Over two-thirds of near-term revenues not linked to power prices Project Revenue by Type PPA Market Revenue Fixed PPAs & 15% FITs 33% PPA Floor 12% 20171 ROC Recycle, Embedded Benefits, Other 5% ROC Buyout 35% 1. Project revenue expected for 12 months from 1 January 2
Slide 14: Operational Performance (1)
Operational Performance (1) Challenging weather – mitigated by diversification UK Average Wind Speed2 16 Overall Production / Weather Average wind speed (knots) 14 12 Generation was 1,469GWh1 10 ▲ Increase of 9% on 2015 8 ▲ But 9% below P50 budget 6 ▲ Unfavourable UK & Ireland wind was the biggest f
Slide 15: Operational Performance (2)
Operational Performance (2) Diversification sustaining performance close to long-term expectations Portfolio Monthly Production vs. P501 200 Monthly 2013 2014 2015 2016 production (GWh) 150 Portfolio P50 estimate Monthly production 100 50 0 Enhancement Initiatives • Condition monitoring & reliabilit
Slide 16: Financials
Financials Meikle Carewe, Scotland trig-ltd.com
Slide 17: Financials Agenda
Financials Agenda Portfolio Valuation Bridge and Assumptions Summary Income Statement, Balance Sheet and Cash Flow Statement Funding 17 trig-ltd.com
Slide 18: Portfolio Valuation Bridge – 2016
Portfolio Valuation Bridge – 2016 18 trig-ltd.com
Slide 19: Valuation – Key Assumptions
Valuation – Key Assumptions 31 December 2016 31 December 2015 Discount Rate1 Weighted average 8.4% 9.0% Energy Yield All portfolio projects P50 – central case P50 – central case Weighted by market Power Prices See power curve on slide 10 Based on third party forecasts Based on third party forecasts
Slide 20: Summary Income Statement
Summary Income Statement Strong valuation gains in the year Year to 31 Dec 2016 Year to 31 Dec 2015 £m £m Statutory Basis Adjustments1 Expanded Basis Expanded Basis Total operating income 76.0 12.1 88.1 27.3 Acquisition costs - (0.3) (0.3) (1.1) Net operating income 76.0 11.8 87.8 26.2 Fund expenses
Slide 21: Summary Balance Sheet
Summary Balance Sheet NAV per share up 2.6p after adjusting for movement to quarterly dividends At 31 Dec 2016 At 31 Dec 2015 £m £m Statutory Basis Adjustments Expanded Basis Expanded Basis Portfolio value 817.8 0.9 818.7 712.3 Working capital (2.0) (1.1) (3.1) (0.9) Debt - - - - Cash 18.5 0.2 18.7
Slide 22: Summary Cash Flow
Summary Cash Flow Robust cash flows in low power price environment Year to 31 Dec 2016 Year to 31 Dec 2015 £m £m Statutory Basis Adjustments Expanded Basis Expanded Basis Cash from investments 47.4 12.1 59.5 42.4 Operating and finance costs (1.1) (8.1) (9.2) (8.4) Cash flow from operations 46.3 4.0
Slide 23: Funding
Funding Strong support from shareholders and lenders Equity Issuance ▲ April 2016: Launch of second Share Issuance Programme ▲ May 2016: £30.3m placing ▲ September 2016: £62.6m placing Revolving Acquisition Facility ▲ April 2016: Renewed £150 million 3-year multicurrency facility, tighter margin of
Slide 24: Outlook
Outlook Olmo, Corsica trig-ltd.com
Slide 25: Market Opportunities
Market Opportunities Strong pipeline of projects UK Generating Capacity (Major Renewable Energy Technologies) Wind & Solar PV developments Solar Onshore Offshore Battery Installed ▲ Strong momentum in Northern Europe PV1 Wind Wind Storage2 capacity (GW) (GW) (GW) (GW) ▲ UK development activity slowi
Slide 26: Outlook
Outlook Attractive Dividends 2017 target dividend of 6.40p, equivalent to 6% yield Continuing to monitor inflation, real power price forecasts and cash cover Market Dynamics Power market has seen recent uptick in pricing Continued strong levels of activity in the renewables market Power pric
Slide 27: Appendices
Broussan, France trig-Itd.com
Slide 28: Operational Performance
Operational Performance Managing over the long term 200 25 160 Wind 20 Solar Production (GWh) Production (GWh) 120 15 80 10 40 5 0 0 Wind Actual Production Wind Budget Production Solar Actual Production Solar Budget Production Electricity Performance vs. acquisition P50 estimates Generating producti
Slide 29: EU – New Power Capacity Installations
EU – New Power Capacity Installations Wind + Solar PV: dominating European new power capacity 2014 Share of EU New Power Capacity (Total = 27GW) 2015 Share of EU New Power Capacity (Total = 29GW) 2016 Share of EU New Power Capacity (Total = 24GW) Source: Wind Europe 29 trig-ltd.com
Slide 30: UK Renewables Production History
UK Renewables Production History UK Electricity Production from Renewable Energy by Major Source (GWh) Source: UK Government / BEIS 30 trig-ltd.com
Slide 31: Counterparty Exposure
Counterparty Exposure Broad spread of high quality equipment, maintenance and off-take counterparties 1. By value, as at 31 December 2016 using Directors’ valuation. Where projects have more than one contractor, valuation is apportioned. 31 2. Equipment manufacturers generally also supply maintenanc
Slide 32: NAV sensitivities
NAV sensitivities Based on portfolio at 31 December 2016 Sensitivity effect on NAV per share as at 31 December 2016 (£ labels represent sensitivity effect on portfolio value of £818.7m) 32 trig-ltd.com
Slide 33: 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) Investment matters TRIG Investment Werner Chris Tony Jon Richard Committee von Gill Roper
Slide 34: Operational Management
Operational Management Breadth and depth of capability provided by RES Managing Performance ▲ Availability – minimising lost production, fault rectification ▲ Generation – maximising output, maintenance planning, turbine & grid settings ▲ Financial – budget control, minimising costs, distributions ▲
Slide 35: UK Government Benchmark Yields
UK Government Benchmark Yields Low rate environment makes yielding assets attractive UK Gilt Yields (Last 5 Years) Source: InfraRed, Thomson Reuters 35 trig-ltd.com
Slide 36: Dividend Track Record
Dividend Track Record Dividend target of 6.40p per share for 2017 Period Aggregate annual dividend per share Interim dividends per share Payment timing Quarterly 2017 target for year 6.40p 1.60p (Jun/Sep/Dec/Mar) Q4 2016 1.5625p Due 3/2017 Q3 2016 6.25p 1.5625p Paid 12/2016 Q2 2016 1.5625p Paid 9/20
Slide 37: Key Facts
Key Facts Fund Structure ▲ Guernsey-domiciled closed-end investment company Performance ▲ 2016 aggregate dividend paid/declared of 6.25p per share ▲ 2016 Total Shareholder Return of 15.75% (6.7% for the FTSE 250) - Source: Thomson Reuters, FTSE Index Series Issue / Listing ▲ Premium listing of ordin
Slide 38: Contacts
Contacts Investment Manager Other Advisers InfraRed Capital Partners Ltd Administrator / Company Secretary Registrar 12 Charles II Street London SW1Y 4QU Aztec Financial Services (Guernsey) Ltd Capita Registrars (Guernsey) Ltd East Wing Mont Crevelt House +44 (0)20 7484 1800 Trafalgar Court Bulwer A
Slide 39: 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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