Greencoat UK Wind Plc · LSE:UKW
Greencoat UK Wind — H1 2019 Earnings Presentation
36 slides from Greencoat UK Wind's earnings presentation, July 2019
Slide 1: Half Year Results July 2019
Aly, GREENCOAT — Diz — Half Year Results July 2019
Slide 2: H1 2019 Highlights
H1 2019 Highlights 1,145GWh Power generation 9% below budget due to low wind resource Power generation £67.5m Strong cash generation Net cash generation £47.8m / 3.47p per share Dividend in line with FY target Dividends declared with respect to the period 979MW 3 investments (£598m), including first
Slide 3: Simple Model
Simple Model 6-35 wind Generating capacity increased farms from 127 to 979MW since IPO Total reinvestment Equity 7.1TWh Total power produced Debt £416.2m Total cash generated £129.0m £287.2m Total dividends paid or declared “6p dividend, increasing with RPI inflation and real NAV preservation’’ 3 No
Slide 4: Operational and Financial Performance
Operational and Financial Performance
Slide 5: Financial Performance (1)
For the six months ended 30 June 2019 Group and wind farm SPV cashflows £'000 Net cash generation 67,476 Dividends paid (40,553) Acquisitions” (608,472) Acquisition costs (2,537) Equity issuance 505,742 Equity issuance costs (6,907) Net drawdown under debt facilities 95,000 Upfront finance costs (2,
Slide 6: Financial Performance (2)
For the six months ended 30 June 2019 Net Cash Generation — Breakdown £'000 Revenue 122,983 Operating expenses (30,851) Tax (6,481) Wind farm cashflow 85,651 Management fee (6,943) Operating expenses (747) Ongoing finance costs (9,404) Other 1,350 Group cashflow (15,744) VAT (Group and wind farm SPV
Slide 7: Net Asset Value
Net Asset Value The decrease in the portfolio valuation of £46.3m comprised approximately: ▪ Depreciation of 1p per share ▪ Adverse movements in the long term power price forecast of 2p per share 7
Slide 8: Net Asset Value Since IPO
Net Asset Value Since IPO “6p dividend, increasing with RPI inflation and real NAV preservation’’ Note: (1) per share and adjusted for accrued dividends 8
Slide 9: Investment Performance
Investment Performance TSR since IPO of 96.8(1) Strong, consistent return with correlation to inflation Note: (1) from IPO to 30 June 2019 9
Slide 10: Portfolio and Acquisitions
Aly, GREENCOAT — Diz — Portfolio and Acquisitions
Slide 11: Portfolio Overview
Portfolio Overview Generating sufficient electricity to power 940,000 homes 11
Slide 12: Portfolio Overview
Portfolio Overview Well-diversified generating portfolio of 979MW - third largest owner of UK onshore wind 12 Note: breakdown by value as at 30 June 2019
Slide 13: Asset Management and Performance Enhancement
Asset Management and Performance Enhancement Contract ▪ Contract refresh at lower cost and extended scope ▪ Turbine O&M contracts Development and ▪ Site management contracts Cost Reductions ▪ Insurance portfolio pooling ▪ Condition monitoring implementation Active ▪ High voltage maintenance strategy
Slide 14: Dunmaglass
Dunmaglass ▪ SSE (50.1% co-investor after Previous Ownership acquisition) Capacity ▪ 94MW Turbines ▪ 33 x GE 2.85MW Commercial Operations Date ▪ December 2017 PPA ▪ SSE until 2034 Turbine O&M ▪ GE O&M Management ▪ SSE ▪ Part of UKW’s second large SSE co-investment with minority pension fund alongsid
Slide 15: Stronelairg
Stronelairg ▪ SSE (50.1% co-investor after Previous Ownership acquisition) Capacity ▪ 228MW ▪ 13 x Vestas V112 3.45MW + 53 x Turbines Vestas V117 3.45MW Commercial Operations Date ▪ December 2018 PPA ▪ SSE until 2034 Turbine O&M ▪ Vestas O&M Management ▪ SSE ▪ Part of UKW’s second large SSE co-inves
Slide 16: Tom nan Clach
Tom nan Clach Seller ▪ Belltown Power Capacity ▪ 39.1MW (constrained) Turbines ▪ 13 x Vestas V112 3.45MW Commercial Operations Date ▪ May 2019 PPA ▪ Statkraft until June 2034 Turbine O&M ▪ Vestas O&M Management ▪ TBD ▪ Tom nan Clach is UKW’s first project constructed under the Contract for Differenc
Slide 17: Douglas West
Douglas West Seller ▪ Blue Energy Capacity ▪ 45MW Turbines ▪ 13 x Vestas V136 3.45MW Commercial Operations Date ▪ Target July 2021 PPA ▪ Route-to-market PPA to be agreed Douglas West * Turbine O&M ▪ Vestas Clyde wind farms O&M Management ▪ TBD ▪ Douglas West is UKW’s first subsidy free project and w
Slide 18: Ongoing Market Development
Ongoing Market Development ROC projects UKW cashflows Subsidy free and CFD projects Wholesale power price Wholesale cashflow Wholesale power power price Wholesale price cashflow power cashflow price cashflow CFD cashflow ROC Fixed and cashflow indexed cashflow CFD cashflow ▪ As with 2018, given mark
Slide 19: Secondary Market - Continued Opportunities to Grow
Secondary Market - Continued Opportunities to Grow 1000 979MW 900 800 UKW net generating capacity (MW) 700 600 500 400 300 200 100 127MW 0 30,000 25,000 £60bn market 20,000 15,000 £20bn market UK offshore capacity (MW) 10,000 5,000 UK onshore capacity (MW) 0 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18
Slide 20: Summary
GREENCOAT — UK pas a Summary
Slide 21: H1 2019 Highlights
H1 2019 Highlights 1,145GWh Power generation 9% below budget due to low wind resource Power generation £67.5m Strong cash generation Net cash generation £47.8m / 3.47p per share Dividend in line with FY target Dividends declared with respect to the period 979MW 3 investments (£598m), including first
Slide 22: Appendix
ll, GREENCOAT. (& Diz — Appendix
Slide 23: Simple Low Risk Proven
▪ 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 remainder is reinvested to ensure Simple capital is preserved in real terms. ▪ Simple structure, UK domiciled with a strong independent
Slide 24: 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 Bicker Fen England Senvion EDF 26.7 80% 21.3 Sep-08 Oct-17 1.0 23.6% Bin Mountain N Ireland GE SSE 9.0 100% 9.0 J
Slide 25: 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 36.0% Crighshane N Ireland Enercon Energ
Slide 26: 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 Lindhurst England Vestas RWE 9.0 49% 4.4 Oct-10 Nov-13 1.0 30.1% Little Cheyne England Nordex RWE 59.8 41% 24.5 M
Slide 27: 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 Screggagh N Ireland Nordex Energia 20.0 100% 20.0 May-11 Jun-16 1.0 28.7% Sixpenny Wood England Senvion Statkraft
Slide 28: Wind Resource and Production
0 1 2 3 4 7 5 6 January February March April May June July August Production: + 8% Wind Speed: + 3% 2013(2) September October November December Annual average January February March April May June July August 2014 - 3% - 2% September October November December January February March 10 year average A
Slide 29: Track Record of Consistent Delivery
Track Record of Consistent Delivery Period Production Cash Generation Dividend(1) Dividend Cover(2) RPI NAV Growth 2013(3) 291.5GWh £21.6m £14.2m (4.50p) 1.8x 1.9% 2.5% 2014 564.6GWh £32.4m £24.8m (6.16p) 1.6x 1.6% 2.5% 2015 799.3GWh £48.3m £29.6m (6.26p) 1.7x 1.2% 0.5% 2016 978.1GWh £49.0m £38.8m (
Slide 30: 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 ▪ Acquisitions selected from 14(1) sellers (many assets in the mar
Slide 31: Selecting the Best Value Investments
Selecting the Best Value Investments £50bn Market Asset Identification and Target Selection Age, capacity, load factor, seller price expectation 2013 2014 2015 2016 2017 2018 Initial Diligence and Pricing UKW structural advantages, negotiation 47 37 48 40 41 63 Detailed Due Diligence Board involveme
Slide 32: Environmental, Social and Governance
Environmental, Social and Governance ▪ Portfolio produces enough renewable electricity to power 940,000 homes ▪ Recycling of capital enabling more renewable generation capacity to be built out Environmental ▪ Over 1m tonnes of CO2 per annum avoided compared to thermal generation ▪ Co-existence of en
Slide 33: Power Price
Power Price Demand Supply Energy efficiency Gas is the marginal generator: Electric vehicles Demand in China and India 45p/th = £30/MWh Electrification of heat Gas Cost of extraction Absolute level of demand not £40/t = £15/MWh important in the long term Carbon Focus on climate change Generation mix
Slide 34: NAV Sensitivities
NAV Sensitivities Notes: The base case discount rate is a blend of a lower discount rate for fixed cash flows and a higher discount rate for merchant cash flows. The underlying discount rates remain unchanged from 31 December 2018. The blend has reduced from 8.1 per cent to 7.9 per cent as a result
Slide 35: Simple Capital Structure
Simple Capital Structure Asset Level ▪ No debt at asset level in existing portfolio nor intention to have any asset level debt going forward ▪ Revolving Credit Facility (“RCF”) used to acquire new assets Fund Level ▪ Significant value opportunity for the fund: execution advantage without the carry c
Slide 36: Disclaimer
Disclaimer 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 OF TH