Hydrogen Capital Growth plc · FWB:65U
Hydrogen Capital Growth — HydrogenOne Capital Growth — H1 2023 Earnings Presentation
38 slides from Hydrogen Capital Growth's earnings presentation, Sep 20, 2023
Slide 1: HydrogenOne Capital Growth plc H1 2023 Interim Results
HydrogenOne Capital Growth plc H1 2023 Interim Results presentation Investing in clean hydrogen for a climate-positive impact LSE: HGEN 20/9/2023
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation is made, or by reading this document, you agree to be bound by the limitations set out below. The information set out herein may be subject to updating, completion, revision and amendment and such information may change materially. Neither
Slide 3: Contents
Contents • Interim results for the six months ending 30th June 2023 • ESG update • Portfolio update • Appendix: Invested companies update 3
Slide 4: H1 2023 highlights
H1 2023 highlights • NAV increased by 3.5% from 31 December 2022, to £129.7m, with NAV per share increasing to 100.7p; includes 7.1 pence per share negative impact from increased discount rates. £130m 101p • Portfolio companies performing in line with Investment Adviser expectations, against the NAV
Slide 5: Clean hydrogen: summary
Clean hydrogen: summary Feedstock GAS Grid Refining and chemicals Blending clean-up Renewables Electrolysis Storage & distribution Transport ELECTRICITY Off grid • Conversion of renewables to hydrogen • Multiple hydrogen applications to replace fossil Gaussin hydrogen truck • 20 billion tonnes/yr GH
Slide 6: Strong increase in investment in clean hydrogen in 2023
Strong increase in investment in clean hydrogen in 2023 HydrogenOne’s deal flow tracker 2023 key transactions YTD 15,000 30,000 • Thyssenkrupp Nucera IPO • €550m raise / c. €2.5bn valuation 12,500 25,000 H2 2022 H2 2023E H2 Green Steel • NEOM green hydrogen Cumulative amount raised, $m SFC Energy Ze
Slide 7: Financial and operational highlights 2023
Financial and operational highlights 2023 30 June 31 December % change 2023 2022 • Diversified portfolio of hydrogen assets, delivering growth NAV per Ordinary Share 100.70p 97.31p 3.5% for investors across the portfolio NAV £129.7m £125.4m 3.5% • The NAV increase was driven by valuation in private
Slide 8: Growing NAV in H1 2023
Growing NAV in H1 2023 NAV movements H1 2023 (pence per share) NAV (£m) and NAV pence per share, 2021-23 6.53 (0.09) 105.00 104.00 145 100.7p (1.68) 100.0p 102.00 100.00 (1.37) 96.8p 96.9p 97.3p 135 96.5p 94.9p 100.00 £129.7m 95.00 £128.8m £124.8m £125.4m 98.00 £124.3m 125 90.00 Listed -0.16p, Priva
Slide 9: New investment H1
New investment H1 23 £8m capital deployed in the 6 months ended 30 June 2023 Thierbach £1.9m £8.0m £2.9m £1.8m £1.5m Sunfire Total depl oyed HH2E Thierbach CAeS NanoSun Three follow-on investments and one new position in H1 2023 9
Slide 10: HGEN valuation methodology
HGEN valuation methodology Valuations using IPEV guidelines Consistent approach to valuation • Valuations updated for the entire private portfolio on a quarterly basis, reviewed and approved by the AIFM and Board Discounted Cash Flow • The private portfolio is principally valued using either the DCF
Slide 11: Applying a rigorous valuation method and embedding downside protections in investments
Applying a rigorous valuation method and embedding downside protections in investments Portfolio fair value by valuation methodology, 30 Jun 23 Governance and downside protection • 100% of the private portfolio has downside protections 90% such as anti-dilution and liquidation preferences 81% 80% •
Slide 12: Valuation evolution – listed vs. private companies
Valuation evolution – listed vs. private companies The Company’s approach to valuation remains consistent while market has seen strong rise and correction HGEN NAV/share and share price vs listed hydrogen shares (SOLGHYD) Implied EV/Revenue Multiple, 0.0x (2024-2026) 130 7.0 5.9 120 6.0 110 EV/Reven
Slide 13: Contents
Contents • Interim results for the six months ending 30th June 2023 • ESG update • Portfolio update • Appendix: Invested companies update 13
Slide 14: Investing in clean hydrogen for a climate-positive impact
Our alignment Investing in clean hydrogen for a climate-positive impact Effective Our impact Boards Signatory of: Aligned to: Aligned to: Our credentials Screening ESG and due at HGEN diligence Our reporting standards Article 9 - SFDR framework ISSB framework Greenhouse Gas Protocol (draft standards
Slide 15: Initiating 6 month reporting of key ESG metrics
Initiating 6 month reporting of key ESG metrics ESG dashboard H1 2023 GHG emissions H1 2023 £111 million 87.6% 0.1500 GWh 58.27% 592 MWh Deployed in low- EU taxonomy-aligned Energy Consumption Share of non- Potential clean Scope 1 14tCO2e carbon growth portfolio Intensity renewable energy energy cap
Slide 16: Contents
Contents • Interim results for the six months ending 30th June 2023 • ESG update • Portfolio update • Appendix: Invested companies update 16
Slide 17: Unique and diversified portfolio across the hydrogen value chain
HydrogenOne has a unique and diversified portfolio, invested across the hydrogen value chain Growth in private portfolio revenues since investment Where we invest 16 • Revenue-generating equipment businesses Increase in revenues since investment (0x) 14 • Hydrogen production projects 12 • Co-investi
Slide 18: Distinctive and unique hydrogen portfolio
Distinctive and unique hydrogen portfolio Fund holdings (as at 30 Jun 23) Portfolio segmentation Portfolio segmentation by theme by geography Private portfolio NAV £m NAV % Sunfire GmbH 26 20% Elcogen Plc +1.1 21 17% 8% +1.63 4% 15% Strohm Holding B.V. +1.1% 18 14% 27% 9% 27% 1% NanoSUN Limited 13 1
Slide 19: Invested in significant manufacturing capacity and scale
Invested in significant manufacturing capacity and scale NanoSUN’s hydrogen distribution and mobile Gen2Energy, green hydrogen project developer, Norway refuelling equipment, UK • Completed first serial production and delivery of units • Leading green hydrogen project developer, with over 900MW proj
Slide 20: Gen2 Energy update: Norway green hydrogen developer company
Gen2 Energy update: Norway green hydrogen developer company Mosjøen is the ideal location Low OPEX for green H2 projects … • NO4 electricity price zone offers among Europe’s lowest ü prices – electricity equals ~90% of H2 production cost • Low transmission costs Nesbruket 1 – 120 MW • Ample availabi
Slide 21: Sunfire: Germany electrolyser innovator
Sunfire: Germany electrolyser innovator Sunfire’s alkaline electrolyser plant in Solingen, Germany Recent developments • New purchase order for a 100 MW pressurized alkaline electrolyser, with a leading European refinery. Marks a key milestone for Sunfire, supplying one of the world’s largest electr
Slide 22: Strohm: Netherlands low carbon offshore pipeline innovator
Strohm: Netherlands low carbon offshore pipeline innovator World’s first offshore green hydrogen Strohm financial outlook Revenue EBITDA EBIT 2020 2021 2022 2023 2024 2025 • Strong growth in CCS and H2 applications • New expanded facility launched in 2023 • Offshore green hydrogen “HOPE” project, Be
Slide 23: Growing value for investors
Growing value for investors Annual revenue of portfolio companies 10-15% average NAV growth target incl. exits1 • Growth delivery in invested companies Early stage • Follow-on investment at higher valuation Late stage • Target includes exit via IPO or trade sale June 22 - June % of portfolio Target
Slide 24: The portfolio is revenue generating and has produced consistent growth
The portfolio is revenue generating and has produced consistent growth Private portfolio revenue growth 55 50 • The aggregate revenue from private investments c. £52m 45 for 12 months to 30 June 2023 +170% 40 • Increase of 170% from 12m to Q2 2022 Revenue, £m 35 30 25 • Converting strong order books
Slide 25: Summary
Summary Identifying the best investment opportunities H1 2023 highlights • NAV/share increased by 3.5% from 31 December 2022, Active Grow EBITDA Specialist team stewardship and exit >£500m pipeline underpinned by growth in private companies • Private companies revenues +170% last 12 months to £52m •
Slide 26: Contents
Contents • Interim results for the six months ending 30th June 2023 • ESG update • Portfolio update • Appendix: Invested companies update 26
Slide 27: Fund holdings
Fund holdings As at 30 Jun 2023 As at 31 Dec 2022 Private portfolio NAV £m NAV % NAV £m NAV % Sunfire GmbH 26 20% 22 17% Elcogen Plc 21 17% 20 16% Strohm Holding B.V. 18 14% 12 9% NanoSUN Limited 13 10% 12 9% Cranfield Aerospace Solutions 10 8% 6 5% HiiROC Ltd 10 8% 13 10% Bramble Energy Limited 8 7
Slide 28: Sunfire GmbH investment (Supply chain)
Sunfire GmbH investment (Supply chain) Description Growth in revenues since investment German industrial electrolyser producer, of pressure 16 alkaline (AEL) and solid oxide electrolysers (SOEC) Increase in revenues since investment (0x) 14 www.sunfire.de 12 Investment size / date / • £22m / Oct 21
Slide 29: Elcogen Plc
Plc Elcogen Plc Company description Growth in revenues since investment Solid oxide fuel cell and electrolyser manufacturer with presence 16 in Estonia and Finland Increase in revenues since investment (0x) 14 www.elcogen.com Investment size / date / 12 • £20m / May 22 / 17% of NAV % of NAV 10 Co-in
Slide 30: Strohm Holding B.V. investment (Storage & Distribution)
Strohm Holding B.V. investment (Storage & Distribution) Company description Growth in revenues since investment 16 Netherlands-based hydrogen pipeline company Increase in revenues since investment (0x) 14 www.strohm.eu 12 Investment size / date / • £10m / Aug 22 & Dec 22 / 14% of NAV % of NAV 10 Co-
Slide 31: NanoSUN Limited
NanoSUN Limited Company description Growth in revenues since investment UK-based developer of hydrogen distribution and mobile 16 refueling equipment Increase in revenues since investment (0x) 14 www.nanosun.co.uk Investment size / date / 12 • £11m / Dec 21 & Feb 23 / 10% of NAV % of NAV 10 >100x Co
Slide 32: HiiROC Limited investment (Storage & Distribution)
HiiROC Limited investment (Storage & Distribution) Company description Growth in revenues since investment UK-based thermal plasma electrolysis developer, with 16 world-leading (IP-protected) technology for low-cost, zero-emission hydrogen, also enabling flare/waste gas Increase in revenues since in
Slide 33: Cranfield Aerospace Solutions Ltd
Cranfield Aerospace Solutions Ltd Company description Growth in revenues since investment 16 UK-based passenger flight innovator, powering turboprop flight with hydrogen Increase in revenues since investment (0x) 14 www.cranfieldaerospace.com 12 Investment size / date / • £9m / Mar 22 & Apr 23 / 8%
Slide 34: Bramble Energy Limited
Bramble Energy Limited Company description Growth in revenues since investment UK-based fuel cell and portable power solutions company 16 >80x Increase in revenues since investment (0x) 14 www.brambleenergy.com Investment size / date / 12 • £10m / Feb 22 / 7% of NAV % of NAV 10 Co-investors • IP Gro
Slide 35: HH2E & Thierbach investments (Hydrogen Production)
HH2E & Thierbach investments (Hydrogen Production) Description German green hydrogen project developer with a focus on industrial customers. Operator of the Thierbach green hydrogen development Thierbach project, in which HGEN has a direct investment. www.hh2e.de Berlin Investment size / date / • HH
Slide 36: Gen2 Energy
Gen2 Energy Company description Norwegian green hydrogen project developer www.gen2energy.com Oslo Investment size / date / • £3m / Mar 22 / 3% of NAV Holandsvika % of NAV • 500MW – est. 2027 Co-investors • HyCap, Vitol, Hoegh LNG, Knutsen Group • Electrolysis with shipping transport HGEN investment
Slide 37: Developer companies – well established project flow
Developer companies – well established project flow Norway Germany Project 1 • 100MW – 2027 • 60/40 electrolysis/battery • 1GW potential HGEN investment 2024-2026 Lubmin • 100MW – 2026 • 60/40 electrolysis/battery • 1GW potential Holandsvika Berlin HGEN investment 2023-2025 • 500MW – est. 2027 • Ele
Slide 38: Contact us
Contact us HydrogenOne Capital LLP: Dr JJ Traynor, Managing Partner E: JJ.Traynor@hydrogenonecapital.com Richard Hulf, Managing Partner E: Richard.Hulf@hydrogenonecapital.com 5 Margaret St London W1W 8RY www.hydrogenonecapitalgrowthplc.com/ Barclays Bank PLC: Dion Di Miceli E: BarclaysInvestmentComp
HydrogenOne Capital Growth — H1 2023 Earnings Presentation on 6ix