Azure Power Global Limited · OTC:AZREF
Azure Power Global — Investor Presentation (April 2020)
37 slides from Azure Power Global's investor presentation, April 2020
Slide 1: Investor Presentation April 2020
7 GW+ Pan India portfolio of solar assets India’s first private grid connected MW solar plant Issued India’s first solar Green Bond Investor Presentation April 2020 0|Copyright © 2020 Azure Power |www.azurepower.com
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This information contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating guidance, op
Slide 3: Executive Summary
Executive Summary 2
Slide 4: Azure Power Overview (AZRE: NYSE)
Azure Power Overview (AZRE: NYSE) A Leading Pan Indian Solar Power Developer Portfolio of 7,115 MWs(1): 1,804 MWs Operational, 5,311 MW Contracted Pipeline(1,2) 6,948 MWs 167MWs Utility-Scale Projects Azure Roof Power •• Founded in 2008, built India’s first private utility-scale solar project in 200
Slide 5: 7,115 MW Committed Portfolio, 1,804 MWs Operational
7,115(1) MW Committed Portfolio, 1,804 MWs Operational ~90% (2) in High Irradiation Zone ~6%(2) in Mid Irradiation Zone Focus on Strong Counterparty Credit Punjab (214 MW) 214 MW Rajasthan (3,675 MW) 475 MW Uttar Pradesh (100 MW) 100 MW 3,200 MW BBB- & above Gujarat (270 MW) Bihar (10 MW) 95% ~95% o
Slide 6: COVID-19 Update: Azure Power As A Safe Haven
COVID-19 Update: Azure Power As A Safe Haven No Material Impacts From COVID-19 Illustrates Quality and Predictability of Assets Strong liquidity position through at least March 31, 2021(1) Superior Access to Capital and Operations, Azure Should Further Differentiate Itself to Competitors Operating A
Slide 7: Visible Historical and Future Growth
Visible Historical and Future Growth Growing Portfolio with Strong Contracts in Place Substantial Revenue Growth to Portfolio Run-Rate(1)(2) 7,800 7,115 6,500 $723(1) 5,115 Revenues (US $ Million) 5,200 MWs 3,900 3,115 900 Committed 2,600 1,804 111 1,300 - $112 $144 $169 Under Construction Operation
Slide 8: Management Commitment to Capital Discipline
Management Commitment to Capital Discipline Capital discipline is the foundation to our success 1 Delivery of projects on time and on budget 2 Enhance returns on invested capital with efficiency gains and cost optimisation 3 Optimize capital structure to lower risk and cost of capital 4 Risk mitigat
Slide 9: Key Highlights of Recent Actions to Increase Shareholder Value
Key Highlights of Recent Actions to Increase Shareholder Value Highlights Present Value of Equity Won 4 GW(1) project with an opportunity to earn equity (No value added for future growth, cost reductions or platform) returns over 20% $2,500 PV of Equity Value (USD Mn) $2,000 We will not issue shares
Slide 10: Recent 4 GW Project Win Is Value Accretive
Recent 4 GW Project Win Is Value Accretive Tariff ~15% Present Value of Equity for 4 GW Win higher than Potential of $1,000 PV of Equity Value similar SECI Opportunity $800 around 6.0x (USD Mn) central grid for 20%+ EV/EBITDA $600 connected equity IRRs $400 auctions we build cost $200 have won $- 10
Slide 11: Historical and Future Strong Growth
Historical and Future Strong Growth MWs Operational Guidance MWs EBITDA, Cash Flow to Equity(2) and Debt 8,000 7,000 Forecast 6,000 5,000 CAGR EBITDA: $700 $575 - $675 4,000 35% CAGR 3,000 61% $600 2,000 1,000 - $500 FY'21(e) FY'22(e) FY'23(e) FY'24(e) FY'25(e) IPO(a) FY'17(a) FY'18(a) FY'19(a) Dec
Slide 12: Contracted 7,115 MW Portfolio: Equity Funding
Contracted 7,115 MW Portfolio: Equity Funding Alternative Sources of Equity Considerations for Equity Needs Could Exceed $600 mn over 5 years Equity is needed over next 5 years for 4 GW pipeline which Internal cash flow generation will be sourced from lowest cost options Asset sales We do not expect
Slide 13: Published First Sustainability Report; Launched Sustainability Website
Published First Sustainability Report; Launched Sustainability Website Highlights Avoided 5.2 mn tons of CO2 equivalents since inception 50% saving last year in water consumption per unit of electricity generated (1) Aim to become water neutral over the coming years Environment Volunteer stu
Slide 14: Corporate Social Responsibility Programmes
Corporate Social Responsibility Programmes Promoting livelihood enhancement by providing skill Donation of modified wheelchair and two wheelers Promoting education by providing smart class in development across 7 sites in Gujarat to the disabled army veterans Government schools across multiple state
Slide 15: Strong Governance and Disclosure Standards
Strong Governance and Disclosure Standards Only Indian Solar Independent Power Producer listed on NYSE Standards reinforced by listing requirements Strong Corporate Governance Home country SGX-ST SEC & NYSE requirements regulatory requirements that also requiring periodic requirements require regula
Slide 16: Experienced Board Backed by Long Term Marquee Shareholders
Experienced Board Backed by Long Term Marquee Shareholders IFC Global Infrastructure Fund Increased stake in Azure Power to c.49.4% through multiple rounds & Made its first investment in company in 2010 and increased stake open market purchase through multiple rounds with current holding of c.24
Slide 17: Industry Overview
Industry Overview 16
Slide 18: Industry and Regulatory Update
Industry and Regulatory Update Industry Update Regulatory Update Tariffs continue to rise – Reflects higher threshold return expectations Positive rulings on Safe Guard Duty (SGD) recovery - The company of disciplined international financial sponsors. Fewer companies that has received positive rulin
Slide 19: The Solar Advantage in India
The Solar Advantage in India Electricity Usage per Capita (MWh) 12.8 US: ~14x > India Azure’s solar plants have high ~100 mn people without direct availability power source Seasonal Energy Curve Summer Monsoon China: ~5x > India 4.3 India-Demand Peak Low 0.9 Solar-Generation Peak Low USA China India
Slide 20: Operating and Financial Metrics
Operating and Financial Metrics 19
Slide 21: 9 Months YTD FY’20 Key Performance Metrics
9 Months YTD FY’20 Key Performance Metrics 1,804 MW Operating 7,115 MW Operating & US$ 0.45 Mn Project US$ 130m Revenue Committed# Cost/MW (DC) 31% increase(1) 54% increase(1) 133% increase (1) 28% reduction(2,3) • 635 MWs Commissioned since Q3 2019 • LOA awaited for 2 GW • DC cost per MW US$ 0.64 m
Slide 22: Review of Q3 FY’20 Results
Review of Q3 FY’20 Results 3Q FY’19 After % Change 3Q FY’19 3Q FY’20 3Q FY’20 Adjustments (in million) Adjustments Adjusted Q3FY’20 vs Comments INR INR US$ US$ US$ Q3FY’19 54% increase in operational MWs partially offset by 2,431 3,047 42.6 1.2 43.8 29% extended monsoon (-9% impact on generation) an
Slide 23: Balance Sheet Highlights
Balance Sheet Highlights As of March 31, 2019 As of December 31, 2019 (in million) (in million) INR INR US$ Cash, Cash Equivalents and Current Investments* 10,545 11,310 158.3 Property, Plant & Equipment, Net 83,445 95,727 1,339.8 Net Debt# 59,007 70,087 980.9 *Does not include restricted cash of US
Slide 24: Reiterating FY’20 Guidance and Providing FY’21 Guidance
Reiterating FY’20 Guidance and Providing FY’21 Guidance FY 2020 FY 2021 No Change to Guidance (1) INR 15,800 – 16,600 million(2) of Revenue for FY’21 Expect to be at the lower end 1Q FY’21 Revenue: INR 3,800 – 3,950 million of the range 2,650 – 2,950 MWs(3) Operating by March 31, 2021 Primary driver
Slide 25: Appendix
Appendix 24
Slide 26: Historical Plant Load Factor (PLF); 4Q FY’20 and 1Q FY’21 Forecasts
Historical Plant Load Factor (PLF); 4Q FY’20 and 1Q FY’21 Forecasts 23.0% 1Q FY’21 22-23% forecast 4Q FY’20 22.0% 21-22% forecast 21.5% 21.0% 20.5% 20.0% 19.4% 19.0% 17.9% 18.0% 16.8% 17.0% 17.7% 16.4% 16.0% 15.0% 1Q 2Q 3Q 4Q FY'19 FY'20 25
Slide 27: DSO by Counterparty
DSO by Counterparty Amounts in US$ million Total Due greater Customer Name Project Name Capacity (MWs) Due 0-90 Due 91-365 DSO outstanding than 365 SECI , NTPC, NVVN 689 11 11 0 - 60 (1) (1) Southern Power Distribution Com of AP Ltd(1) AP-1 50 10 2 6 2 552 Hubli Electricity Supply Company Ltd K-3 40
Slide 28: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Adjusted EBITDA is a non-GAAP financial measure. The Company presents Adjusted EBITDA as a supplemental measure of its performance. This measurement is not recognized in accordance with USGAAP GAAP and should not be viewed as an alternative to USGAAP GAAP measures
Slide 29: Reconciliation of Non-GAAP Measures to Comparable GAAP measures
Reconciliation of Non-GAAP Measures to Comparable GAAP measures Quarter Ended December 31, Nine month Ended December 31, (in million) (in million) 2018 2019 2019 2018 2019 2019 INR INR US$ INR INR US$ Net profit (loss) 165 (1,357) (19.0) (102) (1,943) (27.2) Income tax expense 63 236 3.3 171 407 5.7
Slide 30: Projects Commissioned - Utility
Projects Commissioned - Utility as on 31st Jan’ 20 Commercial Duration PPA Capacity DC Capacity Tariff Project Names Operation Off taker of PPA in Credit Rating(6) (MW) (MW) (INR/kWh) Date(1) Years Operational – Utility Punjab 1 (3) Q4 2009 2 2 17.91 NTPC Vidyut Vyapar Nigam Limited 25 AAA Punjab 2.
Slide 31: Projects Commissioned– Utility and C&I
Projects Commissioned– Utility and C&I as on 31st Jan’ 20 Commercial Duration PPA Capacity DC Capacity Tariff Project Names Operation Off taker of PPA in Credit Ratings5) (MW) (MW) (INR/kWh) Date(1) Years Operational – Utility Bihar1 (4) Q3 2016 10 11 8.39 North & South Bihar Power Distribution Comp
Slide 32: Under Construction & Committed Projects – Utility and C&I
Under Construction & Committed Projects – Utility and C&I as on 31st Jan’ 20 Expected Duration PPA Capacity Tariff Credit Ratings(3) Project Names Commercial Off taker of PPA in (MW) (INR/kWh) Operation Date(1) Years Under Construction Assam 1 Q2 2020 90 3.34 Assam Power Distribution Company 25 B+ T
Slide 33: Project Debt Schedule
Project Debt Schedule As of December 31, 2019 Outstanding Principal Amount (In thousands) Type of Interest Currency Maturity Date(1) Name of Project INR US$ (2) Gujrat 2 9,187,908 128,592 Fixed INR 2024 Andhra Pradesh 1 2,508,312 35,106 Fixed INR 2022 Bihar 1 438,767 6,141 Fixed INR 2022 Gujarat 1 9
Slide 34: Project Debt Schedule
Project Debt Schedule As of September 30, 2019 Outstanding Principal Amount (In thousands) Type of Interest Currency Maturity Date(2) Name of Project INR US$ (5) Uttar Pradesh 3 1,777,800 24,882 Fixed INR 2024 Andhra Pradesh 3 2,179,000 30,497 Fixed INR 2024 Punjab 3.1 and 3.2 1,219,000 17,061 Fixed
Slide 35: Glossary of Select Terms
Glossary of Select Terms Accelerated Depreciation – Accelerated depreciation can be elected at the project level, such that projects that reach COD in the first half of the fiscal year can expense 100% of eligible project costs in year 1, and otherwise can expense 50% of project costs in year 1 and
Slide 36: Contacts
Contacts Investor Contact Media Contact Nathan Judge, CFA Samitla Subba ir@azurepower.com pr@azurepower.com +1 (917) 209-6750 +91-11- 4940 9854 Investor Relations, Marketing, Azure Power Azure Power 35
Slide 37: Thank You
Thank You 36 36
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