Alternus Energy Group Plc. · OTC:ALTNF

Alternus Energy — Q1 2022 Earnings Presentation

41 slides from Alternus Energy's earnings presentation, May 18, 2022

  1. Slide 1: Q1 '22 Presentation

    Q1 ‘22 PRESENTATION 18 May 2022 18 May 2022

  2. Slide 2: Caution Forward Looking Statements

    Q1 2022 Financial Presentation 21 Caution Forward Looking Statements Some of the statements contained in this document, including information incorporated by reference, discuss future expectations, plans or prospects, or state other forward looking information Words such as “intends”, “believes”, "e

  3. Slide 3: Agenda and Today's Presenters

    AGENDA AND TODAYS PRESENTERS Q1 2022 Financial Presentation 3 Vincent Browne Joseph Duey Agenda 1 Quarterly highlights 2 Business update 3 Financial results 4 Summary CHAIRMAN & CEO CFO 5 Q&A 3

  4. Slide 4: Q1'22 Highlights – Strong Growth in All Key Metrics

    Q1’22 HIGHLIGHTS – STRONG GROWTH IN ALL KEY METRICS Q1 2022 Financial Presentation 41 +178% €26.1 million ARR  Received suitable terms and (Q1’21 ~€9.4 million ARR) completed mandates for substantial debt facilities with a Tier 1 European bank to support our growth plans for 2022 and 2023 – active

  5. Slide 5: Portfolio Additions of 25MW in Q1 2022

    PORTFOLIO ADDITIONS OF 25MW IN Q1 2022 Q1 2022 Financial Presentation 5 Rotterdam Airport - Reached COD on schedule in February Acquired portfolio of 11MW of parks in operation in Poland SIZE LOCATION OFFTAKE SIZE PORTFOLIO OFFTAKE AGREEMENTS AGREEMENTS 13.6 MW Rotterdam Airport FiT & PPA 11.0 MW 11

  6. Slide 6: Key Additions Made to Both BOD and Executive Management

    KEY ADDITIONS MADE TO BOTH BOD AND EXECUTIVE MANAGEMENT Q1 2022 Financial Presentation 61 David Farrell – Chief Commercial Officer  Joined executive management team at Alternus Energy in Q1 2022  Over 20 years’ experience across capital markets, incorporating project finance, infrastructure and re

  7. Slide 7: Portfolio Benefitting from Increased Energy Rates

    PORTFOLIO BENEFITTING FROM INCREASED ENERGY RATES Q1 2022 Financial Presentation 716 Confluence of EU climate policies, energy security concerns, gas price inflation and longer-term trends toward renewables has dramatically shifted the energy rate expectation in the last 9 months  Using our analysi

  8. Slide 8: Agenda

    AGENDA Q1 2022 Financial Presentation 1 Quarterly highlights 2 Business update 3 Financial results 4 Summary 5 Q&A

  9. Slide 9: Alternus Energy Group Plc – A Fully Integrated IPP

    ALTERNUS ENERGY GROUP PLC – A FULLY INTEGRATED IPP Q1 2022 Financial Presentation 9 Listed June 2021 Shares issued 26,232,276 We build, own & operate Recent price NOK 25.00 ‘utility scale’ solar parks P r o d u c i n g C o n t r a c t e d P a r k s P a r k s across Europe 1) Includes c. EUR 2.2m fro

  10. Slide 10: Straight Forward Business Model Delivering Predictable Recurring Revenues

    STRAIGHT FORWARD BUSINESS MODEL THAT DELIVERS PREDICTABLE Q1 2022 Financial Presentation 10 LONG TERM ANNUAL RECURRING REVENUES (ARR’s)  Sell the clean energy generated by our solar parks to national power grids…  Under investment grade offtake contracts - Power Purchase Agreements with corporates

  11. Slide 11: Highly Predictable and Stable Cash from Operations

    HIGHLY PREDICTABLE AND STABLE CASH FROM OPERATIONS Q1 2022 Financial Presentation 117 UNDERPIN PROJECT VALUATION – 35+ YEARS USEFUL LIFE ‘Market Value’ of solar parks is measured by discounting cash flows of future income streams EUR ~350m Expected Annual cash flows for a total life 123MW project po

  12. Slide 12: Strong Contract Coverage Delivers High Leverage Capacity

    STRONG CONTRACT COVERAGE DELIVERS HIGH LEVERAGE CAPACITY…. Q1 2022 Financial Presentation 127 ALLOWS FOR FLEXIBLE DEBT OPTIONS… Expected Annual cash flows for a EUR ~116m EUR ~360m 123MW project portfolio in Poland. Senior debt total life (EURm) principal operational 12.0 (incl interest) cash genera

  13. Slide 13: Alternus Operates Across All Segments of the Value Chain

    ALTERNUS OPERATES ACROSS ALL SEGMENTS OF THE VALUE CHAIN Q1 2022 Financial Presentation 13 - LOCKS IN MORE VALUE PROJECT DEVELOPMENT (“Project Rights”) INSTALLATOIN PHASE (“EPC”) OPERATION PHASE (“O&M”) Early Mid Late Construction & Commissioning Early operations Long-term Development Development De

  14. Slide 14: Greater Benefit to Equity from Earlier in Cycle Stage Entry

    GREATER BENEFIT TO EQUITY FROM ‘EARLIER IN CYCLE’ STAGE ENTRY Q1 2022 Financial Presentation 14 Cost savings achieved in buying assets earlier in cycle stage, with incremental differences reflected as equity returns EV/EBITDA project cost at various stages in project cycle Acquired at: COD 6x 12-15x

  15. Slide 15: Reinvestment of In-house EPC Margins Supports Self-Funded Growth

    REINVESTMENT OF INHOUSE INSTALLATION (EPC) MARGINS Q1 2022 Financial Presentation 15 SUPPORTS “SELF-FUNDED” GROWTH Typical Alternus solar park Capex components and funding sources  Alternus expects to achieve a gross margin of approximately Alternus’ 10% on its EPC activities in line ~10% with mark

  16. Slide 16: A Substantial Backlog Has Been Built Over the Last Year

    A SUBSTANTIAL BACKLOG HAS BEEN BUILT OVER THE LAST YEAR Q1 2022 Financial Presentation 168 Own development portfolio has …further growth expected through …with diversification across all grown substantially over the last closing of contracted + options assets stages of value chain year (MW)… at pre-

  17. Slide 17: Development Backlog Represents Substantial Value for Shareholders

    DEVELOPMENT BACKLOG REPRESENTS SUBSTANTIAL VALUE FOR SHAREHOLDERS Q1 2022 Financial Presentation 177 Significant backlog (MW)… …expected to generate significant equity value when maturing through the various project stages Several projects will be abandoned during the development phase 755 EUR ~160m

  18. Slide 18: Contracted Assets Are Binding – Significant Shareholder Value Embedded

    CONTRACTED ASSETS ARE BINDING - SIGNIFICANT SHAREHOLDER VALUE EMBEDDED Q1 2022 Financial Presentation 187 Contracted assets (MW)… …at pre-agreed pricing, significantly benefit from recent energy rate increases to achieve 100% debt financing within normal bank debt sizing and terms + significant equi

  19. Slide 19: High Confidence in Completing Exclusive Option Assets

    HIGH CONFIDENCE IN COMPLETING EXCLUSIVE OPTION ASSETS Q1 2022 Financial Presentation 197 Exclusive options assets are at SPA … prices agreed and locked – subject to confirmatory due drafting stages (MW)… diligence and final SPA documents 353 EUR 510m ~50% to be built by Alternus EPC arm Unisun <70%

  20. Slide 20: Circa EUR 400M of Shareholder Equity Upside Potential

    CIRCA EUR 400M OF SHAREHOLDER EQUITY UPSIDE POTENTIAL Q1 2022 Financial Presentation 207 Current market value not fully pricing in development equity value or contracted assets EUR 462m (1,724 MW) EUR 162m Current operating portfolio (168 MW) (353 MW) EUR 110m EUR 207m EUR 190m (448 MW) EUR 147m EUR

  21. Slide 21: Backlog and Pipeline Supports Strong Growth Over the Next Years

    BACKLOG AND PIPELINE SUPPORTS STRONG GROWTH OVER THE NEXT YEARS Q1 2022 Financial Presentation 21  Indicates EUR ~160M ARR’s at ~3 543 EOY 2023 based on current price curves from leading expert firms ~1 200 Owned backlog + contracted assets and ~2 343 current exclusive options  Targeting >50% of i

  22. Slide 22: Profile of Owned Development Assets

    PROFILE OF OWNED DEVELOPMENT ASSETS Q1 2022 Financial Presentation 22 Pre-RTB Project Stage is dictated by Early / Mid based on risk assessment: 22

  23. Slide 23: Agenda

    AGENDA Q1 2022 Financial Presentation 1 Quarterly highlights 2 Business update 3 Financial results 4 Summary 5 Q&A

  24. Slide 24: Alternus Snapshot

    ALTERNUS SNAPSHOT Q1 2022 Financial Presentation 24 3 1 Vertically Integrated Solar Independent Power Producer (IPP) Current Owned Portfolio 580  Targeted focus on fragmented mid-sized utility market (Europe / USA)  Highly diversified portfolio of solar PV assets  Listed on Euronext Growth exchan

  25. Slide 25: Assets in Operation Increased Nearly 4 Times YoY

    ASSETS IN OPERATION HAS INCREASED BY NEARLY 3 TIMES YoY Q1 2022 Financial Presentation 258 Strong growth in assets in operation (MW)… …with portfolio benefitting from significant geographical diversification +273% 168 Germany 143 Netherlands 1% 130 15% Italy 6% 168 65 Poland 53% MW 45 25% Romania 30

  26. Slide 26: Over Six Times Increase in Annual Revenues in Last Year

    OVER SIX TIMES INCREASE IN ANNUAL REVENUES IN LAST YEAR Q1 2022 Financial Presentation 26 16 Portfolio benefitting from increased European energy rates  Exceeded 2021 business plan 30 45 65 130 143 25 168 for both for MWp operating and MW MW MW MW MW MW MW ARR’s 26.1  Increased energy prices EUR m

  27. Slide 27: Consolidated Statement of Comprehensive Income

    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Q1 2022 Financial Presentation 278 Profit and loss statement for the Group (EURm) Revenue by Region Q1’22 (EUR 000’s) Netherlands Germany Q1’22 Q4’21 Q1’21 5% 0% Revenue 6.4 7.5 .7 Italy 11% Cost of goods sold 2.2 2.0 .1 Gross profit 4.2 5.5 .6 Poland 2

  28. Slide 28: Power Production Increased by 60 Times YoY in Q1'22

    POWER PRODUCTION INCREASED by 60 times YOY in Q1’22 Q1 2022 Financial Presentation 28 11 Power production Power Production Q1’22 Revenue Q1’22 EBITDA Q1’22 (GWh) (EURm) (EURm) • 30.2M Kwh, increase due to the various acquisitions in 6x 8x 21x 2021. Revenue • 6.5M, increase due to the various acquisi

  29. Slide 29: Strong Development in Annual Recurring Revenues

    STRONG DEVELOPMENT IN ANNUAL RECURRING REVENUES Q1 2022 Financial Presentation 298 5 CONSECUTIVE QUARTERS WITH STRONG GROWTH IN ARR +178% 26.1 24.1 Operating Portfolio additions • The portfolio has grown from 19.9 form 30 MW to 154 MW YoY 16.3 Rising energy rates 9.4 • ARR further benefitting from i

  30. Slide 30: Strong Balance Sheet Provides Solid Basis for Future Growth

    13 30 STRONG BALANCE SHEET PROVIDES SOLID BASIS FOR FUTURE GROWTH Q1 2022 Financial Presentation As of 31 March 2022 Consolidated financial position (EUR million) Consolidated Balance Sheet Q1’22 Q4’21 Q1’21 Investment in Energy March 31, 2021 31 March 2022 179.4 171.9 71.4 properties Cash & Cash eq

  31. Slide 31: Net Interest Bearing Debt at Modest ~71% LTV

    13 31 NET INTEREST BEARING DEBT CURRANTLY (NIBD) AT MODEST ~71% LTV Q1 2022 Financial Presentation As at 31 March 2022 EUR 207m EUR 28m Embedded equity value attributable to equity EUR 147m EUR 179m EUR 60m EUR 23m EUR 37m Assets NIBD Value attribuable to equity Investment in energy assets - as per

  32. Slide 32: Strong Cash Balance - Cash Development During Q1 2022

    STRONG CASH BALANCE - CASH DEVELOPMENT DURING Q1 2022 Q1 2022 Financial Presentation 32 Operating activities Investing activity Financing activity • Cash flow from operations of • Portfolio of 11MW of parks in • Bond tap issue of EUR 10.0m (5.1M) for movement in trade Poland acquired for EUR 11m • 3

  33. Slide 33: Agenda

    AGENDA Q1 2022 Financial Presentation 1 Quarterly highlights 2 Business update 3 Financial results 4 Summary 5 Q&A

  34. Slide 34: Excellent Period on Period Results

    EXCELLENT PERIOD ON PERIOD RESULTS Q1 2022 Financial Presentation 34 1 +178% €26.1 million ARR (Q1’21 ~€9.4 million ARR)  Compelling debt metrics across the portfolio set to unlock substantial equity value  Expansion of executive +273% 168 MW of assets in operation (Q1’21 – 45MW of assets in opera

  35. Slide 35: Agenda

    AGENDA Q1 2022 Financial Presentation 1 Quarterly highlights 2 Business update 3 Financial results 4 Summary 5 Q&A

  36. Slide 36: Appendix

    Q1 2022 Financial Presentation APPENDIX

  37. Slide 37: European Solar PV Capacity Set to Grow ~100% Between 2021 and 2025

    EUROPEAN SOLAR PV CAPACITY IS SET TO GROW ~100% BETWEEN 2021 AND 2025 Q1 2022 Financial Presentation 37 Installed solar capacity in Europe (GW) Commentary Small scale Utility scale  European solar power capacity has +12% 200 increased rapidly in the last decade, growing 10% p.a. since 2012 180 162

  38. Slide 38: Cost and Delivery Outlook

    COST AND DELIVERY OUTLOOK Q1 2022 Financial Presentation 38 1 SHORT TERM SPIKES DUE TO SUPPLY CHAIN DISRUPTION AND MATERIALS INFLATION Utility Scale PV capex benchmark, end of Year [Projections from 2021 using 2010 as base period] 2021 Us$/W (DC) 4.23 3.49 2.27 2.05 1.87 1.81 1.41 1.27 2.39 1.07 1 1

  39. Slide 39: Solis Bondco Portfolio – Offtaker Overview

    SOLIS BONDCO PORTFOLIO – OFFTAKER OVERVIEW Q1 2022 Financial Presentation 39 Italy Romania Netherlands Poland • Italian government backed Feed-in-Tariff • Romanian government issued Green • SDE + subsidy scheme managed by the • Corporate PPA with Gorażdże Cement of (FiT) program processed by the GSE

  40. Slide 40: Historical Figures – Reported Financials (Consolidated Income Statement)

    HISTORICAL FIGURES – REPORTED FINANCIALS (CONSOLIDATED INCOME STATEMENT) Q1 2022 Financial Presentation 407 Units Q1’21 Q2’21 Q3’21 Q4’21 FY’21 Q1’22 Revenue EURm .7 5.2 7.1 7.5 20.5 6.4 Cost of goods sold EURm .1 1.4 1.5 2.0 5.0 2.2 Gross profit EURm .6 3.8 5.6 5.5 15.5 4.2 General and administrati

  41. Slide 41: Historical Figures – Reported Financials (Consolidated Balance Sheet)

    HISTORICAL FIGURES – REPORTED FINANCIALS (CONSOLIDATED BALANCE SHEET) Q1 2022 Financial Presentation 417 Units Q1’21 Q2’21 Q3’21 Q4’21 Q1’22 Investment in energy assets EURm 71.4 106.9 148.8 171.9 179.4 Other current assets EURm 3.3 7.9 13.5 17.2 21.4 Cash & cash Equivalents EURm 94.4 58.7 19.7 23.6

Alternus Energy Group — Q1 2022 Earnings Presentation on 6ix