Foresight Environmental Infrastructure Limited GBP · LSE:FGEN
Foresight Environmental Infrastructure Limited GBP — JLEN Environmental Assets Group — H1 2019/20 Earnings Presentation
35 slides from Foresight Environmental Infrastructure Limited GBP's earnings presentation, November 2019
Slide 1: JLEN Environmental Assets Group Limited
JLEN Environmental Assets Group Limited For the period to 30 September 2019
Slide 2: Contents
Contents JLEN Fund Overview Half-year Results Highlights Environmental, Social & Governance Acquisitions in the Period Portfolio Overview Portfolio Performance Portfolio Valuation Leverage Financial Performance Market Snapshot Outlook and Pipeline Summary Appendices
Slide 3: JLEN Fund Overview
JLEN Fund Overview Investment, growth and Predictable income Preservation of capital diversification growth for shareholders over the longer term 30 6.66p 104.7p Environmental infrastructure investments Dividend target for year to 31 March 2020! Net Asset Value per share Technology subsectors Divide
Slide 4: Highlights
Highlights * NAV per share 104.7p (March 2019 * 2 acquisitions completed during the * From 1 July 2019 the investment advisory 104.7p) period for a total consideration of agreement and advisory team for the © Reniallo value oF ES-RGmm (Merein ZOD £19.1m JLEN fund transferred from John Laing Group to
Slide 5: Environmental Statistics HY 2019/20
ENVIRONMENTAL STATISTICS HY 2019/20
Slide 6: Acquisitions in the Period
Acquisitions in the Period Yorkshire Hydropower Limited Acquisition date Location Ownership Capacity (MWs) Commercial operations date Accreditation Operator July 2019 Yorkshire 100% 2 (including 1.2MW capacity battery storage) October 2015 FIT ANF Consulting Limited Warren AD Plant Acquisition date
Slide 7: Portfolio overview as at September 2019
Portfolio overview as at 30 September 2019 Total Capacity: 286.2MW SoMW 69 MW Bilsthorpe— Burton Wold Carscreugh Castle Pill — 1 Dungavel — 1 Ferndale — Hall Farm — 100 Le Placis Vert Plouguernével Wear Point Anaerobic digestion - 35MW Vulcan - 100%, SMW°RHI, FIT. Icknield — 53%, 5MW?, RHI, FIT Egme
Slide 8: Portfolio analysis at September 2019
* Portfolio analysis at 30 September 2019 Portfolio value split by sector 10% 1% 23% Misolar 28% wind M Anaerobic digestion Hi waste & wastewater Wydro Portfolio split by asset concentration 26% 36% Witop3 M4tos Mc to10 14% MWlOther Portfolio value split by remaining asset life (years) 8% WUp to 10
Slide 9: Timeline
Timeline August 19 + Completed the acquisition of Warren Energy anaerobic digestion plant for an initial consideration of £14.8 million subject to additional deferred payments up to £0.8 million July 19 + Completed the acquisition of two operational low head hydropower stations and a battery storage
Slide 10: Diversified portfolio performance
10 JLEN Diversified portfolio performance 165 6 Wind portfolio actual generation (GWh) (HY 2018/19 125) Variation from budget -2% 56 Solar portfolio actual generation (GWh) (HY 2018/19 57) Variation from budget -1% 153 (HY 2018/19 125) Variation from budget +3% @ AD portfolio actual generation (GWh)
Slide 11: Portfolio performance: Wind
i Portfolio performance Wind * Operational availability generally good across the portfolio ¢ Wind resource in line with expectations over the period, with later months better than earlier ones * Generation negative variance due to poor availability on three sites with Senvion as OSM * Availability
Slide 12: Portfolio performance: Anaerobic Digestion
12 Portfolio performance Anaerobic Digestion Generation performance 2.7% above budget Good availability throughout the period Harvest yields expected to be broadly in line with budget Progressing various initiatives to improve feedstock cost resilience * Satellite feedstock storage facilities * Purc
Slide 13: Portfolio performance: Solar
13 JLEN Portfolio performance Solar Generation (GWh) * Solar performance broadly in line with budget HY 2019/20 56 * Solar resource was 3.4% above expectations HY 2018/19 57 Variation from budget -1% * Main cause of variation was DNO activity at Shoals Hook HY Portfolio Energy Generation by Technolo
Slide 14: Portfolio performance: Hydro
14 Portfolio performance Hydro ¢ Assets purchased in July 2019 * Generation for the 6 month period 6.6% higher than budget * Little operational downtime experienced * Battery will commence new trading strategy in 2020 Hydropower Generation (GWh) HY 2019/20 1 HY 2018/19 = Variation from budget +7% HY
Slide 15: Portfolio performance: Waste and Wastewater
Portfolio performance Waste and Wastewater * ELWA waste management * Very strong performance against key contractual ‘diversion from landfill target’ * Other contractual targets also met * Contractual protection for SPV against RDF off-take risks * Tay wastewater * Good operational performance * Flo
Slide 16: Portfolio Valuation
16 Portfolio Valuation 560.0 550.0 540.0 530.0 520.0 510.0 500.0 Key valuation movements for the year to 30 September 2019 219 244 543.6 10.2 O1 Acquisitions and further investments Portfolio valuation 31 March 2019 Distributions Rebased Forecast power prices Economic assumptions Discount rate chang
Slide 17: Portfolio Valuation — Electricity Prices
V7 Portfolio Valuation — electricity Prices Illustrative blended electricity price curve £/MWh 70 60 50 40 2020 2025 2030 2035 2040 September 19 March 19 * Annual real rate of price growth on a constant basis from 1 April 2020 is 0.8% * Fixed price and floor arrangements * 51% of electricity price e
Slide 18: Portfolio Valuation — Key Assumptions
18 Portfolio Valuation — Key Assumptions Discount rate Economic « Proposed reduction in the discount rate used for valuing levered UK solar assets and levered and unlevered wind assets * Taking the above into account the overall WADR of the portfolio was 7.6% at 30 September 2019 (31 March 2019:7.9%
Slide 19: Vulcan Upgrade Project
19 Vulcan Upgrade Project Vulcan Project Specifics Acquisition Date Acquisition Price Plant Description Operational Date Revenue Incentives Feedstock Site Operator August 2017 £15.3m c. 5MWth gas-to-grid Agricultural fed AD plant with a 0.5MWe CHP engine to provide for the site October 2013 c. 80% G
Slide 20: NAV Sensitivity Analysis
20 NAV Sensitivity Analysis Energy yield: evi Electricity Feedstock ee (£0.2m) | £0.2m -8p -6p -4p -2p Op 2p 4p 6p 8p NAV per share
Slide 21: Leverage use at September 2019
21 JLEN Leverage use at 30 September 2019 Technology % Portfolio | Revenue Sources Leverage of as % of GPV Solar 23% Merchant Power & Green Benefits 11% Wind 42% Merchant Power & Green Benefits 42% Anaerobic digestion 24% Merchant Power & Green Benefits 0% Hydro 1% Merchant Power & Green Benefits 37
Slide 22: Financial performance — Summary
22 Financial performance — Summary Portfolio valuation £543.6m £523.6m Cash £9.1m £114m Net Debtors £3.4m £2.0m Revolving credit facility £35.9m £(16.7)m Net assets £520.2m £520.3m Number of shares in issue 497.0 497.0 Net asset value per share (pence per share) 104.7p 104.7p
Slide 23: Financial performance — Group cash flow
23 Financial performance — Group cash flow Six months ended 30 Sep 2019 (unaudited) Cash received from environmental infrastructure investments Administrative expenses (0.8) (0.4) Directors’ fees and expenses (0.1) (0.1) Investment advisory fee (2.6) (2.2) Financing costs (net of interest income) (0
Slide 24: Cost of renewable generation has dropped significantly
• Cost of renewable generation has dropped significantly • • • Source: BloombergNEF •
Slide 25: Bloomberg outlook: renewables 90% of European electricity by 2040
• • • • “By 2040, renewables make up 90% of the electricity mix in Europe with • wind and solar accounting for 80%” Bloomberg New Energy Outlook [prediction], 2019 • • • •
Slide 26: Summary
26 Summary Dividend cover of 1.1x in the period NAV per share 104.7 pence Performance of portfolio satisfactory. Positive contribution from growing anaerobic digestion segment Two acquisitions completed and capital upgrade investments totalling c.£21.5 million Major capital upgrade of c.£8.5 million
Slide 27: Thanks for listening
27 Q&A Thanks for listening
Slide 28: Appendices
28 Appendices
Slide 29: • • • • • • • • • • • • • •
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Slide 30: Foresight track record and scale
35 year £4.0bn 10 offices investment track assets under 237 staff globally record management 71 14 278 investment institutional current professionals funds investments
Slide 31: Environmental, Social & Governance
31 Environmental, Social & Governance Foresight ESG Criteria Good governance is essential for JLEN’s portfolio to achieve its targeted returns. Board positions are held on each asset to promote this as part of active engagement with projects and JLEN is proud of the contributions their assets make t
Slide 32: Total Shareholder Return Since IPO
32 JLEN Total Shareholder Return Since IPO 160 150 140 130 120 110 100 90 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep 2014 2014 «2014 «2014 «2015 ©2015 20152015 2016 «2016 «2016 «2016 «2017 «2017 «2017 «2017 «2018 +2018 +2018 2018 2019 2019 2019 JLEN F
Slide 33: The Fund and Investment Adviser fee terms
• The Fund • • • Investment Adviser • • • Base Fee • Performance Fee • Asset Origination Fee • Investment Adviser Term • • Discount Control Continuation Vote • * "Adjusted Portfolio Value" means the sum of the Fair Market Value of the Investment Portfolio, plus any cash owned by or held by or to the
Slide 34: Investment policy: sector, geography, gearing
• Sector • • Geography • • Operational • Single Asset Limit • • Gearing • ** “Gross Project Value" means in respect of each Project Entity, the Fair Market Value of the Investment Interests in such Project Entity acquired or to be acquired by the Fund as increased by the amount of any financing held
Slide 35: Important Notice
35 Important Notice General This document and the presentation have been prepared by Foresight Group LLP for information purposes only. By being in receipt of this document, you will be deemed to have (a) agreed to all of the following restrictions and made the following undertakings and (b) acknowl
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