Jsw Energy Limited · NSE:JSWENERGY
Jsw Energy — Investor Presentation (August 2022)
61 slides from Jsw Energy's investor presentation, August 2022
Slide 1: Accelerating for a Better Tomorrow
Accelerating for a Better Tomorrow Corporate Presentation August 2022
Slide 2: Forward Looking and Cautionary Statement
Forward Looking and Cautionary Statement This presentation has been prepared by JSW Energy Limited (the “Company”) based upon information available in the public domain solely for information purposes without regard to any specific objectives, financial situations or informational needs of any parti
Slide 3: JSW Group – Overview
JSW Energy Steel Power producer with 9.1 GW generation portfolio, India’s leading integrated steel producer 20 GW Target by 2030 (85% share of renewable up from 65% Installed crude steel capacity of 28.5mtpa, growing to 38.5mtpa currently) Market Cap: ~US$ 20.0 Bn Market Cap: ~US$ 6.7 Bn J
Slide 4: JSW Energy: Our Vision
JSW Energy : Our Vision Bringing positive transformation to every life we touch 4
Slide 5: Agenda
Agenda JSW Energy at a Glance Why JSW Energy? Sustainability Risk Mitigation Annexures 5
Slide 6: JSW Energy – Company Overview: At a Glance
JSW Energy –Company Overview At a Glance The company is well placed to achieve its capacity growth target of 10 GW much ahead of the stated timeline of FY25 and being future-ready with increased share of renewables. 9.1 GW 4.8 GW 1.8 GW* 2.5 GW Diversified Asset Portfolio Installed Capacity Acquisit
Slide 7: Recent Developments
Recent Developments Acquisition of 100% of Mytrah Energy RE Assets Commissioned 225 MW Solar Power Plant in Apr’22 JSW Neo Energy* has executed a binding Commenced operations at 225 MW solar power agreement with Mytrah Energy India Private plant at Vijayanagar in Apr’22. The plant is installed L
Slide 8: JSW Energy - Asset Overview – 9.1GW
JSW Energy - Asset Overview – 9.1GW Pre-Acquisition (7.3GW) Post-Acquisition (9.1 GW) Pre-Acquisition Post-Acquisition 65% Operational: Thermal – 3,158 MW 57% Thermal – 3,158 MW By Green and Thermal Grey Portfolio Renewable Total 43% Hydro – 1,391 MW Hydro – 1,391 MW 35% increase in RE capacity: Ope
Slide 9: JSW Energy Portfolio
JSW Energy Portfolio Green – 4,159 MW (57%) Grey -3,158 MW (43%) Barmer: 1,080MW 4.8 GW 2.25 GW 0.3 GW Baspa II: 300MW & Karcham Wangtoo: 1,091MW 4 Installed Under- In Pipeline Configuration: 8 X 135MW 34% Renewable construction 100% Configuration: 3x100MW (Baspa II) ; 4x272.75MW (Karcham) Uni
Slide 10: Projects Under Construction: Renewable led growth
Projects Under Construction : Renewable led growth 2.25 GW Renewable Projects Portfolio Capacity Scheduled Target Plant Segment Location PPA/Offtake (MW) Commissioning Commissioning SECI - IX 810 Wind Tamil Nadu 25-Year; SECI Dec-23 progressively from SECI - X 450 Wind Tamil Nadu 25-Year; SECI Jul-2
Slide 11: Progress Update on Renewable Projects (1/2)
Progress Update on Renewable Projects (1/2) 1,260 MW SECI-IX & X Wind, Tamil Nadu WTG Erection work in progress Nacelle Erection work in progress WTG Erection work in progress 11
Slide 12: Progress Update on Renewable Projects (2/2)
Progress Update on Renewable Projects (2/2) 240 MW Kutehr HEP, Himachal Pradesh Diverted river stream in the barrage successfully Completed ~75% (16.0 km) tunneling work (up from ~70% in Q4 FY22) well ahead of timelines 12
Slide 13: Healthy Operations and Financials (4.8 GW Operational)
Healthy Operations and Financials (4.8 GW Operational) Business model resilient with steady cashflow generation despite several sectoral headwinds 85% ~95% Capacity under LT PPA1 EBITDA contribution from LT Net Generation (BUs) Total Income3 (₹ Crore) 21.3 20.8 8,560 8,736 20.0 21BUs ₹ 2,395 Cr 7,16
Slide 14: Robust balance sheet to support renewable-led growth
Robust balance sheet to support renewable-led growth Large balance sheet headroom & strong cashflow available to pursue growth 1.75x 0.46x Net Debt/EBITDA Net Debt/Equity $ Bn4 Net Worth Net Debt 2.5 2.2 2.1 7.87 % 45 2.0 1.5 1.5 1.9 Wt. average cost of debt Receivable Days 1.5 1.3 1.1 1.0 1.0 0.8 0
Slide 15: Why JSW Energy?
Why JSW Energy ?.. Committed to reaching Net Zero emissions by 2050
Slide 16: Compelling Investment Story
Compelling Investment Story 1 At the forefront of Energy Transition Scaling to 20 GW (85% renewable) by 2030 Being future-ready : New Energy Solutions including energy storage, green hydrogen, Sustainable growth ammonia and its derivatives Resilient Business, Consistent Performance and Strong fi
Slide 17: Compelling Investment Story
Compelling Investment Story 1 At the forefront of Energy Transition Scaling to 20 GW (85% renewable) by 2030 Being future-ready : New Energy Solutions including energy storage, green hydrogen, Sustainable growth ammonia and its derivatives Resilient Business, Consistent Performance and Strong fi
Slide 18: Twin Engines of Growth for significant value creation
Twin Engines of Growth for significant value creation Being future-ready :: New Being future-ready New Energy Energy Scaling to 20 GW by 2030 via Renewables Solutions Solutions 20.0 Energy Storage: Hydro Pumped Storage (PSP) and Battery Storage Hydro PSP: Targeting 10 GW. Resources tied-up for 5 G
Slide 19: Being Future Ready: Hydro Pumped Storage Projects (PSP)
Being Future Ready : Hydro Pumped Storage Projects (PSP) India’s Market Potential JSW’s Plans In Advanced Stages for 5 GW PSP Only 3.3 GWh operational out of 96 GWh potential • Signed MoUs with Govt. of Maharashtra for 1.5 GW, Govt. of Telangana for 1.5 GW, Govt. of Chhattisgarh for 1 GW for • Hyd
Slide 20: Being Future Ready: Green Hydrogen Potential
Being Future Ready : Green Hydrogen Potential Non- fossil fuel based Advantage India energy capacity target of 500GW by 2030 Reduce carbon Significant Hydrogen demand Huge RE potential Low Tariffs emission by 1bn tonnes by 2030 Current demand ~6 MMT expected Existing RE capacity of RE tariffs in Ind
Slide 21: Being Future Ready: Green Hydrogen
Being Future Ready : Green Hydrogen India’s Market Potential JSW’s Plans Significant H2 demand H2 • India - 2nd largest hydrogen demand base in the world To tap significant clean energy market opportunity in India and become a front-runner in a future hydrogen economy • H2 demand expected to grow
Slide 22: Being Future Ready: Energy Products & Services - Value Unlocking
Being Future Ready : Energy Products & Services - Value Unlocking All India Peak Demand Pattern (2021)1 Varying power demand requirements and rise of utility scale renewable projects is leading to innovative approaches that encourage pairing solar/wind with storage technologies to Morning offer “rou
Slide 23: Compelling Investment Story
Compelling Investment Story 1 At the forefront of Energy Transition Scaling to 20 GW (85% renewable) by 2030 Being future-ready : New Energy Solutions including energy storage, green hydrogen, Sustainable growth ammonia and its derivatives Resilient Business, Consistent Performance and Strong fi
Slide 24: Proven project execution and operational excellence
Proven project execution and operational excellence… Prudent and consistent capital allocation strategy for growth over a 25 year history One of the lowest project execution cost in the industry Business model resilient despite several sectoral headwinds over the last decade Sound operating efficien
Slide 25: Compelling Investment Story
Compelling Investment Story 1 At the forefront of Energy Transition Scaling to 20 GW (85% renewable) by 2030 Being future-ready : New Energy Solutions including energy storage, green hydrogen, Sustainable growth ammonia and its derivatives Resilient Business, Consistent Performance and Strong fi
Slide 26: Steady Operations and Robust Financials
Steady Operations and Robust Financials Consistent asset performance Low Trade Receivables Net Generation (BUs) Total Income1 (₹ Crore) Consolidated Trade Receivables2 (₹ Crore ) 1,902 21.3 20.8 8,560 8,736 1,648 20.0 7,160 1,314 3,115 5.9 Jun 30, 2021 Mar 31, 2022 Jun 30, 2022 Receivable FY20 FY21
Slide 27: Best-in class balance sheet & cash flows to support renewable-led growth
Best-in class balance sheet & cash flows to support renewable-led growth Large balance sheet headroom to pursue growth opportunities Healthy internal accruals to support growth Strong credit metrics : Operational Portfolio (4.8 GW): Steady operations and robust financial: Track record of strong ye
Slide 28: Sustainability at JSW Energy
Sustainability at JSW Energy
Slide 29: Sustainability: Framework and Policies
Sustainability: Framework and Policies 17 Focus Areas with 2030 Targets from 2020 as Base Year Governance & Oversight by Sustainability Committee Climate Change: Renewable Power: Biodiversity: Committed to being carbon Enhance the renewable power to No Net Loss for Biodiversity Mr. Sunil Goyal 2/3rd
Slide 30: Sustainability: Targets and Strategy
Sustainability: Targets and Strategy FY20 FY30 SD Targets Actuals Targets Improvement Strategic Initiatives and Approach Increased share of renewable energy for deep decarbonization GHG Emissions Process efficiency improvements Climate Change 0.76 0.304 60% tCO2e/ MWh Replacement of condense
Slide 31: Sustainability: Q1 FY23 Performance
Sustainability: Q1 FY23 Performance Key Highlights Performance • Increased share of renewable energy for deep decarbonisation Ash Utilisation (%) Climate • Generation commenced at Solar project at Vijayanagar Change • Installation in progress for Wind Projects at Tuticorin 100% 100% 100% • Continuou
Slide 32: Advantage JSW: Superior ESG Profile
Advantage JSW: Superior ESG Profile Board & Governance Air Emissions Water & Waste Management % Board Independent CO2 Internsity (t CO2e/MWh) Specific Fresh Water Consumption 0.85 (m3/MWh) 63 0.79 0.68 60 50 50 50 50 0.47 3.2 2.5 2.2 1.1 JSW Peer 2 Peer 1 Peer 4 Peer 3 Peer 6 Peer 1 JSW Energy Peer
Slide 33: Sustainability: Initiatives and Disclosures
Sustainability: Initiatives and Disclosures Hydro- Sholtu Ratnagiri Collaborative effort of employees Plantation drive carried near the at JSW Hydro and Staff of Forest vicinity of the facility wherein 200 department –Plantation of mango saplings were planted. different variety of pine saplings
Slide 34: Sustainability: Empowering Our Communities
Sustainability: Empowering Our Communities Sports Promotion & Development Community Development & Support Organized a state-level boxing Barmer: Solar powered lights have been championship in collaboration with Kinnaur installed in 12 villages. 38 tons of fodder Boxing Association in Himachal Pr
Slide 35: Continuing our Health & Safety Excellence Journey
Continuing our Health & Safety Excellence Journey All Figures are for Q1 FY23 Awards & Recognitions Zero severe injuries/fatalities 77% of contractors covered by JSW CARES audit. 5 Star rating achieved by 7 contractors & 4 Star rating achieved by 2 contractors in a stringent Internal Safety Assessme
Slide 36: Strong Board Oversight and Leadership
Strong Board Oversight and Leadership Mr. Prashant Jain Mr. Pritesh Vinay Mr. Rajeev Sharma Mr. Sajjan Jindal Joint Managing Director Director (Finance) Independent Director Chairman & Managing & CEO Director Mr. Munesh Ms. Rupa Devi Mr. Sunil Goyal Mr. Desh Deepak Khanna Singh Independent Director
Slide 37: Risk Mitigation
Risk Mitigation
Slide 38: Adequately addressing key risks and concerns (1/2)
Adequately addressing key risks and concerns (1/2) Key Risks/Concerns Favourable Policy Support and Market Interventions Mitigation Strategy by JSW Energy Well established central agencies (SECI, NTPC) for managing PPAs Existing portfolio: 85 % PPA signed which forms about 95% of Discoms/offta
Slide 39: Adequately addressing key risks and concerns (2/2)
Adequately addressing key risks and concerns (2/2) Key Risks/Concerns Favourable Policy Support and Market Interventions Mitigation Strategy by JSW Energy Hydro plants under ‘Must-run status’ with no scheduling risk Must-run status for renewable; Rule notified to provide regulatory support ~98
Slide 40: JSW Energy: Key Highlights
JSW Energy : Key Highlights Superior project execution skills: Projects set-up in lowest cost & time Proven Execution Differentiated business strategy for growth to 20 GW, entirely by Renewable Excellence Foraying in New Energy Platforms: Green Hydrogen, Energy Storage, Energy Products & Servi
Slide 41: Investor Relations Contact
Investor Relations Contact: ir.jswenergy@jsw.in ESG Data Profile: Link 41
Slide 42: Annexures
Annexures
Slide 43: Broad Corporate Structure: Existing
Broad Corporate Structure : Existing Ratnagiri – 1,200 MW Vijayanagar – 860 MW Hydro Entities JSW Energy Limited Nandyal – 18 MW Solar – 10 MW Solar/Wind Entities Total – 2,088 MW JSW Hydro Energy Limited JSW Energy (Barmer) Limited Jaigad Power Transco JSW Power Trading Co. (1,391 MW) JSW Future En
Slide 44: Broad Corporate Structure: Post re-organisation
Broad Corporate Structure : Post re-organisation Ratnagiri – 1,200 MW Vijayanagar – 860 MW Hydro Entities JSW Energy Limited Nandyal – 18 MW Solar/Wind Entities Total – 2,088 MW JSW Neo Energy JSW Energy (Barmer) Limited Jaigad Power Transco JSW Power Trading Co. (1080 MW) Limited* Limited 3,859 MW
Slide 45: Re-organisation of Green and Grey Business
Re-organisation of Green and Grey Business To facilitate growth and unlock value for the shareholders, the renewable energy business will be housed under ‘JSW Neo Energy Limited’, a wholly owned subsidiary of the Company, while the thermal business will continue to be housed in the Company The follo
Slide 46: JSW Neo Energy – Green Energy Vehicle of JSW Energy
JSW Neo Energy – Green Energy Vehicle of JSW Energy Hydro Entities JSW Energy Limited Solar/Wind Entities JSW Neo Energy * 3,859 MW ( 2,233 MW under construction) JSW Hydro Energy JSW Renewable Energy Renewable Portfolio of JSW Renew Energy JSW Renew Energy Two JSW Renewable Energy Limited (1,391 MW
Slide 47: JSW Neo Growth Framework
JSW Neo Growth Framework Value Accretive Business Implementation Execution Efficiency Model De-risking Prudent selection of growth opportunities Life cycle approach Group’s project execution excellence • Bidding based on P90 generation assumption • Land acquisition, De- scoped project • Fast executi
Slide 48: Value Accretive Business Model
1 Value Accretive Business Model Conservative assumptions for business model Prudent selection of growth opportunities to target a niche segment of market offering healthy returns – Mid teen IRRs High quality offtakers - Captive PPAs with JSW Group companies (strong credit ratings) at arm’s length p
Slide 49: Life-cycle Approach towards Renewable (1/2)
2 Life-cycle Approach towards Renewable (1/2) Project Construction and Land Acquisition Power Evacuation • De-scoping of EPC packages to have competitive edge • Strategic selection of ISTS substations for connectivity with high capacity margins to facilitate future • Synergies with group businesses
Slide 50: Life-cycle Approach towards Renewable (2/2)
2 Life-cycle Approach towards Renewable (2/2) Quality Supplier & Vendors O&M Control • Robust selection process • Dedicated team for quality • Skilled in-house O&M team through competitive route; assurance Award of packages to best-in- • Continuous implementation of class / Tier-I vendors only • Sta
Slide 51: Implementation De-risking
2 Implementation De-risking Long Term PPA ensuring steady cashflow Typical timelines for PPA signing & Tariff adoptions PPA signing – 90 days from LoA issuance Tariff Adoption – 120 days from the Effective date of the PPA JSW approach: Proactive approach to get the PPA/PSA executed and tariff
Slide 52: DNA: Group's project execution excellence
3 DNA: Group’s project execution excellence Achieved best in the industry project commissioning timeline for Kutehr project completion expected well before solar projects scheduled timelines Commenced operations at 225 MW solar power plant at Vijayanagar in Apr’22. The plant is installed on approx
Slide 53: Growth Framework leading to industry-leading returns
Growth Framework leading to industry-leading returns Single digit to lower Mid-teen High-teen teen IRR% IRR % Returns Realized Equity Pre-Bid Project Execution JSW Energy Potential Upside Realized IRRs Preparation Target Returns Levers Post COD Returns Current market returns Bidding with No Turn
Slide 54: Mytrah Energy
Mytrah Energy
Slide 55: Acquisition of 100% of Mytrah Energy RE Assets
Acquisition of 100% of Mytrah Energy RE Assets o JSW Neo Energy* has executed a binding agreement o Expect mid-teen Equity IRR– with focused interventions with Mytrah Energy India Private Limited (MEIPL) for o JSW to drive capital and operational efficiencies. Major acquisition of it’s 18 SPVs housi
Slide 56: Acquisition Rationale (1/3)
Acquisition Rationale (1/3) Bolt-On Offers a fillip to JSW Energy’s renewable-led growth objectives and with platform Capacity capacity enhanced to 9.1 GW, supports achievement of the near-term target of 10 Growth GW much ahead of the envisaged timeline of FY25. Accelerated A greener portfolio with
Slide 57: Acquisition Rationale (2/3)
Acquisition Rationale (2/3) Achieving 10GW capacity target before 2025 : ahead of timelines 20.0 Operational: Thermal – 3,158 MW Wind – 1,331 MW Hydro - 1391 MW 10.0 1.8 9.1 0.3 Solar - 657 MW 2.2 4.6 4.8 Under-Construction: Wind – 1,993 MW Hydro - 240 MW FY25e FY30e FY20 construction Mytrah Current
Slide 58: Acquisition Rationale (3/3)
Acquisition Rationale (3/3) Pre-Acquisition Post-Acquisition Faster capacity growth, reducing Execution Risk: attractive 65% 57% on Build vs Buy By Green and Thermal Grey Portfolio Renewable 43% 35% ` 22%, 1.6GW 18%, 1.6GW Operational Hydro 7%, 0.7GW By Stage of 31% 72% Under- 3%, 0.2GW 65% 25% cons
Slide 59: Mytrah RE Portfolio Overview
Mytrah RE Portfolio Overview Geographical Spread of Mytrah Portfolio Mytrah Portfolio Overview Map for illustrative purposes, showing project locations 59
Slide 60: Asset Optimisation Plan and JSW Energy Advantage
Asset Optimisation Plan and JSW Energy Advantage Significant EBITDA Significant improvement in EBITDA with active intervention and asset optimization plan over the improvement next 12-24 months through capex intervention Portfolio is operating below P90 performance due to various controllable operat
Slide 61: Transaction Consideration – Attractive Valuation
Transaction Consideration – Attractive Valuation Particulars Amount in ₹ Cr Enterprise Value excluding Net Working Capital (EV) (A) * 11,934 Net Working Capital ** (B) 1,403 Enterprise Value including Net Working Capital (A-B) 10,531 Normalized EBITDA # ~1,650 Normalized EV / EBITDA* ~6.4x * Net of