Etrion Corp. · OTC:ETRXF
Etrion — Pareto Securities Emerging Markets Day 2015
36 slides from Etrion's conference presentation, Dec 2, 2015
Slide 1: Pareto Securities Emerging Markets Day
Pareto Securities Emerging Markets Day December 2, 2015 1
Slide 2: Disclaimer
DISCLAIMER These materials and the information contained herein are being presented by Etrion Corporation (the “Company”). By attending a meeting where these materials are presented, or by reading them, you agree to be bound by the following limitations and notifications. These materials are strictl
Slide 3: Corporate Overview
CORPORATE OVERVIEW ( etrion
Slide 4: The Lundin Group
THE LUNDIN GROUP Etrion is part of the Lundin Group of Companies, 10 publicly-traded companies in the mining and energy sectors The companies range from exploration stage to advanced development and production, operating in over 30 countries worldwide with a combined market capitalization of app
Slide 5: Etrion Corporation
ETRION CORPORATION Company Overview Financial Summary • Independent power producer (IPP) that develops, builds, owns and operates ground-based solar photovoltaic (PV) power generation plants Recent Share Price (TSX/OMX: ETX) C$0.30 / SEK 1.98 in three key markets (Italy, Chile and Japan) Shares Outs
Slide 6: Etrion at a Glance
ETRION AT A GLANCE • 60 MW of installed capacity in Italy operational since 2011; 70 MW in Chile and 9 MW in Japan operational since Operational 2015 Excellence • Power plants consistently perform above plan with 99.7% availability in 2014 • Utility-scale solar projects built using top-tier module p
Slide 7: Utility-Scale Solar Power Generation
UTILITY-SCALE SOLAR POWER GENERATION Goal: Build, own and operate solar electricity plants at lowest cost per kWh Borgo Piave, Lazio, Italy – 3.5 MW Etrion Lazio Atacama, Chile – 70 MW Salvador Montalto, Lazio, Italy – 24 MW Cassiopea and 8.8 MW Centauro Competitive Advantages of Solar Power Easy to
Slide 8: Downstream Player in the Solar Energy Market
DOWNSTREAM PLAYER IN THE SOLAR ENERGY MARKET PARTS SERVICES RAW PROJECT ASSET (MODULES, (ENGINEERING, DEVELOPMENT MATERIALS FINANCE MANAGEMENT INVERTERS) CONSTRUCTION) • Solar facilities are developed in new markets Raw materials (e.g., Solar cells are then Third parties polysilicon) assembled
Slide 9: Business Model – Key Drivers
BUSINESS MODEL – KEY DRIVERS Key drivers Rationale STABLE REVENUES 1. Long-term contracts Premium price for solar electricity generation under long-term contracts (i.e., FiT or PPA) REVENUE 2. Solar irradiation Annual solar irradiation varies less than 10% per year Economic growth increasing p
Slide 10: Asset Overview
ASSET OVERVIEW 10
Slide 11: Etrion's Global Platform
ETRION’S GLOBAL PLATFORM Geographic diversification across Italy, Chile and Japan Revenue diversification across FiT, PPAs and spot (merchant) pricing Etrion is constantly evaluating new opportunities in high-growth regions 11
Slide 12: Italy: Operating Assets
ITALY: OPERATING ASSETS ( etrion
Slide 13: Italian Power Market
ITALIAN POWER MARKET Overview Italy is a leading producer of electricity from renewable energy sources, and it is one of the largest producers of solar energy in the world The solar PV sector has historically been the dominant renewable energy technology due to the Italian solar Feed-in-Tariff (
Slide 14: Italian Operating Assets
ITALIAN OPERATING ASSETS Project Sites Capacity Technology Modules Inverters EPC/O&M (MW) Contractor Cassiopea 1 24.0 Single axis SunPower SMA SunPower Helios ITA-3 2 10.0 Single axis Yingli Bonfiglioli ABB Centauro 1 8.8 Single axis SunPower SMA SunPower Helios ITA 7 6.4 Single axis Solon Santerno
Slide 15: Successful Refinancing of Italian Portfolio
SUCCESSFUL REFINANCING OF ITALIAN PORTFOLIO Refinancing closed December 1, 2015 Key highlights of the transaction Combination of Project Finance and Project Bond to optimize capital structure Bond : € 35M SCOR Infrastructure Loans II Loan: € 177 M Natixis, BNP Paribas CIB and Craval Tenor: FIT m
Slide 16: Improving Italian Long-Term Free Cash Flows
IMPROVING ITALIAN LONG-TERM FREE CASH FLOWS Expected annual cash distributions from 60 MW Italian solar portfolio (EUR million) 7.9 + 0.1 + 0.2 + 3.1 + 1.1 + 0.4 7.9 + 0.6 4.5 4.8 3.3 3.7 2.6 2.6 IRAP REDUCTION 2014 RUN RATE IRES REDUCTION IMU REDUCTION REFINANCING ROBIN HOOD TAX O&M RENEGOTIATION (
Slide 17: Chile: Operating Asset and Pipeline
CHILE: OPERATING ASSET AND PIPELINE 17
Slide 18: Chilean Power Market
CHILEAN POWER MARKET Overview Chile – Installed Capacity by Source 2014 In 2014, Chile had 19 GW of total installed power capacity, of 2% which large hydro and natural gas made up more than 50% 15% 23% Renewables accounted for approximately 8% of installed capacity, 4% with solar power at less t
Slide 19: Chilean Assets
CHILEAN ASSETS Capacity Contract Project Region Sites Ownership Status MW Regime SIC Merchant + Salvador 1 70 70% Operational (Central) PPA Aguas Blancas SING Merchant + Shovel-ready 1 32 100% 2A (Northern) PPA pipeline Aguas Blancas SING Merchant + Shovel-ready 1 24 100% 2B (Northern) PPA pipeline
Slide 20: Japan: Operating / Under Construction Assets and Backlog
JAPAN: OPERATING / UNDER CONSTRUCTION ASSETS AND BACKLOG 20
Slide 21: Japanese Power Market
JAPANESE POWER MARKET Overview Japan – Installed Capacity by Source 2014 11% Japan is one of the largest solar PV markets in the world today with 17% 25.9 GW of installed capacity in 2014 0% Relatively low-risk jurisdiction with an attractive solar FiT 20% program . 236 GW The Japanese governm
Slide 22: Japan – Projects Update
JAPAN — PROJECTS UPDATE ( etrion
Slide 23: Japanese Assets – Operational – Under Construction
JAPANESE ASSETS – OPERATIONAL – UNDER CONSTRUCTION Mito Shizukuishi Status Operational Under Construction Sites 5 1 Region Central (Ibaraki) North (Iwate) Capacity 9.3 MW 24.7 MW Ownership 87% 87% Technology Fixed-tilt Fixed-tilt Shizukuishi, 24.7 MW Module Canadian Solar Canadian Solar Inverters Hi
Slide 24: Mito – 9.3 MW Operational as of Q3-2015
MITO -- 9.3 MW OPERATIONAL as of Q3-2015 Mito site 1 Mito site 2 Mito site 3 Mito site 4 Mito site 5 24
Slide 25: Shizukuishi – 24.7 MW Under Construction
SHIZUKUISHI -- 24.7 MW UNDER CONSTRUCTION View of fix-tilt structures General view of plant View of fix-tilt structures and DC cable conduits October Q4-2014 Q3-2015 Q2-2016 August 2016 October 2016 Notice to Proceed Land preparation Piers and racking Delivery and Plant completion Plant delivery. (N
Slide 26: Backlog - Japanese Greenfield Project
BACKLOG - JAPANESE GREENFIELD PROJECT 1 Layout Size 13.2 MWp Region Hokuriku Revenue FIT: ¥32/kWh Stage of Development Advanced Irradiation 1,100 kWh/kWp ETX share 85%-100% Expected: NTP / COD Q1-2016 / Q2-2017 Developer Etrion Project Development Status METI FiT secured Issue Status Developer Etrio
Slide 27: Backlog - Japanese Brownfield Project 1
BACKLOG - JAPANESE BROWNFIELD PROJECT 1 Layout Size 52.5 MWp Region Kyushu Revenue FIT: ¥36/kWh Stage of Development Advanced Irradiation 1,140 kWh/kWp ETX share 100% Expected: NTP / COD Q2-2016 / Q1-2018 Project Development Status Developer Local real estate developer Issue Status Developer Co-deve
Slide 28: Backlog - Japanese Brownfield Project 2
BACKLOG - JAPANESE BROWNFIELD PROJECT 2 Layout Size 9.5 MWp Region Tohoku Revenue FIT: ¥36/kWh Site 4 Stage of Development Advanced Irradiation 1,110 kWh/kWp ETX share 55%-70% Site 3 Site 1&2 Expected NTP / COD Q1-2016 / Q1-2017 Project Development Status Developer Publicly-listed real estate compan
Slide 29: Summary
SUMMARY ( etrion
Slide 30: Overall Project Portfolio – Potential Growth
OVERALL PROJECT PORTFOLIO – POTENTIAL GROWTH (4) (5) 117 MW net operational 22 MW net under construction and fully funded 332 MW net pipeline 4x growth in installed capacity (3) (2) (2) (1) Notes: (1) Etrion’s initial 70% net capacity in 70 MW project. (2) Etrion’s 87% net capacity. (3) Etri
Slide 31: Conclusion
CONCLUSION Attractive returns in downstream solar power generation sector Global Platform Well positioned to expand within Europe, Asia and the Americas Systems in place to effectively manage operations across multiple jurisdictions Proven ability to secure high-return projects and attract s
Slide 32: Appendix
APPENDIX ( etrion
Slide 33: Etrion Equity Research Coverage
ETRION EQUITY RESEARCH COVERAGE Target Target Broker Location Date of Last Report Price Price Recommendation (CAD) (SEK) 1 Carnegie Oslo November 13, 2015 $0.46 3.0 Buy 2 Cormark Securities Toronto November 13, 2015 $0.45 2.9 Market Perform 3 National Bank Financial Toronto November 12, 2015 $0.35 2
Slide 34: Strong Management Team
STRONG MANAGEMENT TEAM Marco A. Northland (Chief Executive Officer and Director) - has extensive experience leading growth companies. Prior to co-founding Etrion in 2008, he was responsible for establishing and overseeing European operations for SunPower Corporation, a leading U.S. solar energy comp
Slide 35: Experienced Non-Executive Board Members
EXPERIENCED NON-EXECUTIVE BOARD MEMBERS Ian H. Lundin (Chairman) - co-leads the investment initiatives of the Lundin Group and serves on the board of several Lundin companies, specifically, Chairman of Lundin Petroleum AB. In 1984, he joined the Lundin Group as drilling manager for International Pet
Slide 36: Contact Details
Contact Details Etrion Corporation Rue de la Rôtisserie 1 1204 Geneva Switzerland Phone: +41 22 715 20 90 Email: info@etrion.com Website: www.etrion.com 37