Azure Power Global Limited · OTC:AZREF

Azure Power Global — Q2 FY2020 Earnings Presentation

33 slides from Azure Power Global's earnings presentation, Nov 15, 2019

  1. Slide 1: Fiscal Second Quarter 2020 Earnings Presentation

    3 GW+ Pan India portfolio of solar assets in 24 States India’s first private grid connected MW solar plant India’s first distributed rooftop solar project over one megawatt Issued India’s first solar Green Bond Fiscal Second Quarter 2020 Ended September 30, 2019 Earnings Presentation November 15, 20

  2. 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

  3. Slide 3: Agenda

    Agenda Company Update Updates on Management Initiatives To Create Shareholder Value Industry Update Fiscal Second Quarter 2020 Financial Results Financial Forecasts and Liquidity Update Reiterating FY 2020 Revenue and Refining MW Operating Guidance 3|Copyright © 2019 Azure Power |www.azurepower.com

  4. Slide 4: 3,370 MW Committed Portfolio With 83% in High Radiation Zone

    3,370(1) MW Committed Portfolio With 83% of Portfolio in High Radiation Zone ~83% (2) in High Radiation Zone ~14%(2) in Mid Radiation Zone Focus on Strong Counterparty Credit Punjab (214 MW) 214 MW Rajasthan (1,745 MW) 475 MW Uttar Pradesh (100 MW) 100 MW 1,270 MW BBB- & above Gujarat (270 MW) Bihar

  5. Slide 5: 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

  6. Slide 6: Delivery of Current Pipeline On Time and On Budget

    Delivery of Current Pipeline On Time and On Budget 1 189 MW(1) Commissioned in Q2 FY20 Rajasthan 5 Maharashtra 3 Azure Roof Power Projects 50 MWs 130 MWs 9 MWs PPA Duration: 25 Years PPA Duration: 25 Years PPA Duration: 25 Years Tariff: 2.48 INR/kWh (~US 3.6¢/kWh)(2) Tariff:2.72 INR/kWh (~US 3.9¢/kW

  7. Slide 7: Delivery of Current Pipeline On Time and On Budget

    Delivery of Current Pipeline On Time and On Budget 1 117 MWs Projects Under-Construction Fencing work Rooftop project under construction Assam 1|90 MW Azure Roof Power Projects |27 MW Tariff: 3.34 INR/kWh (US 4.7¢ / kWh) Tariff: 4.50 - 6.19 INR/kWh (US 6.5 – 9.0¢ / kWh) Expected COD : Q1 FY21 Expect

  8. Slide 8: Enhance Returns on Invested Capital with Efficiency Gains and Cost Optimisation

    Enhance Returns on Invested Capital with Efficiency Gains and Cost Optimisation 2 Ongoing review of efficiency and costs. Have found meaningful opportunities Identified meaningful future capital cost savings Opportunities to reduce cost of capital Wider deployment of more efficient cleaning technolo

  9. Slide 9: Optimize Capital Structure to Lower Risk and Cost of Capital

    Optimize Capital Structure to Lower Risk and Cost of Capital 3 $75 million Private Placement of Equity, $350 million Green Bond Issuance Ready Access to Capital Diversified Capital Base and Investor Group Equity Raise Highlights Green Bond Highlights US$75 million of equity, or ~6.49 million shares,

  10. Slide 10: Risk mitigated approach to new projects that must meet threshold returns

    Risk mitigated approach to new projects that must meet threshold returns 4 Exited 350 MWs of Contracts That Did Not Meet Minimum Thresholds Focused on value creation; all project must be value enhancing Exited 350 MWs through allowable clauses in PPAs to ensure no reputational and relationship risk

  11. Slide 11: If Returns on Future Growth do not Meet Thresholds, Will Explore Giving Back Capital

    If Returns on Future Growth do not Meet Thresholds, Will Explore Giving Back Capital 5 Current Market Dynamics Support Returns Above Thresholds Significant Demand for Solar (1) Solar is the Lowest Cost Source of Electricity (3) Gov’t 100GW Solar Target 100 CAGR: 37% US Cents / kWh 3.7 3.9 33 4 Oppor

  12. Slide 12: Industry and Regulatory Update

    Industry and Regulatory Update Industry Update Basic Custom Duty (BCD) on Solar Rising tariff caps - Ceiling tariff increased by SECI for recent ISTS tender from INR 2.65/ kWh to INR 2.78/ kWh MNRE has proposed a basic custom duty (BCD) ranging from 10% in first year up to 30% in the third year on i

  13. Slide 13: Financial Forecasts and Review

    Financial Forecasts and Review 13|Copyright © 2019 Azure Power |www.azurepower.com

  14. Slide 14: 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) 3,900 3,370 $358(4) 900 2,815 Revenues (US $ Million) 2,600 Committed 1,798 117 Under Construction MWs 1,300 $161 $144 $112 Operating - $44 $61 Operational Und

  15. Slide 15: 1H FY20 Key Performance Metrics

    1H’ FY20 Key Performance Metrics 1,798 MW Operating 2,815 MW Operating US$ 0.46 Mn Project US$88.3m Revenue & Contracted Cost/MW (DC) 34% increase(1) 77% increase(1) 45% increase(1) 25% reduction(1)(2) • 189 MWs Commissioned • vs DC cost per MW US$ 0.61 mn prior • INR 6,235.9 million revenue for • 3

  16. Slide 16: Azure Power Delivered 28% Revenue Growth in Q2 FY20

    Azure Power Delivered 28 % Revenue Growth in Q2 FY’20 % Change Quarter Ended September 30, Q2FY’20 vs Commentary (in million) Q2FY’19 2018 2019 2019 INR INR US$ MWs Operating increased 77% 28% Average tariff (INR/kWh) lower by 40% Revenue 2,226 2,847 40.3 PLF of 16.8%, up from 16.4% Extended monsoon

  17. Slide 17: Balance Sheet Highlights

    Balance Sheet Highlights As at March 31, 2019 As at September 30, 2019 (in million) (in million) INR INR US$ Cash, Cash Equivalents and Current Investments* 10,545 7,463 105.6 Property, Plant & Equipment, Net 83,445 94,246 1,334.2 Net Debt# 59,007 72,703** 1,029.4** *Does not include Restricted cash

  18. Slide 18: Strong EBITDA, FFO and NAV Growth

    Strong EBITDA, FFO and NAV Growth EBITDA, FFO(1), and Net Debt Forecasts NAV/Share of Contracted 2,815 MW Portfolio (no value added for future growth, cost reductions or platform) $ million $ / Share EBITDA: $350 $300 - $330 $35 EBITDA: $300 $260 - $285 $30 $250 EBITDA: $25 $190 - $205 NAV/Share $20

  19. Slide 19: Contracted 2,815 MW Portfolio: Operational, Capex, Cost per Watt Outlook

    Contracted 2,815 MW Portfolio: Operational, Capex, Cost per Watt Outlook 3,000 2,815 MWs Operational 2,500 1,800 - 1,825 MWs 2,000 Operational FY'20 FY'21 (US$ millions) Cap Ex $350 - $400 $450 - $500 1,500 $/watt 1,000 Cost per Watt Operating FY’20 – FY’22 DC before SGD/BCD $0.40 - $0.45 AC before

  20. Slide 20: Contracted 2,815 MW Portfolio: Liquidity and Funding

    Contracted 2,815 MW Portfolio: Liquidity and Funding US$ million 700 Current Cash Cash Available for Under Construction 600 and Committed Projects Equity Raised (1) US$ million 500 As of Sept 30, 2019 Cash and Current Investments $ 106 900 MWs Short Term Restricted Cash 311 400 Contracted Total Cash

  21. Slide 21: FY20 Guidance

    FY’20 Guidance 1,800 – 1,825 MWs Operating INR 12,770 – 13,350 million(1) by March 31, 2020 of Revenue for FY’20 _________________________ 1) US$ 181-189 Mn (at September 30, 2019 exchange rate- INR70.64 to US$1) 21|Copyright © 2019 Azure Power |www.azurepower.com

  22. Slide 22: Appendix

    Appendix 22|Copyright © 2019 Azure Power |www.azurepower.com

  23. Slide 23: Historical Plant Load Factor (PLF)

    Historical Plant Load Factor (PLF) 22.0% 21.5% 21.0% 20.5% 20.0% 19.4% 19.0% 18.0% 17.9% 16.8% 17.0% 16.4% 16.0% 15.0% 1Q 2Q 3Q 4Q FY'19 FY'20 23|Copyright © 2019 Azure Power |www.azurepower.com

  24. Slide 24: DSO by Counterparty

    DSO by Counterparty Amounts in US$ million Total Due Customer Name Project Name Capacity (MWs) Due 91-365 Due greater than 365 DSO outstanding 0-90 SECI , NTPC, NVVN 689 11.2 11.2 0.0 - 60 Southern Power Distribution Com of AP AP-1 50 8.6 2.9 5.8 0.0 422 Ltd Hubli Electricity Supply Company Ltd K-3

  25. Slide 25: 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

  26. Slide 26: Reconciliation of Non-GAAP Measures to Comparable GAAP measures

    Reconciliation of Non-GAAP Measures to Comparable GAAP measures Quarter Ended September 30, Six month Ended September 30, (in million) (in million) 2018 2019 2019 2018 2019 2019 INR INR US$ INR INR US$ Net loss (298) (756) (10.7) (268) (586) (8.3) Income tax expense 14 27 0.4 109 171 2.4 Interest ex

  27. Slide 27: Projects Commissioned - Utility

    Projects Commissioned - Utility As on September 30, 2019 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 Pun

  28. Slide 28: Projects Commissioned – Utility and C&I

    Projects Commissioned– Utility and C&I As on September 30, 2019 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 North & South Bihar Power Distribution Bihar1 (4) Q3 2016 10 11 8.3

  29. Slide 29: Under Construction Projects – Utility and C&I

    Under Construction Projects –Utility and C&I As on September 30, 2019 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+ Total Un

  30. Slide 30: Project Debt Schedule

    Project Debt Schedule As of September 30, 2019 Outstanding Principal Amount (In thousands) Type of Interest Currency Maturity Date(1) Name of Project INR US$ (2) Gujarat 2 4,674,908 66,179 Floating US$ 2019 Andhra Pradesh 1 2,508,312 35,508 Fixed INR 2022 Bihar 1 438,767 6,211 Fixed INR 2022 Gujarat

  31. Slide 31: 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 1,453,322 20,574 Floating INR 2033 Andhra Pradesh 3 2,087,313 29,549 Floating INR 2034 Punjab 3.1 and 3.2 1,398,416 19,796

  32. Slide 32: 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 year can expense 100% of eligible project costs in year 1, and otherwise can expense 50% of project costs in year 1 and the rem

  33. Slide 33: Affordable Solar Power for Generations

    Affordable Solar Power for Generations Excellence | Honesty | Social Responsibility | Entrepreneurship 33|Copyright © 2019 Azure Power |www.azurepower.com

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