Scatec Asa · OSL:SCATC
Scatec Asa — Q2 2021 Earnings Presentation
29 slides from Scatec Asa's earnings presentation, July 2021
Slide 1: Second quarter 2021: Strong growth in project backlog and pipeline
Second quarter 2021 Strong growth in project backlog and pipeline
Slide 2: Disclaimer
Disclaimer The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not rely, act or make assessment on the basis of this presentation or anything inc
Slide 3: Agenda
Agenda • Highlights and project update Raymond Carlsen, CEO • Financial review Mikkel Tørud, CFO • Market & outlook Raymond Carlsen, CEO 3
Slide 4: Q2'21 Strong growth in project backlog and pipeline
Q2’21 Strong growth in project backlog and pipeline Power production (GWh) • Power production of 860 (406) GWh and EBITDA¹ of 2.1x NOK 601 (417) million 860 • 2.6 GW added to project backlog and pipeline • First large-scale hybrid (540 MW solar + storage) project awarded in South Africa • Entering t
Slide 5: Another 203 MW in commercial operation in Ukraine – 336 MW total
Another 203 MW in commercial operation in Ukraine – 336 MW total Progressovka, 148 MW Chigirin, 55 MW • Annual production: 184 GWh • Annual production: 64 GWh • 70,000 tonnes GHG emissions to be avoided • 25,000 tonnes GHG emissions to be avoided • 76,000 households to be powered • 28,000 households
Slide 6: The 117 MW Guanizuil project in commercial operation
The 117 MW Guanizuil project in commercial operation • Scatec’s first power plant in Argentina and the second largest solar plant in the country • The plant is owned and operated 50% by Scatec and 50% by Equinor • Annual production: 305 GWh • GHG emissions avoided: 98,000 tonnes/year • Green energy
Slide 7: ESG ambitions
ESG ambitions Key focus areas 32 ESG targets for 2021 Lifecycle management shared in our 2020 Strategy for lifecycle management of equipment Sustainability report • Status on 1H’21 performance available in the Q2 report Climate target Climate roadmap to reach 2050 targets Responsible supply chain ES
Slide 8: EU Taxonomy: Low GHG emissions for Scatec's operating hydropower assets
EU Taxonomy: Low GHG emissions for Scatec’s operating hydropower assets • Lifecycle GHG emissions* from reservoirs estimated by independent third party, International Hydropower Association (IHA) • Threshold for lifecycle emissions in the Taxonomy: 100 gCO2/kWh • Lifecycle emissions estimates for Sc
Slide 9: Financial review
Financial review Mikkel Tørud, CFO 9
Slide 10: Strong growth in revenues and EBITDA
Strong growth in revenues and EBITDA Proportionate financials Quarterly (NOK million) Last 12 months (NOK million) 4,956 Cash Flow to Equity EBITDA Revenues 3,165 1,101 925 1,780 601 1,630 417 808 683 158 177 Q2 20 Q2 21 Q2 20 Q2 21 EBITDA margin 45% 55% 33% 56% CF to equity in Q1’21 includes NOK 39
Slide 11: Strong increase in power production
Power Production Strong increase in power production Comments Quarterly (NOK million) Last 12 months (NOK million) • New hydro assets with revenues of CF to equity EBITDA Revenues 2,751 NOK 504 million and EBITDA of NOK 292 million 2,063 • EBITDA decreased by NOK 44 million from Q1, mainly explained
Slide 12: Stable financial performance (Services)
Services Stable financial performance Comments Quarterly (NOK million) Last 12 months (NOK million) • Stable contract portfolio 230 • Underlying EBITDA broadly in line CF to equity EBITDA Revenues 222 with last year • EBITDA in Q2 last year included a one-off catch up of NOK 14 million. 73 68 89 72
Slide 13: Strong project development focus
Development & Construction Strong project development focus Comments Quarterly (NOK million) Last 12 months (NOK million) • Revenues decreased with lower construction activity CF to equity EBITDA Revenues 3,141 • Construction started on the 150 MW 302 245 Sukkur project in Pakistan 383 • Continued h
Slide 14: Update on the Ukraine portfolio
Update on the Ukraine portfolio • Commercial operation achieved for the whole asset portfolio – 336 MW • Loan agreements to be adjusted based on revised cash flows - in principle agreement in place with lenders for Kamianka and Boguslav - implementation in 2H 2021 • In compliance with all loan agree
Slide 15: A solid financial position
A solid financial position Consolidated financial position (NOK million) As of 31.12.2020 As of 30.06.2021 • Group free cash of NOK 2,361 million 33,213 33,213 • Available undrawn credit facilities NOK 1,588 million 5,751 9,681 • Group* book equity of NOK 11,061 million 26,663 26,663 9,074 2,480 9,4
Slide 16: Q2'21 movement of the Group's free cash
Q2’21 movement of the Group’s free cash NOK million 19 -57 -37 -86 206 -101 -173 -143 -185 2,918 2,361 End Q1 21 Distributions Cash flow to Cash flow to Cash flow Project equity Project Dividend Net cash Working End Q2 21 from operating equity D&C equity Services to equity Development distribution c
Slide 17: Staying selective when investing
Staying selective when investing • Focus on capital discipline • Power Production: Avg. Equity IRR on investments: 12-16% • 30-year cash flows • Average across technologies, regions & currencies • Development & Construction gross margin: 10-12% • D&C revenues expected to average 50-70% of project ca
Slide 18: Scatec - 2021 Guidance
Scatec - 2021 Guidance Power Production (GWh) Development & FY2021 Services FY2021 Corporate Proportionate production volume* Construction Q3 2021: FY 2021: End of Q2’21: Revenues EBITDA 970-1,040 3,600 - 3,750 Remaining, not NOK 260 million NOK -110 million booked, construction Up from 430 Up from
Slide 19: Market & outlook
Market & outlook Raymond Carlsen, CEO 19
Slide 20: The world to be powered by renewables in 2050
BNEF’s Green scenario The world to be powered by renewables in 2050 4.6x 89% Fossil fuels from USD 840 bn Increase in global Power generation 68% to 13% Annual renewables electricity demand covered by of final energy investments² (from 2019) renewables consumption¹ Source: Bloomberg New Energy Outlo
Slide 21: IEA report: Hydropower - a critical contributor to the green energy transition
IEA report: Hydropower - a critical contributor to the green energy transition • Additional 477 GW of hydropower capacity needs to be built globally by 2030 to achieve IEA’s net zero scenario • 75% of capacity from large-scale projects in Asia and Africa • Until 2030, USD 127 billion – or ¼ of inves
Slide 22: Technology integration strengthens renewables & expands market potential
Technology integration strengthens renewables & expands market potential Firm Renewable Power Hybridising PV and hydro Release Power to X PV and/or wind with PV installations mounted Redeployable PV systems Competitive renewable battery storage to provide on floating supports on to replace diesel an
Slide 23: Project backlog & pipeline of more than 14 GW
Project backlog & pipeline of more than 14 GW Pipeline Europe & Central/ South Asia 1,307 88 20 % MW 3% 49 % Africa & Southeast Asia 21 % Middle East 7% 4,230 418 Latin America 6,714 MW 1,608 Solar Hybrid solutions MW 2,118 Wind Release 692 MW Hydro All figures are as of Q2 2021 reporting date. 23
Slide 24: A breakthrough for our large scale hybrid solutions
Solar+storage hybrid project in South Africa The project: A breakthrough for our large scale • Government requirement: Deliver 150 MW hybrid solutions capacity between 5:00am and 21:30pm – all year • Scatec’s solution: A 540 MW solar plant + 225MW/1140MWh Storage facility • The Kenhardt project will
Slide 25: Entering India with 900 MW
Entering India with 900 MW – a key growth market for renewables • Scatec has partnered with ACME, a leading solar developer, to realise a 900 MW solar plant in India • Pursuing long-term partnerships and upcoming tenders/auctions • India is targeting 450 GW of new renewable energy capacity by 2030:
Slide 26: Scatec moves into offshore wind in Southeast Asia
Scatec moves into offshore wind in Southeast Asia • Vietnam and the Philippines our key focus • Attractive offshore wind conditions • Aggressive long term renewable energy growth plans • Target to secure 4 GW of development rights • The Philippines • 750 MW of exclusive development rights signed wit
Slide 27: Realising 15 GW by end of 2025
Realising 15 GW by end of 2025 • Delivering on 2021 targets • Construction activity ramping up 2H’21 • Positive market and pipeline development • Broad technology platform • Solid basis for 15 GW growth plan 27
Slide 28: Scatec - improving our future
Scate improving our future
Slide 29: Our asset portfolio
Our asset portfolio Plants in operation Capacity Economic Under construction Capacity Economic MW interest MW interest Theun Hinboun, Laos 525 20% Sukkur, Pakistan 150 75% Magat, Philippines 388 50% Torex Gold, Mexico 9 100% Benban, Egypt 380 51% Total 159 76% Upington, South Africa 258 46% Bujagali