Greencoat Renewables Plc · EURONEXT:GRP
Greencoat Renewables — H1 2019 Earnings Presentation
35 slides from Greencoat Renewables's earnings presentation, 2019
Slide 1: Greencoat Renewables PLC 2019 Interim Results
Greencoat Renewables PLC 2019 Interim Results STRICTLY CONFIDENTIAL
Slide 2: Disclaimer
Disclaimer This Presentation (the “Presentation”) has been prepared and issued by Greencoat Renewables PLC (the “Company” or “Greencoat Renewables”). While this Presentation has been prepared in good faith, the information contained in it has not been independently verified and does not purport to b
Slide 3: Investment Manager – Key Personnel
Investment Manager – Key Personnel Bertrand Paul Gautier O’Donnell • 26+ years operational, investment and • 16+ years investment experience, finance experience, of which of which 12+ in renewables 9 exclusively renewables • 11 years in the Irish energy sector • Member of Greencoat Capital Investmen
Slide 4: Delivering Sustainable Returns – Investment Summary
Delivering Sustainable Returns INVESTMENT SUMMARY TRACK 6.03c 411MW(1) PIPELINE REGULATION RECORD High-quality Irish Strong Irish pipeline, Strong Irish Greencoat Capital Euro denominated, portfolio. Potential underlined by regulatory regime is a leading progressive dividend for further REFIT2 build
Slide 5: Results Summary for Six Months to June 30th 2019
Results Summary for Six Months to June 30th 2019 555.9GWh Power generation 5% below budget, due primarily to higher than budgeted curtailment Power generation €27.1m1 Strong cash generation Net cash generation €538.2m Net Asset Value at 30 June 2019 103.5 cent per share Net asset value €954.6m Furth
Slide 6: Operational Performance
SECTION 1 Operational Performance STRICTLY CONFIDENTIAL
Slide 7: Simple and Robust Business Model
Greencoat Renewables – Simple and Robust Business Model Greencoat Renewables Model 2019 H1 Convert wind to energy 12 wind farms 411MW Total investment €538m Equity Electricity sold to grid 556 GWh €417m Group net FCF Debt €27.1m (1) Cash €9.9m reinvestment €13.5m Dividends €3.7m SPV’s principal €13.
Slide 8: Diversified Portfolio
Diversified Portfolio Diversified portfolio underpinned by 11+ years’ REFIT and strong operating performance REFIT % GRP • Wind speed broadly Key Wind Farm Turbines Net end Interest MW on budget 1 Knockacummer Nordex Dec 2027 100% 100.0 • Grid constraint / curtailment 2 Killhills Enercon Mar 2030 10
Slide 9: Asset Management and Ongoing Performance Improvement
7 Asset Management and Ongoing Performance Improvement Active Management H1 Milestones • Portfolio scale continues to open commercially viable • Generation opportunities for enhancing performance. - Pro-active engagement project with all OEMs to identify potential technology upgrades • Combination o
Slide 10: ESG Driving Value
ESG Driving Value Environmental Social Corporate Governance • CO2 offset equivalent to • ESG policy in place covering • Experienced, independent over 240,000 homes employment, occupational health and diverse Board • Evaluate and mitigate all risks to and safety, human rights, public biodiversity, ai
Slide 11: Financial Performance
SECTION 2 Financial Performance STRICTLY CONFIDENTIAL
Slide 12: Financial Performance (1/2)
Financial Performance (1/2) For the six months ended 30 June 2019 Group and wind farm SPV cash flows Net (1) Gross (1) €’000 €’000 Net cash generation (2) 23,417 27,134 Dividends paid (13,539) (13,539) Project Capex & PSO Cashflow (3) (3,625) (3,625) Project level debt repayment – (3,717) Acquisitio
Slide 13: Financial Performance (2/2)
Financial Performance (2/2) 1. Cash revenue has been adjusted to exclude €3.2m of REFIT revenue For the six months ended that was received in January 2019 that related to November 2018 Net Cash Generation – Breakdown 30 June 2019 Net €’000 Gross €’000 Revenue (1) 47,622 47,622 Operating expenses (12
Slide 14: Movement in Net Asset Value
Movement in Net Asset Value 14
Slide 15: Acquisitions and Growth Opportunity
SECTION 3 Acquisitions and Growth Opportunity STRICTLY CONFIDENTIAL
Slide 16: Cloosh Valley Further Investment
7 Cloosh Valley Further Investment Cloosh Valley wind farm – 108MW (75%) Seller SSE Size 27MW Turbines 36 Siemens 3.0MW turbines COD September 2017 PPA SSE (2032) Turbine O&M Siemens O&M Management SSE • Additional 25% stake in Cloosh Valley wind farm aquired from SSE for a total consideration of €3
Slide 17: Gortahile
7 Gortahile Gortahile wind farm – 20MW (100%) Seller Glennmont Partners Size 20MW Turbines 8 Nordex N90 2.5MW turbines COD August 2010 PPA Energia Turbine O&M Nordex O&M Management ABO Wind • Opportunity to add further scale to Irish portfolio in September 2019 • High load factor site (35%+) • Locat
Slide 18: Irish Secondary Wind Market Overview
Irish Secondary Wind Market Overview Secondary Market since listing 1.1GW priced • Secondary wind market remains active and growing • Incidence of off-market and bilateral transactions Coillte increasing Local Developers • A lot of developers 411 MW BlackRock focused on getting projects acquired Imp
Slide 19: Ireland Pipeline
Ireland Pipeline Irish wind assets remains a large market and continues to see strong growth Republic of Ireland Cumulative Installed Wind Power 2014-2019 (GW) 1.4GW installed between 600MW under Possible 300MW 2014 and 2019 construction extra 4,500 • 3.7GW of operating capacity 4.6 4,000 • 600MW un
Slide 20: Ireland Climate Action Plan
Ireland Climate Action Plan Renewables/ RESS Auction - Increase reliance on renewables from 30% to 70% - Peat and coal plants closing - Regular RESS auctions to provide route to market 2020 2030 Estimated Estimated renewable capacity renewable capacity Corporate PPA / Data Centres - Intention to mee
Slide 21: European Renewable Opportunities
European Renewable Opportunities • Greencoat Renewables now positioned to access very large pool of assets to seek best value – c145GW expected to grow by additional c100GW by 2030 in GRP’s 5 nominated countries • Focus on markets and assets with strong regulatory support • Diversification without c
Slide 22: Targeted Approach to European Markets
Targeted Approach to European Markets Belgium Finland France Germany Netherlands 7.2 15.4 2.2 4.7 24.6 71.3 104.3 135.8 8.6 26.9 GW GW GW GW GW GW GW GW GW GW Overview: Primarilly mix of Overview: Primarily Overview: Mix of onshore Overview: Mix of onshore, Overview: Mix of onshore, onshore and sola
Slide 23: Capital Structure
SECTION 5 Capital Structure STRICTLY CONFIDENTIAL
Slide 24: Capital Structure June 2019
Capital Structure June 2019 1000 €955m Equity 800 Group level debt GAV (€m approximate) Long term, fixed rate Project Finance debt 600 400 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2018 2019 Lisdowney Tullynamoyle II Glanaruddery €111m Knocknalour Ballybane Coil
Slide 25: Conclusion
SECTION 6 Conclusion STRICTLY CONFIDENTIAL
Slide 26: Delivering on Strategy
Delivering on Strategy ATTRACTIVE DIVIDEND: IPO • • Total annual dividend of €3.015c paid for H1 2019 Robust H1 2019 dividend cover of 2.0x demonstrating resilient business model ACQUISITION OF VALUE-ACCRETIVE ASSETS: 3 Assets: 2 wind farms Capacity: 137MW • • Invested in 10 additional wind farms, d
Slide 27: Appendix
Appendix STRICTLY CONFIDENTIAL
Slide 28: Irish Renewable Energy Policy Underpinning FCFs
Irish Renewable Energy Policy Underpinning FCFs REFIT protects Greencoat Renewables from wholesale power price volatility 90 80 70 €/MWh 60 50 40 c.100% REFIT NO EFFECT ON NAV REFIT/MERCHANT MIX PARTIAL EFFECT MERCHANT PERIOD CASHFLOW INSULATED FROM POWER 30 2019 2020 2021 2022 2023 2024 2025 2026 2
Slide 29: Greencoat Renewables – Uncorrelated Returns
Greencoat Renewables – Uncorrelated Returns 130 • TSR of 28% (€117.5c share price) since IPO 120 • Dividends Paid of 11.6c 110 since IPO 100 90 80 Jul 17 Oct 17 Jan 18 Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 ISEQ (TSR%) Greencoat Share Price Greencoat Renewables (TSR%) 29
Slide 30: Robust Dividend Cover (illustrative)
Robust Dividend Cover (illustrative) Price sensitivity Wind sensitivity GUARANTEED 1/50 YEAR MINIMUM PRICE LOW WIND Dividend cover / (-20%) reinvestment c. €80 per MWh 20% fall in revenue 1/50 low wind year Revenue 64 No impact on revenue Operating Expenditure (20) for REFIT period Free Cashflow 44
Slide 31: NAV Underpinned by REFIT FCFs
NAV Underpinned by REFIT FCFs REFIT Merchant Windfarm valuation approach (up to 15 years) (15 - 30 yrs) ▪ NAV calculated by discounting projected cashflows to establish a present value ▪ Post REFIT methodology – Post REFIT power price is determined using input from independent economic consultant Di
Slide 32: Ireland Wind Vehicle Economics (illustrative)
Ireland Wind Vehicle Economics (illustrative) Single Wind farm Wind Vehicle Dividend cover Re-investment Dividend cover Re-investment Cash Yield Dividend NAV NAV Dividend cover protects against low-wind. Reinvestment grows NAV Source: Greencoat Capital LLP – illustrative for a new wind farm asset 32
Slide 33: RESS – Renewable Energy Support Scheme (REFIT Successor)
RESS – Renewable Energy Support Scheme (REFIT Successor) RESS provides strong growth opportunity for Irish renewable market for next 7+ years Structure • Two way “CfD” type structure Auction Auction Delivery Single Capacity Year Year Technology • Expectation for 15 year contract (GW/hrs) Technology
Slide 34: Investment Manager – Greencoat Capital
Investment Manager – Greencoat Capital With c. €4bn AUM and multiple fund strategies (listed wind, unlisted solar) Acquisition Operational Irish presence expertise experience • 48 wind farms and >1.4GW • 1.4GW capacity and 6 years • Dublin office since 2009 capacity acquired experience in wind • Man
Slide 35: GREENCOATS &
WY) GREENCOATS & RENEWABLES @% — TNS