Aquila European Renewables Plc Registered · LSE:AERI
Aquila European Renewables Plc Registered — Aquila European Renewables — Investor Presentation (February 2023)
31 slides from Aquila European Renewables Plc Registered's investor presentation, Feb 6, 2023
Slide 1: Aquila European Renewables Plc 2023 Investor Presentation
Aquila European Renewables Plc (“AER”) 2023 Investor Presentation Desfina (Greece) Albeniz (Spain) © 2023 AQUILA CAPITAL Generating Essential Investments
Slide 2: Introduction
Introduction Direct Asset Exposure to Wind, European Focused, Key Metrics Solar PV & Hydro1 Presence in 6 Countries Market Capitalisation2 EUR 363 million Net Asset Value 51.5% 43.9% EUR 452 million (“NAV”) Discount to NAV2 -19.6% EUR 5.51 cents per 2023 Dividend Ordinary Share 4.6% Guidance (+5% vs
Slide 3: Record 2022 Performance
Record 2022 Performance KPIs (EUR cents, unless stated otherwise) 2022 2021 Dividend per ordinary share 5.25 5.00 NAV per ordinary share 110.6 102.6 Total NAV per ordinary share return1 12.9% 7.6% (Sagres, Portugal) ▪ 2022 total NAV return of 12.9%1, the highest one-year return since IPO ▪ Annualise
Slide 4: Portfolio Transformation – 80% Growth in Operating Capacity
Portfolio Transformation – 80% Growth in Operating Capacity Total Generating Capacity – AER Share (MW / MWp) 500 50 400 50 55 300 50 30 464 200 414 229 100 198 133 0 IPO 2019 2020 2021 Tiza Albeniz The Rock Jaén 2022 Operating Guillena Total Capacity Capacity (Pro Forma) Completion Date: Jun 22 Jun
Slide 5: Portfolio Expected to Deliver Strong Dividend Cover
Portfolio Expected to Deliver Strong Dividend Cover – Portfolio growth underpins robust dividend cover (net of project debt 2023 Dividend Cover 5 Year Average Dividend Cover repayments) Forecast Forecast2 – Significant surplus cash flow expected after existing dividend commitments over the next 5 ye
Slide 6: Enhanced Balance Sheet Efficiency
Enhanced Balance Sheet Efficiency Capital Deployed Over Time EUR million 500.0 450.0 400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 - Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Invested Commitments – Investment discipline prioritiz
Slide 7: Attractive Forward Returns, Potential for Upside
Attractive Forward Returns, Potential for Upside Indicative Forward Returns1 Upside from Asset Life Extensions 9.4% Impact on NAV per Ordinary Share2 Implied Pro Asset Life NAV per Sensitivity Forma NAV Technology Assumption Ordinary % 7.2% (Years) Per Ordinary + (Years) Share Share Wind 26 35 +10 c
Slide 8: Higher Risk Adjusted Returns Compared to IPO
Higher Risk Adjusted Returns Compared to IPO Portfolio Discount Rate Evolution 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q4 2019 Q4 2022 – Discount rate has reduced by ~40 bps since Q4 2019, po
Slide 9: AER has Benefitted from Taking Idiosyncratic Construction Risk
AER has Benefitted from Taking Idiosyncratic Construction Risk Construction Assets at Cost vs. Q4 Valuation (EUR m)1 166.1 Aggregate valuation uplift from Up to 50 bps construction construction assets currently premia remain in place. reflected in the NAV: Equivalent to: 148.0 18.1 million +7.8 mill
Slide 10: Capital Allocation Priorities
Capital Allocation Priorities Dividends Share Buybacks Investments • Objective to progressively grow the • EUR 20 million share buyback authorized • New investments will only be pursued if dividend over the medium term by the Board they offer compelling value relative to buying back shares, given th
Slide 11: Investment Strategy Suited to Managing Power Price Volatility
Investment Strategy Suited to Managing Power Price Volatility 2022 Daily Average Power Price1 (EUR / MWh) 800.0 700.0 600.0 500.0 Nordics 400.0 Iberia 300.0 Greece 200.0 100.0 0.0 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 – Hedging: 60-70% of P50 prod
Slide 12: PPA Price Development
Markets Management Group Value-add PPA Price Development1 PPA signed PPA signed PPA signed 120.0 100.0 80.0 EUR / MWh 60.0 40.0 20.0 - Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Tiza [6.5y - Start: 07/22] Jaen [5y - Start: 04/23] Guillena [7y - Start:
Slide 13: Attractive Contracted Revenue Base
Attractive Contracted Revenue Base Present Value of Contracted vs. Revenue Mix2 Non-Contracted Revenue (5 Years)1,2 100.0% 90.0% Aquila will proactively seek to replace expired PPA / tariff contracts over time 25.8% in order to maintain a high degree of contracted revenues 48.1% 80.0% 70.0% Market 6
Slide 14: Regulatory Update
Regulatory Update – Q4 NAV already reflects the Investment Adviser’s assessment of actual plus proposed regulatory changes, impact on the portfolio is minimal – The majority of AER’s production is subject to PPAs or Government regulated tariffs, most regulatory changes are targeting merchant power p
Slide 15: The Rock Appraisal Case Update
The Rock Appraisal Case Update – AER ownership interest: 13.69%. The Rock represents 9% of NAV – The Rock project company has requested the court to set compensation in an appraisal case in relation to the local reindeer district (the ‘Sami’) – The appraisal case is scheduled for court hearing comme
Slide 16: Low Gearing with Significant Firepower
Low Gearing with Significant Firepower Debt / Gross Asset Value (31 December 2022)1 Liquidity vs. Existing Commitments (EUR m, 31 December 2022) 31.0% Cash balance (excl. asset level cash holdings) 24.7 25.6% Undrawn RCF 65.1 Total Liquidity 89.9 Greco2 47.5 Total Commitments 47.5 Q4 2022 Pro forma
Slide 17: Conclusion
Conclusion – Portfolio transformation in 2022 has enabled a step-change in earnings capacity – Dividend cover of 1.8x expected in 2023 and 1.6x over the next five years1 – Deep value proposition at current share price levels – The Board is taking action through capital allocation: EUR 20 million sha
Slide 18: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix © 2023 AQUILA CAPITAL 18
Slide 19: AER Portfolio Snapshot
AER Portfolio Snapshot Key Statistics – 31 December 20221 Wind energy Solar PV Hydropower The Rock 12 36 Investments Operating assets2 New investments Olhava (2022) 1 6 Tesla Project under Countries construction (Guillena) Holmen II Svindbaek I+II 463.8 MW ~25 Total capacity Remaining asset life (ye
Slide 20: Portfolio Evolution Since IPO
Portfolio Evolution Since IPO1 Technology Geography Asset Status3 Asset Age 2019 19.2% 19.2% 19.2% IPO 24.2% 100% 28.0% Year 28.0% 80.8% 28.7% 52.9% 5.7% 1.5% 4.6% 15.3% 2022 12.6% Pro 43.9% 5.4% Forma2 51.5% 40.7% 17.3% 98.5% 82.8% 4.6% 15.5% 1Allocation is based on fair value of the assets. 2Calcu
Slide 21: AERIF Track Record Since IPO
AERIF Track Record Since IPO Capital Deployed or Total NAV Development Dividends Ongoing Charges Committed (EUR m)1 (Cents per Ordinary Share) (Cents per Ordinary Share)2 (% of NAV)3 IPO targets 1.7% Cumulative dividends paid 434.8 5.5 NAV per Share 5.25 5.0 1.4% 125.1 111.8 4.0 1.1% 1.1% 290.4 103
Slide 22: Valuation Assumption Benchmarking
Valuation Assumption Benchmarking Asset life – Wind energy1 Asset life – Solar PV1 Long-term inflation1,2 Discount rate3 35 45 3.0% 9.0% 40 8.0% 30 2.5% 35 7.0% 25 30 2.0% 6.0% 20 25 5.0% 1.5% 15 20 4.0% 15 1.0% 3.0% 10 10 2.0% 0.5% 5 5 1.0% 0 0 0.0% 0.0% Peer 6 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Pe
Slide 23: Power Prices and Inflation Sensitivities
Power Prices and Inflation Sensitivities Real Electricity Price Forecasts – Weighted Average1 Inflation Assumptions Used in the NAV (31 December 2022) (EUR / MWh) 200 2023 2024 2025 2026 2027 2028 Q4 2021 Q3 2022 Eurozone 6.05% 2.12% 2.08% 2.04% 2.00% 2.00% 150 Q4 2022 Denmark 4.04% 2.06% 2.04% 2.02
Slide 24: Portfolio Summary
Portfolio Summary Project Technology Country Capacity1 Status COD2 Asset Life Equipment Energy Offtaker Ownership Leverage4 Acquisition from COD Manufacturer Offtaker3 in Asset Date Tesla Wind energy Norway 150.0 MW Operational 2013, 25y Nordex PPA Statkraft 25.9%6 20.2% July 2019 2018 Sagres Hydrop
Slide 25: Debt Summary (31 December 2022)
Debt Summary (31 December 2022) Project AERIF Share Drawn Debt Currency Bullet / Maturity Hedged %2 Type (EUR million)1 Amortisation Tesla 25.9% 9.0 EUR Partly amortising Mar 2029 100.0% Bank Debt Sagres 18.0% 7.0 EUR Fully amortising Jun 2033 70.0% Bank Debt Olhava 100.0% 19.2 EUR Fully amortising
Slide 26: Regulatory Update Summary
Regulatory Update Summary Windfall Tax Other Comment • Effective limit of captured merchant prices • Variable reference price / gas cap increasing to • Only impacts merchant revenue to EUR 85 – 100 / MWh EUR 70 / MWh until May 2023 • Existing PPAs unaffected • Revenues from PPA below EUR 67 / MWh •
Slide 27: Dividend Cover Assumptions
Dividend Cover Assumptions Item Assumption • P50 production • Average of analyst power price curves (captured rate) General • Guillena assumed to be operational by April 2023 • Assumes no additional investments • Dividend of 5.51 cents per ordinary share Dividend & Buyback • Assumes no share buyback
Slide 28: Aquila Capital – Highly Experienced Investment Adviser
Aquila Capital – Highly Experienced Investment Adviser Clean Energy Portfolio – Installed and Developed Capacity Solar PV Wind energy Hydropower Energy storage systems Energy efficiency 335 PV parks 919 Wind turbines 277 Hydropower plants 10 Projects 26 Projects 11.4 GW 4.0 GW 1.0 GW – One of the la
Slide 29: Important Notice
Important Notice FOR INSTITUTIONAL/PROFESSIONAL INVESTORS ONLY. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA, OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE
Slide 30: Important Notice (cont’d)
Important Notice (cont’d) The information contained in this document is given at the date of its publication (unless otherwise marked) and may be incomplete and subject to change. In particular certain figures contained in this presentation, including financial information, are unaudited and may be
Slide 31: Important Notice (cont’d)
Important Notice (cont’d) The Fund is incorporated and registered in England and Wales as a public company limited by shares under the Companies Act 2006 (as amended). A prospectus has been issued for the Fund, which is, together with further documents and information available free of charge via we
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