Adani Energy Solutions Ltd · NSE:ADANIENSOL
Adani Energy Solutions — Adani Transmission — Investor Presentation (May 2021)
53 slides from Adani Energy Solutions's investor presentation, May 2021
Slide 1: Adani Transmission Limited Equity Presentation
Adani Transmission Limited Equity Presentation May 2021
Slide 2: Contents
CONTENTS 04-07 Adani Group 04 09-12 Company Profile 09 14-18 Transformational Journey 14 20-23 ESG 20 24 Investment case 24 27-51 Annexure 27
Slide 3: Adani Group
Transmission adani
Slide 4: Adani: A world class infrastructure & utility portfolio
Adani: A world class infrastructure & utility portfolio Transport & Logistics Portfolio Adani Energy & Utility Portfolio Adani 63.7% 100% 75% 56% Marked shift from B2B to B2C businesses – APSEZ SRCPL ATL AGEL Port & Logistics Rail T&D Renewables AGL – Gas distribution network to serve key 100% 75% 3
Slide 5: Adani: Decades long track record of industry best growth rates across sectors
Adani: Decades long track record of industry best growth rates across sectors Transmission Network (ckm) Port Cargo Throughput (MT) Renewable Capacity (GW) CGD8 (GAs9 covered) 45% 21% 161% 12% 1.5x 3x 30% 2.5x 6x 7% 5% 25% Industry ATL Industry APSEZ Industry Adani AGEL Industry AGL 2016 320,000 ckm
Slide 6: Adani: Repeatable, robust & proven transformative model of investment
Adani: Repeatable, robust & proven transformative model of investment Phase Development Operations Post Operations Origination Site Development Construction Operation Capital Mgmt Analysis & market Site acquisition Engineering & design Life cycle O&M Redesigning the capital Activity intelligence pla
Slide 7: ATL: A platform well-positioned to leverage growth opportunities in T&D business
ATL: A platform well-positioned to leverage growth opportunities in T&D business Execution Prowess Strategic Presence Healthy pool mix Transmission Network of Transmission - Presence in 12 states Development with 23 transmission lines Transmission (FY21): 17,276 ckt km1; 52% of EBITDA - Central pool
Slide 8: Company Profile
Company Profile
Slide 9: ATL: Manifesting Adani's Infrastructure Excellence in T&D business
ATL: Manifesting Adani’s Infrastructure Excellence in T&D business Execution Strength and Pan Pan-India network & only private AEML - One of the best-run 3 million+ India Presence sector co. to operate 500 KV 93-year old integrated utility Retail Electricity Households HVDC in S-E Asia catering to g
Slide 10: ATL at a Glance
ATL at a Glance Contracted Assets ROA Assets 25.1% 100% 100% 74.9% 100%1 Consumer-facing Transmission HVDC Assets Transmission line Integrated Utility TBCB(2) Assets (AEML) 4 Operating HVDC Line in AEML catering to Transmission Assets Mumbai 3 mn+ Connections Concession Life of Transmission 13 Opera
Slide 11: ATL: Contracted Assets at a Glance
ATL: Contracted Assets at a Glance Contracted Assets (TBCB Assets) Key Characteristics TBCB Fixed 35 yrs + 30 yrs of (Section 63) Tariff Asset Life remaining life of asset Operating Asset Base Op. EBITDA Assets (Rs. Bn) FY21 (Rs. Bn) Counterparty Network Pool 13 68 8.4 Function of line Under-constru
Slide 12: ATL: ROA assets at a Glance
ATL: ROA assets at a Glance 3 Consumer-facing Integrated Utility (AEML) 1 ROA Transmission Assets Key Characteristics ROA Transmission Assets Consumer 3.04 million Counterparty Consumers base Return on Assets (ROA -Section 62) Type of Regulated Asset Life Perpetual Asset Asset (Sec. 62) business Net
Slide 13: Transformational Journey
Transformational Journey
Slide 14: Transformation nature and journey thus far
ATL: Transformation nature and journey thus far Key Benchmarks Milestones achieved • Scale and Wider Presence (largest private sector • ATL has grown ~3x in a span of 5 years on Transmission network and has presence Operations Transmission and Distribution player in India) in 12 states of India • Wo
Slide 15: Operational and Execution Excellence
ATL: Operational and Execution Excellence Robust Transmission and Transmission business - Average Distribution business - Supply Distribution Network System Availability % Reliability (ASAI) % Operational excellence 3 mn+ 3 mn+ 3 mn+ 99.9% 99.8% 99.8% 99.9% 99.990% 99.990% 99.992% 99.993% 17,276 14,
Slide 16: ATL: Excellence led scale driving efficiencies and growth
ATL: Excellence led scale driving efficiencies and growth • Synergies from wide geographical presence and execution expertise helps mitigate cost and time overrun risk Scalability Potential in Future Operational • Economies of scale permits one of the lowest Rs. 0.19 million per ckt kms O&M cost as
Slide 17: ATL: Growth and Long-term value creation
ATL: Growth and Long-term value creation Track-record of delivering solid EBITDA growth Efficient and Optimal Capital Allocation Locked-in growth for next 3-5 years Operational EBITDA (Rs. Crs) Transmission Distribution 4,233 Transmission growth 4,055 FY16 FY21 • 10 Under-construction TBCB projects
Slide 18: ATL: Improving Cashflow with a focus on Credit Discipline
ATL: Improving Cashflow with a focus on Credit Discipline As of As of Solid Free Cash Flow generation available for future growth 31st Mar 16 31st Mar 21 Consolidated Rs. 85 bn Rs. 194 bn Net Debt Net Debt to 4.6x 4.7x 5,066 EBITDA (x) 4,519 Credit Rating BBB-/Baa3 BBB-/Baa3 2,937 3,113 2,770 1,997
Slide 19: ESG – Embedded in to our actions
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission ESG – Embedded in to ESG our actions 08
Slide 20: ATL: Integrated ESG Framework for enhanced value creation
ATL: Integrated ESG Framework for enhanced value creation Technological advancement for minimal downtime during maintenance better availability increased EBITDA TARGET BY SEP 2021 Renewable Power Procurement at below APPC tariff reduction for 12 mn Mumbai consumers 12x growth in renewable power proc
Slide 21: ATL: Climate Strategy
ATL: Climate Strategy Environment Related Factors Optimizing Carbon Intensity Resource and Bio-diversity Waste Management • Carbon foot-printing and disclosure • Energy Management • Waste Reduction (5R* ) Climate • Improving Carbon Efficiency • Optimizing Input Consumption • Circular Economy Awarene
Slide 22: ESG: Environment awareness and Initiatives
ESG: Environment awareness and Initiatives ATL recognizes that below environment related factors matter to our business model Climate Awareness Carbon Emissions Resource Management Waste Management Reduction in Carbon Footprint Resource Management Waste Management Technology Driven : Water – Rainwat
Slide 23: ESG: Governance – Journey so far and future glide path
ESG: Governance – Journey so far and future glide path We have charted a glide path to internalise global best practices of governance by September 2021 Journey so Far Target by SEP 2021 Structure for 8 SPVs including AEML, with no cross securities nor cross guarantees All transactions between ATL a
Slide 24: ATL: Compelling Investment Case
ATL: Compelling Investment Case Stable & • Predictable cash flow with contracted and regulated business predictable cash- • Long term concession life (~35 years + 30 years of remaining asset life) flows • ~52% sovereign-rated counterparties as of FY20 World-class • Robust operational metrics - line
Slide 25: Annexure
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission Annexure 22
Slide 26: Investment Strategy – Focus Areas and Growth
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission Investment Strategy – Focus Areas and Growth 14
Slide 27: ATL: Key Focus Areas FY21 and Beyond
ATL: Key Focus Areas FY21 and Beyond Liquidity Management Growth • Focus on maintaining adequate liquidity cover to swiftly mitigate • ATL well placed to capture future growth through multiple current uncertainties avenues: • Fully covered in-terms of debt servicing for next 12 months by • Robust un
Slide 28: ATL: Strategic Objectives
ATL: Strategic Objectives Regulated growth opportunities Opportunity Set in Transmission Opportunity Set in Distribution ▪ AEML: ATL geared to fully leverage ▪ Achieve 20,000 Ckt kms by – Leveraging on 12mn+ consumer opportunities for disciplined growth FY2022 base ▪ Strong pipeline of TBCB – Contin
Slide 29: Transmission business: Growth through TBCB pipeline
Transmission business: Growth through TBCB pipeline Fully No. of Project COD/ operational projects cost SCOD(2,3) (Rs. bn) tariff (Rs. bn)(1) EBITDA mix – FY21 EBITDA mix - fully built-up(4) Operating ROA COD: Assets 4 projects 108 Aug’12- 19.0 State Mar’15 53% Centre 65% State COD: Operating TBCB 1
Slide 30: AEML (Integrated Utility): Regulated Growth Opportunities
AEML (Integrated Utility): Regulated Growth Opportunities Sustainable Growth through RE power Reliability from capex led network strengthening Affordability due to reduced power cost Share of Power Procurement Capex Schedule (Rs. bn) Average Billing Rate (ABR) – Rs. /unit1 Project Capex Replacement
Slide 31: Capital Management Program
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission Capital Management Program 14
Slide 32: ATL: Key Highlights and Objectives of Capital Management Program
ATL: Key Highlights and Objectives of Capital Management Program Development De-risking Capital Conservation • Significantly reduced green-field risk • Refinancing risk significantly minimized (mature asset operator) with debt maturity (>5 year) shifting from 12% in FY16 to 87% in FY21 De-risking to
Slide 33: Case Study: Development, O&M Efficiencies and Capital Management
Case Study: Development, O&M Efficiencies and Capital Management to create immense shareholder value Fully funded Value Creation by Capital Management releasing Equity for Growth Case study USPP: Future of ATL Capital Management Program Capital Phase Development Operations Enabling Assets to Ensure
Slide 34: AEML: Significant De-risking through Capital Management
AEML (Integrated Utility): Significant De-risking through Capital Management Capital De-risking of Asset Underlying Value Creation AEML US$ 1 bn bond issue in Jan-20 QIA’s acquisition of 25.1% stake in AEML for Rs. 32 bn investment Key Attributes Key Attributes Debt Diversification Capex Reserve Sys
Slide 35: ATL: Capital Management Program Demonstrating Global Excellence
ATL: Capital Management Program Demonstrating Global Excellence Highlights Obligor 1 Obligor 2 USPP AEML ATIL MEGPTCL STL, ATRL, CWRTL, RRWTL, AEML Asset PPP-8,9,10 FY21 Operational EBITDA (Rs. Crs) 1,725 610 1,659 Tenor 10 year 16.5 year 30 year 10 year Issue size (USD mn) US$ 500 mn US$ 500 mn US$
Slide 36: ATL's Capital Management Program brings diversity and elongated maturity to debt profile
ATL’s Capital Management Program brings diversity and elongated maturity to firm’s debt profile Refinancing risk minimised1 As of As of 12% 31st Mar 16 31st Mar 21 < 1 Y - 19% < 1 Y - 2% 1 to 5 Y - 69% 1 to 5 Y - 11% 89% > 5 Y - 12% > 5 Y - 87% Consolidated Rs. 194 bn Rs. 85 bn Net Debt FY16 FY21 Co
Slide 37: ATL is rated Investment Grade from FY16 and beyond
ATL is rated Investment Grade from FY16 and beyond International- Obligor Group SPV Ratings - Domestic Rating Agency Facility Rating/Outlook Company Rating Agency Rating Outlook Fitch Dollar Bond BBB-/Negative ATL India Rating AA+ Stable S&P Dollar Bond BBB-/Stable WTGL India Ratings AA+ Stable Mood
Slide 38: Regulatory Landscape and Sector Opportunity
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission Regulatory Landscape and Sector Opportunity 08
Slide 39: Regulatory Framework
ATL: Regulatory Framework EA 2003 ROA AEML TBCB Growth Section 62 (ROA) Tariff Method - Multi Year (5 yr) Tariff Section 63 (TBCB) Tariff Method – License Period Basis Services O&M Power Procurement All other Costs Expenses Costs costs • Annual charge for a 25-year period is set through the bidding
Slide 40: Sector Outlook: Indian Transmission Sector Poised for Significant Growth
Sector Outlook: Indian Transmission Sector Poised for Significant Growth Robust growth outlook driven by strong policy support Significant under-investment in Transmission sector historically…(1) …resulted into very low MVA/MW ratio in India(2) % Growth in Generation Capacity (MW) % Growth in Transm
Slide 41: Size of Opportunity: Investment of Rs. 8.2 tn expected in Indian Transmission
Size of Opportunity: Investment of Rs. 8.2 tn/ USD 117 bn expected in Indian Transmission over the Next Decade Transmission Lines and Transformation Capacity to Grow…. …requiring Rs. 8.2 tn/ USD 117 bn of investment (1) Transmission Lines (‘000 ckm)1 Expected Investment Over Next 10 Years 230/220 kV
Slide 42: ESG
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission ESGESG 08
Slide 43: ATL: ESG Annual Performance and Initiatives
ATL: ESG Annual Performance and Initiatives ESG Performance (FY21 vs FY20)1 ESG Initiatives during the year • AEML’s Dahanu plant achieved certification for Zero Waste to 15.5 % Landfill (ZLD) 41 % Scope 1 Emission Auxiliary Power • AEML has launched ‘Mumbai Green Energy Initiative’ allowing Consump
Slide 44: ATL: Key ESG Metrics and Initiatives
ATL: Key ESG Metrics and Initiatives CO2 emissions Water Waste Land use (AEML - Dahanu) Environment Scope 1 (TCO2e): Fresh Water (KL): 18,16,997 ~40 KL Waste generated of used ~148 hectares of green belt 31,87,008 oil Water recycled (KL): 2,04,494 Planted 2 Cr mangroves Scope 2 (TCO2e): 24,509 100%
Slide 45: ATL: Inculcating Safety Culture
ATL: Inculcating Safety Culture Safety Initiatives During FY21 Safety Performance in FY21 Safety Parameters FY21 FY20 • 1,65,130 man-hours of safety training and awareness during the quarter LTI 4 10 • Training was conducted across the organization on effective usage of Gensuite mobile application F
Slide 46: Global Benchmarking: Regulatory Framework
Global Benchmarking: Regulatory Framework Regulatory return (ROA) framework for transmission players across geographies Key Highlights 14.0% Equity portion 12.0% doesn’t depreciate WACC/Rate of return 10.50% ATL’s rate of return will 10.0% normalize over the period as 7.80% 7.60% 8.00%# our assets m
Slide 47: Global Benchmarking: Adani Utility Portfolio
Global Benchmarking: Adani Utility Portfolio vs. Global Utility peers ATL and Adani Utility portfolio fares in line or better on various metrics with global peers Utility Consumers (mn) EBITDA margin % (LTM 12 months) EV/EBITDA (TEV/NTM EBITDA) 18.5 8.5# 53% 7.8 14.4 44% 42% 43% 5.6 12.05 3.8 3.1 6.
Slide 48: ATL: Harnessing Innovation and Technology to Drive Excellence
ATL: Harnessing Innovation and Technology to Drive Excellence Cost Safety Reliability Efficiency/Response time Initiative Impact ▪ Drone Inspection for Asset Maintenance ▪ Usage of drones through Light Detection and Ranging (LiDAR) method for Pre-Bid Survey ▪ Automatic Power Factor Correction (APFC)
Slide 49: ATL: Revenue and EBITDA trend
ATL: Revenue and EBITDA trend Operating Revenue performance Operating EBITDA performance Transmission Distribution Transmission Distribution 10,237 92% 27% 92% 21% 91% 19% Margin 8,840 4,233 4,055 6,530(1) 1,659 1,573 7,532 2,857(1) 6,048 806 4,270 2,574 2,482 2,051 2,792 2,704 2,260 FY21 FY20 FY19
Slide 50: ATL's Evolution and Operational Asset Portfolio as of FY21
ATL’s Evolution and Operational Asset Portfolio as of FY21 ATL’s Transmission Network (ckt km) has grown 2.8x Adani Transmission Limited and Distribution business being acquired in FY19 ATL’s “Grid-to-Switch” Integrated Platform 100% 100% 75% 100% 100% 100% 100% 100% 100% 100% 100% 100% ATSCL & WTGL
Slide 51: ATL's Under-construction Asset Portfolio as of FY21
ATL‘s Under-construction Asset Portfolio as of FY21 Adani Transmission Limited 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Obra-C WRSS – Bikaner - Lakadia Kharghar NKTL Jam Kham- FBTL GTL Banas- HVDC# WKTL Badaun XXI (A) Khetri baliya - Vikhroli kantha North Fategarh Ghatampur Obra Lakadi
Slide 52: Legal Disclaimer
Legal Disclaimer The information contained in this presentation is provided by Adani Transmission Limited (together with its subsidiaries, the “Company” or “ATL”) to you solely for your reference and for information purposes only. This presentation is highly confidential and is being given solely fo
Slide 53: Thank You
adani Transmission adani Transmission Thank You ¢
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