SDCL Efficiency Income Trust PLC · LSE:SEIT
SDCL Efficiency Income Trust — SDCL Energy Efficiency Income Trust — FY2024 Earnings Presentation
35 slides from SDCL Efficiency Income Trust's earnings presentation, Jun 27, 2024
Slide 1: Annual Results Presentation, Year to 31 March 2024
SDCL Energy Efficiency Income Trust plc Annual Results Presentation Year to 31 March 2024 27 June 2024
Slide 2: Contents
SDCL E nergy Efficiency Income Trust p lc Contents 1. Overview and Highlights Investment Manager Presentation Team 2. Financial Performance Jonathan Maxwell Purvi Sapre ◼ Established SDCL in 2007 ◼ Over 20 years’ experience 3. Portfolio Performance investing on behalf of debt, equity ◼ Over 25 years
Slide 3: 1. Overview and Highlights
SDCL E nergy Efficiency Income Trust p lc 1. Overview and Highlights
Slide 4: Highlights for the year ended 31 March 2024
SDCL E nergy Efficiency Income Trust p lc Highlights for the year ended 31 March 2024 £1.5b1 portfolio enterprise value, with over £90m p.a. cash flow generation Performance Investment Activity Capital Strength Market Background ▪ Investment cash inflow ▪ c.£161m invested during ▪ Low levels of tota
Slide 5: Focus on addressing share price discount
SDCL E nergy Efficiency Income Trust p lc Focus on addressing share price discount Manager focused on taking action ▪ Sold UU Solar in May 2024 Selective disposals to reduce gearing 1 ▪ Targeting further selective disposals and/or bringing in funding partners to source cash and substantiate valuatio
Slide 6: Portfolio characteristics
SDCL E nergy Efficiency Income Trust p lc Portfolio characteristics SEEIT’s portfolio of energy efficiency projects can be broadly split into two categories 1 ENERGY GENERATORS 2 ENERGY SAVERS 4,979,953 MWh energy generated in the year ended 379,589 MWh energy saved in the year ended 31 31 March 202
Slide 7: 2. Financial Performance
SDCL E nergy Efficiency Income Trust p lc 2. Financial Performance
Slide 8: NAV per share movement in year to March 2024
SDCL E nergy Efficiency Income Trust p lc NAV per share movement in year to March 2024 NAV stable, excluding impact of change in discount rates reflected in first half of the year Discount rate increase of 0.9%, mainly driven Portfolio performance of 6.1p per share broadly by rising interest rates,
Slide 9: Summary financials
SDCL E nergy Efficiency Income Trust p lc Summary financials1 Earnings in line with expectations Income Statement Year to 31 March 2024 (£m) Year to 31 March 2023 (£m) Total income (excluding discount rate movements) 85.3 79.4 Impact of discount rate movements (unrealised) (118.2) (81.2) Fund expens
Slide 10: Summary financials (cont'd)
SDCL E nergy Efficiency Income Trust p lc Summary financials (cont’d)1 Dividends fully covered by cash Cashflow Statement Year to 31 March 2024 (£’m) Year to 31 March 2023 (£’m) Commentary Cash from investments2 92.5 85.1 Cash from investments up by 9% Operating and finance costs (20.0) (13.5) Costs
Slide 11: Weighted average discount rate movements
SDCL E nergy Efficiency Income Trust p lc Weighted average discount rate movements Impact of 90bps increase 9.4% levered mostly reflected in H1 Whole portfolio (unlevered) ▪ No material movement overall since September 2023 Change from March March 24 ▪ 9.4% levered rate includes amortising debt and
Slide 12: Total gearing at 31 March 2024
SDCL E nergy Efficiency Income Trust p lc Total gearing at 31 March 2024 Structural gearing remains in line with medium-term target ▪ Total gearing includes Company’s RCF and project level ▪ Total gearing post disposal at 32% of EV and 43% of NAV debt ▪ Net reduction in RCF since 31 March 2024, foll
Slide 13: SEEIT: Key NAV sensitivities
SDCL E nergy Efficiency Income Trust p lc SEEIT: Key NAV sensitivities Based on investment portfolio at 31 March 2024 1 ▪ Positive inflation correlation has increased from 3.4p to 5.3p per +1.0% per annum uplift in inflation ▪ Driven by switch to inflation linked pricing on contract renewal, new ass
Slide 14: 3. Portfolio Performance
SDCL E nergy Efficiency Income Trust p lc 3. Portfolio Performance
Slide 15: Project Key Performance Indicators (KPIs)
SDCL E nergy Efficiency Income Trust p lc Project Key Performance Indicators (KPIs) Robust combined performance across the portfolio, with accretive value delivered % of SEEIT’s Asset Equity Value KPI March 20241 March 20232 GAV3 EBITDA ($m) 15.9 14.6 RED-Rochester £200m c.17% Billed MMBtu (millions
Slide 16: Portfolio performance and risk management
SDCL E nergy Efficiency Income Trust p lc Portfolio performance and risk management Trading and events during the year, mitigating actions and focus looking forward Project Key Updates Asset Management Focus ↓ Unusual weather and changes in large customer ▪ Negotiating amendments to the current tari
Slide 17: Portfolio performance and risk management
SDCL E nergy Efficiency Income Trust p lc Portfolio performance and risk management Trading and events during the year, mitigating actions and focus looking forward Project Key Updates Asset Management Focus ↑ Regulatory updates in period more favourable ▪ Continued optimisation of energy procuremen
Slide 18: 4. Investment Outlook
SDCL E nergy Efficiency Income Trust p lc 4. Investment Outlook
Slide 19: Investment activity in the year and outlook
SDCL E nergy Efficiency Income Trust p lc Investment activity in the year and outlook Manager focuses on organic investments above return thresholds Activity and pipeline Investment funding sources ▪ Total £161 million invested in the period ▪ SEEIT Capital Allocations Policy targets ▪ Of which, £14
Slide 20: Large and diversified portfolio
SDCL E nergy Efficiency Income Trust p lc Large and diversified portfolio FTSE 250 company which has achieved substantial scale since its IPO in December 2018 Mar-192 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 NAV (£ millions) 98 324 694 1,073 1,125 982 NAV (p per share) 98.4 101.0 102.5 108.4 101.5 90.5 NA
Slide 21: Illustration of projected cash flows
SDCL E nergy Efficiency Income Trust p lc Illustration of projected cash flows The long-term, contractual characteristics provides visibility of long-term cash flows • Projected cash flows assuming an initial portfolio value of c.£1.1bn • Assumes conservative use of gearing in future years • Upsides
Slide 22: 5. Sustainability Highlights
SDCL E nergy Efficiency Income Trust p lc 5. Sustainability Highlights
Slide 23: Most energy is lost before reaching the end-user
SDCL E nergy Efficiency Income Trust p lc Most energy is lost before reaching the end-user SEEIT’s energy efficiency projects reduce energy loss in the system THE PROBLEM Energy loss in generation, transmission & distribution, and use Energy Generation Transmission & Distribution Energy Use c.55%¹ o
Slide 24: SEEIT's Sustainability Framework
SDCL E nergy Efficiency Income Trust p lc SEEIT’s Sustainability Framework The SEEIT Sustainability Framework (the “Framework”) marks a transition from monitoring ESG performance at investments to actively managing outcomes The Framework consists of 5 key principles: The Framework will help to disti
Slide 25: ESG investment spotlights
SDCL E nergy Efficiency Income Trust p lc ESG investment spotlights SEEIT’s investments are aligning with the Framework’s Principles Red-Rochester Onyx Renewable Partners Principle 1: Principle 4: Champion energy efficiency Support our communities • 38MW cogeneration (cogen) plant to improve system
Slide 26: 6. Summary Remarks
SDCL E nergy Efficiency Income Trust p lc 6. Summary Remarks
Slide 27: Summary remarks
SDCL E nergy Efficiency Income Trust p lc Summary remarks Scale & Diversification ▪ £1.5bn enterprise value comprising £1.1bn equity and £0.4bn debt. ▪ Over £90 million of annualised investment cash inflows. ▪ Investments in 10 countries; mainly the United States and Europe. Scale and focus on energ
Slide 28: 7. Appendices
SDCL E nergy Efficiency Income Trust p lc 7. Appendices
Slide 29: SEEIT portfolio as at March 2024
SDCL E nergy Efficiency Income Trust p lc SEEIT portfolio as at 31 March 2024 Diversification by investment, technology, geography and lifecycle stage 1. Presented on a gross asset value (GAV) basis as at 31 March 2024, consisting of Portfolio Valuation and other assets 2. Construction stage represe
Slide 30: Analysis of change in portfolio valuation - bridge
SDCL E nergy Efficiency Income Trust p lc Analysis of change in portfolio valuation - bridge Portfolio valuation change for the year to 31 March 2024 ▪ Portfolio Valuation of £1,117m forms key part of balance sheet – reconciles to NAV of £983m through working capital and debt of SEEIT Holdco (wholly
Slide 31: Key Performance Indicators ("KPIs")
SDCL E nergy Efficiency Income Trust p lc Key Performance Indicators (“KPIs”) 31 Mar 31 Mar KPI Definition Commentary 2024 2023 Financial NAV per share (p) NAV divided by no. of shares outstanding as at 31 March 90.5p 101.5p NAV has decreased compared with the prior year due to global increases in r
Slide 32: SEEIT: Foreign exchange hedging
SDCL E nergy Efficiency Income Trust p lc SEEIT: Foreign exchange hedging Key objective of managing FX risk is to minimise volatility in NAV from movements in FX rates SEEIT’s hedging strategy has been successful in protecting the NAV from material movements in foreign exchange rates, and providing
Slide 33: SEEIT targets progressive dividends
SDCL E nergy Efficiency Income Trust p lc SEEIT targets progressive dividends Dividends per share have grown year-on-year since IPO Key Comments Dividends declared per Share since IPO 1 Target of 6.32p for FY25 ▪ Dividends have progressively increased each year, in line with guidance provided at IPO
Slide 34: Important notice
SDCL E nergy Efficiency Income Trust p lc Important notice THIS PRESENTATION IS BE ING PROVIDED TO YOU SOLEL Y FOR YOUR INFO RMATION. THIS PRESENTATION IS NOT FO R PUBLICA TION OR DISTRIBUTION, DIRE CTLY OR INDIRECTL Y, IN WHOLE OR IN PART, INTO OR WITHIN CANADA, A USTRALIA, JAPAN OR THE REP UBL IC
Slide 35: Important notice
SDCL E nergy Efficiency Income Trust p lc Important notice This pr ese nta tion do es not co nstitute o r form part of an y offe r for sale or su bscription or an y solicitation of a ny offer tobuy or subscr ibe for an y secu ritie s and neither this d ocu me nt nor an y part of it for ms th e b asi
SDCL Energy Efficiency Income Trust — FY2024 Earnings Presentation on 6ix