Aquila European Renewables Plc Registered · LSE:AERI
Aquila European Renewables Plc Registered — Aquila European Renewables — H1 2024 Earnings Presentation
33 slides from Aquila European Renewables Plc Registered's earnings presentation, 2024
Slide 1: Aquila European Renewables Plc 1H24 Results
AQUILA EUROPEAN RENEWABLES PLC 1H24 Results © 2024 Aquila Capital Sagres, Portugal
Slide 2: Table of Contents
TABLE OF CONTENTS 1. Introduction 2. Portfolio 3. Financial and Operating Performance 4. Valuation and Power Prices 5. Conclusion 6. Appendix © 2024 Aquila Capital 2
Slide 3: Overview of Aquila European Renewables Plc (AER)
OVERVIEW OF AQUILA EUROPEAN RENEWABLES PLC (“AER”) 464 MW Operating Portfolio European Focused, Presence in 6 Countries Key Metrics 5.2% Market capitalisation1 EUR 245.4 million Net Asset Value (“NAV”) EUR 335.5 million 45.9% Discount to NAV2 (26.9%) 48.9% Dividend yield3 8.9% Total NAV return since
Slide 4: Highlights
HIGHLIGHTS KPIs (EUR cents, unless stated otherwise) 1H24 1H23 Dividend per share1 2.9 2.8 NAV per share 88.7 104.1 Total NAV return per share (%)2 (7.1%) (3.5%) − Total underlying earnings of EUR 9.7 million (1H23: EUR 12.8 million) − Dividend cover of 0.9x after debt amortisation (1H23: 1.2x). 1.4
Slide 5: Board Review of Options and Discontinuation Vote
BOARD REVIEW OF OPTIONS AND DISCONTINUATION VOTE UPDATE POST AGM VOTE COMPANY UPDATE COMPANY UPDATE Restatement of Indications of interest A proposal from a Takeover Code commitment to explore received from multiple parties Offeror for the acquisition of the different initiatives to engage in a pote
Slide 6: Track Record of Dividend Growth and Returning Capital to Shareholders
TRACK RECORD OF DIVIDEND GROWTH AND RETURNING CAPITAL TO SHAREHOLDERS Dividends per share since IPO +5.0% +5.0% 5.79 cents per share +5.0% dividend target1 for 2024 1 5.79 5.25 5.51 5.00 4.00 5% annual growth in dividend per share since 2021 1.50 2.90 ~EUR 106 million capital returned to shareholder
Slide 7: Environmental, Social and Governance Highlights
ENVIRONMENTAL, SOCIAL AND GOVERNANCE HIGHLIGHTS Households supplied with green Tonnes of CO2 emissions avoided energy annually 1H24 1H23 1H24 1H23 AER1 144.3k 133.9k 145.3k 134.8k Aquila Capital 2,260k2 2,036k3 2,350k2 2,232k3 − Release of the Company’s inaugural ESG report in January 20244 − Variou
Slide 8: Table of Contents
TABLE OF CONTENTS 1. Introduction 2. Portfolio 3. Financial and Operating Performance 4. Valuation and Power Prices 5. Conclusion 6. Appendix © 2024 Aquila Capital 8
Slide 9: Portfolio Snapshot
PORTFOLIO SNAPSHOT Key Statistics (30 June 2024)1 The Rock Olhava 464 MW 12 Total capacity Investments Wind energy Solar PV Tesla 6 ~29 Countries and Power Remaining asset life Hydropower Markets (years)2 Holmen II Svindbaek I+II 53% 36% Contracted revenue3 Leverage4 Portfolio Allocation by Technolo
Slide 10: Contracted Revenue Base
CONTRACTED REVENUE BASE 1 Present Value of Contracted vs. Non-Contracted Revenue Revenue Mix (5 Years)2 100% 90% Aquila will proactively seek to replace expired PPA / tariff contracts over time 24.6% 46.8% in order to maintain a high degree of contracted revenues 80% 70% Market 60% 50% Government 40
Slide 11: Table of Contents
TABLE OF CONTENTS 1. Introduction 2. Portfolio 3. Financial and Operating Performance 4. Valuation and Power Prices 5. Conclusion 6. Appendix © 2024 Aquila Capital 11
Slide 12: Production and Revenue
PRODUCTION AND REVENUE Technology Country Electricity Production (AER Share, GWh) Total Revenue1 (AER Share, EUR million) 1H24 1H23 Variance (%) 1H24 1H23 Variance (%) Denmark, Finland, Wind 279.8 260.5 7.4% 16.3 16.9 (3.6%) Norway, Greece Solar PV Portugal, Spain 190.9 195.1 (2.1%) 9.2 11.1 (17.7%)
Slide 13: Dividend Cover
DIVIDEND COVER Variance Dividend Cover (EUR million)1 1H24 1H23 (%) Commentary Asset income 30.2 31.5 (4.1%) − 1H24 dividend cover of 0.9x (1.4x before debt amortisation) Asset operating costs (8.2) (7.9) 4.9% − Higher production levels compared to 1H23, offset by lower prices Interest and tax (3.6)
Slide 14: Table of Contents
TABLE OF CONTENTS 1. Introduction 2. Portfolio 3. Financial and Operating Performance 4. Valuation and Power Prices 5. Conclusion 6. Appendix © 2024 Aquila Capital 14
Slide 15: 2024 Net Asset Valuation Bridge
2024 NET ASSET VALUATION BRIDGE Net Asset Value Bridge (EUR million) − 1H24 NAV –9.9% or –9.8 cents per share (total 372.5 NAV return of –7.1% including dividends) − Sharp decrease in Guarantees of Origin 6.2 50.9 335.5 (“GoO”s) (-5.8 cents) − Decrease in European (especially Iberian) (10.7) (0.7) s
Slide 16: Power Price Developments
POWER PRICE DEVELOPMENTS Electricity Spot Prices (EUR / MWh)1 Nordstream cuts and summer energy crisis. Nordics Spain 500 Spain spot does not reflect this in the price of gas as a gas cap for power generation 450 was enacted Further fall in spot prices during Q4 ’23 / 1H24: 400 Spot fall following:
Slide 17: Power Price Forecasts (Real, 2024)
POWER PRICE FORECASTS (REAL, 2024) Weighted Average Price Electricity Price Forecasts (Weighted Average, EUR / MWh)1 2024 – 2028 2029 – 2033 2034 – 2050 (EUR / MWh)2 75.0 Nordic Wind 49.5 58.3 48.1 50.0 EUR / MWh Iberian Solar 48.7 45.5 42.0 25.0 0.0 2024 2027 2030 2033 2036 2039 2042 2045 2048 Port
Slide 18: Table of Contents
TABLE OF CONTENTS 1. Introduction 2. Portfolio 3. Financial and Operating Performance 4. Valuation and Power Prices 5. Conclusion 6. Appendix © 2024 Aquila Capital 18
Slide 19: Modest Gearing Levels
MODEST GEARING LEVELS Debt Metrics 1H24 2023 Variance − Modest gearing of 36.3% at low interest rates (30 June 2024, EUR million)1 − EUR 5.3 million of project level debt repaid in 2024 from operating cash NAV 335.5 372.5 (9.9%) flow − In discussions with Olhava lender in relation a debt covenant br
Slide 20: Conclusion
CONCLUSION − Challenging operating conditions in 1H24 − Tesla sale at a 10.8%1 premium to net asset value, completion expected by October 2024 − Further deleveraging with RCF expected to be largely repaid following completion of Tesla sale − Sami appraisal case verdict due shortly − Shareholder cont
Slide 21: Table of Contents
TABLE OF CONTENTS 1. Introduction 2. Portfolio 3. Financial and Operating Performance 4. Valuation and Power Prices 5. Conclusion 6. Appendix © 2024 Aquila Capital 21
Slide 22: Portfolio Summary
PORTFOLIO SUMMARY Asset Life Equipment Energy Ownership Project Technology Country Capacity1 Status COD2 Offtaker Leverage4 Acquisition Date from COD Manufacturer Offtaker3 in Asset Tesla Wind energy Norway 150.0 MW Operational 2013, 2018 25y Nordex PPA Statkraft 25.9%6 24.3% July 2019 Sagres Hydrop
Slide 23: Power Prices, Inflation and NAV Sensitivities
POWER PRICES, INFLATION AND NAV SENSITIVITIES Impact on NAV (cents per share)1 NAV Sensitivities (cents per share) 2024 – 2028 2024 – 2033 Year Over Asset Life Power Prices (-/+10%) -11 11 (5 years) (10 years) 2 Production (P90/P10) -7 7 Power Prices +10.0% +2 +5 +11 Discount Rate (+/-0.5%) -5 5 -10
Slide 24: Portfolio Allocation
PORTFOLIO ALLOCATION 1 Technology Geography Asset Status Asset Age 19.2% 24.2% 19.2% 19.2% 100% 28.0% 2019 (IPO Year) 28.0% 80.8% 28.7% 52.9% Portugal Wind Finland < 5 years Hydro Denmark Operating 5 –10 years Solar PV Norway > 10 years Spain 5.2% Greece 7.1% 16.5% 19.2% 100% 37.5% 1H24 16.4% 16.1%
Slide 25: Valuation Assumption Benchmarking
VALUATION ASSUMPTION BENCHMARKING Asset life – Wind energy1 Asset life – Solar PV1 Long-term inflation1,2 Discount rate3 35 45 3.00% 10.0% 40 9.0% 30 2.50% 8.0% 35 25 7.0% 30 2.00% 6.0% 20 25 1.50% 5.0% 15 20 4.0% 15 1.00% 10 3.0% 10 2.0% 0.50% 5 5 1.0% 0 0 0.00% 0.0% Peer 1 Peer 2 Peer 3 Peer 4 Pee
Slide 26: Board of Directors
BOARD OF DIRECTORS Ian Nolan Dr. Patricia Rodrigues David MacLellan Kenneth MacRitchie Myrtle Dawes Non- Executive Chairman Chair of the Remuneration and Chair of the Audit and Risk Member of the Remuneration and Member of the Remuneration and Led the team which was recruited by Nomination Committee
Slide 27: Debt Summary
DEBT SUMMARY Drawn Debt Bullet / Project AER Share (EUR m)1 Currency Maturity Hedged % Type Amortisation as at 30 Jun 24 Tesla 25.9% 7.8 EUR Partly amortising Mar 2029 100.0% Bank Debt Sagres 18.0% 5.1 EUR Fully amortising Jun 2033 70.0% Bank Debt Dec 2030 / Olhava 100.0% 12.0 EUR Fully amortising 1
Slide 28: Structure
STRUCTURE Independent Board of Directors Ownership Shareholders 5 x Non-executive Board of Directors Relationship Service Providers Broker and Placing Agent: Deutsche Numis Investment Adviser: Company AIFM and Secretary: Aquila European FundRock Management Renewables Plc Company (Guernsey) Limited L
Slide 29: Key Terms
KEY TERMS Aquila European Renewables Plc Fund structure UK-domiciled closed-end investment company Listing Premium Segment of the London Stock Exchange and Euronext Growth Dublin Ticker / ISIN in EUR / SEDOL AERI / GB00BK6RLF66 / BK6RLF6 Ticker / ISIN in GBP / SEDOL AERS / GB00BK6RLF66 / BJMXQK1 Cur
Slide 30: Performance Summary Since IPO
PERFORMANCE SUMMARY SINCE IPO 2019 2020 2021 2022 2023 1H24 Market capitalisation (EUR million) 167 338 415 377 297 245 NAV (EUR million) 159 317 417 452 373 336 # investments 5 9 10 12 12 12 # countries 4 6 6 6 6 6 MW capacity (AER share) 133 198 229 414 464 464 Contracted revenue (%) 72.5% 73.9% 6
Slide 31: 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 32: 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 33: Contacts
CONTACTS AQUILA EUROPEAN RENEWABLES PLC Michael Anderson 6th Floor michael.anderson@aquila-capital.com 125 London Wall London EC2Y 5AS Christopher Gook +44 20 3327 9720 christopher.gook-extern@aquila-capital.com © 2024 Aquila Capital 33
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