Adani Energy Solutions Ltd · NSE:ADANIENSOL
Adani Energy Solutions — Adani Transmission — Debt Investor Presentation (September 2020)
51 slides from Adani Energy Solutions's debt investor presentation, September 2020
Slide 1: Adani Transmission Limited Debt Presentation
Adani Transmission Limited Debt Presentation JP Morgan Debt Conference September 2020
Slide 2: Contents
CONTENTS 04-07 Adani Group 09-12 ATL – Company Profile 14-19 ATL Credit Story ATL: Key Highlights and Objectives of ADANI: World class infrastructure ATL: Manifesting Adani’s Infrastructure Capital Management Program 14 & utility portfolio 04 Excellence in T&D business 09 Case Study: Development, O&
Slide 3: Adani Group
adani Transmission
Slide 4: Adani Group: A world-class infrastructure and utility portfolio
2020 Adani Group: A world-class infrastructure and utility portfolio Adani Transport & Logistics Portfolio Adani Energy & Utility Portfolio Philosophical shift from B2B to B2C businesses – 63.5% 100% 75% 75% AGL – Gas distribution network to serve key APSEZ SRCPL ATL AGEL geographies across India Po
Slide 5: Adani: Repeatable, robust & proven model to deliver RoE
2020 Adani: Repeatable, robust & proven model to deliver RoE Development Operations Post Operations Phase Origination Site Development Construction Operation Capital Mgmt Analysis & market Site acquisition Engineering & design Life cycle O&M Redesigning the capital intelligence planning structure of
Slide 6: Adani: Repeatable, robust business model applied consistently to drive value
2020 Adani: Repeatable, robust business model applied consistently to drive value Successfully applied across Infrastructure & utility platform Development at large scale & within time and budget India’s Largest Longest Private HVDC 648 MW Ultra Mega Solar Largest Single Location Commercial Port Lin
Slide 7: ATL: A platform well-positioned to leverage growth opportunities in T&D business
2020 ATL: A platform well-positioned to leverage growth opportunities in T&D business Execution Prowess Strategic Presence Healthy pool mix Transmission Network of Transmission - Present in 9 states Development with 21 transmission lines Transmission (FY20): 14,814 ckms1; 52% of EBITDA - Central poo
Slide 8: ATL – Profile
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission ATL – Profile 14
Slide 9: ATL: Manifesting Adani's Infrastructure Excellence in T&D business
2020 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
Slide 10: ATL at a Glance
2020 ATL at a Glance 100%1 Contracted Assets Integrated Utility 100% 100% 74.9% 25.1% Contractual Qatar Investment Wholesale Consumer Authority (QIA) TBCB Assets ROA Assets ROA Asset 12 Operating TBCB(1) and 9 Under- 4 Operating Utility catering to construction Assets Transmission Assets 3 mn+ Conne
Slide 11: Contracted Assets at a Glance
2020 Contracted Assets at a Glance Contracted Assets Key Characteristics TBCB Fixed (Section 63) Tariff 35 years + Life Asset Life of Asset Asset Base Fully- Op. EBITDA No. of Assets built (Rs. Bn) FY20 (Rs. Bn) Counterparty Network Pool 21 141 8 Stable Business Parameters Growth levers • Steady str
Slide 12: Integrated Utility at a Glance
2020 Integrated Utility at a Glance Qatar Investment Wholesale Utility Consumer Utility Authority (QIA) Wholesale Utility - Key Characteristics Key Characteristics Return on Assets Consumer (ROA -Section 62) 3.04 million Counterparty Consumers base Network 35 years + Type of Regulated Perpetual Coun
Slide 13: ATL Credit Story
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission Future Outlook ATL Credit Story 14
Slide 14: 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 88% in FY20 De-risking to
Slide 15: 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 16: AEML (Integrated Utility): 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 17: 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 As of As of 31st Mar 16 31st Mar 20 Refinancing risk minimised1 Consolidated US$ 1,191 mn US$ 2,130 mn Net Debt US$ 44.8 mn of debt (<1 year) vs. FFO of US$ 263.5 mn (FY20) Cost of Debt 12% 12% 10.9% 9.3%
Slide 18: ATL: Debt Evolution and Key Ratios
ATL: Debt Evolution and Key Ratios Net Debt(1) Debt composition1 Key Ratios (Rs. Bn) 9 46 Fully-hedged 4.7 debt 4.3 ECB 10% dollarization Loans/NCD 90% 3.3 US$ Bond 90% Loans/NCD 9% 172 2.1 2.3 152 ECB 1% 2.1 1.6 1.3 1.4 1.3 1.3 1.2 FY16 FY20 FY18 FY19 FY20 Fixed Asset Coverage Ratio March 19 March
Slide 19: ATL: Reduced Development and Capex risk with High Credit Discipline and no Equity Dilution
ATL: Reduced Development and Capex risk with High Credit Discipline and no Equity Dilution Self-funded contracted growth model with low capital risk FY16 FY20 Strict Credit Rating BBB-/Baa3 Covenant BBB-/Baa3 Significant Reduction in Greenfield Risk Management FY16 FY19 Capital Operating EBITDA US$
Slide 20: Business Update and Key initiatives
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission Business Update and Key initiatives 14
Slide 21: ATL: Business Update and Key initiatives
ATL: Business Update and Key initiatives Operational • Transmission business: Lines operating at greater than 99.5% availabilities and no adverse impact on billing. • Distribution business: Due to lockdown, power demand was down by ~25% driven by lower consumption from C&I consumers partly offset by
Slide 22: ESG
Adani Transmission Limited Debt Presentation | February 22020 020 Transmission ESG 08
Slide 23: ATL: ESG Performance FY20
2020 ATL: ESG Performance FY20 8 % ↓* 7.5 % ↓* 7.45 % * 1.835 MW Auxiliary Power Scope 1 Emission Solar Power Generation Solar Panel Consumption 3187008 TCo2e 2.73 MUs 346.53MUs 6.23 % ↓* 31.62 % ↓* 1.23 Million 195.4 Ha - Afforestation Trees planted Cumulative Mangrove Fresh Water Withdrawal Hazard
Slide 24: ATL: Integrated ESG Framework for enhanced value creation
2020 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
Slide 25: ATL: Key ESG Metrics and Initiatives
2020 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
Slide 26: ATL: Environment awareness and Initiatives
2020 ATL: 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 – Ra
Slide 27: AEML: Initiatives towards reduction of carbon footprint
2020 AEML: Initiatives towards reduction of carbon footprint Renewable Power Climate Awareness Targeted 30% of consumption from Renewable sources Environmentally compliant generation at ADTPS Committed to increasing share of renewable power procurement from current 3% to 30% by 2023 and 50% by 2025
Slide 28: ATL: Governance – Journey so far and future glide path
2020 ATL: 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
Slide 29: Global Benchmarking: Adani Utility Portfolio vs. Global Utility peers
2020 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 % (FY20/CY20 / Fully-built)* EV/EBITDA (1 year Fwd / Fully-built)* 8.4# 53% 17.3 7.7 48% 42% 42
Slide 30: Global Benchmarking: Regulatory Framework
2020 Global Benchmarking: Regulatory Framework Regulatory return (ROA) framework for transmission players across geographies Key Highlights 14.0% Equity portion 12.0% doesn’t depreciate ATL’s rate of return will WACC/Rate of return 10.50% 10.0% normalize over the period as 7.80% 7.60% 8.00%# our ass
Slide 31: ATL: Compelling Investment Case
ATL: Compelling Investment Case Why Invest in Adani Transmission? Stable & • Predictable cash flow with contracted and regulated business predictable cash- • Long term concession life (~35 years); ~52% sovereign-rated counterparties as of FY20 flows World-class • High and predictable line availabili
Slide 32: Outlook
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission Outlook 14
Slide 33: ATL: Outlook
ATL: Outlook Economic Outlook Operations Outlook • No major deviation in relation to guidance given by ATL and • Situation is progressively improving with relaxation in AEML with regards to financial and operational performance lockdown • Consistent performance across assets with ~ 99.8% • Indian an
Slide 34: 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 and any unpredictable scenario avenues: • Fully covered in-terms of debt servicing fo
Slide 35: Regulatory Landscape
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission Regulatory Landscape 08
Slide 36: ATL: 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 37: Annexure
Adani Transmission Limited Debt Presentation | February 22020 020 Transmission Annexure 22
Slide 38: ATL: Emulating Group's Core Infra Philosophy at every phase
2020 ATL: Emulating Group’s Core Infra Philosophy at every phase Development Operations Post Operations Phase Origination Construction O&M and Technology Consumer Engagement Capital Mgmt Return based disciplined In-house tailor-made Remote operation of pan- Time-bound Consumer No Liquidity Risk: Ten
Slide 39: Adani: World-class Credit Portfolio Attracting Global Investors
2020 Adani: World-class Credit Portfolio Attracting Global Investors Size (USD Mn.) Coupon Price Current Yield* Energy & Utility Portfolio Company Issue date Issue Size (USD Mn.) Coupon Average Maturity DTDAverage DebtMaturity structure DTD Debt Ratings structure Transmission & Distribution AEML Jan
Slide 40: ATL: Capital Management Program Demonstrating Global Excellence
2020 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 FY20 Operational EBITDA (USD mn) 237 84 255 Tenor 10 year 16.5 year 30 year 10 year Issue size (USD mn) US$ 500 mn US$ 500 mn US$
Slide 41: ATL is rated Investment Grade from FY16 and beyond
2020 ATL is rated Investment Grade from FY16 and beyond International- Obligor Group Rating Agency Facility Rating/Outlook Fitch Dollar Bond BBB-/Negative S&P Dollar Bond BBB-/Stable Moody’s Dollar Bond Baa3/Negative SPV Ratings - Domestic International – USPP Company Rating Agency Rating Outlook Ra
Slide 42: ATL – Asset Portfolio and Financial Highlights
Adani Transmission Limited Debt Presentation | February 2 0 2 0 Transmission ATL – Asset Portfolio and Financial Highlights 14
Slide 43: ATL's Evolution and Operational Portfolio
2020 ATL’s Evolution and Operational Portfolio ATL’s Transmission Network (ckt km) has grown 2.7x Adani Transmission Limited in 3 years; and Distribution business acquired in FY19 ATL’s “Grid-to-Switch” Integrated Platform 100% 100% 75% 100% 100% 100% 100% 100% 100% 100% 100% ATSCL & WTGL, PPP ATIL
Slide 44: ATL: Locked-in Growth from Under-construction TBCB Projects
2020 ATL: Locked-in Growth from Under-construction TBCB Projects Adani Transmission Limited 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Ghatam- Obra-C WRSS – Bikaner - Lakadia Kharghar NKTL Jam Kham- FBTL Banas- HVDC# pur Badaun XXI (A) Khetri baliya - Vikhroli kantha North Fategarh Ghata
Slide 45: ATL: Q1FY21 Operational Highlights - Snapshot
ATL: Q1FY21 Operational Highlights - Snapshot Transmission Distribution Network Distribution Availability Consumers length Losses • ATL maintained high level Q1FY21 of system availability and 99.90% 14,814 ckt km 3.05 million 13.47% supply reliability • Distribution losses Q1FY20 99.93% 14,217 ckt k
Slide 46: ATL: Q1FY21 Financial Highlights - Snapshot
ATL: Q1FY21 Financial Highlights - Snapshot Consolidated Transmission Distribution Q1FY21 Q1FY20 Q1FY21 Q1FY20 Q1FY21 Q1FY20 While the transmission business performance is Operating insulated from Covid Revenue 2,117 2,858 680 668 1,437 2,189 disruptions, Distribution business saw drop in revenue dr
Slide 47: ATL: Revenue and EBITDA trend (FY18-FY20)
2020 ATL: Revenue and EBITDA trend (FY18-FY20) (In Rs. Crores) Operating Revenue performance Operating EBITDA performance Transmission Distribution 10,237 Transmission Distribution Margin 92% 24% 4,287 6,530(1) 91% 19% 7,532 1,805 2,857(1) 91% 3,944 806 4,270 1,944 2,482 3,944 2,051 1,944 2,704 2,26
Slide 48: ATL OG - Profit and Loss Summary (FY17-FY20)
2020 ATL OG - Profit and Loss Summary (FY17-FY20) Particulars (US$ mn) FY20 FY19 FY18 FY17 Revenue from Operations 281 264 451 311 Revenue from sale of 119 127 113 traded goods 121 Other Income 37 32 21 12 Finance Costs 112 106 126 139 Depreciation & Amortization 80 80 87 84 Purchase of stock-in-tra
Slide 49: ATL OG - Balance Sheet (FY17-FY20)
2020 ATL OG - Balance Sheet (FY17-FY20) Particulars (US$ mn) FY20 FY19 FY18 FY17 Tangible Assets 1,071 1,158 1,341 1,371 Long-Term Loans and Advances 20 23 19 17 Other Non-current Assets 797 884 699 87 Cash and Bank Balances 167 29 88 56 Other Current Assets 357 236 174 235 Total Assets 2,412 2,330
Slide 50: Thank You
adani Transmission Thank You -¢
Slide 51: Legal Disclaimer
2020 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 sole
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