Renewables Infrastructure Group Limited GBP Red.Shs · LSE:TRIG
Renewables Infrastructure Group Limited GBP Red.Shs — The Renewables Infrastructure Group — Investor Presentation (March 2019)
48 slides from Renewables Infrastructure Group Limited GBP Red.Shs's investor presentation, March 2019
Slide 1: Investor Update / Share Issuance Programme March 2019
The Renewables Infrastructure Group Investor Update / Share Issuance Programme March 2019 Generating Sustainable Value. trig-ltd.com
Slide 2: Contents
Contents Section Slide Introduction 3 Proposed New Equity Issue 4 Acquisitions 7 Portfolio and Operations 15 2018 Financials 21 Concluding Remarks 26 Appendices 28 Contacts / Important Information 48 2 trig-ltd.com
Slide 3: Introduction
Introduction A leading London-listed renewables investment company TRIG is invested in 63 wind, solar and battery projects in the UK & Europe, with 1,323MW of power output capacity London-listed investment company (IPO in 2013) established in Guernsey with an independent board of non-executive d
Slide 4: Proposed New Equity Issue
Proposed New Equity Issue Launch of 2019 Share Issuance Programme ▲ March 2019: Initial Issue of up to 150m shares (to raise Benefits of the Issue £171m gross proceeds)1 All Shareholders (existing and new) ▲ 114p initial issue price per ordinary share ▲ Repayment of revolving acquisition facility pr
Slide 5: Timetable for March 2019 Share Issuance
Timetable for March 2019 Share Issuance Prospectus published 7 March Latest time and date for applications under the 11am, Tue 26 March Offer, Offer for Subscription and Intermediaries Offer Extraordinary General Meeting 10am, Wed 27 March Latest time and date for orders under the Placing 3pm, Wed 2
Slide 6: Financial Highlights – 2018
Financial Highlights – 2018 Strong NAV and earnings growth ▲ 31 December 2018 NAV per share: 108.9p (Dec 2017: 103.6p) (28 February 2019: NAV per share: 111.6p)1 ▲ Earnings per share: 11.7p (2017: 9.8p) ▲ Investment Commitments totalling £348m ▲ New equity raised of £236m ▲ NAV total return2: 11.6%
Slide 7: Additions to the Portfolio
Additions to the Portfolio 500 MW of incremental capacity since Jan 2018 Date Project Technology Location Revenue Net Total Total Future Acquired Type2 Capacity Consideration Invested Commitments (MW) (£m) to date (£m) (£m) Jan 2018 Clahane Onshore Wind Ireland FiT 55.0 £64.4 £64.4 - May 2018 Rosièr
Slide 8: Growth & Funding
Growth & Funding Enhancing diversification & scale advantages Equity Issuance Portfolio Evolution ▲ £236m raised over 2018 Feb 2019 Dec 2018 Dec 2017 Dec 2016 ▲ Share Issuance programme launched for 2019 Projects 63 62 57 53 Net capacity 1,323MW 1,110MW 821MW 710MW Revolving Acquisition Facility Por
Slide 9: Nordic Renewables Market Fundamentals
Nordic Renewables Market Fundamentals Growth market Nordic market - forecast generation and capacity in GW1 ▲ Broad political support for renewables, low 120 regulatory risk (largely un-subsidised) 100 5 7 8 ▲ Significant wind development expected: 7 7 80 12 7 28 o ambitious renewable targets 7 16 2
Slide 10: Jädraås
Jädraås TRIG’s largest investment to date acquired on 28 February 2019 ▲ Acquisition of 100% interest in a 212.85MW wind farm located in Eastern Sweden, due to complete pre-Initial Admission Ersträsk ▲ Acquired from Arise AB & Platina for €206.6m/£177.2m Sweden ▲ Operational since May 2013 Jädraås S
Slide 11: Ersträsk
Ersträsk First investment in Nordics, enhancing diversification ▲ Dec 2018, acquisition of 75% interest in a 229.1MW 1 wind farm in Northern Sweden from Enercon ▲ Payments made on completion of phases – no construction risk Capacity1 Completion Consideration Phase 1 61 MW Feb 2019 £46m Phase 2 168 M
Slide 12: Market Developments: Asset Lives
Market Developments: Asset Lives Asset life assumption increased to 29 years for wind portfolio ▲ TRIG’s approach is to consider asset lives on a project-by-project basis, taking into account expectations on: o Structural durability o Likelihood of obtaining planning and lease extensions where neede
Slide 13: Market Developments: Offshore Wind
Market Developments: Offshore Wind Offshore Wind market has matured rapidly Offshore wind ▲ The offshore wind industry has matured significantly, to the point where The Board intends to put a proposal to risks are viewed as comparable with onshore wind. shareholders at the AGM in May to amend the in
Slide 14: Market Developments: Market Evolution
Market Developments: Market Evolution Grid parity altering the shape of the European renewables market Maintaining technological diversification ▲ Falling costs mean that solar (as well as wind) can be viable without subsidies in the best locations – moving the investment focus from subsidies to und
Slide 15: Portfolio Operations
Portfolio Operations Altahullion, N. Ireland trig-ltd.com
Slide 16: Operational Overview
Operational Overview Diversified portfolio delivers strong performance despite low wind levels 2018 generation: 2,011 GWh1 Operational Highlights ▲ Portfolio continues to perform well ▲ Clahane extension, Rosières & Montigny, and Broxburn construction successfully completed ▲ 14% increase over 2017
Slide 17: Operational Detail
Operational Detail Diversification sustaining performance close to long-term expectations Electricity Performance vs. P50 Technology Region production (GWh) estimates 2018 2018 2017 ▲ Good UK wind generation relative to Wind GB 1,301 -4.2% +5.6% available resource NI & ROI 322 -5.3% -5.1% ▲ Benefits
Slide 18: Optimising Asset Performance
Optimising Asset Performance Active targeting of value-enhancing initiatives Technical Increasing the amount of energy produced & reducing associated costs ▲ Solar works performed over winter months, with enhanced monitoring ▲ Turbine uprating ▲ Utilising strategic spares held on site to minimise do
Slide 19: Environment, Social & Governance
Environment, Social & Governance A commitment to responsible investing TRIG and the Environment Minimising impact on the local and global environment ▲100% Renewable energy generator, committed to environmental sustainability ▲Powering 650,000 homes, avoiding 550,000 tonnes of CO 2 emissions annuall
Slide 20: Brexit Preparedness
Brexit Preparedness Brexit expected to have low impact Major Brexit Risks Key Mitigants • Managers well resourced Workforce skills shortage • Wide range of subcontractors in place mitigates individual asset risks • All key suppliers reviewed for approach to anticipated challenges and Supply chain fa
Slide 21: 2018 Financials
2018 Financials Broxburn, Scotland trig-ltd.com
Slide 22: Portfolio Valuation Bridge
Portfolio Valuation Bridge Valuation improvement in the year to 31 December 2018 £1,400m £1,200m -98.5 6.1 23.3 99.2 14.0 143.4 £1,000m £800m 1,268.7 £600m 1,126.1 1,169.5 1,126.1 1,126.1 1,132.2 1,146.2 1,081.2 1,081.2 £400m £200m £m 31-Dec-17 New Cash Rebased Changes in Changes in Reductions in Ba
Slide 23: Valuation – Key Assumptions at Dec 2018
Valuation – Key Assumptions at 31 Dec 2018 As at 31 Dec 2018 As at 31 Dec 2017 Discount Rate Weighted average 7.6% 8.0% Power Prices Weighted by market Based on third party forecasts Based on third party forecasts (See power curve on slide 9) Inflation UK 2019: 3.20% (ROCs only) 2018: 3.40% (ROCs on
Slide 24: Summary of 2018 Financial Statements
Summary of 2018 Financial Statements Strong Results - NAV per share up 5.3p on good valuation gains Income Statement Balance Sheet Cash Flow Statement Year to 31 Year to 31 31 Dec 31 Dec Year to 31 Year to 31 Dec 2018 Dec 2017 2018 2017 Dec 2018 Dec 2017 £m £m £m2 £m £m £m Total operating Cash from
Slide 25: Concluding Remarks
Concluding Remarks Montigny, France trig-ltd.com
Slide 26: TRIG: Generating Sustainable Value
TRIG: Generating Sustainable Value Strong NAV growth, earnings and a positive outlook Excellent operational and financial results ▲ Strong cashflow on the back of high achieved power prices, good asset performance & diversification, despite poor wind resource ▲ Portfolio enhancement initiatives ongo
Slide 27: Appendices
Appendices Breeding Wader. Management Area
Slide 28: Portfolio
Portfolio 1,323MW net capacity / 63 projects (February 2019) By Technology1 By Jurisdiction / Power market 1,2 1. Segmentation by portfolio value, including Jadraas and Phase 1 of Ersträsk 28 2. Northern Ireland and the Republic of Ireland form a Single Electricity Market, distinct from that operati
Slide 29: Revenue Profile
Revenue Profile Medium-term project-level revenues retain a material fixed element Project Revenue by Type PPA Market Revenue Fixed and hedged 26% PPAs, CfDs & FiTs 32% Next 12 Months1 PPA Market Revenue at Floor 7% ROC Recycle and Other 4% Indexed ROC Buyout 31% Split of Project Revenues by Contrac
Slide 30: Constructing a Balanced Portfolio
Constructing a Balanced Portfolio Understanding the range of revenue types available Range of Revenue Options within a balanced portfolio ▲ FiT & CFD contracts (France, Ireland, UK) typically have subsidy revenues of 15 years then market FiT/CfD UK ROC Unsubsidised revenues for the balance of a proj
Slide 31: Power price sensitivity unchanged from 2018 acquisitions
Power price sensitivity unchanged from 2018 acquisitions Incorporating subsidy free projects without increasing portfolio sensitivity Impact on equity return of a 10% change in power price¹ -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% ▲ Acquisitions in 2018 comprised a range of Fit, CfD and unsubsidised pr
Slide 32: Currency Exposure
Currency Exposure Hedges dampen currency exposure Portfolio by country1 ▲ TRIG is a sterling denominated investment company. Direct exposure from non-UK investments: ▲ Policy is to hedge at least 50% of the balance sheet value of non-sterling assets: o Forward sale of expected euro receipts for next
Slide 33: Debt Structure at December 2018
Debt Structure at 31 December 2018 Disciplined approach Term Project Debt Gearing1 TRIG’s portfolio at 31/12/2018 ▲ Limited to 50% of portfolio enterprise value Project Category typically (Younger = <10yrs) Average % of # of available gearing1 portfolio projects2 ▲ Fully amortising within the subsid
Slide 34: NAV sensitivities
NAV sensitivities Based on portfolio at 28 February 20191 -300.0p -200.0p -100.0p 0.0p 100.0p 200.0p 300.0p Discount rate +/- 0.5% -3.6p 3.9p Output P90 / P10 (10 year) -12.3p 11.8p Power price -/+ 10% -8.6p 8.5p Inflation -/+ 0.5% -4.9p 5.3p Operating costs +/- 10% -4.3p 4.3p Exchange rate -/+ 10%
Slide 35: Counterparty Exposure at December 2018
Counterparty Exposure at 31 December 2018 Broad spread of counterparties monitored regularly Electricity off-takers Equipment manufacturers2 Maintenance suppliers3 40% 7 Number of associated projects 13 % of Portfolio Valuation of associated projects¹ % of Portfolio Valuation 30% 7 13 20% 2 5 13 4 1
Slide 36: Dividend Track Record
Dividend Track Record Aggregate dividend target of 6.64p per share for 2019 Annual Interim dividends Period dividends per Payment timing per share share Q4 2019 1.66p Target 3/2020 Q3 2019 Target 6.64p 1.66p Target 12/2019 Annual Dividend Per Share Q2 2019 1.66p Target 9/2019 6.80p Q1 2019 1.66p Tar
Slide 37: Renewables continue to see strong policy support
Renewables continue to see strong policy support …… ▲ Policy support is strong: ▪ EU renewables 2030 target increased to 32% ▪ Paris 2015 commitments “ratcheting” ▪ UK support for clean energy; supported by labour and conservatives, not Brexit dependent Carbon emissions and carbon budget ▲ Sector’s
Slide 38: Scale of the Global Market for Renewables
Scale of the Global Market for Renewables Renewables is now mainstream Renewables as % of Global Power Capacity1 Global energy related CO2 emissions (Gt CO2)2 80% 35 76% 70% 30 60% 61% 25 50% 49% 49% 47% 20 43% 40% 37% 15 30% 20% 18% 10 14% 16% 11% 13% 10% 9% 10% 11% 8% 10% 5 7% 5% 6% 6% 0% 0 2012 2
Slide 39: Short-Run Marginal Cost Supply Curve (Merit Order)
Short-Run Marginal Cost Supply Curve (Merit Order) Gas-fired power tends to set the marginal price £/MWh Min. Demand Average Demand Max. Demand 100 80 Peaking plant 60 Coal Gas 40 Biomass & Interconnectors 20 Nuclear Renewables 0 0 10 20 30 40 50 60 70 80 Cumulative Capacity (GW) Note: Schematic onl
Slide 40: Constituents of Power Prices
Constituents of Power Prices Key elements: natural gas and carbon prices £/MWh, Real 2018 2020 2030 70 60 60 50 50 Scarcity uplift 40 Transmission charges and BSUoS Carbon price 30 Impact of Gas price Lower marginal cost production impact 20 10 0 -10 Note: Schematic only for illustration. 40 trig-lt
Slide 41: The Team
The Team Access to Experienced Management Independent Board Investment Manager Operations Manager Key roles: Key Roles: Helen Mahy CBE (Chair) Sourcing and approving new Providing operational management investments services for the portfolio Advising the Board on investment Implementing the
Slide 42: InfraRed Capital Partners – Investment Manager
InfraRed Capital Partners – Investment Manager Over 20 years’ pedigree in infrastructure London (Infrastructure and Real Estate) Seoul New York (Representative) Real asset expertise across infrastructure & real estate (Infrastructure) Hong Kong 25 years $12bn 17 (Real Estate) track record equity man
Slide 43: RES – Operations Manager
RES – Operations Manager 37+ years experience in renewables An experienced leader in the renewables industry 37 years 300 track record projects delivered worldwide 2000+ 16GW employees capacity developed / managed 300MW energy storage projects constructed or under contract The world’s largest inde
Slide 44: Board and Senior Management Team
Board and Senior Management Team Over 100 years of relevant experience on the TRIG Advisory Committee TRIG Independent Board Helen Jonathan Klaus Shelagh (Non-Executive) Mahy CBE Bridel Hammer Mason (Chairman) Investment matters Operational matters TRIG Investment Werner Chris Tony Jon Richard Commi
Slide 45: Key Facts
Key Facts Fund Structure ▲ Guernsey-domiciled closed-end investment company Performance ▲ Dividends to date paid as targeted for each period ▲ NAV per share 28 February 2019 of 111.6p Issue / Listing ▲ Premium listing of ordinary shares on the Main Market of ▲ Market Capitalisation c. £1.388bn (28 F
Slide 46: Contacts
Contacts Investment Manager Other Advisers InfraRed Capital Partners Limited Administrator / Company Secretary Registrar 12 Charles II Street London SW1Y 4QU Aztec Financial Services (Guernsey) Ltd Link Asset Services (Guernsey) Ltd East Wing Mont Crevelt House +44 (0)20 7484 1800 Trafalgar Court Bu
Slide 47: Important Information
Important Information By NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, SOUTH AFRICA, CANADA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION Genera
Slide 48: Important Information
Important Information Restriction on distribution The distribution of this document may, in certain jurisdictions, be restricted by law. Accordingly, by receiving this document, you represent that you are able to receive the document without contravention of any legal or regulatory restrictions appl
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