NextEnergy Solar Fund Ltd · LSE:NESF
NextEnergy Solar Fund — H1 2022 Earnings Presentation
43 slides from NextEnergy Solar Fund's earnings presentation, November 2021
Slide 1: Interim Results Presentation
Period ended 30 September 2021 Interim Results Presentation
Slide 2: Speakers & contents
Speakers & contents • • • • • • • • • • •
Slide 3: Introduction to the NextEnergy Capital group
Introduction to the NextEnergy Capital group ▪ ▪ ▪ Investment Management Asset Management Development ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 4: Operating portfolio
Operating portfolio International (NextPower III portfolio) 895MW United Kingdom 539GWh Italy (Solis portfolio) 99 $50m
Slide 5: Interim financial highlights
Interim financial highlights ▪ £607m 103.1p 7.9% ▪ ▪ 3.58p 1.0x 7.16p ▪ 6.2% 26% 44%
Slide 6: Key interim period highlights
Key interim period highlights 7.16p £67m +4.6% £29m £100m +5 $50m 299,000 229,000 539GWh
Slide 7: Track record of operating outperformance
Track record of operating outperformance ▪ +1.1% £0.9m ▪ ▪ ▪ ▪
Slide 8: Portfolio growth and diversification since FY results
Portfolio growth and diversification since FY results 250MW 50MW 50MW 0.7MW $50m ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 9: NAV bridge (30 September 2021)
NAV bridge (30 September 2021) Ordinary NAV per share (p) 98.9p 103.1p
Slide 10: Portfolio bridge (30 September 2021)
Portfolio bridge (30 September 2021)
Slide 11: NAV sensitivities (30 September 2021)
NAV sensitivities (30 September 2021) NAV per share ▪ Discount rate (-/+ 0.5) Long term power price (-/+ 10%) ▪ Energy generation (-/+ 5%) Inflation (-/+ 0.5%) Operating costs (-/+ 10%)
Slide 12: Optimised capital structure
Optimised capital structure £190m Equity ◼ Preference shares ◼ £79m ◼ £14m ◼ ◼ £283m ◼ Financial debt facilities ◼ ◼ ◼ £86m ◼ ◼ ◼
Slide 13: Ordinary share dividends
Ordinary share dividends 1.0x 1.3x ▪ 8.0 7.05 7.16 (4) 6.65 6.87 7 years 7.0 6.31 6.42 6.25 6.0 5.25 (3) 5.0 (Pence) 4.0 3.0 7.16p 2.0 1.0 0.0 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22
Slide 14: Forecast power prices (real 2021)
Forecast power prices (real 2021) ▪ 125.0 115.0 105.0 95.0 NAV Mar 21 - Weighted Average (£/MWh) 85.0 Blended Power Curve (real 2021) 75.0 NAV Sep 21 - Weighted Average 65.0 Blended Power Curve (real 2021) 55.0 ▪ 45.0 35.0 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 ▪ 75.0 70.0 65.0 (€/MW
Slide 15: Protecting future cash flows
Protecting future cash flows 2021/22 2022/23 2023/24 2024/25 96% 75% 59% 18% Example: Hedging Strategy for Summer 2022 100.0 % Hedged 100% 95.3 ICE Forward Curve for S22 90.4 90% 90.0 89.7 Weighted Average Hedge Price 80% 80.0 Nominal Advisor Curve 70% ▪ Hedge Price 71.6 60% 70.0 £/MWh 64.7 50% ▪ 60
Slide 16: An impact ESG investment
An impact ESG investment ▪ ▪ ▪ ▪ ▪ 299,000 229,000 539GWh ▪
Slide 17: Strategic forward focus
Strategic forward focus £300m pipeline 1 Create growth and diversification - Expand NESF portfolio into international assets and battery storage ▪ ▪ 2 Enhanced dividend cover - Continue to strengthen dividend cover through future power price hedges ▪ ▪ 3 Drive asset performance - Continue NESF’s ope
Slide 18: NESF going forward
GuERNSE® GREEN NESF going forward Ml tl Positioned for growth ) Large diversified portfolio EY attractive dividend ocused on shareholder returns optimisation Focused on shareholder returns & NAV optimisati ZB conti i & Continuous asset management and portfolio outperformance oor Efficient balance sh
Slide 19: Q&A
Stalbridge solar farm: 5MW Dorset Q&A
Slide 20: Appendix
Kentishes: 5MW Essex Appendix
Slide 21: Introduction to NextEnergy Solar Fund
Introduction to NextEnergy Solar Fund NAV £607m GAV £1,087m NAV/share 103.1p
Slide 22: NESF group structure
NESF group structure INVESTMENT ADVISER Nectneray Coptal Umied SHAREHOLDERS INVESTMENT ! COMPANY SECRETARY & ADMINISTRATOR ‘Ape Fund and Corporate Services (Guersey ited INVESTMENT MANAGER NEXTENERGY SOLAR FUND LIMITED INVESTMENT (OTHER KEY SERVICE PROVIDERS & ADVISERS: Registra HOLDCOs INVESTMENT S
Slide 23: NESF board of directors
NESF board of directors • KEVIN LYON PATRICK FIRTH JO PEACEGOOD VIC HOLMES Chairman Non-executive Director Non-executive Director Senior Independent Director ▪ Kevin has over 30 years ▪ Patrick has almost 30 ▪ Jo has over 20 years of ▪ Vic has been involved in of experience in fund years' experience
Slide 24: Board of directors of the Investment Manager / AIFM
Board of directors of the Investment Manager / AIFM JOSEPH D’MELLO JEREMY THOMPSON CHARLOTTE DENTON Joseph has 30 years of Jeremy has over 30 years Charlotte has over 25 years experience as a chartered of multiple-sector experience in the global accountant. As Director of experience with a focus on
Slide 25: NextEnergy Capital Group – NESF investment committee
NextEnergy Capital Group – NESF investment committee MICHAEL BONTE- ALDO FRIEDHEIM GIULIA GUIDI ROSS GRIER BEOLCHINI Michael is Founding Partner Giulia is the Head of Ross is the UK Managing Aldo is Managing Partner and Group CEO of Environmental, Social and Director of NextEnergy and Chief Investme
Slide 26: Valuation of investment portfolio
Valuation of investment portfolio Discount rates (Remain unchanged as at 30 September 2021) ▪ 103.1p ▪ ▪ ▪ ▪ ▪ £607m Valuation movements were primarily driven by the following factors: ▪ ▪ ▪ £1,087m ▪
Slide 27: Ongoing Covid-19 response
Ongoing Covid-19 response ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 28: Long term debt repayment profile
Long term debt repayment profile ▪ ▪ ▪ £6 £5 £4 ▪ (£'m) £3 £2 £1 £0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Total Principal Repayment (Nominal) Total Interest Payment
Slide 29: Summary statement of comprehensive income
Summary statement of comprehensive income £29.9m 7.74p 2021 2020 Income Statement for the six months ended 30 September £m £m Income 29.9 32.6 Movement in Investment Portfolio value 23.5 (0.9) Total net Income 53.4 31.7 Total expenses (8.0) (8.0) Profit/(loss) and comprehensive income/(loss) 45.5 23
Slide 30: Financial debt outstanding (30 September 2021)
Financial debt outstanding (30 September 2021) 26% 44% ▪ ▪ ▪ ▪
Slide 31: Investment portfolio diversification (30 September 2021)
Investment portfolio diversification (30 September 2021)
Slide 32: Historical power prices (12 months)
Historical power prices (12 months) ▪ ▪ ▪ ▪
Slide 33: The Italian Solis portfolio
The Italian Solis portfolio ▪ Business Case: Solis Acquisition and performance ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 34: Preference shares
Preference shares ▪ ▪ ▪ ▪ ▪ ▪ ▪ Alternative Funding Sources - Comparison of Fully-Costed Cost of Capital ▪
Slide 35: Investment policy limits
Investment policy limits ▪ • 0.3% of GAV currently Investment Objective Technological Limit invested ▪ Private Equity Limit ▪ • 3.2% of GAV currently invested ▪ • 13.9% of GAV currently invested non-UK Geographical Limit ▪ • 0.5% of GAV currently invested outside OECD through NPIII ▪ • Currently con
Slide 36: NEC’s mission and sustainability framework
NEC’s mission and sustainability framework ▪ ▪ ▪ ▪ ▪
Slide 37: NEC sustainable investment: policy & commitments
NEC sustainable investment: policy & commitments ▪ ▪ Publicly available ▪ leadership groups SDFR best practice ▪ Principles and Commitments ▪ ▪ ▪ abide by ▪ them climate change TCFD ▪ biodiversity human rights ▪ Integration
Slide 38: ESG integration into the NESF investment process
ESG integration into the NESF investment process ▪ ▪ ▪ ▪ Supply Chain DDQ
Slide 39: 5-year track record
i 5-year track record | months | Year Ended 31 March H ended 30 H \ September | Financial Key Performance Indicators 2017 2018 2019 2020 2021 1 2021 H Ordinary shares in issue 456.4m 575.7m 58L.7m 584.2m 586.9m H 588.2m i Ordinary share price 110.5p 111.0p 117.5p 101.5p 99.6p H 99.8p H Market capita
Slide 40: Solar growth potential
Solar growth potential Predicted global solar capacity growth, 2019 and 2050 Renewables predicted to be main energy source in future 832GW 7,749GW 2019 2050 Global installed capacity mix, 2019 and 2050 What will drive this demand? ▪ Immediate need to address global climate change ▪ Increase in globa
Slide 41: The NextEnergy Foundation and selected projects
The NextEnergy Foundation and selected projects NESF has donated USA UNITED KINGDOM ITALY a total of £130,00 SYRIA ▪ INDIA JORDAN AFGHANISTAN PAKHISTAN NEPAL ▪ SIERRA LEONE RWANDA ETHIOPIA COLOMBIA GHANA ▪ KENYA PERU NIGERIA UGANDA ZAMBIA THE ANDES TANZANIA ▪ ZIMBABWE MALAWI
Slide 42: NESF investment case - detail
NESF investment case - detail
Slide 43: Important notice
Important notice This document is issued by Next Energy Capital Limited (“NEC”), which is authorised and regulated by the UK Financial Conduct Authority (“FCA”) with registered number 471192. The contents of this document are strictly private and confidential and accordingly may not be published, re
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