Aquila European Renewables Plc Registered · LSE:AERI
Aquila European Renewables Plc Registered — Aquila European Renewables Income Fund — FY2020 Earnings Presentation
47 slides from Aquila European Renewables Plc Registered's earnings presentation, Apr 19, 2021
Slide 1: Aquila European Renewables Income Fund Plc 2020 Results
Aquila European Renewables Income Fund Plc 2020 Results FOR PROFESSIONAL INVESTORS ONLY | CONFIDENTIAL | © 2021 AQUILA CAPITAL Generating Essential Investments1
Slide 2: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix FOR PROFESSIONAL INVESTORS ONLY | CONFIDENTIAL | © 2021 AQUILA CAPITAL 2
Slide 3: Portfolio Strategy & Targets
Aquila European Renewables Income Fund Plc (“AERIF”) Portfolio Strategy & Targets Diversification to Secure Income Technology Geography Contracted Revenue € 30 – 50% 30 – 50% 15 – 25% Continental Europe + Ireland ~70% fixed-price ✓ 5 cents per ordinary share ✓ Complimentary production seasonality ✓
Slide 4: Investment Adviser – Aquila Capital
Investment Adviser – Aquila Capital Investment and Asset Management Pipeline Asset Management Merchant Market Desk 53 professionals 31 professionals 13 professionals Deal sourcing, project development, portfolio Operations and maintenance of assets, technical PPA sourcing & structuring, energy & mar
Slide 5: Environmental, Social and Governance
Environmental, Social and Governance AERIF Contribution to the Green Economy1 Proactive ESG Initiatives − Sagres: recently rated by external ESG More than More than assessment, GRESB – scored 2nd in the annual GRESB asset assessment among 203,000 238,000 its peer group − Tesla: local community ski e
Slide 6: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix FOR PROFESSIONAL INVESTORS ONLY | CONFIDENTIAL | © 2021 AQUILA CAPITAL 6
Slide 7: Portfolio Snapshot
Portfolio Snapshot Key Statistics – 31 December 20201 9 31 Investments Operating assets2 2 6 projects under Countries construction 301 MW ~23 Operating capacity Remaining asset life (years)3 73.9% 26.3% Contracted revenue4 Leverage5 1Data based on AERIF share, where applicable. 2Sagres includes 21 s
Slide 8: Acquisitions – EUR 156 million closed in 2020
Acquisitions – EUR 156 million1 closed in 2020 Benfica III Desfina North Albeniz Svindbaek II The Rock Benfica III Albeniz Desfina Technology Wind Wind Solar Solar Wind Country Denmark Norway Portugal Spain Greece Capacity 10 MW 400 MW 19 MW 50 MWp 40 MW Status Operational Construction Operational C
Slide 9: Current Portfolio
Current Portfolio Project Technology Country Capacity1 Status COD2 Asset Equipment Energy Ownership Leverage4 Acquisition Life from Manufacturer Offtaker3 in Asset Date COD Tesla Wind energy Norway 150 MW Operational 2013, 2018 25y Nordex PPA / Spot 25.9%6 29.5% July 2019 Sagres Hydropower Portugal
Slide 10: Current Portfolio (cont’d)
Current Portfolio (cont’d) Wind Power Density – Nordics1 Hydrology – Iberia2 Our investment approach is to target opportunities in resource rich locations Solar Power Irradiation – Iberia3 Source: Global Wind Atlas (2020), Global Solar Atlas (2020), AEMET (2020). 1Mean wind power density. 2Average t
Slide 11: Portfolio Allocation
Portfolio Allocation1 Technology Geography Asset Status 6,6% 16,6% 13,9% Hydro 14,9% Portugal 21,7% Operating Norway 7,6% Solar PV Denmark Under construction Wind 25,2% Finland 11,1% 78,3% Spain 78,5% Greece 25,6% − AERIFs diversification goals are starting to materialise with further scale achieved
Slide 12: Attractive Contracted Revenue Base
Attractive Contracted Revenue Base Present Value of Contracted vs. Non- Revenue Mix – Existing Contracts Only Contracted Revenue (5 Years)2 100% 90% 19,2% 80% 70% 26,1% 60% 50% 40% 30% 20% 10% 54,7% 0% 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 3 Governmental regulated tariffs Fixed pric
Slide 13: Strong Counterparty Exposure
Strong Counterparty Exposure Asset Production Subject to a PPA or Government Regulated Tariff (GWh per Annum, 100% Interest)1,2 2.000 Alcoa & GIEK 1.800 1.600 1.400 1.200 1.000 Statkraft FiT 800 FiT FiP 600 FiP FiP 400 200 Statkraft Axpo 0 3 Benfica III Albeniz Svindbaek Holmen II Desfina Olhava Sag
Slide 14: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix FOR PROFESSIONAL INVESTORS ONLY | CONFIDENTIAL | © 2021 AQUILA CAPITAL 14
Slide 15: Highlights
Highlights 2020 Highlights 2020 KPIs − Demonstrated defensive performance during − Achieved 2020 dividend target Metric 2020 2019 challenging market conditions − 2020 dividend cover of approximately 1.1x (2.3x − 2020 power generation 6.5% above budget excl. asset level debt amortisation) Dividend pe
Slide 16: Track Record since IPO
Track Record since IPO Summary Capital Deployment (EUR m)1 − Further gains in scale achieved – aggregate investments of over EUR 300 220 million concluded since IPO 250 − Steady growth in capital deployed since IPO 200 − Dividend targets achieved in 2019 and 2020 150 − Transitioning to 5 cents per O
Slide 17: Asset Performance
Asset Performance 2020 Monthly Production Performance vs. Budget Production by Technology (AERIF Share) (AERIF Share, GWh) Technology Region1 Electricity Production (GWh)1 Variance 60,0 (2020 actual vs budget)3 2020 20192 50,0 40,0 Denmark, Finland, Wind 382.6 200.1 6.3% Norway, Greece 30,0 20,0 Hyd
Slide 18: Asset Performance (cont’d)
Asset Performance (cont’d) 2020 Daily Average Power Price1 EUR / MWh 100,0 90,0 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 Jan 20 Feb 20 Mrz 20 Apr 20 Mai 20 Jun 20 Jul 20 Aug 20 Sep 20 Okt 20 Nov 20 Dez 20 Nordpool Iberia Greece − Reduction in economic output led to a significant reduction in elec
Slide 19: Underlying Financial Performance
Underlying Financial Performance Asset Underlying Financial Performance (AERIF Share)1 − Expansion in production more than offset a significant reduction in wholesale power prices EUR m 2020 20192 ▪ Higher than budget production Production (GWh) 459.9 258.5 ▪ Contribution from new investments Averag
Slide 20: Summary Income Statement
Summary Income Statement EUR k FY20 FY19 (Loss)/gain on investments (3,959) 8,608 Net foreign exchange losses (12) (13) Interest income 6,194 1,609 Investment advisory fees (1,671) (654) Other expenses (1,340) (810) (Loss)/profit on ordinary activities before finance costs and taxation (788) 8,740 F
Slide 21: Summary Balance Sheet
Summary Balance Sheet EUR k FY20 FY19 Assets Cash 121,014 38,862 Trade and other receivables 5,763 1,927 Portfolio value 229,982 118,660 Liabilities Creditors (39,856) (532) Net assets 316,903 158,917 Net assets per Ordinary Share (cents) 99.96c 102.7c − Significant cash balance at end of year follo
Slide 22: Summary Cash Flow
Summary Cash Flow EUR k FY20 FY19 Operating activities Profit on ordinary activities before taxation (1,187) 8,541 Adjustment for unrealized losses / (gains) on investments 3,959 (8,608) Working capital adjustments (2,398) (1,395) Net cash flow from / (used) in operating activities 374 (1,462) Purch
Slide 23: Gearing and Liquidity (31 December 2020)
Gearing and Liquidity (31 December 2020) Key Debt Metrics (EUR m)1 Liquidity and Project Commitments (EUR m) Company level debt 0.0 Cash balance (excl. asset-level cash holdings) AERIF Plc 121.0 Asset level debt 113.0 Tesseract Holdings Limited 7.2 Total debt 113.0 Total cash balance 128.2 NAV 316.9
Slide 24: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix FOR PROFESSIONAL INVESTORS ONLY | CONFIDENTIAL | © 2021 AQUILA CAPITAL 24
Slide 25: Net Asset Valuation
Net Asset Valuation Net Asset Value Bridge (EUR m) 167.5 2.8 1.6 316.9 (5.6) (6.5) (1.9) (Loss)/gain on investments – EUR (4.0)m (refer slide 20) 158.9 (Loss)/profit on ordinary activities after taxation – EUR (1.2)m (refer slide 20) FY19 Raised capital Movement in Net profit / loss for Net profit /
Slide 26: Portfolio Valuation
Portfolio Valuation Portfolio Valuation Bridge (EUR m) Portfolio Value Split (EUR m) FY20 FY19 114.6 Tesla 25.4 28.0 Sagres 15.2 17.1 (2.7) Holmen II 21.5 24.3 2.7 228.5 (1.9) Olhava 25.3 25.6 (2.8) Svindbaek 37.0 24.4 119.5 (0.3) (0.5) The Rock 32.2 n/a Benfica III 16.7 n/a Albeniz 17.4 n/a FY19 Ac
Slide 27: Key Assumptions
Key Assumptions Metric FY20 FY19 Discount rate Weighted average 6.6% 7.6% Long-term inflation Weighted average 2.0% 2.0% Wind ~24 years ~22 years Remaining Asset life Hydropower ~13 years (Weighted Average)1 ~12 years Solar ~27 years n/a − More conservative power price curve forecast adopted in the
Slide 28: Discount Rate
Discount Rate Peer Discount Rate Benchmarking2 10 Year Government Bond Yields3 8% 5% 7% 4% 6% 3% 5% 2% 1% 4% 0% 3% -1% 2% -2% 1% Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20 May-20 Sep-20 0% Germany Denmark Norway Finland AERIF Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Portugal Spain Greece Grea
Slide 29: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix FOR PROFESSIONAL INVESTORS ONLY | CONFIDENTIAL | © 2021 AQUILA CAPITAL 29
Slide 30: Market Observations
Market Observations − Power prices AERIFs Response ▪ Prices across Europe continue to recover from COVID-19 ▪ COVID-19 impact was not homogenous across markets – benefits of diversification ✓ • Continue to target investment opportunities supported by high degree of contracted revenues with strong co
Slide 31: The Importance of Power Purchase Agreements
The Importance of Power Purchase Agreements PPAs are one of the main building blocks of any renewables investment − Decreasing levelized costs of energy1 and improved efficiencies mean that subsidies will become less relevant over time − Subsidies have a finite life – PPAs are an important mechanism
Slide 32: Conclusion
Conclusion 2020 performance Low risk, defensive asset portfolio − Robust performance despite challenging market − Diversification by location and technology conditions − High earnings visibility with contracted revenues − 2020 power generation 6.5% above budget − Attractive pipeline of investment op
Slide 33: Table of Contents
Table of Contents 1 Introduction 2 Portfolio 3 Financial and Operating Performance 4 Valuation 5 Conclusion 6 Appendix FOR PROFESSIONAL INVESTORS ONLY | CONFIDENTIAL | © 2021 AQUILA CAPITAL 33
Slide 34: Reconciliation – Income Statement
Reconciliation – Income Statement Aquila European Renewables Income Fund (AERIF Plc) Income Statement (EUR k) FY20 FY19 AERIF Plc 3 (Loss)/gain on investments (3,959) 8,608 Shareholder 1 2 Net foreign exchange losses (12) (13) Dividends Loans 1 Interest income 6,194 1,609 100% Tesseract Holdings 3 I
Slide 35: Reconciliation – Balance Sheet
Reconciliation – Balance Sheet Aquila European Renewables Income Fund (AERIF Plc) Balance Sheet (EUR k) FY20 FY19 AERIF Plc Assets Shareholder 1 Cash 121,014 38,862 Equity 2 Loans Trade and other receivables 5,763 1,927 100% 3 Portfolio value 229,982 118,660 Tesseract Holdings 3 Limited Liabilities
Slide 36: Reconciliation – Portfolio Value and NAV
Reconciliation – Portfolio Value and NAV EUR k FY20 FY19 Operating assets 181,211 118,660 Construction assets 48,771 - Fair value of investments 229,982 118,660 Cash 121,015 38,862 Total assets 350,996 157,522 Other assets and liabilities (34,093) 1,394 Net Asset Value 316,903 158,917 Ordinary Share
Slide 37: Asset Acquisition and Economic Transfer Dates
Asset Acquisition and Economic Transfer Dates Asset Acquisition Date Economic Transfer Date Tesla Jul 2019 Jan 2019 Sagres Jul 2019 Jan 2018 Holmen II Jul 2019 Jan 2019 Olhava Sep 2019 Aug 2019 Svindbaek I Dec 2019 Jan 2020 Svindbaek II Mar 2020 Jan 2020 The Rock Jun 2020 Jun 2020 Benfica III Oct 20
Slide 38: Net Asset Value Sensitivity
Net Asset Value Sensitivity Impact on NAV per Ordinary Share (31 December 2020) Power Prices (+/- 10%) Energy Yield (p10/p90 10 years) Inflation (+/- 0.5%) Discount Rate (+/- 0.5%) OpEx (+/- 10%) Asset Life (+/- 1 year) -10c -8c -6c -4c -2c 0c 2c 4c 6c 8c 10c Cents per Ordinary Share − Note the fina
Slide 39: Ourique - Solar PV in Portugal
Ourique - Solar PV in Portugal1 Capacity 62.1 MWp Status Operational Project ownership 50% Expected acquisition date April 2021 Acquisition price Undisclosed Indicative Portfolio Allocation by Technology – Post Ourique2 – Photovoltaic park in the south of Portugal – Attractive location with excellen
Slide 40: Pipeline Overview
Pipeline Overview 1 # Asset Country Capacity COD Initial remuneration Project status Technology (MW(p)) 1 Wind NOR 400 2021 PPA Managed by Aquila 2 Solar POR 145 2022-2023 PPA Managed by Aquila 3 Solar ESP 143 2021 PPA Managed by Aquila 4 Solar POR 70 2021 PPA Managed by Aquila 5 Solar ITA 48 2023 P
Slide 41: Aquila Group corporate credentials
Aquila Group corporate credentials Renewable energy Current renewables portfolio Installed and ESG5 of Aquila Capital in Europe6 developed capacity1 Hydropower Overall reduction of CO2 emissions in 2020 Onshore wind Wind energy 1.7m tonnes Solar PV 2,202 MW Offices >591 WTGs Green energy Produced in
Slide 42: Recap: Why was the Merchant Market Desk created?
Recap Why was the Merchant Market Desk created? PPA market is getting competitive Non-PPA products are becoming important – Our competitors are looking for PPAs in our target markets – Power exchanges try to substitute part of PPA market – Corporate buyers are becoming more professional – Cross-bord
Slide 43: Terms of the Fund
Terms of the Fund Aquila European Renewables Income Fund Plc Fund structure UK-domiciled closed-end investment company Listing Premium Segment of the London Stock Exchange Ticker / ISIN in EUR / SEDOL AERI / GB00BK6RLF66 / BK6RLF6 Ticker / ISIN in GBP / SEDOL AERS / GB00BK6RLF66 / BJMXQK1 Currency F
Slide 44: Contact details
Contact details Germany Czech Republic Japan Luxembourg Netherlands New Zealand Hamburg (Headquarters) Prague Tokyo Senningerberg Amsterdam Invercargill Valentinskamp 70 Palladium BUREX FIVE Airport Center Luxembourg Tower F, World Trade Center 173 Spey Street 20355 Hamburg Náměstí Republiky 1 2-11-
Slide 45: 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 46: 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 47: Important notice (cont’d)
Important notice (cont’d) The Fund is incorporated and registered in England and Wales as a public company limited by shares under the Companies Act 2006 (as amended). A prospectus has been issued for the Fund, which is, together with further documents and information available free of charge via we
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