SDCL Efficiency Income Trust PLC · LSE:SEIT
SDCL Efficiency Income Trust — SDCL Energy Efficiency Income Trust — H1 2023 Earnings Presentation
47 slides from SDCL Efficiency Income Trust's earnings presentation, Dec 8, 2022
Slide 1: Interim Results Presentation: Six Months to 30 September 2022
SDCL Energy Efficiency Income Trust plc (“SEEIT”) Interim Results Presentation: Six Months to 30 September 2022 8 December 2022
Slide 2: Contents
Contents 1. Overview and Highlights Investment Manager Presentation Team 2. Portfolio Update 3. Financial Results Jonathan Maxwell, CEO Purvi Sapre, Fund Manager 4. Summary Remarks 5. Appendices ◼ Established SDCL in 2007 ◼ Fund Manager of SEEIT, with responsibility for investment origination a. SEE
Slide 3: Overview and Highlights
Overview and Highlights 3
Slide 4: Highlights for Six Months Ended 30 September 2022
SDCL Energy Efficiency Income Trust plc Highlights for Six Months Ended 30 September 2022 SEEIT’s diversified portfolio performance has remained resilient amidst unprecedented energy market volatility Performance Investment Activity Balance Sheet & Capital Market Background ▲ Operational performance
Slide 5: Energy Markets Now More than Ever are Looking for Solutions
SDCL Energy Efficiency Income Trust plc Energy Markets Now More than Ever are Looking for Solutions And Energy Efficiency may be the most critical Energy Security High Energy High Rising Interest Concerns Prices Inflation Rates Energy market background Europe’s dependency Global energy prices For ex
Slide 6: What Makes SEEIT Well-Positioned in Today's Volatile Market?
SDCL Energy Efficiency Income Trust plc What Makes SEEIT Well-Positioned in Today’s Volatile Market? Energy efficiency-focused with a diversified portfolio underpinned by contracted cashflows Less affected by energy policy and market downturn Geographic diversification Predominantly contracted cashf
Slide 7: Portfolio Update
Portfolio Update 7
Slide 8: Portfolio Characteristics
SDCL Energy Efficiency Income Trust plc Portfolio Characteristics SEEIT’s diversified portfolio of cost effective, lower carbon and reliable energy solutions can be split into 3 categories, illustrated by the below examples Cleaner and More Efficient Supply Cleaner and More Efficient Supply Bringing
Slide 9: New Investments During the Six Months Ended 30 September 2022
SDCL Energy Efficiency Income Trust plc New Investments During the Six Months Ended 30 September 2022 Further diversification into new solutions and geographies Diversifying Technologies Expanding UK Footprint Convertible debt investment into a portfolio of c.€4 Portfolio of predominantly solar PV a
Slide 10: Strategic Asset Management Initiatives During the Period
SDCL Energy Efficiency Income Trust plc Strategic Asset Management Initiatives During the Period Focus on unlocking long-term added-value asset management opportunities RED ONYX VÄRTAN GAS OLIVA ▲ Three-year asset management ▲ Identified new development ▲ Organisational restructuring to ▲ Actively m
Slide 11: Portfolio Performance
SDCL Energy Efficiency Income Trust plc Portfolio Performance Asset Management focus during the period Project Key Updates Asset Management Response ▪ Improving operational ▪ Idling of blast furnace #4 continues resulting in cessation of Ironside efficiencies ▪ Identifying alternative opportunities
Slide 12: Portfolio Impacts During the Period
SDCL Energy Efficiency Income Trust plc Portfolio Impacts During the Period Managing risks and reacting quickly to portfolio challenges Thematic Factors Impacts Mitigation Initiatives ▪ Engaging with energy industry and government stakeholders to positively influence decision-making ▪ New energy mar
Slide 13: Geographical Diversification
SDCL Energy Efficiency Income Trust plc Geographical Diversification Portfolio of 501 projects spanning most U.S. states, the UK, Europe and Asia UK Over 650 locations nationwide ▪ Huntsman Energy Centre ▪ Santander UK Lighting ▪ Moy Park Biomass Iceland ▪ Moy Park Lighting ▪ Baseload ▪ Citi Riverda
Slide 14: SEEIT: Portfolio as at September 2022
SDCL Energy Efficiency Income Trust plc SEEIT: Portfolio as at September 2022 Diversification by country and investment stage Investment Diversification1,2 Technology Exposure1,2 Red Rochester Primary - Cokenergy District Energy Onyx Obsidian Portfolio Solar & Storage 9% 9% 20% UU Solar 20% CHP (Was
Slide 15: Counterparties and Revenue Breakdown as at 30 September 2022
SDCL Energy Efficiency Income Trust plc Counterparties and Revenue Breakdown as at 30 September 2022 Diversification by counterparty, O&M providers and breakdown of contracted revenue Counterparties1 Counterparty exposure Portfolio consists of counterparty exposures that are individually small and d
Slide 16: Environmental, Social and Governance (ESG) Overview
SDCL Energy Efficiency Income Trust plc Environmental, Social and Governance (“ESG”) Overview SEEIT’s ESG focus areas provide the foundation for its Responsible Investment Policy SEEIT’s ESG Focus Areas Aiding the transition to a 307,7941 MWh 1,060,6171 tCO2 Minimising its low-carbon economy Renewab
Slide 17: Financial Results
Financial Results 17
Slide 18: Financial Highlights for Six Months Ended 30 September 2022
SDCL Energy Efficiency Income Trust plc Financial Highlights for Six Months Ended 30 September 2022 Aggregate Interim Dividends Paid Dividend Cash Cover Weighted average discount rate (unlevered) 2.91p1 1.3x Up from 2.81p1 for the six months ended 1.2x for the six months ended 30 7.3% 30 September 2
Slide 19: NAV Per Share Bridge
SDCL Energy Efficiency Income Trust plc NAV Per Share Bridge Analysis of change in NAV during the six months ended September 2022 Market movements, including rising interest Underlying portfolio continues to deliver rates, created uncertainty. in volatile macroeconomic conditions, A view taken on di
Slide 20: Analysis of Change in Portfolio Valuation - Bridge
SDCL Energy Efficiency Income Trust plc Analysis of Change in Portfolio Valuation - Bridge Portfolio valuation change for six months to 30 September 2022 ▪ Portfolio Valuation forms key part of balance sheet – reconciles to NAV of £1,176m through cash and working capital ▪ Portfolio Valuation increa
Slide 21: Summary Financials
SDCL Energy Efficiency Income Trust plc Summary Financials1 Cashflow Statement Six Months to 30 September 2022 (£m) Six Months to 30 September 2021 (£m) Cash from investments2 43.3 27.2 Operating and finance costs (7.4) (4.9) Cash from operations 35.9 22.3 Equity issuance (net of costs) 132.9 245.8
Slide 22: Summary Financials (cont'd)
SDCL Energy Efficiency Income Trust plc Summary Financials (cont’d)1 Income Statement Six Months to 30 September 2022 (£m) Six Months to 30 September 2021 (£m) Total income 6.0 28.7 Fund expenses & finance costs (7.5) (5.6) Profit/(Loss) before tax (1.5) 23.1 Earnings per share (pence) 2 (0.2) 3.3 O
Slide 23: SEEIT: Key NAV Sensitivities
SDCL Energy Efficiency Income Trust plc SEEIT: Key NAV Sensitivities Based on investment portfolio at 30 September 2022 Discount Rates + / - 50 bps Corporate Tax + / - 500 bps Inflation - / + 50 bps FX + / - 10% (5.0p) (4.0p) (3.0p) (2.0p) (1.0p) 0p 1.0p 2.0p 3.0p 4.0p 5.0p 6.0p Pence per Share Nega
Slide 24: SEEIT: Inflation Exposure
SDCL Energy Efficiency Income Trust plc SEEIT: Inflation Exposure SEEIT continues to build a portfolio with positive correlation to inflation Actual and Forecast Inflation (+£8m) Inflation linkage (Total) ▲ Actual inflation: significantly above Mar 22 assumptions – 5% higher in the UK and mainland E
Slide 25: Summary Remarks
Summary Remarks 25
Slide 26: Summary Remarks
SDCL Energy Efficiency Income Trust plc Summary Remarks Resilient portfolio performance in highly volatile market, net cash flow of £36 million provided 1.3x cover for dividends; On track for aggregate dividend target of 6.0p per share for the full year to March 20231 Market uncertainty late in peri
Slide 27: Appendices
Appendices 27
Slide 28: a. SEEIT Key Metrics
a. SEEIT Key Metrics 28
Slide 29: SEEIT's Investment Proposition
SDCL Energy Efficiency Income Trust plc SEEIT’s Investment Proposition Investment Objective: Generate an attractive total return for investors comprising stable dividend income and capital preservation, with the opportunity for capital growth Contracted Cash Flows with High Quality Credit Low Gearin
Slide 30: Breakdown of Debt Outstanding – 30 September 2022
SDCL Energy Efficiency Income Trust plc Breakdown of Debt Outstanding – 30 September 2022 Relatively low gearing limits and levels Current Borrowing Limits ▪ Target medium term borrowing of up to 35% of NAV Investment Level Debt GBP 405m o Equivalent to c.25% LTV1 ▪ Borrowing of up to 65% at point o
Slide 31: SEEIT: Foreign Exchange Hedging
SDCL Energy Efficiency Income Trust plc SEEIT: Foreign Exchange Hedging The key objective of managing FX risk is to minimise volatility in the NAV from movements in foreign exchange rates SEEIT’s hedging strategy seeks to protect the NAV from material movements in foreign exchange rates, and to prov
Slide 32: Approach to Investment and Portfolio Construction
SDCL Energy Efficiency Income Trust plc Approach to Investment and Portfolio Construction Investment Characteristics Achieved/Mitigated Through ▪ Predominately long-term, established contracts in place with track record of low cashflow volatility Counterparty creditworthiness ▪ Qualitative and quant
Slide 33: Energy Policy Tailwinds
SDCL Energy Efficiency Income Trust plc Energy Policy Tailwinds Emerging policies in the US, EU, and UK focus on energy efficiency and clean energy to increase energy security, ease inflation, and mitigate climate change US EU UK Inflation Reduction Act to ease ‘Energy Efficiency First’ is a key Aut
Slide 34: b. Portfolio Timeline and New Investments in the Period
b. Portfolio Timeline and New Investments in the Period 34
Slide 35: Existing Portfolio Overview
SDCL Energy Efficiency Income Trust plc Existing Portfolio Overview Scale and diversification achieved through new portfolio additions in line with policy Key Supply Demand Distribution IPO: Dec-18 Mar-19 Jun-19 Sep-19 Nov-19 Apr-21 Dec-20 Oct-20 Sep-20 Aug-20 Feb-20 CapShare May-21 Sep-21 Jul-21 Oc
Slide 36: Portfolio Development since 31 March 2022
SDCL Energy Efficiency Income Trust plc Portfolio Development since 31 March 2022 c.£186 million of investment commitments since 31 March 2022 Project Investment/Commitment date Type Location Approx. size During the six months ended 30 September 2022 Baseload May 2022 New Sweden c.£3m1 Turntide May
Slide 37: c. Board and Investment Manager Overview
c. Board and Investment Manager Overview 37
Slide 38: Highly Experienced Independent Board of Directors
SDCL Energy Efficiency Income Trust plc Highly Experienced Independent Board of Directors Tony Roper, Non-Executive Chair Over 26 years’ experience of making and managing infrastructure equity investments in the UK, Europe, North America and Australia From 2011 to June 2018 Tony was a Managing Partn
Slide 39: Overview of Sustainable Development Capital LLP (SDCL)
SDCL Energy Efficiency Income Trust plc Overview of Sustainable Development Capital LLP (‘SDCL’) Founded in 2007 Investment firm with proven track record of investment in energy efficiency and decentralised generation projects Launched first of its kind energy efficiency focused funds in UK, Ireland
Slide 40: d. Case Studies
d. Case Studies 40
Slide 41: Investment: UU Solar
SDCL Energy Efficiency Income Trust plc Investment: UU Solar Portfolio of operational, on-site, behind-the-meter predominantly solar PV projects in UK High level overview Location: UK Technology: Solar PV, Wind and Hydro Stage: Operational Capacity: 69MW total (67MW solar PV, 2MW wind and 0.1MW hydr
Slide 42: Investment: Baseload
SDCL Energy Efficiency Income Trust plc Investment: Baseload Financing of a portfolio of geothermal projects developed by Baseload through a €25 million convertible debt facility High level overview Location: Iceland, Japan & US Technology: Low Temperature Geothermal Stage: Operation, development an
Slide 43: Investment: ON.Energy
SDCL Energy Efficiency Income Trust plc Investment: ON.Energy Investment in a developer and operator of energy storage projects, together with a conditional commitment to fund behind-the-meter projects for C&I customers in North America High level overview Location: United States Technology: Battery
Slide 44: Investment: Turntide Technologies
SDCL Energy Efficiency Income Trust plc Investment: Turntide Technologies Investment in a manufacturer of energy efficient motor systems that reduce carbon emissions and energy costs in the commercial real estate, agriculture, and transportation industries High level overview Location: United States
Slide 45: Investment: Iceotope
SDCL Energy Efficiency Income Trust plc Investment: Iceotope Investment in an energy efficient data centre immersion cooling company headquartered in Sheffield, UK High level overview Location: Sheffield, UK Technology: Energy efficient immersion cooling for data centres Stage: Corporate Investment
Slide 46: Important notice
SDCL Energy Efficiency Income Trust plc Important notice THIS PRESENTATION IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. THIS PRESENTATION IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFR
Slide 47: Important notice
SDCL Energy Efficiency Income Trust plc Important notice This presentation does not constitute or form part of any offer for sale or subscription or any solicitation of any offer to buy or subscribe for any securities and neither this document nor any part of it forms the basis of or may be relied o
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