Greencoat UK Wind Plc · LSE:UKW
Greencoat UK Wind — H1 2020 Earnings Presentation
30 slides from Greencoat UK Wind's earnings presentation, July 2020
Slide 1: Half Year Results
GREENCOAT | UK WIND. Half Year Results July 2020
Slide 2: H1 2020 Highlights
H1 2020 Highlights 1,494GWh Power generation 2% above budget due to higher wind resource Power generation £71.0m Robust cash generation (despite low power prices) Net cash generation £53.9m / 3.55p per share Dividend in line with FY target Dividends declared with respect to the period 998MW £51m inv
Slide 3: Simple Model
Simple Model 6-36 wind Generating capacity increased farms from 127 to 998MW since IPO Total reinvestment Equity 9.9TWh Total power produced Debt £547.4m Total cash generated £153.6m £393.8m Total dividends paid or declared “6p dividend, increasing with RPI inflation and real NAV preservation’’ Note
Slide 4: Track Record of Consistent Delivery
Track Record of Consistent Delivery Period Production Cash Generation Dividend(1) Dividend Cover(2) RPI NAV Growth 2013(3) 292GWh £21.6m £14.2m (4.50p) 1.8x 1.9% 2.5% 2014 565GWh £32.4m £24.8m (6.16p) 1.6x 1.6% 2.5% 2015 799GWh £48.3m £29.6m (6.26p) 1.7x 1.2% 0.5% 2016 978GWh £49.0m £38.8m (6.34p) 1
Slide 5: Operational and Financial Performance
Operational and Financial Performance
Slide 6: Financial Performance (1)
For the six months ended 30 June 2020 Group and wind farm SPV cashflows £'000 Net cash generation 70,984 Dividends paid (53,282) Acquisitions” (56,421) Acquisition costs” (851) Net drawdown under debt facilities 27,000 Upfront finance costs (25) Movement in cash (Group and wind farm SPVs) (12,595) O
Slide 7: Financial Performance (2)
For the six months ended 30 June 2020 Net Cash Generation — Breakdown £000 Revenue 134,547 Operating expenses (34,858) Tax (6,940) Other (90) Wind farm cashflow 92,659 Management fee (8,312) Operating expenses (L574) Ongoing finance costs (9,202) Other (656) Group cashflow (19,727) VAT (Group and wi
Slide 8: Net Asset Value
Net Asset Value The decrease in the portfolio valuation of £39.6m (3p on a per share basis) comprised approximately: ▪ -1p of depreciation ▪ -1p of macroeconomic assumption changes ▪ -5p from the reduction in the long term power price forecast (lower in the short term as the economy recovers from CO
Slide 9: Power Price
Power Price Demand Supply Energy efficiency Demand in China and India Gas 45p/th = £30/MWh Electric vehicles Cost of extraction Electrification of heat Carbon Focus on climate change £40/t = £15/MWh Absolute level of demand not important in the long term Generation mix will be the same Network charg
Slide 10: Net Asset Value Since IPO
Net Asset Value Since IPO “6p dividend, increasing with RPI inflation and real NAV preservation’’ 10 Note: (1) per share and adjusted for accrued dividends
Slide 11: Investment Performance
Investment Performance TSR since IPO of 110.1%(1) Strong, consistent return with correlation to inflation 11 Note: (1) from IPO to 30 June 2020
Slide 12: Portfolio and Acquisitions
GREENCOAT. UK WIND Portfolio and Acquisitions
Slide 13: Portfolio Overview
Portfolio Overview Generating sufficient electricity to power approximately 1 million homes 13
Slide 14: Portfolio Overview
Portfolio Overview Well-diversified generating portfolio of 998W - third largest owner of UK onshore wind Note: breakdown by value as at 30 June 2020 14
Slide 15: Asset Management and Performance Enhancement
Asset Management and Performance Enhancement ▪ Extended cut-out and power performance optimisation ▪ Installation of blade serrations and blade cleaning Generation ▪ Performance analysis Optimisation ▪ Whole wind farm control to maximise wind farm return over individual turbine return ▪ PPA renegoti
Slide 16: Slieve Divena II
Slieve Divena II Previous Ownership ▪ SSE Capacity ▪ 18.8MW Turbines ▪ 8 x Enercon E-92 2.35MW Commercial Operations Date ▪ June 2017 PPA ▪ SSE until 2037 Turbine O&M ▪ Enercon O&M Management ▪ SSE ▪ Bilateral transaction ▪ “Extension” of the Slieve Divena wind farm that UKW has owned since 2017 ▪ M
Slide 17: South Kyle
South Kyle Seller ▪ Vattenfall Capacity ▪ 235MW Turbines ▪ 50 x Nordex N133 4.8MW Commercial Operations Date ▪ Target Q1 2023 PPA ▪ Vattenfall until 2037 Turbine O&M ▪ Nordex O&M Management ▪ Vattenfall ▪ Acquisition from 16th seller ▪ South Kyle will be the UK’s largest subsidy free project once bu
Slide 18: Secondary Market - Continued Opportunities to Grow
Secondary Market - Continued Opportunities to Grow 998MW 1000 UKW net generating capacity (MW) 800 600 400 200 127MW 0 30,000 £70bn market 25,000 20,000 15,000 £20bn market 10,000 UK offshore capacity (MW) 5,000 UK onshore capacity (MW) 0 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 UKW o
Slide 19: Environmental, Social and Governance
Environmental, Social and Governance ▪ Portfolio produces enough renewable electricity to power nearly 1 million homes ▪ Recycling of capital enabling more renewable generation capacity to be built out Environmental ▪ Over 1.2m tonnes of CO2 per annum will be avoided compared to thermal generation ▪
Slide 20: Summary
GREENCOAT | UK WIND. Summary
Slide 21: H1 2020 Highlights
H1 2020 Highlights 1,494GWh Power generation 2% above budget due to higher wind resource Power generation £71.0m Robust cash generation (despite low power prices) Net cash generation £53.9m / 3.55p per share Dividend in line with FY target Dividends declared with respect to the period 998MW £51m inv
Slide 22: Appendix
GREENCOAT | UK WIND. Appendix
Slide 23: Greencoat UK Wind
Greencoat UK Wind ▪ Greencoat UK Wind acquires and operates UK wind farms. The cash generated by these assets is used primarily to pay a robust, premium dividend to shareholders. The Simple remainder is reinvested to ensure capital is preserved in real terms. ▪ Simple structure, UK domiciled with a
Slide 24: Diversified Asset Portfolio (1)
Diversified Asset Portfolio (1) Group Acquisition Total Commercial ROCs / Forecast Net Load Wind Farm Country Turbines PPA Ownership Net MW(1) MW Operations Date Date MWh Factor(2) Stake Bicker Fen England Senvion EDF 26.7 80% 21.3 Sep-08 Oct-17 1.0 24.0% Bin Mountain N Ireland GE SSE 9.0 100% 9.0 J
Slide 25: Diversified Asset Portfolio (2)
Diversified Asset Portfolio (2) Group Acquisition Total Commercial ROCs / Forecast Net Load Wind Farm Country Turbines PPA Ownership Net MW(1) MW Operations Date Date MWh Factor(2) Stake Cotton Farm England Senvion Sainsbury’s 16.4 100% 16.4 Mar-13 Oct-13 1.0 36.3% Crighshane N Ireland Enercon Energ
Slide 26: Diversified Asset Portfolio (3)
Diversified Asset Portfolio (3) Group Acquisition Total Commercial ROCs / Forecast Net Load Wind Farm Country Turbines PPA Ownership Net MW(1) MW Operations Date Date MWh Factor(2) Stake Lindhurst England Vestas RWE 9.0 49% 4.4 Oct-10 Nov-13 1.0 30.1% Little Cheyne England Nordex RWE 59.8 41% 24.5 M
Slide 27: Diversified Asset Portfolio (4)
Diversified Asset Portfolio (4) Group Acquisition Total Commercial ROCs / Forecast Net Load Wind Farm Country Turbines PPA Ownership Net MW(1) MW Operations Date Date MWh Factor(2) Stake Screggagh N Ireland Nordex Energia 20.0 100% 20.0 May-11 Jun-16 1.0 25.8% Sixpenny Wood England Senvion Statkraft
Slide 28: Wind Resource and Production
Wind Resource and Production UK average wind speed (m/s)(1) Annual average 10 year average 7 6 5 4 3 2 1 0 July July July July July July July January January January January January January January May May May May March November March November May March November March November May March November May
Slide 29: NAV Sensitivities
Discount rate (+/- 0.5%) Inflation rate (-/+ 0.5%) Energy yield (10 year P90/P10) Power price (-/+ 10%) Asset life (-/+ 5 years) -20p -15p Impact on NAV -10p -5p Op 5p 10p pence per share 15p 20p 29
Slide 30: Disclaimer
Disclaimer Important Information This presentation and its contents are confidential. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES (OR TO ANY US PERSON), AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, CANADA, JAPAN, ANY MEMBER STATE OF TH