THE RENEWABLES INFRASTRUCTURE GROUP Results for the period to 31 December 2013

Transcription

1 THE RENEWABLES INFRASTRUCTURE GROUP Results fr the perid t 31 December February

2 INTRODUCTION The Renewables Infrastructure Grup Limited ( TRIG ) TRIG is a renewable energy infrastructure investment cmpany A clsed-ended, Guernsey registered platfrm Market capitalisatin f apprx. 317m 1 with premium listing n the Lndn Stck Exchange since July 2013 Targeting an attractive cash-cvered dividend Lng-term, predictable incme a 6p annualised dividend, grwing with inflatin, with a 8-9% target IRR NAV upside frm reinvestment f surplus cash flws after dividend payments A substantial, diversified prtfli Fcused n the prven renewables technlgies f nshre wind and slar PV 20 whlly-wned prjects (with ttal capacity f 288 MW) in the UK, France and Ireland Investments in the UK and Nrthern Eurpean markets with strng cmmitment t renewables grwth Diversified by weather systems acrss the British Isles and the Suth f France Pwering the equivalent f 120,000 hmes and aviding the emissin f 210,000 tnnes f CO 2 annually Best-in-class management Advised by InfraRed and RES market leaders in infrastructure fund management and in renewables develpment and peratins, with a cmpetitive fee structure Independent Bard f experienced Directrs Prtfli grwth plan with visible future pipeline f acquisitins Right f first ffer frm RES + healthy deal flw frm brader market including UK slar 1. As at 31 December

3 CONTENTS Sectin Pages Highlights / Business Update 4 t 7 Prtfli Cmpsitin and Operatinal Perfrmance 8 t 11 Financial Review and Valuatin 12 t 17 Summary 18 Crprate Calendar 19 This presentatin and subsequent discussin may cntain certain frward lking statements with respect t the financial cnditin, results f peratins and business f The Renewables Infrastructure Grup Limited and its crprate subsidiaries (the Grup ). These frward-lking statements represent the Grup s expectatins r beliefs cncerning future events and invlve knwn and unknwn risks and uncertainty that culd cause actual results, perfrmance r events t differ materially frm thse expressed r implied in such statements. Additinal detailed infrmatin cncerning imprtant factrs that culd cause actual results t differ materially will be available in ur Annual Reprt & Cnslidated Financial Statements fr the perid ended 31 December 2013 which will be available n the Cmpany's website when printed and sent t sharehlders. Past perfrmance is nt a reliable indicatr f future perfrmance. 3

4 HIGHLIGHTS Fr the perid t 31 December Distributins Achieved 2.5p per share interim dividend target fr perid t 31 December 2013 (6.0p annualised) Target distributin f 3.0p per share fr 6 mnths t 30 June 2014 Prtfli Diverse prtfli f 20 prjects as at 31 December 2013 with Directrs valuatin f millin 2 new slar PV investments since IPO ttalling 21m, surced frm third parties Energy yield: 5.3% ahead f plan fr IPO prtfli Healthy acquisitin pipeline in bth nshre wind and slar PV Financing 10.1 millin raised thrugh equity tap issue in Nvember 2013, fllwing 300m IPO in July m acquisitin debt facility nw in place with tw banks Annunced intentin t launch a C share equity issue in March 2014 Gvernance 4 th independent Directr recruited with UK and Eurpean energy industry experience t cmplement Bard 1. The first accunting perid cmmences frm TRIG s establishment n 30 May 2013, althugh the Cmpany did nt acquire any prtfli prjects until after the IPO n 29 July 2013, s annualisatin is calculated frm 29 July

5 OVERVIEW FINANCIAL PERFORMANCE Slid first perid distributins n target IPO 29 July 2013 (Perid ended) 31 December Ttal perating incme Net earnings 15.2m 10.3m Earnings per share 3.4p Interim dividend per share (declared) 2 2.5p Net assets 294.3m 314.9m NAV per share (befre interim dividend) p 101.5p NAV per share (after interim dividend) 99.0p Net cash at 31 December 2013 (befre interim dividend) 16.2m 1. The first accunting perid cmmences frm TRIG s establishment n 30 May 2013, althugh the Cmpany did nt acquire any prtfli prjects until after the IPO n 29 July Interim dividend f 2.5p per share declared n 13 February 2014 and payable t investrs in the register n the recrd date f 21 February NAV per share at 31 December 2013 is calculated n the basis f the 310,000,000 Ordinary Shares in issue at 31 December 2013 plus a further 235,351 Ordinary Shares t be issued t the Managers in relatin t part-payment f Managers fees in the frm f Ordinary Shares, as set ut in the IPO Prspectus. NAV per share at IPO is based n 300 millin Ordinary Shares in issue n 29 July

6 CAPITAL, FUNDING AND INVESTMENT Strng transactin flw frm RES and brader market Pst IPO Investments July / August 2013: IPO raised 300m with versubscriptin and deplyment f 95% f the prceeds n 18 prjects Nvember 2013: tw subsequent slar PV investments funded thrugh remaining IPO cash and a 10.1m equity tap issue 31 December 2013: cash f 16.2m ( 7.1m available fr investment after dividend and csts) Parsnage (7MW), Smerset, England - Nvember 2013 January 2014: annunced pssible C share issue in March 2014 fr additinal acquisitins frm the pipeline Pipeline prgress n transactins frm RES and the brader market, fr expected acquisitin in Q1/Q Marvel Farms (5MW), Isle f Wight, England - Nvember

7 MANAGEMENT Experienced Bard and Managers Independent Bard Investment Manager Operatins Manager Helen Mahy (Chair) Jnathan Bridel Strng, 15+ year track recrd in infrastructure and real estate funds US$7 billin f equity under management One f the wrld's leading renewable energy develpers Privately-wned member f the 144 year ld McAlpine grup f cmpanies Shelagh Masn Managing renewables since 2006 Als managing HICL, the first Lndnlisted infrastructure investment cmpany Extensive, 30 year experience in renewables 130 wind energy generatin prjects ttalling mre than 8,000 megawatts Klaus Hammer (frm 1 March) Lndn based, with 4 ther ffices and >100 staff UK head ffice and ffices in 10 ther cuntries; >1,000 staff in renewables 7

8 PORTFOLIO DIVERSIFICATION By Jurisdictin / Pwer Market 1 2 By Technlgy / Weather System 2 3 By Prject Revenue Type (2014) 2 Surce: TRIG 1. Nrthern Ireland and the Republic f Ireland frm a Single Electricity Market, distinct frm that perating in Great Britain. 2. Segmentatin by Jurisdictin / Pwer Market and by Technlgy / Weather System is calculated by prtfli valuatin; segmentatin by Prject Revenue Type is by 2014 expected revenue at prject level. 3. Dminant winds in the British Isles are frm the suth-west and are generally driven by the passages f Atlantic cyclnes acrss the cuntry. Dminant winds in Suthern France are assciated with gap flws which are frmed when nrth r nrth-west air flw (assciated with cyclgenesis ver the Gulf f Gena) accelerates in tpgraphically cnfined channels. 8

9 PORTFOLIO COMPOSITION (31 DECEMBER 2013) 288MW capacity / 20 prjects mst diversified Lndn-listed renewables investment cmpany Market Generating Capacity (MWs) Cmmissin Date 1 Turbine / Panel Manufacturer and Rating (MW) Onshre Wind (14 investments) Rs GB (Eng) Vestas (1.9) The Grange GB (Eng) Vestas (2.0) Hill f Twie GB (Sct) Siemens (2.3) Green Hill GB (Sct) Vestas (2.0) Frss GB (Sct) Siemens ( ) Altahullin N. Ireland Siemens (1.3) Lendrums Bridge N. Ireland Vestas (0.7) Lugh Hill N. Ireland Siemens (1.3) Milane Hill R. f Ireland Vestas (0.7) Beennageeha R. f Ireland Vestas (0.7) Haut Languedc France Siemens (1.3) Haut Cabardes France Siemens (1.3) Cuxac Cabardes France Vestas (2.0) Russas-Claves France Vestas (1.8) Ttal Onshre Wind Slar PV (6 investments) Puits Castan France Fnrche Churchtwn GB (Eng) Canadian Slar East Langfrd GB (Eng) Canadian Slar Manr Farm GB (Eng) Canadian Slar Marvel Farms GB (Eng) LDK / Q.PRO Parsnage GB (Eng) Canadian Slar Ttal Slar PV 32.0 Ttal Prtfli MW Surce: TRIG 1. Where a prject has been cmmissined in stages, this refers t the earliest cmmissining date 9

10 PORTFOLIO OPERATIONAL PERFORMANCE Electricity prductin 5.3% ahead f prjectins Operatinal Output Initial Prtfli GB Wind: high Octber + December NI & RI Wind: lw Nvember, high December France Wind: high September + Nvember GB Slar cunterbalanced by France Slar TRIG s diversificatin benefits in evidence Aug-Dec 2013 Electricity Prductin frm Initial Prtfli Segment Actual Prductin GWh P50 Estimate Prductin GWh Delta Capacity (MW) GB Wind % 115 NI & RI Wind (0.2)% 69 France Wind % 73 GB & France Slar (4.1)% 20 Ttal % 276 Electricity Prductin by Segment vs. P50 Central Estimate 1 Since IPO P50 central estimate = 1.0x Surce: TRIG 1. The P50 Central Estimate refers t the energy yield applicable t each prject based n lng-term average expected prductin. 10

11 OPERATIONS MANAGEMENT Delivering better prjects thrugh practive management Active invlvement f peratins team f >30 staff verviewing prject management incl. engineering, prject financials, frecasting, ESG 1 Knwledge transfer f best practice frm the glbal RES prtfli t TRIG s peratinal prtfli Frequent site visits mnitring verall prtfli management activity early identificatin f peratinal issues (e.g. wind turbine cnditin mnitring / investigatin) Seek t create cst efficiencies thrugh experience f wrking with a wide range f suppliers New prjects in develpment phase: input int prject design, layut, prject bligatins review, service agreements 1. Envirnmental, Scial and Gvernance plicies, including thse that minimise visual and auditry impact f prjects, engage and educate stakehlders and manage peratins in an energy-efficient way. 11

12 SUMMARY INCOME STATEMENT millin Perid ended 31 December 2013 Ttal perating incme Expenses and finance csts 2 (1.7) Acquisitin csts (3.2) Net earnings 10.3 Earnings per share 3.4p Onging Charges Percentage % 1. Ttal perating incme includes 3.4m f investment incme and 11.8m f gains n investment. 2. Excludes IPO csts f apprximately 5.7m, which were deducted frm the IPO prceeds. 3. Calculated using the methdlgy set ut by the AIC. Includes Managers fees calculated as 1.0% f Adjusted Prtfli Value annually. 12

13 SUMMARY BALANCE SHEET millin At IPO 29 July December 2013 Investments at fair value Wrking capital (1.1) Cash and cash equivalents 16.2 Net assets attributable t rdinary shares NAV per share (befre interim dividend declared 1 ) 98.1p 101.5p NAV per share (after interim dividend declared 1 ) 99.0p 1. Interim dividend f 2.5p per share declared n 13 February 2014 and payable t investrs in the register n the recrd date f 21 February 2014 and due t be paid n 31 March

14 SUMMARY CASH FLOW millin Net cash at start f perid Perid ended 31 December 2013 Nil Cash frm investments 13.2 Operating and finance csts utflw 1 (0.3) Net cash inflw befre acquisitins / financing 12.9 Dividends paid Nil Net cash inflw after dividends 12.9 Share capital raised net f csts Cst f new investments 3 (301.0) Net cash at end f perid m f perating and finance csts relating t 2013 were unpaid at the year end and are included in accruals in the balance sheet 2. Share capital f 310.1m was raised with csts f 5.8m 3. New investments f 301.0m includes 3.2m f acquisitin csts 14

15 PORTFOLIO VALUATION BRIDGE Analysis f changes in the Directrs prtfli valuatin 1 TRIG delivered a prtfli return f 12.5% n an annualised basis 2 1. The directrs valuatin f the prtfli assumes that all utstanding deferred equity cmmitments have been made. 2. Based n prtfli return f 15.0m (fr the perid 29 July t 31 December 2013) n a re-based prtfli valuatin f 286.8m. 15

16 VALUATION KEY ASSUMPTIONS IPO July December 2013 Discunt Rate 1 Weighted Average 10.0% 9.8% Energy Yield Pwer Prices 2 Inflatin All All UK France & Rep. f Ireland P50 central case yield factr frecasts frm third party energy yield adviser Based n price frecasts prvided by a third party pwer price frecaster 2.75% 2.00% Freign Exchange EUR / GBP Blended Pwer Price Curve fr TRIG s Prtfli 2 (31 December 2013 vs. 29 July 2013 IPO) Unchanged Based n updated third party frecasts (with adjustments by the Investment Manager) Unchanged 1. The weighted average discunt rate f 9.8% fr the TRIG prtfli takes int accunt the acquisitin f tw GB slar prjects in Nvember 2013 which were acquired withut prject debt and were acquired at a lwer discunt rate than the weighted average fr the prtfli at IPO (10.0%). The discunt rates applied fr 18 prjects acquired at IPO (10.0%) is unchanged. 2. Pwer prices are based n data prvided by TRIG s pwer price adviser including cannibalisatin effect (fr time weighted renewable energy generatin), netting ff pwer purchase agreement discunts t whlesale prices and with additinal adjustments made by the Investment Manager fr ptential develpments in the GB market. This is discussed further in the results annuncement. Blended curve shws price curve weighted fr TRIG s 31 Dec 2013 prtfli. 16

17 VALUATION SENSITIVITIES Impact n NAV per share Base Case (mid-pint f sensitivity) Discunt rate (-/+ 0.5%) 9.8% 1 Energy yield (P90 10 year / P10 10 year) P50 Central Estimate Pwer price (-/+10%) Blended prjected pwer price curve 2 Inflatin rate (-/+ 0.5%) UK: 2.75% France & Ireland: 2% Exchange rate (-/+ 10%) EUR/GBP: p -10p 0p 10p 20p 1. The weighted average discunt rate f 9.8% fr the TRIG prtfli takes int accunt the acquisitin f tw GB slar prjects in Nvember 2013 which were acquired withut prject debt and were acquired at a lwer discunt rate than the weighted average fr the prtfli at IPO (10.0%).The discunt rates applied fr 18 prjects acquired at IPO (10.0%) is unchanged. 2. In additin, the Investment Manager estimates that a freezing f the GB Carbn Price Flr at 2015/16 levels (instead f an increase t higher levels as previusly set ut by the UK gvernment) culd have a negative impact n the NAV per share f less than 2p. 17

18 TRIG: A DIFFERENTIATED PROPOSITION On track fr 2014 Attractive lng-term yield 6p annualised, grwing with inflatin 1 NAV upside frm reinvestment f surplus cash flws after dividends 1 Experienced management InfraRed + RES: market leaders in infrastructure fund management and in renewables A substantial, diversified prtfli 20 whlly-wned, peratinal assets Fcused n tw leading, prven renewables technlgies Acrss three Eurpean pwer markets with cmmitment t renewables grwth Diversified by distinct reginal weather systems Prtfli grwth with visible pipeline f acquisitins Right f first ffer frm RES + deal flw frm brader market 1. This is a target nly and is nt a prfit frecast. There can be n assurance that this target will be met r that the Cmpany will make any distributins whatsever r that investrs will recver all r any f their investment. 18

19 CORPORATE CALENDAR Ex-dividend date 19 February 2014 Dividend recrd date 21 February 2014 Interim dividend payment fr the perid t 31 December March 2014 Annual General Meeting (Guernsey) 29 April 2014 Interim results fr 6 mnths t 30 June 2014 August

20 IMPORTANT INFORMATION By attending the meeting where this presentatin is made, r by reading the presentatin slides, yu agree t be bund by the fllwing limitatins: This dcument is an advertisement and is nt a prspectus. Any decisin t purchase shares in The Renewables Infrastructure Cmpany Limited (the "Cmpany") shuld be made slely n the basis f the July 2013 IPO prspectus and subsequent trading updates published by the Cmpany, which are available frm the Cmpany Website, The infrmatin in this dcument has been prepared by the Cmpany slely t give an verview f the Cmpany. This dcument is being distributed in the UK t, and is directed nly at, persns wh have prfessinal experience in matters relating t investments wh fall within the definitin f "investment prfessinals" in Article 19(5) f, r a persn falling within Article 49(2) (High Net Wrth Cmpanies, etc.) f, the Financial Services and Markets Act 2000 (Financial Prmtin) Order 2005 f the United Kingdm (all such persns tgether being referred t as "relevant persns"). Any persn wh is nt a relevant persn shuld nt act r rely n this presentatin r this dcument r any f its cntents. The infrmatin in this presentatin is given in cnfidence and the recipients f this presentatin shuld nt engage in any behaviur in relatin t qualifying investments r related investments (as defined in the Financial Services and Markets Act 2000 ("FSMA") and the Cde f Market Cnduct made pursuant t FSMA) which wuld r might amunt t market abuse fr the purpses f FSMA. 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N representatin r warranty, express r implied, is made as t, and n reliance shuld be placed n, the fairness, accuracy, cmpleteness r crrectness f the infrmatin, r pinins cntained herein. Neither the Cmpany, nr any f the Cmpany's advisers r representatives, including its investment manager, InfraRed Capital Partners Limited, and its peratins manager, Renewable Energy Systems Limited, shall have any respnsibility r liability whatsever (fr negligence r therwise) fr any lss hwsever arising frm any use f this dcument r its cntents r therwise arising in cnnectin with this dcument. The infrmatin set ut herein may be subject t updating, cmpletin, revisin, verificatin and amendment and such infrmatin may change materially. Neither the Cmpany nr any ther persn is under an bligatin t keep current the infrmatin cntained in this dcument. This dcument has nt been apprved by the UK Financial Cnduct Authrity r any ther regulatr. This dcument des nt cnstitute r frm part f, and shuld nt be cnstrued as, an ffer, invitatin r inducement t purchase r subscribe fr any securities nr shall it r any part f it frm the basis f, r be relied upn in cnnectin with, any cntract r cmmitment whatsever. This dcument des nt cnstitute a recmmendatin regarding the securities f the Cmpany. The infrmatin cmmunicated in this dcument cntains certain statements that are r may be frward lking. These statements typically cntain wrds such as "expects" and "anticipates" and wrds f similar imprt. By their nature frward lking statements invlve risk and uncertainty because they relate t events and depend n circumstances that will ccur in the future. An investment in the Cmpany will invlve certain risks. In particular, certain figures prvided in this presentatin rely in part n large and detailed financial mdels; there is a risk that errrs may be made in the assumptins r methdlgy used in a financial mdel. The Cmpany s targeted returns are based n assumptins which the Cmpany cnsiders reasnable. Hwever, there is n assurance that all r any assumptins will be justified, and the Cmpany s returns may be crrespndingly reduced. In particular, there is n assurance that the Cmpany will achieve its distributin and IRR targets (which fr the avidance f dubt are targets nly and nt prfit frecasts). A summary f the material risks relating t the Cmpany and an investment in the securities f Cmpany are set ut in the sectin headed "Risk Factrs" in the July 2013 IPO Prspectus available frm the Cmpany s website. The publicatin and distributin f this dcument may be restricted by law in certain jurisdictins and therefre persns int whse pssessin this dcument cmes r wh attend the presentatin shuld infrm themselves abut and bserve any such restrictins. Any failure t cmply with these restrictins culd result in a vilatin f the laws f such jurisdictin. 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This presentatin and subsequent discussin may cntain certain frward lking statements with respect t the financial cnditin, results f peratins and business f the Cmpany and its crprate subsidiaries (the Grup ). These frwardlking statements represent the Grup s expectatins r beliefs cncerning future events and invlve knwn and unknwn risks and uncertainty that culd cause actual results, perfrmance r events t differ materially frm thse expressed r implied in such statements. Additinal detailed infrmatin cncerning imprtant factrs that culd cause actual results t differ materially is available in the July 2013 IPO Prspectus, available frm the Cmpany's website. Past perfrmance is nt a reliable indicatr f future perfrmance