Italian Investment Conference. 1 7 M a y

Transcription

1 Italian Investment Conference 1 7 M a y

2 Disclaimer This document has been prepared by Falck Renewables S.p.A. (the "Company") for use during meetings with investors and financial analysts and is solely for information purposes. The information set out herein has not been verified by an independent audit company. Neither the Company nor any of its subsidiaries, affiliates, branches, representative offices (the Group ), as well as any of their directors, officers, employees, advisers or agents (the Group Representatives ) accepts any responsibility for/or makes any representation or warranty, express or implied, as to the accuracy, timeliness or completeness of the information set out herein or any other related information regarding the Company and/or Group, whether written, oral or in visual or electronic form, transmitted or made available. This document may contain forward-looking statements about the Company and/or the Group based on Company s current views, beliefs, expectations, opinions, as well as based on current plans, estimates, assumptions, projections and projects of the Company and/or Group. These forward-looking statements are subject to significant risks, uncertainties and other factor (many of which are beyond the Company and/or the Group s control) which might cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these risks, uncertainties and other factors, you should not place undue reliance on the forwardlooking statements in this document. The information set out in this document is provided as of the date indicated herein. Except as required by applicable laws and regulations, the Company assumes no obligation to provide updates of any of the aforesaid forward-looking statements or to conform these statements to its actual results. Under no circumstances shall the Company, the Group and/or any of the Group Representatives be held liable (for negligence or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise in connection with the document or the aforesaid forwardlooking statements. This document does not constitute an offer to sell or a solicitation to buy or subscribe the shares of the Company or Group and neither this entire document or a portion of it may constitute a recommendation to effect any transaction or to conclude any legal act of any kind whatsoever. This document may not be reproduced or distributed, in whole or in part, by any person other than the Company. By viewing and/or accepting a copy of this document, you agree to be bound by the foregoing limitations. 2

3 Agenda Group Overview and 2021 Roadmap Strategic Update 4 1Q 2018 Highlights 22 Outlook and Conclusions 29 Appendix 33 3

4 A Renewables Pure Play Generating Sustainable Value Evolving Global Multi-Client Renewable Services Platform Established Asset Management and Technical Advisory Services business Expansion plan in Energy Management and Energy Efficiency Driven by Digital Technologies Clients and Community-Driven Sustainable Approach Our approach maximizes the creation of business and societal value while preserving the environment where we live and operate Financial Strength and Flexibility Strong balance sheet Sustainable financial position Capital efficiency Strong Wind and Solar Developer/ Operator in Attractive Markets Quality solar and wind assets in markets with strong fundamentals Growing pipeline and diversified asset base Led by experienced management team In-house operational expertise FALCK RENEWABLES, SUSTAINABILITY AT THE CORE Balanced, Scalable Growth Reaching scale of core operations in: Asset development Investing in asset management and technical advisory services Increased access to financial partners 4

5 Falck Renewables current Platform Asset Owned and consolidated Services Business 1.7 GW 33 plants 950 MW 413MW 292MW 16MW 46MW ~ 1650 MW Assets managed for other owners Asset Management (Commercial, Technical), 1.6 GW < 92MW Technical Advisory (provide services for 11.5 GW of assets) 49MW Transaction Support Services (provided services for 4.3 GW of assets) 42MW Offices in Spain (HQ), Italy, Japan, Mexico, France, UK, Bulgaria, Chile, UAE 796MW 108MW 46MW 10 years of experience in more than 25 countries, over 100 highly qualified professionals 5 * Includes minority stake in La Muela (26%) wind farm and Frullo Energia Ambiente (49%) for a total amount of 37MW ** Includes Cabezo (23,2 MW) and France projects (42 MW)

6 2017 Entered Target Markets with Strong Fundamentals Acquired largest Falck PV project Acquired majority stake in two wind projects in Norway plus pipeline. Acquired two wind power projects in Sweden ~ 70 MW ~ 115 MW Projects Okla and Hennoy Projects Aliden and Brattmyrliden Added ~185 MW of capacity in target region 92 MW dc Installed Capacity of 92MW dc* Expected Production of ~150 GWh/year PPA with Duke Energy Operating since October 2017 Wind hours expected: ~3,500 Commercial Operations Date Expected: Under development: 125 MW Wind hours expected: ~3,500 Commercial Operations Date Expected: *Direct current in Watt-peak Returns expected in line with communicated targets

7 Roadmap 2021 Strategic Priorities Solar and Wind Asset and Pipeline Growth Onshore wind and solar remain core Drive growth in installed capacity of owned assets and evolve asset base Expand and diversify pipeline Deconsolidation of non core Waste Treatment business (Esposito) Investing in Services Platform Increase size and scope of services business Grow Asset Management and Tech Services offerings to asset owners Diversify service offerings and client base Expand into Energy Management and Energy Efficiency activities Invest on digital platforms Profitability and Financial Flexibility Increase efficiencies and improve profitability Optimize value from existing assets Expand access to debt and minority financial partners 7 Scalable, profitable clean energy platform

8 2021 Roadmap: Growth plan Asset Owned 1,375 MW vs. 950 MW end of 2017 assets owned +12% CAGR in EBITDA ( ) +36% growth in wind assets ( ) 248 MW Solar installed capacity ( ) 8 Vector Cuatro only presence Falck Renewables current presence Falck Renewables new markets Growth in mature markets, expansion of Vector Cuatro s services dedicated to assets owners VC as an antenna to monitor emerging market opportunities Services ~5,000 MW 1,800 MW end of 2017 assets under management +57% CAGR in EBITDA ( ) Engineering focus on wind and higher value added services 5.8% contribution to ordinary group Net Income (up from 3% in 2017)

9 Renewables Asset Growth: Global Market Update World electrical capacity 1.4x in one year! Other ~40 Coal ~330 Renewables capacity ~6,100 ~6,400 ~6, GW vs Outlook 2016 ~9,700 ~3,300 Solar ~1,100 Solar* ~780 Gas & Oil ~550 Wind* ~770 Nuclear ~60 26% 31% 32% 45% E 2030E Renewables capacity additions are expected to grow by ~2,400GW, reaching ~4,400 GW globally in 2030 Solar PV is set to account for the largest share of Renewables energy capacity additions, reaching ~1,100 GW in 2030 In the USA, Solar PV is expected to reach ~165 GW (6x the 2015 installed capacity) in 2030 Wind ~760 «Slight Contraction" Bioenergy ~90 Hydro ~400 New Installations USA EUROPE Wind 78 GW 138 GW Solar 138 GW 69 GW 9 Source: World Energy Outlook 2017 New Policies Scenario International Energy Agency * From World Energy Outlook 2016 New Policies Scenario International Energy Agency **Others include geothermal CSP and marine energy Including Hydro, Bioenergy and Others

10 Industrial Plan Updated to Reflect Market Evolution 2016: Falck Renewables Relaunched its Development Strategy Portfolio combination: balanced mix of Greenfield, Readyto-Build and operational assets Geographical presence: differentiated; maintaining low country risk Outlined plans to establish assets in New Markets New Additions Evolving Towards a More Balanced Mix (MW) Cumulative % Solar 20% 553 Solar 42% : Consolidation and Fine Tuning Additional installed capacity: +15% More balanced geographical diversification Larger presence in solar Further development with ambition to reach larger pipeline coverage 2018/2019 Target IRR = 150 bps + country WACC (maintained) Wind 80% Wind 58% 10 North Europe: France, UK, Netherlands Nordics: Sweden, Norway North America South Europe: Italy, Spain

11 Roadmap 2021: More Ambitious and Balanced Asset Growth North Europe France, UK, Netherlands Nordics Norway, Sweden North America Installed Capacity (MW) by Region ( ) +60% Installed Capacity (MW) by Technology ( ) Wind Solar Other South Europe Italy, Spain 1,303 1, ,002 1,062 Energy Output (TWh) 11 Old Plan New Plan * Includes Wte and Biomass plants

12 2021 Roadmap: New Capacity Pipeline Targets Pipeline Targets (MW) Almost all additions ** * ** * To be covered (Ready to Build/Merger & Acquisition) Greenfiled/JDA Secured % 42% 313 8% 49% 43% Pipeline Coverage In Business Plan (MW) of which 32% covered by existing company pipeline (projects under development identified and under control adjusted by probability of success) 40% 100% 60% of which 50% covered by existing projects under development adjusted by probability of success At end of 2017 Target end of * Projects under development identified and under control adjusted by probability of success ** Projects under development identified and under control

13 Roadmap 2021: Energy Transition and New Market Design The penetration of renewables sources which are getting cheaper and more efficient and a more active consumer are changing the shape of the electricity market structure Cost structure Generation structure Planning and Operation Control and dispatch Role of demand-side Role of grids Price of energy Current Mainly marginal Mainly centralised Flex supply to match demand From centre Passive Neutral conduit KWh Mainly capital Decentralised Flex demand to match supply Throughout system (cf. internet) Interactive Smart player? Future These new issues are all system issues, which will determine a re-design of the market 13 Source: Oxford Energy Institute Keay and Robinson 2017

14 Roadmap 2021 Ser vices Market: 3 Key Drivers and Market Opportunities 1 - Growth of RES capacity 2 - Flexible power systems 3 - Prosumers Expected growth in RES 2030 Example of power production 2030 Example of energy Monitoring Tool Efficient asset management Flex Demand to match supply Consumption Behaviours changing Continued market overall growth Good margins in spite of competition and price pressure IoT, advanced analytics services increase added value Market value [M ] Key parameters Demand response and storage become critical system resources Promising and evolving market but still unclear economics Regulation plays an important role Digitalisation enables consumption awareness/action Consumers show time based and price based sensitive responses Performance based service contracts and CPPA** Public Administration active actor Market value [M ] Key parameters Market value [M ] Key parameters 1,140 Growth Profitability Concentration Regulat. Risk 7% 12% 25% medium 776 Growth Profitability Concentration Regulat. Risk 8% n.a. n.a. high 15,765 Growth Profitability Concentration Regulat. Risk 6% 7% 20% medium 14 * Source: Accenture. Market coverage IT, SP, USA, UK and DE (for EM only). Profitability: Net Operating Income ** CPPA: Corporate Power Purchase Agreement.

15 Roadmap 2021: Strategy for ser vices SERVICE BUSINESS % Revenues % RENEWABLE ENERGY ASSET MANAGEMENT and ADVISORY TECH SERVICES GENERATION CLIENTS ENERGY MARKETS FLEXIBILITY Gain Market Share DIGITAL PLATFORM SMART METERING/ENERGY INTERNET OF THINGS RESIDENTIAL CUSTOMERS COMM. & INDUSTRIAL PUBLIC ADMINISTRATION FALCK RENEWABLES Current Status 15% ENERGY MANAGEMENT CLIENTS Generate value from energy flexibility CLIENTS ACTIVE DISPATCHING UNIT 20% ENERGY EFFICIENCY Extract value from energy consumption and smart demand CLIENTS BUILDING TEAM AND INITIATIVES 15

16 Roadmap 2021: Ser vices Business Targets Target 2021 DIGITAL PLATFORM RES ASSET MANAGEMENT and TECH SERVICES ENERGY MANAGEMENT SERVICES ENERGY EFFICIENCY 3 key goals for Falck Renewables IoT platform MW under management Technical advisory and engineering Transaction services Increase market share and technical competences Dispatching of own plants and third parties Software platform Advanced Demand Side Management solutions Storage and plants ancillary services New cogeneration projects Public Administration (lighting) projects Energy Service Company offering Efficient processes Partners collaboration Advanced analytics on energy, operation and maintenance 5.0 GW 2.8x 2017 Revenues 1.5x 2017 Revenues Further M&A 1.5 TWh Integrated with AM Also through M&A Pilots and through M&A 2 MW 5 municipalities Also through M&A 16

17 Developing In House New IT Digital Platform MULTISPEED ARCHITECTURE CAPEX BENEFITS Engineers (Internal or contractor) Project managers Site supervisors / Field worker HQ / Branch Office Manager Remote Intelligence Command Center Clients 1.0M Services & Collaboration Cost Efficiency Service Composition BIG DATA ANALYTICS & IOT 1.8M Data Centric Organisation CORE SYSTEMS Engineering Maintenance Operations Commercial Solid backbone Customer Centricity 17

18 Roadmap 2021: Ser vices: Key financials Targets Capex: 33M Revenues 2021 REVENUES [ M] External Growth 2021 OLD 2021 NEW Organic 28M Turnover 44M Turnover EBITDA [ M] 1 4, M EBITDA 8M EBITDA ,5 18

19 Financial Goals EBITDA ( M) CAGR +12% 1.4x Debt to Equity Ratio 1.5x 1.5x NFP to EBITDA Ratio NFP ( M) 7.0x 7.0x 7.0x* Falck Renewables Debt Covenant 4.7x 4.6x 3.9x Falck Renewables NFP to EBITDA Ratio Sound ratios with room for further expansion 19 * Assumed equal to the existing covenant

20 Based on pay-out ratio 2021 Road map Maintaining Financial Flexibility and Delivering Value Improvement of the financial stability Clear Dividend Policy Dividend Per Share (in c )* Operational targets Current yield ~2.50% ** 4.7x Old 4.4x New Average NFP/EBITDA Maintain a sustainable ratio throughout the plan; well within the corporate financing covenant Roadmap enables sustainable investments in short and long-term growth while supporting progressive annual dividend * Years in Y-axis represent timing of dividend payment e.g., 2017 represents FY2016 dividend payment ** as of 22 March 2018

21 Falck Renewables - sustainability at the core it is not only about WHAT we do, but HOW we do it, and the VALUES that we live by. Falck Renewable Sustainability Charter 1. WE PROMOTE LOCAL WORKFORCE. 2. WE FOSTER LOCAL SUPPLY CHAIN. 3. WE WELCOME THE PARTICIPATION OF COMMUNITIES IN OUR BUSINESS, ALSO THROUGH OWNERSHIP SCHEMES. 4. WE BACK COMMUNITY PROJECTS, FROM SOCIAL & EDUCATIONAL TO ENVIRONMENTAL & INFRASTRUCTURAL. 5. WE ENCOURAGE COMMUNITIES TO SHARE PROJECTS PRACTICES TO MAXIMIZE BENEFITS FOR OTHERS. We believe in creating at the same time business value and value for local communities, while preserving the environment where we operate. 6. WE SHARE OUR KNOWLEDGE OF ENERGY SUSTAINABILITY TO SPREAD THE WORD ABOUT ITS IMPORTANCE. 7. WE ENSURE ALL OUR OPERATIONS HAVE THE MINIMUM IMPACT ON THE ENVIRONMENT. 21

22 1Q 2018 HIGHLIGHTS

23 1Q 2018 Highlights Solid assets performance and construction activities ongoing: Better wind conditions in all countries of presence: average load factor 36.5% vs 31.4% in 2017 Better production compared to 1Q 2017 (+24%) Higher prices in the UK (+4%) while Italy and Spain show a downtrend (respectively -7% and -17%) COD defined on Swedish projects: 4Q 2019 Aliden (46.8 MW) and 4Q 2020 Brattmyrliden (74.1 MW) US solar: 5.99MW dc under construction. COD confirmed by end of 2Q 2018 Services performance: Higher revenues from technical and transaction services vs 1Q 2017 Energy management: 102 GWh dispatched in-house in Italy (~ 37% of energy produced) M&A activity ongoing in asset management + technical services, in energy management and in energy efficiency Better Group financial results vs. 1Q 2017 Higher EBITDA at 54.8M in 1Q 2018 vs. 1Q 2017 (+21%) and above expectations EBIT at 38.5M (+36.6% vs. 1Q 2017) benefiting from reduced depreciations Earnings before Taxes reaches 29.8M vs. 19.5M in 1Q 2017 thanks to better operating margins NFP at 534M better than 584M end of Adoption of IFRS 9 for financial instruments Contained impact from GBP exchange ratio Guidance improved 23 Best quarterly results ever

24 1Q 2018 another strong set of results * 24 * As of 31 December 2017

25 1Q 2018 Wind Portfolio Performance UK & Italy: Evolution of Production** 1Q 2018 vs. 1Q 2017: Load Factor* by Country TOTAL GROUP TOTAL GROUP (EXCLUDES REIMBURSED CURTAILMENT) 41.4% 3.9% 3.2% 37.2% 36.3% 33.4% 24.4% 35.5% 26.2% 29.0% 36.5% 31.4% (3.7%) (1.3%) (20.4%) (23.8%) 9.4% 25 ** variation % vs internal Index of production * Based on effective operating hours

26 1Q 2018 Solar PV Portfolio Performance US & Italy: Evolution of Production** 1Q 2018 vs. 1Q 2017: Load Factor* by Country TOTAL GROUP 14.6% 14.8% 14.4% 14.6% 12.0% (11.7%) (3.7%) (11.3%) (20.4%) (23.8%) (14.6%) 26 ** variation % vs internal Index of production * Based on effective operating hours

27 «GROUP» PRICE WHOLESALE PRICE* Market Average Price 1Q2017 1Q2018 D % Eur/MWh % Eur/MWh (17%) /MWh Average: 53 /MWh GBP/MWh Average 47 /MWh 45% (5%) 39% 12% (7%) % (8%) 2% (5%) 5% 27 * Source: GME, Heren

28 1Q 2018 Debt Breakdown Gross Debt Nature Without Derivatives Gross Debt by Currency Without Derivatives Gross Debt Without Derivatives Hedged 48% 1Q % 52% 1Q % 800M 800M 800M Financing with recourse Project financing without recourse Other financings without recourse GBP EUR USD Hedged Un-hedged Average interest rate (including interest rate swap) of 3.65%* vs. 4.25% in 1Q *excluding IFRS 9 effect

29 OUTLOOK AND CONCLUSIONS

30 Construction program in progress Project Middleton Aliden Brattmyrliden Hennoy/Okla Country Tech. source MW 5.99* ~ 70 Status on track on track on track on track Technology JA Solar 360 Mod. SMA Central Inv. Nordex N131/3900 Nordex N131/3900 TBD Capex/MW (M) 1.65$ Hours 1,200 3,400 3,550 3,500 COD expected 1H Q Q / * DC

31 2018 Guidance improved ( M) CMD* Update Assumptions EBITDA NET EARNINGS (before minorities) > 30» Strong 1Q 2018 results» Operations in 2H 2018 of US solar plant (5.99MW)» Impact from IFRS 9 adoption NFP (687) (660)» Exchange rate in line with expectations 31 * CMD 12 December 2017

32 Conclusions» Solid quarterly performance better than 1Q 2017 and expectations» Construction activities on track in Sweden, Norway and in the US» Intense activity on growth opportunities ongoing for assets and services» Business re-organization to better execute the updated Strategic plan 32

33 33 Appendix

34 % of market cap traded Average share price Performance and Governance New CEO since March 2016, new management team in place New Roadmap presented Nov 2016, updated Dec 2017 Current price* /share, ~ 686 M Mkt cap, ~1.2 B EV Stock added to the FSTE Italia Mid Cap Index (coming from FSTE Italia Small cap Index) Shareholders Base Institutional Investors (~25% of floating) Board Composition Executive Director Non Executive Director Independent Dir. according to T.U.F. and Corporate Governance Code The Board of Directors consists of twelve members. Six of them are Independent Directors (50%); one was appointed Lead Independent Director. 34 * As of 11 May 2018 The new Board of Directors as approved at The Shareholders Meeting on 27 April 2017 reflects the group s international presence and includes members with relevant experience.

35 1Q 2018 EBITDA Bridge ( M) UK WIND US SOLAR WIND ITA WIND UK WIND FRA BIOMASS UK ITALY SPAIN GRID BUSINESS RATES RENDE BIOMASS O&M 2017: 0, : 0, POSITIVE ONE OFFS PERIMETER VOLUMES PRICES OPEX EXCHANGE RATE SERVICES G&A/OTHER 1Q Q

36 1Q 2018 Cash Flow ( M) CASH 163 CASH 162 PF (792) SPV CASH 99 CII HOLDCO 10 CII HOLDCO 10 SPV CASH 135 PF (778) FV DER. (46) OTHER (17) FV DER. (44) OTHER (19) 36

37 Installed Capacity and Production by Plants in 1Q 2018 Plants MW Energy produced 1Q 2018 (GWh) Cefn Croes (Wales ) Boyndie (Scotland ) Earlsburn (Scotland) Ben Aketil (Scotland) Millennium (Scotland) Kilbraur (Scotland) WIND SOLAR WTE/BIO Nutberry (Scotland) West Browncastle (Scotland) Spaldington (England) Kingsburn (Scotland) Assel Valley (Scotland) Auchrobert (Scotland) San Sostene (Italy) Minervino Murge (Italy) Buddusò Alà dei Sardi (Italy)* Petralia Sottana (Italy) Ty Ru (France) Fouy (France) Cretes (France) Esquennois (France) Cabezo San Roque (Spain) Rende (Italy) 1.0 Sicily (Italy) Mesagne (Italy) North Carolina (USA) WTE Trezzo (Italy) BIO Rende (Italy) MINORITIES 37 La Muela (Wind - Spain) 26.0 Frullo Energia Ambiente (WtE - Italy) 11.0 TOTAL * The installed capacity is 159 MW, production limit at 138 MW

38 Young Asset Base March 2018 * Residual Project Life Residual Debt Life Project cash flow after debt repayment Wholesale price Residual incentive life 38 * PPA secured

39 Scenario Assumptions Our solid and reliable path forward is informed by revised scenario assumptions and our strong year one performance. Lower Energy Prices in Europe Nominal Italy PUN Old Plan /MWh Italy PUN New Plan /MWh Italy Green Certificate Old Plan /MWh Italy Green Certificate New Plan /MWh Uk baseload Old Plan /MWh UK baseload New Plan /MWh Higher Interest Rates Euribor & Libor Euribor Old Plan 0.00% 0.00% 0.00% 0.22% Euribor New Plan 0.00% 0.25% 0.50% 1.00% UK Libor Old Plan 0.50% 0.50% 0.60% 0.80% UK Libor New Plan 1.00% 1.20% 1.30% 1.40% Lower wind Capex/MW M/MW 2018 Wind Old Plan 1.55 Wind New Plan 1.31 Solar PV Old Plan 1.04 Solar PV New Plan 1.07 More Solar in Mix of Capacity Additions 39 Larger Funding from third parties (Tax Equity in the U.S.)