Arise Windpower AB. Company presentation November 2012

Transcription

1 Arise Windpower AB Company presentation November 2012

2 Cautionary statement This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities. Statements made in this document relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Arise Windpower AB. Please read our most recent annual report for a better understanding of these risks and uncertainties. 2

3 Agenda I. Q3 highlights II. III. IV. Market trends Strategy update Appendix 3

4 Arise Windpower in brief Arise Windpower is one of the leading companies within the fast growing wind power sector in Sweden A sustainable business Commercially: Socially: Environmentally: Create long term value and return Investments benefit local communities No fuel needed = no emissions The business model is to sell electricity produced by own onshore wind farms Sweden and Norway constitute core markets Expansion at a pre-tax project IRR > 10% MW in operation Company and construction Arise 1 342/241 Skellefteå Kraft/Fortum 225 Statkraft/Södra/SCA 209 HG Capital 181 PWP (inkl Folksam och KPA) 132 Eolus 118 Svevind 116 Jämtkraft/Skanska 111 Vattenfall 108 Rabbalshede 93 Vindin 79 Stena Renewable 74 Eon 55 Arise Windpower, founded in 2006, is traded on NASDAQ OMX Stockholm since March ) Arise denotes total and Arise s share of the Jädraås project respectively Source: Svensk Vindenergi 2011 and Arise Windpower 4

5 Shareholders Shareholder structure 1 Name No. of shares % of capital and votes Nordea Investment Funds 4,569, Founders 3,557, Länsförsäkringar Fondförvaltning 3,342, Tredje Ap-Fonden 3,340, Statkraft 2,495, Arbejdsmarkedets Tillaegspension 1,704, Alecta Pensionsförsäkring 1,500, Ernström Finans 1,500, Danica Pension 1,040, Vätterleden Invest 614, largest shareholders 23,665, Other shareholders 9,762, Total registered shares 33,428, ) Shareholder structure at 28 September

6 Q highlights Key figures Net sales: MSEK 41 (41). Average revenue: 557 SEK/MWh (682) Total income: MSEK 53 (62) Group EBITDA: MSEK 28 (40) Net income: MSEK -12 (4) Production 73 GWh (59) Key events during the period Extremely low electricity prices during the summer as well as low certificate prices Q3 is normally a seasonally weak wind quarter, so also this year Jädraås on time and at budget estimated to come online Q Q Project Solberg acquired, 78 MW, and agreement giving Arise the right to acquire project Skaftåsen, approx. 180 MW, signed Key events after the period Broadened business model and new goal; MW built and under management by year end 2017 of which Arise owns 500 MW Improving electricity and certificate prices Approx. 1/3 of Jädraås is online and now contributing to P&L Secured the right to acquire 3 projects totalling 300 MW in Sweden 6

7 Operating highlights production (GWh) Production, YTD (DW Index) Jan Feb Mar Apr May Jun Jul Aug Sep Production, GWh Normal production, GWh Danish wind index Q4 and Q1 are strong production quarters (Wind distribution index) 150 Annual variation compared with 20 year mean value Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual wind energy distribution Strong Sep partly compensated weak conditions in Jul-Aug Wind conditions YTD somewhat below normal Improvement measures implemented caused some lost production early in the year Q2 and Q3 seasonally weak production quarters Q4 and Q1 are seasonally strong and account for approx. 60% of annual production during a normal year Annual variation on index 100 (20 year mean value) Source: Arise Windpower and Vindstat.dk 7

8 Operating highlights market prices Nordic spot, YTD ( /MWh) Certificates spot, YTD (SEK/MWh) Upward trend from low levels since Jun Q3 power market prices jan-12 feb-12 mar-12 apr-12 maj-12 jun-12 jul-12 aug-12 sep Week 01 Week 05 Week 09 Week 13 Week 17 Week 21 Week 25 Week 29 Week 33 Week 37 Bearish conditions during the year on the electricity market Strong hydrological balance, currently in the range +10 TWh vs normal conditions Improved nuclear availability Weather, macro economics Power price picking up from extreme conditions in Jul-Aug Oversupplied market led to falling prices in 2011 and 2012 Markets have turned up from low levels on expected changed fundamentals Quota increase and phase out 2013 Slower build-out pace expected Norway is a net byer Source: Nordpoolspot, SKM and Arise Windpower 8

9 Operating highlights income Realised price vs market Power (SEK/MWh) Certificates (SEK/MWh) Total (SEK/MWh) Q Q Q Q Q Q Q Q Q Realised price Market price Hedges provided 78% uplift from power market prices in Q3 Realised price Market price Hedges provided 39% uplift from certificate market prices in Q3 Realised price Market price Hedges provided 59% uplift from combined market prices in Q3 Hedges provided strong support but income was negatively affected by adverse market prices in Q3 Source: Nordpoolspot, SKM and Arise Windpower 9

10 Financial outlook Q Electricity prices; Highly dependent on the weather situation but have picked up from summer lows Dark horse 1: Nuclear power availability Dark horse 2: CO2 price development and a possible phase out of 2 billion tons of CO2 from the system Certificate prices; steady trend upwards since June 2012 and more interest from Norwegian buyers Q4 is normally a strong quarter in terms of production Jädraås will start contributing to the P&L in Q

11 Agenda I. Q3 highlights II. III. IV. Market trends Strategy update Appendix 11

12 Outlook power price drivers Short term price influenced by hydro situation Currently and throughout 2012 high compared to normal (+ 10 TWh) Decreasing due to cold weather (perception as snow combined with higher consumption) Hydro levels (2012 and max, min and mean since 1995) 2012 Max Mean Min Long term price determined by coal and CO2 price Still bearish fundamentals on coal Strong supply and relatively weak demand Mixed picture on CO2 Decreasing emissions (weak macro economics), political actions to set-aside CO2 allocations? Long term prices also influenced by supply/demand trends in Nordpool system Production capacity, consumption and transmission capacity Coal, Cal-14 (USD/t) EUA s, Dec-14 ( /t) ) Source: Montel and Arise Windpower 12 12

13 Certificate price drivers Electricity certificate system supports build out of 25 TWh of new renewable energy Consumers are obligated to buy certificates at a certain % of total consumption (quota) In , 13.2 TWh of new capacity is needed to meet the target in Sweden and the equivalent in Norway In total 26.4 TWh by 2020 in Norway and Sweden compared to 2011 (equal to turbines) Strong expansion in 2011 and 2012 on the back of supportive power and certificate market prices Certificate growth and surplus Slowdown in new capacity expected as market prices in 2012 will have a dampening effect on investment activity Decreasing certificate growth Phase out of eligble production (11 TWh) end of 2012, quota increase from Jan 2013 and net buyers in Norway Decreasing surplus Positive price trend from low levels since Jun 2012 (TWh) (TWh) 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 2,0 Targets for new renewable energy in Sweden 4,6 4,8 5,7 6,8 8,5 9, TWh 11,6 11,8 25, E 2020E Development of wind power in Sweden , ,5 2, ,4 0,9 0,9 1, , ,1 7, E TWh MW (MW) Source: Swedish Energy Agency (SEA) and Svensk Vindenergi 13

14 Outlook on Nordic electricity and certificates year monthly spot prices (SEK/MWh) Power Certificates Price area IV F annual average prices (SEK/MWh) Long run marginal cost for onshore windpower F 2014F 2015F 2016F 2017F Power Certificates Price area IV Long term we expect the sum of market prices on electricity and certificates to establish on an attractive level for competitive projects. Electricity prices will continue to be volatile and the certificate price will support to even out the gap to marginal investments Source: Nordpoolspot, Nasdaqomx commodities, SKM and Arise Windpower 14

15 Agenda I. Q3 highlights II. III. IV. Market trends Strategy update Appendix 15

16 New goal and broadened business model MWs built by the end of MW have been built or are under construction 500 MW owned by Arise at the end of currently Arise owns 241 MW Operational management of MW both wholly and partly owned assets Increased shareholder value Growth increasingly financed though internal cash flow generation Additional income streams and increased profitability Increased leverage on existing capital and proprietary knowledge 16

17 A strong and sustainable business model Project development Develop, finance and build on shore wind farms Proven track record and established processes Increased resource utilisation and scale Partly divest projects that are ready to build and operating assets Generate profits up front and improve cash flow MW built by the end of 2017 of which 500 MW is owned by Arise Operations management Operational management of wholly and partly owned wind farms Own service personnel Own real time performance management system In-house wind- and production engineers Service taken over for 3 parks Stable cash flows MW end of 2017 Sale of power & certificates Sale of power and certificates from partly and wholly owned wind farms Asset growth financed by internal cash flow generation and debt Divested assets, operations management and from sale of power and certificates 500 MW end of

18 Outlook MW in operation expected to produce approx. 350 GWh given a normal wind year 43% hedged in 2013 at an average price of approx. 800 SEK/MWh In addition, Arise owns 50% of wind park Jädraåsen expected to produce 570 GWh given a normal wind year From Sep 2013 hedged in accordance with loan requirements Production up until Sep 2013 sold at spot price Full operation from Q Funds available for the construction of approximately 80 MW. Arise is planning construction start of 30 MW from its proprietary portfolio in the winter/spring of 2013 Arise will seek a co-investor for project Solberg, 78 MW We expect to be more active in making new investments during However investment decisions related to larger projects are subject to market conditions Well positioned for continued growth and realising targets 18

19 Agenda I. Q3 highlights II. III. IV. Market trends Strategy update Appendix 19

20 Financial summary Income statement MSEK Q Q m m Net sales Capitalised work on own account Other revenues Total revenues Personnel costs Other external costs EBITDA Depreciation EBIT Financial income Interest expense EBT Deferred tax Net income Cash flow MSEK Q Q m m Cash flow from operating activities Cash flow from investments Cash flow from financing activities Balance sheet MSEK Q Q Property plant and equip Financial assets Current assets Cash and bank balances TOTAL ASSETS Equity Non-current liabilities Current liabilities TOTAL EQUITY AND LIABILITIES Segment reporting Wind power Wind power operations development Eliminations Group MSEK Q3-12 Q3-11 Q3-12 Q3-11 Q3-12 Q3-11 Q3-12 Q3-11 Total revenues EBITDA EBITDA margin 73% 80% neg 22% n.m. n.m. 53% 65% EBIT EBIT margin 24% 34% neg 17% n.m. n.m. 9% 29% EBT EBT margin neg 0% neg 26% n.m. n.m. neg 8% Total cash flow

21 Arise s characteristics High quality operating assets and project portfolio 241 MW in operation or under construction (139 and 102 MW, respectively), representing some 645 GWh a normal year Strong dev. portfolio in Southern Sweden, ~1 000 MW, coupled with track record to source and execute large projects Industrial approach Economies of scale Cost and quality control Fully integrated model from prospecting and permitting to operating the turbines (incl. in-house grid and crane companies) Financial strength SEK 3.5bn invested (incl. projects under construction) and cash and cash equivalents in the amount of SEK 350 million Wind farm EBITDA margin of 83% (wind farm operating margin) Proven track record Proven track record since Company foundation, delivering on all targets communicated in the IPO of 2010 The Jädraås project (202 MW) confirms Arise Windpower s strong position in the market, its capabilities and organisation Management team and ownership Group management with extensive experience of large scale energy projects as well as the capital markets Founders, Members of the Board of Directors and Group Management hold 12.8% of the shares in Arise Windpower Strong and diversified ownership base including several Tier 1 investors 21

22 A green utility equipped to handle large and complex projects Experienced and well reputed organisation of approximately 40 persons Industrial approach In-house recourses to costeffectively handle all critical steps in the value chain, including own electricity grid company, own crane and internal service organisation 22

23 Board of Directors & Group Management Name Position Other assignment(s) Pehr G Gyllenhammar Birger von Hall Joachim Gahm Chariman of the Board Board Member Board Member Board of Directors Chairman of the Board of Thomson Reuters Founder Share Company Ltd., Deputy Chairman of Rothschild Europe and Chairman of Rothschild Nordic AB Board member of Chalmers Innovation Affiliate Fund AB (publ), deputy board member of Platzer Fastigheter Holding AB (publ) and Chairman of the Board of Stiftelsen Göteborgs Maritima Centrum Senior partner and director of the board in Sustainable Growth Capital AB, director of the board in Kungsleden AB, and chairman of the board in Förvaltnings AB Hanneborg Share holdings 1 446,639 shares 40,000 shares 10,000 shares Name Peter Nygren Thomas Johansson Gary Ericson Position CEO Employed since Founder CFO & HR 2008 Head of Marketing Group Management 2011 Previous experience Holdings 1 Shares Options 17,000 Many years of experience with large-scale energy projects, including holding responsibility 1,340,197 for energy issues for the SCE Group and as Vice President of Project Financing at NCC shares 2 options Broad experience from previous positions such as MD, Finance and Administration Manager, and Certified Accountant Many years' experience from the energy industry. Before joining Arise Windpower, he worked for Halmstads Energi och Miljö AB 55,000 shares 0 shares 20,000 options 20,000 options Jon G Brandsar Board Member Executive Vice President, Wind Power and Technologies of Statskraft responsible for onshore windpower, offshore windpower, district heating, innovation, small scale hydropower 0 shares Lars Fröding COO 2011 More than 15 years experience from senior management (private and public sector) 100 shares 35,000 options Peter Nygren Board Member & CEO None 1,340,197 shares 2 and 17,000 options Leif Jansson Vice President IR & Acquisitions Founder Broad business development experience and has previously held a number of senior management positions, including Managing Director 1,293,909 shares 2 0 options Maud Olofsson Board Member Board Member of Creades AB, Diös Fastigheter AB and LKAB. Former Deputy Prime Minister, Minister for Enterprise and Party Leader The Centre Party. 0 shares Linus Hägg Head of Corporate Finance 2011 Broad financial expertise and experience from capital markets 10,000 shares 20,000 options 1) Holdings as of 29 February 2012 and including the holdings of kindred 2) The shareholdings of Zinwin AB equally distributed to Peter Nygren, Leif Jansson and Ulf Corné (non executive founder) 23

24 Strong track-record of developing wind farms Projects in full operation since 2009/2010 Projects in full operation since Oxhult, 24.0 MW 2 Råbelöv, 10.0 MW 3 Brunsmo, 12.5 MW Located outside Laholm, Halland Price area IV Operation start in March 2009 Turbines: 12 Vestas V MW Est. annual production 62 GWh Located outside Kristianstad, Skåne Price area IV Operation start in December 2009 Turbines: 5 Vestas V MW Est. annual production 26 GWh Located outside Karlskrona, Blekinge Price area IV Operation start in March 2010 Turbines: 5 GE 2.5 MW Est. annual production: 30 GWh 4 Fröslida, 22.5 MW 5 Idhult, 16.0 MW 6 Kåphult, 17.5 MW Located outside Hylte, Halland Operation start in December 2010 In full operation Q Price area IV Turbines: 9 GE 2.5 MW Est. annual production: 56 GWh Located in Småland Operation start in December 2010 In full operation Q Price area IV Turbines: 8 Vestas V MW Est. annual production 35 GWh Located outside Laholm, Halland Operation start in December 2010 Price area IV In full operation Q Turbines: 7 GE 2.5 MW Est. annual production: 47 GWh In operation Capacity: 139 MW Annual production 358 GWh 1 Total investment: SEK 2bn Under construction 11 Capacity: 102 MW Annual production 285 GWh 1 Total investment: SEK 1.5bn 11 7 Södra Kärra, 10.8 MW 8 Blekhem, 10.8 MW 9 Gettnabo, 12.0 MW 7 Projects production ramp-up phase Located outside Askersund, Närke Construction initiated in Nov Operation start in Q3-Q Price area III Turbines: 6 Vestas V MW Est. annual production 34 GWh Located outside Västervik, Småland Construction initiated in Nov Operation start in Q3-Q Price area III Turbines: 6 Vestas V MW Est. annual production: 31 GWh Located outside Torsås, Blekinge Construction start in March 2011 Operation start in Q3-Q Price area IV Turbines: 6 Vestas V MW Est. annual production 29 GWh ) All production figures represent expected production in a full and normal wind year 2) 3 MW in Skäppentorp operation start in Q

25 The Jädraås project Northern Europe s largest onshore wind farm Located outside Gävle ~ 30 km from the Swedish East cost Project 66 V112, each 3.1 MW, totalling 203 MW (Arise Windpower s share is 50%) Estimated production a full and normal wind year 570 GWh (Arise Windpower s share 285 GWh) Production start autumn 2012, full operation spring/summer 2013 Total CAPEX SEK 3.1bn Financing Owned 50/50 with Platina Partners Equity secured through existing cash Debt package secured from DNB, SEB and EKF 25

26 Action plan Development since the IPO Action plan communicated in IPO Development since IPO Status Continue build-out of wind parks at a high pace Installed capacity increased from 46.5 MW to 139 MW 102 MW under construction (50% of Jädraås) Development of the project portfolio, including potential acquisition of additional projects with or close to permits Total number of projects increased from 49 to 69 Internal project development complemented with acquisitions of permitted projects, including Jädraås, the largest Swedish wind power project under construction Fine tune CAPEX and OPEX to boost returns Secure financing for the continued expansion and build-out in CAPEX has been reduced from approx. SEK 5.7 kwh to a target of below SEK 5.0 kwh OPEX continuously decreasing in existing operating farms SEK 550m in new equity raised in the IPO SEK 1.9bn raised in senior project debt after the IPO Issue in kind for financing of the Jädraås project SEK 350m raised in senior unsecured debt (bond issue) Excellent track record on delivering on operational goals and in accordance to expansion plan 26

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