A unique profile. BLX Toronto Stock Exchange. December 18, 2017

Transcription

1 A unique profile BLX Toronto Stock Exchange December 18, 2017

2 Cautionary Statements Forward-looking Statements Some of the statements contained in this presentation, including those regarding future results and performance are forward-looking statements based on current expectations, within the meaning of securities legislation. Boralex would like to point out that, by their very nature, forward-looking statements involve risks and uncertainties such that its results or the measures it adopts could differ materially from those indicated by or underlying these statements, or could have an impact on the degree of realization of a particular projection. Boralex considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but cautions that these assumptions regarding future events, many of which are beyond the control of the Corporation, may ultimately prove to be incorrect. The main factors that could lead to a material difference between the Corporation's actual results and the projections or expectations set forth in the forward-looking statements include, but are not limited to, the general impact of economic conditions, raw material price increases and availability, currency fluctuations, volatility in the selling price of energy, the Corporation's financing capacity, negative changes in general market conditions and regulations affecting the industry, as well as other factors discussed in the Corporation's filings with the various securities commissions. Certain forward-looking information such as targeted EBITDA(A), targeted discretionary cash flows and forward-looking statements are subject to important assumptions, including: (i) assumptions as to the performance of the Corporation's projects based on management estimates and expectations with respect to wind and other factors, (ii) assumptions as to general industry and economic conditions and (iii) assumptions as to EBITDA(A) margins. While the Corporation considers these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect. Unless otherwise specified by the Corporation, the forward-looking statements do not take into account the possible impact on its activities, transactions, non-recurring items or other exceptional items announced or occurring after the statements are made. There can be no assurance as to the materialization of the results, performance or achievements as expressed or implied by forward-looking statements. The reader is cautioned not to place undue reliance on such forward-looking statements. Unless required to do so under applicable securities legislation, Boralex management does not assume any obligation to update or revise forward-looking statements to reflect new information, future events or other changes. Proportionate Consolidation This presentation contains results presented on a proportionate consolidation basis. Under this method, the results of Seigneurie de Beaupré Wind Farms 2 and 3 and Seigneurie de Beaupré Wind Farm 4 General Partnerships (together, the "Joint Ventures"), which are 50% owned by Boralex, were proportionately consolidated instead of being accounted for using the equity method as required by IFRS. Under the proportionate consolidation method, which is no longer permitted under the IFRS, the Interests in the Joint Ventures and Share in earnings (loss) of the Joint Ventures are eliminated and replaced by Boralex's share (50%) in all items in the financial statements (revenues, expenses, assets and liabilities). Because the information that Boralex uses to perform internal analyses and make strategic and operating decisions is compiled on a proportionate consolidation basis, management has considered it relevant to use this proportionate consolidation information into the press release to help investors understand the concrete impact of decisions made by the Corporation. Moreover, tables reconciling IFRS data with data presented on a proportionate consolidation basis are included in the management's discussion and analysis of the Corporation. Other Non-IFRS Measures In order to assess the performance of its assets and reporting segments, Boralex uses the terms EBITDA, EBITDA(A), and discretionary cash flow. "EBITDA" is calculated by the Corporation as earnings before interest, taxes, depreciation and amortization. In addition, EBITDA(A) is calculated by the Corporation as EBITDA adjusted for items such as net earnings from discontinued operations, loss on redemption of convertible debentures, net loss on financial instruments, foreign exchange loss (gain) and other gains, EBITDA and EBITDA are reconciled to the most comparable IFRS measure, namely net earnings (loss), in the management's discussion and analysis of the Corporation. Discretionary cash flows are equal to net cash flows related to operating activities before change in non-cash Items related to operating activities, less (i) distributions paid to non-controlling shareholders, (ii) additions to property, plant and equipment (maintenance), and (iii) repayments on current and non-current debt (projects); plus (iv) development costs (from statement of earnings). When evaluating its operating results, "discretionary cash flows" is a key performance indicator for the Corporation. Discretionary cash flows represent the cash generated from the operations that management believes is representative of the amount that is available for future development or to be paid as dividends to common shareholders while preserving the longterm value of the business. Discretionary cash flows are reconciled to cash flows from operations, which is reconciled to the most comparable IFRS measure, namely net cash flows related to operating activities, in the management's discussion and analysis of the Corporation. 2

3 Table of Contents Corporate Overview 4 Financial Overview and Performance 7 Growth Path 9 Growth Opportunities 11 Why Boralex? 14 Appendices Including Footnotes 15 3

4 Corporate Overview A highly reputable independent power producer Independent power producer with a presence in Canada (51% of installed capacity), in France (44%) and in the United States (5%) 25 years of experience in the renewable energy field Emphasis on wind, hydro and solar assets Publicly traded on the Toronto Stock Exchange (BLX and BLX.DB.A) 4

5 Boralex in the World A leader in the Canadian market and France s largest independent producer of onshore wind power Sites in operation (1,456 MW) CANADA Wind Hydro Thermal Solar In operation 5 FRANCE Under construction/development UNITED STATES 738 MW / 51% 636 MW / 44% 82 MW / 5% 628 MW 74 MW 35 MW 1 MW 609 MW 15 MW 12 MW 82 MW 1,456 MW In operation MW Under construction/development = 1,681 MW

6 Capacity Profile Segment breakdown Geographic breakdown Breakdown of sources of revenues from energy sales 1 Average length of contracts: 14 years 1 Wind and hydro +/- 95 % of operating capacity Contracted capacity +/- 98 % of capacity under long term contracts 6

7 Financial Overview Financial Metrics (Sept 30, LTM) In millions of $ unless specified Prop. IFRS Cons. Revenue 359 M 414 M EBITDA(A) 230 M 272 M EBITDA(A) Margin (%) 64% 66% Cfops 154 M 168 M Enterprise Value 2 4,377 M 4,706 M Greatly-improved asset mix since MW of operating assets acquired 860 MW of pipeline acquired 272 MW of less performing assets sold or closed 690 MW commissioned Market Metrics Outstanding shares: 76.1 M Public Float: 57.6 M (76% of O/S shares) Market Cap: 1.8 B Average daily volume (90 days) Shares: 239 K Annual dividend of $0.60, yield of +/- 2.6 % Distribution policy: 40% to 60% of CAFD Stable and predictable cash flows 98% of capacity is contracted Long-term contracts (14 year average) at fixed and indexed prices Over 90% of project debt with locked-in rates Debt amortized over the length of contracts High-quality creditworthy counterparts Strong financial profile and cash-flow generation 7

8 Financial Performance / EBITDA(A) 3 An estimated 39% EBITDA(A) CAGR 4 from 2013 to 2017 (run rate 3 ) 8

9 Growth Path 144 MW 81 MW Boralex aims to grow by more than 37% by the end of

10 2016 / 2017 Commissionings and Acquisitions Canada Wind 244 MW France Wind 117 MW Oldman (AWEC) 4 MW December 2016 Recent History (MW) Commissioned Acquired Total Niagara 230 MW December 2016 Port Ryerse 10 MW December 2016 Artois 23 MW December 2017 Chemin de Grès 30 MW December 2017 Plateau de Savernat I et II 16 MW December 2016 (12MW) and March 2017 (4MW) Mont de Bagny 24 MW August 2017 Voie des Monts 10 MW July 2017 Touvent 14 MW August Total This 361 MW will contribute to 2017 EBITDA(A) 10

11 Growth Opportunities 11 Europe In Europe (France and the UK), more than 850 MW of projects in development from Greenfield to advanced-stage including more than 150 MW (net) thru a recent JV with Infinergy in the UK (see appendix). In Denmark, in partnership with another developer, prequalified for the open-door program (+/- 240 MW). Canada Selected by the Innu nation as a partner to develop a 200 MW wind farm in Quebec. Over 100 MW of wind projects in BC of which 30 to 50 MW can be considered at an advanced stage. Recent creation of the Alberta Renewable Power Limited Partnership which intends bidding in the future Alberta Request For Proposals. 300 MW bid recently submitted in partnership with Gaz Metro in the Massachusetts request for proposals issued in March 2017 and for which results are expected in early This bid will be firmed up with hydroelectric power supplied by Hydro-Québec s generating fleet. A deep pipeline of projects at various stages of development

12 A compelling case for France Review of renewable energy (Re) objectives 20% 23% 32% 50% of Re in the final consumption of energy from now until 2020 (European objective) of the total energy consumption from renewables by 2020 (National objective) of Re in the final energy consumption by 2030 The targeted weight of nuclear in energy consumption in comparison to nearly 75% today by 2025 (Target implementation date under review) Onshore wind objectives by the end of 2023 Sept, ,908 MW 15,000 MW Between 21,800 MW and 26,000 MW 12

13 France / Value Drivers Excellent Positioning for Boralex France is lagging behind its European Union objectives, it s a willing host, a position reinforced by the election of the Macron government in May 2017 Onshore wind at grid parity Organized and integrated European market BORALEX S ADVANTAGES: Established presence: over 15 years, 3rd largest player, No 1 IPP Favorable positioning (competitive advantage) to acquire smaller projects Management philosophy allowing for the integration of entrepreneurs / projects France - Installed onshore wind capacity and target (GW s) Boralex Installed cumulative (MW s) Competitive cost of capital, low cost operator Established relationships: banks, manufacturers and others More than 850 MW of development projects in Europe (France and UK) - (see appendix) Long-term investment strategy 0 13

14 Why Boralex? Unique profile Unique positioning with significant immediate growth opportunities Strong and low volatility cash flows driven by long-term contracts Foreign exchange exposure hedged with long-term forward contracts in France Limited interest rate exposure locked-in long-term rates in line with maturities of contracts Proven track record of delivering its projects, on time and on budget, all technologies combined 225 MW of projects in our growth path A deep pipeline of projects at various stages of development Strong balance sheet and financial flexibility to fuel growth Payment of a quarterly dividend of $0.15 per share increased by 7.1% in February 2017 Attractive valuation and liquidity profile, part of the S&P/TSX Composite Index Boralex offers growth, a dividend yield and long-term value 14

15 15 Appendices

16 European Pipeline : more than 850 MW Scottish and Welsh assets 11 projects North-east 3 projects Infinergy wind project Boralex wind project Boralex solar project 16 West 3 projects South-west 1 project Center 9 projects South-east 4 projects

17 Enterprise value description 2 IFRS Proportionate Consolidation M$ % Net Debt 2, Convertible Debentures Market Cap 1, Minority Interest 24 1 Enterprise Value 4,377 M$ % Net Debt 2, Convertible Debentures Market Cap 1, Minority Interest 24 1 Enterprise Value 4,706 17

18 Segment breakdown (in millions of dollars except installed capacity and power production) POWER PRODUCTION GWh Weight GWh Weight GWh Weight GWh Weight Wind power stations % % % % Hydroelectric power stations % % % % Thermal power station 176 6% 160 6% 175 5% 160 5% Solar power stations 22 1% 22 1% 23 1% 22 1% % % % % REVENUES FROM ENERGY SALES M$ Weight M$ Weight M$ Weight M$ Weight Wind power stations % % % % Hydroelectric power stations 63 18% 59 19% 64 15% 59 16% Thermal power station 28 8% 23 8% 28 7% 25 7% Solar power stations 6 2% 6 2% 5 1% 5 1% % % % % EBITDA(A) M$ Weight * M$ Weight M$ Weight M$ Weight Wind power stations % % % % Hydroelectric power stations 48 18% 42 18% 48 16% 42 15% Thermal power station 7 3% 5 2% 8 3% 5 2% Solar power stations 4 1% 4 2% 4 1% 4 1% Sub-total % % % % Corporate IFRS September 30, 2017 LTM Proportionate Consolidation

19 Geographical breakdown (in millions of dollars except installed capacity and power production) POWER PRODUCTION GWh Weight GWh Weight GWh Weight GWh Weight Canada % % % % France % % % % United States % % % % % % % % REVENUES FROM ENERGY SALES M$ Weight M$ Weight M$ Weight M$ Weight Canada % % % % France % % % % United States 37 10% 31 10% 37 9% 31 9% % % % % EBITDA(A) M$ Weight * M$ Weight M$ Weight M$ Weight Canada % 74 38% % % France 85 36% % 85 31% % United States 27 12% 21 11% 27 10% 21 9% Others % % % % * Note : The EBITDA weight is calculated before the "Others" segment IFRS September 30, 2017 LTM Proportionate Consolidation

20 Footnotes Note Slide Comments and 17 Based on long-term production estimates (MWh). Maturities of contracts include renewal options when available. Volume statistics as at December 18, 2017 and representing 90 trading days on the TSX and alternative exchanges. Enterprise value is based on market capitalization (stock price of $23.18) on December 18, 2017). Net debt calculations as at September 30, 2017 The public float considers the number of shares outstanding less the shares owned by CDPQ and those controlled by the Kernaghan family as well as shares owned by the management and directors of Boralex as per public disclosure. This data is presented both under IFRS and proportionate consolidation. Under IFRS, the Seigneurie de Beaupré phase I and phase II projects are accounted for using the equity method and under proportionate consolidation they are consolidated at 50%.. A full reconciliation between IFRS and proportionate consolidation is provided in the non-ifrs measures section of the most recent Management Discussion and Analysis (MD&A) which is available at projections represent an estimated year-end run rate EBITDA(A) 3 8 The data shown corresponds to the actual annual data for the years For the 2017 run rate, Boralex has calculated the estimated EBITDA(A) amount that would be generated by all of its operating facilities for the year ended using the following assumptions: (a) the facilities have been operating on an annualized basis, and (b) production and operating expenses are in line with long-term expectations. In determining the run rate, which is an indicator of long-term forecasts, management does not take into account actual commissioning dates, changes in production or non-recurring items that occurred during the benchmark year. Apart from the difference resulting from the use of a twelve-month pro-forma for sites commissioned during the year, the achievement of the run rate is subject to all risk and uncertainty factors listed in III - Other elements of the quarterly MD&A as well as in Boralex's most recent annual report. 4 8 Compounded annual growth rate (CAGR) 20

21 Jean-François Thibodeau Vice-President & Chief Financial Officer Marc Jasmin Director, Investor Relations