Company Presentation. September 2018

Transcription

1 Company Presentation September 2018

2 Table of Contents Section 1: Company and Asset Overview Section 2: Highlights Section 3: Financial Performance 2

3 1. Company and Asset Overview

4 Terna Energy Company Overview Largest Greek renewable company 986 MW of installed capacity (1) c178 MW under construction or ready to build capacity GEK Terna Parent Holding 38% Terna Energy S.A. 22% G. Peristeris Chairman Geographic diversification with 19.9% of sales in Eastern Europe and US Renewables Energy Construction Strong financial profile with 2017 revenues of MM and EBITDA of MM Market capitalization: 710 MM as of 13th September 2018 Key Financials MM FY13 FY14 FY15 FY16 FY17 Q1 17 Q118 Sales Sales Growth 13% 13% 26% 14% 23% 10% 29% EBITDA EBITDA Margin 50% 47% 50% 51% 53% 64% 64% EBIT Net Income Cash Flow before Working Capital Changes n.a. n.a. Cash Flow Conversion (6) 100% 101% 105% 100% 102% n.a. n.a. Capital Expenditure n.a. n.a. Net Financial Debt Net Financial Debt / EBITDA 3.5x 3.4x 3.5x 4.8x 3.8x n.m n.m Poland Wind Bulgaria Wind FY 2017 By Geography USA (9.1%) USA Wind Greece Wind Solar Sales by Geography and by Business Unit Eastern Europe (10.8%) Greece (80.1%) By Business Unit Electric Energy Trading (4.9%) Construction (14.0%) Hydro Concessions e-ticket (18.5%) Energy from RES 62.6% 4

5 Asset Portfolio Overview 48 Projects Didimos Lofos Assets in Operation Energy Type Capacity (MW) COD PPA Life Left (Y) Energy Type Capacity (MW) COD PPA Life Left (Y) Greece Eleousa Lefkes Kerasia W/F Eressou Ipsoma Fourka Mitoula Hilos Derveni-Mikro Derveni-Sliva Xirovouni Greece Greece Tsilikoka Lefkes Kerasia Tsouka Tsougari Dafnozonara Profitis Elias Mavrovouni (1) Pyrgari Krekeza Didimos Lofos Raxoula (1) Perdikokorifi Vathichori Station I Dafnozonara Kastri- Kokkalia Karavi- Alogovouni Mytoula Louzes (PV) Chonos Vathichori Station II Timpano - Tripiri Louzes Gouri Vathihori II Mavrovouni Loggarakia Skopia Psiloma Soros Servouni - Vorina Litharia Pyrgari Tsouka Tsougari Profitis Elias Tsilikoka Servouni - Kalogeriki Rachi Chylos USA 293 Rhodos Mountain Air, Idaho Ksirovouni Fluvanna I, Texas Gouri Poland 102 Loggarakia Chelmza Rahoula Pashalies (I + II) Raxoula (2) Chojnice Krekeza Derveni Czarnozyly St. George Island Mavrovouni (2) Gorzkowice Stavroti Vigla Louzes Krzyzanow Eleousa Makow Perdikokoryfi Chonos Poland Bulgaria USA Adendro Nasielsk St. George Project Sieradz Mavroplagia Kastro Szadek Mougoulios Tuchola Plagia Psiloma Bulgaria 30.0 Scopia Karapelit Raxoula (3) Vranino Eressou Ipsoma - Fourka Total Portfolio: Legends Wind Energy Solar Energy Hydroelectric Projects 5

6 Portfolio Diversified portfolio of RES projects Expansion outside Greece Status Wind (MW) Greece 561 Poland 102 In operation Bulgaria USA 293 Under construction (or ready to built) 177 Greece 21 USA 158 SHPS & Pump Storage (MW) 18 P/V (MW) 8.5 Biomass & Co-generation (MW) With production licence Application for production license filed

7 Key Investment Highlights An Established Renewables Energy Platform with Strong In-House Capabilities, Proven Track Record and Attractive Growth Potential 1 Large-scale and Diversified Renewable Energy Platform The largest renewable energy company in Greece with presence in the US, Poland and Bulgaria Vertically integrated with strong in-house competencies and capabilities in development, EPC, financing and operation of renewable energy projects (wind, hydro, solar, biomass, waste management) Large operating portfolio of 42 onshore wind farms (959 MW), 3 solar plants (8 MW), 2 hydro (18 MW) 1 biomass (1 MW) 2 High-quality Renewable Asset Portfolio Young asset portfolio with a weighted average operating life of c. 5 years and stable operational performance (c. 48% of installed capacity commissioned in the past 5 years) Stable historical availability and load factors, supported by best in class in-house O&M and management capabilities Best-in-class technology supplied mainly by top tier international contractors (Gamesa, Siemens, Vestas) 3 Stable Regulatory Framework and Attractive Near Term Renewable Capacity Growth in the Recovering Greek Economy New regulatory framework, intended to bring Greece in line with other European market-based reforms, offering some of the most attractive financial incentives for onshore wind projects across Europe Opportunity to grow through competitive tenders Greece will auction an estimated total capacity of 2.6 GW (1) between 2018 and Stable and Predictable Cash Flow Generation Supported by Longterm Contracted Assets Stable cash flow derived from a mix of off-take agreements (PPAs) and regulated feed-in-tariffs (FiTs) with high credit quality counterparties Young asset fleet with weighted average remaining contracted life of c. 19 years Strong cash yielding profile supported by balanced financing strategy 5 Success Story of Organic Growth and Value Creation with a Focused Strategy and Attractive Pipeline Strong track record of organic growth with 442 MW developed since 2013 in 4 countries (Greece, Poland, Bulgaria and the US) Significant development pipeline of MW (of which MW are currently under construction and MW are ready to be built) 6 Fully Integrated Platform with Proven Management Team Experienced and highly qualified team of more than 200 staff with development, EPC, asset management and financing expertise Proven management team led by founder and executive chairman George Peristeris with extensive renewable energy and power experience Current management team has been responsible for the growth of Terna Energy since the inception of the Company Notes: MW of Wind and MW of Solar have already been auctioned on 2 nd July 2018 and announced on 4 th July

8 Vertically Integrated and Efficient Platform Fully Integrated Platform, With Proven Capabilities Across the Whole Value Chain 5 Asset Operation and Management 1 Pre-Development Phase Accounting, financial reporting Analysis and selection of location / market / country Licensing and regulatory documentation management Load factor assessment Operation and monitoring services Preventive and corrective maintenance Improvement plans and management of spare parts Permitting, public consultations and coordination with local authorities Land agreements Secure power grid connection and capacity 4 Construction 2 Development / Permitting Preconstruction Technical feasibility Mapping and site preparation Construction Civil works Mechanical and electrical installation Engineering Evacuation infrastructure Commissioning Project design: scheduling and budget Permits and licenses (administrative, legal, environmental, social) Technology selection (WTG / PV Panels, inverters) Supply and O&M / EPC agreements 3 Financing Economic and financial analysis / reporting Capital structure optimization Relationships with debt providers (both public capital markets and financing institutions) Draft and negotiate financing agreements 8

9 2. Highlights

10 High-Quality Renewable Asset Portfolio Young Asset Portfolio with a Weighted Average Operating Life of 5 Years # of operating assets as of 30 April % 13% 11% 24% Key Considerations Young asset portfolio with a weighted average operating life of c. 5 years 27 Breakdown of Operating Assets (1) by Commissioning Date c. 50% of the assets (in terms of total capacity) been commissioned in the past 5 years Stable and industry leading load factors, supported by best in class practices, inhouse O&M capabilities and management expertise Load factor of 35.1% in Q YTD % of total installed capacity Load Factors Evolution(2) Substantially higher than a number of other European wind markets Terna Energy holds a #1 position by market share in Greece with 561 MW of installed capacity As the first mover in wind energy, the Company secured the best locations for its farms Strong operational performance is supported by best-in-class technology, supplied mainly by top tier international contractors; Gamesa, Siemens and Vestas 27,0% 25,9% 28,2% 28,7% 28,9% 35,1% 2013A 2014A 2015A 2016A 2017A Q1 2018A Availability Notes: Wind assets, 3 Solar assets, 2 Hydro assets and 1 Biomass asset 2. Load factors refer to Terna Energy Total including Wind, Mini Hydro and Solar. 10

11 Stable and Predictable Cash Flow Supported by Long-term Contracted Assets Stable Cash Flow Derived From a Mix of Regulated Feed-in-Tariffs (FiTs) and Off-Take Agreements (PPAs) Weighted Average Remaining Contracted Life (1) Illustrative Terna Energy Portfolio Contract Profile (1) Years MW Source: Company information 17,5 Weighted Average: 18.6 years ,6 0 Δεκ-18 Δεκ-21 Δεκ-24 Δεκ-27 Δεκ-30 Δεκ-33 Δεκ-36 Δεκ-39 Δεκ-42 Δεκ-45 Contracted Merchant Key Considerations ,4 14,5 Stable cash flow derived from a mix of regulated feed-in-tariffs (FiTs) and off-take agreements (PPAs) Portfolio with c years of remaining contracted life Contracts in place with high credit quality counterparties; Greece: LAGIE (market operator) US: commercial banks Bulgaria: Bulgaria Energy Holdings (local state owned utility) Poland: local utilities Cash yielding / unlevered portfolio beyond the contractual life Notes: 1. Includes Wind, Solar and hydro technologies and includes also plants under construction as of May 2018 (included with an average contracted life of 25 years PPA maturity) 11

12 Success Story of Organic Growth and Value Creation Strong Track Record Of Organic Growth, Resulting in Increasing EBITDA and Cash Flow Conversion Installed Capacity MW Installed capacity Key Considerations Terna Energy has delivered strong growth historically for the period between ; increased its installed capacity at a 16% CAGR (from 544 MW to 986 MW) EBITDA 2013A 2014A 2015A 2016A 2017A ΜΜ 50% 47% 50% 51% 53% 147,5 115,8 99,3 69,9 74,1 EBITDA grown its installed capacity in Greece at a CAGR of more than 17% (from 302 MW to 561 MW) delivered projects on budget and on time Strong EBITDA growth reflecting the increase in installed capacity EBITDA margins have been increasing from 45% to 53% 2013A 2014A 2015A 2016A 2017A EBITDA Margin Cash flow conversion (1) 100% % 101% 105% 100% 102% Cash Flow Conversion High cash flow conversion increasing together with the delivery of new capacity 2013A 2014A 2015A 2016A 2017A Notes: 1. Defined as cash flow before working capital changes over EBITDA 12

13 Terna Energy Market Positioning Strong Operational and Technical Excellence Skilled Engineering Team Founder and shareholder, as well as key senior managers have civil and mechanical engineering backgrounds Large technical team of over 80 engineers Construction Synergies Very strong operational and technical capabilities given backbone of the construction focused parent GEK Terna In-house construction of projects Track record of projects completed on time and on budget Maintenance & Insurance Coverage Maintenance agreements with the turbine manufactures working with Terna Energy s engineering teams ensures transfer of valuable know-how to the company Full insurance coverage both for damages and revenue loss Turbines come with 5-year guarantees; expected life of c.25 years 13

14 Terna Energy Market Positioning A Stabilized Renewable Regulatory Framework in a Recovering Greek Economy Government remains committed to its RES target for 2020 By resolving the RES deficit, the new regime offers a stable framework for the long term GW Target Reached 2,2 2,2 5.4 GW Remaining (2) (2) 7,5 2,1 MM (152,6) (84,3) (241,7) 42,5 Solar PV Realised Solar PV Wind Target Realised Wind (576,1) Notes: 1. IMF Forecasts World Economic Outlook, April As of June

15 With a Focused Growth Strategy and Attractive Pipeline Focused Growth Strategy with Attractive and Visible Pipeline A Successful Growth Story So Far With a 2 GW Target by 2025 The Company has a strong and credible 7-year growth MW plan to reach c. 2 GW (by 2025) This can be comfortably achieved through: Competitive tenders in Greece (2.6 GW A 2018E 2019E 986 Greece Eastern Europe (1) between 2018 and 2020 Additional capacity in the US Additional capacity of 241 MW in pre- / under- construction phase Existing production license for c. 2.4 GW of USA 2025E additional capacity With an Attractive and Visible Pipeline to Achieve it Project Type UNDER CONSTRUCTION Capacity (MW) Total Project Cost* MM Cash Grant/Tax Equity MM (1) Project Finance Debt MM (2) Equity / Cash MM (3) COD 178 MW Fluvanna 2 (USA)* Wind 158 MW H Servouni Wind 19 MW Epirus Waste Management Waste 1.5 MW PRE-CONSTRUCTION PROJECTS MW Peloponnese Waste Management Waste 2.4 MW Evoia SPA (A+B phase) TOTAL HIGH PRIORITY Wind 100 MW 281 MW Notes: MW of Wind and MW of Solar have already been auctioned on 2nd July 2018 and announced on 4th July MM PPP agreement signed on 14 June for 28 years which will be split between a two-year construction period and a 26-year operation period MW of Wind and 3.9 MW of Waste 4. 1,605 MW of Wind, 761 MW of SHPS and 18 MW of Solar 5. 3,263 MW of Wind, 3,444 MW of SHPS, 15 MW of Solar and 19 MW of Biomass and Co-generation * Total project cost = (1)+(2)+(3) = Cash grant/tax equity + Project finance Debt + Equity 15

16 Terna Energy Market Positioning Rapid Deleveraging from EBITDA Growth and High Cash Flow Conversion Steady 23% EBITDA CAGR Strong Growth in Realized EBITDA Long term visibility on volume off takes Contracted prices MM Track record of project developments Outstanding cash flow conversion No maintenance capex Rapid deleveraging on a like-for-like basis MM EBITDA 2012A 2013A 2014A 2015A 2016A 2017A Cash Flow Conversion (1) 59% 63% 80% 105% 100% 102% Cash Flow Conversion 31,0 44,0 59,2 103,8 116,2 150,0 Notes: 1. Cash Flow Conversion = Operating Cash Flow / EBITDA 2. Operating Cash Flow after Working Capital Changes 2012A 2013A 2014A 2015A 2016A 2017A Operating Cash Flow (2) 16

17 3. Financial Performance

18 Strong Financial Performance million SALES EBITDA EBIT NET INCOME bm Segments FY 17 FY 16 Ch% FY 17 FY 16 Ch% FY 17 FY 16 Ch% FY 17 FY 16 Ch% Energy from RES Construction Electric Energy Trading Concessions (e-ticket) n/a n/a Total

19 Strong Financial Performance Run-rate EBITDA increases with capacity Installed Capacity and Revenue MM EBITDA and EBITDA Margin MM % 50% 47% 50% 51% 53% A 2013A 2014A 2015A 2016A 2017A Revenue MW Installed Capacity 2012A 2013A 2014A 2015A 2016A 2017A EBITDA % EBITDA Margin 19

20 Capital Expenditure Historical Capital Expenditure MM 217,0 47,0 56,4 79,7 145,5 229,2 2012A 2013A 2014A 2015A 2016A 2017A No maintenance capex Maintenance costs accounted for as operating expenses on the Income Statement Typical Funding Structure Project Debt 45% 50% Project Debt c.70% Subsidised Non-Subsidised Equity/Group Cash 25% 30% Government Grants 25% 30% Equity/Group Cash c.30% All capex is for expansion Projects without grants benefit from higher contracted tariffs, allowing to raise more project debt and to de-lever faster 20

21 2017 Performance Update Key drivers MW 33% 32% Revenues MM +19% Continued increase in capacity (+18% y-o-y) Installed Capacity % Load Factor Revenue High load factor Energy results negatively impacted by weather conditions, in H1 in particular EBITDA and EBITDA Margin MM Renewables Construction 72% 73% 9.5% 29.7% ,5 6,4 Outstanding performance in both renewables and construction segments Extraordinary levels of EBITDA margins in the renewables segment with 73% for the EBITDA % EBITDA Margin 21

22 APPENDIX Financial Data

23 23 Profit & Loss FY 2017 in '000 1/1 31/12 1/1 31/12 Continued activities Net Sales Cost of sales ( ) ( ) Gross profit Administrative expenses (14.199) (12.269) Research & development expenses (1.186) (1.152) Other income/(expenses) Operating results Net Financial Income/(Expenses) (47.226) (39.448) Gains / (Losses) from financial instruments measured at fair value (1.101) 989 Pre tax profit Taxes (19.895) (14.912) Net Profit from continued activities Other comprehensive income/(losses) to be reclassified to profit or loss in subsequent periods: Foreign exchange differences from incorporation of foreign units (891) (16) Income tax effect Income/(expenses) from hedging of cash flows (873) Income tax effect (676) 452 Other comprehensive income/(losses) not to be reclassified to profit or loss in subsequent periods: Gains on defined benefit plans Income tax effect (25) (7) Expenses of capital increase (61) (162) Other comprehensive gains/(losses) for the period net of tax 818 (578) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD Net results attributed to: Shareholders of the parent from continued activities Minority interest from continued activities Total comprehensive income attributed to: Shareholders of the parent from continued activities Minority interest from continued activities Earnings per share (in Euro) From continued activities attributed to shareholders of the parent 0,3181 0,1960 Average weighted number of shares 23 Basic

24 Balance Sheet in '000 31/12/ /12/2016 ASSETS Fixed Assets Investment Property Intangible assets Participations and other long-term financial assets Inventories Trade receivables Other current assets Cash & cash equivalents TOTAL ASSETS LIABILITIES AND EQUITY Share Capital Other Equity Total Shareholders' equity Minority Interest TOTAL EQUITY Long term bank debt Provisions/Other L/T Liabilities Sort term bank debt Other S/T Liabilities TOTAL LIABILITIES TOTAL LIABILITIES AND EQUITY

25 25 CASH FLOW CASH FLOW STATEMENT - FY 2017 in '000 1/1 31/12/2017 1/1 31/12/2016 Profit before tax / - adjustments for: Depreciation Provisions Impairments Interest and related income (2.569) (1.457) Interest and other financial expenses Results from intangible and tangible assets and from investment property 187 (156) Share of loss from associates Results from derivatives (12) (1.069) Results from participations and securities 2 (586) Amortization of grants (7.901) (10.868) Foreign exchange differences (821) Operating profit before working capital changes Inventories (163) (1.181) Trade receivables (23.937) Prepayments and other short term receivables (60.856) Suppliers (21.617) Accruals and other short term liabilities (2.470) Other long-term receivables and liabilities (12.793) Income tax payment (16.330) (9.437) Net cash flows from/(used in) operating activities Cash flow from investing activities: (Purchases)/sales of tangible and intangible fixed assets ( ) ( ) Interest and related income received Sale of publicly traded shares (Purchases) / sales of participations and securities (50) Net change in provided loans (500) - Rebate of grants (63.777) - Net Cash flows (used in)/from investing activities ( ) ( ) Cash flows from financing activities Purchase of Treasury Shares (2.070) (3.250) Share capital return (5.239) - Proceeds from share capital increases of subsidiary Net change of long term loans Net change of short term loans (45.777) Dividends paid (10.561) (8.697) Interest and other financial expenses paid (47.091) (34.479) Change in financial liabilities - (2.882) Net Cash flows from/(used in) financing activities Effect of exchange rate changes on cash & cash equivalents (3.411) Net increase/decrease in cash Cash & cash equivalents at the beginning of the period Cash & cash equivalents at the end of the period

26 Disclaimer We have prepared this document solely for informational purposes. You should not definitively rely upon it or use it to form the definitive basis for any decision, contract, commitment or action whatsoever, with respect to any proposed transaction or otherwise. You and your directors, officers, employees, agents and affiliates must hold this document and any oral information provided in connection with this document in strict confidence and may not communicate, reproduce, distribute or disclose it to any other person, or refer to it publicly, in whole or in part at any time except with our prior written consent. If you are not the intended recipient of this document, please delete and destroy all copies immediately. We have prepared this document and the analyses contained in it based, in part, on certain assumptions and information obtained by the directors, officers, employees, agents, affiliates and/or from other sources. We and our affiliates and our and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this document and any errors therein or omissions therefrom. Neither we nor any of our affiliates, or our or their respective officers, employees or agents, make any representation or warranty, express or implied, that any transaction has been or may be effected on the terms or in the manner stated in this document, or as to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. Any views or terms contained herein are preliminary only, and are based on financial, economic, market and other conditions prevailing as of the date of this document and are therefore subject to change. We undertake no obligation or responsibility to update any of the information contained in this document. Past performance does not guarantee or predict future performance. This document and the information contained herein do not constitute an offer to sell or the solicitation of an offer to buy any security, commodity or instrument or related derivative, nor do they constitute an offer or commitment to lend, syndicate or arrange a financing, underwrite or purchase or act as an agent or advisor or in any other capacity with respect to any transaction, or commit capital, or to participate in any trading strategies, and do not constitute legal, regulatory, accounting or tax advice to the recipient. We recommend that the recipient seek independent third party legal, regulatory, accounting and tax advice regarding the contents of this document. This document does not constitute and should not be considered as any form of financial opinion or recommendation by us or any of our affiliates. Notwithstanding anything herein to the contrary, each recipient hereof (and their employees, representatives, and other agents) may disclose to any and all persons, without limitation of any kind from the commencement of discussions, the U.S. federal and state income tax treatment and tax structure of the proposed transaction and all materials of any kind (including opinions or other tax analyses) that are provided relating to the tax treatment and tax structure. For this purpose, "tax structure" is limited to facts relevant to the U.S. federal and state income tax treatment of the proposed transaction and does not include information relating to the identity of the parties, their affiliates, agents or advisors. This document is provided by Terna Energy ABETE, you must contact Terna Energy ABETE regarding this document or any of the information contained herein. 26

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