A unique profile BLX Toronto Stock Exchange September 30, 2018
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. Combined basis Non-IFRS measure The combined information ( Combined ) presented in this presentation results from the combination of the financial information of Boralex Inc. ( Boralex or the Corporation ) under IFRS and the share of the financial information of the Interests (as defined in note 5 to Boralex s interim financial statements). The Interests represent significant investments by Boralex and although IFRS does not permit the consolidation of their financial information within that of Boralex, management considers that information on a Combined basis is useful data for investors. In order to prepare the Combined information, Boralex first prepared its financial statements and those of the Interests in accordance with IFRS. Then, the Interests in the Joint Ventures and associates, Share in earnings (losses) of the Joint Ventures and associates and Distributions received from the Joint Ventures and associates line items are replaced by Boralex s respective share (ranging from 50% to 59.96%) in the financial statement items of the Interests (revenues, expenses, assets, liabilities, etc.). We also refer you to the Non IFRS measures section for more information. It is important to note that the calculation method described here is identical to the method that was used as at December 31, 2017 and previously to establish the data identified as Proportionate Consolidation in previous MD&As. 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 most recent management's discussion and analysis of the Corporation. 2
Table of Contents Corporate Overview Capacity Profile and Contract Maturities 4 6 Financial Performance and Overview 8 Growth Path 11 Other Growth Opportunities Recent Acquisitions Why Boralex? Appendices Including Footnotes 12 14 16 17 3
Corporate Overview A highly reputable independent power producer Independent power producer with a presence in Canada (51% of installed capacity), in France (45%) and in the United States (4%) Nearly 30 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
Boralex in the World A leader in the Canadian market and France s largest independent producer of onshore wind power Sites in operation (1,853 MW) CANADA Wind Hydro Thermal Solar In operation FRANCE Under construction/development UNITED STATES 939 MW / 51% 832 MW / 45% 82 MW / 4% 829 MW 74 MW 35 MW 1 MW 805 MW 15 MW 82 MW 12 MW Over 25% capacity increase since the beginning of the year 5
Capacity Profile Wind and hydro More than 95 % of capacity Contracted capacity +/- 98 % of capacity under long term contracts 6
Contract Maturities (MWh Years) 939 MW 832 MW 82 MW 1,853 MW COMBINED Average length of contracts : 13 years 1 7% of MWh will become merchant within 5 years Long term contracts with limited merchant exposure over the next 5 years 7
Financial Performance / EBITDA(A) (2) Steady growth over the years 8
Current Financial Overview Financial Metrics (LTM Sept 30, 2018) Greatly-improved asset mix since 2013 In millions of $ unless specified IFRS Combined Revenue 455 518 EBITDA(A) 293 337 EBITDA(A) Margin 64% 65% Cfops 190 205 Enterprise Value (4) 4,736 5,346 794 MW of operating assets acquired 1,018 MW of pipeline acquired 585 MW commissioned Market Metrics (3) Outstanding shares: 89,1 M Public Float : 73,7 M Market Cap: 1,6 B Average daily volume (90 days) Shares : 456 K Annual dividend of $0.66 Two increases in 2018, totalling 10% Yield of 3,7% Predictable cash flows over the long term +/- 98% of capacity is contracted Long-term contracts (13 year average) at fixed and indexed prices Nearly 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 9
Recent Commissionings and acquisitions LTM - Wind 484 MW Since 2013 (MW) Commissioned Acquired Total Chemin de Grès 30 MW December 2017 Mont de Bagny 24 MW August 2017 Kallista 163 MW June 2018 Inter Deux Bos 33 MW September 2018 Artois 23 MW December 2017 Voie des Monts 10 MW July 2017 Invenergy 201 MW September 2018 2013 176-176 2014 102 196 298 2015 147-147 2016 36 4 40 S1 2017 4 230 (4) 234 S2 2017 87-87 2018 33 364 397 Total 585 794 1,379 These 484 MW will contribute between $100 M and $115 M to future annualized yearend run-rate EBITDA(A) 10
Growth Path 173 MW 41 MW Boralex has predictable growth 11
Other growth Opportunities Canada In Alberta, Boralex continues to act thru a partnership with Alberta Wind Energy Corporation (AWEC) and intends to participate in future rounds of request for proposals (RFP s). Europe In Europe (France and the UK), more than 1 000 MW of projects in development. Upon receiving all the necessary regulatory approvals, Boralex intends amongst others to participate in future Request for Proposals in France (RFP s) for onshore wind power which call for another +/- 2 400 MW between now and June of 2020 (considering non-allocated MW of previous rounds). Boralex has recently qualified two projects in the second and latest round of the onshore wind power Request For Proposals ( RFP s ) in France. Out of the 118 MW awarded, Boralex qualified 49 MW of projects. Namely the 14 MW Santerre project and the 35 MW repowering of the Cham Longe wind farm. An extended development pipeline to fuel future growth 12
Europe Other growth Opportunities On the heels of its first ever repowering project recently announced in France, Boralex is evaluating other such opportunities including projects recently acquired from Kallista (see map on page 14). Repowering projects typically have higher social acceptance which can lead to quicker regulatory approval. Also in France, the 15 MW Cruis solar project was recently selected in the third round of Request for Proposals (RFP s). Boralex currently holds the rights to a number of other solar development projects. Finally, Boralex is prequalified with a partner to bid the Dunkerque offshore wind project in an upcoming RFP in France. A bid will likely be submitted in the spring or summer of 2019. In the UK, Boralex has a portfolio of projects which are going thru the preliminary approval steps. These steps are necessary before negotiating any corporate PPA. In Denmark, together with a partner, Boralex has the right to develop a nearshore project (Jammerland Bay, +/- 240 MW). Once fully authorized, the project will have the possibility to participate in future auctions and obtain a fix feed in premium (contract for difference). United States Boralex is keeping a close eye on opportunities in the United States. Amongst others, Boralex is consistently monitoring potential acquisition and or partnerships opportunities with local developers. An extended development pipeline to fuel future growth 13
Recent acquisitions / Kallista 163 MW of operating wind farms 10 MW ready-to-build 158 MW of development projects including repowering opportunities and the eventual expansion of existing sites A significant expansion of the French footprint 14
Recent acquisitions / Invenergy Attractive long-term PPA s. Enhanced cash-flow generation profile combined with better long term strategic positioning and sustainability of payout ratio. Taking into account the acquisition of both Kallista s facilities and Invenergy s interests, Boralex anticipates an increase of approximately 5% in discretionary cash flows per share in 2019 and subsequently of nearly 10% around 2022. Gradual implementation of operational synergies is expected to lead to an expansion of overall EBITDA(A) margins. Boralex returns also to be enhanced by Facilities Management Agreements (FMA s). In addition to rights of first offer and tag along, the Transfer Rights Agreements for Des Moulins 1 and le Plateau 1 projects contain put and call rights pursuant to which Boralex may be entitled at the end of the initial term of the PPA to purchase the minority participation of the projects, providing it with significant upside from capturing additional residual value. 15
Why Boralex? Unique profile Unique positioning with immediate and identified growth opportunities Strong cash flows driven by long-term contracts Gradual implementation of operational synergies will lead to an improved cost structure 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 214 MW of projects in our identified growth path Many other growth opportunities at various stages of development Strong balance sheet, cash flow generation and financial flexibility to fuel growth History of steady dividend increases : Current dividend of $0.165 per quarter, increased by 10% in 2018, 7.1% in February 2017 and 7.7% in February 2016. Conservative payout ratio. Attractive valuation, multiple and liquidity profile. Part of the S&P/TSX Composite Index. Boralex offers growth, a dividend yield and long-term value 16
Appendices France Drivers And Objectives 18 Enterprise Value Description 20 LTM Data by Segment 21 LTM Data by Geography 22 Footnotes 23 17
A compelling case for France Review of renewable energy (Re) objectives 20% 23% 32% 50% of Re in the final consumption of energy from now until 2020 (European objective) of the total energy consumption from renewables by 2020 (National objective) of Re in the final energy consumption by 2030 The targeted weight of nuclear in energy consumption in comparison to nearly 75% today by 2025 (under review) Onshore wind objectives by the end of 2023 June 30, 2018 2018 2023 14,367 MW 15,000 MW Between 21,800 MW and 26,000 MW 18
France / Value Drivers Excellent Positioning for Boralex France is lagging behind its European Union objectives Aims to simplify regulatory framework it s a willing host, a position reinforced by the election of the Macron government in May 2017 Onshore wind at grid parity Organized and integrated European market BORALEX S ADVANTAGES: Established presence: over 15 years, 3rd largest player, No 1 IPP Favorable positioning to acquire smaller projects Management philosophy allowing for the integration of entrepreneurs / projects Competitive cost of capital, low cost operator Established relationships, quality wind sites secured More than 1,000 MW of development projects in Europe (France and UK) Long-term investment strategy 30 25 20 15 10 5 0 900 800 700 600 500 400 300 200 100 0 1 2 France - Installed onshore wind capacity and target (GW) 2 3 5 6 7 7 8 203 208 213 253 93 101 115 119 119 9 10 12 Boralex in France Installed cumulative (MW) 15 14 636 518 636 462 Between 22-26 832 19
Enterprise value description (3) IFRS Combined M$ % Net Debt 2,953 62 Convertible Debentures 144 3 Market Cap 1,607 34 Minority Interest 32 1 Enterprise Value 4,736 M$ % Net Debt 3,563 66 Convertible Debentures 144 3 Market Cap 1,607 30 Minority Interest 32 1 Enterprise Value 5,346 20
Segment breakdown LTM data (in millions of dollars except installed capacity and power production) September 30, 2018 LTM IFRS Combined 2018 2017 2018 2017 INSTALLED CAPACITY (MW)) Wind power stations 1634 88% 1184 84% 1634 88% 1184 84% Hydroelectric power stations 156 8% 156 11% 156 8% 156 11% Thermal power station 47 3% 47 4% 47 3% 47 4% Solar power stations 16 1% 16 1% 16 1% 16 1% 1 853 100% 1 403 100% 1 853 100% 1 403 100% POWER PRODUCTION (GWh) Wind power stations 2 405 74% 1 947 68% 2 989 78% 2 456 73% Hydroelectric power stations 637 20% 709 25% 637 17% 709 21% Thermal power station 157 5% 175 6% 157 4% 175 5% Solar power stations 22 1% 23 1% 22 1% 23 1% 3 221 100% 2 854 100% 3 805 100% 3 363 100% REVENUES FROM ENERGY SALES Wind power stations 369 82% 262 73% 432 83% 317 77% Hydroelectric power stations 52 11% 64 18% 52 10% 64 15% Thermal power station 29 6% 28 8% 29 6% 28 7% Solar power stations 5 1% 5 1% 5 1% 5 1% 455 100% 359 100% 518 100% 414 100% EBITDA(A) Wind power stations 302 87% 209 78% 342 88% 249 80% Hydroelectric power stations 35 10% 48 18% 35 9% 48 16% Thermal power station 8 2% 8 3% 8 2% 8 3% Solar power stations 4 1% 4 1% 4 1% 4 1% Sub-total 349 100% 269 100% 389 100% 309 100% Corporate (56) (39) (52) (37) 293 230 337 272 21
Geographical breakdown LTM data (in millions of dollars except installed capacity and power production) September 30, 2018 LTM IFRS Combined 2018 2017 2018 2017 INSTALLED CAPACITY (MW)) Canada 939 51% 738 52% 939 51% 738 52% France 832 45% 583 42% 832 45% 583 42% United States 82 4% 82 6% 82 4% 82 6% 1 853 100% 1 403 100% 1 853 100% 1 403 100% POWER PRODUCTION (GWh) Canada 1 516 47% 1 396 48% 2 100 56% 1 905 57% France 1 349 42% 1 043 37% 1 349 35% 1 043 31% United States 356 11% 415 15% 356 9% 415 12% 3 221 100% 2 854 100% 3 805 100% 3 363 100% REVENUES FROM ENERGY SALES Canada 232 51% 177 50% 295 57% 232 56% France 198 44% 145 40% 198 38% 145 35% United States 25 5% 37 10% 25 5% 37 9% 455 100% 359 100% 518 100% 414 100% EBITDA(A) Canada 172 59% 123 53% 215 64% 165 60% France 112 38% 83 36% 112 33% 83 31% United States 14 5% 27 12% 14 4% 27 10% Others (5) -2% (3) -1% (4) -1% (3) (0,01) 293 100% 230 100% 337 100% 272 100% EBITDA(A) % are calculated before «Others» 22
Footnotes Note Slides Comments 1 7 Based on long-term production estimates (MWh). Maturities of contracts include renewal options when available. 2 8 The data shown corresponds to the actual annual data for the years 2013 2017. The 2018 data is represented on a last-twelve-month (LTM) basis. All years are presented under IFRS and on a combined basis. Under IFRS, the Seigneurie de Beaupré phase I and phase II projects and the sites acquired from Invenergy, are accounted for using the equity method and on a combined basis they are consolidated at their respective ownership interest. A full reconciliation between IFRS and the data presented on a combined basis is provided in the non-ifrs measures section of the most recent Management Discussion and Analysis (MD&A) which is available at www.sedar.com. 3 9,20 Volume statistics are as at September 30, 2018 and represent 90 trading days on the TSX and alternative exchanges as computed by Bloomberg. Enterprise value is based on market capitalization calculated as at September 30, 2018 (stock price of $18.03). Net debt calculations are also as at September 30, 2018 The public float considers the number of shares outstanding less the shares owned by La Caisse de dépôt et placement du Québec and those owned by the management and directors of Boralex as per public disclosure. 4 10 The NRWF acquisition was announced in December 2016 but closed in January 2017. 23
Jean-François Thibodeau Vice-President & Chief Financial Officer 514 985-1348 jean-francois.thibodeau@boralex.com