period ended 30 september 2021 nesf half year results
TRANSCRIPT
Period ended 30 September 2021
Interim Results Presentation
Speakers & contents
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DevelopmentInvestment Management Asset Management
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Introduction to the NextEnergy Capital group
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Operating portfolio
United Kingdom
International (NextPower III portfolio)
Italy (Solis portfolio)
895MW
99
539GWh
$50m
Interim financial highlights▪
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26%
3.58p 1.0x
44%
7.9%
6.2%
103.1p£607m
7.16p
Key interim period highlights
£67m +4.6%
299,000 229,000
£29m
£100m +5 $50m
539GWh
7.16p
Track record of operating outperformance
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+1.1% £0.9m
Portfolio growth and diversification since FY results
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50MW $50m0.7MW250MW 50MW
NAV bridge (30 September 2021)
98.9p 103.1pOrdinary NAV per share (p)
Portfolio bridge (30 September 2021)
NAV sensitivities (30 September 2021)
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Discount rate (-/+ 0.5)
NAV per share
Long term power price (-/+ 10%)
Energy generation (-/+ 5%)
Inflation (-/+ 0.5%)
Operating costs (-/+ 10%)
Optimised capital structure
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Eq
uit
y F
ina
ncia
l d
eb
t fa
cilit
ies
Pre
fere
nce
sh
are
s
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£283m
£190m
£79m £14m
£86m
Ordinary share dividends
1.0x
7 years5.25 (3)
6.25 6.31 6.426.65
6.87 7.05 7.16 (4)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22
(Pe
nce
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7.16p
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1.3x
Forecast power prices (real 2021)
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35.0
45.0
55.0
65.0
75.0
85.0
95.0
105.0
115.0
125.0
2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041
(£/M
Wh
) NAV Mar 21 - Weighted Average
Blended Power Curve (real 2021)
NAV Sep 21 - Weighted Average
Blended Power Curve (real 2021)
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041
(€/M
Wh
) NAV Mar 21 - Italian Portfolio Power
Curve (real 2021)
NAV Sep 21 - Italian Portfolio Power
Curve (real 2021)
45.4
49.9 48.2 50.4 51.7
52.8 49.6
53.7
64.7
56.6
56.0
71.6
90.4 89.7
95.3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
£/M
Wh
% Hedged
ICE Forward Curve for S22
Weighted Average Hedge Price
Nominal Advisor Curve
Hedge Price
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Protecting future cash flows
Example: Hedging Strategy for Summer 2022
96%
2021/22 2022/23 2023/24 2024/25
75% 59% 18%
Strategic forward focus
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Enhanced dividend cover - Continue to strengthen dividend cover through future power price hedges2
Create growth and diversification - Expand NESF portfolio into international assets and battery storage1▪
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Drive asset performance - Continue NESF’s operational outperformance 3
£300m pipeline
NESF going forward
Q&A
Stalbridge solar farm: 5MW
Dorset
AppendixKentishes: 5MW
Essex
Introduction to NextEnergy Solar Fund
NAV
£607m
GAV
£1,087m
NAV/share
103.1p
NESF group structure
NESF board of directors
KEVIN LYON PATRICK FIRTH VIC HOLMESJO PEACEGOOD
Chairman
▪ Kevin has over 30 years
of experience in fund
management,
investment banking and
private equity and is
Chairman of NextEnergy
Solar Fund
Non-executive Director
▪ Patrick has almost 30
years' experience
advising management
companies, general
partners and investment
companies and is
Chairman of the Audit
Committee
Senior Independent Director
▪ Vic has been involved in
the financial services
industry for over 30 years.
He is a FCCA, a Senior
Independent Director and
Chairman of the
Nomination Committee
Non-executive Director
▪ Jo has over 20 years of
experience in the
investment management
sector with a specific
focus on listed funds,
private equity and third-
party service providers
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Board of directors of the Investment Manager / AIFM
JEREMY THOMPSONJOSEPH D’MELLO CHARLOTTE DENTON
Jeremy has over 30 years
of multiple-sector
experience with a focus on
engineering, energy and
finance. Jeremy currently
serves as a non-executive
director of NextEnergy
Capital Investment
Management Limited
Joseph has 30 years of
experience as a chartered
accountant. As Director of
Fund Management at
NextEnergy Capital Ltd,
Joseph is responsible for
fund reporting, valuation,
as well as tax structuring
and legal aspects of funds
Charlotte has over 25 years
experience in the global
private client wealth
management sector.
Charlotte currently serves
as a non-executive director
of NextEnergy Capital
Investment Management
Limited
NextEnergy Capital Group – NESF investment committee
Michael is Founding Partner
and Group CEO of
NextEnergy Capital.
GIULIA GUIDI ROSS GRIER
ALDO
BEOLCHINIFRIEDHEIM
BONTE-
MICHAEL
Giulia is the Head of
Environmental, Social and
Governance (ESG) at
NextEnergy Capital with
15+ years’ experience in
the financial sector.
Ross is the UK Managing
Director of NextEnergy
Capital.
Aldo is Managing Partner
and Chief Investment Officer
of the NextEnergy Capital
Group.
Valuation of investment portfolio
Discount rates (Remain unchanged as at 30 September 2021)
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Valuation movements were primarily driven by the following factors:
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103.1p
£1,087m
£607m
Ongoing Covid-19 response
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Long term debt repayment profile
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£0
£1
£2
£3
£4
£5
£6
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
(£'m
)
Total Principal Repayment (Nominal) Total Interest Payment
Summary statement of comprehensive income
Income Statement for the six months ended 30 September2021
£m
2020
£m
Income 29.9 32.6
Movement in Investment Portfolio value 23.5 (0.9)
Total net Income 53.4 31.7
Total expenses (8.0) (8.0)
Profit/(loss) and comprehensive income/(loss) 45.5 23.6
Earnings per ordinary share - basic 7.74p 4.04p
£29.9m 7.74p
Financial debt outstanding (30 September 2021)
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26% 44%
Investment portfolio diversification (30 September 2021)
Historical power prices (12 months)
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The Italian Solis portfolio
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Business Case: Solis Acquisition and performance
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Preference shares
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Alternative Funding Sources - Comparison of Fully-Costed Cost of Capital
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Investment policy limits
Investment Objective
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Technological Limit
Private Equity Limit
Geographical Limit
Development Limit
Single Asset Limit
Gearing Level
• 0.3% of GAV currently
invested
• 3.2% of GAV currently
invested
• 13.9% of GAV
currently invested
non-UK
• 0.5% of GAV currently
invested outside
OECD through NPIII
• Currently constitutes
2.3% of GAV
• The largest
investment in one
solar asset currently
constitutes 4.0% of
GAV
• Gearing (including
preference shares)
stands at 44%
NEC’s mission and sustainability framework
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NEC sustainable investment: policy & commitments
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▪ Publicly available
SDFR
▪ Principles and Commitments
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climate change
TCFD
biodiversity
human rights
▪ Integration
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leadership groups
best practice
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abide by
them
ESG integration into the NESF investment process
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Supply Chain DDQ
5-year track record
Solar growth potential
Global installed capacity mix, 2019 and 2050
832GW 7,749GW
Predicted global solar capacity growth, 2019 and 2050
2019 2050
▪ Immediate need to address global climate change
▪ Increase in global electrification, powered by clean energy
▪ Reduction in cost of renewable technologies
▪ Global government policy shift towards Net Zero
▪ Reduction in carbon emitting energy sources
Renewables predicted to be main energy source in future
What will drive this demand?
The NextEnergy Foundation and selected projects
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USA
PERU
COLOMBIA
THE ANDES
UNITED KINGDOM ITALY
SIERRA LEONE
GHANA
NIGERIA
ZIMBABWE
ZAMBIA
TANZANIAMALAWI
RWANDA
UGANDA
KENYA
ETHIOPIA
JORDAN
SYRIA
AFGHANISTAN
PAKHISTAN
INDIA
NEPAL
NESF has donated
a total of £130,00
NESF investment case - detail
Important notice