Company Presentation October 2017 - Terna Energy
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Company Presentation October 2017
Table of Contents
Section 1: Company and Asset Overview
Section 2: Highlights
Section 3: Financial Performance
2
1. Company and Asset Overview
Terna Energy Company Overview
14%
• Largest Greek renewable company
• 786 MW of installed capacity(1) 40% Terna 26%
GEK Terna G. Peristeris
Parent Holding Energy S.A. Chairman
• 194MW under construction or ready to build capacity
Geographic diversification with 35.9% of sales in Eastern Energy
• Renewables
Construction
Europe and US
• Strong financial profile with 2016 revenues of €225.6 MM Poland Bulgaria USA Greece
and EBITDA of €115.8 MM
Wind Wind Wind Wind Solar Hydro
• Market capitalization: €448 MM as of 12 September 2017
Key Financials Sales by Geography and by Business Unit
FY 2016
CAGR
€ MM 2012A 2013A 2014A 2015A 2016A
‘12 – ‘16 By Geography By Business Unit Concessions
USA e-ticket
Revenue 124.0 139.6 158.2 198.6 225.6 16.1% Electric Energy
(11.7%) (5.6%)
Revenue Trading
63% 12.9% 13.0 25.5% 13.6% (14.0%)
Growth Eastern
EBITDA 53.0 69.9 74.0 99.3 115.8 21.6% Europe
(24.2%) Energy
Construction
EBITDA Growth 60.6% 32.1% 5.7% 34.2% 16.6% from
(13.4%)
RES
EBITDA Margin 42.7% 50.1% 46.8% 50.0% 51.3% Greece 67.0%
(64.1%)
Notes:
1. As of March 2017
4
Asset Portfolio Overview
46 Projects Assets in Operation
Didimos Lofos Energy Type Capacity (MW) COD PPA Life Left (Y) Energy Type Capacity (MW) COD PPA Life Left (Y)
Greece 522.7 Greece
Greece Mitoula Tsilikoka 10.2 2000 2.6 Dafnozonara 11.2 2011 20.7
Hilos Tsouka Tsougari 12.0 2000 2.7 Mavrovouni (1) 19.6 2011 20.8
Eleousa
Derveni-Mikro Profitis Elias 11.2 2001 3.4 Krekeza 30.0 2011 21.0
Lefkes Kerasia W/F Eressou Ipsoma Fourka Derveni-Sliva
Pyrgari 5.4 2001 3.8 Raxoula (1) 30.0 2011 21.0
Xirovouni
Didimos Lofos 26.0 2005 14.6 Vathichori Station I 6.0 2011 21.0
Perdikokorifi 14.5 2006 15.5 Louzes (PV) 1.1 2012 21.8
Dafnozonara Kastri- Kokkalia Mytoula 34.2 2006 15.6 Vathichori Station II 1.5 2013 22.2
Karavi- Alogovouni
Chonos 4.5 2006 15.8 USA 288
Timpano - Tripiri Psiloma Soros Chylos 11.7 2013 16.1 Mountain Air, Idaho 138.0 2012 22.5
Servouni - Vorina Litharia
Louzes Skopia Pyrgari Rhodos 17.9 2014 16.2 Fluvanna I, Texas 150.0 2017 26
Gouri Tsouka Tsougari
Ksirovouni 6.3 2014 16.2 Poland 102
Profitis Elias
Vathihori II Tsilikoka Gouri 32.2 2014 16.6 Chelmza 4.0 2015 18.5
Mavrovouni Servouni - Kalogeriki Rachi
Loggarakia Loggarakia 18.0 2014 16.8 Chojnice 6.0 2015 18.5
Rahoula Pashalies (I + II) Raxoula (2) 8.0 2014 16.8 Czarnozyly 16.0 2012 14.5
Krekeza Derveni 24.0 2014 17.1 Gorzkowice 12.0 2011 13.9
St. George Island Mavrovouni (2) 8.0 2015 17.5 Krzyzanow 20.0 2011 13.6
Louzes 24.0 2008 17.8 Makow 12.0 2014 17.4
Stavroti Vigla
Eleousa 6.6 2008 18.1 Nasielsk 10.0 2012 22.3
Perdikokoryfi Adendro 1.0 2016 18.3 Sieradz 8.0 2013 15.6
Chonos
St. George Project 73.2 2016 18.8 Szadek 8.0 2012 21.8
Mavroplagia - Kastro 17.2 2017 19.2 Tuchola 6.0 2015 18.5
Mougoulios 16.5 2017 19.5 Bulgaria 30.0
Poland Bulgaria USA Plagia - Psiloma 14.9 2017 19.5 Karapelit 12.0 2012 15.1
Scopia 20.0 2010 19.9 Vranino 18.0 2013 15.8
Raxoula (3) 6.0 2017 20.0 Total Portfolio: 942.7
Legends
Wind Energy Solar Energy Hydroelectric Projects 5Terna Energy Market Positioning
1 The Leading Greek Renewable Company in attractive market
2 Attractive Core Asset Portfolio with Complementary Diversification
3 Strong Operational and Technical Excellence, Vertical Competence
4 A Stabilized Renewable Regulatory Framework in a Recovering Greek Economy
5 An Attractive and Value Creating Growth Story
6 Rapid Deleveraging from EBITDA Growth and High Cash Flow Conversion
7 A Proven Experienced, and Professional Management Team
62. Highlights
Terna Energy Market Positioning
1 The Leading Greek Renewable Company in attractive market
The Leading renewable energy provider Terna Energy Historical Load Factors
• 943 MW globally, of which 909 MW in wind
• 523 MW in Greece (#1 market share) 26-30%
24%
• As the first mover in wind energy, Terna Energy
secured the best wind load locations for its farms
• Allocation on a first come first serve basis
Best-in-class load factor
• Stands at 30.2%(1)
• Substantially higher than a number of other
European wind markets
Terna European Wind
Market
Notes:
1. As of March 2017
8Terna Energy Market Positioning (cont’d)
2 Attractive Core Asset Portfolio with Complementary Diversification
• Asset portfolio well diversified geographically Portfolio Installed Capacity (1)
By Country By Type
−Greece: 523 MW, 31 locations SHPS & Pump Storage P/V
USA
(288 MW, 31.0%) (18 MW, 2.0%) (9 MW, 0.9%)
−USA: 288 MW, 2 location
Bulgaria Biomass &
−Poland: 102 MW, 10 locations (30 MW, 3.0%) Co-generation
(1 MW, 0.1%)
−Bulgaria: 30 MW, 2 locations
Greece
Poland (523 MW, 55.0%)
Wind
(102 MW, 11.0%) Total: 786 (909 MW, 97.0%)
MW
Portfolio Expected Capacity (2)
By Country By Type
• Pipeline: Strategic focus on wind in Greece and USA as USA
SHPS & Pump Storage P/V
(18 MW, 1.5%) (9 MW, 0.7%)
core market due to advantageous market dynamics (427 MW, 34.3%)
Greece Biomass &
(684 MW, Co-generation
• Hydro and solar assets built on an opportunistic basis 55.0%) (4 MW, 0.3%)
• New long term target to reach 2.000 MW
Bulgaria
(30 MW, 2.4%) Wind
Poland (1211 MW, 97.6%)
(102 MW, 8.2%)
Total: 1.242 MW
Notes:
1. As of March 2017
2. Total estimated MW Q1 2019
9Terna Energy Market Positioning (cont’d)
3 Strong Operational and Technical Excellence
• Founder and shareholder, as well as key senior managers have civil
Skilled Engineering and mechanical engineering backgrounds
Team
• Large technical team of over 80 engineers
• Very strong operational and technical capabilities given backbone of
the construction focused parent GEK Terna
Construction Synergies • In-house construction of projects
• Track record of projects completed on time and on budget
• Maintenance agreements with the turbine manufactures working
with Terna Energy’s engineering teams ensures transfer of valuable
Maintenance & know-how to the company
Insurance Coverage • Full insurance coverage both for damages and revenue loss
• Turbines come with 5-year guarantees; expected life of c.25 years
10Terna Energy Market Positioning (cont’d)
4 A Stabilized Renewable Regulatory Framework in a Recovering Greek Economy
Government remains committed to its RES target By resolving the RES deficit, the new regime
for 2020 offers a stable framework for the long term
GW 5.4 GW Remaining € MM
7,5
Target Reached
(84,3) (108,8)
2,2 2,2 2,1 (152,6)
(241,7)
Solar Realised Wind Realised
PV… Solar PV…(2) Target Wind…(2) (576,1)
2013 2014 2015 2016 Q2 2017
The Greek economy is recovering
Greece Real GDP Growth (1)
% 2,7
2,2 2,2
0,0
(0,2)
2015A 2016A 2017E 2018E 2019E
Notes:
1. IMF Forecasts World Economic Outlook, April 2017
2. As of June 2017 11Terna Energy Market Positioning (cont’d)
5 An Attractive and Value Creating Growth Story
• Terna Energy has delivered strong growth Terna Energy has Delivered Growth Successfully
historically. For the 2014–2017 period, the
MW
Company has: 1.242
1. Increased its installed capacity from 640 1.119
MW to 943 MW
943 427
2. Grown capacity in Greece from 161 MW to 427
523 MW 738 288
640 664 132
3. Delivered projects on budget and on time 138
544 138 132
• Going forward, the Company has a strong and 508 138 132
132
credible growth plan 138 138 116 132
• Aim under the 7-year plan to reach 104 104 684
523 561
2,000 MW 394 468
386
266 302
• Proceeds from the bond will partially be used
to fund construction of new projects, alongside
project specific financing 2012A 2013A 2014A 2015A 2016A 2017E 2018E 2019E
Greece Eastern Europe USA
12Terna Energy Market Positioning (cont’d)
6 An Attractive and Value Creating Growth Story
Priority pipeline
€MM, unless otherwise stated
Project Finance
Capacity Project Cost Cash Grant Equity / Cash
Project Type Debt COD Priority
(MW) € MM € MM € MM
€ MM
UNDER CONSTRUCTION 204 MW
Vermio project Wind 44 MW 59 - 39 20 H1-2018 High
Fluvanna 2 (USA) Wind 160 MW 237 - 200 37 H2-2018 High
PRE-CONSTRUCTION PROJECTS 1.5 MW
Epirus Waste
Waste 1.5 MW 42 20 15 7 2019 High
Management
PRE-LICENSED
121.4 MW
PROJECTS
Peloponnese Waste
Waste 2.4 MW 122 64 35 23 2019 High
Management
Evoia SPA Wind 100 MW 140 - 91 49 2019 Medium
Servouni Wind 19 MW 20 - 13 7 2019 Medium
TOTAL HIGH PRIORITY 327 MW 460 84 289 87
High priority pipeline projects
13Terna Energy Market Positioning (cont’d)
7 Rapid Deleveraging from EBITDA Growth and High Cash Flow Conversion
Steady 22% EBITDA CAGR Strong Growth in Realized EBITDA
€ MM
• Long term visibility on volume off takes
• Contracted prices 116
99
• Track record of project developments 74
70
53
2012A 2013A 2014A 2015A 2016A
EBITDA
Cash Flow Conversion
Outstanding cash flow conversion (1)
€ MM
• No maintenance capex
59% 63% 80% 105% 100%
• Despite crisis delays in payments have
103,8 116,2
remained steady in the last years
59,2
• Rapid deleveraging on a like-for-like basis 31,0 44,0
2012A 2013A 2014A 2015A 2016A
Operating Cash… Cash Flow Conversion
Notes:
1. Cash Flow Conversion = Operating Cash Flow / EBITDA
2. Operating Cash Flow after Working Capital Changes
143. Financial Performance
Strong Financial Performance
Run-rate EBITDA increases with capacity
Installed Capacity and Revenue EBITDA and EBITDA Margin
€MM €MM
508 543 640 664 738 43% 50% 47% 50% 51%
226
199
158
140
116
124
99
70 74
53
2012A 2013A 2014A 2015A 2016A 2012A 2013A 2014A 2015A 2016A
Revenue MW Installed Capacity EBITDA % EBITDA Margin
16Segmental Performance
Wind
Installed Capacity Key project Commissioned in 2016 - 2017
MW
Project COD Installed Capacity
St. George 2016 73 MW
Mavroplagia –
1.242 Kastro H1 – 2017 17 MW
1.119
Mougoulios H1 – 2017 17 MW
943
Plagia – Psiloma H1 - 2017 15 MW
738 Fluvanna 1 (USA) H2-2017 150 MW
640 664
508 543 Projects Under Construction
Project COD Volume
Vermio project H1-2018 44 MW
Fluvanna 2 (USA) H2-2018 150 MW
2012A 2013A 2014A 2015A 2016A 2017E 2018E 2019E
Installed Capacity
17Capital Expenditure
Historical Capital Expenditure Typical Funding Structure
€MM
Subsidised
Equity/Group
217,0 Cash
25%–30%
150,7 Project Debt
45%–50%
79,7
47,0 56,4
Government
Grants
25%–30%
2012A 2013A 2014A 2015A 2016A
Non-Subsidised
• 14 new projects built since 2014, adding 244
Equity/Group
MW of capacity Cash
Project c.30%
• No maintenance capex Debt
c.70%
• Maintenance costs accounted for as
operating expenses on the Income
Statement Projects without grants benefit from higher contracted
tariffs, allowing to raise more project debt and to de-lever
• All capex is for expansion
faster
18Q2 2017 Performance Update
Key drivers Revenues
MW €MM
33% 32% +49%
139, • Continued increase in capacity (+18% y-o-y)
943
738 93,8 6
• Lower load factor
Q2 2016 Q2 2017 Q2 2016 Q2 2017 − Energy results negatively impacted by weather conditions,
Installed Capacity Revenue in H1 in particular
% Load Factor
EBITDA and EBITDA Margin
€MM
Renewables Construction • Outstanding performance in both renewables and
70% 72% 5% 47% construction segments
56,6 − Extraordinary levels of EBITDA margins in the renewables
47,2 10,7
segment with 72% for the second quarter of 2017
0,6
Q2 2016 Q2 2017 Q2 2016 Q2 2017
EBITDA % EBITDA Margin
19Disclaimer
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.
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