Investor presentation - May 2021 - Scatec
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Investor presentation May 2021
Disclaimer
The following presentation is being made only to, and is only directed at, persons to whom such presentation
may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not rely, act
or make assessment on the basis of this presentation or anything included therein.
The following presentation may include information related to investments made and key commercial terms
thereof, including future returns. Such information cannot be relied upon as a guide to the future performance of
such investments. The release, publication or distribution of this presentation in certain jurisdictions may be
restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or
distributed should inform themselves about, and observe, such restrictions. This presentation does not constitute
an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite,
subscribe for or otherwise acquire securities in Scatec ASA or any company within the Scatec Group. This
presentation contains statements regarding the future in connection with the Scatec Group’s growth initiatives,
profit figures, outlook, strategies and objectives as well as forward looking statements and any such information
or forward-looking statements regarding the future and/or the Scatec Group’s expectations are subject to
inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating
substantially from what has been expressed or implied in such statements.
The following presentation contains unaudited pro forma financial information which has been prepared solely
for illustrative purposes to show how the acquisition of SN Power might have affected the financials of the group
if the acquisition had occurred at an earlier date. All pro forma financials in this presentation are unaudited.
Alternative performance measures (APM) used in this presentation are described and presented in the fourth
quarter report of the group for 2020.
2
Contents 1. Introduction 2. The market and our pipeline 3. Our business model 4. Financials 5. Outlook and guidance
Q1’21
Strong growth and solid cash flow
Power production (GWh)
• Acquisition of SN Power completed – hydro assets 2.4x
contributing with strong growth 854
• Power production of 854 (349) GWh and Group
EBITDA¹ of NOK 636 (346) million
• Power Production cash flow to equity of NOK 681²
(105) million
• Started construction of 150 MW in Pakistan
349
• 2025 growth target: 15 GW installed
- capex of NOK 100 billion
Q1 2020 Q1 2021
1) EBITDA and other alternative performance measures (APMs) are defined and reconciled as
a part of the APM section of the first quarter report on pages 37-40.
4 2) including refinancing proceeds of NOK 397 million
A broad and growing asset portfolio
Europe & Central Asia
Scatec in brief 506 MW
Rest of Asia
1,450 MW
Develop, build, own and Latin America
operate renewable energy 383 MW
Africa & Middle East
3.5 GW in operation and
1,175 MW
under construction
2,053 MW
More than 500 employees 1,422 MW
in 23 countries
39 MW
5
We continue to lead and are broadening our growth strategy
Build a global leader Focus on new and existing Continue to adapt our
across solar, hydro, high growth markets business model to a
wind and storage and a broader offering changing market
02 The market and our project pipeline
The world can be powered by renewables in 2050
60% 75% Fossil from 64%
Solar, wind, hydro
& storage share of USD 500 billion
increase in global demand covered by to 20% market energy mix from Annual renewables
electricity demand renewables share 36% to 73% investments
Source: Bloomberg New Energy Outlook 2020
8
Solar, hydro, wind & storage covering 73%
of installed capacity in 2050
+447%
Storage
Global installed capacity mix, 2019 and 2050 14,885 GW
Wind
Hydro
4% 2% 7% Solar
2% 8%
11 % 28 %
15%
8%
1%
7,566 GW 20,391 GW 2%
2019 2050
38% 7%
15 %
23 % 2,723 GW
5% 20%
4%
Coal Gas Oil Nuclear Hydro Wind Solar Storage Other
2019 2050
Source: Bloomberg NEF
9
4.5 GW by end 2021 and 15 GW by end 2025
GW – In operation and under construction – 100% basis
15
SN Power
2021
Delivery of large solar projects in
India, Brazil, Tunisia, South Africa
9.1
& Pakistan
5.9 2025
Continued growth in pipeline
2.4 and conversion of projects across
3.5 4.5
key regions and technologies
2.1
1.4 1.4
Current Growth End 2021 Growth End 2025
10Mature projects expected to start construction in 2021
Pakistan, 150 MW Tunisia*, 360 MW South Africa, 600 MW
• Financial Close in Q1 • Backlog • Pipeline
• 75% leverage • Tariff awarded • Bid into RMIPP**
• 75% equity stake • 75% leverage • 80% leverage
• Construction started • 50-60% target equity • 51% equity stake
in April stake
Brazil, 101 MW Brazil, 530 MW India, 900 MW
• Backlog • Pipeline • Pipeline
• Blended off-take • Equinor and Hydro • Tariff awarded
• Kroma and Equinor partners • 75% leverage
partners • Negotiating off-take • 50% equity stake
• 60% leverage • 70% leverage • No EPC
• 40% equity stake • 33% equity stake
* Tozeur and Sidi Bouzid, 60 MWp each and Tataouine, 240 MWp
** RMIPP: Risk Mitigation IPP Procurement Program. REIPPP: Renewables IPP Procurement Program
11Milestone for Release 8.5 MW flexible lease agreement • Lease agreement with Torex Gold for a 8.5 MW solar plant for two projects in Mexico • Initial contract of 10 years • The plant can be expanded at any time, including adding battery storage • Estimated completion in fourth quarter 2021 12
Project backlog & pipeline of almost 12 GW
Pipeline
Europe & Central/
South Asia
1,395
23 % MW
42 %
3%
Africa & Southeast Asia
17 % Middle East
15 % 3,812
MW
Latin America 5,106
Solar Hybrid solutions MW
1,426
Wind Release MW
Hydro
All figures are as of Q1 2021 reporting date.
13Hydropower development
– Building on key strengths from SN Power and Scatec
Project opportunity in Africa:
Hydro project development focus: Existing hydro portfolio of 260 MW
• Brownfield projects with upgrade potential
• Greenfield with regulation capability Opportunity to add 220 MW:
• Hybridisation Upgrade plant, add hydro capacity, and
add floating solar on reservoir
Building on key strengths:
• Hydropower competence
• Project development
• Hydropower engineering and construction
• Structuring and financing
• Market operations
• Strong ESG focus and high HSSE standards
• Applying Scatec’s integrated business model
1403 Our business model
Our value chain
Project development Financing Construction Operations Ownership (IPP)
Site development & Debt/Equity Engineering and Maximise performance Asset management
permitting structuring procurement and availability
Financial optimisation
System design Due diligence Construction Maintenance and
management repair
Business case
development
PPA negotiationOur success is based on our business model & strong entrepreneurial culture
Business model People
Integrated – capturing full Predictable Agile & lean
project value Entrepreneurial culture
Working together
Structuring & financing Passionate & empowered people
Financial discipline Driving results
Strong and diversified talent pool
Partnerships ChangemakersStrong partnership with project-
equity and debt providers
Raised project level financing of NOK 20 billion
• Experienced project equity partners - often DFIs
• Non-recourse project level debt of 60-80%
• Quality projects with good ESG profile in high demand
Opportunistic re-financing
• Highly dependent on project structure and market
• Hydro assets in the Philippines refinanced and released Share of funding from multilateral
NOK 408 million to Scatec in Q1 2021 development banks
• Refinancing continues to be explored across portfolio
~50%
18Our business model and typical project structure
Illustration of company structure and main contracts
Equity co-
Scatec
investors
100% 39%-100%
Shareholders’ agreement
Land owners
Land lease
agreements
Component
Suppliers
Scatec EPC contract Single Purpose Loan Project
O&M / EPC O&M contract Vehicle agreements financing
Asset Management
contract
Sub-Contractors Sovereign
PPA guarantee
agreement Concession State
agreement government
Political risk insurance
(when relevant)
World State owned
Bank/others utilityA leading position in ESG
• Experience from navigating complex markets Rating summary: Low risk Rating: A- (excellent)
#1 of 450 – Utilities Status: Prime
• Identifies ESG project risks early with dedicated #1 of 48 – Renewable power Prime threshold: C+
teams on the ground producers
• A net positive carbon footprint – and set targets
for reductions in direct emissions
• Comprehensive ESG reporting and close
monitoring of regulations (e.g. EU Taxonomy) Rating: AAA (top rating) Rating: A
Highest scoring range Carbon Disclosure Project
relative to global peers Top score
20ESG ambitions Key focus areas
Lifecycle management
32 ESG targets Strategy for lifecycle management of equipment
for 2021
Climate target
Climate roadmap to reach 2050 targets
Responsible supply chain
ESG risk and close engagement with key suppliers
Human rights
Strengthen due diligence and training to exposed groups
21ESG is integrated in Scatec’s
operating model
How we work with ESG A competitive advantage
• ESG is an integrated part • Attracts projects and
of our business business partners
• Dedicated E&S resources • Reduces risks and
for long term approach strengthens probability of
and impact successful completion of
projects
• Solid Environmental and
Social Management System • Becoming imperative to
covering all projects qualify for and win new
projects
22Environmental, Social & Governance aspects are integrated in our
operating model
Project Power
Opportunity Financing Delivery
Development Production
Risk assessment & monitoring
Environmental & social impacts
Stakeholder engagement, grievance mechanism & local development
Health & Safety
Responsible procurement
Calculate emissions
Investment
decision
End of life
managementAll Scatec projects must adhere to the IFC PS and Equator Principles
Defines IFC clients’ Risk management Standards for
responsibilities for framework for responsible business
managing their determining, assessing conduct for issues such
environmental and and managing as human rights, labour
social risks environmental and social rights and the
risk in projects environmentClimate reporting and targets: Closer engagement with key suppliers
2020 GHG emissions:
Scope 1 and 2: 6,442 tons Scope 3: 1,368 tons Climate target
in line with the Paris
Agreement and 1.5°C
scenario
Scope 1 and 2:
• More than 50%
reduction by 2030
• Net zero by 2050*
Vehicles Purchased Electricity Purchased goods and services End of life
Diesel generators Purchased Upstream transportation and distribution Scope 3:
Transformer stations Heating/Cooling Business travel Employee commuting • Target to be set
25 Estimated payback time for a 50 MW solar project: 1.5 years
*Base year is 201904 Financials
Strong growth in revenues and EBITDA
Proportionate financials
Quarterly (NOK million) Last 12 months (NOK million)
EBITDA Revenues 5,679
Cash Flow to Equity
2,989
1,010
866
636 1,602 1,595
571
346 730 789
107
Q1 20 Q1 21 Q1 20 Q1 21
EBITDA
margin 40% 63% 28% 53%
27Growth in Power Production partly offset by D&C
Proportionate financials
Comments
NOK million • Strong growth in Power Production
Revenues Q1’21 Q1’20 FY2020 after SN Power acquisition
Power Production 924 391 1,708 • Growth despite currency headwinds
Services 56 52 232 • Stable performance in Services
Development & Construction 24 414 873
• D&C revenues down with low
Corporate 6 8 33
construction activity and opex
Total 1,010 866 2,844
increased with development of
EBITDA
large project pipeline
Power Production 704 331 1,404
• Corporate cost increased moderately
Services 17 16 82
with the inclusion of SN Power
Development & Construction -60 15 -28
Corporate -25 -16 -153
Total 636 346 1,306
28Power Production
Strong increase in power production
Comments
Quarterly (NOK million) Last 12 months (NOK million) • New hydro assets adding NOK 367
EBITDA Revenues
million of EBITDA from last year
2,241
CF to equity • Strong performance on the
Philippines, EBITDA of NOK 243 million
1,777
- up NOK 117 million from last year
1,357 • Solar assets with stable EBITDA
1,143 generation year on year
924 1,003
704
• Debt refinancing on the Philippines
681
released cash of NOK 397 million to
331
391 409 Scatec
105
Q1 20 Q1 21 Q1 20 Q1 21
EBITDA
margin 84% 76% 84% 79%
29Power Production
A well diversified power plant portfolio
2020 Pro forma Power Production: Pro forma 2020 EBITDA distribution:
Rwanda Mozambique
EBITDA: Laos Czech Republic
7% South Africa
NOK 2,706 million Uganda 15%
11%
Honduras
Cash flow to Equity
Jordan
NOK 1,067 million Brazil
11%
Remaining contract Philippines
29% Malaysia
duration* 10%
18+ yrs Ukraine
Egypt
(*) Perpetual concession for the hydro assets on the Philippines.
30Services
Stable financial performance
Quarterly (NOK million) Last 12 months (NOK million)
235
EBITDA Revenues
CF to equity
191
56
52
83
73
66
60
16 17
13 14
Q1 20 Q1 21 Q1 20 Q1 21
EBITDA
margin 31% 30% 38% 35%
31Development & Construction
Increased project development efforts
Quarterly (NOK million) Last 12 months (NOK million)
EBITDA Revenues
4,097
CF to equity 483
445
414
356
13 15 24
-50
-51 -60 -102
Q1 20 Q1 21 Q1 20 Q1 21
Gross
margin 11% 1% 14% 13%
EBITDA
margin 4% NA 11% NA
32Bridging proportionate to consolidated P&L
Proportionate
Residual • Financials across operating segments – based
Ownership Elimination on Scatec’s ownership in power plants
fully of equity
Prop- consolidated consolidated Other Residual ownership
ortionate entities entities Eliminations Consolidated • Adding financials of non-controlling interest for
fully consolidated power plants (solar & wind)
External revenues 925 279 -511 - 693
Internal revenues 85 6 -3 -88 - Elimination of equity consolidated entities
Net income from JV • Deducting revenues, EBITDA and EBIT for equity
and associates - - 138 - 138 consolidated entities – and adding net income
Total revenues and from the same
other income 1,010 284 -376 -87 831 • Net income from hydro, in IFRS consolidated
financials, is reported from 29 January 2021 -
Cost of sales -103 - 79 23 -
control transferred under IFRS
Gross profit 907 284 -295 -64 831
Personnel expenses -99 -2 12 7 -82 Other eliminations
Other operating • Eliminating internal gross profit in D&C and
expenses internal revenues and related opex in Services and
-172 -50 43 60 -118
Corporate segments
EBITDA 636 232 -240 3 631 • Eliminating depreciation charges from historic
Depreciation and internal gains – mostly related to D&C
impairment -230 -78 77 44 -187
EBIT 406 153 -162 47 444
33A solid financial position
Consolidated financial position (NOK million)
• Group free cash of NOK 2,918 million As of 31.12.2020 As of 31.03.2021
• Investments in JVs and associated companies of NOK 9,750 33,553 33,553
million, increased from NOK 612 million in 2020 6,369
9,637
• Group* book equity of NOK 11,190 million 26,663 26,663
9,074 4,156
(NOK Project Group Total 9,467
Consolidated
million) level level* prop.
Cash 4,783 1,698 2,918 4,616 3,495
27,184
Debt -19,527 -11,277 -7,114 -18,392 19,760
17,590
Net debt -14,744 -9,580 -4,196 -13,776 13,701
Assets Equity & Assets Equity &
Liabilities Liabilities
(*) Defined as ‘recourse group’ in the corporate bond and Current assets Equity Non-current liabilities
loan agreements, where restricted cash is excluded. Non-current assets Current liabilities
34 34Q1’21 movement of the Group’s free cash
NOK million
14 -72 491 -3,558
-51
723 -359 -20
5,949 -199
2,918
End Q4 20 Distributions Cash flow to Cash flow to Cash flow Project equity Project Cash in Net cash Working End Q1 21
from operating equity D&C equity Services to equity Development acquired consideration Capital/other
power plants Corporate capex entities from
acquistion of
Movement of cash in ‘recourse group’ as defined in the corporate bond and loan agreements. SN Power
35Staying selective when investing
• Focus on capital discipline
• Power Production: Avg. Equity IRR on investments: 12-16%
• 30-year cash flows
• Average across technologies, regions & currencies
• Development & Construction gross margin: 10-12%
• D&C revenues expected to average 50-70% of project
capex dependent on Scatec’s role in the project
36Target of 15 GW by end 2025 representing NOK 100 billion of capex
Capital structure for 12 GW new capacity towards 2025 Scatec Equity funded by cash & operating cash flow
NOK billion NOK billion
100 15-20
60-70% leverage Cash Flow to Equity
based on long term across all segments net
60-70 contracts 10-12 of shareholder dividends
50-60% Scatec
ownership in Cash &
15-20 new assets 4.5 credit lines
15-20 1-4
Capex Project Partner Scatec Scatec Equity Cash flow Available Other
finance debt equity equity liquidity
37Scatec - 2021 Guidance
Power Production (GWh) Development & FY2021 Services FY2021 Corporate
Proportionate production volume* Construction
Q2 2021: FY 2021: End of Q1’21: Revenues EBITDA
815-865 3,500 - 3,700 Remaining, not NOK 280 million NOK -110 million
booked, construction
Up from 406 Up from 3,045 contract value EBITDA margin:
in Q2 2020 in 2020 NOK 513 million 30-35%
(*) Guidance based on production from plants in operations at the end of first quarter 2021.
3805 Summary
Building a global leader in renewable energy
Where we come from Where we are now Where we are going
Regional solar developer/IPP Global top-tier A global multi-technology
developer/IPP renewables developer/IPP
Solar Solar Solar
Hydro Hydro
Wind Wind
Storage StorageA NOK 100 billion business plan towards 2025
- Building on our key strengths
Renewables in high A proven business Agile organisation with
growth markets model a growth track record
15 GW
capacity* by
end of 2025
Financial discipline Leading in ESG Strong partnerships
and solid cash flow
(*) In operation or under construction..
41Our asset portfolio
Plants in operation Capacity Economic Under construction Capacity Economic
MW interest MW interest
Theun Hinboun, Laos 525 20% Sukkur, Pakistan 150 75%
Magat, Philippines 388 50% Progressovka, Ukraine 148 100%
Benban, Egypt 380 51% Guanizuil IIA, Argentina 117 50%
Upington, South Africa 258 46% Chigirin, Ukraine 55 100%
Bujagali, Uganda 255 28% Torex Gold, Mexico 9 100%
Quantum Solar Park, Malaysia 197 100% Total 479 78%
Apodi, Brazil 162 44%
Binga, Philippines 140 50% Project backlog Capacity Economic
Ambuklao, Philippines 105 50% MW interest
Kalkbult, South Africa 75 45%
Dreunberg, South Africa 75 45% Tunisia 360 55%
Agua Fria, Honduras 60 40% Brazil 101 40%
Boguslav, Ukraine 54 100% Ukraine 65 65%
Rengy, Ukraine 47 51% Bangladesh 62 65%
Redsol, Malaysia 47 100% Mali 33 64%
Jordan, Jordan 43 62% Lesotho 20 48%
Linde, South Africa 40 45% Total 641 55%
Mocuba, Mozambique 40 53%
Dam Nai, Vietnam 39 100% Project pipeline Capacity Share in %
Los Prados, Honduras 35 70% MW
Kamianka, Ukraine 32 61%
Czech, Czech Republic 20 100% Solar 4,686 42%
Maris Hydro, Philippines 9 50% Hydro 2,516 23%
Asyv, Rwanda 9 54% Wind 1,871 17%
Total 3,035 48% Hybrid solutions 1,726 15%
Release 300 3%
Total 11,098 100%You can also read
