Foresight Group Holdings Ltd. · LSE:FSG
Foresight — Foresight Solar Fund — FY2020 Earnings Presentation
27 slides from Foresight's earnings presentation, March 2021
Slide 1: Foresight Solar Fund Limited – Results to 31 December 2020
FORESIGHT SOLAR FUND LIMITED RESULTS TO 31 DECEMBER 2020 March 2021
Slide 2: Agenda
Agenda • Highlights to 31 December 2020 • ESG Highlights and Key Metrics • Acquisitions and Portfolio Summary • Investment Policy Change • Market Outlook and Pipeline • Operational Review • Financial Review |2
Slide 3: Foresight Group – Investing for a smarter future for more than 35 years
Foresight Group – Investing for a smarter future for more than 35 years A leading sustainability-driven global infrastructure and private equity manager Ricardo Piñeiro - Partner Part of the Fund’s management team since IPO £ Joined Foresight in 2011 Infrastructure Private Equity £6.1bn of AuM (
Slide 4: Highlights to 31 December 2020
Highlights to 31 December 2021 Acquired four subsidy-free assets in Spain with a generating capacity of 125MW – the Company’s first investments into subsidy-free solar Portfolio increased to 58 assets with total generating capacity of 994MW across the UK, Australia and Spain Investment Policy
Slide 5: ESG Highlights and Key Metrics
ESG Highlights and Key Metrics Delivery of positive social and environmental impact alongside financial returns Established O&M Sustainability Agreement with three main contractors EU Taxonomy validation achieved on representative assets in UK and Australia 969,000 Contributed c.£129,000 in co
Slide 6: Acquisitions during the period
Acquisitions during the period Four Spanish subsidy-free acquisitions mark an important growth milestone Asset Name Location Installed Capacity Acquisition Date Status Target Acquisition Cost* commissioning Virgen del Carmen Huelva, Spain 26.1MW September 2020 Construction Q3 2021 €20.2 million Anda
Slide 7: Spanish renewable market
Spanish renewable market Supportive market conditions and attractive returns for solar energy investment 54GW of renewable energy installed capacity in 2019 (52% of the total installed capacity), with solar representing 8.6GW, a growth of 93% year-on-year Future development supported by: − Spani
Slide 8: Portfolio overview as at 31 December 2020
Portfolio overview as at 31 December 2020 Geographically diversified portfolio of 58 assets United Kingdom Spain Australia 50 assets 4 assets 4 assets Total generating Total generating Total generating capacity of 723MW capacity of 125MW* capacity of 146MW Countries by installed capacity Spain 12% A
Slide 9: Investment Policy Change
Investment Policy Change Opportunity to invest in Battery Storage Systems (“BSS”) up to 10% of GAV The continued growth in renewable energy generation is creating a requirement for greater system flexibility Price of Li-Ion Battery Pack, Volume Weighted Average The decrease in the installation c
Slide 10: Rationale for solar co-located BSS
Rationale for solar co-located BSS Opportunity to invest in Battery Storage Systems (“BSS”) up to 10% of GAV Co-locating BSS with solar assets ensures a lower capital cost compared to a BSS standalone asset. An increasing number of solar subsidy-free greenfield developments integrate BSS in the
Slide 11: Market outlook and pipeline
Market outlook and pipeline Growth of renewable energy markets to be supported by governments net-zero and decarbonisation targets New regulatory support mechanisms and decreasing installation costs to accelerate solar deployment rate Subsidy-free market in UK and Europe expected to grow aided
Slide 12: Operational update
Operational update Foresight FOR A SMARTER FUTURE 12
Slide 13: COVID-19 impact and operational response
COVID-19 impact and operational response Strong operational resilience during national lockdown periods Robust plans put in place to minimise the risk of operational disruption and prioritise the safety of all Company stakeholders Power prices negatively affected in the second quarter of 2020
Slide 14: Portfolio performance
Portfolio performance Strong period of generation with UK portfolio now in a steady-state Global portfolio performance in line with budget for 2020 despite potential for disruption from COVID-19 UK generation was 8.4% above expectations compared to irradiation levels 8.5% above base case In Au
Slide 15: UK power prices and price hedging strategy
UK power prices and price hedging strategy Continued to manage fixed price arrangements in weaker power price environment Power prices in the UK declined during H1 due to a decrease in natural gas and oil prices and the COVID- 19 lockdown then recovered strongly in H2 to pre-pandemic levels Aver
Slide 16: Revenue analysis
Revenue analysis High proportion of fixed revenues offers cash flow visibility in the short and medium term In 2020: − 62% of revenue was derived from subsidies with the remaining 38% from the sale of electricity − Fixed revenues represented 78% of the total revenues For 2021: − Percentage of UK
Slide 17: Financial Review
Financial Review Foresight FOR A SMARTER FUTURE 7
Slide 18: Key financial metrics as at 31 December 2020
Key financial metrics as at 31 December 2020 Delivery of strong total return to shareholders since inception Net Asset Value (“NAV”) NAV per Share Gross Asset Value (“GAV”) £582.2m 95.8p £1,054.6m* (31 Dec 2019: £628.0m) (31 Dec 2019: 103.8p) (31 Dec 2019: £1,071.5m) Dividend per Share declared Annu
Slide 19: Net Asset Value movements
Net Asset Value movements Valuation declined largely due to weakening of power price forecasts | 19
Slide 20: Power price forecasts
Power price forecasts Reduction in power price forecasts from independent advisers during the period Power price forecasts decreased by 11.3% during 2020 Short and medium term: reduction in the forecast gas and power demand as a result of lower economic output caused by COVID-19 Long term: Hig
Slide 21: Power price forecasts (cont.)
Power price forecasts (cont.) Reduction in power price forecasts from independent advisers during the period Capture price discounts for solar technologies expected to increase over time as a result of revised levels of penetration of low marginal cost renewable generators on the network. UK Whole
Slide 22: Other key valuation assumptions
Other key valuation assumptions Discount Rate Useful economic life ▪ The weighted average levered discount rate across ▪ UK and Australian solar assets extended the portfolio decreased to 6.74% (2019: 7.06%) to 40 years and 30 years, respectively, within existing land lease restrictions ▪ Discount r
Slide 23: NAV sensitivities
NAV sensitivities Impact on NAV NAV at period end assumes a flat 19% UK Corporation tax. An increase from 19% to 25% from 2023 reflecting the March 2021 Budget announcement is estimated to have a negative impact on NAV of £8.7 million (1.4 pence per share). | 23
Slide 24: Group cash flow analysis
Group cash flow analysis UK (£m) Australia ($m) Revenue 90.6 12.3 Operating Expenses (19.7) (4.6) VAT /Tax (SPVs) 0.0 0.8 Solar investment operating cash flow 71.0 8.4 Debt Service (2.5) (4.2) Insurance Proceeds 0.0 9.5 Capital Expenditure (0.1) (8.0) Other 0.6 (1.0) Net cash generation from underly
Slide 25: Gearing position at 31 December 2020
Gearing position at 31 December 2020 Revolving credit facility ("RCF") offers flexibility to support future acquisitions at competitive cost Total Debt (£ millions) £80.9m TOTAL GEARING 45% of GAV £472.4 million LONG TERM GEARING £391.5m 37% of GAV Long Term Debt RCF Net debt position of £386.5 mi
Slide 26: Contact Details
Contact Details Investment Manager Foresight Group +44 (0)20 3763 6951 Jonathon McManus [email protected] PR Citigate Dewe Rogerson +44 (0)20 7638 9571 Toby Moore Elizabeth Kittle Corporate Broker Jefferies +44 (0)20 7029 8140 | 26
Slide 27: Important Notice
Important Notice General This document and the presentation have been prepared by Foresight Group LLP for information purposes only. By being in receipt of this document, you will be deemed to have (a) agreed to all of the following restrictions and made the following undertakings and (b) acknowledg