Soltec Power Holdings SA · BME:SOL
Soltec Power Holdings SA — Investor Presentation (November 2023)
57 slides from Soltec Power Holdings SA's investor presentation, November 2023
Slide 1: Corporate Presentation
CORPORATE PRESENTATION November 2023
Slide 2: Disclaimer
DISCLAIMER This document has been prepared by Soltec Power Holdings, S.A. (“Soltec”) exclusively for use of November 2023 corporate presentation. Therefore, thereof, this document may not be disclosed or published, nor used by any other person or entity, for any other reason without the express and
Slide 3: Disclaimer
DISCLAIMER This document contains certain financial measures of the Company that are not based on International Financial Reporting Standards (IFRS), but rather on its accounting records, which the Company considers as alternative performance measures (APMs) for the purposes of Commission Delegated
Slide 4: Agenda
01 Company Overview 02 Business Units 03 Financial Results 04 Closing Remarks 05 Appendix CORPORATE PRESENTATION Agenda
Slide 5: Company overview
01 Company overview
Slide 6: Soltec at a glance
SOLTEC AT A GLANCE BUSINESS AND GEOGRAPHICAL DIVERSIFICATION EUROPE 573 MW 5,926 MW INDUSTRIAL DEVELOPMENT USA 25 MW 5 MW CONSTRUCTION (4) OPERATION (3) 293 MW 100 MW INDUSTRIAL DEVELOPMENT 2 PRODUCTION 1 LOGISTIC FACILITIES (1) CENTER(2) 1 LOGISTIC CONTRIBUTION TO REVENUES CENTER (2) 27% CONTRIBUTI
Slide 7: An IPP with industrial capabilities
AN IPP WITH INDUSTRIAL CAPABILITIES PROJECT ASSET INDUSTRIAL DEVELOPMENT MANAGEMENT • Tracker manufacturing division that also • Greenfield solar development segment, • Selective “build-to-own” strategy. provides additional construction services developing early-stage projects to RTB • Solar IPP seg
Slide 8: Business integration to add financial margins
BUSINESS INTEGRATION TO ADD FINANCIAL MARGINS INSTALLATION / POWER GENERATION DEVELOPMENT EQUIPMENT CONSTRUCTION (Ownership) PROJECT DEVELOPMENT INDUSTRIAL SERVICES CONSTRUCTION SERVICES ASSET MANAGEMENT 1 Early-Stage Development TRACKER MANUFACTURING 1 Project Engineering 1 Financing Closing Plant
Slide 9: Integrated and sustainable business model to capture growth and margins
INTEGRATED AND SUSTAINABLE BUSINESS MODEL TO CAPTURE GROWTH AND MARGINS KEY PILLARS OF OUR BUSINESS MODEL VERTICAL INTEGRATION The complementary nature of the integrated model gives access to additional revenue streams and provides stability as it diversifies GEOGRAPHIC cyclical risk DIVERSIFICATION
Slide 10: Business Divisions
02 Business Divisions CORPORATE PRESENTATION
Slide 11: Industrial
BUSINESS UNITS 2.1 2.2 2.3 INDUSTRIAL DEVELOPMENT ASSETS
Slide 12: What is a solar PV tracker?
WHAT IS A SOLAR PV TRACKER? MAIN TRACKER COMPONENTS 1P SOLAR PV TRACKER 2P SOLAR PV TRACKER TRACKER PV PLANT IMPACT ▪ Solar trackers increase production Piles between 15-25% vs. fixed tilt(1) ▪ Extended production hours: producing more energy when the cost of electricity is typically higher Solar PV
Slide 13: Solar PV is the largest absolute generation growth of all renewables
SOLAR PV IS THE LARGEST ABSOLUTE GENERATION GROWTH OF ALL RENEWABLES Over 900 GW of solar trackers expected to be installed between 2023 and 2030 SUPPORTIVE RENEWABLES & SOLAR PV STRONG TRACKER POLICIES GROWTH POTENTIAL VALUE PROPOSITION • REPowerEU Plan: 45% EU’s renewable energy target for EUROPEA
Slide 14: Solar tracker market continues to grow with a strengthened value proposition
SOLAR TRACKER MARKET CONTINUES TO GROW WITH A STRENGTHENED VALUE PROPOSITION TRACKER VS FIXED-TILT INSTALLATIONS (EXCLUDING CHINA) • Solar tracker installations (ex-China) are expected to grow on average 15% annually from 2023 to 2025 • Solar trackers are expected to reach 55% of total installations
Slide 15: Leading position
LEADING POSITION TOP 10 TRACKER SHIPMENTS 1 LEADING POSITION IN HIGH-GROWING MARKETS #4 Largest global supplier of solar PV trackers1 Ideematec FTC Solar 4% 3% Europe GameChange VersolSolar Solar 1% USA 5% STI Norland 6% Nextracker Middle East Arctech 36% Mexico Solar 8% Soltec LATAM 8% PV Hardware
Slide 16: Wide product offering for every project and customer
WIDE PRODUCT OFFERING FOR EVERY PROJECT AND CUSTOMER SFONE SFONE-USA SF7 Module 1-in-Portrait 1-in-Portrait 2-in-Portrait configuration Bifacial TAILORED FOR U.S. PROJECTS Low High (specific product) adaptation • Soltec has manufacturing capabilities in the United States. Complex orography • Reduced
Slide 17: Tracker ASP expected evolution
TRACKER ASP(1) EXPECTED EVOLUTION TRACKER PRICE DECLINES HIT A ROADBLOCK IN 2021, BUT PRICES ARE EXPECTED TO FALL IN THE NEAR FUTURE €0.17/W €0.14/W €0.12/W €0.11/W €0.11/W €0.11/W €0.10/W €0.09/W €0.09/W €0.09/W €0.09/W 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2024E 2025E ▪ ASP (€/W) • Steel p
Slide 18: Soltec Industrial: contracts signed
SOLTEC INDUSTRIAL CONTRACTS SIGNED 71 3.5 403 CONTRACTS SIGNED January-November 2023 (1) GW € Mn STRONG VALUE PROPOSITION OF SOLAR TRACKERS MW • Energy prices and the increasing demand for solar energy, together with the 4000 increasing production of trackers versus fixed tilt installations (+15%-25
Slide 19: Reinforcing our positioning in the US
REINFORCING OUR POSITIONING IN THE US Inflation Reduction Act (IRA) LOCAL OFFICE IN LOGISTIC CENTER Encourages investment in domestic energy production and TEAM FLORIDA IN TEXAS manufacturing through 2030 to reduce carbon emissions. STATE OF THE ART SUPPLY CHAIN INCREASING REVENUES UP TO 50% SECURED
Slide 20: Soltec Industrial: operational indicators
SOLTEC INDUSTRIAL OPERATIONAL INDICATORS BACKLOG(1)(2) +68% +49% €329 Mn +49% +14% BACKLOG SEP 2023 €289 €329 +1.5 GW Mn €221 Mn 1,402 Mn 2,094 MW + NEW CONTRACTS Orders to be closed before 1,245 year end, in markets with local MW MW €117 Mn production capabilities Mar 2023 Jun 2023 Sep 2023 CONTRAC
Slide 21: Soltec Industrial: operational indicators by region
SOLTEC INDUSTRIAL OPERATIONAL INDICATORS €329 Mn €16,971 Mn BACKLOG PIPELINE EUROPE NORTH AMERICA SPAIN AZERBAIJAN NA (1) UNITED STATES MEXICO Backlog: €119 Mn Pipeline: €29 Mn 28% Backlog: €91 Mn Pipeline: €1 Mn Pipeline: €2,272 Mn LATAM ARMENIA 30% Pipeline: €5,293 Mn CANADA ITALY Pipeline: €20 Mn
Slide 22: Soltec Industrial: revenues and EBITDA margins evolution
SOLTEC INDUSTRIAL REVENUES & EBITDA MARGINS EVOLUTION FY 2023E REVENUES: €600-700 MN Strong seasonality loaded in H2 2023 EBITDA MARGIN: 6-7% The demand for solar trackers will materialize in the second half of 2023 116 104 9% 71 -4% -4% Q1 Q2 Q3 2023 2023 2023 Revenues (€ Mn) EBITDA margin 22
Slide 23: Capital expenditure outlook
CAPITAL EXPENDITURE OUTLOOK Capex required for the Industrial Division remains low c.1% of total revenues €22-30 Mn €8 -10Mn €6-8 Mn €5-7 Mn €3-5 Mn 2022E 2023E 2024E 2025E TOTAL CAPEX as a % 1% 1% 1% 1% of revenues • Investments required to accomplish the BP of the Industrial division • CAPEX is ma
Slide 24: Development
BUSINESS UNITS 2.1 2.2 2.3 INDUSTRIAL DEVELOPMENT ASSETS
Slide 25: Soltec Development 14 GW
SOLTEC DEVELOPMENT PLATFORM UNDER DEVELOPMENT Focus on key growth and PV markets with LOCAL 468 MW Total: 65% A QUALITY low risk PARTNERSHIPS in Spain Soltec: 35% PPA Origination capabilities to reduce risk Existing co-development partnerships with leaders in PLATFORM Assets Under Ownership: S
Slide 26: Pipeline evolution
SOLTEC DEVELOPMENT PIPELINE EVOLUTION Projects mainly located in Italy & Spain: BACKLOG ADVANCED STAGE • Italy: 2,204 MW MW/year MW/year • 1,284 MW expected RTB in 2024. • 488 MW in the Backlog, correspond to • 57% in co-development with Aquila and projects in Brazil, at RTB status. (5%) 23% with AC
Slide 27: Development costs
DEVELOPMENT COSTS • Development costs are all direct necessary investments of the project to obtain the permits (i.e. lease agreements, interconnection permits, engineering and environmental studies, construction permits, financing and PPA) to achieve RTB. DENMARK SPAIN 12,500 €/MW 15,000 €/MW USA R
Slide 28: Market prices for PV project rights at RTB
MARKET PRICES FOR PV PROJECT RIGHTS AT RTB(1) RTB PV PROJECT RIGHTS AND EPC COSTS(2), BY COUNTRY [IN K.EUR/MW MULTIPLES]. STAGE DIFFERS ACCORDING TO COUNTRIES. EPC COSTS VARY TOO “Ready-to-Build” PV projects are projects that have reached core development milestones, namely: ● Secured land (through
Slide 29: Assets
BUSINESS UNITS 2.1 2.2 2.3 INDUSTRIAL DEVELOPMENT ASSETS
Slide 30: Soltec Assets: becoming an IPP
SOLTEC ASSETS BECOMING AN IPP Selective “build-to-own” strategy EQUIPMENT INSTALLATION / CONSTRUCTION PROJECT DEVELOPMENT INDUSTRIAL SERVICES CONSTRUCTION SERVICES POWER GENERATION Financing Plant 1 Closing 2 Monitoring Power Regulatory 3 Sales 4 Compliance Ongoing Performance 5 Optimization 30
Slide 31: Soltec Assets: capacity
SOLTEC ASSETS CAPACITY BUSINESS PLAN CAPACITY UNDER OPERATION 2025 TARGET(2) 700 MW – 1 GW Pedranópolis Araxá La Asomada (1) 112.5 MW 112.5 MW 4.5 MW CAPACITY UNDER CONSTRUCTION 303 MW 255 MW La Isla (1) Los Valientes I & II (1) Totana IV 4.5 MW 14.9 MW 5.5 MW 230 MW 117 MW CAPACITY PRE- CONSTRUCTIO
Slide 32: Capacity under operation
SOLTEC ASSETS CAPACITY UNDER OPERATION PEDRANÓPOLIS(1) ARAXÁ(1) LA ASOMADA(2) KEY PROJECT DATA KEY PROJECT DATA KEY PROJECT DATA Location Sao Paulo (Brazil) Location Minas Gerais (Brazil) Location Murcia (Spain) Capacity 112.5 MWp Capacity 112.5 MWp Capacity 4.5 MWp Net Energy Generated Net Energy G
Slide 33: Capacity under construction
SOLTEC ASSETS CAPACITY UNDER CONSTRUCTION LA ISLA(1) LOS VALIENTES I Y II(1) TOTANA IV KEY PROJECT DATA KEY PROJECT DATA KEY PROJECT DATA Location Murcia (Spain) Location Murcia (Spain) Location Murcia (Spain) Capacity 4.5 MWp Capacity 14.9 MWp Capacity 5.5 MWp Net Energy Generated 2,075 Net Energy
Slide 34: Capacity pre-construction
SOLTEC ASSETS CAPACITY PRE-CONSTRUCTION ALUMBRES(1) EL ROMERAL I Y II(1) FUENTE ÁLAMO I Y II(1) KEY PROJECT DATA KEY PROJECT DATA KEY PROJECT DATA Location Murcia (Spain) Location Murcia (Spain) Location Murcia (Spain) Capacity 8.2 MWp Capacity 20.0 MWp Capacity 19.9 MWp KEY DEVELOPMENT PERMITS KEY
Slide 35: Soltec Assets: PPA strategy and financing
SOLTEC ASSETS PPA STRATEGY 260 MW PPA STRATEGY FINANCING 4 DEALS Hedging against merchant volatile prices AGREEMENTS 5 Assets (1) TO FUND THE EQUITY OF THE ASSET 2 Assets 1 Asset 29.4 MW MANAGEMENT DIVISION 225 MW 5.5 MW Raised form a Spanish fund €100 Mn to accelerate the growth of Financing the as
Slide 36: Capital expenditures outlook
CAPITAL EXPENDITURES OUTLOOK ASSET MANAGEMENT INVESTMENT REQUIRED TO BRING ASSETS TO COD STATUS €250-300 Mn €770-950 Mn 80-90% €200-250 Mn 10-20% 80-90% 80-90% €170-200 Mn 10-20% €150-200 Mn 80-90% 10-20% 90% 10-20% 10% 2022E 2023E 2024E 2025E TOTAL Development Construction • Development: developmen
Slide 37: Investment criteria
INVESTMENT CRITERIA IRR TARGETS BASED ON GEOGRAPHIC RISK, OFF-TAKER CREDITWORTHINESS, AND DEGREE TO WHICH ASSET IS CONTRACTED TARGETED EQUITY IRRS BY GEOGRAPHY METHODOLOGY 1 IRRs contemplated over 30-year forecast 7–9% 10-13% period, in line with industry-wide practices. (+/- 150 bps) (+/- 150 bps)
Slide 38: Financial Results
03 Financial Results CORPORATE PRESENTATION
Slide 39: 9M 2023 financial update
9M 2023 FINANCIAL UPDATE SOLTEC POWER HOLDINGS CONSOLIDATED RESULTS (1) € Mn 9M 23 9M 22 23 vs.22 • Increasing quarterly demand driving healthy volumes in Q3 and Q4. Revenues 304.1 403.4 (99.3) • EBITDA margins rose to 9% in Q3 2023 and 1% in the 9M, increasing versus previous quarters, mainly due t
Slide 40: 9M 2023 financial update: Soltec Industrial
9M 2023 FINANCIAL UPDATE SOLTEC INDUSTRIAL(1) € Mn 9M 23 9M 22 23 vs.22 Strong orders and good visibility for coming months • € 329 Mn Backlog, expected to be recognized in the coming months. Revenues 291.0 423.4 (132.5) Revenues well diversified by client and also by country: Adj. EBITDA(1) 2.4 6.6
Slide 41: Revenue outlook
REVENUE OUTLOOK SOLTEC INDUSTRIAL €750-800 Mn €650-750 Mn €600-700 Mn €587 Mn 2022 2023E 2024E 2025E • Figures does not include revenues generated by the projects owned by Soltec Asset Management 41
Slide 42: 9M 2023 financial update: Soltec Development
9M 2023 FINANCIAL UPDATE SOLTEC DEVELOPMENT € Mn 9M 23 9M 22 23 vs.22 • 9M 2023 Asset rotation : 432.5 MW Adj. EBITDA Proforma(1) (2) (5.6) 5.2 (10.8) • 302.5 MW rotated to Soltec Assets in 2023: • Araxá (Brazil): 112.5 MW • Pedranópolis (Brazil): 112.5 MW QUARTERLY EVOLUTION • La Asomada (Spain): 4
Slide 43: 9M 2023 financial update: Soltec Assets
9M 2023 FINANCIAL UPDATE SOLTEC ASSETS € Mn 9M 23 9M 22 23 vs. 22 • Financing secured: Revenues 7.6 N/A N/A • Successful equity raise of €100 Mn in 2023. • New financing agreement in Spain for 5.59 MW: Adj. EBITDA(1) 5.5 N/A N/A • Project finance 3.6 Mn € + 550,000 € from local communities. • This i
Slide 44: Confirmed 2023 guidance
CONFIRMED 2023 GUIDANCE SOLTEC POWER HOLDINGS INDUSTRIAL EBITDA REVENUES EBITDA MG. €45 Mn €60 Mn €600 €700 6% 7% Mn Mn DEVELOPMENT EBITDA €25 Mn €35 Mn ASSETS REVENUES EBITDA MG. €12 Mn €17 Mn 70% 75% 44
Slide 45: Business Plan 2022-2025
04 Business Plan 2022-2025 CORPORATE PRESENTATION
Slide 46: Soltec Power Holdings
SOLTEC POWER HOLDINGS REVENUES (€ MN) EBITDA (€ MN) €780 - €840 Mn €100 Mn - €120 Mn 14% 4% 54% CAGR CAGR 25% €568 Mn 32% 96% €33 Mn 98% 18% 43% 82% 2022 2025E 2022 2025E 6% EBITDA 13%-14% Margin Industrial Asset Management Industrial Project Development Asset Management 46
Slide 47: Industrial
INDUSTRIAL REVENUES (€ MN) EBITDA (€ MN) €750 - 800 Mn 11% 23% €45 -50 Mn CAGR CAGR €587 Mn €27 Mn 2022 2025E 2022 2025E EBITDA 5% Margin 6%-7% 47
Slide 48: Project development
PROJECT DEVELOPMENT EBITDA (€ MN) €30 - 40 Mn 88% CAGR €6 Mn 2022 2025E • Project development generates EBITDA from asset rotation (to third parties or the asset management division) 48
Slide 49: Asset management
ASSET MANAGEMENT REVENUES (€ MN) EBITDA (€ MN) €30 – 40 Mn €25 – 30 Mn 2022 2025E 2022 2025E EBITDA 75%-83% Margin • Recurring revenue streams from power generation 49
Slide 50: Net financial debt
NET FINANCIAL DEBT Expected financial structure for 2025 € 950 – 1,050 Mn € 200 – 300 Mn € 750-850 Mn Project debt (Non-recourse debt) c.75% Corporate debt (Recourse debt) c.25% GROSS CASH AND NET FINANCIAL DEBT OTHER EQUIVALENT FINANCIAL DEBT LIQUID ASSETS 50
Slide 51: Closing Remarks
04 Closing Remarks CORPORATE PRESENTATION
Slide 52: Turning point in Q3 2023
TURNING POINT IN Q3 2023 TURNING POINT IN • €329 Mn BACKLOG +91% POTENTIAL (vs. T.P.) EBITDA MARGINS • €16,971 Mn PIPELINE AND INCREASING • +8.6% EBITDA MARGINS IN Q3 Share price versus target price VOLUMES UNIQUE • FINANCING AGREEMENT FOR 5.6 MW FINANCING IN SPAIN • SENIOR DEBT + LOCAL INVESTMENT S
Slide 53: Appendix
05 Appendix CORPORATE PRESENTATION
Slide 54: Stock overview
STOCK OVERVIEW SHARE PRICE PERFORMANCE 7,0 High (14/03/2023) Market Cap Price Close €6.4 €282 Mn €3.09 6,0 Avg. Volume 90D Nº Shares 5,0 267k 91,386,717 4,0 Price (14/11/2023) IPO Price Avg. Price €3.1 €4.82 €5.8 3,0 High (07/01/21) Low (06/10/23) Low (06/10/2023) 2,0 €2.6 €14.84 €2.56 1-ene.-23 1-f
Slide 55: Soltec Industrial: revenues and EBITDA margins evolution
SOLTEC INDUSTRIAL REVENUES & EBITDA MARGINS EVOLUTION MARGIN RECOVERY Ramp up in a still challenging environment Measures implemented to face high Strong seasonality loaded 223 inflation, the energy crisis and logistics in H2 2023 The demand for solar trackers will COVID-19 & Supply materialize in t
Slide 56: Solar PV development cycle
SOLAR PV DEVELOPMENT CYCLE Project Development process in Spain Construction COD Envi. Urban RTB Asset Ownership Land Access Connection Environmental Point Studies Studies Permits 70% Debt-30% Equity Point presented granted Project Development process in Italy Construction COD STMG AU RTB Asset Owne
Slide 57: Thank you
THANK YOU
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