Foresight Environmental Infrastructure Limited GBP · LSE:FGEN
Foresight Environmental Infrastructure Limited GBP — John Laing Environmental Assets Group — Investor Day (June 2018)
38 slides from Foresight Environmental Infrastructure Limited GBP's investor day presentation, Jun 19, 2018
Slide 1: JLEN Investor Session Anaerobic Digestion
John Laing Environmental Assets Group Limited JLEN Investor Session Anaerobic Digestion June 19th 2018
Slide 2: JLEN Analyst Session Anaerobic Digestion
JLEN Analyst Session Anaerobic Digestion – June 19th 2018 2
Slide 3: Opening Remarks
Opening Remarks • JLEN is an ‘Environmental Infrastructure Fund’ ➢ Diversified portfolio ➢ Inflation linkage ➢ Long term, predictable cashflows ➢ Stable regulatory frameworks • Current AD investments include: Vulcan Icknield • Further asset acquisitions currently pursued at various stages in AD and
Slide 4: AD Process Overview
AD Process Overview What is Anaerobic Digestion (AD)? AD is the natural breakdown of organic matter to release biogas and water. The biogas can be harnessed to make electricity, heat, gas and fuel. What remains, the digestate, is a biofertiliser that can be used on land. 4
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Slide 6: AD Market Overview
AD Market Overview • Over 400 agricultural and 85 food waste plants in the UK • Early plants now able to display operational track record and benefit from high initial tariffs • Around £2bn of assets built • Construction financed mainly by EIS & VCT funds – at least 60 to 80 plants JLEN Target due f
Slide 7: JLEN Analyst Session Anaerobic Digestion
JLEN Analyst Session Anaerobic Digestion – June 19th 2018 7
Slide 8: Investment Attractions
Investment Attractions Example of revenue splits Sector Attraction ✓ Low technology risk Gas Wholesale Electricity 17% wholesale ✓ Subsidy support through FITs, ROCs, RHI. 1% ✓ RPI linked cashflows Green Gas ✓ Low exposure to merchant price Certificates Renewable (gas/electricity) 2% Gas to Grid AD
Slide 9: Investment Attractions: Operating Sensitivities
Investment Attractions Operating Sensitivities Feedstock costs -10% Feedstock costs +10% Wholesale gas price -10% Wholesale gas price +10% Biogas yield -10% Biogas yield +10% -2.50% -2.00% -1.50% -1.00% -0.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% Impact to investment case IRR Data source: JLCM 9
Slide 10: Investment Attractions – Operational Track Record
Investment Attractions – Operational Track Record Average Daily Plant Production sm3/hr 600 500 400 Volume (sm3/hr) JLEN acquisitions 300 Upgrade Phase 1 200 Upgrade Phase 2 100 0 Vulcan Icknield Data source: Gemini 10
Slide 11: Investment Attractions – Operational Track Record
Investment Attractions – Operational Track Record Plant Performance as % of Peak Output 100% 80% 60% 40% 20% 0% Vulcan Icknield Industry Average Data source: Gemini 11
Slide 12: Value Enhancements
Value Enhancements Close biological monitoring & crop management to maximise Production optimisation gas yields and feedstock conversion efficiency Rotogrind at Icknield Minor capex upgrades Increasing gas yield with a <1yr Payback Capacity increases through Major capex upgrades new digestion tanks
Slide 13: JLEN Analyst Session Anaerobic Digestion
JLEN Analyst Session Anaerobic Digestion – June 19th 2018 13
Slide 14: Portfolio Management – Sector Observations
Portfolio Management – Sector Observations Overview • Strong regulatory regime and low technology risk resulted in rapid deployment and growth in sector • Operational exposure for the industry lagged behind • Industry focus is now on operation and optimisation UK AD Growth • 2010 – Feed-in Tariffs l
Slide 15: Portfolio Management – Risk Management
Portfolio Management – Risk Management Risk Management in AD Investments • Having a strong sector knowledge is crucial in identifying a root to successfull investments in AD • Choosing the right partner with a strong track record is also important in managing investments • Optimising uptime, managin
Slide 16: Vulcan Upgrade Project
Vulcan Upgrade Project Vulcan Project Specifics Acquisition Date August 2017 Acquisition Price £15.3m Plant Description c. 5MWth gas-to-grid Agricultural fed AD plant with a 0.5MWe CHP engine to provide for the site Operational Date October 2013 Revenue Incentives c. 80% Government backed RPI pegged
Slide 17: JLEN Analyst Session Anaerobic Digestion
JLEN Analyst Session Anaerobic Digestion – June 19th 2018 17
Slide 18: Any Questions?
Q&A Any Questions? JLEN 18
Slide 19: Future Biogas
Future Biogas ➢Farming ➢Biology ➢Operations “It has become blatantly clear ➢Maintenance that Future Biogas are one of the best if not the best operator in the country and it is unfair ➢Back Office that you are paying for the misadventures of others.” Lesley McKee – Alan Boswell Insurance Brokers Ltd
Slide 20: Future Biogas
Future Biogas Business • Develop, build and operate and maintain AD 1 3 plants 5 9 6 4 2 7 • 11 sites (approx. £120m) built since 2011 8 • Expert team • Skilled operators • Microbiologists with in-house lab • Biogas engineering team • Feedstock team with farming pedigree Aims • Be leading UK operato
Slide 21: The AD Plant
The AD Plant 21
Slide 22: Feedstock – Innes McEwen
JLEN Feedstock — Innes McEwen nn
Slide 23: Feedstock And Digestate Management
Feedstock And Digestate Management Local • Majority of the crop sourced within 5 miles • Economically sensible to travel up to 10 miles Low Impact • Below 2% of local land-bank • We also buy in by-products such as beet pulp and Vulcan Renewables veg pack-house “wonky” veg Large Scale • Grow 11,000 h
Slide 24: Offsetting Farming Risk
Offsetting Farming Risk Security of Supply Steady Weather / 2006-16 • Annual or multi year • Integrated in farming rotation • Key farm relationships • Range of crops and by products used Target heat for maize • Manage stocks carefully Weather Risk • £/tonne or rented land • Winter/Spring crops • Var
Slide 25: Ensuring Sustainable AD Cropping
Ensuring Sustainable AD Cropping • Crops destined for AD are measured for their carbon footprint and sustainability by OFGEM • AD cropping is helping towards UK government renewable energy targets • AD benefits food crops by diversifying rotation and improving soil organic matter, giving higher yiel
Slide 26: So What’s So Different About Future Biogas Feedstock?
So What’s So Different About Future Biogas Feedstock? • Scale – purchasing, influence, reliability • Quality – measurement, recording and attention to detail • Local presence – seek long term partnership with local growers for both crop and digestate • People – “Train to retain” – staff, growers and
Slide 27: Operations – Colin Mills
Operations — Colin Mills JLEN 27
Slide 28: Future Biogas
Future Biogas Growth -New plants Establish a -Significant platform for upgrades growth -Operate new assets Focus on Operational -Turn around Excellence poor performing sites - Servicing Rapid plant construction
Slide 29: Future Biogas – Complete provider for AD Operations
Future Biogas – Complete provider for AD Operations 15 Engineers & Technicians Multi skilled operators, 24/7 provision Substantial spares holding Maintenance Engineering Health, Experienced senior staff Projects Safety, from other industries Environment Capability for New build, stretch, re-engineer
Slide 30: Minimise Unplanned Downtime
Minimise Unplanned Downtime Preventative Maintenance • Best practice and experience brought in with staff from other industries • Multi-skilled operators are trained to perform first-line maintenance and fault-finding • Co-ordinated approach to maintenance • Condition based maintenance regimes - ass
Slide 31: Response To Unplanned Outages
Response To Unplanned Outages Equipment & Capability – Future Biogas have the experience and resources to plan and then execute outages with quick turn arounds, saving feedstock and maximising income – Depth of maintenance know-how allow most repairs to be dealt with in-house with major savings on s
Slide 32: Future Biogas – Summary
Future Biogas – Summary • People • Experience brought in from other industries • Multi-skilled operators/technicians • Demonstrated track record of high uptime, high output plant operation • Spares • Robust maintenance plans • Specialist equipment & capacity to quickly resolve operational problems •
Slide 33: Conclusion
Conclusion • Market opportunity • Attractive risk-adjusted returns • High proportion of index-linked subsidy-backed cashflows • Manageable risks • Value enhancements 33
Slide 34: Any Questions?
Q&A Any Questions? JLEN 34
Slide 35: Biographies – John Laing Capital Management
Biographies – John Laing Capital Management Chris Tanner –Director – John Laing Capital Management Chris Tanner is the co-lead Investment Adviser. He has over 18 years’ experience in infrastructure including PPPs, economic infrastructure and renewables. Chris joined the Investment Adviser in January
Slide 36: Biographies – Future Biogas
Biographies – Future Biogas Philipp Lukas – Managing Director – Future Biogas Philipp founded Future Biogas in 2008 following a career in law and renewables, having previously worked in corporate law at Travers Smith and then run a cellulosic ethanol developer. He was a director of the Anaerobic Dig
Slide 37: Disclaimer
Disclaimer This document and the information contained herein have been prepared solely for the purpose of providing general information about John Laing Environmental Assets Group Limited (the "Company") and its operations. This document is not to be used for any other purpose and in particular doe
Slide 38: Disclaimer
Disclaimer This document does not constitute an offer to sell to or solicitation of an offer to purchase from any investor or in any jurisdiction in which such an offer or solicitation is not permitted or would be unlawful. Each investor must comply with all legal requirements in each jurisdiction i
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