1H 2014 RESULTS Conference Call , 8 August 2014 H1 2014 - - PowerPoint PPT Presentation

1H 2014 RESULTS

Conference Call , 8 August 2014

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H1 2014 Consolidated Results Vector Cuatro Other Initiatives Outlook

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H1 2014 HIGHLIGHTS

Euro millions

Starting from January 2014 , new IFRS 11 (JV’s accounting treatment) has been adopted and according to this principle investments in Frullo Energia Ambiente, La Muela and Palermo Energia Ambiente have been recognised by equity method. Also the 1H 2013, for comparative purposes, has been reclassified with the new IFRS 11.

Jun 14 ∆ vs Jun 13

∆ %

Jun 13 INSTALLED CAPACITY - MW 726 + 46

+ 7%

680 ENERGY PRODUCTION - GWh 897

• 90
• 9%

987 REVENUES - €m 127.2

• 14.8
• 10%

142.0 EBITDA - €m 72.1

• 16.4
• 19%

88.5 NET EARNINGS - €m 5.7

• 13.6
• 71%

19.3

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H1 2014 : KEY FACTORS

Operating Business Ongoing Activities H1 2014 Results

• Poor wind conditions across Europe
• Low tariffs and no incentives in Spain
• Penalties on non programmable sources (E.g.“minimi

garantiti”, captured price) and on programmable sources (CIP 6)

• Results in line with expectations
• Increasing contribution from the UK due to change of

perimeter (Nutberry - 15MW, full year - and West Browncastle -30 MW, one month)

• Cash generation from operating plants and cash-in from

the “Borea” deal with CII enabled a strong reduction of the Net Financial Position

• According to the Framework Investment Agreement with

CII, FKR is actively in talks for the sale of the minorities in Nutberry and West Browncastle wind farms 2014 Guidance

√ √ √ √

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1H 2014 FINANCIAL HIGHLIGHTS

June June %

millions of euro

2014 2013 Revenues 127.2 142.0 - 10.4% Net Operating costs (55.1) (53.5) Ebitda 72.1 88.5 - 18.6% % on Revenues 56.7% 62.3% Depreciation - Amortization - Write Off (32.4) (33.0) Operating result 39.7 55.5 - 28.5% % on Revenues 31.2% 39.1% Financial income and charges (25.3) (25.2) Equity investments 0.8 2.2 Earnings Before Taxes 15.1 32.4 - 53.4% Taxes (9.4) (13.2) Net Result 5.7 19.3 - 70.5% Minorities (3.0) (0.1) Net Group Result 2.7 19.2

millions of euro

June 2014 Dec 2013 Net Invested Capital 1,103.3 1,106.9 Equity 505.4 378.8 Net Financial Position (597.9) (728.1)

• f which: Proj. Fin. and MLT no recourse

(692.6) (690.8) NFP excluding Derivatives Instruments (531.2) (673.7)

Impairment test: 2014 2013 (1.9 m) (4.1m)

122 112 1H 2013 1H 2014 847 789 128 96 12 12 1H 2013 1H 2014 Solar WTE/Biomass Wind 630 675 34 35 16 16 1H 2013 1H 2014 Solar WTE/Biomass Wind

+6.8% 726 680

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EVOLUTION OF INSTALLED CAPACITY AND PRODUCTION

BY TECHNOLOGY BY COUNTRY

MW MW GWh WASTE (KTON)

+6.8% 726 680

• 9.1%

897 987

• 8.2%

112 122

Also the 1H 2013, for comparative purposes, has been reclassified with the new IFRS 11.

342 343 273 318 23 23 42 42 1H 2013 1H 2014 France Spain UK Italy

68.3% 61.9% 26.9% 34.2% 2.2% 0.6% 2.6% 3.3% 1H 2013 1H 2014 France Spain UK Italy 67.6% 58.1% 25.1% 37.4% 4.8% 0.5% 2.5% 4.0% 1H 2013 1H 2014 France Spain UK Italy

EBITDA by Country

74.2% 76.1% 22.0% 20.1% 3.8% 3.8% 1H 2013 1H 2014 Solar Wte/Biomass Wind

142 €m 127 €m

Revenues by Technology

142 €m 127 €m

Revenues by Country

FINANCIAL HIGHLIGHTS: REVENUES AND EBITDA

EBITDA * by Technology

88.5 €m 72.1 €m

* Breakdown of EBITDA by technology made on total Ebitda gross of holding impact Euro millions 84.9% 90.6% 10.6% 4.5% 4.5% 4.9% 1H 2013 1H 2014 Solar Wte/Biomass Wind

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95.1

(6.6) 88.5 (12.8) 2.4 (3.8) (3.1) 0.6 0.3 72.1

H1 2013 IFRS 11 Adj H1 2013 IFRS11 Net Volumes Perimeter Change Prices Trezzo Break Down Exchange rate Other H1 2014

Euro millions Nutberry and West Browncastle

EBITDA 1H 2014 VS 1H 2013: KEY FACTORS

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(728) (22) (16) (12) 56 186 (47) (15) (598) NFP December 2013 CAPEX net of Disposals Exch difference on assets Derivatives Fair Value Variation Cash Flow from Operations Cash from CII Subloan CII Dividends NFP June 2014

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FINANCIAL HIGHLIGHTS: CASH FLOW

Euro millions

€139 m

(54) (67) (674) (531) December 2013 June 2014 NFP excluding derivatives Derivatives 10

NFP BREAKDOWN DERIVATIVES IMPACT ON NFP

(728)

FINANCIAL HIGHLIGHTS: NET FINANCIAL POSITION 1/2

Euro millions

(598)

120 144 (693) (67) (22) (49) (27) (4) (598)

Cash SPVs Cash PF Deriva- tives FKR Corp. Loan Subloan CIP MLT Loans & Local Comm. Other net debts NFP

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PLANT UNDER CONSTRUCTION/IN OPERATION PROJECT FINANCE HEDGED

FINANCIAL HIGHLIGHTS: NET FINANCIAL POSITION 2/2

Euro millions

2.0% 12m€ 98.0% 586m€ Under Development and Construction Operating 25.2% 175m€ 74.8% 518m€ Unhedged pf Hedged pf

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H1 2014 Consolidated Results Vector Cuatro Other Initiatives Outlook

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FKR THREE PILLARS STRATEGY

Co-development of the FKR portfolio with strategic partners to continue the business as usual in different countries PARTNERSHIPS SERVICE DIVISION Developing a service division with the aim to cover the whole value chain in the renewable energy industry in order to extract more value from the Assets (inside and outside the Group) and to manage the market rule INNOVATION Creation of an innovation division to propose new products and processes for Energy Hubs capable of optimizing the performances of the renewable assets and their integration with the grids

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FKR AND VECTOR CUATRO COMPETENCIES

• Market competencies from an asset owner

point of view: knowledge of the renewable energy markets (wind, solar, WTE and biomass)

• Technical competencies also to improve asset

performances through integration

• Portfolio management
• Finance & Incentives
• Strong experience in the wind sector
• Strong

commercial acumen and client acquisition skills resulting in solid client relationships

• Deep-rooted service provider mentality to solve

the client's needs and meet his expectations

• Asset Management (Performance monitoring &

reporting, maintenance & troubleshooting) and Engineering competencies (Development & construction supervision)

• Mainly PV but also WIND competencies

(Development, Permitting and Engineering)

• Cohesive, highly motivated, young, dynamic

and internationally minded management team

+

The integration will bring several competencies that are required to be successful in the market, speeding up change

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Vector Cuatro S.L. is a Spanish company active in the management of the whole

value chain of energy projects: from advisory to structuring, from engineering to management and administration of renewables facilities

The company has been founded in 2007 by Borja Escalada, CEO and major

shareholder of Vector Cuatro (~ 51%). The management team owns, directly and indirectly, the remaining 49% of the capital.

Vector Cuatro is currently managing around 934 MW of third party assets with a

team made of around 100 employees

Main presence in Spain, Italy, France with significant opportunities growth in

Japan, Mexico and other countries ( North America, South Africa , Bulgaria)

VECTOR CUATRO PROFILE

16 Spain France Italy

• Asset Management
• Engineering
• Transaction &legal ser.
• Asset Management
• Engineering
• Asset Management
• Engineering
• Legal services

Japan

• Engineering
• Transaction &legal ser.

Bulgaria

• Asset Management

Canada Mexico

• Asset Management
• Asset Management
• Engineering
• Transaction &legal ser.

Start-up:

VECTOR CUATRO DIRECT PRESENCE AND ACTIVITIES

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VECTOR CUATRO PRESENCE

Direct

• ffice

presence

• f

Vector Cuatro 1) 833 MWs*  Asset Management (MWs under management) 2) 4,020 MWs  Engineering services (historical MWs) 3) 3,501 MWs  Transaction services (historical MWs) * As of 31 December 2013

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VECTOR CUATRO ACTIVITIES

 Asset management

• Operational management: periodical site visit; daily

performance monitoring, enforcement of the terms of agreement of the plant’s service providers, insurance company claims, management of the providers, drafting of service reports;

• Reporting, accounting and fiscal activities;
• Management of SPVs

 Engineering:

design and

• ptimization,

construction supervision, technical due diligence, both of projects and under-operation facilities

 Transaction services: development & identification of

• pportunities, financial advisory, technical & financial due

diligence, design and structuring, fund raising, financing and investment closing, divestment

 Legal services : legal support and legal advisory

Asset Management 73% Engineering 18% Transaction Services 7% Legal 2%

2013 REVENUES BREAKDOWN

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A LONG TERM PORTFOLIO WITH BLUE CHIPS CLIENTS

Vector Cuatro has a blue chip customer portfolio mainly composed of financial

and industrial players investing in the renewable sector

Entry services are usually transaction and engineering services, which are used to

establishing a trusted relationship and recognition

48% of contracts in terms of revenues has a long term duration between 20 and

25 years (usually with a notice period of 1-2 years) and 33% has a Short/medium term duration between 2 and 5 years

Asset Management activities are carried-out by a state-of-the-art IT platform,

which includes both in–house tools and customized developments based on leading external solutions

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VECTOR CUATRO KEY FINANCIALS

Highly attractive margin profile (EBITDA margin at around 20%) Expected strong growth in 2014:

• Revenues: +22% YoY
• EBITDA: +8% YoY

Low impact from D&A and financial charges  Net Debt at 0.5 €m end of 2013

Euro millions 7,4 1,7 1,3 1,0 9,0 1,8

Revenues Ebitda EbT Net Result

2013A 2014E

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• Existing Vector Cuatro’s wind competencies combined with FKR deeper

Wind/WTE/Biomass know-how will extend product offering beyond PV and cross-sell asset management services to other renewables plants owned by Vector Cuatro’s existing and future clients

• Technological diversification as a key driver for the future: Vector Cuatro and FKR

will develop the opportunity to expand the service platform to new technologies in the renewable sector

• Expansion into new countries and opportunity to increase the existing portfolio
• Further optimization of asset management activities currently carried out

internally by FKR

• Performance improvements on both FKR asset base (wind, PV, biomass, WTE) and

third parties asset base

POTENTIAL UPSIDE FROM THE INTEGRATION

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H1 2014 Consolidated Results Vector Cuatro Other Initiatives Outlook

ACQUISITION OF 51% OF VERUS ENERGY OAK LIMITED 1/2

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Partnership with Verus Energy Limited: acquisition of 51% of the special purpose project entity, Verus Energy Oak Limited (“VEOL”) that owns the authorization to construct a new plant in Waste to Energy through an advanced technology in West Bromwich (UK). The plant envisages energy recovery through the thermal treatment of RDF (Refuse Derived Fuel: i.e. solid fuel obtained from non-hazardous waste) and uses bubbling type fluid bed stage gasification technology to do so. Given the technological solution adopted, defined as “Advanced Conversion Technology” in the United Kingdom, the production of electricity by the plant will benefit from a favourable incentive regime as compared with other waste-to-energy production technologies.

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Location: West Bromwich (8 km west of Birmingham) Input Capacity: 130,000 tons/year of Refuse Derived Fuel (RDF) Plant Nominal Capacity: 16.2 MW Total Capex expected: approx. GBP 80m Revenues expected: approx. GBP 20 - 21m EBITDA expected : approx. GBP 9 - 10m The project will produce power equivalent to the demand from 25.500 UK homes and it will avoid 36.000

• ton. of CO2 per year.

ACQUISITION OF 51% OF VERUS ENERGY OAK LIMITED 2/2

Should the investment be decided, following completion of the due diligence investigations still underway and the verification of bankability, the project will presumably have the following details :

WEST BROWNCASTLE WIND FARM

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Location: South Lanarkshire (Scotland)

• N. of Turbines: 12

Plant Nominal Capacity: 30 MW Output expected: approx. 74 GWh Incentives: ROCs and LECs Revenues expected: approx. GBP 7,5m Ebitda expected: approx GBP 5,5m The wind farm will produce power equivalent to the demand from 14.000 UK homes and it will avoid 28.000 ton. of CO2 per year.

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H1 2014 Consolidated Results Vector Cuatro Other Initiatives Outlook

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Regulation changes - CIP 6 - and energy price trend should continue in the second part of the year Well on track with the diversification toward a new business model more balanced in favour of programmable sources and services

OUTLOOK: TARGET CONFIRMED

2013 2014

PRICES (ITA & SPAIN) NET VOLUMES PERIMETER (NUTBERRY & WEST BROWNCASTLE) CIP6 EXPIRING (TREZZO) DEVEX

145 130-135

Euro millions

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CONTACTS

IR CONTACTS

IR Manager

Giorgio Botta Milan +39 02 2433 3338 giorgio.botta@falckgroup.eu Via Alberto Falck 14-16 20099 Sesto San Giovanni Milano

IR Consultant

Vincenza Colucci CDR Communication Srl

• Tel. +39 335 6909547

vincenza.colucci@cdr-communication.it FKR ON LINE www.falckrenewables.eu Twitter @falckrenewables NEXT EVENTS October 2nd , 2014 STAR Conference London November 12th , 2014 Board of Directors to approve Q3 2014 results

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