COMPANY OVERVIEW B U S I N E S S M O D E L & P O R T F O L I - - PowerPoint PPT Presentation

71 86 100 118 1542018 2202020 5002025

INVESTOR PRESENTATION Q1 2019

22.02.2019

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COMPANY OVERVIEW

B U S I N E S S M O D E L & P O R T F O L I O F I N A N C I A L P O S I T I O N C A PA C I T Y & M A R K E T C A P

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Business Model & Portfolio

Pure-play PV operator with 166 MW own assets, and 77 MW external management contracts

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ASSET MANAGEMENT IPP PORTFOLIO PV ESTATE

CASH FLOWS

Acquire assets Develop new projects (Re-) finance Optimise & operate

166 MW

SYNERGIES

Recurring fees from external investors Economies of scale M&A potential

77 MW

Acquired from Ernst Russ AG

• n 19.02.2019

TERMINAL VALUE

No land lease costs Repowering potential for PV parks already in use Development potential for unused land

110 HECTAR

Business Model & Portfolio

Current IPP portfolio generates annual EBITDA of at least EUR 34 Mio. Portfolio characteristics

CAPACITY TARIFF YIELD REVENUES EBITDA MWp EUR/MWh kWh/kWp EUR Mio EUR Mio Freefield PV 91 246 1,003 22.4 19.9 Rooftop PV 72 262 881 16.7 14.0 Onshore wind 3 86 2,400 0.6 0.4 IPP PORTFOLIO 166 246 973 39.7 34.3

LOCATIONS > 1 MW

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▪ PV assets concentrated in Bavaria, Eastern Germany, and Rhineland-Palatinate ▪ Average plant size: 1.2 MWp ▪ Average year of commissioning: 2011 ▪ Average feed-in-tariff: EUR 246/MWh. ▪ Tariffs are state-guaranteed and fixed for 20 years + year of commissioning ▪ Rooftop and land lease contracts usually running 20 years + at least 5 years extension option ▪ Small diversification into onshore wind (up to max. 10% of portfolio)

Financial Position

Robust financials with annual dividend of EUR 0.10/share

CASH FLOW PER SHARE AND EQUITY RATIO EBITDA EVOLUTION AND RETURN

0.10 0.10 0.26 0.41 0.45 0.49 0.52 18% 23% 25% 29% ~ 30% 0% 5% 10% 15% 20% 25% 30% 35% 0.00 0.10 0.20 0.30 0.40 0.50 0.60

2014 2015 2016 2017 2018F Dividend per share Cash Flow per share Equity ratio

16.7 24.9 27.9 29.9 33.0 5.4% 7.6% 8.9% 9.6% ~9.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

2014 2015 2016 2017 2018F EBITDA in EUR Mio. Return (clean EBITDA/total assets until 2017, EBITDA/total assets for 2018F)

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30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Capacity in MWp Market cap in EUR Mio

Capacity and Market Cap

Track record of growth and capital appreciation

2014-15 ACQUISITION COLEXON IN NEW SHARES + RESTRUCTURING (26 MWP) 2015-16 ACQUISITION MISKINA IN NEW SHARES + OPTIMISATION (24 MWP) 2016-17 GROWTH TO 115 MWP THROUGH PRIVATE PLACEMENTS 2018 UP TO ~150 MWP THROUGH ACQUISITION OF DEVELOPER + ALTERNATIVE FINANCING 6 2018-19 CAPITAL- INTENSIVE GROWTH TO 220 MWP BY 2020

VIEW ON GERMAN PV MARKET

E E G F E E D - I N TA R I F F S N E W M O D E L S T O M A R K E T P V P V C O M P E T I T I V E N E S S

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PV Competitiveness

Solar PV now the lowest-cost power generator, even cheaper than conventional power

HIGHER EFFICIENCY MODULES MODULE COST DECLINES FALLING LEVELISED COST OF ELECTRICITY (LCOE)

Source: IRENA Source: Lazard Source: IRENA

• 0.40

0.80 1.20 1.60 2.00 2.40 2.80 Feb 10 Jun 10 Oct 10 Feb 11 Jun 11 Oct 11 Feb 12 Jun 12 Oct 12 Feb 13 Jun 13 Oct 13 Feb 14 Jun 14 Oct 14 Feb 15 Jun 15 Oct 15 Feb 16 Jun 16 Oct 16 Feb 17 Crystalline China Crystalline Europe (Germany) Crystalline Japan Thin film

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EEG Feed-In Tariffs

Fixed tariffs still at attractive levels, but difficult to scale up

SYSTEM COST GERMANY 750 KWP ROOFTOP ▪ No relevant decrease in tariffs for new-build since 2014 due to annual capacity additions below the 2.5 GWp regulatory target ▪ 20% decline in panel prices in H2 2018 reflecting: 1. Subsidy stop for new PV projects in China 2. End of import duty on Chinese panels in Europe ▪ Government decided a to cut new-build tariffs for large rooftop by 10% during the period Feb-April 2019. ▪ The <750 kWp segment remains attractive, but limitations to scale up in size and time (no longer EEG tariffs once 52 GWp cap is reached) 7C SOLARPARKEN VIEW:

EUR/MWh EUR/Wp 9

• 10

20 30 40 50 60 70 80 90 100 110 120

• 0.20

0.40 0.60 0.80 1.00 1.20 1.40 2015 H1 2015 H2 2016 H1 2016 H2 2017 H1 2017 H2 2018 H1 2018 H2 2019 Q1 2019 Q2 BOS EUR/Wp PV Panel EUR/Wp FIT Large rooftop EUR/MWh Freefield < 750 kWp EUR/MWh

FIT FOR NEW PROJECTS Q2’19 Large rooftop < 750 kWp: ~ EUR 90/MWh Freefield < 750 kWp: ~ EUR 80/MWh

New Models to Market PV Power

• A. Market Parity

WHOLESALE POWER PRICE AND PV AUCTIONS > 750 KWP OPTION A: SELL POWER AT THE AUCTION (FFAV TARIFF) ▪ Fixed state-guaranteed tariff for 20 years ▪ Principally from 750 kWp to 10 MWp ▪ EEG limitations: rooftop, conversion land, alongside motorways ▪ Allocated FFAV or auction tariff is paid out on a monthly basis as market price + market premium (at least zero) ▪ Captures upside from rising market price (FFAV tariff as minimum) ▪ Special auctions: 500 MWp in Dec ‘19, 1 GWp in 2020 and 1 GWp in 2021 OPTION B: CORPORATE PPA ▪ Long-term contract with utility or corporate wholesale customer who purchases green power at a fixed price ▪ No limitation on size or on land as long as compliant to construction law ▪ Suitable for large freefield installations ▪ Driver: LCOE of large freefield PV (EUR 45-60/MWh in 2019) ▪ Corporate PPA market in Germany only a recent occurrence

• 10

20 30 40 50 60 70 80 90 100 27/07/2006 27/01/2007 27/07/2007 27/01/2008 27/07/2008 27/01/2009 27/07/2009 27/01/2010 27/07/2010 27/01/2011 27/07/2011 27/01/2012 27/07/2012 27/01/2013 27/07/2013 27/01/2014 27/07/2014 27/01/2015 27/07/2015 27/01/2016 27/07/2016 27/01/2017 27/07/2017 27/01/2018 27/07/2018 27/01/2019 EEX market price (EUR/MWh) FFAV/auction tariff EUR/MWh 10

~ 160 91 90 64 5

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40 60 80 100 120 140 160 180 Industrial client <20 kV EEG levy for 2019 Imbalance risk Theoretical pricing for PPA FIT large roof 750 kWp, Q2'19

New Models to Market PV Power

• B. Grid Parity

DISTRIBUTED GENERATION AT MEDIUM-VOLTAGE

Prices in EUR/MWh

▪ Long-term contract with on-site client who buys green power at a fixed price ▪ At mid-voltage level, end-user / industrial clients pay on average EUR 160/MWh for their power including the EEG levy of EUR 64/MWh. ▪ Ideally suited to large rooftop PV installations ▪ Driver: LCOE of rooftop PV (<EUR 90/MWh in 2018) ▪ On-site consumption market not developed yet in Germany as feed-in tariffs for large rooftops, prior to Q2’19, were at higher levels than the theoretical pricing of a PPA (EUR 91/MWh) ▪ Significant potential as from Q2’19 due to the further monthly drop in feed-in tariffs for rooftop projects ON-SITE PPA

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CAPACITY PLAN 2018-2020

T I E R - T W O TA R G E T 2 0 2 0 : 2 2 0 M W P V I S I O N 2 0 2 5 : 5 0 0 M W P

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Tier-Two

Target: Tier-2 player to benefit from improved valuation and cost of capital

OVERVIEW LISTED YIELDCOS & GREEN IPP’S IN EUROPE

TIER 1+2 TIER 3

• 200

400 600 800 1,000 1,200 1,400 1,600 Market cap EUR Mio. MW

Clear benefits for 200 Mio. EUR market caps / 200 MW players

• Access to a broader class of institutional investors who are

looking for long-term cash flows and defensive yield stocks.

• Increased leverage potential at corporate level (to finance

“big” deal) and cheaper debt

• Tier 1+2: average net debt/EBITDA ~6x
• Tier 3: average net debt/EBITDA ~5x
• Improved equity valuation
• Tier 1+2: average price/cash flow ~8x (min. 6x)
• Tier 3: average price/cash flow ~5x

MANAGEMENT VIEW

< 200 MW < 200 Mio. EUR 13

Target 2020: 220 MWp

Continuation of growth acceleration with EUR 16 Mio fresh capital required to meet 220 MWp

BREAKDOWN OF BUILD UP PLAN TO 220 MW (STATUS NOV’18) ▪ 66 MWp planned additions: through own development and acquisition of operating parks ▪ Capex budget: EUR 107 Mio. ▪ Project financing: EUR 72 Mio. ▪ Equity financing: EUR 35 Mio. ▪ EBITDA contribution: at least EUR 9 Mio. The 66 MWp new investments assume an average specific yield of 965 kWh/kWp and an average FIT of EUR 170/MWh (mix of old parks and new-build). ▪ Net cash flow contribution: at least EUR 7 Mio. ▪ Requires capital increase of EUR 16 Mio. MANAGEMENT INDICATION

14 118 154 220 50 100 150 200 250 2017 2018 2019 2020

OBJECTIVE TO ALLOCATE EQUITY OF EUR 35 MIO. YIELDING NET CASH FLOW OF > EUR 7 MIO.

Vision 2025: 500 MW

Capturing future opportunities once the Tier-2 status is reached

POTENTIAL POOL OF LARGER SCALE ACQUISITIONS & DEVELOPMENT IPP PORTFOLIO ASSET & FUND MANAGEMENT

500 MW

CONSOLIDATION: 15 GWp existing PV installations > 1 MWp in Germany AUCTIONS: Special rounds in 2019-21, including innovative auctions PPA: Large scale opportunities > 10 MWp upon further LCOE improvement REPOWERING: 4 GWp runs out of the tariff by 2025 EXPLORE OPPORTUNITIES: in other stable and mature EU countries 200 MWP IPP AND 200 MIO EUR CAP IS AN ENABLER ▪ An improved / cheaper access to debt ▪ Attract large institutional investors as new shareholders, mainly those who reallocate funds

• ut of conventional utilities into green energy

LEADING & DRIVING THIRD-PARTY INVESTORS ▪ Identify the right investment that fits in their sustainability agenda ▪ Monetize expertise ▪ Financial flexibility between IPP and asset management

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FINANCIAL TARGETS

2 0 1 8 G U I D A N C E E B I T D A & C F P S TA R G E T D I V I D E N D P O L I C Y

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2018 Guidance

EBITDA will rise to EUR 33 Mio, CFPS to EUR 0.52

REPORTED FIGURES FORECAST in Mio. EUR Q1'18 H1'18 9M '18 2018F Revenues 5.1 20.4 35.7 39.5 _ Power sales 5.0 20.2 35.5 39.2 _ Other revenues 0.1 0.2 0.2 0.3 Other operating income 0.9 1.0 1.9 1.0 Cost of sales and opex 1.7 3.4 5.9 7.5 EBITDA 4.3 18.0 31.7 33.0 Cash interest paid

• 2.7
• 5.7

Full-year interest expense SSD (*)

• 0.6

Taxes paid

• 0.1
• 1.3

Net cash flow (**) 15.2 25.4 Average number of shares 46.9 49.3 CFPS (per share data) (**) 0.32 0.52 Net debt 160.4 163.6 163.6 166.0 Equity ratio 29.2% ~ 30%

Outlook for 2018 reflects strong production yield

(*) in Feb ‘18, 7C Solarparken issued a Schuldschein of EUR 25 Mio. at an average interest cost of 2.78%. Nonetheless, the first annual interest payment is scheduled for Feb ’19 and therefore there is no cash interest to be paid during 2018. (**) To provide a more realistic view, management indicatively presents the net cash flow and CFPS under the assumption as there would be a pro-rata cash interest paid on the SSD

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7C SOLARPARKEN WILL REPORT THEIR FY’18 RESULTS ON 23 APRIL 2019

EBITDA & CFPS target

Towards EBITDA > EUR 41 Mio. upon executing the Plan 2018-2020

ESTIMATED EBITDA AND NET CASH FLOW SHOWCASE 220 MWP (EUR MIO) MANAGEMENT COMMENT ▪ EBITDA to increase by EUR 9.3 Mio to EUR 41.3 Mio following acquisition / commissioning of the planned 67 MWp. ▪ Net cash flow contribution from the added capacity is EUR 7.3 Mio. reflecting EUR 2 Mio interest costs on the EUR 72 Mio underlying project loans (2.8% interest cost). ▪ The number of shares is planned to increase from 53.4 Mio. to 59.1 Mio. upon execution of the financing plan. The planned capital increase of EUR 16 Mio could create ~5.7 Mio. new shares ▪ Cash Flow per Share: targeted to rise to EUR 0.57/share ▪ Net debt will reflect the capex plan and rise from EUR 166 Mio. (year-end ‘18) to EUR 220 Mio. in 2020.

32.5 41.3 33.6 1.0 1.5 9.3 4.8 2.0 1.0

• 5.0

10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0

EBITDA > EUR 41 Mio. CFPS to rise to EUR 0.57/share

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Dividend Policy

Stable annual dividend or equivalent, cash-flow related but at least EUR 10ct/share

DIVIDEND OUTLOOK 2018 ▪ Partly exempt of German withholding tax: First-time dividend

• ver 2017 of EUR 10ct/share has been paid out exempt of

withholding tax in Germany. The same regime will apply in part for the 2018 dividend. ▪ Strong comfort on 2018 numbers ▪ Equity ratio well above 25% ▪ CFPS guidance “at least EUR 0.52/share in 2018” versus EUR 0.49/share in 2017 DIVIDEND POLICY ▪ A stable and preferably increasing dividend or dividend equivalent ▪ Shareholders can be rewarded in cash, in stock or through a buyback of shares ▪ Dividend growth will generally be in line with the performance

• f the company results (CFPS as current performance

indicator), as long as it does not affect the 25% equity ratio. AT LEAST EUR 10CT/SHARE PLANNED FOR 2018

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THE SHARE & GOVERNANCE

O W N E R S H I P M A N A G E M E N T O U T P E R F O R M A N C E

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Outperformance Among German Developers & IPPs

Led by defensive character and growth

50 70 90 110 130 150 170 190 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 7C Solarparken Encavis PNE Wind Energiekontor ABO Invest

4-YEARS SHARE PRICE PERFORMANCE (REBASED) SHARE PRICE PERFORMANCE 2018 (REBASED)

75 80 85 90 95 100 105 110 115 7C Solarparken Encavis PNE Wind Energiekontor ABO Invest 21

Librae Holding 10.6% Rodolphe de Spoelberch 8.1% Distri Beheer 6.0% Steven De Proost 4.7% DVP Invest 4.5% XIX Invest 4.4% Sufina 3.1% Vlaamse Energieholding 3.1% Free float, 55.7%

Ownership

Objective to further institutionalize the shareholders’ structure and to increase free float

SHAREHOLDERS STRUCTURE Q1’2019

38.4% 38.7% 43.4% 44.0% 53.5% 55.7% 2014 2015 2016 2017 2018 Q1'19

TREND IN FREE FLOAT ▪ Rising free float reflects the regular issue of new shares to new institutional investors via private placements , and brings about increased liquidity in the stock. ▪ Target is to attract larger institutional investors to support the growth trajectory to 220 MWp and the long-term vision of 500 MWp

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Management

Entrepreneurship and industry-expertise

Steven De Proost, CEO ✓ Utilities & energy analyst and head of equity research at Delta Lloyd and Dexia ✓ Ranked by Handelsblatt as best analyst in the German power industry in 2008 ✓ Founder of 7C Solarparken NV ✓ CEO of 7C Solarparken AG as June 2014 with responsibilities for Strategy & Budgeting, Investor Relations and Technical operations ✓ Voted best CEO in European Solar Industry 2017 by CEO Magazine Koen Boriau, CFO ✓ Buy-side analyst and fund manager at Selectum ✓ Sector analyst for shipping & renewable energies at Dexia ✓ Co-founder of 7C Solarparken NV ✓ CFO of 7C as from May 2014 with responsibilities for Finance, Operations and Legal affairs

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CONTACT 7C SOLARPARKEN AG An der Feuerwache 15 95445 Bayreuth / Germany +49 (0) 921 23 05 57 77 www.solarparken.com ir@solarparken.com 24