Investor Presentation Our vision: A leading Norwegian renewable - - PowerPoint PPT Presentation

April 12, 2019

Investor Presentation

Our vision:

A leading Norwegian renewable energy group

Agder Energi in brief

Vertically integrated utility company Fourth largest supplier of hydro power – mean production of 8.1 TWh Fourth largest network company – 202 000 customers Leading market share in retail power sales – appox. 14 TWh in end user sales Underlying operating revenues approximately NOK 15 bn Government owned – 54.5 % by Agder municipalities and 45.5 % by Statkraft Headquarter in Kristiansand, Norway, 1 005 employees

Key credit strengths Strong market position

Low cost profile and flexible producer of hydro power Monopoly position through operation of distribution grids in the Agder Counties

Strong cash flow

High share of price hedging next 3-5 years, robust hedge the following 10 years due to long term power sales contracts Stable and considerable cash flow from monopoly business

Investment flexibility

Optionality in existing project portfolio

Strong and stable ownership structure

30 coordinated municipalities and Statkraft (A-), which is 100 % owned by the Norwegian state (AAA)

Core business activites

Hydro Power Build and operate hydro power stations Network Build and operate distribution network Energy Management Maximising profit of the hydro power portfolio, business retail sales in the Nordics and Germay Market LOS: Private end user sales Otera Ratel: Infra structure contractor Varme: District heating and cooling

Tom Nysted

CEO

Svein A. Folgerø

NETWORK

Jan T. Tønnessen

HYDROELECTRIC POWER

Steffen Syvertsen

ENERGY MANAGEMENT AE Kraftforvaltning Entelios Nordic Entelios Europe Nordgröön

Anders Gaudestad

MARKET LOS Otera Ratel AE Varme AE Venture

Frank Håland

SHARED SERVICES AE Fleksibilitet Enfo

Pernille K. Gulowsen

FINANCE AND RISK MANAGEMENT

Unni Farestveit

CSR AND CORPORATE DEVELOPMENT Board of directors NETWORK

Group structure

River system Mean production (TWh/year) Reservoir capacity (TWh) Otra 3.6 2.7 Mandal 1.7 0.5 Arendal 1.3 0.7 Sira-Kvina 0.8 0.7 Ulla-Førre 0.3 0.5 Andre 0.4 0.1 Sum 8.1 5.3

Hydro power with high flexibility

9 100 9 000 8 900 8 800 8 700

2014 2015 2016 2017 2018

Production GWh

Sole network owner in Agder

• Agder Energi Nett owns and operates the regulated transmission and distribution

networks in Aust-Agder and Vest-Agder

• Stable and considerable cash flow
• Smart metering (AMS) in full operation
• Network capital NOK 5 083 mill

Results and value creation best in industry 20% improved profitability in existing business Develop business models and positions related to digitalization and new energy markets Strategic goals toward 2020

Optimizing existing business activities Positioning to offer scalable hydro power capacity Market operations posisitioning for future energy markets with flexibility and effect Posistioning for future network business Energy solutions to private consumers Focus areas

Investments

Planned investments cirka NOK 1 030 mill per year on average in the 5 year period, of which NOK 440 mill per year is comitted and government

• imposed. After 2021 back to reinvestment level

The next few years a high degree of customer initiated projects with the network business Investment flexibility within the hydro power project portfolio

49 % 45 % 6 %

Hydro Network Other

Investments 2018-2020

Largest projects Project cost (ca, NOK mill) Completion Hydro power Skjerka generator 300 2019 Hydro power Åseral Nord 870 2020 Hydro power Planned projects 340 2021

Dividend policy

Indicative dividend ratio 70% based on the Group’s net income to majority according to underlying IFRS previous year Significant nonrecurring sales gains or losses may be considered to be excluded from the dividend calculation. No dividend floor The revised dividend policy applies for the years 2018-2020

Financial update

Profit from operations

NOK 2 957 mill (NOK 2 597 mill) in underlying EBITDA

Investments

NOK 1 583 mill (NOK 1 516 mill), of which NOK 92 mill (NOK 99 mill) of investments within network paid by customers

Other activities

51 % of shares in Otera Infra was sold to Roadworks in May, closing in August In June, Agder Energi sold the Honna transmission substation in Åseral to Statnett

HMS

Low and stable sickness absence of 3,6%

Highlights 2018

Reservoir levels NO2

0% 20% 40% 60% 80% 100% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 % of normal 2019 2018 10 yrs average

Power prices NO2

10 20 30 40 50 60 70 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Øre/KWh Forward price 2019 Spot price 2019 Spot price 2018

Revenues and EBITDA per segment

Revenues (NOK mill) EBITDA (NOK mill)

* Reorganization, Energy Management from 2016 2 000 4 000 6 000 8 000 10 000 12 000 14 000 16 000 2014 2015 2016* 2017* 2018* Hydro Network Market Energy Mgt 2 440 2 194 2 520 2 679 1 588

• 500

500 1 000 1 500 2 000 2 500 3 000 3 500 2014 2015 2016* 2017* 2018* Hydro Network Market Energy Mgt

Solid cash flow providing financial strength

*Unadjusted, adjustments are made in rating. Interest bearing debt on 4 quarters rolling basis

Cash Flow (NOK mill) FFO*/Net Debt

1 502 1 779 1 189 2 049

• 1 500
• 1 000
• 500

500 1 000 1 500 2 000 2 500 2015 2016 2017 2018

Operational CF Net investments Dividends

19,40 % 18,40 % 22,40 % 22,90 % 0% 5% 10% 15% 20% 25% 2015 2016 2017 2018

FFO*/Net Debt

Robust funding structure and diverse maturity profile

Funding sources Maturity profile (NOK mill)

Unutilized credit facilities NOK 1 500 mill to support short term funding and refinancing risk, overdraft facility NOK 1 000 mill for operational liquidity and Nasdaq cash requirement

53% 29% 8% 5% 5%

Bonds EUR Loans Green Bonds CP Schuldschein

• 200

400 600 800 1 000 1 200 1 400 1 600 2019 2021 2023 2025 2027 2028+

Bonds EUR Loans Green Bonds CP Schuldschein

Vertically integrated business model with monopolistic power distribution, strong position of hydro power generation in the merit system and leading retail sales business Profitable and environmentally-friendly hydro power production with substantial hedging agreements and sizeable reservoir capacity Long-term, committed majority owners that are jointly

• rganized and show ability and willingness for potential

parent support

Scope credit rating affirmed Aug-18

God kraft. Godt klima.

Agder Energi:

God kraft-godt klima