October 2016
Investment Teaser Project Tesla
1.1 Novenergia II Fund at a glance
Novenergia II Energy & Environment (SCA), SICAR (the “Fund”) is a leading European independent renewable energy infrastructure fund with over 15 years of history
Consolidated platform with full operational and corporate control of the assets operating in Portugal, Italy, Spain, France, Poland and Bulgaria through a wholly owned company, Novenergia Holding Company, S.A. (the “Company”)
613MW1 of net installed capacity across wind, solar PV and mini-hydro technologies
Assets with contracted and / or guaranteed revenue under a stable regulatory framework
2
1 Experienced General Partner as one of its most valuable assets
Committed team of professionals with strong experience in the Fund, having developed it since its inception
Consolidated network resulting in direct involvement in the Portuguese renewable energy regulation review in 2012
3
Track record of value creation for its investors
NAV of €622m as of March 2016 resulting in a 12.6% IRR2 (net of fees) since 2001
c.5.0x return on capital since first fund constitution
4
Rationale of the transaction
The Fund was constituted with an expected life maturing in 2017
The General Partner is looking to raise a new fund (the “New Fund”) to acquire the Company and continue its development
A significant part of the current investor base is interested in reinvesting, on average, c.50% of their current exposure, which will result in c.25% of participation units reinvested in the New Fund
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The New Fund is expected to consolidate Novenergia as a leading international renewable energy producer and expand its platform across Europe and Latam
Positioned as an alternative to traditional fixed income investments, well suited for investors looking to match long-term liabilities
Solid total return targeted with an attractive and recurrent dividend yield component
Notes 1. Net installed capacity as of September 2016 2. IRR stands for Internal rate of return 1. Executive summary 3
1.2 Novenergia funds evolution
From an incipient infrastructure fund focused on Portugal to a consolidated European platform poised for growth
Novenergia 2010, SICAV (2001-2007)
The original fund was constituted in 2001 as a renewable energy fund with focus on Portugal
Initial start-up stage focused on development of new projects (site and wind assessments, license and permits, construction, etc.) and strategic partnerships
The fund built strategic partnerships with GDF, Enel and EDP as co-investors and also with technology providers such as Enercon
Novenergia II Energy & Environment (SCA), SICAR (2007-2017)
Novenergia II was constituted in 2007 to replace the previous fund
– All the investors of the previous fund reinvested and new capital was also raised
The SICAR aimed for:
– The consolidation of Novenergia as a relevant renewable energy producer in Portugal
– Expansion into Europe
In 2012, the fund created Novenergia Holding Company and transferred its assets to it in order to guarantee an efficient and fully operational company which would serve as a platform for future growth and value creation
Novenergia, S.C.S2 (2017 onwards)
The New Fund has a clear and defined strategy based on a balanced shareholder value creation consisting of
– Attractive dividend yield target
– Platform value increase through investments with low risk profile
– Repowering
– Over powering
– New projects
63MW1 at the end of the period in Portugal
613MW1 at the end of the period in Portugal, Spain, Italy, France, Poland and Bulgaria
c.900MW1 in existing geographies by 2022 and further upside in selected new countries
Novenergia, based in Luxembourg, has undergone a significant transformation over the past 15 years led by its experienced General Partner and on-the-ground executive management team
Start up phase Consolidation in Europe International expansion Source Company information
Notes 1Net installed capacity 2Societé en Comandite Simple
1. Executive summary 4
1.3 Novenergia - Key highlights of the asset platform
Novenergia is a leading European independent renewable energy producer with 613MW1 in operation across 6 geographies and an established platform poised for growth
Consolidated platform with full operational and corporate control of the assets
Strong in-house capabilities
Capacity to develop projects all across the cycle
Strong team with 100 highly qualified professionals providing outstanding operational performance
Continued analysis of potential growth opportunities
Operating across geographies with supportive regulatory frameworks …
… and above-average load factors
… with robust sustained growth profile based on a combination of repowering, over-powering and new project developments
Source Company information as of September
Note 1Net installed capacity
2016
Wind 77% Solar PV 18% Hydro 5% 1.4TWh annual production in 2015 44 projects in operation
Solid financial performance … Revenue evolution (€m) EBITDA evolution(€m) and margin (%)
1 2 3 Breakdown of capacity by technology Breakdown of capacity by country Portugal 80% Italy 9% Spain 3% Poland 3% France 3% Bulgaria 2% 138 137 124 130 79% 77% 74% 75% 2013A2014A2015A 2016B 174 179 166 174 2013A 2014A2015A2016B 1. Executive summary 5
1.4 General Partner as a key asset
General Partner with multidisciplinary experience in the renewable energy sector and solid network with involvement in the day to day business development
Proven
Direct
Leaders
of the geographical expansion and development of the platform
relevant participants in the renewable energy policy reform in Portugal
Key
involvement in the day to day operations
Eneop and Hfv Ample network across Europe and Latam
track-record in business development with both organic expansion and M&A activity, such as the acquisition and development of Generg,
Key value added
Source Company information
multidisciplinary team with a deep know-how of the renewable energy markets and business (28 years in the industry1 and 11 in Novenergia on average) 1 2 3 4 6 5 Carlos Pimenta Board member 36 years in the industry 15 years in the company Henri Baguenier Chairman 39 years in the industry 15 years in the company Albert Mitjà Board member 40 years in the industry 10 years in the company Armando Nunes Board member 36 years in the industry 15 years in the company Aníbal Fernandes Board member 32 years in the industry 9 years in the company Álvaro Martins Board member 36 years in the industry 15 years in the company Ottavio Lavaggi Board member 11 years in the industry 9 years in the company Executive members Alvaro Brandão 30 years in the industry 7 years in the company Roberto Krell 7 years in the industry 3 years in the company Bernardo Lucena 11 years in the industry 10 years in the company General Partner 1. Executive summary 6 Note 1 Energy sector in general
Experienced
Proven value creation1 …
1.5 Proven track record in value creation
Novenergia has delivered a strong IRR (net of fees) of 12.6% to its investors
…based on organic and inorganic business development
2001 Novenergia at its inception acquired c.20% of Generg and played a key role in its organic development
12.6% IRR
2007 Constitution and development of ENEOP as a leading partner, where Generg held 20%
2008 Start of operations in Spain
2009 Development of a JV with F2i2 in Italy, based on a project initially 100% owned by Novenergia
2011 Acquisition of an additional c.37.5% stake in Generg
2001Mar - 16
Novenergia has delivered strong returns to shareholders over the last 15 years
2011 Start of operations in France
2012 Start of operations in Bulgaria
2014 Start of operations in Poland
12.6% IRR and 5.0x cash on cash over the last 15 years
Source Company information
Note
1IRR based on the Net Asset Value of the fund (net of fees) as of March 2016 2Italian infrastructure fund
2016 Novenergia acquired an additional 42.5% in Generg in exchange of the capacity that originated from ENEOP becoming the sole owner of Generg
1. Executive summary 7
1.6 Key pillars for future returns
Novenergia aims to consolidate internationally its platform to deliver sustained growth whilst providing attractive dividend yields to its investors
Guaranteed or contracted revenues under stable regulation
Consistent production levels
Platform effect to benefit from operating efficiencies and larger footprint
Integration of Generg’s structure to result in operating efficiencies
Refinancing of existing debt to lower costs and free up cash
No licensing or resource risk; perpetual licenses to supply the grid in defined locations and installed capacities
Continued access to the grid
Increase in energy efficiencies from new turbines (i.e. increased load factors)
Repowering resulting in lower investment and higher certainty (e.g. climatic conditions; wind and solar resources) than new projects
Installed MW remain unchanged
Overpowering
New installed capacity in adjacent areas to existing projects
Higher certainty (e.g. climatic conditions; wind and solar resources) than new projects
Benefiting from more efficient turbines and technologies
Consolidation of the European platform through disciplined investments in new projects
New projects
Potential approach to Latin American markets
Novenergia’s business plan allows for attractive distributions in the form of regular dividends, as well as value creation through well-identified and disciplined investments to ensure robust value of the platform at the end of the investment period
Source Company information Stable revenue profile Operational and financial efficiencies Repowering potential Portfolio increase
Cash generation and shareholder remuneration
value creation
Asset
1. Executive summary 8
Wind
1.7 Novenergia Today
613MW of net installed capacity across 6 geographies in wind, solar PV and minihydro technologies with full operational and corporate control
Solar PV
Mini-hydro
Remuneration Average remaining operating life4
Source Company information . MW as of September 2016. Revenues as of December 2015, including Italian JVs proforma revenues. Remaining operating life as of December 2016
Notes
1One project has both mini-hydro and wind technologies
2Total revenue refers to electricity sales
3FiT stands for feed-in tariff
4Excluding repowering projects; as of Dec-16
5Novenergia´s Polish project has downside protection for the life of the assets due to a floor agreed with third parties
Operating assets Revenue 20152 €118.3m €12.5m €19.5m €8.5m €2.9m €3.9m 11 projects1 437MW1 2 projects 18MW 5 projects 33MW 7 projects 21MW 2 projects 15MW 8 projects 42MW 1 project 10MW 1 project 20MW 7 projects 17MW FiT3 15.0
Regulated (Pool price + specific remuneration) 22.0 years FiT 20.3 years FiT 20.5 years FiT 21.0 years Auction for new projects / Market price for old
5 23.0
Spain France Portugal Italy Bulgaria Poland
years
projects
years
1. Executive summary 10
Corporate structure Corporate development
1.8 Company evolution and transformation
From an infrastructure fund focused on Portugal to an European platform poised for growth
CONSOLIDATION (2007-2010)
Constitution of Novenergia 2010 SICAV
Constitution of Novenergia II (SCA), SICAR
Constitution of Novenergia Holding Company
Acquisition of c.20% stake in Generg and organic development
Constitution of ENEOP where Generg held 20% and led its organic development
Acquisition of an additional c.37.5% stake in Generg
Development of a Joint Venture with F2i
Acquisition of an additional 42.5% in Generg in exchange of its capacity that originated from ENEOP
Acquisition of Italian, French and Bulgarian minorities shareholders
Key metrics1
Source Company information
EXPANSION (2011-2016)
Netinstalledcapacity(MW)
2001 2009 2007 2011 2016 2012
Revenue(€m)
2001 START UP PHASE (2001-2006)
2007 3 4 -7 1016 25 63 86 122 136 156 432 481 491 541 610 613 2001200220032004200520062007200820092010201120122013201420152016YTD 2 - 2 2 2 2 8 13 24 43 46 104 131 174179166174 1. Executive summary 11 2 2 Notes 1Attributable installed capacity 2Proforma for full year impact of Italian asset split 3Proforma for Generg transaction. 2016 reflects budget 4As of Sep-16
Summary financials
Stable profitability and cash generation profile supported by secured revenue stream, long-term agreements for main cost items and disciplined investments
Key considerations
Stable revenue evolution throughout the cycle, with negative impact in 2015 due to adverse weather conditions and tangible recovery in 2016
Stable EBITDA margins in the region of c.75% during the recent years
– Strong operational performance and flexibility, allowing consistent healthy EBITDA margins
Disciplined investments across the cycle
Capital expenditure mainly focused on:
– Pipeline development and construction of new projects (e.g. Polish wind farm, solar plants in Italy and France, etc.)
–
To a lower extent, IT investments to increase operational efficiency
Low working capital requirements translating into limited cash flow
174 179 166 174 138 137 124 130 2013A2014A2015A2016B Revenues EBITDA 15 33 7 16 2013A2014A2015A2016B
€
1.9
Key P&L items1 (
m)
Company overview (€m)
Key considerations
Source Company information Notes 1Proforma figures to reflect the full year impact of the asset split of the Italian JV. Revenues include GSE
EBITDA margin: EBITDA –CAPEX (€m) 79.5%76.6%74.4%74.6% 89.2%75.9%94.5%87.7% Revenues CAGR 13-16B: (0.1%) EBITDA CAGR 13-16B: (2.2%) 1. Executive summary 12 Cash conversion: 124104117114
