48
Investor Presentation September 2018
Investor PresentationSeptember 2018
Disclaimer
2
The information contained in these materials has been provided by ContourGlobal plc (the “Company”) and has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. It is not the Company’s intention to provide, and you may not rely on these materials as providing, a complete or comprehensive analysis of the Company’s financial position or prospects. The information and opinions contained in these materials are provided as at the date of this presentation and are subject to change without notice. Neither the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation.
Certain statements in this presentation are “forward-looking statements.” All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company’s financial position, business strategy, plans and objectives of management for future operations, are forward-looking statements. These statements involve a number of factors that could cause actual results to differ materially, including, but not limited to, changes in economic, business, social, political and market conditions, success of business and operating initiatives, and changes in the legal and regulatory environment and other government actions. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Any forward-looking statement made during this presentation or in these materials speaks only as of the date on which it is made. The Company assumes no obligation to update or revise any forward-looking statements.
Information contained herein relating to markets, market size, market share, market position, growth rates, penetration rates and other industry data pertaining to the Company’s business is based on the Company’s estimates and is provided solely for illustrative purposes. In many cases, there is no readily available external information to validate market-related analyses and estimates, thus requiring the Company to rely on internal surveys and studies. The Company has also compiled, extracted and reproduced market or other industry data from external sources, including third parties or industry or general publications, for the purposes of its internal surveys and studies. Any such information may be subject to significant uncertainty due to differing definitions of the relevant markets and market segments described.
This presentation contains references to certain non-IFRS financial measures and operating measures. These supplemental measures should not be viewed in isolation or as alternatives to measures of the Company’s financial condition, results of operations or cash flows as presented in accordance with IFRS in its consolidated financial statements. The non-IFRS financial and operating measures used by the Company may differ from, and not be comparable to, similarly titled measures used by other companies. The non-IFRS adjustments for all periods presented are based upon information and assumptions available as of the date of this presentation.
Table of Contents
H1 2018 Operating Results 25
Introduction to ContourGlobal 4
H1 2018 Growth Update 18
Appendix 37
H1 2018 Financial Results 29
3
H1 2018 Highlights 15
Focus on ContourGlobal’s Latam Business 12
4
I. Introduction to ContourGlobal
Orellana CSP solar farm (Extremadura, Spain)
5
World Class Operator with Large Global Footprint Diversified Across Geographies and Technologies
Note: Gross Capacity in MW; (1) GBPUSD of 1.31 as of 09-Nov-2017.(2) Including acquisitions completed as of 30-Jun-2018, such as CSP acquisition.
THERMAL (50%) WIND (19%) HYDRO (8%) SOLAR (22%)
CONSISTENTLY STRONG OPERATIONAL AND FINANCIAL PERFORMANCE
3CONTINENTS
101POWER GENERATION ASSETS
4,312MW INSTALLEDCAPACITY
COUNTRIES18
AFRICA (5%)228MW
EUROPE (62%)2,660MW(2)
LATAM (33%) 1,424MW
DELIVERING ON OUR GROWTH STRATEGY
MAINTAINING ROBUST CREDIT METRICS
£ SUCCESSFUL IPO IN NOVEMBER 2017 – FTSE 250 (TKR: GLO)
PRIMARY PROCEEDS: £306M ($400M)(1)
SECONDARY PROCEEDS: £168M ($220M) (1)
Stable Cash Flow Generation
More than 90% of our revenues are contracted or regulated through to 2023
12 years of weighted average remaining contracted/regulated term(3)
Minimal fuel price or commodity risk
Inflation adjustments in most PPAs further protect value
Weighted average rating of counterparties is BBB-/Baa3(4)
Further protection through Political Risk Insurance (post PRI off-taker weighted average rating of A/A2)(4)
6
Key HighlightsContourGlobal Has Demonstrated High Quality Growth Since Inception
(1) Pro Forma Adj. EBITDA / Revenues giving effect to the Spanish CSP Acquisition.(2) Calculated as Q1 LTM CFADS/Interest (CFADS as defined in bond indenture). (3) Weighted by Pro Forma Adjusted EBITDA for the last twelve months ended June 30, 2018
(4) Weighted by Pro Forma Adjusted EBITDA for the twelve months ended March 31, 2018.(5) Including acquisitions completed as of 30-Jun-2018, such as CSP acquisition.
Proven track-record of executing greenfield developments and acquisitions
We developed 1 GW and acquired 3.3 GW of our current portfolio(5)
Delivering on our Growth Strategy
29%
24%
PF Adj. EBITDA(1): $643m
CFADS: $291m
DSCR(2): 6.8x
Robust Financial Performance LTM H1 2018
92.9%
96.2%
Ave. Thermal Equivalent Availability
Ave. Renewable Equivalent Availability
Top Decile Operating Performance (2016-H1 2018)
‘Target Zero’ LTIs
CAGR vs. 2016
7%
21%
22%23%
18%
9%
Fuel Oil Coal Natural Gas
Solar Wind Hydro
7
Global Footprint Diversified Across Geographies and TechnologiesStrongly Diversified Financial Results
LTM H1 2018 PF Adj. EBITDA $643m
LTM H1 2018 PF Adj. EBITDA by Technology(1) LTM H1 2018 PF Adj. EBITDA by Geography(1) LTM H1 2018 PF Adj. EBITDA by Currency(1)
(1) Pro forma Adj. EBITDA: reflects full year contribution of Spanish CSP. LTM H1 2018 (excluding H1 for Spanish CSP) + FY 2017 Spanish CSP
Renewable50%
Thermal50%
61%19%
14%
4%
1%
EUR USD
BRL Unhedged BRL hedged to USD
Other
59%29%
12%
Europe LatAm Africa
3
4
6
6
7
8
8
12
13
16
16
17
18
18
18
18
23
23
French Caribbean
Arrubal
Austria Wind
Maritsa
Solutions
Bonaire
Solar Slovakia
Sochagota
Solar Italy
Asa Branca
Hydro Brazil
Inka
Togo
Chapadas Complex
Spanish CSP
Cap des Biches
Vorotan Complex
KivuWatt
8
Stable Long-Term Contracted / Regulated Revenues Weighted Average Remaining Contracted / Regulated Term of 12 Years(1)
Remaining Contracted / Regulated Life by Asset (Years)(2)
Current contracts / regulated revenues
have a weighted average remaining
term of c.12 years(3)
% of Total Estimated Adjusted Revenues in 2018E-2023E
(1) Weighted by Pro Forma Adjusted EBITDA for the year ended December 31, 2017.(2) For assets with multiple PPAs, numbers shown based on midpoint of the expiration dates for such PPAs; data as of 31-Dec-2017.
>90%
<10%
Contracted / Regulated Revenue Uncontracted / Unregulated Revenue
Compania Electrica de Sochagota S.A. E.S.P. (‘‘CES’’) PPA Expiration
• CES has already signed 4 contracts to replace PPA set to expire on 07-Jan-2019
• Sochagota PPA was successfully extended to 2024, with an additional 5-year extension expected
• Contracts account for 95% of the available energy
• Contracts with established energy traders in the Columbian market (SOEN, VATIA, SYNERMIN AND NITRO ENERGY)
• CES has signed agreements for the supply of coal with 20 local coal supply producers for 10 years starting January 2019
Strong Track Record of Value Creation Ongoing Industry Transformation Favours ContourGlobal’s Disciplined,Opportunistic Growth Strategy
285 285 285 316
715
2,433 2,4512,643
2,875
3,6223,934
4,158 4,312
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Current
Financial liquidity coupled with a lean organizational structure enables patience in identifying attractive targets and quick execution of transactions
Installed Capacity
(MW)
Strong track record of creating value through developing greenfield assets and integrating acquisitions where ContourGlobal has a competitive advantage
9
Developments Greenfield Acquisitions Acquisitions with Refurbishment Acquisitions
Operationally led opportunistic investor with a long-term focus employing efficient capital structure and risk mitigation mechanisms
Profile
(1)
(1) Including acquisitions completed as of 30-Jun-2018, such as Spanish CSP acquisition.
Value Creation
Capabilities
10
Note: % change from acquisition to 31-Dec-17.(1) Solar Italy portfolio is currently 65 MW following the Dec-2017 and 2018 acquisitions.
Maritsa908MW
Lignite Plant
Arrubal800MW
Gas-Fired Plant
Termoemcali240MW
Gas-Fired Plant
Solar Italy(1)
31MWSolar PV Assets
Bonaire28MW
Wind & HFO
Austria Wind150MW
Wind Farm
Value lever
Fixed Cost Reduction Availability Reliability / EfficiencyOther operational
ImprovementsFinancing
2%€2m fuel
savings
22% 2%
InsourcedOperations;
Zero LTIpost acquisition
CoD 0.6%
VendorRefinancing
1%Operations
insourced
20% 2% Repowering
32% 1%O&M
insourced
16% 3%Blackouts 85%
Zero LTIssince 2015
26%
Operational Excellence Drives World-Class PerformanceUnique Track-Record of Creating Value Through Operational Improvements Despite Fixed Cost Reduction
Focu
s o
n M
inim
isin
g Ex
po
sure
Price Risk
• Long term PPAs and fuel supply agreements to minimize cashflow volatility
• Pass-through mechanisms to minimize commodity and other risks
• FiTs provide long-term revenue visibility
Currency Risk
• Minimal currency exposure at asset level through natural hedging
• Most contracts are inflation-linked
• Debt currency aligned to cash flow currency
Credit Risk
• Long term contracts with credit-worthy counterparties
• Contracts often contain termination provisions which cover equity and/or return on equity, in case of breach of contract
• Project debt generally amortises over life of PPA
Political Risk • Assets in emerging markets protected by Political Risk Insurance where deemed appropriate
Co
reC
om
pet
ency
Operational Risk
• Strong operations team led by experienced managers with an average of over 24 years of industry experience
• Contour operates all of the thermal energy plants except Sochagota, TermoemCali, Guadeloupe and Saint Martin and all of the renewable energy plants
• Extensive feasibility studies to minimise renewable resources risk
11
Diligent Risk Management ApproachDe-risked Business Model Maintained Across Entire Portfolio
12
II. Focus on CG’s LatamBusiness
Sao Domingos II Hydro Power Plant (Brazil)
13
Focus on ContourGlobal’s Latam Business24 Operating Assets in 5 Countries
THERMAL (38%)
WIND (50%)
HYDRO (12%)
LATAM1,424MW Segment Facility / Project Name Location
Gross Cap.(MW)
Number of Assets
Fuel Type (1) CG Ownership
LTM H1 2018 Adj. EBITDA
($m)TermoemCali Colombia 240 1 Natural Gas / Diesel 37% 7.5Sochagota Colombia 165 1 Coal 49% 14.5CG Solutions Brazil 76 4 Natural Gas 80% 17Energies Antilles / Energies St Martin
FrenchCaribbean
35 2 HFO / LFO 100% 15.8
Bonaire Dutch Antilles 28 1 HFO / Wind 100% 7.2
Total Thermal 544 9 62.0
Chapada Complex Brazil 438 3 Wind51%, 51%,
100%55.5
Hydro Brazil Brazil 167 9 Hydro 79% (2) 35.6Asa Branca Brazil 160 1 Wind 100% 17.7Inka Peru 114 2 Wind 100% 28
Total Renewable 879 15 136.8
Total portfolio 1,424 24 198.8
(1) HFO refers to heavy fuel oil, and LFO to light fuel oil. (2) Capacity weighted.
58.6
91.3 113.2
161.8
196.9 198.8
2013 2014 2015 2016 2017 LTM H1 2018
Adj. EBITDA ($m)
CAGR = 31%
14
Focus on ContourGlobal’s Latam BusinessKey Focus Areas for Growth
Brazil– CG Solutions expansion– Gas-fired cogeneration– 44 MW– Advanced stage of negotiation
Colombia– Sochagota expansion– Coal– 165 MW– Capacity auction scheduled for
January 2019
Peru– Wayra project– Wind– ~120 MW– Renewable auction expected in
2019/2020
Mexico– Alpek acquisition– Gas-fired cogeneration– 518 MW– Advanced stage of negotiation
– Aeroflash project– Wind– ~150 MW– Baja California interconnection
expected in 2021/2022
Key Focus Areas
Attractive midsize or thermal M&A
CG Solutions platform expansion
Generally Avoiding
Competitive renewable greenfield and M&A
III. H1 2018 Highlights
Sabaudia solar farm (Italy)
DIVIDEND GUIDANCE
Interim dividend of $26.6m, 4.0 USD cents per share, corresponding to 1/3rd of $80m (the high end of the previously announced range) to be paid on September 7, 2018
H1 2018 Results Strong Financial Performance – Double Digit Revenue and Adj. EBITDA Growth
16
H1 2018 LTM(1) H1 2018
(1) LTM: H2 2017 + H1 2018(2) Funds From Operations is defined as Cash Flow from Operating Activities excluding changes in working capital, less interest paid, less maintenance capital expenditure, less distribution to minorities.
Funds from Operations is a non-IFRS measure(3) Proforma Net Leverage Ratio: Adjusted EBITDA excludes earnings from newly commissioned development projects and acquisitions that have yet to contribute to a full year of earnings while Adjusted Net
Debt excludes debt associated with these newly commissioned development projects and acquisitions. This ratio includes Net Debt for Spanish CSP and Adj. EBITDA FY 2017 for Spanish CSP
Total Revenue+14%
$1.1bn
$541m
$264m
Adj. EBITDA +18%
FFO (2)
+19%
Total Revenue+16%
$535m
$262m
$111m
Adj. EBITDA +12%
FFO (2)
+8%
RESILIENT BALANCE SHEET
4.6x LTM H1 2018 Net Leverage Ratio(3)
We expect to return to approximately 4.5x by year end through amortisation of the Company’s project financings
$270m Liquidity at Parent Level
$643m PF Adj. EBITDA +40%
H1 2018 ResultsExecuting Operations and Growth Strategy as Planned
17
Closed 250 MW Spanish CSP acquisition and integration to be completed ahead of schedule. O&M reorganisation strategy expected to reduce fixed costs by 15% per annum from Year 3
Construction of Phase I of Austria Wind Repowering commenced, with planned COD(1) in H1 2019, increasing generation by 81% compared to the earlier installation(2)
Continued execution of European Solar Portfolio Roll-Up strategy with completion of acquisition of 22 MW in H1 2018
Kosovo Project EPC(3) tender underway with formal request for proposal to be released on August 23. Selection of EPC Contractor to happen by end of year
GROWTH STRATEGY PROGRESSING WELLVERY STRONG OPERATIONAL PERFORMANCE
Industry Leader in Health and Safety 0.00 YTD LTI Rate on track to achieve
‘Target Zero’ in 2018 0.14 YTD TRI Rate vs 0.16 target
94.9% Combined Average Availability Across the fleet in line with or close to Top Decile targets for both Thermal and Renewable segments
(1) Commercial Operating Date (2) Based on P65 Generation (3) Engineering, Procurement and Construction
Refinancing of corporate bond led to increase in tenor (weighted average of 5.8 years) and reduction of corporate interest costs by €8.3m per annum Tranche 1: €450m - 5yr @3.375% Tranche 2: €300m - 7yr @4.125%
ATTRACTIVE REFINANCING OF HIGH YIELD DEBT
18
IV. H1 2018 Growth Update
Maritsa lignite power plant (Bulgaria)
Growth UpdateSuccessful Closing of Spanish CSP, Italian PV Transaction Achieved and Advanced Negotiations for Additional Transactions Ongoing. Well-filled Greenfield Pipeline with Various Projects Advancing Towards Important Milestones
19
M&A YTD Performance & Pipeline Highlights
2 deals closed, Italian PV transaction closed in March and Spanish CSP transaction closed in May
275 MW in capacity added – ~7% capacity growth
Successful ~14 MW PPA extension in Brazil Solutions
Ongoing negotiations for ~518 MW Mexican CHP portfolio
Over 300 MW of further European renewables and thermal transactions in advanced evaluation phase
Signed a farm-down of 49% of the Italian & Slovakian Solar PV Portfolio including a joint development agreement in August 2018
Generally evaluating other potential minority sales across the portfolio
(1) Incl. Italy solar PV acquisition closed in late 2017(2) Based on P65 generation
On May 10, we achieved Closing of the 250 MW Spanish CSP Portfolio that we acquired from Acciona $150m(1) of additional $500m Adj. EBITDA 2022 Growth Target achieved within 6 months
Business Development - Highlights 30% completed2022 $500m Adj. EBITDA Growth Target
Greenfield Pipeline Highlights
Austria Repowering Phase 1 projects moved into construction with CODs expected in H1 2019 as planned and in line with budget. It is expected the repowering will increase generation by 81%(2) compared to the earlier installation for those assets.
Good progress on the development of Austria Repowering Phase 2 that will increase generation by 46%(2) compared to the earlier installation for those assets.
Positive developments on the Sochagota expansion in Colombia, with a capacity auction expected to happen in Q1 2019 following the draft announcement from the CREG (Energy and Gas Regulation Commission) in June this year
~40 MW growth pipeline opportunity in Brazilian Solutions portfolio with existing client
Ongoing ~25 MW integrated PV & battery & wind pilot project to expand capacity of existing Bonaire asset
Capital Transactions – Italy and Slovakia PV Sell-DownSale of a 49% Minority Stake to Funds Advised by Credit Suisse Energy Infrastructure Partners AG
20
Value Creation
The partnership leverages on ContourGlobal’s expertise as best in class operator and developer
Development agreement under which the parties seek new acquisition opportunities and ContourGlobal’s expert team executes transactions
Asset management agreement under which ContourGlobal will manage the Italian and Slovakian operations, providing corporate services and O&M services to the existing and prospective assets
Strategic Partnership
CSEIP is one of the European leaders in direct energy infrastructure investment which acquires significant minority stakes in long-term contracted or regulated assets from top tier industrial players
Complementary business model as CSEIP is backed by institutional investors seeking long-term capital appreciation and pursing a buy and hold strategy
Signed sale of a 49% stake in ContourGlobal’s solar PV portfolio in Italy and Slovakia to funds advised by Credit Suisse Energy Infrastructure Partners AG (“CSEIP”)
Industrial partnership with buy and hold investor
Value creation through long-term asset management agreement and development incentive structure for new acquisitions
Highlights
Solar Slovakia - Budulov
21
Capital Transactions – Italy and Slovakia PV Sell-DownSale of a 49% Minority Stake to Funds Advised by Credit Suisse Energy Infrastructure Partners AG Partnership with CSEIP marks the next milestone for our European solar roll-
up strategy as it combines extensive industry network, considerable transaction experience and sector specific knowledge of two leading institutions
Minority sale at attractive premium for highly efficient regional portfolio which was built through development of greenfield projects and a series of acquisitions
Further value creation to the existing portfolio and future acquisitions through asset management and development fees
Portfolio is well positioned for future growth which targets additional 135 MW
We continue to control and consolidate the portfolios as 51% majority owner
Purchase price of EUR 63m(1) for a 49% stake. Net Equity Multiple: 2.3x and Implied EV of €334m(2)
Solar PV
99 MW – total installed capacity
Italy and Slovakia
Closing expected in Sep-18 subject to regulatory approvals
Key Facts
65 MW
35 MW
(1) Expected purchase price at closing including locked box interest and upfront payment of expected refinancing proceeds. Closing is expected for September 2018 (2) EV includes the contemplated refinancing (EV is €302m excl. the contemplated refinancing)
Slovakia Italy Existing Italy Pipeline
5
Portfolio Growth over Time, MW
29
35
6565
135
35
Italian PV Portfolio Expected To Reach 200 MW
611
Spanish CSPPositive Update on Regulatory Return Reset
CSPs have long-term regulated rate of return, with a six year regulatory period
Regulated rate of return is currently set at 7.4% but the rate of return will be reset as of 1 January 2020
The new rate of return for the period 2020-2025 will be announced in summer 2019
Regulation
Current regulated return of 7.4% was set by reference to
– The average Spanish sovereign 10yr bond yield for the 24 months prior to the reset announcement
– Plus 300bps
July 2018
Regulated Return Reset – Past Practice
In July 2018, the Spanish regulator (CNMC) published a proposed methodology for the upcoming rate reset
The methodology is based on a WACC approach for power generation
After applying the proposed methodology, CNMC recommends a return rate of 7.04% for the regulatory period 2020-2025
CNMC’s opinion is a recommendation to the Spanish Government, which will still need to approve the applicable return rate for the next regulatory period
Regulated Return Reset – Current Indications
22
23
Major Milestones
Commercial Close 20-Dec-2017
EPC Pre-Qualification Initiated(1) 21-Jun-2018
OPIC Screening Committee First weeks of August
Submission of pre-qualification bids 16-Aug-2018
Release of RfP Document to Prequalified EPCs 23-Aug-2018
Finalise Project ESIA (Plant ESIA and Lignite Mine ESIA)
31-Oct-2018
Selection of Preferred EPC Contractor 26-Nov-2018
Completion of EPC contract 10-Dec-2018
OPIC Board Meeting for Final Approval Mar-2019
Financial Close and EPC Notice to Proceed 29-Mar-2019
Commercial Operation Date (COD) Q4 2022
Financing
We are committed to working with the Government of Kosovo to complete the project, regardless of whether the World Bank participates or not
Various financing options available for a total debt of approximately €930m. Current plan being a mix of Development Finance Institutions (“DFI”) and Export Credit Agencies (“ECA”)
– Target is to maximise ECA guaranteed financing and cover the remainder with DFI funding, such as the Overseas Private Investment Corporation (“OPIC”)
ECAs
– Initial engagement underway with ECAs from Japan, Korea and Poland, among others
– ECA selection will be driven by EPC tender outcome as the process has been crafted as an “EPC + Finance” process
Minority Shareholder
– We are initiating preliminary discussions with minority partners for a stake of up to 49%
Kosovo Project UpdateBuilding Critical Infrastructure for One of Europe’s Poorest Economies
Kosovo A Plant – to be decommissioned at COD of new Kosovo plant
Municipality of Obiliq and Kosovo B plant
(1) 24 interested parties from Japan, South Korea, US, Germany, Turkey, China, Greece, and Poland
The development of four additional repowerings is well on track and all permits areexpected to be received in 2018 for Berg and TD projects and 2019 for the otherprojects
Net capacity expected to be 53-60 MW after repowering
Based on the current regulation these repowering projects will benefit from a 13 yearFIT contract
The total investment is estimated to be between €71-82m with expected COD for 2021-2022
ContourGlobal is exploring a number of additional projects in Austria in pre-feasibilityphase
Expected FiT to range between €81-82/MWh
24
Rapid Progress on the Wind Repowering in AustriaRepowering of Four Austrian Wind Parks is Well Underway
Overview - Phase I Projects
Overview - Phase II Projects
The construction of Velm-Götzendorf (VG) and Scharndorf Ia (SD Ia) started in Januaryand May 2018
The net Capacity after repowering will be of 28 MW in total: VG - 12 MW VG and SD Ia –16MW
The total investment is €43m. The projects are fully equity funded due the highlyattractive unlevered returns, however we keep the optionality to refinance post COD
COD is expected for January 2019 for VG, and April 2019 for SD 1a
Secured FiT of €83/MWh for VG and €93/MWh for SD Ia
Preparatory works for decommissioning of Velm-Götzendorf
25
V. H1 2018 Operating
Results
KivuWatt - Methane Gas Extraction Facility & Power Plant (Rwanda)
0.00 0.03 0.07 0.07 0.10 0.15 0.18 0.18 0.19 0.24 0.26 0.26 0.30 0.360.46 0.46 0.50 0.54
1.21 1.30
26
Industry Leading Health & Safety Performance0.00 YTD LTIR (1) Achieved
Inka Wind Farm, Peru
Leading the Sector in Health and Safety Performance(4)
(1) Lost Time Injury Rate (“LTIR”) is an industry standard reporting convention for calculating injuries in the workplace(2) TRIR: Total Recordable Incident Rate(3) 0.03 figure reflects LTM occurrences(4) Source: Peers information as last reported in Annual Reports/Sustainability Reports published by companies
‘Target Zero’ Remains ContourGlobal’s Core Priority
0.44
0.08
0.27
0.11 0.12 0.130.16 0.160.220.20
0.090.09 0.060.06 0.06 0.03
0.030.03 0.03 0.03
1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018
QUARTELY LTIR LTIR 12 MRA
(3)
Our YTD TRIR(2) is 0.14 vs. a target of 0.16
95.1% 94.8% 98.2% 97.1%
2016 2017 H1 2017 H1 2018
World Class Operating PerformanceContinued Strong Performance Across Thermal and Renewable
27
Thermal – Equivalent Availability Factor (1) (%) Renewable – Equivalent Availability Factor (1)
(%)
(1) Equivalent Availability factor refers to the actual amount of time a plant or group of plants is available to produce electricity, which reflects anticipated maintenance and scheduled interruptions
(2) Thermal benchmark sourced from Navigant Benchmark Study (comparable size, technology and load profile of the plant)(3) Renewable benchmark values are sourced from peers benchmarking studies performed by DNV GL for Wind and Navigant for small Hydro plants. Vorotan is not represented in the
Benchmark comparison due to the specifics of the asset.(4) Adjusted for Chapadas Complex ramp-up period and maintenance at Vorotan in 2016
Group availability for both segments in line with or close to top decile targets Brazil wind experienced outages, affecting availability in renewable fleet. Improvement has been made in the cluster’s
performance and we continue to have significant focus on bringing the cluster up to CG’s operational excellence standards
Benchmark= 92.3%(top decile of peers2)
Benchmark= 97.9%(top decile of peers3)
Availability for H1 2018 excludes Vorotan impact due to rehabilitation works
97.1%(4)
Availability for H1 2018 was affected by rehabilitation works in French Caribbean and outages and planned maintenance in KivuWatt
93.0% 92.6%94.4% 93.3%
2016 2017 H1 2017 H1 2018
86.2%
99.1% 100.0% 97.5% 96.9% 97.9% 93.5%
76.6%83.6%
Maritsa(908MW)
Arrubal(800MW)
Termoemcali(240MW)
Sochagota(165MW)
CG Solutions(132MW)
Togo(100MW)
Cap des Biches(86MW)
French Caribbean& Bonaire (63MW)
KivuWatt(26MW)
Performance of the Consolidated Fleet Above Target94.9% Availability Achieved vs. H1 2018 target of 93.6%
PPA Minimum Availability Requirement
28
Scharndorf Wind Farm, Austria
Knockmore Hill Solutions Plant, Northern Ireland
Thermal fleet equivalent availability factors
Renewable fleet equivalent availability factors
Turbines Engines Solutions
96%
80%82%
92% 92%
65%
41%
95.0% 98.2% 99.3% 93.9% 98.6% 98.7% 98.3%
ChapadaComplex(438MW)
Vorotan(404MW)
Hydro Brazil(167MW)
Asa Branca(160MW)
Austria Wind(150MW)
Inka(114MW)
Solar Europe -PV and CSP(349MW)
Wind Hydro Solar
29
VI. H1 2018 Financial
Results
Asa Branca Wind Farm (Brazil)
142208
256 264
103 111
2015 2016 2017 LTM H12018
H1 2017 H1 2018
Robust Financial PerformanceSignificant Growth in Adjusted EBITDA and FFO
30
(1) Adjusted EBITDA and FFO are non-IFRS measures as defined in IPO Prospectus(2) CAGR calculated between 2015 and LTM H12018 PF figures(3) Proforma numbers: Adjusted to reflect full year contribution of Spanish CSP. LTM H1 2018 (excluding H1 for Spanish CSP) + FY 2017 Spanish CSP
Adjusted EBITDA (1)
(US$m)
CAGR: 30%(2) CAGR: 41%(2)
FFO (1)
(US$m)
331440 513 541
234 262
2015 2016 2017 LTM H12018
H1 2017 H1 2018
643(3) 337(3)
+12%+8%
2018 Adj. EBITDA expected to be in the range of $600-630m
94
120
( 9 )33
2
Adj. EBITDA H1 2017 Organic Acquisitions FX Impact Adj. EBITDA H1 2018
159 157163
(5) 3
6
Adj. EBITDA H1 2017 Organic Acquisitions net ofDivestitures
FX Impact and Other Adj. EBITDA H1 2018
Spanish CSP Italy Solar and
Biogas Portfolio Hydro Brazil(5)
31
ADJUSTED EBITDA - THERMAL DIVISION (US$m)
ADJUSTED EBITDA - RENEWABLE DIVISION (US$m)
Solutions Brazil(2)
(1) (1)
(1)
(1) Before Corporate Costs(2) Solutions Brazil Acquisition closed on March 17th, 2017. Kramatorsk sell-down occurred in February 26th, 2018. (3) Organic declines are due to timing of availability payments in Maritsa which will be compensated in H2 2018 for the Thermal fleet and to resource performance in Brazil Wind for the Renewable
fleet(4) FX and Other: Includes USD 12m positive impact derived from FX, and USD 6m negative impact from non-cash provision release last year in French Caribbean(5) Spanish CSP Acquisition closed on May 10th 2018. Italy Solar and Biogas portfolio closed on December 4th, 2017 and March 22nd, 2018. Hydro Brazil closed on March 17th, 2017.
Successful Integration of New Assets Drives Growth
Kramatorsk
(1)
27% increase
2%increase
(3)
(3) (4)
Resource Performance Level
Renewable Resource PerformanceContinued Resilience in Portfolio Performance
32
P84 P46 P16 P81 P95P93
Approximately 5% Adjusted EBITDA impact from resource (combination of lower revenues and/or additional costs arising from the purchase of additional power in the spot market to compensate for lower generation)
Impact on H1 2018 Adjusted EBITDA driven by weak resource across the portfolio, especially Brazil Wind and Austria Wind
H1 is typically weaker in renewable resource due to seasonality. We are seeing and expect improvement through to the end of the year
Impact renewable resource on H1 2018 Adjusted EBITDA (US$m)(1)
(10.4)
(1.4)
(3.0)
(1.2)
0.5
(0.5)
Brazil Wind Peru Wind Austria Wind Solar Europe PV(Italy + Slovakia)
Armenia Hydro(Vorotan)
Brazil Hydro
2017
H1 2018 P78 P92 P71 P86 P67P90
(1) Impact on Adj. EBITDA due to resource performance calculated against H1 2018 budget.
33
245.7
19.4 3.4
261.8
H1 2018 @ H12017 FX Rates
EUR Impact BRL Impact H1 2018
H1 2018 Adjusted EBITDA, FX sensitivity
FX (vs. USD) H1 2017 --> H1 2018BRL 3.175 (7.50)% 3.413EUR 0.923 10.51% 0.826
BRL Hedging
We have hedged approximately BRL75m of cash flowseach year over the next four years through a 1 yearforward in 2018 and call options for 2019 to 2021
The 2018 forward is currently out of the money (strikerate of 4.068) with current net settlement of ~$0.6m (asat June 30, 2018)
The 2019 to 2021 call options are also out of the moneyso, at current FX rates, there would be no settlement atexpiry
Hedged Position 2018 2019 2020 2021Hedged Notional, BRLm 67.3 75.3 79.1 85.1Strike 4.068 4.310 4.597 4.886Cap 6.125 7.166 8.381
For H1 2018, the USD has been stronger vs. BRL and weaker vs. EUR as compared to H1 2017 rates
Euro appreciation is positive for our Adjusted EBITDA and BRL depreciation is negative
The net impact of these FX fluctuations was a positive contribution of ~$16m to H1 2018 Adjusted EBITDA
Impact of FX Fluctuations on Adjusted EBITDAOverall Positive Impact on H1 2018 Adjusted EBITDA of ~$16m Against H1 2017 Rates
Significant Cash Conversion Achieved in LTM H1 2018
34
LTM H1 2018 ADJUSTED EBITDA TO FFO (1)
49% cash conversion
(1) Funds From Operations is defined as Cash Flow from Operating Activities excluding changes in working capital, less interest paid, less maintenance capital expenditure, less distribution to minorities. Funds from Operations is a non-IFRS measure
(2) Cash conversion lower than in LTM H1 2018 due to lower EBITDA (caused by resource performance in Brazil wind), while interest payment has remained at similar levels.
H1 2018 ADJUSTED EBITDA TO FFO (1)
42% cash conversion(2)
Jun-18 LIQUIDITY – (US$m) Jun-18 NET DEBT – (US$m)
Strong Liquidity to Support Future Growth
35
$3.0bn Net Debt as of June 30, 2018 – includes full amount of debt for Spanish CSP ( ~ $940m), while the asset has contributed less than two months of EBITDA for H1 2018 after its acquisition in May
Committed to high value growth while maintaining strong BB credit ratings
$270m liquidity at parent level, including $220m of cash and $50m undrawn capacity under our corporate level revolver
Interim dividend of $26.6m, 4.0 USD cents per share, corresponding to 1/3rd of $80m (the high end of the previously announced range of $75-80m (11.2-11.9 USD cents per share)) to be paid on September 7, 2018
5.4x
4.6x4.2x
3.9x
2015 2016 2017 LTM H1 2018
36
4.6x Net Leverage Ratio Reflects Successful CSP FinancingYear End Net Leverage Ratio Expected to be Approximately 4.5x
Adj. IFRS Net Debt / Adj. EBITDA (1) (2) (3)
(1) Adjusted Net Debt and Adjusted EBITDA are non-IFRS measures(2) CG share of Net Debt at Termoemcali and Sochagota considered(3) Adjusted EBITDA excludes earnings from newly commissioned development projects and
acquisitions that have yet to contribute to a full year of earnings while Adjusted Net Debt excludes debt associated with these newly commissioned development projects and acquisitions
(4) Excludes Spanish CSP Debt and Adj. EBITDA figures(5) Proforma Net Leverage Ratio that includes Spanish CSP Net Debt and Spanish CSP FY 2017
Adj. EBITDA
(5)
Gross Debt Maturity as of Jun-18 – (US$m)(6)
Leverage target guidance at IPO: 4.0-4.5x
4.6x
(6) Corporate debt reflects adjustment for new bond issuance that closed on July 26, 2018. (New corporate is composed of two tranches: €450m notes due on 2023 and €300m notes due on 2025).
247 263 258 284 232
1,567
876
Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Due afterJun 2024
Project Debt Corporate Debt
(4)
37
Appendix
Sao Domingos II Hydro Power Plant (Brazil)
H1 2018 Key Financial Metrics
38
Six months ended June 30,Var Var %
In US$ millions 2017 2018
Revenue 462.4 535.4 73.0 15.8%
Gross profit 142.0 143.6 1.6 1.1%
SG&A (20.3) (21.9) (1.6) 7.9%
Adjusted EBITDA 234.4 261.8 27.4 11.7%
Net profit / (loss) after income tax (8.5) 2.7 11.2 NM
FFO 103.0 110.8 7.8 7.6%
237206 232
251
291
41 41 41 43 43
5.7x
5.1x5.6x
5.9x
6.8x
Jun-17 Sep-17 Dec-17 Mar-18 Jun-18
CFADS (LTM) Annualized Debt Service
DSCR Incurrence Level (2 x - Min.)
39
Leverage Ratio (1) DSCR (1)
(1) DSCR and Leverage Ratio (Non-guarantor combined leverage ratio) as defined in Bond Indenture. Please see slide 30 for calculation of Bond Indenture Leverage Ratio, including Proportionate Adjusted EBITDA and NGPTI (Non-Guarantor Proportionate Total Indebtedness) .
In US$m or multiple In US$m or multiple
Continued Strong Bond Credit Metrics6.8x DSCR & 3.9x Non-Guarantor Combined Leverage Ratio as of June 2018
1,1321,382
1,587 1,583
1,712
1,705
2,399
341 394 456 471 476 483 614
3.3x 3.5x 3.5x 3.4x3.6x 3.5x
3.9x
Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18
NGPTI Prop. Adj. EBITDA (LTM)
Leverage Ratio Incurrence Level (5x - Max.)
Reconciliation of Bond Metrics to IFRS Financials
Bond metrics definitions use Proportionate Adjusted EBITDA (“PAE”) and Non-Guarantor Proportionate Total Indebtedness (“NGPTI”) to calculate leverage ratios. These definitions exclude Corporate Level Financings and Project Finance Subsidiaries (“PFS”) (projects not yet reached, or recently passed, COD). As of June 30, 2018, no project is treated as a PFS.
PAE (Proportionate Adjusted EBITDA)
• Includes our share in JVs (Sochagota & Termoemcali)
• Pro forma for acquisitions mainly relates to our acquisition of the Spanish CSP portfolio
NGPTI (Non-Guarantor Proportionate Total Indebtedness)
• Excludes debt at parent company level (corporate bond)
• Increase in gross debt and NGPTI relating to our acquisition of the Spanish CSP portfolio
Calculation of NGPTI ($m) Dec-17 Jun-18
Non-Current Borrowings 2,673 3,342
Current Borrowings 218 263
Consolidated Gross Debt 2,890 3,605
Accrued Int. & IFRS Adj. 32 61
Share in JVs 14 11
Project Finance Subsidiaries (PFS) - -
DSRA (89) (192)
Corporate Bond (840) (818)
Pro Rata Calculation (294) (268)
NGPTI 1,712 2,399
Calculation of PAE ($m) Dec-17 Jun-18
Income From Operations 269 261
Depreciation & Amortisation 186 206
Share in JVs 22 22
Other 37 52
Adjusted EBITDA 513 541
Pro Forma Acquisitions 14 114
Project Finance Subsidiaries - -
Holdcos & Other 33 34
Pro Rata Adjustment (84) (75)
PAE 476 614
40
Top Contributors to Adj. EBITDA
41
Top Contributors to Adj. EBITDA (US$m) 2016 2017 LTM H1 2018
Main contributors from thermal fleet
Maritsa East III 117 125 127
Arrubal 62 61 63
CG Solutions 13 27 33
Cap Des Biches 12 26 28
KivuWatt 22 24 22
Togo 21 25 25
Main contributors from renewable fleet
Brazil Wind 79 82 73
Peru Wind 31 25 28
Austria Wind 23 25 23
Brazil Hydro 9 29 36
Vorotan 22 23 23
Solar Europe 31 31 36
Total 443 503 517
% Total Adj. EBITDA before Corp. Costs 93% 93% 90%
Top Contributors to CFADS
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(1) CFADS are calculated by asset, excluding corporate and other costs(2) Includes Solar Italy, Solar Slovakia and Solar Romania(3) Includes Solutions Europe and Africa and Solutions Brazil(4) Pro Forma run-rate of CFADS for Spanish CSP
Significant Contributors to CFADS (US$m)(1)
(Before Corporate and Other Costs)2017 LTM H1 2018
European PV Solar(2) 55 62
Maritsa 30 55
Brazil Hydro Portfolio II 51 51
CG Solutions(3) 41 39
Spanish CSP - 35(4)
Arrubal 29 17
Cap des Biches 7 13
Inka 5 13
Vorotan 13 12
Togo 6 6
Total CFADS of Significant Contributors(Before Corporate and Other Costs)
237 303
% of Total CFADS before Corp. Costs 88% 91%
Segment Facility / Project Name LocationGross Cap.
(MW)Number of
AssetsFuel Type (1) CG
OwnershipCOD Power Purchaser PPA Expiration
Maritsa Bulgaria 908 1 Coal 73% 1978 NEK 2024
Arrubal Spain 800 1 Natural Gas 100% 2005 Gas Natural Fenosa 2021
TermoemCali Colombia 240 1 Natural Gas / Diesel 37% 1999 Various N/A
Sochagota Colombia 165 1 Coal 49% 1999 Gensa 2019(2)
CG SolutionsEurope – Nigeria –Brazil
132 11 Natural Gas / Diesel / LFO100%;100%;
80%1995-2015
Investment grade global industrial companies
2018-2032
Togo Togo 100 1 Natural Gas / HFO / Diesel 80% 2010 CEET 2035
Cap des Biches Senegal 86 1 Oil /Natural Gas 100%Q2 2016 / Q4
2016Senelec 2036
Energies Antilles / Energies St Martin
French Caribbean 35 2 HFO / LFO 100% 2000; 2003 EDF 2020; 2023
Bonaire Dutch Antilles 28 1 HFO / Wind 100% 2010 WEB 2025
KivuWatt Rwanda 26 1 Natural Gas 100% Q4 2015 EWSA (ex-Electrogaz & REC) 2040 (expected)
Total Thermal 2,520 21
Chapada Complex Brazil 438 3 Wind51%, 51%,
100%2015; Q1 2016 CCEE; distribution companies 2035
Vorotan Armenia 404 1 Hydro 100% 1970 AEN 2040
CSP Portfolio(3) Spain 250 5 CSP 100% 2010 CNMC 2034-2037
Hydro Brazil Brazil 167 9 Hydro 79% (4) 1963; 1992; 2009-2012
Distribution companies 2027-2042
Asa Branca Brazil 160 1 Wind 100% 2013 Distribution companies 2033
Austria Wind Austria 150 10 Wind 94% 2003-2014 OeMAG 2016-2027
Inka Peru 114 2 Wind 100% 2014 Distribution companies 2034
Solar Italy Italy 65 10 Solar 100% 2007-2013 Gestore Servizi Energetici S.p.A 2027-2033
Solar Slovakia Slovakia 35 3 Solar 100% 2010-2011 Distribution companies 2025-2026
Solar Romania (5) Romania 7 1 Solar 100% 2013 Distribution companies 2028
Biogas Italy Italy 2 2 Biogas 100% 2013 Gestore Servizi Energetici S.p.A 2028
Total Renewable 1,792 80
Total portfolio 4,312 101
ContourGlobal Portfolio
43
Thermal Renewables
(1) HFO refers to heavy fuel oil, and LFO to light fuel oil. (2) CES has already signed 4 contracts to replace existing PPA, extending expiration to 2024, with and additional
5 year extension expected
(3) Closed in May 2018.(4) Capacity weighted. (5) Closed in June 2018.
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Transmission&
Distribution
Exclusive Focus on Wholesale Contracted PowerGeneration Producing Low-risk, Long-term Cash Flows
Clearly Defined, Simple and Committed Business Model
Transmission&
Distribution Upstream
Uncontracted / Merchant
Contracted Thermal
Contracted Renewables
Transmission & Distribution
Retail & Supply
Generation
Contracted Wholesale Power Generation
Excellent risk-adjusted return profile with the highest margin and the lowest risk
Company structure, employee base and organisation fit for purpose
Ability to maintain an efficient capital structure
Minimal commodities risk with pass-through fuel costs
Counterparties
Term
Commodity
Price
Key Revenue Components
Volume Risk
Long Term Contracts or Regulated Tariffs Delivering Stable Cash FlowsTypical ContourGlobal Contract / Regulated Tariffs structure
Thermal Assets Renewable Assets
Typical Framework
PPA Feed-in tariff, regulated tariff or PPA
PPAs are typically state-owned or supported utilities or large investment grade companies
FiTs or regulated tariffs normally have the grid / electricity system operator as the counterparty
Long-term contracts, with 20+ year duration from Commercial Operation Date (COD)
ContourGlobal’s portfolio has a 12-year weighted average remaining contract life(1)
Fixed payment provided minimum availability requirements are met
Reimbursement for fuel and operating costs
FiTs and PPAs – fixed price for any electricity produced
Regulated tariffs – regulated returns with minimal electricity price risk
No commodity risk given fuel pass-through mechanisms in PPAs
Not applicable
No volume risk, limited volatility
ContourGlobal normally assumes volume risk
Volume driven by operating KPIs (EAF and EFOR) as well as resource availability
45
(1) Weighted by Unaudited Pro Forma Condensed Combined Adjusted EBITDA for the year ended December 31, 2017.
46
PRI Overview
ContourGlobal History
Source: OPIC website.(1) Including interest.
What is PRI and why do investors buy it?
A highly specialised class of insurance which protects investors and traders
against economic losses arising from events affecting their international
market operations
Investors are protected against the loss of their equity and frequently are
able to protect an agreed return on their equity
Why is PRI offered?
Provides a more stable structure for investments into developing countries,
enabling better access to finance
Traditionally provided by development banks, but increasingly available in
private insurance market on attractive terms (especially for acquisitions)
Use of PRI accordingly enables investors to:
Expand their interests into new emerging markets whilst offsetting the
higher country/ economic risk
Optimise capital raising by accessing third party debt or equity
PRI Structure
ContourGlobal has not filed any PRI claims in 12 years
Since 1971, OPIC has made 300 insurance claim settlements totalling $977
million, with an average recovery rate of approximately 103%(1)
Operating Asset
ContourGlobal’s investment insured at HoldCo – claims
paid directly to HoldCo
CG HoldCoPRIPolicy
Non-recourse
Projectfinance
EquityInvested
What is Political Risk Insurance (PRI)?
IR InformationNext Event & Contact Point
47
Date Event Location
13 September 2018
Morgan Stanley Power & Utility Summit
London
Laurent HulloSVP, ControllingEmail: [email protected]
Gregory JohnsonVP, FinanceEmail: [email protected]
Corporate Websitewww.contourglobal.com
Investor Relations www.contourglobal.com/investors
IR Contact
Web Resources
Next IR Events
