Investor presentation February 2021 Disclaimer
The following presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (’relevant persons’). Any person who is not a relevant person should not rely, act or make assessment on the basis of this presentation or anything included therein. The following presentation may include information related to investments made and key commercial terms thereof, including future returns. Such information cannot be relied upon as a guide to the future performance of such investments. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Scatec ASA or any company within the Scatec Group. This presentation contains statements regarding the future in connection with the Scatec Group’s growth initiatives, profit figures, outlook, strategies and objectives as well as forward looking statements and any such information or forward-looking statements regarding the future and/or the Scatec Group’s expectations are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements. Contents 1. Introduction 2. The market and our pipeline 3. Our business model 4. Financials 5. Outlook and guidance A frontrunner in renewable energy
3.4 GW 494 10.5 GW in operation & employees backlog & pipeline under construction
Develop, build and own & operate renewable energy
Founded in 2007, headquartered in Oslo
Present in 21 countries globally Offices and plants in operation and under construction Q4’20 Building a global renewable company Power production (GWh) • Acquired SN Power, adding solid hydropower assets +37% and an attractive project pipeline 407 Rwanda • EBITDA* of NOK 223 million in the quarter and Czech NOK 1,306 million for FY 2020 Mozambique 298 • Started commercial operation of 79 MW Jordan Honduras • Added 150 MW to project backlog, project pipeline Ukraine increased to 10 GW Brazil Malaysia • Raised equity of NOK 4,750 million to fund the SN Egypt Power acquisition and further growth South Africa • The Board proposes dividends of NOK 1.09 per share
Q4 2019 Q4 2020 (*) EBITDA and other alternative performance measures (APMs) are defined and reconciled as a part of the APM section of the fourth quarter report on pages 35-38. 5 The energy transition is accelerating, we are broadening our growth strategy
Massive demand growth in renewables Scatec’s broadened growth strategy:
• Build an IPP across solar, hydro, wind and storage • New, high growth markets and broader offering More complex power markets • Maintain the integrated business model • Increase focus on early phase project development
The SN Power acquisition is an important step in this direction Further technology integration Building a global leader in renewable energy
Where we come from Where we are now Where we are going Regional solar developer/IPP Global top-tier A global multi-technology developer/IPP renewables developer/IPP
Solar Solar Solar
Hydro Hydro
Wind Wind
Storage Storage Our success is based on our business model & strong entrepreneurial culture
Business model People
Integrated – capturing full project Predictable Agile & lean value Working together Entrepreneurial culture Structuring & financing Passionate & empowered people Driving results Financial discipline Strong and diversified talent pool Partnerships Changemakers A frontrunner in renewable energy Key figures
4.1 Power production TWh2 1.9 GW 1.4 GW Solar¹ Hydro 4,406 2020 revenues3 MNOK
2,398 2020 EBITDA3 MNOK 39 MW Wind 1,034 2020 Cash flow to Equity MNOK from power plants3
(1) In operation or under construction. Gross capacity (2) Median production when all plants are in full operation from first half of 2021. (3) Proportonate Scatec and SN Power combined. 02 The market and our project pipeline The world can be powered by renewables in 2050
Solar, wind hydro 60% 75% Fossil from 64% & storage share of 91% increase in global demand covered by to 20% market energy mix from Consumption growth electricity demand renewables share 36% to 73% non- OECD-countries
Source: Bloomberg New Energy Outlook 2020 Solar, hydro, wind & storage covering 73% of installed capacity in 2050
+447% Storage 14,885 GW Global installed capacity mix, 2019 and 2050 Wind Hydro 4 % 2% 7% 2 % 8% Solar 11 % 28 % 15%
8 % 1% 7,566 GW 20,391 GW 2% 2019 2050 38% 7% 15 %
23 % 2,723 GW 5 % 20% 4 %
Coal Gas Oil Nuclear Hydro Wind Solar Storage Other 2019 2050 Source: Bloomberg NEF 12 Solar and wind is the world’s most competitive • Solar and wind is now the lowest cost source of energy sources of energy across key regions globally
Cost of alternative energy sources (LCOE, USD/MWh) • Storage and hybrid solutions are expected to become increasingly important for 250 demand
200 • New business propositions 150 are emerging when renewables are cost 100 competitive with base load
50
0 Solar PV Wind Gas base Coal Nuclear Gas peak Diesel load load
Source: Lazard Capital, LCOE v13, Scatec. LCOE: Levelised cost of energy Scatec holds a project pipeline to 10 GW in solar, wind and hydropower
Europe & Central Asia 1,280 MW
Backlog & Africa & Rest of Asia pipeline Middle East
10,460 MW 3,548 MW 3,862 Latin America MW 1,100 MW
All figures are as of Q4 2020 reporting date 14 We are expanding our offering through technology integration
PV + battery storage Wind + solar Floating PV+ Hydro PV + wind + pumped storage
PV with battery storage PV plant connected with PV installations mounted PV plant connected with onshore wind farm on floating supports on the onshore wind farm and artificial basin of a hydro pumped storage dam Significant project pipeline in key high growth markets
Brazil India South Africa Vietnam
Development status Development status Development status Development status • Large PV project in mature stage • Negotiating participation in • Large ready to bid portfolio • Broad set of projects pursued • Partnerships with large energy large projects • Permits to also include batteries across solar, floating solar, wind companies • Preparing for future tenders • Wind portfolios under and near-shore wind • MoU with Hydro and Equinor negotiation • Dam Nai wind farm acquired Market opportunities Market opportunities • A large growth market Market opportunities Market opportunities • Auctions • Acquisition of ‘Ready To Build’ • RMIPPP* - bid submitted • Targets 20+ GW by 2025 • Corporate PPAs projects • REIPPP* Round 5 and following • FiT for wind beyond 2021 • Merchant market • State and regional tenders • Coporate PPAs • +5 GW solar tender expected
(*) RMIPP: Risk Mitigation IPP Procurement Program. REIPPP: Renewables IPP Procurement Program 16 Release - offering reliable, flexible and low-cost solar power
Pre-assembled and containerised Quickly installed – Limited upfront investment solar and battery equipment modular, scalable and redeployable flexible contract duration
Photo: Cambridge Energy Partners 04 Our business model Our value chain
Project development Financing Construction Operations Ownership (IPP) Site development & Debt/Equity Engineering and Maximise performance Asset management permitting structuring procurement and availability Financial optimisation System design Due diligence Construction Maintenance and management repair Business case development PPA negotiation Partnering with Development Banks for project finance and risk mitigation
Multilateral development banks (DFIs) are providing project debt to infrastructure in emerging markets
DFIs are often advising governments on design of renewable programmes to promote private/public partnerships
Project structures and contracts are set up to mitigate risk and facilitate non-recourse project level debt Our business model and typical project structure Illustration of company structure and main contracts
Equity co- Scatec investors
100% 39%-100% Shareholders’ agreement Land owners Land lease agreements Component Suppliers Scatec EPC contract Single Purpose Loan Project O&M / EPC O&M contract Vehicle agreements financing Asset Management contract Sub-Contractors Sovereign PPA guarantee agreement Concession State agreement government Political risk insurance (when relevant) World State owned Bank/others utility Utilising new technology to reduce costs and improve performance
Operation & Global control & Maintenance monitoring centre, (O&M) Cape Town
• Improved workflows • Leveraging economies of through automation of scale - MW/FTE doubled processes from 2018 • Actionable analysis sent • Real-time data from all directly to decision plants globally 24/7 - makers remote monitoring and support • Examples: • Using drones to detect • Using state-of-the-art module level issues analytics to detect and mitigate under- • Cleaning robots performance of our PV • Digital field workers plants Sustainability is integrated in Scatec’s operating model
A competitive advantage Critical success factors
• Attracts projects and Solid E&S Mgt System business partners covering all projects
• Reduces risks and • Early involvement in strengthens probability of projects to identify risk successful completion of and impacts projects • Regular review of ESG regulations and impact • Becoming imperative to on our company and qualify for and win new industry projects • Top-rated ESG reporting Environmental, Social & Governance aspects are integrated in our operating model
Project Power Opportunity Financing Delivery Development Production
Risk assessment & monitoring Environmental & social impacts
Stakeholder engagement, grievance mechanism & local development Health & Safety
Responsible procurement
Calculate emissions
Investment decision End of life management Strong ESG performance and ratings
Rating summary: Low risk Rating: A- (excellent) Rating: AAA (top rating) Rating: A #1 of 450 – Utilities Status: Prime Highest scoring range Carbon Disclosure Project #1 of 48 – Renewable power Prime threshold: C+ relative to global peers Top score producers 05 Financials Scatec Q4 2020 results Increased power production Fourth quarter 2020
Proportionate financials • Year on year increase in Power Quarterly (NOK million) Last 12 months (NOK million) Production revenues and EBITDA • Continued strong focus on project EBITDA Revenues 6,341 development - total capex and opex spend of NOK 67 million • Limited revenues and gross margin in the D&C segment • SN Power transaction cost of 2,844 NOK 47 million
1,643 • Revaluation of the Group’s 1,571 1,306 significant USD cash position to NOK at year-end, lead to a 434 497 223 currency loss of NOK 480 million
Q4 19 Q4 20 2019 2020
EBITDA margin 26% 45% 25% 46%
27 SN Power 2020 results: Financial performance impacted by hydrology and COVID
SN Power proportionate financials – NOK million* Comments • Low operational gearing and high cash conversion Revenues EBITDA Cash flow to equity • A mix of contract types are stabilising cash generation 1,766 • Well maintained assets with limited capex expected in the medium term 1,562 2020 performance
1,149 • 2020 production of 4,888 GWh (100%) and 1,443 GWh (net) 1,092 • Reduced water in-flow in first 9 months, improved at year end • Covid-19 impacting power demand and prices in the Philippines
541 477 Hydropower guidance • Median annual production of 6,100 GWh (100%) and 1,800 GWh (net) • Further details and guidance on SN Power financials and pipeline to be 2019 2020 shared later this year (*) Unaudited financial results for SN Power and the assets acquired by Scatec 28 A solid financial position
Consolidated financial position (NOK million) • Group free cash of NOK 5,949 million As of 31.12.2019 As of 31.12.2020
• Raised equity of gross NOK 4,750 million to fund the SN 26,663 26,663 Power acquisition and further growth 21,578 21,578 • Group* book equity of NOK 11,196 million – 9,074 equity ratio of 94% 4,495 3,640 9,467 2,750 Scatec Group 3,495 NOK million Consolidated prop. share level*
Cash 7,788 1,805 5,949 17,083 15,190 17,590 Interest bearing 13,701 liabilities* -12,860 -7,455 -748 Net debt -5,223 -5,650 5,201 Assets Equity & Assets Equity & Liabilities Liabilities
*Defined as ‘recourse group’ in the corporate bond and loan agreements. Current assets Equity Non-current liabilities 29 Non-current assets Current liabilities 29 2020 movement of the Group’s free cash
NOK million -131
-613
65 -153 -15 6,575 346
-756 5,920
758 -156
End 2019 Distributions Cash flow to Cash flow to Cash flow Project equity Project Share capital ASA Dividend Working End 2020 from operating equity D&C equity Services to equity Development increase payment Capital/other power plants Corporate capex
Movement of cash in ‘recourse group’ as defined in the corporate bond and loan agreements. 30 2020 Dividend proposal
Dividend Policy • The Group’s objective is to pay shareholders consistent and growing cash dividends
Proposed dividend for 2020 • Scatec received distributions from operating power plant companies of NOK 346 million in 2020 • The Board of Directors propose a dividend of NOK 1.09 per share, totalling NOK 173 million for 2020
31 SN Power Acquisition closing & financing
SN Power financing – USD million: • Scatec closed the USD 1,166 million acquisition of SN Power from Norfund on 29 January 2021 1,166 • The transaction is financed cash and debt facilities: 200
• USD 200 million vendor note: Interest step up after 7 years, 150 flexible interest payment, unsecured and subordinated • USD 150 million 4-year senior secured Green Term Loan 400 • USD 400 million 18-months Acquisition Finance 416 • Customary purchase price adjustments to be settled in 2021 • Scatec liquidity post transaction of approx. NOK 3.9 billion • Including USD 180 million Green Revolving Credit Facility
Purchcase Vendor Term loan Acuistion Cash price note finance
32 06 Summary Building a global leader in renewable energy
Where we come from Where we are now Where we are going Regional solar developer/IPP Global top-tier A global multi-technology developer/IPP renewables developer/IPP
Solar Solar Solar
Hydro Hydro
Wind Wind
Storage Storage Short term guidance
• No material D&C revenues expected until projects currently in backlog move into construction • Power production from plants in operation end of Q4 2020 (excluding SN Power):
GWh Q4’20 Q1’21e 2021e Proportionate 407 425-445 1,750-1,790 100% basis 756 770-800 3,120-3,220
• Services revenues is expected to reach NOK 270 million in 2021 with an EBITDA margin of around 30%
The guidance above is for Scatec’s operations before closing of the SN Power transaction. 35 Kine: Oppdatere bilde, gjerne people
Building a global renewable company
• SN Power transaction closed – adding solid hydropower assets and attractive project pipeline • Solid financial position - available liquidity of NOK 3.9 billion post transaction • Project backlog & pipeline increased to 10.5 GW • Targeting installed capacity* of 4.5 GW by end 2021 • Capital Markets Update 23 March 2021
(*) In operation or under construction. 36
Our asset portfolio – February 2021
CAPACITY ECONOMIC operation CAPACITY ECONOMIC CAPACITY ECONOMIC In operation MW INTEREST In MW INTEREST In operation MW INTEREST
South Africa 448 46% Philippines 642 50% Vietnam 39 100% Egypt 380 51% Laos 525 20% Total 39 100% Malaysia 244 100% Uganda 255 28.3% Brazil 162 44% Total 1,422 35% Ukraine 133 73% Honduras 95 51% Jordan 43 62% Mozambique 40 53% Czech Republic 20 100% Rwanda 9 54% Total 1,574 59%
Under construction CAPACITY ECONOMIC MW INTEREST
Ukraine 203 100% Argentina 117 50% Total 320 82%
Project backlog CAPACITY ECONOMIC MW INTEREST
Tunisia 360 100% Pakistan 150 75% Ukraine 65 65% Bangladesh 62 65% Mali 33 64% Total 670 86%