Alerion Clean Power S p A : December 2023 - Investor Presentation

Investor presentation

31.12.2023

2

Disclaimer

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Alerion at a glance

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Background

• Alerion is an industry leader in wind and solar with a high quality asset base and an important pipeline in Italy, Romania and Spain
• Alerion is listed on the Milan Stock Exchange with a market cap of ~€1.4bn (as of December 31st 2023)
• Alerion's majority shareholder is Fri-ElGroup (owning 88% of Alerion's share capital and 94% of voting rights) which is one of the pioneers, a main developer and assetholder in the RES sector
• As of December 31th 2023, Alerion operates wind and photovoltaic plants for a total installed gross capacity of 876 MW: 739 MW in Italy (27 plants), 36 MW in Spain (1 plant), 12 MW in Bulgaria (4 plants) and 89 MW in Romania (12 plants)
• The company is currently expanding its business activity into the United Kingdom

Alerion at a glance

Leading Italian IPP and development renewable platform…

Trophy

RES IPP

and

growth platform

High quality

and

strategically located asset portfolio

Clear

commitment to deliver growth beyond current targets

Unique integrated business model

Stable and

highly

predictable cash

generation

Experienced management

team

4

Leading Italian RES platform and		Listed in the Milan stock
one of the largest in Europe	876 MW gross installed capacity	exchange with a market
Strong in-housedevelopment and	1.6 TWh annual production	cap of ~€1.4bn (as of
asset management capabilities		31.12.23)
44 operating state-of-the-art	Recent EU geographic expansion:	Superior quality equipment
• 739 MW in Italy	sourced from leading
plants located in strategic	• 36 MW in Spain	international suppliers (e.g.
regions with favorable
• 12 MW in Bulgaria	Vestas, Siemens Gamesa, Nordex)
conditions
• 89 MW in Romania
Repowering opportunities already		Further geographical
Diversification into solar PV	diversification in selected
identified, to further	technology, mainly located in Italy,	attractive market such us
accelerate growth	Romania and Spain	Spain and Romania amid new
		projects roll-out
Strong track record and experience in	Solid know-how along the entire	Strong in-house O&M
RES asset development, being true	RES energy value chain	capabilities with avg. O&M costs
precursor and innovator in the	Scalable and centralised asset
lower than national benchmarks
Italian RES space
management system
	Leveraging on ~6 years avg.	€459m net debt as of 31 Dec. 2023,
€152m EBITDA in 2023	with room for fire-power to grow
remaining incentives life on
Strong deleverage potential due to
	~57% of the gross capacity
	high cash conversion profile
	Growing organic
Management team with	development team and	169 employees
proven track record in	internalization of key
delivering growth	technical and operating
	activities

Notes

Unless specifically stated all data refer to December 31th 2023

Alerion at a glance

…benefitting from a highly resilient yield portfolio with strong fundamentals and attractive geographical presence…

Operating plant by region

5

Italy

1

20

Bulgaria

4

12

Spain

1

36

Plant Location	Number of	Gross capacity	Prod FY 2023
SPVs	(MW)	(GWh)
Apulia	5	140	242
Basilicata	3	70	135
Campania	5	131	266

Romania

1

58

12

89

Emilia Romagna	1	20	52
Molise	1	58	109

6

156

Legend

1. Number of SPVs

[X] MW Gross of installed capacity

5

3 140

5 70

131

6

164

Sardinia	6	156	265
Sicily	6	164	225
Italy	27	739	1,294
Spain	1	36	94
Bulgaria	4	12	30
Romania	12	89	62
Total	44	876	1,480

Notes

Data refer to 31/12/2023

Highly attractive and supportive italian market environment underpinned by clear renewables targets

Room for consolidation as well as constructive and forward-looking regulation providing stability	6
1 Fragmented wind onshore market with room for consolidation..	2 ..fueled by a significant growth expected in the coming years..

Italian onshore wind installed capacity by operator (stake MW)

2022 public data

• ~11 GW market leveraging strong fragmentation with ~3.0 GW on the market represented by portfolios with installed capacity below 100 MW
• Still significant presence of regional and local developers providing opportunities for consolidation, boosting returns for main platforms

3 ..with recent auctions dominated by wind plants..

Italian onshore wind and solar PV installed capacity evolution (GW)

3.6x installed capacity

			101	126
	48	70	75	94
35	50
32
23		26	32
15	20
12
2022	2025	2030	2035	2040
		Wind onshore	Solar

• Onshore wind and solar PV installed capacity expected to grow by c.2.6x and c.4.1x, respectively, between 2022-2040in Italy
• Italian government targets 30% share of renewables of electricity production by 2030, in line with EU targets, with both onshore wind and solar PV well- placed to benefit from competitive LCOE¹

4 ..backed by a positive sentiment / "green" environment

Market zone

MW Awarded by technology (last 10 auctions held in 2020-2022)

Renewables are increasingly relevant in the energy agenda of the

North

Center - North

Center - South

South

Calabria

Sicily

Sardinia

Total

Onshore Wind

88.5

3.1

606

936

53.2

747

150.8

2,584.8

Solar PV

1,029.3

105.9

376.3

217

71.3

287.6

675.8

2,763.3

Hydro

242.1

40.1

44.2

21.9

5.9

1.2

0

355.3

Italian Government

Renewables are increasingly cost-competitivevis-à-vis conventional

generation sources

Italian banks have significant balance sheet exposure to the

renewables sector

Large European utilities / Oil & Gas operators have started focusing

strategy on renewables

Notes
1 Levelized Cost of Energy	Sources Market researches, publicly available information

High quality portfolio ensuring industry- leading operational performance

A leading Italian IPP RES platform leveraging highly attractive operating performance

7

1 Strategically positioned with leading market position in the wind sector…

…with WTGs strategically located across several windy regions

Young asset base with >50% of the installed capacity entered in COD after 2010…

2 …and superior quality equipment sourced from leading suppliers…

WTG providers (% of capacity)

6% 5%

14%

10%

65%

Diversified manufacturers base, whereas 5 different international leading players supplied the Group…

…backed by strong in-house O&M capabilities across the main

components and control over all maintenance activities

…and complemented by cutting edge technologies used to

constantly monitor performance in order to minimise power losses

Scalable and centralized industry-leading business model

Successful balancing of cost optimisation with the insourcing of high value-added activities

8

1

O&M and

supervision

activities

2

Performance monitoring

3

Operational excellence

4

Energy management

5

HSE / ESG

• Highly effective internal O&M team overseeing the whole maintenance process to ensure optimisation of plant performance, minimisation of downtime and spending rationalisation
• Clearly defined planning of supervision activities coupled with tailored interven- tions upon necessity
• State-of-theart monitoring systems boasting SCADA platform allowing for a uni- fied and customised reporting of plant performance across the assets
• Data analysis as a means to redefine supervision strategy and evaluate the imple- mentation of potential performance improvements
• Implementation of a comprehensive performance improvement strategy over the years to maximise wind farms production and efficiency
• Continuous innovation in areas such as performance analysis and reporting, as well as continuous screening of new technologies aimed at enhancing asset operational performance
• Production forecasting and price monitoring to optimise the merchant revenue streams and fully exploit incentives
• Continuous active management of price risk through hedging contracts / offtake agreements
• Capillary system based on structures, procedures and resources tailored for the RES business resulting in an outstanding workplace safety track record
• Strong commitment on social and governance, supporting local communities, diversity and work-lifebalance initiatives among employees and promoting gender equality as essential component of corporate identity and key drivers to improve performance

Well established supervision practices

Customized monitoring activities for informed decision making

Strong track record

in performance

improvement

Continuous market monitoring for value accretive energy management

Integrated HSE/ ESG management system

Experienced and long-standing Management team

Highly esteemed management team in the renewables space with proven track record in delivering long-term and sustainable growth to shareholders

1 Key management team	2	Key achievements since Fri-El acquisition in 2017	9

JOSEF GOSTNER	STEFANO FRANCAVILLA
CHAIRMAN	DEPUTY CHAIRMAN AND
& CEO	CHIEF FINANCIAL OFFICER

PIETRO MAURIELLO	PATRICK PIRCHER
COO	MANAGING DIRECTOR

							893	876
Gross Installed	capacity (MW)				751	751
		564
306	337
		2017	2018	2019	2020	2021	2022	2023
(€/m)						233
				132		152
			81
EBITDA		45	54
42
		2017	2018	2019	2020	2021	2022	2023

• Highly reputed Management team with proven capabilities in leading energy organizations and exploiting economies of scale
• Close-knit team leveraging an aggregated experience of almost 100 years in clean energy asset management activities
• Full range of asset management services, leveraging strong development capabilities (over 3x in installed capacity since Fri-Elacquisition in 2017)
• Efficient and focused platform with process ownership and oversight of key O&M as well as monitoring functions
• Establishment of strong relationship with the Energy Regulator and regional authorities / municipalities, representing one of the most important renewable interlocutors in Italy
• Clear and visible growth strategy to pave the way for future growth, either through devel- opment or as consolidator of the RES fragmented market
• Outstanding execution track record in M&A (acquisitions, JVs and partnerships) and in securing financing agreements

Highly attractive and supportive market environment underpinned by clear renewables targets

	Clean energy targets and continued technological improvement paving the way for growth	10
1 Clearly defined and ambitious EU targets…	3 …coupled with increasing technological competitiveness
	2020 targets				Levelized Cost of Energy ($/MWh)
		2030 targets
GHG
emissions
	Targeted reductions in greenhouse gas emissions vis-à-vis 1990 levels
Renewable
energy
	Targeted percentage of energy from renewable sources in gross
		final energy consumptions

2 …underpinning renewables growth…

	2022	Wind onshore 2040	2022	Solar	2040
Installed			c.2.6x				c.4.1x
12	32		23		94
capacity (GW)
Installed			c.3.9x			c.7.4x
3	12		1		11
capacity (GW)
Installed			c.2.0x			c.4.1x
28	55		19		76
capacity (GW)			Renewable generation costs have consistently dropped in the last 5 years and still have

additional decrease potentials in the medium term

Sources Market researches, publicly available information