Neoen : Webcast presentation 2019 full-year results

FY 2019 consolidated results

March 25, 2020

Disclaimer

This presentation contains forward-looking statements regarding the prospects and growth strategies of Neoen and its subsidiaries (the "Group"). These statements include statements relating to the Group's intentions, strategies, growth prospects, and trends in its results of operations, financial situation and liquidity. Although such statements are based on data, assumptions and estimates that the Company considers reasonable, they are subject to numerous risks and uncertainties and actual results could differ from those anticipated in such statements due to a variety of factors, including those discussed in the Group's filings with the French Autorité des Marchés Financiers (AMF) which are available on the website of Neoen (www.neoen.com). Prospective information contained in this presentation is given only as of the date hereof. Other than as required by law, the Group expressly disclaims any obligation to update its forward-looking statements in light of new information or future developments.

2

1. FY 2019 highlights
2. FY 2019 results
3. Outlook
4. Appendices

Neoen at a glance

Founded in 2008

A 100% green IPP (PV, onshore wind and storage)

An impressive track record of landmark large-scale projects A clear positioning

• We design and implement facilities generating the most cost-competitive renewable electricity, sustainably and on a large scale everywhere we operate
• > 80% in OECD countries

A unique business model

• Develop-to-own
• Multi-localleadership approach

Profitable since 2011

4

Neoen's expertise covers the entire project life cycle

Development	Procurement	Construction	Operations
	& financing	supervision	& optimization

1	2	3	4
Strong project sourcing	Procurement,	Monitoring of operations,	Operational management
and established development	optimized stucturing, financing	high-quality EPCs(1),	and cost control, optimization
know-how	and de-risking	bankable technology	throughout asset life

Neoen controls the entire process and pursues a long-term « develop to own » strategy

Neoen's average asset ownership rate stands at 89%(2)

(1)	Engineering Procurement and Construction
(2)	Assets in operation and under construction (including co-investments) by MW, as of December 31, 2019	5

Long-term, predictable and de-risked cash flows

Long-term visibility

>14 years

average remaining term of PPAs(1)

2.9 years

average asset age(2)

ca. 50 years		23%
land control(3)		land owned(4)

Strong currencies			Contracted revenues
USD
10%			c.6.0 B€		1.8 B€
			vs
			Contracted revenues(5)		Net debt(5)
AUD	EUR
51%	39%
			• Strength and creditworthiness of counterparties
			in OECD countries
			• Over 80% of 2019 revenues generated in
			OECD countries
FY 2019 revenues			• >80% of Neoen's clients have investment grade
			ratings(6)

1. Weighted average residual PPA duration by MW in operation as of December 31, 2019 | (2) Weighted average age of assets in operation as of December 31, 2019 | (3) Weighted average lease duration (by MW) for assets in operation and projects under construction | (4) Capacity installed on owned land (for projects in operation and under construction as a % of total MW) | (5) As of December 31, 2019 | (6) Weighted average investment grade off-takers for projects in operation,

under construction and awarded

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1. Neoen at a glance

1. FY 2019 results
2. Outlook
3. Appendices

2019 EBITDA target achieved

Revenue(1) (M€)		EBITDA(1) (M€)

+22%	253,2	+30%	216,1(2)
207,0
		166,5
				85%
				EBITDA margin
		80%
		EBITDA margin

Net income Group share (M€)

x2,9

36,0

Biomass

16,7 contribution

12,4

2018 restated

2019

• Growth driven by all Neoen's business segments and regions

2018 restated

2019

• EBITDA target of between 212 M€ and 219 M€(3) in 2019 with an EBITDA margin of around 85% achieved

2018

2019

• Net income from continued operations up 48% year-on-year

1. Excluding the biomass business sold in September 2019
2. 217,2 M€ at constant exchange rates
3. At constant exchange rates compared to 2018

8

Strong operating momentum in 2019

• Capacity in operation: 369 MW added across our three regions
• • 316 MW commissioned in Australia, France, Zambia and Jamaica
  • Acquisition of 8 wind farms in Ireland (53 MWp)
• Launch of construction of 745 MW during the year
• • In Americas: Mexico and Argentina
  • In Europe-Africa: France and Mozambique
  • In Australia
• Contracts awarded for close to 1 GW in new projects in 2019

Breakdown of assets in operation or under construction

6%	29%

38%

29%

3.0 GW(1)

3.0 GW(1)

65%

33%

Solar Wind Storage

Australia

Europe-Africa

Americas

14%

3.0 GW(1)

86%

Under PPA		Merchant(2)

1. Capacity in operation or under construction as of December 31, 2019, restated for the biomass business sold in September 2019

(2) Weighted average by MW for assets in operation or projects under construction as of December 31, 2019

9

Major projects awarded in 2019

Government tenders		Mutkalampi				HPRX
Awarded 10 ground-mounted PV projects		PPA with Google		Expansion of the HPR battery

45 MWp	43 MWp
Awarded capacity at the	Awarded capacity at the
CRE 4.5 (March 2019)	CRE 4.6 (August 2019)

Tore Bella		Metoro
Government tender		PPA with EDM(1)

130 MW

PPA capacity (September 2019)

PPA with a utility(2)

50 MW

64,5 MWh

Rio Maior

Acquisition of 49% of a solar project with a government PPA

~ 65 MWp		41 MWp
Awarded capacity		PPA capacity
(August 2019)		(December 2019)

352 MWp		180 MWp
PPA capacity		Total capacity

MW awarded in Q4 2019 and announced on February 18

HPR - Australia

Notes: non-exhaustive list
(1)	Electricidade de Moçambique (EDM), the state electricity generation and distribution company of Mozambique	10
(2)	Further communication to follow in April

1. Neoen at a glance
2. FY 2019 highlights

1. Outlook
2. Appendices

Strong increase in revenue

			Revenue(1) (M€)
		+29,4	+2,0	-9,6	+3,6
				-1,2	253,2
	+21,8
207,0
2018 restated	Full-year	New capacity	Volume	Tariff	Others	FX	2019
	impact 2018	in 2019
	commissioning

• Significant contribution of new assets commissioned in 2018 and in 2019
• Favorable weather conditions in Europe offsetting unfavorable wind levels in Australia particularly in Q3
• Lower average price on certain assets in Australia with the transition from early generation revenues(2) to PPA
• Higher revenue from storage and services to third parties
• Limited FX impact

2019 revenue up 22% year-on-year

(1)	Revenue excluding the biomass business sold in September 2019	12
(2)	Short-term energy revenues prior to the implementation of a long-term contract

2019 EBITDA target achieved

				EBITDA(1) (M€)
				+14,9	-4,5	+0,3	+2,9	+1,7(2)	216,1
			+8,4
		+12,1
	+13,8
166,5									85%
							EBITDA margin
80%
EBITDA margin
2018	Europe-Africa	Australia	Americas	Europe-Africa	Australia	Europe-Africa	Australia	Other	2019
restated

• EBITDA up 30% year-on-year driven by the growth in Solar in our three regions and in Wind in Europe-Africa
• EBITDA margin of 85%, up 5 bp year-on-year due to liquidated damages(3) covering revenue shortfalls related to the delayed commissioning of certain wind and solar projects

(1)	EBITDA excluding the biomass business sold in September 2019
(2)	Services to third parties
(3)	Indemnities recognized in other current operating income, partly offsetting the revenue shortfall, thereby	13
	automatically improving the EBITDA margin

EBITDA by segment

Solar EBITDA(1) (M€)

+44%111,8

77,4

96%		94%
EBITDA margin		EBITDA margin

2018

2019

• Strong growth in EBITDA across our three regions reflecting significant capacity commissioned in 2018 and 2019
• Slight decrease in EBITDA margin due to lower relative contribution from liquidated damages in 2019 versus 2018

Wind EBITDA(1) (M€)

+11% 102,2

91,8

92%

85%EBITDA margin EBITDA margin

2018

2019

• Growth in Europe-Africaoffsetting lower EBITDA in Australia due to unfavorable wind conditions in Q3 2019 and the transition from early generation revenues to PPAs for certain wind assets
• EBITDA margin positively impacted by liquidated damages recognized in 2019

(1) Excluding eliminations

14

Profit & Loss - strong increase in net income

		2019	2018	Change
		restated
EBITDA	216,1	166,5	+30%
Current operating income	135,9	106,0	+28%
Operating income	131,9	99,9	+32%
Cost of financial debt	(79,0)	(62,4)	-26%
Other financial income and expenses	(8,0)	(7,4)	-9%
Net financial expense	(87,0)	(69,8)	-25%
Income tax	(23,7)	(15,8)	-50%
Net income from continuing operations	21,2	14,3	+48%
Net income from discontinued operations	15,8	(0,8)	n/a
Net income of the consolidated group	37,0	13,5	x2,7
Net income Group share		36,0	12,4	x2,9

Cost of financial debt increased as a result of the commissioning of additional wind and solar assets (+369 MW in operation)

Other financial income and expenses largely reflected discounting

effects (acceleration of the contractual repayment schedule of some differed capex as a consequence of strong operational performance)

Positive impact of the refinancing of a portfolio of Australian projects in H1 2019 offset the early redemptions costs and penalties related to the refinancing of French assets in H2 2019

Effective tax rate of 53% vs 52% in 2018

Positive impact from the capital gain on the disposal of the biomass business

Net income Group share almost tripled thanks to the improvement in current operating income and to the capital gain on the sale of the biomass business

15

From theoretical tax rate to effective tax rate in 2019

+5,3% (1)52,8%

+7,2%

+4,7%

+2,6%35,6%

+2,0%

31,0%

	Permanent differences
Theoretical tax rate	CVAE tax	IFRS 2	Normalized tax	Witholding tax	Non-deductibility of	Other	Effective tax rate
in 2019			rate Neoen		financial interests		2019
			in 2019

(1) The other items mainly include 1.8% for tax losses not giving rise to the recognition of deferred tax assets,
1.2% of intragroup dividend and disposal adjustments, 1.2% of other permanent differences and 1.0% for	16
differences in tax rates and changes in rates

Cash flow reflecting delivery of Neoen's investment plan

	Change in total cash balance (M€)
		• Net cash flows from operating activities amounted to 184 M€ up
+184	-812	28 M€ y-o-y
		- Increase in EBITDA (+50 M€ y-o-y)
		- Negative change in WC (-38 M€ y-o-y) mainly reflecting the increase in

504	+639	-72	VAT credits on assets under constructions (Argentina and Mexico)
		+17	460

• Net cash flows from investing activities reached -812 M€, up -280 M€ largely driven by investments in new projects

- In Australia: Bulgana and Numurkah

- In Americas: El Llano, Altiplano, Paradise Park and Capella

- In Europe: Hedet, Mutkalampi, Les Hauts Chemins, Irish acquisition

• Net cash flows from financing activities reached 582 M€ reflecting

- Increase in borrowings

- Growth in net interest paid with the ramp up in net debt

- Net impact of the refinancing of a portfolio of French assets

Opening cash	Net cash from	Net cash used	Net increase	Interests	Other	Closing cash
balance	operating	in investing	in borrowings	paid		balance
01.01.2019	activites	activities				31.12.2019

17

Gross debt increasing with the construction of new assets

Change in gross debt (M€)

	+907	-268
			+65	+7	-33	+35	+12	2 415
		-145
		Impact of the refinancing
		of a portfolio of assets in
		France
1 691	+167
31.12.2018	New	Repayment	Change in fair	Accrued	Changes in	IFRS 16	FX	31.12.2019
	borrowings		value of	interest	scope
			derivatives

• Net Increase in borrowings of 639 M€
• • Additional project financing raised with the construction of new assets
  • Issuance of a 200 M€ convertible bond (180 M€ recognized as debt)
  • Net impact of the refinancing of a 104 MW portfolio of wind and solar assets in France
• Change in fair value of derivatives derived from decrease in market interest rates in 2019
• Changes in scope (33) M€: disposal of the biomass business more than offsetting the acquisition of Irish wind farms
• Average cost of project finance debt: 3,7% (vs 4,2% at end-2018) due to low interest rates environment and two refinancing operations
• Average Group cost of debt: 4,2% (vs 4,6% at-end 2018) due to lower cost of project finance debt and the issue of a convertible bond at a nominal rate of 1,875%(1)

(1) The effective interest rate of the debt component of this convertible bond stands at 4.27%

18

Net debt increasing in line with growth in new assets

Net debt (M€)

Average residual tenor of project finance debt(1)

			15,6	15,9	16,2
	+ 773	1 811
			EUR	AUD	USD
				15,8 years
1 038		2019 leverage: 8.4x	Weighted average residual tenor(2)(3)

Gross debt by currency(2)

Other

USD 1% 19%

31.12.2018	31.12.2019	EUR
		43%

>90% non-recourse debt, with long tenor

AUD 38%

(1)	Senior debt (excluding junior debt)
(2)	Excluding lease liabilities and minority interests. As of December 31, 2019	19
(3)	For all the Group's projects in operation as of December 31, 2019

1. Neoen at a glance
2. FY 2019 highlights
3. FY 2019 results

5. Appendices

A constantly expanding pipeline, in line with our 2021 target

A total portfolio capacity up 3 GW year-on-year

10,7 GW

7,7 GW

5,0 GW

Advanced

development

3,3 GW

Advanced

development

				1,6 GW
				Tender-ready
	1,2 GW			1,1 GW
	Tender-ready
			Awarded
	0,9 GW
			1,2 GW			>5,0 GW
	Awarded		4,1 GW	3,0 GW		In operation or under
3,1 GW	0,8 GW		Under construction
	Secured		(+800 MW y-o-y)		construction
Secured	Under construction				at end 2021
	2,2 GW	capacity	1,8 GW	In operation or under
capacity	1,5 GW
	In operation or		In operation	construction
	In operation
		under construction
	31.12.2018			31.12.2019		Target end-2021

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1,2 GW under construction across our three geographies

AMERICAS

726 MWp underconstruction

Mexico

El Llano - 375 MWp

COD expected in April 2020

Injection already started

El Salvador

Capella - 143 MWp

(incl. 3 MW / 2 MWh of storage)

COD expected end of March 2020

Argentina

Altiplano - 208 MWp

COD expected in H2 2020

Finland

Hedet - 81 MW

COD expected in April 2020

Injection already started

EUROPE - AFRICA

203 MW under construction

France

Solar(1) - 53 MWp

Wind(2) - 28 MW

Mozambique

Metoro - 41 MWp

COD expected in Q1 2021

AUSTRALIA

264 MW under construction

Australia

Bulgana - 214 MW

(incl. 20 MW / 34 MWh of storage)

COD expected in H2 2020

Australia

HPRX - 50 MW / 64.5 MWh

COD expected in Q2 2020

Notes: Capacity under construction at 31 December 2019. Current best estimate of the timetable for commissioning of assets under construction given the expansion of covid-19 outbreak

1. Mer (15 MWp), Vermenton (14 MWp), Azur Sud (5 MWp), Saint-Eloy (5 MWp), Fossat (5 MWp), Bregues d'Or (2 MWp), Antugnac (7 MWp)
2. Viersat (18 MW), La Garenne (10 MW)

22

Neoen expands storage integration capacity

DeGrussa 2015		Hornsdale Power Reserve 2017		Azur stockage 2018
Hybrid solar + storage power plant		Largest lithium-ion battery worldwide		Grid battery storage facility
6 MW / 1,4 MWh		100 MW / 129 MWh		6 MW / 6 MWh

Albireo Power Reserve 2020 - First	Hornsdale Expansion (HPRX)	Bulgana	2 projects won in Q1 2020
storage power plant in Central America	Should be commissioned in Q2 2020	Should be commissioned in H2 2020	as part of the RTE tender
3 MW / 2 MWh	50 MW / 64,5 MWh	20 MW / 34 MWh	13 MW (6 MW + 7 MW)

23

2020 guidance

2020

	Between 270 M€ and 300 M€
EBITDA	at constant exchange rates(1)

EBITDA margin of around 80%

• This forecast takes into account
• • Current best estimate of the timetable for commissioning of assets under construction given the expansion of covid-19 outbreak
  • The current level of market prices impacting early generation revenue anticipated and electricity sales not covered by long- term contracts (<14% of revenue in 2019)

(1) At constant exchange rates compared to 2019

24

Outlook for 2021 and 2022

2021 & 2022

		More than 5.0 GW of capacity under construction or in operation by the end of 2021,
Capacity		with a lower proportion of assets in operation than previously expected
		Fully operational by end of 2022

EBITDA		Above 400 M€ at constant exchange rates(1) in 2022
	vs close to 400 M€ in 2021 initially anticipated

(1) At constant exchange rates compared to 2019

25

A high growth company with a robust business model

Develop-to-own strategy

Organic growth fueled by a large pipeline

Expertise at each step of the project

Delivering long-term value

A strong track record	A selective footprint
Continuously profitable since 2011	>80% OECD countries, 100% hard currencies
On track to deliver 5GW(1) in 2021	14 countries
Best-in-class operating performance	Local leadership

Leadership in energy storage	High visibility of future cash flows
Extensive expertise since 2015	Long-term contracts
Ability to provide firm energy	High-qualityoff-takers
Stand-alone services adapted to network's needs	Take-or-pay agreements

(1) In operation or under construction

26

1. Neoen at a glance
2. FY 2019 highlights
3. FY 2019 results
4. Outlook

Revenue by technology and geography

Revenue by technology

2019(1)

8% 1%

47%

44%

2018(1)

9%

52%

1%

39%

Solar Wind Storage Development	Revenue by geography

Solar

Wind

Storage

Development

2019(1)	2018(1)
8%	8%

51%

41%	34%
58%

Australia	Europe-Africa	Americas	Australia	Europe-Africa	Americas

(1) Revenue excluding the biomass business sold in September 2019	28

Profit & loss - strong increase in revenue and EBITDA

		2019	2018
In millions of euros			restated
Contracted energy revenue	214,7	173,9
Uncontracted energy revenue	32,7	27,8
Other income	5,9	5,3
Revenue		253,2	207,0
Purchase of goods and change in inventories	(0,7)	(0,4)
External charges and payroll expenses	(59,1)	(46,2)
Duties. taxes and similar payments	(5,4)	(4,6)
Share of net income of associates	0,7	0,8
Other current operating income and expenses	27,6	10,0
EBITDA		216,1	166,5

29

Balance sheet

In millions of euros		31.12.2019	31.12.2018
Goodwill		0,7	-
Intangible assets	183,3	121,7
Tangible assets	2 387,3	1 702,7
Investments in associates and joint ventures	6,9	6,7
Non-current derivative financial instruments	2,0	5,8
Financial assets	125,2	106,0
Deferred tax assets	55,6	39,1
Total non-current assets	2 761,0	1 982,0
Inventories	0,7	0,3
Trade accounts receivable	52,2	33,8
Other current assets	111,2	48,9
Cash and cash equivalent	460,5	503,8
Total current assets	624,7	586,9
Total assets		3 385,7	2 568,9

In millions of euros	31.12.2019		31.12.2018
Equity attributable to owners of the Company	661,0	645,1
Non-controlling interests	19,5	10,1
Total equity		680,5	655,3
Non-current provisions	13,8	10,6
Project financing - non-current	1 979,8	1 511,8
Corporate financing - non-current	190,6	13,9
Derivative financial instruments - non-current	83,8	33,3
Other liabilities - non current	34,1	-
Deferred tax liabilities	49,6	37,8
Total non-current liabilities		2 351,7	1 607,3
Project financing - current	144,8	122,5
Corporate financing - current	4,0	2,2
Derivative financial instruments - current	11,6	7,1
Trade accounts payable	126,3	136,5
Other current liabilities	66,8	37,9
Total current liabilities	353,5	306,3
Total equity and liabilities		3 385,7		2 568,9

30

Cash-flow statement

			2019	2018
In millions of euros
Net income for the year	37,0	13,5
Elim. depreciation. amortisation and provisions	83,8	63,5
Elim. cost of net financial debt	79,0	65,6
Other non-cash income and expenses	39,6	22,4
Impact of changes in working capital	(44,5)	(6,0)
Taxes paid (received)	(10,4)	(2,7)
Net cash flow from operating activities		184,5	156,5
Acquisitions / (disposals) of subsidiaries, net of cash acquired /
(disposed)	(25,9)	(18,0)
Acquisitions (disposals) of tangible and intangible assets	(763,9)	(483,5)
Chnage in financial assets	(23,2)	(31,4)
Dividends and investments grants received	0,8	0,8
Net cash flows used in investment activities		(812,3)	(532,1)
Capital increase	18,6	439,6
Proceeds (repayments) from borrowings	639,1	251,6
Interest paid	(72,0)	(62,6)
Dividends paid	(4,1)	(3,8)
Net cash flows from financing activities		581,6	624,8
Impact of foreign exchange rate fluctuation	2,8	(5,1)
Change in cash		(43,3)	244,1
Opening cash balance	503,8	259,7
Closing cash balance	460,5	503,8
Net cash flow as shown in the balance sheet		(43,3)	244,1

31

Capacity commissioned in 2018

Project	Technology	Capacity (MW)	Country	COD Date
Les Champs d'Amour	Wind	9	France	February 2018
Griffith	Solar	36	Australia	March 2018
Parkes	Solar	66	Australia	March 2018
Pays Chaumontais	Wind	14	France	May 2018
Dubbo	Solar	29	Australia	June 2018
Le Chassepain	Wind	20	France	July 2018
Lagarde d'Apt	Solar	7	France	October 2018
Coleambally	Solar	189	Australia	November 2018
Lugos	Solar	12	France	December 2018
Bram	Solar	5	France	December 2018
Cap Découverte 4bis	Solar	5	France	December 2018
		Total capacity: 391 MW

32

Capacity added in 2019

Project	Technology	Capacity (MW)	Country	COD Date
Azur Est	Solar	9	France	March 2019
Corbas 3 & 4	Solar	8	France	March 2019
Bangweulu	Solar	54	Zambia	April 2019
Azur Stockage	Storage	6	France	May 2019
Corbas 1 & 2	Solar	8	France	May 2019
Auxois Sud 2	Wind	16	France	June 2019
Numurkah	Solar	128	Australia	August 2019
Irish wind farms(1)	Wind	53	Ireland	August 2019
Les Hauts Chemins	Wind	14	France	August 2019
Miremont	Solar	10	France	October 2019
Saint-Avit	Solar	11	France	October 2019
Paradise Park	Solar	51	Jamaïca	November 2019
		Total capacity: 369 MW

(1) Acquired in August 2019 rates

33

Total portfolio capacity

In MW	31.12.2019	31.12.2018	Change
Assets in operation(1)	1 847	1 478	+369
Assets under construction	1 193	764	+429
Subtotal, assets in operation or under construction(1)	3 040	2 241	+799
Projects awarded	1 082	899	+183
Total Secured capacity	4 122	3 141	+981
Tender ready projects	1 563	1 203	+360
Advanced development projects	4 966	3 321	+1 645
Total Advanced pipeline capacity	6 529	4 525	+2 004
Total Portfolio capacity	10 651	7 665	+2 986
Early stage projects	>4 GW	>4 GW

A total portfolio capacity of 10,7 GW, up 3 GW compared to end-2018

(1) Restated for the biomass business sold in September

34

Secured portfolio

In MW	31.12.2019	31.12.2018	Change
MW in operation (1)	1 847	1 478	+369
Europe-Africa	813	624	+189
Australia	881	753	+128
Americas	152	101	+51
MW under construction	1 193	764	+429
Europe-Africa	203	227	-24
Australia	264	342	-78
Americas	726	195	+531
MW awarded	1 082	899	+183
Total Secured portfolio	4 122	3 141	+981

(1) Restated for the biomass business sold in September

35

Financial agenda and contact information

Next events

• 15.05.2020: Q1 2020 revenue and operational data
• 28.07.2020: H1 2020 revenue and operational data
• 23.09.2020: H1 2020 results
• 09.11.2020: 9M 2020 revenue and operational data

Investor relations

• [e-mail]

36

Thank you for listening

ARGENTINA

AUSTRALIA

COLOMBIA

EL SALVADOR

FINLAND

FRANCE

IRELAND

JAMAICA

MEXICO

MOZAMBIQUE

PORTUGAL

USA

ZAMBIA