ENCAVIS AG — Earnings Release 2017

Mar 23, 2018

Earnings Call FY2017

Hamburg, 23 March 2018

HIGHLIGHTS

Financial Year 2017

• Operating results outperform Guidance 2017

• Favourable meteorological conditions added to key figures

• Successful completion of squeeze-out of CHORUS (now Encavis Asset Management)

• Successful implementation of measures to increase organizational efficiency

• Successful placement of EUR 97m hybrid convertible accountable as equity according to IFRS

• Dividend increase to 22 Eurocent (2016: 20 Eurocent) according to dividend policy 2017-2021

Business update

• Acquisition of solar and wind parks with a total power generation of >150 MW

• Successful entry into the Danish and Dutch renewables market

• Strategic alliances with project developers to secure early access to an attractive acquisition pipeline with Solarcentury (UK) and ISIF/Power Capital (Ireland) ~1.2 GW over three years

• Additionally, attractive pipeline of assets on hand & currently under review (~300MW)

EARNINGS GUIDANCE 2017 (ADJUSTED GUIDANCE PUBLISHED ON 24 AUGUST 2017)

Outperformance on all KPIs

Operating key figures (in mEUR)	2016	Guidance 2017	Result 2017	Outperformance in %
Revenue	141.8	>215	222.4	+3%
EBITDA	106.1	>160	166.8	+4%
EBITDA margin	74.8%	74%	75.0%	-
EBIT	61.6	>97	100.4	+4%
EBIT margin	43.4%	45%	45.1%	-
Cashflow	103.8	>150	153.0	+2%

POWER PRODUCTION 2017 BY SEGMENTS – POSITIVE WEATHER EFFECTS AUG – DEC 2017

WEATHER EFFECTS SUPPORTED TO THE OUTPERFORMANCE OF THE GUIDANCE 2017

Revenues >215 222.4 4.3 EBITDA >160 166.8 4.3	Operating P&L (in mEUR)	Guidance 2017	Result 2017	Weather related effects	Results 2017 adjusted for
					weather effects
					218.1
					162.5
	EBIT	>97	100.4	4.3	96.1

! Operating results adjusted for weather effects – results still in line with expectations

2017: FULL YEAR EFFECT OF TAKEOVER OF CHORUS CLEAN ENERGY AG

Encavis AG (Hamburg)

Core Business

• Acquisition of PV/Wind parks

• Project Financing

• Legal

• Technical & commercial operations

Headquarter functions

• Corporate Finance

• Controlling

• Communications/IR

• HR

• Group Accounting (IFRS)

Encavis Technical Services GmbH

Technical Services

• Technical Management and operation

• maintenance,

• Monitoring

• fault management

• performance analysis

100% Encavis Asset Management AG

Asset Management (institutional clients)

• Sales/Marketing Activities

• Fund structuring

• Project financing

• Asset Sourcing

• Administration

CHORUS TAKEOVER: "PROMISED AND DELIVERED"

1	Strong economics for the take-over	CHORUS take-over was accretive: EPS development
2	Platform for growth, increased scale and geographical footprint	Greater pipeline reach: Invest in larger projects in and outside of Germany (> 40 MW) Stronger visibility: Increased appearance as an acquirer for new projects, driving growth of the owned portfolio and the asset management business Internationalisation: Joint strategy to dedicate resources for entry into new markets
3	Optimization and best practice	Operational synergies: Benefit from internal technical management capabilities and better market access to third-party technical and commercial service providers Lean organisation: Streamlining of commercial functions and termination of CHORUS–listing
4	Improved capital markets profile and awareness	Higher visibility: Market capitalization of 860m, representing one of the largest independent listed renewable energy producers in Europe Higher flexibility: Access to new investors and alternative growth financing e.g. mezzanine capital

1) OPERATING EPS IN 2017 IN COMBINATION WITH STRONG EQUITY RATIO > HIGHLY LEVERED EPS FROM 2015

2015	Acquisition of parks with high leverage due to the participation rights capital from Gothaer insurance as well as positive meteorological conditions lead to high EPS and reduction in equity ratio
2016	Takeover of CHORUS (first consolidation Q4 2016) with limited income contribution and substantial increase in shares due to share swap financing of the transaction leads to a fall in EPS
2017	In the first year of full consolidation of CHORUS the EPS surpass all previous years (accretive deal) and in addition profits from positive weather conditions

2

2) ONE OF THE LEADING EUROPEAN IPPS IN THE RENEWABLES SECTOR WITH INSTALLED CAPACITY OF >1.5 GW

WIND PARKS		OWN ASSETS	ASSET MANAGEMENT
Germany		215 MW	273 MW
France	. .	36 MW	85 MW
Austria	$\equiv$	36 MW
Finland	$\blacksquare$		13 MW
United Kingdom	$\frac{N}{2}$	-	18 MW
Sweden	æ		10 MW
Italy	n n	6 MW
Denmark	Æ	25 MW
Total		318 MW	399 MW
SOLAR PARKS		OWN ASSETS	ASSET MANAGEMENT
Germany	$\equiv$	255 MW	12 MW
Italy	n n	147 MW	7 MW
France	n n	202 MW	12 MW
United Kingdom	$rac{N}{2}$	127 MW
Netherlands		92 MW
Total		824 MW	31 MW
GROUP TOTAL			1.571 MW

! In 2017 + 2018 additional solar and wind parks with a capacity of ~200 MW have been acquired

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2) TOP PARTNER FOR EUROPEAN INSTITUTIONALS AND PROJECT DEVELOPERS

Strong position as investor and partner for project developers

> Strategic Partnerships

• Solarcentury 1.1 GW over the next three years

• Partnership with Ireland Strategic Investment Fund (ISIF) and Power Capital co-investing in 120 MW

• Successful new market entries

• Denmark, Netherlands

• Managing larger projects

• e.g. PV park in NL >40 MW

3) OPTIMIZATION AND BEST PRACTICE – INCREASING GROUP EFFICIENCY

• Termination of CHORUS-listing leads to cost savings of some 1 mEUR p.a.

• Termination of third party technical services for CHORUS PV parks and integration into the technical service unit Encavis Technical Services; 12 PV parks with 53 MW already transferred (ahead of schedule, 20 MW planned at this point in time)

• Re-Structuring and tender of insurance contracts leads to savings of around 600 TEUR p.a. and better insurance coverage for all existing parks to the benefit of shareholders and institutional investors

• Further measures in discussion

4

4) ENCAVIS PROFITS FROM IMPROVED CAPITAL MARKETS PROFILE

Higher awareness and strong position

• Market Cap of ~850 mEUR gives access to new investors and financing instruments

• Positioned in the SDAX (also after amendments to the indices as announced by Deutsche Börse)

• Increasing number of roadshow activities and investor meetings/calls

Successful growth financing & outlook

• Successful placement of hybrid convertible in 2017 worth 97 mEUR as mezzanine financing that can be accounted for as equity according to IFRS

• Debt financing in 2017 of some 77 mEUR

Priorities in future growth financing

• Taking advantage of low interest via debt financing and note loans/green bonds

• Making use of further alternative mezzanine financing instruments

REVENUE BY SEGMENT IN MEUR

70% of the total generating capacity is attributable to the PV segment which accounts for 76% of the revenue

	Solar	Wind
MW	70%	30%
MWh	57%	43%
Revenue	76%	23%

OPERATING RESULTS 2017 BY SEGMENT

Operating P&L	Solarparks	Technical Services	Windparks	Asset Management	HQ
Revenue	168.9	0.3	49.5	3.7	-
EBITDA	134.2	1.3	36.4	0.9	-6.0
EBITDA margin	79%	38%	74%	24%	-
EBIT	83.3	1.3	21.7	0.3	-6.2
EBIT margin	49%	38%	44%	8%	-

! All costs associated with operating activities (personnel and other costs) were distributed to the segments

SUCCESSFUL PLACEMENT OF HYBRID CONVERTIBLE INCREASED EQUITY RATIO TO ~28%

Assets in mEUR

Liabilities in mEUR

DIVIDEND POLICY 2016 - 2021

Dividend policy reflects increasing cashflows from PV/wind parks over time

• 50% increase of nominal dividend until 2021 (compared to 2016) based on the existing PV/wind park portfolio as of March 31, 2017

• Further acquisitions of PV/wind parks will positively contribute to the dividend potential

Dividend (EUR-Ct./share)

2011 2012 2013 2014 2015 2016 2017 2021e

IFRS P&L 2017

Valuation & integration effects

TEUR	2016	2017
Revenue	141,783	222,432
Other income	29,399	31,245
Material costs	-1,326	-1,514
Personnel costs	-8,541	-10,972
Other costs	-37,562	-50,773
EBITDA	123,752	190,417
Depreciation	-64,028	-102,493
EBIT	59,724	87,924
Financial costs (net)	-48,774	-47,161
EBT	10,950	40,763
Tax	857	-13,059
EAT	11,807	27,704
EPS (non diluted)	0.13	0.20

TEUR	2016	2017	Change yoy
Revenue	141,78	222,43	+57%
Other income	29,399	31,245
Material costs	-1,326	-1,514
Personnel costs	-8,541	-10,972	+28%

TEUR	2016	2017	Change yoy
Revenue	141,78	222,43	+57%
Other income	29,399	31,245
Material costs	-1,326	-1,514
Personnel costs	-8,541	-10,972
Other costs	-37,562	-50,773	+35%

TEUR	2016	2017	Change yoy
Revenue	141,78	222,43	+57%
EBITDA	123,752	190,417	+54%
Depreciation	-64,028	-102,493	+60%
EBIT	59,724	87,924	+47%
Financial costs (net)	-48,774	-47,161	-3%

Outlook 2018 Growth path continues

"GUIDANCE 2018"

Growth path continues

Operating key figures (in mEUR)	Result 2017	Weather adjusted (wa) figures 2017	Guidance 2018	Change Guidance 2018 - (wa) figures 2017 in %
Revenue	222.4	218.4	>240	+10%
EBITDA	166.8	162.5	>175	+8%
EBIT	100.4	96.1	>105	+9%
Cashflow	153.0	n.a.	>163	+7%
EPS	0.29	0.26	>0.30	+15%

Guidance is based on the existing portfolio as of March 16, 2018, and does not take into account future acquisitions

PARKS ACQUIRED IN Q4 2017 & Q1 2018 OF SOME 100 MW WILL SHOW MAIN REVENUE CONTRIBUTION IN 2019 Scheduled completion of the parks in Q4 2018

Projekt	Jan	Feb	Mrch	Apr	May	June	July	Aug	Sep	Oct	Nov	Dec
PV Nyrstar 44 MW
PV Enerstroom 48 MW
Wind Debstedt 2 13,5 MW

"GUIDANCE 2018"

Showcase for 2019 including ~100 MW to be connected to the grid end of 2018

Operating P&L (in mEUR)	Result 2017	Weather adjusted (wa) FY2017	Guidance 2018	Change Guidance 2018 - (wa) FY2017 in %			2019	2019 – (wa) FY2017 in %
Revenues	222.4	218.4	>240	+10%			~250	+14%
EBITDA	166.8	162.5	>175	+8%
EBIT	100.4	96.1	>105	+9%
Cashflow	153.0	n.a.	>163	+7%
EPS	0.29	0.26	>0.30	+15%			~0.35	+35%

OPERATING EPS IN 2017 IN COMBINATION WITH STRONG EQUITY RATIO > HIGHLY LEVERED EPS FROM 2015

2018 - 2019 EPS increases slightly in 2018 as 100 MW of newly acquired parks will be connected to the grid in Q4 2018. With the full year effect of theses parks kicking in in FY2019 EPS will increase to 35 Eurocent

GUIDANCE 2018 BY SEGMENTS

Operating P&L mEUR	Solarparks	Technical Services	Windparks	Asset Management	HQ
Revenue	>175	(internal revenues)	>58	>7	-
EBITDA	>140	>1	>40	>1	<-7
EBITDA margin	80%	32%	69%	14%	-
EBIT	>86	>1	>24	>1	<-7
EBIT margin	49%	30%	41%	14%	-

UPSIDE POTENTIAL & OUTLOOK

+	Renewables continue to be high growth market
+	Upside potential by favourable meteorological conditions
+	Strong growth pipeline with leading European project developers for some 1.2 GW over the next three years
+	Free funds available for a total investment volume of ~160 mEUR
+	Access to alternative & attractive growth financing e.g. mezzanine capital
+	Market consolidation leaves room for inorganic growth
+	Increasing competitiveness of renewables opens growth market for PPAs and new countries/markets